Attached files
| file | filename |
|---|---|
| 10-Q - Otter Tail Ag Enterprises, LLC | v174513_10q.htm |
| EX-31.1 - Otter Tail Ag Enterprises, LLC | v174513_ex31-1.htm |
| EX-32.1 - Otter Tail Ag Enterprises, LLC | v174513_ex32-1.htm |
| EX-10.2 - Otter Tail Ag Enterprises, LLC | v174513_ex10-2.htm |
| EX-10.1 - Otter Tail Ag Enterprises, LLC | v174513_ex10-1.htm |
EXIT
FINANCING
TERM
SHEET
FOR
OTTER
TAIL AG ENTERPRISES, LLC,
AS DEBTOR
IN POSSESSION
IN
BANKRUPTCY CASE NO. 09-61250
UNITED
STATES BANKRUPTCY COURT, DISTRICT OF MINNESOTA
AGSTAR
FINANCIAL SERVICES, PCA, (“AgStar”) as the administrative
agent for the banks to be determined (the “Banks”) hereby provides OTTER
TAIL AG ENTERPRISES, LLC, a Minnesota limited liability company (the “Debtor”), with the following
proposal for the exit financing pursuant to the terms of a plan of
reorganization which is acceptable to AgStar and the Banks. THIS
PROPOSAL IS NOT A COMMITMENT TO LEND, but does evidence our sincere interest in
providing the financing required by the Debtor upon its emergence from the
pending Chapter 11 case.
Reference
is made herein to the following AgStar Prepetition Loan Agreements
(collectively, the “AgStar
Prepetition Loan Agreements”):
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a.
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Master
Loan Agreement dated March 28,
2007;
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b.
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First
Supplement to the Master Loan Agreement dated as of March 28,
2007;
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c.
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Amended
and Restated Master Loan Agreement dated as of June 23,
2008;
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d.
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Amended
and Restated Second Supplement to the Master Loan Agreement dated as of
June 23, 2008; and
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e.
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Second
Amended and Restated Third Supplement to the Master Loan Agreement (the
“Prepetition
RLOC”) dated as of June 23,
2008.
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Unless
otherwise expressly defined herein, capitalized terms used herein shall have the
same meaning ascribed to them in the AgStar Prepetition Loan
Agreements. Terms and conditions of the exit financing proposal are
as follows:
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Debtor:
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Otter
Tail Ag Enterprises, LLC, a Minnesota limited liability company, as Debtor
in Possession in its Chapter 11 case in the United States Bankruptcy
Court, District of Minnesota (the “Debtor’s Chapter 11
Case”).
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Lender:
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AgStar
Financial Services, PCA, as administrative agent for the
Banks.
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Credit
Facilities:
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A
term loan, representing the unpaid balance of the existing term note in
addition to the unpaid balance of the term revolving note, not to exceed
the original combined amount of $35,000,000.00 (the “Term
Loan”).
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A
364-day revolving credit facility in an amount not to exceed the lesser of
(a) 75% of Eligible Accounts and Eligible Inventory or
(b) $4,000,000.00 (the “Revolving
Loan”).
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The
Term Loan and the Revolving Loan are hereinafter referred to as the “Loans.”
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Closing
Date:
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A
date not later than 10 Business Days following the entry of a confirmation
order (the “Confirmation
Order”) confirming the Debtor’s plan of reorganization (the “Plan”).
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Purposes:
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The
Loans contemplated by this term sheet may be used by the Debtor for (a)
working capital purposes, (b) payment of professional and United States
Trustee fees as set forth in the Plan; (c) payment of any amounts
necessary to obtain the release of subordinate liens and security
interests in any of the Collateral in an amount acceptable to AgStar in
its sole discretion; and (d) such other purposes as may be acceptable to
AgStar in its sole discretion.
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Maturity
Dates:
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The
Term Loan will mature on June 1, 2013.
The
Revolving Loan will mature 364 days following the effective date of the
Plan.
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Interest:
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The
outstanding principal amount of the Term Loan shall bear interest at a
fixed rate equal to 6.5% per annum through May 31, 2013, provided,
however, that such rate will be adjusted to reflect any changes in the
three-year U.S. Treasury bond rate of interest between the date of this
term sheet and the effective date of the Plan.
Accrued
interest on the Term Loan will be paid in arrears monthly on the first day
of the first three (3) calendar months following the effective date of the
Plan.
The
outstanding principal amount of the Revolving Loan shall bear interest at
a fixed rate equal to 6.5% per annum through May 31,
2013, provided, however, that such rate will be adjusted to
reflect any changes in the three-year U.S. Treasury bond rate of interest
between the date of this term sheet and the effective date of the
Plan.
Accrued
interest on the Revolving Loan will be paid in arrears monthly on the
first day of each calendar month beginning with the first calendar month
following the effective date of the Plan.
The
default rate of interest will be 2.00% higher than the rate otherwise
payable.
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Amortization:
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The
Term Loan will be payable in (i) a special principal payment of $3,150,000
on the first day of the first calendar month following the effective date
of the Plan and (ii) the balance of the Term Loan in equal monthly
installments of principal and interest sufficient to fully amortize the
Term Loan over 10 years from the effective date of the Plan, beginning
with the first day of the fourth calendar month following the effective
date of the Plan.
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2
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The
Revolving Loan will be payable in full on its applicable maturity
date.
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Security:
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The
Term Loan and the Revolving Loan will be secured by a first priority
perfected security interest in all of the real and personal property of
the Debtor, whether now owned or hereafter acquired (the “Collateral”), subject
only to such other liens and encumbrances as may be acceptable to
AgStar.
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Accrued
Default Interest:
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All
default interest provided by the AgStar Prepetition Loan Agreements will
be deferred until June 1, 2013. Provided the Debtor does not
default in the performance of its obligations under the Loan Documents,
the Loan Documents will provide that such default interest will be waived
by AgStar on June 1, 2013.
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Plan
of Reorganization:
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The
Debtor shall file the Plan, which must be acceptable to AgStar and MMCDC
New Markets Tax Fund (“NMF” and collectively
with AgStar, the “Prepetition Lenders”),
on or before February 28, 2010 (the “Plan
Date”).
At
a minimum, the Plan shall not be deemed acceptable to the Prepetition
Lenders unless:
· The
Plan provides for and treats the Prepetition Lenders as fully
secured creditors;
· The
Plan provides for the financing set forth in this Term Sheet;
· The
Confirmation Order and the Plan provide that the assets of Debtor will be
free from any and all subordinate mortgages, liens, and encumbrances,
including any lessor’s interests, except as may be accepted by the
Prepetition Lenders.
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Conditions
Precedent To Closing:
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Entry
of the Confirmation Order confirming the Plan which is satisfactory to
AgStar on or before May 1, 2010;
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Execution
and delivery of an amended and restated Credit Agreement together with
such other notes, mortgages, security agreements, control agreements,
documents, and agreements as may be required by AgStar satisfactory to
AgStar and the Banks (collectively the “Loan Documents”) which
Loan Documents will contain representations; warranties; affirmative,
negative and financial covenants (including, but not limited to,
limitations on acquisitions, additional debt, bonuses, distributions,
change in control, change in senior management, capital expenditures,
disposition of assets and other covenants deemed appropriate by AgStar and
the Banks); events of default; and remedies acceptable to AgStar and the
Banks;
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AgStar’s
receipt of subscription letters, acceptable to AgStar (collectively, the
“Subscription
Letters”), (a) in an amount not less than $6,000,000.00 on or
before January 15, 2010; and (b) in an aggregate amount not less than
$12,000,000.00 on or before the Plan
Date
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3
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Confirmation
of equity contributions pursuant to the Subscription Letters to the
reorganized Debtor of at least $12,000,000;
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Payment
to AgStar of an amount sufficient to reduce the outstanding principal
balance of the Prepetition RLOC to an amount not greater than
$4,000,000;
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Delivery
of a risk management plan reasonably acceptable to AgStar including a
designated risk management officer;
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Compliance
with all conditions precedent required by NMF including payment of all
interest and default charges due;
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If
not expressly provided in the Confirmation Order, execution of an
agreement with U.S. Bank, as Indenture Trustee (the “Trustee”), and Otter
Tail County (the “County”) regarding the
resolution of the outstanding bond debt and the release of all liens,
security interests or lessor interests in any of the assets of the Debtor;
and
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Compliance
with all conditions precedent set forth in the Loan
Documents.
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Sale
of Ethanol Facility:
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If
no Plan acceptable to the Prepetition Lenders is filed by the Plan Date,
the Debtor shall file, within ten (10) Business Days thereafter, a motion
to sell the Debtor’s assets, including the ethanol production facility,
free and clear of interests, liens, encumbrances and claims pursuant to
Bankruptcy Code § 363(b) and (f). Such motion must be
accompanied by sales procedures acceptable to AgStar, including that any
such sale shall close not later than May 1, 2010.
Within
ten (10) Business Days of filing such motion, the Debtor shall engage a
financial advisor (the “Financial Advisor”)
reasonably acceptable to the Prepetition Lenders to manage the sale of the
ethanol facility.
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Expenses:
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The
Debtor shall reimburse AgStar for all reasonable costs and expenses,
including legal fees, consultant fees, appraisal fees, financial advisor
fees, and other similar fees, costs and expenses in connection with the
negotiation, documentation, execution, syndication and delivery of the
Loans and the Debtor’s Chapter 11 Case. AgStar shall be
authorized to advance from the Loans an amount equal to such costs and
expenses.
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The
above term sheet is subject to the consent and approval of the
Banks.
4
If not
acted on, these terms will expire on January 15, 2010, at 5:00 p.m.
(CST). Please return a signed copy of this letter to evidence your
acceptance of the terms and conditions contained in this Term
Sheet.
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Sincerely,
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AGSTAR
FINANCIAL SERVICES, PCA,
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/s/ Ron
Monson
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By:
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Ron Monson
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Its:
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VP
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5
SIGNATURE
PAGE TO
EXIT
FINANCING
TERM
SHEET
FOR
OTTER
TAIL AG ENTERPRISES, LLC,
AS DEBTOR
IN POSSESSION
IN
BANKRUPTCY CASE NO. 09-61250
UNITED
STATES BANKRUPTCY COURT, DISTRICT OF MINNESOTA
This Term
Sheet is accepted this 15th
day
of
January 2010 by:
DEBTOR:
OTTER
TAIL AG ENTERPRISES, LLC
a
Minnesota limited liability company
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By
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/s/ Anthony J Hicks
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Name:
Anthony J Hicks
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Title:
Chief Executive Officer
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