Case: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 1 of 8 PageID f? IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN 07CV497 JUDGE CASTILLO MAGISTRATE JUDGE ASHMAN DAVID R. MARKIN, Plaintiff, NO. CHEBEMMAINC., \m Defendant. 5 2007 7 aims. U. lftgigg.?lus ??Ukr Plaintiff DAVID MARKIN (?Markin?), for his Complaint against defendant CHEBEMMA INC. (?Chebemma?), states as follows: PARTIES 1. Plaintiff Markin is citizen of the State of Florida who resides in West Palm Beach, Florida. 2. Defendant Chebemma is an Illinois corporation with its principal place of business in Chicago, Illinois. AND VENUE 3. The Court has jurisdiction over this action pursuant to 28 U.S.C. 1332 as the parties are citizens of different states and the matter in controversy, exclusive Of interest and costs, exceeds the sum of Seventy-Five Thousand Dollars 4. Venue is proper pursuant to 28 U.S.C. 1391(a) as a substantial part of the events or omissions giving rise to the claim occurred in the Northern District of Illinois. Case: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 2 of 8 PageID COUNT I (BREACH OF PROMISSORY NOTE) 5. Plaintiff incorporates by reference Paragraphs 1?4 as Paragraph 5 of Count I. 6. On or about August 27, 2004, Chebemma executed a certain Promissory Note (the ?Note?) in favor of Markin in the principal amount of $2,385,000.00 (the ?Principal Amount?). A true and correct copy of the Note is attached hereto as Exhibit A. 7. Pursuant to the terms of the Note, the unpaid Principal Amount accrues interest at the annual rate of ?prime, as published in the Wall Street Journal? (the ?Interest Rate?). 8. In addition, and pursuant to the terms of the Note, Chebemma agreed to make quarterly interest payments to Markin of $13,200.00 beginning on October 1, 2004 and ending September 1, 2006. Note, ?11 9. Pursuant to the terms of the Note, the unpaid balance of the Principal Amount plus accrued interest, was due and payable on September 30, 2006. Note, 10. As of September 30, 2006, the total amount owed by Chebemma to Markin, upon maturity of the Note, was $2,569,973, representing the Beginning Principal Amount plus the amount of interest owed ($303,773) less interest paid 11. As of the date of this filing, Chebemma has failed to pay the amount due and owing to Markin under the Note, and, as such, is in default pursuant to the terms of the Note. 12. Pursuant to Paragraph 5 of the Note, interest is to accrue on the balance of the unpaid Principal Amount subsequent to September 30, 2006 at a rate per annum equal to five percent in excess of the Interest Rate. 13. Markin is entitled to judgment against Markin as of the date of filing in the total amount of $2,569,973.00 plus accrued interest since September 30, 2006 on the unpaid Principal Amount consistent with the terms of Paragraph 5 of the Note. 2 Case: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 3 of 8 PageID WHEREFORE, David Markin respectfully prays this Court enter a judgment against Chebemma Inc. in the amount of $2,569,973.00 plus accrued interest since September 30, 2006 on the unpaid Principal Amount consistent with the terms of Paragraph 5 of the Note, plus costs, 1% of the Attorneys'for David R. Markin and any other relief this Court deems just and appropriate. Robert A. Chapman (6191210) Peter M. Spingola (6243942) CHAPMAN SPINGOLA, LLP 77 West Wacker Drive Suite 4800 Chicago, Illinois 60601 312/630-9202 Case: 1:07-cv-00497 Document 1 Filed: 01/25/07 Page 4 of 8 PageID Promissow Note $2,385,000.00 43?? 11,2004 FOR VALUE RECEIVED, the undersigned, INC, an Illinois Company ("Maker"), promises to pay, in installments as hereinafter provided, to DAVID MARKIN, an individual resident of Florida, and his successors and/or assigns ("Payee"), in lawful money of the United States of America, at [Barnett Chairman?s Center Suite 203, 220 Sunrise Avenue, Palm Beach Florida, 33480] or at such other place as Payee may direct in writing, the principal sum 0 Two Million Three Hundred Eighty-Five Thousand and Nof100 Dollars (?Beginning Principal Amount"), together with interest thereon from the date hereof at the rate of PRIME, AS PUBLISHED IN THE WALL STREET JOURNAL per annum (the "Interest Rate") as of the ?rst business day of the month of the Quarterly Payment interest is paid in, at the time, and under the circumstances set forth herein, in each case computed on the basis of a 360-day year and accrued and paid for the actual number of days elapsed in any period for which interest is payable for the property commonly known as 1163? 