Exhibit 10.2


 


FIRST
SUPPLEMENT

TO THE 

MASTER CREDIT AGREEMENT


(Refinance Term Loan)


 


THIS FIRST SUPPLEMENT TO THE MASTER CREDIT AGREEMENT  (“First 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 First Supplement supplements the Master Credit Agreement
between Lender and Borrower dated as of even date herewith (as the same may be
amended, restated, supplemented or otherwise modified (other than by
Supplements entered into pursuant to Section 1.02 thereof) from time to
time, the “Master Agreement”).


 


RECITALS:


 


A.            Pursuant
to the Original Credit Agreement (as defined in the Master Agreement), Lender
has made certain loans and other credit accommodations available to Borrower,
including a construction and term loan referred to as loan number 7572905400 in
Lender’s records and a 2005 term loan referred to as loan number 7602761100 in
Lender’s records (collectively, the “Original Term Loan”).


 


B.            As
of the date hereof, the aggregate principal amount outstanding under the Original
Term Loan is approximately $20,649,482.81, and Borrower wishes to refinance
$20,000,000 of this amount with a new term loan from Lender.


 


C.            Lender
is willing to refinance the Original Term Loan subject to the terms and
conditions hereof.


 


AGREEMENT:


 


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


 


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


 


“Interest Election”
has the meaning set forth in Section 5 of this First 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.


 


“Refinance
Term Loan” means the Loan made by Lender to
Borrower under this First Supplement.


 


“Refinance
Term Loan Maturity Date” means the earlier of (a)
July 1, 2013, and (b) the date on which the Obligations have been declared or
have automatically become due and payable, whether by acceleration or
otherwise.


 


 “Refinance Term Loan Note” means the Refinance Term
Loan Note made by Borrower payable to the order of Lender, dated the date
hereof, in the initial aggregate principal amount of $20,000,000 in
substantially the form of Exhibit 1A attached hereto.


 


“Variable Rate”
has the meaning set forth in Section 5 of this First Supplement.


 


2.             Effect of First Supplement. This
First Supplement supplements the Master Agreement, and along with the Master
Agreement, sets forth the terms and conditions applicable to the Refinance Term
Loan.


 


3.             Conditions Precedent. Lender
will have no obligation under this First 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 First Supplement and the Refinance
Term Loan 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 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;


 


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


 


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(g)           all
amounts outstanding on the Original Term Loan in excess of $20,000,000 have
been paid in full.


 


4.             Repayment.
Borrower will pay to Lender on the first day of the first calendar quarter
following the Closing Date, and on the first day of each calendar quarter
thereafter, through and including the Refinance Term Loan Maturity Date, equal
quarterly principal payments of $833,333.33 plus accrued interest (consisting
of 24 quarterly payments) with a balloon payment on the Refinance Term Loan Maturity
Date. All remaining principal and accrued and unpaid interest outstanding on
the Refinance Term Loan is due and payable on the Refinance Term Loan Maturity
Date.


 


5.             Interest.


 


(a)           Interest
on the Refinance Term Loan will accrue at a variable interest rate equal to
LIBOR plus the Margin (the “Variable Rate”). Alternatively,
Borrower may elect (an “Interest
Election”), from time to time, any one or more of the fixed or
adjustable interest rate available from Lender at the time of the election. The
elected rate must be applied to amounts of not less than $1,000,000 owing on
the Refinance Term Loan, as set forth below, and interest on such amounts shall
accrue at such rate selected by Borrower during the related interest period. Interest
shall accrue at the Variable Rate for any portion of the Refinance Term Loan
for which no Interest Election is in effect. The rates available to Borrower
for election will be based on Lender’s cost of funds plus the Margin in effect
from time to time.


 


(b)           To
make an Interest Election, Borrower will give Lender prior written notice (or
telephonic notice promptly confirmed in writing) of its Interest Election, in
the form of Exhibit 1B attached hereto, no later than five (5) Business
Days prior to the desired effective date (which shall be a Business Day) of
such election. Borrower may make such Interest Elections at any time and from
time to time, without penalty, except as otherwise provided in the Loan
Documents; provided, that Borrower may not elect an interest rate in
which the related Interest Period for such interest rate would extend beyond
the Refinance Term Loan Maturity Date. Lender will determine the rate of
interest in effect from time to time pursuant to this Section 5 and will
notify Borrower of the same, in writing, upon any request by Borrower. Lender’s
determination of the rate of interest hereunder shall be deemed conclusive,
absent manifest error. Borrower acknowledges that the terms of the Master
Agreement, this First Supplement or any other Loan Document may require
Borrower to pay a prepayment premium.


 


(c)           The
Margin applicable to the Refinance Term Loan will be reduced by (x) twenty-five
basis points (0.25%) per annum at such time as Borrower has reached and
maintained an Owners’ Equity Ratio of 55%, and (y) an additional twenty-five
basis points (0.25%) per annum at such time as Borrower has reached and
maintained an Owners’ Equity Ratio of 60%. Such reductions will be applied from
the date of receipt of Borrower’s audited financial statements pursuant to Section
4.01(a) of the Master Agreement. For purposes of this paragraph, Borrower’s
Owners’ Equity Ratio will be based on audited financial statements after taking
into account such adjustments as necessary to reflect reductions resulting from
the annual dividend declaration. Subsequent to any Margin reduction pursuant to
this Section 5, the Margin applicable to the Refinance Term Loan will be
increased by (x) 25 basis points (0.25%) per annum if Borrower’s Owners’ Equity
Ratio falls below 60% as of any quarterly period following 


 


3

















 


application of any
reduction in the Margin pursuant to this paragraph, and (y) an additional 25
basis points (0.25%) per annum (for a total increase of 50 basis points) if
Borrower’s Owners’ Equity Ratio falls below 55% as of any such quarterly
period.


 


6.             Refinance Term
Loan Note. The Refinance
Term Loan will be evidenced by Borrower’s Refinance Term Loan Note and repaid
in accordance with this First Supplement and the Refinance Term Loan Note.


 


7.             Prepayment Fees. In addition to the prepayment
provisions set forth in the Master Agreement, in the event the Refinance Term
Loan is paid, in whole or in part, at any time prior to the Refinance Term Loan
Maturity Date, whether voluntarily or involuntarily (including any prepayment
effected by Lender’s exercise of any right to accelerate), or if Borrower
changes its Interest Election under Section 5(b) of the First Supplement
with respect to the Refinance Term Loan prior to the end of the related
Interest Period, Borrower will pay to Lender a prepayment fee in an amount
which would result in Lender being made whole (on a present value basis) for
the actual or imputed funding losses incurred by Lender as a result of such
early repayment. 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). This prepayment fee is due and payable immediately upon receipt
of any such prepayment. Borrower agrees that this prepayment fee is paid as a
fee for the right to prepay and not as liquidated damages or a penalty.


 


8.             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


 


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IN WITNESS WHEREOF,
the parties have caused this First 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
FIRST SUPPLEMENT TO THE

MASTER CREDIT AGREEMENT


 

















 


EXHIBIT 1A

REFINANCE TERM LOAN NOTE


 


	
  $20,000,000

  	
   

  	
  August 10, 2007

  
	
   

  	
   

  	
  Fargo, North Dakota

  



 


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 Refinance Term Loan Maturity
Date (as defined in the Master Credit Agreement between Borrower and Lender
dated as of August 10, 2007 and the First Supplement to the Master Credit
Agreement (Refinance Term Loan) 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 Twenty Million and No/100 Dollars ($20,000,000.00) or so much
of the unpaid principal amount of the Refinance Term Loan (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 Refinance
Term Loan Maturity Date, the principal amount of the Refinance Term Loan
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 Refinance Term Loan 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 Refinance Term Loan Note and the Credit
Agreement.


 


This
Refinance Term Loan 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
REFINANCE TERM LOAN 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

  
					



 


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EXHIBIT 1B


INTEREST
ELECTION


 


 


[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 First 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 an Interest Election pursuant to Section
5(b) of the First Supplement to the Credit Agreement, and Borrower hereby
elects [a rate available from Lender at the time of the election] for
application to $                              
in principal amount now outstanding under the Refinance Term Loan, and in that
connection Borrower specifies the following information with respect to the
amount to be converted or continued as requested hereby:


 


The effective date of
election (which is a Business Day) (1):


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GREAT
  PLAINS ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 






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


 


1