ITEM 1.01: ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

In April 2005, Sonesta Beach Resort Limited Partnership ("SBRLP"), a wholly owned subsidiary of Sonesta International Hotels Corporation, entered into a partnership ("SBR-Fortune") with affiliates of Fortune International ("Fortune"), a Miami-based development and brokerage firm, to redevelop the site of Sonesta Beach Resort, in Key Biscayne, Florida, and transferred the land and improvements to SBR-Fortune. Pursuant to the partnership agreement between SBRLP and Fortune ("Partnership Agreement"), SBRLP is a 50% limited partner in SBR-Fortune, and affiliates of Fortune are the general partner and a limited partner, together owning a 50% interest in SBR-Fortune. SBR-Fortune has approvals to develop 165 luxury residences on the site. Due to the adverse economic conditions affecting the real estate market in South Florida, the lack of available credit for a development of this scale, and other factors, the development has been delayed. (For further information regarding this investment, please refer to Note 3 of the 2008 Annual Report, filed as Exhibit 13 with our 2008 report on Form 10-K, on March 27, 2009.)

On June 18, 2009, the Company and Fortune finalized an amendment to the Partnership Agreement, which included a number of changes, including the following:

1) The amount of financing SBR-Fortune is permitted to borrow has been increased from $61 million to $68 million.

2) Retroactive to January 20, 2009, Sonesta will fund up to $3 million for project-related costs pari passu with Fortune. Fortune remains responsible for funding additional costs. All funding will be treated as debt. To date, the Company has advanced $1,834,000 pursuant to this commitment. Prior to entering into this amendment, the Company was not obligated to fund any project-related expenses.

3) Subject to certain circumstances, including a minimum price, Sonesta and Fortune agreed to sell the property. Should such a sale materialize, the partners agreed to a distribution of proceeds which is different from the distribution of profits under the Partnership Agreement. Under the Partnership Agreement, the Company is entitled to a priority return of approximately $58 million, after the payment of partnership debt. Under the amendment, on a sale Fortune will receive an incentive payment and up to approximately 20% of net sale proceeds (after payment of all partnership debt and liabilities).

4) Under certain circumstances, including a sale of the property, Sonesta will release the personal guaranty of Edgardo Defortuna.

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