7/30/97
LOAN AGREEMENT
This Agreement dated this ___ day of July, 1997, is by and
between Sonesta Miami Beach Hotel Company, Inc. ("Sonesta") and Skip Properties
N.V. ("Skip Properties").
WHEREAS, Sonesta and Skip are contemporaneously herewith
entering into agreements under which an affiliate of Sonesta shall provide
design and pre-opening services in connection with a hotel and condominium
project being developed by Skip Properties and its affiliates, and Sonesta shall
operate the hotel on its completion; and
WHEREAS, Sonesta has agreed to loan up to $4,150,000 to Skip
Properties in connection with the hotel project, subject to the terms and
provisions set forth herein.
NOW THEREFORE, for consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
I. Definitions. Capitalized terms used in this Agreement which are defined in
that certain "Management Agreement", of even date, between the parties, shall
have the same meaning in this Agreement unless a contrary meaning is
specifically set forth. In addition, as used herein:
1.1 "Advance" shall mean an advance of the Loan from Sonesta to Skip
Properties under this Agreement.
1.2 "Events of Default" shall have the meaning set forth in Section VI.
1.3 "Interest Rate" shall mean the interest rate agreed to by both
parties which is the "Prime Rate" charged by United States Trust Company,
Boston, Massachusetts (or such other U.S. banking institution as the parties
shall agree upon), plus one (1) percentage point. ("Default Interest Rate" shall
mean the Interest Rate, plus four (4) percentage points.)
1.4 "Loan" shall mean the aggregate principal amount of Four Million
One Hundred Fifty Thousand Dollars ($4,150,000.00) which Sonesta shall, if
requested by
Skip Properties, advance to Skip Properties as a loan under and subject to the
terms of this Agreement or, where the context may require, the amount thereof
then outstanding.
1.5 "Mortgage(s)" shall mean the mortgage(s) executed by Skip
Properties and delivered to Sonesta to secure Skip Properties' obligations under
the Promissory Note(s), which Mortgage(s) shall be in recordable form and
otherwise contain such terms and be in such form as the parties shall agree.
1.6 "Promissory Note(s)" shall mean the promissory note(s), the form of
which is attached hereto as Exhibit A, which shall be executed by Skip
Properties and delivered to Sonesta pursuant to subsection V (i), below.
II. Loan Advances, Application(s). Sonesta agrees to advance the Loan to (or on
behalf of) Skip Properties as follows:
1. $150,000.00 of the Loan shall be applied to compensate Xxxx
Xxxxx for architectural services pertaining to the Hotel, and
to compensate Sonesta International Hotels Corporation
("Sonesta International") for the design services of its Vice
President-Design, Xxxx Xxxx Xxxx, pertaining to the Hotel and
Condominiums.
2. $1,000,000 of the Loan shall be advanced to cover (i) the
Pre-Opening Fee ($150,000) payable to Sonesta International
under that certain "Development and Pre-Opening Services
Agreement", of even date, between Skip Properties and Sonesta
International, and (ii) $850,000 of Pre-Opening Expenses.
3. $3,000,000 of the Loan shall be advanced to Skip Properties as
described in subsection V (B) below.
III. Security for Commitment to Advance the Loan. If required by Skip
Properties, Sonesta shall evidence its commitment to advance the Loan by
providing to Skip Properties
(i) the written guaranty of Sonesta International;
(ii) a commercial letter of credit in favor of Skip Properties in
the face amount of not more than $3,000,000; or
(iii) such other evidence as the parties shall agree upon.
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All costs of providing such evidence shall be borne by Skip Properties, and Skip
Properties agrees to reimburse Sonesta promptly, but in any event within ten
(10) days of invoicing, for any and all costs Sonesta or Sonesta International
incurs in providing such evidence to Skip Properties, including without
limitation all costs and charges regarding the commercial letter of credit.
Skip Properties' ability to draw on any such letter of credit shall be
subject to the conditions set forth in subsections V(B) (x), (y), and (z),
below.
IV. Repayment of Loan. Skip Properties shall repay the Loan as follows: On the
first anniversary of the Commencement Date, and on each anniversary thereof,
Skip Properties shall pay Sonesta one tenth (1/10) of the Loan, together with
all interest accrued to that date at the Interest Rate. Any unpaid and
outstanding portion of the Loan, and any unpaid interest, shall be payable to
Sonesta on the tenth (10th) anniversary of the Commencement Date.
Notwithstanding the foregoing, if the Annual Profit and Loss Statement
(as defined in Section 4.1 of the Management Agreement) for any Calendar Year
(or Fractional Year) indicates that Gross Operating Profit for that year
exceeded $2,633,333--so that Skip Properties was entitled to receive $2,400,000
from the Hotel operation ("Owner's Return" ($1,700,000), plus 75% of Cash
Flow)--fifty percent (50%) of such Gross Operating Profit in excess of
$2,633,333 shall be applied to reduce the Loan in addition to the regular annual
payments provided for in the preceding paragraph.
