Exhibit 10.2
NON-NEGOTIABLE NOTE
$2,162,500 New York, New York
July 15, 1997
FOR VALUE RECEIVED, CAPITAL TRUST (the "Debtor"), hereby
unconditionally promises to pay to JOHN R. KLOPP (the "Holder"), at the
principal offices of Debtor, or at such other place in the continental United
States of America as Holder may from time to time designate in writing, the
principal sum of TWO MILLION ONE HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED DOLLARS
($2,162,500) (the "Principal Amount"), to be paid in lawful money of the United
States of America in immediately available funds as set forth below.
1. Repayment. The Principal Amount shall be due and payable in
ten (10) semi-annual installments commencing on January 1, 1998 and on each June
1 and January 1 thereafter (each a "Payment Date"), until paid in full. Each
installment shall be in an amount equal to one-tenth of the Principal Amount. No
interest shall be accrued on or be payable under this Note prior to the due date
of this Note, whether at stated maturity or upon acceleration pursuant to
section 4 hereof.
2. Prepayment. Debtor shall prepay all of the unpaid portion
of the Principal Amount and all accrued interest, if any, on or prior to the
effective date of any Change in Control Event. "Change in Control Event" shall
mean
a. a merger or acquisition involving Debtor in which either:
(i) 50% or more of Debtor's voting stock
outstanding after the merger is held by
holders different from those who held
Debtor's voting stock immediately prior to
such merger or acquisition; or
(ii) the composition of the board of trustees (or
other governing board of Debtor) changes as
a result of which the individuals elected to
the board at the last meeting of the
shareholders at which there was not a
contested election cease to comprise a
majority of the board;
b. the sale, transfer or other disposition of all or
substantially all of the assets of Debtor in liquidation
or dissolution of Debtor;
611696.1
c. a transfer of all or substantially all of Debtor's
assets pursuant to a partnership or joint venture
agreement or similar arrangement where Debtor's
resulting interest is or becomes less than 50%;
d. on or after the date hereof, a change in ownership of
Debtor through an action or series of transactions, such
that any person is or becomes the beneficial owner,
directly or indirectly, of 50% or more of Debtor's
voting stock; or
e. a change in the composition of the board of trustees
(or other governing board of Debtor) as a result of
which the individuals elected to the board at the
last meeting of the shareholders at which there is
not a contested election cease to comprise a majority
of the board.
3. Set-off. Debtor shall be entitled to set off against the
principal amount owing hereunder the amount of any Liquidated Claim, provided
that the amount of any Liquidated Claim shall be set off against payments due
hereunder in reverse order of due date. "Liquidated Claim" shall mean any claim
by Debtor against the holder of this Note under article 9 of the Interest
Purchase Agreement referred to in section 6 hereof to the extent that such claim
has been reduced to a judgment of a court or is subsumed in a settlement
agreement to which the holder hereof is a signatory.
4. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
a. Payments. The Debtor shall fail to make any principal
payment when due;
b. Bankruptcy. The Debtor shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against the
Debtor and the petition is not controverted within 30 days, or is not
dismissed within 90 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of the Debtor; or the
Debtor commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now
or hereafter in effect relating to the Debtor; or there is commenced
against the Debtor any such proceeding which remains undismissed for a
period of 90 days; or the Debtor is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or
proceeding is entered; or the Debtor
611696.1
-2-
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of 90 days; or the Debtor makes a general assignment for
the benefit of creditors;
c. Other Defaults. Debtor or any subsidiary of Debtor defaults
(whether as primary obligor or as guarantor or other surety) in any
payment of principal or interest on any obligation in respect of its
indebtedness beyond any period of grace provided with respect thereto,
or Debtor or any subsidiary of Debtor fails to perform or observe any
other agreement, term or condition contained in any agreement under
which any such indebtedness is created (or if any other event
thereunder or under any such agreement shall occur and be continuing),
and, on the basis of such default, failure or other event, the holder
or holders of such obligation cause such obligation to become due (or
to be repurchased by Debtor or any such subsidiary) prior to the stated
maturity of such obligation;
then the Holder, at Holder's option, may declare all unpaid amounts under this
Note to be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Debtor.
