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EXHIBIT 10.23.1
LOAN NO.: ▇-▇▇▇-▇▇▇
PROMISSORY NOTE
$100,000,000 April 1, 1999
Loan No. ▇-▇▇▇-▇▇▇
FOR VALUE RECEIVED, FelCor/CSS Holdings, L.P. a Delaware limited
partnership ("BORROWER") promises to pay to the order of THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("LENDER", which shall
also mean successors and assigns who become holders of this Note), at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as may from time
to time be designated by Lender, the principal sum of One Hundred Million and
No/100 U.S. Dollars ($100,000,00.00) with interest on the unpaid balance
("BALANCE") at the rate of Seven and Five Hundred Thirty-Six Thousandths
(7.536%) per annum ("NOTE RATE") from the date of the first disbursement of the
proceeds of the loan ("LOAN") evidenced by this Note ("FUNDING DATE") until
Maturity (defined below). Capitalized terms used without definition shall have
the meanings ascribed to them in the Instruments (defined below).
1. REGULAR PAYMENTS. Principal and interest shall be payable as
follows:
(a) Interest accrued from the Funding Date in the amount
of $293,066.67 shall be due and payable on April 15, 1999. The first
installment payment is an adjusted payment.
(b) Principal and interest shall be paid in One Hundred
Nineteen (119) installments of Seven Hundred Forty-One Thousand
Three Hundred Thirty-Four and 42/100 Dollars ($741,334.42) each,
commencing on May 15, 1999, and continuing on the fifteenth (15th)
day of each succeeding month to and including March 15, 2009. Each
payment due date is referred to as a "DUE DATE".
(c) The balance of all of the Obligations (as defined in
the Instruments) under each of the Instruments shall be due and
payable on April 1, 2009 ("MATURITY DATE"). "Maturity" shall mean
the Maturity Date or earlier date that the Obligations may be due
and payable by acceleration by ▇▇▇▇▇▇ as provided in the Loan
Documents (as defined in the Instruments).
(d) Interest on the Balance for any full month shall be
calculated on the basis of a three hundred sixty (360) day year
consisting of twelve (12) months of thirty (30) days each. For any
partial month, interest shall be due in an amount equal to (i) the
Note Rate divided by 360 multiplied by (ii) the number of days any
Balance is outstanding through and including the day of payment.
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2. LATE PAYMENT AND DEFAULT INTEREST.
(a) LATE CHARGE. If any payment due under the Loan
Documents is not fully paid by its due date, a late charge of $500
per day (the "DAILY CHARGE") shall be assessed for each day that
elapses until payment in full is made (including the date payment is
made); provided, however, that if any such payments, together with
all accrued Daily Charges, are not fully paid by the fourteenth day
following their due date, a late charge equal to four percent (4%)
of such payments (the "LATE CHARGE") shall be assessed and be
immediately due and payable. The Late Charge shall be payable in
lieu of Daily Charges that shall have accrued. The Late Charge may
be assessed only once on each overdue payment. These charges shall
be paid to defray the expenses incurred by ▇▇▇▇▇▇ in handling and
processing such delinquent payment(s) and to compensate Lender for
the loss of the use of such funds. The Daily Charge and Late Charge
shall be secured by the Loan Documents. The imposition of the Daily
Charge, Late Charge, and/or requirement that interest be paid at the
Default Rate (defined below) shall not be construed in any way to
(i) excuse Borrower from its obligation to make each payment under
this Note promptly when due or (ii) preclude Lender from exercising
any rights or remedies available under the Loan Documents upon an
Event of Default (as defined in the Instruments).
(b) ACCELERATION. Upon an Event of Default, including a
breach of Section 7.01 of the Instrument, ▇▇▇▇▇▇ may declare the
Balance, unpaid accrued interest, the Prepayment Premium (defined
below) and all other Obligations immediately due and payable in
full.
(c) DEFAULT RATE. Upon an Event of Default or at
Maturity, whether by acceleration (due to a voluntary or involuntary
default) or otherwise, the entire Obligations (excluding accrued but
unpaid interest if prohibited by law) shall bear interest at the
Default Rate. The "DEFAULT RATE" shall be the lesser of (i) the
maximum rate allowed by the law or (ii) the greater of (A) the Note
Rate plus five percent (5%) or (B) five percent (5%) plus the prime
rate (for corporate loans at large United States money center
commercial banks) published in the Wall Street Journal on the date
the applicable default occurs. The term "BUSINESS DAY" shall mean a
day which commercial banks are not authorized or required by law to
close in the Property State or in the State where payments made by
Borrower are received.
3. APPLICATION OF PAYMENTS. Before an Event of Default, all payments
received under this Note shall be applied in the following order: (a) to unpaid
Daily Charges, Late Charges and costs of collection; (b) to any prepayment
premium due; (c) to interest on the Balance; and (d) then to the Balance. After
an Event of Default, all payments shall be applied in any order determined by
Lender in its sole discretion.
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4. PREPAYMENT. This Note may be prepaid, in whole or in part, upon at
least thirty (30) days' prior written notice to Lender and upon payment of all
accrued interest (and other Obligations due under the Loan Documents) and a
prepayment premium ("PREPAYMENT PREMIUM") equal to the greater of (a) one
percent (1%) of the principal amount being prepaid multiplied by the quotient of
the number of full months remaining until the Maturity Date divided by the
number of full months comprising the term of this Note, or (b) the Present Value
of the Loan (defined below) less the amount of principal and accrued interest
(if any) being prepaid, calculated as of the prepayment date. The Prepayment
Premium shall be due and payable, except as provided in the Instrument or as
limited by law, upon any prepayment of this Note, whether voluntary or
involuntary, and Lender shall not be obligated to accept any prepayment of the
Note unless it is accompanied by the Prepayment Premium, all accrued interest
and all other Obligations due under the Loan Documents. Unless prepayment occurs
on a Due Date, the actual number of days until the next Due Date will be used to
discount during that partial month. Lender shall notify Borrower of the amount
and calculation of the Prepayment Premium. ▇▇▇▇▇▇▇▇ agrees that (a) Lender shall
not be obligated to actually reinvest the amount prepaid in any Treasury
obligation and (b) the Prepayment Premium is directly related to the damages
that Lender will suffer as a result of the prepayment. The "PRESENT VALUE OF THE
LOAN" shall be determined by discounting all scheduled payments remaining to the
Maturity Date attributable to the amount being prepaid at the Discount Rate
(defined below). The "DISCOUNT RATE" is the rate which, when compounded monthly,
is equivalent to the Treasury Rate (defined below), when compounded
semi-annually. The "TREASURY RATE" is the semi-annual yield on the Treasury
Constant Maturity Series with maturity equal to the remaining weighted average
life of the Loan (defined below), for the week prior to the prepayment date, as
reported in Federal Reserve Statistical Release H.15 - Selected Interest Rates,
conclusively determined by ▇▇▇▇▇▇ (absent a clear mathematical calculation
error) on the prepayment date. The rate will be determined by linear
interpolation between the yields reported in Release H.15, if necessary. If
Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate. Notwithstanding the foregoing, no
Prepayment Premium shall be due if the Note is prepaid during the last thirty
(30) days prior to the Maturity Date.
5. NO USURY. Under no circumstances shall the aggregate amount paid or
to be paid as interest under this Note exceed the highest lawful rate permitted
under applicable usury law ("MAXIMUM RATE"). If under any circumstances the
aggregate amounts paid on this Note shall include interest payments which would
exceed the Maximum Rate, Borrower stipulates that payment and collection of
interest in excess of the Maximum Rate ("EXCESS AMOUNT") shall be deemed the
result of a mistake by both Borrower and Lender and Lender shall promptly credit
the Excess Amount against the Balance or refund to Borrower any portion of the
Excess Amount which cannot be so credited.
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6. SECURITY AND OTHER LOAN DOCUMENTS INCORPORATED. This Note is the
Note referred to and secured by, among other things, those certain first
mortgages or first deeds of trust of even date herewith between Borrower and
Lender (individually, an "INSTRUMENT" and collectively, the "INSTRUMENTS") on
the properties described in the Instruments (individually, the "PROPERTY", and
collectively, the "PROPERTIES"). ▇▇▇▇▇▇▇▇ shall observe and perform all of the
terms and conditions in the Loan Documents. The Loan Documents are incorporated
into this Note as if fully set forth in this Note.
7. TREATMENT OF PAYMENTS. Prior to the occurrence of an Event of
Default, all payments under this Note shall be made, without offset or
deduction, (a) in lawful money of the United States of America by wire transfer
to an account specified by ▇▇▇▇▇▇ from time to time or at the place (and in the
manner) Lender may specify by written notice to Borrower, (b) in immediately
available federal funds, and (c) if received by Lender prior to 2:00 p.m. local
time at such place, shall be credited on that day or else, at ▇▇▇▇▇▇'s option,
shall be credited on the next Business Day. Following an Event of Default, all
payments due under this Note shall be paid by electronic funds transfer from a
bank account established for this purpose. In such case, ▇▇▇▇▇▇▇▇ agrees to
maintain an account with a bank satisfactory to Lender, in ▇▇▇▇▇▇'s good faith
judgment, and to direct the bank in writing to transfer these payments on their
respective Due Date to ▇▇▇▇▇▇'s designated account. ▇▇▇▇▇▇'s approval and
designation of the bank (or banks) shall be confirmed in writing; it being
understood that Lender hereby approves NationsBank and Chase Manhattan Bank.
Lender shall have the right, after thirty days written notice, to require
Borrower to use a different bank or to select a different bank for ▇▇▇▇▇▇'s
account. All costs of establishing and maintaining these accounts and all costs
of these electronic funds transfers shall be paid by ▇▇▇▇▇▇▇▇. If any Due Date
falls on a day which is not a Business Day, then the payment shall be deemed to
have fallen on the next succeeding Business Day.
8. LIMITED RECOURSE LIABILITY. Except to the extent set forth in this
Paragraph 8 and Paragraph 9 of this Note, none of Borrower, the general partner
of Borrower or FelCor Lodging Limited Partnership (singularly or collectively,
the "EXCULPATED PARTIES") shall have any personal liability for the Obligations.
Notwithstanding the preceding sentence, Lender may bring a foreclosure action or
other appropriate action to enforce the Loan Documents or realize upon and
protect all or any number of the Properties (including, without limitation,
naming the Exculpated Parties in the actions) and in addition THE EXCULPATED
PARTIES, JOINTLY AND SEVERALLY, SHALL HAVE PERSONAL LIABILITY FOR THE FOLLOWING:
(a) any separate indemnity agreement, guaranty, or similar
instrument furnished in connection with the Loan (including, without
limitation, the Environmental Indemnity and the ERISA Certificate and
Indemnification Agreement);
(b) any Assessments (accrued and/or payable) with respect to
the Properties, whether payable by Borrower or DJONT Operations, L.L.C.
("LESSEE");
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(c) any security deposits of tenants or subtenants whether
held by Borrower or Lessee (other than a Successor Lessee) (i) not
turned over to Lender upon foreclosure, sale (pursuant to power of
sale), or conveyance in lieu thereof, or (ii) not turned over to a
receiver or trustee for the Properties after appointment;
(d) any insurance proceeds or condemnation awards neither
turned over to Lender nor used in compliance with the Loan Documents
whether held by Borrower or Lessee (other than a Successor Lessee);
(e) if any of the Exculpated Parties or Lessee (other than a
Successor Lessee) executes an amendment or termination of any lease in
violation of any provision of the Loan Documents (other than any
Primary Lease [as defined in the Instruments] which is addressed in
Paragraph 9(d) below) without ▇▇▇▇▇▇'s prior written consent (and
▇▇▇▇▇▇'s consent was required under the Loan Documents), the Exculpated
Parties shall have personal liability for the greater of:
(i) the present value (calculated at the Discount
Rate) of the aggregate total dollar amount (if any) by which
(A) rental income and/or other tenant obligations prior to the
amendment of such lease exceeds (B) rental income and/or other
tenant obligations after the amendment of such lease; or
(ii) any termination fee or other consideration paid;
(f) intentional waste of all or any portion of any Property;
(g) any rents or other income from any Property received by
any of the Exculpated Parties or Lessee (other than a Successor Lessee)
after a default under the Loan Documents and not otherwise applied by
Lessee to the rent payable under the Primary Lessee, or by Borrower to
the Obligations or to the current (not deferred) operating expenses of
such Property; PROVIDED, HOWEVER, THAT THE EXCULPATED PARTIES SHALL
HAVE PERSONAL LIABILITY for amounts paid as expenses to a person or
entity related to or affiliated with any of the Exculpated Parties
unless the payments are expressly permitted in the Loan Documents; and
further provided, that for purposes of this Paragraph 8(g) Promus
Hotels, Inc. or any of its subsidiaries, as Manager and Licensor (as
defined in the Loan Agreement by and between Borrower and Lender of
even date herewith), shall not be deemed affiliated with the Borrower;
(h) ▇▇▇▇▇▇▇▇'s failure to maintain a letter or letters of
credit, (if any), required under the Loan Documents;
(i) any payments required to be made by Lessee to Borrower
under any Primary Lease that is withheld, set off, or otherwise not
made by Lessee when due, in any case in which Borrower shall have
approved or consented to the same;
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(j) Borrower's or ▇▇▇▇▇▇'s failure to cause funds to be paid
into the FF&E Account (as defined in the Loan Agreement) or the failure
by either of them to use or apply funds disbursed from the FF&E Account
in accordance with the provisions of Section 3 of the Loan Agreement;
or
(k) all legal fees (excluding the allocated costs of ▇▇▇▇▇▇'s
staff attorneys) and other expenses incurred by ▇▇▇▇▇▇ in enforcing the
Loan Documents if Borrower contests, delays, or otherwise hinders or
opposes (including, without limitation, the filing of a bankruptcy) any
of Lender's enforcement actions, other than in the event that Borrower
finally prevails in establishing that Borrower was not in default and
Lender was not entitled to exercise its remedies under the Loan
Documents.
9. FULL RECOURSE LIABILITY. Notwithstanding the provisions of Paragraph
8 of this Note, the EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY for the
Obligations if:
(a) there is a Transfer (as defined in the Instruments) or
Indirect Transfer (as defined in the Instruments) (other than a
Permitted Indirect Transfer (as defined in the Instruments)) without
Lender's consent;
(b) there shall be any fraud or material misrepresentation by
any of the Exculpated Parties or Lessee in connection with any
Property, the Loan Documents, the Loan Application by and between
Borrower, FelCor Lodging Limited Partnership, FelCor/CSS Hotels,
L.L.C., and Lender dated February 22, 1999, any instruments, reports,
evidence, estoppels, subordination agreements, environmental reports,
architectural reports, life safety reports, engineering reports,
leases, papers, information and other documents and agreements required
to be obtained by Borrower under the Loan Application or Loan Documents
or required or subject to Lender's approval at any time or delivered to
Lender with respect to the Loan or any other aspect of the Loan; or
(c) any Property or any part thereof (including either the
interests of Borrower or the interests of Lessee) shall become an asset
in (i) a voluntary bankruptcy or insolvency proceeding filed by
Borrower or Lessee or (ii) an involuntary bankruptcy or insolvency
proceeding filed against Borrower or Lessee which is not dismissed
within ninety (90) days of filing; provided, however, that this
Paragraph 9(c) shall not apply if: (x) an involuntary bankruptcy is
filed by ▇▇▇▇▇▇ (y) any voluntary bankruptcy proceeding is filed by a
Successor Lessee (as defined in the Loan Agreement) or (z) an
involuntary bankruptcy proceeding is filed against a Successor Lessee
(other than a proceeding filed by, or with the express consent of, the
Borrower); and provided further, that if:
(A) after ninety (90) days following the
filing of any involuntary bankruptcy proceeding described in
clause (ii) above, such proceeding is dismissed
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with prejudice and without adversely affecting the
enforceability or priority of any of the Loan Documents;
(B) such dismissal occurs prior to the
occurrence of any of the following: (v) the entry of any order
that adversely affects the enforceability or priority of any
of the Loan Documents (other than solely by reason of the
automatic stay), (w) the entry of any order granting any
person relief from the automatic stay to foreclose against,
enforce any lien or security interest in, levy upon, or
repossess any material assets of Borrower or Lessee that
constitute a part of, or that relate to, the Properties, or to
terminate any of the Management Agreements (as defined in the
Loan Agreement), License Agreements (as defined in the Loan
Agreement), or leases of restaurant space (the "MATERIAL
LEASES"), (x) the liquidation of any material assets of
Borrower or Lessee (other than a Successor Lessee) that
constitute a part of, or that relate to, the Properties, (y)
the entry of any order approving the rejection or termination
of any Primary Lease, any Management Agreement, any License
Agreement, or any Material Lease, or (z) the entry of any
order approving any plan of reorganization for Borrower or
Lessee (other than a Successor Lessee); and
(C) throughout the period following the
filing of such bankruptcy proceeding, Borrower or one or more
of the Exculpated Parties shall have continued to make regular
payments of debt service on a timely basis in accordance with
the provisions of the Loan Documents;
then, the Exculpated Parties shall be personally liable only for the
actual damages, losses, costs and expenses (including attorneys' fees)
incurred by Lender (expressly including any diminution, loss or damage
to the Properties and/or any other property or rights which are
security for the loan evidenced by this Note) as a result of such
bankruptcy filing;
(d) any of the Exculpated Parties or Lessee executes an
amendment or termination of any Primary Lease, or any of the Exculpated
Parties or Lessee (other than a Successor Lessee) executes or
authorizes any amendment of or terminates any Management Agreement or
License Agreement, without ▇▇▇▇▇▇'s prior written consent (and ▇▇▇▇▇▇'s
consent was required under the Loan Documents) or other than in
accordance with the provisions of Section 8 of the Loan Agreement; or
(e) there shall be an Event of Default pursuant to Section
8(a) and/or 8(b) of the Loan Agreement.
Notwithstanding the foregoing, following the occurrence of an event
described in Paragraphs 9(a), 9(b) and 9(d) above, if Borrower (1) establishes
that the same was inadvertent, (2) promptly gives ▇▇▇▇▇▇ written notice of such
event, and (3) cures the same to the reasonable
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satisfaction of Lender within thirty (30) days after any senior officer of
▇▇▇▇▇▇▇▇, FelCor Lodging Limited Partnership, or FelCor Lodging Trust
Incorporated first had actual knowledge thereof (regardless of whether Lender
shall have given any notice of default or other notice on account thereof), the
Exculpated Parties shall be personally liable only for any actual damages,
losses, costs and expenses incurred by Lender (including reasonable attorneys'
fees) incurred by ▇▇▇▇▇▇ as a result of the foregoing events.
10. JOINT AND SEVERAL LIABILITY. Subject to Paragraph 8 of this Note,
this Note shall be the joint and several obligation of all makers (including the
Exculpated Parties), endorsers, guarantors and sureties, and shall be binding
upon them and their respective successors and assigns and shall inure to the
benefit of Lender and its successors and assigns.
11. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE LOAN DOCUMENTS, OR
ANY ACTS OR OMISSIONS OF LENDER OR BORROWER IN CONNECTION THEREWITH.
IN WITNESS WHEREOF, this Note has been executed by ▇▇▇▇▇▇▇▇ as of the
date first set forth above.
BORROWER:
FELCOR/CSS HOLDINGS, L.P.,
a Delaware limited partnership
By: FelCor/CSS Hotels, L.L.C., a Delaware
limited liability company,
its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP
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