LOAN AGREEMENT
Exhibit 2.2
This Loan Agreement (hereinafter referred to as the
“Agreement”), has been entered into on this day
10 December 2009 by and between:
1- Ridgewood Egypt for Infrastructure Projects, an
Egyptian limited liability company, established in accordance
with the Law Xx. 0 xx 0000, xxxxxxxxxx xxxxxxxx
Xx. 000000 issued on November 11, 1999, with its head
office located at 000 Xx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx,
Xxxxx, represented herein by Xx. Xxxx Xxxxxx in his
capacity as the Manger of the Company (hereinafter referred to
as the “Company” or “Borrower”).
2- Water Desal, a Cayman Island exempted company,
established in accordance with the Laws of the Cayman Islands,
on
19/11/2009,
with its head office located at Xxxxxx Corporate Services
Limited XX Xxx 000, Xxxxxx Xxxxx, Xxxxx Xxxxxx
XX0-0000, the Cayman Islands, represented herein by
Xx. Xxxxx Xxxxx, in his capacity as Director (hereinafter
referred to as the “Lender” or “EFG”).
3- Xx. Xxxx Xxxxxx, an Egyptian national
holding ID No. 25809011602892, residing at 000 Xx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxx, Xxxxx (hereinafter referred to as the
“Guarantor”).
PREAMBLE
WHEREAS, the Company is one of the leading companies
working in the field of water desalination in Egypt,
specifically in Sinai;
WHEREAS, EFG is a private equity company interested in
investing in the Company;
WHEREAS, the Guarantor is the general manager of the
Company and is interested to acquire the total share capital of
the Company from the existing shareholders, being Ridgewood Near
East Holding LLC and RW Egyptian Holding LLC (“Ridgewood
Entities”).
WHEREAS, EFG desires to finance the Company for the
Guarantor to purchase the total share capital of the Company,
the beneficial ownership of which is that of the Ridgewood
Entities, directly through the Guarantor and Xxx. Xxxxxxx
Xxxxx Xxxx Xxxxxx
and/or
indirectly through a wholly owned company by the Guarantor and
his family members up to the first degree ;
WHEREAS, the Company wishes to take a loan from EFG
against a set of guarantees to be entered into in favor of EFG
from the Company and the Guarantor;
THEREFORE, the Parties have declared their contractual
capacities and mutually agreed to the following:
ARTICLE 1:
DEFINITIONS
AND PREAMBLE
1.1 Definitions:
| “Balance of the Ridgewood Loan” | means the amount of the Ridgewood Loan minus the Loan Amount; | |
| “Cheques” | Has the meaning given to it under Article 2.4.5 of this Agreement; |
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| “Document Holder” | means Xx. Xxxxxxx Xxxxx Xxxxxx, attorney at law, holding Egyptian passport No. , residing at Xxxx Xxxx Xxxxxx, Xxxxx Xxxxx, 00xx Xxxxx, Xxxxx, Xxxxx; | |
| “Escrow Account” | means the escrow account to be opened with a bank in accordance with the Escrow Agreement to hold in escrow the Loan Amount to be released in accordance with the terms of the Escrow Agreement. | |
| “Escrow Agent” | means the escrow agent as defined in the Escrow Agreement; | |
| “Escrow Agreement” | means the Escrow Agreement to be entered into between the EFG,ZG, the Ridgewood Entities and the Escrow Agent on the date hereof in relation to the payment of the Loan Amount in the form attached hereto in Schedule 1; | |
| “Loan Amount” | shall have the meaning referred to in Article 2.1 of this Agreement. | |
| “Loan Amounts Repayable” | shall have the meaning referred to in Article 3.1 of this Agreement. | |
| “Parties” | means the Company, EFG and the Guarantor; | |
| “Person” | means an individual, partnership, corporation, joint stock company, limited liability company, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof; | |
| “Ridgewood Loan” | shall have the meaning referred to in Article 2.1. | |
| “Sale Shares” | means the 20,000 fully paid quotas of the Company to be sold by the Ridgewood Entities to the Guarantor whether directly or indirectly through a wholly owned company by the Guarantor and his family members up to the first degree in accordance with the terms and conditions of the Sale and Purchase Agreement dated 10 December 2009. |
1.2 Preamble
The above Preamble is considered a part and parcel of this
Agreement.
