SECURED PROMISSORY NOTE [Arizona]
$300,000.00 September 30, 1999 Scottsdale, Arizona
FOR VALUE RECEIVED, RIDGEWOOD HOTELS, INC., A Delaware corporation
("Maker"), hereby promises to pay to LOUISVILLE HOTEL, L.P., a Delaware
limited partnership ("Holder"), or order, at 6900 East 2nd Street,
Scottsdale, Arizona, the principal amount of Three Hundred Thousand
Dollars ($300,000.00), with interest on such amount until paid, at the
rate set forth below and payable as follows:
1. INTEREST RATE
The amount of outstanding principal shall bear interest at the rate of
13% per annum. Interest shall commence on the princi-pal balance from
and after October 1, 1999 and shall be calculated on the basis of a
365-day year.
2. TERM
All unpaid principal, together with any and all accrued and unpaid
interest, shall be due upon the earlier of (i) three (3) years after
the date hereof which is September 30, 2002 or (ii) the acquisition of
Holder's membership interest in Louisville Hotel, LLC (the "LLC")
pursuant to the Operating Agreement of Louisville Hotel, LLC effective
as of May 1998, as amended by that First Amendment to the Operating
Agreement of Louisville Hotel, LLC dated as of September 30, 1999 (such
Operating Agreement of Louisville Hotel, LLC as at any time amended,
modified, revised or replaced, the "Operating Agreement") (the
"Maturity Date").
3. PAYMENT
Interest only shall be payable in monthly installments due on the first
(1st) day of each month beginning on November 1, 1999, and continuing
to the Maturity Date, on which date the amount equal to the outstanding
princi-pal balance, together with accrued and unpaid interest, shall be
due and payable.
Any payment hereunder shall be applied first to the payment of costs
and charges of collection, if any, then to accrued in-terest, and the
balance, if any, shall be then applied to reduc-tion of principal.
Principal and interest are payable in lawful money of the United States
of America.
4. LATE PAYMENT
Maker agrees that if for any reason it fails to make any on the
monthly payments required herein, including the amount due at the
Maturity Date, within five (5) days after the due date, Holder shall be
entitled to damages for the detriment caused thereby, the extent of
which damages are extremely difficult and impractical to ascertain.
Maker there-fore agrees that a sum equal to five percent (5%) of such
delin-quent payment is a reasonable estimate of such damages and Maker
agrees to pay such sum upon demand by Holder. Accept-ance of such late
charge by the Holder shall in no event consti-tute a waiver of Maker's
default with respect to such overdue amount nor pre-vent the Holder
from exercising any of the other rights and remedies granted hereunder.
5. SECURITY AGREEMENT
This Note is secured by (i) a Membership Interest Security Agreement,
executed contemporaneously herewith by Maker in favor of Holder, which
grants security interests in Maker's ownership interests in Louisville
Hotel LLC, a Delaware limited liability company (the "Security
Agreement") (ii) the Arizona Deed of Trust (as defined on Exhibit A)
and (iii) the Florida Deed of Trust (as defined on Exhibit A).
6. DEFAULT/ACCELERATION
If any one or more of the following events shall occur (hereinafter
called an "Event of Default"), namely: (i) default shall be made in
the payment of any installment here-under, when due; or (ii) default
shall be made in the punc-tual payment of any other obligation of the
Maker to the Holder under the Membership Interest Purchase Agreement
dated concurrently herewith by and between Maker and Holder (the
"Purchase Agreement") or otherwise when due; or (iii) there is any
default or event of default under any of the loan documents as
described on Exhibit "A" attached hereto and incorporated herein by
this reference (as at any time amended, modified, renewed or replaced,
the "Loan Documents") which is not cured within any applicable cure
period; or (iv) Maker shall become insolvent, or shall be unable to pay
its debts as they mature; or shall admit in writing its inability to
pay its debts as they mature; or shall make an assignment for the
benefit of its creditors; or shall file or commence or have filed or
commenced against it any proceeding for any relief under any bankruptcy
or insolvency law or any law or laws relat-ing to the relief of
debtors, readjustment of indebtedness, reorganizations, compositions or
extensions, or a receiver or trustee shall be appointed for the
undersigned; or (v) an event of default shall exist under the Security
Agreement which is not cured within any applicable cure period; or (vi)
Maker shall fail to comply with any other provision of this Note; or
(vi) any representation or warranty made herein or in the Security
Agreement shall be false in any material respect; or (vii) there is any
default or event of default under the Operating Agreement by Maker
which is not cured within any applicable cure period, and with respect
to each of the foregoing, in the case of any monetary obligation, the
same shall not be paid within five (5) days of written notice of such
failure by Holder to Maker, except that after two (2) such notices
shall have been given by Holder under any Loan Document, no such
further notices will be given by Holder and Maker shall be in default
with respect to any monetary obligation if the same is not paid within
five (5) days of when due, and in the case of any non-monetary
obligation which is curable, the same shall not be cured within twenty
(20) days of written notice of such failure by Holder to Maker
(provided that if a cure period is provided in any other Loan Document
or the Operating Agreement, such cure periods shall control with
respect to defaults under such agreements, and the cure period provided
herein shall not apply with respect thereto), THEN, upon the occurrence
of any such Event of Default, or upon the expiration of the term of
this Note, Holder at its election, and without presentment, demand,
notice of any kind, all of which are ex-pressly waived by Maker, may
declare the entire outstanding balance of principal and interest
thereon immediately due and payable, together with all costs of
collec-tion, including attorneys' fees, or may exercise upon or enforce
its rights to its collateral, as may be set forth in the Security
Agreement or otherwise.
