EXHIBIT 10.20
(HOTEL SUPPLIES)
PROMISSORY NOTE
$47,800.00 RICHMOND, VIRGINIA
SEPTEMBER 17, 1999
FOR VALUE RECEIVED, Apple Suites Management, Inc., a Virginia corporation, and
Apple Suites Services Limited Partnership, a Virginia limited partnership
(collectively, the "Makers"), hereby make 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 Seven Thousand
Eight Hundred and 00/100 Dollars ($47,800.00) 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"). The computation of 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 sixty-one (61)
consecutive monthly installments. The amount of the first installment shall be
$167.30, consisting entirely of interest. The amount of each subsequent
installment shall be $992.25, consisting of principal and interest on an
amortized basis.
(b) Each installment shall be due and payable on the first day of each
month, beginning with October 1, 1999. 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 October 1, 2004.
(c) The Makers are 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 Makers 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 Makers 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 Makers acknowledge and agree that no security
interest has been granted in any property or collateral in connection with this
Note.
5. PURPOSE.
The Makers have leased certain extended-stay hotel properties. The
Makers have received funds from the Holder for the purchase of various supplies
for such hotel properties, including without limitation, sheets, towels and
similar supplies to be used in connection with the operation of such hotel
properties (the "Supplies"). This Note serves as evidence of the indebtedness of
the Makers to the Holder, and provides for the repayment of such indebtedness to
the Holder. The purchase price of the Supplies and the corresponding
indebtedness with respect to each hotel property is shown on Schedule A, which
is attached hereto and incorporated herein by this reference.
6. EVENTS OF DEFAULT.
(a) Each of the following events shall constitute an "Event of Default"
under this Note:
(1) the failure by the Makers 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 Makers,
or either one of them, 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 Makers, or
for either one of them, 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 Makers, or either one of them;
(5) the entry of any judgment against the Makers, or against
either one of them, that exceeds, when combined with other unpaid judgments of
the Makers, ten percent (10%) of the then unpaid principal balance under this
Note;
(6) the general inability of either Maker to pay its debts as
they become due;
(7) the filing or commencement, by the creditors of either or
both of the Makers, 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 Makers, or by either one of them;
(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 either of the Makers: (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 Makers, or either
one of them, 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 either or both of the Makers.
(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 Makers, or either
one of them.
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 Makers 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.
(c) The Makers shall have joint and several liability for all amounts
due under this Note. The Holder shall have the right to enforce this Note
against either or both of the Makers in such percentages as the Holder, in its
sole discretion, may determine.
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 Makers under this Note shall not be altered or affected in
any way by any such transfer or assignment by the Holder.
(b) The Makers shall be absolutely prohibited from assigning any of
their 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 Makers 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 each of
the Makers 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 Makers to act
in strict compliance with this Note.
(b) Each of the Makers, 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 Makers 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.
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 Makers, and all of their respective
assignees and successors in title or interest.
APPLE SUITES MANAGEMENT, INC.,
a Virginia corporation
By: /s/ Glade M. Knight
--------------------
Glade M. Knight, President
APPLE SUITES SERVICES LIMITED PARTNERSHIP,
a Virginia limited partnership
By: Apple Suites Services General, Inc.,
a Virginia corporation
Its: General Partner
By: /s/ Glade M. Knight
---------------------
Glade M. Knight, President
SCHEDULE A
Hotel Supplies
Name of Hotel Property Location Amount
---------------------- ---------- --------
Dallas-Addison 4451 Beltline Road $ 12,000
Addison, Texas 75244
Dallas-Irving/Las Colinas 4300 Wingren Drive $ 13,600
Irving, Texas 75039
North Dallas- Plano 4705 Old Sheppard Place $ 9,900
Plano, Texas 75093
Richmond-West End 4100 Innslake Drive $ 12,300
Glen Allen, Virginia 23060
TOTAL $ 47,800