REVOLVING CREDIT AGREEMENT by and between SHOW ME ETHANOL, LLC “Borrower” and FCS FINANCIAL, PCA “Lender”
by
and between
“Borrower”
and
FCS
FINANCIAL, PCA
“Lender”
TABLE
OF CONTENTS
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Page
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1.
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DEFINITIONS
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1
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1.1
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General
Definitions
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1
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1.2
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Index
to Other Definitions
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13
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1.3
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Accounting
Terms
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13
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1.4
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Others
defined in Missouri Uniform Commercial Code
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13
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2.
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LOANS
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13
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2.1
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Revolving
Loan
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13
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2.2
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LC’s
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14
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2.3
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General
Provisions
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16
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2.4
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Purposes
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17
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3.
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INTEREST
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18
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3.1
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Interest
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18
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3.2
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Voluntary
Conversion, Continuation or Rollover of Loans
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18
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4.
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PAYMENTS;
PREPAYMENTS; TERMINATION OF COMMITMENTS, ETC.
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19
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4.1
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Payment
of Loans
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19
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4.2
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Optional
Prepayments on the Loans
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19
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4.3
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Mandatory
Principal Payments on the Revolving Loan
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20
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4.4
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Termination
of the Commitments
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20
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4.5
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Term
Loan
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20
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5.
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REVOLVING
LIBOR RATE LOANS; INCREASED COSTS; TAXES; ETC.
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20
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5.1
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Revolving
LIBOR Rate Loans
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20
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5.2
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Increased
Costs
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21
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5.3
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Funding
Losses
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21
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5.4
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Capital
Adequacy Requirements
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22
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6.
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FEES
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22
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6.1
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Closing
Fee with Respect to Revolving Loan Commitment
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22
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6.2
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Commitment
Fee with Respect to Revolving Loan Commitment
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23
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6.3
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Additional
Fees with Respect to LC’s
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23
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6.4
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Fees
Not Interest; Nonpayment
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23
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7.
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REPRESENTATIONS
AND WARRANTIES
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23
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7.1
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Litigation
and Proceedings
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23
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7.2
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Other
Agreements
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24
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7.3
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Intellectual
Property
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24
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7.4
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Title
to Assets
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24
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7.5
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Tax
Liabilities
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24
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7.6
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Existing
Indebtedness and Producer Payables
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25
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7.7
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Other
Names
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25
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i
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7.8
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Subsidiaries
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25
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7.9
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Environmental
Matters
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25
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7.10
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Bank
Accounts
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26
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7.11
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No
Consent
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26
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7.12
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Existence
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26
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7.13
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Authority/Eligibility
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26
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7.14
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Binding
Effect
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27
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7.15
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Correctness
of Financial Statements
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27
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7.16
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Employee
Controversies
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27
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7.17
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Compliance
with Laws and Regulations
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27
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7.18
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Solvency
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27
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7.19
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Pension
Plans
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28
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7.20
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Margin
Security
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28
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7.21
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Conflicting
or Adverse Agreements or Restrictions
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28
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7.22
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Full
Disclosure
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28
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7.23
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Survival
of Warranties
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29
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8.
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CONDITIONS
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29
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8.1
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Conditions
to All Loans
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29
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9.
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AFFIRMATIVE
COVENANTS
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32
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9.1
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Compliance
with Laws, etc.
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32
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9.2
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Visitation
Rights; Project Examination
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32
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9.3
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Reporting
Requirements
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33
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9.4
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Net
Worth
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34
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9.5
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Minimum
Debt Service Coverage Rate
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34
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9.6
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Minimum
Working Capital
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34
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9.7.
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Minimum
Equity Percentage
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34
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9.8
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Liens
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34
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9.9
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Landlord
and Mortgagee Waivers
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34
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9.10
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Insurance
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35
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9.11
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Keeping
Books and Records
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35
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9.12
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Warehouse
Receipts
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35
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9.13
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Lender
Fees
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35
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9.14
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Maintain
Properties
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35
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9.15
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Collateral
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35
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9.16
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Borrower’s
Equity
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35
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9.17
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Marketing
Agreements
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35
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9.18
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Taxes
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36
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10.
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NEGATIVE
COVENANTS
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36
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10.1
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Liens,
etc.
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36
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10.2
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Distributions,
etc.
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37
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10.3
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Capital
Expenditures; Capital Leases
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37
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10.4
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Consolidation,
Merger, Dissolution, Etc.
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37
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10.5
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Indebtedness,
etc.
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37
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10.6
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Change
of Control
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38
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ii
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10.7
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Loans,
Guaranties, etc.
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38
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10.8
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Subsidiaries;
Affiliates
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38
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10.9
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Transfer
of Assets
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38
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10.10
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Lines
of Business
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38
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10.11
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Investments
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38
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11.
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DEFAULT
AND RIGHTS AND REMEDIES OF THE LENDER
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39
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11.1
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Acceleration
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39
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11.2
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Other
Remedies
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39
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12.
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MISCELLANEOUS
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40
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12.1
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Timing
of Payments
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40
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12.2
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Attorneys’
Fees and Costs
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40
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12.3
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Expenditures
by the Lender
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40
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12.4
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Lender’s
Costs and Expenses as Additional Liabilities
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41
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12.5
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Claims
and Taxes
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41
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12.6
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Inspection
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41
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12.7
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Examination
of Banking Records
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42
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12.8
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Governmental
Reports
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42
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12.9
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Reliance
by the Lender
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42
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12.10
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Indemnification
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42
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12.11
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Parties
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44
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12.12
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Applicable
Law; Severability
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44
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12.13
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SUBMISSION
TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY
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44
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12.14
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Application
of Payments Waiver
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45
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12.15
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Marshalling;
Payments Set Aside
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45
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12.16
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Section
Titles
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45
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12.17
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Continuing
Effect
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45
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12.18
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No
Waiver
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45
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12.19
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Notices
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46
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12.20
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Maximum
Interest
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47
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12.21
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Lender’s
Reliance
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47
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12.22
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Counterparts
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48
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12.23
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Participations
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48
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12.24
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Credit
Agreement Controls
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48
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12.25
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Confidentiality
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48
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12.26
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Independence
of Covenants
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49
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12.27
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Amendments
and Waivers
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49
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12.28
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FINAL
AGREEMENT
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49
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12.29
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Privacy
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49
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12.30
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Customer
Identification - USA Patriot Act Notice
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50
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12.31
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Survival
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50
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iii
THIS
REVOLVING CREDIT AGREEMENT (this “Agreement”) is made as of the 6th day
of
November, 2007 by and between SHOW
ME ETHANOL, LLC, a
Missouri limited liability company (the “Borrower”) and FCS
FINANCIAL, PCA,
a
federally chartered instrumentality (hereinafter referred to as “Lender”)
(Lender and Borrower sometimes hereinafter collectively the
“Parties”).
WITNESSETH:
WHEREAS,
Borrower has requested that Lender make loans, advances, extensions of credit
and/or other financial accommodations to or for the benefit of the Borrower,
and
Lender is willing to do so on the terms and conditions herein
contained;
NOW,
THEREFORE, in
consideration of the foregoing and of the terms and conditions contained in
this
Agreement, and of any loans or extensions of credit or other financial
accommodations at any time made to or for the benefit for the Borrower by
Lender, the Borrower and Lender agree as follows:
1. DEFINITIONS.
1.1 General
Definitions.
When
used herein, the following capitalized terms shall have the meaning indicated,
whether used in the singular or the plural:
“Account
Debtor”
shall
mean the party which is obligated on or under an Account or a General
Intangible.
“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.
“Affiliate”
shall
mean any Person (other than a Borrower): (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Borrower; (b) that directly or beneficially owns or
holds ten percent (10%) or more of any class of the voting stock or other equity
interest of the Borrower; (c) ten percent (10%) or more of the voting stock
(or
in the case of a Person which is not a corporation, ten percent (10%) or more
of
the equity interest) of which is owned directly or beneficially or held by
the
Borrower; or (d) that is a director, officer, manager or member of the Borrower.
A Person shall be deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction
of
the management or policies of the controlled Person, whether through ownership
of stock, membership interests, by contract or otherwise; provided,
however,
in no
event shall Lender Xxx-Xxxxxxx Grain Growers, Inc., or Central Missouri
Biofuels, LLC be deemed an Affiliate of the Borrower or any of their
subsidiaries.
1
“Applicable
Margin”
shall
mean (i) with respect to such portions of the Loan which are Revolving Base
Rate
Loans, the Base Margin and (ii) with respect to such portions of the Loan which
Revolving LIBOR Rate Loans, the LIBOR Margin.
“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 corporate loans
posted by at least 75% of the nation’s 30 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 as of the first day of the following calendar
month.
“Base
Margin”
shall
mean with respect to such portions of the Loan which are Base Rate Loans,
0%.
“Borrower”
means
Show Me Ethanol, LLC, a Missouri limited liability company.
“Borrower’s
Equity”
means
all cash equity of the Borrower as contributed by its members.
“Borrowing
Base”
shall
mean an amount determined and computed as set forth in Exhibit
1A.
“Borrowing
Base Certificate”
shall
mean a certificate in the form of Exhibit
1B,
signed
as indicated thereon, setting forth the amount of the Borrower’s Borrowing
Base.
“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
in which the Lender’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 London interbank market.
“Closing
Date”
shall
mean November 6, 2007.
“Closing
Fee”
shall
have the meaning set forth in Section
6.1.
“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.
2
“Commitment”
shall
mean the Revolving Loan Commitment and/or the LC Commitment and “Commitments”
shall
mean collectively, the Commitments of the Lender.
“Compliance
Certificate”
shall
have the meaning set forth in Section
9.01(c).
“Current
Assets”
shall
mean the amount of Borrower’s combined current assets according to
GAAP.
“Current
Liabilities”
shall
mean the amount of Borrower’s combined current liabilities according to GAAP
plus the current amount of the Term Loan outstanding.
“DDGS”
means
dried distillers grains, which, along with ethanol, will be produced by the
Borrower.
“Debt”
or
“Indebtedness” shall mean (a) indebtedness for borrowed money or for the
deferred purchase price of property or services; (b) obligations as lessee
under
leases which shall have been or should be, in accordance with GAAP, recorded
as
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 a loss in respect of, indebtedness
or
obligations of others of the kinds referred to in subsection (a) or (b) above
or
(f) below; (d) liabilities in respect of unfunded vested benefits under plans
covered by 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
or
entity, contingent or otherwise, for the payment of money under any noncompete,
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.
“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 excess cash flow
payments made by Borrower under the terms of the Term Loan Agreement), all
as
calculated based on the immediately preceding twelve-month period which ended
on
the calculation date.
“Deed
of Trust”
means
that certain Deed of Trust of even date herewith, pursuant to which a mortgage
interest shall be given by the Borrower to the Lender in the Real Property
to
secure payment of the Obligations.
“Default”
shall
mean the occurrence or existence of: (a) an event which, through the passage
of
time or the service of notice or both, would (assuming no action is taken by
the
Borrower or any other Person to cure the same) mature into a Matured Default;
(b) an event which requires neither the passage of time nor the service of
notice to mature into a Matured Default; (c) the occurrence of a breach or
a
default under any of the Loan Documents; or (d) the occurrence of a breach
or a
default under any other agreement at any time in existence between the Borrower
and the Lender or between the Borrower and any third party and not otherwise
included in (a) - (c) above, that would constitute a Material Adverse
Effect.
3
“Disposition”
or
“Dispose”
shall
mean the sale, transfer, license, lease or other disposition (including any
sale
and leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated
therewith.
“Dollars”
and “$”
shall
mean lawful currency of the United States of America.
“Eligible
Accounts”
shall
mean those Accounts which the Lender, in the exercise of reasonable discretion,
determines are eligible for inclusion in the Borrowing Base at any particular
time. Without limiting the foregoing, the following Accounts shall not be
Eligible Accounts:
(a) any
Account owing by an Account Debtor which is at any time unpaid for a period
exceeding sixty (60) days after the original invoice date of the original
invoice related thereto;
(b) Accounts
which arise out of transactions with Affiliates;
(c) Account
Debtors that are located outside the United States, unless such Accounts are
covered by a letter of credit issued or confirmed by a bank acceptable to the
Lender;
(d) Accounts
which are subject to rights of set-off or counterclaim by the Account Debtor;
and
(e) Accounts
which in the Lender’s reasonable opinion may be subject to liens (other than
liens permitted in Section 10.1(a)) or conflicting claims of ownership, whether
such liens or conflicting claims are asserted or could be asserted by any
Person.
(f) Accounts
which in Lender’s sole discretion are deemed ineligible by Lender.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and the rulings issued
thereunder.
"ERISA
Affiliate"
means
any trade or business (whether or not incorporated) that, together with the
Borrower, is treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the
Code.
"ERISA
Event"
means
(a) any "reportable event", as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect to
any
Plan of an "accumulated funding deficiency" (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant
to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for
a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability
under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator
of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by the Borrower or any
of
its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
4
"Equity
Interests"
means
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.
“Fiscal
Year”
means
the fiscal year of the Borrower, which shall be the twelve month period ending
on or about December 31st
of each
year.
“GAAP”
shall
mean generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board, or in such other statements by such other entity
as
may be in general use by significant segments of the accounting profession,
which are applicable to the circumstances as of the date of
determination.
“General
Intangibles”
shall
mean all of the Borrower’s right, title and interest in and to any bank deposit
accounts, customer deposit accounts, deposits, rights related to prepaid
expenses, negotiable or nonnegotiable instruments or securities, chattel paper,
choses in action, causes of action and all other intangible personal property
of
every kind and nature (other than Accounts), including without limitation,
corporate or other business records, inventions, designs, patents, patent
applications, trademarks, trade names, trade secrets, goodwill, registrations,
copyrights, licenses, franchises, customer lists, tax refunds, tax refund
claims, customs claims, guarantee claims, co-op memberships or patronage
benefits, rights to any government subsidy, set aside, diversion, deficiency
or
disaster payment or payment in kind, water rights (including without limitation,
water stock, ditch rights, well permits, water permits, applications and the
like), easement rights, contract rights, contracts, leasehold interests in
real
and personal property and any security interests or other security held by
or
granted to the Borrower to secure payment by any Account Debtor of any of the
Accounts, and any other “general intangibles” (as defined in the
Code).
“Governmental
Authority”
shall
mean any nation or government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including without
limitation, any arbitration panel, any court or any commission.
5
“Governmental
Requirement”
shall
mean any law, statute, code, ordinance, order, rule, regulation, judgment,
decree, injunction, franchise, permit, certificate, license, authorization
or
other directive or requirement of any federal, state, county, municipal, parish,
provincial or other Governmental Authority or any department, commission, board,
court, agency or any other instrumentality of any of them (excluding any of
the
foregoing that relate to environmental standards or controls and occupational
safety and health standards or controls).
“Highest
Lawful Rate”
shall
mean the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged, or received with
respect to the Note or on other amounts, if any, payable to the Lender pursuant
to this Agreement or any other Loan Documents, under laws applicable to the
Lender which is presently in effect, or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
“Income
Taxes”
means
the applicable state, local or federal income tax of the Borrower on the Net
Income of the Borrower.
“Inventory”
shall
mean any and all goods which shall at any time constitute “inventory” (as
defined in the Code) or farm products 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).
“Investment”
shall
mean, as to any Person, any direct or indirect acquisition or investment by
such
Person, whether by means of (a) the purchase or other acquisition of capital
stock or other securities of another Person, (b) a loan, advance or capital
contribution to, guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person, or (c) the purchase or other acquisition (in one transaction or a series
of transactions) of assets of another Person that constitute a business unit.
For purposes of covenant compliance the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such investment.
“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.
“LC”
shall
mean each letter of credit issued pursuant to this Agreement.
“LC
Commitment”
shall
mean $5,000,000.00, as such amount may be reduced or terminated from time to
time pursuant to Section
4.4 or 11.1,
less
payments received with respect to the LC Obligations.
6
“LC
Obligations”
shall
mean, at any time, an amount equal to the sum of (a) the aggregate undrawn
and
unexpired amount of the outstanding LC’s plus (b) the aggregate amount of
drawings under LC’s which have not been reimbursed pursuant to Section
2.2(e).
“Liabilities”
shall
mean any and all liabilities, obligations and indebtedness of the Borrower
to
the Lender of any and every kind and nature, at any time owing, arising, due
or
payable and however evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed or otherwise (including without
limitation, LC Obligations and obligations of performance) and whether arising
or existing under this Agreement or any of the other Loan Documents or by
operation of law.
“LIBOR
Interest Period”
shall
mean, with respect to a Revolving LIBOR Rate Loan, the period of time for which
the LIBOR Rate shall be in effect as to the Revolving LIBOR Rate Loan and which
shall be a 1, 3 or 6 month period of time commencing with the borrowing date
of
the Revolving LIBOR Rate Loan or the expiration date of the immediately
preceding LIBOR Interest Period, as the case may be, applicable to and ending
on
the effective date of any conversion, continuation or rollover made as provided
in Section
3.2
as the
Borrower may specify in a notice of borrowing delivered pursuant to Section
2.3
or a
notice of conversion, continuation or rollover delivered pursuant to
Section
3.2; provided,
however,
that:
(a) any LIBOR Interest Period which would otherwise end on a day which is not
a
Business Day shall be extended to the next succeeding Business Day; and (b)
no
LIBOR Interest Period for any portion of the Revolving Loan shall extend beyond
the Maturity Date.
“LIBOR
Margin”
shall
mean with respect to such portions of the Loan which are Revolving 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; a Loan based on the LIBOR Rate shall
hereinafter be a “LIBOR Rate Loan”.
“Lien”
shall
mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or otherwise), charge, or preference, priority
or
other security interest or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
and any financing lease having substantially the same economic effect as any
of
the foregoing).
"Loan
Documents"
means
this Agreement, the Note, the Security Documents, and all other agreements,
documents, instruments, and certificates of the Borrower delivered to, or in
favor of, Lender 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 Loans by
Lender.
7
“Loans”
shall
mean all loans made pursuant to this Agreement, whether with respect to the
Revolving Base Rate Loans or Revolving LIBOR Rate Loans.
“Long
Term Debt”
means
Debt that matures more than one (1) year after the date of determination
thereof.
“Margin
Accounts”
shall
mean all futures contracts or funds and other property related to such futures
contracts, which the Borrower or the Borrower’s authorized attorney-in-fact may
acquire, accumulate, withdraw or pay out, and which may be held with any broker,
including without limitation, any balance credited to any Margin Account upon
its closing.
“Material
Adverse Effect”
shall
mean a material adverse effect on (a) the business, property, condition,
(financial or otherwise), results of operations or business prospects of the
Borrower, or (b) the ability of the Borrower to perform its respective
obligations under the Loan Documents. For purposes of this Agreement, all
determinations as to whether there has been a Material Adverse Effect shall
be
made by Lender in its reasonable discretion.
“Matured
Default”
shall
mean the occurrence or existence of any one or more of the following events:
(a)
the
Borrower fails to pay any principal or interest pursuant to any of the Loan
Documents at the time such principal or interest becomes due or is declared
due
and such failure continues for a period of ten (10) Business Days after written
notice shall have been given to the Borrower by Lender;
(b)
the
Borrower fails to pay any of the Liabilities (other than principal and interest)
on or before ten (10) Business Days after the Lender has notified the Borrower
of the existence and amount of such Liabilities;
(c)
the
Borrower fails or neglects to perform, keep or observe any of the covenants,
conditions, promises or agreements contained in Section
10;
(d)
the
Borrower fails or neglects to perform, keep or observe any of the covenants,
conditions, promises or agreements applicable to Borrower contained in this
Agreement or in any of the other Loan Documents (other than those covenants,
conditions, promises and agreements referred to or covered in (a),
(b)
or
(c)
above
and other than the covenants set forth in Section
9.6),
and
such failure or neglect continues for more than thirty (30) days after the
earlier of the date the Lender gives the Borrower written notice thereof or
the
date on which a corporate executive officers of the Borrower first learn of
such
failure or neglect, provided,
however,
that if
the Borrower, despite its diligent efforts and the susceptibility of cure,
has
been unable to cure such default or neglect within such thirty (30) day grace
period, the Borrower shall have an additional thirty (30) day period to effect
such cure, provided,
further,
that
such grace period shall not apply, and a Matured Default shall be deemed to
have
occurred and to exist immediately if such failure or neglect may not, in the
Lender’s reasonable determination, be cured by the Borrower during such
successive thirty (30) day grace periods;
8
(e)
any
warranty or representation at any time made by the Borrower in connection with
this Agreement or any of the other Loan Documents is untrue or incorrect in
any
material respect when made, or any schedule, certificate, statement, report,
financial data, notice, or writing furnished at any time by or on behalf of
the
Borrower to the Lender is untrue or incorrect in any material respect on the
date as of which the facts set forth therein are stated or certified and which
shall not be cured within five (5) Business Days after written notice shall
have
been given to the Borrower by Lender.
(f)
a
final judgment in excess of $100,000.00 is rendered against the Borrower or
any
Subsidiary and such judgment remains unsatisfied and in effect for thirty (30)
consecutive days without a stay of enforcement or execution, provided, however,
that
this clause (f) shall not apply to any judgment for which, and to the extent,
the Borrower or such Subsidiary is insured and with respect to which the insurer
has admitted liability in writing for such judgment to such extent;
(g)
all
or any material part of the Borrower’s or any Subsidiary’s assets come within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors;
(h)
a
proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed against
the Borrower [or any Subsidiary] and such proceeding is not dismissed within
thirty (30) days of the date of its filing, or a proceeding under any
bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt or receivership law or statute is filed by the Borrower or any Subsidiary,
or the Borrower [or any Subsidiary] makes an assignment for the benefit of
creditors;
(i)
the
Borrower or any Subsidiary voluntarily or involuntarily dissolves or is
dissolved;
(j)
the
Borrower [or any Subsidiary] is enjoined, restrained, or in any way prevented
by
the order of any court or any administrative or regulatory agency or by the
termination or expiration of any permit or license, from conducting all or
any
material part of the Borrower’s business affairs, and such injunction, restraint
or prevention would have a Material Adverse Effect;
(k)
the
Borrower [or any Subsidiary] fails to make any payment due or otherwise defaults
on any other obligation for borrowed money in excess of $100,000.00 and the
effects of such failure or default are to cause or permit the holder of such
obligation or a trustee to cause such obligation to become due prior to its
date
of maturity;
(l)
the
Lender makes an expenditure under Section
12.3
and such
amount shall not have been reimbursed to the Lender within two (2) Business
Days
following demand therefor;
(m)
the
occurrence of a default, an event of default or a matured default under any
other agreement, instrument or document at any time entered into between the
Borrower and the Lender which default, event of default or matured default
has
had or in the opinion of the Lender is likely to have a Material Adverse Effect;
9
(n)
the
Borrower fails or neglects to perform, keep or observe any of the covenants,
conditions, promises or agreements contained in Section
9.6,
and
such failure or neglect continues for more than thirty (30) days after such
failure or neglect first occurs, provided,
however,
that
such grace period shall not apply, and a Matured Default shall be deemed to
have
occurred and to exist immediately if such failure or neglect may not, in the
Lender’s reasonable determination, be cured by the Borrower during such thirty
(30) day grace period;
(o)
any
Financing Agreement, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or satisfaction in full
of
all the Liabilities, ceases to be in full force and effect; or the Borrower
or
any other Person contests in any material manner the validity or enforceability
of any Financing Agreement; or the Borrower denies that it has any or further
liability or obligation under any Financing Agreement, or purports to revoice,
terminate or rescind any Financing Agreement (including, without limitation,
the
Guaranty), or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or subject to Section 10.01, is
not, valid, perfected and prior to all other Liens or is terminated, revoked
or
declared;
(p)
Borrower discontinues doing business;
(q)
An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of Borrower
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC
in
an aggregate amount in excess of $100,000, or (ii) Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of the Threshold Amount; or
(r)
Any
default by Borrower under the terms of the Term Loan Agreement.
“Maturity
Date”
shall
mean thirty-six (36) months from the date of the initial disbursement under
this
Agreement or the earlier date of termination in whole of the Commitment pursuant
to Section
4.4
or
11.1.
"Multiemployer
Plan"
means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net
Income”
means
income from operations after all expenses, including salaries and bonuses
determined according to GAAP.
“Note”
shall
mean the Revolving Note of the Borrower executed and delivered pursuant to
this
Agreement.
10
“Obligations”
"
means
all obligations, indebtedness, and liabilities of the Borrower to the Lender
arising pursuant to this Agreement or any of the Security 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
all sums outstanding under this Agreement.
“Pension
Plan”
shall
mean any employee pension benefit plan as defined in Section 3(2) of ERISA
in
which any personnel of the Borrower or an Affiliate which is under common
control with the Borrower (within the meaning of Section 414 of the IRC)
participate and which is subject to Title IV of ERISA or Section 412 of the
IRC.
“Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, entity, party or government (whether national, federal,
state, provincial, county, city municipal or otherwise, including without
limitation, any instrumentality, division, agency, body or department
thereof).
“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.
“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
8.01(xv).
“Restricted
Payment”
shall
mean any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other equity interest of Borrower
or any Subsidiary, or any payment (whether in case, securities or other
property), including any sinking fund or similar deposit on account of the
purchase, redemption, retirement, acquisition, cancellation or termination
of
any such capital stock or other equity interest or of any option, warrant or
other right to acquire any such capital stock or other equity
interest.
“Revolving
Base Rate Loan”
shall
mean any portion of the Revolving Loan which bears interest at a rate determined
by reference to the Base Rate.
“Revolving
Liabilities”
shall
mean that portion of the Liabilities consisting of principal of and/or interest
on the Revolving Loan, plus the fees described in Section
6
applicable to the Revolving Loan.
“Revolving
LIBOR Rate Loan”
shall
mean any portion of the Revolving Loan which bears interest at a rate determined
by reference to the LIBOR Rate.
“Revolving
Loan”
shall
have the meaning set forth in Section
2.1.
“Revolving
Loan Available Amount”
shall
mean, at any time, an amount equal to the excess of (a) the lesser of (i) the
Borrowing Base or (ii) the Revolving Loan Commitment over (b)(i) the principal
outstanding amount of the Revolving Loan plus (ii) the aggregate face amount
of
all outstanding LC’s.
11
“Revolving
Loan Commitment”
shall
mean $5,000,000.00, as such amount may be reduced or terminated from time to
time pursuant to Section
4.4 or 11.1.
“Security
Documents”
shall
mean any and all agreements, security agreements, deeds of trust, mortgages,
chattel mortgages, pledges, guaranties, assignments of proceeds, assignments
of
income, assignments of contract rights, assignments of partnership interests,
assignments of royalty interests, assignments of leases, assignments of
easements, assignments of performance or other collateral assignments,
completion or surety bonds, standby agreements, subordination agreements,
undertakings and other documents, agreements, instruments and financing
statements at any time executed and delivered by the Borrower or a third Person
in connection with, or as security for the payment or performance of, the Note,
any indebtedness renewed or extended by such Note and the Borrower’s obligations
under this Agreement.
“Start
Up Date”
shall
have the meaning set forth in Section
9.01(c).
“Subsidiary”
of
a
Person shall mean a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities
or other interests having ordinary voting power for the election of directors
or
other governing body (other than securities or interests having such power
only
by reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of Borrower.
“Subordinated
Debt”
shall
mean any and all Debt of the Borrower held by any Person other than Lender
or
any Term Loan Lender.
“Term
Loan”
shall
mean that certain loan from the Term Loan Lender to the Borrower in the amount
of $48,000,000.00 made pursuant to that certain Construction and Term Loan
Agreement dated as of the date hereof.
