Document:

exhibit10_1.htm

EXHIBIT 10.1

 

THIRD AMENDMENT OF TERM B CREDIT AGREEMENT

THIS THIRD AMENDMENT OF TERM B CREDIT AGREEMENT (this “Amendment”) is dated as of September 3, 2009, and entered into by and among STANDARD PACIFIC CORP., a Delaware corporation (“Borrower”), BANK
OF AMERICA, N.A., a national banking association (“Bank of America”), as Administrative Agent for the Lenders defined below (in such capacity, together with its successors and assigns, “Administrative Agent”), and each Lender that is a signatory to this Amendment.

R E C I T A L S

A.           Reference is hereby made to that certain Term Loan B Credit Agreement dated as of May 5, 2006, by and among Borrower, Bank of America, as Administrative Agent (in such capacity, “Administrative
Agent”), and each of the Lenders defined therein (such Lenders are collectively, the “Lenders” and individually a “Lender”) (as amended, modified, renewed, restated, or replaced, the “Term B Credit Agreement”).

B.           Reference is hereby made to that certain (a) Revolving Credit Agreement dated as of August 31, 2005, executed by Borrower, Bank of America, as Administrative Agent and L/C Issuer, and the Lenders defined therein (such Lenders are collectively, the “Revolver
Lenders” and individually a “Revolver Lender”) (as amended, the “Revolving Credit Agreement”) and (b) Term Loan A Credit Agreement dated as of May 5, 2006, by and among Borrower, Bank of America, as Administrative Agent, and each of the Lenders defined therein (such Lenders are collectively, the “Term
A Lenders” and individually a “Term A Lender”) (as amended, the “Term A Credit Agreement”).

C.           Capitalized terms used herein shall, unless otherwise indicated, have the meanings set forth in the Term B Credit Agreement.

D.           By written notice dated August 12, 2009, Administrative Agent and Borrower notified Lenders that certain provisions of the Term B Credit Agreement have been amended under Section 11.1 of the
Term B Credit Agreement as a result of that certain Eighth Amendment to Revolving Credit Agreement and Seventh Amendment to Term Loan A Credit Agreement executed to be effective as of August 12, 2009, by and among Borrower, Bank of America, each Revolver Lender and Term A Lender party thereto, and certain other parties.

E.           The parties hereto desire to further amend the provisions of Section 4.2 and Section 8.21 of the Term B Credit Agreement,
each as set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Amendments to Term B Credit Agreement.  By execution of this Amendment, the parties hereto have agreed to amend the Term B Credit Agreement as follows:

(a)           Section 1.1 of the Term B Credit Agreement is hereby amended to delete the definitions of “Prime
Rate” and replace such definition with the following:

“Prime Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the sum of (i) the Federal Funds Rate plus (ii)
one half of one percent (0.50%), (b) the sum of (i) the Daily Floating Libor Rate plus (ii) one and three quarters percent (1.75%), and (c) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s
costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in the prime rate announced by Bank of America, the Federal Funds Rate, or the Daily Floating Libor Rate shall take effect at the opening of business on the day specified in the public announcement of such change.

(b)           Section 1.1 of the Revolving Credit Agreement is hereby amended to add the following new definition thereto in the correct alphabetical
order:

“Daily Floating LIBOR Rate” means, as of any date of determination, the per annum rate of interest equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as reasonably selected by Administrative Agent from time to time) at approximately 11:00 a.m. London time on the date of determination for Dollar deposits being delivered in the London interbank market for a term of one month commencing two (2) Business Days prior to that day.  If such rate is not available at such time for any reason, then the rate for that interest period will be
determined by such alternate method as reasonably selected by Administrative Agent.

(c)           Section 4.2 of the Term B Credit Agreement is hereby deleted in its entirety and replaced with the following:

4.2           Other Fees.  Borrower shall pay to Administrative Agent, (a) for its account and the accounts of Arranger and Lenders, the fees in the amounts and at the times specified in the Fee Letter and
(b) for any fiscal quarter in which Borrower has failed to demonstrate compliance with at least one (1) of the financial covenants set forth in Section 8.20(a), a fee, payable to the Lenders on the date that is the forty-fifth (45th) day after the last day of such fiscal quarter in an amount equal to the result of (i) fifty basis points (0.50%) times (ii)
the outstanding principal amount of all Term Loans as of such date, for each such fiscal quarter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(d)           Clause (i) of Section
8.20(a) is hereby amended to add the following sentence at the end thereof:

provided, however, that for each fiscal quarter ended after September 30, 2011, Borrower shall not permit such ratio to be less than 1.25 to 1.0 thereafter;

(e)           Clause (ii) of Section 8.20(a) is hereby amended to delete the
“or” at the end thereof and to add the following sentence at the end thereof:

provided, however, that for each fiscal quarter ended after September 30, 2011, Borrower shall not permit such ratio to be less than 1.25 to 1.0 thereafter; or

2.           Amendment of Term B Credit Agreement and Other Loan Documents.

(a)           All references in the Loan Documents to the Term B Credit Agreement shall henceforth include references to the Term B Credit Agreement, as modified and amended by this Amendment, and as may, from time to time, be
further modified, amended, renewed, extended, restated, increased, restated, and/or replaced.

(b)           Any and all of the terms and provisions of the Loan Documents are hereby amended and modified wherever necessary, even though not specifically addressed herein, so as to conform to the amendments and modifications
set forth herein.

3.           REQUEST FOR APPROVAL.  THIS IS A REQUEST FOR APPROVAL AS DESCRIBED IN SECTION 10.14 OF THE
TERM B CREDIT AGREEMENT.  Pursuant to Section 10.14 of the Term B Credit Agreement, Administrative Agent recommends that the amendments set forth in Section 1 hereof be adopted by the Lenders.  Unless a Lender shall give written notice to Administrative Agent that it objects to such recommendation within fifteen (15) Business Days from the date hereof, such Lender
shall be deemed to have approved of the amendments set forth in Section 1.

4.           Ratifications.  Borrower (a) ratifies and confirms all provisions of the Loan Documents as amended by this Amendment, (b) ratifies and confirms that
all guaranties, assurances, and liens granted, conveyed, or assigned to Administrative Agent or any Lender under the Loan Documents are not released, reduced, or otherwise adversely affected by this Amendment and continue to guarantee, assure, and secure full payment and performance of the present and future Obligations under the Term B Credit Agreement, and (c) agrees to perform such acts and duly authorize, execute, acknowledge, deliver, file, and record such additional documents, and certificates as Administrative
Agent may reasonably request in order to create, perfect, preserve, and protect such guaranties, assurances, and liens.

5.           Representations.  Borrower represents and warrants to Administrative Agent and the Term B Lenders that as of the date of this Amendment: (a) this Amendment
and each other document entered into by Borrower and each Guarantor in connection with this Amendment (collectively, the “Amendment Documents”), have been duly authorized, executed, and delivered by Borrower and each Guarantor; (b) no action of, or filing with, any Governmental Authority is required to authorize, or is otherwise required in connection with, the execution, delivery, and performance of the Amendment Documents
by Borrower or any Guarantor; (c) the Loan Documents, as amended by this Amendment, are valid and binding upon Borrower and each Guarantor and are enforceable against Borrower and each Guarantor in accordance with their respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally or by general principles of equity; (d) the execution, delivery, and performance of this Amendment by Borrower and each Guarantor
do not require the consent of any other Person and do not and will not constitute a violation of any order of any Governmental Authority, or material agreements to which Borrower or any Guarantor is a party thereto or by which Borrower or any Guarantor is bound; (e) all representations and warranties in the Loan Documents (as modified by this Amendment) are true and correct in all material respects on and as of the date of this Amendment, except to the extent that (i) any of them speak to a different specific
date, or (ii) the facts on which any of them were based have been changed by transactions contemplated or permitted by the Term B Credit Agreement; and (f) both before and after giving effect to this Amendment, no Default or Event of Default exists under the Term B Credit Agreement.

6.           Conditions.  The amendments contained in Section 1 above shall not be effective
unless and until:

(a)           Administrative Agent shall have received this Amendment duly executed by Borrower, Administrative Agent, and, subject to the conditions of Section
3 above, the Majority Term B Lenders;

(b)           the representations and warranties in this Amendment are true and correct in all material respects on and as of the date hereof, except to the extent that (i) any of them speak to a different specific date, or (ii)
the facts on which any of them were based have been changed by transactions contemplated or permitted by the Term B Credit Agreement; and

(c)           both before and after giving effect to this Amendment, no Default or Event of Default exists under the Term B Credit Agreement.

7.           Continued Effect.  Except to the extent amended hereby or by any documents executed in connection herewith, all terms, provisions, and conditions of
the Term B Credit Agreement and the other Loan Documents, and all documents executed in connection therewith, shall continue in full force and effect and shall remain enforceable and binding in accordance with their respective terms.

8.           Miscellaneous.  Unless stated otherwise (a) the singular number includes the plural and vice versa and words of any gender include each other gender,
in each case, as appropriate, (b) headings and captions may not be construed in interpreting provisions, (c) this Amendment must be construed, and its performance enforced, under California law, (d) if any part of this Amendment is for any reason found to be unenforceable, all other portions of it nevertheless remain enforceable, and (e) this Amendment may be executed in any number of counterparts with the same effect as if all signatories had signed the same document, and all of those counterparts must be construed
together to constitute the same document.

9.           Parties.  This Amendment binds and inures to each party hereto and their respective successors and permitted assigns.

10.           RELEASE.  BORROWER AND EACH GUARANTOR HEREBY ACKNOWLEDGE THAT THE OBLIGATIONS UNDER THE TERM B CREDIT AGREEMENT AND EACH LOAN DOCUMENT EXECUTED IN
CONNECTION THEREWITH, ARE ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RESCISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS UNDER THE TERM B CREDIT AGREEMENT AND EACH LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ADMINISTRATIVE AGENT OR ANY LENDER.  BORROWER AND EACH
GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE EACH AGENT-RELATED PERSON, EACH ISSUING BANK, EACH LENDER AND ITS PREDECESSORS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS, ATTORNEYS-IN-FACT, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH BORROWER OR ANY GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF THE TERM B CREDIT AGREEMENT OR ANY LOAN DOCUMENT
EXECUTED IN CONNECTION THEREWITH, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE TERM B CREDIT AGREEMENT OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION THEREWITH, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

11.           Waiver of Section 1542 of the Civil Code of California.  Borrower and each Guarantor hereby expressly waive the provisions of Section 1542 of the Civil
Code of California, which provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

12.           ENTIRETIES.  THE TERM B CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
ABOUT THE SUBJECT MATTER HEREOF AND THEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature pages follow.]

0909001GD

Third Amendment of Term B A-Third Amendment of Term B Credit Agreement.doc

  

  

  

EXECUTED as of the day and year first mentioned.

BANK OF AMERICA, N.A., as Administrative Agent

	
By:
	
/s/ Eyal Namordi
	  
	  	
Eyal Namordi

Senior Vice President

 
	  
	  	  	  

Signature Page to Third Amendment of Term B Credit Agreement

  

  

  

STANDARD PACIFIC CORP., a Delaware corporation

	
By:
	
/s/ John Stephens
	  
	  	
John Stephens

Senior Vice President & Chief Financial Officer
	  
	  	  	  

	
By:
	
/s/ Lloyd H. McKibbin
	  
	  	
Lloyd H. McKibbin

Senior Vice President and Treasurer

 
	  
	  	  	  

Signature Page to Third Amendment of Term B Credit Agreement

  

  

  

To induce the Administrative Agent and Lenders to enter into this Amendment, the undersigned jointly and severally (a) consent and agree to the Amendment’s execution and delivery, (b) ratify and confirm that all guaranties, assurances, and liens granted, conveyed, or assigned to Administrative Agent and Lenders under the Loan
Documents are not released, diminished, impaired, reduced, or otherwise adversely affected by the Amendment and continue to guarantee, assure, and secure the full payment and performance of all present and future Obligations (except to the extent specifically limited by the terms of such guaranties, assurances, or liens), (c) agree to perform such acts and duly authorize, execute, acknowledge, deliver, file, and record such additional guaranties, assignments, security agreements, deeds of trust, mortgages, and
other agreements, documents, instruments, and certificates as Administrative Agent may reasonably deem necessary or appropriate in order to create, perfect, preserve, and protect those guaranties, assurances, and liens, and (d) waive notice of acceptance of this consent and agreement, which consent and agreement binds the undersigned and their successors and permitted assigns and inures to the Administrative Agent and Lenders and their respective successors and permitted assigns.

GUARANTORS:

Barrington Estates, LLC, a Delaware limited liability company

Camarillo Village Park, LLC, a Delaware limited liability company

Foundry Lofts, LLC, a Delaware limited liability company

Hilltop Residential, Ltd., a Florida limited partnership

Lagoon Valley Residential, LLC, a California limited liability company

LB/L-Duc III Antioch 333, LLC, a Delaware limited liability company

Menifee Development, LLC, a California limited liability company

Parcel NLV 3.4, LLC, a Nevada limited liability company

Parcel NLV 4.1, LLC, a Nevada limited liability company

Parcel NLV 5.1, LLC, a Nevada limited liability company

Redwood Lofts, LLC, a California limited liability company

Standard Pacific Investment Corp., a Delaware corporation

Standard Pacific of Arizona, Inc., a Delaware corporation

Standard Pacific of Central Florida, a Florida general partnership

Standard Pacific of Colorado, Inc., a Delaware corporation

Standard Pacific of Jacksonville, a Florida general partnership

Standard Pacific of Las Vegas, Inc., a Delaware corporation

Standard Pacific of Orange County, Inc., a Delaware corporation

Standard Pacific of South Florida, a Florida general partnership

Standard Pacific of Southwest Florida, a Florida general partnership

Standard Pacific of Tampa, a Florida general partnership

Standard Pacific of Texas, Inc., a Delaware corporation

Standard Pacific of Tonner Hills, LLC, a Delaware limited liability company

Standard Pacific of the Carolinas, LLC, a Delaware limited liability company

Walnut Acquisition Partners, LLC, a California limited liability company

  

  

  

	
By:
	  	
/s/ John Stephens

	  	  	
John Stephens, in his capacity as Principal Financial and Accounting Officer and Treasurer of each of the above Guarantors which is a corporation, and in his capacity as Principal Financial and Accounting Officer of each general partner or managing member, as applicable, of each of
the above Guarantors which is a partnership or limited liability company

	  	  	  
	  	  	  
	  	  	  
	
By:
	  	
/s/ Lloyd H. McKibbin

	  	  	
Lloyd H. McKibbin, in his capacity as Assistant Treasurer of each of the above Guarantors which is a corporation, and in his capacity as Assistant Treasurer of each general partner or managing member, as applicable, of each of the above Guarantors which is a partnership or limited
liability company

	  	  	  

Signature Page to Third Amendment of Term B Credit Agreement

  

  

  

	  	
STANDARD PACIFIC OF COLORADO, INC., a Delaware corporation

	  	  	  	  
	  	  	  	  
	  	
By:
	
/s/ Kathleen R. Wade

	  	  	
Kathleen R. Wade
	  
	  	  	
Vice President

 
	  

Signature Page to Third Amendment of Term B Credit Agreementform8k_090209exh101.htm

SUBORDINATED TERM LOAN NOTE

$27,106,078.55

St. Louis, Missouri

                                                          August
26, 2009

FOR VALUE RECEIVED, the undersigned, SOUTHWEST IOWA RENEWABLE ENERGY, LLC, an Iowa limited liability company (the “Borrower”), hereby promises to pay to the order of BUNGE N.A. HOLDINGS, INC., a Delaware corporation (the “Lender”), the principal sum of Twenty-Seven
Million One Hundred Six Thousand Seventy-Eight and 55/100ths Dollars ($27,106,078.55) (plus any PIK Interest which is capitalized and added to the outstanding principal balance of this Note) on August 31, 2014. The Borrower hereby covenants and agrees to pay to the Lender as a mandatory prepayment on this Note, within three (3) Business Days’ after receipt thereof, Seventy-Six  Percent (76%) of the net cash proceeds received by the Borrower from each sale or other issuance of any membership interests
or other equity interests in the Borrower after the date of this Note. Amounts repaid or prepaid under this Note may not be reborrowed.

