$________ _____________, 20__
FOR VALUE RECEIVED, ___________(“Maker”), jointly and severally, promise to pay to
___________ (“Holder”), the sum of __________ Dollars ($________), with interest on the
unpaid principal from time to time outstanding from the date hereof at the Note Rate (defined
below). Payments shall be made at ____________. The place of payment may be changed from
time to time as the Holder may from time to time designate in writing upon advance written
notice to Maker. All payments hereunder shall be made in lawful money of the United States of
1. Payment Dates. Interest only payments at the Note Rate shall be due and payable
on first of each month commencing on the first day of the next calendar month immediately
following the date of this Note, and ending on the date of final payment of the principal of this
Note in full as set forth below. All interest on the unpaid principal outstanding from time to time
shall be computed on the basis of a three hundred sixty-five (365)-day year and actual days
elapsed. All principal and all accrued and unpaid interest shall be due and payable on the first
day of the month that is sixty-one (61) months after the date of this Note. Each payment shall be
credited first to the payment of any late charge or costs due hereunder, then to the payment of
interest then due and the remainder shall be credited to principal, and interest shall thereupon
cease upon the principal so credited. If interest is not paid as it becomes due, it shall be subject to
a late charge and may be added to the principal as provided in paragraph 6 below.
2. Prepayment. Maker shall have the right to prepay this Note in whole or in part at
any time, without prepayment penalty or premium.
3. Note Rate. The “Note Rate” shall be the annual rate of interest payable by Maker
on the New Loan, as that term is defined in the Membership Interest Purchase Agreement
between Holder and Maker. Maker shall provide to Holder copies of the promissory note for the
New Loan evidencing the annual rate of interest of the New Loan. Upon execution of this
Agreement, the Note Rate shall be entered above Maker’s signatures below.
4. Due on Sale. Maker acknowledges that: (a) the financial stability, development
expertise and managerial and operational ability of Maker were and are a substantial and material
consideration to Holder and, in reliance thereon, Holder has agreed to accept Maker’s Note; and
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(b) a change in the persons or entities operating and managing such real property may
significantly and materially alter or reduce Holder’s risk under the Note.
No waiver of the requirement of consent by Holder as set forth herein shall be effective
unless in writing.
5. Default; Late Charge; Acceleration. If Maker fails to make any payment of
interest due hereunder by the 10th day of any month, such payment shall be delinquent and
Maker shall, as of the 10th day after the due date, have incurred a late charge equal to ten percent
(10%) of the delinquent amount. The parties agrees that such delinquency will cause Holder to
incur administrative, processing and other costs the exact amount of such costs being extremely
difficult and impractical to fix and that such late charge represents a fair and reasonable estimate
of the costs that Holder will incur by reason of any late payment. Acceptance of a late charge
shall not constitute a waiver of Maker's default with respect to the overdue amount or any other
obligation of Maker hereunder and, if any such default is not cured within ten (10) days after
Holder has provided written notice of such default to Maker at _____________ or such other
notice address as Maker shall later provide to Holder), then: (a) the full amount of any delinquent
interest payment, separate from and not including any late charge incurred thereon, shall be
added to principal, shall become and be treated as a part thereof and shall thereafter bear like
interest; and (b) at any time thereafter during such default, Holder may, at its option, declare the
entire amount of unpaid principal and all accrued and unpaid interest, plus any accrued an unpaid
late charges, immediately due and payable without notice to Maker. The rights and remedies of
Holder as provided herein are nonexclusive, cumulative and concurrent, and may be pursued
singly, successively or together against Maker.
6. Waivers. Maker expressly waives presentment, demand, protest, notice of
nonpayment, notice of protest and any and all lack of diligence or delays which may occur in the
collection of this Note.
7. Costs. Upon default of Maker, Maker promises to pay all costs, expenses and
attorneys’ fees incurred by Holder in connection with the collection or enforcement of this Note
or any part of it, whether or not suit is filed, including but not limited to, all reasonably incurred
costs, expenses and attorneys’ fees incurred by Holder in connection with any insolvency,
bankruptcy, reorganization, arrangement or similar proceedings involving Maker.
7. Governing Law. This Note shall be construed and enforced in accordance with the
laws of the State of California.
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9. Severability. Every provision hereof is intended to be severable. If any provision
of this Note is determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall not affect the other provisions
hereof, which shall remain binding and enforceable.
10. Successors. The terms “Maker” and “Holder” shall be construed to include the
parties’ respective successors and assigns.
11. No Modifications. This Note shall not be changed or modified orally, but in each
instance only by an instrument in writing signed by the party against which enforcement of such
change, modification, or waiver is sought.
The undersigned have executed this Note as of the date first set forth above. Maker
agrees that the Note Rate is ___% per annum.
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