Document:

exv10w4

 

EXHIBIT 10.4

JOINT POWERS AND PARTICIPATION AGREEMENT

PROVIDING FOR A LOAN TO

GRANITE FALLS ENERGY, LLC

     THIS AGREEMENT is entered into as of the 1st day of February, 2006, by and among the Granite
Falls Economic Development Authority (“EDA”), the City of Granite Falls, Minnesota (the “City”),
The Western Minnesota Revolving Loan Fund, a Minnesota nonprofit corporation (the “Western MN RLF”)
and Chippewa County, Minnesota (the “County”) (collectively, the “Parties”, or individually, a
“Party”). Each of the foregoing entities, other than the Western MN RLF, is a political
subdivision of, or instrumentality of a political subdivision of, the State of Minnesota and a
governmental unit within the meaning of Minnesota Statutes, Section 471.59 (the “Joint Powers
Act”).

     1. The Joint Powers Act provides that two or more governmental units, by agreement entered
into through action of their governing bodies, may jointly or cooperatively exercise any power
common to the contracting parties, and may provide for the exercise of such power by one of the
participating governmental units.

     2. On October 4, 2004, the EDA adopted a Redevelopment Plan (the “Redevelopment Plan”)
pursuant to Minnesota Statutes, Sections 469.001 through 469.047 (the “HRA Law”) in connection with
the acquisition, construction and equipping of an approximately 40,000,000 gallon per year dry mill
ethanol production plant in the City (the “Project”).

     3. Pursuant to Minnesota Statutes, Section 469.041, for the purpose of aiding and cooperating
in the planning, undertaking, construction or operation of a redevelopment project, any state
public body, including the City, the EDA and the County, may upon the terms, with or without
consideration, as it may be determined: (1) do any and all things necessary or convenient to aid
and cooperate in the planning, undertaking, construction or operation of a redevelopment project;
(2) incur the entire expense of any public improvement made by it in exercising the powers granted
in the HRA Law; (3) enter into agreements with an authority respecting action to be taken by the
state public body pursuant to any of the powers granted by the HRA Law; and (4) furnish funds
available to it from any source, including the proceeds of bonds, to an authority to pay all or
part of the costs to the authority of the activities authorized by the HRA Law.

     4. The Western MN RLF has the power to enter into this Agreement, to make loans and to carry
out its obligations hereunder.

     5. Granite Falls Energy, LLC, a Minnesota limited liability company, (the “Developer”) has
proposed that the Parties enter into this Agreement pursuant to Minnesota Statutes, Section 469.041
to (1) provide for a loan to the Developer in the aggregate principal amount of $700,000 (the
“Loan”) to finance the acquisition of certain equipment in connection with the Project (the
“Equipment”) and pay certain engineering
and administrative expenses, (2) to authorize the City to enter into a Loan Agreement with the
Developer and (3) to provide for the allocation of security for the Loan and Loan Repayments from
the Developer to the Parties.

 

 

     6. The County, the Western MN RLF and the EDA hereby request and authorize the City to enter
into a Loan Agreement with the Developer on their behalf in connection with the Project and the
Equipment. The County, the Western MN RLF and the EDA further request and authorize the City to
secure the repayment of the Loan with a second lien mortgage in the real property on which the
Developer is constructing the Project (the “Mortgaged Property”) pursuant to a Statutory Mortgage
from the Developer to the City (the “Mortgage”) and to disburse and administer the Loan and enforce
the terms of the Loan Agreement and the Mortgage in accordance with the terms thereof and take such
further actions and assert such further rights under the Loan Agreement, the Mortgage or any
document relative thereto as the City in its reasonable judgment deems appropriate.

     7. The County agrees to deposit the proceeds of a loan from the County in the amount of
$100,000 pursuant to the Redevelopment Plan and Minnesota Statutes, Section 469.041 (the “County
Loan”) with the City to be disbursed and administered pursuant to the Loan Agreement.

     8. The Western MN RLF agrees to deposit the proceeds of a loan from its Revolving Loan Fund
program in the amount of $100,000 with the City to be disbursed and administered pursuant to the
Loan Agreement (the “Western Minnesota RLF Loan”).

     9. The City agrees to disburse the proceeds of a loan received from the Minnesota Department
of Employment and Economic Development through the Minnesota Investment Fund program in the amount
of $500,000 pursuant to the Redevelopment Plan and pursuant to the Loan Agreement (the “MIF Loan”).

     10. Payments received by the City from the Developer pursuant to Section 3.2(5) of the Loan
Agreement (the “Loan Repayments”) shall allocated to the County, the Western MN RLF and the City
within 10 days of receipt in the amounts set forth therein for the repayment of the County Loan,
the Western Minnesota RLF Loan and the MIF Loan.

     11. The County, the Western MN RLF and the EDA hereby request and authorize the City to enter
into a Subordination Agreement with the Developer and First National Bank of Omaha and agree that
its terms apply equally to the County Loan, the Western Minnesota RLF Loan and the MIF Loan.

     12. In the event Loan Repayments received by the City from the Developer pursuant to Section
3.2(5) of the Loan Agreement are insufficient to make payments with respect to the County Loan, the
MIF Loan and the Western Minnesota RLF Loan in the amounts set forth in Section 3.2(5), the City
shall apply such Loan Repayments pro rata in accordance with the outstanding principal balance of
each of the County Loan, the MIF Loan and the Western Minnesota RLF Loan.

     13. In the event the City receives a partial prepayment from the Developer pursuant to Section
3.5 of the Loan Agreement, the City shall apply such prepayment pro rata in accordance with the
outstanding principal balance of each of the County Loan, the MIF Loan and the Western Minnesota
RLF Loan.

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     14. In the event of a declaration of default under the Loan Agreement or the acceleration or
demand for payment of the Loan, or of any foreclosure, sale, or other disposition or liquidation of
the Mortgaged Property, all money collected or received by the City on account of the Loan or
otherwise owed by the Developer shall be applied to the payment of all proper costs incurred in the
collection thereof (including expenses and disbursements of the Parties and their counsel and
including attorneys’ fees, including any extraordinary administrative fees of the Parties) pro rata
in accordance with the amount of such costs, and the balance of such money shall be applied pro
rata in accordance with the outstanding principal balance of each of the County Loan, the MIF Loan
and the Western Minnesota RLF Loan.

     15. This Agreement shall terminate upon the payment in full of the County Loan, the MIF Loan
and the Western Minnesota RLF Loan, and this Agreement may not be terminated in advance of such
payment.

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     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf
by its duly authorized officers, all as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	GRANITE FALLS ECONOMIC DEVELOPMENT AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Mark Henderson	 	 
	 

	 	 	 	 	 	 
	 	 	    Mark Henderson, Chair	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Dick Wambeke	 	 
	 

	 	 	 	 	 	 
	 	 	    Dick Wambeke, Secretary	 	 

SIGNATURE PAGE TO JOINT POWERS AGREEMENT

S-1

 

	 	 	 	 	 	 	 
	 	 	CITY OF GRANITE FALLS, MINNESOTA	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Dave Smiglewski	 	 
	 

	 	 	 	 	 	 
	 	 	    Dave Smiglewski, Mayor	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ William Lavin	 	 
	 

	 	 	 	 	 	 
	 	 	    Bill Lavin, City Manager	 	 

SIGNATURE PAGE TO JOINT POWERS AGREEMENT

S-2

 

	 	 	 	 	 	 	 
	 	 	CHIPPEWA COUNTY, MINNESOTA	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Kenneth Koenen	 	 
	 

	 	 	 	 	 	 
	 	 	    Kenneth Koenen, Chair	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Jon Clauson	 	 
	 

	 	 	 	 	 	 
	 	 	    Jon Clauson, Auditor/Treasurer	 	 

SIGNATURE PAGE TO JOINT POWERS AGREEMENT

S-3

 

	 	 	 	 	 	 	 
	 	 	THE WESTERN MINNESOTA REVOLVING LOAN FUND	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Richard Hanson	 	 
	 

	 	 	 	 	 	 
	 	 	    Richard Hanson, Chair	 	 
	 
	 	 	 	 	 	 
	 	 	ATTEST:	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Ryan Krosch	 	 
	 

	 	 	 	 	 	 
	 	 	    Ryan Krosch, Director	 	 

SIGNATURE PAGE TO JOINT POWERS AGREEMENT

S-4exv10w5

 

EXHIBIT 10.5

SPACE ABOVE THIS LINE FOR RECORDER’S USE

The Maximum Principal Indebtedness Secured by this Mortgage is $700,000

STATUTORY MORTGAGE

     THIS STATUTORY MORTGAGE (the “Mortgage”), made and given as of the 1st day of February, 2006,
by GRANITE FALLS ENERGY, LLC, a Minnesota limited liability company (the “Mortgagor”) in favor of
the CITY OF GRANITE FALLS, MINNESOTA, a municipal corporation and a political subdivision of the
State of Minnesota (the “Mortgagee”).