The Borrower further promises to pay to the order of the Lender interest on the from time to time outstanding principal balance of this Note (including any increase in the outstanding principal balance of this Note which is attributable to the capitalization of PIK Interest) prior to the
maturity of this Note as follows: (a) so long as no Event of Default under this Note has occurred and is continuing, at a rate per annum equal to Seven and One-Half Percent (7-1/2%) per annum over and above the Floating Rate (which rate of interest shall fluctuate as and when the Floating Rate shall change) and (b) so long as any Event of Default under this Note has occurred and is continuing, at a rate per annum equal to Ten and One-Half Percent (10-1/2%) per annum over and above the Floating Rate (which rate
of interest shall fluctuate as and when the Floating Rate shall change).  Said interest shall be due and payable semi-annually in arrears on each January 31st and July 31st  commencing January 31, 2010, and at the maturity of this Note, whether by reason of acceleration or otherwise; provided, however, that prior to the maturity of this Note, the Borrower, at is option, shall have the right to, in lieu of paying such accrued and unpaid interest in cash, capitalize and add any or all of the
accrued and unpaid interest on this Note (the “PIK Interest”) to the outstanding principal balance of this Note (and any accrued and unpaid interest on this Note which is not paid in cash on its due date shall automatically be capitalized and added to the outstanding principal balance of this Note on such due date).  From and after the maturity of this Note, whether by reason of acceleration or otherwise, interest shall accrue and be due and payable on the demand of the Lender on the from
time to time outstanding principal balance of this Note (including any increase in the outstanding principal balance of this Note which is attributable to the capitalization of PIK Interest) at a rate per annum equal to Ten and One-Half Percent (10-1/2%) per annum over and above the Floating Rate (which rate of interest shall fluctuate as and when the Floating Rate shall change).

Interest on this Note shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).  All payments received by the Lender under or in respect of this Note shall be allocated among the principal,
interest, collection costs and expenses and other amounts due under this Note in such order and manner as the Lender shall elect.

  

 

  

The books and records of the Lender showing the account between the Lender and the Borrower shall be admissible in evidence in any action or proceeding and shall constitute prima facie proof of the items therein set forth.

The Borrower shall have the right, upon not less than thirty (30) days’ prior written notice to the Lender, to prepay all at any time or any portion of the from time to time outstanding principal balance of this Note at any time without penalty or premium.

The Borrower shall make each payment of principal of, and interest on, this Note and all other amounts payable under this Note not later than 12:00 noon (St. Louis time) on the date when due by wire transferring such amounts to the Lender’s Account No. 323-891918 at JP Morgan Chase (ABA
Routing No. 0210-0002-1) or to such other bank account of the Lender as the Lender may from time to time designate in writing.  Any such payment received by the Lender after 12:00 noon (St. Louis time) shall be deemed to have been paid on the next succeeding Business Day.  Whenever any payment of principal of, or interest on, this Note shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day.  If the
date for any payment of principal is extended by operation of law or otherwise, interest thereon, at the then applicable rate, shall be payable for such extended time. The acceptance by the Lender of any payment of principal or interest due under this Note after the date it is due shall not be held to establish a custom or waive any rights of the Lender to enforce prompt payment of any further payments or otherwise.

The Lender shall have the right, at its option and upon at least fifteen (15) days prior written notice to the Borrower, to elect to convert all or any portion of the outstanding principal balance of this Note (excluding any portion of the outstanding principal balance of this Note which is attributable to the capitalization of PIK
Interest) into Series U Units of the Borrower.  In the event any such election is made, the number of Series U Units to which the Lender will be entitled shall be equal to the quotient obtained by dividing (a) the portion of the outstanding principal balance of this Note which the Lender has elected to convert, by (ii) a per unit price equal to $3,000.00 (the “Conversion Price”). On the date of the conversion of all or any portion of the outstanding principal balance of this Note, the Borrower
at its expense will issue in the name of and deliver to the Lender a certificate or certificates for the number of Series U Units to which the Lender is entitled as a result of such conversion.  If a fraction of a unit would result upon conversion of this Note pursuant to this paragraph, the Borrower will, in lieu of issuing a fractional unit, pay in cash the amount of principal represented by the fractional unit calculated on the basis of the Conversion Price. The Lender and the Borrower each agree
to execute all necessary documents in connection with the conversion of all or any portion of this Note.

