Loan Agreement

LOAN AGREEMENT by and Among BIOFUEL ENERGY CORP. And THE LENDERS PARTY HERETO and GREENLIGHT APE, L.L.C., as Administrative Agent September 24, 2010

EXHIBIT 10.1
 
EXECUTION VERSION

 
by and among
 
 
and
 
THE LENDERS PARTY HERETO
 
and
 
GREENLIGHT APE, L.L.C.,
 
as Administrative Agent
 
September 24, 2010

 
 

 

TABLE OF CONTENTS

       
Page
     
1. CERTAIN DEFINITIONS
 
1
1.1
Certain Definitions  
1
1.2
Construction  
18
 
1.2.1
Number; Inclusion
 
18
 
1.2.2
Determination
 
18
 
1.2.3
Administrative Agent’s Discretion and Consent
 
18
 
1.2.4
Documents Taken as a Whole
 
18
 
1.2.5
Headings
 
18
 
1.2.6
Implied References to this Agreement
 
18
 
1.2.7
Persons
 
18
 
1.2.8
Modifications to Documents
 
18
 
1.2.9
From, To and Through
 
19
 
1.2.10
Shall; Will
 
19
1.3
Accounting Principles  
19
1.4
Concerning Corporate Terms  
19
     
2. TERM FACILITY
 
19
2.1
Term Loan Commitment  
19
2.2
Nature of Lenders’ Obligations with Respect to the Term Loan  
19
2.3
Bridge Loan Funding Fee  
19
2.4
Term Loan Request  
20
2.5
Making the Term Loan  
20
2.6
Notes  
20
         
3. INTEREST RATES
 
20
3.1
Interest Rate  
20
3.2
Interest After Default  
20
   
3.2.1
Acknowledgment
 
20
3.3
Interest Rate Limitation  
21
         
4. PAYMENTS
 
21
4.1
Payments  
21
4.2
Pro Rata Treatment of Lenders  
21
4.3
Payment Dates  
21
 
4.3.1
Interest Payment Dates
 
21
 
4.3.2
Principal Payment Dates; Warrants
 
22
4.4
Voluntary Prepayments  
22
 
4.4.1
Right to Prepay
 
22
4.5
Mandatory Prepayments  
22
 
4.5.1
Sale of Assets
 
22
 
4.5.2
Rights Offering
 
23
 
4.5.3    
Consummation of a Substitute Transaction
 
23
  4.6  
Additional Compensation in Certain Circumstances  
23
 
 
i

 

 
4.6.1
Increased Costs or Reduced Return Resulting from Taxes, Expenses, Etc.
 
23
 
4.6.2
Losses Caused by Borrower
 
24
 
4.6.3
Mitigation Obligation
 
24
4.7
INDEMNIFICATION BY BORROWER  
25
     
5. REPRESENTATIONS AND WARRANTIES
 
26
  5.1  
Representations and Warranties  
26
 
5.1.1
Organization and Qualification
 
26
 
5.1.2
Capitalization and Ownership
 
26
 
5.1.3
Subsidiaries
 
26
 
5.1.4
Power and Authority
 
26
 
5.1.5
Validity and Binding Effect
 
26
 
5.1.6
No Conflict
 
27
 
5.1.7
Litigation
 
27
 
5.1.8
Use of Proceeds
 
27
 
5.1.9
Full Disclosure
 
27
 
5.1.10
Taxes
 
27
 
5.1.11
Consents and Approvals
 
28
 
5.1.12
No Event of Default; Compliance with Instruments
 
28
 
5.1.13
Security Interests
 
28
 
5.1.14
Real Property
 
28
 
5.1.15
Status of the Collateral
 
29
 
5.1.16
Insurance
 
29
 
5.1.17
Compliance with Laws
 
29
 
5.1.18
Material Contracts; Burdensome Restrictions
 
29
 
5.1.19
Investment Companies; Regulated Entities
 
29
 
5.1.20
Environmental Matters
 
30
 
5.1.21
[Reserved]
 
31
 
5.1.22
Financial Statements
 
31
 
5.1.23
Governmental Approvals
 
31
 
5.1.24
ERISA
 
32
 
5.1.25
Immunity
 
32
 
5.1.26
Utilities, Etc.
 
32
         
6. CONDITIONS OF LENDING
 
32
  6.1  
Closing Date Loan  
32
 
6.1.1
Officer’s Certificate
 
32
 
6.1.2
Secretary’s Certificate
 
33
 
6.1.3
Delivery of Loan Documents
 
33
 
6.1.4
Opinion of Counsel
 
33
 
6.1.5
Legal Details
 
34
 
6.1.6
Payment of Fees
 
34
 
6.1.7
Due Diligence
 
34
 
6.1.8
Consents
 
34
 
6.1.9
No Violation of Laws
 
34
 
6.1.10
No Actions or Proceedings
 
34
 
6.1.11   
Material Adverse Change or Effect
 
35

 
ii

 

 
6.1.12
Financial Information, Etc.
 
35
 
6.1.13
Cargill Conversion
 
35
         
7. COVENANTS
 
35
  7.1  
Affirmative Covenants  
35
 
7.1.1
Preservation of Existence, Etc.
 
35
 
7.1.2
Payment of Liabilities, Including Taxes, Etc.
 
35
 
7.1.3
Maintenance of Insurance
 
36
 
7.1.4
Visitation Rights
 
36
 
7.1.5
Keeping of Records and Books of Account
 
36
 
7.1.6
Compliance with Laws
 
36
 
7.1.7
Use of Proceeds
 
37
 
7.1.8
Further Assurances
 
37
 
7.1.9
Accounting and Financial Management
 
37
 
7.1.10
Governmental Approvals
 
37
 
7.1.11
Project Construction; Maintenance
 
38
 
7.1.12
Performance of Project Documents
 
38
 
7.1.13
Environmental Compliance
 
38
 
7.1.14
Expenses
 
39
 
7.1.15
Rights Offering
 
39
 
7.1.16
Use of Term Loan Proceeds
 
39
  7.2  
Negative Covenants  
39
 
7.2.1
Subsidiary Indebtedness
 
39
 
7.2.2
BFE Energy Indebtedness
 
40
 
7.2.3
Indebtedness
 
40
 
7.2.4
Subsidiary Liens
 
41
 
7.2.5
BFE Energy Liens
 
41
 
7.2.6
Liens
 
41
 
7.2.7
Guaranties
 
41
 
7.2.8
Loans and Investments
 
41
 
7.2.9
Dividends and Related Distributions
 
41
 
7.2.10
Liquidations, Mergers, Consolidations, Acquisitions
 
41
 
7.2.11
Dispositions of Assets or Subsidiaries
 
42
 
7.2.12
Affiliate Transactions
 
42
 
7.2.13
Subsidiaries, Partnerships and Joint Ventures
 
43
 
7.2.14
Continuation of or Change in Business
 
43
 
7.2.15
Fiscal Year
 
44
 
7.2.16
Issuance of Stock
 
44
 
7.2.17
Changes in Documents
 
44
 
7.2.18
Inconsistent Agreements
 
44
 
7.2.19
Cancellation of Indebtedness
 
44
 
7.2.20
[Reserved]
 
45
 
7.2.21
Tax Shelter Regulations
 
45
 
7.2.22
Amendment of Additional Project Documents
 
45
 
7.2.23
ERISA
 
45
 
7.2.24   
Certain Agreements
 
45
7.3
Reporting Requirements  
45
 
 
iii

 
  
 
7.3.1
Quarterly Financial Statements
 
46
 
7.3.2
Annual Financial Statements
 
46
 
7.3.3
Certificate of the Borrower
 
46
 
7.3.4
Notice of Default
 
46
 
7.3.5
Certain Events
 
46
 
7.3.6
Other Information
 
48
 
7.3.7
Environmental Reports
 
48
 
7.3.8
Operating Plan and Budget
 
48
   
   
8. DEFAULT
 
49
  8.1  
Events of Default  
49
 
8.1.1
Payments Under Loan Documents
 
49
 
8.1.2
Breach of Warranty
 
49
 
8.1.3
Breach of Certain Covenants
 
50
 
8.1.4
Breach of Other Covenants
 
50
 
8.1.5
Defaults in Other Agreements or Indebtedness
 
50
 
8.1.6
Final Judgments or Orders
 
50
 
8.1.7
Loan Document Unenforceable
 
51
 
8.1.8
Uninsured Losses; Proceedings Against Assets
 
51
 
8.1.9
Termination of Rights Offering
 
51
 
8.1.10
Insolvency
 
51
 
8.1.11
Cessation of Business
 
51
 
8.1.12
Change of Control
 
51
 
8.1.13
Breach of Material Agreement
 
51
 
8.1.14
Executive Management Waiver Agreements
 
51
 
8.1.15
Involuntary Proceedings
 
52
 
8.1.16   
Voluntary Proceedings
 
52
  8.2  
Consequences of Event of Default  
52
 
8.2.1
Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings
 
52
 
8.2.2
Bankruptcy, Insolvency or Reorganization Proceedings
 
52
 
8.2.3
Suits, Actions, Proceedings
 
52
 
8.2.4
Application of Proceeds
 
53
 
8.2.5
Other Rights and Remedies
 
53
         
9. THE ADMINISTRATIVE AGENT
 
53
9.1
Appointment  
53
9.2
Duties; Delegation of Duties  
54
 
9.2.1
Collateral Matters
 
54
 
9.2.2
Administrative Agent May File Proofs of Claim
 
54
9.3
Nature of Duties; Independent Credit Investigation  
55
9.4
Actions in Discretion of Administrative Agent; Instructions From the Lenders  
55
9.5
Exculpatory Provisions; Limitation of Liability  
56
9.6
Reimbursement and Indemnification of Administrative Agent by Lenders  
57
  9.7  
Reliance by Administrative Agent  
57
  9.8  
Notice of Default  
57
 
 
iv

 

9.9   
Notices  
57
9.10 
Lenders in Their Individual Capacities; Administrative Agent in its Individual Capacity  
58
9.11 
Holders of Notes  
58
9.12 
Equalization of Lenders
58
9.13 
Successor Administrative Agent  
58
9.14 
Availability of Funds  
59
9.15 
Calculations  
59
9.16 
Beneficiaries  
59
     
10. MISCELLANEOUS
 
59
10.1  
Modifications, Amendments or Waivers  
59
 
10.1.1
Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment
 
60
 
10.1.2
Release of Collateral
 
60
 
10.1.3
Miscellaneous
 
60
10.2  
No Implied Waivers; Cumulative Remedies; Writing Required  
60
10.3  
Reimbursement and Indemnification of Lenders by the Borrower; Taxes  
61
10.4  
Holidays  
61
10.5  
Notices  
62
10.6  
Severability  
62
10.7  
Governing Law  
62
10.8  
Prior Understanding  
62
10.9  
Duration; Survival  
62
10.10
Successors and Assigns  
63
10.11
Confidentiality  
63
 
10.11.1
General
 
63
 
10.11.2
Sharing Information With Affiliates of the Lenders
 
64
 
10.11.3   
Nonliability of Lenders
 
64
10.12
Counterparts  
65
10.13
Administrative Agent’s or Lender’s Consent  
65
10.14
Exceptions  
65
10.15
CONSENT TO FORUM; WAIVER OF JURY TRIAL  
65
10.16
Tax Withholding Clause  
66
10.17
[Reserved]  
67
10.18
Limitation of Recourse  
67
10.19
No Reliance on Administrative Agent’s Customer Identification Program  
67
 
v


LIST OF SCHEDULES AND EXHIBITS

SCHEDULES
 
SCHEDULE 1.1(A)
-
COMMITMENTS OF LENDERS
SCHEDULE 1.1(B)
-
AFFILIATES OF BORROWER
SCHEDULE 5.1.1
-
QUALIFICATIONS TO DO BUSINESS
SCHEDULE 5.1.2
-
CAPITALIZATION
SCHEDULE 5.1.14   
-
REAL PROPERTY
SCHEDULE 5.1.15
-
LLC AGREEMENTS
SCHEDULE 5.1.18
-
MATERIAL CONTRACTS
SCHEDULE 5.1.20
-
ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.2.12
-
TRANSACTIONS WITH AFFILIATES
 
EXHIBITS
 
EXHIBIT 1.1(A)       
-
RIGHTS OFFERING LETTER AGREEMENT
EXHIBIT 1.1(B)
-
FORM OF EXECUTIVE MANAGEMENT WAIVER AGREEMENT
EXHIBIT 1.1(P)
-
FORM OF PLEDGE AGREEMENT
EXHIBIT 1.1(R)
-
FORM OF NOTE
EXHIBIT 1.1(S)
   
FORM OF WARRANT AGREEMENT
EXHIBIT 2.4
-
FORM OF LOAN REQUEST
 
 
vi

 

 
THIS LOAN AGREEMENT (this “Agreement”) dated September 24, 2010, is entered into by and among BioFuel Energy Corp., a Delaware corporation (“Borrower”), the lenders listed as lenders on Schedule 1.1(A) attached hereto (the “Lenders”), and Greenlight APE, LLC, in its capacity as administrative agent for the Lenders under this Agreement (hereinafter referred to in such capacity as the “Administrative Agent”).
 
WITNESSETH:
 
WHEREAS, the Borrower owns a majority of the membership interests of BioFuel Energy, LLC, a Delaware limited liability company (“BFE Energy”), which, in turn, wholly-owns BFE Holdings, LLC, a Delaware limited liability company (“BFE Holdings”), which, in turn, wholly-owns BFE Operating Company, LLC, a Delaware limited liability company (“BFE Operating”), which, in turn, wholly-owns both of Buffalo Lake Energy, LLC, a Delaware limited liability company (“Buffalo Lake”) and Pioneer Trail Energy LLC, a Delaware limited liability company (“Pioneer Trail”);
 
WHEREAS, BFE Operating, Buffalo Lake and Pioneer Trail (together in such capacity, the “Senior Credit Agreement Borrowers”) joined into as borrowers, that certain Credit Agreement, as the same may be amended, modified or supplemented from time to time (the “Senior Credit Agreement”), dated as of September 25, 2006, by and among the Senior Credit Agreement Borrowers, Deutsche Bank Trust Company Americas, BNP Paribas and various financial institutions as Lenders (the “Senior Lenders”);
 
WHEREAS, in connection with entering into the Senior Credit Agreement, the Senior Lenders made available to the Senior Credit Agreement Borrowers a Working Capital Loan (as defined in the Senior Credit Agreement);
 
WHEREAS, the Working Capital Loan is due and payable on September 27, 2010;
 
WHEREAS, in order to satisfy repayment obligations under the Senior Credit Agreement related to the Working Capital Loan, the Lenders are willing to provide a $19,420,620 term loan upon the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows:
 
1.  CERTAIN DEFINITIONS
 
1.1           Certain Definitions.  In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, respectively:
 
Additional Project Document” shall mean any contract or agreement (including a sub-contract) relating to the development, construction, testing, operation, maintenance, repair, financing or use of the Project entered into by any Borrower Affiliate Party or a sub-contractor with any other Person subsequent to the date of this Agreement (including any contract(s) or agreement(s) entered into in substitution for any Project Document that has been terminated in accordance with its terms or otherwise).
 

 
Administrative Agent” shall mean Greenlight APE, LLC, a Delaware limited liability company, as administrative agent, and its successors and assigns.
 
Affiliate” as to any Person shall mean any other Person (i) which directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) which beneficially owns or holds 10% or more of any class of the voting or other equity interests of such Person, (iii) 10% or more of any class of voting interests or other equity interests of which is beneficially owned or held, directly or indirectly, by such Person; or (iv) with respect to any Lender, any entity administered or managed by such Lender or an Affiliate or investment advisor thereof.  Control, as used in this definition, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.
 
Agreement” shall mean this Loan Agreement, as the same may be supplemented or amended from time to time, including all schedules and exhibits.
 
Anti-Terrorism Law” shall mean the Laws referred to, directly or indirectly, in 10.19 [No Reliance on Administrative Agent’s Customer Identification Program] and Executive Order 13224.
 
Authorized Officer” shall mean as to the Borrower, its President, Chief Executive Officer, Chief Financial Officer, General Counsel and those individuals, designated by written notice to the Administrative Agent from the Borrower, authorized to execute notices, reports and other documents on behalf of Borrower required hereunder.  The Borrower may amend such list of individuals from time to time by giving written notice of such amendment to the Administrative Agent.
 
BFE Energy” has the meaning specified in the recitals to this Agreement.
 
BFE Holdings” has the meaning specified in the recitals to this Agreement.
 
BFE Operating” has the meaning specified in the recitals to this Agreement.
 
Borrower” has the meaning specified in the preamble to this Agreement.
 
Borrower Affiliate Parties” shall mean the Borrower and all of the Borrower’s Subsidiaries and Borrower Affiliate Party shall mean any of them.
 
Borrowing Date” shall mean, with respect to the Loan, the Closing Date.
 
Bridge Loan Funding Fee” shall mean an amount equal to $776,825.
 
Buffalo Lake” shall mean Buffalo Lake Energy, LLC, a limited liability company organized and existing under the laws of the State of Delaware.
 
2

 
Buffalo Lake Commercial Operation Date” shall mean the date of the first crush of corn at the Buffalo Lake Plant.
 
Buffalo Lake Grain Facility Lease” shall have the meaning set forth in the Senior Credit Agreement.
 
Buffalo Lake Land” shall mean the site upon which the Buffalo Lake Plant is installed, together with any fixtures and civil works constructed thereon and any other easements, licenses and other real property rights and interests required for the operation of such Plant, including the land referred to in the Buffalo Lake Grain Facility Lease.
 
Buffalo Lake Plant” shall mean the fuel grade, denatured ethanol production facility located near Fairmont, Minnesota, with a nameplate capacity of one hundred fifteen million (115,000,000) gallons-per-year, including the Buffalo Lake Land on which such facility is located, and all buildings, structures, improvements, easements and other property related thereto (including all associated electrical, gas, steam, and water interconnection, storage and treatment facilities, to the extent owned by any Borrower Affiliate Party).
 
Buffalo Lake Project Documents” shall mean the following documents all defined in the Senior Credit Agreement:  (i) the Buffalo Lake Access Agreement, the Buffalo Lake EPC Contract, the Buffalo Lake O&M Agreement (when executed and delivered), the Buffalo Lake Corn Supply Agreement, the Buffalo Lake Corn Future Advisory Agreement, the Buffalo Lake Risk Management Agreement, the Buffalo Lake Distillers Grains Marketing Agreement, the Buffalo Lake Ethanol Marketing Agreement, the Buffalo Lake Master Agreement, the Buffalo Lake Gas Supply Agreement(s), the Buffalo Lake Gas Transportation Services Agreement, the Buffalo Lake NAESB Agreement, the Buffalo Lake Gas Supply Representation and Management Agreement, the Buffalo Lake Gas Pipeline Construction and Management Agreement, the Buffalo Lake Grain Facility Lease, the Buffalo Lake Land Purchase Agreements, the Buffalo Lake Delta-T License Agreement, the Buffalo Lake Limited Liability Company Agreement, the Buffalo Lake Management Services Agreement (when executed and delivered), the Buffalo Lake Rail Car Exchange Agreement, the Buffalo Lake Railroad Car Lease Agreement, the TIC Indemnity Confirmation (Buffalo Lake), the Buffalo Lake Payment and Performance Bonds, the Buffalo Lake Escrow Agreement, UP Consent (Buffalo Lake), UP Industry Track Contract (Buffalo Lake) and, at all times after the execution and delivery thereof, each Material Additional Project Document; (ii) a Consent Agreement (as defined in the Senior Credit Agreement) relating to each of the following Project Documents:  the Buffalo Lake Access Agreement, the Buffalo Lake EPC Contract, the Buffalo Lake O&M Agreement, the Buffalo Lake Corn Supply Agreement, the Buffalo Lake Corn Future Advisory Agreement, the Buffalo Lake Risk Management Agreement, the Buffalo Lake Distillers Grains Marketing Agreement, the Buffalo Lake Ethanol Marketing Agreement, the Buffalo Lake Master Agreement, the Buffalo Lake Gas Supply Agreement, the Buffalo Lake Gas Supply Representation and Management Agreement, the Buffalo Lake Gas Transportation Services Agreement, the Buffalo Lake NAESB Agreement, the Buffalo Lake Gas Pipeline Construction and Management Agreement, the Buffalo Lake Grain Facility Lease, the Buffalo Lake Delta-T License Agreement, the Buffalo Lake Rail Car Exchange Agreement, the Buffalo Lake Rail Car Lease Agreement and the Buffalo Lake Management Services Agreement and (iii) at all times after the execution and delivery of any Material Additional Project Document, a Consent Agreement with respect thereto.
 
3

 
Business Day” shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in New York, New York.
 
Capital Expenditures” shall mean all expenditures (by the expenditure of cash or the incurrence of Indebtedness) during any measuring period for any fixed assets or improvements or for replacements, substitutions, or additions thereto, that have a useful life of more than one year and that are required to be capitalized under GAAP.
 
Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations and/or rights in or other equivalents (however designated, whether voting or nonvoting, ordinary or preferred) in the equity or capital of such Person, now or hereafter outstanding, and any and all rights, warrants or options exchangeable for or convertible into any thereof.
 
Cargill” shall mean Cargill, Incorporated, a corporation organized and existing under the laws of the State of Delaware.
 
Cargill Acknowledgement Letter” shall mean the acknowledgement letter by and between Cargill and the Borrower, dated as of September 23, 2010.
 
Cargill Payment” shall have the meaning provided for in Section 6.1.13 [Cargill Conversion].
 
Center Point Energy” shall mean Center Point Energy, Inc., a corporation organized and existing under the laws of the State of Texas.
 
Change of Control” shall mean:
 
(i)           at any time, BFE Holdings shall cease to (i) own and control, directly, 100% of the total Voting Stock or economic interests of BFE Operating or (ii) own and control, indirectly, 100% of the total Voting Stock or economic interests of each of Buffalo Lake and Pioneer Trail, or (iii) possess, directly or indirectly, the power to direct or cause the direction of all the management, policies and decisions of any Senior Credit Agreement Borrower;
 
(ii)          at any time, BFE Energy shall cease to either (i) own and control, directly or indirectly, 100% of the total Voting Stock or economic interests of any Senior Credit Agreement Borrower, or (ii) possess, directly or indirectly, the power to direct or cause the direction of all the management, policies and decisions of any Senior Credit Agreement Borrower;
 
(iii)         at any time, BFE Operating shall cease to own and control, directly, 100% of the total Voting Stock or economic interest of each of Buffalo Lake and Pioneer Trail;
 
4

 
(iv)        at any time, the Borrower shall cease to own and control, directly or indirectly, at least 78.7% of the total Voting Stock or economic interest of BFE Energy;
 
(v)         at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than one or more Permitted Holders, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 25% or more of the voting power of the Common Stock on a Fully-Diluted basis of the Borrower;
 
(vi)        during any period of 12 consecutive months, a majority of the members of the board of directors of the Borrower cease to be composed of individuals (i) who were members of that board on the first day of such period, (ii) whose election or nomination to the board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of the board, (iii) whose election or nomination to the board was approved by individuals referred to in clause (i) or (ii) above constituting at the time of such election or nomination at least a majority of the board or (iv) whose election or nomination was approved by one or more Permitted Holders (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of the board occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or
 
(vii)       any Person (other than a Permitted Holder) or two or more Persons (none of whom are Permitted Holders) acting in concert that shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower, or control over the Common Stock on a Fully-Diluted basis (and taking into account all such securities that such Person(s) or group has the right to acquire pursuant to any option right) representing 25% or more of the combined voting power of such securities.
 
CIP Regulations” shall have the meaning provided for in Section 10.19 [No Reliance on Administrative Agent’s Customer Identification Program].
 
Closing Date” shall mean the date hereof.  The closing shall take place at 11:00 a.m. in the New York offices of Akin Gump Strauss Hauer & Feld, LLP, or at such other time and place as the parties agree.
 
Collateral” shall mean all the issued and outstanding membership interest of BFE Energy owned by the Borrower as of the Closing Date, which as of the date hereof is equal to 78.7% of the LLC Interests.
 
5

 
Commercial Operation Date” shall mean, the Buffalo Lake Commercial Operation Date and the Pioneer Trail Commercial Operation Date, as the case may be.
 
Commitment” shall mean, as to any Lender at any time, the amount initially set forth opposite its name on Schedule 1.1(A) (as it may be amended in accordance with Section 2.1) in the column labeled “Amount of Commitment for Term Loan,” and “Commitments” shall mean the aggregate Commitments of all of the Lenders, all as may be reduced from time to time hereunder, provided that, for the avoidance of doubt, following the Closing Date, the amount of aggregate Commitments of all Lenders shall be equal to $0.
 
Common Stock” shall mean the common stock of the Borrower, which as of the Closing Date is traded on the NASDAQ, a national securities exchange.
 
Cornerstone” shall mean Cornerstone Energy, Inc., a corporation organized and existing under the laws of the State of Nebraska.
 
Delta-T” shall mean Delta-T Corp., a corporation organized and existing under the laws of Virginia.
 
Dollar, Dollars, U.S. Dollars” and the symbol $ shall mean lawful money of the United States of America.
 
Environmental Claim” shall mean, with respect to any Person, (i) any notice, claim, administrative, regulatory or judicial or equitable action, suit, Lien, judgment or demand by any other Person or (ii) any other written communication by any Official Body, in either case alleging or asserting such Person's liability for investigatory costs, cleanup costs, consultants’ fees, governmental response costs, damages to natural resources (including, without limitation, wetlands, wildlife, aquatic and terrestrial species and vegetation) or other Property, property damages or personal injuries, or seeking injunctive relief, fines or penalties arising out of, based on or resulting from (x) the presence, or Release into the environment, of any Hazardous Material at any location, whether or not owned by such Person or (y) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law or Governmental Approval issued under any Environmental Law.
 
Environmental Law” shall mean any and all laws relating to protection of the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, petrochemicals or petroleum, chemicals or industrial, toxic or hazardous substances or wastes into the environment including ambient air, surface water, ground water or land or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes.
 
EPC Contractor” shall mean TIC – The Industrial Company Wyoming, Inc., a corporation organized and existing under the laws of Wyoming.
 
ERISA” shall mean the Employee Retirement Income Securities Act of 1974, as amended, and the rules and regulations promulgated thereunder.
 
6

 
ERISA Affiliate” shall mean any entity with which an entity is considered a single employer under Section 414(b), (c) or (m) of the Internal Revenue Code.
 
Events of Default” shall mean any of the events described in Section 8.1 [Events of Default] and referred to therein as an “Event of Default.”
 
Executive Management Waiver Agreement” shall mean a waiver agreement entered into by certain executives of the Borrower or an Affiliate of the Borrower, which are identified on Schedule 1.1(B), in the form of Exhibit 1.1(B) dated the date hereof, executed and delivered by each of the respective executives to the Administrative Agent for the benefit of the Lenders.
 
Expropriation Event” shall mean (a) any condemnation, nationalization, seizure or expropriation by an Official Body of all or a substantial portion of the Project or the Property or the assets of any Borrower Affiliate Party or of its share capital, (b) any assumption by an Official Body of control of the Property, assets or business operations of any Borrower Affiliate Party or of its share capital, (c) any taking of any action by an Official Body for the dissolution or disestablishment of any Borrower Affiliate Party or (d) any taking of any action by an Official Body that would prevent any Borrower Affiliate Party from carrying on its business or operations or a substantial part thereof.
 
Fully Diluted Basis” shall mean, at a given time, all shares of Common Stock of the Borrower issued and outstanding at such time, plus all such shares then issuable upon exercise of all then outstanding options, warrants and other convertible securities (including LLC Interests), whether or not such options, warrants or convertible securities are actually exercisable or convertible at such time, all calculated on an “as converted” to common stock basis.
 
GAAP” shall mean generally accepted accounting principles in the United States of America as are in effect from time to time, subject to the provisions of Section 1.3 [Accounting Principles], and applied on a consistent basis both as to classification of items and amounts.
 
Good Industry Practices” means the professional practices, methods, equipment, specifications and safety and output standards and industry codes of the United States ethanol industry for projects of a similar type and capacity as the Project, with respect to the design, installation, operation, maintenance and use of equipment and similar or better machinery, all of the above in compliance with applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character and in compliance with all applicable Laws.  Good Industry Practices are not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as practiced in the industry.
 
Governmental Approval” shall mean any authorization, consent, approval, license, ruling, permit, tariff, rate, certification, exemption, filing, variance, claim, order, judgment, decree, publication, notice to, declaration of or with, or registration by or with, any Official Body.
 
7

 
Guaranty” of any Person shall mean any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any other Person in any manner, whether directly or indirectly, including any agreement to indemnify or hold harmless any other Person, any performance bond or other suretyship arrangement and any other form of assurance against loss, except endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business and except obligations in the nature of subrogation or guarantees for the benefit of Persons providing performance bonds for actions by Borrower specifically incident to the issuance of such performance bonds.
 
Hazardous Material” shall mean any substance that is regulated or could lead to liability under any Environmental Law, including, but not limited to, any petroleum or petroleum product, asbestos in any form that is or could become friable, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls (PCB’s), hazardous waste, hazardous material, hazardous substance, toxic substance, contaminant or pollutant, as defined or regulated as such under, any applicable Environmental Law.
 
Indebtedness” shall mean, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of:  (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (iv) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements but excluding operating leases) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than ninety (90) days past due), and (v) any Guaranty of Indebtedness for borrowed money.
 
Indemnified Liabilities” shall have the meaning provided for in Section 4.7 [Indemnification by Borrower].
 
Indemnified Party” shall have the meaning provided for in Section 4.7 [Indemnification by Borrower].
 
Independent Engineer” shall mean Luminate, LLC or any other Person from time to time appointed by the Senior Lenders for purposes of the Senior Credit Agreement.
 
Interest Rate” shall mean a rate per annum of 12.5%, provided that in the event the Term Loan is not repaid in full by the Borrower on or before the Maturity Date then the rate per annum shall increase to the Penalty Rate.
 
Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.
 
8

 
Investment” in any Person shall mean, without duplication: (a) the acquisition (whether for cash, securities, other Property, services or otherwise) or holding of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of such Person, or any agreement to make any such acquisition or to make any capital contribution to such Person; or (b) the making of any deposit with, or advance, loan or other extension of credit to, such Person.
 
Labor Contracts” shall mean all employment agreements, employment contracts, collective bargaining agreements and other agreements among Borrower, any Subsidiary of Borrower and their employees.
 
Land” shall mean, collectively, the Buffalo Lake Land and the Pioneer Trail Land.
 
Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, ruling, order, injunction, writ, decree, judgment, authorization or approval, award of or settlement agreement with or issued by any Official Body.
 
Lenders” shall mean the institutions listed as lenders named on Schedule 1.1(A) and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Lender.
 
Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement (other than precautionary financing statement filed in respect of operating leases) or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
 
LLC Interests” shall mean in respect of any limited liability company, its outstanding limited liability company interests or units and the voting rights associated therewith.
 
Loan” or “Term Loan” shall mean the Term Loan made by a Lender or the Lenders to the Borrower pursuant to Section 2.1 [Term Loan Commitment] on the Closing Date.
 
Loan Documents” shall mean this Agreement, the Cargill Acknowledgement Letter, the Notes, the Pledge Agreement, the Warrant Agreement, the Rights Offering Letter Agreement, the Executive Management Waiver Agreements, and any other instruments, certificates or documents delivered or contemplated to be delivered hereunder or thereunder or in connection herewith or therewith, as the same may be supplemented or amended from time to time in accordance herewith or therewith, and Loan Document shall mean any of the Loan Documents.
 
Loan Request” shall have the meaning provided for in Section 2.4 [Term Loan Request].
 
9

 
Maintenance Capital Expenses” shall mean all expenses incurred by any Borrower Affiliate Party (including for labor) for regularly scheduled (or reasonably anticipated) major maintenance of the Project (including, without limitation, teardowns, overhauls, capital improvements and replacements of major components of either Plant) in accordance with Good Industry Practices and vendor and supplier recommendations.
 
Material Additional Project Document” shall mean any Additional Project Document if (i) the aggregate cost or value of goods and services to be acquired by any Borrower Affiliate Party pursuant thereto could reasonably be expected to exceed Two Million Dollars ($2,000,000) or the equivalent in any calendar year, (ii) the aggregate amount of termination fees, liquidated damages or aggregate liability which could be incurred by any Borrower Affiliate Party in respect of such Additional Project Document in any single calendar year could reasonably be expected to exceed Two Million Dollars ($2,000,000) or the equivalent, (iii) such Additional Project Document provides for the sale of any service, output or other product by any Borrower Affiliate Party, other than a Buffalo Lake Permitted Long-Term Sales Agreement (as defined in the Senior Credit Agreement) or a Pioneer Trail Permitted Long-Term Sales Agreement (as defined in the Senior Credit Agreement), (iv) such Additional Project Document provides for the purchase of gas by any Borrower Affiliate Party other than pursuant to and in accordance with the Risk Management Policy (as defined in the Senior Credit Agreement), or as otherwise permitted under clauses (i) or (ii) above, or (v) such Additional Project Document provides for the purchase of denaturants by any Borrower Affiliate Party other than a Buffalo Lake Permitted Denaturant Agreement (as defined in the Senior Credit Agreement), a Pioneer Trail Permitted Denaturant Agreement (as defined in the Senior Credit Agreement), or as otherwise permitted under clauses (i) or (ii) above.
 
Material Adverse Change” or “Material Adverse Effect” shall mean any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect upon the validity or enforceability of this Agreement or any other Loan Document, (b) is or could reasonably be expected to be material and adverse to the business, properties, Projects, assets, condition (financial or otherwise) or results of operations of the Borrower Affiliate Parties taken as a whole, (c) impairs or could reasonably be expected to impair the ability of any of the Borrower Affiliate Parties to duly and punctually pay or perform its Indebtedness, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Administrative Agent or any of the Lenders, to the extent permitted, to enforce their legal remedies pursuant to this Agreement or any other Loan Document.
 
Maturity Date” shall mean March 24, 2011.
 
Maximum Rate” shall have the meaning provided for in Section 3.3 [Interest Rate Limitation].
 
Mezzanine Lenders” shall mean the parties who are lenders under the Mezzanine Loan Agreement.
 
Mezzanine Loan Agreement” shall mean the Loan Agreement, dated as of September 25, 2006, by and among BioFuel Energy, LLC, the Mezzanine Lenders, Greenlight APE, L.L.C. in such capacity as the administrative agent, as the same may be amended or supplemented from time to time.
 
10

 
Mezzanine Loan Documents” shall mean the documents described in the Mezzanine Loan Agreement.
 
Multiemployer Plan” shall mean any multiemployer plan as defined in Section 4001(a)(3) of ERISA.
 
Necessary Governmental Approvals” shall have the meaning provided for in Section 5.1.24 [Governmental Approvals].
 
Notes” or “Term Notes” shall mean collectively and Note or Term Note shall mean separately all the Notes or Term Notes as the case may be of the Borrower in the form of Exhibit 1.1(R) evidencing the Term Loan, together with all amendments, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.
 
Notices” or “Notice” shall have the meanings provided for in Section 10.5 [Notices].
 
NRC” shall mean Nebraska Resources Company, LLC, a limited liability company organized and existing under the laws of Oklahoma and a subsidiary of Seminole.
 
Obligation” shall mean any obligation or liability of any Borrower Affiliate Party to the Administrative Agent or any of the Lenders, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with this Agreement, the Notes or any other Loan Document. Obligations arising solely in connection with Permitted Senior Debt are not “Obligations” hereunder.
 
Official Body” shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, board, bureau, central bank, commission, department or instrumentality thereof or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
 
Operating Year” shall mean each year (or portion thereof) occurring after the first Commercial Operation Date shall have occurred and thereafter each calendar year.
 
Operation and Maintenance Expenses” shall mean (with respect to each Plant that has achieved its Commercial Operation Date), for any period on or after the Commercial Operation Date for each such Plant, collectively, without duplication, all reasonable (i) expenses of administering and operating the Project and of maintaining it in accordance with Good Industry Practices (including expenses which may be capitalized) incurred by any Borrower Affiliate Party, (ii) grain and fuel procurement and transportation costs payable by any Borrower Affiliate Party, (iii) direct operating and maintenance costs of the Plants payable by any Borrower Affiliate Party, (iv) insurance premiums payable by any Borrower Affiliate Party, (v) property, sales, value-added and excise taxes payable by any Borrower Affiliate Party (other than taxes imposed on or measured by income or receipts), (vi) costs and fees incurred by any Borrower Affiliate Party in connection with obtaining and maintaining in effect the Governmental Approvals required in connection with the Project, (vii) legal, accounting and other professional fees incurred in the ordinary course of business in connection with the Project payable by any Borrower Affiliate Party and (viii) payments payable by any Borrower Affiliate Party under and pursuant to any Management Services Agreements (as defined in the Senior Credit Agreement); provided, that “Operation and Maintenance Expenses” shall not include (a) Project costs or (b) payments due under the Permitted Senior Debt.
 
11

 
Operator” shall mean an operator of the Plants (i) during any time when the Indebtedness evidenced by the Senior Loan Documents is outstanding, acceptable to the Senior Lenders and (ii) thereafter, acceptable to the Administrative Agent and the Required Lenders.
 
Patriot Act” shall mean United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) of 2001, and the rules and regulations promulgated thereunder.
 
Penalty Rate” shall mean a rate per annum of 14.5%.
 
Performance Bond” shall have the meaning set forth in the Senior Credit Agreement.
 
Permitted Holder” means (i) the Administrative Agent or any Affiliate of the Administrative Agent, (ii) the Lenders or any Affiliate of any of the Lenders or (iii) any Affiliate of Third Point Advisors, L.L.C. or pooled investment vehicle managed by Third Point Advisors, L.L.C.
 
Permitted Investments” shall mean:
 
(i)           direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition;
 
(ii)          commercial paper maturing in 180 days or less rated not lower than A-1, by Standard & Poor’s or P-1 by Moody’s Investors Service, Inc. on the date of acquisition;
 
(iii)         demand deposits, time deposits or certificates of deposit maturing within one year in commercial banks whose obligations are rated A-1, A or the equivalent or better by Standard & Poor’s on the date of acquisition;
 
(iv)         money market funds rated at least “AA” by Standard & Poors or “Aa” by Moody’s Investor Services, Inc.;
 
(v)          Investments consisting of promissory notes or other non-cash consideration received as proceeds of asset dispositions permitted by Section 7.2.11 [Dispositions of Assets or Subsidiaries];
 
12

 
(vi)        Investments by the Borrower Affiliate Parties not otherwise permitted hereunder, provided that the aggregate amount of all such outstanding Investments does not to exceed $300,000 at any time; and
 
(vii)       Investments consisting of equity interests in, and capital contributions to, Subsidiaries of the Borrower.
 
Permitted Liens” shall mean:
 
(i)           Liens for taxes, assessments, or similar charges to the extent not required to be paid under Section 7.1.2 [Payment of Liabilities, Including Taxes, Etc.];
 
(ii)          Pledges or deposits made in the ordinary course of business to secure payment of worker’s compensation, or to participate in any fund in connection with worker’s compensation, unemployment insurance, old-age pensions or other social security programs; and
 
(iii)         Liens arising out of a judgment or award that (i) does not constitute an Event of Default under Section 8.1.6 and (ii) is subject to a good faith contest by the Borrower Affiliate Parties.
 
Permitted Mezzanine Debt” shall mean the secured mezzanine debt provided to BioFuel Energy, LLC by the Mezzanine Lenders, pursuant to the Mezzanine Loan Agreement dated September 25, 2006.
 
Permitted Senior Debt” shall mean the secured senior debt provided to BFE Operating, Buffalo Lake and Pioneer Trail by the Senior Lenders, pursuant to the Senior Credit Agreement.
 
Person” shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, joint venture, government or political subdivision or agency thereof, or any other entity.
 
Pioneer Trail” shall mean Pioneer Trail Energy, LLC, a Delaware limited liability company.
 
Pioneer Trail Commercial Operation Date” shall mean the date of the first crush of corn at the Pioneer Trail Plant.
 
Pioneer Trail Project Documents” shall mean the following contracts as defined in the Senior Credit Agreement: (i) the Pioneer Trail Access Agreement, the Pioneer Trail EPC Contract, the Pioneer Trail O&M Agreement (when executed and delivered), the Pioneer Trail Corn Supply Agreement, the Pioneer Trail Corn Future Advisory Agreement, the Pioneer Trail Risk Management Agreement, the Pioneer Trail Distillers Grains Marketing Agreement, the Pioneer Trail Ethanol Marketing Agreement, the Pioneer Trail Master Agreement, the Pioneer Trail Gas Supply Agreement(s), the Pioneer Trail Gas Transportation Services Agreement, the Pioneer Trail NAESB Agreement, the Pioneer Trail Gas Supply Representation and Management Agreement, the Pioneer Trail Gas Pipeline Construction and Management Agreement, the Pioneer Trail Grain Facility Lease, the Pioneer Trail Land Purchase Agreements, the Pioneer Trail Delta-T License Agreement, the Pioneer Trail Limited Liability Company Agreement, the Pioneer Trail Management Services Agreement (when executed and delivered), the Pioneer Trail Rail Car Exchange Agreement, the Pioneer Trail Railroad Car Lease Agreement, TIC Indemnity Confirmation (Pioneer Trail), the Pioneer Trail Payment and Performance Bond, the Pioneer Trail Escrow Agreement, Pioneer Trail Redevelopment Contract, Pioneer Trail Water Rights Deed, UP Consent (Pioneer Trail), UP Consent (Pioneer Trail), UP Industry Track Contract (Pioneer Trail), UP Ground Leases, Pioneer Trail Redevelopment Contract and, at all times after the execution and delivery thereof, each Material Additional Project Document; (ii) a Consent Agreement (as defined in the Senior Credit Agreement) relating to each of the following Project Documents: the Pioneer Trail Access Agreement, Pioneer Trail Corn Supply Start-up Agreement, the Pioneer Trail EPC Contract, the Pioneer Trail O&M Agreement, the Pioneer Trail Corn Supply Agreement, the Pioneer Trail Corn Future Advisory Agreement, the Pioneer Trail Risk Management Agreement, the Pioneer Trail Distillers Grains Marketing Agreement, the Pioneer Trail Ethanol Marketing Agreement, the Pioneer Trail Master Agreement, the Pioneer Trail Gas Supply Agreement, the Pioneer Trail Gas Supply Representation and Management Agreement, the Pioneer Trail Gas Transportation Services Agreement, the Pioneer Trail NAESB Agreement, the Pioneer Trail Gas Pipeline Construction and Management Agreement, the Pioneer Trail Grain Facility Lease, the Pioneer Trail Delta-T License Agreement, the Pioneer Trail Railroad Land Lease Agreement, the Pioneer Trail Rail Car Exchange Agreement, the Pioneer Trail Rail Car Lease Agreement and the Pioneer Trail Management Services Agreement and (iii) at all times after the execution and delivery of any Material Additional Project Document, a Consent Agreement with respect thereto.
 
13

 
Pioneer Trail Grain Facility Lease” shall have the meaning set forth in the Senior Credit Agreement.
 
Pioneer Trail Land” shall mean the site upon which the Pioneer Trail Plant is installed, together with any fixtures and civil works constructed thereon and any other easements, licenses and other real property rights and interests required for the operation of such Plant, including the land referred to in the Pioneer Trail Grain Facility Lease.
 
Pioneer Trail Plant” shall mean the fuel grade, denatured ethanol production facility located near Wood River, Nebraska, with a nameplate capacity of 115 million gallons-per-year, including the Pioneer Trail Land on which such facility is located, and all buildings, structures, improvements, easements and other property related thereto (including all associated electrical, gas, steam, and water interconnection, storage and treatment facilities, to the extent owned by any Borrower Affiliate Party).
 
Plan” shall mean any pension plan as defined in Section 3(2) of ERISA other than a Multiemployer Plan.
 
Plants” shall mean, collectively, the Buffalo Lake Plant and the Pioneer Trail Plant.
 
Pledge Agreement” shall mean the Pledge Agreement in the form of Exhibit 1.1(P), dated as of the Closing Date executed and delivered by Borrower in respect of all of its owned LLC Interests in BFE Energy.
 
14

 
Potential Default” shall mean any event or condition which with notice, passage of time or a determination by the Administrative Agent or the Required Lenders, or any combination of the foregoing, would constitute an Event of Default.
 
Principal Office” shall mean the main office of the Administrative Agent in New York, New York.
 
Prior Security Interest” shall mean a valid and enforceable perfected first-priority security interest under the Uniform Commercial Code in the Collateral.
 
Project” shall mean, collectively, the Plants, the Land, and all easements, leasehold interests, licenses, permits, contract rights and other real and personal property interests now owned or hereafter acquired by any Borrower Subsidiary or in which any Borrower Subsidiary has any rights.
 
Project Documents” shall mean, collectively, Buffalo Lake Project Documents and the Pioneer Trail Project Documents.
 
Project Participants” shall mean the Borrower, each of Cargill, Center Point Energy, Cornerstone, NRC, the EPC Contractor (only until the expiration or final settlement of liquidated damages and warranty claims under each EPC Contract and Payment and Performance Bond), Delta-T (only until the expiration or final settlement of liquidated damages and warranty claims under each EPC Contract and Performance Bond), the Operator, Trinity Industries Leasing Company, each manager under the Management Services Agreement (as defined in the Senior Credit Agreement), each gas supplier under the relevant Gas Supply Agreement (as defined in the Senior Credit Agreement), each gas pipeline construction and management counterparty under each Gas Pipeline Construction and Management Agreement (as defined in the Senior Credit Agreement), each gas transportation counterparty under each Gas Transportation Services Agreement and, each party (other than any Senior Credit Agreement Borrower) to a Material Additional Project Document, and each Replacement Project Participant.
 
Property” shall mean all real property owned or leased by any Borrower Affiliate Party or Subsidiary of any Borrower Affiliate Party; which is described on Schedule 5.1.14.
 
Railroad” shall mean Union Pacific Railroad Company.
 
Ratable Share” shall mean the proportion that a Lender’s Commitment bears to the Commitments of all of the Lenders.
 
Registration Statement” shall mean the Registration Statement of the Borrower filed with the SEC on Form S-3 or other appropriate form pursuant to the Securities Act of 1933, as amended, which covers the rights to purchase the Series A Convertible Preferred Stock, the Series A Convertible Preferred Stock, and, if a depositary structure is utilized, the related depositary shares, pursuant to the applicable provisions of this Agreement and any other Loan Document, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and all materials incorporated by reference therein.
 
15

 
Regulations” shall have the meaning provided for in Section 10.16 [Tax Withholding Clause].
 
Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Material, but excluding (i) emissions from the engine exhaust of a motor vehicle and (ii) the normal application of fertilizer).
 
Replacement Project Participant” shall mean, with respect to any Project Participant (other than any Borrower Affiliate Party), any Person satisfactory to the Required Lenders and having credit, or acceptable credit support, equal to or greater than that of the replaced Project Participant on the date that the applicable Project Document was entered into who, pursuant to a definitive agreement reasonably satisfactory to the Required Lenders, assumes the obligations of the replaced Project Participant on terms and conditions no less favorable to the relevant Borrower Affiliate Party than those applicable to the replaced Project Participant pursuant to the applicable Project Document.
 
Required Lenders” shall mean (i) if there are more than two (2) Lenders, any Lender or group of Lenders if the pro rata portion of the Loan allocated to the Lender or group of Lenders aggregates at least 67% of the total principal amount of the Loan or (ii) if there are two (2) or fewer Lenders, all such Lenders.  For purposes of this definition only, all Lenders that are Affiliates shall constitute one Lender.
 
Rights Offering” shall mean a public offering of securities of BioFuel Energy Corp. pursuant to an effective Registration Statement filed and declared effective pursuant to the applicable rules and regulations promulgated under the Securities Act of 1933, as amended, whose terms are more fully described in the Rights Offering Letter Agreement.
 
Rights Offering Letter Agreement” shall mean the letter agreement by and between the Lenders and the Borrower, dated as of the Closing Date, in respect of the Rights Offering, a copy of which is attached hereto as Exhibit 1.1(A).
 
SEC” shall mean the United States Securities and Exchange Commission.
 
Seminole” shall mean Seminole Energy Services, LLC, a limited liability company organized and existing under the laws of Oklahoma.
 
Senior Credit Agreement” shall have the meaning ascribed to such term in the Recitals to this Agreement.
 
Senior Credit Agreement Borrowers” shall have the meaning ascribed to such term in the Recitals to this Agreement.
 
Senior Lenders” shall mean the parties who are lenders under the Senior Credit Agreement.
 
16

 
Senior Loan Documents” shall mean the documents described in the Senior Credit Agreement as “Financing Documents”.
 
Series A Convertible Preferred Stock” shall mean the convertible preferred stock of the Borrower to be issued pursuant to the Rights Offering, or, if a depositary structure is utilized, to be deposited with the depositary and represented by depositary shares to be issued pursuant to the Rights Offering, which is more fully described in the Rights Offering Letter Agreement.
 
Subsidiary” of any Person at any time shall mean (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding capital stock or shares of beneficial interest normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, (ii) any partnership of which such Person is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries, (iii) any limited liability company of which such Person is a member or of which 50% or more of the LLC Interests is at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries or (iv) any corporation, trust, partnership, limited liability company or other entity which is controlled by such Person or one or more of such Person’s Subsidiaries.
 
Taking” shall mean any circumstance or event, or series of circumstances or events (including an Expropriation Event), in consequence of which the Project or any portion thereof shall be condemned, nationalized, seized, compulsorily acquired or otherwise expropriated by any Official Body under power of eminent domain or otherwise.
 
TIF Indebtedness” shall have the meaning provided for in Section 7.2.1(c) [Subsidiary Indebtedness].
 
Uniform Commercial Code” shall have the meaning provided for in Section 5.1.13 [Security Interests].
 
Voting Stock” shall mean with respect to any Person, shall mean Capital Stock the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of a contingency.
 
Warrant” shall mean a derivative security that upon issuance to the Administrative Agent, for the benefit of the Lenders, following the failure of the Borrower to satisfy its obligation to repay the Loan in accordance with Section 4.3.2, shall result in the Lenders being extended the right to purchase Common Stock, that on an as-converted basis will be equal to 15% of the Borrower’s Common Stock on a Fully-Diluted basis as of the date the Warrant is issued.
 
Warrant Agreement” shall mean the form of Warrant Agreement attached hereto as Exhibit 1.1(S).
 
17

 
Work” shall have the meaning provided in any EPC Contract.
 
Working Capital Loan” shall have the meaning set forth in the Senior Credit Agreement.
 
1.2         Construction.  Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents:
 
1.2.1      Number; Inclusion.  References to the plural include the singular, the plural, the part and the whole; “or” has the inclusive meaning represented by the phrase “and/or,” and “including” has the meaning represented by the phrase “including without limitation”;
 
1.2.2     Determination.  References to “determination” of or by the Administrative Agent or the Lenders shall mean good-faith estimates by the Administrative Agent or the Lenders (in the case of quantitative determinations) and good-faith beliefs by the Administrative Agent or the Lenders (in the case of qualitative determinations) and such determination shall be conclusive absent manifest error;
 
1.2.3     Administrative Agent’s Discretion and Consent.  Whenever the Administrative Agent or the Lenders are granted the right herein to act in its or their sole discretion or to grant or withhold consent such right shall be exercised in good faith;
 
1.2.4     Documents Taken as a Whole.  The words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole and not to any particular provision of this Agreement or such other Loan Document;
 
1.2.5     Headings.  The section and other headings contained in this Agreement or such other Loan Document and the Table of Contents, preceding this Agreement or such other Loan Document are for reference purposes only and shall not control or affect the construction of this Agreement or such other Loan Document or the interpretation thereof in any respect;
 
1.2.6     Implied References to this Agreement.  Article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified;
 
1.2.7     Persons.  Reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement or such other Loan Document, as the case may be, and reference to a Person in a particular capacity excludes such Person in any other capacity;
 
1.2.8     Modifications to Documents.  Reference to any agreement (including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto), document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for, superseded or restated;
 
18

 
1.2.9     From, To and Through.  Relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; and
 
1.2.10   Shall; Will.  References to “shall” and “will” are intended to have the same meaning.
 
1.3         Accounting Principles.  Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that all accounting terms used in Section 7.2 [Negative Covenants] (and all defined terms used in the definition of any accounting term used in Section 7.2 [Negative Covenants]) shall have the meaning given to such terms (and defined terms) under GAAP as in effect on the date hereof applied on a basis consistent with those used in preparing the financial statements except that interim financial statements will not have footnote disclosures.
 
1.4         Concerning Corporate Terms.  When terms such as “stock,” “shares,” “shareholders,” “corporate,” “company” and similar terms generally associated with corporations are used herein or in the Loan Documents, they shall be deemed as well to refer to limited liability member interests, owners of those interests and a limited liability company or similar entity, as the context may require, and references to corporate governance documents and procedures shall have their appropriate and correlative meanings with respect to limited liability companies, as the context may require, and vice versa.
 
2.  TERM FACILITY
 
2.1         Term Loan Commitment.  Subject to the terms and conditions hereof, and relying upon the representations and warranties herein set forth, each Lender severally but not jointly agrees to make the Term Loan to the Borrower on the Closing Date, provided that after giving effect to the Term Loan the amount of the Term Loan of such Lender shall not exceed such Lender’s Commitment.  Notwithstanding anything in this Agreement to the contrary, amounts borrowed hereunder and repaid may not be re-borrowed.
 
2.2         Nature of Lenders’ Obligations with Respect to the Term Loan.  Each Lender hereby agrees to participate in the initial and sole request for the Term Loan pursuant to Section 2.4 [Term Loan Request] in accordance with its Ratable Share.  The obligations of each Lender hereunder are several.  The failure of any Lender to perform its obligations hereunder shall not affect the Obligations of the Borrower to any other party nor shall any other party be liable for the failure of such non-performing Lender to perform its obligations hereunder.
 
2.3         Bridge Loan Funding Fee.  The Borrower hereby agrees to pay to the Administrative Agent on the date hereof for the ratable account of each Lender, as consideration for such Lender’s Commitment hereunder, the Bridge Loan Funding Fee, which fee will be deducted from the principal amount of the Term Loan funded to the Borrower on the Closing Date and distributed ratably to the Lenders by the Administrative Agent.
 
19

 
2.4         Term Loan Request.  Except as otherwise provided herein and subject to the limitations of Section 2.5 [Making the Term Loan] hereof, the Borrower may on the Closing Date request the Lenders to make the Term Loan in an amount equal to the aggregate amount of all Commitments of the Lenders, by delivering to the Administrative Agent on the Closing Date, a request therefor substantially in the form of Exhibit 2.4 or a request by telephone immediately confirmed in writing by letter or facsimile in such form (the “Loan Request”), it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation.  The Loan Request shall be irrevocable and shall specify (i) the proposed Borrowing Date; and (ii) the aggregate dollar amount of the proposed advance comprising the borrowing, which shall not exceed the aggregate amount of all Commitments of the Lenders.
 
2.5         Making the Term Loan.  The Administrative Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.4 [Term Loan Request], notify the Lenders of its receipt of such Loan Request specifying:  (i) the proposed Borrowing Date and the time and method of disbursement of the Term Loan requested thereby; (ii) the amount of the Term Loan; and (iii) the apportionment among the Lenders of the Term Loan as determined by the Administrative Agent in accordance with Section 2.2 [Nature of Lenders’ Obligations With Respect to the Term Loan].  Each Lender shall remit the principal amount of the Term Loan to the Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to it for such purpose, fund the Term Loan to the Borrower in U.S. Dollars and immediately available funds prior to 12:00 p.m., New York City time, on the Borrowing Date.
 
2.6         Notes.  The obligation of the Borrower to repay the aggregate unpaid principal amount of the Term Loan made to it by each Lender, together with interest thereon, shall be evidenced by a Term Note dated the Closing Date payable to the order of such Lender in a face amount equal to the Commitment of such Lender.
 
3.  INTEREST RATES
 
3.1         Interest Rate.  Borrower agrees to pay interest in respect of the outstanding Obligations hereunder, in arrears on the Maturity Date, and at any time thereafter on demand by the Administrative Agent or any Lender, at a rate per annum equal to the Interest Rate.  The interest due on the principal balance of the Loan outstanding shall be computed based on the actual number of days elapsed from the Borrowing Date and shall compound quarterly, on the basis of a year consisting of three hundred sixty (360) days and shall be calculated by determining the average daily principal balance outstanding for each day in question.  The daily rate shall be equal to 1/360th times the Interest Rate.
 
3.2         Interest After Default.  To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived, unless the Required Lenders otherwise consent, the interest rate applicable to the Loan shall be the Penalty Rate.
 
3.2.1     Acknowledgment.  The Borrower acknowledges that the increase in rates referred to in this Section 3.2 reflects, among other things, the fact that the Loan or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk, and all such interest shall be payable by the Borrower upon demand by the Administrative Agent.
 
20

 
3.3         Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
 
4.  PAYMENTS
 
4.1         Payments.  All payments and prepayments to be made in respect of principal, interest, the Bridge Loan Funding Fee or other fees or amounts due from the Borrower hereunder shall be payable prior to 11:00 a.m., New York City time, on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue.  Such payments shall be made to the Administrative Agent at the Principal Office for the ratable accounts of the Lenders with respect to the Loan in U.S. Dollars and in immediately available funds, and the Administrative Agent shall promptly distribute such amounts to the Lenders in immediately available funds.  The Administrative Agent’s and each Lender’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loan and other amounts owing under this Agreement.
 
4.2         Pro Rata Treatment of Lenders.  The sole and initial borrowing shall be allocated to each Lender according to its Ratable Share, and each payment or prepayment by the Borrower with respect to principal, interest, the Bridge Loan Funding Fee or other fees or amounts due from the Borrower hereunder to the Lenders with respect to the Loan, shall except as in the case of an event specified in Section 4.6 [Additional Compensation in Certain Circumstances]) be made in proportion to the pro rata interest of each Lender in the Loan.
 
4.3         Payment Dates.
 
4.3.1     Interest Payment Dates.  Interest on the Loan shall be due and payable in arrears on the Maturity Date and upon acceleration of the Notes or Obligations.  Interest on mandatory prepayments of principal under Section 4.5 [Mandatory Prepayments] shall be due on the date such mandatory prepayment is due.
 
21

 
4.3.2      Principal Payment Dates; Warrants.  The entire principal balance of the Loan plus all accrued and unpaid interest, and all unpaid fees and costs, if any, shall be due and payable on the Maturity Date.  In the event the entire principal balance of the Loan plus all accrued and unpaid interest, and all fees and costs, if any, is not paid in full by the Maturity Date, the Borrower shall cause the Warrant to be issued to the Administrative Agent for the benefit of the Lenders; provided that, in the event the failure of the Borrower to satisfy its obligations pursuant to this Section 4.3.2 is related to the Registration Statement proceeding through the review and comment period with the SEC in due course, then the Warrant shall not be required to be issued for so long as (as determined by the Required Lenders in their sole but reasonable discretion) the Borrower (i) is pursuing having the SEC declare the Registration Statement effective as soon as reasonably practicable following the date initially filed and (ii) is in compliance in all material respects with the terms and conditions contained in the Rights Offering Letter Agreement, such failure shall be excused for a reasonable period of time, such determination to be made by the Required Lenders in their sole but reasonable discretion.
 
4.4         Voluntary Prepayments.
 
4.4.1      Right to Prepay.  The Borrower shall have the right at its option at any time and from time to time to prepay the Loan in whole or in part without premium or penalty except as provided in Section 4.6 [Additional Compensation in Certain Circumstances].  Whenever the Borrower desires to prepay any part of the Loan, it shall provide a prepayment notice to the Administrative Agent by 11:00 a.m. New York City time on the date of prepayment of the Loan setting forth the following information:
 
(a)           the date, which shall be a Business Day, on which the proposed prepayment is to be made; and
 
(b)           the total principal amount of such prepayment, which shall not be less than $1,000,000, unless the total principal amount outstanding is less than $1,000,000.
 
All prepayment notices shall be irrevocable.  The principal amount of the Loan for which a prepayment notice is given, together with interest on such principal amount, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made.  Any prepayment hereunder shall be subject to the Borrower’s obligations to indemnify the Lenders under Section 4.6.2 [Losses Caused by Borrower Affiliate Parties].
 
4.5         Mandatory Prepayments.  The Borrower shall make mandatory prepayments without premium or penalty of the Loan as follows:
 
4.5.1      Sale of Assets.  Except to the extent otherwise provided in this Agreement, within five (5) Business Days of any sale of assets authorized by Section 7.2.11 [Disposition of Assets or Subsidiaries], which is (a) in excess of $1,000,000 in any one transaction or $2,000,000 in any fiscal year, or (b) made when there exists an Event of Default or Potential Default, the Borrower shall make a mandatory prepayment of principal on the Loan in an amount equal to the after-tax proceeds of such sale (as estimated in good faith by the Borrower); provided that, no payment shall be required to be made under this Section 4.5.1 at any time when principal amounts are outstanding under the Senior Credit Agreement or the Mezzanine Loan Agreement, unless such payment could be made in accordance with the provisions of the Account Agreement (as defined in the Senior Credit Agreement) or the Mezzanine Loan Agreement, as applicable.
 
22

 
4.5.2     Rights Offering.  Except to the extent otherwise provided in this Agreement or any other Loan Document, within one (1) Business Day of the closing of the Rights Offering, the Borrower shall apply the net proceeds (as estimated in good faith by the Borrower) raised from the Rights Offering in satisfaction of certain obligations in the following order: (i) first, to satisfy all Obligations outstanding under the Loan Documents, including the repayment in full of the Loan, together with all accrued but unpaid interest, fees and expenses outstanding as of such date; (ii) second, to contribute in the form of one or more equity contributions proceeds from the Rights Offering to BFE Energy that are sufficient to allow BFE Energy to satisfy the obligations existing under the Mezzanine Loan Documents and shall cause BFE Energy to use such funds to satisfy the obligations existing under the Mezzanine Loan Documents and (iii) last, make the Cargill Payment in accordance with the terms of the Cargill Acknowledgement Letter.
 
4.5.3     Consummation of a Substitute Transaction.     If the Borrower elects to pursue a Substitute Transaction (as defined in the Rights Offering Letter Agreement) in accordance with the terms of the Rights Offering Letter Agreement, the Borrower shall, on or before the earlier of (i) February 1, 2011 and (ii) the closing of the Substitute Transaction: (a) pay all Obligations outstanding under the Loan Documents, including the repayment in full of the Loan, together with all accrued but unpaid interest, fees and expenses outstanding as of such date, (b) second, (I) contribute in the form of one or more equity contributions proceeds from the Rights Offering to BFE Energy that are sufficient to allow BFE Energy to satisfy the obligations existing under the Mezzanine Loan Documents and (II) cause BFE Energy to use such funds to satisfy the obligations existing under the Mezzanine Loan Documents and (c) make the Cargill Payment in accordance with the terms of the Cargill Acknowledgement Letter.
 
4.6         Additional Compensation in Certain Circumstances    Increased Costs or Reduced Return Resulting from Taxes, Expenses, Etc.  If any Law, guideline or interpretation or any change in any Law, guideline or interpretation or application thereof by any Official Body charged with the interpretation or administration thereof or compliance with any request or directive (whether or not having the force of Law) of any Official Body:
 
  (a)           subjects any Lender to any tax or changes the basis of taxation with respect to this Agreement, the Notes, the Loan or payments by the Borrower of principal, interest, the Bridge Loan Funding Fee, or other amounts due from the Borrower hereunder or under the Notes (except for taxes on the overall net income of such Lender), or
 
  (b)           imposes, modifies or deems applicable any reserve, special deposit or similar requirement against credits or commitments to extend credit extended by, or assets (funded or contingent) of, deposits with or for the account of, or other acquisitions of funds by, any Lender; and
 
23

 
   (c)          the result of (a) or (b) is to increase the cost to, reduce the income receivable by, or impose any expense upon any Lender with respect to this Agreement, the Notes or the making, maintenance or funding of any part of the Loan by an amount which such Lender in its sole discretion deems to be material, such Lender shall from time to time notify the Borrower and the Administrative Agent of the amount determined in good faith (using any averaging and attribution methods employed in good faith) by such Lender to be necessary to compensate such Lender for such increase in cost, reduction of income, additional expense or reduced rate of return.  Such notice shall set forth in reasonable detail the basis for such determination.  Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given.
 
4.6.2       Losses Caused by Borrower.  In addition to the compensation required by Section 4.6.1 [Increased Costs or Reduced Return Resulting from Taxes, Expenses, Etc.], the Borrower shall reimburse each Lender against all liabilities, losses or expenses (including loss of margin, any loss or expense incurred in liquidating or employing deposits from third parties) which such Lender sustains or incurs as a consequence of any of the following:
 
(a)          attempt by the Borrower to revoke (expressly, by later inconsistent notices or otherwise) in whole or part the Loan Request under Section 2.4 [Term Loan Request] or notice relating to prepayments under Section 4.4 [Voluntary Prepayments], or
 
(b)          default by the Borrower in the performance or observance of any covenant or condition contained in this Agreement or any other Loan Document, including any failure of the Borrower to pay when due (by acceleration or otherwise) any principal, interest, portion of the Bridge Loan Funding Fee or any other amount due hereunder (without duplication of any payments required, under Section 4.7 [Indemnification by Borrower] or Section 10.3 [Reimbursement and Indemnification of Lenders by the Borrower; Taxes] in connection with any such default).
 
If any Lender sustains or incurs any such loss or expense, it shall from time to time notify the Borrower of the amount determined in good faith by such Lender (which determination may include such assumptions, allocations of costs and expenses and averaging or attribution methods as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or expense.  Such notice shall set forth in reasonable detail the basis for such determination.  Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given.  For purposes of clarity, notwithstanding any provision of this Section 4.6.2 to the contrary, no reimbursement shall be required to be made for loss or margin that is attributable to a prepayment made in accordance with Section 4.4 [Voluntary Prepayments].
 
4.6.3      Mitigation Obligation.  If any Lender requests compensation under Section 4.6.1 [Increased Costs or Reduced Return Resulting from Taxes, Expenses, Etc.] or the Borrower is required to pay any additional amount to any Lender for the account of any Lender pursuant to Section 4.6.2 [Losses Caused by Borrower Affiliate Parties], then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Term Loan hereunder or to assist its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.6.1 [Increased Costs or Reduced Return Resulting from Taxes, Expenses, Etc.] or 4.6.2 [Losses Caused by Borrower Affiliate Parties] as the case may be, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
 
24

 
4.7           INDEMNIFICATION BY BORROWER.  IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, THE BORROWER HEREBY AGREES TO INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE AGENT (EACH AN “INDEMNIFIED PARTY”) FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), INCURRED BY THE INDEMNIFIED PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY ACTIVITY FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF THE LOAN, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS MATERIAL AT ANY PROPERTY OWNED OR LEASED BY ANY BORROWER AFFILIATE PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY BORROWER AFFILIATE PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY BORROWER AFFILIATE PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS MATERIALS OR (E) SUBJECT TO SECTION 10.16, THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE INDEMNIFIED PARTIES AND ANY ACTION TAKEN OR OMITTED BY A LENDER HEREUNDER, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION.  IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, BORROWER HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW.  ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 4.7 SHALL SURVIVE REPAYMENT OF THE LOAN, CANCELLATION OF THE NOTES, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE LOAN DOCUMENTS AND TERMINATION OF THE COMMITMENTS HEREUNDER OR TERMINATION AGREEMENT.
 
25

 
5.  REPRESENTATIONS AND WARRANTIES
 
5.1         Representations and Warranties.  The Borrower represents and warrants subject to the provisions of Section 1.4 [Concerning Corporate Terms], to the Administrative Agent and each of the Lenders as follows:
 
5.1.1      Organization and Qualification.  The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware.  The Borrower has the lawful power to engage in the business it presently conducts or proposes to conduct.  The Borrower is duly licensed or qualified and in good standing in each jurisdiction listed opposite its name on Schedule 5.1.1 and in all other jurisdictions where the nature of the business transacted by it or both makes such licensing or qualification necessary if the failure to be so licensed or qualified would cause or constitute a Material Adverse Change.
 
5.1.2      Capitalization and Ownership.  The authorized LLC Interests of BFE Energy are owned as indicated on Schedule 5.1.2, as of the Closing Date.  All of the LLC Interests and any other equity interests of each Borrower Affiliate Party have been validly issued and are fully paid and nonassessable.  There are no options, warrants or other rights outstanding to purchase any such LLC Interests except as indicated on Schedule 5.1.2.
 
5.1.3      Subsidiaries.  The Borrower has good title to all of the LLC Interests in BFE Energy it purports to own, free and clear of any Lien other than Liens in favor of the Administrative Agent under the Pledge Agreement.  All LLC Interests in BFE Energy owned by the Borrower have been validly issued, and all LLC Interests in BFE Energy owned by the Borrower are fully paid and nonassessable.  All capital contributions and other consideration required to be made or paid in connection with the issuance of all LLC Interests in BFE Energy owned by the Borrower have been made or paid, as the case may be.  There are no options, warrants or other rights outstanding to purchase any such LLC Interests in BFE Energy.
 
5.1.4      Power and Authority.  The Borrower has full power to enter into, execute, deliver and carry out each Loan Document to which it is a party, to incur the Indebtedness contemplated by the Loan Documents to which it is a party and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part.
 
5.1.5      Validity and Binding Effect.  This Agreement has been duly and validly executed and delivered by the Borrower, and each other Loan Document which any Borrower Affiliate Parties are required to execute and deliver on or after the date hereof will have been duly executed and delivered by the Borrower Affiliate Parties on the required date of delivery of such Loan Document.  This Agreement and each of the other Loan Documents constitutes, or will constitute, legal, valid and binding obligations of such Borrower Affiliate Party on and after its date of delivery thereof, enforceable against such Borrower Affiliate Party in accordance with its terms, except to the extent that enforceability of any of such Loan Document may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforceability of creditors’ rights generally or limiting the right of specific performance.
 
26

 
5.1.6      No Conflict.  Neither the execution and delivery of this Agreement or the other Loan Documents by any Borrower Affiliate Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the certificate of incorporation, certificate of formation, limited liability company agreement or other organizational documents of any Borrower Affiliate Party, (ii) any Law or any agreement or instrument or order, writ, judgment, injunction or decree to which any Borrower Affiliate Party is a party or by which it or any of its Subsidiaries is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Borrower Affiliate Party or any of its Subsidiaries (other than Liens granted under the Loan Documents, the Senior Loan Documents or the Mezzanine Loan Documents (as applicable)) except with respect to clause (ii), to the extent such conflict, default or breach which would not cause or constitute an Event of Default, or (iii) any provision of the Senior Loan Documents or the Mezzanine Loan Documents.
 
5.1.7      Litigation.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of any Borrower Affiliate Party, threatened against any Borrower Affiliate Party at law or equity before any Official Body which individually or in the aggregate would cause or constitute a Material Adverse Change.  No Borrower Affiliate Party is in violation of any order, writ, injunction or any decree of any Official Body which would cause or constitute a Material Adverse Change.  There are no ongoing, or, to the best knowledge of the Borrower, currently threatened, strikes, collective slowdowns or work stoppages by the employees of any Borrower Affiliate Party or the Operator.
 
5.1.8      Use of Proceeds.  The Borrower Affiliate Parties shall use the proceeds of the Loan in accordance with Section 7.1.7 [Use of Proceeds].
 
5.1.9      Full Disclosure.  Neither this Agreement nor any other Loan Document, nor any certificate, statement, agreement or other documents furnished to the Administrative Agent or any Lender in connection herewith or therewith, contains, when taken as a whole, any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading.  There is no fact known to the Borrower (other than general economic conditions) which materially adversely affects the business, property, assets, financial condition, results of operations or prospects of any Borrower Affiliate Party which has not been set forth in this Agreement or in the certificates, statements, agreements or other documents furnished in writing to the Administrative Agent and the Lenders prior to or at the date hereof in connection with the transactions contemplated hereby.
 
5.1.10    Taxes.  All federal, state, local and other tax returns required to have been filed with respect to the Borrower Affiliate Parties have been filed, and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made. As of the Closing Date, there are no agreements or waivers extending the statutory period of limitations applicable to any federal income tax return of the Borrower Affiliate Parties for any period.
 
27

 
5.1.11   Consents and Approvals.  Except for the filing of financing statements in the state and county filing offices in respect of the Collateral, no consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Agreement and the other Loan Documents by any Borrower Affiliate Party, other than those obtained or made on or prior to the Closing Date.
 
5.1.12    No Event of Default; Compliance with Instruments.  No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings or other extensions of credit to be made on the Closing Date under or pursuant to the Loan Documents which constitutes an Event of Default or Potential Default. None of the Borrower Affiliate Parties is in violation of (i) any term of its certificate of incorporation, certificate of formation, limited liability company agreement or other organizational documents or (ii) any material agreement or instrument to which it is a party or by which it or any of its properties may be subject or bound where such violation would constitute a Material Adverse Change.
 
5.1.13    Security Interests.  The Liens and security interests granted to the Administrative Agent for the benefit of the Lenders pursuant to the Pledge Agreement in the Collateral constitute Prior Security Interests under the Uniform Commercial Code as in effect from time to time in the State of New York or the State of Delaware (as applicable) (together, the “Uniform Commercial Code”) or other applicable Law entitled to all the rights, benefits and priorities provided by the Uniform Commercial Code or such Law.  Upon the filing of financing statements relating to said security interests in each office and in each jurisdiction where required in order to perfect the security interests described above, and taking possession of any stock certificates, certificated membership interests or other certificates evidencing the Collateral, all such action as is necessary or advisable to establish such rights of the Administrative Agent will have been taken, and there will be upon execution and delivery of the Pledge Agreement, such filings and such taking of possession, no necessity for any further action in order to preserve, protect and continue such rights, except the filing of continuation statements with respect to such financing statements within six months prior to each five-year anniversary of the filing of such financing statements.  All filing fees and other expenses in connection with each such action have been or will be paid by the Borrower.
 
5.1.14    Real Property.  No Borrower Affiliate Party owns real property except for ownership of a portion of the Buffalo Lake Land and a portion of the Pioneer Trail Land.  The Borrower Affiliate Parties occupy the locations described on Schedule 5.1.14 (which sets forth the street address, state, owner, lessor and lessee).  The Borrower Affiliate Parties have valid leasehold interest in all properties, assets and other rights which they purport to lease or which are reflected as leased on their books and records, free and clear of all Liens and encumbrances except Permitted Liens, and subject to the terms and conditions of the applicable leases.  All leases of property are in full force and effect without the necessity for any consent which has not previously been obtained upon consummation of the transactions contemplated hereby except to the extent failure to do so would not cause a Material Adverse Change.
 
28

 
5.1.15    Status of the Collateral.  The LLC Interests in BFE Energy included in the Collateral to be pledged pursuant to the Pledge Agreement are free and clear of any Lien or restriction on transfer, except as otherwise provided by the Pledge Agreement and except as the right of the Lenders to dispose of the LLC Interests may be limited by the Securities Act of 1933, as amended, and the regulations promulgated by the SEC thereunder and by applicable state securities laws.  There are no limited liability company agreements or other agreements or understandings with respect to the LLC Interests in BFE Energy included in the Collateral except for the limited liability company agreements described on Schedule 5.1.15.  The Borrower has delivered true and correct copies of such limited liability company agreements to the Administrative Agent.  On the Closing Date, all of the LLC Interests of BFE Energy that are owned by the Borrower shall be pledged pursuant to the Pledge Agreement, which LLC Interest shall not constitute less than 78.7% of the outstanding LLC Interest in BFE Energy.
 
5.1.16    Insurance.  The Borrower Affiliate Parties have insurance policies and other bonds in full force and effect as of the Closing Date to and bonds provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of each Borrower Affiliate Party in accordance with prudent business practice in the industry of the Borrower Affiliate Parties.  No notice has been given or claim made and no grounds exist to cancel or avoid any of such policies or bonds or to reduce the coverage provided thereby except to the extent replaced by coverage under other policies.
 
5.1.17    Compliance with Laws.  The Borrower Affiliate Parties are in material compliance in all respects with all applicable Laws in all jurisdictions in which the Borrower Affiliate Parties are presently doing business except where the failure to do so would not constitute a Material Adverse Change.
 
5.1.18    Material Contracts; Burdensome Restrictions.  Schedule 5.1.18 lists as of the Closing Date all material contracts relating to the business operations of the Borrower or BFE Energy, including all employee benefit plans and Labor Contracts, other than Loan Documents and Project Documents.  All such material contracts are valid, binding and enforceable upon the Borrower or BFE Energy (as applicable) and each of the other parties thereto in accordance with their respective terms except to the extent any lack of such validity, binding effect or enforceability would not cause a Material Adverse Change, and there is no default thereunder, to the Borrower’s knowledge, with respect to parties other than the Borrower or BFE Energy (as applicable) except for defaults of the Borrower or BFE Energy (as applicable) which would not cause a Material Adverse Change.  Neither Borrower nor any Subsidiary is bound by any contractual obligation, or subject to any restriction in any organization document, or any requirement of Law which could result in a Material Adverse Change.  For purposes of this Section 5.1.18, a “material contract” means a contract that obligates a Borrower Affiliate Party to pay money in an amount, or provide services valued, in excess of $150,000 during any 12-month period.  The amounts that a Borrower Affiliate Party is obligated to pay under contracts not listed on Schedule 5.1.18 do not exceed $800,000 on an annual basis.
 
5.1.19    Investment Companies; Regulated Entities.  None of the Borrower Affiliate Parties is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”  Neither the making of the Loan, nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated hereby will violate any provisions of the Investment Company Act of 1940 or any rule, regulation or order of the SEC thereunder.
 
29

 
5.1.20    Environmental Matters.  Except as set forth on Schedule 5.1.20, as of the Closing Date, there are no violations, or allegations thereof in writing, of any Environmental Law applicable to any Property and, to the knowledge of the Borrower, to any property of any predecessor of the Borrower Affiliate Parties.
 
(a)          Each Borrower Affiliate Party has complied and is now complying in all material respects with (i) all Environmental Laws applicable to the Project and (ii) the requirements of any Governmental Approvals issued under such Environmental Laws with respect to the Project.
 
(b)          There are no facts, circumstances, conditions or occurrences regarding the Project that (i) to the knowledge of the Borrower (after due inquiry), could reasonably be anticipated to form the basis of an Environmental Claim against the Project, any Borrower Affiliate Party, the EPC Contractor or the Operator or, to the best knowledge of the Borrower, any other Person occupying or conducting operations on or about the Land which if adversely determined could reasonably be expected to have a Material Adverse Change, (ii) could reasonably be anticipated to cause the Land to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law or (iii) to the knowledge of the Borrower (after due inquiry) could be reasonably anticipated to require the filing or recording of any notice or disclosure document under any Environmental Law (other than those described in Schedule 5.1.24 [Governmental Approvals] hereto).
 
(c)          There are no past, pending, or, to the best knowledge of the Borrower, threatened, Environmental Claims against (i) any Borrower Affiliate Party or the Project, or (ii) to the best knowledge of the Borrower, the EPC Contractor or the Operator or any other Person occupying, using, or conducting operations on or about the Land, which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Change.
 
(d)          Except as set forth on Schedule 5.1.20 and except as could not reasonably be expected to have a Material Adverse Effect, Hazardous Materials have not at any time been generated, used, treated, recycled, stored on, or transported to or from, or Released, deposited or disposed of on all or any portion of the Land other than in compliance at all times with all applicable Environmental Laws.
 
(e)          Except as set forth on Schedule 5.1.20, there are not now and, to the knowledge of the Borrower, never have been any underground storage tanks located on the Land, there is no asbestos contained in, forming part of, or contaminating any part of the Project and no polychlorinated biphenyls (PCBs) are used, stored, located at or contaminate any part of the Project.
 
30

 
(f)           The Borrower is not aware of any evidence of groundwater contamination on the Land.
 
(g)          Copies of all environmental studies regarding the Project and/or the Land of which any Borrower Affiliate Party is aware have been delivered to the Administrative Agent.
 
5.1.21    [Reserved]
 
5.1.22    Financial Statements.
 
(a)           The Borrower has delivered to the Administrative Agent or filed with the SEC audited consolidated and unaudited consolidated and consolidating balance sheets and statements of income, changes in stockholders’ equity, and cash flow as of and for the fiscal years ended December 31, 2007, December 31, 2008 and December 31, 2009 and unaudited consolidated and consolidating balance sheets and statements of income, change in stockholders’ equity, and cash flow as of and for the six (6) months ended June 30, 2010 for the Borrower, each of which has been certified by the principal financial officer of the Borrower in the case of audited financial statements, and prepared in accordance with GAAP.  Such financial statements fairly present the financial condition of the Borrower and its Subsidiaries as at such dates and the results of its operations for the periods ended on such dates, subject, in the case of interim statements, to normal year-end audit adjustments.
 
(b)           No Borrower Affiliate Party has any material outstanding obligations or liabilities, fixed or contingent, except as disclosed in the financial statements described in (a) above.  Since the date of the last financial statements described in (a) above, no event, condition or circumstance exists or has occurred which has resulted in or could reasonably be expected to result in a Material Adverse Change in the financial condition, operations, business, profits or prospects of the Borrower Affiliate Parties from that set forth in such financial statements, and no event or condition has occurred which could reasonably be expected to have a Material Adverse Change.
 
5.1.23    Governmental Approvals      All Governmental Approvals necessary in connection with (i) the due execution and delivery of, and performance by any Borrower Affiliate Party and, to the best knowledge of the Borrower (after due inquiry) each Project Participant of their respective obligations and the exercise of their respective rights under, the Loan Documents to which they are a party and the Project Documents to which they are party, (ii) the legality, validity and binding effect or enforceability thereof and (iii) in the case of Governmental Approvals to be obtained by on or behalf of Borrower, and, to Borrower’s knowledge (after due inquiry), any other Project Participant, the acquisition, ownership, construction, installation, operation and maintenance of the Project as contemplated by the Project Documents and in order to conduct its business generally and maintain its existence (collectively, the “Necessary Governmental Approvals”), have been duly obtained or made, were validly issued, are in full force and effect, are final and not subject to any pending modification by any Governmental Authority or appeal, are held in the name of the appropriate Borrower Affiliate Party and are free from conditions or requirements the compliance with which would reasonably be expected to have a Material Adverse Effect or which the appropriate Borrower Affiliate Party does not reasonably expect to be able to satisfy.  No event has occurred that would reasonably be expected to (A) result in the revocation, termination or adverse modification of any such Necessary Governmental Approval or (B) adversely affect any rights of any Borrower Affiliate Party (or, as applicable, any Project Participant) under any such Governmental Approval.
 
31

 
(b)          The information set forth in each application submitted by or on behalf of any Borrower Affiliate Party in connection with each Necessary Governmental Approval and in all correspondence sent by or on behalf of the appropriate Borrower Affiliate Party in respect of each such application is accurate and complete in all material respects.
 
(c)           The Plants are owned and operated in accordance with the Project Documents, conform to and comply in all material respects with all covenants, conditions, restrictions and requirements in all Necessary Governmental Approvals, in the Project Documents applicable thereto and under all zoning, environmental, land use and other Laws applicable thereto.
 
5.1.24    ERISA.  Neither any Borrower Affiliate Party nor any ERISA Affiliate of any Borrower Affiliate Party has or has ever maintained or contributed to (or has or has ever had an obligation to contribute to) any Plan or Multiemployer Plan.
 
5.1.25    Immunity.  Each Borrower Affiliate Party is subject to civil and commercial law with respect to its Obligations under the Loan Documents, and the execution, delivery and performance of the Loan Documents by the Borrower Affiliate Parties constitute private and commercial acts rather than public or governmental acts.  Neither the Borrower Affiliate Parties nor any of their Properties has any immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment or from any other legal process with respect to the Obligations of the Borrower Affiliate Parties under the Loan Documents.
 
5.1.26    Utilities, Etc.  All utility services, means of transportation, facilities and other materials necessary for the operation of the Plants (including, without limitation, gas, electrical, potable and raw water supply, storm, telephone and sewage services and facilities, as necessary) are available to the Project.
 
6.  CONDITIONS OF LENDING.
 
The obligation of each Lender to make the Loan hereunder is subject to the performance by each of the Borrower Affiliate Parties of their Obligations to be performed hereunder at or prior to the making of the Loan and to the satisfaction of the following further conditions:
 
6.1         Closing Date Loan.  On the Closing Date:
 
6.1.1      Officer’s Certificate.  There shall be delivered to the Administrative Agent for the benefit of each Lender a certificate dated the Closing Date and signed by an Authorized Officer of the Borrower certifying to each of the following:
 
32

 
(a)           the representations and warranties of the Borrower contained in Article 5 and in each of the other Loan Documents executed on the Closing Date shall be true and accurate in all material respects on and as of the Closing Date (except representations and warranties which relate solely to an earlier date or time, which representations and warranties shall be true and correct on and as of the specific dates or times referred to therein;
 
(b)           each of the Borrower Affiliate Parties shall have performed and complied with all material covenants and conditions in the Loan Documents to which it is a party; and
 
(c)           no Event of Default or Potential Default shall have occurred and be continuing or shall exist.
 
6.1.2      Secretary’s Certificate.  There shall be delivered to the Administrative Agent for the benefit of each Lender a certificate dated as of the Closing Date and signed by the Secretary or an Assistant Secretary, the Borrower and BFE Energy, certifying as appropriate as to:
 
(a)          all action taken by such party in connection with this Agreement and the other Loan Documents;
 
(b)          the names of the officer or officers authorized to sign this Agreement and the other Loan Documents and the true signatures of such officer or officers and specifying the Authorized Officers permitted to act on behalf of such party for purposes of this Agreement and the true signatures of such officers, on which the Administrative Agent and each Lender may conclusively rely; and
 
(c)          copies of its organizational documents, including its certificate of incorporation or certificate of formation (as applicable) and by-laws or limited liability company agreement (as applicable) as in effect on the Closing Date certified by the appropriate state official where such documents are filed in a state office together with certificates from the appropriate state officials as to the continued existence and good standing of each party in each state where organized or qualified to do business.
 
6.1.3      Delivery of Loan Documents.  The Loan Documents required to be entered into as of the Closing Date, including but not limited to the Loan Agreement, the Notes, the Pledge Agreement, the Cargill Acknowledgement Letter, the Rights Offering Letter Agreement and the Executive Management Waiver Agreements, together with UCC-1 financing statements in respect of the Pledge Agreement for all appropriate locations, shall have been duly executed and delivered to the Administrative Agent for the benefit of the Lenders, together with all appropriate financing statements and appropriate stock powers and certificates evidencing the pledged LLC Interests.  The Borrower authorizes the Administrative Agent to cause to be filed any such UCC-1 financing statements in such locations as the Administrative Agent may deem appropriate.
 
6.1.4      Opinion of Counsel.  There shall be delivered to the Administrative Agent for the benefit of each Lender a written opinion of Cravath, Swaine & Moore LLP (who may rely on the opinions of such other counsel as may be acceptable to the Administrative Agent), relating to the Loan Documents, dated as of the Closing Date, each in form and substance satisfactory to the Administrative Agent and its counsel.
 
33

 
6.1.5      Legal Details.  All legal details and proceedings in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be in form and substance satisfactory to the Administrative Agent and counsel for the Administrative Agent, and the Administrative Agent shall have received all such other counterpart originals or certified or other copies of such documents and proceedings in connection with such transactions, in form and substance satisfactory to the Administrative Agent and said counsel, as the Administrative Agent or said counsel may reasonably request.
 
6.1.6      Payment of Fees.  The Borrower shall have paid or caused to be paid to the Administrative Agent for itself and for the account of the Lenders, the Lenders’ closing fees and all other fees accrued through the Closing Date and the costs and expenses for which the Administrative Agent and the Lenders are entitled to be reimbursed, including, but not limited to, the reasonable fees and expenses of counsel to the Administrative Agent and the Lenders and any other expenses payable by the Borrower under Section 7.1.14 [Expenses], to the extent an invoice related to such fees and expenses are delivered to the Borrower.
 
6.1.7      Due Diligence.  The Borrower shall have delivered to the Administrative Agent on or before the Closing Date lien searches in respect of the Borrower and BFE Energy (i) listing all effective financing statements which name Borrower and any other Borrower or BFE Energy as debtors; and (ii) demonstrating the absence of Liens on any of the properties and assets of the Borrower or BFE Energy other than Permitted Liens or Liens satisfied as of the Closing Date to the satisfaction of the Administrative Agent, together with (a) copies of such UCC-3 termination statements, (b) payoff letters evidencing repayment in full of any debt to be repaid, and (c) the termination of all agreements relating thereto and (d) the release of all Liens granted in connection therewith.
 
6.1.8      Consents.  All consents required to effectuate the transactions contemplated hereby shall have been obtained.
 
6.1.9      No Violation of Laws.  The making of the Loan shall not contravene any Law applicable to the Borrower Affiliate Parties or any of the Lenders.  In addition, each of the Lenders and the Administrative Agent shall have received at least two Business Days prior to the Closing Date, all documentation and other information required by regulatory authorities under the Patriot Act.
 
6.1.10    No Actions or Proceedings.  No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed in writing before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, this Agreement, the other Loan Documents or the consummation of the transactions contemplated hereby or thereby or which, in the Administrative Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or any of the other Loan Documents.
 
34

 
6.1.11    Material Adverse Change or Effect.   No event, occurrence or condition that has had, or would reasonably be expected to have, a Material Adverse Effect shall have occurred and be continuing.
 
6.1.12    Financial Information, Etc.  Each Lender shall have received a certificate from the chief financial officer or other Authorized Officer of the Borrower, dated as of the Closing Date, to the effect that, to the best of such officer’s knowledge, (A) the financial statements of the Borrower most recently filed with the SEC are true, complete and correct in all material respects and (B) there has been no Material Adverse Change in the financial condition, operations, properties, business or prospects of the Borrower since the date of such financial statements.  To the extent that such other financial, business and other information regarding the Project Participants is obtainable by any Borrower Affiliate Party upon the exercise of its reasonable efforts, each Lender shall have received such other financial, business and other information regarding the Project Participants as such Lender shall have reasonably requested.
 
6.1.13    Cargill Conversion.  The Borrower shall have delivered a complete copy of the executed Cargill Acknowledgement Letter, and such Cargill Acknowledgement Letter shall remain in full force and effect and shall not have been withdrawn.
 
7.  COVENANTS
 
7.1        Affirmative Covenants.  The Borrower covenants and agrees that until payment in full of the Loan, and interest thereon, satisfaction of all of the Borrower Affiliate Parties’ other Obligations under the Loan Documents (other than contingent indemnification obligations to the extent no claims giving rise thereto have been asserted) and termination of the Commitments, the Borrower shall comply and shall cause its Subsidiaries to comply at all times with the following affirmative covenants:
 
7.1.1      Preservation of Existence, Etc.  The Borrower shall maintain and shall cause each of its Subsidiaries to maintain its legal existence as a corporation, limited partnership or limited liability company and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary, except as otherwise expressly permitted in Section 7.2.10 [Liquidations, Mergers, Etc.] and except where failure to do so would not cause or constitute a Material Adverse Change.
 
7.1.2      Payment of Liabilities, Including Taxes, Etc.  The Borrower shall, and shall cause each of its Subsidiaries to, duly pay and discharge all liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all taxes, assessments and governmental charges upon it or any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made, but only to the extent that failure to discharge any such liabilities would not constitute a Material Adverse Change; provided that the Borrower will pay and cause each of its Subsidiaries to pay all such liabilities forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor.
 
35

 
7.1.3      Maintenance of Insurance.  The Borrower shall, and shall cause each of its Subsidiaries to, insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary.
 
7.1.4      Visitation Rights.  The Borrower shall, and shall cause each of its Subsidiaries to, permit any of the officers or authorized employees or representatives of the Administrative Agent or any of the Lenders to visit and inspect any of the properties of the Subsidiaries and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as any of the Lenders may reasonably request with reasonable advance notice, during normal business hours and at such intervals as such Lenders shall desire.  At any time when the Lenders, collectively, do not possess the power, directly or indirectly (including under any stockholders’ or limited liability company agreement), to elect a majority of the directors of the Borrower or at any time when there exists an Event of Default, the Administrative Agent may (i) conduct up to three times annually at the Borrower’s expense field audits of the Borrower Affiliate Parties’ businesses, properties and locations and (ii) may also at the Borrower’s expense do so at any time (and from time to time) that there exists an Event of Default.
 
7.1.5      Keeping of Records and Books of Account.  The Borrower shall maintain and keep proper books of record and account which enable the Borrower and its Subsidiaries to issue financial statements in accordance with GAAP and as otherwise required by applicable Laws of any Official Body having jurisdiction over the Borrower and in which full, true and correct entries shall be made in all material respects of all their dealings and business and financial affairs.
 
7.1.6      Compliance with Laws.  The Borrower shall, and shall cause each of its Subsidiaries to, comply with all applicable Laws in all material respects, provided that it shall not be deemed to be a violation of this Section 7.1.6 if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which in the aggregate would constitute a Material Adverse Change.  Without limiting the generality of the foregoing, or limiting any other subsection of this Section 7.1, the Borrower shall pay, and cause its Subsidiaries to pay, prior to delinquency, all taxes and other governmental charges against it or any collateral, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require any Borrower Affiliate Party to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any collateral, such contest proceedings shall stay the foreclosure of such Lien or the sale of any portion of the collateral to satisfy such claim or such contest does not involve any risk of the sale, forfeiture or loss of any of any assets with an aggregate value of Two Hundred and Fifty Thousand Dollars ($250,000).
 
36

 
7.1.7      Use of Proceeds.  The Borrower will, and shall cause each of its Subsidiaries (as applicable) to use the proceeds of the Loan (i) to repay in full the Working Capital Loan and (ii) to pay the Bridge Loan Funding Fee.  The Borrower shall not use and shall cause each of its Subsidiaries to not use the proceeds of the Loan for any other purpose or purposes which contravene any applicable Law or any provision hereof.
 
7.1.8      Further Assurances.  From time to time, at its expense, the Borrower shall, and shall cause each of its Subsidiaries to, faithfully preserve and protect the Administrative Agent’s Lien on any Prior Security Interest in the Collateral as a continuing perfected Lien, and shall do such other acts and things as the Administrative Agent may reasonably deem necessary or advisable from time to time in order to preserve, perfect and protect the Liens granted under the Loan Documents.
 
7.1.9      Accounting and Financial Management.  The Borrower shall, and shall cause its Subsidiaries to (a) maintain adequate management information and cost control systems, (b) maintain a system of accounting in which full and correct entries shall be made of all financial transactions and the assets and business of such Borrower in accordance with GAAP and (c) promptly deliver to the Administrative Agent a copy of any “management letter” or other similar communication received by Borrower from Borrower’s accountants relating to Borrower’s financial, accounting and other systems, management or accounts.  In the event that Borrower or any of its Subsidiaries replace their existing auditors for any reason, the Borrower shall appoint and maintain as auditors another firm of independent public accountants, which firm shall be nationally recognized and approved by the Lenders.
 
7.1.10    Governmental Approvals.  The Borrower shall, and shall cause its Subsidiaries to, (i) from time to time obtain and maintain, and comply in all material respects with, all Necessary Governmental Approvals as shall now or hereafter be required under applicable Laws, (ii) cause the Plants and the Project to be operated in all material respects in accordance with all applicable Laws and (iii) intervene in and contest any proceeding which seeks or may reasonably be expected, to rescind, terminate, adversely modify or suspend any Necessary Governmental Approval and, if reasonably requested by the Required Lenders, appeal any such rescission, termination, modification or suspension in the manner and to the full extent permitted by applicable Law (provided that the obligations of the Borrower Affiliate Parties under this Section 7.1.10 shall not in any way limit or impair the rights or remedies of the Lenders under any Loan Document, directly or indirectly, arising as a result of any such rescission, termination, modification or suspension).
 
37

 
7.1.11    Project Construction; Maintenance.  The Borrower shall, and shall cause its Subsidiaries to, maintain and preserve the Project and all of their other Properties necessary or useful in the proper conduct of its business in good working order and in such condition that the Plants will have the capacity and functional ability to perform, on a continuing basis (ordinary wear and tear excepted), in normal commercial operation, the functions for which they were specifically designed in accordance with the applicable EPC Contract(s) at substantially the levels contemplated thereby.  The Borrower shall, and shall cause its Subsidiaries to, cause the Project to be operated, serviced, maintained and repaired so that the condition and operating efficiency thereof will be maintained and preserved (ordinary wear and tear excepted) in all material respects in accordance and compliance with (i) such operating standards as shall be required to enforce any material warranty claims against dealers, manufacturers, vendors, contractors, and sub-contractors, (ii) the terms and conditions of all insurance policies maintained with respect to the Project at any time, (iii) all requirements of Law and all Governmental Approvals applicable to the Project, and (iv) the terms of the Project Documents.
 
7.1.12    Performance of Project Documents.  The Borrower shall, and shall cause its Subsidiaries to perform and observe in all material respects all of its covenants and agreements contained in any of the Project Documents to which it is or becomes a party, shall take and shall cause its Subsidiaries to take all necessary action to prevent the early termination of any such Project Documents in accordance with the terms thereof or otherwise, and shall take and shall cause its Subsidiaries to take any and all action as may be reasonably necessary promptly to enforce its rights and to collect any and all sums due to it under the Project Documents.
 
7.1.13    Environmental Compliance.  The Borrower shall, and shall cause its Subsidiaries to:
 
(a)          comply in all material respects and cause all other Persons constructing, occupying or conducting operations at the Project to comply in all material respect with all Environmental Laws now or hereafter applicable to the Project;
 
(b)          obtain, at or prior to the time required by applicable Environmental Laws, all Governmental Approvals required pursuant to applicable Environmental Law for the construction, operation and maintenance of the Project, and maintain such Governmental Approvals in full force and effect;
 
(c)           not generate, use, treat, recycle, store, Release or dispose of, or permit the generation, use, treatment, recycling, storage, Release or disposal of Hazardous Materials on the Land, or transport or permit the transportation of Hazardous Materials to or from the Project other than in compliance in all material respects with all applicable Environmental Laws;
 
(d)          conduct and complete any investigation, study, sampling and testing and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials Released at, on, in, under or emanating from the Project, in accordance with the requirements of all applicable Environmental Laws and promptly notify the Administrative Agent of any such action in which costs are reasonably expected to exceed $100,000 or which is reasonably likely to give rise to a claim for injunctive relief against a Borrower Affiliate Party;
 
38

 
(e)           provide the Administrative Agent with written notice of (i) any fact, circumstance, condition, occurrence or Release at, on, under or from the Project that results in any material noncompliance with any Environmental Law applicable to the Project or that has resulted or may result in personal injury or material property damage or an Environmental Claim or otherwise that could reasonably be expected to have a Material Adverse Effect, such notice to be given promptly after the condition is discovered or such Release or occurrence takes place and (ii) any pending or threatened Environmental Claim against any Borrower or any other Persons occupying or conducting operations at the Project that, if adversely determined, could reasonably be expected to have a Material Adverse Effect, such notice to be given promptly after such Environmental Claim is commenced or threatened; all such notices shall describe in reasonable detail the nature of the claim, investigation, condition, incident, or occurrence and the proposed response thereto;
 
(f)           provide the Administrative Agent with copies of all material communications with any Governmental Authority relating to any Environmental Law or any Environmental Claim promptly after the giving or receiving of any such communications; and
 
(g)          provide such information concerning any Environmental Claim relating to the Project as may be reasonably requested by the Administrative Agent.
 
7.1.14    Expenses.  The Borrower shall at the Closing pay to the Administrative Agent for itself and for the account of the Lenders, the Lenders’ closing fees and all other fees accrued through the Closing Date and the costs and expenses incurred by the Administrative Agent and the Lenders, including, but not limited to, travel, due diligence expenses and reasonable legal costs and miscellaneous expenses.
 
7.1.15    Rights Offering.  The Borrower shall comply with its obligations under the Rights Offering Letter Agreement.
 
7.1.16    Use of Term Loan Proceeds.  The Borrower shall cause the net proceeds from the Term Loan to be contributed to BFE Energy in the form of one or more equity contributions, shall further cause BFE Energy to contribute such net proceeds in one or more equity contributions to the Senior Credit Agreement Borrowers jointly to allow the Senior Credit Agreement Borrowers to repay in full the Working Capital Loan on or before September 27, 2010, and shall further cause the Senior Credit Agreement Borrowers to repay in full the Working Capital Loan on or before September 27, 2010.
 
7.2        Negative Covenants.  The Borrower covenants and agrees that until payment in full of the Loan, and interest thereon, satisfaction of all of the Borrower Affiliate Parties’ other Obligations under the Loan Documents (other than contingent indemnification obligations to the extent no claims giving rise thereto have been asserted) and termination of the Commitments, the Borrower shall, and shall cause its Subsidiaries to comply with the following negative covenants:
 
7.2.1      Subsidiary Indebtedness.  The Borrower shall cause each of its Subsidiaries (excluding BFE Energy) to not at any time create, incur, assume or suffer to exist any Indebtedness, except:
 
(a)          Indebtedness under the Senior Loan Documents;
 
(b)          Indebtedness under the Mezzanine Loan Documents;
 
39

 
(c)          unsecured Indebtedness of Pioneer Trails up to a maximum outstanding principal amount at all times equal to $7,000,000 incurred prior to the Closing Date as described in, and incurred under, Article IV of the Pioneer Trail Redevelopment Contract (as defined in the Senior Credit Agreement) (the “TIF Indebtedness”), provided, that (i) such Indebtedness is issued on terms and conditions and pursuant to documentation satisfactory to the Administrative Agent, which conditions shall include a requirement that no lender of, or participant in, the TIF Indebtedness shall have any recourse to any Borrower Affiliate Party or its Property other than to the real estate taxes that Pioneer Trails would have otherwise been obligated to pay but for the incurrence of the TIF Indebtedness and (ii) the Borrower Affiliate Parties shall have furnished, or caused to be furnished, to the Administrative Agent an opinion of legal counsel opinion acceptable to the Administrative Agent stating that, in the opinion of such counsel, the conditions and requirements set forth in clause (i) above shall have been satisfied;
 
(d)          Indebtedness (other than Indebtedness for borrowed money) secured by a Permitted Lien (as such term is defined in the Mezzanine Loan Agreement);
 
(e)          Indebtedness incurred under the Railroad Car Lease Agreements (as defined in the Senior Credit Agreement);
 
(f)           Hedging Agreements (as defined in the Senior Credit Agreement) that comply with the Risk Management Policy (as defined in the Senior Credit Agreement); and
 
(g)          Indebtedness incurred to the City of Fairmont, Minnesota in principal amount not to exceed $162,000.
 
7.2.2      BFE Energy Indebtedness.  The Borrower shall cause BFE Energy to not at any time, create, incur, assume or suffer to exist any Indebtedness, except:
 
(a)          Indebtedness under the Loan Documents;
 
(b)          Indebtedness under the Mezzanine Loan Documents;
 
(c)          Indebtedness under the Senior Loan Documents;
 
(d)          Indebtedness permitted under Section 7.2.1(c);
 
(e)          Indebtedness incurred under the Railroad Car Lease Agreements (as defined in the Senior Credit Agreement);
 
(f)           Hedging Agreements (as defined in the Senior Credit Agreement) that comply with the Risk Management Policy (as defined in the Senior Credit Agreement); and
 
(g)          Indebtedness incurred to the City of Fairmont, Minnesota in principal amount not to exceed $162,000.
 
7.2.3      Indebtedness.  The Borrower shall not at any time, create, incur, assume or suffer to exist any Indebtedness, except Indebtedness under the Loan Documents.
 
40

 
7.2.4      Subsidiary Liens.  The Borrower shall cause each of its Subsidiaries to not at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except for any Permitted Liens (as defined in the Mezzanine Loan Agreement).
 
7.2.5      BFE Energy Liens.  The Borrower shall cause BFE Energy not to at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except for any Permitted Liens (as defined in the Mezzanine Loan Agreement) or Permitted Liens (as defined in this Agreement).
 
7.2.6      Liens.  The Borrower shall not at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Liens created by the Loan Documents.
 
7.2.7      Guaranties.  The Borrower shall not, and shall cause each of its Subsidiaries to not at any time, directly or indirectly, become or be liable in respect of any Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree, become or remain directly or contingently liable upon or with respect to any obligation or liability of any other Person, except for Guaranties of Indebtedness of the Borrower Affiliate Parties or other obligations permitted by Section 7.2.2(b) [Indebtedness], the Project Documents, the Senior Loan Documents or the Mezzanine Loan Documents.
 
7.2.8      Loans and Investments.  The Borrower shall not, and shall cause each of its Subsidiaries to not at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) or limited liability company interest in, or any other investment or interest in, or make any capital contribution to, any other Person, or agree, become or remain liable to do any of the foregoing, except as permitted under the Senior Credit Agreement, the Account Agreement and the Mezzanine Loan Agreement and except for:
 
(a)           trade credit extended on usual and customary terms in the ordinary course of business; and
 
(b)           advances to employees to meet expenses incurred by such employees in the ordinary course of business.
 
7.2.9      Dividends and Related Distributions.  The Borrower shall not, and shall cause each of its Subsidiaries to not make or pay, or agree to become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of capital stock, partnership interests or LLC Interests on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or warrants, options or rights therefor), partnership interests or LLC Interests, except distributions by any Subsidiary of the Borrower to the Borrower or to another Subsidiary of the Borrower, distribution of rights to purchase securities pursuant to the Rights Offering.
 
7.2.10    Liquidations, Mergers, Consolidations, Acquisitions.  The Borrower shall not, and shall cause each of its Subsidiaries to not dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or substantially all of the assets or capital stock of any other Person.
 
41

 
7.2.11    Dispositions of Assets or Subsidiaries.  The Borrower shall not, and shall cause each of its Subsidiaries to not sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of capital stock, shares of beneficial interest, partnership interests or LLC Interests of a Subsidiary of a Borrower Affiliate Party), except:
 
(a)          transactions involving the sale of inventory in the ordinary course of business;
 
(b)          any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of a Borrower Affiliate Party’s business;
 
(c)          any sale, transfer or lease of assets in the ordinary course of business which are replaced by substitute assets acquired;
 
(d)          the sale of other assets so long as the aggregate amount of after-tax proceeds from sales pursuant to this clause (iv) does not exceed $250,000 in any one fiscal year;
 
(e)          any sale, transfer or lease of assets, other than those specifically excepted pursuant to clauses (a) through (d) above, which is approved by the Required Lenders so long as the after-tax proceeds (as demonstrated by the Borrower Affiliate Parties) are applied in accordance with the provisions of Section 4.5.1 [Sale of Assets] above;
 
(f)          sales of Permitted Investments (other than Investments in Subsidiaries of the Borrower) prior to the maturity thereof;
 
(g)          transfers of assets between Buffalo Lake and Pioneer Trail; and
 
(h)          dividends, distributions, return of capital or other payments to equity owners in respect of LLC Interests, redemptions of LLC Interests, withdrawals of capital by a member in a Borrower Affiliate Party; provided that, this clause (h) shall cease to apply to any Borrower Affiliate Parties that cease to be wholly-owned, directly or indirectly, by the Borrower.
 
7.2.12    Affiliate Transactions.  The Borrower shall not, and shall cause its Subsidiaries to not enter into or carry out any transaction with any Affiliate of any Borrower Affiliate Party (including purchasing property or services from or selling property or services) except for:
 
(a)          transactions not otherwise prohibited by this Agreement and entered into in the ordinary course of business upon fair and reasonable arm’s-length terms and conditions and in accordance with all applicable Law;
 
42

 
(b)          transactions with Affiliates entered into on or prior to the Closing Date and described on Schedule 7.2.12 hereto;
 
(c)          Affiliate Indebtedness permitted by Section 7.2.1 [Subsidiary Indebtedness];
 
(d)          Affiliate Liens permitted by Section 7.2.6 [Liens];
 
(e)          Investments in Affiliates permitted by Section 7.2.8 [Loans and Investments];
 
(f)           dividends and distributions which are permitted by Section 7.2.9 [Dividends and Related Distributions] and the agreements pursuant to which such dividends and distributions are required to be made,
 
(g)          loans to employees permitted by Section 7.2.8 [Loans and Investments];
 
(h)          reimbursement of employee travel and lodging costs incurred in the ordinary course of business;
 
(i)           payment of customary director’s fees to one or more independent directors of the Borrower Affiliate Parties; and
 
(j)           employment agreements, equity incentive agreements and other employee and management arrangements in the ordinary course of business which are fully disclosed to the Administrative Agent.
 
7.2.13    Subsidiaries, Partnerships and Joint Ventures.  The Borrower shall cause each of its Subsidiaries to not establish, create or acquire directly or indirectly any Subsidiaries; provided that if the Borrower establishes, creates or acquires directly or indirectly any Subsidiaries, the Borrower must pledge its interest in such new Subsidiary as collateral for the Loan.  Each Borrower Affiliate Party shall not become or agree to (i) become a general or limited partner in any general or limited partnership, (ii) become a member or manager of, or hold a limited liability company interest in, a limited liability company which is not a Borrower Affiliate Party, or (iii) become a joint venturer or hold a joint venture interest in any joint venture.  All of the LLC Interests in BFE Energy owned by the Borrower shall be pledged pursuant to the terms of the Pledge Agreement.
 
7.2.14    Continuation of or Change in Business.  The Borrower shall not, and shall cause each of its Subsidiaries to not engage in any business other than the business of constructing, owning, operating and maintaining the Project and performing its obligations pursuant to the Project Documents, Senior Loan Documents, Mezzanine Loan Documents, Article IV of the Pioneer Trail Redevelopment Contract (as defined in the Senior Credit Agreement) and the Loan Documents to which it is a party (and related businesses as conducted and operated by the Borrower Affiliate Parties) as conducted and operated by the Borrower Affiliate Parties, and the Borrower Affiliate Parties shall not permit any material change in such business.  The Borrower and BFE Holdings shall conduct no business other than ownership of the LLC Interests of the other Borrower Affiliate Parties.
 
43


7.2.15  Fiscal Year.  The Borrower shall not, and shall cause each of its Subsidiaries to not change its fiscal year from the twelve-month period ending December 31.
 
7.2.16  Issuance of Stock.  The Borrower shall cause each of its Subsidiaries to not issue any additional shares of their capital stock or LLC Interests or any options, warrants or other rights in respect thereof, except in connection with offerings by a Successor Corporation made pursuant to an offering of securities registered under the Securities Act of 1933, as amended.
 
7.2.17  Changes in Documents.  The Borrower shall not, and shall cause each of its Subsidiaries to not amend in (i) any material respect their certificate of incorporation, certificate of formation, by-laws, limited liability company agreement or other organizational documents, and (ii) any respect the Senior Loan Documents or the Mezzanine Loan Documents (as applicable); without providing at least three (3) Business Days’ prior written notice to the Administrative Agent and the Lenders and, in the event such change would be adverse to the Lenders as determined by the Administrative Agent in its sole discretion, without obtaining the prior written consent of the Required Lenders; provided that after the completion of a Rights Offering, the Borrower may amend its certificate of incorporation or by-laws to increase the number of authorized shares of Common Stock.
 
7.2.18  Inconsistent Agreements.  The Borrower shall not, and shall cause each of its Subsidiaries to not, and not permit any other Borrower Affiliate Party to, enter into any agreement (except agreements relating to the Permitted Senior Debt or the Permitted Mezzanine Debt) containing any provision which would (a) be violated or breached by any borrowing by the Borrower hereunder or by the performance by any Borrower Affiliate Party of any of its Obligations hereunder or under any other Loan Document, (b) prohibit the Borrower from granting to the Administrative Agent and the Lenders, a Lien on any of its assets or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of Borrower to (i) pay dividends or make other distributions to the Borrower or any other Subsidiary of Borrower, or pay any Indebtedness owed to the Borrower or any other Subsidiary, (ii) make loans or advances to any Borrower Affiliate Party or (iii) transfer any of its assets or properties to any Borrower Affiliate Party, other than (a) customary restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the assets of any Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted hereunder, (b) restrictions or conditions imposed by any agreement relating to purchase money Indebtedness, capital leases and other secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (c) customary provisions in leases and other contracts restricting the assignment thereof.
 
7.2.19  Cancellation of Indebtedness.  The Borrower shall not, and shall cause each of its Subsidiaries to not, and not permit any other Borrower Affiliate Party to, cancel any claim or debt owing to it, except for reasonable consideration or in the ordinary course of business.

 
44

 

7.2.20  [Reserved]
 
7.2.21  Tax Shelter Regulations.  The Borrower does not intend to treat the Loan and related transactions as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event any of the Borrower Affiliate Parties determines to take any action inconsistent with such intention, the Borrower will promptly (1) notify the Administrative Agent thereof, and (2) deliver to the Administrative Agent a duly completed copy of IRS Form 8886 or any successor form.  If the Borrower so notifies the Administrative Agent, the Borrower acknowledges that one or more of the Lenders may treat its Loan as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation.
 
7.2.22  Amendment of Additional Project Documents.  The Borrower shall not, and shall cause each of its Subsidiaries to not (i) agree to or permit the cancellation, suspension or termination of any Project Document, any Senior Loan Document or any Mezzanine Loan Document; (ii) sell, assign or otherwise dispose of (by operation of law or otherwise) any part of its interest in any Project Document; (iii) waive any material default under or material breach of any Project Document or waive, fail to enforce, forgive or release any right, interest or entitlement, howsoever arising, under or in respect of any Project Document; (iv) petition, request or take any other legal or administrative action that seeks, or may be expected, to rescind, terminate or suspend any Project Document or amend or modify all or any part thereof; (v) exercise any right to initiate an arbitration proceeding under any Project Document or take any action with respect to any arbitration proceeding involving any other party to a Project Document; (vi) agree to or permit the assignment of any rights or the delegation of any obligations of any Project Participant under any Project Document except as permitted without the consent of the Borrower Affiliate Parties by the terms of such Project Document; and (vii) amend, supplement, modify or give any consent in any material respect under any Project Document or exercise any material option thereunder without the prior written consent of the Administrative Agent, not to be unreasonably withheld.
 
7.2.23  ERISA.  No Borrower nor any ERISA Affiliate of any Borrower shall at any time establish, maintain, contribute to or be required or permitted to contribute to any Plan or Multiemployer Plan.
 
7.2.24  Certain Agreements.  The Borrower shall not and shall cause each of its Subsidiaries to not enter into any agreement or undertaking (except for the Senior Loan Documents or the Mezzanine Loan Documents and except pursuant to any agreement approved by the Required Lenders for the refinancing of the Loan) restricting, or purporting to restrict, the ability of such entity to (a) amend this Agreement or any other Loan Document, (b) sell any of its assets, (c) create Liens, (d) create or incur Indebtedness or (e) make any distribution.
 
7.3          Reporting Requirements.  The Borrower covenants and agrees that until payment in full of the Obligations, and interest thereon, the Borrower shall, and shall cause each of its Subsidiaries (as applicable) to furnish or cause to be furnished to the Administrative Agent, and, upon the reasonable request of any Lender, to such Lender:

 
45

 

7.3.1     Quarterly Financial Statements.  As soon as available and in any event within forty-five (45) days after the end of each quarterly fiscal period of the Borrower, a copy of the complete unaudited, consolidated statements of income, retained earnings and cash flow of the Borrower, and the related unaudited, consolidated balance sheet of the Borrower as at the end of such period, setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, if any, accompanied by a certificate of an Authorized Officer of the Borrower, which certificate shall state that said financial statements fairly present the financial condition and results of operations of the Borrower in accordance with GAAP, consistently applied, as at the end of, and for, such periods (subject to normal year-end audit adjustments); provided that filing such financial statements with the SEC shall satisfy the requirements of this subsection;
 
7.3.2     Annual Financial Statements.  As soon as available and in any event within one hundred and twenty (120) days after the end of each fiscal year of the Borrower a copy of the complete audited, consolidated statements of income, retained earnings and cash flow of the Borrower, and the related audited, consolidated balance sheet of the Borrower as at the end of such year and any related audit letter, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by an unqualified opinion thereon of Grant Thornton LLP or other independent public accountants of recognized national standing, which opinion shall state that said financial statements fairly present the financial condition and results of operations of the Borrower, as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of accountants to the Borrower stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Event of Default; provided that filing such financial statements with the SEC shall satisfy the requirements of this subsection;
 
7.3.3     Certificate of the Borrower.  At the time the Borrower furnishes each set of financial statements pursuant to Section 7.3.1 [Quarterly Financial Statements] or Section 7.3.2 [Annual Financial Statements], an officer’s certificate executed by an Authorized Officer to the effect that no Potential Default or Event of Default has occurred and is continuing (or, if any Potential Default or Event of Default has occurred and is continuing, describing the same in reasonable detail and describing what action the Borrower has taken and proposes to take with respect thereto);
 
7.3.4     Notice of Default.  Promptly after any officer or director of any Borrower Affiliate Party knows or has a reasonable basis to believe that any Potential Default or Event of Default or any default by any Project Participant under any Project Document has occurred, a written notice of such event describing the same in detail satisfactory to the Administrative Agent and, together with such notice, a description of what action such Borrower Affiliate Party or such Project Participant has taken and proposes to take with respect thereto.
 
7.3.5     Certain Events.  The Borrower shall, and shall cause each of its Subsidiaries to, promptly, but in any event no later than ten Business Days after any officer or director obtains knowledge thereof (except if expressly stated differently below), give to the Administrative Agent written notice of:
 
 
46

 

(a)          at least thirty (30) calendar days prior thereto, with respect to any proposed sale or transfer of assets pursuant to Section 7.2.11 [Dispositions of Assets or Subsidiaries];
 
(b)          at least thirty (30) calendar days prior thereto, with respect to any change in any Borrower Affiliate Parties’ locations;
 
(c)          any pending or threatened application or proceeding by or before any Official Body for the purpose of revoking, terminating, withdrawing, suspending, modifying or withholding any Necessary Governmental Approval;
 
(d)          any litigation or proceeding affecting any Borrower Affiliate Party,  any Plant or the Project in which the amount involved is $250,000 or more or in which injunctive, declaratory or similar relief is requested;
 
(e)          any litigation, investigation or proceeding affecting any Project Participant which if adversely determined would reasonably be expected to have a Material Adverse Effect;
 
(f)           the discovery of any Hazardous Materials on the Land or any other condition that could give rise to a material violation of or liability under any Environmental Law or of any Environmental Claim against or affecting any Borrower Affiliate Party, any Plant or the Project;
 
(g)          any request by a Project Participant for an arbitration proceeding under any Project Document in which the amount involved is $250,000 or more or in which injunctive, declaratory or similar relief is requested;
 
(h)          any (a) Taking, or (b) other casualty, damage or loss to any Property of any Borrower Affiliate Party, whether or not insured, through fire, theft, other hazard or event, in excess of $250,000 for any one casualty or loss or $1,000,000 in the aggregate in any calendar year;
 
(i)           any delay for more than seven (7) consecutive days for any reason in the construction of any Plant or the Project and any unscheduled shutdown or reduction in operation of any Plant, or any substantial labor dispute which would lead to such a shutdown or reduction;
 
(j)           any actual, proposed or threatened cessation or suspension of the Work for any reason by the EPC Contractor for a period in excess of 48 hours;
 
(k)          any event constituting force majeure under any of the Project Documents or any claim by any Project Participant alleging that a force majeure event thereunder has occurred;
 
(l)           any event that would reasonably be expected to result in a reduction in the  water allocation of any Borrower Affiliate Party for the operation of the Project;
 
 
47

 

(m)         any other event, circumstance, development or condition which could reasonably be expected to have a Material Adverse Effect; and
 
Each notice pursuant to this Section 7.3.5 shall be accompanied by a statement signed by an Authorized Officer of the Borrower setting forth a description in reasonable detail of the occurrence referred to therein and stating what action the Borrowers propose to take with respect thereto.
 
7.3.6     Other Information.  The Borrower shall deliver from time to time, such other information regarding the financial condition, operations, business or prospects of any Borrower Affiliate Party, any Plant or the Project or, to the extent obtainable by any Borrower Affiliate Party upon the exercise of its reasonable efforts, any Project Participant, as may be reasonably requested by the Administrative Agent.
 
7.3.7     Environmental Reports.  The Borrower shall deliver within sixty (60) days after the end of each year, a report summarizing the environmental performance of each Plant over the preceding year, which report shall include narrative summaries of (i) the results of any environmental monitoring or sampling activity, (ii) accidents having an impact on the environment or resulting in the loss of life, (iii) environmental deficiencies identified by any Official Body and (iv) any non-compliance with Environmental Laws and any remedial actions taken with respect thereto.
 
7.3.8     Operating Plan and Budget   No less than forty-five (45) days in advance of the beginning of each Operating Year, the Borrower will cause its Subsidiaries to adopt an operating plan and a budget of Operation and Maintenance Expenses for the ensuing Operating Year.  Such operating plan and budget for an Operating Year is herein called an “Operating Budget.”  Copies of the proposed Operating Budget for each period shall be submitted at least forty-five (45) days before final adoption thereof to the Administrative Agent, and no Operating Budget shall be adopted without the prior written approval of the Administrative Agent and the Required Lenders (in consultation with the Independent Engineer).  The Administrative Agent shall indicate in writing its approval (together with that of the Required Lenders), disapproval or modifications to the Operating Budget within twenty (20) days upon receipt of such Operating Budget.  In the event that the prior written approval of the Administrative Agent and the Required Lenders for a proposed Operating Budget is not obtained prior to the first day of the Operating Year to which such proposed Operating Budget relates, the respective Subsidiary may continue to operate the Project in accordance with the Operating Budget then in effect with the budgeted cost of each budget item being increased to the lesser of (i) the amount therefor in the proposed Operating Budget or (ii) one hundred and two and one-half percent (102.5%) of the amount of the budgeted cost of such budget item in the current Operating Budget. Copies of the final Operating Budget so adopted shall be furnished to the Administrative Agent (and distributed to the Lenders) promptly upon the adoption thereof; provided that if the initial Operating Budget for any Plant or the Project is not approved by the administrative agent under the Senior Credit Agreement, the Borrower shall cause its Subsidiaries to operate such Plant or the Project in accordance with the Base Case Projections (as defined in the Senior Credit Agreement) as of the Closing Date (or any update thereof that has been approved by the administrative agent under the Senior Credit Agreement) with the budgeted cost of each budget item being no greater than one hundred and two and one-half percent (102.5%) of the amount of the budgeted cost of such budget item in such Base Case Projections until an initial Operating Budget is approved.

 
48

 

(b)           Each Operating Budget shall be prepared on a cash basis and shall specify, for each month during the Operating Year (i) the Project revenues anticipated to be received, and (ii) the Operation and Maintenance Expenses (by category), together with a comparative presentation of Operation and Maintenance Expenses for each month in the prior Operating Year, and shall describe in reasonable detail (A) the maintenance schedule, anticipated staffing plans, mobilization schedules, capital expenditure requirements (including the Maintenance Capital Expenses), equipment acquisitions and spare parts and consumable inventories (including a breakdown of capital items and expense items), and administrative activities and (B) any other material underlying assumptions in connection with the proposed Operating Budget.
 
(c)           The Borrower Affiliate Parties may at any time propose an amended annual budget for the remainder of the then current Operating Year and, when and if so adopted pursuant to this Section 7.3.8, it shall be deemed to be and shall be effective as the annual Operating Budget.  Copies of any such amended Operating Budget which is proposed shall be furnished at least 10 days before final adoption thereof to the Administrative Agent, and no such amended Operating Budget shall be adopted without the prior written approval of the Administrative Agent.  Copies of the final amended Operating Budget shall be furnished to the Administrative Agent promptly after adoption thereof.
 
8.  DEFAULT
 
8.1         Events of Default.  An “Event of Default” shall mean the occurrence or existence of any one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):
 
8.1.1     Payments Under Loan Documents.  The Borrower shall fail to pay (i) any principal of or interest on the Loan (including mandatory prepayments or the payment due at maturity), when such principal becomes due and in the case of interest, within three Business Days after the same becomes due, (ii) shall fail to pay any other amount owing hereunder or under the other Loan Documents on or before five (5) days after such other amount becomes due in accordance with the terms hereof or thereof or (iii) shall fail to issue the Warrant pursuant to Section 4.3.2, in accordance with the terms hereof;
 
8.1.2     Breach of Warranty.  Any representation, warranty or certification made (or deemed made) at any time by the Borrower Affiliate Parties herein or by the Borrower Affiliate Parties in any other Loan Document, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect when made or deemed made if such representation, warranty or certification continues to be false or misleading in any material respect as of the date in question, and if the circumstances that rendered such representation, warranty or certification false or misleading shall be continuing for more than 30 days after any Authorized Officer of the Borrower has knowledge thereof or receives notice thereof from any Lender;
 
 
49

 

8.1.3     Breach of Certain Covenants.  The Borrower shall default in the observance or performance of any covenant contained in Section 7.1.1 [Preservation of Existence, Etc.], Section 7.1.3 [Maintenance of Insurance], Section 7.1.12 [Performance of Project Documents], Section 7.1.15 [Rights Offering], Section 7.2.1 [Subsidiary Indebtedness], Section 7.2.6 [Liens], Section 7.2.8 [Loans and Investments], Section 7.2.9 [Dividends and Related Distributions], Section 7.2.10 [Liquidations, Mergers, Consolidations, Acquisitions], Section 7.2.11 [Dispositions of Assets or Subsidiaries], Section 7.2.14 [Continuation of or Change in Business], Section 7.2.17 [Changes in Documents], or Section 7.2.22 [Amendment of Additional Project Documents];
 
8.1.4     Breach of Other Covenants.  Any of the Borrower Affiliate Parties shall default in the observance or performance of any other covenant, condition or provision hereof or of any other Loan Document, and any of the foregoing defaults shall continue unremedied for a period of thirty (30) calendar days after any officer of any Borrower Affiliate Party becomes aware of the occurrence thereof; provided that, if (i) such failure cannot be cured within such 30-day period, (ii) such failure is susceptible of cure, (iii) the Borrower and any other applicable Borrower Affiliate Party is proceeding with diligence and in good faith to cure such failure, (iv) the existence of such failure does not impair the Liens on the Collateral, (v) the existence of such failure has not had and cannot, after considering the nature of the proposed cure, be reasonably expected to have a Material Adverse Effect, and (vi) the Administrative Agent shall have received an officer’s certificate executed by an Authorized Officer to the effect of clauses (i), (ii), (iii), (iv) and (v) above and stating what actions such Borrower and any applicable Borrower Affiliate Party is taking to cure such failure, then the time within which such failure may be cured shall be extended to such date, not to exceed a total of 60 days after the end of such 30-day period, as shall be necessary for such Borrower and any applicable Borrower Affiliate Party diligently to cure such failure;
 
8.1.5     Defaults in Other Agreements or Indebtedness.  (A) A default or event of default shall occur at any time under the terms of any (i) master lease agreement for any Borrower Affiliate Party’s commercial vehicles or real property lease which involves the payment of aggregate amounts in excess of $100,000 and which entitles the lessor thereunder to terminate or accelerate such lease (after giving effect to any applicable cure periods under such lease), (ii) any Senior Loan Document, (iii) any Mezzanine Loan Document, (iv) any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Borrower Affiliate Party may be obligated as a borrower or guarantor in an aggregate amount in excess of $100,000 or (B) failure to pay any indebtedness (after giving effect to any applicable cure periods under such indebtedness) in an aggregate amount in excess of $100,000 when due occurs (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any indebtedness (whether or not such right shall have been waived) or the termination of any commitment to lend;
 
8.1.6     Final Judgments or Orders.  Any final judgments or orders for the payment of money in excess of $2,000,000 in the aggregate (exclusive of amounts covered by insurance) shall be entered against any Borrower Affiliate Party by a court having jurisdiction in the premises, which judgment is not discharged, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry;
 
 
50

 

8.1.7     Loan Document Unenforceable.  Any of the Loan Documents shall cease to be legal, valid and binding agreements enforceable against the party executing the same or such party’s successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested or cease to give or provide the respective Liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby and except to the extent that the enforceability of such document or Lien may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors' rights generally;
 
8.1.8     Uninsured Losses; Proceedings Against Assets.  A material part of the Project shall be destroyed or suffer an actual or constructive loss and, as a result thereof, any Plant shall be unable to operate for three (3) Business Days in excess of the period during which all Operation and Maintenance Expenses and Debt Service (as defined in the Senior Credit Agreement) shall be fully covered by delayed start up or business interruption insurance (except for the period corresponding to the deductible thereunder);
 
8.1.9     Termination of Rights Offering.  (i)  Borrower terminates the Rights Offering Letter Agreement for any reason other than in accordance with the Borrower’s election to pursue a Substitute Transaction as expressly permitted in Section 20 of the Rights Offering Letter Agreement, (ii) the occurrence of any breach under Section 4.5.3 or (iii) Borrower contests the validity of the Rights Offering Letter Agreement in any manner.
 
8.1.10   Insolvency.  Any Borrower Affiliate Party ceases to be solvent or admits in writing its inability to pay its debts as they mature;
 
8.1.11   Cessation of Business.  Any Borrower Affiliate Party ceases to conduct its business as contemplated, except as expressly permitted under Section 7.2.10 [Liquidations, Mergers, Consolidations, Acquisitions] or 7.2.11 [Dispositions of Assets or Subsidiaries], or any Borrower Affiliate Party is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business and such injunction, restraint or other preventive order is not dismissed within thirty (30) days after the entry thereof;
 
8.1.12   Change of Control.  A Change of Control shall occur.
 
8.1.13   Breach of Material Agreement. (i) Any material breach by the Borrower of the Rights Offering Letter Agreement; provided that, no such material breach shall constitute an Event of Default if cured in accordance with the applicable provisions of the Rights Offering Letter Agreement or (ii) the occurrence of (a) any breach of any provision of the Cargill Acknowledgement Letter (whether by Borrower or Cargill) or (b) any modification, waiver, amendment or termination of the Cargill Acknowledgement Letter.
 
8.1.14   Executive Management Waiver Agreements. The failure of the Borrower to secure on or before October 8, 2010, an executed Executive Management Waiver Agreement from each of the individuals identified on Schedule 1.1(B).
 
 
51

 

8.1.15   Involuntary Proceedings.  A proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of any Borrower Affiliate Party an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Borrower Affiliate Party for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting any of the relief sought in such proceeding; or
 
8.1.16   Voluntary Proceedings.  Any Borrower Affiliate Party shall commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or other similar official) of itself or for any substantial part of its property or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action in furtherance of any of the foregoing.
 
8.2          Consequences of Event of Default.
 
8.2.1     Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings.  If any Event of Default specified under Sections 8.1.1 [Payments under Loan Documents] through 8.1.14 [Executive Management Waiver Agreements] shall occur and be continuing, the Lenders and the Administrative Agent may, and upon the request of the Required Lenders, shall by written notice to the Borrower, declare the unpaid principal amount of the Notes and Obligations then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and be immediately due and payable to the Administrative Agent for the benefit of each Lender without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived.
 
8.2.2     Bankruptcy, Insolvency or Reorganization Proceedings.  If an Event of Default specified under Section 8.1.15 [Involuntary Proceedings] or 8.1.16 [Voluntary Proceedings] shall occur, the unpaid principal amount of the Loan then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived;
 
8.2.3     Suits, Actions, Proceedings.  If an Event of Default shall occur and be continuing, and whether or not the Administrative Agent shall have accelerated the maturity of the Loan pursuant to any of the foregoing provisions of this Section 8.2 [Consequences of Events of Default], the Administrative Agent or any Lender, if owed any amount with respect to the Loan, may proceed to protect and enforce its rights by suit in equity, action at law and/or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement or the other Loan Documents and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Administrative Agent or such Lender;
 
 
52

 

8.2.4      Application of Proceeds.  From and after the date on which the Administrative Agent has taken any action pursuant to this Section 8.2 [Consequences of Events of Default] and until all Obligations of the Borrower Affiliate Parties have been paid in full (other than contingent indemnification obligations to the extent no claims giving rise thereto have been asserted), any and all proceeds received by the Administrative Agent or any Lender from any sale or other disposition of the Collateral, or any part thereof, or the exercise of any other remedy by the Administrative Agent, shall be applied as follows:
 
(a)           first, to reimburse the Administrative Agent and the Lenders for out-of-pocket costs, expenses and disbursements, including reasonable attorneys’ fees and legal expenses, incurred by the Administrative Agent or the Lenders in connection with realizing on the Collateral or collection of any Obligations of the Borrower Affiliate Parties under any of the Loan Documents, including advances made by the Lenders or any one of them or the Administrative Agent for the maintenance, preservation, protection or enforcement of, or realization upon, the Collateral, including advances for taxes, insurance, repairs and the like and expenses incurred to sell or otherwise realize on, or prepare for sale or other realization on, any of the Collateral;
 
(b)           second, to the repayment of all Indebtedness then due and unpaid of the Borrower Affiliate Parties to the Lenders incurred under this Agreement or any of the other Loan Documents, whether of principal, interest, fees, expenses or otherwise, in such manner as the Administrative Agent may determine in its discretion, in each case to be allocated among the Lenders in accordance with their Ratable Share; and
 
(c)           the balance, if any, to the Borrower or as otherwise as required by Law.
 
8.2.5      Other Rights and Remedies.  In addition to all of the rights and remedies contained in this Agreement or in any of the other Loan Documents, the Administrative Agent shall have all of the rights and remedies of a secured party under the Uniform Commercial Code or other applicable Law, all of which rights and remedies shall be cumulative and non-exclusive, to the extent permitted by Law.  The Administrative Agent may, and upon the request of the Required Lenders shall, exercise all post-default rights granted to the Administrative Agent and the Lenders under the Loan Documents or applicable Law.
 
9.  THE ADMINISTRATIVE AGENT
 
9.1          Appointment.  Each Lender hereby irrevocably designates, appoints and authorizes the Administrative Agent to act as agent for such Lender under this Agreement and to execute and deliver or accept on behalf of each of the Lenders the other Loan Documents.  Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of a Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and any other instruments and agreements referred to herein, and to exercise such powers and to perform such duties hereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto.  The Administrative Agent agrees to act as the agent on behalf of the Lenders to the extent provided in this Agreement.
 
 
53

 

9.2          Duties; Delegation of Duties.  The Administrative Agent may perform any of its duties hereunder by or through agents or employees (provided such delegation does not constitute a relinquishment of its duties as Administrative Agent) and, subject to Sections 9.5 [Exculpatory Provisions; Limitations of Liability.] and 9.6 [Reimbursement and Indemnification of Administrative Agent by Lenders], shall be entitled to engage and pay for the advice or services of any attorneys, accountants or other experts concerning all matters pertaining to its duties hereunder and to rely upon any advice so obtained.
 
9.2.1      Collateral Matters.  Without limiting the foregoing, the Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, (a) to release any Lien granted to or held by the Administrative Agent under any Loan Document (i) upon payment in full of the Loan and all other obligations of the Borrower Affiliate Parties hereunder; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition permitted hereunder; or (iii) subject to Section 10.1.2 [Release of Collateral], if approved, authorized or ratified in writing by the Required Lenders; or (b) with the prior written consent of Required Lenders, to subordinate its interest in any collateral to any holder of a Lien on such collateral which is permitted by Section 7.2.6 [Liens], it being understood that the Administrative Agent may conclusively rely on a certificate from the Borrower Affiliate Parties in determining whether the Indebtedness secured by any such Lien is permitted by Section 7.2.1 [Subsidiary Indebtedness].  Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release, or subordinate its interest in, particular types or items of collateral pursuant to this Section 9.2.1.
 
9.2.2      Administrative Agent May File Proofs of Claim.  Without limiting the foregoing, in case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower Affiliate Party, the Administrative Agent (irrespective of whether the principal of the Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
 
(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loan, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under this Agreement) allowed in such judicial proceedings; and
 
(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
 
 
54

 

(c)           and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under this Agreement.
 
(d)           Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
 
9.3         Nature of Duties; Independent Credit Investigation.  The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants, functions, responsibilities, duties, obligations, or liabilities shall be read into this Agreement or otherwise exist except as otherwise provided for under applicable Law.  The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement a fiduciary or trust relationship in respect of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement except as expressly set forth herein.  Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.  Each Lender expressly acknowledges (i) that the Administrative Agent has not made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Borrower Affiliate Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender; (ii) that it has made and will continue to make, without reliance upon the Administrative Agent, its own independent investigation of the financial condition and affairs and its own appraisal of the creditworthiness of the Borrower Affiliate Parties in connection with this Agreement and the making and continuance of the Loan hereunder; and (iii) except as expressly provided herein, that the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto.
 
9.4         Actions in Discretion of Administrative Agent; Instructions From the Lenders.  The Administrative Agent agrees, upon the written request of the Required Lenders, to take or refrain from taking any action of the type specified as being within the Administrative Agent’s rights, powers or discretion herein, provided that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or any other Loan Document or applicable Law.  In the absence of a request by the Required Lenders, the Administrative Agent shall have authority, in its sole discretion, to take or not to take any such action, unless this Agreement specifically requires the consent of the Required Lenders or all of the Lenders.  Any action taken or failure to act pursuant to such instructions or discretion shall be binding on the Lenders, subject to Section 9.5 [Exculpatory Provisions, Limitations of Liability].  Subject to the provisions of Section 9.5 [Exculpatory Provisions, Limitation of Liability], no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders, or in the absence of such instructions, in the absolute discretion of the Administrative Agent.
 
 
55

 

9.5         Exculpatory Provisions; Limitation of Liability.  Neither the Administrative Agent nor any of its directors, officers, employees, agents, attorneys or Affiliates shall (i) be liable to any Lender for any action taken or omitted to be taken by it or them hereunder, or in connection herewith including pursuant to any Loan Document, unless caused by its or their own gross negligence or willful misconduct, (ii) be responsible in any manner to any of the Lenders for the effectiveness, enforceability, genuineness, validity or the due execution of this Agreement or any other Loan Documents or for any recital, representation, warranty, document, certificate, report or statement herein or made or furnished under or in connection with this Agreement or any other Loan Documents, or (c) be under any obligation to any of the Lenders to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions hereof or thereof on the part of the Borrower Affiliate Parties, or the financial condition of the Borrower Affiliate Parties, or the existence or possible existence of any Event of Default or Potential Default. No claim may be made by any Borrower Affiliate Party, any Lender, the Administrative Agent or any of their respective Subsidiaries against the Administrative Agent, any Lender or any of their respective directors, officers, employees, agents, attorneys or Affiliates, or any of them, for any special, indirect or consequential damages or, to the fullest extent permitted by Law, for any punitive damages in respect of any claim or cause of action (whether based on contract, tort, statutory liability, or any other ground) based on, arising out of or related to any Loan Document or the transactions contemplated hereby or any act, omission or event occurring in connection therewith, including the negotiation, documentation, administration or collection of the Loan, and the Borrower Affiliate Parties, the Administrative Agent and each Lender hereby waive, release and agree never to sue upon any claim for any such damages, whether such claim now exists or hereafter arises and whether or not it is now known or suspected to exist in its favor.  Each Lender agrees that, except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder or given to the Administrative Agent for the account of or with copies for the Lenders, the Administrative Agent and each of its directors, officers, employees, agents, attorneys or Affiliates shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrower Affiliate Parties which may come into the possession of the Administrative Agent or any of its directors, officers, employees, agents, attorneys or Affiliates.

 
56

 

9.6         Reimbursement and Indemnification of Administrative Agent by Lenders.  Whether or not the transactions contemplated hereby are consummated, each Lender agrees to reimburse and indemnify the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the Obligation of the Borrower to do so) in proportion to its Ratable Share from and against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, including attorneys’ fees and disbursements (including the allocated costs of staff counsel), and costs of appraisers and environmental consultants, of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent, in its capacity as such, in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by the Administrative Agent hereunder or thereunder, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements if the same results from the Administrative Agent’s gross negligence or willful misconduct.  In addition, each Lender agrees promptly upon demand to reimburse the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the Obligation of Borrower to do so) in proportion to its Ratable Share for all amounts due and payable by the Borrower to the Administrative Agent in connection with the Administrative Agent’s periodic audit of the Borrower Affiliate Parties’ books, records and business properties.  No action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.  Without limitation the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its Ratable Share of any costs or out of pocket expenses (including attorney costs and taxes) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section 9.6 shall survive repayment of the Loan, cancellation of the Notes, any foreclosure under, or modification, release or discharge of, any or all of the Loan Documents, termination of this Agreement and the resignation or replacement of the Administrative Agent.
 
9.7         Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon any writing, telegram or teletype message, resolution, notice, consent, certificate, letter, cablegram, statement, order or other document or conversation by telephone or otherwise believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon the advice and opinions of counsel and other professional advisers selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.
 
9.8         Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Potential Default or Event of Default unless the Administrative Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Potential Default or Event of Default and stating that such notice is a “notice of default.”
 
9.9         Notices.  The Administrative Agent shall promptly send to each Lender a copy of all notices received from the Borrower pursuant to the provisions of this Agreement or the other Loan Documents promptly upon receipt thereof.
 
 
57

 

9.10      Lenders in Their Individual Capacities; Administrative Agent in its Individual Capacity.  With respect to any Commitment of one of its Affiliates, the Term Loan, and any other rights and powers given to an Affiliate of the Administrative Agent as a Lender hereunder or under any of the other Loan Documents, any such Affiliate shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not an Affiliate of the Administrative Agent.  The Administrative Agent and its Affiliates and each of the Lenders and their respective Affiliates may, without liability to account, except as prohibited herein, make loans to, acquire equity interests in, discount drafts for, act as trustee under indentures of, and generally engage in any kind of lending trust, financial advisory, underwriting or other business with, the Borrower Affiliate Parties and their Affiliates, in the case of the Administrative Agent, as though it were not acting as agent hereunder and in the case of each Lender, as though such Lender were not a Lender hereunder, in each case without notice to or consent of the other Lenders.  The Lenders acknowledge that, pursuant to such activities, the Administrative Agent or its Affiliates may (i) receive information regarding the Borrower Affiliate Parties or any of its Subsidiaries or Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower Affiliate Parties or such Subsidiary or Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them, and (ii) accept fees and other consideration from the Borrower Affiliate Parties for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.
 
9.11      Holders of Notes.  The Administrative Agent may deem and treat any payee of any Note as the owner thereof for all purposes hereof unless and until written notice of the assignment or transfer thereof shall have been filed with the Administrative Agent.  Any request, authority or consent of any Person who at the time of making such request or giving such authority or consent is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note or Notes issued in exchange therefor.
 
9.12      Equalization of Lenders.  The Lenders and the holders of any participations in any Notes agree among themselves that, with respect to all amounts received by any Lender or any such holder for application on any Obligation hereunder or under any Note or under any such participation, whether received by voluntary payment, by realization upon security, by the exercise of the right of set-off, by counterclaim or by any other non-pro rata source, equitable adjustment will be made in the manner stated in the following sentence so that, in effect, all such excess amounts will be shared ratably among the Lenders and such holders in proportion to their interests in payments under the Notes, except as otherwise provided in Section 4.6 [Additional Compensation in Certain Circumstances].  The Lenders or any such holder receiving any such amount shall return any proceeds to the Administrative Agent, and the Administrative Agent shall distribute said proceeds based on each Lender’s Ratable Share.
 
9.13      Successor Administrative Agent.  The Administrative Agent may resign as Administrative Agent by giving not less than thirty (30) days’ prior written notice to the Lenders and the Borrower. If the Administrative Agent shall resign under this Agreement, then either (i) the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, subject to the consent of the Borrower, such consent not to be unreasonably withheld, or (ii) if a successor agent shall not be so appointed and approved within the thirty (30) day period following the Administrative Agent’s notice to the Lenders of its resignation, then the Administrative Agent shall appoint, with the consent of the Borrower, such consent not to be unreasonably withheld, a successor agent who shall serve as Administrative Agent until such time as the Required Lenders, appoint and the Borrower consents to the appointment of, a successor agent.  Upon its appointment pursuant to either clause (i) or (ii) above, such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent, effective upon its appointment, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement.  After the resignation of any Administrative Agent hereunder, the provisions of this Article 9 [the Administrative Agent] shall inure to the benefit of such former Administrative Agent and such former Administrative Agent shall not by reason of such resignation be deemed to be released from liability for any actions taken or not taken by it while it was an Administrative Agent under this Agreement.
 
 
58

 

9.14      Availability of Funds.  The Administrative Agent may assume that each Lender has made or will make the proceeds of the Loan available to the Administrative Agent unless the Administrative Agent shall have been notified by such Lender on or before the close of Business on the Business Day preceding the Closing Date with respect to the Loan.  The Administrative Agent may, in reliance upon such assumption (but shall not be required to), make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such amount on demand from such Lender (or, if such Lender fails to pay such amount forthwith upon such demand from the Borrower) together with interest thereon, in respect of each day during the period commencing on the date such amount was made available to the Borrower and ending on the date the Administrative Agent recovers such amount, at a rate per annum equal to the Interest Rate.
 
9.15      Calculations.  In the absence of gross negligence or willful misconduct, the Administrative Agent shall not be liable for any error in computing the amount payable to any Lender whether in respect of the Loan, fees or any other amounts due to the Lenders under this Agreement.  In the event an error in computing any amount payable to any Lender is made, the Administrative Agent, the Borrower and each affected Lender shall, forthwith upon discovery of such error, make such adjustments as shall be required to correct such error, and any compensation therefor will be calculated at the Interest Rate.
 
9.16      Beneficiaries.  Except as expressly provided herein or as required by applicable law, the provisions of this Article 9 [the Administrative Agent] are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower Affiliate Parties shall not have any rights to rely on or enforce any of the provisions hereof.  In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any of the Borrower Affiliate Parties.
 
10.  MISCELLANEOUS
 
10.1      Modifications, Amendments or Waivers.  With the written consent of the Required Lenders, the Administrative Agent, acting on its own behalf and on behalf of all the Lenders, and the Borrower Affiliate Parties, may from time to time enter into written agreements amending or changing any provision of this Agreement or any other Loan Document or the rights of the Lenders or the Borrower Affiliate Parties hereunder or thereunder, or may grant written waivers or consents to a departure from the due performance of the Obligations of the Borrower Affiliate Parties hereunder or thereunder.  Any such agreement, waiver or consent made with such written consent shall be effective to bind all the Lenders and the Borrower Affiliate Parties; provided, that, without the written consent of all the Lenders, no such agreement, waiver or consent may be made which will:
 
 
59

 

10.1.1   Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment.  Extend the time for payment of principal or interest of the Loan, the Bridge Loan Funding Fee or any other fee payable to any Lender, or reduce the principal amount of or the rate of interest borne by the Loan or reduce the Bridge Loan Funding Fee or any other fee payable to any Lender, or otherwise affect the terms of payment of the principal of or interest of the Loan, the Bridge Loan Funding Fee or any other fee payable to any Lender (it being understood that a waiver of the application of the Penalty Rate of interest pursuant to Section 3.2 [Interest After Default] shall require only the approval of the Required Lenders);
 
10.1.2   Release of Collateral.  Except for sales of assets permitted by Section 7.2.11 [Dispositions of Assets or Subsidiaries], or as a result of any merger or consolidation permitted by Section 7.2.10 [Liquidations, Mergers, Consolidations, Acquisitions], release any Collateral consisting of the LLC Interests of BFE Energy owned by the Borrower or any other security for any of the Borrower Affiliate Parties’ Obligations; or
 
10.1.3   Miscellaneous.  Amend Sections 4.2 [Pro Rata Treatment of Lenders], 7.2.11 [Dispositions of Assets or Subsidiaries], 9.5 [Exculpatory Provisions; Limitation of Liability] or 9.12 [Equalization of Lenders] or this Section 10.1, alter any provision regarding the pro rata treatment of the Lenders, change the definition of Required Lenders, or change any requirement providing for the Lenders or the Required Lenders to authorize the taking of any action hereunder; provided, further, that no agreement, waiver or consent which would modify the interests, rights or obligations of the Administrative Agent in its capacity as Administrative Agent shall be effective without the written consent of the Administrative Agent.
 
10.2        No Implied Waivers; Cumulative Remedies; Writing Required.  No course of dealing and no delay or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power, remedy or privilege preclude any further exercise thereof or of any other right, power, remedy or privilege.  The rights and remedies of the Administrative Agent and the Lenders under this Agreement and any other Loan Documents are cumulative and not exclusive of any rights or remedies which they would otherwise have.  Any waiver, permit, consent or approval of any kind or character on the part of any Lender of any breach or default under this Agreement or any such waiver of any provision or condition of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing.
 
 
60

 

10.3        Reimbursement and Indemnification of Lenders by the Borrower; Taxes.  Whether or not the transactions contemplated hereby shall be consummated, the Borrower agrees to pay promptly (i) all reasonable out of pocket costs and expenses of negotiation, preparation and execution of the Loan Documents and any consents, amendments, waivers or other modifications thereto; (ii) all costs and expenses of furnishing all opinions by counsel for Borrower (including any opinions requested by Administrative Agent or Lenders as to any legal matters arising hereunder) and of Borrower’s performance of and compliance with all agreements and conditions on its part to be performed or complied with under this Agreement and the other Loan Documents including with respect to confirming compliance with environmental, insurance and solvency requirements; (iii) all reasonable fees, expenses and disbursements of counsel to the Administrative Agent in connection with the negotiation, preparation, execution and administration of the Loan Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by the Borrower or any other Borrower Affiliate Party; (iv) all reasonable fees, expenses and disbursements of counsel to any Lender in connection with the negotiation, preparation, execution and administration of the Loan Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by the Borrower or any other Borrower Affiliate Party, (v) all costs and expenses of creating and perfecting Liens in favor of the Administrative Agent on behalf of Lenders, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, if applicable, and reasonable fees, expenses and disbursements of counsel to the Administrative Agent and of counsel providing any opinions that the Administrative Agent or Required Lenders may request in respect of the Collateral or the Liens created pursuant thereto; (vi) all costs and expenses incurred by the Administrative Agent in connection with the custody or preservation of any of the Collateral; (vii) all other costs and expenses incurred on or before the Closing Date by the Administrative Agent; (viii) all costs and expenses, including reasonable attorneys’ fees and fees, costs and expenses of accountants, advisors and consultants, incurred by the Administrative Agent or any Lender and their counsel relating to efforts to (a) evaluate or assess any Borrower Affiliate Party, its business or financial condition and (b) protect, evaluate, assess or dispose of the Collateral; and (ix) all costs and expenses, including reasonable attorneys’ fees, fees, costs and expenses of accountants, advisors and consultants and costs of settlement, incurred by the Administrative Agent and Lenders in enforcing any Obligations of or in collecting any payments due from any Borrower Affiliate Party hereunder or under the other Loan Documents (including in connection with the sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Loan Documents) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings.  The Borrower agrees unconditionally to save the Administrative Agent and the Lenders harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such taxes, fees or impositions.
 
10.4       Holidays.  Whenever payment of the Loan to be made or taken hereunder shall be due on a day which is not a Business Day such payment shall be due on the next Business Day and such extension of time shall be included in computing interest and fees, except that the Loan shall be due on the Business Day preceding the Maturity Date if the Maturity Date is not a Business Day.  Whenever any payment or action to be made or taken hereunder (other than payment of the Loan) shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day, and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action.
 
 
61

 

10.5       Notices.  All notices, requests, demands, directions and other communications (as used in this Section 10.5, collectively referred to as “notices”) given to or made upon any party hereto under the provisions of this Agreement shall be by telephone or in writing (including facsimile communication) unless otherwise expressly permitted hereunder and shall be delivered or sent by facsimile or via nationally-recognized overnight courier, by hand or U.S. mail to the respective parties at the addresses and numbers set forth under their respective names on Schedule 1.1(A) hereof or in accordance with any subsequent unrevoked written direction from any party to the others.  All notices shall, except as otherwise expressly herein provided, be effective (a) in the case of facsimile, when received, (b) in the case of hand-delivered notice, when hand-delivered, (c) in the case of telephone, when telephoned, provided, however, that in order to be effective, telephonic notices must be confirmed in writing no later than the next Business Day by letter or facsimile, (d) if given by mail, four (4) days after such communication is deposited in the mail with first-class postage prepaid, return receipt requested, and (e) if given by any other means (including by air courier), when delivered; provided, that notices to the Administrative Agent shall not be effective until received.  Any Lender giving any notice to any Borrower Affiliate Party shall simultaneously send a copy thereof to the Administrative Agent, and the Administrative Agent shall promptly notify the other Lenders of the receipt by it of any such notice.
 
10.6       Severability.  The provisions of this Agreement are intended to be severable.  If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.
 
10.7       Governing Law.  This Agreement shall be deemed to be a contract under the Laws of the State of New York and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the State of New York without regard to its conflict of laws principles (other than Section 5-1401 of the New York General Obligations Laws).
 
10.8       Prior Understanding.  This Agreement and the other Loan Documents supersede all prior understandings and agreements, whether written or oral, between the parties hereto and thereto relating to the transactions provided for herein and therein, including any prior confidentiality agreements and commitments.
 
10.9       Duration; Survival.  All representations and warranties of the Borrower Affiliate Parties contained herein or made in connection herewith shall survive the making of the Loan and shall not be waived by the execution and delivery of this Agreement, any investigation by the Administrative Agent or the Lenders, the making of the Loan, or payment in full of the Loan.  All covenants and agreements of the Borrower Affiliate Parties contained in Sections 7.1 [Affirmative Covenants], 7.2 [Negative Covenants] and 7.3 [Reporting Requirements] herein shall continue in full force and effect from and after the date hereof until payment in full of the Loan.  All covenants and agreements of the Borrower contained herein relating to the payment of additional compensation or expenses and indemnification, including those set forth in the Notes, Article 4 [Payments] and Sections 9.6 [Reimbursement of Administrative Agent by Lenders, Etc.] and 10.3 [Reimbursement of Lenders by the Borrower; Etc.], shall survive payment in full of the Loan.
 
 
62

 

10.10     Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Lenders, the Administrative Agent, the Borrower Affiliate Parties and their respective successors and assigns, except that the Borrower Affiliate Parties may not assign or transfer any of their rights and Obligations hereunder or any interest herein.  Each Lender may at any time make assignments (including pledges and grants of security interests) of all or any part of the respective Lender’s pro rata portion of the Loan to one or more Lenders or any Affiliate thereof.  Each Lender may make assignments (including pledges and grants of security interests) of all or any part of the respective Lender’s pro rata portion of the Loan to any Person if (i) there exists an Event of Default or (ii) such Lender obtains the consent of the Borrower.  In the case of an assignment, upon receipt by the Administrative Agent of any assignment and assumption agreement, the assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights, benefits and obligations as it would have if it had been a signatory Lender hereunder and the Commitments shall be adjusted accordingly.  In order to effect any assignment of all or any part of a Lender’s pro rata portion of the Loan, such Lender shall surrender any Note subject to such assignment, and the Borrower shall execute and deliver a new Note to the assignee in an amount equal to the amount of the respective Lender’s pro rata portion of the Loan.  In addition, the Borrower shall maintain a book entry system identifying the Commitments and the pro rata portion of the Loan of each Lender.
 
(i)           Any assignee which is not incorporated under the Laws of the United States of America or a state thereof shall deliver to the Borrower and the Administrative Agent the form of certificate described in Section 10.16 [Tax Withholding Clause] relating to federal income tax withholding.  Each Lender may furnish any publicly available information concerning any Borrower Affiliate Party and any other information concerning any Borrower Affiliate Party in the possession of such Lender from time to time to assignees (including prospective assignees), provided that such assignees agree to be bound by the provisions of Section 10.11 [Confidentiality].
 
10.11     Confidentiality.
 
10.11.1       General.  The Administrative Agent and the Lenders each agree to keep confidential all information obtained from the Borrower Affiliate Parties or its Subsidiaries which is nonpublic and confidential or proprietary in nature (including any information the Borrower specifically designates as confidential), except as provided below, and to use such information only in connection with their respective capacities under this Agreement and for the purposes contemplated hereby.  The Administrative Agent and the Lenders shall be permitted to disclose such information (i) to outside legal counsel, accountants and other professional advisors who need to know such information in connection with the administration and enforcement of this Agreement, subject to agreement of such Persons to maintain the confidentiality, (ii) to assignees and participants as contemplated by Section 10.10 [Successors and Assigns], and prospective assignees who accept confidentiality obligations in writing as well as any Persons to which any Lender pledges or grants a security interest in any portion of its rights under this Agreement, or its Notes or the other Loan Documents who accept confidentiality obligations in writing, (iii) as otherwise required by applicable Law or by any subpoena or similar legal process, or in connection with any investigation, regulatory inquiries or proceeding, (iv) if it becomes publicly available other than as a result of a breach of this Agreement or becomes available from a source not known to be subject to confidentiality restrictions or (v) if the Borrower shall have consented to such disclosure.
 
 
63

 

10.11.2       Sharing Information With Affiliates of the Lenders.  The Borrower Affiliate Parties acknowledge that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of their Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and, effective upon any such Person’s engagement for such service, each Borrower Affiliate Party hereby authorizes each Lender to share any information delivered to such Lender by the Borrower Affiliate Parties pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of Section 10.11.1 [General] as if it were a Lender hereunder.
 
10.11.3        Nonliability of Lenders.  The relationship between Borrower on the one hand and the Lenders and the Administrative Agent on the other hand shall be solely that of borrower and lender.  Neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Borrower Affiliate Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Borrower Affiliate Parties, on the one hand, and the Administrative Agent and the Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.  Neither the Administrative Agent nor any Lender undertakes any responsibility to any Borrower Affiliate Party to review or inform any Borrower Affiliate Party of any matter in connection with any phase of any Borrower Affiliate Party’s business or operations.  Borrower agrees, on behalf of itself and each other Borrower Affiliate Party, that neither the Administrative Agent nor any Lender shall have liability to any Borrower Affiliate Party (whether sounding in tort, contract or otherwise) for losses suffered by any Borrower Affiliate Party in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought.  NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED IN CONNECTION WITH THIS AGREEMENT, OTHER THAN RESULTING FROM SUCH LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR SHALL ANY LENDER HAVE ANY LIABILITY WITH RESPECT TO, AND BORROWER ON BEHALF OF ITSELF AND EACH OTHER BORROWER AFFILIATE PARTY, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE).  Borrower acknowledges that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party.  No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower Affiliate Parties and the Lenders. Notwithstanding anything herein to the contrary, the information subject to this Section 10.11 shall not include, and the Administrative Agent and each Lender may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent or such Lender relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loan and transactions contemplated hereby.

 
64

 

10.12    Counterparts.  This Agreement may be executed by different parties hereto on any number of separate counterparts, each of which, when so executed and delivered, shall be an original, and all such counterparts shall together constitute one and the same instrument.
 
10.13    Administrative Agent’s or Lender’s Consent.  Whenever the Administrative Agent’s or any Lender’s consent is required to be obtained under this Agreement or any of the other Loan Documents as a condition to any action, inaction, condition or event, the Administrative Agent and each Lender shall be authorized to give or withhold such consent in its sole and absolute discretion and to condition its consent upon the giving of additional collateral, the payment of money or any other matter.
 
10.14    Exceptions.  The representations, warranties and covenants contained herein shall be independent of each other, and no exception to any representation, warranty or covenant shall be deemed to be an exception to any other representation, warranty or covenant contained herein unless expressly provided, nor shall any such exceptions be deemed to permit any action or omission that would be in contravention of applicable Law.
 
10.15    CONSENT TO FORUM; WAIVER OF JURY TRIAL.  EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLY CONSENT TO THE NONEXCLUSIVE JURISDICTION OF THE NEW YORK SUPREME COURT SITTING IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH PERSONS AT THE ADDRESSES PROVIDED FOR IN SECTION 10.5 [NOTICES] AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.  EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.  EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
 
 
65

 

10.16    Tax Withholding Clause.  Each Lender or assignee of a Lender that is not incorporated under the Laws of the United States of America or a state thereof (and, upon the written request of the Administrative Agent, each other Lender or assignee of a Lender) agrees that it will deliver to each of the Borrower and the Administrative Agent two (2) duly completed appropriate valid Withholding Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”)) certifying its status (i.e., U.S. or foreign person) and, if appropriate, making a claim of reduced, or exemption from, U.S. withholding tax on the basis of an income tax treaty or an exemption provided by the Internal Revenue Code. Such delivery may be made by electronic transmission as described in §1.1441-1(e)(4)(iv) of the Regulations if the Administrative Agent establishes an electronic delivery system. The term “Withholding Certificate” means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required under §1.1441-1(e)(3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of the Regulations; or any other certificates under the Code or Regulations that certify or establish the status of a payee or beneficial owner as a U.S. or foreign person. Each Lender, assignee or participant required to deliver to the Borrower and the Administrative Agent a valid Withholding Certificate pursuant to the preceding sentence shall deliver such valid Withholding Certificate as follows: (A) each Lender which is a party hereto on the Closing Date shall deliver such valid Withholding Certificate at least five (5) Business Days prior to the first date on which any interest or fees are payable by the Borrower hereunder for the account of such Lender; (B) each assignee or participant shall deliver such valid Withholding Certificate at least five (5) Business Days before the effective date of such assignment or participation (unless the Administrative Agent in its sole discretion shall permit such assignee to deliver such Withholding Certificate less than five (5) Business Days before such date in which case it shall be due on the date specified by the Administrative Agent). Each Lender of assignee which so delivers a valid Withholding Certificate further undertakes to deliver to each of the Borrower and the Administrative Agent two (2) additional copies of such Withholding Certificate (or a successor form) on or before the date that such Withholding Certificate expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent Withholding Certificate so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Administrative Agent. Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of, or exemption from, United States withholding tax, the Borrower or the Administrative Agent shall be entitled to withhold United States federal income taxes at the full 30% withholding rate with respect to any payments under the Loan Documents if in its reasonable judgment it is required to do so under the due diligence requirements imposed upon a withholding agent under §1.1441-7(b) of the Regulations. Further, the Administrative Agent shall be indemnified under §1.1461-1(e) of the Regulations against any claims and demands of any Lender or assignee or participant of a Lender for the amount of any tax it deducts and withholds in accordance with regulations under §1441 of the Internal Revenue Code. EACH LENDER AGREES TO INDEMNIFY THE ADMINISTRATIVE AGENT AND HOLD THE ADMINISTRATIVE AGENT HARMLESS FOR THE FULL AMOUNT OF ANY AND ALL PRESENT OR FUTURE TAXES AND RELATED LIABILITIES (INCLUDING PENALTIES, INTEREST, ADDITIONS TO TAX AND EXPENSES, AND ANY TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE TO THE ADMINISTRATIVE AGENT UNDER THIS SECTION 10.16 WHICH ARE IMPOSED ON OR WITH RESPECT TO PRINCIPAL, INTEREST OR FEES PAYABLE TO SUCH LENDER HEREUNDER AND WHICH ARE NOT PAID BY THE BORROWER WHETHER OR NOT SUCH TAXES OR RELATED LIABILITIES WERE CORRECTLY OR LEGALLY ASSERTED.  THIS INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS FROM THE DATE THE ADMINISTRATIVE AGENT MAKES WRITTEN DEMAND THEREFOR.
 
 
66

 

10.17    [Reserved]
 
10.18    Limitation of Recourse.  There shall be full recourse to the Borrower and to BFE Energy and to all of such Borrower Affiliate Party’s assets for the liabilities of the Borrower under this Agreement and the other Loan Documents and other Obligations of any Borrower, but in no event shall any officer, director or holder of any equity interest in the Borrower be personally liable or obligated for such liabilities and Obligations of the Borrower.  Nothing contained herein shall affect or diminish any rights of any Person against any other Person for such other Person’s fraud, willful misrepresentation, gross negligence or willful misconduct.
 
10.19    No Reliance on Administrative Agent’s Customer Identification Program.  Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, or assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any of the Borrower Affiliate Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other Anti-Terrorism Laws.
 
[signature pages follow]

 
67

 

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written.
 
as Borrower
 
By:
/s/ Scott Pearce
Name: Scott H. Pearce
Title: President & CEO
 
GREENLIGHT APE, LLC
as Administrative Agent
 
By:
Greenlight Capital, Inc., its Manager
   
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
   
GREENLIGHT CAPITAL OFFSHORE PARTNERS, as a Lender
   
By:
Greenlight Capital, Inc., its  investment manager
   
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
   
GREENLIGHT CAPITAL, LP, as a Lender
   
By:
Greenlight Capital, LLC, its general partner
     
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
 
Loan Agreement Signature Page

 
 

 
 
GREENLIGHT CAPITAL QUALIFIED, L.P., as a Lender
 
By:
Greenlight Capital, LLC, its general partner
   
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT REINSURANCE, LTD.
as a Lender
 
By:
DME Advisors, L.P., its investment manager
   
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT CAPITAL (GOLD), LP, as a Lender
 
By:
DME Management GP, LLC, its general partner
     
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
   
GREENLIGHT CAPITAL OFFSHORE MASTER (GOLD), LTD., as a Lender
 
By:
DME Capital Management, LP, its investment manager
   
 
By:
/s/ Daniel Roitman
   
Daniel Roitman
   
Chief Operating Officer
 
Loan Agreement Signature Page

 
 

 
 
THIRD POINT LOAN LLC, as a Lender
 
By:
/s/ James P. Gallagher
 
James P. Gallagher
 
Chief Administrative Officer

Loan Agreement Signature Page

 
 

 
 
Schedule 1.1(A)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
Part 1 – Commitments of Lenders and Addresses for Notices to Lenders

Lender
 
Amount of Commitment
for Term Loan ($)
   
Ratable Share
 
             
*Greenlight Capital Offshore Partners
c/o Greenlight Capital, Inc.
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    5,709,080       29.40 %
*Greenlight Capital, LP
c/o Greenlight Capital, Inc.
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    1,010,000       5.20 %
*Greenlight Capital Qualified, L.P.
c/o Greenlight Capital, Inc.
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    3,858,000       19.87  
*Greenlight Reinsurance, LTD.
c/o DME Advisors, LP
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    1,580,000       8.14 %
*Greenlight Capital (Gold), LP
c/o DME Capital Management, LP
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    531,000       2.73 %
*Greenlight Capital Offshore
Master (Gold), LTD.
c/o DME Capital Management, LP
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer
    259,000       1.33 %
**Third Point Loan LLC
c/o Third Point Advisors, L.L.C.
390 Park Avenue, 18th Floor
New York, New York 10002
    6,473,540.00       33.33 %
 
 

 

*With copies to (which shall not constitute notice):

Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
New York, New York 10036
Phone: (212) 872-1095
Fax: (212) 872-1002
Attn: Kerry E. Berchem, Esq.

** With copies to (which shall not constitute notice):

Wilkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Phone: (212) 728-8267
Fax: (212) 728-9267
Attn: Michael A. Schwartz, Esq.

 

 

Part 2 – Addresses for Notices to the Administrative Agent and the Borrower

ADMINISTRATIVE AGENT:
Greenlight APE, LLC
c/o Greenlight Capital, Inc.
140 East 45th Street, 24th Floor
New York, New York 10017
Attn: Chief Operating Officer

BORROWER:
1625 Broadway, Suite 2400
Denver, CO 80202
Attn: President

With copies to (which shall not constitute notice):

Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Attn: Craig F. Arcella
 

 
Schedule 1.1(B)

Affiliates of Borrower

BFE Holdings, LLC
BFE Operating Company, LLC
Buffalo Lake Energy, LLC
Pioneer Trail Energy, LLC

 
 

 

Schedule 5.5.1

Qualifications to do Business

1.
Biofuel Energy Corp. is duly licensed or qualified and in good standing in each of the following jurisdictions:

State
Delaware

2.
BioFuel Energy, LLC is duly licensed or qualified and in good standing in each of the following jurisdictions:

State
Delaware
Minnesota
Nebraska
Colorado

 
 

 

Schedule 5.1.2

Capitalization

Authorized Interests in BioFuel Energy Corp.
Issued to: Not Applicable (public company)

Authorized Interests in BioFuel Energy, LLC
Issued to:
 

 
 
 

 
 
Schedule 5.1.14

Real Property

BUFFALO LAKE ENERGY, LLC OWNED PROPERTY

Tract A:

Parcel 1:

A tract of land in the Northeast Quarter and the Southeast Quarter of Section 1, Township 102 North, Range 31 West, Martin County, Minnesota described as follows:

Beginning at the East Quarter Corner of Section 1, Township 102 North, Range 31 West, Martin County, Minnesota; thence North 00 degrees 36 minutes 44 sections East, (County Coordinate System) along the East line of the Northeast Quarter of Section 1, a distance of 134.67 feet; thence South 89 degrees 56 minutes 44 seconds West, a distance of 950.58 feet; thence South 88 degrees 53 minutes 16 seconds East, a distance of 950.55 feet to the East line of the Northeast Quarter of Section 1; thence North 00 degrees 36 minutes 44 seconds East, along said east line, a distance of 1827.63 feet to the Northeast Corner of Section 1; thence North 89 degrees 21 minutes 24 seconds West, along the North line of the Northeast Quarter of the Northeast Quarter of Section 1, a distance of 1315.08 feet to the Northwest Corner of the Northeast Quarter of Section 1; thence South 00 degrees 45 minutes 22 seconds West, along the West line of the Northeast Quarter of the Northeast Quarter of Section 1, a distance of 1295.19 feet to the Southwest Corner of the Northeast Quarter of the Northeast Quarter; thence North 88 degrees 28 minutes 02 seconds West, along the South line of the Northwest Quarter of the Northeast Quarter of the Northeast Quarter of Section 1, a distance of 1318.45 feet to the North-South Quarter line of Section 1; thence South 00 degrees 54 minutes 09 seconds West, along the North-South Quarter line of Section 1, a distance of 2139.68 feet to the north line of a tract of land deeded to Cargill, Incorporated and recorded and described in the Office of the County Recorded in Document No. 321994 (Parcel 1); thence South 89 degrees 03 minutes 49 seconds East, along the north line of said Cargill, Incorporated tract and the north line of a tract of land deed to Cargill, Incorporated and recorded and described in the Office of the County Recorder in Document No. 347139, a distance of 1262.00 feet to the east line of said Cargill, Incorporated tract described in Document No. 347139; thence South 00 degrees 56 minutes 11 seconds West, along said east line, a distance of 375.74 feet to the north line of said Cargill, Incorporated tract described in Document No. 312994 (Parcel 1); thence South 83 degrees 44 minutes 53 seconds East, along said north line, a distance of 469.51 feet to the west line of Borden’s Addition according to the recorded plat on file and of record in the Office of the County Recorder; thence North 00 degrees 56 minutes 11 seconds East, along said west line, a distance of 419.23 feet to the north line, a distance of 513.49 feet to the southwest corner of a tract of land deed to J. I. Case Company and recorded and described in the Office of the County Recorder in Document No. 263926; thence North 00 degrees 56 minutes 11 seconds East, along the west line of said J. I Case Company tract, a distance of 779.12 feet to the northwest corner of said J. I. Case Company tract; thence South 89 degrees 03 minutes 49 seconds East, along the north line of said J. I. Case Company tract, a distance of 400.00 feet to the East line of the Southeast Quarter of Section 1; thence North 00 degrees 56 minutes 11 seconds East, along the East line of the Southeast Quarter of Section 1, a distance of 17.48 feet to the point of beginning.

 
 

 

Parcel 2:

Non-exclusive easement for ingress and egress as contained in Access Easement Agreement by and between Kayton & Rabe L.L.P., a Minnesota limited liability partnership, as Grantor, and Buffalo Lake Energy, LLC, a Delaware limited liability company, as Grantee, dated August 16, 2006, recorded August 25, 2006, as Document No. 2006R-385463.

Tract B:

The Northwest Quarter (NW1/4) of the Northeast Quarter (NE1/4) of Section One (1), Township One Hundred and Two (102) North, Range Thirty-One (31) West of the Fifth Principal Meridian, Martin County, Minnesota,

EXCEPTING THEREFROM:

A tract of land in the Northwest Quarter of the Northeast Quarter of Section 1, Township 102 North, Range 31 West of the Fifth Principal Meridian in Martin County, Minnesota, more particularly described as follows:

Beginning at the North Quarter corner of said Section 1l; thence South 00 degrees 14 minutes 37 seconds West along the North-South Quarter line a distance of 376.99 feet; thence North 90 degrees 00 minutes 00 seconds East parallel with the North line of said Section 1 a distance of 321.95 feet; thence North 02 degrees 00 minutes 00 seconds West a distance of 377.22 feet to the North line of said Section 1; thence South 90 degrees 00 minutes 00 seconds West along said North line a distance of 307.18 feet to the point of beginning.

Tract C:

A tract of land in the Northeast Quarter of the Southwest Quarter of Section 1, Township 102 North, Range 31 West, Martin County, Minnesota described as follows:

Commencing at the North Quarter Corner of Section 1, Township 102 North, Range 31 West, Martin County, Minnesota; thence South 00 degrees 10 minutes 59 seconds West, (assumed bearing) along the East line of the Northwest Quarter and the East line of the Southwest Quarter of Section 1, a distance of 2811.56 feet to the point of beginning; thence continuing South 00 degrees 10 minutes 59 seconds West, along the East line of the Southwest Quarter of Section 1, a distance of 402.85 feet to the North line of a tract of land deeded to the City of Fairmont and recorded and described in the Office of Martin County Recorder in Document No. 357223; thence North 89 degrees 49 minutes 01 seconds West, along said North line, a distance of 200.00 feet to the West line of said City Tract; thence South 00 degrees 10 minutes 59 seconds West, along said West line a distance of 266.00 feet to the South line of said City Tract; thence South 89 degrees 49 minutes 01 seconds East, along said South line, a distance of 200.00 feet to the East line of the Southwest Quarter of Section 1; thence South 00 degrees 10 minutes 59 seconds West, along the East line of Section 1 a distance of 276.20 feet to the North line of a tract of land deeded to Cargill, Incorporated and recorded and described in the Office of the Martin County Recorder in Document No. 321994 (Parcel 2); thence North 84 degrees 28 minutes 04 seconds West, along said North line, a distance of 1075.94 feet; thence North 51 degrees 55 minutes 31 seconds East, a distance of 1364.25 feet to the point of beginning.

 
 

 

Tract D:

The West 100.00 feet of the North 100.00 feet of Lot 1, Block One of Borden’s Addition in the City of Fairmont, Martin County, Minnesota, according to the plat thereof on file and of record in the office of the County Recorder. Together with a 20.00 foot wide Access Easement set forth in Warranty Deed filed November 7, 2005 as Document No. 2005R-381039, over and across a strip of land in Lot 1 in Block One of Borden’s Addition in the City of Fairmont, Martin County, Minnesota, bounded as follows: On the West by the West line of said Borden’s Addition, on the East by a line lying parallel with and distant 20.00 feet East (measured at right angles) of the West line of said Borden’s Addition, on the North by the South line of the North 100.00 feet of Lot 1, Block One of said Borden’s Addition, on the South by the North line of a Public Road Easement as recorded and described in the office of the County Recorder in Document No. 269586.

PIONEER TRAIL ENERGY, LLC OWNED PROPERTY

TRACT 1:

Lot 1, Carter Acres Subdivision, Hall County, Nebraska.

TRACT 2:

A tract of land located in the North Half (N1/2) of Section 25, Township 10 North, Range 12 West of the 6th P.M., Hall County, Nebraska, more particularly described as follows:

Commencing at the Northeast Corner said Section 25 thence N89°59’34”W (assumed bearing) along the North line of the Northeast Quarter (NE1/4) said Section 25 a distance of 398.07 feet to the Place of Beginning; thence continuing N89°59’34”W along said North line a distance of 1564.37 feet to the South Right of Way line of the Union Pacific Railroad; thence S68°51’01”W along said South line a distance of 3589.51 feet to the West line of said Section 25; thence S00°24’33”E a distance of 2016.68 feet to the West line of the North Half of the Northeast Quarter (N1/2NE1/4) said Section 25l; thence S89°59’58”E a distance of 2652.91 feet to the East line of said North Half of the Northeast Quarter (N1/2NE1/4); thence N00°13’56”E along the East line said Section 25 a distance of 1075.61 feet to the South line of Carter Acres Subdivision as recorded in the Hall County Register of Deeds Office as Document Number 92-107346; thence N89°57’46”W along said South line a distance of 393.07 feet to the West line of said Carter Acres Subdivision; thence N00°57’27”W along said West line a distance of 240.83 feet to the Place of Beginning.

 
 

 

BUFFALO LAKE ENERGY, LLC LEASED PROPERTY

1005 N. Bixby Road
Fairmont, Minnesota 56031
Lessor: Cargill, Incorporated
Lessee: Buffalo Lake Energy, LLC

Tract E:

Parcel 1:

A tract of land in the Southeast Quarter of Section 1, Township 102 North, Range 31, West of the Fifth Principal Meridian in Martin County, Minnesota, described as follows: Beginning at the Southwest corner of Block 1 of Borden’s Addition to the City of Fairmont, Minnesota, according to the recorded plat thereof on file and of record in the Office of the Register of Deeds, Martin County, Minnesota; thence North 84 degrees 40 minutes 24 seconds West along the northerly right-of-way line on the Chicago and Northwestern Railway Company, a distance of 1,738.85 feet to the west line of the Southeast Quarter of Section 1 at a point 130.33 feet North of the Southwest corner of the Northwest Quarter of the Southeast Quarter of Section 1; thence North 00 degrees 06 minutes 36 seconds West along the West line of the Southeast Quarter of Section 1 a distance of 358.37 feet to a point on the Westerly projection of the North line of Block 1 of Borden’s Addition; thence North 90 degrees 00 minuets 00 seconds East along the Westerly projection of the North line of Block 1 of Borden’s Addition a distance of 633.00 feet; thence South 00 degrees 00 minutes 00 seconds West a distance of 316.92 feet; thence South 84 degrees 40 minutes 24 seconds East parallel with the Northerly Railroad right-of-way line a distance of 1,103.85 feet to the West line of Block 1 of Borden’s Addition; thence South 00 degrees 00 minutes 00 seconds West along the West line of Block 1 of Borden’s addition a distance of 100.43 feet to the point of beginning, according to the United States Government Survey thereof.

Parcel 2:

A tract of land consisting of one acre, more or less, located in the Southwest Quarter of Section 1, Township 102 North, Range 31, West of the Fifth Principal Meridian, more particularly described as follows, to wit:  Commencing at a point on the East line of said Southwest Quarter of said Section 1, aforesaid, and 16.57 feet North of the North right-of-way line of the Chicago Northwestern Railway Company as the point of commencement of the tract to be conveyed herein:  Running thence northwesterly parallel with said Chicago Northwestern Railway Company right-of-way for a distance of 2656 feet, more or less, to the West line of said Southwest Quarter of said section 1, aforesaid, and being 16.57 feet North of the North right-of-way line of said Chicago Northwestern Railway Company; running thence South 16.57 feet, along the West line of said Southwest Quarter of Section 1, aforesaid, to the North right-of-way line of said Chicago Northwestern Railway Company; running thence Southeasterly along the North right-of-way line of said Chicago Northwestern Railway Company to the East line of said Southwest Quarter of said Section 1, aforesaid; running thence North along the East line of said Southwest Quarter of said Section 1, aforesaid, to the place of commencement of the tract of land described herein, containing one acre of land, more or less, according to the United States Government Survey thereof.

 
 

 

Parcel 3:

A tract of land lying in portions of Lots 1, 2 and 4 in Block 1 of Borden’s Addition to the City of Fairmont, Minnesota, described as follows:  Beginning at the Southeast corner of Block 1 of Borden’s Addition; thence Westerly along the Southerly line of Block 1 of Borden’s Addition a distance of 867.20 feet to the Southwest corner of Block 1; thence North along the West line of Block 1 a distance of 100.43 feet; thence Easterly parallel with the Southerly line of Block 1 a distance of 867.20 feet to the East line of Block 1; thence South along the East line of Block 1 a distance of 100.43 feet to the point of beginning, according to the recorded plat thereof on file or of record in the Office of the Register of Deeds in and for Martin County, Minnesota.

Parcel 4:

A tract of land in the Southeast Quarter of Section 1, Township 102 North, Range 31 West in Martin County, Minnesota, described as follows:  Commencing at the northwest corner of Block 1 of Borden’s Addition to the City of Fairmont, Minnesota according to the plat thereof on file and of record in the office of the Martin County Recorder; thence South 90 degrees 00 minutes 00 seconds West (assumed bearing) along the westerly extension of the north line of Borden’s Addition a distance of 467.49 feet to the point of beginning; thence continuing South 90 degrees 00 minutes 00 seconds West along the westerly extension of the north line of Borden’s Addition a distance of 629.04 feet to the east line of a tract of land deeded to Truman Farmers Elevator Co. and recorded and described in the office of the Martin County Recorder in Book 308 of Deeds, page 86; thence South 0 degrees 00 minutes 00 seconds West along the east line of said Truman Farmers Elevator Co. tract a distance of 316.92 feet; thence South 84 degrees 40 minutes 24 seconds East along the north line of said Truman Farmers Elevator Co. tract a distance of 631.77 feet; thence North 0 degrees 00 minutes 00 seconds East a distance of 375.57 feet to the point of beginning.

PIONEER TRAIL ENERGY, LLC LEASED PROPERTY

7878 S. 140th Road
Wood River, Nebraska 68883
Lessor: Cargill, Incorporated
Lessee: Pioneer Trail Energy, LLC

TRACT 3:

Real property in the City of Wood River, County of Hall, State of Nebraska, described as follows:

 
 

 

A triangular tract of land in the southeast corner of the Southeast Quarter of Section 24, in Township 10 North, Range 12 West of the 6th P.M., Hall County, Nebraska, bring all of the Southeast Quarter lying South of the Union Pacific Railroad Company right of way. Said tract more particularly described as follows:  Referring to the southeast corner of said Section 24, this bring the point of beginning; thence West on the section line a distance of 1684.5 feet to a point on the southerly right of way line of the railroad; thence in a Northeasterly direction on this right of way line a distance of 1806.4 feet to a point on the east section line of said Section 24; thence South on said section line a distance of 651.4 feet to the point of beginning.

LESS AND EXCEPT That part of the South One-half of the Southeast Quarter of Section 24, in Township 10 North, Range West of the 6th P.M., Hall County, Nebraska, more particularly described as follows:  Commencing at a point on the East line of the Southeast Quarter, said point being 526.13 feet North of the Southeast corner of said Section 24; thence 133.0 feet West perpendicular to the East line of the Southeast corner of said Section 24 to a point; thence 75.0 feet North parallel to the East line of the Southeast Quarter of said Section 24 to a point on the southerly right of way line of the Union Pacific Railroad Company; thence 142.62 feet Northeasterly along the Southerly right of way of said railroad, to a point on the East line of the Southeast Quarter of said Section 24; thence 126.49 feet South along the East line of the Southeast Quarter of said Section 24, to the point of beginning.

LESS AND EXCEPT that part of conveyed to the County of Hall, State of Nebraska by Warranty Deed recorded in Book 79, Page 573 in the office of the Register of Deeds in Hall County, Nebraska;

Subject to the Union Pacific Railroad right of way and subject to the county roads.

 
 

 

Schedule 5.1.15

LLC Agreements

Second Amended and Restated Limited Liability Company Agreement of BioFuel Energy, LLC, dated June 19, 2007, executed by BioFuel Energy, LLC and BioFuel Energy Corp.
 
 
 

 

Schedule 5.1.18

Material Contracts

Description of Contract
 
Date Executed
Second Amended and Restated Limited Liability Company Agreement of BioFuel Energy, LLC
 
June 19, 2007
     
Credit Agreement among BFE Operating Company, LLC, Buffalo Lake Energy, LLC and Pioneer Trail Energy, LLC, as borrowers, BFE Operating Company, LLC, as borrowers’ agent, various financial institutions from time to time, as lenders, Deutsche Bank Trust Company Americas, as collateral agent, and BNP Paribas, as administrative agent and arranger
 
September 25, 2006
     
Waiver and Amendment to the Credit Agreement dated September 25, 2006 and Collateral Account Agreement dated September 25, 2006
 
September 29, 2009
     
Collateral Account Agreement among BFE Operating Company, LLC, Buffalo Lake Energy, LLC, Pioneer Trail Energy, LLC, as borrowers, BFE Operating Company, LLC, as borrowers’ agent, Deutsche Bank Trust Company Americas, as collateral agent and Deutsche Bank Trust Company Americas, as depositary agent and securities intermediary
 
September 25, 2006
     
Registration Rights Agreement between BioFuel Energy Corp. and the parties listed on the signature page thereto
 
June 19, 2007
     
Ethanol Marketing Agreement between Cargill, Incorporated and Buffalo Lake Energy, LLC
 
September 25, 2006
     
Ethanol Marketing Agreement between Cargill, Incorporated and Pioneer Trail Energy, LLC
 
September 25, 2006
     
Distillers Grains Marketing Agreement between Cargill, Incorporated and Buffalo Lake Energy, LLC
 
September 25, 2006
     
Distillers Grains Marketing Agreement between Cargill, Incorporated and Pioneer Trail Energy, LLC
 
September 25, 2006
     
Corn Supply Agreement between Cargill, Incorporated and Buffalo Lake Energy, LLC
 
September 25, 2006
 

  
Corn Supply Agreement between Cargill, Incorporated and Pioneer Trail Energy, LLC
 
September 25, 2006
     
Executive Employment Agreement between BioFuel Energy, LLC and Scott H. Pearce
 
August 31, 2010
     
Executive Employment Agreement between BioFuel Energy, LLC and Kelly G. Maguire
 
August 31, 2010
     
Master Agreement between Cargill, Incorporated and Buffalo Lake Energy, LLC
 
September 25, 2006
     
Master Agreement between Cargill, Incorporated and Pioneer Trail Energy, LLC
 
September 25, 2006
     
Grain Facility Lease between Cargill, Incorporated and Buffalo Lake Energy, LLC
 
September 25, 2006
     
Grain Facility Lease and Sublease between Cargill, Incorporated and Pioneer Trail Energy, LLC
 
September 25, 2006
     
Loan Agreement between BioFuel Energy, LLC, the lenders party thereto and Greenlight APE, LLC, as administrative agent
 
September 25, 2006
     
BioFuel Energy, LLC Change of Control Plan
   
     
BioFuel Energy Corp. 2007 Equity Incentive Compensation Plan
   
     
BioFuel Energy, LLC 401(k) Profit Sharing Plan Adoption Agreement
   
     
Addendum to BioFuel Energy, LLC 401(k) Profit Sharing Plan Adoption Agreement
   
     
Tax Benefit Sharing Agreement between BioFuel Energy Corp. and the parties listed on the signature page thereto
 
June 19, 2007
     
License Agreement between Delta-T Corporation and Buffalo Lake Energy, LLC
 
June 9, 2006
     
License Agreement between Delta-T Corporation and Pioneer Trail Energy, LLC
 
April 28, 2006
     
Stockholders Agreement between BioFuel Energy Corp. and Cargill Biofuel Investments, LLC
 
June 19, 2007
     
Agreement and Omnibus Amendment among Buffalo Lake Energy, LLC, Cargill, Incorporated and Cargill Commodity Services, Inc.
 
July 30, 2009
     
Agreement and Omnibus Amendment among Pioneer Trail Energy, LLC, Cargill, Incorporated and Cargill Commodity Services, Inc.
  
July 30, 2009
 
 
 

 

Schedule 5.1.20

Environmental Disclosures

None.
 

 
Schedule 7.2.8

Transactions with Affiliates

Description of Transaction Documents
 
Date Executed
Registration Rights Agreement by and among BioFuel Energy, LLC, Greenlight Capital, L.P., Greenlight Capital Qualified, L.P., Greenlight BFE Holdings, Inc., Third Point Partners LP, Third Point Partners Qualified LP, Daniel S. Loeb, Lawrence J. Bernstein, Todd Q. Swanson, Thomas J. Edelman, Barrie M. Damson, WCIOSAQ Corp., Lance T. Shaner, Elliot Jaffee, SFI L.P. and Nancy and John Snyder Foundation
 
May 1, 2006
     
Unit Purchase Agreement by and among BioFuel Energy, LLC, Greenlight Capital L.P., Greenlight Capital Qualified L.P., Greenlight BFE Holdings, Inc., Third Point Partners LP, Third Point Partners Qualified LP, Thomas J. Edelman, Barrie M. Damson, WCIOSAQ Corp., Lance T. Shaner, Elliot Jaffee, SFI L.P. and Nancy and John Snyder Foundation
 
May 1, 2006
     
Interest Purchase and Option Agreement by and among Ethanol Business Group, LLC, BioFuel Solutions, LLC, Scott H. Pearce, Daniel J. Simon, Thomas J. Edelman and BioFuel Energy, LLC
  
April 21, 2006

 
 

 

EXHIBIT 1.1(A)
 
Rights Offering Letter Agreement 

 
 

 

EXECUTION VERSION

Greenlight Capital, LP
Greenlight Capital Qualified, LP
Greenlight Capital (Gold), LP
Greenlight Capital Offshore Partners
Greenlight Capital Offshore Master (Gold), Ltd.
Greenlight Reinsurance, Ltd.
 
September 24, 2010
 
BioFuel Energy Corp.
 
Re:         Rights Offering
 
Ladies and Gentlemen,
 
This Backstop Rights Offering Agreement (this “Letter Agreement”) is entered into pursuant to and in connection with that certain Loan Agreement, dated as of even date herewith (the “Loan Agreement”), by and among BioFuel Energy Corp. (“BFE Corp.”), Greenlight Capital Offshore Partners, Greenlight Capital, L.P., Greenlight Capital Qualified, L.P., Greenlight Reinsurance, Ltd. (collectively, “Greenlight”), the other lenders identified as lenders on Schedule 1.1(A) thereto (together with Greenlight, the “Lenders”), and Greenlight APE, LLC, in its capacity as administrative agent for the Lenders.  Under the Loan Agreement, the Lenders have agreed to make a term loan to BFE Corp. in the aggregate principal amount of $19,420,620 (the “Bridge Loan”).
 
This Letter Agreement sets forth the parties’ respective obligations with respect to a registered rights offering described herein (the “Rights Offering”) of rights to purchase shares of Series A Convertible Preferred Stock of BFE Corp. (“Series A Convertible Preferred Stock”).  The characteristics of the Series A Convertible Preferred Stock are more fully described on Exhibit A to this Letter Agreement.  Subject to the terms and conditions of this Letter Agreement, the parties hereto intend that the Rights Offering shall provide for anticipated gross proceeds sufficient to fully pay off, at a minimum, all principal and accrued but unpaid interest of the Bridge Loan and the Mezzanine Loan Agreement (as defined in the Loan Agreement) and the Cargill Payment (as defined below).
 
It is understood and agreed that, in lieu of issuing fractional shares of Series A Convertible Preferred Stock upon exercise of the Rights as described herein, BFE Corp. may elect to issue depositary shares, each representing a fractional interest in a share of Series A Convertible Preferred Stock, so long as the economic, conversion and other features of the fractional shares of Series A Convertible Preferred Stock are effectively replicated through the issuance of such depositary shares.
 
In consideration of the premises and respective covenants and agreements set forth in this Letter Agreement and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties agrees as follows: 

 
 

 

1.           Registration Statement.  BFE Corp. hereby agrees to use its commercially reasonable best efforts to commence and complete the Rights Offering, subject to the terms and conditions set forth herein.  Specifically, BFE Corp. hereby commits to use its commercially reasonable best efforts to (i) file a Registration Statement on Form S-3 for the Rights Offering (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) on or before October 18, 2010; and (ii) cause the Registration Statement to be declared effective on or before January 24, 2011 and to remain effective throughout the entire offering period without interruption.  The offering period for the Rights Offering shall be equal to five (5) weeks.  Notwithstanding the foregoing, a failure to cause the Registration Statement to be declared effective on or before January 24, 2011 despite the use of commercially reasonable best efforts to do so by BFE Corp. shall not be deemed a violation or failure to comply with this Letter Agreement for purposes of Paragraph 8 hereof nor an Event of Default under the Loan Agreement; provided, however that if BFE Corp. has not used such commercially reasonable best efforts then there shall be deemed to be a failure to have complied with the conditions in Paragraph 8 hereof.
 
2.           Terms of Rights Offering.  In connection with the Rights Offering, BFE Corp. shall distribute at no charge to each of the existing holders (collectively, the “Eligible Common Stockholders”) of Common Stock, par value $0.01 per share, of BFE Corp. (“Common Stock”) and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Common Stock, the “BFE Common Stock”) rights (the “Rights”) to purchase up to an aggregate of 4,000,000 shares of Series A Convertible Preferred Stock, at a per share offering price equal to $10.00 per share (the “Per Preferred Share Purchase Price”).  Each share of Series A Convertible Preferred Stock shall be convertible upon the terms described in Exhibit A to this Letter Agreement into that number of shares of Common Stock equal to the quotient obtained by dividing the Per Preferred Share Purchase Price by the Rights Price (as defined below) (the “Conversion Ratio”).  All Eligible Common Stockholders shall be eligible to participate in the Rights Offering pro rata based on each Eligible Common Stockholder’s ownership of Common Stock at the time of the Rights Offering, and each Eligible Common Stockholder that exercises all of its Rights may oversubscribe for up to all of its pro rata share of unsubscribed Rights.  For purposes of this Letter Agreement, “pro rata” shall mean (x) the aggregate number of shares of BFE Common Stock held by each Eligible Common Stockholder divided by (y) the aggregate number of shares of BFE Common Stock outstanding.
 
Each Right shall entitle the holder thereof to acquire, at a price equal to the Rights Price, a number of shares of Series A Convertible Preferred Stock equal to the fraction determined by dividing 4,000,000 by the number of Rights offered in the Rights Offering. The number of Rights offered in the Rights Offering shall be determined by dividing the offering size of the Rights Offering by the Rights Price. The offering size of the Rights Offering will be the amount equal to the amount sufficient to pay off all amounts owed at the time, including accrued and unpaid interest, under the Bridge Loan and the Mezzanine Loan Agreement and to make the Cargill Payment (as defined below), including certain fees and expenses incurred in connection with the Rights Offering. Rights Price” shall mean the lesser of (A) a dollar amount equal to 25% of the average per share closing price of the Common Stock for the five (5) trading days immediately following the initial filing of the Registration Statement and (B) $0.75.
 
3.           Use of Offering Proceeds.  The Offering Proceeds shall be used to (i) first, pay off the Bridge Loan; (ii) second, pay off all indebtedness under the Mezzanine Loan Agreement; (iii) third, make the Cargill Payment; and (iv) the remainder, if any, for general corporate purposes.

 
3

 

4.           Basic Commitment.  Subject to the terms, conditions and limitations described herein, each of the parties listed on Exhibit B hereto (collectively, the “Backstop Parties”) hereby agrees to participate in the Rights Offering for its full pro rata share of Series A Convertible Preferred Stock (the “Basic Commitment”).
 
5.           Backstop Commitment.  Subject to the terms, conditions and limitations described herein, to provide assurance that the Rights Offering will be fully subscribed, the Backstop Parties severally and not jointly commit to purchase, in the respective percentages set forth on Exhibit B hereto (the “Commitment Percentages”), all of the additional shares of Series A Convertible Preferred Stock not sold to other Eligible Common Stockholders in the Rights Offering (the “Backstop Commitment”).
 
6.           Backstop Reduction.  Notwithstanding the foregoing, (i) the Backstop Parties shall reduce the number of shares of Series A Convertible Preferred Stock that the Backstop Parties would otherwise be obligated to purchase pursuant to the Backstop Commitment and/or the Basic Commitment, or (ii) BFE Corp. shall reduce the aggregate number of shares of Series A Convertible Preferred Stock that are offered in the Rights Offering, in the event the Backstop Parties determine, in its sole discretion, but after consultation with BFE Corp., that consummation of the Rights Offering, the Basic Commitment and/or the Backstop Commitment would result in adverse tax, legal or regulatory consequences to BFE Corp. and/or any Backstop Party (“Adverse Consequences”) to the extent (and only to the extent) it deems necessary in its sole discretion, but after consultation with BFE Corp., to avoid Adverse Consequences (a “Backstop Reduction”).  The reduction in the amount of shares of Series A Convertible Preferred Stock that the Backstop Parties are obligated to purchase in the event of a Backstop Reduction, would be referred to as the “Shortfall Amount”.  In the event of a Backstop Reduction, the Rights Offering shall nonetheless proceed and the parties shall use their respective commercially reasonable best efforts to structure and consummate an alternative transaction to take the place of the issuance of the Shortfall Amount that, combined with the Rights Offering, would (i) permit BFE Corp. to (A) pay off the Bridge Loan; (B) pay off all indebtedness under the Mezzanine Loan Agreement; and (C) make the Cargill Cash Payment (an “Alternative Financing Transaction”) and (ii) be structured so as to preserve the economic benefits to the parties as if the Rights Offering had been consummated in full in accordance with the terms set forth herein without otherwise giving effect to a Backstop Reduction provided that each Backstop Party shall not be obligated to fund an amount in excess of the amount represented by its Backstop Commitment.
 
7.           Consideration.  In consideration of the Backstop Commitment, BFE Corp. shall, on the date hereof, pay to the Backstop Parties their pro rata portion of an aggregate amount in cash equal to 4% of the total purchase price for the Series A Convertible Preferred Stock offered in the Rights Offering to Eligible Common Stockholders other than the Backstop Parties in the Rights Offering (the “Option Premium”), assuming for this purpose that the total purchase price for the Series A Convertible Preferred Stock offered in the Rights Offering would be $40,000,000.  To the extent that the total purchase price for the Series A Convertible Preferred Stock offered in the Rights Offering is more than $40,000,000, BFE Corp. shall make an additional payment to the Backstop Parties in an amount equal to 4% of such excess amount (excluding for calculative purposes, any shares of Series A Convertible Preferred Stock purchased by the Lenders). Subject to the provisions below, the Option Premium shall be deemed fully earned upon execution of this Letter Agreement, regardless of whether the Rights Offering is consummated or whether the Rights Offering is fully subscribed.  BFE Corp. agrees that the Option Premium shall be nonrefundable and that the Option Premium and any other payments hereunder shall be paid without setoff or recoupment and shall not be subject to defense or offset on account of any claim, defense or counterclaim.  The Option Premium and all other amounts payable hereunder shall be paid in immediately available funds on the date hereof.

 
4

 

8.           Conditions.  The Backstop Parties’ obligations to purchase any securities pursuant to the Basic Commitment and/or the Backstop Commitment are subject to the following conditions: (i) the execution and delivery of mutually satisfactory definitive documentation among BFE Corp. and the Backstop Parties which incorporates the terms set forth herein (the “Definitive Agreements”); (ii) the satisfaction or waiver by the Backstop Parties of the conditions to the Backstop Parties’ obligations to consummate the transactions contemplated by the Definitive Agreements as may be agreed upon in the Definitive Documents; (iii) BFE Corp. shall be in compliance with its obligations under the Loan Agreement and all other transaction documents relating to the Bridge Loan in all material respects; (iv) there has not occurred any material adverse change, or any development involving a prospective material adverse change, since the date hereof in the condition, financial or otherwise, or in the earnings, business, operations or properties of BFE Corp. and its subsidiaries, taken as a whole (a “Material Adverse Change”); (v) there not having occurred after the date hereof at any time prior to the funding of the Basic Commitment and/or the Backstop Commitment any material disruption or material adverse change in the financial, banking or capital markets that, in the commercially reasonable judgment of the Backstop Parties, would have a material adverse impact on the success of the Rights Offering; (vi) all required approvals and consents shall have been obtained; (vii) all representations and warranties made by BFE Corp. in this Letter Agreement being true and correct in all material respects; (viii) BFE Corp. shall be in compliance with all covenants and other provisions of this Letter Agreement in all material respects; (ix) the Cargill Acknowledgement Letter (as defined below) being in full force and effect; (x) each of the Executive Management Waiver Agreements (as defined in the Loan Agreement) being in full force and effect; (xi) no actions, suits or proceedings shall be pending or threatened that challenge any Definitive Agreement, this Letter Agreement, the Loan Agreement, the Cargill Acknowledgement Letter or any related agreement; (xii) the Backstop Parties having been reasonably satisfied with the Certificate of Designations setting forth the rights and preferences of the Series A Convertible Preferred Stock that reflects the terms set forth on Exhibit A hereto and other customary terms and provisions as determined by Greenlight in its reasonable discretion; (xiii) the receipt by the Backstop Parties of a legal opinion from Cravath, Swaine & Moore LLP with respect to customary matters in a form satisfactory to Greenlight in its reasonable discretion; (xiv) BFE Corp. shall not have entered into any letter of intent, memorandum of understanding, agreement in principle or other agreement relating to any competing plan, proposal, offer or transaction with a third party other than Greenlight materially inconsistent with this Letter Agreement; and (xv) the Board of Directors of BFE Corp. shall have adopted Section 16b-3 Resolutions related to the issuance to the Backstop Parties of Series A Convertible Preferred Stock, Common Stock and warrants, the form of which shall be satisfactory to Greenlight in its sole discretion.

 
5

 

9.           Registration Rights.  The holders of Series A Convertible Preferred Stock and a Warrant (as defined in the Loan Agreement) shall have registration rights with respect to the shares of Common Stock upon conversion of the Series A Convertible Preferred Stock and exercise of a Warrant commensurate with those rights granted to the holders in the Registration Rights Agreement, dated as of June 19, 2007, by and between BFE Corp., Greenlight and the other stockholders party thereto.  Each of the Backstop Parties expressly waives any and all rights under Section 2.2 of the Registration Rights Agreement, dated as of June 19, 2007, by and between BioFuel and the holders of shares of BFE Common Stock identified therein (the “Existing Registration Rights Agreement”), that may arise in connection with the Rights Offering.
 
10.         Cargill.  BFE Corp. has entered into an agreement, dated as of September 23, 2010 (the “Cargill Acknowledgement Letter”) with Cargill, Incorporated and its affiliates (collectively, “Cargill”), which provides that upon payment (the “Cargill Payment”) of $2,800,828 (plus accrued and unpaid interest on such amount as of the date of payment pursuant to the agreement, dated January 14, 2009, by and between BFE Corp. and certain of its affiliates and Cargill (the “Cargill Settlement Agreement”)) from the Offering Proceeds, Cargill shall forgive the remaining Payable (as defined in the Cargill Settlement Agreement) in exchange for shares of Series A Convertible Preferred Stock in an amount equal to the amount of the remaining Payable, which amount shall be converted into Series A Convertible Preferred Stock at a conversion price on an as converted to Common Stock basis equal to the average of the volume weighted averages of the trading prices for the prior ten (10) day trading period of the Common Stock, ending on the second trading day immediately preceding the date the Series A Convertible Preferred Stock is issued.  BFE Corp. hereby agrees that it shall not breach, violate or terminate the Cargill Acknowledgment Letter.  BFE Corp. agrees that it will not amend, waive or modify the Cargill Acknowledgement Letter without the written consent of Greenlight.
 
11.         Representations and Warranties of BFE Corp.  BFE Corp. represents and warrants to the Backstop Parties that the statements contained in this Paragraph 11 are correct and complete as of the date of this Letter Agreement and will be true as of the closing of the Rights Offering:
 
(a)         Organization.  BFE Corp. (a) is a corporation duly organized, validly existing and in good standing under the Laws (as defined below) of the State of Delaware, (b) is duly qualified to do business as a foreign corporation and is in good standing under the Laws of each jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, (c) has the relevant entity power and authority necessary to own or lease its properties and to carry on its businesses as currently conducted and (d) is not in breach or violation of, or default under, any provision of its organizational documents, except, in the case of clauses (b) and (c), where any failures, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Change.  BFE Corp. has never approved or taken any action, nor is there any pending or (to BFE Corp.’s knowledge) threatened action, seeking BFE Corp.’s dissolution, liquidation, insolvency or rehabilitation except as set forth on Schedule 11(a).
 
 
6

 

(b)         Power and Authority; Enforceability.  BFE Corp. has the relevant entity power and authority necessary to execute and deliver this Letter Agreement and each other agreement, document or writing executed or delivered in connection with the Letter Agreement and each amendment or supplement to any of the foregoing (including this Letter Agreement, the “Transaction Documents”) to which BFE Corp. is a party, and to perform and consummate the transactions contemplated hereby and thereby (the “Transactions”). BFE Corp. has taken all action necessary to authorize the execution and delivery by BFE Corp. of each Transaction Document to which BFE Corp. is party, the performance of BFE Corp.’s obligations thereunder, and the consummation by BFE Corp. of the Transactions.  Each Transaction Document to which BFE Corp. is a party has been duly authorized, executed and delivered by BFE Corp., and is enforceable against BFE Corp. in accordance with its terms except as such enforceability may be subject to the effects of bankruptcy, insolvency, reorganization, moratorium or other Laws relating to or affecting the rights of creditors and general principles of equity (the “Enforceability Exception”).
 
(c)         No Violation; Necessary Approvals.  The execution and the delivery by BFE Corp. of this Letter Agreement and the other Transaction Documents to which BFE Corp. is a party, the performance by BFE Corp. of BFE Corp.’s obligations hereunder and thereunder, and consummation of the Transactions by BFE Corp. will not (i) with or without notice or lapse of time, constitute, create or result in a breach or violation of,  default under, loss of benefit or right under or acceleration of performance of any obligation required under any (A) law (statutory, common or otherwise), constitution, ordinance, rule, regulation, executive order or other similar authority (“Law”) enacted, adopted, promulgated or applied by any legislature, agency, bureau, branch, department, division, commission, court, tribunal or other similar recognized organization or body of any federal, state, county, municipal, local or foreign government or other similar recognized organization or body exercising similar powers or authority (a “Governmental Body”), (B) order, ruling, decision, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Body or arbitrator (an “Order”), (C) contract, agreement, arrangement, commitment, instrument, document or similar understanding (whether written or oral), including a lease, sublease and rights thereunder (“Contract”) or permit, license, certificate, waiver, notice and similar authorization (“Permit”) to which, in the case of (A), (B) or (C), BFE Corp. is a party or by which it is bound or any of its assets are subject, or (D) any provision of the organizational documents of BFE Corp. as in effect as of the date of this Letter Agreement; except, in the case of clauses (A), (B) and (C), where any failures, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Change or a material adverse effect on its ability to complete the Transactions, (ii) result in the imposition of any material lien, claim or encumbrance (an “Encumbrance”) upon any assets (including the securities of BFE Corp.) owned by BFE Corp.; (iii) require any consent under any Contract or organizational document to which BFE Corp. is a party or by which it is bound or any of its assets are subject; (iv) require any Permit under any Law or Order other than (A) required filings, if any, with the Commission and (B) notifications or other filings with state or federal regulatory agencies after the date of this Letter Agreement that are necessary or convenient and do not require approval of the agency as a condition to the validity of the Transactions; or (v) trigger any rights of first refusal, preferential purchase or similar rights with respect to any securities of BFE Corp., other than piggyback registration rights under the Existing Registration Rights Agreement.
 
 
7

 

(d)         Capitalization.  BFE Corp.’s authorized equity interests consist of 155,000,000 shares, consisting of (a) 100,000,000 shares of Common Stock, (b) 50,000,000 shares of Class B Common Stock and (c) 5,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock” and, together with the BFE Common Stock, the “Capital Stock”).  With respect to Common Stock, 26,273,459 shares are issued and outstanding and 809,607 shares are held in treasury.  With respect to Class B Common Stock, 7,111,985 shares are issued and outstanding and 0 shares are held in treasury.  With respect to Preferred Stock, 0 shares are issued and outstanding and 0 shares are held in treasury.  All of the issued and outstanding shares of Capital Stock: (a) have been duly authorized and are validly issued, fully paid, and nonassessable, (b) were issued in compliance with all applicable state and federal securities Laws and (c) were not issued in breach of any commitments.  Except as disclosed in BFE Corp.’s filings with the Commission, BFE Corp. has no outstanding options, warrants, exchangeable or convertible securities, subscription rights, exchange rights, statutory pre-emptive rights, preemptive rights granted under BFE Corp.’s organizational documents, stock appreciation rights, phantom stock, profit participation or similar rights, or any other right or instrument pursuant to which any person may be entitled to purchase any security of BFE Corp., and has no obligation to issue any rights or instruments.  Except as disclosed in BFE Corp.’s filings with the Commission, there are no Contracts with respect to the voting or transfer of any of the Capital Stock.  BFE Corp. is not obligated to redeem or otherwise acquire any of its outstanding Capital Stock.
 
(e)         No Misstatements or Omissions.  All information, other than financial projections (“Projections”) and other forward-looking information and information of a general economic nature, which has been or is hereafter made available to Greenlight by or on behalf of BFE Corp. or its representatives in connection with the transactions contemplated hereby (the “Information”) is or, when furnished, will be complete, when taken as a whole, and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading in light of the circumstances under, and the time at which, such statements are made, and (ii) the Projections that have been or will be made available to Greenlight have been and will be prepared in good faith based upon assumptions that are reasonable at the time made and at the time made available to Greenlight.  The parties acknowledge that the Projections are subject to inherent uncertainty and actual results may vary, however at the time the Projections were and are developed they were and will be developed in good faith based upon reasonable assumptions.  BFE Corp. hereby agrees to supplement the Information and the Projections from time to time until the closing date of the Rights Offering so that the representation and warranty in the preceding sentence is correct on such date.
 
11A.      Power and Authority.  Each Backstop Party represents and warrants to BFE Corp. with respect to itself only that (i) it has the relevant entity power and authority, if applicable, necessary to execute and deliver each Transaction Document to which it is a party, and to perform and consummate the Transactions; (ii) it has taken all action necessary to authorize the execution and delivery by it of each Transaction Document to which it is a party, the performance of its obligations thereunder, and the consummation by it of the Transactions and each Transaction Document to which it is a party has been duly authorized, executed and delivered by it, and is enforceable against it in accordance with its terms except as such enforceability may be subject to the Enforceability Exception.
 
 
8

 

12.         Expenses; Indemnification.
 
(a)         General.  Whether or not the transactions contemplated hereby are consummated, BFE Corp. agrees to: (y) pay within five (5) business days of demand the reasonable and documented fees, expenses, disbursements and charges of the Backstop Parties incurred previously or in the future relating to the exploration and discussion of alternative financing structures to the Backstop Commitment or to the preparation and negotiation of this Letter Agreement, and the proposed documentation and the transactions contemplated hereby, including, without limitation, the reasonable fees and expenses of any counsel to the Backstop Parties; and (z) indemnify and hold harmless Greenlight and their respective stockholders, members and general and limited partners and the respective officers, directors, employees, affiliates, advisors, agents, attorneys, accountants and consultants of each such entity and to hold the Backstop Parties and such other persons and entities (each, an “Indemnified Person”) harmless from and against any and all losses, claims, damages, liabilities and expenses, joint or several, which any such person or entity may incur, have asserted against it or be involved in as a result of or arising out of or in any way related to this Letter Agreement, the matters referred to herein, the proposed Backstop Commitment contemplated hereby, the use of proceeds thereunder or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse each such Indemnified Person within five (5) business days of demand for any legal or other expenses incurred in connection with any of the foregoing; provided, however, that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they have resulted from the bad faith, willful misconduct or gross negligence of such Indemnified Person.  Notwithstanding any other provision of this Letter Agreement, no Indemnified Person will be liable for any special, indirect, consequential or punitive damages in connection with its activities related to the Backstop Commitment.  The terms set forth in this paragraph shall survive termination of this Letter Agreement.
 
(b)         Tax Withholdings and Indemnity.  BFE Corp. agrees not to withhold any taxes on any payments made to the Backstop Parties under this Letter Agreement; provided that to the extent BFE Corp. is required (by law or pursuant to the conclusion of any legal proceeding or the reasonable interpretation or administration thereof) to withhold, remit or pay over any taxes on any payments made to the Backstop Parties under this Letter Agreement, BFE Corp. agrees to indemnify the Backstop Parties and make them whole with respect to any and all such taxes actually withheld including any and all associated interest and penalties.
 
13.         No Recourse.  Notwithstanding anything that may be expressed or implied in this Letter Agreement, or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this Letter Agreement, BFE Corp. covenants, agrees and acknowledges that no personal liability shall attach to the former, current or future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers general or limited partners or assignees of a Backstop Party or any former, current or future stockholder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing, whether by enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise.
 
 
9

 

14.         Assignment; No Third Party Beneficiaries.  This Letter Agreement (a) is not assignable by BFE Corp. or a Backstop Party without the prior consent of the other parties (and any purported assignment without such consent shall be null and void), and (b) is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights of, any person other than the parties hereto.  Notwithstanding the foregoing, Greenlight may assign all or any portion of its obligations hereunder to one or more financial institutions reasonably acceptable to BFE Corp. (provided, that BFE Corp.’s consent shall not be required for such an assignment to an affiliate of Greenlight).  Upon any such assignment (other than an assignment without BFE Corp.’s consent), the obligations of Greenlight in respect of the portion of their obligations so assigned shall terminate.
 
15.         Withdrawal of Letter Agreement.  This Letter Agreement shall be considered withdrawn if Greenlight has not received from BFE Corp. a fully executed counterpart to this Letter Agreement on or before 5:00 p.m. on September 24, 2010.
 
16.         Governing Law; Jurisdiction.  This Letter Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflicts of laws in the State of New York.  The parties hereby irrevocably submit to the personal jurisdiction of the courts of the State of New York located in New York County, New York, and the Federal courts of the United States of America located in the State of New York, New York County, solely in respect of the interpretation and enforcement of the provision of this Letter Agreement and of the documents referred to in this Letter Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Letter Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a New York State or Federal court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner as may be permitted by law shall be valid and sufficient service thereof.
 
17.         Waiver of Jury Trial.  Each party acknowledges and agrees that any controversy which may arise under this Letter Agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any such right such party may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or relating to this Letter Agreement, or any of the transactions contemplated  by this Letter Agreement.  Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each party understands and has considered the implications of this waiver, (iii) each party makes this waiver voluntarily and (iv) each party has been induced to enter into this Letter Agreement by, among other things, the mutual waivers and certifications expressed above.
 
18.         Amendment; Waiver; Counterparts.  This Letter Agreement may not be amended, modified or waived except in a writing signed by Greenlight, BFE Corp. and Third Point Advisors, LLC.  This Letter Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement.  Delivery of an executed counterpart of this Letter Agreement by facsimile or e-mail shall be effective as delivery of a manually executed counterpart of this Letter Agreement.
 
 
10

 

19.         Termination.  The obligations of the Backstop Parties under this Letter Agreement shall terminate immediately, at Greenlight’s election, at any time prior to the consummation of the Rights Offering upon the occurrence of any of the following: (i) the termination of the Loan Agreement; (ii) BFE Corp. entering into a definitive agreement with respect to a Substitute Transaction; (iii) if in the reasonable judgment of Greenlight, the conditions in Paragraph 8 become incapable of being satisfied prior to January 24, 2011; (iv) a Material Adverse Change has occurred; (v) any condition set forth in Paragraphs 8(iv) or 8(viii) of this Letter Agreement cannot be cured or satisfied with the passage of time or, if capable of being cured or satisfied, cannot be cured or satisfied prior to March 24, 2011; (vii)  the Common Stock shall no longer be listed on a national securities exchange; or (vii) BFE Corp.’s adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law.  Further, each of Greenlight or BFE Corp. may terminate this Letter Agreement at any time upon five (5) business days’ prior written notice upon the occurrence of any of the following events: (x) another party’s material breach of any of the representations, warranties or covenants set forth in this Letter Agreement or with respect to the consummation of the Rights Offering that remains uncured for a period of five (5) business days after the receipt by the non-terminating party of notice of such breach or (y) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order enjoining the consummation of a material portion of the Rights Offering or any related transactions.  The Letter Agreement, and the obligations of the parties hereunder, may be terminated by mutual agreement between the parties.
 
20.         Alternative Transactions.  Notwithstanding anything to the contrary in this Letter Agreement, BFE Corp. shall be permitted to solicit, participate in, initiate or facilitate discussions or negotiations with, or provide any information to, any person or group of persons concerning any alternative equity financing or other transaction that would result in the (a) repayment in full of all amounts outstanding under the Bridge Loan, (b) repayment in full of all amounts under the Mezzanine Loan Agreement and (c) satisfy all obligations under the Cargill Acknowledgement Letter (a “Substitute Transaction”).  If, as a result of such activities, the Board of Directors of the Company (the “Board”) (excluding any Board member that is an affiliate of Greenlight) determines in good faith after consultation with outside legal counsel and independent financial advisors that (i) it has the opportunity to enter into a Substitute Transaction that will be consummated within a timeframe that is not materially longer than the anticipated timeframe for the Rights Offering but in no event later than February 1, 2011, and (ii) such Substitute Transaction is more favorable to the holders of Company Common Stock (excluding benefits arising to the Backstop Parties by virtue of the Backstop Commitment) than the Rights Offering (taking into account all the terms and conditions of such Substitute Transaction that the Board deems relevant including, without limitation, any break-up fee provisions, expense reimbursement provisions, conditions to closing and availability of necessary financing) and is reasonably likely to be consummated prior to February 1, 2011, then the Company shall deliver three (3) business days prior notice to Greenlight of its intention to enter into such Substitute Transaction, together with reasonable details concerning the terms and conditions of such Substitute Transaction.  After such three (3) business day period, (x) the Board shall be permitted to approve the Substitute Transaction, (y) BFE Corp. shall be permitted to enter into such Substitute Transaction and (z) BFE Corp. shall be permitted to terminate this Letter Agreement; so long as in each case (A) the Substitute Transaction continues to meet the requirements of clause (ii) of this Paragraph 20 and (B) upon execution of definitive documentation relating to a Substitute Transaction, BFE will pay to the Backstop Parties an aggregate break-up fee (to be allocated among the Backstop Parties in accordance with their Commitment Percentages) a sum in cash equal to $350,000 (the “Termination Fee”).  For purposes of clarity, the Option Premium shall also remain payable, in addition to the Termination Fee.
 
 
11

 

21.         Entire Agreement.  This Letter Agreement constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and replaces and supersedes all prior agreements and understandings, both written on oral, between the parties hereto with respect to the subject matter hereof and shall become effective and binding upon the mutual exchange of fully executed counterparts.
 
22.         Stockholder Approval of Securities.  BFE Corp. hereby agrees that, upon completion of the Rights Offering, it shall use commercially reasonable best efforts to obtain stockholder approval of the authorization of the Common Stock issuable upon conversion of the Series A Convertible Preferred Stock.  In furtherance of, and not in limitation of the foregoing, BFE Corp. shall use commercially reasonable best efforts to file a proxy statement with the Commission for such stockholder approval by November 15, 2010 (but in any event BFE Corp. shall file such proxy statement by January 1, 2011) and use its best efforts to obtain such stockholder approval by January 24, 2010 (provided such stockholder holder approval shall not be a condition to consummation of the Rights Offering).  Notwithstanding the foregoing, a failure to file such proxy statement with the Commission by November 15, 2010 despite the use of commercially reasonable best efforts to do so by BFE Corp. shall not be deemed a violation or failure to comply with this Letter Agreement for purposes of Paragraph 8 hereof nor an Event of Default under the Loan Agreement; provided, however that if BFE Corp. has not used such commercially reasonable best efforts then there shall be deemed to be a failure to have complied with the conditions in Paragraph 8 hereof.
 
23.         Remain Public Company.  BFE Corp. hereby agrees that until the Rights Offering has been completed, it shall use commercially reasonable best efforts to remain a public company with its securities publicly-traded on a national securities exchange.
 
24.         Voting Agreement.  Upon consummation of the Rights Offering, Greenlight hereby agrees to enter into a Voting Agreement with BFE Corp., the form of which is attached hereto as Exhibit C, and Third Point Loan LLC agrees to enter into a Voting Agreement with BFE Corp., the form of which is attached hereto as Exhibit D.
 
25.         Due Diligence.  BFE Corp. agrees to make available to the Backstop Parties all reasonably requested due diligence materials (including access to BFE Corp. personal and agents), including, without limitation, due diligence materials related to tax, regulatory and other legal items.
 
If the foregoing is in accordance with your understanding of our agreement, please sign this letter in the space indicated below and return it to us.
 
Very truly yours,

[Signature Page Follows]

 
12

 
 
GREENLIGHT CAPITAL OFFSHORE PARTNERS
 
By:
Greenlight Capital, Inc., its investment manager
   
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT CAPITAL, LP
 
By:
Greenlight Capital, LLC, its general partner
   
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT CAPITAL QUALIFIED, L.P.
 
By:
Greenlight Capital, LLC, its general partner
     
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT REINSURANCE, LTD.
 
By:
DME Advisor, L.P., its investment manager
   
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
                         
 
 

 
 
GREENLIGHT CAPITAL (GOLD), LP
 
By:
DME Management GP, LLC, its general partner
   
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
 
GREENLIGHT CAPITAL OFFSHORE MASTER (GOLD), LTD.
 
By:
DME Capital Management, LP, its investment manager
   
 
By:
 
   
Daniel Roitman
   
Chief Operating Officer
 
 
 

 
 
THIRD POINT LOAN LLC
   
By:
 
 
James P. Gallagher
 
Chief Administrative Officer
 
 
 

 

The foregoing is hereby accepted and agreed
to in all respects by the undersigned:
 
BIOFUEL ENERGY CORP.
 
   
Name: Scott H. Pearce
 
Title: President & CEO
 
    
 
 

 

EXHIBIT A
 
SERIES A CONVERTIBLE PREFERRED STOCK
 
The Amended and Restated Certificate of Incorporation (the “Certificate”) of BioFuel Energy Corp. (“BFE Corp.”) authorizes 5,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”) and permits the Board of Directors of BFE Corp. (the “Board”), by resolution, to provide, out of unissued shares of Preferred Stock, for series of Preferred Stock.  With respect to each such series, the Certificate permits the Board to fix the number of shares constituting such series and the designation of such series, and the voting powers (if any) of the shares of such series, preferences and relative, participating, optional or other special rights or privileges, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series.  Pursuant to the authority granted by the Certificate, the Board has, by resolution dated September 24, 2010, provided for up to 5,000,000 shares of Series A Convertible Preferred Stock (“Series A Convertible Preferred Stock”) with the characteristics set forth below.  Capitalized terms not otherwise defined shall have the meanings assigned to such terms in the Backstop Rights Offering Agreement, dated as of September 24, 2010, by and between BFE Corp. and Greenlight Capital, Inc.
 
Liquidation Preference:
 
In the event of any liquidation, dissolution or winding up of BFE Corp. (each, a “Liquidation Event”), the proceeds of such Liquidation Event shall be paid as follows:
First, the holders of Series A Convertible Preferred Stock shall receive an amount equal to the Per Preferred Share Purchase Price for each share of Series A Convertible Preferred Stock.  The balance of any proceeds from a Liquidation Event shall be distributed pro rata among the Common Stockholders.
     
Dividends:
 
The Series A Convertible Preferred Stock will be paid a dividend or have a distribution made to it (as applicable) if, and when, such dividend or distribution is paid or made (as applicable) to the holders of Common Stock.
                   
 
 

 

Voting Rights:
 
The holders of Series A Convertible Preferred Stock will have no voting rights, except that the consent of at least a majority of the outstanding shares of Series A Convertible Preferred Stock (in the aggregate, voting as a class) will be required to (i) authorize or issue additional shares of Series A Convertible Preferred Stock of the same series or (ii) amend the Certificate or Bylaws of BFE Corp. (the “Bylaws”) to adversely affect the rights, preferences or privileges of the Series A Convertible Preferred Stock.
     
Automatic Conversion:
 
Each share of Series A Convertible Preferred Stock shall, upon issuance, automatically convert into shares of Common Stock as set forth in Paragraph 2 of the Letter Agreement to which this Exhibit A is attached; provided that the aggregate number of shares of Series A Convertible Preferred Stock that automatically convert shall not exceed, and shall be limited to, the number of authorized shares of Common Stock pursuant to the Certificate, and the number of shares so converted shall be determined on a pro rata basis.
In addition, if at any time after the initial issuance of the Series A Convertible Preferred Stock there are additional authorized shares pursuant to the Certificate, each share of Series A Convertible Preferred Stock shall automatically convert into the respective number of shares of Common Stock pursuant to Paragraph 2 of the Letter Agreement; provided that the aggregate number of shares of Series A Convertible Preferred Stock that automatically convert shall not exceed, and shall be limited to, the number of authorized shares of Common Stock pursuant to the Certificate, and the number of shares so converted shall be determined on a pro rata basis.

 
 

 

EXHIBIT B
 
BACKSTOP PARTIES
 
Greenlight Entity
 
Commitment Percentage
 
Greenlight Capital, L.P.
    5.2 %
Greenlight Capital Qualified, L.P.
    19.9 %
Greenlight Capital Offshore Partners
    29.4 %
Greenlight Reinsurance, Ltd.
    8.1 %
Greenlight Capital Offshore Master (Gold), Ltd.
    1.3 %
Greenlight Capital (Gold), LP
    2.7 %
Third Point Loan LLC
    33.3 %
                         
 
 

 

EXHIBIT C
 
GREENLIGHT VOTING AGREEMENT   
 

 
EXECUTION VERSION

VOTING AGREEMENT
 
This VOTING AGREEMENT (this “Agreement”) dated September 24, 2010, is entered into by and among Biofuel Energy Corp., a Delaware corporation (the “Company”), and each of the Persons listed on Schedule I attached hereto (including, with their permitted transferees or assigns, collectively, the “Stockholders”).  This Agreement shall become effective as of the Closing (as defined therein) of that certain proposed registered rights offering for Series A Convertible Preferred Stock of the Company (or depository interests in respect thereof) (the “Rights Offering”) as further described in that certain Loan Agreement and Rights Offering Letter Agreement, each dated as of even date herewith by and among the Company, each of the Stockholders and the other signatories thereto (the “Loan Agreement” and the “Rights Offering Letter Agreement”, respectively).
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the promises and respective covenants and agreements set forth in this Agreement and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties agree as follows:
 
ARTICLE I.
 
VOTING
 
Section 1.1     Agreement to Vote.  Each Stockholder hereby agrees to vote each share of voting capital stock of the Company that such Stockholder currently holds or subsequently acquires (hereinafter the “Stockholder Shares”), at regular and special meetings of the Company’s stockholders (or by written consent) in accordance with and subject to the provisions of this Agreement.
 
Section 1.2      Manner of Voting.  The voting of Shares pursuant to this Agreement may be effected in person, by proxy, by written consent, or in any other manner permitted by the laws of the State of Delaware.
 
Section 1.3     Grant of Proxy.  Should the provisions of this Agreement be construed to constitute the granting of proxies, such proxies shall be deemed coupled with an interest and are irrevocable for the term of this Agreement.
 
ARTICLE II.
 
BOARD OF DIRECTORS
 
Section 2.1     Size and Composition of Board of Directors.  The size and composition of the Board of Directors shall be determined in accordance with the provisions of the Company's Amended and Restated Certificate of Incorporation, in each case as in effect from time to time (the “Restated Certificate”) and the Company’s By-Laws.

 
1

 
 
Section 2.2     Election of Non-Affiliated Directors.  Subject to the provisions of the Restated Certificate and By-Laws, effective as of the date of the consummation of the Rights Offering, each Stockholder agrees that at each annual meeting of the Company’s stockholders, at any other meeting of the Company’s stockholders at which members of the Board are to be elected, and whenever members of the Board are to be elected by written consent, such Stockholder shall vote or act with respect to all of its Shares so as to elect Director nominees that are not Affiliates of any or all of the Stockholders such that at least two (2) directors are not Affiliates of any or all of the Stockholders; provided that the Company nominates one or more Director nominees that are not Affiliates of any or all of the Stockholders; and provided further that there are at least five directors on the Board.
 
Section 2.3     Approval of Increase in Authorized but Unissued Shares of Common Stock.Each Stockholder agrees that at a meeting of the Company’s stockholders at which the Company, if ever, proposes to amend its Restated Certificate so as to increase the number of authorized but unissued shares of Common Stock up to an amount of shares sufficient to enable the Company to convert all Series A Convertible Preferred Stock issuable pursuant to the (i) Rights Offering, (ii) the warrant(s) contemplated by the Loan Agreement and (iii) each other transaction contemplated by the Loan Agreement, including the “Cargill Acknowledgement Letter” described in Section 10 of the Rights Offering Letter Agreement), which shares of Common Stock shall rank pari passu with the existing shares of Common Stock, in favor of such proposal.
 
Section 2.4     No Limitation on Other Voting Rights.  Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall limit or restrict a Stockholder from acting in its sole discretion on any matter other than those referred to in this Agreement.
 
ARTICLE III.
 
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Section 3.1     Ownership, Authority, Etc.  Each Stockholder represents and warrants it has full power and capacity to execute, deliver and perform this Agreement, which has been duly executed and delivered by, and evidences the valid and binding obligation of, such Stockholder.
 
Section 3.2     No Voting or Conflicting Agreements.  No Stockholder shall:  (a) except as contemplated by Section 3.3 hereof, grant any proxy, (b) enter into or agree to be bound by any voting trust, (c) enter into any stockholder agreements or arrangements of any kind with any Person (whether or not such agreements or arrangements are with other stockholders of the Company that are not a party to this Agreement) or (d) act, for any reason, as a member of a group or in concert with any other Persons in any manner which is inconsistent with the provisions of this Agreement.
 
Section 3.3     Covenant to Vote.  Each Stockholder shall appear in person or by proxy at any annual or special meeting of the Company’s stockholders for the purpose of establishing a quorum, and shall vote such Stockholder’s Shares upon any matter submitted to the Company’s stockholders in a manner not inconsistent or in conflict with, and to implement, the terms of this Agreement.

 
2

 
 
Section 3.4      Covenants of the Company.
 
The Company agrees to use its reasonable best efforts to propose nominees for directors that are not Affiliates of any or all of the Stockholders, so as to enable the Stockholder to comply with its obligations contemplated by Section 2.2.
 
ARTICLE IV.
 
MISCELLANEOUS
 
Section 4.1      Term