Investors Complaint Against Northern Beef Packers in Bankruptcy Proceedings

1
UNITED STATES BANKRUPTCY COURT

DISTRICT OF SOUTH DAKOTA

In re: ) Bankr. No. 13-10118
) Chapter 11
NORTHERN BEEF PACKERS )
LIMITED PARTNERSHIP )
Tax ID/EIN: 26-2530200 ) Adversary No.
)
Debtor. )
)
SDIF LIMITED PARTNERSHIP 6 AND ) COMPLAINT TO DETERMINE
SDIF LIMITED PARTNERSHIP 9, ) VALIDITY, EXTENT AND
South Dakota Limited Partnerships, ) PRIORITY OF LIENS
)
Plaintiffs, )
)
vs. )
)
NORTHERN BEEF PACKERS )
LIMITED PARTNERSHIP; )
WHITE OAK GLOBAL ADVISORS, LLC; )
OFFICIAL COMMITTEE OF )
UNSECURED CREDITORS OF NORTHERN )
BEEF PACKERS LIMITED PARTNERSHIP; )
SCOTT OLSON DIGGING, INC.; )
EPOCH STAR LIMITED; )
NORTHWEST PIPE FITTINGS, INC.; )
HOUSE OF GLASS, INC.; )
CLIMATE MAKERS, INC.; )
DIAMOND VOGEL PAINTS; )
AXIS CAPITAL, INC.; )
BEST BUSINESS PRODUCTS; )
CRYOVAC, INC.; )
FARNAM STREET FINANCIAL, INC.; )
LENOVO FINANCIAL SERVICES; )
MARCO; )
VAR RESOURCES; )
US BANK EQUIPMENT FINANCE; )
J ARVIS PRODUCTS CORPORATION; )
DAEWOO INTERNATIONAL AMERICA )
CORP.; )
TWIN CITY HIDE, INC.; )
WELLS FARGO BANK, NATIONAL )
ASSOCIATION ; )
MADGID GLOVE & SAFETY MFG. CO. LLC;)
HARMS OIL; )
WESTERN EQUIPMENT FINANCE; )
A-D SERVICES INC.; )
ROCKTENN CP LLC, )
BROWN COUNTY, SOUTH DAKOTA, )
Defendants.
Case: 13-01016 Document: 1 Filed: 11/05/13 Page 1 of 7
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Come now the Plaintiffs herein, SDIF Limited Partnership 6 and SDIF Limited
Partnership 9, sometimes hereinafter referred to as Plaintiffs, and state and allege as follows:

1. This is an action to determine the validity, extent and priority of liens in real and
personal property of the Debtor, Northern Beef Packers Limited Partnership, sometimes
hereinafter referred to as the Debtor. The Court has jurisdiction over this adversary matter
pursuant to 28 U.S.C. 157 and 1334. This case arises under 11 U.S.C. 506, 507 and 510,
and is brought as an adversary proceeding under Bankruptcy Rule 7001 et seq. This is a core
proceeding under 28 U.S.C. 157(b)(2)(K).

2. The Debtor herein filed a voluntary petition for relief under 11 U.S.C. Chapter 11 of
the Bankruptcy Code on J uly 19, 2013, which case is pending before this Court. The Debtor
continues as a debtor-in-possession of the property of the Bankruptcy estate.

3. Included in the property of the estate is real property legally described as follows:

Parcel I: NBP Lagoon Lot 1 in the Southwest Quarter of Section 7, Township
122 North, Range 63 West of the 5
th
P.M., according to the plat thereof of record,
Brown County, South Dakota; and

Parcel II: Blocks 1, 2, 3, 4, 5, and Lots 1, 2, and 3, Block 6, H & S First
Subdivision in the North Half of Section 36, Township 123 North, Range 64 West
of the 5
th
P.M., according to the plat thereof of record, Brown County, South
Dakota.

Said real property is not the subject of any motion for relief of the automatic stay or for
abandonment, and remains the property of the estate under the jurisdiction of this Court.

4. Also included in property of the estate is personal property generally described as
follows:

All equipment, inventory including but not limited to livestock, machinery,
furniture, furnishings, accounts receivables, supplies, cash, inventory, and
vehicles, now owned or hereafter acquired, by borrower, a South Dakota Limited
Partnership, engaged in the operation of beef plant and other related ancillary
structures, together with all accessions, parts, attachments, accessories, or
appurtenances, appertaining, attached, kept, used or intended for use, and all
substitutions, improvements, replacements and additions: all accounts and
general intangibles, now existing or subsequently arising; all interests of
Borrower [Debtor], now existing or subsequently arising, from the sale or
rendition of services to its customers which give rise to any accounts or general
intangibles now held or hereafter acquired; all contract rights, now existing or
subsequently arising, all chattel paper, documents or instruments relating to
accounts; all fixtures now or hereafter affixed, attached or located on the real
property described in the Mortgage of even date unless listed as an exception;
and the proceeds, products and accessions of and to any and all of the
foregoing.

5. On or about November 4, 2010, the Debtor entered into a Credit Agreement with
SDIF Limited Partnership 6 for the purpose of obtaining a loan or loans in the principal sum of
up to Sixty Million Dollars ($60,000,000.00). A true and correct copy of such Credit Agreement
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is marked Exhibit A, attached hereto and incorporated herein by this reference. In order to
evidence the loan or loans to be made pursuant to said Credit Agreement, the Debtor made in
favor of, executed and delivered to SDIF Limited Partnership 6 its Promissory Note, also dated
as of November 4, 2010 in the original principal sum of up to Sixty Million Dollars
($60,000,000.00). A true and correct copy of said Promissory Note is marked Exhibit B,
attached hereto and incorporated herein by this reference.

6. The Credit Agreement contemplated investments by up to One Hundred Twenty
(120) investors participating in the EB-5 Program more specifically known as the Immigration
and Nationality Act, 203(b)(5) et seq. Said Credit Agreement was subsequently amended by
an Amended Credit Agreement dated March 4, 2011, a true and correct copy of which is
marked Exhibit C, attached hereto and incorporated herein by this reference.

7. By Agreement dated as of the 30
th
day of August, 2011, the Debtor and both
Plaintiffs agreed that of the Sixty Million and 00/100 Dollars ($60,000,000.00) of loans to be
made to Debtor, Thirty-Five Million Dollars ($35,000,000.00) would be made by SDIF Limited
Partnership 6, and Twenty-Five Million Dollars ($25,000,000.00) would be made by SDIF
Limited Partnership 9. As of the date of filing the indebtedness due SDIF Limited Partnership 6
was $34,837,890.41 and the indebtedness due SDIF Limited Partnership 9 was
$25,605,613.23.

8. In order to secure the indebtedness due Plaintiffs, the Debtor made in favor of,
executed and delivered a MortgageOne Hundred Eighty Day Redemption encumbering all the
real property described in paragraph 3 above. Such Mortgage was dated November 4, 2010
and recorded as Instrument No. 201029445 in Book 546 of Mortgages, page 290 with the
Register of Deeds of Brown County, South Dakota. This Mortgage named SDIF Limited
Partnership 6 as Mortgagee. A true and correct copy of said Mortgage is marked Exhibit D,
attached hereto and incorporated herein by this reference. In order to further secure such
indebtedness, the Debtor made in favor of, executed and delivered a MortgageOne Hundred
Eighty Day Redemption encumbering all the real property described in paragraph 3 above.
Such Mortgage was dated J uly 3, 2012 and recorded as Instrument No. 201204794 in Book 656
of Mortgages, page 388 with the Register of Deeds of Brown County, South Dakota. This
Mortgage named SDIF Limited Partnership 9 as Mortgagee. A true and correct copy of said
Mortgage is marked Exhibit E, attached hereto and incorporated herein by this reference.

9. To further secure repayment of the indebtedness due Plaintiff, Debtor made in
favor of, executed and delivered to Plaintiffs a Security Agreement dated November 4, 2010. A
true and correct copy of said Security Agreement is marked Exhibit F, attached hereto and
incorporated herein by this reference. By the terms of said Security Agreement, Debtor granted
to Plaintiffs a security interest in all the personal property described in paragraph 4 above. As
shown by the filing information maintained in the Office of the Secretary of State, State of South
Dakota, attached hereto collectively as Exhibit G, the security interest granted by said Security
Agreement is a perfected security interest.

10. In addition to the previously described real estate mortgages and security
agreement, Plaintiffs are the assignees of that certain Collateral Real Estate Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing dated March 18, 2010,
originally made by Debtor in favor of EPOCH Star Limited and the Corrective and Confirmatory
MortgageCollateral Real Estate Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated J uly 9, 2010, made by the Debtor in favor of EPOCH Star
Limited, all pursuant to assignment dated November 4, 2010.

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11. By virtue of the Mortgages made in favor of Plaintiffs, and the Mortgage
subsequently assigned to Plaintiffs, Plaintiffs are, subject to the matters set forth in paragraphs
12 and 13 below, the holders of the first priority mortgage lien upon the real property of the
Debtor described in paragraph 3 above. Further, by virtue of the Security Agreement made in
favor of Plaintiffs, and the Security Agreement assigned to Plaintiffs, and subject to the matters
identified in paragraph 15 below, Plaintiffs are the holders of the first priority security interest in
the personal property of the Debtors described in paragraph 4 above.

12. Defendant White Oak Global Advisors, LLC is the holder of a MortgageOne
Hundred Eighty Day Redemption Mortgage and Security Agreement with Assignment of Rents
and Fixture Filing encumbering all of the real and personal property described in paragraphs 3
and 4 above securing payment of Thirty-Five Million Dollars ($35,000,000.00) plus interest,
which Mortgage would constitute a second lien priority, junior to that of the Plaintiffs. The
Debtor, Plaintiffs and White Oak Global Advisors, LLC have, however, entered into certain
Subordination Agreements by the terms of which Plaintiffs have subordinated their first priority
position in favor of White Oak Global Advisors, LLC up to but not in excess of the sum of Forty-
Five Million Dollars ($45,000,000.00). True and correct copies of such Subordination
Agreements are marked Exhibit H, attached hereby. By the terms of the Stipulation entered into
among the Debtor, White Oak Global Advisors, LLC and the Official Committee of Unsecured
Creditors of Northern Beef Packers Limited Partnership, the claims and rights on account of
indebtedness in excess of Forty Seven Million Dollars ($47,000,000.00) held by White Oak
Global Advisors, LLC are to be assigned to an agent of the Official Committee of Unsecured
Creditors of Northern Beef Packers Limited Partnership.

13. Scott Olson Digging, Inc. claims a mechanics lien on the real property described
in paragraph 3 above by virtue of the filing of a Mechanics Lien Statement dated March 26,
2008 pursuant to which a lien in the amount of Two Million One Hundred Fourteen Thousand
Nine Hundred Seventy Five and 49/100 Dollars ($2,114,975.49) as of November 29, 2007 is
claimed. Upon liquidation of said claim, and in the event any sums are found to be due Scott
Olson Digging, Inc., and if it is determined that a lien was properly preserved by the timely filing
of a proper mechanics lien statement as required by statute, any sums so secured by said
mechanics lien statement would have a priority over the Mortgages held by Plaintiffs and White
Oak Global Advisors, LLC.

14. Northwest Pipe Fittings, Inc. is the holder of a judgment in the amount of
$6,609.84, plus costs which was docketed May 30, 2013. House of Glass, Inc. is the holder of a
judgment in the amount of $3,655.57, plus costs and interests docketed J uly 11, 2013.
Diamond Vogel Paints has caused to be filed a lien statement claiming a mechanics lien in the
amount of $2,819.00 which lien claim was filed for record May 3, 2013. Climate Makers, Inc., by
and through its agent Perfekt, Inc. has caused to be filed a lien statement claiming a mechanics
lien in the amount of $4,300.00 which lien claim was filed for record J uly 10, 2013. Any claim or
interest held by Northwest Pipe Fittings, Inc.; House of Glass, Inc.; Diamond Vogel Paints; and
Climate Makers, Inc. by and through its agent Perfekt, Inc. are junior and inferior to the liens of
Plaintiff and Defendant White Oak against the real property described in paragraph 3 hereof.

15. It appears from a search of the Uniform Commercial Code filing records
maintained in the Office of the South Dakota Secretary of State, that the following parties may
hold or claim a security interest in personal property of the Debtor. To the extent such filings
evidence properly perfected purchase money security interests or leases of property, the same
would be prior and superior to the security interests held by Plaintiffs. It appears that the
following are the parties claiming leases or a security interest in personal property of the Debtor:

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A. Leases

(1) Axis Capital, Inc. holds a lease, reflected in the filing of a UCC-1 on May 8,
2012. The property leased consists of a 2008 OTTA Tractor. According to
the Debtor the balance due as of the date of filing was $35,364.05;
(2) Axis Capital, Inc. holds a lease reflected in the filing of a UCC-1 November 6,
2012. The property leased consists of equipment from MBA and Lift
Solutions. According to the Debtor the balance due as of the date of filing
was $187,844.80;
(3) Best Business Products is the holder of a lease for which no UCC-1 filing was
made. The property leased consists of a Canon Imageprofgraf 710 printer.
According to the Debtor the balance due as of the date of filing was
$1,549.34;
(4) Cryovac, Inc., a subsidiary of Sealed Air Corporation, holds a lease reflected
in the filing of a UCC-1 on August 25, 2008. The property leased consists of
5 rotary vacuum chamber machines, 60 product supports, 5 45-KVA
transformers, 2 semi-automatic packaging machines, 1 spare part kit for
UV3500, 8 manual bag loaders, 7 manual bag dispensers, 1 manual bag
dispenser of a different type, 24 tape wind up units, 5 vacuum installation kits,
16 Busch vacuum pumps, 6 Busch blower systems, 5 variable speed shrink
tunnels, and 1 spare parts kit. According to the Debtor the balance due as of
the date of filing was $2,104,779.94;
(5) Farnam Street Financial, Inc. holds a lease reflected in the filing of a UCC-1
filing dated J anuary 17, 2012. The property leased consists of miscellaneous
equipment from various vendors including a heating system, office furniture,
GP enhancement, handheld with software and related equipment, security
system, jug racks, associated software, flexwatch and other equipment
related to the foregoing. According to the Debtor the balance due as of the
date of filing was not known;
(6) Lenovo Financial Services holds a lease reflected in the filing of UCC-1 filings
dated March 28, 2012 and March 31, 2012. The property leased consists of
computer equipment. According to the Debtor the balance due as of the date
of filing was $204,564.89;
(7) MARCO is the holder of a lease for which no UCC-1 filing was made. The
property leased consists of 9 Canon IR-4035 copiers. According to the Debtor
the balance due as of the date of filing was $97,916.74;
(8) VAR Resources is the holder of a lease for which no UCC-1 filing was made.
The property leased consists of computer software. According to the Debtor
the balance due as of the date of filing was $20,505.84;
(9) US Bank Equipment Finance holds a lease reflected in the filing of a UCC-1
dated J anuary 3, 2013. The property leased consists of copiers. According
to the Debtor the balance due as of the date of filing was $20,243.92.

B. Security Interests

(1) Daewoo International America Corp. claims a security interest evidenced by a
UCC-1 filing dated April 29, 2013 covering accounts receivable, inventory,
contract rights, chattel paper, and general intangibles. The Debtors schedule
reflects that the indebtedness was for inventory financing and that there are
neither inventory nor accounts receivable included in the estate;
(2) Twin City Hide, Inc. claims a security interest evidenced by a UCC-1 filing
dated April 26, 2013. The Debtors schedule reflects that no sums are due
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Twin City Hide, Inc. as of the date of filing;
(3) Wells Fargo Bank, National Association claims a security interest evidenced
by a UCC-1 dated December 20, 2012 covering accounts receivable,
inventory and equipment. Debtors schedules reflect that Wells Fargo Bank,
National Association had no outstanding balance due it as of the date of
filing;
(4) White Oak Global Advisors, LLC as agent claims a security interest
evidenced by filings of UCC-1 dated September 7, 2012 and November 26,
2012 covering all assets. This creditor has filed a Proof of Claim;
(5) MADGID Glove & Safety Mfg. Co. LLC claims a security interest evidenced
by a UCC-1 filing dated October 3, 2012 covering inventory consisting of
work clothes, safety clothing and safety products. According to the Debtors
schedules the balance due as of the date of filing was $58,872.96;
(6) Harms Oil claims a security interest evidenced by a UCC-1 filing dated
March 12, 2012 covering general equipment as the collateral. According to
the Debtors schedule no indebtedness was owed Harms Oil at the date of
filing;
(7) Western Equipment Finance claims a security interest evidenced by a UCC-1
filing dated J une 6, 2012 covering inventory. According to the Debtors
schedule the balance due as of the date of filing was $2,727.53;
(8) A-D Services Inc. claims a security interest evidenced by a UCC-1 filing
dated May 29, 2012 covering equipment. The Debtors schedule reflects no
indebtedness was due A-D Services Inc. at the date of filing;
(9) EPOCH Star Limited claims a security interest evidenced by UCC-1 filings
dated April 23, 2010 and August 2, 2010 covering all assets. The Debtors
schedule reflects no indebtedness was due EPOCH Star Limited as there
was an assignment of EPOCH Star Limiteds secured position to Plaintiffs;
(10) ROCKTENN CP LLC claims a security interest evidenced by UCC-1 filings
dated J anuary 13, 2012 and February 9, 2012 covering equipment. The
Debtors schedule reflects the balance due ROCKTENN as of the date of
filing was $88,229.91;
(11) J arvis Products Corporation claims a security interest evidenced by a UCC-1
filing dated J anuary 17, 2012 covering accounts receivable, inventory,
contract rights, chattel paper, and general intangibles. According to the
Debtors schedule no indebtedness was owed J arvis Products Corporation at
the date of filing.

16. Current information provided by Clark Title Company reflects that real property
taxes for the year 2012, payable in 2013, and special assessments, are due Brown County,
South Dakota. The statutory lien securing payment of such real property taxes and special
assessments may not be disturbed or discharged by these proceedings.

WHEREFORE, Plaintiffs pray that the Court enter its judgment providing relief as
follows:

1. That the Court determine that the mortgage liens and security interests of the
Plaintiffs herein are the first and prior liens securing the sum of $60,443,503.64, and are prior
and superior to the liens and claims of all other parties, including claims of the Official
Committee of Unsecured Creditors of Northern Beef Packers Limited Partnership, save and
except the claims of: White Oak Global Advisors, LLC to the extent of up to Forty-Five Million
Dollars ($45,000,000.00); the interests of Scott Olson Digging, Inc. when the amount of any
such claim is determined and in the event that a mechanics lien was properly preserved by the
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timely filing of a proper mechanics lien statement; by the claims of personal property lessors
listed as defendants herein who are owed sums by the Debtor pursuant to valid leases; and to
the security interests of creditors owed sums by the Debtor at the date of filing who hold
properly perfected security interests entitled to purchase money priority in personal property of
the Debtor; all pursuant to 11 U.S.C. 506, 507 and 510; and

2. That the Court determine that the claims or interests of Diamond Vogel Paints;
Climate Makers, Inc.; Northwest Pipe Fittings, Inc.; and House of Glass, Inc. are junior and
inferior to all other claims against the real property owned by the Debtor; and

3. That the Court determine the property subject to valid leases between the Debtor
and the lessors identified in Section 15. A. herein, and the sums due from the Debtor to each of
such lessors;

4. That the Court determine whether the secured claims of any of the creditors
listed in Section 15. B. herein are property perfected purchase money security interests; and as
to any such properly perfected purchase money security interests, the sum due such creditor;

5. That the Court order, adjudge and decree that Daewoo International America
Corp.; Twin City Hide, Inc.; Wells Fargo Bank, National Association; Harms Oil; A-D Services,
Inc.; and EPOCH Star Limited are currently owed no indebtedness and do not have secured
positions with respect to any property of the Debtor; and

6. That the Court grant such other, further or different relief as it may be just, proper
and equitable.

Dated this 5th day of November, 2013.

DAVENPORT, EVANS, HURWITZ &
SMITH, L.L.P.

/s/ Robert E. Hayes
Robert E. Hayes
Keith A. Gauer
206 West 14
th
Street
P.O. Box 1030
Sioux Falls, SD 57101-1030
(605) 336-2880
Attorneys for SDIF Limited Partnership 6 and
SDIF Limited Partnership 9
,.
t' .
'
,.
CREDIT AGREEMENT
This Credit Agreement (the "Agreement") is !lllllle and entered inlo as ofiile 4th of
Noveml:er, 2010 by and between Nortbem Bea..fPaclrers, Lfmited Fartoersbip, a South Dakota
limiied partoersbip, (lrereina:fter :refumd to as "Bm:rower") of38749 1351b Street, Ahenleen,
South Dakota, 57401 and SDlF J:.imii<o..rl Pa.."!DerShip 6 of 416 Prodnclion Street Norlb,
Abctrleen, South Dakota57401, {hereinsf\er refemd to as "Lender"):
WEEREAS, Borrower bas reqoested a Loan, as h=i:oafter defined, from Lemler in
the }lrioclpal smount of up to Sixty Million Dollex:; ($60,000,000) to be filndBd by up to One
Eimdred Twem:y (120) investors (EB-5 lll'Vestms) part!J:ipl!!ing In the EB-5 Program, m=
specifically koQWJl as the Immig<Slan aJUl Nationslliy Act, Section 203(b )(5) et seq. (the
"El>-5 Program"); eod
VIEEREAS, Lender bas egro..ed to mnlre the Loan to Botrower upon and subject to the
teims and conditions set :furth herein aod the other docnments eviden.."ing and seou."iog the
loan.
NOW, THER:EFORB, in cansidetation of the coverumts and Sjltee!D.ents cnniained
hereir. the receipt and sofficlency of -which, when perful:med, are hereby et:l:nowledged, the
BOJ:TOWer and Lender hereby agree as :follows:
SECl'IONl
Loan Terms
1.1 Description of the Proiect. The projeot involved is a beef packing plaot
c=tly under conStrUction io Aberdeen, Sonth bakota (Piojec!) loeo.-ted on land eescrlbed in
Exluoit A h<:m:to ((.and), which is 1o he owned and operated by Borrower
1.2 Lcm. B=wer aclmowiedges and agrees that lfu: Loao will be funded by
Lender soleiy Ji:om investment proceeds arising out of the EB-5 Prognun and that the Lender
shall have D!l obligation 1ll make or i\md the Loan unless and lliJl:il it receives investment
proceeds arising out of the EB-5 Progt2!Il. Subject to the te!IIlS of fbls Agreemenl:, Lender
agrellS to make the proceeds arising out of the EB-5 Prognun a\laih!ble to Bcn:ower as
fullows:
A. Lender shallloilll up to Sixty Million DollE::s ($60,000,000) (the
"Loan") as the same is taised pursaam to the offering b--ing eOll!incted
by Lender llll.der tha EB-5 jltogrnm. The J<arties egree 1het Lender mey
make the :first Lollll. disbUISelllent to Bo:rrawe.t only siler Lender bas
xcceived funds 1lDlle1: the EB-5 Program in an iniiial. lllllOll!!t of Five
Mllllon Dollro:s ($5,000,000). Disbtttsements sball be !lllllle solely at
Lender's cllscretioD-
------- - ---- ......
!3. All subsequent ilisbursements or instlilll:nonts sblllJ be in the
!l!inilllum amount of Three Million Dollats ($3,000,000) or higher,
Case: 13-01016 Document: 1-1 Filed: 11/05/13 Page 1 of 37
unless otherwise egxe.."t! upon by the parties. Said disborsements shall
be mf!& BS soon prnt:!ieal.l!fter: Leoder has temcd said $tllli5.
1.3. Promissory Note, The Loan shall be evidenced by a promillsoey nOte in a :ii:u:m
l!lld subsllmce smisi'actoty to Lender rmd its legal counsel (the "Promissory Note") attached as
Exhibit B.
1.4 Collateral. A1l collateral fur the p!l)'lll.C!ll:, of all amoU!l!s 1lllll: become due
!md owing to L.otlder under this Agreement, the Promissoxy :!:<ate, the S=rity Agreement, the
Jvf.ort,aage, the Collateral Assignment and the Pledge Agreement, Bormwer agrees to grnnl
Lender a security interest in and a fust l.!eo, {Stlbject to subordinations , to Leaders in. the
amoU!ll3 listed on Exhibit C), upon all assets IWW cwned o:r berein.a:fter acquired by BOJ:rower,
including, but not limited to, ell equipment, furniture, iixtures, s=unt; receivable, livestock,
SUJljllies, cash aad inventory, es wcl.l as a mortgage an the reel estllte together wilh all
tenements, hereditaments and appurtl:nlml:e!l ihemo and aJt fud:utes, equ!J?!Ilml aod
improvemcnls attaellcd thereto or located thereon (the "R.cal Es!B!t"), !lild ell additions and
proceeds thereof. Said securlty i:nl:m:sts shell be evidenced l!lld perfuct:ed as provided in a
Security Ag=incnt (the "Sec:uri!y") and mcn:igage {the "Mortgage") in a fmm ami substance
stisfactory to Lemler and i:ts legal couoseL ln addition to the fust lien. as specified herein, all
ownership shares of Bonowerche!d by General Partoer and Lin:ill:ed Pmtners shall be pledged
as col!.areral as outlined in. the Pledge Agtoement. Far purposes of this Agreement,
the Secudty Agreea:teat, the l>Aartgege. the Collatarel Agteement, the Promissory Nan., and
the Pledge Agreement are collectively ref=ed to herein as ihe "Loan Dot:U!llellls.
1.5 Security Interest Lender shell be gran!ed a :first se::urlty interesl in all
colieteral of the plant es set fotth in. Exmclt D, (subject 1D subordin.a!ions as set furth in
Exhlbit C only), and all ownership shams of BOl!OWer held by Partner aod Limited
Partoers as set forth. in tbe PJ.e.dge Agreement
1,5 Th!:m. The te.on of tb.e Lo>m sllall be for five (5) years from 'the date the initial
L= Disbmsement is made, (hereinafter referred to as "Initial Funding Date,") The
Promissory Note shall run fur soid five yem and be do: and payable in. full :five yem :from
the Initial Funding Date, .
1.7 Interesi. Interest, shall = at a yearly xate of Three and. One-hal!Perwnt
(3.5%) on aey !Ulpllid principal belaoce until the fiill amount of prin.ci:pal bas be-...n peid.
Tntetest shall be computed on a 365-day year. I:f nat paid when due, then the prineiPal and
interest :rete sball at the defuult.tate.
1.& Origjnation Fee. Borrower shall pey an origination fee of One Percent (1 %) of
1he amount borrowed up to $60,000,000. The otigina!ion fue shall be paid after eacll
disbursetlll:Ilt of the Loan on the emonnt disbursed as described in Section 1.2 above.
------- ---- --- 1.9 Fees. B<mower shlil.l-pey iut reasoMble atiorney fees and- ocists ineurred by
Lender in furtherance of this Loan including, but not 1miled to ell documents and
completing all items neeesssry :for closing this txansaction. Borrower shall also be responsible
for any fees illcw:red by Lender .in mon.l1orlng all disblmements of :funds and lillY fu rmy costs
incurred ill obf:l!lning investor s:ppiov!!ls. These fees include, but am not limited to my
attomey fees paid to Siegel, Bamett & Schutz, LL.P. or o1her attomeys, any b1lllk fees
c:bBrged, consulting. mon!torillg or other fees cllllzged by any entity hired by Borrower or
Landor to monitor 1he construction and DJl"ration of said beef plant during 1he tmn of ti:ils
Agreement. Slrid fees shl!ll be paid fmmdiately upon dema;nd by Lender. Lender sball be
entitl.ei! to wUbhnld from any disbtJ:tSem<mt any amonnt whicll it antici:pa!los will be charged
fbrougbout tbe 1ifu oftlris Loan.
1.10 Prepayment. No prepaymeo.t Shall be an owed until an EB-5 investors have
conditional :removal of an conditions a:ffi!ctblg tbeir pen:tlllllem xesideney statns by
1he of Immigration or as agreed tlpOll by tbe parties. Once conditions.! temoval of
an sueh condi:lions for eaoh individual investor bas b>..en reeeived. _piepayment shall be
allowed m1he llis:retion of Borrower. Plepayments shall be applied first against any accrued
and unpaid inte....,st, then any remaining sum sbs.ll be s:pplied against tbe UIIJlald prlncipal
balance. Sucb prepaymen:ts sball not relieve Borrower ofth:: obligation to conlinue to_roake
any regularly St:heduled or required repsymon! of1he outstRnding indebtedn<:SE bereund..-r.
1.11 Spending of Funds. Booower agrees and wm<mts that all mey it receives
pursuant to this Agreement, shall be invested in 1he .fuljeot and only med for advancement of
tbe Project, whlcll incindes paying off of any construction loans, satist'ying liens, p=hl!ses of
equipment, supplies, land, building, or operation of 1he Project Saitl funds sbaU not be used
:for any other purpose unless agreed upon ill writing by 1he pru:ties.
1.12 Title 'Within thirty (30) days fullowing the execution cif this
Agreement, Borrower agrees to provide 1he Lender a ti'tle nommitmeat. obtained tb.1ough Clark
Tille Company, issued by a :reputable company licensed to do bnsiness in 1he
Stare of South Dakota and agreeing to insure title to 1he Real Estate in Lender in !be aggregate
amaunt of Sixty Million Dollar.; ($6{),000,000), subject only to casonn::ntll and restrictions of
record as of dete of 'this Agreemc<lt, liens fur unpaid real es!ate taxes fur cal entiaT years
2009 and 2010, if any, (fue "Title !nsonmce"), any lv.!echanic's Lien set forth an Exhibit C.
sball canse socll policy of Title 'IDsurance to be issued to Lender at Borrower's sole
cost and e><pense on or before the initial disbursement of the Lean as described in Section
t.2(A) above.
1.13 El3-5 Program. The parties acknowledge that Borrowtll' bas previously
received equity funding from. Sev=y (70) EB-5 Equity fuvestm:s (EB-5 Equ1ty Funding).
The pa..1:ies further agree and understand that 1he original EB-5 Equity Funding in the Project
is separate and disfulct from the Loan. The Loan is additional iimding to obtrun up to Sixty
Million Dalkrs ($60,000,000) in OJ:W funds, which meet 1he Loan Criteria Program set forth
by the United S!ales Departmem of Immigration and quall:!'ying for 1he EB-5 Program.
3
SECriON2
Representations and WotTI!Ilfies of Borrower
Borrower represents and wammts to Lendef thBt each of the statemonts contained in
this Sootion 2 is true, correct and complele as of the date of this Agreement, and will be i:nre,
correct and COll:lplele at and as tile credit or loan proceeds are made !Mrllable to BOIIOW<:r.
Bonower llClmowledges 1hBt Lender io relying en ot!Ch of the re.pre,.=etrtations and wammties
set forth in t:bis Section 2 as a materiel inducement to enter into and petfm:m. :its obligations
under this Agreement. Unless othe!wise 1imill:O, all of tb.e tepmetrtafioPS and
wmnnties set forth herein shall S!Jrl'lve execution and deliva.')' of fbe Promissory Note, other
Loan Documents, and funding o:f the Loan. heo!ding!y, Bouower hereby represents end
Vll!IIl3ll!s as follows:
2.1 Or!!!!ni?l!tion and Good Sttmding of Borrower. Botrower is a Sonth. Dakota
limited partnership, duly vclldly e:dsting and in good standing under the laws of
the State of South. Dalrots, and is anfucri2ed to do business in each state in whicb tb.e natme of
il:3 business :requires that it be so licensed.
2.2 fl:othocitv ofBmrowe:r. Bocrower bas full right, power and authority necessary
to ex""nte, en1er into and deliver t:bis Agreement, fbe l?romlssoty Note md the Loan
Documents, and to perform the obligations requited to be observed and performed by the
Boirower. The entry Urt:o t:bis Agreement, the Promissory Nate and tb.e Loan DQCllll16!l!s by
Borrower and its pe:rfoz:maoce bas been approved by all necessery action, including the
approval o:f its partoers in acconlance with its Cerlifice..te of Limitad l'artnersblp, Partoetsblp
Agreement, and the laws ofthc Stote ofSon!b.Dakota.
2.3 Valid Agreements. This Agreeme:nt, the Promissory Note, and the Loan
Docum.ents wlJ!, wb.ei:J. fue same are signed and dellVered m Lender, constitute legal, valid and
biJ:uling agreements fuat are en:iim::eahle against Borrower-in accordance with their !:elms.
2.4 Non-Conttayention. The =ution, delivery and peotformance of this
Agree:nen:t, the Promissory Note and tire Loan Doom:nellt5 will nnt, with or wi!hollt nntice or
tbe passage of fune, violllre any provision or an.y :reguin:mem of law or of an.y con1l:actual
obligation to which Borrower is bound (except allfue obligations owed by Bormwerm Senior
Lencl::r) and will oot :result in or require fue cres:tiOil or imposition of any lien OllllllY of fue
properties on:eveo:ues ofBoz:rower plliSU!!llt to any _provision or requirement of applicable la:w
or any cool:!:actual obligntion which Borrower or its properties are or Ill!l.Y in fue future be
botti:Jd.
2.5 Third. Pllrty Consents. No consent, anthorlzatiml or waiver by or filing with
any governmellllll agency or any otlru person, :fitm or entity not a party to '!his Agre.."ll!ent is
reouired to be obtained or made by BotraWer in co=tian wifb.fue exel:tltion or petfun:oance
0
( thiB .. 1he P!OJ;llisl!Q!Y _l{_gn;. the or
--p;,cro;;:.,;,;,., of any obligation, unde:rlnking or ag:reemeut required to be observed or
performed by the Borrower herem or tile:rein.
4
2..6 Taxes, E=pt liS ill !be 1lllpl!id tllxe5 disclosed in Exm"bit E, BC!ti'OWel' :has
:filed or =sed to be filed all fudend. lill!le, calmly and localtm:: n:bJ:tns "Which are required to
be :filed, and have pcid or caused to be paid all pexsClllll property, !eal est1rte, income or oilier
taxes, E!ld all specifl assessments, witbholdiog, conttibutions and govemmenml cberges and
levies (collectiYa!y and individually refom:d to l!ll "Taxes") a5 shown on S1l!::b. ICturos and
reports, or on any assessment received by Borrower, to ihe exl!:nt that such T= have
become due C=ept fur =Taxes not delinquent and Ta:o:s being coil1l:Stl:d as prcivided
by law, in good faith and by app.roprlate legal proceedings for wbinh reserves lmve
been provided, and as to which oo foreclosuno, sale or similar ptoceedlngs have been
commenced). .
2.. 7 Lienll. None.of !be Borrower's assets, properties or :real es!llle is SllbjectiD any
!llOl'l:g!lg<;. pledge or other lien, encumbtancc or scenrlty interest, =Pt as set furlh in Exhibit
c.
2..8 Contra$. Nciilier Bortower nor any of its properties are a party to
any agreeroent or instrutneat, (except all !be Loan DocumentB enteted into with Senior
Lender), or subject to my cberter or oilier restriction, or any judgment, decree or order ofany
comt or governmeni:El body, which could rea.'tlllJlhly be expected to l:mve a ma:tm:\111 adverse
effect an ilie ability of Borrower to observe or pcriilnn any of :its ohl.igations, nndertakings or
agreements under thls Agl:=ent, the 'l'rt>nDssoiy Note, or tho Loan DoOll!llo::z!s. BCJJ:I'O'Wer
does not have knowledge of or notice that is in defmili an !be ped'mm!!llCe, observao<:e or
fulfillment of any obligation, covenanfs, or conditions =tai.ned in any such agreemeot,
instrument, cberter or oilier :restrlclion, judgment, or order of any comt or
govetDmentnl body, which could be reesonsbly ""JlOOted to llltve Sllllb. an effect.
2.9 Litigation. Except as disclosed in Exlrlb:it F, no litigatiOll, including derlvative
actiCDS, arbitration proceedings, law snitS, governmental. proceedings or investigations, are
.Pending or, to ilie )O!owledge of Borrower., 1:hrW:cned agsinst Borrow=
2..10 Sell. Convev and Tmnsfet. Except for sales, conveyances or ttansti:rs on
commercially reasonable t=!lllS for adequate consideration made in ilie ordinary course of
Borrower's bnsiness, BorrQWer has not sold, conveyed, lzaJJSferred, disposed of, or oilierwise ,
further encumbered. my of its properties or assets within the last ninety (90) days.
2..11 Lswful1nterest. The amaunts to be received by Leorler as inle . .'-est payments
under !be Promissory Note 2JUJ/or oilier Loan Documents are lawful and are neither usw::ious
nor illegal under tho laws of 1lle Sta:te t>f South Dakota.
. .
2.12 Environmental Como!iacce. Borrower is in compliance wilb. all envi:romnental
nrotection laws in each jadsdiction where it is presently doing business, except for a small
diesel fuel spill, !be :remediation of wbicl]. is in ilie ctttrent budget and will be remedied.
. _Bo=:wer has nQt :r;;.::civ<;d m:ry I!IU'. amr
scticn or investigation, pending or c:ontewpla!:ed, per!Blning to any alleged YiolErtion of any
eii'iironmental protectlon laws wilh Iespeet to m:ry relll or personal property presently ar
previously owned by Botnlwer,
5
2.13 Borrower bas iiil:filled all obllgatians UDd..-r fue Employee Retirement
Jncome Security Act of 1974, as amended, in of any emplo:r:e bcneiitpllm maintained
for employees of Bo=wer, no repor!Ehle eVent or :prohibfn:d lr!lilSal:tion has occm:red with
to any suCh e!l:\i)loyee b=ftt plan, end all such employea benefit plans me fully
fnruled.
2.14 Compliance wjth Laws. Bonower is not in violation of any federel, state or
mnnicipal statute, law, anline:oce, code, notiCe, rnle or regulation, DOr has BOI!OWI:r :fil.iled to
obtain any license, permit, frnnelrlse or otller govemmentel. authorization necessary to fue
owne<Sbip of i:ts properties or fue caodnct of i:ts bnsinses in a 1imely = tD fue exteot
fuet sncib. license, permit, frattclrlse or other governmental anfuori'Zlrtion has become
obtailleble.
2.15 Defmilin. Borrower is not in deiimlt of any cc=t, agillemect or unded2Jcing
to whlcb it .is a party, nor has any or cironmStance occ:urred wlrich, but fur the passage
of time or the giving 9f notice, or both, would coostitnm an event of thereunder or an,
Bveol ofDefault, as defined in Section 4 of this .Ag=ment. ,
2.16 Pericits. Borrower has obtained all n=sary local, siate and lbder.ll permits
end licenses fur collS!ructlon of its project and fucilities to the extent 1fult such p=its and
licenses are obll!inahle.
2.17 Pagkers and Stockvards Act 1921. Borrower has conm!ied in all marecia!
respects with the Packers anii Stoclcyards f...ct, 1921, as lll:llellded (J U.s.C. 181-229) end )he
regulations promulgmed theretmd.e:r so that tho trust fur the benefit of ell unpllid cash sellers or.
growers of beef thereby shall not arise in CO!lllection with its purcbe.se of lll!Y such liv.estock.
:BorroWer bas not taken any action which wonld impair its ability to benefit from the trust
established un!ler. such Act in connection with any sales by the Borrom:r of beef covered by
suchAct
2.18 Job CJ:ea!ion. Borrower represents and wa:o:ants that it will meet all job
creation requjremBnts I!B UldiC111ed by the direct end indlte<:t multiplier setfurth by lNS, which
tl1mSlates to Three (3) jobs :fur every Five Hundred Tboummd D<lllms ($500,000) loaned to
the Project. A toll!lloan amollllt of up to $60,000,000. will tequire the crea1inn of Three Sixty
Hundred (360) jobs. Borrower agrees it v.ill meet the job ctea!ioc. of Three Hundred Sixty
(360) jobs witbin Two and One-half (2.5) y= after the Initial Funding Date, as rettuired by
the Ell-S Program. The parties agreetha:ttbese jobs nre in eddition to the origirulljob crea!ion
required by the equity funding already in plane.
2.19 FirstSe:les ofLimi!edP!li'tnef!l.
-- _ .Priorto.Jhe date .of this .. O.Q) EJ}.S l;!lv"l!!9r,;_@-5
Equity Investors) pun:hased and received one (I) Limited l?artnetshlp Unit in Borrower for
Five Ht.wilred Thollsaod Dollms (.$500,000} per t1IJit. Neither the BOll'OWlOr, General Partner
or any effiliate of BOIIOwer or Oenersl. Partner has any obligation to :repurohaser or redeem
6
any offue Borrower's Limited Parlneishlp Units issued to the 2008 EB-S Equity Jnvestms by
BoJ:rom:r nor any fmbilil;y conlingent or oiherwise to the 2008 EB-5 Equity Jn:vestor.s jlU!Stlalit
to any agreement or lli!der Law. In addition, Borrower has made DO tepreSelltation, wmllllty
or covenant to any 2008 BB-5 Equity Investor or c1her !bird party coMerning the completion
date, ecst of c=trru::tion of 1he imprcvemeots, the date of cornmenrement of Bcn:rcwer's
business es a pa.ckf:r, the property, the llU!Ilhcr of jobs to be ere!itecl, the continnaJ operational
costs of the COlllJ)llD.'Y once the plant bes been completed. El=pt fur any rights provided
under 1he Laws of the State of Smt<h Dakata, the Limited Partners of Borrower (aotb:lg
individually or collectively) are not entitled to remove or :repfac<> the General Partner or any
additional General Partnem.
2.20 Eooch Star.
No further borrowing shall be mede with Epoch Sll\r.
2.21 Plans and Specifi!JR!ians .
. The Plans =l Speaifu:atioDS are complete l!!ld adequate fur the Canst:ruction of the
improvements. The Plans and Specifications have been approved by all' Gover:nmcn!al
Ant.horities baying or claiming jurisdiction over lhe Prope..ty l!!ld by the beneficiary of escl:t
restcictive _covenant affecting the Property whose approval is required. To the best of
Borrower's .knowledge, the Improvcmenm, if coostructed substanfuilly In accordance with the
Plans and Specifu:ations, will fully comply wilh all applicable Laws, im:luding those laws
~ t access andfm:ili!ies fur disabled persons.
2.22 Utilities.
All utility servi= uecessary for the Coostructicn of the Improvements and the
opcrafum tboreof for their intended purposes are available at the boundaries of the Land (or
will be a:vldiable upon the completion of work show.a in the Plans and Specifications),
including telepbane service, cable television, water supply, storm ll!ld sanltmy sewer facilities,
nal:oiil1 gas and electric mcili:lies, inolnding cabling for telephonic and dElta commllllicstioo,
and the capacity m semi f!Ild recei-ve wireless commllllicalion.
The :futegcing representations and v.'l!ll'anties are in addition to the representations and
wammties of 1he BOIIower set furtlt in 1he Promissory Note em! c1her Loan Documents, all of
which are .incorpotated herein by this refereooa, and ill of wbicll sball be deemed to have
been made by Borrower at l!!ld as of 1he dlrte hereof wilh 1he same :fol'l!e and effect as. if the
same were set fOrth in the body of this Agreemtllt in their ecli:rety, em! all suoh
representations and wmant!es shall illrewise 811rYive lhe funding of the Loan and the
execution and delivery of the Promissory Note and other Loan Do=ents.
7
SECTIONS
Presentations nnd Wammtles ofLeoder
Lender represents and warrants to Borrower 1hat each of tbe stat:e.ments contained in
this Section 3 is iroe, comet and complete as ofth" dille of this Agxeemeut and will be true,
co=ct and CO!l1plete in all mal:erlal :respects at or 1lp0ll eacb. disl:n:u:semec.t of the Loan being
made to BontJwer. Lender ankoowledges tbltt Borrower is relying oc. each of the
r.>prereotations and wmanties set forth in this Secti0ll3 as a o:mterlal inducement to enter ic.lo
and perlbml i1l! obligatiollS wder this Agre:mem. Unless otherwise expessly liz:nlzeO, all of
fue repxesenlll!ions and warranties set furth herein. sball survive execution l!Ild delivery oftbe
Promissory Note and the funding of the Loan. Accordingly, Lender hereby .represents and
wammte as :5:>llows:
3.1 Organizmion and Good S!andlng of Leader. Lender is a South Dakota li:rnited
partnership dc.ly organized, validly existing and in good standing onder the laWB of the Stille
of South Dakota and is anfum:ized to do lmsiness in South Dalrota.
3.2 Authority of Lender. Loader has full right, power and aub.orlty c.ecessary to
execute, enter into and deliver this Agreement and all other Loan and to p:rform
tho obligations required to be observed and per:forroed by L<>oder.
3.3 Valid Agreement. This Agreement and all oiher Loan Do=ents will, whee.
the same are signed and delivered to Borrower, oonstitute legal, valid and binding agreements
that are enfurceahle agalllSt Lender in ac<:ardancs with their terms.
3.4 Non-Coatrsvention. The exeOO!!on, delivery and petfurmrulce of this
Agreement and any Loan Documents will not, with or withont notice or the pessege of time,
Yioll!!e any provision or any o:mtedol :rcquiroment of Jaw or of any lllJ!!erial contrru::tual
obligation to which Lander is b!llllJd.
3.5 Thirsl Pmv Consents. Except as pr<;>v.ided in this Agreement, oo CODSent,
alllhoti2lltion or waiver by or filing with aoy govemmental egeocy or any other person, fum
or entity not a pa.rcy to this Agr-...ement is required to be obtained or made by Lender in
connection with the execution or perfil= of this Agreet!lllDl:, or the observance or
peril:mn!ulce of any obligation, underlaki:ng or agreement required to be observed or
perforroed by Lender here!:n orthat1>in.
3.6 EB-5 Program. The Loan qualliied under the EB5 Progmm as an !:nvestment
that woc.ld enable Lender to obtain immigra:rt for its limited partners.
SECTION4
Afllrmatl1'c Covowurts :md Agreements
Until all oblig;.tioils of Borrower hereunder and lllldettlie Promissory Note ro:e paid
and fulfilled in full, the Bottower agrees to comply wi:th esch of the following covenants and
cooditions:
g
--'-----
4.1 Comttmetiog.
Borrower shcll cause ell of said funds advl!llced to be ...0 in con.struc!icn of the
improvements at the beef pl1111t ro be commenced and praseauted in a .gnod and workmanlike manner
and shell cause the same to be complered in aoeonlam:e with the Project Schedule and substantielly
and in accordance with the plans and sud
A.n:ht!cot or Gerum!l Conl!actor shall deliver to Lender witllin ten(! 0) days of eao.q calendar
montll end comme.ocing witlJ the mantli io which the fust advance of Ibis lcmn is made, a written
montllly stnlus report regarding the sialus of construction of improvements and any deviations .from
the proje<>t sc!Jedule and if dovialions are mad the spooific !<'ason !h=for from the Proje<>t Schedule
of Plans and Spenlficarions arul/cr Bud&et and if any davlaliODS ara made, specificeJiy expla1n and
justify the reason for such deviatioru;
4.2 Aporoyu! ofCnnstnJction_
No work nssocio!ed with the Construction of the lmprovemcnts shell be commenced by
Borrower unless and until the Plans anti Specificatior.s have beeo spproved by Lender, by lilt
Govorrunema! Authorities having or olalming jurisdiction over the Land and !mproveaumts, by the
benoficia.-y of any applicable restrictive cover_nnt wimse approval is requm.J. !!lld by any other :party
whose approval is required under applicablo asreements, and unless and until all bulldin:;.
constrUOdon and other f>=its necessary or required in connection with such work have beeo validly
issued and all re.s, bonds and any other securiiy required in co=ticn thel<'wi!b have been paid or
posh:d.
43 Qgmplian"" with Laws; Enmaehmenl;;.
The Improvements sbnU be const:moted In aocon!nnce with all applicable Laws. The
Improvements sball be construetad entirely on the Land and sbnU net eccroech upon any easement or
rlgho.of-way, or upon the !anti of other.;. Cnnstructicn of the lmprovemonts sbnll occur wholly wtthin
all appfioable building restriction lines and sat-backs, however eslnhUshed, and sbnJl be in strict
compliaru:e with ell applicable use or other reslrictioss and the provisions of any prior agreements,
decloratioos, coverumtsand all applicable mning and subdivision ordinWloes and regulntions.
4.4 Insusctjnns' Coeperation.
Borrower shall petmit representatives of Loader nnd the Consli\Iction Consullanttn enter upon
the Land, to inspe::t the Improvemeots.and any and all !llll1erials to bc um:d in connection witlJ the
development oftbe Land l!lld the constrUction of the Improvements, to cxmninellll detailed ple:ns and
shop dmwings nnd sbnilarmsh:rialns welli!S all recools and books of account mainmined by or on
beimlf of Borrower relafing thereto nnd to discuss tho affairs, finmices nnd au<:oW$ peru>ining. to the
Lolli! and the !mprov=ents with r<:presentstives of J3arrower. Bazwwer sbnJl at all 1imes coopCl:ltte
nnd cans: the General ContrectDr and each anti tsler'J one of its subcontractors, sub-subcontiOc!O<ll aod
material suppliers 1o nooperae with the r-..pr.:s=ntlltives of Lender aod the Construction Consultwrt in
connection wilh or in aid oftbe perfurmnnce ofLondor's functions under this Agreement Ex!:ept in
the event of an em'lJO'lY or during the occurrence anti continuance of a Dofiwlt or Event ofDeli!ult,
L:nder shall give Borrower at least fcrty-eight hours' notice by telephone in each inBtance bofure
-ciibi<iiig upen-tlJc1.anc andlo' to{eicisfiig -. -- -- --
(a) B= shall furrjsh to Lender, promptly on dcml!llll, aey contra<:ts, subcontrru:ts,
sub-sulx:on1:nlotors, bills of sale, 5tll!ements, reeeipted voncb:rn or other agreements relalingto the
development of the Land or the Construction of the!mp'rovemeuts, including aey such i-s ptmrullllt
to which Borrower has aey ohrlm of title to aey malerlals, fuct:nres or other articles delivered or to bo
delivered 1o the Land or lllcorporated or lo be incorpo!'llled into the lmp."ovements, Borrower shall
furnlsh to Lender, prillllptly on demand, a yorl:fied Vllitten sta\llmerr'., in soch form and detail as Lender
may require, setting filrth the nam<:S l!lld addresses of all conlrncltlrs, :robcontra<:tors, sub-
subcontnv:!oOl nod suppliers furnishing labor or materials in tha development of the Lnnd or the
construction of tha Improvements end showing all amounts paid fui' labor Blld melcrials and all items
of labor aod materials furnished or to be furnished fur whiob payment has not been made snd ths
amounts to be pald tbetelbr.
(b) All oontr3cts for the performance of ;;.'Ork. or the supplying of any Ish or, ma!Erlnls
or services ibr the design or Construction of the Improvements, shall provlde !bat all rights and liens
of the applicshle coo!nlclor, engine::r, supplier, surveyor or other party and any right to
re."l'!ove removable Improvements are subordinato to Lender's rights and lions, shall requ!se all
subtontraots, sub-subcontracts and pmohase ordCIS to contain a piO'Iislon Wlrlving to the extent
pennil!ed ,by appEcshle lltw and, to tho e;dent not waivable, subordinsting the subcontracllJrs', sub-
subeonltaetors' snd mechanics' and marerialmcn's liens and 1!lJY right to remove removshle
Improvements to Lnnder's rights and lions.
4.6 Pnvment gnd }letfonnence cf Contractual Obligations.
Borrower shalt perform in a timely zruumor all of hs obliglltioos under the
the Cnnstruction Corrtract and any and all othar conttacls and llgteillllentll Niated to the
constrUction or opemtion of tile Improvements, and Borrower will pay when due Ill! bill& ibr S<IVi=
or labor performed and m.atorials supplied in connection with tho development of the l.aod end llw
construction of the Improvements. Wrthin sixty (6ll} days after the filing of any mechanic's lien or
oiher lion or encnmbrance against the Property, Borrower will promptly discharge lile same by
payment or filing a. band or as otherwise as permitted by Law. So long as L<mder's first prlarily
security interest in the Property snd all other assets pledged 1o Lander has bee!! pro-d by the filing
of a bood or otherwise in a manner satisfuctory to Lender in iJs sole dio=:tion, Borrower shall have
tho right to contest any chUm, lien or encumbrance, provided that Borrower does an diligently and
without prejudice to Lender or delay ln completing construction oftholmpro\llO!llonts. BOO'OWer shall
fhmish to Lender prior Ia cofumencement of work associated with Construction oflho Improvements
e-.;idcnce, in fucrn, substance und amount satisfactory to Lender, of tho bonds proeurnd
fiJr all general contnv:tors and malcrial subcontractors and supplietS naming Lender as an obug<>e
unl"""S ammgl'men!s satistkotory to Lender hove been made for payment by Landor directly to any
such general contractor, sub:.ontrnctor or supplier.
4.7 Correction of Constracljop Defecls.
?romptly following any demand by Leader, Boirowor sboll correct or cause the canect!on of
any sttuc1llnl defects in the Improvoments, any wotlt that !lu"ls to comply with the requirements of
"'tion 4.3 and. any m>l;riJll .. !l!!Yi!J!!ons ii:o!ll the_ PliJ.'lS .,-.g n_ot
in wrilh>g by Londor.
10
4.8 !nsurance.
Borrower shall maintl!ln the following lnsnnmce at its soli: cost and expense:
(c) Insurance. against Casnalzy to the Property un.W a policy or policies covering such
rlsla! as aia presently includad In ";pccialfcrm (alsa as "all risk") <<'<:rage, includiJlg such
rlsJa! as are ordin1ily insured against by simll.r businesses, hut in my event including fue, lightnlng,
windstorm, bail, explosion, riot, riot .!tending astrike. civl1 commotion, damage from aircreft. smola:,
vandalism, mailoious mischief and acts af terrorism. Such lesurance sluilllll!!llo Lender as mot!ll"gee
and loss payee. Unless otherwise agreed In wri1111g by Londer, uoh insurance shall be fur the filU
imrurablc wlue of the .Property, with" deduc!tole lfany, sati:rliu:ttny to Lender. No policy of
insurl!!lcc hall be written such that tho proc=d51herecl' will produce Jess than the minimum OOVerngll
required by this Se<:tion by r::>tSOn of co--illSillnll= provisions or othorwise. The term ":full inSa!able
value" means one hundred pen:;elll: (100%) of tho w:tu.al replacement cost of the .Proporty C=!nding
foundation and el<e:a>/l!ll011 costs l!lld costs of underground flues, pipes, drains l!lld other uninsurable
itoms),
(d) Compn:hwsive (also known as commerciRI) gnnsral lishility ln=ce on . an
"occurrence" hl!sis against claims fur "per.;onal injury" liability ar.rl liability fur death, bodi]y injwy
and damage ro property, products ll!ld completed oper.t!ions, wtth respect tD covemga limits
satisJi>ctOl)' to Lender wtth respect to any one occurrenc< and the aggregate af all occurren= during
any gien annual policy period. Such inmmmce shell name Lender as an additional insured.
(e) Workets' coropetlS1llion insuzanec for ell employees ofBtlmlwer in such EillOUUtll! is
required by Law and including employer'$ liability insmance, if required by Lender.
(f) l!llJ' period of construction upon the .Property, Borrower shs.ll maintain, or
=so others to mnlntain, builder's risk lnsurenco (non-tepar1111g tbnn) of tho type c=rnarily =led
in the cese ofsillUlarcnnslnlotion fur one hundred pcn:ent(l(J{)'*) of tho filU replacement cost of work
in place and mamrials stored at or upon the .Property.
(g) If I!! llilY time any portion of any structm:o on t!te Property is insurnble against
Casualty by flood and is IOC!rted in a Special Flood Ea!ztf Area under the Flood Disaster Protection
Act of 1973, as amended, a flood iosi!I1l!lce policy in furm and runount acc:::;>tl!ble to Lander but in no
amount lesa dtan -rlte amount sufficient to meet tho requirements of epplicable Law as such
requirements may from time to time be in effect.
(b) Loss of rental value insmance or business interruption Jnsuranco in an amount
acceptable to Lendar.
(i) Such olh<r and further in= as may be required futm time to time by Lender in
order to c<>mply with regular requirements and practlces ofLeoder in slmiiartmnsactions Including, lf
required by Lender, wind insunmoe and eattllquake ins1m111oe, so long as l!llJ' stu:h insuzance Is
generolly available at commercially reasonable premiums as <letermined by Lenderfutm time to time.
(i.J) Tn addltinn to the furegclng, Bom>Wer shall cause 1be Genentl Comrnctor 1o provide
- _ntainll!in. (<:OmJI1ercial) gen=l liabUity insurant:: and wcrl=;' compensation
inSUI'l!l1CO fur all employees of the Generaf"Ctii!Lractor !ile."lfug,. ii:SpCi:ffircly;lho ""lUii'emelllS or-
Subsections (b} and (c), above.
11
(i.2) Bach policy of insurance (i) shall be issued by on or more insunm01> companies eech
of which must ba"" anAM. Best Cmnpany fmencial and perli>rmance mtfng ofAlX or better and =
qualiiied or anthon zed by the Laws of the Slat<: 1o a.'lSUme tho risks covered by snc!t policy, (ii) with
respect Ill the insurance dl:scrib..d under !he preeedlng SubSect!Q!ll1 Cal, [d) Blld (e).sha!l have attaahed
theretO standard non-ccntributmg, no!l-"'J)crting mortBagee clauses ln faVor of 2nd entitling Lender
without contribution to colleot any end all prce=ls peyable under such inslltllllce, eilhor as solo payee
or as joint payee with Borrower, (iii) shall provide that such policy shall not he cmleeled or moulfied
without at least thirty (30) days prior written notice to Lender, and (iv) shall provide that any loss
otherwise payable sbllll he payable notwltilstllndlng any act or negligence of Borrower
which absent such agreement, rco"lllt in a forl'eituro of all or a part of such insuranoa payment.
Borrower shall promptly pay cll premiums when due on such inst!l'allCe and, not less then t!tirty (30)
days prior to tho expiration dntes of each such policy, Borrower wlll deUver to Lender occoptsble
evidence of insurance, such as a renewal policy or policies marked p,premium ar other evidence
salisliwiory to Lender reflecting thot all required insunmcc is current nnd In force. Borrower will
imrned!mly give Notice to Lender of any CllilceTiatioa oi; or ohanga in, any insurance policy. Lender
shall because of accepting, rejecting, approving nr obllrining insnnmce, incur my liability for (A)
the e><istence, nonexisteace, form or legal sufficiency lbereot; (B) !he solvency of any ins=, or {C)
1he payment of losses. l3onowor may slllisfY llll)' insurance requirement hereunder by providing one
or more "bll!llkl!t" in.s= policies, subject ro Lenlkr's approve! in each instance 1!!l tn limim,
coverages, forms, deductiblcs, incoption and expiratlon dates, and cmcollation provisions, A
summary of the insurance cover-ages arc set forih on Sc:hednle 4 hereto.
4.9 Adfpstnjent ofCondem!llltion !Wd lll5ll"""" Claims.
llcuower shall give prompt Notice to Lander of any Casualty or any Condemnatlan nr
Coadernatio!L El<t:ept as provided below, Lender is anlborize<l, at its sole .,d sbsclute
option, to commence, appear in and prosecute, in its own or Borrower's name, any action or
proceadlng ndatlng to any Coad0!1UU1tlon or Casualty, and to lllB.ke proof of loss for and to settle or
c<lmpromisc any Claim in C01!lle:itlon tl-.enmitb, In such case, Lender sbcll bave the right to
ull Condemnation Awards and Insnnn::e Proceeds, and may deduct 1hareftom nll l"'Yroents of its
Expensas. HoweVer, so long as no Event of Delillllt haa oct:1ll'red and is lhen continuing, and
Bomlwer is diligentiy pnrsuing Its rights and remedir:s with rr:spect to a Clcim, (I) Lander will obllrill
Borrower's wiit!lln consent (which consent shall not bc Ullr':aSOnably withheld or delayed) befOI'e
making proof of l= fur or settling or compromising such Claim and (ii) Leader allow Borrower
within a =nablo per! ad of !fmc to mak<> proof cf!D!!lt, settle or ccmptQlllise any Claim below lhc
Lass Tiu-..!lholrl. Bocrower agrees to diligantly l!SSt:rt ils rights and remedies with respect to each
Clilim nnd to promptly pursue the. settlement and CO!tljlrcmise of each Claim, if !he Claim in excess of
the Less Threshold, subject to Lenrler's which approval shall not he lll:!reaSOil1lbly wiJhheld
or delayed. Notwilbstanding llll)' prevision to !he contruyin thls Agreement, if prior \O !he receipt by
Lender of my COllden:nolicn Award or lr.st!l'llllce Proceeds, the Property shall have baen sold
plll'SUilii! to tha provisions of1he Mortgage, Lender shall have !he right to receive sucb. funds (a) to the
e=nt of ony deficiency fonnd to be duo upon such sale with in- thereon (whr or not a
deficiency judgment 0111he Mortgsga shall have been sought cr recnvored or denied), and (b) to !he
extent necessary to reimbnrse Lender fur ils Expenses. li any Condemna!ion Awards or !llS1ll1lllce
Proceeds are paid to Borrower, Bom:!Wer shall recmva !he some,io trust fur Lender (other then Net
Proceeds below tbe Loss 'Ilueshold so long as na Event ofDefauh has ocemtcd and i continuing) and
witltin .toll (10). deya Edlor Botrowet's receipt of any Coademna!lon Awards <ir Insurance l?rocaeds
(allier than such Net Ptcc'e..-ds below fuc Loss Threshold), Bocrower shall deliver snch awards or
proceeds 1D Lender irt the foon in which they we.e received, together wilh llll)' endorsements or
dneumen!ll tlu!i may be necessary tl> affeetivcly negatil!tc or tr1!llsW fuo SllDle to Lender. Borrower
agrees to ox<cute and deliver from tlrna to time, upm the reqoest ofi.endar, snchlilttber instrun!ants
12
or doouments as may bo requeslfxll:)y Lender to eoniirro the gnmt and 2SSlgnment to L011der of any
Condemnation Awards or Insunmetl Proceeds.
4.10 ptilmon ofNeiPros:eeds.
Gl All Net Proceeds of tho L<lss 'l.'lueshold most. bo utilized either fat payment of tile
Obligations orfor the restmation of tile Properly. Net Proceeds may be ul!1ized iortho restoration of
the Property only i no Event ofn.fuuh shell Oldst and is then continuing, and only if in tho reasonable
judgment of Lender {i) there has been no material ndv"" change in !he Borrower's abinty to
complete Cor.slnlt:tion of tho Improvements in I!Ccordnnce with fuo Project Schedule, the Budget tmd
Plan Spe::i:ficalioos or the financit!l viability of the openttioo of tho Improvcmcnts, (ii) the Net
Proceeds, together with other funds deposiied with Lender fur that purpose, ""' sufficieot to P"Y !he
cost of the rcstorntion pan;tUUJt to a budget aod plans nnd 5Jlcci:finatioos approved bY Leeder, and
(ill) tha restoration can be co.-np!eted prior to Matnrity Date <Uld prior to the date required bY tho Me
Out F!!lllllclng Arrangements. otherwise, Net Proceeds shell be utilized fur payment of the
Ob!igatimlS.
(k) If Net Procds ore to be ub'Ji:md fur the restorntica of tho Properl;y, the Net P.rocoWs
m!lSC be deposited in an int:rest-bCMlng <=aunt established by Lender with a finnncial institution of
Lender's choic:, which aecount will be assigned to Lender as additional security for the Loan.
Disbur.;ements of fJnds from the account wiD be made in a =r conaisl<mt with, and subj""t to, tha
n>quiremants far ihe funding of advances of the Loan tmd tha leans of !his Agreement xegarding !he
disbumement ofLoan proetleds.
4.11 t,ooagement Kev Pern9nnel.
Borrowc: nt all times shall provid fur competent and responsible lllllll"gelllent and operatUm
of the Properl;y. Borrower shall natUY Lender, in writing. prior to the hiring of any new Senior
Management Personnel of each of Borrowor or the Partner or tha Amendment of any
subst.antlal terms of the employment of sald Senior Management Personnel. The hiriug or chanJling
tetmS of employmeot of any such Senior Management Perstlnnel shl1ll bo nhject to Lender's prior
written approval, not to be unreasonably withheld or delayed. Any Sonier Managemeot Per><>Dnel
con- affecting the Properly must also be approved !a writing by Llmder prior to e=:ution of the
same. Any termination of Seeler Management Personnel shall be subject to notice to Lender;
however, Borrower need not obtain prior written approvt!l.
4.12 BO!?ks and Reconjs: Fineneja[ 8!a\j:m$ Thx Returns,
Borrower will ke-.p and maintain full ned BCeunde lxlol<J; and records administered in
accordance wlth GAAP, consist<:utly appli:c<!, showing in detail the earnings and e;qJenses of the
Property a.,d the ope:atlon lherco BomJWer will keep and maintain its lxlaks and records, including
recorded data of any Jdnd and regmlless of !be med'lU!ll of' recording, at the address of Borrower set
:fulth in Sectign U. Borrower s!nill permit Lender, or any Person aUihorized by Lander, to inap<ct
and Bl<llilline such books and records (regardless of where main!aincrl) and all suppcrtlng vouchers and
data and to llllllao copies and eodnlctl th""'from a1 all times and as o:&n as. may be
requesw:l by Lender. Borrower wru fum ish or = to be furnished to Lender annual fillllllcial
.-mcru:s, bala,n<:o and ln"'?;D_ 10r ".9ch .and tho
Property, within nlnety (.90) days e:iler each f!SC3l year end fur the roapaotive reporting party. In
addition, Borrower will furnish or causo to be furnished to Leeder, with reasonable pmmptn.ss (but in
any evetrt withio. :five (5) Busineos Daye), such Interim financial 3!lltcmenis of Borrower, each
Guaraotor lllld the Property, together with such addilfont!l Jnfurmat!an, reports or sl:alcmenm in
connection thcrcw;tn, as Lender may from time to time request. All :financial stot=ents must be ln
funn and detail acceptable to Lender and must be cemncd "" ro accumcy by Bon:owcr or the
respective Guaranlor, as tho case may be, and mtist be [auditedirelli"""'d] by alllltionally =ognizcd
independent cettifud public accountlng iimt. Borrower shall provide, upon Lender's reqnest,
convenient facilities for the audit lll!d vecificalicm of any such sto!1oment. All certificailons and
signatures on behJ1If of eorporati-, p211nernblps, limit! tiebility companies !llld other entiti<:s eball
be by a reprosenllltive of the .reporting party se.tlsfuctozy to lender. All :financial stnmments fur
inrlividuals shall be en thencum!llt personal :financial statement ibrm or in another furm
.satisfuctrrry to Lender.
4.13 Bsroppel C!:r!ificates,
Wrthln tl>n (1 0) da:f.i after any request by Lender or a proposed assignce or purcllaser of tho
Loao or aoy lnw..stthetein. Borrower shall certify ir. writing to L,ender, or to such proposed assignee
or putebaser, the then unpaid balance of !he l!lld wltcther Borrow-...r claims tray right of delimse or
setoff to the puymeot or perfurmaoce of aoy of the Obligations, and ifBoil'OWOl' claims any such right
of defur.se or setoff, Borrower shail give a detniled written description of such claimnd right
4.15 Lenders Ri2hts to Pey and Perfonn.
If. afb:>r any required notice, Barrowor flnls to promptly puy or perform any o!!ha obllgntions
owing or due to any third party in coon.,tion with Construction of the Improvements or otherwise
re!Jtred to the lnulsaetiODS contemplctnd by !be Lonn Doouments Within any appliceblo grace or cure
periods, L=nder,, wllhout Notice to or demand upon Bc<rOwcr, and witimut waiving or releasing nay
snclt obligation or Dafiwlt, may (but shall ba tu1d,.. no obligation to) nt any time 1hereaftar makB ancb
payment or purfumt such net fi:lr the ecooUDt and nt the <!X.pense ofBOtl'OWOr. Lender may onlxlr upon
thlll'roperty tbr thet putpcso and bike sll action thereon l1S Lend,.. considers necessary or appropriate.
N. the option of Lender, i'ollowing the o=ce and during the continuance of an Event ofDofunll.
Lender may apply ;my uodisbur.red loan proceeds to ihe satisillctioo of the omufitions of the Loan
Documents, irrespective of the allocation of such Loan pr=cds in tile Budget. Without limiting the
generality of tho furcgoing, Lender may puy directiy from lhe proceeds of the LDU!l all inl=l bills
rende<ed by L=nd:r in CO!Uleetion with tho Loan, end following !he =um:nce and dnrlog the
oontilUJI!llce of an Event of Defuult Ill">' melle advllilces direotly to the General Contractor, the titla
ccmpzmy, any subccnt:r'!rotDr
1
sulrsubcontractor or material supplier,. or to any c:if lhem
jointly. The excoution , hereof by Borrower sbllll, and horaby does, ccmrtitullo an irrevocable
l!lllhoriza!ion to so adv= th"' proceeds of tho loan. No further di,Uon or aulhorizotion from
Borrower shsll be nocossary to wammt such di=t ndvaru:es. The Loan Amount sbaU be secured by
tr.e Mortgsge and o1hcr Security Documeots end shall sa&fy 'the obligelions of Leader b::reunder to
the extJ:nt of the amount of the dlsbll!Selllcnt.
4.16 Relmlrursement; Interest
If Lender sball incur any :&qrenses or pay any Claims by """'on of the Loan or tlte rights and
r:!!lledies providnd under the L02ll Dcwumonts (reglll'dless of wbnd!er cr not noy of the Loan
Documents o:<PI=ly prov!de fur an indemnillcation. by Borrower against such Claims), Lender's
puyment of such E:cpensos and Claims shall advances to Borrower whlcl> sba!l be paid by
. :Sorrowllr !0 :fi!1m ..the.d.ete jnCltlf.[lOd lll!lil full
at the oo of inte= then appUcable to 'the loan under the llmns of lho :Noll>. Bach ndvaoce shall be
'""""'d by the Mortgage and the other Se..."Urity Documents fuUy as if made to Bcm:>wer, regenlless of
the disposition thercofby the party or parties to whom such ndvaoco is made. Nctwitbstnnding the
fumgcinf!;, howavcr, in l!llY action or pn=nding to fureclose lhe Mortgnge, to =is Lender's rights
14
wltb respeot to any other Collateral or 1D =over or the obligatiOll!, the provisions of LAw
governing the recovery of costs, disbursements end aliOVI!!tlC<:S shall prevail u!!.e.l'fu:te<l by this
S"'tlon.
4.17 Notification hv Borrower.
BQriOwer wUJ promptly give Notice I:D Lender of the occurn:nz:e of any Default or Bvent of
Default h=der or under any of the other l.oM Doouments. Bom>wer will alsc promptly aivo
Notico lo Lender of !UlY claim of a defuult by Borrowe:, or any cleim by Borrovrer af a deflullt by "any
other party, under the Architect's Conlroct, the Construction Contraet nnd any other contracts with
J'l'SPec1 to tho Constru<:tion of tile Improvements. If none of the furegoing avenb! hns ot:ll1ll'rlid, tho
chioffinnnnial officer ofBorrower shall certJzy thereto to t.ndl>r in writingwhlch sbsll be delivered to
Lender, together with tho delivery of the annual Jinancial st:ateml:nt and any interim financial
statoment refern:d to in Section 4.12.
4.18 lndemn!fieation by BOJtOWer.
Borrower agrees to indemnlfy Leruler and to hold .Lender b1lrmless from end against. and to
defend Lender by counsolapprovnd by Lender aga!nsl; Jl.l1)' nnd all Claims direct!y ar indlR:ctly arising
out of or resulting from anY transac-tion. omission, event or cirelJIJlStanCe in any WfrJ connected
wlth the Property or the Lonn, including any CIWm arising out of or resulting from (a) const:ructlon of
any rmprovcments, including any defeulive workmllllShlp or m.alerials; {h) any iaillll'Z> by &JroWer to
oomplywith the requirements of any Laws or 1o cam ply with llDY agreement tintt applies or pemrns to
the Property, including any agreem""t wlth a broker or "finder" in connection with the Loan or other
fu:ancing of the 'Property; (c) "'"l' other Delilnlt ot Event.cf Doiault hereunder or under sny of the
other Loan Documents; or (d) sny assertion or allegatlO!ll:iw.tLender is liable for any act or omission
of Bo:rower or any other Pernon in conneetion with the ownership, developm.nt, Jinanclng, leasing,
operation or sala of the Property; provided, howeyq. that Borrower shall not be obfigated to
indemniJy Lender with respect to a.T;( Claim arising solely from the grosa negligo""' or willful
miscooduct of Lender. Tits agreemen!S end lndernn!fieat.ions contained in this Section hall apply to
Claims arising both beibro and after tlJe repayment of lhc Loan ami shall survive the r<:Jl"yment of the
Loan, any foreclosure or deel!, ll!!sigumeot or convey= in lieu tbeteaf and any other oetlon by
Landedo enforce the rights and remedies of Lender h""'under or under tlJe other Lollll Documents.
4.19 fees !llld E;\pensos,
Borrower shall pay all fees, obazges. costs and exponst>s reqnit'd to satisfy tl\e condiaons of
the Loan Documents. Without limitation of !he foregoing, Borrower mll pay, when due, m>d if paid
by Londer will ra!mburne Len dar on demand fur, ail b and expenses oflhe Construction Consultant.
the title Jnsurer, envltc!11Dental engineen;, apprahers, snrveyars lllld Lel>det's counsel in CllDDecticn
with. the closing. adminlsttatloc, modi:lkatian, moailoring or sny "warlrouf' of the Lea.-, or the
en:fur=neotof'I.Mder's cights 1Uld remedies under sny oftlie Loan Documents
4.20 Appraisal!;.
Lend or may obtain from time to time en appraial of all or any part af lh Properl;y, praparnd
in accordance with written inst:ructlons fu:>m Lender, from a tiird-party npproiser satisfilcloty to, and
- engS.gnd direclly by, l..cnder. 'Ihe cost of one siicli spprefsel ob1Bfued' by Lender in cal:li calenaBr year
and !he cost of each Stloh appraisal obtained by Lender :tbUowing the occllliiOlloe of .an Event of
:Oefenltshall be borne by Borrowennd shall be paid by on demand.
15
4.21 Prjrtgjpol Depository.
Borrower shall maintain wilil Great Western tmd Wells Fargo Ba.n.l<s all of its prillcipal deposit
aecounts for the maintenance of business including the Borrowet's Deposit Account, wh
management, operating acd administrative deposit aocounts, all of which iiCCOIIliiS sball be subject to a
Depcsi Aci:oont Control Agrcomont ln favor of Lender. Borrower shall not maintain any other
depository accocnts without Lender's prior written cnnsent thcmlo wbioh, if to, shall be
subject to a DepositAc1:ount Control Agreement in favor nfLender.
4.22 Board Rcnressntation.
From end ofl:lor the Closillll Date durillg the il:nn ofihis Agreomeot, a rep=tntive ofl.euder
will be notified of, and shall be ponnltted 1c attend, each of Borrower's and eocll Guarm>tor's boards
of director meetings (or the eq1llvalontthoreof} ns an obs....,.,..
4.23 Compliance wjfu Paclcem and S!ook;yatrl Act Etn.
Borrower shall (a.) eootplete all Construction of Improvements l!Ild other pro=es tmd
proceduros needed to commence Borrower's b!!Siness as a paclrer at the Property, (b) upon
comm!lilcement of BoTTOwer's busioess, oponrte es a packer in fall compliance with Chapil:r 40-ISA
of the South Dakota Codified Laws, the applteahle regula!inns, ordem end directives of !he South
Dala:rta Anima!lndus!Iy :Scam, the Packers and Stooky!!Us Act and its applieahle regulations, (c}
obtain, maln!Wn end timely renew all licenses, pennits and bends necessary to opcr!!llon !he business
as a paclwr, (d} timely Plo/ for all acquired !Ivestook so as not m griU!l', incur or BUffer the creation of
arry lien in mvor of livestock seller.; that is unpald01Jlsida !he otrlinar,y COI!f'S:' ofbaslness, (c) maintain
sell: title to all purchased livestoclc. (f) SlllisfY all of the Food S=il)' Act, tho Puck=
and smclcyarns Aot sofficient to olrlllin clear title to all pUiclmsed livestock, (g) comply with all
emplO)'Illeot end labor laws with nospeot to the Eoxrowet's lahar fon:o, (h) Sil!iszy and comply With nll
procedtues, reguln:ioos, certification clements and dim:tives reqaired in the slnughter,
processing, pallkaging. storing and shipping of livestock aod th resulting meat products, wul (i}
provide ccntemjlcreneous notice II1 Lender of llilY and all claims on any bond and any and nll
wamfugs. comp!ience directives, order.;, inspection reports, notice of violations orreyooation,
and commenc..-ment of any administnu:ivc proccedillJl r.:laled to any pennlt, bond or license e:ffi:cting
fue ful:ility or Borrower's opernlion as 4 packer.
4.26 Deoosits to Balance Loan.
If at any time Lender shall determine that (a) tba proceeds oftbe Loan remaining to be
ad'll!llcerl for any fule item within the Budget are not or will not be sufficient to pay, in a
timely = the amount of such line item n:l!lltining to be paid, and (b) tba deficiency
CIU!OOt be :remedied by a reallocation of budgered amounts plliSllant to Seqtlon 2.2. than
Botrowet shall daposit into BotroW!!l:'s Deposit Accoun:t ibr the bencilt of Lender, within ten
(10) days from the effective dam of a Notice from Lender requesdllg such deposit, :limrls in.. an
amount equal tn the deficiency. Suclt funds shall be held in su.ch Bom>WlOr's Deposit
Account, which shall be an interest-bearing accounts, wi!h ell acc::ued inlarest to became part
... <lfJ:l_Om>Y&'S <JD.l!n.Y
such deposit as its lw::cmB (and, ifBilt!mwt is a p!!Ilne!llblp or other pass-through enlity, the
income Qfi1s partru:r.s, members or beneficiaries, as the ease may be(, and shall bo the owner
of ell tiimls on deposit in. !he BotrCWbr's Deposit Account for fedeial. and applicable slate and
lccsl tax p!IIJlOses. Lender shalllm.ve 1he =l.usiYC right to m!lllage and con.trot all funds in
. 16
the Boo:ower's Deposit Acco!lllt, but Lender shall have no :fiduciazy iiu!y wilh respect tJ:i such
funds. AdVllllCCS of the deposited funds will be msdo from time to thno fur lhe payment of
deficient line item lllllOunls, prior to the sdv.mce of proceeds of the Loan ftrr such amounts.
Advances of lhe deposited funds will be subject to the terms of this Agreeme:ll regarding
adYances of lhe Loan. Aey accollllt :fues and charges may be deducted from the bsbmce, if
any, in the Borrower's Deposit .AJ:count. Bonower grants to Lender a =rlty interest in the
Bon:ower's Deposit Account and all sux:h deposited funds hereafter deposited to such dCJlosit
account, and any proceeds thereof, as. security fur the Obligations. Sul:h setmrlty interest shall
be governed by the Unifurm Commercial Code of the Stale, and Lender sl!all have available
to it all of the rlgb:ts snd remedies available to a secured :party thereunder. The Borrower's
Deposit Acoount may be established and held in such name or .names as Lender shall d=
ap,prcpriate. incloding in the name of Lender. Borrower hereby cODS!itates and appoints
Lender and any offu:er of a,gent of Lender its irUe and lawftll attomeys-in-:tilct wilh full power
of substitution to open the Borrower's Deposit Account end to do any arul evazy act by Law,
Borrower hereby 1'!!1i:fies all that said attotDeys shall Jawfblly do or Cause to be done by virtue
hereof It ia Ullllerstood and agreed lhat this power ofeltolllflY, which shall be deemed to be a
power coupled with an lnterest, ca:anot be revoked.
4:1.7 AECOM:Reoort.
As described more fully in the dtaft Phase I En.viromnen:tal Site Assessment and
En.virownental Compliance Review ofNorthem BeefPacl:ers, AberdeetJ, SCltlthDal:oi2, dated
May 7, 2010, :prepsn:d by AECOM Tecl:wi.eal. Sexvices, appitlXi.mately 800 gallons of diesel
:fUel was released 011. the Land in August 2007. L!!D.der ondsrstends that fu" diesel imjlal:ted
sell and cause such soil to be disposed of off-site in ru:eotthmce with applieahle Law and tako
all other investigation and remedial actions (collectively, such =avation, o:ff'-site disposal,
investigation arul remedial actions are refex:red to herein as "Response Actions" to the extent
such RespO!lS<I Actions are (i) required pmsuil!ll to applicable Law or by a Governmentn!
Authority or (il) :requested, in writing, by L!ill.der. Ill. ordarto COYer the cost of sut:h Response
Actions, the amount of Thirty-one Thousand Dollars ($31,000} shall be included in fue
Budget. . Tbe Borrower shaD not use the $31,000 for my pmpose other 1hlm to cover the cost
of Response .Actioml as doscribed in thia Section 4.3 without the wril!en consent ofLander.
. .
4.23 E:dstence. To preserve and maiutaln the otglllli.za1iomd existence, tights,
franchises, licenses, ttademarks, copyrights and prlvilegos ofBm:rower.
4.29 Sale. Merger or Consoli<jclion. To not liquidate, dissolve, merge or otherwise
ccnsclldate BOJ::rOWer with or into llilY other entity, or sell, lease, transfer or otherwise dispose
of all or l!ll'J substatttial part of !he assets ofBorro'ivl:r, without Lender's approve!.
4.30 Finencjgl Staleznents. Borrower shall provide Lendllr with quarterly :fioancial
statemelli.S, wbicb. set furth owner's equity, income md cash flow for each qUllr!er, certified
-1>y a.responsible officer. At t:b.e-end of the ye.sr. Borrower .shall pro\dde. a:udl!:e<L:finaudel
statements tn . Lend..r which confoon with General Accepted Accounting Ptinciples. Ssid
fulancial stlltemen1S sba!l be provided Do 1alctthan March 31 of each year.
17
. 4.30.1 Borrower further agrees to prepare yea:rly Ie)lOrts as specified by
Lender setti:og furilJ. the operation, job creation aiJd other :iillancial
infurmatioo. CQ.!lCe.[Il]ng the operation. Saiti zepoits are to be :provided at the
s.ruo.e time as the !!lldited iinmlcW statemems.
4.31 L'!spection. To pemrit Lender, or my employee or agent of Lender, upon at
least twerrty-ibur (24) hours telephonic notice, at any time during regular business holliS 10
inspect tbe:propert:ies and all books ofBor:rower.
4.32 Indebterlness. To noi incur, pennit to remain ou!lrtanding, assume or in any
way beoome coi!lli1ittl;:d for indebtedness in respect of bon:owed money, except: (i)
.indebtedness iDJ:urred hereunder; (!.l) tl:llde debt incur:recl fur edequate consideration, on
oom:mercially reasonably t=, and in the usual ancl normal course of business; (lii)
indebtedness approved to Senior Lender; and (IV) illdebtednesadiscl.osedinExblbit C.
4.33 To not =te. suffer or per:rnil. to e:dst any lJen or CllClilllbnlnce of any
kind or rurtnre upon any af its assets now owned or hereina.trer o'M:led or ru:qnlred. except for
(i) liens, mortgages, and =mbnuu:es in :illvur of Lender; ('U) indebtedlless OW"'...d to Senior
Lender; (ill) liens for taxes, assessments and other governmental eh.axgea JJDt yet due orwmcb.
are being contested in good :fuilh and for wlrlch reserves ha:ve beeu IIJllde as shall be reqnired
by generally accepted accountii!g !!lld (iv) liens of landlords, vendors, esrrlers,
warehousemen, mechanics, JabOiern and IIlldecia.lmen llliEi1lg at law ill the otdinary conrso of
busines for .urns not yet dne or being cootested in good faith and :for which reserves hs:ve
been made as shall be required by generally accepted accounting principles.
4.34 Ta:res. To pay and discharge allmxes, essessmaom and govemme:n1Bl cJllu-ges
or levies imposed oo Borio11<-er, upon its income or profit.> or upon rurt properties belonging to
Bor:rower prior to the dRte on wmch penalties attach thereto; provided that Bor:ruwer shall not
be re<J.tri:red to pay any snob tex, assessrncul, ci:large, levy or claim that is being coo:tested in
good fuith and by appropriate legal proceedings and as to wbioh adequate reserves shall have
been established, and as to wmch no fu:reclosure, sale or simllar proceedings ha:ve been
commencd:
4.35 mvestrnen1s andLo!!ns. To notlllllkerurt loan, ailva:oce, extension of credit. or
co:pital contribution :0 any person or legal entity.
4.36 Maintenance of Pmnerties. To meinlai!l, or cau:;a to be mslamined, in good
:repl!ir, working order and .=di!ion (on:linary weor !!lld tear excepted), all of l!ozrowe:'s
properties, whelher real or persooal, owned or held under l<!ase, and specifically inclncli.ng,
without J.imite:tioo, lhe property SlObject to the Loan DocUI:Ilellts, end :from lime to time make
or cause to be made all repaits, renewals, replal::ei!le!llS, additions, bettemlen1s and
improvements that may be IeaSonallly required to keep end malntsin such property in good
_ !!Qndi!io!),ancl rep_air an4_in
4.37 F=cbises and Intellectual Property. To lake all reasonable acts to preserve
the Borrower's ownership rights to all af its fumcl:rlse ogreements and lntell.eetnal. property,
1ll
includ!ng, but not limited to, trade Jlllllle$. entity llliilll:S, lnldemaiks, copyrights and patenl!;,
websites, and website domainiUlllles, tmd tn take i!illgcnt action tn challenge any cancellation
or infrlngemeut thereofbytlrlrd parties.
4.38 LaWS and RegplatiQilll. To comply in an respects with any Blld an applli:able
federal, stare, ccnm1y end local laws, sllJtnte:!, ordioances, orders, roles, codes Blld :regulations
with respect 1D its :real and persO!llll proport;y, businesses, assets, inventory, and employees.
4.39 Notifi!latiol! of Legal Actions. To notify Lender in wri!i.ng Vlithin Five (5)
days of receipt of any infox:mstian indicating tba:l any legal action bas been or may be
co!lllllllilC-=d or i:hr<:al:l:ned agajnst Boc:ower where the smonutin controversy, either directly
or indb:ect!y, elooe or in co!!!bioatiou with any other actions, suits or proceedings exceed the
sum ofFif!y TholJSalldDcllars ($50,000).
4.40 Adverse Change. Upon olitaining llilY knowledge of any marerial adverse
change in the financial condition or future prospocts ofBorrower, to promptly provide Lender
with written notice desmibing in dellll11he nature of such adverse change.
4.41 Manaaers and Principal Pface of Business. To not chmige the ofiicetli,
dhectors or lllJlillll!"'1 of Borrower or other employees el!Illing more 1han One Hundred
Thousand Dollats (S100,000) per year,. or the location of the e>:ecutive office or principal
place of business o:fBan:uwar without Lender's approval.
4.42 SelL Cort"Vev apd Transfer. To not sell, convey, transfer, dispose of, or further
encumber the properties of Bon:ower or any part tl!ereof or lli!y interest therein as
provided in this Agreement or any of the LOllil DQCUill.ellls, wi:tetber vollllltBril.y, i:nvoluutm!ly
OI crtllerwise.
4.43 :Reeoriis. To keep and lillllirtain full end accutete books, e=unts and records
of Borrower's opemtions in a manner tba:lls coDSi.stent wilh genero..fly accepted accounling
ptinciple.'l.
4.44 T:nderonification. At Borrower's expense,. to protect, defund and inclemni:cy,
and save and bold Lendl:u: hamlless from and against any and ell judgments, Jlab1li.ties, tosses,
damages, costs cr c;:p=, including wilbout limi.tnti.on, court costs and reasonable attorney
ii:es, which. arise out of; !U'8 caused by, or Telate to any claim, dernand, snit, cause of action,
investigation or proceeding brought or asserted against Lender by rmy person or entity to the
e:t:tent the s!lllle r:eJate to tbls Agreement, the Loan, the Promissory Note, any of the Lollll
Docurcents and/or :my other. documents, cortfiicate or agreement delivered oy Borrower 1o
Lander in COllllection hereVIith or therewith. Borrower shall immediately pay Lender upon
deauwd all snch judgments, liabilities, losses, damages, costs and ell:pell.Ses, including court
costs and rea&lllable attcmey f=, incurred by Lander as IeSUlt of any legal or other action
.arising. out of an.y of the Loan.Dill:Ulllell!s. andlor
or agreement delivered by B= 1D Lend= in =tion lhert:with.
19
4.45 Furtl!er Assurances. Following the making of the Lom or lillY ins:tallrnerrt
thereof, the Borrower sbml pro!Ilptly, at the reqli<\St of the Lender, take such action and
execute and dcliver to Lender snch further assignments, endmsemenls, consenls, blstrmnenlll,
agreements andlor ofher documents as Lander may reasonably request in order to perfect
Loader's security and olhc:rwise CO!lS1llllmate and carry ant the tr:msaclions
conlmlplated by thls Agreement, the l'tcllllssmy Note aod/or any of the Loan DocllD:lents for
the ofLeoder.
4.46 Third Partv Claims. Lender shall not be llnhle to, and Borrower shall SttVe
Lender h=less .from end against an claims of l!l1l!l:rialman, co!l!J:actors, subcontiactms,
lllborem and otbets for goods and delivered by them to Bomwer or any of its properties or
serv:i= perlbrmed by them for Boi!Ower or any of its properties or otherwise in connection
with Borrower. Borrower shall not be considered to be ibe agent ofLander for any pnipose
whatsoever.
4.47 Cllpital Expenditures. At. mzy thn.e fallowing the il:Uli.al. CO!Ilpletion of
con.s1ruction of the Project, Barrowm- will not make any expenditure in excess of Five
El:mdred Thousand Dollars ($500,000) without prior written =ent ofLender ..
4.48 :Restricted :Payments. Borrower shall not, and will not be :permitted to, declare
or llllllce, or agree to lill3ke, or pay, either dlre<:tly or indirectly, any distribution or dividend to
any of its members or owners hereunder unless specifically approved by lender.
4.49 Compensation to Management Bonower shall not pay any bonus or
JDllllagemcnt fees to any executive, employee, partner, member or di:rector in excess of any
salary set forth at the time of the e:teeution of this Agreement end in 6\lllnt, nn suchpaymeuts
shall exceed Two Hundred Fifty Thousand Pollms ($250,000) in aey aggregate roll.ing
twal.ve-moofh period tm!ess such CO!Ilp=ation to !lllmagcment has been aFJ?IOved by Londar.
4.50 Paclters aod Smckyards Ac!:. 1921. The Bormwar shall comply in all material
respects with the Penkers and Stockyards Act, 1921, as amended \J U.S.C. 181-229) and the
regulations prollllllgejed so the.t: the trust for the hene:fi.t of all unpaid Cl!Sh sellers or
growers ofbeefthereby sbriU not arise in cDll!leCiion with its purchase of ar:ry such
B=wer shall not tak:n any action w.irlch would impair its ability to benefit from the trust
established undu such Act in connection wilh any sal.S by the Borrower of beef covered by
such Act.
The foregoing co'lenants are in addition to the obligaioll5, undermkings and
agreements of the Bor:wwer contained in the Promil!llory Note and ather Loan Documents,
each of which are inCOiporated hllrein by this refureooe, and all of which shell be deemed to
hs:ve been l!llllle oy Banovrer herein at and as of the dn!e hcnlof, end as though l!llllie
hereuoder Ill: and as of the date hereofwilh the Sl!llle force and effe,t as if the BJmle were set
.. _ .-'forth in the body of-this. Agreenleot.in their md ell :;gclj obJiWiOll". wdermkings
and agreem= shall :mrvi.ve the rlisbmsing of tbe Loan and the =ntion end delfvety of the
Promissory Note and !he Loll!l Doctli!lents.
20
451 Pemrlts. Borrower has seemed all necessary city, local, state or federal peo:nits
required to operate said Pwject.
4.52 E-vm. Bonower agrees ihat "U.s. law requires companias to employ
only individuals who may legally work in 1he United States with U.S. Citizens, or foreign
cijizens who lmve the necessary employment !!llthotiza:tion. Tbls diverse woz:k:force
conlribules.greatly to !he Vl'brancy and strangth of our ecoobmy, but ihat same strength also
attrects unauthcrl2ed employment. E-VerlEy is an l!rn:metbased l!)'sletll that allows
bllirlnesses to delemlin.e the eligibility of t!ieir employees to work in 'the Unlred States. E
V erlfy is fast, free and wr; to = -lllld it's 1he best way employers can = a legal
worl<fun::e. n
"As a condition fur lllllintah:rlnglsatisiYJng the South Dakota Investment Furid 6
(SDIF6) Limited Pll!UlWhlp's loan to National BeefProcessors (N'ru') in good fuitb. and to
avoid defan!ting on 1he lollll with respect to efli:otively detmni:ning that any lllld all persons
bi.-ed and employed by NBP """ legal, NBP will register to parlicip!lle and abide by all the
requitements for voluntarily participating in the U.S. G01lel:!llllellt'5 "E-Vedfy" employment
auf:lmrlzat;OD ver:i:fication program, ~ by the U.S. Departmeat of Homeland Se=ity's
(DRS) U.S. Citizensbip and Immigration Services (USCIS). Fall'!lre by NBP to register and
tw1y ahlde by all the \l:Ims and coodi:tions fur= of B-Verify in verifying an employ6e's
employment authorization will be reason or grounds fur declming 1he bou:ower to be in
defirult of the !Dan, with !he full outstanding belance subj6et lo full and iromodiate paymeut to
fue SDIF 6 LiinltedPar!Ill:rShip.
Article Y.
Negatiye Cnvcnants.
5.1 Cgntlitigpal Sal.
Borrov.'<r shoJI oat lncorpo- in the Improvements any propecy w:quinld 1D!Oer a conditiooal
sales cootract or leas;. or as to which Ule entlor r<talns title or security interl!St, without U1e prior
writu:n co!!Sellt of Lender.
5.2 Changes to Plans gnd Spet:!fications.
Borrower sbllll not make or permit any chaoges in tho Plans and Speoifications, inclodlng any
sut:h changes that alter, diminish or add m the work to be perli::rmetl or al!ango the design of the
Improvccrnmts, without the prior writtan.cooseot of Lender ant! under sut:h reasonsh!o eonditions as
Lender may establish. LenWs pricrwritu:n coosent shall not be ""!"ired. hawever,"" 1D IDlY change
ootler which (a) individually does not cause tho filwi or guaranteed ma:ximu:m prico of tho
Coll5lnlc!ion Conlract to be incJ:eased or d=used by more than SZS,OOO ant!, when eddetl. to all
previous clwlg<o orders, does not ca!l!le suc!t price to be lne.reased or decreased by moro than SlOO,OOO
in 1he aggregnte, (h) tlocs not result in a mater'.al change to the design of tho ImPI=cnts. ant! (c)
itas be,:napproved inwrlting-by-theAn:himct and-anyGovern.tnenta! Authority; !l!nant or-olh.., party
whose approval is required.
21
5,3 Ins!l!illJce Policies 2Jlrl Bwd!!.
Borrower shall not do or permit to be done anylhing that would affuot lhe coverage or
indemnities pro>rided for plll'SU!Utt to lhe provisions of any inSUlllllt>e polloy, per.fonnence bond, labor
end matorial psymcnt bond or any other boad given in with the devalnpment of lho Land
or tbe construclicn oftbelmprovements.
5.4 Restrictions on lndeble!lne:;s.
Borrower will not creabo, Incur, llSSume, guarnnree or be or remain liable, contingenily or
otherwise, wilh respect to any indebtedness otherthan:
(a) CusfotnlilY accounts payable paid prior to any delinquency to tude erodi!or.s incuned
fur servicos or goods purchased in the ordinary colll!lO ofBorrower's boslness or in coonoction
with the dcvelopmc:nt or O:msl:nledon of !helmproverneots in =rdeiice witb lhol'lan.; and
Specifications ond the omyided !hot the aggregate amount of all such accounts shall
not exceed [$50,000] stony tim10;
(b) :In<lebredness to Lender under any of the Loon. Documents;
{c) Endorsements for collection, deposit or negotietion 2Jlrl WBCr.!!lties of prodllllls or
ser>rices, in ea<:b. case, lncuned in the ordinary course of business.
5.5 Restrictions on Liens.
Borrower will not (i) crwe or incur or suffer tn be =te<l or incurred or to exist ill!)' Hen or
(including, wilhout Jimftstiori, any lease) upon ill!)' of the Properly of arry chamc!or
whether now OWDed or be!USfter acquired, or upon the income or profits thereftom; ('U) tran>fer arry of
the Properly or the income or profits therefrom; Cui) acqulnl, or agNe or have an option to acquire, aoy
prope:t)l or assets upon conditional sale or other title retention or purchase money =rity agr<emen;
device or ilmlngemcn!; (rl) su:fier to O><ist for a period of mere tbon thirty ('30) days a:tler the sam.e
shall have been incmed ony indebtedness or claim or d<:m!Jlrl against itlhat if unpald mil!,ht by law or
upon bankruptcy or insol.,.,ncy, or otlt&Wise, bs givon ill!)' priority 1\!ha!soevl:r over its general
creditors; or (v) assign, pledge or atherwlse trm1l!ii:r arry =ivabl= with or without recaut:Se;
provided that Borroi'I'Ol' aury creato or incur or sufiilr 1D be created or Incurred or lo oxisl:
{A) Deposits or pledges made In 01>nneotion with, or to secure payment o.t;
worlanen's compensation, unemployment insumnco, old age pensioll! or other soo!al securicy
obligations;
(B) Lions on thol'ropercy "".,d to the oxtent permitted by theMortgnge;
(C) Liens on the Fropc<W and any other B!ISOts of the Borrower granl!!d pursuant
to the lcrlnS of any Thkc-Out Flnant:ing Amlllgement(s} which shall be
sulijeotto Lender's prior wrltton und
(D) Llens in favor of L!Jlrler under the Loan Documents.
Borrower will not enter into or pcrolit to !Otist my ammg<:ment or agn:ement (excluding 1his
Agreement 2Jlrl the other Loon Documents) which direttiy or iadln!ctly prohibits llamJwer or soy
Guarantor 'from creating. assuming or inclmiog any lien upon i!s properties, revenues or assets
wheti>er now owne<! or horeaftar acquired in favor ofi..nthlr unthlr the Lom Documents.
5.6 Restrictions on Investrnentt.
Boaower will not make or pei!Jlit to exist or to remain ou!standing aey investment =pt
investments in:
(a) marketable direct or guaran!l:orl obligstiomJ of the United Statts of America that
m!llllre within one (I) year from the due of pliiCh.se by the Borrower;
(b) demand deposits, ertificates of bankeel and time deposits of
United States banks having total assets in excess of $1,000,000,000; and
(e) securities commonly lrnawn as "commercial paper" issued by a cmporation organi:red
and e><i.sting uncle<- the laws of tho United Strtes of America ar aey stall> thereof that at the
time of porohas<> have been rared and the ratings fur which are not less than "P 1 lf t1lllld by
Moody's, and not less than "A 1" If nttlld by S&P;
orovided, howeyer. that sucll !nvestinenlll (ol'OOr than dcml!:nd deposits referred to in Section
5.6(b) above) will be considered Investments permitted by this Section 5.6 only if all actions
have been tt!.lren to the sati!!faetion ofLender lo provide to Lender a fu:st priority perl'ected
security interest in all of sncll Investments fre:: of all liens.
5. 7 Memr. Consolidatign and Pl5t!ositian ofAsse!!i.
(a) Borrower will not become a pnrty to any merger, amalgamation or consolidation, or
agree to or effect any asset acquisition or sleek acquisition (other tlmn the acquisition of assets
in ihe O<dica.Iy course ofbusinessconsistlO!Itwith past practices).
(b) Borrower will not b=m a paey to or agree to or effect any dispositioil of assets,
oilier t!tan the sale of inventory and the disposition of ob:!olete essets, in each case In the
erdillary course ofbcsiness consistent with pl!SI:p"'etices.
5.8 Sale 8!Jd L;asebnck.
Borrower will net enter into any ammgement, directly or indirectly, whereby Borrower shaU
sell or trnnsti:r any property owned by it lit cmier then or !hereafter to lease suclt property or!ease other
proptlli;Y that intonds to use fur suhsmnt:ially the same purpose liS !ho property being sold or
transiilm:d.
5.9 T!1!11S!!otions with AfiiliBles.
Borrower shall not engage in 'IJJlY 1ranseation wi1h any affiliate ( othet then for services
as employe<>..s, offi.c:n;, end direclllrs jlll:Suant to eootracts disclosed previomey to Boxrower
inclurl!ng ecy coniJ:a!lt agnoelllent en: other a.rzangcment providing for the furnisbings of
.. ;;ervi.Cl>l;.'!o or ]ly, P.n:Mding for r.:ntal of _rei3lof plltl!onal property to ot or otJ;etwise
requiring paYJI!enJs to or from rmy sucll afilliale or to tho knowledge of BllllO'I\'l!r, any
omponttion. pmtnership, trust, or other entity in whicll such effili!!!e has ils substantiallnt!:resf:
or is an otlicer, directlll; txnstl:e, or partner on tctma mere favorable to such petSOn than what
would nave be6Il al!>linable on an SJ:!ll's lcngih basis in the. otdinm:y com:se of business or th.e
value crf whlch 1bc aggregate amount exceeds One Hllildred 'Thousand Dollms ($100, 000) per
fiscal. year of Bo!l1:1Wet. Bomlwer shall lJOt enb:r into Management Agrcetnents, Service
Agreemenffi or other similar 8grcetnents with Genern! Partner.
5.10 Change in .'Natl.lre ofBminess; Nem Line
Borrower will not engage in lillY line of busincos substantmlly different ftnm the lines of
business condtWted by Borrower an the date hereof or engage or entor inlll rmy new line ofbuslness,
5.11 FinnncW Qlvenents,
(a) Thn!!ible Net Worth.. Borrower will not pemtit Tangible Net Worth at any 'time to
be less tban an lllllll1lllt equal to the unpilid principal amoont of !he Loan mulfiplied
by 1.25.
(b) Funded Indeb!edness to Shareholder's Eguitv. Borrower will not permi:t Funded
1ndebterlness at any 'time to be more than 1.50 times Shmcl!older's Equity.
Compensalion to Se."tior Managers. Bonuwer will not pay or become legally
obligal!ld to pay any bonus, fees, salaries or other compensation to Senior
Managers eKceeding Two Hrmdred Flfty 'Thousand Dollars ($250,000) in any
rolling twelve-month :Period. "Senior Maoa:,cer" meaDS and :includes my
executive, employee, officer, partnllr, lllC!llber cllret:tor, or manager Villose ancnal
compensation is One Hlllldred Iboosand Dallar.s ($100,000) or=
(d) IntcrnstCovaraJ!e Ratio. From andaflorsnch'tlme aslhe Property is opcmtional as
a meatpacking plant, Borrower will net peonit the IDterest Coverage Ratio at lllly
time to be less than 1.50.
5.12 Chann in Cmrtrol. Without the poor written consent of Lender, tbl:re sh.ell be
no change in me day-to-de.y control and l!ll!llogement ofBoaower or Gcnen>l Pw:t:oer, and no
change in the Organizatiancl Dacumenls of Borrower or General Partnllr. Genernll'artner
sball not witbdmw or be removed from Bonowerwithaut the prlcr writf<m cO!lliellt of Lender,
lt beiog acknowledged md agreed by Boxrovm and Genernl Partner that any putported
withdrawal by onemoval of General Partner withontthe prior Wrltlell. consent ofLender shall
be null. and void.
SECTION6
Defunlt
6.1 Events gfDefuolt. Each of !he :fullcw!ng occmrences or events shall constito!e
an ''Event of Default" fur purposes of tbis Agreement:
6.1.1 Nonpayment. 'Ihe :!ldlu:re of Be= to mala: any payment of
principal or :inb:rest as set forth on the Protnissory Note or any payment of
_any otb<ll:-amount payable_ to_ or.iot lhe.beoefit.of !he Lender by BorroW!!'!'
under this Agreement. !he Promissory Note, other Loan Do=ents or any
other docmnent, instrcment or agreement delivered by Boncwer to Lender
in conne..-tion herewith, when and as doe.
24
6.1.2 NotrlJerfurmance. The failure of BOirOwer to observe or perfunn
my of the obligations, nrulcrtl!ldngs or agtements 1h3t are requW:d tu be
observed 9r . performed by 'it ui!rlcr tbe tarnl5 of Ibis Agreement, the
Promissory Note, the Loan. Docin:nents or any other documents,
instnm:ients, or .agreements delivered to Lender bY Barrawer in connection
herewith or therewith (other tlum pey:tnellt) if su.ch failure confumes beyond
the grace period applicable tb=to, or such shorter petiod as mey be
reasanahly speci:!'ied in a wrltten notice thereof from Lender in. the event
suoh ftiliure could reasonably be expemed tu :result in immediate loss or
damege or harm to Lender to amalerinl degree.
6.1.3 Dissolution or T.rnn:;fur. The dissolution, liquidation, merger or
consolidation ofBOJIOwer with or i$ m:zy other entity, or the sale of sl1 or
my substantial portion of the assets ofBonower.
. .
6.1.4 Warrantjes. AJry xepresetml!ion, Wili:tailty, sohedule; cer.fillcate,
:!it)ancial s!lltement, report, notice or other writing .fi:mrlsbed by or on behalf.
of Borrower to Lender or any !ep=tation or wsmny contained in this
Agreement, the Promissory Note, the Loan Doc1l!Uenls .and/or any
aocument, cclificafio or ag:reement fumlshed by Eon:ower to Lender in
CQll1lection herewith or therewith being fulse or misl.erulillg as and when
given or becO!Uing fuise and misleading at 1JIJY time in the:futme.
6.1.5 ERISA. The OCC'J!I<UCC of my reportable event under the
Employee Retirement Income Security Act of 1974, as smeode<l, in respect
of eny employee benefit 'pirui maln1ained fur employee a ofBom>wer.
6.1.6 L(tigatian. The entry of my financial judgment xeou!ting 'from
judicial or administr.rtlve aciion aguinst Botr:OWer or with respect to il
assets, in which the amoont of such judgment alone or in combinal:lo.n with
a:IlY other un..catisfied judgment exceeds Fifty Thononnd and Noll 00 D?llars_
(SSO,OOO.OO), if such judgment remaiml unrli.seharged for a period of sixty
(60) days or moxe a:fler tbo date O!' which suth judgment becomes :final
without any cigb:t of appeal to a higher court, and 1l1lless Bor.rower ohall
have 1ake11 whatever action is tequired, inciuding without limitation, posting
a.supenredeas band, to stay proceedings to etrfim:esuehjudgmeat.
6.1.1 Noncetfotmllilca on other Indebtedness. The occum.nce of any
de:fimlt or c:vent of default, subject to curative rights, i{ anY. or any ovelit
which xequire3 the prepayment of 1iorrowed men")' or the accelenrtion of
the maturity or _paymetJi thereof, ttllder the tenns of any evidence of
indebtedness or other contracl: or sgreemect issued or assum.ed or entered
--into-by BoiiOwet with an}!-lhitd party where the..amount.:il!'Jnl'led, aloim or
in combination with f!llY other default or event, crraJd reasOllllbly ba
to =eedFlfty endNo/100 Dollars ($50,000.00).
. '
6.1.8 B!!nlguqtcy - Filing of Petjtion. The :filiug by Borrower of a
petititlll seeking relief, or a consent qr answer ccoseoting to a petition
seeking relief agai:ost Borrower lllldot'lbe Fekral Bankruptcy Code, as now
const:ituted or h!mafter lli!lellded, or any other applicable fedetal, state,
local or fbteign law reg:m:ling bankruptcy, insolvency or ll!llditanl rlgirts
ge:nsrally, or the consent by BOIIOwer to the. institution of proci:edin,as
thereunder nrlhe :filing of any &UCh petition or fur the appointment or takil:Jg
possession of B:Jrf substantial pOrtion of B=wer's assets by n:ce!ver,
liquidator, assignee, trustee, custodilm or similar of!icial.
6. 1.9 fun!mmtyy - Entry of Order fur RelieE The en1Iy of a d=ee or
order by anY court for relief in respecrt of Borrowru- noder t1:u: :Fec!erel
Blllllo:nptcy Cnde, as now constituted or hereafttt llJIIended, or tmy other
oppllcable federal, state, local or foreign law regarding bankruptcy,
insolvency or ctedltors rlg:lrts generally, or appointing or the tlking of
possession of any substantial portion of !he Borrower's assets by receiver,
llquidl<tur, assignee, trustee, custodilm or similar official, or orderjng the
winding up of or liquide1ion of t1:u: a:fiili:r.l of !he Borrower and any snch
decree or order shall con1ione '!l!lSteyed and in effect for a petiod of sixty
( 60) canse<:Utive days.
6;1.1 D Insolvency. BOI!'O?ru becoming msolvent or :fililing or being tl!ll!hle
to pay their debts as they mature, or admitting in writing their inability to
pey their debts as they became doe, or making a general assignment lbr 1he
benefit of their cteditnrs, or enterhlg hlto any agreement suspeoding the
transaction. of all or a:o.y substantial portion of !heir llSlli!l and customary
business oponilions.
5.1.11 Enyiromncntal Compliance, The iSS1lllllCe or receipt of any ilotice
alleging vialatian of any environmental sta1ute, law, ordinance, :rule or
regnlation relsling to the pr=llt, previCll!!}y or subsequently owned or
leased real pOl]lerties of Borrower, provided that such violiltinn :remains
nncU!ed Sbd:y (60) days after the receipt of t1:u: relevant notice by BottOWer.
61.12 Other Default Tne occutrence of an event that cons litotes a default
or Even. of Default Ullder eiiher the Prom:illsory Note, any of 1he Loan
Da=ents, and/or any other document, certificate, instrmnent or agreement
delivered by 1he Borrower to t1:u: Lender in com=tion with the l:l:anl!actions
contemplated herein or t:hen:in.
26
6.1.13 Curing !leiilu!L El=pt as otherwise stnted herein, if BorroWer is in defilult
Wlder any of tile conditions forth in Section 5, Borrower shill have Thirty (30)
days fu:nn when notit:c of dllfault was given, to cure the same.
6.1.14Lapse g!'Permits or AJlfll'!1Yals. Ally permit, license, <:ertiiioate or upproval
Borrower iS required to obtnin with respect to the constru<:tion, operation,
development, .leasing or malntenanoe of the !mprovemonis or the Property
lapses or ceases to be in full force and effi:ct and the Sllllle is not cured within five
(5) days of S!!llh lapso or cessation.
6.1.15 Material Adverse Ch!U!ge. In the reasonable opinion of Lender, the prospect
of peyment or perfunnam:e of all or aey pnrt of the Obliga!ions has been impaired
be<:1UIS!l of a matl:rial adverse clumga in lho iiDaru:inl coodltioo, IeSUlt:s of
operations, bosiness or properties of Borrower, Owusntor or any other Person liable
far the payment or performance of any of the Ob[ig!llions.
7.1 Rz!rnadies on Defuu!;.
SECTION7
;Remedies on Default
Upon the happening and during tho conlimlance of any Event of Delimit, Lander shall hwe
the right, ln addition to any other rights or remedies ave:ilable to Lander und<:r the MDrtgagc or ney of
the other Lom Documents or under applicable Law, lo exeroise aey one or more of the lb!lowing
rights IUld remetties:
(a) Lender may tenninare its obligJrtion to disburse any further principal of 1he Loan
purstll!llt to this Agreement by Notice to-Bouower.
(b) Lender mey accelerate all of Borrower's Obliga!ions under the Loan Doouments
whereupon sueh Obligalions shall become immedi!l!lliy duo md paynble, without notice of
aceeleratlon or intention to pt'lsentment or demand fur peyment, protest
or notice of nonpe.yment cr disbaimr, or notices or demwds of any kind or cluuucror (all of
whieh nre hereby waived by Borrower).
(o) Lendor mey apply to ney eaurt of competent jurisdiction ior, and obtnin llppaintment
at c. receiver forihc Property.
(d) Lend<:r mey fur-..cltl"" the MOJ1gcgc and/or exeroise with respect to any
o1her Collateral.
(e) Lendar mey set off the llltlounts due tend<:r nndJ1r the Loan Dooumenls against ill
accoUJJts, credits, money, securities or ofuu property ofllom:lwer now or hen:after under the
oonlro!, maintained in an aecount, or In the pcssessinn of Lender to the or fur ihe
acoonnt ofEorrower, without notice to or the consent ofBorrower
. ---{f) Lander.-mQY-elltel' into possession of tho Property and perform aey and all work and.
. labor neccssa<y to complete the development of 1he Land md the eonsttuetion of the
ImprOV'C!!lects (whether or not in =rdlln"" with tr.e Plans and Speeificalions) and to employ
watJ:lui.en to JXI'!l"'t the PIOJ>er!y and tha j'mpmvements. AU sums e::pendad by Lander for
sueh purposes sball be dllemad to bave b""" advan<:ed tc Borrower llllderihc Nc!io and shill
27
be secured by the MartgBgo and the other Securil;y DocUinents; For this purpose, Borrower
hereby constitutes BDd appoinl9 Lander its !rU1: and lawful llliumey-in-:fuet with full power of
substitution, which power is coupled with an in=t, but without ony fidnciaey dnt;y, to
complem the work in the name of Borrower, and hereby empowers sald lll!omey or
in the !IB!lle ofBam>wer or Lender:
(.i) To use MY funds of Borrower including any balBDce which mey be under the
contltll or maintained in an =ount of Lander and any fund wbich may =in unadilanced
hereunder for the purpose of completing ihe development of 1ha Land and ttu. constnlCtion of
tho Improvements, whether or not in the manner called fur in me Plans l!lld Specfficajjons;
(h) To make such additions and chanJlOS and =actiODS to tho Plans and
Specifications as ahall bo necessary or dosinlble In the judgment of Lander In complete 1he
development of tho L<!nd and the I<ODfltnlcticn ofthclmprovements;
(iii) To cmp loy such conlr\letors, scbcontrac!m3, agents, =hit:eets and inspec!m3
as shall be necessary or deslrable for said p\U')lO'le;
(lv) To pay, settle or ccmpromiso all e:tisting bills and claims which ere or mey be
liens against the l'roperty, or may be necessmy or desirable for 1hc completion of the work or
the cleamnce of title to the Property;
(v) To "'"ecuta all applications .and e<:rttiicales which may be required in the
name ofBOlTOWU..
(vi) To file fur record, at Borrower's cost and "'"Pense aud in Borrower's" name,
any notices of completion, notices of ::essalicn.oflobor, or any other notices tbnt Lender in Its
sole and absolute discretion may consider ncressary or desirable to prot>:ct its securil;y; and
(vii) 't'a do any and every act with respect to the development of the Land and the
coru;trucUon of the Improvements which Borrower may do in its own behalf:
It Is nndmtood and agreed 1het this power of attorney shall be deemed to be a power coupled
wiih an interest wi>Jch =at be Wlol-ed so long liS any Obligaticrul ere ouGtm!dfug. Said a!!omay-in-
fact shall also have the power to prosecute and defend all actions or in con:neotion with
the dev=lopmcnt of 1he L<!nd and the construction oflhelmprovernenlll and to tlke such aeticns and tD
n:quira such porfosmanco as Lender me;' deem necessary.
(g) Jn the event B= is not able tQ pay all obligalions .in full, then. 1he amount
immr:dlatety due and payable s1uill bear !merest at the iDJ:reased rate ofTwelve Percent (12%)
per 1Ullllllll or, if105s, the 11UlXimum rate peonlti>:d by law U!lli1 all fllll!J1.lJlts due h=Ullller or
thereunder are paid in full and 1he Lender shall. wilhout limilatian be enlit:led to immediate
payment of such amountstoge1herwitb all of the interest accrued. thereon.
Se<:lion 7.2 No Rele11se or W"eivec Rqm<fes CnmulativB and Concurrent.
Borrower shaD oat be relieved of any Obligation by =n of the fililure ofLender to comply
with. any reqt1l'St of Borrower or of anY other l'= to tlke action to furcolose on the Property UD!Ier
the Mortgage or otherwise to enfurce sny prnvimon of the Loan Documents, or by reascn of the
release. of ccostdermlon, ohll or any part of the Property. No delay or oruisoion of Lender
to """"'""' say right, power or n:m.dY accruing 1lpCll tho happenjng of an Event of De.fuuLt shall
impair any such right, pcwer or remedy ar shall be constttn:d to be a waiver of any such Event of
Default or arry acquleserico themin. 'No daley or omission on 1he part of Lender to BlW1lisc any
cption fur aocelezation of the matnrii;Y of lho Obllga!iODS, or for ibn:cloSIIT!l of the or tbe
eo<ercise of any right or remedy under any of the other Loan Documents or applicable Low following
my Event of Default as aforesaid, or any other option grnnted to Londa hereunder in any one or mora
instances, or the ac<:eptallca bY under of any partial ps:ym.ent on account of the Obligaticcs shell
constitute a of any such Event of Oefuult and each Slll>h oplicn :;boll =uln ooolinuously in
full force and effuct. No remedy herein coofened upon or =wved 1o Lender is i!llended to be
exclusive of any other rnt'.edios provided for in the Losn Dctlllllents, and each and every such remedy
shall be cumulative., and shall be in addition to every other remedy given hereunder, or under the Losn
Document<, or now or hcreetlor codstlng at Law or in equity or by statute. Every right, power end
remedy given bY the Loan Documents to Lender shail be corn:unent and nmy be separotely,
==ively or togother against Borrower or !he l'ropert,y or any pert !hereof, and <Nery right, power
and remedy given bY lhe Lnan Documents mey be e>rercised from time to time as often as may be
deemed expedient by under.
Sec:lion 8
Conditions ofLendlng
The obligation oftbe Lender to make !be Loan, or any installment thereof, is subject to
the following conditions:
8.1 Docnmentrtion. fu addition tn the coniL'tio!lS pw:edent set forth in Section
6.2, the obligation of the l.<mder to make the Loan, or any installm.ent thereoi; is subject to the
condition !bat Loruier shall have received, at tbe expense ofBorrower, each of the followlng,
in each. duly execured and othetwise in fmm and substance salisfuctory tn Lender and its
counsel. and in SllCh llllmher of slgned co!lllte!parl5 as Lender may request (except fur !be
Promissory Note, cml.y one of each shall be signed):
8.1.1 Certificate of Limited Partnersbip and Certificate of
Existence of Borrower. A copy of the Cerlificale of Lim1!:ed
l'at:tnetship and a Certi:ficaie of Existence of Bm:roWlll', in each case
certified by 1he Secretary of State fur1he State of its fotmation, to be
true and correct
8.12. Certificate of No Defunlt. A certificate signed by Borrower
c<II!i:!Ying that: (a) no Event of Deihult bas ocolll:J:l!:d, :is contin11ing
or will result :from the l1l!lking of tho Loll.li, or any applicable
installment thereof; (b) tlurt Boltllwer !>.as observed and perfoaned
all obligations, unde;Jaklngs and agrcemerrts rcquil:ed to be obs=d
and perli:ttmed under this Agreement, the Promissory Note and the
Loan Documents; and (c) that the and 'Wil!!l1llties of
Borrower as conlllined herein ru:id 1herein Sill true and COJied: as of
!he elate of 1:ba Loan, ar fu? applicable illstaJ1ment, as t1Jonal1 such
represenlatibns and warnmties were lll!lde on and as of1l:at date.
8.1.3 Resolution of Borrower. A copy of the IOSolutlOn of tbe
partners and di:rectors or D!ll!lagers of BOIIDwer autlwrlzing or
retifyi:og the =cu1:ion. delivery and perl'ormaru:e, respectivcly, of
this Agreement, the Promissocy Note, and each of the other Loan
DOlltll!leats and each other documeot, certificate or agreement
provided for herem ortharein.
8.1.4 Certffieates of Incumbency. A certificate of the partners of
Borrower certifying the names of the Managers and Members of
Borrower autbcitized to sign this AgreClllCI!t, the Promiasoty Note,
the Loan Documents and ell ether agreements, docmnents 'and
inst:r\lilleilt3 provided fur hetein and therein, together witli a sample
of the t:ue signature of each such Manager and Member. Lender
may coru:lasively rely on such Ct:Itilleates.
ll.\.5 Promissory Note. Tho Promissory Note, dcly exeou!ed by
:Eon:ower.
8.1.6 Segurlty and Pledge Amement and Mortgage. The Seolirity
and :Pledge Agteel!lent and :M:ortgage, dcly executed by Borrower.
8.1. 7 Lien Releases. Lender shell baw completed any and ell
UCC searohes it lllll.Y de01:0 to be necessary or approprlnte in
connection with. 1hls Agreement and the lrmlsac!i01l5 contemplatEd
herein and Borrower slJa!J have prov.ided Lender with such fully
executed UCC-3 Termination Staicmetrts and such other
terminations and/or releases as nre necesssry in the opinion of
Lender and its counsel, in their sole distttetion, to tetrninale or
:release ell liens, claims, seourity intere:.ts, clmxges or encumbnmces
affecting the :real estate or any other llZSets 0\Vlled by the Borrower,
except as setforthinE:du'bi.t C.
8.1.& _Miscell;mecus. Such other docrments and ce.-ii.ficales, as
Lender lllllY reasonably request.
8.1.9 Eledge of Membership Unfu. Borrower agrees to ellow the
pledge of all. of its Membership Units, Limited Partnership Shares,
General Partner Shares, Stock Subscrlpfulos . or ather sucll.
docwncnts to Lender as addiliooal collatenlllbr pa)IIDC!l! hereunder.
8.1.1 () Aoorais?). Borrower agrees to provide an appn;lsal of
sufficient amount 1c sati.sf)' Lender aDd sm:h appraisal shall be in an
amount such that all covenants herein are met.
. _.,ll.ll. S!irte Pledge. :Prior to. any disbursement of foods, Borrawer
shall ob!llin a commitment from the State of Sonth Dekllta to lend at
least Ten Million Dollars (.$10,000,000) throngb. various programs
30
8.1.12. USDA. Prior to any disbUISement of :1\mds, Borrower shall
provide to Lender proof from !he United States of America's
Depamnent of Agriculture that .the USDA will loan e:t leas! Ten
Mlllion Dollalll (SlO,OOO,OOO) tn be used in said Project.
8.1.13. EPOCH STAR. Prior to any disb\Il!lelli.ent of funds,
B<mOWer shall provide to Lellder proof that an agreement to
purchase Epoch Star has been agreed upon and all rlgh!B thereunder
assigned to Lender.
8.1.14. J,ieriholdg. All licnbolders shall ~ v signed a tonsent as
agreed upon by the parties.
8.1.15. Title .!nsnrnnce, Title insur.mce shall be obtained with a
Lenders Poliay in fitvor of1endor.
8.2 Addjliotml Condilioos Precedeid: to Lender's Obligations. Each of the
following ill an e:<pr= condition precedent to the obligation of the Lender to make the Loan,
or my instllllment th=t; to Ben ower ;pmsuant to the !erms of this Agreement. In the event
s:n.y one or more of the fullowing conditions are not satisfied to Lender's reasonable
satis:fllclioo, the Lender mey e:t ito option: (i) waive said condition ami fund the Loan or !he
applicable inat!lltment therea:t; (n') snspend pecfurma:acs and pursue such. other xemedles as
may be otlu:Iwise a:vel.lab1e ll!lder this Agreement, at law or in equity; or (ill) tllmllnate this
Agreement, in which event the Agreement shall be of no ftlrlhl:r :folCl: or e;ffect whatsoever as
be:tWeeo the parties.
8.2.1 Bw=tations and Warranties. At the date of this
Agreement and the timding of the Loan or any applicable
insl:llllment thereat; the reoresentatlons and W!lmlllties set fuith in
this Agreement, the Promfusory Note, the Loan DocWillmtS and all
other documents, instnu:!ll:nts or agreements delivered tn Lender by
Bonower in collilel'lion herewith or !herewith shall be true and
conect as e:t such date with the same effect as though those
representations and wll:tiimlies had been Ill8de on and as at sucll
dste, UDl.osa such. represeulatiQDS specifically relate to an eadier date.
8.2.2 No Ddimlt AI tllf: time of tbls Agreement mtd the funding
of !he Loan. or applicable inHtBllm<mt thereat; and inm:Iedistely after
giving effect to the Loan or the applli:ahle installment thereoi;
Bonower be m emnpllance with all the tetms and provlsicns set
lbrth horeln aodfor in the PilJlllhsory Note, the Loan Documents and
all oilier documents, iDStronleol1l or agreements delivered to Lender
by in coanectio!l-hll11!Witll (lr tberewiili, on their :parl..tn be
obsemd or perfbtmed, and no Eveot of Defuult shall bave oo:mred
and be coe:tlnuing a:t the time the Lollll is llll!de or W<>uld :result from
waking the Loan or any sppf!cable installmeotthereo:t:
31
.
8.2.3 Ahsenre of Materia! AdverSe E-v<mts. There shall not exist
my slale of :l'ilci3 or c:ircumstsnl:es which could reasonably be
expected to ha-ve a matmial ad-verse effect on 1he assets, financial
condition, !eS1llts of opetlltioiJs or prospects of Borrowl:r or on 1he
ahilily of Borrower to :repay 1he Loan in full when dne and/or
obsme or petfonn my part of 1Im obligations, undertakings or
agreements required to be observed or performed by 1hem under llrls
Agreement, 1he PromissorY Note, 1he Loan Documents or any other
docmnent, instnnnent or agreemenls given to lender in co:oneotion
hetewith or 1herewith.
8.2.4 No Iniunctlon. No iiijunction, stay or restmining order sba1l
be in e:f'rect prohlbiting !be CO!lSUIIllllJ!1on of 1he tnmsaclions
contempla!ed by this Agreement.
g,2.5 Absence of Litigation. Exc<:pt as disclosed in Exhibit F, no
action, suit, in-vestigation or proceeding shall lutve been commenced
or 1hreatened by any governmental agency or my other person, fum
or ei:rtity against !be Borrower and/or any of its or 1heir affiliates,
members, officcrn, .!Illlllagers or directors, with respect to 1heir
properties or wi1h :respect to 1he transactions contemplated hareby,
challeoging the rights of 1he pertles hereto to .consummate snch
traosaclions of which could reasonably be expected to hlrve a
material adverse effect on 1he assets of the Bormwer or 1he :financial
conditinn or =Its of opc:rnlions of pro.s:pect:f ofBorrower, or on 11m
ability of !be Borrower to observe or perfoc:n my obligation,
undertaking or agreeme.nt:IeqUhed. to be observed orpetformed by it
under this Agreement, the Promissory Note, 1he Loan Documents or
any other dccumeo!S, instrw:nen1s, certifications or agtllemenis
delivered to Lender in connection herewith or 1herewith.
8.2.6 All Proc!Wljngs to be Satisfactory. All lll:tion and other
proceedlogs to be 1Bken by Borrower in connection wi1h this
Agreement sball be reasonably satisfucto:cy in form and substaoce to
Leader md lender's legal counseL
SECTION9
MisceUaneol!ll
9.1 Liability c Lend!!r. Lellder shall In no evcnl: be respollsible or liable to any
person o1!mr 1han Boi!OWer for 1he disbutsement or :failnre to disbtuse h ~ Loan Proceeds or
. _.Jll!.y part !hereof and neitber !be C'1l!J.eral Con:rr!<:tor, .Consb:m:tfan Cm!snltanr, nor. any
Subcontractor, Sub-!rubconlnlc!ct; Lsborer or Material Supplier, Vendor or pro\ider of
services or seller of any commodities or cattle shall have my right or claim against Lender
under thilt .Agre!mlellt or other Loan Docum<mts.
32
,.
9.2 Waiver of De:llru!t. Lender ma.y, by written. notice to Bonower, at any time '
and from time to time, waive any defirult in tbe :pedi>Illlanca or observance of any condition,
covC!lllllt or other tetm hereof, wbich sball b" fur such period arul subject to such conditions
as shall ba .specified in any S1!Ch notice. In the case of any such waiver, Lender and/or
Botrower, as may be appropriate, sluill be restored to tbcir fo!lller :position and riglm llllder
this Agreement, fue Promissory Note arul tbe Loan Documents, and an.y Event ofDeiimlt so
waived slllill be deemed to be ctu:ed and not continuing; however, no such waiver sball <;l<fend.
to or impair any rlght subsequent thereto or to any subsequent or olher Event ofDe!irolt.
9.3 Notices. Any Notice, request, demand, waiver, co=t. approval or olher
coilllillJ!rlc:alion wbich is requin!d or p=itted hereunder sball be In writing. All snch Jl(ltiJ::es
shall be delivered personally, by cer!iiied mall, retum receipt requested, or by reputable
OY!l!llight courier (In either case costs prepaid and add!essed as _provided her:elu), and shall be
deemed given or made upon receipt thereci Alllltlch notices arc w be given or mede to 1he
parties at fuc follCIWing ad<l=es (or to such other address as any party may designate by a
notice given luaccordancewitb the provisions of this Section):
If to Lender:
With a copy to:
Ifto Borrower:
With a copy to:
JoopBollen
SDIF Limited :Pactnersbip 6
416 Production Street North
Abeirlean, SD 57401
Jeffrey T. Sveen
Si.egcl, Bamett & Schutz, LJ...P.
400 Capital Blli.lding
415 s. :MahJ. Street
1'.0. Box 4.90
Aberdeen, South Dakota 57402-0490
jsveen@sbsla.w..net
(60S} 226-1911 Fax
David Palmer
Nortbero.BeefPru:!=!LimitedPattnetship
31!749 135"' Street
Ab<ml.een, South .Dakota 57401
RocyKlng
Bantz, Gosch & Cremer, L.L.C.
305 Sixth. A ve.ntlll SE .
Ab<mieen, Santh Dakota 57402
9.4 No Wuiyer; CJmmlati:<6 Reme;lies. Lender sball Ollt by .any act be deeme4 to
have waivad any tight. or Icmedy hereunder.. No i'ailuxe to exercise, nor Bill' delay m
exeroisiog, on fue part of Lender, any right, power or pti"Vilege hereunder sball operate as a
wsiver tberccf. No single or partial ~ of any tight, power or privilege hereunder sball
33
nreclude any other or further exen:ise thereof, or the entcise of any other right, power ll!
Prlvllege. A waiver by Lender of any right or :remedy hereunder on any one occasion shall
not be construed as e. ba:r to any right or remedy wlll<:h Lemler would otherwise have on any
fuime occasion. The rights and remedies herem provided are cumnlative, may be exercised
siugly or concm:rently and a:re not =Iusive of any rights or remedies provided at law or in
equity.
9.5 Survival of Agreements. All coveoimts, agreements, undertikings, obligations
e.ud all represen:tlltians and wammlies set forth or made herein shall survive delivery of the
Promissory Note, the Loan Documents and the making of !he Loan, and shall nevertheless
remain in effeci and be enforceable as between the parties and in accordance with their terms
for the slatllte of.limitaiions period a:pplli:ahlc thereto.
9.6 Further Documents. Bo::rowor agrees "to do silch further acts and things, and to
execute, acl::nowledg?: and deliver sucl!.additiOlll!i documents or instr.llllents as Lender may at
any time =nably request in collllecl:ion wi:th the at!minlstretlon of this Agreement or
related ro the Promissory Note or the Loan Documents or in order to better assure and coo:fum
to Leader its rlgil!s and powers hereomier and thereunder.
9. 7 Binding Agreements: Asshrnmeuts. 'This Agreement and the re.t:ms, covenents
and conditions h=f, shall be biDding upon B!ld inure to !he benefit of the parties hereto and
their tespective heizs, successors, trustees, :receivers, admirdstra!ms, ood assigns, except thBt
Borrower shall not be permitted to assign this Agreement or any interest herem or in !he Lollll.
Docmnents or the collateral, or any part tbered; as described herein and therein, or otherwise
pledge, erumrnber or grant any option with I"..5pect to the collamral govemeij. by the Loan
Documents, or B!l'J part thereof; except to the extent a:peciilcally pemilited under !he tenus of
the Lorul Documents.
9.8 Enti1:e Agrwnent. This Agreement, !he Promissory Note, the Lollll.
Documents and any docllilltlllts, instrumei:rts, or agreerneots gi'Y<lll to the Lender by Borrower
hereunder or thereunder represent "the comprete and exclusive agreements of the IJarties with
respect to "the m1bject matter hereof and !hereof and replace and any and all prior
agreements or anderstmldings, whether wt!tten or oral. with regen! !hereto and all
negotil!Jicns leading up to !heir executian and delivery.
9.9 Amepdmenl Neither this P...greement nor llll.Y }liOVisio.os lhe:reof may be
emended, modified, waived, lfsebarged or t!lmrin!!1ed generelly, except by an insftwnent in
writing duly signed by or on behalf ofB0110wer and Lender.
9.10 Jncornoraticn by Refurence. Eecli of the recitals set furth at the beginciog of
this Agreement. all of the exhibits whil:h ere llttru:hed hereto and all of the documents and
agreements reii:reru:edhcieirl, speciflcally including, without llmita1ioo, the Promissory Note
. and1he Loan Documents,. are-mCiltj)Ol'-ated-l!ctein- by thl& reference .wifu. the same-force-and-
e:fl\:ct as if the= were set:furth in the body ofthis.Agreementin their entfroty.
34
9.11 Any 1lllllOl1aincy or ambiguity c:dsting herein shall not be
interpreted a,aalnst a:ay party because such party prepared any portion of this Agreement, 00!.
shall be intcl:p!cled acconling to !be applicaiicm. of rules of ilrterpretstion of contracts
generally. The headings used in this Agreement ere inserted fur convenience and reference
only and a:re not intended to be an integral part of or to affect the meaning or interpretation of

