CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. CoBANK, ACB Loan Agreement
Exhibit 10.1
CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
CoBANK, ACB
Borrower:
DAKOTA GROWERS PASTA COMPANY
CARRINGTON, NORTH DAKOTA
|
New Loan
|
Present Loans
|
||
| $15,000,000.00 - Seasonal Loan | $9,600,000.00 | - Term Loan | |
| [9,600,000.00] | - Letter of Credit Commitment | ||
| 6,000,000.00 | - Term Loan | ||
|
7,375,000.00
|
- Construction Term Loan | ||
| $22,975,000.00 | |||
|
Total Loans
|
||
| $15,000,000.00 | - Seasonal Loan, Note No. A637S01A | |
| 9,600,000.00 | - Term Loan, Note No. 39181NP* | |
| [9,600,000.00 | ] - Letter of Credit Commitment, Note No. 39182NP*/** | |
| 6,000,000.00 | - Term Loan, Note No. 33061 | |
|
7,375,000.00
|
– Construction Term Loan, Note No. 35062 | |
| $37,975,000.00 | – Total | |
* NP indicates a non-patronage note.
**
Note No. 39182NP will only be used to repay Note No. 39181NP.
The maximum total indebtedness hereunder will not exceed $37,975,00.00.
CoBank, ACB (the “Bank”) and Borrower agree to the above loans (the “Loans”) to the Borrower. The Borrower’s present indebtedness to the Bank and/or commitments outstanding (entitled Present Loans in the above heading) are consolidated and are made subject to all the terms and conditions of this loan agreement.
I. PURPOSE
The proceeds of the Loans shall be used as follows:
| A. |
The
Seasonal Loan shall be used for general operating purposes, and to refinance
Seasonal Loan, Note ▇▇. ▇▇▇▇▇▇▇. |
| ▇. |
▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, was used to refinance Term Loan, Note No. 39180. |
| C. |
Letter
of Credit Commitment, Note No. 39182NP shall be used in the event that the
Bank of North Dakota draws on the letter of credit in its favor in accordance
with the terms and conditions thereof. |
| D. |
Term
Loan, Note No. 33061, was used to finance the construction of the pasta
plant. |
| E. |
Construction
Term Loan, Note No. 35062, was used to finance the mill and pasta line
expansion (the “Project”). |
II. NOTES AND SECURITY
Advances under this loan agreement, together with any existing indebtedness of the Borrower to the Bank, shall be evidenced by a promissory note or notes acceptable to the Bank, and shall be secured to the extent of all collateral presently held by the Bank; including but not limited to, all real estate mortgages and security agreements, as well as a perfected first security interest in all of the Borrower’s personal property in Kentucky.
All property under lien to the Bank as security for the Loans shall be collateral for all indebtedness of the Borrower to the Bank.
III. LIMITATION ON ADVANCES
| A. |
The
total Seasonal Loan outstanding under this or any loan agreement between the
Bank and the Borrower shall not exceed the amount shown in the above heading. |
|
| B. |
Advances
on the Seasonal Loan shall not exceed the sum of the following collateral
values based on collateral reports to be submitted monthly (or more often at
Borrower’s discretion) in such form as required by the Bank: |
|
| 1. |
Eighty
percent (80%) of accounts receivable acceptable to the Bank and not older
than forty-five (45) days from the date of invoice. |
|
| 2. |
Sixty-five
percent (65%) of the value under generally accepted accounting principles
(GAAP) of owned inventories of grain, semolina, flours, millfeeds,
ingredients, and finished pasta. |
|
| C. |
Advances
on Letter of Credit Commitment, Note No. 39182NP shall support a letter of
credit issued by the Bank in favor of Bank of North Dakota. The letter of credit is in a current
amount not to exceed $9,600,000. |
|
IV. INTEREST
| A. |
All
Seasonal Loan balances hereunder shall bear interest at a variable rate of
interest per annum as determined by the Bank (the “Applicable Rate”)(which
was 8.22% as of December 5, 2000), which rate may vary from time to time in
relationship to the Bank’s cost of funds; provided, however, the fixed
amounts (as defined in the “FIXED RATE SEASONAL ADVANCES AND MATURITIES”
section of this loan agreement) shall bear such rates of interest as
described in the statements. Variable
rate balances (i.e., balances other than fixed amounts) under this Paragraph
A shall be subject to Paragraph C of this Section IV. |
| B. | All outstanding Term Loan balances, excluding Note Nos. 39181NP and 39182NP, shall bear interest at a variable rate of interest per annum as determined by the Bank (the “Applicable Rate”)(which was 8.61% as of December 5, 2000); which rate may vary from time to time in relationship to the Bank’s cost of funds; provided, however, the fixed amounts (as defined in the “CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES” section of this loan agreement) shall bear such rates of interest as described in the statements. Variable rate balances (i.e., balances other than fixed amounts) under this Paragraph B shall be subject to Paragraph C of this Section IV. |
