AMENDMENT NO. 1 TO AMENDED AND RESTATED
LOAN RESTRUCTURING AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN RESTRUCTURING AGREEMENT
dated as of August 23, 1996 (this "Amendment") is entered into by and among
New Energy Company of Indiana Limited Partnership, a limited partnership
formed under the laws of Indiana (the "Borrower"), New Energy Corporation of
Indiana, an Indiana corporation (the "General Partner") and The United States
of America, acting by and through the Secretary of Energy (the "Secretary").
Capitalized terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to them in Article 1 of the Amended and Restated
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Loan Restructuring Agreement dated as of December 23, 1991 (the "Loan
Agreement").
WHEREAS, The Borrower, the General Partner and the Secretary entered into
the Loan Agreement for the purpose of amending the Loan Restructuring
Agreement and restructuring the Indebtedness evidenced by the outstanding New
Note No. 4;
WHEREAS, by letter dated March 25, 1996, the Borrower, by reason of an
marked increase in corn prices, requested that the Secretary allow the
Borrower to suspend principal and interest payments on Note A until October 1,
1996, with such suspended amounts being added to Note B, which request was
approved by the Secretary;
WHEREAS by letter dated June 8, 1996, the Borrower requested further
relief from payments of principal and interest on Note A and Note B and
approval of a borrowing of $500,000 from the General Partner (the "General
Partner Loan") and an amount to be determined by the Great American Insurance
Company, an affiliate of the American Financial Group, Inc. or another
affiliate thereof ("GAIC") which is supported by the collateral to be pledged
to GAIC (the "GAIC Loan"), estimated to be approximately $10,000,000; and
WHEREAS, subject to the terms hereof, the Secretary has agreed to further
temporary relief from payments of principal and interest on Note A and Note B
and approval of a borrowing by the Borrower from the General Partner and GAIC
and the pledge of certain collateral to GAIC.
NOW, THEREFORE, in consideration of the premises, the following mutual
agreements and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree that the Loan Agreement is hereby amended as follows:
ARTICLE 1. ADDITIONS, DELETIONS AND AMENDMENTS TO THE LOAN AGREEMENT.
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A. Article 1. DEFINITIONS. is hereby amended as follows:
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(1) Adding the definitions of "Amendment No.
"GAIC", "GAIC Collateral" , "GAIC Loan", "General
Partner Loan" and "Loan Agreement".
"Amendment No. 1. Amendment No. 1 to Amended
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and Restated Loan Restructuring Agreement dated as of
August 23, 1996, among the Borrower, the General
Partner and the Secretary, pursuant to which the Loan
Agreement was amended.
GAIC Collateral. The cash receivables and
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inventory pledged to GAIC pursuant to Loan and Security
Agreement dated as of August 23, 1996, between the
Borrower and GAIC.
GAIC Loan. The revolving loan from GAIC
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to the Borrower in the principal amount not to exceed
$10,000,000.
GAIC Maturity Date. December 31, 1997, provided
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however, in the event the GAIC Loan is not fully repaid
by December 31, 1997, and the Borrower has extended the
GAIC Loan, the GAIC Maturity Date shall be December 31,
1998.
General Partner Loan. The loan from the General
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Partner to the Borrower in the principal amount of
$500,000.
GAIC. Great American Insurance Company, an
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affiliate of the American Financial Group, Inc., or any
other affiliate thereof, together with its successors
and assigns.
Loan Agreement. The Amended and Restated Loan
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Restructuring Agreement dated as of December 23, 1991,
among the Borrower, the General Partner and the
Secretary."; and
(2) Amending the definition of "Borrower's Cash Flow",
"Note A" and "Note B" to read as follows:
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"Borrower's Cash Flow. All Excess Cash Flow so
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long as, after giving effect to the current Borrower's
use of such Excess Cash Flow, the Operating Account,
Working Capital Account and Capital Expenditure Account
contain in the aggregate at least $5,000,000, and not
otherwise required to be paid to the Secretary or
transferred to the Special Capital Expenditure Account
pursuant to Section 2.3(b)(iii)(y) hereof.
