ID No. 221 EXHIBIT 10.4
AG CAPITAL COMPANY
LOAN AGREEMENT AMENDMENT
Glyndon, Minnesota
August 19, 1996
The Loan Agreement between Ag Capital Company, "AGCAPCO", and RDO Equipment
Co., a North Dakota corporation, d/b/a in certain locations as XxXxxx County
Implement, Inc. and Red River Implement, Inc., "BORROWER", dated July 25,
1996, hereinafter referred to as "Loan Agreement", is hereby amended as
follows:
The "REPAYMENT" section of the Loan Agreement regarding Seasonal Loan,
Note No. 23650, shall be amended as follows:
Seasonal Loan, Note No. 23650, of not to exceed $13,060,000, shall mature
and all outstanding principal shall be payable on June 1, 1997.
Except as expressly modified by the terms of this Loan Agreement
Amendment, all of the terms and conditions of the Loan Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement this
19th day of August, 1996.
AGCAPCO: Ag Capital Company
By
------------------------
Xxxxxx X. Xxxxx, Manager
AGREED AND ACCEPTED
BORROWERS: RDO Equipment Co., a North Dakota corporation
d/b/a in certain locations as XxXxxx County Implement, Inc.
and Red River Implement, Inc.)
By
------------------------
Xxxxxx X. Xxxxxx, President
By
------------------------
Xxxxx X. Xxxxx, Secretary
August 19, 1996 1 LOAN AGREEMENT AMENDMENT
ID No. 221
AG CAPITAL COMPANY
LOAN AGREEMENT
THIS AGREEMENT, made and entered into by and between Ag Capital Company, a
Delaware corporation whose address is X.X. Xxx 0000, Xxxxx, Xxxxx Xxxxxx
00000-0000, hereinafter called "AGCAPCO;" and, RDO Equipment Co., a North
Dakota corporation, whose address is 0000 Xxxxx Xxxxxxxxxx Xxxxx, X.X. Xxx
0000, Xxxxx, Xxxxx Xxxxxx 00000-0000, d/b/a in certain locations as XxXxxx
County Implement, Inc., and Red River Implement, Inc., hereinafter called
"BORROWER";
WITNESSETH THAT, AGCAPCO agrees to make the following New Loans to BORROWER,
to acknowledge Transferred Loans, and to consolidate Present Loans hereunder,
subject to all the security, terms and conditions of this Loan Agreement:
NEW LOANS
$13,245,000.00 - Seasonal Loan, Note No. 23650
8,500,000.00 - Bridge Loan, Note No. 23640
--------------
$21,745,000.00 - TOTAL NEW LOANS
TRANSFERRED LOANS
(Transferred from PROffutt, Ltd.)
$ 771,538.62 - Term Loan, Note No. 5800
234,081.25 - Term Loan, Note No. 10050
68,047.52 - Term Loan, Note No. 12690
389,722.88 - Term Loan, Note No. 12700
362,680.71 - Term Loan, Note No. 17610
837,907.03 - Term Loan, Note No. 20050
--------------
$ 2,663,978.01 - TOTAL TRANSFERRED LOANS
PRESENT LOANS
$ 40,358.69 - Term Loan, Note No. 4550
99,825.30 - Term Loan, Note No. 4560
15,000.00 - Term Loan, Note No. 4580
223,281.83 - Term Loan, Note No. 4910
884,971.77 - Term Loan, Note No. 20020
--------------
$ 1,263,437.59 - TOTAL PRESENT LOANS
TOTAL LOANS
$ 40,358.69 - Term Loan, Note No. 4550
99,825.30 - Term Loan, Note No. 4560
15,000.00 - Term Loan, Note No. 4580
223,281.83 - Term Loan, Note No. 4910
771,538.62 - Term Loan, Note No. 5800
234,081.25 - Term Loan, Note No. 10050
68,047.52 - Term Loan, Note No. 12690
389,722.88 - Term Loan, Note No. 12700
362,680.71 - Term Loan, Note No. 17610
837,907.03 - Term Loan, Note No. 20050
884,971.77 - Term Loan, Note No. 20020
13,245,000.00 - Seasonal Loan, Note No. 23650
8,500,000.00 - Bridge Loan, Note No. 23640
--------------
$25,672,415.60 - TOTAL LOANS
July 25, 1996 1 LOAN AGREEMENT
PURPOSE: The proceeds of the loans hereunder shall be used to assist in
financing BORROWER's current asset needs, specifically new industrial
equipment inventories other than Xxxx Deere, assist in meeting operating
expenses; fund fixed assets; fund acquisition of assets in Fort Worth, Irving
and Waco, Texas; fund acquisition of land and buildings from PROffutt Limited
Partnership, and for no other purpose.
NOTE NO. DESCRIPTION
4550 Xxxxxxxx Xx Retail Store (XxXxxx County Implement, Inc.)
4560 Grand Forks Industrial Retail Store
4580 Equipment Note
4910 Breckenridge Ag Retail Store (Red River Implement, Inc.)
5800 Burnsville Industrial Retail Store
10050 Fargo Industrial Retail Store
12690 Minot Industrial Retail Store
12700 Sauk Rapids Industrial Retail Store
17610 Flagstaff Industrial Retail Store
20020 Casselton Ag Retail Store
20050 San Diego Industrial Retail Store
23640 Bridge Loan
23650 Seasonal Note
INTEREST: Unless fixed rates are selected according to the FIXED RATE
ADVANCES AND MATURITIES section of this agreement, all outstanding loan
balances hereunder shall bear interest at a rate of interest as follows:
Term Loan, Note No. 4550: 7.99% (Fixed to 8/15/96)
Term Loan, Note No. 4580: Prime
Term Loan, Note No. 4560: 9.90% (Fixed to maturity)
Term Loan, Note No. 4910: 9.70% (Fixed to maturity)
Term Loan, Note No. 5800: 8.60% (Fixed to maturity)
Term Loan, Note No. 10050: 8.60% (Fixed to maturity)
Term Loan, Note No. 12690: 8.60% (Fixed to maturity)
Term Loan, Note No. 12700: 8.60% (Fixed to maturity)
Term Loan, Note No. 17610: 8.93% (Fixed to maturity)
Term Loan, Note No. 20020: 7.58% (Fixed to 7/31/96)
Term Loan, Note No. 20050: 7.97% (Fixed to 1/1/03)
Bridge Loan, Note No. 23640: Prime
Seasonal Loan, Note No. 23650: Prime
("Prime" shall be the highest Prime rate reported in the WALL STREET JOURNAL,
Midwest Edition, as it adjusts daily. If such rate is not published in the
WALL STREET JOURNAL, Midwest Edition, or the publication ceases to be
published, then AGCAPCO will set the interest rate by using a comparable
index or reference rate.)
Interest on all loans shall be payable monthly with principal, according to
the REPAYMENT section of this agreement, except Note No. 4580, which shall be
payable quarterly, according to the REPAYMENT section of this agreement.
NOTES AND SECURITY: Advances made hereunder, and any sums henceforth lent to
BORROWER by AGCAPCO, shall be evidenced by a promissory note or notes
acceptable to AGCAPCO, and shall be secured by existing security, and new
security which includes a first security interest in all Accounts, assumed
Real Estate Mortgages in the original amount of the real estate loans for
Burnsville and Sauk Rapids, Minnesota; Fargo and Minot, North Dakota;
Flagstaff, Arizona; and San Diego, California; and a new security interest in
all assets purchased or owned and located in Texas as a result of the
purchase of Mega Equipment Company.
July 25, 1996 2 LOAN AGREEMENT
All property under lien to AGCAPCO as security for loans hereunder, or as
security for loans hereafter made, shall be security to the extent thereof for
all loans made by AGCAPCO to BORROWER.
PREPAYMENT PENALTIES: Prepayment of principal may be subject to prepayment
expense. Such expense shall be based on the difference between AGCAPCO's cost
of like funds to maturity at the time of the prepayment and the existing
fixed lending rate to BORROWER. Such expense shall be calculated to preserve
AGCAPCO's yield and cover any costs incurred by AGCAPCO in funding, note
placement and/or note sale arrangements. (PLEASE SPECIFICALLY ACKNOWLEDGE
YOUR UNDERSTANDING OF THE PREPAYMENT PENALTY BY INITIALLING HERE: )
-- --
LIMITATION ON ADVANCES: The total seasonal loan outstanding under this or
any loan agreement between AGCAPCO and BORROWER shall not exceed the amount
shown in the above heading.
Advances on Seasonal Loan, Note No. 23650, shall be limited to $12,000,000,
unless required to fund drafts drawn on letter of credit specifically
approved by AGCAPCO.
Further, advances on Seasonal Loan, Note No. 23650, shall be limited to 90%
of new whole goods inventories from suppliers other than Xxxx Deere net of
floor planning and unpaid accounts payable on such inventories, and 90% of
accounts receivable net of the allowance for doubtful accounts, based on
monthly collateral reports in such form as acceptable to AGCAPCO.
Advances on Bridge Loan, Note No. 23640, shall not be permitted prior to
completion of Letter of Intent and execution of documentation contemplated by
the Letter of Intent dated July 11, 1996, for the purchase of assets of Mega
Equipment Company.
FIXED RATE ADVANCES AND MATURITIES: It is agreed the interest rate may at
BORROWER's option be fixed on any term loan indebtedness not already subject
to a fixed rate of interest ("fixed rate amount") under this agreement as
follows:
1. Fixed rate amounts shall be in $100,000 increments, unless otherwise
agreed by AGCAPCO.
2. Each fixed rate amount and each selected maturity date will be
treated as a separate indebtedness for interest rate purposes.
3. Each term loan fixed rate amount and selected maturity date must be
approved by AGCAPCO and compatible with BORROWER's overall term loan
repayment schedule.
4. BORROWER may receive next day interest rate quotes if a firm request
is placed and accepted by AGCAPCO before 12:00 p.m. (Central) on any
business day.
5. Upon maturity of each fixed term amount, BORROWER may convert the
fixed rate amount to a new fixed interest rate and maturity date
acceptable to AGCAPCO, or convert the fixed rate amount to the
variable term loan rate, or repay the fixed rate amount.
6. Each fixed rate amount shall be summarized in a written notice of
confirmation (the "confirmation") to BORROWER. Each confirmation
shall reference and confirm at least the following:
a. Applicable Note No.
b. The fixed rate amount
c. The rate of interest
d. The effective date
e. The maturity date
July 25, 1996 3 LOAN AGREEMENT
7. BORROWER agrees that the confirmation shall verify the understanding
reached by the parties, and that BORROWER shall be bound by the
confirmation without its signature; provided, however, if there is
an error in the confirmation, BORROWER shall notify AGCAPCO of the
error within five days after receipt of the confirmation and an
appropriate correction will be made.
8. If there is a question on the interest rate applicable to the fixed
rate amount, the rate as established by AGCAPCO for such amount
shall be controlling.
CONDITIONS: While this loan agreement is in effect, BORROWER agrees to comply
with the following conditions:
a. INSURANCE: BORROWER will obtain normal business and casualty insurance,
as required by AGCAPCO, with financially sound insurers, in amounts
sufficient to protect AGCAPCO, with a loss payable clause in favor of
AGCAPCO.
b. FINANCIAL INFORMATION: BORROWER will furnish AGCAPCO with monthly
financial statements, collateral reports, and annual unqualified audits,
and such other information as AGCAPCO may request relative to
BORROWER's business, and permit such examination of its books and
records as AGCAPCO may specify. BORROWER also agrees that parties
preparing such financial information are authorized to release to
AGCAPCO such financial information as AGCAPCO may request.
c. BUDGET: BORROWER will provide an operating budget and cashflow forecast
to AGCAPCO within 90 days of fiscal year-end.
d. APPLICATION OF PAYMENTS: AGCAPCO, as its discretion, may apply payments
to the reduction of any of the indebtedness outstanding between AGCAPCO
and BORROWER.
e. NEGATIVE PLEDGE: BORROWER will not mortgage, pledge, assign, grant
security interests, or otherwise encumber any assets pledged to AGCAPCO,
to any other party, nor will it guarantee the obligations of any other
party, without the prior written consent of AGCAPCO.
f. MAINTENANCE OF COLLATERAL: BORROWER will maintain all collateral pledged
to AGCAPCO in good, saleable condition, and in compliance with all
applicable laws, regulations, and orders, and apply payments from sales
of collateral which occur outside the ordinary course of business, to
outstanding loan balances.
g. DISPOSAL OF ASSETS: BORROWER will not sell, lease, transfer, or dispose
of any material part of its assets without written consent of AGCAPCO,
other than in the ordinary course of business.
h. PAYMENT OF TAXES, OTHER OBLIGATIONS: BORROWER will pay all federal,
state and local taxes, license fees or similar charges, and all accounts
payable or other obligations, as they become due.
i. TOTAL DEBT TO NET WORTH: BORROWER will maintain a maximum ratio of total
debt to net worth of 5.5 to 1.0.
j. CURRENT RATIO: BORROWER will maintain a minimum ratio of current assets
to current liabilities of 1.1 to 1.0.
REPAYMENT: Without limiting the right of AGCAPCO to demand payment in full or
in part in the event of a default hereunder, the indebtedness arising from
the loans hereunder shall be repaid as follows:
JULY 25, 1996 4 LOAN AGREEMENT
1. Term Loan, Note No. 4550, with a present balance of $40,358.69, shall
be repaid in equal monthly payments of principal and interest of
$1,200. AGCAPCO reserves the right to adjust the principal and interest
payment based on an original amortization of 7 years, and changes in
interest rates. This note matures and all outstanding principal and
interest shall be payable October 1, 1999.
2. Term Loan, Note No. 4560, with a present balance of $99,825.30, shall
be repaid in equal monthly payments of principal and interest of
$2,045.00. This note matures and all outstanding principal and interest
shall be payable February 15, 2001.
3. Term Loan, Note No. 4580, with a present balance of $15,000.00, shall
be repaid in quarterly principal payments of $15,000 each July,
October, January and April. AGCAPCO reserves the right to adjust the
principal and interest payment based on an original amortization of
15 years, and changes in interest rates. This note matures and all
outstanding principal and interest shall be payable October 1, 1996.
4. Term Loan, Note No. 4910, with a present balance of $223,281.83, shall
be repaid in equal monthly payments of principal and interest of
$4,567.33. This note matures and all outstanding principal and interest
shall be payable October 1, 2001.
5. Term Loan, Note No. 5800, with a present balance of $771,538.62, shall
be repaid in level monthly principal and interest payments of $9,400.00
The note matures and all outstanding principal and interest shall be
payable June 28, 2002.
6. Term Loan, Note No. 10050, with a present balance of $234,081.25 shall
be repaid in level monthly principal and interest payments of
$2,900.00. The note matures and all outstanding principal and interest
shall be payable June 28, 2002.
7. Term Loan, Note No. 12690, with a present balance of $68,047.52 shall
be repaid in level monthly principal and interest payments of
$1,000.00. The note matures and all outstanding principal and interest
shall be payable June 28, 2002.
8. Term Loan, Note No. 12700, with a present balance of $389,722.88, shall
be repaid in level monthly principal and interest payments totaling
$4,000.00. The note matures and all outstanding principal and interest
shall be payable June 28, 2002.
9. Term Loan, Note No. 17610, with a present balance of $362,680.71,
shall be repaid in equal monthly principal and interest payments of
$3,400.00. The note matures and all outstanding principal and interest
shall be payable on August 1, 2005.
10. Term Loan, Note No. 20020, with a present balance of $884,971.77, shall
be repaid in equal monthly payments of principal and interest of
$8,370. AGCAPCO reserves the right to adjust the principal and interest
payment based on an original amortization of 15 years, and changes in
interest rates. The note matures and all outstanding principal and
interest shall be payable February 1, 2006.
11. Term Loan, Note No. 20050, with a present balance of $837,907.03 shall
be repaid in equal monthly principal and interest payments of $8,110.
AGCAPCO reserves the right to adjust the principal and interest
payment based on an original amortization of 15 years, and changes in
interest rates. The note matures and all outstanding principal and
interest shall be payable on February 1, 2006.
12. Bridge Loan, Note No. 23460, with an original balance of $8,500,000,
shall mature and all outstanding principal and interest shall be
payable December 1, 1996.
JULY 25, 1996 5 LOAN AGREEMENT
13. Seasonal Loan, Note, No. 23650, of not to exceed $13,245,000, shall
mature and all outstanding principal and interest shall be payable on
September 1, 1996.
LATE FEE PENALTY: Payments received by AGCAPCO 15 calendar days after the
scheduled repayment date are subject to a late payment penalty equal to 1% of
the past due amount but not less than $25.00 per late payment, subject to the
maximum amount allowable by North Dakota Law.
EXPIRATION: The unadvanced portion of any commitment hereunder shall be
canceled as indicated below; provided, however, AGCAPCO may, at its option,
and without notice, extend the expiration date on the loans specified in the
agreement and the maturity date of the seasonal loan without the consent of
BORROWER.
Seasonal Loan, Note No. 23650: June 1, 0000
Xxxxxx Xxxx, Xxxx Xx. 00000: December 1, 1996
REINSTATEMENT: In order to facilitate repayments and reborrowings under this
loan agreement, AGCAPCO is hereby authorized to reinstate all sums repaid on
the seasonal loan through the expiration date specified in this agreement,
provided, however, that the total amount outstanding hereunder shall not
exceed the face amount of the seasonal loan; and provided, further, that the
right of BORROWER to such reinstatement may be denied and canceled at any
time at the option of AGCAPCO.
DEFAULT PROVISION: If BORROWER shall fail to pay when due any amount on any
of the loans hereunder, or on any other indebtedness of BORROWER secured
hereby, or shall fail to observe or perform any of the provisions or
representations of this agreement, or of any notes, security agreements, or
mortgages entered into in connection with this loan agreement, or upon
commencement of any bankruptcy or insolvency proceedings involving BORROWER,
or should AGCAPCO in good xxxxx xxxx itself insecure, BORROWER shall be in
default hereunder. When BORROWER is in default, interest shall continue at
the normal rate and AGCAPCO may declare by written notice to BORROWER that
all such loans and other indebtedness are immediately due and payable, and
AGCAPCO may terminate its commitments and any reinstatement rights hereunder,
proceed to enforce payment under any guarantees and to exercise any or all of
the rights afforded to AGCAPCO by law or agreement. Upon demand, BORROWER
shall pay to AGCAPCO all attorney's fees and costs incurred by AGCAPCO in
protecting or enforcing its rights under this agreement or collateral
securing this loan, including reasonable attorney's fees incurred by AGCAPCO
in a bankruptcy or receivership proceeding or in enforcing any judgment
against BORROWER.
SAVINGS CLAUSE: It is expressly agreed between the parties to this agreement
that if any covenant, condition or restriction contained in this agreement,
or any portion thereof is deemed invalid or void, such invalidity or voidness
shall in no way affect any other covenant, term, condition or restriction in
this agreement.
GOVERNING LAW: The terms and conditions of this agreement shall be governed
as to validity, interpretation, effect and in all respects by the laws and
decisions of the State of North Dakota.
ACCEPTANCE: This loan agreement is the full agreement between the parties. It
may not be modified except in writing, and shall not become effective unless
BORROWER shall, within 30 days from date, signify its acceptance of the terms
and conditions hereof by signing and returning a copy of this agreement to
AGCAPCO.
APPROVED by Ag Capital Company this 25th day of July, 1996.
AGCAPCO: Ag Capital Company
By /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx, Manager
JULY 25, 1996 6 LOAN AGREEMENT
AGREED AND ACCEPTED
BORROWER: RDO Equipment Co., a North Dakota corporation
(d/b/a XxXxxx County Implement, Inc. and Red River
Implement, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx, President
July 31, 1996
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx, Secretary
July 30, 1996
JULY 25, 1996 7 LOAN AGREEMENT
ID XX. 000
XXXXXXXX XXXX XX. 00000
$13,245,000.00 RDO EQUIPMENT CO.
A NORTH DAKOTA CORPORATION
D/B/A XXXXXX COUNTY IMPLEMENT, INC., AND RED RIVER IMPLEMENT, INC.
FARGO, NORTH DAKOTA
JULY 25, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
Ag Capital Company, a Delaware corporation (the "Lender"), at its office in
Fargo, North Dakota, or at such other place as any present or future holder
of this Note may designate from time to time, the principal sum of (i)
$13,245,000.00, or (ii) the aggregate unpaid principal amount of all advances
of credit made by the Lender to the undersigned pursuant to this Note as
shown in the records of any present or future holder of this Note, whichever
is less, plus interest thereon from the date of each advance in whole or in
part included in such amount until this Note is fully paid. Interest will be
computed on the basis of the actual number of days elapsed and a 365-day
year, at a variable rate of Prime ("Prime" shall be the highest Prime rate
reported in the WALL STREET JOURNAL, Midwest Edition, as it adjusts daily. If
such rate is not published in the WALL STREET JOURNAL, Midwest Edition, or
the publication ceases to be published, then AGCAPCO will set the interest
rate by using a comparable index or reference rate.) as such Rate is defined
in that certain Loan Agreement dated July 25, 1996 by and between the
undersigned and the Lender (hereinafter, the "Loan Agreement") or at such
other rate as may be determined pursuant to the terms of such Loan Agreement.
Interest is payable on the first day of each calendar month and at maturity.
Payments received fifteen (15) or more calendar days after the scheduled
repayment date are subject to a late payment penalty equal to 1% of the past
due amount but not less than $25.00 per late payment, subject to the maximum
amount allowable by North Dakota law. This Note matures on June 1, 1997.
Advances of the principal amount shall be made as set forth in the
Loan Agreement.
Amounts may be advanced and readvanced under this Note at the
Lender's sole discretion, provided the principal balance outstanding shall
not exceed the amount first above written. Nothing contained in this Note or
any other agreement or writing shall limit or impair the right of the holder
hereof to demand payment of this Note at any time if there is a default under
the Loan Agreement or any other agreement between the undersigned and the
Lender. The undersigned acknowledge and understand that this Note is
cross-collateralized with all loans to Borrower, and it is agreed and
acknowledged by the undersigned that a default in any of the terms and
conditions of any loans to Borrower, shall constitute a default under this
Note. In the event there is a default by the undersigned in the terms and
conditions of any agreement with the Lender, the Lender shall be entitled to
exercise all remedies allowable by law and to accelerate all amounts then due
and owing under this Note.
The undersigned and each endorser, guarantor and surety of this Note
jointly and severally (i) agree to pay this Note; (ii) guarantee payment of
this Note; (iii) waive demand, presentment, protest, notice of dishonor and
notice of nonpayment of this Note; (iv) consent to any extension or renewal
of this Note without notice; (v) consent to the release of any of them by any
present or future holder of this Note with or without consideration or
notice; (vi) exonerate any present or future holder of this Note from any
duty or obligation to make demand on anyone for payment of any security or
delivery of any guaranty for this Note or to give notice to anyone of
nonpayment thereof or to collect or sell the same; (vii) consent to the
extension, renewal, exchange, subordination, surrender or release of any
security for this Note by any present or future holder of this Note with or
without consideration or notice; (viii) agree that no act, omission or thing,
except full payment of this Note.
JULY 25, 1996 1 SEASONAL NOTE NO. 23670
which but for this provision could act as a release or impairment of their
liability, shall in any way release, impair, or affect the liability of any
of them; (ix) agree to pay on demand all costs and expenses of all present
and future holders of this Note in connection with this Note and any security
and guaranties for this Note, including without limitation reasonable
attorneys' fees, plus interest on such amounts at the rate set forth in this
Note; and (x) consent to the personal jurisdiction of the state and federal
courts located in the State of North Dakota in connection with any
controversy related in any way to this Note or any security or guaranty of
this Note, waive any argument that venue in such forums is not convenient,
and agree that any litigation initiated by any of them against the Lender or
any other present or future holder of this Note relating in any way to this
Note or any security or guaranty for this Note shall be venued in either the
District Court of North Dakota, or the United States District Court, District
of North Dakota. Interest on any amount under this Note shall continue to
accrue, at the option of any present or future holder of this Note, until
such holder receives final payment of such amount in collected funds in form
and substance acceptable to such holder.
No waiver of any right or remedy under this Note shall be valid
unless in writing executed by the holder of this Note, and any such waiver
shall be effective only in the specific instance and for the specific purpose
given. All rights and remedies of all present and future holders of this Note
shall be cumulative and may be exercised singly, concurrently or
successively. The undersigned, if more than one, shall be jointly and
severally liable under this Note, and the term "undersigned," wherever used
in this Note, shall mean the undersigned or any one or more of them. This
Note shall be governed by and construed in accordance with the laws of the
State of North Dakota.
It is not Lender's or Borrower's intention or desire to breach any
applicable usury or maximum finance charge or interest rate law. Therefore,
if any interest rate, penalty, fee or cost provided for herein shall exceed
that which is allowed pursuant to any applicable statute or law, said amount
shall be deemed by the parties hereto to be modified so as to conform to and
equal the maximum amount allowed by said statute or law and any over payment
shall be applied against principal as of the date of such payment.
THE UNDERSIGNED REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE
UNDERSIGNED HAS READ ALL OF THIS NOTE AND UNDERSTANDS ALL OF THE PROVISIONS
OF THIS NOTE. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE BY ANY PRESENT OR
FUTURE HOLDER OF THIS NOTE WITH THE EXPRESS PROVISIONS OF THIS NOTE SHALL
CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES.
RDO Equipment Co., a North Dakota corporation
(d/b/a XxXxxx County Implement, Inc. and Red River Implement, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx, President
July 31, 1996
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, Secretary
July 31, 1996
JULY 25, 1996 2 SEASONAL NOTE NO. 23670
ID NO. 221
SECURITY AGREEMENT
DATE: JULY 25, 1996
DEBTOR: RDO EQUIPMENT CO. SECURED
A NORTH DAKOTA CORPORATION PARTY: AG CAPITAL COMPANY
ADDRESS: X.X. XXX 0000 ADDRESS: X.X. XXX 0000
XXXXX, XX 00000-0000 XXXXX, XX 00000
1. SECURITY INTEREST. To secure the payment and performance of each and every
debt, liability and obligation of every type and description which the Debtor
may now or at any time owe to the Secured Party, whether now existing or
hereafter arising, direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, independent,
joint, several or joint and several, including, but not limited to those
notes under Loan Agreement, dated July 25, 1996, (all such debts, liabilities
and obligations being herein collectively referred to as the "Obligations"),
the Debtor grants the Secured Party a security interest (the "Security
Interest") in the following property (the "Collateral"):
Machinery and equipment, rental inventories, new inventories other
than those supplied by Xxxx Deere, and attachments to those inventories,
and non-Xxxx Deere parts, now owned or hereafter acquired;
All accounts, including but not limited to land contract for deed
rights, other rights to payment, and general intangibles of the Debtor,
investments, together with all rights, liens, security interests and
other interests which the Debtor may at any time have by law or
agreement against any account debtor or obligor, and any proceeds of the
above, whether now owned or hereafter acquired;
Assets owned or acquired by Debtor, located in Texas, including,
without limitation, all inventory, parts, used equipment, new
equipment, rental fleet, attachments, and work in process owned by Mega
Equipment Company wherever located together with the fixed assets of
the business which shall include, without limitation, all motor
vehicles, tools, shop equipment, supplies, furniture, computers, office
equipment, computer software, and fixtures, together with all
trademarks and tradenames (if any), customer lists and records,
and goodwill.
Proceeds of the above whether now owned or hereafter acquired.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Debtor represents,
warrants and agrees as follows:
a. The Debtor is a North Dakota corporation and the mailing address
of the Debtor's chief executive office is shown at the beginning of this
Agreement. The Debtor shall give the Secured Party prior written notice of
any change in such address or the Debtor's name. The Debtor has authority to
execute and perform this Agreement.
JULY 25, 1996 1 SECURITY AGREEMENT
b. The Debtor is the owner of the Collateral, or will be the owner
of the Collateral hereafter acquired, free of all security interests, liens
and encumbrances. The Debtor shall not permit any security interest, lien or
encumbrance, other than the Security Interest and any other security interest
of the Secured Party, to attach to any Collateral without the prior written
consent of the Secured Party. The Debtor shall defend the Collateral against
the claims and demands of all persons other than the Secured Party, and shall
promptly pay all taxes, assessments and other government charges upon or
against the Debtor, and at the request of the Secured Party, shall furnish
the Secured Party with a statement or statements executed by all persons who
have or claim an interest in the real estate, in form acceptable to the
Secured Party, which statement or statements shall provide that such persons
consent to the Security Interest.
c. The Debtor shall not sell or otherwise dispose of any Collateral or
any interest therein without the prior written consent of the Secured Party,
except that, until the occurrence of an Event of Default or the revocation by
the Secured party of the Debtor's right to do so, the Debtor may sell any
Collateral constituting inventory in the ordinary course of business at
prices constituting the fair market value thereof. For purposes of this
Agreement, a transfer in partial or total satisfaction of a debt, obligation
or liability shall not constitute a sale or lease in the ordinary course of
business.
d. Each account, instrument, chattel paper, other right to payment and
general intangible constituting Collateral is, or will be when acquired, the
valid, genuine and legally enforceable obligation of the account debtor or
other obligor named therein or in the Debtor's records pertaining thereto as
being obligated to pay such obligation, subject to no defense, setoff or
counterclaim. The Debtor shall not, without the prior written consent of the
Secured Party, agree to any material modification or amendment of any such
obligation or agree to any cancellation or subordination of any such
obligation.
e. The Debtor shall (I) keep all tangible Collateral in good condition
and repair, normal depreciation excepted; (ii) from time to time replace
any worn, broken or defective parts thereof; (iii) promptly notify the
Secured Party of any loss of or material damage to any Collateral or of any
adverse change in the prospect of payment of any account, instrument, chattel
paper, other right to payment or general intangible constituting Collateral;
(iv) not permit any violation of any federal, state or local law; (v) keep
all tangible Collateral insured in such amounts, against such risks and in
such companies as shall be acceptable to the Secured Party, with clauses in
favor of the Secured party as LIENHOLDER/LOSS PAYEE to the extent of its
interest in form acceptable to the Secured Party (including without limitation
a provision for at least 10 days' prior written notice to the Secured Party
of any cancellation or modification of such insurance), and deliver policies or
certificates of such insurance to the Secured Party; (vi) at the Debtor's
principal place of business, keep accurate and complete records pertaining to
the Collateral and the Debtor's financial condition, business and property,
and submit to the Secured Party such periodic reports concerning the Collateral
and the Debtor's financial condition, business and property as the Secured
Party may from time to time request; (vii) at all reasonable times permit the
Secured Party and its representatives to examine and inspect any Collateral,
and to examine, inspect and copy the Debtor's records pertaining to the
Collateral and the Debtor's financial condition, business and property;
(viii) at the Secured Party's request, promptly execute, endorse and deliver
such financing statements and other instruments, documents, chattel paper and
writings and take such other actions deemed by the Secured Party to be
necessary or desirable to establish, protect,
JULY 25, 1996 2 SECURITY AGREEMENT
perfect or enforce the Security Interest and the rights of the Secured Party
under this Agreement and applicable law including, but not limited to, pay
all costs of filing financing statements and other writings in all public
offices where filing is deemed by the Secured Party to be necessary or
desirable.
3. COLLECTION RIGHTS. At any time before or after an Event of Default, the
Secured party may, and at the request of the Secured Party the Debtor shall,
promptly notify any account debtor or obligor of any account, instrument,
chattel paper, other right to payment or general intangible constituting
Collateral that the same has been assigned to the Secured Party and direct
such account debtor or obligor to make all future payments to the Secured
Party.
4. LIMITED POWER OF ATTORNEY. If the Debtor at any time fails to perform or
observe any agreement herein, the Secured Party, in the name and on behalf
of the Debtor or, at its option, in its own name, may perform or observe such
agreement and take any action which the Secured Party may deem necessary or
desirable to cure or correct such failure. The Debtor irrevocably authorizes
Secured Party and grants the Secured Party a limited power of attorney in the
name and on behalf of the Debtor or, at its option, in its own name, to
collect, receive, receipt for, create, prepare, complete, execute, endorse,
deliver and file any and all financing statements, insurance applications,
remittances, instruments, documents, chattel paper and other writings, to
grant any extension to, compromise, settle, waive, notify, amend, adjust,
change and release any obligation of any account debtor, obligor, insurer or
other person pertaining to any Collateral, and to take any other action
deemed by the Secured Party to be necessary or desirable to establish,
perfect, protect or enforce the Security Interest. All of the Secured Party's
advances, charges, costs and expenses, including without limitation reasonable
attorneys' fees, in connection with the Obligations and in the protection and
exercise of any rights or remedies hereunder, together with interest thereon
at the highest rate then applicable to any of the Obligations, shall be
secured hereunder and shall be paid by the Debtor to the Secured Party on
demand.
5. EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default": (a) any default in the payment or
performance of any of the Obligations; or (b) any default under the terms of
this Agreement or any other note, obligation, agreement, mortgage or other
writing heretofore, herewith or hereafter given to or acquired by the Secured
Party to which the Debtor or any maker, endorser, guarantor or surety of any
of the Obligations or any other person providing security for any of the
Obligations or for any guaranty of any of the Obligations is a party; or (c)
the insolvency, death, dissolution, liquidation, merger or consolidation of
the Debtor or any such maker, endorser, guarantor, surety or other person; or
(d) any appointment of a receiver, trustee or similar officer of any property
of the Debtor or any such maker, endorser, guarantor, surety or other person;
or (e) any assignment for the benefit of creditors of the Debtor or any such
maker, endorser, guarantor, surety or other person; of (f) any commencement
of any proceeding under any bankruptcy, insolvency, dissolution, liquidation
or similar law by or against the Debtor or any such maker, endorser,
guarantor, surety or other person; or (g) the sale, lease or other
disposition (whether in one transaction or in a series of transactions) to
one or more persons other than in the ordinary course of business of all or a
substantial part of the assets of the Debtor or any such maker, endorser,
guarantor, surety or other person; or (h) the death, dissolution or
liquidation of any partner of the Debtor or any such maker, endorser,
guarantor, surety or other person; or (i) the entry of any judgment against
the Debtor or any such maker, endorser, guarantor, surety or other person
which is not
JULY 25, 1996 3 SECURITY AGREEMENT
discharged in a manner acceptable to the Secured Party within 30 days after
such entry; or (j) the issuance or levy of any writ, warrant, attachment,
garnishment, execution or other process against any property of the Debtor or
any such maker, endorser, guarantor, surety or any other person; or (k) the
attachment of any tax lien to any property of the Debtor or any such maker,
endorser, guarantor, surety or other person; or (l) any statement,
representation or warranty made by the Debtor or any such maker, endorser,
guarantor, surety or other person (or any representative of the Debtor or any
such maker, endorser, guarantor, surety or other person) to the Secured Party
at any time shall be incorrect or misleading in any material respect when
made; or (m) there is a material adverse change in the condition (financial
or otherwise), business or property of the Debtor or any such maker, endorser,
guarantor, surety or other person; or (n) the Secured Party shall in good
faith believe that the prospect for due and punctual payment or performance
of any of the Obligations, this Agreement or any other note, obligation,
agreement or mortgage heretofore, herewith or hereafter given to or acquired
by the Secured Party in connection with any of the Obligations is impaired.
6. REMEDIES. Upon the occurrence of any Event of Default and at any time
thereafter, the Secured Party may exercise any one or more of the following
rights and remedies: (a) declare all Obligations to be immediately due and
payable, and the same shall thereupon be immediately due and payable, without
presentment or other notice or demand, all of which are hereby waived by the
Debtor; (b) require the Debtor to assemble all or any part of the Collateral
and make it available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties; (c) exercise
and enforce any and all rights and remedies available upon default under this
Agreement, the Uniform Commercial Code, and any other applicable agreements
and laws. If notice to the Debtor of any intended disposition of Collateral
or other action is required, such notice shall be deemed reasonably and
properly given if mailed by regular or certified mail, postage prepaid, to
the Debtor at the address stated at the beginning of this Agreement or at the
most recent address shown in the Secured Party's records, at least 10 days
prior to the action described in such notice. The Debtor consents to the
personal jurisdiction of the state and federal courts located in the State of
North Dakota in connection with any controversy related to this Agreement,
the Collateral, the Security Interest or any of the Obligations, waives any
argument that venue in such forums is not convenient, and agrees that any
litigation initiated by the Debtor against the Secured Party in connection
with this Agreement, the Collateral, the Security Interest or any of the
Obligations shall be venued in either the District Court of North Dakota, or
the United States District Court, District of North Dakota.
7. MISCELLANEOUS. A carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement. This Agreement cannot be
waived, modified, amended, abridged, supplemented, terminated or discharged
and the Security Interest cannot be released or terminated, except by a
writing duly executed by the Secured Party. A waiver shall be effective only
in the specific instance and for the specific purpose given. A partial waiver
of any condition herein or breach hereof shall not be construed as a complete
waiver of such condition or breach. No delay or failure to act shall preclude
the exercise or enforcement of any of the Secured Party's rights or remedies.
All rights and remedies of the Secured Party shall be cumulative and may be
exercised singularly, concurrently or enforcement of any one such right or
remedy shall not be a condition to or bar the exercise or enforcement of any
other. This Agreement shall be binding upon and inure to the benefit of the
Debtor and the Secured Party and their respective successors and assigns and
shall take effect when executed by the Debtor and delivered to the Secured
Party,
JULY 25, 1996 4 SECURITY AGREEMENT
and the Debtor waives notice of the Secured Party's acceptance hereof. This
Agreement shall be freely assignable by the Secured Party. If any provision
or application of this Agreement is held unlawful or unenforceable in any
respect, such illegality or unenforceability shall not affect other
provisions or applications which can be given effect, and this Agreement
shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation,
payment and performance of the Obligations. This Agreement shall be governed
by and construed in accordance with the laws of the State of North Dakota.
THE DEBTOR REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE DEBTOR HAS
READ ALL OF THIS AGREEMENT AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
AGREEMENT. THE DEBTOR ALSO AGREES THAT COMPLIANCE BY THE SECURED PARTY WITH
THE EXPRESS PROVISIONS OF THIS AGREEMENT SHALL CONSTITUTE GOOD FAITH AND
SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES.
DEBTOR: RDO Equipment Co., a North Dakota corporation
(d/b/a XxXxxx County Implement, Inc., and Red River Implement, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx, President
July 31, 1996
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Secretary
July 30, 1996
JULY 25, 1996 5 SECURITY AGREEMENT
ID XX. 000
XXXXXX XXXX XX. 00000
$8,500,000.00
RDO EQUIPMENT CO.
A NORTH DAKOTA CORPORATION
d/b/a XXXXXX COUNTY IMPLEMENT, INC., AND RED RIVER IMPLEMENT, INC.
FARGO, NORTH DAKOTA
JULY 25, 1996
FOR VALUE RECEIVED, the undersigned promises to pay to the order of Ag
Capital Company, a Delaware corporation (the "Lender"), at its office in
Fargo, North Dakota, or at such other place as any present or future holder
of this Note may designate from time to time, the principal sum of (i)
$8,500,000.00, or (ii) the aggregate unpaid principal amount of all advances
of credit made by the Lender to the undersigned pursuant to this Note as
shown in the records of any present or future holder of this Note, whichever
is less, plus interest thereon from the date of each advance in whole or in
part included in such amount until this Note is fully paid. Interest will be
computed on the basis of the actual number of days elapsed and a 365-day
year, at a variable rate of Prime as such Prime Rate is defined in that
certain Loan Agreement dated July 25, 1996 by and between the undersigned and
the Lender (hereinafter, the "Loan Agreement") or at such other rate as may
be determined pursuant to the terms of such Loan Agreement. Interest is
payable on the first day of each month and at maturity. Payments received
fifteen (15) or more calendar days after the scheduled repayment date are
subject to a late payment penalty equal to 1% of the past due amount but not
less than $25.00 per late payment, subject to the maximum amount allowable by
North Dakota law. This Note matures on December 1, 1996.
Nothing contained in this Note or any other agreement or writing shall
limit or impair the right of the holder hereof to demand payment of this Note
at any time if there is a default under the Loan Agreement or any other
agreement between the undersigned and the Lender. The undersigned acknowledge
and understand that this Note is cross-collateralized with all loans of
Borrower, and it is agreed and acknowledged by the undersigned that a default
in any of the terms and conditions of any loans to Borrower, shall constitute
a default under this Note. In the event there is a default by the undersigned
in the terms and conditions of any agreement with the Lender, the Lender
shall be entitled to exercise all remedies allowable by law and to accelerate
all amounts then due and owing under this Note.
The undersigned and each endorser, guarantor and surety of this Note
jointly and severally (i) agree to pay this Note; (ii) guarantee payment of
this Note; (iii) waive demand, presentment, protest, notice of dishonor and
notice of nonpayment of this Note; (iv) consent to any extension or renewal
of this Note without notice; (v) consent to the release of any of them by any
present or future holder of this Note with or without consideration or
notice; (vi) exonerate any present or future holder of this Note from any
duty or obligation to make demand on any one for payment of any security or
delivery of any guaranty for this Note or to give notice to anyone of
nonpayment thereof or to collect or sell the same; (vii) consent to the
extension, renewal, exchange, subordination, surrender or release of any
security for this Note by any present or future holder of this Note with or
without consideration or notice; (viii) agree that no act, omission or thing,
except full payment of this Note, which but for this provisions could act as
a release or impairment of their liability, shall in any way release, impair,
or affect the liability of any of them; (ix) agree to pay on demand all costs
and expenses of all present and future holders of this Note in connection
with this Note and any security and guaranties for this Note, including
without limitation reasonable attorneys' fees, plus interest on such amounts
at the rate set forth in this Note; and (x) consent to the personal
jurisdiction of the state and federal courts located in the State of North
Dakota in connection with any controversy related in any way to this Note or
any security or guaranty of this Note, waive any
July 25, 1996 1 Term Loan, Note No. 23640
argument that venue in such forums is not convenient, and agree that any
litigation initiated by any of them against the Lender or any other present or
future holder of this Note relating in any way to this Note or any security
or guaranty for this Note shall be venued in either the District Court of
North Dakota, or the United States District Court, District of North Dakota.
Interest on any amount under this Note shall continue to accrue, at the
option of any present or future holder of this Note, until such holder
receives final payment of such amount in collected funds in form and
substance acceptable to such holder.
No waiver of any right or remedy under this Note shall be valid unless
in writing executed by the holder of this Note, and any such waiver shall be
effective only in the specific instance and for the specific purpose given.
All rights and remedies of all present and future holders of this Note shall
be cumulative and may be exercised singly, concurrently or successively. The
undersigned, if more than one, shall be jointly and severally liable under
this Note, and the term "undersigned," wherever used in this Note, shall mean
the undersigned or any one or more of them. This Note shall be governed by
the construed in accordance with the laws of the State of North Dakota.
It is not Lender's or Borrower's intention or desire to breach any
applicable usury or maximum finance charge or interest rate law. Therefore,
if any interest rate, penalty, fee or cost provided for herein shall exceed
that which is allowed pursuant to any applicable statute or law, said amount
shall be deemed by the parties hereto to be modified so as to conform to and
equal the maximum amount allowed by said statute or law and any over payment
shall be applied against principal as of the date of such payment.
THE UNDERSIGNED REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE
UNDERSIGNED HAS READ ALL OF THIS NOTE AND UNDERSTANDS ALL OF THE PROVISIONS
OF THIS NOTE. THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE BY ANY PRESENT OR
FUTURE HOLDER OF THIS NOTE WITH THE EXPRESS PROVISIONS OF THIS NOTE SHALL
CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES.
RDO Equipment Co., a North Dakota corporation
(d/b/a XxXxxx County Implement, Inc. and Red River Implement, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx, President
July 31, 1996
By: /s/ Xxxxx X. Xxxxx
----------------------------
Xxxxx X. Xxxxx, Secretary
July 30, 1996
July 25, 1996 2 Term Loan, Note No. 23640
