Document:

Exhibit 10.1

 

FIRST
AMENDMENT TO FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT

 

This
Amendment to the First Amended and Restated Construction Loan Agreement is
dated as of the 13th day of May, 2010, and is by and between DAKOTA ETHANOL, L.L.C., a South Dakota
limited liability company (“BORROWER”) and FIRST
NATIONAL BANK OF OMAHA (“BANK”), a national banking association
established at Omaha, Nebraska.

 

WHEREAS,
BANK and BORROWER executed a First Amended and Restated Construction Loan
Agreement dated as of June 18, 2009 (the Amended and Restated Construction
Loan Agreement, together with all amendments thereto is herein called the “AGREEMENT”);

 

Now,
therefore, for valuable consideration, receipt and adequacy of which is
acknowledged, the parties agree as follows:

 

1.               All capitalized
terms herein that are not otherwise defined shall have the meanings assigned to
them in the AGREEMENT.

 

2.               Effective
immediately, Sections 1.16 and 1.17 of the AGREEMENT are amended to read as
follows:

 

1.16 “LOAN TERMINATION DATE” means the earliest to
occur of the following: (i) as to TERM NOTE 2, September 1, 2011; as
to the LONG TERM REDUCING REVOLVING NOTE, May 1, 2013; as to the REVOLVING
NOTE, May 12, 2011 (ii) the date the OBLIGATIONS are accelerated
pursuant to this AGREEMENT, and (iii) the date BANK receives (a) notice
in writing from BORROWER of BORROWER’s election to terminate this AGREEMENT and
(b) indefeasible payment in full of all OBLIGATIONS.

 

1.17 “FIXED CHARGE COVERAGE RATIO” means the ratio
derived when comparing (i) EBITDA, less all capital expenditures,
distributions, and taxes, to (ii) BORROWER’s scheduled payments on the
principal and interest of all OBLIGATIONS and SUBORDINATED DEBT made during the
applicable reporting period. “EBITDA” means Earnings Before Interest, Taxes,
Depreciation and Amortization, all experienced during the applicable reporting
period, but to exclude extraordinary items from the calculation.

 

3.               Effective
immediately, Section 1.30 of the AGREEMENT is amended to read as follows:

 

1.30           “BORROWING BASE” means the lesser of:

 

A.            $5,000,000.00,
less the amount of any Letters of Credit issued and 

 

 

outstanding on BORROWER’s account, or

 

B.              The aggregate of (i) 75%
of BORROWER’s Inventory of corn, valued at the lower of cost or market on the
date reported, plus (ii) 75% of BORROWER’s Finished Goods-Distiller’s
Grains Inventory, at current value on the date reported, plus (iii) 75% of
BORROWER’s Finished Goods-Ethanol Inventory, at current market on the date
reported, plus (iv) 50% of BORROWER’s chemicals and enzymes, valued at
cost, plus (v) 75% of the amount of BORROWER’s Ethanol or Distiller’s
Grains Accounts aged thirty days or less, plus (vi) 75% of the amount of
BORROWER’s current State or Federal Incentives Accounts Receivable aged less
than 120 days, and (vii) 100% of the net realizable liquidation value of
BORROWER’s Hedge Accounts which are assigned to BANK in form acceptable to
BANK, less

 

(x) any Accounts
reasonably deemed ineligible by BANK, and any Accounts where the obligated
party has more than 10% of its accounts due to BORROWER which are not current
and (y) the BORROWER’s Accounts Payable, not to exceed the value of
Inventory.

 

4.                       Effective
immediately, Sections 2.1 and 2.2 of the AGREEMENT are hereby amended to read
as follows:

 

2.1           LONG TERM REDUCING REVOLVING LOAN. The BORROWER has
previously delivered to BANK term promissory notes, sometimes referred to as
TERM NOTE 2, TERM NOTE 4, and TERM NOTE 5 or collectively, “TERM NOTES”. TERM
NOTE 5 is sometimes referred to as the “LONG TERM REDUCING REVOLVING NOTE” and
evidences a “LONG TERM REDUCING REVOLVING LOAN”. The NOTE contains provisions
for annual reductions in the available borrowing amounts under the said
NOTE.  All unpaid principal and accrued
interest shall be due and payable on LOAN TERMINATION DATE, if not sooner paid.

 

2.2           REVOLVING LOAN. BANK agrees to lend $5,000,000.00 to
BORROWER pursuant to this facility. BANK will credit proceeds of this revolving
loan (“REVOLVING LOAN”) to BORROWER’s deposit account with the BANK, bearing
number 22673981.

 

2.2.1 Subject to the terms hereof, the BANK will
lend the BORROWER, from time to time until the LOAN TERMINATION DATE such sums
in integral multiples of $10,000.00 as the BORROWER may request by reasonable
same day notice to the BANK, received by the BANK not later than 11:00 A.M.
of such day, but which shall not exceed in the aggregate principal amount at
any one time outstanding, $5,000,000.00 (the “LOAN COMMITMENT”). The BORROWER
may borrow, repay without penalty or premium and reborrow hereunder, from the
date of this AGREEMENT until the LOAN TERMINATION DATE, either the full amount
of the LOAN COMMITMENT or any lesser sum which is $10,000.00 or an integral
multiple thereof. It is the intention of the parties 

 

 

that the outstanding balance of the REVOLVING LOAN
shall not exceed the BORROWING BASE, and if at any time said balance exceeds
the BORROWING BASE, BORROWER shall forthwith pay BANK sufficient funds to
reduce the balance of the REVOLVING LOAN until it is in compliance with this
requirement.

 

5.               Effective
immediately, Section 2.6 of the AGREEMENT is amended to read as follows:

 

2.6 intentionally left blank

 

6.               Effective
immediately, Section 6.1.8 of the AGREEMENT is amended to read as follows:

 

6.1.8 BORROWER shall provide monthly borrowing base
certificates in a form reasonably acceptable to BANK, calculating advance rates
under the REVOLVING LOAN pursuant to the BORROWING BASE.

 

7.               Effective
immediately, Section 6.1.9 of the AGREEMENT is amended to read as follows:

 

6.1.9 The BORROWER shall provide to BANK annually,
or at the request of BANK, its twelve month future cash flow projections,
including a quarterly forward looking debt service coverage projection and
operating metrics with anticipated cash flow requirements for such period.

 

8.               Effective
immediately, Section 6.2.1 of the AGREEMENT is amended to read as follows:

 

6.2.1 Intentionally left blank.

 

9.               Effective
immediately, Section 6.2.2 of the AGREEMENT is amended to read as follows:

 

6.2.2 The BORROWER shall maintain WORKING CAPITAL of
at least $2,500,000.00 at all times.

 

10.             Effective immediately, Section 6.2.4 of the
AGREEMENT is amended to read as follows:

 

6.2.4 intentionally left blank

 

11.             Effective immediately, the AGREEMENT shall be
amended to include a Section 6.2.6, which shall follow existing Section 6.2.5,
to read:

 

 

6,2.6 The BORROWER shall maintain a minimum FIXED
CHARGE COVERAGE RATIO of 1.10 : 1.0.

 

12.             Effective immediately, Section 6.4.1 of the
AGREEMENT is amended to read as follows:

 

6.4.1 Permit any security interest or mortgage or
lien on the PROPERTY or PROJECT or other real or personal property BORROWER
owns now or in the future, or assign any interest that it may have in any
assets or subordinate any rights that it may have in any assets now or in the
future, except: (i) liens, assignments, or subordinations in favor of the
BANK; (ii) liens, assignments, or subordinations outstanding on the date
of this AGREEMENT and disclosed in advance to the BANK in writing and approved
by the BANK; (iii) liens for taxes or assessments or other governmental
charges not delinquent or which the BORROWER is contesting in good faith; (iv) liens
which secure purchase money indebtedness allowed under this AGREEMENT; (v) liens
that are imposed by law for obligations for labor or materials not overdue for
more than 120 days, such as mechanics’, materialmen’s, carriers’, landlords’,
and warehousemen’s liens, or liens, pledges, or deposits under workers’
compensation, unemployment insurance, Social Security, or similar legislation; (vi) liens
on corn oil extraction equipment agreed to by BANK.

 

13.             Effective immediately, Section 6.4.11 of the
AGREEMENT is amended to read:

 

6.4.11 Make, or commit to make, capital expenditures
(including the total amount of any capital leases) in an aggregate amount
exceeding $3,000,000.00 in any single fiscal year.

 

14.             Effective immediately, Section 6.4.12 of the
AGREEMENT is amended to read:

 

6.4.12 Make or pay, in any
fiscal year, distributions to members or shareholders of the BORROWER except as
may be agreed to in writing, in advance, by BANK. Provided, however, BORROWER
may make distributions to members, if BORROWER is not in default of any
covenants or provisions of this AGREEMENT, and no such distribution will result
in the occurrence of an EVENT OF DEFAULT.

 

15.             Effective immediately, notice to BANK as provided in
Section 8.7 of the AGREEMENT shall be as follows:

 

First National Bank of Omaha

One First National Center

1620 Dodge Street STOP 1050

Omaha, Nebraska 68197-1050

Attention: Jeremy Reineke

 

 

16.           BORROWER certifies by its execution hereof that the
representations and warranties set forth in Section 5. of the AGREEMENT
are true as of this date, and that no EVENT OF DEFAULT under the AGREEMENT, and
no event which, with the giving of notice or passage of time or both, would
become such an EVENT OF DEFAULT, has occurred as of this date.

 

17.           This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts of each instrument or agreement,
taken together, shall constitute but one and the same instrument.

 

18.           Except as amended hereby the parties ratify and
confirm as binding upon them all of the terms of the AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have caused
this AGREEMENT to be executed by their respective agents thereunto duly
authorized, as of the date first above written.

 

	
  Dakota Ethanol, L.L.C.

  	
   

  	
  First National Bank of Omaha

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Scott Mundt

  	
   

  	
  By:

  	
  /s/ Jerry Reineke

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
  Jerry Reineke, Second Vice President

  

 

 

	
  STATE OF SOUTH DAKOTA

  	
  )

  	
   

  
	
   

  	
  )ss.

  	
   

  
	
  COUNTY OF LAKE

  	
  )

  	
   

  

 

On this 7 day of June,
2010, before me, the undersigned, a Notary Public, personally appeared Scott
Mundt, Chief Executive Officer Dakota Ethanol, L.L.C., who executed the
foregoing instrument, and acknowledged that he executed the same as his
voluntary act and deed.

 

ALAN E. MAY

NOTARY PUBLIC

SOUTH DAKOTA

My Commission Expires
9-22-2013

 

	
   

  	
  /s/ Alan E. May

  
	
   

  	
  Notary Public

  

 

	
  STATE OF NEBRASKA

  	
  )

  	
   

  
	
   

  	
  )ss.

  	
   

  
	
  COUNTY OF DOUGLAS

  	
  )

  	
   

  

 

On this 14 day of June,
2010 the undersigned, a Notary Public, personally appeared Jeremy Reineke, the
Second Vice President of First National Bank of Omaha, on behalf of said
entity, who executed the foregoing instrument, and acknowledged that he
executed the same as

 

 

his voluntary act and deed.

 

GENERAL NOTARY – STATE OF
NEBRASKA

JACQUELINE K. SIMS

My Commission Exp. March 5,
2014

 

	
   

  	
  /s/  Jacqueline K. Sims

  
	
   

  	
  Notary PublicExhibit 10.2

 

REVOLVING PROMISSORY NOTE

Operating Line of Credit—Revolving
Loan

 

	
  Omaha, Nebraska

  	
  $5,000,000.00

  
	
  Note Date: May 13, 2010

  	
  Maturity Date:
  May 12, 2011

  

 

On or before May 12, 2011, Dakota Ethanol, L.L.C., a
South Dakota limited liability company (“BORROWER”) promises to pay to the
order of First National Bank of Omaha (“BANK”)
at any of its offices in Omaha, Nebraska the principal sum hereof, which shall
be Five Million and no hundredths Dollars ($5,000,000.00) or so much thereof as
may have been advanced by BANK and shown on the records of the BANK to be
outstanding, under this Note and the First Amended and Restated Construction
Loan Agreement (the “AGREEMENT”) executed by the BANK and BORROWER dated as of June 18,
2009, as it may, from time to time, be amended. 
This promissory note evidences the REVOLVING LOAN described in the
AGREEMENT.

