**Exhibit10.1**

 

**THIRD AMENDMENT TO MASTER LOAN AGREEMENT**

 

ThisTHIRD AMENDMENT TO MASTER LOAN AGREEMENT (this “**Amendment**”)is entered into as of September 10, 2010, by and between HOMELAND ENERGYSOLUTIONS, LLC, an Iowa limited liability company (“**Borrower**”),and HOME FEDERAL SAVINGS BANK, a federally chartered stock savings bankorganized under the laws of the United States (“**Lender**”).

 

RECITALS

 

A.           Borrower and Lender haveentered into a Master Loan Agreement dated November 30, 2007, as amended bythat certain First Amendment dated August 29, 2008, and as further amended bythat certain Second Amendment dated September 28, 2009, and a First Supplementdated November 30, 2007, a Second Supplement dated November 30, 2007, and aThird Supplement dated November 30, 2007 (collectively, the “**Loan Agreement**”) under which Lender agreed to extend certainfinancial accommodations to Borrower.

 

B.           Borrower has requested thatamounts being held in the Debt Service Reserve Account be released forprepayment of the Term Loan, and Lender has agreed to such release upon theterms and conditions set forth herein.

 

NOWTHEREFORE, in consideration of the facts set forth in the foregoing Recitals,which the parties agree are true and correct, and in consideration for enteringinto this Amendment and the related documents to be executed concurrentlyherewith or pursuant hereto, the parties agree as follows:

 

AMENDMENT

 

1.             Amendments toLoan Agreement.  Section 5.01(t)of the Loan Agreement is hereby amended and restated in its entirety, asfollows:

 

(t)            **DebtService Reserve Account**.  Upon demand by Lender, Borrower shall beunconditionally obligated to replenish the Debt Service Reserve Account to anamount equal to $10,000,000.00, without presentment, demand, protest, or otherformalities of any kind.  Amounts held inthe Debt Service Reserve Account shall be disbursed or applied to repayment ofthe Loans in such order and manner as Lender may elect in its sole discretion.  So long as no Event of Default exists, Lenderwill release the Debt Service Reserve Account and Borrower’s obligation toreplenish said account will terminate when Borrower achieves and maintainsTangible Net Worth of greater than or equal to sixty-five percent (65%) andcompliance with all covenants in this Agreement and the Supplements.  Notwithstanding the foregoing, amounts heldin the Debt Service Reserve Account may be disbursed or applied to repayment ofthe Loans prior to the time when Borrower has achieved and maintained TangibleNet Worth of greater than or equal to sixty-five percent (65%) with the priorwritten consent of Lender, in such order and manner as Lender may elect in itssole discretion; provided that Borrower is in compliance with all covenants inthis Agreement and the Supplements.  Inthe event Lender agrees to allow Borrower to disburse the amount held in theDebt Reserve Account early, Lender shall not demand that Borrower replenish theDebt Service Reserve Account until 

 

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afterBorrower’s Tangible Net Worth is calculated at the next applicable measurementdate.  For purposes of this Section 5.01(t)Borrower’s Tangible Net Worth shall be measured quarterly based on Borrower’squarterly financial statements provided pursuant to Section 5.01(c).

 

2.            Effect on Loan Agreement.  Except as expressly amended by thisAmendment, all of the terms, conditions, covenants and agreements of the LoanAgreement shall be unaffected by this Amendment and shall remain in full forceand effect.  Nothing contained in thisAmendment shall be deemed to constitute a waiver of any events of default or toaffect, modify, or impair any of the rights of Lender as provided in the LoanAgreement.

 

3.             ConditionsPrecedent to Effectiveness of this Amendment.  The obligations of the Lender hereunder aresubject to the conditions precedent that Lender shall have received thefollowing, in form and substance satisfactory to Lender:

 

a.             this Amendmentduly executed by Borrower and Lender;

 

b.             $10,000,000.00from Borrower, by the method provided in Section 2.12 of the Loan Agreement, asand for prepayment of all accrued and unpaid interest on the Term Loan as ofthe date of this Amendment, with the balance of such amount applied to theoutstanding principal balance of the Term Loan. Upon receipt of such amount, Lender shall release $10,000,000.00 fromthe Debt Service Reserve Account and apply such amount to the outstandingprincipal balance of the Term Loan;

 

c.             all otherdocuments, instruments, or agreements required to be delivered to Agent underthe Credit Agreement and not previously delivered to Agent; and

 

d.             payment for allcost and expenses (including attorney’s fees) of Lender associated with thedocumentation, execution and delivery of this Amendment.

 

4.            Representations andWarranties of Borrower. Borrower hereby agrees, affirms, and acknowledges as follows:

 

a.             Section 5.01(t)of the Loan Agreement, shall remain in full force and effect, as amendedhereby, and all amounts currently held in the Debt Service Reserve Account inexcess of the $10,000,000.00 being released pursuant to this Amendment, shallremain in the Debt Service Reserve Account until released in accordance withthe terms of the Loan Agreement.

 

b.             Therepresentations and warranties contained in the Loan Agreement are true andcorrect as of the date of this Amendment in all material respects, except asotherwise previously disclosed in writing to Lender except to the extent theyrelate solely to an earlier date.

 

c.             Borrower hasfull power and authority to execute, deliver, and perform this Amendment andall documents, instruments and agreements required or contemplated hereby, andwhen executed and delivered to Lender will constitute the valid, binding andlegally enforceable obligations of Borrower in accordance with their respectiveterms and conditions, except as enforceability may be limited by applicablebankruptcy or insolvency laws.

 

5.            Counterparts.  It is understood and agreed that thisAmendment may be executed in several counterparts, each of which shall bedeemed an original, and all of such counterparts, when taken together, shallconstitute one and the same agreement.

 

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SIGNATURE PAGE TO

THIRD AMENDMENT TO MASTER LOAN AGREEMENT

BY AND BETWEEN

HOMELAND ENERGY SOLUTIONS, LLC

AND

HOME FEDERAL SAVINGS BANK

 

DATED: September 10, 2010

 

INWITNESS WHEREOF, the parties hereto have caused this Amendment to be executedas of the date first above written.

 

BORROWER:

 

HOMELANDENERGY SOLUTIONS, LLC,

anIowa limited liability company

 

 
| /s/  Walter Wendland       |   |
|----------------------------|--------|
| By:   Walter Wendland |
| Its:  President/CEO        |

 

LENDER:

 

HOMEFEDERAL SAVINGS BANK,

afederally chartered stock savings bank

organizedunder the laws of the United States

 

 
| /s/  Eric Oftedahl       |   |
|--------------------------|--------|
| By:   Eric Oftedahl |
| Its:  Vice President     |

 

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