1167 State Street, Chicago, Illinois (hereinafter referred to as the ?Property"). Payments of principal and interest shall be paid in quarterly installments as follows: a) A payment of 13,200.00 (the "Quarterly Payment?), which shall be applied ?rst to all accrued and unpaid interest with the remaining funds to be applied to the principal balance, shall be due on the ?rst day of October 1, 2004 and on the ?rst day of each third calendar month thereafter up to and including the ?rst day of September, 2006 (each, a "Payment Date"); 1. b) The unpaid balance of said Beginning Principal Amount and all accrued but unpaid interest thereon shall be due and payable on the last day of September, 2006, (the "Maturity Date?), subject to paragraph 2 below; c) In the event that any payment is not received by Payee within ?ve (5) days after the date when due, then, in addition to any default interest payments due hereunder, Maker shall also pay to Payee a late charge in an ambunt equal to ?ve percent of the amount of such overdue payment; and 2. Upon the occurrence of any of the following: a) the maturity of this Note; 13) sale of the Property; or o) re?nance of the First mortgage for the Property, the total due under the Note shall be subject to an ?Earn Out?. Said Earn Out shall be determined as follows: a) 30 days prior to the maturity of the Note, sale of the Property or re?nance of the First mortgage for the Property, the Maker shall deliver to Payee the following items: A rent roll for the Prop erty certi?ed by the Maker; (ii) Tenant Estoppel certi?cates executed by each Tenant and A copy of all the lease(s) for the Property. Maker shall calculate the aggregate Net Rent of the Property and deliver b) Within 5 usiness of tendering eyes the items stated in 2 2 a(ii) and the aggregate Net Rent calculation to Payee. Net Rent is de?ned as annual gross 3 a5 We? Case: 1:07-cv-00497 Document 1 Filed: 01/25/07 Page 5 of 8 PageID rent collected from all of the tenants of the Property less annual iIlClJIl?Ctl operating the property as stated in the certi?ed rent rolls, tenant estoppel certi?cates and leases. IfTenant occupancy of the Property is less than one year, Net Rent shall be calculated and pro rated for a full year (365 days). If Tenant occupancy of the Preperty is less than 100%, Net Rent for the unleased space shall be calculated by including the unleased Space at the highest rental rate paid by any tenant for which there is a signed lease for the Property. c) Ifthe aggregate Net Rent is greater than Two Million Eight Hundred Thousand Dollars (2,800,000.00) the Maker of the Note shall pay to Payee the unpaid portion of the Beginning Principal Amount and all unpaid accrued interest thereto. cl) If the Aggregate Net Rent, is less than Two Million Eight Hundred Thousand Dollars the Beginning Principal Amount shall be reduced from TWO Million Three Hundred and Eighty-Five Thousand Dollars (2,335,000.00) to Three Hundred and Eighty-Five Thousand Dollars 85,000.00) (?Modi?ed Beginning Principal Amoun less all principal amounts hereafter paid to Payee. 3. This Note is secured by a Collateral Assignment of Bene?cial Interest (the "Collateral from Maker, as borrower, to Payee, as lender, covering the certain real property, consisting of land and the buildings and improvements thereon located at 1163~1167 State Street, Chicago, County of Cook, State of Illinois (the "Collateralized Prelim"). Reference is made to such documents for a description of the nature and extent of the security afforded thereby, the rights of the holder hereof in resPect of such security and the terms and conditions upon which this Note is secured. The holder of this Note is entitled to the bene?ts of the Collateral A131 and may enforce the agreements of Maker contained therein and exercise the remedies provided therein or otherwise in respect thereof, all in accordance with the terms thereof and which shall be fully subordinate to First Mortgage Lender and their right to consent to the Collateral ABI. 4. The Beginning Principal Amount or the Modi?ed Beginning Principal Amount of this Note as set forth in Paragraph 2 above is subject to prepayment, in whole or in part, without premium, at the sole option of Maker at any time Without penalty. The Beginning Principal Amount or the Modi?ed Beginning Principal Amount of this Note is also subject to prepayment without penalty, in part, at the option of Payee, upon the occurrence of a condemnation or casualty affecting the Property. Ifau Event of Default shall occur, the unpaid balance of the Beginning Principal Amount a) or the Modi?ed Beginning Principal Amount (whicheVer is applicable) of this Note may be declared due and payable. b) Maker hereby waives presentment for payment, demand, protest, and notice of protest or other notice of dishonor. To the extent permitted by law, Maker hereby waives and releases all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, as well as all bene?t that might accrue to Maker by virtue of any present or future laws exempting the Property, or any part of the'proceeds arising from any sale of any such prop erty, from attachment, levy or sale under execution, or providing for any stay of execution, exomption from civil process or extension of time for payment. c) The remedies of Payee as provided herein shall be cumulative and concurrent and may be pursued successively or concurrently against Maker and/or the collateral securing this Note. Nor- 7, d? failure on the part of Payee in exercising any right or remedy hereunder shall operate as waiver . Case: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 6 of 8 PageID or release thereof, nor shall any single or partial exercise of any such right or remedy preclude anyother further exercise thereof or the exercise of any other right or remedy hereunder. d) No modi?cation or waiver of any provision of this Note shall be effective unless the same shall be in writing signed by the party against which enforcement of such modi?cation or waiver is sought. e) Upon ?ill payment of the Beginning Principal Amount or Modi?ed Beginning Principal Amount (whichever is applicable), the Payee will return to Maker this Note with ?Cancelled? written across the front of each page, If Payee refuses to accept Maker?s prepayment of the Note, Maker shall be entitled to attorneys fees and costs incurred in enforcing the terms of this Note. 5. So long as any Event of Default exists hereunder, regardless of whether or not there has been an acceleration of the indebtedness evidenced hereby, and at all times a?er maturity of the indebtedness evidenced hereby (whether by acceleration or otherwise), interest shall accrue on the outstanding principal balance of this Note, ?'om the date of the relevant Evont of Default (after the expiration of any notice or grace periods), at a rate per annum equal to the lesser of ?ve percent in excess of the Interest Rate and (ii) the maximum rate of interest, if any, which may be collected from Maker under applicable law (the "Default Interest Rate"), and such default interest shall be due and payable on written demand. If any of the provisions of this Note shall require, or be deemed or adjudicated to require, the payment, or permit the collection, of interest in excess of the maximum amount permitted by law, Maker shall not be obligated to pay, nor shall Payee be permitted to collect, interest in excess of the amount permitted by law, and the provisions of this sentence shall supersede any con?ic?ng provisions contained herein. If any term or provision of this Note shall be held to be invalid, illegal or unenforceable, the validity of the other terms and provisions hereof shall in no way be affected thereby. 6. anything in this Note or in the Collateral ABI to the contrary, but subject to the quali?cations herein below set forth, Payee agrees that: a) Matter shall be liable upon the indebtedness evidenced hereby and for the other obligations arising under the Collateral ABI to the full extent (but only to the extent) of the security therefore, the 58318 being all preperties (whether real or personal), rights, estates and interests now or at any time hereafter securing the payment of thisNote and/or the other obligations of Maker under the Collateral ABI (collectively, the ?Security Property") and no attachment, execution or other writ of process shall be sought, issued or levied upon any assets, properties or ?mds of Maker other than the Security Property, exoept with reapth to the liability described below in this Section; b) In the event of a foreclosure of any liens, security titles, estates, assignments, rights or security interests securing the payment of this Note and/or the other obligations of Maker under the Collateral ABI, no judgment for any de?ciency upon the indebtedness evidenced hereby shall be sought or obtained by Payee against Maker, provided, however, that, notwithstanding the foregoing provisions of this Section, Maker shall be fully and personally liable and subject to legal action for proceeds paid under any insurance policies (or paid as a result of any other claim or cause of action against Case: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 7 of 8 PageID any person or entity) by reason of damage, loss or destruction to all or any portion of the Security Property, to the full extent such proceeds are not delivered to Payee, but which, under the terms of the Collateral ABI, should have been delivered to Payee, (ii) for proceeds or awards resulting hour the condemnation or other taking in lieu of condemnation of all or any portion of the Security Property, to the full extent of such proceeds or awards are not delivered to Payee, but which, under the terms of the Collateral ABL should have been delivered to Payee, for all tenant security deposits or other refundable deposits paid to or held by Maker or any other person or entity in connection with leases of all or any portion of- the Security Property which are not applied in accordance with the terms of the applicable lease or other agreement, (iv) for rent and other payments received from tenants under leases of all or any portion of the Security Property paid more than one (1) month in advance, for rents, issues, pro?ts and revenues of all or any portion of the Security Property received or applicable to a period alter the occurrence of any Event of efault hereunder or under the Collateral ABI which are not either applied to the ordinary and necessary expenses of owning and operating the Security Preperty or paid to Payee, (vi) for waste committed on the Security Property, arnage to the ecun'ty reperty as a result of the intentional misconduct gross negligence of Maker or any or its principals, of?cers, general partners enmembers or any agent or employee of any such person, or any removal of all or any portion of the Security Preperty in violation of the tonne of the CollateralABI, to the full extent of the losses or damages incurred by Payee on account of such occurrence, (vii) subject to terms and conditions of the Note and Collateral ABI, for failure to pay any. valid taxes, assessments, mechanic?s liens, material men?s liens ?or other liens which could create liens on any portion of the Security Property which would be superior to the lien or security title of the Collateral ABI, to the full extent of the amount claimed by any such lien lairn?ant with respect to any such taxes 0 assessments, to the extent that funds have been deposited with Payee pursuant to the terms of the Note and Collateral ABI speci?cally for the applicable taxes or assessments and not applied by Payee to pay such taxes and assessments, for all obligations and indemnides of Maker under the Collateral ABI relating to hazardous or toxic substances or compliance with chironmental laws and regulations to the full extent of any losses or damages (including I those resulting from diminution in value of any Security Preperty) incurred by Payee as a result of Maker's breach of such obligations and/or indemni?es, and (ix) for fraud, material misrepresentation or failure to disclose a material fact by Maker or any of its principals, of?cers, general partners or members, or any agent, employee or other person authorised or apparently authorized to make statements, representations or disclosures on behalf of Maker, any principal, c?cer, general partner or member of Maker, or any agent or employee of any such person, to the full extent of any losses, damages and expenses of Payee on account thereof. Nothing contained in this Section shall (1) be deemed to be a release or impairment of the indebtedness evidenced by this Note or the other obligations of Maker under the Collateral ABI or the lieu of the Collateral ABI upon the Security Property, (2) preclude Payee from foreclosing the Security Preperty in case of any Event of Default or from enforcing any of the other rights of Payee except as stated in this Section; and c) Maker shall have the right to transfer or convey all or any portion of the Property or any interest therein, to an entity owned or controlled, directly or indirectly, by Mark Hunt and/or- Chebemma Inc. an Illinois corporation d) Intentionally OmittedCase: 1:07-cv-OO497 Document 1 Filed: 01/25/07 Page 8 of 8 PageID e) Netwithstanding anything to the contrary in this Note, the CoIIateraI ABI, Payee shall not be deemed to have waived any right which Payee may have under Section 506(a), 506(1)), 1111(5) or any other provisions of the US. Bankruptcy Code to ?le a claim for the full amount of the indebtedness evidenced hereby or secured by the Collateral ABI or to require that'all collateral shall continue to secure all of the indebtedness owing to Payee in accordance with this Note and the Collateral ABI. 7. MAKER, TO THE FULL EXTENT PERMITTED BY IAW, HEREBY KNOWINGLY, IN TENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, SUBMITS TO PERSONAL JURISDICTION IN THE STATE IN WHICH THE PROPERTY IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATNG TO THIS NOTE, (ii) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDWG MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COWBTENT JURISDICTION SITTING IN THE COUNTY IN WHICH THE PROPERTY IS LOCATED, TO THE JURISDICTION OF SUCH COURTS AND (iv) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO BRING ANY ACTION, SUIT OR PROCEEDIN IN ANY OTHER EACH OP MAKER AND PAYEE BY ITS ACCEPTANCE OF THIS NOTE, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY WOWGLY, WTENTIONALLY AND VOLIMTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WATVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDINGBASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THE MEBTEDNESS EVIDENCED BY THIS NOTE OR ANY CONDUCT, ACT OR OF PAYEE OR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH PAYEE OR MAKER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. MAKER HEREBY CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPIAINT OR OTHER LEGAL PROCESS, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING ARISING FROM OR RELATING TO THIS NOTE BY REGISTERED OR CERTIFIED U.S. MAE, POSTAGE PREPAID TO MAKER AT THE ADDRESS SET FORTH IN HERJN. This Note shall be governed by and consulted in accordance with, the laws of the state in which the Property is located. . IN WITNESS WHEREOP, Maker has caused this Note to be exehuted as of the date set forth above. MAKER: CI-IEBEWA . A11 Illinois 'comar'ation By: Name: Tr 21' Title: 2 Address: