Exhibit
10.1


 


SECOND
AMENDMENT TO THE CREDIT AGREEMENT


 


This
SECOND AMENDMENT TO THE CREDIT AGREEMENT (this “Second
Amendment”) is made and entered into effective as of May 21,
2009, by and between GOLDEN GRAIN ENERGY, LLC, an Iowa limited liability company
(“Borrower”),
and HOME FEDERAL SAVINGS BANK, a federally chartered stock savings bank (“Lender”). This Second Amendment
amends the Master Amended and Restated Credit Agreement between Borrower and
Lender (the “Master Agreement”)
as supplemented by the First Supplement to the Master Amended and Restated
Credit Agreement (the “First Supplement”), the Second Supplement to the Master
Amended and Restated Credit Agreement (the “Second
Supplement”), and the Third Supplement to the Master Amended and
Restated Credit Agreement (the “Third Supplement”),
each dated as of November 14,
2006, and as amended by that certain First Amendment to the Credit Agreement
dated as of August 1, 2007 (as the same may be amended, restated, or
otherwise modified from time to time, collectively known as the “Credit Agreement.”).


 


RECITALS:


 


WHEREAS, Lender has made certain loans and other credit accommodations
available to Borrower under the original Credit Agreement; and


 


WHEREAS, Borrower and Lender desire to amend the Credit Agreement as
hereinafter set forth.


 


NOW, THEREFORE, Borrower and Lender agree as follows:


 


1.                                       Definitions. 
Capitalized terms used herein without definition have the meanings
specified in the Credit Agreement. 
Definitions in this Amendment control over inconsistent definitions in
the Credit Agreement, but only to the extent the defined terms apply to the
subject matter of this Amendment. 
Definitions set forth in the Credit Agreement control for all other
purposes.


 


2.                                       Waiver. 
On and as of the dates described on Exhibit A, the Borrower
has failed to comply with certain financial covenants set forth in the Credit
Agreement.  The Borrower’s covenant
defaults are more specifically set forth on Exhibit A attached
hereto (the “Specified Events of Default”).  Upon the terms and subject
to the conditions set forth in this Amendment, the Lender hereby waives the
Specified Events of Default. This waiver shall be effective only in this
specific instance and for the specific purpose for which it is given, and this
waiver shall not entitle the Borrower to any other or further waiver in any
similar or other circumstances.


 


3.                                       Subordinated
Indebtedness. 
Notwithstanding Section 6.01 of the Master Agreement, Lender hereby
consents to the Borrower obtaining up to $2,500,000 in Indebtedness from
Renewable Products Marketing Group (the “RPMG Sub-Debt”);
provided, however, that (i) such Indebtedness be subordinated to the
Obligations pursuant to a subordination agreement in form and substance
satisfactory to Lender in its sole discretion (the “RPMG  Subordination Agreement”)
and (ii) the terms of such Indebtedness are not materially different from
the terms set forth in the form of Subordinated Promissory Note attached hereto
as Exhibit B.


 

















 


4.                                       Amendment to Master
Agreement.


 


(a)                                  Working Capital Covenant. 
As of the date of this Second Amendment, the Master Agreement is hereby
amended by deleting each reference to “working capital” contained in Section 5.02
and substituting “Working Capital” therefor.


 


(b)                                 Tangible Net Worth Covenant. As of the date of this Second
Amendment, the Master Agreement is hereby amended by deleting Section 5.03
in its entirety and substituting the following therefor:


 


Section 5.03  Tangible Net Worth.  Borrower’s Tangible Net Worth will
be, and will not fall below at any time, $60,000,000.  Borrower will be measured for compliance with
this covenant on a quarterly basis starting with Borrower’s fiscal quarter
ending April 30, 2009.


 


(c)                                  Definitional Changes. 
As of the date of this Second Amendment, Annex I of the Master Agreement
is hereby amended by adding the following definitions of “RPMG Sub-Debt” and “Working
Capital” thereto and deleting the definition of “Tangible Net Worth” contained
therein in its entirety and substituting the following therefor:


 


“RPMG
Sub-Debt” has the meaning set forth in the Second Amendment to
the Credit Agreement by and between Borrower and Lender dated as of May 21,
2009.


 


“Tangible
Net Worth” means, as of any date (a) the sum of (i) the
total assets of Borrower that should be reflected on Borrower’s consolidated
balance sheet as of such date prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests, if any, in
the stock and surplus of Subsidiaries, and (ii) the outstanding principal
amount of the RPMG Sub-Debt, less (b) the
sum of (i) Total Debt as of such date (other than the RPMG Sub-Debt), (ii) the
amount of appraisal surplus or any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the cost of
such assets acquired reflected on the consolidated balance sheet of Borrower as
of such date prepared in accordance with GAAP, and (iii) the net book
amount of all assets of Borrower that should be classified as intangible assets
on a consolidated balance sheet of the Borrower as of such date prepared in
accordance with GAAP.


 


“Working
Capital” means, as of any date (a) the current assets of
Borrower that should be reflected on Borrower’s consolidated balance sheet as
of such date prepared in accordance with GAAP, but excluding all amounts
properly attributable to minority interests, if any, in the stock and surplus
of Subsidiaries, minus (b) the current liabilities of Borrower that should
be reflected on Borrower’s consolidated balance sheet as of such date prepared
in accordance with GAAP.


