MANAGER ADVANCE AGREEMENT
This Manager Advance Agreement ("Agreement") is made and entered into
as of this 6th day of May , 1997, between Sonesta Louisiana Hotels Corporation,
a Louisiana corporation ("Manager") and 000 Xxxxx Xxxxxx Limited Partnership, a
Louisiana partnership in commendam ("Owner").
RECITALS:
A. Owner is the owner of the hotel operation known as Chateau Sonesta
Hotel, located in New Orleans, Louisiana (the "Hotel"), and Manager manages the
Hotel under a Management Agreement dated as of September 15, 1993.
B. Owner requires additional capital to construct meeting space within
the hotel (the "Improvements").
C. Manager is willing to advance funds as a loan to Owner on the terms
and conditions set forth herein for the construction of the Improvements, and to
guarantee in part the FNBC Loan, as hereinafter defined.
NOW THEREFORE, the parties agree as follows:
1. Loan and Guaranty. 1.1 Manager agrees to advance to Owner the sum of
$500,000.00 (the "Manager Advance") for the purpose of financing the
construction of the Improvements to the Hotel on the terms and conditions set
forth herein. The Manager Advance shall be represented by a promissory note
("Term Note") drawn by Owner in the amount of the Manager Advance, bearing
interest at Prime Rate (as defined in the Term Note) plus one percentage point,
payable in five equal annual installments, all as more fully set forth in the
Term Note. The Manager Advance shall be secured by a mortgage affecting the
Hotel, and Owner shall also furnish the guaranties of Xxxxxxx Pres Xxxxxxxx and
Xxxxxx X. Xxxxxxxx (the "Guarantors"). The proceeds of the Manager Advance shall
be deposited in a special account with First National Bank of Commerce (the
"Bank") for disbursement in accordance with the terms of a Loan Agreement
between the Bank and Owner.
1.2 On the terms and conditions set forth herein, Manager
shall also guarantee a portion of the debt service on a loan of up to $1,305,000
to be made by the Bank to Owner simultaneously with the Manager Advance, and
shall execute and deliver to the Bank a Commercial Guaranty ("Bank Guaranty"),
executed by Manager and Sonesta
International Hotels Corporation ("Sonesta"). The Bank Guaranty shall include
terms and conditions that are satisfactory in form and substance to Manager.
2. Conditions Precedent. Manager shall make the Manager Advance and
deliver the Guaranty upon fulfillment of all of the following terms and
conditions:
2.1 Owner shall have entered into a Loan Agreement with the
Bank under which the Bank agrees to lend to Owner the principal sum of up to
$1,505,000, and all conditions precedent to the funding of the Manager Advance
from the Bank shall have been satisfied.
2.2 The Chevron capital contribution in the amount of
$600,000, paid in 1996, shall have been deposited to a disbursement account with
the Bank for the purpose of funding a portion of cost of the Improvements.
2.3 The following executed original documents ("Manager Loan
Documents"), in form and substance satisfactory to Manager, shall have been
delivered to the Manager:
(a) Term Note in the principal amount of $500,000;
(b) Continuing Guaranties of Xxxxxxx Pres Kabacoff and
Xxxxxx X. Xxxxxxxx;
(c) Collateral Mortgage and Security Agreement in the
amount of $650,000, with a Collateral Mortgage and
Security Agreement, effectively creating a fifth
priority mortgage on the Hotel in favor of Manager
(the "Mortgage Documents");
(d) Policy of title insurance insuring the fifth priority
of the Lien of the Collateral Mortgage and Security
Agreement forming a part of the Mortgage Documents
for the full amount of the Manager Advance;
(e) Commercial Security Agreement;
(f) UCC-1 Financing Statement;
(g) Amendment to Management Agreement between Owner and
Manager relating to the Hotel;
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(h) First Amendment to and Confirmation of Pledge and
Assignment of Partnership Interest by Historic
Restoration, Incorporated to Manager;
(i) First Amendment to and Confirmation of Security
Agreement (Collateral Note);
(j) First Amendment to and Confirmation of Commercial
Security Agreement;
(k) First Amendment to and Confirmation of Assignment of
Leases and Rents; and
(l) Assignment of Garage Management Agreement to HRI
Parking Corporation.
and Owner shall take such other actions and execute and deliver such other
documents at closing as shall be reasonably necessary to give effect to the
transactions contemplated by this Agreement.
2.4 All actions necessary to authorize this Agreement and the
Manager Loan Documents hereof shall have been taken by Owner, and evidence
thereof, in form satisfactory to Manger's counsel, shall have been delivered to
Manager.
2.5 Manager shall have received an opinion of Xxxxx Xxxxxx,
attorneys for Owner, covering such matters as the Manager and its counsel shall
require.
2.6 Manager shall have received a Consent to Mortgage executed
and delivered by Canal Street Development Corporation.
2.7 Manager shall have received an amendment to the
Intercreditor Agreement.
3. Credit Enhancement Fee. As consideration to Manager for making the
Manager Advance and executing the Bank Guaranty, Owner agrees to pay to Manager
an annual fee of $20,000 ("Credit Enhancement Fee"), the first installment of
which shall be paid at the closing of the Manager Advance, and subsequent
installments of which shall be payable on the same date each year until the
Manager Advance has been paid in full, and the Bank Guaranty shall have been
satisfied and finally canceled.
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4. Covenants. Owner agrees to perform fully all of the following
covenants:
4.1 Owner shall pay the Term Note, and all installments
thereof, in accordance with its terms;
4.2 Owner shall promptly reimburse Manager or Sonesta (as the
case may be) for all amounts that either shall be required to pay under the
terms of the Bank Guaranty, together with interest on such payments at the rate
provided in the Term Note, from date of such payment until Manager and Sonesta
have been entirely and finally reimbursed.
4.3 Owner shall pay all installments of the Credit Enhancement
Fee when due, together with interest at the rate provided in the Term Note on
the past due amount of any such installment, from due date until paid.
5. Other Provisions.
5.1 Owner shall pay (a) one-half of all of Manager's
reasonable attorneys fees and expenses in connection with the negotiation and
documentation of the transactions contemplated by and closed simultaneously with
this Agreement, including without limitation, the Manager Loan Documents, the
First Amendment to Sixth Amendment and Restatement of Hotel Lease, dated May 6,
1997, between Canal Street Development Corporation and Owner ("Hotel Lease"),
and all transactions and documents related to the management and operation of
the Hotel and the garage facility used in connection with the Hotel; and (b) all
of Manager's reasonable attorneys fees and expenses in connection with the
enforcement of Manager's rights under this Agreement.
5.2 This Agreement shall be governed by the internal laws of
the State of Louisiana, and may not be amended except by instrument in writing
executed and delivered by all parties hereto.
5.3 If Owner should fail to perform its obligations hereunder,
and such default should not be remedied within ten days after notice is given by
Manager to Owner, at Suite 1717, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx
00000, Owner and Sonesta shall thereafter be entitled to take action to enforce
remedies set forth herein, in the documents to be executed pursuant to this
Agreement, and provided by law, subject to applicable provisions of the
Intercreditor Agreement (as defined in the Management Agreement).
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Signed and delivered in multiple originals, effective as of the date
first above written.
000 XXXXX XXXXXX LIMITED PARTNERSHIP
By: Historic Renovations Incorporated,
General Partner
By: /s/ Xxxxxxx Pres Xxxxxxxx
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Xxxxxxx Pres Kabacoff
President
SONESTA LOUISIANA HOTELS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Vice President
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