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Exhibit 10.26

EXECUTION COPY
June 18, 2009

Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corporation
116 Huntington Avenue
Boston, MA 02116

Dear Peter:

As you know, we have had many conversations over the past several months
regarding SBR-Fortune Associates, LLLP, a Florida limited liability limited
partnership (the "Partnership").  This letter agreement is intended to supersede
all such discussions and conversations, none of which shall have any force or
effect.  All terms appearing in initial capitalized letters below shall have the
meanings ascribed thereto in the Agreement of Limited Liability Limited
Partnership of the Partnership, dated as of January 17, 2005, as amended by that
certain First Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of February 25, 2005, by that certain
Second Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of March 2, 2005, and by that certain
Third Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of April 15, 2005, as so amended, the
("Partnership Agreement").

This letter will constitute the agreement of the Partners and is intended to
modify and amend the Partnership Agreement as follows:

1. All funds advanced by or on behalf of any of the Partners or from third
parties from and after January 20, 2009 shall be referred to below as "New
Monies."  The repayment of all New Monies and the payment to HSBC Realty Credit
Corporation (USA) ("HSBC") of all sums due to HSBC pursuant to that certain Loan
Agreement, dated as of April 19, 2005, entered into by HSBC and the Partnership,
as amended to the date hereof (the "HSBC Indebtedness") shall be governed by the
provisions of Paragraph 5(a) below or as otherwise provided herein.  By their
execution below, the parties have agreed that the sum of the principal amount of
the New Monies and the principal amount of the HSBC Indebtedness shall not
exceed Sixty-Eight Million Dollars ($68,000,000.00) (the "Debt Cap"), unless
Sonesta, in its sole and absolute discretion, elects to permit the funding of
indebtedness in excess of such amount by or on behalf of either the Fortune
Partners or Sonesta. All New Monies funded which, when added to the principal
amount of the HSBC Indebtedness, do not exceed the Debt Cap are referred to as
the "First Tier New Monies." All New Monies funded which, when added to the
principal amount of the HSBC Indebtedness, exceed the Debt Cap are referred to
as the "Second Tier New Monies."
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 2 -
 

 
2. All New Monies funded by Sonesta shall bear simple interest at the rate of
fifteen percent (15%) per annum.  All New Monies caused to be funded by the
Fortune Partners from any person or party not controlled by Edgardo Defortuna
("Defortuna") shall bear simple interest at the rate of thirteen and one-half
percent (13.5%) per annum.  All New Monies caused to be funded by Defortuna or
any person or party controlled by Defortuna (which shall include any funding as
to which any of the Fortune Partners, Defortuna and/or any person or party
controlled by Defortuna bear the ultimate financial risk) shall not bear
interest.  All New Monies shall be funded in the form of a loan and, in the case
of New Monies which are not funded by Sonesta or any of its affiliates, will be
evidenced by a promissory note in the form attached hereto as Exhibit "A", or in
the case of New Monies funded by Sonesta or any of its affiliates, in the form
attached hereto as Exhibit "A-1" (each of the promissory notes evidencing New
Monies are referred to as a "New Monies Promissory Note"), which in each case
shall provide (i) a waiver by the applicable lender of any rights it may have at
law or in equity to initiate insolvency or Bankruptcy proceedings against the
Partnership in connection with the loans evidenced by each such New Monies
Promissory Note, and (ii) for a "maturity date" as provided in said New Monies
Promissory Note.
 
3. The first Six Million Dollars ($6,000,000.00) of New Monies to be funded from
and after January 20, 2009, shall be funded (i) fifty percent (50%) by or
through Sonesta and (ii) fifty percent (50%) by or through loans arranged by the
Fortune Partners; it being agreed that New Monies funds shall be contributed
from time to time in a manner that results in the New Monies contributions made
on behalf of Sonesta and the Fortune Partners to remain approximately equal
until each has reached the Three Million Dollar ($3,000,000.00)
threshold.  Sonesta shall not be required to provide any New Monies funds
pursuant to this Paragraph 3 until Sonesta has received confirmation that the
Fortune Partners or third parties have satisfied their equivalent New Monies
funding obligation.  From and after the date on which Sonesta and the Fortune
Partners have funded or caused to be funded their respective Three Million
Dollar ($3,000,000.00) New Monies obligations, and except as otherwise provided
herein, such as, for example, upon the election by Sonesta of the Forced Sale
Option, the Fortune Partners shall be solely responsible for causing all further
New Monies to be funded through the borrowing of additional funds from third
parties or Defortuna under additional New Monies Promissory Notes.  As of the
date of execution of this letter agreement, each of Sonesta and the Fortune
Partners have funded or caused to be funded Nine Hundred Thirty-Three Thousand
Nine Hundred Forty Dollars and 04/100 ($933,940.04) of New Monies.  One hundred
percent (100%) of the New Monies funded by the Fortune Partners to date has been
funded by Defortuna.  Each such funding has been made in accordance with the
terms of a New Monies Promissory Note, dated as of the date hereof (provided
that interest shall be retroactive to the date of actual funding).
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 3 -
 

 
4. 
 
(a) The Partners have agreed to sell the Property (and/or all of the Partnership
Interests). During the period commencing on the date hereof and ending on [**],
the Partnership will accept any Bona Fide Offer (defined below) received by it
for an all-cash purchase price of [**] or more. Any Bona Fide Offer that
includes a proposal for purchase money financing shall be subject to the mutual
agreement of the Partners acting reasonably.  As used herein, the term "Bona
Fide Offer" means a binding written offer to purchase the Property (or all of
the Partnership Interests) from a person or entity reasonably likely to have the
financial resources and/or access to financing necessary to close the offered
transaction, containing terms and conditions that are generally typical in the
then current market for properties similar to the Property, provided that in all
events such Bona Fide Offer must (a) provide for a cash security deposit in an
amount not less than [**], (b) a due diligence period of no more than thirty
(30) days, and (c) at the end of the due diligence period no less than [**] must
be 'hard" (i.e., at risk).
 
(b) If the Partnership is not then party to a binding agreement to sell the
Property (and the Partners are not then party to a binding agreement to sell all
of the Partnership Interests), then during the period commencing on [**] and
ending on [**], Sonesta shall have the sole right to cause the Partnership to
enter into an agreement (a "Sonesta Approved Agreement") to sell the Property
(or all of the Partnership Interests) pursuant to a Bona Fide Offer (provided
that the purchase price thereunder may be less than [**], if such purchase price
is acceptable to Sonesta; provided, however, that the consent of the Fortune
Partners shall be required for any above described proposed transaction whereby
Sonesta retains, directly or indirectly, any non de minimis interest in the
Property (or Partnership Interests) unless (i) as a result of the transaction,
including any funds advanced by Sonesta or third parties, the Fortune Partners,
Defortuna and third parties funding New Monies on behalf of the Fortune Partners
receive at the closing of said transaction the greater of (A) the amount said
parties would have received pursuant to the provisions of Paragraph 5(a) below
if the Property was sold for an all cash purchase price of [**] or (B) the
amount said parties would receive pursuant to the provisions of Paragraph 5(a)
below if the Property is sold for the consideration set forth in the Sonesta
Approved Agreement, and (ii) the closing date of said transaction is no greater
than ninety (90) days after the date of execution of the Sonesta Approved
Agreement.
 

 

 

 

 

 

 

 

 

 

 

 
[**] THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 4 -
 

 
(c) If the Partnership is not then party to a binding agreement to sell the
Property (and the Partners are not then party to a binding agreement to sell all
of the Partnership Interests), then during the period commencing on [**] and
continuing thereafter, if either the Fortune Partners or Sonesta notifies the
other that it elects to accept the then current all-cash Bona Fide Offer having
the highest proposed purchase price of all then current all-cash Bona Fide
Offers, then the Partnership shall accept such highest all-cash Bona Fide Offer;
provided, however, that if Sonesta notifies the Fortune Partners that Sonesta
rejects such proposed sale (which it may do only if it is not a Fortune Approved
Bona Fide Offer which Sonesta must accept pursuant to Paragraph 4(d)(ii) below),
then (i) the provisions of Paragraph 4(d) below shall apply and from and after
the date of a closing under the Buy Out Option described below, Sonesta shall
have the sole right to cause the Partnership to sell the Property (or all of the
Partnership Interests) on terms and conditions acceptable to Sonesta and (ii)
from and after the date on which Sonesta rejects the proposed Bona Fide Offer,
and notwithstanding anything to the contrary contained in Paragraph 3 above, the
Fortune Partners shall have no obligation to provide any additional funding to
the Partnership.
 
(d) 
 
(i) In the event the Partnership receives a Bona Fide Offer on or after [**] to
sell the Property or to have all of the Partners sell all of the Partnership
Interests which the Fortune Partners desire to accept, the Fortune Partners
shall notify Sonesta in writing of such Bona Fide Offer and their desire to
accept such offer (such notice, an "Acceptable Sale Notice", which shall include
a copy of the Bona Fide Offer in question [the "Fortune Approved Bona Fide
Offer"]); provided, however, that in order for a Bona Fide Offer to be capable
of constituting a Fortune Approved Bona Fide Offer under this Paragraph 4(d), in
addition to qualifying as a Bona Fide Offer pursuant to Paragraph 4(a) above,
such offer must also (A) provide no financing contingency and (B) provide a due
diligence period of no greater than fifteen (15) days if no funds are at risk or
a due diligence period of up to forty-five (45) days if an "at risk" deposit of
no less than [**] is placed in escrow. In addition, the Partners have agreed
that the first Five Hundred Thousand Dollars ($500,000.00) of any forfeited due
diligence deposit contained in a Fortune Approved Bona Fide Offer shall be
distributed to Sonesta and treated as a reduction in its Unreturned Capital
(provided that any other forfeited deposit shall be distributed to the
Partnership and not Sonesta exclusively).  Sonesta, within ten (10) Business
Days of receipt of the Acceptable Sale Notice, must notify the Fortune Partners
in writing whether Sonesta accepts or rejects the Fortune Approved Bona Fide
Offer.  In the event Sonesta fails to notify the Fortune Partners in writing
within the above described ten (10) Business Day period, then Sonesta shall be
deemed to have accepted the Fortune Approved Bona Fide Offer and the Partners
shall pursue a closing thereunder.  In the event Sonesta indicates in writing
within the above described ten (10) Business Day period that it rejects the
Fortune Approved Bona Fide Offer, then Sonesta shall be deemed to have elected
to purchase the Partnership Interests of the Fortune Partners (the "Buy-Out
Option").  In the event Sonesta elects the Buy-Out Option, (i) the Partnership
shall not accept the Fortune Approved Bona Fide Offer, and (ii) the provisions
of Paragraph 7.2 shall apply.
 

 

 

 
 
 

 
[**] THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 5 -
 

 
(ii) Notwithstanding anything to the contrary contained in Paragraph 4(c) or
Paragraph 4(d)(i) above, Sonesta must accept (and shall be deemed to accept) any
Fortune Approved Bona Fide Offer otherwise described in Paragraph 4(d)(i) which
provides for either:  (A) a purchase price that after deducting for reasonably
anticipated closing costs would result in sales proceeds [**], or (B) a purchase
price that after deducting for reasonably anticipated closing costs would result
in sales proceeds [**].  In the event Fortune proffers a Fortune Approved Bona
Fide Offer which provides for a purchase price that after deducting for
reasonably anticipated closing costs would result in sales proceeds [**], but
less than [**], then, in such event, Sonesta may reject such Fortune Approved
Bona Fide Offer, in which event, it shall be deemed to have elected the Buy-Out
Option, provided that, as a condition to doing so, Sonesta must provide an
indemnity to Defortuna from Sonesta International Hotels Corporation, a New York
corporation, in an amount equal to the lesser of (i) [**], or (ii) [**].  Such
indemnity shall be provided in a written agreement containing operative
indemnity provisions identical to those contained in Section 5 of the Release
and Indemnity Agreement referred to in Paragraph 7.1 below.
 
(iii) In the event of a sale under Paragraph 4(d)(ii)(A) above, Defortuna must
either (x)  pay to Sonesta upon the closing of such sale an amount equal to
[**], in which event the guaranty provided by Defortuna described in Paragraph 8
below shall be extinguished in its entirety upon such payment, or (y) not make
any payment to Sonesta in which event  the guaranty provided by Defortuna
described in Paragraph 8 below shall remain in full force and effect.
 
5. 
 
(a) Assuming the Fortune Partners have not defaulted in funding New Monies (as
described in and required by Paragraph 3 above) beyond the applicable Cure
Period (as defined in Paragraph 6(a)) (or for such additional cure period of
time provided in the Partnership Agreement in the event Sonesta elects the
Partnership Agreement Default Option) or if the Fortune Partners default in
their New Monies funding obligations and Sonesta elects the "Third Fork Option"
described in Paragraph 7.3 below, the net proceeds derived from any sale of the
Property or all of the Partnership Interests will be distributed as follows:
 
(i) first, to the payment of the HSBC Indebtedness;
 
(ii) next, to the payment of all Partnership liabilities, excluding (x) any
amounts payable to any of the Partners (which exclusion includes amounts payable
in respect of project administration fees or other fees or compensation payable
to the Fortune Partners and Hotel Shutdown Payments payable to Sonesta (which
Hotel Shutdown Payments shall be added to the Unreturned Capital of Sonesta))
and (y) all New Monies;
 
(iii) next, to the principal and interest on all New Monies Promissory Notes
issued in respect of First Tier New Monies (with all accrued interest being
payable to all First Tier New Monies lenders pari passu (in proportion to which
the accrued interest payable to each such lender in respect of the First Tier
New Monies bears to the total outstanding interest payable to all such lenders
in respect of the First Tier New Monies)) prior to the pari passu repayment of
outstanding principal in respect of the First Tier New Monies;
 
 
 
 
 
 
 

 

[**] THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 6 -
 

 
(iv) next, to the payment of the Sales Incentive Amount (as such term in defined
in Paragraph 5(b) below) to Fortune International Management, Inc.;
 
(v) next, to the principal and interest on all New Monies Promissory Notes
issued in respect of Second Tier New Monies (with all accrued interest being
payable to all Second Tier New Monies lenders pari passu (in proportion to which
the accrued interest payable to each such lender in respect of the Second Tier
New Monies bears to the total outstanding interest payable to all such lenders
in respect of the Second Tier New Monies)) prior to the pari passu repayment of
outstanding principal in respect of the Second Tier New Monies; and
 
(vi) then, the remaining proceeds shall be distributed pari passu to the Fortune
Partners in an amount equal to the Fortune Residual Distribution (as such term
is defined in Paragraph 5(b) below) and to Sonesta in an amount equal to the
Sonesta Residual Distribution (as such term is defined in Paragraph 5(b) below).
 
(b) For purposes of Paragraph 5(a) above, the following terms shall be defined
as follows:
 
(i) The "Sales Incentive Amount" shall be $1.5 million plus the Additional
Amount as determined by reference to the "gross sales price" of the Property or
Partnership Interests, as the case may be, as follows:
 
Gross Sales Price
Additional Amount
less than [**]
$0
[**] up to but less than [**]
$250,000
[**]or more
$500,000

 
For purposes of this letter agreement, the "gross sales price" shall equal the
cash and fair market value of any property received in the sale transaction, any
portion of the purchase price to be paid subsequent to the closing of the sale
transaction, including the face amount of any promissory notes received in the
sale transaction and the face amount of any and all liabilities of the
Partnership assumed by the purchaser upon the closing of the sale
transaction.  In calculating the “gross sales price,” closing costs shall be
allocated in conformity with the standard of practice for similar commercial
transactions in Miami-Dade County, Florida.
 
(ii) The "Fortune Residual Distribution" shall mean that portion of the
aggregate proceeds distributable to the Partners pursuant to Paragraph 5(a)(vi)
above determined by the product of (A) fifty percent (50%), and (B) a fraction
the numerator of which shall be the Capital Contributions of the Fortune
Partners and the denominator of which is the Capital Contributions of all of the
Partners.  For example, if, on or before October 31, 2009, the aggregate
proceeds distributable to the Partners pursuant to Paragraph 5(a)(vi) above is
Twenty Million Dollars ($20,000,000.00) and the Capital Contributions of the
Fortune Partners is Thirty-Eight Million Dollars ($38,000,000.00) and the
aggregate Capital Contributions of Sonesta is Fifty-Eight Million Dollars
($58,000,000.00), the Fortune Residual Distribution would be
 

 
 
 

 

[**] THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 7 -
 

 
 [$20,000.000 x 50% x (38 / 38+58) = $3,958,333]
 

(iii) The "Sonesta Residual Distributions" shall mean the excess of (A) the
aggregate proceeds distributable to the Partners pursuant to Paragraph 5(a)(vi)
above, over (B) the Fortune Residual Distributions.  Accordingly, under the
example set forth in Paragraph 5(b)(ii) above, the Sonesta Residual
Distributions shall be
 
[$20,000,000 - $3,958,333 = $16,041,667]
 

 
6. 
 
(a) If the Fortune Partners default in funding New Monies as provided in
Paragraph 3 above, then (i) the Fortune Partners shall promptly deliver written
notice of the facts and circumstances of such non-payment to Sonesta and (ii)
the Fortune Partners shall be in default hereunder.  Upon being notified of such
default by Fortune or becoming aware of such default independently, Sonesta
shall promptly provide the Fortune Partners a written default notice related
thereto and the Fortune Partners shall be permitted a period of thirty (30) days
from the date of receipt of the written notice from Sonesta to cure such default
(the "Cure Period").  If the Fortune Partners do not cure such default within
the Cure Period, then within fifteen (15) Business Days following the expiration
of the Cure Period, Sonesta shall provide written notice (the "Election Notice")
to the Fortune Partners in which Sonesta must affirmatively elect to either (x)
pursue its rights under Section 5.3 of the Partnership Agreement (the
"Partnership Agreement Default Option"), (y) pursue the "Third Fork Option"
provided in Paragraph 7.3 below, or (z) elect to cause the assignment of the
Partnership Interests of the Fortune Partners in accordance with Paragraph 7.1
hereof (the "Forced Sale Option"); provided that as a condition precedent to
exercising the Forced Sale Option or the Partnership Agreement Default Option,
Sonesta must, simultaneous to its exercise of the Forced Sale Option or
Partnership Agreement Default Option, as the case may be, fund the amount of the
Fortune Partners’ default.  Immediately upon the delivery of the Election Notice
to the Fortune Partners by Sonesta under this Paragraph 6(a) to exercise the
Forced Sale Option, all rights to exercise control over the day-to-day
management of the Partnership shall automatically vest in Sonesta (or its
designee), and such rights to control the day-to-day operations of the
Partnership shall remain vested in Sonesta (or its designee), unless and until
the provisions of the last sentence of Paragraph 18 are applicable.
 
(b) In the event that Sonesta elects the Partnership Agreement Default Option,
the terms of Section 5.3 of the Partnership Agreement shall apply, the amount
advanced by Sonesta to cure defaults shall be treated as a Default Financing and
the Cure Period provided in Paragraph 6(a) above shall be considered to be and
shall satisfy the thirty (30) day cure period required to be provided pursuant
to Section 5.3(a) of the Partnership Agreement.
 
(c) In the event that Sonesta elects the Forced Sale Option, the provisions of
Paragraph 7.1 below shall apply.
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 8 -
 

 
7.1           Effect of Forced Sale Option
 
(a)           In the event Sonesta elects the Forced Sale Option either (i)
within the time period provided in Paragraph 6(a) above or (ii) after Sonesta
has elected the Third Fork Option as provided and in accordance with Paragraph
7.3 below (and after the expiration of the applicable cure period provided
therein without a cure by the Fortune Partners), Sonesta shall direct the Escrow
Agent (as such term is defined in Paragraph 7.1(b) below) to insert the
"Effective Date" in each of the Escrowed Documents (as such term is defined in
Paragraph 7.1(b) below) and deliver the original Escrowed Documents from escrow
to the party in whose favor the particular Escrow Document has been executed,
with copies of each of the Escrow Documents provided to both Sonesta and the
Fortune Partners.  As used herein, the term “Effective Date” means the date the
Escrow Agent receives the Election Notice electing the Forced Sale Option.
 
(b)           In order to effectuate the provisions of this Paragraph 7.1 and in
order to assure an expedited closing in the event Sonesta elects to exercise the
Forced Sale Option, the following documents (the "Escrowed Documents") shall be
executed, in the forms attached hereto, contemporaneously with the execution of
this letter agreement, and deposited with Bilzin Sumberg Baena Price & Axelrod
LLP (the "Escrow Agent") to be held in escrow in accordance with the terms of
this letter agreement and the Escrow Agreement referred to below:
 
(i)  
Sales Incentive Amount Promissory Note in the form attached hereto as Exhibit
"B";

 
(ii) Assignments of Partnership Interest;
 
(iii)  
Release and Indemnity Agreement in the form attached hereto as Exhibit "C"; and

 
(iv) Escrow Agreement.
 
7.2           Effect of Buy-Out Option.
 
(a) In the event Sonesta elects the Buy-Out Option pursuant to Paragraph 4(d)
above, Sonesta shall direct the Escrow Agent to insert the "Effective Date" in
each of the Escrowed Documents and deliver the original Escrowed Documents from
escrow to the party in whose favor the particular Escrow Document has been
executed, with copies of each of the Escrow Documents provided to both Sonesta
and the Fortune Partners.  As used in this Paragraph 7.2, the term “Effective
Date” means the date on which date the Escrow Agent receives a copy of a written
notice from Sonesta notifying the Fortune Partners of Sonesta’s election of the
Buy-Out Option in accordance with Paragraph 4(d)(i) above.
 

 
 

--------------------------------------------------------------------------------

 

Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 9 -
 

 
(b) In addition to the release of the Escrowed Documents, as a condition to a
closing under the Buy-Out Option, Sonesta shall pay to the holders of the New
Monies Promissory Notes the sum of all principal and interest due under the New
Monies Promissory Notes held by them to the extent proceeds would have been
available for such payments under the transaction contemplated by the Fortune
Approved Bona Fide Offer, which payments shall be made on or before the earliest
to occur of (i) ninety (90) days following the Effective Date (as such term is
defined in Paragraph 7.2(a) above), (ii) the closing date of a sale of the
Property (or all or substantially all of the Partnership Interests) or (iii) the
date of admission of a new partner into the Partnership. In addition, the
following amounts shall be paid to the extent proceeds would have been available
for such payments under the transaction contemplated by the Fortune Approved
Bona Fide Offer on the earliest to occur of (x) twelve (12) months after the
Effective Date (as such term is defined in Paragraph 7.2(a) above), (y) the date
of admission of a new partner into the Partnership, or (z) the closing date of a
sale of the Property (or all or substantially all of the Partnership
Interests):  (A) to Fortune International Management, Inc., the Sales Incentive
Amount and (B) to the Fortune Partners an amount equal to fifty percent (50%) of
the Fortune Residual Distributions to which Fortune would have been entitled if
the Property or Partnership Interests, as the case may be, were sold for the
sales price provided in the Fortune Approved Bona Fide Offer.
 
7.3           Third Fork Option.
 
In the event Sonesta elects the Third Fork Option pursuant to Paragraph 6(a)
above, then in such event, all of the provisions of this letter agreement other
than Paragraphs 7.1, 7.2, 11 and 14 shall remain operative.   Notwithstanding
the election by Sonesta of the Third Fork Option, Sonesta may thereafter either
(i) fund the amount of the Fortune Partners' default and invoke the Forced Sale
Option described in Paragraph 7.1 above; provided, however that as a condition
to electing the Forced Sale Option pursuant to this Paragraph 7.3, Sonesta must
first provide the Fortune Partners with written notice that it has funded the
Fortune Partners' default amount and provide the Fortune Partners with a period
of thirty (30) days from receipt of said notice to cure the default, and in the
event the Fortune Partners do not cure said default, the provisions of Paragraph
7.1 shall apply or in the event the Fortune Partners do cure said default within
said thirty (30) day period, the default shall be deemed cured for all purposes
of this letter agreement or (ii) fund the amount of the Fortune Partners'
default and invoke the Partnership Agreement Default Option.

 

 
 

--------------------------------------------------------------------------------

 

Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 10 -
 

 
8. Except as provided in Paragraph 4(d)(iii) hereof, upon the occurrence of a
(i) sale of the Property (whether effected directly or via merger or
consolidation of the Partnership), (ii) sale of all or substantially all of the
Partnership Interests (whether effected directly or via merger or consolidation
of the Partnership or via the sale of all or substantially all of the equity
interests in Sonesta or Florida Sonesta Corporation), (iii) admission of one (1)
or more persons or entities as partners in the Partnership (or the Partnership
closing on a loan which contains either a conversion feature allowing the holder
to acquire equity in the Partnership or provides for some level of participation
by the lender in the Partnership's revenues, profits or cash flow), or (iv) the
entering into by the Partnership of a joint venture or similar arrangement
pursuant to which a third party or parties obtain(s) more than a de minimis
direct or indirect interest in the Property, Defortuna shall be deemed released
from any and all of his individually guaranteed obligations under the
Partnership Agreement, including but not limited to those obligations set forth
in Sections 4.4(a)(4), 4.4(c)(3), 7.2 and 8.6(e) of the Partnership Agreement. 
As a condition to a closing of any of the transactions described in this Section
8, the Release and Indemnity Agreement in the form attached hereto as Exhibit
"8" shall be executed and delivered by all of the parties thereto.
 
9. As of the Effective Date of the Release and Indemnity Agreement attached
hereto in the form of Exhibit "C" or the Release or Indemnity Agreement attached
hereto in the form of Exhibit "8" and continuing for so long as Sonesta has an
interest in the Property, Defortuna agrees not to make any public statements
which disparage Sonesta or the Property or which are materially likely to impair
the value or marketability of the Property (which agreement shall not prohibit
the Fortune Partners and/or Defortuna from maximizing the value of projects that
are competitive to the Property).
 
10. Notwithstanding anything to the contrary contained in the Partnership
Agreement, as amended hereby, under no circumstances shall a Bankruptcy or the
dissolution of one or both of the Fortune Partners result in the automatic
dissolution of the Partnership without the written consent of Sonesta.
 
11. If Sonesta exercises the Partnership Agreement Default Option or the Forced
Sale Option, then, notwithstanding any other prior agreement to the contrary,
Sonesta shall have the right to engage the consulting services of Joseph Herndon
("Herndon") through the Fortune Partners (or their respective affiliates) for
consulting services to the Property at a rate based upon Herndon’s current
actual pay rate plus a twenty-five percent (25%) overhead fee.  In such event,
Herndon shall be permitted by the Fortune Partners (or their affiliates) to
perform services for the benefit of the Property substantially similar to those
he has performed prior to the date hereof (unless otherwise directed by
Sonesta).
 
12. This letter agreement shall be governed by Florida law.  Except to the
extent specifically amended or modified by the terms of this letter agreement,
the terms of the Partnership Agreement shall remain in full force and effect.
 
13. Each party hereto hereby represents and warrants that the individual
executing this letter agreement on behalf of such party is duly authorized to
execute, deliver and perform this letter agreement on behalf of such party and
to bind such party to its agreements herein and that this letter agreement is
enforceable against such party in accordance with its terms.
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 11 -
 

 
14. In the event that under the terms of this letter agreement Sonesta acquires
the Partnership Interests of the Fortune Partners, whether as a result of the
exercise of the Forced Sale Option or the Buy-Out Option, then the Fortune
Partners agree that as of the effective date of such acquisition, they shall
facilitate an orderly transition of the day-to-day operation of the Property and
of the books and records of the Partnership to Sonesta.
 
15. In addition to the foregoing, by their execution below, the Partners have
agreed that:
 
(a) from and after the date of execution of this letter agreement, each of the
Partners shall be authorized and permitted to speak with Holliday Fenoglio &
Fowler, L.P. and one or more third parties concerning a possible sale of the
Property or the Partnership Interests (and shall advise the other Partners of
such meetings in advance thereof, to the extent practicable); and
 
(b) from and after the date of execution of this letter agreement, Sonesta shall
be authorized and permitted to meet and/or have discussions with HSBC provided
that Sonesta shall endeavor to notify Fortune GP at least two (2) days in
advance of any such meeting/discussion so that the Fortune GP may participate
therein.
 
16. Notwithstanding anything to the contrary contained in this letter agreement,
when the term "admission of new partners" or words of similar import are used
herein, such term shall include the closing of any financing or loan transaction
which contains either a conversion feature allowing the holder to acquire equity
in the Partnership or provides for some level of participation by the lender in
the Partnership's revenues, profits or cash flow (excluding agreements, such as
an assignment of leases and rents, that are typically a part of a mortgage
financing transaction).
 
