Exhibit 10.17

CW Loan No. 06-2749/7599
Flextronics

PROMISSORY NOTE

(Fixed Rate)

$14,250,000.00

 

October       , 2006

 

FOR VALUE RECEIVED, WESTCORE LUNDY, LLC, a Delaware limited liability company
(“Maker”), promises to pay to the order of COUNTRYWIDE COMMERCIAL REAL ESTATE
FINANCE, INC., a California corporation (together with any subsequent holder of
this Note, and their respective successors and assigns, “Holder”) at such
address as Holder may from time to time designate in writing, the principal sum
of FOURTEEN MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS
($14,250,000.00) together with interest thereon and all other sums due and/or
payable under any Loan Document; such principal and other sums to be calculated
and payable as provided in this Note.  This Note is being executed and delivered
in connection with, and is entitled to the rights and benefits of, that certain
Loan Agreement of even date herewith between Maker and Holder (as amended,
modified and supplemented and in effect from time to time, the “Loan
Agreement”).  Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Loan Agreement.

Maker agrees to pay the principal sum of this Note together with interest
thereon and all other sums due and/or payable under any Loan Document in
accordance with the following terms and conditions:

1.             INTEREST RATE.  INTEREST SHALL ACCRUE ON THE PRINCIPAL
INDEBTEDNESS AT FIVE AND 60/100 PERCENT (5.60%) PER ANNUM (THE “INTEREST RATE”)
COMMENCING ON THE DATE OF THIS NOTE.  INTEREST SHALL BE COMPUTED ON THE ACTUAL
NUMBER OF DAYS ELAPSED BASED ON A 360-DAY YEAR.

2.             PAYMENTS.  MAKER SHALL MAKE THE FOLLOWING PAYMENTS TO HOLDER:

(A)           ON THE DATE HEREOF (UNLESS THE DATE HEREOF IS THE SAME CALENDAR
DAY AS A PAYMENT DATE), A PAYMENT OF INTEREST ONLY FOR THE FIRST INTEREST
ACCRUAL PERIOD

(B)           ON DECEMBER 8, 2006 (THE “FIRST PAYMENT DATE”) AND ON THE SAME
CALENDAR DAY OF EACH CALENDAR MONTH (EACH, A “PAYMENT DATE”) THROUGH AND
INCLUDING THE PAYMENT DATE OCCURRING IN OCTOBER, 2016, MAKER SHALL PAY TO HOLDER
A MONTHLY PAYMENT OF INTEREST ONLY BASED ON THE INTEREST RATE AND THE
OUTSTANDING PRINCIPAL INDEBTEDNESS.

(C)           THE ENTIRE OUTSTANDING INDEBTEDNESS SHALL BE DUE AND PAYABLE ON
THE PAYMENT DATE OCCURRING IN NOVEMBER, 2016 (THE “MATURITY DATE”), OR SUCH
EARLIER DATE RESULTING FROM ACCELERATION OF THE INDEBTEDNESS BY HOLDER.

(D)           “INTEREST ACCRUAL PERIOD” MEANS, INITIALLY, THE PERIOD COMMENCING
ON THE CLOSING DATE AND CONTINUING TO AND INCLUDING THE CALENDAR DAY PRECEDING
THE NEXT PAYMENT DATE, AND THEREAFTER EACH PERIOD RUNNING FROM AND INCLUDING A
PAYMENT DATE TO AND INCLUDING THE CALENDAR DAY PRECEDING THE NEXT PAYMENT DATE
DURING THE TERM OF THE LOAN.

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(E)           FOR PURPOSES OF MAKING PAYMENTS HEREUNDER, BUT NOT FOR PURPOSES OF
CALCULATING INTEREST ACCRUAL PERIODS, IF THE PAYMENT DATE OF A GIVEN MONTH SHALL
NOT BE A BUSINESS DAY, THEN THE PAYMENT DATE FOR SUCH MONTH SHALL BE THE
SUCCEEDING BUSINESS DAY.

3.             EVENT OF DEFAULT; DEFAULT INTEREST; LATE CHARGE.  UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE INDEBTEDNESS
SHALL (A) BECOME DUE AND PAYABLE AS PROVIDED IN ARTICLE 8 OF THE LOAN AGREEMENT,
AND (B) BEAR INTEREST AT A PER ANNUM INTEREST RATE EQUAL TO THE LESSER OF
(I) THE MAXIMUM AMOUNT (AS DEFINED IN SECTION 8), AND (II) THE INTEREST RATE
PLUS FIVE PERCENT (5%) (THE “DEFAULT RATE”).  IF MAKER FAILS TO PAY ANY INTEREST
DUE UNDER THE LOAN DOCUMENTS ON THE DATE WHEN THE SAME IS DUE, MAKER SHALL PAY
TO HOLDER UPON DEMAND A LATE CHARGE ON SUCH SUM IN AN AMOUNT EQUAL TO THE LESSER
OF (I) FIVE PERCENT (5%) OF SUCH UNPAID AMOUNT, AND (II) THE MAXIMUM LATE CHARGE
PERMITTED TO BE CHARGED UNDER THE LAWS OF THE STATE OF WHERE THE PROPERTY IS
LOCATED (A “LATE CHARGE”).  MAKER WILL ALSO PAY TO HOLDER UPON DEMAND, AFTER AN
EVENT OF DEFAULT OCCURS, IN ADDITION TO THE AMOUNT DUE AND ANY LATE CHARGES, ALL
REASONABLE COSTS OF COLLECTING, SECURING, OR ATTEMPTING TO COLLECT OR SECURE
THIS NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, COURT COSTS
AND REASONABLE ATTORNEYS’ FEES (INCLUDING REASONABLE ATTORNEYS’ FEES ON ANY
APPEAL BY EITHER MAKER OR HOLDER AND IN ANY BANKRUPTCY PROCEEDINGS).

4.             PREPAYMENT; DEFEASANCE.

(A)           MAKER SHALL NOT BE PERMITTED AT ANY TIME TO PREPAY ALL OR ANY PART
OF THE LOAN EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 4.  PROVIDED NO EVENT
OF DEFAULT THEN EXISTS, AND SO LONG AS MAKER HAS GIVEN HOLDER NOT LESS THAN
FIFTEEN (15) DAYS’ PRIOR WRITTEN NOTICE, MAKER MAY VOLUNTARILY PREPAY THE
INDEBTEDNESS IN FULL BUT NOT IN PART ONLY ON OR AFTER THE DATE WHICH IS THREE
(3) PAYMENT DATES PRIOR TO THE MATURITY DATE (THE “OPEN PERIOD DATE”) (AND THERE
SHALL BE NO YIELD MAINTENANCE PREMIUM OR PENALTY ASSESSED AGAINST MAKER BY
REASON OF SUCH PREPAYMENT).  IF ANY SUCH PREPAYMENT IS NOT MADE ON A PAYMENT
DATE, MAKER SHALL ALSO PAY TO HOLDER INTEREST CALCULATED AT THE INTEREST RATE
THAT WOULD HAVE ACCRUED ON SUCH PREPAID PRINCIPAL INDEBTEDNESS THROUGH THE END
OF THE INTEREST ACCRUAL PERIOD IN WHICH SUCH PREPAYMENT OCCURS.

(B)           PROVIDED THAT NO EVENT OF DEFAULT THEN EXISTS, AFTER THE EARLIER
TO OCCUR OF (I) TWO (2) YEARS AFTER “START-UP DAY” (WITHIN THE MEANING OF
SECTION 860G(A)(9) OF THE CODE) OF ANY REAL ESTATE MORTGAGE INVESTMENT CONDUIT
(AS DEFINED UNDER SECTION 860D OF THE CODE) (A “REMIC”) THAT HOLDS THE NOTE, AND
(II) THREE (3) YEARS AFTER THE CLOSING DATE, MAKER MAY CAUSE THE RELEASE OF THE
PROPERTY FROM THE LIENS OF THE LOAN DOCUMENTS UPON SATISFACTION OF THE FOLLOWING
CONDITIONS:

(I)            MAKER SHALL (A) PROVIDE NOT LESS THAN FIFTEEN (15) DAYS’ PRIOR
WRITTEN NOTICE TO HOLDER SPECIFYING A PAYMENT DATE (THE “DEFEASANCE RELEASE
DATE”) ON WHICH THE PAYMENTS AND DEPOSITS PROVIDED IN CLAUSES (B) THROUGH (E)
BELOW ARE TO BE MADE; (B) PAY ALL INTEREST ACCRUED AND UNPAID ON THE
INDEBTEDNESS TO AND INCLUDING THE DEFEASANCE RELEASE DATE; (C) PAY ALL
REASONABLE FEES AND EXPENSES ASSOCIATED WITH THE DEFEASANCE OF THE LOAN
(INCLUDING, WITHOUT LIMITATION, FEES OF RATING AGENCIES AND ACCOUNTANTS, AND
ATTORNEYS) AND ALL OTHER SUMS THEN DUE AND PAYABLE UNDER THE LOAN DOCUMENTS;
(D) DELIVER TO HOLDER, “GOVERNMENT SECURITIES” AS USED IN SECTION 2(A)(16) OF
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (15 U.S.C. 80A-1) AND WHICH ARE
NOT SUBJECT TO PREPAYMENT, CALL OR EARLY REDEMPTION (“U.S. OBLIGATIONS”) (1)

