EXHIBIT 10.7
PROMISSORY NOTE
Date of Note: As of November 5, 1996
Note Amount: $17,150,000.00
FOR VALUE RECEIVED, the undersigned having an address c/o 701 Lee Street,
Suite 1000, Des Plaines, Illinois 60016, as maker (hereinafter referred to as
"Maker"), does hereby covenant and promise to pay, in immediately available
funds, to the order of CS FIRST BOSTON MORTGAGE CAPITAL CORP., a Delaware
corporation having an address at 55 East 52nd Street, New York, New York 10055
(hereinafter referred to as "Payee"), or at such other place as Payee may from
time to time designate in writing, the principal sum of Seventeen Million One
Hundred Fifty Thousand and No/100 Dollars ($17,150,000.00) and all other
amounts due or becoming due hereunder, with interest thereon from the date
hereof at the Interest Rate (as hereinafter defined), to be paid in lawful
money of the United States of America, as herein provided.
Interest, as calculated herein, shall be computed for any Payment Date on
the basis of a 360 day year for the actual number of days elapsed on so much
of the Principal Amount as is outstanding as of the last day of the month
preceding such Payment Date.
1. DEFINITIONS
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms in this Note
shall include in the singular number the plural and in the plural number the
singular. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Mortgage.
"Determination Date" shall mean, in each calendar month during the term
of this Note, beginning in the second calendar month following the month in
which the Closing Date occurs, the first (1st) day of each month, if such
first (1st) day is a Business Day, and if not, the Business Day immediately
following such first (1st) day.
"Due Date" shall have the meaning set forth in Section 2.01(c) hereof.
"First LIBOR Reference Period" shall mean the period commencing on the
Closing Date and ending on the last day of the calendar month in which the
Closing Date occurs.
"Interest Determination Date" shall mean the second LIBOR Business Day
prior to the Payment Date. As used herein, LIBOR Business Day shall mean any
day on which banks are open for dealing in foreign currency and exchange in
London, England.
"Interest Rate" shall mean the rate per annum (expressed as a percentage)
equal to the LIBOR Rate plus the LIBOR Margin except for the First LIBOR
Reference Period for which the Interest Rate shall be 8.75%.
"LIBOR Margin" shall mean from the closing date through and including
October 31, 1997 three hundred and thirty-seven (337) basis points per annum.
From and after November 1, 1997 LIBOR Margin shall mean three hundred and
sixty-two (362) basis points per annum.
"LIBOR Rate" shall mean the London interbank offered rate for one-month
United States Dollar deposits established by the Payee in accordance with the
terms of this Note on each Interest Determination Date.
"Loan Amount" shall mean Seventeen Million One Hundred Fifty Thousand and
no/100 Dollars ($17,150,000.00).
"Maturity Date" shall have the meaning set forth in Section 2.01(a)(iii)
hereof.
"Maximum Amount" shall have the meaning set forth in Section 4.07 hereof.
"Mortgages" shall have the meaning set forth in Section 3.01 hereof.
"Payment" shall have the meaning set forth in Section 2.02(a) hereof.
"Principal Payments" shall have the meaning set forth in Section
2.01(a)(ii) hereof.
"Principals" shall have the meaning set forth in Section 4.04 hereof.
"Reuters Screen LIBO Page" shall mean the display page designated as
"LIBO" on the Reuters Monitor Money Rates Service.
2. INTEREST AND AMORTIZATION PAYMENTS
Section 2.01. (a) Payments under this Note, calculated in accordance
with the terms hereof, shall be due and payable as follows:
(i) interest shall be due and payable on each and every Payment Date at the
Interest Rate in effect for the Interest Accrual Period ending the day
preceding the Payment Date, and (y) payments to be applied in reduction of the
Principal Amount (the "Principal Payments") shall be due and payable on the
Payment Date of each and every calendar month commencing in December, 1996 in
accordance with, and to be applied in reduction of the Principal Amount, as
set forth in Section 2.01(b) hereof; and
(ii) the entire outstanding Principal Amount, together with all accrued and
unpaid interest and any other charges due hereon shall be due and payable
November 1, 1998 (the "Maturity Date").
(b) Monthly installments of Principal Payments shall be paid in amounts
sufficient to fully amortize the then unpaid Principal Amount over a twenty
(20) year term based on the Interest Rate.
(c) To the extent Payments are or become due and payable under this Note or
any of the other Loan Documents on a day (the "Due Date") which is not a
Business Day, such Payments are and shall be due and payable on the first
Business Day immediately following the Due Date for such Payments and in such
event, the interest which accrues on the Loan from the Due Date to the first
Business Day immediately following the Due Date shall not be due and payable
until the next succeeding Due Date and shall not be compounded.
(d) On each Interest Determination Date until all sums due under this Note
and the other Loan Documents have been paid in full, the LIBOR Rate shall be
the rate (expressed as a percentage per annum) for deposits in U.S. Dollars
for a one (1) month period that appears on Telerate Page 3750 (or the
successor page thereto) as of 11:00 a.m., London time, of such Interest
Determination Date to the extent available. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on the applicable Interest
Determination Date, the LIBOR Rate will be the arithmetic mean of the offered
rates (expressed as a percentage per annum) for deposits in U.S. dollars for a
one (1) month period that appear on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on such Interest Determination Date, if at least two such
offered rates so appear. If fewer than two such offered rates appear on the
Reuters Screen LIBO Page as of 11:00 a.m., London time, on the applicable
Interest Determination Date, the Payee will request the principal London
office of any four (4) major reference banks in the London interbank market
selected by the Payee in its sole discretion to provide such bank's offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one (1) month period as of
11:00 a.m., London time, on such Interest Determination Date for amounts of
not less than $1,000,000.00. If at least two such offered quotations are so
provided, the LIBOR Rate will be the arithmetic mean of such quotation. If
fewer than two such quotations are so provided, the Payee will request any
three (3) major banks in New York City selected by the Payee percentage per
annum) for loans in U.S. dollars to leading European banks for a one (1) month
period as of approximately 11:00 a.m. New York City time, on the applicable
Interest Determination Date for amounts of not less than $1,000,000.00. If at
least two such rates are so provided, the LIBOR Rate will be the arithmetic
mean of such rates. If fewer than two such rates are so provided, then the
LIBOR Rate will be the LIBOR Rate in effect on the preceding Interest
Determination Date. The establishment of the LIBOR Rate on each Interest
Determination Date by the Payee and the Payee's calculation of the rate of
interest applicable to this Note shall (in the absence of manifest error) be
final and binding.
(e) If any law, treaty, rule or regulation or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or any change therein or in the interpretation or
application thereof, shall make it unlawful for the Payee to make or maintain
the interest rate based upon the LIBOR Rate plus the LIBOR Margin or to give
effect to its obligations as contemplated hereby, then upon notice by the
Payee to Maker, the Interest Rate shall be automatically converted to the
interest rate which was established on the immediately preceding Interest
Determination Date.
Section 2.02. Application of Payments.
(a) Each and every payment (a "Payment") made by Maker to Payee in accordance
with the terms of this Note and/or the terms of any of the other Loan
Documents, including, without limitation, all payments of interest and
principal, shall be applied as follows:
(1) Payments, other than Unscheduled Payments, shall be applied (i) first, to
all interest (other than Default Rate Interest) which shall be due and payable
pursuant to the terms hereof as of the date the Payment is received; (ii)
second, to the payment of Principal Amount; and (iii) third, to all Late
Charges, Default Rate Interest or premiums, if any, and other sums payable
hereunder or under the other Loan Documents (other than those sums included in
clauses (i) and (ii) of this Section 2.02(a)(1)) in such order and priority as
determined by Payee in its sole discretion.
(2) Unscheduled Payments shall be applied at the end of the Interest Accrual
Period in which such Unscheduled Payments are received first, to the Principal
Amount until the entire Principal Amount has been fully amortized, and (ii)
second, the balance, if any, in the manner provided in subparagraph (1) above
of this Section 2.02(a) (to the extent applicable after giving effect to any
payments previously made pursuant to this Section 2.02).
(b) To the extent that Maker makes a Payment or Payee receives any Payment or
proceeds for Maker's benefit, which are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under
any bankruptcy law, common law or equitable cause, then, to such extent, the
obligations of Maker hereunder intended to be satisfied by such Payment or
proceeds shall be revived and continue as if such Payment or proceeds had not
been received by Payee.
3. Default Rate. Time is of the essence with respect to the times set
forth herein for the repayment of the Principal Amount and the interest
thereon. Should any amounts due hereunder or under any other Loan Document
not be paid in full on the date when the same shall be due and payable
(whether by acceleration, prepayment permitted hereunder or otherwise), then
in such event, the rate of interest to be paid on the entire Principal Amount
of this Note and all such other amounts shall be increased to the Default Rate
and shall be computed from the Due Date through and including the date, if
any, upon which such Default is fully cured. The foregoing provisions shall
not be construed as a waiver by Payee of its right to pursue any other
remedies available to it under the Mortgages or any other Loan Document, nor
shall it be construed to limit in any way the application of the Default Rate.
4. Voluntary Prepayments. Maker shall be permitted to repay the Principal
Amount of this Loan only on the terms and conditions and to the extent
provided in Article XV of the Mortgages. All such repayments shall be applied
in accordance with Section 2.02(a)(2) hereof.
SECTION 3. DEFAULTS
Section 3.01. Defaults. This Note is secured, inter alia, by (i)
certain mortgages, deeds of trust and deeds to secure debt, security
agreements, assignments of rents and fixture filings (each herein referred to
as a "Mortgage" and collectively as the "Mortgages") all of even date herewith
covering property, of Maker, as more particularly described in each Mortgage,
(ii) certain assignments of leases and rents and security deposits of even
date herewith made by Maker, and (iii) certain pledge of shares of stock of
even date herewith made by Maker. All terms, covenants, conditions and
agreements of the Loan Documents, including without limitation, the Mortgages,
and the due on sale provision contained within the Mortgages, hereby
constitute part of this Note, as if the same had been fully set forth herein.
Each Event of Default under the Mortgages shall be an Event of Default
hereunder.
Section 3.02 Remedies. Upon the occurrence of an Event of Default, the
entire Principal Amount, accrued interest and all other sums due and payable
hereunder, under the Mortgages or other Loan Documents shall become
immediately due and payable at the option of Payee and immediately, and
without notice to Maker, interest on the Principal Amount shall accrue at the
Default Rate. Failure to exercise this option shall not constitute a waiver
of the right to exercise the same in the event of any subsequent Default or to
exercise any other remedy available to Payee relating to such Default. If
there is more than one Maker of this Note, subject to the provisions of
Section 4.04 liable to pay the entire Loan Amount and all other sums becoming
due hereunder or under the other Loan Documents.
SECTION 4. MISCELLANEOUS
Section 4.01. Waivers. (a) Maker acknowledges that the Loan evidenced
by this Note is a commercial transaction and, to the fullest extent permitted
by Legal Requirements, as to this Note, the Mortgages and any other Loan
Documents securing this Note, Maker hereby waives all applicable exemption
rights, whether under the constitution of the State of New York or otherwise
and also waives valuation and appraisement, presentment, protest and demand,
notice of protest, demand and dishonor and nonpayment of this Note and, except
as specifically provided herein or in the other Loan Documents, all other
notices or demands to the fullest extent permitted pursuant to Legal
Requirements, and hereby expressly agrees that the maturity of this Note or
payment hereunder, may be extended from time to time without in any way
affecting the liability of Maker or of any guarantor of this Note. No notice
to, or demand on Maker shall entitle Maker to any other or future notice or
demand in the same, similar or other circumstances. Maker further consents to
the release of any Person liable for this obligation without affecting the
liability of any other party hereto or any guarantor hereof. The remedies of
Payee provided herein, in the Mortgages and the other Loan Documents, are
cumulative and concurrent, and may be pursued singly, successively, or
together, at the sole discretion of Payee, and may be exercised as often as
the occasion therefor shall occur. Any delay on the part of Payee in
exercising any right hereunder shall not operate as a waiver of any right, and
any waiver granted for one occasion shall not operate as a waiver in the event
of a subsequent Default.
(b) This Note cannot be modified, terminated, extended, amended or discharged
orally. No requirement hereof may be waived at any time except by a writing
signed by Payee, nor shall any waiver be operative upon other than a single
occasion. All rights and remedies herein specified are intended to be
cumulative and not in substitution for any right or remedy otherwise
available. In any action or proceeding to recover any sum herein provided
for, to the extent permitted by applicable Legal Requirements, no defense of
adequacy of security, or that resort must first be had to any other Person,
shall be asserted. All references herein to Maker and to Payee shall be
deemed to include its successors and assigns.
Section 4.02. Taxes. Maker agrees that if, at any time, the United
States of America, or any State or Commonwealth thereof or any subdivision of
any such State, shall require revenue or other stamps to be affixed to this
Note or the Mortgages, or impose any other tax or charges on the same, Maker
will pay the same, with interest and penalties thereon, if any.
Section 4.03. Invalidity. Wherever possible, each provision of this
Note shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note is held to be invalid or
unenforceable by a court of competent jurisdiction, 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, and the other provisions of this Note shall remain in full force
and effect and shall be liberally construed in favor of Payee in order to
effect the provisions of this Note.
Section 4.04. Exculpation.
Notwithstanding anything to the contrary contained in this Note or the
other Loan Documents, the obligations of Maker hereunder shall be non-recourse
except with respect to the Mortgaged Property, which for the purposes of this
Note shall be deemed to include the term Trust Property, if applicable, and as
otherwise provided in Section 18.32 of the Mortgage, the terms of which are
incorporated herein.
Section 4.05. Governing Law. (a) This Note was negotiated in New York,
and delivered by Maker and accepted by Payee in the State of New York, and the
proceeds of this Note were disbursed from New York, which State Maker agrees
has a substantial relationship to Payee and Maker and to the transaction
embodied hereby, in all respects, including, without limiting the generality
of the foregoing, matters of construction, validity, enforceability and
performance. This Note and the obligations arising hereunder shall be
governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and performed in such State (without regard
to the conflicts of law rules thereof) and any applicable law of the United
States of America, except that at all times the provisions for the creation,
perfection, and enforcement of the liens and security interests created
pursuant to the Mortgages and pursuant to the other Loan Documents shall be
governed by and construed according to the law of the State in which the
applicable Cross-collateralized Property is located, it being understood that,
to the fullest extent permitted by law of such State, the law of the State of
New York shall govern the validity and the enforceability of all Loan
Documents, and the obligations arising hereunder or thereunder. To the
fullest extent permitted by law, Maker hereby unconditionally and irrevocably
waives any claim to assert that the law of any other jurisdiction governs this
Note and this Note shall be governed by and construed in accordance with the
laws of the State of New York pursuant to Sect. 5-1401 of the New York General
Obligations Law.
(b) Any legal suit, action or proceeding against Maker or Payee arising out
of or relating to this Note shall be instituted in any federal or state court
in New York, New York, pursuant to Sect. 5-1402 of the New York General
Obligations Law, and Maker waives any objection which it may now or hereafter
have to the laying of venue of any such suit, action or proceeding, and Maker
hereby irrevocably submits to the jurisdiction of any such court in any suit,
action or proceeding. Maker does hereby designate and appoint Donovan,
Leisure, Newton & Irvine, having an address at 30 Rockefeller Plaza, New York,
New York 10112, as its authorized agent to accept and acknowledge on its
behalf service of any and all process which may be served in any such suit,
action or proceeding in any federal or state court in New York, New York, and
agrees that service of process upon said agent at said address and written
notice of said service of Maker mailed or delivered to Maker in the manner
provided in the Mortgages, shall be deemed in every respect effective service
of process upon Maker, in any such suit, action or proceeding in the State of
New York. Maker (i) shall give prompt notice to the Payee of any changed
address of its authorized agent hereunder, (ii) may at any time and from time
to time designate a substitute authorized agent with an office in New York,
New York (which office shall be designated as the address for service of
process), and (iii) shall promptly designate such a substitute if its
authorized agent ceases to have an office in New York, New York or is
dissolved without leaving a successor.
Section 4.06. Further Assurances. Maker shall execute and acknowledge
(or cause to be executed and acknowledged) and deliver to Payee all documents,
and take all actions, required by Payee from time to time to confirm the
rights created or now or hereafter intended to be created under this Note and
the other Loan Documents, to protect and further the validity, priority and
enforceability of this Note and the other Loan Documents, to subject to the
Loan Documents any property of Maker intended by the terms of any one or more
of the Loan Documents to be encumbered by the Loan Documents, or otherwise
carry out the purposes of the Loan Documents and the transactions contemplated
thereunder; provided, however, that no such further actions, assurances and
confirmations shall increase Maker's obligations under this Note.
Section 4.07. Maximum Amount. It is the intention of Maker and Payee to
conform strictly to the usury and similar laws relating to interest from time
to time in force, and all agreements between Maker and Payee, whether now
existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount paid or agreed
to be paid in the aggregate to Payee as interest hereunder or under the other
Loan Documents exceed the maximum permissible under applicable usury or such
other laws (the "Maximum Amount"). In the event, for any reason whatsoever,
any payment by or act of Maker pursuant to the terms hereof or pursuant to any
requirements of any provision hereof or of the other Loan Documents shall
result in payment of interest which would exceed the Maximum Amount, then ipso
facto the obligation of Maker to pay interest or perform such act or
requirement shall be reduced to the limit authorized under such Legal
Requirements, so that in no event shall Maker be obligated to pay any
interest, perform any act, or be bound by any requirement which would result
in payment of interest in excess of a sum which is lawfully collectible, and
all sums in excess of those lawfully collectible as interest shall, without
further agreement or notice between or by any party hereto, be deemed applied
upon principal immediately upon receipt of such moneys by Payee, with the same
force and effect as though Maker had specifically designated such sums to be
applied to principal prepayment. Notwithstanding any provision herein to the
contrary, however, no such application shall give rise to an obligation on the
part of Maker to pay any prepayment premium, if any, payable pursuant to the
Loan Documents. The provisions of this paragraph shall control every other
provision of this Note.
Section 4.08. Costs of Collection. Maker agrees to pay all costs and
expenses of collection incurred by Payee, in addition to principal, interest,
and premiums, if any, and Late Charges, including, without limitation,
reasonable attorneys' fees and disbursements, all costs and expenses incurred
in connection with the pursuit by Payee of any of its rights or remedies
hereunder, under the Mortgages or any of the other Loan Documents or the
protection of or realization of collateral or in connection with Payee's
collection efforts, whether or not suit on this Note, on any of the other Loan
Documents or any foreclosure proceeding is filed, and all such costs and
expenses shall be payable on demand with interest thereon to be calculated at
the Default Rate and shall be secured by the Mortgages and all other
collateral at any time held by Payee as security for Maker's obligations to
Payee.
Section 4.09. Waiver of Jury Trial. Maker, to the fullest extent it may
lawfully do so, waives any right it may have to trial by jury in any action,
including, without limitation, any tort action, to interpose any counterclaim
in any action (other than a compulsory counterclaim), and to have the same
consolidated with any other or separate action brought on or with respect to
this Note, the Mortgages or any other Loan Document.
Section 4.10. Headings. The section headings in this Note are included
herein for convenience of reference only and shall not constitute a part of
this Note for any other purpose.
Section 4.11. Participation. Payee shall have the right to assign this
Note in whole, but not in part, the Mortgages and/or any of the other Loan
Documents, and to transfer, assign or sell participation and subparticipations
(including blind or undisclosed participation and subparticipations) in the
Mortgages and the other Loan Documents and the obligations hereunder to any
Person; provided, however, that no participation shall increase, decrease or
otherwise affect either Maker's or Payee's obligations hereunder, under the
Mortgages or under any of the other Loan Documents.
IN WITNESS WHEREOF, this Note has been duly executed by Maker, the day
and year first above written.
Witness: MOA-CS CORP.,
a Delaware corporation
________________________ By:_____________________________________
John Simon
Its: Treasurer