EXHIBIT 10.8
LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT ("AGREEMENT") is made this 15th day of
July, 1997, between Horizon Organic Holding Corporation, a Delaware corporation;
Horizon Organic Dairy, a Colorado corporation ("Horizon Colorado"), Horizon
Organic Dairy, Maryland Farm, Inc., ("Horizon Maryland") a Colorado corporation;
Horizon Organic Dairy, Idaho Farm, Inc., ("Horizon Idaho") a Colorado
Corporation ("BORROWER"), whether one or more), and FBS AG CREDIT, INC., a
Colorado corporation ("FBS AG CREDIT").
RECITAL
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Borrower has requested that FBS Ag Credit make loans, advances, extensions
of credit and/or other financial accommodations to or for the benefit of
Borrower, and FBS Ag Credit is willing to do so on the following terms and
conditions.
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in this Agreement, and of any loans or extensions of credit
or other financial accommodations at any time made to or for the benefit of
Borrower by FBS Ag Credit, Borrower and FBS Ag Credit agree as follows:
1 DEFINITIONS.
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1.1 GENERAL DEFINITIONS. When used herein, the following capitalized
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terms shall have the meanings indicated, whether used in the singular or the
plural:
"ACCOUNTS" shall mean all present and future rights (including without
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limitation, rights under any Margin Accounts) of Borrower to payment for
Inventory or other goods sold or leased or for services rendered, which rights
are not evidenced by instruments or chattel paper, regardless of whether such
rights have been earned by performance.
"ACCOUNT DEBTOR" shall mean the party which is obligated on or under an
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Account or a General Intangible.
"AFFILIATE" shall mean any Person: (a) that directly or indirectly,
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through one or more intermediaries, controls or is controlled by, or is under
common control with, Borrower; (b) that directly or beneficially owns or holds
ten percent (10%) or more of any class of the voting stock of Borrower; (c) ten
percent (10%) or more of the voting stock (or in the case of a Person which is
not a corporation, ten percent (10%) or more of the equity interest) of which is
owned directly or beneficially or held by Borrower; or (d) that is a director,
officer, agent or employee of Borrower.
"ANNIVERSARY DATE" shall mean June 30, 1998 and each June 30 thereafter.
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"BORROWING BASE" shall mean an amount determined and computed as set forth
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in Exhibit 1A.
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"BORROWING BASE CERTIFICATE" shall mean a certificate in the form of
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Exhibit lB, signed as indicated thereon, setting forth the amount of Borrower's
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Borrowing Base.
"COLLATERAL" shall mean any and all assets in which FBS Ag Credit may at
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any time have a lien or security interest under or pursuant to Section 5.1 or
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otherwise to secure the Liabilities.
"DEFAULT" shall mean the occurrence or existence of: (a) an event which,
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through the passage of time or the service of notice or both, would (assuming no
action is taken by Borrower or any other Person to cure the same) mature into a
Matured Default; (b) an event which requires neither the passage of time nor the
service of notice to mature into a Matured Default; or (c) the occurrence of a
breach or a default under any other agreement at any time in existence between
Borrower or an Affiliate and FBS Ag Credit, including without limitation, any of
the Financing Agreements.
"DOCUMENTS" shall mean any and all warehouse receipts, bills of lading or
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similar documents of title relating to goods in which Borrower at any time has
an interest.
"EQUIPMENT" shall mean any and all goods, other than Inventory (including
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without limitation, equipment, machinery, motor vehicles, mobile homes,
implements, tools, parts and accessories) which are at any time owned by
Borrower, together with any and all accessions, parts and appurtenances.
"FARM PRODUCTS" shall mean all of Borrower's seed and harvested or
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unharvested crops of all types and descriptions, whether annual or perennial
(including without limitation, those crops at any time growing or grown upon
that certain real property described in Exhibit 1D) and all other personal
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property of Borrower used or for use in farming operations, including without
limitation, native grass, grain, harvested crops, feed, feed additives, feed
ingredients, feed supplements, fertilizer, hay, silage, supplies (including
without limitation, veterinary supplies and related goods), livestock (including
without limitation, the offspring of such livestock and livestock in gestation)
and any other "farm products" (as defined in the Code).
"FINANCING AGREEMENTS" shall mean all agreements, instruments and
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documents, including without limitation, this Agreement and all security
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agreements, loan agreements, notes, letter of credit applications, guarantees,
mortgages, deeds of trust, subordination agreements, pledges, powers of
attorney, consents, assignments, contracts, notices, leases, financing
statements and all other written matter at any time executed by or on behalf of
Borrower and delivered to FBS Ag Credit, together with all amendments and all
agreements and documents referred to therein or contemplated thereby.
"FIRST BANK" shall mean First Bank National Association, a national banking
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association with its principal place of business in Minneapolis, Minnesota and
an Affiliate of FBS Ag Credit.
"FIXED CHARGE COVERAGE RATIO" shall mean for any period of determination
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and with respect to any Borrower, the ratio of: (a)(i) Unallocated Cash Flow,
plus (ii) the amount of cash interest paid by such Borrower during such period;
over (b)(i) the amount of principal paid by such Borrower during such period
with respect to long term debt, plus (ii) the amount of cash interest paid by
such Person during such period. Notwithstanding the foregoing, FBS Ag Credit
reserves the right from time to time to change the formula for determination of
the Fixed Charge Coverage Ratio.
"GENERAL INTANGIBLES" shall mean all of Borrower's right, title and
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interest in and to any bank deposit accounts, customer deposit accounts,
deposits, rights related to prepaid expenses, negotiable or nonnegotiable
instruments or securities, chattel paper, choses in action, causes of action and
all other intangible personal property of every kind and nature (other than
Accounts), including without limitation, corporate or other business records,
inventions, designs, patents, patent applications, trademarks, trade names,
trade secrets, goodwill, registrations, copyrights, licenses, franchises,
customer lists, tax refunds, tax refund claims, customs claims, guarantee
claims, cooperative memberships or patronage benefits, rights to any government
subsidy, set aside, diversion, deficiency or disaster payment or payment in
kind, milk bases, brands and brand registrations, water rights (including
without limitation, water stock, ditch rights, well permits, water permits,
applications and the like), Commodity Credit Corporation storage agreements or
contracts, leasehold interests in real and personal property and any security
interests or other security held by or granted to Borrower to secure payment by
any Account Debtor of any of the Accounts, and any other "general intangibles"
(as defined in the Code).
"INVENTORY" shall mean any and all dairy livestock, feed and dairy product
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or other goods which shall at any time constitute "inventory" (as defined in the
Code) or Farm Products of Borrower, wherever located (including without
limitation, goods in transit), or which from time to time are held for sale,
lease or consumption in Borrower's business, furnished under any contract of
service or
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held as raw materials, work in process, finished inventory or supplies
(including without limitation, packaging and/or shipping materials).
"LETTER OF CREDIT USAGE" shall mean as of any date of determination an
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amount equal to the sum of (a) the amount of all Unpaid Drawings plus (b) the
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amount available to be drawn under all outstanding Letters of Credit.
"LIABILITIES" shall mean any and all liabilities, obligations and
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indebtedness of Borrower to FBS Ag Credit of any and every kind and nature, at
any time owing, arising, due or payable and howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise (including without limitation, obligations of performance)
and whether arising or existing under this Agreement or any of the other
Financing Agreements or by operation of law.
"MARGIN ACCOUNTS" shall mean all futures contracts or funds and other
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property related to such futures contracts, which Borrower or Borrower's
authorized attorney-in-fact may acquire, accumulate, withdraw or pay out, and
which may be held with any broker, including without limitation, any balance
credited to any Margin Account upon its closing.
"MARYLAND DAIRY" shall mean an operating dairy located in the State of
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Maryland and having at least 600 cow capacity.
"MATURED DEFAULT" shall mean the occurrence or existence of any one or more
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of the following events: (a) Borrower fails to pay any principal or interest
pursuant to any of the other Financing Agreements at the time such principal or
interest becomes due or is declared due; (b) Borrower fails to pay any of the
Liabilities (other than principal and interest) on or before ten (10) days after
such Liabilities become due or are declared due; (c) Borrower fails or neglects
to perform, keep or observe any of the covenants, conditions, promises or
agreements contained in Sections 8.1, 8.2 or 8.4; (d) Borrower fails or
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neglects to perform, keep or observe any of the covenants, conditions, promises
or agreements contained in this Agreement or in any of the other Financing
Agreements (other than those covenants, conditions, promises and agreements
referred to or covered in (a), (b) and (c) above), and such failure or neglect
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continues for more than thirty (30) days after such failure or neglect first
occurs, provided, however, that such grace period shall not apply, and a
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Matured Default shall be deemed to have occurred and to exist immediately if
such failure or neglect may not, in FBS Ag Credit's reasonable determination, be
cured by Borrower during such thirty (30) day grace period; (e) the amount
outstanding under the Line of Credit is in excess of the Borrowing Base; (f) any
warranty or representation at any time made by or on behalf of Borrower in
connection with this
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Agreement or any of the other Financing Agreements is untrue or incorrect in any
material respect, or any schedule, certificate, statement, report, financial
data, notice, or writing furnished at any time by or on behalf of Borrower to
FBS Ag Credit is untrue or incorrect in any material respect on the date as of
which the facts set forth therein are stated or certified; (g) a judgment in
excess of $ 100,000 is rendered against Borrower and such judgment remains
unsatisfied or undischarged and in effect for thirty (30) consecutive days
without a stay of enforcement or execution, provided, however, that this clause
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(g) shall not apply to any judgment for which Borrower is fully insured and with
respect to which the insurer has admitted liability in writing for such
judgment; (h) all or any part of Borrower's assets come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors; (i) a
proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed against
Borrower of any of the Liabilities and such proceeding is not dismissed within
thirty (30) days of the date of its filing, or a proceeding under any
bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt or receivership law or statute is filed by Borrower of any of the
Liabilities, or Borrower of the Liabilities makes an assignment for the benefit
of creditors; (j) Borrower of any of the Liabilities voluntarily or
involuntarily dissolves or is dissolved, terminates or is terminated or dies;
(k) Borrower is enjoined, restrained, or in any way prevented by the order of
any court or any administrative or regulatory agency or by the termination or
expiration of any permit or license, from conducting all or any material part of
Borrower's business affairs; (1) Borrower of any of the Liabilities fails to
make any payment due or otherwise defaults on any other obligation for borrowed
money and the effect of such failure or default is to cause or permit the holder
of such obligation or a trustee to cause such obligation to become due prior to
its date of maturity; (m) FBS Ag Credit makes an expenditure under Section 10.3;
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or (n) FBS Ag Credit, at any time reasonably determines that FBS Ag Credit is
insecure with respect to the amount or quality of Collateral for FBS Ag Credit's
loans to Borrower or the prompt payment of all or any part of the Liabilities,
or that such change has occurred in the condition or affairs (financial or
otherwise) of Borrower or any of Borrower's Affiliates as, in the reasonable
opinion of FBS Ag Credit, materially affects Borrower's ability to make prompt
payment on the Liabilities or materially impairs or is likely to materially
impair the value of the Collateral, including without limitation, the occurrence
of such events as would in FBS Ag Credit's reasonable opinion create the
possibility that, in accordance with any federal, state or local law, or in
accordance with any contract by which Borrower is bound, any Person could assert
liens or setoffs against the Collateral.
"PERSON" shall mean any individual, sole proprietorship, partnership, joint
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venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (whether national, federal, state,
provincial, county,
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city, municipal or otherwise, including without limitation, any instrumentality,
division, agency, body or department thereof).
"PRODUCER PAYABLES" shall mean all amounts at any time payable by Borrower
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for the purchase of Inventory that are, in the reasonable determination of FBS
Ag Credit, secured by a lien.
"PROPERTY" shall mean those premises owned or operated by Borrower,
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including without limitation, the real property described in Borrower's
mortgage(s) and/or deed(s) of trust referred to in Section 5.1.
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"REFERENCE RATE" shall mean the Reference Rate quoted by First Bank as of
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12:00 Noon on a given day in Minneapolis, Minnesota, which is a base rate that
First Bank from time to time establishes and which serves as a basis upon which
effective rates of interest are calculated for those loans which make reference
hereto. Borrower acknowledges that said Reference Rate is not necessarily the
lowest index rate used or the lowest rate made available to customers by said
First Bank.
"REVOLVING LOAN COMMITMENT" shall mean at the time any determination
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thereof is to be made, the obligation of the FBS Ag Credit to make Line of
Credit Advances and to provide Letters pursuant to Section 2.1 up to, but not
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exceeding in the aggregate principal amount at any time of $10,000,000 through
December 31, 1997, up to, but not exceeding in the aggregate principal amount at
any time of $10,000,000 after December 31, 1997 in the event a Maryland Dairy is
purchased by Borrower on or before said date and up to, but not exceeding in the
aggregate principal amount at any time of $8,000,000 after December 31, 1997 in
the event a Maryland Dairy is not purchased by Borrower on or before said date.
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"SUBORDINATED DEBT" shall mean indebtedness of Horizon Organic Dairy, Inc.
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evidenced by those certain Unsecured Subordinated Promissory Notes, dated March
20, 1997.
"TANGIBLE NET WORTH" shall mean, as of any particular date, the difference
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between (a) Borrower's consolidated total assets as they would normally be shown
on the balance sheet of Borrower, adjusted by deducting: (i) all values
attributable to General Intangibles, except: bank deposit accounts; Margin
Accounts; prepaid expenses for Eligible Inventory consisting of feed; government
subsidy; set aside; diversion; deficiency or disaster payments receivable which
are properly assigned to FBS Ag Credit; and Commodity Credit Corporation storage
agreement or contract receivables which are properly assigned to FBS Ag Credit,
and by deducting
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(ii) Accounts due from Affiliates with no further adjustment required for
Accounts due from Affiliates already eliminated in consolidation except Accounts
due from Affiliates which Borrower could legally collect by setoff against
Accounts due to Affiliates; and (b) Borrower's consolidated total liabilities as
they would normally be shown on the balance sheet of Borrower adjusted by adding
Subordinated Debt.
"TOTAL REVOLVING OUTSTANDINGS" shall mean as of any date of determination,
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the sum of (a) the aggregate unpaid principal balance of Line of Credit Advances
outstanding on such date and (b) the Letter of Credit Usage.
"UNALLOCATED CASH FLOW" shall mean, for any period of determination and
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with respect to any Borrower, a) the net income of such Borrower before
provision for income taxes, interest expense (including without limitation,
implicit interest expense on capitalized leases), depreciation, amortization and
other noncash expenses or charges, excluding (to the extent included): (a)
nonoperating gains (including without limitation, extraordinary or nonrecurring
gains, gains from discontinuance of operations and gains arising from the sale
of assets other than Inventory) during the applicable period; and (b) similar
nonoperating losses during such period, less cash dividends paid, cash interest
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paid and less capital expenditures.
"UNPAID DRAWING" As defined in Section 2.1.2.
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"WORKING CAPITAL" shall mean, as of any particular date, the amount of
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Borrower's consolidated current assets, less Borrower's consolidated current
liabilities, treating all amounts currently owing to Affiliates (except amounts
owing to Affiliates eliminated by consolidation) as current liabilities and
giving no value as assets to any amounts currently owing from Affiliates,
treating all livestock and prepaid expenses for Eligible Inventory consisting of
feed as current assets and treating Total Revolving Outstandings as current
liabilities.
"WORKING CAPITAL RATIO" shall mean, as of any particular date, the ratio of
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Borrower's consolidated current assets, to Borrower's consolidated current
liabilities, treating all amounts currently owing to Affiliates (except amounts
owing to Affiliates eliminated by consolidation) as current liabilities and
giving no value as assets to any amounts currently owing from Affiliates,
treating all livestock and prepaid expenses for Eligible Inventory consisting of
feed as a current asset and treating Total Revolving Outstandings as current
liabilities.
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1.2 INDEX TO OTHER DEFINITIONS. When used herein the following capitalized
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terms shall have the meanings given in the indicated portions of this Agreement:
TERM LOCATION TERM LOCATION
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Advance, Section 2.7 Agreement introduction
Advances
Beneficiary Section 2.1.2 Borrower Introduction
Code Section 1.4 Default Rate Section 2.2
Eligible Accounts Section 3.1 Eligible Inventory Section 3.2
Environmental Section 6.10 ERISA Section 6.20
Laws
Excess Section 10.20 FBS AG Credit Introduction
Letters Section 2.1.2 Line of Credit, Line Section 2.1.1
of Credit Advances,
Line of Credit Note
Loan Account Section 2.6
Pension Plan Section 6.20
1.3 ACCOUNTING TERMS. Any accounting terms used in this Agreement which
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are not specifically defined in this Agreement shall have the meanings
customarily given them in accordance with generally accepted accounting
principles, as consistently applied as of the date of this Agreement.
1.4 OTHERS DEFINED IN COLORADO UNIFORM COMMERCIAL CODE. All other terms
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contained in this Agreement (which are not specifically defined in this
Agreement) shall have the meanings set forth in the Uniform Commercial Code of
Colorado ("Code") to the extent the same are used or defined therein.
2 LOANS, LETTERS OF CREDIT AND FEES.
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2.1 LOANS AND LETTERS OF CREDIT. Subject to all of the terms and
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conditions contained in this Agreement, FBS Ag Credit agrees to make the
following extensions of credit to or for the benefit of Borrower:
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2.1.1 LINE OF CREDIT. FBS Ag Credit agrees to make advances ("LINE OF
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CREDIT ADVANCES") to Borrower from time to time from and after the date of this
Agreement, through and including June 30, 1999 ("TERMINATION DATE"); provided
that no such Line of Credit Advance will be made in any amount which, after
giving effect to such Line of Credit Advance, would cause (a) Total Revolving
Outstandings to exceed the lesser of (i) the Revolving Loan Commitment, or (ii)
the then current Borrowing Base. ("LINE OF CREDIT"). The Line of Credit Advances
shall be evidenced by and repayable in accordance with the terms of Borrower's
promissory note ("LINE OF CREDIT NOTE"), the form of which is attached as
Exhibit 2A. FBS Ag Credit, in its sole and absolute discretion, may elect to
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make Line of Credit Advances to Borrower in excess of the amounts available
pursuant to the terms of this Agreement, and any such Line of Credit Advances
shall also be governed by the terms hereof. FBS Ag Credit shall also have the
option, in its sole discretion and without any obligation to do so, to extend
the Termination Date for the making of Line of Credit Advances. In the event
that FBS Ag Credit elects to extend such Termination Date, FBS Ag Credit shall
give notice to Borrower pursuant to Section 10.19.
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2.1.2 LETTERS OF CREDIT. FBS Ag Credit further agrees to request
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First Bank to issue its irrevocable letters of credit (collectively "Letters"
and individually, a "Letter") on its behalf for the account of Borrower for the
benefit of one or more beneficiaries to be named by Borrower (the
"BENEFICIARY"), whether one or more, in form and substance acceptable to the
Beneficiary provided that no Letter of Credit will be issued in any amount
which, after giving effect to such issuance, would cause (a) Total Revolving
Outstandings to exceed the lesser of (i) the Revolving Loan Commitment, or (ii)
the then current Borrowing Base, or (b) the Letter of Credit Usage to exceed
$500,000. If First Bank has received documents purporting to draw under a
Letter that First Bank believes conform to the requirements of the Letter, or if
First Bank has decided that it will comply with Borrower's written or oral
request of authorization to pay a drawing on any Letter that First Bank does not
believe conforms to the requirements of the Letter, First Bank or FBS Ag Credit
will notify Borrower of that fact. Borrower shall reimburse First Bank by 9:30
a.m. (Minneapolis time) on the day on which such drawing is to be paid in an
amount equal to the amount of such drawing. Any amount by which Borrower has
failed to reimburse First Bank for the full amount of such drawing by 10:00 a.m.
on the date on which such drawing is to be paid ("UNPAID DRAWING"), may be paid
by an FBS Ag Credit initiated Line of Credit Advance. The obligation of
Borrower to reimburse First Bank for any amount drawn on any Letter, and the
obligation of Borrower to repay FBS Ag Credit for any Line of Credit Advance
made to fund such reimbursement, shall be absolute, unconditional and
irrevocable, shall continue for so long as any Letter is outstanding
notwithstanding any termination of this Agreement, and shall be paid strictly in
accordance with the terms of this Agreement, notwithstanding any of the
following:
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(a) Any lack of validity or enforceability of any Letter;
(b) The existence of any claim, setoff, defense or other right which
Borrower may have or claim at any time against any beneficiary,
transferee or holder of any Letter (or any Person for whom any such
beneficiary, transferee or holder may be acting), First Bank or any
other Person, whether in connection with a Letter, this Agreement, the
transactions contemplated hereby, or any unrelated transaction; or
(c) Any statement or any other document presented under any Letter proving
to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect
whatever.
None of First Bank, FBS Ag Credit or any of the officers, directors or employees
of either of them shall be liable or responsible for, and the obligations of
Borrower to First Bank and FBS Ag Credit shall not be impaired by:
(d) The use which may be made of any Letter or for any acts or omissions
of any beneficiary, transferee or holder thereof in connection
therewith;
(e) The validity, sufficiency or genuineness of documents, or of any
endorsements thereon, even if such documents or endorsements should in
fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged;
(f) The acceptance by First Bank of documents that appear on their face to
be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary; or
(g) Any other action of First Bank in making or failing to make payment
under any Letter if in good faith and in conformity with applicable
U.S. or foreign laws, regulations or customs.
Notwithstanding the foregoing, Borrower shall have a claim against First Bank
and FBS Ag Credit, and First Bank and/or FBS Ag Credit shall be liable to
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by Borrower which Borrower proves were caused by
First Bank's or FBS Ag Credit's willful misconduct or gross negligence in
determining whether documents presented under any Letter comply with the terms
thereof.
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2.2 DEFAULT RATE. Upon and after a Matured Default and notice thereof to
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Borrower, Borrower shall, in lieu of the interest rate set forth in any
promissory note referred to herein, pay to FBS Ag Credit interest from the date
of the Matured Default at a per annum rate which is equal to the Reference Rate
plus four percent (4%) ("DEFAULT RATE") calculated on the outstanding principal
balance of the Liabilities until all of the Liabilities are repaid in full.
2.3 PREPAYMENT. Unless prepayment is restricted by any promissory note
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evidencing any portion of the Liabilities, Borrower may, at any time, without
premium or penalty, prepay any portion or the entire balance of the Liabilities.
2.4 PURPOSE. The purpose of the Line of Credit is to finance the
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livestock, farming costs, equipment, milk production costs of Horizon Idaho and
Horizon Maryland, as well as the accounts receivable and finished inventories of
Horizon Colorado.
2.5 LOAN FEES. Borrower agrees to pay to FBS Ag Credit: (a) a commitment
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fee for the Revolving Loan in the amount of Twenty Five Thousand Dollars
($25,000), payable on the date of this Agreement and annually on each
Anniversary Date as long as Line of Credit Advances are outstanding hereunder;
(b) a fee in connection with the issuance and in connection with the renewal of
each Letter, in the amount of Three and One Half percent (3.5%) of the face
amount of each such Letter, payable in advance upon the issuance and upon the
renewal of each such Letter; and (c) an early termination fee payable in the
amount of Two Hundred Thousand Dollars ($200,000) in the event Borrower
terminates this Agreement prior to June 30, 1998 and payable in the amount of
One Hundred Thousand Dollars ($100,000) in the event Borrower terminates this
Agreement prior to June 30, 1999. Each of the foregoing fees shall be fully
earned on the date it becomes payable and shall be paid by an FBS Ag Credit
initiated Advance pursuant to Section 2.1, without prior demand by FBS Ag
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Credit.
2.6 BORROWER'S LOAN ACCOUNT. FBS Ag Credit shall maintain a loan account
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("LOAN ACCOUNT") on its books in which shall be recorded: (a) all Line of Credit
Advances made by FBS Ag Credit to Borrower pursuant to this Agreement; (b) all
payments made by Borrower on all such Line of Credit Advances; and (c) all other
appropriate debits and credits as provided in this Agreement, including without
limitation, all fees, charges, expenses and interest. All entries in Borrower's
Loan Account shall be made in accordance with FBS Ag Credit's customary
accounting practices as in effect from time to time. Borrower promises to pay
the amount reflected as owing by and under its Loan Account and all other
obligations hereunder as such amounts become due or are declared due pursuant to
the terms of this Agreement.
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2.7 STATEMENTS. All Line of Credit Advances (collectively "ADVANCES" and
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individually, an "ADVANCE") to Borrower, and all other debits and credits for in
this Agreement, shall be evidenced by entries made by FBS Ag Credit in internal
data control systems showing the date, amount and reason for each such debit or
credit. Until such time as FBS Ag Credit shall have rendered to Borrower
written statements of account, the balance in Borrower's Loan Account, as set
forth on FBS Ag Credit's most recent printout, shall be rebuttable presumptive
evidence of the amounts due and owing FBS Ag Credit by Borrower. On or about
the last day of each calendar month, FBS Ag Credit shall mail to Borrower a
statement setting forth the balance of Borrower's Loan Account, including
without limitation, principal, interest, expenses and fees. Each such statement
shall be subject to subsequent adjustment by FBS Ag Credit but shall, absent
manifest errors or omissions, be presumed correct and binding upon Borrower and
shall constitute an account stated unless, within sixty (60) days after receipt
of any statement from FBS Ag Credit, Borrower shall deliver to FBS Ag Credit
written objection specifying the error or errors, if any, contained in such
statement.
2.8 TERMINATION OF AGREEMENT. FBS Ag Credit shall have the right, without
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notice to Borrower, to terminate its commitment to make Advances pursuant to
this Agreement immediately upon a Matured Default, or upon the repayment in full
of all of the Liabilities. The Borrower shall have the right, with/out notice
to FBS Ag Credit, to terminate its commitment pursuant to this Agreement upon
the repayment in full of all Liabilities, including all fees. In addition, FBS
Ag Credit's commitment to make Advances pursuant to this Agreement shall be
deemed immediately terminated and all of the Liabilities shall be immediately
due and payable, without notice to Borrower, on the Termination Date if FBS Ag
Credit elects not to extend the Termination Date of the Line of Credit pursuant
to Section 2.1.1. In the event FBS Ag Credit's commitment to make Advances
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pursuant to this Agreement is terminated, the remainder of this Agreement shall
remain in full force and effect until the payment in full of the Liabilities.
Notwithstanding the foregoing, in the event that a proceeding under any
bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt or receivership law or statute is filed by or against Borrower, or Borrower
makes an assignment for the benefit of creditors, this Agreement shall be deemed
to be terminated immediately, and all the Liabilities shall be due and payable,
provided, however, that in the event a proceeding against Borrower is dismissed
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within thirty (30) days of the date of its filing then this Agreement shall be
deemed to be reinstated as of the date the order of dismissal becomes final and
FBS Ag Credit is given notice thereof.
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3 BORROWING BASE.
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3.1 ELIGIBLE ACCOUNTS. FBS Ag Credit shall have the right, in the
-----------------
exercise of FBS Ag Credit's reasonable discretion, to determine whether Accounts
are eligible for inclusion in the Borrowing Base at any particular time (such
eligible accounts being referred to as "Eligible Accounts"). Without limiting
FBS Ag Credit's right to determine that Accounts do not constitute Eligible
Accounts, the following Accounts shall not be Eligible Accounts: (a) all
Accounts which are at that time unpaid for a period exceeding sixty (60) days
after the original invoice date of the original invoice related thereto; (b) all
Accounts owing by an Account Debtor if more than twenty percent (20%) of the
Accounts owing by such Account Debtor are at that time unpaid for a period
exceeding sixty (60) days after the invoice due date of the original invoice
related thereto; (c) those Accounts, except Accounts owing from the Account
Debtors listed on Exhibit 3A, of an Account Debtor, the aggregate face amount of
----------
which is in excess of five percent (5%) of the aggregate face amount of all
other Eligible Accounts of all Account Debtors; (d) Accounts which arise out of
transactions with Affiliates; (e) Accounts of an Account Debtor that are located
outside the United States, unless such Accounts are covered by a letter of
credit issued or confirmed by a bank acceptable to FBS Ag Credit; (f) Accounts
which are or may be subject to rights of setoff or counterclaim by the Account
Debtor; and (g) Accounts which in FBS Ag Credit's opinion may be subject to
liens or conflicting claims of ownership, whether such liens or conflicting
claims are asserted or could be asserted by any Person. In the event that
Accounts previously included in the Borrowing Base cease to be Eligible
Accounts, Borrower shall promptly pay to FBS Ag Credit an amount sufficient to
ensure that the Liabilities, other than the Liabilities evidenced by the Line of
Credit Note, shall at no time exceed the then current Borrowing Base.
3.2 ELIGIBLE INVENTORY. FBS Ag Credit shall have the right, in the
------------------
exercise of FBS Ag Credit's reasonable discretion, to determine whether
Inventory is eligible for inclusion in the Borrowing Base at any particular time
(such eligible inventory being referred to as "ELIGIBLE INVENTORY"). Without
limiting FBS Ag Credit's right to determine that Inventory does not constitute
Eligible Inventory, the following Inventory shall not be Eligible Inventory: (a)
Inventory deemed to be out-of-condition or otherwise unmerchantable by the
United States Department of Agriculture, any state's Department of Agriculture,
or any other governmental agency or any department or division thereof having
regulatory authority over Borrower or any of Borrower's assets or activities;
(b) Inventory for which a prepayment has been received; (c) Inventory in the
possession of third parties, unless it is Inventory: (i) at a location shown on
Exhibit 3.B, for which FBS Ag Credit has received a bailee letter satisfactory
-----------
to FBS Ag Credit, executed by such third party, or (ii) covered by negotiable
warehouse receipts or negotiable bills of lading issued by either: (A) a
warehouseman licensed and bonded by the United States Department
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of Agriculture or any state's Department of Agriculture, or (B) a recognized
carrier having an office in the United States and in a financial condition
reasonably acceptable to FBS Ag Credit, which receipts or bills of lading
designate FBS Ag Credit directly or by endorsement as the only Person to which
or to the order of which the warehouseman or carrier is legally obligated to
deliver such goods; and (d) Inventory which in FBS Ag Credit's opinion may be
subject to liens or conflicting claims of ownership, whether such liens or
conflicting claims are asserted or could be asserted by any Person. In the event
that Inventory previously included in the Borrowing Base ceases to be Eligible
Inventory, Borrower shall promptly pay to FBS Ag Credit an amount sufficient to
ensure that the Liabilities, other than the Liabilities evidenced by the Line of
Credit Note, shall at no time exceed the then current Borrowing Base.
3.3 ELIGIBLE EQUIPMENT. FBS Ag Credit shall have the right, in the
------------------
exercise of FBS Ag Credit's reasonable discretion, to determine whether
Equipment is eligible for inclusion in the Borrowing Base at any particular time
(such eligible equipment being referred to as "ELIGIBLE EQUIPMENT"). Without
limiting FBS Ag Credit's right to determine that Equipment does not constitute
Eligible Equipment, the following Equipment shall not be Eligible Equipment:
(a) Equipment in the possession of third parties; (b) Equipment which in FBS Ag
Credit's opinion may be subject to liens or conflicting claims of ownership,
whether such liens or conflicting claims are asserted or could be asserted by
any Person; and (c) mobile homes unless specifically approved in writing by FBS
Ag Credit. In the event that Equipment previously included in the Borrowing
Base ceases to be Eligible Equipment, Borrower shall promptly pay to FBS Ag
Credit an amount sufficient to ensure that the Liabilities, other than the
Liabilities evidenced by the Line of Credit Note, shall at no time exceed the
then current Borrowing Base.
3.4 ELIGIBLE PREPAID EXPENSES. FBS Ag Credit shall have the right, in the
-------------------------
exercise of FBS Ag Credit's reasonable discretion, to determine whether amounts
of prepaid expenses are eligible for inclusion in the Borrowing Base at any
particular time (such eligible prepaid expenses being referred to as "ELIGIBLE
PREPAID EXPENSES"). Without limiting FBS Ag Credit's right to determine that
prepaid expenses do not constitute Eligible Prepaid Expenses, the following
prepaid expenses shall not be Eligible Prepaid Expenses: (a) amounts prepaid for
services or for goods, which when received by Borrower would not be Inventory;
(b) all amounts prepaid to any Person, if at that time such Person is more than
thirty (30) days delinquent in the performance of any obligation to Borrower;
(c) amounts prepaid to Affiliates; (d) amounts prepaid to a Person that is
located outside the United States unless the performance obligation of such
Person is secured by a letter of credit issued or confirmed by a bank acceptable
to FBS Ag Credit or covered by a performance bond in form and substance
acceptable to FBS Ag Credit; (e) amounts prepaid which may be subject to rights
of setoff or counterclaim by the Person to whom they were paid; and (f) amounts
prepaid, the performance obligation relating to which, in FBS Ag
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Credit's opinion, may be subject to liens or conflicting claims, whether such
liens or conflicting claims are asserted or could be asserted by any Person, or
may not be performed by the Person to which the prepayment was made because of
the financial or operational condition of such Person. In the event that prepaid
expenses previously included in the Borrowing Base cease to be Eligible Prepaid
Expenses, Borrower shall promptly pay to FBS Ag Credit an amount sufficient to
ensure that the Liabilities, other than the Liabilities evidenced by the Line of
Credit Note, shall at no time exceed the then current Borrowing Base.
4 CONDITIONS TO ADVANCES.
----------------------
Notwithstanding any other provisions to the contrary contained in this
Agreement, the making of any Advance provided for in this Agreement shall be
conditioned upon the following:
4.1 APPROVAL OF FBS AG CREDIT COUNSEL. Legal matters, if any, relating to
---------------------------------
each such Advance shall have been reviewed by and shall be satisfactory to
counsel for FBS Ag Credit.
4.2 COMPLIANCE. All representations and warranties contained in this
----------
Agreement shall be true on and as of the date of the making of such Advance as
if such representations and warranties had been made on and as of such date, and
no Default or Matured Default shall have occurred and be continuing or shall
exist.
4.3 DOCUMENTATION. Borrower shall have executed and/or delivered to FBS
-------------
Ag Credit all of the documents listed on the List of Closing Documents attached
as Exhibit 4A and Borrower's Borrowing Base Certificate setting forth the
----------
Borrowing Base as of the date of Borrower's request for the initial Line of
Credit Advance.
