Document:

exhibit1011_032212.htm

Exhibit 10.11

Execution Version

 

 

Loan Agreement

 

by and between

 

Arbor Bank,

 

as Lead Lender

 

and

 

NEDAK Ethanol, LLC,

 

a Nebraska limited liability company,

 

as Borrower

 

Dated as of June 19, 2007

 

  

  

  

Table of Contents

 

 

 

 

 

Page

 

 

	 Section 1.	Definitions 	 	 	 	 	 	1
	 	 	 	 	 	 	 	 
	Section 2.	Borrower Representations 	 	 	 	 	 	4
	 	 	 	 	 	 	 	 
	Section 3.	Lead Lender Representations 	 	 	 	 	 	5
	 	 	 	 	 	 	 	 
	Section 4.	The Loan 	 	 	 	 	 	7
	 	 	 	 	 	 	 	 
	Section 5.	The Borrower’s Note 	 	 	 	 	 	7
	 	 	 	 	 	 	 	 
	Section 6.	The Pledge 	 	 	 	 	 	 8
	 	 	 	 	 	 	 	 
	Section 7.	Loan Repayments and Prepayments 	 	 	 	 	 	9
	 	 	 	 	 	 	 	 
	Section 8.	Debt Service Reserve Fund 	 	 	 	 	 	10
	 	 	 	 	 	 	 	 
	Section 9.	Capitalized Interest Fund 	 	 	 	 	 	 10
	 	 	 	 	 	 	 	 
	Section 10.	
Disbursement of Loan Proceeds 

	 	 	 	 	 	 11
	 	 	 	 	 	 	 	 
	Section 11.	Transfer and Assignments 	 	 	 	 	 	 12
	 	 	 	 	 	 	 	 
	Section 12.	Participations 	 	 	 	 	 	 12
	 	 	 	 	 	 	 	 
	Section 13.	Assignment of Redevelopment Contract 	 	 	 	 	 	 12
	 	 	 	 	 	 	 	 
	Section 14.	Defaults and Remedies 	 	 	 	 	 	 13
	 	 	 	 	 	 	 	 
	Section 15.	Notices 	 	 	 	 	 	 13
	 	 	 	 	 	 	 	 
	Section 16.	Severability 	 	 	 	 	 	 13
	 	 	 	 	 	 	 	 
	Section 17.	Binding Effect 	 	 	 	 	 	13
	 	 	 	 	 	 	 	 
	Section 18.	This Agreement Governs 	 	 	 	 	 	 14
	 	 	 	 	 	 	 	 
	Section 19.	
Amendments 

	 	 	 	 	 	 14
	 	 	 	 	 	 	 	 
	Section 20.	Counterparts 	 	 	 	 	 	 14
	 	 	 	 	 	 	 	 
	Section 21.	Governing Law 	 	 	 	 	 	 14
	 	 	 	 	 	 	 	 
	Section 22.	Credit Agreement Notice 	 	 	 	 	 	 15

 

	Exhibit A	Qualified Project Costs	 	 	 	 	 	 
	Exhibit B	Resolutions of Borrower	 	 	 	 	 	 
	Exhibit C	Form of Borrower's Note	 	 	 	 	 	 
	Exhibit D 	Form of Security Agreement	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

 

 

  

SLC-6577725-1                                  i

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

 

 

  

  

LOAN AGREEMENT

 

This Loan Agreement (this “Agreement”), dated as of June 19, 2007, is by and between the NEDAK Ethanol, LLC, a Nebraska limited liability company as borrower (the “Borrower”) and Arbor Bank, a Nebraska banking corporation (the “Lead Lender”).

 

RECITALS:

 

A.           The Borrower has entered into a Redevelopment Contract (the “Redevelopment Contract”) with the City of Atkinson, Nebraska (the “Issuer”).

 

B.           Pursuant to the Redevelopment Contract, the Borrower agreed to acquire, construct and equip a 40 million gallon per year nameplate ethanol production plant (the “Facility”) located within the boundaries of the Issuer on land owned by the Borrower (the “Redevelopment Project”) and designated by Issuer as a redevelopment area pursuant to the Act (as hereinafter defined) (the “Redevelopment Area”).

 

C.           Pursuant to the Redevelopment Contract, the Issuer agreed to provide a grant (the “Grant”) to the Borrower to reimburse the Borrower for expenditures qualifying under the Act (as hereinafter defined) that Borrower will make or has made to acquire, construct and equip the Redevelopment Project (the “Qualified Project Costs”) which are payable from the proceeds of TIF Indebtedness (as hereinafter defined) pursuant to the Act.

 

D.           Pursuant to the Redevelopment Contract, the Issuer agreed to provide the Grant only after the Borrower has provided to the Issuer satisfactory evidence that private funds have been committed to the Redevelopment Project in amounts sufficient to complete the Redevelopment Project.

 

E.           The proceeds of this Loan (the “Loan Proceeds”), together with the proceeds of the Senior Credit Facility (as defined herein), shall constitute the private funds in amounts sufficient to complete the Redevelopment Project, as necessary to induce the Issuer to provide the Grant.

 

F.           Pursuant to this Agreement, the Borrower will use a portion of the Loan Proceeds to fund the Debt Service Reserve Fund and the Capitalized Interest Fund required to be established, and will pay a portion of the costs of issuing the Loan (the “Closing Costs”).

 

G.           The Lead Lender proposes to make the Loan, and the Borrower desires to borrow the Loan Proceeds, upon the terms and conditions set forth in this Agreement, the Pledge and the Borrower’s Note.

 

The Borrower and the Lead Lender, each in the consideration of the representations, covenants and agreements of the other as set forth in this Agreement, mutually represent, covenant and agree as follows:

 

 

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

  

  

THE AGREEMENT

 

Section 1.   Definitions.  In this Agreement, capitalized terms shall have the following respective meanings unless the context clearly requires elsewise:

 

“Act” shall mean Section 2 of Article VIII of the Nebraska Constitution, Sections 18-2101 through 18-2154 of the Reissue Revised Statutes of Nebraska, 1997, as amended, and acts amendatory or supplemental thereto from time to time, pursuant to which authority the Issuer pledged the TIF Indebtedness secured by the Issuer’s Series A Note and Issuer’s Series B Note.

 

“Agreement” shall mean this Loan Agreement, dated as of June 19, 2007, by and between the Borrower and the Lead Lender, as from time to time amended as permitted herein.

 

“Borrower” shall mean NEDAK Ethanol, LLC, and its successors and assigns.

 

“Borrower’s Note” shall have the meaning given that term in Section 5 hereof.

 

“Borrower’s Resolutions” shall have the meaning given that term in Section 2(b) and set forth on Exhibit B attached hereto.

 

“Capitalized Interest Amount” shall mean the amount of $870,850.00 to be deposited to the Capitalized Interest Fund from Loan Proceeds upon the closing of the Loan.

 

“Capitalized Interest Fund” shall mean the capitalized interest account established and maintained pursuant to Section 9 of this Agreement.

 

“Closing Costs” shall mean those amounts listed in Section 2(q) hereinbelow to be paid by the Borrower from the Loan Proceeds upon the closing of the Loan, which the Lead Lender shall disburse directly to the parties entitled to such payments as set forth in Section 2(q).

 

“Debt Service Reserve Fund” shall mean the debt service reserve account established and maintained pursuant to Section 8 of this Agreement.

 

“Debt Service Reserve Fund Requirement” shall mean the amount equal to ten percent (10%) of the original stated principal amount of the Loan, or $686,400.00, which amount shall be deposited to the Debt Service Reserve Fund by the Lead Lender on behalf of the Borrower from the Loan Proceeds upon the closing of the Loan.

 

“Event of Default” shall have the meaning given that term under Section 14 hereof.

 

“Excess Pledged Tax Increment Revenues” shall mean all Pledged Tax Increment Revenues in excess of those required to pay in full the Issuer’s Series A Note (as defined hereinbelow).

 

“Facility” shall mean the ethanol production facility acquired, constructed, equipped, owned and operated by the Issuer within the Redevelopment Area established within the boundaries of the Borrower.

 

  

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“First Reset Date” shall have the meaning given that term in Section 4(b) hereof.

 

“Grant” shall mean the grant of the TIF Indebtedness incurred as described on Exhibit C to the Redevelopment Contract, and paid by the Issuer to the Borrower upon requisition by the Borrower for reimbursement of Qualified Project Costs set forth on Exhibit A attached hereto and pursuant to Section 3.04 of the Redevelopment Contract.

 

“Issuer” shall mean the City of Atkinson, Nebraska, a body corporate and politic duly organized under the Constitution and the laws of the State of Nebraska.

 

“Issuer’s Resolution” shall mean the resolution of the governing body of the Issuer adopted on June 19, 2007 authorizing, among other things, the issuance of the Issuer’s Series A Note and Issuer’s Series B Note.

 

“Issuer’s Series A Note” shall mean the Issuer’s Tax Increment Revenue Note, Taxable Series 2007A (NEDAK Ethanol, LLC Plant Project), dated the date of issuance and delivery thereof, in the original principal amount of Six Million Eight Hundred Sixty-Four Thousand Dollars ($6,864,000.00) with a debt service coverage ratio of 1.20 to 1.00, and an initial interest rate of 9.5%, and a maturity date on or before December 1, 2021.

 

“Issuer’s Series B Note” shall mean the Issuer’s Tax Increment Revenue Note, Taxable Series 2007B (NEDAK Ethanol, LLC Ethanol Plant Project), dated the date of issuance and delivery thereof, in a principal amount not to exceed $4,400,000.00.  No proceeds from the Issuer’s Series B Note shall be paid until the Issuer’s Series A Note and the Borrower’s Note have both been fully paid.

 

“Lead Lender” shall mean Arbor Bank, a Nebraska banking corporation established and existing under the laws of the state of Nebraska.

 

“Legal Fees” shall mean the fees payable to Issuer’s Counsel, Placement Agent’s Counsel, Borrower’s Counsel and Lead Lender’s Counsel.

 

“Liquidated Damages Amount” shall mean the “Liquidated Damages Amount” as defined in the Redevelopment Contract.

 

“Loan” shall mean the loan made by the Lead Lender to the Borrower pursuant to this Agreement and the Borrower’s Note.

 

“Loan Documents” shall mean this Agreement and any and all ancillary documents necessary to consummate the transactions contemplated thereby.

 

“Loan Interest Rate” shall mean nine and one-half percent (9.50%).

 

“Loan Maturity Date” shall mean December 1, 2021.

 

“Loan Payment Date” or “Loan Payment Dates” shall mean any date on which any payment under this Agreement or the Borrower’s Note is due.

 

 

  

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“Loan Proceeds” shall mean all funds loaned to Borrower by Lead Lender pursuant to this Loan, in the original stated principal amount of Six Million Eight Hundred Sixty-Four Thousand and no/100 Dollars ($6,864,000.00).

 

“Origination Fees” shall mean the amount of $34,320 payable from the Loan Proceeds upon the closing of the Loan by the Borrower to the Lead Lender, on behalf of itself and all Participants, as origination fees for Lead Lender and all Participants, and distributed by Lead Lender to each Participant on a pro rata basis.

 

“Participant” shall mean all participating institutions listed on Schedule 1 attached hereto.

 

“Payment Direction Letter” shall have the meaning given that term in Section 7 hereof.

 

“Permitted Encumbrances” shall mean (a) those encumbrances which secure indebtedness incurred to acquire, construct and equip the Redevelopment Project or for any other physical improvements to the Redevelopment Area, as specified in the Section 5.02 of the Redevelopment Contract, and (b) that interest taken by the Senior Lender on the Senior Credit Facility.

 

“PILOT Payments” shall mean the payment in lieu of taxes that the Borrower is required to make under certain circumstances pursuant to Section 4.07 of the Redevelopment Contract.

 

“Placement Agent” shall mean Oppenheimer & Co., Inc.

 

“Placement Agent’s Counsel” shall mean Baker & McKenzie, LLP.

 

“Placement Agent Services Fee” shall have the meaning given that term in Section 2(q).

 

“Pledge” shall have the meaning given that term in Section 6 hereof.

 

“Pledged Revenues” shall mean all revenues pledged by Issuer pursuant to the Series A Note which includes Pledged Tax Increment Revenues, PILOT Payments and Liquidated Damages Amount.

 

“Pledged Tax Increment Revenues” shall mean the Tax Increment Revenues pledged by the Issuer to the payment of, and as security for, the TIF Indebtedness pursuant to Section 3.03 of the Redevelopment Contract.

 

“Qualified Project Costs” shall mean those costs payable from the proceeds of TIF Indebtedness pursuant to the Act, and as listed in Exhibit A to this Agreement, and used to reimburse the Borrower for the Project Costs (as defined in the Redevelopment Contract).

 

“Redevelopment Area” shall mean certain real property acquired by the Borrower situated within the boundaries of the Issuer as more particularly described in Exhibit A to the Redevelopment Contract.

 

 

  

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“Redevelopment Contract” shall mean that certain Redevelopment Contract, dated June 19, 2007, by and between the Borrower and the Issuer.

 

“Redevelopment Project” shall mean the entire project, including the Facility and the land owned by the Borrower on which the Facility shall be constructed and equipped.

 

“Second Reset Date” shall have the meaning given that term in Section 4(b) hereof.

 

“Security Agreement” shall have the meaning given that term in Section 6(a) hereof.

 

“Senior Lender” shall mean Farm Credit Services of Grand Forks, FCLA, along with its lending syndicate, or any successor lender under the Senior Credit Facility.

 

“Senior Credit Facility” shall mean that certain Master Credit Agreement between Borrower and Senior Lender dated as of February 14, 2007.

 

“Tax Increment Revenues” shall mean that portion of the ad valorem tax on real property in the Redevelopment Area in excess of the amount of those ad valorem taxes on the real property located in the Redevelopment Area which constitute the proportion of all the ad valorem taxes payable on the real property in the Redevelopment Area which is produced by the aggregate levy rate fixed each year by and for all public bodies with respect to the Redevelopment Area being applied to the Facility valuation (as defined in the Act) for the period of fifteen (15) years commencing January 1, 2007 as such taxes were divided by the Issuer pursuant to Section 3.01 of the Redevelopment Contract.

 

“TIF Indebtedness” shall mean the any bonds, notes, loans and advances of money or other indebtedness, including interest and premiums, if any, thereon, incurred by the Issuer pursuant to Article III of the Redevelopment Contract and secured in whole or in part by the Pledged Tax Increment Revenues.

 

Section 2.   Borrower Representations.  The Borrower represents, warrants and agrees as follows:

 

(a)           the Borrower has been duly organized, validly exists and is in good standing as a limited liability company under the laws of the State of Nebraska, is duly qualified to do business in Nebraska, and is duly qualified to enter into the transactions contemplated by and necessary or incident to the execution and delivery of the Loan Documents;

 

(b)           attached hereto as Exhibit B are the Resolutions of the Borrower (“Borrower’s Resolutions”) authorizing the transactions contemplated by the Loan Documents;

 

(c)           since the date of the last delivery of financial information to the Lead Lender, there has not been any material adverse change in the business of the Borrower;

 

(d)            there is no action, suit, proceeding, or to the Borrower’s knowledge, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to Borrower’s knowledge, threatened against or affecting the Borrower or its property or, to Borrower’s knowledge, any basis therefor, wherein an unfavorable decision, ruling or finding 

  

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 would adversely affect the transaction contemplated by or necessary or incident to the execution and delivery of the Redevelopment Contract or the Loan Documents or the validity or enforceability of the Redevelopment Contract or the Loan Documents;

 

(e)            there are no valid material security interests in or liens against the interest of the Borrower in the Redevelopment Project as of the date hereof, except those created by the Permitted Encumbrances;

 

(f)           the Borrower has duly authorized, by all necessary company action, the execution, delivery and due performance of the Loan Documents;

 

(g)           the Loan Documents have been duly executed and delivered by proper officers of the Borrower.  Each of the Loan Documents was executed in substantially the form in which approved by the Borrower;

 

(h)           the execution and delivery of the Loan Documents by the Borrower and the performance by the Borrower of its obligations thereunder do not and will not violate or constitute a default under the Amended and Restated Articles of Organization or Amended and Restated Operating Agreement of the Borrower or any court order, and do not and will not violate or constitute a default under any agreement, indenture, mortgage, lease or any other obligation or instrument to which the Borrower is bound, and no approval or other action by any governmental authority or agency is required in connection therewith, other than those which have been received;

 

(i)           there is no action or proceedings pending or threatened looking toward the dissolution, liquidation or sale of substantially all of the assets of the Borrower;

 

(j)           Borrower certifies that it has incurred Qualified Project Costs, as defined in the Redevelopment Contract, in an amount in excess of $6,822,180.00.  Attached to this Agreement is a true and correct listing of expenditures incurred with respect to the Project to date, all of which Borrower represents, warrants and agrees are Qualified Project Costs;

 

(k)           the names and addresses of the persons, firms or corporations to whom the payments requested hereby are due, the amounts to be disbursed and the general classification and description of the Qualified Project Costs, or to reimburse the Borrower for any Qualified Project Costs paid by the Borrower for which each obligation requested to be paid hereby was incurred are as set forth on Exhibit A attached hereto and incorporated herein by this reference;

 

(l)           such Qualified Project Costs have been made or incurred by the Borrower and have been paid by the Borrower, if payment to the Borrower is requested, or, if payment to the Borrower is not requested, are presently due to the persons to whom payment is requested, are valid Qualified Project Costs under the Redevelopment Contract and proper charges against the Loan Proceeds as set forth herein and no part thereof was included in any other request previously filed with the Lead Lender under the provisions thereof;

 

(m)           except for Qualified Project Costs for which payment has or will be requested and except as set forth on Exhibit A attached hereto, there are no outstanding statements which are now due and payable for labor, wages, materials, supplies or services in connection with the

 

  

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CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

purchase, construction and installation of the Project which, if unpaid, might become the basis of a vendors’, mechanics’, laborers or materialmen’s statutory or other similar lien upon the Project or any part thereof.  Set forth below is a description of (1) all disputed statements and the reasons for such disputes, and (2) all statements in process but not yet presented to the Lead Lender for payment;

 

(n)           all Qualified Project Costs incurred or to be incurred by the Borrower are qualified costs and/or expenditures under the Nebraska Community Development Law, R.R.S. Neb. §§ 18-2101, et. seq.;

 

(o)           unless previously provided to Lead Lender, an executed copy of the construction contract with respect to the Project is attached hereto;

 

(p)           Borrower hereby requests Lead Lender shall retain the following amounts from the Loan Proceeds:

 

	
  

	
i.

	
the Capitilized Interest Amount in the amount of $870,850.00 shall be retained from the Loan Proceeds and deposited by Lead Lender in the Capitalized Interest Fund established for the Borrower with respect to the Project to pay interest on the Loan due through December 1, 2008, pursuant to Section 9 of this Agreement;

 

	
  

	
ii.

	
the Debt Service Reserve Fund Requirement in the amount of $686,400.00 shall be retained from the Loan Proceeds by the Lead Lender and deposited in the Debt Service Reserve Fund, pursuant to Section 8 of this Agreement;

 

(q)           Borrower hereby requests Lead Lender shall retain the amount of $380,240 from the Loan Proceeds for the payment of the Closing Costs, as follows:

 

	
  

	
i.

	
Lead Lender shall distribute $34,320 (“Origination Fees”), as origination fees, to itself and each participating bank on a pro rata basis as per participation in the Loan;

 

	
  

	
ii.

	
Lead Lender shall distribute $205,920 to the Placement Agent, Oppenheimer & Co. Inc. as its total payment for placement agent services (“Placement Agent Services Fee”);

 

	
  

	
iii.

	
Lead Lender shall distribute $135,000 to pay Legal Fees as follows: Issuer’s Counsel ($50,000), Placement Agent’s Counsel ($50,000), Borrower’s Counsel ($30,000) and Lead Lender’s Counsel ($5,000); and

 

	
  

	
iv.

	
Lead Lender shall retain or distribute an additional $5,000 for miscellaneous charges (the “Miscellaneous Charges”), as necessary, and funds not used for Miscellaneous Charges shall be returned to Borrower;

 

(r)           Borrower hereby requests that Lead Lender distribute directly to Borrower upon Closing the amount of Four Million Nine Hundred Twenty-Six Thousand Five Hundred Ten and 

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

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CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

no/100 Dollars ($4,926,510.00), which constitutes the difference of the entire Loan Proceeds ($6,864,000.00), less the sum of the Capitalized Interest Amount ($870,850.00), the Debt Service Reserve Fund Requirement ($686,400.00) and the Closing Costs ($380,240);

 

               (s)           Borrower indemnifies, protects, holds harmless and discharges Issuer and Lead Lender from any and all damages, costs, claims or causes of action related to distribution of amounts to Borrower pursuant hereto, provided such parties have carried out their duties without gross negligence or willful misconduct; and

 

(t)           Borrower has been capitalized through equity contributions of its members in excess of $49,975,000.00 which, together with the proceeds of the Senior Credit Facility and the Loan, represents sufficient capitalization for Borrower to complete and operate the Facility.

 

Section 3.   Lead Lender Representations.  The Lead Lender represents, warrants and agrees as follows:

 

(a)           the Lead Lender is a banking corporation duly organized and existing under the laws of the State of Nebraska, with full power and authority to enter into the transactions contemplated by this Agreement;

 

(b)           the Lead Lender is a bank or savings and loan association as defined in Sections 3(a)(2) and 3(a)(5)(A), respectively, of the Securities Act of 1933, as amended, acting in its individual or fiduciary capacity;

 

(c)            the Lead Lender recognizes and acknowledges that the Issuer’s Series A Note will never represent or constitute a general obligation, debt, bonded indebtedness or a pecuniary obligation of the Issuer but are limited obligations payable solely from Pledged Revenues;

 

(d)           the Lead Lender certifies, under penalties of perjury, that the Lead Lender is not subject to the backup withholding provisions of Section 3406(a)(i)(C) of the Internal Revenue Code of 1986, as amended; and

 

(e)           the Lead Lender is not making the Loan with a view to distribution of any interest therein, except through the sale of loan participation interests as permitted in this Agreement to other banks and lending financial institutions which constitute “accredited investors” as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended and who will purchase such participation interests subject to this Agreement, including, without limitation, the making of the representations, warranties and agreements set forth in this Section.

 

Section 4.   The Loan.

 

(a)           Upon the terms and conditions of this Agreement and any other documents related thereto, the Lead Lender hereby loans to the Borrower the principal amount of Six Million Eight Hundred Sixty-Four Thousand and no/100 Dollars ($6,864,000.00).  Interest on the unpaid principal amount of the Loan shall be payable at the rates set forth in the Borrower’s Note or determined pursuant to the terms of the Borrower’s Note.

 

 

  

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(b)           The Loan Interest Rate shall reset on June 1, 2012 (“First Reset Date”) and June 1, 2017 (“Second Reset Date”).  The interest rate on the First Reset Date shall be equal to the 5-year U.S. Treasury Constant Maturity Index (average for the prior month) plus 475 basis points for the applicable five-year period.  The interest rate on the Second Reset Date shall be equal to the 5-year U.S. Treasury Constant Maturity Index (average for the prior month) plus 475 basis points for the remainder of the term of the Loan.

 

(c)           The Loan shall be repaid in the amounts, at the times and in the manner set forth in the Borrower’s Note.

 

(d)           The Loan is secured by and payable from the grant and pledge by Borrower to Lead Lender of Issuer’s Series A Note, the Pledge by Borrower to Lead Lender of Pledged Revenues, as described in Section 6 below, consisting of Pledged Tax Increment Revenues, PILOT Payments, and the Liquidated Damages Amount and amounts on deposit in the Debt Service Reserve Fund and the Capitalized Interest Fund, and from the Borrower as obligor under the Borrower’s Note.

 

Section 5.   The Borrower’s Note.  The Loan shall, in addition to this Agreement, be evidenced by a promissory note of the Borrower substantially in the form of Exhibit C (the “Borrower’s Note”), dated the date hereof, payable to the order of the Lead Lender in a principal amount equal to Six Million Eight Hundred Sixty-Four Thousand and No/100 Dollars ($6,864,000.00).  The Borrower’s Note shall evidence the Borrower as the obligor of the Loan.

 

Section 6.   The Pledge.                      The Pledged Revenues shall be evidenced by the Issuer’s Series A Note, as defined in Section 1.1 herein, made by the Issuer to the Borrower.  To induce the Lead Lender to make the Loan, the Borrower hereby grants and pledges (the “Pledge”) to the Lead Lender for the benefit of the Lead Lender and all of the Participants, and the Issuer hereby agrees to the Borrower’s pledge and grant of, a security interest in and to the Issuer’s Series A Note, together with the Pledged Revenues, pursuant to the Security Agreement (the “Security Agreement”) similar in form and substance as attached hereto as Exhibit D.

 

Section 7.   Loan Repayments and Prepayments.

 

(a)           This Loan is evidenced by the Borrower’s Note.  The principal amount and interest thereon shall be payable by the Borrower on the dates set forth therein.  In order to comply with the terms of the Borrower’s Note and this Agreement, the Borrower hereby agrees to direct Issuer to pay directly to the Lead Lender all Pledged Revenues on account of the Loan.  The Lead Lender and the Borrower agree that all such amounts shall be applied by the Lead Lender as follows and in the following order:

 

	
  

	
i.

	
to the payment of all fees and expenses of Lead Lender unpaid as of the date thereof;

 

	
  

	
ii.

	
to the repayment of all past due interest payments under the Borrower’s Note;

 

	
  

	
iii.

	
to the repayment of all past due principal payments under the Borrower’s Note;

 

  

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iv.

	
to restore the amount on deposit in the Debt Service Reserve Fund to the Debt Service Reserve Requirement if a deficiency exists therein;

 

	
  

	
v.

	
to the payment of all principal due and unpaid under the Borrower’s Note on the applicable Loan Payment Date;

 

	
  

	
vi.

	
to the prepayment of the unpaid principal amount of the Borrower’s Note as further set forth in Section 7(d) below; and

 

	
  

	
vii.

	
upon full payment and satisfaction of the Borrower’s Note, to Borrower.

 

(b)           The Lead Lender shall enter in its ledgers and records a record of all payments made.  At least ten (10) days prior to each Loan Payment Date, the Lead Lender agrees to provide to the Borrower a statement setting forth the amount of interest and principal due on such Loan Payment Date and the remaining outstanding principal amount of the Borrower’s Note on such Loan Payment Date assuming the regularly scheduled principal has been paid, being the remaining outstanding principal amount of the Borrower’s Note; provided, however, Lead Lender’s failure to provide such statement should in no way relieve Borrower’s obligation to make such payment on each Loan Payment Date.  The Borrower agrees that all Pledged Revenues payable or paid to the Borrower shall be paid directly to the Lead Lender so long as the Borrower’s Note has not been paid in full.  Borrower agrees to execute and deliver an irrevocable payment direction letter (the “Payment Direction Letter”) and any other documentation requested by Lead Lender advising Issuer to make all payments under the Issuer’s Series A Note, including all Pledged Revenues, directly to Lead Lender.   The Payment Direction Letter shall be irrevocable except by Borrower until full repayment and satisfaction of Borrower’s Note.  In the event the Lead Lender receives any Pledged Revenues in excess of the amount required to pay all amounts due under the Borrower’s Note in full, the Lead Lender agrees to credit any such overpayment to the account of Borrower pursuant to Section 7(a)(vi) and Section 7(a)(vii) above.

 

(c)           All payments paid by Issuer under the Issuer’s Series A Note shall be paid to the Lead Lender, pursuant to Section 7(b) immediately above. Any payment received under the Issuer’s Series A Note in excess of the scheduled payment under the Borrower’s Note shall be used to prepay principal thereunder, without any prepayment penalty to Borrower.

 

(d)           Except for mandatory prepayments of principal pursuant to Section 8(e) below, any payments of principal paid in advance of the date when payment is scheduled shall be applied against the scheduled principal payments in reverse order beginning with the last scheduled payment.  Accordingly, the amounts of each of the principal payments coming due shall not be adjusted except as necessary with respect to the final principal payment.  The Loan Maturity Date shall be accelerated to reflect the adjusted date of final outstanding principal payment.  Notwithstanding the foregoing, although scheduled principal payments shall not change, the outstanding principal balance of the Loan shall be reduced to reflect the prepayments.  Accordingly, interest payments shall be adjusted to the extent necessary to reflect the decreased  principal amount.  Mandatory prepayments of principal pursuant to Section 8(e) below shall be ratably adjusted against any remaining scheduled principal payments for the balance of the term of the Loan so that the purpose of such mandatory prepayment, which is to 

 

 

  

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decrease the amount of the principal payments and interest payments in order to achieve the Debt Service Coverage Ratio, is achieved. 

 

(e)           Except as expressly provided herein or in the Borrower’s Note, the Loan may not be prepaid in whole or in part prior to June 1, 2009. As of June 1, 2009, the Loan may be prepaid, in whole part, without penalty to Borrower, upon five (5) days’ written notice to the holder of the Borrower’s Note. All prepayments shall include accrued interest through the date of payment.

 

Section 8.   Debt Service Reserve Fund.

 

(a)           The Borrower hereby agrees to establish and maintain, so long as the Loan remains unpaid, a debt service reserve account with the Lead Lender (the “Debt Service Reserve Fund”) in an amount equal to the Debt Service Reserve Fund Requirement to be applied as hereinafter set forth.

 

(b)           The Lead Lender shall retain from the Loan Proceeds, an amount equal to the Debt Service Reserve Requirement upon the closing of the Loan.

 

(c)           The “Debt Service Coverage Ratio” shall mean the ratio of the quotient obtained by dividing (a) the amount of available Pledged Tax Increment Revenues plus interest earned on the actual funds held by the Lead Lender in the Debt Service Reserve Fund to scheduled Debt Service by (b) interest and principal due and payable to Lead Lender during the applicable Loan Payment Date to 1.00.  Commencing on June 1, 2009, and at all times thereafter for the term of the Series A Note, the Debt Service Coverage Ratio shall equal or exceed 1.20 to 1.00.

 

(d)           If the Lead Lender determines in its sole and reasonable discretion that the Debt Service Coverage Ratio will not be achieved on any Loan Payment Date, the Lead Lender may direct the Borrower to prepay principal in such amount as reasonably determined by Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

 

(e)           If, upon direction from the Lead Lender, the Borrower does not make payment as described in Subparagraph (d) above, the Lead Lender may utilize funds from the Debt Service Reserve Fund to prepay principal in such amount as reasonably determined by Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

 

(f)           If, after utilizing the Debt Service Reserve Fund to achieve the Debt Service Coverage Ratio or make payment under the Loan, the Lead Lender determines that that Debt Service Reserve Fund Requirement is less than ten percent (10%) of the original principal amount of the Loan, the Lead Lender shall notify the Borrower in writing of such deficiency. Upon written notice from Lead Lender, Borrower will replenish the Debt Service Reserve Fund to an amount equal to ten percent (10%) of the original principal amount of the Loan, being Six Hundred Eighty-Six Thousand Four Hundred and no/100 Dollars ($686,400.00).

 

(g)           In addition, Lead Lender may use the amounts in the Debt Service Reserve Fund to make loan repayments falling due on each Loan Payment Date to the extent that the payment made by the Issuer under the Issuer’s Series A Note on any such Loan Repayment Date is insufficient to pay the amounts due on such Loan Payment Date, after the application of any 

 

  

11

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

amounts on deposit in the Capitalized Interest Fund available to pay interest on such Loan Payment Date. 

 

(h)           The Debt Service Reserve Fund shall be maintained as an interest bearing account or certificate of deposit with the Lead Lender.  All interest earnings shall be retained in the Debt Service Reserve Fund.  On each Loan Payment Date, if there exists an excess above the Reserve Requirement in the Debt Service Reserve Fund and no withdrawal is required to pay principal of, and interest on, the Loan then due, the Lead Lender shall apply such excess to the prepayment of the principal amount on the Loan.  The Debt Service Reserve Fund shall be valued at the amount actually on deposit and currently available to withdraw (excluding accrued but unpaid interest earnings) for the purposes of determining a deficiency.

 

(i)           The Borrower hereby grants a security interest in the Debt Service Reserve Fund, all amounts on deposit therein and the proceeds thereof to the Lead Lender to secure all amounts payable on the Loan.  If, on any date, the amount on deposit in the Debt Service Reserve Fund is equal to or greater than the total principal of, and accrued and unpaid interest on, the Loan, the Lead Lender shall apply such amounts to the prepayment of the Loan in full.  Any excess amounts in the Debt Service Reserve Fund after such payment of the Loan in full, shall be paid by the Lead Lender to the Borrower.

 

Section 9.                      Capitalized Interest Fund.

 

(a)           The Borrower hereby agrees to establish and maintain, so long as amounts are on deposit therein, a funded interest account with the Lead Lender (the “Capitalized Interest Fund”) to be applied as hereinafter set forth.

 

(b)           The Lead Lender shall retain from the Loan Proceeds an amount equal to the Capitalized Interest Amount upon the closing of the Loan.

 

(c)           The amounts in the Capitalized Interest Fund shall be used solely to pay interest due on the Loan on each Payment Date to the extent of the amount of interest then due or amounts on deposit in the Capitalized Interest Fund, as the case may be.

 

(d)           The Capitalized Interest Fund shall be maintained as an interest bearing account or certificate of deposit with the Lead Lender.  All interest earnings shall be retained in the Capitalized Interest Fund and applied to the payment of interest on the Loan.

 

(e)           The Borrower hereby grants a security interest in the Capitalized Interest Fund, all amounts on deposit therein and the proceeds thereof to the Lead Lender to secure all amounts payable on the Loan.

 

Section 10.                      Disbursement of Loan Proceeds.

 

(a)           The Loan Proceeds shall be disbursed entirely on the date of Loan closing as follows:

 

	
  

	
i.

	
the Lead Lender, on behalf of the Borrower, shall pay the amount of $380,240 to the parties entitled thereto the Closing Costs as set forth

 

 

 

  

12

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

 

	 	
 

	
in Section 2 (g);

 

	
  

	
ii.

	
the Lead Lender shall retain an amount equal to the Debt Service Reserve Requirement and deposit such amount to the Debt Service Reserve Fund;

 

	
  

	
iii.

	
the Lead Lender shall retain an amount equal to the Capitalized Interest Amount and deposit such amount to the Capitalized Interest Fund; and

 

	
  

	
iv.

	
the Lead Lender shall disburse the balance of the Loan Proceeds to the Borrower.

 

    (b)           Receipt by the Lead Lender of the following shall be conditions precedent to its obligation to disburse the Loan:

 

	
  

	
i.

	
executed copies of this Agreement and the Borrower’s Note;

 

	
  

	
ii.

	
the Security Agreement, along with possession of the Issuer’s Series A Note;

 

	
  

	
iii.

	
an opinion of special counsel to the Issuer in form and substance acceptable to the Lead Lender;

 

	
  

	
iv.

	
an opinion of counsel to the Borrower in form and substance acceptable to the Lead Lender;

 

	
  

	
v.

	
evidence acceptable to the Lead Lender, as confirmed by a certificate of the Issuer that the Borrower has expended Qualified Project Costs in an amount at least equal to the principal amount of the Loan and that the Grant may be made; and

 

	
  

	
vi.

	
such other showings, certificates and opinions as the Lead Lender may reasonably require to evidence compliance of the Borrower with the terms of the Borrower’s Note, the Issuer’s Series A Note and this Agreement.

 

Section 11.   Transfer and Assignments.

 

(a)           The Borrower shall not have the right to assign this Agreement or any of the Borrower’s obligations hereunder, or any interest herein, to any other party unless such assignment has been consented to by Issuer pursuant to Issuer’s rights set forth in the Redevelopment Agreement and by Senior Lender pursuant to the Senior Credit Facility.

 

(b)           The Lead Lender shall have the right, subject to the further provisions of this Section 11, to sell or assign all of its interest in this Agreement, the Borrower’s Note and related documents (each such transfer, an “Assignment”) to any commercial lender or other financial institution (and “Assignee”).

 

(c)           In addition to assignment of the Loan in whole, the Lead Lender shall have the right to sell participations in the Loan as set forth in Section 12 below.

 

 

 

  

13

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

Section 12.   Participations.

 

(a)           The Lead Lender shall have the right, subject to the further provisions of this Section 12, to grant or sell a participation in all or any part of its Loan or the Borrower’s Note or the Pledge (a “Participation”) to any commercial lender or other financial institution (a “Participant”) without the consent of the Borrower, or any other party hereto.

 

(b)           Notwithstanding anything in the foregoing to the contrary, except in the instance of an Assignment, (a) no Participant shall have any direct rights hereunder, (b) the Borrower and the Lead Lender, other than the assigning or selling lender, shall deal solely with the assigning or selling lender and shall not be obligated to extend any rights or make any payment to, or seek

 

any consent of, the Assignee or Participant, (c) no Assignment or Participation shall relieve the assigning or selling lender from any of its other obligations hereunder and such lender shall remain solely responsible for the performance hereof, and (d) no Assignee or Participant, other than an affiliate of the assigning or selling lender, shall be entitled to require such lender to take or omit to take any action hereunder, except that such lender may agree with such Assignee or Participant that such lender will not, without such Assignee’s or Participant’s consent, take any action which would, in the case of any principal, interest or fee in which the Assignee or Participant has an ownership or beneficial interest: (w) extend the final maturity of any Loans, (x) reduce the interest rate on the Loans, (y) forgive any principal of, or interest on, the Loans or any fees, or (z) release all or substantially all of the collateral security for the Loans.

(c)           No lender shall be permitted to enter into any Assignment or Participation with any Assignee or Participant who is not a United States Person unless such Assignee or Participant represents and warrants to such lender that, as at the date of such Assignment or Participation, it is entitled to receive interest payments without withholding or deduction of any taxes and such Assignee or Participant executes and delivers to such lender on or before the date of execution and delivery of documentation of such Participation or Assignment, a United States Internal Revenue Service Form W8BEN or W8ECI, or any successor to either of such forms, as appropriate, properly completed and claiming complete exemption from withholding and deduction of all Federal Income Taxes.  A “United States Person” means any citizen, national or resident of the United States, any corporation or other entity created or organized in or under the laws of the United States or any political subdivision hereof or any estate or trust, in each case that is not subject to withholding of United States Federal income taxes or other taxes on payment of interest, principal or fees hereunder.

 

(d)           Each lender may furnish any information concerning the Borrower in the possession of such lender from time to time to Assignees and Participants and potential Assignees and Participants.

 

(e)           Notwithstanding any other provision in this Agreement, any lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement.

 

Section 13.   Assignment of Redevelopment Contract.  The Borrower covenants and agrees that it will not assign its rights under the Redevelopment Contract to any other party.

 

 

  

14

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

Section 14   Defaults and Remedies.  An “Event of Default” shall mean each or any of the following:

 

	
  

	
(a)

	
failure of the Borrower to pay any amount due under the Borrower’s Note or this Agreement within fifteen (15) days of when due; or

 

	
  

	
(b)

	
a breach by Borrower of any covenant, condition, representation or warranty contained herein or in any of the Loan Documents within ten (10) days after written notice; or

 

	
  

	
(c)

	
a default by the Borrower under the Redevelopment Contract after applicable notice and cure periods under the Redevelopment Contract.

  

Upon the occurrence of an Event of Default, the Lender may pursue any remedies available at law.

 

Section 15.   Notices.  All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, registered or certified mail, postage prepaid, addressed as follows:

 

 

To the Borrower:                  NEDAK Ethanol, LLC

87590 Hillcrest Road – P.O. Box 391

Atkinson, NE 68713

Attention:  Jerome Fagerland, President and General Manager

Phone:  402.925.5570

Fax:  402.336.2478

With a copy to:                    Blackwell Sanders Peper Martin LLP (“Borrower’s Counsel”)

1620 Dodge St., Ste. 2100

Omaha, NE 68102

Attention:  Michelle S. Mapes

Phone:  402.964.5091

Fax:   402.964.5050

To the Lead Lender:            Arbor Bank

911 Central Ave.

P.O. Box 429

Nebraska City, NE 68410-0429

Attention:  Jon Wilson

Fax:  402.873.3388

 

 

  

15

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

with a copy to:                     Yost, Schafersman, Lamme, Hillis, Mitchell & Schulz, P.C. (“Lead Lender’s Counsel”)

81 West 5th Street

Fremont, NE 68025

Attention:  David C. Mitchell

Phone:  402.721.6160

Fax:  402.721.6198

or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other parties.

 

Section 16.   Severability.  If any section, paragraph or provision of this Agreement shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Agreement.

 

Section 17.   Binding Effect.  This Agreement shall inure to the benefit of and shall be binding upon the Borrower and the Lead Lender and their respective successors and assigns.

 

 

Section 18.   This Agreement Governs.  In the event of a conflict of any provision or term of this Agreement with any term or provision of the Borrower’s Note, the terms and provisions of this Agreement shall govern.

 

Section 19.   Amendments.  Except as otherwise provided in this Agreement, this Agreement may not be effectively amended, changed, modified, altered or terminated by the Borrower or the Lead Lender except in writing executed by both such parties.

 

Section 20   Counterparts.  This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

 

Section 21.   Governing Law.  This Agreement shall be governed by the laws of the state of Nebraska.

 

Section 22   Credit Agreement Notice.  A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT THE BORROWER AND THE LEAD LENDER FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OF EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

 

 [remainder of page intentionally left blank; signature page follows]

 

  

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CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

IN WITNESS WHEREOF, Lead Lender and the Borrower have caused this Agreement to be executed as of the date first above written.

 

ARBOR BANK,

as Lead Lender

By: /s/ Jon R. Wilson

Name: Jon R. Wilson

 

Its: Omaha President

 

 

NEDAK ETHANOL, LLC,

a Nebraska limited liability company

as Borrower

 

By: /s/ Jerome Fagerland

Name:  Jerome Fagerland

 

Its:  President and General Manager

 

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

  

Schedule 1

List of Participants

	
#

	
Institution

	
Type of Institution

	
Contact Name

	
Phone

	
E-mail

	
FAX

	
Mailing Address

	
City/State

	
1

	
Henderson State Bank

	
State/Commercial Bank

	
Kevin Positer

	
(402) 723-4441

	
kpositer@hendersonstatebank.net

	
(402) 723-4401

	
P.O. Box 805, 1040 North Main Street

	
Henderson, NE

	
2

	
Northwoods State Bank

	
Federal Reserve Non-Member

	
Aaron Carmen

	
(641) 324-1023

	
aaroncamen@nsbbank.com

andyjulseth@nsbbank.com

	
(641) 324-1030

	
900 Central Avenue

	
Northwood, IA

	
3

	
Five Points Bank of Hastings

	
Federal Reserve Member

	
Terry Anstine

	
(402) 462-2228

	
1city@spointsbank.com

BeckyK@Spointsbank.com

GeorgeH@Spointsbank.com

	
(402) 462-9540

	
2815 Osborne Drive West

	
Hastings, NE

	
4

	
The Tri-County Bank

	
State/Commercial Bank

	
Jon Schmederer

	
(402) 924-3881

	
schmederer@thetricountybank.com

	
(402) 924-3799

	
108 North Main Street

	
Stuart, NE

	
5

	
Arbor Banking Group

	  	
Jon Wilson

	
(402) 933-7632

	
jwilson@arborbankinggroup.com

	
(402) 934-1419

	
2323 South 17th Street Suite 106

	
Omaha, NE

	
6

	
Farmers and Merchants Savings Bank

	
Federal Reserve Non-Member

	
Donn S. Lyons

	
(563) 568-3417

	
dlyons@fmember.com

	
(563) 568-8225

	
P.O. Box 9, 201 W. Main

	
Waukon, IA

	
7

	
First Federal Bank

	
Savings Association

	
Scott Sehnert

	
(712) 277-0200

	
ssehnert@irsfederalbank.com

	
(712) 277-0340

	
329 Pierce Street, PO Box 887

	
Sioux City, IA

 

 

  

S-1

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

Exhibit A

 

 

Qualified Project Costs

 

	
Item

	
Total Cost

	
Paid to Date

	  
	
Acquisition Costs

	  	  	  	  
	
Purchase Land - Waller

	
$181.065

	
$181.065

	
The Weller Foundation

	
211 S Main, Atkinson, NE,  68713

	
Purchase of Road

	
$9.975

	
$9.975

	
Don and Nancy Hood

	
87537 Hillcrst Road, Atkinson, NE 68713

	
Purchase Land – Waller

	
$10,300

	
$10,300

	
The Weller Foundation

	
211 S Main, Atkinson, NE 68713

	
Laetsch Property

	
$5,250

	
$5,250

	
Aurora Loan Services

	
PO Box 1706, Scottsbluff, NE 69363

	  	  	  	  	  
	  	  	  	  	  
	
Site Work and Site Prep

	  	  	  	  
	
Osborne Actual Site Work

	
$876,180

	
$876,180

	
Osborne Construction Inc

	
47658 Pearl St. Atkinson, NE 68713

	
Osborne Road Work

	
$43,767

	
$43,767

	
Osborne Construction Inc

	
47658 Pearl St. Atkinson, NE 68713

	
Surveying – Road

	
$13,152

	
$13,152

	
Gilmore Associates

	
2670 33rd Ave. Columbus, NE 68602

	
Surveying – Site

	
$27,201

	
$27,201

	
Gilmore Associates

	
2670 33rd Ave. Columbus, NE 68602

	
Seeding

	
$750

	
$750

	
Gross Seed Company

	
HC 66 Box 13, Johnsontown, NE 69214

	
Holt Co Dept of Roads – Access Fee

	
$500

	
$500

	
Holt Co of Dept of Roads

	
88095 504th Ave. O’Neil, NE 68763

	
Building Permit

	
$40

	
$40

	
City of Atkinson

	
PO Box 519, Atkinson, NE 68713

	
Ordinance Filing Fees

	
$43

	
$43

	
City of Atkinson

	
PO Box 519, Atkinson, NE 68713

	
Site Cleaning

	
$2,067

	
$2,067

	
Tim Peterson Farms

	
88648 469th Ave., Stuart, NE 68780

	
Culverts

	
$858

	
$858

	
B’s Enterprises

	
Box 889, Norfolk, NE 68702

	  	  	  	  	  
	  	  	  	  	  
	
Utility Extension

	  	  	  	  
	
KM Pipeline

	
$938,556

	
$938,556

	
Kinger Morgan

	
PO Box 281304, Lakewood, CO 80228

	
2 Walls

	
$65,000

	
$11,508

	
Schrunk Well Service

	
48056 877 Rd. Atkinson, ME 68713

	  	  	
$6,315

	
Geotech Services

	
PO Box 843314, Kansas City, MO 64184

	
Sewer Lines

	
$300,000

	
$270,000

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	
Fire Loop

	
$259,418

	
$233,477

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	
Fire Water tank and Sprinkler

	
$919,919

	
$818,928

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	
NPPD – Aid in Construction

	
$8,565

	
$8,565

	
NPPD

	
PO Box 120, O’Neill, NE 68763

	
Agland – Trenching for power

	
$3,581

	
$3,581

	
Agland Electric

	
PO Box 788, Atkinson, NE 68713

	
Well Permits

	
$50

	
$50

	
City of Atkinson

	
PO Box 519, Atkinson, NE 68713

	  	  	  	  	  
	  	  	  	  	  
	
Construction of Roadways and Rail Service Lines

	  
	
Roads around site

	
$1,233,259

	
$0

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	  	  	  	  	  
	  	  	  	  	  
	
Pollution Control Equipment

	  	  	  
	
Scrubber

	
$100,000

	
$90,000

	  	  
	  	  	  	  	  
	  	  	  	  	  
	
Other

	  	  	  	  
	
Preparation of Re=Development Plan

	
$174,732

	
$174,732

	
(Pd at Closing)

	  
	
Designing and Engineering

	
$1,300,000

	
$1,170,000

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	
Air Permit

	
$58,049

	
$58,049

	
HDR

	
8404 Indian Hills Drive, Omaha, NE 68114

	
Air Permit Application

	
$1,500

	
$1,500

	
NDEQ

	
Lincoln, NE

	
Discharge permit

	
$24,525

	
$24,525

	
HDR

	
8404 Indian Hills Drive, Omaha, NE 68114

	
Soil Sampling

	
$22,245

	
$22,245

	
Midstate Construction Testing

	
106 E Wilson Ave, Norfolk, NE 68701

 

 

 

 

  

A-1

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

	
Septic Design

	
$5,000

	
$5,000

	
Gilmore Associates

	
2670 33rd Ave, Columbus, NE 68602

	
Delta-T Design and License

	
$1,800,000

	
$1,800,000

	
Delta T Corporation

	
323 Alexander Lee Parkway, Williamsburg, VA 23185

	
Appraisal

	
$14,000

	
$14,000

	
Natwick Appraisal Services

	
1205 4th Avenue South, Fargo, ND 58103

	  	  	  	  	  
	  	  	  	  	  
	
Totals

	
$8,399,546

	
$6,622,180

	  	  

 

  

A-2

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

Exhibit B

 

 

Resolutions of Borrower

 

CONSENT MINUTES IN LIEU OF SPECIAL MEETING OF BOARD OF DIRECTORS

 

OF

 

NEDAK ETHANOL, LLC

 

The undersigned, being all the directors of NEDAK Ethanol, LLC, a Nebraska limited liability company, hereinafter referred to as the “Company,” hereby consent to the adoption hereof and do hereby adopt the following resolutions and declare them to be in full force and effect as if adopted at a regular or special meeting of the directors of the Company:

 

RESOLVED, that the Company shall enter into the Redevelopment Agreement, the Loan Agreement, the Security Agreement, and the Note (collectively the “TIF Documents”) in substantially the form attached hereto under which the Company shall obtain tax-increment financing in the an amount of $6,864,000 or in such similar amount as the officers noted below determine is appropriate through negotiations provided such terms are generally in accordance with the documents attached hereto;

 

RESOLVED FURTHER, that, to secure the obligations of the Company under the Loan Agreement, the Company shall grant to the Lender (as defined therein), a security interest in certain assets of the Company; and, in connection therewith, the Company shall enter into one or more security agreements and pledge agreements reflecting the foregoing grant (collectively, the “Security Documents”);

 

RESOLVED FURTHER, that Jerome Fagerland, Everett Vogel and Dick Bilstein as officers of the Company, or any one of them acting alone or in concert with each other, be and they hereby are authorized and empowered in the name of and on behalf of the Company to negotiate, execute and deliver the TIF Documents and all other instruments, agreements, certificates and other documents as may be required in connection therewith, including any amendments, restatements, supplements or modifications of the foregoing, all on such terms as may be approved by the officer(s) executing such documents, the execution and delivery of the same by any of said officers to be conclusive evidence that the same was approved and authorized hereby;

 

RESOLVED FURTHER, that each said officer is authorized and empowered to do or cause to be done all such acts or things and to sign and deliver, or cause to be signed and delivered, all such documents, instruments and certificates in the name and on behalf of the Company or otherwise, as any of one or more of said officers, in his/their discretion, 

 

 

 

  

B-1

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

 

       

 

	 	 may deem necessary, advisable or appropriate to effectuate or carry out the purposes and intent of the foregoing resolutions and to perform the obligations of the Company under all instruments and agreements executed on behalf of the Company in connection therewith	 

 

RESOLVED FURTHER, that the execution by any said officer of any document authorized by the foregoing resolutions, or any document executed in the accomplishment of any action or actions so authorized, is (or shall become upon delivery) the enforceable and binding act and obligation of the Company, without the necessity of the signature or attestation of any other officer of the Company or the affixing of the corporate seal;

 

RESOLVED FURTHER, that all acts and transactions undertaken or agreements executed and delivered by any said officer in connection with the foregoing matters are hereby ratified, confirmed and adopted by the Company; and

 

RESOLVED FURTHER, that any said officer of the Company is hereby authorized and directed to certify these resolutions.

 

This consent may be executed in counterparts and the counterparts taken together shall constitute the whole.

 

	
Dated effective: June _____, 2007

	 	  
	  	 	  
	  	 	  
	  	 	  
	  	 	  
	  	 	  
	  	 	  
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	  	 	  

 

  

B-2

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

Exhibit C

Form of Borrower’s Note

 

$6,864,000.00 June 19, 2007

 

FOR VALUE RECEIVED, NEDAK ETHANOL, LLC (the “Borrower”),  a Nebraska limited liability company, with an address at 87590 Hillcrest Road – P.O. Box 391, Atkinson, Nebraska 68713, promises to pay to the order of ARBOR BANK, a Nebraska banking corporation (“Lead Lender”), and having an office at 911 Central Avenue, Nebraska City, Nebraska 68410-0429, the principal sum of SIX MILLION EIGHT HUNDRED SIXTY-FOUR THOUSAND and No/100 Dollars ($6,864,000.00), under this Note from the date of its disbursement until such principal sum shall be fully paid.  Interest and principal shall be payable in installments as set forth in Section 3 below.  The total principal sum, or the amount thereof outstanding, together with any accrued but unpaid interest, shall be due and payable in full on December 1, 2021 (the “Maturity Date”).

Section 1.     Loan Agreement.  This Note is issued pursuant to the terms, provisions and conditions of that certain Loan Agreement (as amended, the “Loan Agreement”) dated as of even date, between the Borrower and Lead Lender, and evidences the loan (the “Loan”) made pursuant thereto.  Capitalized terms used herein which are not otherwise specifically defined shall have the same meaning herein as in the Loan Agreement.

Section 2.    Interest Rate.  All principal amounts outstanding under this Note shall bear interest at the then-applicable Interest Rate.

Section 3.    Payment of Interest and Principal.

(a)           Payment and Calculation of Interest.  Subject to the provision of Section 5(b) of this Note dealing with payments falling due on dates that are not “Business Days,” all interest shall be: (a) payable commencing on December 1, 2007 and on June 1 and December 1 for each year thereafter (each a “Loan Payment Date”) until the principal together with all interest and other charges payable with respect to the Loan shall be fully paid; and (b) calculated on the basis of a 360-day year and the actual number of days elapsed and by the provisions set forth in Section 4 of the Loan Agreement.  Interest at the then-applicable Interest Rate shall be computed from and including the first day of the applicable Interest Period (hereinafter defined), up to and including the last day thereof.  Proceeds from this Note in the amount of $870,850.00 (the “Capitalized Interest Amount” as further defined in Section 9 of the Loan Agreement) shall be retained by Lead Lender to pay for interest on the Loan due in 2008 and 2009, pursuant to the Loan Agreement.  Interest shall be paid in accordance with Schedule 1 attached hereto.

(b)           Interest Rate.  The “Interest Rate” commencing on the date of the closing of the Loan shall be nine and one-half percent (9.50%) simple interest.  The Interest Rate shall reset on June 1, 2012 (“First Reset Date”) and June 1, 2017 (“Second Reset Date”).  The interest rate on the First Reset Date shall be equal to the 5-year U.S. Treasury Constant Maturity

 

  

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Index (average for the prior month) plus 475 basis points for the applicable five-year period.  The interest rate on the Second Reset Date shall be equal to the 5-year U.S. Treasury Constant Maturity Index (average for the prior month) plus 475 basis points for the remainder of the term of the Loan.

(c)           “Interest Period” shall mean, in the case of the first Interest Period, the period commencing on the closing of the Loan and ending on the last day before the first Loan Payment Date; or, thereafter, the period commencing on each Loan Payment Date and ending on the last day before the next successive Loan Payment Date until the Maturity Date.

(d)           Principal Repayment.  Principal shall be paid in accordance with the Schedule 1 attached hereto.

(e)           Excess Cash Flow. All payments paid by City of Atkinson, Nebraska under the Series A Note and all other payments or distributions of Pledged Revenues shall be paid to the Lead Lender. Any payment received under the Series A Note in excess of the scheduled payment under this Note shall be used to prepay principal hereunder, without any prepayment penalty to Borrower, in accordance with Section 7(d) of the Loan Agreement.

(f)           Payment upon Maturity Date.  The entire remaining principal balance and any unpaid interest or other amount due and owing shall be due and payable in full upon the Maturity Date.

(g)           Prepayment.  Except as expressly provided herein or in the Loan Agreement, this Note may not be prepaid in whole or in part prior to June 1, 2009, except for mandatory prepayments as set forth herein or in the Loan Agreement. As of June 1, 2009, this Note may be prepaid, in whole part, without penalty to Borrower, upon five (5) days’ written notice to the holder of this Note, in accordance with Section 7(d) of the Loan Agreement. All prepayments shall include accrued interest through the date of payment.

(h)           Maturity Date.  Upon the Maturity Date of the Loan, all accrued interest, principal and other charges due with respect to the Loan shall be due and payable in full and the principal balance and such other charges, but not unpaid interest, shall continue to bear interest at the Default Rate until so paid.

(i)           Date of Credit.  Payments shall be credited on the Business Day on which immediately available funds are received prior to one o’clock P.M. Central Standard Time; payments received after one o’clock P.M. Central Standard Time shall be credited to the Loan on the next Business Day.

(j)           Billings.  Lead Lender may submit billings reflecting payments due; however, any changes in the interest rate which occur between the date of billing and the due date may be reflected in the billing for a subsequent payment period.  Neither the failure of Lead Lender to submit a billing nor any error in any such billing shall excuse the Borrower from the obligation to make full payment of all payment obligations of the Borrower when due.

 

  

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(k)           Default Rate.  The Borrower shall pay upon billing therefor, an interest rate (“Default Rate”) which is four percent (4%) per annum above the Interest Rate: (a) following Borrower’s failure to make a required payment, for that period between the due date and the date of payment, (b) following any Event of Default, unless and until the Event of Default is expressly and specifically waived in writing by Lead Lender or (c) after the Maturity Date.

(l)           Late Charges.  The Borrower shall pay, upon billing therefor, a “Late Charge” equal to five percent (5%) of the amount of any payment of principal (other than principal due on the Maturity Date of the Loan), interest, or both, which is not paid in full within ten (10) days of the due date thereof.  Late charges (a) are payable in addition to, and not in limitation of, the Default Rate, (b) are intended to compensate the Lead Lender for administrative and processing costs incident to late payments, (c) are not interest and (d) shall not be subject to refund or rebate or credited against any other amount due.

Section 4.    Debt Service Coverage Event.

(a)            The Borrower hereby agrees to establish and maintain, so long as the Loan remains unpaid, a debt service reserve account with the Lead Lender (the “Debt Service Reserve Fund”) in an amount equal to the ten percent (10%) of the original stated principal amount of the Loan, which amount shall be deposited to the Debt Service Reserve Fund by the Lead Lender on behalf of the Borrower from the Loan Proceeds upon the closing of the Loan (the “Debt Service Reserve Fund Requirement”).

(b)           The “Debt Service Coverage Ratio” shall mean the ratio of the quotient obtained by dividing (a) the amount of available Pledged Tax Increment Revenues plus interest earned on the actual funds held by the Lead Lender in the Debt Service Reserve Fund to scheduled Debt Service by (b) interest and principal due and payable to Lead Lender during the applicable Loan Payment Date to 1.00.  Commencing on June 1, 2009, and at all times thereafter for the term of the Series A Note, the Debt Service Coverage Ratio shall equal or exceed 1.20 to 1.00.

(c)           If the Lead Lender determines in its sole and reasonable discretion that the Debt Service Coverage Ratio will not be achieved on any Loan Payment Date, the Lead Lender may direct the Borrower to prepay principal in such amount as reasonably determined by Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

(d)           If, upon direction from the Lead Lender, the Borrower does not make payment as described in Subparagraph (c) above, the Lead Lender may utilize funds from the Debt Service Reserve Fund to prepay principal in such amount as reasonably determined by Lead Lender so that the Debt Service Coverage Ratio shall thereafter be satisfied.

(e)           If, after utilizing the Debt Service Reserve Fund to achieve the Debt Service Coverage Ratio or make payment under the Loan, the Lead Lender determines that that Debt Service Reserve Fund Requirement is less than ten percent (10%) of the original principal amount of the Loan, the Lead Lender shall notify the Borrower in writing of such

 

  

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deficiency. Upon written notice from Lead Lender, Borrower will replenish the Debt Service Reserve Fund to an amount equal to ten percent (10%) of the original principal amount of the Loan, being Six Hundred Eighty-Six Thousand Four Hundred and no/100 Dollars ($686,400.00).

(f)           In addition, Lead Lender may use the amounts in the Debt Service Reserve Fund to make loan repayments falling due on each Loan Payment Date to the extent that the payment made by the Issuer under the Issuer’s Series A Note on any such Loan Repayment Date is insufficient to pay the amounts due on such Loan Payment Date, after the application of any amounts on deposit in the Capitalized Interest Fund available to pay interest on such Loan Payment Date.

(g)           The Debt Service Reserve Fund shall be maintained as an interest bearing account or certificate of deposit with the Lead Lender.  All interest earnings shall be retained in the Debt Service Reserve Fund.  On each Loan Payment Date, if there exists an excess above the Reserve Requirement in the Debt Service Reserve Fund and no withdrawal is required to pay principal of, and interest on, the Loan then due, the Lead Lender shall apply such excess to the prepayment of the principal amount on the Loan.  The Debt Service Reserve Fund shall be valued at the amount actually on deposit and currently available to withdraw (excluding accrued but unpaid interest earnings) for the purposes of determining a deficiency.

Section 5.    Definitions.

(a)           “Banking Day” means a day on which banks are not required or authorized by law to close in Nebraska.

(b)           “Business Day” means any Banking Day.  If any day on which a payment is due is not a Business Day, then the payment shall be due on the next day following which is a Business Day.

(c)           “Debt Service Coverage Ratio” for the purposes of this Note and the Loan Agreement, means 1.20 to 1.00.

(d)           “Dollars” or “$” means lawful money of the United States.

(e)           “Interest Rate” means the interest rate for applicable Interest Period, in an amount not to exceed nine and one-half percent (9.5%).

(f)           “Series A Note” means the Tax Increment Revenue Note, Taxable Series 2007A (NEDAK Ethanol, LLC Plant Project), issued by the City of Atkinson, Nebraska and dated the date of issuance and delivery thereof, in the original principal amount of not less than Six Million Eight Hundred Sixty-Four Thousand Dollars ($6,864,000.00).

Section 6.    Acceleration Due to an Event of Default.  At the option of the holder, this Note and the indebtedness evidenced hereby shall become immediately due and payable without further notice or demand, and notwithstanding any prior waiver of any breach or default, or other indulgence, upon the occurrence at any time and during the continuance of any one or more of

 

  

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the following events, each of which shall be an “Event of Default” hereunder and under the Loan Agreement and each other Loan Document: (i) default continuing uncured beyond the applicable notice and grace period, if any, set forth herein or in the Loan Agreement, in making any payment of interest, principal, other charges or payments due hereunder; (ii) an Event of Default as defined in or as set forth in the Loan Agreement or any other Loan Document, each as the same may from time to time hereafter be amended; or (iii) an event which pursuant to any express provision of the Loan Agreement, or of any other Loan Document, gives Lead Lender the right to accelerate the Loan.

Section 7.    Certain Waivers, Consents and Agreements.  Each and every party liable hereon or for the indebtedness evidenced hereby whether as maker, (i) agrees to any substitution, exchange, release, surrender or other delivery of any security or collateral now or hereafter held hereunder or in connection with the Loan Agreement, or any of the other Loan Documents, and to the addition or release of any other party or person primarily or secondarily liable; (ii) agrees that if any security or collateral given to secure this Note or the indebtedness evidenced hereby or to secure any of the obligations set forth or referred to in the Loan Agreement, or any of the other Loan Documents, shall be found to be unenforceable in full or to any extent, or if Lead Lender or any other party shall fail to duly perfect or protect such collateral, the same shall not relieve or release any party liable hereon or thereon nor vitiate any other security or collateral given for any obligations evidenced hereby or thereby; (iii) agrees to pay all reasonable costs and expenses incurred by Lead Lender or any other holder of this Note in connection with the indebtedness evidenced hereby, including, without limitation, all reasonable attorneys’ fees and costs for (a) the administration and implementation of the Loan, (b) the syndication and/or participation of the Loan, (c) the collection of the indebtedness evidenced hereby and (d) for the enforcement of rights and remedies hereunder or under the other Loan Documents, whether or not suit is instituted; and (iv) consents to all of the terms and conditions contained in this Note, the Loan Agreement, and all other instruments now or hereafter executed evidencing or governing all or any portion of the security or collateral for this Note and for such Loan Agreement, or any one or more of the other Loan Documents.

Section 8.    Delay Not A Bar.  No delay or omission on the part of the holder of this Note in exercising any right hereunder or any right under any instrument or agreement now or hereafter executed in connection herewith, or any agreement or instrument which is given or may be given to secure the indebtedness evidenced hereby or by the Loan Agreement, or any other agreement now or hereafter executed in connection herewith or therewith shall operate as a waiver of any such right or of any other right of such holder, except as expressly set forth therein, nor shall any delay, omission or waiver on any one occasion be deemed to be a bar to or waiver of the same or of any other right on any future occasion.

Section 9.    Partial Invalidity.  The invalidity or unenforceability of any provision hereof, of the Loan Agreement, of the other Loan Documents, or of any other instrument, agreement or document now or hereafter executed in connection with the Loan made pursuant hereto and thereto shall not impair or vitiate any other provision of any of such instruments, agreements and documents, all of which provisions shall be enforceable to the fullest extent now or hereafter permitted by law.

 

  

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Section 10.    Use of Proceeds.  All proceeds of the Loan shall be used solely for the purposes more particularly provided for and limited by the Loan Agreement.

Section 11.    Notices.  Any notices given with respect to this Note shall be given in the manner provided for in the Loan Agreement.

Section 12.    Governing Law. It is understood and agreed that all of the Loan Documents were negotiated, executed and delivered in the State of Nebraska, which State the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by the Loan Documents.  This Note and each of the other Loan Documents shall in all respects be governed, construed, applied and enforced in accordance with the internal laws of the State of Nebraska without regard to principles of conflicts of law.

Section 13.    Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 14.    No Oral Change.  This Note and the other Loan Documents may only be amended, terminated, extended or otherwise modified by a writing signed by the party against which enforcement is sought.  In no event shall any oral agreements, promises, actions, inactions, knowledge, course of conduct, course of dealing, or the like be effective to amend, terminate, extend or otherwise modify this Note or any of the other Loan Documents.

Section 15.    Rights of the Holder.  This Note and the rights and remedies provided for herein may be enforced by Lead Lender or any subsequent holder hereof.  Wherever the context permits each reference to the term “holder” herein shall mean and refer to Lead Lender or the then subsequent holder of this Note.

Section 16.    Right to Pledge to Federal Reserve.  Lead Lender may at any time pledge or assign all or any portion of its rights under the Loan Documents including any portion of this Note to any of the twelve (12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341.  No such pledge or assignment or enforcement thereof shall release Lead Lender from its obligations under any of the Loan Documents.

Section 17.    General Rights of Assignment and Participation.  In accordance with and subject to the terms and conditions of the Loan Agreement, Lead Lender shall have the unrestricted right at any time or from time to time, and without Borrower’s or any other person’s

 

  

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consent, to assign all or any portion of its rights and obligations hereunder and to grant participating interests in the obligations of Lead Lender.

Section 18.    Replacement Note.  Upon receipt of an affidavit of an officer of Lead Lender as to the loss, theft, destruction or mutilation of the Note or any other security document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon cancellation of the Note or other security document, the Borrower will issue, in lieu thereof, a replacement note or other security document in the same principal amount thereof and otherwise of like tenor.

[Signatures appear on following page]

 

  

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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the date and year set forth above as a sealed instrument at Omaha, Nebraska.

 

WITNESS:                                                                                BORROWER:

 

                                                             

             NEDAK ETHANOL, LLC,

        a Nebraska limited liability company

	
  

	
By:

	
                                                             

	
  

	
Name:  ________________________

	
  

	
Title:    ________________________

	
  

	
Hereunto duly authorized

 

  

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Exhibit D

Form of Security Agreement

 

SECURITY AGREEMENT

This Security Agreement dated as of the 19th day of June, 2007 (this “Security Agreement”), by and between NEDAK Ethanol, LLC, a Nebraska limited liability company, having an address of 87590 Hillcrest Road – P.O. Box 391, Atkinson, Nebraska 68713 (“Pledgor”) and Arbor Bank, a Nebraska banking corporation (“Pledgee”).

RECITALS:

WHEREAS, Pledgee made a loan to Pledgor in the original principal amount of $6,864,000.00 (the “Loan”), pursuant to that certain Loan Agreement of even date herewith by and between Pledgee and Pledgor (the “Loan Agreement”); and

WHEREAS, the Loan will be disbursed to Pledgor in one or more advances and is evidenced by that certain Promissory Note dated of even date herewith from Pledgor to Pledgee (“Note”); and

WHEREAS, in order to induce Pledgee to make the Loan, Pledgor is willing to enter into this Security Agreement and grant Pledgee a security interest in the Series A Note and the Pledged Revenues (as hereinafter defined).

AGREEMENT

NOW THEREFORE, in consideration of the foregoing, and in order to induce Pledgee to make the Loan and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Pledgor does hereby agree with Pledgee, as follows:

1.           Definitions.

 

“Capitalized Interest Fund” shall have the meaning given that term in the Loan Agreement.

 

“Chief Executive Office State” shall mean the State in which the Chief Executive Offices of Pledgor are located.

 

“Code” shall mean the Uniform Commercial Code, as enacted in the State of Nebraska, as amended.

 

“Collateral State” shall mean any State in which Collateral is issued and/or held.

 

“Debt Service Reserve Fund” shall have the meaning given that term in the Loan Agreement.

 

 

  

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“Financing Statement” shall have the meaning given that term under the Code.

 

“Insurance Proceeds” shall mean all the proceeds of any insurance policies of Pledgor.

 

“Interest” shall have the meaning set forth in the Loan Agreement.

 

“Issuer” shall mean The City of Atkinson, Nebraska, as issuer of the Series A Note.

 

 “Loan Documents” shall mean the Loan Agreement and any and all ancillary documents necessary to consummate the transactions contemplated thereby.

 

“Obligations” shall mean (a) the aggregate unpaid principal amount of, and accrued Interest on, the Note; (b) all other fees and other amounts owing by Pledgor to Pledgee under the Note; and (c) each and all of the representations, warranties, covenants, obligations, liabilities, indemnities and duties of Pledgor under the Loan Documents.

 

“Pledged Revenues” shall mean all revenues pledged by Issuer pursuant to the Series A Note, which includes Pledged Tax Increment Revenues, PILOT Payments and Liquidated Damages Amount, as such terms are defined in the Loan Agreement.

 

“Pledgor State” shall mean any State in which Pledgor is authorized or licensed to conduct business.

 

“Series A Note” shall mean the Issuer’s Tax Increment Revenue Note, Taxable Series 2007A (NEDAK Ethanol, LLC Plant Project), dated the date of issuance and delivery thereof, in the original principal amount of Six Million Eight Hundred Sixty-Four Thousand Dollars ($6,864,000.00) with a debt service coverage ratio of 1.20 to 1.00, and an initial interest rate of 9.5%, and a maturity date on or before December 1, 2021.

 

“Senior Lender” shall mean Farm Credit Services of Grand Forks, FCLA, along with its lending syndicate, or any successor lender under the Senior Credit Facility.

 

“Senior Credit Facility” shall mean that certain Master Credit Agreement between Borrower and Senior Lender dated as of February 14, 2007.

 

2.           Grant of Security Interest.  As security for the full payment and performance of the Obligations when due, Pledgor hereby grants, assigns and pledges, a continuing lien on and security interest in, and, as a part of such grant, assignment and pledge, hereby transfers and assigns to Pledgee as security, all of the following (the “Collateral”) whether now owned or hereafter acquired:  (i) the Series A Note and all of Pledgor’s right, title and interest in and to the Series A Note; (ii) all Insurance Proceeds, subject, however, to the right of Senior Lender pursuant to the Senior Credit Facility; (iii) all of Pledgor’s interest in all distributions to which Pledgor shall at any time be entitled in respect of the Series A Note; (iv) all of Pledgor’s right, title and interest in and to the Pledged Revenues; (v) the Capitalized Interest Fund; (vi) the Debt Service Reserve Fund; and (vii) to the extent not otherwise included, all proceeds of any or all of the foregoing.

3.           Perfection of Security Interests.

 

 

  

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(a)           Pledgor authorizes Pledgee to file a Financing Statement describing the Collateral.

 

(b)           Pledgee shall receive, prior to the Closing of the Loan, an official report from the Secretary of State of each Collateral State, Chief Executive Office State and the Pledgor State indicating that Pledgee’s interest is prior to all other security interest or other interests reflected in the report.

 

4.           Perfection by Possession.  Pledgor shall have possession of the Series A Note.

 

5.           Representations, Warranties and Covenants.  Pledgor hereby covenants with, and represents and warrants to, Pledgee as follows:

 

(a)           Pledgor will defend Pledgee’s right, title and interest in and to the Collateral pledged by Pledgor pursuant hereto or in which it has granted a security interest pursuant hereto against the claims and demands of all other persons.

 

(b)           Pledgor is the legal beneficiary of the Series A Note in which it has granted a security interest pursuant hereto, free and clear of all claims or security interests of every nature whatsoever, except such as are created pursuant to this Security Agreement, and has the unqualified right to pledge and grant a security interest in the same as herein provided without the consent of any other person other than any such consent that has been obtained.

 

(c)           The Series A Note have been validly acquired by Pledgor and are duly and validly pledged hereunder.  All consents and approvals required for the execution and delivery of this Security Agreement and the consummation of the transactions contemplated by this Security Agreement have been obtained.

 

6.           Application of Collateral.  All proceeds of any Collateral now or at any time hereafter received or retained by Pledgee pursuant to the provisions of this Security Agreement (including, without limitation, any proceeds from the sale of all or any portion of the Series A Note, including all Pledged Revenues, and all distributions received by Pledgee in respect of the Series A Note, including the Pledged Revenues) shall be applied by Pledgee to the Obligations.

 

7.           Remedies.  If an Event of Default shall occur and then be continuing:

 

(a)           Pledgee may exercise all of the rights and remedies of a secured party under the Code.

 

(b)           Pledgee shall also have the right to, at any time and from time to time, (i) cause any or all of the Series A Note to be registered in or transferred into the name of Pledgee or into the name of a nominee or nominees, or designee or designees, of Pledgee; and/or (ii) sell, resell, assign and deliver, in its sole discretion, any or all of the Series A Note or any other collateral security for the Obligations and all right, title and interest, claim and demand therein and right of redemption thereof, at public or private sale, for cash, upon credit or for future delivery, and in connection therewith Pledgee may grant options and may impose reasonable conditions such as requiring any purchaser to represent that any “securities” constituting any part of the collateral are being purchased for investment only, Pledgor hereby waiving and releasing 

 

  

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any and all equity or right of redemption.  If all or any of the Series A Note is sold by Pledgee upon credit or for future delivery, Pledgee shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, Pledgee may resell such collateral.

 

(c)           Pledgee may exercise, either by itself or by its nominee or designee, in the name of Pledgor, all of the rights, powers and remedies granted to Pledgee in Section 2 hereof in respect of the Series A Note and may exercise and enforce all of Pledgee’s rights and remedies hereunder and under law.

 

8.           Events of Default.  An “Event of Default” shall mean each or any of the following:

 

(a)           if Pledgor fails to pay any payment of principal due under the Note or the Loan Agreement, together with all accrued and unpaid Interest, if any, which is due under the Note, or declared due and payable whether at maturity or by acceleration; or

 

(b)           if any Event of Default under the Note has occurred or is occurring; or

 

(c)           if any Event of Default under the Loan Documents has occurred or is occurring; or

 

(d)           if any Event of Default under this Security Agreement has occurred or is occurring.

 

9.           Waivers; Modifications.  None of the terms and conditions of this Security Agreement may be discharged, changed, waived, modified or varied in any manner unless in a writing duly signed by the parties hereto.

 

10.           Remedies Cumulative.  All rights and remedies afforded to Pledgee by reason of this Security Agreement are separate and cumulative remedies, and shall be in addition to all other rights and remedies in favor of Pledgee existing at law or in equity or otherwise.  No one of such remedies, whether or not exercised by Pledgee, shall be deemed to exclude, limit, or prejudice the exercises of any other legal or equitable remedy or remedies available to Pledgee.

 

11.           Notices.  Any demand, notice or other communication in connection with this Security Agreement will be deemed to be made, given and received:

 

(a)           if mailed by prepaid registered mail addressed as set forth below, on the day following the day on which it was mailed, during a period of uninterrupted mail service, whether or not the same be returned undelivered;

 

(b)           if delivered or sent by prepaid courier service to the address set forth below, or personally served upon any director, officer, servant, employee or partner of the Pledgor or Pledgee, at the time of such delivery or service; or

 

(c)           if sent prepaid by telefax or other similar means of electronic communication, to the number set forth below or where the Pledgor or Pledgee has such facilities 

 

  

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to receive such communication, provided that a copy thereof is sent on the same day by prepaid mail, at the time of such sending.

 

Until further notice, notices under this Security Agreement shall be addressed as follows:

 

If to Pledgee:

 

Arbor Bank

911 Central Ave.

P.O. Box 429

Nebraska City, NE 68410-0429

Attention:  Jon Wilson

Fax:  402.873.3388

 

If to Pledgor:

 

NEDAK Ethanol, LLC

87590 Hillcrest Road – P.O. Box 391

Atkinson, NE 68713

Attention:  Jerome Fagerland, President and General Manager

Phone:  402.925.5570

Fax:  402.336.2478

 

12.           Binding Effect and Assignments.  This Security Agreement shall be binding upon and inure to the benefit of Pledgor and its successors and assigns.  This Security Agreement shall be binding upon and shall inure to the benefit of Pledgee and its successors and assigns.

 

13.           Severability.  In case any one or more of the provisions contained in this Security Agreement shall be found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and this Security Agreement shall continue in full force and effect in accordance with its remaining terms.

 

14.           Further Assurances.  Pledgor agrees to do such further acts and things and to execute and deliver to Pledgee such additional conveyances, assignments, agreements and instruments as Pledgee from time to time may reasonably require or deem advisable to carry into effect this Security Agreement or to further assure and confirm unto Pledgee its rights, powers and remedies hereunder.

 

15.           Release.  Pledgee agrees to release its security interest in the Series A Note upon satisfaction of all of the following conditions precedent:

 

(a)           that the documents to effect such release be prepared by counsel for Pledgor; and

 

(b)           that (i) the principal amount of the Note evidencing the Loan and the other Obligations, shall have been fully paid and satisfied, and (ii) accrued Interest on the Note 

 

  

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evidencing the Loan and any costs, commitment and other fees, expenses and other sums owing to Pledgee as provided in the Note, shall have been fully paid; and 

 

(c)           that all costs, fees, expenses and other sums paid or incurred by or on behalf of Pledgee in exercising any of its rights, powers, options, privileges and remedies

 

hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, shall have been fully paid.

If the Series A Note is so released, Pledgee, at the request and sole cost and expense of Pledgor made at the time of any such release, will execute and deliver to Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Security Agreement, and will duly assign, transfer and deliver without recourse and without any representation or warranty, express or implied (except that Pledgee shall represent that such release has been and is duly authorized, that all necessary consents to the execution and delivery thereof have been obtained and that it has not assigned or encumbered the Collateral), to Pledgor such of the Series A Note as may be in the possession of Pledgee and as has not theretofore been sold or otherwise applied or released pursuant to this Security Agreement, together with any moneys at the time held by Pledgee hereunder and not applied to the payment of the Obligations.

 

16.           Governing Law.  This Security Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nebraska applicable to contracts entered into and to be performed entirely within such State and without regard to the conflicts or choice of laws or rules of such State.

 

17.           Interpretation.   All grammatical changes in gender, tense and number required to give meaning to any provision herein shall be deemed to be made. References to “this Agreement,” “hereof,” “herein,” “hereto” and like references are to this Security Agreement and not to any particular article, section or other subdivision of this Security Agreement.  The insertion of headings in this Security Agreement is for convenience of reference only and will not affect the construction or interpretation of this Security Agreement.  Unless otherwise specified herein, all statements of or reference to dollar amounts in this Security Agreement will mean lawful money of the United States of America.

 

18.           Counterparts.  This Security Agreement may be executed in one or more counterparts each of which shall be deemed and constitute an original and binding agreement.

 

[signature page follows; remainder of page intentionally left blank]

 

 

 

  

D-6

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreement

  

[signature page to Security Agreement]

IN WITNESS WHEREOF, the parties have duly executed and delivered this Security Agreement as of the day and year first above written.

 

	 	 	PLEDGOR	 

 

	 	 	NEDAK ETHANOL, LLC,	 
	 	 	a Nebraska limited liability company	 
	 	 	as Borrower	 

 

	 	By:	 	 
	 	Name: 	Jerome Fagerland	 
	 	Its: 	President and General Manager	 
	 	 	 	 
	 	 	 	 

 

 

 

	 	 	PLEDGEE	 

 

	 	 	Arbor Bank,	 
	 	 	a Nebraska banking corporation	 

 

	 	By:	 	 
	 	Its: 	 	 

 

 

 

 

 

D-7

CHIDMS1/2522835.12/NEDAK/Oppenheimer Taxable Tax Increment Revenue Loan Agreementexhibit1012_032212.htm

Exhibit 10.12

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into and made effective as of December 31, 2011, by and between NEDAK ETHANOL, LLC, a Nebraska limited liability company (“Borrower”), and ARBOR BANK, a Nebraska banking corporation (“Lead Lender”).

 

RECITALS:

 

WHEREAS, Borrower and Lead Lender previously entered into a Loan Agreement, dated as of June 19, 2007 (as amended by this Amendment, and as may be further amended, restated or otherwise modified from time to time, the “Loan Agreement”);

 

WHEREAS, the indebtedness and obligations under or in connection with the Loan (collectively, the “Obligations”) are secured by the collateral described in the Security Agreement and the agreements, documents and instruments executed in favor of Lead Lender in connection with the Loan (as each may be amended, restated or otherwise modified from time to time, the “Security Documents”) and collectively with the Loan Agreement and all notes, documents, instruments or agreements previously, concurrently or hereafter executed or delivered by Borrower or any other party in favor of Lead Lender in connection with the Loan, the “Loan Documents”);

 

WHEREAS, Borrower is in default under the Loan Documents on account of the occurrence of the Existing Defaults (as defined below);

 

WHEREAS, as a result of the Existing Defaults, Lead Lender is entitled to exercise certain rights and remedies available to Lead Lender under the Loan Documents;

 

WHEREAS, Borrower has requested that Lead Lender waive the Existing Defaults and Lead Lender has agreed to do so, but only upon the terms and conditions set forth herein; and

 

WHEREAS, the parties desire to amend the Loan Agreement as set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.           Definitions.      All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

 

2.           Amendments.  The Loan Documents are hereby amended by adding the following provisions:

 

	 	(a)             All reference in any Loan Documents to the “Loan Agreement” shall mean the Loan Agreement as defined herein.

 

  

  

  

 

	 	(b)            Section 1 of the Loan Agreement is hereby amended by adding the following defined terms:	 
	 	 	 
	 	“Capital Interests” means, with respect to Borrower, all shares, interests, warrants, options, participations or other equivalents (however designated, whether voting or non-voting) of such Borrower’s capital, whether now outstanding or issued or acquired after the date hereof, including common shares, preferred shares, membership interests or units or any other equivalent of such ownership interest.	 
	 	 	 
	 	“Collateral” means all property of Borrower described in that certain Security Agreement, dated as of June 19 2007, executed by the Borrower in favor of the Lead Lender (as may be amended, restated, supplemented or otherwise modified from time to time).	 
	 	 	 
	 	“Debt” means with respect to Borrower, all items of indebtedness or liability, other than trade payables and other liabilities incurred in the ordinary course of business, which in accordance with Generally Accepted Accounting Principles would be included in determining total liabilities as shown on the liabilities side of a balance sheet at the date as of which indebtedness is to be determined with respect to Borrower and includes without limitation: (i) indebtedness or liability for borrowed money; (ii) obligations evidenced by bonds, debentures, notes, or other similar instruments; (iii) obligations for the payment of deferred purchase price of property or services (including trade obligations); (iv) obligations as lessee under capital leases; (v) current liabilities in respect of unfunded vested benefits under plans covered by ERISA; (vi) obligations under letters of credit; (vii) obligations under acceptance facilities; and (viii) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any person or entity, or otherwise to insure a creditor against loss.	 
	 	 	 
	 	
“Distribution” means (i) dividends or other distributions on account of Capital Interests other than Tax Distributions, (ii) redemption, repurchase or acquisition of Capital Interests, or (iii) loans made, directly or indirectly, to any owner of Capital Interests.

	 
	 	 	 
	 	“Tax Escrow Account” shall have the meaning given to that term in Section 9 hereof.	 
	 	 	 
	 	“Tax Distributions” means dividends or distributions made to holders of Borrower’s Class B Preferred Membership Units to satisfy their respective tax liabilities arising by virtue of allocations made to such unit holders pursuant to the Borrower’s then current operating agreement.	 
	 	 	 

 

 

 

 

 

 

  

2

  

 

	 	 	 
	 	“Unsupported Principal” means, as reasonably determined by Lead Lender from time to time, the outstanding principal balance of the Loan minus the net present value, discounted by the applicable Interest Rate on the date of determination, of the estimated collections by Lead Lender on account of Tax Increment Revenues.	 
	 	 	 
	 	(c)           The definition of Senior Credit Facility is hereby amended and restated as follows:	 
	 	 	 
	 	“Senior Credit Facility” means the Amended and Restated Master Credit Agreement dated December 31, 2011 between Borrower and Senior Lender, and the documents, instruments and agreement executed in connection therewith, as may be amended, restated or otherwise modified from time to time. 

 

	 
	 	(d)           Section 4(b) of the Loan Agreement is hereby deleted in its entirety. 

 

	 	
(e)           All reference in any Loan Documents to the “Borrower’s Note”, including without limitation the definition thereof set forth in Section 5 of the Loan Agreement, shall mean and refer to the Amended and Restated Promissory Note in substantially the form of Exhibit “A” attached hereto upon execution of the same by Borrower and Lead Lender.

 

	 

	 	
(f)           Section 7(a) of the Loan Agreement is hereby deleted and replaced with the following:

 

	 
	 	(a)           This Loan is evidenced by the Borrower’s Note.  The principal amount and interest thereon shall be payable by the Borrower on the dates set forth therein.  In order to comply with the terms of the Borrower’s Note and this Agreement, the Borrower hereby agrees to direct Issuer to pay directly to the Lead Lender all Pledged Revenues on account of the Loan.  The Lead Lender and the Borrower agree that all such amounts shall be applied by the Lead Lender as set forth in the Borrower’s Note.	 
	 	 	 
	 	(g)           Section 7(e) of the Loan Agreement is hereby deleted in its entirety.	 
	 	 	 
	 	(h)           Section 8 of the Loan Agreement is hereby deleted in its entirety.	 
	 	 	 
	 	(i)           Section 9 of the Loan Agreement is hereby deleted and replaced with the following:	 
	 	 	 
	 	Section 9. Tax Escrow Account.  Borrower shall establish a non-interest bearing tax escrow account (i) at a financial institution, and (ii) subject to an escrow agreement, both as mutually agreed upon by Senior Lender, Lead Lender and Borrower (the “Tax Escrow Account”), pursuant to which Borrower shall initially deposit the sum of $230,000 in accordance with Section 6(b) of this Amendment and thereafter shall deposit, one-twelfth (1/12) of the amount of real estate taxes and any assessments assessed or to be assessed against Borrower’s Facility 	 

 

 

 

 

 

 

 

  

3

  

 

 

	 	
including the Redevelopment Area for the then current year, as estimated by Lead Lender so as to assure that the balance in the Tax Escrow Account is sufficient to pay such real estate taxes and assessments prior to taxes becoming delinquent.  In the event Lead Lender, in its reasonable discretion, at any time reasonably determines that the amounts deposited for payment of real estate taxes will be insufficient to pay such taxes or assessments, Borrower shall, within fifteen (15) days after written notice from Lead Lender, deposit the difference between the amounts previously deposited and the amount Lead Lender reasonably determines will be necessary to pay such taxes.   Borrower acknowledges that the Tax Escrow Account shall be for the sole purpose of paying real estate taxes and any assessments assessed or to be assessed against Borrower’s Facility including the Redevelopment Area and deposits into the Tax Escrow Account shall be irrevocable.

	 
	 	 	 
	  (j)           New Sections 14(d) – (h)  of the Loan Agreement are hereby added to the Loan Agreement and shall provide as follows:	 
	 	 	 
	 	(d)           Borrower shall fail to pay the real estate taxes or any applicable special assessments on the Redevelopment Area as and when due or Borrower shall fail to fund the Tax Escrow Account;	 
	 	 	 
	 	(e)           Borrower shall admit in writing its inability to pay its debts generally as they become due; file a petition in bankruptcy or petition to take advantage of any insolvency act; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself or of the whole or any substantial part of its property; or file a petition or answer seeking reorganization or arrangement or similar relief under the Bankruptcy Code;	 
	 	 	 
	 	(f)           Borrower shall be adjudged bankrupt; or a court of competent jurisdiction shall enter an order, judgment or decree appointing a receiver, trustee, liquidator or conservator of Borrower or of the whole or any substantial part of its properties, or approve a petition filed against Borrower seeking reorganization or similar relief under the Bankruptcy Code; or if, under the Bankruptcy Code, a court of competent jurisdiction shall assume custody or control of Borrower or of the whole or any substantial part of its properties; or if there is commenced against Borrower any petition or proceeding under the Bankruptcy Code such proceeding or petition remains undismissed for a period of thirty (30) days; or if Borrower by any act indicated its consent to, approval of or acquiescence in any such proceeding or petition; or	 
	 	 	 
	 	 	 

 

  

4

  

 

	 	 	 
	 	 	 
	 	(g)           Default by Borrower under any indenture, mortgage, loan or credit agreement, note, deed of trust, or related agreement or other instrument to which it or any of its properties is a party or by which it is bound, including without limitation, the Senior Credit Facility, or failure by Borrower in the due performance of any covenant contained in any such document; provided, however, only if Senior Lender has taken action with respect to such default and has not agreed to waive or forbear. 

 

	 
	 	 	 
	 	(h)           This Agreement or any security or any other document delivered in connection with this Agreement or the Loan Documents shall at any time for any reason cease to be in full force and effect or shall be declared to be null and void.	 
	 	 	 
	 	(k)           Section 15 of the Loan Agreement is hereby deleted and replaced with the following:	 
	 	 	 
	 	Section 15.  Notices.  All notices provided for herein shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, registered or certified mail, postage prepaid, addressed as follows:	 

 

 

	 	To the Borrower:	 	NEDAK Ethanol, LLC	 	 
	 	 	 	87590 Hillcrest Road – P.O. Box 391	 	 
	 	 	 	Atkinson, NE 68713	 	 
	 	 	 	Attention:  Jerome Fagerland, President and   General Manager	 	 
	 	 	 	Phone:  402.925.5570	 	 
	 	 	 	Fax:  402.336.2478	 	 
	 	 	 	 	 	 
	 	
With a copy to:

	 	Husch Blackwell LLP (“Borrower’s Counsel”)	 	 
	 	 	 	1620 Dodge St., Ste. 2100	 	 
	 	 	 	Omaha, NE 68102	 	 
	 	 	 	Attention:  David L. Bracht	 	 
	 	 	 	Phone: 402.964.5025	 	 
	 	 	 	FAX: 402.964.5050	 	 
	 	 	 	 	 	 
	 	To the Lead Lender:	 	Arbor Bank	 	 
	 	 	 	16820 Frances St, Suite 102	 	 
	 	 	 	Omaha, NE  68130	 	 
	 	 	 	Attention:  Mark Jepson	 	 
	 	 	 	Fax:  402.934.1419	 	 
	 	 	 	 	 	 
	 	with a copy to:	 	Koley Jessen P.C., L.L.O. (“Lead Lender’s Counsel”)	 	 
	 	 	 	One Pacific Place, Suite 800	 	 
	 	 	 	1125 South 103rd Street	 	 

 

 

  

5

  

 

	 	 	 	Omaha, NE 68124	 	 
	 	 	 	Attention:  Michael M. Hupp	 	 
	 	 	 	Fax:  402.390.9005	 	 

 

 

	 	
or addressed to any such party at such other address as such party shall hereafter furnish by notice to the other parties.

	 
	 	 	 
	 	
(l)           A new Section 23 is hereby added to the Loan Agreement and shall provide as follows:

	 	 
	 	Section 23.  Covenants.  The following covenants shall be applicable until the Obligations are indefeasibly paid in full or otherwise fully performed:

 

	 	(a)           The covenants of Borrower set forth in Sections 4.01 (Financial Statements and Other Information), 5.01 (Owner’s Equity Ratio) and 5.02 (Tangible Net Worth) of the Senior Credit Facility (the “Senior Credit Facility Covenants”) are hereby incorporated into this Loan Agreement by reference, mutatis mutandis.  In the event of any conflict between the Senior Credit Facility Covenants and the covenants and agreements of Borrower set forth in the Loan Documents, the covenants and agreements providing the Lead Lender with the broadest rights, or providing the strictest obligations on Borrower, in each case as determined by Lead Lender, shall be controlling.
	 	 
	 	(b)           Borrower shall not create, incur, assume or suffer to exist, contingently or otherwise, any Debt except Debt to Senior Lender under the Senior Credit Facility in accordance with the terms thereof as of the date hereof.
	 	 
	 	(c)           Borrower shall not protest the tax assessed value of the Redevelopment Area for real estate tax purposes so as to reduce the tax assessed value of the Redevelopment Area to an amount less than $30,995,395.

	 	 
	 	(d)           Borrower shall not declare, pay or make any Distributions, other than Tax Distributions, to any owners of any Capital Interests of Borrower or set aside funds for any Distribution, other than for Tax Distributions; provided, however, at such time, and for so long as, the indebtedness payable on account of the Senior Credit Facility is less than $20,000,000 and the Unsupported Principal is paid in full; Borrower may declare, pay or make Distributions, so long as no default or Event of Default shall then exist or occur as a result of the Distributions and Borrower is otherwise in compliance with its financial covenants, both before and after the Distributions; provided, however, in no event shall Distributions be 

 

 

 

 

 

 

 

  

6

  

 

 

	 	
allowed in an amount greater than allowed under the terms of Senior Credit Facility as of the date hereof.

	 
	 	 	 
	 	(e)           Borrower agrees to immediately notify Lead Lender of Borrower’s receipt or knowledge of any of the following, as applicable: (i) any default under the Loan Documents, (ii) notice of default under the Senior Credit Facility or any document, instrument or agreement executed in connection therewith, or (iii) any action by the Senior Lender to enforce its rights or remedies with respect to property of the Borrower.	 
	 	 	 
	 	(f)           Borrower shall promptly advise Lead Lender of any material adverse developments in the operations of Borrower or matters that could reasonably be expected have a material adverse effect on Borrower.	 
	 	 	 
	 	(g)           Borrower shall execute such other and further documents and instruments and shall take such further action as the Lead Lender may reasonably request to implement the provisions of this Agreement and the other Loan Documents. 	 
	 	 	 

    3.           Waiver of Existing Defaults; Dismissal of Lender Suit.  Borrower hereby acknowledges that the defaults described in the complaint filed by Lead Leader in the case styled Arbor Bank v. NEDAK Ethanol, LLC, filed at Doc. 110, No. 213 in the District Court of Douglas County, Nebraska (the “Lender Suit”) have occurred, are continuing and constitute Events of Default under the Loan Documents.  Subject to the terms and conditions of this Amendment and the conditions precedent set forth in Section 5, Lead Lender hereby (a) waives and releases the defaults described in the Lender Suit and all other defaults that have occurred, are continuing and constitute Events of Default under the Loan Documents as of the effective date of this Amendment (the “Existing Defaults”), and (b) agrees to request the Court to set aside the summary judgment granted in favor of Lead Lender and dismiss the Lender Suit.  Lead Lender therefore agrees to deliver to Borrower and Borrower’s Counsel a Stipulation for Dismissal with Prejudice with regards to the Lender Suit (the “Dismissal”), and such Dismissal shall be signed by Lead Lender’s Counsel; provided, however, Borrower agrees that it shall not file such Dismissal with the Court until Borrower has satisfied the conditions set forth in Section 6 below; and provided, further, the parties agree that the Dismissal only relates to the specific claims brought by Lead Lender against Borrower in the Lender Suit and nothing contained in the Dismissal shall be construed as, or constitute, a cancellation or satisfaction of the outstanding indebtedness payable by Borrower to Lead Lender or prevent or otherwise limit Lead Lender from bringing any claims arising from and after the date hereof against Borrower under the Loan Documents, the Amended and Restated Promissory Note or available at law or in equity.  Lead Lender shall execute such other and further documents and instruments and shall take such further action as Borrower may reasonably request to implement the provisions of this Section 3, this Agreement and the other Loan Documents.  Except for the waiver of the Existing Defaults, nothing contained herein is intended to reduce, restrict or otherwise affect any warranties, representations, covenants or other agreements made by Borrower or any guarantor or waive any 

 

  

7

  

Event of Default arising after the effective date of this Amendment under or pursuant to the Loan Documents.

 

4.           Representations and Warranties.  Borrower hereby acknowledges, represents and warrants to Lead Lender as follows:

 

	 	
(a)           Recitals, Loan Balance.  The recitals set forth in this Amendment are true and correct and are incorporated herein by this reference.  As of December 31, 2011, the following amounts are payable to Lead Lender:

 

	 	
Principal

	
$

	
6,579,000.00

	 	
Interest

	
$

	
1,043,313.49

	 	
Late Charges

	
$

	
28,566.591

	 	
Costs and Fees

	
$

	
37,500.002

	 	  	  	  
	 	
Total

	
$

	
7,688,380.08

 

 

	 	
(b)           The representations and warranties of Borrower forth in this Amendment, Sections 2(a) and 2(c) through 2(i) of the Loan Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as of this date, except to the extent that such representations and warranties relate solely to an earlier date and provided that such representations and warranties are hereby modified to the extent necessary to reflect the disclosure by  Borrower of the existence of the Lender Suit.

 

	 	
(c)           Except for the Existing Defaults, no Event of Default or circumstances which would give rise to an Event of Default but for the giving of notice, the passage of time, or both, has occurred under the Loan Documents.

 

	 	

(d)           This Amendment, when executed and delivered by Borrower, constitutes the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

	 	

(e)           As amended, revised or otherwise modified by this Amendment and the Amended and Restated Promissory Note in substantially the form of Exhibit “A” attached hereto, (i) the indebtedness and all other respective liabilities and obligations of Borrower under the Loan Documents remain in full force and effect and (ii) Borrower hereby ratifies and confirms each of the Loan Documents and the rights granted thereunder in favor of Lead Lender, and acknowledges and agrees that the Loan Documents constitute valid and legally binding obligations against Borrower enforceable in accordance with their terms without any defenses or setoffs thereto.  Borrower hereby confirms that the 

 

 

  

1 Amount reflects waived late charges of $5,000 and $6,583.41 offset from Borrower’s money market account no 608707, which Borrower hereby expressly authorizes.

2 Reflects application of payments in the amount of $25,000 on July 6, 2011, August 5, 2011 and September 26, 2011 to  costs and fees, which Borrower hereby expressly authorizes.

  

8

  

 

	 	

security interests and liens granted pursuant to the Security Documents continue to secure the obligations of Borrower under the Loan Documents.

	 

 

5.           Conditions Precedent to Effectiveness.  Lead Lender and Borrower agree that as conditions precedent to the effectiveness of this Amendment, Lead Lender and Borrower shall have received, delivered, approved or otherwise confirmed as applicable, the following:

 

	 	

(a)           Lead Lender shall have received this Amendment executed by Borrower;

	 	 	 
	 	(b)           Lead Lender shall have received the Amended and Restated Borrower’s Note in substantially the form of Exhibit “A” attached hereto;
	 	 	 
	 	(c)           Lead Lender shall have received an Asset Management Agreement between Tenaska BioFuels LLC and Borrower, in form and substance acceptable to Lead Lender, and such acceptance by Lead Lender shall not be unreasonably withheld;
	 	 	 
	 	(d)           Lead Lender shall have confirmed receipt of not less than $10,500,000 in proceeds from Borrower’s Class B Preferred Membership Unit offering;
	 	 	 
	 	(e)           Lead Lender shall have entered into an Intercreditor Agreement with Senior Lender and Borrower in form and substance acceptable to Lead Lender (the “Intercreditor Agreement”); and
	 	 	 
	 	(f)           Lead Lender shall have delivered to Borrower and Borrower’s Counsel the Dismissal, and such Dismissal shall be signed by Lead Lender’s Counsel; provided, however, in no event shall the Dismissal be filed until such time as the conditions in Section 6 hereof are fully satisfied or otherwise waived by Lead Lender and in the event such conditions are not fully satisfied or otherwise waived by Lead Lender, the Dismissal shall be promptly return to Lead Lender’s Counsel.

 

6.           Conditions Precedent to Continued Effectiveness and Enforceability.  Lead Lender and Borrower agree that the continued effectiveness and enforceability of this Amendment shall be expressly conditioned upon the receipt, delivery, approval or confirmation of the following within five (5) Business Days (as defined in the Borrower’s Note) following the satisfaction of the conditions set forth in Section 5 above:

 

	 	 	 
	 	(a)           Lead Lender shall have received payment in immediately available funds of past due interest in the amount of $1,050,715.14 as of January 3, 2012, plus interest from and after January 3, 2012 of $2,467.13 per day.
	 	 	 
	 	(b)           Borrower shall have funded the Tax Escrow Account in the amount of $230,000; provided, however, Lead Lender agrees that if the Tax Escrow Account has not been established within the five (5) Business Days, this condition shall be deemed satisfied if Borrower maintains such amount in the escrow account established between Borrower and First Dakota National Bank pursuant to that certain Escrow Agreement dated August 9, 2011 until such time as Senior Lender and Lead Lender have mutually agreed upon a financial institution for the Tax Escrow Account and the Tax Escrow has been established; provided, that the  Tax Escrow Account shall be established not later 

 

 

 

  

9

  

 

 

 

 

	 	than fourteen (14) Business Days following the satisfaction of the conditions set forth in Section 5 above;
	 	 	 
	(c)           Lead Lender shall have confirmed Borrower’s payment of all delinquent real estate taxes, plus accrued interest and penalties thereon, payable with respect to the Redevelopment Area, including without limitation, real estate taxes due and payable in 2010, such delinquent real estate taxes, including interest and penalties, as of January 3, 2012 being $1,453,762.07, plus interest from and after January 3, 2012 of $509.36 per day;
	 	 	 
	(d)           Lead Lender shall have confirmed Borrower’s redemption of all real property tax certificates currently outstanding with respect to the Redevelopment Area;
	 	 	 
	(e)           Lead Lender shall have received from Borrower, a certificate of Borrower’s authorized officers as to (i) resolutions of its board of directors or members, as applicable, then in full force and effect authorizing the execution, delivery and performance of this Amendment and all documents, instruments and agreement to be executed by it in connection herewith; (ii) the incumbency and signatures of its authorized officers authorized to act with respect to the Loan Documents to be executed by it (upon which certificate Lead Lender may conclusively rely until it shall have received a further certificate from an officer of Borrower cancelling or amending such prior certificate, which further certificate shall be reasonably satisfactory to Lead Lender); and (iii) copies of Borrower’s organizational documents certified by the Secretary of State of such party’s State of organization or incorporation, as applicable, on a date reasonably acceptable to Lead Lender; and
	 	 	 
	 (f)           Borrower shall have paid all unpaid out-of-pocket costs and expenses, including without limitation, attorneys’ fees and expenses, incurred by Lead Lender in connection with previous enforcement actions with respect to the Loan and this Amendment and any documents, instruments or agreements contemplated hereby, which aggregate amount shall not exceed $37,500.

 

7.           Release of Claims.  In consideration of this Amendment and other consideration afforded hereby, Borrower hereby fully and finally releases, remises, acquits, and forever discharges, with prejudice, Lead Lender and each of its participants in the Loan and their respective employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, members, shareholders, participants, predecessors, successors and assigns, subsidiary corporations, parent corporations, affiliates and related corporate divisions (all of the foregoing hereinafter called the “Released Parties”), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages, and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter arising, for or because of any manner or things done, omitted, or suffered to be done by any of the Released Parties prior to and including the date of execution hereof and in any way directly or indirectly arising out of or in any way connected to the Loan or the Loan Documents, including but not limited to, claims, liabilities or obligations relating to any settlement negotiations, representations, commitments, arrangements, liabilities, offsets or deductions of sums owed to or

 

  

10

  

 

 

	by Borrower (all of the foregoing hereinafter called the “Released Matters”).  Borrower acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters; provided, however, that any and all rights, benefits, agreements and obligations set forth in this Amendment are not and shall not be Released Matters and shall not be impaired or abridged thereby.  Borrower represents and warrants to Lead Lender that it has not purported to transfer, assign, or otherwise convey any right, title, or interest of Borrower in any Released Matter to any other person or entity and that the foregoing constitutes a full and complete release of all Released Matters.  
	 

8.           Lead Lender Acknowledgement and Representation.

 

(a)           Lead Lender hereby acknowledges that it has received executed copies of that certain Master Credit Agreement between Borrower and Senior Lender dated as of February 14, 2007 (as amended and restated by that certain Amended and Restated Master Credit Agreement between Borrower and Senior Lender made and entered into effective as of December 31, 2011; the “Senior Credit Facility” as now defined pursuant to Section 2(c) of this Amendment) together with First Supplement to the Master Credit Agreement between Borrower and Senior Lender made and entered into effective as of December 31, 2011 (together with the Senior Credit Facility, the “Senior Loan Documents”).  Lead Lender has reviewed the Senior Loan Documents and the Amended and Restated Term Loan Note contemplated by the Senior Loan Documents, and Lead Lender hereby consents to Borrower's execution, delivery and performance thereunder with the intent that  Borrower's performance under any of the foregoing pursuant to or in accordance with the terms thereof shall not constitute an Event of Default under the Loan Documents or this Amendment notwithstanding any provision of the Loan Documents or this Amendment.(b)           Subject to the waiver and release of Existing Defaults pursuant to Section 3 of this Amendment, Lead Lender represents to Borrower that as of the date of this Amendment Lead Lender has no knowledge of the existence of an Event of Default under the Loan Documents or this Amendment or of any event or fact that now or with the passage of time would give rise to or constitute an Event of Default under the Loan Documents or this Amendment.

 

9.           Miscellaneous.

 

(a)           Non-Waiver.  Waiver of or acquiescence by Lead Lender in any default by Borrower, or failure of Lead Lender to insist upon strict performance by Borrower of any warranties, agreements or other obligations contained in this Amendment shall not constitute a waiver of any subsequent or other default, failure or waiver of strict performance, whether similar or dissimilar.

 

(b)           Modifications.  No modification of any provision of this Amendment, no approvals required from Lead Lender and no consent by Lead Lender to any departure therefrom by Borrower shall be effective unless such modification, approval or consent shall be in writing and signed by a duly authorized officer of Lead Lender, and the same 

  

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shall then be effective only for the period and on the conditions and for the specific instances and purposes specified in such writing.  No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances.

 

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

 

(d)           Rights and Remedies Cumulative.  The rights and remedies of Lead Lender under the Loan Documents are cumulative and are not in lieu of, but are in addition to any other rights or remedies which Lead Lender shall have under the Loan Documents, or at law or in equity.  No course of dealing between Lead Lender and Borrower or any failure or delay on the part of Lead Lender in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies of Lead Lender and no single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder.

 

 

       (e)           Costs of Enforcement.  In the event that Lead Lender shall retain or engage an attorney or attorneys to collect or enforce or protect its interests with respect to this Amendment or any other Loan Document, including the representation of Lead Lender in connection with any bankruptcy, reorganization, receivership or any other action affecting creditor’s rights, and regardless of whether a suit or action is commenced, Borrower shall pay all of the reasonable costs and expenses of such collection, enforcement or protection, including attorneys fees, and Lead Lender may take judgment for all such amounts.  All such costs and expenses shall bear interest at the highest default rate of interest described in any of the Loan Documents if not paid by Borrower immediately upon demand from Lead Lender.

 

(f)           Captions.  The captions of the various sections and paragraphs of this Amendment have been inserted only for the purposes of convenience; such captions are not a part of this Amendment and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Amendment.

 

(g)           Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  An electronic transmission or facsimile of this Amendment shall be deemed an original and shall be admissible as evidence of the document and the signer’s execution.

 

(h)           Governing Law and Consent to Forum.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.  BORROWER HEREBY CONSENTS TO THE JURISDICTION OF 

 

 

  

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ANY STATE COURT LOCATED WITHIN DOUGLAS COUNTY, NEBRASKA OR FEDERAL COURT IN THE DISTRICT OF NEBRASKA. BORROWER WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.  BORROWER FURTHER AGREES NOT TO ASSERT AGAINST Lead Lender (EXCEPT BY WAY OF A DEFENSE OR COUNTERCLAIM IN A PROCEEDING INITIATED BY LEAD LENDER) ANY CLAIM OR OTHER ASSERTION OF LIABILITY WITH RESPECT TO THIS AMENDMENT, LEAD LENDER’S CONDUCT OR OTHERWISE IN ANY JURISDICTION OTHER THAN THE FOREGOING JURISDICTIONS.

 

(i)           Waiver of Jury Trial.  BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY (WHICH LEAD LENDER ALSO WAIVES) IN ANY ACTION,SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE OBLIGATIONS OF BORROWER HEREUNDER OR LEAD LENDER’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

 

(j)           Conflicts with Loan Documents.  In the event of a conflict between the provisions among any of the Loan Documents, the terms and provisions which provide the Lead Lender the broadest rights shall be controlling.

 

(k)           Credit Agreement in Writing.  A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT YOU AND US FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

 

 [The Remainder of this Page Intentionally Left Blank, Signature Page to Follow]

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above written.

 

NEDAK ETHANOL, LLC, a Nebraska limited liability company

By:/s/ Jerome Fagerland                                                                           

Its:  President and General Manager                                                                           

ARBOR BANK, a Nebraska banking corporation

By:/s/ Mark D. Jepson                                                                           

Its:  EVP, Chief Credit Officer                                                                           

 

 

 

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