EXHIBIT 10.75
PROMISSORY NOTE
Date: December 29, 1997 Amount: $1,200,000
BORROWER: CITADEL AGRICULTURAL PARTNERS NO. 1
a California general partnership
LENDER: CITADEL HOLDING CORPORATION,
a Delaware corporation
550 South Hope Street, Suite 1825
Los Angeles, CA 90071
PROMISE TO PAY. CITADEL AGRICULTURAL PARTNERS NO. 1, a California general
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partnership ("Borrower'), promises to pay to CITADEL HOLDING CORPORATION, a
Delaware corporation ("Lender'), or order, in lawful money of the United States
of America, the principal amount of One Million Two Hundred Thousand Dollars
($1,200,000) or so much as may be outstanding as set forth from time to time in
Schedule 1 hereto, together with interest on the unpaid outstanding principal
balance.
RESTRICTION ON DRAWS. Borrower acknowledges that Lender has agreed to extend a
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line of credit with a maximum draw down of One Million Two Hundred Thousand
Dollars ($1,200,00) ("Credit Line Limit") in the aggregate to Borrower and two
other separate entities, Citadel Agricultural Partners No. 2 and Citadel
Agricultural Partners No. 3, and that this Note is subject to that Credit Line
Limit. According, the amount that Borrower may draw shall at all times be
limited by the amount of the Credit Line Limit then outstanding, and Lender does
not guarantee that Borrower will be able to draw down any particular minimum
amount under this Loan.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
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principal plus all accrued unpaid interest on August 1, 1998 ("Maturity Date").
Interest on this Note (i) shall be calculated based on the Interest Rate, as
hereinafter defined, (ii) shall commence on the date of the first disbursement
of funds under this Note, and (iii) shall continue to accrue until all amounts
due hereunder have been paid in full. Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in writing.
Unless otherwise agreed or required by applicable law, payments will be applied
first to any unpaid collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
VARIABLE INTEREST RATE. The Interest Rate on this Note is a fluctuating rate
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based on changes in the prime rate published from time to time by the Wall
Street Journal (the "Index"). The Interest Rate to be applied to the outstanding
principal balance of this Note means the rate equal to one (1) percentage (100
basis) point in excess of the Index. Interest shall be computed on the basis
of a three-hundred sixty (360) day year and the actual number of days the
outstanding principal, as the same may vary, remains unpaid. The Interest Rate
shall change on the day the Wall Street Journal publishes a change in the Index.
If the Index becomes unavailable during the term of this Note, Lender may
designate a substitute index after notifying Borrower. Lender will advise
Borrower of the current Index rate upon Borrower's request.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
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charges are earned fully as of the date of this Note and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due ("Early
Payments"). Early Payments will not, unless Lender agrees in writing, relieve
Borrower of Borrower's obligation to continue to make payments of accrued unpaid
interest or such other
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payments as may become due under this Note. Rather, Early Payments will reduce
the then outstanding principal balance.
LATE CHARGE. If any payment is not made within ten (10) days of the due date
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therefor, Borrower shall be charged and shall pay a late charge equal to six
percent (6%) of the unpaid portion of such payment.
LENDER'S RIGHTS. Upon Lender's demand, at any time, Lender may declare the
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entire unpaid principal balance on this Note and all accrued unpaid interest
immediately due, without prior notice, and Borrower shall forthwith pay all
amounts due hereunder. Upon Borrower's failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, Lender,
at its option, may also, if permitted under applicable law, do one or both of
the following: (a) increase the variable Interest Rate on this Note to six
percentage (6%) points over the Index, and (b) add any unpaid accrued interest
to principal and such sum will bear interest therefrom until paid at the rate
provided in this Note (including any increased rate). Lender may hire or pay
someone else to help collect this Note if Borrower does not pay, and Borrower
also will pay Lender all costs or expenses associated therewith. Such costs
include, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses whether or not a lawsuit if commenced, including
attorneys' fees and legal expenses incurred in any bankruptcy proceedings
affecting Borrower (including any action by Lender to modify or vacate any
automatic stay or injunction), appeals, and any post-judgment collection
services. Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by Lender
in the State of California. If either party brings any action against the other
for the enforcement, interpretation or otherwise arising out of this Note,
then, unless subject matter jurisdiction or venue vest exclusively in a
different court, said action shall be filed and prosecuted in the Superior (or
Municipal) Court of Los Angeles County, State of California, and Borrower hereby
consents to the exclusive jurisdiction and venue of said court. Lender and
Borrower hereby waive the right to any jury trial in any action, proceeding,
cross-complaint or counterclaim brought by either Lender or Borrower against the
other. This Note shall be governed by and construed in accordance with the laws
of the State of California.
LINE OF CREDIT. This Note evidences a revolving line of credit. Disbursements
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under this Note may be requested either orally or in writing by any person
designated by Borrower to have such authority. Lender may, but need not,
require that all oral requests be confirmed in writing. All communications,
instruction, or directions by telephone or otherwise to Lender are to be
directed to the telephone number and address designated by Lender in writing.
The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records. Lender will have no
obligation to disburse funds under this Note if: (a) Borrower or any guarantor
is in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; or (d) Borrower has used funds disbursed pursuant to this Note for
purposes other than those authorized by Lender. Lender hereby authorizes and
limits the moneys disbursed under this Note for use only in connection with
Borrower's farm management business.
NO USURY VIOLATION. Anything to the contrary in this Note notwithstanding, no
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interest or fee shall be charged or paid hereunder (including under the Variable
Interest Rate or the Lender's Rights provisions above) at a rate or in an amount
in excess of the maximum rate permitted by law, and in the event the Interest
Rate, the addition of any unpaid accrued interest to principal or any other
charge or assessment against Borrower results in interest in excess of the
maximum rate permitted by law or an unlawful penalty, the same shall be
recalculated so as not to violate the law and any payment of such unlawful
amount shall be deemed to be a reduction of principal and shall be credited
against the outstanding principal balance or refunded to Borrower at the option
of Lender.
GENERAL PROVISIONS. No forbearance, delay or failure to act by Lender shall
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constitute a wavier of any powers, rights or remedies of Lender under this Note.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waives any applicable statute of limitations,
presentment, demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for
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any length of time) this Note, or release any party or guarantor or collateral
without releasing any other party, guarantor or collateral. All such parties
also agree that Lender may modify this Note without the consent of or notice to
anyone other than the party with whom the modification is made.
SECURITY. This note is secured by a Security Agreement of even date executed by
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Borrower.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
CITADEL AGRICULTURAL PARTNERS NO. 1,
a California general partnership
By: CITADEL AGRICULTURE, INC.,
a California corporation, General Partner
/s/ S. Craig Tompkins
By: _______________________________
S. Craig Tompkins, President
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SCHEDULE "1"
Line of Credit Disbursements
for
Citadel Agricultural Partners No. 1,
a California General Partnership
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Date of Disbursement Amount of Disbursement Authorization
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