4.4 HEDGING ACTIVITIES. FBS Ag Credit shall be satisfied that Borrower is
------------------
in compliance with Borrower's covenants and agreements contained in Section
-------
5.15.
4.5 DELIVERY OF PROJECTIONS. Borrower shall have delivered to FBS Ag
-----------------------
Credit the month by month budget referred to in Section 7.1(d).
--------------
4.6 ADDITIONAL CONDITIONS PRECEDENT. FBS Ag Credit and its counsel have
-------------------------------
determined that the Subordinated Debt meets FBS underwriting guidelines for
subordinated debt to be treated as equity. Horizon Organic Holding Corporation
shall have sold at least $2.5 Million Dollars of stock as proposed in its
Offering Memorandum for the sale stock through May 23, 1997 or as extended in
accordance therewith.
-15-
5 SECURITY.
--------
5.1 SECURITY INTERESTS AND LIENS. To secure the payment and performance
----------------------------
of the Liabilities, Borrower hereby grants to FBS Ag Credit a continuing
security interest in and to the following property and interests in property of
Borrower, whether now owned or existing or hereafter acquired or arising and
wheresoever located: all Accounts, Inventory, Equipment, Farm Products, General
Intangibles, Margin Accounts, Documents, all accessions to, substitutions for,
and all replacements, products and proceeds of the foregoing (including without
limitation, proceeds of insurance policies insuring any of the foregoing), all
books and records pertaining to any of the foregoing (including without
limitation, customer lists, credit files, computer programs, printouts and other
computer materials and records), and all insurance policies insuring any of the
foregoing. Borrower agrees to grant to FBS Ag Credit other and additional
security as described in Section 5.16.
------------
5.2 ENDORSEMENT BY FBS AG CREDIT. Borrower authorizes FBS Ag Credit to
----------------------------
endorse, in Borrower's name, any item, however received by FBS Ag Credit,
representing payment on or other proceeds of any of the Collateral.
5.3 DELIVERY OF WAREHOUSE RECEIPTS TO FBS AG CREDIT. In the event that
-----------------------------------------------
any Inventory becomes the subject of a negotiable or nonnegotiable warehouse
receipt, said warehouse receipt shall be promptly delivered to FBS Ag Credit
with such endorsements and assignments as are necessary to vest title and
possession in FBS Ag Credit. Provided that a Matured Default does not then
exist and would not be created thereby, FBS Ag Credit shall return such
warehouse receipts to Borrower within two (2) days of Borrower's request
therefor, but only for purposes of negotiation, delivery or exchange in the
ordinary course of Borrower's business, and provided, however, that Borrower
-------- -------
shall comply with such terms and conditions deemed appropriate by FBS Ag Credit
to secure the return to FBS Ag Credit of the proceeds of such warehouse
receipts, where such return of proceeds would be required in accordance with
Borrower's obligations to FBS Ag Credit under the Financing Agreements.
5.4 PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS.
---------------------------------------------------------------
Borrower shall execute and deliver to FBS Ag Credit, concurrently with the a
execution of this Agreement and at any time hereafter, all financing statements
or other documents (and pay the cost of filing or recording the same in all
public offices deemed necessary by FBS Ag Credit), as FBS Ag Credit may request,
in a form satisfactory to FBS Ag Credit, to perfect and keep perfected the
security interest in the Collateral granted by Borrower to FBS Ag Credit and
otherwise to protect and preserve the Collateral and FBS Ag Credit's security
interests. Should Borrower fail to do so, FBS Ag Credit is authorized to sign
any such financing statements as Borrower's agent. Borrower further agrees that
a carbon, photographic, photostatic
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or other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement. To perfect FBS Ag Credit's security
interest in any Equipment covered by certificates of title, Borrower shall
ensure that all such certificates of title are properly noted or endorsed by the
appropriate state officials whenever such notation or endorsement is, in FBS Ag
Credit's sole determination, either permitted or required as a condition to
perfection.
5.5 LOSS OF VALUE OF COLLATERAL. Borrower shall immediately notify FBS Ag
---------------------------
Credit of any material loss or decrease in the value of the Collateral.
5.6 COLLECTION OF ACCOUNTS. Borrower shall take all reasonable steps,
----------------------
including without limitation, the placement of such designations on invoices as
may be appropriate, to cause all Account Debtors to make all payments to a
lockbox at Colorado National Bank, cash collateral account number to be
designated in writing to FBS Ag Credit. Upon a Matured Default, Borrower
designates, makes, constitutes and appoints FBS Ag Credit (and all Persons
designated by FBS Ag Credit) as Borrower's true and lawful attorney-in-fact,
with power, in Borrower's or FBS Ag Credit's name, to: (a) demand payment of
Accounts; (b) enforce payment of Accounts by legal proceedings or otherwise; (c)
exercise all of Borrower's rights and remedies with respect to proceedings
brought to collect an Account; (d) sell or assign any Account upon such terms,
for such amount and at such time or times as FBS Ag Credit deems advisable; (e)
settle, adjust, compromise, extend or renew any Account; (f) discharge and
release any Account; (g) take control in any manner of any item of payment or
proceeds of any Account; (h) prepare, file and sign Borrower's name upon any
items of payment or proceeds and deposit the same to FBS Ag Credit's account on
account of the Liabilities; (i) endorse Borrower's name upon any chattel paper,
document, instrument, invoice, warehouse receipt, xxxx of lading, or similar
document or agreement relating to any Account or any goods; (j) sign Borrower's
name on any verification of Accounts and notices to Account Debtors; (k)
prepare, file and sign Borrower's name on any proof of claim in bankruptcy or
similar proceeding against any Account Debtor; and (1) do all acts and things
which are necessary, in FBS Ag Credit's sole discretion, to fulfill Borrower's
obligations under this Agreement. The foregoing power of attorney is coupled
with an interest and is therefore irrevocable.
5.7 ACCOUNT COVENANTS. Borrower shall: (a) promptly upon Borrower's
-----------------
learning thereof, inform FBS Ag Credit, in writing, of any material delay in
Borrower's performance of any of Borrower's obligations to any Account Debtor or
of any assertion of any claims, offsets or counterclaims by any Account Debtor;
(b) not permit or agree to any extension, compromise or settlement or make any
change or modification of any kind or nature with respect to any Account in
excess of $50,000 (including without limitation, any of the terms thereof
without immediately giving notice to FBS Ag Credit; and (c) promptly upon
Borrower's learning thereof, furnish to and inform FBS Ag Credit of all material
adverse
-17-
information relaxing to the financial condition of any Account Debtor if
Accounts attributable to such Account Debtor aggregate in excess of $50,000 or
if such information would render such Account no longer an Eligible Account.
5.8 ACCOUNT RECORDS AND VERIFICATION RIGHTS. Borrower represents and
---------------------------------------
warrants to and covenants with FBS Ag Credit that Borrower now keeps and at all
times shall keep correct and accurate records relating to the Accounts and the
financial and payment records of the Account Debtors, all of which records shall
be available upon demand during Borrower's usual business hours to any of FBS Ag
Credit's officers, employees or agents. Any of FBS Ag Credit's officers,
employees or agents shall have the right at any time, in FBS Ag Credit's name,
in the name of a fictional nominee or in the name of Borrower, to verify the
validity, amount or any other matter relating to any Accounts, by mail,
telephone, telegraph or otherwise. Borrower shall promptly notify FBS Ag Credit
of any amounts due and owing from an Account Debtor in excess of $50,000 which
are in dispute for any reason.
5.9 NOTICE TO ACCOUNT DEBTORS. FBS Ag Credit may, in FBS Ag Credit's sole
-------------------------
discretion, at any time or times upon or after a Matured Default, and without
prior notice to Borrower, notify any or all Account Debtors that the Accounts
have been assigned to FBS Ag Credit and that FBS Ag Credit has been granted a
security interest therein. FBS Ag Credit may direct any or all Account Debtors
to make all payments upon the Accounts directly to FBS Ag Credit or to a lockbox
to be established pursuant to Section 5.6. FBS Ag Credit shall furnish Borrower
-----------
with a copy of such notice.
5.10 INVENTORY RECORDS. Borrower represents and warrants to and covenants
-----------------
with FBS Ag Credit that Borrower now keeps and at all times shall keep correct
and accurate records itemizing and describing the kind, type, quality and
quantity of Inventory, Borrower's costs and selling prices of Inventory and
daily withdrawals and additions of Inventory, all of which records shall be
available on demand during Borrower's usual business hours to any of FBS Ag
Credit's officers, employees or agents.
5.11 SPECIAL COLLATERAL. Immediately upon Borrower's receipt thereof and
------------------
upon request by FBS Ag Credit, Borrower shall (except as provided for in Section
-------
5.3 with regard to warehouse receipts) deliver or cause to be delivered to FBS
---
Ag Credit, with such endorsements and assignments as are necessary to vest title
and possession in FBS Ag Credit, all chattel paper, instruments and Documents
which Borrower now owns or which Borrower may at any time acquire. Borrower
shall promptly xxxx all copies of such chattel paper, instruments and Documents
to show that they are subject to FBS Ag Credit's security interest.
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5.12 REMITTANCE OF PROCEEDS TO FBS AG CREDIT. Except as otherwise provided
---------------------------------------
in Section 5.6, in the event any proceeds of any Collateral shall come into the
-----------
possession of Borrower (or any of Borrower's shareholders, directors, officers,
employees, agents or any Persons acting for or in concert with Borrower),
Borrower or any such Person shall receive, as the sole and exclusive property of
FBS Ag Credit, and as trustee for FBS Ag Credit, all monies, checks, notes,
drafts and all other payments for and/or other proceeds of Collateral, and no
later than the first business day following receipt, Borrower shall remit the
same (or cause the same to be remitted), in kind, to FBS Ag Credit or to such
agent or agents (at such agent's or agents' designated address or addresses) as
are appointed by FBS Ag Credit for that purpose, to be applied to the
Liabilities pursuant to Section 10.14.
-------------
5.13 SAFEKEEPING OF COLLATERAL. Except as otherwise provided in Section
------------------------- -------
10.6, FBS Ag Credit shall not be responsible for: (a) the safekeeping of the
----
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the
value of the Collateral; or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency or any other Person relating to the Collateral. All
risk of loss, damage, destruction or diminution in value of the Collateral shall
be borne by Borrower.
5.14 SALES AND USE OF COLLATERAL. Except as set forth in this Section,
---------------------------
Borrower shall not sell, lease, transfer or otherwise dispose of any Collateral.
So long as there shall not have occurred a Matured Default, Inventory may be
sold by Borrower in the ordinary course of Borrower's business, but shall not
otherwise be taken or removed from Borrower's premises, except for raw materials
or work in process for the purpose of conversion into finished goods. Upon a
Matured Default, neither Inventory nor any other Collateral shall be sold or
taken or removed from Borrower's premises, except with the prior written consent
of FBS Ag Credit and upon payment of an amount equivalent to the value of the
Collateral to be sold or removed, such amounts to be paid to FBS Ag Credit to be
applied upon the Liabilities. So long as there shall not have occurred a
Matured Default, Collateral may be used by Borrower in the ordinary course of
Borrower's business, subject to FBS Ag Credit's continuing security interest.
Upon a Matured Default, Collateral shall not be used except with the prior
written consent of FBS Ag Credit.
5.15 MARGIN ACCOUNTS. Unless FBS Ag Credit shall otherwise consent in
---------------
writing, any Margin Accounts shall be kept with a Broker acceptable to FBS Ag
Credit ("Broker"). Borrower represents and warrants to FBS Ag Credit that after
the time any Margin Accounts are opened by Borrower: (a) Borrower is now the
owner, free and clear of all liens, security interests and encumbrances, except
for those in favor of FBS Ag Credit or Broker, of any and all Margin Accounts
which are listed in any financial statements or books and records of Borrower as
being the property of Borrower;and (b) except as otherwise permitted by this
Agreement, Borrower owns no open futures positions which are not either covered
by existing, unsold
-19-
Inventory or covered by reciprocal contracts for future delivery of the
product by reliable sellers, or directly related to Inventory which Borrower
plans to purchase in the ordinary course of Borrower's business. Concurrently
with the execution of this Agreement, Borrower, the Broker and FBS Ag Credit
have executed an Assignment of Hedging Account and Futures Contracts, in form
and substance acceptable to FBS Ag Credit. All of FBS Ag Credit's rights under
such Assignment of Hedging Account and Futures Contracts shall be in addition to
FBS Ag Credit's rights here-under, and shall also apply to any Margin Accounts
which are maintained, in violation of this Agreement, with any Person other than
the Broker. Borrower warrants that the Margin Accounts will be used solely for
the hedging of Borrower's investments in Inventory and not for speculative
purposes.
5.16 ADDITIONAL SECURITY. A Collateral Assignment of Borrowers'
-------------------
trademarks and tradenames, the form of which is attached as Exhibit 5C.
----------
Collateral Assignments of any long term sales contracts as the same may come
into existence from time to time.
6 WARRANTIES.
----------
Borrower represents and warrants that as of the date of the execution of
this Agreement:
6.1 LITIGATION AND PROCEEDINGS. Except as set forth on Part 1 of Exhibit
-------------------------- -------
6A, no judgments are outstanding against Borrower, nor is there now pending or
--
threatened any litigation, contested claim, or governmental proceeding by or
against Borrower, except for judgments and pending or threatened litigation,
contested claims and governmental proceedings which are not, in the aggregate,
material to Borrower's financial condition, results of operations or business.
6.2 OTHER AGREEMENTS. Except as set forth on part 2 of Exhibit 6A,
---------------- ----------
Borrower is not in default under any contract, lease or commitment to which
Borrower is a party or by which Borrower is bound. Borrower knows of no
dispute, except as set forth on part 2 of Exhibit 6A or as previously disclosed
----------
to FBS Ag Credit in writing, relating to any contract, lease, or commitment
which is material to the financial success of Borrower.
6.3 LICENSES, PATENTS, COPYRIGHTS, TRADEMARKS AND TRADE NAMES. All of
---------------------------------------------------------
Borrower's licenses, patents, copyrights, trademarks and trade names and all of
Borrower's applications for any of the foregoing are set forth on part 3 of
Exhibit 6A. There is no action, proceeding, claim or complaint pending or
----------
threatened to be brought against Borrower by any Person which might jeopardize
any of Borrower's interest in any of the foregoing licenses, patents,
copyrights, trademarks, trade names or applications.
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6.4 COLLATERAL. Except as contemplated by this Agreement and except as set
----------
forth on part 4 of Exhibit 6A, all of the Collateral is free and clear of all
----------
security interests, liens, claims and encumbrances. No goods held by Borrower on
consignment or under sale or return contracts have been represented to be
Inventory and no amounts receivable by Borrower in respect of the sale of such
goods (except markups or commissions which have been fully earned by Borrower)
have been represented to be Accounts. All Producer Payables which are owing to
suppliers of any of the Collateral have been paid when due and no Person to whom
such Producer Payables are owed has asserted any interest in the Collateral.
Borrower will furnish, at FBS Ag Credit's request, the names and addresses of
all Persons who supply Inventory to Borrower or who deliver goods to Borrower on
consignment or under sale or return contracts.
6.5 LOCATION OF ASSETS; CHIEF EXECUTIVE OFFICE. The chief executive
------------------------------------------
office of Borrower is located at 0000 Xxxxxxxxx Xx, #000, Xxxxxxx, Xxxxxxxx
00000 and Borrower's assets (including without limitation, Inventory and
Equipment) are all located in the locations set forth on part 5 of Exhibit 6A.
----------
As of the execution of this Agreement, the books and records of Borrower, and
all of Borrower's chattel paper and records of account are located at the chief
executive office of Borrower. If any change in any of such locations shall
occur, Borrower shall promptly notify FBS Ag Credit of such change.
6.6 TAX LIABILITIES. Borrower has filed all federal, state and local tax
---------------
reports and returns required by any law or regulation to be filed by Borrower
and has either duly paid all taxes, duties and charges indicated to be due on
the basis of such returns and reports or has made adequate provision for the
payment thereof, and the assessment of any material amount of additional taxes
in excess of those paid and reported is not reasonably expected. The reserves
for taxes reflected on Borrower's balance sheet are adequate in amount for the
payment of all liabilities for all taxes (whether or not disputed) of Borrower
accrued through the date of such balance sheet. There are no material
unresolved questions or claims concerning any tax liability of Borrower, except
as described on part 6 of Exhibit 6A.
----------
6.7 INDEBTEDNESS AND PRODUCER PAYABLES. Except: (a) for the loans from
----------------------------------
FBS Ag Credit contemplated by this Agreement; (b) as disclosed on part 7 of
Exhibit 6A; and (c) as disclosed on the financial statements identified in
----------
Section 6.14, Borrower has no other indebtedness, contingent obligations or
------------
liabilities, outstanding bonds, letters of credit or acceptances to any other
Person or loan commitments from any other Person. Borrower's Producer Payables,
other than those being contested in good faith by Borrower, are not past due.
-21-
6.8 OTHER NAMES. Borrower has not, during the preceding five (5) years,
been known by or used any names other than those disclosed on part 8 of
Exhibit 6A.
----------
6.9 AFFILIATES. Borrower has no Affiliates, other than those Persons
----------
disclosed on part 9 of Exhibit 6A, and the legal relationships of Borrower to
----------
each such Affiliate are accurately and completely described thereon.
6.10 ENVIRONMENTAL MATTERS. (a) Except as disclosed on part 10 of Exhibit
--------------------- -------
6A, Borrower has not received any notice to the effect, or has any knowledge,
--
that the Property or its operations are not in compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations ("ENVIRONMENTAL LAWS") or are the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which noncompliance or remedial action could have a material
adverse effect on the business, operations, Property, assets or conditions
(financial or otherwise) of Borrower; (b) there have been no releases of
hazardous materials at, on or under the Property that, singly or in the
aggregate, have, or may reasonably be expected to have, a material adverse
effect on the financial condition, operations, assets, business, Property or
prospects of Borrower; (c) there are no underground storage tanks, active or
abandoned, including without limitation petroleum storage tanks, on or under the
Property that, singly or in the aggregate, have, or may reasonably be expected
to have, a material adverse effect on the financial condition, operations,
assets, business or Property or prospects of Borrower; (d) Borrower has not
directly transported or directly arranged for the transportation of any
hazardous material to any location which is listed or proposed for listing on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material claims
against Borrower for any remedial work, damage to natural resources or personal
injury, including without limitation, claims under CERCLA; and (e) except as
disclosed on part 10 of Exhibit 6A, no conditions exist at, on or under the
----------
Property which, with the passage of time, or the giving of notice or both, would
rise to any material liability under any Environmental Laws. Notwithstanding
anything in this Section 6.10 to the contrary the warranties set forth in this
------------
Section 6.10, as to Horizon Idaho, are as to the best of its knowledge.
------------
6.11 EXISTENCE. Borrowers are corporations duly organized and in good
---------
standing under the laws of the State of Colorado and Delaware, respectively and
are duly qualified to do business and are in good standing in all states where
such qualification is necessary, except for those jurisdictions in which the
failure so to qualify would not, in the aggregate, have a material adverse
effect on Borrowers' financial condition, results of operations or business.
-22-
6.12 AUTHORITY. The execution and delivery by Borrower of this Agreement
---------
and all of the other Financing Agreements and the performance of Borrower's
obligations hereunder and thereunder: (a) are within Borrower's powers; (b) are
duly authorized by Borrower's board of directors or board of managers; (c) are
not in contravention of the terms of Borrower's articles or certificate of
incorporation or bylaws; (d) are not in contravention of any law or laws, or of
the terms of any indenture, agreement or undertaking to which Borrower is a
party or by which Borrower or any of Borrower's property is bound; (e) do not
require any governmental consent, registration or approval; (f) do not
contravene any contractual or governmental restriction binding upon Borrower;
and (g) will not, except as contemplated or permitted by this Agreement, result
in the imposition of any lien, charge, security interest or encumbrance upon any
property of Borrower under any existing indenture, mortgage, deed of trust, loan
or credit agreement or other material agreement or instrument to which Borrower
is a party or by which Borrower or any of Borrower's property may be bound or
affected. Borrower shall deliver to FBS Ag Credit, upon FBS Ag Credit's request
therefor, a written opinion of counsel as to the matters described in the
foregoing clauses (a) through (g).
6.13 BINDING EFFECT. This Agreement and all of the other Financing
--------------
Agreements set forth the legal, valid and binding obligations of Borrower and
Lender and are enforceable against Borrower and Lender in accordance with their
respective terms.
6.14 CORRECTNESS OF FINANCIAL STATEMENTS. The financial statements
-----------------------------------
previously delivered by Borrower to FBS Ag Credit present fairly the financial
condition of Borrower, and have been prepared in accordance with generally
accepted accounting principles consistently applied. As of the date of such
financial statements, and since such date, there has been no materially adverse
change in the condition or operation of Borrower, nor has Borrower mortgaged,
pledged or granted a security interest in or encumbered any of Borrower's assets
or properties since such date.
6.15 EMPLOYEE CONTROVERSIES. There are no controversies pending or
----------------------
threatened between Borrower or any of Borrower's employees, other than employee
grievances arising in the ordinary course of Borrower's business which are not,
in the aggregate, material to the financial success of Borrower.
6.16 COMPLIANCE WITH LAWS AND REGULATIONS. Borrower is in compliance
------------------------------------
with all laws, orders, regulations and ordinances of all federal, foreign, state
and local governmental authorities relating to the business operations and the
assets of Borrower, except for laws, orders, regulations and ordinances, the
violation of which would not have an adverse effect on the value of the
Collateral or FBS Ag Credit's interest in any of the Collateral and, in the
aggregate, would not have a
-23-
material adverse effect on Borrower's financial condition, results of
operations or business. Borrowers are duly licensed as USDA approved dairies
and agrees to furnish copies to FBS Ag Credit of any audits or inspections
conducted by any person relating to such license.
6.17 ACCOUNT WARRANTIES. Borrower warrants and represents to FBS Ag
------------------
Credit that: (a) except as disclosed to FBS Ag Credit from time to time in
writing, all Accounts which are at any time included in the Borrowing Base or
which are reflected on Borrower's financial statements delivered to FBS Ag
Credit pursuant to Section 7.1 are genuine, in all respects what they purport to
-----------
be, have not been reduced to any judgment, are evidenced by not more than one
executed original instrument, agreement, contract or document (which, if any,
has been delivered to FBS Ag Credit), and represent undisputed, bona fide
transactions completed in accordance with the terms and conditions of any
related document; (b) the Accounts have not been sold or pledged to any Person
other than FBS Ag Credit; and (c) except as disclosed to FBS Ag Credit from time
to time in writing, Borrower has no knowledge of any fact or circumstance which
would impair the validity or collectibility of any of the Accounts.
6.18 INVENTORY WARRANTIES. Borrower warrants and represents to FBS Ag
--------------------
Credit that: (a) except for goods covered by Documents which have been
delivered to FBS Ag Credit, and except as promptly disclosed to FBS Ag Credit
from time to time in writing, all Inventory is located on the premises described
in Section 6.5 or is in transit; and (b) except as promptly disclosed to FBS Ag
-----------
Credit from time to time in writing, all Inventory shall be of good and
merchantable quality, free from any defects which might affect the market value
of such Inventory.
6.19 SOLVENCY. Borrower is solvent, able to pay Borrower's debts
--------
generally as such debts mature, and has capital sufficient to carry on
Borrower's business and all businesses in which Borrower is about to engage.
The saleable value of Borrower's total assets at a fair valuation, and at a
present fair saleable value, is greater than the amount of Borrower's total
obligations to all Persons. Borrower will not be rendered insolvent by the
execution or delivery of this Agreement or of any of the other Financing
Agreements or by the transactions contemplated hereunder or thereunder.
6.20 PENSION REFORM ACT. No events, including without limitation, any
------------------
"reportable event" or "prohibited transactions," as those terms are defined in
the Employee Retirement Income Security Act of 1974 as the same may be amended
from time to time ("ERISA"), have occurred in connection with any defined
benefit pension plan ("PENSION PLAN") of Borrower which might constitute grounds
for the termination of any such Pension Plan by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to
-24-
administer any such Pension Plan. All of Borrower's Pension Plans meet, as
of the date of this Agreement, the minimum funding standards of Section 302 of
ERISA.
6.21 MARGIN SECURITY. Borrower does not own any margin security and none
---------------
of the loans advanced hereunder shall be used for the purpose of purchasing or
carrying any margin securities or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase any margin securities or
for any other purpose not permitted by Regulations U or G of the Board of
Governors of the Federal Reserve System.
6.22 SURVIVAL OF WARRANTIES. All representations and warranties contained
----------------------
in this Agreement or any of the other Financing Agreements shall survive the
execution and delivery of this Agreement and shall be true from the date of this
Agreement until the Liabilities shall be paid in full and FBS Ag Credit shall
cease to be committed to make loans under this Agreement.
6.23 EQUIPMENT IDENTIFICATION. Descriptions, including without
------------------------
limitation, serial identification numbers, of all Equipment of Borrower, are
contained on Exhibit 6B.
----------
7 AFFIRMATIVE COVENANTS.
---------------------
Borrower covenants and agrees that so long as any Liabilities remain
outstanding, and (even if there shall be no Liabilities outstanding) so long as
FBS Ag Credit remains committed to make loans under this Agreement:
7.1 FINANCIAL AND OTHER INFORMATION. Except as otherwise expressly
-------------------------------
provided for in this Agreement, Borrower shall keep proper books of record and
account in which full and true entries will be made of all dealings and
transactions of or in relation to the business and affairs of Borrower, in
accordance with generally accepted accounting principles consistently applied,
and Borrower shall cause to be furnished to FBS Ag Credit, from time to time and
in a form acceptable to FBS Ag Credit, such information as FBS Ag Credit may
reasonably request, including without limitation, the following:
(a) as soon as practicable and in any event within one hundred and
twenty (120) days after the end of fiscal year 1997 and within ninety (90) days
of each fiscal year of Borrower thereafter, audited statements of income,
retained earnings and changes in the financial condition of Borrower for each
year, and a balance sheet of Borrower for such year, setting forth in each case,
in comparative form, corresponding figures as of the end of the preceding fiscal
year together with a copy of the management letter, all in reasonable detail and
satisfactory in scope to FBS Ag Credit and certified to Borrower by such
independent public accountants as are
-25-
selected by Borrower and satisfactory to FBS Ag Credit, whose opinion shall be
in scope and substance satisfactory to FBS Ag Credit;
(b) as soon as practicable and in any event within thirty (30) days
after the end of each monthly accounting period in each fiscal year of Borrower:
(i) statements of income and retained earnings of Borrower for such monthly
period and for the period from the beginning of the then current fiscal year to
the end of such monthly period, and a balance sheet of Borrower as of the end of
such monthly period, setting forth in each case, in comparative form, figures
for the corresponding periods in the preceding fiscal year, all in reasonable
detail and certified as accurate by the chief financial officer of Borrower,
subject to changes resulting from normal year end adjustments, (ii) copies of
all operating statements for such month prepared by Borrower for its internal
use, including without limitation, statements of cash flow, purchases and sales
of Inventory and other goods, and (iii) a compliance certificate of the chief
financial officer of Borrower in the form attached as Exhibit 7A;
----------
(c) as soon as practicable and in any event within fifteen (15) days
after the end of each monthly accounting period in each fiscal year of Borrower:
(i) Borrowing Base Certificate for Borrower computed as of the last day of such
month, signed by the chief financial officer of Borrower; (ii) an aged trial
balance of all Accounts indicating which Accounts are thirty (30), sixty (60)
and ninety (90) days past the original invoice date of the original invoice
related thereto and listing the names of all Account Debtors, (iii) a listing of
Borrower's accounts payable indicating which accounts payable are more than
thirty (30) days past due;
(d) as soon as practicable and in any event within ninety (90) days of
each fiscal year of Borrower month by month budget for the then current fiscal
year.
7.2 CONDUCT OF BUSINESS. Except as contemplated by this Agreement,
-------------------
Borrower shall: (a) maintain Borrower's existence and maintain in full force
and effect all licenses, bonds, franchises, leases, patents, contracts and other
rights necessary or desirable to the profitable conduct of Borrower's business;
(b) continue in, and limit Borrower's operations to, the same general line of
business as that presently conducted by Borrower; (c) comply with all applicable
laws and regulations of any federal, state or local governmental authority,
except for such laws and regulations the violation of which would not, in the
aggregate, have a material adverse effect on Borrower's financial condition,
results of operations or business; and (d) keep and conduct Borrower's business
separate and apart from the business of Borrower's Affiliates.
7.3 MAINTENANCE OF PROPERTIES. Borrower shall keep Borrower's real
-------------------------
estate, leaseholds, equipment and other fixed assets in good condition, repair
and working
-26-
order, normal wear and tear excepted, and shall not allow Borrower's chief
executive office or any of the Collateral to be moved from the locations set
forth in Section 6.5 (or to be placed on consignment) without the written
-----------
consent of FBS Ag Credit, which consent shall not be unreasonably withheld.
Borrower shall keep the Inventory in good and merchantable condition and shall,
as applicable, clean, feed, shelter, store, secure, refrigerate, water,
medicate, fumigate, fertilize, cultivate, irrigate, prune, process and otherwise
maintain the Inventory in accordance the standards and practices adhered to
generally by others in the same businesses as Borrower. Borrower shall reinvest
a minimum of $2,750,000 into the dairy livestock Collateral during the fiscal
year-ending December 31, 1997. In the event Borrower does not purchase the
Maryland Dairy then Borrower shall reinvest a minimum of $2,000,000 into the
dairy livestock Collateral during the fiscal year-ending December 31, 1997.
Borrower shall reinvest a minimum of $2,000,000 into the dairy livestock
Collateral during the fiscal year-ending December 31, 1998 and during each
fiscal year thereafter.
7.4 BORROWER'S LIABILITY INSURANCE. Borrower shall maintain, at
------------------------------
Borrower's expense, such public liability and property damage insurance as is
ordinarily maintained by other companies in similar businesses, provided,
--------
however, that in no event shall such public liability insurance provide for
-------
coverage less than $1,000,000 per occurrence for personal injury and $1,000,000
per occurrence for property damage. Borrower's public liability insurance may
provide for a deductible of not more than $50,000 per occurrence. All such
policies of insurance shall be in form and with insurers reasonably acceptable
to FBS Ag Credit and copies thereof, together with all amendments and schedules,
shall be provided to FBS Ag Credit within ten (10) days of Borrower's receipt of
the same.
7.5 BORROWER'S PROPERTY INSURANCE. Borrower shall bear the full risk of
-----------------------------
loss from any cause of any nature whatsoever in respect to the Collateral. At
Borrower's own cost and expense, Borrower shall keep all Collateral fully
insured, with carriers, and in amounts acceptable to FBS Ag Credit, against the
hazards of fire, theft, collision, spoilage, hail, those covered by extended or
all risk coverage insurance and such others as may be required by FBS Ag Credit.
Borrower shall cause to be delivered to FBS Ag Credit the insurance policies
therefor or proper certificates evidencing the same. Such policies shall
provide, in manner satisfactory to FBS Ag Credit, that any losses under such
policies shall be payable first to FBS Ag Credit, as FBS Ag Credit's interest
may appear. Each such policy shall include a provision for thirty (30) days'
prior written notice to FBS Ag Credit of any cancellation or expiration and show
FBS Ag Credit as mortgagee and loss payee as provided in a form of loss payable
endorsement in form and substance satisfactory to FBS Ag Credit. In the event of
any loss covered by any such policy, the carrier named in such policy is
directed by Borrower to make payment for such loss to FBS Ag Credit and not to
Borrower, or to Borrower and FBS Ag Credit jointly. Borrower makes,
-27-
constitutes and appoints FBS Ag Credit (and all Persons designated by FBS Ag
Credit) as Borrower's true and lawful agent and attorney-in-fact, with power to
make, settle or adjust claims under such policies of insurance (provided,
--------
however, that so long as there shall not have occurred a Matured Default, FBS Ag
-------
Credit shall consult with Borrower prior to finally making, settling or
adjusting claims under such policies of insurance and will not settle such
claims without Borrower's consent, which consent will not be unreasonably
withheld). The foregoing power of attorney is coupled with an interest and is
therefore irrevocable. If payment as a result of any insurance losses shall be
paid by check, draft or other instrument payable to Borrower, or to Borrower and
FBS Ag Credit jointly, FBS Ag Credit may endorse the name of Borrower on such
check, draft or other instrument, and may do such other things as FBS Ag Credit
may deem advisable to reduce the same to cash. All loss recoveries received by
FBS Ag Credit on account of any such insurance may be applied and credited by
FBS Ag Credit to the Liabilities. Any surplus of insurance proceeds in excess
of the Liabilities shall be paid by FBS Ag Credit to Borrower. Any deficiency
reasonably determined by FBS Ag Credit to exist after application of insurance
proceeds to the Liabilities shall be paid by Borrower to FBS Ag Credit, on
demand. If Borrower fails to procure insurance as provided in this Agreement,
or to keep the same in force, or fails to perform any of Borrower's other
obligations hereunder, then FBS Ag Credit may, at FBS Ag Credit's option, and
without obligation to do so, obtain such insurance and pay the premium thereon
for the account of Borrower, or make whatever other payments FBS Ag Credit may
deem appropriate to protect FBS Ag Credit's security for the Liabilities. Any
such payments shall be additional Liabilities of Borrower to FBS Ag Credit,
payable on demand and secured by the Collateral.
7.6 FINANCIAL COVENANTS AND RATIOS. Borrower shall maintain as of the end
------------------------------
of each month: (a) a Tangible Net Worth of not less than $5,000,000 plus 60% of
the cumulative annual positive net income beginning with the fiscal year end and
consolidated financial results of December 31, 1997; (b) a Working Capital Ratio
of not less than 1.15 to 1; (c) a ratio of total liabilities to Tangible Net
Worth of not more than 3.0 to 1; (d) minimum Working Capital of $4,500,000 if
the Borrower does not purchase the Maryland Dairy; (e) minimum Working Capital
of $6,500,000 if the Borrower does purchase the Maryland Dairy.
7.7 PENSION PLANS. Borrower shall: (a) keep in full force and effect any
-------------
and all Pension Plans which are presently in existence or may, from time to
time, come into existence under ERISA, unless such Pension Plans can be
terminated without material liability to Borrower in connection with such
termination (as distinguished from any continuing funding obligation); (b) make
contributions to all of Borrower's Pension Plans in a timely manner and in an
amount sufficient to comply with the requirements of ERISA; (c) comply with all
requirements of ERISA which relate to such Pension Plans; (d) notify FBS Ag
Credit immediately upon
-28-
receipt by Borrower of any notice of the institution of any proceeding or other
action which may result in the termination of any Pension Plans; and (e) acquire
and maintain, when available, the contingent employer liability coverage
insurance provided for under Section 4023 of ERISA, such insurance to be
satisfactory to FBS Ag Credit in coverage and amount.
7.8 NOTICE OF SUIT, ADVERSE CHANGE IN BUSINESS OR DEFAULT. Borrower
-----------------------------------------------------
shall, as soon as possible, and in any event within ten (10) days after Borrower
learns of the following, give written notice to FBS Ag Credit of: (a) any
proceeding being instituted or threatened to be instituted by or against
Borrower in any federal, state, local or foreign court or before any commission
or other regulatory body (federal, state, local or foreign) for which claimed
damages exceed $50,000; (b) any material adverse change in the business, assets
or condition, financial or otherwise, of Borrower; and (c) the occurrence of any
Default.
7.9 USE OF PROCEEDS. Borrower shall use Advances only for the purposes
---------------
stated in Section 2.4 and for no other purpose.
-----------
8 NEGATIVE COVENANTS.
------------------
Borrower covenants and agrees that so long as any Liabilities remain
outstanding, and (even if there shall be no Liabilities outstanding) so long as
FBS Ag Credit remains committed to make loans under this Agreement (unless FBS
Ag Credit shall give FBS Ag Credit's prior written consent):
8.1 ENCUMBRANCES. Except for those liens, security interests and
------------
encumbrances presently in existence and reflected in Borrower's financial
statements referred to in Section 6.14 and permitted under Section 6.4, Borrower
------------
shall not create, incur, assume or suffer to exist any security interest,
mortgage, pledge, lien, levy, assessment, attachment, seizure, writ, distress
warrant, or other encumbrance of any nature whatsoever on or with regard to any
Collateral other than: (a) liens securing the payment of taxes, either not yet
due or the validity of which is being contested in good faith by appropriate
proceedings, and as to which Borrower shall, if appropriate under generally
accepted accounting principles, have set aside on Borrower's books and records
adequate reserves; (b) liens securing deposits under workmen's compensation,
unemployment insurance, social security and other similar laws, or securing the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or securing indemnity, performance or other similar
bonds for the performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, or securing statutory obligations or
surety or appeal bonds, or securing indemnity, performance or other similar
bonds in the ordinary course of Borrower's business; (c) liens and security
interests in favor of FBS Ag Credit; (d) liens securing the interests of Broker
in any
-29-
Margin Account; (e) zoning restrictions, easements, licenses, covenants and
other restrictions affecting the use of Borrower's real property, and other
liens, security interests and encumbrances on property which are subordinate to
the liens and security interests of FBS Ag Credit and which do not, in FBS Ag
Credit's sole determination: (i) materially impair the use of such property, or
(ii) materially lessen the value of such property for the purposes for which the
same is held by Borrower; and (f) purchase money security interests securing
amounts relating to such items of Equipment as are specifically consented to by
FBS Ag Credit.
8.2 CONSOLIDATIONS, MERGERS OR ACQUISITIONS. Borrower shall not
---------------------------------------
recapitalize or consolidate with, merge with, or otherwise acquire all or
substantially all of the assets or properties of any other Person.
8.3 DEPOSITS, INVESTMENTS, ADVANCES OR LOANS. Borrower shall not make or
----------------------------------------
permit to exist deposits, investments, advances or loans (other than loans
existing on the date of the execution of this Agreement and disclosed to FBS Ag
Credit in writing on or prior to such date) in or to Affiliates or any other
Person, except: (a) investments in short term direct obligations of the United
States Government; (b) investments in negotiable certificates of deposit issued
by a bank satisfactory to FBS Ag Credit in FBS Ag Credit's reasonable
determination, made payable to the order of Borrower or to bearer; (c) loans to
officers, directors, employees, or Affiliates as and when permitted by Section
-------
8.9; (d) demand deposits not to exceed $100,000 in the aggregate. Borrower
---
shall not invest more than $1,500,000 per year in growing crops.
8.4 INDEBTEDNESS. Except for those obligations and that indebtedness
------------
presently in existence and reflected in Borrower's financial statements referred
to in Section 6.14 or referred to in Section 6.7, Borrower shall not incur,
------------ -----------
create, assume, become or be liable in any manner with respect to, or permit to
exist, any obligations or indebtedness, direct or indirect fixed or contingent,
in excess of $250,000 per year, except: (a) the Liabilities; (b) obligations
secured by liens or security interests permitted under Section 8.1 or contingent
-----------
obligations permitted under Section 8.5; or lease obligations permitted under
-----------
Section 8.14; (c) trade obligations, Producer Payables and normal accruals in
------------
the ordinary course of Borrower's business not yet due and payable, or with
respect to which Borrower is contesting in good faith the amount or validity
thereof by appropriate proceedings, and then only to the extent that Borrower
has set aside on Borrower's books adequate reserves therefor, if appropriate
under generally accepted accounting principles. Borrower shall not permit to
exist any other depository account for the receipt of prepayments of any type
whatsoever, except the account referred to in Section 5.6, or Borrower's general
-----------
operating account if no account for the receipt of proceeds is referred to in
Section 5.6; and (d) indebtedness not to exceed $2,000,000 to finance the
purchase of
-30-
the Maryland Dairy (provided that the Maryland Dairy purchase does not cause any
other covenant violations).
8.5 GUARANTEES AND OTHER CONTINGENT OBLIGATIONS. Borrower shall not
-------------------------------------------
guarantee, endorse or otherwise in any way become or be responsible for
obligations of any other Person, whether by agreement to purchase the
indebtedness of such Person or through the purchase of goods, supplies or
services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of stock purchase, capital contribution, advance or loan
for the purpose of paying or discharging any indebtedness or obligation of such
Person or otherwise, except: (a) for endorsements of negotiable instruments for
collection in the ordinary course of business; and (b) that Borrower may
indemnify Borrower's officers, directors, and employees to the extent permitted
under the laws of the State in which Borrower is organized and may indemnify (in
the customary manner) underwriters and any selling shareholders in connection
with any public offering of Borrower's securities.
8.6 DISPOSITION OF PROPERTY. Except as set forth on Exhibit 8A and as
----------------------- ----------
permitted by Section 5.14, Borrower shall not sell, lease, transfer or otherwise
------------
dispose of any of Borrower's properties, assets or rights.
8.7 CAPITAL INVESTMENT LIMITATIONS. Borrower shall not purchase, invest
------------------------------
in or otherwise acquire real estate, equipment or other fixed assets a) in
fiscal year ending 1997 in an amount in excess of $4,000,000 limited to not more
than $3,500,000 for Maryland dairy acquisition and improvements, not more than
$800,000 for other equipment purchases or leases, and if a new Maryland dairy is
not acquired, combined capital expenditures and leases would not be allowed to
exceed $500,000; b) in any fiscal year thereafter, in an amount in excess of the
lesser of $500,000 or an amount that would result in Borrower's Fixed Charge
Coverage Ratio being less than 1.0 to 1 in such fiscal year. For the purpose of
calculating net annual capital expenditures and capital leases, the
determination would be calculated as: 1) the fiscal year-end net property, plant
and equipment (excluding livestock), minus 2) the beginning of the fiscal year
net property, plant and equipment, plus 3) annual depreciation (excluding
livestock).
8.8 COMPENSATION OF OFFICERS AND DIRECTORS Borrower shall not pay
--------------------------------------
Borrower's officers and directors compensation (including without limitation,
salary, bonus, management fees and incentive compensation of any type other than
stock options) in an amount in excess of $1,000,000 in the aggregate in any of
Borrower's fiscal years.
8.9 LOANS TO AFFILIATES. Except for advances for travel and expenses to
-------------------
Borrower's officers, directors or employees in the ordinary course of Borrower's
-31-
business, Borrower shall not make any loans to any Affiliates or shareholders of
Borrower.
8.10 DISTRIBUTIONS IN RESPECT OF EQUITY, PREPAYMENT OF DEBT. Borrower
------------------------------------------------------
shall not directly or indirectly: (a) redeem any of Borrower's shares of
capital stock; (b) declare any dividends in any year on any class of Borrower's
capital stock; or (c) prepay any principal, interest or other payments on or in
connection with any indebtedness of Borrower other than the Liabilities.
8.11 PREPAYMENT OF DEBT. Borrower shall not directly or indirectly prepay
------------------
any principal, interest or other payments on or in connection with any
indebtedness of Borrower other than the Liabilities.
8.12 ISSUANCE OF STOCK. Borrower shall not issue or distribute any of
-----------------
Borrower's capital stock or other classes of stock for consideration or
otherwise, that, on a cumulative basis, will result in any additional Person
becoming an Affiliate.
8.13 AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Borrower shall not amend
-------------------------------------
Borrower's articles or certificate of incorporation, bylaws or any other
agreement, instrument or document affecting Borrower's organization, management
or governance.
8.14 LEASE LIMITATIONS. Borrower's payment obligations under all
-----------------
operating leases and similar agreements shall not exceed $200,000 in the
aggregate for any fiscal year of Borrower, without prior approval by FBS Ag
Credit.
8.15 USE OF NAMES. Borrower shall not use any names other than those
------------
referred to in Section 6.8, nor shall Borrower change any of said names.
9 DEFAULT AND RIGHTS AND REMEDIES.
-------------------------------
9.1 LIABILITIES. Upon a Matured Default, any or all of the Liabilities
-----------
may, at the option of FBS Ag Credit, and without demand or notice of any kind,
be declared, and thereupon shall become, immediately due and payable, and FBS Ag
Credit shall cease to be committed to make Advances under this Agreement.
Without detracting from the previous sentence, without detracting from any other
rights powers or remedies of FBS Ag Credit under this Agreement and without
creating any defense or excuse with regard to the obligations of Borrower
hereunder, FBS Ag Credit agrees that it will use its best efforts to notify
Borrower of the occurrence or existence of a Matured Default.
9.2 RIGHTS AND REMEDIES GENERALLY. Upon a Matured Default, FBS Ag Credit
-----------------------------
shall have, in addition to any other rights and remedies contained in this
-32-
Agreement or in any of the other Financing Agreements, all of the rights
and remedies of a secured party under the Code or other applicable laws, all of
which rights and remedies shall be cumulative and nonexclusive, to the extent
permitted bylaw. In addition to all such rights and remedies, the sale, lease
or other disposition of all or any part of the Collateral by FBS Ag Credit after
a Matured Default, may be for cash, credit or both, and FBS Ag Credit may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may setoff
the amount of such purchase price against the Liabilities then owing. Any sales
of the Collateral may involve the sale of portions of the Collateral at
different times, and at different locations, and may, at FBS Ag Credit's option,
be held at a site or sites different from the site at which all or any part of
the Collateral is located. Any such sales, at FBS Ag Credit's option, may be in
conjunction with or separate from the foreclosure of any mortgage on any
Collateral consisting of real property, and may be adjourned from time to time
with or without notice. FBS Ag Credit may, in its sole discretion, cause the
Collateral to remain on Borrower's premises, at Borrower's expense, pending sale
or other disposition of the Collateral. FBS Ag Credit shall have the right to
conduct such sales on Borrower's premises, at Borrower's expense, or elsewhere,
on such occasion or occasions as FBS Ag Credit may see fit.
9.3 ENTRY UPON PREMISES. Upon a Matured Default, FBS Ag Credit shall have
-------------------
the right to enter upon the premises of Borrower at which any of the Collateral
is located (or is believed to be located) without incurring any obligation to
pay rent to Borrower, or any other place or places where the Collateral is
located (or is believed to be located) and kept, and remove the Collateral
therefrom to the premises of FBS Ag Credit or any agent of FBS Ag Credit, for
such time as FBS Ag Credit may desire, in order to effectively collect or
liquidate the Collateral, or FBS Ag Credit may require Borrower to assemble the
Collateral and make it available to FBS Ag Credit at a place or places to be
designated by FBS Ag Credit which is reasonably convenient to both parties.
Borrower expressly agrees that FBS Ag Credit may, if necessary to gain occupancy
to the premises at which Collateral is located (or is believed to be located),
without further notice to Borrower: (a) hire Borrower's employees to assist in
the loading and transportation of such Collateral; (b) utilize Borrower's
equipment for use in such operation; (c) cut or otherwise temporarily move or
remove any barbed wire or other fencing or similar boundary-maintenance devices;
and (d) pick or otherwise render inoperative any locks on any property not
customarily inhabited by people. Borrower agrees that any such actions
authorized by this Section shall be deemed to have been authorized and not a
breach of the peace if FBS Ag Credit takes reasonable efforts to safeguard all
of Borrower's property.
9.4 SALE OR OTHER DISPOSITION OF COLLATERAL BY FBS AG CREDIT. Any notice
--------------------------------------------------------
required to be given by FBS Ag Credit of a sale, lease or other disposition or
other
-33-
intended action by FBS Ag Credit with respect to any of the Collateral which is
deposited in the United States mail, postage prepaid and duly addressed to
Borrower at the address specified in Section 10.19, at least ten (10)
-------------
business days prior to such proposed action, shall constitute fair and
commercially reasonable notice to Borrower of any such action. The net proceeds
realized by FBS Ag Credit upon any such sale or other disposition, after
deduction for the expense of retaking, holding, preparing for sale, selling or
the like, and the reasonable legal fees and expenses and other proper fees and
expenses incurred by FBS Ag Credit in connection therewith, shall be applied
toward satisfaction of the Liabilities. FBS Ag Credit shall account Borrower
for any surplus realized upon such sale or other disposition, and Borrower shall
remain liable for any deficiency. The commencement of any action, legal or
equitable, or the rendering of any judgment or decree for any deficiency, shall
not affect FBS Ag Credit's security interest in the Collateral until the
Liabilities shall have been paid in full.
9.5 WAIVER OF DEMAND. Demand, presentment, protest and notice of
----------------
nonpayment are waived by Borrower. Borrower also waives the benefit of all
valuation, appraisal and exemption laws.
9.6 WAIVER OF NOTICE. Upon a Matured Default, Borrower waives, to the
----------------
fullest extent permitted by applicable law, all rights to notice and hearing of
any kind prior to the exercise by FBS Ag Credit of FBS Ag Credit's rights to
repossess the Collateral without judicial process or to replevy, attach or levy
upon the Collateral.
10 MISCELLANEOUS.
-------------
10.1 TIMING OF PAYMENTS. For purposes of determining the outstanding
------------------
balance of the Liabilities, including without limitation, the computations of
interest which may from time to time be owing to FBS Ag Credit, the receipt by
FBS Ag Credit of any check or any other item of payment whether through a
blocked account or lockbox described in Section 5.6 or otherwise, shall not be
-----------
treated as a payment on account of the Liabilities until such check or other
item of payment is actually received by FBS Ag Credit at its office in Denver,
Colorado and is paid to FBS Ag Credit in cash or a cash equivalent.
10.2 ATTORNEYS' FEES AND COSTS. If at any time FBS Ag Credit employs
-------------------------
counsel in connection with protecting or perfecting FBS Ag Credit's security
interest in the Collateral or in connection with any matters contemplated by or
arising out of this Agreement, whether: (a) to commence, defend, or intervene in
any litigation or to file a petition, complaint, answer, motion or other
pleading; (b) to take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise); (c) to consult with officers of FBS Ag
Credit to advise FBS Ag Credit or to draft documents for FBS Ag Credit in
connection with any of the foregoing or in connection with any
-34-
release of FBS Ag Credit's claims or security interests or any proposed
extension, amendment or refinancing of the Liabilities; (d) to protect, collect,
lease, sell, take possession of, or liquidate any of the Collateral; or (e) to
attempt to enforce or to enforce any security interest in any of the Collateral,
or to enforce any rights of FBS Ag Credit to collect any of the Liabilities;
then in any of such events, all of the reasonable attorneys' fees arising from
such services, and any related expenses, costs and charges, including without
limitation, all fees of all paralegals, legal assistants and other staff
employed by such attorneys whether outside FBS Ag Credit or in FBS Ag Credit's
legal department, together with interest at the Default Rate provided for in
Section 2.2 if a Matured Default has occurred, or at the highest interest rate
-----------
set forth in any promissory note referred to herein, shall constitute additional
Liabilities, payable on demand and secured by the Collateral.
10.3 EXPENDITURES BY FBS AG CREDIT. In the event that Borrower shall fail
-----------------------------
to pay taxes, insurance, assessments, costs or expenses which Borrower is, under
any of the terms hereof or of any of the other Financing Agreements, required to
pay, or fails to keep the Collateral free from other security interests, liens
or encumbrances, except as permitted herein, FBS Ag Credit may, in FBS Ag
Credit's sole discretion and without obligation to do so, make expenditures for
any or all of such purposes, and the amount so expended, together with interest
at the Default Rate provided for in Section 2.2, shall constitute additional
-----------
Liabilities, payable on demand and secured by the Collateral.
10.4 FBS AG CREDIT'S COSTS AND EXPENSES AS ADDITIONAL LIABILITIES.
------------------------------------------------------------
Borrower shall reimburse FBS Ag Credit for all expenses and fees paid or
incurred in connection with the documentation, negotiation and closing of the
loans and other financial accommodations described in this Agreement (including
without limitation, filing and recording fees, and the fees and expenses of FBS
Ag Credit's attorneys, paralegals, and legal assistants, whether outside FBS Ag
Credit or in FBS Ag Credit's legal department, and whether such expenses and
fees are incurred prior to or after the closing date). Borrower further agrees
to reimburse FBS Ag Credit for all expenses and fees paid or incurred in
connection with the documentation of any renewal or extension of the loans, any
additional financial accommodations, or any other amendments to this Agreement.
All costs and expenses incurred by FBS Ag Credit with respect to such
negotiation and documentation together with interest at the highest interest
rate set forth in any promissory note referred to herein, shall constitute
additional Liabilities, payable on demand and secured by the Collateral.
10.5 CLAIMS AND TAXES. Borrower agrees to indemnify and hold FBS Ag
----------------
Credit harmless from and against any and all claims, demands, liabilities,
losses, damages, penalties, costs, and expenses (including without limitation,
reasonable attorneys' fees) relating to or in any way arising out of the
possession, use, operation or control of any of Borrower's assets. Borrower
shall pay or cause to be paid all
-35-
license fees, bonding premiums and related taxes and charges, and shall pay
or cause to be paid all of Borrower's real and personal property taxes,
assessments and charges and all of Borrower's franchise, income, unemployment,
use, excise, old age benefit, withholding, sales and other taxes and other
governmental charges assessed against Borrower, or payable by Borrower, at such
times and in such manner as to prevent any penalty from accruing or any lien or
charge from attaching to Borrower's property, provided, however, that Borrower
-------- -------
shall have the right to contest in good faith, by an appropriate proceeding
promptly initiated and diligently conducted, the validity, amount or imposition
of any such tax, and upon such good faith contest to delay or refuse payment
thereof, if: (a) Borrower establishes adequate reserves to cover such contested
taxes; and (b) such contest does not have a material adverse effect on the
financial condition of Borrower, the ability of Borrower to pay any of the
Liabilities, or the priority or value of FBS Ag Credit's security interests in
the Collateral.
10.6 CUSTODY AND PRESERVATION OF COLLATERAL. FBS Ag Credit shall be
--------------------------------------
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral in FBS Ag Credit's possession if FBS Ag Credit takes such
action for that purpose as Borrower shall request in writing, but failure by FBS
Ag Credit to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure by FBS Ag Credit to preserve
or protect any right with respect to such Collateral against prior parties, or
to do any act with respect to the preservation of such Collateral not so
requested by Borrower, shall of itself be deemed a failure to exercise
reasonable care in the custody or preservation of such Collateral.
10.7 INSPECTION. FBS Ag Credit (by and through its officers and
----------
employees), or any Person designated by FBS Ag Credit in writing, shall have the
right from time to time, to call at Borrower's place or places of business (or
any other place where Collateral or any information as to Collateral is kept or
located) during reasonable business hours, and, without hindrance or delay, to:
(a) inspect, audit, check and make copies of and extracts from Borrower's books,
records, journals, orders, receipts and any correspondence and other data
relating to Borrower's business or to any transactions between the parties to
this Agreement; (b) make such verification concerning the Collateral as FBS Ag
Credit may consider reasonable under the circumstances; and (c) review operating
procedures, review maintenance of property and discuss the affairs, finances and
business of Borrower with Borrower's officers, employees or directors. Borrower
agrees to pay to FBS Ag Credit an annual fee of Thirty Five Thousand Dollars
($35,000) on the date of this Agreement, and on each Anniversary Date as long as
Line of Credit Advances are outstanding hereunder, for all expenses incurred by
or on behalf of FBS Ag Credit in making inspections under this Section,
including without limitation, travel and photocopying expenses, which fee shall
be fully earned on the date it becomes payable and which fee shall be paid by an
FBS Ag Credit initiated Advance pursuant to Section 2.1, without prior
-----------
-36-
demand by FBS Ag Credit. FBS Ag Credit acknowledges receipt of $12,500 prior to
the date hereof leaving a balance leaving a balance of $12,500 to be paid as of
the date hereof.
10.8 EXAMINATION OF BANKING RECORDS. Borrower consents to the examination
------------------------------
by FBS Ag Credit, FBS Ag Credit's officers, employees and agents, or any of
them, whether or not there shall have occurred a Default or a Matured Default,
of any and all of Borrower's not privileged banking records, wherever they may
be found, and directs any Person which may be in control or possession of such
records (including without limitation, any bank, other financial institution,
accountant or lawyer) to provide such records to FBS Ag Credit and FBS Ag
Credit's officers, employees and agents, upon their request. Such examination
may be conducted by FBS Ag Credit with or without notice to Borrower at the
option of FBS Ag Credit, any such notice being waived by Borrower.
10.9 GOVERNMENTAL REPORTS. Borrower authorizes all duly constituted
--------------------
federal, state and municipal authorities to furnish to FBS Ag Credit copies of
their reports of examinations or inspections of Borrower.
10.10 RELIANCE BY FBS AG CREDIT. All covenants, agreements,
-------------------------
representations and warranties made by Borrower shall, notwithstanding any
investigation by FBS Ag Credit, be deemed to be material to and to have been
relied upon by FBS Ag Credit.
10.11 PARTIES. Whenever in this Agreement there is reference made to any
-------
of the parties, such reference shall be deemed to include, wherever applicable,
a reference to the respective successors and assigns of Borrower and FBS Ag
Credit.
10.12 APPLICABLE LAW; SEVERABILITY. This Agreement shall be construed in
----------------------------
all respects in accordance with, and governed by, the laws and decisions of the
State of Colorado. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Agreement.
10.13 SUBMISSION TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY.
------------------------------------------------------------
BORROWER CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED WITHIN THE CITY AND COUNTY OF DENVER, COLORADO AND WAIVES ANY OBJECTION
WHICH BORROWER MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
--------------------
CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVES
-37-
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO BORROWER AT THE
ADDRESS SET FORTH IN SECTION 10.19. SERVICE SO MADE SHALL BE DEEMED TO BE
-------------
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO BORROWER'S ADDRESS BY BORROWER'S AGENT AS SET FORTH
BELOW. BORROWER IRREVOCABLY APPOINTS XXXXXXX X. XXXXXX OR SUCH OTHER ATTORNEY AT
THE LAW FIRM OF XXXXXX & WHITNEY LLP AS SHE MAY DESIGNATE AS BORROWER'S AGENT
FOR THE PURPOSE OF ACCEPTING THE SERVICE OF ANY PROCESS WITHIN THE STATE OF
COLORADO, AND SUCH AGENT AGREES TO FORWARD PROMPTLY BY MAIL DIRECTED TO BORROWER
AT THE ADDRESS SET FORTH IN SECTION 10.19, ANY PROCESS SERVED UPON SUCH AGENT.
-------------
AT THE OPTION OF FBS AG CREDIT, BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW,
TRIAL BY JURY, AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF FBS AG CREDIT.
10.14 APPLICATION OF PAYMENTS WAIVER. Notwithstanding any contrary
------------------------------
provision contained in this Agreement or in any of the other Financing
Agreements, Borrower irrevocably waives the right to direct the application of
any and all payments at any time received by FBS Ag Credit from Borrower or with
respect to any of the Collateral, and Borrower irrevocably agrees that FBS Ag
Credit shall have the continuing exclusive right to apply and reapply any and
all payments received at any time, whether with respect to the Collateral or
otherwise, against the Liabilities, in such manner as FBS Ag Credit may deem
advisable, notwithstanding any entry by FBS Ag Credit upon any of FBS Ag
Credit's books and records.
10.15 MARSHALLING; PAYMENTS SET ASIDE. FBS Ag Credit shall be under no
-------------------------------
obligation to marshal any assets in favor of Borrower or against or in payment
of any or all of the Liabilities. To the extent that Borrower makes a payment
or payments to FBS Ag Credit or FBS Ag Credit receives any payment or proceeds
of the Collateral for Borrower's benefit or enforces FBS Ag Credit's security
interests or exercises FBS Ag Credit's rights of setoff, and such payment or
payments or the proceeds of such Collateral, enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.
-38-
10.16 SECTION TITLES. The section titles contained in this Agreement
--------------
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties .
10.17 CONTINUING EFFECT. This Agreement, FBS Ag Credit's security
-----------------
interests in the Collateral, and all of the other Financing Agreements shall
continue in full force and effect so long as any Liabilities shall be owed to
FBS Ag Credit and (even if there shall be no Liabilities outstanding) so long as
FBS Ag Credit remains committed to make Advances under this Agreement.
10.18 NO WAIVER. FBS Ag Credit's failure at any time to require strict
---------
performance by Borrower of any provision of this Agreement shall not waive,
affect or diminish any right of FBS Ag Credit thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by FBS Ag Credit
of any Default or Matured Default under this Agreement or any of the other
Financing Agreements, shall not suspend, waive or affect any other Default or
Matured Default under this Agreement or any of the other Financing Agreements,
whether the same is prior or subsequent and whether of the same or of a
different kind or character. None of the undertakings, agreements, warranties,
covenants and representations of Borrower contained in this Agreement or any of
the other Financing Agreements and no Default or Matured Default under this
Agreement or any of the other Financing Agreements, shall be deemed to have been
suspended or waived by FBS Ag Credit unless such suspension or waiver is in
writing signed by an officer of FBS Ag Credit, and directed to Borrower
specifying such suspension or waiver.
10.19 NOTICES. Except as otherwise expressly provided herein, any notice
-------
required or desired to be served, given or delivered pursuant to this Agreement
shall be in writing, and shall be sent by manual delivery, telegram, telex,
facsimile transmission, overnight courier or United States mail (postage
prepaid) addressed to the party to be notified as follows:
(a) If to FBS Ag Credit at:
FBS Ag Credit, Inc.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
-39-
with a copy to:
Xxxxxxx X. Killin
Dorsey & Whitney LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
(b) If to Borrower at:
Horizon Organic Holding Corporation
0000 Xxxxxxxxx Xx, #000
Xxxxxxx, Xxxxxxxx 00000
Horizon Organic Dairy, Inc
0000 Xxxxxxxxx Xx, #000
Xxxxxxx, Xxxxxxxx 00000
Horizon Organic Dairy, Idaho Farms, Inc
0000 Xxxxxxxxx Xx, #000
Xxxxxxx, Xxxxxxxx 00000
Horizon Organic Dairy, Maryland Farms, Inc
0000 Xxxxxxxxx Xx, #000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxx Xxxxxxxx
Krendl Xxxxxxxx & Xxxxxx
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
or, as to each party, addressed to such other address as shall be designated by
such party in a written notice to the other parties. All such notices shall be
deemed given on the date of delivery if manually delivered, on the date of
sending if sent by telegram, telex or facsimile transmission, on the first
business day after the date of sending if sent by overnight courier, or three
(3) days after the date of mailing if mailed.
10.20 MAXIMUM INTEREST. No agreements, conditions, provisions or
----------------
stipulations contained in this Agreement or in any of the other Financing
Agreements, or any Default or Matured Default, or any exercise by FBS Ag Credit
of the right to accelerate the payment of the maturity of principal and
interest, or to
-40-
exercise any option whatsoever, contained in this Agreement or any of the
other Financing Agreements, or the arising of any contingency whatsoever, shall
entitle FBS Ag Credit to collect, in any event, interest exceeding the maximum
authorized by law, and in no event shall Borrower be obligated to pay interest
exceeding such rate, and all agreements, conditions or stipulations, if any,
which may in any event or contingency whatsoever operate to bind, obligate or
compel Borrower to pay a rate of interest exceeding the maximum allowed by law,
shall be without binding force or effect, at law or in equity, to the extent
only of the excess of interest over such maximum interest allowed by law. In
the event any interest is charged in excess of the maximum allowed by law
("EXCESS"), Borrower acknowledges and stipulates that any such charge shall be
the result of an accidental and bona fide error, and such Excess shall be,
first, applied to reduce the principal of any Liabilities due, and, second,
returned to Borrower, it being the intention of the parties not to enter at any
time into a usurious or otherwise illegal relationship. Borrower and FBS Ag
Credit both recognize that, with fluctuations in the Reference Rate, such an
unintentional result could inadvertently occur. By the execution of this
Agreement, Borrower covenants that: (a) the credit or return of any Excess shall
constitute the acceptance by Borrower of such Excess; and (b) Borrower shall not
seek or pursue any other remedy, legal or equitable, against FBS Ag Credit
based, in whole or in part, upon the charging or receiving of any interest in
excess of the maximum authorized by law. For the purpose of determining whether
or not any Excess has been contracted for, charged or received by FBS Ag Credit,
all interest at any time contracted for, charged or received by FBS Ag Credit in
connection with the Liabilities shall be amortized, prorated, allocated and
spread in equal parts during the entire term of this Agreement.
10.21 ADDITIONAL ADVANCES. All fees, charges, expenses, costs,
-------------------
expenditures, obligations, liabilities, losses, penalties and damages incurred
or suffered by FBS Ag Credit and for which Borrower is bound to indemnify or
reimburse FBS Ag Credit under this Agreement (other than those which may be paid
without demand therefor, by FBS Ag Credit initiated Advances pursuant to Section
-------
2.1) may, at the option of FBS Ag Credit, be paid by FBS Ag Credit initiated
---
Advances pursuant to Section 2.1 if such amounts remain unpaid for a period of
-----------
ten (10) days after FBS Ag Credit has made demand therefor.
-41-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
HORIZON ORGANIC HOLDING CORPORATION
By /s/ Xxx Xxxxxxx By /s/ Barnet X. Xxxxxxxx
---------------------------- ----------------------------
Its Chief Financial Officer Its President
------------------------- -------------------------
(SEAL)
HORIZON ORGANIC DAIRY, INC.
By /s/ Xxx Xxxxxxx By /s/ Barnet X. Xxxxxxxx
---------------------------- ----------------------------
Its Chief Financial Officer Its President
------------------------- -------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
By /s/ Xxx Xxxxxxx By /s/ Barnet X. Xxxxxxxx
---------------------------- ----------------------------
Its Chief Financial Officer Its President
------------------------- -------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
IDAHO FARM, INC.
By /s/ Xxx Xxxxxxx By /s/ Barnet X. Xxxxxxxx
---------------------------- ----------------------------
Its Chief Financial Officer Its President
------------------------- -------------------------
(SEAL)
FBS AG CREDIT, INC.
By /s/ Xxxxxxx Xxxxxxx
----------------------------
Its Vice President
-------------------------
-42-
EXHIBIT 1A TO
LOAN AND SECURITY AGREEMENT
BORROWING BASE COMPUTATION
--------------------------
The Borrowing Base shall be determined by calculating the sum of:
80% of the result of the following: Eligible Accounts, as defined in Section
-------
3.1, minus reserves for discounts and spoilage and credit memos;
---
75%, but not to exceed $1,800,000, of the result of the following: Eligible
Inventory, as defined in Section 3.2, of Horizon Idaho or Horizon Maryland
-----------
consisting of dairy feed, valued at the lower of cost or nonorganic market
value, less 100% of Producer Payables related thereto;
70% of the result of the following: Eligible Inventory, as defined in Section
-------
3.2, of Horizon Idaho or Horizon Maryland consisting of dairy cow inventory,
---
valued at the lower of a) nonorganic market value or b) $1,200 per head so long
as i) there is a 20,000 lb. rolling herd average, ii.) the cows weigh at least
1,000 lbs. and are lactating, and iii) the cows are not more than five years
old, less 100% of Producer Payables related thereto;
70% of the result of the following: Eligible Inventory, as defined in Section
-------
3.2, of Horizon Idaho or Horizon Maryland consisting of dairy springers, valued
---
at the lower of a) nonorganic market value or b) $1,000 per head, less 100% of
Producer Payables related thereto;
70% of the result of the following: Eligible Inventory, as defined in Section
-------
3.2, of Horizon Idaho or Horizon Maryland consisting of dairy calves, yearlings
---
and bulls, valued at beef market value determined by weight times the basis
adjusted cattle fax quote for similar sex and age of dairy livestock, less 100%
of Producer Payables related thereto;
50%, but not to exceed $750,000, of the result of the following: Eligible
Inventory, as defined in Section 3.2, of Horizon Colorado, consisting of
-----------
processed milk and milk products, valued at the lower cost or market value, less
100% of Producer Payables related thereto (other than Horizon Colorado's
finished warehouse inventories and warehouse payables);
65%, but not to exceed the lower of $150 per acre or $400,000, of the result of
the following: the budgeted investment in growing crops of Horizon Idaho or
Horizon Maryland, less 100% of Producer Payables related thereto;
65%, but not to exceed $300,000, of Eligible Equipment, as defined in Section
-------
3.3, of Horizon Idaho or Horizon Maryland, valued at net liquidation value;
---
65%, but not to exceed $500,000, of Eligible Prepaid Expenses, as defined in
Section 3.4, for dairy feed of Horizon Idaho or Horizon Maryland, valued at
-----------
valued at the lower of cost or nonorganic market value;
100% of the net equity in Margin Accounts properly assigned to FBS Ag Credit;
and
100 degrees 7o of the cash balance in the lockboxes described in Section 5.6
-----------
or other accounts approved in writing by FBS Ag Credit;
LESS: 100% of the amounts of all uncleared checks related to any of the
foregoing and 100% of Horizon Colorado's finished warehouse inventories and
warehouse payables.
