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 1st day of January, 1997 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 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
X.X.X. and represented in the signature of this Agreement by Xxxxx X. Xxxxxxxxx,
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 Xxxxx Xxxxx Avenue, El Abour Building, Xx.
00, Xxxx 00, Xxxxxxxxxx, Xxxxx, Xxxxx and represented in the signature of this
Agreement by XXXXXXX XXXXXX XXXXX XXX, CHAIRMAN (hereinafter referred to as the
"Borrower")
WHEREAS Sonesta has advanced three loans to Masters of Tourism regarding
Sonesta Beach Resort, Sharm El Sheikh (the "Hotel"), which loans are
specifically described as follows:
-- "Loan 1": U.S. $800,000.00, pursuant to Loan Agreement dated as of
March 1, 1993; the outstanding balance of Loan 1 as of December 31,
1996 was U.S. $241,109.00 consisting of U.S $10,000.00 of principal
and U.S. $231,109.00 of accrued interest;
-- "Loan 2": U.S. $125,000.00, pursuant to Loan Agreement dated as of
August 28, 1995; the outstanding balance of Loan 2 as of December 31,
1996 was U.S. $36,826.00 consisting of U.S. $26,000.00 of principal
and U.S. $10,826.00 of accrued interest;
-- "Loan 3": U.S. $1,000,000.00, pursuant to Loan Agreement dated as of
December 18, 1996; U.S. $500,000.00 of Loan 3 has been advanced to
date and that amount, together with accrued interest, was outstanding
as of December 31, 1996; and
WHEREAS, the parties have agreed to consolidate the December 31, 1996
balances of Loan 1 and Loan 2 in a new loan ("New Loan"), which is further
described in this Loan Agreement;
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NOW THEREFORE, for consideration the receipt and sufficiency is
acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS
The following terms shall have the meanings set forth below.
1.01 Intentionally Omitted.
1.02 "Banking day" shall mean a day on which banks are open for business in
New York and London for interbank Dollar deposits in London.
1.03 "Commitment" shall mean the New Loan.
1.04 "Dollars" and the sign "$" shall mean the lawful money of the United
States of America.
1.05 Intentionally Omitted.
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 Intentionally Omitted.
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 "Interest Rate" shall mean the interest rate agreed to by both parties
which is Ten Percent (10%) per annum. Interest shall compound monthly.
1.11 Intentionally Omitted.
1.12 "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.
1.13 "Maturity Date" shall mean December 31, 1999, which is the date any
and all then outstanding amounts owed hereunder are due from Borrower
to Lender.
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1.14 "New Loan" shall mean the principal amount of Two Hundred Seventy
Seven Thousand Nine Hundred and Thirty Five Dollars (U.S. $277,935.00)
loaned by the Lender to the Borrower hereunder or, where the context
may requre, the amount thereof then outstanding.
SECTION 2. THE NEW LOAN
2.01 Agreement to Lend. The parties agree and acknowledge that the Commitment
represents the outstanding balances as of December 31, 1996 of two (2) loans
that have previously been made by Lender to Borrower.
2.02 Intentionally Omitted.
2.03 Intentionally Omitted.
2.04 Interest. The Borrower agrees to pay to the Lender interest on the New Loan
at the Interest Rate.
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 New Loan
outstanding at the rate that is three percentage (3%) points per annum
above the Interest Rate.
(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 New Loan. The New Loan shall be repaid to Lender in monthly
payments of principal and interest totalling $9,000.00. Each payment shall be
made on or before the thirtieth (30th) day of the month for which it is due. (A
repayment schedule is attached hereto as "Exhibit A".) The first payment is due
on or before January 30, 1997, and, the final payment of principal and interest
is due on the Maturity Date. Lender, as Operator under the Management Agreement,
is hereby authorized and instructed to make the monthly payments of principal
and interest described in this Loan Agreement to itself from Hotel funds which
would otherwise be available to pay Owner's Return under the Management
Agreement.
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2.07 Payment and Advances.
(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, in U.S.
Dollars in same day funds (immediately available funds), on the day in
question to the Lender (account number):
Mohandes Bank
Ramses Street
Cairo, Egypt
Account No. 15370/7
(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 New Loan; and thereafter against the principal of the
New Loan due and payable.
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
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.
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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 at any time elect to prepay the whole or any
part of the New Loan.
SECTION 4. FEES AND CHARGES
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 New Loan or takes other action(s) to
enforce the provisions of this Agreement.
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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.
5.04 Registration and Approvals. All registration with and approvals of any
governmental authority necessary for the due execution and delivery of this
Agreement 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.
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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.
SECTION 7. INTENTIONALLY OMITTED
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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 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 New Loan, together with accrued interest and any other sum payable
hereunder, to be immediately due and payable and the New 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.
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SECTION 9. GUARANTEE
9.01 Personal Guaranty. Xxxxxxx Xxxxxx Xxxxx Xxx 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 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 New 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).
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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
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
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(such as Federal Express or DHL), to the parties as follows, as elected by the
party giving such notice:
To the Borrower: Xxxxxxx Xxxxxx Xxxxx Xxx
Xxxxx Xxxxx Avenue
El Abour Building
Xx. 00, Xxxx 00
Xxxxxxxxxx, Xxxxx
Xxxxx
To the Lender: Sonesta International Hotels Limited
c/o Sonesta International Hotels Corporation
000 Xxxxxxxxx Xxxxxx, X-00
Xxxxxx, Xxxxxxxxxxxxx, XXX 00000
Attention: Office of the Treasurer
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.
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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: Xxxxx X. Xxxxxxxxx
Title: Vice President
Witness: MASTERS OF TOURISM
By: /s/
----------------------------- ---------------------------------
Name: Xxxxxxx Xxxxxx Xxxxx Xxx
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 New 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 Xx. Xxxxxxx Xxxxxx Xxxxx Aly to sign on behalf
of the company the Loan Agreement and any documents relating to the said New
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
XXXXXXX XXXXXX XXXXX XXX, 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 ______________, 1997.
______________________________
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
XXXXX X. 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 __________, 1997.
______________________________
Notary Public
My Commission Expires:________
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