17. The Partners agree and understand that confidentiality of the existence and
the terms of this letter agreement are material and essential elements of this
letter agreement.  Accordingly, the Partners agree that each will keep the terms
of this letter agreement confidential at all times, except in the event
disclosure shall be required by a subpoena, an order of a court of competent
jurisdiction or a governmental agency empowered to compel or require such
disclosure, or, if necessary to enforce any provision of this letter agreement,
or such disclosure is required by law. Each  Partner acknowledges that no remedy
of law may be adequate to compensate the injured party for a violation of this
Paragraph 17 and each of them hereby agrees that, in addition to any legal or
other rights that may be available in the event of a breach hereunder, the
injured party may seek equitable relief to enforce this Paragraph 17 in any
court of competent jurisdiction.   In any such action brought by any of
the Partners, the prevailing party shall be entitled to recover reasonable
attorneys’ fees, court costs and expenses through and including all appeals. The
Fortune Parties hereby acknowledge that Sonesta is directly or indirectly
controlled by entities that are publicly traded companies.  Sonesta shall be
permitted to rely on the advice of its outside legal counsel in determining the
extent to which disclosure of this letter agreement or portions thereof may be
legally required.  Any third party providing New Monies on behalf of the Fortune
Partners hereunder shall be required to execute a Confidentiality Agreement in
the form attached hereto as Exhibit "E".
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 12 -
 

 
18. From and after the date on which any monetary or material, non-monetary
default arises under the HSBC Indebtedness and the holder of the HSBC
Indebtedness either provides a notice of default or commences or threatens to
commence enforcement actions, and in all events from and after the date which is
thirty (30) days prior to the maturity date of the HSBC Indebtedness, as
extended, in recognition of the personal guaranty of the HSBC Indebtedness
executed by Defortuna, the Partners have agreed that, if such personal guaranty
then remains in effect, Defortuna shall be permitted to participate in
unilateral conversations with HSBC in respect of said indebtedness.  In
addition, in the event that, as of twenty (20) days prior to the maturity date
of the HSBC Indebtedness, as extended, (a) such personal guaranty then remains
in effect, (b) the Partnership is not then a party to a binding agreement to
sell the Property for a purchase price equal to or greater than the principal
balance due under the HSBC Indebtedness or an amount less than the HSBC
Indebtedness if such binding sales agreement was the subject of a Fortune
Approved Bona Fide Offer, then the Partners agree that the Partnership shall
enter into a transaction whereby Defortuna (y) obtains exclusive control of the
Property (whether by the Partnership's execution of a deed in his favor or
otherwise) at least ten (10) days prior to the maturity date of the HSBC
Indebtedness, as extended, and (z) agrees that the proceeds of any sale of the
Property thereafter shall be distributed in accordance with Paragraphs 5(a)(i)
through (vi) hereof.
 
19. In no event and under no circumstance may any of the Partners initiate or
consent to any Bankruptcy (as defined in Section 10.1(b) of the Partnership
Agreement) or transaction having similar force or effect without the prior
written consent of all Partners; provided that the Fortune Partners may initiate
or consent to any Bankruptcy without the prior consent of Sonesta from and after
the date, if any, on which exclusive control of the Property is transferred to
Defortuna as provided in Paragraph 18 above; provided that as a condition
precedent to such Bankruptcy filing, the Fortune Partners must first take an
assignment of the Sonesta Partnership Interest or otherwise obtain the consent
of Sonesta.  In furtherance of the forgoing, Sonesta agrees that upon issuance
of a written notice from the Fortune GP which written notice can only be issued
under the circumstances and within the time frame set forth in Paragraph 18
above, Sonesta shall be deemed to have transferred and assigned its Partnership
Interest to the Fortune LP effective as of three (3) Business Days prior to the
actual Bankruptcy filing; it being agreed that Sonesta shall have the right to
cause Fortune LP to reassign Sonesta its Partnership Interest in the event such
Bankruptcy filing does not occur.
 
20. This letter agreement, together with the Partnership Agreement, contains the
entire understanding among the parties and supersedes any prior understandings
and agreements among them respecting the subject matter of this letter
agreement.  The Partnership Agreement, as modified hereby, remains in full force
and effect.
 
21. The Fortune Partners hereby represent and warrant to Sonesta that the
schedule set forth on Exhibit “D” attached hereto is a true and compete list of
all material agreements and instruments underlying the HSBC Indebtedness and any
other obligations of the Partners or Defortuna with respect thereto.
 

 
 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 13 -
 

 
22. Notwithstanding anything to the contrary contained herein, under no
circumstances shall (i) any transfer of the Partnership Interests of the Fortune
Partners to Sonesta in accordance with Paragraphs 7.1 or 7.2 hereof, (ii) any
foreclosure action by any lender or (iii) any transfers or conveyances
effectuated between the Partners or to any lender in accordance with clause (y)
of Paragraph 18 hereof be deemed to be a transfer of Partnership Interests or a
sale of the Property for the purposes of Paragraphs 5 and 8 hereof; provided
that nothing contained in this Paragraph 22 shall in any way invalidate or limit
the effectiveness of the Release and Indemnity Agreement to be executed and
delivered in the event of a transfer of the Partnership Interests of the Fortune
Partners to Sonesta in accordance with Paragraphs 7.1 or 7.2 hereof.
 
23. each of sonesta and the fortune parties acknowledge that the funding of new
monies contributions by the other in the amount of Nine Hundred Thousand Dollars
($900,000.00) on or before June 25, 2009 is essential to each party’s
willingness to enter into this letter agreement.  Accordingly, notwithstanding
anything to the contrary contained herein, in the event that either the fortune
partners or sonesta breaches its obligation to fund or cause to be funded New
Monies in an amount not less than Nine Hundred Thousand Dollars ($900,000.00) on
or before June 25, 2009 in accordance with the provisions of Paragraph 3 hereof,
then the non-defaulting party shall have the right to terminate this letter
agreement upon written notice delivered to the defaulting party within ten (10)
business days following the date of such default.  If such termination occurs,
then the Partnership Agreement shall be operative as if this letter Agreement
had never been executed.
 
24.           This letter agreement may be executed in several counterparts and
all so executed shall constitute one agreement binding on all of the parties,
notwithstanding that all of the parties are not signatory to the original or the
same counterpart.  In addition, any counterpart signature page may be
executed  and delivered by facsimile or portable document format ("PDF") and any
such faxed or PDF signature pages may be attached to one or more counterparts of
this letter agreement, and such faxed or PDF signature(s) shall have the same
force and effect as if original signatures had been executed and delivered in
person.
 
25.           The parties acknowledge that this is a negotiated agreement, and
that in no event shall the terms of this letter agreement be construed against
any party on the basis that such party, or its counsel, drafted this letter
agreement
 

 

 

 
[EXECUTIONS COMMENCE ON FOLLOWING PAGE]
 

 

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Peter J. Sonnabend, Executive Chairman
Sonesta International Hotels Corp.
June 18, 2009
Page - 14 -
 

 
Please indicate your consent to the terms of this letter agreement by signing
and dating a duplicate copy of this letter and returning it to the undersigned.
 

 
Fortune KB GP, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
Manager

By:            /s/ Edgardo
Defortuna                                                      
Edgardo Defortuna, President

Fortune KB, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
Manager

By:            /s/ Edgardo
Defortuna                                                      
Edgardo Defortuna, President

Agreed and accepted this      18th       day of
June, 2009.

Sonesta Beach Resort Limited Partnership,
a Delaware limited partnership

By:           Florida Sonesta Corporation,
a Florida corporation

By:             /s/ Peter J.
Sonnabend                                                      
Peter J. Sonnabend,
Vice President

 
 

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Exhibit "A"

FINAL FORM

PROMISSORY NOTE

U.S. $____________
As of _________ __, 20__ ("Effective Date")
 
 

RECITALS
 
A.           As of the Effective Date, __________________, a ___________
("Lender") advanced to SBR-Fortune Associates, LLLP, a Florida limited liability
limited partnership            (the "Partnership" or "Borrower"), the sum of
__________________ Dollars ($__________).
 
B.           The Partnership is governed by that certain Agreement of Limited
Liability Limited Partnership dated as of January 17, 2005, as amended by that
certain First Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of February 25, 2005, and by that certain
Second Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of March 2, 2005, and by that certain
Third Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of April 15, 2005, and by that certain
letter agreement (the "Letter Agreement"), dated as of June 18, 2009
(collectively, the "Partnership Agreement").  All terms appearing herein in
initial capitalized letters but not otherwise defined herein shall have the
meanings ascribed thereto in the Partnership Agreement.
 
C.           The Partners agreed that "New Monies" (as such term is defined in
the Letter Agreement) advanced to the Partnership on or after January 20, 2009
would bear interest, under certain circumstances, at stated rates and would be
entitled to certain priorities of repayment, as more fully provided in the
Letter Agreement.  This Promissory Note (the "Note") is evidence of an advance
of New Monies, and more specifically of [First Tier/Second Tier New Monies (as
defined in the Letter Agreement)].
 
D.           This Note evidences that, as of the Effective Date, Lender advanced
to  Borrower the sum of ____________________Dollars ($_______).
 
THEREFORE, FOR VALUE RECEIVED, Borrower hereby promises to pay to  Lender the
principal amount of ____________ Dollars ($___________), together with all other
amounts added thereto pursuant to this Note, together with interest accrued from
the Effective Date on the balance of principal from time to time outstanding, in
United States currency, at the rates and at the times hereinafter
described.  Payments shall be made to Lender at ________________, Suite _____,
_____________, _______ _____, Attn:  ____________ (or such other address as
Lender may hereinafter designate in writing to Borrower).
 

 
 

--------------------------------------------------------------------------------

 

 
1. Principal and Interest Payments.
 
1.1 All of the principal and accrued but unpaid interest under this Note shall
be due and payable without notice or demand of any kind or nature on the
"Maturity Date"; provided however, that mandatory prepayments shall be required
under the circumstances described in and pursuant to Section 2 below.  By its
execution below, Borrower agrees that, without Lender's written consent, it
shall not issue or incur any indebtedness of any type or nature which is senior
in payment or priority to all sums hereunder other than the HSBC Indebtedness
(as defined below); provided that if this Note evidences an advance of "Second
Tier New Monies" (as such term is defined in the Letter Agreement), the
repayment of the principal and interest due hereunder shall be subordinated to
certain payments as provided in Paragraph 5(a) of the Letter Agreement. Subject
to the preceding sentence, Borrower shall not distribute any cash or property to
its constituent partners prior to the full and complete repayment of all
principal and interest under this Note.  For purposes of this Note, the Maturity
Date will be the day (such day, the "HSBC Discharge Date") on which all sums due
to HSBC Realty Credit Corporation (USA) ("HSBC") under that certain Loan
Agreement entered into by and between HSBC and the Partnership as of April 19,
2005, (as the same may be extended, the "HSBC Indebtedness") are paid in full
resulting in the HSBC Indebtedness being extinguished and satisfied in full;
provided however that in the event any of the dates set forth in clauses (A)
through (F) of Section 1.2 below occurs prior to the HSBC Discharge Date, the
Maturity Date shall be accelerated to be the first of the dates set forth in
clauses (A) through (F) of Section 1.2 below (each, an "Accelerated Maturity
Date").
 
1.2 For purposes of this Note, the Accelerated Maturity Dates shall be:
 
(A)           the date of the closing of a sale of all or substantially all of
the property owned by the Partnership (the "Property") (whether effected
directly or via merger or consolidation of the Partnership), but specifically
excluding (i) any transfer of the Partnership Interests of the Fortune Partners
to Sonesta in accordance with Paragraphs 7.1 or 7.2 of the Letter Agreement and
(ii) any transfers or conveyances made in accordance with clause (y) of
Paragraph 18 of the Letter Agreement;
 
(B)           five (5) years from the Effective Date;
 
(C)           the date of the closing of a sale of all or any portion of the
partnership interests owned by one or more partners in the Partnership (whether
effected directly or via merger or consolidation of the Partnership or via the
sale of all or substantially all of the equity interests in Sonesta Beach Resort
Limited Partnership, Florida Sonesta Corporation or via  the entering into by
the Partnership of a joint venture or similar arrangement pursuant to which a
third party or parties obtain(s) more than a de minimis direct or indirect
interest in the Property), but specifically excluding (i) any transfer of the
Partnership Interests of the Fortune Partners to Sonesta in accordance with
Paragraphs 7.1 or 7.2 of the Letter Agreement and (ii) any transfers or
conveyances made in accordance with clause (y) of Paragraph 18 of the Letter
Agreement;
 
(D)           the date of the closing of a refinancing of the HSBC Indebtedness
provided however that on such Accelerated Maturity Date, the payment required
hereunder shall be limited to the "Excess Available Proceeds" as such term is
defined in Section 2 below and the accrued interest and outstanding principal
under this Note which remains unpaid on such Accelerated Maturity Date shall be
paid in full on the next occurring Accelerated Maturity Date or the Maturity
Date, as the case may be;
 

 
 

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(E)           the date of admission of one or more partner(s) in the Partnership
subsequent to the Effective Date (such date, the "New Partner Admission Date");
or
 
(F)           ninety (90) days after the "Effective Date" of the exercise of the
Buy-Out Option as provided in Paragraph 7.2 of the Letter Agreement, provided
that the payments required to be made in such circumstance may be limited to and
as provided in said Paragraph 7.2 of the Letter Agreement.
 
Notwithstanding anything to the contrary contained herein, in the event the
Accelerated Maturity Date is determined pursuant to either (i) clause (C) above
in a case in which Sonesta maintains an interest of no less than fifty percent
(50%) of the Partnership Interests in the Partnership (a "Sonesta Retained
Interest Transaction"), or (ii) clause (E) above as a result of the admission of
one or more persons as partners in the Partnership on or after the Effective
Date, the Partnership may elect to extend the Maturity Date to a date (the
"Extended Maturity Date") that is twelve (12) months following the closing date
under clause (C) above or the New Partner Admission Date, as applicable
(whichever of such dates is applicable is referred to as the "Trigger Date");
provided that such election must be made in writing by the Partnership and
delivered to Lender no later than ten (10) Business Days following the Trigger
Date and as a condition precedent to the extension of the Maturity Date to the
Extended Maturity Date, from and after the Trigger Date, interest shall be paid
monthly in arrears on the last day of each month and in the event all amounts
due hereunder are not paid on the Extended Maturity Date, Lender shall have the
unilateral right to cause the Partnership to sell the Property pursuant to the
provisions of Section 6(n) below.  In the event the Maturity Date is extended to
the Extended Maturity Date, all references in other provisions of this Note to
the Maturity Date shall be deemed to be references to the Extended Maturity
Date.
 
1.3 In all events in which an Accelerated Maturity Date is determined by
reference to clauses (A), (C) or (D) of Section 1.2 above, or in which the
Extended Maturity Date applies as a result of a Sonesta Retained Interest
Transaction, the payment of any amount under this Note shall be subordinated as
follows:
 
(a) first, to the satisfaction and discharge in full of the HSBC Indebtedness;
 
(b) next, to the payment of all Partnership liabilities, excluding (x) any
amounts payable to any of the Partners (which exclusion includes amounts payable
in respect of project administration fees or other fees or compensation payable
to the Fortune Partners and Hotel Shutdown Payments payable to Sonesta (which
Hotel Shutdown Payments shall be added to the Unreturned Capital of Sonesta))
and (y) all New Monies;
 
(c) next, to the holders of all First Tier New Monies promissory notes, with all
accrued interest being payable to such holders pari passu in proportion to which
the accrued interest payable to each such holder in respect of the First Tier
New Monies bears to the total outstanding interest payable to all such holders
in respect of the First Tier New Monies, prior to the pari passu repayment of
outstanding principal in respect of the First Tier New Monies; provided,
however, that in the event the Accelerated Maturity Date is determined by
reference to clause (D) of Section 1.2 above, or in which the Extended Maturity
Date applies as a result of a Sonesta Retained Interest Transaction, the accrued
interest and outstanding principal, if any, in respect of First Tier New Monies
which remains unpaid on the Accelerated Maturity Date, shall be paid in full on
the next occurring Accelerated Maturity Date or the Maturity Date, as the case
may be;
 
[and in the case of Second Tier New Monies]
 

 
 

--------------------------------------------------------------------------------

 

 
(d) next, to the payment of the Sales Incentive Amount (as such term is defined
and calculated in accordance with the Letter Agreement); and
 
(e) next, to the holders of all Second Tier New Monies promissory notes, with
all accrued interest being payable to such holders pari passu in proportion to
which the accrued interest payable to each such holder in respect of the Second
Tier New Monies bears to the total outstanding interest payable to all such
holders in respect of the Second Tier New Monies, prior to the pari passu
repayment of outstanding principal in respect of the Second Tier New Monies;
provided, however, that in the event the Accelerated Maturity Date is determined
by reference to clause (D) of Section 1.2 above or in which the Extended
Maturity Date applies as a result of a Sonesta Retained Interest Transaction
above, the accrued interest and outstanding principal, if any, in respect of
Second Tier New Monies which remains unpaid on the Accelerated Maturity Date,
shall be paid in full on the next occurring Accelerated Maturity Date or the
Maturity Date, as the case may be.
 
2. Mandatory Prepayments.  A mandatory prepayment shall be required hereunder on
the date of a closing of a refinancing of the HSBC Indebtedness (which
refinancing is for an amount in excess of the balance of the HSBC Indebtedness
existing on the date of the closing of the refinancing) to the extent that
proceeds are available therefrom following the payment of all related loan
refinancing closing costs (such excess, the "Excess Available Proceeds").  Such
mandatory prepayment shall be in the amount of all Excess Available Proceeds and
shall be subject to the terms of Section 1.3 above.
 
3. Interest Rate.  From and after the Effective Date through and including the
Maturity Date, interest shall accrue upon the unpaid principal balance of this
Note at the annual rate of _________ percent (__%) per annum [No interest for
Defortuna/Defortuna controlled person/entity; otherwise 13.5%].  All interest
which is unpaid at the end of any calendar year shall be added to the principal
amount of this Note on the first day of the succeeding calendar year. Except as
provided in the penultimate sentence of Section 1.2 above, all interest accruing
under this Note shall be payable on the Maturity Date.
 
4. Prepayment.  This Note shall be prepayable, in whole or in part, at any time
and from time to time without premium or penalty at the sole option of Borrower,
with the amount of the prepayment being credited first to accrued but unpaid
interest and then to principal.
 
5. Default.  The occurrence of any one or more of the following events,
circumstances, or conditions shall constitute a default hereunder ("Event of
Default"): (a) failure of Borrower (which term shall mean and include Borrower
and/or each borrower, endorser, surety, and guarantor of this Note) to pay to
Lender within five (5) days of the due date (whether at scheduled maturity, upon
acceleration or otherwise) any installment of principal or of interest due under
this Note or any fees owing to Lender; (b) the failure of Borrower to comply
with any of the provisions of Section 1 above;  (c) Borrower makes a general
assignment for the benefit of creditors; (d) a receiver, custodian, liquidator,
trustee or like officer of Borrower is appointed to take custody, possession or
control over any property and such appointment is not discharged within sixty
(60) days thereafter; (e) proceedings are instituted by or against Borrower
under any bankruptcy code or act or insolvency law and such proceedings remain
undismissed for a period of sixty (60) days thereafter; (f) the Partnership
receives a notice of acceleration of the HSBC Indebtedness following a default
by the Partnership thereunder and delivers such notice promptly upon receipt to
Lender; or (g) the Partnership issues, promises to issue or otherwise becomes
liable for repayment of loans or borrowings which provide for priority of
repayment senior to the "new monies" evidenced by this Note; provided that if
this Note evidences an advance of Second Tier New Monies, the repayment of the
principal and interest due hereunder shall be
 

 
 

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subordinated to certain payments as provided in Paragraph 5(a) of the Letter
Agreement. At any time after the occurrence of an Event of Default, the
indebtedness evidenced by this Note and/or any note(s) or other obligation(s)
which may be taken in renewal, extension, substitution, or modification of all
or any part of the indebtedness evidenced hereby or thereby and all other
obligations of Borrower to Lender howsoever created shall, at the option of
Lender, immediately become due and payable without demand upon or notice to
Borrower, and Lender shall be entitled to exercise all remedies available at
law.  Any failure to exercise this option of acceleration shall not constitute a
waiver of the right to exercise the same at any future time or for any other
event.  Lender's remedies contained in this Note shall be cumulative and
concurrent, and may be pursued singly, successively, or together at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
occur.  Upon the occurrence of an Event of Default interest shall accrue under
this Note on the outstanding principal balance at the interest rate of eighteen
percent (18%) per annum (the "Default Rate").
 
6. Enforcement Costs.  If this Note is not paid promptly in accordance with its
terms and is placed in the hands of an attorney for collection or if suit be
instituted on the Note, and as often as this Note is placed in the hands of an
attorney for collection and as often as suit is filed to collect this Note,
Borrower agrees to pay, in addition to the unpaid principal balance and all
accrued and unpaid interest, reasonable attorneys' fees and paralegal fees
through all tribunal levels, plus all costs and expenses of collection together
with all other expenses in connection therewith, and interest on any judgment
obtained by Lender at the Default Rate, including interest at the Default Rate
from and after the date of the occurrence of such Event of Default until actual
payment is made to Lender of the full amount due Lender.
 
7. General Provisions.
 
(a) Extensions and Renewals.  Without notice and without releasing the liability
of a party, Lender may grant extensions, renewals and indulgences from time to
time and for any term or terms.
 
(b) Waiver.  Borrower waives presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all other notices in connection with delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its
liability shall be unconditional, without regard to the liability of any other
party, and shall not be affected in any manner by any indulgence, extension of
time, renewal, waiver or modification granted or consented to by
Lender.  Borrower consents to any and all extensions of time, renewals, waivers,
or modifications that may be granted by Lender with respect to the payment or
other provisions of this Note and agrees that additional borrowers, endorsers,
guarantors or sureties may become parties hereto without notice to them or
affecting its liability.
 
(c) Delay.  No delay or omission of Lender to exercise any right, power or
remedy accruing under or pursuant to this Note, at law, in equity, or otherwise,
shall exhaust or impair any such right, power or remedy or shall be construed to
waive any such right, power or remedy.  Every right, power and remedy of Lender
created under this Note may be exercised from time to time and as often as may
be deemed expedient by Lender in its sole discretion.  No right, power or remedy
conferred upon or reserved to Lender is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
under this Note or under any other instrument executed in connection with this
Note or now or hereafter existing at law, in equity, or otherwise.  No
obligation of Borrower under this Note shall be deemed waived
 

 
 

--------------------------------------------------------------------------------

 

by any course or pattern of conduct by any party and Lender acknowledges that it
would be unreasonable of Borrower to rely on any such conduct, or any oral
statements, for any such purpose.
 
(d) Usury.  If Lender shall ever receive, as interest or otherwise, an amount
which would exceed the highest lawful rate of interest, such amount which would
be excessive interest shall be applied to the reduction of the principal amount
owing or on account of any other principal indebtedness of Borrower to Lender
and not to the payment of interest or, if such excessive interest exceeds the
unpaid balance of principal and such other indebtedness, such excess shall be
refunded to Borrower.  All sums paid or agreed to be paid to Lender for the use
or detention of the indebtedness of Borrower to Lender shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term thereof.
 
(e) Severability.  If any provision of this Note shall be deemed unenforceable
under applicable law, such provision shall be ineffective, but only to the
extent of such unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Note.
 
(f) Writing.  No amendment, modification, waiver or discharge of this Note, or
any provision of this Note, shall be valid or effective unless in writing and
signed by Lender.
 
(g) Binding on Successors.  This Note and all provisions hereof shall be binding
upon Borrower and all persons claiming under or through Borrower, and shall
inure to the benefit of Lender, together with its successors and assigns,
including each owner and holder from time to time of this Note.
 
(h) Time of Essence.  Time is of the essence as to all dates set forth herein.
 
(i) Governing Law; Severability.  This Note shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Florida
(without regard to conflicts of law  principles), and any applicable laws of the
United States of America. Borrower and Lender agree that jurisdiction and venue
of any dispute arising from this Note shall be Miami-Dade County, Florida.
 
(j) WAIVER OF TRIAL BY JURY.  BORROWER KNOWINGLY (AFTER CONSULTATION WITH
BORROWER'S COUNSEL), VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS
NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS
NOTE.  BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A
MATERIAL INDUCEMENT TO LENDER'S ACCEPTANCE OF THIS NOTE.
 
(k) No Offset.  No amounts due or owing under this Note may be offset by or
against any amounts due Borrower by Lender.
 
(l) Notice Of Defaults Under HSBC Indebtedness.  In the event Borrower receives
written notice from HSBC alleging a default under or in connection with the HSBC
Indebtedness, Borrower shall promptly provide a copy of said notice to Lender.
 

 
 

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(m) Power and Authority.  Borrower hereby represents and warrants that the
individual executing this Note on behalf of Borrower is duly authorized to
execute  and deliver this Note and to perform the obligations hereunder on
behalf of Borrower and to bind Borrower to its agreements herein and that this
Note is enforceable against Borrower in accordance with its terms.
 
(n) Forced Sale of the Property.
 

(i) In the event Lender has the right to cause the Partnership to sell the
Property pursuant to the penultimate sentence of Section 1.2 above, then at any
time following the Extended Maturity Date, Lender may notify the Partnership in
writing that it has elected to cause the Partnership to sell the Property. In
such case, Lender shall be permitted to market and sell the Property.  The
Partnership by its execution below irrevocably makes, constitutes and appoints
Lender as its true and lawful agent and attorney-in-fact, with full power of
substitution to its affiliates and full power and authority in its name, place
and stead, to make, execute, sign, acknowledge, swear to, record and file any
and all certificates and instruments of any kind or nature deemed advisable by
Lender to permit or cause the Partnership to market and sell the Property.
 
(ii) The foregoing power of attorney.
 
(a) is coupled with an interest, shall be irrevocable and shall survive the
incapacity or bankruptcy of the Partnership or any Partner;
 
(b) may be exercised by Lender acting as attorney-in-fact for the Partnership;
and
 
(c) shall survive the delivery of an assignment by any Partner of the whole or
any fraction of its Partnership  Interest.
 
(o) Waiver of Bankruptcy Proceedings.  To the fullest extent permitted by
applicable law, Lender hereby waives any and all rights it may have at law or in
equity to initiate insolvency or Bankruptcy proceedings against the Partnership
in connection with any action arising under this Note or the loans evidenced
hereby.
 
(p) Limitation on Interest.  In agreeing to pay interest under Section 3 above,
the Partnership has relied upon the representation and warranty that Lender
bears the ultimate financial risk associated with making the loan contemplated
hereunder.  Accordingly, notwithstanding anything to the contrary contained
herein, no interest shall be payable in accordance with Section 3 above if
Lender has advanced funds hereunder in a manner resulting, directly or
indirectly, in Edgardo Defortuna or an entity or person controlled by him (other
than the Partnership) bearing the risk of loss hereunder.
 
 

 

 

 
[SIGNATURES TO FOLLOW ON NEXT PAGE]
 

 
 

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Borrower has delivered this Note as of the day and year first set forth above.
 

BORROWER:

SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

By:                                                      
Name:                                                                
Title:                                                                

 
 

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Exhibit "A-1"

                                  FINAL FORM

PROMISSORY NOTE

U.S. $____________
As of _________ __, 20__ ("Effective Date")
 
 

RECITALS
 
A.           As of the Effective Date, Sonesta Beach Resort Limited Partnership,
a Delaware limited partnership ("Lender") advanced to SBR-Fortune Associates,
LLLP, a Florida limited liability limited partnership            ("Partnership"
or "Borrower"), the sum of __________________ Dollars ($__________).
 
B.           The Partnership is governed by that certain Agreement of Limited
Liability Limited Partnership dated as of January 17, 2005, as amended by that
certain First Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of February 25, 2005, and by that certain
Second Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of March 2, 2005, and by that certain
Third Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of April 15, 2005, and by that certain
letter agreement (the "Letter Agreement"), dated as of June 18, 2009
(collectively, the "Partnership Agreement").  (All terms appearing herein in
initial capitalized letters but not otherwise defined herein shall have the
meanings ascribed thereto in the Partnership Agreement.)
 
C.           The Partners agreed that "New Monies" (as such term is defined in
the Letter Agreement) advanced to the Partnership on or after January 20, 2009
would bear interest, under certain circumstances, at stated rates and would be
entitled to certain priorities of repayment, as more fully provided in the
Letter Agreement.  This Promissory Note (the "Note") is evidence of an advance
of New Monies, and more specifically of [First Tier/Second Tier New Monies](as
defined in the Letter Agreement).
 
D.           This Note evidences that, as of the Effective Date, Lender advanced
to Borrower the sum of ____________________Dollars ($_______).
 
THEREFORE, FOR VALUE RECEIVED, Borrower hereby promises to pay to  Lender the
principal amount of ____________ Dollars ($___________), together with all other
amounts added thereto pursuant to this Note, together with interest accrued from
the date set forth in Section 3 below on the balance of principal from time to
time outstanding, in United States currency, at the rates and at the times
hereinafter described.  Payments shall be made to Lender at ________________,
Suite _____, _____________, _______ _____, Attn:  ____________ (or such other
address as Lender may hereinafter designate in writing to Borrower).
 

 
 

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1. Principal and Interest Payments.
 
