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EXHIBIT 10.4
CITY NATIONAL BANK MULTIPLE DISBURSEMENT NOTE
FIXED MATURITY
(INTEREST TIED TO PRIME)
527-386/# 24241 Note No.
$900,000.00 San ▇▇▇▇▇▇▇▇ Valley-CBC, # 048 Office
Encino, California
September 28, 1995
For value received, the undersigned, CASA MUNRAS HOTEL PARTNERS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP ("Borrower"), promises to pay to the order of
CITY NATIONAL BANK, a national banking association ("CNB"), at its office in
this city, in lawful money of the United States of America and in immediately
available funds, the principal sum of NINE HUNDRED THOUSAND AND NO/100 DOLLARS
($900,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon to be computed on each advance from the date of its
disbursement at a rate computed on the basis of a 360-day year, actual days
elapsed, equal to the "Prime Rate" of CNB, as it exists from time to time, plus
one and a half percent (1.50%) per year. "Prime Rate" shall mean the rate most
recently announced by CNB at its principal office in Beverly Hills, California,
as its "Prime Rate". Any change in the Prime Rate shall become effective on
the same business day on which the Prime Rate shall change, without prior
notice to Borrower.
Advances ▇▇▇▇▇▇▇▇▇, up to the total principal sum stated above, may be
made by CNB at the oral or written request of Borrower up to (but excluding)
October 1, 1996. Each request for an advance hereunder shall be noted in the
books and records of CNB. Advances hereunder shall be conclusively presumed to
have been made to or for the benefit of ▇▇▇▇▇▇▇▇ when made as noted in such
books and records.
Interest accrued on this Note shall be payable on the 1st day of each
month, commencing November 1, 1995.
The Outstanding principal balance on this Note and any interest
remaining unpaid shall be payable in full on October 1, 1996.
The occurrence of any of the following with respect to any Borrower or
any guarantor of this Note or any general partner of such Borrower or
Guarantor, shall constitute an "Event of Default" hereunder:
1. The failure to make any payment of principal or interest when due
under this Note;
2. The Filing of a petition by or against any of such parties under any
provisions of the Bankruptcy Code;
3. The appointment of a receiver or an assignee for the benefit of
creditors;
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4. The commencement of dissolution of liquidation proceedings or the
disqualification of any such parties which is a corporation,
partnership, joint venture or any other type of entity;
5. The death or incapacity of any of such parties who is an individual;
6. The revocation of any guaranty of the Note, or any guaranty becomes
unenforceable as to any future advance under this Note;
7. Any financial statement provided by any of such parties to CNB is
false or misleading;
8. Any default in the payment or performance of any obligation, or any
default under any provisions of any contract or instrument pursuant to
which any of such parties has incurred any obligation for borrowed
money, any purchase obligation or any other liability of any kind to
any person or entity, including CNB;
9. Any sale or transfer of all or a substantial or material part of the
assets of any of such parties other than in the ordinary course of
business; or
10. Any violation, breach or default under any letter agreement, guaranty,
security agreement, deed of trust or any other contract or instrument
executed in connection with this Note or securing this Note.
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SUPPLEMENTAL TERMS LETTER
September 28, 1995
CASA MUNRAS HOTEL PARTNERS, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner
RE: MULTIPLE DISBURSEMENT NOTE FIXED MATURITY DATED
SEPTEMBER 28, 1995, IN THE ORIGINAL PRINCIPAL SUM OF
$900,000.00 ("NOTE") EXECUTED BY CASA MUNRAS HOTEL
PARTNERS, L.P., A CALIFORNIA LIMITED PARTNERSHIP
("BORROWER") IN FAVOR OF CITY NATIONAL BANK, A
NATIONAL BANKING ASSOCIATION ("CNB")
Dear ▇▇▇▇:
This is to confirm that CNB will extend the credit facility more
completely described in the enclosed Note, subject to the additional terms and
conditions set forth herein. Capitalized terms not defined in this letter have
the meanings given them in the Note. This letter is hereby incorporated into
the Note (this letter and the Note, collectively, the "Note").