“Term
Loan Intercreditor Agreement”
shall
have the meaning as set forth in Section
4.5.
“Term
Loan Agreement”
shall
mean that certain Construction and Term Loan Agreement by and between Borrower
and Term Loan Lender dated as of the date hereof.
“Term
Loan Lender”
shall
mean FCS Financial, PCA and those Banks identified in the Term Loan
Agreement.
“Title
Policy”
shall
mean that certain ALTA mortgage title insurance policy issued by a title
insurance company acceptable to Lender and as set forth in Section
8.1(b)(xv).
12
“Total
Net Worth”
shall
mean consolidated net worth, as determined according to GAAP, plus Subordinated
Debt and less intangible assets.
“Type”
shall
mean with respect to a Revolving Loan, whether such Loan is a Revolving Base
Rate Loan or a Revolving LIBOR Rate Loan.
“Working
Capital”
means
current assets of Borrower less current liabilities of Borrower.
1.2 Index
to Other Definitions.
When
used herein, the following capitalized terms shall have the meanings given
in
the indicated portions of this Agreement:
|
Term
|
Location
|
|
|
Agreement
|
introduction
|
|
|
Application
|
Section
2.2(b)
|
|
|
Code
|
Section
1.4
|
|
|
Default
Rate
|
Section
3.1(c)
|
|
|
Environmental
Laws
|
Section
7.9
|
|
|
Excess
|
Section
12.20
|
|
|
Lender
|
introduction
|
|
|
Loan
Account
|
Section
2.3
|
|
|
UCP
|
Section
2.2(c)
|
1.3 Accounting
Terms.
Any
accounting terms used in this Agreement which are not specifically defined
in
this Agreement shall have the meanings customarily given them in accordance
with
GAAP.
1.4 Others
defined in Missouri Uniform Commercial Code.
All
other terms contained in this Agreement (which are not specifically defined
in
this Agreement) shall have the meanings set forth in the Uniform Commercial
Code
of Missouri (“Code”) to the extent the same are used or defined
therein.
2. LOANS.
2.1 Revolving
Loan.
(a) Subject
to the terms and conditions and relying upon the representations and warranties
herein set forth, Lender agrees to extend a revolving credit loan (the
“Revolving Loan”) to the Borrower by making loans to the Borrower on a revolving
basis on any one or more Business Days prior to the Maturity Date, up to an
aggregate principal amount not exceeding the Revolving Loan Available Amount
on
such Business Day. Within such limits and during such period and subject to
the
terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow the Revolving Loan. Subject to Section
2.3
hereof,
loans extended with respect to the Revolving Loan shall be comprised of
Revolving Base Rate Loans and/or Revolving LIBOR Rate Loans as selected by
the
Borrower. The principal amount outstanding under the Revolving Loan Commitment
shall not, at any time, exceed the Borrowing Base. If at any time the principal
amount outstanding under the Revolving Loan Commitment exceeds the Borrowing
Base, then the amount of such excess shall be immediately due and payable by
the
Borrower to the Lender. Notwithstanding the foregoing, the parties have agreed
that Borrower may, request and obtain Two Million Dollars ($2,000,000.00) of
the
Revolving Loan Commitment without the requirement of sufficient Borrowing Base;
provided, however, any request for funds under the Revolving Loan Commitment
above Two Million Dollars ($2,000,000.00) of principal, outstanding at any
time,
shall not exceed the then available Borrowing Base. For purposes of
illustration, should Borrower request an additional Two Million Five Hundred
Thousand Dollars ($2,500,000.00) under the Revolving Loan Commitment, Borrower
shall be required to document to Lender a Borrowing Base of Two Million Five
Hundred Thousand Dollars, to receive the requested funds.
13
(b) The
Borrower shall execute and deliver to the Lender to evidence the Revolving
Loan
made by the Lender under the Revolving Loan Commitment, a revolving credit
note
(a “Revolving Note”) which shall be (i) dated the date of the Closing Date; (ii)
in the principal amount of the Revolving Loan Commitment; and (iii) in the
form
attached as Exhibit
2,
appropriately completed. The Lender shall post (i) the date and principal amount
of each borrowing with respect to the Revolving Loan made under the Revolving
Note; (ii) the Type of Revolving Loan; (iii) the rate of interest each such
borrowing will bear; and (iv) each payment of principal thereon; provided,
however,
that
any failure of the Lender to so post shall not affect the Borrower’s obligations
thereunder.
2.2 LC’s.
(a) Subject
to the terms and conditions of this Agreement, the Borrower may from time to
time request that the Lender issue one or more LC’s for the Borrower’s account
for any purpose acceptable to the Lender in its reasonable discretion;
provided,
however,
that
the Lender shall not issue any such LC if (i) such issuance would cause the
LC
Obligations to exceed $5,000,000.00 at the time of such issuance, (ii) the
face
amount of such LC exceeds the Revolving Loan Available Amount at the time of
such issuance, or (iii) the proposed expiry date for the LC is on or after
a
date which is the earlier of (A) twelve (12) months after its date of issuance
or (B) the Maturity Date.
(b) In
order
to effect the issuance of each LC, the Borrower shall deliver to the Lender
a
letter of credit application on such form as required by the Lender (the
“Application”) not later than 2:00 p.m. St. Louis, Missouri time, five (5)
Business Days prior to the proposed date of issuance of the LC. The Application
shall be duly executed by a responsible officer of the Borrower, shall be
irrevocable and shall (i) specify the day on which such LC is to be issued
(which shall be a Business Day), and (ii) be accompanied by a certificate
executed by a responsible officer, manager or member stating that all conditions
precedent to such issuance have been satisfied and setting forth calculations
evidencing availability for such LC as required pursuant to Section
2.2(a).
(c) Upon
receipt of the Application, and satisfaction of the applicable terms and
conditions of this Agreement, and provided,
however,
that no
Default or Matured Default exists, or would exist after giving effect to the
issuance of the LC, the Lender shall issue such LC no later than the close
of
business, in St. Louis, Missouri, on the date so specified. The Lender shall
provide the Borrower with a copy of the LC which has been issued. Each LC shall
(i) provide for the payment of drafts presented for honor thereunder by the
beneficiary in accordance with the terms thereof, when such drafts are
accompanied by the documents described in the LC, if any, and (ii) to the extent
not inconsistent with the express terms hereof or the applicable Application,
be
subject to the Uniform Customs and Practice for documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (together
with
any subsequent revisions thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Lender, the “UCP”), and shall, as to
matters not governed by the UCP, be governed by, and construed and interpreted
in accordance with, the laws of the State of Missouri.
14
(d) Upon
the
presentment of a draft for honor under any LC by the beneficiary thereof which
the Lender has determined is in compliance with the conditions for payment
thereunder, the Lender shall promptly notify the Borrower of the intended date
of honor of such draft, and the amount due and owing in respect of such draft
shall automatically and without any action by any Person be due and payable
by
the Borrower to the Lender on the intended date of honor. Each drawing under
any
LC shall constitute a request by the Borrower to the Lender for a borrowing
pursuant to Section
2.1(a)
of the
Revolving Loan in the amount of such drawing.
(e) The
Borrower’s obligation to reimburse the Lender for the amount of any draft drawn
under an LC shall be absolute, unconditional and irrevocable and shall be paid
immediately to the Lender upon demand by the Lender, and otherwise strictly
in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including without limitation, the following circumstances:
(i) The
existence of any claim, set-off, defense or other rights which the Borrower
may
have at any time against any beneficiary or any transferee of any LC (or any
Person for whom any such beneficiary or any such transferee may be acting),
the
Lender or any other Person, whether in connection with this Agreement, any
other
Financing Agreement, the transactions contemplated herein or therein or any
unrelated transaction, unless otherwise provided by the terms of such
LC;
(ii) Any
statement or any other document presented under any LC proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue
or
inaccurate in any respect;
(iii) Payment
by the Lender under any LC against presentation of a draft or certificate which
does not comply with the terms of such LC, provided,
however,
that
such payment shall not have constituted gross negligence or willful misconduct
of the Lender; and
(iv) Any
other
circumstances or event whatsoever, whether or not similar to the foregoing,
provided,
however,
that
such other circumstance or event shall not have been the result of gross
negligence or willful misconduct of the Lender.
(f) The
Borrower assumes all risks of the acts or omissions of the beneficiary and
any
transferee of each LC with respect to its use of such LC. The Lender shall
not
be liable or responsible for, and the Borrower indemnifies and holds the Lender
harmless for: (i) the use which may be made of any LC or for any acts or
omissions of the beneficiary and any transferee thereof in connection therewith,
or (ii) the validity or genuineness of documents, or of any endorsement(s)
thereon, even if such documents should, in fact prove to be in any or all
respects invalid, fraudulent or forged, or any other circumstances whatsoever
in
making or failing to make payment, against Lender, except damages determined
to
have been caused by gross negligence or willful misconduct of the Lender in
determining whether documents presented under an LC comply with the terms of
such LC and there shall have been a wrongful payment as a result thereof;
provided,
however,
that it
is the intention of the Borrower to indemnify the Lender for the negligence
of
the Lender, other than negligence constituting gross negligence or willful
misconduct. In furtherance and not in limitation of the foregoing, the Lender
may accept documents that appear on their face to be in order, without
responsibility for investigation, regardless of any notice or information to
the
contrary.
15
(g) In
the
event that any provision of an Application is inconsistent, or in conflict
with,
any provision of this Agreement, including provisions for the rate of interest
applicable to draws thereunder, delivery of collateral or rights of set-off
or
any representations, warranties, covenants or any events of default set forth
therein, the provisions of this Agreement shall govern.
(h) If
any LC
has an expiration date after the Maturity Date, and if the Lender shall not
have
agreed to extend the Revolving Loan Commitment through a date which is on or
after the latest expiration date of any LC, then the Borrower shall deposit
with
the Lender cash collateral or other liquid collateral, of a type and in an
amount which is satisfactory to Lender, in its sole discretion, provided,
however,
that
cash in an amount equal to 105% of the face amount of all such LCs, is hereby
agreed by the Lender to the satisfactory collateral as to type and
amount.
2.3 General
Provisions.
(a) Each
borrowing under this Agreement shall in the case of any Revolving LIBOR Rate
Loan be in an aggregate amount of not less than $1,000,000.00 or in incremental
multiples of $1,000,000.00 in excess thereof. At the option of the Borrower,
any
borrowing may be comprised of two or more Types bearing different rates of
interest; provided,
however,
that a
Loan made on the first Business Day after the Closing Date shall bear interest
from the date of such Loan at a rate per annum equal to the Base Rate in effect
from time to time plus
the Base
Margin (if any), unless and until the Borrower gives notice under Section
3.2.
Each
Loan shall be made upon prior written notice from the Borrower to the Lender
delivered not later than 11:00 a.m. St. Louis, Missouri time on the Closing
Date with respect to any Loans to be made on the first Business Day after the
Closing Date, or with respect to any Loans to be made thereafter, on the same
Business Day as the proposed Loans if such borrowing is with respect to a Loan
which is a Revolving Base Rate Loan, or three Business Days prior to the
proposed Loan if such borrowing is with respect to a Loan which is a Revolving
LIBOR Rate Loan. Each such notice of borrowing with respect to the Loans shall
be irrevocable and shall specify (i) the amount of the proposed borrowing;
(ii)
the date of the proposed borrowing; (iii) the Type; and (iv) with respect to
any
portion of the borrowing to be a Revolving LIBOR Rate Loan, the LIBOR Interest
Period and the expiration date of each such LIBOR Interest Period. The Borrower
shall give the Lender written (including facsimile) notice by the required
time
of any proposed borrowing. The Lender shall not incur any liability to the
Borrower in acting upon any facsimile notice referred to above which the Lender
believes in good faith to have been given by the Borrower, or for otherwise
acting in good faith under this Section
2.3(a).
16
(b) Loans
may
be made by the Lender on the Lender’s receipt of written notice from an
authorized agent of Borrower, which shall be set forth in a Certificate of
Borrower. Any such Loans shall be conclusively presumed to have been made to
or
for the benefit of the Borrower when the Lender believes in good faith that
such
notice was made by authorized persons, or when said Loans are deposited to
the
credit of the account of the Borrower regardless of the fact that Persons other
than those authorized hereunder may have authority to draw against such
account.
(c) The
Lender shall maintain a loan account (“Loan Account”) on its books in which
shall be recorded: (a) all borrowings with respect to the Revolving Loan; (b)
all payments made by the Borrower on the Revolving Loan; and (c) all other
appropriate debits and credits as provided in this Agreement, including without
limitation, all fees, charges, expenses and interest. All entries in the
Borrower’s Loan Account shall be made in accordance with the Lender’s customary
accounting practices as in effect from time to time. In addition to monthly
xxxxxxxx with respect to the Loans, the Lender shall send to the Borrower annual
statements for the Loan Account. The Borrower promises to pay the amount
reflected as owing by and under its Loan Account, as reflected on such monthly
xxxxxxxx and annual statements, and all other obligations hereunder as such
amounts become due or are declared due pursuant to the terms of this Agreement,
unless the Borrower notifies the Lender within thirty (30) days after the
Borrower’s receipt of such quarterly billing or annual statement, of a good
faith dispute relating to the matter summarized on such quarterly billing or
annual statement. In the absence of the Borrower’s timely written notice of a
good faith dispute, each quarterly billing and annual statement for the Loan
Account shall be rebuttable presumptive evidence of the amounts due and owing
the Lender by the Borrower.
(d) All
Loans
to the Borrower, and all other debits and credits provided for in this
Agreement, shall be evidenced by entries made by the Lender in its internal
data
control system showing the date and amount of each such debit or credit. Until
such time as the Lender shall have rendered to the Borrower written statements
of account as provided herein, the balance in the Borrower’s Loan Account, as
set forth on the Lender’s most recent printout, shall be rebuttable presumptive
evidence of the amounts due and owing the Lender by the Borrower.
2.4 Purposes.
The
purpose of the Revolving Loan is to (i) fund proper corporate business purposes
of Borrower, (ii) fund Borrower’s maintenance capital expenditures and (iii)
issue letters of credit, and the proceeds of the Revolving Loan shall only
be
used by Borrower for such purposes. Each LC shall be issued for proper business
purposes of Borrower.
17
3. INTEREST.
3.1 Interest.
The
Borrower shall pay interest on the unpaid principal amount of each Loan from
the
date of such Loan until such principal amount shall be paid in full, at the
times and at the rates per annum set forth below:
(a) So
long
as no Matured Default has occurred or is continuing, with respect to such
portions of the Revolving Loan which consist of Revolving Base Rate Loans,
a
rate per annum equal to the sum of the Base Rate in effect from time to time
plus the Base Margin (if any), payable monthly in arrears on the first Business
Day of each month, and, with respect to any Revolving Base Rate Loans
outstanding as of the Maturity Date, on the Maturity Date.
(b) So
long
as no Matured Default has occurred or is continuing, with respect to such
portions of the Revolving Loan which consist of Revolving LIBOR Rate Loans,
(i)
in the case of one (1) and three (3) month LIBOR Rate Loans on the Maturity
Date
for the applicable LIBOR Rate Loan and (ii) 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.
(c) After
the
occurrence of a Matured Default and for so long as such Matured Default is
continuing, any amount due hereunder with respect to each Loan, under the Note
or under any other Loan Documents, whether for principal, interest (to the
extent permitted by applicable law), fees, expenses or otherwise, shall bear
interest, from the date on which such Matured Default occurs and during the
continuation of such Matured Default, payable on demand, at a rate per annum
(the “Default Rate”) equal to the sum of two percent (2.0%) per annum
plus
the rate
in effect with respect thereto immediately prior to the occurrence of the
Matured Default.
(d) All
computations of interest with respect to any Base Rate Loan shall be based
on a
year of 365 or 366 days, as the case may be. All other calculations of interest
and fees under this Agreement, including, without limitation, computation of
interest with respect to any LIBOR Rate Loan, shall be based on a year of 360
days. Interest shall be charged with respect to the Revolving Loan for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Each determination
by the Lender of an interest rate hereunder shall be conclusive and binding
for
all purposes, absent manifest error.
3.2 Voluntary
Conversion, Continuation or Rollover of Loans.
The
Borrower may on any Business Day, upon the Borrower’s written (including
facsimile) notice to the Lender (i) in the case of a Base Rate Loan, continue
or
rollover the existing Base Rate Loan into a new Base Rate Loan, not later than
11:00 a.m., St. Louis, Missouri time, on the day of the proposed continuation
or
rollover or (ii) in the case of all other Types of Loans, not later than 2:00
p.m. St. Louis, Missouri time on the day which is three (3) Business Days prior
to the date of any proposed conversion, continuation or rollover, convert Loans
from one Type to another Type, or roll over or continue a Loan, provided,
however,
that
(a) with respect to any conversion, continuation or rollover of a Loan, no
Default or Matured Default shall have occurred and be continuing, (b) with
respect to any facsimile notice of Loan conversion, continuation or rollover,
the Borrower shall promptly confirm such notice by sending the original notice
to the Lender, and (c) any continuation, conversion or rollover of a Revolving
LIBOR Rate Loan to which a LIBOR Interest Period applies for the same or a
different LIBOR Interest Period or into a different Type of Loan shall be made
on, and only on, the last day of the LIBOR Interest Period applicable to such
Loan. Each such notice of conversion, continuation or rollover shall specify
therein (d) the requested date of such conversion, continuation or rollover,
(e)
the Loans requested to be converted, continued or rolled over, and (f) if such
conversion, continuation or rollover is into or is with respect to a Revolving
LIBOR Rate Loan, the duration of the requested LIBOR Interest Period for each
such Loan. Each such notice shall be irrevocable and binding on the Borrower.
If
the Borrower shall fail to give a notice of conversion, continuation or rollover
with respect to any Revolving LIBOR Rate Loan as set forth above, such Loan
shall automatically convert to a Revolving Base Rate Loan on the last day of
the
LIBOR Interest Period applicable thereto.
18
|
4.
|
PAYMENTS;
PREPAYMENTS; TERMINATION OF COMMITMENTS,
ETC.
|
4.1 Payment
of Loans.
The
Borrower shall make each payment hereunder and under the Note not later than
2:00 p.m. St. Louis, Missouri time on the day when due in lawful money of
the United States and in immediately available funds to the Lender.
4.2 Optional
Prepayments on the Loans.
The
Borrower may at any time prepay the outstanding principal amount of any Loan,
in
whole or in part, in accordance with this Section
4.2.
The
Borrower shall give prior written notice of any such prepayment to the Lender,
which notice shall state the proposed date of such prepayment (which shall
be a
Business Day) and which notice shall be delivered to the Lender not later than
2:00 p.m. St. Louis, Missouri time, (a) with respect to any portion of Revolving
Loan which is a Revolving Base Rate Loan, on the date of prepayment, and (b)
with respect to any portion of the Revolving Loan which is a Revolving LIBOR
Rate Loan, three (3) Business Days prior to the date of prepayment, which
written notice shall specify the portion of the Loans to be prepaid and the
aggregate amount of the prepayment. All prepayments of Revolving LIBOR Rate
Loans shall be made together with accrued and unpaid interest (if any) to the
date of such prepayment on the principal amount prepaid, together with funding
losses incurred by the Lender under Section
5.3
with
respect to such prepayment. Such notice shall be irrevocable and the payment
amount specified in such notice shall be due and payable on the prepayment
date
described in such notice, together with, in the case of Revolving LIBOR Rate
Loans, accrued and unpaid interest (if any) on the principal amount prepaid
and
any amounts due under Section
5.3.
The
Borrower shall have no right to prepay the principal amount of any Loan other
than as provided in this Section
4.2.
19
4.3 Mandatory
Principal Payments on the Revolving Loan.
The
Borrower shall pay to Lender the principal payments on the Revolving Loan as
required by the Note.
4.4 Termination
of the Commitments.
(a) The
Lender shall have the right, without notice to the Borrower, to terminate the
Commitments immediately upon a Matured Default. In addition, the Revolving
Loan
Commitment and the LC Commitment shall be deemed immediately terminated and
all
of the Revolving Loan Liabilities shall be immediately due and payable, without
notice to Borrower, on the Maturity Date. In the event any of the Commitments
are terminated, the remainder of this Agreement shall remain in full force
and
effect until the indefeasible full payment and full satisfaction of the
Revolving Loan. Notwithstanding the foregoing, in the event that a proceeding
under any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt or receivership law or statute is filed by or against
the
Borrower or the Borrower makes an assignment for the benefit of creditors,
this
Agreement shall be deemed to be terminated immediately, and all of the
Liabilities shall automatically become immediately due and payable, provided,
however,
that in
the event of a proceeding against the Borrower is dismissed within thirty (30)
days of the date of its filing, then the Agreement shall be deemed to be
reinstated as of the date the order of dismissal becomes final and the Lender
is
given notice thereof.
(b) The
Borrower shall have the right, upon at least five (5) Business Days’ notice to
the Lender, to terminate the Commitments in whole or in part.
4.5 Term
Loan.
Lender
acknowledges that all or a portion of the Collateral shall be secured equally
and ratably with the Term Loan on the same lien priority basis. In connection
therewith, as of the Closing Date, Lender, and the Term Loan Lender shall
execute and enter into an intercreditor agreement in form and substance
substantially identical to Exhibit
4.5
attached
hereto (the “Term Loan Intercreditor Agreement”). The aggregate outstanding
principal balance of the Term Loan shall not exceed $48,000,000.00. All proceeds
received by the Lender from the sale or other liquidation of the Collateral
in
the event of a Matured Default shall be applied by Lender to the unpaid amounts
of the Obligations hereunder and the unpaid amount of the Term Loan, in
pari
passu
without
priority.
|
5.
|
REVOLVING
LIBOR RATE LOANS; INCREASED COSTS; TAXES;
ETC.
|
5.1 Revolving
LIBOR Rate Loans.
|
Anything
in this Agreement to the contrary
notwithstanding:
|
(a) If
the
introduction of or any change in or the interpretation of any law or regulation
makes it unlawful, or that any central bank or other Governmental Authority
asserts that it is unlawful, for the Lender to perform its obligations to make
Revolving LIBOR Rate Loans or to fund or maintain Revolving LIBOR Rate Loans
(whether or not such assertion carries the force of law), the obligation of
the
Lender to make, rollover or to convert Loans into Revolving LIBOR Rate Loans
shall be suspended until the Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist, and any existing
Revolving LIBOR Rate Loans shall automatically convert, on and as of the date
of
such notification, into Revolving Base Rate Loans; provided
that the
Lender represents and warrants to the Borrower that it has no actual knowledge
that it would be unlawful for the Lender to make Revolving LIBOR Rate Loans
as
contemplated herein.
20
(b) If
any
requested borrowing consisting of a Revolving LIBOR Rate Loan will not
adequately reflect the cost to the Lender of making or funding the respective
Revolving LIBOR Rate Loan or for such borrowing, the right of the Borrower
to
select Revolving LIBOR Rate Loans or for such borrowing or any subsequent
borrowing respectively shall be suspended until the circumstance causing such
suspension no longer exist, and the Revolving LIBOR Rate Loans comprising such
requested borrowing shall be Revolving Base Rate Loans.
5.2 Increased
Costs.
If,
due
to either (a) the introduction of or any change in or in the interpretation
of
any law or regulation or (b) the compliance with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost or reduction in yield
or
rate of return to the Lender of agreeing to make or making or maintaining any
Revolving LIBOR Rate Loan or maintaining its Commitment with respect thereto
(other than an increase in income or franchise taxes imposed on them by the
jurisdiction under the laws of which the Lender is organized or the jurisdiction
in which Lender’s office is located), then the Borrower shall from time to time,
upon demand by the Lender pay to the Lender additional amounts sufficient to
compensate the Lender for such increased cost, reduction in yield or rate of
return, provided,
however,
that
similar compensation is also customarily demanded by the Lender from other
borrowers similarly situated and under similar circumstances. Any request for
payment under this Section
5.2
will be
submitted to the Borrower by the Lender identifying with reasonable specificity
the basis for and the amount of such increased cost.
5.3 Funding
Losses.
The
Borrower will indemnify the Lender against, and reimburse the Lender on demand
for any loss, cost or expense incurred or sustained by the Lender (including
without limitation, any loss or expense incurred by reason of the liquidation
or
redeployment of deposits or other funds acquired by the Lender to fund or
maintain any Loan) as a result of (a) any payment, conversion, rollover or
prepayment (whether authorized or required hereunder or otherwise) of all or
a
portion of any Revolving LIBOR Rate Loan on a day other than the last day of
the
LIBOR Interest Period for such Loan; (b) any payment, conversion, rollover
or
prepayment (whether required hereunder or otherwise) of any Loan consisting
of a
Revolving LIBOR Rate Loan made after the delivery of a notice of borrowing
delivered pursuant to Section
2.3(a)
(whether
oral or written) but before the proposed date for such Loan if such payment
or
prepayment prevents the proposed borrowing from becoming fully effective; (c)
after receipt by the Lender of a notice of borrowing delivered pursuant to
Section
2.3(a),
the
failure of any Loan to be made or effected due to any condition precedent to
a
borrowing not being satisfied or due to any other action or inaction of the
Borrower; or (d) any rescission of a notice of borrowing delivered pursuant
to
Section
4.2(a)
or a
notice of conversion delivered pursuant to Section
3.2.
If
Lender demands payment under this Section
5.3,
it
shall deliver to the Borrower a statement reasonably setting forth the amount
and manner of determining such loss, cost or expense. Compensation owing to
the
Lender as a result of any such loss, cost or expense resulting from a payment,
prepayment, conversion or rollover of a Revolving LIBOR Rate Loan shall include
without limitation, an amount equal to the present value (discounted at the
rate
of return for like-term U.S. Treasury obligations) of the sum of the amount
of
the interest that, but for such event, the Lender would have earned for the
remainder of the applicable LIBOR Interest Period plus
any
actual out-of-pocket expense or penalty incurred and paid by the
Lender.
21
5.4
Capital
Adequacy Requirements.
(a) If
the
Lender shall have determined that the adoption after the date of this Agreement
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein after the date of this Agreement, or any change in the
interpretation or administration thereof after the date of this Agreement by
any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Lender with
any
request or directive regarding capital adequacy (whether or not having the
force
of law) of any such authority, central bank or comparable agency issued after
the date of this Agreement, affects or would affect the amount of capital
required or expected to be maintained by the Lender, and that the amount of
such
capital requirement is increased, or has or would have the effect of reducing
the rate of return on the Lender’s capital to a level below that which the
Lender could have achieved but for such adoption, change or compliance, in
each
case as a consequence of its obligations hereunder (taking into consideration
the Lender’s policies with respect to capital adequacy), then the Borrower shall
pay to the Lender such additional amount or amounts as are reasonably determined
by the Lender to be sufficient to compensate the Lender in the light of such
circumstances, provided,
however,
that
similar compensation is also customarily demanded by the Lender from other
borrowers similarly situated and under similar circumstances.
(b) A
certificate of the Lender setting forth such amount or amounts as shall be
necessary to compensate the Lender as specified in Section
5.4(a)
above
shall be delivered as soon as practicable to the Borrower. The Borrower shall
pay the Lender the amount shown as due on any such certificate within fifteen
(15) days after the Lender delivers such certificate. In preparing such
certificate, the Lender may employ such assumptions and allocations of costs
and
expenses as it shall in good xxxxx xxxx reasonable and may use any reasonable
averaging and attribution method.
6. FEES.
6.1 Closing
Fee with Respect to Revolving Loan Commitment.
The
Borrower agrees to pay to the Lender at Closing, a closing fee (the “Closing
Fee”) in an amount equal to fifty (50) basis points (0.50%) of the entire amount
of the Revolving Loan Commitment.