W I T N E S S E T H :

     WHEREAS, the Mortgagee will make a loan in the amount of Seven Hundred Thousand Dollars
($700,000) (the “Loan”) to the Mortgagor pursuant to a Loan Agreement dated as of the date hereof,
between the Mortgagee and the Mortgagor (the “Loan Agreement”) for the purpose of financing a
portion of the costs of equipping an approximately 40,000,000 per year dry mill gallon ethanol
production plant to be constructed, owned and operated by the Mortgagor and located on the land
legally described on Exhibit A attached hereto (the “Project”); and

     WHEREAS, pursuant to the Loan Agreement, the Mortgagor has covenanted, among other things, to
make loan repayments sufficient to pay amortized installments of principal and interest on the Loan
when due; and

     WHEREAS, the Mortgagee has required, as a condition for the issuance of the Loan by the
Mortgagee that the Mortgagor secure the payments due under the Loan Agreement by this Mortgage.

     1. Mortgage. The Mortgagor hereby mortgages to the Mortgagee the tracts of land lying
in the County of Chippewa, State of Minnesota, legally described on Exhibit A attached hereto,
together with all tenements, easements, hereditaments, privileges, leases, rents, minerals and
mineral rights, water and water rights, buildings,
fixtures, improvements now or hereafter erected or located on the above-described land
(hereinafter referred to as the “Mortgaged Premises”).

 

 

     2. Statutory Covenants. The Mortgagor makes and includes in this Mortgage the
Statutory Covenants and other provisions set forth in Minnesota Statutes, Section 507.15, or in any
future Minnesota Statute providing for a statutory form of real estate mortgage, and the Mortgagor
covenants with the Mortgagee the following Statutory Covenants:

          (a) to warrant title to the Mortgaged Premises, subject to the Permitted Encumbrances listed in
Exhibit B attached hereto;

          (b) to pay the indebtedness as herein provided;

          (c) to pay all taxes on the Mortgaged Premises;

          (d) to keep any buildings insured against fire for an amount not less than the full replacement
cost and against other hazards for the amounts specified by the Mortgagee for the protection
of the Mortgagee, including, but not limited to, lightning, hazards under the usual extended
coverage endorsement, and all other hazards and risks of direct physical loss occasioned by
any cause whatsoever, subject only to the exceptions and exclusions, if any, agreed to by the
Mortgagee. All such policies shall name the Mortgagee as loss payee under the so-called
standard mortgage clause, contain no pro rata reduction provisions and provide for not less
than thirty (30) days’ notice to the Mortgagee of cancellation of said policy; and

          (e) that the Mortgaged Premises shall be kept in repair and no waste shall be committed.

     3. Additional Covenants and Agreements of Mortgagor. The Mortgagor makes the
following additional covenants and agreements with the Mortgagee:

          (a) Subject to the terms of the Subordination Agreement (as defined in the Loan Agreement) so
long as any portion of the loan under the Senior Loan Agreement (as defined in the Loan
Agreement) is outstanding, if any amount of the Loan is outstanding when all or any part of
the Mortgaged Premises is taken by eminent domain, or destroyed or damaged, unless the
Mortgagor exercises its right to prepay all or a portion of the Loan, the Mortgagor shall
proceed promptly to replace, repair, rebuild and restore the Mortgaged Premises to
substantially the same condition as existed before the taking or event causing the damage or
destruction, with such changes, alterations and modifications (including substitution or
addition of other property) as may be desired by the Mortgagor, and reasonably approved by the
Mortgagee, and will be suitable for continued operation of the Mortgaged Premises for the
business purposes of the Mortgagor. Subject to the provisions of any mortgage which is a
Permitted Encumbrance listed in Exhibit B, all proceeds of any condemnation award or property
insurance claim shall be paid directly to the Mortgagee. The Mortgagee shall apply the
proceeds, less such sum, if any, required for payment of all expenses incurred in
collecting the same (“Net Proceeds”), to payment of the costs of repair, replacement,
rebuilding or restoration of the Mortgaged Premises upon compliance with such construction
and disbursement terms as the Mortgagee may deem reasonably necessary, including deposit
with the Mortgagee of such funds of the Mortgagor as may be required to insure payment of
all costs of rebuilding and restoration. If such deposit is not made when requested by
the Mortgagee, or if any other Event of Default should occur while the Mortgagee is
retaining the Net Proceeds, the Mortgagee may