7. NO WAIVER BY HOLDER
The acceptance by Holder of any payment under this Note after the date
such payment is due, or the failure to declare an Event of Default as
herein provided, shall not constitute a waiver of any of the terms of
this Note or the right to require the prompt payment when due of future
or succeeding pay-ments or to declare an Event of Default for any
failure to so pay or for any other default. The acceptance by Holder
of a payment of a portion of any installment at any time that such
installment is due in full shall not cure or excuse the default caused
by the failure to pay such installment in full and shall not constitute
a waiver of the right to require full payment when due of all future or
succeed-ing installments.
8. ATTORNEYS' FEES AND COSTS
In the event Holder takes any action to enforce any provision of this
Note, either through legal proceedings or otherwise, Maker promises to
immediately reimburse Holder for reasonable attorneys' fees and all
other costs and expenses so incurred. Maker shall also reimburse
Holder for all reasonable attorneys' fees and costs reason-ably
incurred in the representation of Holder in any bankruptcy, insolvency,
reorganization or other debtor-relief proceeding of or relating to
Maker or any security for the obligations hereunder, or for any action
to enforce any judgment rendered hereon or relating to enforcement
hereof.
9. WAIVERS
The Maker, endorsers, guarantors and sureties of this Note hereby waive
diligence, demand, presentment, notice of non-payment, protest and
notice of protest; expressly agree that this Note, or any payment
hereunder, may be renewed, modified or extended from time to time and
at any time; and consent to the acceptance or release of security for
this Note or the release of any party or guaran-tor, all without in any
way affecting their liability and waive the right to plead any and all
statutes of limitations as a de-fense to any demand on this Note, or on
any guaranty thereof, or to any agree-ment to pay the same to the full
extent permissible by law.
10. MAXIMUM INTEREST
In no event whatsoever shall the amount paid, or agreed to be paid, to
Holder for the use, forbearance or deten-tion of money to be loaned
hereunder or otherwise, for the per-formance or payment of any covenant
or obligation contained herein, exceed the maxi-mum amount permissible
under applicable law. If from any circum-stance whatsoever fulfillment
of any provision hereof exceeds the limit of validity prescribed by
law, then, ipso facto, the obli-gation to be fulfilled shall be reduced
to the limit of such validity, and if from any such circumstance Holder
shall ever receive as interest under this Note or other-wise an amount
that would exceed the highest lawful rate, such amount that would be
excessive interest shall be applied to the reduction of the prin-cipal
amount owing hereunder and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of prin-cipal, such
excess shall be refunded to Maker.
11. PREPAYMENT
Maker may prepay this Note in full or in part at any time without
prepayment charge. No partial prepayment shall release Maker from
thereafter tendering all regular scheduled monthly payments required
herein until the Note is paid in full.
12. NOTICES
Any notice which a party is required or may desire to give the other
shall be in writing and may be sent by personal delivery or by mail
(either (i) by United States registered or certified mail, return
receipt requested, postage prepaid, or (ii) by Federal Express or
similar generally recognized overnight carrier regularly providing
proof of delivery), addressed as follows (subject to the right of a
party to designate a different address for itself by notice similarly
given):
To Maker:
2859 Paces Ferry Road, Suite 700 Atlanta, Georgia 30339 Attention:
Mr. N. Russell Walden Ms. Karen Hughes Telecopier: (770) 433-8935
Telephone: (770) 434-3670
To Holder:
Louisville Hotel, L.P. 6900 East 2nd Street Scottsdale, Arizona 85251
Attention: Mr. Timothy Wright Telecopier: (602) 874-0678 Telephone:
(602) 874-0706
Any notice so given by mail shall be deemed to have been given as of
delivery (whether accepted or refused) established by U.S. Post Office
return receipt or the overnight carrier's proof of delivery, as the
case may be. Any such notice not so give shall be deemed given upon
receipt of the same by the party to whom the same is to be given.
