PROMISSORY NOTE B

Exhibit 10.5

PROMISSORY NOTE B

 

$1,600,000.00		January 12, 2010

FOR VALUE RECEIVED, the undersigned, CONSTITUTION TRAIL, LLC, a Nebraska limited liability company (“Borrower”), having an address in care of Dial Properties, Co, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unconditionally promises to pay to the order, of M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ BANK, having an address of ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (together with its successors and assigns called “Lender”) the principal sum of $1,600,000.00, together with interest upon the principal balance remaining outstanding from time to time as set forth below, in payments as set forth below. The indebtedness evidenced by this Promissory Note B (the “Note B”) is referred to herein as the “Loan B”.

1. TERM. The “Maturity Date” of this Note B shall be the earlier of: a) April 5, 2015; or b) the date on which Lender exercises its right to accelerate the debt evidenced by this Note B upon the occurrence of an Event of Default (as defined below) and expiration of any applicable cure period (if any).

2. INTEREST.

2.1 Interest Rate. The “Note Rate” prior to the occurrence of an Event of Default shall be a fixed rate equal to six percent (6%). All interest shall be calculated for the actual number of days elapsed over a year assumed to Consist of 360 days, commencing on the date Lender disburses the $1,600,000.00.

2.2 Default Rate. At any time that an uncured Event of Default is outstanding, this Note B will bear interest at a rate of interest which is the lesser of five (5) percentage points in excess of the Note Rate from time to time or the maximum rate allowed by applicable law (“Default Rate”). The Default Rate shall be paid without prejudice to Lender’s rights to collect other amounts due under the Note B or to declare a default under any Loan Document (as defined below). If the Event of Default is cured interest will begin to accrue at the Note Rate commencing on the date the Event of Default is cured.

3. PAYMENTS. Borrower shall make payments according to the following paragraphs to Lender at its address appearing above or as later communicated to Borrower in writing, in immediately payable U.S. funds. All payments shall be first applied to Lender’s fees, costs, and expenses which are reimbursable under the terms of this Note B or any Loan Document (as defined below); then to accrued and unpaid interest; and finally to unpaid principal. If any payment due date is a Saturday, Sunday, or banking holiday observed by Lender, the due date of the payment shall automatically be extended to the next following banking business day.

3.1 Scheduled Interest and Principal Payments. On May 5, 2010 and continuing on the fifth (5th) day of each month thereafter through the Maturity Date (each a “Payment Date”), Borrower shall make monthly payments of principal and interest based upon a five (5) year amortization at the Note Rate, such payments to be applied first in payment of interest due on unpaid principal, and the balance to be applied in reduction of the principal.

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3.2 Final Payment. All outstanding principal, accrued and unpaid interest, late payment charges, and other amounts chargeable under this Note B and the Loan Documents shall be due and payable in full on the Maturity Date.

3.3 Prepayment. Borrower shall be entitled to prepay this Note B in full or in part at any time without penalty.

4. LATE PAYMENT CHARGE. If Borrower fails to make any monthly payment within ten (10) days after the Payment Date, a late charge equal to five percent (5%) of the amount of any such payment (the “Late Payment Charge”) shall, to the extent now or hereafter permitted by law, become immediately due to Lender to defray the legal and administrative costs of collecting delinquent accounts. A tender to Lender of any monthly payment more than ten (10) days past the Payment Date which does not include the Late Payment Charge may be rejected as insufficient or Lender may accept the tendered amount as a partial payment without waiving Lender’s right to receive the Late Payment Charge. This Note B will remain in default and interest at the Default Rate will accrue until the Late Payment Charge is paid. The Late Payment Charge shall be paid without prejudice to ▇▇▇▇▇▇’s rights to collect other amounts due hereunder or to declare a default under this Note B or any other Loan Document.

5. SECURITY. This Note B shall be secured by the following instruments executed by ▇▇▇▇▇▇▇▇ and other individuals and entities on or about even date herewith, except as otherwise noted:

5.1 The Loan Documents; and

5.2 That certain Construction Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing from Borrower to Lender, recorded in the Official Records of ▇▇▇▇▇▇ County, IL as File No. 2006-00029354, as amended;

5.3 that certain Assignment of Rents and Leases from Borrower to Lender, recorded in the Official Records of ▇▇▇▇▇▇ County, IL as File No. 2006-00029355, as amended;

5.4 The Guaranty dated of even date herewith executed by ▇▇▇▇▇ ▇. “▇▇▇▇▇” ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇;

5.5 The Conditional Assignment of Development Agreement and Collateral Assignment of Payments; and,

5.6 The Lockbox-Deposit Account Agreement.

This Note B, the documents referenced above, and all other documents and instruments now or hereafter evidencing, securing, or relating to the Loan B, including all modifications and replacements thereof, are referred to herein as the “Loan Documents”.

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6. EVENTS OF DEFAULT. The following shall be “Events of Default” under this Note B:

6.1 Payment Default. A failure to pay when due any principal, interest, fee, expense, reimbursement, escrow, or any other payment required under this Note B or any other Loan Document.

6.2 Default under Loan Documents. An “Event of Default” occurs and is not cured within the applicable cure period, if any, as described in any Loan Document.

6.3 Default under Note A-1. Any default or Event of Default shall occur under any of the terms of that certain Split, Amended and Restated Promissory Note A-l dated of even date herewith made by Borrower payable to Lender in the amount of $32,000,000.00 (together with any renewal, extension, modification or rearrangement thereof, the “Note A-1”).

6.4 Default under Note A-2. Any default or Event of Default shall occur under any of the terms of that certain Split, Amended and Restated Promissory Note A-2 dated of even date herewith made by Borrower payable to Lender in the amount of $8,867,593.00 (together with any renewal, extension, modification or rearrangement thereof, the “Note A-2”).

7. REMEDIES. Upon the occurrence of any Event of Default and the continuation of such event beyond any applicable cure period contained in the Loan Documents (if any), at Lender’s option, the outstanding principal balance of this Note B, all accrued and unpaid interest, and all other amounts, fees, and charges due under the Loan Documents shall immediately become due and payable, and Lender shall have the right to enforce its liens and security interests and exercise any rights under the Loan Documents in accordance with applicable law and/or principles of equity. The order and manner of ▇▇▇▇▇▇’s remedies shall be in its sole and absolute discretion.

8. COSTS AND EXPENSES. Immediately upon ▇▇▇▇▇▇’s demand, ▇▇▇▇▇▇▇▇ shall reimburse Lender for all reasonable costs, including but not limited to reasonable attorneys’ fees, court costs, and discovery expenses, incurred after an Event of Default in connection with the collection of any sums due under this Note B.

9. USURY. All provisions of this Note B which call for the payment of interest are intended to comply in all respects with all applicable usury statutes and regulations. If the terms of this Note B would require the payment of interest in excess of the amount permitted by any applicable law or regulation, the terms of this Note B shall be deemed to be modified to comply with all such applicable laws or regulations without any action by either party. If Lender receives interest in excess of the amount permitted by any applicable law or regulation, the excess portion of the interest received shall be deemed to be a prepayment of principal without premium as of the date received.

10. WAIVER. To the fullest extent permitted by law, ▇▇▇▇▇▇▇▇, all guarantors, and all endorsers and sureties irrevocably: a) waive i) presentment for payment, ii) notice of dishonor, iii) notice of nonpayment (unless expressly required by the Loan Documents), iv) protest, v) notice of protest, vi) demand, vii) other notices of every kind (unless expressly required by the Loan Documents), and viii) all rights to plead any statute of limitations as a defense to any action hereunder; b) consent that the time of payment of any installment may be extended from time to time, that all or any part of the collateral securing this Loan

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may be released, and that any person liable under this Note B may be released, all without notice, and all without affecting the liability of any person or the lien on that portion of such collateral not expressly released; and c) agree that no delay in enforcing any remedy under this Note B or any Loan Document shall be construed to be a waiver of that or any other remedy.

11. REVIVAL OF LIABILITY. If any payments or proceeds received by Lender are subsequently invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid to a trustee, to Borrower (directly or as a debtor-in-possession), to a receiver, or any other person, whether directly or indirectly, under any bankruptcy law, state or federal law, common law, or equitable cause, then Borrower’s obligation to make all such payments shall be revived and shall continue in full force and effect as if such payment or proceeds had never been received by Lender.

12. LENDER’S COSTS. Borrower shall pay directly or reimburse Lender for all reasonable costs and expenses in connection with the Loan B (including, without limitation, legal fees and expenses, recording costs, and title insurance premiums for any title policy endorsements required by Lender in connection herewith),

13. SET-OFF. If any Event of Default occurs hereunder and continues beyond any applicable cure period contained herein (if any), then Lender may off-set and apply any deposit accounts of Borrower or other indebtedness owed by ▇▇▇▇▇▇ to Borrower toward repayment of the Obligations.

14. COUNTERPARTS; FACSIMILE. This Note B may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All such counterparts shall be construed together and shall constitute one instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart for each of the parties hereto. Each counterpart hereof shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

15. NOTICES. All communications required hereunder or in the Loan Documents shall be given to Borrower and Lender at their respective addresses set forth in the Loan Documents, or at such other addresses as either party may designate by notice given in accordance with the terms of this paragraph. All communications required or permitted pursuant to this Note B shall be in writing and shall be deemed to have been properly given and received in accordance with the Loan Documents.

16. MISCELLANEOUS. a) This Note B shall be binding on Borrower and ▇▇▇▇▇▇▇▇’s successors and assigns and shall inure to the benefit of ▇▇▇▇▇▇ and ▇▇▇▇▇▇’s successors and assigns. b) Headings are inserted into this Note B for convenience only and shall not be considered in construing any provision. c) This Note B shall be deemed to have been executed in and performed in the State of Illinois and shall be governed by its laws. d) This Note B may not be amended, nor any of its provisions waived, without the written consent of Borrower and Lender. e) Time shall be of the essence of this Note B, but no delay or deferral in exercising any remedies after an Event of Default shall be deemed a waiver of such remedies. f) The provisions of this Note B are severable. If any judgment is hereafter entered holding any

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provision of this Note B to be invalid or unenforceable, then the remainder of this Note B shall not be affected by such judgment, and the remaining terms of this Note B shall be carried out as nearly as possible according to its original terms. g) The term “person” includes, but is not limited to, natural persons, corporations, partnerships, trusts, limited liability companies, joint ventures, and/or other legal entities. h) No inference in favor of, or against, any person shall be drawn from the fact that such person has drafted all or any part of this Note B or any other Loan Document. i) The term “modified” means amended, changed, extended, renewed, altered, terminated, or canceled.

17. PRIOR AGREEMENTS. This Note B and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements, understandings and negotiations among or between such parties, whether oral or written, are superseded by the terms of this Note B and the other Loan Documents.

18. VENUE. ▇▇▇▇▇▇▇▇ irrevocably agrees that subject to ▇▇▇▇▇▇’s sole and absolute election, Lender may bring suit, action, or other legal proceedings arising out of the Loan Documents in courts located in ▇▇▇▇▇▇ County, IL, whether local, state, or federal. Borrower hereby consents to the jurisdiction of such courts and waives any rights Borrower may have to request a change of venue or a removal to another court.

19. WAIVERS OF JURY TRIAL. Borrower hereby irrevocably and severally: a) waives the right to a trial by jury in any action or proceeding brought by any party in connection with this Note B; b) has made this waiver knowingly, intentionally, and voluntarily; c) acknowledge no reliance upon any oral or written statements made by Lender or on ▇▇▇▇▇▇’s behalf, either to induce this waiver of trial by jury or to modify or nullify its effect, other than those contained herein; d) acknowledges reading and understanding the meaning and ramifications of this waiver provision; and, e) agrees to take all such actions as may be required by applicable law to allow this waiver to be enforceable. By accepting this Note B, ▇▇▇▇▇▇ waives the right to a trial by jury in any action or proceeding brought by any party in connection with this Note B.

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In Witness Whereof, the undersigned have executed this Promissory Note B as of the date first written above.

 

This is the signature page for the Promissory Note B executed on January 12, 2010, by CONSTITUTION TRAIL, LLC, a Nebraska limited liability company in favor of M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ BANK.

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03/25/2010

 

Compound Period		:			Exact Days
Nominal Annual Rate		:			6.000%
Effective Annual Rate		:			Undefined
Periodic Rate		:			0.0167%
Daily Rate		:			0.01667%

CASH FLOW DATA

 

Event

Start Date

Amount

Number

Period

End Date

1 Loan

04/01/2010

1,600,000.00

1

2 Payment

05/05/2010

31,020.48

60

Monthly

04/05/2015

AMORTIZATION SCHEDULE - Normal Amortization, 360 Day Year

 

Date		Payment				Interest				Principal				Balance
Loan 04/01/2010															1,600,000.00
1 05/05/2010			31,020.48				9,066.67				21,953.81				1,578,046.19
2 06/05/2010			31,020.48				8,153.24				22,867.24				1,555,178.95
3 07/05/2010			31,020.48				7,775.89				23,244.59				1,531,934.36
4 08/05/2010			31,020.48				7,914.99				23,105.49				1,508,828.87
5 09/05/2010			31,020.48				7,795.62				23,224.86				1,485,604.01
6 10/05/2010			31,020.48				7,428.02				23,592.46				1,462,011.55
7 11/05/2010			31,020.48				7,553.73				23,466.75				1,438,544.80
8 12/05/2010			31,020.48				7,192.72				23,827.76				1,414,717.04
2010 Totals			248,163.84				62,880.88				185,282.96
9 01/05/2011			31,020.48				7,309.37				23,711.11				1,391,005.93
10 02/05/2011			31,020.48				7,186.86				23,833.62				1,367,172.31
11 03/05/2011			31,020.48				6,380.14				24,640.34				1,342,531.97
12 04/05/2011			31,020.48				6,936.42				24,084.06				1,318,447.91
13 05/05/2011			31,020.48				6,592.24				24,428.24				1,294,019.67
14 06/05/2011			31,020.48				6,685.77				24,334.71				1,269,684.96
15 07/05/2011			31,020.48				6,348.42				24,672.06				1,245,012.90
16 08/05/2011			31,020.48				6,432.57				24,587.91				1,220,424.99
17 09/05/2011			31,020.48				6,305.53				24,714.95				1,195,710.04
18 10/05/2011			31,020.48				5,978.55				25,041.93				1,170,668.11
19 11/05/2011			31,020.48				6,048.45				24,972.03				1,145,696.08
20 12/05/2011			31,020.48				5,728.48				25,292.00				1,120,404.08
2011 Totals			372,245.76				77,932.80				294,312.96
21 01/05/2012			31,020.48				5,788.75				25,231.73				1,095,172.35
22 02/05/2012			31,020.48				5,658.39				25,362.09				1,069,810.26
23 03/05/2012			31,020.48				5,170.75				25,849.73				1,043,960.53
24 04/05/2012			31,020.48				5,393.80				25,626.68				1,018,333.85
2012 Totals			124,081.92				22,011.69				102,070.23
Grand Totals			744,491.52				162,825.37				581,666.15