EXHIBIT 10.11
NON-RECOURSE PROMISSORY NOTE
$100,000.00 San Jose, California
May 28, 1996
JOSEPH F JAHN AND NANCY L JAHN (each a "Maker", and collectively the "Makers"),
for value received, hereby jointly and severally promise to pay to Portola
Packaging, Inc., dba Cap Snap Co., a California corporation (the "Company" or
the "Beneficiary"), or order (the Company and any subsequent holder of this Note
being together referenced as the "Holder"), the sum of One Hundred Thousand
Dollars ($100,000.00) at the Company's executive offices in California, or at
such other place as Holder may from time to time designate in writing.
Satisfaction of this Note is limited to proceeds from the sale of the Property
hereinafter defined (i.e., payment resulting from enforcement of the rights of
the Holder under the Deed of Trust referenced in Section 3 below ("Deed of
Trust") relating to the parcel of real property described therein (the
"Property") and the Non-Recourse Loan Agreement of even date herewith between
the Makers and the Company ("Loan Agreement")), and neither Maker shall have any
personal liability under this Note.
1. INTEREST. Interest on this Note shall be computed and paid as
specified upon sale of the Property in accordance with the provisions of
Section 8.2.6 of the Loan Agreement, unless this Note is prepaid in accordance
with Section 5 below.
2. AMOUNTS DUE. Unless prepaid in accordance with Section 5 below, upon
payment of this Note the Company shall be entitled to payment of the full
principal amount hereof, to the extent of available funds, as provided in
Section 8.2.4 of the Loan Agreement.
3. DATE NOTE IS DUE. This Note shall be due and payable on the earliest
to occur of the following: (i) the sale of the Property; (ii) six (6) months
following the date JOSEPH F. JAHN ceases to be an employee of the Company for
any reason, including death, disability or retirement; (iii) JOSEPH F. JAHN
ceases to occupy the Property as his primary residence; or (iv) the sixth
anniversary of the date of this Note; provided, however, that if JOSEPH F. JAHN
should die or become disabled while he was employed by the Company, and while he
was occupying the Property as his primary residence, and prior to the sixth
anniversary of the date of this Note, this Note shall not be due and payable
until two years after such death or disability or until NANCY L. JAHN ceases to
occupy the Property as her primary residence, whichever first occurs.
NON-RECOURSE PROMISSORY NOTE
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4. METHOD AND TIME OF PAYMENT. This Note shall be paid at the time of
sale of the Property whether as a result of foreclosure under the Deed of Trust,
or as a result of a voluntary sale by Makers. At such date of sale, the Company
shall be entitled to receive the amounts set forth in the Loan Agreement. The
fact that this Note is due and payable on a date is intended to signify that the
Company may foreclose upon the Property under the Deed of Trust and cause it to
be sold, and upon such foreclosure sale to receive amounts set forth in the Loan
Agreement. Prior to the sixth anniversary of the date of this Note, Makers may
prepay this Note as set forth in Section 5 below; otherwise, this Note may only
be paid upon sale of the Property pursuant to the Deed of Trust or as a result
of a voluntary sale by Makers.
5. PREPAYMENT. This Note may be prepaid in full in one or more
installments on or before the sixth anniversary of the date of the Loan
Agreement and upon such payment the Holder shall not be entitled to receive the
amounts described in Sections 8.2.4 and 8.2.6 of the Loan Agreement. To prepay
the principal balance and interest of this Note, Makers shall make a payment
calculated in accordance with the following schedule:
Time period during Aggregate Principal
Which prepayment shall occur: and Interest:
- ----------------------------- -------------------
First year after the date of this Note 106% of the principal balance
Second year after the date of this Note 112.4% of the principal balance
Third year after the date of this Note 119.1% of the principal balance
Fourth year after the date of this Note 126.2% of the principal balance
Fifth year after the date of this Note 133.8% of the principal
balance
Sixth year after the date of this Note 141.8% of the principal balance
In order to exercise this prepayment option, Makers shall also be obliged to pay
concurrently herewith any amounts due to Holder under Section 9.1 of the Loan
Agreement.
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6. SECURITY; ACCELERATION PROVISION. This Note is secured by a Deed of
Trust of even date herewith executed by the Makers as Trustor to Stewart Title
of California, a California corporation, as Trustee. Such Deed of Trust
contains, among other things, a provision, which is hereby incorporated in this
Note that if the Trustor shall sell, convey, or alienate said property, or any
part thereof, or any interest therein, or shall be divested of his title or any
interest therein in any manner or way, whether voluntarily or involuntarily,
without the written consent of the Beneficiary being first had and obtained,
Beneficiary shall have the right, at its option, except as prohibited by law, to
declare any indebtedness or obligations secured by the Deed of Trust,
irrespective of the maturity date specified in any note evidencing the same,
immediately due and payable.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall be an
event of default ("Event of Default") hereunder:
7.1 The occurrence of a material breach by the Makers, or either of
them, under this Note or the Loan Agreement.
7.2 The occurrence of a default under the Deed of Trust.
8. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default
hereunder, the whole sum of principal and interest shall become immediately due
and payable at the option of the Holder.
9. GOVERNING LAWS. It is the intention of the parties hereto that the
internal laws of the State of California (irrespective of its choice of law
principles) shall govern the validity of this Note, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the
parties hereto. The parties hereby agree that any suit to enforce any provision
of this Note arising out of or based upon this Note shall be brought in the
United States District Court for the Northern District of California or the
Superior or Municipal Court for the County of Santa Clara, California. Each
party hereby agrees that such courts shall have in personam jurisdiction with
respect to such party, and each party hereby submits to the in personam
jurisdiction of such courts.
10. ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
part of this Note, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including, without limitation, costs, expenses and fees
on any appeal). The prevailing party shall be the party entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its
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costs shall not be entitled to recover attorneys' fees. No sum for
attorneys' fees shall be counted in calculating the amount of the judgment
for purposes of determining if a party is entitled to recover costs or
attorneys' fees.
DATED: May 28, 1996 /s/ Joseph F. Jahn
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Joseph F. Jahn
DATED: May 28, 1996 /s/ Nancy L. Jahn
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Nancy L. Jahn
/s/ Joseph F. Jahn
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By: Joseph F. Jahn
Attorney-in-Fact