Q2 2002 10Q EXH10.48



Loan No.: 1910059-0005

 

 

 

PROMISSORY NOTE

 

	
$4,000,000.00
	
 
	
 
	
May 16, 2001




 

FOR VALUE RECEIVED, GOTTSCHALKS INC., a Delaware
corporation ( "Maker"), promises to pay to the order of HELLER FINANCIAL
LEASING, INC., a Delaware corporation (together with any holder of this Note,
                                                                                                                                                                   Payee"), at its office located at 500 West Monroe Street, Chicago, Illinois
60661, or at such other place as Payee may from time to time designate, the
principal sum of $4,000,000.00, together with interest thereon at a rate per
annum equal to the Base Rate (hereafter defined), plus three percent
(3.00%), payable in sixty (60) consecutive monthly installments of principal
plus interest commencing July 1, 2001, and continuing on the same day of each
consecutive calendar month thereafter until this Note is fully paid. The first
fifty-nine (59) such monthly installments shall each be in the principal amount
of $66,666.67, plus accrued interest, and the final monthly installment shall be
in the amount of the entire then outstanding principal balance hereunder, plus
all accrued and unpaid interest, charges and other amounts owing hereunder or
under the Security Agreement (defined below). All payments shall be applied
first to interest and then to principal. Interest shall be computed on the basis
of a 360-day year and charged for the actual number of days elapsed. Maker shall
make an interest only initial payment on June 1, 2001, of all accrued interest
from the date of this Note through May 31, 2001.

For purposes of this Note, the term "Base Rate" means,
for each calendar month, a rate of interest per annum equal to:

(a) the offered rate for deposits in U.S. dollars in an
amount comparable to the then outstanding principal balance hereunder in the
London interbank market for the relevant month that is published by the British
Bankers' Association and which appears on Telerate Page 3750, or any other
source utilized by Payee, as of 11:00 a.m. (London time) on the day which is two
(2) Business Days prior to the first day of the relevant month or, if for any
reason such a rate is not published by the British Bankers' Association on
Telerate or any other source utilized by Payee, the rate per annum equal to the
average rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at
which Payee determines that U.S. dollars in an amount comparable to the then
outstanding principal balance hereunder are being offered to prime banks for the
relevant month at approximately 11:00 a.m. (London time) on the day which is two
(2) Business Days prior to the first day of the relevant month for settlement in
immediately available funds by leading banks in the London interbank market
selected by Payee; divided by

(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days prior to the
beginning of the relevant month (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
of Governors of the Federal Reserve System or other governmental authority
having jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) which are required to be maintained
by a member bank of the Federal Reserve System; such rate to be rounded upward
to the next whole multiple of one-sixteenth of one percent (.0625%).

For the initial funding month (or any fraction thereof)
under this Note, the interest rate hereunder shall be the Base Rate in effect on
the day of funding, plus three percent (3%).

It is the intent of the parties to comply strictly with
applicable usury laws. Notwithstanding anything herein to the contrary, in no
event shall interest contracted for, taken, charged, reserved or received
hereunder ever exceed the highest non-usurious interest permitted under
applicable law and if any such excess interest is taken, received or collected,
then such excess shall be deemed the result of a mathematical error and shall be
applied as a reduction of principal and any remainder refunded to the Maker.

This Note is secured by the
collateral described in the Security Agreement dated July 24, 2000, between
Maker and Payee (the "Security Agreement"), the collateral described in the
Leasehold Deed Of Trust, Security Agreement,
Assignment Of Leases And Rents, And Fixture Filing of dated
May 16, 2001, granted by Maker to First American Title Guaranty Company for the
benefit of Payee, the collateral described in the Security Agreement dated
December 16, 1994, between Maker and Payee (the "Hanford Security Agreement"),
the collateral described in the Security Agreement dated September 30, 1996,
between Maker and Payee (the "SLO Security Agreement"), the collateral described
in the Deed of Trust, Security Agreement, Assignment of Leases and Rents and
Fixture Filing recorded on December 16, 1994 in the Official Records of Kings
County, California, as Instrument No. 9424303 (the "Hanford Deed of Trust") and
the collateral described in Deed of Trust, Security Agreement, Assignment of
Leases and Rents and Fixture Filing recorded on October 1, 1996, in the Official
Records of San Luis Obispo County, California, as Instrument No. 1996-049244 and
amended by that certain Amendment to Deed of Trust recorded July 30, 1999 in the
Official Records of San Luis Obispo County, California, as Instrument No. 1999-055875 (the
"SLO Deed of Trust;" and together with the Security Agreement, the
Hanford Security Agreement, the SLO Security Agreement, the Hanford Deed of
Trust and all related documents and instruments, all as amended and/or modified
as of the date hereof, the "Loan Documents") to which reference is made for a
statement of the nature and extent of protection and security afforded, certain
rights of Payee and certain rights and obligations of Maker.

Maker may not prepay all
or any part of principal outstanding under this Note prior to its stated
maturity except strictly in accordance with the terms of Section 3 of the
Security Agreement.

Time is of the essence hereof. If payment of any
installment or any other sum due under this Note or the Loan Documents is not
paid when due, Maker agrees to pay a late charge equal to the lesser of
(i) five cents per dollar on, and in addition to, the amount of each such
payment, or (ii) the maximum amount Payee is permitted to charge by law. In
the event of the occurrence of an Event of Default (as defined in the Security
Agreement), then the entire unpaid principal balance hereof with accrued and
unpaid interest thereon, together with all other sums payable under this Note or
the Loan Documents, shall, at the option of Payee and without notice or demand,
become immediately due and payable, such accelerated balance bearing interest
until paid at the rate of three percent (3%) per annum above the then otherwise
applicable interest rate hereunder.

Maker and all endorsers, guarantors or any others who may
at any time become liable for the payment hereof hereby consent to any and all
extensions of time, renewals, waivers and modifications of, and substitutions or
release of security or of any party primarily or secondarily liable on, or with
respect to, this Note or any of the Loan Documents or any of the terms and
provisions thereof that may be made, granted or consented to by Payee, and agree
that suit may be brought and maintained against any one or more of them, at the
election of Payee, without joinder of the others as parties thereto, and that
Payee shall not be required to first foreclose, proceed against, or exhaust any
security herefor, in order to enforce payment of this Note by any one or more of
them. Maker and all endorsers, guarantors or any others who may at any time
become liable for the payment hereof hereby severally waive presentment, demand
for payment, notice of nonpayment, protest, notice of protest, notice of
dishonor, and all other notices in connection with this Note, filing of suit and
diligence in collecting this Note or enforcing any of the security herefor, and,
without limiting any provision of any of the Loan Documents, agree to pay, if
permitted by law, all expenses incurred in collection, including reasonable
attorneys' fees, and hereby waive all benefits of valuation, appraisement and
exemption laws.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT PAYEE'S ELECTION AND
WITHOUT LIMITING PAYEE'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION,
MAKER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT
(FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL,
POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF MAKER, WHICH SERVICE
SHALL BE DEEMED COMPLETED WITHIN TEN DAYS AFTER THE DATE OF MAILING THEREOF.

MAKER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THIS WAIVER IS
INFORMED AND FREELY MADE. MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED
ON THE WAIVER IN MAKING THE LOAN EVIDENCED BY THIS NOTE, AND THAT PAYEE WILL
CONTINUE TO RELY ON THE WAIVER IN ITS RELATED FUTURE DEALINGS. MAKER FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

	
WITNESS / ATTEST

 


	
GOTTSCHALKS INC., a Delaware
corporation

 

By:/s/ Michael S. Geele

Name: Michael S. Geele


Title: Senior Vice President and Chief Financial Officer