 

The interest rate on this loan is subject to change
from time to time based on changes in an independent index which is the London Interbank offered rate for U.S. Dollar deposits published
in the Wall Street Journal as the One (1) Month LIBOR Rate (“LIBOR RATE”).  The LIBOR RATE will be adjusted and
determined without notice to BORROWER as set forth herein, as of the date of
this Note and on the first (1st) day of each calendar month hereafter (“INTEREST
RATE CHANGE DATE”) to the One (1) Month LIBOR RATE which is published in
the Wall Street Journal as the reported rate for the date that is two London
Banking Days prior to each INTEREST RATE CHANGE DATE.  “London Banking Day” means any day other than
a Saturday or Sunday, on which commercial banking institutions in London,
England are generally open for business. 
If for any reason the LIBOR RATE published by the Wall Street Journal is
no longer available and/or BANK is unable to determine the LIBOR RATE for any
INTEREST RATE CHANGE DATE, BANK may, in its sole discretion, select an
alternate source to determine the LIBOR RATE and will provide notice to
BORROWER of the source selected.  The
LIBOR RATE determined as set forth above shall be referred to herein as (the “INDEX”).  The INDEX is not necessarily the lowest rate
charged by BANK on its loans.  If the
INDEX becomes unavailable during the term of this loan, BANK may designate a
substitute index after notifying BORROWER. 
BANK will tell BORROWER the current INDEX rate upon BORROWER’s
request.  The interest rate change will
not occur more often than each month on the first (1st) day of each month.  BORROWER understands that BANK may make loans
based on other rates as well.  The INDEX
currently is .33750 % per annum.  The
interest rate to be applied to the unpaid principal balance of this loan will
be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using
a rate of 3.50 percentage points over the INDEX, adjusted if necessary for any
minimum and maximum rate limitations described below, resulting in an initial
rate of 3.83750% per annum based on a year of 360 days. NOTICE: Under no
circumstances will the interest rate on this loan be less than 4.5% per annum
or more than the maximum rate allowed by applicable law.  Whenever increases occur in the interest
rate, BANK, at its option, may do one of the following: (A)  increase BORROWER’s payments to ensure BORROWER’s
loan will pay off by its original final maturity date, (B)  increase BORROWER’s payments to cover accruing interest, (C) 
increase the number of BORROWER’s payments, and (D) 
continue BORROWER’s payments at the same amount and
increase BORROWER’s final payment.

 

 

Interest accruing hereunder is payable on the
monthly on the first day of each month.

 

UNUSED COMMITMENT FEE. BORROWER will
pay BANK an unused commitment fee of fifty (50 bps) basis points, assessed
quarterly in arrears against the unused portion of the note amount.

 

The AGREEMENT contains additional terms of this
Note, including, but not limited to enumerated events of default, and the
granting of liens to secure BORROWER’s performance.
All capitalized terms not otherwise defined herein shall have the same meanings
as set forth in the AGREEMENT.

 

As provided in the AGREEMENT, upon any such
enumerated default, BANK may accelerate the due date of this Note and declare
all obligations set forth herein immediately due and payable, and BANK shall
also have such other remedies as are described in the AGREEMENT and are
provided by law.  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.

 

Executed as of the 13th day of May, 2010.

 

	
  Dakota Ethanol, L.L.C.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Scott Mundt

  	
   

  
	
   

  	
  Scott Mundt,
  Chief Executive Officer

  	
   

  

 

NOTARY ACKNOWLEDGEMENT

 

	
  STATE OF SOUTH DAKOTA

  	
  )

  	
   

  
	
   

  	
  )ss.

  	
   

  
	
  COUNTY OF LAKE

  	
  )

  	
   

  

 

On this 7 day of June,
2010, before me, the undersigned, a Notary Public, personally appeared Scott
Mundt, Chief Executive Officer of Dakota Ethanol, L.L.C., who executed the foregoing
instrument, and acknowledged that he executed the same as his voluntary act and
deed, as well as that of the company.

 

ALAN E. MAY

NOTARY PUBLIC

SOUTH DAKOTA

My Commission Expires
9-22-2013

 

	
   

  	
  /s/  Alan E. May

  
	
   

  	
  Notary Public

  
	
   

  	
   

  	
  Exp. 9-22-2013

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