Exhibit 10.11

 

FIFTH LOAN AGREEMENT

 

This Fifth Loan Agreement (“Agreement”) is entered into as of this 3rd day of
February, 2017, by and among AMERICAN FARMLAND COMPANY L.P., a Delaware limited
partnership, (“Borrower”), whose address is 4600 S. Syracuse Street, Suite 1450,
Denver, Colorado 80237, FARMLAND PARTNERS, INC., a Maryland corporation,
FARMLAND PARTNERS OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
(“Guarantors”), whose addresses are 4600 S. Syracuse Street, Suite 1450, Denver,
Colorado 80237, and RUTLEDGE INVESTMENT COMPANY, a Tennessee corporation,
(“Lender”), whose address, for purposes of this Agreement, is 5160 Sanderlin
Avenue, Suite One, Memphis, Tennessee 38117.

 

RECITALS

 

WHEREAS, Borrower and Lender executed that certain Loan Agreement, dated
December 6, 2013 (the “First Loan Agreement”), pursuant to which Lender made a
revolving credit loan to Borrower in the principal amount of $25,000,000 (the
“First Loan”); and

 

WHEREAS, Borrower and Lender executed that certain Loan Agreement, dated
January 14, 2015 (the “Second Loan Agreement”), pursuant to which Lender made a
revolving credit loan to Borrower in the principal amount of $25,000,000 (the
“Second Loan”); and

 

WHEREAS, Borrower and Lender executed that certain Loan Agreement, dated
August 18, 2015  (the “Third Loan Agreement”), pursuant to which Lender made a
revolving credit loan to Borrower in the principal amount of $25,000,000 (the
“Third Loan”); and

 

WHEREAS, Borrower and Lender executed that certain Loan Agreement, dated
December 22, 2015 (the “Fourth Loan Agreement”), pursuant to which Lender made a
revolving credit loan to Borrower in the principal amount of $15,000,000 (the
“Fourth Loan”); and

 

WHEREAS, Borrower and Lender previously amended the terms and conditions of the
First Loan Agreement, Second Loan Agreement, Third Loan Agreement and Fourth
Loan Agreement pursuant to that certain Amendment to Loan Agreements dated
December 22, 2015; and

 

WHEREAS, Borrower and Lender have amended the terms and conditions of the First
Loan Agreement, Second Loan Agreement, Third Loan Agreement and Fourth Loan
Agreement pursuant to that certain Second Amendment to Loan Agreements dated of
even date herewith; and

 

WHERAS, Lender has agreed to make a new Loan (hereafter defined) to Borrower,
subject to the terms and conditions of this Agreement.

 

In connection with the funding and administration of the Loan, the parties
hereto agree as follows:

 

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ARTICLE 1.  DEFINITIONS

 

The following terms as used in this Agreement or in the other Loan Documents
shall have the following meanings:

 

1.1.                            Appraisals.  Uniform agricultural appraisal
reports acceptable to Lender in its reasonable but sole discretion.

 

1.2.                            Appraised Value.  The combined total value of
the Properties as established by the Appraisals.

 

1.3.                            Appraised Value of Prior Properties.  The
combined total value of the Prior Properties as established by the Appraisals.

 

1.4.                            Assignments of Leases.  The Assignments of
Contracts, Rents, Agreements and Leases of even date herewith, executed by
Owners in favor of Lender on the Properties.

 

1.5.                            Business Day.  Any day that is not a Saturday,
Sunday or banking holiday in the State.

 

1.6.                            Contributed Assets.  The assets of Farmland
Partners, Inc. (“FPI”) contributed to Issuer at the time of  FPI’s initial
public offering on April 16, 2014 that are listed on Annex D attached hereto and
made a part hereof.

 

1.7.                            Contributed Asset Agreed Value.  $71,677,570,
which is the appraised value of the Contributed Assets, as agreed upon hereby by
each of the parties to this Agreement; provided, however, that in the event that
any Contributed Asset is sold in whole or in part by FPI or the Issuer to a
third party, then the Contributed Asset Agreed Value shall be adjusted downward
(i) if such Contributed Asset is sold in whole, by the full amount of the
appraised value of such Contributed Asset, as set forth on Annex D, or (ii) if
such Contributed Asset is sold in part, by a pro-rated amount of the appraised
value for such Contributed Asset, as is reasonably agreed upon by the parties
hereto, with such pro-rated amount based upon factors including, but not limited
to, the appraisal of such Contributed Asset, the amount and type of acreage of
the Contributed Asset sold, and the tillable acreage of such Contributed Asset.

 

1.8.                            Contributed Asset Value Difference.  Initially
$33,322,146, which is the difference between the Historical Cost of the
Contributed Assets and the Contributed Asset Agreed Value; provided, however,
that in the event that any Contributed Asset is sold in whole or in part by FPI
or the Issuer to a third party, then the Contributed Asset Value Difference
shall mean the difference between the Historical Cost of the Contributed Asset
and the Contributed Asset Agreed Value for such Contributed Asset, each as
adjusted downward as described herein.

