EXHIBIT 10.28
NOTE
$43,545,085.00 March 5, 1997
New York, New York
For value received, INNKEEPERS RESIDENCE DENVER - DOWNTOWN, L.P.,
INNKEEPERS RESIDENCE WICHITA EAST, L.P., INNKEEPERS RESIDENCE SILI I, L.P. and
INNKEEPERS FINANCING PARTNERSHIP III, L.P., each a Virginia limited partnership
having an address c/o JF Hotel IV, Inc., 000 Xxxxx Xxxxxxxxx Xxx, Xxxx Xxxxx,
Xxxxxxx 00000 (hereinafter referred to as "Maker"), promises to pay to the order
of NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, at its principal
place of business at Two World Financial Center, Building B, New York, New York
10281-1198 (hereinafter referred to as "Payee"), or at such place as the holder
hereof may from time to time designate in writing, the principal sum of
FORTY-THREE MILLION FIVE HUNDRED FORTY-FIVE THOUSAND EIGHTY FIVE AND NO/100
DOLLARS ($43,545,085.00), in lawful money of the United States of America, with
interest thereon to be computed on the unpaid principal balance from time to
time outstanding at the Applicable Interest Rate (as hereinafter defined), and
to be paid in installments as follows:
A. A prepayment of principal in the amount of $1,545,085 (the "Initial
Prepayment"), receipt of which is hereby acknowledged by Payee by acceptance of
this Note;
B. A payment of $57,050 representing interest only on the outstanding
principal balance of this Note after the Initial Prepayment from the date of
funding through March 10, 1997, receipt of which is hereby acknowledged by Payee
by acceptance of this Note;
C. A payment of interest only on the outstanding principal balance of
this Note commencing on the eleventh day of April, 1997 and on the eleventh day
of each calendar month thereafter up to and including the eleventh day of March,
1999;
D. A constant payment of $355,235.77 (such amount hereinafter the
"Monthly Debt Service Payment Amount"), on the eleventh day of April, 1999 and
on the eleventh day of each calendar month thereafter up to and including the
eleventh day of February, 2019; each of such payments, subject to the provisions
of paragraph 7 hereof, to be applied (a) to the payment of interest computed at
the rate aforesaid; and (b) the balance applied toward the reduction of the
principal sum;
and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on the eleventh day of March, 2019
(the "Maturity Date"). Interest on the principal sum of this Note shall be
calculated on the basis of a year of 360 days and actual days elapsed. All
amounts due under this Note shall be payable without setoff, counterclaim or any
other deduction whatsoever and are payable without relief from valuation and
appraisement laws and with all expenses, costs and charges incurred in
collection or enforcement hereof, including, without limitation, attorneys' fees
and court costs.
1. The term "Applicable Interest Rate" as used in this Note shall mean
from (a) the date of this Note through but not including the Optional Prepayment
Date (hereinafter defined), a rate of eight and fifteen hundredths percent
(8.15%) per annum (the "Initial Interest Rate"), and (b) from and after the
Optional Prepayment Date through and including the date this Note is paid in
full, a fixed rate per annum equal to the greater of (i) the Initial Interest
Rate plus 5% and (ii) the Treasury Rate (hereinafter defined) plus 6.5% (the
"Revised Interest Rate"). For purposes of this Note, (A) the term "Optional
Prepayment Date" shall mean March 11, 2009, and (B) the term "Treasury Rate"
shall mean, as of the Optional Prepayment Date, the linear interpolation of the
bond equivalent yields as reported in Federal Reserve Statistical Release
H.15-Selected Interest Rates under the heading "U.S. Governmental
Securities/Treasury Constant Maturities" for the week ending prior to the
Optional Prepayment Date of U.S. Treasury constant maturities with maturity
dates (one longer and one shorter) most nearly approximating the remaining term
of this Note as of the Optional Prepayment Date.
2. This Note is evidence of that certain loan made by Payee to Maker
contemporaneously herewith (the "Loan") and is executed pursuant to the terms
and conditions of that certain Loan Agreement executed the date hereof between
Maker and Payee (the "Loan Agreement"). This Note is secured by, among other
things, (a) the Mortgages (as defined in the Loan Agreement), (b) the
Assignments of Agreements (as defined in the Loan Agreement), (c) the
Assignments of Leases (as defined in the Loan Agreement) and (d) the other Loan
Documents (as defined in the Loan Agreement). Reference is made to the
Mortgages, Assignments of Agreements, Assignments of Leases and the other Loan
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, the terms
and conditions upon which this Note is secured and the rights and duties of the
holder of this Note. The holder of this Note is entitled to the benefits of the
Mortgages, Assignments of Agreements, Assignments of Leases and the other Loan
Documents and may enforce the agreements contained therein and exercise the
remedies provided therein or otherwise in respect thereof, all in accordance
with the terms thereof. Except for the provisions and limitations set forth in
Section 9.4 of the Loan Agreement, which provisions are incorporated herein in
their entirety, no reference herein to any of the Mortgages, Assignments of
Agreements, Assignments of Leases and the other Loan Documents and no other
provision of this Note or of the Mortgages, Assignments of Agreements,
Assignments of Leases and the other Loan Documents shall alter or impair the
obligation of Maker, which is absolute and unconditional, to pay the principal
of and interest on this Note at the time and place and at the rates and in the
monies and funds described herein. All of the agreements, conditions, covenants,
provisions and stipulations contained in the Mortgages, Assignments of
Agreements, Assignments of Leases and the other Loan Documents which are to be
kept and performed by Maker are by this reference hereby made part of this Note
to the same extent and with the same force and effect as if they were fully set
forth in this Note, and Maker covenants and agrees to keep and perform the same,
or cause the same to be kept and performed, in accordance with their terms. All
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Loan Agreement.
