Exhibit 10.3
Loan No. RI0340T03
REVOLVING CREDIT SUPPLEMENT
Letters of Credit
     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 February 17, 2006 and
numbered RI0340S01, as amended.
     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 $2,000,000.00 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 allow the Company
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 a 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 3. Term. The term of the Commitment shall be from the date hereof,
up to and including February 1, 2012, 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

 

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      Revolving Credit Supplement Letters of Credit RI0340T03   -2- ABE
FAIRMONT, LLC     Fairmont, Nebraska    

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 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 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.

 

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      Revolving Credit Supplement Letters of Credit RI0340T03   -3- ABE
FAIRMONT, LLC     Fairmont, Nebraska    

     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. 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 7. 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.
     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