EXHIBIT 10.70
LINE OF CREDIT
BUSINESS LOAN AGREEMENT
BORROWER: BIG 4 RANCH, INC.
a Delaware corporation
550 South Hope Street, Suite 1825
Los Angeles, CA 90071
LENDER: CITADEL HOLDING CORPORATION
a Delaware corporation
550 South Hope Street, Suite 1825
Los Angeles, CA 90071
THIS LINE OF CREDIT BUSINESS LOAN AGREEMENT between BIG 4 RANCH, INC.,
a Delaware corporation ("Borrower"), and CITADEL HOLDING CORPORATION, a Delaware
corporation ("Lender"), is made and executed on the following terms and
conditions. All such loans and financial accommodations, together with all
future loans and financial accommodations from Lender to Borrower, are referred
to in this Agreement individually as the "Loan" and collectively as the "Loans."
Borrower understands and agrees that: (a) in granting, renewing, or extending
any Loan, Lender is relying upon Borrower's representations, warranties, and
agreements, as set forth in this Agreement; (b) the granting, renewing, or
extending of any Loan by Lender at all limes shall be subject to Lender's sole
judgment and discretion; and (c) all such Loans shall be and shall remain
subject to the following terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of the 29th day of DECEMBER, 1997
and shall continue thereafter until all Indebtedness of Borrower to Lender has
been performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement from time to time.
BORROWER. The word "Borrower" means BIG 4 RANCH, INC., a Delaware
corporation.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"EVENTS OF DEFAULT."
INDEBTEDNESS. The word "Indebtedness" means and includes the Line of Credit
Promissory Note executed at even date herewith, together with all other
obligations, debts, liabilities, extensions or renewals thereof.
LENDER. The word "Lender" means CITADEL HOLDING CORPORATION, its successors
and assigns.
LOAN. The word "Loan" or "Loans" means and includes without limitation any
and all Indebtedness.
NOTE. The word "Note" means and includes without limitation The Line of
Credit Promissory Note and Borrower's other promissory notes, if any,
evidencing Borrower's Loan obligations in favor of Lender, as well as any
substitute, replacement or refinancing note or notes therefor.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
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of trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as
of the date of this Agreement and as of the date of each disbursement of Loan
proceeds:
ORGANIZATION. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
Borrower has the full power and authority to transact the businesses in which
it is presently engaged or presently proposes to engage.
AUTHORIZATION. The execution, delivery, and performance of this Agreement
and all Related Documents by Borrower, to the extent to be executed,
delivered or performed by Borrower, have been duly authorized by all
necessary action by Borrower; do not require the consent or approval of any
other person, regulatory authority or governmental body; and do not conflict
with, result in a violation of, or constitute a default under (a) any
provision of its articles of incorporation or organization, or bylaws, or any
agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation, court decree, or order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.
LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may
materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
BINDING EFFECT. This Agreement and the Note are binding upon Borrower as
well as upon Borrower's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower to Lender will be, true and
accurate in every material respect on the date as of which such information
is dated or certified; and none of such information is or will be incomplete
by omitting to state any material fact necessary to make such information not
misleading.
SURVIVAL OF REPRESENTATION AND WARRANTIES. Borrower understands and agrees
that Lender is relying upon the above representations and warranties in
extending Loan disbursements to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature and
shall remain in full force and effect until such time as Borrower's Loan and
Note shall be paid in full, or until this Agreement shall be terminated in
the manner provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
REPAYMENT. Repay the Note in accordance with its terms and the terms of this
Agreement.
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LITIGATION. Promptly inform Lender of (a) all material adverse changes in
Borrower's financial condition, and (b) all litigation and claims and all
threatened litigation and claims affecting Borrower or any Guarantor which
could materially affect the financial condition of Borrower or the financial
condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis
("GAAP"), and permit Lender to examine and audit Borrower's books and records
at all reasonable times.
ADDITIONAL INFORMATION. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax returns, and other reports with
respect to Borrower's financial condition and business operations as Lender
may request from time to time.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies reasonably acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
confirmations that coverages will not expire or be canceled or diminished
without at least thirty (30) days' prior written notes to Lender. Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or
default of Borrower or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest for
the Loans, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the name
of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of
which insurance has been obtained, and the manner of determining those
values; and (f) the expiration date of the policy.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its Indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies, and liens, of every kind and nature, imposed
upon Borrower or its properties, income, or profits, prior to the date on
which penalties would attach, and all lawful claims that if unpaid, might
become a lien or charge upon any of Borrower's properties, income, or
profits. Provided however, Borrower will not be required to pay and
discharge any such assessment, tax, charge, levy, lien or claim so long as
(a) the legality of the same shall be contested in good faith by appropriate
proceedings, and (b) Borrower shall have established on its books adequate
reserves with respect to such contested assessment, tax, charge, levy, lien,
or claim in accordance with GAAP. Borrower, upon demand of Lender, will
furnish to Lender evidence of payment of assessments, taxes, charges, levies,
liens, and claims and will authorize the appropriate governmental official to
deliver to Lender at any time a written statement of any assessments, taxes,
charges, levies, liens, and claims against Borrower's properties, income, or
profits.
PERFORMANCE. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in all other instruments and agreements
between Borrower and Lender in a timely manner, and promptly notify Lender if
Borrower learns of the occurrence of any event which constitutes an Event of
Default under this Agreement.
OPERATIONS. Substantially maintain its present executive and management
personnel; and conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and municipal
laws, ordinances, rules and regulations respecting its properties, charters,
businesses and operations.
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INSPECTION. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower's books, accounts, and records.
If Borrower now or at any time hereafter maintains any records (including
without limitation computer generated records and computer software programs
for the generation of such records) in the possession of a third party,
Borrower, upon request of Lender, shall notify such party to permit Lender
free access to such records at all reasonable times and to provide Lender
with copies of any records it may request, all at Borrower's expense.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
notes, instruments, documents and other agreements as Lender or its attorneys
may reasonably request to evidence the Loans.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged or,
(b) cease operations, liquidate, merge, transfer, acquire or consolidate with
any other entity, change ownership, dissolve or transfer or sell any of its
properties or assets out of the ordinary course of business.
DISTRIBUTIONS AND CORPORATE ORGANIZATION. Borrower shall make no
distributions of any kind to shareholders, including without limitation
dividends in cash, stock or other forms, shall make no loan or extend any
credit to shareholders, shall not permit or consent to shareholders pledging
or otherwise encumbering their shares of stock in Borrower or the right to
receive dividends in the future, shall not repurchase any of Borrower's
outstanding shares of stock, and shall not modify or amend Borrower's
Certificate of Incorporation or Borrower's By-Laws.
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including capital
leases; (b) except as allowed as a Permitted Lien, sell, transfer, mortgage,
assign, pledge, lease, grant a security interest in, or encumber any of
Borrower's assets; or (c) sell with recourse any of Borrower's accounts,
except to Lender.
OTHER BORROWINGS. Borrow from any person or entity other than Lender,
whether such borrowing is secured or unsecured.
CESSATION OF DISBURSEMENTS. If Lender has made any commitment to make any Loan
to Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan disbursements or to disburse Loan proceeds
if: (a) Borrower or any Guarantor is in default under the terms of this
Agreement or any of the Related Documents or any other agreement that Borrower
or any Guarantor has with Lender; (b) Borrower becomes insolvent files a
petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (c)
there occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral securing
any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit modify
or revoke such Guarantor's guaranty of the Loan or any other loan with Lender;
or (e) Lender in good faith deems itself insecure, even though no Event of
Default shall have occurred.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due on
the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term contained in this Agreement or in any of the
Related Documents, or failure of Borrower to comply with or to perform any
other term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
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DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.
FALSE STATEMENT. Any warranty, representation or statement made or furnished
to Lender by or on behalf of Borrower under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at
the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security Interest) at any time and
for any reason.
INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver for
any part of Borrower's property, any assignment for the benefit of creditors,
any type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the Indebtedness, or by any
governmental agency.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or such Guarantor dies or becomes
incompetent or any Guarantor revokes any guaranty of the Indebtedness.
CHANGE IN OWNERSHIP OR CONTROL. Any change in ownership of twenty-five
percent (25%) or more of the ownership of Borrower, or if the majority of
Borrower's directors are persons other than those nominated by the Board of
Directors.
FARMING PARTNERSHIPS. The sale, transfer or liquidation of Borrower's
interest in those certain partnerships now known as Citadel Agricultural
Partners No. 1, Citadel Agricultural Partners No. 2, or Citadel Agricultural
Partners No. 3 (individually, "Farm Partnership" and collectively, the "Farm
Partnerships"); the cessation of the Farm Partnerships to engage actively in
the citrus crop cultivation business; the cessation of the Farm Partnerships
to own any of the real property on which said partnerships are engaged in the
citrus crop cultivation business; or Borrower fails to pay to Lender any cash
distributions Borrower receives from the Farm Partnerships, except that
Borrower may, upon Lender's approval, retain a portion of such cash
distributions to cover Borrower's tax liability relating solely to such
distributions.
ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
TERMINATION OF FARM MANAGEMENT AGREEMENT. The termination or expiration of
that certain Farm Management Agreement, between Borrower and Big 4 Farming,
LLC, for any reason or no reason whatsoever, whether by operation of Law,
default by any party to such agreement, by mutual agreement between said
parties or otherwise.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make Loan advances or disbursements), and, at Lender's option, all
Loans immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional.
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MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment.
APPLICABLE LAW. This Agreement 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. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the Provisions of
this Agreement.
FURTHER ASSURANCES. From and after the date of this Agreement, Lender and
Borrower shall do such things, perform such acts, and make, execute,
acknowledge and deliver such documents as may be reasonably necessary or
proper and usual to carry out the purpose of this Agreement in accordance
with its terms.
JURY TRIAL WAIVER. In the event that any controversy or claim between or
among the parties arising from or relating to this Agreement, the Related
Documents, the Loan, or any Indebtedness shall become the subject of a
judicial action, each party hereby waives its respective right to trial by
jury of the controversy or claim.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's out-
of-pocket expenses, including without limitation attorneys' fees, incurred in
connection with the preparation, execution, enforcement and collection of
this Agreement or in connection with the Loans made pursuant to this
Agreement. Lender may pay someone else to help collect the Loans and to
enforce this Agreement, and Borrower will pay that amount. This includes,
subject to any limits under applicable law, Lender's attorneys' fees and
Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. Borrower also will pay any court costs, in
addition to all other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall be
given in writing and shall be effective when actually delivered or when
deposited with a nationally recognized overnight courier or deposited in the
United States mail, first class, postage prepaid, addressed to the party to
whom the notice is to be given at the address shown above. Any party may
change its address for notice under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is to
change the party's address. To the extent permitted by applicable law, if
there is more than one Borrower, notice to any Borrower will constitute
notice to all Borrowers. For notice purposes, Borrower agrees to keep Lender
informed at all times of Borrower's current addresses.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of this
Agreement in all other respects shall remain valid and enforceable.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
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SURVIVAL. All warranties, representations, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery to
Lender of the Related Documents, regardless of any investigation made by
Lender or on Lender's behalf.
LIMITATIONS AND TIME. Borrower's right to plead the statute of limitations
as a defense to any and all of the obligations contained herein or secured
hereby is waived to the full extent permitted by law. Time and exactitude of
each of the terms, obligations, covenants and conditions are hereby declared
to be the essence hereof.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting
of such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in all
cases such consent may be granted or withheld in the sole discretion of
Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
DECEMBER ___, 1997.
BORROWER:
BIG 4 RANCH, INC., a Delaware corporation
/s/ Edward L. Kane
By: _______________________________
Edward L. Kane
Title: President
LENDER:
CITADEL HOLDING CORPORATION,
a California corporation
By: _______________________________
Steve Wesson
Title: President
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LINE OF CREDIT PROMISSORY NOTE
PRINCIPAL AMOUNT: $200,000.00 DATE: DECEMBER 29, 1997
BIG 4 RANCH, INC., a Delaware corporation ("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 Two
Hundred Thousand & 00/100 Dollars ($200,000.00) or so much as may be
outstanding, together with interest on the unpaid outstanding principal balance.
DRAW DOWN PERIOD. Provided Borrower is otherwise in compliance with the terms
and conditions of this Line of Credit Promissory Note ("Note") and the
additional loan documents executed now or in the future in connection with this
Note, Borrower may draw against this Note from time to time in such amounts as
Borrower desires up to a maximum of Two hundred Thousand Dollars ($200,000) from
the date hereof to and including the THIRD (3RD) ANNIVERSARY DATE of this Note
("DRAW DOWN PERIOD").
PAYMENT. Borrower will pay all outstanding principal plus all accrued unpaid
interest under this Note on the FIFTH (5TH) ANNIVERSARY DATE hereof (" "). In
addition, prior to the Maturity Date, Borrower shall make annual payments of
accrued interest in arrears on the outstanding principal balance, beginning on
January 1, 1999, and continuing thereafter on the same day of each year until
the this Note is paid in full on the 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 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.
INTEREST RATE. The Interest Rate on this Note is a fluctuating rate 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 two (2) percentage (200 basis)
points 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
then current Index rate upon Borrower's request. Anything to the contrary in
this Note notwithstanding, interest shall not be charged or paid hereunder at a
rate in excess of the maximum rate permitted by law, and in the event the
Interest Rate exceeds the maximum rate permitted by law, the same 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.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
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 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
therefor, Borrower shall be charged and shall pay a late charge equal to FIVE
PERCENT (5%) of the unpaid portion of such payment.
LENDER'S RIGHTS. In the event Borrow fails to pay any installment on the due
date therefor, Lender shall have the right to declare the 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. In
the event Borrower fails to pay any amounts due hereunder, 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
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to FIVE (5) percentage 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
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.
GENERAL PROVISIONS. No forbearance, delay or failure to act by Lender shall
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 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.
BORROWER:
BIG 4 RANCH, INC.,
a Delaware corporation
/s/ Edward L. Kane
By: ___________________________
Edward L. Kane
Title: President
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