LOAN AGREEMENT
EXHIBIT
10.34
This
LOAN AGREEMENT (further:
"Agreement") is made and entered into by and between
1. SONESTA
LICENSING CORPORATION, established and holding offices in the USA,
further to be called "Lender", represented by its managing-director a/o
president a/o vice-president,
and
2. The
limited liability company ST. MAARTEN RESORT HOTEL & CASINO N.V.,
established and holding offices on St. Maarten, further to be called “Borrower”
and represented by its managing-director.
WHEREAS:
Lender
and St. Maarten Resort Hotel & Casino N.V. have on or about this date
entered into a “First Amendment” to the existing License Agreement between them,
dated October 18, 2006, pursuant to which First Amendment the existing License
Agreement regarding Sonesta Great Bay Resort & Casino (“Sonesta Great Bay”)
will be extended for a term of 10 years, unless one of the parties exercises its
right of earlier termination pursuant to said First Amendment; and
In
connection with the abovementioned First Amendment, Lender agrees to provide a
loan to Borrower under the following conditions and stipulations:
IT IS MUTUALLY AGREED UPON
AS FOLLOWS:
WITNESSETH:
Article
1 Loan
amount/Purpose
Upon
execution of documentation deemed satisfactory by both parties, Lender agrees to
lend to Borrower the amount of US$ 300,000 (Three Hundred Thousand US Dollars),
further called “the Loan”. The Loan shall be used solely for the
purpose of upgrading and improving Sonesta Great Bay (the “Hotel”) which
upgrades and improvements are specified in “Schedule A”, which is incorporated
herein by reference. The Loan shall be funded by Lender to Borrower
in accordance with the schedule attached to this Agreement as “Schedule B”,
which is incorporated herein by reference.
Article
2 Interest
Sums
advanced under the Loan shall accrue interest from the dated advanced. The
interest rate applicable to the Loan shall be the one-year LIBOR rate (as
measured on January 1 of each License Year, as defined in the License
Agreement), plus:
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1.5%
if the annual “Gross Guestroom Revenue” (as defined in the License
Agreement) for the Hotel is either less than the Gross Guestroom Revenue
for the Hotel for the prior License Year, or is equal to or exceeds the
Gross Guestroom Revenue for the Hotel for the prior License Year, and such
excess is not more than 3.5%
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1%
if the annual Gross Guestroom Revenue for the Hotel is equal to or exceeds
the Gross Guestroom Revenue for the Hotel for the prior License Year, and
such excess is more than 3.5%, but not more than
7.5%
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Zero
(0) if the annual Gross Guestroom Revenue for the Hotel exceeds the Gross
Guestroom Revenue for the Hotel for the prior License Year by more than
7.5%
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Article
3 Repayment
Borrower
shall repay the Loan to Lender as follows: Interest payments shall be
made quarterly on the last day of each calendar quarter and the Interest Rate
shall be based on LIBOR. When Borrower’s annual financial statements
are prepared and provided to Lender, pursuant to subsection 6.4.b., the parties
shall agree on the applicable interest rate based on Article 2, above, and any
interest owed to Lender in addition to LIBOR previously paid shall be paid by
Borrower on or before the 90th day
after the Borrower’s fiscal year end.
Principal
payments in the amount of U.S. $30,000 shall be made on or before March 31 of
each calendar year, with the first payment being due on or before March 31,
2011.
The Loan
shall mature on the earlier of December 31, 2019, or the termination of the
License Agreement.
Article
4 Capital
Expenditures
Borrower
represents and warrants to Lender that “Schedule C” attached hereto accurately
reflects the amounts spent on capital additions and replacements to Sonesta
Great Bay during the period 2005 through year to date 2009 (exclusive of
revenues and capital additions and replacements regarding the
casino).
Article
5 Warranties
As an
inducement to Lender to provide the Loan, Borrower hereby warrants and
represents the following:
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5.1.
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Borrower
is a limited liability company, duly organized, validly existing and in
good standing under the laws of the Netherlands Antilles and it has all
requisite power and authority to execute and deliver this
Agreement.
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5.2
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Other
than the consent of the Central Bank of the Netherlands Antilles (“CBNA”),
no consent of any person and no consent, license, approval or
authorization of or registration or declaration with any governmental
body, authority, bureau or agency is required in connection with the
execution and delivery of this Agreement. Borrower shall obtain
the written consent of the CBNA and provide a copy of such consent to
Lender prior to any funding of the
Loan.
