LOAN AGREEMENT
By and Between
SONESTA INTERNATIONAL HOTELS LIMITED
(LENDER)
and
MASTERS OF TOURISM
(BORROWER)
Loan Agreement
This Loan Agreement is made as of the ___ day of December , 1996 in the
City of Boston, Massachusetts, U.S.A. by and between SONESTA INTERNATIONAL
HOTELS LIMITED organized and existing under the laws of The Bahamas and having
its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇.▇.▇. and represented in the signature of this Agreement by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Vice President (hereinafter referred to as the "Lender"), and MASTERS OF TOURISM
organized and existing under the laws of The Arab Republic of Egypt_ and having
its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇ Avenue, El Abour Building, ▇▇.
▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ and represented in the signature of this
Agreement by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, CHAIRMAN (hereinafter referred to as the
"Borrower")
WHEREAS the Lender agrees to provide the Borrower with a loan facility in
the amount of One Million Dollars (U.S. $1,000,000.00) to be used as hereinafter
mentioned and upon and according to the terms and subject to the conditions
hereinafter mentioned. Now it is hereby agreed as follows:
SECTION 1. DEFINITIONS
The following terms shall have the meanings set forth below.
1.01 "Advance" shall mean an advance to the Borrower by the Lender pursuant to
Section 2 of this Agreement.
1.02 "Banking day" shall mean a day on which banks are open for business in
New York and London for interbank Dollar deposits in London.
1.03 "Commitment" shall mean the Loan.
1.04 "Dollars" and the sign "$" shall mean the lawful money of the United
States of America.
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1.05 "Drawdown" shall mean such borrowing by the Borrower of part or all of
the Commitment.
1.06 "Event of Default" shall have the meaning set forth in Section (8.01) of
this Agreement.
1.07 "Indebtedness" shall mean in regard to the Borrower all indebtedness
(including guaranties and other contingent obligations) with respect to
borrowed money.
1.08 (a) "Interest period" shall mean the period commencing on the date of the
Drawdown and having a duration of six months and each period thereafter
commencing on the last day of the then current Interest period and having
a duration of six months.
(b) If any Interest period would otherwise end on a day which is not a
Banking day, that Interest period shall be extended to the next
succeeding day which is a Banking day unless the result of such extension
would be to carry such Interest period over into another calendar month,
in which event such Interest period shall end on the first preceding
Banking day.
1.09 "Lending office" shall mean the office of the Lender located at its
address or any other office of such Lender as it may from time to time
notify the Borrower.
1.10 "Loan" shall mean the principal amount of One Million Dollars
(U.S.$1,000,000) made by the Lender to the Borrower hereunder or, where
the context may require, the amount thereof then outstanding.
1.11 "Interest Rate" shall mean the interest rate agreed by both parties which
is LIBOR ( one (1) year rate) plus 2% per annum. The Interest Rate shall
be adjusted as of January 1 and July 1 of each year.
1.12 "Improvements" shall mean and refer to the additional Hotel facilities
referenced in Section 2.02.
1.13 "Management Agreement" shall mean and refer to the management contract
between Lender and Borrower, dated December 13, 1991, as amended, under
which Lender operates the Hotel.
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SECTION 2. THE LOAN
2.01 Agreement to Lend. Subject to the terms and conditions of this Agreement,
the Lender hereby agrees to advance the Commitment to the Borrower through
Lender's Lending office.
2.02 Purpose of the Loan. The Borrower agrees that the Loan will be used to
finance the expansion and improvement of that certain hotel known as Sonesta
Beach Resort, Sharm El Sheikh (the "Hotel"). Specifically, Borrower will use the
Loan to create the following additional Hotel facilities:
-- 80 guestrooms (74 by new construction, 6 by completing
existing guestrooms)
-- 10,000 square foot conference center, plus appropriate
food and beverage service facilities
-- fitness center
-- 10,000 square foot swimming pool
-- increased water capacity
-- additional housing for twenty (20) Hotel employees
2.03 Drawdown.
(A) The Loan shall be funded as follows:
-- one-half (1/2): $500,000.00 when Lender has approved
the plans and specifications for the Improvements, and
construction has commenced
-- one-quarter (1/4): $250,000.00 when the development of
the Improvements is fifty percent (50%) compete
-- one-quarter (1/4): $250,000.00 when the Improvements
are completed (as completion is described in Section 2
of the "Third Amendment" to the Management Agreement).
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(B) Subject to (A) above, Borrower may borrow each portion of the
Commitment in one Drawdown (on any Banking day during the Commitment in one
period).
(C) The Borrower shall give the Lender notice of Drawdown, which notice
shall be received by the Lender at least five (5) Banking Days prior to the
proposed date of Drawdown, and which notice Lender shall accept provided that on
the date five (5) Banking days prior to the proposed date of Drawdown all
applicable conditions precedent specified in sections 7.01 and 7.02 have been
met. The Lender shall give the Borrower prompt confirmation or its acceptance of
the Borrower's notice of Drawdown.
2.04 Interest. The Borrower agrees to pay to the Lender interest on the Loan at
a rate determined to be LIBOR (one (1) year rate) plus 2% per annum, which shall
be adjusted as of January 1 and July 1 of each year .
2.05 Default Interest.
(A) Upon the occurrence of an Event of Default, the Borrower shall,
upon notice by the Lender, pay on demand interest on the Loan outstanding at the
rate that is three percentage (3%) points per annum above the interest rate on
the Loan calculated pursuant to Section 2.04.
(B) In addition to payment of such default interest, the Borrower shall
indemnify the Lender against any costs and losses which are not covered by the
default interest payable pursuant to Section 2.05 (A) resulting from the
Borrower failing to pay when due any amounts of principal or interest hereunder.
2.06 Repayment of Loan. The Loan shall be repaid to Lender out of the "Owner's
Return" payable to Owner (as provided in the Management Agreement) in 12 annual
installments of $83,333.33 each, together with interest thereon, each such
payment shall be made on or before January 1 of each year, commencing January 1,
1998. The Operator, under the said Management Agreement, is hereby authorized
and instructed to make any payment(s) due hereunder from "Owner's Return"
directly to itself as Lender hereunder.
2.07 Payment and Advances.
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(A) All sums payable to the Lender hereunder or under any document
contemplated hereby, including but not limited to payments of principal and
interest and any costs or expenses, shall be payable by wire to the United
States, in U.S. Dollars in same day funds (immediately available funds) not
later than 10:00 a.m. Boston USA time on the day in question to the Lender
(account number):
United States Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA No. ▇▇▇▇▇▇▇▇▇
Credit to Sonesta International Hotels Corporation
Master Account 885-▇▇▇▇▇▇▇
Notify: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Telephone: (▇▇▇) ▇▇▇-▇▇▇▇)
(B) Any payments made to the Lender hereunder shall be applied first
against costs, expenses and indemnities due hereunder; then against fees due to
the Lender; then against default interest, if any; then against interest due on
the Loan; and thereafter against the principal of the Loan due and payable.
(C) All sums to be advanced by the Lender to the Borrower hereunder shall
be payable in U.S. Dollars ($) in same day funds not later than 10:00 a.m. time
on the day in question to or for the account of the Borrower pursuant to written
instructions delivered to Lender by Borrower at least three (3) Banking days
prior to the expected funding date of such Advance.
3.01 Taxes.
(A) All sums payable by the Borrower hereunder, whether of principal,
interest, fees, expenses or otherwise, shall be paid in full, free of any
deductions or withholdings imposed, levied or withheld by or within the Arab
Republic of Egypt. In the event that the Borrower is prohibited by law from
making payments hereunder free of deductions or withholdings, then the Borrower
shall pay such additional amount to the Lender as may be necessary in order that
the actual amount received after deduction or withholding (and after payment of
any additional taxes or other charges due as a
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consequence of payment of such additional amount) shall equal the amount that
would have been received if such deduction or withholding were not required.
(B) The Borrower shall pay directly to the appropriate taxing authority any
and all present and future taxes, levies, imposts, deductions, stamp and other
duties, filing and other fees or charges and all liabilities with respect
thereto imposed by law or by any taxing authority on or with regard to any
aspect of the transactions contemplated by this Agreement or the execution and
delivery of this Agreement or other documentation hereunder.
The Borrower shall hold the Lender harmless from any liability with respect
to the delay or failure by the Borrower to pay such taxes or charges, and shall
reimburse the Lender upon demand for any such taxes paid by Lender in connection
herewith whether or not such taxes shall be correctly or legally asserted or
otherwise contested or contestable, together with any interest, penalties,
premiums, and expenses in connection therewith.
(C) If the Borrower shall pay any tax or charge as provided herein or shall
make any deductions or withholdings from amounts paid hereunder, the Borrower
shall forthwith forward to the Lender official receipts or other evidence
acceptable to the Lender establishing payment of such amounts.
(D) If the Borrower shall be required under this Section to pay, or to
reimburse Lender for, any tax or charge not currently in effect, then the
Borrower may at any time within thirty (30) days of the effectiveness of the
requirement of such payment or reimbursement prepay the Lender's Advances,
subject to giving the Lender not less than five (5) Banking days notice thereof.
3.02 Prepayment. The Borrower may, by giving to the Lender not less than thirty
(30) days prior notice, elect to prepay the whole or any part of the Advance(s).
Any such notice shall be irrevocable.
SECTION 4. FEES AND CHARGES
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4.01 Expenses. The Borrower shall reimburse the Lender on demand for all
reasonable expenses, including without limitation fees and expenses of legal
counsel and fees and expenses of other professional advisors, incurred by the
Lender. Such expenses shall be reimbursed whether or not they arise during the
term of this Agreement or whether or not the Lender gives notice(s) of any Event
of Default or demands acceleration of the Loan or takes other action(s) to
enforce the provisions of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES
The Borrower represents, warrants and covenants to the Lender as follows:
5.01 Incorporation and Qualifications. The Borrower is duly incorporated, under
the laws of the Arab Republic of Egypt and the Borrower has its registered
office at the address first set forth above.
The Borrower is qualified or registered to do business in every
jurisdiction where such qualification or registration is necessary.
5.02 Power and Authority. The Borrower has full legal right, power and authority
to carry on its present business, to own its property and assets, to incur the
indebtedness and other obligation(s) provided for in this Agreement, to execute
and deliver this Agreement and to perform and observe the terms and conditions
hereof and thereof.
5.03 Legal Action. The Borrower has taken all appropriate and necessary
corporate action to authorize the execution and delivery of this Agreement and
the performance and observance of the terms and conditions hereof and thereof. A
copy of the Board Declaration (in English) passed by Borrower's Board of
Directors is attached hereto as Exhibit A.
5.04 Registration and Approvals. All registration with and approvals of any
governmental authority necessary for the due execution and delivery of this
Agreement
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and note have been obtained, and all such registrations and approvals necessary
for the performance or enforceability hereof and thereof have been obtained.
5.05 Agreement Binding. This Agreement constitutes the legal, valid and binding
obligations of the Borrower enforceable in accordance with their terms.
5.06 Other Obligations. The Borrower is not in default under any agreement,
obligation or duty to which it is a party or by which it, or any of its assets,
is bound.
5.07 Compliance With Law. The Borrower is conducting its business and operations
in compliance with all applicable laws and directives of governmental
authorities having the force of law and is in compliance with all laws, decrees,
instructions, orders, ordinances, regulations, guidelines, and policy statements
with which the Borrower is obliged to comply.
SECTION 6. COVENANTS
In addition to the other undertakings herein contained, the Borrower hereby
covenants to the Lender that during the term of this Agreement, the Borrower
shall act as follows and shall perform the following obligations:
6.01 Performance of Obligations. The Borrower shall punctually pay all
indebtedness and all amounts due under this Agreement at the times and on the
dates specified herein. The Borrower shall punctually perform all its other
obligations, undertakings and covenants under this Agreement.
6.02 Other Obligations. The Borrower will pay all its Indebtedness and perform
all contractual obligations promptly pursuant to every agreement to which it is
a party or by which it is bound at any time during the term of this Agreement.
6.03 Merger; Acquisition; Sale of Assets. The Borrower shall not, without prior
written consent of the Lender (which consent shall not be unreasonably withheld)
merge, reorganize or consolidate with any other corporation or purchase or
otherwise acquire all or a significant portion of the assets of any corporation,
partnership or sole proprietorship, except for any such acquisition arising out
of or in connection with the enforcement by the Borrower of any mortgage,
pledge, lien or other security interest.
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SECTION 7. CONDITIONS OF DRAWDOWN
7.01 Drawdown. The obligation of the Lender to make available its Advance(s) in
respect of the Drawdown is subject to the fulfillment, as determined solely by
the Lender and its counsel, of the following conditions precedent and payment of
all fees then payable five (5) Banking days prior to the date of such Drawdown
(except as otherwise indicated below) and the continued fulfillment of such
conditions on the date of such Drawdown.
7.02 Authorizations. The Lender shall have received in form and substance
satisfactory to it and to its counsel:
(A) A certificate of a Director of the Borrower (signed, sealed and
legalized) certifying the declarations resolutions of its Board of Directors (in
English) authorizing the transactions contemplated in this Agreement and
certifying the authority of the persons executing this Agreement.
(B) Notice of Drawdown: The Lender shall have received the timely notice of
the Borrower as specified in Section 2.03.
SECTION 8. EVENTS OF DEFAULT
8.01 Events of Default. Each of the following events and occurrences shall
constitute an Event of Default under this Agreement:
(A) The Borrower fails to make payment of any amount which it is obliged to
pay under this Agreement on the date when such amount is due and payable.
(B) It becomes unlawful for the Borrower to make any payment to be made
hereunder on the due date hereof in (U.S.) Dollars.
(C) The Borrower shall fail to pay monies under any other agreement or
document (including without limitation the Management Agreement), or there
occurs any other event of default or other event which, with the giving of
notice or the passing of time, or both, would constitute a default or an event
of default under any such
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agreement or document and the effect of which is to accelerate or to permit
acceleration of the maturity of any indebtedness.
(D) Any circumstances occur which in the opinion of the Lender gives
reasonable grounds for belief that the Borrower will not (or will not be able
to) make payments when due in (U.S.) Dollars, or otherwise.
8.02 Consequence of Default. If an Event of Default shall occur and be
continuing the Lender at its option may: By written notice to the Borrower
declare the Loan, together with accrued interest and any other sum payable
hereunder, to be immediately due and payable and the Loan shall thereupon become
due and payable without presentment, demand, protest or notice of any kind,
other than the notices specifically required by this section, all of which are
expressly waived by the Borrower; and the Borrower shall also pay to the Lender
such additional amounts as may be necessary to compensate the Lender for any
costs or losses resulting from such Event of Default. The Borrower may also
explicitly enforce the security(ies) mentioned in Section 9.
SECTION 9. GUARANTEE
9.01 Conditional Assignment of Management Agreement. The Borrower agrees to
assign all of its rights and interests in the Management Agreement to the Lender
as additional security for the performance of its obligations under this Loan
Agreement. . This assignment is to be retained until the repayment of the
Advances, together with interest and all other amounts due under this Loan
Agreement. 9.02 Personal Guaranty. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ enters into this
Agreement in order to acknowledge his personal guaranty of Borrower's payment
and performance obligations under this Loan Agreement.
SECTION 10. MISCELLANEOUS
10.01 Term. The term of this Agreement shall commence on the date first set
forth above and terminate on the date of termination of the Lender's commitment
hereunder
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or, if later, upon payment in full of all principal, interest and other sums
payable by the Borrower hereunder. The indemnities of the Borrower shall survive
repayment of the Loan.
10.02 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire obligation of the Parties hereto with respect to the
subject matter hereof and shall supercede any prior expressions of intent or
understandings with respect to this transaction. Any amendment hereto shall be
in writing, signed by or on behalf of the Parties to be bound or burdened
thereby.
10.03 Indemnification. The Borrower agrees to indemnify and hold harmless the
Lender from and against any and all losses, claims, damages and liabilities
directly caused by any untrue or misleading statement or directly caused by any
omission of a material fact necessary to make the statements therein not
misleading.
10.04 Governing Law. This Agreement shall be governed by construed and
interpreted in accordance with the laws of the Arab Republic of Egypt.
10.05 Arbitration.
1. Any dispute, controversy or claim rising out of or relating to this
Agreement, or any breach, termination or invalidity thereof between both parties
shall be settled by arbitration through the Regional Center for Commercial
Arbitration, Cairo (the "Center") in accordance with the Arbitration Rules of
the United Nations Commission on International Trade Law (UNCITRAL).
2. The Arbitration tribunal shall be composed of three (3) arbitrators.
3. Each party shall appoint one (1) arbitrator. If, within thirty (30) days
after receipt of the claimant's notification of the appointment of an arbitrator
the respondent has not notified the claimant in writing of the name of the
arbitrator he appoints, the claimant may request "the Center" to appoint the
second arbitrator.
4. The two (2) arbitrators thus appointed shall choose the third arbitrator
who will act as President of the tribunal. If within thirty (30) days, after the
appointment of the second arbitrator, the two (2) arbitrators do not agree upon
the choice of a President, then either party may request the Secretary General
of the Permanent Court of Arbitration at the Hague to appoint the President in
the same way as a sole arbitrator
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would be appointed under Article 6.3 of the UNCITRAL Arbitration Rules. The
President shall be an individual of a nationality other than nationalities of
the parties and of a country which has diplomatic relations with the States to
which they belong and who shall have recognized knowledge and experience in the
hotel industry.
