Document:

Exhibit 10.1

 

FOURTH AMENDMENT OF

CONSTRUCTION LOAN AGREEMENT

 

THIS FOURTH AMENDMENT OF CONSTRUCTION LOAN AGREEMENT (“Amendment”) is made this 26th day of February, 2011 between FIRST NATIONAL BANK OF OMAHA, a national banking association as a Bank and as the Administrative Agent and Collateral Agent for the Banks (in such capacities, “Bank”), the other Banks a party to the Loan Agreement referenced below and HIGHWATER ETHANOL, LLC, a Minnesota limited liability company (“Borrower”).  This Amendment amends that certain Construction Loan Agreement dated April 24, 2008 between Bank, Banks and Borrower (“Loan Agreement”).

 

WHEREAS, pursuant to the Loan Agreement and the other Loan Documents, the Banks extended the Construction Loan, Revolving Loan and other financial accommodations and extensions of credit described in the Loan Agreement to Borrower, all as more fully described in the Loan Agreement;

 

WHEREAS, pursuant to that certain First Amendment of Construction Loan Agreement dated August 11, 2009, the Loan Termination Date applicable to the Revolving Promissory Note was extended to February 28, 2010, the interest rate applicable to the Revolving Loan was modified and the Loan Agreement was otherwise amended as provided for therein;

 

WHEREAS, pursuant to that certain Second Amendment of Construction Loan Agreement dated February 26, 2010, the Loan Termination Date of the Revolving Promissory Notes was extended to February 26, 2011 and the Loan Agreement was otherwise amended as provided for therein;

 

WHEREAS, pursuant to that certain Third Amendment of Construction Loan Agreement dated January 31, 2011, a portion of the Long Term Revolving Loan was converted to a debt service reserve, the repayment provisions applicable to the Variable Rate Loan were modified, the financial covenants were modified, the minimum interest rate applicable to the Variable Rate Loan was modified and the Loan Agreement was otherwise amended as provided for therein;

 

WHEREAS, the Borrower has requested and under the terms of this Amendment the Banks have agreed, to extend the Loan Termination Date of the Revolving Loan as provided for in this Amendment and to re-allocate the Revolving Loan Commitments among the Banks with a Commitment in the Revolving Loan and to otherwise amend the Loan Agreement as provided for in this Amendment; and

 

WHEREAS, the parties hereto agree to amend the Loan Agreement as provided for in this Amendment.

 

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NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree to amend the Loan Agreement as follows:

 

1.                                       Capitalized terms used herein shall have the meaning given to such terms in the Loan Agreement, unless specifically defined herein.

 

2.                                       Section 1.32 of the Loan Agreement is hereby amended to delete the reference to February 26, 2011 as the Loan Termination Date of the Revolving Promissory Notes executed and delivered by Borrower in favor of each Bank with a Revolving Loan Commitment other than Deere Credit, Inc. and inserting in lieu thereof August 28, 2011.  With respect to Deere Credit, Inc.’s Revolving Loan Commitment only, Section 1.32 of the Loan Agreement is hereby amended to delete the reference to February 26, 2011 as the Loan Termination Date of the Revolving Promissory Note executed and delivered by Borrower in favor of Deere Credit, Inc. and inserting in lieu thereof June 30, 2011.  In addition, the Banks with a Revolving Loan Commitment agree to re-allocate their Commitments in the Revolving Loan as provided for in Exhibit H attached to this Amendment and incorporated herein by reference.  The current Exhibit H to the Loan Agreement is hereby deleted in its entirety and the Exhibit H attached to this Amendment is attached to the Loan Agreement in lieu thereof.  To further evidence such extension, Borrower shall execute in favor of each Bank with a Revolving Loan Commitment and deliver to Bank Third Amended and Restated Revolving Promissory Notes dated of even date with this Amendment.  From and after the date of this Amendment, any reference to the Revolving Notes in the Loan Agreement and the other Loan Documents shall be amended to refer to such Third Amended and Restated Revolving Promissory Notes.  On June 30, 2011, the maximum principal amount of the Revolving Loan will reduce by the amount of Deere Credit, Inc.’s Commitment in the Revolving Loan unless the Administrative Agent finds a replacement lender or another Bank(s) agrees to increase its Commitment (or their respective Commitments) in the Revolving Loan.  On June 30, 2011, Borrower agrees to pay and apply on the Revolving Loan such amounts as are necessary to fully pay the outstanding principal balance and accrued and unpaid interest on the Revolving Promissory Note executed by Borrower in favor of Deere Credit, Inc.

 

3.                                       Except as modified and amended herein, all other terms, provisions, conditions and obligations imposed under the terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and affirmed by Borrower.  To the extent necessary, the provisions of the Loan Agreement and the other Loan Documents are hereby amended to be consistent with the terms of this Amendment.  The modifications and amendments contained in this Amendment will become effective on the date of this Amendment except as otherwise specifically provided for above.

 

4.                                       Borrower certifies and reaffirms by its execution hereof that the representations and warranties set forth in the Loan Agreement and the other Loan Documents are true as of this date, and that no Event of Default under the Loan

 

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Agreement or any other Loan Document, and no event which, with the giving of notices or passage of time or both, would become such an Event of Default, has occurred as of execution hereof.

 

5.                                       This Amendment may be executed simultaneously in several counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

 

6.                                       Borrower will comply with all terms and conditions of this Amendment and any other documents executed pursuant hereto and will, when requested by Bank execute and deliver such further documents and instruments necessary to consummate the transactions contemplated hereby and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Amendment or to show the ability to carry out the intent and purposes of this Amendment.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first written above.

 

 

	
 
    	
HIGHWATER   ETHANOL, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Kletscher
    
	
 
    	
Brian   Kletscher, Chief Executive Officer/General Manager
    
	
 
    	
 
    
	
 
    	
FIRST   NATIONAL BANK OF OMAHA, in its capacity as a BANK, ADMINISTRATIVE AGENT and   COLLATERAL AGENT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeremy Reineke
    
	
 
    	
 
    	
Jeremy   Reineke, Second
    
	
 
    	
 
    	
Vice   President
    

 

4

 

	
 
    	
AGSTAR   FINANCIAL SERVICES, PCA, as a BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ron Morson
    
	
 
    	
Name:
    	
Ron   Morson
    
	
 
    	
Title:
    	
VP
    

 

5

 

	
 
    	
UNITED   FCS, as a BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Becky Huhnerkich
    
	
 
    	
Name:
    	
Becky   Huhnerkich
    
	
 
    	
Title:
    	
Sr.   Financial Analyst
    

 

6

 

	
 
    	
FIRST   BANK & TRUST, as a BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tim D. Harvey
    
	
 
    	
Name:
    	
Tim   D. Harvey
    
	
 
    	
Title:
    	
VP   Credit Admin
    

 

7

 

	
 
    	
GRANITE   FALLS BANK, as a BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Craig A. Bakkelund
    
	
 
    	
Name:
    	
Craig   A. Bakkelund
    
	
 
    	
Title:
    	
Vice   President
    

 

8

 

	
 
    	
HERITAGE   BANK, as
    
	
 
    	
a   BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Don Mathews
    
	
 
    	
Name:
    	
Don   Mathews
    
	
 
    	
Title:
    	
Vice   President
    

 

9

 

	
 
    	
DEERE   CREDIT, INC., as a BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark A. Thompson
    
	
 
    	
Name:
    	
Mark   A. Thompson
    
	
 
    	
Title:
    	
Vice   President
    

 

10

 

EXHIBIT H

BANKS’ COMMITMENTS

 

	
BANK
    	
 
    	
FIXED RATE
   TERM LOAN
   COMMITMENT
   AMOUNT
    	
 
    	
VARIABLE
   RATE TERM
   LOAN
   COMMITMENT
   AMOUNT
    	
 
    	
LONG TERM
   REVOLVING
   LOAN
   COMMITMENT
   AMOUNT
    	
 
    	
REVOLVING
   LOAN
   COMMITMENT
   AMOUNT
    	
 
    	
TOTAL
   COMMITMENT
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AgStar Financial Services, PCA
    	
 
    	
$
    	
4,654,985.72
    	
 
    	
$
    	
3,719,249.36
    	
 
    	
$
    	
892,857.14
    	
 
    	
N/A
    	
 
    	
$
    	
9,267,092.22
    	
 
    
	
United FCS
    	
 
    	
$
    	
930,997.12
    	
 
    	
$
    	
743,849.87
    	
 
    	
$
    	
178,571.43
    	
 
    	
N/A
    	
 
    	
$
    	
1,853,418.42
    	
 
    
	
First Bank & Trust
    	
 
    	
$
    	
4,189,487.16
    	
 
    	
$
    	
3,347,324.43
    	
 
    	
$
    	
803,571.43
    	
 
    	
$
    	
1,000,000.00
    	
 
    	
$
    	
9,340,383.02
    	
 
    
	
Granite Falls Bank
    	
 
    	
$
    	
232,749.28
    	
 
    	
$
    	
185,962.47
    	
 
    	
$
    	
44,642.85
    	
 
    	
N/A
    	
 
    	
$
    	
463,354.60
    	
 
    
	
Heritage Bank
    	
 
    	
$
    	
465,498.56
    	
 
    	
$
    	
371,924.94
    	
 
    	
$
    	
89,285.72
    	
 
    	
N/A
    	
 
    	
$
    	
926,709.22
    	
 
    
	
Deere Credit, Inc.
    	