| C. | This paragraph applies to (and only to) variable rate Seasonal and Term Loan balances (excluding balances under Note Nos. 39181NP and 39182NP) . During any time that the Borrower is not in compliance with the current ratio and debt service coverage ratio conditions (as defined in Section IX., paragraphs D and F, respectively, and measured at the times specified therein), all such variable rate balances shall bear interest at a rate *** basis points (***%) above the respective Applicable Rate. During any time that the Borrower is in compliance with such current ratio and debt service coverage ratio conditions, the interest rate shall be increased or decreased (or, as applicable, not changed) in accordance with the following Incentive Interest Rate Matrix based on the Leverage Ratio (as defined in Section IX, Paragraph D and measured at the times specified therein): |
|
Incentive Interest Rate
Matrix
|
||
|
LEVERAGE RATIO
|
INCREASE / DECREASE TO
INTEREST RATE
|
CHANGE TO INTEREST RATE IN
BASIS POINTS
|
| Greater than ***% | *** | *** |
| Greater than ***% and less than or equal to ***% | *** | *** |
| Greater than ***% and less than or equal to ***% | *** | *** |
| Greater than ***% and less than or equal to ***% | *** | *** |
| Less than or equal to ***% | *** | *** |
(* - Confidential treatment requested.)
The interest rate change shall occur within one month after the Bank’s receipt of the monthly compliance report.
| D. |
The
interest rate on Term Loan, Note No. 39181NP shall be fixed to maturity at
5.71% per annum. The interest rate on
Term Loan, Note No. 39181NP, shall not be subject to Paragraph C of this
Section IV. |
| E. |
Any
outstanding draws under the Letter of Credit Commitment, Note No. 39182NP,
shall bear interest at the variable rate per annum equal to the highest prime rate, as published in The Wall Street
Journal Money Rate section, plus 200 basis points (2.0%).
Interest rate changes will take place within seven business days from
the time of publication in The Wall Street Journal. The interest rate on Letter of Credit
Commitment, Note No. 39182NP shall not be subject to Paragraph C of this
Section IV. |
| F. |
Interest
on the Loans shall be payable on the 20th day of each month and shall be
calculated on the actual number of days each Loan is outstanding on the basis
of a year consisting of 360 days, provided, however, that interest on
fixed-rate balances outstanding as of the date of this loan agreement shall
be paid on the 20th day of the first month of each calendar quarter and shall
be calculated on the actual number of days outstanding on the basis of a year
consisting of 365 days. |
V. FEES
| A. |
The
Term Loans, except for Letter of Credit Commitment, Note No. 39182NP, shall
be subject to an agency fee of 10 basis points (0.10%) on an annualized
basis, on the daily outstanding balances and commitments payable on the last
day of each calendar quarter, in arrears. |
| B. | The Letter of Credit Commitment, Note No. 39182NP shall be subject to a commitment fee of 62.5 basis points (0.625%) on an annualized basis (based on a year consisting of 360 days), on the daily outstanding commitments payable on the last day of each calendar quarter, in arrears. This commitment fee shall be on a non-patronage basis. |
VI. FIXED RATE SEASONAL ADVANCES AND MATURITIES
In accordance with and subject to the Bank’s Fixed Rate Seasonal Loan Program, and subject to the Bank’s overall program funding limitations, it is agreed the interest rate may be fixed on any seasonal loan indebtedness (the “fixed amount”) made under this loan agreement as follows:
| A. |
The
minimum fixed amount shall be $100,000. |
|
| B. |
Each
fixed amount and each selected pricing maturity date will be treated as a
separate indebtedness for interest rate designation and interest billing
purposes. |
|
| C. |
Fixed
amount pricing maturities shall not be less than 30 days nor greater than 180
days from the day of advance to be based on the maturity selection of the
Borrower; however, all fixed amounts shall have pricing maturities no later
than June 30, 2002. |
|
| D. |
The
Borrower may receive same day interest rate quotes if a firm request is
placed and accepted by the Bank before 12:01 p.m. (Central Time) on any
business day. A firm request is one
placed by telephone or in writing by an authorized representative of the
Borrower. |
|
| E. |
Fixed
amounts shall be automatically converted to the variable rate seasonal loan
at maturity. |
|
| F. |
Fixed
amounts cannot be repaid or repriced by the Borrower prior to their
respective pricing maturity dates without being subject to prepayment
penalties. Such penalties shall be
determined according to a methodology specified by the Bank which preserves
