Exhibit 10.2
Sixth Amendment to Construction
Loan Agreement
This Sixth Amendment to Construction Loan
Agreement is dated as of the 2nd day of December, 2004, and
is by and between LSCP, LLLP , an Iowa limited liability
limited partnership (“BORROWER”) and FIRST NATIONAL
BANK OF OMAHA (“BANK”), a national banking
association established at Omaha, Nebraska.
WHEREAS, the BANK and BORROWER executed a
written Construction Loan Agreement dated as of July 25, 2002,
which, together will all amendments thereto, is collectively called
the “AGREEMENT”.
WHEREAS, BORROWER has requested BANK to loan it
up to the sum of $5,400,000.00 (the “EXPANSION LOAN”)
to assist BORROWER in construction of improvements resulting in an
expansion of its existing ethanol plant (“EXPANSION
PROJECT”).
Now, Therefore, in consideration of the
AGREEMENT, and their mutual promises made herein, BANK and BORROWER
agree as follows:
1.
Terms which are typed herein as all
capitalized words and are not defined herein shall have same
meanings as when described in the AGREEMENT.
2.
Paragraph 1.19 (i) of the AGREEMENT
is hereby amended to read as follows:
(i) as to the REVOLVING NOTE, July 22, 2005; as to TERM NOTE 2,
TERM NOTE 3, TERM NOTE 4, June 1, 2008; and TERM NOTE 5, COMPLETION
DATE.
3.
Effective immediately, paragraphs 1.1, 1.5 ,1.6, 1.7, 1.10, 1.25,
1.26, and 1.36 of the AGREEMENT are amended to read:
1.1
“ASSIGNMENT OF EXPANSION CONTRACT” means the assignment
of the agreement (“EXPANSION CONTRACT”) between the
BORROWER and ICM, Inc. (the “GENERAL CONTRACTOR”) for
preparation of PLANS and construction of the EXPANSION PROJECT in
accordance with PLANS therein described, by which the BORROWER
assigns, as additional security for repayment of the OBLIGATIONS,
the BORROWER’s interest in the EXPANSION CONTRACT in a form
acceptable to the BANK in the exercise of its reasonable
discretion.
1.5
“CLOSING” shall mean the date on which the BANK
receives this AGREEMENT, executed by the BORROWER, together with
TERM NOTE 5.
1.6
“CONSTRUCTION LOAN TERMINATION DATE” means the earlier
of (i) the date which is ten months subsequent to CLOSING, (ii) the
COMPLETION DATE, or (iii) such earlier date upon which the
BANK’s commitment to make disbursements under TERM NOTE 5 is
terminated.
1.7
“COMPLETION DATE” means the earlier of September 1,
2005, or the date the BANK determines following a proper inspection
and in the exercise of BANK’s
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reasonable discretion, that the
EXPANSION PROJECT has been completed in accordance with the
PLANS.
1.10
“DRAW REQUEST” means forms acceptable to the BANK to be
submitted to the BANK by BORROWER when a disbursement is requested
under TERM NOTE 5.
1.25
“PLANS” means the plans and specifications prepared by
the GENERAL CONTRACTOR for the EXPANSION PROJECT and identified to
this AGREEMENT by the GENERAL CONTRACTOR, the BORROWER and the
BANK.
1.26
“EXPANSION PROJECT” means the design and construction
of an addition to BORROWER’s ethanol plant, together with all
necessary and appropriate fixtures, equipment, attachments, and
accessories, as described in the PLANS, to be constructed on the
PROPERTY.
1.36
“LIBOR RATE” shall mean (a) the quotient of the (i)
LIBOR BASE RATE divided by (ii) one minus the applicable LIBOR
RESERVE PERCENTAGE plus (b) 280 basis points in the case of the
TERM NOTE 2, or 330 basis points in the case of TERM NOTE 5, or 380
basis points in the case of TERM NOTE 3, TERM NOTE 4, and REVOLVING
NOTE. The LIBOR RATE shall be adjusted automatically on and
as of the effective date of any change in the LIBOR RESERVE
PERCENTAGE.
4.
The following additional paragraphs 2.14, 2.15, and 2.16 shall be
added to the AGREEMENT, immediately following existing paragraph
2.13:
2.14
EXPANSION LOAN. The BANK agrees, on the terms and subject to
the conditions hereinafter set forth, to make, from time to time
during the period from the date of execution of this AGREEMENT to
and including the CONSTRUCTION LOAN TERMINATION DATE disbursements
to the BORROWER in an aggregate principal amount not to exceed the
amount of the EXPANSION LOAN for the sole purpose of paying
approved construction costs of the EXPANSION PROJECT. If,
prior to the COMPLETION DATE, there is paid to BANK a third party
payment (a grant payment, for example), which is applied to the
EXPANSION LOAN, BANK will advance such amount, or a lesser sum, as
in BANK’s reasonable discretion is necessary to complete the
EXPANSION PROJECT. Approved construction costs are costs
actually incurred in connection with the construction of the
EXPANSION PROJECT, which shall include but not be limited to costs
of permits, licenses, labor, supplies, materials, services,
equipment, insurance premiums, real estate taxes and interest on
disbursements. Construction costs do not include the cost
associated with termination under §14 of the General
Conditions of Contract to the EXPANSION CONTRACT.
2.15
“TERM NOTE 5” means the promissory note of the BORROWER
in the form of Exhibit 6-A evidencing borrowings under the
EXPANSION LOAN of up to a maximum amount of Five Million Four
Hundred Thousand ($5,400,000.00) Dollars. Notwithstanding any
provisions of TERM NOTE 5, interest shall be payable at the rate
provided therein only on such portions of the EXPANSION LOAN
proceeds as actually have been disbursed pursuant to this
AGREEMENT.
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2.16
Prior to CONSTRUCTION COMPLETION DATE, BORROWER shall pay BANK
interest only, due quarterly. On CONSTRUCTION COMPLETION
DATE, the outstanding balance of TERM NOTE 5 will be added to the
principal balance of TERM NOTE 3, and thus repaid.
5.
Paragraph 8.7 of the AGREEMENT is hereby amended, effective
immediately, to read:
8.7
Addresses for Notices, Etc. Exc
