Exhibit 10.34
CONSTRUCTION NOTE
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| $94,000,000.00 |
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November 30, 2007 |
1. FOR
VALUE RECEIVED, HOMELAND ENERGY SOLUTIONS, LLC, an Iowa
limited liability company (“ Borrower ”), hereby
promises to pay to the order of HOME FEDERAL SAVINGS BANK, a
federally chartered stock savings bank organized under the laws of
the United States (“ Lender ”), the principal
sum of Ninety Four Million and No/100ths ($94,000,000.00) Dollars,
or so much thereof as may be advanced to, or for the benefit of,
Borrower and be outstanding, with interest thereon, to be computed
on each advance from the date of its disbursement as set forth
herein, and pursuant to that certain Master Loan Agreement of even
date herewith by and between Lender and Borrower (as the same may
be amended, modified, supplemented, extended or restated from time
to time, the “MLA” ), and pursuant to that
certain First Supplement to the MLA, of even date herewith, by and
between Lender and Borrower (as it may be amended, modified,
supplemented, extended or restated from time to time, the
“First Supplement” ), and which remains unpaid,
in lawful money of the United States and immediately available
funds. This Construction Note (this “ Note ”) is
issued pursuant to the terms and provisions of the MLA and the
First Supplement and is entitled to all of the benefits provided
for in the MLA and the First Supplement. All capitalized terms used
and not defined herein shall have the meanings assigned to them in
the MLA and the First Supplement.
2. The
outstanding principal balance of this Note shall bear interest at a
variable rate determined by Lender to be 350 basis points above the
LIBOR Rate in effect on the date of the first Advance made to
Borrower under this Note. Notwithstanding the foregoing, the rate
of interest under this Note may be adjusted by Lender pursuant to
the provisions of the MLA, the First Supplement and this Note. On
the Conversion Date, up to but not more than fifty percent (50%) of
the outstanding principal balance under this Note may, at
Borrower’s option, be converted to a fixed rate of interest
at the rate set forth in Section 9 of this Note.
3. “LIBOR Rate” (London Interbank Offered Rate)
means 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
hereinafter 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
(as hereinafter defined) before the commencement of the Interest
Period for the offering of U.S. Dollar deposits in the London
interbank market for an Interest Period of one month, as published
by Bloomberg or another major information vendor listed on
BBA’s official website. “Banking Day” shall mean
a day on which Lender 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.
“Eurocurrency Liabilities” has the meaning as set forth
in FRB Regulation D. “FRB Regulation D” means
Regulation D as promulgated by the Board of Governors of the
Federal Reserve System, 12 CFR Part 204, as amended from time
to time.
4. The
rate of interest due hereunder shall initially be determined as of
the date hereof and shall thereafter be adjusted, as and when, the
LIBOR Rate changes. All such adjustments to the rate of interest
shall be made and become effective as of the first day of the month
following the date of any change in the LIBOR Rate and shall remain
in effect until and including the day immediately preceding the
next such adjustment (each such day hereinafter being referred to
as an “ Adjustment Date ”). All such adjustments
to said rate shall be made and become effective as of the
Adjustment Date, and said rate as adjusted shall remain in effect
until and including the day immediately preceding the next
Adjustment Date. Interest hereunder shall be computed on the basis
of a year of three hundred sixty (360) days, but charged for
actual days principal is outstanding.
5. Advances may only be made under this Note until the
Conversion Date after which no further Advances may be made
hereunder. No amounts may be readvanced under this Note. Any
principal repayment by Borrower will reduce Lender’s
commitment on the Construction Loan.
6. Borrower will pay interest on the Construction Loan monthly
in arrears on the first day of each month commencing on the first
Monthly Payment Date following the date on which the first Advance
is made hereunder, and continuing on each Monthly Payment Date
thereafter until the Conversion Date. On the Conversion Date, all
outstanding accrued interest shall be due and payable in
full.
7. On the
Conversion Date, $20,000,000.00 of the outstanding principal
balance of this note shall be converted into the Term Revolving
Note pursuant to the MLA and the Second Supplement to the MLA. The
remaining outstanding princ
