AMENDMENT TO THE MASTER LOAN AGREEMENT
Exhibit 10.3
Amendment No. RI0340A
THIS AMENDMENT is entered into as of April 11, 2006, between FARM CREDIT SERVICES OF AMERICA,
FLCA (“Farm Credit”) and ADVANCED BIOENERGY, LLC, Fairmont, Nebraska (the “Company”).
BACKGROUND
Farm Credit and the Company are parties to a Master Loan Agreement dated February 17, 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 (7)(A)(vii) of the MLA is hereby amended and restated to read as follows:
SECTION 7. Conditions Precedent.
(A) Conditions to Initial Supplement. Farm Credit’s obligation to extend credit under the
initial Supplement hereto is subject to the conditions precedent that Agent receive, in form and
content satisfactory to Agent, each of the following:
(vii) Evidence of Capital. Such evidence as Agent may require that the Company has obtained:
(i) equity capital or acceptable binding commitments thereof (including non-repayable Tax Increment
Financing and grants), in an amount not less than $47,650,000.00 with terms and conditions
acceptable to Agent; and (ii) subordinate Industrial Revenue Bond financing from Fillmore County,
Nebraska, in the amount of $7,000,000.00 exclusive of any related issuance costs and reserve
requirements).
2. Sections 10(A) and (B) 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; and (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.
(B) Liens. Create, incur, assume, or allow to exist any mortgage, deed of trust, pledge, lien
(including the lien of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal (collectively, “Liens”). The
foregoing restrictions shall
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not apply to: (i) Liens in favor of Farm Credit; (ii) Liens for taxes, assessments, or
governmental charges that are not past due; (iii) Liens and deposits under workers’ compensation,
unemployment insurance, and social security Laws; (iv) Liens and deposits to secure the performance
of bids, tenders, contracts (other than contracts for the payment of money), and like obligations
arising in the ordinary course of business, as conducted on the date hereof; (v) Liens imposed by
Law in favor of mechanics, materialmen, warehousemen, and like persons that secure obligations that
are not past due; (vi) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment of the
property or assets encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto; and (vii) subordinate Liens securing permitted borrowings
specified in Sections 10(A)(iv) and 10(A)(v) above.
3. Section 10 of the MLA is hereby amended to add Subsection (L) as follows:
SECTION 10. Negative Covenants. Unless otherwise agreed to in writing by Agent, while this
agreement is in effect the Company will not:
(L) Payments on Subordinate Debt. In accordance with, and as permitted by, the terms of the
Debt Subordination Agreement dated as of April 15, 2006, between the Agent, Advanced BioEnergy,
LLC, Xxxxx Fargo Bank, National Association, as trustee, and Farm Credit Services of America, FLCA,
make any payments on the subordinated debt that would cause the Company to be in violation of the
terms of this Agreement.
4. Section 11(B) of the MLA is hereby amended and restated to read as follows:
SECTION 11. Financial Covenants. Unless otherwise agreed to in writing, while this agreement
is in effect:
(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) $44,650,000.00; (ii) increasing to $47,650,000.00 at fiscal year ending 2007; and (iii)
increasing to $48,650,000.00 at fiscal year ending 2008 and thereafter.
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 | ADVANCED BIOENERGY, LLC | |||||||||
| OF AMERICA, FLCA | ||||||||||
By:
|
/s/ Xxxxx Xxxxxxx | By: | /s/ Xxxxx X. Xxxxx | |||||||
Title:
|
Vice President | Title: | Secretary | |||||||
