EXHIBIT 10.7
PROMISSORY NOTE
(Tranche B Term Note)
$5,000,000 New York, New York
July 17, 1998
FAMILY BOOKSTORES COMPANY, INC., a Michigan corporation (the
"BORROWER"), FOR VALUE RECEIVED, hereby promises to pay to the order of
BANK OF SCOTLAND (the "BANK"), at the office of BANK OF SCOTLAND (in such
capacity, the "AGENT") located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (or at such other location as the Agent notifies the Borrower of in
writing), on May 31, 2004, the principal sum of $5,000,000, or, if less,
the unpaid principal amount of Tranche B Term Loans made to the Borrower by
the Bank under the Agreement, in lawful money of the United States of
America and in same day funds.
The Borrower promises also to pay interest on the unpaid principal
amount hereof outstanding from time to time in like money and like funds at
said office at a rate per annum equal to (subject to the provisions of the
next paragraph) 2% per annum in excess of the Base Rate, such rate per
annum to change on the effective date of each change in the Base Rate.
Such interest shall be payable on each Quarterly Payment Date, commencing
with July 31, 1998, upon any prepayment in full hereof, upon maturity (by
acceleration or otherwise) and, after maturity, on demand. Interest shall
be computed for the actual number of days elapsed on the basis of a 360-day
year.
The unpaid principal amount hereof outstanding from time to time (and
any overdue interest in respect thereof) shall bear interest for each day
on which an Event of Default exists at a rate per annum (after as well as
before judgment) equal to 2% in excess of the interest rate otherwise
applicable to such amount on such day.
This Note is one of the Tranche B Term Notes described in, and has
been issued pursuant to, an Amended and Restated Loan Agreement dated as of
October 31, 1994 among the Borrower, the Bank and the other financial
institutions from time to time party thereto, and the Agent (said
agreement, as amended, extended, supplemented, renewed, restated or
otherwise modified from time to time, the "AGREEMENT") and is entitled to
the benefits thereof and of the Security Documents. Upon the occurrence of
an Event of Default, the principal of, and accrued interest on, this Note
may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
This Note is subject to mandatory repayment and prepayment on the
dates and in the amounts provided for in Section 2.4 of the Agreement and
is subject to voluntary prepayment only in accordance with the terms set
forth in Sections 2.6 and 5.2(a) of the Agreement.
The outstanding principal balance and accrued interest under this Note
at any time shall be determined as shown in records made in accordance with
manual, computerized, electronic or other record-keeping systems used from
time to time by the Bank or other holder of this Note (provided that such
systems accurately reflect the principal and interest of this Note and the
payments made hereunder).
Except to the extent required by law which cannot be waived, the
Borrower waives presentment, demand, protest or notice of any kind in
connection with this Note.
The Borrower agrees to pay to the holder hereof, on demand, all costs
and expenses (including legal fees) incurred in connection with the
enforcement and collection of this Note, including legal fees in bankruptcy
and judicial and non-judicial foreclosure proceedings.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED WHOLLY
WITHIN THE STATE OF NEW YORK (REGARDLESS OF THE PLACE WHERE THIS NOTE IS
EXECUTED).
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF THE BORROWER, ANY OTHER CREDIT PARTY, THE
AGENT, THE BANK, ANY OTHER BANK OR ANY OTHER HOLDER OF THIS NOTE. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK MAKING THE LOANS TO THE
BORROWER EVIDENCED BY THIS NOTE.
Terms used herein and not otherwise defined herein shall have the
meanings provided for such terms in the Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered as of the date first above written.
FAMILY BOOKSTORES COMPANY, INC.
5300 Xxxxxxxxx, X.X.
Grand Rapids, Mich. 49530 By /S/ XXXXX X. XXXXXXXXX
Title: Senior Vice President and Chief
Financial Officer
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