Thereafter, the outstanding Principal Amount shall bear interest at an annual
rate equal to fifteen percent (15%) per annum from the date of notice to Debtor
of such Event of Default until the date all outstanding principal and any
accrued interest have been paid in full.
5. Waivers. The Debtor and all endorsers hereby severally
waive diligence, demand, presentment, protest and notice of any kind, and assent
to extensions of the time of payment, release, surrender or substitution of
security, or forbearance or other indulgence, without notice. No failure or
delay on the part of Holder in exercising any right or remedy accruing upon the
occurrence of an Event of Default shall impair the right or remedy or constitute
a waiver thereof or acquiescence of the Event of Default. All remedies are
cumulative to the extent permitted by law.
6. Interest Purchase Agreement. This Note is one of the
Notes referred to in, and the form of which is attached to, that certain
Interest Purchase Agreement, dated as of June 16, 1997, by and between John R.
Klopp, Craig M. Hatkoff and Valentine Wildove & Company, Inc., as sellers, and
Debtor, as buyer.
7. Assignment. This Note may not be assigned, assumed,
changed, modified or terminated orally or otherwise, except by a writing
executed by Holder hereof.
8. Binding Effect. This Note and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns.
611696.1
-3-
9. Notices. All notices, consents and other communications
under this Note shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand, (b) when sent by telecopier (with receipt
confirmed), provided that a copy is promptly thereafter mailed by first class
prepaid registered or certified mail, return receipt requested, (c) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), or by such other means as the
parties may agree from time to time or (d) five (5) Business Days after being
mailed, by first class postage prepaid registered or certified mail, return
receipt requested; in each case to the appropriate addresses, and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate as to itself by notice to the other parties):
(a) If to Holder:
Valentine Wildove & Company, Inc.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp and Craig M. Hatkoff
Telecopy: (212) 593-0316
(b) If to Debtor:
California Real Estate Investment Trust or Capital Trust
131 Steuart Street, #200
San Francisco, California 94105
Attention: Chief Executive Officer
Telecopy: (415) 543-6269
with a copy to:
Equity Group Investments, Inc.
2 North Riverside Plaza, 6th Floor
Chicago, Illinois 60606
Attention: Gary R. Garrabrant
Telecopy: (312) 454-0157
611696.1
-4-
and to:
Victor Capital Group, L.P.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp
Telecopy: (212) 593-0316
10. Governing Law. This Note shall be governed by and
construed and interpreted in accordance with the internal laws of the State of
New York, without giving effect to the principles of conflicts of laws thereof.
CAPITAL TRUST
By: _________________________
Name:
Title:
611696.1
-5-
NON-NEGOTIABLE NOTE
$2,162,500 New York, New York
July 15, 1997
FOR VALUE RECEIVED, CAPITAL TRUST (the "Debtor"), hereby
unconditionally promises to pay to CRAIG M. HATKOFF (the "Holder"), at the
principal offices of Debtor, or at such other place in the continental United
States of America as Holder may from time to time designate in writing, the
principal sum of TWO MILLION ONE HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED DOLLARS
($2,162,500) (the "Principal Amount"), to be paid in lawful money of the United
States of America in immediately available funds as set forth below.
1. Repayment. The Principal Amount shall be due and payable in
ten (10) semi-annual installments commencing on January 1, 1998 and on each June
1 and January 1 thereafter (each a "Payment Date"), until paid in full. Each
installment shall be in an amount equal to one-tenth of the Principal Amount. No
interest shall be accrued on or be payable under this Note prior to the due date
of this Note, whether at stated maturity or upon acceleration pursuant to
section 4 hereof.