9.12 Seyerabilltv. Provided the same would not deprive the Lender of the benefit of
its baxguin hereunder or lberennder, if any ti:tm or ]liOvision of this .Agreemenl; or the
l'J:omisso:ry Note, the Loan Documents or any other document or instroroent exeeured. in
connection therewith, il!cluding amendmcmll; and moififications ill: the applicati<Jll theteof to
a:ay pmon or cht:umslance, shal1 to a:ay exteat lie invll1id or enfon:eahlc in any judsdiction in
which enfurcemcot is sought, 1he terms and provisions or !be application of such t=s or
pravislons or the a:pplication of such terms or provisions to persons or clreiJlllShmces shall be
inefl:l:l<:1lve to !be ex1:eot of such invalidity or unenfurceability in such jurisdiction wr.hout
invalidating the remaining provisions hereof, which shall remain in ibroc and be
enforceable as among the parties hereto and any such prohibition O'l' unenforceollility shall not
invalidate or render unenfOrceable sucb provlsions in any other jurisdiction.
9.13 Time js of the Essence, Co!!lll1ll!ilion ofT'= T'.une is of ilia essence with
respect til every covenant, conditi<Jll to be satisfied, aod action to be tllken :hereunder, and the
parties slJall proceed accordingly with respect to every action necessary, proper or advisable
to make effective the transactions contemplated by this Agreement. Whenever lbe last day for
the exe.."cise of a:ay pmilege or the discharge of any dUty borcunder shall :IBll upon my day
which is not a business day, the party having snell prlvilege or dnty may exe<cise such
privilege or discharge such duty on the next sncceediog blJSineSs day.
9.14 Qhoice of Lgw; This Agreement shall be by, and coostrued in
BJJcorda.nce with, the iDtema1 laws of the State of South Dalwta. Any legal. action or
proceeding w!lh respect to 1his Agreement or any doCilllleot reiared hereto shall be brought
only in the Fiflh Judiclal Circuit Court in Aberdeell, Brown County, South Dakam, or the
Uoited Siates District Court fur the Distdet of South Dllko1a, Northern Divisino, in Aberdeen,
Brown Couo!y, South. Dalrota and, hy execctio.tt and dclivexy of 1his Agre=ent, each. party
hereto hereby accepis 1hr itself and in respect of i!s property, generally and nncondifionally.
tbe jurisdiction of the a:fbresa:id courts. The parties hereby !nev<lcably waive any
objec!Jon, including, withoot limila!ion, any forum non conveniens, which a:ay of tbem may
now or hereafter hlm to the bringing of such action or proceodiog in such respective
jurlsdictiOI!S.
9.15 WaiveroJurvTriaL
Boaower and Lender waive trial by jUiy in respect of any dispote and any action on
T'.ulscwai:ver is.koowingly. willingly and voluntarily .wade by BOI:rower and
I.mder, and Borrower and Lender herby represent that no of :fact or opinion
have been made by any pemon or entity to induce this waiver of ttial by jUiy or to in sny :my
modify or Dllllify its affect Thill prevision is a material indncemeot fur the pru::ties entering
35

