**EXHIBIT10.2**

 

**AMENDEDAND RESTATED REVOLVING LINE OF CREDIT NOTE**

 
| $6,750,000.00 | May 29, 2009 |
|---------------|-------------------|

 

1.             FORVALUE RECEIVED, **HERON LAKE BIOENERGY, LLC**, aMinnesota limited liability company (the “Borrower”), hereby promises to pay tothe order of **AGSTAR FINANCIAL SERVICES, PCA**, anUnited States instrumentality (the “Lender”), the principal sum of Six MillionSeven Hundred Fifty Thousand and No/100ths ($6,750,000.00) Dollars, or so muchthereof as may be advanced to, or for the benefit of, the Borrower and be outstanding,with interest thereon, to be computed on each advance from the date of itsdisbursement as set forth herein pursuant to that certain Fourth Amended andRestated Master Loan Agreement  dated October 1,2007, by and between the Lender and the Borrower (as it may be amended,modified, supplemented, extended or restated from time to time, collectively,the **“MLA”**), and in that certain FifthSupplement to the MLA, dated November 1, 2007, by and between the Lenderand the Borrower, as amended by that certain Amendment No. 1 to FifthSupplement dated November 17, 2008, as further amended by that certainAmendment No. 2 to Fifth Supplement dated February 1, 2009, and asfurther amended by that certain Amendment No. 3 to Fifth Supplement ofeven date herewith  (as it may beamended, modified, supplemented, extended or restated from time to time,collectively, the **“Fifth Supplement”**),and which remains unpaid, in lawful money of the United States and immediatelyavailable funds.  This Amended andRestated Revolving Line of Credit Note (the “**Note**”)is issued pursuant to the terms and provisions of the MLA and the FifthSupplement and is entitled to all of the benefits provided for in the MLA andthe Fifth Supplement.  All capitalizedterms used and not defined herein shall have the meanings assigned to them inthe MLA and the Fifth Supplement.

 

2.             The outstanding principal balanceof this Note shall bear interest at a variable rate determined by Lender to bethree and one-quarter percent (3.25%) above the LIBOR Rate in effect on thefirst Advance pursuant to this Note, *provided, however,*atno time shall the rate of interest under this Note be less than six (6.0%)percent per annum until paid in full. Notwithstanding the foregoing, the rate of interest under this Note maybe adjusted by Lender pursuant to the provisions of the MLA and the FifthSupplement.

 

3.             The “LIBOR Rate” meansthe rate (rounded upward to the nearest sixteenth and adjusted for reservesrequired on Eurocurrency Liabilities (as hereinafter defined) for banks subjectto FRB Regulation D (as hereinafter defined) or required by any other federallaw or regulation, quoted by the British Bankers Association (the “BBA”) at11:00 a.m. London time two Banking Days (as hereinafter defined) before the commencement of the InterestPeriod for the offering of U.S. Dollar deposits in the London interbank marketfor am Interest Period  of one month, aspublished by Bloomberg or another major information vendor listed on BBA’sofficial website.  “**Banking Day**”shall mean a day on which Lender is open for business, dealings in U.S. dollardeposits are being carried out in the London interbank market, and banks areopen for business in New York City and London, England.  “**Eurocurrency Liabilities**”has the meaning as set forth in FRB Regulation D.  “**FRB Regulation D**”means Regulation D as promulgated by the Board of Governors of the FederalReserve System, 12 CFR Part 204, as amended from time to time.

 

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4.             Therate of interest due hereunder shall initially be determined as of the datehereof and shall thereafter be adjusted, as and when, and on the same day that,the LIBOR Rate changes. All such adjustments to the rate of interest shall bemade and become effective as of the date of any change in the LIBOR Rate and shallremain in effect until and including the day immediately preceding the nextsuch adjustment (each such day hereinafter being referred to as an “**Adjustment Date**”). All such adjustments to said rate shall be made and become effective asof the Adjustment Date, and said rate as adjusted shall remain in effect untiland including the day immediately preceding the next Adjustment Date.  Interest hereunder shall be computed on thebasis of a year of three hundred sixty-five or three hundred sixty-six (365 or366) days, but charged for actual days principal is outstanding.

 

5.             Beginningon the first (1st) day of May,2009, and continuing on the first (1st) day of each succeeding month thereafter until theMaturity Date, the Borrower shall make monthly payments of accrued interest.

 

6.             Theoutstanding principal balance hereof, together with all accrued interest, ifnot paid sooner, shall be due and payable in full on November 1, 2009 (the“Maturity Date”).

 

7.             Allpayments and prepayments shall, at the option of the Lender, be applied firstto any costs of collection, second to any late charges, third to accruedinterest and the remainder thereof to principal.

 

8.             ThisNote may be prepaid at any time, at the option of the Borrower, either in wholeor in part, subject to the obligation of the Borrower to compensate the Lenderfor any loss, cost or expense as a result of such prepayment as set forth inthe Fifth Supplement.  This Note issubject to mandatory prepayment, at the option of the Lender, as provided in theMLA and the Fifth Supplement.

 

9.             In addition to therights and remedies set forth in the MLA and the Fifth Supplement: (i) ifthe Borrower fails to make any payment to Lender when due (including, withoutlimitation, any purchase of equity of Lender when required ) under this Note,then at Lender’s option in each instance, such obligation or payment shall bearinterest from the date due to the date paid at 2% per annum in excess of therate of interest that would otherwise be applicable to such obligation orpayment under this Note; (ii) upon the occurrence and during thecontinuance of an Event of Default beyond any applicable cure period, if any,at Lender’s option in each instance, the unpaid balances under this Note shallbear interest from the date of the Event of Default or such later date asLender shall elect at 2% per annum in excess of the rate(s) of interestthat would otherwise be in effect under the terms of this Note; (iii) afterthe Maturity Date, whether by reason of acceleration or otherwise, the unpaidprincipal balance of this Note (including without limitation, principal,interest, fees and expenses) shall automatically bear interest at 2% per annumin excess of the rate of interest that would otherwise be in effect under thisNote.  Interest payable at the DefaultRate shall be payable from time to time on demand or, if not sooner demanded,on the last day of each calendar month.

 

10.           If the Borrowerfails to make any payment to Lender within ten (10) days of the due datethereof (including, without limitation, any purchase of equity of Lender whenrequired), the Borrower shall, in addition to such amount, a late charge equalto five percent (5%) of the amount of such payment.

 

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11.           Uponthe occurrence at any time of an Event of Default or at any time thereafter,the outstanding principal balance hereof plus accrued interest hereon plus allother amounts due hereunder shall, at the option of the Lender, be immediatelydue and payable, without notice or demand and Lender shall be entitled toexercise all remedies provided in this Note, the MLA, the Fifth Supplement, orany of the Loan Documents.

 

12.           Theoccurrence at any time of an Event of Default or at any time thereafter, theLender shall have the right to set off any and all amounts due hereunder by theBorrower to the Lender against any indebtedness or obligation of the Lender tothe Borrower.

 

13.           TheBorrower promises to pay all reasonable costs of collection of this Note,including, but not limited to, reasonable attorneys’ fees paid or incurred bythe Lender on account of such collection, whether or not suit is filed withrespect thereto and whether or not such costs are paid or incurred, or to bepaid or incurred, prior to or after the entry of judgment.

 

14.           Demand,presentment, protest and notice of nonpayment and dishonor of this Note arehereby waived.

 

15.           ThisNote shall be governed by and construed in accordance with the laws of theState of Minnesota.

 

16.           The Borrower herebyirrevocably submits to the jurisdiction of any Minnesota state court or federalcourt over any action or proceeding arising out of or relating to this Note,the MLA, the Fifth Supplement and any instrument, agreement or document relatedhereto or thereto, and the Borrower hereby irrevocably agrees that all claimsin respect of such action or proceeding may be heard and determined in suchMinnesota state or federal court. The Borrower hereby irrevocably waives, tothe fullest extent it may effectively do so, the defense of an inconvenientforum to the maintenance of such action or proceeding.   Nothing in this Note shall affect the rightof the Lender to bring any action or proceeding against the Borrower or itsproperty in the courts of any other jurisdiction to the extent permitted bylaw.

 

17.           Theexecution and delivery of this Amended and Restated Revolving Line of CreditNote shall supercede and replace that certain Revolving Line of Credit Notedated November 19, 2007, which shall be of no force or effect.

 

{SIGNATURE PAGE TO IMMEDIATELY FOLLOW}

 

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SIGNATURE PAGE TO

AMENDED AND RESTATED REVOLVING LINE OF CREDITNOTE

EXECUTED BY

HERON LAKE BIOENERGY, LLC

IN FAVOR OF

AGSTAR FINANCIAL SERVICES, PCA

DATED: May 29, 2009

 
|   | HERON LAKE BIOENERGY, LLC             |
|--------|---------------------------------------|
|   | a Minnesota limited liability company |
|   |                                  |
|   |                                  |
|   | /s/ Robert J. Ferguson                |
|   | By: Robert J. Ferguson                |
|   |   Its: President            |

 

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