Promissory Note - The Chateaux LLC and Grand Casinos Nevada I Inc.
PROMISSORY NOTE
$1,000,000.00 Minnetonka, Minnesota
September 25, 2002
FOR VALUE RECEIVED, the undersigned, THE CHATEAUX LLC, a Nevada limited
liability company (hereinafter "Borrower") whose address is 3745 Las Vegas Blvd.
South, Las Vegas, NV 89109, promises to pay to the order of GRAND CASINOS NEVADA
I, INC., a Minnesota corporation ("Holder") whose address is 130 Cheshire Lane,
Minnetonka, MN 55305, the principal sum of One Million and 00/100 Dollars
($1,000,000.00), or such lesser sums as may have been advanced to Borrower
hereunder, in lawful money of the United States of America, together with
interest on the unpaid principal balance, at the rates of interest hereinafter
specified to be repaid as set forth in the Loan Agreement ("Loan Agreement") of
even date herewith between the Borrower and the Holder.
The interest due hereunder on the outstanding principal amount shall be
computed at a fixed rate of ten percent (10.0%) per annum. Interest shall be
calculated on the balances outstanding at the end of each day and on the basis
of a three hundred sixty (360) day year, but shall accrue and be payable on the
actual number of days in the month.
All payments shall be applied first to late fees due hereunder, if any,
then to interest and then to principal, except that if any advance made by
Holder for expenses which are the responsibility of the Borrower is not promptly
repaid to Holder, any monies received, at the option of Holder, may first be
applied to repay such advances, plus interest thereon, at the rates provided
herein.
All payments shall be made at the office of the Holder set forth above,
or at such other place as the Holder hereof may from time to time designate in
writing.
It is hereby expressly agreed that if any default shall occur in the
payment of any installment of principal, interest or other sums when due
hereunder or any other sum when due hereunder or in the payment of any other
indebtedness owed by Borrower to Holder; and such default continues for ten (10)
days after the Holder hereof has given Borrower written notice of such default;
or if any "Event of Default" shall occur under the Loan Agreement: (a) the whole
sum of principal, accrued interest and other sums outstanding hereunder shall,
at the option of the Holder hereof, be fully accelerated and become immediately
due and payable, anything contained herein or in any instrument now or hereafter
securing this Note to the contrary notwithstanding, time being of the essence
hereof; and (b) the interest rate on this Note shall increase an additional four
percent (4%) per annum in excess of the interest rate in effect at said time
("Default Rate"). Said acceleration option and Default Rate shall continue until
all such defaults have been cured. In the event of such acceleration, the term
"Maturity Date" shall be deemed to mean the date on which this Note is due and
payable as a result of such acceleration.
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Borrower may prepay a portion or the entire principal amount due
hereunder at any time without penalty, and such prepayment shall be applied as
hereinabove provided.
No delay or omission on the part of the Holder of this Note in
exercising any right hereunder shall operate as a waiver of such right or of any
other remedy under this Note. A waiver on any one occasion shall not be
construed as a waiver of any such right or remedy on a future occasion.
Borrower and all guarantors, if any, hereof hereby severally waive
presentment for payment, protest and demand, notice of protest, demand, dishonor
and nonpayment of this Note; and hereby further consent that the Holder hereof
may extend the time of payment or otherwise modify the terms of payment of any
part or the whole of the debt evidenced by this Note, or modify the Mortgage or
any other document securing this Note, or partially release or satisfy any
security furnished thereby, and such consent, release or satisfaction shall not
alter nor diminish the liability of any person liable or to become liable for
the indebtedness evidenced hereby or any portion of such indebtedness; and
hereby further consent that no act, omission or thing, except full payment of
this Note, which but for this provision could act as a release or impairment of
their liability, shall in any way release, impair or effect the liability of any
of them; and consent to the personal jurisdiction of the state and federal
courts located in the State of Nevada in connection with any controversy related
in any way to this Note or any security or guaranty for this Note, waive any
argument that venue in such forums is not convenient, and agree that any
litigation initiated by any of them against the Holder or any other holder of
this Note relating in any way to this Note or any security or guaranty for this
Note shall be venued in either the applicable state court in Clark County,
Nevada, or the United States District Court for the District of Nevada. However,
this Note shall be shall be construed according to the internal laws (other than
conflict laws) of the State of Minnesota.
Borrower agrees to pay all costs of collection, including attorneys'
fees, in case the principal of this Note or any payment on the principal,
interest, or other sum due hereunder is not paid when due, and to pay all costs
including attorneys' fees in case it becomes necessary to protect the security
hereof, whether suit be brought or not.
Notwithstanding any provision herein or in any instrument now or
hereafter securing this Note, the total liability for payments in the nature of
interest shall not exceed the limits now imposed by the usury laws of the State
of Minnesota.
The rights or remedies of the Holder as provided in this Note and the
Mortgage and any other documents securing this Note shall be cumulative and
concurrent, and may be pursued singly, successively, or together against the
Mortgaged Property, any other funds, property or security held by Holder for the
payment hereof or otherwise at the sole discretion of the Holder. The failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release of such rights or remedies or the right to exercise them at any later
time.
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THE BORROWER ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED AND THAT THE TIME AND EXPENSE
REQUIRED FOR TRIAL BY A JURY MAY EXCEED THE TIME AND EXPENSE REQUIRED FOR TRIAL
WITHOUT A JURY. THE BORROWER, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF BORROWER'S CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR
THE MUTUAL BENEFIT OF HOLDER AND BORROWER, 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, ANY RELATED AGREEMENTS OR OBLIGATIONS THEREUNDER. THE
BORROWER HAS READ ALL OF THIS NOTE AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
NOTE. THE BORROWER ALSO AGREES THAT COMPLIANCE BY THE HOLDER WITH THE EXPRESS
PROVISIONS OF THIS NOTE SHALL CONSTITUTE GOOD FAITH AND SHALL BE CONSIDERED
REASONABLE FOR ALL PURPOSES.
BORROWER:
THE CHATEAUX, LLC
By: /s/ Stephen J. Cloobeck
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Its: Managing Member
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