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Exhibit 10.14
SECOND AMENDMENT TO PROMISSORY NOTE
This Second Amendment To Promissory Note ("Second Amendment")
is entered into as of May 27, 1997 (the "Second Amendment Effective Date"), by
Teacher Retirement System of Texas (the "Holder"), the 000 Xxxxx Xxxxxxxx Xxxxxx
Corporation (the "Hotel Corporation") and The Westin Chicago Limited Partnership
(the "Hotel Partnership"), as assignee of the Hotel Corporation (the Hotel
Corporation and Hotel Partnership, individually and collectively, the "Maker")
in connection with that certain Promissory Note dated as of August 21, 1986, by
Hotel Corporation (and Hotel Partnership as assignee) in favor of Holder in the
original principal amount of $32,825,000 as amended pursuant to that certain
First Amendment To Promissory Note dated as of June 2, 1994 (the "First
Amendment") (as amended, the "Note").
R E C I T A L S
A. On or about August 21, 1986, Holder made a loan (the
"Loan") to Hotel Corporation in the principal amount of $32,825,000. The Loan is
evidenced by the Note and is secured by a first-priority, properly recorded lien
on The Westin Hotel, Chicago (the "Chicago Hotel") and other Premises (as
defined in the Mortgage and Security Agreement, as hereinafter defined) pursuant
to the Mortgage and Security Agreement. Unless otherwise defined herein, all
capitalized terms used herein shall have the respective meanings given such
terms in the Note, as amended hereby.
B. Contemporaneously with the making of the Loan, pursuant to
that certain Agreement for the Contribution of Assets and the Transfer of
Limited Partnership Interests dated as of August 28, 1986, between Hotel
Corporation and Hotel Partnership,
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Hotel Corporation transferred all of its right, title and interest in and to the
Chicago Hotel and the Property (as defined therein) to Hotel Partnership. As the
assignee of Hotel Corporation, Hotel Partnership became subject to all of the
provisions of the Note, the Mortgage and Security Agreement and the other Loan
Documents (as hereinafter defined) in the same capacity as Hotel Corporation,
and consequently became jointly and severally liable with Hotel Corporation for
all of Hotel Corporation's obligations and liabilities under the Note, the
Mortgage and Security Agreement and the other Loan Documents.
X. Xxxxxx, Hotel Corporation, Hotel Partnership, the Westin
St. Xxxxxxx Limited Partnership ("WSFLP"), Westin Hotel Company ("Westin") have
entered into that certain Second Restructuring Agreement of even date herewith
(the "Second Restructuring Agreement"), which, among other things, requires the
execution and delivery of this Second Amendment.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
1. Amendments.
1.1 Modification of Interest Rate. Paragraph 1 of the Note is
hereby amended and restated in its entirety to read as follows:
"For the period commencing on the date hereof and terminating
upon the maturity or earlier repayment of the loan evidenced
hereby (the "Loan"), interest shall be due on the unpaid
principal amount from time to time outstanding (including,
without limitation, all accrued interest added to principal
pursuant to Paragraph 2(c) hereof) at the Contract Rate
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(as defined below) then in effect, computed on the basis of a
360-day year comprised of twelve (12) thirty (30)-day months
and compounded quarterly. As used herein, the term "Contract
Rate" shall mean (i) for the period from the date hereof
through November 30, 1996, at the rates provided in the First
Amendment, (ii) for the period from December 1, 1996 through
and including November 30, 1997, seven and one-half percent
(7.5%) per annum, (iii) for the period from and including
December 1, 1997 through and including the maturity or earlier
repayment of the Loan, eight and eighty-five 100ths percent
(8.85%) per annum."
1.2 Modification of Repayment Terms. Subparagraphs 2(a)(3) and
2(a)(4) and the last paragraph of Paragraph 2(a) of the Note are hereby amended
and restated in their entirety as follows:
"(3) Second, Third, Fourth Quarters of Year 8, Years
9-13 and First Quarter of Year 14: On the first day
immediately following each quarter of each Loan Year in the
period commencing on December 1, 1993 and terminating on
November 30, 1999, there shall be paid an amount equal to the
interest accruing at the Contract Rate then in effect on the
unpaid principal balance of this Note during such quarter.
(4) December 1, 1999 through Maturity Date: On the first
day immediately following each quarter of each Loan Year
during the period commencing on December 1, 1999, and ending
November 30, 2006, there shall be paid such quarterly amount
as is necessary to repay the unpaid principal balance of this
Note outstanding as of December 1, 1999, plus accrued
interest, on the basis of a 25-year amortization schedule
(with equal quarterly payments of interest and principal). As
set forth in Paragraph 3 hereof, on the maturity date of the
Note, the entire unpaid principal balance of this Note, plus
all accrued and unpaid interest thereon, shall be due and
payable in full.
For purposes of illustration (and assuming no incurrence
of late fees, default interest or other charges or amounts to
which the Periodic Payments are applied and assuming no
principal prepayments after the date of the Second Amendment,
a payment schedule is attached to the Second Amendment as
Amended Schedule A, and is incorporated herein by this
reference. As used herein, the term "Loan Year" shall mean and
refer to the twelve (12) month period commencing on the first
day of the next
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calendar month following the date on which the Loan is funded
by Holder and each twelve (12) month period thereafter."
Schedule A attached to the First Amendment is hereby deleted, and the attached
Amended Schedule A is hereby substituted in lieu thereof.
1.3 Adjustment to Periodic Payments. Paragraph 2(b) of the
Note is hereby amended and restated in its entirety as follows:
"Any partial prepayment of principal made on or after
the Second Amendment Effective Date, pursuant to Paragraph
6(b) below shall not be applied to any Periodic Payment but
shall instead be applied to the portion of the principal
amount of the Note that will become due and payable upon the
maturity of the Loan."
1.4 Term. Paragraph 3 of the Note is hereby amended and
restated as follows:
"Except as otherwise provided herein, the maturity date
of this Note shall be November 30, 2006, on which date the
entire unpaid principal balance of this Note, plus all accrued
and unpaid interest thereon, shall be due and payable in
full."
1.5 Amended Definitions of Deed of Trust and Loan Documents.
Paragraph 4 of the Note is hereby amended by deleting the entire last two
sentences of the paragraph and substituting therefor the following two
sentences:
"As used in this Note, the term "Mortgage" shall mean that
certain Mortgage and Security Agreement, encumbering real
property located in Xxxx County, Illinois, dated as of August
21, 1986, by the 000 Xxxxx Xxxxxxxx Xxxxxx Corporation (and
The Westin Chicago Limited Partnership, as its assignee), as
Mortgagor, to Holder, as Mortgagee, as amended by (i) that
certain First Amendment to Mortgage and Security Agreement
dated as of June 2, 1994 ("First Amendment to Mortgage"), and
(ii) that certain Second Amendment to Mortgage and Security
Agreement dated as of even date herewith, as further amended,
restated, supplemented or otherwise modified from time to
time. As used in this Note, the term "Loan Documents" shall
mean Loan Documents as defined in the Mortgage."
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1.6 Prepayment Provisions. Paragraph 6 of the Note is hereby
amended and restated in its entirety to read as follows:
"a. Except as specifically provided herein, Maker shall not be
permitted to prepay the Loan; provided, however, Maker may prepay the Loan, in
full, at any time after the Second Amendment Effective Date, provided that no
default or event of default shall have occurred and be continuing under the Note
or any other Loan Document, upon ninety (90) days prior written notice to
Holder, which notice shall specify the date of any prepayment, and payment to
Holder of the entire outstanding balance of the Loan plus a prepayment premium
equal to the amount obtained by subtracting the amount of the principal balance
of the Loan to be prepaid on the date of such tender of payment from the amount
obtained by calculating the present value of the remaining principal and
interest payments scheduled to have been made in accordance with the terms of
the Note, using a discount rate (compounded quarterly) which is equal to 100
basis points plus the percent per annum of the Treasury Constant Maturities
having a maturity date closest in time to November 30, 2006 ("Treasury Yield")
as such interest rate is reported in The Federal Reserve Statistical Release
G13(415) or its successor publication most recently released prior to the date
of tender of payment. The prepayment premium shall in no event be less than
zero. No partial prepayments shall be allowed except as provided in Paragraph
6(b) hereof.
Maker expressly waives any right to prepay the Loan,
except as specifically provided above. Therefore, if the maturity of this Note
is accelerated by reason of any default hereunder, under the Mortgage or under
any other Loan Document, including, but not limited to, a default pursuant to
Paragraph 29 of the Mortgage, Maker agrees that the applicable prepayment
premium shall automatically become immediately due and payable by Maker, and
further, any tender to cure such default which results in a prepayment of the
indebtedness evidenced hereby resulting from such default, including any
redemption following foreclosure of the Mortgage, shall constitute an evasion of
the restrictions on prepayment set forth herein and shall be deemed a voluntary
prepayment. Accordingly, to the maximum extent permitted by law, Holder may
impose as a condition to accepting any such tender, and may also include in its
statement of the amount then due without regard to whether there has been a
tender, the prepayment premium that would otherwise have been due in connection
with a prepayment made on such date. Maker acknowledges that it is a
knowledgeable real estate operator, developer, and investor that fully
understands the effect of the waiver contained above, considers that the
provisions for the extension of the Loan by Holder pursuant to the Second
Amendment at the interest rates set forth above is sufficient consideration for
such waiver, and understands that Holder would not make this Loan without such
waiver.
b. In addition to the principal repayments provided for in
Paragraph 2 above, Maker shall be entitled to make up to two principal
prepayments (each a "Partial Prepayment") during any calendar year, without
payment of any prepayment premium, provided that (i) Maker shall have given
Holder at least ninety (90) days prior written notice of Maker's intention to
make such prepayment, which notice shall specify the date and amount of
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such prepayment, (ii) each such prepayment amount shall be accompanied by a
prepayment on the St. Xxxxxxx Loan (a "St. Xxxxxxx Loan Prepayment") made in
accordance with the terms of the St. Xxxxxxx Loan and the Second Amendment, and
the amount of the Partial Prepayment plus the amount of the St. Xxxxxxx Loan
Prepayment shall equal Five Million Dollars ($5,000,000), (iii) the aggregate
amount of Partial Prepayments plus St. Xxxxxxx Loan Prepayments shall not exceed
twenty million dollars ($20,000,000) during the period from the Second Amendment
Effective Date through the maturity date hereof, and (iv) there shall not have
occurred any default or event of default under this Note, the St. Xxxxxxx Loan,
the Second Restructuring Agreement, the Mortgage, or the St. Xxxxxxx Deed of
Trust between the Second Amendment Effective Date and the date of any proposed
prepayment. St. Xxxxxxx Loan Prepayments and Partial Prepayments hereunder shall
be allocated between the Loan and the St. Xxxxxxx Loan based upon the ratio of
the principal balance of each loan to the aggregate principal balance of both
loans; for example, a $5,000,000 prepayment made at a time when the principal
balance of the Loan was $31,000,000 and the principal balance of the St. Xxxxxxx
Loan was $91,000,000, would be allocated as a $1,270,491.80 Partial Prepayment
($31,000,000 divided by $122,000,000 times $5,000,000) and a $3,729,508.20 St.
Xxxxxxx Loan Prepayment. Any Partial Prepayments pursuant to this Paragraph 6(b)
shall be made on the dates provided for Periodic Payments of principal and
interest as provided in Paragraph 2.
c. Notwithstanding Paragraphs 6(a) and 6(b), Maker shall be
entitled to prepay the entire balance of this Note upon the closing of an
Arms-Length Sale (as defined below) of the Chicago Hotel, without the
requirement of any prepayment premium, provided that (i) Maker shall have
provided Holder with at least ninety (90) days prior written notice of such
Arm's-Length Sale, which notice shall identify with reasonable particularity the
prospective purchaser, the terms of such sale, and the date of the proposed sale
closing, (ii) the entire balance of the Note shall be paid in full in cash at
the closing of such sale, and (iii) there shall not have occurred any default or
event of default under this Note, the St. Xxxxxxx Loan, the Second Restructuring
Agreement, the Mortgage, or the St. Xxxxxxx Deed of Trust between the Second
Amendment Effective Date and the date of any proposed prepayment. For purposes
of this provision, "Arm's-Length Sale" shall mean a sale of the Chicago Hotel in
connection with which none of Maker, or any of the other Westin Parties (as
defined in the Second Restructuring Agreement), nor any of their respective
affiliates shall retain any direct or indirect ownership interest in, or lien
claim against, the Chicago Hotel or the entity that proposes to acquire the
Chicago Hotel pursuant to such sale, or any affiliate of such entity."
1.7 Notices. The notice addresses for Holder in Paragraph
15(b) of the Note are hereby amended and restated in their entirety to read as
follows:
"(a) If to Holder:
Teacher Retirement System of Texas
0000 Xxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
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with a copy to:
LaSalle Advisors Limited
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
and:
Teacher Retirement System of Texas
0000 Xxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Legal Services Department
Telecopy: (000) 000-0000
and
Xxxxxx & Xxxxxxx
5800 Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000"
2. Representations and Warranties of Hotel Corporation and
Hotel Partnership. To induce Holder to enter into this Second Amendment, each
Maker hereby reaffirms, and incorporates by reference herein, each of its
representations and warranties set forth in the Second Restructuring Agreement.
3. Conditions to Effectiveness. The amendments to the Note set
forth in Section 1 hereof shall become effective on the Effective Date (as
defined in the Second Restructuring Agreement).
4. Reference to and Effect on the Note.
4.1 Upon the Effective Date, each reference in the Note to
"this Note," "hereunder," "hereof," "herein," "hereby" or words of like import
shall mean and be a
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reference to the Note as amended hereby, and each reference to the Note in the
Mortgage, any other Loan Document, any Restructuring Document (as defined in the
Second Restructuring Agreement) or any other document, instrument or agreement
executed and/or delivered in connection with this Second Amendment, the Note,
the Mortgage, any other Loan Documents or any other Restructuring Documents
shall mean and be a reference to the Note as amended hereby.
4.2 The execution, delivery and effectiveness of this Second
Amendment shall not operate as a waiver of any right, power or remedy of the
Holder under the Note, as amended hereby, the Mortgage, the Loan Documents, the
Restructuring Documents or any other document, instrument or agreement executed
in connection herewith or therewith, nor constitutes a waiver of any provision
contained therein, except as specifically set forth herein or contemplated
hereby.
4.3 The terms and conditions of this Second Amendment and the
Holder's rights, powers and remedies pursuant hereto shall apply to the entire
Loan and all other indebtedness and obligations under the Loan Documents. Except
as specifically modified herein, the Note remains in full force and effect, and
Maker hereby ratifies and reaffirms all of the terms and provisions of the Note
and the validity and enforceability thereof (as if The Westin Chicago Limited
Partnership were a signatory thereto in the same capacity as 000 Xxxxx Xxxxxxxx
Xxxxxx Corporation) and remain in full force and effect. This Second Amendment
is an amendment of the Note and does not constitute a novation of the Loan or
any of the other indebtedness or obligations under the Loan Documents.
5. Governing Law and Severability. This Second Amendment shall
be governed by and construed in accordance with the internal laws (as opposed to
the conflicts of
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law provisions) and decisions of the State of Illinois. Any provision of this
Second Amendment which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
6. Counterparts. This Second Amendment may be executed
(including, without limitation, by way of facsimile) in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
Executed signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
7. Headings. Section headings in this Second Amendment are
included herein for convenience and reference only and shall not constitute a
part of this Second Amendment for any other purpose.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the date first above written.
000 XXXXX XXXXXXXX XXXXXX CORPORATION,
a Delaware corporation, as Maker
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Its: Vice President
THE WESTIN CHICAGO LIMITED PARTNERSHIP,
a Delaware limited partnership, as Maker
By: 000 Xxxxx Xxxxxxxx Xxxxxx Corporation,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Its: Vice President
TEACHER RETIREMENT SYSTEM OF TEXAS,
a public pension fund and an agency
of the State of Texas, as Holder
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Its: Loan Administration Manager
[Signature Page to Second Amendment of Promissory Note.)
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Chicago Westin Loan Payment Schedule
Payment Beginning Principal Ending
Date Balance Rate Amort Interest Payment Paid Balance
------- --------- ---- ----- -------- ------- --------- -------
3/1/97 31,027,500 1.8750% N 581,766 581,766 -- 31,027,500
6/1/97 31,027,500 1.8750% N 581,766 581,766 -- 31,027,500
9/1/97 31,027,500 1.8750% N 581,766 581,766 -- 31,027,500
12/1/97 31,027,500 1.8750% N 581,766 581,766 -- 31,027,500
3/1/98 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
6/1/98 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
9/1/98 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
12/1/98 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
3/1/99 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
6/1/99 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
9/1/99 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
12/1/99 31,027,500 2.2125% N 686,483 686,483 -- 31,027,500
3/1/00 31,027,500 2.2125% Y 686,483 773,152 86,669 30,940,831
6/1/00 30,940,831 2.2125% Y 684,566 773,152 88,587 30,852,244
9/1/00 30,852,244 2.2125% Y 682,606 773,152 90,547 30,761,698
12/1/00 30,761,698 2.2125% Y 680,603 773,152 92,550 30,669,148
3/1/01 30,669,148 2.2125% Y 678,555 773,152 94,598 30,574,550
6/1/01 30,574,550 2.2125% Y 676,462 773,152 96,691 30,477,860
9/1/01 30,477,860 2.2125% Y 674,323 773,152 98,830 30,379,030
12/1/01 30,379,030 2.2125% Y 672,136 773,152 101,016 30,278,013
3/1/02 30,278,013 2.2125% Y 669,901 773,152 103,251 30,174,762
6/1/02 30,174,762 2.2125% Y 667,617 773,152 105,536 30,069,226
9/1/02 30,069,226 2.2125% Y 665,282 773,152 107,871 29,961,355
12/1/02 29,961,355 2.2125% Y 662,895 773,152 110,258 29,851,098
3/1/03 29,851,098 2.2125% Y 660,456 773,152 112,697 29,738,401
6/1/03 29,738,401 2.2125% Y 657,962 773,152 115,190 29,623,210
9/1/03 29,623,210 2.2125% Y 655,414 773,152 117,739 29,505,471
12/1/03 29,505,471 2.2125% Y 652,809 773,152 120,344 29,385,127
3/1/04 29,385,127 2.2125% Y 650,146 773,152 123,007 29,262,121
6/1/04 29,262,121 2.2125% Y 647,424 773,152 125,728 29,136,393
9/1/04 29,136,393 2.2125% Y 644,643 773,152 128,510 29,007,883
12/1/04 29,007,883 2.2125% Y 641,799 773,152 131,353 28,876,530
3/1/05 28,876,530 2.2125% Y 638,893 773,152 134,259 28,742,271
6/1/05 28,742,271 2.2125% Y 635,923 773,152 137,230 28,605,041
9/1/05 28,605,041 2.2125% Y 632,887 773,152 140,266 28,464,775
12/1/05 28,464,775 2.2125% Y 629,783 773,152 143,369 28,321,405
3/1/06 28,321,405 2.2125% Y 626,611 773,152 146,541 28,174,864
6/1/06 28,174,864 2.2125% Y 623,369 773,152 149,784 28,025,080
9/1/06 28,025,080 2.2125% Y 620,055 773,152 153,098 27,871,983
11/30/06 27,871,983 2.2125% Y 616,668 28,488,650 27,871,983 --
Maturity Date 11/30/06
Accrued Interest + Principal Due
Amended Schedule "A"
