Exhibit 10.3
PROMISSORY NOTE
(Variable Rate, Non-Revolving Single Advance
Loan)
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Not to Exceed
$4,300,000.00
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Sioux Falls, South Dakota
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September 21, 2007
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FOR VALUE RECEIVED
, N0RTHERN 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 Four Million Three Hundred Thousand
& 00/100 Dollars ($4,300,000.00) or so much thereof as may be
advanced hereunder.
CALCULATION 0F
INTEREST. Interest hereunder shall accrue at an annual
rate equal to 3.00% plus the one-month LIBOR rate quoted by Lender
(LIBOR + 3.00%), which shall be the one-month LIBOR rate in effect
two New York Banking Days prior to the stated monthly reprice date,
adjusted for any reserve requirement and any subsequent costs
arising from a change in government regulation, such rate to be
reset monthly on the last day of the month. The term “New
York Banking Day” means any date (other than a Saturday or
Sunday) on which commercial banks are open for business in New
York, New York. Lender’s internal records of applicable
interest rates shall be determinative in the absence of manifest
error. If the advance under this Note occurs other than on the
first day of the month, the initial one-month LIBOR rate shall be
that one-month LIBOR rate in effect two New York Banking Days prior
to the date of the advance, which rate shall be in effect on the
remaining days of the month of the advance.
PAYMENT
SCHEDULE.
INTEREST PAYMENTS.
Payments of all interest accrued hereunder shall be made October
31, 2007, and the last day of each month thereafter.
PRINCIPAL PAYMENTS.
In this Note each “Quarterly Payment Date” shall be
October 31, January 31, April 30, and July 31 of each year.
Borrower shall make an installment payment of principal in the
amount of One Hundred Fifty Four Thousand Dollars ($154,000.00)
each Quarterly Payment Date commencing October 31, 2007, and each
Quarterly Payment Date thereafter.
COMMITMENT FEE. In
consideration of Lender’s agreement to extend the loan
evidenced by the Note, Borrower shall pay Lender on the date of
this Note first shown above a commitment fee of Twenty One Thousand
Five Hundred Dollars ($21,500.00).
PAYMENT IN FULL AT
MATURITY. The Maturity Date of this Note is July 31,
2014 (the “Maturity Date”). The total unpaid principal
amount and all interest thereon and any other amount due hereunder
shall be payable on the Maturity Date.
PAYMENT DUE ON NON-BUSINESS
DAY. In the event any payment due under this Note is due
on a date other than a Business Day (as defined in the Loan
Agreement),
such payment shall be due on the Business Day immediately following
the day the payment was otherwise due.
CREDITING 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 first to accrued
interest, next to unpaid principal, and next, in such order as
Lender may determine in its sole and absolute discretion, to other
fees, charges, or costs and expenses payable by Borrower under this
Note or in connection with any other Loan Document.
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 Amended and Restated Loan Agreement
dated as of August 28, 2006, as amended by that Amendment to
Amended and Restated Loan Agreement dated September 21, 2007 (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 secured by a Security
Agreement dated as of August 28, 2006, and a Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Financing
Statement dated as of the date of this Note, as well as other
collateral described in the Loan Agreement and the other Loan
Documents, Capitalized terms not defined herein shall have the
meaning-given such terms in the Loan Agreement.
LATE PAYMENT; GRACE PERIOD;
DEFAULT INTEREST; CROSS- DEFAULT. If a payment due
hereunder is not made within five (5) days after the date when due,
Bor