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apply said Net Proceeds to the indebtedness
of the Mortgagor under the Loan Agreement and the balance of Net Proceeds remaining after
payment of all costs of any repair, rebuilding, replacement or restoration of the Mortgaged
Property shall be applied against the unpaid principal balance of the Loan. The Mortgagor
shall not, by reason of the payment of any costs of repair, rebuilding, replacement or
restoration, be entitled to any reimbursement from the Mortgagee or any abatement or
diminution of the amounts payable under Article III of the Loan Agreement.

          (b) Except for liens and encumbrances listed on Exhibit B hereto (the “Permitted Encumbrances”)
or any other liens consented to in writing by the Mortgagee, the Mortgagor will keep the
Mortgaged Premises free from all liens and encumbrances of every nature heretofore or
hereafter arising which might or could be prior to or equal to the security interest of this
Mortgage; and upon written demand of the Mortgagee, the Mortgagor will pay and procure the
release of any such lien or encumbrance.

          (c) The Mortgagor will promptly pay when due all charges for utilities or other service to the
Mortgaged Premises including, but not limited to, electricity, water, gas, telephone, sanitary
sewer and trash and garbage removal, supplied and upon request of the Mortgagee, provide
evidence of such payment.

          (d) The Mortgagor will hold the Mortgagee harmless from all costs and expenses in connection with
establishing the priority of this Mortgage and if the Mortgagee becomes a party to any
mechanics’ lien suit or other proceeding relating to the premises or to this Mortgage, the
Mortgagor will reimburse the Mortgagee for the Mortgagee’s reasonable attorneys’ fees, costs
and expenses in connection with said suit or proceeding.

          (e) At the request of the Mortgagee, the Mortgagor shall execute and deliver to the Mortgagee
such financing statements and other documents and instruments as may be reasonably necessary
or desirable to maintain, preserve and protect the validity and perfected status of this
Mortgage and the security interests granted hereby.

          (f) The Mortgagor shall comply with all present and future laws, ordinances, regulations,
covenants, conditions and restrictions affecting the Mortgaged Premises or the operation
thereof, and shall pay all fees or charges of any kind in connection therewith.

          (g) The Mortgagor represents, warrants, and covenants that the Mortgaged Premises will not be
used or involved in the release, handling, storage, or disposal of Hazardous Substances, AS
THOSE TERMS ARE DEFINED IN THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY
ACT OF 1980, (CERCLA), as amended, 42 U.S.C. Section et seq., THE SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT (SARA), AND THE MINNESOTA ENVIRONMENTAL RESPONSE AND LIABILTIY ACT
(MERLA), Minnesota Statutes Section 115B.01 et seq., as amended except in accordance with the
requirements of such state and federal statutes; provided however, that the Mortgagor may
engage in the manufacturing, processing, storage, transportation and production of ethanol,
including all ingredients and byproducts associated therewith. With respect to the foregoing
the Mortgagor represents, warrants, and covenants that it has (1) conducted all appropriate
inquiry under CERCLA, (2) delivered a Phase I

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Environmental Assessment, addressed to the
Mortgagee, showing no recognized conditions, (3) obtained all necessary federal, state and
local permits, licenses and approvals for the construction and operation of the Project in
accordance with all air, water, soil and environmental standards, rules, regulations and laws
and that it shall not maintain any storage tanks on the Mortgaged Premises except in
accordance with such permits and licenses.

          (h) The Mortgagor will pay the principal and interest, when due, on prior mortgages and other
similar encumbrances.

          (i) The Mortgagor shall, at its own expense, cause comprehensive liability insurance to be
carried and maintained with respect to the activities to be undertaken by and on behalf of the
Mortgagor in connection with the use of the Mortgaged Premises substantially the same as
insurance carried by the Mortgagor with respect to other similar activities of the Mortgagor,
such policies to name the Mortgagee as loss payee.

     4. Payment by Mortgagee. In case of failure by the Mortgagor to pay taxes and
assessments, prior liens or encumbrances, expenses and attorneys’ fees as above specified, or to
insure said buildings, improvements and fixtures and deliver the policies as aforesaid, the
Mortgagee may pay such taxes, assessments, prior liens, expenses and attorneys’ fees and interest
thereon, or obtain such insurance, and the sums so paid shall bear interest from the date of such
payment at the same rate set forth in the Loan Agreement, and shall be impressed as an additional
lien upon the Mortgaged Premises and be immediately due and payable from the Mortgagor to the
Mortgagee and this Mortgage shall from the date thereof secure the repayment of such advances with
interest.

     5. Events of Default/Acceleration of Maturity. The Mortgagor agrees that at the
option of the Mortgagee and in addition to the Mortgagee’s right to accelerate the maturity of the
indebtedness secured hereby as set forth above in the Statutory Covenants, the entire remaining
principal amount plus accrued interest shall become due and payable in full upon the occurrence of
any of the following (each of which is herein referred to as an “Event of Default”):

          (a) The Mortgagor shall fail to pay (i) when due the principal sum of the Loan or any interest
thereon or any installment thereof, or (ii) shall fail to pay when due any other payment due
under the Loan Agreement or this Mortgage and such failure continues after ten (10) days
written notice thereof to the Mortgagor;

          (b) An Event of Default (as that term is defined therein) shall occur under the Loan Agreement;

          (c) Except as otherwise provided in this Mortgage, the Mortgagor, without the written consent of
the Mortgagee, voluntarily or by operation of law, shall transfer, sell, convey or assign all
or any part of the legal or equitable title or legal and equitable title to the Mortgaged
Property, or any part of the Mortgaged Property, or any of the personalty located thereon or
used or intended to be used in connection therewith;

          (d) The Mortgagor shall otherwise fail to perform or observe any of the covenants contained in
this Mortgage and such default shall remain uncured for thirty (30) days after written notice
thereof to the Mortgagor;

4

 

          (e) Any representation or warranty made by the Mortgagor in this Mortgage or in the Loan
Agreement is untrue or misleading in any material respect, or any statement, certificate or
report furnished hereunder or under the Loan Agreement by or on behalf of the Mortgagor is
untrue or misleading in any material respect on the date as of which the facts set forth are
stated or certified.

     6. Statutory Power of Sale, Waiver and Agreement. At maturity, whether at the stated
time or prior thereto by the acceleration of maturity pursuant hereto, the Mortgagee (in addition
to any other remedies provided for herein or which it may have at law or equity) shall have the
statutory power of sale, and on foreclosure may retain statutory costs and attorneys’ fees.

THE MORTGAGOR HEREBY: EXPRESSLY CONSENTS TO THE FORECLOSURE AND SALE OF THE MORTGAGED PREMISES BY
ACTION PURSUANT TO MINNESOTA STATUTES, CHAPTER 581 OR, AT THE OPTION OF THE MORTGAGEE, BY
ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES, CHAPTER 580, WHICH PROVIDES FOR SALE AFTER SERVICE OF
NOTICE THEREOF UPON THE OCCUPANT OF THE MORTGAGED PREMISES AND PUBLICATION OF SAID NOTICE FOR EIGHT
WEEKS IN THE COUNTY IN MINNESOTA WHERE THE MORTGAGED PREMISES ARE SITUATED; ACKNOWLEDGES THAT
SERVICE NEED NOT BE MADE UPON THE MORTGAGOR PERSONALLY (UNLESS THE MORTGAGOR IS AN OCCUPANT) AND
THAT NO HEARING OF ANY TYPE IS REQUIRED IN CONNECTION WITH THE SALE; AND EXCEPT AS MAY BE PROVIDED
IN SAID STATUTES, EXPRESSLY WAIVES ANY AND ALL RIGHT TO PRIOR NOTICE OF SALE OF THE MORTGAGED
PREMISES AND ANY AND ALL RIGHTS TO A PRIOR HEARING OF ANY TYPE IN CONNECTION WITH THE SALE OF THE
MORTGAGED PREMISES.

     7. Miscellaneous. This Mortgage shall be governed by and construed in accordance with
the laws of the State of Minnesota and shall inure to the benefit of the Mortgagee, its successors
and assigns.

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     IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	GRANITE FALLS ENERGY, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Julie Oftedahl-Volstad	 	 
	 

	 	 	 	 	 	 
	 	 	Its Secretary/Treasurer	 	 

	 	 	 	 	 
	STATE OF MINNESOTA

	 	)	 	 
	 

	 	) ss.	 	 
	COUNTY OF YELLOW MEDICINE

	 	)
	 	 

     The foregoing instrument was acknowledged before me this 24th day of February, 2006, by Julie
Oftedahl-Volstad the Secretary/Treasurer of Granite Falls Energy, LLC, a Minnesota limited
liability company, on behalf of said company.

	 	 	 	 	 
	 

	 	/s/ Gregory L. Holmstrom	 	 
	 

	 	 	 	 
	 

	 	Notary Public	 	 
	 

	 	My Commission Expires Jan. 31, 2010
	 	 

This Instrument Drafted By:

Briggs and Morgan, Professional Association

2200 First National Bank Building

St. Paul, Minnesota 55101

S-1

 

EXHIBIT A

Legal Description of Mortgaged Premises

Land Description — 46.70 Acre Parcel

That part of the East Half of the Northeast Quarter of Section 1, Township 115 North, Range 39 West
of the Fifth Principal Meridian, Granite Falls Township, Chippewa County, Minnesota, described as
follows:

Commencing at the northwest corner of Parcel 3, as shown on the record plat entitled STATE HIGHWAY
RIGHT OF WAY PLAT NO. 12-1, on file in the office of the Chippewa County Recorder; thence on an
assumed bearing of South 1 degree 56 minutes 15 seconds West, along the west line of Parcel 3, as
shown on said record plat entitled STATE HIGHWAY RIGHT OF WAY PLAT No. 12-1, a distance of 182.53
feet to southerly right of way boundary line of the railroad, which is also the southwest corner of
said Parcel 3 and the point of beginning of the land to be described; thence on a bearing of South
87 degrees 01 minutes 14 seconds West, along the southerly right of way line of the railroad, a
distance of 911.97 feet to the west line of the East Half of the Northeast Quarter of said Section
1; thence on a bearing of South 0 degrees 44 minutes 38 seconds West, along the west line of the
East Half of the Northeast Quarter of said Section 1, a distance of 2290.26 feet to the northwest
corner of Parcel 213, as shown on the record plat entitled MINNESOTA DEPARTMENT OF TRANSPORTATION
RIGHT OF WAY PLAT NO. 12-24, on file in the office of the Chippewa County Recorder; thence on a
bearing of South 88 degrees 21 minutes 26 seconds East, along the north boundary line of said
Parcel 213, a distance of 729.81 feet; thence on a bearing of North 47 degrees 28 minutes 37
seconds East, along the boundary line of said Parcel 213, a distance of 143.46 feet to the west
line of Parcel 1, as shown on said record plat entitled STATE HIGHWAY RIGHT OF WAY PLAT NO. 12-1;
thence on a bearing of North 3 degrees 18 minutes 35 seconds East, along the west line of said
Parcel 1, a distance of 1123.61 feet to the northwest corner of said Parcel 1; thence continuing on
a bearing of North 3 degrees 18 minutes 35 seconds East, along the west line of Parcel 2, as shown
on said record plat entitled STATE HIGHWAY RIGHT OF WAY PLAT NO. 12-1, a distance of 75.63 feet;
thence on a bearing of North 1 degree 56 minutes 15 seconds East, along the west line of Parcel 2,
as shown on said record plat entitled STATE HIGHWAY RIGHT OF WAY PLAT NO. 12-1, a distance of
1064.80 feet to the point of beginning.

 

 

EXHIBIT B

Permitted Encumbrances

     1. Mortgage dated December 16, 2004, filed in the County Recorder’s office of Chippewa County
December 17, 2004, as Document No. A000263783, from Granite Falls Energy, LLC, formerly Granite
Falls Community Ethanol Plant, LLC, to First National Bank of Omaha in the amount of
$37,500,000.00.

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