ESOP LOAN AGREEMENT NO. 2
This ESOP Loan Agreement No. 2 (the “Second Agreement”) dated as of July 21, 2003 is entered into by and
between FARMER BROS. CO., a California corporation (“Lender”), and WELLS FARGO BANK, N.A., (the
“Trustee”) as trustee for the FARMER BROS. CO. EMPLOYEE STOCK OWNERSHIP PLAN (the
“Borrower” or the “ESOP”).
A. The Lender has adopted an employee stock ownership plan to purchase and hold FARMER BROS. CO.
stock on behalf of the eligible employees of Lender. The ESOP is intended to qualify as an employee stock
ownership plan under section 4975(c)(7) of the Internal Revenue Code of 1986, as amended (the “Code”), and
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The
ESOP provides that the ESOP may obtain loans to purchase shares of Lender’s stock. It is intended that loans
made under this Agreement shall qualify for an exemption under Section 4975(d) of the Code from being a
prohibited transaction under Section 4975(c) of the Code.
B. Pursuant to the ESOP Loan Agreement dated March 28, 2000 as amended by Amendment No. 1 to ESOP
Loan Agreement (“First Agreement”), as of the date hereof the ESOP has acquired 170,426 shares of the
300,000 shares of the Company’s common stock for which a loan was authorized by the First Agreement.
C. The provisions for loan advances under the First Agreement expired on July 31, 2003.
D. On July 21, 2003 Lender’s Board of Directors authorized a loan to the ESOP, without limitation as to
amount, to purchase the remainder (129,574 shares) of the 300,000 originally authorized. Such remaining shares
are called “Shares” herein.
E. The ESOP Plan Committee by action dated October 6, 2003 has authorized the execution of the Second
ARTICLE 1: The ESOP Loan
1.1 Subject to the terms set forth herein, the Lender agrees to lend to the Borrower the Principal Amount, or
such portion of the Principal Amount as the Borrow