Exhibit 10.11
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SBA LOAN NUMBER
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PLP 000-000-0000
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U.S. Small Business Administration
NOTE
Burbank, California
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(City and State)
(Date) August 20, 1998
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$ 300,0000.00
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For value received, the undersigned promises to pay to the order of
WESTERN SECURITY BANK, N.A. at its office in the City of Burbank, State of
California or at holder's option, at such other place as may be designated
from time to time by the holder Three Hundred Thousand and No/100 dollars,
with interest on unpaid principal computed form the date of each advance to
the undersigned at the rate of 11.25% percent per annum, payment to be made
in installments as follows:
The interest on this Note will fluctuate. The initial interest rate is
11.25% per year. This initial rate is the prime rate on the date SBA
received the loan application, plus 2.75%.
Borrower must pay one payment of interest on the disbursed principal
balance on September 1, 1998.
Borrower must pay principal and interest payments of $5,217.36, on the
First day of each month, beginning on October 1, 1998.
Lender will apply each installment payment first to pay interest accrued
to the day Lender receives the payment, then to bring principal current, then
to pay any late fees, and will apply any remaining balance to reduce
principal.
Lender may adjust the interest rate for the first time no earlier than
the first calendar day of the first month after initial disbursement. The
interest rate will then be adjusted each calendar quarter (the "change date").
The "Prime Rate" is the prime rate published in the WALL STREET JOURNAL,
in effect on the first business day of the month in which a change occurs.
Lender will adjust the interest rate on each change date. The adjusted
interest rate will be 2.75% above the Prime Rate. The change in interest
rate is effective on the change date. It is effective whether or not Lender
gives Borrower notice of the change.
Lender must adjust the payment amount at least annually as needed to
amortize principal over the remaining term of the note.
If SBA purchases the guaranteed portion of the unpaid principal balance,
the interest rate becomes fixed at the rate in effect at the time of the
earliest uncured payment default. If there is no uncured payment default,
the rate becomes fixed at the rate in effect at the time of purchase.
All remaining principal and accrued interest is due and payable 7
year(s) from the date of this Note.
Borrower agrees that if default occurs on this Note or on any other
outstanding SBA or SBA-guaranteed loan, Lender has the option to make this
Note and such other loans immediately due and payable.
Late Charge: If a payment on this Note is more than 10 days late,
Lender may charge Borrower a late fee of up to 5% of the unpaid portion of
the regularly scheduled payment.
If this Note contains a fluctuating interest rate, the notice provision
is not a pre-condition for fluctuation (which shall take place regardless of
notice). Payment of any installment of principal or interest owing on this
Note may be made prior to the maturity date thereof without penalty.
Borrower shall provide lender with written notice of intent to prepay part or
all of this loan at least three (3) weeks prior to the anticipated prepayment
date. A prepayment is any payment made a had of schedule that exceeds twenty
(20) percent of the then outstanding principal balance. If borrower makes a
prepayment and fails to give at least three weeks advance notice of intent to
prepay, then, notwithstanding any other provision to the contrary in this
note or other document, borrower shall be required to pay lender three weeks
interest on the unpaid principal as of the date preceding such prepayment.
The term "indebtedness" as used herein shall mean the indebtedness
evidenced by this Note, including principal, interest and expenses, whether
contingent, now due or hereafter to become due and whether heretofore or
contemporaneously herewith or hereafter contracted. The term "Collateral" as
used in this Note shall mean any funds, guaranties, or other property or
rights therein of any nature whatsoever or the proceeds thereof which may
have been, are, or hereafter may be, hypothecated, directly or indirectly by
the undersigned or others. In connection with, or as security for, the
Indebtedness or any part thereof. The Collateral, and each part thereof,
shall secure the Indebtedness and each part thereof. The covenants and
conditions set forth or referred to in any and all instruments of
hypothecation constituting the Collateral are hereby incorporated in this
Note as covenants and conditions of the undersigned with the same force and
effect as though such covenants and conditions were fully set forth herein.
The Indebtedness shall immediately become due and payable, without
notice or demand, upon the appointment of a receiver or liquidator, whether
voluntary or involuntary, for the undersigned or for any of its property, or
upon the filing of a petition by or against the undersigned under the
provisions of any State insolvency law or under the provisions of the
Bankruptcy Reform Act of 1978, as amended, or upon the making by the
undersigned of an assignment for the benefit of its creditors. Holder is
authorized to declare all or any part of the Indebtedness immediately due and
payable upon the happening of any of the following events: (1) Failure to pay
any part of the Indebtedness when due; (2) nonperformance by the undersigned
of any agreement with, or any condition imposed by Holder or Small Business
Administration (thereafter called "SBA"), with respect the Indebtedness; (3)
Holder's discovery of the undersigned's failure in any application of the
undersigned to Holder or SBA to disclose any fact deemed by Holder to be
material or of the making therein or in any of the said agreements, or in any
affidavit or other documents submitted in connection with said application or
the Indebtedness, of any misrepresentation by, on behalf of, or for the
benefit of the undersigned; (4) the reorganization (other than a
reorganization pursuant to any of the provisions of the Bankruptcy Reform Act
of 1978, as amended) or merger or consolidation of the undersigned (or the
making of any agreement therefor) without the prior written consent of
Holder; (5) the undersigned's failure duly to account, to Xxxxxx's
satisfaction, at such time or times as Holder may require, for any of the
collateral, or proceeds thereof, coming into the control of the undersigned;
or (6) the institution of any suit affecting the undersigned deemed by Xxxxxx
to affect adversely its interest hereunder in the collateral or otherwise.
holder's failure to exercise its rights under this paragraph shall not
constitute a waiver thereof.
Upon the nonpayment of the Indebtedness, or any part thereof, when due,
whether by acceleration or otherwise, Holder is empowered to sell, assign,
and deliver the whole or any part of the Collateral at public or private
sale, without demand, advertisement or notice of the time or place of sale or
of any adjournment thereof, which are hereby expressly waived. After
deducting all expenses incidental to or arising from such sale or sales,
Holder may apply the residue of the proceeds thereof to the payment of the
Indebtedness, as it shall deemed proper, returning the excess, if any, to the
undersigned. The undersigned hereby waives all right of redemption or
appraisement whether before or after sale.
Holder is further empowered to collect or cause to be collected or
otherwise to be converted into money all or any part of the Collateral, by
suit or otherwise, and to surrender, compromise, release, renew, extend,
exchange, or substitute any item of the Collateral in transactions with the
undersigned or any third party, irrespective of any assignment thereof by
the undersigned, and without prior notice to or consent of the undersigned or
any assignee. Whenever any time of the Collateral shall not be paid when
due, or otherwise shall be in default, whether or not the Indebtedness, or
any part thereof, has become due, Holder shall have the same rights and
powers with respect to such item of the Collateral as are granted in this
paragraph in case of nonpayment of the Indebtedness, or any part thereof,
when due. None of the rights, remedies, privileges or powers of Holder
expressly provided for
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herein shall be exclusive, but reach of them shall be cumulative with and in
addition to every other right, remedy, privilege, and power now or hereafter
existing in favor of Holder, whether at law or equity, by statute or
otherwise.
The undersigned agrees to take all necessary steps to administer,
supervise, preserve, and protect the Collateral; and regardless of any action
taken by Xxxxxx, there shall be no duty upon Holder in this respect. The
undersigned shall pay all expenses of any nature, whether incurred in or out
of court, and whether incurred before or after this Note shall become due at
its maturity date or otherwise, including but not limited to reasonable
attorney's fees and costs, which Holder may deem necessary or proper in
connection with the satisfaction of the Indebtedness or the administration,
supervision, preservation, protection of (including, but not limited to, the
maintenance of adequate insurance) or the realization upon the Collateral.
Holder is authorized to pay at any time and from time to time any or all of
such expenses, add the amount of such payment to the amount of the
Indebtedness, and change interest thereon at the rate specified herein with
respect to the principal amount of this Note.
The security rights of Holder and its assigns hereunder shall not be
impaired by Xxxxxx's sale, hypothecation or rehypotecation of any note of the
undersigned or any item of the Collateral, or by any indulgence, including
but not limited to (a) any renewal, extension, or modification which Holder
may grant with respect to the Indebtedness or any part thereof, or (b) any
surrender, compromise, release, renewal, extension, exchange, or substitution
which Holder may grant in respect of the Collateral, or (c) any indulgence
granted in respect of any endorser, guarantor, or surety. The purchaser,
assignee, transferee, or pledgee of this Note, the Collateral. and guaranty,
and any other document (or any of them), sold, assigned, transferred,
pledged, or repledged, shall forthwith become vested with the entitled to
exercise all the powers and rights given by this Note and all applications of
the undersigned to Holder or SBA, as if said purchaser, assignee, transferee,
or pledgee were originally named as Payee in this Note and in said
application or applications.
This promissory note is given to secure a loan which SBA is making or in
which it is participating and, pursuant to Part 101 0f the Rules and
Regulations of SBA (13 C.F.R. 101.1(d)), this instrument is to be construed
and (when SBA is the Holder or a party in interest) enforced in accordance
with applicable Federal law.
Borrower acknowledges that this Note is secured by a Deed of Trust in
favor of Lender on real property located in Los Angeles County, California.
That deed of trust contains the following due-on-sale provision: "Lender may,
at its option, declare immediately due and payable all sums secured by this
Deed of Trust upon the sale or transfer, without the Lender's prior written
consent, of all or any part of the Real Property, or any interest in the Real
Property. A "sale or transfer" means the conveyance of Real Property or any
right, title or interest therein; whether legal, beneficial or equitable;
whether voluntary or involuntary; whether by outright sale, deed, installment
sale contract, land contract, contract for deed, leasehold interest with a
term greater than three (3) years, lease-option contract, or by sale,
assignment, or transfer of any beneficial interest in or to any land trust
holding title to the Real Property, or by any other method of conveyance of
Real Property interest. If any Trustor is a corporation, partnership or
limited liability company, transfer also includes any change in ownership of
more than twenty-five (25%) of the voting stock, partnership interest or
limited liability company interests, as the case may be, of Trustor.
However, this option shall not be exercised by Lender if such exercise is
prohibited by applicable law."
And in accordance with all other terms and conditions as noted and set
out in Loan Authorization PLP 000-000-0000.
GENESIS MEDIA GROUP, INC.
By: /s/ Signature
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Xxxx X. El-Batrawi, President
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Note - Corporate applicants must execute Note, in corporate name, by duly
authorized officer, and seal must be affixed and duly attested: partnership
must execute Note in firm name, together with signature of a general partner.
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