Contract
Exhibit
10.2
TO
THE
MASTER
CREDIT AGREEMENT
THIS
FOURTH SUPPLEMENT AND FORBEARANCE AGREEMENT TO THE MASTER CREDIT AGREEMENT
(“Fourth
Supplement”) is made and entered
into as of March 27, 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, 2007 (“Second
Supplement”), and that certain Third Supplement and Forbearance Agreement
to Master Credit Agreement dated as of April 11, 2008 (“Third
Supplement”, and together with 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. 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 have created one or
more defaults under the Master Agreement.
F. In
the letter dated February 11, 2009, Lender declared a Default by
Borrower.
G. As
a condition to advancing any portion of the Loan to Lender on or subsequent to
the date hereof, Borrower and Lender desire to further amend the Master
Agreement as set forth in this Fourth Supplement to provide for additional terms
and conditions.
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
Fourth Supplement. This Fourth Supplement supplements
the Master Agreement (including the First Supplement, Second Supplement and
Third Supplement) and applies to all Loans thereunder.
B. Amendments
to Master Agreement. The Master Agreement is
amended as follows:
1. The
following definitions, which are set forth in Section 1 of the First Supplement,
are amended to read as follows:
“Construction and
Term Loan Maturity Date” means the earlier of (a) March 1, 2018, and (b)
the date on which the Obligations have been declared or have automatically
become due and payable, whether by acceleration or otherwise.
“Loan Conversion
Date” means the date which is the first day of the month the Required
Completion Date, which date shall not be later than August 1, 2009.
“Margin”
means five and forty hundredths percentage points (5.40%) (540 basis
points).
“Required
Completion Date” means the date of Substantial Completion (as defined in
the First Supplement), which shall occur on or before July 31,
2009.
2. The
following definitions, which are set forth in Section 1 of the Second
Supplement, are amended to read as follows:
“Margin”
means five and forty hundredths percentage points (5.40%) (540 basis
points).
“Revolving
Facility Maturity Date” means the earlier of (a) March 1, 2018, and (b)
the date on which the Obligations have been declared or have automatically
become due and payable, whether by acceleration or otherwise.
3. Section
8 of the First Supplement is amended to read as follows:
Interest
Rate. Interest on the
unpaid principal amount of the Construction and Term Loans will accrue on a
variable interest rate equal to LIBOR plus the Margin; provided, that the
interest rate shall not be less than 6.00% per annum (the “Annual
Rate”).
4. Beginning
on the Effective Date and for all periods thereafter, Section 9(a) of the First
Supplement is amended to read as follows:
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(a)
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During
Construction. During the Funding Period, Borrower will
pay in arrears, not later than the first day of each month, accrued and
unpaid interest at the Annual Rate based on the daily balance on the
Construction and Term Loan outstanding during the related monthly
period.
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5. Section
7 of the Second Supplement is amended to read as follows:
Interest. Interest on the
unpaid principal amount of Revolving Loans will accrue on a variable interest
rate equal to LIBOR plus the Margin; provided, that the interest rate shall not
be
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less than
6.00% per annum. Interest accruing on Revolving Loans will be paid in
full in arrears on the first date of each calendar month prior to the Revolving
Facility Maturity Date.
6. Article
I, Section 1.07 of the Master Credit Agreement is amended to read as
follows:
1.07 Computations. Computations of
interest and fees (to the extent computed on the basis of days elapsed)
hereunder will be made on the basis of a year of 360 days occurring in the
period for which such interest or fees are payable. All interest and
fees will be considered earned when due.
7. Section
3 of the Third Supplement is amended to delete the previous Loan Fee and replace
it with the following:
Article
I of the Master Credit Agreement is amended to add the following Loan
Fee:
Section 1.15
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 (the “Loan
Fee”). Borrower shall pay the Loan Fee in five consecutive
quarterly installments equaling $50,000 per quarter with Borrower paying the
first payment to Lender on or before April 1, 2010.
8. Article
I of the Master Credit Agreement is amended to add the following Restructure
Fee:
Section 1.16
Restructure
Fee. In addition to
any other loan fees provided in the Master Agreement, Borrower shall pay Lender
a restructure fee in the amount of $100,000 (the “Restructure
Fee”). Borrower shall pay the Restructure Fee on or before
June 30, 2009.
9. Article
II, Section 2.1 of the Master Credit Agreement is amended to add the following
conditions precedent:
(i) The
Bank Hapoalim LOC and FNBO’s confirmation of the Bank Hapoalim LOC must both be
extended in writing in a form acceptable to Lender through March 31, 2009 and
that certain letter of credit issued by Bank Hapoalim dated May 9, 2008 in the
amount of $5,500,000 (the “Bank Hapoalim
Second LOC”) and confirmation by JPMorgan Chase Bank, N.A. (“JPMorgan”)
of the Bank Hapoalim Second LOC must both be extended in writing in a form
acceptable to Lender through March 31, 2009, or, in the event one or more of the
foregoing is not extended, all the funds available under the applicable letter
of credit shall be drawn by Lender.
(j)
Before March 31, 2009, the Bank Hapoalim LOC and FNBO’s confirmation of the Bank
Hapoalim LOC must both be extended in writing in a form acceptable to Lender
through April 15, 2009, or, in the event one or more of the foregoing is not
extended, all the funds available under the Bank Hapoalim LOC shall be drawn by
Lender.
(k)
Before March 31, 2009, the Bank Hapoalim Second LOC and JPMorgan’s confirmation
of the Bank Hapoalim Second LOC must both be extended in writing in a form
acceptable to Lender through June 30, 2009, or, in the event one or more of the
foregoing is not
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extended,
all the funds available under the Bank Hapoalim Second LOC shall be drawn by
Lender.
(l) Borrower
shall have delivered JPMorgan’s consent to the assignment of proceeds under the
Bank Hapoalim Second LOC to Lender.
(m) Borrower
and Delta-T shall have executed that certain Amended and Restated Promissory
Note dated October 22, 2008 issued by Borrower in favor of Delta-T in the
principal amount of $5,000,000 (“Amended
Promissory Note”) to provide that all remaining payments owed by Borrower
to Delta-T thereunder shall not be due or payable on or before 24 months after
Performance Test Acceptance (as defined in the Construction Contract) and the
principal amount outstanding pursuant to the Amended Promissory Note shall be
reduced by all liquidated damages earned by Borrower.
(n) The
members of Borrower’s Board of Directors, collectively, shall have invested an
additional $1,000,000 in Borrower on terms acceptable to Lender, and a
Responsible Officer has delivered a certificate to Lender in a form satisfactory
to Lender certifying that the additional $1,000,000 investment from the
Borrower’s Board of Directors has been made and deposited with
Borrower.
(o) Borrower
shall have paid all legal fees and expenses due and owing to Lender under the
Master Agreement and this Fourth Supplement.
10. Article
IV, Section 4.01 of the Master Credit Agreement is amended to add the following
Financial Statement and Other Information deliverables:
(i) as
soon as available and in any event within 10 days after the end of each month,
an unaudited balance sheet of Borrower as of the end of such month and the
related unaudited statement of income of Borrower for such month and the then
elapsed portion of such fiscal year, setting forth in each case in comparative
form the figures for the corresponding month and the corresponding portion of
Borrower’s previous fiscal year; in either case all certified by an appropriate
Responsible Officer of Borrower as presenting fairly in all material respects
the financial condition and results of operations of Borrower in accordance with
GAAP, subject to normal year-end audit adjustments and the absence of
footnotes;
(j) within
10 days of the last day of each month, a certificate, in form and substance
satisfactory to Lender in all respects, of a Responsible Officer, attaching a
production report, certified as to accuracy, which sets forth pertinent
information in respect of the amount of ethanol produced and other information
as Lender may request from time to time; and
(k) upon
request, Borrower shall provide Lender such other reports related to the Project
or Borrower as Lender may reasonably request.
11. Article
IV, Section 4.15 of the Master Credit Agreement is amended to read as
follows:
Successful
Plant Operations Test.
Borrower shall achieve 100% name plate ethanol production for its ethanol
facility under the Construction Contract on or before May 1, 2009
and
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shall
have the capability to maintain 100% name plate ethanol production
indefinitely. Borrower will successfully complete all performance
tests contemplated under the Construction Contract on or before August 1, 2009
and shall have the capability to maintain 100% name plate production
indefinitely.
