Exhibit 10.2(a)
CONSOLIDATED AND RENEWED PROMISSORY NOTE
U.S. $31,000,000.00 May 30, 2000
FOR VALUE RECEIVED, and at the times hereinafter specified, SONESTA
BEACH RESORT LIMITED PARTNERSHIP, a Delaware limited partnership ("Maker"),
whose address is c/o Sonesta International Hotels Corp., 000 Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, hereby promises to pay to the order of
SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation (hereinafter referred
to, together with each subsequent holder hereof, as "Holder"), at 0 XxxXxxxxxx
Xxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-6022, or at such other
address as may be designated from time to time hereafter by any Holder, the
principal sum of THIRTY-ONE MILLION AND NO/100THS DOLLARS ($31,000,000.00),
together with interest on the principal balance outstanding from time to time,
as hereinafter provided, in lawful money of the United States of America.
By its execution and delivery of this Consolidated and Renewed
Promissory Note (this "Note"), Maker covenants and agrees as follows:
1. Interest Rate and Payments.
(a) The balance of principal outstanding from time to time
under this Note shall bear interest at the rate of 8.60% per annum (the
"Original Interest Rate"), computed on the basis of a 360-day year for the
actual number of days elapsed.
(b) Interest only shall be payable on the date the loan
evidenced by this Note (the "Loan") is funded by Xxxxxx, in advance, for the
period from and including the date of funding through and including June 30,
2000.
(c) Commencing on August 1, 2000, and continuing on the first
day of each month thereafter through and including June 1, 2010, combined
payments of principal and interest shall be payable, in arrears, in the amount
of $251,712.92 each (such amount representing an amount that would be sufficient
to fully amortize the amount of this Note over a twenty-five (25) year period
(the "Amortization Period"), if such amortization were based on a three hundred
sixty (360) day year composed of twelve (12) months of thirty (30) days each).
(d) The entire outstanding principal balance, together with
all accrued and unpaid interest and all other sums due hereunder, shall be due
and payable in full on July 1, 2010 (the "Original Maturity Date").
2. Holder's Extension Option; Net Operating Income.
(a) If Maker shall fail to pay the outstanding principal
balance of this Note and all accrued interest and other charges due hereon at
the Original Maturity Date, Holder shall have the right, at Holder's sole option
and discretion, to extend the term of the Loan for an additional period of five
(5) years (the "Extension Term"). If Holder elects to extend the term of
the Loan, Maker shall pay all fees of Holder incurred in connection with such
extension, including, but not limited to, reasonable attorneys' fees and title
insurance premiums. Maker shall execute all documents reasonably requested by
Xxxxxx to evidence and secure the Loan, as extended, and shall obtain and
provide to Holder any title insurance policy or endorsement requested by Xxxxxx.
(b) Should Holder elect to extend the term of the Loan as
provided above, Holder shall (i) reset the interest rate borne by the
then-existing principal balance of the Loan to a rate per annum (the "Extension
Term Rate") equal to the greater of (A) the Original Interest Rate, or (B)
Holder's (or comparable lenders', if Holder is no longer making such loans)
then-prevailing interest rate for five (5) year loans secured by properties
similar to the Property (hereinafter defined), as determined by Holder in its
sole discretion; (ii) re-amortize the then-existing principal balance of the
Loan over the remaining portion of the Amortization Period (the "New
Amortization Period"); (iii) have the right to require Maker to enter into
modifications of the non-economic terms of the Loan Documents as Holder may
request (the "Non-Economic Modifications"); and (iv) notwithstanding any
provision set forth in the Loan Documents to the contrary, have the right to
require Maker to make monthly payments into escrow for insurance premiums and
real property taxes, assessments and similar governmental charges. Hence,
monthly principal and interest payments during the Extension Term shall be based
upon the Extension Term Rate, in an amount that would be sufficient to fully
amortize the outstanding principal balance of the Loan over the New Amortization
Period, if such amortization were based on a three hundred sixty (360) day year
composed of twelve (12) months of thirty (30) days each.
(c) If Holder elects to extend the term of the Loan, Holder
shall advise Maker of the Extension Term Rate on or prior to the Original
Maturity Date.
(d) In addition to the required monthly payments of principal
and interest set forth above, commencing on the first day of the second month
following the Original Maturity Date and continuing on the first day of each
month thereafter during the Extension Term (each an "Additional Payment Date"),
Maker shall make monthly payments to Holder in an amount equal to all Net
Operating Income (hereinafter defined) attributable to the Property for the
calendar month ending on the last day of the month that is two months preceding
each such Additional Payment Date. For example, assuming the Original Maturity
Date is January 1, then Net Operating Income for the period from January 1
through January 31 shall be payable to Holder on March 1; Net Operating Income
for the period from February 1 through February 28 shall be payable to Holder on
April 1, and so on.
(e) Holder shall deposit all such Net Operating Income
received from Maker into an account or accounts maintained at a financial
institution chosen by Holder or its servicer in its sole discretion (the
"Deposit Account") and all such funds shall be invested in interest-bearing
investments in a manner acceptable to Holder in its sole and reasonable
discretion. All interest, dividends and earnings credited to the Deposit Account
shall be held and applied in accordance with the terms hereof.
