AMENDMENT TO LEASE AND OPERATING AGREEMENT

 

 

This Amendment to Lease and Operating Agreement (this “Amendment”) is made and entered into as of February 28, 2002 by and between Eastern Livestock Co., LLC, a Kentucky limited liability company, (“Operator”), and eMerge Interactive, Inc., a Delaware corporation (“Owner”).

 

 

1.    Owner and Operator entered into a Lease and Operating Agreement, dated October 16, 2001, and effective as of October 1, 2001 (the “Agreement”).

 

2.    The parties wish to amend the Agreement to add certain provisions relating to the line of credit maintained by Operator for purposes of the Business.

 

NOW, THEREFORE, in consideration of the foregoing and the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

 

 

1.    Certain Terms.    All capitalized terms used herein without definition shall have the meanings assigned thereto in the Agreement. All references to the Agreement shall refer to the Agreement as hereby amended.

 

2.    Amendment to Section 3 of the Agreement.    Section 3 of the Agreement is hereby amended by adding a new section 3(1), as follows:

 

 

 

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Owner acknowledges and agrees that Operator maintains such operating accounts and lines of credit with National City Bank of Kentucky (“National City”), and that it has granted and/or will grant security interests in the cattle owned by Operator, in the proceeds of cattle, including accounts due Operator, and in the operating accounts into which the proceeds are deposited, as collateral for the money it borrows on its lines of credit with National City. Owner further agrees that the cattle, accounts, and other collateral in which Operator grants National City a security interest shall secure all of Operator’s liabilities to National City under Operator’s Revolving Loan and Security Agreement, dated December 29, 2000, and all amendments and modifications thereto, including without limitation amendments and modifications as to the maximum principal amount, and certain other (as set forth in the following sentence) debts and liabilities of Operator to National City and are not limited to securing Operator’s debts and liabilities incurred with National City in the operation of the Business. Owner acknowledges and agrees that Operator may use the cattle, accounts, and other collateral relating to the Business to cross-collateralize the following obligations (and only the following obligations) of Operator to National City: (A) Commercial Installment Note (Hartley) dated November 12, 1997 in the original principal amount of $2,225,000 and with a maturity of November 12, 2004; (B) Commercial Installment Note (Hartley Mill) dated May 14, 2001 in the original principal amount of $790,500 and with a maturity of November 12, 2007; (C) Promissory Note (Building) dated August 5, 2006 in the original principal amount of $790,500 and with a maturity of August 5, 2006; and (D) all extensions, renewals and modifications of each of (A) through (C). Notwithstanding the foregoing, Operator will use reasonable efforts to cause National City (either through replacement or repayment of such obligations) to release the cattle, accounts, and other collateral relating to the Business as collateral for obligations (A) through (D) as soon as is practicable, and in any case upon replacement or repayment of such obligations. Owner acknowledges that National City may send notices of its perfected security interest in the property of Operator to secured parties of Owner that have perfected security interests in property similar to the property Operator will buy, sell, generate, and use in the Business.

 

            (iii)     Owner hereby waives and subordinates in favor of National City any landlord’s or agister’s lien that Owner may now or hereafter hold as a result of Operator storing or keeping cattle at facilities owned, leased or controlled by Owner and, in compliance with Operator’s agreements with National City, Owner will permit National City to enter the premises of such facilities upon reasonable advance notice, and will authorize National City to remove its collateral therefrom in a commercially reasonable manner in order to efficiently sell or otherwise dispose of Operator’s cattle kept at such facility.

 

            (iv)     Owner and Operator agree that at all reasonable times and from time to time National City shall have access to and the right to use the equipment leased by Owners to Operator and set forth on Exhibit D (“Equipment”) in order for National City to examine, inspect, and make extracts

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3.    No Other Amendment.    Except as specifically amended pursuant to this Amendment, the Agreement remains in full force and effect in accordance with its terms.

 

4.    Governing Law.    This Amendment shall be governed by and constructed under the laws of the State of Delaware.

 

5.    Counterparts; Facsimile.    This Amendment may be executed in a number of identical counterparts, all of which shall constitute on Amendment and will be binding on the parties; provided that, in making proof of this Amendment, it shall not be necessary to produce or account for more than one such counterpart. A telecopied facsimile of a duly executed counterpart of this Amendment shall be sufficient evidence of the binding agreement of each party to the terms herein, and delivery of this Amendment shall be deemed to occur upon transmission of a facsimile of a fully executed counterpart of this Amendment to the intended recipient.

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

 

 

 

 

 

 

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