EXHIBIT 10.2
THIRD AMENDMENT
TO
REVOLVING CREDIT
AGREEMENT
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 Ray-Carroll 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.
“ 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 Ray-Carroll and Borrower.
“ Ray-Carroll 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 Ray-Carroll 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 Ray-Carroll Subordinated
Loan shall each be excluded as a Debt in the determination of
Working Capital until such time as the Member Loan or the
Ray-Carroll 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 Ray-Carroll 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 Ray-Carroll 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.
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 pe