EXHIBIT 1B TO
LOAN AND SECURITY AGREEMENT
BORROWING BASE CERTIFICATE
--------------------------
Attached
HORIZON ORGANIC HOLDING CORPORATION
Borrowing Base Report
as of 5-31-97
================================
Collateral Borrowing
Accounts Receivable: Value Base
----------- ----------
Accounts Receivable - Dairy $ 1,684,375
Less Ineligible Accounts Receivable:
Past Due per Loan Security Agreement $ 17,936
20% Rule Violation $ 188,628
Affiliate Accounts $ 0
Officer/Employee Accounts $ 0
Contra Accounts $ 116,238
Finance Charges $ 0
Reserve for Discounts, Spoilage, Credit Memos, etc $ 0
Over 5% Concentration $ -
-----------
Net Eligible Accounts Receivable - Dairy $ 1,361,574 80% $ 1,089,259
Net Eligible Accounts Receivable - Farm (Milk) $ 60,710 85% $ 51,604
Net Eligible Accounts Receivable - Farm (Other) $ 0 80% $ 0
Farm Commodity Inventory:
Dairy Commodities (LOCM non-org; limit $1.8MM margined) $892,807.29
Less Ineligible Dairy Commodity Inventory:
Outstanding Commodity Checks $ 272,373
Commodity Payables $ 224,413
-----------
Net Eligible Dairy Commodity Inventory $ 396,021 75% $ 297,016
Prepaid Dairy Commodities (LOCM non-org; limit $500M margined) $ 11,242
Less Ineligible Prepaid Dairy Commodity Inventory:
Outstanding Prepaid Commodity Checks $ 0
Prepaid Commodity Payables $ 0
-----------
Net Eligible Prepaid Dairy Commodity Inventory $ 11,242 65% $ 7,307
Investment in Growing Crops:
Total Investment $ 466,102
Less Capitalized Cost (94,675)
-----------
Eligible Growing Crop Investment (Not>65% of cost, $150/A or $400M marg) $ 371,427 65% $ 241,427
Dairy Herd Inventory:
Dairy Cows Valued @ $1,200/hd 3,446 $1,200 $ 4,135,200
Less Ineligible Dairy Cows Inventory:
Outstanding Cattle Checks $ 0
Cattle Payables $ 573,379
-----------
Net Eligible Dairy Cows Inventory $ 3,561,821 70% $ 2,493,275
Eligible Bred Heifers, Yearlings, Bulls & Calves (beef value) $ 506,540 70% $ 354,578
Eligible Livestock at Offsite Locations (2 MM marg) $ 368,536
Less Ineligible Offsite Livestock Inventory:
Outstanding Backgrounding Checks $ 13,056
Backgrounding Payables $ 65,427
-----------
Net Eligible Livestock Inventory at Offsite Locations $ 290,053 65% $ 188,534
Processed Milk Inventory:
Processed Milk & Products Inventory (LCOM, limit $740M marg) $ 528,526
Less Ineligible Processed Milk & Products Inventory:
Prepayments $ 0
Subject to Purchased Money Security Interest $ 0
Stored at unapproved locations $ 69,500
Consigned Inventory $ 0
Supplies $ 0
-----------
Net Eligible Processed Milk & Products Inventory $ 459,026 50% $ 229,513
Cash in Positive Balance Checking Accounts $ 6,702,033 100% $ 6,702,033
Net Liquidating Value of Hedge Accounts $ 0 100% $ 0
Equipment (FBS value + Purchase - Sales) $ 388,800 65% $ 252,720
Less Reserve for Collateral Related Payables - Horizon Org Dairy $ 0 100% $ 0
=========== ===========
Total Collateral Value $14,109,247
===========
Total Borrowing Base $11,907,266
===========
Credit Line Loan Balance $ 6,038,557
===========
Loan Availability $ 5,868,709
===========
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.
HORIZON ORGANIC HOLDING CORPORATION
By:_____________________________________ Date:_____________
Xxx Xxxxxxx, Vice President of Finance
Horizon Organic Holding Corporation
HORIZON ORGANIC HOLDING CORPORATION
Analysis of Accounts Receivable Eligibility Factors
as of 5-31-97
------------------------------------------------
Customer Total A/R Over 60 Days % of Rec 20% Rule?
-------------------- --------------- ------------ -------------
Xxxxxxx Organics East $ 87,538 $ 1,624 2%
Albertson's Dist Center $ 18,702 $ 30 0%
Xxxxx Dist Center $ 37,894 $ 1,010 3%
Cornucopia-Dayville $ 72,556 $ 2,667 4%
Elm Grove Dairy $ 172,108 $ 86,000 50% $ 172,108
Farmland Dairy $ 54,166 $ 310 1%
Food For Health $ 12,411 $ 65 1%
Food Products $ 3,970 $ 7 0%
Goodness Greeness $ 55,980 $ 151 0%
Kehe Foods $ 6,053 $ 820 14%
Lucky Stores $ 45,627 $ 25 0%
Milkco, Inc. $ 11,547 $ 2,016 17%
Mountain People $ 112,605 $ 3,202 3%
Nature's Best $ 59,538 $ 396 1%
Ralph's Grocery $ 80,753 $ 2,434 3%
Xxxxx'x Good & Drug $ 5,932 $ 5,932 100% $ 5,932
Sunny Side Farms $ 64,504 $ 699 1%
Stonecrest Natural Foods $ 62,527 $ 1,705 3%
Stow Xxxxx $ 51,796 $ 15 0%
X.X. Xxxxxx $ 4,318 $ 1,301 30% $ 4,318
Texas Health Distributors $ 51,117 $ 480 1%
Tree of Life SouthEast $ 6,235 $ 222 4%
Tree of Life SouthWest $ 3,770 $ 1,431 38% $ 3,770
Tree of Life Xxxx - Xxxxxxx $ 815 $ 58 7%
Xxxxx Brothers Trucking, Inc. $ 2,500 $ 2,500 100% $ 2,500
Ineligible Due to 20% Rule ---------- ---------
Ineligible Due to 60 Days Past Due Rule: $ 188,628
All 60 Days Past Due Invoice Totals $ 115,100
Less Those Ineligible Due to 20% Rule $ ($97,164)
----------
Net Ineligible Due to 60 Days Past Due Rule $ $17,936
Total Accounts Receivable $ 1,477,811
5% Cutoff for Concentration Rule $ 73,890.57
Customer Total A/R Approved? 5% Rule
-------------------- --------------- ------------ -------------
Xxxxxxx Organics East $ 87,538 Yes $ -
Elm Grove Dairy $ 172,108 Yes $ -
Mountain People $ 112,605 Yes $ -
Ralph's Grocery $ 80,753 Yes $ -
Rainbow Dist. - Denver $ 77,973 Yes $ -
-------------
Ineligible Due to the 5% Concentration Rule $ -
Ineligibles
Already
Customer Total A/R Total A/P Excluded Offset Rule
-------------------- --------------- --------------------------------------
Clover Xxxxxxxxx $ 52,157 $ 32,590 $ $32,590
Elm Grove Dairy $ 172,108 $ 105,341 $ 172,108 $ -
Farmland Dairy $ 54,166 $ 110,727 $ 310 $ 53,856
Model Dairy $ 6,232 $ 94,181 $ 6,232
Xxxxxxxx Dairy $ 23,560 $ 30,647 $ 23,560
-----------
Ineligible Due to the Contra Account Rule $ 116,238
--------------------------------------------------------------------------------
HORIZON ORGANIC HOLDING CORPORATION
Notes to Financial Statement
--------------------------------------------------------------------------------
May 31,1997
--------------------------------------------------------------------------------
NOTE 1 - ACCOUNTS RECEIVABLE
Milk Receivable - Other $60,710
-------------
Milk Receivable - Horizon Organic Dairy, Inc. $698,518
-------------
Receivables - Cattle Sale $1,153,130
-------------
Receivables - ADC & USDC $30,110
-------------
Receivables - Other $26,636
-------------
NOTE 2 - FEED INVENTORY
-------------------------------------------------------------------------
Average Book Commercial Borrowing
Amounts Cost Total Market Base Total
-------------------------------------------------------------------------
Calf-Milk Replacer 0.68 $1,299.60 $877.23 $1,400.00 $945.00
Rape Seed 0.00 $0.00 $0.00
Canola Meal 45.00 $195.00 $8,775.00 $200.00 $9,000.00
Rolled Rye 0.00 $0.00 $0.00
Cotton Seed 695.48 $261.00 $181,520.28 $218.00 $151,614.64
Soybean Meal 0.00 $0.00 $0.00
Megalac 0.00 $0.00 $0.00
Rolled Barley 15.00 $189.78 $2,846.70 $136.00 $2,040.00
Calf Grain 12.45 $275.20 $3,426.24 $275.00 $3,423.75
Flax Meal 15.00 $260.00 $3,900.00 $260.00 $3,900.00
Unrolled Barley 2,045.10 $172.78 $353,356.41 $119.00 $243,366.90
Rolled Corn 105.00 $267.00 $28,035.00 $137.00 $14,385.00
Unrolled Corn 446.09 $218.14 $97,310.07 $120.00 $53,530.80
Hay 2,732.93 $134.89 $368,654.25 $120.00 $327,951.60
Xxx Xxxxxx 000.00 $26.80 $3,237.44 $26.80 $3,237.44
Hay-Oat 0.00 $0.00 $0.00
Milking Premix 24.44 $439.09 $10,731.29 $444.00 $10,851.36
PMS-Molasses 0.00 $0.00 $0.00
Crab Meal 20.00 $450.00 $9,000.00 $450.00 $9,000.00
Corn Silage 250.00 $34.00 $8,500.00 $20.00 $5,000.00
Wheat Silage 0.00 $0.00 $0.00
Sunflower Meal 0.00 $0.00 $0.00
Maternity Premix 2.5 $503.60 $1,259.00 $504.00 $1,260.00
Other Feed $729.60 $729.60
------------------------------------------------------------------------
Total w/o Straw $1,082,158.51 $840,236.09
------------------ ---------------
Straw 1642.85 $32.00 52,571.20 $32.00 $52,571.20
------------------ ---------------
Total $1,134,729.71 $892,807.29
------------------ ---------------
NOTE 3 - CATTLE INVENTORY
-------------
Dairy
-------------
Organic Cows 3282
-------------
Commercial Cows 164
-------------
Bulls 68
-------------
-------------
Feedlot
-------------
Steer Calves 0
-------------
Organic Replacement Heifers 1602
-------------
Replacement Heifer Calves 291
-------------
Total Head Count 5407
============
NOTE 4 - PROCESSED MILK & PRODUCTS INVENTORY
----------------
Amounts
----------------
50# bags - Dry skim powder milk $329,548
Yogurt - various units $72,989
Cheese products $75,083
Butter products $25,726
Cream cheese products $16,856
Sour cream cultured product $8,324
----------------
Total $528,526
----------------
HORIZON ORGANIC HOLDING CORPORATION
Replacement Heifer Inventory
Values per Cattle-Fax where applicable
As of: 05/31/97
----------- ------------ ----------- ------------ ------------ ---------------
Average Total
Pen Number Average Value Value Value
Number Head Weight per lb. per head per pen
----------- ------------ ----------- ------------ ------------ ---------------
A-1 20 200 1.00 200.00 4,000.00
X-0 00 000 1.00 220.00 5,280.00
X-0x
X-0x
X-0 00 000 1.00 230.00 10,810.00
A-5 48 270 0.90 243.00 11,664.00
A-6 31 320 0.86 275.20 8,531.20
X-0
X-0
X-0
X-00
X-0
X-0 50 360 0.68 244.80 12,240.00
B-3 50 420 0.68 285.60 14,280.00
B-4 49 450 0.68 306.00 14,994.00
B-5 47 500 0.68 340.00 15,980.00
B-6 44 530 0.68 360.40 15,857.60
X-0
X-0
X-0
X-0
X-0
X-0 21 # 1,225 1,000.00 21,000.00
C-5 59 @ 1,140 1,000.00 59,000.00
C-6 61 @ 1,140 1,000.00 61,000.00
X-0
X-0
X-0
X-0
X-0
X-0
Shop Pasture 78 @ 1,075 1,000.00 78,000.00
Dairy Pasture 89 @ 1,175 1,000.00 89,000.00
+L-3 600 430 0.68 292.40 175,440.00
-M-1 99 975 800.00 79,200.00
-M-2 98 925 800.00 78,400.00
-M-3 87 600 0.68 408.00 35,496.00
Hutches 291 165 1.00 165.00 48,015.00
Hutches
Bulls 66 1,125 * 0.48 540.00 35,640.00
Bulls - 2 1,300 * 0.48 624.00 1,248.00
----------- ------------ ----------- ------------ ------------ ---------------
-----------------------------------------------
Head in Feedlot and Pasture 784
-----------------------------------------------
Head in Hutches 291
-----------------------------------------------
Head at Canyon Ranch 286
-----------------------------------------------
Head at Cottonwood (L-3) 600
-----------------------------------------------
Total Head 1961
-----------------------------------------------
==============================================
@ represents bred heifers Onsite Replacement Value $506,539.80
# represents springer heifers Offsite Replacement Value $368,536.00
* represents bulls ------------
- Located at Canyon Ranch in Crawford, Colorado Total Value: $875,075.80
` Investment in Heifers Located at Cottonwood ============
Cattle Company in Hereford, Texas. These ==============================================
head counts are not included in the "Total Head" number.
+ Located at Cottonwood Cattle Company in Hereford, Texas
------------------------------------------------------------------------------------------------------
EXHIBIT 1D TO
LOAN AND SECURITY AGREEMENT
LEGAL DESCRIPTIONS OF PROPERTY UPON WHICH
-----------------------------------------
GROWING CROPS WILL BE LOCATED
-----------------------------
Attached
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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.
- Continued -
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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.
- Continued -
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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.
- Continued -
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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;
- Continued -
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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.
CONTINUATION
SCHEDULE A
Policy Number: 554-433970
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 9
South, 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
- Continued -
BUT EXCLUDING THE FOLLOWING PROPERTY
------------------------------------
Part of the SE 1/4 of Section 28 of Township 9 South, Range 21 East of the Boise
Meridian, Xxxxxx County, State of Idaho.
Beginning at the Southeast corner of Section 28 of T.9 S., R.21 E., B.M., said
corner marked by a 5/8" rebar; Thence North 00 degrees 02 minutes 00 seconds
West along the east line of Section 29 for a distance of 746.58 feet to a 1/2"
rebar which shall be the Point of Beginning;
------------------
THENCE South 78 degrees 49 minutes 25 seconds West for a distance of 885.48
feet to a 1/2" rebar;
THENCE North 00 degrees 02 minutes 00 seconds West for a distance of 885.48
feet to a 1/2" rebar;
THENCE North 78 degrees 49 minutes 25 seconds East for a distance of 885.48
feet to a 1/2" rebar on the east line of Section 28;
THENCE South 00 degrees 02 minutes 00 seconds East along said line for a
distance of 885.48 feet to the Point of Beginning.
------------------
Said property contains 17.66 acres more or less and is subject to a county
road right of way along the east side.
WARRANTY DEED - 2 Xxxxx & Xxxxx
Attorneys at Law
[address]
BUT EXCLUDING THE FOLLOWING PROPERTY
Legal Description:
Part of the SE 1/4 of Section 28, Township 9 South, Range 21 East of the Boise
Meridian, Xxxxxx County, State of Idaho.
Beginning at the Southeast corner of Section 28, Township 9 South, Range 21 East
of the Boise Meridian, said corner marked by a 5/8" rebar;
Thence North 00 degrees 02 minutes 00 seconds West along the East line of
Section 28 for a distance of 746.58 feet to a 1/2" rebar which shall be the
Point of Beginning;
Thence South 78 degrees 49 minutes 25 seconds West for a distance of 885.48 feet
to a 1/2" rebar;
Thence North 00 degrees 02 minutes 00 seconds for a distance of 885.48 feet to a
1/2" rebar;
Thence North 78 degrees 49 minutes 25 seconds East for a distance of 885.48 feet
to a 1/2" rebar on the East line of Section 28;
Thence South 00 degrees 02 minutes 00 seconds East along said line for a
distance of 885.48 feet to the Point of the Beginning.
EXHIBIT 2A TO
LOAN AND SECURITY AGREEMENT
LINE OF CREDIT NOTE
-------------------
Attached
LINE OF CREDIT NOTE
-------------------
$10,000,000 Denver, Colorado
July 15, 1997
FOR VALUE RECEIVED, the undersigned Horizon Organic Holding Corporation, a
Delaware corporation; Horizon Organic Dairy, a Colorado corporation ("Horizon
Colorado"), Horizon Organic Dairy, Maryland Farm, Inc., ("Horizon Maryland") a
Colorado corporation; Horizon Organic Dairy, Idaho Farm, Inc., ("Horizon Idaho")
a Colorado Corporation (hereinafter referred to as "Borrower" whether one or
more), promises to pay to the order of FBS Ag Credit, Inc., a Colorado
corporation (hereinafter referred to as "FBS Ag Credit") at 000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or at such other place as FBS Ag
Credit may designate, in lawful money of the United States of America, the
principal sum of Ten Million Dollars ($10,000,000) or so much thereof as may be
advanced and be outstanding, together with interest on any and all principal
amounts outstanding calculated in accordance with the provisions set forth
below. This Note is issued under that certain Loan and Security Agreement
between Borrower and FBS Ag Credit dated July 15, 1997 (as the same may be
amended, replaced, restated and/or supplemented from time to time, the "Loan
Agreement"). All terms not defined herein shall have the definition given to
them in the Loan Agreement.
As used herein, the following terms shall have the following respective
meanings (such terms to be equally applicable to both the singular and plural
forms of the terms defined):
"Advance": a Fixed Rate Advance or a Reference Rate Advance.
-------
"Applicable Margin": with respect to:
-----------------
(a) Reference Rate Advance: 1.25%
(b) Fixed Rate Advance: 3.75%
"Business Day": any day of the year in which commercial banks in
------------
Denver, Colorado are not required or authorized to close.
"Continuation or Conversion Request": A request by the Borrower to
----------------------------------
accrue and pay interest on all or some of the Advances at the Reserve Adjusted
LIBOR Rate as set forth herein.
"Eurodollar Business Day": a Business Day upon which commercial banks
-----------------------
in London, England are open for domestic and international business.
"Eurodollar Rate": With respect to each Interest Period applicable to
---------------
a Eurodollar Rate Advance, the average offered rate for deposits in United
States dollars (rounded upward, if necessary, to the nearest 1/16 of 1%) for
delivery of such deposits on the first day of such Interest Period, for the
number of days in such Interest Period, which appears on the Reuters Screen LIBO
page as of 11:00 a.m., London time (or such other time as of which such rate
appears) two Eurodollar Business Days prior to the first day of such Interest
Period, or the rate for such deposits determined by the Agent at such time based
on such other published service of general application as shall be selected by
the Agent for such purpose; provided, that in lieu of determining the rate in
the foregoing manner, the Agent may determine the rate based on rates at which
United States dollar deposits are offered to the Agent in the interbank
Eurodollar market at such time for delivery in Immediately Available Funds on
the first day of such Interest Period in an amount approximately equal to the
Advance by the Agent to which such Interest Period is to apply (rounded upward,
if necessary, to the nearest 1/16 of 1%). "Reuters Screen LIBO page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rate Screen (or
such other page as may replace the LIBO page on such service for the purpose of
displaying London interbank offered rates of major banks for United States
dollar deposits).
"Fixed Rate Advance": any portion of the funds advanced by FBS Ag
------------------
Credit to Borrower pursuant to the Loan Agreement with respect to which Borrower
has, in accordance with the terms hereof, selected to accrue and pay interest by
reference to the Reserve Adjusted LIBOR Rate plus the Applicable Margin.
"Immediately Available Funds": funds with good value on the day and
---------------------------
in the city in which payment is received.
"Initial Advance Request": The initial request for funds by Borrower
-----------------------
as set forth herein.
"Interest Period": as to any Fixed Rate Advance, the period
---------------
commencing on the date such Fixed Rate Advance is made, continued or converted
and ending one, two, three, or six months thereafter, as the Borrower has
selected in its Initial Advance Request or Continuation or Conversion Request;
provided that: (a) the last day of any Interest Period shall not end after the
Maturity Date; and (b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Eurodollar Business Day, with regard to a
Fixed Rate Advance, the last day of such Interest Period shall be extended to
occur on the next succeeding Eurodollar Business Day; provided, that if such
extension would cause the last day of such Interest Period to occur in the
following month, the last day of such Interest Period shall occur on the first
preceding Eurodollar Business Day.
-2-
"Rate Option": the Reference Rate and the Reserve Adjusted LIBOR
-----------
Rate, in each case plus the Applicable Margin.
"Reference Rate": the reference rate as quoted by First Bank National
--------------
Association, Minneapolis, Minnesota ("First Bank"), which is a base rate that
First Bank from time to time establishes and which serves as the basis upon
which effective rates of interest are calculated for those loans which make
reference thereto.
"Reference Rate Advance": any portion of the funds advanced by FBS Ag
----------------------
Credit to Borrower pursuant to the Loan Agreement with respect to which Borrower
has not selected, in accordance with the terms hereof, to accrue and pay
---
interest by reference to the Reserve Adjusted LIBOR Rate plus the Applicable
Margin.
"Regulation D": Regulation D (or any substitute regulations) of the
------------
Board of Governors of the Federal Reserve System (or any successor thereto), as
amended from time to time.
"Reserve Adjusted LIBOR Rate": with respect to each Interest Period
---------------------------
applicable to a Fixed Rate Advance, the rate per annum (rounded up to the next
whole multiple of 1/100 of 1%) equal to the rate obtained by dividing (a) the
Eurodollar Rate; by (b) a percentage equal to 100% minus the maximum reserve
rate in effect on the first day of such Interest Period at which reserves
(including any marginal, supplemental or emergency reserves) would be required
to be maintained by First Bank, National Association under Regulation D against
"Eurocurrency Liabilities" (as such term is defined in Regulation D); provided,
that Reserve Adjusted LIBOR for the applicable Interest Period shall be adjusted
automatically on and as of the effective date of any change in such maximum
reserve rate.
The outstanding Advances hereunder may be maintained, at the election of
the Borrower as provided herein, as Reference Rate Advances, Fixed Rate Advances
or a combination thereof. The Initial Advance Request and any subsequent
Continuation or Conversion Requests shall specify: (A) whether the Advance is to
be maintained as a Reference Rate Advance or a Fixed Rate Advance; (B) the
proposed date of the Advance, Continuation or Conversion which shall be a
Eurodollar Business Day; (C) the principal amount of the Advance, Continuation
or Conversion, which in the case of a Fixed Rate Advance shall be in the minimum
amount of $1,000,000 and in an integral multiple of $1,000,000; and (D) in the
case of a Fixed Rate Advance, Continuation or Conversion, the Interest Period
therefor. The Borrower shall be limited to four outstanding Fixed Rate Advances
at a time. The Initial Advance Request or any subsequent Continuation or
Conversion Requests for a Reference Rate Advance, Continuation or Conversion
shall be made not later 10:30 a.m. (mountain time) on the Business Day prior to
the proposed date
-3-
of the Advance, Continuation or Conversion. The Initial Advance Request or any
subsequent Continuation or Conversion Requests for a Fixed Rate Advance shall be
made not later 9:00 a.m. (mountain time) on the third Eurodollar Business Day
prior to the proposed date of the Advance, Continuation or Conversion.
Borrower shall have the right to make prepayments of principal, without
charge: (i) at any time if the prepayment is on an Advance outstanding as a
Reference Rate Advance; or (ii) on the last day of the Interest Period if the
prepayment is on an Advance outstanding as a Fixed Rate Advance. In the event
of a prepayment of principal on an Advance outstanding as a Fixed Rate Advance
prior to the last day of the Interest Period, whether voluntary or involuntary,
then Borrower shall pay to FBS Ag Credit, upon demand, an amount, if any, that
FBS Ag Credit determines to be approximately equal to its loss of net yield on
the Advance resulting from the early payment of its principal.
Provided that there does not exist any Event of Default under the Loan
Agreement, Borrower shall have the option of: (i) continuing all or a portion of
a Fixed Rate Advance as a Fixed Rate Advance; or (ii) converting all or a
portion of a Reference Rate Advance into a Fixed Rate Advance; further provided,
in each case, however, that Borrower shall give FBS Ag Credit prior notice in
writing' or by facsimile of its intent and desire to continue or convert an
Advance under this paragraph (a "Continuation or Conversion Request"). A
Continuation or Conversion Request shall be made in the manner and form, shall
comply with the specifications of, and shall be made at the times as set forth
above. In the event that FBS Ag Credit has not received a proper Continuation
or Conversion Request with respect to any Advance outstanding as a Fixed Rate
Advance on the last day of the Interest Period, then that Advance shall
automatically be converted to a Reference Rate Advance as of the day following
the last day of the Interest Period.
Interest accrued hereunder shall be computed by reference to the Rate
Option relative to the type of Advance selected by the Borrower in accordance
herewith on the basis of actual days elapsed and a year of 360 days. With
respect to any Reference Rate Advance, the rate of interest accruing hereunder
shall change concurrently with each change in the Reference Rate as announced by
First Bank.
The unpaid balance of this obligation at any time shall be the total
amounts advanced hereunder by FBS Ag Credit together with accrued and unpaid
interest, less the amount of payments made hereon by or for Borrower, which
balance may be endorsed hereon from time to time by FBS Ag Credit.
Interest with respect to Fixed Rate Advances shall be due and payable as
follows. For any Interest Period selected by Borrower which is thirty (30) days
long, interest accrued on this Note shall be payable on the last day of such
interest period. For any Interest Period selected by Borrower which is greater
than thirty (30) days
-4-
long, interest accrued on this Note shall be payable on the first day (1st)
day following the commencement of such Interest Period, on the same day of each
month following such thirtieth (30th) day, and on the last day of such Interest
Period. Interest with respect to Reference Rate Advances shall be payable on
the first (lst) day of each month, commencing August 1, 1997. When any interest
is due and payable under this Note, FBS Ag Credit may make an automatic Advance
of principal under the Loan Agreement, which Advance shall be a Reference Rate
Advance unless Borrower has otherwise selected, in accordance with the terms
hereof, to accrue and pay interest by reference to the Reserve Adjusted LIBOR
Rate plus the Applicable Margin.
In addition to the repayment requirements imposed upon Borrower under the
Loan Agreement, together with the agreements referred to therein, the principal
amount owing under this Note shall be payable on the Maturity Date as defined
below.
Interim payments made by Borrower either pursuant the Loan Agreement or as
a voluntary prepayment shall be applied first to any costs or fees owing by
Borrower to FBS Ag Credit, shall be applied second to any interest payments
owing hereunder which are due and unpaid, shall be applied third to any
outstanding principal owing hereunder, and shall be applied fourth to interest
accrued but not yet due.
Anything herein or in the Loan Agreement to the contrary notwithstanding,
all principal and interest remaining unpaid on June 30, 1999 ("Maturity Date"),
shall be immediately due and payable, unless such Maturity Date shall be
extended by FBS Ag Credit as set forth below.
Advances hereunder, to the total amount of principal sum stated above, may
be made by FBS Ag Credit at the oral or written request of Xxx Xxxxxxx or Barnet
X. Xxxxxxxx, who are authorized to request Advances and direct the disposition
of any such Advances until written notice of the revocation of such authority is
received by FBS Ag Credit at the address designated above. Any such Advances
shall be conclusively presumed to have been made to or for the benefit of
Borrower when FBS Ag Credit believes in good faith that such requests and
directions have been made by authorized persons, or when said Advances are
mailed to Borrower or deposited to the credit of the account of Borrower
regardless of the fact that persons other than those authorized hereunder may
have authority to draw against such account.
Notwithstanding the provisions of this Note, FBS Ag Credit shall have the
option, in its sole discretion and without any obligation to do so, to make
Advances to Borrower (or for Borrower's account where authorized to do so under
the Loan Agreement or related documents), in amounts in excess of those amounts
which
-5-
would otherwise be prescribed by this Note. Such overadvances, when made by FBS
Ag Credit shall become an obligation of Borrower and any surety of Borrower's
indebtedness to FBS Ag Credit under this Note to the same extent as any other
disbursements hereunder, and notwithstanding the fact that such overadvances may
create a principal balance owing to FBS Ag Credit in excess of the face amount
stated in this Note. FBS Ag Credit shall also have the option, in its sole
discretion and without any obligation to do so, to extend' the Maturity Date of
the indebtedness hereunder. Such extensions shall be immediately effective when
made by FBS Ag Credit and notice thereof shall be given by FBS Ag Credit as
provided for in the Loan Agreement.
Should any Event of Default occur, as provided for in the Loan Agreement,
which shall not have been cured, if a right to cure is provided for therein,
then at FBS Ag Credit's option, FBS Ag Credit may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable without
presentment, demand or notice of dishonor, all of which are expressly waived,
and FBS Ag Credit shall have no obligation to make any further Advances
hereunder.
Should more than one person or entity sign this Note, the obligations of
each signer shall be joint and several.
This Note shall be construed in accordance with the laws of the State of
Colorado.
HORIZON ORGANIC HOLDING CORPORATION
ATTEST:
By:__________________________ By:__________________________
Barnet X. Xxxxxxxx Xxx Xxxxxxx, V.P. Finance
(SEAL)
HORIZON ORGANIC DAIRY, INC.
ATTEST:
By:__________________________ By:__________________________
Barnet X. Xxxxxxxx Xxx Xxxxxxx, V.P. Finance
(SEAL)
-6-
HORIZON ORGANIC DAIRY,
IDAHO FARM, INC.
ATTEST:
By:__________________________ By:__________________________
Barnet X. Xxxxxxxx Xxx Xxxxxxx, V.P. Finance
(SEAL)
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
ATTEST:
By:__________________________ By:__________________________
Barnet X. Xxxxxxxx Xxx Xxxxxxx, V.P. Finance
(SEAL)
-7-
EXHIBIT 3A TO
LOAN AND SECURITY AGREEMENT
ACCOUNT DEBTORS NOT SUBJECT TO LIMITATIONS
------------------------------------------
EXHIBIT 3B TO
LOAN AND SECURITY AGREEMENT
BAILEE LOCATIONS
----------------
EXHIBIT 3C TO
LOAN AND SECURITY AGREEMENT
PERSONS TO WHOM ELIGIBLE PREPAID EXPENSES MAY BE PAID
-----------------------------------------------------
EXHIBIT 4A TO LOAN AND SECURITY AGREEMENT
List of Closing Documents
-------------------------
1. Loan and Security Agreement ___________________
2. Line of Credit Note ___________________
3. Secretary's Certificate as to Directors' Resolutions and Incumbency ___________________
4. Certificates of Good Standing
Colorado ___________________
Idaho ___________________
Maryland ___________________
5. Articles or Certificate of Incorporation ___________________
6. Bylaws ___________________
7. UCC Searches as follows:
HORIZON ORGANIC HOLDINGS CORP., a Delaware Corp.
California
----------
Secretary of State ___________________
Colorado
--------
Secretary of State ___________________
Boulder County ___________________
Delta County ___________________
Denver County ___________________
Idaho
-----
Secretary of State ___________________
Cassia County ___________________
Xxxxxxx County ___________________
Xxxxxx County ___________________
Illinois
--------
Secretary of State ___________________
Xxxx County ___________________
Iowa
----
Secretary of State ___________________
Xxxxxxx County ___________________
Maryland
--------
State Dept. of Assessments & Taxation ___________________
Minnesota
---------
Secretary of State ___________________
Hennepin County ___________________
Nevada
------
Secretary of State ___________________
Storey County ___________________
New Jersey
----------
Secretary of State ___________________
Bergen County ___________________
Texas
-----
Secretary of State ___________________
Deaf Xxxxx County ___________________
Wisconsin
---------
Secretary of State ___________________
Dane County ___________________
Fond du Lac County ___________________
Richland County ___________________
Sauk County ___________________
Sheboygan County ___________________
Xxxxxx County ___________________
HORIZON ORGANIC DAIRY, INC., a Colorado Corp.
California ___________________
----------
Secretary of State ___________________
Colorado
--------
Secretary of State ___________________
Boulder County ___________________
Delta County ___________________
Denver County ___________________
-2-
Idaho
-----
Secretary of State ___________________
Cassia County ___________________
Xxxxxxx County ___________________
Xxxxxx County ___________________
Illinois
--------
Secretary of State ___________________
Xxxx County ___________________
Iowa
----
Secretary of State ___________________
Xxxxxxx County ___________________
Maryland
--------
State Dept. of Assessments & Taxation ___________________
Minnesota
---------
Secretary of State ___________________
Hennepin County ___________________
Nevada
------
Secretary of State ___________________
Storey County ___________________
New Jersey
----------
Secretary of State ___________________
Bergen County ___________________
Texas
-----
Secretary of State ___________________
Deaf Xxxxx County ___________________
Wisconsin
---------
Secretary of State ___________________
Dane County ___________________
Fond du Lac County ___________________
Richland County ___________________
Sauk County ___________________
Sheboygan County ___________________
Xxxxxx County ___________________
-3-
HORIZON ORGANIC DAIRY, IDAHO FARMS, INC.,
a Colorado Corp.
California
----------
Secretary of State ___________________
Colorado
--------
Secretary of State ___________________
Boulder County ___________________
Delta County ___________________
Denver County ___________________
Idaho
-----
Secretary of State ___________________
Cassia County ___________________
Xxxxxxx County ___________________
Xxxxxx County ___________________
Illinois
--------
Secretary of State ___________________
Xxxx County ___________________
Iowa
----
Secretary of State ___________________
Xxxxxxx County ___________________
Maryland
--------
State Dept. of Assessments & Taxation ___________________
Minnesota
---------
Secretary of State ___________________
Hennepin County ___________________
Nevada
------
Secretary of State ___________________
Storey County ___________________
New Jersey
----------
Secretary of State ___________________
Bergen County ___________________
Texas
-----
Secretary of State ___________________
Deaf Xxxxx County ___________________
-4-
Wisconsin
---------
Secretary of State ___________________
Dane County ___________________
Fond du Lac County ___________________
Richland County ___________________
Sauk County ___________________
Sheboygan County ___________________
Xxxxxx County ___________________
HORIZON ORGANIC DAIRY, MARYLAND FARMS, INC.,
a Colorado Corp.