A. ADDITIONAL EVENTS OF DEFAULT.
The following shall constitute additional Events of Default under the
Note:
1. Failure of Borrower to furnish CNB, within the times specified, the
following statements:
1.1 Within ninety (90) days after the end of each quarterly
accounting period of each fiscal year, a financial statement
consisting of not less than a balance sheet, and income
statement, prepared in accordance with generally accepted
accounting principles consistently applied, which financial
statement may be internally prepared;
1.2 Within one hundred twenty (120) days after the close of each
fiscal year, a copy of the annual audit report for such year
for Borrower and the Subsidiaries including therein a balance
sheet, income statement, reconciliation of net worth and
statement of cash flows, with notes thereto, the balance
sheet, income statement and statement of cash flows to be
audited by a certified public accountant acceptable to CNB,
and certified by such accountants to have been prepared in
accordance with generally accepted accounting principles
consistently applied and accompanied by Borrower's
certification as to whether any event has occurred which
constitutes an Event of Default, and if so, stating the facts
with respect thereto;
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner
Casa Munras Hotel Partners, L.P.
September 28, 1995
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1.3 Quarterly progress reports on the renovation project on the
Casa Munras Hotel, as soon as available, but in no event later
than thirty (30) days after the end of each fiscal quarter;
and
1.4 Such additional information, reports and/or statements as CNB
may, from time to time, reasonably request;
2. Failure of Borrower to maintain the following:
2.1 A ratio of Cash Flow from Operations before Partner's
distributions, to Debt Service of not less than 1.25 to 1 for
each fiscal year.
B. DEFINITIONS.
For purposes of the Note, the following terms have the following
meanings:
"CASH FLOW FROM OPERATIONS" shall be determined on a consolidated
basis for Borrower and the Subsidiaries and shall mean the sum of (a) net
income after taxes earned over the twelve month period ending on the date of
determination, plus (b) amortization of intangible assets, plus (c) interest
expense, plus (d) depreciation expensed during the twelve month period ending
on the date of determination.
"DEBT SERVICE" shall mean (a) the aggregate amount of Current Maturity
of Long Term Debt plus (b) all interest incurred on borrowed money during the
twelve month period ending on the date of determination. "Current Maturity of
Long Term Debt" shall mean that portion of Borrower's consolidated long term
liabilities, determined in accordance with generally accepted accounting
principles consistently applied, which shall, by the terms thereof, become due
and payable within one (1) year following the date of the balance sheet upon
which such calculations are based.
"SUBSIDIARY" shall mean any corporation, the majority of whose voting
shares are at any time owned, directly or indirectly by Borrower and/or by one
or more Subsidiaries.
C. ADDITIONAL TERMS AND CONDITIONS.
The following additional terms and conditions shall also apply to the
Note:
1. FEES. Borrower shall pay to CNB a non-refundable fee equal to
$4,500.00, due and payable in full upon execution of this letter and the Note.
2. ENVIRONMENTAL INDEMNIFICATION. Due to the environmentally
sensitive nature of
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner
Casa Munras Hotel Partners, L.P.
September 28, 1995
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the industry in which Borrower is principally engaged and upon which CNB will
rely as its primary source of repayment, and in consideration of CNB extending
credit to Borrower, Borrower has agreed to indemnify CNB against any claims
that may arise as a result of Borrower's business activities that are
environmental in nature and for which CNB may be named as a liable party.
▇▇▇▇▇▇▇▇ agrees that it shall indemnify and hold harmless CNB, its
parent company, subsidiaries and all of their respective directors, officers,
employees, agents, successors, attorneys, and assigns from and against any
loss, damage, cost, expense, or liability directly of indirectly arising out of
or attributable to the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal, or presence of a hazardous
substance on, under, or about Borrower's property or operations or property
leased to Borrower, including but not limited to attorneys' fees (including the
reasonable estimate of the allocated cost of in-house counsel and staff). For
these purposes, the term "hazardous Substances" means any substance which is or
becomes designated as "hazardous" or "toxic" under any Federal, state or local
law. This indemnity shall survive repayment of ▇▇▇▇▇▇▇▇'s obligations to CNB.
Except for documents and instruments specifically referenced herein or
in the Note, this letter and the Note constitute the entire agreement of the
parties hereto and supersedes any prior or contemporaneous oral or written
agreements, understandings, representations, warranties and negotiations, if
any, which are merged into this letter and the Note. If you agree to accept
the terms of this letter and the Note, please sign the enclosed acknowledgement
copy of this letter, as well as the enclosed Note, and return them to me on or
before October 13, 1995.
Sincerely,
CITY NATIONAL BANK, a national banking association
By: ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇, Senior Vice President/Manager
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇, Vice President
Accepted and Agreed this 2nd day of
October , 1995.
CASA MUNRAS HOTEL PARTNERS, L.P.,
a California limited partnership
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner
