DEED OF TRUST NOTE
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$3,700,000.00 Irvine, California February 19, 1999
1. AGREEMENT TO PAY. FOR VALUE RECEIVED, FIRST ALLIANCE MORTGAGE
COMPANY, a California corporation ("BORROWER"), hereby promises to pay to the
order of THE OHIO NATIONAL LIFE INSURANCE COMPANY, an Ohio corporation
("LENDER"), in the manner hereinafter provided, the principal sum of THREE
MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($3,700,000.00), or so much
thereof as may be advanced, with interest on the principal amount outstanding
from time to time from date of disbursement until maturity at the rate of six
and nine tenths percent (6 9/10%) per annum, payable on the first day of each
and every month of the term hereof in lawful money of the United States of
America, as follows:
(a) Interest only shall be due on the first day of the month
following the date ("DISBURSEMENT DATE") on which the principal sum of
the loan evidenced by this Note is disbursed for the period of time
commencing with the Disbursement Date through the end of the month in
which the Disbursement Date occurs.
(b) Commencing on the first day of the second month after the
Disbursement Date, monthly installments of principal and interest shall
be due and payable in the amount of TWENTY EIGHT THOUSAND FOUR HUNDRED
SIXTY FIVE AND NO/100 DOLLARS ($28,465.00) each, such payments to
continue monthly thereafter on the first day of each succeeding month
until the first day of March, 2009, when the balance of said principal
sum with all accrued and unpaid interest thereon shall be due and
payable.
(c) Interest hereunder shall be calculated on a year of 360 days and
a month of 30 days but accrued on the actual number of days elapsed.
The monthly payments of combined principal and interest of this Note
are based on a twenty (20) year amortization that results in the final
installment being a balloon payment of the entire unpaid principal
balance and accrued but unpaid interest.
2. ALLOCATION OF PAYMENTS. All such monthly payments on account of the
indebtedness evidenced by this Note as first set forth above shall be applied,
in the following order, to: (a) Late Charges (as defined in paragraph 5 hereof),
interest at the Default Rate (as defined in paragraph 6 hereof) and prepayment
premiums, (b) interest at the rate set forth in paragraph 1 hereof on the unpaid
principal balance, and (c) the payment of the monthly installment attributable
to principal based upon an amortization schedule of twenty (20) years.
3. PLACE OF PAYMENT. Each and all of said payments of principal and
interest shall be made payable at the office of GMAC Commercial Mortgage
Corporation, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such place
as Lender may, from time to time, in writing appoint.
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4. PREPAYMENT PRIVILEGES AND RESTRICTIONS.
(a) Borrower shall have no right to prepay the principal sum, or any
part thereof, or any interest thereon, except as set forth in this
Note. There is hereby reserved to Borrower the right and privilege of
prepaying the entire principal balance (but not less than the entire
principal balance) and all accrued and unpaid interest thereon at any
time on payment of a premium equal to the greater of (i) one percent
(1%) of the then outstanding principal balance of this Note, or (ii)
the "Discounted Yield Maintenance Prepayment Fee". In addition,
Borrower shall have the right to prepay without premium the entire
principal balance and all accrued and unpaid interest thereon during
the last 90 days of the term of this loan.
(b) The "DISCOUNTED YIELD MAINTENANCE PREPAYMENT FEE" shall mean an
amount calculated by applying the Treasury Security rate to the amount
of principal so prepaid from the date of such prepayment to the date of
the maturity of this Note and shall be equal to the positive difference
between the interest rate of this Note and the Treasury Yield, divided
by 12, multiplied by the then outstanding principal balance of this
Note to arrive at the monthly payment differential. The present value
of the series of the monthly payment differentials for the number of
whole and partial months from the prepayment date to the maturity date
of this Note using the Treasury Yield as the discount rate compounding
monthly shall then be calculated. The resulting sum of the discounted
monthly prepayment differentials will be the Discounted Yield
Maintenance Prepayment Fee.
(c) As used herein, the term "TREASURY YIELD" means, with respect to
any prepayment, the per annum yield to maturity of Treasury Securities
as published in the Wall Street Journal on the seventh (7th) business
day prior to the date of prepayment. As used herein, the term "TREASURY
SECURITY" means, with respect to any prepayment, U.S. Treasury bills,
notes or bonds, as the case may be, having a coupon interest rate and
maturity rate most closely equivalent to the maturity date of this
Note.
(d) All such elective prepayments as above set forth may be made
only on the first business day of a calendar month and on sixty (60)
days prior written notice to Lender.
(e) In case a default shall occur hereunder, a tender of payment by
Borrower, or its successors or assigns, or anyone on its or their
behalf, of the amount necessary to satisfy the entire indebtedness
evidenced hereby prior to a foreclosure sale shall constitute an
evasion of the prepayment provisions of this Note and constitute a
voluntary prepayment, and in such case any such tender of payment shall
include a prepayment premium calculated in accordance with this
paragraph 4.
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(f) No prepayment premium shall be charged as a result of the
application of insurance proceeds or condemnation awards to the unpaid
principal of this Note.
5. LATE CHARGES. If any payment due hereunder is not received by Lender
within three (3) business days of the date such payment is due, Borrower shall
pay a late charge (the "LATE CHARGE") of five percent (5%) of each such late
payment (which late charge shall be due and payable retroactively as of the
first date on which such payment was due) as compensation to Lender for the
additional costs and expenses of administering, collecting and accounting for
such late payment, and the payment of such late charge shall not be credited
against the principal balance hereunder or any accrued or unpaid interest.
Borrower and Lender agree that the Late Charge represents a reasonable sum
considering the circumstances existing on the date of this Note and represents a
fair and reasonable estimate of the costs Lender will incur by reason of late
payment. Borrower and Lender further agree that proof of actual damages
resulting from late payment would be both costly and inconvenient. The Late
Charge is intended solely to compensate Lender for such costs and shall not be
construed as a "penalty" or unreasonable liquidated damages within the meaning
of California Civil Code ss. 1671. This paragraph 5 shall not release Borrower
from the obligation to make payments on or before the date on which they are
due, nor does this paragraph 5 in any way affect or limit the rights and
remedies of Lender pursuant to this Note, or any other documents securing or
executed in connection with this Note, or otherwise.
6. DEFAULT. If (i) default be made in the payment of any interest
herein provided for, or the principal sum evidenced hereby, or any part thereof,
or any other sums payable pursuant to the terms of this Note or the Deed of
Trust (as hereinafter defined) or pursuant to any other document executed as
security for this Note, or (ii) default be made in the performance of any
non-monetary covenant or agreement contained in this Note or in the Deed of
Trust or any other document executed as security for this Note, at the time when
performance is required by any such document, and such non-monetary default is
not cured within twenty (20) days after written notice of such default is given
by Lender to Borrower, or, if such default by its nature cannot be cured within
twenty (20) days, within sixty (60) days after written notice of such default is
given by Lender to Borrower (provided that Borrower commences such cure within
twenty (20) days and diligently prosecutes such cure thereafter), then or at any
time thereafter while Borrower remains in default thereunder, at the option of
Lender which shall be communicated by written notice to Borrower, the whole of
the principal sum then remaining unpaid hereunder, together with all interest
accrued and unpaid thereon, shall immediately become due and payable without
notice. From and after the maturity of this Note, either according to its terms
or as the result of a declaration of maturity made by Lender, and after the due
date for the payment of any other sum payable hereunder irrespective of any
declaration of maturity, the entire principal sum remaining unpaid hereunder,
and every other sum payable hereunder after its due date, shall bear interest at
the rate of eleven and nine tenths percent (11 9/10%) per annum (the "DEFAULT
RATE"). Failure to exercise such option or any other rights to which Lender may,
in the event of any such default, be entitled shall not constitute a waiver of
the right to exercise such option or any other rights in the event of any
subsequent default, whether of the same or different nature.
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7. COSTS OF ENFORCEMENT. In the event that this Note is placed in the
hands of an attorney-at-law for collection after maturity, or upon default, or
in the event that proceedings at law, in equity, or bankruptcy, receivership or
other legal proceedings are instituted or threatened in connection herewith, or
if Lender is made a party to any such proceeding or in the event that this Note
is placed in the hands of an attorney-at-law to enforce any of the rights or
requirements contained herein or in the Deed of Trust or any other document
executed in connection with this Note, Borrower hereby agrees to pay all
reasonable costs of collecting or attempting to collect this Note and all costs
of protecting or enforcing such rights, including, without limitation,
reasonable attorneys' fees (whether or not suit is brought), in addition to all
principal, interest and other amounts payable hereunder; all of which shall be
secured by the Deed of Trust and any other document securing payment hereof.
8. WAIVER. To the extent permitted by law, Borrower, all endorsers and
guarantors, and all persons liable or to become liable on this Note: waive
presentment, protest and demand, and notice of protest, demand and dishonor and
nonpayment of this Note; waive all applicable appraisement, valuation and
exemption rights; consent to any and all renewals and extensions in the time of
payment hereof; and agree that at any time and from time to time without notice,
the terms of payment herein may be modified or the security described in any
document securing this Note released, in whole or in part, or increased, changed
or exchanged by agreement between Lender and any owner of the property affected
by such document securing this Note, without in anyway affecting the liability
of any party to this instrument or any person liable or to become liable with
respect to any indebtedness evidenced hereby.
9. LENDER'S ACTIONS. The remedies of Lender as provided herein or in
any document executed in connection with this Note, shall be cumulative and
concurrent, and may be pursued singularly, successively or together, at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
arise. Failure of Lender, for any period of time or on more than one occasion,
to exercise its option to accelerate the maturity of this Note shall not
constitute a waiver of the right to exercise the same at any time thereafter or
in the event of any subsequent default. No act of omission or commission of
Lender, including specifically any failure to exercise any right, remedy or
recourse, shall be deemed to be a waiver or release of the same and any such
waiver or release is to be effected only through a written document executed by
Lender and then only to the extent specifically recited therein. A waiver or
release with reference to any one event shall not be construed as a waiver or
release of any subsequent event or as a bar to any subsequent exercise of
Lender's rights or remedies hereunder. Except as otherwise specifically required
herein, notice of the exercise of any right or remedy granted to Lender by this
Note is not required to be given.
10. SECURITY DOCUMENTS. This Note is secured by certain
documents and instruments including that certain Deed of Trust, Security
Agreement and Fixture Filing with Assignment of Rents (the "DEED OF TRUST") of
even date herewith encumbering certain real property in the County of Los
Angeles, California (the "PROPERTY"). The Deed of Trust and such other documents
and instruments securing this Note shall hereinafter be collectively referred to
as the "SECURITY DOCUMENTS".
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11. ACCELERATION ON TRANSFER. Lender shall have the right, at its
option, to declare the entire unpaid principal balance of this Note and all
accrued but unpaid interest thereon, immediately due and payable, if, without
Lender's prior written consent (which consent shall not be unreasonably withheld
and may be conditioned on (i) reasonable consideration, (ii) full and complete
disclosure to Lender of all pertinent information affecting any of the following
events, and (iii) such additional requirements as Lender shall reasonably
require) any of the following events occur: (a) Borrower, or its successors in
interest, convey, transfer or assign the Property or any part thereof, or any
interest therein, whether by deed, contract of sale, lease with option to buy,
or otherwise; or (b) Borrower, or its successors in interest, further encumber
or alienate the Property or any part thereof; or (c) Borrower, or its successors
in interest, suffer their title to the Property or any interest therein to be
divested, whether voluntarily or involuntarily; or (d) Borrower, or its
successors in interest, change or permit to be changed the character or use of
the Property; or (e) suit be commenced to condemn the Property as being unfit
for use or occupancy or to ▇▇▇▇▇ as a nuisance activities or conditions found
thereon or for the partition or sale of the Property; or (f) if Borrower is a
corporation: any of the Borrower's capital stock shall be sold, assigned or
transferred, or if Borrower is a partnership: a transfer of any general
partnership interests. If any of the events enumerated in the preceding
subparagraphs (a) to (f), inclusive, occur and if Lender consents to the same,
such consent shall not be deemed or construed as a waiver, and the consent of
Lender shall be required on all successive occurrences. In the event that Lender
approves a transfer of ownership of the Property, Borrower shall pay to Lender a
fee equal to one percent (1%) of the then outstanding principal balance of the
this Note. In addition, a management contract in form and substance acceptable
to Lender will be required with a company approved by Lender. Borrower shall be
solely responsible for the payment of any and all legal and administrative
expenses of Lender required to consummate the necessary documentation, including
but not limited to financial statements, credit reports, proposed instrument of
conveyance, an updated title examination showing no adverse title consequences
since the original funding thereof, and such formal opinions of counsel as
Lender, in its sole discretion, shall require.
12. NOTICES. All notices required or permitted to be given hereunder to
Borrower shall be given in the manner and to the address of Borrower provided in
the Deed of Trust for notices to the trustor.
13. TIME. Time is of the essence of this Note and each of the
provisions hereof.
14. CAPTIONS. The captions to the paragraphs of this Note are for
convenience only and shall not be deemed part of the text of the respective
paragraphs and shall not vary, by implication or otherwise, any of the
provisions of this Note.
15. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of California.
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16. INTEREST LIMITATION. In no event shall the interest paid, or agreed
to be paid, to Lender, exceed the maximum amount permissible under applicable
law. If the performance or fulfillment of any provision hereof or of any of the
Security Documents or any agreement between Borrower and Lender shall result in
interest exceeding the limit for interest prescribed by law, then the amount of
such interest shall be reduced to such limit. If, from any circumstances
whatsoever, Lender should receive as interest an amount which would exceed the
highest lawful rate, the amount which should be excessive interest shall be
applied to the reduction of the principal balance owing hereunder (or, at the
option of the Lender, be paid over to Borrower) and not to the payment of
interest.
17. SURVIVAL. If any provision hereof, or if any of the Security
Documents, shall, for any reason and to any extent, be invalid or unenforceable,
then the remainder of this Note or the Security Documents, shall not be affected
thereby but instead shall be enforceable to the maximum extent permitted by law.
18. CONSTRUCTION. The term "Borrower" as used herein shall include the
original Borrower and any party who may subsequently become liable for the
payment hereof, with the consent of Lender, provided that Lender may, at its
option, consider the original Borrower alone as Borrower unless Lender has
consented in writing to the substitution of another party as Borrower. The term
"Lender" as used herein shall mean Lender or, if this Note is transferred, the
then holder of this Note. In this Note, whenever the context so requires, the
masculine gender includes the feminine and/or neuter, and vice versa, and the
singular number includes the plural and vice versa.
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IN WITNESS WHEREOF, Borrower has executed this Note as of the
day and year first above written.
FIRST ALLIANCE MORTGAGE
COMPANY, a California corporation
By:_______________________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, its Chief Financial
Officer
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