2. Prepayment. Debtor shall prepay all of the unpaid portion
of the Principal Amount and all accrued interest, if any, on or prior to the
effective date of any Change in Control Event. "Change in Control Event" shall
mean
a. a merger or acquisition involving Debtor in which either:
(i) 50% or more of Debtor's voting stock
outstanding after the merger is held by
holders different from those who held
Debtor's voting stock immediately prior to
such merger or acquisition; or
(ii) the composition of the board of trustees (or
other governing board of Debtor) changes as
a result of which the individuals elected to
the board at the last meeting of the
shareholders at which there was not a
contested election cease to comprise a
majority of the board;
b. the sale, transfer or other disposition of all or
substantially all of the assets of Debtor in liquidation
or dissolution of Debtor;
611697.1
c. a transfer of all or substantially all of Debtor's assets
pursuant to a partnership or joint venture agreement or
similar arrangement where Debtor's resulting interest is
or becomes less than 50%;
d. on or after the date hereof, a change in ownership of
Debtor through an action or series of transactions, such
that any person is or becomes the beneficial owner,
directly or indirectly, of 50% or more of Debtor's voting
stock; or
e. a change in the composition of the board of trustees
(or other governing board of Debtor) as a result of which
the individuals elected to the board at the last meeting
of the shareholders at which there is not a contested
election cease to comprise a majority of the board.
3. Set-off. Debtor shall be entitled to set off against the
principal amount owing hereunder the amount of any Liquidated Claim, provided
that the amount of any Liquidated Claim shall be set off against payments due
hereunder in reverse order of due date. "Liquidated Claim" shall mean any claim
by Debtor against the holder of this Note under article 9 of the Interest
Purchase Agreement referred to in section 6 hereof to the extent that such claim
has been reduced to a judgment of a court or is subsumed in a settlement
agreement to which the holder hereof is a signatory.
4. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
a. Payments. The Debtor shall fail to make any principal
payment when due;
b. Bankruptcy. The Debtor shall commence a voluntary
case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Debtor and the petition is not controverted within 30 days,
or is not dismissed within 90 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the
Debtor; or the Debtor commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Debtor;
or there is commenced against the Debtor any such proceeding which
remains undismissed for a period of 90 days; or the Debtor is
adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Debtor
611697.1
-2-
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of 90 days; or the Debtor makes a general assignment for
the benefit of creditors;
c. Other Defaults. Debtor or any subsidiary of Debtor
defaults (whether as primary obligor or as guarantor or other surety)
in any payment of principal or interest on any obligation in respect of
its indebtedness beyond any period of grace provided with respect
thereto, or Debtor or any subsidiary of Debtor fails to perform or
observe any other agreement, term or condition contained in any
agreement under which any such indebtedness is created (or if any other
event thereunder or under any such agreement shall occur and be
continuing), and, on the basis of such default, failure or other event,
the holder or holders of such obligation cause such obligation to
become due (or to be repurchased by Debtor or any such subsidiary)
prior to the stated maturity of such obligation;
then the Holder, at Holder's option, may declare all unpaid amounts under this
Note to be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Debtor.
Thereafter, the outstanding Principal Amount shall bear interest at an annual
rate equal to fifteen percent (15%) per annum from the date of notice to Debtor
of such Event of Default until the date all outstanding principal and any
accrued interest have been paid in full.
5. Waivers. The Debtor and all endorsers hereby severally
waive diligence, demand, presentment, protest and notice of any kind, and assent
to extensions of the time of payment, release, surrender or substitution of
security, or forbearance or other indulgence, without notice. No failure or
delay on the part of Holder in exercising any right or remedy accruing upon the
occurrence of an Event of Default shall impair the right or remedy or constitute
a waiver thereof or acquiescence of the Event of Default. All remedies are
cumulative to the extent permitted by law.
6. Interest Purchase Agreement. This Note is one of the
Notes referred to in, and the form of which is attached to, that certain
Interest Purchase Agreement, dated as of June 16, 1997, by and between John R.
Klopp, Craig M. Hatkoff and Valentine Wildove & Company, Inc., as sellers, and
Debtor, as buyer.
7. Assignment. This Note may not be assigned, assumed,
changed, modified or terminated orally or otherwise, except by a writing
executed by Holder hereof.
8. Binding Effect. This Note and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns.
611697.1
-3-
9. Notices. All notices, consents and other communications
under this Note shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand, (b) when sent by telecopier (with receipt
confirmed), provided that a copy is promptly thereafter mailed by first class
prepaid registered or certified mail, return receipt requested, (c) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), or by such other means as the
parties may agree from time to time or (d) five (5) Business Days after being
mailed, by first class postage prepaid registered or certified mail, return
receipt requested; in each case to the appropriate addresses, and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate as to itself by notice to the other parties):
(a) If to Holder:
Valentine Wildove & Company, Inc.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp and Craig M. Hatkoff
Telecopy: (212) 593-0316
(b) If to Debtor:
California Real Estate Investment Trust or Capital Trust
131 Steuart Street, #200
San Francisco, California 94105
Attention: Chief Executive Officer
Telecopy: (415) 543-6269
with a copy to:
Equity Group Investments, Inc.
2 North Riverside Plaza, 6th Floor
Chicago, Illinois 60606
Attention: Gary R. Garrabrant
Telecopy: (312) 454-0157
611697.1
-4-
and to:
Victor Capital Group, L.P.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp
Telecopy: (212) 593-0316
10. Governing Law. This Note shall be governed by and
construed and interpreted in accordance with the internal laws of the State of
New York, without giving effect to the principles of conflicts of laws thereof.
CAPITAL TRUST
By: _________________________
Name:
Title:
611697.1
-5-
NON-NEGOTIABLE NOTE
$675,000 New York, New York
July 15, 1997
FOR VALUE RECEIVED, CAPITAL TRUST (the "Debtor"), hereby
unconditionally promises to pay to VALENTINE WILDOVE & COMPANY, INC. (the
"Holder"), at the principal offices of Debtor, or at such other place in the
continental United States of America as Holder may from time to time designate
in writing, the principal sum of SIX HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
($675,000) (the "Principal Amount"), to be paid in lawful money of the United
States of America in immediately available funds as set forth below.
1. Repayment. The Principal Amount shall be due and payable in
ten (10) semi-annual installments commencing on January 1, 1998 and on each June
1 and January 1 thereafter (each a "Payment Date"), until paid in full. Each
installment shall be in an amount equal to one-tenth of the Principal Amount. No
interest shall be accrued on or be payable under this Note prior to the due date
of this Note, whether at stated maturity or upon acceleration pursuant to
section 4 hereof.
2. Prepayment. Debtor shall prepay all of the unpaid portion
of the Principal Amount and all accrued interest, if any, on or prior to the
effective date of any Change in Control Event. "Change in Control Event" shall
mean
a. a merger or acquisition involving Debtor in which either:
(i) 50% or more of Debtor's voting stock
outstanding after the merger is held by
holders different from those who held
Debtor's voting stock immediately prior to
such merger or acquisition; or
(ii) the composition of the board of trustees (or
other governing board of Debtor) changes as
a result of which the individuals elected to
the board at the last meeting of the
shareholders at which there was not a
contested election cease to comprise a
majority of the board;
b. the sale, transfer or other disposition of all or
substantially all of the assets of Debtor in liquidation
or dissolution of Debtor;
611699.1
c. a transfer of all or substantially all of Debtor's assets
pursuant to a partnership or joint venture agreement or
similar arrangement where Debtor's resulting interest is
or becomes less than 50%;
d. on or after the date hereof, a change in ownership of
Debtor through an action or series of transactions, such
that any person is or becomes the beneficial owner,
directly or indirectly, of 50% or more of Debtor's voting
stock; or
e. a change in the composition of the board of trustees
(or other governing board of Debtor) as a result of
which the individuals elected to the board at the
last meeting of the shareholders at which there is
not a contested election cease to comprise a majority
of the board.
3. Set-off. Debtor shall be entitled to set off against the
principal amount owing hereunder the amount of any Liquidated Claim, provided
that the amount of any Liquidated Claim shall be set off against payments due
hereunder in reverse order of due date. "Liquidated Claim" shall mean any claim
by Debtor against the holder of this Note under article 9 of the Interest
Purchase Agreement referred to in section 6 hereof to the extent that such claim
has been reduced to a judgment of a court or is subsumed in a settlement
agreement to which the holder hereof is a signatory.
4. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
a. Payments. The Debtor shall fail to make any principal
payment when due;
b. Bankruptcy. The Debtor shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against
the Debtor and the petition is not controverted within 30 days, or is
not dismissed within 90 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the
Debtor; or the Debtor commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Debtor;
or there is commenced against the Debtor any such proceeding which
remains undismissed for a period of 90 days; or the Debtor is
adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Debtor
611699.1
-2-
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of 90 days; or the Debtor makes a general assignment for
the benefit of creditors;
c. Other Defaults. Debtor or any subsidiary of Debtor defaults
(whether as primary obligor or as guarantor or other surety) in any
payment of principal or interest on any obligation in respect of its
indebtedness beyond any period of grace provided with respect thereto,
or Debtor or any subsidiary of Debtor fails to perform or observe any
other agreement, term or condition contained in any agreement under
which any such indebtedness is created (or if any other event
thereunder or under any such agreement shall occur and be continuing),
and, on the basis of such default, failure or other event, the holder
or holders of such obligation cause such obligation to become due (or
to be repurchased by Debtor or any such subsidiary) prior to the stated
maturity of such obligation;
then the Holder, at Holder's option, may declare all unpaid amounts under this
Note to be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Debtor.
Thereafter, the outstanding Principal Amount shall bear interest at an annual
rate equal to fifteen percent (15%) per annum from the date of notice to Debtor
of such Event of Default until the date all outstanding principal and any
accrued interest have been paid in full.
5. Waivers. The Debtor and all endorsers hereby severally
waive diligence, demand, presentment, protest and notice of any kind, and assent
to extensions of the time of payment, release, surrender or substitution of
security, or forbearance or other indulgence, without notice. No failure or
delay on the part of Holder in exercising any right or remedy accruing upon the
occurrence of an Event of Default shall impair the right or remedy or constitute
a waiver thereof or acquiescence of the Event of Default. All remedies are
cumulative to the extent permitted by law.
6. Interest Purchase Agreement. This Note is one of the Notes
referred to in, and the form of which is attached to, that certain Interest
Purchase Agreement, dated as of June 16, 1997, by and between John R. Klopp,
Craig M. Hatkoff and Valentine Wildove & Company, Inc., as sellers, and Debtor,
as buyer.
7. Assignment. This Note may not be assigned, assumed,
changed, modified or terminated orally or otherwise, except by a writing
executed by Holder hereof.
8. Binding Effect. This Note and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns.
611699.1
-3-
9. Notices. All notices, consents and other communications
under this Note shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand, (b) when sent by telecopier (with receipt
confirmed), provided that a copy is promptly thereafter mailed by first class
prepaid registered or certified mail, return receipt requested, (c) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), or by such other means as the
parties may agree from time to time or (d) five (5) Business Days after being
mailed, by first class postage prepaid registered or certified mail, return
receipt requested; in each case to the appropriate addresses, and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate as to itself by notice to the other parties):
(a) If to Holder:
Valentine Wildove & Company, Inc.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp and Craig M. Hatkoff
Telecopy: (212) 593-0316
(b) If to Debtor:
California Real Estate Investment Trust or Capital Trust
131 Steuart Street, #200
San Francisco, California 94105
Attention: Chief Executive Officer
Telecopy: (415) 543-6269
with a copy to:
Equity Group Investments, Inc.
2 North Riverside Plaza, 6th Floor
Chicago, Illinois 60606
Attention: Gary R. Garrabrant
Telecopy: (312) 454-0157
611699.1
-4-
and to:
Victor Capital Group, L.P.
885 Third Avenue, 12th Floor
New York, New York 10022
Attention: John R. Klopp
Telecopy: (212) 593-0316
10. Governing Law. This Note shall be governed by and
construed and interpreted in accordance with the internal laws of the State of
New York, without giving effect to the principles of conflicts of laws thereof.
CAPITAL TRUST
By: _________________________
Name:
Title:
611699.1
-5-