13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Maker is a corporation formed and incorporated under the laws of the
State of Delaware. The principal place of business and chief executive
office of Maker is located at the address for notice to such party as
set forth herein. The registered agent of Maker and its address is:
Ms. Karen Hughes 2859 Paces Ferry Road, Suite 700 Atlanta, Georgia
30339 Telecopier: (770) 433-8935 Telephone: (770) 434-3670
Maker shall, from time to time, promptly execute and deliver all
further instruments and documents and take all further action that may
be reasonably necessary or desirable or that Holder may request, in
order to effectuate the provisions of this Note.
14. MISCELLANEOUS
The terms of this Note shall inure to the benefit of and bind the
parties hereto and their successors and assigns. As used herein the
term "Maker" shall include the undersigned Maker and any other person
or entity who may subsequently become liable for the payment hereof.
All obligations hereunder are joint and several and references to
"Maker" shall refer to each and every one of them. The term of this
Note shall inure to the benefit of and bind Maker and Holder and their
successors and assigns. The term "Holder" shall include the named
Holder as well as any other person or entity to whom this Note or any
interest in this Note is conveyed, transferred or assigned. Each
person signing this Note on behalf of Maker represents and warrants
that he has full authority to do so and that this Note binds Maker.
15. TIME OF ESSENCE
It is agreed that time is of the essence as to every term, condition
and provision of this Note.
16. SEVERABILITY
Every provision hereof is intended to be several and if any provision
is determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the other provisions hereof, which
shall remain binding and enforceable.
17. MODIFICATION
This Note may not be changed or modified orally, nor may any right or
provision hereof be waived orally, but in each instance only by an
instrument in writing signed by the party against which enforcement of
such change, modification or waiver is sought.
18. REMEDIES CUMULATIVE
Each and every right, remedy and power hereby granted to Holder or
allowed it by law or other agreement shall be cumulative and not
exclusive and may be exercised by Holder from time to time.
19. NONRECOURSE
Notwithstanding any other provision of this Note or the Loan Documents,
except as provided hereinbelow, Maker shall not be personally liable
for the payment of the principal sum or any interest due or any other
amount under this Note, and Holder agrees that in no event shall any
monetary deficiency judgment for such amount be sought or secured
against Maker for the payment of sums due hereunder. Notwithstanding
the foregoing, however, nothing in this Note or other Loan Documents
shall be deemed to limit the rights and remedies of Holder with respect
to, or limit the liability of Maker for, any and all losses, costs,
claims, demands, judgments, penalties, fines, liabilities, damages or
expenses arising (directly or indirectly), by reason of the occurrence
or existence of or relating to any of the following: (a) fraud or
misrepresentation by Maker, (b) misappropriation or misapplication of
any property securing the obligations under this Note, including, but
not limited to rents, issues, profits or other revenues, and/or other
revenues and/or monies, including security deposits, insurance proceeds
and condemnation awards, including any failure to apply the same to
amounts under the Note or (c) intentional waste with regard to any
security for the obligations hereunder.
20. GOVERNING LAW
This Note shall be governed by and construed under the laws of the
State of Arizona.
MAKER:
RIDGEWOOD HOTELS, INC., a Delaware corporation
By: Its:
EXHIBIT "A"
LIST OF LOAN DOCUMENTS
[All Dated September 30, 1999]
21. Secured Promissory Note in the principal amount of $1,333,000.00
executed by Ridgewood Hotels, Inc. ("Ridgewood") as Maker in favor of
Louisville Hotel L.P. ("Louisville") as Holder.
22. Membership Interest Security Agreement executed by Ridgewood as
Debtor in favor of Louisville as Creditor.
23. Secured Promissory Note [Arizona] in the principal amount of
$300,000.00 executed by Ridgewood as Maker in favor of Louisville as
Holder.
24. Deed of Trust executed by Ridgewood as Trustor in favor of
Louisville as Beneficiary encumbering certain real property located in
Glendale, Arizona (the "Arizona Deed of Trust").
25. Secured Promissory Note [Florida] in the principal amount of
$300,000.00 executed by Ridgewood as Maker in favor of Louisville as
Holder.
26. Mortgage, Assignment of Rents and Security Agreement executed by
Ridgewood as Mortgagor in favor of Louisville as Mortgagee encumbering
certain real property located in Orlando, Florida (the "Florida Deed of
Trust").