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Note A. The promissory note of the Borrower in
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the form of Exhibit A-1 attached to the Loan Agreement,
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dated the date thereof, duly executed and delivered to
the Secretary by the Borrower and payable to the order
of the Secretary in substitution for (and not in
discharge of the Indebtedness evidenced by) $55,000,000
of the $95,622,523.26 of principal and accrued interest
outstanding as of the date of the Loan Agreement under
the New Note No. 4 surrendered to the Borrower by the
Secretary, as endorsed by the Borrower on the date of
Amendment No. 1, a copy of which endorsement is
attached hereto as Exhibit A, including any further
endorsements, amendments, modifications, renewals or
replacements of such promissory note.
Note B. The promissory note of the Borrower in
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the form of Exhibit A-2 attached to the Loan Agreement,
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dated the date thereof, duly executed and delivered to
the Secretary by the Borrower and payable to the order
of the Secretary in substitution for (and not in
discharge of the Indebtedness evidenced by)
$40,622,523.26 of the $95,622,523.26 of principal and
accrued interest outstanding as of the date of the Loan
Agreement under the New Note No. 4 surrendered to the
Borrower by the Secretary, as endorsed by the Borrower
(i) on March 25, 1996, a copy of which endorsement is
attached hereto as Exhibit B and (ii) on the date of
Amendment No. 1, a copy of which endorsement is
attached hereto as Exhibit C, including any further
endorsements, amendments, modifications, renewals or
replacements of such promissory note."; and
(3) Deleting the definition of "IEDB".
B. ARTICLE 2. AMENDED TERMS is hereby amended as follows:
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(1) Section 2.3(a)(i) is hereby deleted and the
following is inserted in lieu thereof:
"(i) Regular Monthly Payments. (A) Commencing
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on April 30, 1992 and on the last day of each calendar
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month thereafter to and including December 31, 1995,
the Borrower shall make forty-four (44) consecutive
monthly payments of principal and interest on Note A,
each such monthly payment to be in the aggregate amount
of $631,533.
(B) Except as herein after provided, commencing on
January 31, 1996 through and including the GAIC
Maturity Date, the payments on Note A shall be
suspended and the amount of $631,533 shall be added on
the last day of each month to Note B.
(C) In the event that (1) the monthly calculation of
Cash Flow exceeds the interest then due and owing on
the GAIC Loan; the GAIC Loan has been prepaid and has
no current outstanding principal balance; the Operating
Account has a balance of at least $1,500,000; the
Working Capital Account has a balance of $2,000,000;
and the Capital Expenditure Account has a balance of
$1,300,000, the suspension of payment referred to in
Section 2.3(a)(i)(B) above shall be all or partially
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terminated for such month and such Cash Flow (to the
extent it exceeds the interest then due and owing on
the GAIC Loan, prepayment of any outstanding balance of
the GAIC Loan and the amounts of $1,500,000 in the
Operating Account, $2,000,000 in the Working Capital
Account and $1,300,000 in the Capital Expenditure
Account) shall be first applied to towards the monthly
$631,533 payment on Note A, second, applied to the
monthly payment due to BDC and the balance shall be
applied as a payment of Note B; (2) the GAIC Loan has
been repaid in its entirety and the Borrower has
terminated the GAIC Loan; and the Borrower has on
deposit in its Operating Account at least the sum of
$1,500,000, in its Working Capital Account the sum of
$2,000,000 and in its Capital Expenditure Account the
sum of $1,300,000, the suspension of the monthly
payments due on Note A shall be irrevocably terminated
and the Borrower shall be required to resume the
monthly payments of $631,533; and (3) by December 31,
1996, the Borrower shall have made any payment on Note
A pursuant to (1) above, then, unless the Borrower and
the Secretary agree that the price of corn is projected
to substantially increase in 1997 and by reason
thereof, the Borrower will continue to experience cash
flow difficulties in 1997, commencing January 31, 1997,
the Borrower shall commence payments on a monthly basis
of the interest then due and owing on Note A, with the
principal amount continuing to be added to Note B.
