Document:

EXHIBIT 10.2

 

 

Amendment No. RI0475A

AMENDMENT

TO THE

MASTER LOAN AGREEMENT

 

THIS AMENDMENT is entered into as of October 5, 2007, between FARM CREDIT SERVICES OF
AMERICA, FLCA (“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 26, 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)(A)(vii) 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:

(ii) Interim Financial Statements. Effective September 30,
2007, as soon as available, but in no event more than 30 days after the end of
each month, a consolidated balance sheet of the Company and its consolidated
Subsidiaries, if any, as of the end of such month, a consolidated statement of
income for the Company and its consolidated Subsidiaries, if any for such
period and for the period year to date, and such other interim statements as
Agent may reasonably request, all prepared in reasonable detail and in
comparative form in accordance with GAAP consistently applied and, if required
by written notice from Agent, certified by an authorized officer or employee of
the Company acceptable to Agent.

2.     Sections 10(A) and (K) of the
MLA are 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:

(A) Borrowings.
Create, incur, assume, or allow to exist, directly or indirectly, any indebtedness or
liability for borrowed money (including trade or bankers’ acceptances), letters
of credit, or the deferred purchase price
of property or services, except for: (i) debt to Farm Credit; (ii) accounts payable
to trade creditors incurred in the ordinary course of business; (iii) current
operating liabilities (other than for
borrowed money) incurred in the ordinary course of business; (iv) Industrial
Revenue Bond financing from Fillmore
County, Nebraska, in an amount not to exceed $7,000,000.00 (exclusive of any related insurance costs and reserve requirements),
subject to a debt subordination agreement acceptable to Agent; (v) debt of the Company to miscellaneous
creditors, in an aggregate amount not to exceed $1,500,000.00 on terms
and conditions satisfactory to Agent; and (vi) Tax Increment Financing in an amount not to exceed $7,000,000.00.

 

Amendment
RI0475 to Master Loan Agreement RI0475

ABE
Fairmont, LLC

Fairmont,
Nebraska

 

(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 2008, 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 2008 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 numbered RI0340T01 and
any renewals, restatements and amendments thereof, and will remain in compliance with all other loan covenant, terms and
conditions.

3.     Sections 11(A) and (B) of the MLA are 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)
$7,000,000.00 effective September 30, 2007; and (ii) increasing to
$10,000,000.00 effective June 30, 2008, 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) $47,000,000.00;  (ii)
increasing to $53,000,000.00 as of June 30, 2008; and (iii) increasing to $56,000,000.00
at fiscal year ending 2008 and thereafter, except that in determining total
liabilities, the amount of Tax Increment
Financing shall be excluded.

4.     Section 25 of the MLA is
hereby amended and restated to read as follows:

SECTION 25. Assumed Master Loan Agreement.  The parties acknowledge that the Company has
assumed the Master Loan Agreement dated as of February 17, 2006, between Farm
Credit and Advanced BioEnergy, LLC, as the same may have been amended from time
to time (the “Advanced MLA”), together with all obligations thereunder and
under all Supplements, security documents, and other documents related thereto.
The parties agree that the Advanced MLA shall remain in full force and effect
concurrently with this MLA, provided, however, that to the extent of any
inconsistencies between this MLA and the Advanced MLA, the terms and conditions
of this MLA (including without limitation reporting covenants, financial
covenants, and negative and affirmative covenants) shall prevail, and the
Advanced MLA shall be deemed amended accordingly. Consistently with the
foregoing, all Conditions Precedent to lending under this MLA shall apply to,
and be binding upon, any lending under the Advanced MLA.

 

 

2

 

5.    Except as set forth in this amendment, the
MLA, including all amendments thereto, shall continue in full force and effect as written.

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:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:
  

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

3

 

5.    Except
as set forth in this amendment, the MLA, including all amendments thereto,
shall continue in full force and effect as
written.

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:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:
  

  	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

4EXHIBIT 10.3

 

 

Loan No. RI0475S01  

 

STATUSED REVOLVING CREDIT SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated November
20, 2006, (the “MLA”), is entered into as of October 5, 2007, between FARM CREDIT SERVICES OF AMERICA, FLCA (“Farm Credit”) and ABE FAIRMONT, LLC,  Fairmont, Nebraska
(the “Company”).

