EXHIBIT 10.1


 


AMENDMENT NO. 3 TO


FIFTH SUPPLEMENT


TO THE MASTER LOAN AGREEMENT


(REVOLVING LINE OF CREDIT LOAN)


 


This
Amendment No. 3 to the Master Loan Agreement (Revolving Line of Credit
Loan) (this “Amendment”) is effective as of May 29,
2009, by and between HERON LAKE BIOENERGY, LLC,
a Minnesota limited liability company (“Borrower”) and AGSTAR FINANCIAL SERVICES, PCA (“Lender”).


 


RECITALS


 


A.            Lender has extended various credit
facilities to Borrower for the purposes of acquiring, constructing, equipping,
furnishing and operating an ethanol production facility in Jackson County,
Minnesota, pursuant to that certain Fourth Amended and Restated Master Loan
Agreement dated as of October 1, 2007, as the same may be amended,
supplemented, modified, extended or restated from time to time (the “MLA”); that certain Third Supplement to the Master Loan
Agreement (Term Loan) dated as of October 1, 2007, as the same may be
amended, supplemented, modified, extended or restated from time to time (the “Third Supplement”); that certain Fourth Supplement to the
Master Loan Agreement (Term Revolving Loan) dated as of October 1, 2007,
as the same may be amended, supplemented, modified, extended or restated from
time to time (the “Fourth Supplement”);
and that certain Fifth Supplement to the Master Loan Agreement (Revolving Line
of Credit Loan) dated as of November 19, 2007, as amended by that certain
Amendment No. 1 to Fifth Supplement to the Master Loan Agreement dated November 17,
2008, as further amended by that certain Amendment No. 2 to Fifth
Supplement to the Master Loan Agreement dated February 1, 2009, as the
same may be amended, supplemented, modified, extended or restated from time to
time (collectively, the “Fifth Supplement”).  The MLA, Third Supplement, Fourth Supplement
and Fifth Supplement are referred to collectively hereinafter as the “Loan Agreement”).


 


B.            Borrower has requested that Lender
amend certain provisions of the Fifth Supplement, and Lender has agreed to such
amendments upon the terms and conditions set forth herein.


 


C.            Unless otherwise expressly defined
herein, capitalized terms used herein shall have the same meaning ascribed to
them in the MLA or the Fifth Supplement, as applicable.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the premises herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto herby agree as follows:


 

















 


1.             Amendments
to Fifth Supplement.


 


(a)           Section 1:  The following defined terms in the Fifth
Supplement are hereby amended and restated to read as follows:


 


“Borrowing
Base” means, at any time, the lesser of: 
(a) $6,750,000.00; or (b) the sum of:  (i) 75% of Borrower’s Eligible Accounts
Receivable; plus (ii) 75% of Borrower’s Eligible Inventory.


 


“Revolving
Line of Credit Loan Maturity Date” shall mean November 1, 2009.


 


(b)         Section #2 of the Fifth Supplement
is hereby amended and restated to read as follows:


 


Revolving Loan
Commitment.  On the terms and conditions set forth in the
MLA and this Fifth Supplement, Lender agrees to make one or more advances
(collectively, the “Revolving Line of Credit
Loan”) to the Borrower, during the period beginning on the
Availability Date (as defined in Section 5 of this Fifth Supplement) and
ending on the Business Day immediately preceding the Revolving Line of Credit
Loan Maturity Date (as hereinafter defined in this Section 2) (the “Revolving Line of Credit Loan Termination Date”), in an aggregate principal amount outstanding at any one
time not to exceed $6,750,000.00 (the “Revolving
Line of Credit Loan Commitment”) provided, however, that at no time shall the Outstanding
Revolving Advance exceed the Borrowing Base. 
The Revolving Line of Credit Loan Commitment shall expire at 12:00 noon
Central time on the Revolving Line of Credit Loan Maturity Date.  Subject to Section 7 of this Fifth Supplement, under
the Revolving Line of Credit Loan Commitment amounts borrowed and repaid or
prepaid may be reborrowed at any time prior to and including the Revolving Line
of Credit Loan Termination Date.


 


(c)          Section #6(f) of the Fifth
Supplement is hereby amended by the addition of the following subsection:


 


(iv)        Deposit Accounts.  The Borrower shall have established and shall
maintain all of its primary deposit accounts at Home Federal Savings Bank.


