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EXHIBIT 10.3
FORM OF SECURED PROMISSORY NOTE
$_________ January 2, 1996
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned, ___________, ("Maker") promises to
pay to the order of Manufactured Home Communities, Inc., a Maryland corporation
("Payee", which term shall mean the holder, from time to time, of this Note),
with an office at Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606,
or at such other place as the holder hereof may from time to time designate, the
principal sum of $_____________ with interest on the unpaid principal balance
from time to time outstanding, at the rate set forth below, with payment of
principal and interest to be made in lawful money of the United States which
shall be legal tender for public and private debts at the time of payment, as
follows:
(a) Interest shall be computed on the basis of a three hundred
sixty five (365) day year but for the actual number of days outstanding,
at a rate per annum equal to five and ninety-one/100 percent (5.91%).
Interest shall be payable quarterly in arrears, commencing on April 15,
1996 and on the fifteenth day of each July, October, January and April
thereafter until the Maturity Date (as such term is hereinafter defined)
out of Net Dividends as hereinafter provided. The total unpaid principal
balance and all accrued but unpaid interest shall be due and payable on
the Maturity Date. All payments of principal or interest shall be made to
the holder of this Note not later than 1:00 p.m. on the date and at the
place of payment designated by the holder hereof as aforesaid, and any
payment received on such date but after such hour shall be deemed to have
been paid to and received by the holder hereof on the next succeeding
business day. If the date on which any payment is required to be made
pursuant to this Note is not a business day, then such payment shall be
due and payable on the next succeeding date which is not a Saturday,
Sunday or legal holiday in the City of Chicago, State of Illinois.
(b) As used in this Note, the term "Maturity Date" shall mean the
date which is the first to occur of (i) January 2, 2005, or (ii) the date
on which the Maker is no longer employed, for any reason whatsoever other
than death or disability (as hereinafter defined), by the Payee or an
affiliate thereof, or (iii) the date on which right to accelerate payment
of this Note accrues to the holder hereof as otherwise provided in this
Note or as provided in that certain Pledge Agreement of even date herewith
(the "Pledge Agreement") given by Maker to Payee to secure the payment of
this Note. For purposes hereof, disability shall mean Maker's inability
to perform his usual and customary employment obligation for ninety (90)
consecutive days.
All such payments shall be made without reduction, and shall not be
subject to any claim or offset of any kind or nature whatsoever.
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1. Permissible Prepayments.
Provided Maker is not in default under this Note, or the Pledge
Agreement or any other document relating to this Note (collectively, the "Loan
Documents"), the principal amount of this Note or any interest accrued thereon
may at any time and from time to time be prepaid in whole or in part, together
with interest accrued thereon to the date of such prepayment, without premium,
upon not less than ten (10) days' prior written notice to the Payee at the place
of payment designated above.
2. Required Prepayments.
Maker shall be required to pay to Payee all Net Dividends (as
hereinafter defined) within thirty (30) days of receipt thereof by Maker to be
credited against accrued and unpaid interest and the remainder, if any, to
principal. "Net Dividends" shall mean any and all payments made by Payee and
received by Maker solely in his capacity as a stockholder of Payee less that
amount which results from multiplying the maximum rate of federal and state
income taxes then payable by Maker with respect to receipt of such payments.
3. Default.
At the option of Payee, this Note shall become immediately due and
payable, without notice or demand, upon the occurrence at any time of any of the
following:
(a) failure to pay when due any payment of principal or interest
due hereunder; or
(b) the commencement of any proceeding under any bankruptcy,
reorganization, arrangement of debt, insolvency, readjustment of debt or
receivership law or statute is filed by or against Maker or the Maker
makes an assignment for the benefit of creditors; or
(c) the occurrence of any other default by Maker under this Note;
or
(d) the occurrence of any other Event of Default as defined in and
pursuant to the Pledge Agreement.
4. Remedies.
If this Note is not paid when due, whether at maturity or by
acceleration, Maker promises to pay all costs of collection, including without
limitation attorneys' fees, and all expenses in connection with the protection
or realization of the collateral securing this Note whether or not suit is filed
hereon; such costs and expenses shall include without limitation all costs,
attorneys' fees and expenses incurred by the holder hereof in connection with
any insolvency, bankruptcy, reorganization, arrangement or other similar
proceedings involving the undersigned, vwhich in any way affects the exercise by
the holder of its rights and remedies under this Note or under the Pledge
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Agreement or other agreement securing this Note. Should interest not be paid
when due, it shall thereafter bear like interest as the principal. Additionally,
in the event of any default under this Note, the interest rate provided for
herein shall immediately without notice, increase to three percent (3%) over the
interest rate described in paragraph (a) on page one hereof (the "Default
Interest Rate").
5. Miscellaneous.
A. Presentment, demand, protest, notices of protest, dishonor and
non-payment of this Note and all notices of every kind are hereby waived. To the
extent permitted by applicable law, the defense of the statute of limitations is
hereby waived by the undersigned.
B. No single or partial exercise of any power hereunder or the
Pledge Agreement shall preclude other or further exercise thereof or the
exercise of any other power. The holder hereof shall at all times have the right
to proceed against any portion of the security held herefor in such order and in
such manner as the holder may deem fit, without waiving any rights with respect
to any other security. No delay or omission on the part of the holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note.
C. This Note is secured by the Pledge Agreement which contains
provisions for the acceleration of the Maturity Date hereof upon the happening
of certain stated events.
D. Maker warrants and represents to Payee that the indebtedness
evidenced by this Note is with respect to an exempt transaction under the
Truth-In-Lending Act, 15 U.S.C. 1601 et seq. This Note has been executed and
delivered in, and shall be governed by and construed under the laws of, the
State of Illinois, and as such is exempt from the limitation upon interest that
may be charged pursuant to the provisions of Chapter 17, Section 6404 of the
Illinois Revised Statutes. Maker hereby submits to personal jurisdiction in said
State for the enforcement of Maker's obligations hereunder, and waives any and
all personal rights under the law of any other state to object to jurisdiction
within such State for the purposes of litigation to enforce such obligations of
Maker. In the event such litigation is commenced, Maker agrees that service of
process may be made and personal jurisdiction over Maker obtained, by service of
a copy of the summons, complaint and other pleadings required to commence such
litigation upon Maker's appointed Agent for Service of Process in such State,
which Agent Maker designates to be:
Sheli Z. Rosenberg
Equity Group Investments, Inc.
Two North Riverside Plaza
Chicago, Illinois 60606
Maker may designate a substitute attorney as agent, or change the address
to which said copies shall be sent, by notice to Payee at the place and in the
manner more fully provided in the Stock Pledge Agreement.
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E. It is the intention of the parties to conform strictly to the
usury laws, whether state or federal, that are applicable to this Note. 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, shall the amount paid or agreed to be paid to
Payee or the holder hereof, or collected by Payee or such holder, for the use,
forbearance or detention of the money loaned or to be loaned hereunder or
otherwise, or for the payment or performance of any covenant or obligation
contained herein or in the Loan Documents exceed the maximum amount permissible
under applicable federal or state usury laws. If under any circumstances
whatsoever fulfillment of any provision hereof or of the Loan Documents, shall
involve exceeding the limit of validity prescribed by law, then the obligation
to be fulfilled shall be reduced to the limit of such validity; and if under any
circumstances Payee or any other holder hereof shall ever receive an amount
deemed interest by applicable law, which would exceed the highest lawful rate,
such amount that would be excessive interest under applicable usury laws shall
be applied to the reduction of the principal amount owing hereunder or to other
indebtedness secured by the Loan Documents and not to the payment of interest,
or if such excessive interest exceeds the unpaid balance of principal and such
other indebtedness, the excess shall be deemed to have been a payment made by
mistake and shall be refunded to Maker or to any other person making such
payment on Maker's behalf. All sums paid or agreed to be paid to the holder
hereof for the use, forbearance or detention of the indebtedness of Maker
evidenced hereby outstanding from time to time shall, to the extent permitted by
applicable law, and to the extent necessary to preclude exceeding the limit of
validity prescribed by law, be amortized, prorated, allocated and spread from
the date of disbursement of the proceeds of this Note until payment in full of
the loan evidenced hereby so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof. The terms and provisions of
this paragraph shall control and supersede every other provision of all
agreements between Maker and Payee.
F. Time is of the essence with respect to the performance of the
obligations of Maker under this Note, the Pledge Agreement and each other
document securing this Note.
G. This Note consists of four (4) pages.
MAKER:
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