Exhibit 10.q
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
This Note is subject to a pledge under, and is registered in the name
of ▇▇▇▇▇▇ Brothers Holdings Inc. (the "Pledgee") or a nominee of the Pledgee,
pursuant to, an Intercreditor Agreement, dated as of March 21, 1997, between CBM
One Holdings, Inc. and the Pledgee. Unless this Note is presented by an
authorized representative of the Pledge or its agent for registration of
transfer, exchange or payment, and any Note issued is registered in the name of
the Pledgee or such other name as requested by an authorized representative of
the Pledgee, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
A PERSON IS WRONGFUL since the registered owner hereof, the Pledgee, has an
interest herein.
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
PROMISSORY NOTE
$7,340,744.00**** Date: March 21, 1997
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Partnership"), promises to pay to the order of the Holder the
principal sum of Seven Million Three Hundred Forty Thousand Seven Hundred Forty-
Four Dollars ($7,340,744.00) (the "Principal") on April 11, 2023 (the "Maturity
Date") upon presentation and surrender of this Note, together with interest on
the unpaid Principal, payable at the rates, in the manner and at the times
specified below, and Deferred Interest (as defined herein). The Holder on the
date of issuance of this Note (the "Issuance Date") is Host Marriott
Corporation, a Delaware corporation ("Host").
This Note has been issued to evidence the indebtedness of the
Partnership to Host arising from certain payments made by Host pursuant to a
Debt Service Guarantee, dated as of August 14, 1986, as amended, by Marriott
Corporation (the predecessor of Host) in favor of Citibank, N.A. and The First
National Bank of Chicago and the several other lenders named therein, of certain
indebtedness of the Partnership. As of the date hereof, the aggregate amounts
paid by Host pursuant to such guarantee equal $7,340,744.00. The Partnership is
obligated to reimburse Host for the amount of such advances, together with
interest at the Prime Rate (as defined herein) per annum. As of the date
hereof, the aggregate amount of accrued and unpaid interest owing to Host in
respect of such advances is $5,764,804.00 (the "Deferred Interest"), the
obligation to pay which amount is evidenced by this Note.
Section 1. Interest.
The Partnership promises to pay, from the Issuance Date until the
date on which the Principal is paid in full, interest on the unpaid Principal at
a rate per annum equal to the Prime Rate in effect from time to time. Interest
shall accrue and be payable on the Maturity Date, or such earlier date provided
for herein. All interest hereunder will be computed on the basis of a 365/366-
day year.
As used herein, the "Prime Rate" shall mean the base rate of
interest announced from time to time by The First National Bank of Chicago.
Section 2. Application of Payments.
Payments on this Note shall be applied first to Deferred Interest,
then to accrued and unpaid interest, and then to repayment of the Principal.
Section 3. Prepayment.
This Note may be voluntarily prepaid, in whole or in part, at any
time and from time to time. The Partnership shall be obligated to prepay the
Principal, Deferred Interest, and accrued and unpaid interest owing hereon in
full on the date that is one year and one day after the later of (x) the date
all amounts owing under the Loan Agreement (as defined herein) are paid in full
or (y) the date all amounts owing under any Qualified Refinancing (as such term
is defined in the Collateral Assignment of Management Agreement referred to in
the Loan Agreement) of the Loan Agreement are paid in full.
Section 4. Limitation on Indebtedness.
Holder agrees that, in the event that this Note becomes due and
payable at any time at which any indebtedness remains outstanding under that
certain Loan Agreement dated as of March 21, 1997 between the Partnership and
▇▇▇▇▇▇ Brothers Holdings Inc. (as amended, modified, or extended from time to
time, the "Loan Agreement"), it will not be entitled to assert a claim hereunder
for any amount in excess of $16,250,000 (the "Cap Amount") and the amount of
indebtedness evidenced by this Note during such period shall not exceed the Cap
Amount. Notwithstanding the foregoing, in the event that the sum of the
Principal plus Deferred Interest plus accrued and unpaid interest shall exceed
the Cap Amount at any time, the Partnership shall not be entitled to discharge
its obligations hereunder by making a prepayment in an amount equal to the Cap
Amount, unless the maturity of this Note shall have been accelerated by reason
of the occurrence of an Event of Default.
Section 5. Covenants.
Until all of the Partnership's obligations hereunder have been fully
satisfied and discharged (and in the case of Section 5(b), until such later time
as provided in Section 5(b)), the Partnership covenants as follows:
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5(a) The Partnership shall pay the Principal, Deferred Interest and
interest on this Note, and such other amounts required to be paid hereunder, as
and when the same shall be due and payable in accordance with the terms hereof.
5(b) To the fullest extent that it may lawfully do so, the
Partnership will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other statutory or common law right, including any equitable
remedy, which would prohibit or forgive the Partnership from paying all or any
portion of any amount hereunder, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Note. To the fullest extent
that it may lawfully do so, the Partnership hereby expressly waives all benefit
or advantage of any such law, right or remedy and covenants that it will not
hinder, delay or impede the execution of any power granted to the Holder herein
or by law, but will suffer and permit the execution of every such power as
though no such law, right or remedy existed.
Section 6. Assigns and Transfers.
6(a) This Note shall be binding upon the Partnership and its
successors and shall inure to the benefit of the Holder and its assigns.
6(b) Without prejudice to the effectiveness of any other method of
transferring legal or beneficial title hereto, this Note shall be negotiable and
accordingly, title hereto shall pass by delivery together with the endorsement
or written instrument of transfer by the transferor.
6(c) The Holder may at any time sell, convey, dispose of, assign or
otherwise transfer (collectively, "Transfer") all or any part of its rights
hereunder.
6(d) The issuance of this Note has not been registered under the
Securities Act of 1933, as amended, or any state securities laws. No sale,
assignment, or other disposition of this Note may be made except in compliance
with applicable federal and state securities laws.
6(e) Until such time as a change of the registered owner of this
Note is made pursuant to this Section 6, the Partnership shall be entitled to
treat the Person in whose name this Note is registered as the Holder for all
purposes hereof, including payments and notices. Such treatment by the
Partnership shall not prejudice the status of the Holder as such or in any way
prejudice the rights of the Holder with respect to the Person in whose name this
Note is registered.
6(f) The Partnership shall cause to be kept at its principal office
a register in which the Partnership shall provide for the registration of this
Note. The effect of registration shall be to create, as to the Partnership, an
irrefutable presumption that the Person in whose name this Note is registered is
the Holder, but the failure of any Holder to cause registration in such Holder's
name shall not otherwise prejudice such Holder's rights and status as the
Holder.
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6(g) Upon surrender for registration of transfer of this Note, duly
endorsed or accompanied by an instrument of transfer in the manner prescribed by
Section 7(b), at the principal office of the Partnership, the Partnership shall
promptly execute and deliver, in the name of the designated transferee, a new
Note of a like aggregate principal amount and shall register the new Note in the
transferee's name.
6(h) The Note issued upon any registration of transfer shall be the
valid obligation of the Partnership, evidencing the same Indebtedness, and
entitled to the same benefits under this Note, as the Note surrendered upon such
registration of transfer.
6(i) The Note presented or surrendered for registration of transfer
shall be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Partnership, duly executed by the Holder thereof or his
attorney duly authorized in writing.
6(j) No service charge shall be made for any registration of
transfer of the Note.
Section 7. Events of Default.
An "Event of Default" occurs if:
7(a) the Partnership defaults in the payment of the
Principal, Deferred Interest, accrued and unpaid interest, and any
other amounts owing hereunder when the same becomes due at the
Maturity Date, or otherwise; or
7(b) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Partnership in
an involuntary case or proceeding under any applicable federal,
state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree or order adjudging the Partnership a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Partnership under any applicable federal, state or
foreign law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Partnership or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or
order for a period of 60 days; or
7(c) the commencement by the Partnership of a voluntary case
or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of
any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Partnership to the entry of a
decree or order for relief in respect of the Partnership in an
involuntary case or proceeding under any applicable federal, state
or foreign bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by the Partnership of a
petition or answer
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or consent seeking reorganization or relief under any applicable
federal, state or foreign law, or the consent by the Partnership to
the filing of such petition or the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Partnership, or of any
substantial part of its property, or the making by it of any
assignment for the benefit of creditors, or the admission by the
Partnership, in writing of its inability to pay its debts generally
as they become due, or the taking of partnership action by the
Partnership in furtherance of or to facilitate, conditionally or
otherwise, any such action.
