June 3, 1996
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Amsterdam Sonesta Corporation
c/o Sonesta International Hotels Corporation
000 Xxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxx, Xxxxxxxxxxxxx 00000
RE: Lease of Sonesta Beach Anguilla
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Gentlemen:
This will confirm our agreement that Amsterdam Sonesta Corporation ("Tenant")
will be leasing the resort operation known as Sonesta Beach Resort Anguilla
("Resort") from Sonesta Hotels of Anguilla, Ltd. ("Landlord"), pursuant to the
following terms:
1. Term. The Lease will commence July 1, 1996 and continue for a period of
five (5) years, terminating June 30, 2001. Tenant shall have the right to
extend the term of the Lease for consecutive periods of one (1) year each,
provided it gives written notice to Landlord no less than one hundred
eighty (180) days prior to the date the Lease would otherwise expire.
2. Rent. Tenant shall pay Landlord the following as rent:
(i) "fixed rent" in the amount of One Million Two Hundred Thousand
Dollars ($1,200,000.00) per year; such rent to be payable in
monthly installments of One Hundred Thousand Dollars
($100,000.00);
(ii) "capital reserve rent" equal to three (3) percent of Hotel
revenues, which amount will be utilized by the parties for
additions and replacements of FF&E for the Hotel, which amount
shall be paid monthly on or before the tenth (10th) day of each
month with respect to the previous month; and
(iii) "percentage rent" equal to thirty percent (30%) of cash flow; cash
flow shall mean net income before interest expense, depreciation,
amortization, and income taxes, but after deducting fixed rent and
capital reserve rent.
3. Improvements/Expansion. Landlord shall be responsible for completing
the improvements/expansion program described on "Exhibit A" attached
hereto.
In the event Landlord pays for any additional improvements and/or expands the
Resort other than is set forth on "Exhibit A", Xxxxxx agrees to pay increased
fixed rent equal to 8% of such additional costs per year.
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4. Assumption of Assets/Liabilities. Tenant agrees to acquire Xxxxxxxx's
current assets and assume its liabilities, used in the operation of the
Resort, as of July 1, 1996. This will include all cash on hand,
inventories, receivables, prepaid expenses, accounts payable and accrued
expenses.
5. Responsibility for Expenses. Tenant shall be responsible for all
expenses related to the Resort operation, which expenses shall be
determined pursuant to the Uniform System of Accounts for Hotels (1986)
excluding: interest, depreciation and amortization, and land rent. Tenant
shall also be responsible for the payment of property insurance and
liability insurance.
6. Business Interruption Claim. As part of the consideration for Tenant's
agreement to pay the rent stipulated above, Landlord shall assign to
Tenant, effective as of July 1, 1996, all of its rights, title and
interest in and to the business interruption insurance claim which
Landlord has filed with Ennia Caribe, pertaining to damage from Hurricane
Xxxx in September 1995.
Kindly indicate your consent to the above terms below. Your signature
shall indicate a binding commitment to lease the Resort from Landlord in
accordance with the terms of this letter.
Sonesta Hotels of Anguilla, Ltd.
by:/s/
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Xxxxx X. Xxxxxxxxx
Director
The Above Terms are Acknowledged and Agreed to
By Amsterdam Sonesta Corporation
By:/s/
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Boy xxx Xxxx
Vice President and Treasurer
Date: June __, 1996