3. If any principal (other than at the Maturity Date), interest or any
other sums payable under this Note (other than principal that is not part of
scheduled debt service) is not paid
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on the date on which it is due (unless sufficient funds are available in the
Deposit Account on the applicable date), Maker shall pay to Payee upon demand an
amount equal to the lesser of five percent (5%) of such unpaid sum or the
maximum amount permitted by applicable law in order to defray a portion of the
expenses incurred by Payee in handling and processing such delinquent payment
and to compensate Payee for the loss of the use of such delinquent payment. If
the day when any payment required under this Note is due is not a Business Day
(as hereinafter defined), then payment shall be due on the first Business Day
thereafter. The term "Business Day" shall mean any day excluding a Saturday or
Sunday or any other day on which national banks in New York, New York are not
open for business.
4. The whole of the principal sum of this Note, together with all
interest accrued and unpaid thereon and all other sums due under the Loan
Documents (all such sums hereinafter collectively referred to as the "Debt"), or
any portion thereof, shall without notice become immediately due and payable at
the option of Payee if any payment required in this Note is not paid on the date
on which it is due or upon the happening of and during the continuance of any
Event of Default. In the event that it should become necessary to employ counsel
to collect or enforce the Debt or to protect or foreclose the security therefor,
Maker also shall pay on demand all costs of collection incurred by Xxxxx,
including attorneys' fees and costs incurred for the services of counsel whether
or not suit be brought.
5. Maker does hereby agree that upon the occurrence and during the
continuance of an Event of Default (including upon the failure of Maker to pay
the Debt in full on the Maturity Date), Payee shall be entitled to receive and
Maker shall pay to Payee interest on the entire unpaid principal sum and any
other amounts due at a rate per annum (the "Default Rate") equal to the lesser
of (i) the maximum rate permitted by applicable law, or (ii) five percent (5%)
above the Applicable Interest Rate. Interest at the Default Rate shall be
computed from the occurrence of the Event of Default until the actual receipt
and collection of the Debt (or that portion thereof that is then due). Interest
at the Default Rate shall be added to the Debt and shall be secured by the
Mortgage. This paragraph, however, shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a waiver of any
other right or remedy accruing to Payee by reason of the occurrence of any Event
of Default.
6. Except for the Initial Prepayment, this Note may not be prepaid
prior to the date which is 90 days prior to the Optional Prepayment Date (except
in connection with a Casualty/Condemnation Prepayment under Section 2.3.2 of the
Loan Agreement); provided, however, Maker shall have the right and option to
release one or more of the Properties from the lien of the Mortgages in
accordance with the provisions set forth in Sections 2.3 and 2.4 of the Loan
Agreement (the "Defeasance Option"). If prior to the date which is 90 days prior
to the Optional Prepayment Date and following the occurrence and during the
continuance of any Event of Default, Maker shall tender payment of an amount
sufficient to satisfy the Debt at any time prior to a sale of a Property, either
through foreclosure or the exercise of the other remedies available to Payee
under the Mortgages, such tender by Maker shall be deemed to be voluntary and
Maker shall pay, in addition to the Debt, the Yield Maintenance Premium, if any,
that would be required under the Defeasance Option.
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7. Notwithstanding anything to the contrary contained in this Note,
the following subparagraphs shall apply in the event that the Maker does not
prepay the entire principal balance of this Note and any other amounts
outstanding on the Optional Prepayment Date, and (if applicable) at any time
during the continuance of an Event of Default:
(a) From and after the Optional Prepayment Date, interest shall accrue
on the unpaid principal balance from time to time outstanding on this Note at
the Revised Interest Rate. Subject to the provisions of this paragraph, Maker
shall continue to make payments in monthly installments beginning on the
Optional Prepayment Date and on the eleventh day of each calendar month
thereafter up to and including the Maturity Date in an amount equal to the
Monthly Debt Service Payment Amount. Each Monthly Debt Service Payment Amount
paid on and after the Optional Prepayment Date shall be applied first to the
payment of interest computed at the Initial Interest Rate with the remainder of
the Monthly Debt Service Payment Amount applied to the reduction of the
outstanding principal balance of this Note. Interest accrued at the Revised
Interest Rate and not paid pursuant to the preceding sentence or otherwise shall
be deferred and added to the Debt and shall earn interest at the Revised
Interest Rate, compounded monthly, to the extent permitted by applicable law
(such accrued interest is hereinafter defined as "Accrued Interest"). All of the
Debt, including any Accrued Interest, shall be due and payable on the Maturity
Date.