 

1.9.                            Costs.  All fees, charges, costs and expenses of
any nature whatsoever incurred at any time and from time to time (whether before
or after a Default) by Lender in making, funding, administering or modifying the
Loan, in negotiating or entering into any

 

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“workout” of the Loan, or in exercising or enforcing any rights, powers and
remedies provided in the Loan Documents, including reasonable attorneys’ fees,
court costs, receiver’s fees, management fees and costs incurred in the repair,
maintenance and operation of, or taking possession of, or selling, the
Properties.

 

1.10.                     Default Rate.  A rate equal to the highest rate of
interest allowed by Law.

 

1.11.                     Environmental Due Diligence.  Environmental due
diligence for the Properties acceptable to Lender, which may include, at
Lender’s discretion, phase I environmental site assessments.

 

1.12.                     Event of Default.  The occurrence of any of the events
described in Section 7 of this Agreement.

 

1.13.                     GAAP.  Generally accepted accounting principles.

 

1.14.                     Governmental Authority.  Any governmental or
quasi-governmental entity, including any court, department, commission, board,
bureau, agency, administration, service, district or other instrumentality of
any governmental entity.

 

1.15.                     Guaranties.  Those certain Guaranty Agreements dated
of even date herewith executed by Guarantors in favor of Lender in which
Guarantors, jointly and severally, guarantee to Lender the repayment in full of
the Loan.

 

1.16.                     Historical Cost of the Contributed Assets. 
$38,355,424; provided, however, that in the event that any Contributed Asset is
sold in whole or in part by FPI or the Issuer to a third party, then the
Historical Cost of the Contributed Assets shall be adjusted downward (i) if such
Contributed Asset is sold in whole, by the full amount of the historical cost of
such Contributed Asset, as set forth on Annex D, or (ii) if such Contributed
Asset is sold in part, by a pro-rated amount of the historical cost for such
Contributed Asset, as is reasonably agreed upon by the parties hereto, with such
pro-rated amount based upon factors including, but not limited to, the total
historical cost of such Contributed Asset, the amount and type of acreage of the
Contributed Asset sold, and the tillable acreage of such Contributed Asset.

 

1.18.                     Indemnity Agreements.  The Environmental Indemnity
Agreements of even date herewith, signed by Borrower and the Owners in favor of
Lender.

 

1.19.                     Issuer.  Farmland Partners Operating Partnership, LP

 

1.20.                     Laws.  All federal, state and local laws, statutes,
rules, ordinances, regulations, codes, licenses, authorizations, decisions,
injunctions, interpretations, orders or decrees of any court or other
Governmental Authority having jurisdiction over the Properties, as may be in
effect from time to time.

 

1.21.                     Leases.  All leases and other similar agreements,
whether now existing or hereafter entered into, for the Properties, including
all lease guaranties related thereto, as the same may be amended or modified
from time to time.

 

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1.22.                     Leverage Ratio.  The ratio of the FPI’s Total Debt to
the FPI’s Total Assets.

 

1.23.                     Loan.  The revolving credit loan in the amount of
$30,000,000.00, as evidenced by the Note, provided the amounts advanced from
time to time shall not exceed sixty percent (60%) of the Appraised Value of the
Properties (subject to the conditions stated in Section 6.13 hereof), as
determined by Lender based upon the most recent Appraisals. The Loan shall bear
interest at an adjustable rate equal to the ninety day (90) LIBOR rate plus one
and thirty hundredths percent (1.30%) per annum with interest only payable
quarterly and maturity on January 1, 2022 as more particularly provided in the
Note.

 

1.24.                     Loan Documents.  The Note, the Mortgages, the
Assignments of Leases, the Indemnity Agreements, this Agreement, the Guaranties
and any other documents or instruments evidencing or securing the Loan.

 

1.25.                     Loan Proceeds.  Funds disbursed or to be disbursed
under the Note pursuant to this Agreement.

 

1.26.                     Mortgages.  The Revolving Credit Deeds of Trust,
Assignments of Rents, Security Agreements and Fixture Filings of even date
herewith from Owners to Lender encumbering the Properties and securing repayment
of the Obligations.

 

1.27.                     Note.  The Revolving Credit Promissory Note of even
date herewith, from Borrower to Lender in the principal amount of
$30,000,000.00.

 

1.28.                     Obligations.  All present and future debts,
obligations and liabilities of Borrower and Owners to Lender arising pursuant
to, or on account of, the provisions of this Agreement, the Note or any of the
other Loan Documents, including the obligations: (a) to pay all principal,
interest, late charges, and other amounts due at any time under the Note; (b) to
pay all expenses, indemnification payments, fees and other amounts due at any
time under the Loan Documents, together with interest as provided in the Loan
Documents; and (c) to perform, observe and comply with all of the terms,
covenants and conditions, expressed or implied, which Borrower and Owners are
required to perform, observe or comply with pursuant to the terms of the Loan
Documents.

 

1.29.                     Owners.  (a) AFC California LLC, a Delaware limited
liability company; (b) Bartlett (CA) LLC, a Delaware limited liability company;
(c) Sargent Farms (CA) LLC, a Delaware limited liability company; (d) Booth
(CA), LLC, a Delaware limited liability company; (e) Stoneman (CA) LLC, a
Delaware limited liability company; (f) Arnold (CA) LLC, a Delaware limited
liability company;  and (g) Waterman (CA) LLC, a Delaware limited liability
company.

