| $3,059,700.00—Term Loan, Note No. 31142NP*
|
|
|
|
| Total Loans
|
|
|
| $
|
20,000,000.00
|
—Term Loan, Note No. 31144NP*
|
|
|
|
| 101,997,480.00
| —Term Loan, Note No. 31143
|
|
|
|
| 79,202,520.00
| —Term Loan, Note No. 31143NP*
|
|
|
|
| 31,000,000.00
| —Long Term L/C Commitment, Note No. 30343
|
|
|
|
| 8,000,000.00
| —Term Facility Loan, Note No. 30800NP*
|
|
|
|
|
|
|
|
| $
| 240,200,000.00
| —Total
*NP
indicates a non-patronage note
The
St. Xxxx Bank for Cooperatives (the "Bank") and Borrower agree to the above loans (the "Loans") to the Borrower subject to all the terms and conditions of this loan agreement. Patronage Loans and
Commitments require the Borrower to purchase equities of the Bank as set forth in the "CONDITIONS" section, paragraph B of this loan agreement.
I. NOTES AND SECURITY
Advances
under this loan agreement, together with any existing indebtedness of the Borrower to the Bank, shall be evidenced by a promissory note or notes acceptable to the Bank, and shall be secured
to the extent of all collateral presently held by the Bank, and shall be secured by the Amended and Restated Mortgage and Security Agreement dated as of September 15, 1998.
II. LIMITATION ON ADVANCES
A. The
total Term Loans outstanding under this or any loan agreement between the Bank and the Borrower shall not exceed the amount shown in the above heading.
B.The
minimum advance on any Loan at one time is $2,000,000.
C.All
advances on Term Loans shall be allocated 56.29% to Note No. 31143 and 43.71% to Note No. 31143NP.
X.Xx
advances shall be made on Term Loan, Note No. 31144NP, until Term Loans, Note Nos. 31143 / 31143NP, have been fully advanced.
III. INTEREST
A.All
Term Loans, Note Nos. 31143 / 31143NP / 31144NP balances which are not part of a fixed amount (as defined in the "CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES"
section of this loan agreement), shall bear interest at a variable interest rate per annum equal to the Bank's cost of funds plus 105 basis points(1.05%).B.All
Term Loans, Note Nos. 31143 / 31143NP / 31144NP balances which are part of a fixed amount (as defined in the "CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES" section
of this loan agreement), shall bear rates of interest as follows:
TABLE 2
RATE PRODUCT
|
| INDEX
|
| SPREAD OVER INDEX
IN BASIS POINTS
|
|
|
|
|
|
|
| One Month
|
| LIBOR
|
| 90
|
| Two Months
|
| LIBOR
|
| 90
|
| Three Months
|
| LIBOR
|
| 90
|
| Six Months
|
| LIBOR
|
| 90
|
| One Year
|
| U.S.$ Constant Maturity
Treasury ("US$CMT")
|
| 125
|
| Two Years
|
| US$CMT
|
| 125
|
| Three Years
|
| US$CMT
|
| 125
|
| Four Years
|
| US$CMT
|
| 125
|
| Five Years
|
| US$CMT
|
| 125
|
| Seven Years
|
| US$CMT
|
| 140
|
| Ten Years
|
| US$CMT
|
| 140
|
| Floor (Minimum) Margin
(For One to Ten Year Fixed Rate Products Only)
|
| Bank's cost of funds
|
| 105
In
addition, the spread over the above indices, including the Floor Margin, may increase or decrease for future fixed amounts for Term Loans, Note Nos. 31143 / 31143NP / 31144NP, based on the
Borrower's previous fiscal quarter's leverage ratio, as defined in the "CONDITIONS" section, paragraph L., as follows:
TABLE 3
LEVERAGE RATIO
(as defined in
Section VII.,
paragraph L.)
|
| INCREASE /
DECREASE
TO SPREAD
|
| CHANGE TO SPREAD
LISTED IN TABLE 2
(IN BASIS POINTS)
|
|
|
|
|
|
|
| A. Equal to or greater than 1.35:1.00
|
| Increase
|
| 20
|
| B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00
|
| None
|
| 0
|
| C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00
|
| Decrease
|
| 10
|
| D. Less than 1.00:1.00
|
| Decrease
|
| 20
The
spread shall be adjusted quarterly on the latter of either: (a) five business days after the Bank's receipt of the Borrower's certification of compliance with the leverage ratio, or
(b) 30 days after the end of each calendar quarter.
