PROMISSORY NOTE
Exhibit 10.3
(b)
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Loan
No.: _____________
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____________,
2008
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|
Redwood
City, California
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FOR VALUABLE CONSIDERATION,
______________, (herein "Maker"), hereby promises to pay to REDWOOD MORTGAGE
INVESTORS IX, LLC a Delaware limited liability company, or order (herein
"Payee"), at the address set forth below, or at such other address as the holder
hereof may from time to time designate, the sum of _______________ DOLLARS AND
NO/100 ($______________), with interest on the unpaid balance of the principal
sum disbursed by Payee to or for the account of Maker at the interest rate
specified below.
1. Interest and
Payments
(a) Fixed
Rate Interest. Maker agrees that fixed interest earned by and
payable to Payee hereunder (“Interest”) shall be equal to _______ percent
(_____%) per year of the principal sum disbursed by Xxxxx. Interest
shall be calculated for actual days elapsed on the basis of a 360-day year,
which results in higher interest payments than if a 365-day were
used.
(b) Payments. Interest
only shall be payable by Maker from the date of disbursement of funds by Xxxxx,
with the Interest for the period through ______, 2008, due and payable upon
execution and delivery of this Note. Beginning on __________, 2008,
and on the first day of each consecutive month thereafter until the Maturity
Date (as defined below), Maker shall make monthly payments of Interest
only. All payments received shall be credited first to costs, then to
Interest, and last to principal due hereunder.
2. Maturity
Date. The outstanding principal balance of this Note and all
accrued but unpaid Interest shall be due and payable in full on ____________
(“Maturity Date”).
3. Prepayment. The right is reserved by
Maker to prepay the outstanding principal amount in whole or in part together
with accrued Interest thereon. All prepayments shall be applied to
the most remote principal installments then unpaid under this Note.
4. Late
Charge. If Payee fails to
receive any payments of Interest or principal within ten (10) days after the
date the same is due and payable, a late charge to compensate Payee for damages
Payee will suffer as a result shall be immediately due and
payable. Maker recognizes that a default by Maker in making the
payments agreed to be paid when due will result in Xxxxx's incurring additional
expenses in servicing the loan, including, but not limited to, sending out
notices of delinquency, computing interest, and segregating the delinquent sums
from not delinquent sums on all accounting, loan and data processing records, in
loss to Payee of the use of the money due, and in frustration to Payee in
meeting its other financial commitments. Maker agrees that if for any
reason Maker fails to pay any amounts due under this Note so that Xxxxx fails to
receive such payments within ten (10) days after the same are due and payable,
Payee shall be entitled to damages for the detriment caused thereby, but that it
is extremely difficult and impractical to ascertain the extent of such
damages. Maker therefore agrees that a sum equal to $.06 for each
$1.00 of each payment that becomes delinquent ten (10) days after its due date,
is a reasonable estimate of the fair average compensation for the loss and
damages Payee will suffer, that such amount shall be presumed to be the amount
of damages sustained by Xxxxx in such case, and that Maker agrees to pay Payee
this sum on demand.
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5. Default. If there exists
any Event of Default, as defined below, under the terms of this Note or under
the terms of the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing ("Deed of Trust") dated on or about the date of
this Note executed by Maker to PLM Lender Services, Inc., a California
corporation, as Trustee, for the use and benefit of Payee covering and relating
to the interest of Maker in the property particularly described in Exhibit A to
the Deed of Trust (“Property”) or any other document executed in connection with
this Note (herein called "Loan Documents"), Payee or the holder hereof is
expressly authorized without notice or demand of any kind to make all sums of
Interest and principal and any other sums owing under this Note immediately due
and payable and to apply all payments made on this Note or any of the Loan
Documents to the payment of any such part of any Event of Default as it may
elect.
An Event of Default shall be either:
(1) a default in the payment of the whole or in any part of the several
installments of this Note when due, or (2) any of the Events of Default
contained in any of the Loan Documents. At any time after an Event of
Default the entire unpaid balance of principal, together with Interest accrued
thereon, shall, at the option of the legal holder hereof and without notice
(except as specified in any Loan Documents) and without demand or presentment,
become due and payable at the place of payment. Anything contained
herein or in any of the Loan Documents to the contrary notwithstanding, the
principal balance together with accrued Interest thereon so accelerated and
declared due as aforesaid shall continue to bear Interest and shall include
compensation for late payments on any and all overdue installments as described
above.