ARTICLE 2:
LOAN
2.1 The Lender shall lend the Borrower a loan in the amount
of USD 13,000,000 (thirteen million United States Dollars)
(hereinafter referred to as the “Loan Amount”)
to be used by the Company for the repayment of the partial
amount of the loan granted to the Company by the Ridgewood
Entities the outstanding balance thereof is in an amount of
USD 25,563,086 (the “Ridgewood Loan”). The
Lender shall lend the Borrower the Loan Amount and the Borrower
agrees to borrow from the Lender the Loan Amount based on the
terms and conditions of this Agreement and the Escrow Agreement.
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2.2 The Parties hereby agree that the Lender shall deposit
the Loan Amount on the date hereof in the Escrow Account only to
be released by the Escrow Agent as per the terms and conditions
of the Escrow Agreement.
2.3 In the event the Escrow Agreement terminates as per
Clause 9.1 (ii) and 9.2 under the Escrow Agreement,
then this Agreement shall terminate and the Escrow Agent shall
release the Loan Amount in full to the Lender in accordance with
the terms of the Escrow Agreement. Upon termination of this
Agreement, all the security documents listed under
Article 4.1 whether deposited with the Escrow Agent or the
Document Holder shall be cancelled and returned to the Company
or the Guarantor as the case may be.
2.4 On the date of signing this Agreement, the following
shall take place simultaneously:
2.4.1 Execution of (i) a share pledge agreement by the
Guarantor in favor of EFG, , (ii) a share pledge agreement
by the Guarantor and Xx. Xxxxxxx Xxxxx Xxxx Xxxxxxx in
favor of EFG and (iii)a share pledge agreement by El Orouba for
Water Desalination S.A.E, a company solely owned by the
Guarantor and his immediate family (being his wife and daughter)
in favor of EFG, whereby the owner of the shares, as the case
may be, issues a first priority pledge over the Sale Shares in
favor of the Lender in the form attached hereto in
Schedule 3 and deposit of same with the Document
Holder.
2.4.2 Signature by the Company of a Real Estate Mortgage
Power of Attorney and deposit of same with the Escrow Agent in
the form attached hereto in Schedule 4.
2.4.3 Execution by the Guarantor of a number of twelve
(12) cheques in favor of the Lender in the aggregate amount
of the Loan Amounts Repayable, as detailed hereunder
(hereinafter singly referred to as the “Cheque” or
collectively as the “Cheques”), and withdrawn
on an Egyptian bank to be acceptable to the Lender to be
deposited with the Document Holder.
|
Cheque
|
Dated
|
Drawee Bank | Loan Amount Payable | To Cover Payment | ||||||||||||
|
Cheque No. 888504
|
21/9/2010 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
20/12/2010 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
20/03/2011 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
18/06/2011 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
16/09/2011 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
15/12/2011 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
14/03/2012 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
12/06/2012 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
10/09/2012 | CIB | $ | 1,445,898 | Payment Xx. 0 | |||||||||||
|
Xxxxxx Xx. 000000
|
09/12/2012 | CIB | $ | 1,445,898 | Payment Xx. 00 | |||||||||||
|
Xxxxxx Xx. 000000
|
09/03/2013 | CIB | $ | 1,445,898 | Payment Xx. 00 | |||||||||||
|
Xxxxxx Xx. 000000
|
07/06/2013 | CIB | $ | 1,445,898 | Payment No. 12 | |||||||||||
2.5 The Parties understand that the Document Holder shall
dispose of the document referred to in Article 2.4.3 above,
as well as the Cheques, in the manner outlined in the letter of
document handling to be agreed to between the Borrower, the
Lender and the Document Holder.
2.6 Upon the lapse of 6 (six) months after the date of the
release of the Loan Amount in accordance with the terms of this
Agreement and the Escrow Agreement and subject to the
Lender’s approval, which shall not be unreasonably withheld
or delayed, the Borrower shall have the right, at its sole
discretion and without any penalty, to pre-pay in full any and
all outstanding amounts under this Agreement at any time in
United States Dollars, as per the schedule hereunder. The
payment of
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such amounts shall constitute full satisfaction of the
obligations of the Borrower hereunder and shall release the
Borrower and the Guarantor from all payment obligations under
this Agreement and this Agreement shall terminate.
|
Release Amount
|
Date | |||
|
$14,112,658
|
21/9/2010 | |||
|
$13,173,430
|
20/12/2010 | |||
|
$12,196,632
|
20/03/2011 | |||
|
$11,180,763
|
18/06/2011 | |||
|
$10,124,260
|
16/09/2011 | |||
|
$9,025,496
|
15/12/2011 | |||
|
$7,882,781
|
14/03/2012 | |||
|
$6,694,358
|
12/06/2012 | |||
|
$5,458,398
|
10/09/2012 | |||
|
$4,173,000
|
09/12/2012 | |||
|
$2,836,185
|
09/03/2013 | |||
|
$1,445,898
|
07/06/2013 | |||
2.7 The Lender hereby agrees that in the event the Borrower
re-pays the amounts referred to in Clause 2.6 above, in
full satisfaction of its obligations under this Agreement, the
Lender shall immediately and without delay return the Cheques,
the Share Pledge Agreements and the Real Estate Mortgage Power
of Attorney to the Guarantor.
ARTICLE 3:
LOAN AMOUNTS
REPAYABLE
3.1 The Parties agreed that the Borrower is obliged under
this Agreement to make the following payments to the Lender in
the amounts referred to in Clause 3.2 hereunder in United
States Dollars, which shall be referred to as (the “Loan
Amounts Repayable”).
3.2 The Borrower agrees that the Loan Amounts Repayable
shall be paid to the Lender in United States Dollars on twelve
subsequent quarterly equal installments to be paid during a
three year period to commence 6 (six) months after the date of
the release of the Loan Amount in accordance with the terms of
this Agreement and the Escrow Agreement. The repayment shall be
according to the following schedule:
|
Payment No.
|
Loan Amount Repayable | Due Date | ||||||
|
Payment No. 1
|
$ | 1,445,898 | 21/9/2010 | |||||
|
Payment No. 2
|
$ | 1,445,898 | 20/12/2010 | |||||
|
Payment No. 3
|
$ | 1,445,898 | 20/03/2011 | |||||
|
Payment No. 4
|
$ | 1,445,898 | 18/06/2011 | |||||
|
Payment No. 5
|
$ | 1,445,898 | 16/09/2011 | |||||
|
Payment No. 6
|
$ | 1,445,898 | 15/12/2011 | |||||
|
Payment No. 7
|
$ | 1,445,898 | 14/03/2012 | |||||
|
Payment No. 8
|
$ | 1,445,898 | 12/06/2012 | |||||
|
Payment No. 9
|
$ | 1,445,898 | 10/09/2012 | |||||
|
Payment No. 10
|
$ | 1,445,898 | 09/12/2012 | |||||
|
Payment No. 11
|
$ | 1,445,898 | 09/03/2013 | |||||
|
Payment No. 12
|
$ | 1,445,898 | 07/06/2013 | |||||
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3.3 The Lender hereby agrees that for each payment made by
the Borrower according to the payment schedule referred to in
Article 3.2 above, the Lender shall release to the Borrower
the relevant Cheque for such payment as referred to in
Article 2.4.5 above.
ARTICLE 4:
LOAN GUARANTY
4.1 Without prejudice to Article 2.3, the Parties
hereby agree that the following guarantees shall be made
available to guarantee repayment of the Loan Amount and the
obligation of the Borrower to pay the Loan Amounts Repayable and
deposited with the Document Holder or the Escrow Agent (as the
case may be) on the date of this Agreement:
4.1.1 Real Estate Mortgage Power of Attorney in the form
attached herewith in Schedule 4 signed by the Company.
4.1.2 Executed Share Pledge Agreements in the form attached
herewith in Schedule 3.
4.1.3 The executed Cheques by the Guarantor as better
detailed in Clause 2.4.5 of this Agreement.
4.2 In all events, the Loan Amount, once released to the
Ridgewood Entities as per the terms of the Escrow Agreement,
shall be recorded on the Company’s books as a debt to the
Lender and immediately thereafter ratified by its general
assembly meeting.
ARTICLE 5:
EVENTS OF
DUE PAYMENT
5.1 The Loan Amounts Repayable shall fall due and the
Borrower shall pay the full Loan Amounts Repayable, immediately,
and without delay in the following event:
5.1.1 The Loan Amount is not used for the exclusive purpose
of repaying part of the Ridgewood Loan as agreed to in this
Agreement.
5.1.2 The Borrower fails to pay any payment relating to the
Loan Amounts Repayable on the due date set therefore and the
passage of ninety (90) days thereafter without payment of
the due amounts.
5.1.3 If it comes to the attention of the Lender, that the
Borrower is incapable of continuing its business on regular
basis.
5.1.4 If the Borrower fails to pay its due and undisputed
taxes or any other governmental moneys or is delayed in paying
same and his assets have been attached for this reason and such
attachment has a negative effect on the Borrower’s ability
to pay back the Loan Amounts Repayable in accordance with this
Agreement.
5.1.5 If the Borrower has presented incorrect material
information to the Lender.
5.1.6 If the Borrower becomes or is reasonably in risk of
becoming insolvent, bankrupt or is subject to attachment.
5.1.7 In the event the Borrower obtains other loans or
credit facilities from any other institution without the prior
approval of the Lender.
5.1.8 The Sale Shares are disposed of by sale, pledge,
granting any option or otherwise, in any manner whatsoever or to
any Person (other than the Guarantor or EFG) in contradiction to
this
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Agreement and other agreements entered into or to be entered
into between the Parties from time to time.
ARTICLE 6:
DELAY
INTEREST
6.1 In the event the Loan Amounts Repayable falls due in
accordance with Articles 5 above
and/or the
Borrower fails to repay the Loan Amounts Repayable to the Lender
in accordance with this Agreement, the Borrower shall be liable
to pay a delay interest of 1% per month or any part of a week
until full repayment of the due amount.
6.2 The delay interest above mentioned is not meant or
intended to be liquidated damages, as per the Egyptian Civil
Code, and the Parties agree that such amounts shall not be
subject to the review of arbitration.
ARTICLE 7:
NOTICES
The Parties hereby warrant that their residency and head office
locations referred to in this Agreement and that any notices or
announcements made thereon shall be considered valid and binding
on the Parties and in the event any Party changes its residency
or head office location, shall notify the other Party, in
writing, of its new address through registered mail with
acknowledgement of receipt.
ARTICLE 8:
ASSIGNMENT
This Agreement shall be binding on and inure to the benefit of
each Party’s permitted successors and assigns. No Party,
other than EFG, may assign (or declare any trust in favor of a
third party over) all or any part of the benefit of, or its
rights or benefits under, this Agreement without the prior
written consent of EFG. Any attempted assignment in violation of
this Clause 8 shall be void.
The Parties understand that any assignment by the EFG to any
Person (third party or related party) shall not be considered a
restricted assignment in respect to this Clause 8. The
Parties understand that EFG has the full right to assign this
Agreement to any person with no restriction or prior approvals
from any party whatsoever provided that such assignment takes
place only after release of the Loan Amount to the Ridgewood
Entities according to the terms of the Escrow Agreement.
ARTICLE 9:
GENERAL
| 1- | Amendments |
9.1.1 This Agreement may only be amended or modified in
writing signed by each of the Parties hereto.
6
9.1.2 Notwithstanding Article 9.1.1 above, any
amendment to be made to this Agreement after its signature and
before the Loan Amount is released to the Ridgewood Entities,
requires the prior written approval of the Ridgewood Entities.
| 2- | Non-Waiver |
The failure in any one or more instances of a Party to
insist upon performance of any of the terms, covenants or
conditions of this Agreement, to exercise any right or privilege
in this Agreement conferred, or the waiver by said Party
of any breach of any of the terms, covenants or conditions of
this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but
the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred. No waiver shall
be effective unless it is in writing and signed by an authorized
representative of the waiving party. A breach of any Warranty or
covenant shall not be affected by the fact that a more general
or more specific Warranty or covenant was not also breached.
| 3- | Severability |
The invalidity of any provision of this Agreement or portion of
a provision shall not affect the validity of any other provision
of this Agreement or the remaining portion of the applicable
provision. The parties further agree to replace such invalid
provision with a valid and enforceable provision that will
achieve, to the extent possible, the business, economic and
other purposes of such invalid provision.
