PROMISSORY NOTE
Exhibit 10.3
(a)
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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 outstanding principal amount
disbursed beginning on the date of disbursement of funds 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 Payee
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.
5. Default. If there exists
any Event of Default, as defined below, under the terms of this Note or under
the terms of the Construction Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing ("Deed of Trust"), 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.
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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, or disputes
regarding the proper disbursement of construction loan funds, 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.
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 a the higher of: (a) eighteen percent (18%) per
annum; or (b) a fluctuating rate per annum at all times equal to the Discount
Rate established by 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.
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9. Security. This Note is
secured by and is entitled to the benefits of the 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”). 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) 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 partnership, limited liability
company, trust or other legal entity) or of any partner or tenant-in-common of
Maker which is a partnership, 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 served in person or by first class or
certified mail addressed to the following respective parties as
follows:
MAKER: ______________________
______________________
______________________
Attn: __________________
000 Xxxxxxxx Xxxx., Xxxxx
#000
Redwood City, California
94063-1743
Attn: Xxxxxxx
Xxxxxxx
Any such
notice or demand so served by first class or certified mail shall be deposited
in the United States mail, with postage thereon fully prepaid and addressed to
the party so to be served at its address above stated or at such other address
of which said party shall have theretofore notified in writing, as provided
above, the party giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery or the
expiration of three business days after the date of mailing, whichever is the
earlier in time.
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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 Maker and Payee 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 Maker and
Payee.
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. 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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