THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT
EXHIBIT
10.2
THIRD AMENDMENT
TO
THIS THIRD AMENDMENT TO REVOLVING
CREDIT AGREEMENT (this “Third Amendment”) is made as of the 31st day of March,
2009 (the “Effective Date”), 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, on November 6, 2007, the
Parties entered into that certain Revolving Credit Agreement (the “Agreement”),
wherein, among other things, Lender provided funds to Borrower in connection
with the Project and the operation thereof; and
WHEREAS, on June 2, 2008, the Parties
entered into that certain First Amendment to Revolving Credit Agreement (“First
Amendment”), and on December 12, 2008, the Parties entered into that certain
Second Amendment to Revolving Credit Agreement (the “Second Amendment”);
and
WHEREAS, Borrower and Lender hereby
desire to amend the Revolving Credit Agreement as set forth herein;
NOW,
THEREFORE, in consideration of the foregoing and of the terms and conditions
contained in this Amendment, and of any loans or extensions of credit or other
financial accommodations at any time made to or for the benefit of Borrower by
the Lender, the Borrower and Lender agree as follows:
1. General
Definitions. The Parties hereto acknowledge and agree that the
following defined terms shall be deleted from Section 1.1 “General
Definitions” and amended as follows:
““EBITDA” shall mean
Borrower’s earnings before interest, taxes, depreciation, and
amortization.
“Equity Drive” shall
mean Borrower’s voluntary request of its members for the contribution of a
minimum of $5,700,000.00 in cash or other form of equity on or before April 1,
2009.
“Existing Corn
Contracts” shall mean those certain forward corn purchase contracts by
and between the Borrower and Xxx-Xxxxxxx as set forth on Exhibit B attached to the
Third Amendment.
“Fixed Charge Coverage
Ratio” shall mean the ratio of the Borrower’s EBITDA to the Borrower’s
current portion of long term debt, interest expense, tax distributions,
dividends and capital expenditures.
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“Hedging Policy” shall
mean the Borrower’s policy regarding the purchase and sale of corn, DDG, ethanol
and/or natural gas, as approved by Borrower’s board of managers.
“Maturity Date” shall
mean June 2, 2010.
“Minimum Equity
Percentage” shall mean the percentage value of Borrower’s equity divided
by Borrower’s total assets.
“Railroad Spur
Easement” shall mean that certain Railroad Spur Easement dated January 9,
2007, by and between Xxx-Xxxxxxx and Borrower.
“Xxx-Xxxxxxx Subordinated
Loan” shall mean a loan in the amount of approximately $12,000,000
evidenced by a Subordinated Secured Promissory Note due in March of 2014 between
Xxx-Xxxxxxx and Borrower to settle the Existing Corn Contracts.
“Working Capital”
means current assets of the Borrower, less current liabilities (excluding the
then current portion of the Long Term Debt) of the Borrower; provided, however,
the Member Loan and the Xxx-Xxxxxxx Subordinated Loan shall each be excluded as
a Debt in the determination of Working Capital until such time as the Member
Loan or the Xxx-Xxxxxxx Subordinated Loan is then currently due and
owing.”
Additionally, a new subsection (v) of
the “Matured Default” definition shall be inserted and read as
follows:
“(v) Any
default under the Xxx-Xxxxxxx Subordinated loan beyond the applicable cure
periods.”
Furthermore, the definition of
“Subordinated Debt” shall be deleted in its entirety and replaced with the
following:
““Subordinated
Debt” shall mean any and all Debt of Borrower held by any person other than
Lender or any Term Loan Lender, including, without limitation, the Member Loan
and the Xxx-Xxxxxxx Subordinated Loan.”
2. Affirmative
Covenants. The Parties hereto acknowledge and agree that the
following items in Section 9
“AFFIRMATIVE COVENANTS” shall be deleted in their entirety and replaced with the
following:
“9.4 Net
Worth. Maintain as of the Closing Date Total Net Worth not
less than $31,995,000.00. Thereafter, from the Closing Date until
September 29, 2008, maintain at all times Total Net Worth measured on a
quarterly basis at the end of each quarter of not less than $28,000,000.00, and
for the period between September 30, 2008 and March 31, 2009, Total Net
Worth not less than $14,000,000.00 as measured on a monthly
basis. Following April 1, 2009 through the Maturity Date, Borrower
shall not be required to maintain a minimum Total Net Worth.
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9.5 Minimum Fixed Charge
Coverage Ratio. Maintain a minimum Fixed
Charge Coverage Ratio of (a) not less than.70:1.00 for the period of January 1,
2009 through December 31, 2009 and (b) not less than 1.05:1:00 for the period of
January 1, 2010 through the Maturity Date.
9.6 Minimum Working
Capital. From April 1, 2009
through and including December 31, 2009, maintain Working Capital in an amount
not less than $3,000,000.00, and from January 1, 2010 through the Maturity Date
in an amount not less than $3,500,000.00.
9.7 Minimum Equity
Percentage. Maintain a Minimum Equity Percentage of greater
than thirty-five percent (35%) for those periods measured between the Closing
Date and September 29, 2008, and for the period September 30, 2008 through March
31, 2009, maintain a Minimum Equity Percentage of no less than seventeen percent
(17%), as measured on a monthly basis. Following April 1, 2009
through the Maturity Date, Borrower shall not be required to maintain a Minimum
Equity Percentage.”
The
Parties hereto acknowledge and agree that Section 9 shall be
amended by adding the following additional affirmative covenants to the
Agreement and shall read as follows:
“9.19 Financing/Equity
Opportunities. On or before December 31, 2010, Borrower shall
retain a financial advisor to assist the Borrower in evaluating potential
financing or sale transactions.
9.20 Plant
Manager. On or before May 1, 2009, Borrower must either (i)
retain a plant manager to operate the Project; or (ii) enter into a consulting
agreement with an individual or company to provide ongoing assistance with the
operation of the Project.
9.21 Risk
Management. On or before May 1, 2009, Borrower must retain a
risk manager to assist the Borrower in managing the Borrower’s commodity risk
and assist in compliance with the Hedging Policy.
9.22 Amendment to Air
Permit. On or before December 31, 2009, Borrower shall prepare
a report outlining the feasibility obtaining an individual and permanent air
permit with the State of Missouri on terms and conditions as shall be reasonably
acceptable Lender.”
3. Negative
Covenants. The Parties hereto acknowledge and agree that Section 10 “Negative
Covenants” shall be amended as follows:
“10.12 Engage
in any activity which materially violates the Hedging Policy, including, but not
limited to, entering into any forward contracts with Xxx-Xxxxxxx, without proper
risk management authorization; provided, however, the failure
of Borrower to maintain compliance with the Hedging Policy, as reported to
Lender on a weekly basis, shall only be an Matured Default in the event Borrower
fails to maintain compliance in three (3) consecutive weeks or in more than
seven (7) weeks in a given twelve (12) month period.
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10.13 Suspend,
eliminate or materially modify or amend the Hedging Policy without Agent’s prior
written consent; provided, however, on or before
July 1, 2009, the Borrower, with the mutual agreement of the Agent and the
advice of Borrower’s risk manager shall prepare an updated Hedging Policy which
shall take into account Borrower’s increased capacity and current
efficiencies. Following completion of the updated Hedging Policy and
notwithstanding the foregoing, upon delivery of advanced written notice to
Agent, Borrower may temporarily suspend, modify or amend the Hedging Policy for
a period of not to exceed fifteen (15) days for a business reason in the sole
judgment of the Borrower’s Board of Managers and following the temporary
suspension, modification or amendment of the Hedging Policy the Borrower and
Agent shall, if required, mutually agree upon provisions implementing the
temporary suspension, modification or amendment.”
4. Reporting
Requirements. The Parties hereto acknowledge and agree that
subsections (m) and (n) of Section 9.3 shall be
amended to read as follows:
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“(m)
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As
soon as reasonably available, Borrower's updated weekly rolling thirteen
(13) week cash flow analysis in a form and substance reasonably acceptable
to Lender.
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(n)
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As
soon as reasonably available, Borrower’s updated weekly detailed report of
Borrower’s hedging positions and a certificate of compliance with the
Hedging Policy from an authorized officer of
Borrower.”
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5. Consent to Additional
Indebtedness. By execution of this Third Amendment, Lender
hereby consents to Borrower incurring additional Indebtedness in the form of the
Xxx-Xxxxxxx Subordinated Loan.
6. Conditions Precedent to this
Third Amendment. The Parties hereto acknowledge and agree that
following shall be conditions precedent to the execution and delivery of this
Amendment by Lender:
6.1 Execution of the Third
Amendment to Revolving Note. Borrower shall have executed and
delivered to Lender the Third Amendment to Revolving Note, in the form attached
hereto as Exhibit
A.
6.2 Updated Borrower’s Cash Flow
Analysis. Borrower shall have delivered to Lender Borrower’s
updated weekly rolling thirteen (13) week cash flow analysis in a form
acceptable to Lender.
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6.3 Current Hedging Report;
Hedging Policy. Borrower shall have delivered to Lender,
Borrower’s current report on its hedging positions in a form and substance
reasonably acceptable to Lender and a copy of the Hedging Policy.
6.4 Completion of Equity
Drive. Completion of the Equity Drive and the placement of all
contributed funds in a designated Borrower bank account.
6.5 Settlement of Existing Corn
Contracts. Borrower and Xxx-Xxxxxxx shall have entered into an
agreement, on terms reasonably acceptable to Lender and the Term Loan Lender,
for the cancellation or settlement of the amounts owed and the delivery of all
remaining bushels of corn under the Existing Corn Contracts.
6.6 Intercreditor Agreement with
Xxx-Xxxxxxx. Term Loan Lender, Borrower and Xxx-Xxxxxxx shall
have entered into an intercreditor agreement, acceptable to Lender and the Term
Loan Lender.
6.7 Financial
Forecasts. Borrower shall have delivered to Lender Borrower’s
revised twelve (12) month financial forecast and Borrower’s five (5) year
financial forecast, both of which shall be acceptable to Lender, in its sole
discretion.
7. SUBMISSION TO JURISDICTION;
WAIVER OF BOND AND TRIAL BY JURY. The Parties hereto
acknowledge and agree that Section 12.13
“Submission to Jurisdiction; Waiver of Bond and Trial by Jury” shall be amended
by deleting the first full sentence thereof and inserting the
following:
“THE
BORROWER CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED WITHIN THE 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.”
8. Reaffirmation of Previous
Terms and Conditions. All of the remaining terms and
conditions of the Agreement, as amended, where not inconsistent with the above,
shall remain the same and are hereby republished, reaffirmed and restated as of
the date hereof.
9. Statutory Notice Pursuant to
RSMO § 432.047.3(1). “Oral agreements or commitments to
loan money, extend credit or to forbear from enforcing repayment of a debt
including promises to extend or renew such debt are not enforceable, regardless
of the legal theory upon which it is based that is in any way related to the
credit agreement. To protect you (borrower(s)) and us (creditor) from
misunderstanding or disappointment, any agreements we reach covering such
matters are contained in this writing, which is the complete and exclusive
statement of the agreement between us, except as we may later agree in writing
to modify it.”
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IN WITNESS WHEREOF, the Parties hereto
have duly executed this Third Amendment as of the date first written
above.