22
6.2 Commitment
Fee with Respect to Revolving Loan Commitment.
The
Borrower agrees to pay to the Lender a monthly commitment fee on the average
daily unused portion of the Revolving Loan Commitment from the Closing Date
until the Maturity Date at the rate equal to 0.30% per annum, payable, with
respect to each monthly commitment fee, in arrears on the first day of each
month during the term of the Revolving Loan and on the Maturity Date. For
purposes of this Agreement, the unused portion of the Revolving Loan Commitment
for any measurement period shall be the positive difference, if any, of (x)
the
average daily amount of the Revolving Loan Commitment during such measurement
period, minus (y) the average daily outstanding advances made under the
Revolving Loan and the LC Obligations during such measurement period. Each
monthly commitment fee shall be fully earned on the date it becomes
payable.
6.3 Additional
Fees with Respect to LC’s.
The
Borrower agrees to pay to the Lender a quarterly fee in respect to each LC
issued hereunder, computed at the rate of 2.50% per annum on the face amount
of
such LC. The quarterly LC fees shall be due and payable in advance on the date
of issuance of each LC and then on the first day of each quarter thereafter
through the Maturity Date and thereafter if any of the LC’s or the LC
Obligations then remain outstanding. Each quarterly LC fee shall be fully earned
on the date it becomes payable.
6.4 Fees
Not Interest; Nonpayment.
The
fees
described in this Agreement represent compensation for services rendered and
to
be rendered separate and apart from the lending of money or the provision of
credit and do not constitute compensation for the use, detention, or forbearance
of money. The obligation of the Borrower to pay each fee described herein shall
be in addition to, and not in lieu of, the obligation of the Borrower to pay
interest, other fees described in this Agreement, and expenses otherwise
described in this Agreement. Fees shall be payable when due in immediately
available funds. All fees shall be non-refundable.
7. REPRESENTATIONS
AND WARRANTIES.
In
order
to induce the Lender to enter into this Agreement, the Borrower represents
and
warrants to the Lender 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 of any portion of the Loans and/or issuance of each
LC
except as otherwise disclosed in writing to the Lender.
7.1 Litigation
and Proceedings.
Except
as
set forth on Schedule
7.1,
no
judgments are outstanding against the Borrower, nor is there now pending or
threatened any litigation, contested claim, or governmental proceeding by or
against the Borrower, except for judgments and pending or threatened litigation,
contested claims and governmental proceedings which will not, in the aggregate,
have a Material Adverse Effect.
23
7.2 Other
Agreements.
Except
as
set forth on Schedule
7.2,
the
Borrower is not in default in any material respect 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, except as set forth on Schedule
7.2
or as
previously disclosed to the Lender in writing, relating to any contract, lease,
or commitment which is material to the continued financial success and
well-being of the Borrower.
7.3 Intellectual
Property.
The
Borrower’s licenses, patents, copyrights, trademarks and trade names and all of
the Borrower’s applications for any of the foregoing are set forth on
Schedule
7.3.
There
is no action, proceeding, claim or complaint pending or, to the best of the
Borrower’s knowledge, threatened to be brought against the Borrower by any
Person which might jeopardize the Borrower’s interest in any of the foregoing
licenses, patents, copyrights, trademarks, trade names or applications and
which
if determined adversely to the Borrower, would result in a Material Adverse
Effect. The Borrower owns or possesses (or will be licensed or otherwise have
the full right to use) all intellectual property which is necessary for the
operation of its businesses, without any known conflict with the rights of
others. To the knowledge of Borrower, no product of the Borrower infringes
upon
any intellectual property owned by any other Person and no claim or litigation
is pending or (to the knowledge of the Borrower) threatened against or affecting
such Person, contesting its right to sell or to use any product or material,
in
any case which could have a Material Adverse Effect. There is no violation
by
the Borrower of any right with respect to any material patent, trademark, trade
name, service xxxx, copyright or license owned or used by the
Borrower.
7.4 Title
to Assets.
Except
as
contemplated by this Agreement and except as set forth on Schedule
7.4
or as
permitted by Section
10.1,
the
Borrower owns all of its assets free and clear of all security interests, liens,
claims, and encumbrances. No goods held by the Borrower on consignment or under
sale or return contracts have been represented to be Inventory and no amounts
receivable by the Borrower in respect of the sale of such goods (except markups
or commissions which have been fully earned by the Borrower) have been
represented to be Accounts. The Borrower represents that all amounts in the
form
of ordinary trade payables which are owing to suppliers of any of the Inventory
have been paid in accordance with Section
9.13,
and
that none of such suppliers have asserted any interest in the Inventory.
7.5 Tax
Liabilities.
Borrower
has filed all Federal, state and other material tax returns and reports required
to be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them
or
their properties, income or assets otherwise due and payable, except those
which
are contested in good faith by appropriate proceedings diligently conducted
and
for which adequate reserves have been provided in accordance with GAAP. There
is
no proposed tax assessment against Borrower that would, if made, have a Material
Adverse Effect.
24
7.6 Existing
Indebtedness and Producer Payables.
Except
(i) for the Revolving Loan; (ii) the Subordinated Debt; (iii) as disclosed
on
Schedule
7.6;
and
(iv) as disclosed on the financial statements identified in Section
7.15
of this
Agreement, the Borrower has no other indebtedness, contingent obligations or
liabilities, outstanding bonds, letters of credit or acceptances to any other
Person or loan commitments from any other Person.
7.7 Other
Names.
The
Borrower has not, during the preceding five (5) years, used any other name,
except as disclosed on Schedule
7.7.
7.8 Subsidiaries.
As
of the
Closing Date, Borrower has no Subsidiaries other than those specifically listed
on Part
(a)
of
Schedule
7.8
and has
no equity investments in any other corporation or entity other than those
specifically disclosed on Part
(b)
of
Schedule
7.8.
7.9 Environmental
Matters.
Except
as
disclosed on Schedule
7.9,
(a) the
Borrower has not received any notice to the effect, or has any knowledge, that
its operations are not in compliance with any of the requirements of applicable
federal, state and local environmental, health and safety statutes and
regulations (“Environmental Laws”) or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to
a
release of any toxic or hazardous waste or substance into the environment,
which
non-compliance or remedial action could have a Material Adverse Effect; (b)
there has been no release of hazardous materials at, on or under any of the
properties of Borrower that, singly or in the aggregate, have, or may reasonably
be expected to have, a Material Adverse Effect; (c) to the knowledge of
Borrower, there are no underground storage tanks, active or abandoned, including
petroleum storage tanks, under any of the properties of Borrower that, singly
or
in the aggregate, have, or may reasonably be expected to have, a Material
Adverse Effect on the financial condition, operations assets, business or
prospects of the Borrower; (d) Borrower has not directly transported or directly
arranged for the transportation of any hazardous material to any location which
is listed or proposed for listing on the National Priorities List pursuant
to
CERCLA, on the CERCLIS or on any similar state list or which is the subject
of
federal, state and local enforcement actions or other investigations which
may
lead to material claims against the Borrower for any remedial work, damage
to
natural resources or personal injury, including claims under CERCLA; and (e)
except as disclosed on Schedule
7.9,
no
conditions exist at, on or under any of the properties of Borrower which, with
the passage of time, or the giving of notice or both, would rise to any material
liability under any Environmental Laws.
25
7.10 Bank
Accounts.
Schedule
7.10
sets
forth, as the Closing Date, the account numbers and location of primary bank
accounts (including lockbox accounts) of the Borrower.
7.11 No
Consent.
The
execution, delivery and performance by the Borrower of, and the effectuation
of
the transactions contemplated under, this Agreement, the Note and the other
Loan
Documents, and the borrowings hereunder by the Borrower as contemplated herein,
do not require the consent or approval of any other Person, except such consents
or approvals as have been obtained. The Borrower has not otherwise failed to
obtain any material governmental consent, approval, license, permit, franchise
or other governmental authorization necessary to the ownership of any of its
assets or properties or the conduct of its businesses.
7.12 Existence.
The
Borrower (a) is duly organized or formed, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and
(ii)
execute, deliver, and perform its obligations under the Loan Documents, and
(c)
is duly qualified and is licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or licenses, except for
those jurisdictions in which the failure to be so qualified would not, in the
aggregate, have a Material Adverse Effect.
7.13 Authority/Eligibility.
The
execution and delivery by the Borrower of this Agreement and by the Borrower
of
all of the other Loan Documents and the performance of the Borrower’s
obligations hereunder and thereunder (a) are within the Borrower’s
organizational powers; (b) are duly authorized by the Borrower’s board of
managers, and, if necessary, members; (c) are not in contravention of any law
or
laws, or the terms of Borrower’s articles of organization or operating agreement
or any other agreement, instrument or document relating to the Borrower’s
governance, or of any indenture, agreement or undertaking to which the Borrower
is a party or by which the Borrower or any of the Borrower’s property is bound;
(d) do not require any governmental consent, registration or approval; (e)
do
not contravene any contractual or governmental restriction binding upon the
Borrower; and (f) will not, except as contemplated or permitted by this
Agreement, result in the imposition of any lien, charge, security interest
or
encumbrance upon any property of the Borrower under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other material agreement
or
instrument to which the Borrower is a party or by which the Borrower or any
of
the Borrower’s property may be bound or affected. Furthermore, Borrower is an
eligible borrower under the Farm Credit Act and the regulations promulgated
thereunder.
26
7.14 Binding
Effect.
This
Agreement and all of the other Loan Documents set forth the legal, valid and
binding obligations of the Borrower and are enforceable against the Borrower
in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, moratorium or similar laws affecting creditors’ rights
generally and except as such enforcement may be limited by general principles
of
equity.
7.15 Correctness
of Financial Statements.
The
financial statements delivered by the Borrower to the Lender present fairly
the
financial condition of the Borrower and have been prepared in accordance with
GAAP consistently applied. As of the date of such financial statements, and
since such date, there have been no materially adverse change in the condition
or operation of the Borrower, nor has the Borrower mortgaged, pledged or granted
a security interest in or encumbered any of the Borrower’s assets since such
date.
7.16 Employee
Controversies.
There
are
no controversies pending or, to the best of Borrower’s knowledge, threatened
between the Borrower and any of the Borrower’s employees, other than employee
grievances arising in the ordinary course of business of the Borrower’s which
are not, in the aggregate, material to the continued financial success and
well-being of the Borrower.
7.17 Compliance
with Laws and Regulations.
The
Borrower is in compliance in all material respects with the requirements of
all
laws,
orders, regulations and ordinances of all federal, foreign, state and local
governmental authorities relating to the business operations and the assets
of
the Borrower, except for laws, orders, regulations and ordinances, the violation
of which would not have an adverse effect on the value of the Collateral or
the
Lender’s interest in any of the Collateral and, in the aggregate, would not have
a Material Adverse Effect.
7.18 Solvency.
The
Borrower is solvent, able to pay the Borrower’s debts generally as such debts
mature, and has capital sufficient to carry on the Borrower’s business and all
businesses in which the Borrower is about to engage. The Borrower shall not
be
rendered insolvent by the execution or delivery of this Agreement or of any
of
the other Loan Documents or by the transactions contemplated hereunder or
thereunder.
27
7.19 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
meet the minimum funding standards of Section 302 of ERISA.
7.20 Margin
Security.
The
Borrower does not own any margin security and none of the Loans shall be used
for the purpose of purchasing or carrying any margin securities or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase any margin securities or for any other purpose not permitted by
Regulations T, U or X of the Board of Governors of the Federal Reserve
System.
7.21 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. The Borrower is not in default under or in violation
of
any Governmental Requirement related to the Loans or any other Governmental
Requirement which default could have a Material Adverse Effect. Neither the
execution and delivery of the Loan Documents nor the consummation of the
transactions contemplated thereby, nor fulfillment of and compliance with the
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 imposition of any lien or security interest on any of the Collateral
pursuant to: (a) the charter, bylaws, operating agreement or partnership
agreement of the Borrower (b) any Governmental Requirement; (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 the Borrower or the Borrower’s property is bound or to which the Borrower
or the Borrower’s property is subject in any material respect.
7.22 Full
Disclosure.
All
factual information taken as a whole in the materials furnished by or on behalf
of the Borrower to the Lender for purposes of or in connection with the
transactions contemplated under this Agreement and the other Loan Documents,
does not contain any untrue statement of a material fact or omit to state any
material fact necessary to keep the statements contained therein from being
misleading as of the date of this Agreement. The financial projections and
other
financial information furnished to the Lender by Borrower and to be delivered
under Section
9.1
of this
Agreement, were prepared in good faith on the basis of information and
assumptions that the Borrower believed to be reasonable as of the date of such
information.
28
7.23 Survival
of Warranties.
All
representations and warranties contained in this Agreement or any of the other
Loan Documents shall survive the execution and delivery of this Agreement.
All
representations and warranties shall be deemed remade by the Borrower with
each
request for the making of a Loan or for the issuance of an LC except as
otherwise disclosed in writing to the Lender.
8. CONDITIONS.
8.1 Conditions
to All Loans.
The
obligation of the Lender to advance any Loan and the obligation of the Lender
to
issue any LC is subject to the satisfaction of the following conditions
precedent:
(a) Documents.
The
Borrower shall have executed and/or delivered to the Lender, appropriately
dated
and in form and substance satisfactory to the Lender, all of the documents
listed on the List of Closing Documents attached as Exhibit
8(a),
other
than those listed thereon as post-closing items.
(b) Actions
and Events.
(i) Payment
of Expenses.
There
shall have been paid all fees due on the Closing Date and all fees and expenses
of or incurred by the Lender and its counsel to the extent billed as of the
Closing Date and payable pursuant to this Agreement.
(ii) Insurance.
The
Lender shall have received evidence reasonably satisfactory to the Lender that
the Borrower has insurance meeting the requirements of Section
9.10.
(iii) No
Prohibitions.
