Exhibit 10.106
Association: First Pioneer Farm Credit, ACA Issue Date: 03/05/1997
Customer #: 0152302728 Closing Date: 03/10/1997
Loan #: 4270258
LOAN AGREEMENT
THIS AGREEMENT is made on the above written date between Pocono Village Farms,
L.P. ("Borrower") c/o Agro Power Development, Inc. 00 Xxxxx Xxxxx, Xxxx
Xxxxxxxxx, XX 00000 and First Pioneer Farm Credit, ACA a corporation organized
and existing under the laws of the United States Under the Farm Credit Act of
1971, as amended, having its office and place of business at 0 Xxxxxx Xxxx 000,
Xxxxxxx, XX 00000 ("Lender").
WHEREAS, Lender is willing to establish or renew a credit facility for the
benefit of Borrower, and to make advances from time to time to Borrower under
the terms hereof and the applicable Loan Documents.
NOW THEREFORE, it is mutually agreed as follows:
1. LOAN TERMS AND REPAYMENTS. For the Parties' mutual convenience and
Borrower's ease of repayment, the Indebtedness subject to this Agreement
may be represented by one or more Note(s) with different repayment terms
and security. The Parties shall be free to agree on such repayment terms
and conditions as they may find mutually acceptable. A list of the Note(s)
subject hereto and a summary of their terms is shown on Exhibit "A".
In addition to the terms hereof, the specific repayment terms of the
Indebtedness and all other terms and conditions shall be as described in
the Note(s) listed, and such other note(s), other evidence of indebtedness
or obligation, mortgage(s), loan agreement9s), security agreement(s),
guaranty(ies), writings related to or governed hereby, as may be executed
from time to time by Borrower, and all amendments, renewals, refinancings
and replacements thereof (collectively: the "Loan documents"). The terms of
all Loan Documents are incorporated by reference herein and made a part
hereof.
2. AVAILABILITY OF FUNDS. Unless otherwise stated herein, or elsewhere in the
Loan Documents, Borrower's privilege to request and draw advances shall
expire on the date shown on Exhibit A hereto for each respective Loan/Line.
Lender shall consider renewing or extending Borrower's privileges to draw
funds when requested by Borrower, and upon Borrower's satisfactory
completion of all Lender's requirements; however, Lender is not obligated
to extend or renew Borrower's drawing privileges, and such action is in
Lender's sole discretion.
3. TERM OF THIS AGREEMENT. This Agreement shall remain in effect until all
sums owing hereunder are paid in full and this Agreement is terminated,
subject to all
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LOAN AGREEMENT
written extensions, modifications or renewals executed by the Parties
hereto from time to time.
4. ADVANCES. Lender is not obligated to make any future advances. All future
advances shall be added to the unpaid principal balance of the Indebtedness
as evidenced by the applicable note(s) and shall bear interest thereunder
from the date of the advance. No advance needs to be made completed after
the occurrence of one or more of the following circumstances:
a.) Borrower is in default on this Agreement, or on any Loan Document
subject hereto, or on any other obligation of Borrower or any guarantor to
Lender to this loan or related loaner in which lender has an interest; or
b.) There has been a material adverse change in the financial condition of
Borrower or the value or condition of the loan collateral; or
c.) The enforceability of any lien on any unreleased security becomes
doubtful, or the priority of any such lien shall have changed.
5. SECURITY The security given by Borrower to Lender includes, without
limitation, the following as all or any of these may be renewed or amended
from time and time:
5.1 A real estate mortgage to be recorded in the Town of Mount Carmel, PA
Registry of Deed/Mortgages.
5.2 A Security Agreement, which provides a first lien on all assets,
tangible or intangible, of the Borrower, including all Greenhouse and
related equipment, excluding Inventory and Accounts Receivable.
All security now existing and hereafter given for the payment of the
Indebtedness shall continue in full force and effect until the Indebtedness
is paid in full, despite any interim period during which no Indebtedness is
outstanding, and until all Note(s), Loan Documents and any accompanying
security documents are terminated.
Borrower agrees to deliver such additional security as Lender may at any
time deem necessary. Borrower further agrees to execute, deliver, file
and/or record such documents or instruments, or take such other actions, as
may be reasonably required by Lender to effectuate the intention of this
Agreement, or to assure the enforceability and collectability of the
Indebtedness, the Loan documents or any lien, or to otherwise protect or
enforce the rights of Lender hereunder. Borrower agrees to purchase flood
insurance, or additional flood insurance, in such amounts as may be
required by Lender if at any time during the life of this loan Lender
determines that any loan collateral is or will be located in a special
flood hazard area.
6. USE OF LOAN PROCEEDS. As set forth in the Loan Application.
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LOAN AGREEMENT
7. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower makes the following
representations and warranties to Lender. WHICH REMAIN IN EFFECT UNTIL ALL
SUMS SUBJECT TO THIS AGREEMENT ARE REPAID IN FULL.
7.1 FINANCIAL STATEMENTS. All financial statements and other information
previously furnished by Borrower to Lender are accurate in every
material respect; there has not been any material adverse change in
the financial condition of Borrower since the date of the last
financial statement provided; Borrower has no material liabilities,
fixed or contingent, which are not fully shown or provided for in the
said financial statements as of the date thereof.
7.2 SOLVENCY. Borrower has sufficient capital to carry on the business and
is solvent and able to pay debts as they mature, and Borrower is
generally paying such debts. Borrower owns property the fair market
value of which exceeds the dollar amount required to pay Borrower's
debts.
7.3 COMPLIANCE WITH LOAN TERMS. Borrower is performing on, or is in
compliance with, all terms of all Borrower's other loans and
obligations to all other creditors, if any, and all loans and
obligations to Lender, whether or not subject to this Agreement.
7.4 LEGAL ENTITY WARRANTY. If Borrower is a legal entity, Borrower
represents and warrants that it is duly constituted under applicable
laws and is in good standing; that appropriate authorization has been
obtained to enter into this Agreement and all Loan Documents; and that
when executed this Agreement and all Loan Documents shall be valid and
legally binding on Borrower.
8. LOAN APPROVAL CONDITIONS. Borrower covenants with Lender as follows:
8.1 FINANCIAL PERFORMANCE.
8.1.1 Net worth must be maintained at a percentage of at least 20%
(Book), improve by a least two percent annually and achieve a 40%
net worth within five years. (Measured according to GAAP,
consistently applied).
8.2 INSURANCE. In addition to the insurance requirements of all Loan
Documents, Borrower shall maintain the following indicated insurance
coverage in full force, and naming Lender as beneficiary unless stated
otherwise:
8.2.1. Fire insurance, with extended coverage, on all Real Estate in
the amount of $2,200,000.00.
8.2.2. Public liability insurance in the amount of $2,200,000.00.
8.2.3. Mortgage title insurance on all real estate collateral in the
amount of $2,200,000.00.
8.3 FINANCIAL INFORMATION. At Lender's request, Borrower shall provide, in
a form acceptable to Lender, a current balance sheet and income
statement as
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LOAN AGREEMENT
described and at such other additional times as Lender may request in
connection with this loan:
8.3.1. Annual audited financial statements within 120 days of the end
of each fiscal year and unaudited financial statements within
30 days of the end of the first three quarters of each fiscal
year.
8.3.2. Budgets and operating reports for the Greenhouse as may
reasonably be requested for informational purposes.
8.4 NOTICE. Borrower shall provide prompt written notice to Lender of the
following events:
8.4.1. Change in management or ownership of the business.
8.4.2. Default on loans or credit arrangements with any other
creditors.
8.4.3. Occurrence of any event having a material adverse affect on
Borrower's business.
8.4.4. Location change or new location of office or site of operation.
8.4.5. Change to out of state or county for any collateral, except in
the ordinary course of business.
8.4.6 Restriction, suspension, revocation or other changes in all
permit(s), license(s), or authority(ies) required to conduct
Borrower's business.
8.4.7. Any order, consent order, agreement, notice or requirement
affecting Borrower from any federal or state agency with
jurisdiction or powers over environmental matters.
8.5 NEGATIVE COVENENTS. During the term of this Agreement, Borrower will
not take any of the following actions without the prior written
approval of Lender:
8.5.1. Sell Borrower's business, abandon or cease business operations,
or merge or consolidate with any third party or entity.
8.5.2. Dispose of all or a substantial portion of Borrower's business
assets, by sale, transfer, lease, gift, abandonment or
otherwise, except for sales of inventory in the ordinary course
of business.
8.5.3. Mortgage, pledge, lease for a period exceeding one year or
otherwise make or allow the filing of any collateral for this
Line of Credit.
8.5.4. Make distributions unless: a) The calculation of Projected 12
Month Debt Service Coverage Ratio ("12 month DSCR") is 1.10X or
greater, b) No Default or Event of Default shall have occurred
and be continuing except that, cash distributions will be
allowed to the partners of the Borrower for the payment of
liabilities for State and Federal Income Taxes arising from the
allocations of the Borrower's income to the partners ("Tax
Distributions"), provided all loan approval conditions are met
before and after the distributions. The amount of such tax
distributions will be limited to the lessor of Net Projected
Cash Flow or the amount of the Federal or State Tax obligations
resulting from the allocation of income to the partners of the
Borrower for the period.
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LOAN AGREEMENT
Projected 12 Month DSCR shall be calculated as follows: Project
Cash Flow the twelve month period updated for actual Projected
Cash Flow and projected for the remainder of the year, plus
undistributed Retained Earnings divided by principal, interest
and fees payable on the Senior Debt during the same period,
(Measured according to GAAP, consistently applied).
Projected Cash Flow: Project cash flow for any period will
consist of (x) revenues from the sale of vegetables produce and
any other operations revenue and investment income for such
period less (y) fuel costs, utility expenses, insurance costs,
and other operation and maintenance costs, property, real
estate, sales and excise taxes, general and administrative
expenses, regional support costs, professional fees, Management
Costs and capital expenditures necessary to maintain the
Greenhouse, but excluding Federal and State partnership income
taxes, and Debt Service for such period.
8.5.5. Net Project Cash Flow: Project Cash Flow less Debt Service for
such period. Will not enter into an agreement with another
creditor which offers terms/conditions more favorable than
those offered to First Pioneer Farm Credit, including without
limitations a guarantee from any affiliated entity.
9. DEFAULT. If a default hereunder should occur, Lender shall have such rights
and remedies as are provided in the Promissory Note(s) and Loan Documents,
including without limitation and at Lender's sole option, the right to make
demand or to accelerate the whole Indebtedness subject hereto.
9.1 BREACH OF THIS AGREEMENT. A breach of any warranty contained herein;
or any material misrepresentation relating hereto; or Borrower's
failure to observe, perform timely or comply with any provision of
this Agreement shall be a default under this Agreement.
9.2 DEFAULT UNDER LOAN DOCUMENTS. A default under any Loan Document or
other writing related to or subject hereto shall also be a default on
this Agreement.
GENERAL PROVISIONS.
10. NON WAIVER. Waiver, by Lender of the breach of any term or covenant, or the
failure of Lender to exercise any option given to it, or the granting by
Lender of any forbearance, restructuring or "borrower rights" (as may be
required or allowed under the Farm Credit Act or other applicable law or
regulations) shall not be deemed to be a waiver of any subsequent breach of
such covenant or other breach of any other covenant, or of Lender's rights
thereafter to exercise any such option. Any provision of this Agreement or
the Loan Documents subject hereto can be waived only by a writing , signed
by an authorized representative of Lender.
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LOAN AGREEMENT
11. SEVERABILITY. If any provision of this Agreement, the Note(s) and
Mortgage(s), any Loan Document or other obligation affecting this Agreement
or any other document given to secure the said Indebtedness shall be
determined to be invalid, inapplicable to any party or unenforceable, such
determination shall not affect the validity, applicability or
enforceability of any other provision of that instrument, or this
Agreement.
12. NO ORAL MODIFICATION. This Agreement and all Loan Documents subject hereto
cannot be changed or modified orally, but only by a writing signed by the
party against whom enforcement is sought.
13. NOT A CONSUMER TRANSACTION. Borrower agrees and acknowledges that this is
not a consumer transaction.
14. GOVERNING LAW. This Agreement is subject to the provisions of the Farm
Credit Act of 1971 and all acts amendatory thereof or supplementary
thereto; and shall be interpreted according to the law of the State of New
Jersey.
Signatures:
Pocono Village Farms, L.P. Pocono Village Farms, L.P.
By:_________________________________ By:_____________________________
J. Xxxxx Xxxx, Vice President Xxxxxx X. Xxxxxxxx, Vice President
First Pioneer Farm Credit, ACA
By:_____________________________
Xxxxx X .Xxxxx, Vice-President
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________________________
Witness to All
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LOAN AGREEMENT
EXHIBIT "A" TO LOAN AGREEMENT
The following Promissory Notes are subject to this Loan Agreement:
Loan #: 4270258 $2,220,000.00 Long loan application. All funds to be
disbursed at closing with the exception
of improvements to be completed.
Line #: 1 TERMS: A $2,220,000.00 Capital
Non-Revolving Line of Credit. Funds are
available until the earlier of 12 months
or until fully disbursed. Current
principal balance is $0.00.
INTEREST RATE: Variable rate loan, with
an initial rate of 8.75%, rate tier: LT
Rate 4.
NOTE TO BE SIGNED OR GUARNATEED BY:
Pocono Village Farms, L.P.
REPAYMENT TERMS: $36,670.00 plus
interest, quarterly starting 7/1/97
DRAWING PRIVILEGES EXPIRE: No later than
12 months after closing.
REQUIRED USE OF LOAN PROCEEDS: Purchase
greenhouse property, Mount Carmel, PA and
make planned improvements.
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LOAN AGREEMENT
