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Exhibit 10.2
 
AMENDMENT NO. 2

TO
 
CREDIT AGREEMENT
 
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of February 11, 2015 (this
“Agreement”), is entered into by and between SOUTHWEST IOWA RENEWABLE ENERGY,
LLC, a limited liability company organized and existing under the laws of Iowa
(the “Company”), FARM CREDIT SERVICES OF AMERICA, FLCA, a federally-chartered
instrumentality of the United States (“Lender”), and COBANK, ACB, a
federally-chartered instrumentality of the United States (“CoBank”), in its
capacity as Cash Management Provider and Agent. Capitalized terms not defined
herein shall have the meanings set forth in the Existing Credit Agreement.
 
BACKGROUND:
 
WHEREAS, the Company, Lender and CoBank are parties to a Credit Agreement dated
as of June 24, 2014 and Amendment No. 1 to Credit Agreement dated as of February
11, 2015 (as the same may from time to time be amended, restated, modified or
otherwise supplemented, collectively the “Existing Credit Agreement”), and the
other Loan Documents;
 
WHEREAS, the Company has requested that, as of the Effective Date, the Existing
Credit Agreement be amended as herein provided; and
 
WHEREAS, Lender and CoBank are willing, subject to the terms and conditions
hereinafter set forth, to make such amendments;
 
NOW, THEREFORE, in consideration of the agreements herein contained, the parties
hereby agree as follows:
 
ARTICLE 1
Definitions.

 
1.1          Certain Definitions. The following terms when used in the Agreement
shall have the following meanings:
 
“Agreement” is defined in the preamble to this Agreement.
 
“CoBank” is defined in the preamble to this Agreement.
 
“Company” is defined in the preamble to this Agreement.
 
“Effective Date” is defined in Article 4.
 
“Existing Credit Agreement” is defined in the first recital to this Agreement.
 
“Lender” is defined in the preamble to this Agreement.
 

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1.2           Other Definitions. Unless otherwise defined or the context
otherwise requires, terms used herein (including in the preamble and recitals
hereto) have the meanings provided for in the Existing Credit Agreement.
 
ARTICLE 2
Amendments.

 
Effective on (and subject to the occurrence of) the Effective Date, the Existing
Credit Agreement is amended as follows:
 
2.1           Amendment to Section 7.1 of the Existing Credit Agreement. 
Section 7.1 of the Existing Credit Agreement is hereby amended by deleting
Section 7.1 in its entirety and substituting the following Section 7.1 in its
place:
 
“7.1         Indebtedness.  The Company shall not, and shall not permit any
Subsidiary to, at any time create, incur, assume or suffer to exist any
Indebtedness, except for the following referred to as “Permitted Indebtedness”:
 
(a)           Indebtedness of the Company under the Loan Documents;
 
(b)           Any Interest Rate Hedge utilized solely for hedging interest rate
risks (and not in any event for speculative purposes) provided by any Lending
Party;
 
(c)           Other Indebtedness of the Company not otherwise permitted under
this Section 7.1 in an aggregate principal amount outstanding at any time not to
exceed $1,000,000 (less the current balance of the Indebtedness of the Company
set forth on the attached Schedule 7.1(e));
 
(d)           [Intentionally Omitted]; and
 
(e)           Existing Indebtedness of the Company set forth on the attached
Schedule 7.1(e).”
 
2.2          Amendment to Section 7.2 of the Existing Credit Agreement. Section
7.2 of the Existing Credit Agreement is hereby amended by deleting Section 7.2
in its entirety and substituting the following Section 7.2 in its place:
 
“7.2         Liens.  The Company shall not, and shall not permit any Subsidiary
to, at any time create, incur, assume, or suffer to exist any Liens on any of
its property or assets, tangible or intangible, now owned or hereafter acquired,
or agree or become liable to do so, except for the following referred to
collectively as “Permitted Liens”:
 
(a)       Liens for Taxes incurred that are not yet due and payable and for
which adequate reserves have been established;
 
(b)      Pledges or deposits made in the ordinary course of business to secure
payment of workmen’s compensation, or to participate in any fund in connection
with workmen’s compensation, unemployment insurance, old-age pensions or other
social security programs, and good-faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, not in excess of the
aggregate amount due thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in the ordinary
course of business, and Liens of a collecting bank arising in the ordinary
course of business under Section 4‑210 of the Uniform Commercial Code in effect
in the relevant jurisdiction covering only the items being collected upon;
 
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(c)      Liens of mechanics, material suppliers, warehouses, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable and Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default and for which
adequate reserves have been established;
 
(d)      Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;
 
(e)       Liens in favor of Agent for the benefit of the Lending Parties or any
of their Affiliates securing any of the Obligations;
 
(f)        Liens securing the Indebtedness permitted under Section 7.1(c);
 
(g)      Lender’s statutory Lien in the Lender Equities;
 
(h)      Liens, claims, or encumbrances upon, and defects of title to, real or
personal property other than the Collateral, including any attachment of
personal or real property or other legal process prior to adjudication of a
dispute on the merits (y) if the validity or amount thereof is being contested
in good faith by appropriate and lawful proceedings diligently conducted so long
as levy and execution thereon have been stayed and continue to be stayed or (z)
if a final judgment is entered and such judgment is discharged within thirty
(30) days of entry, and in either case they do not affect the Collateral or, in
the aggregate, materially impair the ability of the Company to perform its
Obligations hereunder or under the other Loan Documents; and
 
(i)        Existing Liens set forth on the attached Schedule 7.2(j).
 
(j)        Liens on the FCL Storage Bins securing the obligations of the Company
under the FCL Operating Lease.
 
(k)      Liens on the Real Property Collateral securing the obligations of the
Company under the FCL Operating Lease; provided, that any such Liens are and
remain at all times subordinate to Lender’s Lien position on the Real Property
Collateral.”
 
2.3           Amendment to Section 7.7 of the Existing Credit Agreement. Section
7.7 of the Existing Credit Agreement is hereby amended by deleting Section 7.7
in its entirety and substituting the following Section 7.7 in its place:
 
“7.7         Dividends and Related Distributions.
 
(a)           The Company shall not, and shall not permit any of its
Subsidiaries to, make or pay, or agree to become or remain liable to make or
pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests or
on account of the purchase, redemption, retirement or acquisition of its shares
of capital stock (or warrants, options or rights therefor), partnership
interests or limited liability company interests, except dividends or other
distributions payable by the Company to its members holding limited liability
company interests with respect to any fiscal year of the Company; provided, that
(i) the aggregate amount of such payments with respect to any fiscal year of the
Company does not exceed 60% of the net income of the Company for such fiscal
year, (ii) the Company has delivered its audited financial statements for such
fiscal year to Agent in accordance with Section 6.1(b) and (iii) no Event of
Default or Default has occurred or would result therefrom.
 
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(b)           Notwithstanding the restrictions set forth in Section 7.7(a), SIRE
DISC, Inc. shall be permitted to make or pay dividends or other distributions to
the Company.”
 
2.4           Amendment to Section 7.15 of the Existing Credit Agreement.
Section 7.15 of the Existing Credit Agreement is hereby amended by deleting
Section 7.15 in its entirety and substituting the following Section 7.15 in its
place:
 
“7.15       Operating Leases.  The Company and its Subsidiaries shall not make
any payments in any fiscal year on account of Operating Leases exceeding
$750,000 in the aggregate (other than (a) payments pursuant to leases for rail
cars and (b) payments pursuant to Operating Leases entered into with FCL
(including the FCL Operating Lease)).  The Company and its Subsidiaries shall
not enter into or otherwise become a party to any Operating Leases for rail cars
which provide for a remaining lease term (whether initially or through
extension) of over 60 months (other than Operating Leases for up to 625 rail
cars).”
 
2.5           Amendment to Annex A of the Existing Credit Agreement.  Annex A of
the Existing Credit Agreement is hereby amended by adding the following defined
terms in their entirety to Annex A:
 
““FCL” means Farm Credit Leasing Services Corporation, a federally chartered
corporation.”
 
““FCL Operating Lease” means that certain operating lease arrangement to be
entered into whereby FCL shall lease the FCL Storage Bins to the Company;
provided, that (a) the term of such lease does not exceed seven (7) years and
(b) the obligations of the Company under such lease do not exceed $4,750,000.”
 
““FCL Storage Bins” means the two (2) 500,000 bushel grain storage bins and
related grain handling equipment, to be (a) constructed on the Real Property
Collateral in 2015, (b) owned by FCL and (c) leased to the Company pursuant to
the FCL Operating Lease.”
 
2.6           Amendment to Annex A of the Existing Credit Agreement.  Annex A of
the Existing Credit Agreement is hereby amended by removing the definition of
“Subordinated Debt” in its entirety.
 
ARTICLE 3
Representations and Warranties.

 
In order to induce Lender and CoBank to make the amendments provided for in
Article 2, the Company hereby (a) represents and warrants that (i) each of the
representations and warranties of the Company contained in the Existing Credit
Agreement and in the other Loan Documents are true and correct in all material
respects on and as of the date hereof, except that such representations and
warranties (A) that relate solely to an earlier date shall be true and correct
in all material respects as of such earlier date and (B) shall be true and
correct in all respects to the extent they are qualified by a materiality
standard and (ii) no Default or Event of Default has occurred and is continuing;
and (b) agrees that the incorrectness in any respect of any representation and
warranty contained in the preceding clause (a) shall constitute an immediate
Event of Default. Without limiting the foregoing, the Company hereby (x)
ratifies and confirms all of the terms, covenants and conditions set forth in
the Loan Documents and hereby agrees that it remains unconditionally liable to
Lender and CoBank in accordance with the respective terms, covenants and
conditions set forth in the Loan Documents, and all Collateral in favor of
Lender and CoBank continues unimpaired and in full force and effect, and (y)
waives all defense, claims, counterclaims, rights of recoupment or set-off
against any of its obligations.
 
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ARTICLE 4
Conditions to Effectiveness.