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5.3.
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Neither
the execution and delivery of this Agreement, the consummation of the
transactions contemplated therein, nor compliance by Borrower with this
Agreement will conflict with or result in a breach of any of the terms,
conditions or provisions of any law, regulations, order, writ, injunction
or decree of any court or governmental
instrumentality.
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5.4.
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There
are no actions, suits or proceedings pending, or to the knowledge of
Borrower threatened, against or affecting Borrower, or involving the
validity or enforceability of this Agreement, and there are no actions,
suits or proceedings pending or, to the knowledge of Borrower, threatened
against or affecting Borrower which could have a material adverse affect
on the ability of each or any of such parties to perform their respective
obligations under this Agreement; and further, no event has occurred which
will violate, be in conflict with, result in the breach of or constitute
(with due notice or lapse of time, or both) a default under, any
applicable law or regulation or result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever upon any of
Borrower’s property other than the lien and security interest created by
this Agreement.
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5.5.
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Borrower
is solvent, is not bankrupt and has no outstanding liens, suits,
garnishments, bankruptcies or court actions that could render Borrower
insolvent or bankrupt. There has not been filed by or against
Borrower a petition in bankruptcy, reorganization, liquidation or
dissolution. All reports, statements and other data or applications for
credit supplied to Lender by or on behalf of Borrower prior to or
subsequent to the execution of this Agreement are true and correct in all
material respects and do not omit to state any fact or circumstance
necessary to make the statements contained therein not
misleading. Any and all financial statements and applications
for credit have been prepared in accordance with generally accepted
accounting principles consistently applied, and fully and accurately
present the financial condition of the subject thereof as of the date
thereof and no material adverse change has occurred in the financial
condition reflected therein since the respective dates
thereof.
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5.6.
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Borrower
is not in default with respect to any order, writ, injunction, decree or
demand of any court or any Government Authority, or in the payment of any
indebtedness for borrowed money or under the terms or provisions of any
agreement or instrument evidencing or securing any such
indebtedness.
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5.7.
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Borrower
has filed all tax reports and returns required by any law or regulation to
be filed by it, including, without limitation, any and all payroll taxes,
and has either duly paid all taxes, duties and charges indicated due on
the basis of such returns and reports, or made adequate provision for the
payment thereof, and the assessment of any material amount of additional
taxes in excess of those paid and reported is not reasonably
expected.
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Article
6 Access
to information
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6.1.
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Borrower
shall maintain its books and records in accordance with generally accepted
accounting principles, applied on a consistent basis, and shall permit
Lender to visit its hotel properties and installations to examine, audit
and make and take away copies or reproductions of Borrower’s books and
records, at all reasonable times. Further, Borrower shall furnish Lender
with such additional information and statements, lists of assets and
liabilities, tax returns, and other reports with respect to Borrower’s
financial condition and business operations as Lender may request from
time to time.
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6.2.
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Lender
may (but shall not be obligated to) commence, appear in or defend any
action or proceeding purporting to affect the loan or the respective
rights and obligations of Lender and Borrower pursuant to this
Agreement. Lender may (but shall not be obligated to) pay all
necessary expenses, including reasonable attorneys' fees and expenses,
incurred in connection with such proceedings or actions, which Borrower
agrees to repay to Lender upon
demand.
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6.3.
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Borrower
shall pay and discharge when due all of its indebtedness and obligations,
including without limitation, all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower
or its hotel properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s hotel properties, income,
or profits.
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6.4.
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Borrower
shall provide Lender:
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a.
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As
soon as available, and in any event within thirty (30) days after the end
of each calendar quarter, financial statements of Borrower, including, but
not limited to, a balance sheet and income statement of Borrower as of the
end of such quarter, all in form and substance and in reasonable detail
satisfactory to Lender and duly certified by the president or managing
director of Borrower (i) as being true and correct in all material aspects
to the best of his or her knowledge and (ii) as having been prepared in
accordance with generally accepted accounting principles, consistently
applied;
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b.
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As
soon as available, and in any event within ninety (90) days after the end
of the fiscal year of Borrower, financial statements of Borrower,
including, but not limited to, a balance sheet and income statement of
Borrower as of the end of the preceding fiscal year, , all in form and
substance and in reasonable detail satisfactory to Lender and duly
certified by the president or managing director of Borrower (i) as being
true and correct in all material aspects to the best of his or her
knowledge and (ii) as having been prepared in accordance with generally
accepted accounting principles, consistently applied; said president or
managing director shall also certify to Lender that all tax returns due as
of that date have been duly filed and those returns not yet due shall be
filed in a timely manner.
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c.
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Notice
of (i) any and all material adverse changes in Borrower’s financial
conditions, and (ii) all claims made against Borrower that could
materially affect the financial condition of
Borrower;
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d.
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Upon
demand of Lender, evidence of payment of all assessments,
taxes,
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charges,
levies, liens and claims on or against Borrower’s properties, income or
profits, and authorize the appropriate governmental official to deliver to
Lender at any time a written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower’s properties, income or profits;
and such other information respecting the business, properties or
condition or the operations, financial or otherwise, of Borrower as Lender
may from time to time reasonably
request.
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Article
7
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Negative
warranties
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Until
the Loan and all other obligations and liabilities of Borrower under
this Agreement are fully paid and satisfied, Borrower will not,
without the prior written consent of Lender: (a) make any material change
in the nature of its hotel business as carried on as of the date hereof;
(b) liquidate, merge or consolidate with or into any other entity; (c)
sell, transfer or otherwise dispose of any of its hotel (and/or related)
assets or properties; (d) create, incur or assume any lien or encumbrance
on any of its hotel (and/or related) assets or properties, except as
specifically permitted under this Agreement; (e) change its address,
location, name, identity or corporate structure, (f) create, incur or
assume any indebtedness for borrowed money or issue or assume any other
note, debenture, bond or other evidences of indebtedness, or guarantee any
such indebtedness or such evidences of indebtedness of others, other than
(i) borrowings from Lender, (ii) borrowings outstanding on the date hereof
and disclosed in writing to Lender, and (iii) working capital loans and/or
loans for capital improvements that (A) do not exceed U.S. $500,000 per
year, and (B) are repaid in full for at least thirty (30) consecutive days
each year; or (g) permit the sale or other transfer of any ownership
interest in Borrower.
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Article
8
Indemnification
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Borrower
hereby agrees to indemnify, defend at its sole cost and expense and hold
Lender and its successors and assigns harmless from and against and to
reimburse Lender with respect to, any and all claims, demands, actions,
causes of action, losses, damages, liabilities, costs and expenses
(including without limitation attorney's fees and court costs) of any and
every kind of character, known or unknown, fixed or contingent, asserted
against or incurred by Lender at any time and from time to time by reason
of or arising out of (i) the breach of any representation or warranty of
Borrower set forth herein, and/or (ii) the failure of Borrower, in whole
or in part, to perform any obligation required in this Agreement to be
performed by Borrower.
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Article
9 Default
& remedies
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9.1
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The
occurrence of any one or more of the following shall constitute an Event
of Default hereunder:
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(a)
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A
failure of Borrower to pay the principal of or interest on the Loan as and
when the same becomes due and payable in accordance with the terms of this
Agreement, and such failure shall continue for a period of five (5) days
after receipt of written notice from Lender specifying such failure;
provided, however, that Lender shall be obligated to give only one (1)
such notice during any calendar year and, after the giving of such one
notice, Lender shall be entitled to exercise its remedies upon any
subsequent default occurring within such calendar year without any
requirement of notice.
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(b)
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A
failure of Borrower to perform any of the covenants, obligations or
agreements contained in this
Agreement.
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(c)
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Any
substantial damage to or destruction of or disappearance of Sonesta Great
Bay shall occur so that, in the reasonable opinion of Lender, it cannot be
restored or rebuilt with available funds to a profitable condition within
a reasonable period of time (not to exceed 270
days).
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(d)
The liquidation, termination, bankruptcy or dissolution of
Borrower.
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(e)
A writ or warrant of attachment or any similar petition shall be issued by
any court or other authority against all or any substantial portion of
Sonesta Great Bay.
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(f)
If there shall occur a material adverse change in the assets, liability,
financial condition or business operation of
Borrower.