(f) On the third Additional Payment Date and on each third
Additional Payment Date thereafter, Holder shall apply all Excess Funds
(hereinafter defined), if any, to prepayment of amounts due under this Note,
without premium or penalty.
(g) As security for the repayment of the Loan and the
performance of all other obligations of Maker under the Loan Documents, Maker
hereby assigns, pledges, conveys, delivers, transfers and grants to Holder a
first priority security interest in and to: all Maker's right, title and
interest in and to the Deposit Account; all rights to payment from the Deposit
Account and the money deposited therein or credited thereto (whether then due or
in the future due and whether then or in the future on deposit); all interest
thereon; any certificates, instruments and securities, if any, representing the
Deposit Account; all claims, demands, general intangibles, choses in action and
other rights or interests of Maker in respect of the Deposit Account; any monies
then or at any time thereafter deposited therein; any increases, renewals,
extensions, substitutions and replacements thereof; and all proceeds of the
foregoing.
(h) From time to time, but not more frequently than monthly,
Maker may request a disbursement (a "Disbursement") from the Deposit Account for
shortfalls in Operating Expenses (as defined in Section 2(k) below), capital
expenses, tenant improvement expenses, leasing commissions and special
contingency expenses. Holder may consent to or deny any such Disbursement in its
sole discretion, provided, however, that Holder shall consent to Disbursements
to cover Operating Expenses in months when Gross Revenue (as defined in Section
2(k) below) is insufficient to pay such Operating Expenses, if (i) the budget
approved by Holder as provided in Section 3 below for the applicable period
contemplates such deficit between Gross Revenue and Operating Expenses for such
months, (ii) no Default or Event of Default shall exist, and (iii) funds in the
Deposit Account are sufficient to pay the requested Disbursement.
(i) Upon the occurrence of any Event of Default (i) Maker
shall not be entitled to any further Disbursement from the Deposit Account; and
(ii) Holder shall be entitled to take immediate possession and control of the
Deposit Account (and all funds contained therein) and to pursue all of its
rights and remedies available to Holder under the Loan Documents, at law and in
equity.
(j) All of the terms and conditions of the Loan shall apply
during the Extension Term, except as expressly set forth above, and except that
no further extensions of the Loan shall be permitted.
(k) For the purposes of the foregoing:
(i) "Excess Funds" shall mean, on any Additional Payment
Date, the amount of funds then existing in the Deposit Account (including
any Net Operating Income due on the applicable Additional Payment Date),
less an amount equal to the sum of three regularly scheduled payments of
principal and interest due on this Note;
(ii) "Net Operating Income" shall mean, for any
particular period of time, Gross Revenue for the relevant period, less
Operating Expenses for the relevant period; provided, however, that if
such amount is equal to or less than zero (0), Net Operating Income shall
equal zero (0);
(iii) "Gross Revenue" shall mean all payments and other
revenues (exclusive, however, of any payments attributable to sales taxes)
received by or on behalf of Maker from all sources related to the
ownership or operation of the Property, including, but not limited to,
rents, room charges, parking fees, interest, business interruption
insurance proceeds, operating expense pass-through revenues and common
area maintenance charges, for the relevant period for which the
calculation of Gross Revenue is being made; and
(iv) "Operating Expenses" shall mean the sum of all
ordinary and necessary operating expenses actually paid or incurred by
Maker in connection with the operation of the Property during the relevant
period for which the calculation of Operating Expenses is being made,
including, but not limited to, (a) payments made by Maker for taxes and
insurance required under the Loan Documents, (b) monthly debt service
payments as required under this Note, (c) federal and state income taxes,
and (d) amounts contributed by Maker to the Replacement Reserve Account
(as defined in the Replacement Reserve and Security Agreement executed by
Maker for the benefit of Holder).
3. Budgets During Extension Term.
(a) Within fifteen (15) days following the Original Maturity
Date and on or before December 1 of each subsequent calendar year, Maker shall
deliver to Holder a proposed revenue and expense budget for the Property for the
remainder of the calendar year in which the Original Maturity Date occurs or the
immediately succeeding calendar year (as applicable). Such budget shall set
forth Maker's projection of Gross Revenue and Operating Expenses for the
applicable calendar year, which shall be subject to Holder's reasonable
approval. Once a proposed budget has been reviewed and approved by Xxxxxx, and
Maker has made all revisions reasonably requested by Xxxxxx, if any, the revised
budget shall be delivered to Holder and shall thereafter become the budget for
the Property hereunder (the "Budget") for the applicable calendar year. If Maker
and Holder are unable to agree upon a Budget for any calendar year, the budgeted
Operating Expenses (excluding extraordinary items) provided in the Budget for
the Property for the preceding calendar year shall be considered the Budget for
the Property for the subject calendar year until Maker and Holder agree upon a
new Budget for such calendar year.
(b) During the Extension Term, Maker shall operate the
Property in accordance with the Budget for the applicable calendar year, and the
total of expenditures relating to the Property exceeding one hundred and five
percent (105%) of the aggregate of such expenses set forth in the Budget for the
applicable time period shall not be treated as Operating Expenses for the
purposes of calculating "Net Operating Income," without the prior written
consent of Xxxxxx except for emergency expenditures which, in the Maker's good
faith judgment, are reasonably necessary to protect, or avoid immediate danger
to, life or property.
4. Reports During Extension Term.
(a) During the Extension Term, Maker shall deliver to Holder
all financial statements reasonably required by Xxxxxx to calculate Net
Operating Income, including, without limitation, a monthly statement to be
delivered to Holder concurrently with Maker's payment of Net Operating Income
that sets forth the amount of Net Operating Income accompanying such statement
and Maker's calculation of Net Operating Income for the relevant calendar month.
Such statements shall be certified by an executive officer of Maker or Maker's
manager, managing member or general partner (as applicable) as having been
prepared in accordance with the terms hereof and to be true, accurate and
complete in all material respects.
(b) In addition, on or before February 15 of each calendar
year during the Extension Term, Maker shall submit to Holder an annual income
and expense statement for the Property which shall include the calculation of
Gross Revenue, Operating Expenses and Net Operating Income for the preceding
calendar year and shall be accompanied by Maker's reconciliation of any
difference between the actual aggregate amount of the Net Operating Income for
such calendar year and the aggregate amount of Net Operating Income for such
calendar year actually remitted to Holder. All such statements shall be
certified by an executive officer of Maker or Maker's manager, managing member
or general partner (as applicable) as having been prepared in accordance with
the terms hereof and to be true, accurate and complete in all material respects.
If any such annual financial statement discloses any inconsistency between the
calculation of Net Operating Income and the amount of Net Operating Income
actually remitted to Holder, Maker shall immediately remit to Holder the amount
of any underpayment of Net Operating Income for such calendar year or, in the
event of an overpayment by Maker, such amount may be withheld from any
subsequent payment of Net Operating Income required hereunder.
(c) Holder may notify Maker within ninety (90) days after
receipt of any statement or report required hereunder that Holder disputes any
computation or item contained in any portion of such statement or report. If
Holder so notifies Maker, Xxxxxx and Maker shall meet in good faith within
twenty (20) days after Xxxxxx's notice to Maker to resolve such disputed items.
If, despite such good faith efforts, the parties are unable to resolve the
dispute at such meeting or within ten (10) days thereafter, the items shall be
resolved by an independent certified public accountant with at least fifteen
(15) years of hotel accounting experience designated by Holder within fifteen
(15) days after such ten (10) day period. The determination of such accountant
shall be final. All fees of such accountant shall be paid by Maker. Maker shall
remit to Holder any additional amount of Net Operating Income found to be due
for such periods within ten (10) days after the resolution of such dispute by
the parties or the accountant's determination, as applicable. The amount of any
overpayment found to have been made for such periods may be withheld from any
required future remittance of Net Operating Income.
(d) Maker shall at all times keep and maintain full and
accurate books of account and records adequate to reflect correctly all items
required in order to calculate Net Operating Income.
5. Loan Prepayment and Defeasance.
(a) Except for (i) the application of the Additional Principal
Payment (as defined in that certain Xxxxxxx and Restated Promissory Note (the
"Cambridge Note") of even date herewith in the principal amount of
$41,000,000.00 executed by Sonesta of Massachusetts, Inc., a Massachusetts
corporation , and Xxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxxx, and Boy X.X. xxx Xxxx,
trustees of the Charterhouse of Cambridge Trust, and not individually, under a
Declaration of Trust dated December 27, 1963 and recorded at Middlesex South,
Commonwealth of Massachusetts, Deeds Book 11160, Page 340, as amended by
Amendment of Declaration of Trust dated July 8, 1966 and recorded at Middlesex
South, Commonwealth of Massachusetts, Deeds Book 11160, Page 359 (collectively,
the "Cambridge Borrower") for the benefit of Holder) to the principal balance of
this Note in connection with the Defeasance of the Cambridge Note, and (ii) the
application of insurance proceeds or condemnation awards to the principal
balance of this Note, as provided in the Mortgage, Maker shall have no right to
prepay all or any portion of the Loan evidenced by this Note during the period
commencing on the date hereof through, but not including, the date of the
regularly scheduled payment due under this Note that is six (6) months prior to
the Original Maturity Date (the "Optional Prepayment Date"). From and after the
Optional Prepayment Date, and at any time during the Extension Term, Maker may
prepay the Loan in whole, but not in part, together with accrued interest to the
date of such prepayment, without prepayment premium thereon, and without any
obligation to satisfy the Defeasance Requirements (hereinafter defined). Any
such prepayment shall be subject to the requirement that Maker gives not less
than thirty (30) days' prior written notice to Holder of Maker's election to
prepay this Note, and subject to the caveat that Maker may not prepay the Loan
on a Friday or on any day preceding a public holiday, or the equivalent for
banks generally under the laws of the State of Florida. Except for the
application of the Additional Principal Payment (as defined in the Cambridge
Note) to the principal balance of this Note and the application of insurance
proceeds or condemnation awards to the principal balance of this Note, as
provided above, and except for making payments of Net Operating Income as
required above, in no event shall Maker be permitted to make any partial
prepayments of this Note.
(b) No prepayment premium shall be due in connection with the
application of insurance proceeds or condemnation awards to the principal
balance of this Note as provided in the Mortgage. If Holder applies any
insurance proceeds to the principal balance of this Note as provided in the
Mortgage, then Maker shall have the right to prepay the remaining principal
amount of this Note and all accrued but unpaid interest thereon as of the date
of prepayment, without prepayment premium thereon.
(c) At any time during the term of the Loan, Maker shall have
the right to satisfy the "Defeasance Requirements" set forth below (a
"Defeasance"), provided that (i) Maker gives not less than thirty (30) days'
prior written notice to Holder of Maker's election
to complete a Defeasance (a "Defeasance Notice"), and (ii) Maker thereafter
timely fulfills the Defeasance Requirements. The Defeasance Requirements shall
be as follows:
(i) The date for fulfillment of the Defeasance
Requirements ("Defeasance Date") shall be identified in the Defeasance
Notice.
(ii) All interest, fees and charges then due under all
of the Loan Documents shall be paid in full as of the Defeasance Date and
there shall exist no Default or Event of Default under this Note or under
any of the other Loan Documents.
(iii) Maker shall remit to Holder, or Xxxxxx's designee,
an amount of funds designated by Holder (the "Defeasance Deposit") as
sufficient for Holder to purchase United States government obligations on
behalf of Maker which are not callable or subject to prepayment, of such
maturities and interest payment dates and bearing such interest as will,
without further investment or reinvestment of either the principal amount
thereof or the investment income thereon, be sufficient to pay as and when
due the principal of and interest on this Note on each regularly scheduled
payment date hereunder and on the Original Maturity Date (the "Defeasance
Collateral").
(iv) On or prior to the Defeasance Date, Maker shall
deliver, or cause to be delivered, to Holder:
A. written confirmation from an independent certified
public accountant acceptable to Holder that the Defeasance
Collateral is sufficient to timely make the required payments
of principal and interest due under this Note as and when they
become due, as described above;
B. a security agreement executed by Maker, in form and
substance satisfactory to Holder, creating in Holder a first
priority lien on the Defeasance Deposit and the Defeasance
Collateral (the "Defeasance Security Agreement"), together
with such other documents, notices and/or UCC Financing
Statements requested by Holder and necessary or desirable in
Holder's determination to create and perfect Holder's security
interest in the Defeasance Deposit and Defeasance Collateral;
C. an opinion of counsel to Maker, in form and substance
and delivered by counsel satisfactory to Holder in its sole
discretion, stating, among other things, that (1) Holder has a
perfected first priority security interest in the Defeasance
Deposit and the Defeasance Collateral, (2) the Defeasance
Security Agreement is enforceable against Maker in accordance
with its terms, (3) the Defeasance will not cause any REMIC
Trust formed pursuant to Section 860D of the Internal Revenue
Code of 1986, as amended from time to time, or any successor
statute (the "Code"), that holds this Note (if any) to
maintain its status as a "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code as a
result of the Defeasance, and (4) if applicable, after the
Defeasance, the Loan will continue to be a "qualified
mortgage" within the meaning of Section 860G of the Code;
D. a certificate, executed by an authorized officer of
Maker, certifying that all Defeasance Requirements set forth
in this Note have been satisfied; and
E. such other certificates, documents or instruments as
Holder may reasonably request.
(v) Maker shall pay, or cause the Cambridge Borrower to
pay, to Holder for application to the amounts due under the Cambridge
Note, an amount equal to fifteen percent (15%) of the outstanding
principal balance of this Note existing immediately prior to the
Defeasance (referred to herein as the "Additional Principal Payment").
(vi) Maker shall pay all costs and expenses of Holder
incurred in connection with the Defeasance, including, without limitation,
any costs and expenses associated with a release of the lien of the
Mortgage as provided below, the assumption of this Note by any Successor
Maker, if applicable, as well as attorneys' and accountants' fees, service
fees and expenses.
(vii) In connection with the Defeasance, Maker hereby
appoints Holder as its agent and attorney-in-fact for the purpose of using
the Defeasance Deposit to purchase the Defeasance Collateral.
(viii) Maker, pursuant to the Defeasance Security
Agreement or other appropriate document, shall authorize and direct that
the payments received from the Defeasance Collateral may be made directly
to Holder or to an account maintained by, or for the benefit of, Holder
(unless otherwise directed by Xxxxxx) and applied to satisfy the
obligations of Maker or Successor Maker, if applicable, under this Note.
(ix) Maker shall submit to Holder, concurrently with
Maker's delivery of the Defeasance Notice, a release of lien or
reconveyance of the Mortgage and related Loan Documents (including any
guaranty) for execution by Xxxxxx. Such release or reconveyance shall be
in form appropriate in the jurisdiction in which the Property is located
and satisfactory to Holder, in its reasonable discretion. Maker shall pay
all recording costs, fees and expenses associated with recording such
release or reconveyance and shall provide all other documentation Holder
reasonably requests in connection with such release or reconveyance,
together with a certificate certifying that such documentation (A) is in
compliance with all applicable laws, and (B) will effect such release or
reconveyance in accordance with the terms of this Note.
(x) Upon satisfaction of all of the Defeasance
Requirements, the Property shall be released from the lien of the
Mortgage, and the Defeasance Collateral shall be the sole source of
collateral securing this Note. Holder shall remit to
Maker any portion of the Defeasance Deposit in excess of the amount
necessary to purchase the Defeasance Collateral and to satisfy Maker's
obligations under this Section.
(xi) In connection with the release of the lien of the
Mortgage, Holder, at Maker's expense, may form or, at Holder's request,
Maker shall form, a special-purpose, bankruptcy-remote entity whose only
assets shall be the Defeasance Collateral (the "Successor Maker"), to be
the successor obligor under this Note and the Defeasance Security
Agreement. At Holder's request, Maker shall assign, and Successor Maker
shall assume, all of Maker's rights and obligations under this Note and
the Defeasance Security Agreement. In connection therewith, Successor
Maker shall execute an assumption agreement in form and substance
satisfactory to Holder, in Xxxxxx's sole discretion, pursuant to which
Successor Maker shall assume Maker's obligations under this Note and the
Defeasance Security Agreement, and Maker and any guarantors shall be
released from their obligations with respect to such assumed documents.
Maker shall pay $1,000.00 to Successor Maker as consideration for assuming
the obligations under this Note and the Defeasance Security Agreement. In
connection with such assignment and assumption, Maker shall:
A. Deliver to Holder an opinion of counsel, in form and
substance and delivered by counsel satisfactory to Holder in
its sole discretion stating, among other things, that (x) such
assumption agreement is enforceable against Maker and
Successor Maker in accordance with its terms, (y) this Note,
the Defeasance Security Agreement and any other documents
executed in connection with the Defeasance are enforceable
against Successor Maker in accordance with their respective
terms, and (z) the transfer of the Defeasance Collateral to
Successor Maker does not constitute a fraudulent conveyance or
a preference under applicable bankruptcy and state law; and
B. Pay all reasonable costs and expenses incurred by
Holder or its agents in connection with such assignment and
assumption, including, without limitation, all reasonable fees
and disbursements of legal counsel.
(d) If, prior to the Optional Prepayment Date, Holder
accelerates this Note due to an Event of Default, then in addition to Maker's
obligation to pay the then outstanding principal balance of this Note and all
accrued but unpaid interest thereon, Maker shall pay to Holder an additional
amount (a "Prepayment Premium") equal to the greater of (i) one percent (1%) of
the outstanding principal amount of this Note, or (ii) the Present Value of this
Note (hereinafter defined), less the amount of principal being prepaid,
calculated as of the prepayment date. In addition, Maker shall be obligated to
pay to Holder a prepayment premium on the Additional Principal Payment (as
defined in the Cambridge Note) being applied to the principal balance of this
Note in connection with the Defeasance of the Cambridge Note, in an amount equal
to the percentage of the principal balance being prepaid in connection
therewith, multiplied by the Prepayment Premium that would be due if this Note
were accelerated on such date.
(e) For the purposes of the foregoing:
(i) The "Present Value of this Note" with respect to any
prepayment of this Note, as of any date, shall be determined by
discounting all scheduled payments of principal and interest remaining to
maturity of this Note, attributed to the amount being prepaid, at the
Discount Rate. If prepayment occurs on a date other than a regularly
scheduled payment date, the actual number of days remaining from the
prepayment date to the next regularly scheduled payment date will be used
to discount within such period;
(ii) The "Discount Rate" is the rate which, when
compounded monthly, is equivalent to the Treasury Rate, when compounded
semi-annually;
(iii) The "Treasury Rate" is the semi-annual yield on
the Treasury Constant Maturity Series with maturity equal to the remaining
weighted average life of this Note (excluding the Extension Term), for the
week prior to the prepayment date, as reported in Federal Reserve
Statistical Release H.15 - Selected Interest Rates, conclusively
determined by Holder on the prepayment date. The rate will be determined
by linear interpolation between the yields reported in Release H.15, if
necessary. In the event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury Rate.
6. Payments. Whenever any payment to be made under this Note
shall be stated to be due on a Saturday, Sunday or public holiday or the
equivalent for banks generally under the laws of the State of Florida (any other
day being a "Business Day"), such payment may be made on the next succeeding
Business Day.
7. Default Rate.
(a) The entire balance of principal, interest, and other sums
due upon the maturity hereof, by acceleration or otherwise, shall bear interest
from the date due until paid at the greater of (i) eighteen percent (18%) per
annum and (ii) a per annum rate equal to five percent (5%) over the prime rate
(for corporate loans at large United States money center commercial banks)
published in The Wall Street Journal on the first business day of each month
(the "Default Rate"); provided, however, that such rate shall not exceed the
maximum permitted by applicable state or federal law. In the event The Wall
Street Journal is no longer published or no longer publishes such prime rate,
Holder shall select a comparable reference.
(b) If any payment under this Note is not made within five (5)
days following its due date, then interest shall accrue at the Default Rate from
the date such payment was due until payment is actually made.
8. Late Charges. In addition to interest as set forth herein, Maker
shall pay to Holder a late charge equal to four percent (4%) of any amounts due
under this Note in the event any such amount is not paid within five (5) days
following its due date.
