Exhibit 10.4
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$5,000,000.00
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Dated: Effective May 31, 2005
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Carrington, ND
PROMISSORY
NOTE
FOR VALUE RECEIVED, the undersigned,
DNA Dreamfields Company, LLC, an Ohio limited liability company
(hereinafter “Borrower”), hereby agrees and promises to
pay to the order of Dakota Growers Pasta Company, Inc., a North
Dakota corporation or its assigns (“Lender”) at One
Pasta Avenue, Carrington, North Dakota 58421-2500, or at such
other place as Lender, or assigns, may from time to time designate,
the principal sum of FIVE MILLION and 00/100ths Dollars
($5,000,000.00), or such lesser sum as shall have been advanced by
Lender to Borrower pursuant to the terms of the 2005 Line of Credit
Loan Agreement, dated of even date herewith, by and between
Borrower and Lender (the “Loan Agreement”), together
with interest on any and all amounts remaining unpaid thereon from
time to time from the date of disbursement (computed on the basis
of actual days elapsed in a year of 360 days) at a per annum
interest rate determined in accordance with Schedule 1
hereto.
This Note shall be payable in a
monthly installment of interest only on the thirtieth day of the
month following the month hereof and continuing on the 30th day of
each succeeding month until the Note is paid in full. The
unpaid principal balance, together with all accrued and unpaid
interest, if not sooner paid, shall be due and payable in full on
May 31, 2010. In addition to the interest, payment of the
principal amounts outstanding from time to time shall commence upon
the earlier to occur of a) ten (10) months after the date of the
first advance from the Lender to the Borrower pursuant to this
Promissory Note and the associated Loan Agreement and b) the
principal amount outstanding under this Promissory Note and the
associated Loan Agreement equals the maximum loan amount of Five
Million Dollars ($5,000,000). The date of the earlier event
to occur of a) or b) above shall be referred to as the
“Principal Reduction Date”. Commencing thirty
(30) days after the end of the calendar month in which the
Principal Reduction Date occurred and continuing each month
thereafter while any principal amounts remain outstanding
hereunder, the Borrower shall pay to the Lender an amount equal to
the Net Income of Borrower as determined pursuant to generally
accepted accounting principles with respect to a particular
calendar month, less any cash or other reserve established by the
Borrower pursuant to the decision of the “Managing
Member” (as defined in the Borrower’s Amended
and
1
Restated Operating Agreement)
. The Borrower reserves the right to prepay this Note
in whole or in part without premium or penalty.
The full and timely payment of this
Note, together with Borrower’s obligations under the Loan
Agreement, shall be secured by a LLC Unit Pledge Agreement of this
date.
This Note is subject to the terms
and conditions of the Loan Agreement, which are incorporated herein
by reference and made a part hereof.
Any event of default under the Loan
Agreement shall constitute an “Event of Default”
hereunder.
The Borrower acknowledges that
payments on the various scheduled due dates are of essence and that
any failure to timely pay the principal or interest (within any
permitted grace period) permits Lender to declare this Note
immediately due and payable in cash in its entirety without any
prior notice of any kind to Borrower (subject, however, to i)
delivery of such specific