LIBOR
(London Inter-Bank Offered Rate) means, for any period selected, the rate per annum (rounded upwards, if necessary, to the next one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for the period selected as it appears on Bloomberg BBAM page as of 11:00 a.m. (London, England time) on the date two business days before the effective date of period
selected. All fixed amounts on the Term Loans shall be allocated to Note No. 31143 and Note No. 31143NP and Note No. 31144NP according to the percentages specified in
Section II. C. above.
C.All
outstanding loan balances under the Term Facility Loan, Note No. 30800NP shall bear such rate of interest as described in the Note Agreement dated November5, 1994, by and between the Bank, the
Borrower, and the Bank of North Dakota (the "Note Agreement").
D.Any
outstanding draws made under the Long Term L/C Commitment No. 30343 shall bear interest at a variable interest rate per annum equal to the Prime Rate, with any change in
the variable interest rate to be effective as changes are reported in The Wall Street Journal.
E.Interest
on the Loans shall be payable on the last day of each calendar quarter, in arrears, and shall be computed on the basis of a year of 360 days for the actual number of
days elapsed.
F.The
basis point spread on the Loans shall remain in effect for interest rate quotes made through January 31, 2000, after which date the Bank shall have the option of
increasing or decreasing the basis point spread.
IV. FEES
A.The
Loans, except for Term Facility Loan, Note No. 30800NP shall be subject to an agency fee of 10 basis points (0.10%) on an annualized basis, on the daily outstanding
balances payable on the last day of each calendar quarter, in arrears, and shall be computed on the basis of a year of 360 days for the actual number of days elapsed.
B.Commitments
arising from special payments on Term Loans, Note Nos. 31143 / 31143NP / 31144NP, described in the "REPAYMENT" section of this loan agreement, shall be subject to a
commitment fee of 25 basis points (0.25%) on an annualized basis, on the average daily commitment. Any such fees incurred shall be payable on the last
day of the calendar quarter, in arrears, computed on the basis of a year of 360 days for the actual number of days elapsed in which reinstatable Term Loans commitments were outstanding.
C.Long
Term L/C Commitment, No. 30343, shall be subject to an origination fee of five basis points (0.05%), and annual
commitment fee of 62.5 basis points (0.625%,) payable in advance of March 31 of each year.
X.Xxxxxxxx
shall pay a closing fee of $5,000 ($2,000 patronage, $3,000 non-patronage).
V. CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES
In
accordance with and subject to the Bank's Customer Managed Fixed Rate Term Program and subject to the Bank's overall program funding limitations, it is agreed the interest rate may be fixed on any
term loan indebtedness (the "fixed amount") under this loan agreement as follows:
A.The
minimum fixed amount shall be $2,000,000.
B.Each
fixed amount and each selected pricing maturity date shall be treated as a separate indebtedness for interest rate designation and interest billing purposes.
C.Fixed
amount pricing maturities shall be for a minimum maturity of one month and a maturity date no later than the final repayment date of Term Loans, Note Nos. 31143 / 31143NP /
31144NP.
D.The
Borrower shall have indebtedness under the variable rate term interest rate program or priced maturing fixed amounts against which to apply scheduled term loan payments as set
forth in the "REPAYMENT" section of this loan agreement.
E.For
fixed amounts that are not indexed to LIBOR, the Borrower's selection of loan interest rate quotes and pricing maturities must be communicated to the Bank by 2:00 p.m.
(Central Time) on the day prior to the fixed amount advance. If this selection deadline is not met, maturing fixed amounts shall automatically convert to the variable rate term loan. For fixed amounts
that are indexed to LIBOR, the Borrower shall notify the Bank by 12:01 p.m. (Central Time) at least three business days prior to the date upon which the Borrower requests a fixed amount to
become effective, whether that fixed amount represents a new advance, pricing maturity date of an existing LIBOR fixed amount, or a conversion from the variable rate. If these selection deadlines are
not met, maturing fixed amounts shall automatically convert to the variable rate term loan.
F.The
Borrower may select fixed interest rates and pricing maturities for subsequent delivery. Fixed amounts priced by the Borrower shall ordinarily exceed $2,000,000 per transaction.
The Bank shall:
0.Xx
the request of the Borrower, offer indications of current market interest rates adjusted for future deliveries of fixed amounts with various pricing maturities.
2.Summarize
the interest rate, fixed amount, selected pricing maturity, and future delivery date of the fixed amount by written notice of confirmation to and acceptance by the
Borrower.
In
the event the Borrower fails to take delivery of fixed amounts, the Borrower shall be subject to prepayment penalties as calculated for fixed amounts in paragraph G. below.
G.Fixed
amounts cannot be repaid or repriced by the Borrower prior to their respective pricing maturity dates without being subject to prepayment penalties. Such penalties shall be
determined according to a methodology specified by the Bank which preserves the Bank's yield on the fixed amount prepaid or repriced and which is based upon the difference between the Bank's cost of
like funds to pricing maturity at the time of prepayment and the existing fixed rate on the fixed amount.
H.Each
fixed amount shall be summarized in the Daily Activity Statement (the "statement") to the Borrower. Each statement shall reference and confirm the following:
1.Note
Nos. 31143/31143NP/31144NP.
2.The
fixed amount and its Contract No.
3.The
rate of interest.
4.The
effective date.
5.The
pricing maturity date.
I.The
Borrower agrees that the statement shall verify the understanding reached by the parties, and that the Borrower shall be bound by the statement without its signature; provided,
however, if there is an error reflected in the statement, the Borrower shall notify the Bank of the error within five days after receipt of the statement and an appropriate correction will be made.
J.If
there is a question on the interest rate applicable to the fixed amount, the rate as established by the Bank for such amounts shall be controlling.
VI. TERM FACILITY LOAN
Advances
made on the Term Facility Loan, Note No. 30800NP, have been sold to the Bank of North Dakota in accordance with a Participation Agreement between the Bank and the Bank of North Dakota.
The Term Facility Loan is subject to the terms and conditions, including interest rate and repayment, of the Note Agreement, by and between the Bank, the Borrower and the Bank of North Dakota.
VII. CONDITIONS
While
this loan agreement is in effect, the Borrower agrees to comply with the following conditions:
A.Eligibility Status: The Borrower will maintain its status as an eligible borrower as defined in the Farm Credit Act of 1971, as
amended (12 U.S.C. 2129).
B.Patronage Loans: Note Nos. 31143 / 30343 shall be patronage loans and the Borrower will purchase equities of the Bank in such amounts
as prescribed by the Bank's capital plan and any amendments to the plan. The Borrower will receive allocations of patronage earnings for Note Nos. 31143 / 30343. The Bank shall have a first lien on
all stock or other equities of the Borrower in the Bank as collateral, among other, for the payment of any indebtedness of the Borrower to the Bank.
C.Non-Patronage Loans: Note Nos. 31143NP / 30800NP / 31144NP shall be non-patronage loans. The Borrower
foregoes any opportunity to purchase Bank equities or receive allocations of patronage earnings on Note Nos. 31143NP / 30800NP / 31144NP.
X.Xxxxxxxxx: The Borrower will maintain business and property insurance with financially sound insurers, in amounts sufficient to
protect the Loans. The Borrower shall purchase and maintain flood insurance as may be required by the Bank in accordance with applicable law including, but not limited to, regulations of the Farm
Credit Administration.
X.Xxxxxxxxx Information: The Borrower will furnish the Bank:
1.Audited
annual financial statements prepared in accordance with generally accepted accounting principles ("GAAP") within 120 days after the end of each fiscal year;
2.Annual
operating budgets within 60 days after the end of each fiscal year;
3.Quarterly
and annual financial statements as prepared and filed with the Securities Exchange Commission within five days of filing; and
4.Such
other information as the Bank may request relative to the Borrower's business.
Further,
the Borrower shall cause Crystech, L.L.C. ("Crystech") to furnish the Bank:
1.Audited
annual financial statements prepared in accordance with GAAP within 120 days after the end of each fiscal year; and
2.Quarterly
financial statements within 60 days after the end of each fiscal quarter.
Borrower
shall (and shall cause Crystech to) permit such examination of its books and records as the Bank may reasonably specify.