 


(d)         Section #8 of the Fifth Supplement
is hereby amended and restated to read as follows:


 


Interest Rate.  Subject to the
provisions of Sections 9 and 11 of this Fifth Supplement, the Revolving Line of
Credit Loan shall bear interest at a rate equal to the LIBOR Rate plus 325
basis points.  The computation of
interest, amortization, maturity and other terms and conditions of the
Revolving Line of Credit Loan shall be as provided in the Revolving Line of
Credit Note, provided, however, in no event shall the applicable rate exceed
the maximum nonusurious interest rate, if any, that at any time, or from time
to time, may be contracted for, taken, reserved, charged, or received under
applicable state or federal laws (the “Maximum Rate”).  Notwithstanding the foregoing, in no event
shall the rate of interest under the Revolving Line of Credit Loan be less than
six (6.0%) percent per annum until paid in full.


 


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2.             Conditions to Effectiveness of this Amendment.  This Amendment shall become effective as
of the date hereof upon the satisfaction of the conditions precedent stated in
that certain Amendment No. 1 to Fourth Amended and Restated Master Loan
Agreement of even date herewith.


 


3.             Representations
and Warranties.  Borrower
hereby represents to Lender that, after giving effect to this Amendment:


 


(a)           All of the representations and
warranties of Borrower contained in the MLA and in each other Loan Document are
true and correct in all material respects as though made on and as of the date
hereof.


 


(b)           As the date hereof, except as
otherwise specifically stated herein, no Event of Default has occurred and is
continuing.


 


4.             Miscellaneous.


 


(a)           Effect; Ratification.  The amendments set forth herein are effective
solely for the purposes set forth herein and shall be limited precisely as
written, and shall not be deemed to (i) be a consent to, or an
acknowledgment of, any amendment, waiver or modification of any other term or
condition of the Loan Agreement or (ii) prejudice any right or remedy
which Lender may now have or may have in the future under or in connection with
the Loan Agreement, as amended hereby, or any other instrument or agreement
referred to therein. It is further understood and agreed by and between the
Borrower and the Lender that all other terms and provisions of the Loan
Agreement shall remain in full force and effect, enforceable by the Lender
against the Borrower as fully as though no amendments had been made hereby, and
this Amendment shall not be deemed to hinder, compromise or lessen the
enforceability of the Loan Agreement, the Notes, or any mortgage, security
interest, or guaranty securing repayment of the Loans, in any way.  Each reference in the Loan Agreement and in
any other Loan Document to the “Fifth Supplement” shall mean the Fifth
Supplement, as amended hereby.


 


(b)           Loan Documents.  This Amendment is a Loan Document executed
pursuant to the MLA and shall be construed, administered and applied in
accordance with the terms and provisions thereof.


 


(c)           Defined Terms.  All terms used and
not otherwise defined herein shall have the meanings assigned to them in the
MLA or the Fifth Supplement, as applicable.


 


(d)           Counterparts.  This Amendment may be executed in any number
of counterparts, each such counterpart constituting an original and all of
which when taken together shall constitute one and the same instrument.


 


(e)           Severability.  Any provision contained in this Amendment
which is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid
without affecting the remaining provisions of this Amendment in that
jurisdiction or the operation, enforceability or validity of such provision in
any other jurisdiction.


 


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(f)            GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA.


 


(g)           WAIVER OF JURY TRIAL.  THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT TO WHICH IT IS A
PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.


 


{SIGNATURE PAGE FOLLOWS}


 


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SIGNATURE PAGE TO


AMENDMENT NO. 3 TO


FIFTH SUPPLEMENT TO THE MASTER LOAN AGREEMENT


(REVOLVING LINE OF CREDIT LOAN)


BY AND BETWEEN


HERON LAKE BIOENERGY, LLC


AND


AGSTAR FINANCIAL SERVICES, PCA


DATED AS OF:  May 29, 2009


 


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their respective duly authorized officers as of the date first
written above.


 


BORROWER:


 


HERON
LAKE BIOENERGY, LLC,


a
Minnesota limited liability company


 


 


	
  By:

  	
  /s/
  Robert J. Ferguson

  	
   

  
	
   

  	
   Robert J.
  Ferguson

  	
   

  
	
   

  	
   Its:
  President

  	
   

  



 


LENDER:


 


AGSTAR
FINANCIAL SERVICES, PCA,


a
United States corporation


 


 


	
  By:

  	
  /s/
  Mark Schmidt

  	
   

  
	
   

  	
   Mark
  Schmidt

  	
   

  
	
   

  	
   Its:  Vice President

  	
   

  



 


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