 

1.30.                     Person.  An individual, a corporation, a partnership,
a joint venture, a limited liability company, a trust, an unincorporated
association, any Governmental Authority or any other entity.

 

1.31.                     Properties.  The agricultural farmland owned by the
Owners, as more particularly described in the Mortgages and including without
limitation, all of the estate, right, title and interest of the Owners into the
farmland described in the Mortgages, together

 

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with all buildings, structures, and improvements of every nature whatsoever now
or hereafter situated thereon.

 

1.32.                     Prior Properties.  The agricultural farmland securing
the Previous Loans, together with all buildings, structures, and improvements of
every nature whatsoever now or hereafter situated thereon.

 

1.33.                     State.  The State of Tennessee.

 

1.34.                     Title Insurance Agent.  Fidelity National Title Group

 

 

Contact Information:

6060 Poplar Avenue, Suite LL37

 

Memphis, Tennessee 38119

 

Attn: Pam Cox

 

Telephone: (901) 786-6016

 

Fax: (901) 821-0400

 

Email: pam.cox@fntg.com

 

 

 

1.35.                     Title Insurance Commitments.  American Land Title
Association (“ALTA”) mortgagee’s title insurance commitments to be issued by the
Title Insurance Company on the Properties in such form as is acceptable to
Lender.

 

1.36.                     Title Insurance Company.  Fidelity National Title
Group.

 

1.37.                     Title Insurance Policies.  ALTA mortgagee’s title
insurance policies to be issued by the Title Insurance Company in the amount of
the Note showing fee simple title to the Properties to be vested in the Owners
and insuring the Mortgages as first liens on the Properties, subject only to
exceptions permitted by Lender, and otherwise in form and substance acceptable
to Lender including endorsements thereto.

 

1.38.                     Total Assets.  The sum of (a) the Contributed Asset
Value Difference and (b) FPI’s total assets as of the end of each fiscal quarter
or the fiscal year, as applicable, as presented in the annual CPA audited
financial statements; provided, however, that in the event that FPI no longer
records the Contributed Assets on a historical cost basis, then Lender, in its
sole discretion, may determine that clause (a) shall no longer be included in
the calculation of Total Assets.

 

1.39.                     Total Debt.  The total debt of FPI as of the end of
each fiscal quarter or the fiscal year, as applicable, as presented in the
annual CPA audited financial statements.

 

ARTICLE 2.  WARRANTIES AND REPRESENTATIONS

 

In consideration for Lender committing to fund the Loan, Borrower hereby
represents and warrants to Lender, as follows:

 

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2.1.                            Purpose of Loan.  The Loan shall be used for
working capital purposes, acquisition costs for additional farmland and such
other corporate purposes utilized by Borrower in its business.  The Loan is for
commercial purposes.

 

2.2.                            Pending Suits.  To Borrower’s knowledge, except
for a class action lawsuit entitled “Parshall v. American Farmland Company, et.
al., Case No. 24C16005745, filed on October 26, 2016 in Circuit Court for
Baltimore City, there are no suits, judgments, bankruptcies or executions
pending or threatened against Borrower, Owners or the Properties which, if
decided adversely to Borrower, Owners or the Properties, would materially and
adversely affect the financial condition of Borrower, Owners or the Properties.

 

2.3.                            Financial Statements.  The Financial Statements
delivered by Borrower to  Lender are true and correct in all material respects,
fairly present the respective financial condition of the subject thereof as of
the respective dates thereof, no material adverse change has occurred in the
financial condition reflected therein since the respective dates thereof, and no
additional borrowings have been made by Borrower since the date thereof other
than the borrowing contemplated hereby or other borrowing approved by Lender.

 

2.4.                            No Mechanic’s or Materialmen’s Liens.  Neither
Borrower nor Owners have, as of the date hereof, permitted any work at the
Properties or the delivery of any materials to the Properties which could give
rise to a lien on the Properties.

 

2.5.                            No Violation of Other Agreements.  The
consummation of the transactions contemplated by this Agreement and the
performance of this Agreement and Loan Documents will not result in any breach
of, or constitute an Event of Default under, the Borrower’s or Owners’
organizational documents or any other material instrument or agreement to which
Borrower or Owners are a party or by which they may be bound or affected.

 

2.6.                            Leases.  All existing Leases are in full force
and effect and, to Borrower’s knowledge, no default exists under the Leases as
of the date hereof.

 

ARTICLE 3.  THE LOAN

 

3.1.                            Use and Purposes.  Borrower agrees to borrow
from Lender and Lender agrees to lend to Borrower the Loan Proceeds, such Loan
Proceeds to be subject to all of the terms, provisions and conditions of this
Agreement.  The Loan is a revolving line of credit and the outstanding principal
balance of the Loan may, from time to time, increase or decrease and may be
repaid and re-borrowed as provided in the Note, but shall never, at any one
time, exceed the principal sum of $30,000,000.00.  Borrower’s right to re-borrow
expires the earlier of an Event of Default under any of the Loan Documents or
January 1, 2022 (“Maturity Date”).

