Document:

Exhibit10.8-CreditorandDebtorsAgreement

EXHIBIT 10.8

CREDITOR AND DEBTORS AGREEMENT

This Creditor and Debtors Agreement (the “Agreement”) is made as of July 31, 2013 (the “Effective Date”) by and among Granite Falls Energy, LLC, a Minnesota limited liability company(“GFE”); Project Viking, L.L.C., a Minnesota limited liability company (“Viking”), Roland “Ron” J. Fagen (“Mr. Fagen”) and Granite Falls Bank (“Lender”).

RECITALS

WHEREAS, GFE has assumed all of Viking’s and Mr. Fagen’s obligations under that certain promissory note numbered 28407 in the original principal amount of $5,000,000 dated July 23, 2013 in favor of Lender (the “Note”) as of the Effective Date and Lender has consented thereto as of the Effective Date;

WHEREAS, notwithstanding the foregoing, Lender has required that each of Viking and Mr. Fagen remain secondarily liable to Lender for GFE’s obligations under the Note if there is an Event of Default (as such term is defined in the Note) by GFE under the Note,

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Lender’s Agreement Regarding Collection.  Lender shall only be entitled to seek payment of any amounts from Viking or Mr. Fagen due to Lender from GFE under the Note until and unless there is an Event of Default.  Lender shall immediately notify GFE and Mr. Fagen in writing of any Event of Default.  If such Event of Default shall remain uncured for more than five business days, then Lender shall be entitled to seek payment of any amounts due to Lender from GFE under the Note from Viking.  If Lender is unable to collect such amounts from Viking within 30 days, then Lender shall be entitled to seek payment of any amounts due to Lender from Mr. Fagen.  Each of Viking and Mr. Fagen agree to liable to Lender in such amounts in such event.

2.    GFE Grant of Security Interest.  GFE hereby grants to Lender a security interest in all of GFE’s assets that would be collateral under Article 9 of the Uniform Commercial Code (“Collateral”); provided, however, that GFE’s membership interest in Viking (a wholly-owned subsidiary of GFE) shall not be Collateral.  GFE also agrees to execute documents in the future as requested by Lender to perfect its security interest in the Collateral.

3.    Entire Agreement.  This Agreement supplements the Note and that certain Commercial Security Agreement dated July 23, 2013 among Viking, Mr. Fagen and Lender (the “Security Agreement”); provided, however, that if any provision of the Note or the Security Agreement conflicts with this Agreement, the terms of this Agreement shall prevail and govern in all respects.

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4.    Law Governing.  This Agreement shall be interpreted in accordance with and governed by the laws of the State of Minnesota.

5.    Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and successors of the parties hereto, but no right or liability or obligation arising hereunder may be assigned by any party hereto without the prior written consent of all other parties.

6.    Counterparts, Separate Signature Pages.  This Agreement may be executed in any number of counterparts, or using separate signature pages, Each such executed counterpart and each counterpart to which such signature pages are attached shall be deemed to be an original instrument, but all-such counterparts together shall constitute one and the same instrument A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

7.    Severability.  In the event any of the provisions of this Agreement shall be declared by a court or arbitrator to be void or unenforceable, then such provision shall be severed from this Agreement without affecting the validity and enforceability of any of the other provisions hereof, and the parties shall negotiate in good faith to replace such unenforceable or void provisions with a similar clause to achieve, to the extent permitted under law, the purpose and intent of the provisions declared void and unenforceable.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

GRANITE FALLS ENERGY, LLC

By /s/ Paul Enstad    
Its Chairman    

PROJECT VIKING, L.L.C.

By /s/ Roland J. Fagen    
Its President & Managing Member    

/s/ Roland J. Fagen    
Roland “Ron” J. Fagen

GRANITE FALLS BANK

By/s/ John C. Virnig    
Its President    

3Exhibit10.9-RevolvingCreditSupplement

Exhibit 10.9
Loan No. RI1080S01A

REVOLVING CREDIT SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated August 22, 2012 (the “MLA”), is entered into as of July 26, 2013 between UNITED FCS, PCA (“Lead Lender”) and GRANITE FALLS ENERGY, LLC, Granite Falls, Minnesota (the “Company”), and amends and restates the Supplement dated August 22, 2012 and numbered RI1080S01.

SECTION 1.  The Revolving Credit Facility.  On the terms and conditions set forth in the MLA and this Supplement, Lead Lender agrees to make loans to the Company during the period set forth below in an aggregate principal amount not to exceed $6,000,000.00 at any one time outstanding (the “Commitment”).  Within the limits of the Commitment, the Company may borrow, repay, and reborrow.

SECTION 2.  Purpose.  The purpose of the Commitment is to provide working capital to the Company.

SECTION 3.  Term.  The term of the Commitment shall be from the date hereof, up to and including August 1, 2014, or such later date as Agent (as that term is defined in the MLA) may, in its sole discretion, authorize in writing.

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance of the loan(s) in accordance with one or more of the following interest rate options, as selected by the Company:

(A)    One-Month LIBOR Index Rate.  At a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as hereinafter defined] or required by any other federal law or regulation) per annum equal at all times to 2.65% above the rate quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time for the offering of one (1)-month U.S. dollars deposits, as published by Bloomberg or another major information vendor listed on BBA’s official website on the first “U.S. Banking Day” (as hereinafter defined) in each week, with such rate to change weekly on such day.  The rate shall be reset automatically, without the necessity of notice being provided to the Company or any other party, on the first “U.S. Banking Day” of each succeeding week, and each change in the rate shall be applicable to all balances subject to this option.  Information about the then-current rate shall be made available upon telephonic request.  For purposes hereof:  (1) “U.S. Banking Day” shall mean a day on which Agent is open for business and banks are open for business in New York, New York; (2) “Eurocurrency Liabilities” shall have the meaning as set forth in “FRB Regulation D”; and (3) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

(B)    Quoted Rate.  At a fixed rate per annum to be quoted by Agent in its sole discretion in each instance.  Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to Agent in its sole discretion in each instance, provided that:  (1) the minimum fixed period shall be 30 days; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; and (3) the maximum number of fixes in place at any one time shall be five.

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(C)    LIBOR.  At a fixed rate per annum equal to “LIBOR” (as hereinafter defined) plus 2.65%.  Under this option:  (1) rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 2, 3, 6, 9, or 12 months, as selected by the Company; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; (3) the maximum number of fixes in place at any one time shall be five; and (4) rates may only be fixed on a “Banking Day” (as hereinafter defined) on three Banking Days’ prior written notice.  For purposes hereof:  (a) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and adjusted for reserves required on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB Regulation D” [as herein defined] or required by any other federal law or regulation) quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time two Banking Days before the commencement of the Interest Period for the offering of U.S. dollar deposits in the London interbank market for the Interest Period designated by the Company, as published by Bloomberg or another major information vendor listed on BBA’s official website; (b) “Banking Day” shall mean a day on which Agent is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England; (c) “Interest Period” shall mean a period commencing on the date this option is to take effect and ending on the numerically corresponding day in the next calendar month or the month that is 2, 3, 6, 9, or 12 months thereafter, as the case may be; provided, however, that:  (i) in the event such ending day is not a Banking Day, such period shall be extended to the next Banking Day unless such next Banking Day falls in the next calendar month, in which case it shall end on the preceding Banking Day; and (ii) if there is no numerically corresponding day in the month, then such period shall end on the last Banking Day in the relevant month; (d) “Eurocurrency Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) “FRB Regulation D” shall mean Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

The Company shall select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options.  Upon the expiration of any fixed rate period, interest shall automatically accrue at the variable rate option unless the amount fixed is repaid or fixed for an additional period in accordance with the terms hereof.  Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed in such a manner as to cause the Company to have to break any fixed rate balance in order to pay any installment of principal.  All elections provided for herein shall be made electronically (if applicable), telephonically or in writing and must be received by Agent not later than 12:00 Noon Company’s local time in order to be considered to have been received on that day; provided, however, that in the case of LIBOR rate loans, all such elections must be confirmed in writing upon Agent’s request.  Interest shall be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and shall be payable monthly in arrears by the 20th day of the following month or on such other day in such month as Agent shall require in a written notice to the Company; provided, however, in the event the Company elects to fix all or a portion of the indebtedness outstanding under the LIBOR interest rate option above, at Agent’s option upon written notice to the Company, interest shall be payable at the maturity of the Interest Period and if the LIBOR interest rate fix is for a period longer than three months, interest on that portion of the indebtedness outstanding shall be payable quarterly in arrears on each three-month anniversary of the commencement date of such Interest Period, and at maturity.

SECTION 5.  Promissory Note.  The Company promises to repay the unpaid principal balance of the loans on the last day of the term of the Commitment.  In addition to the above, the 

Company promises to pay interest on the unpaid principal balance of the loans at the times and in accordance with the provisions set forth in Section 4 hereof.  This note replaces and supersedes, but does not constitute payment of the indebtedness evidenced by, the promissory note set forth in the Supplement being amended and restated hereby.

SECTION 6.  Letters of Credit.  If agreeable to Agent in its sole discretion in each instance, in addition to loans, the Company may utilize the Commitment to open irrevocable letters of credit for its account.  Each letter of credit will be issued within a reasonable period of time after Agent’s receipt of a duly completed and executed copy of Agent’s then current form of Application and Reimbursement Agreement or, if applicable, in accordance with the terms of any CoTrade Agreement between the parties, and shall reduce the amount available under the Commitment by the maximum amount capable of being drawn thereunder.  Any draw under any letter of credit issued hereunder shall be deemed a loan under the Commitment and shall be repaid in accordance with this Supplement.  Each letter of credit must be in form and content acceptable to Agent and must expire no later than the maturity date of the Commitment,

SECTION 7.  Security.  The Company’s obligations hereunder and, to the extent related hereto, the MLA, including without limitation any future advances under any existing mortgage or deed of trust, shall be secured as provided in the Security Section of the MLA.

SECTION 8. Commitment Fee.  In consideration of the Commitment, the Company agrees to pay to Agent a commitment fee on the average daily unused portion of the Commitment at the rate of 0.30% per annum (calculated on a 360-day basis), payable monthly in arrears by the 20th day following each month.  Such fee shall be payable for each month (or portion thereof) occurring during the original or any extended term of the Commitment.

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by their duly authorized officers as of the date shown above.

UNITED FCS, PCA

By:    /s/ Jeffrey A. Schmidt    

Title:    CCO    

GRANITE FALLS ENERGY, LLC

By:    /s/ Steven A. Christensen    

Title:    CEO

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