(D) Commencing on 31st day following the GAIC Maturity
Date and on the last day of each calendar month
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thereafter, the Borrower shall make consecutive monthly
payments of principal and interest on Note A, each such
monthly payment to be in the aggregate amount of
$631,533.
(E) Any payment on Note A, pursuant to this Section
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2.3(a)(i) shall be applied first to accrued but unpaid
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interest on Note A until paid in full, and second, to
the principal on Note A."
(2) Section 2.3(b)(i) and (ii) is hereby deleted
in its entirety and the following is inserted in lieu
thereof:
"(i) Transfers to Working Capital Account and
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Capital Expenditure Account. Commencing on March 1,
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1992, and continuing each month thereafter, the
Borrower shall, as soon as possible and in any event
within fifteen (15) days after the last day of each
calendar month, compute its Cash Flow for the
immediately preceding calendar month in accordance with
Exhibit 1 to Amendment No. 1 and shall, so long as the
Borrower has on deposit in its Operating Account the
sum of $1,500,000, transfer such Cash Flow in the
following order of priority (a) to GAIC for payment of
the accrued interest; (b) to GAIC for prepayment of the
outstanding principal of the GAIC Loan; (c) to the
Working Capital Account in an amount equal to the
difference between $2,000,000 and the balance in the
Working Capital Account as of the last day of such
month, (d) to the Capital Expenditure Account in an
amount equal to the difference between $1,300,000 and
the balance in the Capital Expenditure Account as of
the last day of such month, (e) to the payment of
interest and/or principal of Note A and (f) to the
payment of interest and/or principal of the Note B.
(ii) Payments from Excess Cash Flow. On and
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after repayment of the GAIC Loan in its entirety and
termination of the GAIC Loan by Borrower, and to the
extent there is Excess Cash Flow, Borrower shall,
subject to the provisions of Section 2.3(b)(iii)(y)
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hereto, pay to the Secretary (the "Note B Payment
Amount") the sum of: (1) 90% of the lesser of (A)
Excess Cash Flow for such month, or (B) $100,000, plus
(2) 80% of the lesser of (A) the amount by which such
Excess Cash Flow exceeds $100,000, or (B) $100,000,
plus (3) 70% of the lesser of (A) the amount by which such
Excess Cash Flow exceeds $200,000, or (B)
$100,000, plus (4) 60% of such Excess Cash Flow in
excess of $300,000. Any amount paid to the Secretary
pursuant to this Section 2.3(b)(i) or (ii) shall be
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applied first to accrued but unpaid interest on Note B
until paid in full and thereafter to the principal of
Note B until the outstanding principal amount of Note B
is paid in full. Thereafter, any amount paid to the
Secretary pursuant to this Section 2.3(b)(ii) shall be
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applied as provided in Section 2.3(a)(ii) hereof.
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C. ARTICLE 5. AFFIRMATIVE COVENANTS OF THE BORROWER is hereby
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amended as follows:
1. Section 5.3 is hereby amended by adding a new
subsection (c) reading as follows:
"(c) Until the GAIC Loan has been repaid in its
entirety and Borrower shall have terminated the GAIC
Loan, Borrower shall, so long as funds remain on
deposit in the Capital Expenditure Account, from time
to time, withdraw or transfer funds from the Capital
Expenditure Account to the Operating Account prior to
drawing down funds under the GAIC Loan.
2. Section 5.17 is hereby amended by deleting
the references to IEDB.
3. Adding new Section 5.27 reading as follows:
"Section 5.27 DRAWDOWNS UNDER GAIC LOAN. The
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Borrower agrees that it will transfer funds from the
Working Capital Account and the Capital Expenditure
Account into the Operating Account and use such
transferred funds for operation and maintenance of the
Plant prior to drawing down loans under the GAIC Loan."
D. ARTICLE 6 NEGATIVE COVENANTS OF THE BORROWER is hereby amended
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as follows:
1. Section 6.1 is hereby amended by deleting proviso
at the end of the Section and inserting in lieu thereof
the following:
"provided, however, that any Lien permitted by this
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Section 6.1 (other than the Lien securing the
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Indebtedness permitted by subsections (a), (c) and (d)
of Section 6.2 hereof) shall be junior and subordinate
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to the Lien securing the Notes."
2. Section 6.2 is hereby amended by deleting
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subsection (c) and inserting in lieu thereof the
following:
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"(c) the GAIC Loan secured by the GAIC Collateral, a
copy of such loan documentation attached hereto as
Exhibit D"; and
adding a new subsection (f) reading as follows:
"and the General Partner Loan, a copy of such
promissory note of the Borrower attached hereto as
Exhibit E".
3. Section 6.11 is hereby amended by deleting the
reference to IEDB.
4. Section 6.12 is hereby deleted in its entirety and
the following is inserted in lieu thereof:
Section 6.12 Administration Fee. From and after
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the date hereof and so long as the GAIC Loan shall be
outstanding, the Borrower shall be permitted to pay
monthly in arrears to the General Partner only fifty
percent (50%) of such month's amount of the
Administration Fee. The amount of such Administration
Fee not paid shall continue to accrue, but shall not be
paid until the GAIC Loan shall have been repaid.
Thereafter, the Borrower shall be permitted to pay
monthly in arrears to the General Partner only fifty
percent (50%) of such month's amount of the
Administration Fee; provided, however, that if a
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Default shall have occurred and is continuing, no
amount of the Administration Fee for such month shall
be paid. Any amount of Administration Fee not paid as
a result of the Section 6.12 may continue to accrue and
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constitute a debt due to the General Partner from the
Borrower, but shall not be paid, except out of
Borrower's Cash Flow.
5. Section 6.13 is hereby amended by adding after the
words "the Borrower shall not" the words "until the
GAIC Loan has been repaid, and then only" and deleting
the word "except".
E. ARTICLE 7. COVENANTS OF THE GENERAL PARTNER is
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hereby amended by adding a new Section 7.16 reading as follows:
"Section 7.16 New Equity. The General Partner
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agrees that it will use its best efforts to raise
additional funding that could be used to provide equity
to the General Partner or another entity, which could
then be made available (i) to the Borrower in the form
of a loan or (ii) for the acquisition of Borrower's
assets, on terms to be negotiated."
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ARTICLE 2. MISCELLANEOUS
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A. This Amendment may be executed in any number of counterparts, each
of which, when so executed, shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
B. This Amendment shall be construed with and as a part of the Loan
Agreement, as amended and supplemented hereby.
C. The Loan Agreement, as amended and supplemented by this Amendment,
is in all respects confirmed and shall, as so amended and supplement, remain
in full force and effect.
D. Unless specifically modified or amended by this Amendment, no
existing rights, interests, duties or obligations of the parties to the Loan
Agreement are affected, changed, or modified by the entering into this
Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
NEW ENERGY COMPANY OF INDIANA
LIMITED PARTNERSHIP, an
Indiana limited partnership
By its General Partner
NEW ENERGY CORPORATION OF
INDIANA, an Indiana
corporation
By: /s/
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Xxxxx X. Xxxxxxxxx
Its: President
NEW ENERGY CORPORATION OF
INDIANA, an Indian
corporation
By: /s/
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Xxxxx X. Xxxxxxxxx
Its: President
THE UNITED STATES OF AMERICA,
acting by and through the
Secretary of Energy
By: /s/
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Its: Contracting Officer