California
----------
Secretary of State ___________________
Colorado
--------
Secretary of State ___________________
Boulder County ___________________
Delta County ___________________
Denver County ___________________
Idaho
-----
Secretary of State ___________________
Cassia County ___________________
Xxxxxxx County ___________________
Xxxxxx County ___________________
Illinois
--------
Secretary of State ___________________
Xxxx County ___________________
Iowa
----
Secretary of State ___________________
Xxxxxxx County ___________________
Maryland
--------
State Dept. of Assessments & Taxation ___________________
Minnesota
---------
Secretary of State ___________________
Hennepin County ___________________
-5-
Nevada
------
Secretary of State ___________________
Storey County ___________________
New Jersey
----------
Secretary of State ___________________
Bergen County ___________________
Texas
-----
Secretary of State ___________________
Deaf Xxxxx County ___________________
Wisconsin
---------
Secretary of State ___________________
Dane County ___________________
Fond du Lac County ___________________
Richland County ___________________
Sauk County ___________________
Sheboygan County ___________________
Xxxxxx County ___________________
9. Opinion of Legal Counsel ___________________
10. Interim Financial Statements as of April 30, 1997 ___________________
11. Trademark Security Agreement ___________________
12. Bailee Letters ___________________
13. Subordination Agreements ___________________
14. Payoff Letters ___________________
-6-
EXHIBIT 5C TO
LOAN AND SECURITY AGREEMENT
OTHER SECURITY AGREEMENTS
-------------------------
Attached
TRADEMARK SECURITY AGREEMENT
----------------------------
WHEREAS, Horizon Organic Holding Corporation, a Delaware corporation;
Horizon Organic Dairy, a Colorado corporation ("Horizon Colorado"), Horizon
Organic Dairy, Maryland Farm, Inc., ("Horizon Maryland") a Colorado corporation;
Horizon Organic Dairy, Idaho Farm, Inc., ("Horizon Idaho") a Colorado
Corporation (the "Borrower") owns the Trademarks and Trademark registrations and
licenses listed on Schedule 1 attached hereto;
----------
WHEREAS, FBS Ag Credit, Inc. ("FBS Ag Credit") and Borrower have entered
into a certain Loan and Security Agreement dated as of July 1~3, 1997 (as said
Loan and Security Agreement may be amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement") pursuant to which FBS Ag
Credit shall make loans to the Borrower to provide working capital financing for
the Borrower and to provide funds for other general corporate purposes of the
Borrower; and
WHEREAS, pursuant to the Loan Agreement, the Borrower has granted to FBS Ag
Credit, a security interest in substantially all the assets of the Borrower
including all the Borrower's Trademarks (as defined in the Loan Agreement),
together with any reissues, extensions or renewals thereof, Trademark
registrations, Trademark applications and Trademark licenses, whether presently
existing or hereafter arising or acquired, together with the goodwill of the
business symbolized by the Trademarks and the applications therefor and the
registrations thereof, and all products and proceeds thereof, and to secure the
payment and performance of all amounts owing by Borrower under the Loan
Agreement and the other documents executed in connection therewith;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby grant to FBS
Ag Credit a continuing security interest in all of Borrower's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Trademark Collateral"),
whether now existing or hereafter arising or acquired:
(i) each Trademark, Trademark registration and Trademark application
including, without limitation, the Trademark and Trademark registration referred
to in Schedule 1 attached hereto, and all of the goodwill of the business
----------
connected with the use of, and symbolized by, each Trademark, Trademark
registration and Trademark application;
(ii) each Trademark license and all of the goodwill of the business
connected with the use of, and symbolized by, each Trademark licensed;
(iii) all trade names, service marks, trade dress, logos, trade secrets,
and copyrights; and
(iv) all products and proceeds of the foregoing, including without
limitation, any claim by the Borrower against third parties for past, present or
future infringement or dilution of any Trademark or Trademark registration
including, without limitation, the Trademark and Trademark registration listed
on Schedule 1 attached hereto, and any Trademark licensed under any Trademark
----------
license or for injury to the goodwill associated with any Trademark, Trademark
registration or Trademark licensed under any Trademark license.
This security interest is granted in connection with the security interests
granted to FBS Ag Credit to secure the Liabilities (as defined in the Loan
Agreement) and pursuant to the terms thereof. The Borrower hereby further
acknowledges and confirms that the rights and remedies of FBS Ag Credit with
respect to the security interest in the Trademark Collateral granted hereby are
more fully set forth in the Loan Agreement, the terms and provisions of which
are incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, Borrower has caused this Trademark Security Agreement
to be duly executed by its officer thereunto duly authorized as of July 15,
1997.
HORIZON ORGANIC HOLDING
CORPORATION
Attest: By:_______________________________
By:______________________________ Name:_____________________________
Its:_____________________________ Title:____________________________
HORIZON ORGANIC DAIRY INC.
Attest: By:_______________________________
By:______________________________ Name:_____________________________
Its:_____________________________ Title:____________________________
-2-
HORIZON ORGANIC DAIRY
IDAHO FARM, INC.
Attest: By:_______________________________
By:______________________________ Name:_____________________________
Its:_____________________________ Title:____________________________
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
Attest: By:_______________________________
By:______________________________ Name:_____________________________
Its:_____________________________ Title:____________________________
FBS AG CREDIT, INC.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
By:_______________________________
Its:______________________________
-3-
SCHEDULE 1 TO TRADEMARK SECURITY AGREEMENT
------------------------------------------
Ser. No./ Filed/
---------------- ------------
Xxxx Reg. No. Reg'd Goods/Services
------------------- ---------------- ------------ ---------------------------
SEE ATTACHED
------------
-4-
[SEAL OF THE UNITED STATES OF AMERICA]
CERTIFICATE OF REGISTRATION
This is to certify that the records of the Patent and Trademark Office show
that an application was filed in said Office for registration of the Xxxx shown
herein, a copy of said Xxxx and pertinent data from the Application being
annexed hereto and made a part hereof.
And there having been due compliance with the requirements of the law and
with the regulations prescribed by the Commissioner of Patents and Trademarks.
Upon examination, it appeared that the applicant was entitled to have said
Xxxx registered under the Trademark Act of 1946, as amended, and the said Xxxx
has been duly registered this day in the Patent and Trademark Office on the
PRINCIPAL REGISTER
to the registrant named herein.
This registration shall remain in force for TEN years unless sooner
terminated as provided by law.
In Testimony whereof I have hereunto set
my hand and caused the seal of the Patent
and Trademark Office to be affixed this
twenty-eighth day of May 1996.
[SEAL]
[SIGNATURE]
Commissioner of Patents and Trademarks
Int. CI.: 29
Prior U.S. CI.: 46
Reg. No. 1,975,824
United States Patent and Trademark Office Registered May 28, 1996
================================================================================
TRADEMARK
PRINCIPAL REGISTER
[COMPANY LOGO]
NATURAL HORIZONS, INC. (COLORADO FIRST USE 4-11-1992; IN COMMERCE
CORPORATION) 4-11-92.
0000 XXXXXXXXX XXXX, XXXXX 000 NO CLAIM IS MADE TO THE EXCLUSIVE
XXXXXXX, XX 00000 RIGHT TO USE "ORGANIC", APART FROM
THE XXXX AS SHOWN.
FOR: MILK AND DAIRY PRODUCTS, SER. NO. 74-569.818. FILED 9-6-1994.
NAMELY HOMOGENIZED MILK, LOW FAT
MILK, SOUR CREAM AND YOGURT, IN XXXXXXX X. XXXXXX, EXAMINING ATTORNEY
CLASS 29 (U.S. CL. 46)
[STATE OF CALIFORNIA
SECRETARY OF STATE
CERTIFICATE LETTERHEAD]
SECRETARY OF STATE
TRADEMARK REG NO. 099829 CLASS NO. 46
CERTIFICATE OF REGISTRATION OF TRADEMARK
I, XXXX XXXXX, SECRETARY OF STATE OF THE STATE OF CALIFORNIA, HEREBY CERTIFY:
THAT IN ACCORDANCE WITH THE APPLICATION FILES IN THIS OFFICE THE TRADEMARK
DESCRIBED BELOW HAS BEEN DULY REGISTERED IN THIS OFFICE ON BEHALF OF:
NAME OF APPLICANT: Natural Horizons, Inc.
BUSINESS ADDRESS: 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
XX 00000
DATE FIRST USED IN CALIFORNIA: September 30, 1993
DATE FIRST USED ANYWHERE: April 11, 1992
DESCRIPTION OF TRADEMARK: Horizon Organic with design of a jumping cow
superimposed on a world globe.
DESCRIPTION OF GOODS ON WHICH THE TRADEMARK IS USED: Perishable dairy products,
including fluid milk, cream and mixtures and types thereof; refrigerated live
culture, soft and frozen yogurt, sour cream, soft and hard cheeses, butter, ice
cream and ice milk.
A COPY, SPECIMEN, FACSIMILE, COUNTERPART OR A REPRODUCTION OF THE XXXX IS
ATTACHED
DATE OF REGISTRATION: February 7, 1995
TERM OF REGISTRATION EXTENDS TO AND INCLUDES: February 7, 2005
[SEAL OF STATE OF CALIFORNIA]
IN WITNESS WHEREOF, I EXECUTE THIS
CERTIFICATE AND AFFIX THE GREAT SEAL OF
THE STATE OF CALIFORNIA THIS 8TH DAY OF
FEBRUARY, 1995.
[SIGNATURE]
XXXX XXXXX
SECRETARY OF STATE
A COPY, SPECIMEN, FACSIMILE, COUNTERPART OR
REPRODUCTION OF TRADEMARK REG. NO. 099829
------
[COMPANY SPECIMEN]
[LOGO of STATE OF IDAHO DEPARTMENT OF STATE]
I, XXXX X. XXXXXXXXX, Secretary of State of Idaho and custodian of the
record of Trademarks and Service Marks, do hereby certify to the following
Trademark/Service Xxxx Registration filed on 12/5/94.
Name Of Registrant: NATURAL HORIZONS, INC.
Business Address 0000 XXXXXXXXX XXXX XXX. 000
XXXXXXX, XX 00000
File No.: M14684 Class: 46 First Use in Idaho: 09 30 1993 Expiration Date: 12/5/2004
Goods or Services with which xxxx is used:
PERISHABLE DAIRY PRODUCTS INCLUDING MILK, AND CREAM, YOGURTS, SOUR
CREAM, HARD AND SOFT CHEESES, ICE CREAM AND ICE MILK
Registered Trademark-Service Xxxx:
/TM/ "HORIZON ORGANIC" WITH DESIGN OF A JUMPING COW SUPERIMPOSED ON A
WORLD GLOBE.
[COMPANY LOGO]
[SIGNATURE]
[SEAL OF THE STATE OF IDAHO] SECRETARY OF STATE
By [SIGNATURE]
---------------------------
[BORDER FRAME]
APPLICATION FOR
REGISTRATION OF TRADEMARK-SERVICE XXXX
STATE OF IDAHO
MAIL TO: SECRETARY XX XXXXX, XXXXXXXXXX, X.X. XXX 00000, XXXXX, XXXXX 83720-
0080
The applicant swears that he has adopted and is now using in the State of
Idaho the trademark-service xxxx identified below, and believes that no other
individual firm, partnership, corporation, association, union, or other
organization has the right to use such trademark-service xxxx in connection with
the same or similar goods or services identified below in this State, either in
the identical form thereof or in such near resemblance thereto as might be
calculated to deceive or to be mistaken therefor.
1. Name of applicant: NATURAL HORIZONS, INC.
----------------------------------------------------------
2. Business address: 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
-----------------------------------------------------------
Xxxxxxxx 00000
---------------
3. If applicant is a partnership, name the general partners:
-------------------
----------------------------------------------------------------------------
4. If applicant is a corporation, give state of incorporation: Colorado
-----------------
5. Describe in detail the exact xxxx to be registered: Words "Horizon
-------------------------
Organic" with design of a jumping cow superimposed on a world globe.
----------------------------------------------------------------------------
6. Number of class in which above particular goods or services fall: 46
-----------
7. Describe the kind(s) of goods or services in the above class which the
trademark-service xxxx is used to identify:
---------------------------------
Perishable dairy products including milk and cream, yogurts, sour cream,
------------------------------------------------------------------------
hard and soft cheeses, ice cream and ice milk.
----------------------------------------------
8. Date of first use of trademark-service xxxx anywhere: 4/11/92
-----------------------
9. Date of first use of trademark-service xxxx in Idaho: 9/30/93
-----------------------
10. State the manner in which the xxxx will be used (i.e. on the foods, on
labels or tags, on displays, on signs, on letterheads, in advertising
materials, on business cards, etc.): Applied to cartons and packaging
----------------------------------------
----------------------------------------------------------------------------
11. Person and mailing address to which certificate should be sent: KRENDL
-------------
XXXXXXXX & XXXXXX, Attention Xxxx Xxxxx: 000 00xx Xxxxxx, Xxxxx 0000,
----------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx 00000 Phone (000) 000-0000
----------------------- ----------------------------------------------
NATURAL HORIZONS, INC.
County of Boulder ) Signed By: /s/ Xxxx X. Xxxxxxx
---------------------- ----------------------------------
) ss. Xxxx X. Xxxxxxx, Vice President
State of Colorado )
----------------------
I, /s/ Xxxxxx X. Xxxxxxx , a
------------------------------------------------------------------------
notary public, do certify that on this 16th day of
-----------------------------------
November , 1994, personally appeared before me
------------------------------------- --
Xxxx X. Xxxxxxx , who being by me first duly
----------------------------------------------
sworn, signed the foregoing instrument in my presence, and stated that
the allegations contained therein are true.
--------------------------------------------------------
Signed: /s/ Xxxxxx X. Xxxxxxx Filing Office Use Only
------------------------------------
Notary public IDAHO SECRETARY OF STATE
19941205 0900 46408 2
In and for the state of Colorado
--------------------------------------- CK #: 0000 XXXX# 38310
Residing at Boulder
--------------------------------------------------- T MARKS
My commission expires 9-19-97 1@ 20.00 20.00
------------------------------------------
(SEAL)
" T
Instructions on Reverse $20.00 Revised 1/94
[SPECIMEN OF COMPANY LOGO]
MAIL TO: SECRETARY OF STATE For office use only
CORPORATIONS SECTION
0000 XXXXXXXX, XXXXX 000
Xxxxxx, XX 00000 941088538 $50.00
(000) 000-0000 SOS 28-09-94 08:30
MUST BE TYPED FAX (000) 000-0000 ------------------------
FILING FEE: $50.00
MUST SUBMIT TWO COPIES
---
AND TWO FACSIMILES
---
OF THE TRADEMARK
APPLICATION FOR REGISTRATION
OF
TRADEMARK OR SERVICE XXXX
PLEASE INCLUDE A TYPED
SELF-ADDRESSED ENVELOPE
1. NAME AND PRINCIPAL BUSINESS ADDRESS OF OWNER/APPLICANT:
Natural Horizons, Inc. 0000 Xxxxxxxxx Xxxx, Xxxxx 000
-------------------------------------------------------------------------------
NAME STREET SUITE/APT.#
Xxxxxxx XX 00000
--------------------------------------------------------------------------------
CITY STATE ZIP
STATE OF INCORPORATION Colorado (COMPLETE ONLY IF A CORPORATION)
--------------------------------------------------------------------------------
2. DESCRIPTION OF TRADEMARK -- COMPLETE A OR B, BUT NOT BOTH
------------
A.
WORDS "HORIZON ORGANIC" AND DESIGN
---------------------------------------------------------
CHECK ONE: [ ] WORDS ONLY [ ] WORDS WITH STYLIZED LETTERING [X] WORDS AND DESIGN
NO FACSIMILE REQUIRED 2 FACSIMILES REQUIRED 2 FACSIMILES
B.
DESIGN ONLY - NO WORDS IN TRADEMARK (2 FACSIMILES REQUIRED)
BRIEFLY DESCRIBE THE DESIGN______________________________________________
------------------------------------------------------------------------------
3. CLASSIFICATION Choose ONLY ONE from list on instruction page. Class Number ( 29 )
------------------------------------------------------------------------------------------------------------------------------------
4. DATE FIRST USED BY APPLICANT OR THE PREDECESSOR IN THE SAME BUSINESS.
COMPLETE BOTH A & B
FIRST USED ANYWHERE FIRST USED IN COLORADO
April 11, 1992 April 11, 1992
--------------------------- ---------------------------------------------------------------------------------------
Date first used anywhere must be same as or earlier than date first used in Colorado.
------------------------------------------------------------------------------------------------------------------------------------
Form 032
Rev. 7/941
5. MANNER IN WHICH TRADEMARK IS USED -- BE BRIEF
Trademark is applied to cartons and packaging
--------------------------------------------------------------------------------
________________________________________________________________________________
6. The applicant hereby appoints the Secretary of State as agent for service of
process in any action relating to this registration if the applicant is or
becomes a nonresident or foreign corporation not licensed to do business in this
state or cannot be found in this state.
7. The applicant signs this application for registration under penalty of
perjury and states that s/he is the owner of the xxxx and that no other person
has the right to use such xxxx in this state, either in the identical form
thereof or in any near resemblance thereto which might be calculated to deceive
or to be mistaken therefor.
SIGNATURE NATURAL HORIZONS, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------
Xxxx X. Xxxxxxx, Vice President
-2-
[COMPANY LOGO]
MAIL TO: SECRETARY OF STATE For office use only
CORPORATIONS SECTION
0000 XXXXXXXX, XXXXX 000
XXXXXX, XX 00000 941088538 $50.00
(000) 000-0000 SOS 28-09-94 08:30
MUST BE TYPED FAX (000) 000-0000 ------------------------
FILING FEE: $50.00
MUST SUBMIT TWO COPIES
---
AND TWO FACSIMILES
---
OF THE TRADEMARK
APPLICATION FOR REGISTRATION
OF
TRADEMARK OR SERVICE XXXX
PLEASE INCLUDE A TYPED
SELF-ADDRESSED ENVELOPE
1. NAME AND PRINCIPAL BUSINESS ADDRESS OF OWNER/APPLICANT:
Natural Horizons, Inc. 0000 Xxxxxxxxx Xxxx, Xxxxx 000
-------------------------------------------------------------------------------
NAME STREET SUITE/APT.#
Xxxxxxx XX 00000
--------------------------------------------------------------------------------
CITY STATE ZIP
STATE OF INCORPORATION Colorado (COMPLETE ONLY IF A CORPORATION)
--------------------------------------------------------------------------------
2. DESCRIPTION OF TRADEMARK - COMPLETE A OR B, BUT NOT BOTH
------------
A.
WORDS JOIN THE MOOOOVEMENT
---------------------------------------------------------
CHECK ONE: [X] WORDS ONLY [ ] WORDS WITH STYLIZED LETTERING [ ] WORDS AND DESIGN
NO FACSIMILE REQUIRED 2 FACSIMILES REQUIRED 2 FACSIMILES
B.
DESIGN ONLY - NO WORDS IN TRADEMARK (2 FACSIMILES REQUIRED)
BRIEFLY DESCRIBE THE DESIGN______________________________________________
--------------------------------------------------------------------------------
3. CLASSIFICATION Choose ONLY ONE from list on instruction page. Class Number ( 29 )
------------------------------------------------------------------------------------------------------------------------------------
4. DATE FIRST USED BY APPLICANT OR THE PREDECESSOR IN THE SAME BUSINESS.
COMPLETE BOTH A & B
FIRST USED ANYWHERE FIRST USED IN COLORADO
6/20/94 6/20/94
--------------------------- ---------------------------------------------------------------------------------------
Date first used anywhere must be same as or earlier than date first used in Colorado.
------------------------------------------------------------------------------------------------------------------------------------
5. MANNER IN WHICH TRADEMARK IS USED - BE BRIEF
To identify organic dairy products
--------------------------------------------------------------------------------
6. The applicant hereby appoints the Secretary of State as agent for service of
process in any action relating to this registration if the applicant is or
becomes a nonresident or foreign corporation not licensed to do business in this
state or cannot be found in this state.
7. The applicant signs this application for registration under penalty of
perjury and states that s/he is the owner of the xxxx and that no other person
has the right to use such xxxx in this state, either in the identical form
thereof or in any near resemblance thereto which might be calculated to deceive
or to be mistaken therefor.
SIGNATURE (Applicant, owner, authorized agent): NATURAL HORIZONS, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------
Its: President
------------------------
Exhibit 6A to
Loan and Security Agreement
Disclosure Schedule
-------------------
Part 1: Judgments, Litigation, Claims and Proceedings
---------------------------------------------
Horizon Idaho has requested a waiver from the United States Department
of Agriculture from certain reporting requirements in connection with
the 1996 AMTA payment. This waiver has been conditionally approved.
Part 2: Defaults and Disputes
---------------------
None.
Part 3: Licenses, Patents, Copyrights, Trademark, Trade Names and Applications
----------------------------------------------------------------------
Trademarks
----------
Federal Trademark Registration Reg. No. 1,975,824
California Trademark Registration Reg. No. 099829
Colorado Trademark Registrations Reg. No. 941075356 and Reg. No.
941088538
Idaho Trademark Registration: File No. M14684
Trade Names
-----------
Horizon Organic Dairy, Inc. has registered "Natural Horizons, Inc" as
a trade name
Continuation of Exhibit 6A to
Loan and Security Agreement
Disclosure Schedule (Continued)
-------------------------------
Part 4: Security Interests, Liens, Claims and Encumbrances
--------------------------------------------------
Republic Acceptance Corporation has a security interest in all the
assets of Horizon Colorado.
Farm Credit Services has a security interest in all the assets of
Horizon Idaho.
Horizon Colorado has a subordinated mortgage in the real property or
Horizon Idaho.
Part 5: Locations of Borrower's Assets
------------------------------
1. 0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Horizon Idaho
2. 0000 Xxxx 000 Xxxxx
Xxxxxxxx, XX 00000
3. See Exhibit 3B (location of inventory)
Part 6: Tax Liability Claims
--------------------
The IRS is auditing the 1995 tax return for Horizon Idaho.
Continuation of Exhibit 6A to
Loan and Security Agreement
Disclosure Schedule (Continued)
-------------------------------
Part 7: Other Indebtedness
------------------
None.
Part 8: Other Names Used by Borrower
----------------------------
Horizon Idaho: Sunrise organic Farms, Inc.
Aurora Dairy Corporation of Idaho
Horizon Colorado: Natural Horizons, Inc.
Part 9: Affiliates
----------
None.
Continuation of Exhibit 6A to Loan and Security Agreement
Disclosure Schedule (Continued)
-------------------------------
Part 10: Environmental Matters
---------------------
One of the three properties in Maryland, which Horizon Maryland has
under contract to purchase, has lagoons which contain manure and wash
water form a previous dairy. The permit to use this property as a
dairy issued by the state of Maryland requires that the water and
waste in these lagoons be remediated, which can be accomplished
through spray irrigation.
EXHIBIT 6B TO
LOAN AND SECURITY AGREEMENT
Equipment
---------
Attached
Horizon Organic Farm, Inc. - Idaho Farm
Equipment List as of 7/31/97
Insurance
ID # Lease Description Model # Serial # Schedule Date Cond.
3000 1985 GMC Dump Truck Xxxxxxxxx 0XXX0X0X0XX000000 yes fair
3001 1993 Ford Pickup (Xxx) 2FTF26G2PCA75965 no good
3003 Xxxxxxx Roller Mill 6831 no good
3004 Green Hay Trailer "Elmlusa" fair
3005 Snapper Riding Lawn Mower May-90 junk
3006 Box Scrapper fair
3008 Xxxx Deere Spreader 450 WOO4500X014242 no Sep-91 Fair
3009 Xxxxxx Bobcat Welder 225G H930062464 Feb-94 good
3010 Xxxxx Xxxx Feeder KRM9456 Mar-94 Fair
3011 Yes 1995 IH Truck 4700 0XXXXXXXXXX000000 yes good
3012 Yes Harsh Mixer 575H 57HB4271 good
3013 1994 Kawasaki Mule XX0XXXX00XX000000 yes Fair
3014 1994 Kawasaki Mule XX0XXXX00XX000000 yes Fair
3015 Cat Generator Motor 3406 4RGO2158 yes Good
3016 Generator 400 Kw SR4 1JJ00787 Good
3017 1972 End Dump 24' yes Mar-95 Fair
3020 1976 AMC Jeep DJ5D610692090 no Mar-95 Fair - Poor
3021 1974 AMC Jeep 414209 no Mar-95 Junk
3022 1975 AMC Jeep DJ5D5108638 no Mar-95 Fair - Poor
3023 1976 AMC Jeep DJ5D6106240 no Mar-95 Fair - Poor
3024 1974 AMC Jeep 418438 no Mar-95 Fair - Poor
3025 1976 AMC Jeep DJ5D6108189 yes Apr-95 Fair - Poor
3026 1975 AMC Jeep DJ5D5104315 yes Apr-95 Fair - Poor
3027 Yes 1994 Ford Turbo Diesel (Barney) F250 0XXXX00XXXXX00000 yes Nov-93 Good
3029 1977 GMC truck w/bed TDC927V596472 yes Dec-95 fair
3031 yes 1993 Caterpillar Wheel Loader 928 F 98Z09232 yes Jan-96 good
3032 yes 1996 Caterpillar Wheel Loader 928F 98Z12615 yes Jan-96 good
3034 1986 Ford Feed Truck L8000 0XXXX00XXXXX00000 yes Jun-94 fair feedlot
3035 1987 Mohrlang Feedbox 520 617 yes fair feedlot
0000 Xxxxx 4-Bale Hay Processor with Scales 8845 yes Jun-94 good
3037 Hay Wagon QSD4 yes Jun-94 fair
3038 1994 Kawasaki Mule XX00 XX0XXXX00XX000000 yes Jun-94 good yes
3039 Push Blade on 3010 Xxxx Deere no Jun-94 good
3041 Ace 500 Gallon sprayer 67207 good
3042 Xxxxxxxxxx 53'8" portable auger good
3043 1971 Peterbilt Truck no 41857P yes fair
3044 4 Wheel Hay Trailer (8' x 14') no no fair feedlot
3045 Great Dane Drop Deck Trailer 0XXXX00000X000000 yes fair
3046 Pup Hay Trailer (Black) no fair
3047 Ford Tractor 4000 fair feedlot
3048 Push blade no B011519600W fair feedlot
3049 1983 Ford Truck w/720 Harsh Mixer 0XXXX0000XXX00000 yes fair
3050 Green Tandem hay trailer no 83455 no fair feedlot
3052 Ford Tractor 4600 D2-NN-7006C yes fair
3053 1974 Honda Motorcycle CT901521604 no junk
3054 83 Mazda P/U B-200 JM2UC123D0713559 no junk
3055 1993 Kawaski 4 xxxxxxx XXXXXXX00X0000000 Apr-93 good
3057 yes 1993 Ford PU 4X4 (Xxxxxx) 0XXXX00X0XXX00000 yes new
3058 Xxxxxx Tractor 35 7742 no poor
3059 IHC Grain Drill 510 0390245SC002191 good
3060 Cat Loader (F/L) 920 62K9885 yes fair feedlot
Secures Current 4/30/95 6/3/97
Credit Line? Valuation FBS
ID # Lease Description 1=No 2=Yes Value Difference
3000 1985 GMC Dump Truck 2 $ 15,000 $ 7,000 $ 8,000
3001 1993 Ford Pickup (Xxx) 2 $ 12,000 $ 12,000 $ -
3003 Xxxxxxx Roller Mill 2 $ 4,000 $ 2,500 $ 1,500
3004 Green Hay Trailer "Elmlusa" 2 $ 750 $ 1,000 $ (250)
3005 Snapper Riding Lawn Mower 2 $ 200 $ 200
3006 Box Scrapper 2 $ 100 $ 200 $ (100)
3008 Xxxx Deere Spreader 2 $ 2,000 $ 1,000 $ 1,000
3009 Xxxxxx Bobcat Welder 2 $ 1,000 $ 250 $ 750
3010 Xxxxx Xxxx Feeder 2 $ 5,000 $ 2,000 $ 3,000
3011 Yes 1995 IH Truck 1 $ -
3012 Yes Harsh Mixer 1 $ -
3013 1994 Kawasaki Mule 2 $ 7,500 $ 2,500 $ 5,000
3014 1994 Kawasaki Mule 2 $ 7,500 $ 2,500 $ 5,000
3015 Cat Generator Motor 1 $ 20,000 $ 20,000
3016 Generator 400 Kw $ -
3017 1972 End Dump 24' 2 $ 7,850 $ 3,000 $ 4,850
3020 1976 AMC Jeep 2 $ 750 $ 500 $ 250
3021 1974 AMC Jeep 2 $ 750 $ 500 $ 250
3022 1975 AMC Jeep 2 $ 750 $ 500 $ 250
3023 1976 AMC Jeep 2 $ 750 $ 500 $ 250
3024 1974 AMC Jeep 2 $ 750 $ 500 $ 250
3025 1976 AMC Jeep 2 $ 750 $ 500 $ 250
3026 1975 AMC Jeep 2 $ 750 $ 500 $ 250
3027 Yes 1994 Ford Turbo Diesel (Barney) 1 $ -
3029 1977 GMC truck w/bed 2 $ 25,000 $ 10,000 $ 15,000
3031 yes 1993 Caterpillar Wheel Loader 1 $ -
3032 yes 1996 Caterpillar Wheel Loader 1 $ -
3034 1986 Ford Feed Truck 2 $ 35,000 $ 20,000 $ 15,000
3035 1987 Mohrlang Feedbox 2 $ -
3036 Xxxxx 4-Bale Hay Processor with Scales 2 $ 9,000 $ 5,000 $ 4,000
3037 Hay Wagon 2 $ 2,873 $ 500 $ 2,373
3038 1994 Kawasaki Mule 2 $ 8,808 $ 2,500 $ 6,308
3039 Push Blade on 3010 Xxxx Deere 2 $ 200 $ (200)
3041 Ace 500 Gallon sprayer 2 $ 750 $ 300 $ 450
3042 Xxxxxxxxxx 53'8" portable auger 2 $ 250 $ 500 $ (250)
3043 1971 Peterbilt Truck 2 $ 10,000 $ 5,000 $ 5,000
3044 4 Wheel Hay Trailer (8' x 14') 2 $ 2,000 $ 1,000 $ 1,000
3045 Great Dane Drop Deck Trailer 2 $ 5,500 $ 3,000 $ 2,500
3046 Pup Hay Trailer (Black) 2 $ 2,500 $ 1,500 $ 1,000
3047 Ford Tractor 2 $ 1,000 $ 1,000 $ -
3048 Push blade 2 $ 100 $ 300 $ (200)
3049 1983 Ford Truck w/720 Harsh Mixer 2 $ 15,000 $ 7,500 $ 7,500
3050 Green Tandem hay trailer 2 $ 2,000 $ 2,000 $ -
3052 Ford Tractor 2 $ 6,000 $ 2,000 $ 4,000
3053 1974 Honda Motorcycle 2 $ 100 $ 100
3054 83 Mazda P/U 2 $ 500 $ 500
3055 1993 Kawaski 4 xxxxxxx 2 $ 2,000 $ 1,500 $ 500
3057 yes 1993 Ford PU 4X4 (Xxxxxx) 1 $ -
3058 Xxxxxx Tractor 2 $ 2,500 $ 250 $ 2,250
3059 IHC Grain Drill 2 $ 2,000 $ 1,000 $ 1,000
3060 Cat Loader (F/L) 2 $ 20,000 $ 10,000 $ 10,000
3061 Xxxxxx 2 1/2T bumper xxxx M696522986 good
3062 Xxxxxx 10T Floor xxxx J660J15080 good
3063 Band Saw B51265 good
3064 Atland 50T Press P3301 good
3065 Hotsy Steam Cleaner 65858 junk
3066 Durancroft Floor drill press 60119 good
3067 1993 Xxxxxxx Air comp with gas motor M1880009 good
3069 Champion Air Compressor 249290 good
3070 1993 Travalong Cattle Trailer 0XXXX0000X0000000 yes good
3071 Grasshopper Lawn Mower fair
3072 Case Backhoe 5808 8740569 fair
3073 Xxxxxx Electric Welder (shop) 150 A-893832 good
3074 Xxxxxx Bobcat Gas Motor Welder 225G K8009278 good
0000 Xxxxxx Xxxxxxxx Xx. Trailer (shop) fair
3076 Xxxxxx 0XX pump 82J358 good
0000 Xxxx Xxxxx Xxxxxxx 0000 11T18805 yes junk
3078 Pipe Trailer fair
0000 Xxxx Xxxxx Xxxxxxx 0000 SG12-255604RW yes good
0000 Xxxx Xxxxx Xxxxxxx 0000 SC-4-1168-369R yes fair
3081 Xxxx Xxxxx Blade 22571129 yes good
3082 Xxxx Deere Dics, 16' off set 455 10658 good
3083 Case Disc 496 JAG159598 good
3084 Xxxx Deere Xxxx Hog mower 506 W0050GC025122 no fair
3085 Ace 20' Roller Harrow 9101 70929 good
3086 Case Chisel 5700 JAGT0010106 good
3087 Ace 100 gallon sprayer good
3088 IHC Dump Truck (Blue water truck) 106620H326245 no poor
0000 Xxxxxxxx Xxxxxxx XX00000 yes junk
3090 200 Gallon propane weed burner no fair
3091 Xxxx Deere Blade 115 E011519600W fair
3092 EZEE-on Loader mounted on JD 4440 1993 good
3093 Case DiscHitch Hiker 496 good
3094 250 HP GE Motor w/Peerless Pump SSJ508008 yes
3095 Uniclose Booster Motor w/Peerless Pump R1846-00-269 yes yes
3096 350 HP Pump GE Motor w/Peerless Pump NF67178 yes
3061 Xxxxxx 2 1/2T bumper xxxx M696522986 good
3062 Xxxxxx 10T Floor xxxx J660J15080 good
3063 Band Saw B51265 good
3064 Atland 50T Press P3301 good
3065 Hotsy Steam Cleaner 65858 junk
3066 Durancroft Floor drill press 60119 good
3067 1993 Xxxxxxx Air comp with gas motor M1880009 good
3069 Champion Air Compressor 249290 good
3070 1993 Travalong Cattle Trailer 0XXXX0000X0000000 yes good
3071 Grasshopper Lawn Mower fair
3072 Case Backhoe 5808 8740569 fair
3073 Xxxxxx Electric Welder (shop) 150 A-893832 good