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9.2
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In
the event of an occurrence of any Event of Default, Lender shall have the
right, at its option, without notice or demand upon Borrower (except as
expressly provided for herein or by applicable law) to do the following:
(a) declare the unpaid balance of the Loan (including all principal
thereof and all interest then accrued thereon) to be immediately due and
payable; (b) cease further advances under the Loan; and/or (c) enforce or
avail itself of any and all remedies provided in this Agreement and under
applicable laws.
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9.3.
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All
powers, rights and remedies of Lender set forth in this Agreement shall be
cumulative and not exclusive of any other power, right or remedy available
to Lender under this Agreement and the law to enforce the performance or
observance of the covenants and agreements contained in this
Agreement.
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Article
10 Miscellaneous
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10.1
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Each
written instrument required by this Agreement to be furnished to Lender
shall be furnished to Lender in one or more copies as required by Lender;
and shall in all respects be in form and substance satisfactory to Lender
and to its legal counsel.
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10.2.
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In
the event any provision of this Agreement is declared or adjudged to be
unenforceable or unlawful, then such unenforceable or unlawful provision
shall be excised therefrom, and the remainder of this Agreement so
affected, together with all rights and remedies granted thereby, shall
continue and remain in full force and effect as though such unlawful or
unenforceable provision had never been contained
therein.
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10.3
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No
course of dealing between Lender and Borrower, nor any delay on the part
of Lender in exercising any rights hereunder nor any failure of Lender at
any time to enforce any provision of this Agreement shall operate as a
waiver of any rights of Lender, except to the extent, if any, expressly
waived in writing by Lender. Lender shall have the right at any
and all times, without any prior notice to any person, to enforce strict
compliance with all of the provisions
hereof.
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10.4
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Any
notice, request or other communication required or permitted to be given
based on this Agreement shall be in writing and must be sent via
registered mail and/or courier to the following
addresses:
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If to the
Borrower: St.
Maarten Resort Hotel & Casino N.V.
Attn: Xxxx
Xxxxxxx
00 Xxxxxx Xxx Xxxx, XX Xxx
000
Xxxxxxxxxxx, Xx. Xxxxxxx
Xxxxxxxxxxx Antilles
If to the
Lender: Sonesta
Licensing Company
c/o Sonesta International Hotels
Corporation
Attention: Office of the
Treasurer
000 Xxxxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Each of
the parties hereto shall be entitled to specify a different address by giving
written notice to the other party hereto in accordance with this
section.
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10.5
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Borrower
shall pay all costs and expenses (including, without limitation,
reasonable attorneys' fees) in connection with (i) the preparation of this
Agreement, and any and all extensions, renewals, amendments, supplements,
extensions or modifications thereof, (ii) any action required in the
course of administration of the indebtedness and obligations evidenced by
this Agreement, and (iii) any action in the enforcement of Lender's rights
upon the occurrence of an Event of
Default.
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10.6
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This
Agreement will be governed by the laws of the State of New York, United
States of America. Any dispute that may arise out of this
Agreement shall be fully and finally resolved by arbitration
under the Commercial Rules of the Arbitration Association. In
the event of a dispute, one party shall so inform the other of its
demand. Any arbitration shall be administered by the New York,
New York office of the American Arbitration Association and all
arbitration hearings and proseachers shall be conducted in New
York. Either party shall apply to any court of competent
jurisdiction for an order confirming the arbitration award; judgment of
the court shall be entered upon the award unless the award is vacated,
modified or corrected as provided by law. The prevailing party
in any such proceeding shall be entitled to recover its reasonable costs
and attorney fees from the other
party.
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10.7
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This
agreement shall be binding upon the respective parties thereto, their
successors, heirs, representatives and
assigns.
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10.8
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Time
is of the essence regarding Borrower’s obligations under this
Agreement.
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LOAN
AGREEMENT - PAGE 9
EXECUTED
& SIGNED as of this 18th day of
December, 2009
LENDER:
SONESTA
LICENSING COMPANY
For
them,
By: /s/ Xxxxx X.
Xxxxxxxxx
BORROWER:
ST.
MAARTEN RESORT HOTEL & CASINO N.V.
For
them,
By: /s/ Xxxx
Xxxxxxx
LOAN
AGREEMENT - PAGE 10