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HAVING MATURITY DATES OR BEING REDEEMABLE ON OR PRIOR TO, BUT AS CLOSE AS
POSSIBLE TO, THE BUSINESS DAY IMMEDIATELY PRECEDING EACH SUCCESSIVE SCHEDULED
PAYMENT DATE (AFTER THE DEFEASANCE RELEASE DATE) THROUGH AND INCLUDING THE OPEN
PERIOD DATE, (2) IN AMOUNTS SUFFICIENT TO PAY (Y) ALL SCHEDULED PRINCIPAL AND
INTEREST PAYMENTS ON THIS NOTE ON EACH PAYMENT DATE THROUGH AND INCLUDING THE
OPEN PERIOD DATE, AND (Z) THE PRINCIPAL INDEBTEDNESS AS OF THE OPEN PERIOD DATE,
AND (3) PAYABLE DIRECTLY TO HOLDER; AND (E) DELIVER TO HOLDER (1) A SECURITY
AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO HOLDER, CREATING A FIRST
PRIORITY PERFECTED LIEN ON THE DEPOSITS REQUIRED PURSUANT TO THIS SECTION 4(B)
AND THE U.S. OBLIGATIONS PURCHASED IN ACCORDANCE WITH THIS SECTION 4(B) (A
“SECURITY AGREEMENT”), (2) FOR EXECUTION BY HOLDER, A RELEASE OF THE PROPERTY
FROM THE LIEN OF THE MORTGAGE IN A FORM APPROPRIATE FOR THE JURISDICTION IN
WHICH THE PROPERTY IS LOCATED, (3) A WRITTEN CERTIFICATION THAT THE REQUIREMENTS
SET FORTH IN THIS SECTION 4(B) HAVE BEEN SATISFIED, (4) AN OPINION OF MAKER’S
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO HOLDER STATING, AMONG OTHER
THINGS, THAT (X) THE U.S. OBLIGATIONS HAVE BEEN DULY AND VALIDLY ASSIGNED AND
DELIVERED TO HOLDER AND HOLDER HAS A FIRST PRIORITY PERFECTED SECURITY INTEREST
IN AND LIEN ON THE DEPOSITS REQUIRED PURSUANT TO THIS SECTION 4(B) AND A FIRST
PRIORITY PERFECTED SECURITY INTEREST IN AND LIEN ON THE U.S. OBLIGATIONS
PURCHASED PURSUANT HERETO AND THE PROCEEDS THEREOF, (Y) THE DEFEASANCE WILL NOT
ADVERSELY AFFECT THE STATUS OF ANY REMIC FORMED IN CONNECTION WITH A SECONDARY
MARKET TRANSACTION, AND (Z) IN THE EVENT OF A BANKRUPTCY PROCEEDING OR SIMILAR
OCCURRENCE WITH RESPECT TO MAKER, NONE OF THE U.S. OBLIGATIONS PURCHASED
PURSUANT HERETO NOR ANY PROCEEDS THEREOF WILL BE PROPERTY OF MAKER’S ESTATE
UNDER SECTION 541 OF THE BANKRUPTCY CODE OR ANY SIMILAR STATUTE AND THE GRANT OF
SECURITY INTEREST THEREIN TO HOLDER SHALL NOT CONSTITUTE AN AVOIDABLE PREFERENCE
UNDER SECTION 547 OF THE BANKRUPTCY CODE OR APPLICABLE STATE LAW, AND (5) SUCH
OTHER CERTIFICATES, DOCUMENTS OR INSTRUMENTS AS HOLDER MAY REQUEST INCLUDING,
WITHOUT LIMITATION, (Y) WRITTEN CONFIRMATION FROM THE RELEVANT RATING AGENCIES
THAT SUCH DEFEASANCE WILL NOT CAUSE ANY RATING AGENCY TO WITHDRAW, QUALIFY OR
DOWNGRADE THE THEN-APPLICABLE RATING ON ANY SECURITY ISSUED IN CONNECTION WITH
ANY SECONDARY MARKET TRANSACTION, AND (Z) A CERTIFICATE FROM A CERTIFIED PUBLIC
ACCOUNTANT REASONABLY ACCEPTABLE TO HOLDER CERTIFYING THAT THE AMOUNTS OF THE
U.S. OBLIGATIONS SATISFY ALL OF THE REQUIREMENTS OF THIS NOTE.  IN CONNECTION
WITH THE FOREGOING, MAKER APPOINTS HOLDER AS MAKER’S AGENT FOR THE PURPOSE OF
APPLYING THE AMOUNTS DELIVERED PURSUANT TO THIS SECTION 4(B) TO PURCHASE U.S.
OBLIGATIONS.

(II)           IF ANY NOTICE OF DEFEASANCE IS GIVEN, MAKER SHALL BE REQUIRED TO
DEFEASE THE LOAN ON THE DEFEASANCE RELEASE DATE (UNLESS SUCH NOTICE IS REVOKED
IN WRITING BY MAKER PRIOR TO THE DATE SPECIFIED THEREIN IN WHICH EVENT MAKER
SHALL IMMEDIATELY REIMBURSE HOLDER FOR ANY REASONABLE COSTS INCURRED BY HOLDER
IN CONNECTION WITH MAKER’S GIVING OF SUCH NOTICE AND REVOCATION).

(III)          IN CONNECTION WITH A DEFEASANCE OF THE LOAN, MAKER MAY ASSIGN TO
SUCH OTHER ENTITY OR ENTITIES ESTABLISHED OR DESIGNATED BY MAKER AND APPROVED BY
HOLDER IN ITS REASONABLE DISCRETION (THE “SUCCESSOR OBLIGOR”) ALL OF MAKER’S
OBLIGATIONS UNDER THIS NOTE, THE OTHER LOAN DOCUMENTS AND THE SECURITY AGREEMENT
TOGETHER WITH THE PLEDGED U.S. OBLIGATIONS.  THE SUCCESSOR OBLIGOR SHALL ASSUME,
IN A WRITING OR WRITINGS REASONABLY SATISFACTORY TO HOLDER, ALL OF MAKER’S
OBLIGATIONS UNDER THIS NOTE, THE OTHER LOAN DOCUMENTS AND THE SECURITY AGREEMENT
AND, UPON SUCH ASSIGNMENT MAKER SHALL, EXCEPT AS SET FORTH HEREIN, BE RELIEVED
OF ITS OBLIGATIONS HEREUNDER.  IF A SUCCESSOR OBLIGOR ASSUMES ALL OR ANY PART OF
MAKER’S OBLIGATIONS, HOLDER MAY REQUIRE AS A CONDITION TO SUCH DEFEASANCE, SUCH
ADDITIONAL LEGAL OPINIONS FROM MAKER’S COUNSEL AS HOLDER REASONABLY DEEMS
NECESSARY TO CONFIRM THE VALID CREATION AND

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AUTHORITY OF THE SUCCESSOR OBLIGOR, THE ASSIGNMENT AND ASSUMPTION OF THE LOAN,
THE SECURITY AGREEMENT AND THE PLEDGED U.S. OBLIGATIONS BETWEEN MAKER AND
SUCCESSOR OBLIGOR, AND THE ENFORCEABILITY OF THE ASSIGNMENT DOCUMENTS AND OF THE
LOAN DOCUMENTS AS THE OBLIGATION OF SUCCESSOR OBLIGOR.  NOTWITHSTANDING THE
FOREGOING OR ANYTHING ELSE IN THIS SECTION 4(B), NOTHING IN THIS SECTION 4(B)
SHALL RELEASE MAKER FROM ANY LIABILITY OR OBLIGATION RELATING TO ANY
ENVIRONMENTAL MATTERS ARISING UNDER ARTICLE 9 OF THE LOAN AGREEMENT.

(C)           EXCEPT AS SPECIFICALLY SET FORTH IN SECTIONS 2, 4(A) AND 4(B)
ABOVE, OR IN SECTIONS 7.6(C) OR 12.28 OF THE LOAN AGREEMENT, UPON ANY OTHER
REPAYMENT OF THE PRINCIPAL INDEBTEDNESS (INCLUDING IN CONNECTION WITH AN
ACCELERATION OF THE LOAN), MAKER SHALL PAY TO HOLDER ON THE DATE OF SUCH
REPAYMENT, THE AMOUNT THAT, WHEN ADDED TO THE AMOUNT OTHERWISE BEING REPAID
WOULD BE SUFFICIENT TO PURCHASE U.S. OBLIGATIONS THAT SATISFY THE REQUIREMENTS
OF SECTION 4(B) ABOVE (THE “YIELD MAINTENANCE PREMIUM”); PROVIDED, HOWEVER,
UNDER NO CIRCUMSTANCES SHALL THE YIELD MAINTENANCE PREMIUM BE LESS THAN ZERO. 
ALL YIELD MAINTENANCE PREMIUM PAYMENTS HEREUNDER SHALL BE DEEMED EARNED BY
HOLDER UPON THE FUNDING OF THE LOAN, SHALL BE REQUIRED WHETHER PAYMENT IS MADE
BY MAKER OR ANY OTHER PERSON, AND MAY BE INCLUDED IN ANY BID BY HOLDER AT A
FORECLOSURE SALE.  MAKER ACKNOWLEDGES THAT THE PROVISIONS OF THIS SECTION 4 WERE
INDEPENDENTLY BARGAINED FOR AND CONSTITUTE A SPECIFIC MATERIAL PART OF THE
CONSIDERATION GIVEN BY MAKER TO HOLDER FOR THE MAKING OF THE LOAN.

5.             METHOD AND PLACE OF PAYMENTS; APPLICATION OF PAYMENTS; MAKER
OBLIGATIONS ABSOLUTE.

(A)           EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, ALL PAYMENTS
UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE MADE TO HOLDER NOT LATER
THAN 2:00 P.M., NEW YORK CITY TIME, ON OR BEFORE THE DATE WHEN DUE, AND SHALL BE
MADE IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA IN FEDERAL OR OTHER
IMMEDIATELY AVAILABLE FUNDS TO AN ADDRESS SPECIFIED TO MAKER BY HOLDER IN
WRITING, AND ANY FUNDS RECEIVED BY HOLDER AFTER SUCH TIME, FOR ALL PURPOSES
HEREOF, SHALL BE DEEMED TO HAVE BEEN PAID ON THE NEXT SUCCEEDING BUSINESS DAY.

