EXHIBIT 10.11
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RESTATEMENT, AMENDMENT AND ASSUMPTION AGREEMENT
BETWEEN
FARM CREDIT SERVICES OF THE MOUNTAIN PLAINS, PCA/FLBA
AND
SUNRISE ORGANIC FARMS, INC.
DATED
AS OF
MARCH 20, 1997
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RESTATEMENT, AMENDMENT AND ASSUMPTION AGREEMENT
THIS RESTATEMENT, AMENDMENT AND ASSUMPTION AGREEMENT (the "Agreement") is
entered into as of the 20th day of March, 1997, by and among Sunrise Organic
Farms, Inc. ("Sunrise") and its shareholder, Xxxxxx X. Xxxxxxxx ("Xxxxxxxx");
Horizon Organic Dairy, Inc. ("Horizon") (collectively, the "Transaction
Parties"); Farm Credit Services of the Mountain Plains, PCA ("PCA"); and Farm
Credit Services of the Mountain Plains, FLBA ("FLBA"), acting as attorney-in-
fact for the Farm Credit Bank of Wichita ("FCBW") (collectively, the
"Lenders"), in consideration of the premises hereof and mutual promises made
herein below.
RESTATEMENT
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A. Sunrise is indebted to and is the maker of a promissory note and loan
agreement (the "PCA Note", a copy of which is attached hereto and incorporated
herein as EXHIBIT "A") to PCA dated the 4th day of June, 1996, in the original
principal amount of SEVEN MILLION ONE HUNDRED FIVE THOUSAND TWO HUNDRED SIXTY-
FIVE AND NO/HUNDREDTHS DOLLARS ($7,105,265.00), which matures and becomes due
and payable according to its terms on the 1st day of June, 1998, subject to a
satisfactory credit review on the 1st day of June, 1997. The PCA note bears
interest at the variable rate of 8.05% per annum, as more particularly set out
therein, and the balance outstanding as of 8:00 a.m. on the 20th day of March,
1997 is $6,731,580.00 in principal and $26,180.00 in accrued and unpaid
interest. The parties hereto stipulate that there are no defenses to the
enforceability of the PCA Note or to the sums owing as set forth hereinabove,
and that there are no defaults in its terms.
B. The PCA Note is secured by, in addition to the PCA Stock, a security
agreement (the "PCA Security Agreement", a copy of which is attached hereto and
incorporated herein as EXHIBIT "B"), dated the 4th day of June, 1996, granting
to PCA a first and prior security interest in and to certain personal property
more particularly described therein, and a Security Agreement Extension Sheet
(the "Extension Sheet", a copy of which is attached hereto and incorporated
herein as EXHIBIT "C"), dated the 4th day of June, 1996, setting forth certain
additional collateral secured by the PCA Security Agreement. The parties hereto
stipulate that there are no defenses to the enforceability of the PCA Security
Agreement or Extension Sheet, and that there are no defaults in the terms
thereof.
C. Sunrise is also indebted to and is the maker of a promissory note and loan
agreement (the "FCBW Note" a copy of which is attached hereto and incorporated
herein as Exhibit "D") to FCBW, dated the 23rd day of June, 1995, in the
original principal amount of FOUR MILLION TWO HUNDRED SIXTY-SIX THOUSAND SIX AND
FOUR/HUNDREDTHS DOLLARS ($4,266,006.04), which matures and becomes due and
payable according to its terms on the 1st day of July, 2010. The FCBW Note
bears interest at a beginning rate of 7.79% per annum, as
more particularly set out therein, and the balance outstanding as of 8:00 a.m.
on the 20th day of March, 1997, is $3,998,710.82 in principal, with $15,909.93
in accrued and unpaid interest. The parties hereto stipulate that there are no
defenses to the enforceability of the FCBW Note or to the sums owing as set
forth hereinabove and that there are no defaults in its terms.
D. The FCBW Note is secured, in addition to the FCBW Stock and the "Additional
Security" provided in the FCBW Note, by a Mortgage and Fixture filing (the
"Mortgage", a copy of which is attached hereto and incorporated herein as
EXHIBIT "E"), dated the 20th day of December, 1994 (the date of the original
note secured by the Mortgage) granting to FCBW a first mortgage lien in and to
certain real property, fixtures, and other rights and privileges more
particularly described therein, with a final installment date of January 1,
2010. The parties hereto stipulate that there are no defenses to the
enforceability of the Mortgage, and that there are no defaults in the terms
thereof.
E. The FCBW Note is also secured by a security agreement (the "FCBW Security
Agreement, a copy of which is attached hereto and incorporated herein as
EXHIBIT "F"), dated the 20th day of December, 1994, granting to FCBW a first and
prior security interest in and to equipment, proceeds and fixtures more
particularly described therein. The parties hereto stipulate that there are no
defenses to the enforceability of the FCBW Security Agreement, and that there
are no defaults in the terms thereof.
F. The FCBW Note, Mortgage and FCBW Security Agreement were entered into
originally on the 20th day of December, 1994 by and between FCBW and Aurora
Dairy Corporation of Idaho ("Aurora"). On or about the 24th day of May, 1995,
Aurora changed its name to Sunrise, and continued in all respects to be liable
on its debt and obligations to FCBW.
G. The Transaction Parties have entered into an Acquisition Agreement, dated as
of March 20, 1997, the result of which will be that seventy percent (70%) of the
stock of Sunrise, the obligor on the PCA Note and the FCBW Note, the PCA
Security Agreement, the Extension Sheet, the Mortgage and the FCBW Security
Agreement (collectively, the "Obligation Documents"), will become owned by
Horizon. Horizon will thereby become an indirect beneficiary (but not a third
party beneficiary) of the extensions of credit by the Lenders. After the closing
of the acquisition, Sunrise may change its name to Horizon Organic Farms, Inc.
("HOF"), but will otherwise continue to operate its business in the same manner
as before the acquisition, and will continue to own its property subject to and
be obligated on the Obligation Documents.
IN CONSIDERATION for the consents to the acquisition by the Lenders and the
continued availability of credit pursuant to the Obligation Documents, and to
provide further assurances to the Lenders of the payment and performance of the
obligations represented by the Obligation Documents, the Transaction Parties
agree as follows:
RESTATEMENT
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The Obligation Documents, as attached hereto in Exhibits A through E, are
and shall be deemed to be restated hereby in their entirety, except as amended
hereby. Sunrise, and after the acquisition and change of name, HOF, will
continue to be liable on all of the obligations to
the acquisition and change of name, HOF, will continue to be liable on all of
the obligations to PCA and to FCBW, as reflected in the Obligation Documents, to
the same extent as it was obligated to PCA and FCBW before the acquisition and
change of name.
AMENDMENT
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The Obligation Documents are hereby amended as follows:
The provision of the PCA Note titled "Borrowing Base Reports" is amended in
its entirety to read:
During the term of the loan the Company shall deliver to PCA, within twenty
(20) days of each fiscal month end, an unaudited borrowing base report (in
the form attached as Exhibit A) in reasonable detail and fairly presenting
the collateral position of the Company. The Company shall remain at all
times within the limits of the borrowing base. If at any time the amount
outstanding on the loan exceeds the borrowing base, the Company shall
immediately notify PCA and repay so much of the loan as is necessary to
reduce the amount outstanding on the loan to the limits of the borrowing
base.
ASSUMPTION
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Each of the Transaction Parties does hereby assume and/or reaffirm the PCA
and FCBW debt and obligations reflected in the Obligation Documents in
accordance with the terms thereof and the Restatement and Amendment herein
contained.
Further, the Transaction Parties agree that at any time and from time to
time, upon the request of PCA or FCBW, and at the sole expense of the
Transaction Parties, the appropriate Transaction Party shall promptly execute
and deliver all such further documentation and take such other action as PCA or
FCBW may deem necessary or desirable to preserve and perfect its security
interest in the collateral and to carry out the provisions and purposes of the
Obligation Documents and this Agreement.
Further, the Transaction Parties agree to pay all reasonable out-of-pocket
taxes, costs and expenses (including the fees and expenses of counsel retained
by Lenders) incurred by Lenders in connection with the acquisition of Sunrise,
this Agreement, the change of name from Sunrise to HOF and the further
administration of this Agreement, including without limitation all costs and
expenses incurred in perfecting, maintaining, determining the priority of, and
releasing any obligor or any security for Sunrise's (and HOF's) obligations to
Lenders and any stamp, intangible, transfer, or like tax payable in connection
with this Agreement or the Obligation Documents.
This Agreement, executed as of the day and year above first written, may be
executed in counterparts and on separate signature pages, but all of which
together shall constitute one and the same Agreement.
SUNRISE ORGANIC FARMS, INC. FARM CREDIT BANK OF WICHITA,
BY ITS ATTORNEY-IN-FACT FARM CREDIT
SERVICES OF THE MOUNTAIN
By: /s/ Xxxxxx X. Xxxxxxxx PLAINS, FLBA
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Title: President
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By: /s/ Xxxx X. Xxxx
----------------
Title: V.P.
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/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX, an individual
FARM CREDIT SERVICES OF THE
MOUNTAIN PLAINS, PCA
HORIZON ORGANIC DIARY, INC.
By: /s/ Xxxx X. Xxxx
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By: /s/ Barnet X. Xxxxxxxx Title: V.P.
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Title:
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NOTE AND LOAN AGREEMENT Loan No. _____________
(Subsequently called the "Note" or "Loan Effective Date 06/04/96
Agreement") --------
FARM CREDIT SERVICES
See attached addendum
For value received, the undersigned ("Borrower", whether one or more),
jointly and severally, promises to pay TO THE ORDER OF Farm Credit Services
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of the Mountain Plains, PCA
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("Lender") at Lender's offices, the principal sum of seven million one
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hundred and five thousand two hundred sixty five and 00/100 dollars
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($7,105,265.00), or whatever lesser sum may be outstanding, as follows:
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[X] RENEWAL OF EXISTING INDEBTEDNESS. If checked, of the above amount
$5,100,470.00 is a renewal of an existing indebtedness owing to Lender.
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This Note is executed and accepted as a renewal of, and amendment to, and
not in payment or satisfaction of the following promissory note(s) executed
by Borrower and payable to Lender:
Date: 05/31/95 Face Amount: $5,789,480.00 Maturity: 06/01/97
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[X] EXPIRATION DATE: Any undisbursed portion of this commitment shall expire on
June 1, 1997
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Provided that Lender may, at its sole option, extend the expiration date.
[_] TERM DATE. (term loans only) The term of this loan will be from
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until .
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REPAYMENT WILL BE AS FOLLOWS:
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Proceeds from the sale of livestock; accounts receivable; inventory
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and any remaining balance of principal and interest shall be repaid no
later than the expiration date or ending term date, whichever applies, as
noted above.
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TYPE OF LOAN. 1. Operating Loan Commitment 2. Intermediate Term Loan
3. Other
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4. [X] Revolving Line of Credit Loan. If checked, this loan is
reinstateable and to the extent principal payments are made on this loan
from time to time, they shall reinstate Borrower's right to further
disburse on this loan. In no event shall the total indebtedness outstanding
at any time exceed the face amount of this Note.
5. [_] Operating Loan Commitment with maximum outstanding balance of $
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If checked, this note has a maximum outstanding balance provision other
than the amount on the face of the Note. Lender may limit or withhold
disbursements if the requested disbursement together with the current
unpaid principal balance exceeds the maximum outstanding balance as shown
above.
PURPOSE. The loan proceeds will be used for [_] Personal
[X] Agricultural [_] Specify ___________________
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COLLATERAL.
[_] UNSECURED. If checked, this Loan Agreement is not secured and the
provisions of this Loan Agreement which relate to Lender's rights in
collateral are not applicable other than with regard to Lender's STOCK and
ADDITIONAL COLLATERAL provisions.
[X] SECURED. Collateral for this loan shall be: as stated in existing Security
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Agreement.
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INTEREST RATE
INTEREST SHALL BE PAYABLE AS FOLLOWS:
[_] With each repayment [_] Annually from date
[_] At or on expiration or ending [X] Other monthly
term date (whichever applies) ----------------------------
INTEREST SHALL ACCRUE ON THE UNPAID PRINCIPAL BALANCE AT:
[X] A VARIABLE INTEREST RATE. The beginning variable rate in effect on
execution of this Note and Loan Agreement is 8.05 %. Lender, at its sole
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option, may increase or decrease this rate from time to time as provided by
the Farm Credit Act of 1971, as amended. A variable rate applies to all
outstanding principal not carried at a fixed rate, as specified below.
Differential Interest Rate. Lender may also, at its sole option,
reclassify this loan which may result in an increase or decrease in the
interest rate according to Lender's differential interest rate policy. This
policy permits different rates among borrowers based on loan type, purpose,
amount, quality, funding, operating costs or a combination of these
factors, or for other reasons as are approved by the Farm Credit
Administration. Any differential interest rate shall become effective from
the date of any reclassification.
[_] A FIXED INTEREST RATE. For a term from ____________________ until
____________________,
the interest rate on no more than $____________________ of principal will
be fixed at ________% per annum.
Fixed Rate Conversion. On expiration of any fixed rate time period of
this Note, that portion of the principal carried at that fixed rate will
automatically convert to the variable rate, as outlined above, unless
Borrower requests, and Lender grants, and extension of this Note at a fixed
rate. In the event a fixed rate converts to the variable rate, Borrower's
rate is also subject to periodic charges according to the differential rate
policy as outlined below.
Fixed Rate Prepayment. In the event Borrower prepays any principal
subject to the fixed rate, Borrower shall pay a reinvestment fee of
________% on the principal balance prepaid.
[_] LIFE OF THE LOAN CAP. If checked, the interest rate will never be higher
than ____________ percentage points above the beginning interest rate of
________%.
DEFAULT INTEREST RATE AND ACCELERATION. In the event of default as defined
in this Note and Loan Agreement, the interest rate on any fixed segment
shall be 2 % above the fixed rate. On any variable rate segment, the
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default interest rate shall be 2 % above the then existing variable rate on
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this loan. On default by Borrower and at Lender's option, all unpaid
principal and interest shall become immediate due and payable without
notice or demand by Lender. Lender may continue to charge interest, and
default interest if applicable, on any delinquent and/or accelerated
amount.
[ -] SPECIAL CONDITIONS. If checked, in addition to the STANDARD CONDITIONS,
Borrower agrees to the following special conditions:
Borrower agrees to the standard conditions on the reverse hereof.
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See attached addendum for additional conditions.
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ADDITIONAL PROVISIONS
DISCLOSURE CONSENT. By signing below, borrower agrees that Lender may disclose
financial information to other Farm Credit System institutions. Borrower
further authorizes Lender to request financial information from financial
institutions doing business with the Borrower.
THIS WRITTEN CREDIT AGREEMENT IS THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN
BORROWER AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR
CONTEMPORANEOUS ORAL CREDIT AGREEMENT BETWEEN THE BORROWER AND THE LENDER. THE
PARTIES AFFIRM THAT NO UNWRITTEN ORAL CREDIT AGREEMENT EXISTS BETWEEN THEM.
I agree to the terms of the Note and Loan Agreement, acknowledge receiving a copy.
PREPARED BY:
[Initials]
Signature(s) Lender Farm Credit Services of the Mountain Plains, PCA
-------------------------- ---------------------------------------------------
See attached Addendum (Lender must sign if security is in Kansas)
-------------------------------------- VERIFIED BY:
By [Initials]
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Exhibit A to Restatement,
Amendment and Assumption
Agreement
This Addendum is incorporated into and made a part of the Note and Loan
Agreement dated June 4, 1996, executed between Farm Credit Services of the
Mountain Plains, PCA (PCA) and Sunrise Organic Farms, Inc. (Company) for the
original principal amount of $7,105,265.00.
This loan matures June 1, 1998. The continuance of financing during the loan
period is subject to an annual renewal (review) which is set for June 1, 1997.
Continued financing during the period will be subject to and at the sole
discretion of the Farm Credit Services of the Mountain Plains, PCA, based on
PCA's loan performance analysis, borrower compliance with loan covenants as set
forth in this Note Addendum and in adherence with any and al provisions as set
forth interest he attached Note and Loan Agreement.
INTEREST Interest shall accrue on the unpaid principal balance at a
variable interest rate. The beginning rate: variable rate in
effect on execution of this Note and Loan Agreement is 8.05%.
Thereafter, and from time to time, the Lender may establish
different rates of interest, either higher or lower than that
stated above.
At any time, the Borrower may designate (hereinafter referred to
as "carve out") in dollar amount any portion of the unpaid loan
balance accruing interest at the variable rate herein to accrue
interest at a fixed rate for a term corresponding to a 30,60, 90
or 180 day Treasury Xxxx maturity as selected by Borrower and at
a rate equal to the closing yield of a like maturity Treasury
Xxxx as quoted by Bloomberg Financial Markets, plus 3.25%
multiplied by 95%. If, at any time, the Treasury Xxxx maturity is
no longer available on Bloomberg Financial Markets, Lender will
choose a new source which is based on comparable information.
1. The rate of interest fixed in accordance with the foregoing
shall begin accruing on the date Borrower carves out the
portion of the loan balance and shall continue through the
term of the carve out.
2. Upon expiration of the carve out, the unpaid loan balance
previously carved out shall accrue interest at the then
variable rate.
3. A carve out and selection of Treasury Xxxx maturity shall
occur only in writing, executed by Borrower or his duly
authorized agent, and delivered to Lender.
4. No more than two "carve outs" will be in existence at any
time.
BORROWING BASE
REPORTS: During the term of the loan, the Company shall deliver to PCA,
within twenty (20) days of the end of the each fiscal month end,
an unaudited borrowing base report (Exhibit A)in reasonable
detail and fairly presenting the collateral position of the
company. The Company shall remain within the conditions of the
borrowing base (Exhibit A). In the event that the operation is
not in compliance with borrowing base limits, the loan can be
considered in default.
CONSOLIDATION/
MERGER: The Company will not merger or consolidate with any other person
or entity without the prior written consent of the PCA.
TRANSFER OF
OWNERSHIP: Transfer of majority stock ownership from Xxxxxx X. Xxxxxxxx to
any other person or entity without the prior written consent of
the PCA, will give the PCA the right, at its option, to treat the
Note and Loan Agreement as being in default, and PCA may
accelerate the indebtedness. This includes the Stock Option
agreement dated May 31st, 1995 between Natural Horizons, Inc. and
Xxxxxx X. Xxxxxxxx.
TRANSACTIONS
WITH
AFFILIATES: The Company will not enter into an transaction(including the
purchase, sale, or exchange of property or the rendering of any
service) with any affiliate except upon fair and reasonable terms
which are at lest as favorable to the Company as would be
obtained in a comparable arm's-length transaction with a non-
affiliate.
REGULATORY
COMPLIANCE: During the term of the loan, failure of the company to maintain
all permits, licenses, minimum capital standards, minimum working
capital standards, or any other requirements of the regulatory
agencies having jurisdiction over the operation of the collateral
property located in the State of Idaho shall constitute an event
of default.
CURRENT &
INTERMEDIATE
RATIO: During the entire term of the loan, the ratio of Current Assets &
Intermediate Assets to Current Liabilities & Intermediate
Liabilities shall not be less than 1.25:1, increasing to 1.40 by
April 30, 1997.
COST BASIS
OWNERS EQUITY: The company shall maintain a minimum cost basis owners equity as
defined of 25.0%. By April 30, 1997, cost basis owner's equity
will increase to a 30.0% minimum.
MARKET VALUE
OWNERS EQUITY: Cost basis balance sheets will be adjusted to a market value
balance sheet of the Company as of 12-31-96 and annually
thereafter. Calculations will be made by using market values as
determined at the sole discretion of the PCA. Said balance
sheets must reflect and maintain owners equity positions of
40.0% by 12-31-96 and a 40.0% owners equity will be maintained
thereafter.
CAPITAL
PURCHASES: Capital purchases (except breeding livestock purchases) and
leases during the loan year (6/1-5/31) will not exceed
$250,000/year.
SUBORDINATED
DEBT PAYMENTS: Any paydown of subordinated debt principal requires prior
written PCA approval. Exchanges of subordinated debt (replacing
a like amount of existing subordinated debt with new
subordinated debt) can occur without prior approval.
Page 2 of Addendum which is incorporated into and made a part of the Note and
Loan Agreement dated June 4, 1996, executed between Farm Credit Services of the
Mountain Plains, PCA and Sunrise Organic Farms, Inc. for the original principal
amount of $7,105,265.
CAPITAL
WITHDRAWALS: No capital withdrawals are permitted without prior written
approval from PCA.
CAPITAL
INJECTIONS: Total equity and subordinated debt injections of $1,200,000 will
occur by 9/1/96. Of this amount, $1,100,000 will be injected by
7/31/96. It is understood that $200,000 of the $1,200,000 will be
used to replace existing subordinated debt of $200,000.
DOCUMENTATION
OF SUBORDINATED
DEBT AND EQUITY
TRANSACTIONS: Documentation relating to new subordinated debt will be submitted
to PCA with each monthly report. Documentation of equity
injections will also be submitted with each monthly report.
FINANCIAL
REPORTING: During the term of the loan, the Company shall deliver to PCA,
within twenty (20) days of the end of each fiscal month,
unaudited consolidated financial statements showing the Company's
balance sheet and statements of income as of the end of such
month and setting forth in each case the amounts for the
corresponding dates or periods one year earlier, all in
reasonable detail and fairly presenting the financial position of
the Company. Furthermore, the Company shall deliver to PCA, as
soon as practicable after the end of the fiscal year, and in any
event within 140 days thereafter, duplicate copies of the
Company's consolidated balance sheet and consolidated statements
of income and stockholders' equity as of the end of such fiscal
year and setting forth in each case the amountss for the previous
fiscal year, all in reasonable detail and audited by a Firm of
Recognized Certified Public Accountants. Such reports to be
prepared in accordance with generally accepted accounting
principles consistently applied.
PCA TRAVEL
EXPENSES: The Company agrees to reimburse the PCA for expenses incurred for
on site inspections of the Idaho operations. Upon receipt of
travel expense xxxx statement the Company will remit payment
within 30 days.
DEFINITIONS: "Current Assets": All those Current Assets reported on the April
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30, 1996 Internal Balance Sheet report as completed by Sunrise
Organic Farms, Inc.
"Intermediate Assets": All Cattle inventories, PCA Stock and Milk
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Coop Retains, producing and non-producing cows, heifers and
bulls which the company has or intends to hold in inventory more
than one year.
"Current Liabilities": Current liabilities of the Company
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constituting Moneys borrowed from commercial banks or other
persons evidenced by a promissory note or other like written
obligation to pay money or other obligations of the Company,
which must be paid or satisfied within one year, (specifically
excluding subordinated liabilities to PCA due stockholders and
deferred income tax liabilities.)
"Intermediate Liabilities": PCA Revolving Line of credit or any
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other indebtedness with a maturity more than one year and less
than 5 years, (specifically excluding subordinated liabilities to
PCA due stockholders and deferred income tax liabilities).
"Firm of Recognized Certified Public Accountants": The firm of
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Rhode Scripter and Associates or any other firm of certified
public accountants satisfactory to PCA, if and so long as such
firm is independent with respect to the Person or Persons whose
financial statements are being examined by it.
"Total Liabilities": All liabilities of the Company constituting
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Moneys borrowed from commercial banks or other persons evidenced
by a promissory note or other like written obligation to pay
money or other obligations of the Company, (specifically
excluding subordinated liabilities to PCA due stockholders and
deferred income tax liabilities).
"Person": Any individual, corporation, partnership, joint
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venture, trust estate, unincorporated organization, governmental
body.
"Owners Equity": The ratio of Tangible assets less total
-------------
liabilities of the Company divided by Tangible assets.
"Deferred Income Tax Liabilities" are those Deferred Income Tax
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liabilities identified as current, intermediate, or long term
that are not due within one year from the date of the balance
sheets date.
"Tangible Assets": assets of the Company except assets such as
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goodwill, patents, and similar assets of any intangible nature.
"Company": Refers to Sunrise Organic Farms, Inc., a "C"
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Corporation.
Sunrise Organic Farms, Inc. a Colorado Corporation
/s/ Xxxxxx X. Xxxxxxxx Attest /s/ Xxxxx X Xxxxxx /s/ Xxxxxx X Xxxxxxxx
-------------------------------- --------------------------- -------------------------------
Xxxxxx X. Xxxxxxxx, as President of Xxxxx X. Xxxxxx, Secretary Xxxxxx X. Xxxxxxxx, Individually
Sunrise Organic Farms, Inc.
Exhibit A Sunrise Organic Farms, Inc.
Borrowing Base Report
as of
Collateral Value Borrowing
Base
MILK RECEIVABLES:
W.D.C.I. (Idaho)
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Other - under 90 days (see attached list)
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x 80%
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Feed
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Supplies
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Prepaid
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Total Feed Inventory (See Attached List) x 65%
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DAIRY HERD INVENTORY:
Milk Herd
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Other
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Total
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Cows Valued @ not to exceed $1,300 Per Head x 70%
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Investment in Growing Crop
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Less Capitalized Cost
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Eligible Growing Crop Investment x 0%
(Secured by a perfected security agreement) ----------- -----------
Accounts Payable x 100%
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Cash in checking x 100%
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HEIFER AND STEER INVENTORY:
(see Attached Sheets)
Livestock Value x 70%
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Equipment (PCA value + Purchases = Sales) x 60%
(Leased Equipment not included) ----------- -----------
Total Collateral Value
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Total Borrowing Base
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PCA Loan Balance -----------
Less PCA Stock -----------
Intransit Payments & Drafts (See Attached Sheet) -----------
Accrued Interest -----------
Total Indebtedness -----------
Available
Collateral Margin Borrowing Base
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The undersigned represents and warrants that the foregoing information is true,
complete and correct, and the receivables reflected herein comply with the
representations and warranties set forth in the Addendum to the Note and Loan
Agreement, and any amendments, if any, thereto, between the undersigned & Farm
Credit Services of the Mountain Plains, PCA (lender)
It is further understood that the Total Indebtedness may not exceed the total
borrowing base or $6,750,000 (net of Stock), which ever is less.
I certify the above information and the information contained in the
accompanying worksheets to be true and correct, and that no information which
would make the foregoing misleading in any material respect has been omitted,
and in on event of default has occurred or is continuing.
Sunrise Organic Farms, Inc.
BY:
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/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, as President
of Sunrise Organic Farms, Inc.
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, as Individually
SECURITY AGREEMENT
Each of the undersigned ("Borrower," whether one or more) and Farm Credit
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Services of the Mountain Plains, PCA ("Lender") enter into this Security
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Agreement, and agree as follows:
1. CREATION OF SECURITY INTEREST. Borrower grants to the Lender a present
security interest in the property described in Section 2 to secure payment
and performance of all obligations, indebtedness, and liabilities of any
kind, whenever and however incurred, absolute or contingent, due or to become
due, now existing or hereafter arising of the Borrower to the Lender,
including the liabilities arising because of funds advanced at the option of
the Lender.
2. COLLATERAL. The Borrower grants and assigns to the Lender a security
interest in the following property together with all additions, accessions,
replacements, substitutions, proceeds and products therefrom including
natural increase of livestock and any and all property of similar type or
kind now owned or hereafter acquired by the Borrower and used for either
personal, family or household purposes; farming or ranching operations; or
any other business in which the Borrower is or might be engaged.
(Note: When crops or fixtures are taken as collateral, the real estate on
which such are growing or located must be described.)
All processed and nonprocessed feed, grain and harvested crops owned by the
debtor specifically including, but not limited to the following: Calf-Milk
Replacer, Rape Seed, Canola Meal, Almond hulls, Cotton Seed, Soy Flake,
Megalac, Barley, Calf Grain, Oat Silage, Hominy, Corn, Wheat, Hay, Haylage,
Hay-Oat, Lactating DMS, PMS-Molasses, Maternity concentration, Corn Silage,
Wheat Silage, Heifer Molasses, Dry Cow Mineral.
All annual and perennial crops of whatever kind and description grown or
growing or to be planted or produced on land owned, rented, leased or
hereafter purchased specifically including but not limited to the
following: Alfalfa, Corn Silage, Haylage, Barley, Dryland Sorghum Silage,
Barley Silage
OWNS: See attached Exhibit A
All livestock branded or unbranded now owned or in possession of the debtor
or hereafter acquired specifically including, but not limited to, the
following: 1,537 Organic Holstein Cows, 2,321 Commercial Holstein cows, 24
Xxxxxxxx Xxxxx, 00 Holstein Steers, 1,111 Organic Replacement Holstein
Heifers, 338 Commercial Replacement Holstein Heifers
BRAND:
#59596-I left hip #60635-I left hip
All farm and ranch machinery and equipment of whatever kind and description
specifically including, but not limited to the following:
ALL FARM MACHINERY AND EQUIPMENT LISTED ON THE ATTACHED SECURITY AGREEMENT
EXTENSION SHEET DATED JUNE 4, 1996.
All Dairy Milking and Processing Equipment including but not limited to
Bulk tanks, Milk Silos, Vacuum Pumps, Refrigerator Units, Ice Machines,
Control Units, Milking Claws and Stainless Steel Pipe.
All inventory now owned or hereafter acquired by the debtor including but
not limited to crops and livestock.
All accounts and general intangibles now owned or hereafter acquired by the
debtor, including but not limited to, all accounts receivable from the sale
of crops, livestock, and milk.
Borrower grants Lender the authority to directly collect accounts
receivable in the event of default.
3. [_] FEEDLOT LOAN. If checked, this security agreement secures a loan to a
feedlot.
4. LOCATION. The Borrower's residence is as stated below and the collateral in
Section 2 will be kept at:
LOCATION COUNTY Xxxxx/Jerome STATE CO/Idaho
--------------------------------------------------------------
NOTICE: SEE OTHER SIDE FOR IMPORTANT INFORMATION; THE SAME BEING INCORPORATED BY
REFERENCE.
Date: June 4, 1996
-------------------------
SUNRISE ORGANIC FARMS, INC., a Colorado Corporation
Name: Name:
----------------------- --------------------------
By: /s/ Xxxxxx X. Xxxxxxxx Address: /s/ Xxxxxx X. Xxxxxxxx
------------------------- -----------------------
Xxxxxx X Xxxxxxxx, President Xxxxxx X Xxxxxxxx, Individually
Address:
--------------------
Name: /s/ Xxxxx X. Xxxxxx Name: PREPARED BY:
--------------------- --------------------------
attest: Xxxxx X Xxxxxx, Secretary [Initials]
VERIFIED BY:
Address: Address: [Initials]
-------------------- -----------------------
THE BORROWER, BY SIGNING THIS SECURITY AGREEMENT, ACKNOWLEDGES THAT HE OR SHE
HAS READ ALL OF THE PROVISIONS OF SUCH AND HAS RECEIVED A COPY OF SUCH.
Exhibit B to Restatement, Amendment and Assumption Agreement
EXHIBIT A
Page 1 of 5
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
A tract of land in the E 1/2E 1/2 of Section 17, and the NW 1/4NW 1/4 of
Section 16, more particularly described as follows:
Beginning at the Northeast corner of said Section 17, also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest corner
of said E 1/2E 1/2 Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2 Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the Westerly
boundary of said Section 16 to the Northerly boundary of said Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: NW 1/4; W 1/2NE 1/4; SE 1/4NE 1/4; NE 1/2NE 1/4, EXCEPTING THEREFROM
the following described parcel of land:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674
feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet,
more or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF
BEGINNING.
EXCEPTING THEREFROM the highway.
Section 17: NE 1/2NE 1/4; S 1/2NE 1/4; SE 1/4; SE 1/4NW 1/4; E 1/2SW 1/4;
Section 20: E 1/2NE 1/4; N 1/2SE 1/4; NE 1/4SW 1/4;
Page 2 of 5
EXCEPTING THEREFROM a tract of land in the E 1/2 E 1/2, Section 17 and
NW 1/4NW 1/4, Section 16, Township 9 South, Range 21, East of the Boise
Meridian, Xxxxxx County, Idaho, more particularly described as follows:
Beginning at the Northeast corner of said Section 17 also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest
corner of said E 1/2E 1/2, Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2, Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the
Westerly boundary of said Section 16 to the Northerly boundary of said
Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: That part of the NE 1/4NE 1/4, described as follows:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674 feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet, more
or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF BEGINNING.
EXCEPTING THEREFROM the highway.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 20: SE 1/4SW 1/4; S 1/2SE 1/4;
Section 21: S 1/2SW 1/4; SW 1/4SE 1/4;
Section 28: All of Section 28;
Section 29: E 1/2NE 1/4; SE 1/4;
Section 32: N 1/2NE 1/4;
Page 3 of 5
Section 33: N 1/2NW 1/4; SE 1/4NW 1/4; NE 1/4;
EXCEPTING THEREFROM that part of the SE 1/4SE 1/4 of Xxxxxxx 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 00, Xxxx of the Boise Meridian, Xxxxxx
County Idaho, described as follows:
Commencing an the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said
Section 28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT
OF BEGINNING;
Thence continuing South 79 degrees 00'21" West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT
OF BEGINNING.
AND EXCEPTING THEREFROM that portion of the NE 1/4SE 1/4 of
Section 28, described as follows:
Beginning at the East quarter corner of said Section 28, which
point shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North boundary of the NE 1/4SE 1/4, 909.75
feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4;
909.75 feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4,
909.75 feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75
feet to THE TRUE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: S 1/2;
EXCEPTING THEREFROM the highway.
PARCEL NO. 6:
TOWNSHIP 9 SOUTH, RANGE 21, EAST OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 17: SW 1/4NW 1/4; NW 1/4SW 1/4;
Section 18: N 1/2SE 1/4; E 1/2SW 1/4; SW 1/4SE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 22: SE 1/4SW 1/4; S 1/2SE 1/4;
Page 4 of 5
Section 27: E 1/2; NW 1/4SW 1/4; S 1/2NW 1/4; NW 1/4NW 1/4; S 1/2SW 1/4;
NE 1/4SW 1/4, EXCEPTING THEREFROM the following described parcel of
land:
From a Point of Beginning located 714.75 feet, more or less, North
from the Southwest corner of Section 27, to the point of
intersection of said Section line or County road center line with
the North boundary of the Oregon Short Line Railroad North Side
Branch right of way;
Thence running North along the Section line or center line of said
County road, 275.27 feet;
Thence North 78 degrees 46' East and parallel to the said railroad
right of way center line, 2691.57 feet, more or less, to the
point of intersection with the North-South mid-section line;
Thence South along said mid-section line 275.27 feet, more or less,
to the point of intersection with the North railroad right-of way
boundary;
Thence South 78 degrees 46' West and along said North railroad
right of way boundary, 2691.57 feet, more or less, to THE POINT
OF BEGINNING.
AND EXCEPTING THEREFROM railroad rights of way.
TOGETHER WITH a permanent easement and right of way, including the
perpetual right to enter upon the excepted portion of the above
described property in the SW 1/4 of Section 27, Township 9South,
Range 21, East of the Boise Meridian, for the purpose of
constructing, maintaining and repairing underground pipelines for
irrigation water as set forth in Easement Agreement recorded May
15, 1963 in Book 174 Page 53 as Instrument Number 154714, Xxxxxx
County records.
Section 34: N 1/2NW 1/4; N 1/2NE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 27: NE 1/4NW 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 28: That part of the SE 1/4SE 1/4, described as follows:
Commencing at the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79 degrees 00'21 West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 Feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Page 5 of 5
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING
AND
That portion of the NE 1/4SE 1/4, described as follows:
Beginning at the East quarter corner of said Section 28, which point
shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North Boundary of the NE 1/4SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4, 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75 feet to
THE TRUE POINT OF BEGINNING.
PARCEL XX. 00
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 32: E1/2SE1/4;
Section 33: N1/2SW1/4; S1/2NW1/4; S1/2NE1/4;
EXCEPTING THEREFROM the highway.
SECURITY AGREEMENT EXTENSION SHEET
THIS form is used for listing of additional collateral to be included in the
Security Agreement executed 6-4-96 between the undersigned and Farm Credit
--------------
Services of the Mountain. Plains PCA The collateral described is incorporated in
-------------------------------------
and made a part of this Agreement by reference and is subject to all of the
terms and provisions of such Agreement.
YEAR MAKE MODEL TYPE ID NUMBER
CATERPILLER 920 LOADER 62K9558
XXXX DEERE 3010 TRACTOR 11T18605
72 PETERBUILT TRUCK 41857P
SNAPPER RIDING LAWNMOWER
XXXX DEERE 450 MANURE SPREADER 1WOO4500X014242
85 GMC BRIGADEER DUMP TRUCK 1GDT9C4C9FV6052
XXXX DEERE 450 MANURE SPREADER 1W00450X015854
FORD 4100 TRACTOR 1 DA23BJ7JG11
CATERPILLER 400 KW GENERATOR 4RG02158
HAY TRAILER
84 KENWORTH K100 TRUCK 1XKKD29X45K3570
WELDING MACHINE 88012714
END DUMP TRAILER
HAY WAGON (8'x14')
XXXXX XXXX FEEDER (4 BALE)
87 FORD TRUCK W/XXXXXXX 520 BOX
94 KAWASAKI KA62 MULE
75 CHEVY DUMP TRUCK
77 FORD DUMP TRUCK ??0DVC43585
DUMP TRUCK
AIR COMPRESSOR
XXXXXXXXXX AUGER (53' 8")
CASE 580 BACKHOE 8740569
BAND SAW
BATTERY CHARGER
XXXX DEERE BLADE B011519600W
92 IHC 5700 CHISEL
CASE 496 DISC JAG159598
XXXX DEERE 455 16' DISC 00000
XXXXXXXXXX XXXXX PRESS 60119
IHC 510 GRAIN DRILL 03902455C002191
HITCH-HIKE (FOR CASE)
XXXXXX FLOOR XXXX (10T)
XXXXXX FLOOR XXXX (2 1/2T)
XXXX DEERE XXXXX
XXXX DEERE MOWER
Page 1 of 3
Date: June 4, 1996
----------------------
SUNRISE ORGANIC FARMS, Inc., a Colorado Corporation
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
----------------------------- ------------------------------
Xxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxxxxxx, individually
/s/ Xxxxx X. Xxxxxx
-----------------------------
Attest: Xxxxx X. Xxxxxx, Secretary
Exhibit C to Restatement, Amendment and Assumption Agreement
SECURITY AGREEMENT EXTENSION SHEET
THIS form is used for listing of additional collateral to be included in the
Security Agreement executed 6-4-96 between the undersigned and Farm Credit
-------- --------------
Services of the Mountain. Plains PCA
-------------------------------------
The collateral described is incorporated in and made a part of this Agreement by
reference and is subject to all of the terms and provisions of such Agreement.
ATLAND PRESS
XXXXXX 5 HP PORTABLE GEN.
MOTOROLA RADIO
ACE ROLLER HARROW
ACE 500 SPRAYER 65207
SPRAYER (100 GA)
XXXXXX TRACTOR 7722
FORD 4000 TRACTOR
XXXX DEERE 4440 TRACTOR 013670R
XXXX DEERE 8640 TRACTOR 008106RW
FORD 4600 TRACTOR C502164
IHC 806 TRACTOR 2606254
TRAILER-PUP-HAY
4 WHEEL HAY TRAILER
TANDEM WHEEL HAY TRAILER
TRAILER-PIPE
GREAT DANE DROP DECK TRAILER 1GRDM84230M0416
XXXXXX XXXX. TRAILER
83 FORD TRUCK w Harsh 575 box 1FDTW6002DVA445
IHC DUMP TRUCK 106620H326245
WEED BURNER 200 GA
XXXXXX 150 WELDER
93 TRAVALONG SILVC CATTLE TRAILER 4DYG51827P10114
XXXX 14' DOZER BLADE 22571129
EZER ON LOADER
XXXX DEERE 7100 PLANTER 044223A
95 ALMAR 0 XXX XXXXXX XXXXXX
XXXXXX CENTER PIVOT (1298') 75403
HONDA 110 ATC 1JH3TB0200CC3311
HONDA ATC 4WHEEL
83 MAZDA PICK-UP JM2UC123DO71355
82 CHEVY PICK-UP W/ FLATBED 1GCGC24MICF3461
93 KAWASAKI MULE
00 XXX 000 X0 XX XXXXXXX00XX0000
00 XXX 000 X0 XX XXXXXXX0XXX0000
00 XXXXXXXX XX000 0x0 XX0XXXX00XX0000
00 XXXXXXXX XX000 0x0 XX0XXXX00XX0000
Page 2 of 3
Date: June 4, 1996
----------------------
SUNRISE ORGANIC FARMS, Inc., a Colorado Corporation
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------ --------------------------------
Xxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxxxxxx, individually
/s/ Xxxxx X. Xxxxxx
------------------------------ --------------------------------
Attest: Xxxxx X. Xxxxxx, Secretary
------------------------------ --------------------------------
SECURITY AGREEMENT EXTENSION SHEET
THIS form is used for listing of additional collateral to be included in the
Security Agreement executed 6-4-96 between the undersigned and Farm Credit
-------- --------------
Services of the Mountain Plains PCA. The collateral described is incorporated in
-----------------------------------
and made a part of this Agreement by reference and is subject to all of the
terms and provisions of such Agreement.
95 CHEVY TAHOE VEHICLE
MAIL JEEPS (3)
486 DX-66 COMPUTER
COMPUTER
RADIO
95 NEW LAP-TOP COMPUTER
95 COMPUTER
92 VALLEY 6000 10 TOWER SPRINKLER 70005
92 VALLEY 6000 10 TOWER SPRINKLER 70020
Page 3 of 3
Date: June 4, 1996
----------------------
SUNRISE ORGANIC FARMS, Inc., a Colorado Corporation
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------------ --------------------------------
Xxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxxxxxx, individually
/s/ Xxxxx X. Xxxxxx
------------------------------------ --------------------------------
Attest: Xxxxx X. Xxxxxx, Secretary
------------------------------------ --------------------------------
NOTE AND LOAN AGREEMENT
FARM CREDIT SERVICES
---------------------------------------------------------------------------------------
Loan No. DATE AMENDS NOTE DATED ASSN. BR. NO. REPAYMENT PLAN
2371719 06/23/95 12/20/94 120-10 Standard/Monthly
---------------------------------------------------------------------------------------
For value received, the undersigned ("Borrower", whether one or more) as
principals, jointly and severally, promise to pay to Farm Credit Bank of Wichita
("Lender") at the office in Wichita, Kansas, or to its order, the principal sum
of Four million two hundred sixty-six thousand six dollars and 04/100---
----------------------------------------------------------------------
dollars ($ 4,266,006.04 ), with a beginning interest rate at 7.79 % per annum
-------------- ------
starting July 1, 1995 on the unmatured principal, with principal and interest
--------------
payable as follows:
Due in 180 consecutive monthly installments on the 1st day of each month as
follows:
179 installments of principal and interest, in the amount of $40,252.69 each
the first due August 1, 1995;
and a final installment consisting of all unpaid principal balance of the
indebtedness, and all accrued interest thereon shall be due and payable on July
----
1, 2010.
-------
PROVIDED, however, (1) if the period from the date of disbursement or conversion
of the principal sum to the date of the initial installment is more or less than
the regular installment period, the amount may be increased or decreased, so as
to reflect interest actually accruing for that period, or (2) when any different
rate of interest is established as provided below, the amount of each subsequent
installment shall be increased or decreased to reflect the increase or decrease
in the interest rate, but the due date of the increased or decreased installment
shall remain as provided above, or (3) if any advance payment is made, it shall
not operate to reduce the dollar amount of the payments evidenced by this Note
and Loan Agreement, except as Lender may determine at its sole option.
[X] If checked, this Note and Loan Agreement amends a note dated December 20,
-------------
1994 and supersedes it to the extent the terms and conditions are
-----
inconsistent with this Note and Loan Agreement.
--------------------------------------------------------------------------------
INTEREST RATE AND PAYMENT CHANGES
ADJUSTABLE INTEREST RATE. The interest rate on this loan is adjustable as
follows:
CHANGE DATE. The interest rate may change on July 1, 2000 (mo/day/yr) and
on that day every 5 year(s) thereafter, which is referred to as the Change
Date.
INDEX. Beginning with the first Change Date, interest will be based on an
index. The index is the most recent 30 day average yield on United States
Treasury securities of like maturities, as made available by the Federal
Reserve Board. The most recent index figure available as of the date 45
days before each Change Date, is called the Current Index. If the index is
no longer available, Lender will choose a new index which is based on
comparable information. Lender will give Borrower notice of this change.
CALCULATION OF CHANGES. Before each Change Date, Lender will calculate the
new interest rate by adding two percentage points (2.00%) to the Current
Index. The sum will be the new interest rate until the next Change Date.
Lender will then determine the new amount of the Monthly (monthly,
quarterly, semi-annual, annual) payment.
EFFECTIVE DATE OF CHANGES. The new interest rate will become effective on
each Change Date. Borrower will pay the amount of the new payment beginning
on the first payment date after the Change Date until the amount of the
payment changes again.
ADJUSTMENT TO ADJUSTMENT CAP. Lender shall not increase or decrease the
interest rate more than 4.00 percentage points on any Change Date.
NOTICE OF CHANGES. Lender will mail or deliver, to the Borrower, at
Borrower's last known address, a notice of any change in the amount of the
payment before the effective date of any change. The notice will include
information required by applicable federal law and regulations.
[X] LIFE OF THE LOAN CAP. If checked, the interest rate will never be higher
than 6.00 percentage points above the beginning interest rate of 7.79 %.
------ ------
--------------------------------------------------------------------------------
PREPAYMENT
[X] NO PENALTY. If checked, all or any part of the principal may be paid in
advance, without penalty. Any advance payment may be applied entirely on
principal, or in part on accrued interest, as Lender may determine at its
sole option.
[_] REINVESTMENT FEE REQUIRED FOR PREPAYMENT. If checked, Borrower agrees to
pay a reinvestment fee of _____% above the then existing rate of interest
on the amount of the principal balance prepaid.
--------------------------------------------------------------------------------
[X] LATE PAYMENT PENALTY. If checked, Borrower agrees to pay a late payment
penalty of 2% above the billing rate on installments not paid in full on
--------------------------------------------------------------
the scheduled payment date; and continuing until the loan is brought
------------------------------------------------------------------------
current on all payments of: (1) principal and interest not paid when due;
-------
and (2) other payments including insurance, taxes, etc. not paid when due
if Lender advances to make the payments.
--------------------------------------------------------------------------------
TYPE OF LOAN
[X] Agricultural [_] Rural Home Loan [_] Other __________________
--------------------------------------------------------------------------------
SECURITY. This Note and Loan Agreement is secured by a mortgage, deed of
trust or security agreement dated December 20, 1994 covering certain real
------------------
estate and/or personal property.
--------------------------------------------------------------------------------
[X] SPECIAL CONDITIONS. If checked, in addition to the STANDARD CONDITIONS
Borrower agrees to the following special conditions:
See attached Addendum
------------------------------------------------------------------------
------------------------------------------------------------------------
--------------------------------------------------------------------------------
ADDITIONAL PROVISIONS
THIS WRITTEN CREDIT AGREEMENT IS THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN
BORROWER AND LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR
CONTEMPORANEOUS ORAL CREDIT AGREEMENT BETWEEN THE BORROWER AND THE LENDER. THE
PARTIES AFFIRM THAT NOT UNWRITTEN ORAL CREDIT AGREEMENT EXISTS BETWEEN THEM.
I agree to the terms of the Note and acknowledge receiving a copy.
Sunrise Organic Farms, Inc. PREPARED BY:
[Initials]
Signature(s) Lender
-------------------------- ---------------------------
See attached Addendum
-------------------------------------- a Corporation as Attorney-in-Fact for
the Farm Credit Bank of Wichita
A Corporation VERIFIED BY:
[Initials]
By
-------------------------------------- -------------------------------
(Lender must sign if security is
in Kansas)
Exhibit D to Restatement, Amendment and Assumption Agreement
STANDARD CONDITIONS
While this loan agreement is in effect Borrower will: (1) at Lender's request,
furnish information to Lender relating to Borrower's business and financial
affairs and permit Lender to examine Borrower's books and records; (2) maintain
all other loans with Lender in a current status; (3) allow Lender to inspect and
appraise Lender's collateral; (4) utilize loan proceeds as provided in the
PURPOSE section of this agreement; (5) promptly notify Lender of any potential
material adverse change in financial condition or any possible default under
this or any other loan agreement with this Lender or with any other Lender; (6)
execute all other documents as Lender may lawfully require in connection with
this loan; (7) comply with all terms and conditions of all other documents
executed in connection with this loan; (8) at Lender's request, submit an annual
verified balance sheet and income statement as of Borrower's fiscal year end.
ADDITIONAL SECURITY. LENDER MAY REQUEST ADDITIONAL SECURITY FOR THIS LOAN FROM
TIME TO TIME IN ACCORDANCE WITH APPLICABLE FEDERAL LAW, INCLUDING, WITHOUT
LIMITATION, REQUEST FOR A SECURITY INTEREST IN LENDER'S "FUNDS HELD" AND "FUTURE
PAYMENT FUND" PROGRAMS. BORROWER AGREES TO DELIVER ADDITIONAL COLLATERAL AS
LENDER MAY, IN GOOD FAITH REQUEST.
STOCK
Purchase, Lien and Conversion. Stock purchase and conversion shall be
according to the terms, conditions and designations outlined in applicable fed
law governing the Farm Credit System, regulations of the Farm Credit
Administration and Lender's bylaws. Borrower acknowledges: (1) that the
principal sum of this Note and Loan Agreement includes any sum borrowed to
purchase the maximum amount of stock; (2) Lender has a first lien on
Borrower's stock; and, (3) that stock retirement will be in accordance with
applicable law, regulations and Lender's bylaws governing retirement.
Default. In the event of default on this loan, Borrower agrees that Lender
may retire stock, not to exceed par value or face amount, and apply the
proceeds to principal and/or interest according to applicable law, regulations
and Lender's bylaws in effect at the time of retirement.
Risk. If book value of stock is ever less than par value or face amount or if
Lender's capital becomes impaired, stock may be subject to risk of impairment
and Lender may retire stock according to applicable federal law, regulations
and Lender's bylaws. This in no way affects Borrower's obligation to repay
its loan in full, including any amounts borrowed to purchase stock.
DISCLOSURE, CONSENT. By signing, Borrower agrees that Lender may disclose
financial information to other Farm Credit System institutions. Borrower
further authorizes Lender to request financial information from financial
institutions doing business with the Borrower.
DEFAULT. Borrower is in default of this Note and Loan Agreement under the
following circumstances: (1) Borrower fails to repay principal or interest as
set forth in this Note and Loan Agreement; (2) Borrower materially breaches any
term, condition or representation in any document in connection with this loan
or in connection with any other loan of this, or any other Lender; (3) if any of
Borrower's representations to this, or any other, lender in connection with any
loan prove to be materially false; (4) Lender determines, in its sole
discretion, that Borrower is unable to repay the indebtedness or Lender
otherwise deems itself insecure; (5) Borrower fails to use loan proceeds as set
forth in the PURPOSE section of this Note and Loan Agreement; (6) if, solely in
Lender's judgment, Borrower has experienced a material adverse change in
financial condition; (7) death, dissolution, termination of existence,
insolvency, business failure, petition for or appointment of a receiver,
assignment for the benefit of creditors by, or commencement of any proceeding
under any bankruptcy in insolvency law by or against Borrower, or any guarantor,
endorser, or surety for Borrower.
Remedies. On default and acceleration, Lender may exercise all legal rights
and remedies including, but not limited to, rights and remedies stated in
mortgages and security agreements. Exercise of any right or remedy shall not
exclude exercise of any other right or remedy. The mortgage, deed of trust or
security agreement provisions that advances made by Lender shall become a part
of the debt evidenced by this Note, and also states additional conditions
under which the entire debt may be accelerated and become immediately due and
will be subject to interest and default interest.
Default Interest and Acceleration. In the event of default the interest rate
shall be 2% above the then existing billing rate. On Borrower's default, and
at Lender's option, all unpaid principal, including amounts advanced for
taxes, insurance, etc., interest and default interest, shall become immediate
due and payable without notice or demand by Lender. Lender may continue to
charge interest, and default interest, on the accelerated amount.
Waiver. Any delay or omission by Lender in exercising a right or remedy shall
not waive that right or remedy or any other right or remedy. Any explicit
waiver of default by Lender must be in writing and signed by Lender. No
waiver of default by Lender shall operate as a waiver of any other default or
of the same default on a future occasion.
LEGAL FEES. If this loan is placed in the hands of an attorney for collection
or to protect or enforce any of Lender's rights in bankruptcy or otherwise,
Lender may collect its attorney fees, court costs and other expenses as provided
by applicable law. If allowed by law, all of these expenditures by Lender shall
be secured by security for this loan and shall become principal under this loan.
These expenses shall be immediate payable and shall bear interest as provided in
the INTEREST RATE AND PAYMENT CHANGES paragraph of this Note and Loan Agreement.
Lender shall solely determine the propriety of paying these expenses and
Borrower shall have no action against Lender for payment under this paragraph.
EVIDENCE. Lender's records shall be prima facie evidence of the balance owing
Lender and Borrower shall bear the burden of showing any fault or error.
WAIVER OF DEMAND. Borrower, and any endorser, surety or guarantor of this Note
and Loan Agreement, severally waive presentment for payment, demand, notice of
nonpayment, protest and notice of protest, and diligence in enforcing payment of
this Note.
RELEASE AND EXTENSION. Borrower, and any endorser, surety or guarantor of this
Note and Loan Agreement, severally agree that Lender may at any time, without
notice, release all or any part of the security for this Note and Loan Agreement
(including all or any part of the premises covered the referenced mortgage or
deed of trust); grant extensions, deferments, renewals or reamortizations of any
part of the debt evidenced by this Note and Loan Agreement, and release from
personal liability any one or more of the parties who are or may become liable
for this debt; all without affecting the personal liability of any other party.
SAVINGS CLAUSE. If any provisions of this Note and Loan Agreement are found to
be invalid or unenforceable, they shall no longer be considered to a part of
this Note and Loan Agreement. The remaining provisions shall be valid and
enforceable.
AGENCY APPOINTMENT. Each Borrower appoints every other Borrower as his or her
agent for purposes of the obligations of this loan. Borrower acknowledges that
Lender may conduct transactions with any borrower as if it were conducting
transactions with all borrowers. This authority shall continue until Borrower
revokes or terminates it by giving written notice to Lender.
INCORPORATION BY REFERENCE. This Note and Loan Agreement includes all
amendments, supplements and modifications to it, and also incorporates by
reference the terms of all assignments, instruments, documents, other writings
or written agreements between Borrower and Lender, including without limitation,
applications, loan commitments, notes and security documents.
MERGER. This Note and Loan Agreement supersedes all prior oral negotiations,
representations, and promises which are merged into this writing. This Note and
Loan Agreement, and any amendments, modifications or extensions to it,
constitutes the entire agreement between Borrower and Lender.
BORROWER'S GUARANTEES. By signing, Borrower warrants that Borrower has legal
authority to enter into this transaction, that the terms and conditions of this
contract do not contravene the terms and conditions of any other contract(s) of
the Borrower, that Borrower's representations in connection with this loan are
true and accurate, and that Borrower is not involved in, or has any expectations
of involvement in, any legal action that might impair Borrower's financial
condition or ability to continue business.
CAPTIONS. Captions used in this Note and Loan Agreement are inserted only as a
matter of convenience and for reference, and in no way define, limit or describe
the scope or intent of any term or provision.
APPLICABLE LAW. Enforcement of this Note and Loan Agreement and the mortgage,
deed of trust or security agreement shall be governed by federal laws to the
extent applicable, and shall otherwise be governed by the laws of the state in
which the mortgage real estate or personal property is located.
This Addendum is incorporated into and made a part of the Note and Loan
Agreement for Loan # 2371719 dated June 23, 1995, executed between Farm Credit
Bank of Wichita (FCS) and Sunrise Organic Farms, Inc. (Company) for the original
principal amount of $4,266,006.04.
SPECIAL CONDITIONS:
1. Furnish abstracts of title or title commitment insuring this loan.
2. Provided financing statements and security agreements are furnished on
milking equipment, all irrigation xxxxx, and equipment, all sprinklers and
the milk check proceeds.
3. Provided Xxxxxx X. Xxxxxxxx signs the balance sheet provided for the loan.
4. Provided a corporate Resolution to Borrow is furnished.
5. All entities or individuals, who are title holders to the security for this
loan will sign the application and other loan documents.
6. Provided the Natural Horizons, Inc. (NHI) lease is subordinated to this
lien.
7. Provided all state and local zoning, codes, covenants, ordinances and laws
are satisfied, including water and sewage systems.
8. Provided an entity eligibility exam is completed on Sunrise Organic Farms,
Inc, along with a review of the divisive reorganization plan and both are
approved.
9. Provided insurance is furnished as specified in the insurance schedule.
Insurance requirements schedule:
Idaho Dairy Facility Burley Farm
Dwelling 79,000. Calf Shed 21,000
Loafing sheds 554,000. Grain Bin 3,000
New maternity shed 38,000.
Maternity Stalls 8,000. Schodde Farm
Sick pen sheds 52,000. Potato Storage 60,000
Commodity Sheds 90,000. Shop 1,600
Shop 17,000. Grain Bin 2,000
Barn/Owned equipment 868,000 Commodity Shed 10,000
Crestview II Farm Dwelling 40,000
Sprinklers 50,000 Sprinklers 30,000
Xxxxxxx Farm
Dwelling 14,000
Grain Bin 2,000
SALE OF SECURITY: The Company shall not sell or further encumber the loan
security without the written consent of Farm Credit Bank of
Wichita, which consent shall not be unreasonably withheld.
FCS will partial release portions of said collateral subject
to the following conditions: 1) The Company is current and in
good standing with FCS and its operating lender; 2) FCS shall
be given prior written notice of each request, and the
Company shall complete a Partial Release Application and pay
any required fees; 3) In the case of real estate, the
property to be partially released will not impede access to
or impair the value of the remaining collateral; 4) The
property to be released is sold or transferred for adequate
consideration; 5) All the net proceeds of the sale or
transfer of the partially released property, or such portion
thereof as determined by FCS at the time of the partial
release, are paid to FCS and applied to the principal balance
of the loan.
SALE OR
TRANSFER OF
NOTE RECEIVABLE: The Company shall not sell, transfer or further encumber the
note receivable from Aurora Dairy Corporation without the
written consent of FCS, which consent shall not be
unreasonably withheld. Consent for sale or transfer will be
granted as long as Company is current and in good standing
with FCS and the sale or transfer does not cause the company
to fail to meet any other loan condition set forth in this
agreement.
CONSOLIDATION/
MERGER: The Company will not merge or consolidate with any other
person or entity without the written consent of FCS, except
the Company may merge or consolidate with another entity,
provided that:
a. the "surviving entity" is organized under the laws of the
US;
b. the "surviving entity" shall be engaged in substantially
the same line of business;
c. the "surviving entity" shall not be in default under the
Loan Agreement or under the note, deed of trust, or other
security document, including all covenants;
d. the "surviving entity" expressly assumes in writing:
(i) the due and punctual payment of the note, and
(ii) the due and punctual performance and observance of
all the covenants in the note, deed of trust, and
loan agreement.
This is Page Two of the addendum attached to a Note and Loan agreement in the
sum of $4266,006.04 between Farm Credit Bank of Wichita and Sunrise Organic
Farms, Inc. dated June 23, 1995.
TRANSACTIONS WITH
AFFILIATES: The Company will not enter into any transaction (including
the purchase, sale, or exchange of property or the rendering
of any service) with any affiliate except upon fair and
reasonable terms which are at least as favorable to the
Company as would be obtained in a comparable arm's-length
transaction with a non-affiliate.
REGULATORY
COMPLIANCE: During the term of the loan, failure of the Company to
maintain all permits, licenses, minimum capital standards,
minimum working capital standards, or any other requirements
of the regulatory agencies having jurisdiction over the
operation of the collateral property located in the State of
Idaho shall constitute and event of default.
FINANCIAL
COVENANTS: Financial covenants to be based on cost basis balance sheets
consistent to those to be determined by the Farm Credit
Services of the Mountain Plains, PCA (PCA) with respect to:
MAINTENANCE
OF NET WORKING
CAPITAL: During the entire term of the loan, the
ratio of Current Assets to Current
Liabilities shall not be less than 1.25:1.
CURRENT &
INTERMEDIATE
RATIO: During the entire term of the loan, the
ratio of current Assets & Intermediate
Assets to Current Liabilities &
Intermediate Liabilities shall not be less
than 1.15:1.
MAINTENANCE OF
COMPANY'S EQUITY: During the term of the loan, the Company
shall maintain a minimum Shareholders'
Equity (as defined below) of not less than
$ 1,500,000.
TOTAL DEBT/
SHAREHOLDERS'
EQUITY: During the term of the loan, the Company
shall maintain the ratio of Total Debt (as
defined below) to Shareholders' Equity (as
defined below)at not more than 5.0:1.
MARKET VALUE
OWNERS EQUITY: Cost basis balance sheets will be adjusted
to a market value balance sheet of the
Company as of 6-30-95, 12-31-95 and semi-
annually thereafter. Calculations will be
made by using market values as determined
at the sole discretion of the FCS. Said
balance sheets must reflect and maintain
owners equity positions of 36% as of 6-30-
95 and 40% by 12-31-95. 40% owners equity
will be maintained thereafter.
RESTRICTED PAYMENTS/
RESTRICTED
INVESTMENTS: The Company may not declare or make, or incur any liability
to make, any Restricted Payment, and may not make or incur
any liability to make any Restricted Investment unless at the
time of, and after giving effect to the Restricted Payment or
Restricted Investment in questions:
a. no event of default or event, which, with the passage of
time would become an event of default, shall have occurred
or be continuing; and
b. cumulative Restricted Payments and Restricted Investments
from loan closing do not exceed cumulative Net Income from
loan closing to the date of the Restricted Payment or
Restricted Investment in question.
FINANCIAL
REPORTING: During the term of the loan, the Company shall deliver to
FCS, within thirty (30) days of the end of each fiscal
quarter, unaudited consolidated financial statements showing
the Company's balance sheet and statements of income as of
the end of such quarter and setting forth in each case the
figures for the corresponding dates or periods one year
earlier, all in reasonable detail and fairly presenting the
financial position of the Company. Furthermore, the Company
shall deliver to FCS, as soon as practicable after the end of
the fiscal year, and in any event within 150 days thereafter,
duplicate copies of the Company's consolidated balance sheet
and consolidated statements of income and stockholders'
equity as of the end of such fiscal year and setting forth in
each case the figures for the previous fiscal year, all in
reasonable detail and audited by a Firm of Recognized
Certified Public Accountants. Such reports to be prepared in
accordance with generally accepted accounting principles
consistently applied.
DEFINITIONS: "Consolidated Net Income": For any period, the aggregate of
-----------------------
the Net Income of the Company and its consolidated
subsidiaries after eliminating all inter company items and
otherwise computed in accordance with generally accepted
accounting principles.
This is Page three of the addendum attached to a Note and Loan Agreement in the
sum of $4,266,006.4 between Farm Credit Bank of Wichita and Sunrise Organic
Farms, Inc. dated June 23, 1995.
"Current Assets": All those Assets reported on the December 31, 1994. Audit
---------------
report completed by Rhode Scripter and Associates less milk Quota.
"Intermediate Assets": All Cattle inventories. Producing and non-producing
-------------------
cows, heifers, and bulls in which the company has or intends to hold in
inventory more than one year.
"Current Liabilities": Current liabilities of the company constituting Moneys
--------------------
borrowed from commercial banks or other persons evidenced by a promissory note
or other like written obligation to pay money or other obligations of the
Company, which must be paid or satisfied within one year, specifically
excluding subordinated liabilities due stockholders.
"Intermediate Liabilities": PCA Revolving Line of Credit or any other
------------------------
indebtedness with a maturity more than one year and less than 10 years,
specifically excluding subordinated liabilities due stockholders.
"Firm of Recognized Certified Public Accountants": The firm of Rhode Scripter
-----------------------------------------------
and Associates or any other firm of certified public accountants satisfactory
to FCS, if and so long as such firm is independent with respect to the Person
or Persons whose financial statements are being examined by it.
"Total Debt": All liabilities of the Company constituting Moneys borrowed
----------
from commercial banks or other persons evidenced by a promissory note or other
like written obligation to pay money or other unwritten obligations of the
Company, which must be paid or satisfied, specifically excluding subordinated
liabilities due stockholders.
"Net Income": For any Person for any period, the Net Income of such Person
-----------
for such period determined in accordance with generally accepted accounting
principles, but excluding therefrom: (1) any income of any Person other than
such person unless such earnings are actually received in cash, (2) any
gain/loss arising from the sale of capital assets (not in the ordinary course
of business) or from any extraordinary or unusual items, and (3) any pre-
acquired, pre-merger income of any Person acquired by or merged into such
Person.
"Net working Capital": At any date, the amount by which Current Assets exceed
--------------------
Current Liabilities.
"Person": Any individual, corporation, partnership, joint venture, trust
-------
estate, unincorporated organization, governmental body
"Restricted Investment": Any investment other than the following: (1)
----------------------
investments existing at the time of closing; (2) obligations of the United
States government maturing within one year from the date of acquisition; (3)
certificates of deposit maturing within one year from the date of acquisition
issued by a commercial bank that is a member of the Federal Reserve System;
and (4) commercial paper issued by any corporation organized under the laws of
the United States of America or any state thereof of the District of Columbia
(a) having a net worth of not less that $100 million, (b) rated in the highest
category by Xxxxx'x or Standard & Poor's, and (c) maturing within 270 days
from the date of acquisition.
"Restricted Payment": Any payment or the incurrence of any liability to make
-------------------
any payment in cash, property, or other assets in respect of any share held by
any partner of the Company, including without limiting the generality of the
foregoing, payments as partner draws/dividends (including draws/dividends to
reimburse shareholders for any tax liability resulting from taxable income
being allocated to them by the Company) and payment for the purpose of
purchasing, retiring, or redeeming any partner's share.
"Shareholders' Equity": Tangible assets less total liabilities of the
---------------------
Company.
"Tangible Assets": assets of the Company except assets such as goodwill,
----------------
patents, and similar assets of any intangible nature.
"Company": Refers to Aurora Dairy corporation of Idaho, a "C" Corporation.
--------
"FCS" : Refers to Farm Credit Bank of Wichita and / or the Farm Credit
Services of the Mountain Plains, FLBA.
ACCEPTED: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx , as President of
Sunrise Organic Farms, Inc.
Attest: /s/ Xxxxx X Xxxxxx
--------------------------
Xxxxx X Xxxxxx, Secretary
/s/ Xxxxxx X. Xxxxxxxx
--------------------------
Xxxxxx X. Xxxxxxxx, Individually
After Recording Return to Farm Credit Services
000 00xx Xxxxxx
Xxxxxxx, XX 00000
Customer/Note No. 2371719
Mortgage and Fixture Filing
(Closed End)
On December 20, 1994,
Aurora Dairy Corporation of Idaho, a Colorado Corporation
hereinafter called Mortgagors whose address is 00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
grant, convey, warrant, transfer and assign to Farm Credit Bank of Wichita, a
corporation
organized under the Farm Credit Act of 1971 as amended hereinafter called
Mortgagee, whose address is 000 X. Xxxx Xxxxxxx XX 00000 a mortgage and security
interest in property in Xxxxxx County(ies), State of Idaho, more particularly
described in Exhibit "A" attached hereto and incorporated herein, including all
rents, issues, profits, buildings and improvements thereon and in all tenements,
hereditaments, rights, privileges, easements, rights of way and appearances,
including without limitation, private roads grazing privileges, water rights,
ditches and conduits and rights of way therefore, all plumbing, lighting,
heating, cooling, ventilating, elevating, and irrigating apparatus and other
equipment and fixtures now or hereafter belonging to or used in connection
therewith), all of which is hereinafter called "Property".
The following described note(s), Membership Agreement, security documents and
any other documents or instruments signed in connection with the notes and
security documents and any amendments thereto are collectively called the Loan
Documents. This conveyance is intended to secure performance of the covenants
and agreements contained herein and in any of the Loan Documents and payment of
indebtedness under the terms of the note(s) made by Mortgagors to the order of
Mortgagee with interest and advances as provided therein and in the loan
Documents, and any extensions, modifications or renewals thereof.
DATE OF NOTE PRINCIPAL AMOUNT FINAL INSTALLMENT DATE
December 20, 1994 $4,500,000.00 January 1, 2010
The terms of the note(s) and Loan Documents described above provide that the
interest rate, payment terms or amounts due may be indexed, adjusted, renewed or
renegotiated.
THIS MORTGAGE IS ALSO INTENDED TO BE A FIXTURE FILING.
Mortgagors and each of them REPRESENT, WARRANT, COVENANT and AGREE:
1. That they have title to the Property free from encumbrances, except as
described in Exhibit "A"; they have good right and lawful authority to convey
and encumber the same; they will warrant and defend the same forever against
the lawful claims and demands of all persons whomsoever; and they agree this
covenant shall not be extinguished by foreclosure or other transfers.
2. To keep all buildings and other improvements, now or hereafter existing, in
good repair; not to remove or demolish or permit the removal or demolition of
any building or other improvement; to restore promptly in a good and
workmanlike manner any building or improvement which may be damaged or
destroyed; to maintain and cultivate the Property in a good and husbandlike
manner, using approved methods for preserving the fertility and productivity
thereof; not to change or permit change in the use of the Property, and not
to do anything which would reduce the value of the Property.
3. To maintain casualty insurance, naming Mortgagee as loss payee, on all
buildings and improvements, against loss or damage by fire and other risks to
maintain facility insurance, to pay all premiums and charges on all such
insurance when due and to provide Mortgagee satisfactory evidence of such
insurance upon request. All such insurance shall be in such form(s), with
such.
4. To pay all debts and money, secured hereby, when due, to pay, when due; all
taxes, assessments, rents and other charges upon the Property; and to suffer
no other encumbrance, charge or lien on the Property, which would be superior
to this mortgage, except as stated above.
5. To specifically assign and deliver to Mortgagee all rents, royalties, damages
and payments of every kind, including without limitation, insurance,
reimbursements and condemnation awards, at any time accruing, for any
transfer, loss or seizure of the Property, any portion thereof or any rights
therein; Mortgagee may, at its option, apply such amounts in any proportion
to any of the indebtedness hereby secured, and Mortgagee shall have the right
to enter upon the property to make full inspection of the property.
Exhibit E to Restatement, Amendment and Assumption Agreement
Page 1 of 11
6. To comply with all laws, ordinances, regulations, covenants, conditions and
restrictions affecting the Property and its use, including without
limitation, all environmental laws; not to use or permit the use of the
Property for any unlawful or objectionable purpose; to remedy any
environmental contamination or violation of environmental laws that may occur
or be discovered in the future; to allow Mortgagee access to the property to
inspect its condition and to test and monitor for compliance with applicable
laws (any inspections or tests made by Mortgagee shall be for Mortgagee's
purposes only and shall not be construed to create any responsibility or
liability on the part of Mortgagee to Mortgagors or to any other person), to
forward copies of any notices received form any environmental agencies to
Mortgagee; and to indemnify and hold Mortgagee, its directors, employees,
agents and its successors and assigns, harmless from and against any
environmental claims of any kind, and all costs and expenses incurred in
connection therewith, including, without limitation, attorney's fees.
7. That neither Mortgagors nor, to the best of Mortgagors' knowledge, any prior
owner has created or permitted conditions on the Property which may give rise
to environmental liability, no enforcement actions are pending or threatened;
no underground tanks are located on the Property except as already disclosed;
any such underground tanks currently or previously located on the Property do
not now and never have leaked and no contaminated soil is located on the
Property; and Mortgagors' representations, warranties, covenants and
indemnities herein and in the Loan Documents shall survive satisfaction of
the note(s) and Loan Documents, foreclosure of this mortgage, acceptance of a
deed in lieu of foreclosure or any transfer or abandonment of the Property.
8. To perform all terms and conditions of each water or other contract,
described in Exhibit "A", if any, and to promptly pay all sums due or to
become due under each contract so that no delinquency or default will occur
under such contract(s); not to apply or enter into any federal, state or
local program which limits or restricts the use of the Property, in any way
without prior written consent of Mortgagee; to perform all acts necessary to
perfect and maintain any water permit, certificate, license or other water
interest, however designated, described in or used in conjunction with the
real property described in Exhibit "A"; any assignment of any such interest,
during the term of this mortgage, naming Mortgagee as an assignee shall be
for security purposes and shall not alter Mortgagors' obligations hereunder,
and nay failure of Mortgagors to perform any such obligation shall constitute
an event of default.
9. That the term "Grazing Rights" as hereinafter used refers to that portion of
the Property, if any, consisting of grazing leases, permits, licenses,
privileges, and preferences, or any of them, which have or will be assigned,
mortgaged or waived to Mortgagee, together with any additions, renewals,
replacements or substitutions thereof; if any portion of the Grazing Rights
is a leasehold interest in state lands, such leasehold shall be considered to
be real property; such leasehold and all other real property portions of the
Property constitute a single operating unit; and in the event of foreclosure,
Mortgagee shall have the right to have such leasehold and the other real
property sold as a unit and not in parcels; any statements and
representations in any applications for Grazing Rights are true and correct;
Mortgagors have received no notice that the Grazing Rights have or are to be
terminated, cancelled or modified; and any termination or cancellation of any
of the Grazing Rights shall constitute an event of default under this
Mortgage.
10. To execute any instrument deemed necessary by the Mortgagee to assign,
mortgage or waive such Grazing Rights to the Mortgagee; to pay all fees and
charges, and to perform all acts and things necessary to preserve and keep
in good standing the Grazing Rights to take no action which would adversely
affect the Grazing Rights; to procure renewals of the Grazing Rights upon or
prior to their expiration date; to operate the lands covered by the Grazing
Rights in conjunction with the other real estate portion of the Property and
not to convey or attempt to convey either separately; to forward to
Mortgagee copies of any notices received by Mortgagor regarding the Grazing
Rights; and in the event of foreclosure of this mortgage, to waive all
claims for preference in the Grazing Rights upon demand from the purchaser
of the Property at foreclosure sale, or form any successor to such
purchaser.
11. That if the Property is within an irrigation block and/or subject to water
service contract(s) governed by the provisions of "Federal reclamation law,"
and the regulations issued thereunder, Mortgagors shall comply with the
terms and provisions of said laws, regulations and contracts; Mortgagors,
and each of them, for themselves, their heirs, successors and assigns,
hereby appoint Mortgagee their attorney-in-fact to select and designate the
portion of the Property to be subject to a recordable contract, in the event
Mortgagors become subject to the excess land limitation; if Mortgagors fail
to comply with the terms of said law, regulations or contracts, or if the
delivery of water for the irrigation of the Property is discontinued in
whole or in part Mortgagors shall be in default; in the event the Bureau of
Reclamation determines that continued drainage maintenance on the Property
is no longer feasible, and Mortgagors purchase other lands offered as a
preference purchase right (as an adjustment for wetlands), Mortgagors shall
execute a supplemental mortgage on such lands in favor of the Mortgagee; and
failure to execute such mortgage on demand, shall constitute an event of
default.
12. That in the event of default in any of the covenants or agreements herein,
or in any of the Loan Documents, Mortgagee may, at its option perform the
same, in whole or in part; any advances, including, without limitation,
attorney fees or costs, paid or incurred by Mortgagee to protect or enforce
its rights under the Loan Documents in bankruptcy, appellate proceedings or
otherwise, shall be payable on demand and shall become a part of the
indebtedness secured by this mortgage.
13. That the indebtedness and obligation secured by this mortgage are personal
to the Mortgagers and are not assignable by Mortgagors; Mortgagee relied
upon the credit of Mortgagors, the interest of Mortgagors in the Property
and the financial market conditions then existing when making this loan; if
Mortgagors sell, transfer or convey or contract to sell, transfer or convey
the Property, or any portion thereof, or if the ownership of any corporation
or partnership, owning any portion of the Property shall be changed either
by voluntary or involuntary sale or transfer or by operation of law, without
prior written consent of Mortgagee or if Mortgagors default in the payment
of the indebtedness, or with respect to any warranty, covenant or agreement
in the Loan Documents or if a receiver or trustee for any part of the
Property is appointed, or if any proceeding under the bankruptcy or
insolvency laws is commenced by or against Mortgagors become insolvent, or
if any action is commenced to foreclose or enforce a lien on any portion of
the property, then, Mortgagors shall be in default hereunder.
Page 2 of 11
14. If the indebtedness is subject to a guarantee from Farmers Home
Administration., then Mortgagors shall be in default under this mortgage
and the above note(s) and Loan Documents should any loan proceeds be used
for a purpose that will contribute to excessive erosion of highly erodible
land or to the conversion of wetlands to produce an agricultural commodity
as further explained in 7 CFR Part 1940 Subpart G, Exhibit M; prior to loss
of the exemption from the highly erodible land conservation restrictions
found in 7CFR Part 12. Mortgagors must demonstrate that Mortgagors are
actively applying an approved conservation plan on that land which has been
determined to be highly erodible prior to 1990 or two years after the Soil
Conservation Service has completed a soil survey for that land, whichever is
after and Mortgagors must demonstrate prior to January 1, 1995 that any
0production after that date of an agricultural commodity on highly erodible
land will be done compliance with an approved Soil Conservation Service
conservation system.
15. That time is of the essence and in the event of default, at Mortgagee's
option, the entire indebtedness secured hereby shall forthwith become due
and payable and bear interest at the rate set forth in the Loan Documents
for delinquent payments. Mortgagee shall have the right to foreclose the
lien of this mortgage, to have a receiver appointed in any court proceeding
to collect any rents, issues and profits from the Property and apply them
against the indebtedness hereby secured and to exercise any rights and
remedies available under the Uniform Commercial Code for the state in which
the property is located, and reasonable notice if required by such Code
shall be five (5) days.
16. That the failure of Mortgagee to exercise any right or option provided
herein, at any time shall not preclude Mortgagee from exercising any of such
rights at any other time the covenant and agreements contained herein shall
be binding on and inure to the benefit of the parties and their respective
heirs, successors and assigns, all rights conferred on Mortgagee are
cumulative and additional to any rights conferred by law, and if any
provision is found to be invalid or unenforceable such invalidity or
unenforceability shall not affect any other provision hereof and the
mortgage shall be construed as though such provision had been omitted.
17. If this mortgage is a residential real estate mortgage, subject to Truth in
Lending Disclosures, that during the existence of the indebtedness hereby
secured Mortgagee, at its option, may collect additional amounts and pay
real property taxes and special assessments levied against the Property,
Mortgagee may elect at any time to pay or not to pay taxes and assessments
notice to any person liable for or making the payments upon the indebtedness
hereby secured or actual payment of any taxes or assessments by Mortgagee
shall constitute an election by Mortgagee to pay taxes and assessments
Mortgagee may elect to pay such taxes and assessments either prior to or
after collecting additional amounts necessary to make each payment, if
Mortgagee elects to pay such taxes and assessments prior to collecting such
additional amounts Mortgagee may add the amounts expended by it for taxes
and assessments to the note(s) balance at the time the payment is made and
such amounts shall bear interest as provided in the note(s) and shall be
secured by the Loan Documents, after any payment of taxes or assessments by
Mortgagee, or after notice of Mortgagee's election to pay taxes and
assessments, if given in advance of paying the taxes and assessments
Mortgagors shall pay to Mortgagee on the first day of each month, commencing
with the next installment in addition to the scheduled installments of
principal and interest due under the note(s), and amount equal to 1/12 of
the annual real property taxes and special assessments as estimated by
Mortgagee, such additional payments shall continue until any subsequent
election by Mortgagee not to pay taxes and assessments.
18. That Mortgagors and each of them, in this instrument for the purpose of
subjecting each of their right, title and interest, if any , in the
Property, whether of record or otherwise and including any right to
possession, to the lien of this mortgage.
19. That the following parties join in this instrument to perfect the lien
offered as security for the loan, but assume no liability for payment of the
indebtedness described in the Loan Documents except for that arising under
paragraph 6 above.
20. Additional covenants, terms, and conditions are contained on the following
described attachments which are incorporated in this mortgage as though set
out here in full:
____ Timber Rider
____ Montana Homestead Acknowledgment
____ Other (describe)
Page 3 of 11
Mortgagee acknowledges that this mortgage is subject to a security interest in
favor of the Farm Credit Bank of Wichita (Bank) and by its acceptance hereof and
pursuant to and in confirmation of certain agreements and assignments by and
between Mortgagee and Bank, does assign, transfer, and set over the same unto
Bank, its successors and assigns, to secure all obligations of Mortgagee to
Bank, provided that pursuant to such agreements and assignments Mortgagee has
authority to perform all loan servicing and collection actions and activities
hereunder, incliuding without limitation thereto, releasing in whole or in part
and foreclosing judicially or otherwise this mortgage until the Bank, by
instrument recorded in the office in which this mortgage is recorded, revokes
such authority, provided, however, if Bank is the Mortgagee in this transaction,
this paragraph is without effect.
Page 4 of 11
EXHIBIT A
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
A tract of land in the E 1/2E 1/2 of Section 17, and the NW 1/4NW 1/4 of
Section 16, more particularly described as follows:
Beginning at the Northeast corner of said Section 17, also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest corner
of said E 1/2E 1/2 Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2 Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the Westerly
boundary of said Section 16 to the Northerly boundary of said Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: NW 1/4; W 1/2NE 1/4; SE 1/4NE 1/4; NE 1/2NE 1/4, EXCEPTING
THEREFROM the following described parcel of land:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674 feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet, more
or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF BEGINNING.
EXCEPTING THEREFROM the highway.
Section 17: NE 1/2NE 1/4; S 1/2NE 1/4; SE 1/4; SE 1/4NW 1/4; E 1/2SW 1/4;
Section 20: E 1/2NE 1/4; N 1/2SE 1/4; NE 1/4SW 1/4;
Page 5 of 11
EXCEPTING THEREFROM a tract of land in the E 1/2 E 1/2, Section 17 and
NW 1/4NW 1/4, Section 16, Township 9 South, Range 21, East of the Boise
Meridian, Xxxxxx County, Idaho, more particularly described as follows:
Beginning at the Northeast corner of said Section 17 also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest
corner of said E 1/2E 1/2, Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2, Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the
Westerly boundary of said Section 16 to the Northerly boundary of said
Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: That part of the NE 1/4NE 1/4, described as follows:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674 feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet, more
or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF BEGINNING.
EXCEPTING THEREFROM the highway.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 20: SE 1/4SW 1/4; S 1/2SE 1/4;
Section 21: S 1/2SW 1/4; SW 1/4SE 1/4;
Section 28: All of Section 28;
Section 29: E 1/2NE 1/4; SE 1/4;
Section 32: N 1/2NE 1/4;
Page 6 of 11
Section 33: N 1/2NW 1/4; SE 1/4NW 1/4; NE 1/4;
EXCEPTING THEREFROM that part of the SE 1/4SE 1/4 of Xxxxxxx 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 00, Xxxx of the Boise Meridian, Xxxxxx County
Idaho, described as follows:
Commencing an the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79 degrees 00'21" West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
AND EXCEPTING THEREFROM that portion of the NE 1/4SE 1/4 of Section 28,
described as follows:
Beginning at the East quarter corner of said Section 28, which point
shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North boundary of the NE 1/4SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4; 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75
feet to THE TRUE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: S 1/2;
EXCEPTING THEREFROM the highway.
PARCEL NO. 6:
TOWNSHIP 9 SOUTH, RANGE 21, EAST OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 17: SW 1/4NW 1/4; NW 1/4SW 1/4;
Section 18: N 1/2SE 1/4; E 1/2SW 1/4; SW 1/4SE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 22: SE 1/4SW 1/4; S 1/2SE 1/4;
Page 7 of 11
Section 27: E 1/2; NW 1/4SW 1/4; S 1/2NW 1/4; NW 1/4NW 1/4; S 1/2SW 1/4;
NE 1/4SW 1/4, EXCEPTING THEREFROM the following described parcel of
land:
From a Point of Beginning located 714.75 feet, more or less, North from
the Southwest corner of Section 27, to the point of intersection of
said Section line or County road center line with the North boundary of
the Oregon Short Line Railroad North Side Branch right of way;
Thence running North along the Section line or center line of said
County road, 275.27 feet;
Thence North 78 degrees 46' East and parallel to the said railroad right
of way center line, 2691.57 feet, more or less, to the point of
intersection with the North-South mid-section line;
Thence South along said mid-section line 275.27 feet, more or less, to
the point of intersection with the North railroad right-of way
boundary;
Thence South 78 degrees 46' West and along said North railroad right of
way boundary, 2691.57 feet, more or less, to THE POINT OF BEGINNING.
AND EXCEPTING THEREFROM railroad rights of way.
TOGETHER WITH a permanent easement and right of way, including the
perpetual right to enter upon the excepted portion of the above
described property in the SW 1/4 of Section 27, Township 9South, Range
21, East of the Boise Meridian, for the purpose of constructing,
maintaining and repairing underground pipelines for irrigation water as
set forth in Easement Agreement recorded May 15, 1963 in Book 174 Page
53 as Instrument Number 154714, Xxxxxx County records.
Section 34: N 1/2NW 1/4; N 1/2NE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 27: NE 1/4NW 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 28: That part of the SE 1/4SE 1/4, described as follows:
Commencing at the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79 degrees 00'21 West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 Feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
Page 8 of 11
AND
That portion of the NE 1/4SE 1/4, described as follows:
Beginning at the East quarter corner of said Section 28, which point
shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North Boundary of the NE 1/4SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4, 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75 feet to
THE TRUE POINT OF BEGINNING.
PARCEL XX. 00
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 32: E1/2SE1/4;
Section 33: N1/2SW1/4; S1/2NW1/4; S1/2NE1/4;
EXCEPTING THEREFROM the highway.
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07801, Priority Date
August 24,1978."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08015, Priority Date
December 24, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08012."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-02254, Priority Date
March 16, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02284, Priority Date May
16, 1955."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07688, Priority Date
April 6, 1977."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-02249, Priority Date
March 5, 1954."
Page 9 of 11
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02248, Priority Date
March 5, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-14601, Priority Date
December 31, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08011B, Priority Date
December 24,1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-08008, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02430, Priority Date
April 21, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08004, Priority Date
October 19, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02319, Priority Date May
11, 1957."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08003, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02424, Priority Date
March 10, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. G-28496, Priority Date March
10, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07351, Priority Date July
16, 1973."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02310, Priority Date
November 20, 1956."
Page 10 of 11
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08005, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02376, Priority Date
February 20, 1959."
[SEAL]
AURORA DAIRY CORPORATION OF IDAHO,
a Colorado Corporation
BY /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------ ------------------------
Xxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxxxxxx
ATTEST /s/ Xxxxx X. Xxxxxx
---------------------
Xxxxx X. Xxxxxx, Secretary
ACKNOWLEDGEMENT
STATE OF Colorado )
) ss.
COUNTY OF Weld )
The foregoing instrument was acknowledged before me this 20th day of
--------
December , 1994, by Xxxxxx X. Xxxxxxxx, President of Aurora Dairy
---------------
Corporation of Idaho, a Colorado Corporation and by Xxxxx X. Xxxxxx, Secretary
for and in behalf of the corporation and by Xxxxxx X. Xxxxxxxx, as an
Individual.
My Commission Expires 3-8-98 /s/ Xxxx X. Xxxxxxxx
-------- ----------------------
Notary Public
[SEAL]
000 00xx Xxxxxx Xxxxxxx, XX 00000
------------------------------------
Notary Address
SECURITY AGREEMENT
Farm Credit Services
THIS AGREEMENT made this 20th day of December, 1994, between Aurora Dairy
---- -------- ---- ------------
Corporation of Idaho, a Colorado Corporation hereinafter called Debtor, whether
--------------------------------------------
one or more, and the Farm Credit Bank of Wichita, hereinafter called Secured
---------------------------
Party.
I. CREATION OF SECURITY INTEREST. Debtor hereby grants to Secured Party a
security interest in the Collateral described in Paragraph II to secure
payment and performance of all obligations and indebtedness of Debtor,
existing and future, owing to Secured Party created or incurred pursuant to
this Security Agreement.
II. COLLATERAL. The collateral of this Security Agreement are goods of the
following description, a part of which or all is now or may become fixtures:
See attached Exhibit A
and all appurtenances thereto, replacements, substitutions and additions which
are or will be in Debtor's possession on the land described and located as
follows:
See attached Exhibit A
Exhibit F to Restatement, Amendment and Assumption Agreement
III. DEBTOR'S OBLIGATIONS.
A. That he will pay to Secured Party:
1. The sum or sums evidenced by the promissory note executed along with
this Security Agreement in accordance with the terms of the note
dated the 20th day of December, 1994, in the amount of $4,500,000.00
---- -------- ----
and
2. All sums, including reasonable attorney's fee where allowed by law
and legal expenses, paid or incurred by Secured Party in pursuing
any of its rights and remedies or in remedying any default pursuant
to this Security Agreement or paid or incurred in protecting the
existence or priority of its interest, and
3. All expenses of taking possession, holding and preparing for
disposing of the Collateral paid or incurred by Secured Party in
pursuing any of its rights and remedies to which it is entitled
under this Security Agreement or the Uniform Commercial Code, and
the amounts so paid or incurred under this provision and Part 2
above shall be secured by this Security Agreement.
4. At Secured Party's option, the entire unpaid indebtedness to Secured
Party, whether created or incurred pursuant to this Security
Agreement or otherwise, upon Debtor's default under Paragraph IV or
if Secured Party deems itself insecure.
B. Debtor's additional obligations:
1. Debtor shall at all times keep the Collateral at the location
described in Paragraph II unless Secured Party consents in advance
and in writing to its removal to another location, and
2. To allow Secured Party, or its agent, to have access to the
Collateral for inspection purposes at any time, and
3. To insure and keep insured all Collateral described in Paragraph II
against loss or damage due to tornado or other windstorm in
companies and amounts satisfactory to Secured Party. Any policy
evidencing such insurance to be deposited with, and loss thereunder
to be payable to Secured Party as its interest may appear. At the
option of Secured Party, and subject to general regulations of the
Farm Credit Administration, sums so received may be used to pay for
reconstruction or replacement of the Collateral: or, if not so
applied may, at the option of the Secured Party, be applied in
payment of matured debt, or as extra payments on unmatured debt in
the manner provided in the note secured hereby.
4. Not to misuse, abuse, waste or allow to deteriorate, except for
ordinary wear and tear, and that he will at his own expense keep the
Collateral in good condition and forthwith replace and repair all
parts which become broken, worn out or damaged without allowing any
lien to be created on the Collateral on account of such replacement
or repairs, and
5. Not to sell, transfer, create or permit to be acquired any other
interest in or against the Collateral, or in any replacements,
substitutions and additions thereto, or permit any charge, including
rent and taxes, to remain unpaid to or by any third person.
At its option Secured Party may procure such insurance, discharge
taxes, liens or security interests or other encumbrances and may pay
for the reapair of any damage or injury to the Collateral for its
preservation and maintenance. Debtor agrees to reimburse Secured Party
on demand for any such payment or expense and until reimbursement, the
amount so expended plus interest in the amount being paid on the note
shall be added to the indebtedness and shall be secured by this
agreement.
C. Debtor further covenants and warrants:
1. That he is the absolute owner of the Collateral and that, except for
the security interest granted herein, it is free from any adverse
lien or security interest.
2. That the statements made in the loan application are true and that
the loan proceeds secured hereby will be used solely for the
purposes set forth in the application.
3. That the Debtor's residence and place of business, if any, is that
appearing below his signature and that he will immediately advise
the Secured Party in writing of any change of address.
4. The Debtor shall furnish to the Secured Party a list in writing of
buyers, commission merchants and selling agents to or through whom
the Debtor may sell farm products and shall notify the Secured Party
in writing of any previously unlisted buyer, commission merchant or
selling agent at least 7 days prior to any sale of farm products to
or through such previously unlisted persons. A sale of farm products
to or through any person not listed with the Secured Party may
subject the Debtor to a fine of $5,000 or 15% of the value of
benefit received from such sale.
IV. DEFAULT
A. Debtor shall be in default under this agreement upon the happening of
any of the following:
1. Failure to perform, or violation of, any obligations under Paragraph
III or any covenant contained therein or in the payment of any note
secured by this Agreement.
2. Any warranty or representation made to induce Secured Party to
extend credit to the Debtor under this agreement or otherwise is
false in any material respect when made, or
3. When any event occurs which results in the acceleration of the
maturity of the indebtedness of Debtor to others under any
indenture, agreement or undertaking, or
4. Death, dissolution, termination of existence, insolvency, business
failure, or the commencement of any bankruptcy pro-ceeding by or
against Debtor or by or against any guarantor or surety for Debtor.
B. Upon Debtor's default and at any time thereafter or if it deems itself
insecure.
Secured Party:
1. May declare all obligations secured hereby immediately due and
payable and shall have all rights and remedies for default provided
by the Uniform Commercial Code or may pursue its remedy afforded
under the real estate mortgage executed simultaneously with this
Security Agreement and which also secures payment of the note above
described.
2. May require debtor to assemble the Collateral and deliver or make it
available to Secured Party at a place to be designated by Secured
Party and to allow Secured Party to take possession and dispose of
the Collateral.
V. IT IS FURTHER UNDERSTOOD AND AGREED BETWEEN THE PARTIES HERETO that nothing
contained herein shall be construed to obligate Secured Party to make any
loans or advances to Debtor and that the sole purpose of this instrument is
to provide collateral security for presently existing indebtedness and
loans and advances which Secured Party, in its discretion, may hereafter
make;
That no waiver by Secured Party of any default shall operate as a waiver of
any other default or of the same default on a future occasion;
That no party to this instrument shall be discharged by any extension of
time, taking further security, releasing security, or any other act, except
a release or termination of the security interest created hereby upon full
cash payment of the debt secured hereby, including charges and interest;
That if more than one debtor executes this Security Agreement, their
obligations hereunder shall be joint and several;
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all promises and duties of Debtor shall bind
his heirs, executors, administrators or assigns.
(For Corporation, Partnership and (For Individual Signatures)
Fiduciary Signatures)
Name: Aurora Dairy Corporation of Idaho /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------- ------------------------------------------------
Address: 00000 Xxxxx Xxxxx, Xxx 000 Xxxxxx X. Xxxxxxxx
------------------------------------- Residence Address: 00000 Xxxxx Xxxxx, Xxx 000
-----------------------------
Xxxx, Xxxxx, Xxxxxx: Westminster, CO Xxxxx City, State, County: Westminster, CO Xxxxx
------------------------- ---------------------------
Residence Address:
/s/ Xxxxxx X. Xxxxxxxx President -----------------------------
------------------------------- ----------- City, State, County:
Xxxxxx X. Xxxxxxxx Title ---------------------------
/s/ Xxxxx X. Xxxxxx Secretary ------------------------------------------------
------------------------------- ----------- Residence Address:
Title -----------------------------
City, State, County:
------------------------------- ----------- ---------------------------
Title
------------------------------------------------
------------------------------- ----------- Residence Address:
Title -----------------------------
City, State, County:
---------------------------
EXHIBIT A
All milking equipment and facilities including all future additions to,
replacement of, and substitutions for, but not limited to the following:
140 stalls air injectors
4 18' receivers 4 25 h.p. vacuum pumps
moisture traps 52 drop hoses and nozzles
3" U-bends 3" PVC vacuum lines
4 2 h.p. milk pumps 2 4 x 33" line filters
45 milk meters 2 all steel welded flush tanks
Air compressors 2 400,000 BTU boilers
8 water heaters RJB sprayers
104 wide body milking units with wash-in-place stainless holders
Stainless steel wash lines and milk discharge lines
Milk check proceeds in amounts equal to note installments plus any and all
advances.
All xxxxx, pumps, motors, equipment, and sprinkler systems used for irrigation
of the land described below, including all future additions to, replacements of,
or substitutions for:
5 Xxxxx Xxxxxx 10" motors #33603, #45616, #25406, #27167, & #27721
2 Xxxxx Xxxxxx 12" motors #D9651 & # 26211
1 Xxxxx Xxxxxx motor #44122
1 Baldor Booster 75 h.p. motor #1269C
1 Baldor Booster 45 h.p. motor #689C
1 Peerless 10" motor #F10157
2 G.E. 250 h.p. pumps #SSJ508008 & #HTJ812127
2 G.E. 200 h.p. pumps #KHJ1018106 & #RTJ415014
2 U.S. Electric 200 h.p. pumps #1071520 & #1365076
1 U.S. Electric 100 h.p. booster pump #C1004883
1 U.S. Electric 150 h.p. pump #1151069
1 Westinghouse 100 h.p. booster pump #8008
1 U.S. Electric 300 h.p. pump #1308372
1 G.E. 350 h.p. pump #WF67178
1 Peerless 125 h.p. pressure pump #AL96626-433-5
2 Nine (9) Xxxxx Xxxxxx Xxxxxxxxxx #00000 & #55078
2 Valley Corner systems #70005 & #70020
1200' of 12" buried mainline
2640' of 10" buried mainline
900' of 8" buried mainline
1320' of 8" portable mainline
660' of 6" portable mainline
1320' of 12' buried mainline
2640' of 10' buried plastic mainline
1320' of 8" portable mainline
1820' of 6" portable mainline
6600' of 12' buried mainline
1320' of 10' buried mainline
8920' of 8" buried mainline
2640' of 6" buried mainline
320 sections of 3" Hook & Latch Handline
60 lengths of 4" Ball & Socket Handline
324 lengths of 3" Ball & Socket Handline
448 sections of 3" Ball & Socket Handline
448 sections of 3" Hook & Latch Handline
LEGAL DESCRIPTION
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
A tract of land in the E 1/2E 1/2 of Section 17, and the NW 1/4NW 1/4 of
Section 16, more particularly described as follows:
Beginning at the Northeast corner of said Section 17, also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest corner
of said E 1/2E 1/2 Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2 Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the Westerly
boundary of said Section 16 to the Northerly boundary of said Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: NW 1/4; W 1/2NE 1/4; SE 1/4NE 1/4; NE 1/2NE 1/4, EXCEPTING
THEREFROM the following described parcel of land:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674 feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet, more
or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF BEGINNING.
EXCEPTING THEREFROM the highway.
Section 17: NE 1/2NE 1/4; S 1/2NE 1/4; SE 1/4; SE 1/4NW 1/4; E 1/2SW 1/4;
Section 20: E 1/2NE 1/4; N 1/2SE 1/4; NE 1/4SW 1/4;
EXCEPTING THEREFROM a tract of land in the E 1/2 E 1/2, Section 17 and
NW 1/4NW 1/4, Section 16, Township 9 South, Range 21, East of the Boise
Meridian, Xxxxxx County, Idaho, more particularly described as follows:
Beginning at the Northeast corner of said Section 17 also being the
Northwest corner of said Section 16;
Thence South 89 degrees 44'20" West, 1,320.16 feet to the Northwest
corner of said E 1/2E 1/2, Section 17;
Thence South 0 degrees 07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2E 1/2, Section 17;
Thence North 89 degrees 43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0 degrees 06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89 degrees 46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0 degrees 06'32" West, 140.00 feet parallel with the
Westerly boundary of said Section 16 to the Northerly boundary of said
Section 16;
Thence South 89 degrees 46'14" West, 945.00 feet along the Northerly
boundary of said Section 16 to THE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: That part of the NE 1/4NE 1/4, described as follows:
Beginning at the Northeast corner of Section 16;
Thence West along the North line of Section 16, a distance of 674 feet;
Thence South parallel with the East line of Section 16, 327 feet;
Thence East parallel with the North line of Section 16, 674 feet, more
or less, to the East line;
Thence North along said East line, 327 feet to THE POINT OF BEGINNING.
EXCEPTING THEREFROM the highway.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 20: SE 1/4SW 1/4; S 1/2SE 1/4;
Section 21: S 1/2SW 1/4; SW 1/4SE 1/4;
Section 28: All of Section 28;
Section 29: E 1/2NE 1/4; SE 1/4;
Section 32: N 1/2NE 1/4;
Section 33: N 1/2NW 1/4; SE 1/4NW 1/4; NE 1/4;
EXCEPTING THEREFROM that part of the SE 1/4SE 1/4 of Xxxxxxx 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 00, Xxxx of the Boise Meridian, Xxxxxx County
Idaho, described as follows:
Commencing an the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79 degrees 00'21" West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
AND EXCEPTING THEREFROM that portion of the NE 1/4SE 1/4 of Section 28,
described as follows:
Beginning at the East quarter corner of said Section 28, which point
shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North boundary of the NE 1/4SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4; 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75
feet to THE TRUE POINT OF BEGINNING.
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 16: S 1/2;
EXCEPTING THEREFROM the highway.
PARCEL NO. 6:
TOWNSHIP 9 SOUTH, RANGE 21, EAST OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 17: SW 1/4NW 1/4; NW 1/4SW 1/4;
Section 18: N 1/2SE 1/4; E 1/2SW 1/4; SW 1/4SE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 22: SE 1/4SW 1/4; S 1/2SE 1/4;
Section 27: E 1/2; NW 1/4SW 1/4; S 1/2NW 1/4; NW 1/4NW 1/4; S 1/2SW 1/4;
NE 1/4SW 1/4, EXCEPTING THEREFROM the following described parcel of
land:
From a Point of Beginning located 714.75 feet, more or less, North from
the Southwest corner of Section 27, to the point of intersection of
said Section line or County road center line with the North boundary of
the Oregon Short Line Railroad North Side Branch right of way;
Thence running North along the Section line or center line of said
County road, 275.27 feet;
Thence North 78 degrees 46' East and parallel to the said railroad right
of way center line, 2691.57 feet, more or less, to the point of
intersection with the North-South mid-section line;
Thence South along said mid-section line 275.27 feet, more or less, to
the point of intersection with the North railroad right-of way
boundary;
Thence South 78 degrees 46' West and along said North railroad right of
way boundary, 2691.57 feet, more or less, to THE POINT OF BEGINNING.
AND EXCEPTING THEREFROM railroad rights of way.
TOGETHER WITH a permanent easement and right of way, including the
perpetual right to enter upon the excepted portion of the above
described property in the SW 1/4 of Section 27, Township 9South, Range
21, East of the Boise Meridian, for the purpose of constructing,
maintaining and repairing underground pipelines for irrigation water as
set forth in Easement Agreement recorded May 15, 1963 in Book 174 Page
53 as Instrument Number 154714, Xxxxxx County records.
Section 34: N 1/2NW 1/4; N 1/2NE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 27: NE 1/4NW 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 28: That part of the SE 1/4SE 1/4, described as follows:
Commencing at the Southeast corner of said Section 28;
Thence North 0 degrees 02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79 degrees 00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79 degrees 00'21 West, 154.50 feet;
Thence North 10 degrees 59'39" West, 55.00 Feet;
Thence North 79 degrees 00'21" East, 154.50 feet;
Thence South 10 degrees 59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
AND
That portion of the NE 1/4SE 1/4, described as follows:
Beginning at the East quarter corner of said Section 28, which point
shall be known as THE TRUE POINT OF BEGINNING;
Thence West along the North Boundary of the NE 1/4SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4SE 1/4, 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4SE 1/4;
Thence North along the East boundary of the NE 1/4SE 1/4, 909.75 feet to
THE TRUE POINT OF BEGINNING.
PARCEL XX. 00
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 32: E1/2SE1/4;
Section 33: N1/2SW1/4; S1/2NW1/4; S1/2NE1/4;
EXCEPTING THEREFROM the highway.
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07801, Priority Date
August 24,1978."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08015, Priority Date
December 24, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08012."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-02254, Priority Date
March 16, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02284, Priority Date May
16, 1955."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07688, Priority Date
April 6, 1977."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-02249, Priority Date
March 5, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02248, Priority Date
March 5, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-14601, Priority Date
December 31, 1954."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08011B, Priority Date
December 24,1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. A36-08008, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02430, Priority Date
April 21, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08004, Priority Date
October 19, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02319, Priority Date May
11, 1957."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08003, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02424, Priority Date
March 10, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. G-28496, Priority Date March
10, 1960."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-07351, Priority Date July
16, 1973."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02310, Priority Date
November 20, 1956."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-08005, Priority Date
December 8, 1981."
"Together with all water rights appurtenant to this property and all xxxxx and
equipment used for irrigation, stockwater, commercial and domestic uses on said
land including, but not limited to, Water Right No. 36-02376, Priority Date
February 20, 1959."
MODIFICATION TO NOTE AND LOAN AGREEMENT DATED JUNE 23, 1995 AND
ADDRESSED IN THE RESTATEMENT, AMENDMENT AND ASSUMPTION AGREEMENT DATED MARCH 20,
1997 PERTAINING TO FARM CREDIT BANK OF WICHITA (FCBW) LOAN 2371719.
The above stated Note and Loan Agreement are amended as follows:
UNDER THE CATEGORY LABELED "FINANCIAL COVENANTS" (AND RELATED DEFINITIONS),
EXISTING COVENANTS ARE REPLACED WITH THE FOLLOWING:
Financial
Covenants: Borrower will comply with the following covenants and additional
requirements on a consolidated (including statements of Horizon
Organic Holding Corporation, Horizon Organic Dairy, Inc., and
Sunrise Organic Farms, Inc.) basis utilizing Company's audited,
accrual, cost basis balance sheet prepared as of the end of the
Company's fiscal year end by a firm of recognized certified
public accountants:
Minimum Current Ratio: 1.15:1.00
---------------------
Minimum Working Capital: 4,500,000
-----------------------
In the event the Maryland Dairy is financed, the minimum working
capital will increase to $6,500,000.
Maximum Total Liability to Owner Equity Ratio: 2.00:1.00
---------------------------------------------
Minimum Tangible Owner Equity:
-----------------------------
$8.0 million plus 60% of the cumulative annual positive net
income, beginning with the fiscal year end financial results of
December 31, 1997.
For the purposes of financial covenant calculations, the
Revolving Line of Credit of First Bank Systems (or other
replacement lender) will be considered a Current Liability. All
livestock will be considered as a Current Asset. Prepaids will
not be considered as a Current or Tangible Asset unless used for
eligible feed inventory purchases. For the purpose of tangible
net worth calculations, eligible subordinated debts will be
considered as a tangible net worth component.
UNDER THE CATEGORY LABELED "DEFINITIONS", EXISTING DEFINITIONS
ARE REPLACED WITH THE FOLLOWING:
Definitions: "Current Assets": All those Current Assets reported on the May,
---------------
30, 1997 Internal Balance Sheet report as completed by Sunrise
Organic Farms, Inc. and all those Current Assets reported on the
May 24, 1997 Internal Balance Sheet report as completed by Horizon
Organic Farm, Inc. and similar Current Assets shown on a balance
sheet dated June 30, 1997 (to be submitted to FCS) by Horizon
Organic Holding Corporation after eliminating all inter company
items and otherwise computed in accordance with generally accepted
accounting principles.
"Current Liabilities": Current liabilities of the Company
-------------------
constituting Moneys borrowed from commercial banks or other
persons evidenced by a promissory note or other like written
obligation to pay money or other obligations of the Company, which
must be paid or satisfied within one year, specifically excluding
subordinated liabilities due stockholders and after eliminating
all inter company items and otherwise computed in accordance with
generally accepted accounting principles.
"Firm of Recognized Certified Public Accountants": Refers to a firm
-----------------------------------------------
of certified public accountants satisfactory to FCS, if and so long
as such firm is independent with respect to the Person or Persons
whose financial statements are being examined by it.
"Total Liability": All liabilities of the Company constituting
---------------
Moneys borrowed from commercial banks or other persons evidenced by
a promissory note or other like written obligation to pay money or
other unwritten obligations of the Company, which must be paid or
satisfied, specifically excluding subordinated liabilities.
"Net Income": For any Person for any period, the Net Income of such
Person for such period determined in accordance with generally
accepted accounting principles, but excluding therefrom: (1) any
income of any Person other than such Person unless such earnings
are actually received in cash, (2) any gain/loss arising from the
sale of capital assets (not in the ordinary course of business) or
from any extraordinary or unusual items, and (3) any pre-acquired,
pre-merger income of any Person acquired by or merged into such
Person.
"Working Capital": At any date, the amount by which Current Assets
exceed Current Liabilities.
"Current Ratio": The ratio derived by dividing Current Assets by
-------------
Current Liabilities.
"Person": Any individual, corporation, partnership, joint venture,
------
trust estate, unincorporated organization, governmental body
"Restricted Investment": Any investment other than the following:
---------------------
(1) investments existing at the time of closing; (2) obligations of
the United States government maturing within one year from the date
of acquisition; (3) certificates of deposit maturing within one
year from the date of acquisition issued by a commercial bank that
is a member of the Federal Reserve System; and (4) commercial paper
issued by any corporation organized under the laws of the United
States of America or any state thereof of the District of Columbia
(a) having a net worth of not less than $100 million, (b) rated in
the highest category by Xxxxx'x or Standard & Poor's, and (c)
maturing within 270 days from the date of acquisition.
"Restricted Payment": Any payment or the incurrence of any
------------------
liability to make any payment in cash, property, or other assets in
respect of any share held by any partner of the Company, including
without limiting the generality of the foregoing, payments as
partner draws/dividends (including draws/dividends to reimburse
shareholders for any tax liability resulting from taxable income
being allocated to them by the Company) and payment for the purpose
of purchasing, retiring, or redeeming any partners share.
"Owner Equity": The ratio of Tangible Assets less Total Liabilities
------------
of the Company divided by tangible assets.
"Tangible Assets": Assets of the Company except assets such as
---------------
goodwill, patents, and similar assets of any intangible nature.
"Deferred Income Tax Liability": Are those deferred income tax
-----------------------------
liabilities identified as current, intermediate, or long-term that
are not due within one year from the date of the balance sheet's
date.
"Company": Refers to the consolidated operations of Sunrise Organic
-------
Farms, Inc., Horizon Organic Dairy, Inc., and Horizon Organic
Holding Corporation.
"Maryland Dairy": Refers to an operating dairy located in the State
--------------
of Maryland and having at least 600 cow capacity, which is under
present consideration for acquisition by the Company.
"FCS": Refers to Farm Credit Bank of Wichita and/or the Farm
---
Credit Services of the Mountain Plains, FLBA.
The undersigned understand and agree to the modifications stated above.
SUNRISE ORGANIC FARMS, INC.
By: /s/ Barnet X. Xxxxxxxx 8/11/97
---------------------- -------
Date
Title: President
--------------------
XXXXXX X. XXXXXXXX, An Individual
/s/ Xxxxxx X. Xxxxxxxx 8/11/97
--------------------------- -------
Date
HORIZON ORGANIC DAIRY, INC.
By: /s/ Xxx Xxxxxxx 8/11/97
------------------------ -------
Date
Title: CFO-VP
---------------
The undersigned, being the parent of the above-signing corporations and being
fully advised of the premises and obligations herein concerned and for good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, does hereby assume and undertake the obligations, for the payment
of principal and interest and the performance of covenants, of the Note and Loan
Agreement dated June 23, 1995 and addressed in the Restatement, Amendment and
Assumption Agreement dated March 20, 1997, pertaining to Farm Credit Bank of
Wichita loan #237179 and this Modification thereof, as a co-maker as fully as if
the undersigned was an original maker thereof.
HORIZON ORGANIC HOLDING CORPORATION
By: Xxx Xxxxxxx 8/11/97
---------------------- -------
Date
Title: CFO-VP
------
