AMENDMENT NO. 1 TO SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT (REVOLVING LOAN)
Exhibit 10.11
This Amendment No. 1 to Second Supplement to the Master Loan Agreement (Revolving Loan) (this
“Amendment”) is effective as of October 19, 2007, by and between US BIO ▇▇▇▇▇▇ CITY, LLC, an Iowa
limited liability company (“Borrower”) and AGSTAR FINANCIAL SERVICES, PCA (“Lender”).
RECITALS
A. Lender has extended various credit facilities to Borrower for the purposes of acquiring,
constructing, equipping, furnishing and operating an ethanol production facility in Buena Vista
County, Iowa, pursuant to that certain Master Loan Agreement dated as of November 15, 2005 (as
amended by that certain Amendment No.1 and Waiver to Master Loan Agreement dated as of July 31,
2006, and by that certain Amended and Restated Master Loan Agreement dated as of February 26, 2007)
(as amended, the “MLA”); First Supplement to the Master Loan Agreement (Construction Loan) dated as
of November 15, 2005 (as amended by that certain Amendment No.1 to Amended and Restated First
Supplement to Master Loan Agreement dated as of July 31, 2006, by that certain Amended and Restated
First Supplement to the Master Loan Agreement (Construction Loan) dated as of January 24, 2006, and
by that certain Second Amended and Restated First Supplement to the Amended and Restated Master
Loan Agreement (Construction Loan) dated as of February 26, 2007) (as amended, the “First
Supplement”); Second Supplement to the Master Loan Agreement (Revolving Loan) dated as of November
15, 2005 (the “Second Supplement”); Third Supplement to the Master Loan Agreement (Term Loan) dated
as of February 26, 2007 (the “Third Supplement”); and Fourth Supplement to the Master Loan
Agreement (Term Revolving Loan) dated as of February 26, 2007 (the “Fourth Supplement”). The MLA,
First Supplement, Second Supplement, Third Supplement and Fourth Supplement are referred to
collectively hereinafter as the “Loan Agreement”).
B. Borrower has requested Lender amend certain provisions of the Loan Agreement, and Lender
has agreed to such amendments upon the terms and conditions set forth herein.
C. Unless otherwise expressly defined herein, capitalized terms used herein shall have the
same meaning ascribed to them in the MLA.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto herby agree as follows:
1. Amendments to Second Supplement.
(a) Section 1 of the Second Supplement is hereby amended by adding, amending and restating the
following definitions:
“Borrowing Base” means, at any time, the lesser of: (i) Six Million Five
Hundred Thousand and No/100 Dollars ($6,500,000.00), or (ii) the sum of: (A)
seventy-five percent (75%) of the Borrower’s Eligible Accounts Receivable, plus (B)
seventy-five percent (75%) of the Borrower’s Eligible Inventory.
“Borrowing Base Certificate” means a certificate, substantially in the form
of Exhibit A attached hereto, properly completed and duly executed by an authorized
Senior Officer of the Borrower.
“Eligible Accounts Receivable” means all unpaid Accounts, net of any
credits, except that the following shall not in any event be deemed Eligible
Accounts Receivable:
(a) that portion of Accounts unpaid forty-five (45) days or more after the
invoice date;
(b) that portion of Accounts that is disputed or subject to a claim of
offset or a contra account;
(c) that portion of Accounts for which goods giving rise to such Account
have not yet been shipped or for which rendition of services have not yet
been performed, as applicable, by the Borrower to the customer;
(d) Accounts owed by any unit of government, whether foreign or domestic
(except Incentive Payments) unless, with respect to Accounts owed by the
government of the United States, the Federal Assignment of Claims Act of
1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), has
been complied with to the Lender’s reasonable satisfaction;
(e) Accounts owed by an account debtor located outside the United States
unless such Account is backed by a letter of credit or foreign credit
insurance reasonably acceptable to the Lender which is in the possession of
or has been assigned to the Lender;
(f) Accounts owed by an account debtor that is insolvent, the subject of
bankruptcy proceedings or has gone out of business;
(g) Accounts owed by a member, Guarantor, Affiliate, director, officer or
employee of the Borrower, other than accounts owed by Provista Renewable
Fuels Marketing, LLC, United Bio Energy Ingredients, LLC, or any Affiliated
Borrower;
(h) Accounts not subject to a duly perfected Lien in favor of the Lender or
which are subject to any Lien in favor of any Person other than the Lender,
other than Permitted Liens pursuant to Section 5.02(a)(iv) of the MLA
including any payment or performance bond;
(i) that portion of Accounts that has been restructured, extended, or
reduced other than in the ordinary course of business;
(j) that portion of Accounts that constitutes advertising, finance charges,
service charges or sales or excise taxes; and
(k) Accounts, or portions thereof, otherwise deemed ineligible by the
Lender, in its good faith discretion, exercised in its reasonable business
judgment with respect to which the Lender has provided at least two (2)
Business Days prior written notice to the Borrower.
In the event that an Account which was previously an Eligible Account
Receivable ceases to be an Eligible Account Receivable hereunder, the
Borrower shall exclude such Account from Eligible Accounts Receivable on,
and at the time of submission to the Lender of, the next Borrowing Base
Certificate.
“Eligible Inventory” means all Inventory held for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or which are raw
materials, work in process, or materials used or consumed in the Borrower’s
business, excluding all of the following Inventory:
(a) covered by documents of title, instruments, or chattel paper when these
documents, instruments and paper are not owned and held by the Borrower or
are subject to competing Liens;
(b) intended to be sold outside of the ordinary course of business;
(c) consigned, sold or leased to others or held on consignment or lease from
others or subject to a bailment;
(d) subject to a competing Lien, other than a Permitted Lien;
(e) paid for in advance with progress payments or any other sums to the
Borrower in anticipation of the sale and delivery of Inventory;
(f) that is obsolete or not salable in the ordinary course of business; and
(g) that the Lender, in its good faith discretion, disqualifies as Eligible
Inventory, exercised in its reasonable business judgment with respect to
which the Lender has provided at least two (2) Business Days prior written
notice to the Borrower.
In the event that Inventory which was previously Eligible Inventory ceases
to be Eligible Inventory hereunder, the Borrower shall exclude such
Inventory from Eligible Inventory on, and at the time of submission to the
Lender of, the next Borrowing Base Certificate.
“Incentive Payments” means any and all federal or state governmental
subsidies, payments, transfers or other benefits, whether now or hereafter
established, received, or scheduled to be received within thirty (30) days, by the
Borrower.
(b) Section 17 of the Second Supplement is hereby amended and restated in its entirety to read
as follows:
Reporting Requirements. In addition to the reporting requirements under
Section 5.01(c) in the MLA, beginning with the fourth month after the Completion
Date, Borrower will furnish to Lender as soon as available and in any event within
forty-five (45) days after the end of each month (or at such other times or with
such greater frequency as is reasonably requested by Lender), a duly completed
Borrowing Base Certificate, setting forth the Borrowing Base as of the last day of
such month, certified by the appropriate authorized Senior Officer;
(c) Exhibit A to the Second Supplement is hereby amended and restated in its entirety by the
attached “Exhibit A to Second Supplement – Borrowing Base Certificate”.
2. Conditions to Effectiveness of this Amendment. This Amendment shall become effective as
of the date hereof upon the satisfaction of the conditions precedent that Lender shall have
received, on or before the date hereof, executed counterparts of this Amendment, duly executed by
each of the parties hereto, and an executed Consent and Reaffirmation of Guaranty in the form
attached hereto as Exhibit B, duly executed by the Guarantor.
3. Representations and Warranties. Borrower hereby represents to Lender that, after giving
effect to this Amendment:
(a) All of the representations and warranties of Borrower contained in the MLA and in each
other Loan Document are true and correct in all material respects as though made on and as of the
date hereof.
(b) As the date hereof, except as otherwise specifically stated herein, no Event of Default
has occurred and is continuing.
4. Miscellaneous.
(a) Effect; Ratification. The amendments set forth herein are effective solely for
the purposes set forth herein and shall be limited precisely as written, and shall not be deemed to
(i)
be a consent to, or an acknowledgment of, any amendment, waiver or modification of any other term
or condition of the Loan Agreement or (ii) prejudice any right or remedy which Lender may now have
or may have in the future under or in connection with the Loan Agreement, as amended hereby, or any
other instrument or agreement referred to therein. Each reference in the Loan Agreement and in
other Loan Document to the “Second Supplement” shall mean the Second Supplement, as amended hereby.
(b) Loan Documents. This Amendment is a Loan Document executed pursuant to the MLA
and shall be construed, administered and applied in accordance with the terms and provisions
thereof.
(c) Counterparts. This Amendment may be executed in any number of counterparts, each
such counterpart constituting an original and all of which when taken together shall constitute one
and the same instrument.
(d) Severability. Any provision contained in this Amendment which is held to be
inoperative, unenforceable or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions of this Amendment
in that jurisdiction or the operation, enforceability or validity of such provision in any other
jurisdiction.
(e) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA.
(f) WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT TO WHICH IT IS A PARTY OR ANY INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.
{SIGNATURE PAGE FOLLOWS}
SIGNATURE PAGE TO
AMENDMENT NO. 1 TO
SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT
(REVOLVING LOAN)
SECOND SUPPLEMENT TO THE MASTER LOAN AGREEMENT
(REVOLVING LOAN)
BY AND BETWEEN
US BIO ▇▇▇▇▇▇ CITY, LLC
AND
AGSTAR FINANCIAL SERVICES, PCA
US BIO ▇▇▇▇▇▇ CITY, LLC
AND
AGSTAR FINANCIAL SERVICES, PCA
DATED: October 19, 2007
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their respective duly authorized officers as of the date first written above.
| BORROWER: | ||||
| US BIO ▇▇▇▇▇▇ CITY, LLC, | ||||
| an Iowa limited liability company | ||||
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
| Its: Treasurer | ||||
| LENDER: | ||||
| AGSTAR FINANCIAL SERVICES, PCA, | ||||
| a United States corporation | ||||
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
|
|||
| Its: Vice President | ||||
EXHIBIT A TO SECOND SUPPLEMENT
BORROWING BASE CERTIFICATE
Detailed Calculation
For Month Ending: ___,___
Date Delivered: ___, ___
Date Delivered: ___, ___
| 1 | All unpaid Accounts: |
||||||||||
(ethanol) |
$ | ||||||||||
(DGS) |
$ | ||||||||||
Other |
$ | ||||||||||
Other |
$ | ||||||||||
Total unpaid Accounts |
$ | ||||||||||
Deduct ineligible Accounts |
$ | ||||||||||
(46 days or more from invoice date or otherwise
excluded pursuant to the terms and conditions of
the Credit Agreement) |
|||||||||||
Total Eligible Accounts Receivable |
$ | ||||||||||
Multiply by Borrowing Base Factor |
75.00 | % | |||||||||
Total Eligible Accounts Receivable |
$ | $ | |||||||||
| 2 | All Corn, DGS and other byproducts Inventory: |
||||||||||
Ending Corn Inventory |
$ | ||||||||||
Ending DGS & other byproducts Inventory |
$ | ||||||||||
Total Corn, DGS & other byproducts Inventory
Multiply by Borrowing Base Factor |
75.00 | % | |||||||||
Total Corn, DGS and other byproducts Eligible
Inventory |
$ | $ | |||||||||
| 3 | All Ethanol and other Inventory (lower of cost or
market) |
||||||||||
Ending Ethanol Inventory |
$ | ||||||||||
Ending Inventory |
$ | ||||||||||
Other Inventory |
|||||||||||
Total Ethanol and Other Inventory |
$ | ||||||||||
Multiply by Borrowing Base Factor |
75.00 | % | |||||||||
Total Ethanol and other Eligible Inventory |
$ | $ | |||||||||
Total Eligible Inventory (Total from #2 and #3) |
$ | ||||||||||
| 4 | Total Borrowing Base (Total from #1, #2, & #3) |
$ | $ | ||||||||
| 5 | Outstanding Revolving Line of Credit Loan Balance
(including outstanding Revolving Letters of
Credit) (as of month end) |
$ | |||||||||
| 6 | Excess or Deficit (Line 4 minus Line 5) |
$ | $ |
| * | If a Deficit exists, remit amount unless remitted since end of month. |
Pursuant to and in accordance with the term and conditions of that certain Master Loan
Agreement dated as of November 15, 2005 (as amended by that certain Amendment No.1 and Waiver to
Master Loan Agreement dated as of July 31, 2006, and by that certain Amended and Restated Master
Loan Agreement dated as of February 26, 2007, and as further amended by that certain Amendment No.
1 to the Amended and Restated Master Loan Agreement dated October ___, 2007), the Borrower is
executing and delivering to the Lender this Borrowing Base Certificate accompanied by supporting
data (collectively, this “Certificate”). The undersigned hereby certifies that the information
set forth in this Certificate is true and correct as of the date hereof.
| US BIO ▇▇▇▇▇▇ CITY, LLC, | ||||||
| an Iowa limited liability company | ||||||
| By | ||||||
| Its | ||||||
EXHIBIT B
CONSENT AND REAFFIRMATION OF GUARANTY
CONSENT AND REAFFIRMATION OF GUARANTY
The undersigned, US BioEnergy Corporation, hereby:
(i) consents to the modifications set forth in: (a) that certain Amendment No. 1 to Amended
And Restated Master Loan Agreement effective as of October 19, 2007; (b) that certain Amendment No.
1 to Second Supplement to the Master Loan Agreement effective as of October 19, 2007; (c) that
certain Amendment No. 1 to Third Supplement to the Master Loan Agreement effective as of October
19, 2007; (d) that certain Allonge to the Term Note effective as of October 19, 2007; (e) that
certain Amendment No. 1 to Fourth Supplement to the Master Loan Agreement effective as of October
19, 2007; and (f) that certain Allonge to the Term Revolving Note effective as of October 19, 2007;
and
(ii) reaffirms the guaranty of the undersigned, as set forth in that certain Amended and
Restated Continuing Guaranty made as of February 26, 2007, by the undersigned for the benefit of
Lender, is and shall remain in full force and effect.
| US BIOENERGY CORPORATION | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||||
| Its: Treasurer | ||||||