Document:

Exhibit 10.1

EXHIBIT 10.1

EIGHTH AMENDMENT AND MODIFICATION OF

REVOLVING LINE OF CREDIT PROMISSORY NOTE,

LOAN AGREEMENT AND REAFFIRMATION OF GUARANTIES

This Eighth Amendment and Modification of Revolving Line of Credit Promissory Note, Loan
Agreement and Reaffirmation of Guaranties (“Amendment”) is made effective the 1st day of
February, 2009 (“Effective Date”) by and among WSI Industries, Inc., a Minnesota corporation,
having an address of 213 Chelsea Road, Monticello, MN 55362 (“Borrower”), Taurus Numeric Tool,
Inc., having an address of 213 Chelsea Road, Monticello, MN 55362 and WSI Rochester, Inc., having
an address of 213 Chelsea Road, Monticello, MN 55362 (jointly “Guarantor”) and M&I Marshall &
Ilsley Bank, having an address of 11455 Viking Drive, Eden Prairie, Minnesota 55344 (“Bank”).

WHEREAS, on or about December 4, 2002, (the “Loan Date”) Borrower executed a Revolving Line of
Credit Promissory Note in favor of Excel Bank Minnesota (“Excel”) in the original principal amount
of One Million and no/100 Dollars ($1,000,000.00) (“Note”); and

WHEREAS, on or about the Loan Date, Borrower and Excel executed that certain Loan Agreement
(“Loan Agreement”) which Loan Agreement, among other things, described the terms and conditions
under which the Borrower would borrow money from and repay the money to Excel; and

WHEREAS, to secure the sums due and payable to Excel pursuant to the Note and the Loan
Agreement, Borrower also executed that certain Security Agreement, also dated as of the Loan Date,
whereby Excel took a security interest in all assets of Borrower (“Security Agreement); and

WHEREAS, to further secure the sums due and payable to Excel pursuant to the Note and the Loan
Agreement, to perform the covenants and conditions thereof and of certain documents executed in
conjunction therewith, each Guarantor executed an unconditional and unlimited guaranty
(“Guaranty”), also dated as of the Loan Date, whereby each Guarantor unconditionally guaranteed the
Borrower’s performance of the Note and the Loan Agreement and the other loan documents executed
therewith; and

WHEREAS, the Note, the Loan Agreement and the Security Agreement were amended and extended
pursuant to those certain Amendments and Modifications of Revolving Line of Credit Promissory Note,
Loan Agreement and Reaffirmation of Guaranties dated effective December 31, 2003, May 3, 2004,
January 1, 2005, January 1, 2006, January 1, 2007, January 1, 2008, August 31, 2008 and by a Waiver
Letter dated April 23, 2007 (the “Amendments”); and

WHEREAS, the Note, the Loan Agreement, the Security Agreement, the Amendments and all of the
documents executed in conjunction therewith are sometimes jointly referred to herein as the “Loan
Documents”; and

 

 

 

WHEREAS, effective on August 1, 2007, Excel was acquired by merger with the Bank; and

WHEREAS, the Borrower has requested that the Bank again amend and extend the maturity date of
the Note and modify the terms of the Loan Agreement; and

WHEREAS, the Bank and the Borrower and each Guarantor desire that the Note and the Loan
Agreement be amended and modified as hereinafter described and each Guarantor wishes to acknowledge
and reaffirm the terms and conditions of such Guarantor’s Guaranty.

NOW, THEREFORE, in consideration of the above recitals, and in consideration of credit given
or to be given by the Bank to the Borrower and for other good and valuable consideration, all of
which consideration is hereby acknowledged, the parties hereto agree as follows:

	1.	 	Each of the above recitals is true and correct and is incorporated herein by this reference.

	 
	2.	 	The Note is hereby amended, modified and extended as follows:

“On and after the Effective Date hereof the Note shall bear interest at the variable rate of
equal to the LIBOR Rate, plus two and three-fourths percent (2.75%); provided, however, that
the interest rate shall never be less than four and one half percent (4.50%) and if the
foregoing calculation results in a rate of less than four and one half percent (4.50%) the
interest rate shall be four and one half percent (4.50%). As used herein, “LIBOR Rate”
means the “London Interbank Offered Rates (LIBOR)” for one month as published in the “Money
Rates” column of The Wall Street Journal on the first business day of each month (or, if The
Wall Street Journal ceases to publish a rate so designated, any similar successor rate as
the Lender shall in good faith designate). The interest rate shall automatically adjust on
the first business day of each month in the event there has been any change in the LIBOR
Rate. On the Effective Date hereof the LIBOR Rate is forty-four/0ne hundredths percent
(0.44%) per annum and the rate of interest under the Note as of the Effective Date is four
and fifty/one hundredths percent (4.50%) per annum. If the LIBOR Rate is no longer
established or is otherwise no longer available, the holder of this Note may substitute a
reasonably equivalent index to substitute for the LIBOR Rate.

The principal and interest due pursuant to the Note shall be repaid as follows: In monthly
payments of all accrued interest on the sums actually advanced thereunder commencing on
February 1, 2009 and continuing monthly thereafter on the 1st day of each and
every month until February 1, 2010, at which time the entire remaining balance due under the
Note, including all principal and accrued but unpaid interest, shall be due and payable in
full.”

 

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	3.	 	The following section of the Loan Agreement is hereby amended and modified as described below
(all capitalized terms have the meanings given to them in the Loan Agreement):

	 	a.	 	Section 5.09 of the Loan Agreement shall be amended as follows:

“Section 5.09 Ratio of Debt to Tangible Net Worth. So long as the Note shall remain
unpaid or the Bank shall have any Commitment hereunder, the ratio of the Borrower’s
Debt to Tangible Net Worth shall not exceed 2.25 to 1 measured at the end of each
fiscal quarter end basis.”

	 	b.	 	Section 6.10 of the Loan Agreement shall be amended as follows:

“Section 6.10 Capital Expenditures. So long as the Note shall remain unpaid or the
Bank shall have any Commitment hereunder, Borrower shall make no capital
expenditures in excess of Two Million Two Hundred Fifty Thousand and no/100 Dollars
($2,250,000.00) in any fiscal year.”

	4.	 	Borrower hereby acknowledges and reaffirms each and every representation, warranty, term,
covenant and condition of the Loan Documents. Borrower further acknowledges and agrees that
the Loan Documents (as hereby amended and modified) are fully enforceable against Borrower and
that Borrower has no defense, right of offset or otherwise to preclude enforcement of the Loan
Documents, as hereby amended and modified, by the Bank against Borrower.

	5.	 	The Security Agreement shall continue to secure all sums owing to the Bank by the Borrower
pursuant to the terms and conditions of the Note and the Loan Agreement, together with all
interest thereon, in accordance with the terms and conditions of the Note and all other sums
due and owing or to become due and owing pursuant to the terms and conditions of this
Amendment, the Loan Agreement, the Security Agreement and the Note, as amended, including but
not necessarily limited to any further or additional extensions or renewals thereof.

	6.	 	Borrower and each Guarantor acknowledge that the principal balance remaining unpaid on the
Note as of the Effective Date hereof is $ Zero (0).

	7.	 	Each Guarantor hereby acknowledges, ratifies and reaffirms each and every term, covenant,
agreement, provision, and condition of their respective Guaranty and any collateral security
documents securing such guaranty, including but not limited to the security agreement dated of
even date with the Guaranty (“Collateral Security Documents”), and the Loan Documents, as
amended, and hereby acknowledges and agrees that the Guaranty guarantees to the Bank the
repayment of all sums due and owing to the Bank pursuant to the terms, conditions and
covenants of the Note, as amended, and the performance of the terms and covenants of the
balance of the Loan Documents, as amended. Each Guarantor hereby affirms and agrees that each
such Guaranty is unconditional and unlimited and that such Guaranty along with the Collateral
Security Documents related thereto are fully enforceable against such Guarantor. Each
Guarantor hereby further affirms and agrees and that such Guarantor has no defense, right of
offset, claim, cause of action or otherwise to preclude the absolute and immediate enforcement
of the Guaranty and/or the Collateral Security Documents supporting such Guaranty by the Bank.

 

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	8.	 	On or before the execution hereof, Borrower shall pay to the Bank, the Bank’s costs including
its reasonable attorneys’ fees, incurred in drafting this Amendment and related documents, if
any.

	9.	 	Except as herein specifically modified, amended or extended, all terms and conditions of the
Loan Documents shall otherwise remain unchanged and in full force and effect.

	10.	 	Notwithstanding anything to the contrary herein, this Amendment or any failure by the Bank to
exercise any of its rights upon an event of default under the Loan Documents or the Guaranty
or the Collateral Security Documents, whether prior to or subsequent to the effective date of
this Amendment, shall not be deemed a waiver of the Bank’s available remedies under the Loan
Documents, the Guaranty, or the Collateral Security Documents or any amendments thereof, or
any other documents executed in conjunction therewith or incident thereto.

	11.	 	All the terms of this Amendment shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of the parties hereto, to the extent assignment is
permitted pursuant to the Loan Documents or the Guaranty.

	12.	 	This Amendment is being executed in and is intended to be performed in the State of Minnesota
and shall be construed and enforced in accordance with the laws of such state.

	13.	 	This Amendment contains the entire agreement between the parties with respect to the
covenants and promises contemplated herein and may be amended only in a writing signed by each
of the parties hereto.

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

	 	 	 	 	 
	 	BORROWER:

WSI INDUSTRIES, INC.,

 a Minnesota
corporation

 	 
	 	By:  	/s/  Paul D. Sheely
 	 
	 	 	Its:   VP/CFO 	 
	 	 	 	 
	 	GUARANTORS:

TAURUS NUMERIC TOOL, INC., 

a
Minnesota corporation

 	 
	 	By:  	/s/  Paul D. Sheely
 	 
	 	 	Its:   VP/CFO 	 

 

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	 	WSI ROCHESTER, INC., 

a Minnesota
corporation

 	 
	 	By:  	/s/  Paul D. Sheely
 	 
	 	 	Its:   VP/CFO 	 
	 	 	 	 
	 	M&I MARSHALL & ILSLEY BANK,

a Wisconsin state banking corporation,

 	 
	 	By:  	/s/ David Orlady
 	 
	 	 	Its:   SVP 	 
	 	 	 
	 	By:  	      /s/ Mary E. Covert
 	 
	 	 	Its:   VP 	 

 

5Exhibit 10.20

Exhibit 10.20

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT is entered into as of December 4, 2008, by CleanTech Biofuels,
Inc. (the “Company”) and                                          (the “Officer”).

ARTICLE 1

ACQUISITION OF SHARES

1.1 Sale and Purchase. On the terms and conditions set forth in this Agreement, the Company
agrees to sell to the Officer, and Officer agrees to purchase, 60,000 Shares. The sale and purchase
shall occur at the offices of the Company on the date set forth above or at such other place and
time as the parties may agree.

1.2 Consideration. The Officer agrees to pay $0.36 for each Purchased Share, which may be paid
pursuant to a note in a form satisfactory to the Company.

1.3 Defined Terms. Capitalized terms not defined above are defined in Section 10 of this
Agreement.

ARTICLE 2

OTHER RESTRICTIONS ON TRANSFER

2.1 Officer Representations. In connection with the issuance and acquisition of Shares under
this Agreement, the Officer hereby represents and warrants to the Company as follows:

(a) The Officer is acquiring and will hold the Purchased Shares for investment for his or her
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act.

(b) The Officer understands that the Purchased Shares have not been registered under the
Securities Act by reason of a specific exemption therefrom and that the Purchased Shares must be
held indefinitely, unless they are subsequently registered under the Securities Act or the Officer
obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel,
that such registration is not required. The Officer further acknowledges and understands that the
Company is under no obligation to register the Purchased Shares.

(c) The Officer is aware of the adoption of Rule 144 by the Securities and Exchange Commission
under the Securities Act, which permits limited public resales of securities acquired in a
nonpublic offering, subject only to the satisfaction of certain conditions. The Officer
acknowledges and understands that the conditions for resale set forth in Rule 144 have not been
satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future.

 

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(d) The Officer will not sell, transfer or otherwise dispose of the Purchased Shares in
violation of the Securities Act, the Securities Exchange Act of 1934, or the rules promulgated thereunder, including Rule 144 under the Securities Act. The Officer agrees that he or
she will not dispose of the Purchased Shares unless and until he or she has complied with all
requirements of this Agreement applicable to the disposition of Purchased Shares and he or she has
provided the Company with written assurances, in substance and form satisfactory to the Company,
that (A) the proposed disposition does not require registration of the Purchased Shares under the
Securities Act or all appropriate action necessary for compliance with the registration
requirements of the Securities Act or with any exemption from registration available under the
Securities Act (including Rule 144) has been taken and (B) the proposed disposition will not result
in the contravention of any transfer restrictions applicable to the Purchased.

(e) The Officer has been furnished with, and has had access to, such information as he or she
considers necessary or appropriate for deciding whether to invest in the Purchased Shares, and the
Officer has had an opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the issuance of the Purchased Shares.

(f) The Officer is aware that his or her investment in the Company is a speculative investment
that has limited liquidity and is subject to the risk of complete loss. The Officer is able,
without impairing his or her financial condition, to hold the Purchased Shares for an indefinite
period and to suffer a complete loss of his or her investment in the Purchased Shares.

2.2 Securities Law Restrictions. Regardless of whether the offering and sale of Shares under
this Agreement have been registered under the Securities Act or have been registered or qualified
under the securities laws of any state, the Company at its discretion may impose restrictions upon
the sale, pledge or other transfer of the Purchased Shares (including the placement of appropriate
legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment
of the Company, such restrictions are necessary or desirable in order to achieve compliance with
the Securities Act, the securities laws of any state or any other law.

2.3 Market Stand-Off. In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed under the Securities
Act, including the Company’s initial public offering, the Officer shall not, without the prior
written consent of the Company’s managing underwriter, (i) lend, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock
(whether such shares or any such securities are then owned by the Officer or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise. Such restriction (the “Market Stand-Off”) shall be in effect for
such period of time following the date of the final prospectus for the offering as may be requested
by the Company or such underwriters. In no event, however, shall such period exceed 180 days. The
Market Stand-Off shall in any event terminate-two years after the date of the Company’s initial
public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split. an
adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s
outstanding securities without receipt of consideration, any new, substituted or additional
securities that are by reason of

 

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such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into
which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.
In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with
respect to the Purchased Shares until the end of the applicable stand-off period. The Company’s
underwriters shall be beneficiaries of the agreement set forth in this Subsection 2.3. This
Subsection 2.3 shall not apply to Shares registered in the public offering under the Securities
Act, and the Officer shall be subject to this Subsection 2.3 only if the Officers and officers of
the Company are subject to similar arrangements.

2.4 Rights of the Company. The Company shall not be required to (i) transfer on its books any
Purchased Shares that have been sold or transferred in contravention of this Agreement or (ii)
treat as the owner of Purchased Shares, or otherwise to accord voting, dividend or liquidation
rights to, any transferee to whom Purchased Shares have been transferred in contravention of this
Agreement.

ARTICLE 3

SUCCESSORS AND ASSIGNS

Except as otherwise expressly provided to the contrary, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and assigns and be
binding upon the Officer and the Officer’s legal representatives, heirs, legatees, distributees,
assigns and transferees by operation of law, whether or not any such person has become a party to
this Agreement or has agreed in writing to join herein and to be bound by the terms, conditions and
restrictions hereof

ARTICLE 4

NO RETENTION RIGHTS

Nothing in this Agreement shall confer upon the Officer any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any way the rights of
the Company (or any Parent or Subsidiary employing or retaining the Officer) or of the Officer,
which rights are hereby expressly reserved by each, to terminate his or her Service at any time and
for any reason, with or without cause.

ARTICLE 5

TAX ELECTION

The acquisition of the Purchased Shares may result in adverse tax consequences that may be
avoided or mitigated by filing an election under Code Section 83(b). Such election may be filed
only within 30 days after the date of purchase. The form for making the Code Section 83(b) election
is attached to this Agreement as an Exhibit. The Officer should consult with his or her tax advisor
to determine the tax consequences of acquiring the Purchased Shares and the advantages and
disadvantages of filing the Code Section 83(b) election. The Officer acknowledges that it is his or
her sole responsibility, and not the Company’s, to file a timely election under Code Section 83(b),
even if the Officer requests the Company or its representatives to make this filing on his or her
behalf.

 

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ARTICLE 6

LEGENDS

Legends. All certificates evidencing Purchased Shares shall bear the following legends:

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED
OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND
CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY THE
SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED.”

If required by the authorities of any state in connection with the issuance of the Purchased
Shares, the legend or legends required by such state authorities shall also be endorsed on all such
certificates.

ARTICLE 7

NOTICE

Any notice required by the terms of this Agreement shall be given in writing and shall be
deemed effective upon personal delivery or upon deposit with the United States Postal Service, by
registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the
Company at its principal executive office and to the Officer at the address that he or she most
recently provided to the Company.

ARTICLE 8

ENTIRE AGREEMENT

This Agreement constitutes the entire contract between the parties hereto with regard to the
subject matter hereof. It supersedes any other agreements, representations or understandings
(whether oral or written and whether express or implied) relating to the subject matter hereof.

 

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ARTICLE 9

CHOICE OF LAW

This Agreement shall be governed by, and construed in accordance with, the laws of the State
of Missouri, as such laws are applied to contracts entered into and to be performed entirely within
such State.

ARTICLE 10

DEFINITIONS

10.1 “Agreement” shall mean this Stock Purchase Agreement.

10.2 “Board of Directors” shall mean the Board of Directors of the Company, as constituted
from time to time.

10.3 “Code” shall mean the Internal Revenue Code of 1986, as amended.

10.4 “Company” shall mean CleanTech Biofuels, Inc., a Delaware corporation.

10.5 “Employee” shall mean any individual who is a common law employee of the Company, a
Parent or a Subsidiary.

10.6 “Fair Market Value” shall mean the fair market value of a Share, as determined by the
Board of Directors in good faith. Such determination shall be conclusive and binding on all
persons.

10.7 “Outside Officer” shall mean a member of the Board of Directors who is not an Employee.

10.8 “Parent” shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

10.9 “Purchased Shares” shall mean the Shares purchased by the Officer pursuant to this
Agreement.

10.10 “Securities Act” shall mean the Securities Act of 1933, as amended.

10.11 “Service” shall mean service as an Employee, Outside Officer or Consultant.

10.12 “Share” shall mean one share of Stock.

10.13 “Stock” shall mean the Common Stock of the Company, with a par value of $0.001 per
Share.

 

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10.14 “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

10.15 “Transferee” shall mean any person to whom the Officer has directly or indirectly
transferred any Purchased Share.

10.16 “Transfer Notice” shall mean the notice of a proposed transfer of Purchased Shares
described in Section 2.

	 	 	 	 	 
	 

	 	OFFICER:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Print Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	CLEANTECH BIOFUELS INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	Officer	 	 

 

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