Exhibit 10.5
CONTINUING
GUARANTEE
1.
Absolute
Guarantee. For
valuable consideration and to induce CoBank, ACB
(“CoBank”) to extend a loan or loans to DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota
(“Borrower”), of which PRIMO PIATTO, INC.
(“Guarantor”) is a wholly owned subsidiary, Guarantor
unconditionally and absolutely guarantees and promises to pay to
CoBank, or order, on demand, in lawful money of the United States,
any and all Indebtedness of Borrower to CoBank; provided
that the liability of the Guarantor hereunder shall be limited to
the maximum amount of the Indebtedness which Guarantor may
guarantee without rendering this Guarantee void or voidable under
any applicable fraudulent conveyance or fraudulent transfer
law. The word “Indebtedness” is used herein in
its more comprehensive sense, and includes any and all advances,
debts, obligations and liabilities of Borrower, including but not
limited to all principal, interest, fees, expenses and stock
subscription charges, heretofore, now or hereafter made, incurred
or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether Borrower may
be liable individually or jointly with others, or whether recovery
upon such Indebtedness may be or hereafter become barred by any
statute of limitation, or whether such Indebtedness may be or
hereafter become otherwise unenforceable.
2.
Continuing Guarantee.
No termination by Guarantor
shall be effective except by notice sent to CoBank by registered
mail naming a termination date effective not less than ninety (90)
days after the receipt of such notice by CoBank. No such
termination shall affect (i) any Indebtedness of Borrower
incurred prior to the effective date of termination or
(ii) any Indebtedness for interest, fees, expenses and/or
stock subscription charges incurred after termination related to
any Indebtedness outstanding on the effective date of
termination.
3.
Guarantee of
Payment. This
continuing guarantee is a guarantee of payment and not of
collection. The obligations hereunder are joint and several,
and independent upon the Indebtedness of Borrower, and a separate
action or actions may be brought and prosecuted against Guarantor
whether action is brought against Borrower or whether Borrower be
joined in any such action or actions; and Guarantor waives the
benefit of any statutes of limitations affecting its liability
hereunder or the enforcement thereof.
4.
Authorities of
CoBank. Guarantor
authorizes CoBank, without notice or demand and without affecting
liability hereunder, from time to time, to (a) grant
additional credit to Borrower, and renew, compromise, extend,
accelerate or otherwise change the time for payment of, or
otherwise change the terms of, the Indebtedness or any part
thereof, including increase or decrease of the rate of interest
thereon; (b) take and hold security for the payment of this
Guarantee or the Indebtedness guaranteed, and exchange, enforce,
waive and release any such security; (c) apply such security
and direct the order or manner of sale thereof as CoBank in its
discretion may determine; and (d) release or substitute any
one or more endorsers or guarantors of the Indebtedness.
5.
Waivers.
Guarantor waives any right to
require CoBank, as a condition to proceeding against Guarantor, to
(a) proceed against Borrower or any other person;
(b) proceed against or exhaust any security held from Borrower
or Guarantor; or (c) pursue any other remedy in CoBank’s
power whatsoever. Guarantor waives any defense arising by
reason of any disability or other defense or counter-claim that the
Borrower may assert on the underlying debt, including but not
limited to failure of consideration, breach of warranty, fraud,
statute of frauds, bankruptcy, statute of limitations, lender
liability, accord and satisfaction, and usury or by reason of the
cessation from any cause whatsoever of the liability of
Borrower. Guarantor waives the pleading or assertion of any
defense based on the failure of CoBank to keep Guarantor informed
of the financial and business status of Borrower, it being
expressly acknowledged by Guarantor that it is Guarantor’s
responsibility to keep so informed. Until all Indebtedness of
Borrower to CoBank shall have been paid in full, Guarantor shall
have no right of
