CONSTRUCTION PROMISSORY NOTE
AMOUNT $5,000,000.00 DATE: OCTOBER 4, 1994
FOR VALUE RECEIVED, VCA South Bend Incorporated. an Arizona Corporation
("Maker"), promises to pay to Bennett Funding International, Ltd., a New York
corporation ("Lender"), or order, at Two Clinton Square, Syracuse, New York
13202, or at such other place as the holder of this Construction Promissory Note
("Holder") may from time to time designate in writing, in lawful money of the
United States of America, the principal sum of Five Million Dollars
($5,000,000.00) or so much thereof as has been disbursed and not repaid,
together with interest on the unpaid principal balance from time to time
outstanding until paid, as more fully provided for below ("Note").
Concurrently with the execution and delivery of this Note, Maker and
Lender executed and entered into a Construction Loan Agreement and Construction
Mortgage and Security Agreement (collectively the "Agreement"). As a condition
precedent to entering into the Agreement, and in consideration therefor, Maker
agreed to execute and deliver this Note with respect to the method and manner in
which the Construction Loan is to be repaid from and after the date hereof.
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Agreement, the applicable provisions of which
are incorporated herein by reference.
A. Interest.
Interest shall be due and payable monthly in arrears, shall accrue
daily on the basis of a 360-day year and actual days elapsed and shall accrue
from the date hereof. During the term of this Note, interest shall accrue at a
rate per annum equal to thirteen percent (13%). In no event shall any interest
rate to be charged exceed the maximum contract rate permitted under the
applicable Usury Law.
If all or any portion of any Interest Installment (as hereinafter
defined) is not actually received by Holder from Maker within ten (10) days
following the Installment Date that such Interest Installment is due, Maker
shall pay on demand to Holder a late charge of two percent (2%) of the amount of
such overdue payment.
B. Installment payments; Maturity.
Installments of interest only ("Interest Installment(s)") are due and
payable monthly in arrears in immediately available funds commencing (30) days
after the initial disbursement under the CONSTRUCTION LOAN AGREEMENT and
subsequent Interest Installments shall be due on the first business day of each
month thereafter for a period of thirty-six (36) months after the final
disbursement under the CONSTRUCTION LOAN AGREEMENT. Thirty (30) days thereafter,
("Maturity Date"), the entire unpaid principal balance plus all accrued and
unpaid interest and other charges due hereunder or under the Construction
Mortgage (as hereinafter defined) shall be paid in full. A date on which a
payment of interest is due is herein called an "Installment Date."
C. Security
This Note is to be secured by a Construction Mortgage of even date
herewith, the Continuing Guaranties and the Collateral.
D. Prepayment
Prepayment of this Note, without penalty or premium shall be permitted
to be made pursuant to the payment of release fees as described in section J
below or at any time.
E. Miscellaneous.
Every person or entity at any time liable for the payment of the
indebtedness or any other amounts due under this Note, hereby waives: diligence,
presentment for payment, protest and demand, notice of protest, demand, dishonor
and nonpayment of this Note. Every such person or entity further consents that
Holder may renew or extend the time of payment of any part or the whole of
indebtedness at any time and from time to time at the request of any other
person or entity liable therefor. Any such renewals or extensions may be made
without notice to any person or entity liable for the payment of the
indebtedness evidenced hereby.
This Note is given and accepted as evidence of indebtedness only and
not in payment or satisfaction of any indebtedness or obligation.
Time is of the essence with respect to all of Maker's obligations and
agreements under this Note.
This Note and all its provisions, conditions, promises and covenants
hereof shall be binding in accordance with the terms hereof upon Maker, its
successors and assigns, provided nothing herein shall be deemed consent to any
assignment restricted or prohibited by the terms of the Mortgage or the terms
hereof. If more that one person or other entity has executed this Note as Maker,
the obligations of such persons and entities shall be joint and several.
F. Default and Remedies.
The entire unpaid principal amount of this Note, together with all
accrued interest thereon, shall, at the option of the Holder exercised by
written notice to the Maker at its principal executive offices, become
immediately due and payable if any one or more of the following events (herein
called "Events of Default") shall have occurred (for any reason whatsoever and
whether such happening shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and be continuing at the time of such
notice;
(a) if default shall be made in the due and punctual payment of
interest or principal of this Note when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise, and such default
shall have continued for a period of ten (10) days after written notice thereof
to the Maker;
(b) if default shall be made in the performance or observance of any of
the other covenants, agreements or conditions of the Maker contained in this
Note, and such default shall have continued for a period of ten (10) days after
written notice thereof to the Maker, or for any longer period set forth in the
Construction Loan Agreement.
(c) if the Maker shall:
(i) admit in writing its inability to pay its debts generally
as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make any assignment for the benefit of creditors; (iv)
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property;
(v) on a petition in bankruptcy filed against it, be
adjudicated a bankrupt; or
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any State, district or territory
thereof; or,
(d) if default shall be made in the performance or observance of any of
the conditions of other agreements as set forth above, and such default shall
have continued for a period of ten (10) days after written notice thereof to the
Maker or for any longer period set forth in the CONSTRUCTION LOAN AGREEMENT;
In case any one or more of the Events of Default shall have occurred
and be continuing, the Holder may proceed to protect and enforce its rights
either by suit in equity and/or by action of law, whether for the specific
performance of any covenant or agreement contained in this Note or in aid of the
exercise of any power granted in this Note, or the Holder may proceed to enforce
the payment of all sums due upon this Note or to enforce any other legal or
equitable right of the Holder.
No remedy herein conferred upon the Holder is intended to limit or
restrict any other remedy and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.
No course of dealing between the Maker and the Holder or any delay on
the part of the Holder in exercising any rights hereunder shall operate as a
waiver of any rights or any Holder hereof.
Should any proceedings be instituted by the Holder to recover any
monies due hereunder, Maker agrees to pay all reasonable attorney's fees and
costs.
G. Severability
In the event that one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
H. Governing Law
This Note shall be deemed to have been made and executed at Syracuse,
New York regardless of the order in which the signatures of the parties shall be
affixed hereto, and this Note shall be interpreted, construed, and enforced in
accordance with the laws and public policies of the State of New York without
regard to the principles of conflicts of law.
In any action to enforce this Note, personal jurisdiction and venue
shall be at Holder's option in the Supreme Court of the State of New York,
County of Onondaga, or in the United States District Court for the Northern
District of New York.
I. Modification
This Note shall not be modified, amended, changed, terminated,
supplemented, or waived except in a` writing signed by Maker and Holder.
J. Release Fees
Maker shall pay release fees to Holder which are generated from the
sales of Interval Units at the Project in the amount of $2,180.00. The release
fees shall be applied by Holder to the principal balance due hereunder. On a
monthly basis, payment due on Interest Installments shall be re-calculated based
on the principal reduction.
K. Note Conversion
In the event Maker fails within one (1) year after the issuance of a
certificate of occupancy, to meet seventy-five percent (75%) of the projections
and forecasts relative to the sale of Interval Units, then Holder shall have the
option, upon sixty (60) days written notice, to convert this Note to a
conventional sixty (60) months amortized note with interest as set forth above.
IN WITNESS WHEREOF, the undersigned sets its hand the date above first
written.
VCA South Bend Incorporated
By Joseph P. Martori
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Title Chairman
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