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BIOF > SEC Filings for BIOF > Form 8-K on 17-Apr-2013All Recent SEC Filings

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Form 8-K for BIOFUEL ENERGY CORP.


17-Apr-2013

Entry into a Material Definitive Agreement


Item 1.01. Entry into a Material Definitive Agreement.

On April 11, 2013, certain subsidiaries of BioFuel Energy Corp. (the "Company") entered into a definitive agreement (the "Lender Agreement") with First National Bank of Omaha, as Escrow Agent under the Lender Agreement, and as Administrative Agent and Collateral Agent under the secured Credit Agreement dated as of September 25, 2006 (as amended and supplemented from time to time, the "Credit Agreement") among those subsidiaries (the "Borrowers") and various financial institutions as lenders (the "Lenders"), and the Lenders. Under the terms of the Lender Agreement, the Administrative Agent and the Lenders will provide the Borrowers with a grace period until July 30, 2013 to allow the Company to pursue one or more strategic alternatives, including but not limited to a potential sale of one or both of the Company's ethanol plants. This grace period is subject to the achievement of certain milestones, and may be extended at the sole discretion of the Administrative Agent. As previously disclosed, the Company has engaged Piper Jaffray & Co to act as its financial adviser to assist the Company in exploring certain strategic alternatives with respect to its Borrower subsidiaries, including a potential sale of one or both of its plants.

Simultaneously with the execution of the Lender Agreement, the Borrowers, the Administrative Agent, the Collateral Agent and the Lenders also entered into a Deed in Lieu of Foreclosure Agreement and Joint Escrow Instructions (the "Deed in Lieu Agreement"), pursuant to which, among other things, the Borrowers have agreed to transfer ownership of their respective ethanol plants, including the underlying real property, personal property and all material contracts used to operate the plants, to certain designees of the Administrative Agent and the Lenders ("Newco"), in full satisfaction of all outstanding obligations under the Credit Agreement and in lieu of the Administrative Agent, the Collateral Agent and the Lenders exercising their rights and remedies under the Credit Agreement and related financing documents. The Company has made a contingent payment into escrow of approximately $900,000 for the anticipated payment of certain obligations and liabilities of the Borrowers which are to be paid or assumed by NewCo in conjunction with any such transfer. In conjunction with any such transfer, the Company would receive a full and final release of all known or potential claims of the Lenders, as well as a one percent (1%) equity interest in Newco, which may be increased, under certain circumstances, to a two percent (2%) equity interest in Newco along with (in such circumstances) the right to acquire up to an additional 17.5% of the equity of Newco.

Under the terms of the Lender Agreement, the Deed in Lieu Agreement is to be held in escrow by the Escrow Agent until the earlier of such time as the Company and its Borrower subsidiaries have completed their pursuit of the strategic alternatives described above or July 30, 2013, unless otherwise extended by the Administrative Agent.

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