Exhibit 10.26


 


SECOND AMENDMENT TO LOAN AGREEMENT


(NORTHERN
LIGHTS ETHANOL, LLC)


 


U.S.
BANK NATIONAL ASSOCIATION (“Lender”), and NORTHERN
LIGHTS ETHANOL, LLC,


a South
Dakota limited liability company (“Borrower”), by this Second Amendment to Loan
Agreement (this “Amendment”), hereby agree to amend the terms of “Schedule V”
which is attached to and incorporated into the Loan Agreement between them
dated the 11th day of July, 2001, as amended by a “Amendment to Loan Agreement”
dated as of the 22nd day of June, 2004 (collectively referred to herein as the “Loan
Agreement”) as follows:


 


NOW THEREFORE, Schedule V of the Loan Agreement is
amended as follows:


 


Amendment Section 1. That unnumbered paragraph entitled “Working
Capital” is deleted in its entirety and replaced with the following:


 


‘Working
Capital” The Borrower will not permit its Working Capital (the excess of
its current assets over its current liabilities) to be less than $4,000,000.00 as of the effective date of this Amendment, and
at any time thereafter. For purposes of this definition “current assets”
includes that amount of principal which at the date Working Capital is
calculated is available for advance to Borrower under the $5,000,000.00
Revolving Promissory Note amended March 30, 2005 (including any renewal or
replacement of such Note); provided that on such date Borrower would be
entitled to have such additional amount advanced under the terms of such Note.


 


Amendment Section 2. That unnumbered paragraph entitled “Fixed
Charge Coverage Ratio” is deleted in its entirety and replaced with the
following:


 


“Fixed
Charge Coverage Ratio.” For any period of determination with respect to the
Borrower, the ratio of


 


(a)
EBITDA minus (i) any dividends or other distributions, and
(ii) the greater of (A) expenditures for fixed and capital assets not financed
or (B) $500,000,


 


to


 


(b) all required principal payments with respect to Total Liabilities
(including but not limited to all payments with respect to capitalized lease
obligations of the Borrower), plus interest expenses in each case determined for said period in
accordance with GAAP.


 


Amendment Section 3. Those unnumbered paragraphs entitled
“Cash Flow Recapture” and “Excess Cash
Flow” are deleted in their entirety.


 


Amendment Section 4. That unnumbered paragraph entitled “Dividends” is deleted in its
entirety and replaced with the following:


 





















 


“Dividends.”
The Borrower may periodically make distributions to its Members as the Borrower
may determine are appropriate where: (i) Borrower first
provides Lender a full and accurately completed and signed Compliance
Certificate establishing that after the payment of the proposed distributions,
Borrower will remain in compliance with the requirements of this Loan
Agreement, including Schedule V hereto and the other Loan Documents; and
(ii) such distribution would not be in violation of SDCL 47-34A-406, or any
other applicable law. The Compliance Certificate shall be in the form Lender
may from time-to-time otherwise specify.


 


Amendment Section 5.
This Amendment is
effective March 30, 2005. This
Amendment shall be interpreted
consistently with the terms of the Loan Agreement; however to the extent there is a conflict in the provisions of
the Loan Agreement and this Amendment, the terms
of this Amendment shall control. Any
capitalized terms not defined herein shall have the definition given such term
in the Loan Agreement.


 


IN WITNESS WHEREOF, the parties have entered into this
Amendment effective as of the 30th day of March, 2005.


 


	
   

  	
  NORTHERN LIGHTS ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Delton Strasser

  	
   

  
	
   

  	
   

  	
   

  	
  Delton Strasser

  	
   

  
	
   

  	
   

  	
  Its: President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Carl Johnson

  	
   

  
	
   

  	
   

  	
   

  	
  Carl Johnson

  	
   

  
	
   

  	
   

  	
  Its: Assistant Vice
  President

  	
   

  



 


2