Promissory Note - Entity Planners International Inc. and Seattle Funding Group Ltd.
Loan # 01-0230
PROMISSORY NOTE
(Construction Loan)
$1,239,000.00 July 26, 2001
117 290th Avenue Northeast
Carnation, WA 98014
NOTICE: ORAL AGREEMENTS, PROMISES OR COMMITMENTS TO LEND MONEY, TO EXTEND
CREDIT, TO MODIFY OR AMEND THE TERMS UNDER WHICH MONEY WAS LENT OR CREDIT WAS
EXTENDED, TO RELEASE ANY GUARANTOR OR CO-SIGNER, TO FORBEAR WITH RESPECT TO THE
REPAYMENT OF ANY DEBT OR THE EXERCISE OF ANY REMEDY, OR TO MAKE ANY OTHER
FINANCIAL ACCOMMODATION PERTAINING TO A DEBT OR OTHER EXTENSION OF CREDIT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
FOR VALUE RECEIVED, the undersigned ("Borrower") promises and agrees as
follows:
1. Principal. In return for a loan that Borrower has received, Borrower
promises to pay to Seattle Funding Group, Ltd., a Washington Corporation
("Lender"), or order, $1,239,000.00 or so much as may be outstanding, plus
interest. Borrower understands that the Lender may transfer this Promissory Note
(the "Note"). Lender or anyone who takes this Note by transfer and who is
entitled to receive payments under this Note is called the "Note Holder".
2. Line of Credit. This Note evidences a straight line of credit. Once
the total amount of principal has been advanced, Borrower is not entitled to
further loan advances. Advances under this Note, as well as directions for
payment from Borrower's accounts may be requested orally or in writing by
Borrower or by an authorized person. Lender may, but need not, require that all
oral requests be confirmed in writing. The following party or parties are
authorized to request advances under this line of credit until Lender receives
from Borrower written notice of revocation of their authority: Brookhaven Homes
Limited Partnership. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements of this Note or
by Lender's internal records, including daily computer printouts. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of the Note or any agreement that
Borrower or any guarantor has with Lender, including without limitation any
agreement made in connection with the signing of this Note regarding the
construction of improvements on the property securing this note or other
property, the application of the funds advanced hereunder for said construction,
or the timely completion of construction; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; (d)Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (e) Lender in
good faith deems itself insecure under this Note or any other agreement between
Lender and Borrower.
3. Payments and Interest.
a. Borrower will make monthly payments equal to the interest accrued
on the outstanding principal balance on the first day of each month beginning on
August 1, 2001 and continuing until August 1, 2002 (Conversion Date), at which
time any accrued and unpaid interest shall be due in full. Borrower shall pay
interest on the outstanding principal of the Note from the date hereof until the
Conversion date at the rate of 13.990% per annum.
b. If on the Conversion Date, Borrower is not in default hereunder,
the outstanding principal balance of the Note shall be converted to an
amortizing term note as follows: Borrower shall make monthly payments of
principal and interest in the sum of $14,670.75 on the first day of each month
commencing September 1, 2002. Borrower's monthly payments will be applied to
interest before principal. If, on August 1, 2007, Borrower still owes amounts
under this Note, Borrower will pay those amounts in full on that date, which is
called the "Maturity Date". Borrower will make monthly payments at 1239 120th
AVENUE NE, SUITE J, BELLEVUE, WA 98005, or at a different place if required by
the Note Holder. Interest will be charged on unpaid principal until the full
amount of principal has been paid. Borrower will pay interest at the rate of
13.990% per annum commencing on the Conversion Date.
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c. Notwithstanding the foregoing, at all times that Borrower is in
default under this Note, Borrower will pay interest on all amounts due under
this Note at the rate of twenty-five percent (25%) per annum ("Default Rate").
Payment of accrued and unpaid interest at the Default Rate shall be a condition
to any cure and reinstatement of the Note.
4. Borrower's Right to Prepay. A payment of principal only made before it
is due is known as a "prepayment". So long as Borrower is not in default under
this Note, Borrower has the right to make prepayments at any time without paying
any prepayment charge, provided Borrower tells the Note Holder in writing that
Borrower is doing so. The Note Holder will use all prepayments to reduce the
amount of principal that Borrower owes under this Note provided that Borrower is
current in all obligations due under this Note. If Borrower makes a partial
prepayment, there will be no changes in the due dates of monthly payments, or
the Maturity Date.
5. Late Charges for Overdue Payments. If the Note Holder has not received
the full amount of any monthly payment by the end of fifteen (15) calendar days
after the date it is due, Borrower will pay a late charge to the Note Holder.
The amount of the late charge will be five percent (5%) of the overdue payment
of principal and interest. Borrower will pay this late charge promptly but only
once on each late payment.
6. Default and Acceleration. Without prior notice to Borrower, the Note
Holder may declare the entire unpaid principal balance with all accrued
interest, late charges and other obligations immediately due and payable, in the
event of any one of the following circumstances, each of which is an event of
default hereunder:
a. If Borrower does not pay any sum due under this Note on the date it
is due, or if Borrower fails to comply with any other obligation of this Note or
any other documents or instruments executed in connection with this Note, or if
Borrower commits or suffers any act which would permit Lender to terminate
advances under Paragraph 2 hereof.
b. In the event the Property securing this Note or any part thereof or
interest therein is encumbered, sold (by contract or otherwise), conveyed,
leased without Lender's prior written approval, or otherwise transferred by
Borrower; or if there is any change in the ownership or control of any
Borrower's stock if Borrower is a corporation, the ownership or control of any
general partnership interest in Borrower if Borrower is a partnership, the
ownership of any beneficial interests in Borrower if Borrower is not otherwise a
natural person or persons, or the ownership of stock, any general partnership
interest, or any legal or beneficial interest in any corporation, partnership or
other entity that has an ownership interest in Borrower. The Note Holder may opt
to give consent to such transfer and in so doing, may require such modifications
in the terms of this Note, and the interest rate herein provided, as Note Holder
alone shall determine in the exercise of its sole discretion.
c. On the occurrence of any event which gives the beneficiary of the
Deed of Trust securing this Note the right to accelerate the indebtedness
secured thereby.
d. If Borrower fails to make any payment when due or to perform any
act required under this Note or any other note, Deed of Trust, document, or
instrument which is executed or guaranteed by Borrower, in which "Lender" is the
original lender, or beneficiary, Borrower will be deemed to be in default under
this Note and all other obligations Borrower has owing to "Lender" or "Note
Holder". Borrower understands that this is often called a cross
collateralization provision and means that if Borrower is in default under any
note, loan or obligation owning to "Lender" or "Note Holder" that Borrower will
be in default under all notes, loans, or obligations owing to "Lender" or "Note
Holder". If "Lender" or "Note Holder" has the right to declare immediately due
the full amount of principal and interest on any note because of default,
"Lender" or "Note Holder" shall have the right to declare immediately due the
principal and interest on all notes or obligations Borrower owes to "Lender" or
"Note Holder".
e. Borrower breaks any promise Borrower has made to Lender or Borrower
fails to perform promptly at that time and strictly in the manner provided in
this Note or any Deed of Trust or Security Instrument related to or securing
this Note, or in any other agreement or loan Borrower has with Lender;
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f. Any representation or statement made or furnished to Lender by
Borrower or on Borrower's behalf is false or misleading in any material respect;
g. Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws;
h. Any creditor tries to take any of Borrower's property on or in
which Lender has a lien or security interest;
i. Any of the events described in this default section occurs with
respect to any guarantor of this Note;
7. No Waiver by Note Holder. Even if, at a time Borrower is in default,
the Note Holder does not require Borrower to pay immediately in full as
described above, the Note Holder will still have the right to do so if Borrower
is in default at a later time.
8. Payment of Note Holder's Costs And Expenses. The Note Holder will have
the right to collect from Borrower all costs and expenses incurred by Note
Holder or its predecessors in interest in enforcing this Note to the extent not
prohibited by applicable law. Those expenses include, for example, but are not
limited to, reasonable attorneys' fees including attorneys' fees incurred in any
appeal and in any proceeding peculiar to federal bankruptcy law.
9. Bankruptcy Reorganization. For the purpose of any reorganization plan
under the United States Bankruptcy Code, including, without limitation, Chapters
11 and 13 thereof and Code Sections 1123 and 1322 of said Chapters, any cure
contemplated by said plan shall require the full payment of accrued and unpaid
interest at the Default Rate set forth herein and payment of all other sums due
by reason of Borrower's default. Arrears accumulated and unpaid shall accrue
interest at the same rate applicable to the Principal during the life of the
plan, and all payments towards arrearages under such reorganization plan shall
be applied first to the interest accruing on the arrearages and then to the
arrearage balance.
10. Giving of Notices. Unless applicable law requires a different method,
any notice that must be given to Borrower under this Note will be given by
delivering it or by mailing it by first class mail to Borrower at the Mailing
Address below or at a different address if Borrower gives the Note Holder a
notice of a different address. Any notice that must be given to the Note Holder
under this Note will be given by mailing it by first class mail to the Note
Holder at the address stated in Section 3(b) above or at a different address if
Borrower is given a written notice of a different address.
11. Obligations of Persons under this Note. If more than one person signs
this Note, each person is fully and personally obligated to keep all of the
promises made in this Note, including the promise to pay the full amount owed.
The Note Holder may enforce its rights under this Note against each person
individually or against all signatories together. This means that any one
signatory may be required to pay all of the amounts owed under this Note.
12. Waivers. Borrower and any other person who has obligations under this
Note waive the rights of presentment and notice of dishonor. "Presentment" means
the right to require the Note Holder to demand payment of amounts due. "Notice
of Dishonor" means the right to require the Note Holder to give notice that
amounts due have not been paid.
13. Secured Note. This Note is secured by a certain Short Form Deed of
Trust (the "Deed of Trust") executed by Borrower which encumbers certain real
and personal property therein described, and certain property of Borrower
hereafter acquired and added by rider to said Short Form Deed of Trust.
Reference is made to the Deed of Trust, and the master Form Deed of Trust
incorporated therein, for further rights of acceleration of the indebtedness
evidenced by this Note, and for further obligations of the parties hereto as to
payments of taxes and insurance and other obligations. In addition to any other
remedy which may be provided in the Deed of Trust, the holder hereof may add to
the principal balance of this Note any sums advanced by Note Holder or its
predecessors in interest for the payment of taxes, insurance or other
obligations required to be paid by Borrower pursuant to the terms of the Deed of
Trust, together with any charges or assessments which may be levied for
nonpayment. Any sums paid shall be added to principal and will bear interest as
in this Note provided.
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14. Commercial Purpose. Borrower represents and warrants to Lender that
the loan proceeds disbursed by Lender under the Note shall be used for business,
commercial or investment purposes. Borrower acknowledges that, but for this
representation and warranty, Lender would not grant the loan to Borrower on the
terms represented in the Note, the Deed of Trust and the Loan Documents.
Borrower further acknowledges that Lender is relying exclusively on Borrower's
representation and warranty hereunder in Lender's determination of the use of
loan proceeds, and will make disbursements under the Note in material reliance
on such representation and warranty.
15. Governing Law. If a law, which applies to this loan and which sets
maximum loan charges, is finally interpreted so that the interest or other loan
charges collected or to be collected in connection with this loan exceed the
permitted limits, then (i) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted limit; and (ii) any sums already
collected from Borrower that exceeded permitted limits will be refunded to
Borrower. The Note Holder may choose to make this refund by reducing the
principal Borrower owes under this Note or by making a direct payment to
Borrower. If a refund reduces principal, the reduction will be treated as a
partial prepayment.
Entity Planners International, Inc.,
A Nevada corporation,
General Partner;
By: /s/ Wade B. Cook
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Wade B. Cook, President
Mailing Address: 14675 Interurban Avenue South
Seattle, WA 98168-4662
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