Exhibit 10.1

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT (this “Agreement”) is made and entered into as of May
3, 2016 by and among DAKOTA PLAINS TRANSLOADING, LLC, a Minnesota limited
liability company (“Dakota Transloading”), DAKOTA PLAINS SAND, LLC, a Minnesota
limited liability company (“Dakota Sand”), DAKOTA PLAINS MARKETING, LLC, a
Minnesota limited liability company (“Dakota Marketing” and, together with
Dakota Transloading and Dakota Sand, the “Borrowers”), DAKOTA PLAINS HOLDINGS,
INC., a Nevada corporation (“Holdings”), DPTS MARKETING LLC, a Minnesota limited
liability company (“DPTSM”), DAKOTA PETROLEUM TRANSPORT SOLUTIONS, LLC, a
Minnesota limited liability company (“DPTS”), DPTS SAND, LLC, a Minnesota
limited liability company (“DPTS Sand” and, together with Holdings, DPTSM and
DPTS, the “Guarantors”), the Lenders (the “Lenders”) from time to time party to
the Credit Agreement (defined below) and SUNTRUST BANK, in its capacity as
Administrative Agent for the Lenders (in such capacity, “Administrative Agent”)
and as Issuing Bank. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement.

 

RECITALS

 

A.                The Borrowers, Holdings, the Lenders and the Administrative
Agent are parties to that certain Revolving Credit and Term Loan Agreement,
dated as of December 5, 2014 (as amended by that certain Amendment No. 1 to
Revolving Credit and Term Loan Agreement dated as of August 6, 2015, as amended
by that certain Amendment No. 2 and Waiver to Revolving Credit and Term Loan
Agreement dated as of December 4, 2015, and as further amended, restated,
supplemented, replaced, refinanced or otherwise modified from time to time, the
“Credit Agreement”).

 

B.                The Loan Parties have informed the Administrative Agent and
the Lenders that certain Defaults and Events of Default are anticipated to occur
under (i) Section 8.1(a) of the Credit Agreement as a result of the Borrowers’
anticipated failure to comply with their principal repayment obligations under
Section 2.9(b) of the Credit Agreement for the month ending June 30, 2016; (ii)
Section 8.1(b) of the Credit Agreement as a result of the Borrowers’ anticipated
failure to comply with their interest payment obligations under Section 2.13 of
the Credit Agreement for the months ending May 31, 2016 and June 30, 2016; (iii)
Section 8.1(d) of the Credit Agreement as a result of the Loan Parties’
anticipated failure to comply with the financial covenant set forth in Section
6.1 of the Credit Agreement for the Fiscal Quarter ending June 30, 2016; (iv)
Section 8.1(d) of the Credit Agreement as a result of the Loan Parties’
anticipated failure to comply with the financial covenant set forth in Section
6.2 of the Credit Agreement for the Fiscal Quarters ending March 31, 2016 and
June 30, 2016; and (v) Section 8.1(d) of the Credit Agreement as a result of the
Borrowers’ anticipated failure to comply with the financial covenant set forth
in Section 6.3 of the Credit Agreement for the months ending May 31, 2016 and
June 30, 2016 (collectively, the “Anticipated Events of Default”).

 

C.                The Loan Parties have requested that the Administrative Agent
and the Lenders forbear from exercising their rights and remedies arising as a
result of the Anticipated Events of Default.

 

D.                The Administrative Agent and the Lenders have agreed to do so,
but only pursuant to the terms and conditions set forth herein.

 

 
 

 

AGREEMENT

 

NOW, THEREFORE, IN CONSIDERATION of the premises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                Estoppel, Acknowledgement and Reaffirmation. Each of the Loan
Parties acknowledges and agrees that, as of May 2, 2016: the aggregate
outstanding principal amount of the Tranche A Term Loan was not less than
$12,925,000; the aggregate outstanding principal amount of the Tranche B Term
Loan was not less than $22,500,000; the aggregate outstanding principal amount
of all Revolving Loan was not less than $20,000,000; and the LC Exposure was $0;
each of which constitutes a valid and subsisting obligation of the Loan Parties
to the Lenders that is not subject to any credits, offsets, defenses, claims,
counterclaims or adjustments of any kind. The Loan Parties hereby (a)
acknowledge that the Anticipated Events of Default are expected to occur; (b)
acknowledge their Obligations under the Credit Agreement and Loan Documents; (c)
reaffirm that each of the Liens and security interests created and granted in,
or pursuant to the Credit Agreement and Loan Documents is valid and subsisting;
and (d) acknowledge that this Agreement shall in no manner impair or otherwise
adversely affect such Obligations, Liens or security interests.

 

2.                Forbearance. Subject to the terms and conditions set forth
herein, the Administrative Agent, the Lenders shall, during the Forbearance
Period (as defined below), forbear from exercising any and all of their rights
and remedies available to them under the Credit Agreement, Loan Documents and
applicable law, but only to the extent that such rights and remedies arise
exclusively as a result of the occurrence, existence or continuation of the
Anticipated Events of Default; provided, however, that the Administrative Agent
and Lenders shall be free to exercise any or all of their rights and remedies
arising on account of the Anticipated Events of Default at any time upon or
after the occurrence of a Forbearance Termination Event (as defined below). For
the avoidance of doubt, subject to Section 4 of this Agreement, the Anticipated
Events of Default shall continue to exist and apply for all purposes and
provisions under the Credit Agreement and Loan Documents, including those
provisions, conditions, requirements, rights and obligations that are dependent
upon the absence of any Default or Event of Default.

 

3.                 Forbearance Termination Events; Forbearance Period. Nothing
set forth herein or contemplated hereby is intended to constitute an agreement
by the Administrative Agent or any Lender to forbear from exercising any of the
rights available to the Administrative Agent and the Lenders under the Loan
Documents or applicable law (all of which rights and remedies are hereby
expressly reserved by the Administrative Agent and the Lenders) upon or after
the occurrence of a Forbearance Termination Event. As used herein, a
“Forbearance Termination Event” shall mean the earliest of the following to
occur: (a) any Default or Event of Default under the Credit Agreement or the
other Loan Documents other than the Anticipated Events of Default; (b) a breach
by any Loan Party of any obligation or covenant under this Agreement; and (c)
July 25, 2016 (such date, the “Forbearance Termination Date”). The period from
the date hereof to (but excluding) the Forbearance Termination Date shall be
referred to as the “Forbearance Period”.

 

4.                Interest.

 

(a)                Default Interest. Notwithstanding anything to the contrary
herein, the Obligations shall accrue Default Interest pursuant to Section 2.13
of the Credit Agreement commencing on the earliest to occur of (i) an
Anticipated Event of Default under Section 8.1(a) or (b) of the Credit
Agreement, or (ii) a Forbearance Termination Event; provided, the payment of
Default Interest shall be subject to Section 4(b) of this Agreement.

 

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(b)                PIK Interest. On each date during the Forbearance Period that
interest is payable with respect to a Loan pursuant to Section 2.13 of the
Credit Agreement (or on the Deferred PIK Amount (defined below)), the Borrowers
may elect to pay such interest either (i) in cash or (ii) by increasing the then
outstanding Deferred PIK Amount by the amount of such interest with respect to
such Loan. “Deferred PIK Amount” means the amount of interest payable by
Borrowers, but not paid by the Borrower in cash pursuant to Section 4(b) of this
Agreement. As of the Effective Date, the Deferred PIK Amount is $0.00. The
outstanding Deferred PIK Amount shall bear interest at the Base Rate plus the
Applicable Margin in effect from time to time (including Default Interest) with
such interest payable on the same dates as interest is payable on Base Rate
Loans under Section 2.13(a) of the Credit Agreement. The outstanding Deferred
PIK Amount and all interest accrued thereon shall be payable in cash in full
immediately upon the occurrence of a Forbearance Termination Event.

 

(c)                Eurodollar Borrowings. Notwithstanding anything to the
contrary in the Credit Agreement or the other Loan Documents, no Borrowing may
be elected to be, converted into or continued as a Eurodollar Borrowing during
the Forbearance Period.

 

5.                Financial Reporting. In addition to, and not in lieu of, any
reporting requirements contained in the Credit Agreement and the other Loan
Documents, the Loan Parties shall provide the Administrative Agent with the
following deliverables accompanied in each case with a management discussion and
analysis for the information set forth in such deliverable:

 

(a)                commencing on or before May 19, 2016 and on the fourth
Business Day of each calendar week thereafter, a thirteen (13) week forecast of
cash receipts and cash expenditures for each of the Loan Parties on a
consolidated basis, in form and with detail reasonably acceptable to the
Administrative Agent; and

 

(b)                commencing on or before May 26, 2016 and on the fourth
Business Day of each calendar week thereafter, and in form and with detail
acceptable to the Administrative Agent, a reconciliation of actual cash receipts
and cash expenditures against the projected cash receipts and cash expenditures
provided pursuant to subsection (a) above, current through the prior week end.

 

6.                Plan of Action. On or before June 15, 2016, the Loan Parties
shall provide the Administrative Agent with a written plan to address the
liquidity needs of the Loan Parties, the capital structure of the Loan Parties
and the refinancing or restructuring of the Obligations, which written plan
shall be in form and with detail reasonably satisfactory to the Administrative
Agent.

 

7.                Access to Books and Records and Weekly Status Calls. The Loan
Parties hereby agree that, during the Forbearance Period, the Loan Parties and
their Subsidiaries shall (i) provide the Administrative Agent and the Lenders
with the visitation and inspection rights granted under Section 5.7 of the
Credit Agreement upon the occurrence of an Event of Default, even if no
Anticipated Event of Default or other Event of Default has occurred; and (ii)
conduct, beginning on May 10, 2016 and on each alternate Friday thereafter (or
such other time as mutually agreed by the Loan Parties and the Administrative
Agent), a status update (in the form of a conference call with the
Administrative Agent) regarding the Loan Parties’ financial performance,
liquidity position and the status of any material events or litigation.

 

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8.                Costs and Expenses. The Borrowers shall pay all reasonable and
documented out-of-pocket fees, costs and expenses incurred by the Administrative
Agent and the Lenders (including, without limitation, the reasonable and
documented fees and out-of-pocket costs and expenses of counsel) incurred in
connection with the Credit Agreement, this Agreement and the other Loan
Documents through the Effective Date (defined below).

 

9.                Conditions Precedent. This Agreement shall be effective as of
the date hereof (the “Effective Date”) when, and only when, each of the
following conditions shall have been satisfied or waived, in the sole discretion
of the Administrative Agent:

 

(a)                The Administrative Agent shall have received counterparts of
this Agreement duly executed by each of the Loan Parties, the Lenders and the
Administrative Agent.

 

(b)                The Administrative Agent shall have received such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party.

 

(c)                Counsel to the Administrative Agent shall have received
reimbursement from the Loan Parties for all reasonable fees, costs and expenses
charged the Administrative Agent and the Lenders in connection with the Credit
Agreement, this Agreement and the other Loan Documents through the Effective
Date.

 

10.                Incorporation of Agreement. Except as specifically modified
herein, the terms of the Loan Documents shall remain in full force and effect.
The execution, delivery and effectiveness of this Agreement shall not operate as
a waiver of any right, power or remedy of the Administrative Agent under the
Loan Documents, or constitute a waiver or amendment of any provision of the Loan
Documents, except as expressly set forth herein. The breach in any material
respect of any provision or representation under this Agreement shall constitute
an immediate Event of Default under the Credit Agreement, and this Agreement
shall constitute a Loan Document.

 

11.                Representations of the Loan Parties. Each of the Loan Parties
represents and warrants to the Administrative Agent and the Lenders as follows:

 

(a)                Except as acknowledged herein, no Default or Event of Default
exists under the Loan Documents on and as of the date hereof.

 

(b)                It has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and any other documents delivered by
it in connection herewith.

 

(c)                This Agreement and each other document delivered by it in
connection herewith has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

 

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(d)                No consent, approval, authorization or order of, registration
or qualification with, any court or Governmental Authority or third party is
required in connection with the execution, delivery or performance by such
Person of this Agreement.

 

(e)                The execution and delivery of this Agreement or any other
document delivered by it in connection herewith does not (i) violate, contravene
or conflict with any provision of its organizational documents or (ii)
materially violate, contravene or conflict with any laws applicable to it or any
of its Subsidiaries.

 

(f)                After giving effect to this Agreement, the representations
and warranties of the Loan Parties contained in the Loan Documents, as
supplemented by the disclosures on Schedule 11(f), are true, accurate and
complete in all materials respects on and as of the date hereof to the same
extent as though made on and as of such date except to the extent such
representations and warranties specifically relate to an earlier date.

 

12.                Release; No Action, Claims, Etc.. In consideration of the
Administrative Agent’s, the Lenders’ and the Issuing Bank’s willingness to enter
into this Agreement, each of the Loan Parties hereby releases and forever
discharges the Administrative Agent, the Lenders, the Issuing Bank and each of
the Administrative Agent’s, Lenders’ and Issuing Bank’s respective predecessors,
successors, assigns, officers, managers, directors, employees, agents,
attorneys, representatives, and affiliates (hereinafter all of the above
collectively referred to as the “Lender Group”), from any and all claims,
counterclaims, demands, damages, debts, suits, liabilities, actions and causes
of action of any nature whatsoever, in each case to the extent arising in
connection with the Loan Documents through the date of this Agreement, whether
arising at law or in equity, whether known or unknown, whether liability be
direct or indirect, liquidated or unliquidated, whether absolute or contingent,
foreseen or unforeseen, and whether or not heretofore asserted, which each of
the Loan Parties may have or claim to have against any of the Lender Group. As
of the date hereof, each of the Loan Parties hereby acknowledges and confirms
that it has no knowledge of any actions, causes of action, claims, demands,
damages and liabilities of whatever kind or nature, in law or in equity, against
any member of the Lender Group arising from any action by such Person, or
failure of such Person to act under the Loan Documents on or prior to the date
hereof.

 

13.                Further Assurances. Each of the parties hereto agrees to
execute and deliver, or to cause to be executed and delivered, all such
instruments as may reasonably be requested to effectuate the intent and
purposes, and to carry out the terms, of this Agreement.

 

14.                No Third Party Beneficiaries. This Agreement and the rights
and benefits hereof shall inure to the benefit of each of the parties hereto and
their respective successors and assigns. No other Person shall have or be
entitled to assert rights or benefits under this Agreement.

 

15.                Governing Law; Jurisdiction; Consent to Service of Process;
Waiver of Jury Trial. The governing law, jurisdiction, consent to service of
process and waiver of jury trial provisions set forth in Sections 10.5 and 10.6
of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

16.                Entirety. This Agreement and the other Loan Documents embody
the entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof. This Agreement
and the other Loan Documents represent the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.

 

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17.                Miscellaneous

 

(a)                This Agreement shall be binding on and shall inure to the
benefit of the Loan Parties, the Administrative Agent, the Lenders and their
respective successors and permitted assigns. It is the intent of the undersigned
Lenders that any third party acquiring any such Lender’s rights and obligations
under the Credit Agreement shall, with respect to such Lender’s portion of the
Loan, be subject to, and bound by, the terms and conditions of this Agreement,
including, without limitation, the provisions of Section 2 hereof. The terms and
provisions of this Agreement are for the purpose of defining the relative rights
and obligations of the Loan Parties, the Administrative Agent, the Issuing Bank
and the Lenders with respect to the transactions contemplated hereby and there
shall be no third party beneficiaries of any of the terms and provisions of this
Agreement.

 

(b)                Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

 

(c)                Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

(d)                Except as otherwise expressly provided in this Agreement, if
any provision contained in this Agreement is in conflict with, or inconsistent
with, any provision in the Loan Documents, the provision contained in this
Agreement shall govern and control.

 

(e)                This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement. Delivery of an executed counterpart of this Agreement by telecopy or
other electronic means shall be effective as an original.

 

(f)                This Agreement does not represent a commitment by the Lenders
and/or the Administrative Agent to make any new loans, restructure the
Obligations or grant or extend any financial accommodations to the Loan Parties,
except for the agreements expressly set forth herein.

 

[Signature pages follow.]

 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed and delivered as of the date first above written.

 

BORROWERS: DAKOTA PLAINS TRANSLOADING, LLC         By:   /s/ Gabriel G. Claypool
  Name: Gabriel G. Claypool   Title: President, CEO & Secretary              
DAKOTA PLAINS SAND, LLC         By: /s/ Gabriel G. Claypool   Name: Gabriel G.
Claypool   Title: President, CEO & Secretary               DAKOTA PLAINS
Marketing, LLC         By: /s/ Gabriel G. Claypool   Name: Gabriel G. Claypool  
Title: President, CEO & Secretary             HOLDINGS: Dakota Plains Holdings,
Inc.         By: /s/ Gabriel G. Claypool   Name: Gabriel G. Claypool   Title:
President  & COO             SUBSIDIARY LOAN PARTIES: DPTS MARKETING LLC        
By: /s/ Gabriel G. Claypool   Name: Gabriel G. Claypool   Title: Manager        
      DAKOTA PETROLEUM TRANSPORT SOLUTIONS, LLC         By: /s/ Gabriel G.
Claypool   Name: Gabriel G. Claypool   Title: Manager         DPTS SAND, LLC,  
      By: /s/ Gabriel G. Claypool   Name: Gabriel G. Claypool   Title: Manager

 

 

SIGNATURE PAGE
DAKOTA PLAINS FORBEARANCE AGREEMENT

 

 

 

 

 

ADMINISTRATIVE
AGENT:  
suntrust bank,
as Administrative Agent         By: /s/ William S. Krueger   Name: William S.
Krueger   Title: First Vice President             LENDERS: suntrust bank,
as a Lender and Issuing Bank         By: /s/ William S. Krueger   Name: William
S. Krueger   Title: First Vice President

 

 

SIGNATURE PAGE
DAKOTA PLAINS FORBEARANCE AGREEMENT

 

 

 

Schedule 11(f)

(Supplemental Disclosures)

 

 

1.The Loan Parties have disclosed a pending litigation matters with World Fuel
Services Corporation et al that if determined adversely against them could have
a Material Adverse Effect.

 

2.The Loan Parties have disclosed that they are unable to make the
representation in Section 4.15 (Solvency) of the Credit Agreement.