Exhibit 10.8
(HOTEL FRANCHISE FEES)
PROMISSORY NOTE
$45,000.00 RICHMOND, VIRGINIA
DECEMBER 22, 1999
FOR VALUE RECEIVED, Apple Suites Management, Inc., a Virginia corporation (the
"Maker"), hereby makes an UNCONDITIONAL PROMISE TO PAY TO THE ORDER OF Apple
Suites, Inc., a Virginia corporation (the "Holder"), in lawful money of the
United States of America, the principal sum of Forty Five Thousand and 00/100
Dollars ($45,000.00), together with interest thereon, in accordance with the
following terms:
1. INTEREST.
Interest shall accrue on the unpaid principal balance at the annual
rate of nine percent (9%) (the "Note Rate"). With respect to amortized payments,
interest at the Note Rate shall be based on a 360-day year and a uniform period
of 30 days per month. If there is an Event of Default (as defined below), the
annual rate of interest shall increase to twelve percent (12%), and shall be
compounded monthly (the "Default Rate"). The computation of interest at the
Default Rate shall be based on the actual number of days elapsed.
2. PAYMENTS.
(a) The debt represented by this Note shall be paid in one hundred
twenty-one (121) consecutive monthly installments. The amount of the first
installment shall be $112.50, consisting entirely of interest, based on the
actual number of days elapsed. The amount of each subsequent installment shall
be $570.04, consisting of principal and interest on an amortized basis.
(b) Installments shall be due and payable on the first day of each
month, beginning with January 1, 2000. The due date for each installment shall
be deemed a "Payment Date." The entire balance of principal and interest shall
be due and payable in full on January 1, 2010.
(c) The Maker is entitled to prepay the principal balance under this
Note, in whole or in part, on one or more occasion(s), without premium or
penalty.
(d) The Holder shall have the right to allocate all payments under this
Note in accordance with the following priority: (1) first, to accrued but unpaid
interest; and (2) second, to unpaid principal.
3. PAYMENT ADDRESS AND METHOD.
The Holder shall have the right, which may be exercised on one or more
occasion(s) in the sole discretion of the Holder, to require the Maker to use
any address for the delivery of payment and any reasonable method of payment,
including but not limited to cashier's check or
wire transfer. For present purposes, the Holder hereby requires the Maker to
use a single check for each installment payment, and to use the mailing address
shown below for the delivery of all payments:
Apple Suites, Inc.
Attn: Stanley J. Olander, Jr., Secretary
306 East Main Street
Richmond, VA 23219
4. SECURITY AND COLLATERAL.
The Holder and the Maker acknowledge and agree that no security
interest has been granted in any property or collateral in connection with this
Note.
5. PURPOSE.
The Maker has leased an extended-stay hotel in Jackson, Mississippi.
The Maker has received funds from the Holder for the satisfaction of various
franchise fees for such hotel. This Note serves as evidence of the indebtedness
of the Maker to the Holder, and provides for the repayment of such indebtedness
to the Holder.
6. EVENTS OF DEFAULT.
(a) Each of the following events shall constitute an "Event of
Default" under this Note:
(1) the Maker's failure to pay to the Holder, within a grace
period of five (5) calendar days after any Payment Date, the full amount due on
such Payment Date;
(2) the acceleration of any payment obligation of the Maker
under any other promissory note, debt instrument or other financial instrument
or agreement that now exists or may exist in the future;
(3) the commencement of any proceeding to appoint any
receiver, trustee, custodian, liquidator, or similar official for the Maker, or
the final appointment of any of the foregoing;
(4) the attachment, levy, seizure or garnishment, whether in
whole or in part, of any wages, funds, financial accounts or other property of
the Maker;
(5) the entry of any judgment against the Maker that exceeds,
when combined with its other unpaid judgments, ten percent (10%) of the then
unpaid principal balance under this Note;
(6) the general inability of the Maker to pay its debts as
they become due;
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(7) the filing or commencement, by the creditors of the Maker,
of any Insolvency Action (as defined below) that is not dismissed within thirty
(30) calendar days after the original date of filing or commencement;
(8) the approval or voluntary filing of any Insolvency Action,
or the approval or consummation of any plan to make a general assignment for the
benefit of creditors, by the Maker;
(9) the approval of any plan, or the execution of any
contract, that causes or is intended to cause any of the following with respect
to the Maker: (A) its dissolution; (B) the liquidation of its assets; (C) the
termination of its corporate existence, whether by merger or otherwise; or (D)
the sale or transfer of all, or substantially all, of its assets;
(10) any event that causes or will cause the Maker to cease
its business or operations for a period of more than thirty (30) consecutive
calendar days; or
(11) any event that terminates or will terminate the business,
operations or legal existence of the Maker.
(b) For purposes of this Note, the term "Insolvency Action" shall
mean any case or proceeding, or petition relating thereto, that arises under
any state or Federal laws relating to bankruptcy or insolvency, whether now
existing or subsequently enacted, and that seeks reorganization, liquidation
or other relief with respect to the debts, assets or businesses of the Maker.
7. REMEDIES.
(a) If an Event of Default occurs, all unpaid principal and accrued
interest under this Note shall become immediately due and payable in full,
without any action whatsoever by the Holder.
(b) The Maker shall pay all costs, including but not limited to
reasonable legal fees and expenses, whether arising in connection with an
Insolvency Action or otherwise, that may be incurred by the Holder to enforce
this Note or to collect the amounts due under this Note ("Enforcement Costs").
The Holder, in its sole discretion, shall have the right to treat Enforcement
Costs as additional interest under this Note.
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8. TRANSFER AND ASSIGNMENT.
(a) The Holder shall have the right to transfer this Note and to assign
any rights or remedies under this Note. Such right may be exercised in whole or
in part, on one or more occasion(s), in the sole discretion of the Holder. The
obligations of the Maker under this Note shall not be altered or affected in any
way by any such transfer or assignment by the Holder.
(b) The Maker shall be absolutely prohibited from assigning any of its
obligations under this Note without the prior written consent of the Holder. The
Holder shall be entitled to withhold such consent in its sole discretion for any
reason or no reason. Any attempted assignment in violation of such prohibition
shall be ineffective and void.
(c) The Holder and the Maker acknowledge and agree that this Note (1)
is evidence of commercial debt financing; and (2) is not an investment contract,
is not designed to raise capital, is not part of any plan of distribution and is
not related to any offering of securities.
9. WAIVERS.
(a) The Holder shall not be deemed to have waived any of its rights or
remedies under this Note unless the Holder delivers a written notice to the
Maker that states the nature and scope of such waiver. Without limiting the
foregoing, no waiver of the Holder's rights or remedies shall be deemed to exist
solely because the Holder, on one or more occasion(s), may have: (1) waived
certain rights or remedies; (2) elected certain rights or remedies in lieu of
others; (3) delayed in exercising any rights or remedies; (4) extended any
Payment Dates under this Note; or (5) refrained from requiring the Maker to act
in strict compliance with this Note.
(b) The Maker, to the maximum extent permitted by law, hereby grants a
complete, irrevocable and unconditional waiver of each of the following: (1) the
right to require presentment, demand, dishonor, protest or any notices of any
kind or nature from the Holder in connection with this Note; (2) the right to
assert any statute of limitations as a defense to the enforcement of this Note;
(3) any claim that seeks to restrain, enjoin, prohibit, delay or interfere with
any transfer of this Note by the Holder, or any assignment of the Holder's
rights or remedies under this Note; (4) any claim that a transfer or assignment
by the Holder with respect to this Note has altered or affected the obligations
of the Maker in any way; and (5) any claim that the Holder has waived its rights
or remedies under this Note in a manner other than the manner described in
subsection (a) immediately above.
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10. GENERAL.
(a) Time is of the essence with respect to this Note and each Payment
Date. Except as expressly set forth in this Note, or in a written waiver that
may be granted by the Holder, there are no grace periods and no extensions of
time for payment with respect to this Note, and no grace periods or extensions
shall be implied.
(b) This Note shall be interpreted and enforced in accordance with the
laws of the Commonwealth of Virginia, without regard to any choice of law
provisions or principles thereof to the contrary.
(c) All provisions in this Note are severable and each valid and
enforceable provision shall remain in full force and effect, regardless of any
official or formal determination that declares certain provisions of this Note
to be invalid or unenforceable.
(d) Captions and headings are used in this Note for convenience only
and shall not affect the interpretation of this Note. Terms such as "hereof,"
"hereby," "hereto," "herein" and "hereunder" shall be deemed to refer to this
Note as a whole, rather than to any particular provision of this Note.
(e) All terms and conditions of this Note shall be binding upon, and
enforceable against, the Holder and the Maker, and all of their respective
assignees and successors in title or interest.
APPLE SUITES MANAGEMENT, INC.,
a Virginia corporation
By: /s/ Glade M. Knight
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Glade M. Knight, President
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