9. Application of Payments. All payments hereunder shall be applied
first to the payment of late charges, if any, then to the payment of prepayment
premiums, if any, then to the repayment of any sums advanced by Holder for the
payment of any insurance premiums, taxes, assessments, or other charges against
the property securing this Note (together with interest thereon at the Default
Rate from the date of advance until repaid), then to the payment of accrued and
unpaid interest, and then to the reduction of principal.
10. Immediately Available Funds. Payments under this Note shall be
payable in immediately available funds without setoff, counterclaim or deduction
of any kind.
11. Security. This Note is secured by, among other things, (a) a
Consolidated, Amended and Restated Mortgage, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Leases and Rents of even date herewith
executed by Maker for the benefit of the named Holder hereof (the "Mortgage")
encumbering certain real property and improvements thereon commonly known as the
Sonesta Beach Resort, Key Biscayne, Florida, as more particularly described in
such Mortgage (the "Property") and the other Loan Documents (as defined in the
Mortgage), and (b) a Mortgage, Security Agreement, Fixture Filing, Financing
Statement and Assignment of Leases and Rents dated as of December 18, 1996,
executed by Cambridge Borrower for the benefit of the named Holder hereof, as
amended by a Mortgage and Loan Modification Agreement of even date herewith
executed by Cambridge Borrower and Holder, encumbering Cambridge Borrower's fee
interest and leasehold interest in and to certain real property and improvements
thereon commonly known as the Royal Sonesta Hotel, City of Cambridge, Middlesex
County, Massachusetts, as more particularly described therein. In the event that
payment of this Note is secured by a first lien on real estate, or by pledge of
any of the other forms of collateral described in Section 655.56, Florida
Statutes, then the interest due hereunder is being charged pursuant to the
provisions of Chapter 655, Florida Statutes.
12. Certain Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Mortgage.
13. Event of Default. Each of the following events will constitute
an event of default (an "Event of Default") under this Note, the Loan Documents,
the Cambridge Loan Documents (as defined in the Mortgage) and the Second
Mortgage (as defined in the Mortgage), and any Event of Default under any Loan
Document, Cambridge Loan Document or the Second Mortgage shall constitute an
Event of Default hereunder and under each of the other Loan Documents, the
Cambridge Loan Documents and the Second Mortgage:
(a) any failure to pay any sum due hereunder within five (5)
days after its due date or failure to perform any covenant or agreement herein
contained within thirty (30) days following written notice of default thereof;
or
(b) if, at any time during the Extension Term, Gross Revenue
for any twelve (12) month period shall be less than ninety-three percent (93%)
of the amount of projected Gross Revenue for such month set forth in the
applicable Budget.
14. Acceleration. Upon the occurrence of any Event of Default, the
entire balance of principal, accrued interest, and other sums owing hereunder
shall, at the option of Holder, become at once due and payable without notice or
demand. Upon the occurrence of an Event of Default described in Section 13(b)
hereof, Holder shall have the option, in its sole discretion, to either (a)
exercise any remedies available to it under the Loan Documents, the Cambridge
Loan Documents, the Second Mortgage, at law or in equity, or (b) require Maker
to submit a new proposed budget for Holder's approval. If Xxxxxx agrees to
accept such new proposed budget, then such budget shall become the Budget for
all purposes hereunder.
15. Conditions Precedent. Maker hereby certifies and declares that
all acts, conditions and things required to be done and performed and to have
happened precedent to the creation and issuance of this Note by Maker, and to
constitute this Note the legal, valid and binding obligation of Maker,
enforceable in accordance with the terms hereof, have been done and performed
and happened in due and strict compliance with all applicable laws.
16. Certain Waivers and Consents. Maker and all parties now or
hereafter liable for the payment hereof, primarily or secondarily, directly or
indirectly, and whether as endorser, guarantor, surety, or otherwise, hereby
severally (a) waive presentment, demand, protest, notice of protest and/or
dishonor, and all other demands or notices of any sort whatever with respect to
this Note, (b) consent to impairment or release of collateral, extensions of
time for payment, and acceptance of partial payments before, at, or after
maturity, (c) waive any right to require Holder to proceed against any security
for this Note before proceeding hereunder, (d) waive diligence in the collection
of this Note or in filing suit on this Note, and (e) agree to pay all reasonable
costs and expenses, including reasonable attorneys' fees, which may be incurred
in the collection of this Note or any part thereof or in preserving, securing
possession of, and realizing upon any security for this Note.
17. Usury Savings Clause. The provisions of this Note and of all
agreements between Maker and Holder are, whether now existing or hereinafter
made, hereby expressly limited so that in no contingency or event whatever,
whether by reason of acceleration of the maturity hereof, prepayment, demand for
payment or otherwise, shall the amount paid, or agreed to be paid, to Holder for
the use, forbearance, or detention of the principal hereof or interest hereon,
which remains unpaid from time to time, exceed the maximum amount permissible
under applicable law, it particularly being the intention of the parties hereto
to conform strictly to Florida and Federal law, whichever is applicable. If from
any circumstance whatever, the performance or fulfillment of any provision
hereof or of any other agreement between Maker and Holder shall, at the time
performance or fulfillment of such provision is due, involve or purport to
require any payment in excess of the limits prescribed by law, then the
obligation to be performed or fulfilled is hereby reduced to the limit of such
validity, and if from any circumstance whatever Holder should ever receive as
interest an amount which would exceed the highest lawful rate, the amount which
would be excessive interest shall be applied to the reduction of the principal
balance owing hereunder (or, at Xxxxxx's option, be paid over to Maker) and
shall not be counted as interest. To the extent permitted by applicable law,
determination of the legal maximum amount of interest shall at all times be made
by amortizing, prorating, allocating and spreading in equal parts during the
period of the full stated term of this
Note, all interest at any time contracted for, charged, or received from Maker
in connection with this Note and all other agreements between Maker and Holder,
so that the actual rate of interest on account of the indebtedness represented
by this Note is uniform throughout the term hereof.
