Exhibit 10.3
NOTE
New York, New York $123,000,000
NOTE, dated as of September 18, 2002 (this NOTE), by BRE/PARK PLACE
L.L.C., a Delaware limited liability company (BORROWER), having an address at
c/o Blackstone Real Estate Acquisitions III L.L.C., 345 Park Avenue, New York,
New York 10154, in favor of GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation (together with its successors and assigns, LENDER), having an office
at 31 West 52nd Street, 17th Floor, New York, New York 10019.
NOW, THEREFORE, FOR VALUE RECEIVED, Borrower promises to pay to the
order of Lender the Principal Amount (as defined below), together with interest
from the date hereof and other fees, expenses and charges as provided in this
Note.
1. DEFINED TERMS.
a. Capitalized terms used but not otherwise defined herein shall
have the respective meanings given thereto in the Loan
Agreement, unless otherwise expressly provided herein. All
references to sections shall be deemed to be references to
sections of this Note, unless otherwise indicated.
b. The following terms shall have the meaning ascribed thereto:
BORROWER shall have the meaning provided in the first paragraph hereof.
DEFAULT RATE shall mean, with respect to an acceleration of the Loan, a
rate per annum equal to the lesser of (a) the Maximum Legal Rate and
(b) four percent (4%) above the LIBOR Rate, adjusted from time to time
as set forth herein.
EXTENSION FEE shall mean a non-refundable fee equal to 0.125% of the
outstanding Principal Amount and payable in connection with Borrower's
exercise of each of the Second Extension Option and the Third Extension
Option on or before the date immediately preceding the commencement
date of each such extended term.
EXTENSION NOTICE shall have the meaning set forth in Section 5(a).
EXTENSION OPTION shall mean the First Extension Option, the Second
Extension Option, or the Third Extension Option, as applicable.
FIRST EXTENDED MATURITY DATE shall have the meaning set forth in
Section 5(a).
FIRST EXTENSION OPTION shall have the meaning set forth in Section
5(a).
INITIAL MATURITY DATE shall mean November 9, 2004.
INTEREST DETERMINATION DATE shall mean, with respect to each Interest
Period, the date which is two (2) Business Days prior to the fifteenth
(15th) day of each calendar month.
INTEREST PERIOD shall mean each interest period commencing on the
fifteenth (15th) calendar day of a calendar month and ending on (and
including) the fourteenth (14th) calendar day of the following calendar
month; provided that the first interest period shall commence on the
date hereof.
LENDER shall have the meaning provided in the first paragraph hereof.
LIBOR shall mean, with respect to any Interest Determination Date, the
rate (expressed as a percentage per annum rounded upwards, if
necessary, to the nearest one sixteenth (1/16) of one percent (1%)) for
deposits in U.S. Dollars for a one (1) month period that appears on
Telerate Page 3750 (as defined below) as of 11:00 a.m., London time, on
such Interest Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on the applicable
Interest Determination Date, the Lender shall request the principal
London office of any four (4) prime banks in the London interbank
market selected by the Lender to provide such banks' quotations of the
rates at which deposits in U.S. Dollars are offered by such banks at
approximately 11:00 a.m., London time, to prime banks in the London
interbank market for a one (1) month period commencing on the first day
of the related Interest Period and in a principal amount that is
representative for a single transaction in the relevant market at the
relevant time. If at least two (2) such offered quotations are so
provided, LIBOR will be the arithmetic mean of such quotations
(expressed as a percentage and rounded upwards, if necessary, to the
nearest one sixteenth (1/16) of one percent (1%)). If fewer than two
(2) such quotations are so provided, the Lender will request major
banks in New York City selected by the Lender to quote such banks'
rates for loans in U.S. Dollars to leading European banks as of
approximately 11:00 a.m., New York City time, on the applicable
Interest Determination Date for a one (1) month period commencing on
the first day of the related Interest Period and in an amount that is
representative for a single transaction in the relevant market at the
relevant time. If at least two (2) such rates are so provided, LIBOR
will be the arithmetic mean of such rates (expressed as a percentage
and rounded upwards, if necessary, to the nearest one sixteenth (1/16)
of one percent (1%)). If fewer than two (2) rates are so provided, then
LIBOR will be LIBOR used to determine the LIBOR Rate during the
immediately preceding Interest Period.
LIBOR MARGIN shall mean 1.08630081% per annum.
LIBOR RATE shall mean, with respect to each Interest Period, an
interest rate per annum equal to the sum of (A) LIBOR, determined as of
the Interest Determination Date immediately preceding the commencement
of such Interest Period, plus (B) the LIBOR Margin.
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LIQUIDATED DAMAGES AMOUNT shall have the meaning set forth in Section
4(d).
LOAN AGREEMENT shall mean the Loan and Security Agreement, dated the
date hereof, between Borrower and Lender.
LOCKOUT PERIOD shall mean the period from the date hereof through but
excluding the Lockout Release Date during which time no prepayment of
the Loan shall be permitted.
LOCKOUT RELEASE DATE shall mean October 10, 2004.
MATURITY DATE shall mean the Initial Maturity Date, provided that (a)
in the event of the exercise by Borrower of the First Extension Option
pursuant to Section 5(a) of this Note, the Maturity Date shall be the
First Extended Maturity Date, (b) in the event of the exercise by
Borrower of the Second Extension Option pursuant to Section 5(a) of
this Note, the Maturity Date shall be the Second Extended Maturity
Date, and (c) in the event of the exercise by Borrower of the Third
Extension Option pursuant to Section 5(a) of this Note, the Maturity
Date shall be the Third Extended Maturity Date, or such earlier date on
which the final payment of principal of this Note becomes due and
payable as provided in the Loan Agreement or this Note, whether at such
stated maturity date, by declaration of acceleration, or otherwise.
MATURITY DATE PAYMENT shall have the meaning set forth in Section 3(d).
NOTE shall have the meaning provided in the first paragraph hereof.
PAYMENT DATE shall be the ninth (9th) calendar day of each calendar
month and if such day is not a Business Day, then the Business Day
immediately preceding such day, commencing on November 9, 2002 and
continuing to and including the Maturity Date.
PRINCIPAL AMOUNT shall mean $123,000,000 or so much as may be
outstanding under this Note.
SECOND EXTENDED MATURITY DATE shall have the meaning set forth in
Section 5(a).
SECOND EXTENSION OPTION shall have the meaning set forth in Section
5(a).
TELERATE PAGE 3750 shall mean the display designated as "Page 3750" on
the Dow Jones Telerate Service (or such other page as may replace Page
3750 on that service) or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose
of displaying British Bankers' Association Interest Settlement Rates
for U.S. Dollar deposits.
THIRD EXTENDED MATURITY DATE shall have the meaning set forth in
Section 5(a).
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THIRD EXTENSION OPTION shall have the meaning set forth in Section
5(a).
2. INTEREST.
a. Prior to the Maturity Date, interest shall accrue on the
Principal Amount as follows:
i. from and including the date hereof to, but not
including, the first (1st) day of the second (2nd)
Interest Period (i.e., the 15th day of the first
calendar month immediately after the date hereof), at
a rate per annum equal to 2.90630081%; and
ii. from and including the first (1st) full day of the
second (2nd) Interest Period immediately following
the date of this Note, during the term of this Note
and thereafter during each Interest Period, at the
LIBOR Rate.
b. From and after the Maturity Date and from and after the
occurrence (but only during the continuance) of an Event of
Default, interest shall accrue on the Principal Amount at the
Default Rate.
c. Except as expressly set forth in the Loan Documents to the
contrary, interest shall accrue on all amounts advanced by
Lender pursuant to the Loan Documents at the Default Rate.
d. Interest, for any given Interest Period, shall be computed on
the Principal Amount on the basis of a fraction, the
denominator of which shall be 360 and the numerator of which
shall be the actual number of days in the relevant Interest
Period.
e. The provisions of this Section 2 are subject in all events to
the provisions of Section 2.2.4 of the Loan Agreement.