Any payments Sonesta receives from (or on behalf of) Skip Properties in
repayment of the Loan shall be applied first to costs and expenses due
hereunder, then to outstanding interest, and then to principal.
Sonesta, as Operator, shall be entitled to pay itself amount(s) due and
owing on account of the Loan out of amounts otherwise distributable to Skip
Properties, as Owner, under the Management Agreement.
Notwithstanding any other provision herein to the contrary, unless Skip
Properties shall have paid to Sonesta all accrued interest on those portions of
the Loan described in subsections II 1 and 2, above ("Pre-Opening Interest
Accrual")_, on or before the date Sonesta funds that portion of the Loan
described in subsection
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II 3, above, the Pre-Opening Interest Accrual shall be added to the principal of
the loan as of the Commencement Date.
V. Conditions to Advances. Notwithstanding any provision herein to the contrary,
(A) Sonesta shall have no obligation to advance those portions of the Loan
described in subsection II, 1 and 2, above ($150,000 and $1,000,000,
respectively), unless and until the following conditions have been satisfied:
(i) Skip Properties has properly executed and delivered to Sonesta
the Promissory Note(s) in the amount of $1,150,000 and, if
requested by Sonesta, the Mortgage(s) to secure such
Promissory Note(s), which Mortgage(s) shall be subordinate to
institutional construction financing;
(ii) Skip Properties has delivered to Sonesta such evidence of
corporate authorization and enforceability as Sonesta may
reasonably require; and
(iii) the Hotel and Condominium are (a) actively under
construction/renovation, and (b) expected to be completed
within twelve (12) months; and
(B) Sonesta shall have no obligation to advance that portion of the Loan
described in subsection II 3, above, unless and until (x) the Hotel and
Condominium have been fully constructed and the Commencement Date has occurred
under the Management Agreement, (y) all costs and expenses in connection with
creating the Hotel and Condominium have been paid and lien waivers have been
obtained from all contractors, subcontractors, and suppliers, and copies thereof
have been provided to Sonesta, and (z) Skip Properties has executed and
delivered to Sonesta the Promissory Note(s) in the amount of $3,000,000,
Mortgage(s), and the Mortgage(s) when recorded will not be subordinate to any
other mortgage, lien, or other encumbrance intended to secure any obligation of
Skip Properties (or any of its Affiliates) except Mortgage(s) granted to Sonesta
in accordance with this Agreement.
VI. Default/Acceleration. Sonesta shall have no obligation to make any Advances
of the Loan to Skip Properties, and any outstanding portions of the Loan,
together with interest thereon, shall be immediately due and payable to Sonesta
in the event of any of the following ("Events of Default"):
(1) the termination, for any reason, of the Management Agreement;
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(2) a default by Skip Properties in performing any of its
obligations under any agreement between Skip Properties (or
any of its Affiliates) and Sonesta (or any of its Affiliates)
which remains outstanding fifteen (15) days after written
notice to Skip Properties (or such longer time as may be
required using all due diligence, but in no event exceeding
thirty (30) days in the aggregate ); or
(3) any circumstance which, in Sonesta's reasonable judgment,
makes it appear likely that Skip Properties will not be able
to repay the Loan as contemplated hereunder, which
circumstance continues fifteen (15) days after written notice
to Skip Properties (or such longer time as may be required
using all due diligence, but in no event exceeding thirty (30)
days in the aggregate).
Upon the occurrence of an Event of Default, interest shall accrue on the Loan at
the Default Interest Rate until the Loan, and all accrued interest, is paid to
Sonesta in full.
VII. Miscellaneous
7.1 Notices. All notices, demands, consents and other communications
which any party is required or may desire to give to or made upon the other
party or parties hereunder shall be in writing and signed by the party giving
same, and shall be delivered personally (upon an officer, general partner or
officer of a general partner of the other party if such party is not an
individual or to such individual as may be noted in the addresses stated below)
to the other party or parties, sent by overnight courier (i.e. Federal Express,
DHL, etc.), or sent by certified or registered mail of the United States Postal
Service return receipt requested, postage prepaid, addressed to the other party
or parties as follows (or to such other address or person as either party or
person entitled to notice may by notice to the other specify):
To Skip Properties:
Skip Properties N.V.
c/o Sasson Management Corp.
00000 X.X. 0xx Xxxxxx
Xxxxx, Xxxxxxx 00000
With copies concurrently delivered to:
Xx. Xxxxx Xxxxxx
00000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxxx, Xxxxxxx 00000
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Xx. Xxxxxxx Xxxxx
00000 Xxxxxxx Xxxxxx, Xxx. 0000
Xxxxx Xxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxxxx, Esq.
