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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. Except as otherwise expressly provided herein, all notices, requests, demands and other communications provided for under the LOAN DOCUMENTS shall be in writing and mailed or delivered to the applicable party at its address indicated below:
If to the BORROWER: LSCP, LLLP (d/b/a Little Sioux Corn Processors, L.P.)
4808 F Avenue
Marcus, Iowa 50135
Attn: Steve Roe
If to the BANK: First National Bank of Omaha
1620 Dodge St. STOP 1050
Omaha, NE 68197-1050
Attention: Omer Sagheer
or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices, requests, demands and other communications shall, when mailed, be effective when deposited in the mails, addressed as aforesaid, except that notices or requests to the BANK pursuant to any of the provisions hereunder shall not be effective until received by the BANK.
6. At CLOSING, and prior to any advance of principal of the EXPANSION LOAN, BORROWER shall deliver to BANK, in form reasonably acceptable to BANK, the following:
A. TERM NOTE 5
B. The ASSIGNMENT OF EXPANSION CONTRACT duly executed by the BORROWER and consented to by the GENERAL CONTRACTOR and a copy of the EXPANSION CONTRACT, together with the General Conditions of Contract referred to therein.
C. The PLANS for the EXPANSION PROJECT certified by ICM, Inc. and the BORROWER.
D.