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| SHOW ME ETHANOL, LLC | ||
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By
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Name
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Title
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| LENDER: | ||
| FCS FINANCIAL, PCA | ||
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By
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Name
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Title
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EXHIBIT
A
Amendment
to Revolving Note
THIRD AMENDMENT TO REVOLVING
NOTE
THIS THIRD AMENDMENT TO REVOLVING NOTE
(“Third Amendment”) is entered into as of the 31st day of March, 2009, by and
between SHOW ME ETHANOL, LLC, a Missouri limited liability company (hereinafter
referred to as “Borrower”), and FCS FINANCIAL, PCA, (hereinafter referred to as
“Lender”)
WITNESSETH:
WHEREAS,
Lender is the owner and holder of a Revolving Note dated November 6, 2007, as
amended, in the principal amount of up to Five Million Dollars ($5,000,000.00)
and made payable by Borrower to Lender (the “Revolving Note”). Except
as otherwise defined herein or unless the context otherwise requires,
capitalized terms not defined herein shall have the meanings given such terms in
the Revolving Note, or if not defined therein, then the meanings given those
terms in the Revolving Credit Agreement (defined below); and
WHEREAS,
the Revolving Note evidences advances under the Revolving Note made pursuant to
the terms of that certain Revolving Credit Agreement dated November 6, 2007, as
amended (the “Revolving Credit Agreement”), between Borrower and Lender;
and
WHEREAS,
the Parties hereto are executing a Third Amendment to Revolving Credit Agreement
dated of even date herewith, pursuant to which Lender extended the Maturity Date
from June 2, 2009 to June 2, 2010; and
WHEREAS,
Borrower and Lender now wish to amend the Revolving Note to the extent necessary
to reflect the above-described change;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
hereinafter stated, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the Parties agree as follows:
1. The
Revolving Note is hereby amended by deleting the first full paragraph of the
Revolving Note and by inserting in lieu of the deleted paragraph the following
paragraph:
“FOR
VALUE RECEIVED, the undersigned, SHOW ME ETHANOL, LLC, a Missouri limited
liability company (hereinafter referred to as “Borrower”), promises to pay to
the order of FCS FINANCIAL, PCA, (hereinafter referred to as “Lender”), at such
place as Lender may designate, in lawful money of the United States of America,
the principal sum of Five Million Dollars ($5,000,000.00) or so much thereof as
may be advanced and be outstanding, together with interest on any and all
principal amounts outstanding calculated in accordance with the provisions set
forth below. This Note is issued under that certain Revolving Credit
Agreement dated November 9, 2007, as amended by that certain First Amendment to
Revolving Credit Agreement dated June 2, 2008 and as further amended by that
certain Second Amendment to Revolving Credit Agreement dated December 12, 2008
and that certain Third Amendment to Revolving Credit Agreement dated March 31,
2009 (as the same may be amended, replaced, restated and/or supplemented from
time to time, the “Credit Agreement”), between Borrower and
Lender.”
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2. Modification of Maturity
Date. The Parties acknowledge and agree that the fourth
(4th)
paragraph of the note, “Maturity Date”, shall be deleted in its entirety and the
following inserted in its place:
““Maturity
Date”: shall mean June 2, 2010.”
3. Ratification of Revolving
Note. Borrower and Lender hereby ratify and confirm the
Revolving Note, as amended hereby, in all respects; and, except as amended
hereby, the Revolving Note shall remain in full force and effect.
4. Attachment of this Amendment
to Revolving Note. This
Amendment may be attached to and shall form a part of the Revolving Note for all
purposes.
5. Counterpart
Execution. This Amendment may be executed in counterparts, and
any number of counterparts shall constitute one original.
6. Definitions. Except
as otherwise defined herein or unless the context otherwise requires,
capitalized terms not defined herein shall have the meanings given those terms
in the Revolving Credit Agreement.
| SHOW ME ETHANOL, LLC | |||
| a Missouri limited liability company | |||
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By:
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Title:
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“Borrower”
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EXHIBIT
B
Existing
Corn Contracts
