Exhibit 10.28
PROMISSORY NOTE
(Renewal Note)
(Variable Rate, Non-Revolving
Loan)
|
Not to Exceed
$3,900,000.00
|
|
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 Three Million Nine Hundred Thousand & 00/100
Dollars ($3,900,000.00) 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
NOTE . 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 $15,800,000 Note dated the 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.
CALCULATION AND PAYMENT OF
INTEREST . The unpaid
principal balance will bear interest at an annual rate equal to the
prime rate announced by Lender (the “Prime Rate”). The
interest rate shall be adjusted each time that the Prime Rate
changes. Lender will strive to inform Borrower of each change in
the Prime Rate, but each adjustment in the Prime Rate 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 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”), and the amount of each payment is
subject to adjustment as set forth hereafter. Each such quarterly
payment if timely made shall be in the principal amount of
$97,500.00, plus all accrued interest through the date of payment,
except for the payment made on the Maturity Date. The Prime Rate
applicable on the date of this Note shall be five and seventy-five
hundredths percent (5.75%). 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 balance, multiplied by the actual number of
days the principal balance is outstanding. As of March 30,
2005, and each March 30 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
Notes (or prepay interest which shall accrue), 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 elect.
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.
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