1.1 All of the principal and accrued but unpaid interest under this Note shall
be due and payable without notice or demand of any kind or nature on the
"Maturity Date"; provided however, that mandatory prepayments shall be required
under the circumstances described in and pursuant to Section 2 below.  By its
execution below, Borrower agrees that, without Lender's written consent, it
shall not issue or incur any indebtedness of any type or nature which is senior
in payment or priority to all sums hereunder other than the HSBC Indebtedness;
provided that if this Note evidences an advance of "Second Tier New Monies" (as
such term is defined in the Letter Agreement), the repayment of the principal
and interest due hereunder shall be subordinated to certain payments as provided
in Paragraph 5(a) of the Letter Agreement. Subject to the preceding sentence,
Borrower shall not distribute any cash or property to its constituent partners
prior to the full and complete repayment of all principal and interest under
this Note.  For purposes of this Note, the Maturity Date will be the day (such
day, the "HSBC Discharge Date") on which all sums due to HSBC Realty Credit
Corporation (USA) ("HSBC") under that certain Loan Agreement entered into by and
between HSBC and the Partnership as of April 19, 2005 (as the same may be
extended, the "HSBC Indebtedness") are paid in full resulting in the HSBC
Indebtedness being extinguished and satisfied in full; provided however that in
the event any of the dates set forth in clauses (A) through (C) of Section 1.2
below occurs prior to the HSBC Discharge Date, the Maturity Date shall be
accelerated to be the first of the dates set forth in clauses (A) through (C) of
Section 1.2 below (each, an "Accelerated Maturity Date").
 
1.2 For purposes of this Note, the Accelerated Maturity Dates shall be:
 
(A)           the date of the closing of a sale of all or substantially all of
the property owned by the Partnership (the "Property") (whether effected
directly or via merger or consolidation of the Partnership) but specifically
excluding (i) any transfer of the Partnership Interests of the Fortune Partners
to Sonesta in accordance with Paragraphs 7.1 or 7.2 of the Letter Agreement and
(ii) any transfers or conveyances made in accordance with clause (y) of
Paragraph 18 of the Letter Agreement; provided that if Lender or any person or
entity affiliated with Lender retains an interest in the Property (whether via
an ownership interest in the purchaser of the Property or otherwise), the
closing date of such sale shall not constitute an Accelerated Maturity Date;
 
(B)           five (5) years from the Effective Date; or
 
(C)           the date of the closing of a refinancing of the HSBC Indebtedness
provided however that on such Accelerated Maturity Date, the payment required
hereunder shall be limited to the "Excess Available Proceeds" as such term is
defined in Section 2 below and the accrued interest and outstanding principal
under this Note which remains unpaid on such Accelerated Maturity Date shall be
paid in full on the next occurring Accelerated Maturity Date or the Maturity
Date, as the case may be:
 
In the event the Maturity Date is accelerated (in whole or in part) to the
Accelerated Maturity Date, all references in other provisions of this Note to
the Maturity Date shall be deemed to be references to the Accelerated Maturity
Date.
 
1.3 In all events in which an Accelerated Maturity Date is determined by
reference to clauses (A), or (C) of Section 1.2 above, the payment of any amount
under this Note shall be subordinated as follows:
 
(a) first, to the satisfaction and discharge in full of the HSBC Indebtedness;
 

 
 

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(b) next, to the payment of all Partnership liabilities, excluding (x) any
amounts payable to any of the Partners (which exclusion includes amounts payable
in respect of project administration fees or other fees or compensation payable
to the Fortune Partners and Hotel Shutdown Payments payable to Sonesta (which
Hotel Shutdown Payments shall be added to the Unreturned Capital of Sonesta))
and (y) all New Monies;
 
(c) next, to the holders of all First Tier New Monies promissory notes, with all
accrued interest being payable to such holders pari passu in proportion to which
the accrued interest payable to each such holder in respect of the First Tier
New Monies bears to the total outstanding interest payable to all such holders
in respect of the First Tier New Monies, prior to the pari passu repayment of
outstanding principal in respect of the First Tier New Monies; provided,
however, that in the event the Accelerated Maturity Date is determined by
reference to clause (C) of Section 1.2 above, the accrued interest and
outstanding principal, if any, in respect of First Tier New Monies which remains
unpaid on the Accelerated Maturity Date, shall be paid in full on the next
occurring Accelerated Maturity Date or the Maturity Date, as the case may be;
 
[and in the case of Second Tier New Monies]
 
(d) next, to the payment of the Sales Incentive Amount (as such term is defined
and calculated in accordance with the Letter Agreement); and
 
(e) next, to the holders of all Second Tier New Monies promissory notes, with
all accrued interest being payable to such holders pari passu in proportion to
which the accrued interest payable to each such holder in respect of the Second
Tier New Monies bears to the total outstanding interest payable to all such
holders in respect of the Second Tier New Monies, prior to the pari passu
repayment of outstanding principal in respect of the Second Tier New Monies;
provided, however, that in the event the Accelerated Maturity Date is determined
by reference to clause (C) of Section 1.2 above the accrued interest and
outstanding principal, if any, in respect of Second Tier New Monies which
remains unpaid on the Accelerated Maturity Date, shall be paid in full on the
next occurring Accelerated Maturity Date or the Maturity Date, as the case may
be.
 
2. Mandatory Prepayments.  A mandatory prepayment shall be required hereunder on
the date of a closing of a refinancing of the HSBC Indebtedness (which
refinancing is for an amount in excess of the balance of the HSBC Indebtedness
existing on the date of the closing of the refinancing) to the extent that
proceeds are available therefrom following the payment of all related loan
refinancing closing costs (such excess, the "Excess Available Proceeds").  Such
mandatory prepayment shall be in the amount of all Excess Available Proceeds and
shall be subject to the terms of Section 1.3 above.
 
3. Interest Rate.  From and after the Effective Date through and including the
Maturity Date, interest shall accrue upon the unpaid principal balance of this
Note at the annual rate of fifteen percent (15%) per annum.  All interest which
is unpaid at the end of any calendar year shall be added to the principal amount
of this Note on the first day of the succeeding calendar year.
 
4. Prepayment.  This Note shall be prepayable, in whole or in part, at any time
and from time to time without premium or penalty at the sole option of Borrower,
with the amount of the prepayment being credited first to accrued but unpaid
interest and then to principal.
 

 
 

--------------------------------------------------------------------------------

 

 
5. Default.  The occurrence of any one or more of the following events,
circumstances, or conditions shall constitute a default hereunder ("Event of
Default"): (a) failure of Borrower (which term shall mean and include Borrower
and/or each borrower, endorser, surety, and guarantor of this Note) to pay to
Lender within five (5) days of the due date (whether at scheduled maturity, upon
acceleration or otherwise) any installment of principal or of interest due under
this Note or any fees owing to Lender; (b) the failure of Borrower to comply
with any of the provisions of Section 1 above;  (c) Borrower makes a general
assignment for the benefit of creditors; (d) a receiver, custodian, liquidator,
trustee or like officer of Borrower is appointed to take custody, possession or
control over any property and such appointment is not discharged within sixty
(60) days thereafter; (e) proceedings are instituted by or against Borrower
under any bankruptcy code or act or insolvency law and such proceedings remain
undismissed for a period of sixty (60) days thereafter; (f) the Partnership
receives a notice of acceleration of the HSBC Indebtedness following a default
by the Partnership thereunder and delivers such notice promptly upon receipt to
Lender; or (g) the Partnership issues, promises to issue or otherwise becomes
liable for repayment of loans or borrowings which provide for priority of
repayment senior to the "new monies" evidenced by this Note; provided that if
this Note evidences an advance of Second Tier New Monies, the repayment of the
principal and interest due hereunder shall be subordinated to certain payments
as provided in Paragraph 5(a) of the Letter Agreement. At any time after the
occurrence of an Event of Default, the indebtedness evidenced by this Note
and/or any note(s) or other obligation(s) which may be taken in renewal,
extension, substitution, or modification of all or any part of the indebtedness
evidenced hereby or thereby and all other obligations of Borrower to Lender
howsoever created shall, at the option of Lender, immediately become due and
payable without demand upon or notice to Borrower, and Lender shall be entitled
to exercise all remedies available at law.  Any failure to exercise this option
of acceleration shall not constitute a waiver of the right to exercise the same
at any future time or for any other event.  Lender's remedies contained in this
Note shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Lender, and may be exercised
as often as occasion therefor shall occur.  Upon the occurrence of an Event of
Default interest shall accrue under this Note on the outstanding principal
balance at the interest rate of eighteen percent (18%) per annum (the "Default
Rate").
 
6. Enforcement Costs.  If this Note is not paid promptly in accordance with its
terms and is placed in the hands of an attorney for collection or if suit be
instituted on the Note, and as often as this Note is placed in the hands of an
attorney for collection and as often as suit is filed to collect this Note,
Borrower agrees to pay, in addition to the unpaid principal balance and all
accrued and unpaid interest, reasonable attorneys' fees and paralegal fees
through all tribunal levels, plus all costs and expenses of collection together
with all other expenses in connection therewith, and interest on any judgment
obtained by Lender at the Default Rate, including interest at the Default Rate
from and after the date of the occurrence of such Event of Default until actual
payment is made to Lender of the full amount due Lender.
 
7. General Provisions.
 
(a) Extensions and Renewals.  Without notice and without releasing the liability
of a party, Lender may grant extensions, renewals and indulgences from time to
time and for any term or terms.
 

 
 

--------------------------------------------------------------------------------

 

 
(b) Waiver.  Borrower waives presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all other notices in connection with delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its
liability shall be unconditional, without regard to the liability of any other
party, and shall not be affected in any manner by any indulgence, extension of
time, renewal, waiver or modification granted or consented to by
Lender.  Borrower consents to any and all extensions of time, renewals, waivers,
or modifications that may be granted by Lender with respect to the payment or
other provisions of this Note and agrees that additional borrowers, endorsers,
guarantors or sureties may become parties hereto without notice to them or
affecting its liability.
 
(c) Delay.  No delay or omission of Lender to exercise any right, power or
remedy accruing under or pursuant to this Note, at law, in equity, or otherwise,
shall exhaust or impair any such right, power or remedy or shall be construed to
waive any such right, power or remedy.  Every right, power and remedy of Lender
created under this Note may be exercised from time to time and as often as may
be deemed expedient by Lender in its sole discretion.  No right, power or remedy
conferred upon or reserved to Lender is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
under this Note or under any other instrument executed in connection with this
Note or now or hereafter existing at law, in equity, or otherwise.  No
obligation of Borrower under this Note shall be deemed waived by any course or
pattern of conduct by any party and Lender acknowledges that it would be
unreasonable of Borrower to rely on any such conduct, or any oral statements,
for any such purpose.
 
(d) Usury.  If Lender shall ever receive, as interest or otherwise, an amount
which would exceed the highest lawful rate of interest, such amount which would
be excessive interest shall be applied to the reduction of the principal amount
owing or on account of any other principal indebtedness of Borrower to Lender
and not to the payment of interest or, if such excessive interest exceeds the
unpaid balance of principal and such other indebtedness, such excess shall be
refunded to Borrower.  All sums paid or agreed to be paid to Lender for the use
or detention of the indebtedness of Borrower to Lender shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term thereof.
 
(e) Severability.  If any provision of this Note shall be deemed unenforceable
under applicable law, such provision shall be ineffective, but only to the
extent of such unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Note.
 
(f) Writing.  No amendment, modification, waiver or discharge of this Note, or
any provision of this Note, shall be valid or effective unless in writing and
signed by Lender.
 
(g) Binding on Successors.  This Note and all provisions hereof shall be binding
upon Borrower and all persons claiming under or through Borrower, and shall
inure to the benefit of Lender, together with its successors and assigns,
including each owner and holder from time to time of this Note.
 
(h) Time of Essence.  Time is of the essence as to all dates set forth herein.
 

 
 

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(i) Governing Law; Severability.  This Note shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Florida
(without regard to conflicts of law  principles), and any applicable laws of the
United States of America. Borrower and Lender agree that jurisdiction and venue
of any dispute arising from this Note shall be Miami-Dade County, Florida.
 
(j) WAIVER OF TRIAL BY JURY.  BORROWER KNOWINGLY (AFTER CONSULTATION WITH
BORROWER'S COUNSEL), VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS
NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS
NOTE.  BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A
MATERIAL INDUCEMENT TO LENDER'S ACCEPTANCE OF THIS NOTE.
 
(k) No Offset.  No amounts due or owing under this Note may be offset by or
against any amounts due Borrower by Lender.
 
(l) Notice Of Defaults Under HSBC Indebtedness.  In the event Borrower receives
written notice from HSBC alleging a default under or in connection with the HSBC
Indebtedness, Borrower shall promptly provide a copy of said notice to Lender.
 
(m) Power and Authority.  Borrower hereby represents and warrants that the
individual executing this Note on behalf of Borrower is duly authorized to
execute  and deliver this Note and to perform the obligations hereunder on
behalf of Borrower and to bind Borrower to its agreements herein and that this
Note is enforceable against Borrower in accordance with its terms.
 
(n) Waiver of Bankruptcy Proceedings.  To the fullest extent permitted by
applicable law, Lender hereby waives any and all rights it may have at law or in
equity to initiate insolvency or Bankruptcy proceedings against the Partnership
in connection with any action arising under this Note or the loans evidenced
hereby.
 

 
 

--------------------------------------------------------------------------------

 

Borrower has delivered this Note as of the day and year first set forth above.
 

BORROWER:

SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

By:                                                      
Name:                                                                
Title:                                                                

 
 

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Exhibit "B"

          FINAL FORM

PROMISSORY NOTE

U.S.
$_________________                                                                                   ________________
____, 20__ (the "Effective Date")

FOR VALUE RECEIVED, the undersigned, SBR-Fortune Associates, LLLP, a Florida
limited liability limited partnership (the "Partnership" or "Maker") promises to
pay to the order of Fortune International Management, Inc., a Florida
corporation ("Holder") a fixed sum, the amount of which shall be determined
pursuant to Section 2 below (the "Indebtedness").  Payments shall be made to
Holder at 1300 Brickell Avenue, Miami, Florida  33131. The Partnership is
governed by that certain Agreement of Limited Liability Limited Partnership
dated as of January 17, 2005, as amended by that certain First Amendment to
Agreement of Limited Liability Limited Partnership of SBR-Fortune Associates,
LLLP dated as of February 25, 2005, and by that certain Second Amendment to
Agreement of Limited Liability Limited Partnership of SBR-Fortune Associates,
LLLP dated as of March 2, 2005, and by that certain Third Amendment to Agreement
of Limited Liability Limited Partnership of SBR-Fortune Associates, LLLP dated
as of April 15, 2005, and by that certain letter agreement (the "Letter
Agreement"), dated as of June 18, 2009 (collectively, the "Partnership
Agreement").  All terms appearing herein in initial capitalized letters but not
otherwise defined herein shall have the meanings ascribed thereto in the
Partnership Agreement
 
1. Maturity Date.  This Note shall mature on the earliest of (A) the date of the
closing of a sale of all or substantially all of the property owned by the
Partnership (the "Property") (whether effected directly or via merger or
consolidation of the Partnership) but specifically excluding (i) any transfer of
the Partnership Interests of the Fortune Partners to Sonesta in accordance with
Paragraphs 7.1 or 7.2 of the Letter Agreement and (ii) any transfers or
conveyances made in accordance with clause (y) of Paragraph 18 of the Letter
Agreement, (B) five (5) years from the Effective Date, (C) the date of the
closing of a sale of all or any portion of the partnership interests owned by
one or more partners in the Partnership (whether effected directly or via merger
or consolidation of the Partnership or via the sale of all or substantially all
of the equity interests in Sonesta Beach Resort Limited Partnership, Florida
Sonesta Corporation or via  the entering into by the Partnership of a joint
venture or similar arrangement pursuant to which a third party or parties
obtain(s) more than a de minimis direct or indirect interest in the Property)
but specifically excluding (i) any transfer of the Partnership Interests of the
Fortune Partners to Sonesta in accordance with Paragraphs 7.1 or 7.2 of the
Letter Agreement and (ii) any transfers or conveyances made in accordance with
clause (y) of Paragraph 18 of the Letter Agreement, (D) the date of the closing
of a refinance of the Partnership's indebtedness (the "HSBC Indebtedness") owed
to HSBC Realty Credit Corporation (USA) ("HSBC") pursuant to that certain Loan
Agreement dated as of April 19, 2005, as amended, and entered into by and
between HSBC and the Partnership, or (E) the date of admission of one or more
partner(s) in the Partnership subsequent to the Effective Date (the earliest of
such dates referred to as the "Maturity Date"). Notwithstanding anything to the
contrary contained herein, in the event Sonesta exercises the Buy-Out Option
pursuant to Section 7.2 of the Letter Agreement, the time period provided in (B)
above shall be reduced to twelve (12) months after the Effective Date.
 

 
 

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2. Principal Amount. The principal amount of this Note shall be One Million Five
Hundred Thousand Dollars ($1,500,000.00); provided however that in the event the
Maturity Date is the date described in clause (A) of Section 1 or clause (C) of
Section 1, the principal amount of this Note shall be increased by an
"Additional Amount" which shall be determined by reference to the gross sales
price ("GSP") of the Property or the partnership interests, as applicable, as
follows:
 
GSP
Additional Amount
less than $87.5 million
$0
$87.5 million up to but less than $95 million
$250,000
$95 million or more
$500,000

For purposes of the Note, the GSP of the Property shall equal the sum of the
cash and fair market value of any property received in the sale transaction, any
portion of the purchase price to be paid subsequent to the closing of the sale
transaction, including the face amount of any promissory notes received in the
sale transaction and the face amount of any and all liabilities of the
Partnership assumed by the purchaser upon the closing of the sale transaction.
In calculating the GSP, closing costs shall be allocated in conformity with the
standard of practice for similar commercial transactions in Miami-Dade County
Florida. Notwithstanding anything to the contrary contained herein, if Sonesta
Beach Resort Limited Partnership, Florida Sonesta Corporation, or Sonesta
International Hotels Corporation, or any of their affiliates owns any direct or
indirect interest in the purchaser of the Property or the partnership interests
subsequent to the closing of the sale transaction, the principal amount of this
Note shall be One Million Five Hundred Thousand Dollars ($1,500,000.00) plus an
"Additional Amount" which shall be determined by reference to the gross fair
market value ("GFMV") of the Property or the partnership interests, as
applicable, as follows:
 
GFMV
Additional Amount
less than $87.5 million
$0
$87.5 million up to but less than $95 million
$250,000
$95 million or more
$500,000

The GFMV shall be equal to the "Appraised Value" of the Property determined as
follows: each of (i) Sonesta on the one hand, and (ii) Holder on the other hand,
shall choose an M.A.I. appraiser with no prior relationship with the parties or
their respective affiliates, to furnish a written appraisal setting forth the
GFMV of the Property as of the Maturity Date, both of whom shall be paid for by
the Partnership.  The appraisers selected by the parties shall have at least
fifteen (15) years experience with appraisal of properties similar to the
Property in the Southeast United States.  The determination of the GFMV of the
Property by the appraisers so selected shall be in writing and in the event the
two appraisals of the GFMV of the Property vary by less than ten percent (10%),
the GFMV of the Property shall be the average of the two appraisals.  If the
GFMV of the Property as set forth in the two appraisals vary by more than ten
percent (10%), a third appraisal shall be performed by an M.A.I. appraiser
selected by the two appraisers described above possessing the qualifications
described above ("Third Appraisal"), and the GFMV of the Property shall be the
average of the Third Appraisal and whichever of the other two appraisals of GFMV
is closest in value to the Third Appraisal.  The cost of the Third Appraisal
shall be paid for by the Partnership.

 
 

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3. Interest and Default Rate.  Unless and until the occurrence of an Event of
Default (as such term is defined below), the principal amount of this Note shall
not bear interest.  Upon the occurrence of an Event of Default interest shall
accrue under this Note on the outstanding principal balance at the interest rate
of eighteen percent (18%) per annum compounded monthly (the "Default Rate"). The
occurrence of any one or more of the following events, circumstances, or
conditions shall constitute a default hereunder ("Event of Default"):  (a)
failure of Borrower (which term shall mean and include Borrower and/or each
borrower, endorser, surety, and guarantor of this Note) to pay to Holder  within
five (5) days of the due date (whether at scheduled maturity, upon acceleration
or otherwise) any installment of principal or of interest due under this Note or
any fees owing to Holder; (b) Borrower makes a general assignment for the
benefit of creditors; (c) a receiver, custodian, liquidator, trustee or like
officer of Borrower is appointed to take custody, possession or control over any
property and such appointment is not discharged within sixty (60) days
thereafter; (d) proceedings are instituted by or against Borrower under any
bankruptcy code or act or insolvency law and such proceedings remain undismissed
for a period of sixty (60) days thereafter; or (e) the Partnership receives a
notice of acceleration of the HSBC Indebtedness following a default by the
Partnership thereunder and delivers such notice promptly upon receipt to Holder.
At any time after the occurrence of an Event of Default, the indebtedness
evidenced by this Note and/or any note(s) or other obligation(s) which may be
taken in renewal, extension, substitution, or modification of all or any part of
the indebtedness evidenced hereby or thereby and all other obligations of
Borrower to Holder howsoever created shall, at the option of Holder, immediately
become due and payable without demand upon or notice to Borrower, and Holder
shall be entitled to exercise all remedies available at law.  Any failure to
exercise this option of acceleration shall not constitute a waiver of the right
to exercise the same at any future time or for any other event.  Holder's
remedies contained in this Note shall be cumulative and concurrent, and may be
pursued singly, successively, or together at the sole discretion of Holder, and
may be exercised as often as occasion therefor shall occur.
 
4. Prepayment.  Maker hereby reserves the right to prepay the Indebtedness in
whole, or in part, at any time without penalty or premium.
 
5. Enforcement Costs. If this Note is not paid promptly in accordance with its
terms and is placed in the hands of an attorney for collection or if suit be
instituted on this Note, and as often as this Note is placed in the hands of an
attorney for collection and as often as suit is filed to collect this Note,
Maker agrees to pay, in addition to the unpaid principal balance and all accrued
and unpaid interest, if any, reasonable attorneys' fees and paralegal fees
through all tribunal levels, plus all costs and expenses of collection together
with all other expenses in connection therewith, and interest on any judgment
obtained by Holder at the Default Rate, including interest at the Default Rate
from and after the date of the occurrence of such Event of Default until actual
payment is made to Holder of the full amount due Holder.
 
6. General Provisions.
 
(a) Extensions and Renewals.  Without notice and without releasing the liability
of a party, Holder may: (i) grant extensions, renewals and indulgences from time
to time and for any term or terms; and (ii) add or release one or more parties
without releasing any other party to this Note.
 

 
 

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(b) Waiver.  Maker waives presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all other notices in connection with delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its
liability shall be unconditional, without regard to the liability of any other
party, and shall not be affected in any manner by any indulgence, extension of
time, renewal, waiver or modification granted or consented to by Holder.  Maker
consents to any and all extensions of time, renewals, waivers, or modifications
that may be granted by Holder with respect to the payment or other provisions of
this Note, and agree that additional borrowers, endorsers, guarantors or
sureties may become parties hereto without notice to them or affecting its
liability.
 
(c) Delay.  No delay or omission of Holder to exercise any right, power or
remedy accruing under or pursuant to this Note, at law, in equity, or otherwise,
shall exhaust or impair any such right, power or remedy or shall be construed to
waive any such right, power or remedy.  Every right, power and remedy of Holder
created under this Note may be exercised from time to time and as often as may
be deemed expedient by Holder in its sole discretion.  No right, power or remedy
conferred upon or reserved to Holder is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
under this Note or under any other instrument executed in connection with this
Note or now or hereafter existing at law, in equity, or otherwise.  No
obligation of Maker under this Note shall be deemed waived by any course or
pattern of conduct by any party and Holder acknowledges that it would be
unreasonable of Maker to rely on any such conduct, or any oral statements, for
any such purpose.
 
(d) Usury.  If Holder shall ever receive, as interest or otherwise, an amount
which would exceed the highest lawful rate of interest, such amount which would
be excessive interest shall be applied to the reduction of the principal amount
owing or on account of any other principal indebtedness of Maker to Holder and
not to the payment of interest or, if such excessive interest exceeds the unpaid
balance of principal and such other indebtedness, such excess shall be refunded
to Maker.
 
(e) Severability.  If any provision of this Note shall be deemed unenforceable
under applicable law, such provision shall be ineffective, but only to the
extent of such unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Note.
 
(f) Writing.  No amendment, modification, waiver or discharge of this Note, or
any provision of this Note, shall be valid or effective unless in writing and
signed by Holder.
 
(g) Binding on Successors.  This Note and all provisions hereof shall be binding
upon Maker and all persons claiming under or through Maker, and shall inure to
the benefit of Holder, together with its successors and assigns, including each
owner and holder from time to time of this Note.
 
(h) Time of Essence.  Time is of the essence as to all dates set forth herein.
 
(i) Governing Law; Severability.  This Note shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Florida
(without regard to conflicts of law  principles), and any applicable laws of the
United States of America. Maker agrees that jurisdiction and venue of any
dispute arising from this Note shall be Miami-Dade County, Florida.
 

 
 

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(j) WAIVER OF TRIAL BY JURY.  MAKER KNOWINGLY (AFTER CONSULTATION WITH MAKER'S
COUNSEL), VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS NOTE, OR THE TRANSACTIONS OR OBLIGATIONS UNDER WHICH THIS
NOTE WAS DELIVERED, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING TO THIS NOTE.  MAKER
ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL INDUCEMENT TO
HOLDER'S ACCEPTANCE OF THIS NOTE.
 
   (k)             No Offset.  No amounts due or owing under this Note may be
offset by or against any amounts due Maker by Holder.
 
  (l)            Notice Of Defaults Under HSBC Indebtedness.  In the event
Borrower receives written notice from HSBC alleging a default under or in
connection with the HSBC Indebtedness, Borrower shall promptly provide a copy of
said notice to Holder.
 
   (m)             Power and Authority.  Maker hereby represents and warrants
that the individual executing this Note on behalf of Maker is duly authorized to
execute  and deliver this Note and to perform the obligations hereunder on
behalf of Maker and to bind Maker to its agreements herein and that this Note is
enforceable against Maker in accordance with its terms.
 

 

 

 
[SIGNATURES TO FOLLOW ON NEXT PAGE]
 

 
 

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Maker has delivered this Note as of the Effective Date.
 
MAKER:

SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

 
By:
FLORIDA SONESTA CORPORATION, a Florida corporation, as successor General Partner

By:                               
Peter J. Sonnabend
Vice President

 
 

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Exhibit "C"

           EXECUTION COPY

RELEASE AND INDEMNIFICATION AGREEMENT

This Release and Indemnification Agreement ("Agreement") is made and entered
into as of ________, __ 20__ (the "Effective Date") by and among Fortune KB GP,
LLC, a Florida limited liability company ("Fortune GP"), Fortune KB, LLC, a
Florida limited liability company, ("Fortune LP" and together with Fortune GP,
the "Fortune Partners") Edgardo Defortuna, an individual ("Defortuna"),
SBR-Fortune Associates, LLLP, a Florida limited liability limited partnership
("Partnership") and Sonesta Beach Resort Limited Partnership, a Delaware limited
partnership ("Sonesta Beach" and together with the Partnership, the "Releasing
Parties").

WHEREAS, Sonesta Beach and the Fortune Partners are all of the partners in the
Partnership, pursuant to the Agreement of Limited Liability Limited Partnership
of SBR-Fortune Associates, LLLP dated as of January 17, 2005, as amended by that
certain First Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of February 25, 2005, and by that certain
Second Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of March 2, 2005, and by that certain
Third Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of April 15, 2005, and by that certain
letter agreement (the “Letter Agreement ”), among Fortune GP, Fortune LP and
Sonesta Beach, dated as of June __, 2009 (collectively, the "Partnership
Agreement"); (all terms appearing herein in initial capitalized letters but not
otherwise defined herein shall have the meanings ascribed thereto in the
Partnership Agreement);

WHEREAS, Sonesta Beach has exercised either its "Forced Sale Option" or its "Buy
Out Option" under and pursuant to the terms of the Letter Agreement (the
exercise of either such option referred to as a "Sonesta Initiated Event");

WHEREAS, subject to the terms of this Agreement, the Releasing Parties have
agreed to release the Fortune Partners from all of their obligations under the
Partnership Agreement as more particularly described herein, and, to release
Defortuna from all of his individually guaranteed obligations under the
Partnership Agreement, including but not limited to those obligations set forth
in Sections 4.4(a)(4), 4.4(c)(3), 7.2 and 8.6(e) of the Partnership Agreement;
and

WHEREAS, subject to the terms of this Agreement, the Releasing Parties have
agreed that upon the occurrence of a Sonesta Initiated Event, they shall make
certain efforts as more particularly described below to cause HSBC Realty Credit
Corporation (USA) ("HSBC") to release Defortuna from any and all liabilities and
obligations (the "HSBC Release") arising under or related to that certain Loan
Agreement entered into by and between HSBC and the Partnership as of April 19,
2005, as amended to the date hereof (such indebtedness, the "HSBC
Indebtedness"), and if such efforts fall short of obtaining the HSBC Release, to
indemnify Defortuna from any and all liabilities and obligations arising under
or related to the HSBC Indebtedness;

 
 

--------------------------------------------------------------------------------

 

NOW THERFORE, in consideration of the mutual promises and other consideration,
the value of which is hereby acknowledged, it is agreed by and between the
parties as follows:

1. Recitals.  The foregoing preliminary statements are true and correct and
incorporated herein by reference
 
2. Partnership Agreement Release.  Effective as of the Effective Date, the
Releasing Parties, on their own behalf and on behalf of their Affiliates, hereby
unconditionally and irrevocably release, remise, acquit, waive and discharge the
Fortune Partners and Defortuna of and from any and all actual or potential
rights, damages, demands, liabilities, obligations, actions, causes of action,
suits, losses, costs and expenses, whether direct or indirect, contingent or
consequential, liquidated or unliquidated, known or unknown, suspected or
unsuspected that any of the Releasing Parties might have against the Fortune
Partners and/or Defortuna, of whatever kind or nature, whether in law, equity,
or otherwise, from the beginning of the world to the Effective Date arising out
of, under or attributable to the Partnership Agreement, including but not
limited to those certain obligations set forth in Sections 4.4(a)(4), 4.4(c)(3),
7.2 and 8.6(e) of the Partnership Agreement, but specifically excluding matters
arising out of the gross negligence,  willful misconduct or fraud of the Fortune
Partners and/or Defortuna.  Effective as of the Effective Date, the Fortune
Partners and Defortuna, on their own behalf and on behalf of their Affiliates,
hereby unconditionally and irrevocably release, remise, acquit, waive and
discharge the Releasing Parties of and from any and all actual or potential
rights, damages, demands, liabilities, obligations, actions, causes of action,
suits, losses, costs and expenses, whether direct or indirect, contingent or
consequential, liquidated or unliquidated, known or unknown, suspected or
unsuspected that any of the Fortune Partners and Defortuna might have against
the Releasing Parties, of whatever kind or nature, whether in law, equity, or
otherwise, from the beginning of the world to the Effective Date arising out of,
under or attributable to the Partnership Agreement, but specifically excluding
matters arising out of the gross negligence,  willful misconduct or fraud of any
one or more of the Releasing Parties.
 
