Kenneth and Dorothy Hitchen - Page 5

                                        - 5 -                                         
          the partnerships promoted by Mr. Hoyt (“Hoyt partnership” or                
          “Hoyt investment”).  In connection with the investment,                     
          petitioners signed a form on December 17, 1986, titled                      
          “Instructions to Hoyt and Sons Ranches--Acknowledgment of                   
          Appointment of Power of Attorney”.  This form provided:                     
               I have given Walter J. Hoyt III the irrevocable                        
               authority to sign my name to a Certificate of                          
               Assumption of Primary Liability Form as part of a                      
               transfer on a full recourse Promissory Note in the                     
               amount of $190,000, that will become part of a transfer                
               of debt agreement between me, the partnership known as                 
               Shorthorn Genetic Engineering 1986 Ltd., and HOYT &                    
               SONS RANCHES, said note having been delivered to HOYT &                
               SONS RANCHES to pay for breeding cattle purchased from                 
               HOYT & SONS RANCHES, an Oregon Partnership, in Burns,                  
               Oregon, which are to be held as breeding cattle by the                 
               above named Partnership.  This authorizes Mr. Hoyt to                  
               sign my name on the notes that were made for the                       
               purchase of Registered Shorthorn Breeding cattle from                  
               HOYT & SONS RANCHES, and no other purpose.  I                          
               understand I will owe this amount directly to HOYT &                   
               SONS RANCHES, and not to my partnership.                               
                  *       *       *       *       *       *       *                   
               My goal is that the value of my share of the cattle                    
               owned by the Partnership, in which you have a secured                  
               party interest, must never fall below the amount for                   
               which I am personally liable.  If the value of my                      
               cattle does fall below the amount of my loan, and you                  
               become aware of that, you must so notify me within                     
               thirty days in order that I may make a damage claim to                 
               W.J. Hoyt Sons Management Company for possible default                 
               on the Share-Crop Operating Agreement, and/or the                      
               cattle fertility warranties.                                           
          Upon making the investment, petitioners were told that they would           
          “get some money back when we retired.”  Petitioners, however,               
          were uncertain how the investment was to provide income or                  
          profits.  Petitioners did not consult with anyone outside Mr.               

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011