Attached files
| file | filename |
|---|---|
| 10-Q - Otter Tail Ag Enterprises, LLC | v174513_10q.htm |
| EX-10.3 - Otter Tail Ag Enterprises, LLC | v174513_ex10-3.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-10.1 - 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
OTTER
TAIL AG ENTERPRISES, LLC, a Minnesota limited liability company (the “Debtor”), hereby provides
MMCDC New Markets Fund II, LLC (“NMF”) with the following
proposal for the exit financing pursuant to the terms of a plan of
reorganization which is acceptable to Debtor.
Reference
is made herein to the following NMF Notes and Loan Agreements (collectively, the
“NMF Loan
Agreements”):
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a.
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Senior
Loan Note dated March 30, 2007;
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b.
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Subordinate
Loan Note dated March 30, 2007;
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c.
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Construction
and Term Loan Agreement dated March 30,
2007.
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Unless
otherwise expressly defined herein, capitalized terms used herein shall have the
same meaning ascribed to them in the NMF 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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MMCDC
New Markets Fund II, LLC, a Delaware limited liability
company.
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Credit
Facilities:
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The
existing NMF Loan Agreements will be reaffirmed in all respects except as
otherwise set forth below in regards to payment of default
interest.
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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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Maturity
Dates:
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The
maturity dates under the existing NMF Loan Agreements remain
unchanged.
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Interest:
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The
accrual rates of interest under the existing NMF Loan Agreements remain
unchanged.
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Amortization:
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The
amortizations under the existing NMF Loan Agreements remain
unchanged.
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Security:
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The
mortgages and financing statements previously filed of record to secure
the NMF Loan Agreements remain in effect and retain their prepetition
status in terms of validity and priority as encumbrances against Debtor’s
property. Nothing in the Plan shall be deemed to supersede or terminate
the Amended and Restated Intercreditor Agreement amongst the Senior and
subordinate lenders dated June 4, 2008.
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Accrued
Default Interest:
Debt
Service Reserve Account
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All
default interest provided by the NMF Loan Agreements will be deferred
until the present maturity dates in the NMF Loan
Agreements. Provided that the Debtor does not default in the
performance of its obligations under the Loan Documents, NMF will waive
such interest on the maturity dates in the NMF Agreements.
The
Debtor will establish at Confirmation and thereafter maintain a segregated
deposit account, identified as the NMF Debt Reserve Account, which shall
at all times have a balance equal to at least six months of interest due
on the NMF Loans. The Debtor shall at least monthly provide NMF with
evidence of compliance. The deferred default interest shall
become immediately due and payable upon failure to maintain the required
minimum balance. The Debtor and lending institution at which
the deposit account is located will execute a Deposit Account Control
Agreement in favor of NMF.
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Plan
of Reorganization:
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The
Debtor shall file the Plan, which must be acceptable to AgStar and NMF
(collectively 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 the
Prepetition Lenders on or before May 1, 2010;
Payment
to NMF of all accrued regular interest in the estimated amount of $495,073
(amount as of January 4, 2010);
NMF’s
receipt of subscription letters, acceptable to NMF (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
Confirmation
of equity contributions pursuant to the Subscription Letters to the
reorganized Debtor of at least $12,000,000;
Delivery
of a risk management plan reasonably acceptable to NMF including a
designated risk management officer;
Compliance
with all conditions precedent required by AgStar including payment of all
interest and default charges due;
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
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 NMF, 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 NMF 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.
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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 1st day
of
February 2010 by:
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DEBTOR:
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OTTER
TAIL AG ENTERPRISES, LLC
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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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This
Term Sheet is accepted this 3rd day
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of
February 2010 by:
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MMCDC
NEW MARKETS FUND II, LLC
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/s/ Arlen
Kangas
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By:
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Arlen Kangas
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Its:
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President
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