3074 Xxxxxx Bobcat Gas Motor Welder 225G K8009278 good
0000 Xxxxxx Xxxxxxxx Xx. Trailer (shop) fair
3076 Xxxxxx 0XX pump 82J358 good
0000 Xxxx Xxxxx Xxxxxxx 0000 11T18805 yes junk
3078 Pipe Trailer fair
0000 Xxxx Xxxxx Xxxxxxx 0000 SG12-255604RW yes good
3061 Xxxxxx 2 1/2T bumper xxxx 2 $ 500 $ 500 $ -
3062 Xxxxxx 10T Floor xxxx 2 $ 100 $ 500 $ (400)
3063 Band Saw 2 $ 350 $ 500 $ (150)
3064 Atland 50T Press 2 $ 250 $ 500 $ (250)
3065 Hotsy Steam Cleaner 2 $ - $ 500 $ (500)
3066 Durancroft Floor drill press 2 $ 150 $ 500 $ (350)
3067 1993 Xxxxxxx Air comp with gas motor 2 $ 50 $ 500 $ (450)
3069 Champion Air Compressor 2 $ 150 $ 500 $ (350)
3070 1993 Travalong Cattle Trailer 2 $ 5,000 $ 2,000 $ 3,000
3071 Grasshopper Lawn Mower 2 $ 250 $ 250
3072 Case Backhoe 2 $ 8,000 $ 5,000 $ 3,000
3073 Xxxxxx Electric Welder (shop) 2 $ 500 $ 250 $ 250
3074 Xxxxxx Bobcat Gas Motor Welder 2 $ 500 $ 250 $ 250
3075 Xxxxxx Xxxxxxxx Ut. Trailer (shop) 2 $ 100 $ 100
3076 Xxxxxx 0XX pump 2 $ 150 $ 150
3077 Xxxx Xxxxx Xxxxxxx 0 $ 5,000 $ 500 $ 4,500
3078 Pipe Trailer 2 $ 1,000 $ 1,000
3079 Xxxx Deere Tractor 2 $30,000 $30,000 $ -
3080 Xxxx Deere Tractor 2 $30,000 $20,000 $ 10,000
3081 Xxxx Xxxxx Blade 2 $ 4,000 $ 2,000 $ 2,000
3082 Xxxx Deere Dics, 16' off set 2 $ 8,500 $ 6,000 $ 2,500
3083 Case Disc 2 $ 8,500 $ 7,000 $ 1,500
0000 Xxxx Xxxxx Xxxx Xxx mower 2 $ 1,000 $ 500 $ 500
3085 Ace 20' Roller Harrow 2 $ 4,000 $ 7,000 $ (3,000)
3086 Case Chisel 2 $ 7,500 $ 3,000 $ 4,500
3087 Ace 100 gallon sprayer 2 $ 200 $ 300 $ (100)
3088 IHC Dump Truck (Blue water truck) 2 $ 250 $ 500 $ (250)
3089 Xxxxxxxx Tractor 2 $ 1,000 $ 1,000
3090 200 Gallon propane weed burner 2 $ 250 $ 250
3091 Xxxx Deere Blade 2 $ 750 $ 2,000 $ (1,250)
3092 EZEE-on Loader mounted on JD 4440 2 $ 4,000 $ 2,000 $ 2,000
3093 Case DiscHitch Hiker 2 $ 500 $ 1,000 $ (500)
3094 250 HP GE Motor w/Peerless Pump CVI, East 1 $ -
3095 Uniclose Booster Motor w/Peerless Pump CVI, East 1 $ -
3096 350 HP Pump GE Motor w/Peerless Pump X. Xxxxxx Farm 1 $ -
3061 Xxxxxx 2 1/2T bumper xxxx 2 $ 500 $ 500 $ -
3062 Xxxxxx 10T Floor xxxx 2 $ 100 $ 500 $ (400)
3063 Band Saw 2 $ 350 $ 500 $ (150)
3064 Atland 50T Press 2 $ 250 $ 500 $ (250)
3065 Hotsy Steam Cleaner 2 $ - $ 500 $ (500)
3066 Durancroft Floor drill press 2 $ 150 $ 500 $ (350)
3067 1993 Xxxxxxx Air comp with gas motor 2 $ 50 $ 500 $ (450)
3069 Champion Air Compressor 2 $ 150 $ 500 $ (350)
3070 1993 Travalong Cattle Trailer 2 $ 5,000 $ 2,000 $ 3,000
3071 Grasshopper Lawn Mower 2 $ 250 $ 250
3072 Case Backhoe 2 $ 8,000 $ 5,000 $ 3,000
3073 Xxxxxx Electric Welder (shop) 2 $ 500 $ 250 $ 250
3074 Xxxxxx Bobcat Gas Motor Welder 2 $ 500 $ 250 $ 250
3075 Xxxxxx Xxxxxxxx Ut. Trailer (shop) 2 $ 100 $ 100
3076 Xxxxxx 0XX pump 2 $ 150 $ 150
3077 Xxxx Xxxxx Xxxxxxx 0 $ 5,000 $ 500 $ 4,500
3078 Pipe Trailer 2 $ 1,000 $ 1,000
3079 Xxxx Deere Tractor 2 $30,000 $30,000 $ -
0000 Xxxx Xxxxx Xxxxxxx 0000 SC-4-1168-369R yes fair
3081 Xxxx Xxxxx Blade 22571129 yes good
3082 Xxxx Deere Dics, 16' off set 455 10658 good
3083 Case Disc 496 JAG159598 good
3084 Xxxx Deere Xxxx Hog mower 506 W0050GC025122 no fair
3085 Ace 20' Roller Harrow 9101 70929 good
3086 Case Chisel 5700 JAGT0010106 good
3087 Ace 100 gallon sprayer good
3088 IHC Dump Truck (Blue water truck) 106620H326245 no poor
0000 Xxxxxxxx Xxxxxxx XX00000 yes junk
3090 200 Gallon propane weed burner no fair
3091 Xxxx Deere Blade 115 E011519600W fair
3092 EZEE-on Loader mounted on JD 4440 1993 good
3093 Case DiscHitch Hiker 496 good
3094 250 HP GE Motor w/Peerless Pump SSJ508008 yes
3095 Uniclose Booster Motor w/Peerless Pump R1846-00-269 yes yes
3096 350 HP Pump GE Motor w/Peerless Pump NF67178 yes
3097 Westinghouse Booster Motor w/Peerless pump 80LI-I-5558 yes
3098 250 HP US Motor w/pump and Booster Motor 1064217 yes
3100 200 HP GE Motor KHJ1018106 yes
3101 w/Xxxx Xxxxxx Pump 15018 yes
3102 200 HP GE Motor w/pump RTJ415014 yes
3103 150 HP US Motor w/pump no 1151069 yes
3104 250 HP U Holloshaft Motor no 1365076 yes
3105 75 HP Beldor Motor no 1269C yes
3106 Booster Motor 40 HP Beldor 689C yes
3107 9 Tower Valley Pivot 6000 55120 yes
3108 9 Tower Valley Pivot 6000 55078 yes
0000 Xxxx Xxxxx 000 Xxxxxx Spreader 450 WOO450X015854 yes
3110 New Holland Windrower 2550 567809 yes good
w/ New Holland Head 2214 563804 yes
3111 New Holland 2550 Windrower 567794 yes good
w/2214 Head 563800 yes
3112 Xxxx Deere Mulch Flex Planter 7100 044223A good
3113 1988 Dodge Dakota 0X0XX00X0XX000000 yes good
3114 1994 Kawasaki Bayou 220A7 0XXXXXX00XX000000 yes good
3115 1994 Kawasaki Bayou 220A7 XXXXXXX0XXX000000 yes good
3117 75 HP Beldor Motor 1289C yes
3118 40 HP Beldor Motor 689C yes
3119 Uniclosed Motor w/Peerless Pump C1004883 yes
3120 9 Tower Valley 6000 70005 yes
3121 9 Tower Valley 6000 70020 yes
3122 250 HP GE Motor w/Xxxx Xxxxx pump HIJ812127 yes
0000 Xxxxxxx Xxxx Xxxxx w/Peerless Pump AL96626-433-5 yes
3124 Booster Westinghouse 100 HP Motor 8008 yes
w/Peerless Pump 80LIII5557
3125 Ford Tractor 4100 DA23BJ7JG11 yes fair
3126 1984 Kenworth Truck K100 0XXXX00X0XX000000 yes fair
0000 Xxxxx Xxxx Processor KROT 8806 yes fair
3128 8x30 Box Scraper no Jan-95 good
3129 Valley Model Pivot 8000 75403 yes Dec-94 new
3130 1995 Almar Pocket Paddle 8 row yes Mar-95 new
3131 Yes Xxxxx Compost Xxxxxx 1200 10910 yes May-95 new
000-0000000-000
3132 Yes Case IH Tractor 5230MFD JJF1038747 Yes new
3133 Yes 1994 Ford P/U (Xxxxx) 0XXXX00X0XXX00000 yes good
3080 Xxxx Deere Tractor 2 $ 30,000 $ 20,000 $ 10,000
3081 Xxxx Xxxxx Blade 2 $ 4,000 $ 2,000 $ 2,000
3082 Xxxx Deere Dics, 16' off set 2 $ 8,500 $ 6,000 $ 2,500
3083 Case Disc 2 $ 8,500 $ 7,000 $ 1,500
0000 Xxxx Xxxxx Xxxx Xxx mower 2 $ 1,000 $ 500 $ 500
3085 Ace 20' Roller Harrow 2 $ 4,000 $ 7,000 $ (3,000)
3086 Case Chisel 2 $ 7,500 $ 3,000 $ 4,500
3087 Ace 100 gallon sprayer 2 $ 200 $ 300 $ (100)
3088 IHC Dump Truck (Blue water truck) 2 $ 250 $ 500 $ (250)
3089 Xxxxxxxx Tractor 2 $ 1,000 1,000
3090 200 Gallon propane weed burner 2 $ 250 $ 250
3091 Xxxx Deere Blade 2 $ 750 $ 2,000 $ (1,250)
3092 EZEE-on Loader mounted on JD 4440 2 $ 4,000 $ 2,000 $ 2,000
3093 Case DiscHitch Hiker 2 $ 500 $ 1,000 $ (500)
3094 250 HP GE Motor w/Peerless Pump CV I, East 1 $ -
3095 Uniclose Booster Motor w/Peerless Pump CV I, East 1 $ -
3096 350 HP Pump GE Motor w/Peerless Pump X. Xxxxxx Farm 1 $ -
3097 Westinghouse Booster Motor w/Peerless pump X. Xxxxxx Farm 1 $ -
3098 250 HP US Motor w/pump and Booster Motor West Schodde 1 $ -
3100 200 HP GE Motor West CV I 1 $ -
3101 w/Xxxx Xxxxxx Pump West CV I 1 $ -
3102 200 HP GE Motor w/pump CV 2 1 $ -
3103 150 HP US Motor w/pump Xxxxxxxxx Farm 1 $ -
3104 250 HP U Holloshaft Motor X. Xxxxxxx Farms 1 $ -
3105 75 HP Beldor Motor X. Xxxxxxx Farm 1 $ -
3106 Booster Motor 40 HP Beldor X. Xxxxxxx Farm 1 $ -
3107 9 Tower Valley Pivot X. Xxxxxxx Farm 2 $ 18,000 $ (18,000)
3108 9 Tower Valley Pivot X. Xxxxxxx Farm 2 $ 18,000 $ (18,000)
3109 Xxxx Deere 450 Manure Spreader feedlot 2 $ 1,000 $ 500 $ 500
3110 New Holland Windrower 2 $ 57,800 $ 35,600 $ 22,200
w/ Xxx Xxxxxxx Xxxx
0000 Xxx Xxxxxxx 2550 Windrower 2 $ 57,800 $ 35,600 $ 22,200
w/2214 Head
3112 Xxxx Deere Mulch Flex Planter 2 $ 5,000 $ 1,500 $ 3,500
3113 1988 Dodge Dakota 2 $ 4,000 $ 4,000 $ -
3114 1994 Kawasaki Bayou 2 $ 2,500 $ 1,500 $ 1,000
3115 1994 Kawasaki Bayou 2 $ 1,500 $ 1,500 $ -
3117 75 HP Beldor Motor X. Xxxxxxx 1 $ -
3118 40 HP Beldor Motor X. Xxxxxxx 1 $ -
3119 Uniclosed Motor w/Peerless Pump CV 2 1 $ -
3120 9 Tower Valley CV 2 2 $ 20,000 $ 18,000 $ 2,000
3121 9 Tower Valley CV2 2 $ 20,000 $ 18,000 $ 2,000
3122 250 HP GE Motor w/Xxxx Xxxxx pump Xxxxxx Farm 1 $ -
0000 Xxxxxxx Xxxx Xxxxx w/Peerless Pump Xxxxxx Farm 1 $ -
3124 Booster Westinghouse 100 HP Motor Xxxxxxxxx Farm 1 $ -
w/Peerless Pump
3125 Ford Tractor 2 $ 5,000 $ 2,000 $ 3,000
3126 1984 Kenworth Truck 2 $ 8,000 $ 4,000 $ 4,000
3127 Xxxxx Xxxx Processor KROT 2 $ 9,000 $ 2,500 $ 6,500
3128 8x30 Box Scraper 2 $ 500 $ (500)
3129 Valley Model Pivot 2 $ 15,000 $ 10,000 $ 5,000
3130 1995 Almar Pocket Paddle 8 row 2 $ 2,500 $ (2,500)
3131 Yes Xxxxx Compost Xxxxxx 1 $ -
000-0000000-000
3132 Yes Case IH Tractor 1 $ -
3133 Yes 1994 Ford P/U (Xxxxx) 1 $ -
3134 Yes 1993 Ford P/U (calf truck) F150 0XXXX00X0XXX00000 yes good
3135 Tire Scraper yes Dec-96 new
3136 XX Xxx Trailor (red) fair
3137 40 HP lagoon pump XX Xxxxx Pump RSJ410105 yes
3138 82 Chevy Pickup w/flatbed 0XXXX00X0XX000000 yes fair
3139 Fruehauf Pup Trailer yes fair
3140 Pipe Trailer (white) yes good
3141 Pipe Trailer (red) yes good
3142 Yes 1995 924F Cat Loader 924F 5NN00316 yes Mar-97 good
3143 Yes 96 Case IH 5230 MFD Tractor 5230MFD JJF1058639 yes Mar-97 new
3144 2440 Xxxx Deere Tractor 2440 no junk
3145 Yes 20 ft Case IH Grain Drill 5400 JAG0850448 yes Apr-96 new
3146 Ditch Closer yes fair
3147 The Bale Handler (8 pack) yes good
3148 Allway Rowmaster 8-row Cultivator yes good
3149 Ford Fuel Trailer with Fuel Tank yes fair
3150 (Ranch King?) 16 HP Riding Lawn Mower yes new
136 Totals
3134 1 $ -
3135 2 $ -
3136 2 $ 500 $ (500)
3137 1 $ -
3138 2 $1,500 $ 500 $ 1,000
3139 2 $ 2,000 $ (2,000)
3140 2 $ 500 $ (500)
3141 2 $ 500 $ (500)
3142 1 $ -
3143 1 $ -
3144 2 $ -
3145 1 $ -
3146 2 $ 1,500 $ (1,500)
3147 2 $ 1,000 $ (1,000)
3148 2 $ 2,000 $ (2,000)
3149 2 $ 500 $ (500)
-------------------------------------
3150 2 N/A N/A
-------------------------------------
136 Totals $571,631 $388,500 $183,131 $837,218
EXHIBIT 7A TO
LOAN AND SECURITY AGREEMENT
COMPLIANCE CERTIFICATE
----------------------
Attached
HORIZON ORGANIC HOLDING CORPORATION
Compliance Certificate
-------------------------------------------------------------------
-------------------------------------------------------------------
Accompanying Financial Statements as of 5/31/97
--------------
The undersigned officer of Horizon Organic Holding
Corporation, ("the Borrower") hereby submits the
financial statements of the Borrower as of the date
written above, and certifies as follows:
1. That, to the best of my knowledge, "Borrower"
is in compliance with the terms and conditions
of the Note and the Loan Agreements dated as of
July , 1997 between Borrower and FBS Ag Credit
as and
2. That the amounts set forth in this Compliance
Certificate are true, correct and consistent
with generally accepted accounting principals
except as provided in the Loan Agreements as
of the date written above, which amounts are
used to illustrate compliance with certain
quantitative covenants of the Loan Agreements
as follows:
Actual Required
---------------- -----------------------
a. Tangible Net Worth:
Total Tangible Assets 26,041,626
Less Total Liabilities 14,849,083
---------------- ----------------
Equals $11,192,543 At least $8,000,000 plus
---------------- 60% of cumulative positive
net income beginning with
the 12/31/97 financials
b. Working Capital Ratio:
Current Assets $18,836,414
Divided by Current Liabilities $9,922,155
---------------- ----------------
Equals 1.90 Not less than 1.15 to 1
----------------
c. Total Liabilities to Tangible Net Worth Ratio:
Total Liabilities 14,849,083
Divided by Tangible Net Worth $11,192,543
---------------- ----------------
Equals 1.33 Not more than 2.0 to 1
----------------
b. Working Capital:
Current Assets $18,836,414
Less Current Liabilities $9,922,155
---------------- ----------------
Equals $8,914,260 Not less than $4,500,000
----------------
HORIZON ORGANIC HOLDING CORPORATION
BY:
--------------------------------------
Xxx Xxxxxxx, Vice President of Finance
Horizon Organic Holding Corporation
-------------------------------------------------------------------------------
EXHIBIT 8A TO
LOAN AND SECURITY AGREEMENT
PERMITTED DISPOSITIONS OF PROPERTY
----------------------------------
None
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
----------------------------------------------
BETWEEN FBS AG CREDIT, INC.
---------------------------
and
---
HORIZON ORGANIC HOLDING CORPORATION
-----------------------------------
HORIZON ORGANIC DAIRY
---------------------
HORIZON ORGANIC DAIRY, MARYLAND FARM, INC.
------------------------------------------
HORIZON ORGANIC DAIRY, IDAHO FARM, INC.
---------------------------------------
DATED JULY 15, 1997
-------------------
This First Amendment to Loan and Security Agreement (the "Amendment") is
made as of the 23 day of March, 1998, between Horizon Organic Holding
Corporation, a Delaware corporation; Horizon Organic Dairy, a Colorado
corporation; Horizon Organic Dairy, Maryland Farm, Inc., a Colorado corporation;
Horizon Organic Dairy, Idaho Farm, Inc., a Colorado Corporation (hereinafter
referred to as "Borrower," whether one or more), and FBS Ag Credit, Inc., a
Colorado corporation.
RECITAL
-------
A. An Event of Default has occurred under the Loan and Security Agreement
dated July 15, 1997 (as the same may be amended, replaced, restated and/or
supplemented from time to time, the "Loan Agreement"). FBS Ag Credit has agreed
to waive this particular Event of Default.
B. Borrower wishes to finance the purchase of organic brand labels from
Juniper Valley Farms (the "Brand Label Purchase") and FBS Ag is willing to
consent to this transaction on the terms and conditions herein contained.
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in the Loan Agreement and this Amendment, and of any loans
or extensions of credit or other financial accommodations at any time made to or
for the benefit of Borrower by FBS Ag Credit, Borrower and FBS Ag Credit agree
as follows:
1. Acknowledgment of Specific Defaults. Borrower acknowledges the
-----------------------------------
existence of the following Event of Default: As of December 31, 1997 and
through February 28, 1998 Borrower has failed to comply with Subsection 7.6(e)
-----------------
of the Loan Agreement, regarding minimum working capital requirements.
2. Waiver of Specific Defaults. FBS Ag Credit waives the specific Event
---------------------------
of Default enumerated in Section 1 of this Amendment. Notwithstanding the
---------
foregoing waiver, it is expressly understood and agreed that FBS Ag Credit's
failure, at any time or times hereafter, to require strict performance by
Borrower of any provision of the Loan Agreement, including without limitation,
the provisions of Subsection 7.6(e) of the Loan Agreement (as modified by this
-----------------
Amendment), shall not waive, affect or diminish any right of FBS Ag Credit
thereafter to demand strict compliance and performance therewith, and shall not
suspend, waive or affect any other Event of Default, whether the same is prior
or subsequent thereto and whether of the same or a different kind or character.
3. Subsection 7.6 of the Loan Agreement, Financial Covenants and Ratios,
-------------- ------------------------------
shall be amended to read in full as follows:
7.6 Financial Covenants and Ratios. Borrower shall maintain as
------------------------------
of the end of each month: (a) a Tangible Net Worth of not less than
$5,000,000 plus 60% of the cumulative annual positive net income
beginning with the fiscal year end and consolidated financial
results of December 31, 1997; (b) a Working Capital Ratio of not
less than 1.15 to 1; (c) a ratio of total liabilities to Tangible
Net Worth of not more than 3.5 to 1 through April 1, 1998, and
thereafter not more than 3.0 to 1; (d) minimum Working Capital of
$3,000,000 after February 28, 1998 through May 31, 1998, $3,500,000
after May 31, 1998 through December 31, 1998 and $4,000,000 after
December 31, 1998.
4. Notwithstanding the Affirmative and Negative Covenants in the Loan
Agreement that would prohibit the Brand Label Purchase, FBS Ag Credit hereby
consents to the Brand Label Purchase subject to the following conditions: (i)
the purchase price shall not exceed $5,900,000; (ii) financing of the purchase
price shall be on an unsecured basis and shall be repaid within 120 days from
the closing of the transaction. FBS Ag Credit agrees that the effect of the
Brand Label Purchase shall be ignored for purposes of determining compliance
with Subsection 7.6 of the Loan Agreement for 120 days from the closing of the
--------------
transaction.
5. Incorporation of Loan Agreement. The parties agree that this Amendment
-------------------------------
shall be an integral part of the Loan Agreement, that all of the terms set forth
therein are incorporated in this Amendment by reference, and that all terms of
this Amendment are incorporated into said Loan Agreement as of the date hereof.
All of the terms and provisions of the Loan Agreement which are not modified
herein shall remain in full force and effect. To the extent the terms of this
Amendment conflict with the terms of the Loan Agreement, the terms of this
Amendment shall control.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first written above.
HORIZON ORGANIC HOLDING
CORPORATION
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
------------------------------- -----------------------------------
Its: CFO Its: President
--------------------------- -------------------------------
(SEAL)
HORIZON ORGANIC DAIRY, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
------------------------------- -----------------------------------
Its: CFO Its: President
--------------------------- -------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
------------------------------- -----------------------------------
Its: CFO Its: President
---------------------------- -------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
IDAHO FARM, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
------------------------------- -----------------------------------
Its: CFO Its: President
--------------------------- -------------------------------
(SEAL)
FBS AG CREDIT, INC.
By: Xxxxxxx Xxxxxxx
------------------------------------
Its: V.P.
-----------------------------------
SECOND AMENDMENT TO LOAN AND SECURITY
-------------------------------------
AGREEMENT BETWEEN FBS AG CREDIT, INC.
-------------------------------------
and
---
HORIZON ORGANIC HOLDING CORPORATION
-----------------------------------
HORIZON ORGANIC DAIRY, INC.
---------------------------
HORIZON ORGANIC DAIRY, MARYLAND FARM, INC.
------------------------------------------
HORIZON ORGANIC DAIRY, IDAHO FARM, INC.
---------------------------------------
DATED JULY 15, 1997
-------------------
This Second Amendment to Loan and Security Agreement (this "Amendment") is
made as of the 6th day of April, 1998, between Horizon Organic Holding
Corporation, a Delaware corporation; Horizon Organic Dairy, a Colorado
corporation, Horizon Organic Dairy, Inc., Maryland Farm, Inc., a Colorado
corporation; Horizon Organic Dairy, Idaho Farm, Inc., a Colorado Corporation
(hereinafter referred to as "Borrower" whether one or more), and U.S. BANCORP AG
CREDIT, INC. f/k/a FBS Ag Credit, Inc., a Colorado corporation ("U.S.
Bancorp").
RECITAL
-------
The Borrower has requested that U.S. Bancorp make an additional loan to
Borrower, and U.S. Bancorp is willing to do so on the terms and conditions
herein contained.
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in the Loan and Security Agreement between Borrower and
U.S. Bancorp dated July 15, 1997 (the "Loan Agreement") and this Amendment, and
of any loans or extensions of credit or other financial accommodations
heretofore, now or hereafter made to or for the benefit of the Borrower by U.S.
Bancorp, the Borrower and U.S. Bancorp agree as follows:
1. A new Subsection 2.1.3, shall be added to the Loan Agreement as
----------------
follows:
2.1.3 Term Loan. U.S. Bancorp agrees to advance ("Term Loan
---------
Advance") to Borrower the principal sum of Two Million Dollars ($2,000,000)
("Term Loan"). The Term Loan shall be evidenced by and repayable in accordance
with the terms of Borrower's promissory note ("Term Note"), the form of which is
attached as Exhibit 2B.
----------
2. The following sentence shall be added to Subsection 2.4 of the Loan
--------------
Agreement:
The purpose of the Term Loan is to provide funds for the partial payment of
the Borrower's Juniper Valley Farm's organic brand and label acquisition (the
"Brand & Label Acquisition"), which will cost no more than $6,000,000.
3. In addition to the fees provided for by Subsection 2.5 of the Loan
--------------
Agreement, Borrower agrees to pay to U.S. Bancorp a commitment fee for the Term
Loan in the amount of Two Thousand Five Hundred Dollars ($2,500), payable on the
date of this Amendment.
4. The following sentence shall be added to Subsection 5.1 of the Loan
--------------
Agreement:
Borrower agrees to grant to U.S. Bancorp liens against Borrower's interests
in real property located in Xxxxxx County, Idaho and Kent County, Maryland,
which liens shall be evidenced by Borrower's mortgages (the "Mortgages"), copies
of which are attached as Exhibit 5A.
----------
5. A new Subsection 7.10, shall be added to the Loan Agreement as follows:
---------------
7.10 Equity and Subordinated Debt Commitments. On or before April 30,
----------------------------------------
1998, Borrower shall obtain equity and subordinated debt loan commitments not
less than $8,000,000 for repayment of the Term Loan on or before July 31, 1998,
for repayment of the balance of the purchase price of the Brand & Label
Acquisition and to replenish the Borrower's working capital.
6. Paragraph 4 of the First Amendment to the Loan Agreement shall be
amended to read in full as follows:
Notwithstanding the Affirmative and Negative Covenants in the Loan
Agreement that would prohibit the Brand Label Purchase, FBS Ag Credit hereby
consents to the Brand Label Purchase subject to the following conditions: (i)
the purchase price shall not exceed $6,000,000; and (ii) financing of the
purchase price shall be repaid within 120 days from the closing of the
transaction. FBS further consents to the execution and delivery of a Security
Agreement, a copy of which is attached hereto as Exhibit 5B, providing for
----------
certain purchase money security interests as set forth therein, together with
related UCC-1 financing statements. FBS Ag Credit agrees that the effect of the
Brand Label Purchase shall be ignored for purposes of determining compliance
with Subsection 7.6 of the Loan Agreement for 120 days from the closing of the
--------------
transaction.
7. Conditions to Advances; Documentation. The making of any Advance
-------------------------------------
provided for in this Amendment shall be conditioned upon the execution and/or
delivery of the following documents to U.S. Bancorp: (i) this Amendment, (ii)
the Term Note, (iii) the Mortgages, (iv) Secretary's Certificates of Board of
Directors' Resolutions authorizing the execution and delivery of this Amendment;
and (iv) a UCC-1 financing statement by Horizon Organic Holding Corporation for
filing in the appropriate County in the State of New York.
8. Incorporation of Loan Agreement. The parties agree that this Amendment
-------------------------------
shall be an integral part of the Loan Agreement, that all of the terms set forth
therein are incorporated in this Amendment by reference, and that all terms of
this Amendment are incorporated into said Loan Agreement as of the date hereof.
All of the terms and provisions of the Loan Agreement which are not modified
herein shall remain in full force and effect. To the extent the terms of this
Amendment conflict with the terms of the Loan Agreement, the terms of this
Amendment shall control.
2.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first written above.
HORIZON ORGANIC HOLDING CORPORATION
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
----------------------------- --------------------------------
Its: Assistant Secretary Its: President
------------------------ ------------------------------
(SEAL)
HORIZON ORGANIC DAIRY, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
----------------------------- ---------------------------------
Its: Assistant Secretary Its: President
------------------------ ------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
----------------------------- ----------------------------------
Its: Assistant Secretary Its: President
------------------------ ------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
IDAHO FARM, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Barnet X. Xxxxxxxx
----------------------------- ----------------------------------
Its: Assistant Secretary Its: President
-------------------------- -------------------------------
(SEAL)
U.S. BANCORP AG CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Its: V.P.
---------------------------------
3.
Exhibit 2B to
Loan and Security Agreement
Term Note
---------
Attached
4.
TERM NOTE
---------
$2,000,000 Denver, Colorado
April 6, 1998
FOR VALUE RECEIVED, the undersigned Horizon Organic Holding Corporation, a
Delaware corporation; Horizon Organic Dairy, Inc., a Colorado corporation,
Horizon Organic Dairy, Maryland Farm, Inc., a Colorado corporation; Horizon
Organic Dairy, Idaho Farm, Inc., a Colorado Corporation (hereinafter referred to
as "Borrower" whether one or more), promises to pay to the order of U.S. Bancorp
Ag Credit, Inc. f/k/a FBS Ag Credit, Inc., a Colorado corporation ("U.S.
Bancorp") at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or at
such other place as U.S. Bancorp may designate, in lawful money of the United
States of America, the principal sum Two Million Dollars ($2,000,000), together
with interest thereon, to be accrued each month ( accrued on the basis of a 360
day year, actual days elapsed) at a fluctuating rate per annum at all times two
percent (2%) above the Reference Rate as quoted by U.S. Bank National
Association, Minneapolis, Minnesota ("U.S. Bank"), which is a base rate that
U.S. Bank from time to time establishes and which serves as the basis upon
which effective rates of interest are calculated for those loans which make
reference thereto. Each change in the rate of interest hereunder shall become
effective on the date each Reference Rate change is announced within U.S. Bank.
The unpaid balance of this obligation at any time shall be the total
amounts advanced hereunder by U.S. Bancorp together with accrued and unpaid
interest, less the amount of payments made hereon by or for Borrower, which
balance may be endorsed hereon from time to time by U.S. Bancorp.
Interest accrued on this Note shall be payable on the 1st day of each
month, commencing May 1, 1998 by an automatic Line of Credit Advance under
Borrower's Line of Credit.
In addition to the repayment requirements imposed upon Borrower under
Borrower's Loan and Security Agreement with U.S. Bancorp (as the same may be
amended, replaced, restated, and/or supplemented from time to time, the "Loan
Agreement"), together with the agreements referred to therein, the principal
amount owing under this Note shall be payable on the Maturity Date as defined
below.
Interim payments made by Borrower either pursuant to the Loan Agreement or
as a voluntary prepayment shall be applied first to any costs or fees owing by
Borrower to U.S. Bancorp, shall be applied second to any interest payments owing
hereunder which are due and unpaid, shall be applied third to any outstanding
principal owing hereunder, and shall be applied fourth to interest accrued but
not yet due.
Anything herein or in the Loan Agreement to the contrary notwithstanding,
all principal and interest remaining unpaid on July 31, 1998 ("Maturity Date"),
shall be immediately due and payable, unless such maturity Date shall be
extended by U.S. Bancorp as set forth below.
Advances hereunder, to the total amount of principal sum stated above, may
be made by U.S. Bancorp at the oral or written request of Xxx Xxxxxxx or Barnet
X. Xxxxxxxx, who are authorized to request Advances and direct the disposition
of any such Advances until written notice of the revocation of such authority is
received by U.S. Bancorp at the address designated above. Any such Advances
shall be conclusively presumed to have been made to or for the benefit of
Borrower when U.S. Bancorp believes in good faith that such requests and
directions have been made by authorized persons, or when said Advances are
mailed to Borrower or deposited to the credit of the account of Borrower
regardless of the fact that persons other than those authorized hereunder may
have authority to draw against such account.
Borrower may, at any time, without additional premium or penalty, repay
part or the entire balance of principal or interest owing to U.S. Bancorp under
this Note.
Notwithstanding the provisions of this Note, U.S. Bancorp shall have the
option, in its sole discretion and without any obligation to do so, to make
Advances to Borrower (or for Borrower's account where authorized to do so under
the loan Agreement or related documents), in amounts in excess of those amounts
which would otherwise be prescribed by this Note. Such overadvances, when made
by U.S. Bancorp, shall become an obligation of Borrower and any surety of
Borrower's indebtedness to U.S. Bancorp under this Note to the same extent as
any other disbursements hereunder, and notwithstanding the fact that such
overadvances may create a principal balance owing to U.S. Bancorp in excess of
the face amount stated in this Note. U.S. Bancorp shall also have the option,
in its sole discretion and without any obligation to do so, to extend the
Maturity Date of the indebtedness hereunder. Such extensions shall be
immediately effective when made by U.S. Bancorp and notice thereof shall be
given by U.S. Bancorp as provided for in the Loan Agreement.
Should any Event of Default occur as provided for in the Loan Agreement,
which shall not have been cured, if a right to cure is provided for therein,
then at U.S. Bancorp's option, U.S. Bancorp may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable without
presentment, demand or notice of dishonor, all of which are expressly waived,
and U.S. Bancorp shall have no obligation to make any further Advances
hereunder.
Should more than one person or entity sign this Note, the obligations of
each signer shall be joint and several.
2.
This note shall be construed in accordance with the laws of the State of
Colorado.
HORIZON ORGANIC HOLDING
CORPORATION
By: By:
------------------------------ -----------------------------------
Its: Its:
--------------------------- --------------------------------
(SEAL)
HORIZON ORGANIC DAIRY, INC.
By: By:
------------------------------ -----------------------------------
Its: Its:
--------------------------- --------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
By: By:
------------------------------- -----------------------------------
Its: Its:
---------------------------- --------------------------------
(SEAL)
HORIZON ORGANIC DAIRY,
IDAHO FARM, INC.
By: By:
------------------------------- -----------------------------------
Its: Its:
---------------------------- --------------------------------
(SEAL)
3.
Exhibit 5A to
Loan and Security Agreement
Mortgages
---------
Attached
REAL ESTATE MORTGAGE
THIS MORTGAGE, made as of the 6th day of April, 1998, between Horizon
Organic Dairy, Maryland Farm, Inc., a Colorado corporation, whose address is c/o
Horizon Organic Holding Corporation, XX Xxx 00000, Xxxxxxx, XX 00000-0000
(hereinafter called "Mortgagor" whether one or more) and U.S. Bancorp Ag Credit,
Inc. f/k/a FBS Ag Credit, Inc., a Colorado corporation, 000 Xxxxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (hereinafter called "U.S. Bancorp").
WITNESSETH, THAT WHEREAS, the Mortgagor has executed a Loan and Security
Agreement with U.S. Bancorp dated July 15, 1997, as amended by; a Second
Amendment thereto of even date herewith, which Loan and Security Agreement may
be extended and modified from time to time hereafter, and which Agreement
entitles Mortgagor to borrow principal sums from U.S. Bancorp up to the amount
of Twelve Million Dollars ($12,000,000), which indebtedness is and shall be
evidenced by the Promissory Notes of Mortgagor, executed on this date and to be
executed from time to time hereafter, with interest thereon and payable
according to the terms thereof.
NOW, THEREFORE, said Mortgagor, in consideration of these premises, and to
secure up to but not exceeding Five Hundred Thousand Dollars ($500,000) (the
"Amount Secured") of the payment of said Promissory Notes, and any other sums
that may be added to the principal indebtedness under the terms of this
instrument, together with interest on the Amount Secured and any sums advanced
or expended by U.S. Bancorp in protection or enforcement of its interests
hereunder and to secure the prompt performance of all promises, conditions and
covenants related thereto, does hereby mortgage the hereinafter described real
property for the sum of and hereby warrants unto U.S. Bancorp, its successors
and assigns forever, all the following described property, lands and premises
situate in the County of Kent, State of Maryland, to-wit:
That real property described and set forth in Exhibit A attached hereto and
made a part hereof, together with all and singular the privileges and
appurtenances thereunto belonging, including, but not limited to, all
water, water rights, water privileges, ditches, ditch rights, ditch
privileges, rights of way, headgates, flumes, xxxxx, well equipment, pumps,
pumping equipment, pumping accessories, sprinkler systems, fences, corrals,
silos, elevators, storage bins and other storage facilities, warehouses,
buildings, building fixtures, and building equipment, along with all other
fixtures and equipment now or hereafter installed in, attached to or used
in connection with the premises herein described.
Mortgagor and U.S. Bancorp agree that the Amount Secured is based upon the
estimated fair market value of the property described herein after accounting
for permitted prior liens and is the maximum aggregate amount of principal to be
secured at any one time.
In addition to the real property herein described, this Mortgage covers the
rent, issues and profits derived and to be derived out of said real property.
It is stipulated and agreed, however, that under the foregoing assignment and
pledge of the rents, issues and profits from said real estate, collection of
rents will be enforced only upon delinquency of the Mortgagor in complying with
the terms and provisions of this Real Estate Mortgage, or in the event that
taxes assessed against said real estate become delinquent, U.S. Bancorp is
authorized and directed to assume the management and control of said property
and is hereby directed to let, lease and collect the rents therefrom without
Process of Law or Order of Court, and upon receipt of written request from U.S.
Bancorp, all tenants of and upon receipt of said premises hereby are directed to
pay promptly all rent as it falls due, at the current place designated for
payments in the said Loan and Security Agreement and Promissory Notes, without
further notice from the Mortgagor.
THE SAID MORTGAGOR EXPRESSLY COVENANTS AND AGREES:
To pay promptly when due, all taxes and assessments of every type or nature
levied or assessed against the premises and any claim, lien or encumbrance
against the premises which may be or may become prior to this Mortgage.
To maintain insurance on all improvements, fixtures and equipment on all
premises against loss by fire, extended coverage, and other hazards commonly
insured against by owners of like property, for the benefit of U.S. Bancorp, in
an amount of not less than the replacement value and in a company reasonably
acceptable to U.S. Bancorp. In the event that an insurer elects to pay a fire
or other hazard loss as damages in cash, rather than to repair, rebuild or
replace the property lost or damaged, U.S. Bancorp shall have the option to
apply the proceeds of such cash settlement of fire or other hazard loss upon the
sum hereby secured.
To waive all Homestead Exemptions and all other similar rights now vested
or to be acquired.
Except for existing encumbrances, not to alienate nor to encumber to the
prejudice of U.S. Bancorp, or commit, permit, or suffer any waste, impairment or
deterioration of said property and, regardless of natural depreciation, to keep
said property and the improvements thereon at all times in good condition and
repair, ordinary wear and tear excepted. That U.S. Bancorp shall have the right
to have their authorized representative or representatives enter upon and
inspect such premises at reasonable times, after notice of such proposed
inspection has been given to said Mortgagor, and in the event of any sale or
transfer of the title to the property herein described, such purchaser or new
owner shall be deemed to have assumed and agreed to pay the indebtedness owing
to U.S. Bancorp hereunder, whether or not the instrument evidencing such sale or
transfer expressly so provides, and this covenant shall run with said real
property and remain in full force and effect until said indebtedness is
liquidated.
That if there shall be any conveyance of any nature or change of ownership,
either legal or equitable, whether recorded or not, of the premises covered
hereby, U.S. Bancorp may declare the entire principal and all accrued interest
due and payable at once, at the sole option and election of U.S. Bancorp, and
foreclosure proceedings may be instituted as for any other default hereunder.
That in the event of the refusal or neglect by Mortgagor to keep said
property and the improvements thereon at all times in good repair, ordinary wear
and tear excepted, to pay promptly all taxes, fire and other hazard insurances
premiums, assessments, levies, liabilities, obligations, principal or interest
on this or any other encumbrance on said real property, or to perform any other
agreement, condition, stipulation, or covenant as herein provided, U.S. Bancorp
may procure such things to be done at Mortgagor's expense and may make any
reasonable expenditure or outlay thereon and add such amounts to the unpaid
principal indebtedness then due U.S. Bancorp and secured by the within Mortgage
of Real Estate.
That U.S. Bancorp shall have the right to file and defend suits at the
expense of Mortgagor and in their name for the recovery of damages to the within
described real property, or, at the expense of Mortgagor, to uphold the lien of
this encumbrance and preserve its right hereunder, but shall incur no personal
liability by their acts or omissions in managing, improving and conserving said
security hereunder, or otherwise.
That all sums expended as costs of such litigation, or advanced by U.S.
Bancorp, in any other contingency herein mentioned (including any attorney's
fees reasonably incurred), shall be repaid by Mortgagor upon demand, or as may
be expressly arranged with U.S. Bancorp, and such sums with interest at the rate
provided in and of the said Promissory Notes shall become so much additional
indebtedness secured by this Mortgage of Real Estate and shall be a lien on said
premises, prior to any right, title or interest attaching or accruing subsequent
to such advances and expenditures, and shall be paid out of the proceeds of the
sale of the property aforesaid, if not otherwise paid by the Mortgagor.
That if any portion of the encumbered property shall be condemned or taken
for public use under the power of eminent domain, or in the event that the
property shall be damaged either by public works or private acts, all damages
and compensation therefor, to the extent of the remaining indebtedness under
said Loan and Security Agreement, Promissory Notes and this Mortgage of Real
Estate, shall be paid to U.S. Bancorp and shall be applied upon the obligations
guaranteed.
Upon default by Mortgagors, under the terms of this Mortgage or the terms
of any other instrument or document evidencing the obligations secured hereby,
U.S. Bancorp shall have the power to sell the aforesaid real property in
accordance with Maryland law.
That in the event of foreclosure and sale hereunder, the Mortgagor agrees
to pay a reasonable attorney's fee for legal services rendered in such
foreclosure proceedings or suit.
In the event of foreclosure and sale hereunder, U.S. Bancorp shall retain
the right to pursue and receive judgment for any deficiency balance remaining
unpaid after foreclosure, and to exercise all other legal and equitable remedies
for the collection of the indebtedness which it is owed; it being expressly
understood and agreed that all rights and remedies of U.S. Bancorp are
cumulative and may be exercised in any order.
It is further expressly understood and agreed that in the event of
foreclosure and sale hereunder, the obligations of Mortgagor as set forth herein
shall continue and remain in full force and effect during any applicable
redemption period and during such period, the purchaser at the foreclosure sale
may procure such things be done and make any reasonable expenditure or outlay
thereon to fulfill said obligations, which amounts shall be an additional lien
on the premises covered hereby.
That in the event the ownership of the encumbered property, or any part
thereof, becomes vested in a person other than the Mortgagor, U.S. Bancorp may,
without notice to the Mortgagor, extend the time of payment of any or all of the
installments or other payments herein covenanted to be made, and may deal with
such new owner or owners with reference to this Mortgage of Real Estate and the
debt hereby secured in the same manner as with the Mortgagor, without in any way
vitiating or discharging the Mortgagor's liability hereunder, or upon the
indebtedness hereby secured.
That no waiver, express or implied, of the performance of any obligation,
agreement or covenant hereof, shall be deemed or taken to be a waiver of any
other term, condition, obligation, agreement or covenant hereof and the
indulgence of U.S. Bancorp to the Mortgagor or their grantees in not exercising
their option to declare the entire amount secured hereby to be due and payable
upon the happening of any one of the events or conditions herein described,
shall not, even though such indulgence be repeated or extended, be construed as
a waiver of the right of U.S. Bancorp to exercise such option at any time
thereafter and without notice to the Mortgagor.
This Mortgage constitutes a Security Agreement under the Uniform Commercial
Code of the State of Maryland (herein called the "Code") with respect to any
part of the premises which may or might now hereafter be deemed to be personal
property, fixtures or property other than real estate (for the purposes of this
paragraph called "Collateral"); all of the terms, provisions, conditions and
agreements contained in this Mortgage should pertain and apply to the Collateral
as fully and to the same extent as to any other property covered; and, the
following provisions of this paragraph shall not limit the generality or
applicability of any other provision of this Mortgage but shall be an addition
thereto.
It is further expressly understood and agreed that all covenants and
agreements herein described shall extend to and be binding upon the heirs,
executors, legal representatives, successors and assigns (voluntary and
involuntary by operation of law) of the respective parties hereto.
IN WITNESS WHEREOF, the said Mortgagor has hereunder set their hand and
seal the day and year first above written.
HORIZON ORGANIC DAIRY,
MARYLAND FARM, INC.
By: /s/ Barnet X. Xxxxxxxx By: /s/ Xxx Xxxxxxx
-------------------------------- -----------------------------------
Its: President Its: CFO
----------------------------- ---------------------------
(SEAL)
STATE OF COLORADO )
)ss.
COUNTY OF Boulder )
-------
On this the 22nd day of April , 19 98 , before me, the undersigned
------- --------- ------
officer, personally appeared Barnet Xxxxxxxx , known to me to be the person
-------------------
whose name is subscribed to the within instrument and acknowledged that he
executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
My commission expires: 6/23/2001
-----------
/s/ Xxxxxxxx Xxxxxxx
--------------------
Notary Public
ADDED PAGE
(Schedule A. continued)
Policy Number: 21 5192 106 00000023
--------------------
Owners
Policy Number:
---------------------
Loan
ALL that tract or parcel of land situate, lying and being in the Second
Election District of Kent County, Maryland, more particularly described in
accordance with a survey made by Xxxxxxx X. Xxxxx Inc., Registered Surveyor,
dated May, 1997, as follows:
BEGINNING FOR THE SAME at an iron rod set at the intersection of the
division line between the lands of Xxxxxx X. XxXxxxx et al. (see E.H.P. 195/9)
and the herein described lands with the southeasternmost side of U.S. Route 213
(see S.R.C. Plats 12672-12674).
THENCE, leaving said Route 213 and binding on the division line between the
XxXxxxx lands and the herein described lands South fifty one degrees eight
minutes thirty four seconds East (S 51(degree)08'34" E), a distance of two
thousand six hundred thirty five and 70/100 (2635.70) feet to a point in the
centerline of a stream at the intersection of the division line between the
XxXxxxx lands, lands of Xxxxx X. Xxxxxx Xx. et ux. (see M.L.M. 93/168) and the
herein described lands. Passing in transit an iron rod set a distance of two
thousand six hundred and 00/100 (2600.00) from the beginning thereof.
THENCE, leaving the XxXxxxx lands and binding on the division line between
the Xxxxxx lands and the herein described lands with the centerline of said
stream the following sixty seven (67) courses and distances: North eighty nine
degrees fifty minutes thirty eight seconds West (N 89(degree)50'38" W), a
distance of seventy and 92/100 (70.92) feet to a point, North seventy nine
degrees thirty nine minutes twenty two seconds West (N 79(degree)39'22" W), a
distance of forty four and 53/100 (44.53) feet to a point, North seventy degrees
twenty three minutes forty four seconds West (N 70(degree)23'44" W), a distance
of forty eight and 38/100 (48.38) feet to a point, South eighty nine degrees
fourteen minutes forty two seconds West (S 89(degree)14'42" W), a distance of
thirty five and 60/100 (35.60) feet to a point, North seventy six degrees twenty
minutes fifty four seconds West (N 76(degree)20'54" W), a distance of sixty
seven and 84/100 (67.84) feet to a point, North seventy degrees thirty minutes
forty one seconds West (N 70(degree)30'41" W), a distance of one hundred forty
and 72/100 (140.72) feet to a point, South fifty two degrees two minutes forty
six seconds West (S 52(degree)02'46" W), a distance of sixty two and 38/100
(62.38) feet to a point, South eighty eight degrees forty minutes three seconds
West (S 88(degree)40'03" W), a distance of fifty two and 60/100 (52.60) feet to
a point, South forty eight degrees nineteen minutes forty seven seconds West (S
48(degree)19'47" W), a distance of fifty and 29/100 (50.29) feet to a point,
South seventy six degrees forty one minutes one seconds West (S 76(degree)41'01"
W), a distance of sixty six and 96/100 (66.96) feet to a point, South sixty six
degrees thirty minutes forty seconds West
POLICY INSERT
Added Page
Reorder From No. 3237 (Rev. 2/89)
(S 66(degree)30'40" W), a distance of eighteen and 31/100 (18.31) feet to a
point, South fifty one degrees forty two minutes twenty five seconds West (S
51(degree)42'25" W), a distance of one hundred forty one and 82/100 (141.82)
feet to a point, South thirty three degrees eighteen minutes forty seconds West
(S 33(degree)18'40" W), a distance of ninety eight and 68/100 (98.68) feet to a
point, South twenty nine degrees fourteen minutes four seconds West (S
29(degree)14'04" W), a distance of one hundred ninety seven and 58/100 (197.58)
feet to a point, South thirty four degrees twelve minutes fifty three seconds
West (S 34(degree)12'53" W), a distance of eighty four and 28/100 (84.28) feet
to a point, South twelve degrees sixteen minutes ten seconds West (S
12(degree)16'10" W), a distance of eighty three and 64/100 (83.64) feet to a
point, South sixty seven degrees forty two minutes forty five seconds West (S
67(degree)42'45" W), a distance of two hundred thirty four and 92/100 (234.92)
feet to a point, South fifty five degrees thirty two minutes seven seconds West
(S 55(degree)32'07" W), a distance of one hundred and 67/100 (100.67) feet to a
point, South fifty five degrees forty three minutes fifty six seconds West (S
55(degree)43'56" W), a distance of one hundred eighteen and 92/100 (118.92) feet
to a point, South forty two degrees six minutes twenty seven seconds West (S
42(degree)06'27" W), a distance of one hundred and 82/100 (100.82) feet to a
point, South thirty two degrees forty four minutes seven seconds West (S
32(degree)44'07" W), a distance of seventy seven and 75/100 (77.75) feet to a
point, South twenty nine degrees one minutes four seconds West (S
29(degree)01'04" W), a distance of one hundred twenty seven and 68/100 (127.68)
feet to a point, South sixteen degrees fifty nine minutes forty eight seconds
West (S 16(degree)59'48" W), a distance of ninety nine and 83/100 (99.83) feet
to a point, South fifty five degrees thirty minutes nine seconds West (S
55(degree)30'09" W), a distance of one hundred twenty two and 22/100 (122.22)
feet to a point, South fifteen degrees three minutes forty six seconds West (S
15(degree)03'46" W), a distance of twenty six and 85/100 (26.85) feet to a
point, South fifteen degrees fifty two minutes thirty seven seconds East (S
15(degree)52'37" E), a distance of thirty eight and 52/100 (38.52) feet to a
point, South seventeen degrees forty eight minutes twenty nine seconds West (S
17(degree)48'29" W), a distance of forty and 98/100 (40.98) feet to a point,
South fifty eight degrees one minutes eight seconds East (S 58(degree)01'08" E),
a distance of sixty and 23/100 (60.23) feet to a point, South fifty one degrees
thirty three minutes two seconds West (S 51(degree)33'02" W), a distance of
ninety four and 93/100 (94.93) feet to a point, South eighty degrees zero
minutes forty eight seconds West (S 80(degree)00'48" W), a distance of thirty
nine and 44/100 (39.44) feet to a point, South fifty nine degrees eighteen
minutes six seconds West (S 59(degree)18'06" W), a distance of fifty two and
24/100 (52.24) feet to a point, South forty degrees forty two minutes thirty
eight seconds West (S 40(degree)42'38" W), a distance of thirty two and 73/100
(32.73) feet to a point, South twenty two degrees thirty nine minutes seventeen
seconds West (S 22(degree)39'17" W), a distance of ninety one and 67/100 (91.67)
feet to a point, South seventy three degrees sixteen minutes one seconds west (S
73(degree)16'01" W), a distance of one hundred one and 67/100 (101.67) feet to a
point, South eighty eight degrees forty six minutes forty nine seconds West (S
88(degree)46'49" W), a distance of fifty three and 61/100
(53.61) feet to a point, North sixty four degrees forty nine minutes fifty seven
seconds West (N 64(degree)49'57" W), a distance of nineteen and 38/100 (19.38)
feet to a point, South eighty nine degrees forty minutes thirty seven seconds
West (S 89(degree)40'37" W), a distance of twenty five and 48/100 (25.48) feet
to a point, South eighty degrees fifty two minutes thirty seven seconds West (S
80(degree)52'37" W), a distance of twenty (20.00) feet to a point, South sixty
seven degrees fifty four minutes fifty nine seconds West (S 67(degree)54'59" W),
a distance of sixteen and 37/100 (16.37) feet to a point, South twenty eight
degrees twelve minutes fifty three seconds West (S 28(degree)12'53" W), a
distance of sixty two and 3/100 (62.03) feet to a point, South seven degrees
twenty eight minutes four seconds East (S 07(degree)28'04" E), a distance of
thirty eight and 50/100 (38.50) feet to a point, South thirteen degrees fifty
two minutes fifty seven seconds West (S 13(degree)52'57" W), a distance of
thirty one and 77/100 (31.77) feet to a point, South thirty one degrees zero
minutes fifty eight seconds West (S 31(degree)00'58" W), a distance of eighty
two and 72/100 (82.72) feet to a point, South fourteen degrees eight minutes
thirty one seconds west (S 14(degree)08'31" W), a distance of sixty and 52/100
(60.52) feet to a point, South fifty two degrees twenty eight minutes forty two
seconds West (S 52(degree)28'42" W), a distance of fifty five and 45/100 (55.45)
feet to a point, South twenty seven degrees forty two minutes two seconds West
(S 27(degree)42'02" W), a distance of one hundred five and 55/100 (105.55) feet
to a point, South forty eight degrees thirty eight minutes thirty seconds West
(S 48(degree)38'30" W), a distance of sixty six and 57/100 (66.57) feet to a
point, South thirty one degrees twenty nine minutes thirty one seconds West (S
31(degree)29'31" W), a distance of one hundred nine and 41/100 (109.41) feet to
a point, South fifty one degrees twenty two minutes twenty seven seconds West (S
51(degree)22'27" W), a distance of fifty five and 1/100 (55.01) feet to a point,
South sixteen degrees fifty minutes four seconds West (S 16(degree)50'04" W), a
distance of forty four and 83/100 (44.83) feet to a point, South twenty six
degrees thirty six minutes ten seconds East (S 26(degree)36'10" E), a distance
of forty six and 35/100 (46.35) feet to a point, South twelve degrees twenty
minutes forty six seconds West (S 12(degree)20'46" W), a distance of twenty five
and 6/100 (25.06) feet to a point, South five degrees forty one minutes twenty
two seconds East (S 05(degree)41'22" E), a distance of eighty and 80/100 (80.80)
feet to a point, South four degrees three minutes thirty seven seconds East (S
04(degree)03'37" E), a distance of seventy three and 26/100 (73.26) feet to a
point, South twenty degrees fifty two minutes forty three seconds East (S
20(degree)52'43" E), a distance of seventy and 31/100 (70.31) feet to a point,
South zero degrees twenty minutes three seconds East (S 00(degree)20'03" E), a
distance of eighty four and 61/100 (84.61) feet to a point, South forty nine
degrees seventeen minutes fifty seconds West (S 49(degree)17'50" W), a distance
of eighty and 66/100 (80.66) feet to a point, South sixty two degrees thirty
minutes six seconds West (S 62(degree)30'06" W), a distance of seventy nine and
28/100 (79.28) feet to a point, South forty seven degrees forty minutes fifteen
seconds West (S 47(degree)40'15" W), a distance of fifty and 90/100 (50.90) feet
to a point, South sixty eight degrees twenty minutes twenty four seconds West (S
68(degree)20'24" W), a distance of thirty five and 5/100
(35.05) feet to a point, South thirty seven degrees twenty four minutes
seventeen seconds West (S 37(degree)24'17" W), a distance of thirty eight and
70/100 (38.70) feet to a point, South fifty four degrees fifty four minutes
forty five seconds West (S 54(degree)54'45" W), a distance of fifty six and
50/100 (56.50) feet to a point, South sixty four degrees thirty one minutes
forty four seconds West (S 64(degree)31'44" W), a distance of thirty nine and
75/100 (39.75) feet to a point, South sixty four degrees two minutes eleven
seconds West (S 64(degree)02'11" W), a distance of forty five and 67/100 (45.67)
feet to a point, South ten degrees thirty minutes thirty three seconds West (S
10(degree)30'33" W), a distance of ninety seven and 27/100 (97.27) feet to a
point, South forty three degrees nineteen minutes eighteen seconds West (S
43(degree)19'18" W), a distance of ninety and 27/100 (90.27) feet to a point,
South thirty three degrees thirty six minutes thirty one seconds West (S
33(degree)36'31" W), a distance of sixty two and 98/100 (62.98) feet to a point
and South thirty three degrees three minutes twenty four seconds West (S
33(degree)03'24" W), a distance of forty one and 70/100 (41.70) feet to a point
at the intersection of the division line between the Xxxxxx lands, lands of Xxxx
X. Xxxxxxxxxxx et el. (see E.H.P. 267/548) and the herein described lands.
THENCE, leaving said stream and the Xxxxxx lands and binding on the
division line between the Xxxxxxxxxxx lands and the herein described lands South
fifty two degrees forty two minutes fifty six seconds West (S 52(degree)42'56"
W), a distance of nine hundred eighteen and 9/100 (918.09) feet to a point on
the northeasternmost side of Xxxxxxx Xxxx Road (33' wide). Passing in transit an
iron pipe found a distance of nine hundred nine and 12/100 (909.12) feet from
the beginning thereof.
THENCE, leaving the Xxxxxxxxxxx lands and binding on the northeasternmost
side of said road the following four (4) courses and distances: with the arc of
a curve to the right an arc length of one hundred fifty three and 9/100 (153.09)
feet to the beginning point of a compound curve. Said curve having a radius
length of one thousand two hundred thirty three and 50/100 (1233.50) feet and
being scribed by a chord bearing of North fifty four degrees fifty two minutes
twenty five seconds West (N 54(degree)52'25" W), and a chord length of one
hundred fifty two and 99/100 (152.99) feet. Thence with a compound curve an arc
length of one hundred eighty six and 69/100 (186.69) feet to a point of
tangency. Said curve having a radius length of four hundred eighty three and
50/100 (483.50) feet and being scribed a chord bearing of North forty degrees
fifteen minutes twenty three seconds West (N 40(degree)15'23" W), and a chord
length of one hundred eighty five and 54/100 (185.54) feet. Thence North twenty
nine degrees eleven minutes forty seconds West (N 29(degree)11'40" W), a
distance of four hundred twenty six and 37/100 (426.37) feet to the beginning
point of a curve and thence with the arc of a curve to the left an arc length of
one hundred ten and 74/100 (110.74) feet to a point at the intersection of the
division line between the lands of Hedgewood Limited Partnership (see E.H.P.
118/131) and the herein described lands. Said curve having a radius length of
four hundred sixteen and 50/100 (416.50) feet and being
scribed by a chord bearing of North thirty six degrees forty eight minutes forty
one seconds West (N 36(degree)48'41" W), and a chord length of one hundred ten
and 41/100 (110.41) feet.
THENCE, leaving Xxxxxxx Xxxx Road and binding on the division line between
the lands of Hedgewood Limited Partnership and the herein described lands the
following two courses and distances: North forty two degrees fifty six minutes
forty seven seconds East (N 42(degree)56'47" E), a distance of seven hundred
twenty five and 31/100 (725.31) feet to an iron rod found. Passing in transit an
iron rod found a distance of seven hundred five and 31/100 (705.31) feet from
the end thereof, and thence North one degrees thirty nine minutes twenty seconds
East (N 01(degree)39'20" E), a distance of two thousand one hundred nineteen and
55/100 (2119.55) feet an iron rod found on a curve on the southeasternmost side
the aforementioned X.X. Xxxxx 000.
THENCE, leaving the Hedgewood Limited Partnership lands and binding on the
southeasternmost side of said road with the arc of a curve to the right an arc
length of seven hundred sixty five and 58/100 (765.58) feet to a point at the
intersection of the division line between the lands of Genfarm Partnership I
(see E.H.P. 211/279) and the herein described lands. Said curve having a radius
length of five thousand six hundred twenty seven and 58/100 (5627.58) feet and
being scribed a chord bearing of North thirty six degrees twelve minutes six
seconds East (N 36(degree)12'06" E), and a chord length of seven hundred sixty
four and 99/100 (764.99) feet.
THENCE, leaving said Route 213 and binding on the division line between the
lands of Genfarm Limited Partnership and the herein described lands the
following eleven (11) courses and distances: South fifty nine degrees three
minutes twelve seconds East (S 59(degree)03'12" E), a distance of eighty five
and 34/100 (85.34) feet to an iron pipe found, passing in transit an iron pipe
found a distance of 59/100 (0.59) feet from the beginning thereof, North eighty
nine degrees thirty two minutes thirty eight seconds East (N 89(degree)32'38"
E), a distance of two hundred twenty eight and 88/100 (228.88) feet to an iron
pipe found, South fifty four degrees twenty eight minutes forty two seconds East
(S 54(degree)28'42" E), a distance of three hundred seven and 31/100 (307.31)
feet to an iron rod set, South twenty seven degrees forty six minutes twenty two
seconds East (S 27(degree)46'22" E), a distance of three hundred three and
78/100 (303.78) feet to an iron rod set, South forty seven degrees ten minutes
forty two seconds East (S 47(degree)10'42" E), a distance of four hundred
fifteen and 44/100 (415.44) feet to an iron rod set, North forty two degrees
twenty six minutes fifty eight seconds East (N 42(degree)26'58" E), a distance
of three hundred fifty five and 66/100 (355.66) feet to an iron rod set, North
thirty eight degrees fifty minutes forty eight seconds East (N 38(degree)50'48"
E), a distance of four hundred fourteen and 64/100 (414.64) feet to an iron pipe
found, North forty eight degrees seven minutes two seconds West (N
48(degree)07'02" W), a distance of three hundred seven and 62/100 (307.62) feet
to an iron pipe found, North twenty eight degrees forty one minutes eighteen
seconds East (N 28(degree)41'18" E), a distance of four
hundred three and 83/100 (403.83) feet to an iron pipe found, North twenty four
degrees thirty three minutes forty two seconds West (N 24(degree)33'42" W), a
distance of two hundred seventy and 94/100 (270.94) feet to an iron pipe found
and North forty nine degrees seventeen minutes two seconds West (N
49(degree)17'02" W), a distance of six hundred thirty one and 74/100 (631.74)
feet to an iron rod set on the southeasternmost side of aforementioned X.X.
Xxxxx 000.
THENCE, leaving the lands of Genfarm Partnership I and binding on the
southeasternmost side of said Route 213 North thirty nine degrees twelve minutes
sixteen seconds East (N 39(degree)12'16" E), a distance of two hundred twenty
and 84/100 (220.84) feet to the place of beginning. Containing in all one
hundred sixty two and 857/1000 (162.857) acres of land more or less, as surveyed
by Xxxxxxx X. Xxxxx Inc. in May 1997, a plat of which is recorded among the Plat
Records for Kent County aforesaid, in Plat Book N.L.M. No. 2, page 63.
BEING the same lands conveyed by Fair Hill Farms Inc., unto the said
Horizon Organic Dairy, Maryland Farm, Inc., a Colorado corporation, by deed
dated July 18, 1997, and recorded among the Land Records of Kent County,
Maryland in Liber M.L.M. No. 123, folio 286, etc.
Schedule A (Continued)
Legal Description
BEING KNOWN AND DESIGNATED AS a 31.432 acre parcel of land as shown on Plat
entitled "MINOR SUBDIVISION PLAT, XXXXX X. XXX LANDS, 2ND DISTRICT, KENT COUNTY,
MD" dated October 1985 by Xxxxxxx X. Xxxxxx, reg. surveyor, and recorded among
the Land Records of Kent County, Maryland in Plat book EHP No. 2, folio 196.
BEING the same property conveyed unto Horizon Organic Dairy, Maryland Farm,
Inc., a Colorado corporation from Genfarm Partnership I, a Pennsylvania limited
partnership, by deed dated August 7, 1997, and recorded among the Land Records
of Kent County, Maryland August 28, 1997 in Liber 0125, Folio 363.
Case Number 96-1074 Policy Number 000-00-000000
ADDED PAGE
(Schedule A. continued)
Policy Number: 21 5192 106 00000029
--------------------
Owners
Policy Number:
----------------------
Loan
ALL that piece or parcel of land situate, lying and being in the Second
Election District of Kent County, Maryland, situated near the public road
leading from Urieville to Chesterville adjoining the lands now or formerly of
Xxxxx X. Xxxxxx, Xxxxxx Crew, Xxxx X. Xxxxxxx heirs and others and contained
within the following metes and bounds, courses and distances, to wit:
BEGINNING for the same at a point on a line with the lands of the Xxxxxxx
heirs where the "Xxxxxx Xxxx" Farm formerly belonging to X. X. Xxxx and
afterwards purchased by Xxxxx Xxxxxxxx, and the lands hereby intended to be
conveyed join said Xxxxxxx lands and running from thence three (3) courses with
said "Xxxxxx Xxxx" North 87 degrees West 17.92 perches, North 64 3/4 degrees
West 46.40 perches, South 27 degrees West 100.76 perches to the lands now or
formerly of Xxxxx X. Xxxxxx, thence three (3) courses with said Xxxxxx lands
North 44 3/4 degrees West 32.36 perches, North 43 3/4 degrees West 244.24
perches, North 35 degrees West 2.48 perches to the lands formerly belonging to
Xxxxxxxx Xxxxxxx, thence two (2) courses with the said Redmile lands North
49 1/2 degrees East 3.84 perches, North 78 1/4 degrees East 135.80 perches to
the lands formerly of X. X. Xxxxxx but now owned by said Xxxxx Xxxxxx; thence
one (1) course with the last mentioned lands South 77 1/4 degrees East 14.28
perches to the lands now or formerly of Xxxxxx Crew; thence three (3) courses
with said mentioned lands North 85 degrees East 59.36 perches; North 75 1/4
degrees East 42.76 perches; North 78 1/2 degrees East 31.68 perches to the land
formerly of M.E. Xxxx; thence eight (8) courses with said last mentioned lands,
as follows: South 30 1/4 degrees East 11.72 perches; South 24 1/4 degrees East
9.68 perches; South 36 1/4 degrees East 17.4 perches; South 11 degrees East 9
perches; South 6 degrees West 19.84 perches; South 22 1/4 degrees East 2.12
perches; thence South 45 3/4 degrees East 14.64 perches; South 64 degrees East
4.44 perches to the lands of the said Xxxx X. Xxxxxxx heirs; thence with the
said last mentioned lands of the said Xxxx X. Xxxxxxx heirs the six (6)
following courses and distances: South 4 1/2 degrees West 24 perches; South 10
degrees West 18.88 perches; South 3 1/2 degrees West 31.12 perches; South 17
degrees West 8.56 perches; South 28 degrees West 6.6 perches; South 15 1/2
degrees West 19.8 perches to the aforesaid beginning point, containing 271
acres, 1 xxxx and 21 perches of land, more or less.
TOGETHER with the Right of Way or Road as now laid down and used, through
the Farm sold by Xxxxxxx X. Xxxxxxxx, Trustee to Xxxxx Xxxxxxxx, as an outlet
from the Farm hereby conveyed to the Urieville Road.
TOGETHER WITH and SUBJECT to the provisions of a Cross Easement Agreement
dated April 1, 1985, and recorded among the Land
POLICY INSERT
Added Page
Reorder Form No. 3237 (Rev. 2/89)
Records for Kent County, Maryland, in Liber E.H.P. No. 179, folio 121.
BEING the same tract or parcel of land conveyed by Xxxxxxx X. Xxxxxxx unto
the said Horizon Organic Dairy, Maryland Farm, Inc., a Colorado corporation, by
Deed dated October 27th, 1997, and recorded among the Land Records for Kent
County, Maryland, in Liber M.L.M. Xx. 000, xxxxx 000, xxx.
XXXX XXXXXX MORTGAGE
--------------------
THIS MORTGAGE, made as of the 6th day of April, 1998, between Horizon
Organic Dairy, Idaho Farm, Inc. f/k/a Aurora Dairy Corporation of Idaho, a
Colorado Corporation, whose address is c/o Horizon Organic Holding Corporation,
XX Xxx 00000, Xxxxxxx, XX 00000-0000 (hereinafter called "Mortgagor" whether one
or more) and U.S. Bancorp Ag Credit, Inc. f/k/a FBS Ag Credit, Inc., a Colorado
corporation, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000
(hereinafter called "U.S. Bancorp").
