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EXHIBIT 10.1
PROMISSORY NOTE
$3,100,000 April 19, 1990
FOR VALUE RECEIVED, the undersigned, FRED C. SANDS, an individual
having an address at 11611 San Vincente Boulevard, Los Angeles, California
90049 (the "Maker"), promises to pay to the order of Western Host Sacramento
Partners, a California Limited Partnership, and its successors and assigns (the
"Payee"), at 21031 Ventura Boulevard, Suite 315, Woodland Hills, California
91364, or at such other place as the holder hereof may from time to time
designate in writing, the principal amount of Three Million One Hundred
Thousand and No/100 Dollars ($3,100,000.00), together with interest thereon
from the date hereof (i) at the rate of Eight Percent (8%) per annum from the
date hereof through the last day of March, 1995, and (ii) at the rate of Ten
Percent (10%) per annum from April 1, 1995, to the maturity date of this Note.
Payments under this Note shall be made, without setoff, deduction or
counterclaim, as follows:
(i) On May 1, 1990, the undersigned shall pay to the
Payee a payment of interest only in the amount of Eight Thousand One Hundred
Fifty-Three and Forty-Two Cents Dollars ($8,153.42).
(ii) Commencing on June 1, 1990, and on the first of each
and every succeeding month through and including April 1, 1995, the undersigned
shall pay to the holder hereof equal monthly installments of interest only in
the amount of Twenty Thousand Six Hundred Sixty-Six Dollars and Sixty-Six Cents
($20,666.66).
(iii) Commencing on May 1, 1995, and on the first day of
each succeeding month through and including April 1, 1997, the undersigned
shall pay to the holder hereof equal monthly installments of interest only in
the amount of Twenty-Five Thousand Eight Hundred Thirty-Three Dollars and
Thirty-Three Cents ($25,833.33).
(iv) On April 1, 1997, the entire outstanding principal
balance of this Note, together with all accrued and unpaid interest shall be
due and payable.
The undersigned may at any time and from time to time prepay the whole
or any part of this principal amount hereof, without premium or penalty of any
kind whatsoever, provided that (i) on each prepayment date, all interest
accrued on the principal so prepaid to the date of such prepayment shall be
paid, and (ii) partial prepayments shall be applied to the installments of
accrued interest and then to principal.
All payments hereunder shall be applied first to interest and then to
reduction of principal.
THIS PROMISSORY NOTE IS SUBJECT TO THE TERMS OF CERTAIN NEGATIVE
COVENANTS FOR THE BENEFIT OF WELLS FARGO BANK, N.A., PURSUANT TO THE
TERM LOAN AGREEMENT DATED AS OF MAY 22, 1990.
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This Note is secured by a certain Security Agreement and a certain
Deed of Trust and Security Agreement, each of even date herewith, encumbering
certain real and personal property located in the County of Sacramento, State
of California, and by any other instruments, now or hereafter executed by the
undersigned in favor of the holder hereof, which in any manner constitute
additional security for this Note (all of which are hereinafter called the
"Security Documents").
The occurrence of any of the following events shall constitute a
default under this Note:
(a) the failure of Maker to make any payment of interest
or principal due under this Note within five (5) days after the same becomes
due and payable; or
(b) the occurrence of a default under any of the Security
Documents.
Upon the occurrence of a default, as defined above, the holder of this
Note shall have, at its option, the right, without further notice or demand, to
declare the unpaid principal, plus all accrued and unpaid interest thereon,
immediately due and payable, and exercise any of the remedies granted hereunder
or under any of the Security Documents. Upon the occurrence of a default
under this Note, the principal indebtedness evidenced by this Note shall bear
interest at the lesser of Thirteen Percent (13%) per annum, or the maximum
amount permitted by laws (the "Default Rate"). The Default Rate shall continue
in effect until the payment in full of the entire indebtedness evidenced by
this Note. Failure by the holder of this Note to exercise the foregoing option
shall not constitute a waiver of the right to exercise such option at any
subsequent time in respect to the same event or any other event of default.
The undersigned, and each and every endorser of this Note, waives
notice of acceptance, presentment for payment, demand, notice of demand and of
nonpayment, protest and notice of protest or dishonor, and diligence in
bringing suit. The undersigned agrees that any extension of time of payment of
all or any part of the amount due hereunder or any variation, modification or
waiver of any term or condition thereof at any time or times shall not affect
its liabilities hereunder. Any forbearance of the holder of this Note in
exercising any right or remedy hereunder or under the Security Documents, or
otherwise afforded by applicable law, shall not constitute a waiver by the
holder of this Note of any right to declare default hereunder or to pursue any
remedy available at law or in equity.
In the event the undersigned fails to make payment within five (5)
days after the date any amount hereunder is due and payable, by reason of
acceleration or otherwise, and the holder hereof places this Note in the hands
of an attorney for collection (which term shall include collection in
connection with any bankruptcy or insolvency proceedings), then the undersigned
promises to pay the reasonable fees and expenses of such attorney in addition
to the full amount due hereunder (whether or not litigation shall be commenced
in aid thereof).
The undersigned shall have no personal liability for (i) repayment of
the principal and interest on the loan evidenced by this Note or (ii) the other
monetary obligations under this Note or under the Security Documents, and no
person shall be entitled to bring or maintain any suit,
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action, or other proceeding for personal judgment against the undersigned
therefor, it being understood that the holder hereof will look, insofar as the
undersigned is concerned, solely to the property and collateral which is the
subject of the Security Documents for the satisfaction of such obligations and
no other property of the undersigned shall be subject to levy, execution or
other enforcement procedure for the satisfaction of such obligations and no
suit, action or other proceeding seeking payment for any deficiency upon a
foreclosure or other sale of the real estate of other collateral described in
the Security Documents shall be sought.
If the undersigned shall, directly or indirectly, sell, enter into a
contract of sale, convey, whether voluntarily or involuntarily, or lease with
an option to purchase any of the property described in any of the Security
Documents, or any interest therein, other than personal property sold in the
ordinary course of business and replaced by personal property of equal or
better quality, and of similar function, Beneficiary may then, or at any time
thereafter, declare the entire principal balance of this Note and all accrued
but unpaid interest immediately due and payable. Notwithstanding anything to
the contrary, Maker may sell or otherwise transfer the Premises to an entity
which is at least eighty percent (80%) owned and controlled by Maker; provided,
however, that any such sale or transfer shall not relieve Maker of his
obligations hereunder.
All notices and other communications hereunder shall be given to the
undersigned and to Payee at the addresses of such parties set forth in the
first paragraph of this Note. All such notices an communications shall be in
writing and shall be deemed to have been given and made upon the date of
delivery (if delivered personally or by facsimile transmission), or if mailed
and sent by registered or certified mail, return receipt requested, postage
prepaid and addressed as specified in this paragraph, on the third (3rd)
business day after deposit in a regularly maintained receptacle for the deposit
of United States mail. Any party may change its address by written notice in
accordance with this paragraph. A copy of any notice to Payee shall be sent by
regular first class mail, postage prepaid, to Jeffrey C. Lapin, Esq., 21031
Ventura Boulevard, Suite 315, Woodland Hills, California 91364.
The undersigned has executed this Note in the State of California, and
its laws shall govern and control the construction, enforceability, validity
and interpretation of this Note.
In the event that any term or provision of this Note is determined by
a court of competent jurisdiction to be illegal, invalid or unenforceable for
any reason whatsoever, such illegality, invalidity or unenforceability shall
not affect the balance of the terms and provisions of this Note, which shall
remain in full force and effect.
This Note shall bind the successors and assigns of the undersigned,
and shall inure to the benefit of the successors and assigns of the Payee
hereof.
This Note is fully negotiable by payee or any other holder of this
Note, and any negotiation or transfer hereof shall not affect the rights and
duties pertaining hereto. If Payee shall receive a written offer to purchase
this Note, which offer is acceptable to Payee in Payee's sole discretion, Payee
shall give the undersigned written notice of such offer and all of the terms of
such offer. The undersigned shall have a right of first refusal to purchase
the Note on all of the terms set forth in such offer, such right to be
exercised, if at all, by the delivery to Payee
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within three (3) business days following the date Payee gives the undersigned
notice of such offer, of written notice exercising such right of first refusal
together with all sums and documents required pursuant to the terms of the
offer. The undersigned's right of first refusal shall extend only to the
negotiation by Payee of this Note and shall not apply to the negotiation of the
Note by any other holder hereof.
FRED C. SANDS
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Fred C. Sands