SECOND SUPPLEMENT
TO THE
MASTER CREDIT AGREEMENT
(Revolving Facility)
THIS SECOND SUPPLEMENT TO THE MASTER CREDIT AGREEMENT ("Second Supplement")
is made and entered into as of February 14, 2007, by and between NEDAK ETHANOL,
LLC, a Nebraska limited liability company, and FARM CREDIT SERVICES OF GRAND
FORKS, FLCA, a federal land credit association organized under the Farm Credit
Act of 1971, as amended. This Second Supplement supplements the Master Credit
Agreement between Lender and Borrower dated as of even date herewith (as the
same may be amended, restated, or otherwise modified (other than by Supplements
entered into pursuant to Section 1.02 thereof) from time to time, the "Master
Agreement").
RECITALS:
A. Borrower has requested that Lender establish a revolving credit facility in
favor of Borrower in the amount of $10,000,000; and
B. Lender is willing to provide such financing to Borrower pursuant to the
Master Agreement, the Supplements, and the other Loan Documents.
AGREEMENT:
1. Definitions. Capitalized terms used and not otherwise defined in this
Second Supplement have the meanings attributed to them below or in the Master
Agreement. Definitions in this Second Supplement control over inconsistent
definitions in the Master Agreement, but only to the extent the defined terms
apply to Loans under this Second Supplement. Definitions set forth in the Master
Agreement control for all other purposes. As used in this Second Supplement, the
following terms have the following meanings:
"LIBOR" means the one month London interbank rate reported on the tenth day
of the month by the Wall Street Journal from time to time in its daily listing
of money rates, defined therein as "the average of interbank offered rates for
dollar deposits in the London market based on quotations at five major banks."
If a one month LIBOR rate is not reported on the tenth day of such month, the
one month LIBOR rate reported on the first Business Day preceding the tenth day
of such month will be used. If this index is no longer available, Lender will
select a new index which is based on comparable information.
"Margin" means three and forty hundredths percentage points (3.40%) (340
basis points) as the same may be adjusted pursuant to Section 8 of the First
Supplement.
"Modified Revolving Commitment Amount" has the meaning set forth in Section
10.
"Revolving Commitment Amount" means an amount not to exceed $10,000,000
initially, as reduced from time to time, in accordance with the terms of this
Second Supplement and the
Master Agreement, until the Revolving Facility Maturity Date, at which time the
Revolving Commitment Amount will be $0.
"Revolving Credit Availability Period" means the period from the Loan
Conversion Date (as defined in the First Supplement) until the Revolving
Facility Maturity Date.
"Revolving Facility" means the revolving credit facility established
pursuant to this Second Supplement.
"Revolving Facility Maturity Date" means the earlier of (a) 120 months from
the Loan Conversion date which shall not be later than 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.
"Revolving Loan" means a Loan made under the Revolving Facility.
"Revolving Note" means the Revolving Credit Note made by Borrower payable
to the order of Lender, dated the date hereof, in the initial aggregate
principal amount of $10,000,000 in substantially the form of Exhibit 2A attached
hereto. The outstanding principal balance of the Revolving Note (i) shall
initially be zero dollars ($0), and (ii) effective as of the Loan Conversion
Date shall be $10,000,000.
2. Effect of Second Supplement. This Second Supplement, along with the
Master Agreement and the other Loan Documents, sets forth the terms of the
Revolving Loan Facility and Revolving Loan.
3. Conditions Precedent. Lender will have no obligation under this Second
Supplement, the Master Agreement, or any Loan Document until each of the
following conditions precedent is satisfied or waived in accordance with Section
8.02 of the Master Agreement:
(a) Lender has received all fees and other amounts due and payable on or
prior to the date hereof, including the fees and amounts for
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by Borrower pursuant to any Loan Document or any
other agreement with Lender;
(b) Lender has received Borrower's counterpart of this Second Supplement
and the Revolving Note duly executed and delivered by Borrower;
(c) Lender has received Borrower's counterparts of the Master Agreement
and all Loan Documents contemplated thereby, in each case duly
executed and delivered by Borrower, as well as all other duly executed
and delivered instruments, agreements, opinion letters, and documents
as Lender may require;
(d) the representations and warranties set forth in the Master Agreement
and each other Loan Document are true and correct in all material
respects as of the date hereof;
(e) all conditions precedent in the Master Agreement and each other Loan
Document have been satisfied or waived; and
(f) no Default or Event of Default has occurred and is continuing.
4. Establishment of Revolving Facility. Effective on the Loan Conversion
Date (as defined in the First Supplement), and during the Revolving Commitment
Availability Period, and subject to the terms, conditions, and limitations
herein, Borrower may borrow, prepay and re-borrow Revolving Loans from time to
time in amounts up to the Revolving Commitment Amount, as reduced to the
Modified Revolving Commitment Amount pursuant to Section 10 hereof. The
aggregate principal amount of the sum of Revolving Loans may not exceed the
Revolving Commitment Amount, as reduced to the Modified Revolving Commitment
Amount pursuant to Section 10 hereof, at any time. To request a Revolving Loan,
a Responsible Officer will give Lender written notice (or telephonic notice
promptly confirmed in writing) of each request for a Revolving Loan
substantially in the form of Exhibit 2B attached hereto (a "Revolving Draw
Request") prior to 11:00 a.m. (Grand Forks, North Dakota Time) three Business
Days prior to the requested date of each Revolving Advance. Each Revolving Draw
Request will be irrevocable and will specify: (a) the aggregate principal amount
to be borrowed and (b) the requested funding date (which must be a Business
Day). Revolving Loans will be advanced in accordance with Section 1.10 of the
Master Agreement.
5. Conditions to Each Advance. The obligation of Lender to make a Revolving
Loan is subject to the satisfaction of the following conditions precedent,
unless waived by Lender in accordance with Section 8.02 of the Master Agreement:
(a) Lender has received a timely Revolving Draw Request;
(b) at the time of and immediately after giving effect to such Loan, no
Default or Event of Default exists;
(c) all representations and warranties of Borrower set forth in the Loan
Documents are true and correct in all material respects on and as of
the date of such Loan before and after giving effect thereto, except
to the extent such representations and warranties relate solely to an
earlier period; and
(d) since the date of the most recent audited financial statements of
Borrower delivered to Lender, there has been no change which has had
or could reasonably be expected to result in a Material Adverse
Effect.
6. Repayment. Any amount of Revolving Loans outstanding that is greater
than the Revolving Commitment Amount, as reduced to the Modified Revolving
Commitment Amount pursuant to Section 10 hereof, is due and payable immediately.
All remaining principal and accrued interest and other Obligations related to
the Revolving Loans outstanding on Revolving Loans are due and payable on the
Revolving Facility Maturity Date.
7. Interest. Interest on the unpaid principal amount of Revolving Loans
will accrue on a variable interest rate equal to LIBOR plus the Margin. Interest
accruing on Revolving Loans
will be paid in full in arrears on the first day of each calendar month prior to
the Revolving Facility Maturity Date.
8. Commitment Fees. Borrower will pay Lender, on the first day of each
calendar quarter in arrears, unused commitment fees equal to 25 basis points
(0.25%) per annum of the un-drawn amount of the Revolving Commitment Amount
during the Revolving Credit Availability Period.
Reaffirmation of Representations and Warranties. Borrower's request for a
Revolving Loan will be deemed Borrower's reaffirmation of its representations
and warranties under the Loan Documents, except to the extent such
representations and warranties relate solely to an earlier period.
9. Prepayment Fees.
Subject to applicable fees and charges and such other terms and conditions
as set forth in this Section 9, Borrower may prepay the Revolving Facility, in
whole or in part at any time and from time to time, by giving irrevocable
written notice (or telephonic notice promptly confirmed in writing) to Lender
not less than thirty days prior to any such prepayment; provided, that the
amount of any such prepayment may not be less than $500,000. Each such notice
will be irrevocable and will specify the proposed date of such prepayment and
the principal amount to be prepaid. The amount specified in such notice will be
due and payable on the date designated in such notice, together with accrued
interest on the amount so prepaid and any prepayment fee or premium payable in
connection therewith.
The Revolving Facility may not be refinanced with a Person other than
Lender for a period of three (3) years after the Loan Conversion Date (as
defined in the First Supplement). If the Revolving Facility is refinanced with a
Person other than Lender prior to the date three (3) years from the Loan
Conversion Date, whether voluntarily or involuntarily (including any payment
effected by Lender's exercise of any right to accelerate), Borrower agrees to
pay to Lender a prepayment fee in the amount five percent (5.0%) on the amount
refinanced. Borrower agrees that the prepayment fee is paid for the right to
prepay and that is does not constitute liquidated damages or a penalty.
If the Revolving Facility is refinanced with a Person other than Lender
prior to the date four (4) years after the Loan Conversion Date, whether
voluntarily or involuntarily (including any payment effected by Lender's
exercise of any right to accelerate), Borrower agrees to pay to Lender a
prepayment fee in the amount one percent (1.0%) on the amount refinanced.
Borrower agrees that the prepayment fee is paid for the right to prepay and that
is does not constitute liquidated damages or a penalty.
10. Debt Service Reserve Account. Pursuant to Section 1.13 of the Master
Agreement, Borrower shall, on or prior to the Loan Conversion Date (as defined
in the First Supplement), establish and fully fund the Debt Service Reserve
Account. Upon receipt by Borrower of sales tax rebate proceeds received from the
State of Nebraska in the amount of not less than $2,400,000 ("Nebraska Tax
Rebate"), the Revolving Commitment Amount available to Borrower will, without
any action by Borrower, be permanently reduced to an amount not to
exceed $7,600,000 (the "Modified Revolving Commitment Amount") until the
Revolving Facility Maturity Date, at which time such amount will be $0.
Immediately upon receipt of the Nebraska Tax Rebate, and simultaneously upon the
reduction of the Revolving Commitment Amount to the Modified Revolving
Commitment Amount, Borrower will pay to Lender an amount equal to 100% of the
Nebraska Tax Rebate, which will be applied against the outstanding balance of
the Revolving Facility and the remainder, if any, applied in the inverse order
of the maturities of scheduled principal payments of Borrower. The payment by
Borrower to Lender of the Nebraska Tax Rebate under this Section 10 shall not be
subject to the prepayment fees set forth in Section 9 of this Second Supplement.
In the event the Nebraska Tax Rebate amount received is less than $2,400,000,
then Borrower shall fund the difference to the Debt Service Reserve Account from
available earnings (after payment of any then payable Tax Distributions).
Upon the reduction of availability under the Revolving Facility to the
Modified Revolving Commitment Amount, Borrower will no longer be required to
fund the Debt Service Reserve Account. Amounts in the Debt Service Reserve
Account may be used by Borrower in a manner consistent with the provisions of
the Master Agreement. Notwithstanding the foregoing, although upon receipt of
the Nebraska Tax Rebate Borrower will be limited to the Modified Revolving
Commitment Amount under the Revolving Facility, Lender shall nevertheless be
entitled to draw upon the Revolving Facility in an amount not to exceed the
Revolving Commitment Amount at any time if Borrower fails to make any required
payment when due under the Master Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Second Supplement to be
duly executed by their respective authorized officers as of the day and year
first written above.
BORROWER:
NEDAK ETHANOL, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and General Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Board Chairman
LENDER:
FARM CREDIT SERVICES OF GRAND FORKS,
FLCA
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE FOR SECOND SUPPLEMENT TO
MASTER CREDIT AGREEMENT]
EXHIBIT 2A
REVOLVING CREDIT NOTE
$10,000,000 Grand Forks, North Dakota
February 14, 2007
FOR VALUE RECEIVED, the undersigned, NEDAK ETHANOL, LLC, a Nebraska limited
liability company ("Borrower"), hereby promises to pay to the order of FARM
CREDIT SERVICES OF GRAND FORKS, FLCA (together with any subsequent holder
hereof, "Lender") or its successors and assigns, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, (a) on the Revolving Facility
Maturity Date (as defined in the Master Credit Agreement between Borrower and
Lender dated as of February 14, 2007 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"))
and the Second Supplement to the Master Credit Agreement (Revolving Facility)
between Borrower and Lender, dated the same date, the principal sum of Ten
Million and No/100 Dollars ($10,000,000.00) or so much of the unpaid principal
amount of the Revolving Facility (as defined in the Credit Agreement) as has
been advanced by Lender to Borrower pursuant to the Credit Agreement, and (b) on
each date specified in the Credit Agreement prior to the Revolving Facility
Maturity Date, the principal amount of the Revolving Loans payable to Lender on
such date as specified therein, in lawful money of the United States of America
in immediately available funds, and to pay interest from the Closing Date on the
unpaid principal amount thereof from time to time outstanding, in like funds, at
said office, at the rate or rates per annum and payable on such dates as
provided in the Credit Agreement. Borrower also promises to pay Default Interest
(defined in the Credit Agreement), on demand, on the terms and conditions set
forth in the Credit Agreement. In addition, should legal action or an
attorney-at-law be utilized to collect any amount due hereunder, Borrower
further promises to pay all costs of collection, including the attorneys' fees
of Lender.
All borrowings evidenced by this Revolving Note and all payments and prepayments
of the principal hereof and the date thereof shall be recorded by Lender in its
internal records; provided, that the failure of Lender to make such a notation
or any error in such notation will not affect the obligations of Borrower to
make the payments of principal and interest in accordance with the terms of this
Revolving Note and the Credit Agreement.
This Revolving Note is issued in connection with, and is entitled to the
benefits of, the Credit Agreement which, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain
events, all upon the terms and conditions therein specified.
THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NORTH DAKOTA AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
NEDAK ETHANOL, LLC
By:
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and General Manager
By:
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Board Chairman
EXHIBIT 2B
Revolving Draw Request
[Date]
Farm Credit Services of Grand Forks, FLCA
2424 32nd Avenue South, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇/▇▇▇ ▇▇▇▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇/▇▇. ▇▇▇▇▇▇▇▇:
Reference is made to the Master Credit Agreement dated as of February 14, 2007
(as amended and in effect on the date hereof, the "Credit Agreement"), between
the undersigned as Borrower, and Farm Credit Services of Grand Forks, FLCA as
Lender. Terms defined in the Credit Agreement are used herein with the same
meanings. This notice constitutes a Revolving Draw Request, and Borrower hereby
requests a Revolving Loan under the Credit Agreement, and in that connection
Borrower certifies the following information with respect to the Revolving
Borrowing requested hereby:
(A) Aggregate principal amount of the requested Revolving Loan(1):____________
(B) Date of the requested Revolving Loan (which is a Business Day):_________
Borrower hereby represents and warrants that the conditions specified in Section
5 of the Second Supplement to the Credit Agreement are satisfied.
Very truly yours,
NEDAK ETHANOL, LLC
By:
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Name:
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Title:
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1 Not less than $100,000 and an integral multiple of $100,000.