Contract
Exhibit 10.1
,
TO
THE
MASTER
CREDIT AGREEMENT
THIS
FIFTH SUPPLEMENT AND FORBEARANCE AGREEMENT TO THE MASTER CREDIT AGREEMENT
(�Fifth
Supplement�) is made and entered
into as of September 30, 2009 (�Effective
Date�), by and between NEDAK ETHANOL, LLC, a Nebraska limited liability
company (�Borrower�),
and AGCOUNTRY FARM CREDIT SERVICES, FLCA (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�), that certain Second Supplement to Master Credit Agreement
dated as of February 14, 0000 (xXxxxxx
Supplement�), and that certain Third Supplement and Forbearance Agreement
to Master Credit Agreement dated as of April 11, 2008 (�Third
Supplement�), that certain Fourth Supplement and Forbearance Agreement
dated as of March 29, 2009 (�Fourth
Supplement�), and together with the Master Credit Agreement, First
Supplement, Second Supplement, Third Supplement, Fourth Supplement and this
Fifth 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. Capitalized terms not defined in this Fifth Supplement
shall have the meaning provided in the Master Agreement.
B. Borrower
did not obtain mechanical completion, as defined in the Construction Agreement
(�Mechanical
Completion�), of the Project by or on July 15, 2008.
C. Borrower
did not achieve 100% name plate production for its ethanol facility or pass the
required performance tests within 60 days after achieving Mechanical
Completion.
D. Borrower
has not complied with any of the financial covenants set forth in Article V
of the Master Credit Agreement.
E. The
failure to (i) meet the Mechanical Completion date, (ii) achieve 100% name plate
production, and (iii) to comply with the financial covenants has created one or
more defaults under the Master Agreement.
F. In
the letter dated February 11, 2009, Lender declared a Default by
Borrower.
G. Borrower
acknowledges that Lender has determined that one or more defaults of the Master
Agreement remain uncured, and that while Lender is not availing itself of
remedies and actions that it is entitled to, the Lender does not waive its right
to take such other and further action the Lender may deem necessary at any time,
now or in the future.
H. As
additional collateral for the Loans, Borrower caused Delta-T and Xxxxxxx to
provide a letter of credit confirmed by the FNBO for which Lender was a payment
beneficiary
and a
first secured party to the proceeds (as is further described in the Third and
Fourth Supplement.) In connection with a drawing on a LOC, Lender
received $3.995 million of letter of credit proceeds (the �LOC Proceeds�), which
Lender continues to hold as collateral for the Loans. Borrower and
Lender desire that Lender release $2.0 million of the LOC Proceeds to Borrower
exclusively to fund the purchase of grain inventories, subject to the provisions
of this Agreement.
I. As
a condition to releasing the LOC Proceeds, Borrower and Lender desire to further
amend the Master Agreement as set forth in this Fifth Supplement.
AGREEMENT:
Now,
therefore, in consideration of the mutual covenants and agreements contained in
this Agreement and other good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties agree as follows:
A. Effect of
Fifth Supplement. This Fifth Supplement
supplements the Master Agreement (including the First Supplement, Second
Supplement, Third Supplement and Fourth Supplement) and applies to all Loans
thereunder.
B. Amendments
to Master Agreement. The Master Agreement is
amended as follows:
1. Section 1.15 Loan Fee referred
to in the Fourth Supplement (and previously identified as �Section 1.14� in the
Third Supplement) is amended to require
the first payment of $50,000 of the $250,000 Lender Fee on January 1, 2010 and
quarterly payments of $50,000 thereafter until paid in full.
2. Section 1.16 Restructure Fee
is amended to require the Borrower to pay the $100,000 restructure fee on or
before June 30, 2010.
3. Section 1.17 Collateral
Repayment is added to read as follows:
Collateral
Repayment. If the Borrower obtains a USDA Business and
Industry Loan Guarantee and if Borrower receives a $5.0 million working capital
loan, then within ninety days of the receipt of the loan proceeds, the Borrower
shall return the $2.0 million of LOC Proceeds provided to Borrower for the
purchase of corn under this Fifth Supplement, with such funds to be available to
Borrower to fund reserves required by the Master Agreement unless otherwise
agreed by the parties.
4. Article II, Section 2.1 of the
Master Credit Agreement is amended to add the following conditions
precedent:
(p) Borrower
shall have paid all legal fees and expenses due and owing to Lender under the
Master Agreement and this Fifth Supplement.
(q) Borrower
shall cause LOC 1067 or the Extended LOC (as those terms are defined in
Amendment #3 of the Construction Agreement) provided to Lender as additional
collateral to continue to be assigned to Lender as a first secured party of that
collateral.
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5. The Master Agreement, including but
not limited to paragraph 9 of the First Supplement, is amended to require
repayment of the term loan in level monthly payments of principal plus accrued
interest at the Annual Rate so that the principal amount is fully amortized over
96 months beginning on April 1, 2010 and ending on February 1, 2018, with
any unpaid balance, if any, is immediately payable to Lender on that
date. Accrued interest must be paid with each principal
payment. The final maturity date remains February 1,
2018.
C. Conditions
to Effectiveness of this Fifth Supplement. The effectiveness
of this Fifth Supplement is subject to satisfaction, in Lender�s sole
discretion, of each of the following conditions precedent:
1. Representations and
Warranties. The representations and
warranties of Borrower in the Master Agreement, except those set forth at
Section 3.04 of the Master Credit Agreement, are true and correct in all
material respects on and as of the date hereof.
2. Delivery of Executed Loan
Documents. Lender shall have
received this Fifth Supplement, which may be in counterparts, executed by
Borrower and Lender together with the EPC Collateral Assignment Agreement in a
form acceptable to the Lender and executed by Borrower and Delta-T.
3. Delivery of $2.0 Million to Murex
Grain for Corn Purchases. Lender shall, upon request of the
Borrower, release up to $2.0 million of the LOC Proceeds to Borrower or to
Borrower�s agent, J.E.M. Trading LLC, and/or X.X. Xxxxxx Grain Co. Inc., 000
Xxxxxxxx Xxxxxx, XX Xxx 000, Xxxxxxxxx, XX 00000 (�Xxxxxx�). Such
funds shall be used exclusively to fund the purchase of corn for production of
ethanol by the Borrower. No other use may be made of this collateral
other than to purchase corn for production of ethanol by
Borrower. For each release of LOC Proceeds made to Borrower or to
Xxxxxx on Borrower�s behalf, Borrower shall provide or shall cause Xxxxxx to
provide documentary evidence of the related corn purchase that to Lender within
three days of each purchase of corn by Borrower or Xxxxxx.
4. Maintenance of Confirmed Letter of
Credit. Borrower shall cause Delta-T to maintain a confirmed
letter of credit for the benefit of Borrower, in the amount and according to the
conditions identified in Amendment Number Three to Engineering, Procurement and
Construction Services Fixed Price Contract (Third Amended EPC), including but
not limited to Paragraph 2, and to cause the confirming bank to assign the
proceeds of the letter of credit to Lender until the expiration of the letter of
credit on June 30, 2010.
D. General
Provisions.
1. No Other
Modifications. The Master Agreement, as expressly modified by
this Agreement, shall continue in full force and effect and be binding upon the
parties.
2. Successors and
Assigns. This Fifth 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.
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3. Definitions. Capitalized
terms used, but not defined, in this Fifth Supplement shall have the meaning set
forth in the Master Agreement.
4. Severability. Should
any provision of this Fifth Supplement be deemed unlawful or unenforceable, the
provision shall be deemed several and apart from all other provisions of this
Fifth Supplement and all remaining provisions of this Fifth Supplement shall be
fully enforceable.
5. Governing Law. To
the extent not governed by federal law, this Fifth Supplement and the rights and
obligations of the parties 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 Fifth Supplement are for convenience only and in no
way define, limit or describe the scope or intent of any provision of this Fifth
Supplement.
7. Counterparts. This
Fifth Supplement may be executed by the parties 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� 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
Fifth Supplement by telefax, facsimile, or e-mail transmission of an Adobe� file
format document also shall deliver an original executed counterpart of this
Fifth Supplement, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Fifth
Supplement.
G. Amended
and Restated Master Agreement. Borrower agrees that on or before any Loan Conversion
Date, Borrower will cooperate with Lender and use commercially reasonable
efforts to amend and restate the Master Agreement to reflect the terms
applicable to the Construction and Term Loan Facility and Revolving Facility at
the sole discretion of the Lender.
H. Reservation
of Rights. Nothing in this Fifth
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.
I. 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
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EXISTING
OR ACCRUED IN FAVOR OF BORROWER AS OF THE DATE OF THIS FIFTH
SUPPLEMENT.
J. Release
for Advances to Murex Grain. BORROWER ACKNOWLEDGES AND AGREES THAT
LENDER SHALL ADVANCE UP TO $2.0 MILLION OF LENDER�S COLLATERAL, SOME OF WHICH
MAY BE ADVANCED DIRECTLY TO XXXXXX FOR ITS PURCHASES OF CORN FOR AND ON
BORROWER�S BEHALF. BORROWER AGREES TO HOLD LENDER HARMLESS FROM
XXXXXX LOSS OF COLLATERAL INCLUDING BUT NOT LIMITED TO, BY REASON OF THE
FINANCIAL FAILURE OF XXXXXX. BORROWER ALSO 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
THAT WOULD FOLLOW FROM THE FAILURE OF XXXXXX TO ACCOUNT FOR OR GUARANTEE THAT
THE ADVANCES ARE USED TO PURCHASE GRAIN AVAILABLE FOR USE BY
BORROWER.
K. Recitals. The
Recitals to this Agreement are incorporated into the Agreement.
(Remainder
of Page Intentionally Left Blank)
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IN WITNESS WHEREOF, the
parties have caused this Fifth Supplement to be duly executed by their
respective authorized officers effective as of the day and year first written
above.
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BORROWER:
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By:
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/s/ Xxxxxx Xxxxxxxxx | |
| Xxxxxx Xxxxxxxxx | |||
| President | |||
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BORROWER:
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By:
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/s/ Xxxxxxx X. Xxxxx | |
| Xxxxxxx X. Xxxxx | |||
| Chairman | |||
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LENDER:
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AGCOUNTRY
FARM CREDIT SERVICES, FLCA
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By:
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/s/ Xxxxxxxx Xxxxxx | |
| Xxxxxxxx Xxxxxx | |||
| Vice President | |||
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