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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ -General Manager
PURCHASE LETTER
June 19, 2007
City of ▇▇▇▇▇▇▇▇
Atkinson, NE
$6,864,000 $4,317,965
THE CITY OF ▇▇▇▇▇▇▇▇ THE CITY OF ▇▇▇▇▇▇▇▇
TAXABLE TAX INCREMENT REVENUE NOTE TAXABLE TAX INCREMENT REVENUE NOTE
(NEDAK ETHANOL, LLC PROJECT) (NEDAK ETHANOL, LLC PROJECT)
SERIES 2007A SERIES 2007B
Ladies and Gentlemen:
The undersigned agrees to purchase the Series 2007A and the Series
2007B Note issued by the City of ▇▇▇▇▇▇▇▇, Nebraska (the "Issuer"), as specified
on the attached Schedule I (the "Note") and for consideration received, the
undersigned (the "Purchaser") hereby certifies as follows:
1. The Purchaser has based its decision to invest in the Note solely on
its own review and negotiation of the documents providing for the issuance of
the Note (the "Transaction Documents") and its own investigation, discussion,
review, underwriting credit analysis and related undertakings with respect to
the Project.
2. It is understood that the Purchaser has undertaken to verify the
accuracy, completeness and truth of any statements made concerning the
transaction reflected in the Transaction Documents, including information
regarding the business and financial condition of NEDAK Ethanol, LLC ("Company")
and the Project, and including, but not limited to, the circumstances under
which the Note may be redeemed or defeased prior to its maturity, in whole or in
part, and any credit and reinvestment risks associated with redemption or
defeasing the Note, underwriting and analyzing the credit of the Project, the
Company and the credit risks associated with the sources of payments made on, or
with respect to, the Note. The Purchaser has conducted its own investigation of
the transaction reflected in the Transaction Documents, including information
regarding the business and financial condition of the Company.
3. The Purchaser has met with the Company and/or its designated
representatives and has been afforded the opportunity to ask such questions of
them as the Purchaser has deemed necessary in making its investment decisions,
including, but not limited to, the circumstances under which the Note may be
redeemed or defeased, in whole or in part, prior to its maturity, and the credit
and reinvestment risks associated with redemption or defeasance of the Note.
4. The Purchaser is familiar with the condition, financial and
otherwise, of the Company, and the Company has made available to the Purchaser
the opportunity to request and obtain all of the information referred to in the
Transaction Documents to evaluate the merits and risks of an investment in the
Note.
5. The Purchaser has been offered copies of, or full access to, each of
the Transaction Documents and all documents relating to the terms and conditions
of the offering and the issuance of the Note (including, but not limited to,
information regarding payment, redemption, defeasance and security with respect
to the Note, and all records, reports, financial statements and other
information concerning the Project, the Company and any third parties which is
or may be pertinent to the source of payment redemption, defeasance and security
for the Note) which, as a sophisticated and reasonable investor, the Purchaser
has requested and to which, as a sophisticated and reasonable investor, the
Purchaser would attach significance in making investment decisions.
6. The Purchaser is either a) a body politic and corporate and a
political subdivision of the State of Nebraska, or b) a financial institution or
other "accredited investor" as defined in Rule 501 of Regulation D of the United
States Securities and Exchange Commission and Section 8-1111(8) of the
Securities Act of Nebraska. If the Purchaser is an individual, the Purchaser is
an individual or married couple with a net worth in excess of $1 million, or an
individual with an income greater than $200,000 or a married couple with a
combined income greater than $300,000 for each of the past two years and with a
reasonable expectation of reaching the same income level in the current year, or
an entity in which all of the owners are accredited investors. The Purchaser can
bear the economic risk of its investment in Note and has such knowledge and
experience in business and financial matters, including purchase and ownership
of municipal and other obligations, and the analysis of purchasing similar
speculative, unrated, real-estate secured investments, as to be capable of
evaluating the merits and risks of the investment represented by its investment
in the Note and is aware of the intended use of the proceeds of the Note and the
risks involved therein.
7. The undersigned is a resident of the State of Nebraska, or, if an
entity is organized in and has its principal place of business in the State of
Nebraska, and understands that under no circumstances may the undersigned
transfer the Note to any person or entity that is not a resident of the State of
Nebraska for a period of nine months from the date of the last sale in the
offering of Note pursuant to which the undersigned purchased the Note subscribed
for herein. The undersigned understands that a legend may be placed on the Note
stating that the Note have not been registered under the Securities Act of 1933
and setting forth the limitations on resale set forth in this paragraph.
8. The Purchaser is duly and legally authorized to purchase obligations
such as the Note and its investment in the Note is a lawful investment for it
under all applicable laws.
9. The Series B Note has been purchased for the account of the
Purchaser for its own investment with its own unencumbered funds. The Purchaser
has not borrowed funds or pledged any collateral (including, but not limited to,
the Series B Note) in connection with its purchase of the Series B Note, and the
Purchaser has not undertaken, has not agreed to undertake and neither does the
Purchaser have the intention of undertaking, any distribution, securitization,
hypothecation transfer, resale, pledge, collateralization or any other
encumbrance on or disposal of the Series B Note (or any portion thereof or
interest therein) (any such action (whether before or after the purchase of the
Series B Note by the Purchaser) constituting a "Transfer of Series B Note
Interest"). The Purchaser holds, and intends to hold, the Series B Note for its
own account and for an indefinite period of time and does not intend to take any
action which could constitute a Transfer of Series B Note Interest. The
Purchaser understands that any Transfer of Series B Note Interest is restricted
pursuant to the terms of this Purchase Letter. The Purchaser is not acting as an
"underwriter" within the meaning of that term under federal or Nebraska state
laws.
10. The Purchaser acknowledges and represents that it has been advised
that the Note are not registered under the Securities Act of 1933, as amended
(the "1933 Act"), or any federal or state securities agency or commission, and
that the Company is not presently required to register under Section 12 of the
Securities and Exchange Act of 1934, as amended (the "1934 Act") and that no
trading market now exists for the Note. The Purchaser realizes that if the
Purchaser undertakes any Transfer of Note Interest, there may not be available
current business and financial information about the Company or the Project. The
Purchaser understands that any Transfer of Note Interest is restricted pursuant
to the terms of this Purchase Letter, including, but not limited to, the
requirement that prior to the date on which any such Transfer of Note Interest
is to be completed, the transferee sign a Purchase Letter substantially
identical to this Purchase Letter and otherwise in form satisfactory to the
Issuer and Paying Agent, and each of the conditions in paragraph 11 below shall
have been satisfied. Accordingly, the Purchaser understands that it may need to
bear the risks of investment in the Note for an indefinite period of time since
any Transfer of Note Interest prior to the maturity of the Note may not be
possible or may be at a price below that which the Purchaser is paying for the
Note.
11. The Purchaser acknowledges the information provided by the Company
may contain forward looking statements. These forward looking statements, which
in any event are not statements made by, or on behalf of, the Issuer, may
involve risks and uncertainties that could cause actual results to differ
materially from those anticipated in the forward looking statements.
12. The Purchaser will not undertake any Transfer of Note, except:
(a) in full good-faith compliance with all applicable state
and federal securities and banking laws;
(b) with full and accurate disclosure of all material facts to
the prospective purchaser(s) or transferee(s) to whom the Transfer of
Note is being made by the Purchaser (each, a "Transferee");
(c) either under effective federal and state registration
statements (which the Issuer shall not in any way be obligated to
provide) or pursuant to exemptions from such registrations (as
reflected in an opinion of nationally recognized securities counsel
acceptable to the Issuer);
(d) only in authorized denominations (as defined in the
Purchase Letter);
(e) to a Transferee delivering a purchase letter substantially
identical to this Purchase Letter and otherwise in form and substance
satisfactory to the Issuer;
(f) upon delivery to the Issuer of a certificate in form and
substance satisfactory to the Issuer from the Purchaser, in its
capacity as transferor, to the effect that, after due inquiry, the
Purchaser, in its capacity as transferor, has reason to believe that
the representations of the Transferee set forth in its Purchase Letter
are accurate and, in its capacity as transferor, the Purchaser has
disclosed to the Transferee such information and risks concerning the
Note and related security as a reasonable investor would consider
material.
13. The Purchaser acknowledges that stop transfer notations may be made
on the Note or any other documents evidencing ownership of the Note to the
effect that the Note have not been registered under the Securities Act of 1933
or the applicable state "Blue Sky" laws and that no Transfer of Note Interest
may be undertaken unless the Note are registered thereunder or such Transfer of
Note Interest is pursuant to an exemption from such registration (as reflected
in an opinion of nationally recognized securities counsel acceptable to the
Issuer) and otherwise in accordance with this Purchase Letter.
14. The Purchaser understands that any liability of the Issuer to the
Purchaser is limited to the Issuer's interest in the Redevelopment Contract and
any security with respect thereto delivered by, or on behalf of, the Company and
the Purchaser shall look exclusively thereto for payment on the Note and that no
recourse for the payment of any part of the principal of, premium, if any, or
interest on the Note or for the satisfaction of any liability arising from,
founded upon or existing by reason of the issuance, purchase or ownership of the
Note shall be had against the Issuer or any officer, director, member, agent or
employee of the Issuer or the City of ▇▇▇▇▇▇▇▇, as such, all such liability
being hereby expressly released and waived as a condition of and as a part of
the consideration for the issuance of the Note.
15. The Purchaser understands that (a) the Note is not secured by any
obligation or pledge of any moneys received or to be received from taxation or
from the Issuer or the City of ▇▇▇▇▇▇▇▇ or any political subdivision or taxing
authority thereof, (b) the Note will never represent or constitute a general
obligation, debt, Noted indebtedness or pecuniary obligation of the Issuer, the
City of ▇▇▇▇▇▇▇▇ or any political subdivision thereof, (c) no right will exist
to have taxes levied by the Issuer or the City of ▇▇▇▇▇▇▇▇ or any political
subdivision thereof for the payment of principal of, premium, if any, or
interest on the Note, and (d) the Note is a limited obligation of the Issuer,
payable solely out of and secured by income and revenues related to the Project,
as pledged pursuant to the Redevelopment Contract.
16. The Purchaser understands that the Note and interest on the Note is
not exempt from taxation for purposes of federal and Nebraska State taxation.
Very truly yours,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Purchaser
Received and Acknowledged by:
THE CITY OF ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mayor
ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Clerk