Exhibit 10.32
ACCRUED INTEREST AGREEMENT
THIS ACCRUED INTEREST AGREEMENT (the "Agreement") is made and entered
into as of February 28, 1997, by and between Alliance Farms Cooperative
Association, a Colorado cooperative association (the "Borrower"), and Farmland
Industries, Inc., a Kansas corporation (the "Lender").
RECITALS:
A. As of November 27, 1996, the Borrower and the Lender entered into a
Loan Agreement whereby the Lender agreed to loan up to $1,360,000 to the
Borrower (the "Loan Agreement" and, together with all promissory notes,
mortgages, deeds of trust, security agreements, waivers, consents and other
documentation entered into with respect thereto or as contemplated thereby,
collectively the "Farmland Loan Documentation").
B. The Lender and CoBank (as defined in the Loan Agreement) have
entered into a Subordination Agreement, dated February 28, 1997 (the
"Subordination Agreement"), whereby the loan evidenced by the Farmland Loan
Documentation is subordinated to the loan evidenced by the CoBank Loan
Documentation (as defined in the Loan Agreement).
C. The Borrower now desires to have the interest otherwise due and
payable on a monthly basis under the Farmland Loan Documentation accrue pending
the date on which the principal thereunder is due and payable.
AGREEMENT:
In consideration of the mutual covenants and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower and the Lender agree as follows:
1. Capitalized Terms. Unless otherwise defined in this Agreement, all
capitalized terms used herein shall have meanings ascribed to such terms in the
Loan Agreement.
2. Accrual of Interest. Notwithstanding the requirement under the
Farmland Loan Documentation that the Borrower pay interest on the unpaid
principal amount of the Loan on each Interest Payment Date, the Borrower shall
not make such interest payments on such dates, but instead (a) interest shall
accrue at the rates otherwise stated in the Farmland Loan Documentation, (b)
interest shall compound on each Interest Payment Date, and (c) such accrued and
compounded interest shall be payable in full on the first to occur of (i) the
closing date with respect to the Borrower=s next issuance and sale of a block of
at least seventeen (17) shares of its common stock, $.01 par value, and (ii) the
27th day of November, 2006.
3. Stock Sale Closing. The Borrower shall not close any issuance and
sale of shares of its common stock, $.01 par value unless (a) not less than
seventeen (17) shares of its common stock, $.01 par value, are issued and sold
in connection with such closing, and (b) concurrently with the closing of the
Borrower=s next issuance and sale of a block of at least seventeen (17) shares
of its common stock, $.01 par value, (i) the Borrower shall cause the repayment
in full of the principal under the Farmland Loan Documentation, and the accrued
and compounded interest hereunder and under the Farmland Loan Documentation, to
made to Farmland, and (ii) immediately after such repayment, (A) the
subordination provided for by the Subordination Agreement, or by any other
agreement between the Lender and CoBank, shall not apply to the proceeds of such
repayment, and (B) the Lender shall not be obligated under the Subordination
Agreement, or under any other agreement between the Lender and CoBank, to hold
such proceeds in trust for CoBank or otherwise remit such proceeds to CoBank.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
ALLIANCE FARMS COOPERATIVE
ASSOCIATION
By:
Name:
Title:
FARMLAND INDUSTRIES, INC.
By:
Name:
Title:
