EXHIBIT 10.5
PROMISSORY NOTE
$876,823 February 22, 0000
Xxx Xxxxx, Xxxxxxxxxx
RECITALS
A. Under the terms of that certain Purchase and Sale Agreement, dated as of
November 26, 2001, by and between BPP/Arrowhead, L.P., a Delaware limited
partnership ("SELLER"), and LAV, LLC, a Delaware limited liability company
("PURCHASER"), as amended by that certain First Amendment to Purchase and Sale
Agreement and Joint Escrow Instructions, dated February 12, 2002 (as amended,
the "PURCHASE AGREEMENT"), Seller agreed to provide to Purchaser a credit
against the purchase price in the amount of $1,500,000 for certain repair work
described therein, and to cause its affiliate Xxxxxxx Pacific Properties, Inc.,
a Maryland corporation, to lend $500,000 to Purchaser for such repair work.
B. Seller has previously deposited funds into certain impound and escrow
accounts held by the lender of the Existing Indebtedness (as defined in the
Purchase Agreement). Purchaser has agreed to repay Seller for such deposits in
the amount of $376,823.
C. Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxx, who are members of Purchaser, have
agreed to repay $876,823 to Lender (as defined below) in accordance with the
terms set forth below in this Promissory Note.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Purchaser, Purchaser agrees to
the following terms:
1. PRINCIPAL.
For value received, in installments as herein provided, XXXXX X. XXXXXX
and XXXXXX X. XXXXX (collectively, "BORROWER"), jointly and severally
promise to pay to the order of XXXXXXX PACIFIC PROPERTIES, INC., a
Maryland corporation ("LENDER") and its successors and assigns, at its
office at 000 Xxxx X Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, or
at such other place as the holder hereof may from time to time designate
in writing, the principal sum of Eight Hundred Seventy-Six Thousand
Eight Hundred Twenty-Three Dollars and 00/100 Dollars ($876,823).
2. PAYMENTS; MATURITY DATE.
Borrower shall make thirty (30) payments to Lender at the address set
forth above in the amount of $29,227.43 on the first day of each month
commencing on April 1, 2002 and ending on September 1, 2004 (the
"MATURITY DATE"). If the first day of any month falls on a
day that is not a day on which federally chartered banks are open for
business in California (a "BUSINESS DAY"), payment must be made on the
next succeeding Business Day.
3. INTEREST RATE.
Except during the occurrence of an Event of Default hereunder, the
outstanding principal balance hereunder shall bear no interest.
4. PREPAYMENT.
Borrower shall have the right to prepay the amount due under this Note
at any time without penalty or fee.
5. LAWFUL MONEY.
Principal and any default interest are payable in lawful money of the
United States of America.
6. LATE CHARGES.
If any payment is five or more days overdue, Lender will have the option
to assess a late charge of six cents for each dollar so overdue. In
connection therewith, Borrower and Lender agree as follows:
(a) Because of such late payment, Lender will incur certain costs
and expenses including, without limitation, administrative costs,
collection costs, loss of interest, and other direct and indirect costs
in an uncertain amount;
(b) It would be impractical or extremely difficult to fix the exact
amount of such costs in such event;
(c) The late charge is a reasonable and good faith estimate of such
costs; and
(d) Such late charge will constitute liquidated damages caused by
such failure to make a payment of interest or principal when due but
only to the extent such late charge is assessed by Lender, paid by
Borrower and accepted by Lender and only upon the condition that such
failure is completely cured concurrently with such payment. The
assessment of a late charge to any such late payment as described in
this SECTION 6 will not be interpreted or deemed to extend the period
for payment or otherwise limit any of Lender's remedies hereunder.
7. EVENT OF DEFAULT
Borrower's failure to pay any sum due hereunder when due pursuant to the
terms hereof will be deemed an event of default ("EVENT OF DEFAULT")
hereunder.
8. REMEDIES.
Upon the occurrence of an Event of Default, at the option of Lender, the
entire balance of principal together with all accrued interest thereon
will, without demand or notice, shall immediately become due and payable
and so long as such Event of Default continues the entire balance of
principal shall bear interest at the rate of ten percent (10%) per year.
No delay or omission on the part of the holder hereof in exercising any
right under this Note will operate as a waiver of such right.
9. WAIVER.
Borrower hereby waives diligence, presentment, protest and demand,
notice of protest, dishonor and nonpayment of this Note, and expressly
agrees that, without in any way affecting the liability of Borrower
hereunder, Lender may extend any maturity date or the time for payment
of any installment due hereunder, release any party liable hereunder and
release any security hereafter securing this Note. Borrower further
waives, to the full extent permitted by law, the right to plead any and
all statutes of limitations as a defense to any demand on this Note or
on other agreement hereafter securing this Note.
10. ATTORNEYS' FEES.
If this Note is not paid when due or if any Event of Default occurs,
Borrower promises to pay all costs of enforcement and collection,
including, without limitation, reasonable attorneys' fees, whether or
not any action or proceeding is brought to enforce the provisions
hereof.
11. SEVERABILITY.
Every provision of this Note is intended to be severable. If any term or
provision hereof is declared by a court of competent jurisdiction, to be
illegal or invalid for any reason whatsoever, such illegality or
invalidity will not affect the balance of the terms and provisions
hereof, which terms and provisions will remain binding and enforceable.
12. NUMBER AND GENDER.
In this Note the singular includes the plural and the masculine includes
the feminine and neuter gender, and vice versa, if the context so
requires.
13. HEADINGS.
Headings at the beginning of each numbered Paragraph of this Note are
intended solely for convenience and are not to be deemed or construed to
be a part of this Note.
14. CHOICE OF LAW.
THIS NOTE IS GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
15. WAIVER OF JURY TRIAL.
Borrower waives trial by jury with respect to any action, claim, suit or
proceeding in respect of or arising out of this Note and/or the conduct
of the relationship between Lender and Borrower. Borrower has obtained
the advice of its legal counsel before signing this Note and
acknowledges that it voluntarily agreed to the foregoing provision with
full knowledge of its significance and legal consequence.
16. CONSENT TO VENUE.
Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement and/or the
conduct of the relationship between Lender and Borrower, in any state or
federal court in the State of California. Borrower hereby irrevocably
waives, to the fullest extent permitted by law, the defense of any
inconvenient forum to the maintenance of such action or proceeding in
any such court.
17. JOINT AND SEVERAL LIABILITY
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxx shall be jointly and severally
liable for the obligations of Borrower hereunder.
18. MARRIED PERSONS
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxx hereby agree that recourse may be
had against each of their respective separate property as well as their
respective community property for all of the obligations hereunder.
19. PLEDGE
The obligations of Borrower hereunder shall be secured by a pledge of
membership interests in LAV, LLC and/or in Verges/Xxxxx Manager, Inc.
(and/or in its parent entities) to the extent permitted under the loan
documents governing the Existing Indebtedness (as defined in the
Purchase Agreement).
20. COUNTERPARTS
This Note may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. The signature pages of any
counterpart may be detached therefrom without impairing the legal effect
of the signature(s) thereon provided such signature page is attached to
any other counterpart identical thereto except having additional
signature pages executed by other parties to this Note attached thereto.
[signatures on following pages]
IN WITNESS WHEREOF, Borrower has signed this Note and delivered this Note
to Lender as of the date first written above.
/S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
/S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
CONSENT OF SPOUSES:
The undersigned have had the opportunity to read the foregoing Note and to
consult with their legal counsel as they considered necessary or desirable. The
undersigned understand that their respective community property shall be subject
to the obligations under this Note but that their respective sole and separate
property, if any, shall not be subject to such obligations under this Note.
/S/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
/S/ XXXXXX XXXXX
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Xxxxxx Xxxxx