No
law or
regulation shall prohibit, and no order, judgment or decree of any Governmental
Authority shall prohibit, and no litigation shall be pending or threatened
which
would enjoin, prohibit, restrain or otherwise adversely affect the consummation
of the transactions contemplated under the Loan Documents, or which would
otherwise have a material adverse effect on the financial condition, results
of
operations or business of the Borrower.
(iv) Material
Adverse Change.
No
change
shall have occurred with respect to the financial condition, business,
operations, marketing agreements or prospects of the Borrower since the dates
of
the most recent financial statement delivered to the Lender, which in the sole
discretion of the Lender, would result in a Material Adverse
Effect.
29
(v) Prior
Indebtedness.
The
Lender shall have received evidence or assurances satisfactory to the Lender
that any prior indebtedness listed on Schedule
8.01(b)(v)
shall be
paid in full on or before the Closing Date, and that any liens, encumbrances
or
security interests securing such prior indebtedness shall be released of record
substantially contemporaneously with the Closing Date.
(vi) Wiring
Instructions.
The
Lender shall have received wiring instructions with respect to the proceeds
of
the Revolving Loan on the Closing Date or the first Business Day
thereafter.
(vii) Collateral
Assignment of Supply and Purchase Agreements.
The
Lender shall have received from the Borrower collateral assignments of all
of
the Borrower’s supply and ethanol purchase agreements, and all of those other
documents/agreements as Lender may request to further collateralize this
Loan.
(viii) Approval
of the Lender’s Counsel.
Legal
matters, if any, relating to the Loans to be made on the Closing Date shall
have
been reviewed by and shall be satisfactory to counsel for the
Lender.
(ix) Compliance.
All
representations and warranties contained in this Agreement shall be true and
correct in all material respects as though made on and as of any date the
Borrower requests any Loan to be made or LC to be issued and on and as of the
date of the making of such Loan or the issuance of such LC.
(x) Lien
Search.
Lender
shall have received evidence satisfactory to Lender in its sole discretion,
that
Lender maintains and holds a perfected first priority lien and all of the
Borrower’s Collateral, subject to no other liens except for permitted liens as
may be determined by this Agreement or the Lender in its sole discretion,
including, but not limited to, any interim creditor agreements in connection
with the Loan.
(xi) Forecasts
and Budgets.
The
Borrower shall have delivered to the Lender annual operating and capital
forecasts, which forecasts and budgets shall be satisfactory in form and
substance to the Lender.
30
(xii) Licenses
and Permits.
The
Lender shall have received evidence satisfactory to the Lender that the Borrower
has all then necessary licenses and permits for operation of its
business.
(xiii) Legal
Opinion.
A
favorable opinion of counsel to Borrower as to such matters as Lender may
reasonably request.
(xiv) Subordination
Agreement.
A
subordination agreement executed by such Affiliates as determined by Lender,
in
a form satisfactory to Lender, subordinating payment of any future Affiliate
Debt to payment of the Liabilities and evidence satisfactory to Lender that
Subordinated Debt has been subordinated to the Loans and the Term Loan, in
form
and substance satisfactory to the Lender.
(xv) Title
Insurance.
An
ALTA
mortgagee title insurance policy issued by a title insurance company acceptable
to Lender, with respect to the Real Property as set forth on Schedule
8(b)(xv),
assuring the Lender that the Lender’s 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 (if
available), and (iii) such other endorsements as the Lender shall reasonably
require (the “Title Policy”). All such title insurance policies shall be in form
and substance reasonably satisfactory to the Lender and shall provide for
affirmative insurance and such reinsurance as the Lender may reasonably request,
all of the foregoing in form and substance reasonably satisfactory to the
Lender.
(xvi) Chapter
100 Documentation.
If
applicable, prior to the initial disbursement of funds on this Loan, Lender
shall have received and reviewed any applicable Chapter 100 bond financing
documentation of Borrower and, deemed in its sole discretion, that Lender’s lien
and/or collateral position is acceptable.
(xvii) Cost
and Expenses of Lender.
Payment
by Borrower of all costs, fees and expenses of Lender, including reasonable
expense of legal counsel, in connection with the Loan.
(c) Representations
and Warranties.
The
representations and warranties set forth in Section
7
shall be
true and correct in all material respects on the date of each Loan and on the
date of issuance of each LC, notwithstanding any disclosure by the Borrower
to
the Lender to the contrary. Each request by the Borrower for the making of
a
Loan or for the issuance of any LC, shall be and constitute a representation
and
warranty by the Borrower to the effect that all of the representations and
warranties set forth in Section
7
are true
and correct in all material respects as of the date of such request, and that
all conditions precedent to the making of such Loan or the issuance of such
LC
have been satisfied in all material respects as of the date of such
request.
31
(d) Covenants.
The
Borrower shall be in material compliance with all of the terms and provisions
of
the Loan Documents.
(e) No
Default.
There
shall not then exist a Default or a Matured Default under this Agreement or
under the Term Loan Agreement.
9. AFFIRMATIVE
COVENANTS.
So
long
as any Obligations remain unpaid or the Lender shall have any commitment
hereunder, the Borrower will, unless the Lender shall otherwise consent in
advance in writing:
9.1 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;
9.2 Visitation
Rights; Project Examination.
At any
reasonable time and from time to time, permit the Lender or representatives
thereof to, at the expense of Lender, examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, and
conduct unannounced 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 a Matured Default or in the event that there
are
deemed by the Lender 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 Matured 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 Lender or
representatives thereof, at the expense of the Lender, 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;
32
9.3 Reporting
Requirements.
Furnish
to the Lender:
(a) 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, 2008,
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 GAAP consistently applied,
for such year for the Borrower, certified, without qualification, in an opinion
reasonably acceptable to the Lender by independent public accountants reasonably
acceptable to the Lender;
(b) as
soon
as available after the end of each fiscal year beginning with December 31,
2008,
a copy of Borrower’s signed U.S. Income Tax return and accompanying schedules;
(c) commencing
with the first full calendar month following the commencement of ethanol
production at Borrower’s plant (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 GAAP consistently applied, for such calendar month for the
Borrower, certified by an authorized officer of the Borrower; together with
a
compliance certificate substantially in the form of Exhibit
9
attached
hereto and incorporated herein by this reference (the “Compliance
Certificate”);
(d) 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 Lender;
(e) promptly
upon the Lender'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;
(f) 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;
(g) 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;
33
(h) promptly
upon the occurrence of an Matured Default or an event or condition that but
for
the passage of time or the giving of notice or both would constitute a Matured
Default, notice of such Matured Default or event;
(i) 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;
(j) 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;
(k) 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
(l) such
other information respecting the condition or operations, financial or
otherwise, of the Borrower as the Lender may from time to time reasonably
request;
9.4 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 quarterly basis at
the
end of each quarter of not less than $28,000,000.00;
9.5 Minimum
Debt Service Coverage Rate. 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;
9.6 Minimum
Working Capital.
Maintain Working Capital of not less than $5,000,000.00 starting at the end
of
the second fiscal year following the Start-up Date and thereafter;
9.7. Minimum
Equity Percentage.
Maintain a minimum equity to total assets percentage of greater than
35.0%;
9.8 Liens.
There
shall be 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 for the
security interests of the Security Documents and except as permitted by
Section 10.1;
9.9 Landlord
and Mortgagee Waivers.
Obtain
and furnish to the Lender 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 Lender, except as otherwise agreed to by the
Lender;
34
9.10 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 operate, 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 Lender. Each insurance policy covering
Collateral shall be in compliance with the requirements of the Security
Documents;
9.11 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;
9.12 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 Uniform Commercial Code;
and (ii) will deliver all such receipts to the Lender (or a Person
designated by the Lender) within five (5) days of the Lender's request and
from time to time thereafter. If no Matured Default exists, the Lender agrees
to
promptly deliver to Borrower any receipt so held by the Lender upon such
Borrower’s request in connection with such Borrower’s sale or other disposition
of the underlying Inventory, if such disposition is in the ordinary course
of
Borrower's business;
9.13 Lender
Fees.
Borrower
shall pay to Lender all agent and facility fees as set forth in that certain
fee
letter between the Borrower and Lender dated June 27, 2006;
9.14 Maintain
Properties.
Maintain in good repair, working order and condition all material properties
used in the business of the Borrower;
9.15 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 Lender’s
reasonable discretion;
9.16 Borrower’s
Equity.
Borrower shall ensure that all of Borrower’s Equity is contributed to Borrower
by its members and shall, upon the request of Agent, provide Agent with an
accounting of all equity contributions actually received by
Borrower;
9.17 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
35
9.18 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 Affect, or (ii) such taxes, assessments
or other governmental charges are the subject of a good faith contest by the
Borrower.
10. NEGATIVE
COVENANTS.
The
Borrower covenants and agrees that, until the Liabilities are paid in full,
and
the Commitment of the LCs and all other obligations of the Lender are finally
terminated, the Borrower will not, without the prior written consent of the
Lender:
10.1 Liens,
etc.
Create
or suffer to exist, or permit 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 to assign, any right to receive income,
in each case to secure any Debt of any Person, other than the following liens
(“Permitted Liens”):
(a) those
described on Schedule 10.1(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;
(b) liens
or
security interests which are subject to an intercreditor agreement in form
and
substance acceptable to Lender in Lender's sole discretion;
(c) the
liens
or security interests of the Security Documents;
(d) 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;
(e) 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;
36
(f) 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
GAAP;
(g) 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);
(h) any
attachment or judgment lien not constituting a Matured Default;
(i) liens
arising from filing UCC financing statements regarding leases (including Capital
Leases) not prohibited by this Agreement;
(j) customary
offset rights of brokers and deposit banks arising under the terms of securities
account agreements and deposit agreements; and
(k) 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 commitment for the Title Policy and not objected to by
Lender; or
10.2 Distributions,
etc.
Declare
or pay any distributions or dividends, redeem, purchase 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 its Subsidiaries, if any, at any time while the Revolving Loan is
outstanding, 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 Lender may 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 (“Tax
Distributions”),
(provided, however, that this restriction will expire at the end of the third
operational year of the Borrower after the Start-up Date (as defined in the
Term
Loan Agreement) if the Borrower then has a minimum Working Capital of not less
than $10,000,000.00); or
10.3 Capital
Expenditures; Capital Leases.
At any
time while funds are outstanding under this Agreement, make any investment
in
fixed assets or enter into any capital lease in an aggregate amount greater
than
$3,000,000.00 during any fiscal year; or
10.4 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
10.5 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 Lender 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 10.1(a)
or
permitted by Section
10.1(a);
and
other unsecured Debt not to exceed in the aggregate $500,000.00 at any time
outstanding; or
37
10.6 Change
of Control.
(a) Replace
the Chief Executive Officer or the Chief Financial Officer of the Borrower
without providing written notice to the Agent at least thirty (30) days of
such
replacement; or
(b) 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
(c) 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.
10.7 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
10.8 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 Lender: (i) a
guaranty of all of the Obligations, in form and substance acceptable to the
Lender in its sole discretion; (ii) security agreements in form substantially
similar to the security agreement provided to Lender; and (iii) such other
documents and amendments to this Agreement and the other Loan Documents as
the
Lender shall require; or
10.9 Transfer
of Assets.
Sell,
lease, assign, transfer, or otherwise voluntarily dispose of any of its assets,
or permit 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
10.10 Lines
of Business. Engage
in
any line or lines of business activity other than the production and sale of
ethanol and byproducts thereof, including, but not limited to, DDGS;
or
10.11 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:
38
(a)
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;
(b) 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;
(c) 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
(d) 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.
11. DEFAULT
AND RIGHTS AND REMEDIES OF THE LENDER.
11.1 Acceleration.
Upon
a
Matured Default, the Lender shall promptly give notice of such Matured Default
to the Borrower and (a) with respect to any Matured Default described in clause
(i) of the definition thereof, all of the Liabilities shall automatically become
immediately due and payable and the obligations of the Lender to make Loans
and
the Commitments shall automatically terminate, without presentment, demand,
protest or further notice (including without limitation, notice of intent to
accelerate and notice of acceleration) of any kind, all of which are expressly
waived by the Borrower; and (b) with respect to any other Matured Default,
the
Lender may, by notice to the Borrower, (i) declare the obligations of the Lender
to make Loans and to issue LC’s to be terminated, whereupon such obligations and
the Commitments of the Lender shall forthwith terminate, and (ii) declare all
of
the Liabilities to be due and payable, whereupon the Liabilities shall become
and be due and payable, without presentment, demand, protest or further notice
(including without limitation, notice of intent to accelerate and notice of
acceleration) of any kind, all of which are expressly waived by the
Borrower.
11.2 Other
Remedies.
Upon
the
occurrence and during the continuance of any Matured Default, the Lender may
(subject to the provisions of the other Loan Documents), proceed to protect
and
enforce the rights of the Lender by suit in equity, by action at law or both,
whether for the specific performance of any covenant or agreement contained
in
this Agreement or in any other Financing Agreement or in aid of the exercise
of
any power granted in this Agreement or any other Financing Agreement, or may
proceed to enforce the payment of the Liabilities, or may proceed to foreclose
upon any liens, claims, security interests and/or encumbrances granted pursuant
to the Security Documents and other Loan Documents in the manner set forth
therein, it being intended that no remedy conferred herein or in any of the
other Loan Documents is to be exclusive of any other remedy, and each and every
remedy contained herein or in any other Financing Agreement shall be cumulative
and shall be in addition to every other remedy given hereunder and under the
other Loan Documents, or at any time existing at law or in equity or by statute
or otherwise.
39
12. MISCELLANEOUS.
12.1 Timing
of Payments.
For
purposes of determining the outstanding balance of the Liabilities, including
the computations of interest which may from time to time be owing to the Lender,
the receipt by the Lender of any check or any other item of payment whether
through a blocked account or lockbox or otherwise, shall not be treated as
a
payment on account of the Liabilities until such check or other item of payment
is actually received by the Lender at its office at Xxxxx Xxxx Xxxxx Xxxxx,
Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000 and is paid to the Lender in cash or a
cash
equivalent.
12.2 Attorneys’
Fees and Costs.
If
at any
time or times hereafter the Lender employs counsel in connection with protecting
or perfecting the Lender’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 pleadings; (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 Lender, to advise the Lender or to draft
documents in connection with any of the foregoing or in connection with any
release of the Lender’s claims or the Lender’s security interests or any
proposed extension, amendment or refinancing of the Liabilities; (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 Lender to collect any of the
Liabilities; then in any of such events, all of the reasonable attorneys’ fees
arising from such services, and any expenses, costs and charges relating
thereto, 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 provided
for in Section
3.1(c)
if a
Matured Default has occurred, or at the highest interest rate set forth in
any
promissory note referred to herein, shall constitute additional Liabilities,
payable on demand and secured by the Collateral.
12.3 Expenditures
by the Lender.
In
the
event that the Borrower shall fail to pay taxes, insurance, assessments, costs
or expenses which the Borrower is, under any of the terms hereof or of any
of
the other Loan Documents, required to pay, or fails to keep the Collateral
free
from other security interests, liens or encumbrances, except as permitted
herein, the Lender may, in its sole discretion and without obligation to do
so,
make expenditures for any or all of such purposes, and the amount so expended,
together with interest at the Default Rate provided
for in Section
3.1(c),
shall
constitute additional Liabilities, payable on demand and secured by the
Collateral.
40
12.4 Lender’s
Costs and Expenses as Additional Liabilities.
The
Borrower shall reimburse the Lender for all actual out-of-pocket expenses and
fees paid or incurred in connection with the documentation, negotiation and
closing of the loans and other financial accommodations described in this
Agreement (including without limitation, filing and recording fees, and the
reasonable fees and expenses of the Lender’s attorneys, paralegals and legal
assistants, and whether such expenses and fees are incurred prior to or after
the Closing Date). The Borrower further agrees to reimburse the Lender for
all
expenses and fees paid or incurred in connection with the documentation of
any
renewal or extension of the Loans, any additional financial accommodations,
or
any other amendments to this Agreement. All costs and expenses incurred by
the
Lender with respect to such negotiation and documentation together with interest
at the highest interest rate set forth in any promissory note referred to
herein, shall constitute additional Liabilities, payable on demand and secured
by the Collateral.
12.5 Claims
and Taxes.
The
Borrower agrees to indemnify and hold the Lender harmless from and against
any
and all claims, demands, liabilities, losses, damages, penalties, costs, and
expenses (including without limitation, reasonable attorneys’ fees) relating to
or in any way arising out of the possession, use, operation or control of any
of
the Borrower’s assets. The Borrower shall pay or cause to be paid all license
fees, bonding premiums and related taxes and charges, and shall pay or cause
to
be paid all of the Borrower’s real and personal property taxes, assessments and
charges and all of the Borrower’s franchise, income, unemployment, use, excise,
old age benefit, withholding, sales and other taxes and other governmental
charges assessed against the Borrower, or payable by the Borrower, at such
times
and in such manner as to prevent any penalty from accruing or any lien or charge
from attaching to the Borrower’s property, provided,
however,
that
the Borrower shall have the right to contest in good faith, by an appropriate
proceeding promptly initiated and diligently conducted, the validity, amount
or
imposition of any such tax, and upon such good faith contest to delay or refuse
payment thereof; if (a) the Borrower establishes adequate reserves to cover
such
contested taxes; and (b) such contest does not have a Material Adverse Effect
on
the financial condition of the Borrower, the ability of the Borrower to pay
any
of the Liabilities, or the priority or value of the Lender’s security interests
in the Collateral.
12.6 Inspection.
The
Lender (by and through its officers and employees), or any Person designated
by
the Lender in writing, shall have the right, from time to time hereafter, upon
72 hours prior notice, to call at the Borrower’s place or places of business (or
any other place where Collateral or any information relating thereto is kept
or
located) during Borrower’s regular business hours, and without hindrance or
delay, to: (a) inspect, audit, check and make copies of and extracts from the
Borrower’s books, records, journals, orders, receipts and any correspondence and
other data relating to the Borrower’s business or to any transactions between
the parties to this Agreement; (b) make such verification concerning the
Collateral as the Lender may consider reasonable under the circumstances; and
(c) review operating procedures, review maintenance of property and discuss
the
affairs, finances and business of the Borrower with the Borrower’s officers,
employees or directors.
41
12.7 Examination
of Banking Records.
The
Borrower consents to the examination by the Lender, the Lender’s officers,
employees and agents, or any of them, all of Borrower’s banking records, upon
their request. Such examination may be conducted by the Lender upon reasonable
notice to the Borrower.
12.8 Governmental
Reports.
The
Borrower authorizes all duly constituted federal, state and municipal
authorities to furnish to the Lender copies of their reports of examination
or
inspections of the Borrower.
12.9 Reliance
by the Lender.
All
covenants, agreements, representations and warranties made herein by the
Borrower shall, notwithstanding any investigation by the Lender, be deemed
to be
material to and to have been relied upon by the Lender.
12.10 Indemnification.
(a) General.
Borrower
agrees to indemnify and hold Lender and its directors, officers, employees,
agents, professional advisors and representatives (“Indemnified Parties”)
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses whatsoever which the Lender or any other Indemnified Party
may
incur (or which may be claimed against such Indemnified Party by any person),
including attorney’s 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 Lender 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 Lender or any other
Indemnified Party may incur (or which may be claimed against any such
Indemnified Party by any person), including attorney’s 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.
42
(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, except where the failure to comply would not reasonably
be expected to result in a Material Adverse Affect; 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; and Borrower shall comply with all
Environmental Laws, except where the failure to comply would not reasonably
be
expected to result in a Material Adverse Affect, which are applicable to such
property, except where the failure to comply would not reasonably be expected
to
result in a Material Adverse Affect. 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 7.9 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 Lender 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 Lender
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 Lender 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 Lender 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 Lender,
or anyone claiming by, through or under Lender 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 Documents. The indemnification
and covenants of this Section shall survive the termination of this Agreement
and other covenants.
43
12.11 Parties.
Whenever
in this Agreement there is reference made to any of the parties hereto, such
reference shall be deemed to include, wherever applicable, a reference to the
respective successors and assigns of the Borrower and the Lender.
12.12 Applicable
Law; Severability.
This
Agreement shall be construed in all respects in accordance with, and governed
by, the laws and decisions of the State of Missouri. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall
be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
12.13
SUBMISSION
TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY.
THE
BORROWER CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED WITHIN THE CITY AND COUNTY OF SAINT LOUIS, MISSOURI AND WAIVES ANY
OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR FORUM
NON CONVENIENS
TO THE
CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT. THE BORROWER FURTHER AGREES THAT
AT
ALL TIMES THE BORROWER SHALL HAVE AT LEAST ONE REGISTERED AGENT WITHIN THE
CONTINENTAL UNITED STATES OF AMERICA, WHICH AGENT SHALL ACCEPT ANY AND ALL
SERVICE OF PROCESS UPON THE BORROWER, AND THAT IN THE EVENT THE BORROWER FAILS
AT ANY TIME TO HAVE SUCH A REGISTERED AGENT, OR SUCH REGISTERED AGENT REFUSES
SUCH SERVICE OF PROCESS FOR ANY REASON WHATSOEVER, THEN SERVICE OF ANY AND
ALL
SUCH PROCESS UPON THE BORROWER MAY BE MADE BY MAIL OR MESSENGER DIRECTED TO
THE
BORROWER AT THE ADDRESS SET FORTH IN SECTION
12.19.
SERVICE
SO MADE SHALL BE DEEMED TO CONSTITUTE PERSONAL SERVICE UPON THE BORROWER, AND
SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE DAYS
AFTER
THE SAME SHALL HAVE BEEN POSTED TO THE BORROWER’S ADDRESS. AT THE OPTION OF THE
LENDER, THE BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY,
AND
WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS
WAIVER, BE REQUIRED OF THE LENDER. NOTHING IN THIS PARAGRAPH SHALL AFFECT THE
RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW
OR AFFECT THE RIGHT OF THE LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST
THE
BORROWER OR THE BORROWER’S PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
44
12.14 Application
of Payments Waiver.
Notwithstanding
any contrary provision contained in this Agreement or in any of the other Loan
Documents, the Borrower irrevocably waives the right to direct the application
of any and all payments at any time received by the Lender from the Borrower
or
with respect to any of the Collateral, and the Borrower irrevocably agrees
that
the Lender shall have the continuing exclusive right to apply and reapply any
and all payments received at any time or times hereafter, whether with respect
to the Collateral or otherwise, against the Liabilities, in such manner as
the
Lender may deem advisable, notwithstanding any entry by the Lender upon any
of
the Lender’s books and records.
12.15 Marshalling;
Payments Set Aside.
The
Lender shall be under no obligation to marshal any assets in favor of the
Borrower or against or in payment of any or all of the Liabilities. To the
extent that the Borrower makes a payment or payments to the Lender or the Lender
receives any payment or proceeds of the Collateral for the Borrower’s benefit or
enforces the Lender’s security interests or exercise the Lender’s rights of
set-off, and such payment or payments or the proceeds of such Collateral,
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state
or federal law, common law or equitable cause, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment
had
not been made or such enforcement or set-off had not occurred.
12.16 Section
Titles.
The
section titles contained in this Agreement shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement between
the parties.
12.17 Continuing
Effect.
This
Agreement, the Lender’s security interests in the Collateral, and all of the
other Loan Documents shall continue in full force and effect so long as any
Liabilities shall be owed to the Lender, or, in the event that there shall
be no
Liabilities outstanding, so long as the Lender remains committed to make Loans
under this Agreement.
12.18 No
Waiver.
The
Lender’s failure, at any time or times hereafter, to require strict performance
by the Borrower of any provision of this Agreement shall not waive, affect
or
diminish any right of the Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver by the Lender of any Default
or
Matured Default under this Agreement or any of the other Loan Documents, shall
not suspend, waive or affect any other Default or Matured Default under this
Agreement or any of the other Loan Documents, whether the same is prior or
subsequent thereto and whether of the same or of a different kind of character.
None of the undertakings, agreements, warranties, covenants and representations
of the Borrower contained in this Agreement or any of the other Loan Documents
and no Default or Matured Default under this Agreement or any of the other
Loan
Documents, shall be deemed to have been suspended or waived by the Lender unless
such suspension or waiver is in writing signed by an officer of the Lender
and
is directed to the Borrower specifying such suspension or waiver.
45
12.19 Notices.
All
notices and other communications provided for herein shall be in writing
(including telex, facsimile, or cable communication) and shall be mailed,
telexed, cabled or delivered addressed as follows:
(i) If
to the
Lender at:
FCS
Financial, PCA
Xxxxx
Xxxx Xxxxx Xxxxx, Xxxxx 000
Xx.
Xxxxx, XX 00000
Fax
No.
(000) 000-0000
Attn:
Xxxx Xxxxxxxxxxx
With
a
copy to:
Husch
& Eppenberger, LLC
0000
X.
Xxxxxxxx Xx., Xxxxx 0-000
Xxxxxxxxxxx,
XX 00000
Fax
No.
(000) 000-0000
Attn:
Xxxx X. Xxxxxx
(ii) If
to the
Borrower at:
000
Xxxx
Xxxx
Xxxx
Xxxxxx Xxx 000
Xxxxxxxx,
XX 00000
Fax
No.
(000) 000-0000
Attn:
Xxxx Xxxxxxxx
With
a
copy to:
Xxxxx
Xxxx LLP
3500
One
Kansas City Place
0000
Xxxx
Xxxxxx
Xxxxxx
Xxxx, XX 00000
Fax
No.
(000) 000-0000
Attn:
Xxxxxx X. Alt
and,
as
to each party hereto, at such other address as shall be designated by such
party
in a written notice to the other parties hereto. All such notices and
communications shall, when mailed, telecopied, telexed, transmitted, or cabled,
become effective when deposited in the mail, confirmed by telex answerback,
transmitted by telecopier, or delivered to the cable company, respectively
except that notices and communications to the Lender shall not be effective
until actually received by the Lender.
46
12.20 Maximum
Interest.
No
agreements, conditions, provisions or stipulations contained in this Agreement
or in any of the other Loan Documents, or any Matured Default, or any exercise
by the Lender of the right to accelerate the payment of the maturity of
principal and interest, or to exercise any option whatsoever, contained in
this
Agreement or any of the other Loan Documents, or the arising of any contingency
whatsoever, shall entitle the Lender to collect, in any event, interest
exceeding the Highest Lawful Rate, and in no event shall the Borrower be
obligated to pay interest exceeding the Highest Lawful Rate, and all agreements,
conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel the Borrower to pay a rate of
interest exceeding the Highest Lawful Rate, shall be without binding force
or
effect, at law or in equity, to the extent only of the excess of interest over
such Highest Lawful Rate. In the event any interest is charged in excess of
the
Highest Lawful Rate (“Excess”), the Borrower acknowledges and stipulates that
any such charge shall be the result of any accidental and bona fide error,
and
such Excess shall be, first, applied to reduce the principal of any Liabilities
due, and, second, returned to the Borrower, it being the intention of the
parties hereto not to enter at any time into a usurious or otherwise illegal
relationship. The Borrower and the Lender both recognize that, with fluctuations
in the Base Rate and the LIBOR Rate, such an unintentional result could
inadvertently occur. By the execution of this Agreement, the Borrower covenants
that (a) the credit or return of any Excess shall constitute the acceptance
by
the Borrower of such Excess and (b) the Borrower shall not seek or pursue any
other remedy, legal or equitable, against the Lender based, in whole or in
part,
upon the charging or receiving of any interest in excess of the Highest Lawful
Rate. For the purpose of determining whether or not any Excess has been
contracted for, charged or received by the Lender, all interest at any time
contracted for, charged or received by the Lender in connection with the
Liabilities shall be amortized, prorated, allocated and spread in equal parts
during the entire term of this Agreement.
12.21 Lender’s
Reliance.
The
Borrower shall notify the Lender in writing of the names of the Persons
authorized to request a Loan on behalf of the Borrower and shall provide the
Lender with a specimen signature for each such Person. The Lender shall be
entitled to rely conclusively on such Person’s authority to request a Loan on
behalf of the Borrower until the Lender receives written notice from the
Borrower to the contrary. The Lender shall have no duty to verify the
authenticity of the signature appearing on any notice of borrowing, and with
respect to any oral request for a Loan, the Lender shall have no duty to verify
the identity of any Person representing himself as one of the Persons authorized
to make such request on behalf of the Borrower. The Lender shall not incur
any
liability to the Borrower in acting upon any telephonic notice referred to
above
which the Lender believes in good faith to have been given by a duly authorized
Person authorized to borrow on behalf of the Borrower or for otherwise acting
in
good faith.
47
12.22 Counterparts.
This
Agreement may be executed in several counterparts, and by the parties hereto
on
separate counterparts, and each counterpart, when so executed and delivered,
shall constitute an original instrument, and all such separate counterparts
shall constitute but one and the same instrument.
12.23 Participations.
(a) The
Lender may sell participations to one or more banks or other entities in or
to
all or a portion of its rights and obligations under this Agreement (including
without limitation, all or a portion of the Commitments and the Note held by
it); provided,
however,
that
(i) the Lender’s obligations under this Agreement (including without limitation,
its Commitments to the Borrower) shall remain unchanged, (ii) the Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Lender shall remain the holder of any such Note
for
all purposes of this Agreement, (iv) the sale of the participation will not
cause the Borrower to incur any additional liability, and (v) the Borrower
shall
continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations under this Agreement, provided
that no
participant shall be entitled to recover under the above provisions an amount
in
excess of the proportionate share which such participant holds of the original
aggregate principal amount to which the Lender would otherwise be
entitled.
(b) The
Lender may, in connection with any participation pursuant to this Section
12.23,
and
with the consent of Borrower (which consent shall not be unreasonably withheld)
disclose to the participant or proposed participant, any confidential
information relating to the Borrower furnished to the Lender by or on behalf
of
the Borrower; provided,
however,
that
prior to any such disclosure, the participant or proposed participant shall
agree to preserve the confidentiality of any confidential information relating
to the Borrower received by it from the Lender.
12.24 Credit
Agreement Controls.
If
there
are any conflicts or inconsistencies among this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall prevail and
control.
12.25 Confidentiality.
The
Lender agrees that it will use its best efforts to keep confidential, in
accordance with its customary procedures for handling confidential information
and in accordance with safe and sound banking practices, any proprietary
information of the Borrower in writing by the Borrower, as being proprietary
and
confidential; provided
that the
Lender may disclose any such information (a) to enable it to comply with any
Governmental Requirement applicable to them, (b) in connection with the defense
of any litigation or other proceeding brought against it arising out of the
transactions contemplated by this Agreement and the other Loan Documents, (c)
in
connection with the supervision and enforcement of the rights and remedies
of
the Lender under any Financing Agreement, and (d) as set forth in Section
12.23(b).
48
12.26 Independence
of Covenants.
All
covenants under Section
10
shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by
an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default or a Matured Default if such action is
taken or condition exists.
12.27 Amendments
and Waivers.
Any
term,
covenant, agreement or condition of this Agreement may be amended only by a
written amendment executed by the Borrower and the Lender, or compliance
therewith may only be waived (either generally or in a particular instance
and
either retroactively or prospectively), if the Borrower shall have obtained
the
consent in writing of the Lender.
12.28 FINAL
AGREEMENT.
THIS
WRITTEN AGREEMENT, THE NOTE, 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.
12.29 Privacy.
Your
privacy is important to us. We want you to know that we hold your financial
and
other personal information in strict confidence. Since 1972, Farm Credit
Administration (“FCA”) regulations have forbidden the directors and employees of
Farm Credit institutions from disclosing personal borrower information to others
without your consent. We do not sell or trade our customer’s personal
information to marketing companies or information brokers. FCA rules allow
us to
disclose customer information only in these situations: We may give it to
another Farm Credit institution that you do business with. We can be a credit
reference for you with other lenders and provide information to credit bureaus
or other consumer reporting agency. We can provide information on certain types
of legal or law enforcement proceedings. FCA examiners may review loan files
during regular examinations of the association. If one of our employees applies
to become a licensed real estate appraiser, we may give copies of real estate
appraisal reports to the State agency that licenses appraisers when required.
We
will first remove as much personal information from the appraisal report as
possible. As a member/owner of the association, your privacy and the security
of
your personal information are vital to our continued ability to serve your
ongoing credit needs.
49
12.30 Customer
Identification - USA Patriot Act Notice.
Lender
notifies the Borrower that, pursuant to the requirements of the USA PATRIOT
ACT
of 2001 (H.R. 3162 RDS), signed into law October 26, 2001 (the “Patriot Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow the Lender to identify Borrower in accordance
with the Patriot Act.
The
Borrower shall (a) ensure that no person who owns a controlling interest in
or
otherwise controls the Borrower or any Affiliate of Borrower is or shall be
listed on the Specially Designated Nationals and Blocked Person List or other
similar lists maintained by the Office of Foreign Asset Control (“OFAC”), the
Department of the Treasury, or included in any Governmental Requirements, (b)
not use or permit the use of the proceeds of the Revolving Loan to violate
any
of the foreign asset control regulations of OFAC or any enabling statute or
relevant Governmental Requirements relating thereto, and (c) comply, and cause
each Affiliate of Borrower to comply, with all applicable Bank Secrecy Act
laws
and regulations, as amended.
12.31. 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
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that Lender may have had notice or knowledge of
a
Matured 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 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 Obligations, the
expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.
[remainder
of page intentionally left blank]
50
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first written above.
|
BORROWER:
By
/s/Xxxxxxx X. Xxxxxx
Name
Xxxxxxx
X. Xxxxxx
Title
General
Manager
LENDER:
FCS
FINANCIAL, PCA
By
/s/Xxx Xxxxx
Name:
Xxx Xxxxx
Title:
Vice President
|
51
CREDIT
AGREEMENT
LIST
OF EXHIBITS AND SCHEDULES
|
Exhibit
Numbers
|
Description
|
|
1A
|
Borrowing
Base Computation
|
|
1B
|
Form
of Borrowing Base Certificate
|
|
|
|
|
2
|
Form
of Revolving Note
|
|
|
|
|
4.5
|
Form
of Term Loan Inter-Creditor Agreement
|
|
8(a)
|
List
of Closing Documents
|
|
|
|
|
9
|
Form
of Compliance Certificate
|
|
Schedule
Numbers
|
Description
|
|
7.1
|
Litigation
|
|
|
|
|
7.2
|
Other
Agreements
|
|
|
|
|
7.3
|
Intellectual
Property
|
|
7.4
|
Title
to Assets
|
|
7.6
|
Existing
Indebtedness
|
|
7.7
|
Other
Names
|
|
|
|
|
7.8
|
Subsidiaries
|
|
|
|
|
7.9
|
Environmental
Matters
|
|
7.10
|
Bank
Accounts
|
|
8(b)(v)
|
Prior
Indebtedness
|
|
10.1(a)
|
Encumbrances
|
52
EXHIBIT
1A
BORROWING
BASE COMPUTATION
|
This
Borrowing Base Certificate is hereby prepared and delivered in accordance
with the terms of the Revolving Credit Agreement dated November 6,
2007
(the "Credit Agreement"), as may be amended from time to time, between
Show Me Ethanol, LLC (the "Borrower"), FCS Financial, PCA (the
"Lender.")
|
||||||||||||
|
For
the Fiscal Period Ending:
|
|
Date
Prepared:
|
|
|||||||||
|
Lower
of
|
|
|
|
|||||||||
|
|
|
|
|
|
|
Cost
or Market
|
|
|
Availability
|
|||
|
A.
|
Accounts
Receivables
|
|||||||||||
|
Less
Accounts Greater than 30 days
|
|
75%
|
$0.00
|
|||||||||
|
B.
|
Corn
and Distiller's Grain Inventory
|
|
75%
|
$0.00
|
||||||||
|
C.
|
Ethanol
Inventories
|
|
75%
|
$0.00
|
||||||||
|
D.
|
Total
Collateral
|
$0.00
|
||||||||||
|
E.
|
Less
accounts payable
|
|
||||||||||
|
F.
|
Total
Borrowing Base (D minus E)
|
$0.00
|
||||||||||
|
G.
|
Total
Revolving Line of Credit Commitment
|
$5,000,000.00
|
||||||||||
|
H.
|
Maximum
Borrowings on the Borrowing Base (lesser of Line F or Line
G)
|
$0.00
|
||||||||||
|
I.
|
Outstanding
Revolving Line of Credit balance and Letters of Credit
|
|
||||||||||
|
J.
|
Availability
on the Borrowing Base (Line H minus Line I)
|
$0.00
|
||||||||||
|
K.
|
Open
Commitment
|
$2,000,000.00
|
||||||||||
|
L.
|
Availability
on the Open Commitment (Line K minus Line I)
|
$2,000,000.00
|
||||||||||
|
M.
|
Total
Availability (greater of line J or L)
|
$2,000,000.00
|
||||||||||
|
The
Borrower does hereby warrant (a) the Borrowing Base Certificate and
attached supporting documents are true and accurate, (b) no information
has been omitted that would cause the Borrowing Base Certificate
to be
misleading in any material manner, (c) no significant changes have
occurred in the Borrowing Base values since the Date Prepared, and
(d) the
Borrowing Base includes only those assets that are and will continue
to be
subject to first lien security position in favor of the Lender.
|
||||||||||||
|
On
behalf of the Borrower, I hereby certify the information contained
herein
as true and complete.
|
||||||||||||
|
By:
|
|
|||||||||||
|
Chief
Financial Officer
|
||||||||||||
53
EXHIBIT
1B
FORM
OF BORROWING BASE CERTIFICATE
This
Borrowing Base Certificate is hereby prepared and delivered in accordance with
the terms of the Revolving Credit Agreement dated November 6, 2007 (the “Credit
Agreement”), as may be amended from time to time, between Show
Me Ethanol, LLC
(the
“Borrower”), FCS
Financial, PCA
(the
“Administrative Agent”) and other financial lending institutions (collectively,
the "Lenders").
For
the
Fiscal Period Ending:
Date
Prepared:
The
Borrower does hereby warrant (a) the Borrowing Base Certificate and attached
supporting documents are true and accurate, (b) no information has been omitted
that would cause the Borrowing Base Certificate to be misleading in any material
manner, (c) no significant changes have occurred in the Borrowing Base values
since the Date Prepared, and (d) the Borrowing Base includes only those assets
that are and will continue to be subject to first lien security position in
favor of the and Lender.
On
behalf
of the Borrower, I hereby certify the information contained herein as true
and
complete.
By:_________________________________
Name:
Title:
54
EXHIBIT
2
FORM
OF REVOLVING NOTE
55
EXHIBIT
4.5
FORM
OF TERM LOAN INTERCREDITOR AGREEMENT
56
EXHIBIT
8(a)
LIST
OF CLOSING DOCUMENTS
| 1. |
Credit
Agreement
|
| 2. |
$5,000,000
Revolving Note
|
57
EXHIBIT
9
COMPLIANCE
CERTIFICATE
Pursuant
to Section
9
of the
Revolving Credit Agreement dated as of the date hereof, as the same be amended,
replaced, restated, or supplemented from time to time (the “Credit Agreement”)
by and between Show
Me Ethanol, LLC
(the
“Borrower”) and FCS
Financial, PCA
a
federally Chartered instrumentality (“Lender”), the undersigned certifies to
Lender as follows (with capitalized terms not defined herein having the meaning
given to such terms in the Credit Agreement):
| 1. |
The
financial statements of Borrower attached hereto for the fiscal month
ending __________, 200___ (the “Financial Statements”) have been prepared
in accordance with the requirements of Section 9 of the Credit
Agreement.
|
| 2. |
The
representations and warranties contained in Section 7 of the Credit
Agreement are true and correct as or the date hereof as through made
on
this date.
|
| 3. |
Borrower
is in compliance with all of the affirmative and negative covenants
set
forth in Sections 9 and 10 of the Credit Agreement as of the date
hereof.
|
| 4. |
Specifically,
as of the date of the Financial
Statements:
|
| a) |
Borrower’s
Total Net Worth is required to be not less than $28,000,000.00 as
of the
end of each quarter end. Borrower’s actual Net Worth is as of the most
recent fiscal quarter end $_____________.
|
| b) |
Borrower’s
Debt Service Coverage Ratio is required to be not less than 1.25
to 1.0 as
of the end of each fiscal month end. Borrower’s actual Debt Service
Coverage Ratio as of the end of the most recent month end is
_____________.
|
Dated
:__________________,
200_____
Show
Me
Ethanol, LLC
By:
Name:
_____________________________________
Title:
______________________________________
58
SCHEDULE
7.1
LITIGATION
None.
59
SCHEDULE
7.2
OTHER
AGREEMENTS
None.
60
SCHEDULE
7.3
INTELLECTUAL
PROPERTY
None.
61
SCHEDULE
7.4
TITLE
TO ASSETS
None.
62
SCHEDULE
7.6
EXISTING
INDEBTEDNESS
Commitment
of X.X. Xxxxx to finance natural gas pipeline.
63
SCHEDULE
7.7
OTHER
NAMES
None.
64
SCHEDULE
7.8
SUBSIDIARIES
None.
65
SCHEDULE
7.9
ENVIRONMENTAL
MATTERS
None.
66
SCHEDULE
7.10
BANK
ACCOUNTS
FCS
Financial - No. 1178302700 - Farm Cash Management Account
67
SCHEDULE
8(b)(v)
PRIOR
INDEBTEDNESS
$48,000,000
Construction and Term Indebtedness to FCS Financial and other
lenders.
68
SCHEDULE
8(b)(xv)
REAL
PROPERTY
69
SCHEDULE
10.1
ENCUMBRANCES
Liens
to
X.X. Xxxxx
70