into this Loan DoctlllleJltS. B=wer ll!ld Lender are esch bore by antbrniwl ttl file a. copy of
this section in 'iJJI'] proceeding es conclusive evidence of this waiver of jmy trll!l. Borrower
represents and wm:rants that is h!!S been represented in this signing of this Agteement
and i:n the making of this waiver by fndependent leglll collDSel, or ha.s had the opportunity to
be represented by indepl;!ldem legal coU!ll!el. selected of im awn free wm, and that it has had
tho opportunity to discuss this waiver wlth c01lnSel.
9.16 No Wnl!!!!Jtv by Lender.
By scoejlting or approving llll)'thing tn bo observed, perfonned or fulfilled by
Borrower or to bo given tn Lender pun:uant tn lhis Agreement, including any certificate, Survey,
receipt, apptaisal or insunmce policy, Lander shall uot be deemed to have Wlill'lDitel! or represented the
suffioieney, tegelity, effeoti\leness or leglU eflect of tho smne, or of eoy term, provision or ooodition
thereof and any such ac<:eptance or appmval thereof sball not be or constitun. any wllmlnly or
represectation with respcw tberoto by Letulor.
9,17 Stnndan:l gfConduot ofLender.
Nothing contained in lhis Agreement or eoy otbor Loan Document sball limit tho right nf
Lender to e.=cise its business judgmont or to act, in th: eontext of the granting or withboldiDg nf any
advance or consont under this Agn:emeat or eoy other Loan Doemnent, in a sull.feetive =ner,
wltetlter or not objectively reesonable under the clmnnslllllces, so long as Lender'! axercise of its
businoss judgment or action is mailo or undertaken in good fuith. . Borrower and Lender intend by tho
foregoing tD set furtb and affirm their entire understanding with respe to 1h 5ll!ndluU pumJaot to
which Lendar's duties and obligalions are ttl bo judged and the plltl!metm witbin wblch Lender's
discretion may bo o:tetcised bereunder and llDder ti1o other Loan Doc1lll1CiltS. A3 uo;od herein, "aood
faith me!!llS bonesl,y In met in the ccndll<lt and lrBnsru:ticn concerned.
9.18 CREDIT AGREEMENT NOTIGE. TO PROTECT BORROWER AND
LENDER FROM P.liT MISUNDERSTANDING OR DISAPPOIN'I'MENTS, ANY
CONTRACT, PROMISE, UNDERTAKING, OR OFFER TO FOREBEAR. REPAYMENT
OF MONEY OR TO MAKE A.'N OTEER l'INANCIAI. ACCOMMODATION lN
CONNECTION WI'IH TH!S LOAN OF MONEY OR GRANT OR E.X!ENSION OF
ClmDIT, OR A..W AMENDMENT OF, CANCELLATION OF, WAIVER OF; OR
SUBS'I'ITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY
JNSTRUMENT OR DOCUMENT EXEctrrED JN CONNE.CTION wrrn: TH!S LOAN OF
MONEY OR. GRANT OR EXTENSION OF CREDIT, MUST BE JN WRITlNG TO BE
EFFECTIVE.
36
ll'i! WTI,'NESS WHEREOF, the parties llereto have set their hanDs aru:l seBls lhe day
BJJd year :fust above wrl.tom.
37
PROMISSORY NOTE
On the 4th day of November. 2010. for value rcct.-ived. Northt:rn BeefPadcrs, LP., a
St>uth Dakota Limiled Partnership or:ganim:l t.mdeT the laws of the Stale of South Dakota.
(hereinafter referred to as wh= principal place of business is 38749 !35th
Strect, Aberdeen. Somh Dakota hereby promises to pay as follows:
ln return for a I= Bom>wer Borrower promises to pay tbe principal sum of
up 10 U.S. Si''Y Million Dollars ($60,000,000) (this arnoW11 is calk'<! "principar}. plus
interest to the order of L<:nder. Lender is S!>IF Limited Pa.-mei>lrip 6 of 416 Production
Street North.. South D-..kota 57 40 I.
Borrower under.;tands that if said loan is fWlded for less than $35.000.000. at the
discretion of Lender, then said amount funded by A1JbU!;t 1, 2010 shall be the loan amounL
Borrower understands Llmt Lender may transfer this Note. Lender or anyone who
this Note by tr.msfer and who is entitled to rtteivc payments under this Note is to be
called !he
Borrower understands tll:lt the amount funtk--J could be I= than 1he Slatc."<l amount
above if tl1e U.S. lmmig.mtion and Natumfu:ation Service does not approve all eases. ln such
an c>-cnt, ,;aid amount shall be considen:-d Ll>e amount aprrovcd and funded.
2. lnt .. n:st.
Interest accruing at a ye-arly rate of 3.5% shall be charged on any unpaid principal
until the full amount of principallms b=1 paid. Borrower will pay interest at a Y"""IY rate of
3.5o/c.
3. PnymCI!Is.
{A} Time 2nd !'lace of Payments.
Borrou\.-r "ill pay interest yearly in arrears on the anni,er.;ary date of
tho first disbursement of said Loan runds and each anniversary date
rhc'1L-after until paid in full. All interesl accrued during the given year
shall be paid in full. The entire principal amount shall be due in full on
the 5"' ye:rr :mniversal)' from the date of U>c funding of tlr.: tir>1 loan.
Such paym:<nt shall be due on November 4. 2015.
Borrower's yearly payment will be in the amount of all interest earned
for the year.
4. Borrower's Righi to Prepay.
Goriuwor hb.S riglu to malw P"'l"')'m<:nt of principal only if all investors b.aYe
n:cciYcd removal or any conditions impo.'>Cd by U.S. lmmigration and Naturali7.ation Service.
pursuant to lhe EB-5 Program. Only wht:n that has .been.n.-cei\ed. \\ill BorrO\\"t!f be entitled
to make a...,y prepayment at lhe sole discretion
v
Borrower may make u full prepaymem or partial prepayments "ithout paying ElllY
repayment charge. "ill usc all of Borrowers prepayments to reduce the amount of
principal that Borrower owes undcr this Note. If Borrower makes a partial prepayment. there
will be no changes in due date or in the amoWll of Borrowers yearly payment unless
Lender agrees in writing to those changes. l..endcr shall notify Borrower when all conditions
!rave been removed.
5. LoOln Charges.
If a law. which applies to this loan and whlcb sets nuOOmWll loan charge$. is linally
interpreted so that the interest or other loan charges collected or to be collected in coooe<:tion
with this loan ex<Xed the pcrroincd limits, then: ( J) any such loan chu:rge shall be reduced by
the amount necessary to reduce the chu:rgc to the pcnnined limit. and (ii) any sums already
collected from Borrower which exet=led permi11ed limits will be rciimded to Borrower.
Lender may choose to make this refund by reducing the principal Borrower owes under lhis
Note or by making a direct payment to Borrower. If n refund reduced principal. the reduction
v.ill be treated as a panial prepaymenL
6. Borrower's Failure to Pu) as Requit'ed.
(A) L:ate Charge for (hcrdue Payments
Lr Lender Ira.< not received the full payment of any yearly interest
p:>ymcnt by the end. of t"n (10) calendar days after tbe same is due.
Bomm-er will pay a late charge to Lender. The amount of the charge
will be 10% ofthc o'crduc payment of interest
(IB) ikfeall
If Borrower does not pay the full amount of each annual paymc:nt on
!he dale it is due, Borrower will be in
(C) Notic-e of !}t:!3nh
If Borrower is in default. Lendc'T may sc-nd Borrower a writletl notic.:
telling Borrower that if it does not pay the overdue amount by a certain
date. Lender may require Borrov.-cr to pay inunedimely the full amoum
of princip:ll which has no! been paid and all inleresl tha1 Borrower
2
owe; on that amount. l1lat dare must be Ill least 30 days after the date
on which the notice is delivered or mailed ro Borrowcr.
(D) No W:aiver by Leuder
EYc..ll if .. :It a time: when Borrowc:r is in dc::fault, Lender does ool n:quire
to pay immediately in full as rl=ibed above. Lender will
still have the right to do so if Borrower is in default at a later time.
1 f Lc:oder h."lS required Borrower to pay immediately in full as described
above. Lender ";11 have the right to be paid back by Borrowet for ail of
it-' costs am! exp::ns.es in enforcing this Note to the e.'<lent not
prohibited l'r)' applicnble Jaw. Those c>.-pc'l!SCS inalude. but are not
limited to. re350nablc attorneys fees.
Unless applicable luw requires a different method. any notice that must be given to
Borrower under this 1\otc .,.;n b:: given by delivering it or by rruilling it by fil"!>1 class mrulto
Borrower at the l'ropcrty Address above or at a dilfcrent address if Borrower gives L<."nder a
notice of Borrower's different address.
Any notice that mus1 be given to Lender under this Note: "ill be given by mailing it by
first cl= mail to Under at the addn."SS stated in Section I above or at a different address if
Lender gives a notice of that diffi."''CTTt address.
8. Obligntions of Persons UJgder this Nore.
/1.11)' person who is a guardlltor. surety or endorser of this Note is also ubligalcd to
keep all of the promises m:ode in this Note. including lhe proruist: In pay the full amount owed
to do these 1hings. 1\ny person "ho takes O\'er these obligations. inclu<ling th.: obligations of
a glllll<l1lll>f. 'urety or endorser of this Note, is also obligated 1<> keep all of the promiS<:S made
in this Note. Lender may enforce ils rights this Note against ench person individually
or against all of them tos<:ther. 1his means that any one of above may be required to pay all
of tl..: amounts owed under this Note.
i\.11y other person or entity who bas oblignticms Wlder this Note waive the rights of
pr<:SL'tltm<:nt and notice of dish<>nor. means the right lo require Lender to
dcm:md payment of amounts due. -Notice of means the right to require Lender 10
give notice to other P"rsons thnt amounts due hn'e not been paid.
3
1&. Secared Note.
In addition to the pro!eCUons giveo to Lender under this Note, a Mortgage and
Seeurity lot=:st (the usecuri!y loslrumentj, da!cd the smne date as this Note, protects
Lender from possible losses which might result ifBotmwe.r does m>tlreq:l the promises which
Borrower made in this Note. That Security lnst:rument descxibed bow and unde:r what
conditions Borrower may be required to make lmmdiate payment io full of all amounts
Borrower owes under this Non:.. Some of those ctmdrurms are described as follows:
(A) T.-aosf.er of the Propz:rty or a Bmclicial Interest in BoJTI!lWer
If all or any part of the Property as defined in the Mof1El!ge, or any
interest in it is sold or lnlr'.sfr:m:d (or if a beneficial interest in Brurower
is sold or transferred and Borro"'-.:r is not a n!!ll!ral person), without
Lender's prior written conseot, Lender may, it its option, require
immediate payment in full of all sums secured by this r:locuirn:nt.
However, this option shall not be exercised by Lender if exercise is
prohibited by federal law as of the date of this document
If Lender cxr:rciscs this option, Lender shall give Borrower ootice of
acceleration. The notice shall provide a period of not less thao 30 days
from the date the notice is delivered or mailed v.itbio which Borrower
must pay aU sums secured by this documcnt 1f Borro""r fulls to pay
these sunJS prior to the expiration of this period, Lemler may invoke
any remedies peunittc:d by this document or under South Dakota law
without further oatice or d=aod on Borrower.
WITNESS TilE HAND(S) AND SE.-".L{S) OF THE UJ-.iuERSIGNED.
Signatures ofBorrowcr:
t::>
Northern Beei1"itders. L.P.
EN:: __ __ zoo ____________ __
By Oshi.k Song
Its Di.rec:tor mtd Sole iiSher of Wort:he..m.
. seei JSaCJiii'frs l&a.ltiagem:eu L .. L .. C ....
i.U General Parc:oer
4
AMENDED CREDIT AGREEMENT
1
This Amended Credit Agreement (the is made and entered into as of the
'1 of 1/Y\ ,;.,-< [., , 2011 by and between Northern Beef Packers, Limited
Partnership, a South Dakota limited (hereinafter relerred to as "Borrower") of
38749 135'h Street, Aberdeen, South Dakota. 57401 and SDlF Limited Partnership 6 of 416
Production Street North. Aberdeen. South Dakota 57401, (bereinaftcr referred to as
'"Lender"):
WHEREAS, Borrower has requested a Loan, as hereinafter defined, from Lender in
the principal amount of up to Sixty Million Dollars ($60,000,000) ro be funded by up to One
Hundred Twenty ( 120) investors (EB-5 Investors) participating in the EB-5 Program, more
sP.,cifically kno\\11 as the Immigration and Nationality Act, Section 203(b)(5) et seq. (the
.. EB-5 Program"); and
WHEREAS, Lender has agreed to make the Loan to Borrower upon and subject to the
terms and conditions set forth herein and the other documcrtts evidencing and securing the
loan.
NOW. THEREfORE, in consideration of the covenants and agreements contained
herein the receipt and sut11ciency of which, when performed, arc hereby acknowledged, 'the
Borrower and Lender hereby agree as follows;
SECTION 1
Loan Terms
Ll Description of the Project The project involved is a beef packing plant
currently under construction in Aberdeen, South Dakota (Project) located on land described in
Exhibit A attached hereto (Land), which is to be owned and operated by Borrower
1.2 Loan. Borrower acknowledges and agrees that the Loan will be funded by
Lender soldy from investment proceeds arising out of the EB-5 Program and that the Lender
shall have no obligation to make or fund the Loan unless and until it receives investment
proceeds arising out of the EB-5 Program. Subject to the terms of this Agreement, Lender
agrees to makt the proceeds arising out or the EBS Program available to Borrower as
follows:
(a). Lender shall loan up to Sixty Million Dollars ($60,000.000) (the "Loan") as
the same is raised pursuant to the o!Tering bein!l conducted by Lender under the EB-5
progran1. l11e parties agree that Lender may make the first Loan disbursement to
Borrower only after Lender has received timds under the EB-5 Program in an initial
amount or Five Million Dollars ($5,000,000). Disbursements shall be made solely at
Lender's discretion.
(b). All subsequent disbursements or installments shall be in the minimum amount
of Two Million Dollars ($2,000,000) or higher, unless otherwise agreed upon by the
,,,;< cEXHIBlt'
i'yf y .
panies. Said disbursement.> shall be made as soon as practical after Lender has
received said sums.
!.3 Note. The Loan shall be evidenced by a Note in a form and substance
satisfactory to Lender and its legal counsel (the "'Note") attached as Exhibit B.
1.4 Collateral. As collateral for the payment, of all amounts that become due
and owing to Lender under this Agreement, the Note, the Security Agreement, the l\iortgage,
the Collateral Assignment., the Pledge Agreement. the previous Credit Agreement dated
November 4. 20 I 0. except as amended herein. any and all other documents which Borrower,
Guarantor or any other party or parties have executed and delivered, or may hereafter execute
and deliver. to evidence. secure or guarantee the Obligations, or any part thereof. as the same
may from time to time be extended, amended. restated, supplemented or otherwise modilled.
Borrower agrees to grant Lender a security interest in and a first lien, (subject to
subordinations. to Lender$ in the amounts listed on Exhibit C). upon all assets now owned or
hereinafter acquired by Borrower. including. but not limited to. all equipment. furniture.
fixtures. accounts receivable. livestock. supplies. cash and inventory. as well as a mortgage on
the real estate together with all tenements, hereditaments and appUrtenances thereto and all
fixtures, equipment and improvements attached thereto or located thereon (the "Real Estate").
and all additions and proceeds thereof. Said security interests shall be evidenced and
perfected as provided in a Security Agreement (the "Security'") and mortgage (the
"Mortgage'") in a form and substance satisfactory to Lender and its legal counsel. In addition
to the first lien as specified herein, all 0\\11ership shares of Borrower held by General Partrier
and Limited Partners shall be pledged as additional collateral as outlined in the Pledge
For purposes of this Agreement. the Security Agreement, the Mort!,'llge. the
Collateral Agreement. the !\late. Pledge Agreement, the previous Credit Agreement dated
November 4, 2010, except as amended herein, any and all other documents which Borrower.
Guarantor or any other pany or parties have executed and delivered, or may hereafter execute
and deliver. to evidence, secure or guarantee the Obligations. or any pact thereol: as the same
may from time to time be extended. amended, restated, supplemented or otherwise modified.
are collectively referred to herein as the "'Loan Documents."
t.5 Sccuritv Interest. Lender shall be granted a first security interest in ull
collateral of the plant as set fonh in Exhibit D. (subject to subordinations as set forth in
Exhibit C only). and all ownership shares of Borrower held by General Partner and Limited
Partners as set forth in the Pledge AgrecmenL
1.6 Term. The term of the Loan shall be for live (5) years from the date the initial
Loan Disbursement is made. {hereinafter referred to as "Initial Funding Date.") The Note
shall run for said five years and be due and payable in full live years from the Initial Funding
Date.
1.7 Interest. Interest shall accmc at a yeariv rate of Three and One-Half Percent
(3.5%) on any unpaid principal balance until the fuli amount of principal has been paid.
lnt.:rcst shall be computed on a 365-day year. Interest shall be paid annually an the
anniversary of the initial Funding Date, which parties acknowledge such date to be November
2
4, 2010. Therefore. interest shall be paid annually on said Anniversary Date for all interest
then due and owing. If not paid when due. then principal and interest shall accrue interest at
the default rate on both the unpaid principal and unpaid interest.
1.8 Orieination Fee. Borrower shall pay an origination fee of One Percent (1%) of
the amount borrowed up to $60,000,000. n,e origination fee shall be paid within Five (5)
days after each disbursement of the Loan on the amount disbursed as described in Section 1.2
above.
1.9 Fees. Borrower shall pay all reasonable attorney fees and costs incurred by
Lender in furtherance of this Loan including, but not limited to preparing all documents and
completing all items necessary for dosing this transaction. Borrower shall also be responsible
for any lees incurred by Lender in monitoring all disbursements of funds and any reasonable
costs incurred in obtaining investor approvals. 1l1esc fees include, but are not limited to any
anomey fees paid to Siegel. Barnett & Schutz. L. L.P. or other attorneys, any bank fees
charged, consulting, monitoring or other fees charged by any entity hired by Borrower or
Lender to monitor the construction and operation of said beef plant during the term of this
Agreement. Said t'ees shall be paid immediately upon demand by Lender. Lender shall be
.:ntitlcd to withhold from any disbursement any amoum which it anticipates will be charged
throughout the life of this Loan.
!.I 0 Prepavment. No prepayment shall be allowed until all EBS investors have
received conditional removal of all conditions a!Tecting their permanent residency status by
the Department of Immigration or as agreed upon by the parries. Once conditional removal of
all such conditions for each individual investor has been received, prepayment shall be
allowed at the discretion of Borrower. Prepayments shall be applied first against any accrued
and unpaid interest, then any remaining sum shall be applied against the unpaid principal
balance. Such prepayments shall not relieve Borrower of the obligation to continue to make
any regularly scheduled or required repayment of the outstanding indebtedness hereunder.
1.11 Spendim! of Funds. Borrower agrees and warrants that all money it receives
pursuant to this Agreement, shall be invested in the Project and only used for advancement of
the Project, which includes paying off of any construction loans, satisfying liens, purchases of
equipment, supplies, land, building. operation of the Project. or any others listed in the Lender
Approved BudgcL Said funds shall not be used for any other purpose unless agreed upon in
writing by the parties.
1.12 Title Insurance. Within thirty (30) days following the execution of this
Agreement, Borrower agrees to provide the Lender a title commitment obtained through Clark
Title Company. issued by a reputable title insurance. company licensed to do business in the
State of South Dakota and agreeing to insure title to the Real Estate in Lender in the aggregate
amount of Sixtv Million Dollars ($60,000.000), subject only to easements and restrictions of
record as of th; date of this Agreement, liens for unpaid real estate taxes for calcndirr years
2009 and 2010, if any. (the "Title Insurance"), any Mechanic's Lien set limh on Exhibit C.
Borrower shall cause such policy ofTitle Insurance to be issued to Lender at Borrower's sole
cost and expense.
3
1.13 EB-5 Program. The parties acknowledge that Borrower has previously
received equity funding from Sixty-nine (69) EB-5 Equity Investors (EB-5 Equity Funding).
The parties further agree and understand that the original EB-5 Equity Funding in the Project
is separate and distinct from the Loan. The Loan is additional funding to obtain up to Sixty
tvlillion Dollars ($60.000,000) in new funds. which meet the Loan Criteria Program set fonh
by the United States Department of Immigration and qualifying for the EB-5 Program.
!.14 Non-Revolving Loan.
The parties acknowledge that the above Loan is a Non-Revolving Loan.
The panies acknowledge that during the tcrrn of !his Agreement and any
disbursements being made by Lender, Borrower shall meet all conditions set forth in Sections
2, 4 and 8 of this Agreement, unless any conditions are waived by Lender.
SECTION2.
Representations and \Varranties of Borrower
Borrower represents and warrants to Lender that each of the statements contained in
this Section 2 is true, correct and complete as of the date of this Agreement. and will be true.
correct and complete at and as the credit or loan proceeds are made available to Borrower and
throughout the term of this Agreement. Borrower acknowledges that Lender is relying on
each of the representations and warranties set forth in this Section 2 as a material inducement
to enter into and perform its obligations under this Agreement. Unless otherwise expressly
limited. all of the representations and warranties set forth herein shall survive execution and
delivery of !he Note, other Loan Documents, and funding of the Loan. Accordingly.
Borrower hereby represents and warrants as follows:
2.1 Organization and Good Standina of Borrower. Borrower is a South Dakota
limited partnership, duly organized, validly existing and in good standing under the laws of
the State of South Dakota. and is authorized to do business in each state in which the nature of
its business requires that it be so licensed.
2.2 AuthoritY of Borrower. Borrower has full right, power and authority necessary
to execute, enter into and deliver this Agreement. the Note and !he Loan Documents. and to
perform the obligations required to be observed and performed by the Borrower. The entry
into this Agreement. the Note and the Loan Documents by Borrower and its performance has
been approved by all necessary action, including the approval of its partners in accordance
with its Certificate of Limited Partnership. Pannership Agreement. and the laws of the State
of South Dakota.
2.3 ValiJ Agreements. This Agreement, the Note. and the Loan Documents will,
wllen the same arc signed and delivered to Lt!nder, constitute legal. valid and binding
agreements that are enforceable against Borrower in accordance with their terms.
4
2.4 Non-Contravention. The execution, deliwry and performance of this
Agreement, the Note and ihe Loan Documents will not, with or without notice or the passage
of time, violate any provision or any requirement of law or of any conu-actual obligation to
which Borrower is bound and will not result in or require the creation or imposition of any
lien on any of ihe properties or revenues of Borrower pursuant to any provision or
requircmcm of applicable law or any comractual obligation which Borrower or its properties
are or may in the future be bound.
2.5 Third Partv Consents. No consent. authorization or waiYer by or filing \\ith
any governmental agency or any other person. firm or entity not a party to this Agreement is
required to be obtained or made by Borrower in connection with the execution or performance
of this Agreement, the Note. ihe Loan Documents, or the observance or performance of any
obligation, undertaking or agreement required to be observed or performed by the Borrower
herein or therein.
2.6 Taxes. Except as to the unpaid ta"<es disclosed in Exhibit E. Borrower has
filed or caused to be tiled ol! federal, state, county and local tax returns which are required to
be filed. and have paid or caused to be paid all personal property, real estate. income or other
and all special assessments. \\iihholding. conuibutions and governmental charges and
levies (collectively and individually referred to as "Taxes") as shown on such returns and
reports. or on ony assessment received by Borrower. to the extent thot such Ta'<cs have
become due (except for current Tax<.'S not delinquent and Ta"<es being contested as provided
bv law. in gocxi faith and by appropriate legal proceedings lor which adequate reserves have
provided, and as to which no foreclosure, sale or similar proceedings been
commenced).
2.7 Liens. None of the Borrower's assets. properties or real estate is subject to any
mortgage. pledge or other lien. encumbrance or security interest, e!<ccpt as set tanh in Exhibit
c.
2.8 Adverse Contracts. Neither Borrower nor any ot' its properties are a party to
anv aarcemcnt or instrument, (except all the Loan Documents entered into with Senior
or subject to any charter or other restriction, or any judgment, decree or order of any
court or governmental body, which could reasonably be expected to have a material adverse
etTect on the ability of Borrower to observe or pert'onn any of its obligations. undertakings or
agreements under this Agreement, ihe Note. or the Loan Documents. Borrower does not haw
knowledge of or notice that is in default on the performance, observance or fulfillment of any
obligation. covenants, or conditions contained in any such agreement. instrument, charter or
other resrriction. judgmenL decree or order of any court or goverrunenta! body. which could
be reasonably expected to b.ave such an ct'fect.
2.9 Litigation. Except as disclosed in Exhibit F. no litigation, including derivative
actions, arbitration law suits, govcmmental proceedings or investigations, arc
pending or. to the knowledge of Borrower, threatened against Borrower.
5
2.1 () Sell. Convev and Transfer. Except for sales. conveyances or transfers on
commercially reasonable terms for adequate consideration made in the ordinary course of
Borrower's business, Borrower has not sold, conveyed, transferred, disposed of, or otherwise
further encumbered any of its propenies or assets within the last ninety (90) days.
2.11 Lawful Interest. The amounts to be received by Lender as interest paymt:nts
under the Note and/or other Loan Documents are lawful and are neither usurious nor illegal
under the laws of the Stale of South Dakota.
2.12 Environmental Compliance. Borrower is in compliance with all environmental
protection laws in each jurisdiction where it is presently doing business, except for a small
diesel fuel spill. the remediation of which is in the current budget and v,111 be remedied.
Borrower has not received any written notice from any governmental agency regarding any
action or investigation, pending or contemplated, pertaining to any alleged violation of any
environmental protection laws with respect to any real or personal property presently or
previously owned by Borrower.
2.13 ERISA. Borrower has fulfilled all obligations under the Employee Retirement
Income Security Act of 1974. as amended, in respect of any employee benefit plan maintained
for employees of Borrower, no reportable event or prohibited transaction has occurred with
respect to any such employee benefit plan. and ull such employee benelit plans are fully
funded.
2.14 Compliance with Laws. Borrcwer is not in violation of any federal. state or
municipal statui<:. law, ordinance, code. notice, rule or regulation, nor has Borrower failed to
obtain any license, permit, ti'anchise or other governmental authorization necessary to the
ownership of its properties or the conduct uf its businesses in a timely manner to the extent
that such license. permit, franchise or other governmental authorization has become
obtainable.
2.15 Defaults. Borrower is not in default of any contract. agreement or undertaking
to which it is a pany. nor has any event or circumstance occurred which, but lor the passage
of time or the giving of notice, or both, would constirute an event of default thereunder or an
Event of Default, as defined in Section 6 of this Agreement.
2.16 Permits. Borrower has obtained all necessary local, state and federal pem1its
and licenses tor construction of its project and facilities to the extent that such permits and
licenses are obtainable. In event parties aware of any other pcrmiL"i or licenses
that are required then Borrower shall promptly obtain such permits and licenses. In the event
such pcnnits and licenses arc not immediately obtained when required, then Lender shall have
the option of withholding any further disbursements until said permits and/or licenses have
been obtained.
2.17 Packer:,; and Stockvards Act. J 921. Borrower has complied in all material
respects with the Packers and Siockyards Act, 1921, as amended (7 U.S.C. 181-229) and the
regulations promulgated thereunder so that the trust for the benefit of all unpaid cash sellers or
6
growers of beef thereby shall not arise in connection with its purchase of any such livestock.
Borrower has not taken any action which would impair its ability to benefit from the trust
established under such Act in connection with any sales by the Borrower of beef c"vercd by
such Act.
2.18 Job Creation. Borrower represents and warrants that it will meet all job
creation rcquirem<:nts as indicated by the direct and indirect multiplier set forth by fNS, which
translates to Three (3) jobs tor every Fiw Hundred Thousand Dollars ($500,000) loaned to
the Project. A total loan amount of up to $60,000.000 v.ill require the creation of Three
Hundred Sixty (360) jobs. Borrower agrees it will meet the job creation of Three Hundred
Sb:ty (360) jobs or the number of jobs required based upon the final Loan Amount. within
Two and One-half(2.5) years after the Initial Funding Date, as required by the EB-5 Program.
The parties agree that these jobs are in addition to the original job creation required by the
equity funding already in place.
2. 19 First Series of Limited Partners.
Prior to the date of this Agreement, each of the Sixty-nine (69) EB-5 Investors (EB-5
Equity Investors) purchased and received one (l) Limited Partnership Unit in Borrower for
Five Hundred Thousand Dollars ($500,000) per uniL Neither the Borrower. General Partner
or any atliliate of Borrow<::r or General Partner has any obligation to repurchase or redeem
any of the Borrower's Limited Partnership Units issued to the 2008 EB-5 Equity Investors by
Borrower nor any liability contingent or otherv.ise to the :!008 EB-5 Equity lnv<::stors pursuant
to any agreement or under Law. In addition. Borrower has made no representation, warranty
or covenant to any 2008 EB-5 Equity Investor or other third party concerning the completion
date. cost of construction of the improvements, the date of commencement of Borrower's
business as a packer. the property. the number of jobs to be created, the continual operational
cost.s of the company once the plant has been completed. Except tor any rights provided
under the Laws of the State of South Dakota. the Limited Partners of Borrower (acting
individually or collectively) are not entitled to remove or replace the General Partner or any
additional General Partners.
2.20 Eooch Star Limited.
No lurther borrowing shall be made v,.ith Epoch Star Limited.
2.21 Plans anJ Spccitications.
The Plans and Specifications are complete and adequate for the Construction of the
Improvements. TI1c Plans and Specifications have been approved or will be approved when
needed by all Governmental Authorities having or claiming jurisdiction over the Property and
by the bcncliciary of each restrictive covenant atTecting the Property whose approval is
required. To the best of Borrower's knowledge. the Improvements, if constructed
substantially in accordance with the Plans and Specifications. will fully comply with all
applicable Laws, including those Laws relating to access and facilities for disabled persons.
7
2.22 Utilities.
All utility services necessary for the Construction of the Improvements and the
operation thereof for their intended purposes arc available at the boundaries of the Land (or
will be available upon the completion of work shown in the Plans and Speci!ications),
including telephone service, cable television, water supply. storm and sanitary sewer facilities,
nantral gas and electric facilities, including cabling for telephonic and data communication.
and the capacity to send and receive wireless communication.
The toregoing representations and warranties arc in addition to the representations and
warranties of the Borrower set lorth in rhe Note and other Loan Documents. all of which are
incorporated herein by this reference, and all of which shall be deemed to have been made by
Borrower at and as of the date thereof with the same force and effect as if the same were set
forth in the body of this Agreement in their entirety. and all such representations and
\Varranties shall likewise the funding of the Loan and the execution and delivery of
the Note and other Loan Documents.
., ., '
---"
Separate Taxation of Propertv of Borrower .
Borrower represents .that Borrower owns the real and personal property subject to this
Agreement and that said property is taxed separately from any other property of Borrower.
SECTION3
Representations and Warranties of Lender
Lender represents and warrants to Borrower that each of the statements contained in
this Section 3 is true, com.'Cl and complete as of the dale of this Agreement and will be true.
correct and complete in all material respects at or upon each disbursement of the Loan being
made tn Borrower. Lender acknowledges that Borrower is relying on each of the
representations and warranties set forth in this Section J as a material inducement to enter into
and pertonn its obligations under this Agreement. Unless otherwise expressly limited, all of
the representations and warranties set forth herein shall survive execution and delivery of the
Note and the funding of the Loan. Accordingly, Lender hereby represents and "-arrants as
follows:
3.1 Organization and Good Standing of Lender. Lender is a South Dakota limited
partnership duly organized. validly existing and in good standing under the laws of the State
of South Dakota and is authorized to do business in South Dakota.
3.2 Authoritv of Lender. Lender has full right, power and authority necessary to
execute. enter into and deliver this Agreement and all other Loan Documents and to perform
the obligations required to be observed and perlormcd by Lender.
3.3 Valid This Agreement and all other Loan DocumenL' wilL when
the same are signed and delivered to Borrower, constitute legal, valid and binding agreements
that are enforceable against Lender in accordance with their tenns.
8
3.4 Non-Contravention. 1l1e execution, delivery and perlbrmancc of this
Agreement and any Loan Documents will not. with or without notice or the passage of time.
violate any provision or any material requirement of law or of anv material contractual
obligation to which Lender is bound.
3.5 1l1ird l'artv Consents. Except as provided in this Agreement, no consent,
authorization or waiver by or tiling with any governmental agency or any other person, finn
or entity not a party to this Agreement is required to be obtained or made by Lender in
connection "'irh the execution or performance of this Agreement, or lhe observance or
perfommnce of any obligation, undertaking or agreement required to be observed or
pcrfom1ed by Lender herein or lhcrein. If any consent hereinafter is determined to be
necessary, Lender shall immediately obtain !he same.
3.6 EB-5 Program. The Loan qualified under the EB-5 Program as an investment
that would enable Lender to obtain immi!,'fallt visas for its limited partners.
SECfiON4
Affirmative Covenants and Agr..,mcnts
Until all obligations of Borrower hereunder and under the Note are paid and fullillcd
in full, the Borrower agrees to comply with each of the following Co\'enanrs and conditions:
4.1 Construction.
Borrower shall cause all of said funds advanced to be used in con51ruction or related Lender
approved budgeted expenses oi the improvements at the beef plant and to be commenced and
prosecuted in a good and workmanlike manner and shall cause the same to be completed in
accordance with the Project Schedule and substantially and in accordance with the plans and
specifications nnd Budget:
Architect or Project Manager shall deliver to Lender within ten (10) days of each calendar
month ~ n commencing with the month in which the tirst advance of this loan is made. a wrinr:n
monthly status report regarding tht: status of construction of improvements and any deviations from
the project schedule and if deviations arc made the specific reason rhen:tbre from tht! Project Schedule
of Plans and Spcciiications and/or Budget and if any deviations are made, sp<leifically explain and
justify the reason for 'uch deviations
(a) Purpose. Reallocation. Revenues from Propertv. Funds shall be advanced by Lender
in otr.:curdancc with the terms of this Agreement to pay those expenses related to the Loan and
the Property that are described in the Budget provided by Borrower, but not, in the aggregate
with respect to any line item set forth in the Budget, in excess of the amount of the Loan to be
disbursed for such line item. as set forth in the Budget without Lender's prior written consent.
Borrower will receive each advance in trust Cor the purpose of paying onJy those costs for
which the advance is made and wBI utilize the funds advanced lor no other purpose. With the
prior approval of Lender not to be unrellSonably withheld or delayed, any cost savings, actual
or estimated, affecting any approved line item within the Budget may be reallocated by
Borruwc::r to any ather line item within d1c Budgcl. Upon completion of the lmprovcmc::nts
and the payment of all costs in c.onnection therewith, any undisbursed proceeds of the Loan
shall be allocated to the interest reserve or to such other line item liS Lender shall approve.
9
Each disbursement from a contingency reserve shall he subject to approval by Lender as to the
amount and purpose for which such disbursement will he used, which approval shall not he
unreasonably withheld or delayed. No prior approval is needed for itt:rns less than Twenty .. five
Thousand Dollars ($25.000).
(b) Draw Rcouests. Unless otherwise agreed by Lender. advnnt.-es shall be made
us funds become available in increments of not Jess than Two Million Dollars
($2.000,000) based on Draw Requests signed by an authoril.ed signor in the form
attached hereto as Exhibit H or in another fom1 approved by Lender. Each draw
request lor hard costs shall be set forth on AlA Forms G702 and G703 or another form
approved by Lender, and shall be reviewed by the Loan Monitor,. signed by the Project
Manager and approved by the Architect. Draw requests for hard costs shall snow the
percentage of completion of construction and shall set forth in trade breakdown form
and in such detail a> may be required by Lender the amounts expended and/or costs
incurred for work done and materials incorporated in the Improvements. Rctainage
will be withheld and released in accordance with the terms of Exhibit I. Each draw
request shall be supported by such inlom1ation and documentation (such as paid
receipt. invoices. statements of accounts, contracts. lien releases, etc.) as Lender may
reasonably require to assure that amounts requested are to be used to reimburse
Borrower tor costs previously paid by Borrower or to pay costs incurred or to be
incurred by Borrower that are to be paid !rom proceeds of the Loan, as set forth in the
Budget.
(c) Liabilitv of Lender. Lender shall in no event be responsible or liable to any
Person other than Borrower for the disbursement of or failure to disburse the Luan
proceeds or any part thereof and neither the Project Manager. Loan Monitor.
Contractor nor any subcontractor. sub-subcontractor, laborer or material supplier shall
have any right or claim against Lender under this Agreement or the other Loan
Documents.
(d) Loan M<>nitor Fee. Borrower agrees to pay to reimburse SDRC. Inc. or SDIF LP 6
any reasonable fee for the Loan Monitor. or any otller consultant hired by Lender to overse-e
said Project for tho term of the Loan. Said ft:c shall be payable monthly and either shall he
withheld from any construction advance sums prior to full disbursement or promptly paid
upon request.
(e) After any advance being made. Loan Monitor shall provide a written report i n d i c t i n ~
tltat the work for which payment is heing funded, hilS been completed in accordance with the
Plans and Specifications using the AlA Contractor Payment Documents.
(f) All payments pursuant to this Section (b) shall be handled through the title insurance
company and the title insumnce company shall be required to obtain all lien waivers and
perform any other customary and usual duties title companie; are usually required to perfonn.
4 .:! Approval \'>f Construction.
No work a.sociated with the Construction of the Improvements shall he commenced by
Borrower unless and until the Plans and Specifications have been approved by Lender, by all
10
Governmental Authorities having or claiming jurisdiction over the Land and Improvements, bv the
beneficiary of any applicable restrictive covenant whose approval is required, and by any other party
whose approval is required under applicable agreements. and unless and until all building,
construction and other penn its or required in connection with such work have been validlv
issued and all fees. bonds and any other security required in connection therewith have been paid
posted.
4.3 Compliance \Vith Laws: Encroachments.
1l1e Improvements shall be constructed in accordance with all applicable Laws. The
lmprovt:ments shall be constructed entirely on the Land and shall not encroach upon any easement or
right-of-wny. or upon the land or others. Construction of the lmprovc,nenls shall occur wholly within
all applicable building restriction lines and set-backs, however established, and shall be in strict
compliance with all applicable use or other restrictions and the provisions of any prior agreements.
declarations. covenants and aJI applicable zoning and subdivision ordinances and regui:Jtions.
4.4 lnsoections; Cooperation.
Borro'\,er shall penn it representatives of Lender and the Loan Monitor to enter upon the Land.
to inspect the Improvements and any and all materials to be used in connection with the development
of the Land and the construction of the Improvements. to examine all detailed plans and shop
drawings and similar materials as well as all records and books of account maintained by or on behalf
of Borrower relating thereto and to discuss the affairs, tinances and accounts pertaining to the Loan
and the lmpro\'emcnts \\ith representatives of Borrower. Borrower shall at times coLlpernte and
causl! the Contractor and each and every one of its subcontractors.. sub-subcontractors and material
suppliers to coop<!ralt: with the representatives of Lender and the Luan ivtonitor in connection with or
in aid of the performance of Lender's functions under this Agreement. Except in the event of an
cmcrgencv or durin a tht: occurrence and continuance of a Default or Event of Default. Lender shall
give at le;st t\venty-four hours notice by telephone in each instance before entering upon
the Land and/or t:xercising any other rights grunted in this Section.
4.5 Contracts. Vouchers and Receipts.
(a) 13orrower shall furnish to Lender, promptly on demand. any contracts, subcontracts,
bill::; of sale, statements, receipted vouchers or other agreements relating to
the development ,,f the Land or the Construction of the Improvements, including any such
items pursuant to which Borrower has any claim of title to any materials. fixtures or other
artidl!5 delivered or to be delivered to the Land or incorporated or to be incorporated into thi!'
lmpro,cmcnts. Borrower shall furnish to Lender, promptly on domand, a verified written
statement. in such form tlnd detail as Lender may require, setting forth the names and
of all contractors. subcontractors, subsubcont.raciOrs and suppliers f11mishing labor
or materials in the development of the Land or Lhe construction of the Improvements and
showing all amounLS paid lOr labor and materials and all items of labor and materials furnished
or to be .... furnished for which payml;!nt has not been made and the amounrs to be paid therefor.
{b) All for the pt:rfonnancc of any work or the supplying of any labor. materials
or services for the design or Construction of the Improvements, shall provide that all rights
and liens oftht: applicable architect. l!ngim::er, surveyor or other party and
any right to remove removable Improvements are subordinate to Lender's rights and liens,
shall require all subcontrncts. sub-subcontracts and purchase orders to contain n provision
waiving o thl! extent permiUt..'d by .applicable law and. to the extent not waivablc.
I l
subordinating the subcontractors'. sub-subcontractors' and mechanics and materialmens
liens and any right to remove removable Improvements to Londd s rights and liens for all
work perf on ned for which payments are made to the applicable contractor. architect, engineer.
suppliers. suncyor or other party. -
{c) The parties agree that the Construction Contract.. Architectural Contract, and
any other contracts entered into by Borrower shall be coltatcrd!ly assigned to Lemler at
Lender's request.
4.6 Pavmenl and Performance of Obligations.
Borrower shall perform in a iimely manner all of it5 obligations under the Architect's
Contract, the Construction Contract and any and all other contracts and agreements related to rhe
construction or operation of the lmprovemems. and Borrower will pay when due all bills tor services
or labor performed and materials supplied in C<Jnnection with the development of the Land and the
construction of the Improvements. Within sixty (60) dnys after the filing of any mechanic's lien or
other lien or encumbrance against the Propetty. Borrower will promptly discharge the same by
payment or filing a bond or as otherwise as permitted by Law. So long as Lender's first priority
security interest in the Property and all other assets pledged to Lender has been protected by the filing
of a bond or in a manner satisfactorv w Lender in its solt: Borrowt!r shall have
the right ro contest any claim. lien or encumbrance. provided that Borrower does so diligently and
\Vithout prejudice to Lt:ndcr or delay in completing construction of the Improvements. Borrower shall
furnish to Lender prior to commencement of work associated with Construction of the .lmproverm:nts
evidence. in fom1, substance and amount satisfactory to Lender. of the performance bonds procured
for all contractors and material subcontractors and suppliers of construction hard costs naming Lender
as an obligee unless arrangements sadsfactOI)' to Lender have bt.-en made for payment by Lender
directly to any such contractor. subcontn1ctor or supplier.
4.7 Correction of Construction Defects.
Promptly following any demand by Lender. Borrower shall correct or cause the correction of
any structural defects in the Improvements, any work that fails to comply with the requirements of
Section 4.3 and any material departures or deviations from the Plans and Specifications not "pproved
in writing by Lender.
4.8 Insurance.
Borrower shall maintain the following insurance at its sole cost and expense:
(a) Insurance against Casualty to the Property under a policy or policies covering such
risks as are presently included in "special form" (also known as 'all risk") coverage. includin!l
such risks as are ordinarily insured against by similar businesses. bur in any event including
lightning, hail. cxplosiont riot, riot auending a strike, civil commotion.
damage from aircrafi, smoke, vandalism, malicious mischief and acts of terrorism. Such
insurance shall nome Lender as mortgagee and loss payee. Unless otherwise agreed in \\Titing
bv Lender. such insuronce shall be for the full insurable value of the Property. wirh a
amount. if any. satisfactory ro Lender. No policy ot' insurance shall be written such
that the procee-ds thereof will produce less than the minimwn coverage required by this
Section by reason of co-insurance provisions or othenvise. The term "full insurable value"
means one hundred percent (I 00%) of the actual replacement cost of the Property
12
foundation and excavation costs and costs of underground fiue:s. pipes. drains and orher
uninsurable items).
(b) Comprehensive (also known as commercial) general liability insurance on an
-occurrence basis against claims for "personal injury- liabilhy and liability ror bodily
injury and damage to propeny. products and <'omplcred operations. with respect to coverage
lim its satisfactory to Lcndor with respect to any one occurrence and the aggregate of all
occurrences during any given annual policy period. Such insurance: shall name Lender as an
additional insured.
(c) Workers compensation insurance for all employees of Borrower in such amount as is
required by Low and including employer's liability insurance. if required by Lender.
(d) During any period of construction upon the Propeny. Borrower shall maintain, or
cnusc others to maintain. builder's risk insorancc (non-reponing foml) of the type
customarily carried in the case ofsimilarcom.itruction for one hundred percent (100%) of
the full rcplocem111 cost of work in place and materials stored at or upon the Propeny.
\C) If ut any time any portion of any s!ructure on the Pn.1pe11y is insurable against
Casualty tlood and is located in a Special Flood Hazard Area under the Flood Disaster
Protection Act of 1973, as amended. a flood insurance policy in form and amount acceptable
to Lender but in no amount less than the amount suflicient to meet lhe n."quiremcnts of
applicable Law n.s. such requirements may from time to time be in cffecL
(0 LOss of rental value insurance or business interruption insurance in an amount
accL'Ptablc to Lender.
(g) Such other and further insurance as may be required trom time to time by Lender in
order to comply with regular rctjuiremems and practices of Lender in similar transactions
including. if required by Lender. wind insurance and earthquake insurance, so long as any
such insurance is gcnerntly availablt: at conum.:rcially reasonable premiums as dt::tem1incd by
Lc:ndcr tiom time to lime.
(h) In addition to the foregoing. Borrowor shall cause the Contractor to provide and
maintain compn!hensivl! {comn1cn.::ial) gl!ncml liability insurance and workers compensation
insurance: tOr nil employees of the Contractor mecling, respectively. the of
Subsections (b) and (c). above.
(j) Each policy of insurance (i') shall be issued by one or more insurance companies each
of which musl have an A.M. Best Company financial and pcrtOmHmce rating ofA-lX or better
and urc qualified or authorized by the Laws of the State to assume the risks by such
policy, (ii) with n:spcct to the insurance de!:tcribcd under the preceding Subsections (a). (b) and
shall have attached thereto standard non--contributing_ nonMreporting mortgagee clauses in
favor of and entitling Lender without contribution to collect any and all proceeds payable
under such insurance. either us sole payee or a:; joint payee with Borro\vcr. (iii) shall provide
rhat such policy shall not be canceled or modified without at least 1hir1y (30} days prior written
notice to Lender. and (iv) shall provide that any loss otherwise payable thereunder shall be
payable notwithstanding any act or negligence of Borrower which might. absent such
resulr in a forfeiture of all or a part of such insurance payment. Borrower shall
pay all premiums when due on such insurance and, not less than thirty (30) days
prior to the expiration dates of each such policy, Borrower will deliver to Lender acceptable
13
evidence of insurance. such as a renewal policy or policies marked "premium paid .. or other
evidence satisfactory to Lender rellecting that oil required insurance is current ond in force.
BorrO\VCr will immediately give Notice to Lender of any cancellation of, or change any
insurance policy. Lender shall not, \x:cause of accepting, rejecting, approving or obtaining
insurance. incur any liability for (A) the existence. nonexistence. form or legal sufiiciency
thereo[ (B) the solvency of any insurer. ur (C) the payment of losses. Borrower may
any insurance requirement hereunder by providing one or more '"blanket" insurance policies.
subject to Lenders approval in each instance as to limits. coverages, forms. dcductibles,
inception and expiration dates. and cnnce11ation provisions. A summary of the insurance
coverages are set forth on Exhibit J hereto.
4.9 AditJstmcnt ofCondcmniltion and Insurance Claims.
Borrower shall give prompt Notice to Lender of any Casualty or any Condemnation or
threatened Condemnation. Except as provided below. Lender is authorized, at its sole and absolute
option. to commence. appear in and in its own or Borrower s name. any action or
proceeding relating to any Condemnation or Casualty. and to make proof of loss for and to senlc or
compromise any Claim in connection therewith. In such case. shall have the right to rec-eive
all CondemmHion Awards and Insurance Proceeds. and may deduct therefrom all payments of its
E.x.pcnses. Huwcver, so long as no Event of Default has occurred and is then continuing.. and
Borrower is diligently pursuing its rights aJ\d remedies \vith respc:ct to a Claim. (i) L:::nder wiil obtain
Borrower's wrinen consent (which consent shall not be unreasonably withheld or delayed) before
making proof of los; for or settling or compromising such Claim and (ii) Lender shall allow Borrower
within a reasonable period of time to make proof of loss, sen!e or compromise any Claim below the
Loss Threshold. Borrov.cr agrt!es to diligently assert irs rights and remedies with respect to each
Clairn and to promptly pursue the settlement and compromise of each if the Claim in t::Xcess of
the Loss Threshold. subject to Lender's approval, which approval shall not be unreasonably withheld
\X delayed. Notwithstanding any provision to the contrary in this Agreement if prior to the receipt by
Lender or Condemnation Award or Insurance Proceeds. the Property shall have been sold
pursuant to the provisions of the Mortgage. Lender shall have the righl Ia receive such funds (a) to the
cxtt:nl of any ddicicncy found tu be due upon such sale with interest thCrcon (whether or not a
dcticiency judgment on the Mortgage shall have been sought or recovered or denied), and (b) to the
c:\.tcnt necessary 10 reimburse Lender tOr its Expenses. If any Condemnation A "\.\tards or lnsumnce
Prm:ecds arc paid lo Borrower, Borrowt:r shall receive the same in trust for. Lender (other than Net
Proceeds below the Loss Threshold so long as 110 Event of Default has occum.-d and is continuing) and
\Vithin ten (I 0) days after Borrov . .-er's receipt of any Condt!mnation Awards or Insurance Proceeds
{other than such Net Proceeds bdow the Loss Threshold). Borrower shall deliver such awards or
proceeds to Lender in the form in which they werl! received. togelhl!r with any endorsements or
documenls lhat may be necessary to c!Tcctivcly negotiate or transfer the sam:: to Lender. Borrowt:r
al!rces to execute and deliver from time to upon the request of Lender. such further instruments
u; documents as. may be requested by Lender to continn the grant and assignment lo Lender uf an)
Condemnation :\''''trds or Insurance Proceeds.
4.10 Utilization l1fNet Proceeds.
(a) All Net Proceeds of the Loss Threshold must be utilized either for payment of the
Oblik<ations or for the restoration of the Property. Net Proceeds may be utilized for the
restoration of the Property only if no Event of Default shall exist and is then continuing. and
only if in the reasonable judgment of Lender (i) there has been no material adverse change in
thl! BorrO\Ver':i ability to complete Construction of the Improvements in accordance with 1ht:
Projc'l:t S.:hcdul<; the l3udget and Plan Specifications nr the tinancial viability of the operation
14
of the Improvements. (ii) the Net Proceeds. together with other funds deposited with Lender
for that purpose. are sufticient to pay the cost of the restoration pursuant to a budget and plans
and specifications approved by Lender. and (iii) the restoration can be completed prior to
Maturity Date and prior 1<1 the date required by the Take Out Financing Arrangements.
Othorwisc. Net Procet:ds shall be utilized for payment of the Obligations.
(b) If Net Proceeds are to be utilized for the restoration of the Property. the Net Proceeds
must be deposited in an interest-bearing account established by Lender with a financial
institution of Lender's choice, which account will be assigned tO Lender ns additional security
for the Loan. Disbursements of funds from the account will be made in a manner consistent
with, and subject to. the requirements for the funding of advances of the Loan and the terms of
this Agrccmen.l regarding the disbursement of Loan proceeds.
4.11 Manrrgemcnt; Kcv Personnel.
Borrower al all times shall provide for competent and responsible management and operation
of the Property. Borrower shall notify Lender, in writing, prior to the hiring of any new Senior
Management Per;onncl of each of Borrower or the General Partner or the Amendment of any
substantial terms of the employment of said Senior Management Personnel. The hiring or changing
rcm1s of employment of any such Senior Managc:ment Personnel shall be subject to Lender's prior
written nppruvnl. not to be unrcasonabl) \vhhhcld or ddayed. Any Senior Management Personnel
contracts a!l'ccting thl! Pn1perty mu!:!l also be approved in writing by Lt::ndcr prior to execution of the
sumc. Any termination of Senior Personnel shall be subject to notice to Lender;
however. Bofro,,.er need not obtain prior "WTitten approvaL
4.12 Books and Rt.-cL"lrds: Financial Statements: Tax Returns.
Borrower will keep ami maintain full and accumtc: books and records administered in
accordance with GAAP. consistently applied, showing in detail the earnings and expenses of the
Property and the operation thereof. Borrower will keep and maintain its books and records, including
recorded clara of any kind and regardless of the medium of recording, at the address of Borrower set
forth in Section 9.3. Borrower shall pem1it Lender, or any Person authorized by Lr:nder. to inspect
and cxamlnc such books 011d records (regnrdless ofwhe:rl! maintained) and all supporting vouchers and
data and to make copies and extracts therefrom at all reasonable times and as allen as may be
requested by Lender. Borrower will furnish or cause to be furnished to Lender annual linancial
stateml!nts., including bah;rncc s.hce:ts and income stotements, for Borrower, each Guarantor and the
Property, within ninety (90) days atl.er cuch fiscal year end for the respective repcrting party. In
addition., Borrower will fumish or cause to be fumishcd 10 Lender, with reasonable promptness (but in
any \Vithin f'ive (5) Business Days}. such imcrim financial statements of Borrov.'CrT each
Guarantor and the Property, together with additional infonnation. reports or s1alements in
connection therewith. as Lender may from time to time request All financial statements must be in
fonn and detail acceptable lo Lender and must be certified as to accuracy by Borrower or the
respective Guanmtor. as the case may be. and must be audited by a nationally recognized independent
certilled public accounting tim1. Borrowt:r shn!J provide .. upon Lender's request. convenient facilities
lor the audit and vcrilication of any such statement. All certifications and signatures on behalf of
corporations. partnerships. limited liability companies and other entities shall be by a representative of
the reporting party satisfactory to Lender. All linancial statements for individuals shall be on Lendei's
then-eurrent pcrsonallinancial statement form or in another tbrm satisfactory to Lender.
15
4.13 Estoppel Certificates.
Within ten ( 10) days after any request by Lender or a proposed assignee or purchaser of the
Loan or any interest therein, Borrower shall cet1ify in writing to Lender, or to such proposed assignee
or purchaser, 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 set ofT. Borrower shall give a detailed written description of such c !aimed right.
4.14 Lender"s Rit!hts to Pav and Perform.
H: after any required nmice. Borrower fails lo promptly pay or periom1 any of the obligations
owing or due to any third party in connection with Construction of the Improvements or otherwise
related to tltc transactions contemplated by the Loan Documents within any applicable grace or cure
Lender. without Notice to or demand upon Borrower. and v .. ithoul waiving or releasing any
such obligation or Default, may (but shall be under no obligation to) at any time thereafter make such
payment or pcrforn1 such acr for the account and at the expense of Borrmvcr. Lender may enter upon
the Property for that purpose and take all action thcn.-on as Lender considers necessary or appropriate.
At the option of Lender, In I lowing the occurrence and during the continuance of an Event of Default.
Lender may apply any undisbursed Loan proceeds to the satisfaction of the conditions of the Loan
Documents, irrespective of the allocation of such Loan proceeds in the Budget. Without limitit)g the
generality of the foregoing. Lender may pay directly from the proceeds of the Loan all interest bills
rendered by Lender in connection with the Loan, and following the occurrence and during the
continuance of an Event of Default may make advances directly to the Contractors, the title insurance
company: any subcontractor, sub-subcontr..s.ctor or material supplier. or to an)' of them joint!)'- The
execution hereof by Borrower shall, and hereby does, constitule an irrevocable authorization to so
advance the proceeds of the Loan. No further direction or authori>.ation from Borrower shall be
necessary to warrant such direct advances. The Loan Amount shall be secured by the Mortgage and
other Security Documents and shall satisfy the obligations of Lender hereunder to the extent of the
amount ofthc disbursement
4.15 Reimbursement; lntcrtst.
If Lender shall incur any Expenses or pay any Claims by reason of the Loan or the rights and
remedies provided under the Loan Documents (r"gardless of whether or not any of the Loan
Documents expressly provide tOr an indemnification by Borrower against such Claims). Lender"s
payment of such Expc:nscs and Claims shall constitute advances to Borrower vd1ich shal.l be: paid by
Borrower to Lender on demand. together with interest thereon from the date incurred until paid in full
at the rate of interest then applicable to the Loan under the tcrins of the Note. Each advance shall be
secured by the Mort and tht: other Security Documents fully as if rriadc to Borrower. regardless of
tht! disposition thereof by the pnrty or pa11ies to whom such advance is made. Notwithstanding_ the
foregoing, however, in any action or proceeding to foreclose the Mortgage, to exercise Lender's rights
with respect to any other Collateral or to recover or collect the Obligation<, the provisions or Law
goventing the recovery of costs, disbursements and allowances shall prevail unaffected by this
Section.
4.16 Notilication by Borrowl!r.
Borrower will promptly give Notice to Lender of the occurrence of any Default or Event of
Default hereunder or under any of the other Loan Documents. Borrower will also promptly give
Notice to Lender of any claim of a default by Borrower, or any claim by Borrower of a default by any
other party, under the Architect's Contract the Construction Contract and any other contmcts with
16
respect to the Construction of the Improvements. If none of the foregoing cvetlls has occurred, the
chief financial officer of Borrower shall certify thereto to Lender in writing which shall be delivered to
Lender, together with the delivery of the annual financial statement and any interim financial
statement referred to in Section 4 .12.
4.17 Borrower,
Borrower aerees to indemnify Lender and to hold Lender hanmless from and against and to
defend Lender by c;unsel approved by Lender against, any and all Claims directly or indirect!; arising
out of or resulting from any tnmsaclion. net. om iss ion, event or circumstance in any way connected
with the Property or thf!' Loan, including any Claim arising out or or resulting from (a) construction of
any Improvements, including any defective workmanship or (b) any failure by Borrower to
comply with the requirt:mcnts of any Lav.s or to comply with any agreement that applies or pertains to
the Property. including any agreement with a broker or .. in connection with the Loan or other
linancing of the Property: (c) any other Ddault or Event of Default hereunder or under any of the
other Loan Docurncms; or (d) any asst:nion or alleSntion that Lender is liabh:- for any aCt or omission
of BoiTO\\'cr or any other Person in connection with the ownership. development: financin& leasing.
opcmtion or sale of the Property: providcg, however, that Borrower shall not. be obligated to
indemnify Lender with respect to any Claim arising solely from the gross negligence or willful
misconduct of Lender. The agreements and indemnifications contained in this Scc:rion shall apply to
Claims arising both before and nftcr thl! repayment of the Loan and shall survive the reps.yrmmt of the
Loan. any foreclosure or deed, assignment or conveyance in lieu tht!reof and any other action by
Lender to enforce the rights and remedies of Lender hereunder or under the other Loan Documents .
. us Fees and Expenses.
B<lrrower shall pay all fees, charges, costs and expenses reasonably required to satisfy the
conditions of the Loan \Vithout limitation of the foregoing. Borrower will.pay, when due.
and if paid by Lender \1.dll reimburse Lender on demand for. all reasonable;: ruid t:xpcnses of the
Lt,an Monitor. the title insurt!r, environmental enginet:rs, appraisers, surveyors and Lender's counsel
in connection with the closing. administration, modification, monitoring or any workout" of the
Loan, or the enforcement of Lender"s rights and remedies under any of the Loan Documents
4.19 1\ppraisals.
Lender nlll)' <>btnin from time to time an appraisal of all or any pan or the Propert)', prepareJ
in -accordance with wrilten instructions from Lender, from a third-party appraiser satisfactory to, and
ongagcd directly by, Lender. The cost of one such appraisal obtained by Lender and the cost of each
such appraisal obtained b; Lender following the occurrence of an Event of Default shall be borne by
Borrower and shall be paid by Borrower on demand.
4.20 Principal Depository.
Borrower shall maintain with Wells Fargo Bank all of its principal deposit accounts for the
maintenance of business including the Borrower's Deposit cash management. operating and
administrative deposit accounts. Borrower shall nol maintain any other depository accounts without
Lender's prior written conscnl.
4.21 Board Representation.
(n the event BorTower opemtcs with a Board of Directors, then from and after lh!! Clo;:;ing
17
Date during the term of this Agreement, a representative of Lender will be notified of, and shall be
pennitted to attend. each of Borrowers and each of Guarantor's Board of Directors meetings (or the
cquivalen1 thereof) as an observer.
4.22 CQ!I!pliancc with Packers and Stockvard Act Etc.
Borrower .shall (a) complete all Construction of lmprovements and orher processes and
procedures needed to commence Borrower's business as a packer at the Property, (b) upon
commencement of Borrmver's business. opcnllt! as a packer in full compliance with Chapter 40 J 5A
of the South Dakota Codified Laws. the applicable regulations, orders and directives or the South
Dako!.ll Animal Industry Board. the Packers and Stockyards Act and its applicable regulations, (c)
obtain. maintnin and timely renew all licenses, pemtits and bonds necessary to operation the business
as a packer, (d) timely pay for all acquired livestock so as not to granL incur or suffer the creation of
any lien in favor of livt$!ock sellers that is unpaid outside the ordinary course of business. (e) maintain
sole title to all purchased livostock, (I) satisfy all requirements of the Food Security Act. the Packers
and Stockyards Act suflicicnt to obtain clear title to all purchased livestock, (g) comply with all
employment and labor laws with respect to the Borrower's labor force, (h) satisfy nnd comply with all
proct:durcs. regulations. certification elements and directives required in the receipt. slaughter.
processing, packaging, storing and shipping of livestock and the rc!Sulting meat products, and (i)
provide t..':Onlt:tnporaneous notice lo Lender of any and all claims on any bond and any nnd all
warnings. compliance directives, orders, adverse inspection reports. notice of violations or revocation.
and commencement of any admini:strntive proceeding related to any pcm1it,. bond or licensl! affecting
the facilit) or Borrower's operation as a packer.
4.23 AF.COM Report.
As described more tully in the draft Phase I Site Assessment and
Environmental Compliance Review ofNonhem Beef Packers. Aberdeen, South Dakota. dated
:>.1ay 7. 2010, prepared by AECOM Technical Services, approximately 800 gallons of diesel
fuel was rdcascd on thc.Land in August 2007. Lender understands that the diesel impacted
soil and cause such soil to be disposed of ciT-site in accordance with applicable Law and take
all other investigation and remedial actions (collectively. such excavation. off-site disposal.
investigation and remedial actions are referred to herein as "Response Actions'' to the extent
such Response Actions arc (i) required pursuant to applicable Law or by a Governmental
Authority or (ii) requested, in "Titing. by Lender. lri order to cover the cost of such Response
Actions. tho amount of Thirty-one Thousand Dollars ($31.000) shall be included in the
Budget. nle Borrower shall not usc the S31,000 tor any purpose other than to. cover the cost
of Response Actions as described in this Section 4.24 without the written consent of Lender.
Existence. To preserve and maintain the organizational existence. rights,
franchises, licenses, trademarks, copyrights and privileges of Borrower.
4.25 Sale Mer2cr or Consolidation. To not liquidate. dissolve, merge or otherwise
consolidate Borrower with or into any other entity, or sell, lease, transfer or otherwise dispose
of all or any substantial part of the assets of Borrower, without Lender's approval.
4.26 Financial Statements. Borrower agrees to prepare yearly reports, as spcci lied
bv Lender sening fonh the operation, job creation and other financial infonnarion concerning
18
the operation. Said reports are to be provided at the same time as the audited financial
statements.
4.27 Inspection. To permit Lender, or any employee or agent of Lender. upon at
least twenty-four (24) hours telephonic notice, at any time during regular business hours to
inspect the properties and all books of Borrower.
4.28 Indebtedness. To not incur, permit to remain outstanding; assume or in any
way become committed for indebtedness in respect of borrowed money, except: (i)
indebtedness incurred hereunder; (ii) trade debt incurred. for adequate consideration, on
commercially reasonably terms, and in the usual and normal course of business: and (iii)
indebtedness disclosed in Exhibit C.
4.29 Liens. To not create, suffer or permit to exist any lien or encumbrance of any
kind or n t u r ~ upon any of its assets now om1ed or hereinafter O\Vned or acquired, except for
(i) liens. mortgages. and encumbrances in favor of Lender: (ii) indebtedness owed to Senior
Lender previously incurred; (iii) liens for taxes. assessments and plher governmental charges
not yet due or which ure being contested in good taith and for which reserves have been made
as shall be required by gencmlly accepted accounting principles; and (iv) liens of landlords.
vendors. carriers. wart:housemen, mechanics. laborers and materialmen arising at law in the
ordinary course of business for sums not yet due or being contested in good faith and tor
which reserves have been made as shall be required by generally accepted accounting
principles.
4.30 Taxes. To pay and discharge all taxes, assessments and governmental charges
or levies imposed on Borrower. upon its income or profits or upon any properties belonging to
Borrower prior to the dale on whkh penalties attach thereto; provided that Borrower shall not
be required to pay any such tax, assessment, charge, levy or claim that is being contested in
good faith and by appropriate legal proceedings and as to which adequate reserves shall have
been established. and as to which no foreclosure, sale or similar proceedings have been
commenced.
4.31 Investments and Loans. To not make any loan, advance. extension of credit, or
capital contribution to any person or legal entity.
4.32 Maintenance of Properties. To maintain, or cause to be maintained, in good
repair. working order and condition [ordinary wear and tear exc.:-pted), all of Borrower's
properties. whether roal or personal, O\\<ncd or held under lease, and specilically including.
without limitation, the property subject to the Loan Documents, and from time to time make
or cause to be made all repairs, renewals. replacements. addition5. betterments and
impnwements tim may be reasonably required to keep and maintain such property in good
condition and repair and in working order. wear and tear excepted.
4.33 Franchises and Intellectual Propertv. To take all reasonable acts to preserve
the Borrower's ownership rights to all of its franchise agreements and intellectual property,
including. but not limited to. trade names. entity names, trademarks, copyrights and patents.
19
websites, and website domain names, and to take diligent action to challenge any cancellation
or infringement thereof by third parties.
4.34 Laws and Reuulations. To comply in all respects with any and all applicable
ti!deral, state, county and local laws, statutes, ordinances. orders. rules, codes and regulations
with respect to its real and personal property, businesses, assets, inventory, and employees.
4.35 Notification of Leual Actions. To notify Lender in writing "ithin Five (5)
days of receipt of any infonnation indicating that any legal action has been or may be
commenced or threatened against Borrower where the amount in controversy, either directly
or indirectly. alone or in combination with any other actions; suits or proceedings exceed the
sum of Fifty Thousand Dollars ($50,000).
4.36 Adverse Chan>1c. Upon obtaining any knowledge of any material adverse
change in the financial condition or future prospects of Borrower. to promptly provide Lender
with wriuen notice describing in detail the nature of such adverse change.
4.3i Managers and Principal Place of Business. To not change the orticers.
directors or managers of Borrower or other employees earning more than One llundred
Thousand Dollars ($1 00,000) per year, or the location of the executive office or principal
place of business of Borrower without Lender's approval.
4.38 Sell. Convev and Transfer. To not sell, convey, transfer, dispose of, or further
encumber the properties of Borrower, pledge of partnership interests of or any part
thereof or any interest therein except as provided in this Agreement or any of the Loan
Documents, whether voluntarily. involuntarily, directly, indirectly, or otherwise.
Indemnification. At Borrower's expense, to protect. defend and indemnify.
and save and hold Lender harmless from and against any and all judgments, liabilities, losses.
damages. costs or expenses. including without limitation. court costs and reasonable anomey
fees, which arise out of. arc c.aused by. or relate to any claim, demand, suit, cause of action.
investigation or proceeding brought or asserted against Lender by any person or entity to the
extent the same relate to this Agreement, the Loan, the Note, any of the Loan Docum<:nts
and/or any other documents. certilicatc.:- or agreement by Borrower to 'Lender in
connection herewith or therewith. Borrower shall immediately pay l.cnder upon demand all
such judgments. liabilities, losses, damages. costs and expenses, including court c:osts and
reasonable attorney fees. incurred by Lender as result of any kgal or other action arising out
of this Agreement, any of the Loan Documents, and/or any document, certiticatc or
ameement delivered bv Borrower to Lenders in connection therewith.
- .
4.40 Further Assurances. Following the mak.ing of the Loan or any installment
thcn:oC the Borrower shall promptly, at the request of the Lender, take such a<:tion and
execute and delivt'T to Lender such further assignments, endorsements, consents, instruments.
agreements and/or other documents as Lender may reasonably request in order ro perfect
Lender's security interests and otherwise consummate and carry out the transactions
20
contemplated by lhis Agreement, the Note and/or any of the Loan Documents for the benctit
of Lender.
4.41 Third Pm1V Claims. Lender shall not be liable to. and Borrower shall save
Lender harrnkss !rom and against all claims of materialmen, contractors, subcontractors.
laborers and others for goods and delivered by them to Borrower or any of its properties or
services perfonned by them lor Borrower or any of its properties or othern;se in connection
with Borrower. Borrower shall not be considered to be lhe agent of Lender for any purpose
whatsoever.
4.42 . Capital Expenditures. At any time following the initial completion of
construction of lhe Project, Borrower will not make any capital expenditure in excess of Five
Hundred Thousand Dollars ($500.000) without prior wrinen consent of Lender.
4.43 Restricted Pavments. Borrower shall not, and will not be permitted to, declare
or make. or agree to make, or pay, either directly or indirectly, any distribution or dividend to
any of its members or owners hereunder unless specifically approved by Lender.
4.44 Compensation to Manal!ement. Borrower shall not pay any bonus or
management fees to any executive, employee, partner, member or director in excess or any
salarv set forth at the time of the execution of this Agreement and in no such payments
shall exceed Two Hundred Fifty Thousand Dollars ($250,000) in any aggregate rolling
rwcl ve-month period unless such compensation to management has been approved by Lender.
4.45 Packers and Stockvards Act. 1921. The Borrower shall comply in all material
respects with the Packers and Stockyards Act, 1921. as amended (7 U.S.C. 181-229) and the
regulations promulgated thereunder so that the trust for the benefit of all unpaid cash sellers or
of heef thereby shall not arise in connection with its purchase of any such livestock.
Borrower shall not taken any action which would impair its ability to benefit from the trust
established under such Act in connection with any sales by the Borrower of beef covered by
such Act.
The foregoing covenants are in addition to the obligations. undertakings and
agreements of lhc Borrower cuntained in the Note and other Loan Documents, each of which
are incorporated herein by this reference, and all of which shall be deemed to have been made
bv Borrower herein at and as of the date hereof. and as though made hereunder at and as of
the date hereof with the same force and e!Tect as if the same were set forth in the body of this
Agreement in their entirety, and all such obligations, undertakings and agreements shall
su".-vive the disbursing of' the Loan and the execution and delivery of the Note and the Loan
Documents.
4.46 Pennits. Borrower shall secure all necessary city, local, state or federal
pcmtits required ro operate said Project.
4.47 E-Vcrifv. Borrower agrees that "U.S. law requires companies to employ
ooly individuals who may legally work in the United States- with U.S. Citizens, or foreign
21
citizens who have the necessary employment authorization. This diverse workforce
contributes greatly to the and strength of our economy, but that same strength also
attracts unauthorized employment. E-VerifY is an Internet-based system that allows
businesses to determine the eligibility of their employees to work in the United States. E-
Veriry is fast, free and easy to use - and it's the best '.vay employers can ensure a legal
workforce."
As a condition for maintaining/satisfYing Lender's loan to Borrower in good faith
and to avoid defaulting on the loan with respect to etTectivcly determining that any and all
persons hired and employed by Borrower are legal. Borrower will register to panicipate and
abide by all the requirements for voluntarily participating in the U.S. Government's. "E-
Vcrify'" employment authorization veritication program, operated by the U.S. Department of
Homeland Security's (OilS) U.S. Citizenship and Immigration Services (USCIS). Failure by
Borrower to register and fully abide by all the terms and conditions for use of E-Verify in
verifying an employee's employment authorization will be reason or grounds for declaring the
borrower to be in ddault of the loan, with the full outstanding balance subject to full and
immediate payment to Lender.
SECTION V.
Negative Co,enants.
5.1 CLtnditional Sales.
Borrower shall not incorporate in the Improvements any propeny acquired under a conditional
:,-ales contract or h:asc or as to which lhc vendor retains title or a security interest that is not included in
the Budget. without tht: prior \\Tittcn consent or Lender.
5.:!. Changes lo Plans. and Specifications.
Borro\vcr shall not make or permit any changes in the Plans and including nny
such changes that alter, diminish or add to the work to be perfonned or change the design of the
improvements. , .... ithout the prior written cr.)nse:nt of Lender and under such reasonable conditions as
Lender mny establish. prior written consent shall not be required. however, as to Dny change
order which (a) individually docs not caust! the lixcd or guarantt:ed ma:".:imum price of the
Construction Contract to be increased or decreased by more than $25,000 and, when added to all
previous change orders. docs not cause such price to be increased or decreased by more than $100,000
in the aggregate, (b) d0S not result in a material change to the design of the hnprovcmcnls, and (c)
has in writing by the Architect and any Governmental Autbority,tenant or other party
whose approval is required.
5.3 Insurance Policies and Bonds.
Borrower shal1 not do or pennit to be done anything that would affect the coverage or
indemnities pro...,.ided for pursuant to the provisions of any insurance perfonnance bolld. labor
and material payment bond or any other bond given in connection with the development of the Land
or the construction of the Improvements.
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5.4 Restrictions on lndebledncss.
Borrower will not create. incur. assume, guarantee or be or remain liable, contingently or
othcnvise. with respecl to any indebtedness other than:
(a} Customary accounts payable pilid rrior to any delinquency to trade creditors incurred
tOr services or goods purchased in the ordinary course of Borrmver"s business or in connection
with the de,,;elopment or Constmction of the [mprovements in accordance with the Plans and
Specifications and the pmvided that the aggregate amount of all such accounts shall
not c.,cced $50.000 at any time. other than approved product categories;
{b) Indebtedness to Lender under any of the LOlln Documents:
(c) Endorsements for collection. deposit or negotiation and warranties of products or
services. in each case, incurred in the ordinary course of business.
5.5 Restrictions on Liens.
Borrower will m>t {i} create or incur or suffer to he created or incurn:d or to exist any lien or
encumbrance (including. 'Vithout limitation, any lease) upon any of the Property of any character
,.,.hether now O\\'ned or ht!rea.ftcr acquired. or upon the income or profits therefrom; (ii) transfer any of
the Property or the income or profits (iii} acquire. or agree or have nn option to any
properry or t!Sscts upon conditional sale or other title rclcntion or purchase money security agreement,
device or arrangement: (iv) suffer to exist for a period of more than thirty (30) days after the same
shall have been incurred any indebtedness or claim or demand against it that if unpaid might by law or
upon bankruptcy or insolvency. or otherwise. be given any priority whatsoever over its general
creditors: or { v) sdl. assign. pledge or othcnvise transf!.!r any receivables with or without recourse:
n.mvided that Borrower may create or incur or sufl'er lobe created or incurred or to exist:
(a) Deposits or pledges made iu connection with, or to secure payment ot:
workmen's compensation. unemployment insunmcc. old age pensions or other
social security obligations:
(b) Liens on the Pmperty :15 and to the extent permitted by the Mortgage: and
(c) Liens in favor of Lender under the Loan Documents.
Borrower will not enter into or pcnni1 to exist any arrangement or agreement (excluding this
Agrcemt::nt and the othl!r Loan Documents) which directly or indirectly prohibits Borrower or any
Guarantor from crcming. assuming or incurring_ any lien upon its properties, revenues or assets
whether now owned or hereafter acquired in favor of Lender Utlder the Loan Documents.
5.6 Restrictions. on Investments..
Borrov.er will not make or penn it to exist or to remain outstanding any investment excepr
investments in:
(a) marketable direct or guaranteed obligations of the United States of America that
mature within one (I) year from the date of purchase by the Bmrowcr;
(b) deman'd deposits. certilicatcs of deposit. bankers acceptances and time deposits or
United States banks having tara! assets in excess of S 1.000,000.000; and
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(c) securities commonly known as "commercial paper" issut:d by a corporation organized
and existing under the laws of the United States of America or anv state thereof that at the
time of purchase have been rated and the ratings fnr which are not less than "P 1" if rated b'
Moody's. and not less than A 1" if rated by S&P;
provided, however. that such investments (other than demand deposits referred to in Section S.6(b)
above) will be considen:d investments pcm1ined by this Section 5.6 only if all actions have been tnken
to tht: :;;atisfaction of lender to provide to Lender a first priority perfected security interest in all of
:;u..:h investments free of all Hens.
5.7 Memcr. ConsolidatiQD and Disoosition of Assets.
(a) Borrower will not become a party to any merger. amalgamation or consolidation. or
agree to or effect any asset acquisition or stock acquisition (other than the acquisition of nssets
in the ordinary course: of business consistent with past practices).
(b) Borrower will not become a party to or agree to or effect any disposilion or assets.
other than the sale of inventory and the disposition of obsolete assets, in each case in the
ordinary course of business consistent with past practices.
5.8 Sole and Le<l:!ebac]i.
Borrower will not enter into any arrangement, directly or indirectly. whereby Borrower shall
sell or transfer any property owned by it in order then or thereafter to lease such property or lease other
property that Borrower intends to usc for substantially the same purpose as the property being sold or
transferred.
5.9 with Affiliates.
Borrower shall not without prior approval engage in any transaction with any affiliate
other than tor as employees. officers. and directors pursuant to contracts disclosed
previously to Borro\ver including any contract agreement or other arrangcmc:nt providing for
the furnishings to or by. providing lor rental of real or personal property to or from
or otherwise requiring payments to or tiom any such affiliate or to the knowledge of
Borrower. any corporation, partnership. tflL'il. or other entity in which such affiliate has its
substantial interest or is an otlicer. director. trustee, or partner on tenus more favorable to
such person than what would have been attainable on an arm's length basis in the ordinary
course of business or the value of which the aggregate amount exceeds One Hundred
Thousand Dollars (S I 00.000) per tiscal year of Borrower. Borrower shall not enter into
Management Agreements. Service Agreements or other similar agreements with General
Partner.
5 .l 0 Chan!!e in Nature of New t .ine of Business.
Borrower will not engage in any line of business substantially different from the lines of
business conducted by Borrower on the date hereof or engage or enter imo any new line of business.
5.11 financial Covenants.
{a) Tangible Net Worth. Borrower will not pcm1it Tangible Net Worth at any time to be
tess than an amount equal to the unpaid principal amount of the Loan multiplied by 1.25.
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(b) Funded Indebtedness to Shareholders Equitv. Borrower will not permit Funded
Indebtedness at any time to be more than 1.50 times Shareholder's Equity.
{c) Compensation to Senior ManagU?..,. Borrower will not pny or become legally
obligated to pay any fees. salaric:s or other compcnsudon to Senior Managers t:xcec:ding
Two Hundred Fifty Titousand Dollars ($250,000) in any rolling. twelve-month period. 'Senio;
Manager means and includt:s any executive:, employee. officer. member director, or
manager whose annual compensation is One Hundred "ll10ltSand Dollars ($1 00,000) or more.
(d) Interest Coverage Ratio. From and after such time as the Property is operational as a
mcatpacking plant, Borrowc:r will not permit the Interest Coverage Ratio at any time to be less
than 1.50.
5.12 Chan2e in Control. Without the prior "-Tittcn consent of Lender, there shall be
no change in the day-to-day control and management of Borrower or General Partner, and no
chanue in the Organizational Documents of Borrower or General Partner. General Partner
shall-nor withdraw or be removed from Borrower without the prior \\Titten consent of Lender,
it being acknowledged and agreed by Borrower and General Partner that any purported
withdrawal by or removal of General Partner without the prior written consent of Lender shall
be null and void.
SECTION 6
Default
6.1 Events of Default. Each of the following occurrences or events shall constitute
an .. Event of Default"' for purposes of this Agreement:
6.1.1 Nonpavment. The failure of Borrower to make any payment of
principal or interest as set forth on the Note or any payment of any other
amount payable to or for the benefit of the Lender by Borrower under this
Agreement. the Note, other Loan Documents or any other document,
instrument or agreement delivered by Borrower to Lender in connection
herewith, when and as due.
6.1.2 Nonoerformance. The failure of Borrower to observe or perform
anv of the obtit!ations, undcr1akines or aurccrncnts that are required to be
or pc;fom1cd by it undc; the te;ms of this Agreement. the Note,
the Loan Documents or any other documents, instnunents, or agreements
udivered to Lender by Borrower in connection herewith or therewith (other
than payment) if such tailure continues beyond the grace period applicable
thereto. or sw:h shorter period as may be reasonably specified in a written
notice thereof from Lender in the event such failure could reasonably be
expected to result in immediate loss or damage or irreparable harm to
Lender to a material degree.
6.1.3 Dissolution or Tnmsfer. The dissolution, liquidation, merger or
consolidation of Borrower with or into any other entity, or the sale of all or
any substantial portion of the assets of Borrower.
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6.1 .4 Warranties. Any material representation, warranty, schedule,
certificate. financial statement, report, notice or other V.Titing furnished by
or on behalf of Borrower to Lender or any representation or warranty
contained in this Agreement. the Note. the Loan Documents and/or any
document, certificate or agreement furnished by Borrower to Lender in
connection herewith or therewith being false or misleading as and when
given or becoming false and misleading at any time in the future.
6.1.5 ERISA. The occurrence of any reportable event under the
Employee Retirement Income Security Act of 1974, as amended, in respect
of any employee benefit plan mainlilined for employees of Borrower.
6.1.6 Liti2ation. The entry of any linancial judgment resulting from
judicial or administrati\'c action against Borrower or with respect lO its
assets. in which amount of such judgment alone or in. combination with
anv other unsatisfied judgmcm exceeds Fiftv Thousand and No/100 Dollars
(SSO,OOO.OO), if such judgment remains undischarged for a period of sixty
(60) days or more after the date on which such judgment becomes final
without any right of appeal to a higher court, and unless Borrower shall
have taken whatever action is required. including v.ithout limitation, posting
a supersedeas bond, to stay proceedings to enforce such judgment.
6.1. 7 Nonoerforrnance on other Indebtedness. The occurrence of any
default or event of delault, subject to curative rights. if any. or any event
which requires ihe prepayment of borrowed money or the acceleration of
the maturity or payment thereat: under the terms of any evidence of
indebtedness or other contract or agreement issued or assumed or entered
into by Borrower with any third party where the amow1t involved, alone or
in combination with any other default or cvcm, could reasonably be
expected to exceed Fifty Thousand and No/100 Dollars ($50.000.00).
6.1.8 Bankruptcv - Filinc of Petition. The filing by Borrower of a
petition seck ing relief. or a consent or answer consenting to a petition
seeking relief against Borrower under the Federal Bankruptcy Code, as now
constituted or hereafter amended, or any other applicable federal, state,
local or foreign law regarding bankruptcy, insolvency or creditors rights
gener.llly, or the consent by Borrower to the institution of proceedings
thereunder or the filing of any such petition or for the appointment or taking
possession of any substantial portion of Borrower's assets by receiver.
liquidator, assignee, trustee. custodian or similar official.
6.1.9 Bankruptcv - Entrv of Order for Rdief. The entry of a decree or
order by any court tbr relief in respect of Borrower under the Federal
Bankruptcy Code, as now or amended, or any other
Jpplicable federal. state. local or loreit,'ll law regarding bankruptcy,
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insolvency or creditors rights generally, or appomtmg or the taking of
possession of any substantial ponion of the Borrowers assets by receiver,
liquidator, assignL>e, trustee, custodian or similar official, or the
winding up of or liquidation of the affairs of the Borrower and any such
decree or order shall continue unstaycd and in effect for a period of sixty
( 60) consecutive days.
6.1.1 0 lnsolwnc,. lorrowcr becoming insolvent or !ailing or being unable
to pay their debts as they mature, or admitting in writing their inability to
pay their debts as they become due, or making a general assignment for the
benefit of their crcdiiors. or entering into any agreement suspending the
transaction or all or any substantial portion of their usual and customary
business operations.
6.1.11 Environmental Compliance. The or receipt of any notice
alleging violation of any environmental statute, law, ordinance. rule or
regulation relating to the present. prcviotL>Iy or subsequently owned or
leased real properties of Borrower. provided that such violation remains
uncured Sixty (60) days after the r<!ceipt of the relevant notice by Borrower.
6.1.12 Construction Prol!ress. Borrower iails to progress the construction
in accordance with the Project Schedule, other than for delays caused by
Force Majeure. delay in loan disbursements, or a default by the Contractor
under the Construction Contract pro,ided such delay is not the result ofthc
actions of Borrower.
6.1.13 Other Default. The occurrence of an event that constitutes a default
or Event or Default under either the Note. any of the Loan Documents,
and/or any othr::r document, certificate, instrument or agreement delivered
by the Borrower to the Lender in connection "ith the transactions
contemplated herein or therein.
6.1.1-t Curing Ddault. Except as otherwise stated herein, ifBorrower is in
default under any of the conditions set forth in Section 5. Borrower shall
have Thiny (30) days from when notice of default was given. to cure the
same.
6.1.15 Laose of Perm.its or Approvals. Any permit, license, certilicate or
approvrrl that Borrower is required to obtain with respect to the
construction. operntion. devdopment. leasing or maintenance of the
Improvements or the Property lapses or ceases to be in full force and ellect
and the same is not cured within live ( 5) days of such lapse or cessation.
6.1.16 ;>.1:neria1 Adverse Change. In the reasonable opinion of Lender, the
prospect of payment or performance of all or any pan of the Obligations has
been impaired because of a material adverse change in the tirumcial
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condition. results of operations. business or properties of Borrower,
Guarantor or any other Person liable lor the payment or perfommnce of any
of the Obligations.
6.1.17 Mechanic's Lien. A lien for the performance of work or the supply of
materials tiled against the Property, or any stop notice served on Borrower, the
Contractor or Lender, remains unsatisfied or unbounded for a period of siKty
(60) days aftc:r t ~ date of filing or service.
6.1.18 Performance Enjoined or Prohibited. Borrower is enjoined or
prohibited from performing any of its obligations under any of the Loan
Documents for a period of more than fifteen ( 15) consecutive days.
6.1.19 Appointment of Receiver. T rustce. Liquidator. Borrower. Geneml
Partner or any Guarantor applies for or consents in writing to the appointment
of a receiver, trustee or liquidator of Borrower, any general partner of
Borrower. any Guar,mtor. the l'ropeny. or all or substantially all of the other
assets of Borrower. any general partner of Borrower or any Guarantor, or an
order, judgment or decree is entered by any coun of competent jurisdiction on
the application t1f u creditor appointing a receiver, trustee or liquidator of
Borrower, any general partner of Borrower, any Guarantor, the Property, or all
or substantially all or the other assets of Borrower. any general partner of
Borrower or any Guarantor.
6.1.20 Judumcnt. A tina! nonappealable judgment tor the paymem of money
involving more than Fifty-Thousand Dollars ($50,000) entered against
Borrower or any Guarantor. and Borrower or such Guarantor fails to discharge
the same, or causes it to be discharged or bonded otT to Lender's satisfaction.
within thirty (30) days from the date of the entry of such judgment.
6.1.21 Dissolution: Change in Business Status. Unless the \vritten consent of
Lender is previously obtained. all or substantially all of the business assets of
Borrower or any Guarantor are sold, Borrower or any Guarantor is dissolved.
or there occurs any change in the form of business entity through which
Borrower or any Guarantor presently conducts its business or any merger or
consolidation involving Harrower or any Guarantor.
6.!.22 Default Under Other Indebtedness. Borrower or any Guarantor fails to
pay any indebtedness (other than the Loan) owed by Borrower or such
Guarantor to Lender when and as due and payable (whether by acceleration or
otherwise).
6.!.23 Change in Controlling Interest. Without the prior written consent of
Lender. (i) Borrower's sole general partner fails to continue to be Northern
Beer Packers Management, LLC or ceases to own and control at least F ony
Percent (40%1 of the aggregate panner interests in Borrower, (ii) more than
Fony-nine Percent (49%) of the limited partnership interests have been
transferred to a Person other than Gen.;:ral Paru1er, or (iii) General Partner
ceases to be owned and controlled solely by Mr. Oshik Song, or (iv) any
general panners in addition to General Panner are admitted to Borrower.
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7.1 gemedies on Default.
SECTION7
Remedies on Default
Upon the huppening and during the. continuance of any Event of Default. Lender shall have
the right. in addition to any other rights 9r remedies available to Lender under the Mortgage or any of
the other Loan Documents or under applicable Law. to exercise any one or more of the followine
rights and remedies: -
(a) Lender may terminate its obligation to disburse any further principal of the Loan
pursuant to this Agrccmc"t by Notice to Borrower.
(b) Upon thirty (30) days written notice Lender may accelerate all of Borrower's
Obligations under the Loan Documents whcrcupcn such Obligations shall become due and
payable,
(c) Lender may apply to any court of competent jurisdiction for. and obtain appointment
of. a receiver forthe Property.
(d) Lender may foreclose the Mortgage and/or exercise nil remedies with respect to any
other Collateral.
(e) Lender may set off the amounts due Lender under th.e Loan Documents against all
accmmts. credits. money. securities or other property of Borrower now or hereafter under [he
control. maimained in an account, or in the possession of Lender to the credit or for the
accowlt of Borrower. v, .. ithout notice to or the consent of Borrower.
(f) Lender may enter into pcssession of the Property and perform any and all work and
labor neccssal) to complete the development of the Land and the construction of the
Improvements (whether or not in accordance with the Plans and Specifications) and to employ
watchmc" to protect the Property and the Improvements. All sums expended by Lender for
such purposes shall be deemed to have been advanced to Borrower under the Note and shall
be secured by the Mortgage! and th...- olhcr Security Documt!nts. for this purpose. Borrower
hereby constitutes and appoints Lender its true and !awful with full power of
sub&1ilution. which power is coupled with an interest, but without any fiduciary to
complete the work in the name of Borrower. and hereby empuwcrs said attorney or altomcys.
in the name of Borrower or Lender:
{ i) ro use any funds of Bqrrowcr including any balanct! which may be under the
control or maintained in an account of Lender and any funds which may remain unadvanccd
hereunder for the purpose or completing the development of the Land and the construction or
the! whether or not in the mJtmcr called for in the Plans and
(ii) To make such additions and changes and corrections to the Plans and
Specitications as shall be necessary or desirable in the judgment of Lender to complete the
development of the Land and the construction of the Improvements:
(iii) Tu employ such conrractors. subcontractors. agents. architects and in::.-pt.-ctors
ns shall be ncl.-essary 1.1r desirable-for .o:.atid purpose:
29
(iv) To pay. or compromise all existing bills and claims which are or mav be
Hens against the Property, or may be neccssar:y or desirable for tlu: completion of tht! work or
the clearance of title to the Property:
(v) To execute ali applicatitms and certificates which may be required in the
name of Borro\ver;
(vi) To tile for record. at Borrower's co,;t and expense and in Borrower's name,
any notices of completion, notices of cessation of labor. or any other notices that Lender in its
sole and absolute discretion may consider necessary or desirable to protect its security: and
(vii) To do any and every act with respect to the development of the Land and the
construction of the lmprov<.mcnts \Yhich Borrower may do in its own behalf.
It is under>toou and agreed that this power of anomcy shall be deemed to be a power coupled
with an interest which connot be revoked so long as any Obligations are Said anomey-in-
fact shall also have the power to prosecute and defend all actions or proceedings in conn.ction with
the development of the Land and the construction of the Improvements and to take such actions and to
require such perfomtance a!i Lender may deem necessary,
(g) ln the event Borrower is not able to pay all obligations in full, then the amount
immediately due and payable shall bear interest at the increased mte ofTen Percent (10%) per
annum or. if less. the maximum rate permiucd by law until all amounts due hereunder or
thereunder arc paid in full and the Lender shall. without limitation be entitled to immediate
payment of such amounts together with all of the interest accrued thereon. Any imen:st
charged pursuant to this Par-dgraph shall be charged both as to any unpaid principal and
unpaid interest pa}nlents "hich have not been made according to schedule.
Section 7.2 No Release or Waiver Remedies Cumulative and Concurrent.
Borrower shall not be relieved of any Obligation 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 Propeny undor
the Mortgage 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 Property. No delay or omission of Lender
to exercise any right, power or remedy accruing upon the happening of an Event of DeillUil shall
Impair any such righL power or remedy or shall be construed to be a waiver of any such Evenl of
Default or any acquit:sccnct: therein. No delay or omission on the part of Lender to exercise any
option for accclt:rJ.tion of the maturity of the Obligations, or for foreclosure of the Mortgage or the
exercise of any right or n::mcdy under any of the other Loan Documents or applica.bli.! Law follov .. ing
any Event of Default as or any orhcr option granted to Lender hereunder in any one or more
instance..'. or the acct:ptance by Lender of any partial payment on account of !he Obligations shall
constitute a waiver of any such Event of Defauh and each s.uch option shall remain continuously in
full forct! and ciTcct. No remedy herein conferred upon or reserved to Lender is intended to be
exclusive of anv other remedies provided for in rhe Loan Documt.-nts. and each and every sUch remedy
shall be and shall be in addition to every otht!r n:medy givt:::n hereunder. or under the Loan
Do.::uments. or now or hereafter existing at Law or in equity or by statute. Every right. power and
rcmcdv "h-en bv the Loan Documents to Lender shall be concurrent and may be pursued separately.
Q -
successively or togt::ther against Borrower or the Property or any part and every right. power
and remedy given by the Loan Documents may be exercised from time to time as often as may he
deemed expedient by Lender.
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SECTION 8
Conditions of Lending
The obligation of the Lender to make the Loan, or any installment thereof, is subjL-ct to
the following conditions: .
8.1 Documentation. In addition to the condition.' precedent set forth in the Loan
Document,. the obligation of the Lender to make the Loan, or any installment thereof. is
subject to the condition that Lender shall have received. at the expense of Borrower. each of
the following. duly executed and othC'l'Wise in fonn and substance satisfactory to Lender and
its counseL and in such number of signed counterparts as Lender may request (except for the
Note, only one or each shall be signed):
8.1.1 Certificate of Limited Partnership and Certiticate of Existence of
Borrower. A copy of Certificate of Limited Partnership and a Certificate
of Existence or Borrower. in each case by the Secretary of State for
the State of its formation, to be true and correct.
8.1.1 Certificate or No Del'ault. A ccrtitkare signed by Borrower certifying
that: (a) no Event of Default is continuing or "ill result from the making of
the Loan. or any applicable installment thereof; (b) that Borrower has observed
and perfomted all obligations. undertakings and agreements required to be
observed and performed under this Agret:ment. the Note and the Loan
Documents; and (c) that the representations and warranties of Borrower as
contained herein and therein arc true and correct as of the date of the Loan, or
the applicable installment, as though such representations and warranties were
made on and as of that date.
8.1.3 Resolution of Borrower. A copy of the resolution of the partners and
directors or managers of Borro\\cr authorizing or ratifying the execution,
delivery and pcrt'omtancc. respectively. of this Agreement, the Note. and each
of the other Loan Documents and each other document. ccrtificaie or
agreement provided l(lr herein or therein.
8.1.4 Certilicates of lncumbencv. A ccrtitkare of the partners of Borrower
ccrtifvino the names of the Managers and Members of Borrower authorized to
- "
sign this Agreement. the Note. the Loan Documents and all other agreements,
documents and instruments provided lor herein and therein, together with a
santpk of the true signature of each such Manager anti Member. Lender may
conclusively rely on such certificates.
8.1.5 Note. The Note, duly e"ccutcd by Borrower.
8.1.6 Sccuritv and Pledge Agreement and Mortgage. The Security and
Pledge Agreement and Mortgage, duly executed by Borrower.
31
8.1.7 Lien Releases. Lender shall have completed any and all UCC searches
it may deem to be necessary or appropriate in connection with this Agreement
and the transactions contemplated herein and Borrower shall have provided
Lender with such fully executed UCC-3 Tennination Statements and such
otht::r tt:rmin3tions and/or re!t:ascs as are necessary in tht: opinion of Lender
and its counsel. in their sole discretion. to tenninate or release all liens, claims,
security interests. charges or encumbrances affecting the real estate or any
other assets owned by the Borrower, except as set forth in Exhibit C.
8.1.8 Miscellaneous. Such other documents and certificates. a' Lender may
reasonably request.
8.1.9 Pledue of Membership Units. Borrower agrees to allow the pledge of
all of its Ownership Interests in Borrower to Lender as additional collateral for
payment hereunder.
8.1.1 0 Apomisal. Borrower agrees to provide an appraisal of sufficient
amount to satisfy Lender and such appraisal shall be in an amount such that all
covenants herein arc met
8.1 .II. State Pledl!e. Prior to any disbursement of funds, Borrower shall
obtain a commitment from the State of South Dakota to lend at least Ten
Million Dollars ($1 0,000.000) through various programs
8.1.12. USDA. prior to any disbursement of funds. Borrower shall provide to
Lender proof that Borrower is proceeding to obtain from the United States of
America's Deparuncnt of Agriculture a loan guarantee of at least Ten Million
Dollars($ I 0.000.000) to be used in said Project.
8.l.l3. EPOCH STAR LiMITED. Prior to any disbursement o!' funds.
Borrower shall provide to Lender proof that an agreement to purchase Epoch
Star Limited has been agreed upon and all rights thereunder assigned to
Lender.
8.1.14. Lienholder. All lienholders shall have signed a consent as agreed upon
by the partb.
8.1.15. Title Insurance. Title insurance shall be obtained with a Lender's
Policy in favor of Lender.
8.1.16, Lien Holders. All previous lienholders, as set forth in Exhibit C have
subordinutd their lien to Borrower for the first $30;000,000 loaned. Borrower
al.!rees that all lienholders shall be paid in full and the liens satisfied trom the
p;occcds of the first $30,000.000 loaned.
32
8.2 Additional Conditions Precedent to Lender's Obligations. Each of the
following is an express condition precedent to the obligation of the Lender to make the Loan,
or any installment thereo[ to Borrower pursuant to the tenns of this Agreement. In the event
any one or more of the !allowing conditions are not satisfied to Lender"s reasonable
satisfaction. the L.:ndcr may at its option: (i) waive said condition and fund the Loan or the
applicable installment thereof; (ii) suspend perfonnance and pursue such other remedies as
may be otherwise available under this Agreement, at law or in equity; or (iii) terminate this
Agreement, in which event the Agreement shall be of no further force or effect whatsoever as
between the parties.
8.2.1 Reorcsentations and Warranties. At the date of this Agreement and the
funding of the Loan and any applicable installment thereof. the representations
and warmnti<:s set forth in this Agreement. the Note. the Loan. Documents and
all other documents; instruments or agreements delivered to Lender by
BotTowcr in connection herewith or therewith shall be true and correct as of
such date with the same effect a' though those representations and warranties
had been made on and as of such date and are continuing to be made.
8.2.2 No Default. At the time of this Agreement and the funding of the Loan
or applicable installment thereof. and immediately after giving effect to the
Loan or the applicable installment thereof, Borrower be in compliance with all
the tenns and provisions set fi.mh herein and/or in the Note. the Loan
Documents and all other documents, instruments or agreements delivered to
Lender by Borrower in connection or therewith. on their part to be
observed or perlonned. and no Event of Default shall have occurred and be
continuing at the time the Loan is made or would result from making the Loan
or any applicable installment thereo[
8.2.3 Absence of Material Adverse Events. There shall not exist any state of
facts or circumstances which could reasonably be expected to have a material
adverse efl'ect on the assets, llnancial condition, results of operations or
prospects of Borrower or on the ability of Borrower to repay the Loan in full
when due and/or observe or pcrfonn any part ofthe obligations, undertakings
or a>!rccments required to be observed or pcrtonned by them under this
the Note. the Loan Documents or any other document, instrument
or agreements giwn to Lender in connection herewith or therewith.
8.2.4 No injunction. No injunction, stay or restraining order shall be in
effect prohibiting the consummation of the transactions contemplated by this
Agreement.
8.2.5 Absence of I.iti!.!ation. Except as distloscd in Exhibit F. no action. suit.
investigation or proceeding shall have been commenced or threatened by any
governmental agency or any other person. finn or entity against the Borrower
andlor anv of its or their affiliates, members, oflicers. managers or directors,
with their propenies or \dth respect to the transactions contemplated
33
hereby, challenging the rights of the parties hereto lo consummate such
tr:msactiom; of which could reasonably be expected to have a material adverse
eiTect on the assets of the Borrower or the tinancial condition or results of
operations or prospects of Borrower. or .on the ability of the Borrower to
observe or pcrlbrrn any obligation, undertaking or agreement required to be
observed or pcrli>m1ed by it under this Agreement, the Note. the Loan
Documents cir any other documents. instruments, certifications or agreements
delivered to Lender in connection herewith or therewith.
8.2.6 All Proceedincs to be Satisfactorv. All action and other proceedings to
be taken by Borrower in connection with this Agreement shall be reasonably
satisfactory in form and substance to Lender and Lender's legal counseL
SECTION9
Miscellaneous
9.1 Liabilitv of Lender. Lender shall in no event be responsible or liable to any
person oth.er than Borrower for the disbursement or failure to disburse the Loan Proceeds or
any par! thereof and neither the Contractor. Loan Monitor. nor any Subcontractor, Sub-
subcontractor, laborer or material supplier. vendor or provider of services or s ~ l l ~ r of anv
commodities or cattle shall have any right or claim against Lender under this Agreement a"r
other Loan Documents.
9.2 Waiver of Default. Lender may. by w'li!len notice to Borrower, at any time
and from time to time, waive any default in the perfonnancc or observance of any condition,
covenant or other term hereof, which shall be for such period and subject to such conditions
as shall be specified in any such notice. In the case of any such waiver, Lender and/or
Borrower. as may be appropriate, shall be restored to their fanner position and rights under
this Agreement. the Note and the Loan Documents, and any Event of Default so \Vaived shall
be deemed to be cured and not continuing; however, no such waiver shall extend to or impair
any right subsequent thereto or to any subsequent or other Event of Default.
9.3 Notices. Any Notice. request, demand, waiver. consent. approval or other
communication which is required or permitted hereunder shall be in writing. All such notices
shall be delivered personally, by certified mail, return receipt requested. or by reputable
overnight courier (in either case costs prepaid and addresst:d as provided herein). and shall be
deemed given or made upon receipt thcreo[ All such notices arc to be given or made to the
parties at the following addresses (or to such other address as any party may designate by a
notice given in accordance with the provisions of this Section):
If to Lender:
Joop Bollen
SDIF Limited Partnership 6
.416 Production Street North
Aberdeen. SD 57401
34
With a copy to:
lf to Borrower:
With a copy to:
JciTrcy T. Sveen
Siegel. Barnett & Schutz. L.L.P.
400 Capital Building, 415 S. Main Street
P.O. Box 490
Aberdeen. South Dakota 57402-0490
jsveen;fi}sbslaw.nel
(605) 226-1911 FaK
David Palmer
Northern Beef Packers Limited Partnership
38749 135
11
' Street
Aberdeen. South Dakota 57401
Rory King
Bantz, Gosch & Cremer. L.L.C.
305 Sixth Avenue SE
Aberdeen. South Dakota 57402
9.4 No Waiver: Remedies. Lender shall not by any act be deemed to
have waived any right or remedy hereunder. No failure to exercise, nor any delay in
exercising, on the part of Lender, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right. power or privilege hereunder shall
preclude any other or further exercise thereof, or the exercise of any other right, power or
privilege. A waiver by Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which Lender would other.vise have on any
future occasion. The rights and remedies herein provided are cumulative, may be exercise-d
singly or concurrently and are not exclusive or any rights or remedies provided at law or in
equity.
9.5 Survival of Aurecmcnts. All covenants, agreements. undertakings, obligations
and all representations and warranties set forth or made herein shall survive delivery or the
Note. the Loan Documents and. the making of the Loan. and shall nevertheless remain in
dTcct and be enforceable as between the parties and in accordance with their terms for the
statute oflimitations period applicable thereto.
9.6 Further Documents. Borrower agrees to do such limber acts and things, and to
execute, acknowledge and deliver such additional documents or instruments as Lender may at
any time reasonably request in connection with the administration of this Agreemem or
related to the Note or the Loan Documents or in order to bener assure and conlirm to Lender
its rights and powers hereunder and thereunder.
9.7 Binding Agreements: Assiunments. This Agreement and the tenns. covenants
and conditions hereof. shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs. successors. trustees, receivers. administrators, and assigns. except that
Borrower shall not be permitted to assign this Agreement or any interest herein or in the Loan
or the collateraL or any part thereof. as described herein and therein, or otherwise
35
pledge, .:ncumber or grant any option with respect to the collateral governed by the Loan
Documents, or any part thereof, except to the extent specifically permitted under the terms of
the Loan Documents. Lender shall be entitled to sen or assign its interest or panicipation
interest in the Loan with notice to Borrower.
9.8 Entire Agreement. This Agreement, the Note, the Loan Documents and any
documents, instruments, or agreements given to the Lender by Borrower hereunder or
thereunder represent the complete and exclusive agreements of the panies with respect to the
subject matter hereof and thereof und replace and supersede any and all prior agreements or
understandings. whether "Tillen or ora!, with regard thereto and all negotiations leading up to
their execution and delivery.
9,9 Amendment. Neither this Agreement nor any provisions thereof may be
amended, modi.ticd. waived, discharged or terminated generally, except by an instrument in
writing duly signed by or on behalf of Borrower and Lender.
9.10 lncornoration bv Reference. Each of the recitals set forth at the beginning of
this Agreement, all of the exhibits which are attached hereto and all of the documents and
agreements referenced herdn, specifically including, v.ithout limitation, th" original Credit
Agreement, escept as amended herein, the Note and the Loan Documents, are incorporated
herein by this reference with the same Ioree and ct1cct as if the same were set forth in the
body of this Agreement in their entirety.
9.!! Interpretation. Any uncertainty or ambiguity extstmg herein shall not be
interpreted against any party because such pany prepared any portion of this Agreement, but
shall be according to the application of rules of interpretation of contracts
generally. The headings used in this Agreement are inserted for convenience and reference
only and are not intended to be an integra! pan of or to atTcct the meaning or interpretation of
this Agreement.
9.12 Scvcrabilitv, Provided the same would not deprive the Lender of the benetit of
its bargain hereunder or thereunder, if any term or of this Agreement, or the Note,
the Loan Documents or any other document or instrument executed in connection therewith,
including amendments and modilications or the application thereof to any person or
circumstance. shall to any extent be invalid or enforceable in any jurisdiction in which
enforcement is sought, the terms and provisions or the application of such tem1s or provisions
or the app!icatic>n of such tcm1s or provisions to persons or circumstances shall be ineffective
to the extent of such invalidity or unenlorceability in such jurisdiction without invalidating the
remaining provisions hereot', which shall ncvcnhelcss remain in force and be .:nforceable as
among the parties hereto and any such prohibition or unenlorceabi!ity shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
9.! 3 Tim<: is of the Es.<;ence. Compul.ation of Time. Time is of the essence with
respect to every covenant, condition to be satisfied, and action to be taken hereunder. and the
panics shall proceed accordingly with rcsp<.>ct to every action necessary, proper or advisable
to make eftective the transactions contemplated by this Agreement. Whenever the last day for
36
the. cxe:cise of any privilege or the of any duty hereunder shall fall upon any day
whtch ts not a busmess day. the party havmg such privilege or duty may exercise such
privilege or discharge such duty on the next succeeding business day.
9.14 Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of South Dakota. Any legal action or
proceeding with respect to this Agreement or any document related hereto shall be brought
only in the rilih Judicial Circuit Court in Aberdeen, Brown County. South Dakota, or the
United States District Court for the District of South Dakota, Northern Division, in
Br0\\11 County, South Dakota and. by execution and delivery of this Agreement, each party
hereto hereby accepts t'or itself and in respect of its property, and unconditionally,
the jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection. including. without limitation, any forum 11011 conveniens, which any of them may
now or hereafter have to the bringing of such action or proceeding in such respective
jurisdictions.
9.15 of Jurv Trial.
Borrower and Lender waive triul by jury in respect of any dispute and any action on
such dispute. This waiver is knowingly. willingly and voluntarily made by Borrower and
Lender. and Borrower and Lender herby represent that no representations of fuct or opinion
have be-en made by any person or entity to induce this waiver of trial by jury or to in any way
modi!)' or nullify its effect. This provision is a material inducement for the parties entering
into this Loan Documents. Borrower and Lender arc each hereby authorized to file a copy of
this section in any as conclusive evidence of this waiver of jury trial. Borrower
further represents and warrants that is has been represented in this signing ofthis Agreement
and in the making of this waiver by independent legal counsd, or has had the opportunity to
be represented by independent legal counsel selected of its own free will, and that it has had
the opportunity to discuss this waiver with counsel.
9.16 No Wammtv bv Lender.
By accepting nr approving a.nyfhing required to be observed. performed or fultil\cd by
Borrower or t:o be gi\'cn lo Lt:onder pursuant to this including any Survey.
receipt, appraisal or insurance policy, Lender shall not be deemed to have warranted or represented the
sul1icicncy. legality, cffectivene!)S or legal effect of the same. or of any term, provision or condilion
then.'Of and any such acceptance or approval thereof shall not be or any wamlnty or
representation with respect thereto by Lender.
9. J 7 Standard of Conduct of Lender.
Nothing contained in this Agrce!llent or any other Loon Document shall limit the right of
Lendi::r to exercise its business judgment or to act. in the context of the granting or withholding of any
advance or consent under this or any olhcr Loan Document. in a subjective manner.
"..,hclher or nol objectively reasonable under the cil\:umstanccs. so long as Lender's exercise of its
business judgment or action is made or undertaken in good faith. Borrower and Lender intend by the
foregoing to set forth and affirm their entire understanding with respect to the Slandard pursuant to
whi;h duties and obligations ore to be judged and the parameters within which Lender's
37
discretion may be exercised hereunder and under the other Loan Documents. As used .. good
faith"' means honesty in fact in the conduct and transaction concerned.
9.18 CREDIT AGREEMENT NOTICE. TO PROTECT BORROWER AND
LENDER FROM ANY MISUNDERSTANDING OR DISAPPOINTMENTS. ANY'
CONTRACT. PRO!vi!SE. UNDERTAKING .. OR OfFER TO FOREBEAR REPAYMENT
Of MONEY OR TO MAKE ANY OTHER FINANCIAL ACCOMMODATION IN
CONNECTION THIS LOA.N OF i\10NEY OR GRANT OR EXTENSION OF
CREDIT. OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR
SUBSTITUTION !'OR ANY OR ALL OF THE TE!L'v!S OR PROVISIONS OF ANY
INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF
MONEY OR GR.A.NT OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE
EFFECTIVE.
.'iignalllre on Following Page
3&
WffNESS WIIEREOF. parties hereto hnvc the-ir hands and the tia}'
and ) J:'J.r lirsl abo\'C wriltl!n.
NORTHERN BEEF PACKERS.
. tf

