THIRD SUPPLEMENT
AND
FORBEARANCE
TO THE
MASTER CREDIT AGREEMENT
THIS THIRD SUPPLEMENT AND FORBEARANCE TO THE MASTER CREDIT AGREEMENT
("Third Supplement") is made and entered into as of ______________,
2008, by and between NEDAK ETHANOL, LLC, a Nebraska limited liability company
("Borrower"), and AGCOUNTRY FARM CREDIT SERVICES, FCA (formerly Farm Credit
Services of Grand Forks, FLCA)("Lender").
RECITALS:
A. Lender and Borrower have entered into that certain Master Credit
Agreement dated as of February 14, 2007 (the "Master Credit Agreement"), that
certain First Supplement to Master Credit Agreement dated as of February 14,
2007 (the "First Supplement"), and that certain Second Supplement to Master
Credit Agreement dated as of February 14, 2007 ("Second Supplement")
(collectively, the Master Credit Agreement, First Supplement and Second
Supplement, as amended, replaced, restated, modified, or supplemented from time
to time, are referred to as the "Master Agreement") pursuant to which Lender has
extended certain credit facilities to Borrower under the terms and conditions
set forth in the Master Agreement.
B. The Project Costs have exceeded the projected budget by approximately
$20.0 million.
C. The excess Project Costs have created one or more defaults under the
Master Agreement and that certain Disbursing Agreement dated as of February 14,
2007 by and among Borrower, Lender and Disbursing Agent (the "Disbursing
Agreement").
D. In the letter dated April __, 2008, Lender has agreed to forebear from
declaring a default, but Lender is not precluded from subsequently declaring a
default at any time it elects to do so in Lender's sole discretion.
E. As a condition to advancing any portion of the Loan to Lender on or
subsequent to the Effective Date, Borrower and Lender desire to further amend
the Master Agreement as set forth in this Third Supplement to provide for
additional terms and conditions.
AGREEMENT:
Now, therefore, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
A. Amendments to Master Agreement. The Master Agreement is amended as follows:
1. Section 1.01 is amended to add the following definitions:
Definitions. Capitalized terms used and not otherwise defined in this Third
Supplement have the meanings attributed to them below or in the Master
Agreement. Definitions in this Third Supplement control over inconsistent
definitions in the Master Agreement, but only to the extent the defined terms
apply to Loans under this Third Supplement. Definitions set forth in the Master
Agreement control for all other purposes. As used in this Third Supplement, the
following terms have the following meanings:
"Bank of America LOC" means the Letter of Credit from Bank of America dated
November 28, 2006 in the amount of $5,000,000.
"Bank of Virginia LOC" means the Letter of Credit from Bank of Virginia
dated December 10, 2007 in the amount of $513,000.
"Bank Hapoalim LOC" means the Letter of Credit from Bank Hapoalim dated
April _, 2008 in the amount of $8,000,000.
"Xxxxxxx" means Xxxxxxx Xxxxxx N.V.
"Xxxxxxx Guarantee" means the guarantee from Xxxxxxx to Borrower
guaranteeing Delta-T Corporation's performance of the Construction Agreement.
"Construction Lien" means the Construction Lien filed against
Borrower on February 22, 2008 by Plant Performance Services, LLC with the Xxxx
County Register of Deeds.
"Earnings" means NEDAK's net income for the quarterly periods ending
March 31, June 30, September 30 and December 31 as determined by NEDAK's
financial statements prepared according to generally accepted accounting
principles.
"FNBO" means First National Bank of Omaha.
"LOC's" means the Bank of America LOC, the Bank of Virginia LOC and the
Bank Hapoalim LOC.
2. Article II, Section 2.01 II is amended to add the following Conditions
Precedent.
In addition to the Conditions Precedent set forth in the Master
Agreement, Lender will have no obligation under this Third Supplement or any
other Loan Document until each of the following conditions precedent is
satisfied or waived in accordance with Section 8.02 of the Master Agreement:
(a) Xxxxxxx shall have delivered the executed Xxxxxxx Guarantee to
Borrower in the form that is attached to the Letter of Commitment and
Intent dated January 28, 2008;
(b) Borrower shall have assigned the Xxxxxxx Guarantee to Lender
pursuant to the Collateral Assignment of Xxxxxxx Guarantee in a form that
is acceptable to Lender;
(c) The LOC's shall have been delivered to Borrower;
(d) The Bank Hapoalim LOC shall have been confirmed by FNBO as
evidenced in writing satisfactory to Lender;
(e) Borrower shall have assigned the LOCs to Lender in a form
acceptable to Lender;
(f) Borrower and Delta-T shall have executed the Amendment No. 3 to
Engineering, Procurement and Construction Services Contract dated April _,
2008 in substantially in a form acceptable to Lender;
(g) Delta-T, NEDAk and Xxxxxxx shall have executed the Amended Letter
of Commitment and Intent dated April _, 2008 (the "Amended Letter of
Commitment");
(h) Borrower shall have assigned the Amended Letter of Commitment to
Lender pursuant to the Collateral Assignment of Letter of Commitment and
Intent in a form acceptable to Lender;
(i) Evidence of release of any mechanic's liens filed against
Borrower, including the Construction Lien, shall have been provided to and
approved by Lender;
(j) Disbursing Agent shall have approved the Advance in the amount of
$18.2 million;
(k) Each of the members of Borrower's Board of Directors shall have
delivered a personal guaranty to Lender in a form acceptable to the Lender;
(k) Borrower shall have executed the Cash Custodial Agreement in a
form acceptable to the Lender; and
(l) Borrower shall have paid all legal fees and expenses due and owing
to Lender under the Master Agreement.
3. Article I is amended to add Section 1.14. Loan Fee that will read as
follows:
Loan Fee. In addition to any other loan fees provided in the Master
Agreement, Borrower shall pay Lender a Loan Fee in the amount of $250,000.
Borrower shall pay the Loan Fee in five consecutive quarterly installments
equaling the greater of 50% of earnings or $50,000 per quarter. If there is an
outstanding balance after the fifth quarterly payment, Borrower shall pay the
balance within thirty days.
4. Article IV is amended to add the following Affirmative Covenants:
4.14. Mechanical Completion. Borrower shall attain mechanical
completion by or on July 15, 2008.
4.15 Successful Performance Test. Borrower shall achieve 100% name
plate production for its ethanol facility within 60 days after achieving
mechanical completion and shall maintain 100% name plate production
indefinitely.
4.16 No Distribution. Borrower shall make no distributions of cash or
other capital to any Member or any Creditor without Lender's written
approval.
4.17 No Breach. Borrower shall not be found in breach of the Amendment
No. 3 to Engineering, Procurement and Construction Services Contract dated
April _, 2008.
4.18 Cash Custodian. Borrower shall conform its operations to
implement a cash custodial agreement if Lender requires it.
4.19 Each advance that Lender agrees to make shall first be approved
by Disbursing Agent before funds are advanced.
4.20 Borrower shall cause Delta-T and Xxxxxxx to provide current
information to Disbursing Agent regarding project cost and to facilitate
Disbursing Agent's monitoring of remaining expenditures.
4.21 Project retainage in the amount of $5,700,000 shall be released
and paid to Delta-T upon Mechanical Completion in accordance with the terms
of the EPC Contract.
5. Article VII, Section 7.01 is amended to provide the following Event of
Default:
(r) Lender makes a request to Borrower to make a call and
withdraw funds under any of the Letters of Credit and Borrower does
not fulfill Lender's request.
B. Conditions to Effectiveness of this Third Supplement. The effectiveness of
this Third Supplement is subject to satisfaction, in Lender's sole discretion,
of each of the following conditions precedent (the date on which all such
conditions precedent are so satisfied shall be the "Effective Date"):
1. Representations and Warranties. The representations and warranties of
Borrower in the Master Agreement shall be true and correct in all material
respects on and as of the Effective Date as though made on and as of such date.
2. Delivery of Executed Loan Documents. Lender shall have received this
Third Supplement, which may be in counterparts, executed by Borrower and Lender.
In addition, all other documents referred to in paragraph A.2. above must be
executed by Borrower or Xxxxxxx or Delta-T.
C. General Provisions.
1. No Other Modifications. The Master Agreement, as expressly modified
herein, shall continue in full force and effect and be binding upon the parties
thereto.
2. Successors and Assigns. This Third Supplement shall be binding upon and
inure to the benefit of Borrower and Lender and their respective successors and
assigns, except that Borrower may not assign or transfer its rights or
obligations hereunder.
3. Definitions. Capitalized terms used, but not defined, in this Third
Supplement shall have the meaning set forth in the Master Agreement.
4. Severability. Should any provision of this Third Supplement be deemed
unlawful or unenforceable, said provision shall be deemed several and apart from
all other provisions of this Third Supplement and all remaining provisions of
this Third Supplement shall be fully enforceable.
5. Governing Law. To the extent not governed by federal law, this Third
Supplement and the rights and obligations of the parties hereto shall be
governed by, interpreted and enforced in accordance with the laws of the State
of North Dakota.
6. Headings. The captions or headings in this Third Supplement are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Third Supplement.
7. Counterparts. This Third Supplement may be executed by the parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. Copies of documents or signature pages bearing original signatures, and
executed documents or signature pages delivered by a party by telefax,
facsimile, or e-mail transmission of an Adobe(R) file format document (also
known as a PDF file) shall, in each such instance, be deemed to be, and shall
constitute and be treated as, an original signed document or counterpart, as
applicable. Any party delivering an executed counterpart of this Third
Supplement by telefax, facsimile, or e-mail transmission of an Adobe(R) file
format document also shall deliver an original executed counterpart of this
Third Supplement, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Third
Supplement.
D. Reservation of Rights. Nothing in this Third Supplement shall be deemed to
create a course of dealing or otherwise entitle the Borrower to a consent to, or
a waiver, amendment, modification, or other change of, any of the terms,
conditions, obligations, covenants, or agreements contained in the Master
Agreement or any other Loan Documents in similar or different circumstances in
the future.
E. Advances. Lender and Borrower acknowledge and agree that Disbursing Agent
shall act as disbursing agent for the disbursement of the Loan.
F. Subordinate Mortgages. Delta-T may take a second mortgage behind Lender,
provided that the second mortgage is expressly subordinate to Lender, including
any future advances by Lender after recording of the second mortgage.
G. Release. BORROWER RELEASES, WAIVES AND FOREVER DISCHARGES LENDER AND ITS
RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM ALL
KNOWN AND UNKNOWN, ABSOLUTE AND CONTINGENT, CLAIMS, DEFENSES, SETOFFS,
COUNTERCLAIMS, CAUSES OF ACTIONS, ACTIONS, SUITS OR OTHER LEGAL PROCEEDINGS OF
ANY KIND EXISTING OR ACCRUED IN FAVOR OF BORROWER AS OF THE DATE OF THIS THIRD
SUPPLEMENT.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Third Supplement to be
duly executed by their respective authorized officers effective as of the day
and year first written above.
BORROWER:
NEDAK ETHANOL, LLC
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Chairman of the Board
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Pres. General Mngr.
LENDER:
AGCOUNTRY FARM CREDIT
SERVICES, FCA
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Regional VP
[SIGNATURE PAGE FOR THIRD SUPPLEMENT
TO MASTER CREDIT AGREEMENT]