0000 XxXxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
To Sonesta Hotels:
Sonesta Hotels of Florida, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Office of the Treasurer
With a copy concurrently delivered to:
Xxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Unless otherwise specified, notices shall be deemed given when received, but if
delivery is not accepted, on the earlier of the date delivery is refused or the
third day after the same is deposited with the United States Postal Service.
7.2 Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of Florida.
7.3 Modification. This Agreement may not be changed, waived, discharged
or terminated orally, but only by an instrument or instruments in writing,
signed by all parties hereto.
7.4 Headings. Article and Section headings are inserted for convenience
of reference only, and are in no way to be construed as part hereof or as a
limitation on the scope of the particular provisions to which they refer.
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7.5 Promissory Note and Mortgage. The Promissory Note and/or Mortgage
shall contain any of the provisions of this Agreement that either party may
request.
IN WITNESS WHEREOF, the parties have set their hands and seals as of
the date first-above written.
SKIP PROPERTIES N.V.
By its Managing Directors
/s/ Xxxxxxx Xxxxx
Attest:__________________ By: _____________________________
Xxxxxxx Xxxxx
Title: Managing Director
/s/ Xxxxx Xxxxxx
Attest: _________________ By: _____________________________
Xxxxx Xxxxxx
Title: Managing Director
SONESTA MIAMI BEACH HOTEL
COMPANY, INC.
/s/ ????????????? /s/ Xxxxx X. Xxxxxxxxx
Attest:_________________ By: ______________________________
Assistant Secretary Xxxxx X. Xxxxxxxxx
Sonesta International Title: Vice President
Hotels Corporation
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EXHIBIT A
MORTGAGE NOTE
$________________ Miami Beach, Florida
As of ______________, 1997
FOR VALUE RECEIVED, the undersigned, SKIP PROPERTIES N.V., a Netherlands
Antilles company ("Maker"), hereby promises to pay to the order of SONESTA MIAMI
BEACH HOTEL COMPANY, INC., a Florida corporation ("Payee"), its successors and
assigns, c/o Sonesta International Hotels Corporation, at 000 Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other place as the holder of this
Mortgage Note (the "Note") may from time to time designate in writing, in lawful
money of the United States of America, the principal sum of ____________________
($__________________), with interest thereon as follows:
1. Subject to the provisions of Paragraph 2 hereof, the unpaid principal
balance of this Note and all accrued and unpaid interest shall bear interest
from the date of funding at the floating rate which is at all times equal to the
announced "prime" or "base lending rate" of United States Trust Company, Boston,
Massachusetts, or its successors (as announced by said bank, the "Prime Rate"),
plus one (1) percentage point. The parties hereto acknowledge that the Prime
Rate is a rate for reference purposes and is not necessarily the most favorable
rate available from such bank. The interest rate hereunder shall change
effective on the same day as any changes in the Prime Rate. Interest shall
compound monthly on the last day of each month. The entire unpaid principal
balance of this Note together with all accrued but unpaid interest thereon and
any unpaid late charges, if not sooner paid, shall be due and payable on the
tenth (10th) anniversary of the "Commencement Date" (as such term is defined in
that certain Management Agreement, dated July __, 1997, by and between Maker, as
"Owner", and Payee, as "Operator" (the "Maturity Date").
2. Principal and interest shall be due and payable in annual installments
(individually, an "Installment Payment") commencing on the first anniversary of
the Commencement Date and on each succeeding anniversary of the Commencement
Date ("Payment Date") as follows: The Installment Payment due on each Payment
Date shall be equal to one tenth (1/10th) of the then outstanding principal
balance of this Note.
3. In addition to the payment(s) due on the Payment Date set forth in
Paragraph 2 hereof, Maker shall also pay to Payee, on the date which is five (5)
business days after Maker's receipt from Payee of an unaudited financial
statement (the "Unaudited Statement") showing the profit or loss of the
operations of the Mortgaged Property (hereinafter defined) for the
calendar year immediately preceding such Payment Date, together with the
calculation of Gross Operating Profit, an amount equal to fifty percent (50%) of
Gross Operating Profit for such calendar year in excess of $2,633,333. Each
payment made by Maker pursuant to the Unaudited Statement shall be subject to
adjustment as follows: (i) if the Annual Profit and Loss Statement for the
Mortgaged Property (issued by Payee to Maker pursuant to Section 4.1 of the
Management Agreement) for the period covered by the Unaudited Statement shall
indicate that Maker has underpaid the Installment Payment, Maker shall pay the
deficiency to Payee within five (5) business days after Maker's receipt of
the Annual Profit and Loss Statement; and (ii) if, however, such Annual
Profit and Loss Statement shall indicate that Maker has overpaid the Annual
Installment, Payee shall pay the amount of the overpayment to Maker within five
(5) business days after Maker's receipt of the Annual Profit and Loss Statement.
4. This Note may be prepaid in whole or in part at any time and from time
to time without penalty.
5. Any payments Payee receives from or on behalf of Maker on account of
amounts due under this Note shall be applied first to costs and expenses due
hereunder, then to outstanding interest, and then to principal.
6. This Note is secured by a Mortgage and Security Agreement (the
"Mortgage") of even date herewith executed and delivered by Maker to Payee
encumbering certain real estate and property therein described (the "Mortgaged
Property"), located in the city of Miami Beach, Dade County, State of Florida.
7. The entire unpaid principal balance of this Note and all accrued but
unpaid interest thereon shall become immediately due and payable, at the option
of Payee, upon the earliest to occur of any of the following events
("Acceleration Events"):
(a) the occurrence of an Event of Default (as defined in the Mortgage);
(b) the termination of the Management Agreement by the "Owner" or
"Operator" thereunder; or
(c) a sale or conveyance of all or substantially all of the Mortgaged
Property ("Sale"), including, without limitation, a sale of all or any portion
of the Mortgaged Property as a condominium, interval ownership or time sharing
unit or a sale or conveyance of the Mortgaged Property by foreclosure sale or
deed in lieu thereof.
Delay or failure to exercise the foregoing option with respect to any
Acceleration Event shall not constitute a waiver of the right to exercise the
same with respect to that or any subsequent Acceleration Event.
8. Should default in the payment of any Installment Payment due hereunder
continue beyond fifteen (15) days from the due date of such payment, Maker shall
pay a late charge to compensate Payee for the added expense and inconvenience
incurred by Payee and caused by such delay in payment. It is acknowledged by
Maker and Payee that the actual amount necessary to adequately compensate Payee
in such case would be impractical and extremely difficult to calculate. Maker
and Payee therefore agree that the amount of such late charge shall be two
percent (2%) of the amount of such late payment. Upon the occurrence of an
Acceleration Event, and during the continuance thereof, the interest rate
applicable to the entire unpaid principal balance of this Note shall be the
interest rate described in Section 1, above, plus four (4) percentage points.
9. Except as expressly provided for the Mortgage, Maker hereby waives
presentment for payment, demand, protest, notice of protest or dishonor, notice
of acceleration of maturity, and all defenses on the ground of extension of time
for the payment hereof, and agrees to continue and remain bound for the payment
of principal, interest and all
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other sums payable hereunder notwithstanding any change or changes by way of
release, surrender, exchange, or substitution of any security for this Note or
by way of any extension or extensions of time for the payment of principal and
interest. The rights and remedies of the holder as provided herein or in the
Mortgage shall be cumulative and concurrent and may be pursued singularly,
successively or together at the sole discretion of the holder, and may be
exercised as often as occasion therefore shall occur.
10. Nothing herein contained, nor any transaction related thereto, shall
be construed or so operate as to require Maker to pay interest at a greater rate
than the maximum allowed by applicable law. Should any interest or other charges
paid or payable by Maker in connection with this Note or any other document
delivered in connection herewith, result in the computation or earning of
interest in excess of the maximum allowed by applicable law, then any and all
such excess shall be and the same is hereby waived by Payee or the then holder
hereof, and any and all such excess paid shall be automatically credited against
and in reduction of the balance due under this Note, and the portion of such
excess which exceeds the balance due under this Note shall be paid by Payee or
the then holder hereof to Maker.
11. All notices and other communications between the parties under this
Note shall be deemed to have been properly given and shall be effective if
delivered in accordance with the provisions of the Mortgage.
12. As used herein, the terms "Maker" and "Payee" shall be deemed to
include their respective successors and assigns, whether by voluntary action of
the parties or by operation of law.
13. If this Note is placed in the hands of an attorney for collection,
Maker hereby agrees to pay the holder hereof in addition to the sums above
stated, all costs of collection, including reasonable attorneys' fees and other
legal costs.
14. Neither this Note nor the method set forth herein for the computation
and payment of interest is intended to create, nor shall be construed as
creating, a partnership, joint venture or any other relationship between Maker
and Payee other than that of the debtor and creditor.
15. This Note shall be governed by and construed in accordance with the
laws of the State of Florida.
IN WITNESS WHEREOF, Maker has executed this Note as of the day and year
first above written.
SKIP PROPERTIES N.V.
By its Managing Directors
/s/ Xxxxx Xxxxxx
By: ____________________________________
Authorized Signatory: Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxx
By: ____________________________________
Authorized Signatory: Xxxxxxx Xxxxx
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