Exhibit 10.10
LOAN AGREEMENT
THIS LOAN AGREEMENT (the AAgreement@) is made and entered into as of
May 1, 1998, by and between Alliance Farms Cooperative Association, a Colorado
cooperative association (the ABorrower@), and Farmland Industries, Inc., a
Kansas corporation (the ALender@).
RECITALS:
A. The Borrower is engaged in the business of producing feeder
and weaned pigs for sale to its members and third parties.
B. Previously, the Borrower has constructed its (i) feeder pig
production facilities by using the proceeds from a sale of a block of seventeen
(17) shares of its Class A common stock, and (ii) weaned pig production
facilities by using the proceeds from a sale of a block of eighteen (18) or
twenty-four (24) shares, respectively, of its Class B or Class C common stock,
together with the proceeds of loans from CoBank, ACB, pursuant to the CoBank
Loan Documentation (as hereinafter defined).
C. The Borrower now desires to construct a 5,000-sow pig
production facility in Yuma County, Colorado on the real property described on
Schedule 1 hereto, by using the proceeds of the Loan (as hereinafter defined)
from the Lender and the proceeds of additional advances under the CoBank Loan
Documentation.
SECTION 1 - DEFINITIONS
1.1. Defined Terms. As used in this Loan Agreement, the following
terms have the following meanings:
AApplicable Rate@ means the per annum rate equal to the sum of (a) one
and one-quarter percent (1.25% or 125 basis points), plus (b) the National
Variable Rate.
ABusiness Day@ means a day other than a Saturday, Sunday or business
holiday in the State of Missouri.
ACoBank@ means CoBank, ACB (formerly National Bank for Cooperatives),
the Borrower=s primary lender.
ACoBank Loan Documentation@ collectively means the Master Loan
Agreement (MLA No. E039T), dated as of March 18, 1998, between CoBank and the
Borrower, a true and correct copy of which is attached hereto as Exhibit D, and
all promissory notes, security agreements, mortgages and other documents and
agreements executed pursuant to such Master Loan Agreement.
AContractual Obligation@ means, with respect to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such person is a party or by which it or any of its
properties is bound.
AEvent of Default@ means any of the events described in Section 7,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
AGAAP@ means generally accepted accounting principles in the United
States of America in effect from time to time.
AGovernmental Authority@ means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
AIndebtedness@ means, with respect to any Person, at a particular
time, any indebtedness, obligation or liability in respect of which such Person
is an obligor, whether matured or unmatured, liquidated or unliquidated, direct
or contingent, joint or several.
ALien@ means and includes any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction).
ALoan@ shall have the meaning ascribed to such term in Section 2.1
hereof.
AMortgage@ collectively means the Colorado Deed of Trust,
substantially in the form of Exhibit C, to be executed and delivered by the
Borrower to the Lender, and all additional deeds of trust and mortgages as may
from time to time be executed and delivered to or in favor of the Lender by the
Borrower.
ANational Variable Rate@ means the rate most recently announced by
CoBank as its ANational Variable Rate.@ The National Variable Rate is one of
CoBank's Applicable Rates and serves as a basis upon which effective rates of
interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as CoBank may designate.
ANote@ means the Promissory Note, substantially in the form of Exhibit
A, to be executed and delivered by the Borrower to the Lender.
APerson@ means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
ARequirement of Law@ means, with respect to any Person, the
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or any
interpretation thereof by a Governmental Authority, or any determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or to which such Person
or any of its properties is subject.
ASecurity Agreement@ means the Security Agreement, substantially in
the form of Exhibit B, to be executed and delivered by the Borrower in favor of
the Lender.
ASecurity Documents@ means and includes the Security Agreement and the
Mortgage and all additional security agreements and pledge agreements as may
from time to time be executed and delivered to or in favor of the Lender by the
Borrower.
1.2 Construction. (a) Unless otherwise defined therein, all
terms defined in this Loan Agreement shall have their respective herein defined
meanings when used in the Note, the Security Documents, or any certificate or
other document made or delivered pursuant hereto or thereto. All such
certificates and documents and all Exhibits and Schedules attached to this Loan
Agreement are a part hereof for all purposes.
(b) Unless the context otherwise requires or unless otherwise
provided herein, the terms defined in this Loan Agreement which refer to a
particular agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments, and restatements of such
agreement, instrument or document, provided, however, that nothing contained in
this sentence shall be construed to authorize any such renewal, extension,
modification, amendment or restatement other than in accordance with subsection
8.1.
(c) As used in this Loan Agreement and in the Note and in any
certificate or other document made or delivered pursuant to this Loan Agreement,
accounting terms, to the extent not defined in this Agreement, shall have the
respective meanings given to them under GAAP.
(d) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, words importing the singular number shall
include the plural and vice versa, and words importing person shall include
individuals, corporations, partnerships, joint ventures, associations,
joint-stock companies, trusts, unincorporated organizations and governments and
any agency or political subdivision thereof.
(e) The table of contents, captions and headings in this Loan
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Loan Agreement.
1.3 Calculations. All interest and fees accruing under this Loan
Agreement, the Note or any Security Document or under any other document or
instrument delivered pursuant hereto or thereto shall be calculated on the basis
of actual days elapsed and a year of 360 days.
SECTION 2 - LENDING ARRANGEMENT
2.1. The Loan. The Lender agrees, on the terms and subject to the
satisfaction of the conditions hereinafter set forth, to make a loan to the
Borrower, by means of one or more advances, in the aggregate principal amount of
Two Million One Hundred Sixty Thousand Dollars ($2,160,000.00) (the ALoan@),
which shall be evidenced by the Note. One-half of the Loan shall be payable as
to principal and interest on the closing date with respect to the Borrower=s
first issuance and sale of a block of seventeen (17) shares of its Class A
common stock, $.01 par value, or eighteen (18) shares of its Class B common
stock, $.01 par value, or twenty-four (24) shares of its Class C common stock,
$.01 par value, occurring after the date hereof, and the balance of the Loan
shall be payable as to principal and interest on the closing date with respect
to the Borrower=s second issuance and sale of a block of seventeen (17) shares
of its Class A common stock, $.01 par value, or eighteen (18) shares of its
Class B common stock, $.01 par value, or twenty-four (24) shares of its Class C
common stock, $.01 par value, occurring after the date hereof; provided,
however, that to the extent there remains any unpaid amount owed in respect of
the Loan as of the ____ day of May, 2008, the Loan shall be payable in full as
to principal and interest on said date. The Borrower shall not close any
issuance and sale of shares of its Class A, Class B or Class C common stock,
$.01 par value unless (a) not less than (i) seventeen (17) shares of its Class A
common stock, $.01 par value, (ii) eighteen (18) shares of its Class B common
stock, $.01 par value, or (iii) twenty-four (24) shares of its Class C common
stock, $.01 par value, are issued and sold in connection with such closing, and
(b) concurrently with the closing of the Borrower=s next two issuances and sales
of a block of seventeen (17), eighteen (18) or twenty-four (24) shares,
respectively, of its Class A, Class B or Class C common stock, $.01 par value,
the Borrower shall cause the repayment of the Loan in accordance with this
Section 2.1.
2.2. Advances. Advances under this Loan Agreement will be made to
Borrower upon request and deposited into the Construction Account established
with CoBank under the CoBank Loan Documentation and will be subject to the terms
and provisions pertaining to such advances.
2.3. Interest.
(a) The Borrower agrees to pay interest on the unpaid principal
amount of the Loan from the date the proceeds thereof are made available to the
Borrower until maturity (whether by acceleration or otherwise) at a rate per
annum equal to the Applicable Rate. The Applicable Rate shall be adjusted
annually based on the National Variable Rate in effect on the anniversary date
of this Loan Agreement.
(b) Overdue principal and, to the extent permitted by law, overdue
interest in respect of the Loan shall bear interest at a rate per annum equal to
the lower of two percent (2%) above the Applicable Rate in effect from time to
time or the maximum rate of interest allowed by applicable law; provided,
however, that in no event shall the Loan bear interest after maturity at a rate
per annum less than the rate of interest applicable thereto at maturity.
(c) Interest shall accrue from and including the date of the Loan
to but excluding the date of any repayment thereof and shall compound on the
first day of June, 1998, and the first day of each successive month thereafter,
and such accrued and compounded interest shall be payable, at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
2.4. Payment. Except as otherwise specifically provided herein,
all payments due under this Loan Agreement shall be made to the Lender not later
than 12:00 noon (central time) on the date when due and shall be made in lawful
money of the United States of America in immediately available funds at the
Lender's principal office. Whenever any payment to be made hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, payment
shall be made on the next successive Business Day with the same effect as though
made on the due date.
2.5. Prepayment. The Borrower shall have the right to prepay all
or any portion of the Loan at any time and from time to time without premium or
penalty of any kind.
2.6. Additional Costs. If, due to either (i) any Requirement of
Law or (ii) compliance by the Lender with any request from any Governmental
Authority, there shall be any increase in the cost to the Lender of agreeing to
make or making, funding or maintaining the Loan, the Borrower shall from time to
time, upon demand by the Lender, pay to the Lender additional amounts sufficient
to indemnify the Lender against such increased costs. The determination of such
increased costs by the Lender shall be conclusive if made reasonably and in good
faith.
SECTION 3 - REPRESENTATIONS AND WARRANTIES
To induce the Lender to make the Loan hereunder, the Borrower hereby
represents and warrants to the Lender as follows:
3.1. Financial Condition. The Borrower has furnished the Lender
with the audited balance sheet of the Borrower as at the end of the most recent
fiscal year of the Borrower and the related statement of operations, statement
of shareholder=s equity and statement of cash flows for the fiscal year then
ended, which fairly present the financial position and results of operations of
the Borrower at the times and for the periods covered thereby, all in accordance
with GAAP, and which indicate all contingent liabilities which reasonably would
be expected to have a material adverse effect on the Borrower.
3.2. No Change. Since the date of the end of the most recent
fiscal year of the Borrower, there has been no material adverse change in the
business, operations, assets or financial or other condition of the Borrower.
3.3. Corporate Existence; Compliance with Law. The Borrower is duly
organized and validly existing under applicable law, is qualified to do business
and is in good standing in each jurisdiction where required and has complied
with all laws necessary to conduct its business as presently conducted.
3.4. Corporate Power and Authority. The Borrower has authority,
and has completed all proceedings and obtained all approvals and consents
necessary to execute, deliver, and perform this Loan Agreement, the Note, the
Security Documents and the transactions contemplated hereby and thereby.
3.5. Enforceable Obligations. This Loan Agreement, the Note and
the Security Documents, when executed by the Borrower and delivered to the
Lender, will constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally.
3.6. No Legal Bar. The execution, delivery and performance by the
Borrower of this Loan Agreement, the Note and the Security Documents, the
borrowings by the Borrower hereunder, the use of the proceeds thereof and the
granting of the security interests pursuant to the Security Documents will not
violate any Requirement of Law or any Contractual Obligation of the Borrower
(including, without limitation, Borrower=s obligations under the CoBank Loan
Documentation) and will not result in or require the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation, except for the Liens created
pursuant to the Security Documents or created pursuant to the CoBank Loan
Documentation.
3.7. No Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the best
knowledge of the Borrower, threatened by or against the Borrower or against any
of its properties or revenues (a) with respect to this Loan Agreement, the Note
or any of the Security Documents or any of the transactions contemplated hereby
or thereby, or (b) which reasonably would be expected to have a material adverse
effect on the business, operations, assets or financial or other condition of
the Borrower .
3.8. No Default. The Borrower is not in default under any
agreement to which it is a party or by which it may be bound (including, without
limitation, under the CoBank Loan Documentation) that reasonably would be
expected to materially adversely affect the Borrower or the Borrower's ability
to perform and observe the obligations binding on it under this Loan Agreement,
the Security Documents and the Note.
3.9. Taxes. All tax returns required of the Borrower have been
filed, there is, to the Borrower=s knowledge, no proposed tax assessment or
liability against the Borrower or its properties which would be material to the
Borrower, and no extension of time for the assessment of any tax of the Borrower
is in effect or has been requested, except as disclosed in financial statements
previously furnished to the Lender.
3.10. Use of Proceeds. All proceeds of the Loan shall be used by
the Borrower for the construction of a 5,000-sow pig production facility in Yuma
County, Colorado.
3.11. Subsidiaries. The Borrower, as of the date of this Loan
Agreement, has no subsidiaries.
3.12. Security Documents.
(a) Each Security Document will be effective to create in favor of
the Lender a legal, valid and enforceable security interest in all right, title
and interest of the Borrower in the collateral described therein. When
financing statements have been duly filed and, when appropriate, possession of
such collateral has been taken by the Lender, each of such Security Documents
shall constitute a fully perfected security interest in all right, title and
interest of the Borrower in such collateral (subject only to any security
interest held by CoBank).
(b) The Mortgage will be effective to grant to the Lender a legal,
valid and enforceable mortgage lien on the mortgaged property thereunder. When
the Mortgage is duly recorded and all recording fees and taxes in respect
thereof are paid, the Mortgage shall constitute a fully perfected first lien on
such mortgaged property, subject only to the encumbrances and exceptions to
title set forth therein and any lien held by CoBank. All such interests of the
Lender shall, except as noted above, be superior in right to any Lien, existing
or future, which the Borrower or any third Person may have against the mortgaged
property or interests therein.
3.13. Representations and Warranties to CoBank. Each representation
and warranty set forth in the CoBank Loan Documentation is true and correct in
all material respects as of the date hereof, and the Borrower hereby makes and
confirms such representations and warranties to the Lender as if such
representations and warranties were contained in this Loan Agreement and
directly made to the Lender as of the date hereof.
SECTION 4 - CONDITIONS PRECEDENT
The Lender shall have no obligation to make any advance of the Loan
hereunder unless, on or prior to the date of the Loan, the Lender shall have
received the following items (all in form satisfactory to the Lender):
(a) the Note, duly executed by the Borrower;
(b) the Security Agreement, duly executed by the Borrower;
(c) the Mortgage, duly executed by the Borrower; and
(d) any other documents, instruments and reports as the Lender shall
reasonably request including, without limitation, itemized statements and
evidence of expenses incurred by the Borrower in connection with the
construction contemplated by this Loan Agreement.
SECTION 5 - AFFIRMATIVE COVENANTS
So long as any part of the indebtedness contemplated hereby shall
remain unpaid, the Borrower covenants and agrees as follows:
5.1. Financial Statements. (a) The Borrower shall furnish to the
Lender, as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a copy of the annual audited balance sheet of
the Borrower, and the related statement of operations, statement of
shareholder=s equity and statement of cash flows for such fiscal year, all
accompanied by the report by independent certified public accountants of
recognized standing acceptable to the Lender.
(b) The Borrower shall furnish to the Lender, as soon as available
and in any event within 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, a copy of the unaudited
balance sheet of the Borrower as at the end of each such quarter and the related
statement of operations, statement of shareholder=s equity and statement of cash
flows for such quarterly period and the portion of the fiscal year through such
date, setting forth in each case in comparative form the figures for the
previous fiscal year, certified by the Borrower's chief financial officer
(subject to normal year-end audit adjustments).
(c) All such financial statements shall be complete and correct in
all material respects and be prepared in reasonable detail and in accordance
with GAAP (consistent with the financial statements referred to in subsection
3.1) and applied consistently throughout the periods reflected therein.
5.2. Certificates. The Borrower shall furnish to the Lender,
promptly after becoming aware thereof, notice of the occurrence of any event or
condition which would constitute an Event of Default under this Loan Agreement.
5.3. Contractual Obligations, Requirements of Law. The Borrower
shall duly and promptly comply with each Contractual Obligation and Requirement
of Law to which it is subject or by which any of its properties is bound.
5.4. Payment of Indebtedness. The Borrower shall pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its Indebtedness, except when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower.
5.5. Maintenance of Existence. The Borrower shall preserve and
maintain its corporate existence, franchises and privileges in its jurisdiction
of incorporation, and qualify and remain qualified as a foreign corporation in
each jurisdiction where such qualification is necessary and the failure to be so
qualified would materially adversely affect the business of the Borrower.
5.6. Insurance. The Borrower shall maintain insurance reasonably
satisfactory to the Lender with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower operates.
5.7. Books and Records. The Borrower shall maintain proper books
of record and account in accordance with GAAP.
5.8. Notices. The Borrower shall promptly notify the Lender in
writing of the occurrence of any event which reasonably would be expected to
materially adversely affect the Borrower.
5.9. Further Assurances. The Borrower shall execute and file all
such further instruments and perform such other acts as the Lender may
reasonably determine are necessary or advisable to maintain the priority of the
liens and security interests created by the Security Documents in all property
subject thereto.
SECTION 6 - NEGATIVE COVENANTS
So long as any part of the Loan shall remain unpaid, the Borrower
covenants and agrees that the Borrower shall not, without the prior written
consent of the Lender, (a) take any actions, or permit to occur any events,
described in the Sections of the CoBank Loan Documentation presently titled
ANegative Covenants@, regardless of whether CoBank otherwise agrees thereto, or
(b) supplement, amend or otherwise modify the CoBank Loan Documentation.
SECTION 7 - DEFAULT
If any of the following events occurs and is continuing:
(a) failure by the Borrower to pay in full when due any amount of
principal or interest on the Note; or
(b) failure by the Borrower to perform or observe any of the
provisions contained in Section 6; or
(c) failure by the Borrower to perform or observe any of the
provisions contained in any other subsection hereof if such failure is not
cured within thirty (30) days of the Borrower's knowledge of the failure;
or
(d) failure of any Security Document, for any reason, to be in
full force and effect or any party thereto shall default in the observance
or performance of any of the covenants or agreements contained therein or a
default or an event of default shall occur under any Security Document; or
(e) any representation or warranty made by the Borrower herein
shall be false or misleading in any material respect; or
(f) the Borrower shall default in the payment when due (subject to
any applicable grace period), whether by acceleration or otherwise, of any
other Indebtedness for borrowed money of, or guaranteed by, the Borrower
(including, without limitation, any Indebtedness under the CoBank Loan
Documentation), or the Borrower shall be in default (after giving effect to
any applicable grace period), or an event of default has occurred, under
the terms and conditions of the CoBank Loan Documentation or any other
agreement or evidence of other Indebtedness of the Borrower; or
(g) any admission by the Borrower of its inability to pay its
debts as they mature, the commencement of any bankruptcy, insolvency,
arrangement, reorganization or other debt-relief proceedings by, or the
dissolution, termination of existence or insolvency (however evidenced) of,
the Borrower or any action authorized, taken or suffered by the Borrower
with a view toward any of the same; or
(h) failure by the Borrower within sixty (60) days after the
institution of any proceedings against the Borrower under any law relating
to bankruptcy, insolvency, arrangement, reorganization or relief of debtors
or similar law to have such proceeding dismissed;
then the Lender may, at its election and without demand or notice of any kind,
which are hereby expressly waived, refuse to make further advances of the Loan
hereunder, declare the unpaid balance of any outstanding Note and accrued
interest thereon immediately due and payable, proceed to collect same, and
exercise any and all other rights, powers and remedies given it by this Loan
Agreement, the Note, the Security Documents or by law or in equity.
SECTION 8 - MISCELLANEOUS
8.1. Amendment and Waiver. Neither this Loan Agreement, the Note or
any other instrument or document entered into in connection herewith, nor any
provisions hereof or thereof, may be supplemented, amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
an authorized officer of the Borrower and of the Lender, respectively.
8.2. Notices. All notices, demands or other communications hereunder
shall be given or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid, return
receipt requested, to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To the Borrower: Alliance Farms Cooperative Association
0000 X. Xxx Xxxxxxxxxx
P. O. Xxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Dept. 122
To the Lender: Farmland Industries, Inc.
0000 X. Xxx Xxxxxxxxxx
P. O. Xxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx, Dept. 160
with a copy in either case to:
CoBank, ACB
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxxxxxx, Vice President
Any notice, demand or other communication given in a manner prescribed in this
paragraph shall be deemed to have been delivered on receipt.
8.3. No Waiver; Cumulative Remedies. Any forbearance, failure, or
delay by the Lender in exercising any right, power or remedy shall not preclude
the further exercise thereof, and all of the Lender's rights, powers and
remedies shall continue in full force and effect until specifically waived in
writing by the Lender. The rights, remedies, powers and privileges herein or
therein are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law. The Borrower shall pay all reasonable and necessary
expenses (including reasonable attorney's fees and disbursements) incurred in
connection with the collection or enforcement of this Loan Agreement and the
Note.
8.4. Survival. The representations and warranties of the Borrower
contained herein shall survive the making of Loan and the making of the advances
of the Loan, and shall remain effective until all indebtedness contemplated
hereby shall have been paid by the Borrower in full.
8.5. Payment of Expenses and Taxes. The Borrower shall (a) pay all
reasonable out-of-pocket costs and expenses of the Lender incurred in the
collection, enforcement and prosecution of its rights and remedies hereunder,
whether or not involving a case, action or proceeding before any state or
federal court (including, without limitation, the reasonable fees and
disbursements of legal counsel) and (b) indemnify and hold the Lender harmless
from and against any and all current and future stamp and other similar taxes
with respect to the foregoing matters and from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to the Lender) to pay such taxes.
8.6. Indemnity. The Borrower shall indemnify and hold the Lender
harmless from and against all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
whatsoever which may be imposed on, incurred by or asserted against the Lender
(whether or not caused by the Lender's negligence) growing out of or resulting
from this Loan Agreement, the Note, the Security Documents and any other
document or instrument delivered hereunder or thereunder and all transactions
and events at any time associated therewith (including the enforcement of any
right of the Lender or the defense of any action or inaction by the Lender in
connection therewith), except to the limited extent such liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements are proximately caused by the Lender's gross
negligence or willful misconduct.
8.7. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Lender is hereby
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to setoff and to appropriate and
apply any and all indebtedness at any time held or owing by the Lender to or for
the credit of the Borrower against and on account of the obligations and
liabilities of the Borrower to the Lender under this Loan Agreement and the
Note, including (without limitation) all claims of any nature or description
arising out of or connected with this Loan Agreement and the Note, irrespective
of whether or not the Lender shall have made any demand hereunder and although
said obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
8.8. Successors and Assigns. This Loan Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lender and their respective
successors and assigns; provided, however, that the Borrower may not assign or
otherwise transfer any of its interest under this Loan Agreement without prior
written consent of the Lender.
8.9. Counterparts. This Loan Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Loan Agreement by signing any such
counterpart.
8.10. Severability. In case any one or more of the provisions
contained in this Loan Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
8.11. Governing Law. This Loan Agreement and all rights hereunder
shall be governed by and construed in accordance with the laws of the State of
Missouri, without reference to conflict of laws principles of said state.
8.12. Acknowledgments and Admissions. The Borrower hereby
represents, warrants, acknowledges and admits that (a) the Borrower has made an
independent decision to enter into this Loan Agreement and such other
instruments and documents, without reliance on any representation, warranty,
covenant or undertaking by the Lender, whether written, oral or implicit, other
than as expressly set forth in this Loan Agreement, (b) the Lender has not made
any representation, covenant or undertaking to the Borrower in connection with
the rights and obligations of the Borrower pursuant to this Loan Agreement or
any such instruments and documents, (c) there are no representations,
warranties, covenants or undertakings or agreements by the Lender as to this
Loan Agreement or such instruments and documents except as expressly set forth
herein or therein, (d) the relationship between the Lender and the Borrower,
pursuant to this Loan Agreement and such instruments and documents, is and shall
be solely that of creditor and debtor, respectively, (e) the Lender has relied
upon the truthfulness of the foregoing acknowledgments in deciding to execute
and deliver this Loan Agreement and to accept the Note.
8.13. Entire Agreement. This Loan Agreement and the Exhibits
attached hereto embody the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed and delivered this Loan
Agreement as of the date first above written.
ALLIANCE FARMS COOPERATIVE
ASSOCIATION
By:
Name:
Title:
FARMLAND INDUSTRIES, INC.
By:
Name:
Title:
