Exhibit 10.27
PROMISSORY NOTE
(Renewal Note)
(Fixed Rate)
|
Not to Exceed
$15,800,000.00
|
|
Sioux Falls, South Dakota
|
|
|
|
March 30, 2005
|
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 141 N. Main
Avenue, Sioux Falls, South Dakota, 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 Fifteen Million
Eight Hundred Thousand & 00/100 Dollars ($15,800,000.00) 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
N0TE . This Promissory
Note partially supercedes and replaces those Promissory Notes dated
January 1, 2003, in the original principal amounts of
$15,000,000.00 and $11,100,000.00 which Borrower delivered to
Lender pursuant to the Loan Agreement between Borrower and Lender
dated as of January 1, 2003 (the “Prior Notes”).
This Promissory Note and the $3,900,000.00 Note dated this same
date represent an aggregate $18,667,631.25 principal amount
outstanding under the Prior Notes, plus an additional $1,032,368.75
in new credit extended the date of this Promissory Note.
REPAYMENT.
Borrower agrees to pay to the order
of Lender interest at the fixed annual rate of Six and Thirty-eight
Hundredths percent (6.38%) on all outstanding amounts hereunder.
The principal amount of this Promissory Note shall be amortized
over a period of ten (10) years (120 months) commencing
March 30, 2005. Payments of all interest accrued hereunder and
amortized principal shall be made June 30, September 30,
December 31 and March 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 June 30, 2005, and each Quarterly
Payment Date thereafter until March 31, 2012 (the
“Maturity Date”). 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. Each such quarterly
payment if timely made shall be in the amount of $537,500.00,
except for the payment made on the Maturity Date. In addition to
the foregoing payments, Borrower shall pay Lender all interest
accrued (or prepay interest which shall accrue) under the Prior
Notes, as well as any non-principal item accrued under such Prior
Notes, if any, through March 30, 2005, 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 to
amounts due hereunder (including principal, accrued interest, and
late payment charges), in such order as U.S. Bank may
elect
BREAKFUNDING PREPAYMENT
INDEMNITY.
Prepayment
: There shall be no prepayments of
this Note, provided that Lender may consider requests for its
consent with respect to prepayment of this Note, without incurring
an obligation to do so, and Borrower acknowledges that in the event
that such consent is granted, Borrower shall be required to pay
Lender, upon prepayment of all or part of the principal amount
before final maturity, a prepayment indemnity (“Prepayment
Fee”) equal to the greater of zero, or that amount,
calculated on any date of prepayment (‘Prepayment
Date”), which is derived by subtracting: (a) the principal
amount of the Note or portion of the Note to be prepaid from (b)
the Net Present Value of the Note or portion of the Note to be
prepaid on such date of Prepayment Date; provided, however, that
the Prepayment Fee shall not in any event exceed the maximum
prepayment fee permitted by applicable law.
“ Net Present Value
” shall mean the amount which is derived by summing the
present values of each prospective payment of principal and
interest which, without such full or partial prepayment, could
otherwise have been received by Lender over the shorter of the
remaining contractual life of the Note or next repricing date if
Lender had instead initially invested the Note proceeds at the
Initial Money Market Rate. The individual discount rate used to
present value each prospective payment of interest and/or principal
shall be the Money Market Rate at Prepayment for the maturity
matching that of each specific payment of principal and/or
interest.
“Initial Money Market
Rate ’ shall mean
the rate per annum, determined solely by Lender, on the first day
of the term of this Note or the most recent repricing date or as
mutually agreed upon by Borrower and Lender, as the rate at which
Lender would be able to borrow funds in Money Markets for the
amount of this Note and with an interest payment frequency and
principal repayment schedule equal to this Note and for a term
as may be arranged and agreed upon by Borrower and Lender, adjusted
for any reserve requirements and any subsequent costs arising from
a change in government regulation. Borrower acknowledges that
Lender is under no obligation to actually purchase and/or match
funds for the Initial Money Market Rate of this Note.
‘ Money Market Rate At
Prepayment ” shall mean that zero-coupon rate, calculated
on the Prepayment Date, and determined solely
