Document:

EXHIBIT 10.1

 

AMENDMENT TO CREDIT AGREEMENT

[Crop Line]

 

THIS
AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is made and dated as of the
19th day of September 2003 by and between BANK OF THE WEST (“Bank”) and SCHEID
VINEYARDS CALIFORNIA INC., a California corporation (the “Borrower”) and amends
that certain Credit Agreement (Crop Line of Credit) dated as of August 8, 2000
(as amended, modified or waived from time to time, the “Agreement”) between
Bank and the Borrower.

 

RECITALS

 

A.                                   The Borrower has asked Bank
to extend the Expiration Date (as such term and all other capitalized terms
used herein and not otherwise defined are defined in the Agreement).

 

B.                                     Bank has agreed to do so on
the terms and conditions contained in this Amendment.

 

NOW,
THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree that, upon the satisfaction of the
conditions contained in Paragraph 2 below, the Agreement shall be amended as
set forth below:

 

AGREEMENT

 

1.                                       Extension of Expiration Date.  The definition of “Expiration Date” is amended to read as
follows:

 

“‘Expiration
Date’ shall mean July 5, 2005, or the date of termination of the Bank’s
commitment to lend under this Agreement pursuant to Section 8, whichever shall
occur first.”

 

2.                                       Conditions to Effectiveness
of Amendment.  This Amendment shall not be effective until
the date (the “Effective Date”) upon which all of the following conditions
precedent have been satisfied:

 

(i)                                         the Borrower and Bank shall
have duly executed and delivered this Amendment and such other documents as
Bank may require with respect to the transactions described in this Amendment;

 

(ii)                                      Bank shall have received such
board resolutions, incumbency certificates, opinions of Borrower’s counsel and
such other additional documentation in form and substance satisfactory to Bank
as it may request in connection herewith;

 

(iii)                                   Bank shall have received
consent of any participant in the indebtedness evidenced by the Agreement to
this Amendment; and

 

1

 

 

(iv)                                  all representations and
warranties hereunder and under the Agreement shall be true and correct and no
Event of Default or event, which with the passage of time, giving of notice or
both, would constitute an Event of Default, shall have occurred.

 

3.                                       Representations and
Warranties of the Borrower.  As an inducement to Bank to enter into this
Amendment, the Borrower represents and warrants to Bank that:

 

3(a)                            No Change.  Since the date of the financial statements most recently
delivered to Bank pursuant to the Agreement, there has been no material adverse
change in the business, operations, assets or financial or other condition of
the Borrower.  Since such date, the
Borrower has not entered into, incurred or assumed any long-term debt,
mortgages, material leases or material oral or written commitments not
disclosed to Bank prior to the date of this Amendment.

 

3(b)                           Corporate Existence; Compliance
with Law.  The Borrower (1) is duly organized, validly
existing and in good standing as a corporation under the laws of the state of
its incorporation and is qualified to do business in each jurisdiction where
its ownership of property or conduct of business requires such qualification
and where failure to qualify would have a material adverse effect on it or its
property and/or business or on the ability of the Borrower to pay or perform
the Obligations, (2) has the corporate power and authority and the legal right
to own and operate its property and to conduct business in the manner in which
it does and proposes so to do, and (3) is in compliance in all material
respects with applicable laws and contractual obligations.

 

3(c)                            Corporate Power; Authorization;
Enforceable Obligations.  The Borrower has the corporate power and
authority and the legal right to execute, deliver and perform this Amendment,
as amended hereby, to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of this Amendment
and the Agreement.  This Amendment has
been duly executed and delivered on behalf of the Borrower and constitutes
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effect of applicable
bankruptcy and other similar laws affecting the rights of creditors generally
and the effect of equitable principles whether applied in an action at law or a
suit in equity.

 

3(d)                           No Legal Bar.  The execution, delivery and performance of this Amendment will
not violate any applicable law or any contractual obligations of the Borrower
or create or result in the creation of any Lien on any assets of the Borrower.

 

4.                                       Miscellaneous Provisions.

 

4(a)                            Entire Agreement.  This Amendment and the documents and agreements referred to
herein embody the entire agreement and understanding between the parties hereto
and supersede all prior agreements and understandings relating to the subject
matter hereof and thereof.

 

4(b)                           Survival.  All representations, warranties, covenants and agreements herein
contained on the part of the Borrower shall survive the termination of this
Amendment and the Agreement and shall be effective until the Obligations are
paid and performed in full or longer as expressly provided herein.