 
    	
$
    	
6,352,193.56
    	
 
    	
$
    	
5,075,287.68
    	
 
    	
$
    	
1,218,392.86
    	
 
    	
$
    	
947,800.00
    	
 
    	
$
    	
13,593,674.10
    	
 
    
	
First National Bank of Omaha
    	
 
    	
$
    	
6,635,216.60
    	
 
    	
$
    	
5,301,418.04
    	
 
    	
$
    	
1,272,678.57
    	
 
    	
$
    	
3,052,200.00
    	
 
    	
$
    	
16,261,513.21
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Totals
    	
 
    	
$
    	
23,461,128.00
    	
 
    	
$
    	
18,745,016.79
    	
 
    	
$
    	
4,500,000.00
    	
 
    	
$
    	
5,000,000.00
    	
 
    	
$
    	
51,706,144.79
    	
 
    

 

11Exhibit 10.2

 

THIRD AMENDED AND RESTATED REVOLVING PROMISSORY NOTE

 

	
Omaha,   Nebraska
    	
 
    	
$947,800.00
    
	
Note   Date: February 26, 2011
    	
 
    	
 
    
	
Maturity   Date: June 30, 2011
    	
 
    	
 
    

 

On or before June 30, 2011, HIGHWATER ETHANOL, LLC (“BORROWER”), promises to pay to the order of Deere Credit, Inc. (“BANK”) in care of FIRST NATIONAL BANK OF OMAHA at its headquarters in Omaha, Nebraska and in its capacity as the ADMINISTRATIVE AGENT for the BANKS under the AGREEMENT (as defined below), the principal sum hereof, which shall be Nine Hundred Forty-Seven Thousand Eight Hundred and No/100 Dollars ($947,800.00) or so much thereof as may have been advanced by BANK and shown on the records of the ADMINISTRATIVE AGENT to be outstanding under this THIRD AMENDED AND RESTATED REVOLVING PROMISSORY NOTE (“REVOLVING PROMISSORY NOTE”).  This REVOLVING PROMISSORY NOTE amends and restates that certain SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE dated February 26, 2010 executed in favor of and delivered to BANK, but is not a novation thereof.  Interest on the principal balance from time to time outstanding will accrue at the rate provided for in the AGREEMENT, adjusting as provided for in the AGREEMENT.  Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed.  Interest on the REVOLVING LOAN shall be payable monthly, in arrears.

 

The interest rate applicable to this REVOLVING NOTE is subject to reduction as provided for in Section 2.15 of the AGREEMENT.

 

This REVOLVING PROMISSORY NOTE is executed pursuant to that certain Construction Loan Agreement dated April 24, 2008 between BANKS and BORROWER (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the (“AGREEMENT”).  The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this REVOLVING PROMISSORY NOTE by reference.  All capitalized terms not otherwise defined herein shall have the same meanings as set forth in the AGREEMENT.

 

The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of the ADMINISTRATIVE AGENT or BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT.  If the maturity date of this REVOLVING PROMISSORY NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then the AGENT shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity.  The rights, powers, privileges, options and remedies of AGENT provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent,

 

 

and may be pursued singly, successively or together at the sole discretion of AGENT, and may be exercised as often as occasion therefor shall occur.  No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy.  Without limiting the generality of the foregoing, the ADMINISTRATIVE AGENT’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT.  The ADMINISTRATIVE AGENT may rescind any acceleration of this REVOLVING PROMISSORY NOTE without in any way waiving or affecting any acceleration of this REVOLVING PROMISSORY NOTE in the future as a consequence of an EVENT OF DEFAULT.  The ADMINISTRATIVE AGENT’s acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this REVOLVING PROMISSORY NOTE made by the ADMINISTRATIVE AGENT.

 

Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in collecting and/or enforcing this REVOLVING PROMISSORY NOTE.  Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER.

 

All makers and endorsers hereby waive presentment, demand, protest and notice of dishonor, consent to any number of extensions and renewals for any period without notice; and consent to any substitution, exchange or release of collateral, and to the addition or releases of any other party primarily or secondarily liable.

 

[SIGNATURE PAGE FOLLOWS]

 

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Executed as of the Note Date set forth above.

 

	
 
    	
HIGHWATER   ETHANOL, LLC, a Minnesota limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Brian Kletscher
    
	
 
    	
 
    	
Brian   Kletscher, President
    

 

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