ARTICLE 10:
COSTS &
EXPENSES
Each Party shall pay its own costs and expenses in relation to
the negotiation, preparation, execution and carrying into effect
of this Agreement.
ARTICLE 11:
GOVERNING
LAW & DISPUTE RESOLUTION
11.1 This Agreement is to be governed by and construed in
accordance with the laws of the Arab Republic of Egypt.
11.2 All disputes arising out of or in connection with this
Agreement or the breach, termination or validity thereof, shall
be finally settled by arbitration conducted in English by three
arbitrators in Cairo, Egypt, before the Cairo Regional Center
for International Commercial Arbitration, under the Rules of
Arbitration of the International Chamber of Commerce
(“ICC”) then in effect (the
“Rules”) except as modified herein. There shall
be three arbitrators, one nominated by the Lender and one
nominated by Guarantor and the Company in accordance with the
Rules, and the third arbitrator, who shall chair the arbitral
tribunal shall be nominated by the two party-appointed
arbitrators within twenty (20) days of the confirmation by
the Cairo Regional Center for International Commercial
Arbitration of the appointment of the second arbitrator, and if
the two appointed arbitrators fail to nominate the third
arbitrator in the above mentioned twenty (20) day period,
the third arbitrator shall be appointed in accordance with the
Rules. The arbitral tribunal shall be instructed to resolve any
such dispute within 180 days of the appointment of the
third arbitrator with respect to such dispute. In order to
facilitate the comprehensive resolution of related disputes, all
claims between any of the Parties to this Agreement that arise
under or in connection
7
with this Agreement
and/or any
related agreement may be brought in a single arbitration. Upon
the request of any Party, the arbitral tribunal for such
proceeding shall consolidate any arbitration proceeding
constituted under this Agreement with any other arbitration
proceeding constituted under this Agreement, if the arbitral
tribunal determines that (i) there are issues of fact or
law common to the proceedings so that a consolidated proceeding
would be more efficient than separate proceedings, and
(ii) no Party would be unduly prejudiced as a result of
such consolidation through undue delay or otherwise. In the
event of different rulings on this question by the arbitral
tribunal constituted hereunder and another arbitral tribunal
constituted under this Agreement
and/or any
related agreement, the ruling of the arbitral tribunal
constituted first in time shall control, and such arbitral
tribunal shall serve as the tribunal for any consolidated
arbitration. The Parties shall be entitled to reasonable
documentary discovery consistent the expedited nature of
arbitration. By agreeing to arbitration, the Parties do not
intend to deprive any court of its jurisdiction to issue a
pre-arbitral injunction, pre-arbitral attachment or other order
in aid of arbitration, for provisional relief to maintain the
status quo and prevent irreparable harm prior to the appointment
of the arbitral tribunal, or for the enforcement of any award.
Without prejudice to such provisional remedies that may be
granted by a national court, the arbitral tribunal shall have
full authority to grant provisional remedies, to order a Party
to seek modification or vacation of an injunction issued by a
national court, and to award damages for the failure of any
Party to respect the arbitral tribunal’s orders to that
effect.
ARTICLE 12:
TIME OF
ESSENCE
Each of the Parties hereto hereby agrees that, with regard to
all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
ARTICLE 13:
COUNTERPARTS
This Agreement may be executed in three or more counterparts,
all of which shall be considered one and the same agreement and
shall become effective when three or more counterparts have been
signed by each of the Parties and delivered to the other Parties.
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SIGNATURES
WATER DESAL
|
Name:
|
Xxxxx Xxxxx | |
|
Capacity:
|
Director | |
|
Date:
|
||
|
Signature:
|
/s/ Xxxxx
Xxxxx
|
|
|
Name:
|
Xxxxx X. Xxxxx | |
|
Capacity:
|
Director | |
|
Date:
|
||
|
Signature:
|
/s/ Xxxxx
X. Xxxxx
|
|
RIDGEWOOD EGYPT FOR INFRASTRUCTURE PROJECTS LLC
|
Name:
|
Xxxx Xxxxxx | |
|
Capacity:
|
General Manager | |
|
Date:
|
||
|
Signature:
|
/s/ Xxxx
Xxxxxx
|
|
XXXX XXXXXX
|
Name:
|
Xxxx Xxxxxx | |
|
Signature:
|
/s/ Xxxx
Xxxxxx
|
|
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