ENGAGEMENT LOAN PROPOSAL AGREEMENT
THIS
AGREEMENT, made and entered into this 4th
day of
October,
2007,
by and
between, Southern
Iowa Bioenergy, LLC,
and, or
their assigns, with their office located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
(hereinafter referred to as “Borrower”) and Commercial
Property Lenders, Inc.,
(hereinafter referred to as “Company”) with its’ office at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH
For
and
in consideration of the promises set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
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1.
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Borrower
hereby grants to Company for a period of 120 days,
beginning on the 18th
day of October 2007,
or
60
days after the last requested pertinent information has been received
by
Company, the right and authority to secure a loan permanent commitment
to
finance the property described herein as Exhibit “A”. This non-exclusive
right & authority to secure said commitment shall automatically renew
for an additional 30
days upon completion of the initial term unless canceled by Borrower
by
written notice to Company ten (10) days prior to the date of automatic
renewal.
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2.
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Company
shall provide one or more acceptable loan commitment letters for
a loan
amount of $30,000,000 that
is outlined in Exhibit “B”.
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3.
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In
the event that the Company provides Borrower with one or more permanent
loan commitments with the terms in accordance with Exhibit
“B”
attached, Borrower does hereby agree to pay Company a fee equal to
2.0
%
of
the loan amount (i.e. loan amount of $30,000,000
borrower to pay company $600,000.
This fee is payable to the company at time of loan closing, as outlined
in
Exhibit
“B”.
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4.
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Borrower
also agrees that upon the execution of this agreement Borrower shall
make
an initial deposit of $1.00
to
cover the cost of the initial credit reports, site visit, and the
cost of
reviewing the financial data as supplied by Borrower to determine
the
viability of the loan request. This sum is not refundable. In addition
upon execution of this agreement Borrower shall make a good faith
deposit
with Company in the amount of $30,000
upon the execution of this Agreement.
This good faith deposit is 100%
refundable
to
Borrower within thirty (30) days after the term of this agreement
provided
the Company cannot supply the loan terms and conditions as specified
in
Exhibit
“B”
or
other terms and conditions that are acceptable by Borrower. In the
event
the loan closes this good faith deposit will be credited towards
the fee
owed to Company at closing. If Borrower in any way defaults under
the
obligations of this agreement, Borrower agrees to pay Company as
liquidated damages a fee of $30,000.
If Borrower defaults on this agreement the $30,000
good faith deposit will be credited to the $30,000
fee
that borrower hereby agrees to pay Company. In the event that Company
is
forced to engage any third party to enforce this agreement, Borrower
agrees to reimburse Company for any reasonable attorney and collection
fees. Borrower shall be in default of this agreement if Company obtains
a
loan commitment as outlined in exhibit “B”(1) If Borrower elects not to
close the proposed loan as outlined in Paragraph 2 & Exhibit “B” (2)
fraud, bankruptcy: or (3) if borrower secures other financing for
the
Exhibit “A” property during the term of this agreement (4) if Borrower
refuses to assist and fully cooperate with the underwriting process
or
provide any requested information (5) if Borrower cannot provide
title to
the subject property or the required equity.
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5.
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For
the purposes of determining whether Company shall be deemed to have
earned
or be entitled to a commission hereunder, the term “Borrower” shall
include
such persons or entity, their respective family members and affiliates
or
other
entities over which they may exercise control.
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6.
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Borrower
hereby hires Commercial Property Lenders, Inc. to act on behalf of
Borrower to provide a permanent loan commitment letter.
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7.
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This
Agreement shall be construed and enforced in accordance with the
Laws of
The State of Georgia an shall be enforceable by additional reasonable
legal fees and court cost to bind and inure to the benefit of Borrower
and
Company and their respective heirs, executors, successors and
assigns.
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8.
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It
is also understood that if Borrower cannot break escrow because of
equity
shortage or cannot obtain its amended S.E.C. offering memorandum
for any
reason this Agreement will terminate. And any and all deposits that
have
been collected by Company will be refunded per this
Agreement.
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| IN WITNESS WHEREOF, Borrower and Company have caused this Agreement to be duly executed in their respective names as of this day and year first above written, and executed counterparts hereof have been furnished to Borrower and Company |
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▇. ▇▇▇▇▇▇
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10-18-07
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Borrower
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Date
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/s/
▇▇▇▇ ▇▇▇▇
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10-18-07
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Company
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Date
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EXHIBIT
A
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A
proposed 40 million gallon per year Bio Diesel facility to be located
in
Osceola, Iowa.
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EXHIBIT
“B”
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The
proposed loan shall be to construct a 40 million gallon per year
Bio
Diesel production facility, and a second loan will provide the working
capital for the facility. A USDA Business & Industry, 60% Guaranty
Loan Program will be used as a guaranty for this financing. The USDA
loan
amount shall be for $25,000,000 or a lesser amount acceptable to
Borrower.
A second loan to be used for working capital shall be in the amount
of
$5,000,000
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LOAN
“A”
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Loan
Amount:
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$25,000,000
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Loan
Type:
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Construction/Perm
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Credit
Enhanced:
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60%
USDA Guaranty
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Loan
Term:
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30
years (or up to 90% of economic life)
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Loan
Amortization:
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30
years (or up to 90% of economic life)
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Interest
only during construction (until facility has been
commissioned)
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Loan
Assumable:
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Yes
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Guaranty
Fee:
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2%
of the Guaranty Amount
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Origination
Fee:
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2%
payable to CPL
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Construction
Loan:
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1%
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Interest
Rate:
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Rate
to be a floating rate Prime Rate+ 2.00% to be
adjusting
on a quarterly basis
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Prepayment
Penalty:
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5%
1st yr./4% 4th yr./ 3%3rd
yr./2%
4th yr./1% 5thyr./
0% thereafter
Borrower
will be allowed to prepay up to 10% of
the
principal per year without a penalty.
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LOAN
“B”
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Loan
Amount:
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$5,000,000
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Loan
Type:
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Revolving
Working Capital
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Loan
Term:
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10
years
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Advance
Rate:
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70%
Finished Goods
80%
Accounts Receivables
50%
On Work in Process & Raw Goods
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Interest
Rate:
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1%-1.25%
Per Month On Outstanding Balance
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Lender
Fees:
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2%
of Line Amount
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CPL
Fees:
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2%
of Line Amount
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Plus
normal third party reports and other closing cost.
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Note:
The above mentioned loan terms and conditions are merely an outline
of the
proposed loan. The final commitment may or may not contain other
specific
verbiage.
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