Attached files
| file | filename |
|---|---|
| EX-10.1 - EXHIBIT 10.1 - NEDAK ETHANOL, LLC | form8kexh101_010510.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
|
Date
of Report (Date of earliest event reported)
|
December
31, 2009
|
|
NEDAK
ETHANOL, LLC
|
|
(Exact
name of registrant as specified in its charter)
|
|
NEBRASKA
|
333-130343
|
20-0568230
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Identification
Employer
No.)
|
|
87590
Hillcrest Road, P.O. Box 391, Atkinson, Nebraska
|
68713
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code
|
(402)
925-5570
|
|
Not
Applicable
|
|
(Former
name or former address, if changed since last
report.)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
As
previously disclosed, NEDAK Ethanol, LLC (the “Company”) entered
into a loan agreement (the "Loan") on June 19,
2007 with Arbor Bank (on behalf of itself and participating lenders) (the “Lender”). The
Loan, among other things, required the Company maintain a debt service reserve
fund (the “Debt
Service Reserve Fund”) to be held by the Lender, and the Company’s Debt
Service Reserve Fund must sustain a level of funds equal to 10% of the Loan
principal. The Debt Service Reserve Fund is used to make principal
and interest payments on the Loan in the event of a shortfall. In the
event the Lender is required to draw down the Debt Service Reserve Fund, the
Company will be required to immediately replenish the entire amount of the
drawdown.
On July
6, 2009, the Lender notified the Company that the Debt Service Reserve Fund was
deficient, constituting a default under the Loan. The primary reason
for this default was the extended delays and losses associated with startup of
the Company’s ethanol plant. In order to enable resolution of the
Company’s default, the Company and the Lender entered into a Forbearance
Agreement dated December 31, 2009 (the “Agreement”).
Under the
Agreement, the Company agreed to authorize a transfer from the Debt Service
Reserve Fund to satisfy the Company’s principal payment due to Lender on
December 31, 2009. With the authorization of payment to Lender from
the Debt Service Reserve Fund, the Company is current on all required payments
to Lender, but has violated covenants in the Loan requiring immediate
replenishment of the Debt Service Reserve Fund. Moreover, the Company
agreed to seek the consent of AgCountry Farm Credit Services, FCA (“Senior Lender”) to
(i) grant a security interest and Deed of Trust in favor of the Lender upon the
Company receiving, or being denied, a USDA Business and Industry Guaranty
(“B&I
Guaranty”) of a new working capital facility that will support operations
of the Company’s ethanol facility in Atkinson, Nebraska, (ii) grant a security
interest in all reserve funds established under the Loan and (iii) amend to the
Loan documents to (a) reduce the Loan’s interest rate from 9.5% to 6.0% for
three years, and upon expiration of the three years, the interest rate will be
reverted to 9.5%, (b) reduce the Debt Service Reserve Fund to an amount equal to
12 months of principal payments, (c) make the Debt Service Reserve Fund funding
contingent on the Company’s previous year’s profitability and (d) require the
financial covenants and ratios in the Loan documents to be consistent with the
financial covenants and ratios to be agreed upon with Senior
Lender.
Under the
Agreement, the Lender shall refrain from exercising any of its rights or
remedies under the Loan, including acting on Company’s failure to maintain a
sufficient amount in its Debt Service Reserve Fund, for a period beginning on
December 31, 2009 and ending on the earlier of (a) March 31, 2010 or (b) 30 days
following the approval of the proposed B&I Guaranty.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
|
|
10.1
|
Forbearance
Agreement dated December 31, 2009 between NEDAK Ethanol, LLC and Arbor
Bank.
|
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| NEDAK ETHANOL, LLC | |||
|
Date: January
5, 2010
|
By:
|
/s/ Jerome Fagerland | |
| Jerome Fagerland | |||
| President | |||
Exhibit
Index
| Exhibit
Number
|
Description
|
|
| 10.1 | Forbearance Agreement dated December 31, 2009 between NEDAK Ethanol, LLC and Arbor Bank. |