Exhibit 10.3


 


SECOND
SUPPLEMENT

TO THE

MASTER CREDIT AGREEMENT


(Revolving Facility)


 


THIS SECOND SUPPLEMENT TO THE MASTER CREDIT AGREEMENT  (“Second Supplement”) is made and entered into
as of August 10, 2007, by and between GREAT PLAINS ETHANOL, LLC, d/b/a POET
Biorefining - Chancellor, a South Dakota limited liability company, and AGCOUNTRY
FARM CREDIT SERVICES, FLCA, a federal land credit association organized under
the Farm Credit Act of 1971, as amended. This Second Supplement supplements the
Master Credit Agreement between Lender and Borrower dated as of even date
herewith (as the same may be amended, restated, or otherwise modified (other
than by Supplements entered into pursuant to Section 1.02 thereof) from
time to time, the “Master
Agreement”).


 


RECITALS:


 


A.            Borrower
has requested that Lender make available to Borrower a revolving credit
facility in the amount of $15 million.


 


B.            Lender
is willing to make such revolving credit facility available to Borrower subject
to the terms and conditions hereof.


 


AGREEMENT:


 


1.             Definitions.
Capitalized terms used and not otherwise defined in this Second Supplement have
the meanings attributed to them below or in the Master Agreement. Definitions
in this Second Supplement control over inconsistent definitions in the Master
Agreement, but only to the extent the defined terms apply to Loans under this Second
Supplement. Definitions set forth in the Master Agreement control for all other
purposes. As used in this Second Supplement, the following terms have the
following meanings:


 


“Closing Date”
means August 10, 2007, for purposes of this Second Supplement.


 


“LIBOR”
means the one month London interbank rate reported on the tenth day of the
month by the Wall Street Journal
from time to time in its daily listing of money rates, defined therein as “the
average of interbank offered rates for dollar deposits in the London market
based on quotations at five major banks.” 
If a one month LIBOR rate is not reported on the tenth day of such
month, the one month LIBOR rate reported on the first Business Day preceding
the tenth day of such month will be used. If this index is no longer available,
Lender will select a new index which is based on comparable information.


 


“Margin” means
three percentage points (3.00%) (300 basis points) as the same may be adjusted
pursuant to Section 5(c) of the First Supplement.


 

















 


“Revolving
Commitment Amount” means an amount not to exceed $15,000,000
initially, as reduced from time to time in accordance with the terms of Section
6 of this Second Supplement and the Master Agreement.


 


“Revolving
Credit Availability Period” means the period from the Closing
Date until the Revolving Facility Maturity Date.


 


“Revolving
Facility” means the revolving
credit facility established pursuant to this Second Supplement.


 


“Revolving
Facility Maturity Date” means the earlier of (a) July
1, 2018, and (b) the date on which the Obligations have been declared or have
automatically become due and payable, whether by acceleration or otherwise.


 


“Revolving
Loan” means a Loan made under the Revolving Facility.


 


“Revolving Note”
means the Revolving Credit Note made by Borrower payable to the order of
Lender, dated the date hereof, in the initial aggregate principal amount of $15,000,000
in substantially the form of Exhibit 2A attached hereto.


 


2.             Effect of Second Supplement. This
Second Supplement supplements the Master Agreement, and along with the Master
Agreement sets forth the terms and conditions applicable to the Revolving
Facility.


 


3.             Conditions Precedent. Lender
will have no obligation under this Second Supplement until each of the
following conditions precedent is satisfied or waived in accordance with Section
8.02 of the Master Agreement:


 


(a)           Lender
has received all fees and other amounts due and payable on or prior to the date
hereof, including the fees and amounts for reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by Borrower pursuant
to any Loan Document or any other agreement with Lender;


 


(b)           Lender
has received Borrower’s counterpart of this Second Supplement and the Revolving
Note duly executed and delivered by Borrower;


 


(c)           Lender
has received Borrower’s counterparts of the Master Agreement and all Loan
Documents contemplated thereby, in each case duly executed and delivered by
Borrower, as well as all other duly executed and delivered instruments,
agreements, opinion letters, and documents as Lender may require;


 


(d)           the
representations and warranties set forth in the Master Agreement and each other
Loan Document are true and correct in all material respects as of the date
hereof;


 


(e)           all
conditions precedent in the Master Agreement and each other Loan Document have
been satisfied or waived; and


 


2

















 


(f)            no
Default or Event of Default has occurred and is continuing.


 


4.             Establishment of Revolving Facility.
Lender hereby establishes in favor of Borrower a revolving credit facility in
the amount of the Revolving Commitment Amount. Subject to the terms,
conditions, and limitations herein, Borrower may borrow, prepay and re-borrow
Revolving Loans from time to time in amounts up to the Revolving Commitment
Amount. The aggregate principal amount of the sum of Revolving Loans may not
exceed the Revolving Commitment Amount at any time. Borrower may not borrow or
reborrow during the continuance of a Default or Event of Default. To request a
Revolving Loan, a Responsible Officer will give Lender written notice (or
telephonic notice promptly confirmed in writing) of each request for a
Revolving Loan substantially in the form of Exhibit 2B attached hereto
(a “Revolving Draw Request”) prior to
11:00 a.m. (Fargo, North Dakota Time) three Business Days prior to the
requested date of each Advance under the Revolving Facility. Each Revolving
Draw Request will be irrevocable and  will specify: (a) the aggregate
principal amount to be borrowed and (b) the requested funding date (which must
be a Business Day).


 


5.             Conditions to Each Advance. The
obligation of Lender to make a Revolving Loan is subject to the satisfaction of
the following conditions precedent, unless waived by Lender in accordance with Section
8.02 of the Master Agreement:


 


(a)           Lender
has received a timely Revolving Draw Request;


 


(b)           at
the time of and immediately after giving effect to such Revolving Loan, no
Default or Event of Default exists;


 


(c)           all
representations and warranties of Borrower set forth in the Loan Documents are
true and correct in all material respects on and as of the date of such
Revolving Loan before and after giving effect thereto, except to the extent
such representations and warranties relate solely to an earlier period; and


 


(d)           since
the date of the most recent audited financial statements of Borrower delivered
to Lender, there has been no change which has had or could reasonably be
expected to result in a Material Adverse Effect.


 


6.             Reduction of Commitment; Repayment and Interest
Payments. The Revolving Commitment Amount will be reduced to
$7,500,000 on the date one year prior to the Revolving Facility Maturity Date
and to $0 on the Revolving Facility Maturity Date. The Revolving Commitment
Amount will be further reduced by the amount of any prepayments made which are
subject to Section 10 of this Second Supplement. Borrower will
immediately pay to Lender any amount of Revolving Loans outstanding that is
greater than the Revolving Commitment Amount. Interest accruing on Revolving
Loans will be paid in full on the first day of each month prior to the
Revolving Facility Maturity Date. All remaining principal and accrued interest
and other Obligations related to the Revolving Loans outstanding on Revolving
Loans are due and payable on the Revolving Facility Maturity Date.


 


7.             Interest. Interest on the
unpaid principal amount of Revolving Loans will accrue on a variable interest
rate equal to LIBOR plus the Margin.


 


3

















 


8.             Commitment Fees. Borrower will pay Lender, on the
first day of each calendar quarter in arrears, an unused commitment fee equal
to 40 basis points (0.40%) per annum of the un-drawn amount of the Revolving
Commitment Amount during the Revolving Credit Availability Period.


 


9.             Reaffirmation of Representations and
Warranties. Borrower’s request for a Revolving Loan will be
deemed Borrower’s reaffirmation of its representations and warranties under the
Loan Documents, except to the extent such representations and warranties relate
solely to an earlier period.


 


10.          Prepayment. In addition to the prepayment provisions set forth in the
Master Agreement, in the event the Revolving Facility is repaid, in whole or in
part, as a result of the Borrower refinancing the Revolving Facility with
another lender or through funds received from any other party, then Borrower
will pay to Lender a fee in an amount sufficient (on a present value basis) to
enable Lender to maintain the yield it would have earned during the remainder
of the interest period on the amount paid. Such fees will be calculated in
accordance with methodology established by Lender (a copy of which will be made
available to the Borrower upon request).


 


11.          Counterparts.
This document may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which taken together shall be one and
the same document.


 


SIGNATURE
PAGE FOLLOWS


 


4

















 


IN WITNESS WHEREOF,
the parties have caused this Second Supplement to be duly executed by their
respective authorized officers as of the day and year first written above.


 


 


	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT PLAINS
  ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Darrin Ihnen

  	
   

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  AGCOUNTRY FARM
  CREDIT SERVICES,

  FLCA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Randolph L. Aberle

  	
   

  
	
   

  	
  Name: Randolph
  L. Aberle

  
	
   

  	
  Title: Vice
  President

  
							



 


SIGNATURE
PAGE TO SECOND SUPPLEMENT TO 

MASTER CREDIT AGREEMENT


 

















 


EXHIBIT 2A

REVOLVING CREDIT NOTE


 


	
  $15,000,000

  	
   

  	
  Fargo, North Dakota

  
	
   

  	
   

  	
  August 10, 2007

  



 


FOR VALUE RECEIVED, the
undersigned, GREAT PLAINS ETHANOL, LLC, d/b/a POET Biorefining – Chancellor, a
South Dakota limited liability company (“Borrower”),
hereby promises to pay to the order of AgCountry Farm Credit Services, FLCA
(together with any subsequent holder hereof, “Lender”)
or its successors and assigns, at Post Office Box 6020, 1900 44th Street South,
Fargo, North Dakota 58108, (a) on the Revolving Facility Maturity Date (as
defined in the Master Credit Agreement between Borrower and Lender dated as of August
10, 2007 and the Second Supplement to the Master Credit Agreement (Revolving
Facility) between Borrower and Lender dated the same date (as the same may be
amended, restated, supplemented or otherwise modified from time to time),
collectively known as the “Credit Agreement”), the
principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00) or so much
of the unpaid principal amount of the Revolving Facility (as defined in the
Credit Agreement) as has advanced by Lender to Borrower pursuant to the Credit
Agreement, and (b) on each date specified in the Credit Agreement prior to the Revolving
Facility Maturity Date, the principal amount of the Revolving Loans payable to
Lender on such date as specified therein, in lawful money of the United States
of America in immediately available funds, and to pay interest from the Closing
Date on the unpaid principal amount thereof from time to time outstanding, in
like funds, at said office, at the rate or rates per annum and payable on such
dates as provided in the Credit Agreement. Borrower also promises to pay
Default Interest (as defined in the Credit Agreement), on demand, on the terms
and conditions set forth in the Credit Agreement. In addition, should legal
action or an attorney-at-law be utilized to collect any amount due hereunder,
Borrower further promises to pay all costs of collection, including the
reasonable attorneys’ fees of Lender.


 


All borrowings evidenced by
this Revolving Credit Note and all payments and prepayments of the principal
hereof and the date thereof shall be recorded by Lender in its internal
records; provided, that the failure of Lender to make such a notation or
any error in such notation will not affect the obligations of Borrower to make
the payments of principal and interest in accordance with the terms of this
Revolving Credit Note and the Credit Agreement.


 


This Revolving Credit Note
is issued in connection with, and is entitled to the benefits of, the Credit
Agreement which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, all upon the terms
and conditions therein specified.


 


THIS REVOLVING CREDIT NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH
DAKOTA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.


 


	
   

  	
  GREAT PLAINS ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Darrin Ihnen

  	
   

  
	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
  Title:

  	
  President

  
					



 


1

















 


EXHIBIT 2B


Revolving
Draw Request


 


[Date]


 


AgCountry
Farm Credit Services, FLCA


Post
Office Box 6020


1900 44th Street South


Fargo, North Dakota 58108


Attention:  Randolph L. Aberle


 


Dear Sir:


 


Reference is made to the Master Credit Agreement and
Second Supplement thereto, each dated as of August 10, 2007 (as amended,
restated, supplemented or otherwise modified from time to time and in effect on
the date hereof, the “Credit Agreement”),
between the undersigned as Borrower, and AgCountry Farm Credit Services, FLCA as Lender. Terms
defined in the Credit Agreement are used herein with the same meanings. This
notice constitutes a Revolving Draw Request, and Borrower hereby requests an
Advance under the Revolving Facility, and in that connection Borrower certifies
the following information with respect to the Advance requested hereby:


 


(A)          Aggregate
principal amount of the requested Advance(1):


 


(B)           Date
of the requested Advance (which is a Business Day):        


 


Borrower hereby represents and warrants that the
conditions specified in Section 5 of the Second Supplement are
satisfied.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  GREAT
  PLAINS ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 






(1) Not less than $100,000 and an integral multiple of
$100,000.


 


1