Upon any of the Events of Default, the entire Principal will
immediately become due and payable without notice or further action by the
Holder. At any time after an acceleration hereunder and before a judgment or
decree for payment of the money due has been obtained by the Holder, the Holder
by notice to the Partnership may rescind and annul such acceleration or
declaration and its consequences. No such rescission shall affect any
subsequent Default or impair any right consequent thereon or any rights of the
Holder with respect to the Default which gave rise to the acceleration that was
rescinded.
Section 8. Amendments and Supplements to this Note.
No amendment or supplement to this Note may be effected without the
prior consent of the Holder and the Partnership.
Section 9. Costs.
Upon an Event of Default, the Partnership shall reimburse the Holder
for all costs and expenses reasonably incurred by the Holder in connection with
the preservation or enforcement of the Holder's rights under this Note
(including the reasonable fees and expenses of counsel).
Section 10. Subordination.
Following transfer of this Note by Host to CBM One Holdings, Inc.
("Holdings") on the Issuance Date, and execution and delivery by Holdings of an
Intercreditor Agreement dated as of March 21, 1997 between Holdings and the
Senior Creditor named therein (the "Intercreditor Agreement"), the indebtedness
evidenced by this Note will be, to the extent provided in such Intercreditor
Agreement, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness (as defined therein). Each Holder of this Note,
by accepting the same, agrees to and shall be bound by such provisions. Each
Holder hereof, by its acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained in the Intercreditor by
each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such Holder upon said provisions.
Section 11. Obligations of the Partnership Unconditional.
Nothing contained in this Note or elsewhere (i) is intended to or
shall impair, as between the Partnership and the Holder, the Partnership's
obligations, which are
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absolute and unconditional, to pay to or for the account of the Holder the
Principal, Deferred Interest and interest on this Note, and such other amounts
required to be paid hereunder, as and when the same shall become due and payable
in accordance with the terms hereof, or (ii) is intended to or shall (a) affect
the relative rights of the Holder and the Partnership's creditors or (b) prevent
the Holder from exercising all remedies otherwise permitted by applicable law
upon an Event of Default. The Partnership shall make all payments required
hereunder without any right of setoff, counterclaim, recoupment, abatement,
suspension, limitation or defense (other than payment) that the Partnership may
have against the Holder or any prior Holder and the Partnership agrees not to
assert any right of setoff, counterclaim, recoupment, abatement, suspension,
limitation or defense (other than payment) that it may have against the Holder
or any prior Holder.
Section 12. Waivers, Remedies Cumulative.
12(a) No failure to exercise and no delay in exercising on the part
of the Holder, any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. No waiver by the Holder shall be effective
unless it is in writing.
12(b) The rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies provided by law.
Section 13. Severability.
If any term or other provision of this Note is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Note shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Note so as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the greatest extent possible.
Section 14. Non-Recourse.
Notwithstanding anything contained herein to the contrary, no
recourse under or upon any obligation, covenant or agreement contained in this
Note or for any claim based hereof shall be had any partner in the Partnership
or against any past, present or future shareholder, officer, director or
partner, as such, of the Partnership or any partner therein or of any successor
thereof, under any statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of this Note.
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Section 15. Entire Agreement.
This Note constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof.
Section 16. Governing Law.
This Note shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
IN WITNESS WHEREOF the Partnership has caused this Promissory Note
to be executed as of the date set forth above.
ATTEST: COURTYARD BY MARRIOTT LIMITED PARTNERSHIP, a
Delaware limited partnership
By: CBM One Corporation, its general partner
By:
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Name:
Title:
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ENDORSEMENT
The undersigned hereby assigns the attached Note of Courtyard by
Marriott Limited Partnership, dated March 21, 1997 to ______________________,
with full power to register the transfer of such Note on the records of the
Partnership named therein.
Dated: March 21, 1997 Signed: CBM ONE HOLDINGS, INC.
By:
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Name:
Title:
ASSIGNMENT OF PROMISSORY NOTE
The undersigned hereby assigns to CBM One Holdings, Inc., a Delaware
corporation ("the Assignee"), all of its right, title, and interest in and to
that certain Promissory Note, dated March 21, 1997, issued by Courtyard by
Marriott Limited Partnership, a Delaware limited partnership, in the principal
amount of $7,340,744.00 (the "Note"), as consideration for the issuance of 100
shares of Common Stock of the Assignee.
IN WITNESS WHEREOF the undersigned has caused this instrument to be
duly executed on its behalf.
March 21, 1997 HOST MARRIOTT CORPORATION
By:
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Name:
Title:
