AGREEMENT
Reference is made to that certain "Purchase and Sale Agreement", dated as
of November 10, 1995, by and between Casablanca Resorts Development of Anguilla
Ltd. ("CRDAL"), as "Seller", and Sonesta Hotels of Anguilla, Ltd. ("Sonesta"),
as "Purchaser", (together with the Exhibits attached thereto, the "P&S"), as
subsequently modified by that certain "Agreement", dated as of November 1995, by
and between CRDAL and Sonesta (the "Agreement") (the P&S and Agreement shall
hereafter together be referred to as the "CRDAL/Sonesta Agreement"). This
agreement is intended to amend certain provisions of the CRDAL/Sonesta
Agreement.
WHEREAS, under the provisions of Section 2.2 of the P&S, CRDAL agreed to
reduce the "Purchase Price" by offsetting against the Purchase Price the
amount(s) of costs and expenses described in subsections (i), (ii) and (iii) of
said Section 2.2; and
WHEREAS, pursuant to Section 1 of the Agreement, CRDAL and Sonesta agreed
to defer implementation of the offset described in Section 2.2 of the P&S, and
agreed that CRDAL would instead pay such amounts to Sonesta from the first
business interruption and/or rental value proceeds received by CRDAL; and
WHEREAS, CRDAL received U.S. $450,000 of rental value proceeds in December
1995, but has not paid any of such funds to Sonesta--CRDAL having represented to
Sonesta that such funds were used to repair and restore the Resort (as defined
below)--and CRDAL currently owes Sonesta approximately U.S. $400,000 pursuant to
Section 2.2 of the P&S ("Expense Reimbursement"); and
WHEREAS, pursuant to Section 2.2 (B) of the P&S, Sonesta is obligated to
pay U.S. $500,000 to CRDAL on or before March 1, 1996 ("March 1 Payment"),
however the parties acknowledge that it would not be fair or appropriate for
Sonesta to pay said March 1 Payment to CRDAL while CRDAL continued to owe the
Expense Reimbursement to Sonesta, unless the parties amended their existing
agreements;
NOW THEREFORE, for consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree to amend their existing agreements as
follows:
1. March 1 Payment. Upon the execution of this Agreement, Sonesta shall pay the
March 1 Payment to CRDAL, without offset or reduction.
2. Assignment of Business Interruption Claim. Upon the execution of this
Agreement, CRDAL shall execute such form(s) of assignment and related
documentation as Sonesta may require in order to effect an assignment of all
interests CRDAL may have to any and all business interruption claims (whether
asserted or unasserted), and business interruption proceeds, for the period of
September 5, 1995 through February 29, 1996, pertaining to the operation of
Casablanca Resort, Anguilla (now Sonesta Beach Resort Anguilla) (the "Resort").
Any such business interruption proceeds for the period stated above that are
actually paid to Sonesta shall
be credited towards the Expense Reimbursement, and all such funds in excess of
the Expense Reimbursement shall, promptly following receipt by Sonesta, be paid
to CRDAL.
3. Reduction of $1 Million Loan; Interest Rate. Until such time as the full
amount of the Expense Reimbursement has been paid to Sonesta, the One Million
Dollars ($1,000,000) referenced in Section 2.2 (C) of the P&S shall be reduced
to Six Hundred Thousand Dollars ($600,000). This adjustment shall have effect
retroactive to November 28, 1995. In the event that the aggregate business
interruption proceeds that are finally determined to be payable with respect to
the period of September 5, 1995 through February 29, 1996, if any, and which are
actually paid to Sonesta (per Section 2 above), total less than the full amount
of the Expense Reimbursement (the "BI Deficiency"), the amounts payable by
Sonesta to CRDAL under Section 2.2 (C) of the P&S shall be deemed to have been
reduced dollar for dollar by the amount of the BI Deficiency and CRDAL shall not
thereafter be responsible for payment of the outstanding balance of the Expense
Reimbursement. Upon Sonesta's receipt of such business interruption proceeds
equal to the full amount of the Expense Reimbursement, the amount referenced in
said Section 2.2(C) of the P&S shall be increased to $1,000,000. The interest
rate applicable to the amounts due from Sonesta to CRDAL, referenced above,
shall remain 8% per annum.
4. Advances for Villa Construction Costs. Until such time as the full amount of
the Expense Reimbursement has been received by Sonesta, the provisions of
Section 4 of that certain "Agreement", dated November 30, 1995 and attached as
"Exhibit A" to the P&S--providing for up to $300,000 of advances by Sonesta to
Kamal and Xxxxxx Xxxxxxxxx--shall be deemed null and void. Sonesta shall have no
obligation to make such advances until it has received the full amount of the
Expense Reimbursement.
5. CRDAL and Sonesta Acknowledgments. CRDAL and Sonesta hereby acknowledge and
reaffirm the following matters which are part of their on-going agreements:
(i) CRDAL is responsible for all of the costs, expenses and charges
referenced in Section 2.2 (iii) of the P&S--including without
limitation, all payroll and benefits costs incurred by Sonesta in
connection with the Resort from November 28, 1995 through March 1,
1996, without set-off or reduction. (Sec. 2.2(y) of the P&S)
(ii) The Resort's mechanical, plumbing and electrical systems, including
without limitation the sewage plant, sewage system, water desalination
plant, water system, air-conditioning system, laundry and kitchen
systems were supposed to be fully operational and performing up to 90%
of design specifications when Sonesta acquired the Resort, and if any
such systems did not meet this standard, CRDAL is responsible for the
costs of bringing them to this standard. (Sec. 5.1.5 of the P&S)
(iii)The parties are aware that certain vendor(s) and others who did
business with the Resort prior to Sonesta's acquisition of the Resort
on November 28, 1995 have claimed that they did so in exchange for
rooms and/or services at the Resort; the
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parties agree that as between CRDAL and Sonesta, Sonesta is not
responsible for such claims. (Secs. 5.1.6 and 6.7.2 of the P&S)
The above acknowledgments and reaffirmations are not intended to limit or waive
any other outstanding obligation or the performance of any other term,
provision, covenant or commitment by either party, or in any way imply that the
above matters are any more important or have greater precedence than any other
between the parties, and are set forth solely for the purpose of clarification.
6. Estoppel. CRDAL hereby acknowledges and avers that it is not aware of any
breach, default or non-performance by Sonesta (or its affiliates) under any
agreement to which CRDAL and Sonesta are parties.
7. Other Provisions Unaffected. The provisions of this agreement are intended to
amend only those provisions of the P&S, the Agreement, and the "Agreement"
attached as "Exhibit A" to the P&S to which they specifically apply. All other
provisions of said P&S, Agreement and "Agreement" not specifically amended by
this agreement shall remain unchanged and in full force and effect.
8. Opportunity to Review/No Duress. The parties agree and acknowledge that both
of them had the opportunity to review this agreement, prior to signing, with
legal counsel of their choice and, further, agree and acknowledge that they have
signed this agreement willingly and without duress.
9. No Assignment. CRDAL warrants and represents that it has not previously
assigned any right, benefit or interest under the P&S or the
Agreement--including without limitation its interest in the business
interruption claim referenced in Section 2 above--to any party other than
Sonesta.
10. Right of Offset. Notwithstanding that Section 6.14 of the P&S has survived
(pursuant to Section 11.15 of the P&S) and continues to apply, the parties
hereby reiterate that, in addition to any other rights it may have, Sonesta may
offset against its payment obligations under Section 2.2 of the P&S any costs,
expenses or liabilities (contingent or actual) resulting from any claim, action,
demand or liability against CRDAL, including without limitation any liability,
costs and expenses Sonesta (or its affiliates) incurs in connection with CRDAL's
termination of its agreement(s) with Xxxxxxxx X. Resorts Ltd.
11. Miscellaneous. The following sections of the P&S are hereby incorporated
herein by reference: 11.1, 11.2, 11.3, 11.5 ("Purchaser" deemed to refer to
Sonesta, "Seller" deemed to refer to CRDAL), 11.8, 11.9, 11.1, and 11.12.
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IN WITNESS WHEREOF, CRDAL and Sonesta have executed this Agreement on the
date(s) set forth below, effective as of March 1, 1996.
March , 1996 SONESTA HOTELS OF ANGUILLA, LTD.
---
By: /S/
-----------------------------------------
Printed name:
--------------------------------
Its:
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March , 1996 CASABLANCA RESORTS DEVELOPMENT OF
--- ANGUILLA LIMITED
By: /S/
-----------------------------------------
Printed name:
--------------------------------
Its:
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The undersigned hereby execute this agreement in order to (i) acknowledge and
agree to their continuing joint and several personal guaranty(ies) of CRDAL's
obligations under the P&S, the Agreement, and this agreement and (ii)
acknowledge their agreement to the provisions of Section 4 of this agreement.
March , 1996 /S/
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Kamal Alsultany
March , 1996 /S/
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Xxxxxx Xxxxxxxxx
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