3. Partnership Agreement Indemnification.  The Releasing Parties jointly and
severally agree to, shall and hereby indemnify and hold harmless the Fortune
Partners and Defortuna, of, from and against any and all liabilities, costs,
losses, expenses, claims or damages of any kind or nature, including, without
limitation, any suits, proceedings, claims or demands  (including, but not
limited to, attorneys' fees and costs paid or incurred in connection therewith
at both trial and appellate levels) incurred or arising by reason of or in
connection with any third party claims brought against any of the Releasing
Parties, the Fortune Partners or Defortuna, relating to the Partnership or the
Partnership Agreement.  Attached as Exhibit A is a list of all of the claims for
which Fortune GP has received written notice or has actual knowledge of as of
the Effective Date ("Noticed Claims").  The Fortune Partners and Defortuna each
hereby represent and warrant to the Releasing Parties, that, to the best
knowledge of the Fortune Partners and Defortuna, the schedule of Noticed Claims
attached as Exhibit A hereto is true, accurate and complete.
 
4. HSBC Indebtedness Guarantee.  As of the effective date of a Sonesta Initiated
Event, the Partnership shall take commercially reasonable efforts to cause HSBC
to issue the HSBC Release to Defortuna; it being agreed that the Releasing
Parties shall be under no obligation to undertake litigation in order to obtain
the HSBC Release. The Partnership shall take all steps necessary to cause the
HSBC Release to be delivered to the Fortune Partners and Defortuna on the
earlier to occur of (i) twelve (12) months after the Effective Date, or (ii) the
maturity date of the HSBC Indebtedness (as extended, if applicable) (the earlier
of such dates the "Mandatory Release Date")
 

 
 

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5. HSBC Indebtedness Indemnification. In the event of a Sonesta Initiated Event,
from and after the Effective Date and continuing through and until the effective
date of the HSBC Release, Sonesta Beach and the Partnership jointly and
severally agree to, shall and hereby indemnify and hold harmless the Fortune
Partners and Defortuna, of, from and against any and all obligations,
liabilities, costs, losses, expenses, claims or damages of any kind or nature,
whether direct or indirect, contingent or consequential, liquidated or
unliquidated, known or unknown, suspected or unsuspected that HSBC might have
against the Fortune Partners and/or Defortuna, of whatever kind or nature,
whether in law, equity, or otherwise, from the beginning of the world to the
effective date of the HSBC Release arising out of, under or attributable to the
HSBC Indebtedness.  In addition, from and after the Effective Date and
continuing through and until the effective date of the HSBC Release, the
Releasing Parties shall act in good faith, shall keep the HSBC Indebtedness
current and shall use commercially reasonable efforts to avoid taking any
actions which could give rise to liability of the Fortune Partners and/or
Defortuna under or in respect of the HSBC Indebtedness.
 
6. Affiliate.  For purposes of this Agreement, the term "Affiliate" means with
respect to any Person, a Person directly or indirectly controlling or controlled
by or under common control with such Person.  "Person" means an individual,
corporation, partnership, business trust, limited liability company,
unincorporated association, joint stock company, trust, joint venture, or other
entity or organization.
 
7. Representations and Warranties.  Each party hereto hereby represents and
warrants that the individual executing this Agreement on behalf of such party is
duly authorized to execute, deliver and perform this Agreement on behalf of such
party and to bind such party to its agreements herein and that this Agreement is
enforceable against such party in accordance with its terms.
 
8. Entire Agreement; Amendments.  This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements, promises and
understandings, whether oral or written regarding the release and
indemnification of the Fortune Partners and Defortuna.  This Agreement shall not
be modified, amended, supplemented or revised, except by a written document
signed by all parties.
 
9. Governing Law/Venue.  This Agreement shall be governed by and construed in
accordance with the local laws of the State of Florida without reference to that
state's rules regarding choice of law.  The exclusive venue for all actions or
disputes relating to this Agreement shall be the state or federal courts located
in Miami-Dade County in the State of Florida, and the Parties hereby agree not
to assert, by way of motion, as a defense, or otherwise in any such suit, action
or proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced by such courts.
 
10. Severability.  Any provision of this Agreement, which is unenforceable in
any jurisdiction, shall be ineffective in such jurisdiction to the extent of
such unenforceability without invalidating the remaining provisions of this
Agreement, and any unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
 
11. No Waiver.  The waiver of any breach or default of any of the terms,
provisions or covenants of this Agreement shall not be deemed to be, nor shall
the same constitute, a waiver of any subsequent breach or default of such term,
provision or covenant or of any other term, provision or covenant contained
herein.
 

 
 

--------------------------------------------------------------------------------

 

12. Counterparts.  This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement binding on all of the parties,
notwithstanding that all of the parties are not signatory to the original or the
same counterpart.  In addition, any counterpart signature page may be executed
and delivered by facsimile or portable document format ("PDF") and any such
faxed or PDF signature pages may be attached to one or more counterparts of this
Agreement, and such faxed or PDF signature(s) shall have the same force and
effect as if original signatures had been executed and delivered in person.
 
13.           No Construction Against
Draftsmen.                                                                           The
parties acknowledge that this is a negotiated agreement, and that in no event
shall the terms of this Agreement be construed against any party on the basis
that such party, or its counsel, drafted this Agreement.
 

[EXECUTIONS COMMENCE ON FOLLOWING PAGE]

 
 

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FORTUNE GP

FORTUNE KB GP, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
a Florida corporation, its Manager

By: /s/ Edgardo Defortuna
Edgardo Defortuna, President

FORTUNE LP

FORTUNE KB, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
a Florida corporation, its Manager

By: /s/ Edgardo Defortuna
Edgardo Defortuna, President

EDGARDO DEFORTUNA

 /s/ Edgardo
Defortuna                                                                

(First signature page to Release and Indemnification Agreement)

 
 

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SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

 
By:
FLORIDA SONESTA CORPORATION, a Florida corporation, as successor General Partner

By:            /s/ Peter J. Sonnabend
Peter J. Sonnabend
Vice President

SONESTA BEACH RESORT LIMITED PARTNERSHIP, a Delaware limited partnership

 
By:
FLORIDA SONESTA CORPORATION, a Florida corporation

By:            /s/ Peter J. Sonnabend
Peter J. Sonnabend
Vice President

(Final signature page to Release and Indemnification Agreement)

 
 

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Exhibit A

         Noticed Claims

IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT, IN AND FOR MIAMI-DADE COUNTY,
FLORIDA GENERAL JURISDICTION DIVISION CASE NO. 07-15905 CA 31. JULIO A. PADILLA
and CAROLINA V. TOZZI PADILLA, Plaintiffs, v. VILLAGE OF KEY BISCAYNE,
Defendant, and SBR-FORTUNE ASSOCIATES, LLLP, Intervenor.

 
 

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Exhibit “D”
 
List of HSBC Indebtedness Material Agreements and Instruments
 
 
1.  
Replacement Promissory Note ($41,000,000.00).

 
2.  
Replacement Promissory Note ($20,000,000.00).

 
3.  
Assignment and Acceptance dated September 1, 2005 to Allied Irish Banks, p.l.c.

 
LOAN DOCUMENTS (Closing Date April 19, 2005)
 
1.  
Amended and Restated Renewal Promissory Note (allonge and original notes being
renewed are attached to this instrument)

 
2.  
Assignment, Assumption and Release of Note and Mortgage

 
3.  
Amended and Restated Mortgage, Assignment of Rents, Security Agreement and
Notice of Future Advance

 
4.  
Loan Agreement and Upfront Fee Letter

 
5.  
Assignment of Leases and Rents

 
6.  
UCC-1 Financing Statement (County/Fixture)

 
7.  
UCC-1 Financing Statement (State)

 
8.  
Guaranty of Payment (Edgardo Defortuna)

 
9.  
Affidavit of Title

 
10.  
Assignment of Contracts, Licenses and Permits

 
11.  
ADA and Environmental Indemnification Agreement

 
12.  
Loan Funding Statement

 
13.  
Closing Statement and Loan Disbursement Approval

 
14.  
Flood Insurance Acknowledgement

 
15.  
Anti-Coercion Insurance Acknowledgment

 
16.  
Side Letters Regarding Waiver of Terrorism Insurance and Mold

 
17.  
Agreement Regarding Instructions Given by Telephone or Facsimile

 
18.  
Requisition Authorization Statement

 

 
 

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TITLE AND SURVEY INFORMATION
 
19.  
Title Insurance Commitment

 
20.  
Insured Closing Letter

 
21.  
Property Taxes/Proof of Payment

 
22.  
UCC-1 Searches

 
23.  
Title Insurance Policy (Owner and Loan)

 
24.  
Survey

 
25.  
Closing Instruction Letter to Title Company

 
ZONING INFORMATION
 
26.  
Zoning Letter issued by the City of Key Biscayne

 
27.  
Opinion Letter of Counsel regarding Zoning and Land Use

 
MISCELLANEOUS
 
28.  
Purchase Agreement/Agreement of Merger regarding Acquisition of Property

 
29.  
Lease Agreement with Sonesta Beach Resort Limited Partnership

 
30.  
Existing Mortgages and Related Documents Assigned to Lender

 

 
LOAN DOCUMENTS (Closing Date April 19, 2007)
 

1.  
Promissory Note Extension and Mortgage Modification Agreement

2.  
Borrower’s Representations, Warranties and Affidavit

3.  
Confirmation of Guaranty

4.  
Loan Extension Settlement Statement

5.  
Borrower’s Counsel Legal Opinion

6.  
Marked-Up Commitment to Endorse

7.  
Endorsement No. 1 to the Title Insurance Policy issued by Title Company (P/C)
and Borrower’s Title Affidavit

 
LOAN DOCUMENTS (Closing Date October 19, 2007)

1.  
Second Promissory Note Extension and Mortgage Modification Agreement

2.  
Amendment to Loan Agreement

3.  
Borrower’s Representation, Warranties and Affidavit

4.  
Second Confirmation and Modification of Guaranty

5.  
Loan Extension Settlement Statement

6.  
Borrower’s Counsel Legal Opinion

7.  
Marked-Up Commitment to Endorse

8.  
Title Affidavit

9.  
Endorsement No. 2 to the Title Insurance Policy issued by Title Company (P/C)

 
 

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LOAN DOCUMENTS (Closing Date: January 16, 2009)
________________________________________________________                                                    
 
1.  
Third Promissory Note Extension and Mortgage Modification Agreement recorded
January 27, 2009, in Official Records Book 26730, Page 3050, Miami-Dade County
Public Records.

 
2.  
Loan Extension Settlement Statement

 
3.  
Second Amendment to Loan Agreement

 
4.  
Borrower’s Representations, Warranties and Affidavit

 
5.  
Third Confirmation and Modification of Guaranty

 
6.  
Borrower’s Title Affidavit

 
7.  
Endorsement No. 3 to Loan Policy No. FA-M-960776

 

 
 

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Exhibit "E"

FINAL FORM

CONFIDENTIALITY AGREEMENT

June __, 2009

[Proposed 3rd Party Lender]

Ladies and Gentlemen:

In connection with the proposed making of a loan (the “Loan”) from you to
SBR-Fortune Associates, LLLP, a Florida limited liability limited partnership
(the “Partnership”), the Partnership proposes to furnish you with certain
documents and information related to the Partnership and its affiliates (herein
collectively referred to as the “Confidential Information”).  Confidential
Information includes not only written information but also information
transferred orally, visually, electronically or by any other means.  The fact
that such information has been delivered to you, that the making of a Loan to
the Partnership is under consideration, that discussions or negotiations have
occurred or are occurring regarding the Loan, and the status of any such
discussions or negotiations, are considered Confidential Information for
purposes of this confidentiality agreement (this "Agreement").  In consideration
of our furnishing you with the Confidential Information, and as a condition to
such disclosure, you agree as follows:
 
1.  
The Confidential Information will be used by you solely for the purpose of your
evaluation of the desirability of making the Loan and for no other purpose.

 
2.  
You shall keep all Confidential Information confidential and shall not, without
the prior written consent of the Partnership, disclose it to anyone except to a
limited group of your own employees, agents and advisors (collectively,
“Representatives”) who are actually involved in evaluating, and need to know,
such Confidential Information to perform the evaluation referred to above, each
of whom must be advised of the confidential nature of the Confidential
Information and of the terms of this Agreement and must agree to abide by such
terms.  You shall be responsible for any breach of this Agreement by any of your
Representatives.

