SECOND AMENDMENT TO CONSTRUCTION AND TERM LOAN AGREEMENT
Exhibit
10.4
SECOND AMENDMENT
TO
CONSTRUCTION AND TERM LOAN
AGREEMENT
THIS AMENDMENT TO CONSTRUCTION AND TERM LOAN
AGREEMENT (“Second Amendment”) dated as of the 30th day of December,
2008 (the “Effective Date”), is entered into by and between SHOW ME ETHANOL, LLC, a
Missouri limited liability company (the “Borrower”) and FCS FINANCIAL, PCA, as agent
(the “Agent”)
for itself and on behalf of the other Banks.
WITNESSETH:
WHEREAS, that as of March 1, 2007, the
parties hereto, along with the Banks, entered into that certain Construction and
Term Loan Agreement (the “Loan Agreement”), wherein, among other things, Agent
provided funds to Borrower in connection with the construction of the Project;
and
WHEREAS, that as of June 2, 2008, the
parties hereto entered into that certain First Amendment to Construction and
Term Loan Agreement (the “First Amendment”) wherein among other things the Agent
and the Banks agreed to allow Borrower to raise additional funds to complete the
Project; and
WHEREAS, Borrower and Agent hereby
desire to further amend the Loan Agreement as hereinafter set
forth;
NOW,
THEREFORE, in consideration of the foregoing and of the terms and conditions
contained in this Amendment, and of any loans or extensions of credit or other
financial accommodations at any time made to or for the benefit of Borrower by
the Banks, the Borrower, the Banks and Agent agree as follows:
1. Certain Defined
Terms. The parties hereto acknowledge and agree that the
following items of Section 1.01 “Certain
Defined Terms” shall be deleted in their entirety and amended as
follows:
“Equity Drive” shall
mean Borrower’s Capital Call of its Members or request for voluntary equity
contributions where in the Borrower desires to generate additional
$10,000,000.00 in equity.
“Existing 2008
Contracts” shall mean those 2008 corn purchase order contracts entered
into by Borrower and Xxx-Xxxxxxx as set forth on Exhibit 6.3 attached
hereto.
“Forbearance Period”
shall mean the September 30, 2008 through February 2, 2009.
“LIBOR Margin” shall
mean with respect to such portions of the Loan which are Revolving LIBOR Rate
Loans, 3.5% (350 Basis Points).
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“Xxx-Xxxxxxx Equity”
shall mean Xxx-Xxxxxxx’x additional investment, in a form reasonably acceptable
to Agent and participating Banks, to allow Borrower to fulfill its obligations
under the Existing 2008 Contracts.
“Revolving Loan
Commitment” shall mean $5,000,000.00, as such amount may be reduced or
terminated from time to time pursuant to Section 4.4 or
11.1.”
2. Term
Loan. The parties hereto acknowledge and agree that Sections 2.03(b) and
(c) of the Loan Agreement shall be deleted in their entirety and replaced with
the following:
“(b) Term
Loan. The Term Loan shall be a Term LIBOR Rate Loan, and the
Borrower shall notify the Agent no later than 12:00 p.m. (noon) (St. Louis,
Missouri time) on a Business Day which is at least three (3) Business Days of
any changes in the Interest Period of the Term LIBOR Rate Loans then
outstanding. For each Term LIBOR Rate Loan, the Borrower shall
specify the Interest Period therefore; provided, however, should Borrower fail
to designate the Interest Period for any Term LIBOR Rate Loan, that Term LIBOR
Rate Loan shall be deemed a three (3) month Term LIBOR Rate
Loan. Each Term LIBOR Rate Loan shall be in an amount equal to
$1,000,000.00 or incremental multiples of $1,000,000.00. Each Bank
shall extend to the Borrower each Type of Loan selected by the Borrower, in an
amount equal to its Pro Rata Share of the Loan; provided, however, that except
as hereinafter specifically provided in this Section 2.03(b), at
no time shall the Outstanding Credit applicable to a Bank exceed such Bank’s
Commitment as set forth in Schedule 2.01(a).
(c) Payment
of Term Loan. The amortization period for the repayment of the
Term Loan shall be a period of ten (10) years commencing as of the Conversion
Date. Interest on Term LIBOR Rate Loans will be payable in arrears on
a monthly basis. Quarterly installments of principal in an amount
sufficient to fully amortize the Term Loan over said amortization period in
substantially equal payments will be required beginning on the first day of the
fourth month following the Conversion Date, and continuing on the first day of
each and every third calendar month thereafter until the Term Maturity Date, at
which time the outstanding principal balance of the Term Loan, and all accrued
and unpaid interest will be due and payable in full. During the term
of the Term Loan, the Borrower may, upon prior written notice to the Agent,
defer up to two (2) quarterly principal payments to the Term Maturity
Date.”
3. Additional Reporting
Requirements. The parties acknowledge and agree that a new
Subsections 5.01(c)(xiii)-(xv) shall be inserted in Section 5.01(c) and
read as follows:
“(xiii) on
a weekly basis, and promptly following any request, Borrower’s current cash
forecast in a form reasonably acceptable to Agent.
(xiv) as
soon as available, but in any event within ten (10) days following the
completion of each calendar month, Borrower shall provide Agent with a detailed
report of Borrower’s hedging positions.
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(xv) prior
to the end of the Forbearance Period, detailed financial projections for
completion of Borrower’s obligations under Existing 2008 Contracts and promptly
following any material revisions to the Borrower’s financial
projections.”
4. Additional Affirmative
Covenants. The Parties hereto acknowledge and agree that a new
Section 5.01(r) “Equity
Drive” shall be added to the Agreement and shall read as follows:
“(r) Equity
Drive. Borrower shall promptly notify Lender if Borrower has
any reason to anticipate that the Equity Drive shall fail to obtain the minimum
member approval required to successfully complete the Capital Call or receive
voluntary capital contributions of a minimum of $8,000,000.”
5. Xxx Xxxxxxx/Existing 2008
Contacts. The Parties hereto acknowledge and agree that a new Section 6.01(t) shall be
added to the Agreement and shall read as follows:
“(t) Failure
of Borrower to receive within forty-five (45) days following the completion of
the Equity Drive, an additional investment, in a form reasonably acceptable to
Agent and participating Banks, from Xxx-Xxxxxxx, or other party, to provide
additional Subordinated Debt or additional equity to allow Borrower to fulfill
its obligations under the Existing 2008 Contracts (the “Xxx-Xxxxxxx
Equity”).”
6. Release/Lender
Liability. The Parties hereto acknowledge and agree that a new
Section 8.18 “No Existing
Default; Waiver and Release by Borrower” shall be added to the agreement, and
shall read as follows:
“8.18 NO EXISTING DEFAULT; WAIVER
AND RELEASE BY BORROWER. FOR AND IN CONSIDERATION OF THE
EXECUTION AND DELIVERY BY LENDER OF THIS AGREEMENT, BORROWER HEREBY RELEASES AND
DISCHARGES LENDER, ITS PAST, PRESENT AND FUTURE AFFILIATES, DIRECTORS, OFFICERS,
PRINCIPALS, SHAREHOLDERS, EMPLOYEES, TRANSFEREES, ATTORNEYS AND AGENTS FROM ANY