If an Event of Default has occurred,
the failure of Payee or the holder hereof to promptly exercise its rights to
declare the indebtedness remaining unpaid hereunder to be immediately due and
payable shall not constitute a waiver of such rights while such Event of Default
continues nor a waiver of such right in connection with any future Event of
Default.
Maker hereby waives presentment for
payment, protest and demand, and notice of protest, demand, dishonor, nonpayment
and nonperformance including notice of dishonor with respect to any check or
draft used in payment of any sum due hereunder.
6. Legal
Limits. All agreements
between Maker and Payee are hereby expressly limited so that in no event
whatsoever, whether by reason of deferment in accordance with this Note or under
any agreement or by virtue of the advancement of the loan proceeds, acceleration
or maturity of the loan, or otherwise, shall the amount paid or agreed to be
paid to the Payee for the loan, use, forbearance or detention of the money to be
loaned hereunder or to compensate Payee for damages to be suffered by reason of
a late payment hereof, exceed the maximum permissible under applicable
law. If, from any circumstances whatsoever, fulfillment of any
provision hereof, or of any provision in any of the Loan Documents at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, ipso facto the obligations
to be fulfilled shall be reduced to the limit of such validity. This
provision shall never be superseded or waived and shall control every other
provision of all agreements between Maker and Payee.
7. Attorneys'
Fees. If an action is instituted on this Note, or if any other
judicial or non-judicial action is instituted by the holder hereof or by any
other person, and an attorney is employed by the holder hereof to appear in any
such action or proceeding or to reclaim, sequester, protect, preserve or enforce
the holder's interest in the real property security or any other security for
this Note, including, but not limited to, proceedings to foreclose the loan
evidenced hereby, proceedings under the United States Bankruptcy Code, or in
eminent domain, or under the probate code, or in connection with any state or
federal tax lien, or to enforce an assignment of rents, or for the appointment
of a receiver, the Maker and every endorser and guarantor hereof and every
person who assumes the obligations evidenced by this Note and the Loan
Documents, jointly and severally promise to pay reasonable attorney's fees for
services performed by the holder's attorneys, and all costs and expenses
incurred incident to such employment. If Maker is the prevailing
party in any action by Maker pursuant to this Note, Payee shall pay such
attorneys fees as the court may direct.
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8. Interest
After Expiration or Acceleration. If the entire
balance of principal and accrued Interest is not paid in full on the Maturity
Date or upon acceleration of this Note as provided in paragraphs 5 above or 10
below, without waiving or modifying in any way any of the rights, remedies or
recourse Payee may have under this Note or under any of the Loan Documents by
virtue of this default, the entire unpaid balance of principal and accrued
Interest shall bear interest from the Maturity Date or the date of acceleration
until paid in full at the higher of: (a) eighteen percent (18%) per annum; or
(b) a fluctuating rate per annum at all times equal to the Discount Rate of the
Federal Reserve Bank of San Francisco (“Discount Rate”) plus _______ percent
(_____%) (“Maturity Interest Rate”). If at any time the Discount Rate
(or any previously substituted alternative index) is no longer available, is
unverifiable, or is no longer calculated in substantially the same manner as
before, then Payee may, in its sole and absolute discretion, select and
substitute an alternative index over which Payee has no control. In
addition, the holder hereof shall have any and all other rights and remedies
available at law or in equity or under the Deed of Trust.
9. Security. This Note is
secured by and is entitled to the benefits of the Deed of Trust. The
provisions of the Deed of Trust are incorporated herein by reference as if set
forth in full, and this Note is subject to all of the covenants and conditions
therein contained.
10. Acceleration. Without limiting
the obligations of Maker or the rights and remedies of Payee or the holder
hereof under the terms and covenants of this Note and the Deed of Trust, Maker
agrees that Payee shall have the right, at its sole option, to declare any
indebtedness and obligations hereunder or under the Deed of Trust, irrespective
of the Maturity Date specified herein, due and payable in full
if: (1) Maker or any one or more of the tenants-in-common, joint
tenants, or other persons comprising Maker sells, enters into a contract of
sale, conveys, alienates or encumbers the Property or any portion thereof or any
fractional undivided interest therein, or suffers Maker's title or any interest
therein to be divested or encumbered, whether voluntarily or involuntarily, or
leases with an option to sell, or changes or permits to be changed the character
or use of the Property, or drills or extracts or enters into a lease for the
drilling for or extracting of oil, gas or other hydrocarbon substances or any
mineral of any kind or character on the Property; (2) The interest of any
general partner of Maker (or the interest of any general partner in a
partnership that is a partner) is assigned or transferred; (3) If Maker is a
corporation or partnership, more than twenty-five percent (25%) of the corporate
stock of Maker (or of any corporate partner or other corporation comprising
Maker) is sold, transferred or assigned; (4) There is a change in beneficial
ownership with respect to more than twenty-five percent (25%) of Maker (if Maker
is a limited liability company, trust or other legal entity) or of any partner
or tenant-in-common of Maker which is a limited liability company, trust or
other legal entity; or (5) a default has occurred hereunder or under any Loan
Document and is continuing. In such case, Payee or other holder of
this Note may exercise any and all of the rights and remedies and recourses set
forth in the Deed of Trust and as granted by law. Maker and any
successor who acquires any record interest in the Property agrees to notify
Xxxxx promptly in writing of any transaction or event described in this
section.
11. Governing
Law and Severability. This Note is made
pursuant to, and shall be construed and governed by, the laws of the State of
California. If any paragraph, clause or provision of this Note or any
of the Loan Documents is construed or interpreted by a court of competent
jurisdiction to be void, invalid or unenforceable, such decision shall affect
only those paragraphs, clauses or provisions so construed or interpreted and
shall not affect the remaining paragraphs, clauses and provisions of this Note
or the other Loan Documents.
12. Time of
Essence. Time is of the
essence of this Note.
13. Payment
Without Offset. Principal and
Interest shall be paid without deduction or offset in immediately available
funds in lawful money of the United States of America. Payments shall
be deemed received only upon actual receipt by Xxxxx and upon Xxxxx's
application of such payments as provided herein.
14. Notices. All notices under
this Note shall be in writing and shall be effective upon personal delivery to
the authorized representatives of either party or upon being sent by certified
or first class mail, postage prepaid, addressed to the following respective
parties as follows:
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MAKER: _____________________
_____________________
_____________________
Attn: ________________
000 Xxxxxxxx Xxxx., Xxxxx
#000
Redwood City, California
94063-1743
Attn: Xxxxxxx
Xxxxxxx
15. Collection. Any remittances
by check or draft may be handled for collection in accordance with the practices
of the collecting party and any receipt issued therefor shall be void unless the
amount due is actually received by Payee.
16. Assignment. Payee or other
holder of this Note may assign all of its rights, title and interest in this
Note to any person, firm, corporation or other entity without the consent of
Maker.
17. Relationship. The relationship
of the parties hereto is that of borrower and lender and it is expressly
understood and agreed that nothing contained herein or in any of the Loan
Documents shall be interpreted or construed to make the parties partners, joint
venturers or participants in any other legal relationship except for borrower
and lender.
18. Remedies. No right, power
or remedy given Payee by the terms of this Note, or in the Loan Documents is
intended to be exclusive of any right, power or remedy, and each and every such
right, power or remedy shall be cumulative and in addition to every other right,
power or remedy given to Payee by the terms of any of the Loan Documents or by
any statute against Maker or any other person. Every right, power and
remedy of Payee shall continue in full force and effect until such right, power
or remedy is specifically waived by an instrument in writing, executed by
Xxxxx.
19. Joint and
Several Liability. If Maker is composed of more than one
person, then each person comprising Maker shall be jointly and severally liable
for the obligations, covenants and agreements created by or arising out of this
Note.
20. Headings. The subject
headings of the paragraphs of this Note are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of its
provisions.
Maker: ____________________________
____________________________
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