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EXHIBIT 10.8
PROMISSORY NOTE
(LINE OF CREDIT)
$6,000,000.00 DETROIT, MICHIGAN
DUE DATE: SEPTEMBER 30, 2002 DATED: AS OF SEPTEMBER 30, 1997
FOR VALUE RECEIVED, XXXXXXX FINANCIAL SERVICES CORPORATION, a Michigan
corporation ("Borrower"), promises to pay to the order of SUN COMMUNITIES,
INC., a Maryland corporation ("Lender"), at 00000 Xxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000, or at such other place as Lender may
designate in writing, the principal sum of SIX MILLION AND NO/100 DOLLARS
($6,000,000.00) or such lesser sum as shall have been advanced by Lender to
Borrower under the loan account hereinafter described, plus interest as
hereinafter provided, all in lawful money of the United States of America, in
accordance with the terms hereof.
In accordance with the terms of the Loan Agreement (as defined below),
Xxxxxx will loan to Borrower, upon not less than thirty (30) days written
notice to Lender, up to the principal amount of $6,000,000.00, in increments of
not less than $500,000.00. All advances made hereunder shall be charged to a
loan account in Xxxxxxxx's name on Xxxxxx's books, and Xxxxxx shall debit to
such account the amount of each advance made to, and credit to such account the
amount of each repayment made by Borrower. From time to time but not less than
quarterly, Lender shall furnish Borrower a statement of Xxxxxxxx's loan
account, which statement shall be deemed to be correct, accepted by, and
binding upon Borrower, unless Xxxxxx receives a written statement of exceptions
from Borrower within ten (10) days after such statement has been furnished.
The unpaid principal balance of this promissory note ("Note") shall bear
interest, computed upon the basis of a year of 360 days for the actual number
of days elapsed in a month, at a per annum rate of interest (the "Effective
Rate") which is equal to one and 25/100 percent (1.25%) in excess of that rate
of interest established by Michigan National Bank as its prime commercial
lending rate (the "Index"), as such Index may vary from time to time. If the
Index shall be increased or decreased, the Effective Rate under this Note shall
be increased or decreased by the same amount, effective upon the day of each
increase or decrease in the Index. On the Due Date, the entire unpaid
principal balance of this Note, together with all accrued and unpaid interest,
shall be due and payable in full.
Advances of principal, repayment and readvances may be made under this
Note from time to time but Xxxxxx, in its sole discretion, may refuse to make
advances or readvances hereunder during any period that this Note is in
default. All payments received hereunder shall, at the option of Xxxxxx, first
be applied against accrued and unpaid interest and the balance against
principal. Borrower expressly assumes all risks of loss or delay in the
delivery of any payments made by mail, and no course of conduct or dealing
shall affect Borrower's assumption of these risks.
Upon the occurrence of any of the following events (each an "Event of
Default"), Lender, at its option, and without notice to Borrower, may declare
the entire unpaid principal balance of this Note and all accrued interest,
together with all other indebtedness of Borrower to Lender, to be immediately
due and payable: (a) failure to pay any principal or interest payment to Lender
when due; (b) any statement, warranty or representation made in any of the
Related Documents or in any Financial Statement is false or misleading; (c)
breach of any covenant, term, condition or agreement stated in this Note, the
Loan Agreement, the Related Documents or any agreement relating to Senior Debt;
(d) any cessation of Borrower's business or the termination of Borrower's
existence by sale, dissolution, merger or otherwise; (e) any conveyance is made
of substantially all of Borrower's assets, any assignment is made for the
benefit of creditors, or if any insolvency, liquidation or reorganization
proceeding shall be filed by or against Borrower under the Bankruptcy Code or
otherwise; (f) any attachment, execution, levy, forfeiture, tax lien or similar
writ or process is issued against any of Borrower's property; (g) any material
adverse change occurs or is imminent the effect of which would be to
substantially diminish Borrower's financial condition, business, or ability to
perform its agreements with Lender; (h) any other indebtedness to Lender or any
other creditor becomes due and remains unpaid after acceleration of the
maturity or after the stated maturity; (i) Borrower incurs any indebtedness
(other than Senior Debt) after the date hereof; or (j) a Change of Control
Event.
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Upon the occurrence and during the continuance of an Event of Default, the
outstanding principal amount hereof shall bear interest at a rate which is two
percent (2.0%) per annum greater than the Effective Rate otherwise applicable.
Acceptance by Lender of any payment in an amount less than the amount then
due shall be deemed an acceptance on account only, and Borrower's failure to
pay the entire amount then due shall be and continue to be a default. Upon the
occurrence of any default, neither the failure of Lender promptly to exercise
its right to declare the outstanding principal and accrued unpaid interest
hereunder to be immediately due and payable, nor the failure of Lender to
demand strict performance of any other obligation of Borrower or any other
person who may be liable hereunder, shall constitute a waiver of any such
rights, nor a waiver of such rights in connection with any future default on
the part of Borrower or any other person who may be liable hereunder.
Borrower and all endorsees, sureties and guarantors hereof hereby jointly
and severally waive presentment for payment, demand, notice of non-payment,
notice of protest or protest of this Note, and Lender diligence in collection
or bringing suit, and do hereby consent to any and all extensions of time,
renewals, waivers or modifications as may be granted by Lender with respect to
payment or any other provisions of this Note. The liability of Borrower under
this Note shall be absolute and unconditional, without regard to the liability
of any other party.
Notwithstanding anything herein to the contrary, in no event shall
Borrower be required to pay a rate of interest in excess of the Maximum Rate.
The term "Maximum Rate" shall mean the maximum non-usurious rate of interest
that Xxxxxx is allowed to contract for, charge, take, reserve or receive under
the applicable laws of any applicable state or of the United States of America
(whichever from time to time permits the highest rate for the use, forbearance
or detention of money) after taking into account, to the extent required by
applicable law, any and all relevant payments or charges hereunder, or under
any other document or instrument executed and delivered in connection therewith
and the indebtedness evidenced hereby.
In the event Lender ever receives, as interest, any amount in excess of
the Maximum Rate, such amount as would be excessive interest shall be deemed a
partial prepayment of principal, and, if the principal hereof is paid in full,
any remaining excess shall be returned to Borrower. In determining whether or
not the interest paid or payable, under any specified contingency, exceeds the
Maximum Rate, Borrower and Lender shall, to the maximum extent permitted by
law, (a) characterize any non-principal payment as an expense, fee, or premium
rather than as interest; (b) exclude voluntary prepayments and the effects
thereof; and (c) amortize, prorate, allocate and spread the total amount of
interest through the entire contemplated term of such indebtedness until
payment in full of the principal (including the period of any extension or
renewal thereof) so that the interest on account of such indebtedness shall not
exceed the Maximum Rate.
This Note is delivered in connection with that certain Subordinated Loan
Agreement by and between Lender and Borrower (the "Loan Agreement").
Capitalized terms used but not otherwise defined in this Note shall have the
meanings ascribed to such terms in the Loan Agreement.
This Note shall be binding upon Borrower and its successors and assigns,
and the benefits hereof shall inure to Lender and its successors and assigns.
This Note has been executed in the State of Michigan, and all rights and
obligations hereunder shall be governed by the laws of the State of Michigan.
BORROWER:
XXXXXXX FINANCIAL SERVICES
CORPORATION, a Michigan corporation
By:
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Xxxxxxx X. Xxxxxxxx, President