 


(d)                                 Schedule of Investments. 
Schedule 6.04(a) to the Master Agreement is hereby amended and
restated in its entirety as set forth on Exhibit C attached
hereto.  For the avoidance of doubt, the
Investments on Schedule 6.04(a) hereto shall be considered as assets in
the 


 


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calculation of Tangible
Net Worth, except to the extent GAAP would require a different classification.


 


5.                                       Amendment to First,
Second and Third Supplements (Interest).  Effective as
of March 1, 2009, Section 5 of the First Supplement, Section 7
of the Second Supplement and Section 8 of the Third Supplement are amended
to add the following sentence to the end of each such section, respectively:


 


Notwithstanding anything
to the contrary contained in this section, in no event shall interest accrue on
the unpaid principal amount of the Loans described in this Supplement at a rate
less than six percent (6.0%) per annum at any time.


 


The Borrower acknowledges
and agrees that, notwithstanding the effective date of this Second Amendment,
it shall pay interest accruing on the Loans since March 1, 2009 at the
rate(s) after giving effect to this Second Amendment as if it had been
executed and delivered on March 1, 2009. The amount of such interest owing
by the Borrower under the Loans as of the date of this Second Amendment is
$277,736.45.


 


6.                                       Deferral of Principal
Payments on 2006 Expansion Loan.  Borrower has
requested that Lender defer the principal portion of the payments due under the
2006 Expansion Loan (as defined in the Third Supplement) on the first day of
each month, commencing on June 1, 2009 and concluding on May 1,
2010 (the “Deferral Period”).   Lender agrees to defer the principal
payments due under the 2006 Expansion Loan on the first day of each month
during the Deferral Period.   The principal deferred shall be deferred to
the final payment due under the 2006 Expansion Loan.  Borrower shall
continue to make the interest payments due under the 2006 Expansion Loan on the
first day of each month during the Deferral Period.    The principal
balance outstanding on May 1, 2010 under the 2006 Expansion Loan (less any
amounts deferred during the Deferral Period) will be reamortized over the
remaining period of the original 10 year amortization period for the 2006
Expansion Loan at the end of the Deferral Period.   Combined payments of
principal determined by the reamortization plus accrued interest on the 2006
Expansion Loan will be due commencing on June 1, 2010, with a like payment
of principal plus accrued interest on the 2006 Expansion Loan due on the first
day of each month thereafter, with a final payment of the principal deferred
during the Deferral Period, and any other amounts owing, in the absence of an
Event of Default, due on August 1, 2017.


 


7.                                       Effectiveness;
Conditions Precedent; Covenants.  This Second
Amendment will become effective upon (i) the delivery to Lender, in form
and substance satisfactory to Lender, of a counterpart of this Second Amendment; and (ii) Lender’s receipt of all
fees, including an origination fee equal to $23,5000, and other amounts due and
payable on or prior to the date hereof and all other fees and amounts for
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by Borrower pursuant to any Loan Document or any other
agreement with Lender.


 


8.                                       Representations; Events
of Default.  In order to induce Lender to execute this
Second Amendment, Borrower, as of the date of this Second Amendment,
hereby:  (a) makes and renews the
representations and warranties contained in Article III of the Master
Agreement, and (b) certifies to Lender that there are no
existing Defaults or Events of Default.


 


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Notwithstanding
the foregoing, Lender acknowledges that Borrower has not obtained a guarantee
of the Obligations from Corn Oil Bio-Solutions, LLC (“COBS”) as required by
Sections 3.14 and 4.10 of the Master Agreement.   Borrower agrees to
cause COBS to execute and deliver all instruments and documents required under Section 4.10
of the Master Agreement within 10 days after the date of this Second
Amendment.  Upon receipt of all such instruments and documents duly
executed by COBS within 10 days after the date of this Second
Amendment, Lender agrees to waive any default under any
agreement between Borrower and Lender resulting from Borrower’s failure to
secure such guarantee, including any Default or Event of Default as those terms
are defined in the Master Agreement.


 


9.                                       General. 
On and after the effectiveness of this Second Amendment, each reference
in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of
like import referring to the Credit Agreement, and each reference in the Loan
Documents to the Credit Agreement, will mean the Credit Agreement as amended by
this Second Amendment.  The Credit
Agreement, as so amended, is and will continue to be in full force and effect
and it and the other Loan Documents are hereby ratified and confirmed in all
respects.


 


10.                                 Counterpart Signatures. 
This Second Amendment may be executed by each party in one or more
counterparts, each of which will be deemed an original and all of which taken
together constitute one binding document.


 


[Signature page to
follow]


 


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


 


 


	
  LENDER:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  HOME FEDERAL SAVINGS
  BANK

  	
   

  	
  GOLDEN GRAIN ENERGY,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Eric Oftedahl

  	
   

  	
  By: 

  	
  /s/ Walter Wendland

  
	
  Name:

  	
  Eric Oftedahl

  	
   

  	
  Name:

  	
  Walter Wendland

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  President

  



 


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EXHIBIT A


 


COVENANT DEFAULTS


 


Working Capital (Section 5.02
of the Credit Agreement) from January 1, 2009 through and including May 15,
2009.


 


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EXHIBIT B


 


SUBORDINATED PROMISSORY NOTE


 


[See attached]


 


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EXHIBIT C


 


Schedule 6.04(a)


 


Investments


 


1.
Investment in Renewable Products Marketing Group.


 


2.
Investment in Renewable Products Marketing Group Holdings (Guardian Eagle).


 


3.
Investment in Absolute Energy, LLC.


 


4.
Investment in Homeland Energy LLC.


 


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