(b) Commencing on the first Payment Date occurring after the Optional
Prepayment Date and continuing on the eleventh day of each calendar month
thereafter until the entire Debt has been paid in full, and at any time during
the continuance of an Event of Default, any Rents deposited into the Deposit
Account during the immediately preceding calendar month shall be applied by
Payee as follows in the following order of priority:
(i) First, to make required payments to the Tax and Insurance Escrow Fund;
(ii) Second, payments to the Payee to pay the Monthly Debt Service Payment
Amount (plus, if applicable, interest at the Default Rate);
(iii) Third, to make required payments to the Capital Reserve Fund;
(iv) Fourth, payments for Approved Operating Expenses for any Property for
which there is no Operating Lease;
(v) Fifth, payments to the Payee to prepay the outstanding principal
balance under this Note until paid in full;
(vi) Sixth, payments to the Payee to be applied against Accrued Interest
and interest accrued thereon; and
(vii) Lastly, payments to Maker of any excess amounts.
Notwithstanding anything herein to the contrary, the failure of Maker
to make all of
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the payments required under clauses (i) through (iv) above in full on each
scheduled payment date after the Optional Prepayment Date shall constitute a
default under this Note. However, the failure of Maker to prepay any outstanding
principal or pay any Accrued Interest on a scheduled payment date as a result of
insufficient Rents for such payment shall not constitute a Default hereunder.
All Accrued Interest shall nonetheless be due and payable on the Maturity Date.
8. It is expressly stipulated and agreed to be the intent of Maker and
Payee at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Payee to contract for, charge,
take, reserve, or receive a greater amount of interest than under state law) and
that this paragraph shall control every other covenant and agreement in this
Note and the other Loan Documents. If the applicable law (state or federal) is
ever judicially interpreted so as to render usurious any amount called for under
this Note or under any of the other Loan Documents, or contracted for, charged,
taken, reserved, or received with respect to the Debt, or if Payee's exercise of
the option to accelerate the Maturity Date, or if any prepayment by Maker
results in Maker having paid any interest in excess of that permitted by
applicable law, then it is Payee's express intent that all excess amounts
theretofore collected by Xxxxx shall be credited on the principal balance of
this Note and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Payee for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Payee to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned interest
at the time of such acceleration.
9. This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Maker or Payee, but only by an agreement in writing signed by the party against
whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought. Whenever used, the singular number shall
include the plural, the plural the singular, and the words "Payee" and "Maker"
shall include their respective successors, assigns, heirs, executors and
administrators. If Maker consists of more than one person or party, the
obligations and liabilities of each such person or party shall be joint and
several.
10. Maker and all others who may become liable for the payment of all
or any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, protest, notice of protest, notice of nonpayment,
notice of intent to accelerate the maturity hereof and of acceleration. No
release of any security for the Debt or any person liable for payment of the
Debt, no extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of the Loan Documents
made by agreement between Payee
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and any other person or party shall release, modify, amend, waive, extend,
change, discharge, terminate or affect the liability of Maker, and any other
person or party who may become liable under the Loan Documents for the payment
of all or any part of the Debt.
11. It is expressly agreed that recourse against Maker for failure to
perform and observe its obligations contained in this Note shall be limited as
and to the extent provided in Section 9.4 of the Loan Agreement.
12. The remedies of the holder hereof as provided in this Note or in
the Mortgages, Assignments of Agreements, Assignments of Leases or other Loan
Documents shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of the holder hereof, and may
be exercised as often as occasion therefor shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof. Nothing herein contained shall be construed as limiting the
holder of this Note to the remedies mentioned above.
13. Maker represents that Maker has full power, authority and legal
right to execute, deliver and perform its obligations pursuant to this Note, the
Loan Agreement, the Mortgages and the other Loan Documents and that this Note,
the Loan Agreement, the Mortgages and the other Loan Documents constitute valid
and binding obligations of Maker.
14. All notices or other communications required or permitted to be
given pursuant hereto shall be given in the manner specified in the Loan
Agreement directed to the parties at their respective addresses as provided
therein.
15. MAKER XXXXXX AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES AN. RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY MAKER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
XXXXX IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY MAKER.
16. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OR CONFLICTS OF
LAWS) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
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IN WITNESS WHEREOF, Xxxxx has duly executed this Note as of the day
and year first above written.
MAKER:
INNKEEPERS RESIDENCE DENVER - DOWNTOWN,
L.P., a Virginia limited partnership
By: Innkeepers Financial Corporation III,
a Virginia corporation, its sole
general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
INNKEEPERS RESIDENCE WICHITA EAST, L.P.,
a Virginia limited partnership
By: Innkeepers Financial Corporation III,
a Virginia corporation, its sole
general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
INNKEEPERS RESIDENCE SILI I, L.P.,
a Virginia limited partnership
By: Innkeepers Financial Corporation III,
a Virginia corporation, its sole
general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
INNKEEPERS FINANCING PARTNERSHIP III,
L.P., a Virginia limited partnership
By: Innkeepers Financial Corporation III,
a Virginia corporation, its sole
general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
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