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EXHIBIT 10.3
PROMISSORY NOTE
$300,000.00 Houston, Texas April 7, 1997
FOR VALUE RECEIVED, the undersigned, Watermarc Food Management Co., a Texas
corporation ("Maker") hereby promises to pay to the order of United Central
Bank ("Payee"), at its offices at 8585 South Gessner, Houston, Texas
77074-9826, as provided herein, in lawful money of the United States of
America, the principal sum of Three Hundred Thousand and No/100 Dollars
$300,000.00, or so much thereof as shall be advanced and outstanding hereunder,
together with interest on the outstanding principal balance hereof, at a
varying rate per annum which shall from day to day prior to maturity be equal
to the lessor of (a) the maximum rate permitted by applicable law as the same
exists from day to day during the term hereof ("Maximum Rate"), including, as
to Article 5069-1.04. Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling", calculated on a
365 day or 366 day year, as applicable or (b) the sum of the Base Rate
(hereinafter defined) in effect from day to day, based on a 360 day year and
the actual number of days elapsed, unless such calculation would result in a
usurious rate, in which case interest shall be calculated on a per annum basis
of a year of 365 or 366 days, as the case may be, each such change in the rate
of interest, charged hereunder to become effective, without notice to Maker, on
the effective date of each change in the Base Rate; provided however, if any
time the rate of interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Base Rate will not reduce
the rate of interest hereon below the Maximum Rate until the total amount of
interest accrued hereon equals the amount of interest which would have accrued
hereon if the rate specified in clause (b) preceding had at all times been in
effect.
The Note is payable as follows:
Payments of principal and accrued interest, in the amount of $5,004.02
each, shall be due and payable in consecutive monthly installments
beginning one month from the date hereof and continuing regularly monthly
thereafter until the date which is eighty four (84) months from the date
hereof, at which time the entire balance of this Note, being principal and
accrued interest shall be due and payable in full. Interest will be
calculated on the unpaid principal to the date of each installment paid.
Payments will be credited first to the accrued interest and then to the
reduction of principal.
Payee has the right to raise or lower the monthly payment so as to maintain
the principal balance within the stated maturity.
All past due principal and interest shall bear interest at the Maximum
Rate. As used herein, the term "Base Rate" means at the time of determination
thereof the prime commercial lending rate per annum as quoted by United Central
Bank at its principal office in Houston, Texas as in effect from time to time,
with the understanding that the Base Rate may be one of several base rates and
serves as a basis upon which effective rates are from time to time calculated
for loans by making reference thereto and may not be the lowest of the base
rates of United Central Bank.
In the event that any payment, installment or amount due hereunder
continues unpaid for more than ten (10) days following the date such payment is
due, including Saturdays, Sundays and holidays, Maker agrees to pay Holder a
late charge in the amount of five percent (5%) of such past due payment,
installment or amount due; however, nothing in this paragraph shall be
construed to allow Holder to charge or collect interest in excess of the
Maximum Rate. Such late charge shall be due and payable upon demand, however,
only one late charge shall be paid for each late payment, installment or amount
due.
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INITIALED FOR
IDENTIFICATION
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In the event that more than twenty (20%) percent of the outstanding
principal balance of this Note is prepaid, either voluntarily or through an
acceleration of the maturity date of the Note due to an event of default
hereunder or under the Deed of Trust, or any other document or instrument
securing this Note at any time prior to the first anniversary hereof. Maker
shall pay to Payee a prepayment penalty equal to three percent (3.00%) of the
amount of the prepayment; or should such prepayment be made following the first
anniversary hereof, but prior to the second anniversary hereof, Maker shall pay
to Payee a prepayment penalty equal to two percent (2.00%) of the amount of the
prepayment or should such prepayment be made following the second anniversary
hereof, but prior to the third anniversary hereof, Maker shall pay to Payee a
prepayment penalty equal to one percent (1.00%) of the amount of the
prepayment.
Notwithstanding anything to the contrary contained herein, no provisions of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by
any court of competent jurisdiction, any such excess shall be applied as a
payment and reduction of the principal of indebtedness evidenced by this Note;
and, if the principal amount hereof has been paid in full, any remaining excess
shall forthwith be paid to Maker.
If default be made in the payment of principal or interest under this Note,
or upon the occurrence of any other Event of Default, as such term is defined
in the Deed of Trust (as hereinafter defined), the holder hereof may, at its
option, declare the entire unpaid principal of and accrued interest on this
Note immediately due and payable without additional notice, demand or
presentment, all of which are hereby waived, and upon such declaration, the same
shall become and shall be immediately due and payable, and the holder hereof
shall have the right to foreclose or otherwise enforce all liens or security
interests securing payment hereof, or any part hereof, and offset against this
Note any sum or sums owed by the holder hereof to Maker. Failure of the holder
hereof to exercise this option shall not constitute a waiver of the right to
exercise the same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce payment
of all or any part or installment of any sum due the holder hereunder, or if
this Note is placed in the hands of an attorney for collection, or if it is
collected through any legal proceedings, Maker agrees to pay all reasonable
collection costs and fees incurred by the holder, including reasonable
attorney's fees.
THIS NOTE IS PERFORMABLE IN HOUSTON, HARRIS COUNTY, TEXAS, AND MAKER AND
EACH SURETY, GUARANTOR, ENDORSER AND OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY
SUMS OF MONEY PAYABLE ON THIS NOTE, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE
SUED HEREON ELSEWHERE. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. MAKER AND EACH SUCH OTHER PARTY HEREBY IRREVOCABLY
(I) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (II) WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION
OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO BRING ANY ACTION OR
PROCEEDING AGAINST MAKER OR ANY OTHER PARTY LIABLE HEREUNDER OR WITH RESPECT TO
ANY COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER JURISDICTION. ANY
ACTION OR PROCEEDING BY MAKER OR ANY OTHER PARTY LIABLE HEREUNDER AGAINST PAYEE
SHALL BE BROUGHT ONLY IN A COURT LOCATED IN HARRIS COUNTY, TEXAS.
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INITIALED FOR
IDENTIFICATION
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Maker and surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive
presentment and demand for payment, protest, notice of protest and non-payment
or dishonor, notice of acceleration or intent to accelerate, notice of intent
to demand, diligence in collecting, and grace, and consent aid all extensions
notice for and period or periods of time and partial payments, before or after
maturity, without prejudice to the holder. The holder shall similarly have the
right to deal in any way, any time, with one or more of the foregoing parties
without notice to any other party, and to grant any such party any extensions
of time for payment of any of said indebtedness, or to release part or all of
the collateral securing this Note, or grant any other indulgence or forbearance
whatsoever, without notice to any other party and without in any way affecting
the personal liability of any party hereunder.
This Note is entitled to the benefit of, among other documents, a valid and
perfected first lien security interest in and to certain real property
described in the Deed of Trust securing same being executed by GMB Consulting,
Inc., a Texas corporation for the benefit of Payee; Security Agreement executed
by The Original Pasta Co., a Texas corporation; UCC-1 Financing Statement(s);
Guaranty Agreement(s) executed by The Original Pasta Co., a Texas corporation,
Ghulam Bombaywala and Shaheen S. Bombaywala, each of the foregoing being
executed of even date herewith.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EXECUTED CONTEMPORANEOUSLY WITH THIS
NOTE REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
MAKER:
WATERMARC FOOD MANAGEMENT CO.,
A TEXAS CORPORATION
By: /s/ THOMAS J. BUCKLEY
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Thomas J. Buckley, Chief Financial Officer
and Secretary
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