12. Article
IV of the Master Credit Agreement is amended to add the following Affirmative
Covenants:
4.22 Additional
Capital. Borrower must
have obtained $1,000,000 of additional equity or subordinated debt capital on or
before April 30, 2009, and a Responsible Officer must deliver a certificate to
Lender in a form satisfactory to Lender certifying that the additional
$1,000,000 equity or subordinated debt has been made and deposited with Borrower
on or before April 30, 2009.
4.23 Capital
Raising Plan. Borrower must
submit a comprehensive plan to attract additional equity or subordinated debt to
Lender in writing on or before May 1, 2009, which plan must include Borrower
regaining compliance with Section 5.01 of the Master Credit Agreement on or
before December 31, 2010 and Sections 5.02 through 5.06 of the Master Credit
Agreement on or before December 31, 2009 and be approved by Lender.
4.24 Payments
to Delta-T. Borrower shall
make no payments to Delta-T under the Amended Promissory Note during a Default
or Event of Default or after acceleration.
13. Section
5 of the First Supplement is amended to add the following limitation to
Advanced:
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(h)
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Limitation. Lender
shall have no obligation, and Borrower shall have no right to request,
demand or receive, any Advance to pay interest, fees or other amounts
owing to Lender. Notwithstanding the foregoing, all of Lender’s
rights under Section 5(b) of the First Supplement shall remain in full
force and effect.
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14. Article
VI, Section 6.01 of the Master Credit Agreement is amended to add the following
exception to the prohibition on Borrower incurring Indebtedness:
(f) Indebtedness
subordinate to the Obligations and acceptable to and approved in writing by
Lender in its sole discretion.
C. Waiver. Upon effectiveness of this Fourth Supplement and
satisfaction of all conditions precedent contained in the Master Agreement and
this Fourth Supplement, Lender hereby waives compliance by Borrower of Sections
5.01 through 5.06 of the Master Credit Agreement through September 30, 2009;
Section 9(d) of the First Supplement through December 31, 2009; and Section 4.14
of the Third Supplement as relates to Mechanical Completion.
D. Interest Rate
Acknowledgement. Borrower
hereby acknowledges and agrees that for all purposes under the Master Agreement
except for Section 1.04 and the application of Default Interest, the interest
rate shall be a variable interest rate equal to LIBOR plus the
Margin; provided, that the interest rate shall not be less than 6.00% per
annum.
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E. Conditions
to Effectiveness of this Fourth Supplement. The effectiveness
of this Fourth 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 Fourth Supplement, which may be in counterparts, executed by
Borrower and Lender.
F. 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 Fourth 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.
3. Definitions. Capitalized
terms used, but not defined, in this Fourth Supplement shall have the meaning
set forth in the Master Agreement.
4. Severability. Should
any provision of this Fourth Supplement be deemed unlawful or unenforceable, the
provision shall be deemed several and apart from all other provisions of this
Fourth Supplement and all remaining provisions of this Fourth Supplement shall
be fully enforceable.
5. Governing Law. To
the extent not governed by federal law, this Fourth 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 Fourth Supplement are for convenience only and in
no way define, limit or describe the scope or intent of any provision of this
Fourth Supplement.
7. Counterparts. This
Fourth 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
Fourth Supplement by telefax, facsimile, or e-mail transmission of an Adobe®
file format document also shall deliver an original executed counterpart of this
Fourth Supplement, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Fourth
Supplement.
G. Amended and Restated Master
Agreement. Borrower
agrees that on or before the 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 after Substantial Completion (as defined in the
First Supplement).
H. Reservation
of Rights. Nothing in this Fourth
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 EXISTING OR ACCRUED IN FAVOR OF BORROWER AS
OF THE DATE OF THIS FOURTH SUPPLEMENT.
J. 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 Fourth 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 | |
| Name: Xxxxxx Xxxxxxxxx | |||
| Title: President and General Manager | |||
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By:
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/s/ Xxxxxxx X. Xxxxx | |
| Name: Xxxxxxx X. Xxxxx | |||
| Title: Chairman of the Board | |||
| LENDER: | |||
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AGCOUNTRY
FARM CREDIT SERVICES, FLCA
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By:
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/s/ Xxxxxxxx X. Xxxxxx | |
| Name: Xxxxxxxx X. Xxxxxx | |||
| Title: Vice President | |||
[SIGNATURE
PAGE FOR FOURTH SUPPLEMENT TO MASTER CREDIT AGREEMENT]
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