 

2

 

4(c)                            Governing Law.  This Amendment shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to choice of
law rules.

 

4(d)                           Counterparts.  This Amendment may be executed in any number of counterparts, all
of which together shall constitute one agreement.

 

4(e)                            Expenses.  The Borrower agrees to pay to Bank on demand, all reasonable
out-of-pocket expenses (including fees and disbursements of counsel, including
reasonable allocated cost of inside counsel) of Bank incident to the
preparation, negotiation, and closing of this Amendment and the syndication and
participation of the Agreement, as modified hereby.

 

5.                                       Reaffirmation of Loan
Documents.  The Borrower affirms and agrees that the
execution and delivery by the Borrower of and the performance of its
obligations under this Amendment shall not in any way amend, impair, invalidate
or otherwise affect any of the Obligations of the Borrower or the rights of the
Bank under the Agreement or any other document or instrument made or given by
the Borrower in connection therewith, and specifically reaffirms and remakes
all the covenants, representations, warranties and reaffirms the security
interests granted thereunder.  Without
limiting the generality of the foregoing, the Borrower specifically agrees and
affirms that the liens and security interests granted to Bank under the
Agreement secure all of the Borrower’s Obligations under the Agreement and all
other liabilities, guarantees, covenants and duties owed by the Borrower to the
Bank whether or not evidenced by the Agreement or any other agreement, absolute
or contingent, due or to become due, now existing or hereafter and howsoever
created.

 

3

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of the
day and year first above written.

 

 

	
   

  	
  SCHEID
  VINEYARDS CALIFORNIA INC., 

  
	
   

  	
  a
  California corporation, as the Borrower

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Heidi
  M. Scheid

  	
   

  
	
   

  	
  Heidi M.
  Scheid, Senior Vice President &

  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Scott
  D. Scheid

  	
   

  
	
   

  	
  Scott
  Scheid,  President

  

 

4

 

	
   

  	
  BANK OF
  THE WEST, as Bank

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith
  L. Krum

  	
   

  
	
   

  	
  Title:
  Keith Krum, Sr. Vice President

  

 

5Exhibit
10.1

 

Debt Service Guarantee

 

THIS GUARANTEE
(the “Guarantee”) is made as of the 23rd day of September, 2003, by Dakota
Ethanol, LLC, whose address is PO Box 100, Wentworth, SD 57075 (the
“Guarantor”), for the benefit of the First National Bank in Brookings, 5th
Street & 5th Avenue, Brookings, South Dakota 57006-5057 (the
“Bond Holder”).

 

1.                   Recitals

 

A.                                   Contemporaneously
with the execution of this Guarantee, the County of Lake (the “Issuer”),
pursuant to a Resolution duly adopted and in force is issuing Taxable Tax
Increment Revenue Bonds, Series 2003 (the “Bonds”) in the principal face amount
of One Million Three Hundred Twenty-Three Thousand Twenty-Four Dollars and No
Cents ($1,323,024.00).

 

B.                                     As
a condition to purchase of the Bonds by the Bond Holder, the Bond Holder has
required the Guarantor to guarantee said Bonds.

 

C.                                     These
Recitals shall be construed as part of this Guarantee.

 

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor agrees as follows:

 

2.                   Unconditional Guarantee

 

To induce the Bond Holder to purchase the Bonds, the
Guarantor hereby unconditionally guarantees to the Bond Holder that all payment
obligations of the Issuer, including, without limitation, all principal and
interest will be paid in the amounts, at the times and in the manner set forth
in the Bonds, subject, however, that such payment obligations shall be limited
to such amounts which are not covered by tax increment revenue pledged for the
payment of the Bonds.  The payment and
performance obligations set forth in this paragraph are collectively referred
to as the “Guaranteed Obligations.”

 

This Guarantee is irrevocable, absolute and
unconditional, and is one of payment and not just collection.  The Guarantor’s Guarantee of the Guaranteed
Obligations is subject only to the occurrence of a Default under the Bonds.

 

The Guarantor shall pay to the Bond Holder all amounts
due by the Guarantor hereunder, and shall not exercise against the Bond Holder
any rights of setoff, recoupment, or counterclaim that the Guarantor might
otherwise have against the Issuer or any other guarantor, and the Guarantor
shall pay and perform their obligations hereunder free of any deductions and
without abatement, diminution, or setoff as the Guarantor may have against the
Issuer or against any other guarantor.