AND ALL CLAIMS, LIABILITIES, OBLIGATIONS, RIGHTS OR CAUSES OF ACTION OF ANY KIND
AND NATURE IN LAW OR IN EQUITY BASED UPON ANY ACT, EVENT OR RELATIONSHIP
OCCURRING OR EXISTING AT ANY TIME IN THE PAST, UP TO AND THROUGH THE DATE ON
WHICH THIS AGREEMENT IS EXECUTED, INCLUDING, WITHOUT LIMITATION, ALL CAUSES OF
ACTION IN LAW OR IN EQUITY FOR BREACH OF CONTRACT, LENDER LIABILITY, FAILURE TO
ADVANCE FUNDS, REFUSAL TO LOAN MONEY, NEGLIGENCE, MISREPRESENTATION, FRAUD,
VIOLATION OF THE DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACT, USURY,
INTENTIONAL INTERFERENCE WITH CONTRACTUAL OR BUSINESS RELATIONSHIPS, ANTITRUST
VIOLATIONS, UNFAIR TRADE PRACTICES, DAMAGES, INFLICTION OF EMOTIONAL DISTRESS OR
MENTAL ANGUISH, ACTUAL DAMAGES, EXEMPLARY DAMAGES, CONSEQUENTIAL DAMAGES, AND
ALL CLAIMS, LIABILITIES, OBLIGATIONS, RIGHTS OR CAUSES OF ACTION BASED UPON THE
EXISTING LOANS AND THE PARTIES’ PAST DEALINGS AND RELATIONSHIPS INCLUDING, BUT
NOT LIMITED TO, ANY WRITTEN OR ORAL AGREEMENTS OF ANY KIND OR NATURE ENTERED
INTO OR ALLEGED TO HAVE BEEN ENTERED INTO PRIOR TO THE DATE OF THIS
AGREEMENT. ADDITIONALLY, BORROWER FURTHER HEREBY WAIVES ANY AND ALL
DEFENSES, OFFSETS AND COUNTERCLAIMS TO LENDER’S ENFORCEMENT OF THE LOAN
DOCUMENTS OR ANY ACTION BY LENDER TO FORECLOSE THE SECURITY INTEREST, WHETHER
SECURED BY REAL OR PERSONAL PROPERTY AND COVENANTS AND AGREES THAT NO RIGHT IS
RESERVED BY THE BORROWER TO MAKE ANY CLAIM AGAINST THE LENDER, OR ITS PAST,
PRESENT AND FUTURE AFFILIATES, DIRECTORS, OFFICERS, PRINCIPALS, SHAREHOLDERS,
EMPLOYEES, TRANSFEREES, ATTORNEYS AND AGENTS, ARISING FROM THE MATTERS ABOVE
REFERENCED.
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BORROWER HEREBY EXPRESSLY AGREES THAT
THE TERMS OF THIS SECTION 8.18 EXTEND TO CLAIMS WHICH BORROWER DOES NOT KNOW OR
SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THIS AGREEMENT, WHICH IF
KNOWN BY ANY OF THEM WOULD MATERIALLY AFFECT ITS DECISION TO EXECUTE THIS
AGREEMENT, AND EXPRESSLY WAIVE THE APPLICATION OF ANY LAW OR DECISION WHICH
WOULD EXCLUDE PARTICULAR CLAIMS FROM THE APPLICATION OF THIS SECTION 8.18 IF
BORROWER HAD BEEN AWARE OF ANY SUCH CLAIMS AT THE TIME OF THE EXECUTION OF THIS
AGREEMENT.
BORROWER
SPECIFICALLY FURTHER ACKNOWLEDGES THAT IT SOUGHT AND RECEIVED OR HAD THE
OPPORTUNITY TO SEEK AND RECEIVE LEGAL COUNSEL CONCERNING THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, THIS SECTION 8.18 AND THIS AGREEMENT, IS ENTERED
INTO SOLELY IN RELIANCE UPON BORROWER’S OWN KNOWLEDGE, BELIEF AND JUDGMENT AND
NOT UPON ANY REPRESENTATION MADE BY THE LENDER OR ITS PAST, PRESENT AND FUTURE
AFFILIATES, DIRECTORS, OFFICERS, PRINCIPALS, SHAREHOLDERS, EMPLOYEES,
TRANSFEREES, ATTORNEYS AND AGENTS.”
7. Forbearance Period/Financial
Covenants. The Parties hereto acknowledge and agree that
during the Forbearance Period and for all financial statements and related data
provided to Agent for periods during the Forbearance Period, Borrower shall be
required to maintain a Net Worth of not less than $15,000,000.00 and shall
maintain a minimum equity to total assets percentage of not less than Twenty
percent (20%), each to be measured on a monthly basis at the end of each
month. Additionally, the Parties acknowledge that Borrower’s minimum
equity ratio for November, 2008 was 19.4% and Agent further acknowledges the
ratio as acceptable on a one-time basis.