(B)           ALL PROCEEDS OF PAYMENT, INCLUDING ANY PAYMENT OR RECOVERY ON THE
PROPERTY, SHALL BE APPLIED TO THE INDEBTEDNESS IN SUCH ORDER AND IN SUCH MANNER
AS HOLDER SHALL ELECT IN HOLDER’S DISCRETION.

(C)           EXCEPT AS SPECIFICALLY SET FORTH IN ANY LOAN DOCUMENT, ALL SUMS
PAYABLE BY MAKER UNDER ANY LOAN DOCUMENT SHALL BE PAID WITHOUT NOTICE, DEMAND,
COUNTERCLAIM (OTHER THAN MANDATORY COUNTERCLAIMS), SETOFF, DEDUCTION OR DEFENSE
AND WITHOUT ABATEMENT, SUSPENSION, DEFERMENT, DIMINUTION OR REDUCTION.

6.             SECURITY.  THE OBLIGATIONS OF MAKER UNDER THIS NOTE ARE SECURED
BY, AMONG OTHER THINGS, THE MORTGAGE AND LIENS OF THE OTHER LOAN DOCUMENTS
GRANTED IN FAVOR OF HOLDER BY MAKER AND/OR ENCUMBERING OR AFFECTING THE
PROPERTY.

7.             WAIVERS.  WITH RESPECT TO THE AMOUNTS DUE PURSUANT TO THIS NOTE
OR ANY OTHER LOAN DOCUMENT EXCEPT AS EXPRESSLY PROVIDED IN THIS NOTE OR THE LOAN
DOCUMENTS, MAKER WAIVES THE FOLLOWING:  (A) ALL RIGHTS OF EXEMPTION OF PROPERTY
FROM LEVY OR SALE UNDER EXECUTION OR OTHER PROCESS FOR THE COLLECTION OF DEBTS
UNDER THE CONSTITUTION OR LAWS OF THE UNITED STATES OR ANY

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STATE THEREOF; (B) DEMAND, PRESENTMENT, PROTEST, NOTICE OF DISHONOR, NOTICE OF
NONPAYMENT, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE, NOTICE OF
ACCELERATION, SUIT AGAINST ANY PARTY, DILIGENCE IN COLLECTION OF THIS NOTE AND
IN THE HANDLING OF SECURITIES AT ANY TIME EXISTING IN CONNECTION HEREWITH, AND
ALL OTHER REQUIREMENTS NECESSARY TO ENFORCE THIS NOTE EXCEPT FOR NOTICES
REQUIRED BY GOVERNMENTAL AUTHORITIES AND NOTICES REQUIRED BY THE LOAN AGREEMENT;
AND (C) ANY FURTHER RECEIPT BY HOLDER OR ACKNOWLEDGMENT BY HOLDER OF ANY
COLLATERAL NOW OR HEREAFTER DEPOSITED AS SECURITY FOR THE LOAN.

8.             USURY SAVINGS CLAUSE.  THIS NOTE AND THE OTHER LOAN DOCUMENTS ARE
SUBJECT TO THE EXPRESS CONDITION THAT AT NO TIME SHALL MAKER BE OBLIGATED OR
REQUIRED TO PAY INTEREST ON THE INDEBTEDNESS AT A RATE WHICH COULD SUBJECT
HOLDER TO EITHER CIVIL OR CRIMINAL LIABILITY AS A RESULT OF BEING IN EXCESS OF
THE MAXIMUM RATE OF INTEREST DESIGNATED BY APPLICABLE LAWS RELATING TO PAYMENT
OF INTEREST AND USURY (THE “MAXIMUM AMOUNT”).  IF, BY THE TERMS OF THIS NOTE OR
THE OTHER LOAN DOCUMENTS, MAKER IS AT ANY TIME REQUIRED OR OBLIGATED TO PAY
INTEREST ON THE INDEBTEDNESS AT A RATE IN EXCESS OF THE MAXIMUM AMOUNT, THE
INTEREST RATE SHALL BE DEEMED TO BE IMMEDIATELY REDUCED TO THE MAXIMUM AMOUNT
AND ALL PREVIOUS PAYMENTS IN EXCESS OF THE MAXIMUM AMOUNT SHALL BE DEEMED TO
HAVE BEEN PAYMENTS IN REDUCTION OF PRINCIPAL AND NOT ON ACCOUNT OF THE INTEREST
DUE HEREUNDER.  ALL SUMS PAID OR AGREED TO BE PAID TO HOLDER FOR THE USE,
FORBEARANCE, OR DETENTION OF THE SUMS DUE UNDER THE LOAN, SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD
THROUGHOUT THE FULL STATED TERM OF THE LOAN UNTIL PAYMENT IN FULL SO THAT THE
RATE OR AMOUNT OF INTEREST ON ACCOUNT OF THE LOAN DOES NOT EXCEED THE MAXIMUM
AMOUNT FROM TIME TO TIME IN EFFECT AND APPLICABLE TO THE LOAN FOR SO LONG AS THE
LOAN IS OUTSTANDING.

