Exhibit
4(a)


EXECUTION
COPY


EIGHTH AMENDMENT TO CONSTRUCTION AND TERM

LOAN AGREEMENT


          THIS EIGHTH
AMENDMENT TO CONSTRUCTION AND TERM LOAN AGREEMENT (this “Amendment”),
dated as of September 1, 2010, is executed by and among LEVELLAND/HOCKLEY
COUNTY ETHANOL, LLC, a Texas limited liability company (the “Borrower”),
each of the Lenders or other lending institutions which is a signatory hereto
or any successor or assignee thereof, and GE BUSINESS FINANCIAL SERVICES INC.
(in its capacity as administrative agent for the Lenders, together with its
successors in such capacity, the “Administrative Agent”).


R E C I T A L S:


          A. The
Borrower, the Lenders, and the Administrative Agent are parties to that certain
Construction and Term Loan Agreement, dated as of September 27, 2006, as
amended by (a) that certain First Amendment to Construction and Term Loan
Agreement and other Loan Documents dated as of August 10, 2007,
(b) that certain Second Amendment to Construction and Term Loan Agreement
dated as of February 15, 2008, (c) that certain Third Amendment to
Construction and Term Loan Agreement dated as of February 19, 2008,
(d) that certain Fourth Amendment to Construction and Term Loan Agreement
dated as of May 31, 2008, (e) that certain Fifth Amendment to
Construction and Term Loan Agreement dated as of May 31, 2008,
(f) that certain Sixth Amendment to Construction and Term Loan Agreement
dated as of January 29, 2009, and (g) that certain Seventh Amendment
to Construction and Term Loan Agreement dated as of September 4, 2009 (as
has been and may be amended, modified, supplemented or restated from time to
time, the “Loan Agreement”).


          B. The
Borrower, the Administrative Agent and the Required Lenders desire to amend the
Loan Agreement and agree to the other matters as described herein, subject to
the terms and conditions contained herein.


          NOW,
THEREFORE, in consideration of the premises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows intending to be legally
bound:


ARTICLE I



Definitions


          Section 1.1
Definitions. Capitalized terms used in this Amendment, to the extent not
otherwise defined herein, shall have the same meanings as in the Loan
Agreement, as amended hereby.


ARTICLE II



Amendments and Agreements


          Section 2.1
New Definition. Section 1.1 of the Loan Agreement is amended by adding
thereto, in alphabetical order, a new definition reading as follows:


1








	
  

 	
  

 
	
  

 	
           “Trigger
 Date” means the later of (i) January 31, 2011, and
 (ii) the earlier of (x) the date on which the New FEL Subordinated
 Debt terminates or matures (whether at stated maturity, by acceleration or
 otherwise) and (y) December 31, 2011. FEL shall have the right, but
 not the obligation, upon 15 days’ prior written notice to the Administrative
 Agent, to extend the maturity date of the New FEL Subordinated Debt through
 and including December 31, 2011, without the requirement to obtain any
 further consents or approvals from the Administrative Agent or the Lenders.

 


          Section 2.2
Amendment to Definition of New FEL Subordinated Debt. The definition of
“New FEL Subordinated Debt” is amended and restated to read as follows:


	
  

 	
  

 
	
  

 	
           “New
 FEL Subordinated Debt” means the $4,000,000 of revolving line of credit,
 inclusive within such amount the amounts of any letters of credit drawn upon
 or obtained by or through FEL for the benefit of Borrower all pursuant to the
 New FEL Loan Agreement.

 


          Section 2.3
Amendment to “Calculation Start Date” Definition. The definition of
“Calculation Start Date” found in Section 1.1 of the Loan Agreement is
amended and restated in its entirety to read as follows:


	
  

 	
  

 
	
  

 	
           “Calculation
 Start Date” means October 1, 2010.

 



          Section
2.4 EBITDAR Coverage Ratio. The first sentence of Section 6.10(a) of the
Loan Agreement is amended and restated in its entirety to read as follows:


	
  

 	
  

 
	
  

 	
           Borrower’s
 EBITDAR Coverage Ratio shall at all times between the Calculation Start Date
 and the Trigger Date be equal or exceed 1.20 to 1.0 and shall at all times
 after the Trigger Date equal or exceed 1.40 to 1.0. For clarity and avoidance
 of doubt, prior to the end of Borrower’s third quarter in fiscal year 2011,
 the foregoing ratio will be “annualized,” which means for the fourth quarter
 of fiscal year 2010, the applicable financial information for such quarter
 times four; for the first quarter of fiscal year 2011, the applicable
 financial information for such quarter and for the prior quarter times two;
 and for the second quarter of fiscal year 2011, the applicable financial
 information for such quarter and the two prior quarters times 1.33.

 



          Section
2.5 Leverage Ratio. Section 6.10(b) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:


	
  

 	
  

 
	
  

 	
           “(b) Leverage
 Ratio. Beginning October 1, 2010, and at all times thereafter,
 Borrower’s Leverage Ratio shall be equal to or less than the ratio set forth
 below that corresponds to the applicable period of the calculation:

 



2









	
  

 	
  

 	
  

 
	
 Period of Calculation:

 	
  

 	
 Ratio:

 
	

 


 	
  

 	

 


 
	
 October 1,
 2010 through and including the Trigger Date

 	
  

 	
 4.0 to 1.00

 
	
 January 1,
 2012 through and including December 31, 2012

 	
  

 	
 2.17 to 1.00

 
	
 January 1,
 2013 and thereafter

 	
  

 	
 1.82 to 1.00

 






	
  

 	
  

 
	
  

 	
 Notwithstanding
 the foregoing, if the Trigger Date occurs before December 31, 2011,
 Borrower’s Leverage Ratio reverts automatically to 2.54 to 1.00 for the
 period from January 1, 2011 through December 31, 2011. 

 
	
  

 	
  

 
	
  

 	
 For clarity
 and avoidance of doubt, prior to the end of Borrower’s third quarter in
 fiscal year 2011, the foregoing ratio will be “annualized,” which means for
 the fourth quarter of fiscal year 2010, the applicable financial information
 for such quarter times four; for the first quarter of fiscal year 2011, the
 applicable financial information for such quarter and for the prior quarter
 times two; and for the second quarter of fiscal year 2011, the applicable
 financial information for such quarter and the two prior quarters times 1.33.

 



          Section
2.6 Additional Event of Default. Section 9.1(f) of the Loan Agreement is
hereby amended and restated in its entirety to read as follows:


	
  

 	
  

 
	
  

 	
           (f) New
 FEL Subordinated Debt. New FEL Subordinated Debt shall have terminated,
 matured (whether at stated maturity, by acceleration or otherwise) or
 otherwise not be available for Borrower to obtain advances thereunder before
 January 31, 2011.

 


          Section 2.7
Waiver of Certain Financial Covenant Defaults. Administrative Agent and
Lenders hereby waive any Default by Borrower occasioned by Borrower’s failure
to meet the EBITDAR Coverage Ratio and the Leverage Ratio prior to the
Calculation Start Date.


          Section 2.8
Amendment Fee. In consideration of the execution of this Amendment and
the waiver provided for in Section 2.7 hereof, Borrower irrevocably and
unconditionally agrees to pay to Administrative Agent, for the benefit of the
Lenders, a fee in the amount of $20,000.00, such fee being due and payable as
follows:


	
  

 	
  

 
	
  

 	
           (a)
 $1,600 per month on the first day of each month, beginning October 1,
 2010, for 10 consecutive months; and

 
	
  

 	
  

 
	
  

 	
           (b)
 $4,000 being payable on August 1, 2011,

 
	
  

 	
  

 
	
  

 	
 plus
 in each case if payment is late, interest on the unpaid amount of such fee
 shall accrue and be payable on demand at the Interest Rate from the date of
 this Amendment until paid.

 


          Section 2.9
Expenses. Without limiting anything contained in the Loan Documents,
Borrower acknowledges and agrees that Borrower shall pay, as a condition to
this Amendment, all reasonable third-party costs and expenses of Administrative
Agent and the Lenders, including


3





without limitation reasonable attorneys’ fees, in connection with
preparing, negotiating, and executing this Amendment.


ARTICLE III


Conditions Precedent


          Section 3.1
Condition. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent:


	
  

 	
  

 
	
  

 	
           (a) Amendment;
 Amendment Fee; Expenses. The Administrative Agent shall have received
 this Amendment executed by the Borrower, the Administrative Agent and the
 Required Lenders, and Administrative Agent shall have received payment of the
 fees and expenses provided for in Sections 2.8 and 2.9 above.

 
	
  

 	
  

 
	
  

 	
           (b) Default.
 Upon giving effect to this Amendment, no Default shall have occurred and be
 continuing.

 
	
  

 	
  

 
	
  

 	
           (c) Representations
 and Warranties. All of the representations and warranties contained in
 Article IV of the Loan Agreement and in the other Loan Documents shall
 be true and correct on and as of the date of this Amendment with the same
 force and effect as if such representations and warranties had been made on
 and as of such date, except to the extent such representations and warranties
 speak to a specific date.

 


ARTICLE IV


No Waiver


          Nothing
contained herein shall be construed as a consent by the Administrative Agent
and the Lenders to any breach of any covenant or provision of the Loan
Agreement, the other Loan Documents, this Amendment, or of any other contract
or instrument among Borrower, the Administrative Agent and the Lenders, and the
failure of the Administrative Agent or any Lender at any time or times
hereafter to require strict compliance by Borrower of any provision thereof
shall not waive, affect or diminish any right of the Administrative Agent and
the Lenders to thereafter demand strict compliance therewith. Nothing contained
in this Amendment shall be deemed or construed to waive any condition,
obligation, Default, or Event of Default except to the extent expressly waived
herein. The Administrative Agent and the Lenders hereby reserve all rights
granted under the Loan Agreement and the other Loan Documents (in each case as
amended by this Amendment), and this Amendment and any other contract or
instrument among Borrower, the Administrative Agent and any of the Lenders.


ARTICLE V


Ratifications, Representations and Warranties


          Section 5.1
Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and the other Loan Documents and except as expressly
modified and superseded by this Amendment,


4






the terms and provisions of the Loan Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. The Borrower, the Administrative Agent and the Lenders agree that the
Loan Agreement as amended hereby shall continue to be legal, valid, binding and
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors
generally.


          Section 5.2
Representations and Warranties. The Borrower hereby represents and
warrants to the Administrative Agent and the Lenders that (i) the
execution, delivery and performance of this Amendment and any and all other
Loan Documents executed or delivered in connection herewith have been authorized
by all requisite action on the part of the Borrower and will not violate the
articles of organization, operating agreement or regulations or other
organizational documents of the Borrower, (ii) the representations and
warranties contained in the Loan Agreement, as such Loan Agreement is amended
hereby, and any other Loan Document are true and correct on and as of the date
hereof as though made on and as of the date hereof except for those that relate
solely to a specific date or have changed as a result of transactions permitted
by the Loan Agreement, (iii) after giving effect to this Amendment, no
Default has occurred and is continuing, and (iv) after giving effect to
this Amendment, the Borrower is in full compliance with all material covenants
and agreements contained in the Loan Agreement as amended hereby.


ARTICLE VI



Miscellaneous


          Section 6.1
Survival of Representations and Warranties. All representations and
warranties made in this Amendment or any other Loan Document (as amended by this
Amendment), including any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and such
other Loan Documents, and no investigation by the Administrative Agent or any
Lender shall affect the representations and warranties or the right of the
Administrative Agent or any Lender to rely upon them.


          Section 6.2
Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.


          Section 6.3
GOVERNING LAW. THIS LOAN AGREEMENT, THE NOTE AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED IN ALL
RESPECTS BY THE LAWS OF THE STATE OF ILLINOIS, NOT INCLUDING ITS CONFLICT OF
LAW PROVISIONS; PROVIDED THAT THE LAWS OF THE STATE WHERE REAL PROPERTY
COLLATERAL IS LOCATED SHALL GOVERN WITH RESPECT TO THE CREATION, PERFECTION AND
ENFORCEMENT OF RIGHTS, SECURITY INTERESTS, REMEDIES AND LIENS AGAINST THE REAL
PROPERTY COLLATERAL.


5





          Section 6.4
Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of the Administrative Agent, the Lenders and the Borrower and
their respective successors and assigns, except the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Administrative Agent and the Lenders.


          Section 6.5
Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument. Facsimiles of signatures shall be binding and effective as
originals.


          Section 6.6
Effect of Waiver. No consent or waiver, express or implied, by the
Administrative Agent or any Lender to or for any breach of or deviation from
any covenant, condition or duty by the Borrower shall be deemed a consent or
waiver to or of any other breach of the same or any other covenant, condition
or duty.


          Section 6.7
Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.


          Section 6.8
ENTIRE AGREEMENT. THIS AMENDMENT, THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO
RELATING TO THIS AMENDMENT AND SUPERSEDE ANY AND ALL PRIOR AND CONTEMPORANEOUS
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.


[Remainder of Page Left Blank Intentionally]

[Signature Pages Follow]


6





          IN WITNESS
WHEREOF, this Amendment is executed as of the date first set forth above.


	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 
	
  

 	
  

 	
  

 
	
  

 	
 LEVELLAND/HOCKLEY
 COUNTY ETHANOL, LLC

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 











	
  

 	
  

 	
  

 
	
  

 	
 ADMINISTRATIVE AGENT AND LENDER:

 
	
  

 	
  

 	
  

 
	
  

 	
 GE BUSINESS
 FINANCIAL SERVICES, INC.,

 as Administrative Agent and as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 











	
  

 	
  

 	
  

 
	
  

 	
 OTHER LENDERS:

 
	
  

 	
  

 	
  

 
	
  

 	
 STATE BANK
 OF TEXAS,

 
	
  

 	
 as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 











	
  

 	
  

 	
  

 
	
  

 	
 PALM DESERT
 NATIONAL BANK,

 
	
  

 	
 as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 












	
  

 	
  

 	
  

 
	
  

 	
 COMMUNITY
 FIRST BANK,

 
	
  

 	
 as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 












	
  

 	
  

 	
  

 
	
  

 	
 MIDWEST BANK
 OF WESTERN ILLINOIS,

 
	
  

 	
 as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 











	
  

 	
  

 	
  

 
	
  

 	
 TEXAS
 CITIZENS BANK N.A.,

 
	
  

 	
 as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 











	
  

 	
  

 	
  

 
	
  

 	
 INTERSTATE
 BANK, SSB,
as a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title: