Exhibit 10.21
PROMISSORY NOTE
(Renewal Note)
(Variable Rate, Revolving Loan)
Not to Exceed $11,100,000.00 Sioux Falls, South Dakota
January 1, 2003
FOR VALUE RECEIVED, NORTHERN LIGHTS ETHANOL, LLC, a South Dakota.
Limited Liability Company ("Borrower"), hereby promises to pay to the order of
U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Lender", which
term shall include any future holder hereof), at 000 X. Xxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxx Xxxxxx, or at such other place as Lender may from time-to-time
designate in writing, in lawful money of the United States of America, the
principal sum of Eleven Million One Hundred Thousand & 00/100 Dollars
($11,100,000.00) or so much thereof as may be advanced hereunder, including all
amounts due or incurred by Borrower in accordance with the terms of the Loan
Agreement between Borrower and Lender dated as of July 11, 2001, or due or
incurred by Borrower under the terms of any other Loan Document as defined in
such Loan Agreement.
PARTIAL RENEWAL OF LOAN. This Promissory Note partially supercedes and
replaces that Promissory Note dated July 11, 2001, in the original principal
amount of $31,100,000.00 which Borrower delivered to Lender pursuant to the Loan
Agreement between Borrower and Lender dated as of July 11, 2001, (the "Prior
Note"). The original principal amount of this Note represents Eleven Million One
Hundred Thousand Dollars ($11,100,000.00) of the unpaid principal balance of the
Prior Note after application of all payments made by Borrower thereunder.
CALCULATION AND PAYMENT OF INTEREST. All outstanding principal due
hereunder shall bear interest at an annual rate equal to one percent (1%) plus
the prime rate announced by Xxxxxx (the "Index"). The interest rate shall be
adjusted each time that the Index changes. Lender will strive to inform Borrower
of each change in the Index, but each adjustment in the Index is effective
whether or not Lender informs Borrower of such change. The principal amount of
this Promissory Note shall be amortized over a period of ten (10) years (120
months) commencing January 1, 2003. Payments of all interest accrued hereunder
and amortized principal shall be made March 31, June 30, September 30 and
December 31 of each year unless such day is not a Business Day as defined in the
Loan Agreement (in which case the Business Day which immediately follows such
day shall apply) (the "Quarterly Payment Date"). The first Quarterly Payment
Date shall be March 31, 2003, and each Quarterly Payment Date thereafter until
December 31, 2007 (the "Maturity Date"), and the amount of each payment is
subject to adjustment as set forth hereafter. Xxxxxx and Xxxxxxxx agree that the
Index applicable on the date of this Note shall be Four and One Quarter percent
(4.25%), producing an original effective interest rate hereunder of Five and One
Quarter percent (5.25%). Interest shall be calculated on a 365/360 simple basis;
that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balanced, multiplied by the actual
number of days the principal balance is outstanding. As of March 31, 2003, and
each March 31 thereafter the quarterly installment of principal and interest
hereunder shall be adjusted so as to amortize the then outstanding principal
balance under this Note over the remaining balance of the
Amortization Period. In addition to the foregoing payments, Borrower shall pay
Lender all interest accrued under the Prior Note (or prepay interest which shall
accrue), as well as any nonprincipal item accrued under such Prior Note, if any,
through December 31, 2002, not later than the close of such Business Day.
PAYMENT IN FULL AT MATURITY. The total unpaid principal amount and all
interest thereon and any other amount due hereunder shall be payable on the
Maturity Date. THIS NOTE REQUIRES A BALLOON PAYMENT.
PAYMENTS. All payments under this Note shall be made in immediately
available funds. In the event there is no outstanding Event of Default, all
payments made hereunder shall be credited first to accrued interest, next to
unpaid principal, and next, in such order as Lender may determined in its sole
and absolute discretion, to other fees, charges, or costs and expenses payable
by Borrower under this Note or in connection with any other Loan Document.
PREPAYMENTS. Borrower may prepay this Note in whole or in part at any
time, and if in part from time-to-time, during the entire term of this Note,
without penalty or premium. No prepayment shall reduce the amount of any
scheduled payment.
MANDATORY PREPAYMENTS. Borrower shall make mandatory prepayments of the
principal amount of the Loan as mandated by Xxxxxxxx's Excess Cash Flow from
time-to-time, as defined and provided for in Schedule V of the Loan Agreement.
Prepayments shall not reduce the amount of any scheduled payments due hereunder.
COLLATERAL; COORDINATION WITH LOAN AGREEMENT. This Note is within the
definition of the "Note" in the Loan Agreement, and is subject to the additional
terms and conditions set forth in the Loan Agreement and the Loan Documents
referred to therein. This Note is secured by a Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Financing Statement dated as of July
11, 2001, on the Project, as well as other collateral described in the Loan
Agreement and the other Loan Documents. Capitalized terms not defined herein
shall have the meaning given such terms in the Loan Agreement.
LATE PAYMENT; GRACE PERIOD. If a payment due hereunder is not made
within five (5) days after the date when due, Borrower shall pay to Lender a
late payment charge of Five Hundred Dollars ($500.00) to compensate Lender for a
portion of the cost related to handling the overdue payment. After any Event of
Default, as defined in the Loan Agreement, then the entire principal sum
evidenced by this Note, together with all accrued and unpaid interest, shall, at
the option of the holder hereof, bear interest at the rate per annum (the
"Default Rate") equal to 3% in excess of the rate of interest per annum which
would otherwise be payable hereunder, and become immediately due and payable
without further notice (except as provided in the Loan Agreement), demand or
presentment for payment, and without any relief whatever from any valuation or
appraisement laws.
PAYMENT OF OTHER ITEMS. If Borrower defaults under any of the terms of
this Note, Borrower shall pay all reasonable costs and expenses, including
without limitation attorneys' fees (including any service tax thereon) and
costs, incurred by Xxxxxx in enforcing this
Note immediately upon Xxxxxx's demand, whether or not any action or proceeding
is commenced by Lender. Without limiting the generality of the preceding
sentence, such costs and expenses shall include all attorneys' fees and costs
incurred by Lender in connection with any federal or state bankruptcy,
insolvency, reorganization, or other similar proceeding by or against Borrower
or any surety, guarantor or endorser of this Note which in any way affects
Xxxxxx's exercise of its rights and remedies under this Note or under the Loan
Agreement or any other Loan Document. Maker hereby stipulates that Lender is a
"regulated lender" within the meaning of SDCL 54-3-13 and other applicable South
Dakota statutes.
NO OFFSET. No indebtedness evidenced by this Note shall be offset by
all or part of any claim, cause of action, or cross-claim of any kind, whether
liquidated or unliquidated, which Borrower now has or may hereafter acquire or
allege to have acquired against Lender. To the fullest extent permitted by law,
Borrower waives the benefits of any applicable law, regulation, or procedure
which provides, in substance, that where cross demands for money exist between
parties at any point in time when neither demand is barred by the applicable
statute of limitations, and an action is thereafter commenced by one such party,
the other party may assert the defense of payment in that the two demands are
compensated so far as they equal each other, notwithstanding that an independent
action asserting the claim would at the time of filing the response be barred by
the applicable statute of limitations.
CERTAIN BORROWER WAIVERS. Borrower waives presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
and any lack of diligence or delays in collection or enforcement of this Note.
Xxxxxxxx agrees that this Note, or any payment hereunder, may be extended from
time-to-time, and Xxxxxxxx consents to the release of any party liable for the
obligation evidenced by this Note, the release of any of the security for this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of Borrower.
APPLICABLE LAW. This note shall be construed under and governed by the
laws of the State of South Dakota, without giving effect to conflict of laws or
principles thereof, but giving effect to federal laws of the United States
applicable to national banks. Whenever possible, each provision of this note and
any other statement, instrument or transaction contemplated hereby or relating
hereto, shall be interpreted in such manner as to be effective and valid under
such applicable law, but, if any provision of this note or any other statement,
instrument or transaction contemplated hereby or relating hereto shall be held
to be prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
note or any other statement, instrument or transaction contemplated hereby or
relating hereto.
NO WAIVER; CERTAIN MISCELLANEOUS PROVISIONS. Failure to exercise any
option provided herein shall not constitute a waiver of the right to exercise
the same in the event of any subsequent default. No modification or waiver by
Lender of any of the terms of this Note shall be valid or binding on Lender
unless such modification or waiver is in writing and signed by Xxxxxx. Without
limiting the generality of the preceding sentence, no delay, omission
or forbearance by Lender in exercising or enforcing any of its rights and
remedies under this Note shall constitute a waiver of such rights or remedies.
Xxxxxx's rights and remedies under this Note are cumulative with and in addition
to all other legal and equitable rights and remedies which Lender may have in
connection with the Loan. The headings of paragraphs of this Note are for
convenience of the parties only and shall not be used in interpreting this Note.
If this Note is lost, stolen, or destroyed, upon Xxxxxxxx's receipt of a
reasonably satisfactory indemnification agreement executed by Xxxxxx, or if this
Note is mutilated, upon Xxxxxx's surrender of the mutilated Note to Borrower,
Borrower shall execute and deliver to Lender a new promissory note which is
identical in form and content to this Note to replace the lost, stolen,
destroyed or mutilated Note. Time is of the essence in the performance of each
provision of this Note by Xxxxxxxx.
AT THE OPTION OF LENDER, THIS NOTE MAY BE ENFORCED IN ANY FEDERAL COURT
OR SOUTH DAKOTA STATE COURT SITTING IN SIOUX FALLS, SOUTH DAKOTA; AND BORROWER
CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT BORROWER COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS NOTE,
LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
BORROWER AND XXXXXX EACH IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR ANY
OF THE LOAN DOCUMENTS (AS DEFINED IN THE LOAN AGREEMENT) OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF. Xxxxxxxx has executed this Note as of the date
first above written
NORTHERN LIGHTS ETHANOL, LLC
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxx
Its: Chairman of the Board
