Exhibit 10.5
[Comerica Logo]
VARIABLE RATE - INSTALLMENT NOTE
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AMOUNT NOTE DATE MATURITY DATE TAX IDENTIFICATION
$250,000 August 18, 2003 February 28, 2003 #76-0585701
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For Value Received, the undersigned promise(s) to pay to the order of
Comerica Bank-California ("Bank"), at any office of the Bank in the State
of California Two Hundred Fifty Thousand and no/100 Dollars (U.S.) in
installments of $13,889.00 each plus interest on the unpaid balance from
the date of this Note at a per annum rate equal to the Bank's base rate
from time to time in effect plus 2.000% per annum until maturity, whether
by acceleration or otherwise, or until Default, as later defined, and after
that at a default rate equal to the rate of interest otherwise prevailing
under this Note plus 3% per annum (but in no event in excess of the maximum
rate permitted by law). Interest shall be calculated for the actual number
of days the principal is outstanding on the basis of a 360 day year if this
Note evidences a business or commercial loan or a 365 day year if a
consumer loan. The Bank's "base rate" is that annual rate of interest so
designated by the Bank and which is changed by the Bank from time to time.
Interest rate changes will be effective for interest computation purposes
as and when the Bank's base rate changes. Installments of principal and
accrued interest due under this Note shall be payable on the 30th day of
each month, commencing September 30, 2003, and the entire remaining unpaid
balance of principal and accrued interest shall be payable on the Maturity
Date set forth above. If the frequency of principal and interest
installments is not otherwise specified, installments of principal and
interest due under this Note shall be payable monthly on the first day of
each month.
In the event the periodic installments set forth above are inclusive of
interest, these installments are calculated at an assumed fixed interest
rate and an assumed amortization term. The amortization term ends on
February 28, 2005. In the event this Note evidences a business or
commercial loan and the Bank's base rate changes, the Bank, at its sole
option, may from time to time recalculate the periodic installment amount
so that the remaining periodic installments will fully amortize the
remaining loan balance within the remaining amortization term in equal
installments at the interest rate then being charged under this Note.
THE UNDERSIGNED AGREE(S) TO PAY THE PERIODIC INSTALLMENTS AS THEY MAY BE
RECALCULATED BY THE BANK, AT THE BANK'S SOLE OPTION, FROM TIME TO TIME AND
ACKNOWLEDGE(S) THAT A RECALCULATION SHALL NOT AFFECT THE MATURITY DATE OR
THE OTHER TERMS AND PROVISIONS OF THIS NOTE. If this Note or any
installment under this Note shall become payable on a day other than a day
on which the Bank is open for business, this payment may be extended to the
next succeeding business day and interest shall be payable at the rate
specified in this Note during this extension. Any payments of principal in
excess of the installment payments required under this Note need not be
accepted by the Bank (except as required under applicable law), but if
accepted shall apply to the installments last falling due. A late
installment charge equal to 5% of each late installment may be charged on
any installment payment not received by the Bank within 10 calendar days
after the installment due date, but acceptance of payment of this charge
shall not waive any default under this Note.
This Note and any other indebtedness and liabilities of any kind of the
undersigned (or any of them) to the Bank, and any and all modifications,
renewals or extensions of it, whether joint or several, contingent or
absolute, now existing or later arising, and however evidenced
(collectively "Indebtedness") are secured by and the Bank is granted a
security interest in all items deposited in any account of any of the
undersigned with the Bank and by all proceeds of these items (cash or
otherwise), all account balances of any of the undersigned from time to
time with the Bank, by all property of any of the undersigned from time to
time in the possession of the Bank and by any other collateral, rights and
properties described in each and every deed of trust, mortgage, security
agreement, pledge, assignment and other agreement which has been, or will
at any time(s) later be, executed by any (or all) of the undersigned to or
for the benefit of the Bank (collectively "Collateral"). Notwithstanding
the above, (i) to the extent that any portion of the Indebtedness is a
consumer loan, that portion shall not be secured by any deed of trust or
mortgage on or other security interest in any of the undersigned's
principal dwelling or in any of the undersigned's real property which is
not a purchase money security interest as to that portion, unless expressly
provided to the contrary in another place, or (ii) if the undersigned (or
any of them) has (have) given or give(s) Bank a deed of trust or mortgage
covering real property, that deed of trust or mortgage shall not secure
this Note or any other Indebtedness of the undersigned (or any of them),
unless expressly provided to the contrary in another place.
If the undersigned (or any of them) or any guarantor under a guaranty of
all or part of the Indebtedness ("guarantor") (a) fail(s) to pay this Note
or any of the Indebtedness when due, by maturity, acceleration or otherwise,
or fail(s) to pay any Indebtedness owing on a demand basis upon demand; or
(b) fail(s) to comply with any of the terms or provisions of any agreement
between the undersigned (or any of them) or any guarantor and the Bank; or
(c) become(s) insolvent or the subject of a voluntary or involuntary
proceeding in bankruptcy, or a reorganization, arrangement or creditor
composition proceeding, (if a business entity) cease(s) doing business as
a going concern, (if a natural person) die(s) or become(s) incompetent,
(if a partnership) dissolve(s) or any general partner of it dies, becomes
incompetent or becomes the subject of a bankruptcy proceeding or (if a
corporation or a limited liability company) is the subject of a dissolution,
merger or consolidation; or (d) if any warranty or representation made by
any of the undersigned or any guarantor in connection with this Note or any
of the Indebtedness shall be discovered to be untrue or incomplete; or (e)
if there is any termination, notice of termination, or breach of any
guaranty, pledge, collateral assignment or subordination agreement relating
to all or any part of the indebtedness; or (f) if there is any failure by
any of the undersigned or any guarantor to pay when due any of its
indebtedness (other than to the Bank) or in the observance or performance
of any term, covenant or condition in any document evidencing, securing or
relating to such indebtedness; or (g) if the Bank deems itself insecure,
believing that the prospect of payment of this Note or any of the
Indebtedness is impaired or shall fear deterioration, removal or waste of
any of the Collateral; or (h) if there is filed or issued a levy or writ
of attachment or garnishment or other like judicial process upon the
undersigned (or any of them) or any guarantor or any of the Collateral,
including without limit, any accounts of the undersigned (or any of them)
or any guarantor with the Bank, then the Bank, upon the occurrence of any
of these events (each a "Default"), may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
Indebtedness to be immediately due and payable (notwithstanding any
provisions contained in the evidence thereof to the contrary), sell or
liquidate all or any portion of the collateral, set off against the
Indebtedness any amounts owing by the Bank to the undersigned (or any of
them), charge interest at the default rate provided in the document
evidencing the relevant Indebtedness and exercise any one or more of the
rights and remedies granted to the Bank by any agreement with the
undersigned (or any of them) or given to it under applicable law. In
addition, if this Note is secured by a deed of trust or mortgage covering
real property, then the trustor or mortgagor shall not mortgage or pledge
the mortgaged premises as security for any other indebtedness or
obligations. This Note, together with all other Indebtedness secured by
said deed of trust or mortgage, shall become due and payable immediately,
without notice, at the option of the Bank, (a) if said trustor or mortgagor
shall mortgage or pledge the mortgaged premises for any other indebtedness
or obligations or shall convey, assign or transfer the mortgaged premises
by deed, installment sale contract or other instrument, or (b) if the title
to the mortgaged premises shall become vested in any other person or party
in any manner whatsoever, or (c) if there is any disposition (through one
or more transactions) of legal or beneficial title to a controlling interest
of said trustor or mortgagor. All payments under this Note shall be in
immediately available United States funds, without setoff or counterclaim.
available under Section 3-605 of the California Uniform Commercial Code and
waive(s) all other suretyship defenses or right to discharge. The
undersigned agree(s) that the Bank has the right to sell, assign, or grant
participations, or any interest, in any or all of the Indebtedness, and
that, in connection with this right, but without limiting its ability to
make other disclosures to the full extent allowable, the Bank may disclose
all documents and information which the Bank now or later has relating to
the undersigned or the Indebtedness. The undersigned agree(s) that the
Bank may provide information relating to this Note or to the undersigned
to the Bank's parent, affiliates, subsidiaries and service providers.
The undersigned agree(s) to reimburse the holder or owner of this Note for
any and all costs and expenses (including without limit, court costs, legal
expenses and reasonable attorney fees, whether inside or outside counsel is
used, whether or not suit is instituted and, if suit is instituted, whether
at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or
attempting to collect this Note or incurred in any other matter or
proceeding relating to this Note.
The undersigned acknowledge(s) and agree(s) that there are no contrary
agreements, oral or written, establishing a term of this Note and agree(s)
that the terms and conditions of this Note may not be amended, waived or
modified except in a writing signed by an officer of the Bank expressly
stating that the writing constitutes an amendment, waiver or modification
of the terms of this Note. As used in this Note, the word "undersigned"
means, individually and collectively, each maker, accommodation party,
endorser and other party signing this Note in a similar capacity. If any
provision of this Note is unenforceable in whole or part for any reason,
the remaining provisions shall continue to be effective. THIS NOTE IS MADE
IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
The maximum interest rate shall not exceed the highest applicable usury
ceiling.
THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS
A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT,
WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE
PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE OR THE
INDEBTEDNESS.
Crdentia Corp.
By: /s/ James D. Durham Its: Chairman
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