 

3.2.                            Advances Secured by Loan Documents.  All
disbursements, advances or payments made by Lender hereunder, from time to time,
and any amounts expended by Lender under this Agreement or the other Loan
Documents, and all other loan expenses,

 

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including reasonable attorneys fees, as and when advanced or incurred, will be
deemed to be a part of the Obligations and as such will be secured by the Loan
Documents to the same extent and effect as if the terms and provisions of this
Agreement were set forth therein.

 

ARTICLE 4.  CONDITIONS TO DISBURSEMENT OF LOAN PROCEEDS

 

Unless otherwise agreed by Lender in writing, Lender will not be obligated to
close the Loan and disburse any Loan Proceeds unless and until the following
conditions have been satisfied (all in a manner acceptable to Lender):

 

4.1.                            Loan Documents.  Borrower shall have furnished
or delivered to Lender, in form and substance acceptable to Lender, the Loan
Documents executed by Borrower, Owners and Guarantors, as applicable.

 

4.2.                            Closing Costs.  Borrower shall have paid all
reasonable Costs incurred by Lender in connection with the Loan, including the
reasonable fees of counsel for the Lender.

 

4.3.                            Financial Statements.  Borrower and FPI shall
have delivered to Lender current financial statements for Borrower and FPI
certified to be true, correct and complete.  Said financial statements must be
current within the last twelve (12) months.

 

4.4.                            Title Policies.  Borrower shall have procured
commitments for the issuance of the Title Insurance Policies, in a form
acceptable to Lender.

 

4.5.                            Insurance.  Borrower shall have furnished to
Lender evidence, either in the form of duplicate policies, binders or
certificates, acceptable to Lender (identifying each insurance policy, name of
insurer, amount of coverage, deductible provisions and expiration date) that
Borrower has purchased, and has in full force and effect as required by Lender
and the Loan Documents.

 

4.6.                            Appraisals.  Lender shall have obtained the
Appraisals of the Properties which are satisfactory to Lender in amount, form
and substance.  Borrower shall pay for the cost of the Appraisals.

 

4.7.                            Organizational Documents.  Lender shall be
provided with a copy of Borrower’s, Guarantors’ and  Owners’ organizational
documents and evidence of authority to sign this Agreement and the other Loan
Documents.

 

4.8.                            Environmental Due Diligence.  Lender shall be
provided with such Environmental Due Diligence for the Property as Lender may
require, in form and content acceptable to Lender.  All reports shall be
addressed to Lender.  Borrower shall pay for the cost of the Environmental Due
Diligence.

 

4.9.                            Opinion of Counsel.  Borrower shall provide
Lender with an opinion from counsel to Borrower, Guarantors and Owners, in such
form and content as reasonably required by Lender.

 

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4.10.                     Leases.  Lender shall have received and approved
executed copies of the Leases.

 

4.11.                     Commitment Fee.  Payment of the commitment fee to
Lender in the amount of $75,000.00.

 

4.12.                     Merger.  FPI shall have successfully purchased all of
the outstanding capital stock of American Farmland Company (“AFC”) and FPI
Heartland GP LLC shall have become the sole general partner of Borrower.

 

ARTICLE 5.  COLLATERAL FOR THE LOAN

 

The Obligations shall be secured by a first priority lien on the Properties as
evidenced by the Mortgages and Assignments of Leases.

 

ARTICLE 6.  COVENANTS AND AGREEMENTS

 

Borrower covenants and agrees with Lender as follows:

 

6.1.                            Costs.  Borrower will pay all reasonable Costs
required to satisfy the conditions of this Agreement, including, but not limited
to, all taxes and recording expenses, Lender’s attorneys fees, surveys,
appraisals, appraisal updates, title insurance, title updates, real estate
taxes, and insurance policies.

 

6.2.                            Inspections.  Borrower will permit Lender and
its representatives to enter upon the Properties at all reasonable times and
upon reasonable notice to inspect the Properties and to examine all records
which relate to the ownership and operation of the Properties and will
cooperate, and cause Borrower’s manager, if applicable, to cooperate with Lender
in such inspections.

 

6.3.                            Brokers.  Borrower will indemnify and hold
harmless Lender from and against all claims of brokers and agents arising by
reason of the execution of this Agreement or the consummation of the
transactions contemplated hereby.

 

6.4.                            Advances to Cure Default.  In the event that
Borrower fails to perform any of Borrower’s covenants or agreements under this
Agreement, and fails to commence a cure of such failure within ten (10) days
after written notice from Lender specifying the failure and the action required
to cure same, Lender may, but shall not be required to, perform any or all of
such covenants and agreements, and any amounts expended by Lender in so doing
will be deemed to be a part of the Obligations under this Agreement and under
the Loan Documents.

 

6.5.                            Compliance with Laws.  The Properties shall be
owned and operated in all material respects in accordance with all applicable
Laws, including, without limitation, all zoning, land use, code, setback and
other applicable regulations and restrictions.

 

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6.6.                            Books and Records; Financial Statements; Tax
Returns.  FPI shall furnish to Lender company prepared financial statements
within sixty (60) days after each quarter end. In addition, FPI shall  furnish
to Lender annual CPA audited financial statements within one hundred twenty
(120) days of FPI’s fiscal year end, together with such other financial
statements and information as Lender may reasonably request from time to time.
FPI shall also furnish to Lender annual operating statements for the Properties
including an updated rent roll. All financial statements shall be in form
satisfactory to Lender.

 

6.7.                            Estoppel Certificates.  Within twenty (20) days
after any request by Lender, Borrower shall certify in writing to Lender, the
then unpaid balance of the Loan and whether Borrower claims any right of defense
or setoff to the payment or performance of any of the Obligations, and if
Borrower claims any such right of defense or setoff, Borrower shall give a
detailed written description of such claimed right.

 

6.8.                            Notification by Borrower.  Borrower will
promptly give written notice to Lender of (i) the occurrence of any Event of
Default under the Loan Documents, and (ii) the occurrence of any default, after
all applicable notice and cure periods have expired, under the Leases.

 

6.9.                            Indemnification by Borrower.  Borrower agrees to
indemnify Lender and to hold Lender harmless from and against, and to defend
Lender by counsel approved by Lender against, any and all commercially
reasonable out-of-pocket costs incurred in connection with claims directly or
indirectly arising out of or resulting from any transaction, act, omission,
event or circumstance in any way connected with the Properties or the
Obligations (a “Claim”), including any Claim arising out of or resulting from
(a) any failure by Borrower to comply with the requirements of any Laws or to
comply with any agreement that applies to the Properties; (b) any failure by
Borrower to observe and perform any of the obligations imposed upon the landlord
under the Leases; (c) any other Event of Default hereunder or under any of the
other Loan Documents; or (d) any assertion or allegation that Lender is liable
for any act or omission of Borrower or any other Person in connection with the
ownership, development, financing, leasing, operation or sale of the Properties;
provided, however, that Borrower shall not be obligated to indemnify Lender with
respect to any Claim arising solely from the negligence or willful misconduct of
Lender.  The agreements and indemnifications contained in this Section shall
apply to Claims arising both before and after the repayment of the Loan and
shall survive the repayment of the Loan, any foreclosure or deed, assignment or
conveyance in lieu thereof and any other action by Lender to enforce the rights
and remedies of Lender hereunder or under the other Loan Documents, except for
acts or omissions of Lender after taking possession of the Property pursuant to
its remedies under the Loan Documents.

 

6.10.                     Appraisals.  Lender shall order updated Appraisals of
the Properties on an annual basis, at Borrower’s expense, and which shall be
addressed to Lender and approved by Lender in its reasonable but sole
discretion.

 

6.11.                     Non-Usage Fee.  Borrower shall pay to Lender an unused
line of credit fee equal to one quarter of one percent per annum (.25%) of the
Loan amount minus the average outstanding principal balance of the Loan of the
prior three (3) month period which fee shall

 

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be assessed on the first day of each calendar quarter hereafter until the Loan
has been paid in full.

 

6.12.                     Leverage Ratio.  Borrower shall cause FPI to maintain
during the term of the Loan, a Leverage Ratio of sixty percent (60%) or less.
The foregoing covenant shall be tested annually.

 

6.13.                     Loan to Value Ratio.  The aggregate loan amounts
outstanding under the Loan and the Previous Loans from time to time shall not
exceed fifty percent (50%) of the Appraised Value of the Properties and the
Prior Properties as determined by Lender during the prior twelve (12) months
pursuant to updated Appraisals. Notwithstanding the foregoing, the loan to
appraised value of properties securing a single loan (ie, any one of the Loan or
Previous Loans) may increase to a maximum amount of sixty percent (60%) or less
so long as the aggregate outstanding principal amounts under the Loan and
Previous Loans divided by the aggregate Appraised Value of the Properties and
the Appraised Value of Prior Properties is fifty percent (50%) or less. The
foregoing covenants shall be tested annually in the fourth calendar quarter. In
the event of a default under this Section 6.13, Borrower, at its election, shall
have one hundred eighty (180) days (i) to cure such default by either paying
down the aggregate outstanding principal amount of the Loan and the Previous
Loans to an amount that would comply with this Section 6.13 or furnish
additional first mortgage real estate collateral acceptable to Lender supported
by title insurance, environmental due diligence and current Appraisals or
(ii) deliver notice to Lender that Borrower will, at its own expense, obtain a
new Appraisal of all or a portion of the Properties (a “Reappraisal Notice”). 
If Borrower delivers such a Reappraisal Notice, Borrower shall, within 90 days
after the date of the Reappraisal Notice, obtain and deliver to Lender a new
Appraisal of all or a portion of the Properties which shall be acceptable to
Lender in its reasonable but sole discretion.  Subject to Lender’s approval of
the new Appraisal, promptly following receipt of such new Appraisal, Lender
shall recalculate the loan to value ratio using the Appraisal Value stated
therein (and, if the new Appraisal does not include all of the Properties,
previously performed Appraisals of any such excluded Properties), and notify
Borrower of the results. If such recalculated loan to value ratio is sufficient
to comply with the loan to value requirements set forth in this Section 6.13, no
further action by Borrower is required with respect to the loan to value
requirements for the applicable period. However, if such recalculated loan to
value ratio is insufficient for such purpose, Borrower shall have the option (at
any time within the 180 day period, but no later than July 1 of any year) to
(i) make a prepayment which, if made prior to the date of measurement of such
recalculated loan to value ratio, would have caused Borrower to be in compliance
with the loan to value requirements set forth herein or (ii) furnish additional
first mortgage real estate collateral acceptable to Lender.

 

ARTICLE 7.  EVENT OF DEFAULT

 

7.1                               Event of Default by Borrower, Guarantors and
/or Owners.  The occurrence of any one or more of the following shall constitute
an “Event of Default” as such term is used herein:

 

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(a)                                 A failure to pay amounts when due under the
Note or the other Loan Documents within five (5) days of when due;

 

(b)                                 Any representation, warranty or statement
made by Borrower or Guarantors, as applicable,  in this Agreement, the other
Loan Documents or any other instrument now or hereafter evidencing, securing or
in any manner relating to the Loan proves untrue in any material respect;

 

(c)                                  Failure of Borrower and/or Guarantors to
comply in all material respects with any of the terms and conditions of this
Agreement, or the other Loan Documents, which failure is not cured within thirty
(30) days following written notice from Lender; provided, however, if within
such 30 day period Borrower and/or Guarantors, as applicable, has made a good
faith effort to comply with such terms and conditions but the failure to
complete the same cannot reasonably be cured within such 30 day period, then,
provided such efforts continue, and it reasonably appears that they will be
successful, then the time to cure such Event of Default shall be extended by a
reasonable time not to exceed sixty (60) additional days (subject to Excusable
Delays);

 

(d)                                 Failure of Owners to comply in all material
respects with any of the terms and conditions of the Loan Documents; provided,
however, if within such 30 day period Owners have made a good faith effort to
comply with such terms and conditions but the failure to complete the same
cannot reasonably be cured within such 30 day period, then, provided such
efforts continue, and it reasonably appears that they will be successful, then
the time to cure such Event of Default shall be extended by such reasonable time
not to exceed sixty (60) additional days (subject to Excusable Delays);

 

(e)                                  If Borrower, Guarantors or Owners file a
voluntary petition in bankruptcy or is adjudicated a bankrupt or insolvent, or
files any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy act or any other present or future
applicable federal, state or other statute or Law, makes an assignment for the
benefit of creditors, or seek or consent to or acquiesces in the appointment of
any trustee, receiver or liquidator for Borrower or Owners for all or any
substantial part of their properties or of the Properties;

 

(f)                                   If within ninety (90) days after the
commencement of any proceeding against Borrower, Guarantors or Owners seeking
any reorganization, arrangement, readjustment, liquidation, dissolution or
similar relief under the present or any future federal bankruptcy act or any
other present or future applicable federal, state or other statute or Law, such
proceeding is not dismissed, or if, within ninety (90) days after the
appointment, without the consent or acquiescence of Borrower, Guarantors, or
Owners, as applicable or any trustee, receiver or liquidator for Borrower,
Guarantors or Owners for all or any substantial part of their properties or of
the Properties;

 

(g)                                  If a third party obtains a judgment not
covered or satisfied by insurance against Borrower, Guarantors, Owners or the
Properties, which (a) materially and adversely impacts the obligations of the
Borrower under the Loan or Guarantors under the Guaranties, and (b) is not
vacated and released within thirty (30) days at the date of such judgment;

 

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(h)                                 An Event of Default has occurred under the
First Loan Agreement, Second Loan Agreement, Third Loan Agreement or Fourth Loan
Agreement.

 

The occurrence of an Event of Default under this Agreement, the First Loan
Agreement, the Second Loan Agreement, the Third Loan Agreement or the Fourth
Loan Agreement shall constitute an Event of Default under all of said loan
agreements.

 

7.2                                                       Lender’s Remedies in
the Default.  Upon the occurrence of any Event of Default, Lender, in addition
to all remedies conferred upon Lender by Law or equity, and by the terms of the
Loan Documents, may, in its sole discretion, pursue any one or more of the
following remedies concurrently or successively, it being the intent hereof that
none of such remedies shall be to the exclusion of any other:

 

(a)                                 Take possession of the Properties and
operate the Properties and do anything in its sole judgment to fulfill the
obligations of Borrower hereunder, any expense incurred by Lender being deemed
to be part of the Obligations, including either the right to avail itself of or
procure performance of existing contracts or Leases, under the assignment to
Lender or otherwise, or let any contracts with the same vendors or others. 
Without restricting the generality of the foregoing and for purposes aforesaid,
Borrower hereby appoints and constitutes Lender its lawful attorney-in-fact with
full power of substitution in the Properties to operate the Properties in the
name of Borrower; to use funds remaining under this Agreement or which may be
reserved, or escrowed or set aside for any purpose hereunder at any time to
operate the Properties; it being understood and agreed that this power of
attorney shall be a power coupled with an interest and cannot be revoked;

 

(b)                                 Lender may apply to any court of competent
jurisdiction for, and obtain appointment of, a receiver for the Properties;

 

(c)                                  Lender may set off the amounts due Lender
under the Loan Documents against any and all accounts, credits, money,
securities or other property of Borrower now or hereafter on deposit with, held
by or in the possession of Lender to the credit or for the account of Borrower,
without notice to or the consent of Borrower;

 

(d)                                 Borrower shall not be relieved of any of the
Obligations by reason of the failure of Lender to comply with any request of
Borrower or of any other Person to take action to foreclose on the Properties
under the Loan Documents or otherwise to enforce any provision of the Loan
Documents, or by reason of the release, regardless of consideration, of all or
any part of the Properties.  No delay or omission of Lender to exercise any
right, power or remedy accruing upon the happening of an Event of Default shall
impair any such right, power or remedy or shall be construed to be a waiver of
any such Event of Default or any acquiescence therein.  No remedy available to
Lender under the Loan Documents or otherwise, is intended to be exclusive of any
other remedies provided for in the Loan Documents, and each and every such
remedy shall be cumulative, and shall be in addition to every other remedy given
hereunder, or under the Loan Documents, or now or hereafter existing at Law or
in equity.  Every right, power and remedy given by the Loan Documents to Lender
shall be concurrent and may be pursued separately, successively or together
against Borrower, Owners or the Properties or any part

 

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thereof, and every right, power and remedy given by the Loan Documents may be
exercised from time to time as often as may be deemed expedient by Lender;

 

(e)                                  Withhold further disbursement of the Loan
Proceeds;

 

(f)                                   Declare the entire balance of the
Obligations, without demand or notice of any kind (which are hereby expressly
waived) to be due and payable at once and, in such event, such Obligations shall
become immediately due and payable;

 

(g)                                  Pursue such other remedies as may be
available to Lender at Law or equity.

 

ARTICLE 8.  GENERAL COVENANTS

 

8.1.            No Assignments by Borrower.  This Agreement may not be assigned
by Borrower or Guarantors without the prior written consent of Lender.  Borrower
will remain liable for payment of all sums advanced hereunder before and after
such assignment.

 

8.2.            Assignment by Lender.  This Agreement, the Loan Documents and
any other instrument now or hereafter evidencing, securing or in any manner
affecting the Loan may be endorsed, assigned and transferred in whole or in part
by Lender, and any such holder and assignee of the same will succeed to and be
possessed of the rights of Lender under all of the same to the extent
transferred and assigned.

 

8.3.            Interest Not to Exceed Maximum Allowed by Law.  If from any
circumstances whatsoever, by reason of acceleration or otherwise, the
fulfillment of any provision of this Agreement or any other Loan Document
involves transcending the limit of validity prescribed by any applicable usury
statute or any other applicable Law, with regard to obligations of like
character and amount, then the obligations to be fulfilled will be reduced to
the limit of such validity as provided in such statute or Law, so that in no
event shall any payment of interest or other like charges be possible under this
Agreement or the other Loan Documents in excess of the limit of such validity.

 

8.4.            Time of the Essence.  Time is of the essence of this Agreement.

 

8.5.            No Agency.  Lender is not the agent or representative of
Borrower, and Borrower is not the agent or representative of Lender, and nothing
in this Agreement will be construed to make Lender liable to anyone for goods
delivered or services performed upon the Properties or for debts or claims
accruing against Borrower.

 

8.6.            No Partnership or Joint Venture.  Neither anything contained
herein nor the acts of the parties hereto will be construed to create a
partnership or joint venture between Borrower and Lender.

 

8.7.            No Third Party Beneficiaries.  All conditions to the obligations
of Lender to make advances hereunder are imposed solely and exclusively for the
benefit of Lender and

 

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its assigns and no other person will have standing to require satisfaction of
such conditions or be entitled to assume that Lender will not make disbursements
in the absence of strict compliance with any or all thereof and no other person,
under any circumstances, will be deemed to be beneficiary of such conditions,
any or all of which may be waived in whole or in part by  Lender at any time if
Lender in its sole discretion deems it advisable to do so.

 

8.8.                            Waiver.  No delay or omission by Lender to
exercise any right or power arising from any Event of Default will impair any
such right or power or be considered to be a waiver of any such Event of Default
or any acquiescence therein nor shall the action or nonaction of Lender in case
of an Event of Default on the part of Borrower or Guarantors impair any right or
power arising therefrom.  No disbursement of the Loan hereunder shall constitute
a waiver of any of the conditions to Lender’s obligation to make further
disbursements nor, in the event Borrower is unable to satisfy any such
condition, shall any such disbursement have the effect of precluding Lender from
thereafter declaring such inability to be an Event of Default as hereinabove
provided.

 

8.9.                            Notices.  All notices, requests, demands and
other communications required or permitted to be given hereunder will be
sufficiently given if in writing and delivered in person or sent by United
States certified mail, return receipt requested, postage prepaid, to the party
being given such notice at the appropriate address set forth in the first
paragraph of this Agreement, or to such other address as either party may give
to the other in writing for such purpose.  All such notices, requests, demands
and other communications, if so mailed, will be deemed to be given when so
mailed.

 

8.10.                     Partial Invalidity.  In the event any one or more of
the provisions contained in this Agreement shall be for any reason be held to be
invalid, illegal or unenforceable in any respect, such validity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been set forth herein.

 

8.11.                     Entire Agreement.  This Agreement, the Loan Documents
and the other contracts, agreements and instruments described herein contain all
of the terms and conditions related to the disbursement of the Loan by Lender
and the use of the Loan by Borrower.  This Agreement may not be modified or
amended except in writing signed by Borrower and Lender.

 

8.12.                     Publicity.  Lender shall not release articles
concerning financing of the Properties without the written consent of Borrower.

 

8.13.                     WAIVER OF JURY TRIAL.  BORROWER, GUARANTORS AND LENDER
HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THIS INSTRUMENT AND TO ANY OF THE LOAN
DOCUMENTS, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. BORROWER
AND LENDER EACH REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY GIVEN.

 

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8.14.                     Further Assurances.  Borrower and Guarantors agree
that at any time, and from time to time, after execution and delivery of this
Agreement, each shall, upon the request of Lender, execute and deliver such
further documents and do such further things as Lender may reasonably request in
order to more fully effectuate the purposes of this Agreement.

 

8.15.                     Governing Law.  This Agreement shall be governed by
and construed in accordance with the Laws of the State of Tennessee.

 

8.16.                     Severability.  In the case one or more of the
provisions of this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity of the remaining provisions shall be in no way affected,
prejudiced or disturbed thereby.

 

8.17.                     Assignments and Participations.  Lender may sell or
offer to sell the Loan or interests therein to one or more assignees or
participants.  Borrower shall execute, acknowledge and deliver any and all
instruments reasonably requested by Lender in connection therewith, and to the
extent, if any, specified in any such assignment or participation, such
assignee(s) or participant(s) shall have the same rights and benefits with
respect to the Loan Documents as such Person(s) would have if such
Person(s) were Lender hereunder.  Lender may disseminate any information it now
has or hereafter obtains pertaining to the Loan, including any security for the
Loan, any credit or other information on the Properties (including environmental
reports and assessments), Borrower, any of Borrower’s principals, to any actual
or prospective assignee or participant, to Lender’s affiliates, to any
regulatory body having jurisdiction over Lender, to any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and the Loan, or to any other party as necessary or appropriate in
Lender’s reasonable judgment.  Subject to applicable law, Lender shall use
reasonable efforts to protect the confidentiality of the terms of the Loan and
the financial or other information about Borrower and its affiliates.

 

8.18.                     Electronic Transmission of Data.  Lender, Borrower and
Guarantors agree that certain data related to the Loan (including confidential
information, documents, applications and reports) may be transmitted
electronically, including transmission over the Internet to the parties, the
parties affiliates, agents and representatives, and other Persons involved with
the subject matter of this Agreement.  Borrower and Guarantors acknowledge and
agree that (a) there are risks associated with the use of electronic
transmission and that Lender does not control the method of transmittal or
service providers, (b) Lender has no obligation or responsibility whatsoever and
assumes no duty or obligation for the security, receipt or third party
interception of any such transmission, and (c) Borrower and Guarantors will
release, hold harmless and indemnify Lender from any claim, damage or loss,
including that arising in whole or part from Lender’s strict liability or sole,
comparative or contributory negligence, which is related to the electronic
transmission of data; provided Borrower and Guarantors shall not release or
indemnify Lender from and against any claim or damage caused by Lender’s gross
negligence or willful misconduct.

 

8.19.                     Forum.  Borrower hereby irrevocably submits generally
and unconditionally for itself and in respect of its property to the
jurisdiction of any state court or any United States federal court sitting in
Memphis, Tennessee with respect to any matter or dispute (a

 

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“Dispute”) arising in connection with the Loan or the Properties.  Borrower
hereby irrevocably waives, to the fullest extent permitted by Law, any objection
that Borrower may now or hereafter have to the laying of venue in any such court
and any claim that any such court is an inconvenient forum.  Nothing herein
shall affect the right of Lender to serve process in any manner permitted by Law
or limit the right of Lender to bring proceedings against Borrower in any other
court or jurisdiction.

 

8.20.                     USA Patriot Act Notice.  Lender hereby notifies
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), Lender is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow Lender to identify Borrower in accordance with the
Act.

 

(Remainder of Page Intentionally Left Blank)

 

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EXECUTED ON THE DAY AND YEAR FIRST ABOVE WRITTEN.

 

 

BORROWER:

 

 

 

 

AMERICAN FARMLAND COMPANY L.P., a Delaware limited partnership

 

 

 

 

By:

FPI Heartland GP LLC, a

 

 

Delaware limited liability company, its

 

 

General Partner

 

 

 

 

 

By:

/s/ Luca Fabbri

 

 

 

Luca Fabbri

 

 

 

Chief Financial Officer

 

 

 

 

GUARANTORS:

 

 

 

 

FARMLAND PARTNERS, INC., a Maryland Corporation

 

 

 

 

By:

/s/ Luca Fabbri

 

Title:

Chief Financial Officer and Treasurer

 

 

 

FARMLAND PARTNERS OPERATING PARTNERSHIP, L.P.,

 

a Delaware limited partnership

 

 

 

 

By:

/s/ Luca Fabbri

 

Title:

Chief Financial Officer

 

 

 

 

LENDER:

 

 

 

 

RUTLEDGE INVESTMENT COMPANY, a

 

Tennessee corporation

 

 

 

 

 

 

 

BY:

/s/ Gwin S. Smith

 

 

Gwin S. Smith, President

 

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