Exhibit 10.5
Amendment No. RI0475C
AMENDMENT
TO THE
MASTER LOAN AGREEMENT
     THIS AMENDMENT is entered into as of May 12, 2009, between FARM CREDIT
SERVICES OF AMERICA (“Farm Credit”) and ABE FAIRMONT, LLC, Fairmont, Nebraska
(the “Company”).
BACKGROUND
     Farm Credit and the Company are parties to a Master Loan Agreement dated
November 20, 2006 (such agreement, as previously amended, is hereinafter
referred to as the “MLA”). Farm Credit and the Company now desire to amend the
MLA. For that reason, and for valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), Farm Credit and the Company agree
as follows:
1. Section 9(H)(viii) of the MLA is hereby amended and restated to read as
follows:
     SECTION 9. Affirmative Covenants. Unless otherwise agreed to in writing by
Agent while this agreement is in effect, the Company agrees to and with respect
to Subsections 9(B) through 9(G) hereof, agrees to cause each Subsidiary to:
          (H) Reports and Notices. Furnish to Agent:
               (viii) Compliance Certificates. Together with each set of
financial statements furnished to Agent pursuant to Subsection (H)(ii) hereof, a
certificate of an officer or employee of the Company acceptable to Agent, in the
form attached as Exhibit “A” hereto: (a) certifying that no Event of Default or
Potential Default occurred during the period covered by such statement(s) or, if
an Event of Default or Potential Default occurred, a description thereof and of
all actions taken or to be taken to remedy same; and (b) setting forth
calculations showing compliance with the financial covenants set forth in
Section 11 hereof.
2. Section 10(K) of the MLA is hereby amended and restated to read as follows:
     SECTION 10. Negative Covenants. Unless otherwise agreed to in writing by
Agent, while this agreement is in effect the Company will not:
          (K) Dividends, Etc. Declare or pay any dividends, or make any
distribution of assets to the member/owners, or purchase, redeem, retire or
otherwise acquire for value any of its equity, or allocate or otherwise set
apart any sum for any of the foregoing, except that for each fiscal year
commencing with the fiscal year ending 2010, a distribution may be made to the
Company’s members/owners of up to 40% of the net profit (according to GAAP) for
such fiscal year after receipt of the audited financial statements for the
pertinent fiscal year, provided that the Company has been and will remain in
compliance with all loan covenants, terms and conditions. Furthermore, with
respect to the fiscal year ending 2010 and each subsequent fiscal year, a
distribution may be made to its members/owners in excess of 40% of the net
profit for such fiscal year if the Company has made the required “Free Cash
Flow” payment to Agent for such fiscal year as provided in Construction and Term
Loan Supplement dated February 17, 2006, and

 

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Amendment RI0475C to Master Loan Agreement RI0475
ABE FAIRMONT, LLC
Fairmont, Nebraska   -2-

numbered RI0340T01 and any renewals, restatements and amendments thereof, and
will remain in compliance with all other loan covenant, terms and conditions.
3. Section 11 of the MLA is hereby amended and restated to read as follows:
     SECTION 11. Financial Covenants. Unless otherwise agreed to in writing,
while this agreement is in effect:
          (A) Working Capital. The Company will have at the end of each period
for which financial statements are required to be furnished pursuant to
Section 9(H) hereof, an excess of current assets over current liabilities (both
as determined in accordance with GAAP consistently applied) of not less than:
(i) $8,000,000.00 effective on the date hereof; (ii) increasing to $9,000,000.00
effective March 31, 2010; and (iii) increasing to $10,000,000.00 effective
September 30, 2010, and thereafter, except that in determining current assets,
any amount available under the Construction and Revolving Term Loan Supplement
hereto (less the amount that would be considered a current liability under GAAP
if fully advanced) may be included.
          (B) Net Worth. The Company will have at the end of each period for
which financial statements are required to be furnished under Section 9(H)
hereof an excess of total assets over total liabilities (both as determined in
accordance with GAAP consistently applied) of not less than: (i) $48,000,000.00
as of the date hereof; (ii) increasing to $49,000,000.00 as of March 31, 2010;
and (iii) increasing to $50,000,000.00 as of September 30, 2010 and thereafter,
except that in determining total liabilities, the amount of Tax Increment
Financing shall be excluded.
          (C) Debt Service Coverage Ratio. The Company will have at the end of
each fiscal year of the Company, a “Debt Service Coverage Ratio” (as defined
below) of not less than: (i) 0.75 to 1.00 for the fiscal year ending 2009; and
(ii) 1.10 to 1.00 at the end of each fiscal year thereafter. For purposes
hereof, the term “Debt Service Coverage Ratio” shall mean the following (all as
calculated for the most current year-end in accordance with GAAP consistently
applied): (i) net income (after taxes), plus depreciation and amortization;
divided by (ii) all current portion of regularly scheduled long term debt for
the prior period (previous year-end).
4. Except as set forth in this amendment, the MLA, including all amendments
thereto, shall continue in full force and effect as written.

 

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Amendment RI0475C to Master Loan Agreement RI0475
ABE FAIRMONT, LLC
Fairmont, Nebraska   -3-

     IN WITNESS WHEREOF, the parties have caused this amendment 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 R. Peterson
 
   
 
               
Title:
  Vice President
 
  Title:   CEO/CFO