Portuguese Bend Club Homeowners Association Promissory Note Secured by Deed of Trust 4110 1110
PROMISSORY NOTE SECURED BY DEED OF TRUST
$750,000.00 Rancho Palos Verdes, California
August , 1999
FOR VALUE RECEIVED, the undersigned,the PORTUGUESE BEND CLUB
HOMEOWNERS ASSOCIATION, a California corporation(the "Maker"), hereby promises to
pay to BAY CITIES NATIONAL BANK,national association(the "Holder"), or order, at
Rancho Palos Verdes, California, without deduction or offset, the sum of Seven Hundred Fifty
Thousand and 00/100 Dollars ($750,000.00), which amount shall not accrue interest except in the
event a payment is not timely made, whereupon interest shall accrue on any amount not timely
paid at the rate of five percent (5%)per annum. The amount advanced hereunder shall be fully
amortized over the term of this Promissory Note ("Note"). If the full amount of Seven Hundred
Fifty Thousand and 00/100 Dollars ($750,000.00) is advanced, such amount shall be repaid in
equal monthly payments of $4,166.67; the first payment shall be due and payable on the first
day of the calendar month twelve (12) months after the completion of the Project (as defined
below).
Any unpaid principal and interest, if any, shall be due and payable in full on the Fifteenth
(15th) anniversary of the first payment date, or September 1, 2016,whichever first occurs (the
"Maturity Date").
This Note is being executed pursuant to that certain Construction Loan Agreement of
dated August 3, 1999,herewith,by and between Maker, as "Borrower" therein, and Bay Cities
National Bank("BCNB"), as "Lender" therein. Unless otherwise defined herein all capitalized
terms herein shall have the meanings ascribed to them in the Construction Loan Agreement.
BCNB is concurrently herewith assigning to the RANCHO PALOS VERDES
REDEVELOPMENT AGENCY (the "Agency"), and the Agency is assuming, all of BCNB's
rights and obligations as Lender under the Construction Loan Agreement and as Holder of this
Note.
Maker may prepay, without penalty or premium, any amount of the principal under this
Note prior to the due date hereof.
The Loan and this Note are secured by a Deed of Trust of even date herewith(the "Deed
of Trust"), executed by Maker, as trustor, to Fidelity National Title Company, a California
corporation, as Trustee, and naming BCNB as beneficiary, creating a lien on that certain real
property described in Exhibit "A" attached hereto and incorporated by reference herein, together
with all improvements thereon (the "Property"). As explained above, BCNB is concurrently
herewith assigning to the Agency all of BCNB's rights and obligations as beneficiary under the
Deed of Trust. Among other things, the Deed of Trust permits the acceleration of the
indebtedness evidenced by this Note upon the sale, transfer, hypothecation, conveyance,
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assignment, or sublease (collectively, a"Transfer")of the Property that is the collateral for the
Deed of Trust. In addition,this Note and the Loan are secured by a Security Agreement and an
Assignment of Contracts and Plans and Specifications.
Maker agrees (a)to pay immediately, without demand,to Holder, in the event any
installment is not received by the holder within ten(10) days after its due date, and without
regard to the date as of which such payment is credited, an amount equal to five percent(5%) of
that portion of the installment due that is applicable to the payment of principal and interest, (b)
that it would be impractical or extremely difficult to fix the holder's actual damages in the event
that any installment shall not be paid when due, and(c)that such amounts,together with interest
as described below, shall be presumed to be the amount of the damages suffered by the Holder
hereof as the result of such late payment. This paragraph and the amounts which it provides shall
not limit Holder's right, under this Note, the Deed of Trust securing it,the Construction Loan
Agreement, or otherwise,to compel prompt performance hereunder.
At Holder's option, all sums owing hereunder shall, at once, become due and payable if
any of the following occur:
(a) If Maker defaults in the payment of principal, interest, or any other sums due
hereunder, or any other sums due under the Deed of Trust securing this Note, and the default is
not cured within ten(10) days after written notice of such default;
(b) If Maker breaches the non-monetary terms of the Construction Loan Agreement
or the non-monetary obligations of Maker set forth in the Deed of Trust securing this Note, and
such default is not cured within thirty(30) days after written notice of such default.
From and after any such default or breach, interest shall accrue at the rate of Five percent
(5%)per annum, retroactive to the date of the occurrence of the default or breach.
This Note,the Deed of Trust, and the Construction Loan Agreement between Maker and
Holder shall be governed by and construed in accordance with the laws of the State of California.
All parties who are obligated to pay any portion of the indebtedness represented by this
Note, whether as principal, surety, guarantor or endorser, hereby waive presentment for payment,
demand,protest,notice of protest and notice of dishonor, and all other notices to which they
might otherwise be entitled, and further waive all defenses based on release of security, extension
of time or other indulgence given in respect to payment of this Note,to whomsoever given, and
further waive all defenses, generally, except the defense of actual payment of this Note according
to its tenor. The pleading of any statute of limitations as a defense to the obligations evidenced
by this Note is waived to the fullest extent permissible by law.
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If any sum due under this Note is not paid when due, Maker hereby covenants and agrees
to pay all costs and expenses of collection, whether by suit or otherwise, at any time or from time
to time incurred, including, without limitation, reasonable attorney's fees.
Subject to the foregoing, the terms of this Note shall be binding upon and inure to the
benefit of the respective heirs, successors in interest and assigns of the undersigned and Holder.
Time is of the essence with respect to each and every provision hereof. If any provision
hereof is found to be invalid or unenforceable by a court of competent jurisdiction,the invalidity
thereof shall not affect the enforceability of the remaining provisions of this Note.
Any notice, demand or document which any party is required or may desire to give or
deliver to the other hereunder, shall be in writing and may be delivered personally or given by
United States mail, certified, return receipt requested,postage prepaid, addressed as set forth in
the Construction Loan Agreement. Any notice, demand or documents to be given, delivered or
made by United States mail shall be deemed to have been given or delivered or made three (3)
business days after the day on which the same is postmarked by the United States mail,
addressed as above provided, with postage thereon fully prepaid.
IN WITNESS WHEREOF, Maker has executed this Note as of the day and year first
above written.
"Maker" PORTUGUESE BEND CLUB HOMEOWNERS ASSOCIATION,
a California corporation
By:
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