CONSTRUCTION LOAN AGREEMENT
Exhibit 4(l)
CONSTRUCTION LOAN AGREEMENT
This Construction Loan Agreement (the "AGREEMENT") is dated as of the 20th day of September, 2007, and is by and among ONE EARTH ENERGY, LLC, an Illinois limited liability company ("BORROWER"), FIRST NATIONAL BANK OF OMAHA ("FNBO"), a national banking association headquartered at Omaha, Nebraska as a BANK and as administrative agent for the BANKS (in such capacity, the “ADMINISTRATIVE AGENT”), as accounts bank (in such capacity, the “ACCOUNTS BANK”) and as collateral agent for the BANKS (in such capacity, the “COLLATERAL AGENT”), and the other financial institutions which are or may become a party to this AGREEMENT in accordance with the terms of this AGREEMENT and listed in Exhibit H to this AGREEMENT.
WHEREAS, BORROWER has requested BANKS to lend to BORROWER up to the sum of the lesser of (i) One Hundred Million and No/100 Dollars ($100,000,000.00) or (ii) sixty percent (60%) of the TOTAL PROJECT COST as shown in the TOTAL PROJECT COST STATEMENT (the "CONSTRUCTION LOAN"), for the purpose of partially funding the cost of the construction of an ethanol plant on the real estate described in Exhibit F attached hereto and by this reference made a part hereof (together with all property encumbered by the MORTGAGE or otherwise constituting collateral for the LAONS, the "PROPERTY") together with a Ten Million and No/100 Dollars ($10,000,000.00) revolving line of credit ("REVOLVING LOAN"), up to One Million and No/100 Dollars ($1,000,000.00) to support the issuance by FNBO of Letters of Credit, and SWAP CONTRACTS with an additional exposure to FNBO. The foregoing may be collectively referred to in this AGREEMENT as the “LOANS” and singly referred to as a “LOAN”.
WHEREAS, BANKS are willing to provide such LOANS to BORROWER upon the terms and conditions herein set forth.
SECTION 1 Definitions.
1.1 “ACCOUNTS BANK” means FNBO in its capacity as depositary bank, bank and securities intermediary hereunder, and any successor to FNBO in such capacity.
1.2 “ADJUSTED EBITDA” means EBITDA less taxes, less capital expenditures and less TAX DISTRIBUTIONS and other distributions permitted under this AGREEMENT, in each case for the applicable reporting period.
1.3 “ADMINISTRATIVE AGENT” means FNBO in its capacity as administrative agent for the BANKS hereunder, and any successor to FNBO in such capacity.
1.4 "AGENT" means collectively, the ACCOUNTS AGENT, ADMINISTRATIVE AGENT and COLLATERAL AGENT.
1.5 "ASSIGNMENT OF CONSTRUCTION CONTRACT" means the assignment of that certain Lump Sum Design-Build Agreement ("CONSTRUCTION CONTRACT") between BORROWER and Fagen, Inc. (the "DESIGN-BUILDER") dated June 13, 2007 for construction of the PROJECT in
accordance with PLANS applicable thereto, by which BORROWER assigns, as additional security for repayment of the OBLIGATIONS, BORROWER's interest in the CONSTRUCTION CONTRACT in a form acceptable to COLLATERAL AGENT, and pursuant to which BORROWER collaterally assigns to COLLATERAL AGENT all other construction contracts relating to the PROJECT.
1.6 "BANKS" means collectively the financial institutions which are or become a party to this AGREEMENT and agree to make the LOANS to BORROWER, with any one of the BANKS individually referred to as a "BANK".
1.7 "BANKING DAY" means a day on which ADMINISTRATIVE AGENT is open for substantially all of its business. "EURODOLLAR BUSINESS DAY" means a BANKING DAY on which commercial banks are open for international business (including dealings in U.S. Dollar deposits) in London, England.
1.8 "BORROWING BASE" means the lesser of:
(i) $10,000,000.00,
or
(ii) The aggregate of (i) 75% of BORROWER's corn inventory value as reported by Alliance Grain Co. of Gibson City, Illinois on the date reported to ADMINISTRATIVE AGENT less all accounts payable for such corn inventory, plus (ii) 75% of the amount of BORROWER's Ethanol and Distillers Grains Accounts aged thirty (30) days or less, excluding any such Accounts reasonably deemed ineligible by BANK, plus (iii) 75% of BORROWER's Finished Goods-Ethanol and Distillers Grains Inventory (both wet and dry), valued at the lower of cost or market value, plus (iv) 100% of the positive balance of BORROWER’s hedging accounts pledged to, and subject to a perfected security interest in favor of, COLLATERAL AGENT, valued at fair market value on the date of reporting and less (v) the negative balance of BORROWER’s hedging accounts pledged to, and subject to a perfected security interest in favor of, COLLATERAL AGENT.
1.9 "CLOSING" shall mean the date on which ADMINISTRATIVE AGENT receives this AGREEMENT, executed by BORROWER and the BANKS, together with the CONSTRUCTION NOTES, the REVOLVING NOTES and the other LOAN DOCUMENTS which must be delivered by the CLOSING as provided for in this Agreement.
1.10 “COLLATERAL AGENT” means FNBO in its capacity as collateral agent for the BANKS hereunder, and any successor to FNBO in such capacity.
1.11 "COMMITMENTS" means with respect to each BANK, as applicable, such BANK’s respective amount of each LOAN, as applicable, committed to BORROWER by such BANK under this AGREEMENT, which COMMITMENTS for each BANK are listed in Exhibit H to this AGREEMENT.
1.12 "CONSTRUCTION LOAN TERMINATION DATE" means the earlier of (i) July 31, 2009, or (ii) such earlier date upon which BANKS' commitment to make a disbursement under the CONSTRUCTION LOAN is terminated in accordance with the terms of the CONSTRUCTION NOTES or this AGREEMENT and the outstanding balance of the CONSTRUCTION LOAN became due and payable in full.
1.13 "COMPLETION DATE" means the earlier of July 15, 2009, or the date ADMINISTRATIVE AGENT determines following a proper inspection and in the exercise of ADMINISTRATIVE AGENT's reasonable discretion, that the PROJECT has been completed in accordance with the PLANS.
1.14 "CONSTRUCTION NOTES" means the promissory notes executed and delivered by BORROWER to each BANK substantially in the form of Exhibit A evidencing borrowings under the CONSTRUCTION LOAN up to an aggregate maximum amount of the lesser of (i) One Hundred Million and No/100 Dollars ($100,000,000.00), and (ii) sixty percent (60%) of the TOTAL PROJECT COST.
1.15 “DEFAULTING BANK” means any BANK that (a) has failed to make any portion of the LOANS required to be funded by it hereunder on the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the ADMINISTRATIVE AGENT or any other BANK any other amount required to be paid by it hereunder or under any LOAN DOCUMENT within one (1) BANKING DAY of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent, become the subject of a bankruptcy or insolvency proceeding or had its assets and/or control frozen or seized by the applicable banking regulators or other governmental agency.
1.16 "DRAW REQUEST" means forms acceptable to ADMINISTRATIVE AGENT to be submitted to ADMINISTRATIVE AGENT by BORROWER when an advance is requested under the CONSTRUCTION LOAN.
1.17 "EBITDA" means without duplication Earnings Before Interest, Taxes, Depreciation and Amortization, in each case during the applicable reporting period, all as determined in accordance with GAAP.
1.18 “EQUITY INTEREST” means, with respect to any PERSON, all of the shares of capital stock or units, shares or membership interests of (or other ownership or profit interests in) such PERSON, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or units, shares or membership interests of (or other ownership or profit interests in) such PERSON or warrants, rights or options for the purchase or acquisition from such PERSON of such shares, units or membership interests (or such other interests), and all of the other ownership or profit interests in such PERSON (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, units, membership interests, warrants, options, rights or other interests are outstanding on any
date of determination, in each such case including all voting rights and economic rights related thereto.
1.19 "EVENT OF DEFAULT" has the meaning provided for in Section 7 of this AGREEMENT.
1.20 "EXCESS CASH FLOW" means ADJUSTED EBITDA, less scheduled payments on the LOANS, in each case for the applicable reporting period.
1.21 "FIXED CHARGE COVERAGE RATIO" means the ratio derived when comparing (i) ADJUSTED EBITDA to (ii) BORROWER's scheduled payments on the principal and interest of the LOANS made during the applicable reporting period, excluding any principal repaid on REVOLVING LOAN and LONG TERM REVOLVING NOTES.
1.22 "GAAP" means generally accepted accounting principles in the United States, applied on a basis consistent with the accounting principles applied in the preparation of the annual financial statements of BORROWER referred to in Section 6.1 of this AGREEMENT and the PROJECTIONS described in Section 5.7 of this AGREEMENT. All accounting terms not otherwise defined in this AGREEMENT have the meaning assigned to them in accordance with GAAP.
1.23 "INDEBTEDNESS" means, as to BORROWER, all indebtedness for borrowed money from any lender including long-term debt, short-term debt, the NEGATIVE TERMINATION VALUE of SWAP CONTRACTS, and capital leases.
1.24 "INDEPENDENT INSPECTOR" means the firm which will be retained by ADMINISTRATIVE AGENT, at BORROWER's cost, to conduct on site inspections of the work-in-progress on the PROJECT, and to issue periodic reports to BANKS as to the progress of construction of the PROJECT and adherence to the PLANS.
1.25 "INTEREST PERIOD" means for the FIXED RATE NOTES, VARIABLE RATE NOTES, CONSTRUCTION NOTES and LONG TERM REVOLVING NOTES a period of three (3) months, and for the REVOLVING NOTES a period of one (1) month; provided that:
1.25.1 subject to clause 1.25.2 below, any INTEREST PERIOD which would otherwise end on a day which is not a EURODOLLAR BUSINESS DAY shall be extended to the next succeeding EURODOLLAR BUSINESS DAY; and
1.25.2 no INTEREST PERIOD shall extend beyond the LOAN TERMINATION DATE applicable to such NOTE.
1.26 "LIBOR RATE" means, for each INTEREST PERIOD, the London Interbank Offered Rate for U.S. Dollar Deposits for such INTEREST PERIODS as quoted by the Bloomberg service or such other vendor chosen by ADMINISTRATIVE AGENT for the purpose of determining the London Interbank Offered Rate for U.S. Dollar Deposits for each INTEREST PERIOD.
1.27 "LOAN DOCUMENTS" means this AGREEMENT and each agreement or instrument referred to in Section 4 of this AGREEMENT which is executed by or on behalf of BORROWER to govern, evidence or secure the OBLIGATIONS.
1.28 "LOAN TERMINATION DATE" means the earliest to occur of the following: (i) as to the CONSTRUCTION NOTES, the CONSTRUCTION LOAN TERMINATION DATE, as to the REVOLVING NOTES, September 19, 2008, as to the FIXED RATE NOTES, the VARIABLE RATE NOTES, and as to the LONG TERM REVOLVING NOTES, a date which is five years subsequent to the CONSTRUCTION LOAN TERMINATION DATE, (ii) the date the OBLIGATIONS are accelerated pursuant to this AGREEMENT, and (iii) the date ADMINISTRATIVE AGENT has received (a) notice in writing from BORROWER of BORROWER's election to terminate this AGREEMENT and (b) indefeasible payment in full of the OBLIGATIONS.
1.29 “MATERIAL ADVERSE EFFECT” means any event or circumstance which (i) is reasonably likely to materially impair or adversely effect the ability of BORROWER to perform and pay the OBLIGATIONS and to perform and comply with the terms and provisions of the LOAN DOCUMENTS or (ii) would or could reasonably be expected to impair or adversely effect the financial condition of BORROWER, or the construction or operation of the PROJECT.
1.30 MARKETING AND RISK MANAGEMENT CONTRACTS" means the contracts between BORROWER and third parties for the marketing and sale of ethanol products, the marketing and sale of distiller’s dried grains (“DDGS”), risk management, grain procurement, and commodity hedging accounts, all of which shall be assigned to the COLLATERAL AGENT and shall be subject to the reasonable approval of the ADMINISTRATIVE AGENT.
1.31 “MAXIMUM AVAILABILITY” means the maximum principal amount on the LONG TERM REVOLVING NOTES available to BORROWER for borrowing on the date of determination (which shall initially be $10,000,000.00) as such MAXIMUM AVAILABILITY is reduced by (i) $250,000.00 on each REDUCTION DATE and (ii) the EXCESS CASH FLOW calculation provided for in Section 6.2.3 of this AGREEMENT on each EXCESS CASH FLOW REDUCTION DATE as defined in Section 6.2.3 of this AGREEMENT.
1.32 "MORTGAGE" means the Construction Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement executed and delivered by BORROWER as grantor in favor of COLLATERAL AGENT as mortgagee and COLLATERAL AGENT for the BANKS, creating a first lien on the PROPERTY and a security interest in all of the personal property located on the PROPERTY as security for payment of the OBLIGATIONS, and all modifications and amendments thereof.
1.33 "NEGATIVE TERMINATION VALUE" means, with respect to any SWAP CONTRACT of BORROWER, the amount (if any) that BORROWER would be required to pay if such SWAP CONTRACT were terminated by reason of a default by or other termination event relating to BORROWER, such amount to be determined on the basis of a good faith estimate made by ADMINISTRATIVE AGENT, in consultation with BORROWER. The NEGATIVE
TERMINATION VALUE of any such SWAP CONTRACT at any date shall be determined (i) as of the end of the most recent fiscal quarter ended on or prior to such date if such SWAP CONTRACT was then outstanding or (ii) as of the date such SWAP CONTRACT is terminated. However, if an applicable agreement between BORROWER and the relevant counterparty provides that, upon any such termination by such counterparty, one or more other SWAP CONTRACTS (if any exist) between BORROWER and such counterparty would also terminate and the amount (if any) payable by BORROWER would be a net amount reflecting the termination of all the SWAP CONTRACTS so terminated, then the NEGATIVE TERMINATION VALUE of all the SWAP CONTRACTS subject to such netting shall be, at any date, a single amount equal to such net amount (if any) payable by BORROWER, determined as of the later of (i) the end of the most recently ended fiscal quarter or (ii) the date on which the most recent SWAP CONTRACT subject to such netting was terminated.
1.34 "NET WORTH" means, as to BORROWER as of any date, total assets less total liabilities and less the following types of assets: (1) leasehold improvements; (2) receivables (other than those created by sale of goods) from a member and other investments in or amounts due from any member, employee or other person or entity related to or affiliated with BORROWER); (3) goodwill, patents, copyrights, mailing lists, trade names, trademarks, servicing rights, organizational and franchise costs, bond underwriting costs and other like assets properly classified as intangible, and (4) treasury stock or equity interests in BORROWER, all as determined in accordance with GAAP; provided, however, (x) NET WORTH shall not include any debt due to BORROWER not acceptable to ADMINISTRATIVE AGENT in the exercise of its reasonable discretion, and (y) any TIF Grant funds actually received by BORROWER may be included in the determination of total assets.
1.35 "OBLIGATIONS" means the obligation of the BORROWER:
1.35.1 To pay the principal of, and interest on, the LOANS in accordance with the terms thereof, to pay any fees owed to ADMINISTRATIVE AGENT or BANKS under this AGREEMENT, and to satisfy all of its other liabilities to BANKS whether hereunder or otherwise, whether now existing or hereafter incurred, matured or unmatured, direct or contingent, joint or several, including any extensions, modifications, renewals thereof, and substitutions therefore and including, but not limited to, any obligations under letter of credit agreements and SWAP CONTRACTS;
1.35.2 To repay to BANKS all amounts advanced by BANKS hereunder, under any other LOAN DOCUMENT (including, without limitation, any protective advance made under the MORTGAGE) or otherwise on behalf of BORROWER, including, but without limitation, advances for principal or interest payments to prior secured parties, mortgagees, or licensors, or taxes, levies, insurance, rent, or repairs to, or maintenance or storage of, any of the real or personal property securing BORROWER's payment and performance of this AGREEMENT; and
1.35.3 To reimburse BANKS, on demand, for BANKS' reasonable and necessary out of pocket expenses and costs, including the reasonable fees and expenses of counsel, in connection with the preparation, administration, amendment, modification, or enforcement of
this AGREEMENT and the LOAN DOCUMENTS required hereunder, including, without limitation, any proceeding brought or threatened, to enforce payment of any of the OBLIGATIONS referred to in this section of the AGREEMENT.
1.36 "PERMIT" or "PERMITS" means any and all licenses, consents or permits required under any federal, state or local law or regulation, including, but not limited to any environmental law or regulation, required to construct and operate the facility on the PROPERTY after completion of the PROJECT at its operational capacity, including without limitation the following:
1.36.1 An air emissions permit, which PERMIT will allow BORROWER after the COMPLETION DATE to operate the ethanol plant on the PROPERTY after construction of the PROJECT at maximum capacity;
1.36.2 All permits required in connection with the construction and operation of all above or below ground storage tanks included in the PLANS for the ethanol plant;
1.36.3 A National Pollution Discharge Elimination System Construction Permit for any storm water and/or waste water that is discharged during construction and after construction of the PROJECT; and
1.36.4 The other permits listed on Exhibit I attached hereto and incorporated herein by reference.
1.37 “PERSON” means an individual, partnership, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, GOVERNMENTAL AUTHORITY, or other entity of whatever nature. GOVERNMENTAL AUTHORITY means any federal, state, county, or local governmental department, commission, board, bureau, agency, authority, instrumentality or judicial or regulatory body or entity having or asserting jurisdiction as to any of the PROPERTY, the PROJECT or BORROWER, either during the construction of the PROJECT or the operation of the PROJECT following completion thereof, including courts of appropriate jurisdiction.
1.38 "PLANS" means collectively all of the plans, specifications and materials listing for the construction of the PROJECT, including but not limited to the plans, specifications and materials prepared by Fagen Engineering, LLC (“FAGEN ENGINEERING”) and DESIGN-BUILDER on behalf of BORROWER for the construction of the ethanol plant and certified to BANKS as the plans for the ethanol plant by the DESIGN-BUILDER, FAGEN ENGINEERING and BORROWER.
1.39 "PROJECT" means collectively the design and construction of BORROWER’s ethanol plant, administration building and railroad spur, together with all necessary and appropriate fixtures, equipment, attachments, and accessories, as described in the PLANS and the plans, specifications and materials listing relating to the administration building and railroad spur, to be constructed on the PROPERTY.
1.40 “REDUCTION DATE” means the date of any scheduled quarterly payment on the TERM LOANS as provided for in Section 2.5 below, on which dates the MAXIMUM AVAILABILITY on the LONG TERM REVOLVING NOTE shall reduce by $250,000.00.
1.41 "REQUIRED BANKS" means, at any time, ADMINISTRATIVE AGENT and any combination of BANKS (other than AGENT) whose COMMITMENTS in the LOANS aggregate at least fifty-one percent (51%) of the aggregate COMMITMENTS; provided, however, that the COMMITMENTS of any DEFAULTING BANK other than AGENT shall be excluded for purposes of making a determination of the REQUIRED BANKS.
1.42 "REVOLVING NOTES" means the promissory note of BORROWER to each BANK in the amount of such BANK’s COMMITMENT evidencing the REVOLVING LOAN described in Section 2.8 of this AGREEMENT, its renewals, modifications and extensions.
1.43 "SECURITY AGREEMENT" means the SECURITY AGREEMENT between BORROWER, as debtor, and COLLATERAL AGENT, as secured party and collateral agent for the BANKS, creating a first priority security interest in all of BORROWER's assets, including general intangibles and payment intangibles, securing the OBLIGATIONS.
1.44 "SUBCONTRACTOR" means any person who contracts with the DESIGN-BUILDER, the general contractor of the administration building, the general contractor of the railroad spur or BORROWER to perform any work or supply any of the materials or equipment necessary to complete the PROJECT.
1.45 "SWAP CONTRACT" or "SWAP CONTRACTS" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. Provided, however, the term SWAP CONTRACT shall not, for the purposes of this AGREEMENT, include commodity hedging or commodity risk management contracts. The term "commodity" includes ethanol, grain, natural gas and other traded commodities.
1.46 “TAX DISTRIBUTIONS” means quarterly cash distributions to BORROWER’s members for the purpose of paying their respective quarterly estimated federal and state income tax payments required to be made by each of BORROWER’s members based upon the operations of BORROWER and the resulting federal and state income tax liability of such members in an amount based upon an assumed combined federal and state tax rate for each member of 42%.
1.47 "TERM NOTES" means collectively the FIXED RATE NOTES, VARIABLE RATE NOTES and LONG TERM REVOLVING NOTES to be executed by BORROWER in favor of each BANK up to the amount of each BANKS COMMITMENT which evidence permanent financing to pay the CONSTRUCTION LOAN as described in Section 2.5 of this AGREEMENT, their renewals, modifications and extensions.
1.48 “TOTAL PROJECT COST” means the aggregate total cost to acquire the PROPERTY and construct the PROJECT, including all hard and soft costs, as shown in the TOTAL PROJECT COST STATEMENT.
1.49 “TOTAL PROJECT COST STATEMENT” means the budget detailing by category the TOTAL PROJECT COST to acquire the PROPERTY and construct the PROJECT in accordance with the PLANS, as attached hereto as Exhibit G, which has been approved by BANKS, as such TOTAL PROJECT COST STATEMENT may be modified, amended or supplemented by “CONSTRUCTION VARIANCE REPORTS” submitted by BORROWER to ADMINISTRATIVE AGENT in connection with a DRAW REQUEST. The “CONSTRUCTION COST STATEMENT” shall be the portion of the TOTAL PROJECT COST STATEMENT applicable to the costs incurred under the CONSTRUCTION CONTRACT with the DESIGN-BUILDER. The TOTAL PROJECT COST STATEMENT includes a “SOURCES AND USES OF FUNDS” which demonstrates the source of funds to be applied to the TOTAL PROJECT COST as shown in the TOTAL PROJECT COST STATEMENT.
1.50 "WORKING CAPITAL" means current assets (less investments in or other amounts due from any member, manager, employee or any person or entity related to or affiliated with BORROWER and prepayments), plus the amount available to BORROWER for drawing under the LONG TERM REVOLVING NOTES, less current liabilities.
SECTION 2 Amount and Terms of the LOANS.
2.1 CONSTRUCTION LOAN. To the extent of their respective COMMITMENTS, each BANK agrees, on the terms and subject to the conditions hereinafter set forth, to make, from time to time during the period from the date of execution of this AGREEMENT to and including the CONSTRUCTION LOAN TERMINATION DATE disbursements to BORROWER pursuant to that certain Disbursing Agreement dated of even date with this AGREEMENT among ADMINISTRATIVE AGENT, BORROWER, the TITLE COMPANY (as defined in Section 4.1.11 below) and Homestead Escrow and Exchange Company (the “DISBURSING AGREEMENT”), in an aggregate principal amount not to exceed the amount of the CONSTRUCTION LOAN for the sole purpose of paying approved construction costs of the PROJECT. If, prior to the COMPLETION DATE, there is paid to ADMINISTRATIVE AGENT a third party payment (a grant payment, for example), which is applied to the CONSTRUCTION LOAN, BANKS will advance such amount, or a lesser sum, as in ADMINISTRATIVE AGENT's reasonable discretion is necessary to complete the PROJECT. Approved construction costs are costs actually incurred in connection with the construction of the PROJECT, which shall include but not be limited to costs of PERMITS, licenses, labor, supplies, materials, services, equipment, insurance premiums, real estate taxes and interest on disbursements, and ADMINISTRATIVE AGENT-approved operating costs of the PROJECT.
Construction costs do not include the cost associated with payment of lost profits connected with termination under Article 15 of the CONSTRUCTION CONTRACT.
2.2 The CONSTRUCTION NOTES. The obligation of BORROWER to repay the CONSTRUCTION LOAN shall be evidenced by the CONSTRUCTION NOTES. Notwithstanding any provisions of the CONSTRUCTION NOTES, interest shall be payable at the rate provided therein only on such portions of the CONSTRUCTION LOAN proceeds as actually have been disbursed pursuant to this AGREEMENT and the DISBURSING AGREEMENT.
2.3 Interest on the CONSTRUCTION LOAN. Prior to the CONSTRUCTION LOAN TERMINATION DATE, interest on the principal balance outstanding on the CONSTRUCTION LOAN shall accrue at a rate equal to the three month LIBOR RATE plus 310 hundred basis points, as more particularly set forth in the CONSTRUCTION NOTES. The interest rate on the CONSTRUCTION LOAN shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the CONSTRUCTION LOAN, and shall adjust on the 8th day of every third month thereafter. After the CONSTRUCTION LOAN TERMINATION DATE, whether by acceleration or otherwise, interest shall accrue on the CONSTRUCTION LOAN at a rate equal to the three month LIBOR RATE plus nine hundred ten (910) basis points.
2.4 Repayment of the CONSTRUCTION NOTES. Interest only shall be payable quarterly on the CONSTRUCTION NOTES as more particularly provided for in the CONSTRUCTION NOTES. All outstanding principal and accrued but unpaid interest shall be payable in full on the CONSTRUCTION LOAN TERMINATION DATE.
2.5 TERM LOANS. The existing balance on the CONSTRUCTION LOAN, including any advance made to increase WORKING CAPITAL, as of CONSTRUCTION LOAN TERMINATION DATE will be restated and said balance will be paid by the TERM NOTES substantially in the forms attached hereto as Exhibits B, C, and D, respectively, and are by this reference made a part hereof. The TERM NOTES evidence the "TERM LOANS". The TERM NOTES shall be amortized on a ten (10) year basis and repaid as follows:
On the eighth (8th) day of every third (3rd) month, commencing three (3) months after the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall pay to ADMINISTRATIVE AGENT, for the account of BANKS in accordance with their respective COMMITMENTS in the FIXED RATE LOAN, the scheduled principal payment shown in Schedule I, attached hereto and by this reference made a part hereof, plus accrued interest on the FIXED RATE LOAN.
In addition, on the eighth (8th) day of every third (3rd) month, commencing three (3) months after the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall pay $1,902,832.10 to ADMINISTRATIVE AGENT, for the account of BANKS in accordance with their respective COMMITMENT in the TERM LOANS, as follows:
(a). first to accrued interest on the LONG TERM REVOLVING NOTES;
(b). next to accrued interest on the VARIABLE RATE NOTES; and
(c). next to principal on the VARIABLE RATE NOTES.
After the VARIABLE RATE NOTES have been fully paid, such quarterly payments shall be allocated first to accrued interest on the LONG TERM REVOLVING NOTES, and thence to principal outstanding on the LONG TERM REVOLVING NOTES; provided, however, that, if there is no outstanding interest or principal on the LONG TERM REVOLVING NOTES, or the MAXIMUM AVAILABILITY on the LONG TERM REVOLVING NOTES has been reduced to zero dollars ($0), then such quarterly payment shall no longer be required.
In addition, on each REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE, BORROWER shall pay and apply to the then outstanding principal balance of the LONG TERM REVOLVING NOTES, if any, the amount necessary to reduce the outstanding principal balance of the LONG TERM REVOLVING NOTES so that they are within the MAXIMUM AVAILABILITY applicable on each such REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE.
All unpaid principal and accrued interest under the TERM LOANS shall be due and payable on the LOAN TERMINATION DATE applicable thereto, if not sooner paid.
2.6 Interest on the TERM LOANS. Prior to the applicable LOAN TERMINATION DATE, interest shall accrue on the TERM LOANS as follows:
(a). FIXED RATE NOTES. Interest on the principal balance outstanding on the FIXED RATE NOTES shall accrue at a rate equal to the three month LIBOR RATE plus 300 hundred basis points, as more particularly set forth in the FIXED RATE NOTES. The interest rate on the FIXED RATE NOTES shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the FIXED RATE NOTES, and shall adjust on the 8th day of every third month thereafter. After the applicable LOAN TERMINATION DATE, whether by acceleration or otherwise, interest shall accrue on the FIXED RATE NOTES at a rate equal to the three month LIBOR RATE plus nine hundred (900) basis points.
(b). VARIABLE RATE NOTES. Subject to the incentive pricing provisions contained in Section 2.15 of this AGREEMENT, interest on the principal balance outstanding on the VARIABLE RATE NOTES shall accrue at a rate equal to the three month LIBOR RATE plus 310 basis points, as more particularly set forth in the VARIABLE RATE NOTES. The interest rate on the VARIABLE RATE NOTES shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the VARIABLE RATE NOTES, and shall adjust on the 8th day of every third month thereafter. After the applicable LOAN TERMINATION DATE, whether by acceleration or otherwise, interest shall accrue on the VARIABLE RATE NOTES at a rate equal to the three month LIBOR RATE plus nine hundred ten (910) basis points.
(c). LONG TERM REVOLVING NOTES. Subject to the incentive pricing provisions contained in Section 2.15 of this AGREEMENT, interest on the principal balance outstanding on the LONG TERM REVOLVING NOTES shall accrue at a rate equal to the three month LIBOR RATE plus 310 basis points, as more particularly set forth in the LONG
TERM REVOLVING NOTES. The interest rate on the LONG TERM REVOLVING NOTES shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the LONG TERM REVOLVING NOTES, and shall adjust on the 8th day of every third month thereafter. After the applicable LOAN TERMINATION DATE, whether by acceleration or otherwise, interest shall accrue on the LONG TERM REVOLVING NOTES at a rate equal to the three month LIBOR RATE plus nine hundred ten (910) basis points.
2.7 LONG TERM REVOLVING NOTES. Subject to the extent of their respective COMMITMENTS in the LONG TERM REVOLVING LOAN, BANKS agree to lend $10,000,000.00 to BORROWER pursuant to this facility (reducing on each REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE as provided for above). ADMINISTRATIVE AGENT will credit proceeds of this revolving loan ("LONG TERM REVOLVING LOAN") to BORROWER's deposit account with ACCOUNTS BANK, bearing number 110226509.
2.7.1 Subject to the terms hereof and their respective COMMITMENT, BANKS will lend BORROWER, from time to time until the LOAN TERMINATION DATE such sums as BORROWER may request by reasonable same day notice to ADMINISTRATIVE AGENT, received by ADMINISTRATIVE AGENT not later than 11:00 A.M. of such day, but which shall not exceed in the aggregate principal amount at any one time outstanding, the MAXIMUM AVAILABILITY in effect on the date of any requested advance. BORROWER may borrow, repay without penalty or premium and reborrow hereunder, from the date of this AGREEMENT until the LOAN TERMINATION DATE, either the full amount of the MAXIMUM AVAILABILITY or any lesser sum.
2.8 REVOLVING LOAN. Subject to their respective COMMITMENTS in the REVOLVING LOAN , BANKS agree to lend $10,000,000.00 to BORROWER pursuant to this facility. ADMINISTRATIVE AGENT will credit proceeds of this revolving loan ("REVOLVING LOAN") to BORROWER's deposit account with ACCOUNTS BANK, bearing number 110226509.
2.8.1 Subject to the terms hereof and their respective COMMITMENTS, BANKS will lend BORROWER, from time to time until the LOAN TERMINATION DATE, such sums as BORROWER may request by reasonable same day notice to ADMINISTRATIVE AGENT, received by ADMINISTRATIVE AGENT not later than 11:00 A.M. of such day, but which shall not exceed in the aggregate principal amount at any one time outstanding, the lesser of (i) $10,000,000.00 or (ii) the BORROWING BASE (the "REVOLVING LOAN COMMITMENT"). BORROWER may borrow, repay without penalty or premium and reborrow hereunder, from the date of this AGREEMENT until the LOAN TERMINATION DATE, either the full amount of the REVOLVING LOAN COMMITMENT or any lesser sum. It is the intention of the parties that the outstanding balance of the REVOLVING LOAN shall not exceed the BORROWING BASE, as required in Section 6.1.9, and if at any time said balance exceeds the BORROWING BASE, BORROWER shall forthwith pay ADMINISTRATIVE AGENT for application to the REVOLVING LOAN sufficient funds to reduce the balance of the REVOLVING LOAN until it is in compliance with this requirement.
2.9 THE REVOLVING NOTES. The REVOLVING LOAN COMMITMENT shall be evidenced by REVOLVING NOTES having stated maturity on the LOAN TERMINATION DATE applicable thereto, substantially in the form attached hereto as Exhibit E.
2.10 INTEREST ON THE REVOLVING NOTES. Prior to maturity and subject to the incentive pricing provisions contained in Section 2.15 of this AGREEMENT, interest on the principal balance outstanding on the REVOLVING NOTES shall accrue at a rate equal to the one month LIBOR RATE plus 310 hundred basis points, as more particularly set forth in the REVOLVING NOTES. The interest rate on the REVOLVING NOTES shall initially be set two (2) EURODOLLAR BUSINESS DAYS prior to the date of the REVOLVING NOTES, and shall adjust on the 8th day of each month thereafter. After the applicable LOAN TERMINATION DATE, whether by acceleration or otherwise, interest shall accrue on the REVOLVING NOTES at a rate equal to the one month LIBOR RATE plus nine hundred ten (910) basis points.
2.11 LETTERS OF CREDIT. FNBO will issue its letters of credit at BORROWER's request, on BORROWER's account, pursuant to FNBO's customary policies and with its standardized documents, in amounts outstanding at no time exceeding $1,000,000.00 in the aggregate.
2.12 Payments and Prepayments. All principal, interest and fees due under the OBLIGATIONS and the LOAN DOCUMENTS shall be paid in immediately available funds as contracted in this AGREEMENT and no later than the payment due dates set forth in the applicable NOTES (and with regards to fees, the due dates set forth in the periodic statements mailed to BORROWER by ADMINISTRATIVE AGENT). Should a payment come due on a day other than a BANKING DAY, then the payment shall be made no later than the next BANKING DAY and interest shall continue to accrue during the extended period.
On the occasion of any prepayment of the CONSTRUCTION NOTES or all TERM NOTES in full as a result of refinancing with a lender other than FNBO, BORROWER will pay to ADMINISTRATIVE AGENT, for the account of the BANKS in accordance with their respective COMMITMENTS, a prepayment fee calculated as follows: If the prepayment occurs during the construction of the PROJECT or within the first two (2) years of the TERM LOANS, a fee of one (1%) percent of the original amount or exposure of the LOANS.
In the event that BORROWER pre-pays all of the FIXED RATE NOTES or VARIABLE RATE NOTES, where the rate is fixed in excess of one month, and except as to such payments as required by this AGREEMENT, BORROWER shall pay ADMINISTRATIVE AGENT a breakage fee sufficient to make BANKS whole for any expenses actually incurred by BANKS and/or ADMINISTRATIVE AGENT related to breaking fixed interest rates, which ADMINISTRATIVE AGENT shall apportion among the BANKS in accordance with their respective expenses actually incurred; provided, however, no payment of EXCESS CASH FLOW shall be the cause of a payment to ADMINISTRATIVE AGENT for interest rate breakage fees or otherwise result in any prepayment fee.
2.13 Fees. BORROWER shall pay to ADMINISTRATIVE AGENT the fees and other amounts described and provided for in that certain fee letter of even date with this AGREEMENT between
BORROWER and ADMINISTRATIVE AGENT (as it may be amended or modified and in effect from time to time, the “FEE LETTER”) in accordance with the terms of the FEE LETTER.
BORROWER agrees to pay ADMINISTRATIVE AGENT for the account of BANKS in proportion to their respective COMMITMENTS in the REVOLVING LOAN an unused commitment fee equal to 35 basis points of the average unused portion of the REVOLVING LOAN COMMITMENT, calculated and payable on a quarterly basis in arrears; provided, however, the unused commitment fees on same shall not begin accruing or be payable by BORROWER until the CONSTRUCTION LOAN TERMINATION DATE. BORROWER shall pay ADMINISTRATIVE AGENT commitment fees equal to two percent (2%) per annum of issued and outstanding Letters of Credit issued at BORROWER’s request and on BORROWER’s account with such fee payable quarterly, together with such other fees as are consistent with FNBO’s then current International Trade Services Fee Schedule.
2.14 Appraisal. ADMINISTRATIVE AGENT will obtain, at BORROWER's expense, an appraisal of the PROJECT and PROPERTY providing values obtained by use of the cost approach, the income approach and the replacement cost approach. If such appraisal shows that the outstanding CONSTRUCTION LOAN amount at that time exceeds the value of the PROJECT and PROPERTY as determined by the appraisal, using the replacement cost approach, then BORROWER shall, within thirty (30) days of notice by ADMINISTRATIVE AGENT and without penalty or premium, pay the difference between the outstanding CONSTRUCTION LOAN amount and the appraised value amount of the PROJECT and PROPERTY as determined by such appraisal, and no further advances shall be made on the CONSTRUCTION LOAN thereafter until such time as the appraised value of the PROJECT and PROPERTY exceeds the CONSTRUCTION LOAN amount.
2.15 Incentive Pricing. The interest rate applicable to the REVOLVING LOAN, VARIABLE RATE NOTES and the LONG TERM REVOLVING LOAN is subject to reduction commencing six months subsequent to CONSTRUCTION LOAN TERMINATION DATE, based on the most recent interim financial statements delivered by or on behalf of BORROWER to ADMINISTRATIVE AGENT. In the event that BORROWER maintains the following ratios, measured quarterly, the interest rate will be reduced accordingly:
| If INDEBTEDNESS to | |||
| NET WORTH is: | Interest rate will be: | ||
| Greater than or equal to 1.25 : 1.00 | LIBOR RATE plus 295 basis points | ||
| Less than 1.25 : 1.00, but greater than or equal | LIBOR RATE plus 280 basis points | ||
| to 1.00 : 1.00 | |||
| Less than 1.00 : 1.00, but greater than 0.75 : | LIBOR RATE plus 275 basis points | ||
| 1.00 | |||
| Less than 0.75 : 1.00 | LIBOR RATE plus 265 basis points |
SECTION 3 Disbursement Procedures.
3.1 Submission of DRAW REQUESTS. BORROWER has submitted to ADMINISTRATIVE AGENT, and BANKS have approved, the TOTAL PROJECT COST STATEMENT. Whenever BORROWER desires a disbursement under the CONSTRUCTION LOAN, which shall be no more often than three (3) times a month, unless ADMINISTRATIVE AGENT agrees otherwise, BORROWER shall submit to ADMINISTRATIVE AGENT a DRAW REQUEST, duly executed on behalf of BORROWER setting forth the information requested therein. Each DRAW REQUEST shall be delivered to ADMINISTRATIVE AGENT at least ten (10) days before the date the disbursement is desired. Upon receipt of each DRAW REQUEST, ADMINISTRATIVE AGENT shall promptly notify BANKS of the amount each BANK is required to fund of such DRAW REQUEST. Not later than 11:00 a.m. (Omaha, Nebraska time) on the applicable payment date each BANK will make available to ADMINISTRATIVE AGENT in immediately available funds an amount equal to such BANK's pro rata share based on such BANK's COMMITMENT of the amount to be advanced to BORROWER pursuant to such DRAW REQUEST. The failure of any BANK to fund its COMMITMENTS shall not relieve any other BANK from funding its COMMITMENTS (it being understood however that no BANK shall be responsible for the failure of any other BANK to fund its COMMITMENTS). Unless the ADMINISTRATIVE AGENT shall have been notified by any BANK prior to a proposed funding date of any advance on any LOAN that such BANK will not make available to the ADMINISTRATIVE AGENT its portion of the borrowing proposed to be made on such date, the ADMINISTRATIVE AGENT shall assume that such BANK has made such amounts available to the ADMINISTRATIVE AGENT on such date and the ADMINISTRATIVE AGENT in its sole discretion may, in reliance upon such assumption, (but shall not be obligated to) make available to BORROWER a corresponding amount. If such corresponding amount is not in fact made available to the ADMINISTRATIVE AGENT by such BANK and the ADMINISTRATIVE AGENT has made such amount available to BORROWER, the ADMINISTRATIVE AGENT shall be entitled to recover such corresponding amount on demand from such DEFAULTING BANK and, if such DEFAULTING BANK pays such amount (together with the interest noted below), then the amount so paid shall constitute such DEFAULTING BANK’s loan included in such borrowing. If such DEFAULTING BANK does not pay such corresponding amount forthwith upon the ADMINISTRATIVE AGENT’s demand, the ADMINISTRATIVE AGENT shall be entitled to recover from such DEFAULTING BANK interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the ADMINISTRATIVE AGENT to BORROWER to the date such corresponding amount is recovered by the ADMINISTRATIVE AGENT, at an interest rate per annum equal to the greater of the federal funds rate determined by the ADMINISTRATIVE AGENT and a rate determined by the ADMINISTRATIVE AGENT in accordance with banking industry rules on interbank compensation. Nothing herein shall be deemed to relieve any BANK from its obligation to fulfill its Commitments hereunder or be deemed to be a release or waiver of any other right or remedy the ADMINISTRATIVE AGENT and/or BORROWER may have at law or in equity for a DEFAULTING BANK’S. failure to fund its COMMITMENT.
3.2 Amount of DRAW REQUEST. Each DRAW REQUEST shall be limited to amounts equal to (i) the total of costs actually incurred and paid or owing by BORROWER to the date of such DRAW REQUEST for work performed or materials incorporated in the PROJECT as described in the PLANS, plus (ii) the cost of materials and equipment not incorporated in the PROJECT, but
delivered to and suitably stored at the PROJECT site, plus (iii) prepayments for equipment when prepayment is required by the manufacturer or supplier or, with ADMINISTRATIVE AGENT’s prior written approval, when such prepayment results in a material financial benefit to BORROWER; plus (iv) any other hard or soft costs which are consistent with the TOTAL PROJECT COST STATEMENT approved by ADMINISTRATIVE AGENT, as modified or supplemented by any CONSTRUCTION VARIANCE REPORT approved by ADMINISTRATIVE AGENT, for which a disbursement under the CONSTRUCTION LOAN is available as demonstrated in the SOURCES AND USES OF FUNDS; less, (v) prior disbursements for such costs and from the CONSTRUCTION LOAN or BORROWER's WORKING CAPITAL for such costs. Notwithstanding anything herein to the contrary, no disbursements for materials stored at the PROJECT site will be made by ADMINISTRATIVE AGENT unless BORROWER shall advise ADMINISTRATIVE AGENT of its intention to store materials prior to their delivery, and provide suitable security for such storage. No advances on the CONSTRUCTION LOAN may be repaid and re-advanced.
3.3 Other Documents. At the time of submission of each DRAW REQUEST, BORROWER shall submit or cause to be submitted to ADMINISTRATIVE AGENT the following:
3.3.1. A written lien waiver from the DESIGN-BUILDER or other general contractor and each SUBCONTRACTOR for work done and materials supplied by it which were paid for pursuant to the next preceding DRAW REQUEST with copies of all invoices supporting the DRAW REQUEST.
3.3.2. A document from BORROWER and DESIGN-BUILDER or other general contractor or SUBCONTRACTOR (as applicable), and if applicable, the INDEPENDENT INSPECTOR requesting and/or approving payment of the relevant DRAW REQUEST.
3.3.3. Such other supporting evidence as may be reasonably requested by ADMINISTRATIVE AGENT to substantiate all payments which are to be made out of the relevant DRAW REQUEST and/or to substantiate all payments then made with respect to the PROJECT.
3.3.4. Subject to the provisions of Section 3.4 below, if BORROWER desires to reallocate funds from one budget category to another or modify, amend or supplement the TOTAL PROJECT COST STATEMENT, then BORROWER shall submit to ADMINISTRATIVE AGENT for ADMINISTRATIVE AGENT’s approval a CONSTRUCTION VARIANCE REPORT showing the details of such reallocation, modification, amendment or supplement. ADMINISTRATIVE AGENT may approve or disapprove of such CONSTRUCTION VARIANCE REPORT in ADMINISTRATIVE AGENT’s discretion, but ADMINISTRATIVE AGENT’s approval shall not be unreasonably withheld.
3.4 Cost Over Runs. BORROWER agrees that all cost over runs on the PROJECT shall be paid solely by BORROWER and that BORROWER shall deliver additional funds to ADMINISTRATIVE AGENT in accordance with Section 3.6 of this AGREEMENT to pay any cash required to fund cost over runs on the PROJECT. Notwithstanding the foregoing, BORROWER shall be entitled to apply
any previously achieved savings in any completed category of the TOTAL PROJECT COST STATEMENT to pay for any such cost over runs. In addition, BORROWER may from time to time request that the contingency fund line item in the TOTAL PROJECT COST STATEMENT be reallocated to pay needed costs of the PROJECT. Such requests shall be subject to ADMINISTRATIVE AGENT’s written approval in its reasonable discretion, which shall not be unreasonably withheld. Notwithstanding the foregoing, BORROWER shall be entitled to advances from the contingency fund line item in the TOTAL PROJECT COST STATEMENT so long as at all times there are sufficient funds remaining from all sources identified in the SOURCES AND USES OF FUNDS to complete the construction of the PROJECT in accordance with the PLANS in the discretion of ADMINISTRATIVE AGENT.
3.5 Making the Disbursements. If on the date a DRAW REQUEST is received by ADMINISTRATIVE AGENT, BORROWER has performed all of its agreements and complied with all requirements therefore to be performed or complied with hereunder including satisfaction of all applicable conditions precedent contained in Section 4 of this AGREEMENT and all of the BANKS have funded their pro rata share of such DRAW REQUEST based on their respective COMMITMENTS, and, if required by ADMINISTRATIVE AGENT, ADMINISTRATIVE AGENT has received a current report from the INDEPENDENT INSPECTOR documenting material compliance with the PLANS for those portions of the PROJECT indicated as completed in the DRAW REQUEST and otherwise confirming the acceptability of the PROJECT work represented by the DRAW REQUEST, ADMINISTRATIVE AGENT shall pay to the ESCROW COMPANY (as defined in the DISBURSING AGREEMENT) for disbursement to BORROWER in accordance with the DISBURSING AGREEMENT the amount of the requested disbursement; provided, however, that a DEFAULT BANK'S failure to fund its COMMITMENT amount of such DRAW REQUEST shall not relieve any other BANK from its obligation to fund its COMMITMENT amount of such DRAW REQUEST, an ADMINISTRATIVE AGENT will pay to the ESCROW COMPANY the amount actually funded by the BANKS with respect to such DRAW REQUEST and WILL NOT withhold funding due to a DEFAULTING BANK'S failure to fund its share of such DRAW REQUST. Each disbursement disbursed to BORROWER under the CONSTRUCTION LOAN shall bear interest at the rate provided in the CONSTRUCTION NOTES evidencing the disbursement from the date such disbursement is so disbursed to BORROWER or deposited into BORROWER's account.
3.6 Deposit of Funds by BORROWER. If the ADMINISTRATIVE AGENT or INDEPENDENT INSPECTOR shall at any time in good faith determine that the undisbursed amount of the CONSTRUCTION LOAN is less than the amount required to pay all cash required to pay costs and expenses of any kind which reasonably may be anticipated in connection with the completion of the PROJECT after application of all funds received from BORROWER's equity and shall thereupon send written notice thereof to BORROWER specifying the amount required to be deposited by BORROWER with the ADMINISTRATIVE AGENT to provide sufficient funds to complete the PROJECT, BORROWER agrees that it will, within forty-five (45) calendar days of receipt of any such notice, deposit with the ADMINISTRATIVE AGENT, the amount of funds specified in ADMINISTRATIVE AGENT's notice. BORROWER agrees that any such funds deposited with ADMINISTRATIVE AGENT may be disbursed before any further disbursement of
CONSTRUCTION LOAN proceeds from ADMINISTRATIVE AGENT, to pay any and all costs and expenses of any kind in connection with completion of the PROJECT.
3.7 Disbursements Without Receipt of DRAW REQUEST. Notwithstanding anything herein to the contrary, ADMINISTRATIVE AGENT shall have the irrevocable right at any time and from time to time to apply funds which it agrees to disburse hereunder to pay interest on the CONSTRUCTION LOAN as and when such interest becomes due, and to pay any and all of the expenses of ADMINISTRATIVE AGENT related to the PROJECT and the CONSTRUCTION LOAN, all without receipt of a DRAW REQUEST.
3.8 Miscellaneous Procedures. ADMINISTRATIVE AGENT may establish additional procedures regarding disbursements as are reasonable to assure the proceeds of the CONSTRUCTION LOAN are paid only to those persons and entities entitled to the same, and that the liens securing the OBLIGATIONS are in all cases first and paramount liens on the PROPERTY.
3.9 Appointment of INDEPENDENT INSPECTOR. No DRAW REQUEST shall be honored after commencement of construction unless BORROWER has acknowledged the appointment of an INDEPENDENT INSPECTOR.
SECTION 4 Conditions of Lending.
4.1 Conditions Precedent to the Initial Disbursement. The obligation of BANKS to make the initial disbursement under the CONSTRUCTION LOAN is subject to the condition precedent, unless waived by the ADMINISTRATIVE AGENT, that BORROWER shall be in compliance with the conditions set forth in Section 4.2 of this AGREEMENT and to the further condition precedent that, unless waived by ADMINISTRATIVE AGENT in writing in the POST-CLOSING LETTER (as defined below in Section 8.13), ADMINISTRATIVE AGENT shall have received on or before the CLOSING all of the following, each dated (unless otherwise indicated) the day of CLOSING, in form and substance satisfactory to ADMINISTRATIVE AGENT:
4.1.1 This AGREEMENT, and the CONSTRUCTION NOTES, duly executed on behalf of BORROWER and delivered to ADMINISTRATIVE AGENT.
4.1.2 The MORTGAGE duly executed on behalf of BORROWER and in form acceptable for recording in Ford County, Illinois.
4.1.3 The FEE LETTER duly executed by BORROWER and delivered to ADMINISTRATIVE AGENT.
4.1.4 The SECURITY AGREEMENT, duly executed on behalf of BORROWER and delivered to ADMINISTRATIVE AGENT.
4.1.5 A financing statement or statements sufficient when filed to perfect the security interests granted under the MORTGAGE, the SECURITY AGREEMENT, and the ASSIGNMENT OF CONSTRUCTION CONTRACT, to the extent such security interests
are capable of being perfected by filing, and a deposit account control agreement in form and substance acceptable to the ACCOUNTS BANK to perfect the ACCOUNTS BANK’s security interest in any deposit accounts maintained by BORROWER with financial institutions other than the ACCOUNTS BANK and a securities control agreement to perfect any investment property held by a financial intermediary.
4.1.6 A copy of the PLANS, with the PLANS prepared by FAGEN ENGINEERING certified by FAGEN ENGINEERING, DESIGN-BUILDER and BORROWER, and a copy of the plans for a dewatering system which addresses shallow groundwater at the PROPERTY to the satisfaction of ADMINISTRATIVE AGENT and the INSPECTING ARCHITECT.
4.1.7 The ASSIGNMENT OF CONSTRUCTION CONTRACT, duly executed by BORROWER and consented to by the DESIGN-BUILDER and a copy of the CONSTRUCTION CONTRACT, together with the General Conditions of Contract referred to therein, if any, and an assignment of the general construction contract for the administration building and railroad spur consented to by the applicable general contractor and a copy of such general contracts.
4.1.8 A TOTAL PROJECT COST STATEMENT of the PROJECT duly executed by BORROWER, setting forth the anticipated total cost of the PROJECT's completion, and a CONSTRUCTION COST STATEMENT duly executed by the DESIGN-BUILDER, setting forth its anticipated construction costs of the PROJECT.
4.1.9 An ALTA/ACSM Land Title Survey prepared in accordance with the current accuracy standards jointly adopted by ALTA (American Land Title Association), ACSM (American Congress on Surveying and Mapping) and NSPS (National Society of Professional Surveyors) together with optional survey requirements #2 (vicinity map showing the property surveyed in reference to nearby highway(s) or major street intersections); #6 (identify setbacks); #7 (identify exterior dimensions of all existing and proposed buildings “As-Built”, including square footage of exterior footprint of all buildings, gross floor area of all buildings); and #11 (location of utilities). The survey shall show the location of all easements and encroachments onto or from the PROPERTY that are visible on the PROPERTY, known to the surveyor preparing the survey or of record, identifying easements of record by recording data. Such surveyor shall certify there are no easements or encroachments upon the PROPERTY except as shown on the survey.
4.1.10 An as built appraisal based upon the PLANS to be performed by Natwick Associates Appraisal Services which shows the as-completed value of the PROPERTY and PROJECT addressed to and otherwise acceptable to ADMINISTRATIVE AGENT.
4.1.11 A title binder, issued by First American Title Insurance Company (the "TITLE COMPANY") at BORROWER's expense, constituting a commitment by the TITLE COMPANY to issue a mortgagee's title policy in favor of COLLATERAL AGENT as mortgagee under the MORTGAGE and an owner’s title policy to BORROWER if applicable, that will be free from all standard exceptions, including mechanics' liens and all
other exceptions not previously approved by AGENT and that will insure the MORTGAGE to be a valid first lien on the PROPERTY. Such loan policy shall include additional rider coverage as may be reasonably requested by AGENT, including, without limitation, the following ALTA endorsement forms:
| ALTA Endorsement Form 3.1 | Zoning-Completed Structure | ||
| ALTA Endorsement Form 6 | Variable Rate Mortgage | ||
| ALTA Endorsement Form 8.1 | Environmental Protection | ||
| ALTA Endorsement Form 9 | Restrictions, Encroachments, Minerals | ||
| Usury | |||
| ALTA Pending Disbursement Endorsement | Mechanic’s Lien Coverage | ||
| ALTA Endorsement Form 14 | Future Advance | ||
| ALTA Endorsement Form 19 | Contiguity | ||
| ALTA Endorsement Form 21 | Creditor’s Rights |
4.1.12 A soil report on the PROPERTY certified by a registered engineer including structural design recommendations in form and substance satisfactory to ADMINISTRATIVE AGENT. Such report shall include soil borings and geo-technical analyses.
4.1.13 A Phase I Environmental Report of the PROPERTY, as well as any subsequent Environmental Site Assessments issued prior to CLOSING, and such other environmental testing and due diligence as may be reasonably required by ADMINISTRATIVE AGENT, all in form and content satisfactory to ADMINISTRATIVE AGENT and establishing the environmental condition of the PROPERTY as satisfactory to ADMINISTRATIVE AGENT.
4.1.14 An assignment of any License Agreements with ICM, INC., and ICM, INC.’s consent to any such assignment.
4.1.15 Copies of all PERMITS from the applicable regulatory agencies from whom a permit or license is required as of the then current stage of the PROJECT.
4.1.16 Copies of documents from the appropriate state, federal, city or county authority having jurisdiction over the PROPERTY and the PROJECT that provide to the reasonable satisfaction of ADMINISTRATIVE AGENT that the PROJECT when constructed in accordance with the PLANS will comply in all material respects with all applicable ordinances, zoning, subdivision, platting, environmental and land use requirements, without special variance or exception, and such other evidence as ADMINISTRATIVE AGENT shall reasonably request to establish that the PROJECT and the contemplated use thereof are permitted by and comply in all material respects with all applicable use or other restrictions and requirements in prior conveyances, zoning ordinances, environmental laws and regulations, water shed district regulations and all other applicable laws or regulations, and governmental authorities having jurisdiction over the PROJECT.
4.1.17 Copies of certificates of insurance demonstrating the types, levels, deductibles, endorsements and other coverage parameter issues to the satisfaction of ADMINISTRATIVE AGENT for builder's risk insurance, commercial general liability, an umbrella policy, business automobile liability insurance, environmental liability insurance, worker's compensation insurance, and permanent all risk property insurance thirty days prior to completion of construction, all as required under Section 6.3 of this AGREEMENT, with all such insurance in full force and effect and approved by ADMINISTRATIVE AGENT, in the exercise of its reasonable discretion, and naming ADMINISTRATIVE AGENT as an additional insured and loss payee together with appropriate flood insurance, if the PROPERTY is in a flood hazard area. Notwithstanding the foregoing, BORROWER is not required to obtain worker's compensation insurance until required by applicable law. In addition, BORROWER shall provide to ADMINISTRATIVE AGENT proof of insurance for business interruption/extra expense coverage for six months of operating expenses, and also directors/officers errors and omissions coverage in a minimum amount of $5,000,000.00.
4.1.18 A signed opinion of counsel for BORROWER, addressed to AGENT but for the benefit of and reliance upon by the BANKS, in form and substance acceptable to AGENT and AGENT’s counsel.
4.1.19 A Certificate of Authority or Secretary’s Certificate executed by such person or persons authorized by BORROWER's organizational documents and/or agreements to do so, certifying the incumbency and signatures of the officers or other persons authorized to execute the LOAN DOCUMENTS to which it is a party, and authorizing the execution of the LOAN DOCUMENTS to which it is a party and performance in accordance with their terms.
4.1.20 A recently certified copy of BORROWER's Amended and Restated Operating Agreement, and any amendments thereto.
4.1.21 A recently certified copy of BORROWER's Articles of Organization and any amendments thereto.
4.1.22 A certificate of good standing for BORROWER from the office of the Illinois Secretary of State.
4.1.23 Proof of injection of equity capital into BORROWER of no less than $66,000,000.00 including any grant funds actually received and any funds actually received from tax increment financing or TIF programs.
4.1.24 A copy of any MARKETING AND RISK MANAGEMENT CONTRACTS, together with assignments in favor of BANK and consents thereto in form satisfactory to COLLATERAL AGENT, as well as control agreements reasonably requested by COLLATERAL AGENT, in form reasonably acceptable to COLLATERAL AGENT.
4.1.25 A copy of any existing contracts for BORROWER's natural gas, electricity, water service and grain procurement and assignments of such contracts along with the consent of BORROWER’s vendors under such contracts.
4.1.26 Evidence satisfactory to ADMINISTRATIVE AGENT that BORROWER has acquired marketable fee simple title to the PROPERTY subject only to the Permitted Exceptions identified in the MORTGAGE and the WATER EASEMENTS.
4.1.27 Documentation of the SWAP CONTRACTS in form satisfactory to ADMINISTRATIVE AGENT.
4.1.28 Copies of executed Water Line Easements, consents and approvals from all applicable parties and governmental authorities in recordable form and otherwise satisfactory to ADMINISTRATIVE AGENT providing for the construction and maintenance of a water main extending from the PROPERTY to the site of Borrower's well and water treatment facility, to provide water service to the PROJECT (the foregoing easements are collectively referred to in this Agreement as the "WATER EASEMENTS"). In addition, Borrower shall comply with the terms set forth in the POST CLOSING LETTER with respect to the WATER EASEMENTS and other matters relating to the foregoing water main.
4.1.29 The obligations and INDEBTEDNESS of BORROWER secured by the liens described in Section 6.4.1(ii) below and such liens described in Section 6.4.1(ii) shall be subordinated to the OBLIGATIONS and collateral securing the OBLIGATIONS pursuant to a Subordination Agreement executed by the holder of the INDEBTEDNESS described in Section 6.4.1(ii) in favor of AGENT, with such Subordination Agreement being in form and substance acceptable to AGENT. In addition, it is a condition precedent to the initial disbursement on the CONSTRUCTION LOAN or an advance on any LOAN that the liens described in Section 6.4.1(ii) be terminated and released, and the Junior Creditor's liens on the Subordinate Collateral (as such terms are defined in the Subordination Agreement) be terminated and release.
4.1.30 Norfolk Southern Railway Company ("NSR") and Bloomer Connecting Shippers Railway Co. ("BLOOMERS") shall have entered into a switching agreement as contemplated in that certain Memorandum of Understanding between NSR and BLOOMERS dated on or about August 31, 2007, which gives BORROWER access to rail service, with such switching agreement in form and substance and rail access acceptable to the ADMINISTRATIVE AGENT.
4.1.31 The POST CLOSING LETTER duly executed by BORROWER and ADMINISTRATIVE AGENT detailing BORROWER's post-closing obligations
4.1.32 A grant of access from the City of Gibson City, Illinois to the railway line which is the subject of that certain Rail Access Easement dated January 26, 2005, recorded as Document No. 231815 in the Ford County Illinois Real Estate Records.
4.2 Conditions Precedent to All Disbursements on the CONSTRUCTION LOAN. The obligation of BANKS to make any advances under the CONSTRUCTION LOAN (including the initial disbursement) is subject to the further conditions precedent that BORROWER shall remain in compliance with the conditions precedent contained in Section 4.1 of this AGREEMENT and, unless waived by ADMINISTRATIVE AGENT in writing in the POST CLOSING LETTER, ADMINISTRATIVE AGENT shall have received on or before the submission of a DRAW REQUEST for such advance all of the following in form and substance satisfactory to ADMINISTRATIVE AGENT:
4.2.1 The disbursement requirements of Section 3 of this AGREEMENT have been satisfied and the DISBURSING AGREEMENT, in form and substance acceptable to ADMINISTRATIVE AGENT, has been executed by each party thereto and delivered to ADMINISTRATIVE AGENT.
4.2.2 That the INDEPENDENT INSPECTOR, based upon on-site inspections of the PROJECT, has reported to ADMINISTRATIVE AGENT that the portion of the PROJECT completed as of the date of last inspection by the INDEPENDENT INSPECTOR has been completed in accordance with the PLANS and that the PROJECT can be completed by the CONSTRUCTION LOAN TERMINATION DATE in accordance with the PLANS for the remaining funds available for construction of the PROJECT.
4.2.3 The TITLE COMPANY shall have issued an endorsement to the loan policy of title insurance reflecting the amount of all previous advances on the CONSTRUCTION LOAN, insuring the continued priority of the MORTGAGE over mechanics’ liens and similar liens and showing no exceptions to title other than those previously approved by ADMINISTRATIVE AGENT and the TITLE COMPANY will issue an endorsement insuring the requested advance on the CONSTRUCTION LOAN upon compliance with the terms of the DISBURSING AGREEMENT.
4.2.4 Construction of the PROJECT to the date of the request for the advance has been completed in accordance with all applicable laws, rules, restrictions, regulations and PERMITS, and BORROWER has complied with all applicable PERMITS and such PERMITS remain valid and have not been challenged, terminated, revoked or restricted, or modified, altered, restated or amended without the prior written consent of ADMINISTRATIVE AGENT.
4.2.5 BORROWER has delivered to ADMINISTRATIVE AGENT a fully executed Notice to Proceed as referenced and defined in the CONSTRUCTION CONTRACT. In addition, BORROWER, DESIGN-BUILDER and each SUBCONTRACTOR have each materially complied with all of their respective obligations under the CONSTRUCTION CONTRACT and other general contracts for the construction of the railroad spur and administration building and the CONSTRUCTION CONTRACT and such other general contracts remain in full force and effect.
4.2.6 Evidence satisfactory to ADMINISTRATIVE AGENT that all then due installments of general real estate taxes, special assessments and other levies against the PROPERTY or the PROJECT have been paid in full.
4.2.7 BORROWER has expended the equity referenced in Section 4.1.23 above and any TIF and grant funds on the PROJECT in accordance with the SOURCES AND USES OF FUNDS.
4.2.8 The representations and warranties contained in Section 5 of this AGREEMENT are correct in all material respects on and as of the date of such disbursement as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date and except to the extent of changes permitted under the terms of this AGREEMENT.
4.2.9 No event has occurred and is continuing, or would result from such disbursement, which constitutes an EVENT OF DEFAULT.
4.2.10 No determination shall have been made by ADMINISTRATIVE AGENT or the INDEPENDENT INSPECTOR in the exercise of their reasonable judgment that the undisbursed amount of the CONSTRUCTION LOAN is less than the amount required to pay all costs and expenses of any kind which reasonably may be anticipated in connection with the completion of the PROJECT; or, if such a determination has been made and notice thereof sent to BORROWER in accordance with this AGREEMENT, BORROWER shall have deposited the necessary funds with ADMINISTRATIVE AGENT in accordance with the Section 3.6 of this AGREEMENT.
4.2.11 If required by ADMINISTRATIVE AGENT, ADMINISTRATIVE AGENT shall be furnished with a statement from BORROWER and the DESIGN-BUILDER or other general contractor, in form and substance satisfactory to ADMINISTRATIVE AGENT, in the exercise of its reasonable discretion, setting forth the names, addresses and amounts due or to become due, as well as the amounts previously paid, to every SUBCONTRACTOR whose charges exceed $20,000.00.
4.2.12 No PERMIT necessary for the construction of the PROJECT shall have been revoked or the issuance thereof subjected to challenge before any court or other governmental authority having or asserting jurisdiction as to the PROJECT, and the construction of the PROJECT is in compliance with applicable PERMITS.
4.2.13 The parties intend that the CONSTRUCTION LOAN is available to fund the lesser of sixty percent (60%) of the TOTAL PROJECT COST as shown in the TOTAL PROJECT COST STATEMENT, including all other approved expenses as set forth in the final version of the SOURCES AND USES OF FUNDS document furnished to BANK by BORROWER prior to CLOSING, or $100,000,000.00. No advances or disbursements under the CONSTRUCTION LOAN shall exceed such levels, unless ADMINISTRATIVE AGENT consents in writing to the same.
4.3 Conditions Precedent to the Final Disbursements. The obligation of BANKS to make the final disbursement on the CONSTRUCTION LOAN shall be subject to the condition precedent that BORROWER shall be in compliance with all conditions set forth in Sections 4.1 and 4.2 of this AGREEMENT and, further, that the following conditions shall have been satisfied or waived by ADMINISTRATIVE AGENT on or prior to the CONSTRUCTION LOAN TERMINATION DATE:
4.3.1 The PROJECT has been completed in material compliance with the PLANS and ADMINISTRATIVE AGENT shall have received a certificate of completion from the DESIGN-BUILDER, certifying that (i) work on the PROJECT has been completed in material compliance with the PLANS and all labor, services, materials and supplies used in such work have been paid for and (ii) the completed PROJECT conforms in all material respects with all applicable zoning, land use planning, building and environmental laws and regulations of the governmental authorities having jurisdiction over the PROJECT.
4.3.2 ADMINISTRATIVE AGENT has received satisfactory evidence that all work requiring inspection by municipal or other governmental authorities having jurisdiction has been duly inspected and approved by such authorities and by the rating or inspection organization, bureau, corporation or office having jurisdiction.
4.3.3 ADMINISTRATIVE AGENT shall have received a lien waiver from each SUBCONTRACTOR whose charges exceed $20,000.00 and the DESIGN-BUILDER and all other general contractors for all work done and for all materials furnished by it for the PROJECT.
4.3.4 ADMINISTRATIVE AGENT has received an itemized list from BORROWER of all material items of equipment and fixtures, which are at that time subject to BANKS' security interest.
4.3.5 BORROWER has hired a plant operations manager or general manager acceptable to ADMINISTRATIVE AGENT in the exercise of ADMINISTRATIVE AGENT’s reasonable discretion.
4.3.6 BORROWER has duly executed and delivered to ADMINISTRATIVE AGENT each TERM NOTE.
4.3.7 BORROWER shall have delivered to ADMINISTRATIVE AGENT an as-built ALTA/ACSM survey showing all improvements constructed on the LAND and otherwise meeting the requirements set out in Section 4.1.9 above.
4.3.8 Payment to ADMINISTRATIVE AGENT of all fees provided for in the FEE LETTER which have not previously been paid or are not then due under the terms of the FEE LETTER.
4.3.9 BORROWER shall have delivered to ADMINISTRATIVE AGENT a Certificate(s) of Insurance showing the coverages required under Section 6.3.4 of this Agreement.
4.4 No Waiver. The making of any disbursement under the CONSTRUCTION LOAN prior to fulfillment of any condition thereto shall not be construed as a waiver of such condition, and ADMINISTRATIVE AGENT reserves the right to require fulfillment of any and all such conditions prior to making any subsequent disbursements under the CONSTRUCTION LOAN.
SECTION 5 Representations and Warranties.
To induce BANKS to enter into this AGREEMENT, BORROWER makes the following representations and warranties and agrees that each DRAW REQUEST and each request for an advance under the REVOLVING LOAN or LONG TERM REVOLVING LOAN constitutes a reaffirmation of these representations and warranties and that such representations and warranties shall survive until all of the OBLIGATIONS are fully and finally paid:
5.1 Existence and Power. BORROWER is a limited liability company duly organized and existing under the laws of the State of Illinois. BORROWER has accomplished all necessary actions required by a limited liability company under applicable law to own the PROPERTY and construct the PROJECT, and to execute and deliver, and to perform all of its obligations under the LOAN DOCUMENTS to which it is a party. There are no outstanding subscriptions, options, warrants, calls or rights (including preemptive rights) to acquire, and no outstanding securities or instruments convertible into, EQUITY INTERESTS of BORROWER, except as set forth on Exhibit J attached hereto and incorporated herein by reference.
5.2 Authorization of Borrowing; No Conflict as to Law or Other Agreements. The execution, delivery and performance by BORROWER of the LOAN DOCUMENTS and the borrowings from time to time hereunder have been duly authorized by all necessary limited liability company actions of BORROWER and do not and will not (a) require any material consent or approval, or authorization, by any GOVERNMENTAL AUTHORITY, domestic or foreign, other than those obtained and in full force and effect, (b) violate, in any material respect, any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect having applicability to BORROWER, or violate any provision of the Articles of Organization or operating agreement or any members’ agreement or similar agreement of BORROWER, (c) result in a breach of or constitute a default beyond any applicable cure period under any indenture or loan or credit agreement or any other agreement, lease or instrument to which BORROWER is a party or by which it or its properties may be bound or affected, or (d) other than liens in favor of the COLLATERAL AGENT and the liens set forth in Section 6.4.1 below, result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature to or with any other creditor of BORROWER, in the aggregate exceeding $100,000.00, upon or with respect to any of the properties now owned or hereafter acquired by BORROWER.
5.3 Legal Agreements. The LOAN DOCUMENTS to which it is a party constitute the legal, valid and binding obligations of BORROWER enforceable against BORROWER in accordance with
their respective terms, and as to any LOAN DOCUMENTS to which BORROWER is not a party, BORROWER has no knowledge that any such LOAN DOCUMENTS do not constitute the legal, valid and binding obligations of the parties thereto, enforceable against such parties in accordance with their respective terms, except in each case (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
5.4 Licenses and Permits. BORROWER has all necessary PERMITS required for construction and operation of the PROJECT except those which are not required for the current stage of construction of the PROJECT, or which cannot be obtained until completion of the PROJECT. BORROWER will provide ADMINISTRATIVE AGENT copies of all PERMITS as they are obtained and when required by the various regulatory agencies. BORROWER will timely obtain and will retain all necessary PERMITS and licenses to operate its businesses at the PROPERTY. Other than the PERMITS, no consent, permission, order, license, approval or authorization of any GOVERNMENTAL AUTHORITY is necessary or desirable in connection with the construction or operation of the PROJECT. BORROWER has complied with and will continue to comply with all of the terms, conditions, limitations and restrictions contained in any PERMIT.
5.5 Construction of the PROJECT. The PROJECT will be constructed in material compliance with the PLANS and the applicable PERMITS; and will not encroach upon or overhang any easement or right-of-way on land not constituting part of the PROPERTY. The PROJECT, both during construction and on COMPLETION DATE, and the contemplated use thereof, will not violate in any material respect, any applicable PERMIT, zoning or use statute, ordinance, building code, rule or regulation, or any covenant or agreement of record. BORROWER agrees that it will furnish from time to time such satisfactory evidence with respect thereto as may be required by ADMINISTRATIVE AGENT.
5.6 Title to the PROPERTY. BORROWER has good and marketable fee simple title to the PROPERTY as required pursuant to Section 4.1.26 above and has maintained good and marketable fee simple title to the PROPERTY, subject to the limitations described in 4.1.11, above, and except to the extent title is affected by the matters permitted under 6.4.1, below. Except as created by the LOAN DOCUMENTS and the liens set forth in Section 6.4.1 below, there is no lien, security interest or other charge or encumbrance upon or with respect to any of the assets, properties or income of BORROWER.
5.7 Financial Condition. BORROWER has furnished to ADMINISTRATIVE AGENT its compiled cash flow projection of BORROWER for the construction period and for the first five (5) years of operations, which projections were prepared by Christianson & Associates and are dated July 10, 2006 (the "PROJECTIONS"). To the knowledge of BORROWER, the PROJECTIONS fairly present the projected financial condition of BORROWER on the dates thereof, and were prepared in GAAP format and on the basis of assumptions deemed reasonable by BORROWER. There has been no material adverse change in the operations, properties or condition (financial or otherwise) of BORROWER since the date of the PROJECTIONS and no additional borrowings have been made by BORROWER other than the borrowing contemplated hereby or approved by
ADMINISTRATIVE AGENT or INDEBTEDNESS secured by the liens set forth in Section 6.4.1 below. No certificate or statement furnished to BANKS by or on behalf of BORROWER in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained therein or herein not misleading. To the best of the knowledge of BORROWER, there is no fact or circumstance current or in the future (so far as BORROWER now foresees) which is reasonably likely to have a MATERIAL ADVERSE EFFECT which has not been set forth herein or in a certificate or statement furnished to ADMINISTRATIVE AGENT by BORROWER.
5.8 Litigation. There are no actions, suits or proceedings pending or, to the knowledge of BORROWER, threatened against or affecting BORROWER or the properties of BORROWER before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely to BORROWER, would have a MATERIAL ADVERSE EFFECT.
5.9 Taxes. BORROWER has filed all federal, state and local tax returns which to the knowledge of BORROWER are required to be filed, and BORROWER has paid or caused to be paid to the respective taxing authorities all taxes as shown on said returns or on any assessment received by it to the extent such taxes have become due except those which BORROWER is contesting in good faith and with respect to which adequate reserves have been set aside.
5.10 No Default. There is no event, which is, or with notice or the lapse of time would be, an EVENT OF DEFAULT under this AGREEMENT or any other LOAN DOCUMENT.
5.11 ERISA. BORROWER is in compliance in all material respects with the Employee Retirement Income Security Act of 1974, as amended, and has received no notice to the contrary from the Internal Revenue Service, the Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental entity or notice of any claims or pending claims under ERISA.
5.12 Environmental Matters. Except as set forth in the Phase I Environmental Report referenced in Section 4.1.13 of this AGREEMENT, BORROWER is in compliance in all material respects with all health and environmental laws applicable to BORROWER and its operations and knows of no existing conditions or circumstances that could materially interfere with such compliance in the future. Except for PERMITS that cannot be obtained until completion of the PROJECT or which are not required for the current stage of construction of the PROJECT, BORROWER has obtained all PERMITS, and approvals required by law for the operation of its business. BORROWER has not identified any "recognized environmental conditions," as that term is defined by the American Society for Testing and Materials in its standards for environmental due diligence, which could subject BORROWER to enforcement action if brought to the attention of appropriate governmental authorities.
5.13 Necessary Utilities, Etc. BORROWER has made suitable arrangements so that the PROJECT has all necessary electrical, natural gas, water, storm and sewer facilities in place for the proper construction and operation of its ethanol plant. BORROWER has made adequate provision
for all storage facilities, equipment and product supplies, including corn, as specified by its engineers for the maximum output and operation of the plant.
5.14 Securities Regulation Compliance. BORROWER has complied with all applicable federal, state and local statutes, laws, codes, regulations and ordinances applicable to the public offering and sale of securities in or of BORROWER.
SECTION 6 Additional Covenants of BORROWER.
6.1 Financial Information and Reporting. Except as otherwise stated in this AGREEMENT, all financial information provided to ADMINISTRATIVE AGENT shall be compiled using GAAP consistently applied. During the time period that any amounts are outstanding under the OBLIGATIONS or this AGREEMENT or the LOAN DOCUMENTS to which it is a party, unless ADMINISTRATIVE AGENT shall otherwise agree in writing:
6.1.1 BORROWER shall provide ADMINISTRATIVE AGENT within 120 days of BORROWER's fiscal year end, BORROWER's annual financial statements. The statements must be audited with an unqualified opinion by a certified public accountant reasonably acceptable to ADMINISTRATIVE AGENT, and must be accompanied by a certificate of such accountants stating whether, in conducting their audit, they have become aware of any EVENT OF DEFAULT, or of any event which would, after the lapse of time or the giving of notice, or both, constitute an EVENT OF DEFAULT, specifying the nature and duration of the default. Such audit statement shall be accompanied by the accountants' calculations of BORROWER's compliance with the covenants contained in Section 6.2 of this AGREEMENT as of the said fiscal year end.
6.1.2 After the CONSTRUCTION LOAN TERMINATION DATE, BORROWER will furnish to ADMINISTRATIVE AGENT within thirty (30) days after the end of each calendar month monthly internally prepared financial statements consisting of a balance sheet and income statement of BORROWER as of the end of such period, and income statements and statements of changes in cash flow for such period and year to date, prepared in accordance with GAAP, all in reasonable detail, except for the absence of financial footnotes, and calculations of the financial covenants set forth below.
6.1.3 For each quarter of each fiscal year ending after the CONSTRUCTION LOAN TERMINATION DATE, BORROWER will deliver to ADMINISTRATIVE AGENT, within thirty (30) days of each full fiscal quarter end, a certificate in form reasonably acceptable to ADMINISTRATIVE AGENT that has been signed by an authorized manager or officer of BORROWER, which: 1) certifies that the statements required by Section 6.1.1 and 6.1.2 have been accurately prepared in accordance with GAAP applied consistently (except for the absence of financial footnotes to the statements furnished under Section 6.1.2 and normal or customary year-end adjustments to the statements furnished under Section 6.1.2); 2) contains calculations of the financial covenants contained in Section 6.2 of this AGREEMENT and certifies compliance with such financial covenants, and 3) certifies that neither the authorized manager or officer nor BORROWER has knowledge of any EVENT OF DEFAULT under
this AGREEMENT or the LOAN DOCUMENTS, or of any event which would, after the lapse of time or the giving of notice, or both, constitute an event of default under this AGREEMENT or the other LOAN DOCUMENTS.
6.1.4 After CONSTRUCTION LOAN TERMINATION DATE, BORROWER will deliver to ADMINISTRATIVE AGENT each month, within thirty (30) days of each month end, a monthly Production Report, in form reasonably acceptable to ADMINISTRATIVE AGENT, reporting for such month BORROWER's Input and Output amounts and costs of Corn Usage, DDGS Output, Ethanol Output, and if applicable, CO2 Output.
6.1.5 BORROWER shall notify ADMINISTRATIVE AGENT of the existence of any EVENT OF DEFAULT promptly after such EVENT OF DEFAULT becomes known to any officer, director or general manager of BORROWER.
6.1.6 BORROWER shall authorize all federal, state and municipal authorities to furnish reports of examinations, records and other information relating to the condition and affairs of BORROWER and its ethanol plant, and any information from reports, returns, files and records by such authorities regarding BORROWER upon request to ADMINISTRATIVE AGENT.
6.1.7 BORROWER will give ADMINISTRATIVE AGENT prompt written notice of any material violation as to any environmental matter by BORROWER of which BORROWER obtains knowledge and, of the commencement of any judicial or administrative proceeding adverse to BORROWER relating to health, safety or environmental matters (i) in which an adverse determination or result could result in the revocation of or have a MATERIAL ADVERSE EFFECT on any PERMITS held by BORROWER which are material to the operations of BORROWER, and (ii) which will or threatens to impose a material liability on BORROWER to any person or party or which will require a material expenditure by BORROWER to cure any alleged problem or violation.
6.1.8 BORROWER will give prompt notice to ADMINISTRATIVE AGENT of (i) any litigation or proceeding in which it is a party if an adverse decision therein would require it to pay more than $100,000.00 or deliver assets the value of which exceeds such sum (whether or not the claim is considered to be covered by insurance); and (ii) the institution of any other suit or proceeding involving it that is reasonably likely to have a MATERIALLY ADVERSE EFFECT.
6.1.9 BORROWER shall provide monthly BORROWING BASE certificates in form reasonably acceptable to ADMINISTRATIVE AGENT, calculating advance rates under the REVOLVING LOAN pursuant to the BORROWING BASE beginning with the certificate with respect to the fourth month following CONSTRUCTION LOAN TERMINATION DATE or at the time of any request for an advance on the REVOLVING LOAN.
6.1.10 BORROWER shall provide to ADMINISTRATIVE AGENT monthly summaries of all grain hedging transactions, from the entity providing BORROWER’s grain hedging
account(s), and from any entity providing BORROWER with an ethanol or natural gas hedging account(s), monthly summaries of all ethanol and natural gas hedging transactions.
6.1.11 BORROWER will provide ADMINISTRATIVE AGENT with such other information as it may reasonably request.
6.1.12 BORROWER will deliver to ADMINISTRATIVE AGENT, no later than thirty- (30) days prior to its fiscal year end, its projected financial statements for the ensuing fiscal year, and a budget of BORROWER's projected capital expenditures for the ensuing fiscal year ("CAPEX BUDGET").
6.2 Financial Covenants. At all times that any amounts are outstanding under any OBLIGATION, or this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless the REQUIRED BANKS shall otherwise agree in writing, BORROWER agrees to comply with the financial covenants described below, which shall be calculated using GAAP consistently applied, except as they may be otherwise modified by the capitalized definitions:
6.2.1 BORROWER shall maintain a FIXED CHARGE COVERAGE RATIO, measured on a rolling four quarters trailing basis at the end of each full fiscal quarter, of no less than 1.25:1.0, for all periods following the CONSTRUCTION LOAN TERMINATION DATE; provided, however, the FIXED CHARGE COVERAGE RATIO shall be measured as follows for the first three fiscal quarters after the CONSTRUCTION LOAN TERMINATION DATE:
first fiscal quarter: on a rolling one quarter basis at the end of the first fiscal quarter;
second fiscal quarter: on a rolling two quarter basis at the end of the second fiscal quarter;
third fiscal quarter: on a rolling three quarter basis at the end of the third fiscal quarter.
The FIXED CHARGE COVERAGE RATIO shall be tested by ADMINISTRATIVE AGENT quarterly on a fiscal quarter basis commencing at the end of the first full fiscal quarter after the CONSTRUCTION LOAN TERMINATION DATE.
6.2.2 After the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall maintain NET WORTH of not less than $63,000,000.00 less any loss that may occur during construction. The required minimum NET WORTH of BORROWER shall be measured annually at the end of each fiscal year of BORROWER, and shall increase each fiscal year commencing on or after the CONSTRUCTION LOAN TERMINATION DATE by an amount equal to the greater of (a) $500,000.00 or (b) the amount of undistributed earnings accumulated during the fiscal year just ended (less any allowable distributions attributable to the just ended fiscal year's earnings).
6.2.3 For each fiscal year following the CONSTRUCTION LOAN TERMINATION DATE, BORROWER shall determine and report to ADMINISTRATIVE AGENT, within 120 days after the end of each such fiscal year, the amount of its EXCESS CASH FLOW for such ended fiscal year. Effective on the 120th day after the end of each fiscal year following the CONSTRUCTION LOAN TERMINATION DATE (each such day, an “EXCESS CASH FLOW REDUCTION DATE”), the MAXIMUM AVAILABILITY on the LONG TERM REVOLVING NOTE shall reduce by an amount equal to twenty percent (20%) of the EXCESS CASH FLOW for said ended fiscal year; provided, however, that, the maximum amount of such reduction for any fiscal year shall not exceed $6,000,000.00, and the maximum amount of such reduction during the term of this AGREEMENT shall not exceed $18,000,000.00 in the aggregate. If the reduction to the MAXIMUM AVAILABILITY would cause BORROWER to be in default under any provision of this AGREEMENT, the amount of reduction shall be limited to the amount of reduction in the MAXIMUM AVAILABILITY to allow BORROWER to remain in compliance with the terms of this AGREEMENT. By the payment due date on the LONG TERM REVOLVING LOAN immediately following an EXCESS CASH FLOW REDUCTION DATE or a REDUCTION DATE, BORROWER shall pay and apply to the then outstanding principal balance on the LONG TERM REVOLVING NOTE, the amount necessary to reduce the outstanding principal amount of the LONG TERM REVOLVING LOAN so that it is within the MAXIMUM AVAILABILITY applicable after each EXCESS CASH FLOW REDUCTION DATE or REDUCTION DATE, as applicable. Such reduction payments shall not release BORROWER from making any payment of principal or interest otherwise required by this AGREEMENT or the LONG TERM REVOLVING NOTES.
6.2.4 BORROWER shall maintain the following minimum WORKING CAPITAL during the periods stated below, measured continuously:
| Minimum | |||
| Period | WORKING CAPITAL | ||
| Beginning with the first day of the fourth month after the | $4,000,000.00 | ||
| CONSTRUCTION LOAN TERMINATION DATE | |||
| through the seventh month after the CONSTRUCTION | |||
| LOAN TERMINATION DATE | |||
| Beginning with the first day of the eighth month through | $7,000,000.00 | ||
| the twelfth month after the CONSTRUCTION LOAN | |||
| TERMINATION DATE | |||
| Beginning with the first day of the thirteenth month after | $10,000,000.00 | ||
| the CONSTRUCTION LOAN TERMINATION DATE | |||
| until payment in full of the TERM LOANS |
For the purpose of this covenant, the amount of any available borrowing under LONG TERM REVOLVING LOAN shall constitute an addition to WORKING CAPITAL.
6.3 Affirmative Covenants. During the time period that any amounts are outstanding under any OBLIGATION, this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless the REQUIRED BANKS shall otherwise agree in writing, BORROWER shall:
6.3.1 Diligently proceed with construction of the PROJECT in material compliance with the PLANS and in accordance in all material respects with all applicable laws and ordinances, and complete the PROJECT by the COMPLETION DATE.
6.3.2 Use the proceeds of each of the disbursements under the CONSTRUCTION LOAN solely for the purposes set forth in this AGREEMENT.
6.3.3 Use its best efforts to require the DESIGN-BUILDER, other general contractors and each SUBCONTRACTOR to comply in all material respects with all rules, regulations, ordinances and laws bearing on its conduct of work on the PROJECT.
6.3.4 Provide and maintain at all times during the process of building the PROJECT and, from time to time at the request of ADMINISTRATIVE AGENT, furnish ADMINISTRATIVE AGENT with proof of payment of premiums on:
(i) Builders' Risk completed value form insurance insuring the PROJECT (and after completion of the PROJECT, a permanent All Risk property policy of insurance with coverage equal to the replacement cost of the facility, as well as casualty/umbrella (Commercial General Liability) insurance) insuring the PROJECT, against all risks, including flood, earthquake, and mechanical and electrical breakdown including testing to the full value of the PROJECT (subject to reasonable loss deductible provisions). Notwithstanding the foregoing, the policy limits on flood and earthquake coverage may be $40,000,000.00 each. BANKS' interest shall be protected by naming AGENT as additional insured on the liability policies and loss payee on the property policies;
(ii) Casualty (Commercial General Liability) & Umbrella insurance (including products and completed operations, operations of subcontractors, and contractual liability insurance) with coverage in the amount of $2,000,000.00 in the form of either a $2,000,000.00 primary policy or a $1,000,000.00 primary policy and a $1,000,000.00 Umbrella policy. BANKS' interest shall be protected by naming AGENT as an additional named insured on all such policies;
(iii) State worker's compensation insurance, with statutory limits, and Employer's Liability coverage with coverage of no less than $500,000.00.
(iv) Business automobile liability insurance insuring all vehicles on the site, including hired and non-owned liability with coverage in the amount of $2,000,000.00 in the form of either a $2,000,000.00 primary policy or a $1,000,000.00 primary policy and a $1,000,000.00 Umbrella policy. BANKS' interest shall be protected by naming AGENT as loss payee on all such policies;
(v) Environmental coverage shall be provided for clean up and removal once the Project becomes operational (unless the condition precedent site survey and soil tests establish adverse findings which may generate the need for environmental coverage prior to operation), but only insofar as it is reasonably required by AGENT. BANKS' interest shall be protected by naming AGENT as additional insured on the liability policies and loss payee on the property policies;
(vi) Directors/Officers errors and omissions coverage of no less than $5,000,000.00.
(vii) By the COMPLETION DATE, Business Interruption and Extra Expense insurance equal to 100% of the projected revenue loss during a potential interruption of production of not less than six months.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and content satisfactory to AGENT and shall be placed with financially sound and reputable insurers. The policy of insurance referred to in clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days' advance written notice to AGENT in the event of cancellation of such policy or change affecting the coverage there under. Acceptance of insurance policies referred to above shall not bar AGENT from requiring additional insurance, which it reasonably deems necessary.
6.3.5 Assign to ADMINISTRATIVE AGENT, in form acceptable to ADMINISTRATIVE AGENT, all equipment and systems warranties relating to the PROJECT, together with all contracts for natural gas, electricity, water and other utilities, grain procurement contracts, grain and ethanol hedging contracts, as the same are obtained by BORROWER following CLOSING, together with all consents from the vendors and other parties under such contracts.
6.3.6 Maintain accurate and complete books, accounts and records pertaining to the PROPERTY and the PROJECT and its ongoing and continuing operations in form and substance reasonably satisfactory to ADMINISTRATIVE AGENT. BORROWER will permit ADMINISTRATIVE AGENT, at ADMINISTRATIVE AGENT's expense if ADMINISTRATIVE AGENT's employees make the inspection, but at BORROWER's expense if ADMINISTRATIVE AGENT contracts with third parties at reasonable expense to make the inspection and if an EVENT OF DEFAULT has occurred, to examine upon reasonable notice and in a manner that does not interfere with the PROJECT or BORROWER’s operations all books, records, contracts, plans, drawings, PERMITS, bills and statements of account pertaining to the PROJECT and to inspect upon reasonable notice all books and records pertaining to its operations and to make extracts therefrom and copies thereof.
6.3.7 Cause to be paid to the proper authorities when due all federal, state and local taxes, including taxes on the PROPERTY, required to be paid or withheld by it except those which BORROWER is contesting in good faith and with respect to which adequate reserves have been set aside.
6.3.8 Allow AGENT and AGENT’s representatives, at any time upon reasonable notice, and at its expense, to conduct such inspections of the PROJECT and BORROWER's assets, books and records as AGENT may deem necessary for the protection of BANKS' interest. Provided, however, such inspections shall occur during regular business hours, or such other time as BORROWER and AGENT may agree, shall not occur more frequently than twice per fiscal year unless there shall have occurred and be continuing an EVENT OF DEFAULT and shall not unreasonably interfere with BORROWER's business operations. Any such inspections shall be made and any certificates issued are solely for the benefit and protection of BANKS, and BORROWER shall not be entitled to rely thereon.
6.3.9 Make all repairs, renewals or replacements necessary to keep its plant, properties and equipment in good working condition.
6.3.10 Comply in all material respects with all laws and regulations applicable to its form of organization, offering, sale and regulation of securities, business, and the ownership of its property and the ownership and operation of the PROJECT on the PROPERTY.
6.3.11 Maintain and preserve all PERMITS, licenses, rights, privileges, charters, franchises and easements (including but not limited to the WATER EASEMENTS) that it are required to hold to construct and operate the PROJECT and comply with the terms, conditions, limitations and restrictions contained in such PERMITS, licenses rights, privileges, charters, franchises and easements (including but not limited to the WATER EASEMENTS).
6.3.12 Observe and comply with all laws, rules, regulations and orders of any government or government agency relating to health, safety, pollution, hazardous materials or other environmental matters to the extent non-compliance could result in a material liability or otherwise have a Material Adverse Effect on BORROWER or the operation of the PROJECT.
6.3.13 Maintain primary banking accounts (including those accounts containing BORROWER's equity capital) with the ACCOUNTS BANK, other than as otherwise agreed by ADMINISTRATIVE AGENT. AGENT agrees that BORROWER's payroll and other non-primary accounts may be maintained at local financial institutions on the conditions that, (i) if required by AGENT, BORROWER, AGENT and such local financial institution enter into a control agreement to perfect AGENT's security interest in such accounts, (ii) that deposits in such accounts do not exceed at any time $250,000.00 and (iii) that BORROWER provide AGENT with copies of the monthly statements relating to such deposit accounts.
6.3.14 BORROWER shall execute and deliver to ADMINISTRATIVE AGENT no later than 90 days following CLOSING such SWAP CONTRACTS as ADMINISTRATIVE AGENT shall require, in form satisfactory to ADMINISTRATIVE AGENT.
6.4 Negative Covenants. During the time period that any amounts are outstanding under any OBLIGATION, or this AGREEMENT or the LOAN DOCUMENTS to which BORROWER is a party, unless the REQUIRED BANKS shall otherwise agree in writing, BORROWER shall not:
6.4.1 Permit any security interest or mortgage or lien on the PROPERTY or PROJECT or other real or personal property BORROWER owns now or in the future, or assign any interest that it may have in any assets or subordinate any rights that it may have in any assets now or in the future, except: (i) liens, assignments, or subordinations in favor of AGENT; (ii) that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated June 18, 2007 encumbering the Mortgaged Property as defined therein executed by BORROWR in favor of Farmers Energy One Earth, LLC recorded in the real estate records of Ford County, Illinois on June 29, 2007, as document reference number 239266 and the Fixture Financing Statement related thereto executed by BORROWER and filed on June 29, 2007 as Document No. 239263; that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated June 13, 2007 encumbering the Mortgaged Property as defined therein executed by BORROWER in favor of Farmers Energy One Earth, LLC recorded in the real estate records of Ford County, Illinois on June 29, 2007 as document reference number 239267 and the Fixture Financing Statement related thereto executed by BORROWER and filed on June 29, 2007 as Document No. 239264; that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated June 13, 2007 encumbering the Mortgaged Property as defined there executed by BORROWER in favor of Framers Energy One Earth, LLC recorded in the real estate records of Ford County, Illinois on June 29, 2007 as Document reference number 239268, with a portion of the Mortgaged Property released pursuant to that certain Partial Release of Real Estate Mortgage dated as of August 3, 2007 recorded in the real estate records of Ford County, Illinois as document reference number 239639 and the Fixture Financing Statement related thereto executed by BORROWER and filed on June 29, 2007 as Document No. 239265; that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated August 3, 2007 encumbering the Mortgaged Property as defined therein executed by BORROWER in favor of Farmers Energy One Earth, LLC recorded in the real estate records of Ford County, Illinois on August 13, 2007 as document reference number 239637 and the Fixture Financing Statement related thereto executed by BORROWER and filed on August 13, 2007 as Document No. 239638; that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated August 3, 2007 encumbering the Mortgaged Property as defined therein executed by BORROWER in favor of Farmers Energy One Earth, LLC recorded in the real estate records of Ford County, Illinois on August 21, 2007 as document reference number 239710 and the Fixture Financing Statement related thereto executed by BORROWER and filed on August 21, 2007 as Document No. 239711; that certain Security Agreement dated June 13, 2007 encumbering the Collateral defined therein executed by BORROWER in favor of Farmers Energy One Earth, LLC; that certain UCC-1 Financing Statement filed on June
18, 2007 with the Illinois Secretary of State as Filing No. 12213719; that certain Conditional Assignment of Purchase Agreement dated June 13, 2007 executed by BORROWER in favor of Farmers Energy One Earth, LLC collaterally assigning the Construction Contract to Farmers Energy One Earth, LLC; and that certain Assignment of Permits dated June 13, 2007 executed by BORROWER in favor of Farmers Energy One Earth, LLC; (iii) liens, assignments, or subordinations outstanding on the date of this AGREEMENT and disclosed in advance to AGENT in writing and approved by AGENT; (iv) liens for taxes or assessments or other governmental charges not delinquent or which BORROWER is contesting in good faith and for which, if required under GAAP or by ADMINISTRATIVE AGENT, BORROWER has reserved against such taxes, assessments or governmental charges in an amount reasonably satisfactory to ADMINISTRATIVE AGENT; (v) liens which secure purchase money indebtedness allowed under this AGREEMENT; (vi) liens, pledges, or deposits under workers' compensation, unemployment insurance, Social Security, or similar legislation, but only if any such lien is being contested by BORROWER in good faith by appropriate proceedings which prevent foreclosure and has established reserves which ADMINISTRATIVE AGENT reasonably deems sufficient to satisfy such lien in the event of an adverse determination; and (vii) liens created in favor of a hedging account entity and described in the control agreements to which such hedging account entity, BORROWER and AGENT are party.
6.4.2 Agree or consent to any material changes in the PLANS, any material changes in the terms and provisions of the CONSTRUCTION CONTRACT or, to any one change order in an amount exceeding $250,000.00, or all change orders when combined exceeding $1,000,000.00, or any material change to any other contract identified in Section 4 of this AGREEMENT.
6.4.3 Incorporate in the PROJECT any materials, fixtures or property that are subject to the claims of any other person, whether pursuant to conditional sales contract, security agreement, lease, mortgage, except as permitted under Section 6.4.1.
6.4.4 Lease, sell, transfer, convey, assign, or otherwise transfer all or any material part of the interest of BORROWER in the PROJECT or the PROPERTY.
6.4.5 Make any changes in BORROWER’S general manager for the PROJECT without the prior written consent of ADMINISTRATIVE AGENT, which consent shall not be unreasonably withheld.
6.4.6 Engage in any line of business materially different from that presently engaged in by BORROWER.
6.4.7 Make any change to its organizational structure as a limited liability company.
6.4.8 Make any material changes in its accounting procedures for tax or other purposes.
6.4.9 Incur any INDEBTEDNESS except: (1) debt arising under this AGREEMENT or another agreement with AGENT (including, but not limited to, SWAP CONTRACTS and documentation relating to letters of credit); (ii) unsecured trade credit incurred in the ordinary course of business; (iii) indebtedness in existence on the date of this AGREEMENT and disclosed in advance to ADMINISTRATIVE AGENT in writing and approved by ADMINISTRATIVE AGENT, and (iv) indebtedness set forth on Schedule 6.4.9, attached hereto and by this reference made a part hereof, if any. BORROWER shall not borrow other than pursuant to this AGREEMENT or as otherwise permitted hereunder, without permission of ADMINISTRATIVE AGENT. Provided, however, ADMINISTRATIVE AGENT consents to BORROWER in the ordinary course of its business, borrowing up to $100,000.00 each year, without further permission from ADMINISTRATIVE AGENT.
6.4.10 Consolidate, or merge or pool or syndicate or otherwise combine with any other entity, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any entity directly or indirectly controlling or affiliated with or controlled by BORROWER, or any other entity, or to any partner or employee of BORROWER, or of any such entity.
6.4.11 After completion of the PROJECT, make, or commit to make, capital expenditures (including the total amount of any capital leases, but excluding ADMINISTRATIVE AGENT approved plant construction) in an aggregate amount exceeding $1,000,000.00 in any single fiscal year, nor capital expenditures not included in a ADMINISTRATIVE AGENT approved CAPEX BUDGET.
6.4.12 Make or pay, without the prior written consent of ADMINISTRATIVE AGENT, which written consent will not be unreasonably withheld, in and for any fiscal year, distributions to members or shareholders of BORROWER in excess of the TAX DISTRIBUTIONS permitted below and distributions permitted below based on BORROWER’s previous fiscal year's net income.
(i) TAX DISTRIBUTIONS. So long as no EVENT OF DEFAULT has occurred and is continuing, BORROWER may make TAX DISTRIBUTIONS to its members within thirty (30) days prior to each June 15, September 15 and January 15, each in an amount equal to one fourth (¼) of the estimated income tax liability to be incurred for such year by BORROWER’s members by reason of their membership interest in BORROWER, based upon an assumed 42% combined federal and state income tax rate for each member and based upon BORROWER’s most recent financial information available.
(ii) Final TAX DISTRIBUTION. BORROWER may make a final TAX DISTRIBUTION to its members within thirty (30) days prior to each April 15, so long as (a) no EVENT OF DEFAULT has occurred and is continuing or would occur after giving effect to the payment of such final TAX DISTRIBUTION described herein and the distributions permitted in Subsection 6.4.12(iii) below, (b) BORROWER has delivered to ADMINISTRATIVE AGENT BORROWER's annual
audited financial statements and compliance statements as required in this AGREEMENT and (c) BORROWER is in compliance with all of the financial and other covenants provided for in this AGREEMENT and will remain so after giving effect to the payment of such final TAX DISTRIBUTION described herein and the distributions permitted in Subsection 6.4.12(iii) below, in an amount not to exceed the positive difference between the total tax liability of BORROWER’s members incurred by reason of their membership interest in BORROWER and the amounts previously distributed to such members pursuant to Subsection 6.4.12(i) above, provided, that if the difference between the total tax liability of BORROWER’s members incurred by reason of their membership interest in BORROWER and the amounts previously distributed to such members pursuant to Subsection 6.4.12(i) above is zero or a negative number, then no final TAX DISTRIBUTION may be made by BORROWER under this Subsection 6.4.12(ii) .
(iii) Net Income Distributions. So long as (a) no EVENT OF DEFAULT has occurred and is continuing or would occur after giving effect to the payment of the distribution described in this Subsection 6.4.12(iii) and the year ending quarter TAX DISTRIBUTION described in Subsection 6.4.12(ii) above, (b) BORROWER has delivered to ADMINISTRATIVE AGENT BORROWER's annual audited financial statements and compliance statements as required in this AGREEMENT and (c) BORROWER is in compliance with all of the financial and other covenants provided for in this AGREEMENT and will remain so after giving effect to the payment of such distribution described in this Subsection 6.4.12(iii) and the year ending quarter TAX DISTRIBUTION described Subsection 6.4.12(ii) above, BORROWER may make one distribution of net income each fiscal year based upon the net income of BORROWER for the immediately preceding fiscal year in an amount not to exceed the percentage of BORROWER’s net income for such preceding fiscal year determined as follows:
| If BORROWER's ratio of INDEBTEDNESS | Allowable | ||
| to NET WORTH is: | distributions up to: | ||
| Greater than or equal to 1.00 : 1.00 | 45% | ||
| Less than 1.00 : 1.00 but greater than 0.75 : 1.00 | 55% | ||
| Less than 0.75 : 1.00 | 65% |
Notwithstanding anything contained in this Agreement to the contrary, in no event shall any distributions, including, but not limited to TAX DISTRIBUTIONS, be made prior to BORROWER’s full payment and satisfaction of all of BORROWER’s OBLIGATIONS which have accrued to the date of payment of such distributions (including TAX DISTRIBUTIONS). Further, in no event shall any distributions, except for TAX DISTRIBUTIONS permitted in this AGREEMENT, be made prior to BORROWER’s full payment of all of BORROWER’s OBLIGATIONS which have accrued to the date of payment of such distributions, including the application of EXCESS CASH FLOW as
provided for in Section 6.2.3 of this Agreement above. In no event shall total distributions for any fiscal year, including but not limited to TAX DISTRIBUTIONS, exceed the amounts calculated in the table above.
6.4.13 Assume, guarantee, endorse or otherwise becoming contingently liable for any obligations of any other person, except for those guaranties outstanding at the time of execution of this AGREEMENT and disclosed to ADMINISTRATIVE AGENT in writing.
6.4.14 Make sales to or purchases from any affiliate of BORROWER or extend credit or make payments for services rendered by any affiliate of BORROWER, unless such sales or purchases are made or such services are rendered in the ordinary course of business and on terms and conditions at least as favorable to BORROWER as the terms and conditions which would apply in a similar transaction with a person or party not an affiliate of BORROWER.
6.4.15 Sell or dispose of all or substantially all its assets.
6.4.16 Redeem, purchase, or retire any of its membership interests or grant or issue, or purchase or retire for any consideration, any warrant, right or option pertaining thereto, or permit any redemption, retirement, or other acquisition by BORROWER of the ownership of the outstanding membership interests of BORROWER; provided however, that BORROWER may redeem, purchase or retire its membership interest with funds that otherwise would be available for distribution pursuant to Section 6.4.12(iii) above.
6.4.17 Acquire or receive more grain from Alliance Grain’s (“Alliance”) West Gibson City Elevator, ID No. 053803AAH than is permitted under the Construction Permit issued by the Illinois Environmental Protection Agency as ID No. 053010AAW on May 7, 2007 (the “Air Permit”).
6.4.18 Alliance shall not increase its equity interest or acquire voting or management control over BORROWER, and BORROWER and Alliance shall remain independent companies as required in the Air Permit.
SECTION 7 EVENTS OF DEFAULT, Rights and Remedies.
| 7.1 | EVENTS OF DEFAULT. Each of the following shall be an EVENT OF DEFAULT and give ADMINISTRATIVE AGENT the right to exercise its remedies under this AGREEMENT: |
| 7.1.1 BORROWER shall fail to pay when due any OBLIGATIONS or any other installment of principal or interest or fee payable to BANKS. | |
| 7.1.2 BORROWER shall fail to provide reports and other information and otherwise comply with the provisions of Section 6.1 above when due. | |
| 7.1.3 BORROWER shall fail to observe or perform any other obligation to be observed or performed by it hereunder (other than BORROWER’s obligations under Sections 4, 6.1, 6.2, | |
6.3.2, 6.3.4, 6.3.8, 6.3.13 and Section 6.4 hereof) or under any of the LOAN DOCUMENTS.
7.1.4 BORROWER shall fail to pay any INDEBTEDNESS in an aggregate principal amount in excess of $100,000.00 due any third party, and such failure shall continue beyond any applicable grace period, or BORROWER shall default under any material agreement binding BORROWER, and such default shall continue beyond any applicable grace period.
7.1.5 Any financial statement, representation, warranty, or certificate made or furnished by or with respect to BORROWER to AGENT in connection with this AGREEMENT, or as an inducement to BANKS to enter into this AGREEMENT, or in any separate statement or document to be delivered to AGENT hereunder, shall be materially false, incorrect, or incomplete when made.
7.1.6 BORROWER shall admit its inability to pay its debts as they mature or shall make an assignment for the benefit of itself or any of its creditors.
7.1.7 Proceedings in bankruptcy, or for reorganization of BORROWER, or for the readjustment of debt under the Bankruptcy Code, as amended, or any part thereof, or under any other laws, whether state or federal, for the relief of debtors, now or hereafter existing, shall be commenced against or by BORROWER and, except with respect to any such proceedings instituted by BORROWER, shall not be discharged within sixty (60) days of their commencement.
7.1.8 A receiver or trustee shall be appointed for BORROWER or for any substantial part of its respective assets, or any proceedings shall be instituted for the dissolution or the full or partial liquidation of BORROWER, and except with respect to any such appointments requested or instituted by BORROWER, such receiver or trustee shall not be discharged within sixty (60) days of his appointment, and except with respect to any such proceedings instituted by BORROWER, such proceedings shall not be discharged within sixty (60) days of their commencement, or BORROWER shall discontinue business or materially change the nature of its business.
7.1.9 BORROWER shall suffer final judgments for payment of money aggregating in excess of $100,000.00 which are not covered, without reservation, by insurance and shall not discharge the same within a period of thirty (30) days unless, pending further proceedings, execution has not been commenced or, if commenced, has been effectively stayed.
7.1.10 A judgment creditor of BORROWER shall obtain possession of any of BANKS' collateral by any means, including (without implied limitation) attachment, levy, distraint, replevin, or self-help which is reasonably likely to have a MATERIAL ADVERSE EFFECT.
7.1.11 The construction of the PROJECT is abandoned or shall be unreasonably delayed or be discontinued for a period of thirty (30) consecutive calendar days, in each instance for reasons other than acts of God, fire, storm, adverse weather, strikes, blackouts, labor
difficulties, riots, inability to obtain materials, equipment or labor, governmental restrictions or any similar cause not subject to BORROWER's control and other than a change in the DESIGN-BUILDER as provided in Section 7.1.14.
7.1.12 BORROWER at any time prior to the completion of the PROJECT, shall delay construction or suffer construction to be delayed for any period of time, for any reason whatsoever, so that the completion of the PROJECT in accordance with the PLANS approved by ADMINISTRATIVE AGENT cannot be accomplished, in the reasonable judgment of ADMINISTRATIVE AGENT, by the COMPLETION DATE.
7.1.13 The PROJECT is materially damaged or destroyed by fire or other casualty and the loss, in the reasonable judgment of ADMINISTRATIVE AGENT, is not adequately covered by insurance actually collected or in the process of collection.
7.1.14 Fagen, Inc. shall cease to be the DESIGN-BUILDER and BORROWER has not replaced the DESIGN-BUILDER, within thirty (30) days following the termination of the same with the replacement contractor to the satisfaction of ADMINISTRATIVE AGENT, which ADMINISTRATIVE AGENT approval shall not be unreasonably withheld, but which approval may include a bonding requirement in the reasonable exercise of ADMINISTRATIVE AGENT's judgment.
7.1.15 Any entity described in any MARKETING AND RISK MANAGEMENT CONTRACTS approved by ADMINISTRATIVE AGENT ceases to be the marketing agent of BORROWER, and BORROWER has not within thirty (30) days following termination of any of the foregoing obtained a replacement to ADMINISTRATIVE AGENT's satisfaction, which ADMINISTRATIVE AGENT approval will not be unreasonably withheld.
7.1.16 BORROWER shall fail to maintain a general manager acceptable to ADMINISTRATIVE AGENT, or if BORROWER has not within thirty (30) days following a termination of any such person obtained a replacement to ADMINISTRATIVE AGENT’s satisfaction, which ADMINISTRATIVE AGENT approval shall not unreasonably be withheld.
7.1.17 The filing of any mechanics’, construction, materialmens’ or similar liens upon the PROPERTY and/or against the PROJECT which are not released or bonded against (in a manner satisfactory to ADMINISTRATIVE AGENT) for a period in excess of ten (10) BANKING DAYS after the filing date of such lien, unless such lien is being contested by BORROWER in good faith by appropriate proceedings which prevent foreclosure and has established reserves which ADMINISTRATIVE AGENT reasonably deems sufficient to satisfy such lien in the event of an adverse determination.
7.1.18 If BORROWER defaults under, or suffers a default to exist under, or fails to comply with, keep or perform its obligations under, the CONSTRUCTION CONTRACT or any other contract relating to the PROJECT to which BORROWER is a party, or the CONSTRUCTION CONTRACT or any such other contract relating to the PROJECT is
terminated without the prior written consent of ADMINISTRATIVE AGENT, which consent shall not be unreasonably withheld.
7.1.19 The occurrence of a material deviation or change in the PLANS approved by ADMINISTRATIVE AGENT without the prior written approval of ADMINISTRATIVE AGENT, which approval shall not be unreasonably withheld.
7.1.20 BORROWER fails to timely comply with its obligations contained in that certain post-closing letter agreement of even date herewith between AGENT and BORROWER relating to BORROWER’s post-closing obligations.
7.1.21 BORROWER defaults under any contract for the provision of electricity, natural gas, water or water service or any other utility, or any such contract is terminated, revoked, altered, amended or restated without the prior written consent of ADMINISTRATIVE AGENT.
7.1.22 BORROWER defaults under any grain procurement contract or any such contract is terminated, revoked, altered, amended or restated without the prior written consent of ADMINISTRATIVE AGENT.
7.1.23 BORROWER fails to timely make any payment required after an EXCESS CASH FLOW REDUCTION DATE or REDUCTION DATE to bring the outstanding principal balance of the LONG TERM REVOLVING NOTE within the MAXIMUM AVAILABILITY after each such EXCESS CASH FLOW REDUCTION DATE or REDUCTION DATE.
7.1.24 The WATER EASEMENTS terminate, are removed or BORROWER's rights thereunder are materially adversely affected.
7.1.25 BORROWER fails to comply with the terms, conditions, limitations and restrictions contained in any PERMIT, or any PERMIT is revoked.
7.2 Rights and Remedies. If an EVENT OF DEFAULT shall have occurred and be continuing, ADMINISTRATIVE AGENT may refrain from making any further disbursements hereunder (but ADMINISTRATIVE AGENT may make disbursements after the occurrence of such an EVENT OF DEFAULT without thereby waiving its rights and remedies hereunder), and ADMINISTRATIVE AGENT may exercise any or all of the following rights and remedies:
7.2.1 ADMINISTRATIVE AGENT may declare the OBLIGATIONS to be terminated, whereupon the same shall forthwith terminate, and ADMINISTRATIVE AGENT shall have no further obligation to make any advances thereunder.
7.2.2 ADMINISTRATIVE AGENT may declare the entire unpaid principal amount of the OBLIGATIONS then outstanding, all interest accrued and unpaid thereon, and all other amounts payable under this AGREEMENT to be forthwith due and payable, whereupon the
OBLIGATIONS, all such accrued interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by BORROWER.
7.2.3 AGENT may exercise and enforce its rights and remedies under any or all of the LOAN DOCUMENTS.
7.2.4 AGENT may enter upon the PROPERTY, if allowed under applicable law, and take possession thereof, together with the PROJECT then in the course of construction, and proceed either in its own name or in the name of BORROWER, as the attorney-in-fact of BORROWER (which authority is coupled with an interest and is irrevocable by BORROWER) to complete or cause to be completed the PROJECT, at the cost and expense of BORROWER. If ADMINISTRATIVE AGENT elects to complete or cause to be completed the PROJECT, it may do so according to the PLANS or according to such changes, alterations or modifications in and to the PLANS as ADMINISTRATIVE AGENT may reasonably deem appropriate; and ADMINISTRATIVE AGENT may enforce or cancel all contracts let by BORROWER relating to construction of the PROJECT, and/or let other contracts which in ADMINISTRATIVE AGENT's reasonable judgment, ADMINISTRATIVE AGENT deems advisable; and BORROWER shall forthwith turn over and duly assign to ADMINISTRATIVE AGENT, as ADMINISTRATIVE AGENT may from time to time require, contracts not already assigned to AGENT relating to construction of the PROJECT, blueprints, shop drawings, bonds, building permits, bills and statements of accounts pertaining to the PROJECT, whether paid or not, and any other instruments or records in the possession of BORROWER pertaining to the PROJECT. In addition, ADMINISTRATIVE AGENT and its contractors and agents may utilize all or any part of the labor, materials, equipment, fixtures and articles of personal property contracted for by BORROWER, whether or not previously incorporated into the PROJECT, and BANKS may pay, settle or compromise all bills or claims which may become a lien against the PROPERTY and/or the PROJECT, or any portion thereof. BORROWER shall be liable under this AGREEMENT to pay to ADMINISTRATIVE AGENT, on demand, any amount or amounts reasonably expended by BANKS in so completing the PROJECT, together with any reasonable costs, charges, or expenses incident thereto or resulting therefrom, all of which shall be secured by the LOAN DOCUMENTS. In the event that a proceeding is instituted against BORROWER for recovery and reimbursement of any moneys expended by BANKS in connection with the completion of the PROJECT, a statement of such expenditures, verified by the affidavit of an officer of ADMINISTRATIVE AGENT, shall be prima facie evidence of the amounts so expended and of the appropriateness and advisability of such expenditures; and the burden of proving to the contrary shall be upon BORROWER. ADMINISTRATIVE AGENT shall have the right to apply any funds which it agrees to disburse hereunder to bring about the completion of the PROJECT and to pay the costs thereof; and if such money so agreed to be disbursed is insufficient, in the sole judgment of ADMINISTRATIVE AGENT, to complete the PROJECT, BORROWER agrees to promptly deliver and pay to ADMINISTRATIVE AGENT such sum or sums of money as ADMINISTRATIVE AGENT may from time to time demand for the purpose of completing the PROJECT or of paying any liability, charge or expense which may have been incurred or
assumed by ADMINISTRATIVE AGENT under or in performance of this AGREEMENT, or for the purpose of completing the PROJECT. It is expressly understood and agreed that in no event shall BANKS be obligated, or liable in any way to complete the PROJECT or to pay for the costs of construction thereof beyond the amount of the CONSTRUCTION LOAN.
7.2.5 The ADMINISTRATIVE AGENT is hereby authorized at any time, and from time to time, without written notice to BORROWER (any such notice being expressly waived by each BORROWER) and without regard to the source of any funds, to instruct AGENT to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the BANKS to or for the credit or the account of BORROWER against any and all of the obligations of BORROWER now or hereafter existing under this AGREEMENT or the LOANS or any other LOAN DOCUMENT, irrespective of whether or not the ADMINISTRATIVE AGENT shall have made any demand under this AGREEMENT or such other LOAN DOCUMENT and although such obligations may be unmatured. The ADMINISTRATIVE AGENT agrees promptly to notify BORROWER after any such setoff and the application thereof, however, the parties hereto agree that the failure to give such notice shall in no way affect the validity of such setoff and the application. The rights of the AGENT and the BANKS under this Section 7.2.5 are in addition to other rights and remedies the AGENT and the BANKS may have.
7.2.6 AGENT may exercise any other rights and remedies available to it by law, in equity or agreement.
SECTION 8 Miscellaneous.
8.1 Inspections. In addition to the inspections provided for under Section 6.3.8 of this AGREEMENT above, BORROWER, DESIGN-BUILDER and the other general contractors on the PROJECT shall be responsible for making inspections of the PROJECT during the course of construction and shall determine to their own satisfaction that the work done or materials supplied by the DESIGN-BUILDER or any general contractor or SUBCONTRACTOR to whom payment is to be made out of each disbursement has been properly done or supplied in accordance with the CONSTRUCTION CONTRACT. If any work done or materials supplied by the DESIGN-BUILDER or any SUBCONTRACTOR are not satisfactory to BORROWER and/or its DESIGN-BUILDER and the same is not remedied within fifteen (15) days of the discovery thereof, BORROWER will immediately notify ADMINISTRATIVE AGENT in writing of such fact. It is expressly understood and agreed that ADMINISTRATIVE AGENT and the INDEPENDENT INSPECTOR or other party designated by AGENT may conduct such inspections of the PROJECT, subject to the limitations expressed in this AGREEMENT, as AGENT may deem necessary for the protection of BANKS' interest, and that any inspections which may be made of the PROJECT by AGENT will be made, solely for the benefit and protection of AGENT and the BANKS, and that BORROWER will not rely thereon.
8.2 Indemnification by BORROWER. BORROWER shall bear all loss, expense (including reasonable attorneys' fees) and damage in connection with, and agrees to reimburse, indemnify,
defend and hold harmless BANKS, their respective agents, servants and employees from, all claims, demands and judgments made or recovered against BANKS, their respective agents, servants and employees, because of damages, fines, fees, penalties or other charges, bodily injuries, including death at any time resulting there from, and/or because of damages to property (including loss of use) from any cause whatsoever, arising out of, incidental to, or in connection with the construction of the PROJECT, the operation of the PROJECT, permits applicable to the PROJECT (including, but not limited to, noncompliance with such permits) and other matters relating to the PROJECT, whether or not due to any act of omission or commission, including negligence of BORROWER or the DESIGN-BUILDER or of its or their employees, servants or agents, other than gross negligence or willful misconduct of BANKS or their respective agents. BORROWER's liability hereunder shall not be limited to the extent of insurance carried by or provided by BORROWER or subject to any exclusion from coverage in any insurance policy. OBLIGATIONS of BORROWER under this Section shall survive the payment of the CONSTRUCTION NOTES and the TERM NOTES. Notwithstanding the foregoing, BORROWER’s liability hereunder shall terminate at such time as a private or governmental plaintiff is barred by the applicable statute of limitations from bringing a claim for the actions giving rise to any BANK’s claim for indemnification hereunder.
8.3 No Waiver; Cumulative Remedies. No failure or delay on the part of AGENT or BORROWER in exercising any right, power or remedy under the LOAN DOCUMENTS shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy under the LOAN DOCUMENTS. The remedies provided in the LOAN DOCUMENTS are cumulative and not exclusive of any remedies provided by law or in equity.
8.4 Amendments, Etc. No amendment, modification, termination or waiver of any provision of any of the LOAN DOCUMENTS or consent to any departure by BORROWER therefrom shall be effective unless the same shall be in writing and signed by the applicable AGENT and BORROWER, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 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.
8.5 Addresses for Notices, Etc. Except as otherwise expressly provided herein, all notices, requests, demands and other communications provided for under the LOAN DOCUMENTS shall be in writing and sent by first class certified mail, return receipt requested, recognized overnight courier or telecopy (if by telecopy with a confirmation mailed within two BUSINESS DAYS thereafter), to the applicable party at its address indicated below:
| If to BORROWER: | One Earth Energy, LLC | ||
| 1306 West 8th Street | |||
| Gibson City, IL 60936-0546 | |||
| Attention: Steve Kelly | |||
| Telecopy: (217) 784-8949 | |||
| If to AGENT: | First National Bank of Omaha | ||
| 1620 Dodge St. STOP 1050 Omaha, NE 68197-1050 Attention: Fallon Savage Telecopy: 402 ###-###-#### |
or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices, requests, demands and other communications shall, when mailed, be effective when deposited in the mails or with an overnight courier, addressed as aforesaid, or, when telecopied, is effective when confirmation of receipt is received, except that notices or requests to AGENT pursuant to any of the provisions hereunder shall not be effective until received by AGENT.
8.6 Time of Essence. Time is of the essence in the performance of this AGREEMENT.8.7 Execution in Counterparts. The LOAN DOCUMENTS may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.
8.8 Binding Effect, Assignment. The LOAN DOCUMENTS to which they are parties shall be binding upon and inure to the benefit of BORROWER and BANKS and their respective successors and assigns, except that BORROWER shall not have the right to assign its rights thereunder or any interest therein without the prior written consent of ADMINISTRATIVE AGENT which consent shall not be unreasonably withheld. Each BANK is extending its COMMITMENTS in the LOANS for its own account, and no BANK may participate, subparticipate, assign or otherwise transfer any of its COMMITMENTS or interests in the LOANS without the prior written consent of ADMINISTRATIVE AGENT, which consent shall not be unreasonably withheld, and ADMINISTRATIVE AGENT shall notify BORROWER of any such participation, subparticipation, assignment or transfer.
8.9 Governing Law. The LOAN DOCUMENTS, to the extent they do not otherwise provide, shall be governed by, and construed in accordance with, the laws of the State of Nebraska, exclusive of its choice of laws principles.
8.10 Severability of Provisions. Any provision of this AGREEMENT, which is prohibited or unenforceable, shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.
8.11 Headings. Section headings in this AGREEMENT are included herein for convenience of reference only and shall not constitute a part of this AGREEMENT for any other purpose.
8.12 Integration. This AGREEMENT supersedes, replaces and terminates any prior oral offers, negotiations, understandings or agreements and any commitment letters or similar writings relating to any of the matters contemplated herein.
8.13 Post-Closing Matters. BORROWER, AGENT, and the BANKS acknowledge that the closing of the LOANS provided for herein may occur prior to the time BORROWER has delivered to AGENT all of the documents, consents and certifications required pursuant to the terms and provisions of this AGREEMENT. In the event thereof, BORROWER agrees to execute and deliver to AGENT at CLOSING a post-closing letter in form and substance acceptable to ADMINISTRATIVE AGENT (the “POST CLOSING LETTER”). BORROWER acknowledges and agrees that, notwithstanding any terms or provisions of this AGREEMENT to the contrary, AGENT and the BANKS are not, and shall not be, required to make available or fund any portion of the LOANS provided for in this AGREEMENT until each of the items, documents, consents and certifications described in the POST CLOSING LETTER have been delivered to ADMINISTRATIVE AGENT in form and content reasonably acceptable to ADMINISTRATIVE AGENT.
Section 9 AGENT
9.1 Appointment and Authority.
(a) Each of the BANKS (in its capacity as a BANK) hereby irrevocably appoints, designates and authorizes AGENT to take such action on its behalf under the provisions of this AGREEMENT and each other LOAN DOCUMENT and to exercise such powers and perform such duties as are expressly delegated to AGENT by the terms of this AGREEMENT or any other LOAN DOCUMENT, together with such actions as are reasonably incidental thereto. The provisions of this Section 9 are solely for the benefit of AGENT and the BANKS, and neither the BORROWER nor any other PERSON shall have rights as a third party beneficiary of any of such provisions.
(b) Each BANK hereby appoints FNBO as its ADMINISTRATIVE AGENT under and for purposes of each LOAN DOCUMENT. FNBO hereby accepts this appointment and agrees to act as the ADMINISTRATIVE AGENT for the BANKS in accordance with the terms of this AGREEMENT. Each BANK appoints and authorizes the ADMINISTRATIVE AGENT to act on behalf of such BANK under each LOAN DOCUMENT and, in the absence of other written instructions from the REQUIRED BANKS received from time to time by the ADMINISTRATIVE AGENT (with respect to which the ADMINISTRATIVE AGENT agrees that it will comply, except as otherwise provided in this Section 9.1 or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the ADMINISTRATIVE AGENT by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in any LOAN DOCUMENT, the ADMINISTRATIVE AGENT shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the ADMINISTRATIVE AGENT have or be deemed to have any fiduciary relationship with any BANK, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into any LOAN DOCUMENT or otherwise exist against the ADMINISTRATIVE AGENT. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this AGREEMENT or any other LOAN DOCUMENT with reference to the ADMINISTRATIVE AGENT is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(c) Each BANK (in its capacity as a BANK) hereby appoints FNBO as its COLLATERAL AGENT under and for purposes of each LOAN DOCUMENT. FNBO hereby accepts this appointment and agrees to act as the COLLATERAL AGENT for the BANKS in accordance with the terms of this AGREEMENT. Each of the BANKS hereby irrevocably appoints and authorizes the COLLATERAL AGENT to act as the agent of such BANK for purposes of acquiring, holding and enforcing any and all mortgages, deeds of trust, pledges, liens, security interests or other charges or encumbrances of any nature on collateral granted by BORROWER or other PERSON to the COLLATERAL AGENT in order to secure any of the OBLIGATIONS, together with such powers and discretion as are reasonably incidental thereto. In this connection the COLLATERAL AGENT, and any co-agents, sub-agents and attorneys-in-fact appointed by the COLLATERAL AGENT, as the case may be, pursuant to Section 9.5 for purposes of holding or enforcing any mortgages, deeds of trust, pledges, liens, security interests or other charges or encumbrances of any nature on any collateral (or any portion thereof) granted under the LOAN DOCUMENTS, or for exercising any rights and remedies thereunder at the direction of the COLLATERAL AGENT, as the case may be, shall be entitled to the benefits of all provisions of this Section 9 as if set forth in full herein with respect thereto. Notwithstanding any provision to the contrary contained elsewhere in any LOAN DOCUMENT, the COLLATERAL AGENT shall not have any duties or responsibilities, except those expressly set forth herein or in the other LOAN DOCUMENTS, nor shall the COLLATERAL AGENT have or be deemed to have any fiduciary relationship with any BANK, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into any LOAN DOCUMENT or otherwise exist against the COLLATERAL AGENT. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this AGREEMENT or any other LOAN DOCUMENT with reference to the COLLATERAL AGENT is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(d) Each BANK hereby appoints and authorizes the ACCOUNTS BANK to act as depository for the COLLATERAL AGENT, on behalf of the BANKS, and as the securities intermediary or bank with respect to any securities accounts held with the ACCOUNTS BANK for the benefit of the COLLATERAL AGENT, on behalf of the BANKS, with such powers as are expressly delegated to the ACCOUNTS BANK by the terms of this AGREEMENT, together with such other powers as are reasonably incidental thereto. The ACCOUNTS BANK hereby accepts this appointment and agrees to act as the depository for the COLLATERAL AGENT, on behalf of the BANKS, and as the securities intermediary or bank with respect to securities accounts held with the ACCOUNTS BANK, for the benefit of the COLLATERAL AGENT, on behalf of the BANKS, in accordance with the terms of this AGREEMENT. Notwithstanding any provision to the contrary contained elsewhere in any LOAN DOCUMENT, the ACCOUNTS BANK shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the ACCOUNTS BANK have or be deemed to have any fiduciary relationship with any BANK, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into any LOAN DOCUMENT or
otherwise exist against the ACCOUNTS BANK. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this AGREEMENT with reference to the ACCOUNTS BANK is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
Section 9.2 Rights as a BANK. Each Person serving as AGENT hereunder or under any other LOAN DOCUMENT shall have the same rights and powers in its capacity as a BANK as any other BANK and may exercise the same as though it were not an AGENT. Each such Person and its affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with BORROWER or affiliate thereof as if such Person were not an AGENT hereunder and without any duty to account therefor to the BANKS or any other AGENT.
Section 9.3 Exculpatory Provisions. No AGENT shall have any duties or obligations except those expressly set forth herein and in the other LOAN DOCUMENTS. Without limiting the generality of the foregoing, no AGENT shall:
(i) be subject to any fiduciary or other implied duties, regardless of whether an EVENT OF DEFAULT has occurred and is continuing;
(ii) have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other LOAN DOCUMENTS that such AGENT is required to exercise as directed in writing by the REQUIRED BANKS; provided that such AGENT shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the AGENT to liability or that is contrary to any LOAN DOCUMENT or applicable law; or
(iii) except as expressly set forth herein and in the other LOAN DOCUMENTS, have any duty to disclose, nor shall any AGENT be liable for any failure to disclose, any information relating to BORROWER or any of its affiliates that is communicated to or obtained by the PERSON serving as an AGENT or any of its affiliates in any capacity.
No AGENT shall be liable for any action taken or not taken by it (i) with the prior written consent or at the request of the REQUIRED BANKS (or such other number or percentage of the Lenders as may be necessary, or as such AGENT may believe in good faith to be necessary, under the circumstances as provided in Section 9) or (ii) in the absence of its own gross negligence or willful misconduct. Each AGENT shall be deemed not to have knowledge of any EVENT OF DEFAULT unless and until notice describing such EVENT OF DEFAULT is given to such AGENT in writing by BORROWER.
No AGENT shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this AGREEMENT or any other LOAN DOCUMENT, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence or continuance of any EVENT OF DEFAULT, (iv) the validity, enforceability, effectiveness or genuineness of this AGREEMENT, any other LOAN DOCUMENT or any other agreement, instrument or document, or the perfection or priority of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature created or purported to be created by any LOAN DOCUMENT, or (v) the satisfaction of any condition set forth in this AGREEMENT or any other LOAN DOCUMENT, other than to confirm receipt of items expressly required to be delivered to any such AGENT.
9.4 Reliance by AGENT. Each AGENT shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper PERSON. Each AGENT also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper PERSON, and shall not incur any liability for relying thereon. Each AGENT may consult with legal counsel (who may be counsel for any of the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
9.5 Delegation of Duties. Each AGENT may perform any and all of its duties and exercise any and all of its rights and powers hereunder or under any other LOAN DOCUMENT by or through any one or more sub-agents appointed by such AGENT. Each AGENT and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective affiliates or subsidiaries. The exculpatory provisions of this Section 9 shall apply to any such subagent and to the affiliates and subsidiaries of such AGENT and any such sub-agent, and shall apply to their respective activities in connection with their acting as AGENT.
9.6 Resignation or Removal of AGENT. Any AGENT may resign from the performance of all of its functions and duties hereunder and/or under the other LOAN DOCUMENTS at any time by giving thirty (30) days’ prior notice to BORROWER and the BANKS. Any AGENT also may be removed at any time by the REQUIRED BANKS upon thirty (30) days’ prior notice. Such resignation or removal shall take effect upon the appointment of a successor AGENT, in accordance with this Section 9.6.
Upon any notice of resignation by any AGENT or upon the removal of any AGENT by the REQUIRED BANKS, the BANKS shall, so long as no EVENT OF DEFAULT has occurred and is continuing, with the consent (not to be unreasonably withheld or delayed) of BORROWER, appoint a successor to such AGENT hereunder and under each other LOAN DOCUMENT who shall be a commercial bank having a combined capital and surplus of at least Two Hundred Fifty Million and No/100ths Dollars ($250,000,000.00) . If no successor AGENT has been appointed by the BANKS
within thirty (30) days after the date such notice of resignation was given by such AGENT or the REQUIRED BANKS elected to remove such AGENT, any BANK may petition any court of competent jurisdiction for the appointment of a successor AGENT. Such court may thereupon, after such notice, if any, as it may deem proper, appoint a successor AGENT, as applicable, who shall serve as such AGENT, hereunder and under each other LOAN DOCUMENT until such time, if any, as the BANKS appoint a successor AGENT, as provided above. Upon the acceptance of a successor’s appointment as an AGENT hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed AGENT, and the retiring or removed AGENT shall be discharged from all of its duties and obligations hereunder or under the other LOAN DOCUMENTS. After the retirement or removal of any AGENT hereunder and under the other LOAN DOCUMENTS, the provisions of this Section 9 shall continue in effect for the benefit of such retiring or removed AGENT, its sub-agents and their respective affiliates and subsidiaries in respect of any actions taken or omitted to be taken by any of them while the retiring AGENT was acting as AGENT.
If a retiring or removed AGENT is the ACCOUNTS BANK, such ACCOUNTS BANK will promptly transfer all of the deposit accounts and security accounts of BORROWER relating to this AGREEMENT to the possession or control of the successor ACCOUNTS BANK, and the ACCOUNTS BANK and BORROWER will execute and deliver such notices, instructions and assignments as may be reasonably necessary or desirable to transfer the rights of the ACCOUNTS BANK with respect thereto to the successor ACCOUNTS BANK.
If a retiring or removed AGENT is the COLLATERAL AGENT, such COLLATERAL AGENT will promptly transfer any collateral for the LOANS in the possession or control of such COLLATERAL AGENT to the successor COLLATERAL AGENT, and the COLLATERAL AGENT and BORROWER will execute and deliver such notices, instructions and assignments as may be reasonably necessary or desirable to transfer the rights of the COLLATERAL AGENT with respect to such collateral property for the LOANS to the successor COLLATERAL AGENT.
9.7 No Amendment to Duties of AGENT Without Consent. No AGENT shall be bound by any waiver, amendment, supplement or modification of this AGREEMENT or any other LOAN DOCUMENT that affects its rights or duties hereunder or thereunder unless such AGENT shall have given its prior written consent, in its capacity as AGENT, thereto.
9.8 Non-Reliance on AGENT and Other BANKS. Each BANK acknowledges that it has, independently and without reliance upon any AGENT or any other BANK or any of their affiliates or subsidiaries and based on such documents and information as it has deemed appropriate, made its own credit analysis of the PROJECT and BORROWER and has made its own decision to enter into this AGREEMENT and make the LOANS. Each BANK also acknowledges that it will, independently and without reliance upon any AGENT or any other BANK or any of their affiliates or subsidiaries and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this AGREEMENT, any other LOAN DOCUMENT or any related agreement or any document furnished hereunder or thereunder.
9.9 COLLATERAL AGENT May File Proofs of Claim. In case of the pendency of any bankruptcy or insolvency proceeding relative to BORROWER (including any event described in Sections 7.1.6, 7.1.7 or 7.1.8 of this AGREEMENT, the COLLATERAL AGENT (irrespective of whether the principal of any LOAN shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the COLLATERAL AGENT or any other BANK shall have made any demand on BORROWER) shall be entitled and empowered, but shall not be obligated to, by intervention in such proceeding or otherwise:
9.9.1 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the LOANS and all other OBLIGATIONS that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the BANKS (including any claim for the reasonable compensation, expenses, disbursements and advances of the BANKS and their respective agents and counsel and all other amounts due the BANKS under this AGREEMENT or the other LOAN DOCUMENTS) allowed in such judicial proceeding;
9.9.2 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and
9.9.3 any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each BANK to make such payments to the COLLATERAL AGENT and, in the event that the COLLATERAL AGENT may consent to the making of such payments directly to the BANKS, to pay to the COLLATERAL AGENT any amount due for the reasonable compensation, expenses, disbursements and advances of the AGENT and their respective agents and counsel, and any other amounts due the AGENT under this AGREEMENT and the other LOAN DOCUMENTS.
9.10 Collateral Matters. The BANKS irrevocably authorize the COLLATERAL AGENT, upon the direction of the ADMINISTRATIVE AGENT, to release any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of any nature on any property granted to or held by the COLLATERAL AGENT under any LOAN DOCUMENT upon BORROWER’s full and final satisfaction of the OBLIGATIONS. Upon request by the COLLATERAL AGENT at any time, the BANKS will confirm in writing the COLLATERAL AGENT’s authority to release its interest in particular types or items of property pursuant to this Section 9.10. In each case as specified in this Section 9.10, the COLLATERAL AGENT will, at BORROWER’s expense, execute and deliver to BORROWER such documents as BORROWER may reasonably request to evidence the release of such item of collateral from the assignment and security interest granted under the LOAN DOCUMENTS in accordance with the terms of the LOANS DOCUMENTS and this Section 9.10.
Notwithstanding anything to the contrary in any LOAN DOCUMENT, the powers conferred on the COLLATERAL AGENT under the LOAN DOCUMENTS are solely to protect its interest (on behalf of the BANKS) in the collateral securing the LOANS and shall not impose any duty upon it to exercise any such powers. Except for the reasonable care of any such collateral in its possession and
the accounting for moneys actually received by it under the LOAN DOCUMENTS, the COLLATERAL AGENT shall have no duty as to any such collateral, or responsibility, for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any investment property constituting collateral, whether or not the COLLATERAL AGENT has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any such collateral. The COLLATERAL AGENT shall be deemed to have exercised reasonable care in the custody and preservation of any collateral in its possession if such collateral is accorded treatment substantially equal to that which it accords its own property.
The COLLATERAL AGENT shall not be liable for interest on any money or assets received by it. Assets held in trust by the COLLATERAL AGENT need not be segregated from other assets except to the extent required by law.
Before the COLLATERAL AGENT acts or refrains from acting, it may require a certificate of an appropriate officer of BORROWER at the expense of BORROWER. The COLLATERAL AGENT shall not be liable for any action it takes or omits to take in good faith in reliance on such officer’s certificate.
The COLLATERAL AGENT shall not be liable for any action that it takes or omits to take in good faith that it reasonably believes to be authorized or within its rights or powers under the LOAN DOCUMENTS. The COLLATERAL AGENT shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond, debenture, or other paper or document, but the COLLATERAL AGENT, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the COLLATERAL AGENT shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to BORROWER, to examine the books, records and premises of BORROWER, personally or by agent or attorney and to consult with the officers and representatives of BORROWER, including BORROWER’s accountants and attorneys.
The COLLATERAL AGENT shall be under no obligation to exercise any of the rights or powers vested in it by the LOAN DOCUMENTS at the request, order or direction of the BANKS unless such BANKS have offered to the COLLATERAL AGENT security or indemnity reasonably satisfactory to the COLLATERAL AGENT against the costs, expenses and liabilities that may be incurred by it in compliance with such request, order or direction. The COLLATERAL AGENT shall not be required to give any bond or surety in respect of the performance of its powers and duties under the LOAN DOCUMENTS.
The COLLATERAL AGENT may from time to time, at its option, perform any act that BORROWER agrees hereunder or under any LOAN DOCUMENT to perform and that BORROWER shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence of an EVENT OF DEFAULT) and the COLLATERAL AGENT may from time to time take any other action that the COLLATERAL AGENT reasonably deems necessary for the maintenance, preservation or protection of any of the collateral for the LOANS or of its security interest therein.
The COLLATERAL AGENT is authorized to endorse, in the name of BORROWER, any item, howsoever received by the COLLATERAL AGENT, representing any payment on or other proceeds of any of the collateral for the LOANS.
9.11 Indemnification. Each BANK other than AGENT jointly and severally agrees to indemnify AGENT (to the extent not reimbursed by BORROWER), ratably according to the respective COMMITMENTS of the BANKS, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against AGENT acting as AGENT in any way relating to or arising out of this AGREEMENT or any other LOAN DOCUMENT or any action taken or omitted by AGENT acting as the AGENT under this AGREEMENT or any other LOAN DOCUMENT, provided that no BANK shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from AGENT’s gross negligence or willful misconduct in connection with AGENT acting as AGENT. Without limitation of the foregoing, each BANK jointly and severally agrees to reimburse AGENT promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by AGENT in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this AGREEMENT or any other LOAN DOCUMENT to the extent that AGENT is not reimbursed for such expenses by BORROWER.
A CREDIT AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT YOU (BORROWER) AND US (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 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.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed by their respective officers thereunto duly authorized, as of the date first above written.
| ONE EARTH ENERGY, LLC | |
| By: | /s Steve Kelly |
| Title: | President |
| FIRST NATIONAL BANK OF OMAHA, in | |
| its capacity as a BANK, | |
| ADMINISTRATIVE AGENT, | |
| COLLATERAL AGENT and ACCOUNTS | |
| BANK | |
| By: | /s/ Fallon Savage |
| Fallon Savage, Commercial | |
| Loan Officer | |
EXHIBIT A
Construction Note Form
CONSTRUCTION NOTE
| Note Date: September 20, 2007 | $ | |
| Maturity Date: July 31, 2009 |
FOR VALUE RECEIVED, ONE EARTH ENERGY, LLC, an Illinois limited liability company ("BORROWER"), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA ("BANK"), at its principal office in Omaha, Nebraska or such other address as BANK or holder may designate from time to time, the principal sum of _______________________ Dollars ($_____________), or the amount shown on BANK's records to be outstanding, plus interest (calculated on the basis of actual days elapsed in a 360-day year) accruing each day on the unpaid principal balance at the annual interest rates defined below. Absent manifest error, BANK's records shall be conclusive evidence of the principal and accrued interest owing hereunder.
This CONSTRUCTION NOTE is executed pursuant to a Construction Loan Agreement ("LOAN AGREEMENT") between BORROWER and BANKS dated of even date herewith. All capitalized terms not otherwise defined in this CONSTRUCTION NOTE shall have the meanings provided in the LOAN AGREEMENT.
INTEREST ACCRUAL. Interest on the principal amount outstanding on the CONSTRUCTION LOAN shall accrue, for the period through and including the CONSTRUCTION LOAN TERMINATION DATE, at a rate equal to the three month LIBOR RATE plus three hundred ten (310) basis points from time to time until maturity, and at a rate equal to the three month LIBOR RATE plus nine hundred ten (910) basis points from time to time after maturity, whether by acceleration or otherwise. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed, and will adjust monthly as described in the LOAN AGREEMENT.
REPAYMENT TERMS. Until the CONSTRUCTION LOAN TERMINATION DATE applicable to this CONSTRUCTION NOTE, interest only shall be payable quarterly, commencing December 8, 2007. On the CONSTRUCTION LOAN TERMINATION DATE applicable to this CONSTRUCTION NOTE, all principal and accrued interest shall be due and payable. The LOAN AGREEMENT describes the TERM NOTES that may be used by BORROWER to pay this CONSTRUCTION NOTE.
PREPAYMENT. The LOAN AGREEMENT contains provisions regarding prepayment.
ADDITIONAL TERMS AND CONDITIONS. The LOAN AGREEMENT, and any amendments or substitutions, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this CONSTRUCTION NOTE by reference. BORROWER agrees to pay all costs of collection, including reasonable attorneys’ fees and legal expenses incurred by BANK if this CONSTRUCTION NOTE is not paid as provided above. This CONSTRUCTION NOTE shall be governed by the substantive laws of the State of Nebraska, exclusive of its choice of laws principles.
WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. BORROWER and any other person who signs, guarantees or endorses this CONSTRUCTION NOTE, to the extent allowed by law, hereby waives presentment, demand for payment, notice of dishonor, protest, and any notice relating to the acceleration of the maturity of this CONSTRUCTION NOTE.
[SIGNATURE PAGE FOLLOWS]
Executed as of the Note Date first above written.
| ONE EARTH ENERGY, LLC, an Illinois | |
| limited liability company | |
| By: | |
| Title: | |
EXHIBIT B
Fixed Rate Note
FIXED RATE NOTE
| Note Date: | $ | ||
| Maturity Date: |
FOR VALUE RECEIVED, ONE EARTH ENERGY, LLC, an Illinois limited liability company (“BORROWER”), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA (“AGENT”), at its principal office or such other address as AGENT or holder may designate from time to time, the principal sum of ____________________________________ Dollars ($__________), or the amount shown on AGENT's records to be outstanding, plus interest (calculated on the basis of actual days elapsed in a 360-day year) accruing each day on the unpaid principal balance at the annual interest rates defined below. Absent manifest error, AGENT's records shall be conclusive evidence of the principal and accrued interest owing hereunder.
This FIXED RATE NOTE is executed pursuant to a Construction Loan Agreement between BORROWER and BANKS dated as of September 20, 2007, (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the “AGREEMENT”). All capitalized terms not otherwise defined in this note shall have the meanings provided in the AGREEMENT.
INTEREST ACCRUAL. Interest on the principal amount outstanding shall accrue at a per annum rate equal to the three month LIBOR RATE plus 300 basis points on the Note Date referenced above and adjusting as provided for in the AGREEMENT, and at the three month LIBOR RATE plus 900 basis points from time to time after maturity, whether by acceleration or otherwise. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed.
REPAYMENT TERMS. Principal shall be due and payable in the amounts and on the dates set forth in Schedule I attached to the AGREEMENT, and incorporated herein by reference, and accrued and unpaid interest shall be due and payable in arrears on the same dates that principal installments are due. Any remaining principal balance, plus any accrued but unpaid interest, shall be fully due and payable on _______________________, if not sooner paid.
PREPAYMENT. BORROWER may prepay this FIXED RATE NOTE in full or in part at any time. Provided, however, a condition of any prepayment of all of this FIXED RATE NOTE, the VARIABLE RATE NOTE and the LONG TERM REVOLVING NOTE is that certain fees shall be paid to BANK. If such complete prepayment occurs within the first two (2) years following the CONSTRUCTION LOAN TERMINATION DATE, a fee of one percent (1%) of the original principal amount of this FIXED RATE NOTE shall be paid to BANK. In the event that BORROWER pre-pays all of this FIXED RATE NOTE and except as to such payments as are required by the AGREEMENT, BORROWER shall pay BANK a breakage fee sufficient to make BANK whole for any expenses relating to breaking fixed interest rates, which BANK shall
apportion among its participants. Any prepayment may be applied in inverse order of maturity or as BANK in its sole discretion may deem appropriate. Such prepayment shall not excuse BORROWER from making subsequent payments each quarter until the indebtedness is paid in full. No payment of EXCESS CASH FLOW shall be the cause of a payment to BANK for interest rate breakage fees or otherwise result in any prepayment fee.
ADDITIONAL TERMS AND CONDITIONS. This FIXED RATE NOTE is executed pursuant to the AGREEMENT. The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this FIXED RATE NOTE by reference.
The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this FIXED RATE NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then BANK shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of BANK, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, BANK’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT. BANK may rescind any acceleration of this FIXED RATE NOTE without in any way waiving or affecting any acceleration of this FIXED RATE NOTE in the future as a consequence of an EVENT OF DEFAULT. BANK’s acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this FIXED RATE NOTE made by BANK.
Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in collecting and/or enforcing this FIXED RATE NOTE. Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER.
WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. BORROWER and any other person who signs, guarantees or endorses this FIXED RATE NOTE, to the extent allowed by law, hereby waives presentment, demand for payment, notice of dishonor, protest, and any notice relating to the acceleration of the maturity of this FIXED RATE NOTE.
[SIGNATURE PAGE FOLLOWS]
Executed as of the Note Date first above written.
| ONE EARTH ENERGY, LLC, an Illinois | |
| limited liability company | |
| By: | |
| Title: | |
EXHIBIT C
Variable Rate Note
VARIABLE RATE NOTE
| Note Date: | $ | ||
| Maturity Date: |
FOR VALUE RECEIVED, ONE EARTH ENERGY, LLC, an Illinois limited liability company (“BORROWER”), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA (“BANK”), at its principal office or such other address as BANK or holder may designate from time to time, the principal sum of ________________ and 00/100 Dollars ($_______________), or the amount shown on BANK's records to be outstanding, plus interest (calculated on the basis of actual days elapsed in a 360-day year) accruing each day on the unpaid principal balance at the annual interest rates defined below. Absent manifest error, BANK's records shall be conclusive evidence of the principal and accrued interest owing hereunder.
This VARIABLE RATE NOTE is executed pursuant to a Construction Loan Agreement between BORROWER and BANK dated as of June ___, 2007, (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the “AGREEMENT”). All capitalized terms not otherwise defined in this note shall have the meanings provided in the AGREEMENT.
INTEREST ACCRUAL. Interest on the principal amount outstanding shall accrue based on the three month LIBOR RATE plus 310 basis points from time to time until maturity as provided for in the AGREEMENT, and at a rate equal to the three month LIBOR RATE plus 910 basis points from time to time after maturity, whether by acceleration or otherwise. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed.
INCENTIVE PRICING. The interest rate applicable to this VARIABLE RATE NOTE is subject to reduction after a date six months subsequent to the CONSTRUCTION LOAN TERMINATION DATE, as provided for in Section 2.15 of the AGREEMENT.
REPAYMENT TERMS. Interest and principal shall be due and payable at the times, in the amounts and applied in the manner provided for in Section 2.5 of the AGREEMENT. Any remaining principal balance, plus any accrued but unpaid interest, shall be fully due and payable on the Maturity Date, if not sooner paid.
PREPAYMENT. BORROWER may prepay this VARIABLE RATE NOTE in full or in part at any time; provided, however, that any prepayment fees provided for in the AGREEMENT shall be due at the time of any such prepayment. Any prepayment may be applied in inverse order of maturity or as BANK in its sole discretion may deem appropriate. Such prepayment shall not excuse BORROWER from making subsequent payments each quarter until the indebtedness is paid in full.
ADDITIONAL TERMS AND CONDITIONS. This VARIABLE RATE NOTE is executed pursuant to the AGREEMENT. The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this VARIABLE RATE NOTE by reference.
The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this VARIABLE RATE NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then BANK shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of BANK, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, BANK’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT. BANK may rescind any acceleration of this VARIABLE RATE NOTE without in any way waiving or affecting any acceleration of this VARIABLE RATE NOTE in the future as a consequence of an EVENT OF DEFAULT. BANK’s acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this VARIABLE RATE NOTE made by BANK.
Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in collecting and/or enforcing this VARIABLE RATE NOTE. Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER.
WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. BORROWER and any other person who signs, guarantees or endorses this VARIABLE RATE NOTE, to the extent allowed by law, hereby waives presentment, demand for payment, notice of dishonor, protest, and any notice relating to the acceleration of the maturity of this VARIABLE RATE NOTE.
[SIGNATURE PAGE FOLLOWS]
Executed as of the Note Date first above written.
| ONE EARTH ENERGY, LLC, an Illinois | |
| limited liability company | |
| By: | |
| Title: | |
EXHIBIT D
Long Term Revolving Note
LONG TERM REVOLVING NOTE
| Note Date: | $ | ||
| Maturity Date: |
FOR VALUE RECEIVED, ONE EARTH ENERGY, LLC, an Illinois limited liability company (“BORROWER”), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA (“BANK”), at its principal office or such other address as BANK or holder may designate from time to time, the principal sum of _____________ and 00/100 Dollars ($10,000,000.00) or the amount shown on BANK's records to be outstanding, plus interest (calculated on the basis of actual days elapsed in a 360-day year) accruing each day on the unpaid principal balance at the annual interest rates defined below. Absent manifest error, BANK's records shall be conclusive evidence of the principal and accrued interest owing hereunder.
This LONG TERM REVOLVING NOTE is executed pursuant to a Construction Loan Agreement between BORROWER and BANKS dated as of September 20, 2007, (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the “AGREEMENT”). All capitalized terms not otherwise defined in this note shall have the meanings provided in the AGREEMENT.
INTEREST ACCRUAL. Interest on the principal amount outstanding shall accrue based on the three month LIBOR RATE plus 300 basis points from time to time until maturity as adjusted as provided for in the AGREEMENT, and at a rate equal to the three month LIBOR RATE plus 900 basis points from time to time after maturity, whether by acceleration or otherwise. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed.
REVOLVING FEATURE. Subject to the MAXIMUM AVAILABILITY, BORROWER may reborrow, on a revolving basis, that principal amount repaid on this LONG TERM REVOLVING NOTE. Pursuant to this revolving loan feature BANK will lend BORROWER, from time to time until maturity of this LONG TERM REVOLVING NOTE such sums as BORROWER may request by reasonable same day notice to BANK, received by BANK not later than 11:00 A.M. on Friday, or the next BANKING DAY thereafter, each week but which shall not exceed in the aggregate principal amount at any one time outstanding, the MAXIMUM AVAILABILITY then applicable to this LONG TERM REVOLVING NOTE. BORROWER may borrow, repay and reborrow hereunder, from the date of this LONG TERM REVOLVING NOTE until the maturity of this LONG TERM REVOLVING NOTE, said amount or any lesser sum.
INCENTIVE PRICING. The interest rate applicable to this LONG TERM REVOLVING NOTE is subject to reduction after a date six months subsequent to CONSTRUCTION LOAN TERMINATION DATE, as provided for in Section 2.15 of the AGREEMENT.
REPAYMENT TERMS. Interest and principal shall be due and payable at the times, in the amounts and applied in the manner provided for in Section 2.5 of the AGREEMENT. Any remaining principal balance, plus any accrued but unpaid interest, shall be fully due and payable on the Maturity Date, if not sooner paid. On each REDUCTION DATE and EXCESS CASH FLOW REDUCTION DATE, BORROWER shall pay and apply to the then outstanding principal balance of this LONG TERM REVOLVING NOTE the amount necessary to reduce the outstanding principal balance of this LONG TERM REVOLVING NOTE so that it is within the MAXIMUM AVAILABILITY applicable on each such REDUCTION DATE and/or EXCESS CASH FLOW REDUCTION DATE.
PREPAYMENT. BORROWER may prepay this LONG TERM REVOLVING NOTE in full or in part at any time; provided, however, that any prepayment fees provided for in the AGREEMENT shall be due at the time of any such prepayment. No payment applied to this LONG TERM REVOLVING NOTE to bring the outstanding principal balance within the MAXIMUM AVAILABILITY shall be the cause of a payment to BANK for interest rate breakage fees or otherwise result in any prepayment fee.
ADDITIONAL TERMS AND CONDITIONS. This LONG TERM REVOLVING NOTE is executed pursuant to the AGREEMENT. The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this LONG TERM REVOLVING NOTE by reference.
The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this LONG TERM REVOLVING NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then BANK shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of BANK, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, BANK’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT. BANK may rescind any acceleration of this LONG TERM REVOLVING NOTE without in any way waiving or affecting any acceleration of this LONG TERM REVOLVING NOTE in the future as a consequence of an EVENT OF DEFAULT. BANK’s acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this LONG TERM REVOLVING NOTE made by BANK.
Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in collecting and/or enforcing this LONG TERM REVOLVING NOTE. Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER.
WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. BORROWER and any other person who signs, guarantees or endorses this LONG TERM REVOLVING NOTE, to the extent allowed by law, hereby waives presentment, demand for payment, notice of dishonor, protest, and any notice relating to the acceleration of the maturity of this LONG TERM REVOLVING NOTE.
[SIGNATURE PAGE FOLLOWS]
Executed as of the Note Date first above written.
| ONE EARTH ENERGY, LLC, an Illinois | |
| limited liability company | |
| By: | |
| Title: | |
EXHIBIT E
Revolving Promissory Note
REVOLVING PROMISSORY NOTE
| Omaha, Nebraska | $ | |
| Note Date: September 20, 2007 | ||
| Maturity Date: September 19, 2008 |
On or before September ____, 2008, ONE EARTH ENERGY, LLC ("BORROWER"), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA ("BANK") at any of its offices in Omaha, Nebraska the principal sum hereof, which shall be _____________ and no/100 Dollars ($_________________) or so much thereof as may have been advanced by BANK and shown on the records of BANK to be outstanding under this REVOLVING PROMISSORY NOTE and the AGREEMENT (as defined below). Interest on the principal balance from time to time outstanding will be payable at a rate equal to the one month LIBOR RATE plus three hundred ten (310) basis points from time to time until maturity as such rate will be adjusted as provided for in the AGREEMENT, and at a rate equal to the one month LIBOR RATE plus nine hundred ten (910) basis points from time to time after maturity, whether by acceleration or otherwise. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed. Interest on the REVOLVING LOAN shall be payable quarterly, in arrears.
The interest rate applicable to this REVOLVING NOTE is subject to reduction after a date six months subsequent to the CONSTRUCTION LOAN TERMINATION DATE, as provided for in Section 2.15 of the AGREEMENT.
This REVOLVING PROMISSORY NOTE is executed pursuant to that certain Construction Loan Agreement dated September 20, 2007 between BANKS and BORROWER (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the (“AGREEMENT”). The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including default and acceleration provisions, which are incorporated into this REVOLVING PROMISSORY NOTE by reference. All capitalized terms not otherwise defined herein shall have the same meanings as set forth in the AGREEMENT.
The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this REVOLVING PROMISSORY NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then BANK shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent,
and may be pursued singly, successively or together at the sole discretion of BANK, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, BANK’s waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT. BANK may rescind any acceleration of this REVOLVING PROMISSORY NOTE without in any way waiving or affecting any acceleration of this REVOLVING PROMISSORY NOTE in the future as a consequence of an EVENT OF DEFAULT. BANK’s acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this REVOLVING PROMISSORY NOTE made by BANK.
Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys’ fees and costs incurred or paid by BANK in collecting and/or enforcing this REVOLVING PROMISSORY NOTE. Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER.
All makers and endorsers hereby waive presentment, demand, protest and notice of dishonor, consent to any number of extensions and renewals for any period without notice; and consent to any substitution, exchange or release of collateral, and to the addition or releases of any other party primarily or secondarily liable.
[SIGNATURE PAGE FOLLOWS]
Executed as of the Note Date set forth above.
| ONE EARTH ENERGY, LLC, an Illinois | |
| limited liability company | |
| By: | |
| Title: | |
| FIRST NATIONAL | |
EXHIBIT F
Real Estate Description
Parcel 1:
All that part of the South 1204.28 Feet of the South Half of Section 3, Township 23 North, Range 7 East of the Third Principal Meridian, Ford County, Illinois, lying east of the Northerly Extension of the East Line of a tract of land conveyed to Ameren Energy Generating Company by Special Warranty Deed recorded September 11, 2000, as Document No. 216254 in the Ford County Recorder’s Office, and lying west of the Northerly Extension of the East Line of the West 250 Feet of the Northeast Quarter of Section 10, Township 23 North, Range 7 East of the Third Principal Meridian, situated in the City of Gibson, County of Ford and State of Illinois.
Said Parcel 1 contains 34.00 acres, more or less.
Parcel 2:
A part of the Northwest Quarter of Section 10, Township 23 North, Range 7 East of the Third Principal Meridian, Gibson City, Ford County, Illinois, more particularly described as follows: Beginning at the Northeast Corner of Lot 4 in the First Addition to Jordan Industrial Park Subdivision in the City of Gibson City, Illinois, according to the Plat recorded as Document No. 205053 in the Ford County Recorder’s Office. From said Point of Beginning, thence west 1146.34 feet along the North Line of said Lot 4 to the Northwest Corner thereof; thence north 543.85 feet along the East Right-of-Way line of Jordan Drive according to the Dedication thereof recorded as Document No. 212435 in said Recorder’s Office which forms an angle to the left of 90°00’00” with the last described course; thence east 20.00 feet along said Right-of-Way Line which forms an angle to the left of 89°39’36” with the last described course; thence north 30.00 feet along said Right-of-Way Line which forms an angle to the left of 270°20’24” with the last described course to the Southwest Corner of Parcel 4 conveyed to Ameren Energy Generating Company by Warranty Deed recorded as Document No. 235733 in said Recorder’s Office; thence east 150.65 feet along the South Line of said Parcel 4 which forms an angle to the left of 89°39’36” with the last described course to the Southeast Corner thereof; thence north 580.00 feet along the East Line of said Parcel 4 and the East Line of a Tract of Land conveyed by Special Warranty Deed recorded as Document No. 216254 in said Recorder’s Office, which lines form an angle to the left of 269°57’50” with the last described course to the Northeast Corner of said Tract, said Northeast Corner being on the North Line of the Northwest Quarter of said Section 10; thence east 979.71 feet along said North Line which forms an angle to the left of 90°02’10” with the last described course to the Northeast Corner of the Northwest Quarter of said Section 10; thence south 1147.04 feet along the East Line of the Northwest Quarter of said Section 10 which forms an angle to the left of 89°57’15; with the last described course to the Point of Beginning, situated in the County of Ford and State of Illinois, containing 28.07 acres, more or less.
Parcel 3:
Lot 4 in the First Addition to Jordan Industrial Park Subdivision in the City of Gibson, Ford County, Illinois, according to the Plat recorded as Document No. 205053 in the Ford County Recorder’s
Office excepting (Exception No. 1) therefrom the East 100 Feet of even width thereof and also excepting (Exception No. 2) the following described tract: A part of Lot 4 in the First Addition to Jordan Industrial Park Subdivision in the City of Gibson City, Ford County, Illinois according to the Plat recorded as Document No. 205053 in the Ford County Recorder’s Office, more particularly described as follows: Beginning at a point on the North Line of said Lot 4 lying 100.00 feet west of the Northeast Corner thereof, said point being the Northwest Corner of a Tract of Land conveyed to Bloomer Line Railroad according to the Deed recorded as Document No. 217701 in said Recorder’s Office. From said Point of Beginning, thence west 551.97 feet along the North Line of said Lot 4 to the point of intersection with the Northerly Extension of the West Line of Lot 3 in said First Addition; thence south 599.81 feet along said Northerly Extension which forms an angle to the right of 90°56’03” with the last described course to the Northwest Corner of said Lot 3 being a point on the South Line of said Lot 4; thence east 557.71 feet along the South Line of said Lot 4 which forms an angle to the right of 89°03’55” with the last described course to a point lying 100.00 feet west of the Southeast Corner of said Lot 4, said point being the Southwest Corner of said Tract conveyed by Document No. 217701; thence north 599.74 feet along the West Line of said Tract which forms an angle to the right of 90°23’11” with the last described course to the Point of Beginning, situated in the County of Ford and State of Illinois.
Said Parcel 3 contains 7.85 acres, more or less.
Parcel 4:
A part of a Tract of Land conveyed by Warranty Deed recorded January 27, 2005 as Document No. 231777 in the Ford County Recorder’s Office being a part of Lot 4 in the First Addition to Jordan Industrial Park Subdivision in the City of Gibson City, Ford County, Illinois, according to the Plant recorded as Document No. 205053 in the Ford County Recorder’s Office, more particularly described as follows: Beginning at a point on the North Line of said Lot 4 lying 100.00 feet west of the Northeast Corner thereof, said point being the Northwest Corner of a Tract of Land conveyed to Bloomer Line Railroad according to the Deed recorded as Document No. 217701 in said Recorder’s Office. From said Point of Beginning, thence west 551.97 feet along the North Line of said Lot 4 to the point of intersection with the Northerly Extension of the West Line of Lot 3 in said First Addition; thence south 599.81 feet along said Northerly Extension which forms an angle to the right of 90°56’03” with the last described course to the Northwest Corner of said Lot 3 being a point on the South Line of said Lot 4: thence east 60.00 feet along the South Line of said Lot 4 which forms an angle to the right of 89°03’55” with the last described course; thence north 200.00 feet along a line which is parallel with the West Line of said Tract conveyed by Document No. 217701 and which forms an angle to the right of 90°23’11” with the last described course; thence east 497.71 feet along a line which is parallel with the South Line of said Lot 4 and which forms an angle to the right of 269°36’49” with the last described course to a point on the West Line of said Tract conveyed by Document No. 217701 lying 200.00 feet north of the Southwest corner thereof; thence North 399.74 feet along the West Line of said Tract which forms an angle to the right of 90°23’11” with the last described course to the Point of Beginning, containing 5.35 acres, more or less.
Parcel 5:
All that part of the West 250 Feet of the Northeast Quarter of Section 10, Township 23 North, Range 7 East of the Third Principal Meridian, situated in the City of Gibson, County of Ford and State of Illinois, lying north of the North Line of a tract of land conveyed to Alliance Grain Company by Warranty Deed recorded October 2, 2000, as Document No. 216478 in the Ford County Recorder’s Office.
Said Parcel 5 contains 10.02 acres, more or less.
Parcel 6:
All that part of the North 100 Feet of the Northeast Quarter of Section 10, Township 23 North, Range 7 East of the Third Principal Meridian, Gibson City, Ford County, Illinois, lying west of the Centerline of Drummer Creek and East of the East Line of a tract of land conveyed to One Earth Energy, LLC by Warranty Deed recorded May 2, 2007, as Document No. 238795 in the Recorder’s Office of Ford County, Illinois, situated in the County of Ford and State of Illinois.
Said Parcel 6 contains 4.84 acres, more or less.
EXHIBIT G
Total Project Cost Statement
EXHIBIT H
BANKS’ COMMITMENTS
| BANK | CONSTRUCTION | REVOLVING LOAN | TOTAL | ||||
| LOAN/TERM LOAN | COMMITMENT | COMMITMENT, | |||||
| COMMITMENT | AMOUNT | CONSTRUCTION | |||||
| AMOUNT | LOAN/TERM | ||||||
| LOANS AND | |||||||
| REVOLVING | |||||||
| LOANS | |||||||
| 1st Farm Credit | $7,500,000.00 | N/A | $7,500,000.00 | ||||
| Services | |||||||
| Transamerica | $11,000,000.00 | N/A | $11,000,000.00 | ||||
| Occidental Life | |||||||
| Insurance Company | |||||||
| Busey Bank | $5,000,000.00 | N/A | $5,000,000.00 | ||||
| Capital Farm Credit | $3,000,000.00 | N/A | $3,000,000.00 | ||||
| Citizens First National | $9,000,000.00 | $1,000,000.00 | $10,000,000.00 | ||||
| Bank | |||||||
| CoBank | $4,550,000.00 | $450,000.00 | $5,000,000.00 | ||||
| Deere Credit, Inc. | $18,181,818.00 | $1,818,182.00 | $20,000,000.00 | ||||
| Farm Credit Services | $8,000,000.00 | N/A | $8,000,000.00 | ||||
| of America | |||||||
| First Indiana Bank | $9,000,000.00 | $1,000,000.00 | $10,000,000.00 | ||||
| First National Bank of | $19,768,182.00 | $5,731,818.00 | $25,500,000.00 | ||||
| Omaha | |||||||
| Quad City Bank and | $5,000,000.00 | N/A | $5,000,000.00 | ||||
| Trust | |||||||
| Totals | $100,000,000.00 | $10,000,000.00 | $110,000,000.00 |
EXHIBIT I
PERMITS
| 1. | Construction Air Permit – NSPS Source | |
| 2. | Above Ground Storage Tank Permit | |
| 3. | National Pollution Discharge Elimination System Permit, consisting of: | |
| - - | Storm Water Pollution Prevention Plan for Construction | |
| - | Storm Water Pollution Prevention Plan for Industrial | |
| - - | Discharge of Process, Non-contract Water (cooling water) | |
| - - | Industrial Wastewater Treatment Pond Permit | |
| 4. | Building Permits | |
| - - | State | |
| - - | County | |
| - - | Mechanical | |
| - - | Electrical | |
| - - | Structures | |
| 5. | Fire Protection Permit | |
| 6. | Septic Tank and Drain Field Permit | |
| 7. | Railroad Permit/Approval | |
| 8. | Approval for Access to County Road/Highway Access Permit | |
| 9. | Water Permits | |
| - - | Water Appropriations Permit | |
| - - | Potable Water | |
| 10. | Water Treatment Discharge Permit from the State of Illinois | |
| 11. | Tobacco Trade Bureau Permit | |
| 12. | Archeological Survey | |
| 13. | Risk Management Plan | |
| 14. | Spill Prevention, Control and Countermeasure Plan | |
| 15. | Operations Permit | |
| 16. | Wells Permits | |
EXHIBIT J
OUTSTANDING EQUITY INTERESTS
Subscription Agreements in connection with the following:
One Earth Energy, LLC Initial Public Offering Dated August 17, 2007
One Earth Energy, LLC Rescission Offer Dated August 20, 2007
SCHEDULE “I” TO CONSTRUCTION LOAN AGREEMENT
AMORTIZATION SCHEDULE – U.S. RULE (NO COMPOUNDING), 360 DAY YEAR
| One Earth Energy, LLC Fixed Rate Loan | |||||
| Principal Schedule for Payments Plus Interest | |||||
| AMORTIZATION SCHEDULE - U.S. Rule (no compounding), 360 Day Year | |||||
| Principal | Balance | ||||
| $ | |||||
| 1 | $828,141.32 | $49,171,858.68 | |||
| 2 | $844,783.51 | $48,327,075.17 | |||
| 3 | $851,087.91 | $47,475,987.26 | |||
| 4 | $868,379.18 | $46,607,608.08 | |||
| 5 | $906,606.78 | $45,701,001.30 | |||
| 6 | $914,533.28 | $44,786,468.02 | |||
| 7 | $923,021.25 | $43,863,446.77 | |||
| 8 | $941,773.96 | $42,921,672.81 | |||
| 9 | $979,864.74 | $41,941,808.07 | |||
| 10 | $990,077.41 | $40,951,730.66 | |||
| 11 | $1,000,930.33 | $39,950,800.33 | |||
| 12 | $1,021,265.90 | $38,929,534.43 | |||
| 13 | $1,059,208.49 | $37,870,325.94 | |||
| 14 | $1,071,897.23 | $36,798,428.71 | |||
| 15 | $1,085,311.58 | $35,713,117.13 | |||
| 16 | $1,107,361.49 | $34,605,755.64 | |||
| 17 | $1,137,501.49 | $33,468,254.15 | |||
| 18 | $1,160,360.53 | $32,307,893.62 | |||
| 19 | $1,176,544.28 | $31,131,349.34 | |||
| 20 | $31,131,349.34 | $0.00 | |||
SCHEDULE 5.2
(PERMITTED LIENS)
| 1st FARM CREDIT SERVICES, FLCA as a | |
| BANK | |
| By: | /s/ Dale Richardson |
| Title: | VP, Illinois Capital Markets Group |
| TRANSAMERICA OCCIDENTAL | |
| INSURANCE COMPANY, as a BANK | |
| By: | /s/ Tom Nordstrom |
| Title: | Vice President |
| BUSEY BANK, as a BANK | |
| By: | /s/ Doug Roesch |
| Title: | Senior Vice President |
| FARM CREDIT SERVICES OF AMERICA, | |
| FLCA, as a BANK | |
| By: | /s/ Ron Brandt |
| Title: | Vice President |
| FIRST INDIANA BANK, as a BANK | |
| By: | /s/ Jimmy Grey |
| Title: | Vice President |
| QUAD CITY BANK AND TRUST, as a | |
| BANK | |
| By: | /s/ Rebecca Skafidas |
| Title: | Commercial Banking Officer |
| CAPITAL FARM CREDIT, as a BANK | |
| By: | /s/ Robert P. Abbott |
| Title: | President Corporate Lending |
| CITIZENS FIRST NATIONAL BANK, as a | |
| BANK | |
| By: | /s/ Joseph K. Bates |
| Title: | VP – Agribusiness Banking |
| COBANK, as a BANK | |
| By: | /s/ Jeffrey J. Grave |
| Title: | Vice-President |
| DEERE CREDIT, INC., as a BANK | |
| By: | /s/ Mark A. Thompson |
| Title: | Vice President, AFS Operations |
