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EXHIBIT 10.73
HILTON NOTE
APRIL 15, 1998
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$2,666,666 Los Angeles, California April 15, 1998
FOR VALUE RECEIVED, The Sports Club Company, Inc., a Delaware
corporation ("Maker"), promises to pay on or before the Due date (as defined
below) to Hilton Hotels Corporation ("Noteholder") at 9336 Civic Center Drive,
Beverly Hills, California 90210, or such other location as Noteholder may
designate, the sum of $2,666,666, without any interest thereon, in accordance
with the terms and conditions hereinafter set forth. The "Endorsed Date" of this
Note, as that term is used herein, shall be the date on which Closing, as
defined in that certain Asset Purchase Agreement, dated as of April 1, 1998,
between Noteholder and The Sports Club Company, Inc. (the "Purchase Agreement"),
shall occur.
1. PAYMENT OF PRINCIPLE AND INTEREST.
1.1 On the first anniversary of the Endorsed Date, Maker shall pay
Noteholder principal in the sum of $1,333,333.
1.2 On the second anniversary of the Endorsed Date (the "Due Date"),
Maker shall pay Noteholder principal in the sum of $1,333,333.
1.3 Principal and interest, if any, shall be payable in lawful money of
the United States. Payments hereon shall be credited first to accrued and unpaid
interest hereon, if any, and the balance to principal.
1.4 Upon failure of Maker to perform or to pay, in full, any monetary
obligation of Maker under this Note within ten days after notice and demand
therefor, then at the option of Noteholder, upon demand, the principal balance
of this Note shall become immediately due and payable in full.
1.5 Should any sum due under this Note not be paid when due, said
past-due sum shall thereafter bear simple interest at the rate of 10% per annum.
2. PREPAYMENT.
2.1 Notwithstanding any other provision in this Note, Maker shall have
the right at any time or from time to time to prepay any or all of the unpaid
principal balance of this Note, without penalty. If Maker prepays any portion of
the unpaid principal balance of this Note, the balance of each installment of
principal remaining to be paid after such prepayment will be reduced by a 0.833%
(1/2 of 10%) monthly discount factor. For example, if the Endorsed Date were to
be March 31, 1998 and the entire note were to be prepaid on October 1, 1998, the
principal balance would be reduced by $237,405, from $2,666,666 to $2,429,261,
calculated as follows: (i) $63,492 for the March 31,1999 payment =
($1,333,333-($1,333,333/(1 + (.0083 x 6)) plus (ii) $173,913 for the March 31,
2000 payment = ($1,333,333 -($1,333,333/(1 + (.0083 x 18)).
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2.2 Upon payment in full of the unpaid principal balance of this Note,
this Note shall be canceled, and Noteholder shall mark this Note as "PAID IN
FULL" and return this Note, as so marked, to the undersigned.
3. MISCELLANEOUS PROVISIONS.
3.1 NOTICES. All acknowledgments, notices, approvals, requests,
responses, waivers and demands of any kind, which either party hereto may be
required, or may desire, to serve upon the other party under the terms of, or in
connection with, this Note or the Purchase Money Encumbrance, shall be given by
personal delivery or by mailing a copy thereof, postage prepaid, by certified or
registered mail, addressed as follows:
TO NOTEHOLDER: 9366 Civic Center Drive
Beverly Hills, California 90210
Attention: Chief Financial Officer and General Counsel
TO MAKER: 11000 Santa Monica Boulevard
Suite 300
Los Angeles, California 90025
Attention: Real Estate Department
WITH A COPY TO: Resch Polster Alpert Berger LLP
10390 Santa Monica Boulevard
Suite 400
Los Angeles, California 90025
Attention: Ronald M. Resch
Notice shall be deemed given on the date of personal delivery or
the second business day following the date of mailing. The above addresses or
persons may be changed from time to time by notice served, as hereinabove
provided by the party desiring a change, to the other party.
3.2 ATTORNEYS' FEES. In the event that legal action is taken by Maker or
Noteholder in connection with this Note, or any related document or matter, the
losing party in such legal action, in addition to such other damages as such
losing party may e required to pay, shall pay reasonable attorneys' fees to the
prevailing party.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions and covenants contained herein shall inure to and be
binding upon the successors, transferees, heirs and assigns of the parties
hereto.
3.4 DEFAULT. Maker shall not be deemed to be in default of any of its
obligations hereunder until the expiration of ten days after receipt of notice
of default from Noteholder, and shall only be deemed to be in default thereafter
if the subject default has not been cured within said ten-day period, or, if
such default is a nonmonetary default and cannot be cured within such period, if
Maker has not begun such cure within such period or thereafter ceases to
diligently pursue its completion.
3.5 WAIVERS. Subject to paragraph 3.4, Maker and all endorsers hereof ,
if any, severally waive diligence and the right to plead any statute of
limitations, presentment, grace, protest and demand, and also notice of protest,
demand, dishonor and nonpayment of this Note, and notice of intention to
accelerate the
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maturity date, and any and all moratorium, appraisement, exemption and homestead
rights now provided or which may hereafter be provided by any federal or state
statute both as to itself personally and as to all of its property, whether real
or personal, against the enforcement and collection of the obligations evidenced
by this Note and any and all extensions, renewals and modifications hereof.
3.6 SECTION HEADINGS. The headings of the sections of this Note are
inserted solely for convenience, and are not intended to govern, limit or aid in
the construction of any term or provision hereof.
3.7 CHOICE OF LAW. This Note shall be governed by the laws of the State
of California.
MAKER: THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
By: /s/ John M. Gibbons
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Its: President
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The undersigned Noteholder hereby acknowledges its agreement to the
terms and conditions hereinabove set forth.
NOTEHOLDER: Hilton Hotels Corporation,
a Delaware corporation
By /s/ Matt J. Hart
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Its EVP, CFO
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The Endorsed Date is April 15 , 1998
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