COLLATERAL ASSIGNMENT
Letter of Commitment and Intent
and ▇▇▇▇▇▇▇ Guarantee
THIS COLLATERAL ASSIGNMENT ("Assignment"), is made as of __________, 2008,
by NEDAK ETHANOL, LLC, a Nebraska limited liability company ("Borrower"), and
AGCOUNTRY FARM CREDIT SERVICES, FCA (formerly Farm Credit Services of Grand
Forks, FLCA) ("Lender"), both of whom are parties to the Credit Agreement (as
defined below).
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ and Lender are parties to that certain Master Credit
Agreement, dated as of February 14, 2007 (together with the "Supplements"
defined therein and as further amended, restated, supplemented, the "Credit
Agreement"; capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Credit Agreement);
WHEREAS, pursuant to the Credit Agreement, ▇▇▇▇▇▇ has agreed to make
certain credit facilities available to Borrower;
WHEREAS, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ intend to enter into the Third Supplement and
Forbearance to Master Credit Agreement (the "Third Supplement");
WHEREAS, Lender, Delta-T Corporation ("Delta-T") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ N.V.
("▇▇▇▇▇▇▇") are parties to that certain Letter of Commitment and Intent dated
January 16, 2008 (the "Letter of Commitment").
WHEREAS, in connection with the Third Supplement, Lender, Delta-T and
▇▇▇▇▇▇▇ intend to amended the terms of the Letter of Commitment pursuant to a
new Letter of Commitment and Intent dated ____________, 2008 (the "Amended
Letter of Commitment");
WHEREAS, in connection with the Third Supplement, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ N.V.
("▇▇▇▇▇▇▇") intends to provide a Guarantee to Borrower dated as of
_____________, 2008 (the "Gurantee") guaranteeing Delta-T Corporation's
performance of the Construction Agreement;
WHEREAS, under the terms of the Third Supplement, it is a condition
precedent to ▇▇▇▇▇▇'s obligations to make loans available to Borrower that
Borrower enters into this Assignment, pursuant to which Borrower shall pledge
and collaterally assign to Lender all of Borrower's obligations, right, title
and interest in and to the Amended Letter of Commitment and the Guarantee
(collectively, the "Assigned Agreements"), and Borrower desires to satisfy, such
condition precedent.
NOW, THEREFORE, in consideration of the premises set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, ▇▇▇▇▇▇▇▇ agrees as follows:
1. As security for all Obligations, Borrower collaterally assigns,
pledges and transfers to Lender, and grants to Lender, a security interest in
all of its rights, remedies (at law or in equity), title, obligations and
interest in and to the Assigned Agreement and all proceeds
and obligations thereof. Without limiting the generality of the foregoing, as
security for Obligations, Borrower specifically collaterally assigns, pledges
and transfers to Lender, and grants to Lender, a security interest in all rights
of Borrower to receive any sums of money or property in connection with the
Assigned Agreements, provided, that so long as no Event of Default has occurred
and is continuing, Borrower shall be entitled to collect and receive for its own
use monies paid under and in respect of the Assigned Agreements.
2. ▇▇▇▇▇▇▇▇ further acknowledges and affirms that the representations,
warranties and covenants of Borrower and the rights and remedies of Lender with
respect to the pledge of security interest in and collateral assignment of the
Assigned Agreements made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. [need to make sure this does not
violate in any way our rights or their obligations - by adding another sentence
to this paragraph.]
3. So long as no Event of Default has occurred and is continuing, insofar
as Borrower may have any rights, privileges or claims under the Assigned
Agreements, Borrower will use prudent business judgment concerning the
enforcement of such rights, will enforce the same diligently and in good faith
and will give Lender notice of each such enforcement undertaken by Borrower.
4. Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right, power and authority to (a) upon satisfying any
Borrower payment obligation defaults to Delta-T, declare this Assignment to be
unconditional and absolute, and thereby succeed fully to all of Borrower's
rights, obligations, remedies, title and interest in, to and under the Assigned
Agreements, (b) notify Delta-T and ▇▇▇▇▇▇▇ that the Assigned Agreements have
been assigned to Lender, whether or not Lender has commenced or completed
foreclosure or taken possession of thereof; and (c) to the extent permitted by
applicable laws, exercise all rights and obligations of Borrower under of the
Assigned Agreements. In furtherance of the foregoing, upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
authorizes and empowers Lender, in its sole discretion, to assert, either
directly or on behalf of Borrower, any right, privilege or claim which Borrower
then or thereafter may have under the Assigned Agreements, as Lender may deem
proper, and to receive and collect any and all damages, awards and other monies
resulting there from and to apply the proceeds thereof against any Obligations
then outstanding. [this last part contradicts our purpose and concept]
5. Borrower hereby irrevocably makes, constitutes and appoints Lender (and
all officers, employees or agents designated by Lender) as its true and lawful
attorney-in-fact for the purposes of enabling Lender or its agent or designee to
exercise its rights and obligations under Section 4 hereof.
6. [paragraph 6 is reserved]
7. ▇▇▇▇▇▇▇▇ further acknowledges and agrees that if, as a result hereof,
any Person or party to the Assigned Agreements other than Borrower becomes
obliged to pay or perform, and pays or performs, any debt, liability or
obligation to Lender, as assignee of Borrower, under the Assigned Agreements,
such debts, liabilities and obligations shall be discharged as to Borrower.
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8. Borrower shall keep Lender informed of all circumstances which have a
material and adverse effect upon the exercise of its rights, obligations and
remedies under the Assigned Agreements. In any event, Borrower shall not
release, cancel, sell, compromise, waive, amend, alter or modify any of its
rights, obligations or remedies under the Assigned Agreements, without first
obtaining the prior written consent of Lender.
9. Notwithstanding ▇▇▇▇▇▇'s rights hereunder, Lender shall not be obligated
to perform, and ▇▇▇▇▇▇ does not undertake to perform, any obligation, covenant,
condition or term with respect to the Assigned Agreements on account of this
Assignment. Lender shall have no responsibility on account of this Assignment
for the control or care of the Assigned Agreements, other than to handle the
Assigned Agreements in the same manner as it handles other collateral in the
ordinary course of business.
10. This Assignment shall remain in full force and effect and continue to
be effective should any petition be filed by or against Borrower for liquidation
or reorganization, should Borrower become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of Borrower's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11. This Assignment and all obligations of Borrower hereunder shall be
binding upon the successors and assigns of ▇▇▇▇▇▇▇▇ (including any
debtor-in-possession on behalf of ▇▇▇▇▇▇▇▇) and shall, together with the rights
and remedies of ▇▇▇▇▇▇, hereunder, inure to the benefit of ▇▇▇▇▇▇[didn't we
discussed solely for ▇▇▇▇▇▇?]. No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Obligations or any portion thereof or interest therein
shall in any manner affect the assignment made and security interest granted
hereunder to Lender. Borrower may not assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Assignment.
12. Upon the repayment in full of all Obligations and the termination of
the Commitments, the Liens granted herein shall terminate and all rights to the
Assigned Agreements shall revert to Borrower. Upon any such termination, Lender
will, at the expense of ▇▇▇▇▇▇▇▇, execute and deliver to Borrower such documents
as Borrower shall reasonably request, but without recourse or warranty to Lender
to evidence the termination of the Liens.
13. All notices, requests and other communications to Borrower or Lender
hereunder shall be made in accordance with the Credit Agreement.
14. No failure or delay on the part of Lender or any holder of any Note in
exercising any right or remedy hereunder, and no course of dealing between
Borrower on the one hand and
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the Lender or any holder of any Note on the other hand shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right or remedy hereunder or thereunder.
The rights and remedies herein and in the other Loan Documents are cumulative
and not exclusive of any rights or remedies which Lender or the holder of any
Note would otherwise have. No notice to or demand on Borrower not required
hereunder in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
Lender or the holder of any Note to any other or further action in any
circumstances without notice or demand.
15. No amendment or waiver of any provision of this Assignment, nor consent
to any departure by Borrower from this Assignment, shall in any event be
effective unless the same shall be in writing and signed by ▇▇▇▇▇▇, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
16. THIS ASSIGNMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF NORTH DAKOTA.
17. In case any provision in or obligation under this Assignment shall be
invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
18. This Assignment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has caused this Assignment to be executed by
its duly authorized officer as of the date first above written.
NEDAK ETHANOL, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: Pres. & Gen. Mngr.
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CONSENT OF DELTA-T CORPORATION
The undersigned, on behalf of Delta-T Corporation, consents to the foregoing
assignment of the Letter of Commitment and Intent dated 4-9-, 2008 to Lender.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: President & CEO
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CONSENT OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ N.V.
The undersigned, on behalf of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ N.V., consents to the foregoing
assignment of the Letter of Commitment and Intent dated ___________, 2008 and
the Guarantee dated _________, 2008 to Lender.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇
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Title: CEO
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EXHIBIT A
GUARANTY
Effective the __ day of _________, 2008, for value received and to induce NEDAK
Ethanol LLC ("NEDAK") to enter into Amendment No. 3 to the Engineering,
Procurement and Construction Services - Fixed Price Contract, dated August 9,
2006 with Delta-T Corporation ("Delta-T") for the design, construction,
installation, and testing of a 44 MGY ethanol production facility in ▇▇▇▇▇▇▇▇,
Nebraska ("EPC Contract"), which is incorporated by reference, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ NV
("▇▇▇▇▇▇▇" or "Guarantor"), hereby irrevocably guarantees to the NEDAK and its
successors, transferees and assigns, the prompt and complete performance by
Delta-T of all the terms and conditions of the EPC Contract, including all
amendments and changes to the EPC Contract that have been executed to date and
may be executed in the future; provided however, that (1) Guarantor shall have
all the rights that Delta-T has under the EPC Contract and (2) Guarantor
liability under this Guaranty shall be limited to the liability of Delta-T under
the EPC Contract.
Guarantor further agrees to pay any and all out-of-pocket expenses (including
attorney's fees) which may be paid or incurred by NEDAK to enforce the EPC
Contract or any rights under this Guaranty, including all such expenses to
enforce any arbitration award.
This Guaranty is an absolute and continuing guaranty of the full and punctual
performance by Delta-T of the EPC Contract This Guaranty is not conditioned upon
any requirement that NEDAK first attempt to obtain performance by Delta-T or
upon any other contingency whatsoever.
Arbitration. All claims, disputes, or controversies arising out of or relating
to this Guaranty or any breach of this Guaranty shall be decided in accordance
with the arbitration provision set forth in the EPC Contract and may be
consolidated or joined with any arbitration arising out of or relating to the
EPC Contract.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ NV
By: /s/ ▇▇▇▇▇ ▇▇▇
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Title: CEO - BNLN
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Date: _______________________________