The Borrower hereby represents and warrants to the Lender that (a) all of the proceeds of the loan evidenced by this Note will be used by Borrower solely to make a payments on the Borrower’s existing indebtedness to Commerce Bank, National Association, (b) the Borrower is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Iowa, (c) the execution, delivery and performance by the Borrower of this Note and the issuance by the Borrower of any Series U Units pursuant to the conversation rights granted to the Lender in this Note (i) are within the limited liability company powers of the Borrower, (ii) have been duly authorized by all necessary limited liability company action on the

 

  

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part of the Borrower, (iii) require no consent, approval or authorization of, action by or in respect of or filing or recording with any governmental or regulatory body, agency or official or any other third party and (iv) do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under
or result in any violation of, the terms of the articles or organization, operating agreement or other organizational documents of the Borrower, any applicable law, rule, regulation, order, writ, judgment or decree of any court or governmental or regulatory body, instrumentality, authority, agency or official or any agreement, document or instrument to which the Borrower is a party or by which the Borrower or any of its property or assets is bound or to which the Borrower or any of its property or assets is subject,
(d) this Note has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower and is enforceable against the Borrower in accordance with its terms, (e) the Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of The Board of Governors of the Federal Reserve System, as amended) and no part of the proceeds
of the loan under this Note will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund or repay indebtedness originally incurred for such purpose or (ii) for any purpose which entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of The Board of Governors of the Federal Reserve System,
including, without limitation, Regulations U, T or X thereof, as amended and (f) the Series U Units to be issued by the Borrower pursuant to the conversion rights granted by terms of this Note have been duly and validly authorized and, when issued to the Lender pursuant to the terms of this Note, will be duly and validly issued, fully paid and non-assessable and free of any security interest, other encumbrance or adverse claim and free of any statutory and contractual preemptive rights, rights of first refusal
and/or similar rights.

The Borrower hereby covenants and agrees that it will not (a) declare, make or pay any distribution, dividend or other payment of any kind (whether in cash, property, membership interests, other equity interests or otherwise) on any outstanding membership interests or other equity interests of or in the Borrower, (b) allow, or propose
to allow, any amendment, modification or change to the Borrower’s Articles of Organization or Third Amended and Restated Operating Agreement, or enter into any other agreement or instrument, or pass any resolution, which is inconsistent with the terms of this Note, or that would otherwise limit the rights, privileges or preferences of the Lender under the terms of this Note or the rights, privileges or preferences of the Series U Units or other membership interests or other equity interests in existence
under the Borrower’s Third Amended and Restated Operating Agreement or (c) sell or otherwise issue any membership interests or other equity interests in the Borrower after the date of this Note without giving the Lender at least thirty (30) days prior written notice thereof.

If any of the following events (“Events of Default”) shall occur: (a) the Borrower shall fail to make any payment of any principal of, interest on or other amount due under this Note as and when the same shall become due and payable, whether by reason of demand, maturity, acceleration or otherwise; (b) the Borrower
shall fail to perform or observe any other covenant contained in this Note; (c) any representation or warranty made by the Borrower in this Note shall prove to have been untrue or incorrect in any material respect when made or deemed made;

 

  

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(d) the Borrower shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official of itself or a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (vii) take any limited liability company action for the purpose of effecting any of the foregoing; (e) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower, or of a substantial part of the property or assets of the Borrower, under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official of the Borrower or of a substantial part of the property or assets of the Borrower or (iii) the winding up or liquidation of the Borrower; and any such proceeding or petition shall continue undismissed for thirty (30) consecutive days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for thirty (30) consecutive days; (f) dissolution, termination of existence
or operations, merger, consolidation or transfer of a substantial part of the property or assets of the Borrower; (g) the Borrower shall become insolvent in either the equity or bankruptcy sense of the term; (h) a judgment or order is rendered against the Borrower and either (i) enforcement proceedings have been commenced by any creditor upon any such judgment or order or (ii) within thirty (30) days after entry thereof, such judgment or order is not paid or otherwise discharged or execution thereof
stayed pending appeal, or within thirty (30) days after the expiration of any such stay, such judgment or order is not paid or otherwise discharged; or a judgment or order in an amount in excess of $100,000.00 is rendered against the Borrower, irrespective of whether such judgment or order is paid or otherwise discharged or stayed pending appeal; (i) any default or event of default shall occur under or within the meaning of any agreement, document or instrument evidencing, securing, guaranteeing the payment
of or otherwise relating to any outstanding indebtedness of the Borrower for borrowed money (other than this Note) in a principal amount in excess of $100,000.00 and such default or event of default shall (1) consist of the failure to pay such indebtedness when due (subject to any applicable grace period), whether by reason of maturity, acceleration or otherwise or (2) accelerate the maturity of such indebtedness or permit the holder or holders thereof to accelerate the maturity of such indebtedness of otherwise
cause such indebtedness to become due and payable prior to its expressed maturity; (j) any default or event of default by the Borrower shall occur under or within the meaning of any Material Agreement which is not cured within any applicable grace or cure period (if any) and which default or event of default shall (1) consist of a failure by the Borrower to make any required payment thereunder when due, or (2) allow Bunge North America, Inc. or any affiliate thereof to withhold performance or terminate such Material
Agreement; or (k) any “Event of Default” (as defined therein) shall occur under or within the meaning of the AgStar Credit Agreement; then, and in each such event (other than an event described in clauses (d) or (e) above), the Lender shall have the right to declare that its obligation to make loans under this Note has terminated, whereupon such obligation of the Lender shall be immediately and forthwith terminated, and the Lender shall have the further right to declare the entire outstanding principal
balance of and all accrued and unpaid interest on this Note to be forthwith due and payable, whereupon all of the unpaid