 
This Agreement shall become effective on such date (the “Effective Date”) when
the following conditions have been satisfied:
 
4.1           Representations and Warranties. The representations and warranties
made by the Company pursuant to Article 3 as of the Effective Date shall be true
and correct.
 
4.2           Other Requests. CoBank shall have received such other
certificates, instruments, documents, agreements, information and reports as may
be requested by CoBank, in form and substance satisfactory to CoBank.
 
4.3           Closing Fee. CoBank shall have received a non-refundable closing
fee of $7,500 for the benefit of CoBank.
 
ARTICLE 5
Miscellaneous.

 
5.1           Loan Document Pursuant to Existing Credit Agreement. This
Agreement is a Loan Document executed pursuant to the Existing Credit Agreement.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions contained in the Existing Credit Agreement and
each other Loan Document shall remain unamended an otherwise unmodified an in
full force and effect.
 
5.2           Limitation of Amendments.The amendments set forth in Article 2
shall be limited precisely as provide for herein and shall not be deemed to be a
waiver of, amendment of, consent to or modification of any other term or
provision of the Existing Credit Agreement or any term of provision of any other
Loan Document or of any transaction or further or future action on the part of
the Company which would require the consent of CoBank under the Existing Credit
Agreement or any other Loan Document.
 
5.3           Incorporation of Existing Credit Agreement Provisions. The
provisions of Article 11 of the Existing Credit Agreement shall apply to this
Agreement, mutatis mutandis.
 
[Signature Pages Follow]
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[SIGNATURE PAGE TO CREDIT AGREEMENT AMENDMENT]
 
IN WITNESS WHEREOF, the parties hereto, by their Authorized Officers, have
executed this Agreement as of the date first set forth above.
 

 
COMPANY: 
   
SOUTHWEST IOWA RENEWABLE ENERGY, LLC 
   
By:
/s/ Brian T. Cahill   
Name:  Brian T. Cahill 
 
Title:    President and Chief Executive Officer 
   
Notice Address for the Company:
   
Southwest Iowa Renewable Energy, LLC
 
10868 189th Street
 
Council Bluffs, Iowa 51503
 
Attention:   Brett Frevert
 
Fax  No.:   (712) 366-0394
 
Email Address: Brett.Frevert@sireethanol.com

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[SIGNATURE PAGE TO CREDIT AGREEMENT AMENDMENT]
 
IN WITNESS WHEREOF, the parties hereto, by their Authorized Officers, have
executed this Agreement as of the date first set forth above.
 

 
LENDER:
         
FARM CREDIT SERVICES OF AMERICA, FLCA
           
By:
 /s/ Rob Durre    
Name:  Rob Durre
   
Title:    VP-Commercial Lender
         
Notice Address for the Company:
         
Farm Credit Services of America, FLCA
   
5015 S. 118th Street
   
Omaha, Nebraska 68137
   
Attention:   Agribusiness Finance
   
Fax  No.:   (402) 661-3669
   
Email Address: frahmk@fcsamerica.com
 

 

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[SIGNATURE PAGE TO CREDIT AGREEMENT AMENDMENT]
 
IN WITNESS WHEREOF, the parties hereto, by their Authorized Officers, have
executed this Agreement as of the date first set forth above.
 

 
CASH MANAGEMENT PROVIDER AND AGENT:
         
COBANK, ACB
           
By:
/s/ Mark Shillingford    
Name:  Mark Shillingford
   
Title:    Assistant Corporate Secretary
         
Notice Address for CoBank:
         
For general correspondence purposes:
   
P.O. Box 5110
   
Denver, Colorado 80217-5110
         
For direct delivery purposes:
   
5500 South Quebec Street
   
Greenwood Village, Colorado 80111-1914
         
Attention: Credit Information Services
   
Fax No.: (303) 224-6101
   
Email Address: MB_credit_info_svc@CoBank.com
 

 
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[GUARANTOR’S CONSENT PAGE TO CREDIT AGREEMENT AMENDMENT]
 
GUARANTOR’S CONSENT
 
The undersigned SIRE DISC, INC., an Iowa corporation (the “Guarantor”), hereby
(a) consents to this Agreement and the transactions contemplated hereby, (b)
reaffirms its obligations under that certain Continuing Guarantee dated February
11, 2015 by Guarantor in favor of CoBank, for the benefit of the Lending Parties
(the “Continuing Guarantee”), including, without limitation, the unconditional
guarantee to CoBank, for the benefit of the Lending Parties, of the full and
prompt payment of the Indebtedness (as defined in the Continuing Guarantee),
whether now existing or hereafter arising, and (c) represents and warrants that
(i) the Continuing Guarantee continues to constitute the legal, valid and
binding obligation of Guarantor enforceable against Guarantor in accordance with
its terms, (ii) there exists no Event of Default or Default and (iii) there are
no, and shall not be any, defenses to or counterclaims or rights of set-off
against any of CoBank’s or the Lending Parties’ rights under the Continuing
Guarantee.
 

 
SIRE DISC, INC.
         
By:
/s/ Brian T. Cahill    
Name:  Brian T. Cahill
   
Title:    President
 

 
 
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