Document:

exv10w2

 

Exhibit 10.2

INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this                      day of
                                        ,
2005 by and between Landwin REIT, Inc., a Maryland corporation (the “Company”),
and                      (the “Indemnitee”).

RECITALS

     WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;

     WHEREAS, the Indemnitee is a director and/or officer of the Company;

     WHEREAS, both the Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of companies in today’s environment;

     WHEREAS, the Company’s Articles of Incorporation (the “Charter”) provide that the Company will
indemnify its directors and officers to the full extent permitted by law and will advance expenses
in connection therewith, and the Indemnitee’s willingness to serve as a director and/or officer of
the Company is based in part on the Indemnitee’s reliance on such provisions;

     WHEREAS, the Maryland General Corporation Law (the “Maryland Statute”) expressly recognizes
that the indemnification provisions of the Maryland Statute are not exclusive of any other rights
to which a person seeking indemnification may be entitled under the Charter or Bylaws of the
Company, a resolution of stockholders or directors, an agreement or otherwise, and this Agreement
is being entered into pursuant to and in furtherance of the Charter and Bylaws, as permitted by the
Maryland Statute and as authorized by the Charter and the Board of Directors of the Company (the
“Board”); and

     WHEREAS, in recognition of the Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued service to the Company in an effective
manner, and the Indemnitee’s reliance on the aforesaid provisions of the Charter, and in part to
provide the Indemnitee with specific contractual assurance that the protection promised by such
provisions will be available to the Indemnitee (regardless of, among other things, any amendment to
or revocation of such provisions or any change in the composition of the Board or any acquisition
or business combination transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancement of expenses to the Indemnitee as set forth
in this Agreement and, to the extent insurance is maintained, for the continued coverage of the
Indemnitee under the Company’s directors’ and officers’ liability insurance policies, if any.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

     1. Indemnification.

          (a) In accordance with the provisions of subsection (b) of this Section 1, the Company shall
hold harmless and indemnify the Indemnitee against any and all reasonable expenses, liabilities and
losses (including, without limitation, investigation expenses and expert witnesses’ and attorneys’
fees and expenses, judgments, penalties, fines, ERISA excise taxes and amounts paid or to be paid
in settlement) actually incurred by the Indemnitee (net of any related insurance proceeds or other
amounts received by the Indemnitee or paid by or on behalf of the Company on the Indemnitee’s
behalf), in connection with any action, suit, arbitration or proceeding (or any inquiry or
investigation, whether brought by or in the right of the Company or otherwise, that the Indemnitee
in good faith believes might lead to the institution of any such action, suit, arbitration or
proceeding), whether civil, criminal, administrative or investigative, or any appeal therefrom, in
which the Indemnitee is a party, is threatened to be made a party, is a witness or is participating
(a “Proceeding”) based upon, arising from, relating to or by reason of the fact that Indemnitee is,
was, shall be or shall have been a director and/or officer of the Company or is or was serving,
shall serve, or shall have served at the request of the Board of Directors of the Company as a
director, officer, partner, trustee, employee or agent (“Affiliate Indemnitee”) of another foreign
or domestic corporation or non-profit corporation, cooperative, partnership, joint venture, trust
or other incorporated or unincorporated enterprise (each, a “Company Affiliate”).

          (b) In providing the foregoing indemnification, the Company shall, with respect to a
Proceeding, hold harmless and indemnify the Indemnitee to the fullest extent required by the
Maryland Statute and to the fullest extent permitted by the Express Permitted Indemnification
Provisions (as hereinafter defined) of the Maryland Statute. For purposes of this Agreement, the
“Express Permitted Indemnification Provisions” of the Maryland Statute shall mean indemnification
as permitted by Section 2-418(b) of the Maryland Statute or by any amendment thereof or other
statuary provisions expressly permitting such indemnification which is adopted after the date
hereof (but, in the case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law required or permitted the Company
to provide prior to such amendment).

          (c) Without limiting the generality of the foregoing, the Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1 for any expenses actually incurred in any
Proceeding initiated by or in the right of the Company unless the Indemnitee shall have been
adjudged to be liable to the Company.

          (d) If the Indemnitee is entitled under this Agreement to indemnification by the Company for
some or a portion of the Indemnified Amounts (as hereinafter defined) but not, however, for all of
the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion
thereof to which Indemnitee is entitled.

          (e) Notwithstanding anything herein to the contrary, if the Indemnitee (or Affiliate
Indemnitee) is unwilling to accept a settlement offer (the “Settlement Offer”) with respect to any
Proceeding, under which settlement offer no civil or criminal liability (or presumption of civil or
criminal liability) is imposed on the Indemnitee (or Affiliate Indemnitee) and the Company has
agreed in writing to pay all costs and expenses associated therewith, then

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the Company’s indemnification obligations hereunder with respect to such Proceeding shall
terminate, provided that Indemnitee shall still be entitled to receive all rights provided, and
amounts payable, under the Settlement Offer.

     2. Other Indemnification Arrangements. The Maryland Statute, the Charter and the
Bylaws of the Company permit the Company to purchase and maintain insurance or furnish similar
protection or make other arrangements, including, without limitation, providing a trust fund letter
of credit or surety bond (collectively, the “Indemnity Arrangements”) on behalf of the Indemnitee
against any liability asserted against him or incurred by or on behalf of him in such capacity as a
director or officer of the Company or as an Affiliate Indemnitee, or arising out of his status as
such, whether or not the Company would have the power to indemnify him against such liability under
the provisions of this Agreement or under the Maryland Statute, as it may then be in effect. The
purchase, establishment and maintenance of any such Indemnification Arrangement shall not in any
way limit or affect the rights and obligations of the Company or of the Indemnitee under this
Agreement except as expressly provided herein, and the execution and delivery of this Agreement by
the Company and the Indemnitee shall not in any way limit or affect the rights and obligations of
the Company or the other party or parties thereto under any such Indemnification Arrangement. All
amounts payable by the Company pursuant to this Section 2 and Section 1 hereof are herein referred
to as “Indemnified Amounts.”

     3. Advance Payment of Indemnified Amounts.

          (a) The Indemnitee hereby is granted the right to receive in advance of a final,
non-appealable judgment or other final adjudication of a Proceeding (a “Final Determination”) the
amount of any and all expenses, including, without limitation, investigation expenses, expert
witness and attorneys’ fees and other expenses expended or incurred by the Indemnitee in connection
with any Proceeding or otherwise expended or incurred by the Indemnitee (such amounts so expended
or incurred being referred to as “Advanced Amounts”).

          (b) In making any written request for Advanced Amounts, the Indemnitee shall submit to the
Company a schedule setting forth in reasonable detail the dollar amount expended or incurred and
expected to be expended. Each such listing shall be supported by the bill, agreement or other
documentation relating thereto, each of which shall be appended to the schedule as an exhibit. In
addition, before the Indemnitee may receive Advanced Amounts from the Company, the Indemnitee shall
provide to the Company (i) a written affirmation of the Indemnitee’s good faith belief that the
applicable standard of conduct required for indemnification by the Company has been satisfied by
the Indemnitee and (ii) a written undertaking by or on behalf of the Indemnitee to repay the
Advanced Amount if it shall ultimately be determined that the Indemnitee has not satisfied any
applicable standard of conduct. The written undertaking required from the Indemnitee shall be an
unlimited general obligation of the Indemnitee but need not be secured. The Company shall pay to
the Indemnitee all Advanced Amounts within ten (10) business days after receipt by the Company of
all information and documentation required to be provided by the Indemnitee pursuant to this
subsection (b).

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     4. Procedure for Payment of Indemnified Amounts.

          (a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request for payment of the appropriate Indemnified Amounts, including with such request
such documentation and information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.
The Secretary of the Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that the Indemnitee has requested indemnification.

          (b) The Company shall pay the Indemnitee the appropriate Indemnified Amounts unless it is
established that the Indemnitee has not met any applicable standard of conduct of the Express
Permitted Indemnification Provisions. For purposes of determining whether the Indemnitee is
entitled to Indemnified Amounts, in order to deny indemnification to the Indemnitee the Company has
the burden of proof in establishing that the Indemnitee did not meet the applicable standard of
conduct. In this regard, a termination of any Proceeding by judgment, order or settlement does not
create a presumption that the Indemnitee did not meet the requisite standard of conduct; provided,
however, that the termination of any criminal proceeding by conviction, or a pleading of
nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee did not meet the applicable standard
of conduct.

          (c) Any determination that the Indemnitee has not met the applicable standard of conduct
required to qualify for indemnification shall be made (i) either by the Board by a majority vote of
a quorum consisting of directors who were not parties of such action, suit or proceeding or (ii) by
independent legal counsel (who may be the outside counsel regularly employed by the Company),
provided that the manner in which (and, if applicable, the counsel by which) the right to
indemnification is to be determined shall be approved in advance in writing by both the highest
ranking executive officer of the Company who is not party to such action (sometimes hereinafter
referred to as the “Senior Officer”) and by the Indemnitee. In the event that such parties are
unable to agree on the manner in which any such determination is to be made, such determination
shall be made by independent legal counsel retained by the Company especially for such purpose,
provided that such counsel be approved in advance in writing by both the Senior Officer and the
Indemnitee and, provided further, that such counsel shall not be outside counsel regularly employed
by the Company. The fees and expenses of counsel in connection with making said determination
contemplated hereunder shall be paid by the Company, and if requested by such counsel, the Company
shall give such counsel an appropriate written agreement with respect to the payment of their fees
and expenses and such other matters as may be reasonably requested by counsel.

          (d) The Company will use its best efforts to conclude as soon as practicable any required
determination pursuant to subsection (c) above and promptly will advise the Indemnitee in writing
with respect to any determination that the Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has been denied. Payment
of any applicable Indemnified Amounts will be made to the Indemnitee within ten (10) days after any
determination of the Indemnitee’s entitlement to indemnification.

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          (e) Notwithstanding the foregoing, the Indemnitee may, at any time sixty (60) days after a
claim for Indemnified Amounts has been filed with the Company (or upon receipt of written notice
that a claim for Indemnified Amounts has been rejected, if earlier) and before three (3) years
after a claim for Indemnified Amounts has been filed, petition a court of competent jurisdiction to
determine whether the Indemnitee is entitled to indemnification under the provisions of this
Agreement, and such court shall thereupon have the exclusive authority to make such determination
unless and until such court dismisses or otherwise terminates such action without having made such
determination. The court shall, as petitioned, make an independent determination of whether the
Indemnitee is entitled to indemnification as provided under this Agreement, irrespective of any
prior determination made by the Board or independent counsel. If the court shall determine that
the Indemnitee is entitled to indemnification as to any claim, issue or matter involved in the
Proceeding with respect to which there has been no prior determination pursuant to this Agreement
or with respect to which there has been a prior determination that the Indemnitee was not entitled
to indemnification hereunder, the Company shall pay all expenses (including attorneys’ fees)
actually incurred by the Indemnitee in connection with such judicial determination.

     5. Agreement Not Exclusive; Subrogation Rights, etc.

          (a) This Agreement shall not be deemed exclusive of and shall not diminish any other rights
the Indemnitee may have to be indemnified or insured or otherwise protected against any liability,
loss or expense by the Company, any subsidiary of the Company or any other person or entity under
any charter, bylaws, law, agreement, policy of insurance or similar protection, vote of
stockholders or directors, disinterested or not, or otherwise, whether or not now in effect, both
as to actions in the Indemnitee’s official capacity, and as to actions in another capacity while
holding such office. The Company’s obligations to make payments of Indemnified Amounts hereunder
shall be satisfied to the extent that payments with respect to the same Proceeding (or part
thereof) have been made to or for the benefit of the Indemnitee by reason of the indemnification of
the Indemnitee pursuant to any other arrangement made by the Company for the benefit of the
Indemnitee.

          (b) In the event the Indemnitee shall receive payment from any insurance carrier or from the
plaintiff in any Proceeding against the Indemnitee in respect of Indemnified Amounts after payments
on account of all or part of such Indemnified Amounts have been made by the Company pursuant
hereto, the Indemnitee shall promptly reimburse to the Company the amount, if any, by which the sum
of such payment by such insurance carrier or such plaintiff and payments by the Company or pursuant
to arrangements made by the Company to Indemnitee exceeds such Indemnified Amounts; provided,
however, that such portions, if any, of such insurance proceeds that are required to be reimbursed
to the insurance carrier under the terms of its insurance policy, such as deductible or
co-insurance payments, shall not be deemed to be payments to the Indemnitee hereunder. In
addition, upon payment of Indemnified Amounts hereunder, the Company shall be subrogated to the
rights of the Indemnitee receiving such payments (to the extent thereof) against any insurance
carrier (to the extent permitted under such insurance policies) or plaintiff in respect of such
Indemnified Amounts, and the Indemnitee shall execute and deliver any and all instruments and
documents and perform any and all other acts or deeds which the Company deems necessary or
advisable to secure such rights. Such right of

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subrogation shall be terminated upon receipt by the Company of the amount to be reimbursed by
the Indemnitee pursuant to the first sentence of this subsection (b).

     6. Insurance Coverage. In the event that the Company maintains directors’ and
officers’ liability insurance to protect itself and any director or officer of the Company against
any expense, liability or loss, such insurance shall cover the Indemnitee to at least the same
extent as any other director or officer of the Company.

     7. Establishment of Trust. The Company may, in its sole discretion, create a trust
(the “Trust”) for the benefit of the Indemnitee and, to the extent such Trust has been created,
from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient
to satisfy any and all Indemnified Amounts (including Advanced Amounts) which are actually paid or
which Indemnitee reasonably determines from time to time may be payable by the Company under this
Agreement. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the independent legal counsel appointed under Section 4 hereof.
If the Trust is established, the terms thereof shall provide that (i) the Trust shall not be
revoked or the principal thereof invaded without the written consent of the Indemnitee; (ii) the
trustee of the Trust (the “Trustee”) shall advance, within ten (10) business days of a request by
the Indemnitee, any and all Advanced Amounts to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the Trust under the circumstances which the Indemnitee would be required to reimburse the
Company under Section 3(b)(ii) hereof); the Company shall continue to fund the Trust from time to
time in accordance with the funding obligations set forth above; (iv) the Trustee shall promptly
pay to the Indemnitee all Indemnified Amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the Trust shall revert
to the Company upon a final determination by a court of competent jurisdiction in a final decision
from which there is no further right of appeal that the Indemnitee has been fully indemnified under
the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this
Section 7 shall relieve the Company of any of its obligations under this Agreement.

     8. Continuation of Indemnity. All agreements and obligations of the Company contained
herein shall continue during the period the Indemnitee is a director or officer of the Company (or
is serving at the request of the Company as an Affiliate Indemnitee) and shall continue thereafter
so long as the Indemnitee shall be subject to any possible Proceeding by reason of the fact that
the Indemnitee was a director or officer of the Company or was serving in any other capacity
referred to herein.

     9. Successors; Binding Agreement. This Agreement shall be binding on and shall inure
to the benefit of and be enforceable by the Company’s successors and assigns and by the
Indemnitee’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Company shall require any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by written agreement in form and substance reasonably
satisfactory to the Company and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
if no such succession or assignment had taken place.

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     10. Enforcement. The Company has entered into this Agreement and assumed the
obligations imposed on the Company hereby in order to induce the Indemnitee to act as a director or
officer, as the case may be, of the Company, and acknowledge that the Indemnitee is relying upon
this Agreement in continuing in such capacity. In the event the Indemnitee is required to bring
any action to enforce rights or to collect moneys due under this Agreement and is successful in
such action, the Company shall reimburse the Indemnitee for all of the Indemnitee’s fees and
expenses in bringing and pursuing such action. The Indemnitee shall be entitled to the advancement
of Indemnified Amounts to the full extent contemplated by Section 3 hereof in connection with such
proceeding.

     11. Separability. Each of the provisions of this Agreement is a separate and distinct
agreement independent of the others, so that if any provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof, which other provisions shall remain in full force
and effect.

     12. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is approved by the Board and agreed to in
writing signed by the Indemnitee and either the Chairman of the Board or the Chief Executive
Officer of the Company or another officer of the Company specifically designated by the Board. No
waiver by either party at any time of any breach by the other party of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same time or at any prior or
subsequent times. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Maryland, without giving effect to the
principles of conflicts of laws thereof. The Indemnitee may bring an action seeking resolution of
disputes or controversies arising under or in any way related to this Agreement in the state or
federal court jurisdiction in which the Indemnitee resides or in which his place of business is
located, and in any related appellate courts, and the Company consents to the jurisdiction of such
courts and to such venue.

     13. Notices. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as
follows: (i) if to the Indemnitee, at the address set forth below the Indemnitee’s name on the
signature page hereof, and (ii) if to the Company:

	 	 	 
	 

	 	17200 Ventura Boulevard
	 

	 	Suite 206
	 

	 	Encino, California 91316
	 

	 	Attention: Corporate Secretary

or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

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     14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall constitute one and the same
instrument.

     15. Effectiveness. This Agreement shall be effective as of the date it is executed.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the
day and year first above written.

	 	 	 	 	 	 	 
	 	 	LANDWIN REIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Martin Landis	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

9exv10w5

 

Exhibit 10.5

FORMATION FEE AGREEMENT

     This agreement (“Agreement”) is entered into as of October 19, 2005, by and between
Landwin REIT, Inc., a Maryland corporation (the “Company”) and Landwin Advisors, LLC, a
Delaware limited liability company (the “Advisor”).

     WHEREAS, the Advisor formed the Company, retained counsel and will retain auditors for the
Company, and the Advisor will prepare a registration statement for the sale of the Company’s common
stock, assist in hiring decisions, develop the Company’s business plan, as well as perform certain
other services relating to the formation of the Company (collectively, the “Formation
Services”); provided, however, that the Formation Services shall not include the sale of the
Company’s common stock;

     WHEREAS, the Advisor already has expended, and intends to continue to expend significant time
and resources with respect to the formation of the Company and the registration of the sale of its
shares of common stock;

     WHEREAS, the Company desires to compensate the Advisor for providing the Formation Services;

     NOW THEREFORE, in consideration of the foregoing, and the agreements set forth below, the
undersigned hereby agree as follows:

     1. The Advisor shall continue to provide Formation Services, and devote sufficient time and
resources to the Company to expedite the registration of the sale of the Company’s shares of common
stock.

     2. In exchange for providing the Formation Services, the Company shall pay to the Advisor a
fee (the “Formation Fee”) of $5,000,000. The Company’s obligation to pay the Formation Fee
shall be evidenced by a promissory note, in the form attached hereto as Exhibit A.

     3. This Agreement may be executed in multiple counterparts, each of which shall be deemed an
original for all purposes, and all of which together shall constitute one and the same instrument.
Each counterpart may be transmitted via facsimile or other similar electronic means and executed by
one or more of the undersigned, and a facsimile of the signature shall be deemed an original for
all purposes and have the same force and effect as a manually signed original.

     4. This Agreement shall be construed in accordance with the laws of the State of Delaware,
excluding any conflict-of-laws rule or principle that might refer the governance or the
construction of this Agreement to the law of another jurisdiction.

     5. The Agreement may be assigned, in whole or in part, by Advisor.

 

 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.

	 	 	 	 	 	 	 	 	 
	 	 	COMPANY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LANDWIN REIT, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Martin Landis	 	 
	 	 	Title:	 	Chairman of the Board, Chief Executive Officer and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ADVISOR	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LANDWIN ADVISORS, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Sylvia, Inc., its manager	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Martin Landis	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer	 	 

 

 

EXHIBIT A

LANDWIN REIT, INC.

PROMISSORY NOTE

			
	 	 	 
	$5,000,000.00
	 	Encino, California
	 
	 	           
           , 2006

LANDWIN REIT, INC., a Maryland corporation (the “Company”), the principal office of which
is located at 17200 Ventura Blvd., Suite 206, Encino, California 91316, as evidence of the
Company’s obligation to pay the Holder pursuant to the Formation Fee Agreement, hereby promises to
pay to the order of Landwin Advisors, LLC, a Delaware limited liability company, the sum of Five
Million Dollars and No Cents ($5,000,000.00) with interest on the unpaid balance thereof from the
date hereof until payment in full of such principal amount. All outstanding principal, plus
accrued and unpaid interest shall be due and payable on
                                
         , 2007 (the “Maturity
Date”).

Payment for all amounts due hereunder shall be made by wire transfer of funds to an account
designated in writing by the Holder.

The following is a statement of the rights of the Holder and the conditions to which this Note is
subject, and to which the Holder hereof, by the acceptance of this Note, agrees:

     Definitions. As used in this Note, the following terms, unless the context otherwise
requires, have the following meanings:

          “Company” includes any corporation which shall succeed to or assume the obligations of
the Company under this Note.

          “Holder” means Landwin Advisors, LLC, or any assignee hereof.

     Interest. The unpaid principal of this Note from time to time outstanding shall bear interest
prior to maturity or the date of prepayment in full at the rate equal to the lesser of (i) 5.0% per
annum (the “Applicable Rate”) or (ii) the maximum interest rate permitted under applicable
law (the “Maximum Rate”). Interest shall accrue from the date of issuance of this Note.

          The unpaid principal of and, to the extent permitted by applicable law, unpaid interest on
this Note from time to time outstanding shall bear interest from and after maturity at the rate
(the “Default Rate”) of 12% per annum, provided that in no event shall such interest rate
be more than the Maximum Rate. Notwithstanding anything to the contrary contained in this Note, at
the option of the Holder and upon notice to the Company at any time after the occurrence of a
Default (as defined herein), from and after such notice and during the

 

 

continuance of such Default, the unpaid principal of this Note from time to time outstanding
and, to the extent permitted by applicable law, unpaid interest shall bear interest at the Default
Rate, provided that in no event shall such interest rate be more than the Maximum Rate.

          All interest accruing under this Note shall be calculated on the basis of a 360 day year. The
Company shall make each payment which it owes hereunder not later than 2:00 p.m., Encino,
California time, on the date such payment becomes due and payable (or the date any voluntary
prepayment is made), in immediately available funds. Any payment received by the Holder after such
time will be deemed to have been made on the next following business day. As used in this
paragraph, the term “business day” shall mean a day on which commercial banks are open for business
with the public in Encino, California.

          Unless otherwise agreed to in writing, or otherwise required by applicable law, payments will
be applied first to unpaid accrued interest, then to principal, and any remaining amount to any
unpaid collection costs, interest accruing at the Default Rate, and other charges; provided,
however, that upon delinquency or other Default under this Note, Holder reserves the right to apply
payments among principal, interest, Default Rate interest, collection costs and other charges, at
its discretion.

     Default. If: (a) the Company fails to pay any of the indebtedness evidenced by this Note when
due, by maturity, acceleration or otherwise; (b) the Company becomes insolvent or is the subject of
a voluntary or involuntary proceeding in bankruptcy, or a reorganization, arrangement or creditor
composition proceeding, ceases doing business as a going concern, or is the subject of a
dissolution, merger or consolidation; (c) the Company fails to pay when due any of its other
indebtedness for money loaned to the Company and the failure to make any such payment during the
cure period, if any; or (d) there is filed or issued a levy or writ of attachment or garnishment or
other like judicial process upon the Company, then Holder, upon the occurrence of any of these
events (each, a “Default”), may at its option and with prior notice to the Company, (i)
declare any or all of the principal balance hereof and the interest accrued hereon to be
immediately due and payable, (ii) charge interest at the Default Rate provided herein, and (iii)
exercise any one or more of the rights and remedies granted to Holder by this Note or any agreement
with the Company, or available to it under applicable law or in equity, as Holder may determine in
its sole discretion. All payments under this Note shall be in immediately available United States
funds, without setoff or counterclaim. During the existence of a Default, which remains uncured
beyond any applicable notice, cure or grace period, the Holder shall have the option of declaring
the principal balance hereof and the interest accrued hereon to be immediately due and payable.

     Prepayment. The Company shall have the right to prepay without penalty at the time and from
time to time prior to maturity, all or any part of the unpaid principal balance of this Note and/or
all or any part of the unpaid interest accrued to the date of such prepayment, provided that any
such principal thus paid is accompanied by accrued interest on such principal.

     Assignment. The rights and obligations of the Company and the Holder shall be binding upon
and benefit the successors, heirs, and administrators of the parties.

 

 

     Compliance with Usury Statutes. It is the intent of the Holder and the Company in the
execution and delivery of this Note and all other instruments now or hereafter securing this Note
to contract in strict compliance with applicable usury law. In furtherance thereof, the Holder and
the Company stipulate and agree that none of the terms and provisions contained in this Note, or in
any other instrument executed in connection herewith, shall ever be construed to create a contract
to pay for the use, forbearance or detention of money, interest at a rate in excess of the maximum
interest rate permitted to be charged by applicable law, neither the Company nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of this Note shall ever be
obligated or required to pay interest on this Note at a rate or in an amount in excess of the
maximum interest that may be lawfully charged under applicable law, and the provisions of this
paragraph shall control over all other provisions of this Note and any other instruments now or
hereafter executed in connection herewith which may be in apparent conflict herewith. The Holder
expressly disavows any intention to charge or collect excessive unearned interest or finance
charges in the event the maturity of this Note is accelerated. If the maturity of this Note shall
be accelerated for any reason or if the principal of this Note is paid prior to the end of the term
of this Note, and as a result thereof the interest received for the actual period of existence of
the loan evidenced by this Note exceeds the amount of interest that would have accrued at the
applicable maximum lawful rate, the Holder shall, at its option, either refund to the Company the
amount of such excess or credit the amount of such excess against the principal balance of this
Note then outstanding and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess interest. In the event that the Holder or
any other holder of this Note shall contract for, charge or receive any amounts and/or any other
thing of value which are determined to constitute interest which would increase the effective
interest rate on this Note to a rate in excess of that permitted to be charged by applicable law,
all such sums determined to constitute interest in excess of interest at the lawful rate shall,
upon such determination, at the option of the Holder, be either immediately returned to the Company
or credited against the principal balance of this Note then outstanding, in which event any and all
penalties of any kind under applicable law as a result of such excess interest shall be
inapplicable. By execution and delivery of this Note, the Company acknowledges that it believes
the loan evidenced by this Note to be non-usurious and agrees that if, at any time, the Company
should have reason to believe that such loan is in fact usurious, it will give the Holder or other
holder of this Note notice of such condition and the Company agrees that the Holder shall have 90
days in which to make appropriate refund or other adjustment in order to correct such condition if
in fact such exists. The term “applicable law” as used in this Note shall mean the laws of the
State of California or the laws of the United States, whichever laws allow the greater rate of
interest, as such laws now exist or may be changed or amended or come into effect in the future.

     Cost of Collection. Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity or through any bankruptcy, receivership, probate or other court
proceedings or if this Note is placed in the hands of attorneys for collection after default, the
Company and all endorsers, guarantors and sureties of this Note jointly and severally agree to pay
to the Holder, in addition to the principal and interest due and payable hereon, all costs and
expenses of the Holder, including, without limitation, reasonable attorneys’ and collection fees.

     Waivers. The Company waives presentment for payment, demand, notice of demand and of dishonor
and nonpayment of this Note, notice of intention to accelerate the maturity of this

 

 

Note, protest and notice of protest, diligence in collecting, and the bringing of suit against
any other party, and agrees to all renewals, extensions, modifications, partial payments, releases
or substitutions of security, in whole or in part, with or without notice, before or after
maturity.

     Notices. Any notice, request, instruction or other document to be given under this Note after
the date hereof by any party hereto to any other party shall be in writing and shall be deemed to
have been duly given on the date of service if delivered personally or by telecopier with confirmed
receipt, or on the third day after mailing if sent by certified mail, postage prepaid, at the
addresses set forth below:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Landwin REIT, Inc.
	 

	 	 	 	17200 Ventura Blvd., Suite 206
	 

	 	 	 	Encino, California 91316
	 

	 	 	 	Attn: President
	 

	 	 	 	Facsimile: (818) 783-5051
	 
	 	 	 	 
	 

	 	If to the Holder:
	 	Landwin Advisors, LLC
	 

	 	 	 	17200 Ventura Blvd., Suite 206
	 

	 	 	 	Encino, California 91316
	 

	 	 	 	Attn: Manager
	 

	 	 	 	Facsimile: (818) 783-5051

Any change in the address of any party hereunder shall not be effective as to the other party
unless notice of such change of address is sent to the other party in accordance with the
foregoing.

     Amendments and Waivers. Any provision of this Note may be amended, supplemented, waived,
discharged or terminated by a written instrument signed by the Company and the Holder.

     Delays and Omissions. No delay or omission of the Holder to exercise any power, right or
remedy accruing to the Holder shall impair any such power, right or remedy or shall be construed to
be a waiver of the right to exercise any such power, right or remedy. The Holder’s right to
accelerate this Note shall not be waived or deemed waived by the Holder by the Holder’s not
accelerating this Note or exercising other remedies for the Company’s failure to timely perform its
obligations hereunder. The Holder shall not be obligated or be deemed obligated to notify the
Company that it is requiring the Company to strictly comply with the terms and provisions of this
Note before accelerating this Note and exercising its other remedies hereunder because of the
Company’s failure to timely perform its obligations under this Note.

     Binding Effect. This Note and all the covenants and agreements contained herein shall be
binding upon, and shall inure to the benefit of, the respective legal representatives, heirs, and
successors of the Company and the Holder.

     Headings; Pronouns. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the entities or persons
referred may require. The headings of the sections of this Note are inserted for convenience only

 

 

and shall not constitute a part hereof nor affect in any way the meaning or interpretation of
this Note. “Herein,” “hereof” and “hereunder” and other words of similar import refer to this Note
as a whole and not to any particular section or other subdivision.

     Severability. If any provision of this Note is held to be illegal, invalid or unenforceable
under present or future laws, the legality, validity and enforceability of the remaining provisions
of this Note shall not be affected thereby, and this Note shall be liberally construed so as to
carry out the intent of the parties to it.

     Evidence of Obligation. This Note constitutes evidence of an obligation and not the actual
payment thereof.

     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA AND
THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN SUCH STATE.

THIS NOTE CONSTITUTES EVIDENCE OF AN OBLIGATION TO MAKE A PAYMENT WHICH REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

IN
WITNESS WHEREOF, the Company has caused this Note to be issued this ___ day of ___,
2006.

	 	 	 
	 

	 	LANDWIN REIT, INC.
	 
	 	 
	 
	 

	 	 
	 

	 	Seán Dennison, President

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