SECTION 1. The Revolving Credit Facility. On the terms
and conditions set forth in the MLA and this Supplement, Farm Credit agrees to
make loans to the Company during the period set forth below in an aggregate
principal amount not to exceed $8,000,000.00 at any one time outstanding (the “Commitment”).
At no time, however, may the sum of: (i) all indebtedness hereunder and (ii)
all indebtedness, under the Statused Revolving Credit Supplement, between Farm
Credit and Advanced BioEnergy, LLC, as amended, and as formally assumed by the
Company, dated as of February 17, 2006, and numbered RI0340S01, exceed the “Borrowing
Base” {as calculated pursuant to the Borrowing Base Report attached hereto as
Exhibit A). Within the limits of the Commitment, the Company may borrow, repay
and reborrow.

SECTION 2. Purpose. The purpose of the
Commitment is to finance the inventory and receivables referred to in the
Borrowing Base Report.

SECTION 3. Term. The term of the Commitment shall be the date
hereof, up to and including June 1, 2008, or such later date as Agent may, in
its sole discretion, authorize in writing.

SECTION 4. Interest. The Company agrees to pay
interest on the unpaid balance of the loans in accordance with one or more of
the following interest rate options, as selected by the Company:

(A)      Agent Base Rate. At a rate per annum equal
at all times to the rate of interest established by Agent from time to time as
its “Agent Base Rate”, which Rate is intended by Agent to be a reference rate
and not its lowest rate. The Agent Base Rate will change on the date
established by Agent as the effective date of any change therein and Agent
agrees to notify the Company of any such change.

(B)      Quoted Rate. At a fixed rate per annum
to be quoted by Agent in its sole discretion in each instance.   Under this option, rates may be fixed on
such balances and for such periods, as may be agreeable to Agent in its sole
discretion in each instance, provided that:  
(1) the minimum fixed period shall be 30 days; (2) amounts may be fixed
in increments of $100,000.00 or multiples thereof; and (3) the maximum number
of fixes in place at any one time shall be five.

(C)      LIBOR. At a fixed rate per annum equal to “LIBOR”
(as hereinafter defined) plus 3.10%. 
Under this option:  (1) rates may
be fixed for “Interest Periods” (as hereinafter defined) one month; (2) amounts
may be fixed in increments of $100,000.00 or multiples thereof; (3) the maximum
number of fixes in place at any one time shall be five; and (4) rates may only
be fixed on a “Banking Day” (as hereinafter defined) on 3 Banking Days’ prior
written notice. For purposes hereof: (a) “LIBOR” shall mean the rate (rounded
upward to the nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as herein defined) or required by any other federal law or regulation) quoted
by the British Bankers Association (the “BBA”) at 11:00 a.m. London time 2 Banking
Days before the commencement of the Interest Period for the offering of U.S.
dollar deposits in the London interbank market for the Interest Period
designated

 

 

Statused
Revolving Credit Supplement RI0475S01

ABE
Fairmont, LLC 

Fairmont, Nebraska

 

by
the Company, as published by Bloomberg or another major information vendor
listed on BBA’s official website; (b) “Banking Day” shall mean a day on which
Agent is open for business, dealings in U.S. dollar deposits are being carried
out in the London interbank market, and banks are open for business in New York
City and London, England; (c) “Interest Period” shall mean a period commencing
on the date this option is to take effect and ending on the numerically
corresponding day in the next calendar month; provided, however, that: (i) in
the event such ending day is not a Banking Day, such period shall be extended
to the next Banking Day unless such next Banking Day falls in the next calendar
month, in which case it shall end on the preceding Banking Day; and (ii) if
there is no numerically corresponding day in the month, then such period shall
end on the last Banking Day in the relevant month; (d) “Eurocurrency
Liabilities” shall have meaning as set forth in “FRB Regulation D”; and (e) “FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.

The
Company shall select the applicable rate option at the time it requests a loan
hereunder and may, subject to the limitations set forth above, elect to convert
balances bearing interest at the variable rate option to one of the fixed rate
options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is repaid
or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed for periods expiring
after the maturity date of the loans. All elections provided for herein shall
be made electronically (if applicable), telephonically or in writing and must
be received by Agent not later than 12:00 Noon Company’s local time in order to
be considered to have been received on that day; provided, however, that in the
case of LIBOR rate loans, all such elections must be confirmed in writing upon
Agent’s request. Interest shall be calculated on the actual number of days each
loan is outstanding on  the basis of a
year consisting of 360 days and shall be payable monthly in arrears by the 20th
day of the following month or on such other day in such month as Agent shall
require in a written notice to the Company; provided, however, in the event the
Company elects to fix all or a portion of the indebtedness outstanding under
the LIBOR interest rate option above, at Agent’s option upon written notice to
the Company, interest shall be payable at the maturity of the Interest Period
and if the LIBOR interest rate fix is for a period longer than 3 months,
interest on that portion of the indebtedness outstanding shall be payable
quarterly in arrears on each three-month anniversary of the commencement date
of such Interest Period, and at maturity.

SECTION 5.  Promissory Note. The Company promises to repay the unpaid
principal balance of the loans on the last day of the term of the Commitment.
In addition to the above, the Company promises to pay interest on the unpaid
principal balance of the loans at the times and in accordance with the
provisions set forth in Section 4 hereof.

SECTION 6. Borrowing Base Reports, Etc. The Company agrees to
furnish a Borrowing Base Report to Agent at such times or intervals as Agent
may from time to time request. Until receipt of such a request, the Company
agrees to furnish a Borrowing Base Report to Agent within 30 days after each
month end calculating the Borrowing Base as of the last day of the month for
which the Report is being furnished. However, if neither this Supplement nor
Statused Revolving Credit Supplement RI0340S01, as amended, has an outstanding
balance on the last day of such month, then no Report need be furnished.
Regardless of the frequency of the reporting, if at any time the amount
outstanding under the Commitment (combined with the amount outstanding under
Statused Revolving Credit Supplement RI0340S01, as amended, as provided in
Section 1) exceeds the Borrowing Base, the Company shall immediately notify
Agent and repay so much of the loans as is necessary to reduce the amount
outstanding under the Commitment to the limits of the Borrowing Base.

 

2

 

SECTION 7. Letters of Credit. If agreeable to Agent in
its sole discretion in each instance, in addition to loans, the Company may
utilize the Commitment to open irrevocable letters of credit for its account.
Each letter of credit will be issued within a reasonable period of time after
receipt of a duly completed and executed copy of Agent’s then current form of
application or, if applicable, in accordance with the terms of any CoTrade
Agreement between the parties, and shall reduce the amount available under the
Commitment by the maximum amount capable of being drawn thereunder. Any draw
under any letter of credit issued hereunder shall be deemed an advance under
the Commitment.  Each letter of credit
must be in form and content acceptable to Agent and must expire no later than
the maturity date of the loans. Notwithstanding the foregoing or any other
provision hereof, the maximum amount capable of being drawn under each letter
of credit must be statused against the Borrowing Base in the same manner as if
it were a loan, and in the event that (after repaying all loans) the maximum
amount capable of being drawn under the letters of credit exceeds the Borrowing
Base, then the Company shall immediately notify Agent and pay to Agent (to be held
as cash collateral) an amount equal to such excess.

SECTION 8. Commitment Fee. In consideration of the
Commitment, the Company agrees to pay to Agent a commitment fee on the average
daily unused portion of the Commitment at the rate of 3/8 of 1% per annum
(calculated on a 360 day basis), payable monthly in arrears by the 20th day
following each month. Such fee shall be payable for each month (or portion
thereof) occurring during the original or any extended term of the Commitment.
For purposes of calculating the commitment fee only, the “Commitment” shall
mean the dollar amount specified in Section 1 hereof, irrespective of the
Borrowing Base.

SECTION 9. Loan Origination Fee. In consideration of the
Commitment, the Company agrees to pay to Agent on the execution hereof a loan
origination fee in the amount of $20,000.00.

IN WITNESS WHEREOF, the parties have caused
this Supplement 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:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

3

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