WITNESSETH, THAT WHEREAS, the Mortgagor has executed a Loan and Security
Agreement with U.S. Bancorp dated July 15, 1997, as amended by; a Second
Amendment thereto of even date herewith, which Loan and Security Agreement may
be extended and modified from time to time hereafter, and which Agreement
entitles Mortgagor to borrow principal sums from U.S. Bancorp according to the
terms thereof, which indebtedness is and shall be evidenced by the Promissory
Notes of Mortgagor, executed on this date and to be executed from time to time
hereafter, with interest thereon and payable according to the terms thereof.
NOW, THEREFORE, said Mortgagor, in consideration of these premises, and to
secure in part prompt payment of said Promissory Notes, and any other sums that
may be added to the principal indebtedness under the terms of this instrument,
and to secure the prompt performance of all promises, conditions and covenants
related thereto, does hereby mortgage the hereinafter described real property
for the sum of Twelve Million Dollars ($12,000,000) and hereby warrants unto
U.S. Bancorp, its successors and assigns forever, all the following described
property, lands and premises situate in the County of Xxxxxx, State of Idaho,
to-wit:
That real property described and set forth in Exhibit A attached hereto and
made a part hereof, together with all and singular the privileges and
appurtenances thereunto belonging, including, but not limited to, all
water, water rights, water privileges, ditches, ditch rights, ditch
privileges, rights of way, headgates, flumes, xxxxx, well equipment, pumps,
pumping equipment, pumping accessories, sprinkler systems, fences, corrals,
silos, elevators, storage bins and other storage facilities, warehouses,
buildings, building fixtures, and building equipment, along with all other
fixtures and equipment now or hereafter installed in, attached to or used
in connection with the premises herein described.
In addition to the real property herein described, this Mortgage covers the
rent, issues and profits derived and to be derived out of said real property.
It is stipulated and agreed, however, that under the foregoing assignment and
pledge of the rents, issues and profits from said real estate, collection of
rents will be enforced only upon delinquency of the Mortgagor in complying with
the terms and provisions of this Real Estate Mortgage, or in the event that
taxes assessed against said real estate become delinquent U.S. Bancorp is
authorized and directed to assume the management and control of said property
and is hereby directed to let, lease and collect the rents therefrom without
Process of Law or Order of Court, and upon receipt of written request from U.S.
Bancorp, all tenants of and upon receipt of said premises hereby are directed to
pay promptly all rent as it falls
POLICY INSERT
Added Page
Reorder Form No. 3237 (Rev. 2/89)
due, at the current place designated for payments in the said Loan and Security
Agreement and Promissory Notes, without further notice from the Mortgagor.
THE SAID MORTGAGOR EXPRESSLY COVENANTS AND AGREES:
To pay promptly when due, all taxes and assessments of every type or nature
levied or assessed against the premises and any claim, lien or encumbrance
against the premises which may be or may become prior to this Mortgage.
To maintain insurance on all improvements, fixtures and equipment on all
premises against loss by fire, extended coverage, and other hazards commonly
insured against by owners of like property, for the benefit of U.S. Bancorp, in
an amount of not less than the replacement value and in a company reasonably
acceptable to U.S. Bancorp. In the event that an insurer elects to pay a fire
or other hazard loss as damages in cash, rather than to repair, rebuild or
replace the property lost or damaged U.S. Bancorp shall have the option to apply
the proceeds of such cash settlement of fire or other hazard loss upon the sum
hereby secured.
To waive all Homestead Exemptions and all other similar rights now vested
or to be acquired.
Except for existing encumbrances, not to alienate nor to encumber to the
prejudice of U.S. Bancorp, or commit, permit, or suffer any waste, impairment or
deterioration of said property and, regardless of natural depreciation, to keep
said property and the improvements thereon at all times in good condition and
repair, ordinary wear and tear excepted. That U.S. Bancorp shall have the right
to have their authorized representative or representatives enter upon and
inspect such premises at reasonable times, after notice of such proposed
inspection has been given to said Mortgagor, and in the event of any sale or
transfer of the title to the property herein described, such purchaser or new
owner shall be deemed to have assumed and agreed to pay the indebtedness owing
to U.S. Bancorp hereunder, whether or not the instrument evidencing such sale or
transfer expressly so provides, and this covenant shall run with said real
property and remain in full force and effect until said indebtedness is
liquidated.
That if there shall be any conveyance of any nature or change of ownership,
either legal or equitable, whether recorded or not, of the premises covered
hereby, U.S. Bancorp may declare the entire principal and all accrued interest
due and payable at once, at the sole option and election of U.S. Bancorp, and
foreclosure proceedings may be instituted as for any other default hereunder.
That in the event of the refusal or neglect by Mortgagor to keep said
property and the improvements thereon at all times in good repair, ordinary wear
and tear excepted, to pay promptly all taxes, fire and other hazard insurance
premiums, assessments, levies, liabilities, obligations, principal or interest
on this or any other encumbrance on said real property, or to perform any other
agreement, condition, stipulation, or covenant as herein provided, U.S. Bancorp
may procure such
things to be done at Mortgagor's expense and may make any reasonable expenditure
or outlay thereon and add such amounts to the unpaid principal indebtedness then
due U.S. Bancorp and secured by the within Mortgage of Real Estate.
That U.S. Bancorp shall have the right to file and defend suits at the
expense of Mortgagor and in their name for the recovery of damages to the within
described real property, or, at the expense of Mortgagor, to uphold the lien of
this encumbrance and preserve its right hereunder, but shall incur no personal
liability by their acts or omissions in managing, improving and conserving said
security hereunder, or otherwise.
That all sums expended as costs of such litigation, or advanced by U.S.
Bancorp, in any other contingency herein mentioned (including any attorney's
fees reasonably incurred), shall be repaid by Mortgagor upon demand, or as may
be expressly arranged with U.S. Bancorp, and such sums with interest at the rate
provided in and of the said Promissory Notes shall become so much additional
indebtedness secured by this Mortgage of Real Estate and shall be a lien on said
premises, prior to any right, title or interest attaching or accruing subsequent
to such advances and expenditures, and shall be paid out of the proceeds of the
sale of the property aforesaid, if not otherwise paid by the Mortgagor.
That if any portion of the encumbered property shall be condemned or taken
for public use under the power of eminent domain, or in the event that the
property shall be damaged either by public works or private acts, all damages
and compensation therefor, to the extent of the remaining indebtedness under
said Loan and Security Agreement, Promissory Notes and this Mortgage of Real
Estate, shall be paid to U.S. Bancorp and shall be applied upon the obligations
guaranteed.
Upon default by Mortgagors, under the terms of this Mortgage or the terms
of any other instrument or document evidencing the obligations secured hereby,
U.S. Bancorp shall have the power to sell the aforesaid real property in
accordance with Idaho law.
That in the event of foreclosure and sale hereunder, the Mortgagor agrees
to pay a reasonable attorney's fee for legal services rendered in such
foreclosure proceedings or suit.
In the event of foreclosure and sale hereunder, U.S. Bancorp shall retain
the right to pursue and receive judgment for any deficiency balance remaining
unpaid after foreclosure, and to exercise all other legal and equitable remedies
for the collection of the indebtedness which it is owed; it being expressly
understood and agreed that all rights and remedies of U.S. Bancorp are
cumulative and may be exercised in any order.
It is further expressly understood and agreed that in the event of
foreclosure and sale hereunder, the obligations of Mortgagor as set forth herein
shall continue and remain in full force and effect during any applicable
redemption period and during such period, the purchaser at the foreclosure sale
may procure such things be done and make any reasonable expenditure or outlay
thereon to fulfill said obligations, which amounts shall be an additional lien
on the premises covered hereby.
That in the event the ownership of the encumbered property, or any part
thereof, becomes vested in a person other than the Mortgagor, U.S. Bancorp may,
without notice to the Mortgagor, extend the time of payment of any or all of the
installments or other payments herein covenanted to be made, and may deal with
such new owner or owners with reference to this Mortgage of Real Estate and the
debt hereby secured in the same manner as with the Mortgagor, without in any way
vitiating or discharging the Mortgagor's liability hereunder, or upon the
indebtedness hereby secured.
That no waiver, express or implied, of the performance of any obligation,
agreement or covenant hereof, shall be deemed or taken to be a waiver of any
other term, condition, obligation, agreement or covenant hereof and the
indulgence of U.S. Bancorp to the Mortgagor or their grantees in not exercising
their option to declare the entire amount secured hereby to be due and payable
upon the happening of any one of the events or conditions herein described,
shall not, even though such indulgence be repeated or extended, be construed as
a waiver of the right of U.S. Bancorp to exercise such option at any time
thereafter and without notice to the Mortgagor.
This Mortgage constitutes a Security Agreement under the Uniform Commercial
Code of the State of Idaho (herein called the "Code") with respect to any part
of the premises which may or might now hereafter be deemed to be personal
property, fixtures or property other than real estate (for the purposes of this
paragraph called "Collateral"); all of the terms, provisions, conditions and
agreements contained in this Mortgage should pertain and apply to the Collateral
as fully and to the same extent as to any other property covered; and, the
following provisions of this paragraph shall not limit the generality or
applicability of any other provision of this Mortgage but shall be an addition
thereto.
It is further expressly understood and agreed that all covenants and
agreements herein described shall extend to and be binding upon the heirs,
executors, legal representatives, successors and assigns (voluntary and
involuntary by operation of law) of the respective parties hereto.
IN WITNESS WHEREOF, the said Mortgagor has hereunder set their hand and
seal the day and year first above written.
HORIZON ORGANIC DAIRY, IDAHO
FARM, INC.
By: By:
------------------------------- ------------------------------------
Its: Its:
---------------------------- ----------------------------
(SEAL)
STATE OF )
)ss.
County Of )
On this the ______ day of __________, 19___, before me, the undersigned
officer, personally appeared ____________________, known to me to be the person
whose name is subscribed to the within instrument and acknowledged that he
executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
My commission expires:
-----------------------------
Notary Public
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 1/2 E 1/2 of Section 17, and the NW 1/4 NW 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(degree)44'20" West, 1,320.16 feet to the Northwest corner
of said E 1/2 E 1/2 Section 17;
Thence South 0(degree)07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2 E 1/2 Section 17;
Thence North 89(degree)43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0(degree)06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89(degree)46'14" East, 945.00 feet parallel with the Northerly
boundary of said Section 16;
Thence North 0(degree)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(degree)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 1/2 NE 1/4; SE 1/4 NE 1/4; NE 1/2 NE 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 1/2 NE 1/4; S 1/2 NE 1/4; SE 1/4; SE 1/4 NW 1/4; E
1/2 SW 1/4;
Section 20: E 1/2 NE 1/4; N 1/2 SE 1/4; NE 1/4 SW 1/4;
Page 2 of 5
EXCEPTING THEREFROM a tract of land in the E 1/2 E 1/2, Section 17 and
NW 1/4 NW 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(degree)44'20" West, 1,320.16 feet to the Northwest
corner of said E 1/2 E 1/2, Section 17;
Thence South 0(degree)07'52" East, 3,201.08 feet along the Westerly
boundary of said E 1/2 E 1/2, Section 17;
Thence North 89(degree)43'25" East, 1,318.92 feet to a point on the
Easterly boundary of said Section 17;
Thence North 0(degree)06'32" West, 3,060.73 feet along the Easterly
boundary of said Section 17;
Thence North 89(degree)46'14" East, 945.00 feet parallel with the
Northerly boundary of said Section 16;
Thence North 0(degree)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(degree)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 1/4 NE 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 1/4 SW 1/4; S 1/2 SE 1/4;
Section 21: S 1/2 SW 1/4; SW 1/4 SE 1/4;
Section 28: All of Section 28;
Section 29: E 1/2 NE 1/4; SE 1/4;
Section 32: N 1/2 NE 1/4;
Page 3 of 5
Section 33: N 1/2 NW 1/4; SE 1/4 NW 1/4; NE 1/4;
EXCEPTING THEREFROM that part of the SE 1/4 SE 1/4 of Section 28,
Township 9 South, Range 21, East of the Boise Meridian, Xxxxxx County
Idaho, described as follows:
Commencing an the Southeast corner of said Section 28;
Thence North 0(degree)02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79(degree)00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79(degree)00'21" West, 154.50 feet;
Thence North 10(degree)59'39" West, 55.00 feet;
Thence North 79(degree)00'21" East, 154.50 feet;
Thence South 10(degree)59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
AND EXCEPTING THEREFROM that portion of the NE 1/4 SE 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 1/4 SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4 SE 1/4; 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4 SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4 SE 1/4;
Thence North along the East boundary of the NE 1/4 SE 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 1/4 NW 1/4; NW 1/4 SW 1/4;
Section 18: N 1/2 SE 1/4; E 1/2 SW 1/4; SW 1/4 SE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 22: SE 1/4 SW 1/4; S 1/2 SE 1/4;
Page 4 of 5
Section 27: E 1/2; NW 1/4 SW 1/4; S 1/2 NW 1/4; NW 1/4 NW 1/4; S 1/2 SW 1/4;
NE 1/4 SW 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(degree)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(degree)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 9 South, 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 1/2 NW 1/4; N 1/2 NE 1/4;
PARCEL XX. 0
XXXXXXXX 0 XXXXX, XXXXX 00, XXXX OF THE BOISE MERIDIAN, XXXXXX COUNTY, IDAHO
Section 27: NE 1/4 NW 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 1/4 SE 1/4, described as follows:
Commencing at the Southeast corner of said Section 28;
Thence North 0(degree)02' West along the East boundary of said Section
28, 395.59 feet;
Thence South 79(degree)00'21" West, 485.62 feet to THE TRUE POINT OF
BEGINNING;
Thence continuing South 79(degree)00'21 West, 154.50 feet;
Thence North 10(degree)59'39" West, 55.00 Feet;
Thence North 79(degree)00'21" East, 154.50 feet;
Page 5 of 5
Thence South 10(degree)59'39" East, 55.00 feet to THE TRUE POINT OF
BEGINNING.
AND
That portion of the NE 1/4 SE 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 1/4 SE 1/4, 909.75 feet;
Thence South parallel to the East boundary of the NE 1/4 SE 1/4, 909.75
feet;
Thence East parallel to the North boundary of the NE 1/4 SE 1/4, 909.75
feet to a point on the East boundary of the NE 1/4 SE 1/4;
Thence North along the East boundary of the NE 1/4 SE 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: E 1/2 SE 1/4;
Section 33: N 1/2 SW 1/4; S 1/2 NW 1/4; S 1/2 NE 1/4;
EXCEPTING THEREFROM the highway.
Exhibit 5B to
Loan and Security Agreement
Permitted Security Agreement
----------------------------
Attached
SECURITY AGREEMENT
------------------
This Security Agreement dated as of April 8, 1998 ("Security Agreement"),
is made by and between Horizon Organic Holding Corporation, a Delaware
corporation, as debtor ("Debtor"), having its principal place of business at
0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, in favor of Worcester Creameries
Corp., the successor by merger to Mountainside Farms, Inc., a New York
corporation, as secured party ("Secured Party"), having its principal place of
business at 000-00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000.
Recitals
--------
A. Secured Party has agreed to make an extension of credit to Debtor in
the principal amount of $4,000,000 (the "Loan"), evidenced by a Secured
Promissory Note in the principal amount of $4,000,000, dated of even date
herewith (the "Note") in connection with the Asset Purchase Agreement of even
date herewith between Debtor, as purchaser, and Secured Party, as seller (the
"Purchase Agreement").
B. Secured Party is willing to make the Loan to Debtor, but only upon the
condition, among others, that Debtor shall have executed and delivered to
Secured Party this Security Agreement.
Agreement
---------
NOW, THEREFORE, in order to induce Secured Party to make the Loan and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Debtor hereby
represents, warrants, covenants and agrees with and for the benefit of Secured
Party, as follows:
I. Unless otherwise defined herein, the following terms shall have the meanings
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):
"Collateral" means the personal property of Debtor purchased from Secured
Party pursuant to the Purchase Agreement, as more particularly defined in
Exhibit A hereto.
"Contracts" has the meaning set forth on Exhibit A hereto.
"Event of Default" shall have the meaning set forth in paragraph 3 of the
Note, and shall also include breach of the terms of this Agreement.
"Proceeds" shall have the meaning set forth in the UCC.
"Secured Obligations" shall mean the obligations of Debtor under the Note,
this Security Agreement and the Purchase Agreement.
"Trademark" has the meaning set forth on Exhibit A hereto.
1.
"UCC" shall mean the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Secured Party's security interest in any Collateral
(as hereinafter defined) is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York, the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment, perfection of priority and
for purposes of definitions related to such provisions.
II. To secure the prompt and complete payment and performance when due
(whether as stated maturity, by acceleration or otherwise) of all the Secured
Obligations and in order to induce Secured Party to cause the loan to be made,
Debtor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers
to Secured Party, and hereby grants to Secured Party, a security interest in all
of Debtor's right, title and interest in, to and under all of the Collateral.
III. A. Notwithstanding anything contained in this Security Agreement to
the contrary, Debtor expressly agrees that it shall remain liable under each of
its Contracts to observe and perform all of the conditions and obligations to be
observed and performed by its thereunder and that it shall perform all of its
duties and obligations thereunder, all in accordance with and pursuant to the
terms and provisions of each such Contract. Secured Party shall not have any
obligation or liability under any Contract by reason of or arising out of this
Security Agreement or the granting to Secured Party of a lien therein or the
receipt by Secured Party of any payment relating to any Contract pursuant
hereto, nor shall Secured Party be required or obligated in any manner to
perform or fulfill any of the obligations of Debtor under or pursuant to any
Contract, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which may be entitled at any time or times.
(a) Secured Party may at any time, upon the occurrence and during the
continuation of any Event of Default, after first notifying Debtor of its
intention to do so, notify parties to the Contracts that the right, title and
interest of Debtor in and under such Contract have been assigned to Secured
Party and that payments shall be made directly to Secured Party. Upon the
request of Secured Party, Debtor shall so notify such parties to such Contracts
of Secured Party's interest. Upon the occurrence and during the continuation of
an Event of Default or potential Event of Default, Secured Party may, in its
name, or in the name of others, communicate with such parties to such Contracts
to verify with such parties, to the Secured Party's satisfaction, the existence,
amount and terms of any such Contracts.
IV. Debtor hereby represents and warrants to Secured Party that:
(b) Except for the security interest in favor of U.S. Bancorp Ag
Credit, Inc., f/k/a FBS Ag Credit, Inc., a Colorado corporation ("Bank"),
pursuant to that certain Loan and Security Agreement dated as of July 15, 1997,
as amended, by and between Debtor, Horizon Organic Dairy, a Colorado
corporation, Horizon Organic Dairy, Maryland Farm, Inc., a Colorado corporation,
Horizon Organic Dairy, Idaho Farm, Inc., a Colorado corporation, and Bank, which
security interest is subordinate to the security interest granted hereunder by
virtue of the Agreement between Bank and Secured Party of even date herewith
(the "Bank Security
2.
Interest"), and except for the security interest granted to Secured Party under
this Security Agreement, Debtor is the sole legal and equitable owner of each
item of the Collateral, having good, marketable and insurable title thereto,
free and clear of any and all liens, security interests and encumbrances.
(c) Debtor has granted Secured Party a valid first priority security
interest in the Collateral. Upon the timely filing of a financing statement on
form UCC-1 in the proper offices in the appropriate jurisdictions, Secured Party
will have a perfected first priority security interest in all of the Collateral.
Except for the Bank Security Interest, no effective security agreement,
financing statement, equivalent security or lien instrument or continuation
statement covering all or any part of the Collateral exists, except such as may
have been filed by Debtor in favor of Secured Party, on behalf of itself and
pursuant to this Security Agreement.
(d) Debtor has the unqualified right to enter into this Agreement and
to perform its terms. This Agreement is the binding obligation of Debtor,
enforceable in accordance with its terms.
V. Debtor covenants and agrees with Secured Party that from and after the
date of this Agreement and until the Secured Obligations have been performed and
paid in full:
(e) The Debtor is and will remain the sole and exclusive owner of the
entire right, title and interest in and to the Collateral, free and clear of any
liens, charges, claims, rights and encumbrances, including, without limitation,
pledges, assignments, licenses, registered user agreements and covenants by the
Debtor not to xxx third persons;
(f) The Debtor will maintain the quality of the Milk Products (as
defined in the Purchase Agreement) associated with the Trademark, at a level
consistent with the quality at the time of this Agreement;
(g) The Debtor will continue to use for the duration of this Agreement,
required statutory notice in connection with its use of the Trademark;
(h) The Debtor shall not abandon the Trademark without Secured Party's
prior written consent. Debtor will not do any act, or omit to do any act,
whereby the Trademark or any registration or application appurtenant thereto,
may become abandoned, invalidated, unenforceable, avoided, avoidable, or will
otherwise diminish in value, and shall notify Secured Party immediately if it
knows of any reason or has reason to know of any ground under which this result
may occur. The Debtor shall take appropriate action at its expense to halt the
infringement of the Trademark;
(i) Debtor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, which Secured Party (and
its employees and agents) may from time to time inspect and photocopy;
(j) Debtor agrees that it will not, without the prior written consent
of Secured Party, consent to, permit or suffer to occur any amendment,
termination, waiver, consent or other modification of any of the Collateral
adversely affecting the interest of the Secured Party therein, and that, upon
the occurrence and continuance of an Event of Default, the Secured Party, to the
3.
exclusion of the Debtor, may directly exercise all the power and authority to
give or withhold consents, grant any waivers or approvals or make any
determinations under the Purchase Agreement, this Agreement or any other related
document of give any notice thereunder in the interests of the Secured Party
(and with no obligation to the Debtor); and
(k) Debtor will not take any steps to enforce or exercise any of these
rights or remedies under or in respect of any of the Collateral materially
adversely affecting the interest of Secured Party therein without the prior
written consent of Secured Party, and will not take such actions and make such
requests with respect to the Collateral which would adversely affect the
interest of Secured Party under the Purchase Agreement, this Agreement or any
other instruments contemplated hereby or thereby. In addition, Debtor hereby
irrevocably agrees not to exercise and not to permit any of its affiliates to
exercise, and hereby waives any right which it may now or hereafter have to
assert, any set off or counterclaim against or with respect to any of the
Collateral.
VI. Until all of the Secured Obligations have been satisfied in full,
Debtor shall not sell or transfer the Trademark or any interest therein, grant
or assign any security or other interest in the Trademark, or enter into any
license agreement with respect to the Trademark.
VII. The Debtor agrees to execute and deliver to Secured Party such further
papers and to do such other acts as may be necessary and proper to accomplish
the purposes of this Agreement, including without limitation, in order to
perfect or continue the perfection of Secured Party's security interest in all
of the Collateral. At any time and from time to time, upon the written request
of Secured Party, Debtor will promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as Secured
Party may reasonably deem desirable in obtaining the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the UCC
with respect to the liens and security interests granted hereby. Debtor also
hereby authorizes Secured Party to file any such financing or continuation
statement without the signature of Debtor to the extent permitted by applicable
law.
VIII. Upon or after the occurrence of an Event of Default, Secured Party
shall have, in addition to all other right and remedies given it by this
Agreement and the Purchase Agreement, all rights and remedies under applicable
law and all rights and remedies of a secured party under the UCC. Additionally,
the Secured Party may sell at public or private sale or otherwise realize from
time to time upon all or, any of the Collateral. Upon the occurrence and
continuance of an Event of Default, the Secured Party may also (A) commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (B) defend any suit,
action or proceeding brought against Debtor with respect to any Collateral; (C)
settle, compromise, or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as Secured
Party may deem appropriate; (D) use the Trademark and other Collateral for any
purpose whatsoever and, in furtherance thereof, Debtor hereby grants to Secured
Party an irrevocable license therefor; and (E) generally to sell, transfer,
pledge, make any agreement with respect to or otherwise deal with and use any of
the Collateral as fully and completely as though Secured Party were the absolute
owner thereof for all purposes, and to do, at Secured Party's option all acts
and things which Secured Party deems
4.
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein, in order to effect the intent of this
Agreement, all as fully and effectively as Debtor might do. The Debtor agrees
that seven (7) days written notice to the Debtor of any public or private sale
or other disposition of any of the Collateral shall be reasonable notice;
provided, however, that no notice shall be required hereunder if not otherwise
required by applicable law. At any such sale or disposition, Secured Party may,
to the extent permitted by law, purchase the whole or any part of the Collateral
sold, free from any right of redemption on the part of the Debtor, which right
the Debtor hereby waives and releases. After deducting from the proceeds of such
sale or other disposition of the Collateral all costs and expenses incurred by
Secured Party in enforcing its rights hereunder (including, without limitation,
all brokers' fees, auctioneers' fees and attorneys' fees actually incurred),
Secured Party shall apply the remainder of such proceeds to the payment of the
Secured Obligations in such order and manner as Secured Party in its sole
discretion may determine. All payments received by Debtor under or in connection
with any of the Collateral shall be held by Debtor in trust for Secured Party,
shall be segregated from other funds of Debtor and shall forthwith upon receipt
by Debtor, be turned over to Secured Party, in the same form as received by
Debtor (duly indorsed by Debtor to Secured Party, if required) and such payments
so received by Secured Party (whether from Debtor or otherwise) may, in the sole
discretion of Secured Party, be held by Secured Party as collateral security
for, and/or then or at any time thereafter applied in whole or in part by
Secured Party against all or any part of, the Secured Obligations in such order
as Secured Party shall elect. Any remainder of the proceeds after payment in
full of the Secured Obligations shall be paid over to the Debtor. If any
deficiency shall arise, the Debtor and each guarantor of the Secured obligations
shall remain jointly and severally liable to Secured Party therefor.
IX. The Debtor hereby irrevocably makes, constitutes and appoints Secured
Party and any officer or agent of Secured Party as Secured Party may select,
with full power of substitution, as the Debtor's true and lawful attorney-in-
fact, with full power to do any or all of the following if an Event of Default
shall occur and be continuing: to endorse the Debtor's name on all applications,
documents, papers and instruments necessary for Secured Party to use the
Trademark, or to grant or issue any exclusive or nonexclusive license under the
Trademark to any other person or entity, or to assign, pledge, convey or
otherwise transfer title in or dispose of the Collateral to any other person or
entity. The Debtor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney shall be irrevocable
until all of the Secured Obligations shall have been satisfied in full. The
powers conferred on Secured Party hereunder are solely to protect its interests
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Secured Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, employees or agents shall be responsible to Debtor for
any act or failure to act, except for its own willful misconduct.
X. Any and all fees, costs and expenses, of whatever kind or nature,
including attorneys' fees and legal expenses, actually incurred by Secured Party
in enforcing this Agreement shall be borne by Debtor.
XI. The Debtor shall use its best efforts to detect any infringers of the
Trademark and shall notify Secured Party in writing of infringements detected.
The Debtor shall have the duty, through counsel acceptable to Secured Party, to
prosecute diligently any trademark application
5.
for the Trademark, to file and prosecute lawsuits to enforce the Trademark as
are deemed reasonable and necessary in the Secured Party's reasonable judgment,
and to do any and all acts which are deemed necessary or desirable by Secured
Party to preserve and maintain all rights in the Trademark. Any expenses
incurred in connection with such applications or proceedings shall be borne by
the Debtor.
XII. Secured Party shall have the right, but shall in no way be obligated,
to defend any suit or counterclaim in its own name in order to defend the
Trademark and any license hereunder, in which event the Debtor shall, at the
request of Secured Party, do any and all lawful acts and execute any and all
proper documents required by Secured Party in aid of such defense and the Debtor
shall promptly, upon demand, reimburse and indemnify Secured Party for all costs
and expenses incurred by Secured Party in the exercise of its rights under this
paragraph 12.
XIII. If the Debtor fails to comply with any of its obligations hereunder,
to the extent permitted by applicable law, Secured Party may do so in the
Debtor's name or in Secured Party's name, but at the Debtor's expense, and the
Debtor agrees to reimburse Secured Party in full for all expenses, including
attorneys' fees, incurred by Secured Party in prosecuting, defending or
maintaining the Trademark or Secured Party's interest therein pursuant to this
Agreement.
XIV. No course of dealing between the Debtor and Secured Party, nor any
failure to exercise, nor any delay in exercising, on the part of Secured Party,
any right, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or thereunder preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.
XV. All of Secured Party's rights and remedies with respect to Collateral,
whether established hereby or by the Purchase Agreement, or by any other
agreements or by law shall be cumulative and may be exercised singularly or
concurrently.
XVI. The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
XVII. Any notice to Secured Party shall be deemed to have been duly given
when deposited in the mail, certified mail, return receipt requested, postage
prepaid, addressed to Secured Party at its address first above set forth. Any
notice to Debtor hereunder shall be deemed to have been duly given when
deposited in the mail, certified mail, return receipt requested, postage
prepaid, addressed to Debtor at its address first above set forth.
XVIII. This Agreement is subject to modification only by a writing signed
by the parties hereto.
XIX. The benefits and burdens of this Agreement shall inure to the benefit
of and be binding upon the successors and assigns of Secured Party and upon the
successors of the Debtor.
6.
The Debtor shall not assign its rights or delegate its duties hereunder without
the prior written consent of Secured Party.
XX. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
XXI. Time is of the essence of this Agreement. No person or entity, other
than the parties hereto, shall be deemed to be a beneficiary hereof or have the
right to enforce any of the provisions of this Agreement.
XXII. This Agreement has been negotiated, executed and delivered at, and
shall be deemed to have been made in New York. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York.
XXIII. THE DEBTOR AND SECURED PARTY EACH WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE COLLATERAL. DEBTOR IRREVOCABLY CONSENTS THAT
ANY LEGAL ACTION OR PROCEEDING AGAINST DEBTOR UNDER, ARISING OUT OF, OR IN ANY
MANNER RELATING TO THIS AGREEMENT MAY BE BROUGHT IN ANY XXXXX XXXXX XX XXX XXXXX
XX XXX XXXX LOCATED IN QUEENS COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF NEW YORK. DEBTOR, BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. DEBTOR
FURTHER AGREES THAT ANY LEGAL ACTION OR PROCEEDING DEBTOR MAY BRING, ARISING OUT
OF OR IN ANY MANNER RELATING TO THIS AGREEMENT, SHALL ONLY BE BROUGHT IN ANY
XXXXX XXXXX XX XXX XXXXX XX XXX XXXX LOCATED IN QUEENS COUNTY OR IN THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK. DEBTOR ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR OTHER
PROCESS RELATING TO SUCH ACTION OR PROCEEDING BY DELIVERY THEREOF TO DEBTOR IN
THE MANNER PROVIDED FOR NOTICES IN THIS AGREEMENT. DEBTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON
ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS OR ANY SIMILAR BASIS. DEBTOR SHALL NOT BE ENTITLED IN ANY SUCH ACTION
OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE
OTHER THAN THE STATE OF NEW YORK, UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED
BY THE LAWS OF THE STATE OF NEW YORK. NOTHING HEREIN SHALL AFFECT OR IMPAIR IN
ANY MANNER OR TO ANY EXTENT THE RIGHT OF SECURED PARTY TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST DEBTOR IN ANY OTHER JURISDICTION OR TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
7.
XXIV. Subject to the following provisions hereof, this Security Agreement
shall terminate upon the payment and performance in full of the Secured
Obligations. This Security Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Debtor for
liquidation or reorganization, should Debtor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of Debtor's property and assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the secured Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
IN WITNESS WHEREOF, each of the parties hereby have caused this Security
Agreement to be executed and delivered by its duly authorized office on the date
first set forth above.
HORIZON ORGANIC HOLDING CORPORATION
By:
---------------------------------------
Title:
------------------------------------
WORCESTER CREAMERIES CORP.
By:
---------------------------------------
Title:
------------------------------------
8.
STATE OF ____________________________
CITY AND COUNTY OF ________________
BEFORE ME, the undersigned authority, on this day personally appeared
__________________, of HORIZON ORGANIC HOLDINGS CORPORATION, to me known to be
the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity stated, and as the act and deed of said
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ____ day of
_____________________ 1998.
-------------------------------------------
Notary Public
My Commission Expires:
[NOTARIAL SEAL]
STATE OF ____________________________
CITY AND COUNTY OF __________________
BEFORE ME, the undersigned authority, on this day personally appeared
__________________, of WORCESTER CREAMERIES CORP., known to me to the person
whose name is subscribed to the foregoing instrument, and acknowledged to me
that he executed the same for the purposes and consideration therein expressed,
in the capacity stated, and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this ____ day of
_____________________ 1998.
-----------------------------------------------
Notary Public
My Commission Expires:
[NOTARIAL SEAL]
Exhibit A
Capitalized terms used but not defined in this Exhibit A have the
respective meanings given to them in that certain Asset Purchase Agreement dated
as of April 8, 1998 (the "Purchase Agreement"), between Horizon Organic Holding
Corporation, a Delaware corporation, as purchaser, and Worcester Creameries
Corp., a New York corporation and successor by merger to Mountainside Farms,
Inc., as seller.
The Collateral shall include all of the following properties, rights,
interests and other tangible and intangible assets of Debtor acquired from
Seller pursuant to the Purchase Agreement relating to the Juniper Valley Farms
Dairy Business:
(a) all advertising and promotional materials;
(b) the customer list;
(c) the name "Juniper Valley Farms," and all trademark and trade name
registrations, trademark and trade name applications, and all
renewals thereof, together with the goodwill connected with and
symbolized by such trademark, trade name, trademark and trade
name registration and trademark and trade name application, and
all rights corresponding thereto throughout the world (the
"Trademark"), and the other proprietary assets identified in the
Purchase Agreement (the "Proprietary Assets");
(d) all rights of Debtor under the Seller's Contracts, other than
rights under the Excluded Assets (the "Contracts");
(e) all Governmental Authorizations relating to the Juniper Valley
Farms Dairy Business held by Debtor (including the Governmental
Authorizations identified in the Seller's Disclosure Schedule);
(f) all claims (including claims for past infringement of Proprietary
Assets) and causes of action of Debtor with respect to the Juniper
Valley Farms Dairy Business against other Persons (regardless of
whether or not such claims and causes of action have been asserted by
the Debtor), and all rights of indemnity, warranty rights, rights of
contribution, rights to refunds, rights of reimbursement and other
rights of recovery possessed by Debtor with respect to the Juniper
Valley Farms Dairy Business (regardless of whether such rights are
currently exercisable); and
(g) to the extent not otherwise included, all Proceeds of each of
the foregoing.
