Document:

Exhibit 10.22

 

REVOLVING PROMISSORY NOTE

 

	
  Omaha, Nebraska

  	
   

  	
  $1,354,000.00

  
	
  Note Date:  April 24, 2008

  	
   

  	
   

  
	
  Maturity Date:  April 24,
  2009

  	
   

  	
   

  

 

On or before April 24, 2009, 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 One Million Three
Hundred Fifty-Four Thousand and No/100 Dollars ($1,354,000.00) 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 REVOLVING PROMISSORY
NOTE.  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 after a date six months subsequent to
the CONSTRUCTION LOAN TERMINATION DATE, 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]

 

2

 

Executed as of the Note Date set forth above.

 

	
   

  	
  HIGHWATER ETHANOL, LLC, a

  Minnesota limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian
  Kletscher

  
	
   

  	
   

  	
  Brian Kletscher, President

  

 

3Exhibit 10.23

 

REVOLVING PROMISSORY NOTE

 

	
  Omaha, Nebraska 

  	
   

  	
  $2,646,000.00

  
	
  Note Date:  April 24, 2008

  	
   

  	
   

  
	
  Maturity Date:  April 24,
  2009

  	
   

  	
   

  

 

On or before April 24, 2009, HIGHWATER
ETHANOL, LLC (“BORROWER”), promises to pay to the order of FIRST NATIONAL BANK
OF OMAHA (“BANK”) at its headquarters in Omaha, Nebraska the principal sum
hereof, which shall be Two Million Six Hundred Forty-Six Thousand and No/100
Dollars ($2,646,000.00) or so much thereof as may have been advanced by BANK
and shown on the records of BANK to be outstanding under this REVOLVING
PROMISSORY NOTE and the AGREEMENT (as defined below).  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 after a date six months subsequent to
the CONSTRUCTION LOAN TERMINATION DATE, 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
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 BANK 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 BANK 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 BANK, 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,
BANK’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of
acceleration in connection with any future EVENT OF DEFAULT.  BANK 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.  BANK’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
BANK.

 

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]

 

2

 

Executed as of the Note Date set forth above.

 

	
   

  	
  HIGHWATER ETHANOL, LLC, a

  Minnesota limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian
  Kletscher                           

  
	
   

  	
   

  	
  Brian Kletscher, President

  

 

3Exhibit 10.24

 

CONSULTING
AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”)
is made effective as of the 27th day of May    ,
2008, by and between Granite Falls Energy, LLC, a Minnesota limited liability
company (“Consultant”), and Highwater
Ethanol, LLC, a Minnesota limited liability company (“Highwater”).

 

WHEREAS,
Highwater intends to construct a 50 Million gallon per year “Dry Mill” ethanol
plant (“Project”) near Lamberton,
Minnesota; and

 

WHEREAS,
Highwater desire to engage the Consultant to assist Highwater in monitoring the
construction and reviewing project plans and documents as set forth in this
Agreement.

 

NOW, THEREFORE, the
parties agree as follows:

 

1.             Consulting Services.  Highwater hereby retains the services of
Consultant, and Consultant agrees to provide such consulting services pursuant
to the terms of this Agreement.  The
scope of services provided by the Consultant pursuant to this Agreement are set
forth on the attached Exhibit A,
which is incorporated herein by reference. 
Consultant agrees to perform the duties required of it pursuant to this
Agreement and to devote the necessary time and attention to performing such
services for Highwater.  Consultant shall
hire “Project Coordinator” who shall
advise Consultant and Highwater as necessary to provide the services set forth
in Exhibit A.  Consultant will
employ and direct the activities of the Project Coordinator. The parties
acknowledge that in no event shall Consultant be liable to Highwater, its
investors or any Project lender or other third party for the acts or omissions
of the Project architects, engineers, construction managers, contractors,
subcontractors, or material suppliers. Further, Consultant shall not be liable
for any design or construction defects of any kind or nature, or for any
construction delays or work slippage however caused for all of its
employees and contractors.

 

2.             Compensation.  Highwater agrees to pay Consultant a fee of
$10,250.00 per month for its consulting services as set forth herein.  The fees shall be paid to Consultant upon
receipt of an invoice from Consultant. 
Highwater shall make payments to Consultant within ten days of the date
on each invoice.  The fees shall not be
subject to any withholding or payments of income tax, FICA, FUTA or similar tax
and insurance withholding requirements. 
Consultant is responsible for the payment of all applicable taxes.  Consultant is an independent contractor and
is not an employee of Highwater. 
Additional services provided by Consultant beyond the Scope of Services
attached as Exhibit A will be billed in accordance with a separate fee
schedule attached as Exhibit B.  Such additional services must be pre-approved
in advance in writing by Highwater.

 

 

3.             Reimbursable Expenses.  In addition to the Fee set forth above in Section 2,
Highwater agrees to reimburse Consultant as follows:

 

Highwater agrees to
reimburse Consultant for all pre-approved expenses reasonably incurred by
Consultant in connection with the performance of consulting services under this
Agreement, excluding any travel costs back and forth between Granite Falls,
Minnesota and Lamberton, Minnesota. 
Consultant shall obtain written preapproval of such expenses from
Highwater prior to incurring such expenses.

 

The reimbursable expenses
referenced in this section 3 shall be included in the itemized monthly invoice
provided by Consultant as set forth in the above Section 2.

 

4.             Term.  This Agreement shall commence as of May 1,
2008 and, unless otherwise agreed in writing, shall terminate upon 30 days
written notice from either party.  If the
Project is abandoned, Highwater may terminate this Agreement.  In such event, Consultant shall be entitled
to receive payment for services rendered and expenses incurred through the date
of termination.

 

5.             EXCLUSION OF WARRANTY, LIMITATION ON LIABILITY AND
INDEMNITY AGREEMENT.  HIGHWATER AND
CONSULTANT AGREE THAT BY THIS AGREEMENT, CONSULTANT EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY AND ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.  FURTHER, HIGHWATER HEREBY
WAIVES AND DISCLAIMS ANY AND ALL CLAIMS FOR PUNITIVE, EXEMPLARY, CONSEQUENTIAL
OR INCIDENTAL DAMAGES AND HEREBY AGREES AND ACKNOWLEDGES THAT CONSULTANT’S
MAXIMUM LIABILITY UNDER THIS CONTRACT SHALL BE LIMITED TO REIMBURSEMENT UP TO,
BUT NOT MORE THAN, THE TOTAL AMOUNT ACTUALLY PAID TO CONSULTANT BY HIGHWATER
UNDER THIS AGREEMENT.  TO THE FULL EXTENT
PERMITTED BY LAW, HIGHWATER WILL INDEMNIFY AND HOLD CONSULTANT HARMLESS, FROM
ANY AND ALL CLAIMS OF ANY PERSON (INCLUDING BUT NOT LIMITED TO HIGHWATER
ITSELF) RELATED TO OR ARISING FROM ANY SERVICES PROVIDED BY CONSULTANT OR ANY
ACTS OR ACTIONS OF CONSULTANT PURSUANT TO OR RELATED IN ANY WAY TO THIS
AGREEMENT.

 

6.             No Authority to Bind; Relationship of the Parties; 3rd
Party Beneficiaries. 
Consultant is merely an advisor to Highwater, and, as such, Consultant
shall have no authority to bind Highwater on any matter.  This Agreement does not create a partnership
or any other relationship other than that of an independent contractor
relationship between the parties.  There
are no intended 3rd party beneficiaries of this Agreement.

 

2

 

7.             Assignment.  This Agreement and a party’s rights and obligations
hereunder may not be assigned without the written consent of the other
party.  Subject to the foregoing, this
Agreement shall be binding on the heirs, successors and assigns of the parties.

 

8.             Waiver.  The waiver by either party of a breach of any provision of this
Agreement shall not be deemed a waiver of any other provision or of any other
breach of the same provision. Waivers shall apply only if in writing and signed
by the party against whom the waiver is claimed.  No change, modification or amendment shall be
valid unless in writing and signed by both parties.

 

9.             Entire Agreement.  This Agreement constitutes the entire
statement of agreement between the parties and supersedes all prior discussions
and understandings between the parties pertaining to the subject matter of this
Agreement.  The headings have been
inserted for convenience only and are not to be considered when interpreting
the provisions of this Agreement.

 

10.          Severability.  If any term or provision of this Agreement is
held invalid and unenforceable to any extent, the remaining terms and
provisions of this Agreement shall not be affected thereby, but each term and
provision of the Agreement shall be valid and enforced to the fullest extent
permitted by law.

 

11.          Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota, determined
without regard to its principles of conflicts of laws.  In the event of a claim arising out of this Agreement
the prevailing party shall be entitled to recover attorney’s fees and other
collections or enforcement costs.

 

12.          Notices.  All notices or other communications required
or permitted to be given pursuant to the provisions of this Agreement shall be
in writing and shall be considered as properly given if mailed by first class
United States mail, postage prepaid, or by delivering same in person to the
intended addressee, or by facsimile transmission provided the sender of the
notice receives verification of the successful transmission of the
facsimile.  Notice so mailed shall be
effective upon its deposit.  Notice given
in any other manner shall be effective only if and when received by the
addressee.  For purposes of notice, the
addresses of the parties shall be as follows:

 

If to the Consultant:

 

GRANITE FALLS ENERGY, LLC

15045 HIGHWAY 23 SE

GRANITE FALLS, MN  56241-0216

FACSIMILE:  (320) 564-3190

ATTN:  TRACEY L. OLSON

 

3

 

If to Highwater:

 

HIGHWATER ETHANOL, LLC

205 MAIN STREET

P.O. BOX 96

LAMBERTON, MN  56152

FACSIMILE: (507) 752-6162

ATTN:  BRIAN D. KLETSCHER

 

13.          Counterparts.  This Agreement may be executed in
counterparts and on telecopy counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute but one and the same agreement.

 

14.           Insurance:  Highwater shall maintain appropriate
liability insurance in an amount no less than $2.00 million of coverage per
occurrence, which insurance shall include Consultant as a named insured.  Highwater shall also maintain adequate worker’s
compensation insurance to cover Highwater’s employees.  Highwater agrees to annually provide a
Certificate of Insurance to Consultant evidencing such coverages.

 

Consultant agrees to maintain general liability
insurance coverage in the amount of $1.00 million with a General Liability
Umbrella policy of $ 2.00 million, auto liability in the amount of $1.00
million with an auto liability umbrella of $2.00 million and adequate worker’s
compensation insurance.  Consultant
agrees to annually provide a Certificate of Insurance to Highwater evidencing
such coverages.

 

IN WITNESS WHEREOF,
THE PARTIES SIGN THIS Agreement to be effective as of the date first above
written.

 

	
   

  	
  GRANITE FALLS ENERGY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Tracey L. Olson

  
	
   

  	
   

  	
  Tracey L. Olson

  
	
   

  	
   

  	
  Its CEO/General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HIGHWATER ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Brian D. Kletscher

  
	
   

  	
   

  	
  Brian D. Kletscher

  
	
   

  	
   

  	
  Its President

  
					

 

4

 

EXHIBIT A

 

TO

 

CONSULTING
AGREEMENT

 

Scope of
Services*

 

                The Scope of Services includes two days of onsite
support per week and unlimited email and telephone support as long as this
Agreement is in place.  The services to
be provided include:

 

·                  Review
project budget and timeline.

·                  Review
of all executed contracts and provide construction monitoring to assist the
Owner to insure compliance with all aspects of the contracts.

·                  Obtain
competitive bids and execute contracts for remainder of Owner supplied services
not currently under contract.

·                  Provide
weekly reports identifying completed items, open items, and updates on project
schedule.

·                  Complete
weekly on-site inspections.

·                  Provide
coordination of contractor activities and settle coordination disputes.

·                  Provide
recommendation and analysis of change order requests.

·                  Manage
construction payment draws to include:

·                  Serve as
collection point for invoices and lien waivers.

·                  Assure that lien
waivers are provided as per any Loan Agreement. 
The form of lien waiver shall be approved by Highwater Ethanol.

·                  Review and
recommend for approval payment invoices and provide to Highwater Ethanol for
approval.

·                  Report budget
item cost overruns to Highwater Ethanol.

·                  Provide monthly
report comparing construction payment draws to the item specific project
budget.

 

·                  Provide
monthly report to Highwater Ethanol to include:

·                  Construction
progress versus project timeline.

·                  Construction
budget to construction draws.

·                  Environmental
and compliance issues (but Consultant shall be in no way responsible for
environmental compliance).

·                  Safety issues.

·                  Material and
equipment procurement status.

·                  Change order
request, analysis, and recommendations.

·                  Problems or
deviations from plans, specifications, or budget.

·                  Direct the
purchase all Owner supplied equipment and installation upon approval of
Highwater Ethanol.

·                  Coordinate and
attend monthly meetings with Highwater Ethanol, lenders and others as
appropriate.

 

5

 

The parties agree that Highwater will provide a mobile
office located at the construction site for use while performing onsite
services. The office shall include telephone, fax, internet connection, copier,
printer and office furniture.  All costs
associated with the mobile office will be incurred by Highwater.  Consultant will provide the Project Manager
with a laptop computer to use for project business.  Consultant agrees to provide any computer
files relating to the Highwater project to Highwater at the request of
Highwater, and in any event upon the conclusion of Consultant’s services for
Highwater.

 

Highwater acknowledges that Consultant is not a
licensed architect or engineer and that Consultant’s consulting services do not
include professional design or engineering services, but rather the services
relate to construction monitoring as set forth herein and a review of the plans
and specifications to determine their impact on cost, schedule,
constructability and feasibility. 
Highwater acknowledges that Consultant is not the general contractor for
this Project.

 

6

 

EXHIBIT B

 

TO
CONSULTING AGREEMENT

 

FEE
SCHEDULE

 

Personnel
Charges

 

	
  Title

  	
   

  	
  Billing Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Project
  Coordinator

  	
   

  	
  $

  	
  85.00/hr

  	
   

  
	
  Technical
  Assistant

  	
   

  	
  $

  	
  60.00/hr

  	
   

  
	
  Clerical

  	
   

  	
  $

  	
  30.00/hr

  	
   

  

 

Other Charges

 

	
  Automobile

  	
   

  	
  $

  	
  0.55/mile

  	
   

  

 

Outside Services

 

Outside services, equipment and facilities not
furnished by Granite Falls Energy, LLC will be billed at cost plus 10%.  Services may include, but not limited to the
following:

 

Rental of equipment;

Outside laboratory
testing;

Special fees, permits,
insurance, etc.;

Printing and photographic
reproduction;

Shipping, telephone and
other materials.

 

Outside services provided by Consultant shall
otherwise be subject to the terms of the Consulting Agreement, including but
not limited to the provisions of Paragraph 5 of the Consulting Agreement.

 

7

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