the Bank’s yield on the fixed amount prepaid or repriced and which is based
upon the difference between the Bank’s cost of like funds to pricing maturity
at the time of prepayment and the existing fixed rate on the fixed amount. |
|
| G. |
Each
fixed amount shall be summarized in the Daily Activity Statement (the
“statement”) to the Borrower. Each
statement shall reference and confirm at least the following: |
|
| 1. |
Note
No. A637S01A. |
|
| 2. |
The
fixed amount and its Contract No. |
|
| 3. |
The
rate of interest. |
|
| 4. |
The
effective date. |
|
| 5. |
The
pricing maturity date. |
|
| H. |
The
Borrower agrees that the statement shall verify the understanding reached by
the parties, and that the Borrower shall be bound by the statement without
its signature; provided, however, if there is an error reflected in the
statement, the Borrower shall notify the Bank of the error within five days
after receipt of the statement and an appropriate correction will be made. |
|
| I. |
If
there is a question on the interest rate applicable to the fixed amount, the
rate as established by the Bank for such amounts shall be controlling. |
|
| J. | Section IV., paragraph C. shall not apply to this Section VI., “FIXED RATE SEASONAL ADVANCES AND MATURITIES.” | |
VII. CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES
In accordance with and subject to the Bank’s Customer Managed Fixed Rate Term Program and subject to the Bank’s overall program funding limitations, it is agreed the interest rate may be fixed on any term loan indebtedness (the “fixed amount”) under this loan agreement as follows:
| A. |
The
minimum fixed amount shall be $1,000,000. |
|
| B. |
Each
fixed amount and each selected pricing maturity date shall be treated as a
separate indebtedness for interest rate designation and interest billing
purposes. |
|
| C. |
Fixed
amount pricing maturities shall be for a minimum maturity of 60 days and a
maximum of maturity. |
|
| D. |
The
Borrower shall have indebtedness under the variable rate term interest rate
program or priced maturing fixed amounts against which to apply scheduled
term loan payments as set forth in the “REPAYMENT” section of this loan
agreement. |
|
| E. |
The
Borrower’s selection of loan interest rate quotes and pricing maturities must
be communicated to the Bank by 2:00 p.m. (Central Time) on the day prior to
the fixed amount advance. If this
selection deadline is not met, maturing fixed amounts shall automatically
convert to the variable rate term loan. |
|
| F. |
Fixed
amounts cannot be repaid or repriced by the Borrower prior to their
respective pricing maturity dates without being subject to prepayment
penalties. Such penalties shall be
determined according to a methodology specified by the Bank which preserves
the Bank’s yield on the fixed amount prepaid or repriced and which is based
upon the difference between the Bank’s cost of like funds to pricing maturity
at the time of prepayment and the existing fixed rate on the fixed amount. |
|
| G. |
Each
fixed amount shall be summarized in the Daily Activity Statement (the
“statement”) to the Borrower. Each
statement shall reference and confirm the following: |
|
| 1. |
Note Nos. 33061 or 35062. |
|
| 2. |
The
fixed amount and its Contract No. |
|
| 3. |
The
rate of interest. |
|
| 4. |
The
effective date. |
|
| 5. |
The
pricing maturity date. |
|
| H. |
The
Borrower agrees that the statement shall verify the understanding reached by
the parties, and that the Borrower shall be bound by the statement without
its signature; provided, however, if there is an error reflected in the
statement, the Borrower shall notify the Bank of the error within five days
after receipt of the statement and an appropriate correction will be made. |
|
| I. |
If
there is a question on the interest rate applicable to the fixed amount, the
rate as established by the Bank for such amounts shall be controlling. |
|
| J. |
Section
IV., paragraph C. shall not apply to this Section VII., “CUSTOMER MANAGED
FIXED RATE TERM ADVANCES AND MATURITIES.” |
|
VIII. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
| A. |
The
Borrower and its subsidiary Primo Piatto, Inc. (PPI) are duly organized,
existing and in good standing under the laws of North Dakota and Minnesota,
respectively. They have the power to
own their properties and to carry on their business as now being conducted. They are duly qualified to do business and
are in good standing in each jurisdiction in which the transaction of their
business makes such qualification necessary, except where the failure to so
qualify would not have a material adverse effect on their business,
operations, or properties, taken as a whole. |
| B. |
The
Borrower has full power and authority to execute, deliver, and perform under
the terms of this loan agreement and the Borrower and PPI each has full power