 

1

 

Any modification, limitation or discharge of any of
the liabilities or obligations of the Issuer or any other guarantor, arising
out of, or by virtue of, any bankruptcy or similar proceeding for relief of
debtors under federal or state law initiated by or against the Issuer or any
other guarantor shall not modify, limit, reduce, impair, discharge, or
otherwise affect the liability of the Guarantor in any manner whatsoever, and
this Guarantee shall continue in full force and effect, notwithstanding any
such proceeding.

 

3.                   Waivers by Guarantor

 

The Guarantor waives any right to require the Bond
Holder to: (i) proceed against the Issuer or any other guarantor, (ii) pursue
any other remedy in the Bond Holder’s power whatsoever, or (iii) notify
the Guarantor of any default by the Issuer in the payment of any amounts due
under the Bonds or in the performance of any agreement of the Issuer under the
bond documents.

 

The Guarantor waives any defense arising by reason of
any of the following: (i) any disability or any counterclaim or right of
set-off or other defense of the Issuer, (ii) any lack of authority of the
Issuer with respect to the Bonds, (iii) the invalidity, illegality or lack
of enforceability of the Bonds or any provision thereof from any cause
whatsoever, including any action or inaction by the Bond Holder, (iv) the
failure of the Bond Holder to perfect or maintain perfection of any security
interest in any collateral, (v) the cessation from any cause whatsoever of
the liability of the Issuer, (vi) that the Bonds shall be void or voidable
as against the Issuer or any of the Issuer’s creditors, including a trustee in
bankruptcy of the Issuer, by reason of any fact or circumstance, (vii) the
delay or failure of the Bond Holder to exercise any of its rights and remedies
against the Issuer or any collateral or security for the Bonds or this
Guarantee, (viii) any event or circumstance that might otherwise
constitute a legal or equitable discharge of the Guarantor’s obligations
hereunder; provided, however, that
the Guarantor does not waive any defense arising from the due performance by
the Issuer of the terms and conditions of the Bonds, (ix) all errors and
omissions in connection with the Bond Holder’s administration of all
indebtedness guaranteed by this Guarantee, except errors and omissions
resulting from the Bond Holder’s acts of bad faith, (x) any right or claim
of right to cause a marshaling of the assets of the Issuer or any other
guarantor, (xi) any act or omission of the Bond Holder (except acts or
omissions in bad faith) that changes the scope of the Guarantor’s risk hereunder,
and (xii) all other notices and demands otherwise required by law which
the Guarantor may lawfully waive.

 

Until the payment of all amounts due under the Bonds
and the performance of all of the terms, covenants and conditions therein
required to be kept, observed or performed by the Issuer, the Guarantor waives
(i) any right to enforce any remedy that the Bond Holder now has or may
hereafter have against the Issuer, and (ii) any benefit of, and any right
to participate in, any security now or hereafter held by the Bond Holder.

 

The Guarantor waives all rights of subrogation against
the Issuer, for the express purpose that the Guarantor shall not be deemed a
“creditor” of the Issuer under applicable bankruptcy law with respect to the
Issuer’s obligations to the Bond Holder.

 

The Guarantor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of dishonor, and
notices of acceptances of this Guarantee.

 

2

 

The Guarantor waives the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.

 

4.                   No Conditions Precedent

 

The Guarantor acknowledges that no unsatisfied
conditions precedent to the effectiveness and enforceability of this Guarantee
exist as of the date of its execution and that the effectiveness and
enforceability of this Guarantee is not in any way conditioned or contingent
upon any event, occurrence, or happening, or upon any condition existing or
coming into existence either before or after the execution of this Guarantee,
including but not limited to the Guarantee of the Issuer’s obligations by any
other Person.

 

5.                   Discharge of Guarantee

 

This Guarantee shall not be discharged and the
Guarantor shall not be released from liability until all Guaranteed Obligations
have been satisfied in full.  If all or
any portion of the Guaranteed Obligations are satisfied and the Bond Holder is
required for any reason to pay to any Person all or any part of the sums used
to satisfy the Guaranteed Obligations, the Guaranteed Obligations shall remain
in effect and enforceable to the extent thereof.

 

6.                   Remedies

 

Upon the Issuer failing to pay principal or interest
when due, the Bond Holder may, at its option and without notice or demand,
declare an amount equal to the remainder of the Issuer’s obligations under the
Bonds (the “Unpaid Balance”) to be immediately due and payable by the
Guarantor, whether or not the same are due and payable by the Issuer at that
time.  The books and records of the Bond
Holder showing the amount due by the Issuer shall be binding upon the Guarantor
for the purpose of establishing such items and shall be prima facie proof
thereof.

 

The Guarantor agrees to pay the Bond Holder’s
reasonable attorneys’ fees and all other costs and expenses (collectively the
“Collection Expenses”) which may be incurred by the Bond Holder in the
enforcement of this Guarantee, whether or not suit is filed.

 

All of the Bond Holder’s rights and remedies shall be
cumulative, and any failure of the Bond Holder to exercise any right hereunder
shall not be construed as a waiver of the right to exercise the same or any
other right at any time, and from time to time, thereafter.

 

7.                   Invalidity of Any Part

 

If any provision or part of any provision of this
Guarantee shall for any reason be held invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provisions or the remaining part of any effective provisions of this
Guarantee, and this Guarantee shall be construed as if such invalid, illegal,
or unenforceable provision or part thereof had never been contained herein, but
only to the extent of its invalidity, illegality, or unenforceability.

 

3

 

8.                   Amendment or Waiver

 

This Guarantee may be amended only by a writing duly
executed by the Guarantor and the Bond Holder. 
No waiver by the Bond Holder of any of the provisions of this Guarantee
or any of the rights or remedies of the Bond Holder with respect hereto shall
be considered effective or enforceable unless in writing, duly executed by the
Bond Holder.  Such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given.

 

9.                   Notices

 

In order for any demand, consent, approval or other
communication to be effective under the terms of this Agreement, “Notice” must
be provided under the terms of this Subsection.  All Notices must be in writing. 
Notices may be (a) delivered by hand, (b) transmitted by fax (with a
duplicate copy sent by first class mail, postage prepaid), (c) sent by
certified or registered mail, postage prepaid, return receipt requested, or (d)
sent by reputable overnight courier service, delivery charges prepaid.  Notices shall be addressed as set forth
below:

 

If to Bond Holder:

 

First National Bank in Brookings

5th Street and 5th Avenue

Brookings, South Dakota 57006-5057

 

If to Guarantor:

 

Jim Wiederrich

300 South Phillips Avenue

Suite 300

Sioux Falls, SD 57117-5027

 

If to Issuer:

 

County of Lake

200 East Center

Madison, SD 
57042

 

Notices delivered by hand or by overnight courier
shall be deemed given when actually received or when refused by their intended
recipient.  Faxed Notices will be deemed
delivered when a legible copy has been received (provided receipt has been
verified by telephone confirmation or one of the other permitted means of
giving Notices under this Subsection). 
Mailed Notices shall be deemed given on the date of the first attempted
delivery (whether or not actually received). 
Either the Bond Holder or the Guarantor may change the address for
Notice by giving at least fifteen Business Days’ prior Notice of such change to
the other party or parties.

 

4

 

10.            Binding Nature

 

This Guarantee shall inure to the benefit of and be
enforceable by the Bond Holder and the Bond Holder’s successors and assigns and
any other Person to whom the Bond Holder may grant an interest in the
obligations of the Issuer to the Bond Holder, and shall be binding upon and
enforceable against the Guarantor and the Guarantor’s successors and assigns.

 

11.            Final Agreement

 

This Guarantee contains the final and entire agreement
between the Bond Holder and the Guarantor with respect to the Guarantee by the
Guarantor of the Guaranteed Obligations to the Bond Holder.  There is no separate oral or written
understanding between the Bond Holder and the Guarantor with respect thereto.

 

12.            No Third Party Benefit

 

The terms and provisions of this Guarantee are for the
benefit of the Bond Holder and no other Person shall have any right or cause of
action on account thereof.  The Bond
Holder has no obligation to make any advance for the benefit of the Guarantor.

 

13.            Interpretation

 

13.1                           HEADINGS
AND GENERAL APPLICATION

 

The section and subsection headings of this Guarantee
are provided for convenience of reference only and shall in no way affect,
modify or define, or be used in construing, the text of the sections,
subsections, paragraphs or subparagraphs.

 

13.2                           REFERENCE
TO PARTICULARS

 

The scope of a general statement made in this
Guarantee shall not be construed as having been reduced through the inclusion
of references to particular items that would be included within the statement’s
scope.  Therefore, absent specific
language to the contrary, the term “include” shall mean “include, but shall not
be limited to” and the term “including” shall mean “including, without
limitation.”

 

THE REMAINDER OF
THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK

 

5

 

IN WITNESS WHEREOF,
the Guarantor has executed or caused this instrument to be duly executed.

 

	
   

  	
  DAKOTA ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Doug Van
  Duyn

  	
   

  
	
   

  	
   

  
	
   

  	
  Its President

  
					

 

6

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