9.             MODIFICATIONS; REMEDIES CUMULATIVE; SETOFFS.  HOLDER SHALL NOT BY
ANY ACT, DELAY, OMISSION OR OTHERWISE BE DEEMED TO HAVE MODIFIED, AMENDED,
WAIVED, EXTENDED, DISCHARGED OR TERMINATED ANY OF ITS RIGHTS OR REMEDIES, AND NO
MODIFICATION, AMENDMENT, WAIVER, EXTENSION, DISCHARGE OR TERMINATION OF ANY KIND
SHALL BE VALID UNLESS IN WRITING AND SIGNED BY HOLDER AND MAKER.  ALL RIGHTS AND
REMEDIES OF HOLDER UNDER THE TERMS OF THIS NOTE AND APPLICABLE STATUTES OR RULES
OF LAW SHALL BE CUMULATIVE, AND MAY BE EXERCISED SUCCESSIVELY OR CONCURRENTLY. 
MAKER AGREES THAT THERE ARE NO DEFENSES, EQUITIES OR SETOFFS WITH RESPECT TO THE
OBLIGATIONS SET FORTH HEREIN AS OF THE DATE HEREOF, AND TO THE EXTENT ANY SUCH
DEFENSES, EQUITIES, OR SETOFFS MAY EXIST, THE SAME ARE HEREBY EXPRESSLY
RELEASED, FORGIVEN, WAIVED AND FOREVER DISCHARGED.

10.           SEVERABILITY.  WHEREVER POSSIBLE, EACH PROVISION OF THIS NOTE
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LEGAL REQUIREMENTS, BUT IF ANY PROVISION OF THIS NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LEGAL REQUIREMENTS, SUCH PROVISION
SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
NOTE.

11.           RELEASE.  HOLDER MAY, AT ITS OPTION, RELEASE ANY PROPERTY GIVEN TO
SECURE THE INDEBTEDNESS, AND NO SUCH RELEASE SHALL IMPAIR THE OBLIGATIONS OF
MAKER TO HOLDER.

12.           GOVERNING LAW.  THIS NOTE AND EACH OF THE OTHER LOAN DOCUMENTS
SHALL BE INTERPRETED AND ENFORCED ACCORDING TO THE LAWS OF THE STATE WHERE THE
PROPERTY IS LOCATED (WITHOUT GIVING EFFECT TO RULES REGARDING CONFLICT OF LAWS).

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13.           VENUE.  MAKER HEREBY CONSENTS AND SUBMITS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY AND
STATE WHERE THE PROPERTY IS LOCATED WITH RESPECT TO ANY LEGAL ACTION OR
PROCEEDING ARISING WITH RESPECT TO THE LOAN DOCUMENTS AND WAIVES ALL OBJECTIONS
WHICH IT MAY HAVE TO SUCH JURISDICTION AND VENUE.  NOTHING HEREIN SHALL,
HOWEVER, PRECLUDE OR PREVENT HOLDER FROM BRINGING ACTIONS AGAINST MAKER IN ANY
OTHER JURISDICTION AS MAY BE NECESSARY TO ENFORCE OR REALIZE UPON THE SECURITY
FOR THE LOAN PROVIDED IN ANY OF THE LOAN DOCUMENTS.

14.           WAIVER OF JURY TRIAL.  MAKER AND HOLDER TO THE FULLEST EXTENT THAT
THEY MAY LAWFULLY DO SO, WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH
RESPECT TO THIS NOTE OR THE OTHER LOAN DOCUMENTS.  EACH OF MAKER AND HOLDER
AGREES THAT THE OTHER MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF THE OTHER
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE FULLEST EXTENT
THAT IT MAY LAWFULLY DO SO, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN MAKER
AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

15.           SALES AND ASSIGNMENTS.  HOLDER MAY ASSIGN, SELL, SECURITIZE,
PARTICIPATE, PLEDGE AND/OR OTHERWISE TRANSFER ALL OR ANY PORTION OF HOLDER’S
RIGHT, TITLE AND INTEREST IN, TO AND UNDER THIS NOTE AND/OR THE OTHER LOAN
DOCUMENTS IN ONE OR MORE TRANSACTIONS AS SET FORTH IN THE LOAN AGREEMENT.

16.           DUE ON SALE; DUE ON ENCUMBRANCE.  MAKER UNDERSTANDS THAT IN MAKING
THE LOAN, HOLDER IS RELYING TO A MATERIAL EXTENT UPON THE BUSINESS EXPERTISE
AND/OR NET WORTH OF MAKER AND, IF MAKER IS ALSO AN ENTITY, ITS PARTNERS,
MEMBERS, OFFICERS OR PRINCIPALS AND UPON THE CONTINUING INTEREST WHICH MAKER OR
ITS PARTNERS, MEMBERS, OFFICERS OR PRINCIPALS WILL HAVE IN THE PROPERTY AND IN
MAKER, RESPECTIVELY, AND THAT A VIOLATION OF SECTION 6.1 OF THE LOAN AGREEMENT
MAY SIGNIFICANTLY AND MATERIALLY ALTER OR REDUCE HOLDER’S SECURITY FOR THIS
NOTE.  ACCORDINGLY, IN THE EVENT THAT A VIOLATION OF SECTION 6.1 OF THE LOAN
AGREEMENT OCCURS, THEN THE SAME SHALL BE DEEMED TO INCREASE THE RISK OF HOLDER
AND HOLDER MAY THEN, OR AT ANY TIME THEREAFTER, DECLARE THE ENTIRE INDEBTEDNESS
IMMEDIATELY DUE AND PAYABLE.

17.           EXCULPATION.  SUBJECT TO THE QUALIFICATIONS BELOW, HOLDER SHALL
NOT ENFORCE THE LIABILITY AND OBLIGATION OF MAKER TO PERFORM AND OBSERVE THE
OBLIGATIONS CONTAINED IN THE LOAN DOCUMENTS BY ANY ACTION OR PROCEEDING WHEREIN
A MONEY JUDGMENT SHALL BE SOUGHT AGAINST MAKER OR ITS AFFILIATES, PRINCIPALS,
SHAREHOLDERS OR MEMBERS, EXCEPT THAT HOLDER MAY BRING A FORECLOSURE ACTION, AN
ACTION FOR SPECIFIC PERFORMANCE OR ANY OTHER APPROPRIATE ACTION OR PROCEEDING TO
ENABLE HOLDER TO ENFORCE AND REALIZE UPON ITS INTEREST AND RIGHTS UNDER THE LOAN
DOCUMENTS, OR IN THE PROPERTY, THE RENTS, THE INSURANCE PROCEEDS, THE
CONDEMNATION PROCEEDS OR ANY OTHER COLLATERAL GIVEN TO HOLDER PURSUANT TO THE
LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT, EXCEPT AS SPECIFICALLY PROVIDED HEREIN,
ANY JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE ENFORCEABLE AGAINST MAKER
ONLY TO THE EXTENT OF MAKER’S INTEREST IN THE PROPERTY, THE RENTS, THE INSURANCE
PROCEEDS, THE CONDEMNATION PROCEEDS AND ANY OTHER COLLATERAL GIVEN TO HOLDER,
AND

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HOLDER AGREES THAT IT SHALL NOT SUE FOR, SEEK OR DEMAND ANY DEFICIENCY JUDGMENT
AGAINST MAKER IN ANY SUCH ACTION OR PROCEEDING UNDER OR BY REASON OF OR UNDER OR
IN CONNECTION WITH ANY LOAN DOCUMENT.  THE PROVISIONS OF THIS SECTION 17 SHALL
NOT, HOWEVER, (A) CONSTITUTE A WAIVER, RELEASE OR IMPAIRMENT OF ANY OBLIGATION
EVIDENCED OR SECURED BY ANY LOAN DOCUMENT; (B) IMPAIR THE RIGHT OF HOLDER TO
NAME MAKER AS A PARTY DEFENDANT IN ANY ACTION OR SUIT FOR FORECLOSURE AND SALE
UNDER THE MORTGAGE; (C) AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OF THE LOAN
DOCUMENTS OR ANY GUARANTY MADE IN CONNECTION WITH THE LOAN OR ANY OF THE RIGHTS
AND REMEDIES OF THE HOLDER THEREUNDER; (D) IMPAIR THE RIGHT OF HOLDER TO OBTAIN
THE APPOINTMENT OF A RECEIVER; (E) IMPAIR THE ENFORCEMENT OF THE MORTGAGE; (F)
CONSTITUTE A PROHIBITION AGAINST HOLDER TO SEEK A DEFICIENCY JUDGMENT AGAINST
MAKER IN ORDER TO FULLY REALIZE THE SECURITY GRANTED BY THE MORTGAGE OR TO
COMMENCE ANY OTHER APPROPRIATE ACTION OR PROCEEDING IN ORDER FOR HOLDER TO
EXERCISE ITS REMEDIES AGAINST ALL OF THE PROPERTY; OR (G) CONSTITUTE A WAIVER OF
THE RIGHT OF HOLDER TO ENFORCE THE LIABILITY AND OBLIGATION OF MAKER BY MONEY
JUDGMENT OR OTHERWISE, TO THE EXTENT OF ANY LOSSES INCURRED BY HOLDER ARISING
OUT OF OR IN CONNECTION WITH THE FOLLOWING (EACH, A “RECOURSE LIABILITY” AND
COLLECTIVELY, THE “RECOURSE LIABILITIES”):

(I)            INTENTIONAL FRAUD OR INTENTIONAL MISREPRESENTATION BY MAKER OR
GUARANTOR IN CONNECTION WITH THE LOAN;

(II)           THE INTENTIONAL MATERIAL BREACH OF ANY REPRESENTATION, WARRANTY,
COVENANT OR INDEMNIFICATION PROVISION IN ANY LOAN DOCUMENT BY MAKER OR GUARANTOR
CONCERNING ENVIRONMENTAL LAWS OR HAZARDOUS SUBSTANCES, AND ANY INDEMNIFICATION
OF HOLDER WITH RESPECT THERETO CONTAINED IN ANY LOAN DOCUMENT;

(III)          ANY ACT OF ACTIVE INTENTIONAL PHYSICAL WASTE BY MAKER OR
GUARANTOR OF THE PROPERTY OR ANY PORTION THEREOF, OR, DURING THE CONTINUANCE OF
ANY EVENT OF DEFAULT, THE REMOVAL OR DISPOSAL OF ANY PORTION OF THE PROPERTY BY
MAKER OR GUARANTOR;

(IV)          THE INTENTIONAL MISAPPLICATION, MISAPPROPRIATION, OR CONVERSION BY
MAKER, GUARANTOR, OR ANY AFFILIATE OF EITHER OF (A) ANY INSURANCE PROCEEDS PAID
BY REASON OF ANY CASUALTY, (B) ANY CONDEMNATION PROCEEDS RECEIVED IN CONNECTION
WITH ANY TAKING OR (C) SECURITY DEPOSITS; OR

(V)           THE INTENTIONAL MISAPPLICATION, MISAPPROPRIATION OR CONVERSION BY
MAKER OR GUARANTOR OR ANY AFFILIATE OF ANY RENTS DURING THE CONTINUANCE OF ANY
EVENT OF DEFAULT.

Notwithstanding anything to the contrary in this Note or any of the Loan
Documents, (A) Holder shall not be deemed to have waived any right which Holder
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Indebtedness or
to require that all collateral shall continue to secure all of the Indebtedness
in accordance with the Loan Documents, and (B) Holder’s agreement not to pursue
personal liability of Maker as set forth above SHALL BECOME NULL AND VOID and
shall be of no further force and effect, and the Indebtedness shall be fully
recourse to Maker in the event that one or more of the following occurs (each, a
“Full Recourse Event”):  (1) a voluntary Event of Default occurs under Article 6
of the Loan Agreement; (2) Maker files a voluntary petition under the U.S.
Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or
(3) Maker, Guarantor, or any Affiliate, officer, director, or representative of
Maker or Guarantor,

7

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files or acquiesces in the filing of, or Maker acquiesces in the filing of, an
involuntary petition under the U.S. Bankruptcy Code or any other federal or
state bankruptcy or insolvency law against Maker.

18.           LOCAL LAW PROVISIONS.  IN THE EVENT OF ANY INCONSISTENCIES BETWEEN
THE TERMS AND CONDITIONS OF THIS SECTION 18 AND THE OTHER TERMS AND CONDITIONS
OF THIS NOTE, THE TERMS AND CONDITIONS OF THIS SECTION 18 SHALL CONTROL AND BE
BINDING.

(a)           MAKER HEREBY EXPRESSLY WAIVES ANY RIGHTS IT MAY HAVE UNDER
CALIFORNIA CIVIL CODE SECTION 2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART,
WITHOUT PAYMENT OF A PREPAYMENT CHARGE, UPON ACCELERATION OF THE MATURITY DATE
OF THIS NOTE, AND AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF ANY OR ALL OF
THIS NOTE IS MADE UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF
THIS NOTE BY HOLDER ON ACCOUNT OF ANY DEFAULT BY MAKER, INCLUDING, BUT NOT
LIMITED TO, ANY TRANSFER, DISPOSITION OR FURTHER ENCUMBRANCE AS PROHIBITED OR
RESTRICTED BY THE LOAN AGREEMENT, THEN MAKER SHALL BE OBLIGATED TO PAY,
CONCURRENTLY THEREWITH, AS A PREPAYMENT CHARGE, THE APPLICABLE SUM SPECIFIED IN
THE LOAN AGREEMENT.  BY INITIALING THIS PROVISION IN THE SPACE PROVIDED BELOW,
MAKER HEREBY DECLARES THAT HOLDER’S AGREEMENT TO MAKE THE LOAN EVIDENCED BY THIS
NOTE AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES
ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND
AGREEMENT.

MAKER’S INITIALS:  By:

 

 

[Signature on the following page]

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IN WITNESS WHEREOF, Maker has caused this Promissory Note to be properly
executed as of the date first above written and has authorized this Promissory
Note to be dated as of the day and year first above written.

 

 

MAKER:

 

 

 

 

 

WESTCORE LUNDY, LLC, a Delaware limited
liability company

 

 

 

 

 

By:

WESTCORE LUNDY PARTNERS, a
Delaware general partnership, its sole Member

 

 

 

 

 

 

 

By:

WP LUNDY, LLC, a Delaware limited
liability company, its Managing Partner

 

 

 

 

 

 

 

 

 

By:

MRB MANAGER, LLC, a
Delaware limited liability
company, its Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

Promissory Note

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