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8. Compliance
Certificate. The Parties hereto acknowledge and agree that the
Compliance Certificate attached hereto as Exhibit B shall replace the
Compliance Certificate attached to the Loan Agreement as Exhibit B.
9. Conditions Precedent to this
Second Amendment. The Parties hereto acknowledge and agree
that following shall be condition precedent to the execution and delivery of
this Amendment by Lender:
9.1 Current Statements of
Borrower’s Cash Flow. Borrower shall have delivered to Lender,
Borrower’s current cash forecast.
9.2 Current Hedging Report;
Hedging Policy. Borrower shall have delivered to Lender,
Borrower’s current report on its hedging positions and a copy of Borrower’s
hedging policy, if any; each of which shall be acceptable to Lender, in its sole
discretion.
10. Amendment
Fee. Upon execution of this Amendment, Borrower shall pay to
Lender an amendment fee equal to ten (10) basis points on the total Term Loan
Commitment.
11. Treatment of the
Subordinated
Debt/Xxx-Xxxxxxx
Equity. The Agent hereby acknowledges and agrees that
Subordinated Debt, in the form of the Member Loan and the Xxx-Xxxxxxx Equity,
for purposes of the Borrower’s Net Worth financial covenant and Borrowing Base
calculation, shall be included as “equity” and not as “debt”.
12. Acknowledgement of Change in
Control. By execution of this Second Amendment, Lender hereby
acknowledges the appointment of Xxxxxx Alt as General Manager and Chief
Restructuring Officer of the Borrower, and consents to such
appointment.
13. Multiple
Counterparts. This Amendment may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
14. Reaffirmation of Previous
Terms and Conditions. All of the remaining terms and
conditions of the Agreement, as amended, where not inconsistent with the above,
shall remain the same and are hereby republished, reaffirmed and restated as of
the date hereof.
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective officers and duly authorized, as of the date first above
written.
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BORROWER:
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a
Missouri limited liability company
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By:
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Title:
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AGENT,
for itself and on behalf of the Banks:
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FCS
FINANCIAL, PCA
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By:
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Title:
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6
EXHIBIT
B
Compliance
Certificate
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TO:
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FCS
Financial, PCA (the “Agent”)
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Pursuant
to that certain Construction and Term Loan Agreement dated _________, 2007, by
and between Show Me Ethanol,
LLC, a Missouri limited liability company (the “Borrower”), the Agent,
and the Banks identified therein, and any amendments thereto and extensions
thereof (the “Loan Agreement”), the undersigned hereby represents, warrants and
certifies to the Agent and the Banks as follows:
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1.
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The
financial statement(s) attached hereto are complete and correct in all
material respects and fairly present the financial condition of the
Borrower as of the date of said financial statement(s) and the result of
its business operations for the period covered
thereby;
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2.
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Repeats
and reaffirms to the Agent each and all of the representations and
warranties made by the Borrower in the Loan Agreement and the agreements
referred to therein or related thereto, and represents and warrants to the
Agent that each and all of said warranties and representations are true
and correct as of the date hereof;
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3.
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No
Event of Default (as that term is defined in the Loan Agreement), and no
event which with the giving of notice or the passage of time or both
would constitute an Event of Default (except for those items addressed in
Section 7 of the Second Amendment), has occurred and is continuing as of
the date hereof;
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4.
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Borrower
has not purchased or entered into any corn purchase or ethanol contracts
in violation of Borrower’s Hedging
Policy.
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IN
WITNESS WHEREOF, the undersigned has signed and delivered this Certificate to
the Agent as of the ____ day of _________________, ____.
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BORROWER:
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a
Missouri limited liability company
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By:
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Title:
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EXHIBIT
6.3
Existing 2008
Contracts
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Purchase
Order Status
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December
4, 2008 12:20 PM
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Show
Me Ethanol, L. L. C.
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Page
1
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mikec
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Item:
No.: CORN
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Document
No.
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Buy-from
Vendor
No.
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Expected
Date
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Quantity
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Quantity
Received
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Outstanding
Quantity
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Direct Unit
Cost Excl. Tax
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Line Discount
Amount
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Inv. Discount
Amount
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Outstanding
Amount
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CORN
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Corn
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6388
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V03840 |
01/31/08
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100,000.00 | 100,000.00 | 6.99 | 699,000.00 | |||||||||||||||||||||
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6365
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V03840 |
11/30/08
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525,000.00 | 525,000.00 | 6.4575 | 3,390,187.50 | |||||||||||||||||||||
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6366
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V03840 |
11/30/08
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100,000.00 | 100,000.00 | 5.7975 | 579,750.00 | |||||||||||||||||||||
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6401
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V03840 |
11/30/08
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100,000.00 | 81,152.48 | 18,847.52 | 6.6975 | 126,231.27 | ||||||||||||||||||||
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6406
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V03840 |
11/30/08
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100,000.00 | 100,000.00 | 6.22 | 622,000.00 | |||||||||||||||||||||
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6407
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V03840 |
11/30/08
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100,000.00 | 100,000.00 | 6.27 | 627,000.00 | |||||||||||||||||||||
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6393
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V03840 |
12/30/08
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200,000.00 | 200,000.00 | 6.9475 | 1,389,500.00 | |||||||||||||||||||||
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6399
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V03840 |
12/30/08
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100,000.00 | 100,000.00 | 6.8475 | 684,750.00 | |||||||||||||||||||||
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6390
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V03840 |
12/31/08
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150,000.00 | 150,000.00 | 7.075 | 1,061,250.00 | |||||||||||||||||||||
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6391
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V03840 |
12/31/08
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200,000.00 | 200,000.00 | 7.03 | 1,406,000.00 | |||||||||||||||||||||
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6392
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V03840 |
12/31/08
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200,000.00 | 200,000.00 | 6.8975 | 1,379,500.00 | |||||||||||||||||||||
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6394
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V03840 |
12/31/08
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200,000.00 | 200,000.00 | 6.9975 | 1,399,500.00 | |||||||||||||||||||||
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6400
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V03840 |
12/31/08
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100,000.00 | 100,000.00 | 6.8975 | 689,750.00 | |||||||||||||||||||||
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6402
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V03840 |
12/31/08
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100,000.00 | 100,000.00 | 6.7475 | 674,750.00 | |||||||||||||||||||||
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6403
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V03840 |
12/31/08
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100,000.00 | 100,000.00 | 6.7975 | 679,750.00 | |||||||||||||||||||||
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6404
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V03840 |
12/31/08
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200,000.00 | 200,000.00 | 6.5375 | 1,307,500.00 | |||||||||||||||||||||
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6408
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V03840 |
12/31/08
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100,000.00 | 100,000.00 | 6.32 | 632,000.00 | |||||||||||||||||||||
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6389
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V03840 |
01/31/09
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150,000.00 | 150,000.00 | 7.025 | 1,053,750.00 | |||||||||||||||||||||
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ACC1
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V03840 |
02/20/09
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1,050,000.00 | 1,050,000.00 | 7.195 | 7,554,750.00 | |||||||||||||||||||||
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ACC2
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V03840 |
02/20/09
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1,005,000.00 | 1,005,000.00 | 6.99 | 7,024,950.00 | |||||||||||||||||||||
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6398
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V03840 |
05/31/09
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100,000.00 | 100,000.00 | 6.7975 | 679,750.00 | |||||||||||||||||||||
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CORN
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Item
Total
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4,980,000.00 | 81,152.48 | 4,898,847.52 |
0.00
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0.00
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33,661,618.77 | ||||||||||||||||||||
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Report
Total
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33,661,618.77 | ||||||||||||||||||||||||||
