Exhibit 10.1
MEMBERSHIP INTEREST PLEDGE
AGREEMENT
This MEMBERSHIP
INTEREST P LEDGE AGREEMENT (this “
Agreement ”) dated as of October 17, 2007, is
entered into by ADVANCED BIOENERGY, LLC , a Delaware limited
liability company (“ Pledgor ”), in favor of the
Secured Party (as defined below).
RECITALS
A.
Concurrently herewith, Pledgor is entering into a Secured Term Loan
Note dated of even date herewith (as the same from time to time
hereafter may be amended, modified, supplemented or restated, the
“ Note ”) among Pledgor, as borrower, and PJC
Capital LLC, a Delaware limited liability company (the “
Secured Party ”), as lender, pursuant to which the
Secured Party has agreed to extend certain loans of money (the
“ Loans ”) to Pledgor on the terms and subject
to the conditions set forth in the Note and the other Loan
Documents.
B.
Pledgor is the record and beneficial owner of 100.0% of the
outstanding membership interests in ABE Fairmont, LLC, a Delaware
limited liability company (the “ Company ”) as
set forth on Exhibit A
attached hereto, which Exhibit is incorporated herein by this
reference and may be amended or supplemented pursuant to the terms
of this Agreement.
C.
The Secured Party is willing to make, extend and maintain the Loans
to Pledgor on and after the date of the Note, but only upon the
condition, among others, that Pledgor shall have executed this
Agreement and delivered this Agreement and the Pledged Collateral
(as defined below) to the Secured Party.
AGREEMENT
NOW, THEREFORE , in
consideration of the foregoing Recitals and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Pledgor
hereby represents, warrants, covenants and agrees as follows:
ARTICLE I
DEFINITIONS
1.1
Definitions. All capitalized terms used but not defined herein
shall have the respective meanings given to them in the Note. In
addition, the following terms shall have the following
meanings:
“ Op
erating Agreement ” means the Limited Liability
Company Agreement of the Company dated as of September 25, 2006, as
amended by that Amendment to Limited Liability Company dated as of
October 4, 2007 (as the same may be amended, supplemented, and
restated or otherwise modified and in effect from time to time, as
permitted hereunder), by and between the Company and Pledgor as the
sole member.
“Pledged
Collateral” has the meaning set forth in
Section 2.1 , below.
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“UCC”
means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided,
however , in the event that, by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of the
Secured Party’s security interest in any collateral is
governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term
“UCC” shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection of priority and for
purposes of definitions related to such provisions.
1.2
UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the
UCC are used in this Agreement, including its preamble and
recitals, with such meanings.
ARTICLE II
PLEDGE
2.1
Pledge and Grant Of Security Interest. As security for the
full, complete and final payment and performance when due (whether
at stated maturity, by accelerations or otherwise) of the
Obligations under the Note and the other Loan Documents and any and
all other debts, liabilities and reimbursement obligations,
indemnity obligations and other obligations for monetary amounts
(including reimbursement and indemnity obligations), fees,
expenses, costs or other sums (including attorneys’ fees and
expenses) chargeable to Pledgor under or pursuant to any of the
Loan Documents (collectively, the “ Secured
Obligations ”), Pledgor hereby assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Secured
Party, and hereby grants to the Secured Party, a security interest
in and to all of Pledgor’s right, title and interest in, to
and under each of the following, whether now existing or hereafter
acquired (all of which being hereinafter collectively called the
“ Pledged Collateral ”):
(a)
the Operating Agreement and all membership interests and the
certificates representing such interests now owned or hereafter
acquired by Pledgor in the Company, whether as a result of exchange
offers, direct investments or contributions or otherwise,
including Pledgor’s rights, now existing or hereafter arising
or acquired, to receive from time to time its share of profits,
income, surplus, compensation, return of capital, distributions and
other reimbursements and payments from the Company (including
specific properties of the Company upon dissolution and otherwise),
in respect of all such membership interests;
(b)
all additional Equity Interests, including shares of capital stock
or other equity securities in or of the Company and voting trust
certificates from time to time acquired by Pledgor in any manner,
and the certificates representing such additional shares, and all
dividends, cash, instruments, and other property or proceeds from
time to time received, receivable, or otherwise distributed in
respect of or in exchange for any or all of such shares; and
(c)
The rents, issues, profits, returns, income, allocations,
distributions and proceeds of and from any and all of the
foregoing.
Pledgor hereby agrees
to cause the Company to register pursuant to the UCC the pledge of
the membership interests covered in this Section 2.1
.
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2.2
Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and
shall:
(a)
remain in full force and effect until the Payment in Full of the
Secured Obligations;
(b)
be binding upon Pledgor and its successors, transferees and
assigns; and
(c)
inure, together with the rights and remedies of the Secured Party
hereunder, to the benefit of the Secured Party.
Upon the Payment
in Full of the Secured Obligations, the security interest granted
herein shall terminate and all rights to the Pledged Collateral
shall revert to Pledgor. Upon any such termination, the Secured
Party then shall, at Pledgor’s sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any
kind whatsoever, any and all certificates and instruments
representing or evidencing Pledgor’s interest in the Company
that had been previously delivered by Pledgor to the Secured Party,
together with all other Pledged Collateral held by the Secured
Party hereunder, and execute and deliver to Pledgor, at
Pledgor’s sole expense, such documents as Pledgor shall
reasonably request to evidence such termination.
2.3
No Assumption. This Agreement is executed and delivered to the
Secured Party for collateral security purposes only.
Notwithstanding anything herein to the contrary:
(a)
Pledgor shall remain liable under the contracts and agreements
included in the Pledged Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Agreement
had not been executed;
(b)
the exercise by the Secured Party of any of its rights hereunder
shall not release Pledgor from any of its duties or obligations
under any such contracts or agreements included in the Pledged
Collateral; and
(c)
the Secured Party shall not have any obligation or liability under
any such contracts or agreements included in the Pledged Collateral
by reason of this Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of Pledgor
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder, and the Secured Party shall not
hereunder or otherwise (i) assume any obligation or liability under
or in connection with the Operating Agreement to any Person, and
any such assumption is hereby expressly disclaimed, or (ii) be
deemed to be, or otherwise have the duties or responsibilities of,
a member or a managing member vested with the powers and
responsibilities of the management of the Company.
2.4
Distributions Under Operating Agreement. Unless and until a
Default or an Event of Default has occurred and is continuing,
Pledgor shall be entitled to receive any and all distributions on
account of its membership interests in the Company to the extent
entitled thereto under the Operating Agreement.
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ARTICLE III
REPRESENTATIONS AND
WARRANTIES
3.1
Representations And Warranties. Pledgor hereby represents and
warrants to the Secured Party, as at the date of each pledge and
delivery hereunder by Pledgor to the Secured Party of any Pledged
Collateral, as set forth in the following Sections 3.1(a)
through 3.1(q) , inclusive.
(a)
Organization. Pledgor is duly formed and validly existing under
the laws of the State of Delaware and has full power and authority
to enter into and perform its obligations under this Agreement.
(b)
Capacity; Due Authorization; Non-Contravention. The execution,
delivery and performance by Pledgor of this Agreement and each
other Loan Document executed or to be executed by it have been duly
authorized by all necessary action, and do not contravene its
organizational documents; and in each case do not:
(i)
contravene any material contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting Pledgor; or
(ii)
result in, or require the creation or imposition of, any Lien on
any of Pledgor’s properties except as contemplated
hereby.
(c)
Binding Obligations. This Agreement constitutes, and each other
Loan Document executed by Pledgor will, on the due execution and
delivery thereof, constitute, the legal, valid and binding
obligations of Pledgor, enforceable against Pledgor in accordance
with their respective terms, except as enforcement hereof may be
limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors’ rights generally and by general
principles of equity.
(d)
Filing. No presently effective UCC financing statement covering
any of the Pledged Collateral is on file in any public office,
except for UCC financing statements in favor of the Secured
Party.
(e)
Ownership; No Liens. Pledgor is the legal and beneficial owner
of, and has all rights and good title to (and has full right and
authority to pledge and assign) all Pledged Collateral pledged by
Pledgor hereunder, free and clear of all adverse claims or other
Liens, except the Lien granted herein to the Secured Party.
(f)
Operating Agreement. Pledgor has furnished to the Secured Party
a true and correct copy of the Operating Agreement and all
amendments thereto, which Operating Agreement, as so amended,
constitutes the valid, binding and enforceable obligation of all
parties thereto, sets forth the entire agreement of the parties
thereto with respect to the subject matter thereof, has not been
further amended or modified (except as permitted under Section
4.8 hereof) and remains in full force and effect.
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(g)
Membership Interests. Pledgor owns 100% of the membership
interests in the Company and in the Company’s profits, and
there are no other members of the Company other than Pledgor, all
as set forth in Exhibit A
.
(h)
Certificate; Operating Agreement. The interest of Pledgor in
the Company is represented by such certificates or instruments
(together with all necessary instruments of transfer or assignment,
duly executed in blank) as have been delivered to the Secured Party
or the Secured Party’s designated bailee and are held in its
possession. The Operating Agreement provides that any membership
interests, units or limited liability company interests in the
Company are securities governed by Article 8 of the UCC and the
Company has not otherwise “opted-out” of Article 8 of
the UCC.
(i)
Performance Of Obligations. Pledgor has performed all of its
material obligations to date under the Operating Agreement.
(j)
Compliance With Securities Laws. The offering and sale of all
units of membership interests in the Company have been conducted,
in all material respects, in compliance with all applicable state
and federal securities laws and regulations and, without limiting
the generality of the foregoing, no offering document furnished, to
any member in connection therewith contained, any misstatement of a
material fact or omitted, to state any fact necessary to make such
document not materially misleading.
(k)
Information. All information with respect to the Pledged
Collateral set forth in any schedule, certificate or other writing
at any time furnished by Pledgor to the Secured Party, and all
other written information at any time furnished by Pledgor to the
Secured Party, is and shall be true and correct in all material
respects as of the date furnished.
(l)
Records. The address of the location of the records of Pledgor
concerning the Pledged Collateral and the address of
Pledgor’s principal place of business and chief executive
office is set forth in Schedule
I to this Agreement.
(m)
Authorization; Approval. No authorization, approval, or other
action by, and no notice to or filing with, any Governmental
Authority, or any other Person is required either:
(i)
for the pledge by Pledgor of any Pledged Collateral pursuant to
this Agreement or for the execution, delivery, and performance of
this Agreement by Pledgor; or
(ii)
for the exercise by the Secured Party of (a) the voting or other
rights provided for in this Agreement, or (b) the remedies in
respect of the Pledged Collateral pursuant to this Agreement,
except, in the case of this clause (ii)(b), as may be required in
connection with a disposition of such Pledged Collateral by laws
affecting the offering and sale of securities generally, or as may
be required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and regulations issued relating thereto. A
(n)
Litigation. To Pledgor’s knowledge, there is no claim,
investigation, action, suit or proceeding affecting either of
Pledgor or the Company pending or overtly threatened by or before
any court, arbitrator or Governmental Authority which could
with
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reasonable likelihood have a material adverse
effect on the ability of Pledgor to perform its obligations under
this Agreement.
(o)
No Offset or Defense. The Secured Obligations are not subject
to any offset or defense of any kind against the Secured Party or
the Company.
(p)
Continuation of Representations and Warranties. Pledgor
covenants, warrants and represents to the Secured Party that all
representations and warranties contained in this Agreement shall be
true, accurate and complete in all material respects at the time of
Pledgor’s execution of this Agreement and, shall continue to
be true, accurate and complete in all material respects until the
Secured Obligations have been Paid in Full.
ARTICLE IV
COVENANTS
4.1
Protect Pledged Collateral; Further Assurances. Pledgor shall
not sell, assign, transfer, pledge or otherwise encumber the
Pledged Collateral in any manner (except for the pledge granted
herein to the Secured Party), except to the extent permitted by the
Note. Pledgor shall warrant and defend the right and title granted
by this Agreement to the Secured Party in and to the Pledged
Collateral (and all right, title and interest represented by the
Pledged Collateral) against the claims and demands of all Persons
whomsoever, but nothing contained herein shall prevent the Company
from issuing additional Equity Interests. Pledgor agrees, at any
time, and from time to time, at the expense of Pledgor, Pledgor
shall promptly execute and deliver all further instruments, and
take all further action that may be necessary or desirable, or that
the Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted
hereby or to enable the Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any of the Pledged
Collateral as set forth in Article V hereof.
4.2
Voting Rights. If an Event of Default shall have occurred and
be continuing and the Secured Party shall have notified Pledgor of
the Secured Party’s intention to exercise its voting power
under this Section 4.2 , Pledgor agrees:
(a)
that the Secured Party may exercise (to the exclusion of Pledgor)
the voting power to the extent, if any, provided in the Operating
Agreement, and all other incidental rights of ownership with
respect to the Pledged Collateral and Pledgor hereby grants the
Secured Party, from the date hereof until the Payment in Full of
the Secured Obligations, an irrevocable proxy, coupled with an
interest exercisable under such circumstances, to vote such Pledged
Collateral; and
(b)
promptly to deliver to the Secured Party such additional proxies
and other documents as may be necessary to allow the Secured Party
to exercise such voting power.
All payments and
proceeds which may at any time and from time to time be held by
Pledgor but which Pledgor is obligated to deliver to the Secured
Party shall be held by Pledgor separate and apart from its other
property in trust for the Secured Party. Unless an Event of Default
shall have occurred and be continuing and the Secured Party shall
have given the notice referred to in this
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Section 4.2 ,
Pledgor shall have the exclusive voting power with respect to the
Pledged Collateral and the Secured Party shall, upon the written
request of Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by Pledgor
which are necessary to allow Pledgor to exercise voting power with
respect to the Pledged Collateral; provided, however , that
no vote shall be cast, or consent, waiver or ratification given or
action taken by Pledgor that would impair any Pledged Collateral or
be inconsistent with or violate any provision of the Note or any
other Loan Document (including this Agreement) or that would amend
or modify the Operating Agreement without the prior written consent
of the Secured Party.
4.3
Filings; Recordings. Pledgor authorized the Secured Party to
file such financing statements and Pledgor shall execute and
deliver certificates evidencing the Pledged Collateral, together
with assignments in blank, and shall execute and deliver or cause
to be file or registered any other documents (and Pledgor shall pay
the cost of filing or recording the same in all public offices
deemed necessary or appropriate by the Secured Party), and do such
other acts and things, all as the Secured Party may from time to
time reasonably request to establish and maintain a valid,
perfected pledge of, and security interest in, the Pledged
Collateral in favor of the Secured Party.
4.4
Notice Of This Agreement. Pledgor (i) shall notify the Company
of the existence of this Agreement by sending to it a notice in
substantially the form set forth in Exhibit B to this Agreement and
(ii) shall cause the Company to execute and deliver to the Secured
Party an initial transaction statement in substantially the form
set forth in Exhibit C to
this Agreement on the date hereof.
4.5
Mainten
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