exv10w3






EXHIBIT
10.3




Promissory Note




			
	 	 	 
	$1,886,000.00
	 	January 9, 2009






     For Value Received, the undersigned AWARE DEVELOPMENT COMPANY, INC., a California
corporation (“Borrower”), promises to pay to the order of SPT REAL ESTATE FINANCE, LLC, a
Delaware limited liability company (“Lender”) (the legal holder from time to time of this
Note, including Lender as the initial holder, hereinafter referred to as “Lender”), at the
office of Lender at 8951 Research Drive, Irvine, California 92618, or at such other place or
places as Lender from time to time may designate in writing, the principal sum of One Million Eight
Hundred Eighty-Six Thousand and No/100 Dollars ($1,886,000.00) or such lesser amount thereof as
shall be outstanding from time to time (the “Principal Amount”), and shall bear interest at
the rate of twenty-eight percent (28.00%) per annum, on the outstanding principal balance hereunder
from time to time, from and after the date hereof and through the “Maturity Date” (as defined
below), pursuant to and in accordance with the terms hereof. This Note is made and entered into
pursuant to, and is secured by, that certain Collateral Assignment and Pledge of Note, Deed of
Trust and Loan Documents by and between Borrower and Lender of even date herewith (the “Pledge
Agreement”). This Note, the Pledge Agreement and all other documents securing, evidencing or
relating to the Loan may be collectively referred to herein as the “Loan Documents.”



     Interest shall accrue on the outstanding balance hereof from and after the date hereof, at the
rate specified herein, through July 9, 2009 (the “Maturity Date”), unless sooner repaid in
full. Borrower shall pay all sums outstanding hereunder, including all principal and accrued and
unpaid interest, on or before the Maturity Date. Notwithstanding anything to the contrary herein,
interest shall be computed, for any partial month during which principal is outstanding, on the
basis of a 365 day year, for actual days elapsed while principal is outstanding. Each payment
under this Note shall be credited first against accrued and unpaid interest, then against other
amounts advanced or incurred hereunder other than principal, and then against principal. Principal
and interest shall be payable in lawful money of the United States of America.



     This Note may not be prepaid in whole or in part at any time under any circumstances, except
in connection with a payoff of the “Vineyard Note” (as defined in the Pledge Agreement) in
accordance with the Pledge Agreement.



     If any payment of principal or interest under this Note shall not be made when due, a late
charge of six percent (6%) of the overdue amount shall be immediately due and payable to Lender for
the purpose of defraying the expenses incident to handling such delinquent payments. Such late
charge represents a reasonable sum considering all of the circumstances existing on the date of
this Note and represents a fair and reasonable estimate of the costs that will be sustained by
Lender due to the failure of Borrower to make timely payments. The parties further agree that
proof of actual damages would be costly or inconvenient. Such late charge shall be paid without
prejudice to the right of Lender to collect any other amounts provided to be paid or to declare a
default under this Note or from exercising any of the other rights and remedies of Lender. In
furtherance of the foregoing, Borrower hereby waives the notice requirements of Section 2954.5 of
the California Civil Code if the same are applicable to this Note. All such Default Rate interest
and late charges shall be assessed automatically by Lender without notice to Borrower, and any
failure to invoice Borrower therefor shall not be deemed waiver thereof.



Borrower’s
Initials: JF                  




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     Any failure to pay any amount due hereunder, including payment of all amounts due hereunder at
the Maturity Date, or any failure to comply with any non-monetary obligation within ten (10) days
after notice thereof, shall constitute an immediate “Event of Default”. Without limiting the
generality of the foregoing, if an Event of Default occurs, then the Lender may, at its option,
without further notice to or demand upon Borrower, declare immediately due and payable the entire
principal balance hereof together with all accrued and unpaid interest thereon, plus any other
amounts then owing pursuant to this Note, whereupon the same shall be immediately due and payable.
This option may be exercised at any time after any Event of Default has occurred and is continuing,
and the acceptance of one or more payments from any person thereafter shall not constitute a waiver
of this option of Lender.



     If any Event of Default occurs, Borrower and its successors and assigns promise to pay all
reasonable costs and expenses, including without limitation all attorneys’ fees and costs, incurred
by the Lender hereof in collecting or attempting to collect the indebtedness under this Note,
whether or not any action or proceeding is commenced.



     Borrower covenants, represents and warrants that the proceeds of the loan evidenced by this
Note (the “Loan”) are intended to be used, and will at all times be used by Borrower exclusively
for commercial, investment or other business purposes and not for personal, family or household
purposes. Borrower further represents and warrants that (a) it is a sophisticated investor within
the meaning of Section 25102(f) of the California Corporations Code, (b) it is represented by
counsel and has read and understood the provisions of this Note and (c) one or more of its
directors, officers and controlling persons has a preexisting personal or business relationship
with one or more of the directors, officers and controlling persons of Lender. Borrower further
acknowledges and agrees that Lender would not enter into the loan evidenced by this Note without
the foregoing covenants, representations and warranties.



     If any provisions hereof are for any reason and to any extent, invalid or unenforceable, then
neither the remainder of the document in which such provision is contained, nor the application of
the provision to other persons, entities or circumstances, nor any other document referred to
herein, shall be affected thereby, but instead shall be enforceable to the maximum extent permitted
by law.



     In the event the interest provisions hereof or any payments of interest (or any other payments
deemed under applicable law to be interest) provided for herein shall result for any reason at any
time in an effective rate of interest which transcends the limits of applicable law all sums in
excess of the amount permitted by applicable law, shall be deemed applied to the Principal Amount
immediately upon receipt of such monies by Lender, with the same force and effect as though
Borrower had specifically designated such excess amounts to be so applied to the Principal Amount
and Lender had agreed to accept such extra payment(s) as a premium-free prepayment. Any other
provision of any of the Loan Documents to the contrary notwithstanding, in no event shall any
payment under any of the Loan Documents exceed the limits imposed by applicable law for the use or
detention of money or for forbearance in seeking its collection. In addition to the foregoing,
Lender may at its sole option, to the maximum extent permitted under applicable law: (a)
characterize any non-principal payment as an expense, fee or premium rather than as interest; (b)
exclude voluntary prepayments and the effects thereof from the calculation of interest for usury
purposes; (c) spread the total amount of interest throughout the entire term of
this Note so that the interest rate payable on this Note is uniform throughout the entire term
of this Note; or (d) refund any amount which may be deemed to be interest in excess of the maximum
rate permitted by applicable law.



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     No single or partial exercise of any power hereunder or under any other Loan
Document, shall preclude any other and further exercise thereof or the exercise of any other power
or remedy at law or in equity. In circumstances where Lender is entitled to exercise its remedies
to realize upon the Collateral (as defined in the Pledge Agreement, Lender shall have the right to
proceed against any portion of the Collateral in such order and in such manner as Lender may deem
fit, without waiving any rights with respect to any other portion of the Collateral. No delay or
omission on the part of Lender in exercising any right hereunder shall operate as a waiver of such
right or of any other right under this Note. Borrower agrees that Lender’s acceptance of any
partial payment of any sums due under this Note or under any other Loan Documents or Lender’s
omission or delay in exercising any right it may have hereunder or otherwise, shall not constitute
a cure of Borrower’s default in making the full payment due, an accord and satisfaction of any such
obligation, or a waiver of any rights and remedies of Lender whatsoever in connection therewith.



     Borrower and any endorsers or guarantors and all other persons liable or to become liable on
this Note: (a) except as specifically provided otherwise in any of the Loan Documents, waive
presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this
Note, and, to the fullest extent permitted by applicable law, all other statutory requirements of
notice or demand; (b) consent to any and all renewals and extensions in the time of payment hereof;
(c) agree that at any time and from time to time without notice, the terms of payment herein may be
modified or the Collateral released in whole or in part, or increased, changed or exchanged by
agreement between Lender and any owner of the Collateral without in anywise affecting the liability
of any party to this Note or any person liable or to become liable with respect to any indebtedness
evidenced hereby; and (d) waive, to the fullest extent permitted by applicable law, the right to
plead any and all statutes of limitations as a defense to any demand on this Note, or any guaranty
hereof, or any agreement to pay the same, or any and all obligations or liabilities arising out of
or in connection with this Note or the other Loan Documents.



Borrower’s
Initials: JF                  




     This Note shall be governed by and construed in accordance with the laws of the State of
California. The obligations of Borrower under this Note shall be binding upon the undersigned and
its successors, trustees, representatives, administrators, heirs, and assigns.



     This Note, together with the other Loan Documents, constitute the entire agreement between
Borrower and Lender with respect to the loan evidenced and secured by the Loan Documents. All
understandings and agreements, oral or written, shall be deemed merged into the Loan Documents,
which, taken together, shall alone fully and completely express the agreement between the parties
with respect to the loan evidenced and secured by the Loan Documents.



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     IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed the day and year first
above written.



	 	 	 	 	 
	 	Borrower:



AWARE DEVELOPMENT COMPANY, INC.,

a California corporation

 	 
	 	By  	/s/
John D. Ford, Jr.	 
	 	 	Attorney-in-Fact
	 	 	(Print Name and Title) 	 
	 	 	 	 




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