Exhibit 10.3
SECURED PROMISSORY NOTE
$4,900,000.00 Las Vegas, Nevada
July 31, 2001
1. FUNDAMENTAL PROVISIONS.
The following terms will be used as defined
terms in this Note:
Payee and Holder: Las Vegas Golf Center, L.L.C., a Nevada limited
liability company
Maker: VCA Nevada Incorporated, an Arizona corporation
Principal Amount: Four Million Nine Hundred Thousand Dollars
($4,900,000.00)
Interest Accrual Date: February 1, 2002
Interest Rate: As stated in Paragraph 3 of this Note
Default Interest Rate: Fifteen percent (15%) per annum
Maturity Date: August 1, 2011
Business Day: Any day of the year other than Saturdays,
Sundays, or legal holidays.
Loan Documents: The Secured Promissory Note and a Deed of Trust
and Assignment of Rents executed in connection
with this Note. The Loan Documents reflect the
payment remaining due on the purchase by Maker
from Holder of the tenant's leasehold interest
in a 44-acre parcel of land (Property) now
developed with the Las Vegas Golf Center, with
Clark County, Nevada as the landlord (Lease).
The Lease has been amended in full by the First
Amendment in Total dated November, 2000 (Amended
Lease).
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Loan: The loan from Payee to Maker in the Principal
Amount and evidenced by this Note.
2. PROMISE TO PAY.
For value received, Maker promises to pay to the order of Holder, at the
office of Holder at 13924 Weddington Street, Sherman Oaks, CA 91401, or at such
other place as the Holder hereof may from time to time designate in writing, the
Principal Amount, together with accrued interest on the unpaid principal balance
at the Interest Rate.
3. INTEREST; PAYMENTS.
(a) Absent an Event of Default hereunder, the principal balance hereof
shall bear interest at the Interest Rate stated. Throughout the term
of this Note, interest shall be calculated on a 365-day year on the
unpaid balance of the Principal amount and, in all cases, shall be
computed for the actual number of days in the period for which
interest is charged, which period shall consist of 365 days on an
annual basis.
(b) All payments due hereunder shall be made (i) without deduction of any
present and future taxes, levies, deductions, charges or withholdings
which amounts shall be paid by Maker, and (ii) without any other set
off. Maker will pay the amounts necessary such that the amount of the
principal and interest received by the Holder hereof is not less than
that required by this Note.
(c) No interest shall accrue or be paid on this Note through January 31,
2002. Commencing on February 1, 2002 and continuing on the first day
of each calendar month thereafter until the Maturity Date, Maker shall
make monthly installments in the amounts as set forth in 3(f) below.
(d) One (1) final "balloon" payment of all unpaid principal, interest, and
any other amounts due hereunder shall be due and payable on the
Maturity Date.
(e) If any payment to be made by maker hereunder becomes due on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day.
(f) Payments shall be paid on the Note in the following amounts.
1. From February 1, 2002 through August 1, 2003, an interest-only
monthly payment, calculated at six percent (6%) annual interest,
of $24,500.00 per month.
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2. From September 1, 2003 through August 1, 2004, an interest-only
monthly payment, calculated at seven percent (7%) annual
interest, of $28,583.33 per month.
3. From September 1, 2004 through August 1, 2006, an interest-only
monthly payment, calculated at eight percent (8%) annual
interest, of $32,666.67 per month.
4. From September 1, 2006 through July 1, 2011 a principal and
interest payment, calculated at twelve percent (12%) annual
interest and based on a constant payment twenty (20) year
amortization, of $53,953.22 per month.
5. All of the remaining balance due on the Note on August 1, 2011.
4. PREPAYMENT.
Maker shall have the right to prepay the Principal Amount, or any portion
thereof, without premium or penalty, provided that Maker shall provide the
Holder with at least five (5) days prior written notice of Maker's intent to
make any prepayment.
5. LAWFUL MONEY.
Principal and interest are payable in lawful money of the United States of
America.
6. APPLICATION OF PAYMENTS/LATE CHARGE.
(a) Absent the occurrence of an Event of Default hereunder any payments
received by the Holder shall be applied first to sums, other than
principal and interest, due the Holder, next to the payment of all
interest accrued to the date of such payment, and the balance, if any,
to the payment of principal. Any payments received by the Holder after
the occurrence of an Event of Default shall be applied to the amounts
specified in this Paragraph 6 (a) in such order as the Holder may, in
its sole discretion, elect.