and authority to execute, deliver and perform under the terms of the notes,
the security agreements, mortgages, and guaranty (collectively referred to as
the “Loan and Security Documents”) and all other documents and agreements
contemplated by this loan agreement, all of which have been duly authorized
by each respective party. |
| C. |
All
consents or approvals of any person which are necessary for, or are required
as a condition of, the execution, delivery, and performance under the terms
of the Loan and Security Documents have been obtained. |
| D. |
The
Loan and Security Documents each constitutes the legal, valid, and binding
obligation of the Borrower and PPI, enforceable against the Borrower and PPI,
in accordance with its respective terms. |
| E. |
To
the best of the Borrower’s knowledge, there are no pending legal or
governmental actions, proceedings, or investigations to which the Borrower or
PPI is a party, or to which any property of the Borrower or PPI is subject,
which might result in any material adverse change in the business or
financial condition of the Borrower or PPI, and to the best of the Borrower’s
knowledge, no such actions or proceedings are threatened or contemplated by
governmental authorities or any other person. |
| F. |
There
is no provision of the Borrower’s articles of incorporation or bylaws and, to
the best of the Borrower’s knowledge after due inquiry, no provision of any
existing real estate mortgage, indenture, lease, security agreement,
contract, note, instrument, or any other agreement or document binding on the
Borrower or PPI, or affecting their properties, which would conflict with or
in any way prevent the execution, delivery, or performance of the Loan and
Security Documents by the Borrower or PPI. |
| G. |
To
the best of the Borrower’s knowledge, the Borrower and PPI each has duly and
lawfully obtained, and is duly and lawfully maintaining in effect, all
material, licenses, certificates, permits, qualifications, authorizations,
and approvals which are required or necessary for the operation of its
business, whether federal, state, or local. |
| H. | To the best of the Borrower’s knowledge, neither the Borrower nor PPI has (1) any direct or contingent liability for any obligation of any other person and (2) any obligation to make a loan or advance to any person or to own, purchase, or acquire any stock, obligations, or securities of, or any other interests in, or to make any capital contribution to, any person. |
IX. FINANCIAL CONDITIONS
While this loan agreement is in effect, the Borrower agrees to comply with the following financial conditions:
| A. |
Cash
Patronage: The Borrower will pay cash patronage
in amounts necessary to qualify its patronage refunds as a qualified
patronage dividend as defined in the Internal Revenue Code. |
| B. |
Dividends
and Revolvement of Equities: The Borrower may not revolve, or
otherwise pay out, any dividends or owner equity if such action would cause
one or more of “FINANCIAL CONDITIONS” C., D., or E. under this loan agreement
to be in a noncompliance position, without the prior written consent of the
Bank, which consent will not be unreasonably withheld. |
| C. |
Current
Ratio: The Borrower will maintain a current ratio (current
assets divided by current liabilities) of not less than 1.35:1, measured at
each month end. |
| D. |
Leverage
Ratio: The Borrower will
maintain a leverage ratio (The sum of Long Term Liabilities minus Deferred
Taxes Payable plus the Present Value of Operating Leases divided by Net
Worth) of not greater than 1.10:1.0, measured at each month end. Long Term Liabilities may be adjusted to
reflect a current ratio of 1.35:1. |
| E. | Debt Service Coverage Ratio: The Borrower will maintain a debt service coverage ratio of not less than 1.50:1, measured for the previous twelve month period ending July 31 of each year. The debt service coverage ratio shall be calculated as follows: |
| After-tax net income | |
| Add: | Depreciation and Amortization Expense |
| Capital Retains | |
| Subtract: | Non Cash Patronage Income |
| Cash Patronage or Dividend Payable in Subsequent Fiscal Year based on the Current Fiscal Year’s Net Income | |
| Extraordinary Gains or Losses, after taxes income or expense | |
| Gain or (Loss) on Asset Sales | |
| Retains Revolved | |
| Equal to: | Adjusted Cashflows from Operations |
| Divided by: | Prior period current portion of Long Term Liabilities plus |
| Prior period current portion of Capitalized Leases | |
| Equals: | Debt Service Coverage Ratio |
X. GENERAL CONDITIONS
While this loan agreement is in effect, the Borrower agrees to comply with the following conditions:
| A. |
Eligibility
Status: The Borrower will maintain its status as an eligible
borrower as defined in the Farm Credit Act of 1971, as amended (12 U.S.C.
2129). |
| B. |
Stock
Investment: The Borrower will purchase equities
of the Bank in such amounts as prescribed by the Bank’s capital plan and any
amendments to the plan. |
| C. | Non-Patronage Loans: Term Loan, Note No. 39181NP and Letter of Credit Commitment, Note No. 39182NP shall be non-patronage loans. The Borrower foregoes any opportunity to purchase Bank equities or receive allocations of patronage earnings on Term Loan, Note No. 39181NP and Letter of Credit Commitment, Note No. 39182NP. |
| D. |
Insurance: The
Borrower and PPI will maintain: |
|
| 1. |
Business
and property insurance with financially sound insurers, in amounts sufficient
to protect the Loans. |
|
| 2. |
Flood
insurance as may be required by the Bank in accordance with applicable law
including, but not limited to, regulations of the Farm Credit Administration. |
|
| 3. |
All
appropriate grain licenses and all required grain buyers’ and warehouse
bonds. |
|
| E. |
Financial
Information: The Borrower will furnish the Bank
audited annual financial statements prepared in accordance with Generally
Accepted Accounting Principles (“GAAP”), and acceptable auditors’ reports,
within 120 days after the end of each fiscal year, annual operating budgets
within 60 days after the end of each fiscal year; monthly financial
statements prepared in accordance with GAAP within 45 days after the end of
each month, and such other information as the Bank may request relative to
the Borrower’s business, and permit such examination of its books and records
as the Bank may specify. The Borrower
also agrees that parties preparing such financial information are authorized
to release to the Bank such financial information as the Bank may request. |
|
| F. |
Collateral
Reports: The Borrower will furnish the Bank collateral reports to
be submitted in such form and frequency as required by the Bank. |
|
| G. |
Negative
Pledge, Merger, etc.: The Borrower will not mortgage,
pledge, assign, or grant security interests in any assets to any other party
without the prior written consent of the Bank, which consent will not be unreasonably withheld, or allow to
exist any non-consensual or statutory lien or judgment against it or its
assets. The Borrower will not sell,
lease or dispose of its assets except in the ordinary course of business. The Borrower will not merge or consolidate
with any other entity, or form or create any new subsidiary, or purchase all
or a material part of the assets of any person or entity, or commence
operations under any other name or organization. |
|
| H. |
Corporate
Documents: The Borrower will not amend its
articles of incorporation, by-laws, growers agreement, nor its grain delivery
payment policies without the prior written consent of the Bank, which consent
will not be unreasonably withheld. |
|
| I. |
Environmental
Representations, Conditions, and Indemnity Clause: Except
as disclosed in writing to the Bank, the Borrower and PPI represents and
agrees to the following: |
|
| 1. |
Hazardous
Material Notice: The Borrower represents that it has
not received a notice from any governmental agency or other persons nor is
there any present or threatened suit, investigation, or other proceeding,
with regard to Hazardous Materials (defined in paragraph 7 below) on, in, or
affecting its owned or leased property.
It shall immediately give the Bank oral and written notice if it
receives such a notice. |
|
| 2. |
No
Violation of Environmental Laws: The Borrower has not and will not
violate any federal, state, or local environmental laws relating to or
affecting its owned or leased property, which violation would have a material
affect on the Borrower’s business or materially affects the value of the
collateral. |
|
| 3. |
No
Releases of Hazardous Material: There has been no release, nor shall
the Borrower permit any release, of such nature requiring notification to
proper authorities of any Hazardous Material onto the Borrower’s owned or
leased property. |
|
| 4. |
Storage
Tank Registered; No Leaks: All above ground and underground
storage tanks have been duly registered with all applicable federal, state
and local government authorities. The
Borrower has no knowledge of any leaks from any of its above ground or
underground storage tanks. |
|
| 5. |
Investigation
of Released Hazardous Materials: If there is a suspected release of
Hazardous Materials, the Borrower shall, at its own expense conduct all
investigations, testing, and other actions, including an environmental audit
made at the Bank’s request, necessary to determine the extent (if any) of the
release of Hazardous Materials and to clean up and remove all Hazardous
Material in accordance with environmental laws. |
|
| 6. |
Indemnity: The
Borrower agrees to indemnify, hold harmless, and defend the Bank against all
claims of whatever kind (including attorneys’, consultants’, and experts’
fees) paid or asserted against the Bank as a direct result of the Borrower’s
violation of any environmental law.
This indemnity shall continue for the benefit of the Bank after the
termination of this loan agreement or other loan or security documents. |
|
| 7. | Definition: Hazardous Material is defined as any toxic, radioactive, or hazardous substance, material, waste, pollutant, emission, or contaminant, including but not limited to: (a) asbestos, (b) urea formaldehyde, (c) the group of organic compounds known as polychlorinated biphenyls (PCBs), (d) any petroleum product and byproduct including but not limited to gasoline, fuel oil, crude oil, and the various constituents of such products, and (e) pesticides, fertilizers, and other agricultural chemicals. |
XI. REPAYMENT
The indebtedness arising from the Loans shall be repaid as follows:
| A. |
The
Seasonal Loan, Note No. A637S01A, of not to exceed $15,000,000 shall mature
on December 31, 2001; provided, however, the Borrower shall make such
payments from time to time as may be required to maintain the loan within the
limits set forth in the “LIMITATION ON ADVANCES” section of this loan
agreement; provided further, any balances outstanding under the fixed rate
seasonal loan provisions shall mature as specified in the statement. Any outstanding fixed amounts as of
December 31, 2001 shall be repaid no later than June 30, 2002. |
| B. |
The
present Term Loan, Note No. 39181NP, of $9,600,000, shall be repaid by annual
principal payments of One Million Two Hundred Thousand Dollars ($1,200,000)
each, to be remitted to the Bank on or before September 30 of each year. All outstanding balances shall be repaid
by September 30, 2008. |
| C. |
Advances
made in support of Letter of Credit Commitment, Note No. 39182NP, of not to
exceed $9,600,000, shall be payable on demand. |
| D. | The present Term Loan, Note No. 33061, of $6,000,000 shall be repaid by quarterly principal payments of Six Hundred Eighty-Five Thousand Dollars ($685,000) each, to be remitted to the Bank on or before March 31, June 30, September 30, and December 31 of each year, commencing on September 30, 2001; provided, however, that if the Borrower is not in default, it shall not be required to make payments that would accelerate the repayment of fixed interest rate balances. All outstanding balances shall be repaid by December 31, 2004. |
| E. | The present Construction Term Loan, Note No. 35062, of $7,3750,000 shall be repaid by quarterly principal payments of Six Hundred Twenty-Five Thousand Dollars ($625,000) each, to be remitted to the Bank on or before March 31, June 30, September 30, and December 31 of each year; provided, however, that if the Borrower is not in default, it shall not be required to make payments that would accelerate the repayment of fixed interest rate balances. All outstanding balances shall be repaid by December 31, 2004. |
In the absence of instructions from the Borrower, or if the Borrower is in default, the Bank, at its discretion, may apply repayments to the reduction of any of the indebtedness outstanding between the Bank and the Borrower.
XII. LATE FEE PENALTY
Payments received twenty (20) 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 transaction.
XIII. EXPIRATION
The unadvanced portion of the Loans shall be cancelled as indicated below; provided, however, the Bank may, at its option, extend the expiration date of the Loans and the maturity date of the Seasonal Loan without notice to or consent of the Borrower.
Seasonal
Loan, Note No. A637S01A - December 31, 2001.
Letter of Credit Commitment, Note No. 39182NP - December 31, 2008, subject to
decreased amounts provided for in the letter of credit.
XIV. REINSTATEMENT
In order to facilitate repayments and reborrowings under this loan agreement, the Bank is authorized to reinstate all sums repaid on the Seasonal Loan through the expiration date specified in this loan agreement; provided, however, that the total amount outstanding under this loan agreement shall not exceed the face amount of the Seasonal Loan; and provided, further, that the right of the Borrower to such reinstatement may be denied and cancelled at any time at the option of the Bank.
XV. DEFAULT PROVISION
If the Borrower shall fail to pay when due any amount on any of the Loans under this loan agreement, or on any other indebtedness of the Borrower to the Bank, or fail to observe or perform any of the provisions or representations of this loan agreement, or of any security agreement, mortgage, or other security document, or shall be subject to the jurisdiction of a bankruptcy court whether by a voluntary filing or involuntary action, or shall be in default of the Note Purchase Agreement executed by Borrower dated as of July 15, 1998, or any of the documents evidencing such Note Purchase Agreement or securing the obligation thereunder, the Borrower shall be in default. When the Borrower is in default, the Bank may declare by written notice to the Borrower that the Loans and other indebtedness are immediately due and payable. The Bank may then terminate its commitment to lend and cancel any reinstatement rights provided to the Borrower under this loan agreement, and proceed to enforce payment and exercise any or all of the rights afforded to the Bank by law or agreement. Upon demand, and as permitted by law, the Borrower shall reimburse the Bank for all attorneys’ fees and costs incurred by the Bank in protecting or enforcing its rights or collateral, including reasonable attorneys’ fees incurred by the Bank in a bankruptcy or receivership proceeding or in enforcing any judgment against the Borrower.
XVI. ACCEPTANCE
This loan agreement is the full agreement under the terms and conditions of the Loans. It shall not be modified except in writing, and shall not become effective unless the Borrower shall, within 90 days from date, signify its acceptance of these terms and conditions by signing and returning a copy of this loan agreement to the Bank.
BY DIRECTION of the loan committee this 5th day of December, 2000.
CoBank, ACB
By ___________________________________
Its ___________________________________
ACCEPTED AND AGREED TO:
DAKOTA GROWERS PASTA COMPANY
CARRINGTON, NORTH DAKOTA
By __________________________________
Its _________________________________
Date ________________________________
ACKNOWLEDGED
BY AND AGREED TO
AS TO SECTION VIII; AND SECTION X.,
PARAGRAPHS D. AND I.:
PRIMO PIATTO, INC.
NEW HOPE, MINNESOTA
By _________________________________
Its _________________________________
Date _______________________________
NONNEGOTIABLE NOTE OF
CARRINGTON, NORTH DAKOTA
Note No. A637S01A
| $15,000,000.00 | December 5, 2000 |
For value received, the undersigned (“Maker”) promises to pay to CoBank, ACB, (the “Bank”), at its office in the City of Denver, Colorado, the sum of Fifteen Million and no/100 Dollars ($15,000,000.00) with interest on the unpaid balance at a variable rate of interest which may increase or decrease as the Bank may, from time to time, determine as provided in the Loan Agreement of even date between the Maker and the Bank. The unpaid balance of this note, with accrued interest, and required equity purchases, may be paid at any time subject to a prepayment penalty, if any, in accordance with the terms of the Loan Agreement between the Bank and Maker.
This note shall at all times evidence and constitute prima facie proof of the indebtedness of the Maker to the Bank or its successors or assigns, of such amount of money (not in excess of the amount of the principal indebtedness stated above plus accrued interest and required equity purchases) as shown to be owing by the records of the Bank, or its successors or assigns.
In the event that suit is brought on this note, the Maker agrees to pay such reasonable attorneys’ fees and costs of collection as permitted by law to be charged.
The Maker hereby waives presentment for payment, demand, protest, notice of protest, and notice of dishonor and nonpayment of this note.
If requested by the Bank, its successors or assigns, the Maker agrees to deliver in substitution for this note, a negotiable note for the amount of the unpaid balance of Maker’s indebtedness, plus accrued interest and required equity purchases.
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DAKOTA
GROWERS PASTA COMPANY |
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| By___________________________ | |
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Its President |
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| By___________________________ | |
| Its Secretary |