EXHIBIT 10.4
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PROMISSORY NOTE
$2,525,000.00 October 21, 1999
FOR VALUE RECEIVED, ALPHANET HOSPITALITY SYSTEMS, INC. ("Borrower") promises to
pay to APPEL INVESTMENTS INC. ("Agent"), as Agent, or to its order, at the
Payment Office or at such other place as the holder hereof may designate, in
lawful money of the United States of America, in cash or immediately available
funds acceptable to the holder hereof, principal equal to the sum of TWO MILLION
FIVE HUNDRED TWENTY-FIVE THOUSAND and 00/100 DOLLARS ($2,525,000.00), together
with interest on the outstanding principal balance until paid in full in
accordance with the terms, conditions and provisions hereinafter set forth in
this Promissory Note (this "Note").
This Note is issued pursuant to, and is subject to the terms of, that certain
Loan Agreement (the "Loan Agreement"), dated as of October 21, 1999, among
Borrower, the lenders from time to time party hereto (each, a "Lender" and,
collectively, the "Lenders"), and APPEL INVESTMENTS INC., Agent, which provides,
among other things for acceleration hereof. Capitalized terms, which are used
herein but not defined herein, shall have the meanings ascribed to them in the
Loan Agreement.
Interest shall accrue and be payable from the date hereof at the rate of twenty
and one-half percent (20.5%) per annum (the "Note Rate"), subject to increase
upon default as hereinafter provided.
Until the Maturity Date as hereinafter provided, accrued interest shall be
payable monthly, commencing on November 1, 1999, and continuing on the first day
of each succeeding calendar month. On October 21, 2001 (the "Maturity Date"),
the entire unpaid principal balance, and all unpaid accrued interest thereon,
shall be due and payable without demand and/or notice. In the event that
Borrower does not pay this Note in full on the Maturity Date then, as of said
Maturity Date and thereafter until paid in full, interest accruing on the
outstanding principal balance hereunder shall be computed, calculated and
accrued on a daily basis at the Default Rate, as defined below.
Interest, late charges, costs, or expenses that are not received by Lender on
date such interest, late charges, costs, or expenses become due, shall, at the
sole discretion of Agent, be added to the principal balance and shall from the
date due bear interest at the Default Rate.
Upon the occurrence of an Event of Default, Agent may, in its sole and absolute
discretion, declare the entire unpaid principal balance, together with all
accrued and unpaid interest thereon, and all other amounts and/or payment due
hereunder, immediately due and payable, without notice and/or demand.
From and after the occurrence of any Event of Default, whether by nonpayment,
maturity, acceleration, nonperformance or otherwise, and until such Event of
Default has been cured, all outstanding amounts under this Note (including, but
not limited to, interest, costs and late charges) shall bear interest at a per
annum rate (the "Default Rate") equal to four percent (4%) per annum in excess
of the Note Rate.
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Time is of the essence for all payments and other obligations due under this
Note. Borrower acknowledges that if any payment required under this Note is not
received by Agent within fifteen (15) days after the same becomes due and
payable, Agent will incur extra administrative expenses (i.e., in addition to
expenses incident to receipt of timely payment) and the loss of the use of funds
in connection with the delinquency in payment. Because, from the nature of the
case, the actual damages suffered by Agent by reason of such administrative
expenses and loss of use of funds would be impracticable or extremely difficult
to ascertain, Borrower agrees that five percent (5 %) of the amount of the
delinquent payment, together with interest accruing on the entire unpaid
principal balance of this Note at the Default Rate, as provided above, shall be
the amount of damages which Agent is entitled to receive upon such breach, in
compensation therefor. Therefore, Borrower shall, in such event, without further
demand or notice, pay to Agent, as Agent's monetary recovery for such extra
administrative expenses and loss of use of funds, liquidated damages in the
amount of five percent (5%) of the amount of the delinquent payment (in addition
to interest at the Default Rate). The provision of this paragraph are intended
to govern only the determination of damages in the event of a breach in the
performance of Borrower to make timely payments hereunder. Nothing in this Note
shall be construed as in any way giving Borrower the right, express or implied,
to fail to make timely payments hereunder, whether upon payment of such damages
or otherwise. The right of Agent to receive payment of such liquidated and
actual damages, and receipt thereof, are without prejudice to the right of Agent
to collect such delinquent payments and any other amounts provided to be paid
hereunder or under any of the Loan Documents, or to declare an Event of Default
hereunder or under any of the other Loan Documents.
Borrower hereby waives grace, diligence, presentment, demand, notice of demand,
dishonor, notice of dishonor, protest, notice of protest, any and all exemption
rights against the indebtedness evidenced by this Note and the right to plead
any statute of limitations as a defense to the repayment of all or any portion
of this Note, and interest thereon, to the fullest extent allowed by law.
This Note is subject to the express condition that at no time shall Borrower be
obligated, or required, to pay interest on the principal balance at a rate which
could subject any Lender to either civil or criminal liability as a result of
such rate being in excess of the maximum rate which such Lender is permitted to
charge. If, by the terms of this Note, Borrower is, at any time, required or
obligated to pay interest on the principal balance at a rate in excess of such
maximum rate, then the rate of interest under this Note shall be deemed to be
immediately reduced to such maximum rate, and interest payable hereunder shall
be computed at such maximum rate, and any portion of all prior interest payments
in excess of such maximum rate shall be applied, and/or shall retroactively be
deemed to have been payments made, in reduction of the principal balance.
IN WITNESS WHEREOF, Borrower has executed this Note on the day and year first
above written.
ALPHANET HOSPITALITY SYSTEMS, INC.
By: /s/ Mark Holzberg
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Its: President
By: /s/ MeeMee Tan
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Its: Secretary
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