Exhibit 10.3
WRAPAROUND PROMISSORY
NOTE
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$1,100,000.00
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January 5, 2005
Memphis, Tennessee
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FOR VALUE RECEIVED, the undersigned
Maker, hereby promises to pay to the order of VCG REAL ESTATE
HOLDINGS, INC., a Colorado corporation, (hereinafter
“Lender”), or the subsequent holder hereof, the
principal sum of ONE MILLION ONE HUNDRED THOUSAND AND 00/100
($1,100,000.00) DOLLARS, with interest from the date hereof until
paid at the rate per annum hereinafter stipulated, principal and
interest to be due and payable as follows:
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a.
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The outstanding
principal of this Note shall bear interest from the date hereof
based on a rate of 7% per annum.
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b.
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On the
principal sum of Six Hundred Thousand and 00/100 ($600,000.00)
(“First Debt”), Maker shall pay installments of
principal and interest in the amount of $6,966.51 commencing on the
5th day of February, 2005, and shall continue to be payable on the
5th day of each month thereafter, until the 5th day of July, 2005,
at which time the entire outstanding principal balance on said
$600,000.00 and all accrued but unpaid interest due thereon shall
be paid.
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c.
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On the
principal sum of Five Hundred Thousand and 00/100 ($500,000.00)
(“Second Debt”), Maker shall pay installments of
principal and interest in the amount of $3,326.51 commencing on the
5th day of February, 2005, and shall continue to be payable on the
5th day of each month thereafter, until the 5th day of January,
2010, at which time the entire outstanding principal balance on
said $500,000.00 and all accrued but unpaid interest due thereon
shall be paid.
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d.
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The aforesaid
installment payments are to be applied first to interest at the
rate as aforesaid on the principal sum, or so much thereof as shall
from time to time remain unpaid, and the balance of each
installment shall be applied on account of principal.
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e.
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All
installments of principal and interest of this Note, if not paid
within ten (10) days after the due date, shall include a late
payment charge equal to five (5%) percent of the amount of the
delinquent installment. It is agreed the late payment charge is
reasonable compensation as liquidated damages to compensate the
holder of this Note for the damages for the loss of use of money,
the frustration of the holder’s meeting its financial
obligations, and expenses associated with such late payment, all of
which are difficult to ascertain; provided, however, that neither
the right of the holder to receive such late charge nor the
claiming or receiving of such late charge shall in any way delay or
prevent the holder’s exercising its rights or remedies for
Maker’s default.
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This Note is a “Wraparound
Note”, i.e. , a portion of the principal amount of
this Note is represented by the unpaid balance of that certain Note
or other contractual obligations (the “Underlying
Note”) as follows:
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Note
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dated July 16,
2003, executed by VCG Real Estate Holdings, Inc., made payable to
Community Banks of Colorado, in the original principal amount of
$824,000.00, and having an unpaid principal balance as of January
5, 2005 of $735,174.66.
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All payments under this Note are
payable in lawful money of the United States of America which shall
be legal tender for the payment of debts, public and private, at
the time of payment. The Maker shall pay the installments of
principal and interest due under this Note to Lender at 1601 W.
Evans Avenue, #200, Denver, Colorado 80223, or such other place as
is designated by Lender. The Lender in turn (a) will use a portion
of such installments as paid to pay the installments of principal
and interest evidenced by the Underlying Note directly to the
holder thereof in the manner provided in the Underlying Note as the
same become due and payable; (b) will apply the balance, if any, of
said payment to this Note; (c) will pay the principal balance and
accrued interest of the Underlying Note when it matures by
prepayment, acceleration or on its scheduled maturity date, and
will furnish evidence of payment to the Maker at or prior to the
date of maturity; and (d) will thereafter apply the principal
balance and accrued interest thereon to this Note in accordance
with the terms hereof.
If an event of default shall have
occurred under the Underlying Note not cured prior to the
expiration of any grace period by Lender, the Maker may, but is not
obligated to, make any payment directly to the holder of the
Underlying Note, or perform any act required under the Underlying
Note, in any form and manner deemed expedient by Maker, including
full or partial payments of principal or interest on the Underlying
Note and the purchase, discharge, compromise or settlement of the
Underlying Note. In such event, Maker shall be allowed to deduct
such payments to said holder of the Underlying Note from the
amounts due Lender.
The references contained in this
Note to the obligation of the Maker or to the Lender or holder
hereof to pay any sum or sums owing on the Underlying Note shall
not constitute an assumption of a personal liability
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