5. The arbitration proceeding, including the making of the award, shall
take place in Cairo.
6. The English Law shall apply to all aspects of the dispute.
7. Pending the award, the operations and activities under this Agreement
shall not be discontinued.
8. Subject to subsection 7, above, the provisions of this Agreement
relating to Arbitration shall continue in force notwithstanding the termination
of this Agreement.
9. The award rendered shall be final, binding on the parties and subject to
no appeal, except for abuse of authority or discretion by the arbitrators. The
award may be entered in any court having jurisdiction and application may be
made in such court for a judicial acceptance of the award or order of
enforcement, as the case may be.
10.06 Notices. Any notice required or permitted to be given hereunder shall be
in writing and shall be (i) personally delivered, (ii) transmitted by postage
prepaid registered or certified mail (airmail if international) or (iii) by
overnight courier service (such as Federal Express or DHL), to the parties as
follows, as elected by the party giving such notice:
To the Borrower: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Avenue
El Abour Building
▇▇. ▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇
To the Lender: Sonesta International Hotels Limited
c/o Sonesta International Hotels Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Attention: Office of the Treasurer
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Except as otherwise specified herein, all notices and other communications
shall be deemed to have been duly given on (i) the date of receipt if delivered
personally, (ii) the date of posting if transmitted by mail, or (iii) the date
of transmission with confirmed answerback if transmitted by telex, whichever
shall first occur; provided, that any notice to be given to the Lender shall be
effective only when received by the Lender.
10.07 Counterparts. This Agreement may be signed in any number of counterparts,
any single counterpart or a set of counterparts signed, in either case, by all
the parties hereby shall constitute a full and original agreement for all
purposes.
10.08 Time of Essence. Time is of the essence regarding the parties' respective
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in Boston, Massachusetts, U.S.A., by their respective duly authorized
signatories as of the day and year first written above.
Witness: SONESTA INTERNATIONAL HOTELS LIMITED
--------------------------- By:/s/
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Witness: MASTERS OF TOURISM
--------------------------- By:/s/
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Title: Chairman
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EXHIBIT A
BOARD DECLARATION
The Board of Directors of Masters of Tourism (S.A.E.), the sole owner and
beneficiary of that certain resort hotel known as Sonesta Beach Resort, Sharm El
Sheikh, in its meeting held on ______________ in the city of _______________
declares and represents that the company did not assign any of its rights in the
said hotel to any legal entity or person and approves unanimously the Loan
Agreement granted from Sonesta International Hotels Limited to our company for
the amount of U.S. One Million Dollars ($1,000,000.00). This loan shall be
repaid over 12 years together with interest at LIBOR plus 2 points, in
accordance with the Loan Agreement.
The Board of Directors approves as a guarantee for the said loan to assign
unconditionally all of its rights and interests in the Management Agreement of
and pertaining to SONESTA BEACH RESORT, SHARM EL SHEIKH, dated December 13, 1991
to SONESTA INTERNATIONAL HOTELS LIMITED.
The Board of Directors delegates ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Aly to sign on behalf
of the company the Loan Agreement and any documents relating to the said Loan.
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STATE OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized in
The Commonwealth of Massachusetts to take acknowledgments, personally appeared
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, CHAIRMAN OF MASTERS OF TOURISM, to me known to be the
person described in and who executed the foregoing instrument and he
acknowledged before me that he executed the same.
WITNESS by hand official seal in ______________________________ aforesaid
this ___ day of December, 1996.
--------------------------------------
Notary Public
My Commission Expires: _________________
STATE OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
I HEREBY CERTIFY that on this day, before me an officer duly authorized in
the State and County aforesaid to take acknowledgments, personally appeared
▇▇▇▇▇ ▇. SONNAEND, VICE PRESIDENT of SONESTA INTERNATIONAL HOTELS LIMITED, that
said individual so appearing before me is known to me to be the individual
described in and who executed the foregoing instrument as Vice President of said
corporation; that said individual signed, sealed and delivered the said
instrument as the free and voluntary act of the corporation for the uses and
purposes therein set forth.
WITNESS my hand and official seal in the County of Suffolk, State of
Massachusetts, this ___ day of __________, 1996.
----------------------------------------
Notary Public
My Commission Expires: _________________
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