F.Negative Pledge: The Borrower will not mortgage, pledge, assign, or grant security interests in any assets to any other party, except
the permitted liens identified on Attachment A, without the prior written consent of the Bank.
G.Outside Senior Secured Borrowings: The Borrower will not borrow senior secured funds (with original maturity dates of
12 months or more) from other sources, except for permitted borrowings identified on Attachment B, without prior approval of the Bank. This approval will not be unreasonably withheld.
H.Grower Agreements: The Borrower shall abide by the terms and conditions of its member grower agreements; make no amendments or
changes to the agreements without the prior written consent of the Bank; and extend the agreements for an additional five years when the current contracts expire.
X.Xxxxxxx Expenditure Budget: The Borrower will furnish an annual capital expenditure budget, within 60 days after the end of
each fiscal year. The Borrower will also furnish a revised budget if increases over the original capital expenditure budget are approved by the board of directors.
J.Minimum Net Working Capital: The Borrower shall maintain minimum net working capital of not less than $30,000,000; and will attain
and maintain minimum net working capital of not less than $32,500,000 by February 28, 1999; and will attain and maintain minimum net working capital of not less than $35,000,000 by
November 30, 1999. Minimum net working capital shall be calculated in accordance with GAAP, plus any reinstatable unadvanced available term loan commitment, plus the estimated unit retain.
K.Current
Ratio: The Borrower shall maintain a current ratio (current assets divided by adjusted current liabilities) of 110% or more based on a rolling four quarter average. Current
liabilities shall be adjusted to exclude current year unit retains from amounts due members.
L.Leverage Ratio: The Borrower will maintain a leverage ratio of not more than1.50:1.0, and attain a leverage
ratio of not more than 1.40:1.0 on November 30, 2002. Leverage ratio is long term debt (excluding current
maturities) calculated in accordance with GAAP plus or minus the difference between actual working capital and minimum net working capital (as defined in Paragraph J. above), divided by total
members investments plus the estimated unit retains.
M.Term Debt Coverage Ratio: The Borrower's term debt outstanding shall not exceed six times (6) the average annual net funds
generated during the most recent three fiscal years. Net funds generated in any fiscal year are to be calculated as follows:
Add:
1.Unit
retains.
2.Depreciation
and amortization.
0.Xxx
income from non-member business and member business tax timing differences.
4.Decrease
in investments in other cooperatives (excluding subsidiaries).
0.Xxx
revenue from the sale of stock.
Minus:
6.Increase
in investments in other cooperatives (excluding subsidiaries).
0.Xxx
loss from non-member business and member business tax timing differences.
8.Provision
for income tax.
9.Members'
investment retirements.
N.Compliance Report: The Borrower will furnish the Bank a quarterly compliance report within 45 days of each fiscal quarter end,
in a form acceptable to the Bank, certified by an officer of the Borrower, that measures compliance with Paragraphs J., K., L., and M. above.
O.Guaranties. The Borrower's agreement to guaranty, assume, or provide surety of other entities' financial obligations shall not exceed
an aggregate amount greater than 10% of the Borrower's net worth, without the Bank's prior written consent.
VIII. REPAYMENT
The
indebtedness arising from the Loans shall be repaid as follows:
A.The
Term Loans, Note Nos. 31143 / 31143NP, totaling $181,200,000, shall be repaid by annual principal payments of Seventeen Million Dollars ($17,000,000) each, due on or before
December 31 of each year through December 31, 2008, and by a final principal payment of Eleven Million Two Hundred Thousand Dollars ($11,200,000) due on or before December 31,
2009. All outstanding balances shall be repaid by December 31, 2009.
The
Borrower shall be permitted to make special payments, in a minimum amount of $500,000, on the variable rate portion of Term Loans Note Nos. 31143 / 31143NP, when all short term financing,
including the Seasonal Loans (in accordance with a Seasonal Loan Agreement between the parties of even date), Commodity Credit Corporation loans and other short term loans have been zeroed out. These
special payments shall be readvanced subject to the provisions of the "REINSTATEMENT" section of this loan agreement and prior to the Borrower's borrowing of new short term funds. The reinstatable
Term Loans commitment arising from such special payments shall be subject to the Term
Loans commitment fee (as described in the "FEES" section, paragraph B. of this loan agreement) from the date of the special payment to the date of the readvance.
B.The
new Term Loan, Note No. 31144NP, of $20,000,000, shall be repaid by annual principal payments of Two Million Dollars ($2,000,000) each, to be remitted to the Bank on or
before the last day of December 31, commencing in 2000. All outstanding balances shall be repaid by December 31, 2009.
C.The
present Long Term L/C Commitment, Note No. 30343, shall mature on April 30, 2013. Advances on Long Term L/C Commitment, Note No. 30343, made in support of
outstanding letters of credit shall be payable on demand.
D.The
present Term Facility Loan, Note No. 30800NP, totaling $8,000,000, shall be repaid in accordance with the terms and conditions of the Note Agreement.
The
Bank, at its discretion, may apply repayments to the reduction of any indebtedness outstanding under this loan agreement.
IX. LATE FEE PENALTY
Payments
received fifteen (15) calendar days after the scheduled repayment date are subject to a late payment penalty equal to 1% of the past due amount
but not less than $25.00 per transaction.
X. EXPIRATION
The
unadvanced portion of the Loans shall be canceled as indicated below; provided, however, the Bank may, at its option, extend the expiration date of the Loans and the maturity date of the Seasonal
Loans without notice to or consent of the Borrower.
Term
Loans, Note Nos. 31143 / 31143NP / 31144NP—February 29, 2000 Long Term L/C Commitment, Note No. 30343—April 30, 2013
XI. REINSTATEMENT
In
order to facilitate repayments and reborrowings under this loan agreement, the Bank is hereby authorized to reinstate special payments on the Term Loans, Note Nos. 31143 / 31143NP / 31144NP,
through the expiration dates specified in this loan agreement; provided, however, that the total amount outstanding hereunder shall not exceed the face amounts of the Term Loans, Note Nos. 31143 /
31143NP / 31144NP; and provided, further, that the right of the Borrower to such reinstatement may be denied and canceled at any time at the option of the Bank.
XII. DEFAULT PROVISION
If
the Borrower shall fail to pay when due any amount on any of the Loans hereunder, or any other indebtedness of the Borrower to the Bank, or shall fail to observe or perform any of the provisions or
representations of this agreement, any other loan agreement(s) with the Bank, or of any security agreement, or of any mortgage, or of the Note Agreement, or of any of its credit and/or security
documents with any third party (including without limitation the Note Purchase Agreement dated as of September 15, 1998, with, among others, Xxxx Xxxxxxx Mutual Life Insurance Company, and all
notes, security documents and other documents related thereto), the Borrower shall be in default hereunder.
Further, the Borrower shall be in default of this Loan Agreement if the Borrower causes a default under the Crystech Note Purchase Agreement dated June 3, 1998, as amended, or if Crystech's
obligation on Notes under the Crystech Note Purchase Agreement are accelerated for reasons other than the plant not achieving the 72% minimum production level. When the Borrower is in default the Bank
may declare by written notice to the Borrower that all such Loans and other indebtedness are immediately due and payable and the Bank may terminate its commitments and any reinstatement rights
hereunder and proceed to enforce payment and to exercise any or all of the rights afforded to the Bank by law or agreement. Upon demand, the Borrower shall pay to the Bank all attorney's fees and
costs incurred by the Bank in enforcing its rights under this agreement or in protecting the collateral securing the Loans, including reasonable attorney's fees incurred by the Bank in a bankruptcy or
receivership proceeding or in enforcing any judgment against the Borrower.
XIII. ACCEPTANCE
This
loan agreement is the full agreement under the terms and conditions of the Loan. It shall not be modified except in writing, and shall not become effective unless the Borrower shall, within
60 days from date, signify its acceptance of these terms and conditions by signing and returning a copy of this loan agreement to the Bank.
BY
DIRECTION of the loan committee this 5th day of March, 1999.
ST. XXXX BANK FOR COOPERATIVES
By
/s/ Xxxxxx X. Xxxxx
Its Senior
Vice President
ACCEPTED AND AGREED TO:
AMERICAN CRYSTAL SUGAR COMPANY
MOORHEAD MINNESOTA
By
/s/ Xxxxx Xxxxxxxxx
Its Treasurer
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