18. Non-Recourse; Exceptions to Non-Recourse. Except as expressly
hereinafter set forth, the recourse of Holder with respect to the obligations
evidenced by this Note shall be solely to the Property, Chattels, and Intangible
Personalty (as such terms are defined in the Mortgage and the Cambridge Loan
Documents), and all other collateral pledged by Maker to secure this Note.
Notwithstanding anything to the contrary contained in this Note or in any Loan
Document, Cambridge Loan Document or the Second Mortgage, nothing shall be
deemed in any way to impair, limit or prejudice the rights of Holder (a) in
foreclosure proceedings or in any ancillary proceedings brought to facilitate
Holder's foreclosure on the Property or any portion thereof; (b) to recover from
Maker damages or costs (including without limitation reasonable attorneys' fees)
incurred by Holder as a result of waste by Maker; (c) to recover from Maker any
condemnation or insurance proceeds attributable to the Property which were not
paid to Holder or used to restore the Property in accordance with the terms of
the Mortgage; (d) to recover from Maker any rents, profits, security deposits,
advances, rebates, prepaid rents or other similar sums attributable to the
Property collected by or for Maker following an Event of Default under any Loan
Document and not properly applied to the reasonable fixed and operating expenses
of the Property, including payments of this Note, or held pursuant to Leases or
other applicable agreements; (e) to pursue the personal liability of Maker under
the provisions of Section 5.10 of the Mortgage, including any indemnification
provisions under such Section; (f) to exercise any specific rights or remedies
afforded Holder under any other provisions of the Loan Documents or by law or in
equity (or to recover under any guarantee agreement given in connection with
this Note); (g) to recover from Maker and to properly apply and disburse the
amount of any accrued taxes, assessments, and/or utility charges affecting the
Property (whether or not the same have been billed to Maker) that are either
unpaid by Maker or paid by Holder under the Mortgage and to collect from Maker
any sums expended by Holder in fulfilling the obligations of Maker under any
leases, permits, licenses (including liquor licenses), management, franchise or
license agreements or any other agreements affecting or relating to the Property
or the operation of the Property as a full-service hotel; (h) to pursue any
personal liability of Maker and/or Guarantor under the Environmental Indemnity
Agreement; and (i) to recover from Maker the amount of any loss suffered by
Holder (that would otherwise be covered by insurance) as a result of Maker's
failure to maintain any insurance required under the terms of any Loan Document.
The agreement contained in this paragraph to limit the personal liability of
Maker shall become null and void and be of no further force and effect in the
event (i) that the Property or any part thereof or any interest therein, or any
interest in Maker, shall be further encumbered by a voluntary lien securing any
obligation upon which Maker or any general partner, principal or affiliate of
Maker shall be personally liable for repayment, whether as obligor or guarantor
which has not been approved in advance by Holder; (ii) of any breach or
violation of Section 5.4, 5.5 or 5.7 of the Mortgage; (iii) of any fraud or
material misrepresentation by Maker in connection with the Property, the Loan
Documents or the application made by Maker for the Loan; or (iv) of any
execution, amendment, modification or termination without the prior written
consent of Holder if such consent is required under the terms of Section 5.3 of
the Mortgage of any Lease. For purposes of the foregoing, "affiliate"
shall mean any individual, corporation, trust, partnership or any other person
or entity controlled by, controlling or under common control with Maker. A
person or entity of any nature shall be presumed to have control when it
possesses the power, directly or indirectly, to direct, or cause the direction
of, the management or policies of another person or entity, whether through
ownership of voting securities, by contract, or otherwise.
19. Severability. If any provision hereof or of any other document
securing or related to the indebtedness evidenced hereby is, for any reason and
to any extent, invalid or unenforceable, then neither the remainder of the
document in which such provision is contained, nor the application of the
provision to other persons, entities, or circumstances, nor any other document
referred to herein, shall be affected thereby, but instead shall be enforceable
to the maximum extent permitted by law.
20. Transfer of Note. Each provision of this Note shall be and
remain in full force and effect notwithstanding any negotiation or transfer
hereof and any interest herein to any other Holder or participant.
21. Governing Law. Regardless of the place of its execution, this
Note shall be construed and enforced in accordance with the laws of the State of
Florida.
22. Time of Essence. Time is of the essence of this Note.
23. Remedies Cumulative. The remedies provided to Holder in this
Note, the Mortgage, the Loan Documents, the Cambridge Loan Documents and the
Second Mortgage are cumulative and concurrent and may be exercised singly,
successively or together against Maker, the Property, and other security, or any
guarantor of this Note, at the sole and absolute discretion of the Holder.
24. No Waiver. Holder shall not by any act or omission be deemed to
waive any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Holder and then only to the extent specifically set forth
therein. A waiver of one event shall not be construed as continuing or as a bar
to or waiver of any right or remedy granted to Holder hereunder in connection
with a subsequent event.
25. Joint and Several Obligation. If Maker is more than one person
or entity, then (a) all persons or entities comprising Maker are jointly and
severally liable for all of the Maker's obligations hereunder; (b) all
representations, warranties, and covenants made by Maker shall be deemed
representations, warranties, and covenants of each of the persons or entities
comprising Maker; (c) any breach, Default or Event of Default by any of the
persons or entities comprising Maker hereunder shall be deemed to be a breach,
Default, or Event of Default of Maker; and (d) any reference herein contained to
the knowledge or awareness of Maker shall mean the knowledge or awareness of any
of the persons or entities comprising Maker.
26. WAIVER OF JURY TRIAL. MAKER AND HOLDER KNOWINGLY, IRREVOCABLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS NOTE, THE MORTGAGE, OR ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY
HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
MAKER AND HOLDER TO ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THIS NOTE.
27. WAIVER OF PREPAYMENT RIGHT WITHOUT PREMIUM. MAKER HEREBY
EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THIS NOTE,
IN WHOLE OR IN PART, WITHOUT PREPAYMENT PREMIUM (EXCEPT AS OTHERWISE PROVIDED
HEREIN), UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND AGREES THAT,
IF FOR ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THIS NOTE IS MADE, WHETHER
VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY
HOLDER ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY
REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR
RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY
PART THEREOF SECURING THIS NOTE, THEN MAKER SHALL BE OBLIGATED TO PAY,
CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM PROVIDED FOR IN THIS
NOTE OR, IN THE EVENT OF PREPAYMENT FOLLOWING ACCELERATION OF THE MATURITY DATE
HEREOF WHEN THIS NOTE IS CLOSED TO PREPAYMENT, AS PROVIDED IN THE MORTGAGE.
MAKER XXXXXX DECLARES THAT HOLDER'S AGREEMENT TO MAKE THE LOAN AT THE INTEREST
RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSIDERATION,
GIVEN INDIVIDUAL WEIGHT BY MAKER, FOR THIS WAIVER AND AGREEMENT.
28. Consolidation of Notes.
(a) This Note amends, supplements, modifies, restates and
consolidates in their entirety: (a) that certain Second Renewal Promissory Note
(the "Aetna Note") dated December 1, 1993 from Key Biscayne Limited Partnership
("KBLP"), as maker, and payable to the order of Aetna Life Insurance Company
("Aetna") in the original principal amount of $24,142,088.26, which Aetna Note
was endorsed by Aetna to the order of State Street Bank and Trust Company,
Trustee for the registered holders of Aetna Commercial Mortgage Trust Multiclass
Pass-Through Certificates, Series 1997-XXXX ("State Street") and subsequently
assumed by Maker, and which Aetna Note has an outstanding principal balance as
of the date hereof of $22,431,486.12, (b) that certain Purchase Money Mortgage
Note dated December 27, 1984 from Biscayne Beach Hotel Associates, Ltd.
("BBHA"), now known as KBLP, as maker, and payable to the order of Florida
Sonesta Corporation, a Florida corporation ("FSC"), in the original principal
amount of $5,000,000.00, as amended by Amendment of Note and Second Mortgage
dated September 12, 1991 (as amended, the "FSC $5MM Note"), which FSC $5MM Note
has an outstanding principal balance as of the date hereof of $5,000,000.00, and
(c) that
certain Purchase Money Mortgage Note dated December 27, 1984 from BBHA, as
maker, and payable to the order of FSC in the original principal amount of
$6,500,000.00, as amended by Amendment of Note and Third Mortgage dated
September 12, 1991 (as amended, the "FSC $6.5MM Note"), which FSC $6.5MM Note
has an outstanding principal balance as of the date hereof of $3,568,513.88.
(b) Maker is not the current obligor under the FSC $5MM Note
or the FSC $6.5MM Note. Maker hereby assumes the obligations of the makers under
the FSC $5MM Note and the FSC $6.5MM Note. Accordingly, the execution by Maker
of this Note evidences Maker's assumption of such promissory notes, and Florida
documentary stamp taxes are being paid in connection herewith, as described on
page 1 of this Note.
(c) The Aetna Note was endorsed to the order of the named
Holder hereof by way of a separate Allonge executed by State Street and attached
to the Aetna Note. The FSC $5MM Note and the FSC $6.5MM Note were each endorsed
to the order of the named Holder hereof by way of separate Allonges executed by
FSC and attached to such promissory notes.
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IN WITNESS WHEREOF and intending to be legally bound, Maker has duly
executed this Note as of the date first above written.
SONESTA BEACH RESORT LIMITED
PARTNERSHIP, a Delaware limited partnership
By: Florida Sonesta Corporation, a Florida
corporation, its General Partner
By: /s/
-----------------------------------
Xxxxx X. Xxxxxxxxx, Vice President
