EXHIBIT 10.5
Amendment No
RI0340T01B
AMENDMENT
TO
THE
CONSTRUCTION
AND TERM LOAN SUPPLEMENT
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 ADVANCED BIOENERGY, LLC, Fairmont, Nebraska
(“Advanced”) are parties to a Construction and
Term Loan Supplement dated February 17, 2006 (such agreement, as
previously amended, is hereinafter
referred to as the “Supplement”). Further, the Company
has formally assumed all obligations under the
Supplement from Advanced. Farm Credit and the Company now desire to
amend certain sections of the
Supplement. For that reason, and for valuable consideration (the
receipt and sufficiency of which are
hereby acknowledged), Farm Credit and the Company agree that the
following sections of the Supplement
are hereby amended to read as follows:
1.
Section 5 of the
Supplement is hereby amended to add Subsection (C) as
follows:
SECTION 5. Interest and Fees.
(C) Amendment Fee. In consideration of the
amendment, the Company agrees to pay to Agent on the
execution hereof a fee in the amount of $30,000.00.
2.
Section 6 of the
Supplement is hereby amended and restated to read as
follows:
SECTION 6. Promissory Note. The Company promises to
repay the loans as follows: (i) in 24 equal, consecutive
quarterly installments of $2,250,000.00 with the first such
installment due on May 20, 2008, and the last
such installment due on February 20, 2014; and (ii) followed by a
final installment
in an amount equal to the remaining unpaid principal balance of the
loans on May 20, 2014. If any installment due date is not a day on
which Agent is open for business, then such installment shall
be due and payable on the next
day on which Agent is open for business. In addition to the above,
the Company promises to pay interest on the unpaid principal
balance hereof at the times and in accordance with the provisions set forth in Section 5
hereof.
In addition, for each
fiscal year end, beginning with the fiscal year ending in 2008, and
ending with the fiscal year ending in 2010, the Company shall
also, within ninety (90) days after the end of such fiscal
year, make a special payment
of an amount equal to 75% of the “Free Cash Flow” (as
defined below) of the Company, however, such payment shall not to
exceed $8,000,000.00 in any fiscal year; provided, however, that:
(i) if such payment would result in a covenant default under this
Supplement or the MLA, the amount of the payment shall be
reduced to an amount which would not result in a covenant default;
(ii) if such payment would result in a breakage of a fixed interest
rate, the applicable broken funding surcharges would still apply; and (iii)
the aggregate of such payments shall not exceed
$16,000,000.00. The term
“Free Cash Flow” is defined as the Company’s
annual profit net of taxes, plus the respective fiscal
year’s depreciation and amortization expense, minus
allowable capitalized expenditures for fixed assets, allowed distributions to
members/owners, and scheduled term loan payments to
Agent. This special payment shall be applied to the
principal installments in the inverse order of their
maturity.
Amendment RI0340T01B to Supplement
RI0340T01
ABE
Fairmont, LLC
Fairmont, Nebraska
3.
Section 13(A) of the
Supplement is hereby amended and restated to read as
follows:
SECTION 13. Casualties.
(A) Right to Elect to Apply Proceeds. In case of material
loss or damage to the Property or to the Improvements by
fire, by a taking by condemnation for public use or the action of
any governmental authority or
agency, or the transfer by private sale in lieu thereof, either
temporarily or permanently, or otherwise, if in the sole
judgment of Agent there is reasonable doubt as to Company’s
ability to complete construction of the Improvements on or before
October 31, 2007, by reason of such loss or damage or because of
delays in making settlements with governmental agencies or
authorities or with insurers,
Agent may terminate its obligations to make advances hereunder and
elect to collect, retain and apply to the Commitment all proceeds
of the taking or insurance after deduction of all expense of
collection and settlement, including attorneys’ and
adjusters’ fees and charges. In the event such
proceeds are
insufficient to pay the Commitment in full, Agent may declare the
balance remaining unpaid on the Commitment to be due and
payable forthwith and avail itself on any of the remedies afforded
thereby as in any case of
default.
4.
Except as set forth in this
amendment, the Supplement, 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.
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FARM
CREDIT SERVICES
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ABE
FAIRMONT, LLC
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OF
AMERICA, FLCA
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By
ADVANCED BIOENERGY, LLC,
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its sole
member
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