PY' ___ -
" hs: /I ):: . ...
7
, - ..... 4 /3 r' .!-LC,
' / J>'

SDif LIMITED PARTSERSIIII' 6
By;-;-:---,-,o--
lts: I.
39
,-
..
EXHIBIT A
REAL PROPERTY DESCRIP"nON
PARCEL I: NBP Lagoon Lot l in the Southwest Quarter of Section 7. Township 122
North. Range 63 West of the 5th P.M .. according to the plat thereof of record, Brown County.
South Dakota
PARCEL II: Blocks I. 2, 3, 4. 5. and Lots L 2, and 3, Block 6, H & S First Subdivision in
the North Half of Section 36. Township 123 North, Range 64 West of the 5th P.M., according
to the plat thereof of record, Bro"n County, South Dakota.
40
EXHIBIT B
NOTE
41
EXHIBffC
SUBORDINATED AND SHARED DEBT
Subordinated:
None
Shared Collateral Position:
None
Liens which are subordinated to Lender are currently:
MNDak Concrete, Inc.
o n c r c t ~ Contractors. Inc.
Industrial Builders, Inc.
McNeil Refrigeration. Inc.
Dakota Supply Group. Inc.
Red Wilk Construction, Inc.
llunlon Brothers
Pierce and Harris Engineering, Inc.
Artie Industries, Tnc.
Fargo Tank & Steel Co.
Pugleasa Company. Inc.
Jen$en Rock and Sand, Inc.
42
$ 500,826.60
S3,702.000.00
s 349,782.30
s 669,855.4()
s 54,049.04
$ 299,520.00
$ 29,887.15
$ 46,873.01
$ 21!,257.70
$ 132,982.83
$ 154,925.65
s 594,132.52
EXHIBITD
COLLA TER.".L ASSIGNMENT
( 1) all equipment, including, but not to livestock, machinery, furniture. furnishings.
accounts receivables. supplies. cash, inventory. and vehicles, now owned or hereafter
acquired. by Borrower. a South Dakota Limited Partnership. engaged in the operation or beef
plant and other related ancillary structures, together with all accessions. parts. attachments.
accessories. or appurtenances. or appertaining, attached. kept, used or intended for usc, and all
substitutions, improvements, replacements and additions; {2) all accounts and general
int:mgiblcs. now existing or subsequently arising; (3) all interests of Borrower. now existing
or subsequently arising. from the sale or rendition of services to its customers which give rise
10 any accounts or general intangibles now held or hereafter acquired; (4) all contract rights.
now existing or arising: (5) all chattel paper. documents or instruments rdating
to accoun\5: (6) all fixtures now or hereafter affixed. altached or located on the real property
described in the Mortgage of even date unless listed below as an exception; and (7) the
proceeds. products and accessions of and to any and all of the foregoing.
43
EXHIBITE
UNPAID TA.XES
Current
44
EXHIBIT F
OUTSTANDING UTlGATION
Foreclosure action on a Mechanic's Lien of Scott Olson Digging's claim of$2.1 00,000.
Foreclosure action by SD Contractors. Inc. v. NBP lor a claim of approximately S600,000.
45
EXHIBITG
Definitions
Unless me context otherwise specifies or requires, the following terms shall have the
meanings herein specified, such definitions to be applicable equally to the singular and the plurJI
forms of such terms and to all genders:
"'AAA'' means the American Arbitration Associatioft: or any successor thereof.
""Act" means the USA Patriot Act {Title HI of Pub. L. 107-56 signed into law October 26,
:!00 I)).
.. mean$. ''-'ith respect to any Person, another Person thnt directly, or indirectly
through one or more intcnnediaries. Controls or is Controlled by or is under I.!Ommon Control \Vith the
Person specified.
means an an:hitc.."C't reasonably approved by Lender. its successors and pennittcd
assigns. Lender hereby approves of Mallot Creek Group, Inc. as an Architect.
Contract'' means any contract for architectural services relating to the
development of the Land and/or the construction of the Improvements between Borrower and
Architect. and approved in writing by Lender in its reasonable discretion, as the same may be amended
tfom timt! to time with the prior written approval ofle.nder.
Authorized Signer" means any signer of this acting alone. or any other
representative of Borrower duly designated and authorized by any Authorized Signer to sign dra\\
requests in a \vriting. addressed to Lender. which writing may include a draw rcque::.t in the fonn
attached hc.'feto as Exhibit H.
"'Borrower's Deposit AccounC' mcan:i un account establishc:::d witl1 a tinancial institution of
Lt:nder's choice and under the dominion and control of Lender.
'Budget' means the breakdown of hard costs and soft costs attached hereto as Exhibit 1, as the
sam!! tnav bl! rcvi:;cd from time to tlme pursuant to the written recommendation of Architect, the
Projt:ct Manager and the Loan Monitor and with the written approval of Lender.
-ausinoss O.y" moans any day that is not a Saturday, Sunday or banking holiday in the State
or the office in the city in \vhich the Note is payable.
casuJlty .. means any act or occurrence of any kind or nature that results in damag.c. loss or
destruction to the Property.
-claim- means any liability, suit, ac-tion, claim, demand. loss, expense, penalty. fine.
cost of any kind or nature \VhaL')OeVer. including fees. costS and expenses of
consultants. contractors and expL'"rtS.
-Ciosina Date'' means the dale on which all of the conditions set forth on the Closing
Checklist have heen delivered or comp lctcd to the satisfaction of Lcndor.
46
Code .. means the lmemal Revenue Code or 1986, as amended .
.. Cl,l\aterar ml:ans, collectively any and all assets and rights and interests in or to Propeny of
the Borrower and each Guarantor, wh.,ther real or personal, tangible or intangible, on which any liens
are granted or purported to be granted pursuant to an) Security Document
Completion of Construction 1neans. with respect to the Constrtlction of the Improvements.
the satisfaction of all of the condhions set in the Credit Agreement..
con_demnation means any taking. of title to, use of. or any other interest in the Propeny
under the exercise of the power of condemnation or eminent domain. whether temporarily or
pennanclllly. by any Governmental Aulhority or by any other Person acting under or for the benefit of
a Go,ernmcntul Authority.
-s:..Qpdcmnation Awards .. means. any and all judgtnents, awards of damages (including
st:vcrancc and consequential damages). payments. proceeds. scnlcmcnts. amounts paid tOrn tnking in
lieu of Condemnation. or other compensation heretofore or ht:reaftcr made. including interest thereL)n.
and tht: right to recdve the same. as a resuh of. or in connection with. any Condemnation or threatened
Condemnation.
Loan Mt:mitor'" means a person or fim1 appointt!d or designated by Lender from time to time
to inspect the progress of the development of the Land, the construction of the Improvements and the
confonnity or con>1ruction with the Plans and Specifications. the Budget and the Project Schedule, and
tv pcrfom1 such other acts and duties for such other purposes as Lender may from time to time deem
appropriate or as may be required by the terms of this Agreement nn:: parties hereby agree tha{ such
Loan t-.lonitor shall be chosen by Lender. Any rcasonablt: fees or expenses pa.id to Loan Monitor
shall be reimbursd in full by Borrower.
Construction Contract'' means any contract for the development of the Land andlor the
construction of rhe hnprovements. between Borrower and the Contractor or any other contractor. and
approved in \vriting by Lender in its reasonable discretion, as the same may be amended from time to
time the prior written approval of Lender.
of rhc lmnrovements- means the development of the Lund and/or
completion oftl1e construction of the improvements.
Comror nH!:Ul$ the possession. directly or indirectly. of the power lo direct or cause tl1e
of tht! mal\agcment or polick"S of a Person. wht:ther through the ability to exercise voting
po,.,cr. by contmct or otherwise, -controlling. or "Controlled .... havt: meanings correlativ..: thereto.
"Dcfaulf" means an event or drcumstam.-e that. with the giving ol'>-loticc, if required pursuant
to the Loan Documents. or lapse or rime, or both. would constitute an Event of Default under the
provis_ions of this Agreement.
-Deposit Accounl Control Agrc-..!mcnt" means any Deposit At.:l!ount Control Agreement or
Account Conrro:.)l Agrccmem. if U$t!'d. among the applicable financial institution at which deposit or
securities accounts are mainlained. by Borrower as the case may be, any Guarantor, and Lender.
which agreement. iuter alia. cvidcnCl."S the Lcnder""s dominion and control over the applicable occounts
and acknowledges Lender's security interest therein.
47
Dispute'' means any controversy. claim or dispute between or among the parties to this
Agreement. including any such controversy. daim or dispute arising out of or relating to {a) this
Agreement. (b) any other Loan Document, (c) any related agreements or instruments, or (d) the
tmnsaction contemplated herein or therein (including any claim based on or arising from an alleged
personal injury or business tort). "
''Fnvironmemal Aerccmcnf' means the Envirorunenml Indemnification and Release
Agreement ol even date herewith by and between Borrower and Lender pertaining to the as
the same may from timt:" to time be e:lcnJcd. amended. restated or otherwise modified.
"ERISA" means the Empk1ycc Retirement Income Security Act of 1974. as amended.
"Event of Default" means any event or circumstance specified in Article VI and the
continuance of such event or circumstance beyond the applicable grace and/or cure periods therefor, if
any, set forth in Article VL
means all fees: charges. costs and e:-;:pcn.scs of any reasonable nature whatsoever
incurred at any time and lfnm ti.me to time (whether before or after an Event of Default) by Lender in
making. funding, adminis:tcring 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 Mortgage or
any of the other Loan inclLJding. attorneys fec:s, court costs. receiver"s fees. management
tCcs and costs incLJrred in the repair. maintenance and operation oC or taking possession ot: or selling,
the Property .
.. Force Majeure" means strikes.. l()Ckouts, \Var, civil disturbance. naluraJ disaster, acts of
terrorism or acts of God which cause a delay in Borrower's performance of an Obligation related to
the :work of construction; provided. howi!vcr. that (a) Borro\vcr must give Notice to Lender within ten
(10) days after the occurrence of an event which it believes to constitute Force Majeure, (b) in no
event shall Force Majeure extend the time for the performance of an Obligation by more than sixty
(60) days. and (c) circumstances that can be remedie-d or mitigated through the payment of money
shall not \:onstitute Ft1rce MajCure hereunder to the extent such remedy or mitigation is deemed
rl"!tlsonable by Lender in its sole
Funded .. means. as of any date of detem1ination, for the the sum of
(a) the outstanding principal amoum of all obligations. whether current or long-trm. for borrowed
money (including Obligations hereunder) and all obli!fations evidenced by bonds. notes,
loan aui-ecm!.!:nts vr other similar instruments, (b) all purchase money (c) aJl direc1
arising und!!r h:ttc-rs of credit (including standby .and commercial), bankers accept.anccs.
bank guara1lties. surety bonds or similar instruments. (d) all obligations in respect of the deferred
purchase price of or services {other thn.n trade accounLo; payable in the ordinary course of
busines<). (e) above of any partnership or joim venture (other than a joint venture that is itself a
corporation or liability company) in which the Borrower is a general partner or joint venturer.
un\c:;s such Indebtedness is !!xpressly made non-recourse to d1e Borrower.
"Project Manaccf" means a Project Manager acceptable lo Lender in its reasonable discretion
and its successors and penniued assigns. Any contract with the Project Manager shall be submitted to
Lender for Lender's approval.
"General Partner" means Northern Beef Packers Management LLC, a South Dakota limited
liability company.
48
oovemmcntal Authoritv means any governmental or quasi-governmental including
any departmcnL commission. bqard. bureau. agency. administration. district or other
instrumentality of any governmental entity.
"GAAP"' means gcn:.:rally accepted accounting principles in the United Slates set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute oi
Certitied l'ublic Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may b.: approved by a significant segment of the
accounting prof(.."Ssion in the United States, that are applicabk to the circumstances as of the date of
det.e.rmination. consislenrly applied.
1morovemcnts .... means all on-site. and improvements to the Land for a beef slaughter
and fabricath'n plant complex to be constructed on the Land including.. without limitation, a 237,000
square foot pmcessil)g building attached to a 51,000 square tool enclosed stockyard, a 48.41 & square
fool rendering and utiliry huilding. connected to the processing building through an underground
pass
3
gc. nnd a ro&dway emering rhc:: from St. on the nonhwest sidl!' of the
site that run::> south behind the processing plant and east to the stockyard. together with all fixtures.
e!quipment and appuncnances now or later \ocated on the Land and/or. in such improvements .
.. Insurance means the insurance claims under and the proceeds of any and all
policies of insurance covering the Property or any part thereof. including all retumcd and unearned
premiums with r'---spect to any insurance rdating to such Property. in each case whether now or
existing or arising.
"Intere-st Cowraoe Ratio means. as of any date ofdctennination. the ratio of(a) EBITDA for
the prior fiscal quartor to (b) lntcrc.>t Charges for such fiscal quarter .
.. Land"' mean.s the land d\!:scribcd in and encumbered by the Mortgage.
"Law .. or means all federal, state and local laws. rules. ordinances.
re1!ulations. codt:::s. licenses. decisions. injunctions, orders or decrees or

court or other Govcrnmcnta.'t Authority having jurisdiction as may be in effect li-om time to time.
"Lome means. the loans from Lender tO Borrower .. the repayment obligations in connection
with which are evidenced by the Note.
"Loan Amount" moans up tu Sixty Million and No/100 Dollars ($60,000,000) .
.. Loan means this Agreement,. the the Mortgage. the Environmental
/\gree:ment. the Security Documents. any and all other documents which Borrower. GUarantor or any
Llthcr parry or parties have executed and or may her caller execute and deliver., to
secure or guarantl!t! tht: Obligations. or any part thereof, a.c:o the same may from time to time be
t::\tended. amended. rcsum.tL supplemented or otherwise modified.
"Lnss Threshold'' means Net l'roceeds, the aggregate amount ofwhicl> is less than $250,000.
-Matl!riul Co11tracL" ... means those contracts and agreements described in this Agreement .
.. Mnturitv Date .. has tht! meaning set forth in the Note.
49
Mort!la!le .. means the Mongage, Assignment of Leases and Rents. Security Agreement. and
Fixture Filing of even date herewith given by Borrower to Lender to secure the Obligations. as the
same may from timt:: tn time be extended. mnendt:d, restated. supplemented or otherwise modified .
.. Net Proceeds.." us:cd "vith respect to nny Condemnation Awards or Insurance Proct::t!ds.
means the gross proceeds from any Condemnation or Casualty remaining after payml!nt of all
including attomeys' fees. incurred in the collection of such gross proceeds.
"Note means the Note of even dare herewith .. in an amount equal to the. Loan Amount, made
by Borrower to the order of Lender. as the same may from time to time be: amended.
restated. or othenvis:! modified.
Notice" meuns a notice. request, eonsenl. demand or oth_er communication given in
accordance with the provisions of Section 9..3 of this Agreement.
.. Ql>ligutions .. means all present and future debts, obligations and liabilities of !lorrowc-r to
Lender arising pursuant to. or on account of. the provisions of this Agreement, the Note or any of Lhc
other Loan including the obligations: (a) to pay all principal. interest, late
prepayment premiums (if any) and other amounts due at any time under the Note; (b) to pay all
Expenses. indemnification payments. fees and other amounts due al any time under the Mortgage or
:my or the other Loan Dt1CU01l!'llts. together \Vith interest thCfCl)Il as provided in the Mortgage or such
Loan Document. and (c) h) perfonn. observt! and L'"Omply v.ith all of the tcm1s, covenant.<> and
conditions . .:xprcss.cd or implied. which Borrower is n .. >quired to perform. observe or comply with
pursuant to the tenns of the Mortgage or any or the other Loan Documents .
.. Onw.nizationaJ Ot.Jcumentli . {a) with respect to any corporation .. the certificate or
articles of incorporation and the bylmvs tor equivalent or comparable constitutive documents with
rcspc..:t to 311)' jurisdiction): (b) with respect to any limited liability company. the certificate or articles
l)f funnatinn or organizalion and operating. agreement: and (c) with re5pcct to any partnership, joint
venture. trust or other fonn of business contity. the partnership. joint venture or other applicnblc
agreement of fomlation or org.;.mization: in each case. any agreement. filing or notice
with re!>pt:cl thereto tiled in connection with its !Ormation or organization vdth the applicable
Govemmental Authority in the jttri!)diction ol' Its fonnnlion or organization and. if applicable. any
certificate or articles of fomlntion or organization of such entity.
means an individual, n corporation. a panncrship, a joint venture, a limited liability
company. a trust. nn unincorporated any Governmental Authority or any other ctitity.
Plans and means any 1\nd a11 plans and specifications prepared in connection
with lh\!: development of the Land and/or the construction Of the improvements and approved in
writing by as the: same may from timl! to time be aniendcd with the prior written approval of
Lender not to be unreasonably withheld or delayed.
project Schcduh:-: .. the estimated schedule tbr commencement and completion of the
development of cl1e land and construction of tl1c Improvement attaobed hereto as E.xhibiL1, as the
same may be revised from time to time with the written approval of Lender.
"Prooertv" means the real and personal property conveyed and encumbered by the Mongage
and the other Security Documents.
50
Restricted Payment .. means. in relation to Borrower, and (a) declaration or payment of any
dividend on or in respect of any equity interesr, the purchase, redemption, defeasance, retirement or
other acquisition of any equity interest of Borrower, directly or indirectly, the return of capital by
Borrower to any equity holder. or any other distribution on or in respect of any equity interest of
Borrower or (b) payment or prepoymcnt by Borrowerto the Borrower's shareholders (or other equity
holders) or any Affiliate of Borrower l)T any Guarantor.
SDIF Limited Partnc:Ghip 6'" means. Lender.
sccurifl. means. all Security Instruments execurcd and delivered to Lender on
November 4. :;o I 0 or from time to time thereafter by Borrower or Guarantor pursuant to any of the
Loan
Instrument"' means any security agreement.. assignment, pledge agreement,
financing or other sim.ilar statement or notice. continuation statement, other agreement or Instrument,
or any amendmem or supplement to any thereof. govcming or providing for, evidencing or
perfecting any security interest or lien.
"Senior Manaaement Personnel" shall be delined as the CEO. CFO. Plant Manager, or any
other employee of the Company who earns in excess of One Hundred Thousand Dollars ($100.000)
per year in either salary or bonus.
"Shareholders Eguitv" means as of any date of dcterrn ination, Shareholders equity of the
Borrower as of that date determined in accordance with GAAP.
"State" means d1e State of South Dakota.
-survcv'" rTicans a map or plat of suf\ey of the Land \vhich confom1.s with Lender's survey
requirements scr forth in the Closing Checklist and \vith the '"Minimum Detail Requirements
lor AL TAIACSM Land Title Surveys' jointly established and adopted by ALTA and NSPS in 2005,
and pur>uant to the Accuracy Standards as adopted by ALTA and NSPS and in effect on the date when
the Survey is certitied to Lender in the f(>rm specified in the Closing Checklist.
Tangj_hlc Ncr means as of any date detennination .. equity of the
Borro\ver on that date minus the int:::mg.iblc assets of BorrO\ver on thai date.
''Taxes- means all ta:..:c:s. levies. imporu. duties. deductions. withholdings. fees
or ether charges .. whether or special. ordinary or extraordinary. or forcsccfl or unfoNseen.
which at Rll.Y time may be! levied. con tinned or imposed by any Govcmmcntal Authority or
any communities t3cilities or otht:r private district on Borrower or on any of its propenies or assets or
any part thereof or in rl!spect of any of its franchisL."S, businesses. income or profits. including any
interest. additions to or penalties applicable thereto.
"20 10 OtTcrino Memorandum" means the January I 0, 20 I 0 South Dakota Rcgionol Center
EB-5 Immigrant Investor Program Conlidential Offering Memorandum with respect to Borrower.
51
Prepared By:
Jeffrey T. Sveen
Siegel Barnen & Scllutz. LL.P.
415 S. Main St .. 40G Cupitol Bldg.
P.O. Box ..190
Aberdeen. SD 51402w0490
605-225-5420
RE-RECORDED TO CORRECT LEGAL
DESCRIPTION
INSTRUMENT NO. 201029445
BOOK; 546 MORTGAGE
PAGE; 290
03;16,08 PM
CRROL REGISTER OF DEEDS
COUNTY. SOUTH ORKOTR
Recording Fee: S 36.00
Relurn SIEGEL BRRNETT AND SCHUTZ
MORTGAGE-ONE HU:'\DRED EIGHTY DAY REDEMPTlON
MORTGAGE made and entered into this 4th day of November, 2010. by Northern
Beef Puckers. L.P .. a South Dakota Limited Partnenhip under the laws of the State
of South Dakota. of 38749 I 35th Street. Aberdeen, South Dakota 5740 I, (the ''Borrower''), as
:Vlortgagor. in favor of SDlF Limited Partnership 6. of 416 Production Street North, Aberdeen.
South Ddota 5740 I, (the 'Lender''). as Mortgagee.
WITNESSETH:
THE PARTIES AGREE THAT THE PROVIS!Ot'S OF THE ONE HUNDRED
EIGHTY DAY REDE!\fPTION MORTGAGE ACl' GOVER.N THIS MORTGAGE.
THERE IS HEREBY GRANTED TO MORTGAGEE A POWER OF SALE FOR
PURPOSES OF SDCL CH. 21-49.
l. That in considcn.nion of the Lo.:tn by Lender to Borrower of the principal sum ns
suJ.ted ht:.rein. Borrov . .:er. as Mortgagor, does hereby mortgagcl grant, bargain. release, assign.
u-msfcr and convey to the Board, as tv1ortgagt.!e, the real property and premises described in
Exhibit .:\ :J.ttached hereto. and by this rcfer\!nce incorporated herein, together with atl
buildings and impruv:::ml!nts no .. ...- or hcreufter erected thereon, all hereditaments and
:.1ppurtena.nces. and a11 righL.;; and interests thereunto belonging or appenaining. including
rights of homcs\en.d. and all contingent rights and estates of Borrower in and to said premises,
:.md all wntter rights {collectively the and all contingent rights and estates of
Borrower in and to the Premises. it being thi! intention of Borrmvcr to mortgage an absolute
titk in fee in and to saiU Premisl!s in favor of Lt::ndcr. to include all of the right, title and
interest of Borrower in said propcny nov.: mvncd or hereafter acquired. all easements and
scrvit.:nt estates appurtenant thereto. rents. issues, uses. profits and right to possession. and all
lixrurc:s and crops raised or thereon.
2. Borro\vcr warr.:mts that Borrower is the owner in fee and is lawfully seized of said
?remises: that the Premises are free and clear from all encumbrances and liens whatsoever,
except for such liens as subordinilted debt which has been disclosed to Lender in
writing as described in Exhibit C auached to the Credit Agreement. Borrower hereby
covenants to warrant and defend the title to said Premises against any and all claims and
derm.:.. .. r'Jds of ;dl persons whomsoever.
3. Pm\'id(.;d, that if Borrower sh::il1 well and tmly pay. or cause to be paid \Yhen
due. the principal. interest and.any expenSt.-s set fonh on the Promis..o.;ory Note .. at the timt:s in
the munntr 8;t forth in the Promissory Note. and shall '""ell .. ::md truly kc..""Cp, pcribm1 nnd observe
all covenants. terms ami conditions pursuant to the terms nf this !v1ortgage. the Loan Agreement.
Promissory Note, and any other Loan Documents on Borrower's pa.."1 to be kept. pcrfom1cd
anc.l obser.'cd. and shall pay to Borrowt::r all sums of muncy due or to become due pursuant to the
Lem1s ht::reof. then this and the rights hereby granted shuii tenninatc and be
void; otherwise this Mortgage sball be and remain in full force and effecL
4. This J\1ortgagc is given by Borrower as security for the follo\ving:
a. Payment by Borrower to Lender of the principal sum of up to Sixty Million
Dollars ($60.000.000), together "vith interest ther:!on. m::curding to the terms of
::1 certain Promissory Note dateJ the date due and payable on or bcfon:
the 4th day of 2015. '-lnd given by Borrower to Lender, and any
otht:!r Loan Documents or other instruments executed in retinancing, extending
or renc\ving said inJcbtc:dness or a..r1y p::u-t thereof. all po.yable according to
terms of said Promissory Note .. Credit Agreement and other Loan
the parties agree that the sum l"tnally advanced of up to S60.000.000, shall be
Lhe amount of the final mongn.ge.
b. Repayment in full by Borro'\ver of all amounts advanced by Lender, at its
option. to or on behalf of Borro,vcr as prott!ctive disbursements. as authorized
in this Mortgu.gc or in th:: or any other Loan all
pav.nblc :b in this lb.e Promissory Note, or other Loan
o.r other instrument whi;h be takt:n to e;idence such advance(s)
or any pan thereof;
5. This 1\-iortgagt: is made to a certain CREDIT AGREEZv1ENT Jated the 4th
dav of Novcmbt:r. :!010, bctw<..'"t!n Borrowl!r and Lender and is subject to all
ob.ligations and pn:.1visions of such Credit Agreement as if they were fully set forth herein and
made a pm ht.:rt:of.
6. Borrower covenants and agrees as follows:
a. Borrower agrees to pay the indt:btt:!dness herein and as in the Credit
A1!.rt!cment nnd Promissory Note describt.:d. Borrower shall havt: the option to
pr;pny all or uny pun uf the Promissory Note only as set J(xth in and pursuant to
the Crt!dil Ag.rt:.:mcnt. lf prepayments U.."i! made, principal payments: shall
reduced in inverse order of maturity. Such prepa)mcnts shnll not in uny \vay
uller or suspend any obligations of Borrower under the tenns of tbe Loan
2
Documents. except to the extent that such payments result in a credit against
payments on the: Promissory Note.
b. Borrower will keep and maintain with respect to the Premises. at all times
during the term hereof and of the Credit Agreement, and while any of the
Promissory Not(! is outsttm.dir1g. property and easualty insurance. and liability
insurance us set forth in the Credit Agreement
c. Borrower ._..,ill keep the Premist=-s in good condition and as the same
may nov.. or may hereafter. be placed. ordinary wear and tear excepted; and to
pennit no mechanic's or other lien or t!ncumblmct: thereon; or to commit or
permit no impairment of the value of this security.
d. Borrowc:r "'"ill not transfer. remove, substantially alter. or demolish any
buildings. improvt:ments or fixtures on lht! Pn::mises without the consent of
L.cmicr. except for that property ... vhich in the good faith opinion of Borrower is
ouunoded. worn out. is being r(;!pluccd .. or othcr.visc is not needed for
the operation. Borrower shall not conm1it or suffer waste on the premises, and in
event of such w3.Stc U::ndcr, in addition 10 any other available remedy, shall be
entitled immediately to restrain the same by injtmction or other appropriate
proceeding. Borrower v.:anants that the Premises wilt not be used for any
unluwful purpose or permitted to become a nuisance.
e. Borrower will pay all tax.es .. a.s:sessmentst rents. or governmental or municipal
charges, tines .. rutes, fCes or charges imposed. or charged against the
Pr.::mises, before the delinquent date thereof; and in default of any such payment
on the part of Burro\vcr. Lender may pay the ::;amt!, al its sole option. and all such
shall be added to th!.! obligc.uion secured by this tvlortgJgc and shall
hear intcrcst ::n t..ht: same a:; the principill Sum seCured hereby until repaid by
Borrower.
f. BorrO\'Y'Cr a.">Signs to Lender ull rents, issues. uses, protits. royalties. or
lease payments due to Borrower from us!! or occupallcy of any part of the
Premises secur:...J. by this 'tv1ortgage ns further security tOr pa.yment of the
obligation aH rents. profits. lease payments. or royalties
rt::cdvcd by Lender hereunder shcll be applied to t.i-)c indebtedness secured by
this Borrower grants to Lender the right to enter upon the premises
for 1hc purpose of coUectlng the and to operate or let the Premises., or any
part thereof. and to apply the monies received therefrom. after pa;-mcnt of all
neces.o;ary charges :md expenses. to the obligations secured by this Mongage,
upon default of any of the covenants, conditions or 3greem:.::nls contained herein.
Bom.:n.-ver further promises and agrees. in the e\ent of any such d.:1.ult, to pay to
or to nny receiver appointed by a court to collect the rents, issues. and
profits of the !'remises, a fair and reasonable occupational rent for the use and
occupation of the same or of such pan thereof as may be in the possession of
Borrower; and on default in the payment of such rental, to vucare and surrender
possession of the Premises.
g. Borro\ver wiU pay all expenses !.hat Lender incurs in any such uction or
proceeding to prosecute or de!;:md the righ!S and lien created bv this Mortcrage
including re.2Sonable auomcy's fees. in Lhe event any action
commenced.. except an action to i(m:.-close this !vtortgage or collt:::ct the obligation
secured hereby, in which it b<::!comcs ne!ccssn.ry lo defc:nd or assert the Hen of this
or not Lender is made or becomes a party to such action or
proceeding, and if not so promptly pilld on request, such expenses shall be added
to the debt hereby and become a lien on the Premises, and shall be
det!mc-d to be fully Sl"Ctlrcd by this ?\1ortgagc and shall bt! dt."t!:mt:d prior and
parnmount to any right. title. interest or claim to or on the premises accnling or
att..:.lchlng subsequent to tht! lien of this tv1ongagc. and shall bear interest at the
mtc provided lOr the obligation secured hereby. which action or proceeding shall
be governed by the provisions of lav.' and rules of court respecting the of
cosL. disbursements, and allov.,:ance in foreclosure actions.
h. represents that it has not executed or su!Tcre..I, und \\cill
not do, execute or suffer. any act or thing whereby its title in and to the
Premises. or a..'ly pan tbert!of, shu!! Dr may be impaired. or t!ncwnbcred
in any \vay. as set tOrth herein. or othcn\-ise expressly agrc.:d in \VI'i.ting.
and that it v,;iJI execute. :.:.ckno,vle-dge a.'ld deliver such mortgages or instrumems
supph!-mcntal hereto and do such funhcr acts., instruments and transfers us Lender
may reiJ.:5onably tbr better assuring, transferring, mortgaging, pkdging.
a-.:;.signing a'ld confinning to Lender all ::md singular the property herein
described.
i. Borrower agrees that if all or any portion of the 2.bove described Premises
shall be taken or d3magcd by condemnation proceedings under the power of
eminent domain. all compensation awarded will be paid din:ctly to Lender.
S::!id compl!nsation shull be::: applieJ to tht: indt.:"btcdness hereby secured.
i. In the event Borrower fails to pay \Vhen due any taxes. rental chargcg upon
any lc:.1scs assigned as additional sct:urity for this rvtortgagc. judgments,
or assessments la\.\i.ully assessed against the Premises hereby mortgaged, or
governmental or municipal churge.s .. fines, rates. ft:es or charges lt::vic:d.
or charg!!d against the: Pn:mises before the same become dclinqul!nt. or fuils to
maintain insurance as hereinabove Lender may do so. ut its sole
option. !llld without lhc obligation to do so, as a protective disburst::ment and
the amount so pilld shall, from the date of payment be added to and deemed a
part of the indebtedness secured hereby, nnd shall be due and payable on
demand by Lender. provided, however, that the advancement by Lender of any
sum pursuant to this pan!grJ.ph shall in no manner relieve Borrower or any
obligations incurred under this Mortgage nor limit the right of Lender to
4
declare a default by Borrower and to all rights and remedies as set
forth herein in the event of default.
k. To tbe extent pcrn1itted by lav.;, Borrowci agrees that in case of any action,
or in any proc;:!':!dings in any court. to collect any sums payable under or
secured by this lvlortgag.e, or to protect the lien or title herein of Lender, or in
any other case permitted by law. including fOreclosure by action or by
advertisement. in which attofi"l:ey iCes. may bt: collected from Borrower or
charged upon the above described property. to pay Lenders reasonable attorney
fees and actual disbursemenLq necessarily incurred in the course of said action.
l. In the event the mortgaged Premises or any ponion thereof are sold,
divested, transferred, relinquished. or in the event Borrower should lose their
riuht, title or interest in the sccuritv herein described. or any portion thereof
the term of this voluntarily or by operation of
without the prior \\Titten consent of Lender. the t:ntire indebtedness remaining
unpuid and o"ing. including advances for any purpose, may at the option of
Lender. be declared immediately due and payable, and this tvlortgage may then
be b-y action or by advcrtisemenL as provided by statute or the rules
or po\.vt:rs relating thereto.
m. {n th.;: case of of this l'v1ortgage. at any time after the
commcnccmr.:nt of an action of foreclosure: or m any time after the
commencement of foreclosure by advt!rtiscmc:nt, or during any period of
Lendt:r is authorized to appoint a to take possession of the
Premises if the Premises have: been abandoned. or to have a re.ccivcr appointed
by the t.:oun upon otl1er sufiicient proof being established therefor. said
rcceivt:r to take immediate possession of the above described property. and of
cl.l the;: rents or protits accruing therefrom, and to rent or cultivate the same as
thl! ret:eivcr may deem best for the interest of all parties concemt.:t..l. and be
liable to uccuunt to Borro\ver only for the: net profits. after application of rents.
issues und prntits upon tho.: expenses and costs nf the und
foreclosure and upon the indebtedness, costs and expenses hereby secured or
herein mendoned.
n. Funher. in th:: t:vcm of any ac[ion by Lt:mler to en the collection of the
mortgage debt. Borrower .:tgrees thal any expense incurred to procure or c:xtend
an ahstract of titk. policy of title insurnncc or other lien search. shalL \.Vhcn
paid by Borrower, become a pan of the! dt!bt secured hereby. and shall be paid
by Borrow-l!r togt:ther with aU taxable costs of such action.
u. Any mon;;ys collected by Lender pursuant to foreclosure under this 1vlortgagc
shnll bt: appli(:d first to pay expenses of collection, including auorney's fees.
and other expenses owed by Borrower pursuant to section 9.4 of the Loan
Agreement; second to pay any interest due on the Loan; third to pay any
5
principal due on the Loan: fourth to pay any other amounts due under the Loan
and fifth to pay remaining princ-ipal on the and other
amounts dw: hereunder. as they become due, such payments to made in the
same order us set forth in this section.
7. In t.ht! case of dt!fault by Do!TDwcr in the payrnc-m of principal sum
7
or anv part
thereof. m the time or times as specified for the payments hereof, or in the case of dcfhult in
the p::1ymc:nt of any of said advanct:::;., or in Ihr.: case of any breach of any covenant or
agrecmem cont.:.liued in this !v1ongage. the Loan Documents. or the Promissory Note, or
related nwrtgages, documents and notes. or in lht! event of the failure of Borrower to promptly
when due, any t:::...xcs, charges. liens. ao:;ses.sments, or encumbrances, or in the event of the
insolvency oi Leoder may at its option declare this !V1ortgage to be in default and
shall provide Borrower with "Titwn notice of such default. lf such default has not been cured
within the <1pplicable time periods set liJrth in Section 5.\.IJ of the Credit Agreement,
Borro,vcr. its sole option. may accdcratc tht: payment of tht! outstanding debt mav
Jc.:cla.n: the c.:mire unpaid principal immediately due and payable. and if not paid this
mny be fon::cJosc::d by action. or by advertisement a::; provid:::U by statute or the rules or powers
relating thereto, including any amt:ndmt:nts tht:rcof. and this par...1g.raph sh:tll be deemed us
nuthorizing and constituting a power of sale as mentioned in said statutes or rules or auy
amendments thereof. In ;.!ddition, Lender may e:-;cn:isc any rcmc:dy set fonh in any of the
Loan Documents or other agreements bet\'ve:en the parties made in connection with this
lv1 ortgage.
8. In the event of any default Lender shall have thr: privilege, without declaring the
whole indebtcdnt:ss due and to foreclosure on nccount of such specific default for
such sums as are in default and such proce.:dings may be had and the Premises
described herein may be soht s:ubjc:.;t io the unpaid indebte:dness hereby secured, and tlll5
:-vlortgagc shall c1.mtinue as a lien for any unpaid balance. If Lender tlu: right to
or any other right ht:rcundcr. such a waiver shall not constitute a waiver of the right to
n:scind. or any other rem.edy available to Lender, nor shall it be con..o;;trued a'i a waiver of such
rit;hts in the event of subsequr:nt defaults.
9. No remedy herein con!i:rn:d upon or reserved to Lender i.s intt:ndcd to be of
anv other available remedy, but each and every remedy shaH bt! cumulative and in addition to
otht:r remedy gi veo w1der this .\iortgagc the Credit or now or hereafter
at h!v. or in t::q,uity or by stutulc. "l'o delay or ornission to exercise any right or power
upon any dcfitult shall impair any such right or power or shall be construed as a waiver
but any such right ll.tid fX)\Ver may be exercised from time to time and as often as may be
dc:emed expedient. fn the event that any breach by Borrower is specificaJly waived in writing by
Lender. such waiver shall be limited lo the particular breach so waived and shall nol be deemed
to \Vaivc any other or subst."qucnt breach.
I 0. Borrowc:r \Vill comply \\ith nll statutes. ordinances. and g.ovemmcntaJ regulation
oJTecting the Premises, and if Borrower nr:glt!cls or rcfus;;s to so comply. und such failure or
refusal hus not been corrected "vi thin 30 duys of receipt of written the entire balance of
6
principal sum secured hereby will, at Lender's sole option, immediately become due and
payable.
11. Titi.5 h1ortgage shall be governed by and construed in accordance with the laws of
the State af South Dakota. Tenns used herein and defined in the Loan Agreements shall have
the same meaning as set forth in the Credit Agreement unless the conte:<t clearly requires
othenvise.
12.. This Mongage may not be modified or amended except by mutual consent
exoressed in vniting, whicb writing shall be ex.pressly identified ns a part hereof, and which
writing shall be signed by an authorized representative of each of the parties hereto.
13. .A..ny ootice provided fo:- herein shall b:! deemed given. when transmlned as
provided in Section 6.2 of the Credit Agreement.
14. The coven211ts in this .tv1ortgage sball be deemed to be severable. In Lhe event that
any portion of L'Us Mortgage is determined to be void or tL.,enforceable. that determinntion
shall not affect the va.lidir-; of the remaining portions of the h1ortgage.
!5. Tills instrumem is intended to be and shall be deemed a fixture filing within the
meaning ofSDCL 57A-9-502(c).
!6. The covenants herein contained extend to and bind the agents, employees, assigns,
legal representatives and successors in interest of the pa.ties hereto.
IN \v1T01ESS WHEREOF, this instrument has been executed the day and year first
above written.
{SEAl.)
.-<TrEST
) ____ ......
NORTHERN .BEEF PACKfRS l.IMlTED PARTNERSHIP
(Name of Borrower)
By - '---=::,. ... """Zr C} .$'
Its:.Jlirector and Sole B-eef
Packers Management, its General
Partner
- _.:-' .
By: ___

7
CORP OR;\ TE ACKNOWLEDGMENT
STATE OF SOUTH DAKOTA )
)ss.
COUNTY OF BROI'N )
On this, the__.:'...... day of 2010, before me, the undersigned officer,
personally appeared Q .... : K $ , \".rho nck:now!edged himself to be the
of . .-;' .... .,,:"' /?....i- ... L .,;..;.;, a lL.uited and that he
1
as such . .: , [?1 , . .., , h , be:L'1.g e.uthoriz.ed so to do, executed the foregoing
instrument by himself as ) vft .i;.J ,_.. e CTu'*"
N WITNESS \VHEREOF, I set my hlllld-and<J,fiicial seal.
/ \l C I .
: p
... _u ..
(Notarial Seal)
... ) /

, ' .. .-"(.,..-, I -r
Notary Public, South Dakota
j. (., ..
...,... .-;;{e./ .c.. ;;:; 1 r .c. '-' r ).....,.(...,.-7...:...... .........
-;> ... -
My Commission
/?"-< f
8
EXI-JIB1T A
REAL PROPERTY DESCRIPTION
PARCEL 1: NBP Lagoon Lot l L'1 the Southwest Quarter (S\VVi) of Section Seven (7),
TO\'"rnship One Hundred Twenty-t:t<..> (122) North, Range Si>:t)t.b...ree (63) \Vest of the 5th
P.M .. according to the plat thereof oi record, Brown County. South Dakota.
PARCEL II: Blocks 1, 2. 3, 4, 5, and Lots 1, 2, and 3, Block 6. H & 5 First Subdi,isk>n in the
North Hali (N,-;) of Section Thirty-five (35), Township One Hundred Twenty-three (123)
North, ~ n g e Sixty-four (64) West of the 5th P.M., according to the plat thereof of record.
Brown County. South Dakota.
9
EXHIBIT >.
PARCEL 1: NB.P Lagoon Lot I in the Southwest QmmcrofSection 7. Township 122 North.
Range 63 \Vest of the 5th P.!\1., according to the plm thereof of record, Br0\\11 County, South
Dakota.
PARCELl!: Blocks I. 2, 3 . .\. 5. and Lots 1, 2, and 3, Block 6, H & S First Subdii>ion in the
North Half <'f Section 36. T own5hip 12J >-lorth. Range 64 \Vest of the 5th P JvL, at:cording to the
plat thereof of record, Brov.11 Coutity, South Dakota.
INSTRUMENT NO. 201031149
BOOK' 646
PRGE' 572
2010/12/10 04,45,54 PM
SHERMAN, REGISTER OF DEEDS
BROWil COUNTY. SOUTH DAKOTA
Reeordlng Fee! $ 38.00
10
J
Return To: SIEGEL BARNETT AND SCHUTZ
9
Prepared By:
Jef!Tey T. Sveen
Siegel, Bamen & Schutz. L.I . P.
415 S. Main St., 400 Capitol Bldg.
P.O. Box490
Aberdeen. SD 57402-0490
605-225-5420
INSTRUMENT NO.
BOOK: 656 MORTGAGE
PAGI': 3il8
2012/07/05 01:45:16 PM
CAROL SHERMAN, REGISTER OF DEEDS
BROWN COUNTY, SOUTH DAKOTA
Recording Fee: $ 30.00
Return To: SIEGEL BARNI'TT AND SCHUTZ
MORTGAGE- ONE HUNDRED EIGHTY DAY REDEMPTION.
MORTGAGE made and entered into this 3'd day of July, 2012, by Northern Beef
L.P . a South Dakota Limited Partnership organized under the laws of the State of
South Dakota, of 38749 !35th Street. Aberdeen, South Dakota 57401, (the ''Borrowern}, as
Mortgagor, in favor of SDIF Limited Partnership 9, of 416 Production Street North, Aberdeen,
South Dakota 57401, (the ''Lender"), as Mortgagee.
WlTNESSETH:
THE PARTIES AGREE THAT THE PROVISIONS OF THE ONE HUNDRED
EIGHTY DAY REDEMPTION MORTGAGE ACT GOVERN THIS MORTGAGE.
THERE IS HEREBY GRANTED TO MORTGAGEE A POWER OF SALE FOR
PURPOSES OF SDCL CH. 21-49.
I. That in consideration of the Loan by Lender to Borrower of the principal sum as
stated herein. Borrower. as Mortgagor, does hereby mortgage, grant, bargain, release, assign,
transfer and convey to the Board, as Mortgagee. the real property and premises described in
Exhibit A anached hereto, and by this reference incorporated herein, together with all
buildings and improvements now or hereafter erected thereon, all hereditaments and
and all rights and interests thereunto belonging or appertaining. including
rights of homestead, and all comingem rights and estates of Borrower in and to said premises,
and all water rights (collectively tl1e "Premises"); and all contingent rights and estates of
Borrower and to the Promises. it being the intention of Borrower to mortgage an absolute
title in fee in and to said Premises. in favor of Lender, to include all of the right, title and
imerest of Borrower in said pro perry now owned or hereafter acquired, all easements and
servient estates appurtenant thereto, rents, issues, uses, profits and right to possession, and all
fixtures and crops raised or placed thereon.
2. Borrower warrants that Borrower is the owner in fee and is lawfully seized of said
Premises; that the Premises are free and clear from all encumbrances and liens whatsoever,
except for such liens as secure subordinated debt which has been disclosed to Lender in
writing as described in Exhibit C attached to the Credit Agreement. Borrower hereby
<< i /'
1
covenants to warrant and defend the title to said Premises against any and all claims and
demands of all persons whomsoever.
3. Provided, however, that ifBorrower shall weJJ and truly pay, or cause to be paid when
due, the principal, interest and any eKpenses set forth on the Promissory Note, at the times and in
the manner set forth in the Promissory Note. and shall weJJ and truly keep, perform and observe
all covenants. terms and conditions pursuant to the terms of this Mortgage, the Loan Agreement,
the Promissory Note, and any other Loan Documents on Borrower's part to be kept, performed
and observed, and shall pay to Borrower all sums of money due or to become due pursuant to the
terms hereof, then this Mortgage and the rights hereby granted shall cease, terminate and be
void; otherwise this Mortgage shall be and remain in full force and effecL
4. This Mortgage is given by Borrower as security for the following:
a. Payment by Borrower to Lender of the principal sum of up to Twenty-Five
'Million Dollars ($25,000,000), together with interest thereon, according to the
terms of. a certain Promissory Note dated the date hereof, due and payable 5
years from the date of initial funding, and given by Borrower to Lender, and
any other Loan Documents or other instruments executed in refinancing,
extending or renewing said indebtedness or any part thereof, all payable
according to the terms of said Promissory Note, Credit Agreement and other
Loan Documents: the parties agree that the sum finally advanced of up to
$25,000.000. shall be the amount of the final mortgage.
b. Repayment in full by Borrower of all amounts advanced by Lender, at its
option, to or on behalf of Borrower as protective disbursements. as authorized
in this Mortgage or in the Credit Agreement, or any other Loan Document, all
payable as provided in this Mortgage, the Promissory Note, or other Loan
Document or other instrument which may be taken to evidence such advance(s)
or any part thereof;
5. This Mortgage is made pursuant to a certain CREDIT AGREEMENT dated the 3rd
day of July, 2012, between Borrower and Lender and is subject to all covenants, obligations and
provisions of such Credit Agreement as if they were fully set forth herein and made a part
hereof.
6. Borrower covenants and agrees as follows:
a. Borrower agrees to pay the indebtedness herein and as in the Credit
Agreement and Promissory Note described. Borrower shall have the option to
prepay all or any part of the Promissory Note only as set forth in and pursuant to
the Credit Agreement. If prepayments arc made. principal payments shall be
reduced in inverse order of maturity. Such prepayments shall not in any way
alter or suspend any obligations of Borrower under the terms of the Loan
2
Documents. except to the extent that such payments result in a credit against
payments on the Promissory Note.
b. Borrower will keep and maintain with respect to the Premises, at all times
during the term hereof and of the Credit Agreement, and while any of the
Promissory Note is outstanding, property and casualty insurance, and liability
insurance as set forth in the Credit Agreement.
c. Borrower will keep the Premises in good condition and repair, as the same
may now, or may hereafter, be placed, ordinary wear and tear excepted; and to
pennit no mechanic's or other lien or encumbrance thereon; or to commit or
permit no impainncnt of the value of this security.
d. Borrower will not transfer, remove, substantially alter, or demolish any
buildings, improvements or fixtures on the Premises without the consent of
Lender, except for that property which in the good faith opinion of Borrower is
obsolete, outmoded. worn out. is being replaced, or otherwise is not needed for
the operation. Borrower shall not commit or suffer waste on the premises, and in
event of such waste Lender. in addition to any other available remedy, shall be
entitled immediately to restrain the same by injunction or other appropriate
proceeding. Borrower warrants that the Premises will not be used for any
unlawful purpose or permitted to become a nuisance.
e. Borrower will pay all taxes, assessments, rents, or governmental or municipal
charges. fines. r a t ~ s fees or charges levied, imposed, or charged against the
Premises, before the delinquent date thereof; and in default of any such payment
on the part of Borrower, Lender may pay the same, at its sole option, and all such
payments shall be added to the obligation secured by this Mortgage and shall
bear interest at the same rate as the principal sum secured hereby until repaid by
Borrower.
f. Borrower hereby as;igns to Lender all rents, issues, uses, profits, royalties. or
lease payments due to Borrower from use or occupancy of any part of the
Premises secured by this Mortgage as further security for the payment of the
obligation secured hereby; all rents, profits, lease payments, or royalties
rccei vcd by Lender hereunder shall be applied to the indebtedness secured by
this Mortgage. Borrower grants to Lender the right to enter upon the premises
for the purpose of collecting the same, and to operate or let the Premises, or any
part thereof. and to apply the monies received therefrom, after payment of all
necessary charges and expenses, to the obligations secured by this Mortgage,
upon default of any of the covenants, conditions or agreements contained herein.
Borrower further promises and agrees, in the event of any such default, to pay to
Lender. or to any receiver appointed by a court to collect the rents. issues, and
profits of the Premises, a fuir and reasonable occupational rent fur the use and
occupation of the same or of such part thereof as may be in the possession of
3
Borrower; and on default in the payment of such rental, to vacate and surrender
pcssession of the Premises.
g. Borrower will pay all expenses that Lender incurs in any such action or
proceeding to prosecute or defend the rights and lien created by this Mortgage,
including reasonable attorney's fees, in the event any action or proceeding is
commenced, except an action to foreclose this Mortgage or collect the obligation
secured hereby, in which it becomes necessary to defend or assert the lien of this
Mortgage, whether or not Lender is made or becomes a party to such action or
proceeding, and if not so promptly paid on request, such expenses shall be added
to the debt secured hereby and become a lien on the Premises, and shall be
deemed to be fully secured by this Mortgage and shall be deemed prior and
paramount to any right, title, interest or claim to or on the premises accruing or
attaching subsequent to the lien of this Mortgage, and shall bear interest at the
rate provided for the obligation secured hereby, which action or proceeding shall
be governed by the provisions of law and rules of court respecting the recovery of
cost, disbursements, and allowance in foreclosure actions.
h. Borrower represents that it has not made, done, executed or suffered, and will
not make, do, execute or suffer, any act or thing whereby its title in and to the
Premises, or any part thereof, shall or may be impaired, charged or encumbered
in any way, except as set forth herein, or otherwise expressly agreed in writing,
and that it will execute, acknowledge and deliver such mortgages or instruments
supplemental hereto and do such further acts, instruments and transfers as Lender
may reasonably request for better assuring, mortgaging, pledging,
assigning and confirming to Lender all and singular the property herein
described.
i. Borrower agrees that if all or any portion of the above described Premises
shall be taken or damaged by condemnation proceedings under the power of
eminent domain, all compensation awarded will be paid directly to Lender.
Said compensation shall be applied to the indebtedness hereby secured.
j. In the event Borrower fails to pay when due any taxes, rental charges upon
any leases assigned as additional security for this Mortgage, liens, judgments,
or assessments lawfully assessed against the Premises hereby mortgaged, or
governmental or municipal charges, fines, rates, fees or charges levied, imposed,
or charged against the Premises before the same become delinquent, or fails to
maintain insurance as hereinabove provided, Lender may do so, at its sole
option, and without the obligation to do so, as a protective disbursement and
the amount so paid shalL from the date of payment be added to and deemed a
part of the indebtedness secured hereby, and shall be due and payable on
demand by Lender; provided, however, that the advancement by Lender of any
sum pursuant to this paragraph shall in no manner relieve Borrower of any
obligations incurred under this Mortgage nor limit the right of Lender to
4
declare a default by Borrower and to exercise all rights and remedies as set
forth herein in the event of default.
k. To the extent permitted by law, Borrower agrees that in case of any action,
or in any proceedings in any court, to collect any sums payable under or
secured by this Mortgage, or to protect the lien or title herein of Lender, or in
any other case permitted by law, including foreclosure by action or by
advertisement, in which attorney fees may be collected from Borrower or
charged upon the above described property, to pay Lender's reasonable attorney
fees and actual disbursements necessarily incurred in the course of said action.
L In the event the mortgaged Premises or any portion thereof are sold,
divested, transferred, relinquished, or in the event Borrower should lose their
right, title or interest in the security herein described, or any portion thereof
during the term of this Mortgage, whether voluntarily or by operation of law,
without the prior V.Titten consent of Lender, the entire indebtedness remaining
unpaid and owing, including advances for any purpose, may at the option of
Lender, be declared immediately due and payable, and this Mortgage may then
be foreclosed by action or by advertisement, as provided by statute or the rules
or powers relating thereto.
m. In the case of foreclosure of this Mortgage, at any time after the
commencement of an action of foreclosure or at any time after the
commencement of foreclosure by advertisement, or during any period of
redemption, Lender is authorized to appoint a receiver to take possession of the
Premises if the Premises have been abandoned, or to have a receiver appointed
by the court upon other sufficient proof being established therefor, said
receiver to take immediate possession of the above described property, and of
all the rents or profits accruing therefrom, and to rent or cultivate the same as
the receiver may deem best for the interest of all parties concerned, and be
liable to account to Borrower only for the net profits, after application of rents,
issues and protits upon the expenses and costs of the receivership and
foreclosure and upon the indebtedness, costs and expenses hereby secured or
herein mentioned.
n. Further. in the event of any action by Lender to enforce the collection of the
mortgage debt. Borrower agrees that any expense incurred to procure or extend
an abstract of title, policy of title insurance or other lien search, shall, when
paid by Borrower, become a part of the debt secured hereby, and shall be paid
by Borrower together with all taxable costs of such action.
0
. Any moneys collected by Lender pursuant to !oreclosure under this Mortgage
shall be applied first to pay expenses of collection, including attorney's fees.
and other expenses owed by Borrower pursuant to section 9.4 of the Loan
Agreement; second to pay any interest due on the Loan; third to pay any
5
principal due on the Loan; fourth to pay any other amounts due under the Loan
Documents, and fif1h to pay remaining principal on the Loan. and other
amounts due hereunder, as they become due, such payments to be made in the
same order as set forth in this section.
7. In the case of default by Borrower in the payment of the principal sum, or any part
thereof, at the time or times as specified for the payments hereof, or in the case of default in
the payment of any of said advances, or in the case of any breach of any covenant or
agreement contained in this Mortgage, the Loan Documents, or the Promissory Note, or
related mortgages, documents and notes, or in the event of the failure of Borrower to promptly
pay, when due, any taxes, charges, liens, assessments, or encumbrances, or in the event of the
insolvency of Borrower, Lender may at its option declare this Mortgage to be in default and
shall provide Borrower with \Hittcn notice of such default. If such default has not been cured
within the applicable time periods set forth in Section 5.!.13 of the Credit Agreement,
Borrower, at its sole option. may accelerate the payment of the outstanding debt and may
declare the entire unpaid principal immediately due and payable, and if not paid this Mortgage
may be foreclosed by action, or by advertisement as provided by statute or the rules or powers
relating thereto, including any amendments thereof, and this paragraph shall be deemed as
authorizing and constituting a power of sale as mentioned in said statutes or rules or any
amendments thereof. In addition, Lender may exercise any remedy set forth in any of the
Loan Documents or other agreements between the parties made in connection with this
Mortgage.
8. In the event of any default Lender shall have the privilege, without declaring the
whole indebtedness due and payable, to foreclosure on account of such specific default for
such sums as arc in default and such foreclosure proceedings may be had and the Premises
described herein may be sold, subject to the unpaid indebtedness hereby secured, and this
Mortgage shall continue as a lien for any unpaid balance. If Lender waives the right to
accelerate, or any other right hereunder, such a waiver shall not constitute a waiver of the right to
rescind, or any other remedy available to Lender, nor shall it be construed as a waiver of such
rights in the event of subsequent defaults.
Y. No remedy herein conferred upon or reserved to Lender is intended to be exclusive of
any other available remedy. but each and every remedy shall be cumulative and in addition to
every other remedy given under this Mortgage and the Credit Agreement, or now or hereaf1er
existing at law or in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed as a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be
deemed expedienL In the event that any breach by Borrower is specifically waived in writing by
Lender. such waiver shall be limited to the particular breach so waived and shall not be deemed
to waive any other or subsequent breach.
10. Borrower will comply with all statutes, ordinances, and governmental regulation
affecting the Premises, and if Borrower neglects or refuses to so comply. and such failure or
refusal has not been corrected within 30 days of receipt of written notice, the entire balance of
6
the principal sum secured hereby will, at Lender's sole option, immediately become due and
payable.
11. This Mortgage shall be governed by and construed in accordance with the laws of
the State of South Dakota. Terms used herein and defined in the Loan Agreements shall have
the same meaning as set forth in the Credit Agreement unless the context clearly requires
otherwise.
12. This Mortgage may not be modified or amended e)(cept by mutual consent
expressed in writing, which writing shall be expressly identified as a part and which
writing shall be signed by an authorized representative of each of the parties hereto.
13. Any notice provided for herein shall be deemed given when transmitted as
provided in Section 6.2 of the Credit Agreement
14. The covenants in this Mortgage shall be deemed to be severable. In the event that
any portion of this r..lortgage is determined to be void or unenforceable, that determination
shall not affect the validity of the remaining portions of the Mortgage.
15. This instrument is intended to be and shall be deemed a fixture filing within the
meaning ofSDCL 57A-9-502(c).
!6. The covenants herein contained extend to and bind the agents, employees, assigns,
legal representatives and successors in interest of the parties hereto.
IN WITNESS WHEREOF, this instrument has been executed the day and year first
above written.
(Name of Borrower)
(SEAL)
ATIEST
By: f<
l ts: S:v t .. ::e=
....-'
By: ___ :_ ------
lts: ___ -'':..1 -----------'-
7
5(/IC\
/'-!<"' ,r;;-;1 E I(
""'
CORPORATE ACKNOWLEDGMENT
STATE OF SOUTH DAKOTA )
COUNTY OF
. .
-- J ".'
)ss .
)
On lhis, the 3_ day of . :, i.. 2012, before me, the undersigned officer,
personally appeared :.- . -,., , w)m l!>'lmowledged himself to be the
: _,-._!, , . , . ,_,. of i! 1 . --- > - :. i,, ; limited partnership, and that he,
: ,. -" i " .. ' , being authorized so to do, executed the foregoing
..,r';:inStrul)1Cnt by himself as , . . , / , .

\\ i Pi I,)--,:--,
,- IN Wl1f!ESS WHEREOF, l hereunto set my hand and official seal.
; J- .. ,
.. \\ . >t ..
: : (Notarial Seal)
t. '
' .. ue\.' ""'
... "'fl '. ....
{I I J; \ )
Notary Public, South Dakota
My Commission Expires:
8
EXHIBIT A
PARCEL 1: NBP Lagoon Lot 1 in the Southwest Quarter (SW'/) of Section Seven (7),
Township One Hundred Twenty-two (122) North, Range Sixty-three (63) West of the 5th
P.M., according to the plat thereof of record, Brown County, South Dakota.
PARCEL II: Blocks 1, 2, 3, 4, 5, and Lots 1, 2, and 3, Block 6, H & S First Subdivision in the
North Half (NV2) of Section Thirty-five (35), Tov.'IlShip One Hundred Twenty-three (123)
North, Range Sixty-four (64) West of the 5th P.M., according to the plat thereof of record,
Brown County, South Dakota.
9

Investors Complaint Against Northern Beef Packers in Bankruptcy Proceedings

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Investors Complaint Against Northern Beef Packers in Bankruptcy Proceedings

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UNITED STATES BANKRUPTCY COURT

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