 

  

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principal balance of and all accrued and unpaid interest on this Note shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, and the Lender shall have the further right to exercise any and all other rights and remedies
which it may have at law or in equity; provided, however, that upon the occurrence of any event described in clauses (d) or (e) above, the Lender’s obligation to make loans under this Note shall automatically terminate and the entire outstanding principal balance of and all accrued and unpaid interest on this Note shall automatically become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, and the Lender
shall have the right to exercise any and all other rights and remedies which it may have at law or in equity.

Upon the occurrence and during the continuance of any Event of Default under this Note, the Lender is hereby authorized at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower) and to the fullest extent permitted by law, to set-off and apply any and all indebtedness
and other amounts at any time owing by the Lender to or for the credit or account of the Borrower against any and all indebtedness of the Borrower to the Lender evidenced by or arising under or in respect of this Note irrespective of whether or not the Lender shall have made any demand under this Note and although such obligations may be contingent or unmatured.  The Lender agrees to promptly notify the Borrower after any such set-off and application made by the Lender, provided, however, that the failure
to give such notice shall not affect the validity of any such set-off and application.  The rights of the Lender under this paragraph are in addition to any other rights and remedies (including, without limitation, other rights of set-off) which the Lender may have.  Nothing contained in this paragraph shall impair the right of the Lender to exercise any right of set-off or counterclaim it may have against the Borrower and to apply the amount subject to such exercise to the payment of indebtedness
of the Borrower unrelated to this Note.

In the event that any payment of any principal of or interest on this Note is not paid when due, whether by reason of demand or otherwise, and this Note is placed in the hands of an attorney or attorneys for collection, or if this Note is placed in the hands of an attorney or attorneys for
representation of the Lender in connection with the bankruptcy or insolvency proceedings relating to or affecting this Note, the Borrower hereby promises to pay to the order of the Lender, in addition to all other amounts otherwise due on, under or in respect of this Note, the costs and expenses of such collection and representation, including, without limitation, reasonable attorneys' fees and expenses (whether or not litigation shall be commenced in aid thereof).

The Borrower hereby agrees to pay or reimburse the Lender upon demand for (a) all out-of-pocket costs and expenses including, without limitation, reasonable attorneys' fees and expenses, incurred by the Lender in connection with the preparation, negotiation, execution, administration and/or enforcement of this Note and (b) all out-of-pocket
costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, incurred by the Lender in connection with any amendment, modification, extension, renewal or restatement of this Note. The Borrower further agrees to pay or reimburse the Lender for any stamp or other taxes which may be payable with respect to the execution, delivery, recording and/or filing of this Note.  All of the obligations of the Borrower under this paragraph shall survive the payment and

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termination of this Note.

This Note may not be changed, nor may any term or condition be waived, modified or discharged orally but only by an agreement in writing, signed by the Lender.  No failure or delay by the Lender in exercising any right, remedy, power or privilege under this Note shall operate as a waiver thereof; nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

All parties hereto expressly waive presentment, demand for payment, notice of dishonor, protest and notice of protest.

For purposes of this Note, the following terms shall have the following meanings:

AgStar Credit Agreement shall mean that certain Credit Agreement dated May 2, 2007, by and among the Borrower, AgStar Financial Services, PCA and the additional commercial, banking or financial institutions party thereto as
banks (collectively, the “Banks”) and AgStar Financial Services, PCA, as the agent for the Banks, as amended by that certain First Amendment to Credit Agreement dated March 7, 2008, that certain Second Amendment to Credit Agreement dated December 19, 2008, that certain Third Amendment to Credit Agreement dated December 30, 2008, that certain Fourth Amendment to Credit Agreement dated as of February 28, 2009, that certain Fifth Amendment to Credit Agreement dated August 1, 2009, and as the same may
from time to time be further amended, modified, extended, renewed or restated.

Business Day shall mean any day except a Saturday, Sunday or legal holiday observed by the Lender or by commercial banks in St. Louis, Missouri or New York, New York.

Eurodollar Business Day shall mean any Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in both London and New York, New York.

Floating Rate shall mean, as of any Business Day, a rate per annum equal to the British Bankers’ Association interest settlement rates for U.S.  Dollar deposits for an interest period of six (6) months as of
11:00 a.m. (London time) on such Business Day (or, if such Business Day is not a Eurodollar Business Day, as of 11:00 a.m. (London time) on the immediately preceding Eurodollar Business Day) as published on Reuters Screen LIBOR01 Page, or if Reuters Screen LIBOR01 Page is not available, as published by Bloomberg Financial Services, Dow Jones Market Services, Telerate or any similar service selected by the Lender. The Floating Rate shall be determined and reset semi-annually on each February 1st and August 1st
(or, if any such day is not a Business Day, the immediately succeeding Business Day). The Floating Rate as of the date of this Note is 0.91% per annum.

Material Agreement means any of the following agreements between the Borrower and Bunge North America, Inc. or any affiliate thereof, in each case as the

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same may be amended, modified, supplemented and restated from time to time: (a) Distillers Grain Purchase Agreement, dated as of October 13, 2006; (b) Agreement (Council Bluffs elevator), dated as of October 13, 2006; (c) Ethanol Purchase Agreement, dated as of December 15, 2008; (d) Grain Feedstock Agency Agreement, dated as of October
13, 2006; (e) Grain Feedstock Supply Agreement, dated as of December 15, 2008; (f) Lease Agreement dated as of December 15, 2008; (g) Amended and Restated Railcar Sublease dated as of March 25, 2009; and (h) Risk Management Services Agreement dated as of December 15, 2008.

Series U Units shall mean the Series U Units of Borrower which have been created and authorized by that certain resolution of the Board of Directors of the Borrower dated July 17, 2009, and which have been granted the rights set forth in such resolution.

THE BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT SITTING IN THE CITY OR COUNTY OF ST. LOUIS, MISSOURI OR ANY UNITED STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AS THE LENDER MAY ELECT, IN ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, (B) AGREES THAT ALL CLAIMS IN RESPECT TO ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN ANY OF SUCH COURTS, (C) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, (D) WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM AND (E) WAIVES ALL RIGHTS OF ANY OTHER JURISDICTION WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE BY REASON OF ITS PRESENT OR SUBSEQUENT DOMICILES.  THE BORROWER (AND BY ITS ACCEPTANCE HEREOF, THE LENDER) IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH THE BORROWER AND THE LENDER ARE PARTIES RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.

This notice is provided pursuant to Section 432.047, R.S.Mo.  As used herein, “borrower(s)” means the Borrower, “creditor” means the Lender and each of “the credit agreement” and “this writing” means this Note. 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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This Note shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns; provided, however, that the Borrower may not assign or otherwise transfer any of its rights or delegate any of its obligations or duties under this Note without
the prior written consent of the Lender and any purported assignment, transfer or delegation without the prior written consent of the Lender shall be null and void.

The Lender’s rights pursuant to this Note are subordinated to the rights of the Banks (as defined in the AgStar Credit Agreement) to the extent set forth in that Debt Subordination Agreement, dated on or about the date hereof, by and between the Lender and AgStar Financial Services, PCA.

This Note shall be governed by and construed in accordance with the substantive laws of the State of Missouri (without reference to conflict of law principles).

 

 

	 	
SOUTHWEST IOWA RENEWABLE ENERGY, LLC
	 
	 	 	 	 
	
 
	
By: 
	 /s/ Karol King	 
	 	 	Name:  Karol King        	 
	 	 	Title:  Chairman 	 
	 	 	 	 

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