Exhibit 10.2
Loan No. RI0475S01A
STATUSED REVOLVING CREDIT SUPPLEMENT
     THIS SUPPLEMENT to the Master Loan Agreement dated November 20, 2006 (the
“MLA”), is entered into as of December 24, 2008 between FARM CREDIT SERVICES OF
AMERICA, FLCA (“Farm Credit”) and ABE FAIRMONT, LLC, Fairmont, Nebraska (the
“Company”), and amends and restates the Supplement dated October 5, 2007 and
numbered RI0475S01.
     SECTION 1. The Revolving Credit Facility. On the terms and conditions set
forth in the MLA and this Supplement, Farm Credit agrees to make loans to the
Company during the period set forth below in an aggregate principal amount not
to exceed, at any one time outstanding, the lesser of $6,000,000.00 (the
“Commitment”), or the “Borrowing Base” (as calculated pursuant to the Borrowing
Base Report attached hereto as Exhibit A). Within the limits of the Commitment,
the Company may borrow, repay and reborrow.
     SECTION 2. Purpose. The purpose of the Commitment is to finance the
inventory and receivables referred to in the Borrowing Base Report.
     SECTION 3. Term. The term of the Commitment shall be from the date hereof,
up to and including February 1, 2010, or such later date as Agent 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 310 basis points above the annual 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 vender 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.
          (C) LIBOR. At a fixed rate per annum equal to “LIBOR” (as hereinafter
defined) plus 3.10%. Under this option: (1) rates may be fixed for “Interest
Periods” (as hereinafter defined) of one

 

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Statused Revolving Credit Supplement RI0475S01A   -2- ABE FAIRMONT, LLC    
Fairmont, Nebraska    

month, 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; 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. 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.

 

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Statused Revolving Credit Supplement RI0475S01A   -3- ABE FAIRMONT, LLC    
Fairmont, Nebraska    

     SECTION 6. Borrowing Base Reports, Etc. The Company agrees to furnish a
Borrowing Base Report to Agent at such times or intervals as Agent may from time
to time request. Until receipt of such a request, the Company agrees to furnish
a Borrowing Base Report to Agent within 30 days after each month end calculating
the Borrowing Base as of the last day of the month for which the report is being
furnished. However, if no balance is outstanding hereunder on the last day of
such month, then no Report need be furnished. Regardless of the frequency of the
reporting, if at any time the amount outstanding under the Commitment exceeds
the Borrowing Base, the Company shall immediately notify Agent and repay so much
of the loans as is necessary to reduce the amount outstanding under the
Commitment to the limits of the Borrowing Base.
     SECTION 7. 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. Notwithstanding the
forgoing or any other provision hereof, the maximum amount capable of being
drawn under each letter of credit must be statused against the Borrowing Base in
the same manner as if it were a loan, and in the event that (after repaying all
loans) the maximum amount capable of being drawn under the letters of credit
exceeds the Borrowing Base, then the Company shall immediately notify Agent and
pay to Agent (to be held as cash collateral) an amount equal to such excess.
     SECTION 8. Security. The Company’s obligations hereunder and, to the extent
related hereto, the MLA, shall be secured as provided in the Security Section of
the MLA, including without limitation as a future advance under any existing
mortgage or deed of trust.
     SECTION 9. 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 3/8 of 1% 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. For purposes of calculating the
commitment fee only, the “Commitment” shall mean the dollar amount specified in
Section 1 hereof, irrespective of the Borrowing Base.

 

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Statused Revolving Credit Supplement RI0475S01A   -4- ABE FAIRMONT, LLC    
Fairmont, Nebraska    

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

                  FARM CREDIT SERVICES       ABE FAIRMONT, LLC OF AMERICA, FLCA
           By ADVANCED BIOENERGY, LLC,                  its sole member
 
               
By:
  /s/ Shane Frahm       By:   /s/ Richard Peterson
 
               
 
               
Title:
  Vice President       Title:   CEO/CFO
 
               

 

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EXHIBIT A
Seasonal Borrowing Base Report

                          ABE Fairmont, LLC (00042404)     Fairmont, Nebraska  
        <— For Period Ending    

For purposes hereof, ELIGIBLE INVENTORY shall mean inventory which: (a) is of a
type shown below; (b) is owned by the borrower and not held by the borrower on
consignment or similar basis; (c) is not subject to a lien except in favor of
Farm Credit Services of America; (d) is in commercially marketable condition;
and (e) is not deemed ineligible by Farm Credit Services of America.
Furthermore, market price shall mean the commodity FOB at the plant. For
purposes hereof, ELIGIBLE RECEIVABLES shall mean rights to payment for goods
sold and delivered or for services rendered which: (a) are not subject to any
dispute, set-off, or counterclaim; (b) are not owing by an account debtor that
is subject to a bankruptcy, reorganization, receivership or like proceeding;
(c) are not subject to a lien in favor of any third party, other than liens
authorized by Farm Credit Services of America in writing; (d) are not owing by
an account debtor that is owned or controlled by the borrower; and (e) are not
deemed ineligible by Farm Credit Service of America.

                              Line   Type of Eligible Asset   Amount/Price/Value
    Advance Rate     Collateral Value   1  
Owned Corn Inventory (bushels)
                           
 
                      2  
Corn Price (lower of cost or market — $/bu)
  $                        
 
                      3  
Corn Value (Line 1 x Line 2)
  $         85 %   $        
 
                    4  
Less All Grain Payables (if applicable to above corn)
  $         -100 %   $        
 
                       
 
                        5  
Owned DDGS Inventory (tons)
                           
 
                      6  
DDGS Price (market — $/ton)
  $                        
 
                      7  
DDGS Value (Line 5 x Line 6)
  $         65 %   $        
 
                       
 
                        8  
Owned WDGS Inventory (tons)
                           
 
                      9  
WDGS Price (market — $/ton)
  $                        
 
                      10  
WDGS Value (Line 8 x Line 9)
  $         65 %   $        
 
                       
 
                        11  
Owned Ethanol Inventory (gallon)
                           
 
                      12  
Ethanol Price (market — $/gallon)
  $                        
 
                      13  
Ethanol Value (Line 11 x Line 12)
  $         80 %   $        
 
                       
 
                        14  
Ethanol Receivables less than 10 days Past Due
  $         85 %   $        
 
                    15  
DDGS & WDGS Receivables less than 10 days Past Due
  $         85 %   $        
 
                       
 
                        16   Total Borrowing Base —>
  $        
 
                         
 
                        17  
Less: Book Overdraft(s)
  $         100 %   $        
 
                    18  
Less: Demand Patron Notes/Deposits
  $         100 %   $        
 
                    19  
Less: Outstanding Balance of Seasonal Loan(s)
  $         100 %   $        
 
                    20  
Less: Issued Letters of Credit
  $         100 %   $        
 
                       
 
                        21   Total Deducts (Lines 17+18+19+20) —>
  $        
 
                         
 
                        22   EXCESS OR DEFICIT* (Line 16 - Line 21) —>
  $        
 
                     

 

*   NOTE: If a deficit exists, please contact Agent (CoBank) immediately with:
1) An updated borrowing base report, and 2) specifics for all payments remitted
since end of period (check numbers, wire routing numbers, etc.)

I HEREBY CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THIS INFORMATION IS TRUE AND
CORRECT.

          Authorized Signature   Title   Date
 
       
 
Printed Name: