THIS FORBEARANCE
AGREEMENT (this “Agreement” ) is made and
entered into as of February 2, 2009, by and among HEARTLAND
GRAIN FUELS, L.P., a Delaware limited partnership (the
“Borrower” ), DAKOTA FUELS, INC. and ABE
HEARTLAND, LLC (together, the “Pledgors”
and, together with the Borrower, the “Loan
Parties” and each a “Loan
Party” ), WESTLB AG, NEW YORK BRANCH, for itself and
as agent (the “Agent” ) for the financial
institutions from time to time party hereto as lenders and, in
certain instances, as Interest Rate Protection Providers (together,
the “Lenders” ), and the Lenders (the
Lenders and the Agent together, the “Forbearing
Parties” and each a “Forbearing
Party” and together with the Loan Parties, the
“Parties” ).
A. Pursuant
to the Senior Credit Agreement, dated as of October 1, 2007,
as amended from time to time (the “Credit
Agreement” ), by and among the Borrower, the Lenders
and the Agent, the Lenders agreed to extend certain credit
facilities to the Borrower. Capitalized terms used in this
Agreement but not defined in this Agreement shall have the meanings
ascribed to them in the Credit Agreement. This Agreement is deemed
to be one of the Financing Documents under and pursuant to the
Credit Agreement and all provisions of the Credit Agreement which
apply to Financing Documents shall apply to this
Agreement.
B. The Loan
Parties have requested that the Forbearing Parties forbear from
exercising certain rights and remedies under the Credit Agreement
and the other Financing Documents through the Forbearance Maturity
Date (as defined below) solely in respect of the Events of Default
and expected Events of Default that are set forth on Schedule
“A” attached hereto (together, the
“Specified Defaults” ).
C. The
Forbearing Parties are willing to forbear from exercising certain
rights and remedies under the Credit Agreement and the other
Financing Documents only through the Forbearance Maturity Date and
solely regarding the Specified Defaults, subject to the express
terms and provisions of this Agreement.
NOW,
THEREFORE , in consideration of the mutual covenants and
agreements contained herein, the sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
1.
Acknowledgments by the Loan Parties . To induce the
Forbearing Parties to execute this Agreement, the Loan Parties
hereby acknowledge, stipulate and agree as follows:
(a) The
Specified Defaults under the heading “Existing Events of
Default” on Schedule A hereto constitute Events of
Default that have occurred, remain uncured and are continuing as of
the time of this Agreement, and Borrower acknowledges
(i) receipt of notice from the Agent dated October 28,
2008 terminating all remaining Commitments, (ii) that
the
Forbearance Agreement Execution
Copy
Forbearing
Parties have no obligation to make further Loans under the Credit
Agreement and (iii) that Section 7.02(s) of the Credit
Agreement prohibits the Borrower from making any Restricted Payment
for so long as any Specified Default or any other Default or Event
of Default shall have occurred and be continuing.
(b) As
of the time of this Agreement nothing has occurred that constitutes
or otherwise can be construed or interpreted as a waiver of, or
otherwise to limit in any respect any rights or remedies the
Forbearing Parties or any of them, have or may have arising as the
result of any Event of Default that has occurred or that may occur
under the Credit Agreement, the other Financing Documents or
applicable law.
(c) The
principal amount of the Term Loan outstanding as of the date hereof
is equal to $87,979,000 (the “Term Loan
Advances” ) and that all Term Loan Advances under the
Credit Agreement and the other Financing Documents shall continue
to be due and payable when required under the Credit
Agreement.
(d) The
principal amount of the Working Capital Loan outstanding as of the
date hereof is equal to $7,100,000 (the “Working
Capital Advances” ) and that all Working Capital
Advances under the Credit Agreement and the other Financing
Documents shall continue to be due and payable when required under
the Credit Agreement.
(e) Primary
Swap Obligations with respect to terminated Swap Agreements as of
the date hereof equal $4,212,550 and that all Primary Swap
Obligations shall continue to be due and payable when required
under the Credit Agreement, the Financing Documents or any relevant
Swap Agreement.
(f) There
is no amount outstanding and owing to the Lenders with respect to
the Construction Loan.
(g) There
are no Letters of Credit outstanding as of the date
hereof.
(h) The
Loan Parties agree that (i) interest on the Loans and other
Obligations that may be due and owing under the Credit Agreement or
other Financing Documents commenced accruing at the Default Rate on
October 28, 2008 and shall continue to accrue at such rate so
long as any Specified Default or any other Event of Default shall
have occurred and be continuing and (ii) all interest amounts on
the Loans and other Obligations and other amounts that may be due
and owing under the Credit Agreement and other Financing Documents
shall continue to be due and payable when required under the Credit
Agreement.
(i) No
Loan Party has any defense, claim, counterclaim or right of offset
against any of the Forbearing Parties or their Affiliates with
respect to the Loans or any portion thereof or any other
Obligations.
(j) The
obligations of the Loan Parties under this Agreement of any nature
whatsoever, whether now existing or hereafter arising, are
Obligations.
(k) Except
as expressly modified by this Agreement, all terms and provisions
of the Credit Agreement and the other Financing Documents are valid
and enforceable and remain in full force and effect according to
their respective terms. The failure of any of the
2
Forbearance Agreement Execution
Copy
Loan Parties to
comply with any of its covenants and agreements in this Agreement
shall be an Event of Default for purposes of the Credit Agreement
and the other Financing Documents, including for purposes of this
Agreement.
(l) Notwithstanding
any other provision of this Agreement or any other contract or
instrument between or among any Loan Party or Loan Parties, on the
one hand, and the Forbearing Parties, or any of them, on the other
hand: (i) the relationship between any of the Forbearing
Parties on the one hand, and each of the Loan Parties, on the other
hand, shall be limited to the relationship of a lender to a
borrower in a commercial loan transaction; (ii) no Forbearing
Party is or shall be construed as a partner, joint venturer,
alter-ego, manager, controlling person, agent, fiduciary, or other
business associate or participant of any kind of any Loan Party (or
any other Person), and no Forbearing Party intends to assume any
such status at any time; and (iii) no Forbearing Party shall
be deemed responsible for (or a participant in) any acts, omissions
or decisions of any other Forbearing Party or, in the case of any
Lender, the Agent.
(m) The
Forbearing Parties’ entry into, and covenants to perform in
accordance with, this Agreement constitute (i) reasonably
equivalent value for the purposes of any provision of Title 11 of
the United States Code (the “Bankruptcy
Code” ) or the Uniform Fraudulent Transfer Act, (ii)
fair consideration for the purpose of any provision of the Uniform
Fraudulent Conveyance Act, and (iii) reasonably equivalent
value, fair consideration and fair value for the purpose of any
other law of the United States, any state, territory or possession,
or the District of Columbia or other applicable laws, received by
the Loan Parties as of the closing of this Agreement in
contemporaneous exchange for the Loan Parties’ entry into,
and covenants to perform in accordance with, this Agreement and the
documents executed in connection with this Agreement.
(n) All
time-related defenses of the Loan Parties, such as statutes of
limitations, doctrines of estoppel, doctrines of laches or any
other rules of law or equity of similar nature, are hereby tolled
with respect to all rights, claims and causes of action of any kind
whatsoever that any Forbearing Party may have against any Loan
Party under or in connection with the Financing Documents as of the
time of the closing of this Agreement through and including the
date which is thirty (30) days after the Forbearance Maturity
Date.
(o) Except
for Permitted Liens entitled to priority under applicable law, the
Agent for itself and the ratable benefit of the Lenders and other
Senior Secured Parties has a first priority perfected security
interest in, and lien upon, in all applicable jurisdictions, all of
the property that is pledged as Collateral under any of the
Security Documents, to secure the full and prompt payment of all
Obligations.
2.
Forbearance Maturity Date . This Agreement shall terminate
on the date (the “Forbearance Maturity
Date” ) which is the earliest to occur of:
|
|
(i)
|
|
11:59 p.m. (New York time) on
March 31, 2009;
|
|
|
|
|
|
|
|
(ii)
|
|
the
date of an occurrence of any Default or Event of Default other than
the Specified Events of Default set forth in Schedule
“A” hereto;
|
|
|
|
|
|
|
|
(iii)
|
|
the
date the Borrower fails to achieve the “process
benchmarks” or
|
3
Forbearance Agreement Execution
Copy
|
|
|
|
“financial achievements”
set forth in Schedule “B” hereto; or
|
|
|
|
|
|
|
|
(iv)
|
|
the
date any Loan Party fails to comply substantially with any of the
agreements, material covenants, or other material terms set forth
in this Agreement.
|
Any termination
of this Agreement pursuant to (ii) through (iv) above
shall occur upon 5 business days’ prior written notice from
the Agent or the Required Lenders to the Loan Parties and without
any further action or notice by the Forbearing Parties. Further,
the Loan Parties acknowledge and agree that none of the Forbearing
Parties have any obligation to extend the term of this Agreement
beyond the time provided herein and there exists no course of
dealing that would permit arguing for an extension contrary to the
Forbearing Parties’ wishes.
3.
Forbearance by Forbearing Parties . Subject to the terms and
conditions of this Agreement, from the effective date of this
Agreement until the Forbearance Maturity Date (the
“Forbearance Period” ), the Forbearing
Parties agree to forbear from exercising their respective rights
and remedies under the Credit Agreement, Security Documents and the
other Financing Documents, solely in respect of the Specified
Defaults.
4.
Conditions Precedent to Effectiveness . The effectiveness of
this Agreement upon the Forbearing Parties shall be conditioned
upon and subject to the satisfaction of the following:
(a) This
Agreement shall have been duly authorized and executed by each of
the Loan Parties and the Forbearing Parties and the Parties shall
have delivered original counterparts thereof to the
Agent.
(b) The
Borrower shall have reimbursed the Agent for any reasonable costs,
fees and expenses of the Forbearing Parties incurred in respect of
this Agreement, the Specified Defaults or otherwise payable
a
|