 
3.  
Upon any termination of your evaluation of the Loan or upon written notice from
the Partnership to you (i) you will return to the Partnership or destroy the
Confidential Information which is in tangible form, including any copies which
you may have made, and you will destroy all abstracts, summaries thereof or
references thereto in your documents, and you will delete all electronic or
computerized information, and notify us that you have done so, and (ii) you and
your Representatives will continue to maintain the confidentiality of all
Confidential Information, and neither you nor your Representatives will use any
of the Confidential Information with respect to, or in furtherance of, your
business, any of their respective businesses, or in the business of anyone else,
whether or not in competition with the Partnership, or for any other purpose
whatsoever.

 

 
 

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4.  
Confidential Information includes all analyses, compilations, forecasts,
reports, investigations, studies or other documents prepared by us, our
representatives, you or your Representatives in connection with your evaluation
of the Loan.  Confidential Information does not include any information which
was publicly available prior to your receipt of such information or thereafter
became publicly available (other than as a result of disclosure by you or any of
your Representatives).  Information shall be deemed “publicly available” if it
becomes a matter of public knowledge or is contained in materials available to
the public or is obtained from any source other than the Partnership (or their
respective partners, officers, directors, equity holders, employees,
representatives, agents or outside advisors), provided that such source is not
prohibited from disclosing such information by a legal, contractual or fiduciary
obligation to the Partnership and did not obtain the information from an entity
or person prohibited from disclosing such information by a legal, contractual or
fiduciary obligation to the Company.

 
5.  
You understand that we have endeavored to include in the Confidential
Information those materials which we believe to be reliable and relevant for the
purpose of your evaluation, but you acknowledge that neither the Partnership nor
any of their respective partners, officers, directors, equity holders,
employees, representatives, agents or outside advisors make any representation
or warranty as to the accuracy or completeness of the Confidential Information
and you agree that such persons shall have no liability to you or any of your
Representatives resulting from any use of the Confidential Information.

 
6.  
In the event that you or any of your Representatives is requested in any
proceeding to disclose any of the Confidential Information, you will provide the
Partnership with prompt prior notice so that the Partnership may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement.  In the event that the Partnership is unable to
obtain such protective order or other appropriate remedy, you will furnish only
that portion of the Confidential Information which you are advised by a written
opinion of counsel is legally required, you will give the Partnership written
notice of the information to be disclosed as far in advance as practicable and
you will cooperate with the Partnership to obtain a protective order or other
reliable assurance that confidential treatment will be accorded the Confidential
Information so disclosed.

 
7.  
Without impairing any other provision hereof, you will promptly advise the
Partnership of any prohibited disclosure or other breach of this Agreement of
which you become aware.

 

 
 

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8.  
You understand and agree that money damages may not be a sufficient remedy for
any breach of this Agreement by you or your Representatives, and that the
Partnership, and their respective partners, officers, directors, equity holders,
employees, representatives, agents and advisors, shall be entitled to specific
performance and/or injunctive relief as a remedy for any such breach.  Such
remedy may not be deemed to be the exclusive remedy for any such breach of this
Agreement, but shall be in addition to all other remedies available at law or in
equity.  You further agree that no failure or delay by the Partnership, or their
respective partners, officers, directors, equity holders, employees,
representatives, agents or advisors, in exercising any right, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege under this Agreement.

 
9.  
Nothing in this Agreement shall impose any obligation upon you or us to provide
Confidential Information,  consummate the Loan or to enter into any discussions
or negotiations with respect thereto.

 
10.  
This Agreement shall be governed by the laws of the State of Florida (without
giving effect to any conflicts of law principles).

 
11.  
If any provision of this Agreement is determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by applicable law.

 
12.  
This Agreement may be executed in several counterparts and all so executed shall
constitute one agreement binding on all of the parties, notwithstanding that all
of the parties are not signatory to the original or the same counterpart.  In
addition, any counterpart signature page may be executed and delivered by
facsimile or portable document format ("PDF") and any such faxed or PDF
signature pages may be attached to one or more counterparts of this Agreement,
and such faxed or PDF signature(s) shall have the same force and effect as if
original signatures had been executed and delivered in person.

 

 
 

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If you are in agreement with the foregoing, please sign and return the enclosed
copy of this letter which will constitute our agreement with respect to the
subject matter of this letter as of the date first above written.
 
Very truly yours,

SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

By:                                                      
Name:                                                                
Title:                                                                

AGREED TO AND ACCEPTED:
 
[________________________]

By: _____________________
       Name:
       Title:

 
 

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EXHIBIT "8"

FINAL FORM

RELEASE AND INDEMNIFICATION AGREEMENT

This Release and Indemnification Agreement ("Agreement") is made and entered
into as of ________, __ 20__ (the "Effective Date") by and among Fortune KB GP,
LLC, a Florida limited liability company ("Fortune GP"), Fortune KB, LLC, a
Florida limited liability company, ("Fortune LP" and together with Fortune GP,
the "Fortune Partners") Edgardo Defortuna, an individual ("Defortuna"),
SBR-Fortune Associates, LLLP, a Florida limited liability limited partnership
("Partnership") and Sonesta Beach Resort Limited Partnership, a Delaware limited
partnership ("Sonesta Beach" and together with the Partnership, the "Releasing
Parties").

WHEREAS, Sonesta Beach and the Fortune Partners are all of the partners in the
Partnership, pursuant to the Agreement of Limited Liability Limited Partnership
of SBR-Fortune Associates, LLLP dated as of January 17, 2005, as amended by that
certain First Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of February 25, 2005, and by that certain
Second Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of March 2, 2005, and by that certain
Third Amendment to Agreement of Limited Liability Limited Partnership of
SBR-Fortune Associates, LLLP dated as of April 15, 2005, and by that certain
letter agreement (the “Letter Agreement ”), among Fortune GP, Fortune LP and
Sonesta Beach, dated as of June 18, 2009 (collectively, the "Partnership
Agreement"); (all terms appearing herein in initial capitalized letters but not
otherwise defined herein shall have the meanings ascribed thereto in the
Partnership Agreement);

WHEREAS, as of the Effective Date, there has been a closing pursuant to which
there has been a (i) sale of the Property (whether effected directly or via a
merger or consolidation of the Partnership), (ii) sale of all or substantially
all of the Partnership Interests (whether effected directly or via merger or
consolidation of the Partnership or via the sale of all or substantially all of
the equity interests in Sonesta Beach, Florida Sonesta Corporation or via  the
entering into by the Partnership of a joint venture or similar arrangement
pursuant to which a third party or parties obtain(s) more than a de minimis
direct or indirect interest in the Property), (iii) admission of one (1) or more
persons or entities as partners in the Partnership (or the Partnership closing
on a loan which contains either a conversion feature allowing the holder to
acquire equity in the Partnership or provides for some level of participation by
the lender in the Partnership's revenues, profits or cash flow), or (iv) the
entering into by the Partnership of a joint venture or similar arrangement (any
of the transactions described in (i) through (iv) are referred to as a
"Triggering Transaction");

WHEREAS, subject to the terms of this Agreement, the Releasing Parties have
agreed to release the Fortune Partners from all of their obligations under the
Partnership Agreement as more particularly described herein, and, to release
Defortuna from all of his individually guaranteed obligations under the
Partnership Agreement, including but not limited to those obligations set forth
in Sections 4.4(a)(4), 4.4(c)(3), 7.2 and 8.6(e) of the Partnership Agreement;

 
 

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WHEREAS, subject to the terms of this Agreement, the Releasing Parties have
agreed that upon the occurrence of a Triggering Transaction, they shall cause
HSBC Realty Credit Corporation (USA) ("HSBC") to release Defortuna from any and
all liabilities and obligations (the "HSBC Release") arising under or related to
that certain Loan Agreement entered into by and between HSBC and the Partnership
as of April 19, 2005, as amended to the date hereof (such indebtedness, the
"HSBC Indebtedness"); and

NOW THERFORE, in consideration of the mutual promises and other consideration,
the value of which is hereby acknowledged, it is agreed by and between the
parties as follows:

1. Recitals.  The foregoing preliminary statements are true and correct and
incorporated herein by reference
 
2. Partnership Agreement Release.  Effective as of the Effective Date, the
Releasing Parties, on their own behalf and on behalf of their Affiliates, hereby
unconditionally and irrevocably release, remise, acquit, waive and discharge the
Fortune Partners and Defortuna of and from any and all actual or potential
rights, damages, demands, liabilities, obligations, actions, causes of action,
suits, losses, costs and expenses, whether direct or indirect, contingent or
consequential, liquidated or unliquidated, known or unknown, suspected or
unsuspected that any of the Releasing Parties might have against the Fortune
Partners and/or Defortuna, of whatever kind or nature, whether in law, equity,
or otherwise, from the beginning of the world to the Effective Date arising out
of, under or attributable to the Partnership Agreement, including but not
limited to those certain obligations set forth in Sections 4.4(a)(4), 4.4(c)(3),
7.2 and 8.6(e) of the Partnership Agreement, but specifically excluding matters
arising out of the gross negligence,  willful misconduct or fraud of the Fortune
Partners and/or Defortuna.  Effective as of the Effective Date, the Fortune
Partners and Defortuna, on their own behalf and on behalf of their Affiliates,
hereby unconditionally and irrevocably release, remise, acquit, waive and
discharge the Releasing Parties of and from any and all actual or potential
rights, damages, demands, liabilities, obligations, actions, causes of action,
suits, losses, costs and expenses, whether direct or indirect, contingent or
consequential, liquidated or unliquidated, known or unknown, suspected or
unsuspected that any of the Fortune Partners and Defortuna might have against
the Releasing Parties, of whatever kind or nature, whether in law, equity, or
otherwise, from the beginning of the world to the Effective Date arising out of,
under or attributable to the Partnership Agreement, but specifically excluding
matters arising out of the gross negligence,  willful misconduct or fraud of any
one or more of the Releasing Parties.
 
3. Partnership Agreement Indemnification.  The Releasing Parties jointly and
severally agree to, shall and hereby indemnify and hold harmless the Fortune
Partners and Defortuna, of, from and against any and all liabilities, costs,
losses, expenses, claims or damages of any kind or nature, including, without
limitation, any suits, proceedings, claims or demands  (including, but not
limited to, attorneys' fees and costs paid or incurred in connection therewith
at both trial and appellate levels) incurred or arising by reason of or in
connection with any third party claims brought against any of the Releasing
Parties, the Fortune Partners or Defortuna, relating to the Partnership or the
Partnership Agreement.  Attached as Exhibit A is a list of all of the claims for
which Fortune GP has received written notice or has actual knowledge of as of
the Effective Date ("Noticed Claims").  The Fortune Partners and Defortuna each
hereby represent and warrant to the Releasing Parties, that, to the best
knowledge of the Fortune Partners and Defortuna, the schedule of Noticed Claims
attached as Exhibit A hereto is true, accurate and complete.
 

 
 

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4. HSBC Indebtedness Guarantee. As a condition precedent to a closing under any
Triggering Transaction, there shall be an absolute obligation on the part of the
Partnership to obtain the HSBC Release and deliver same to the Fortune Partners
and Defortuna prior to a closing under any such Triggering Transaction.
 
5. Intentionally Omitted.
 
6. Affiliate.  For purposes of this Agreement, the term "Affiliate" means with
respect to any Person, a Person directly or indirectly controlling or controlled
by or under common control with such Person.  "Person" means an individual,
corporation, partnership, business trust, limited liability company,
unincorporated association, joint stock company, trust, joint venture, or other
entity or organization.
 
7. Representations and Warranties.  Each party hereto hereby represents and
warrants that the individual executing this Agreement on behalf of such party is
duly authorized to execute, deliver and perform this Agreement on behalf of such
party and to bind such party to its agreements herein and that this Agreement is
enforceable against such party in accordance with its terms.
 
8. Entire Agreement; Amendments.  This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements, promises and
understandings, whether oral or written regarding the release and
indemnification of the Fortune Partners and Defortuna.  This Agreement shall not
be modified, amended, supplemented or revised, except by a written document
signed by all parties.
 
9. Governing Law/Venue.  This Agreement shall be governed by and construed in
accordance with the local laws of the State of Florida without reference to that
state's rules regarding choice of law.  The exclusive venue for all actions or
disputes relating to this Agreement shall be the state or federal courts located
in Miami-Dade County in the State of Florida, and the Parties hereby agree not
to assert, by way of motion, as a defense, or otherwise in any such suit, action
or proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced by such courts.
 
10. Severability.  Any provision of this Agreement, which is unenforceable in
any jurisdiction, shall be ineffective in such jurisdiction to the extent of
such unenforceability without invalidating the remaining provisions of this
Agreement, and any unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
 
11. No Waiver.  The waiver of any breach or default of any of the terms,
provisions or covenants of this Agreement shall not be deemed to be, nor shall
the same constitute, a waiver of any subsequent breach or default of such term,
provision or covenant or of any other term, provision or covenant contained
herein.
 

 
 

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12. Counterparts.  This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement binding on all of the parties,
notwithstanding that all of the parties are not signatory to the original or the
same counterpart.  In addition, any counterpart signature page may be
executed and delivered by facsimile or portable document format ("PDF") and any
such faxed or PDF signature pages may be attached to one or more counterparts of
this Agreement, and such faxed or PDF signature(s) shall have the same force and
effect as if original signatures had been executed and delivered in person.
 
13.           No Construction Against
Draftsmen.                                                                           The
parties acknowledge that this is a negotiated agreement, and that in no event
shall the terms of this Agreement be construed against any party on the basis
that such party, or its counsel, drafted this Agreement.
 

[EXECUTIONS COMMENCE ON FOLLOWING PAGE]

 
 

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FORTUNE GP

FORTUNE KB GP, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
a Florida corporation, its Manager

By:                                                                
Edgardo Defortuna, President

FORTUNE LP

FORTUNE KB, LLC,
a Florida limited liability company

By:           Fortune International Management, Inc.,
a Florida corporation, its Manager

By:                                                                
Edgardo Defortuna, President

EDGARDO DEFORTUNA

__________________________

(First signature page to Release and Indemnification Agreement)

 
 

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SBR-FORTUNE ASSOCIATES, LLLP
a Florida limited liability limited partnership

By:                                                      
Name:                                                                
Title:                                                                

SONESTA BEACH RESORT LIMITED PARTNERSHIP, a Delaware limited partnership

 
By:
FLORIDA SONESTA CORPORATION, a Florida corporation

By:                           
Peter J. Sonnabend
Vice President

(Final signature page to Release and Indemnification Agreement)

 
 

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Exhibit A

         Noticed Claims

IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT, IN AND FOR MIAMI-DADE COUNTY,
FLORIDA GENERAL JURISDICTION DIVISION CASE NO. 07-15905 CA 31. JULIO A. PADILLA
and CAROLINA V. TOZZI PADILLA, Plaintiffs, v. VILLAGE OF KEY BISCAYNE,
Defendant, and SBR-FORTUNE ASSOCIATES, LLLP, Intervenor.

 
 

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