Exhibit 10.1

 

LOAN AGREEMENT

 

 

This Loan Agreement (“Agreement”) is entered into as of this 22nd day of
December, 2015, by and between AMERICAN FARMLAND COMPANY L.P., a Delaware
limited partnership, (“Borrower”), whose address is 10 East 53rd Street, New
York, New York 10022 and RUTLEDGE INVESTMENT COMPANY, a Tennessee corporation,
(“Lender”), whose address, for purposes of this Agreement, is 5160 Sanderlin
Avenue, Suite One, Memphis, Tennessee 38117.

 

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

 

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 on each of the
Properties acceptable to Lender in its sole discretion.

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

1.3.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.

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

1.5.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 “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.

1.6.Debt to Asset Ratio. Total borrowings divided by total assets, all
determined in accordance with GAAP as derived from the latest audited financial
statements of the Borrower. Before finalizing the Ratio, the total assets shall
be adjusted by substituting the net book value of the investment in real estate
determined in accordance with GAAP with the aggregate appraised value of all the
real estate owned by the Borrower. For the avoidance of doubt, total borrowings
exclude on the date of calculation any unused or undrawn portion of any credit
facilities.

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

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

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

1.10.GAAP. Generally accepted accounting principles.

1.11.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.

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

1.13.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.

1.14.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.

1.15.Loan.  The revolving credit loan in the amount of $15,000,000.00, as
evidenced by the Note, provided the amounts advanced from time to time shall not
exceed fifty percent (50%) of the Appraised Value of the Properties, as
determined by Lender based upon the Appraisals.  The terms of the Loan are
provided for herein and in the Note and the other Loan Documents.

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

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

1.18.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.

1.19.Note.  The Revolving Credit Promissory Note of even date herewith, from
Borrower to Lender in the principal amount of $15,000,000.00.

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1.20.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.

1.21.Owners.  Shortridge Farms (CA) LLC, a Delaware limited liability company,
Warren (CA) LLC, a Delaware limited liability company and Hoover (CA) LLC, a
Delaware limited liability company.

1.22.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.

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

1.24.State.  The State of Tennessee.

1.25.Title Insurance Agent.  Fidelity National Title Group

Contact Information:6060 Poplar Avenue, Suite LL37

Memphis, Tennessee  38119

Attn:  Tonya Catlin

Telephone: (901) 786-6016

Fax:  (901) 821-0400

Email:   tonya.catlin@fntg.com

 

1.26.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.

1.27.Title Insurance Company.  Fidelity National Title Group.

1.28.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.  

 

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ARTICLE 2.  WARRANTIES AND REPRESENTATIONS

 

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

 

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, 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 the
other 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 $15,000,000.00.  Borrower’s right to re-borrow expires the earlier of an
Event of Default under any of the Loan Documents or January 1, 2021 (“Maturity
Date”).

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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,
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
and Owners, 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 shall have delivered to Lender current
financial statements for Borrower 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, 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 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, to be 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.

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

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
$37,500.00.

 

ARTICLE 5.  COLLATERAL FOR THE LOAN

 

The Obligations shall be secured by a first priority lien on the Properties and,
as evidenced by the Loan Documents.

 

 

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, 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.  Borrower will keep
and maintain full and accurate books and records administered in accordance with
sound accounting principles, consistently applied, showing in detail the
earnings and expenses of the Properties and Borrower shall permit Lender and
Lender’s representatives, to examine such books and records (regardless of where
maintained) and all supporting data and to make copies therefrom at all
reasonable times upon reasonable notice and as often as may be requested by
Lender.  Borrower will furnish to Lender company prepared financial statements
within thirty (30) days after each quarter end. In addition, Borrower will
furnish to Lender annual CPA audited financial statements, together with
operating statements for the Properties, to include an updated rent roll, a copy
of the filed income tax return for Borrower each year during the term of the
Loan (within ten (10) days of filing) and such other financial statements and
information as Lender may reasonably request from time to time.  All financial
statements shall be in form satisfactory to Lender and shall be due on May 1 of
each year until the Obligations have been paid in full.

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, and (ii) any claim by
Borrower of a default by any other party under any Lease.

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 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.  Borrower shall furnish updated Appraisals of the Properties to
Lender on an annual basis, at Borrower’s expense, and which shall be addressed
to Lender.

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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
($37,500.00) minus the average outstanding principal balance of the Loan of the
prior three (3) month period which fee shall be assessed on the first day of
each calendar quarter hereafter until the Loan has been paid in full.  

6.12.Financial Covenant. Borrower shall maintain during the term of the Loan,
Debt to Asset Ratio of forty percent (40%) or less. The foregoing covenant shall
be tested annually using the results of the Annual Audit.

ARTICLE 7.  EVENT OF DEFAULT

 

7.1.Event of Default by Borrower 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:

(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 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 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 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)Borrower or Owners fail to pay any indebtedness (other than the Loan) owed by
Borrower or Owners to Lender when and as due and payable (whether by
acceleration or otherwise);

(f)If Borrower 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,

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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;

(g)If within ninety (90) days after the commencement of any proceeding against
Borrower 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
of any trustee, receiver or liquidator for Borrower or Owners for all or any
substantial part of their properties or of the Properties;

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

The occurrence of an Event of Default under any other Loan Document shall be
deemed an Event of Default under all other Loan Documents.

 

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;

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(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 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
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.

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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 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 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.  

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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 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.

8.14.Further Assurances.  Borrower agrees that at any time, and from time to
time, after execution and delivery of this Agreement, it 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 and Borrower 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 acknowledges and agrees 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

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or obligation for the security, receipt or third party interception of any such
transmission, and (c) Borrower 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 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 “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:

 

American Farmland Company, a

 

 

Maryland corporation, its

 

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Geoffrey M. Lewis

 

 

 

 

 

 

 

 

 

   Geoffrey M. Lewis

 

 

 

 

   Director

 

 

LENDER:

 

RUTLEDGE INVESTMENT COMPANY, a

Tennessee corporation

 

 

 

By:

 

/s/ Gwin S. Smith

 

 

 

 

 

 

 

 

 

   Gwin S. Smith, President