CONSTRUCTION AND TERM LOAN AGREEMENT by and among SHOW ME ETHANOL, LLC and FCS FINANCIAL, PCA Administrative Agent and the Banks named herein dated as of MARCH 1, 2007
by
and
among
and
FCS
FINANCIAL, PCA
Administrative
Agent
and
the Banks named herein
dated
as
of
MARCH
1,
2007
ARTICLE
I. DEFINITIONS AND ACCOUNTING MATTERS
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1
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Section
1.01. Certain Defined Terms
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1
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Section
1.02. Accounting Matters
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13
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Section
1.03. Construction
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13
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ARTICLE
II. AMOUNTS AND TERMS OF THE TERM LOAN
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13
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Section
2.01. Construction Loan
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13
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Section
2.02. Disbursement of the Advances
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15
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Section
2.03. Conversion of Construction Loan Into Term Loan.
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18
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Section
2.04 Closing Fee
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21
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Section
2.05. Unused Commitment Fee
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21
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Section
2.06. Notes
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21
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Section
2.07. Pricing
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21
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Section
2.08. Prepayment of Term Loan
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23
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Section
2.09 Increased Costs
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23
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Section
2.10. Changes in Law Rendering Certain LIBOR Rate Loans
Unlawful
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24
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Section
2.11. Payments and Computations
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24
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Section
2.12. Maximum Amount Limitation
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26
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Section
2.13. Agent Records
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26
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Section
2.14. Loan Payments
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26
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Section
2.15. Compensation
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26
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Section
2.16 Purchase of Equity Interests in FCS Financial, PCA
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27
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ARTICLE
III. CONDITIONS PRECEDENT
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27
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Section
3.01. Conditions Precedent to Closing
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27
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Section
3.02. Conditions Precedent to Commencement of Construction
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32
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Section
3.03. Conditions Precedent to Funding
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34
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ARTICLE
IV. REPRESENTATIONS AND WARRANTIES
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35
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Section
4.01. Representations and Warranties of the Borrower
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35
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ARTICLE
V. COVENANTS OF THE BORROWER
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39
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Section
5.01. Affirmative Covenants
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39
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Section
5.02. Negative Covenants
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46
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ARTICLE
VI. EVENTS OF DEFAULT AND REMEDIES
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50
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Section
6.01. Events of Default
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50
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Section
6.02. Remedies
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52
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Section
6.03. Remedies Cumulative
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53
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ARTICLE
VII. THE AGENT
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54
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Section
7.01. Authorization and Action
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54
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Section
7.02. Duties and Obligations
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54
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Section
7.03. Agent and Affiliates
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55
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Section
7.04. Bank Credit Decision
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55
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Section
7.05. Indemnification
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55
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Section
7.06. Successor Agent
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55
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Section
7.07. Exchange of Information
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56
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Section
7.08. Benefit of the Banks Only
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56
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Section
7.09. Authorized Actions
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56
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ARTICLE
VIII. MISCELLANEOUS
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56
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Section
8.01. Amendments, etc.
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56
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Section
8.02. Notices, etc.
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57
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Section
8.03. No Waiver; Remedies
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58
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Section
8.04. Costs, Expenses and Taxes.
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58
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Section
8.05. Right of Set-Off
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58
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Section
8.06. Severability of Provisions
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59
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Section
8.07. Binding Effect; Successors and Assigns;
Participations
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59
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Section
8.08. Consent to Jurisdiction
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61
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Section
8.09. Governing Law
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62
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Section
8.10. Banks' Obligations Several, Not Joint
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62
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Section
8.11. Execution in Counterparts
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62
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Section
8.12 Attorneys’ Fees and Costs
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62
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Section
8.13 Indemnification
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62
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Section
8.14 Bond Financing Cooperation
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64
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Section
8.15. WAIVER OF JURY TRIAL
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64
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Section
8.16. Entire Agreement
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65
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Section
8.17. Survival
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65
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LIST
OF SCHEDULES AND EXHIBITS
Schedule
2.01(a)
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Commitments
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Schedule
3.01(c)
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Real
Property
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Schedule
4.01(a)
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Description
of Certain Transactions Related to the Borrower’s Membership
Units
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Schedule
4.01(f)
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Description
of Certain Threatened Actions, etc.
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Schedule
4.01(k)
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Office
Locations; Fictitious Names; Etc.
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Schedule
4.01(n)
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Intellectual
Property
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Schedule
4.01(p)
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Exceptions
to Environmental Compliance
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Schedule
5.02(a)
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Description
of Certain Liens, Lease Obligations, etc.
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Exhibit
A
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Borrower’s
Equity
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Exhibit
B
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Compliance
Certificate
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Exhibit
C
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Sworn
Construction Statement
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Exhibit
D
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Form
of Construction Promissory Note
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Exhibit
E
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Form
of Term Promissory Note
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CONSTRUCTION
AND
TERM
LOAN AGREEMENT
THIS
CONSTRUCTION AND TERM LOAN AGREEMENT
dated as
of March 1, 2007, is entered into by and among SHOW
ME ETHANOL, LLC, a
Missouri limited liability company (the “Borrower”)
and
FCS
FINANCIAL, PCA (“FCS”)
and
the additional commercial, banking or financial institutions whose signatures
appear on the signature pages hereof or which hereafter become parties hereto
pursuant to Section 8.07
of this
Agreement (FCS and such other additional commercial, banking or financial
institutions are sometimes referred to hereinafter collectively as the
“Banks”
and
individually as a “Bank”),
and
FCS
FINANCIAL, PCA,
as agent
(the “Agent”)
for
itself and the other Banks. In consideration of the premises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
ARTICLE
I.
DEFINITIONS
AND ACCOUNTING MATTERS
Section
1.01. Certain
Defined Terms.
As used
in this Agreement, the following terms shall have the following meanings. Terms
not otherwise defined in this Agreement shall have the meanings attributed
to
such terms in the Uniform Commercial Code, as adopted in the State of Missouri
(the “State”)
and
amended from time to time (the “UCC”).
All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
“Accounts”
means all of the Borrower’s “Accounts”, as such term is defined in the
UCC, including, without limitation, the aggregate unpaid obligations
of
customers and other account debtors to Borrower arising out of the
sale or
lease of goods or rendition of services by Borrower on an open account
or
deferred payment basis.
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“Advances”
means
the loans made to Borrower under Section
2.01
of this
Agreement.
“Affiliate”
means, as to any Person, any other Person: (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10%) or more
of any
class of voting stock of such Person; or (c) ten percent (10%) or
more of the voting stock of which is directly or indirectly beneficially
owned or held by the Person in question. The term “control” means the
possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through
the
ownership of voting securities, by contract, or otherwise; provided,
however,
in no event shall the Agent, any Bank, Xxx-Xxxxxxx, or CMB be deemed
an
Affiliate of the Borrower or any of their
subsidiaries.
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“Agent”
means
FCS Financial, PCA, and its successors and assigns.
“Agent
Office”
means
the Agent’s address as set forth in Section
8.02,
or such
other address as the Agent may from time to time notify the Borrower and the
Banks.
1
“Agreement”
means
this Construction and Term Loan Agreement, as this Construction and Term Loan
Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Construction and Term Loan Agreement
from time to time.
“Applicable
Margin”
shall
mean (i) with respect to such portions of the Construction Loan or Term Loan
which are Base Rate Loans, the Base Margin, and (ii) with respect to such
portions of the Construction Loan or Term Loan which are LIBOR Rate Loans,
the
LIBOR Margin.
“Assignment
Fee”
means
a
fee payable to the Agent in the amount of Five Thousand Dollars ($
5,000.00).
“Banks”
means
the lenders identified on Schedule
2.01(a)
of this
Agreement, including FCS Financial, PCA.
“Base
Margin”
shall
mean (i) with respect to such portions of the Construction Loan which are
Construction Base Rate Loans, .50%, and (ii) with respect to such portions
of
the Term Loan which are Term Base Rate Loans, 0%.
“Base
Rate”
shall
mean the prime rate as reported on the 10th
day of
the calendar month by The
Wall Street Journal in
its
listing of money rates, defined therein as “the base rate on corporation loans
posted by at least 75% of the nation’s thirty largest banks.” If a prime rate is
not reported on the 10th
day of a
calendar month, the prime rate reported on the first Business Day preceding
the
10th
day of
the calendar month will be used. The Base Rate shall be determined monthly,
and
any adjustment shall be effective on the first day of the following calendar
month.
“Base
Rate Loan”
shall
mean a Construction Base Rate Loan or a Term Base Rate Loan.
“Borrower”
means
Show Me Ethanol, LLC, a Missouri limited liability company, together with its
permitted successors and assigns.
“Borrower’s
Equity”
means
all equity of the Borrower as contributed by its members and set forth on
Exhibit
A
attached
hereto.
“Business
Day”
means any day other than a Saturday, Sunday, or other day on which
commercial banks are authorized to close under the laws of, or are
in fact
closed in, the state where the Agent’s Office is located and, if such day
relates to any LIBOR Rate, means any such day on which dealings in
dollar
deposits are conducted by and between banks in the applicable offshore
dollar interbank market.
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“Capital
Expenditures”
means, for any period, the sum of all amounts that would, in accordance
with generally accepted accounting principles consistently applied,
be
included as additions to property, plant and equipment on a statement
of
cash flows for the Borrower during such period, with respect to:
(a) the
acquisition, construction, improvement, replacement or betterment
of land,
buildings, machinery, equipment or of any other fixed assets or
leaseholds; or (b) other capital expenditures and other uses recorded
as
capital expenditures having substantially the same
effect.
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2
“Capital
Lease”
means any lease of property which shall have been or should be, in
accordance with generally accepted accounting principles, recorded
as a
capital lease.
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“Closing
Date”
means
March 7, 2007.
“Closing
Fee”
shall
have the meaning as set forth in Section
2.04.
“CERCLA”
means
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
“Collateral”
means
and includes, without limitation, all property and assets granted as collateral
security for the Loans, whether real or personal property, whether granted
directly or indirectly, whether granted now or in the future, and whether
granted in the form of a security interest, mortgage, assignment of rents,
deed
of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or title
retention contract, lease or consignment intended as a security device, or
any
other security or lien interest whatsoever, whether created by law, contract
or
otherwise.
“Commencement
of Construction”
means
the date on which the digging of the foundation for the Project
begins.
“Commitment”
means the amount committed by each of the Banks as set forth in
Schedule
2.01.
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“Completion
Date”
means
the earlier of (a) the completion of the construction and equipping of the
Project, as evidenced by the issuance of all necessary certificates of occupancy
by Governmental Authorities and certification of completion by the Borrower
and
the Design/Builder, or (b) twenty (20) months from the Closing
Date.
“Compliance
Certificate”
means
a
certificate of the chief financial officer, or any other officer acceptable
to
the Agent, of the Borrower, in the form attached hereto as Exhibit B,
setting
forth the calculations of current financial covenants and stating: (a) the
Financial Statements are true and correct and have been prepared in accordance
with generally accepted accounting principles consistently applied; (b) whether
they have knowledge of the occurrence of any Event of Default under this
Agreement, and if so, stating in reasonable detail the facts with respect
thereto; and (c) that they reaffirm and ratify the representations and
warranties, as of the date of the certificate, contained in this
Agreement.
3
“Construction
Base Rate Loan”
shall
mean any part of the Construction Loan which bears interest at a rate determined
by reference to the Base Rate.
“Construction
Contracts”
means
any and all contracts, written or oral, between the Borrower and any Contractor,
and any subcontractor and between any of the foregoing, and any other person
or
entity relating in any way to the construction of the Project, including the
performing of labor or the furnishing of standard or specially fabricated
materials, machinery or equipment in connection therewith.
“Construction
Disbursing Agreement”
means
the Construction Disbursing Agreement, of even date herewith, executed by the
Disbursing Agent, the Borrower, and the Agent, as the same may be from time
to
time amended, modified, or supplemented.
“Construction
LIBOR Rate Loan”
shall
mean any portion of the Construction Loan which bears interest at a rate
determined by reference to the LIBOR Rate.
“Construction
Loan”
means
the loan from the Banks to the Borrower an amount not to exceed Forty-eight
Million Dollars ($48,000,000.00) pursuant to the terms and conditions provided
for in this Agreement.
“Construction
Period”
means
that period of time beginning on the Closing Date and ending on the Conversion
Date.
“Construction
Schedule”
means a monthly schedule of the anticipated progress on the Project
and
anticipated Completion Date for the Project, certified as accurate
in all
material respects by the Borrower and the
Design/Builder.
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“Consulting
Engineer”
means BKBM Engineers, Inc., a Minnesota corporation, and its successors
and permitted assigns.
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“Contractor”
means
any person or entity, including the Design/Builder, engaged to work on or to
furnish materials or supplies for the Project.
“Conversion
Date”
means
the date which is no later than sixty (60) days following the Completion
Date.
“County”
means
the Xxxxxxx County, Missouri.
“DGS”
means
wet and dried distillers grains, which, along with ethanol, will be produced
by
the Borrower.
“Debt”
means: (A) indebtedness for borrowed money or for the deferred
purchase price of property or services; (B) obligations as lessee
under Capital Leases; (C) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise)
to
purchase or otherwise acquire, or otherwise to assure a creditor
against
loss in respect of, indebtedness or obligations of others of the
kinds
referred to in clause (A) or (B) above or (E)
through (F) below; (D) liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA;
(E) indebtedness in respect of mandatory redemption or mandatory
dividend rights on equity interests but excluding dividends payable
solely
in additional equity interests; and (F) all obligations of a Person,
contingent or otherwise, for the payment of money under any non-compete,
consulting or similar agreement entered into with the seller of a
company
or its assets or any other similar arrangements providing for the
deferred
payment of the purchase price for an acquisition permitted hereby
or an
acquisition consummated prior to the date
hereof.
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4
“Debt
Service Coverage Ratio”
means the ratio of (i) Net Income net of Income Taxes plus amortization
and depreciation expense divided by (ii) the sum of Interest Expense
and
the scheduled principal payments on Long Term Debt (excluding any
payments
made pursuant to Section
2.03(d)
hereof), all as calculated based on the immediately preceding twelve-month
period which ended on the calculation
date.
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“Deed
of Trust”
means
that certain Deed of Trust and Security Agreement of even date herewith,
pursuant to which a mortgage interest shall be given by the Borrower to the
Agent in the Real Property to secure payment to the Agent of the Loan
Obligations.
“Default
Rate”
means
the lesser of: (i) the Maximum Rate (which shall mean the maximum
nonusurious interest rate, if any, at any time, or from time to time, that
may
be contracted for, taken, reserved, charged or received under applicable state
or federal laws); or (ii) the rate per annum which shall from day-to-day be
equal to two percent (2%) in excess of the then applicable rate of interest.
“Design/Builder”
means
ICM, Inc., a Kansas Corporation, and its successors and assigns.
“Disbursing
Agent”
means Chicago Title Insurance Company, with an office at 000 X.
00xx
Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx 00000, and its successors
and
assigns.
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“Disbursing
Account”
means
a
deposit account established by the Disbursing Agent for purposes of making
Advances under this Agreement pursuant to the terms of the Construction
Disbursing Agreement.
“Disbursement
Expiration Date”
shall
be the Conversion Date.
“Distributions”
has
the
meaning set forth in Section
5.02(b).
“Draw
Request”
means
a
request for an Advance, prior to the Disbursement Expiration Date, submitted
by
the Borrower to the Agent and the Disbursing Agent, in accordance with the
terms
and conditions of the Construction Disbursing Agreement.
“Dollars”
and “$”
shall
mean lawful currency of the United States of America.
5
“Environmental
Laws”
means all federal, state and local laws, ordinances, and regulations
relating to environmental, health, safety and land use matters applicable
to any property.
|
“EBITDA”
means for any period, the total of the following (each calculated
without
duplication) of the Borrower for such period: (i) Net Income from
operations according to generally accepted accounting principles;
plus
(ii) any provision for (or less any benefit from) Income Taxes
included in determining such Net Income; plus (iii) Interest Expense
deducted in determining such Net Income; and plus (iv) amortization
and depreciation expense deducted in determining such Net Income,
but
before Extraordinary Items.
|
“EPC
Contract”
shall have the meaning as specified in Section
3.01(o).
|
“ERISA”
means
the Employee Retirement Income Security Act of 1974.
“Events
of Default”
has
the
meaning specified in Section 6.01.
“Excess
Cash Flow”
means, with respect to a fiscal year of the Borrower, the amount
of cash
flow from operations that exceeds Net Income plus depreciation for
said
fiscal year less (Capital Expenditures, scheduled Term Loan principal
payments, and Distributions for said fiscal
year).
|
“Extraordinary
Items”
means items which are material and significantly different from the
Borrower’s typical business activities, determined in accordance with
generally accepted accounting principles, consistently
applied.
|
“Fixed
Rate”
shall mean a fixed rate of interest per annum, determined by Agent
as of
the Conversion Date, applicable to the Type of Term Fixed Rate Loan
requested by the Borrower as of the Conversion Date and permitted
under
this Agreement.
|
“Governmental
Authority”
means and includes any and all courts, boards, agencies, commissions,
offices, or authorities of any nature whatsoever for any governmental
unit
(federal, state, county, district, municipal, city, or otherwise)
whether
now or hereafter in existence.
|
“Hazardous
Substances”
shall
mean dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste,
materials or substances, as defined in or governed by the provisions of any
Environmental Laws.
“Income
Taxes”
means the applicable state, local or federal income tax liabilities
of the
Borrower on the Net Income of the
Borrower.
|
“Interest
Expense”
means for any period, the total interest expense of the
Borrower.
|
6
“Interest
Period”
means with respect to each LIBOR Rate Loan, the period commencing
on the
date such Loan is established or converted from a Base Rate Loan
or, with
respect to a conversion between LIBOR Rate Loans, the last day of
the next
preceding Interest Period with respect to such LIBOR Rate Loan, and
ending
on the numerically corresponding day in the first, third or sixth
calendar
month thereafter, as the Borrower may select as provided in Section
2.03(b),
except that each such Interest Period which commences on the last
Business
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall
end
on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the
next
succeeding Business Day or if such succeeding Business Day falls
into the
next succeeding calendar month, on the next preceding Business Day;
and
(b) any Interest Period which would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; (c) no more than four
(4)
Interest Periods shall be in effect at the same time; and (d) no
Interest
Period or any LIBOR Rate Loan shall have the duration other than
one (1)
month, three (3) months or six (6) months and, if the Interest Period
would otherwise be a shorter period, the related LIBOR Rate Loan
shall not
be available hereunder.
|
“Inventory”
shall mean any and all goods which shall at any time constitute
“inventory” (as defined in the UCC) of the Borrower, wherever located
(including without limitation, goods in transit) or which from time
to
time are held for sale, lease or consumption, furnished under any
contract
of service or held as raw materials, work in process, finished inventory
or supplies (including, without limitation, packaging and/or shipping
materials).
|
“IRC”
shall mean the Internal Revenue Code of 1986, as amended, as in effect
at
any time, together with all regulations, rulings and interpretations
thereof or thereunder issued by the Internal Revenue
Service.
|
“Laws”
has the meaning set forth in Section
5.01(a).
|
“LIBOR
Margin”
shall
mean (i) with respect to such portions of the Construction Loan which are
Construction LIBOR Rate Loans, 3.00% and, (ii) with respect to such portions
of
the Term Loan which are Term LIBOR Rate Loans, 2.50%.
“LIBOR
Rate”
(London
Interbank Offered Rate) shall mean the London interbank offered rate per annum
for one, three or six month deposits (as applicable) in United States dollars,
as determined by the British Banker’s Association average of interbank offered
rates for United States dollar deposits in the London market based on quotations
at sixteen (16) major banks, as published in the “Money Rates” Section of
The
Wall Street Journal
as of
the applicable determination date; provided,
if
Lender determines that the foregoing source is unavailable for the applicable
Interest Period, Lender shall determine LIBOR based on a new index which is
based on comparable information.
7
“LIBOR
Rate Loan”
shall
mean a Construction LIBOR Rate Loan or a Term LIBOR Rate Loan.
“Loan/Loans”
means the loans extended to the Borrower by the Agent and the Banks
pursuant to this Agreement, whether (i) with respect to the Construction
Loan, Construction Base Rate Loans or Construction LIBOR Rate Loans,
(ii)
with respect to the Term Loan, Term Base Rate Loans, Term LIBOR Rate
Loans, or Term Fixed Rate Loans, and (iii) with respect to Term Fixed
Rate
Loans, Term Fixed Rate Non-Prepayment Penalty Loans or Term Fixed
Rate
Prepayment Penalty Loans.
|
“Loan
and Carrying Charges”
means
all commitment fees to the Agent or the Banks, brokerage fees, standby fees,
interest charges, service fees, attorneys’ fees, contractors’ fees, developers’
fees, funding fees, title insurance fees and charges, recording fees,
registration taxes, real estate taxes, special assessments, insurance premiums,
utility charges incurred by the Borrower in the construction of the Project
and
issuance of the Notes, all costs incurred in acquisition of the Real Property
and any other costs incurred in the development of the Project.
“Loan
Documents”
means this Agreement, the Note, the Security Agreement, the Deed
of Trust,
and all other agreements, documents, instruments, and certificates
of the
Borrower delivered to, or in favor of, the Agent or the Banks under
this
Agreement or in connection herewith or therewith, including, without
limitation, all agreements, documents, instruments, certificates
and
delivered in connection with the extension of Advances by the
Agent.
|
“Loan
Obligations”
means all obligations, indebtedness, and liabilities of the Borrower
to
the Agent or the Banks arising pursuant to any of the Loan Documents,
whether now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated,
joint,
several, or joint and several, including, without limitation, the
obligation of the Borrower to repay the Advances, interest on the
Advances, and all fees, costs, and expenses (including attorneys'
fees and
expenses) provided for in the Loan
Documents.
|
“Long
Term Debt”
means
Debt that matures more than one (1) year after the date of determination
thereof.
“Maintenance
Capital Expenditures”
means all Capital Expenditures paid in the ordinary course of business
to
maintain existing business operations of the Borrower in any fiscal
year,
determined in accordance with generally accepted accounting principles,
consistently applied.
|
“Material
Adverse Effect”
means any set of circumstances or events which: (i) has or could
reasonably be expected to have any material adverse effect upon the
validity or enforceability of any Loan Documents or any material
term or
condition contained therein; (ii) is or could reasonably be expected
to be
material and adverse to the condition (financial or otherwise), business
assets, operations, or property of the Borrower; or (iii) materially
impairs or could reasonably be expected to materially impair the
ability
of the Borrower to perform the obligations under the Loan
Documents.
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8
“Maximum
Rate”
means
the rate set forth in Section
2.07(a).
“Net
Income”
means
income from operations after all expenses, including salaries and bonuses
determined according to generally accepted accounting principles.
“Net
Worth”
means total assets less total liabilities, total assets and total
liabilities each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the preparation
of
the financial statements referred to in Section 5.01(c)
for the Borrower, excluding, however, from the determination of total
assets: (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents,
patent
applications, licenses and rights in any thereof, and other similar
intangibles; (ii) membership units held by the Borrower;
(iii) securities which are not readily marketable; (iv) cash
held in a sinking or other analogous fund established for the purpose
of
redemption, retirement or prepayment of membership units or Debt;
(v) any write-up in the book value of any asset resulting from a
revaluation thereof subsequent to the Closing Date; (vi) amortized
start-up costs; and (vii) any items not included in clauses (i)
through (vi) above which are treated as intangibles in conformity
with generally accepted accounting
principles.
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“Note/Notes”
means,
with respect to the Loans, those promissory notes of even date herewith executed
and delivered to the Agent and the Banks by the Borrower in the aggregate total
principal amount of Forty-eight Million Dollars ($48,000,000.00).
“Ordinary
Trade Payable Dispute”
means trade accounts payable, in an aggregate amount not in excess
of
$200,000 with respect to the Borrower, with respect to which:
(a) there exists a dispute between Borrower and the vendor;
(b) the Borrower is contesting the same in good faith by appropriate
proceedings; and (c) the Borrower has established appropriate
reserves on its financial
statements.
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“Outstanding
Credit”
means, at any time of determination, the aggregate amount of Advances
then outstanding.
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“Permitted
Liens”
shall have the meaning set forth in Section
5.02(a).
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“Person”
means any individual, corporation, business trust, association, company,
partnership, joint venture, governmental authority, or other
entity.
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“Personal
Property”
means all buildings, structures, equipment, fixtures, improvements,
building supplies and materials and personal property now or hereafter
attached to, located in, placed in or necessary to the use of the
improvements on the Real Property including, but without being limited
to,
all machinery, fixtures, equipment, furnishings, and appliances,
as well
as all renewals, replacements, additions, and substitutes thereof,
and all
products and proceeds thereof, and including without limitation all
Accounts, Inventory, instruments, chattel paper, other rights to
payment,
money, deposit accounts, contract rights, insurance proceeds and
general
intangibles of the Borrower, whether now owned or hereafter
acquired.
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9
“Plans
and Specifications”
means
the final plans and specifications for the construction of the Project, to
be
prepared by the Design/Builder, and all amendments and modifications thereof
approved by Agent.
“Project”
means
any and all buildings, structures, fixtures or other improvements made to the
Real Property as part of the construction of a 55mm gyps drymill ethanol plant
in Xxxxxxx County, Missouri, for which the Loan to Borrower is being made to
the
Borrower by the Agent and the Banks under the terms and subject to the
conditions of this Agreement.
“Project
Costs”
means
the total of all direct and indirect costs of acquiring the Real Property and
constructing and equipping the Project, together with all Loan and Carrying
Charges.
“Pro
Rata Share”
means,
with reference to any Bank at the time any determination thereof is to be made,
a fraction, expressed as a percentage, the numerator of which shall be an amount
equal to the sum of such Bank's Commitment then in effect and the denominator
of
which shall be an amount equal to the sum of the Commitments of all the Banks
then in effect.
“Xxx-Xxxxxxx”
means
Xxx-Xxxxxxx County Grain Growers, Inc., a Missouri corporation, and its
successors and assigns.
“Real
Property”
means
that real property located in the County of Xxxxxxx, State of Missouri, owned
by
the Borrower, upon which the Project is to be constructed and which is described
in Schedule
3.01(c).
“Related
Documents”
means
and includes without limitation all promissory notes, credit agreements, loan
agreements, guaranties, security agreements, mortgages, deeds of trust,
assignments and all other instruments, agreements and documents, whether now
or
hereafter existing, executed in connection with the Loans.
“Required
Banks”
means a Bank or Banks holding greater than sixty-six percent (66%)
of the
Outstanding Credit, or if no Advances are outstanding hereunder,
then a
Bank or Banks holding greater than sixty-six percent (66%) of the
Commitments.
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“Revolving
Credit Agreement”
means
that certain Revolving Credit Agreement to be entered into by and between
Borrower and the Revolving Credit Lender.
“Revolving
Credit Facility”
means
that certain loan from the Revolving Credit Lender to Borrower in the amount
to
be determined and made pursuant to that certain Revolving Credit
Agreement.
10
“Revolving
Credit Lender”
means
FCS Financial, PCA.
“XXXX”
means
the Superfund Amendment and Reauthorizations Act of 1986, as
amended.
“Security
Agreement”
means and includes, without limitation, any agreements, promises,
covenants, arrangements, understandings, or other agreements, whether
created by law, contract, or otherwise, which evidence, govern, represent,
or create a Security Interest, as the same has been and may hereafter
be
amended or otherwise modified.
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“Security
Interest”
means
and includes without limitation any type of collateral security, whether in
the
form of a lien, charge, mortgage, assignment of rents, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease
or consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or
otherwise.
“Servicing
Fee”
shall
have the meaning set forth in Section
7.10.
“Shortfall
Escrow Fund”
shall
have the meaning set forth in Section
2.02(d).
“Start-Up
Date”
means
that date that ethanol and DGS production of the Project begins after successful
completion of the seven-day performance test referenced in Section 4.01B3 of
the
EPC Contract.
“State”
means
the State of Missouri.
“Subordinated
Debt”
means
any and all Debt of Borrower held by any Person other than Agent, any Bank,
or
the Revolving Credit Lender pursuant to either this Agreement or the Revolving
Credit Agreement.
“Sworn
Construction Statement”
means
a
sworn construction statement, sworn to by the Borrower and the Design/Builder,
and of a form and substance acceptable to the Agent.
“Term
Base Rate Loan”
shall
mean any portion of the Term Loan which bears interest at a rate determined
by
reference to the Base Rate.
“Term
Fixed Rate Loan”
shall
mean any portion of the Term Loan which bears interest at a rate determined
by
reference to a Fixed Rate.
“Term
Fixed Rate Prepayment Penalty Loan”
shall
mean a Term Fixed Rate Loan which is subject to such prepayment and conversion
penalties and premiums effective as of or after the Conversion Date as
established by the Bank at the time of making the Term Fixed Rate Loan for
such
loans as offered by said Bank to other commercial borrowers similarly situated
and under similar circumstances.
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“Term
Fixed Rate Non-Prepayment Penalty Loan”
shall
mean a Term Fixed Rate Loan which is not subject to any prepayment or conversion
penalties or premiums; provided, however, the Term Fixed Rate Non-Prepayment
Penalty Loan cannot be prepaid within one (1) year following
conversion.
“Term
Fixed Rate Loan Prepayment Penalty Period”
shall
mean, with respect to a Term Fixed Rate Prepayment Penalty Loan, such period
of
time, commencing with the borrowing date of such Loan, during which such Loan
may not be prepaid and/or converted without a premium or penalty as established
by the Bank making the Term Fixed Rate Prepayment Penalty Loan for such loans
as
offered by such Bank to other commercial borrowers similarly situated and under
similar circumstances. With respect to a Term Fixed Rate Prepayment Penalty
Loan, the period during which such Loan may not be prepaid without premium
or
penalty may not be the same period during which said Loan may not be converted
without premium or penalty.
“Term
LIBOR Rate Loan”
shall
mean any portion of the Term Loan which bears interest at a rate determined
by
reference to the LIBOR Rate.
“Term
Loan”
means
the loan from the Agent to the Borrower in the amount and pursuant to the terms
and conditions provided for in Section
2.03.
“Term
Maturity Date”
means
one hundred twenty (120) months from the Conversion Date.
“Title
Insurance”
means
the Agent’s title insurance policy, in form and substance satisfactory to the
Agent and containing no exceptions (printed or otherwise) which are unacceptable
to Agent, issued by a title insurer acceptable to the Agent, in the face amount
of the Total Commitment, insuring that Agent has a first and prior lien on
the
Real Property and containing such endorsements as Agent may
require.
“Total
Commitment”
means
the sum of the Commitments as set forth in Schedule
2.01.
“Total
Debt”
means the unpaid principal balance of the
Loans.
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“Type”
shall mean (i) with respect to the Construction Loan, whether such
Loan is
a Construction Base Rate Loan or a Construction LIBOR Rate Loan,
(ii) with
respect to a Term Loan, whether such Loan is a Term Base Rate Loan,
a Term
LIBOR Rate Loan or a Term Fixed Rate Loan, and (iii) with respect
to Term
Fixed Rate Loan, whether such Loan is a Term Fixed Rate Non-Prepayment
Penalty Loan or a Term Fixed Rate Prepayment Penalty
Loan.
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“Unused
Commitment Fee”
has
the
meaning specified in Section
2.05.
“Working
Capital”
means
current assets of the Borrower less current liabilities of the
Borrower.
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Section
1.02. Accounting
Matters.
All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistently applied,
except as otherwise stated herein. To enable the ready and consistent
determination of compliance by the Borrower with its obligations under this
Agreement, the Borrower will not change the last day of its fiscal year or
the
last days of the first three fiscal quarters of its fiscal years.
Section
1.03. Construction.
Wherever herein the singular number is used, the same shall include the plural
where appropriate, and words of any gender shall include each other gender
where
appropriate. The headings, captions or arrangements used in any of the Loan
Documents are, unless specified otherwise, for convenience only and shall not
be
deemed to limit, amplify or modify the terms of the Loan Documents, nor affect
the meaning thereof.
ARTICLE
II.
AMOUNTS
AND TERMS OF THE CONSTRUCTION LOAN AND THE TERM LOAN
Section
2.01. Construction
Loan
(a) Construction
Loan.
Subject
to the terms and conditions of this Agreement and in reliance upon the
representations and warranties set forth in this Agreement, the Agent and the
Banks agree to lend to Borrower and Borrower agrees to borrow from Agent and
the
Banks a construction loan (the “Construction
Loan”)
in the
aggregate amount of Forty-eight Million Dollars ($48,000,000.00). Said amount
shall be loaned pursuant to the terms and conditions set forth in this
Agreement. Subject to this Section and Section
2.07
hereof,
Loans extended with respect to the Construction Loan shall be comprised of
Construction Base Rate Loans and/or Construction LIBOR Rate Loans, as selected
by the Borrower.
(b) Advances.
The
Construction Loan may be funded by Advances on the Note made prior to the
Disbursement Expiration Date to be used for the construction of the Project,
on
a request for advance from the Borrower (the “Draw
Request”).
No
Advances shall be made by the Agent subsequent to the Disbursement Expiration
Date. Each Bank agrees, severally and not jointly, in accordance with their
Pro
Rate Shares and on the terms and conditions hereinafter set forth, to extend
credit to the Borrower from time to time during the Construction Period by
making Advances to the Borrower provided,
however,
that at
no time shall the Outstanding Credit applicable to a Bank exceed such
Bank's Commitment as set forth in Schedule
2.01(a).
In the
case all or any portion of the Advance is to be a Construction LIBOR Rate Loan,
the Draw Request by the Borrower must be made on a Business Day which is at
least three (3) Business Days prior to the date of such Advance. In the case
all
or any portion of the Advance is to be a Construction Base Rate Loan, the Draw
Request shall be on the date of such Advance. In either case, the Draw Request
must specify the amount of the Advance, the Type of Loan to be applicable to
such Advance and if a Construction LIBOR Rate Loan is selected, the Interest
Period therefore. An Interest Period for a Construction LIBOR Rate Loan may
not
extend beyond the Conversion Date. No Construction LIBOR Rate Loan shall be
established while an Event of Default exists or if the interest rate for such
Construction LIBOR Rate Loan would exceed the Maximum Rate. Each Construction
LIBOR Rate Loan shall be in an amount equal to $1,000,000.00 or incremental
multiples of $1,000,000.00. No more than four (4) Construction LIBOR Rate Loans
may be outstanding at any time. A Construction Loan shall be considered a
Construction Base Rate Loan unless the Borrower notifies the Agent that the
Loan
is to be a Construction LIBOR Rate Loan. Any Draw Request received after 12:00
p.m. (noon) (St. Louis, Missouri time) shall be deemed to have been received
and
be effective on the next Business Day. The Agent will notify each Bank by 12:00
p.m. (noon) (St. Louis, Missouri time) on the effective date of receipt of
the
Draw Request of the aggregate principal amount of the requested and approved
Advance. Upon the giving of any notice by the Agent, each such Bank shall make
available to the Agent, in immediately available funds, an amount equal to
its
Pro Rata Share of the aggregate principal amount of the Advance subject to
such
notice by not later than 12:00 p.m. (noon) (St. Louis, Missouri time) on
the next Business Day, whether or not the conditions to an Advance under
Article III are satisfied.
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(c) Payment
of Construction Loan.
Prior
to the Conversion Date, accrued interest on the Construction Loan shall be
payable in monthly installments on the first day of the month following the
date
of the first advance on the Construction Loan and continuing on the first day
of
every month thereafter until the Construction Loan, or some portion thereof,
is
converted to the Term Loan; provided, however, if any part of the Construction
Loan outstanding at anytime is a LIBOR rate loan, then the interest accrued
shall be paid as set forth in Section
2.07(c).
If not
sooner converted to the Term Loan, and to the extent not so converted, the
outstanding principal balance and all accrued interest due on the Construction
Loan will be due and payable in full on the Conversion Date. During the term
of
the Construction Loan, the parties acknowledge and agree that Borrower may
use
the proceeds from the Advances to cover interest due on the Construction Loan.
Additionally, the parties agree that in connection with each Draw Request,
Borrower shall set forth the amount of the Draw Request that should be allocated
to payment of interest on the Construction Loan and the amount of funds
allocated to the Project. Notwithstanding any other provision of this Agreement,
Advances to pay interest due on the Construction Loan shall not be made to
the
Disbursing Agent but shall instead be made to the Agent who shall disburse
such
funds to each Bank in payment of accrued interest payable to such
Bank.
(d) Construction
Loan Term.
The
Construction Loan term shall run for a period beginning on the date of this
Agreement and ending on the Conversion Date. On the Conversion Date, the
Construction Loan shall become fully due and payable, except for that part,
if
any, of the Construction Loan which is converted into a Term Loan pursuant
to
the terms of this Agreement.
(e) Collateral.
Subject
to the terms of Section
8.14
hereof,
as security for the payment and performance of all obligations of Borrower
to
Agent and to the Banks, with respect to the Construction Loan, including, but
not limited to, principal and interest under the Notes, fees, funding losses,
reimbursements, and all other Loan Obligations under any of the Loan Documents,
Borrower shall grant to, and maintain for, the Agent, for the benefit of the
Banks, a first lien and Security Interest, pursuant to the Deed of Trust and
the
other Security Agreements, in all Real Property and Personal Property of the
Borrower, now owned or hereafter acquired by Borrower.
14
Section
2.02. Disbursement
of the Advances.
(a) Disbursing
Account.
Disbursements of the Advances will be made by the Agent and the Disbursing
Agent
in the manner provided in the Construction Disbursing Agreement. Subject to
Section
2.02(b)
below,
all disbursements will be made by wire transferring such funds to the Disbursing
Account in the amount of each Draw Request which is approved pursuant to the
Construction Disbursing Agreement. All Loan funds will be considered to have
been advanced to and received by the Borrower upon, and interest on such funds
will be payable by the Borrower from and after, their deposit in the Disbursing
Account.
(b) Agent’s
Application of Loan Proceeds.
Notwithstanding the provisions of Section
2.02(a),
above,
the Agent may elect, upon ten (10) days’ notice to the Borrower, to use the Loan
funds to pay, as and when due, any fees owing to Agent, interest on the Loan,
release charges under prior mortgages on the Property, and legal fees and
disbursements of the Agent’s attorneys which are payable by the Borrower, unless
Borrower causes such amount(s) to be paid within said ten (10) days. Such
payments may be made, at the option of the Agent, by debiting or charging the
Loan funds in the amount of such payments.
(c) Cost
Information.
All
disbursements will be based upon a detailed breakdown of the Project Costs,
as
set forth in a Sworn Construction Statement, the form of which is attached
as
Exhibit
C
to this
Agreement. In the event that the Borrower becomes aware of any change in the
approved Project Costs, which would increase the total cost (including any
contingencies) in excess of One Million Dollars ($1,000,000.00) above the amount
shown on the attached Sworn Construction Statement, the Borrower shall
immediately notify the Agent in writing and promptly submit to the Agent for
its
approval a revised Sworn Construction Statement. No further disbursements need
be made by the Disbursing Agent unless and until the revised Sworn Construction
Statement is approved. The Agent reserves the right to approve or disapprove
any
revised Sworn Construction Statement in its reasonable discretion.
(d) Loan
in Balance, Deposit of Funds by Borrower.
The
Borrower shall keep the Construction Loan in balance as provided in this
Section. If the Agent at any time reasonably determines that the amount of
the
undisbursed Loan proceeds will not be sufficient to fully pay for all costs
required to complete the construction of the Project in accordance with the
approved Plans and Specifications and for all Project Costs to be incurred
by
the Borrower, whether such deficiency is attributable to changes in the work
of
construction or in the Plans and Specifications or to any other cause, the
Agent
may direct the Borrower to deposit with Disbursing Agent an amount equal to
the
amount of the shortage reasonably determined by the Agent (the “Shortfall
Escrow Fund”).
The
Borrower shall then deposit the required funds with the Agent within ten (10)
days after the date of the Agent’s written demand. Disbursement of funds from
the Shortfall Escrow Fund shall be in accordance with the terms of the
Construction Disbursing Agreement.
15
(e) Additional
Security.
The
Borrower irrevocably assigns to the Agent and the Banks and grants to the Agent
and the Banks a security interest in, as additional security for the performance
of the Borrower’s obligations under this Agreement and the Related Documents,
its interest in all funds held by the Disbursing Agent, whether or not
disbursed, all funds deposited by the Borrower with the Agent under this
Agreement, to the extent assignable, all governmental permits obtained for
the
lawful construction of the Project, and all reserves, deferred payments,
deposits, refunds, cost savings, and payments of any kind relating to the
construction of the Project. Upon any default of the Borrower, the Agent may
use
any of the foregoing for any purpose for which the Borrower could have used
them
under this Agreement or with respect to the construction or financing of the
Project. The Agent will also have all other rights and remedies as to any of
the
foregoing which are provided under applicable law or in equity and Borrower
shall execute any and all documents reasonably requested by Agent to evidence
this assignment.
(f) Conditions
Precedent to All Advances.
The
obligation of the Agent and the Banks to make each Advance under the Note,
shall
be subject to the terms, conditions and covenants set forth in this Agreement,
and the Construction Disbursing Agreement, including, without limitation, the
following further conditions precedent:
(i) Loan
in Balance.
The
Loan is in balance, as required by the provisions of Section
2.02(d),
above;
(ii) Use
of
Borrower’s Equity.
Borrower shall have fully disbursed, in the construction of the Project, or
placed in escrow with the Disbursing Agent, a portion of Borrower’s Equity in an
amount of not less than Fifteen Million Eight Hundred Thousand Dollars
($15,800,000.00);
(iii) Draw
Request.
The
Borrower has submitted to the Agent and the Disbursing Agent a Draw Request
for
each such Advance, which such Draw Request shall comply with the requirements
contained in this Agreement and the Construction Disbursing
Agreement;
(iv) Compliance
With Disbursing Agreement.
All of
the terms and conditions of the Construction Disbursing Agreement have been
satisfied with respect to each Advance;
(v) Government
Action.
No
license, permit, permission or authority necessary for the construction of
the
Project has been revoked or challenged by or before any Governmental
Authority;
16
(vi) Sworn
Construction Statement.
If
required by the Agent, the Borrower shall furnish to the Agent an updated Sworn
Construction Statement setting forth the services or materials with respect
to
specific portions of the construction of the Project and setting forth the
amounts actually incurred and paid, or to be incurred, in completing
construction of the Project. Such updated Sworn Construction Statement shall
be
sworn to by the Borrower and the Design/Builder to be a true, complete and
accurate account of all costs actually incurred and an accurate estimate of
all
costs to be incurred in the future; and
(vii) No
Defaults.
The
Borrower is not in default under the terms of this Agreement, the Construction
Disbursing Agreement, the Related Documents, the Revolving Credit Agreement
or
any other agreement to which the Borrower is a party and which relates to the
construction or operation of the Project, and that no such default will result
from the Advance.
Should
any provisions of this Section
2.02(f)
conflict
or be inconsistent with any terms or conditions of the Construction Disbursing
Agreement, the Construction Disbursing Agreement shall control.
(g) Suspension
of Construction.
If
the
Agent in reasonably good faith determines that any work or materials do not
materially conform to the approved Plans and Specifications or sound building
practice, or otherwise departs materially from any of the requirements of this
Agreement, the Agent may require the work to be stopped and withhold
disbursements until the matter is corrected. In such event, the Borrower will
promptly correct the work to the Agent’s satisfaction. No such action by the
Agent will affect the Borrower’s obligation to complete the
Project.
(h) Inspections.
The
Borrower and the Design/Builder shall be responsible for making inspections
of
the Project during the course of construction and shall determine to their
own
satisfaction that the work done or materials supplied by the Contractors to
whom
payment is to be made out of each Advance has been properly done or supplied
in
accordance with the applicable contracts with such Contractors. If any material
work done or materials supplied by a Contractor are not satisfactory to the
Borrower or the Design/Builder, the Borrower will immediately notify the Agent
in writing of such fact. It is expressly understood and agreed that the Agent
or
its authorized representative may conduct such inspections of the Project as
it
may deem necessary for the protection of the Agent’s interest, and,
specifically, the Consulting Engineer may, at the option of the Agent and at
the
expense of the Borrower, conduct such periodic inspections of the Project,
prepare such written progress reports during the period of construction, prepare
such written reports upon completion of the Project and sign such Draw Requests,
as the Agent may request. Any inspections which may be made of the Project
by
the Agent or its representative will be made, and all certificates issued by
the
Agent’s representative will be issued, solely for the benefit and protection of
the Agent and the Banks, and that Borrower will not rely thereon. The Agent
is
under no duty to supervise or inspect construction or examine any books and
records. Any inspection or examination by the Agent is for the sole purpose
of
protecting the Agent’s security and preserving the Agent’s rights under this
Agreement. No default of the Borrower will be waived by any inspection by the
Agent. In no event will any inspection by the Agent be a representation that
there has been or will be compliance with the Plans or Specifications or that
the construction is free from defective materials or workmanship.
17
(i) No
Waiver.
Any
waiver by the Agent of any condition of disbursement must be expressly made
in
writing. The making of a disbursement prior to fulfillment of one or more
conditions thereof shall not be construed as a waiver of such conditions, and
the Agent reserves the right to require their fulfillment prior to making any
subsequent disbursements.
Section
2.03. Conversion
of Construction Loan Into Term Loan.
Pursuant
to the terms and subject to the conditions of this Agreement, the Construction
Loan may be converted into the Term Loan on the Conversion Date. Subject to
this
Section and Section
2.07
hereof,
Loans extended with respect to the Term Loan shall be comprised of Term Base
Rate Loans, Term LIBOR Rate Loans, or Term Fixed Rate Loans, and Term Fixed
Rate
Loans may be further comprised of Term Fixed Rate Non-Prepayment Penalty Loans
and/or Term Fixed Rate Prepayment Penalty Loans, as selected by the
Borrower.
(a) Conditions
Precedent.
In
addition to the terms and conditions of disbursement set forth in this Agreement
and as incorporated from the Construction Disbursing Agreement, the Agent shall
not be obligated to convert any part of the Construction Loan into the Term
Loan
unless and until:
(i) No
Defaults.
The
Borrower shall have performed all of its obligations under this Agreement,
the
Construction Disbursing Agreement, and the Revolving Credit Agreement and there
shall be no uncured or unwaived defaults under this Agreement, the Construction
Disbursing Agreement, and the Revolving Credit Agreement on the Conversion
Date;
(ii) Appraisal.
The
Borrower shall have paid for and Agent shall have received an updated appraisal
of the Project upon its completion, certifying to the Agent the appraised market
value is equal to or greater than the Borrower’s Equity expended on the Project,
plus the principal amount of the Construction Loan. The appraiser shall be
selected by the Agent and the appraisal rendered by the appraiser shall conform
to the requirements of Title XI of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (FIRREA);
(iii) Amount
of Term Loan.
The
maximum amount of the Construction Loan which is converted to a Term Loan shall
be the full amount of the Construction Loan of $48,000,000.00; or that certain
amount then outstanding on the Construction Loan which may not at any time
exceed $48,000,000.00;
18
(iv) Construction
Loan Exceeds Maximum Amount.
In the
event that the amount of the Construction Loan advanced by Agent exceeds
$48,000,000.00 the Borrower shall immediately repay such excess;
(v) Certification
by Consulting Engineer.
The
Consulting Engineer shall have certified to the Agent and the Banks that the
Project has been completed in a good and workmanlike manner and in accordance
with the Plans and Specifications;
(vi) Survey.
The
Agent has received an “as-built” boundary survey of the Real Property prepared
at the Borrower’s expense, certified to the Agent by a licensed, registered
surveyor acceptable to the Agent and complying with the requirements of the
Title Company, which: (a) sets forth the location and exterior lines and egress
and other improvements completed on the Real Property and demonstrates
compliance with all applicable setback requirements; (b) demonstrates that
the
Project is entirely within the exterior boundaries of the Real Property and
any
building restriction lines and does not encroach upon any easements or
rights-of-way; and (c) contains such other information as the Agent may
reasonably request (“as-built”, as used in this paragraph, shall be deemed to
only require the depiction and location of the exterior overall footprint of
improvements (any grouping of improvements) located on the Real Property);
(vii) Title
Policy Endorsement.
The
Title Company shall have provided an endorsement to the Title Insurance
containing a zoning endorsement; and
(viii) Certification
of Completion and Production Guarantee.
The
Agent shall have received from the Design/Builder (1) a certificate that the
Project has been substantially completed in accordance with the Plans and
Specifications and (2) a production guarantee with respect to the operation
of
the Project, in a form or forms reasonably satisfactory to the Agent.
(b) Term
Loan.
In the
case Borrower determines that all or any portion of the Term Loan is to be
a
Term LIBOR Rate Loan, the Borrower shall so 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 prior to the date of such Loan. In the case all or any portion
of the Term Loan is to be a Term Base Rate Loan or a Term Fixed Rate Loan,
the
Borrower shall so notify the Agent no later than 12:00 p.m. (noon) (St. Louis,
Missouri time) as of the date of such Loan. With respect to any Term Fixed
Rate
Loan, the Borrower shall also notify the Agent as to which portion, if any,
shall be a Term Fixed Rate Non-Prepayment Penalty Loan and as to which portion,
if any, shall be a Term Fixed Rate Prepayment Penalty Loan. A Term Fixed Rate
Loan must be selected by the Borrower by the Conversion Date, and such selection
is irrevocable. In the event Borrower selects a Term LIBOR Rate Loan, the
Borrower shall specify the Interest Period therefore; provided, however, that,
no Term LIBOR Rate Loan shall be established while an Event of Default exists
or
if the interest rate for such Term LIBOR Rate Loan would exceed the Maximum
Rate. Each Term LIBOR Rate Loan shall be in an amount equal to $1,000,000.00
or
incremental multiples of $1,000,000.00. No more than four (4) Term LIBOR Rate
Loans may be outstanding at any time. A Term Loan shall be considered a Term
Base Rate Loan unless the Borrower notifies the Agent that it is selecting
another Type of Term Loan. 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).
To the
extent the Borrower selects a Term Fixed Rate Loan, each Bank shall extend
a
Term Fixed Rate Loan to the Borrower, in an amount equal to its Pro Rata Share
of the Term Fixed Rate Loan; provided, however, that if the Borrower selects
a
Term Fixed Rate Non-Prepayment Penalty Loan with respect to all or a portion
of
the Term Loan, and if a Bank does not offer this type of loan to other
commercial borrowers similarly situated and under similar circumstances, then
such Bank may elect not to extend its Pro Rata Share of such Term Fixed Rate
Non-Prepayment Penalty Loan to the Borrower. In such event, each Bank that
does
offer such type of loans to other commercial borrowers shall extend such Loan
to
the Borrower in the amount as its Pro Rata Share bears to the Pro Rata Shares
of
all the Banks, excluding the Bank or Banks that do not offer such type of
loan.
19
(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 a Term Base Rate
Loan shall be due monthly in arrears commencing on the first day of the month
following the Conversion Date and on the same day of each and every month
thereafter until the Term Maturity 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.
(d) Excess
Cash Flow.
Following the Conversion Date, and in addition to all other payments of
principal and interest required under this Agreement or the Notes, the Borrower
shall annually remit to the Agent an amount equal to fifty percent (50%) of
the
Borrower’s Excess Cash Flow on or before that certain date which is one hundred
fifty (150) days after the completion of Borrower’s immediately preceding fiscal
year. Such payment of Excess Cash Flow shall not reduce, suspend, satisfy or
otherwise affect any installments of principal or interest otherwise due Agent
under this Agreement, the Notes or the Related Documents. Payment of Excess
Cash
Flow pursuant to this provision shall not be deemed a “prepayment” on the Note
and shall discontinue when the aggregate amount of payments payable by the
Borrower under this Section
2.03(d)
exceed
Fifteen Million Dollars ($15,000,000.00).
20
(e) Collateral.
Subject
to the Section
8.14
hereof,
as security for the payment and performance of all obligations of Borrower
to
the Agent and to the Banks, with respect to the Term Loan, including, but not
limited to, principal and interest under the Notes, fees, funding losses,
reimbursements, and all other Loan Obligations under any of the Loan Documents,
Borrower shall grant to, and maintain for, the Agent, for the benefit of the
Banks, a first lien and Security Interest, pursuant to the Deed of Trust and
the
other Security Agreements, in all of Borrower’s Real Property and Personal
Property, now owned or hereafter acquired by Borrower.
Section
2.04 Closing
Fee.
The
Borrower agrees to pay to the Agent on the Closing Date a Closing Fee (a
“Closing Fee”) for the account of each of the Banks as set forth
below:
FCS
Financial, PCA
|
$
|
80,000.00
|
||
Southwest
Bank of St. Louis
|
$
|
50,000.00
|
||
AgriBank,
FCB
|
$
|
25,000.00
|
||
CoBank,
ACB
|
$
|
25,000.00
|
||
1st
Farm Credit Services, FLCA
|
$
|
25,000.00
|
||
Bank
Midwest, N.A.
|
$
|
25,000.00
|
||
Progressive
Farm Credit Services, FLCA
|
$
|
5,000.00
|
Section
2.05 Unused
Commitment Fee.
In
addition to the Closing Fee payable on the Closing Date, Borrower agrees to
pay
to the Agent for the account of each Bank an Unused Commitment Fee on the
average daily unused portion of such Bank’s Commitment from the Closing Date
until the Conversion Date at the rate of 0.30% per annum, payable in arrears
in
monthly installments payable on the first day of each month during the term
of
such Bank’s Commitment and on the Conversion Date. For purposes of this
Agreement, the unused portion of a Bank’s Commitment for any measurement period
shall be the positive difference, if any, of: (i) the average daily amount
of
such Bank’s Commitment; minus (ii) the Bank’s Pro Rata Share of the average
daily Outstanding Credit.
Section
2.06. Notes.
During
the Construction Period, the Advances and Loans shall be evidenced by a single
promissory note executed by the Borrower, in substantially the form of
Exhibit
D
attached
hereto and made a part hereof by this reference (a “Note”),
delivered to Agent pursuant to Article III. Following the Conversion Date,
each
Bank shall receive a note executed by Borrower in an amount equal to that Bank’s
interest in the Term Loan, form of which shall be as set forth on Exhibit
E
attached
hereto and made a part hereof by this reference.
Section
2.07. Pricing.
(a) Applicable
Rate.
With
respect to Term Fixed Rate Loans, the Borrower shall pay interest to the Banks
on the unpaid principal balance of the Loans at the Fixed Rate determined by
any
Bank extending such Loan as of the Conversion Date. With respect to Base Rate
Loans and LIBOR Rate Loans, the Borrower shall pay interest to the Banks on
the
unpaid principal amount of the Advances and Loans during the period from the
Advance or Loan until the date due at a fluctuating rate per annum equal to:
(i)
during the period that the Advances, or portions thereof, constitute Base Rate
Loans, the Base Rate plus the Base Margin; (ii) during the period that the
Advances, or portions thereof, constitute LIBOR Rate Loans, the LIBOR Rate
applicable thereto plus the LIBOR Margin; provided, however, that if any Bank
is
unable to acquire the funds at the LIBOR Rate for an Interest Period or the
Borrower fails to select an interest rate in accordance with the terms thereof,
then the Applicable Rate shall be the rate set forth in the foregoing clause
(i). In no event shall the interest rate payable on a Loan exceed the maximum
non-usurious interest rate, if any, that at any time, or from time to time,
may
be contracted for, taken, reserved, charged or received under applicable state
or federal laws (the “Maximum Rate”).
21
(b) Conversion
of Loans.
The
Borrower shall have the right from time to time to convert all or any part
of
any Loan into a Loan of a different Type or subject to the terms hereof convert
among LIBOR Rate Loans; provided, however, that: (a) a LIBOR Rate Loan may
only
be converted on the last day of an Interest Period therefore; (b) except for
conversions into Base Rate Loans, no conversions of a LIBOR Rate Loan shall
be
made while an Event of Default exists or if the interest rate for such LIBOR
Rate Loan would exceed the Maximum Rate; (c) each LIBOR Rate Loan shall be
in an
amount equal to $1,000,000.00 and incremental multiples of $1,000,000.00; (d)
no
more than four (4) LIBOR Rate Loans may be outstanding at any time; and (e)
once
selected, no Term Fixed Rate Loan may be converted into a Term Base Rate Loan
or
a Term LIBOR Rate Loan. Notice by the Borrower to the Agent of conversions
of
Loans shall be irrevocable and shall be effective only if received by the Agent
not later than 12:00 p.m. (noon) (St. Louis, Missouri time) on (a) the Business
Day of the conversion into Base Rate Loans and (b) the Business Day three (3)
Business Days before the conversion to or continuation of a LIBOR Rate Loan.
The
Agent shall notify the Banks of the contents of each such notice on the day
of
its receipt of the same or, if received on or after the applicable time set
forth above on a Business Day, on the next Business Day. In the event the
Borrower fails to select the Type of Loan applicable to an Advance, or portion
thereof, or the duration of any Interest Period for any LIBOR Rate Loan, within
the time period and otherwise as provided in this Section
2.07(b),
such
Loan (if outstanding as a LIBOR Rate Loan) will be automatically converted
into
a Base Rate Loan on the last day of the Interest Period for such Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan.
(c) Payment
of Interest.
The
Borrower shall pay accrued and unpaid interest (i) in the case of Base Rate
Loans, on the first day of each calendar month and on the Maturity Date, (ii)
in
the case of one (1) month and three (3) month LIBOR Rate Loans on the Maturity
Date for the applicable LIBOR Rate Loan, (iii) in the case of six (6) month
LIBOR Rate Loans on the first day of each calendar month during the LIBOR Rate
Loan and on the Maturity Date for such six (6) month LIBOR Rate Loan and (iv)
in
the case of Term Fixed Rate Loans, in accordance with the terms and conditions
of the Term Fixed Rate Loan as determined by the Bank extending such Loans,
in
its discretion.
(d) Default
Interest.
Upon
the occurrence of an Event of Default, all past due principal and, to the extent
permitted by applicable law, interest, fees, and other amounts owing hereunder,
shall bear interest, from the date of such Event of Default until the date
the
Banks, in writing, acknowledge that such Event of Default is waived or cured
or
all Loan Obligations are paid in full, at the Default Rate. The term “Default
Rate”, as used herein, means the lesser of (i) the Maximum Rate, or (ii) the
rate per annum which shall from day to day be equal to two percent (2%) in
excess of the sum of the Base Rate plus the Base Margin. Interest payable at
the
Default Rate shall be payable from time to time on demand or, if not sooner
demanded, on the next interest rate payment date for that Type of loan as set
forth in Section
2.07(c)
above.
22
Section
2.08. Prepayment
of Term Loan.
(a) Except
for Term Fixed Rate Loans (which under no circumstance may be prepaid in whole
or in parts during the first year following conversion to a Term Fixed Rate
Loan) and Term Fixed Rate Prepayment Penalty Loans (which shall be subject
to
such prepayment and conversion penalties and premiums as established by the
Bank
making such Term Fixed Rate Prepayment Penalty Loan to the Borrower), the
Borrower may, with five (5) Business Days prior written notice to the Agent,
prepay the outstanding amount of the Term Loan in whole or in part, in
increments of $1,000,000.00, with accrued interest to the date of such
prepayment on the amount prepaid, without penalty or premium; provided, however,
that any prepayment of any LIBOR Rate Loan shall be made on, and only on the
last day an Interest Period for such LIBOR Rate Loan, and in the event that
any
Bank receives payment of the principal of any LIBOR Rate Loan other than on
the
last day of the Interest Period relating to such LIBOR Rate Loan (whether due
to
prepayments made by the Borrower, or due to acceleration of any amount or
amounts payable by the Borrower hereunder or under any Note, or due to any
other
reason), the Borrower shall pay to such Bank on demand any amount required
to
compensate the Bank for any additional losses, costs or expenses which it may
incur as a result of such payment, including but not limited to, any LIBOR
breakage fees charged by any Bank.
(b) Prepayment
or conversion of Term Fixed Rate Prepayment Penalty Loans during any applicable
Term Fixed Rate Prepayment Penalty Period shall be subject to such prepayment
and/or conversion penalties and premiums as established by the Bank from time
to
time with respect to such loans as offered by the Bank to other commercial
borrowers similarly situation and under similar circumstances.
Section
2.09 Increased
Costs.
(a) If
either
(i) the introduction of or any change (including without limitation, any change
by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation or (ii) the compliance by any Bank
with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) shall result in any increase in the
cost of any Bank of making, funding or maintaining any Advance, then the
Borrower shall, from time to time, upon demand by such Bank, pay to such Bank
additional amounts sufficient to indemnify such Bank against such increased
cost. A certificate as to the amount of such increased cost submitted to the
Borrower by such Bank, shall, in the absence of error, be conclusive and binding
for all purposes.
23
(b) If
either
(i) the introduction of or any change in or in any interpretation of any law
or
regulation or (ii) compliance by any Bank with any guideline or request from
any
central bank or other governmental authority (whether or not having the force
of
law) effects or would effect the amount of capital required or expected to
be
maintained by any Bank and any Bank determines that the amount of such capital,
is increased by or based upon the existence of such Bank’s commitment to extend
credit hereunder and other commitments of this type, then, upon demand by such
Bank, the Borrower shall immediately pay to such Bank, from time to time as
specified by such Bank, additional amounts sufficient to compensate such Bank
in
the light of such circumstances, to the extent that any Bank reasonably
determines such increase in capital to be allocable to the existence of such
Bank’s commitment to extend credit hereunder. A certificate as to such amounts,
submitted to Borrower by such Bank, shall, in the absence of error, be
conclusive and binding for all purposes.
Section
2.10. Changes
in Law Rendering Certain LIBOR Rate Loans Unlawful.
In the
event that any change in any applicable law (including the adoption of any
new
applicable law) or any change in the interpretation of any applicable law by
any
judicial, governmental or other regulatory body charged with the interpretation,
implementation or administration thereof, should make it (or in the good-faith
judgment of an affected Bank should raise a substantial question as to whether
it is) unlawful for such affected Bank to make, maintain or fund LIBOR Rate
Loans, then (a) such affected Bank shall promptly notify each of the other
parties hereto; (b) the obligation of such affected Bank to make LIBOR Rate
Loans of such type shall, upon the effectiveness of such event, be suspended
for
the duration of such unlawfulness, and (c) if the affected Bank so requests,
the
Borrower shall, on such date as may be required by the relevant applicable
law,
repay, prepay or convert to Base Rate Loans all then outstanding LIBOR Rate
Loans of such type made to Borrower by such affected Bank together with accrued
interest thereon and all amounts then due, if any, hereunder, other than amounts
that would otherwise be payable under Section
8.04(b).
Section
2.11. Payments
and Computations.
(a) Method
of Payment.
Except
as otherwise expressly provided herein, all payments of principal, interest,
and
other amounts to be made by the Borrower under the Loan Documents shall be
made
to the Agent in U.S. dollars and in immediately available funds, without
set-off, deduction, or counterclaim, not later than 2:00 p.m. (St. Louis,
Missouri time) on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made
on
the next succeeding Business Day). The Borrower shall, at the time of making
each such payment, specify to the Agent the sums payable under the Loan
Documents to which such payment is to be applied and in the event that the
Borrower fails to so specify or if an Event of Default exists, the Agent may
apply such payment and any proceeds of any Collateral to the Loan Obligations
in
such order and manner as it may elect in its sole discretion, subject to
Section 2.11(c).
24
(b) Payments
on a Non-Business Day.
Whenever any payment under any Loan Document shall be stated to be due on a
day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the
computation of the payment of interest and fees, as the case may
be.
(c) Pro
Rata Treatment.
Except
to the extent otherwise expressly provided herein: (i) each Advance shall be
made by the Banks, and each payment of fees under Section
2.04
shall be
made for the account of the Banks, pro rata according to their respective Pro
Rata Shares; (ii) each payment and prepayment of principal of or interest on
Advances by the Borrower shall be made to the Agent for the account of the
Agent
or the Banks holding such Advances (or participation interests therein) pro
rata
in accordance with the respective unpaid principal amounts of such Advances
or
funded participation interests held by such Banks.
(d) Proceeds
of Collateral.
All
proceeds received by the Agent from the sale or other liquidation of the
Collateral when an Event of Default exists shall first be applied as payment
of
the accrued and unpaid fees and expenses of the Agent hereunder, including,
without limitation, under Section
8.04
and then
to all other unpaid or unreimbursed Loan Obligations (including reasonable
attorneys' fees and expenses) owing to the Agent and then any remaining amount
of such proceeds shall be applied to the unpaid amounts of Loan Obligations,
pro
rata in accordance with the respective amounts of the Loan Obligations, until
all the Loan Obligations have been paid and satisfied in full or cash
collateralized. After all the Loan Obligations (including without limitation,
all contingent Loan Obligations) have been paid and satisfied in full, all
Commitments terminated and all other obligations of the Agent to the Borrower
otherwise satisfied, any proceeds of Collateral shall be delivered to the Person
entitled thereto as directed by the Borrower or as otherwise determined by
applicable law or applicable court order.
(e) Computations.
Except
as expressly provided otherwise herein, all computations of interest and fees
shall be made on the basis of actual number of days lapsed over a year of 365
or
366 days, as appropriate. For purposes of this Agreement, LIBOR interest and
fees shall be calculated over 360 days. Interest shall accrue from and include
the date of borrowing, but exclude the date of payment.
(f) Revolving
Credit Facility.
The
parties acknowledge and agree that prior to the Completion Date, Revolving
Credit Lender and Borrower shall enter into the Revolving Credit Facility to
provide Borrower with funds for use in the operation of the Project.
Additionally, the Banks agree and acknowledge that all or a portion of the
Collateral shall be secured equally and ratably with the Revolving Credit
Facility on the same lien priority basis.
25
Section
2.12. Maximum
Amount Limitation.
Anything in this Agreement or any other Loan Document to the contrary
notwithstanding, Borrower shall not ever be required to pay unearned interest
on
any Note or any of the Loan Obligations, or ever be required to pay interest
on
any Note or any of the Loan Obligations at a rate in excess of the Maximum
Rate,
if any. If the effective rate of interest which would otherwise be payable
under
this Agreement, any Note or any of the other Loan Documents would exceed the
Maximum Rate, if any, then the rate of interest which would otherwise be
contracted for, charged, or received under this Agreement, any Note or any
of
the other Loan Documents shall be reduced to the Maximum Rate, if any. If any
unearned interest or discount or property that is deemed to constitute interest
(including, without limitation, to the extent that any of the fees payable
by
Borrower for the Loan Obligations to the Agent under this Agreement, any Note,
or any of the other Loan Documents are deemed to constitute interest) is
contracted for, charged, or received in excess of the Maximum Rate, if any,
then
such interest in excess of the Maximum Rate shall be deemed a mistake and
canceled, shall not be collected or collectible, and if paid nonetheless, shall,
at the option of the holder of such Note, be either refunded to the Borrower,
or
credited on the principal of such Note. It is further agreed that, without
limitation of the foregoing and to the extent permitted by applicable law,
all
calculations of the rate of interest or discount contracted for, charged or
received by the Agent under the Notes, or under any of the Loan Documents,
that
are made for the purpose of determining whether such rate exceeds the Maximum
Rate applicable to the Agent, if any, shall be made, to the extent permitted
by
applicable laws (now or hereafter enacted), by amortizing, prorating and
spreading during the period of the full terms of the Advances evidenced by
the
Notes, and any renewals thereof all interest at any time contracted for, charged
or received by such Bank in connection therewith. This Section 2.12
shall
control every other provision of all agreements among the parties to this
Agreement pertaining to the transactions contemplated by or contained in the
Loan Documents, and the terms of this Section 2.12
shall be
deemed to be incorporated in every Loan Document and communication related
thereto.
Section
2.13. Agent
Records.
All
advances and all payments or prepayments made thereunder on account of principal
or interest may be evidenced by the Agent in accordance with its usual practice
in an account or accounts evidencing such advances and all payments or
prepayments thereunder from time to time and the amounts of principal and
interest payable and paid from time to time thereunder; in any legal action
or
proceeding in respect of the Notes, the entries made in such account or accounts
shall be prima facie
evidence
of the existence and amounts of all advances and all payments or prepayments
made thereunder on account of principal or interest.
Section
2.14. Loan
Payments.
The
Agent may deduct any obligations due or any other amounts due and payable by
the
Borrower under the Loan Documents from any accounts maintained with the
Agent.
Section
2.15. Compensation.
Upon
the
request of the Agent, the Borrower shall pay to the Agent, on behalf of any
Banks, such amount or amounts as shall be sufficient (in the reasonable opinion
of the Agent) to compensate it for any loss, cost, or expense (excluding loss
of
anticipated profits incurred by it) as a result of: (i) any prepayment or
conversion of the Loan if interest is determined by reference to the LIBOR
Rate
for any reason on a date other than the last day of the Interest Period for
such
Loan; or (ii) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Sections
3.01,
3.02,
or
3.03
to be
satisfied) to borrow, extend, or prepay the Loan if interest is determined
by
reference to the LIBOR Rate on the date for such borrowing, extension, or
prepayment specified in the relevant notice of borrowing, extension or
prepayment under this Agreement. Such indemnification may include any amount
equal to the excess, if any, of: (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or extended,
for
the period from the date of such prepayment or of such failure to borrow,
convert or extend to the last day of the applicable Interest Period (or in
the
case of a failure to borrow, convert or extend, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable
rate
of interest for such loan as provided for herein; over (b) the amount of
interest (as reasonably determined by the Agent) which would have accrued to
the
Agent on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank LIBOR market. The covenants of the Borrower
set forth in this Section
2.15
shall
survive the repayment of the Loan and other obligations under the Loan Documents
hereunder.
26
Section
2.16 Purchase
of Equity Interests in FCS Financial, PCA.
Besides
(and not in lieu of) the other amounts payable by Borrower under this Agreement,
Borrower shall purchase such equity interest in FCS Financial, PCA, or its
parent association, as FCS Financial, PCA may require from time to time. Such
purchases of equity interest shall comply with FCS Financial, PCA’s bylaws and
capital plans applicable to cooperative borrowers generally. Borrower hereby
acknowledges receipt of the following information and materials pertaining
to
FCS Financial, PCA prior to the execution of this Agreement (i) copies of the
bylaws of FCS Financial, PCA; (ii) a written description of the terms and
conditions under which the equity interests are issued; (iii) copy of the most
recent annual reports of FCS Financial, PCA; and (iv) if more recent than the
latest annual reports, the latest quarterly reports of FCS Financial, PCA.
FCS
Financial, PCA shall possess a statutory interest in its equity interest. FCS
Financial, PCA reserves the right to sell participations on a non-patronage
basis.
Borrower
acknowledges and agrees that: (i) only the portions of the Loans provided to
Borrower by FCS Financial, PCA are entitled to patronage distributions in
accordance with the bylaws of FCS Financial, PCA and its practices and
procedures; and (ii) any patronage or similar payments to which Borrower is
entitled as a result of its ownership of the equity interest in FCS Financial,
PCA will not be based on any of the Loan not belonging to FCS Financial, PCA
or
in which FCS Financial, PCA has granted a participation interest at any
time.
ARTICLE
III.
CONDITIONS
PRECEDENT
Section
3.01. Conditions
Precedent to Closing.
The
effectiveness of this Agreement and obligations of the Agent to execute this
Agreement are subject to the condition precedent that the Agent shall have
received the following, in form and substance satisfactory to the Agent:
(a) This
Agreement, duly executed by the Borrower, the Agent and each of the
Banks;
27
(b) The
Note,
duly executed by the Borrower;
(c) The
Deed
of Trust and an Assignment of Rents and Leases, fully executed and acknowledged,
to secure the Loan encumbering,
on a first lien basis, the fee interest of the Borrower in the Real Property
and
the fixtures, leases and rents thereon described in Schedule
3.01(c),
together with an Environmental Indemnity Agreement, fully executed by the
Borrower with respect to the Real Property;
(d) A
Security Agreement duly executed by the Borrower and in a form as provided
by
the Agent by which security agreement the Agent is granted a security interest
by the Borrower in the Collateral, on, subject to Section
8.14
hereof,
a first lien basis;
(e) Financing
Statements in form and content satisfactory to the Agent and in proper form
under the UCC as may be necessary or, in the opinion of the Agent, desirable
to
perfect the first lien priority security interests created by the Security
Agreement;
(f) Copies
of
UCC, tax and judgment lien search reports listing all financing statements
and
other encumbrances which name the Borrower (under its present name and any
previous name) and which are filed in the jurisdictions in which the Borrower
is
located, organized or maintains collateral, together with copies of such
financing statements (none of which shall cover the collateral purported to
be
covered by the Security Agreement);
(g)
An
ALTA
mortgagee title insurance policy issued by a title insurance company acceptable
to Agent, with respect to the Real Property, assuring the Agent that the Deed
of
Trust creates a valid
and
enforceable encumbrance on the Real Property, free and clear of all defects
and
encumbrances except Permitted Liens and containing: (i) a comprehensive
endorsement; (ii) a zoning endorsement specifying ethanol production as a
permitted use for all of the parcels included in the Real Property; and (iii)
such other endorsements as the Agent shall reasonably require. All such title
insurance policies shall be in form and substance reasonably satisfactory to
the
Agent and shall provide for affirmative insurance and such reinsurance as the
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent;
(h) Maps
or
plats of the Real Property certified to the Agent and the Title Insurance
Company in a manner reasonably satisfactory to each of the Agent and the Title
Insurance Company, dated a date reasonably satisfactory to each of the Agent
and
the Title Insurance Company by an independent professional licensed land
surveyor, which maps or plats and the surveys on which they are based shall
be
sufficient to delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and adopted
by
the American Land Title Association and the American Congress on Surveying
and
Mapping in 1992, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following:
(A) the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites; (D) all
roadways, paths, driveways, easements, encroachments and overhanging projections
and similar encumbrances affecting the site, whether recorded, apparent from
a
physical inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the building structures
and improvements on the sites; and (F) if the site is described as being on
a filed map, a legend relating the survey to said map;
28
(i) Evidence
as to: (A) whether any portion of the Real Property is in an area
designated by the Federal Emergency Management Agency as having special flood
or
mud slide hazards (a “Flood
Hazard Property”);
and
(B) if any portion of the Real Property is a Flood Hazard Property:
(1) whether the community in which such Real Property is located is
participating in the National Flood Insurance Program; (2) the Borrower’s
written acknowledgment of receipt of written notification from the Agent:
(a) as to the fact that such Real Property is a Flood Hazard Property; and
(b) as to whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program; and (3) copies
of insurance policies or certificates of insurance of the Borrower evidencing
flood insurance satisfactory to the Agent and naming the Agent as sole loss
payee on behalf of the Agent;
(j) Evidence
reasonably satisfactory to the Agent that the Real Property, and the
contemplated uses of the Real Property, are in compliance in all material
respects with all applicable land use and zoning laws, including the zoning
designation made for the Real Property, the permitted uses of the Real Property
under such zoning designation and zoning requirements as to parking, lot size,
ingress, egress and building setback.
(k) Satisfactory
soil boring tests and site survey reports conducted by an engineering firm
acceptable to the Agent. The report shall include, without limitation, delivery
to the Agent of a certification by the engineer that the soil condition of
the
Real Property is satisfactory for construction of the Project in accordance
with
the Plans and Specifications;
(l) A
written
environmental review, audit, assessment or report addressed to the Agent setting
forth the results of an investigation of the Project and indicating that no
hazardous waste or substances are contained on, under or in the Real
Property;
(m) Financial
statements for the Borrower in form and substance acceptable to the Agent,
certified as accurate in all material respect by the Borrower;
(n) A
true
and correct copy of the “turn key” agreement between the Borrower and the
Design/Builder with respect to the design, construction and procurement of
equipment with respect to the Project (the “EPC
Contract”);
29
(o) A
Collateral Assignment of the EPC Contract executed by the Borrower and in form
and content satisfactory to Agent and its counsel and acknowledged by the
Design/Builder;
(p) An
agreement with the Consulting Engineer by which agreement the Agent shall have
engaged, at the Borrower’s expense, the Consulting Engineer for the purpose of
providing periodic certifications to the Agent and the Banks that the
construction of the Project is being made according to the Plans and
Specifications;
(q) A
certificate from the Borrower setting forth all federal, state and local
licenses, permits, registrations and approvals required for the construction
and
operation of the Project and the dates on which all such licenses, permits,
registrations and approvals will be obtained;
(r) The
Construction Schedule, setting out the anticipated progress on the Project
with
monthly cost breakdowns, certified as accurate in all material respects by
the
Borrower and the Design/Builder;
(s) Verification
that Borrower’s Equity in an amount not less than $31,995,000.00 (including
like-kind contributions) and a schedule of any further anticipated member
contributions to the Project and Draw Requests which will be required to
accomplish the Construction Schedule, certified as accurate in all material
respects by the Borrower;
(t) An
accounting of all member equity contributions received by Borrower prior to
the
Closing Date, which accounting shall set forth the use of member equity
contributions for Project Costs paid prior to the Closing Date (if any),
certified as accurate in all material respects by the Borrower;
(u) True
and
correct copies of any executed DGS or fuel marketing agreements (“Marketing
Agreements”)
between Borrower and any DGS or fuel marketing entity (“Marketing
Agent”),
as
may have been executed by the Borrower prior to Closing, or true and correct
copies of any letters of intent between Borrower and any Marketing Agent with
respect to the marketing of DGS and fuel to be produced by Borrower following
the Completion Date, in acceptable form and substance to the Agent;
(v) A
project
budget, certified as accurate in all material respects, by the Borrower, setting
forth all anticipated Project Costs and containing such detail as may be
required by the Agent, the Disbursing Agent, and the Title Company;
(w) Policies
of insurance with respect to the Project in accordance with the requirements
contained in this Agreement and evidence that the premiums for the current
policy year have been paid or will be paid on the Closing Date and that the
Agent and the Banks are named on such policies as additional named insured
parties;
30
(x) A
true
and correct copy of the grain production agreement/contract between the Borrower
and Xxx-Xxxxxxx, executed by the Borrower and Xxx-Xxxxxxx (the “Grain
Procurement Contract”);
(y) A
collateral assignment of the Grain Procurement Contract executed by the Borrower
and in form and content satisfactory to Agent and its counsel and acknowledged
by Xxx-Xxxxxxx;
(z) Letters
from each applicable utility evidencing that all utilities necessary or
desirable for the use and operation of the Project are or will be available
and
adequate to the Borrower and the Project;
(aa) A
proposed operating budget for the Project for the first eighteen (18) months
of
operation following the Start-Up Date, certified by the Borrower as accurate
in
all material respects;
(bb) Evidence
that all other actions necessary or, in the opinion of the Agent, desirable
to
enable the Agent to perfect and protect the security interests created by the
Security Agreement have been taken;
(cc) A
certificate of the secretary of the Borrower together with true and correct
copies of the following: (i) the Articles and Certificate of Organization
of the Borrower, including all amendments thereto, certified by the Secretary
of
State of the state of its organization and dated within thirty (30) days
prior to the date hereof; (ii) the Operating Agreement of the Borrower,
including all amendments thereto; (iii) the resolutions of the Board of
Managers of the Borrower authorizing the execution, delivery and performance
of
this Agreement, the other Loan Documents, and all documentation executed and
delivered in connection therewith to which the Borrower is a party;
(iv) certificates of the appropriate government officials of the state of
organization of the Borrower as to its existence and good standing, and
certificates of the appropriate government officials in each state where the
Borrower does business and where failure to qualify as a foreign corporation
would have a Material Adverse Effect on the business and financial condition
of
the Borrower, as to its good standing and due qualification to do business
in
such state, each dated within thirty (30) days prior to the date hereof; and
(v) the names of the officers of the Borrower authorized to sign this
Agreement, and the Related Documents, and to request and obtain Advances on
behalf of the Borrower pursuant to this Agreement, together with a sample of
the
true signature of each such officer;
(dd)
Favorable opinion of Xxxxx Xxxx LLP, legal counsel for the Borrower as to the
authorization and standing, enforceability of the Loan Documents, and
confirmation of labor, tax, environmental, employment, management, litigation,
insurance and other contractual matters, and such other matters as the Agent
or
its counsel may reasonably request;
31
(ee) Evidence
that the costs and expenses (including, without limitation, attorneys' fees
of
the Agent) referred to in Section 8.04,
and the
Closing Fees specified in Section
2.04,
to the
extent incurred and invoiced, shall have been paid in full;
(ff)
Satisfactory review by the Agent of any pending litigation relating to the
Borrower or the Project;
(gg) There
shall not have occurred a change that would constitute a Material Adverse Effect
since the most current audit of the Borrower in the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise) or prospects of the Borrower taken as a whole or in the facts and
information regarding the Borrower as represented to the Closing
Date;
(hh) Satisfactory
review by the Agent of such Economic Development Agreement has may have been
entered into between the Borrower and Xxxxxxx County, Missouri with respect
to
the Project;
(ii) Satisfactory
review by the Agent and its counsel, of information regarding litigation,
permits, tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements, property
ownership, environmental matters, contingent liabilities, and management of
the
Borrower;
(jj) Borrower’s
current financial statement and prepared projected income statements, cash
flow
statements and balance sheets for fiscal years ending December 31, 2006 through
fiscal year ending December 31, 2014, including a detailed listing of all
assumptions used in compiling those projections. All projections must
demonstrate a reasonable ability to repay the scheduled debt repayment as
determined by Agent, in its sole and complete discretion.
Section
3.02. Conditions
Precedent to Commencement of Construction.
The
effectiveness of this Agreement and obligations of the Agent and the Banks
to
fund the Loans are subject to the condition precedent that the Agent shall
have
received the following, in form and substance satisfactory to the Agent at
least
ten (10) Business Days prior to the Commencement of Construction of the Project:
(a) A
certificate of the Borrower representing, warranting and certifying to the
Agent
that each and all of the representations and warranties contained in this
Agreement and the Related Documents are true and correct as of the date thereof
and that no Event of Default, and no event which with the giving of notice
or
the passage of time or both would constitute an Event of Default, has occurred
and is continuing as of the date thereof;
(b) True
and
correct copies of the substantially final Plans and Specifications with respect
to the Project, certified as accurate in all material respects by the
Design/Builder and the Borrower;
32
(c) A
collateral assignment of the Plans and Specifications, duly executed by the
Borrower, and which assignment shall have been consented to and certified in
writing by the Design/Builder;
(d) An
initial Sworn Construction Statement in the form attached as Exhibit
C
duly
executed and certified as accurate in all material respects by the Borrower
showing all costs and expenses incurred or to be incurred in connection with
construction of the Project. To the extent such have not been fixed by accepted
bids, such construction cost statement may include the Borrower’s reasonable
estimate of such costs certified as accurate in all material respects by
Borrower and approved by Consulting Engineer and Agent. As to those parts of
the
Sworn Construction Statement dealing with areas covered by the ECP Contract,
the
Design/Builder shall certify such parts as accurate in all material
respects;
(e) The
Agent
shall have obtained a certificate from the Consulting Engineer that the Plans
and Specifications, and the Sworn Construction Statement of the Borrower is
true
and accurate in all material respects and containing such additional terms
as
may be acceptable to the Agent and the Banks;
(f) True
and
correct copies of all executed Construction Contracts then in existence relating
to the construction of the Project and all machinery, equipment and fixtures
to
be used in connection with the Projects, including all warranties, payment
retentions, fixed-price provisions and guarantees with respect
thereto;
(g) A
collateral assignment of contract for each of the Construction Contracts not
previously assigned, duly executed by the Borrower and pursuant to which the
Borrower shall have assigned to the Agent all of the Borrower’s right, title and
interest in and to each such Construction Contract, and which assignment shall
have been consented to and certified in writing by the other party(ies) to
each
such Construction Contract;
(h) Policies
of insurance with respect to the Project and evidence that the premiums for
the
current policy year have been paid and that the Agent and the Banks are named
on
such policies as additional named insured parties;
(i) The
Agent
shall have received evidence that the Borrower has obtained all risk and
builder’s risk insurance for the Project and that the Agent and the Banks are
named on such policies as additional named insured parties;
(j) True
and
correct copies of all permits, approvals or authorizations as may be legally
required to commence construction of the Project;
(k) An
endorsement to the title insurance policy that the Real Property is not subject
to the claims or liens of any contractors, subcontractors or suppliers which
would have priority over the Deed of Trust;
33
(l) A
monthly
schedule of the anticipated progress on the Project with monthly cost
breakdowns, certified as accurate in all material respects by the Borrower
and
the Consulting Engineer;
(m) Delivery
by Borrower to escrow of the contributed funds for Commencement of Construction
of the Project.
Section
3.03. Conditions
Precedent to Funding.
The
effectiveness of this Agreement and obligations of the Agent and the Banks
to
fund the Loans are subject to the condition precedent that the Agent shall
have
received the following, in form and substance satisfactory to the Agent at
least
ten (10) Business Days prior to Borrower submitting its first Draw Request
for
Advance to the Disbursing Agent:
(a) A
certificate of the Borrower representing, warranting and certifying to the
Agent
and the Banks that each and all of the representations and warranties contained
in this Agreement and the Related Documents are true and correct as of the
date
thereof and that no Event of Default, and no event which with the giving of
notice or the passage of time or both would constitute an Event of Default,
has
occurred and is continuing as of the date thereof;
(b) A
certificate of the Borrower certifying to the Agent and the Banks that the
Borrower has disbursed or contributed in escrow an amount of not less than
$15,800,000.00 with respect to the construction of the Project;
(c) A
certificate of the Borrower certifying to the Agent and the Banks that not
less
than $31,995,000.00 of Borrower’s Equity has been actually contributed by the
members of the Borrower and that none of such amount remains unpaid or
uncontributed;
(d) Policies
of insurance with respect to the Project and evidence that the premiums for
the
current policy year have been paid and that the Agent and the Banks are named
on
such policies as additional named insured parties;
(e) True
and
correct copies of firm bids from Contractors and suppliers for goods and
services to be used in connection with the construction of the Project for
at
least 75% of the Project Costs;
(f) A
certificate from the Consulting Engineer that the Plans and Specifications
are
true and accurate in all material respects and that the Project may be completed
within the costs set forth on the Sworn Construction Statement of the Borrower
and according to the Construction Schedule, and containing such additional
terms
and subject to such conditions as may be acceptable to the Agent and the Banks;
(g) An
endorsement to the title insurance policy that the Real Property is not subject
to the claims or liens of any contractors, subcontractors or suppliers which
would have priority over the Deed of Trust;
34
(h) The
results of the Agent's inspection of the Collateral completed in good faith
and
acceptable to Agent;
(i) Evidence
reasonably satisfactory to the Agent that the Real Property and the contemplated
use of the Real Property, are in compliance in all material respects with all
applicable Laws including without limitation health and Environmental Laws,
and
laws regarding access and facilities for disabled persons including, but not
limited to, the Federal Design Architectural Barriers Act, the Fair Housing
Amendments Act of 1988, the Rehabilitation Act of 1973 and the Americans with
Disabilities Act of 1990;
(j) An
appraisal of the Real Property, in form and substance satisfactory to the Agent,
completed by such appraiser as selected by the Agent, and rendered by the
appraiser to conform to the requirements of Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), including
an
environmental assessment setting indicating that no hazardous waste or
substances are contained on, under or in the Real Property;
(k) A
Construction Disbursing Agreement duly executed by the Agent, Borrower and
the
Disbursing Agent and in the form as provided by the Agent and by which agreement
the terms and procedures are established for disbursing the proceeds of the
Loans and the portion of Borrower’s Equity to be deposited with the Disbursing
Agent pursuant to Section
2.02(f)(ii)
hereof.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES
Section
4.01. Representations
and Warranties of the Borrower.
In
order to induce the Agent to enter into this Agreement, the Borrower represents
and warrants to the Agent that the following statements are, and after giving
effect to the Loans, will be, true and correct as of the Closing Date, and
as of
the date of each Advance hereunder, except as otherwise disclosed in writing
to
the Agent:
(a) Borrower.
The
Borrower is a limited liability company duly organized and validly existing
and
in good standing under the laws of the jurisdiction indicated at the beginning
of this Agreement and is qualified to do business in all jurisdictions in which
the nature of its business makes such qualification necessary and where failure
to so qualify would have a Material Adverse Effect on its financial condition
or
operations. The Borrower has the power and authority to execute, deliver, and
perform its obligations under the Loan Documents to which it is or may become
a
party. The Borrower has no subsidiaries. There are no outstanding subscriptions,
options, warrants, calls, or rights (including preemptive rights) to acquire,
and no outstanding securities or instruments convertible into, membership units
of the Borrower, except for those transactions set forth on Schedule
4.01(a);
35
(b) The
Loan Documents.
The
execution, delivery and performance by the Borrower of the Loan Documents are
within the Borrower's powers, have been duly authorized by all necessary action,
do not contravene: (i) the Borrower's articles, by-laws, or operating
agreement; or (ii) any law or any contractual restriction binding on or
affecting the Borrower, and do not result in or require the creation of any
lien, security interest or other charge or encumbrance (other than pursuant
to
the terms thereof) upon or with respect to any of its properties;
(c) Governmental
Approvals.
No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or regulatory body is required for the due execution,
delivery and performance by the Borrower of any Loan Documents, except for
such
approvals and consents which have been made or obtained;
(d) Enforceability.
This
Agreement is, and each other Loan Document to which the Borrower is a party
when
delivered will be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective
terms;
(e) Financial
Condition and Operations.
The
balance sheets of the Borrower as of December 31, 2006, and the related
statements of income and, with respect to the period ended December 31, 2006,
the related statement of cash flow of the Borrower for the fiscal period then
ended, copies of which have been furnished to the Agent, fairly present in
all
material respects the financial condition of the Borrower as at such dates
and
the results of the operations of the Borrower for the period ended on such
dates, all in accordance with generally accepted accounting principles
consistently applied, and since December 31, 2006, there has been no material
adverse change in such condition or operations;
(f) Litigation.
Except
as described on Schedule 4.01(f),
there
is no pending or threatened action or proceeding affecting the Borrower or
any
of the transactions contemplated hereby before any court, governmental agency
or
arbitrator, which would have a Material Adverse Effect. As of the Closing Date
there are no outstanding judgments against the Borrower;
(g) Use
of Proceeds of Advances, etc.
(i) No proceeds of the Loans will be used to acquire any security in any
transaction which is subject to Sections 13 and 14 of the Securities
Exchange Act of 1934 (provided,
however,
that
this provision shall not prohibit Borrower from investing in certain
cooperatives for the purposes of carrying out its overall business operations);
(ii) the Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve
System); and (iii) no proceeds of the Loans will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock;
36
(h) Liens.
There
is no lien, security interest or other charge or encumbrance, and no other
type
of preferential arrangement, upon or with respect to any of the properties
or
income of the Borrower, which secures Debt of any Person, except as described
in
Schedule 5.02(a),
Permitted Liens and Subordinated Debt;
(i) Solvency.
As of,
from and after the date of this Agreement, the Borrower: (a) owns and will
own assets the fair saleable value of which are: (i) greater than the total
amount of liabilities (including contingent liabilities); and (ii) greater
than the amount that will be required to pay the probable liabilities of its
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it;
(b) has capital that is not unreasonably small in relation to its business
as presently conducted or any contemplated or undertaken transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due;
(j) Borrower
Eligibility.
Borrower is an eligible borrower under the Farm Credit Act and the regulations
promulgated thereunder;
(k) Office
Locations; Fictitious Names; Predecessor Companies; Tax I.D.
Number.
The
Borrower's chief place of business, its chief executive office, and its
jurisdiction of organization is located at the place identified for the Borrower
on Schedule 4.01(k).
Within
the last four months it has not had any other chief place of business, chief
executive office, or jurisdiction of organization. Schedule 4.01(k)
also
sets forth all other places where the Borrower keeps its books and records
and
all other locations where the Borrower has a place of business. The Borrower
does not do business nor has the Borrower done business during the past
five (5) years under any trade-name or fictitious business name except as
disclosed on Schedule 4.01(k).
Schedule 4.01(k)
sets
forth an accurate list of all names of all predecessor companies of the Borrower
including the names of any entities it acquired (by stock purchase, asset
purchase, merger or otherwise) and the chief place of business and chief
executive office of each such predecessor company. For purposes of the
foregoing, a “predecessor company” shall mean any Person whose assets or equity
interests are acquired by the Borrower or who was merged with or into the
Borrower within the last four months prior to the date hereof. The Borrower's
United States Federal Income Tax I.D. Number and state organizational
identification number is identified on Schedule 4.01(k);
(l) Disclosure.
All
factual information furnished by or on behalf of the Borrower in writing to
the
Agent (including, without limitation, all factual information contained in
the
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated herein or therein is, and all
other such factual information hereafter furnished by or on behalf of the
Borrower to the Agent, will be true and accurate in all material respects on
the
date as of which such information is dated or certified and not incomplete
by
omitting to state any fact necessary to make such information not misleading
in
any material respect at such time in light of the circumstances under which
such
information was provided;
37
(m) Operation
of Business.
The
Borrower possesses all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, necessary to conduct its
business substantially as now conducted and as presently proposed to be
conducted except those that the failure to so possess could not reasonably
be
expected to have a Material Adverse Effect on its financial condition or
operations and those which Borrower believes will be obtained in the ordinary
course of business in the future and are not required at the present time,
and
the Borrower is not in violation of any valid rights of others with respect
to
any of the foregoing except violations that could not reasonably be expected
to
have such a Material Adverse Effect;
(n) Intellectual
Property.
The
Borrower owns, or has the legal right to use, all patents, trademarks, trade
names, copyrights, technology, know-how and processes (the “Intellectual
Property”)
necessary for it to conduct its business as currently conducted except for
those
the failure to own or have such legal right to use could not reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, set forth
in
Schedule
4.01(n)
is a
list of all Intellectual Property registered with the United States Copyright
Office or the United States Patent and Trademark Office and owned by the
Borrower or that the Borrower has the right to use. Except as provided in
Schedule
4.01(n),
no
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness
of
any such Intellectual Property, nor does the Borrower know of any such claim,
and, to the knowledge of the Borrower, the use of such Intellectual Property
by
the Borrower does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect;
(o) Investment
Company Act.
The
Borrower is not required to be registered as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended;
(p) Environmental
Compliance.
The
Borrower, except as set forth in Schedule
4.01(p),
is in
material compliance with all applicable Environmental Laws, including, but
not
limited to, CERCLA and XXXX;
(q) Other
Agreements.
The
Borrower is not in default in any material respects under any contract, lease
or
commitment to which the Borrower is a party or by which the Borrower is bound
where such default would result in a Material Adverse Effect. The Borrower
knows
of no dispute relating to any contract, lease or commitment which is material
to
the continued financial success and wellbeing of the Borrower;
(r) Tax
Liabilities.
Except
where the failure to so file, pay or make provisions for payment would not
have
a Material Adverse Effect, the Borrower has filed all federal, state and local
tax reports and returns required by the Borrower and has either duly paid all
taxes, duties and charges indicated to be due on the basis of such returns
and
reports or has made adequate provision for the payment thereof, and the
assessment of any material amount of additional taxes in excess of those paid
and reported is not reasonably expected. The reserves for taxes reflected on
the
Borrower’s balance sheet as furnished to Agent on or before the Closing Date are
adequate in amount for the payment of all liabilities of all taxes (whether
or
not disputed) of the Borrower accrued through the date of such balance sheet.
There are no material unresolved questions or claims concerning any tax
liabilities of the Borrower;
38
(s) Pension
Plans.
No
events, including without limitation, any “Reportable Event” or “Prohibited
Transactions”, as those terms are defined in ERISA, have occurred in connection
with any pension plan of the Borrower which might constitute grounds for the
termination of any such pension plan by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States District Court of a
trustee to administer any such pension plan. All of the Borrower’s pension plans
(if any) meet the minimum funding standards of Section 302 of
ERISA;
(t) Conflicting
or Adverse Agreements or Restrictions.
The
Borrower is not a party to any contract or agreement or subject to any
restriction which restricts the conduct of its business which could have a
Material Adverse Effect. Borrower is not in default under or in violation of
any
requirement of any Governmental Authority related to the Loans or any other
governmental requirement which default could have a Material Adverse Effect.
Neither the execution nor delivery of the Loan Documents nor the consummation
of
the transaction contemplated thereby, nor fulfillment of and compliance with
respective terms, conditions and provisions thereof, will conflict with or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation or position of any lien or security interest on any of the Collateral
pursuant to (a) the articles or certificate of organization of the Borrower;
(b)
any requirement of any Governmental Authority; (c) any order, writ, injunction
or decree of any court; or (d) the terms, conditions or provisions of any
material agreement or instrument to which the Borrower is a party or by which
it
or its property is bound or to which it or its property is subject to in any
material respect; and
(u) Survival
of Representations.
All
representations and warranties contained in this Agreement or in any of the
other Loan Documents shall survive the execution and delivery of this Agreement.
All representations and warranties shall be deemed remade by Borrower with
each
Request for Advance, except as otherwise disclosed in writing by the Borrower
to
the Agent.
ARTICLE
V.
COVENANTS
OF THE BORROWER
Section
5.01. Affirmative
Covenants.
So long
as any Loan Obligations remain unpaid or the Agent shall have any commitment
hereunder, the Borrower will, unless the Agent shall otherwise consent in
advance in writing:
(a) Compliance
with Laws, etc.
Comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation: (i) all applicable
zoning and land use laws; (ii) all employee benefit and Environmental Laws;
and (iii) paying before the same become delinquent all taxes, assessments
and governmental charges imposed upon it or upon its property except to the
extent contested in good faith (collectively the “Laws”);
39
(b) Visitation
Rights; Field Examination.
At any
reasonable time and from time to time during the term of the Construction Loan
and upon at least two (2) Business Days notice during the term of the Term
Loan,
permit the Agent or representatives thereof to, at the expense of Agent, examine
and make copies of and abstracts from the records and books of account of,
and
visit the properties of, and conduct field examinations and collateral
inspections at least annually of the Borrower and to discuss the affairs,
finances and accounts of the Borrower with any of its officers or directors,
provided,
however,
upon
and during the continuance of an Event of Default or in the event that there
are
deemed by the Agent to be any material inconsistencies and/or material
noncompliance with respect to any financial or other reporting on the part
of
the Borrower, any and all visits and inspections deemed necessary or desirable
on account of such Event of Default, inconsistency and/or noncompliance shall
be
at the expense of the Borrower. In addition to the foregoing, at any reasonable
time and from time to time, the Borrower also shall permit the Agent or
representatives thereof, at the expense of the Agent, to examine and make copies
of and abstracts from the records and books of account of, and visit the
properties of, the Borrower, and to discuss the affairs, finances and accounts
of the Borrower with any of their respective officers or directors;
(c) Reporting
Requirements.
Furnish
to the Agent:
(i) as
soon
as available and in any event within 120 days after the end of each fiscal
year of the Borrower, beginning with the fiscal year ending December 31, 2006,
a
copy of the audited financial statements (including balance sheet, statements
of
income and cash flows, all accompanying notes thereto and management’s
discussion and analysis) prepared in accordance with generally accepted
accounting principals consistently applied, for such year for the Borrower,
certified, without qualification, in an opinion reasonably acceptable to the
Agent by independent public accountants reasonably acceptable to the
Agent;
(ii) as
soon
as available after the end of each fiscal year beginning with December 31,
2006,
a copy of Borrower’s signed U.S. Income Tax return and accompanying schedules;
(iii) commencing
with the first full calendar month following the Start-Up Date and thereafter,
as soon as available and in any event within 30 days after the end of each
calendar month, a copy of the financial statements (including balance sheet,
statements of income and cash flows commencing at the beginning of the fiscal
year and ending with the end of such month, all accompanying notes thereto)
prepared in accordance with generally accepted accounting principals
consistently applied, for such calendar month for the Borrower, certified by
an
authorized officer of the Borrower; together with a Compliance Certificate
which: (A) states that no Event of Default, and no event or condition that
but for the passage of time, the giving of notice or both would constitute
an
Event of Default, has occurred or is in existence; and (B) shows in detail
reasonably satisfactory to the Agent the calculation of, and the Borrower'
compliance with, each of the covenants contained in Sections 5.01(d),
5.01(e),
5.01(f),
and
5.01(g);
40
(iv) commencing
with the first full calendar month following the Start-Up Date and thereafter,
as soon as available but in any event not more than thirty (30) days after
the end of each calendar month, a list and aging of all of the Borrower'
accounts receivable and accounts payable, in such form and manner as is
satisfactory to the Agent;
(v) promptly
upon the Agent's request therefore, copies of all reports and notices which
the
Borrower files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or which the
Borrower receives from such Governmental Authority;
(vi) commencing
with the December 15 following the Start-Up Date and thereafter, by December
15th
of each
fiscal year of the Borrower, an annual (with monthly break out) operating plan
and budget of the Borrower for the immediately succeeding fiscal year
containing, among other things, pro forma financial statements and forecasts
for
all planned lines of business;
(vii) promptly
after the occurrence thereof, information concerning any litigation or
governmental or environmental proceedings against the Borrower or any of its
properties that if determined unfavorably to the Borrower could reasonably
be
expected to result in a Material Adverse Effect;
(viii) promptly
upon the occurrence of an Event of Default or an event or condition that but
for
the passage of time or the giving of notice or both would constitute an Event
of
Default, notice of such Event of Default or event;
(ix) promptly
after the receipt thereof, a copy of any management letters or written reports
submitted to the Borrower by its independent certified public accountants with
respect to the business, financial condition or operation of the
Borrower;
(x) promptly
after the receipt thereof, a copy of any notice of default under any material
agreements of the Borrower that could reasonably be expected to result in a
Material Adverse Effect;
(xi) promptly
after the filing thereof, all applications with respect to required permits
for
the Project, and promptly upon the receipt thereof, copies of all permits
obtained by Borrower with respect to the Project; and
41
(xii) such
other information respecting the condition or operations, financial or
otherwise, of the Borrower as the Agent may from time to time reasonably
request;
(d) Net
Worth.
Maintain as of the Closing Date Net Worth of not less than $31,995,000.00.
Thereafter, maintain at all times Net Worth measured on a monthly basis at
the
end of each month of not less than $28,000,000.00;
(e) Minimum
Debt Service Coverage Ratio.
Commencing
with the end of the first full fiscal year following the Start-Up Date, maintain
at all times after the Start-Up Date, a Debt Service Coverage Ratio of not
less
than 1.25 to 1.00 as calculated monthly; provided,
however,
the
failure of Borrower to maintain the required Debt Service Coverage Ratio shall
only be an Event of Default in the event Borrower fails to maintain the
requisite ratio in three (3) consecutive months, or more than four (4) times
in
a given twelve (12) month period;
(f) Minimum
Working Capital.
Maintain Working Capital as of the end of each month of not less than
$5,000,000.00 starting at the end of the second year following the Start-up
Date
and thereafter;
(g) Minimum
Equity Percentage.
Maintain a minimum equity to total assets percentage of greater than
35.0%;
(h) Landlord
and Mortgagee Waivers.
Obtain
and furnish to the Agent as soon as available, waivers, acknowledgments and
consents, duly executed by each: (i) real property owner, landlord and
mortgagee having an interest in any of the premises owned or leased by the
Borrower or in which any Collateral of the Borrower is located or to be located
(and if no Collateral of a Borrower is located at a parcel of property owned
or
leased by a Borrower, no such waivers, acknowledgments or consents will be
required); and (ii) each third party holding any Collateral, all in form
and substance acceptable to the Agent, except as otherwise agreed to by the
Agent;
(i) Insurance.
Maintain insurance with financially sound and reputable insurance companies
in
such amounts and covering such risks as are usually carried by entities engaged
in similar businesses and owning similar properties in the same general areas
in
which the Borrower operates, including product liability, provided that in
any
event the Borrower will maintain workers' compensation insurance, property
insurance, business interruption insurance and comprehensive general liability
insurance reasonably satisfactory to the Agent. Each insurance policy covering
Collateral shall be in compliance with the requirements of the Security
Agreement;
(j) Keeping
Books and Records.
Maintain proper books of record and account in which full, true, and correct
entries in all material respects and in conformity with generally accepted
accounting principles shall be made of all dealings and transactions in relation
to its business and activities;
42
(k) Warehouse
Receipts.
If any
warehouse receipt or receipts in the nature of a warehouse receipt is issued
in
respect of any portion of the Collateral, then the Borrower: (i) will not
permit such warehouse receipt or receipts in the nature thereof to be
“negotiable” as such term is used in Article 7 of the UCC; and (ii) will
deliver all such receipts to the Agent (or a Person designated by the Agent)
within five (5) days of the Agent's request and from time to time
thereafter. If no Event of Default exists, the Agent agrees to promptly deliver
to Borrower any receipt so held by the Agent upon such Borrower’s request in
connection with such Borrower’s sale or other disposition of the underlying
inventory, if such disposition is in ordinary course of such Borrower's
business;
(l) Maintain
Properties.
Maintain in good repair, working order and condition all material properties
used in the business of the Borrower;
(m) Collateral.
Keep
full and accurate books and records relating to the Collateral and pay for
the
costs of periodic audits of the Collateral to be conducted at Agent’s reasonable
discretion;
(n)
Construction
of Project.
Borrower
shall:
(i) diligently
proceed with construction of the Project in accordance with the Plans and
Specifications and in accordance with all applicable laws and ordinance and
will
complete the Project on or before the Completion Date;
(ii) use
the
proceeds of all Advances solely to pay the Project Costs;
(iii) use
its
best efforts to require the Contractor(s) to comply with all rules, regulations,
ordinances and laws relating to work on the Project;
(iv) obtain
the Agent’s prior written approval of any change in the Plans and Specifications
for the Project approved by the Agent which might materially adversely effect
the value of the Agent’s security, and has a cost of $100,000.00 or greater. The
Agent will have five (5) Business Days to evaluate any requests for its approval
of any changes referred to in this paragraph. The Agent may approve or
disapprove changes in its discretion. If it reasonably appears to the Agent
that
any change may increase the Project Costs, the Agent may require the Borrower
to
deposit additional funds with the Agent pursuant to the provisions of this
Agreement in an amount sufficient to cover the increased costs as a condition
to
giving its approval;
(v) comply
with and keep in effect all permits and approvals obtained from any Governmental
Authority required for the lawful construction of the Project. The Borrower
will
comply in all material respects with all applicable existing and future laws,
regulations, orders, and requirements of any Governmental Authority, judicial,
or legal authorities having jurisdiction over the Property or Project, and
with
all recorded restrictions affecting the Property;
43
(vi) furnish
to the Agent from time to time on request by the Agent, in a form acceptable
to
the Agent, correct lists of all contractors and subcontractors employed in
connection with construction of the Project and true and correct copies of
all
executed contracts and subcontracts. The Agent may contact any contractor or
subcontractor to verify any facts disclosed in the lists, and all contracts
and
subcontracts relating to construction of the Project must require the disclosure
of the listed information to the Agent;
(vii) not
purchase any materials, equipment, fixtures, or articles of personal property
placed in the Project prior to the Conversion Date under any security agreement
or other agreement where the seller reserves or purports to reserve title or
the
right of removal or repossession, or the right to consider them personal
property after their incorporation in the work of construction, unless
authorized by the Agent in writing;
(viii) provide
the Agent and its representatives with access to the Real Property and the
Project at any reasonable time and upon reasonable notice to enter the Real
Property and inspect the work or construction and all materials, plans,
specifications, and other matters relating to the construction, provided that
such persons do not interfere with construction and do comply with Borrower’s
reasonable rules and regulations. The Agent will also have the right to, at
any
reasonable time and upon reasonable notice, examine, copy, and audit the books,
records, accounting data, and other documents of the Borrower and all documents
or agreements between the Borrower and its contractors relating to the Property
or construction of the Project;
(ix) pay
and
discharge all claims and liens for labor done and materials and services
furnished in connection with the construction of the Project. The Borrower
will
have the right to contest in good faith any claim or lien, provided that it
does
so diligently and without prejudice to the Agent or the ability to obtain title
insurance in the manner required by this Agreement and the Construction
Disbursing Agreement. Upon the Agent’s request, the Borrower will promptly
provide a bond, cash deposit, or other security reasonably satisfactory to
the
Agent to protect the Agent’s interest and security should the contest be
unsuccessful;
(x) at
the
Agent’s request and expense, post signs on the Property for the purpose of
identifying the Agent as the “Lender” for the Project. At the request of the
Agent, the Borrower will use its best efforts to identify the Agent as the
lender for the Project in publicity concerning the Project;
(xi) maintain
in force until full payment of the Loan all insurance required by law, public
liability insurance, and Property insurance. The policies must be reasonably
approved by the Agent as to amounts, form, risk coverage, deductibles, insurer,
and loss payable and cancellation provision. The Agent’s approval, however, will
not be a representation of the solvency of any insurer or the sufficiency of
any
amount of insurance;
44
(xii) cooperate
at all times in all reasonable ways with the Agent in bringing about the timely
completion of the Project, and resolve all disputes arising during the work
of
construction in a manner which will allow work to proceed expeditiously. With
respect to such disputes, the Borrower will have the right to contest in good
faith claims resulting in disputes, provided that it does so diligently and
without prejudice to the Agent. Upon the Agent’s request, the Borrower will
promptly provide a bond, cash deposit, or other security reasonably satisfactory
to the Agent to protect the Agent’s interest and security should the contest be
unsuccessful;
(xiii) pay
the
Agent’s and the Disbursing Agent’s out-of-pocket costs and expenses incurred in
connection with the making or disbursement of the Loans or in the exercise
of
any of its rights or remedies under this Agreement, including but not limited
to
title insurance and escrow charges, disbursing agent fees, recording charges,
and mortgage taxes, reasonable legal fees and disbursements, and reasonable
fees
and costs for services which are not customarily performed by the Agent’s
salaried employees and are not specifically covered by the fees charged to
originate the Loan, if any. The provision of this paragraph will survive the
termination of this Agreement and the repayment of the Loan;
(xiv) keep
true
and correct financial books and records on a cash basis for the construction
of
the Project and maintain adequate reserves for all reasonably known or
anticipated contingencies. If required by the Agent, the Borrower will submit
to
the Agent at such times as it requires (which will in no event be more often
than monthly) a statement which accurately shows the application of all funds
expended to date for construction of the Project and the source of those funds
as well as the Borrower’s best estimate of the funds needed to complete the
Project and the source of those funds;
(xv) comply
in
all material respects with the requirements of any commitment or agreement
entered into by Borrower with any Governmental Authority to assist the
construction or financing of the Property and/or Project and with the terms
of
all applicable laws, regulations, and requirements governing such
assistance;
(xvi) indemnify
and hold the Agent harmless from and against all liabilities, claims, damages,
costs, and expenses (including but not limited to reasonable legal fees and
disbursements) arising out of or resulting from any defective workmanship or
materials occurring in the construction of the Project. Upon demand by the
Agent, the Borrower will defend any action or proceeding brought against the
Agent alleging any defective workmanship or materials, or the Agent may elect
to
conduct its own defense at the expense of the Borrower. The provisions of this
paragraph will survive the termination of this Agreement and the repayment
of
the Loan; and
45
(xvii) obtain
and deliver to the Agent copies of all necessary occupancy certificates relating
to the Project;
(o) Borrower’s
Equity.
Borrower shall ensure that all of Borrower’s Equity is contributed to Borrower
by its members upon the terms and conditions that such members have agreed
to
make a contribution to Borrower’s Equity and shall, upon the request of Agent,
provide Agent with an accounting of all equity contributions actually received
by Borrower;
(p) Marketing
Agreements.
Borrower shall promptly notify Agent of any Marketing Agreement entered into
between Borrower and any Marketing Agent. Borrower shall execute and deliver
to
Agent a collateral assignment of any such Marketing Agreement, in a form and
content satisfactory to Agent and its counsel and acknowledged by the Marketing
Agent; and
(q) Taxes.
Borrower shall cause to be paid, when due, all taxes, assessments and other
governmental charges upon its, income, sales, properties, and federal and states
taxes withheld from its employees’ earnings, unless (i) the failure to pay such
taxes, assessments or other governmental charges could not reasonably be
expected to result in a Material Adverse Effect, or (ii) such taxes, assessments
or other governmental charges are the subject of a good faith contest by the
Borrower.
Section
5.02. Negative
Covenants.
So long
as any of the Loan Obligations remain unpaid or the Agent shall have any
commitment hereunder, the Borrower will not, without the prior written consent
of the Agent:
(a) Liens,
etc.
Create
or suffer to exist, or permit any of its subsidiaries to create or suffer to
exist, any lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its properties,
whether now owned or hereafter acquired, or assign, or permit any of its
subsidiaries to assign, any right to receive income, in each case to secure
any
Debt of any Person, other than the following liens (“Permitted
Liens”):
(i) those
described on Schedule 5.02(a)
hereto
and renewals and extensions on the same or substantially the same terms and
conditions and at no increase in the debt or obligation;
(ii) liens
or
security interests which are subject to an intercreditor agreement in form
and
substance acceptable to Agent in Agent's sole discretion;
(iii) the
liens
or security interests of the Deed of Trust and the Security
Agreement;
46
(iv) mechanics'
and materialmen's liens for immaterial sums which are either (x) not yet
due and payable or (y) being contested in good faith by appropriate
proceedings which serve to stay the foreclosure of such liens and as to which
appropriate reserves have been established;
(v) liens
(other than liens relating to environmental liabilities or ERISA) for taxes,
assessments, or other governmental charges that are not more than 30 days
overdue or, if the execution thereof is stayed, which are being contested in
good faith by appropriate proceedings diligently pursued and for which adequate
reserves have been established;
(vi) liens
of
warehousemen, carriers, landlords, feeders, or other similar statutory or common
law liens securing obligations that are not yet due and are incurred in the
ordinary course of business or, if the execution thereof is stayed, which are
being contested in good faith by appropriate proceedings diligently pursued
and
for which adequate reserves have been established in accordance with generally
accepted accounting principles;
(vii) liens
resulting from good faith deposits to secure payments of workmen's compensation
unemployment insurance, or other social security programs or to secure the
performance of tenders, leases, statutory obligations, surety, customs and
appeal bonds, bids or contracts (other than for payment of Debt);
(viii) any
attachment or judgment lien not constituting an Event of Default;
(ix) liens
arising from filing UCC financing statements regarding leases (including Capital
Leases) not prohibited by this Agreement;
(x) customary
offset rights of brokers and deposit banks arising under the terms of securities
account agreements and deposit agreements; and
(xi) any
real
estate easements and easements, covenants and encumbrances that customarily
do
not affect the marketable title to real estate or materially impair its use
or
are disclosed in the Title Commitment and not objected to by Agent;
or
(b) Distributions,
etc.
Declare
or pay any distributions or dividends, purchase, redeem or otherwise acquire
for
value any of its membership interests now or hereafter outstanding, or make
any
distribution of assets to its stockholders, members or general partners as
such,
or permit any of its subsidiaries to purchase, redeem or otherwise acquire
for
value any stock, membership interests or partnership interests of the Borrower,
provided, however, the Borrower may, (i) so long as the Borrower is classified
as an S corporation or partnership for federal income tax purposes, and (ii)
so
long as the Borrower first provides such supporting documentation as the Agent
may reasonably request with respect to any fiscal year of the Borrower, the
Borrower may pay aggregate cash distributions, during such fiscal year in an
amount not to exceed the amount necessary for the members of the Borrower to
pay
his or her Income Taxes on such Person’s allocable share of the taxable income
of the Borrower for such taxable year or fiscal year, as applicable, in an
amount not to exceed 65.0% of Borrower’s Net Income (“Distributions”)
(provided, however, that this restriction will expire at the end of the third
operational year of the Borrower after the Start-up Date if the Borrower then
has a minimum Working Capital of not less than $10,000,000.00).
47
(c) Capital
Expenditures; Capital Leases.
After 18
months after the Start-Up Date, make any investment in fixed assets or enter
into any Capital Leases in an aggregate amount greater than $3,000,000.00 during
any fiscal year; or
(d) Consolidation,
Merger, Dissolution, Etc.
Directly
or indirectly, merge or consolidate with any other Person or permit any other
Person to merge into or with or consolidate with the Borrower; or
(e) Indebtedness,
etc.
Create,
incur, assume or suffer to exist any Debt or other indebtedness, liabilities
or
obligations, whether matured or unmatured, liquidated or unliquidated, direct
or
contingent, joint or several, except: (i) the liabilities of the Borrower
to the Banks hereunder; (ii) trade accounts payable and accrued liabilities
(other than Debt) arising in the ordinary course of the Borrower's business;
(iii) Subordinated Debt; (iv) the liabilities of the Borrower described on
Schedule 5.02(a)
or
permitted by Section
5.02(c);
and
other unsecured Debt not to exceed in the aggregate $500,000.00 at any time
outstanding; or
(f) Organization;
Name; Chief Executive Office.
Change
its state of organization, name or the location of its chief executive office
without the prior written consent of the Agent; or
(g) Loans,
Guaranties, etc.
Make
any loans or advances to (whether in cash, in-kind, or otherwise) any Person,
or
directly or indirectly guaranty or otherwise assure a creditor against loss
in
respect of any indebtedness, obligations or liabilities (contingent or
otherwise) of any Person in excess of $100,000.00 at any time outstanding;
or
(h) Subsidiaries;
Affiliates.
Form
or
otherwise acquire any subsidiary or affiliated business, or acquire the assets
of or acquire any equity or ownership interest in any Person, unless such
subsidiary, affiliate or Person executes and delivers to the Agent: (i) a
guaranty of all of the Loan Obligations, in form and substance acceptable to
the
Agent in its sole discretion; (ii) security agreements in form substantially
similar to the Security Agreement; and (iii) such other documents and amendments
to this Agreement and the other Loan Documents as the Agent shall require;
or
(i) Transfer
of Assets.
Sell,
lease, assign, transfer, or otherwise voluntarily dispose of any of its assets,
or permit any of its subsidiaries to sell, lease, assign, transfer, or otherwise
voluntarily dispose of any of its assets except: (i) dispositions of
Inventory in the ordinary course of business; and (ii) dispositions of:
(A) obsolete or worn out equipment; (B) equipment or real property not
necessary for the operation of its business; or (C) equipment or real
property which is replaced with property of equivalent or greater value as
the
property which is disposed; or
48
(j) Lines
of Business.
Engage
in
any line or lines of business activity other than the production and sale of
ethanol and DGS or related products from ethanol production; or
(k) Investments.
Own,
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to any person, except that the
Borrower may own, purchase or acquire:
(i)
Commercial
paper maturing not in excess of one (1) year from the date of acquisition and
rated “P1” by Xxxxx’x Investors Service, Inc. or “A1” by Standard & Poor’s
Corporation on the date of acquisition;
(ii) Certificates
of Deposit in North American commercial banks rated “C” or better by Xxxxx,
Buryette and Xxxxx, Inc., or “3” or better by Xxxxx Consulting and Analysts,
maturing not in excess of one (1) year from the date of
acquisition;
(iii) Obligations
of the United States government or any agency thereof, the obligations of which
are guaranteed by the United States government, maturing, in each case, not
in
excess of one (1) year from the date of acquisition; and
(iv) Repurchase
agreements of any bank or trust company incorporated under the law of the United
States of America or any state thereof and fully secured by a pledge of
obligations issued or fully and unconditionally guaranteed by the United States
government.
(l) Change
of Control.
(i) Replace
the Chief Executive Officer or the Chief Financial Officer of the Borrower
without providing written notice to the Agent within thirty (30) days of such
replacement; or
(ii) Permit
a
change in the ownership of the Borrower other than a transfer of not more than
fifteen percent (15%) of the Membership Interest in Borrower in the aggregate
in
any one calendar year, to existing Members or family members of existing
Members; or
(iii) Permit
Xxx-Xxxxxxx’x membership interest in Borrower to, at any time, be less than ten
percent (10%) of the total outstanding Membership Interest in
Borrower.
49
ARTICLE
VI.
EVENTS
OF DEFAULT AND REMEDIES
Section
6.01. Events
of Default.
Each of
the following events shall be an “Event
of Default”:
(a) The
Borrower shall fail to pay any installments of principal or interest, fees,
expenses, charges or other amounts payable hereunder or under the other Loan
Documents or to make any deposit of funds required under this Agreement when
due
and such failure continues for 3 days after written notice shall have been
given
to the Borrower by the Agent; or
(b) Any
representation or warranty made by the Borrower, or any of its officers or
directors under or in connection with any Loan Document shall prove to have
been
incorrect in any material respect when made which shall not be cured within
five
(5) days after written notice shall have been given to the Borrower by the
Agent; or
(c) The
Borrower shall fail to perform or observe any term, covenant or agreement
contained in Sections
5.01(d),
(f),
(g),
or
Sections 5.02(a)
through
Sections
5.02(k)
which
shall not be cured within thirty (30) days after written notice shall have
been
given to the Borrower by the Agent; or
(d) The
Borrower shall fail to meet and maintain the requirements set forth in
Section
5.01(e); or
(e) The
Borrower shall fail to deliver the financial statements or Compliance
Certificate under Section 5.01(c)
within
five (5) days of the date due and such failure continues to five (5) days after
written notice shall have been given to the Borrower by the Agent;
or
(f) The
Borrower shall fail to perform or observe any term, covenant or agreement
contained in any Loan Document (other than those listed in clauses (a)
through (d) of this Section 6.01)
on its
part to be performed or observed (other than the covenants to pay the Loan
Obligations) and any such failure shall remain unremedied for ten (10) days
after written notice thereof shall have been given to the Borrower by the Agent,
provided,
however,
that no
Event of Default shall be deemed to exist if, within said ten (10) day period,
Borrower has commenced appropriate action to remedy such failure and shall
diligently and continuously pursue such action until such cure is completed,
unless such cure is or cannot be completed within thirty (30) days after written
notice shall have been given; or
(g) The
Borrower shall fail to pay any indebtedness in an amount in excess of
$100,000.00 (either in any individual case or in the aggregate) excluding
indebtedness evidenced by the Notes and excluding Ordinary Trade Payable
Disputes, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified
in
the agreement or instrument relating to such indebtedness; or any other default
under any agreement or instrument relating to any such indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such indebtedness (excluding Ordinary Trade Payable Disputes); or any such
indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof (excluding Ordinary Trade Payable Disputes); or
50
(h) The
Borrower shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any
law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted against it (but
not
instituted by it) either such proceeding shall remain undismissed or unstayed
for a period of thirty (30) days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against it
or
the appointment of a receiver, trustee, custodian or other similar official
for
it or for any substantial part of its property) shall occur; or the Borrower
shall take any corporate action to authorize any of the actions set forth above
in this subsection; or
(i) Any
one
or more uninsured judgment(s) or order(s) for the payment of money in excess
of
$100,000.00 in the aggregate shall be rendered against the Borrower and either:
(i) enforcement proceedings shall have been commenced by any creditor upon
such judgment or order; or (ii) there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect;
or
(j) Any
provision of any Loan Document shall for any reason cease to be valid and
binding on the Borrower or the Borrower shall so state in writing;
or
(k) Any
of
the Loan Documents shall for any reason, except to the extent permitted by
the
terms thereof, cease to create a valid lien, encumbrance or security interest
in
any of the property purported to be covered thereby; or
(l) Any
Event
of Default under the Construction Disbursing Agreement which has not been cured
within any applicable periods provided in the Construction Disbursing Agreement;
or
51
(m) The
Borrower dissolves, suspends, or discontinues doing business; or
(n) Construction
of the Project is halted or abandoned prior to completion for any period of
thirty (30) consecutive days for any cause which is not beyond the reasonable
control of the Borrower; or
(o) The
construction of the Project shall be delayed for any reason and for such period
that, in the reasonable judgment of the Agent and confirmed in writing by the
Consulting Engineer, the Project will not be completed by the Completion Date.
If such delay is curable and if Borrower has not been given a notice of a
similar breach within the preceding twelve (12) months, it may be cured (and
no
Event of Default will have occurred) if Borrower cures the failure within thirty
(30) days, which shall include advancing the progress of the Project to the
point that, in the reasonable judgment of the Agent, the Project will be
completed by the Completion Date; or
(p) A
declared event of default with respect to any other indebtedness of Borrower
in
excess of $100,000, including any working capital loan, member loan agreements,
or public financing obtained by the Borrower which has not been cured within
any
applicable cure periods; or
(q) Any
material adverse change in the condition, financial or otherwise, of the
Borrower; or
(r) Any
government action specific to the Borrower, the effect of which may have a
Material Adverse Effect on the Borrower; or
(s) Any
default by Borrower under the terms of the Revolving Credit
Facility.
Section
6.02. Remedies.
Upon
the occurrence of an Event of Default and during the continuance thereof, the
Agent:
(a) may,
by
notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Notes, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, notice of intent to accelerate or notice
of acceleration, demand, protest or further notice of any kind, all of which
are
hereby expressly waived by the Borrower; provided,
however,
that in
the event of an actual or deemed entry of an order for relief with respect
to
any of the Borrower or any of its subsidiaries under the Federal Bankruptcy
Code, the Notes, all such interest and all such amounts shall automatically
become due and payable, without presentment, demand, protest or any notice
of
any kind, all of which are hereby expressly waived by the Borrower;
(b) may
withhold or direct the Disbursing Agent to withhold any one or more Advances
in
its discretion, and terminate the Agent’s obligations, if any, under this
Agreement to make any Advances whereupon the commitment and obligations of
the
Agent to extend credit or to make Advances hereunder shall terminate, and no
disbursement of Loan funds by the Agent will cure any default of the Borrower,
unless the Agent agrees otherwise in writing;
52
(c) may,
by
notice to the Borrower, obtain the appointment of a receiver to take possession
of all Collateral of the Borrower, including, but not limited to all personal
property, and all ethanol production, fixtures and equipment leased, occupied
or
used by the Borrower. Borrower hereby irrevocably consents to the appointment
of
such receiver and agrees to cooperate and assist any such receiver as reasonably
requested to facilitate the transfer of possession of the Collateral to such
receiver and to provide such receiver access to all books, records, information
and documents as requested by such receiver;
(d) in
its
discretion enter the Real Property and take any and all actions necessary in
its
judgment to complete construction of the Project, including but not limited
to
making changes in Plans and Specifications, work or materials, and entering
into, modifying, or terminating any contractual arrangements, subject to the
Agent’s right at any time to discontinue any work without liability. If the
Agent elects to complete the Project, it will not assume any liability to the
Borrower or any other person for completing the Project or for the manner or
quality of construction of the Project, and the Borrower expressly waives any
such liability. The Borrower irrevocably appoints the Agent as its
attorney-in-fact, with full power of substitution, to complete the Project
in
the Borrower’s name, or the Agent may elect to complete construction in its own
name. In any event, all sums expended by the Agent in completing construction
will be considered to have been disbursed to the Borrower and will be secured
by
the Deed of Trust and any other instruments or documents securing the Loans,
and
any such sums that cause the principal amount of the Loans to exceed the face
amount of the Notes will be considered to be an additional loan to the Borrower
bearing interest at the rate provided in the Notes and will be secured by the
Deed of Trust and any other instrument or documents securing the Loans. The
Agent will not have any obligation under the Plans and Specifications prepared
for the Project, any studies, data, and drawings with respect thereto prepared
by or for Borrower, or the contracts and agreements relating to the Plans and
Specifications, or the aforesaid studies, data, and drawings, or to the
construction of the Project unless it expressly hereafter agrees in writing.
The
Agent will have the right to exercise any rights of the Borrower under those
contracts and agreements or with respect to such Plans and Specifications,
studies, data, and drawings upon any default by the Borrower under this
Agreement, and shall have such other rights and remedies with respect thereto
as
are afforded a secured creditor under applicable law; and
(e) may
exercise all other rights and remedies afforded to the Agent under the Loan
Documents or by applicable law or equity.
Section
6.03. Remedies
Cumulative.
Each and
every power or remedy herein specifically given shall be in addition to every
other power or remedy, existing or implied, given now or hereafter existing
at
law or in equity, and each and every power and remedy herein specifically given
or otherwise so existing may be exercised from time to time and as often and
in
such order as may be deemed expedient by Agent, and the exercise or the
beginning of the exercise of one power or remedy shall not be deemed a waiver
of
the right to exercise at the same time or thereafter any other power or remedy.
No delay or omission of Agent in the exercise of any right or power accruing
hereunder shall impair any such right or power or be construed to be a waiver
of
any default or acquiescence therein.
53
ARTICLE
VII.
THE
AGENT
Section
7.01. Authorization
and Action.
Each
Bank hereby appoints and authorizes the Agent to take such action as agent
on
its behalf and on behalf of each of its Affiliates who are owed Loan Obligations
(each such Affiliate by acceptance of the benefits of the Loan Documents hereby
ratifying such appointment) and to exercise such powers under this Agreement
as
are delegated to the Agent by the terms hereof, together with such powers as
are
reasonably incidental thereto. As to any matters not expressly provided for
by
this Agreement (including, without limitation, enforcement or collection of
the
Notes), the Agent shall not be required to exercise any discretion or take
any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions
of
the Required Banks; provided,
however,
that
the Agent shall not be required to take any action which exposes the Agent
to
personal liability or which is contrary to this Agreement or applicable
law.
Section
7.02. Duties
and Obligations.
Neither
the Agent nor any of its directors, officers, agents, or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement except for its or their own gross negligence
or
willful misconduct. Without limitation of the generality of the foregoing,
the
Agent: (i) may treat the Banks as the parties entitled to distributions
hereunder unless and until the Agent receives written notice and evidence
satisfactory to it, to the contrary; (ii) may consult with legal counsel
(including counsel for Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) shall not by reason of any of the Related
Documents be a trustee or fiduciary for any Bank; and (iv) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
cable, telex or facsimile) believed by it to be genuine and signed or sent
by
the proper party or parties or by acting upon any representation or warranty
of
Borrower made or deemed to be made hereunder. Further, the Agent: (A) makes
no warranty or representation to any Bank and shall not be responsible to any
Bank for the accuracy or completeness of any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (B) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of Borrower or to inspect the property (including the
books and records) of Borrower; and (C) shall not be responsible to any
Bank for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto.
54
Section
7.03. Agent
and Affiliates.
With
respect to its Commitment, the Advances made by it and the Notes issued to
it,
the Agent shall have the same rights and powers under this Agreement as the
other Banks and may exercise the same as though it were not the Agent; and
the
term “Bank” or “Banks” shall, unless otherwise expressly indicated, include the
Agent in its capacity as a Bank. FCS and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage
in
any kind of business with, Borrower, all as if FCS were not the Agent hereunder
and without any duty to account therefore to the Banks.
Section
7.04. Bank
Credit Decision.
It is
understood and agreed by each Bank that it has itself been, and will continue
to
be, solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Borrower and the Collateral. Accordingly,
each
Bank confirms to the Agent that such Bank has not relied, and will not hereafter
rely, on the Agent: (i) to check or inquire on its behalf into the
adequacy, accuracy or completeness of any information provided by Borrower
under
or in connection with this Agreement, the Loan Documents or the transactions
herein or therein contemplated (whether or not such information has been or
is
hereafter distributed to such Bank by the Agent); or (ii) to assess or keep
under review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of Borrower or any collateral provided to secure
the
obligations of the Borrower under the Loan Documents. Each Bank acknowledges
that a copy of the Loan Documents have been made available to it and to its
individual legal counsel for review and such Bank acknowledges that it is
satisfied with the form and substance of the Loan Documents.
Section
7.05. Indemnification.
The
Banks agree to indemnify the Agent (to the extent not reimbursed by the
Borrower), ratably according to their Pro Rata Shares, from and against any
and
all liabilities, obligations, losses, damages, penalties, actions, judgment,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of the Loan Documents or the Loan Obligations or
any
action taken or omitted by the Agent under this Agreement, provided that no
Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. Without
limiting the generality of the foregoing, each Bank agrees to reimburse the
Agent promptly upon demand for any reasonable out-of-pocket expenses (including
reasonable counsel fees) incurred by the Agent in connection with the
preservation of any rights of the Agent or the Banks under, or the enforcement
of, or legal advice in respect of rights or responsibilities under, the Loan
Documents, to the extent that the Agent is not reimbursed for such expenses
by
the Borrower.
Section
7.06. Successor
Agent.
The
Agent may resign at any time by giving written notice thereof to the Banks
and
the Borrower. If no successor Agent shall have been appointed by the Banks,
and
shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be either a Bank or a
bank
reasonably acceptable to the Borrower organized under the laws of the United
States or of any state thereof, or any affiliate of such bank, and having a
combined capital and surplus of at least One Billion Dollars
($1,000,000,000.00). Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
under
this Agreement. After any retiring Agent's resignation hereunder as Agent,
the
provision of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement.
55
Section
7.07. Exchange
of Information.
Each
Bank and the Agent shall freely exchange with the other Banks and/or Agent
any
information relating to the condition, financial or otherwise, of the Borrower,
and the Borrower hereby consents to any and all prior, present or future such
exchanges.
Section
7.08. Benefit
of the Banks Only.
The
terms and provisions of this Article VII are for the sole and exclusive
benefit of the Agent and the Banks, and not for the benefit of Borrower.
Section
7.09. Authorized
Actions.
Agent
is irrevocably authorized by the Banks, without any further action by any Bank,
to release the Agent's liens in Collateral: (i) if such Collateral is
permitted to be sold or otherwise disposed of hereunder, (ii) if the book value
of such Collateral is $1,000,000.00 or less, and (iii) upon termination of
the Commitments and payment and satisfaction of all other non-contingent
obligations of the Borrower under the Loan Documents.
ARTICLE
VIII.
MISCELLANEOUS
Section
8.01. Amendments,
etc.
No
amendment or waiver of any provision of any Loan Document to which Borrower
is a
party, nor any consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Banks and the Borrower, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided
that no
amendment, waiver, or consent shall, without the consent of all Banks, do any
of
the following: (i) increase the Commitment of any Bank; (ii) reduce the
amount owed to a Bank or reduce the rate of interest thereon, or reduce any
fees
payable to a Bank hereunder; (iii) postpone the scheduled date of payment
of any amount owed to a Bank, or waive or excuse any such payment, or postpone
the scheduled date of expiration of such Bank's Commitment; (iv) change any
of the provisions of this Section or the definition of “Required Banks” or any
other provision of any Loan Document specifying the number or percentage of
Banks required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder; (v) change the definitions
of the term “Loan Obligations” or “Bank”; or (vi) except as permitted by
Section 7.09,
release
any Collateral or release Borrower from liability. Notwithstanding anything
to
the contrary contained in this Section, no amendment, waiver, or consent shall
be made with respect to Article VII hereof or any other provision which
affects the rights or obligations of the Agent without the prior written consent
of the Agent.
56
Section
8.02. Notices,
etc.
All
notices and other communications provided for under any Loan Document shall
be
in writing and mailed, faxed, or delivered at the addresses set forth below,
or
at such other address as such party may specify by written notice to the other
parties hereto:
If
to the Borrower:
|
|
000
Xxxx Xxxx
|
|
Xxxx
Xxxxxx Xxx 000
|
|
Xxxxxxxx,
Xxxxxxxx 00000
|
|
Attention:
Xxxx Xxxxxxxx
|
|
Telephone:
(000) 000-0000
|
|
Facsimile:
(000) 000-0000
|
|
With
a copy to:
|
Xxxxx
Xxxx LLP
|
3500
One Kansas City Place
|
|
0000
Xxxx Xxxxxx
|
|
Xxxxxx
Xxxx, XX 00000
|
|
Telephone:
(000) 000-0000
|
|
Facsimile:
(000) 000-0000
|
|
Attention:
Xxxxx X. Xxxx
|
|
If
to the Agent:
|
FCS
Financial, PCA
|
Capital
Markets Group
|
|
Xxxxx
Xxxx Xxxxx Xxxxx, Xxxxx 000
|
|
Xx.
Xxxxx, XX 00000
|
|
Telephone:
000-000-0000
|
|
Facsimile:
000-000-0000
|
|
Attention:
Xxx Xxxxx
|
|
With
a copy to:
|
Husch
& Eppenberger, LLC
|
0000
X. Xxxxxxxx Xx., Xxxxx 0-000
|
|
Xxxxxxxxxxx,
XX 00000
|
|
Telephone:
(000) 000-0000
|
|
Facsimile:
(000) 000-0000
|
|
Attention:
Xxxx X. Xxxxxx
|
If
to a
Bank: At the address or addresses, as the case may be, Agreement or the then
most recent Bank Supplement to which such Bank is a party.
All
such
notices and communications shall have been duly given and shall be effective:
(i) when delivered; (ii) when transmitted via facsimile to the number set forth
above; (iii) the Business Day following the day on which the same has been
delivered prepaid (or pursuant to an invoice arrangement) to a reputable
national overnight air courier service; or (iv) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid. Any confirmation sent by the Agent or any Bank to Borrower of borrowing
under this Agreement shall, in the absence of error, be conclusive and binding
for all purposes.
57
Section
8.03. No
Waiver; Remedies.
No
failure on the part of the Agent or any Bank to exercise, and no delay in
exercising, any right under any Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in the Loan Documents are cumulative and not
exclusive of any remedies provided by law.
Section
8.04. Costs,
Expenses and Taxes.
(a) The
Borrower agrees to pay on demand all costs and expenses in connection with
the
preparation, execution, delivery, filing, recording and administration of the
Loan Documents and the other documents to be delivered under the Loan Documents,
including, without limitation, (i) the reasonable fees and out-of-pocket
expenses of counsel for the Agent and the Banks, and local counsel who may
be
retained by said counsel, with respect thereto and with respect to advising
the
Agent and Banks as to their respective rights and responsibilities under the
Loan Documents; (ii) all costs and expenses (including reasonable counsel fees
and expenses) for the Agent in connection with the filing of the Financing
Statements and the enforcement of the Loan Documents and the other documents
to
be delivered under the Loan Documents, including, without limitation, in the
context of any bankruptcy proceedings; (iii) all fees, costs and expenses
incurred by the Agent in connection with the Title Insurance; (iv) all fees,
costs and expenses of the Disbursing Agent; (v) all fees, costs and expenses
of
the Consulting Engineer; and (vi) all fees, costs and expenses of any appraiser
engaged by the Agent. In addition, the Borrower agrees to pay on demand the
expenses described in Section 5.01(b)
which
are the responsibility or obligation of Borrower and any and all stamp and
other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the Loan Documents and the other
documents to be delivered under the Loan Documents, and agrees to save the
Agent
and the Banks harmless from and against any and all liabilities with respect
to
or resulting from any delay in paying or omission to pay such taxes and
fees.
(b) If,
due
to payments made by a Borrower pursuant to Section 2.07(d)
or due
to acceleration of the maturity of the Advances pursuant to Section 6.01
or due
to any other reason, the Agent or any Bank receives payments of principal upon
which interest is based upon the LIBOR Rate other than on the last day of an
Interest Period relating thereto, the Borrower shall pay to the Bank on demand
any amounts required to compensate the Agent or such Bank, as the case may
be,
for any additional losses, costs or expenses which it may incur as a result
of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or
reemployment of deposits or other funds acquired by the Agent or such Bank,
as
the case may be, to fund or maintain such Loan.
Section
8.05. Right
of Set-Off.
Each
Bank is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general
or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Agent and/or such Bank to or for the
credit or the account of Borrower against any and all of the Loan Obligations,
irrespective of whether or not such Bank shall have made any demand under such
Loan Document and although deposits, indebtedness or such obligations may be
unmatured or contingent. The Agent and each Bank, as the case may be, agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Banks under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Agent and the Banks may have. Each Bank agrees
that
for the benefit of each of the other Banks and the Agent (but not for the
benefit of the Borrower) that such Bank shall not exercise any of the set-off
rights described in this Section 8.05
unless:
(i) at the time of the taking of such action there had occurred an Event of
Default which was continuing; and (ii) such Bank had notified the Agent of
such Bank's intention to take such action and such Bank had received the Agent's
written consent to the taking of such action (unless such notice and consent
requirement is waived by the Agent in its sole discretion).
58
Section
8.06. Severability
of Provisions.
Any
provision of this Agreement or of any other Loan Document which is prohibited
or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof or thereof or affecting the validity or
unenforceability of such provision in any other jurisdiction.
Section
8.07. Binding
Effect; Successors and Assigns; Participations.
(a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Agent and the Banks and their respective successors and assigns, except that
Borrower shall not have the right to assign or otherwise transfer its rights
hereunder or any interest herein without the prior written consent of the
Banks;
(b) Each
Bank
shall have the right at any time, with the written consent of Agent and
Borrower, to assign, negotiate, hypothecate, or otherwise transfer all or any
portion of its rights in this Agreement or in its Notes, participation
obligations and interests, rights and security under this Agreement and any
of
the other Loan Documents to either one or more of its Affiliates which is a
commercial banking or financial institution or to one or more of the Banks,
and
in the event of the exercise of such right shall promptly notify the Agent
and
the other Banks thereof. Furthermore, each Bank shall have the right at any
time, with the written consent of the Agent and the Required Banks and, so
long
as the Borrower is not in default hereunder, with the written consent of the
Borrower, to assign all or any portion of its rights in this Agreement or in
any
of its Commitment, Advances, Notes, participation obligations and interests,
rights and security under this Agreement and any of the other Loan Documents
to
any other commercial, banking or financial institution. Each Bank so assigning
its Notes, participation obligations and interests, rights and security under
this Agreement or any of the other Loan Documents shall, promptly upon request
by the Agent, execute and deliver, and cause such assignee to execute and
deliver, such documents and instruments reasonably requested by the Agent
(collectively, a “Bank
Supplement”)
to
evidence such assignment or other transfer and to substitute the assignee as
a
Bank on all of the Loan Documents and shall pay the Agent the Assignment Fee.
Furthermore, the Agent shall have the right, in its sole discretion, with the
consent of the Borrower and the Required Banks, to permit one or more additional
commercial, banking or financial institutions to become a Bank under this
Agreement (whether by such institution establishing a new commitment with the
Borrower, merging or otherwise combining all or any portion of any separate
funded or unfunded commitment and/or other credit facility that such institution
at such time has with Borrower with the commitments and credit facilities of
the
Banks under this Agreement, or in such other manner as is approved by the
Agent), and pursuant thereto may increase the aggregate amount of the
Commitments to include such additional institution the commitments and/or other
credit facilities of such additional institution with Borrower. Each commercial,
banking or financial institution which becomes a Bank under this Agreement
under
the circumstances described in the immediately preceding sentence shall execute
such documents and instruments required by the Agent to evidence the same,
and
such documents and instruments under such circumstances shall also constitute
a
“Bank Supplement” for purposes of this Agreement. The Borrower hereby
acknowledges and agrees that any assignment or other arrangement described
in
this Section 8.07
will
give rise to a direct obligation of the Borrower to assignee or additional
commercial banking or financial institutional, as the case may be, and such
party shall be considered a Bank and rely on, and possess all rights under,
all
opinions, certificates or other instruments delivered under or in connection
with this Agreement or any other Loan Document. The Borrower shall accord full
recognition to any such assignment or other arrangement, and all rights and
remedies of such Bank in connection with the interest so assigned shall be
as
fully enforceable by such assignee or additional commercial, banking or
financial institution, as they were: (a) by the assignor or Bank thereof
before such assignment; or (b) in the case of an additional commercial,
banking or financial institution becoming a Bank under the circumstances
described above in this Section 8.07,
by a
Bank that was a party to this Agreement on the date hereof;
59
(c) Each
Bank
shall have the right at any time, with the written consent of Agent and Borrower
and upon payment of a participation fee to Agent in an amount determined by
Agent in its sole discretion, to sell participations in all or any portion
of
its rights in this Agreement or its Notes, participation obligations and
interests, rights and security under this Agreement and any of the other Loan
Documents to any other party, provided,
that,
no
consent and no participation fee shall be required for a sale of a participation
by a Bank to its Affiliate(s), but each Bank shall be required to provide
written notice to Agent within thirty (30) days prior to the sale of any
participation to its Affiliate(s). The Banks specifically acknowledge and agree
that in the event of the sale of any participation of a Bank’s interest in this
Agreement or the Notes, that: (i) such Bank's obligations under the Loan
Documents (including, without limitation, its Commitments) shall remain
unchanged; (ii) the Borrower shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under
the
Loan Documents; and (iii) such Bank shall not sell a participation that
conveys to the participant the right to vote or give or withhold consents under
any Loan Document, other than the right to vote upon or consent to: (A) any
increase of such Bank's Commitments subject to such participation; (B) any
reduction of the principal amount of, or interest to be paid on, the Loan
Obligations of such Bank subject to such participation; (C) any reduction
of any commitment fee, letter of credit fee, or other amount payable to such
Bank under any Loan Document; (D) any postponement of any date for the
payment of any amount payable in respect of the Advances subject to such
participation or other Loan Obligations of such Bank; or (E) the release of
any Collateral or the release of Borrower from liability arising under the
Loan
Documents;
60
(d) In
connection with any such proposed assignment, negotiation, hypothecation,
granting of a participation or other transfer or arrangement, the Agent and
any
such Bank or Banks, as the case may be, may disclose to the proposed assignee,
participant or other transferee or institution any information that Borrower
is
required to deliver to the Agent and/or the Banks pursuant to this Agreement
or
the other Loan Documents, and each Borrower agrees to cooperate fully with
the
Agent and the Banks, as the case may be, in providing any such information
to
any proposed assignee, participant or other transferee or institution;
and
(e) If
requested by the Agent, any assignor or transferor Bank, or any assignee or
other transferee or institution, the Borrower shall execute and deliver:
(a) to such assignor or transferor Bank a promissory note or substitute
promissory note, as the case may be, in substantially the form of Exhibit D,
as
applicable, payable to the order of such assignor or transferor Bank in the
principal amount of the retained Commitment, if any, of such assignor or
transferor Bank in respect of such assignment or transfer; and (b) to such
assignee or other transferee a promissory note, in substantially the form of
Exhibit D,
as
applicable, payable to the order of the assignee or other transferee in the
principal amount of the assigned or transferred Commitment of such assignee
or
other transferee in respect of such assignment or transfer. The assignor or
transferor Bank agrees to deliver the Note being substituted in accordance
with
the forgoing provisions to the Borrower.
Section
8.08. Consent
to Jurisdiction.
(a) Borrower
hereby irrevocably submits to the jurisdiction of any Missouri State court
sitting in Xxxxxx County, Missouri, or Federal court sitting in Springfield,
Xxxxxx County, Missouri, in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents to which it is a party,
and
Borrower hereby irrevocably agrees that all claims in respect of such action
or
proceeding may be heard and determined in such Missouri State court or in such
Federal court. Borrower hereby irrevocably waives, to the fullest extent it
may
effectively do so, the defense of an inconvenient forum to the maintenance
of
such action or proceeding. Borrower irrevocably consents to the service of
copies of the summons and complaint and any other process which may be served
in
any such action or proceeding by the mailing of copies of such process to the
Borrower at its address specified in Section 8.02.
Borrower agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law.
61
(b) Nothing
in this Section 8.08
shall
affect the right of the Agent or any Bank to serve legal process in any other
manner permitted by law.
Section
8.09. Governing
Law.
THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF MISSOURI.
Section
8.10. Banks'
Obligations Several, Not Joint.
The
obligations of the Banks under this Agreement and the other Loan Documents
are
several, and are not joint. No Bank nor the Agent shall be responsible or liable
in any way for the failure or refusal of any other Bank to make any Advance
to
be made by any other Bank, or for any other obligations of any other
Bank.
Section
8.11. Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts and on facsimile
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute but one and the same
agreement.
Section
8.12 Attorneys’
Fees and Costs.
If at
any time or times hereafter the Agent employs counsel in connection with
protecting or perfecting the Agent’s security interest in the Collateral or in
connection with any matters arising out of this Agreement or any of the Loan
Documents, whether (a) to commence, defend, or intervene in any litigation
or to
file a petition, complaint, answer, motion or other pleading; (b) to take any
other action in or with respect to any suit or proceeding (bankruptcy or
otherwise); (c) to consult with officers of the Agent, to advise the Agent
or to
draft documents in connection with any of the foregoing or in connection with
any release of the Agent’s claims or the Agent’s Security Interests or any
proposed extension, amendment or refinancing of the Loan Obligations; (d) to
protect, collect, lease, sell, take possession of, or liquidate any of the
Collateral; or (e) to attempt to enforce or to enforce any Security Interest
in
any of the Collateral, or to enforce any rights of the Agent to collect any
of
the Loan Obligations; then in any of such events, all of the reasonable
attorneys’ fees arising from such services, and any expenses, costs and charges
relating thereto, incurred by the Agent, including, without limitation, all
reasonable fees of all paralegals, legal assistants and other staff employed
by
such attorneys, together with interest at the Default Rate (if an Event of
Default has occurred) or at the Maximum Rate set forth in any Note, shall
constitute additional Loan Obligations, payable on demand by the Borrower and
secured by the Collateral.
Section
8.13 Indemnification
(a) General.
Borrower
agrees to indemnify and hold the Agent and each Bank and their directors,
officers, employees, agents and representatives (“Indemnified
Parties”)
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses whatsoever which the Agent or any other Indemnified Party
may
incur (or which may be claimed against such Indemnified Party by any person),
including attorneys’ fees incurred by any Indemnified Party, arising out of or
resulting from: (1) the material inaccuracy of any representation or warranty
of
or with respect to Borrower in this Agreement or the other Loan Documents;
(2)
the material failure of Borrower to perform or comply with any covenant or
obligation of Borrower under this Agreement or the other Loan Documents; (3)
the
exercise by the Agent of any right or remedy set forth in this Agreement or
the
other Loan Documents or (4) the possession, use, operation or control by
Borrower of any of the Borrower’s assets, provided that Borrower shall have no
obligation to indemnify any Indemnified Party against claims, damages, losses,
liabilities, costs or expenses to the extent that a court of competent
jurisdiction renders a final non-appealable determination that the foregoing
are
solely the result of the willful misconduct or gross negligence of such
Indemnified Party. In addition, the Borrower agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which the Agent or any other
Indemnified Party may incur (or which may be claimed against any such
Indemnified Party by any person), including attorneys’ fees incurred by any
Indemnified Party, arising out of or resulting from the imposition or nonpayment
by Borrower of any tax imposed by any state, including any amounts owing by
virtue of the assertion that any property valuation used to calculate any such
tax was understated. Borrower shall have the right to assume the defense of
any
claim that would give rise to Borrower’s indemnification obligation under this
Section with counsel of Borrower’s choosing so long as such defense is being
diligently and properly conducted and Borrower shall establish to the
Indemnified Party’s satisfaction that the amount of such claims are not, and
will not be, material in comparison to the liquid and unrestricted assets of
Borrower available to respond to any award which may be granted on account
of
such claim. So long as the conditions of the preceding sentence are met,
Indemnified Party shall have no further right to reimbursement of attorney
fees
incurred thereafter. The obligation to indemnify as set forth in this Section
shall survive the termination of this Agreement and other
covenants.
62
(b) Indemnification
Relating to Hazardous Substances.
Borrower will not locate, produce, treat, transport, incorporate, discharge,
emit, release, deposit or dispose of any Hazardous Substance in, upon, under,
over or from any property owned or held by Borrower, except in accordance with
all Environmental Laws; Borrower shall not permit any Hazardous Substance to
be
located, produced, treated, transported, incorporated, discharged, emitted,
released, deposited, disposed of or to escape in, upon, under, over or from
any
property owned or held by Borrower, except in accordance with all Environmental
Laws except where the failure to comply would not reasonably be expected to
result in a Material Adverse Effect; and Borrower shall comply with all
Environmental Laws which are applicable to such property except where the
failure to comply would not reasonably be expected to result in a Material
Adverse Effect. Borrower shall indemnify the Indemnified Parties against, and
shall reimburse the Indemnified Parties for, any and all claims, demands,
judgments, penalties, liabilities, costs, damages and expenses, including court
costs and attorney fees incurred by the Indemnified Parties (prior to trial,
at
trial or on appeal) in any action against or involving the Indemnified Parties,
resulting from any breach of the foregoing covenants in this Section or the
covenants in Section
5.01(a)
hereof,
or from the discovery of any Hazardous Substance in, upon, under or over, or
emanating from such property, it being the intent of Borrower and the
Indemnified Parties that the Indemnified Parties shall have no liability or
responsibility for damage or injury to human health, the environment or natural
resources caused by, or abatement and/or clean up of, or otherwise with respect
to, Hazardous Substances as a result of the Agent or any Bank exercising any
of
its rights or remedies with respect thereto, including but not limited to
becoming the owner thereof by foreclosure, including foreclosure on a judgment
lien, or conveyance in lieu of foreclosure; provided that such indemnification
as it applies to the exercise by the Agent or any Bank of its rights or remedies
with respect to the Loan Documents shall not apply to claims arising solely
with
respect to Hazardous Substances brought onto such property by the Agent or
such
Bank while engaged in activities other than operations substantially the same
as
the operations previously conducted on such property by Borrower. The foregoing
covenants of this Section shall be deemed continuing covenants for the benefit
of the Indemnified Parties, and any successors and assigns of the Indemnified
Parties, including, but not limited to, any transfer of the title of the Agent
or any Bank or any subsequent owner of the property, and shall survive the
satisfaction or release of any lien, any foreclosure of any lien and/or any
acquisition of title to the property or any part thereof by the Agent or any
Bank, or anyone claiming by, through or under the Agent or any Bank or Borrower
by deed in lieu of foreclosure or otherwise. Any amounts covered by the
foregoing indemnification shall bear interest from the date incurred at the
Default Rate, shall be payable on demand, and shall be secured by the Security
Agreements. The indemnification and covenants of this Section shall survive
the
termination of this Agreement and other covenants.
63
Section
8.14 Bond
Financing Cooperation.
It is
acknowledged and agreed by the parties hereto that Borrower intends to seek
Chapter 100 financing for the Project at or near the Completion Date, in
accordance with the Economic Development Agreement between the Borrower and
Xxxxxxx County, Missouri. In connection with this potential financing, Agent
and
the Banks may be requested and/or required to modify their Collateral position;
Agent and the Banks agree to, at no additional cost to Agent and/or the Banks,
reasonably cooperate with Borrower in its efforts to obtain such financing.
Notwithstanding the above, the parties acknowledge and agree that under no
circumstances shall Agent and/or the Banks be required to unreasonably modify
their position with the respect to the Collateral in effort to facilitate
Borrower’s desire to seek such additional financing with respect to the Project.
However, Agent and the Banks both specifically acknowledge and agree that in
order to effect the Chapter 100 financing as contemplated for the Project,
Borrower shall be required to transfer fee ownership of the Project (including
related real and personal property) to the County and in connection with this
transfer, Agent will be required to release its security interest in such
property. In connection with the transfer and release of such security interest,
Agent and the Banks shall receive an assignment of the Chapter 100 Bonds and
be
given a first priority leasehold deed of trust on the Project as its replacement
collateral.
Section
8.15. WAIVER
OF JURY TRIAL.
THE BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE ALL RIGHT 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.
64
Section
8.16. Entire
Agreement.
THIS
AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY
THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL
PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES THERETO.
Section
8.17. Survival.
All
covenants, agreements, representations and warranties made by the Borrower
in
the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of
any
Advances, regardless of any investigation made by any such other party or on
its
behalf and notwithstanding that Agent, the Issuer or any Bank may have had
notice or knowledge of any Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as any Loan Obligations are outstanding and unpaid
and so long as the Commitments have not expired or terminated. The expense
reimbursement, additional cost, capital adequacy and indemnification provisions
of this Agreement shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment
of
the Loan Obligations, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
[SIGNATURES
ON FOLLOWING PAGE]
65
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers and duly authorized, as of the date first above
written.
BORROWER:
a
Missouri limited liability company
____________________________
By:
_____________________________
Title:
____________________________
AGENT:
FCS
FINANCIAL, PCA
____________________________
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
Xxxxx
Xxxx Xxxxx Xxxxx, Xxxxx 000
Xx.
Xxxxx, XX 00000
Facsimile:
000-000-0000
|
BANKS:
FCS
FINANCIAL, PCA
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
Xxxxx
Xxxx Xxxxx Xxxxx, Xxxxx 000
Xx.
Xxxxx, XX 00000
Facsimile:
000-000-0000
|
[signatures
continued on the following page]
00
XXXXXXXXX
XXXX XX XX. XXXXX
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
00000
Xxxxxxxxxx Xxxx
|
Xx.
Xxxxx, XX 00000
Fax:
000-000-0000
AGRIBANK,
FCB, as participant through FCS Financial, PCA
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
______________________
______________________
______________________
COBANK,
ACB
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
______________________
______________________
______________________
[signatures
continued on the following page]
00
0XX
XXXX CREDIT SERVICES, FLCA
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
______________________
______________________
______________________
BANK
MIDWEST, N.A.
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
______________________
______________________
______________________
PROGRESSIVE
FARM CREDIT SERVICES, FLCA
By:
_____________________________
Title:
____________________________
Address
for Notices:
|
______________________
______________________
______________________
68
Schedule
2.01(a)
Commitments
FCS
Financial, PCA
|
$
|
21,000,000.00
|
||
(AgriBank,
FCB, participation commitment amount $5,000,000,00)
|
|
|
||
Southwest
Bank
|
$
|
10,000,000.00
|
||
CoBank,
ACB
|
$
|
5,000,000.00
|
||
1st
Farm Credit Services, FLCA
|
$
|
5,000,000.00
|
||
Bank
Midwest, N. A.
|
$
|
5,000,000.00
|
||
Progressive
FCS
|
$
|
2,000,000.00
|
69
Schedule
3.01(c)
Real
Property
70
Schedule
4.01(a)
Description
of Certain Transactions
Related
to the Borrower’s Membership Interests
71
Schedule
4.01(f)
Description
of Certain Threatened Actions, etc.
72
Schedule
4.01(k)
Office
Locations; Fictitious Names; Etc.
Chief
place of business:
000
Xxxx Xxxx
Xxxxxxxx,
XX 00000
Accounting
Records:
000
Xxxx Xxxx
Xxxxxxxx,
XX 00000
Predecessor
Names:
NONE
73
Schedule
4.01(n)
Intellectual
Property
74
Schedule
4.01(p)
Exceptions
to Environmental Compliance
75
Schedule
5.02(a)
Description
of Certain Liens, Lease Obligations, etc.
76
EXHIBIT
A
Borrower’s
Equity
77
EXHIBIT
B
Compliance
Certificate
TO:
|
FCS
Financial, PCA (the “Agent”)
|
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:
1.
|
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;
|
2.
|
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;
|
3.
|
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, has occurred and is continuing as
of the
date hereof;
|
IN
WITNESS WHEREOF, the undersigned has signed and delivered this Certificate
to
the Agent as of the ____ day of _________________, ____.
BORROWER:
a
Missouri limited liability company
By:__________________________________
Title:
________________________________
78
EXHIBIT
C
Sworn
Construction Statement
Show
Me Ethanol Project Project Costs as of: ________ __,
_____
|
||||||||||||
Categories
of
Project
Costs
|
Prior
Expenditures (Debt&Equity)
|
Prior
Draw Request
|
This
Draw Request
|
Total
Expenditures to Date
|
Closing
Budget
|
Current
Bank Approved Budget
|
Prior
Equity*
|
Equity
this Month
(if
any)
|
Cumulative
Equity
|
Current
Estimate of Total Project Costs
|
Expected
Balance to Completion
|
Variance
from Budget
|
A
|
B
|
C
|
D=(A+B+C)
|
E
|
F
|
G
|
H
|
I=(G+H)
|
J
|
K=(X-X)
|
L=(X-X)
|
|
|
|
|||||||||||
a. DIRECT
COSTS:
|
||||||||||||
Real
Property
|
||||||||||||
SUBTOTAL
DIRECTS:
|
||||||||||||
b. OTHER
COSTS:
(Including
Independent
Engineer, Financing Fees, Legal Fees, Interest During Construction,
Commitment Fees and Taxes)
|
||||||||||||
SUBTOTAL
OTHERS:
|
||||||||||||
c. CONTINGENCY:
|
||||||||||||
TOTAL
PROJECT COSTS:
|
79
EXHIBIT
D
Form
of Construction Promissory Note
PROMISSORY
NOTE
$48,000,000.00 |
February
___,
2007
|
1. FOR
VALUE
RECEIVED, the undersigned, SHOW ME ETHANOL, LLC, a Missouri limited liability
company (the "Borrower") promises to pay to the order of FCS FINANCIAL, PCA,
as
administrative agent (the “Agent”) for those Lenders (as set forth on
Exhibit
“A”,
attached hereto and incorporated herein), the principal sum of Forty-eight
Million Dollars ($48,000,000.00) or so much thereof as may be advanced by
Lenders to, or for the benefit of, the Borrower and be outstanding with interest
as set forth herein, to be computed on each Advance from the date of its
disbursement pursuant to that certain Construction and Term Loan Agreement
by
and among the Borrower, Agent and Lenders of even date herewith (the “Loan
Agreement”), and which remains unpaid, in lawful money of the United States and
immediately available funds. All capitalized terms used and not defined herein
shall have the meanings assigned to them in the Loan Agreement.
2. The
outstanding principal balance of this Promissory Note shall be payable and
bear
interest at the rates and in the manner set forth in the Loan
Agreement.
3. The
rate
of interest due hereunder shall initially be determined as of the date hereof,
as provided in the Loan Agreement.
4. Advances
may only be made under this Promissory Note until the Conversion Date, after
which no further Advances may be made hereunder. No amounts may be readvanced
under this Promissory Note. Any principal repayment will reduce the
Commitment.
5. All
payments and prepayments shall, at the option of Agent, be applied first to
any
costs of collection, second to any late charges, third to accrued interest
and
the remainder thereof to principal.
6. This
Promissory Note is issued pursuant to the terms and provisions of the Loan
Agreement and is entitled to all of the benefits provided for in the Loan
Agreement.
7. The
Borrower promises to pay all actual and reasonable costs of collection of this
Promissory Note, including, but not limited to, reasonable attorneys’ fees paid
or incurred by the Agent on account of such collection, whether or not suit
is
filed with respect thereto and whether or not such costs are paid or incurred,
or to be paid or incurred, prior to or after the entry of judgment.
8. On
the
Conversion Date, the entire outstanding principal balance of this note shall
be
converted into a term Note pursuant to the terms and conditions set forth in
the
Loan Agreement.
80
9. Demand,
presentment, protest and notice of nonpayment and dishonor of this Promissory
Note are hereby waived.
10. This
Promissory Note shall be governed by and construed in accordance with the laws
of the State of Missouri.
11. As
used
herein, the term “Event of Default” shall mean and include any one or more of
the events specified as “Events of Default” in the Loan Agreement.
12. Both
principal and interest are payable in lawful money of the United States of
America to the Agent (as defined in the Loan Agreement).
SHOW
ME
ETHANOL, LLC
a
Missouri limited liability company
By:
_____________________________________
Name:
___________________________________
Title:
____________________________________
81
EXHIBIT
“A”
LENDERS
AND THEIR RESPECTIVE INTERESTS
IN
THE PROMISSORY NOTE
LENDER
|
Percentage
Interest
|
|||
FCS
Financial, PCA
|
43.7500
|
%
|
||
(AgriBank,
FCB, participation percentage 10.4167%)
|
||||
Southwest
Bank of St. Louis
|
20.8333
|
%
|
||
CoBank,
ACB
|
10.4167
|
%
|
||
1st
Farm Credit Services, FLCA
|
10.4167
|
%
|
||
Bank
Midwest, N.A.
|
10.4167
|
%
|
||
Progressive
Farm Credit Services, FLCA
|
4.1667
|
%
|
82
EXHIBIT
E
Form
of Term Promissory Note
PROMISSORY
NOTE
$48,000,000.00 |
February
___,
2007
|
FOR
VALUE
RECEIVED, the undersigned, SHOW ME ETHANOL, LLC, a Missouri limited liability
company (the "Borrower") promises to pay to the order of
_____________________________________,(the “Lender”) the principal sum of
____________________________Dollars ($___________) or so much thereof as may
be
outstanding, together with interest on any principal amounts outstanding
calculated in accordance with the terms and conditions as set forth in that
certain Construction and Term Loan Agreement by and among the Borrower, Lender,
FCS Financial, PCA, as administrative agent and those other lenders set forth
therein (the “Loan Agreement”), and which remains unpaid, in lawful money of the
United States and immediately available funds. All capitalized terms used and
not defined herein shall have the meanings assigned to them in the Loan
Agreement.
1. The
outstanding principal balance of this Promissory Note shall be payable and
bear
interest at the rates and in the manner set forth in the Loan
Agreement.
2. The
rate
of interest due hereunder shall initially be determined as of the date hereof,
as provided in the Loan Agreement.
3. All
payments and prepayments shall, at the option of Lender, be applied first to
any
costs of collection, second to any late charges, third to accrued interest
and
the remainder thereof to principal.
4. This
Promissory Note is issued pursuant to the terms and provisions of the Loan
Agreement and is entitled to all of the benefits provided for in the Loan
Agreement.
5. The
Borrower promises to pay all actual and reasonable costs of collection of this
Promissory Note, including, but not limited to, reasonable attorneys’ fees paid
or incurred by the Lender on account of such collection, whether or not suit
is
filed with respect thereto and whether or not such costs are paid or incurred,
or to be paid or incurred, prior to or after the entry of judgment.
6. Demand,
presentment, protest and notice of nonpayment and dishonor of this Promissory
Note are hereby waived.
7. This
Promissory Note shall be governed by and construed in accordance with the laws
of the State of Missouri.
8. As
used
herein, the term “Event of Default” shall mean and include any one or more of
the events specified as “Events of Default” in the Loan Agreement.
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9. Both
principal and interest are payable in lawful money of the United States of
America to the Lender.
SHOW
ME
ETHANOL, LLC
a
Missouri limited liability company
By:
_________________________________
Name:
_______________________________
Title:
________________________________
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