EXHIBIT 10.3
COMMERCIAL NOTE
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$10,000,000.00 MARCH 29, 2005
BEVERLY HILLS, CALIFORNIA
FOR VALUE RECEIVED, the undersigned, (hereinafter referred to as
"Maker") promises to pay to the order of Stanford Financial Group Company
(hereinafter referred to as "Lender"), at its office at 5050 Westheimer,
Houston, TX 77056, or at such other place as the Lender shall from time to time
designate in writing, on October 1, 2005, the principal sum of TEN MILLION
DOLLARS AND NO CENTS ($10,000,000.00) or such principal portion thereof as shall
be outstanding under the Commercial Loan and Agreement dated October 1, 2003, as
amended to date, between Maker and Lender (the "Loan Agreement"), with interest
from the date hereof, computed on a 360 day year, on so much of said principal
sum as shall from time to time be outstanding, at the daily average of the Prime
Rate as reported in the Wall Street Journal, together with all its reasonable
costs, expenses and attorney's fees incurred or charged in any action or
proceeding for collection of said debt or in any litigation arising from or
concerning said debt or in foreclosing or otherwise recovering on any mortgage
or security interest securing said debt or in protecting or sustaining the lien
and/or priority of any such mortgage or security interest . Said interest shall
be payable at the aforesaid rate, or at the rate in effect as hereinafter
provided, whether before or after maturity, by acceleration or otherwise, or
whether or not judgment has been obtained, and after judgment, on the full
amount of said judgment, at the greater of the legal rate or the rate then in
effect hereunder.
From the date hereof interest on the daily outstanding principal
balance for the actual number of days elapsed in each payment period shall be
due and payable in monthly payments in arrears commencing April 10, 2005 and
continuing on the 10th day of each month thereafter until the entire outstanding
principal balance and accrued and unpaid interest thereon has been paid in full.
All principal and interest evidenced by this Note, if not sooner paid, or
demanded, shall be due and payable on October 1, 2005 without the necessity of
demand or notice. All payments of principal or interest shall be considered
received by Lender upon receipt of good funds as defined by Lender's financial
depository.
This Note is subject in all respects to the terms and conditions of the
Loan Agreement including without limitation Events of Default as defined
therein.
It is agreed that time is of the essence of this Note, and that in the
event of default in the payment of any such installment of principal and/or
interest for a period of five (5) days after the same is due and payable or upon
default under any of the terms, conditions and/or provisions contained in this
Note or upon the occurrence of an Event of Default under the Loan Agreement,
then, and in any of said events, the unpaid remaining principal balance of this
indebtedness together with all accrued and unpaid interest thereon and all other
amounts due hereunder shall immediately become due and payable, at the option of
Lender without the necessity for demand or notice; and any failure to exercise
said option shall not constitute a waiver of the right to exercise the same at
any other time. If any such default shall occur, then, interest shall accrue, on
and after the first day of said default, for the period for which any such
payment was due, and during such period of five (5) days or other expired
applicable cure period, and at all times while such default continues, on all
principal and due and unpaid interest, at a rate five percent (5%) per annum
higher than the rate above stated and said interest shall be due and payable on
the first day of each month while any such default exists.
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Maker shall pay a late charge equal to five percent (5%) of any
installment not paid within five (5) days of the due date thereof.
Maker reserves the right to prepay this note in full or in part at any
time without any prepayment penalty.
Any deposits, securities or other property of the Maker, (exclusive of
deposits, securities or other property held by the undersigned in a fiduciary
capacity for the benefit of others) which are at anytime within Lender's
possession or control may be held and treated as collateral security for the
payment of this note, and Lender shall have a lien thereon and right to setoff
the same against any sums due hereunder.
Notwithstanding any provisions of this Note, in the event that the rate
of interest charged hereunder shall at any time exceed the maximum rate allowed
by law, the interest rate payable hereunder shall be deemed to be the maximum
rate allowed by law and any payments in excess of the maximum rate allowed by
law shall be deemed principal payments and applied against the principal balance
hereof.
The Maker hereby agrees that the loan evidenced by the within note is a
"commercial transaction" as defined by California Law.
Upon failure to pay the indebtedness secured hereby in full at
maturity, whether stated or by acceleration, Lender is authorized and empowered
to sell the whole or any part of the Collateral then held by it in such manner
as Lender sees fit and is consistent with applicable law. Sale of part of the
Collateral shall not exhaust Lender's power of sale, but sales may be made from
time to time until all the Collateral is sold, or until the debts hereby secured
are paid in full. Lender shall receive the proceeds of such sale or sales and
shall apply those proceeds in the order stipulated in the relevant provisions of
the California Commercial Code. If this Note is placed in the hands of an
attorney for collection or is collected in whole or in part through any judicial
or arbitral proceedings, Maker agrees to pay Lender's attorney's fees and costs.
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THE MAKER HEREBY WAIVES ALL RIGHTS TO NOTICE AND PRIOR COURT HEARING OR
COURT ORDER IN CONNECTION WITH ANY AND ALL PREJUDGMENT REMEDIES THE HOLDER
HEREOF MAY BECOME ENTITLED TO BY VIRTUE OF ANY DEFAULTS OR PROVISIONS OF THE
NOTE SECURING THE SAME.
THE MAKER WAIVES A TRIAL BY JURY IN ANY ACTION WITH RESPECT TO THIS
NOTE AND AS TO ANY ISSUE ARISING RELATING TO THIS NOTE OR TO THE INSTRUMENTS
SECURING THIS NOTE.
TO INDUCE LENDER TO ENTER INTO THE COMMERCIAL LOAN TRANSACTION
EVIDENCED BY THIS NOTE, MAKER AGREES THAT THE SAID TRANSACTION IS COMMERCIAL AND
NOT A CONSUMER TRANSACTION AND WAIVES ANY RIGHT OF MAKER TO NOTICE AND HEARING,
JURY TRIAL AND THE POSTING OF BOND BY LENDER UNDER ANY STATUTE OR STATUTES
AFFECTING PREJUDGMENT REMEDIES AND AUTHORIZED LENDER'S ATTORNEY TO ISSUE A WRIT
FOR PREJUDGMENT REMEDIES WITHOUT A COURT ORDER PROVIDED THE COMPLAINT SHALL SET
FORTH A COPY OF THIS WAIVER. 5 Presentment, protest and notice are hereby
waived.
SUPERIOR GALLERIES, INC.
By: /S/ Silvano Digenova
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Silvano DiGenova
Its President, Duly Authorized
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