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10-Q/A - FOR QUARTERLY PERIOD ENDED JUNE 30, 2011 - NEDAK ETHANOL, LLCform10qa_091411.htm
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v2.3.0.11
Long-Term Debt
6 Months Ended
Jun. 30, 2011
Long-Term Debt  
Long-Term Debt
8.  LONG-TERM DEBT


The maturities of long term debt as of June 30, 2011, are as follows:

 
2011
 
$ 42,375,780
 
2012
 
18,750
     Total long-term debt
 
$ 42,394,530

Construction Loan under Credit Agreement

In February 2007, the Company entered into a senior credit facility ("Credit Agreement") with AgCountry Farm Credit Services, FLCA ("Lender") for a multiple advance construction loan totaling $42,500,000.  The Company is required to make interest payments during the construction phase at the thirty-day LIBOR plus 3.4%, but not less than 6.0%.  The interest rate was 6.0% as of June 30, 2011. The Credit Agreement provides that the construction loan is to be converted at final acceptance to a permanent ten year term loan of $32,500,000 and a $10,000,000 revolving term loan, which has not occurred as of June 30, 2011.  As of June 30, 2011 and December 31, 2010, the Company had $35,789,480 and $38,026,321 outstanding on the construction loan, respectively.

Under the current terms of the Credit Agreement, the Company is required to make level monthly principal payments of $447,368 through February 1, 2018.


On August 6¸ 2010, the Company executed a Sixth Supplement and Forbearance Agreement to the Credit Agreement (the "Sixth Supplement"), under which the Company agreed that the Lender could apply the $3,945,087 it held as collateral under the Credit Agreement to the Company's current obligations under the Credit Agreement, including monthly principal payments, penalties and interest.  In exchange for the foregoing among other terms, Lender agreed to refrain from exercising its rights under the Credit Agreement until the earlier of October 1, 2010 or the date of any default under the Sixth Supplement.  The TIF Lender (defined in Note 9) filed a suit alleging a breach of the TIF Loan (defined in Note 9), which constituted a breach under the Sixth Amendment, but the Lender has not taken any actions directly related to the breach.

The Company and the Lender remain in discussions to revise the Credit Agreement covenants and resolve outstanding defaults under the Credit Agreement.  In light of continuing poor margins in the ethanol industry, the Lender has indicated the Company should focus on mitigation of risk and obtaining additional capital.


Note Payable to Members

In May 2004, each of the initial 15 members loaned the Company $1,000.  The unsecured loans bore interest at 5% per annum with principal and interest due on April 8, 2009.  On April 8, 2009, the notes were amended and restated to add accrued interest in the amount of $3,750 to the principal.  The unsecured notes, which were classified as long-term debt as of June 30, 2011, continue to bear interest at 5% per annum with principal and interest due on April 8, 2012.