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(b) If any payment of interest and/or principal is not received by the
Holder when such payment is due, then in addition to the remedies
conferred upon the Holder pursuant to Paragraph 9, (i) a late charge
of two percent (2%) of the amount of the installment due and unpaid
will be added to the delinquent amount to compensate the Holder for
the expense of handling the delinquency but only for any payment past
due in excess of fifteen days (15) days, regardless of any notice and
cure periods, and (ii) the amount due and unpaid (including, without
limitation, the late charge) shall bear interest at the Default
Interest Rate, computed from the date on which the amount was due and
payable until paid unless Section 9 is applicable.
7. SECURITY.
This Note is secured by a Deed of Trust and Assignment of Rents (Deed of
Trust) between Holder and Maker of this date.
8. EVENT OF DEFAULT.
The occurrence of any of the following shall be deemed to be an event of
default (Event of Default) hereunder:
(a) default in the payment of principal or interest when due and failure
to cure such default within the applicable grace period; or
(b) the occurrence of a default under the Deed of Trust.
9. REMEDIES.
Upon the occurrence of an Event of Default then at the option of the
Holder, the entire balance of principal together with all accrued interest
thereon, and all other amounts payable by Maker under the Note shall, without
demand or notice, immediately become due and payable. Upon the occurrence of an
Event of Default, (and so long as such Event of Default shall continue), the
entire balance of principal hereof, together with all accrued interest thereon,
all other amounts due under the Loan Documents, and any judgment for such
principal, interest, and other amounts shall bear interest at the Default
Interest Rate from the date of the last interest payment, subject to the
limitations contained in paragraph 14 hereof. No delay or omission on the part
of the Holder hereof in exercising any right under this Note or Deed of Trust
shall operate as a waiver of such right.
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10. WAIVER.
Maker hereby waives diligence, demand for payment, presentment for payment,
protest, notice of nonpayment, and all other notices or demands of any kind
(except notices specifically provided for in the Deed of Trust) and expressly
agrees that, without in any way affecting the liability of Maker, the Holder
hereof may extend any maturity date or the time for payment of any installment
due hereunder or otherwise modify the Note or Deed of Trust.
11. CHANGE, DISCHARGE, TERMINATION, OR WAIVER.
No provision of this Note may be changed, discharged, terminated, or waived
except in writing signed by the party against whom enforcement of the change,
discharge, termination or waiver is sought. No failure on the part of the Holder
hereof to exercise and no delay by the Holder hereof in exercising any right or
remedy under this Note or under the law shall operate as a waiver thereof.
12. ATTORNEYS' FEES.
If this Note is not paid when due or if any Event of Default occurs, Maker
promises to pay all costs of enforcement and collection, including but not
limited to, reasonable attorneys' fees.
13. SEVERABILITY.
If any provision of this Note is unenforceable, the enforceability of the
other provisions shall not be affected and they shall remain in full force and
effect.
14. INTEREST RATE LIMITATION.
Maker hereby agrees to pay an effective rate of interest that is the sum of
the interest rate provided for herein, together with any additional rate of
interest resulting from any other charges of interest or in the nature of
interest paid or to be paid in connection with the Note. Holder and Maker agree
that none of the terms and provisions contained herein or in any of the Loan
Documents shall be construed to create a contract for the use, forbearance or
detention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by the laws of the State of
Nevada. In such event, if any Holder of this Note shall collect monies which are
deemed to constitute interest which would otherwise increase the effective
interest rate on this Note to a rate in excess of the maximum rate permitted to
be charged by the laws of the State of Nevada, all such sums deemed to
constitute interest in excess of such maximum rate shall, at the option of the
Holder, be credited to the payment of other amounts payable under the Loan
Documents or returned to Maker.
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15. NUMBER AND GENDER.
In this Note the singular shall include the plural and the masculine shall
include the feminine and neuter gender, and vice versa.
16. HEADINGS.
Headings at the beginning of each numbered section of this Note are
intended solely for convenience and are not part of this Note.
17. CHOICE OF LAW.
This Note shall be governed by and construed in accordance with the laws of
the State of Nevada without giving effect to conflict of laws principles.
Exclusive jurisdiction on all litigation will be in the Superior Court of Clark
County, Nevada.
18. INTEGRATION.
The Note and Deed of Trust contain the complete understanding and agreement
of the Holder and Maker and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations.
19. BINDING EFFECT.
The Loan Documents will be binding upon, and inure to the benefit of, the
Holder, Maker, and their respective successors and assigns.
20. TIME IS OF THE ESSENCE.
Time is of the essence with regard to each provision of the Loan Documents
as to which time is a factor.
MAKER
VCA NEVADA INCORPORATED, a
Nevada corporation
By:
-------------------------------------
Joseph P. Martori
Its: Chairman
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