3. PAYMENTS.
a. On each Payment Date, Borrower shall pay to Lender interest
accruing hereunder during the entire Interest Period in which
said Payment Date occurs.
b. All payments made by Borrower hereunder or under any of the
Loan Documents shall be made on or before 2:00 p.m. New York
City time. Any payments received after such time shall be
credited to the next following Business Day.
c. All amounts advanced by Lender pursuant to the Loan Documents,
other than the Principal Amount, or other charges provided in
the Loan Documents, shall be due and payable as provided in
the Loan Documents. In the event any such advance or charge is
not so repaid by Borrower, Lender may, at its option, first
apply any payments received under this Note to repay such
advances, together with any
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interest thereon, or other charges as provided in the Loan
Documents, and the balance, if any, shall be applied in
payment of any installment of interest or principal then due
and payable.
d. The entire Principal Amount of this Note, all unpaid accrued
interest, all interest that would accrue on the Principal
Amount through the end of the Interest Period during which the
Maturity Date occurs (even if such period extends beyond the
Maturity Date) and all other fees and sums then payable
hereunder or under the Loan Documents (collectively, the
MATURITY DATE PAYMENT) shall be due and payable in full on the
Maturity Date.
e. Amounts due on this Note shall be payable, without any
counterclaim, setoff or deduction whatsoever, at the office of
Lender or its agent or designee at the address set forth on
the first page of this Note or at such other place as Lender
or its agent or designee may from time to time designate in
writing.
f. All amounts due under this Note, including, without
limitation, interest and the Principal Amount, shall be due
and payable in lawful money of the United States.
g. To the extent that Borrower makes a payment or Lender receives
any payment or proceeds for Borrower's benefit, which are
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party
under any bankruptcy law, common law or equitable cause, then,
to such extent, the obligations of Borrower hereunder intended
to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Lender.
4. PREPAYMENTS. Prior to the Lockout Release Date, the outstanding
Principal Amount may not be paid in whole or in part except in
connection with a payment pursuant to Section 4(b) of this Note.
a. VOLUNTARY PREPAYMENTS. Borrower shall have the right on or
after the Lockout Release Date to prepay without penalty the
Principal Amount in whole, but not in part, upon satisfaction
of the following conditions:
i. Borrower shall provide prior written notice (the
PREPAYMENT NOTICE) to Lender specifying the proposed
date on which the prepayment is to be made, which
date shall be no earlier than thirty (30) days after
the date of such Prepayment Notice and no later than
sixty (60) days after the date of such Prepayment
Notice (the date of such prepayment pursuant to this
Section 4(a) and Section 4(b) below being the
PREPAYMENT DATE);
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ii. Borrower shall comply with the provisions set forth
in Section 4(c) and Section 4(d) of this Note; and
iii. No prepayment shall be permitted on any date during
the period commencing on the first calendar day
immediately following a Payment Date to, but not
including, the Interest Determination Date in such
calendar month.
b. MANDATORY PREPAYMENTS.
i. On the next occurring Payment Date following the date
on which Borrower actually receives any Proceeds, if
Lender is not obligated to make such Proceeds
available to Borrower for the restoration of the
Property, Borrower shall prepay the outstanding
principal balance of the Note in an amount equal to
one hundred percent (100%) of such Proceeds; and
ii. Borrower shall comply with the provisions set forth
in Section 4(c) of this Note.
c. PAYMENTS IN CONNECTION WITH A PREPAYMENT.
i. On the date on which a prepayment, voluntary or
involuntary, is made under this Note or as required
under the Loan Agreement, Borrower shall pay to
Lender all unpaid interest on the Principal Amount,
such unpaid interest calculated (even if such period
extends beyond the date of prepayment) (i) through
the end of the Interest Period during which such
prepayment is made if the Loan is prepaid from the
fifteenth (15th) day of any calender month through
the ninth (9th) day of the succeeding calender month,
or (ii) through the end of the Interest Period next
succeeding the Interest Period in which such
prepayment is made if the Loan is prepaid from the
Interest Determination Date in any calender month
through the fourteenth (14th) day of any calender
month;
ii. On the Prepayment Date, Borrower shall pay to Lender
all other sums then due under the Note, the Loan
Agreement, the Security Instrument, and the other
Loan Documents; and
iii. Borrower shall pay all costs and expenses of Lender
incurred in connection with the prepayment (including
without limitation, any costs and expenses incurred
by Lender in connection with a notice of prepayment
which is subsequently revoked, and including without
limitation, any costs and expenses associated with a
release of the Lien of the related Security
Instrument as set forth in Section 2.3.3 of the Loan
Agreement as well as reasonable attorneys' fees and
expenses).
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d. LIQUIDATED DAMAGES AMOUNT. IF OTHER THAN IN CONNECTION WITH
THE APPLICATION OF PROCEEDS PURSUANT TO SECTION 6.2 OF THE
LOAN AGREEMENT, NOTWITHSTANDING THE PROHIBITIONS OF THIS
SECTION 4, THE LOAN IS VOLUNTARILY OR INVOLUNTARILY REPAID
DURING THE LOCKOUT PERIOD, INCLUDING AS A RESULT OF AN
ACCELERATED MATURITY DATE, THEN BORROWER SHALL PAY TO LENDER,
AS LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT AS A PENALTY,
AND IN ADDITION TO ANY AND ALL OTHER SUMS AND FEES PAYABLE
UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS, AN AMOUNT EQUAL
TO TWO PERCENT (2%) OF THE PRINCIPAL AMOUNT BEING REPAID (THE
LIQUIDATED DAMAGES AMOUNT).
5. EXTENSION OPTIONS.
a. EXTENSION OPTIONS. Subject to the provisions of this Section
5, Borrower shall have (i) the option (the FIRST EXTENSION
OPTION), by irrevocable written notice (an EXTENSION NOTICE)
delivered to Lender no later thirty (30) days prior to the
Initial Maturity Date, to extend the Initial Maturity Date to
November 9, 2005 (the FIRST EXTENDED MATURITY DATE), (ii) the
option (the SECOND EXTENSION OPTION), by delivering to Lender
an Extension Notice no later than thirty (30) days prior to
the First Extended Maturity Date, to extend the First Extended
Maturity Date to November 9, 2006 (the SECOND EXTENDED
MATURITY DATE), and (iii) the option (the THIRD EXTENSION
OPTION), by delivering to Lender and Extension Notice no later
than thirty (30) days prior to the Second Extended Maturity
Date, to extend the Second Extended Maturity Date to November
9, 2007 (the THIRD EXTENDED MATURITY DATE). Borrower's right
to so extend the Maturity Date shall be subject to the
satisfaction of the following conditions precedent as of the
delivery of the applicable Extension Notice and as of the
Initial Maturity Date, the First Extended Maturity Date or the
Second Extended Maturity Date, as the case may be, prior to
such extension hereunder:
i. No Monetary Default or Event of Default shall have
occurred and be continuing both on the date Borrower
delivers the Extension Notice and on the Initial
Maturity Date (or the First Extended Maturity Date or
the Second Extended Maturity Date, as the case may
be);
ii. Borrower shall obtain and deliver to Lender not later
than one (1) Business Day prior to the first day of
the term of the Loan as extended one or more
Replacement Interest Rate Cap Agreements from an
Approved Counterparty which Replacement Interest Rate
Cap Agreement(s) shall be effective for the period
commencing on the day immediately following the then
applicable Maturity Date (prior to giving effect to
the applicable
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Extension Option) and ending on the last day of the
Interest Period in which the one (1) year anniversary
of such date occurs;
iii. Borrower shall deliver a Counterparty Opinion with
respect to the Replacement Interest Rate Agreement
and the related Acknowledgment;
iv. On or before the date immediately preceding the
Second Extended Maturity Date and the Third Extended
Maturity Date, as applicable, Borrower shall pay to
Lender the Extension Fee.
b. EXTENSION DOCUMENTATION. As soon as practicable following an
extension of the Maturity Date pursuant to this Section 5,
Borrower shall execute and deliver an extension and/or
restatement of the Note and shall enter into such extensions
of the related Loan Documents as may be necessary or
appropriate to evidence the extension of the Maturity Date as
provided in this Section 5; provided, however, that no failure
by Borrower to enter into any such extensions and/or
restatements shall affect the rights or obligations of
Borrower or Lender with respect to the extension of the
Maturity Date.
6. MISCELLANEOUS.
a. WAIVER. Borrower and all endorsers, sureties and guarantors
hereby jointly and severally waive all applicable exemption
rights, valuation and appraisement, presentment for payment,
demand, notice of demand, notice of nonpayment or dishonor,
protest and notice of protest of this Note, and, except as
otherwise expressly provided in the Loan Documents, all other
notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this
Note. Borrower and all endorsers, sureties and guarantors
consent to any and all extensions of time, renewals, waivers
or modifications that may be granted by Lender with respect to
the payment or other provisions of this Note and to the
release of the collateral securing this Note or any part
thereof, with or without substitution, and agree that
additional makers, endorsers, guarantors or sureties may
become parties hereto without notice to them or affecting
their liability under this Note.
b. NON-RECOURSE. Recourse to the Borrower with respect to any
claims arising under or in connection with this Note shall be
limited to the extent provided in Section 18.1 of the Loan
Agreement and the terms, covenants and conditions of Section
18.1 of the Loan Agreement are hereby incorporated by
reference as if fully set forth in this Note.
c. NOTE SECURED. This Note and all obligations of Borrower
hereunder are secured by the Loan Agreement, the Security
Instrument and the other Loan Documents.
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d. NOTICES. Any notice, election, request or demand which by any
provision of this Note is required or permitted to be given or
served hereunder shall be given or served in the manner
required for the delivery of notices pursuant to the Loan
Agreement.
e. ENTIRE AGREEMENT. This Note, together with the other Loan
Documents, constitutes the entire and final agreement between
Borrower and Lender with respect to the subject matter hereof
and may only be changed, amended, modified or waived by an
instrument in writing signed by Borrower and Lender.
f. NO WAIVER. No waiver of any term or condition of this Note,
whether by delay, omission or otherwise, shall be effective
unless in writing and signed by the party sought to be
charged, and then such waiver shall be effective only in the
specific instance and for the purpose for which given. No
notice to, or demand on, Borrower shall entitle Borrower to
any other or future notice or demand in the same, similar or
other circumstances.
g. SUCCESSORS AND ASSIGNS. This Note shall be binding upon and
inure to the benefit of Borrower and Lender and their
respective successors and permitted assigns. Upon any
endorsement, assignment, or other transfer of this Note by
Lender or by operation of law, the term "Lender," as used
herein, shall mean such endorsee, assignee, or other
transferee or successor to Lender then becoming the holder of
this Note. The term "Borrower" as used herein shall include
the respective successors and assigns, legal and personal
representatives, executors, administrators, devisees, legatees
and heirs of Borrower, if any.
h. CAPTIONS. All paragraph, section, exhibit and schedule
headings and captions herein are used for reference only and
in no way limit or describe the scope or intent of, or in any
way affect, this Note.
i. SEVERABILITY. The provisions of this Note are severable, and
if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part, then such invalidity or
unenforceability shall affect only such clause or provision,
or part thereof, and not any other clause or provision of this
Note.
j. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT
TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER
IN
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THE MANNER AND AT THE ADDRESS SPECIFIED FOR NOTICES IN THE
LOAN AGREEMENT. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
k. JURY TRIAL WAIVER. BORROWER AND ALL PERSONS CLAIMING BY,
THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER
THIS NOTE, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO THIS NOTE (AS NOW OR HEREAFTER
MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE; AND BORROWER HEREBY AGREES AND CONSENTS THAT AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO TO
THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER
ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL
REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT
THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE
LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.
l. Counterclaims and other Actions. Borrower hereby expressly and
unconditionally waives, in connection with any suit, action or
proceeding brought by Lender on this Note, any and every right
it may have to (i) interpose any counterclaim therein (other
than a counterclaim which can only be asserted in the suit,
action or proceeding brought by Lender on this Note and cannot
be maintained in a separate action) and (ii) have any such
suit, action or proceeding consolidated with any other or
separate suit, action or proceeding; provided, however, the
foregoing shall not prohibit Borrower from asserting any
unrelated claim in a separate suit, action or proceeding.
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the day and year first above written.
BORROWER:
BRE/PARK PLACE L.L.C., a Delaware limited liability
company
By: /s/ Frank Cohen
-------------------------------
Name: Frank Cohen
Title: Vice President
Note Execution