Annual Report of a Foreign Private Issuer — Form 20-F
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 20-F Annual Report of a Foreign Private Issuer 287 1.54M
2: EX-4.15 Ex-4.15: Framework Transaction Agreement 182 740K
3: EX-4.16 Ex-4.16: Share Sale and Purchase Agreement 20 58K
4: EX-4.17 Ex-4.17: Unofficial Translation of Deed of Trust 47 178K
5: EX-4.18 Ex-4.18: Unofficial Translation of Deed of Trust 47 177K
6: EX-4.20 Ex-4.20: Amended and Restated Loan Agreement 76 248K
7: EX-4.21 Ex-4.21: Lease Agreement 59 146K
8: EX-4.22 Ex-4.22: Hotel Management Agreement 64 136K
9: EX-4.23 Ex-4.23: Amended and Restated Loan Agreement 72 223K
10: EX-4.24 Ex-4.24: Amended and Restated Loan Agreement 71 212K
11: EX-10.1 Ex-10.1: Consent of Brightman Almagor & Co. 1 9K
12: EX-10.2 Ex-10.2: Consent of Plaza Centers (Europe) B.V. 1 9K
13: EX-10.3 Ex-10.3: Consent of Bea Hotels N.V. 1 9K
14: EX-10.4 Ex-10.4: Consent of Gamida Cell Ltd. 1 8K
15: EX-11.1 Ex-11.1: Code of Ethics and Business Conduct 8 38K
16: EX-12.1 Ex-12.1: Certification 2± 11K
17: EX-13.1 Ex-13.1: Certification 1 9K
Exhibit 4.22
HOTEL MANAGEMENT AGREEMENT
This HOTEL MANAGEMENT AGREEMENT ("AGREEMENT") is made and entered into as of the
date specified in EXHIBIT A attached hereto, by and between the parties
identified in EXHIBIT A as "OPERATOR", "LEASEE" and "OWNER" respectively.
RECITALS OF FACT
(A) Golden Wall Investment Ltd. has the exclusive rights and license
to use and exercise all rights vested in and derived from the
trade name and trade mark known as Park Plaza (the "MARK"), all
as specified in and pursuant to a certain Territory License
Agreement dated 30 September 2002 by and among Park Global
Holding, Inc., on the first part, and Golden Wall Investment
Ltd., on the second part (the "2002 TLA"); and
(B) As of January 2003, Golden Wall Investment Ltd. granted Operator
an exclusive sub-license to use the Mark in the Territory, which
includes inter alia England, pursuant to which Operator has full
right to manage and market hotels under the Park Plaza Worldwide
Hotel Management and Franchise System (the "System"), which
System includes the right to use the name "Park Plaza" and the
trademarks associated with such name, to use the System's
international marketing and reservation facilities, and to draw
upon the technical assistance, training, and management resources
of Park Plaza Worldwide Hotel Group; and
(C) Owner is the owner of the real property located at and described
in EXHIBIT B attached hereto (the "PROPERTY") upon which there is
constructed an hotel described in EXHIBIT B (the "HOTEL"); and
(D) Owner has leased the Property and Hotel to the Leasee; and
(E) Operator's has extensive know-how, experience and expertise in
the management and operation of 4 & 5 stars class hotels, and has
available to it qualified personnel to render hotel management
and operation services.
(F) Leasee wishes to engage the services of Operator for the
management, operation and marketing of the Hotel ("SERVICES").
NOW, THEREFORE, incorporating the above recitals as though fully set forth,
and in consideration of the mutual covenants, promises, and obligations set
forth below, the parties hereto agree as follows:
ARTICLE I : THE HOTEL
1. THE HOTEL
1.1. The word "HOTEL" will be used in this Agreement to refer collectively
to the following :
1.1.1. the Property comprising the site of the Hotel, as more
particularly described in EXHIBIT B;
1.1.2. all of the Hotel buildings and all related installations and
building systems and facilities as more particularly described in
Exhibit B;
1.1.3. the "OPERATING EQUIPMENT" of the hotel, consisting of all
tools, uniforms, china, glassware, linen, silverware, and other
similar items used in connection with the operation of the Hotel,
dining room accessories, kitchen utensils, engineering tools and
equipment, housekeeping utensils and miscellaneous equipment and
accessories;
1.1.4. the "Operating Supplies" of the Hotel, consisting of all
immediately consumable items used in connection with the
operation of the Hotel such as food and beverages, cleaning
materials, matches, stationery, and other similar items;
1.1.5. the "FF&E" of the Hotel, consisting of all furniture and
furnishings, fixtures, and equipment used in connection with the
operation of the Hotel (but excluding the Operating Equipment and
the Operating Supplies), including : (a) any items contained
within the walls and ceilings of the structure (which are deemed
to be part of the Hotel building); (b) all furniture and
furnishings, which shall include guest room, office, public area,
and other furniture, carpeting, draperies, lamps and other items;
(c) kitchen and valet shop equipment; (d) all equipment required
for the operation of guest rooms (including television, mini-bars
and safes), banquet rooms, employee locker rooms, and a health
club (where relevant); (e) office equipment, including computer
hardware and software as selected by Operator;
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(f) dining room wagons; (g) material handling equipment; (h)
cleaning and engineering equipment;
2. TITLE TO HOTEL:
2.1. Owner agrees that, subject to the provisions of Paragraph 2.3 below,
it now has and will hold for the Term of this Agreement, full title to
the Hotel.
2.2. Leasee will, at its expense, make all reasonable efforts, including
litigation if necessary, to enable Operator to peaceably perform its
management, consulting and marketing services consistent with the
terms of this Agreement.
2.3. Nothing in this Paragraph 2 contained shall be deemed to derogate from
or restrict the free and unfettered rights of Owner :
2.3.1. to sell, transfer or otherwise dispose of its rights and
interests in and to the Property and/or the Hotel, subject to
Operator's rights as specified in Paragraph 50.3 below; and
2.3.2. To charge, mortgage or otherwise encumber its rights and
interests in and to the Property and/or the Hotel (in addition to
those which are recorded and registered in favor of any party as
at the date hereof and of which Operator has been made aware),
provided that any such liens, encumbrances, exceptions,
covenants, and charges do not materially or adversely affect the
operation of the Hotel and/or Operator's rights and/or the
ability of Operator to reasonably fulfill its obligations under
this Agreement.
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ARTICLE II
TERM OF THE AGREEMENT
3. TERM OF THE AGREEMENT
Initial Term
3.1. The "INITIAL TERM" of this Agreement will commence on October 1st,
2004 (hereinafter referred to as the "COMMENCEMENT DATE") and will
continue uninterrupted until midnight on December 31st, 2019.
3.2. Each contract year in terms of this Agreement shall be a calendar year
commencing on January 1st and expiring on December 31st of that year.
The first contract year in terms of this Agreement commenced on
October 1st 2004 and expire on December 31st 2004.
Extended Term
3.3. The Term of this Agreement shall be automatically extended for a
further period of 10 (ten) years commencing on January 1st 2020 and
terminating on December 31st 2030 (hereinafter "THE EXTENDED TERM"),
unless either party shall serve notice on the other party that it does
not intend to renew the term of this Agreement for the Extended Term.
Such notice shall be furnished in writing by not later then January
1st 2019.
Usage of "Term"
3.4. Subject to the provisions of Paragraph 3.3 above, the expression "the
Term" wheresoever used in this Agreement shall be deemed to apply to
both the Initial Term and the Extended Term, mutatis mutandis.
Reservation of Rights
3.5. Nothing in this Paragraph 3 contained shall be deemed to derogate from
the rights of either party to terminate this
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Agreement in accordance with the provisions of Article XIII below.
ARTICLE III
USE AND OPERATION OF THE HOTEL
4. APPOINTMENT OF OPERATOR:
4.1. Leasee hereby engages Operator for the Initial Term as its exclusive
agent for purposes of the management and operation of the Hotel, and
for purposes of directing and managing all advertising, promotion,
marketing, sales, and reservations for the Hotel, all in accordance
with the System.
4.2. In the event that the Term of this Agreement is extended to include
the Extended Term in accordance with the provisions of Paragraph 3.3
above, then and in such event the appointment of the Operator in terms
of Paragraph 4.1 above shall apply equally to the Extended Term.
4.3. Operator will have for the purpose of performing its duties under this
Agreement and within the limits of this Agreement the right and the
duty to manage, supervise, direct, and control Leasee's employees,
agents, suppliers, contractors and all operations of and relating to
the Hotel, the management thereof and its promotion, marketing, and
reservations, and will have full control and discretion with respect
to all the aforesaid, all within the scope of this agreement.
4.4. For the avoidance of doubt, it is hereby clarified that,
notwithstanding anything to the contrary stipulated in this agreement,
the carrying of the business of the Hotel and the Hotel's operations,
including the advertising, promotion, marketing, sales and
reservations, shall be performed by Operator by directing, supervising
and inspecting the business and operations of the Hotel doing so as
agent of Leasee, at Leasees cost and expense, through the Leasee's
employees and with Leasees resources under the management,
supervision, direction and control of the Operator. Whenever using in
this agreement the expression "Operator shall operate" or Operator
shall
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manage" it shall mean doing so in the manner stipulated in this
section.
5. OPERATOR'S SERVICES AND AUTHORITY:
Operator will provide its Services to the best of its ability and act as
necessary to ensure that the Hotel staff uses and operates the Hotel within the
System and in conformity with its standards, and in the provision of such
services will have, inter alia, the following duties and authorities:
A. to use all reasonable efforts to maximize patronage of the Hotel's
facilities;
B. to provide corporate marketing, sales, advertising, and if
appropriate, group and convention sales, marketing, and reservation
services, publicity and public relations, departmental supervision,
and other services and facilities customarily offered by Hotels chain
operators;
C. to cause the Hotel staff to use all reasonable efforts to collect all
charges, rents, and other amounts due from Hotel guests, patrons,
tenants, subtenants, concessionaires, and all others, which efforts
shall include, where necessary or desirable, the following -
(I) demanding and giving receipts for charges, rents, and other
amounts due;
(II) giving notice to quit or surrender space occupied or used by the
party in question;
(III) suing for and instituting summary proceedings in the name of
Leasee and Owner in connection with any amounts due;
D. to direct the establishment of a policy regarding association with any
credit card system in conformity with Operator's general policy on
that subject and to arrange for association with all major credit card
systems;
E. to establish and maintain bank accounts, accounting records, and books
as set forth in Article V below;
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F. to supervise and direct the recruiting, employment, compensation,
promotion, supervision, and discharge on Leasee's behalf, of all Hotel
employees;
G. to cause the appropriate Hotel employees:
(I) to negotiate, on Leasee's behalf and with Leasee's consultation,
with any labor union lawfully entitled to represent any Hotel
employees;
(II) to arrange in Leasee's name for utility, telephone, vermin
extermination, detective agency protection, trash removal, and
other services necessary for the operation of the Hotel;
(III) to purchase on the credit of Leasee and pay for out of the
Hotel's accounts all equipment, all food, beverages, Operating
Supplies and expendables, and such other services and merchandise
as are necessary or proper for operation of the Hotel and to
enter into contracts in the name of Leasee with respect to all
goods and services for Hotel;
(IV) to make all purchases and provide for all services, materials,
Operating Equipment, FF&E, and provisions all for Leasee's
account;
(V) to maintain and repair or provide for the maintenance and repair
of the Hotel;
(VI) to grant concessions for services customarily subject to
concession in hotels, if desirable in Operator's opinion;
(VII) to determine and set all rates and charges for rooms, food and
beverage service, and other facilities at the Hotel;
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(VIII) to commence such legal actions or proceedings concerning the
Hotel as are necessary or required in the opinion of Operator to
advise Leasee of the commencement of any legal action or
proceeding concerning the Hotel, and in connection therewith, to
retain counsel satisfactory to Leasee;
(IX) to settle and compromise claims where appropriate in Operator's
opinion, provided that settlement of any claim in excess of
US$50,000 shall be with Leasee's consent.
H. to periodically make available its personnel for the purpose of--
(I) reviewing plans and specifications for any alteration of the
Hotel premises,
(II) assisting in the replacement of FF&E, including the design and
quantities required,
(III) eliminating in general, operating problems, and
(IV) improving operations;
I. in cooperation with Leasee, to cause all such other things to be done
within its reasonable control in and about the Hotel as are necessary
to ensure compliance with -
(I) all statutes, ordinances, laws, rules, regulations, orders, and
requirements of any federal, state, or local government and
appropriate departments, and
(II) the orders and requirements of any local board of fire
underwriters or any other body which may exercise similar
functions; provided that either Operator or Leasee shall have the
right to contest by legal proceedings,
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until final determination, the validity or application of any
such statute, ordinance, law, rule, regulation, order, or
requirement to the extent and in the manner provided or permitted
by law.
J arrange the insurance policies to be maintained by Leasee pursuant to
section 35 below and maintain itself insurance policies to be
maintained by Operator pursuant to section 36 below and to comply with
the terms of all applicable insurance policies.
K generally, to render any such services as are reasonably to be implied
from the scope and nature of the management and operation services to
be provided in terms of this Agreement in respect of the Hotel,
notwithstanding that same are not specifically mentioned hereinabove.
6. CENTRAL AND REGIONAL OFFICE SERVICES.
Operator shall provide administrative services in support of the Hotel,
including general supervision, consultation, planning, monitoring
compliance with the sub license agreement, corporate finance, personnel and
employee relations, research and development, and the services of
Operator's technical, operational and marketing experts making periodic
inspections and consultation visits to the Hotel.
Operator shall also provide various marketing services and advertising.
(All the said services shall herein be called "CENTRAL OFFICE SERVICES").
The Central Office Services shall be rendered to the Hotel together with
the other hotels operated by Operator in any respective year by Operators
regional and central offices.
All the cost of the performance of the Central Office Services, including
all the employment costs of the personnel employed in the performance of
the Central Services and all the general and administrative costs to be
incurred in connection to the performance
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of the Central Services shall, weather incurred by any of the hotels
operated by Operator or by Operator, shall be born and defrayed by the
hotels operated by Operator so that Operator shall be fully reimbursed for
all these costs. Leasee shall bear its pro rata share of such cost as shall
be budgeted in the Annual Budget.
Notwithstanding the aforesaid, the cost of employment of the CEO of
Operator and maintaining his office shall be born by Operator without
reimbursement from the Hotel or the other hotels operated by Operator.
7. LEASEE'S OBLIGATIONS
7.1. Leasee will appoint from time to time an individual to act as Leasee's
representative, to whom Operator will direct all communications,
information, and reports.
7.2. Throughout the Term of this Agreement, Leasee -
7.2.1. will where necessary provide funds in excess of those generated
from operations to pay for all items necessary to fully operate
and maintain the Hotel and to comply with the terms of this
Agreement, including the payment of all mortgage or other
indebtedness, taxes, and insurance; and
7.2.2. will provide at all times working capital sufficient to assure
the uninterrupted and efficient operation of the Hotel, the
amount of which shall not exceed in any event a sum equal to the
average expenses to be incurred over the next 3 (three) months,
in accordance with the then in effect Approved Budget, as
provided in Paragraph 19 below.
8. STANDARDS AND CONTROL OF OPERATION.
Standards of Operation.
8.1. Operator shall operate the Hotel under standards required in terms of
the System and those comparable to standards prevailing in hotels of
the same grading as the Hotel which are operated in accordance with
the System and under the Trade Name and for all activities in
connection therewith which are customary and usual to such an
operation. Operator shall conduct such operations in accordance with
the laws of the Territory in which the Hotel is
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located and, insofar as feasible and in its opinion advisable, local
character and traditions.
Control of Operation.
8.2. Subject to the terms and conditions of this Agreement, Leasee hereby
grants to Operator: (a) the exclusive and irrevocable right to manage
and operate the Hotel for and on behalf of Leasee; and (b) complete
control and discretion in the operation and management of the Hotel.
9. LEASES AND CONCESSIONS
9.1. Operator shall operate in the Hotel all facilities and provide all
services and shall not lease or grant concessions in respect of such
services or facilities, except that Operator shall have the right in
its own name as agent for and on behalf of Leasee or, if appropriate,
in the name of Leasee (who shall execute the necessary documents upon
request of Operator), to lease or grant concessions in respect of
specified commercial spaces or services within the Hotel that are
customarily subject to lease or concession in comparable hotels. The
rentals or other payments received by Operator and on behalf of Leasee
or by Leasee under each such lease or concession shall be included in
the Operating Revenues.
10. CONSULTATIONS WITH LEASEE.
10.1. Within thirty (30) days following :
10.1.1. delivery of the Annual Budget by Operator to Leasee in terms
of Paragraph 19 below; and/or
10.1.2. Leasee's receipt of the profit and loss and quarterly
financial statements for the periods ending March 31, June 30,
September 30 and December 31 of each contract year during the
Term in accordance with the provisions of Paragraph 20.4.1 below;
10.2. Operator shall, at Leasee's request, make available one of its
executives to explain and discuss with Leasee the contents of such
Annual Plan and/or the said profit and loss statements. Operator
undertakes to implement Leasee's opinions and recommendations in that
regard.
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11. OPERATOR'S RIGHT TO CONTRACT
11.1. In order to carry out its duties under this Agreement, Operator shall
have the right, in the name of Leasee or in its own name as agent for
and on behalf of Leasee to incur expenses and to enter into contracts
with third parties in the ordinary course of business of the Hotel,
which contracts shall include, without limitation, contracts for sales
of rooms, food and beverages and other facilities of the Hotel; the
purchase of food and beverages and Operating Supplies; employment of
personnel, advertising and business promotion; repairs and
maintenance; administration, heat, light and power; insurance, legal
and accounting services; and other goods and services. Pursuant to
Paragraph 25 below, all amounts due and payable to the suppliers of
goods and services in accordance with the terms of such contracts
shall be paid from the Operating Account.
11.2. Notwithstanding the foregoing, Operator shall not enter into any
contract on behalf of Leasee that does not, by its terms, terminate
simultaneously with or prior to the expiration or earlier termination
of this Agreement.
11.3. Operator shall consult with Leasee with respect to suppliers for
goods and services required in the ordinary course of business of the
Hotel and shall consider in good faith Leasee's recommendations.
12. AGENCY RELATIONSHIP.
12.1. In the performance of its duties as manager and operator of the
Hotel, Operator shall act solely as agent for and on behalf of Leasee.
Operator and Leasee are not to be regarded as joint venture partners.
During the Term and the Extended Term, if applicable, the Operator
shall be deemed to have granted the Leasee a sub-license for the right
to use the Trade Name, designations and other distinctive trademarks
of the System as detailed below in Article XII below.
13. EMPLOYEES OF THE HOTEL.
13.1. Each employee of the Hotel, including the General Manager, shall be
the employee of Leasee and/or of Leasee's personnel management
company, but not of Operator. Operator shall not be liable to such
employees for their wages or compensation, and
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every person performing services on behalf of the Hotel in connection
with this Agreement shall be acting on behalf of Leasee. On Leasee's
behalf, Operator will recruit, hire, train, reassign, and discharge
the Hotel staff. Leasee, with Operator's assistance, will comply with
all applicable laws and regulations concerning employment of the Hotel
employees.
14. THE GENERAL MANAGER.
14.1. The parties understand that Operator shall have the right to nominate
the General Manager of the Hotel, subject to Leasee's rights of
approval in terms of Paragraph 14.3 below. The General Manager to be
employed by Leasee and/or by Leasee's personnel company, and shall :
14.1.1. be familiar with Operator's method of hotel operation;
14.1.2. be furnished with Operator's policies and systems and
procedures manuals from time to time in effect; and
14.1.3. have his major activities reviewed and supervised by Operator
while he shall retain full autonomy to make day-to-day decisions
with respect to such operations.
14.2. To such purpose, Leasee shall grant such power of attorney to said
General Manager as shall be required. Any employment contract entered
into between Operator, as agent of Leasee and said General Manager
shall, by its terms, terminate upon the expiration or earlier
termination of this Agreement.
14.3. Leasee shall have the right to approve the appointment of the General
Manager, which approval shall not be unreasonably withheld or delayed.
Subject to the Operator's approval, which approval shall not be
unreasonably withheld or delayed, the Leasee shall also have the right
to request that the General Manager be replaced.
15. OPERATOR'S MANAGEMENT MANUALS.
15.1. The parties understand further that all of Operator's management
manuals including, but not limited to, policies and procedures,
operations, accounting and training, which are furnished by Operator
in connection with its management of the Hotel are and shall be at all
times, without further act or action, the exclusive property of Park
Global Holdings, Inc., Golden Wall Investments Ltd. and/or Operator,
who shall have the right to remove such
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management manuals from the Hotel upon the expiration or earlier
termination of this Agreement.
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16. INFORMATION:
16.1. The Leasee shall be entitled to receive information, clarifications
and any pertinent detail at any reasonable time concerning any matter
related to this Agreement and/or to the operation and management of
the Hotel from the Operator's senior officers. Requests for
clarifications shall be transferred to the Operator with a copy to the
Hotel Manager, and shall be promptly addressed.
17. RIGHT OF INSPECTION AND REVIEW
17.1. The duly authorized officers, accountants, employees, agents, and
attorneys of Leasee shall have the right, upon reasonable notice to
the General Manager, to enter upon any part of the Hotel at all
reasonable times during the Term for the purpose of examining or
inspecting the Hotel or examining or making extracts from the
operational books and records, or for any other purpose which Leasee,
in its sole discretion, shall deem necessary or advisable.
18. FINANCIAL RESPONSIBILITY
18.1. All debts, liabilities, obligations, and expenses arising from the
business and operation of the Hotel are those of the Leasee and are to
be paid by the Leasee. In no event will Operator be required to bear
any loss, cost, or expense, or advance any of its funds for the
operation or maintenance of the Hotel, save where it has: (a)
negligently exceeded the Approved Budget or (b) exceeded the powers
and authorities awarded to it in terms hereof. Subject to the
preceding provisos, Operator will be entitled to prompt reimbursement
of any sums actually advanced by it, together with interest as
provided for in Article X below.
19. ANNUAL BUDGET
19.1. Thirty (30) days prior to the commencement of each contract year,
Operator will submit to Leasee for its approval an annual budget in a
form reasonably acceptable to Leasee (the "ANNUAL BUDGET"). The Annual
Budget will be in the form attached as EXHIBIT F.
19.2. If Leasee shall disapprove of the proposed Annual Budget presented by
Operator or any part of it, then Leasee shall specify the reasons for
its disapproval and Operator shall, after consultation with Leasee
submit to Leasee an amended proposed budget or part thereof within 14
(fourteen) days, in form and content which are satisfactory to Leasee.
The foregoing procedure
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shall be followed until the Annual Budget is fully approved by Leasee
or until such time as any of the Parties will chose to refer the
differences with Leasee to an Umpire ("UMPIRE") to be agreed between
the parties. If the parties shall fail to appoint the Umpire within 21
days from notice of either of them requesting the appointment, the
Umpire shall be appointed by whoever at that time shall act as the
chairman of the Carlson Group. Until such time as the new proposed
Annual Budget is approved by the Leasee, the portion approved, if any,
shall become effective and the Annual Budget of the previous contract
year, adjusted to reflect changes, if any, in the room occupancy of
the Hotel compar to the room occupancy in the previous contract year,
shall remain in effect until the approval of the proposed Annual
Budget by the Leasee.
19.3. As to projected revenues and operating expenses, Operator will use
its best efforts to cause the Hotel to perform financially in
accordance with the Annual Budget; however, Leasee acknowledges that
the Annual Budget consists of projections and assumptions which are in
large measure beyond the control of the Hotel employees and Operator.
19.4. Notwithstanding the above, the Parties shall meet periodically at a
time and place designated by the Leasee, for the purpose of reviewing
the Hotel's operation, including profit and loss and quarterly
financial statements, Operator's performance, capital expenditures and
for making any revisions to the approved Annual Budget. In such
meetings or following such meetings Leasee shall have the right to
request that certain actions, which the Leasee will deem necessary in
the circumstances, will be undertaken in connection to the Hotel
operations.
19.5. If at any time during the Initial Term or the Extended Term of this
Agreement circumstances shall arise, that in the opinion of Operator
may cause material negative deviation of the actual results of the
Hotel operations in comparison to the current approved Annual Budget -
Operator shall give notice in writing to Leasee of such circumstances.
With said notice Operator shall produce to Leasee, for Leasee's
approval, action plan which shall contain Operator's recommendations
on the actions that should be undertaken in the Hotel operations to
mitigate the circumstances.
19.6. Leasee and Operator will make all efforts to agree on the actions
requested by Leasee pursuant to Paragraph 19.4 and/or the action plan
proposed by Operator pursuant to Paragraph 19.5 above. If, after
consultation, Operator and Leasee shall fail to agree on any
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action requested by Leasee pursuant to Paragraph 19.4 above or any
action proposed by Operator pursuant to Paragraph 19.5 above, either
Leasee or Operator may chose to refer the matter to the Umpire, as
provided for in Paragraph 19.2 above, and his decision shall be final
and binding.
19.7. Default by Operator to perform material action set out in an agreed
action plan under Paragraph 19.4 or 19.5 above, and/or in action plan
confirmed by the Umpire, which shall not be cured by Operator within
60 days from notice of Leasee requesting such cure shall be deemed a
breach which shall constitute event of default which shall grant
Leasee right of early termination pursuant to Paragraph 45 below.
19.8. Notwithstanding anything to the contrary stipulated in this agreement
Operator's authority to incur expenditures on behalf of Leasee
relating to any given month shall be limited to 115% of the current
approved Annual Budget increased or decreased in the same rate as the
occupancy of rooms in the Hotel increased or decreased in comparison
to the approved Annual Budget for the respective month.
20. FISCAL YEAR, REPORTS AND ACCOUNTS:
Fiscal Year
20.1. The fiscal year of the Hotel shall commence on January 1st and
terminate on December 31st of each calendar year throughout the Term
of the Agreement.
Books of Account
20.2. Operator undertakes to keep and maintain throughout the Term full and
adequate books of account and other records reflecting the results of
the operation of the Hotel. Such books and records shall be kept in
the currency of the Territory on the accrual basis and in all material
respects in accordance with the then latest edition of the "Uniform
System of Accounts for Hotels", as adopted by the American Hotel and
Motel Association, and in accordance with generally accepted
accounting principles applicable in the Territory and in accordance
with the laws of the Territory. All such books of account shall be the
sole property of Leasee.
20.3. Immediately on termination or expiration of this Agreement, all books
and records relating to the operation of the Hotel will be delivered
to Leasee; however, thereafter Operator will have the
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right to inspect or make copies of any of these records for its
own purposes.
Periodic Reportings
20.4. Operator shall deliver to Leasee :
20.4.1. On or prior to the end of each month a profit and loss
statement showing the results of the operation of the Hotel for
the preceding month and the year to date, and containing
computations of the Gross Operating Profit, Operator's Fees and
Leasee's Profit Participation. The figures contained in such
statement shall be taken from the books of account maintained by
Operator. Such statement shall reflect the terms of this
agreement and shall be prepared, insofar as feasible, in all
material respects in accordance with the then latest edition of
the "Uniform System of Accounts for Hotels" referred to
hereinabove and in terms of generally accepted accounting
principles; and
20.4.2. Within: (a) thirty (30) days of each quarter in any contract
year (excluding the last quarter); and (b) sixty (60) days after
the end of each Contract Year, with the exception of the last
Contract Year; Operator shall cause the preparation of a profit
and loss and financial statement in respect of the relevant
period, certified by an independent public accountant selected by
mutual agreement of Operator and Leasee and retained by Operator
for and on behalf of Leasee, taken from the books of account of
the Hotel and showing the results of the operation of the Hotel
during the relevant period, containing a computation of the Gross
Operating Profit, Operator's fees and Leasee's Profit
Distribution for such period, and with a schedule annexed thereto
showing all deposits in and withdrawals from the Replacement Fund
made during such period and the balance thereof. The cost of the
audit shall be charged to Operating Costs.
20.4.3. Within sixty (60) days after the end of the last Contract
Year, Leasee shall deliver to Operator a profit and loss and
financial statement certified by the aforesaid independent public
accountant, showing the results of the operation of the Hotel
during such last Contract Year, containing computations of
Operating Revenue and Gross Operating Profit and the Operator's
Fee payable to Operator for such period.
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20.4.4. The accountant's opinions and certified statements as
aforesaid shall be deemed correct and conclusive for all
purposes.
20.4.5. All profit and loss statements referred to above shall be in
substantially the same form as the illustration attached hereto
and marked as EXHIBIT C.
ARTICLE IV
OPERATOR'S FEES AND LEASEE'S
PROFIT PARTICIPATION
21. OPERATOR'S FEES
Operator's Fees
21.1. In consideration for the fulfillment of the Operator's of its
undertakings and obligations pursuant to the provisions of this
Agreement, Operator shall be entitled to receive:
a. an annual Base Fee (hereinafter, the "BASE FEE") at the fixed
rate of 2% (two per cent) of the Room Revenues (as calculated in
accordance with the provisions of Paragraph 22 (the "ROOM
REVENUES"), and
b. an annual Incentive Fee (hereinafter, the "INCENTIVE FEE") at the
fixed rate of 7% (seven per cent) of the Gross Operating Profit
(as calculated in accordance with the provisions of Paragraph 22
below("THE GROSS OPERATING PROFIT").
The Base Fee and the Incentive Fee shall be referred to
hereinafter as the "OPERATOR'S Fee".
21.2. The Base Fee shall be paid in monthly installments on or before the
20th (twentieth) day of each month for the preceding month. The Base
Fee shall be paid out of the Operating Account, directly into a bank
account designated from time to time by Operator.
21.3. The Incentive Fees for each contract year shall be paid by the Leasee
on an quarterly basis out of the Operating Account, by no later than
the last day of the month following the last month of
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the last preceding quarter, directly into a banking account designated
from time to time by Operator. The calculation of the Incentive Fee in
each quarter shall be made on a "year to-date" basis. Within 30 days
from the signing by the auditors of the annual financial statements
for any Year the final amount of the Incentive Fee for that year will
be calculated. Any deficiency not paid in the quarterly payments
relating to that year (excluding amounts set-off as excess paid in
previous Year) shall be paid out of the Operating Account, by no later
than the 1st day of the subsequent month. Any excess paid in the
quarterly payments relating to that year (excluding amounts set-off as
excess paid in previous Year) shall be set-off from the next quarterly
payment(s) relating to the current year.
Additional Fees
21.4. It is hereby specifically declared and understood that the Operator's
Fees provided for in this Paragraph 21 shall be in addition to, and
shall not derogate from, the franchise fees and expense participations
which Operator is entitled to receive in terms of the provisions of
Article XII below and EXHIBIT D.
Reimbursement of General Costs
21.5. Leasee will reimburse Operator for all reasonable out-of-pocket
expenses incurred by Operator in performing its duties under this
Agreement, including food, lodging, and travel expenses of Operator's
employees. Operator will estimate these costs and include them in the
Annual Budget. In the event that any Operator personnel perform duties
at the Hotel on a temporary basis until a replacement for the Hotel
employee who normally performs those duties can be obtained, then
Leasee will reimburse Operator for the total employment cost of such
personnel.
22. GROSS OPERATING PROFIT AND ROOM REVENUES.
22.1. For the purpose of this Agreement, the term "Room Revenues" shall be
calculated on the accrual method of accounting and in accordance with
the Uniform System of Accounting for Hotels as adopted and modified
from time to time by the American Hotel and Motel Association, but
excluding sales or similar taxes and gratuities
22.2. The term "Gross Operating Profit" as used in this Agreement shall
mean the amount computed as follows:
22.2.1. All Operating Revenues, namely :
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(i) revenues and income of any kind derived directly or
indirectly from the operation of the Hotel including "Room
Revenues", service charges collected from guests and not
distributed to employees and rental or other payments from
lessees or concessionaires (but not the gross receipts of
such lessees or concessionaires); and
(ii) the proceeds (after deducting therefrom necessary expenses
in connection with the adjustment or collection thereof) of
use and occupancy (business interruption) insurance actually
received.
22.2.2. From the Operating Revenue shall be deducted the Operating
Costs, namely the entire cost and expense of maintaining,
conducting and supervising the operation of the Hotel, which
shall include, without limiting the generality of the foregoing,
the following:
(i) The cost of all food and beverages and Operating Supplies
sold or consumed and the total salaries, wages, provisions
for severance payments and other compensation of all
employees of the Hotel, including the General Manager, and
their social benefits, which shall include, inter-alia, the
life, disability and health insurance, for which they may be
qualified;
(ii) The cost of replacements of or additions to Operating
Equipment and other operating equipment but not exceeding 4%
of Gross Revenue of the Hotel per the respective Fiscal
Year;
(iii) All costs and expenses of any advertising and business
promotion for the Hotel specifically provided for in the
Annual Budget;
(iv) The cost of all other goods and services;
(v) Out-of-pocket expenses incurred by Operator and Leasee and
their affiliates for the account of or in connection with
the operation and management of the Hotel, including
reasonable traveling expenses of employees, executives or
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other representatives or consultants of Operator and Leasee
and their affiliates, provided that such persons shall be
afforded reasonable accommodations, food, beverages,
laundry, valet and other such services by and at the Hotel
without charge to such persons, Operator or Leasee;
(vi) All costs and expenses of any personnel training of the
Hotel staff;
(vii) All expenditures made by Operator for maintenance and
repairs to keep the Hotel in good operating condition in
accordance with Paragraph 30 below;
(viii) Payments to the Replacement Fund as provided in accordance
with Paragraph 31 below for replacements of and additions to
the FF&E and the cost in excess of the amount in the
Replacement Fund; or depreciation where applicable;
(ix) The cost of alterations, additions and improvements in
accordance with Paragraph 32 below;
(x) The cost of changes, replacements, additions, or
improvements in accordance with Paragraph 33 below to the
extent that Operator and Leasee have agreed that such cost
will be deducted from Revenue in calculating Gross Operating
Profit;
(xi) Premiums for insurance maintained in accordance with Article
VIII below - other than premiums on property insurance,
immovables and movables, - (premiums on policies for more
than one year to be pro-rated over the period of insurance)
and losses incurred on self-insured or uninsured risks;
(xii) All taxes and public dues, other than income taxes, payable
by or assessed with respect to the operation of the Hotel
including all real property taxes levied or imposed on the
Hotel or its contents, but excluding all other taxes
22
levied or imposed against Leasee, such as personal property
taxes levied or imposed against Leasee, the Hotel or its
contents;
(xiii) Legal, auditing and other professional fees payable with
respect to the operation of the Hotel; and
(xiv) A reasonable provision for uncollectable accounts
receivable.
23. LEASEE'S PROFIT PARTICIPATION
23.1. Subject to the provisions hereinafter set forth, and subject always
to the retention of working capital sufficient, as mutually agreed by
the parties, to assure the uninterrupted and efficient operation of
the Hotel, Operator shall during the Term pay to Leasee out of the
Operating Account the "LEASEE'S PROFIT PARTICIPATION", namely the
Gross Operating Profit after deduction of Operator's Fees provided for
in Paragraph 21 above.
23.2. The Leasee's Profit Participation for each contract year shall be
paid out of the Operating Account on a quarterly basis, no later than
the last day of the following month, directly into a banking account
designated from time to time by Leasee.
24. INTERIM PAYMENTS
24.1. Notwithstanding the provisions of Paragraphs 21.3 and 23.2 above, in
the event that the Parties so agree, payment of the Operator's Fee and
the Leasee's Profit Participation may be effected on a quarterly or
semi-annual basis in accordance with the Gross Operating Profit
calculated in accordance with the relevant interim reports, subject
however to the provisions of Paragraph 24.2 below.
24.2. In the event that interim payments have been effected as provided for
in Paragraph 24.1 above, then and in such event year end adjustments
will be carried out on the basis of the Gross Operating Profit for the
relevant contract year as reflected in the audited annual financial
statements for that year. Such year end adjustments shall be made by
not later than a date 14 days after the publication of the annual
financial statements. Payments of any shortfalls to, or the
reimbursement of any excess payments received by, either party shall
be executed within 21 days of the publication of the audited financial
statements.
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ARTICLE V
ACCOUNTING AND BANK ACCOUNTS
25. OPERATING ACCOUNT
25.1. Operator shall deposit all and any Operating Revenues, payments and
incomes received by it from the operation of the Hotel and/or in
connection therewith into the "OPERATING ACCOUNT" only.
25.2. The Operating Account shall be opened, maintained and conducted
exclusively by Operator in trust for and as agent of Leasee. In the
event that Operator shall in its discretion elect to open more than
one Operating Account, the provisions of this Agreement shall apply
mutatis mutandis thereto in all respects.
25.3. Operator shall designate the persons who are authorized signatories
for the making of withdrawals from the Operating Account and all other
Hotel bank accounts. The Operator's funds shall not be commingled in
such accounts and all funds which are deemed by Operator to be in
excess of the financial needs of the Hotel, including reasonable
reserves, will be transferred to Leasee. Notwithstanding the above,
the Leasee shall be entitled, at all times, to designate persons as
authorized signatories for the making of withdrawals from the
Operating Account and all other Hotel bank accounts, for any purposes
other than withdrawals for the purpose of distribution of the
Operating Costs of the Hotel or payment of the Operator's Fees.
25.4. All Operating Costs without exception shall be disbursed by Operator
from the Operating Account which shall include without limitation :
25.4.1. disbursements of the entire cost and expense of maintaining,
conducting and supervising the operation of the Hotel;
25.4.2. capitalized alterations, additions and improvements pursuant
to Article VII below; and
25.4.3. any other expenditures in accordance with the terms of this
agreement shall be made by such employees of the
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Hotel whose signatures shall be authorized by resolution of the
Board of Directors of Operator and approved by Leasee.
25.5. Operator shall be entitled to withdraw from the Operating Account its
Operator's Fees in respect of that Contract Year in accordance with
the provisions of Paragraph 20 above.
25.6. The amount remaining out of the Operating Revenues for any one
Contract Year, after the disbursement of all Operating Costs and the
payment of all Operator's Fees, shall constitute the Leasee's Profit
Participation in respect of that Contract Year.
26. PROVISION FOR REPLACEMENT OF OPERATING EQUIPMENT:
Operator and Leasee agree that it is desirable to make provision for
replacements of Operating Equipment in each Year. Operator will include in
the Annual Budget the estimated total cost of replacing and restocking the
Operating Equipment as required during the applicable contract year. During
that contract year Operator will cause the Hotel employees to make all
replacements of Operating Equipment reasonably deemed by it to be necessary
or desirable and all such expenditures will be charged against this
account. At the end of each contract year, the account will be increased or
reduced to reflect the actual expenditures made for replacement of
Operating Equipment.
27. RESERVE FOR REPLACEMENT OF AND ADDITIONS TO FF&E AND CAPITAL EXPENDITURES
27.1. As a component of the Annual Budget, Operator and Leasee will agree
upon an amount to be charged in the following contract year for the
creation of a reserve for the replacement of and additions to FF&E and
capital expenditures.
27.2. Leasee will establish an interest-bearing account in a bank approved
by Leasee (the "RESERVE ACCOUNT") in the name of the Leasee into which
there will be deposited each month the amount established in the
Annual Budget for monthly additions to the account, and Operator will
cause expenditures for replacements of and additions to the FF&E and
capital expenditures to be made from the Reserve Account. Any proposed
expenditure in excess of the amounts set forth in the Annual Budget
for such items may only be made with Leasee's consent.
27.3. The funds deposited in the Reserve Account shall bear interest, which
interest, less any income taxes assessed thereon, shall be
25
credited to the Replacement Fund referred to in Paragraph 31 below,
and accumulated in the Reserve Account or, if the parties so mutually
agree, otherwise invested.
28. FINAL DISPOSITION OF HOTEL ACCOUNTS:
28.1. At the termination or expiration of this Agreement, a full final
accounting will be made to Leasee and Leasee will be paid all amounts
generated by Hotel operations, including the balances in the Hotel's
bank accounts, after all sums due Operator under the terms of this
Agreement are deducted.
ARTICLE VI
TRANSACTIONS WITH AFFILIATES
29. TRANSACTIONS WITH AFFILIATES
29.1. The Operator shall not purchase goods, supplies and services from or
through any of its Affiliated Entities without express authorization
from Leasee after disclosure of all material terms of the affiliated
relationship and the consideration received by them. Unless clearly
set forth as a separate item for transactions with Affiliates in the
proposed Annual Budget and approved as part of the Annual Budget,
Operator shall not pay or permit or cause to be paid to any such
Affiliated Entity, a fee, rebate, discount or other consideration for
the negotiation of contracts, the purchase from independent suppliers
of goods and services or other act pursuant to Operator's agency
hereunder, without Leasee's prior written authorization.
ARTICLE VII
REPAIRS, MAINTENANCE, AND ALTERATIONS
30. NORMAL REPAIRS AND MAINTENANCE.
26
At Leasees cost and expense, operator will cause the Hotel to be maintained
in good order, repair and condition, ordinary wear and tear excepted.
31. REPLACEMENTS OF AND ADDITIONS TO FF&E
31.1. The Parties shall make a provision in the Annual Budget for
replacements of and additions to FF&E and other capital expenditures.
All amounts provided for in the Annual Budget for replacements and
additions as aforesaid, together with the proceeds from the sale of
FF&E which are no longer needed for the operation of the Hotel, shall
be credited to the "Replacement Fund', and shall be transferred
monthly by Operator from the Operating Account into the Reserve
Account.
31.2. Operator shall be entitled to withdraw from the Replacement Fund and
shall charge against the Reserve Account any amounts required to make
all replacements of and additions to FF&E deemed by it to be necessary
(except as provided under Paragraph 32 below) or desirable, which FF&E
shall be and become, forthwith upon acquisition and installation and
without further act or action, the property of Leasee.
31.3. Replacements of and additions to FF&E deemed by Operator to be
necessary or desirable, the cost of which shall exceed the balance in
the Replacement Fund or the amounts held in the Reserve Account for
that purpose, shall be subject to the approval of Leasee. In the event
that Leasee shall approve such cost items as aforesaid, then and in
such event Leasee shall make available to Operator, as additional
working capital, the necessary funds therefor, and the cost thereof
shall be charged directly to the Operating Costs or shall be
capitalized on the books of account in accordance with sound
accounting practices. The costs of such replacements and additions
that are capitalized shall be depreciated by charges to the Operating
Costs over their estimated useful lives.
31.4. Any amounts remaining in the Replacement Fund at the termination or
expiration of the Operating Term shall be credited to Gross Operating
Profit in the last contract year of the Term.
32. ALTERATIONS
Operator shall have the right to make, from time to time, such alterations,
or improvements in or to the Property, building(s), installations and
building systems which are customarily made in the operation of similar
hotels of the type herein contemplated. The cost of such alterations,
additions or improvements shall be
27
charged directly to Operating Costs or shall be capitalized on the books of
account in accordance with sound accounting practices. The costs of
alterations, additions or improvements that are capitalized in excess of 4%
of Gross revenue of the Hotel shall not be amortized or depreciated by
charges to the Operating Costs.
33. ESSENTIAL REPAIRS, CHANGES, AND REPLACEMENTS.
33.1. If at any time during the Term, repairs to the building(s),
installations or building systems, changes in the Hotel, or
replacements :
33.1.1. shall be required by reason of any laws, ordinances or
regulations, or by any order of governmental authority; or
33.1.2. shall be related to the structural integrity of the Hotel;
such repairs or replacements shall be made by Leasee, shall be paid
for by Leasee, at its expense and not as a charge against Operating
Costs as aforesaid. Such repairs, replacements and changes shall be
made promptly and with as little hindrance to the operation of the
Hotel as possible.
34. CONSULTATION WITH LEASEE
34.1. Operator shall consult with Leasee with respect to suppliers of
equipment and services required in connection with expenditures
incurred pursuant to this Agreement and shall consider in good faith
Leasee's recommendations. Leasee shall have the right to approve any
individual purchase of materials required in connection with such
alterations, additions or improvements where the purchase price
exceeds US$10,000.
ARTICLE VIII
INSURANCE
35. INSURANCE TO BE MAINTAINED BY LEASEE
35.1. Leasee shall at all times during the Term, procure and maintain
adequate insurance :
28
35.1.1. for the full replacement value of the Hotel with financially
responsible insurance companies against all risk of physical loss
or damage to the Hotel and its contents from, including, but not
limited to, fire, boiler explosion, and such other risks and
casualties for which insurance is customarily provided for Hotels
of similar character; and
35.1.2. workmen's compensation, employers' liability or other such
insurance as may be required under applicable laws or which
Leasee, in consultation with Operator, shall deem advisable.
35.2. All policies shall provide that Leasee (and, at Leasee's request, any
mortgagee) be named insured parties, and that Operator be named as
additional insured parties. The fire and extended coverage policy
insuring damage to the building and contents shall provide that the
insurance company agrees to waive any rights of subrogation against
Operator.
36. INSURANCE TO BE MAINTAINED BY OPERATOR
36.1. Operator shall for and on behalf of Leasee maintain at all times
during the Term the following insurance, on usual terms and at
customary rates:
36.1.1. Public liability insurance including personal injury/bodily
injury, property damage, innkeeper's liability and advertising
liability; automobile liability; and crime insurance including
employee fidelity in such amounts as Operator shall deem
necessary;
36.1.2. Use and occupancy (business interruption) insurance covering
loss of profits of Leasee and fees of Operator resulting from
loss due to perils covered under standard fire and boiler and
machinery policies, and such other perils as Operator deems
necessary; and
36.1.3. In its discretion, Operator may maintain such other insurance
as it shall deem necessary for protection against claims,
liabilities and losses, wherever asserted, determined or
incurred, arising from the operation of the Hotel.
36.2. Operator shall, upon request, furnish to Leasee satisfactory evidence
of all insurance maintained by Operator pursuant to this Paragraph 36.
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ARTICLE IX
DAMAGE TO AND DESTRUCTION OF THE HOTEL
37. DAMAGE TO AND DESTRUCTION OF THE HOTEL
37.1. If the Hotel or any portion thereof shall be damaged or destroyed at
any time or times during the Term by fire or any insured casualty and
Leasee repairs, rebuilds or replaces the same, Operator be required
and hereby undertakes to continue to operate and manage the rebuilt
Hotel under the substantially similar to the terms of this Agreement.
38. CONDEMNATION
38.1. If the whole of the Hotel shall be taken or condemned in any eminent
domain, condemnation, compulsory acquisition or like proceeding by any
competent authority for any public or quasi-public use or purpose, or
if such portion thereof shall be taken or condemned so as to make it
imprudent or unreasonable, in Leasee's reasonable opinion, to use the
remaining portion as a hotel and/or commercial center of the type and
class immediately preceding such taking or condemnation, then the Term
shall terminate as of the date of such taking or condemnation.
38.2. If only a part of the Hotel shall be taken or condemned and if
Operator and Leasee mutually determine that the taking or condemnation
of such part does not make it unreasonable or imprudent to operate the
remainder as a hotel and/or a commercial center of the type and class
immediately preceding such taking or condemnation, this Agreement
shall not terminate, but shall continue to be implemented mutatis
mutandis in respect of that portion which remains under operation as
aforesaid.
30
ARTICLE X
RIGHT TO PERFORM COVENANTS
OF THE OTHER PARTY
39. RIGHT TO PERFORM COVENANTS OF THE OTHER PARTY
39.1. If either Operator or Leasee fails to make any payment or perform any
act required under this Agreement, the other party may elect to do so
after giving ten (10) days written notice. Such notice is not
required, however, in the event of an emergency. Any such election
will not release the other party from its obligations, and the
electing party will not be deemed to have waived any right or remedy.
39.2. Any payment made by the electing party will be immediately repaid,
together with interest at 150 basis points above the 30-day LIBOR rate
("INTEREST"), but not in excess of the maximum rate allowed by
applicable law.
ARTICLE XI
DEFAULT
40. DEFAULTS AND TERMINATION
Events of Default.
40.1. The following shall constitute events of default:
40.1.1. The failure of either party to make any payment to the other
provided for herein for a period of thirty (30) calendar days
after such payment is payable;
40.1.2. The filing of a voluntary petition in bankruptcy or insolvency
or a petition for reorganization under any bankruptcy law by
either party;
31
40.1.3. The consent to an involuntary petition in bankruptcy or the
failure to vacate within sixty (60) calendar days from the date
of entry thereof of any order approving an involuntary petition
by either party;
40.1.4. The appointment of a final receiver for all or any substantial
portion of the property of either party;
40.1.5. The entering of an order, judgment or decree by any court of
competent jurisdiction, on the application of a creditor,
adjudicating either party as bankrupt or insolvent or approving a
petition seeking reorganization or appointing a receiver, trustee
or liquidator of all or a substantial part of such party's
assets, and such order, judgment or decree shall continue
unstayed and in effect for any period of one hundred twenty (120)
consecutive calendar days;
40.1.6. The termination, expiry or lapse of the Trade Name License at
any time during the Term, or the loss and/or forfeiture by
Operator of the rights to use and/or operate under the Trade Name
in respect of the Hotel during the Operating Term;
40.1.7. The failure by either party to perform, keep or fulfill any of
the other material covenants, undertakings, obligations or
conditions set forth in this agreement, and the continuance of
any such default for a period of thirty (30) calendar days after
notice of said failure.
40.2. In any of such events of default, the non-defaulting party may give
to the defaulting party notice of intention to terminate this
agreement after the expiration of a period of thirty (30) calendar
days from the date of such notice, and upon the expiration of such
period, this Agreement shall terminate if the default has not been
remedied by that date, in which event the provisions of Paragraph 42
below shall apply.
40.3. If, however, upon receipt of such notice, the defaulting party shall
promptly cure the default, then such notice shall be of no force and
effect, or, when such default is not susceptible of being cured within
thirty (30) calendar days, if the defaulting party shall take action
to cure such default with all due diligence, then the effective date
of the termination notice shall be extended for such reasonable time
as shall be required for the defaulting party to cure such default.
32
40.4. Notwithstanding the foregoing, neither party shall be deemed to be in
default under this agreement if a bona fide dispute with respect to
any of the foregoing events of default has arisen between the parties
and such dispute has been submitted to arbitration in terms of
Paragraph 46 below.
Force Majeure
40.5. Except as otherwise provided in this agreement, should either party
hereto be delayed in or prevented, in whole or in part, from
performing any obligation or condition hereunder with the exception of
the payment of money, or from exercising its rights by reason or as a
result of any force majeure, such party shall be excused from
performing such obligations or conditions while such party is so
delayed or prevented. The term "FORCE MAJEURE" as used herein means :
acts of God, acts of government, strikes, lockouts, or other
industrial disturbances, acts of public enemy, blockades, wars,
insurrections or riots, epidemics, landslides, fires, storms, floods,
explosions, or other similar causes beyond the control of such party
and which could not have been reasonably anticipated by that party.
Rights of Prior Termination
40.6. Nothing in this Paragraph 40 contained shall be deemed to derogate
from or to restrict rights of each party to terminate this Agreement
prior to the expiration of the Initial Term or the Extended Term, as
the case may be, as provided for in Paragraph Article XIII below.
ARTICLE XII
PROPRIETARY TRADE NAME AND MARKS, SUB-LICENSE
41. LICENSE, SUB-LICENSE AND PROPRIETARY RIGHTS
41.1. The Operator affirms, declares, covenants and undertakes that it has
duly been awarded, and shall maintain throughout the Term of this
Agreement, the exclusive rights under license to operate the Hotel
under the names "Park Plaza", "Park Plaza International" and all
related trademarks, service marks, and logos (the "TRADE NAME") under
the System.
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41.2. The Operator hereby grants the Leasee a sub-license that shall
entitle Leasee to make use of the Trade Name and to make use of the
System, subject to the terms, provisions and conditions set forth in
EXHIBIT D attached hereto.
41.3. Leasee acknowledges the Trade Name trademarks, service marks,
copyrights, logos, and other indicia, whether registered or not, are
the exclusive property of Park Plaza.
41.4. Leasee agrees not to make any use of the name "Park Plaza" or any
combination or variation thereof or the Trade Name in any way other
than in accordance with the provisions of the Sub-License.
42. REMOVAL UPON TERMINATION/EXPIRATION
42.1. Upon any termination or expiration of this Agreement, Leasee will, at
its expense, immediately remove and discontinue the use of all signs,
furnishings, printed material, emblems, slogans, or other
distinguishing characteristics which are now or hereafter connected
with the Park Plaza name or the Trade Name. Upon such termination or
expiration, Leasee will not operate or do business at the Hotel under
any name or in any manner that may tend to give the general public the
impression that Leasee or the Hotel are in any way connected with
Operator or the System, and Leasee will, at its own expense,
immediately make such modifications or alterations as may be necessary
to distinguish the Hotel so clearly from its former appearance as to
prevent any possible confusion therewith by the public. If Leasee
fails to take any of the foregoing actions, Park Plaza, Operator, or
their designated agents may enter the Hotel and adjacent areas at any
time to take such actions, at Leasee's sole risk and expense, without
liability for trespass or other tort or criminal act.
43. RESTRICTION UPON USE
43.1. Proper use of the Trade Name pursuant to this Agreement applies only
to their use in connection with the operation of the Hotel subject to
the terms of this Agreement and the Sub-License, and includes only
such Trade Names as are designated herein or as may be designated by
Park Plaza and Operator from time to time in writing.
43.2. Nothing in this Agreement will ever be construed as giving Leasee any
right, title or interest whatsoever in or to the Trade Name or giving
Leasee or others permission to use the Trade Name or any colorable
imitation thereof in any manner, except in
34
accordance with this Agreement and the Sub-License or with the prior
written approval of Operator.
43.3. Leasee will not use any Trade Names as part of Leasee's corporate or
other formal business name, except as may result as a consequence of
operating the Hotel under the name "Park Plaza International" or "Park
Plaza" with Operator's prior written consent. Leasee may include in
its corporate and promotional literature references to the fact that
the Hotel is operated under the Trade Name, provided that Operator's
rights in and to the Trade Name are not thereby jeopardized.
43.4. Leasee will not register or attempt to register any of the Trade Name
in any state, nation or political subdivision thereof.
43.5. The use by Leasee of the Trade Name outside the scope of the
Sub-License, without Operator's prior written consent, will be an
infringement of Operator's exclusive right, title and interest in and
to the Trade Name, and Leasee expressly covenants that during the term
of the Sub-License, and after the expiration or termination hereof,
Leasee will not, directly or indirectly, commit an act of infringement
or contest or aid in contesting the validity or ownership of Park
Plaza's Trade Names, or take any other action in degradation thereof.
44. OWNERSHIP AND GOODWILL:
44.1. It is expressly recognized that any and all goodwill associated with
the Trade Name, including any goodwill which might be deemed to have
arisen from use of the Trade Name at the Hotel, inures directly and
exclusively to the benefit of Park Plaza and is the property of Park
Plaza or of companies affiliated with it. Upon expiration or
termination of this Agreement, no monetary value will be assigned as
attributable to any goodwill associated with Leasee or the operation
of the Hotel arising from the use of the Trade Name.
35
ARTICLE XIII
TERMINATION
45. EARLY TERMINATION FOR CAUSE
45.1. In the event that either party shall have committed an event of
default and shall have failed to rectify such breach as provided for
in Paragraph 40.2 above, then and in such event the aggrieved party
shall be entitled to terminate this Agreement with immediate effect.
45.2. The rights granted hereunder shall not be in substitution for, but
shall be in addition to any and all rights and remedies for breach of
contract granted by applicable provisions of law.
ARTICLE XIV
ARBITRATION
46. ARBITRATION
46.1. Any dispute, controversy, dispute or claim arising out of and/or
pertaining to and/or in connection with this Agreement, its
interpretation, execution or validity, or the breach and termination
hereof, shall be settled by final and binding arbitration in
accordance with the Rules of Arbitration of the London Court of
International Arbitration (LCIA) in London, England, which rules are
deemed to be incorporated by reference into this Paragraph.
46.2. The arbitration shall be heard and determined by one arbitrator, who
shall be selected by the parties. If within forty-five (45) days
following the date upon which a claim is received by the respondent,
the parties cannot agree on who the arbitrator is to be, the
appointing authority under such Rules shall select the arbitrator.
36
46.3. The place of arbitration shall be London, England (or at such
alternative venue to be agreed between the Parties or as determined by
the Arbitrator), and the English language shall be used in the
arbitral proceedings.
46.4. In adjudicating any dispute referred to herein in terms of this
Paragraph, the Arbitrator shall not be bound by the rules of evidence,
nor by the rules of civil procedure, nor by the terms of the
substantive law, but rather shall endeavour to adjudicate the dispute
in accordance with the principles of "Natural Justice". In the event
that the Arbitrator shall nevertheless elect to be guided by and/or
governed by the provisions of the substantive law, then and in such
event the Governing Law determined in EXHIBIT A shall apply. The
Arbitrator shall have the powers of an amicable compositeur.
46.5. The Arbitrator shall be empowered to issue temporary orders and
injunctions, and the Parties undertake to abide by such orders and
injunctions pending the making of the final arbitral award.
46.6. The Arbitrator shall use his best endeavours to ensure that the
Arbitration proceedings are conducted expeditiously and diligently,
and that the arbitral award is given as soon as possible. The
Arbitrator shall be required to furnish reasons for his decision. The
Parties hereby agree and undertake that the arbitral award shall be
final and binding upon them, and shall not be subject to further
appeal.
46.7. The fees and expenses of the Arbitrator and/or of the arbitration
proceedings shall be borne by the Parties in equal shares, unless
specifically determined to the contrary by the Arbitrator in his
award.
46.8. The parties hereby declare that the bone fide referral of any dispute
to arbitration shall not entitle either of the parties to dis-continue
the fulfillment of their undertakings and obligations in terms hereof,
save in those instances where the dispute relates to the termination
of this Agreement.
46.9. This Paragraph constitutes a separate agreement to arbitrate which
shall survive the termination of this Agreement for any reason.
46.10. The award of the arbitrator shall be the sole and exclusive remedy
between the parties regarding any and all claims and counterclaims
presented to the arbitrator; provided, however, that
37
the parties may seek court ordered temporary injunctive relief pending
the determination of final award under the arbitration.
ARTICLE XV
GENERAL PROVISIONS
47. TAXES AND IMPOSITIONS:
47.1. Leasee will pay, prior to delinquency, all real estate taxes and
assessments, which may become a lien on the Hotel and which become due
and payable during the Term of this Agreement, unless payment is in
good faith being contested by Leasee and enforcement of payment has
been stayed. If requested, Leasee will provide to Operator documentary
evidence of payment.
48. CURRENCY:
48.1. All amount to be reimbursed or paid to either party under the terms
of this Agreement will be in GBP. At Operator's option, amounts due to
it may be paid directly or deposited in a bank account designated in
writing by Operator.
49. NOTICES:
49.1. The terms "Notice" and "Notify" mean notice given as prescribed in
this Paragraph. Any Notice or other document to be given hereunder may
be delivered by courier or sent by prepaid registered air mail or by
telex or facsimile to the party to be served at that party's address
as set forth in EXHIBIT A or to such other address as the party may
subsequently designate by this notice procedure.
49.2. Any such Notice or document will be deemed to have been served (i) if
delivered by courier, three days after dispatch; or (ii) if posted,
seven days after posting; or (iii) if sent by facsimile, upon the date
of transmission with confirmation of receipt by the addressee's
terminal; or (iv) immediately, if delivered by hand. If a party has a
facsimile terminal, Notice must include a facsimile transmission,
unless the documents are bulky or otherwise unsuitable for service by
fax.
38
49.3. In providing such service it will be sufficient to prove that
delivery by courier was made or refused, or that the envelope
containing such Notice or document was properly addressed and posted
as a prepaid registered letter and was signed for or refused on
delivery to the addressee, or that the telex was dispatched after
receiving confirmation of the answer back, or that the facsimile was
received in legible form.
50. ASSIGNMENT
Assignment by Operator
50.1. Subject to the provisions of Paragraph 50.2 below, Operator shall not
be entitled to assign, transfer and make over its rights and interests
and its undertakings and obligations in terms of this Agreement to any
third party without the prior express written consent of Leasee.
50.2. Notwithstanding the provisions of Paragraph 50.1 above, Operator
shall be entitled to assign and transfer its rights and obligations in
terms hereof to its wholly owned and controlled subsidiary company,
provided that the assignor shall remain jointly and severally liable
for the fulfillment by the assignee of the undertakings made and
obligations assumed by the "Operator" in terms hereof.
Assignment by Leasee
50.3. Leasee shall have the right to assign its rights and obligations
under this Agreement and/or to sell and transfer its rights and
interests in and to the Hotel to any third party without requiring the
consent or approval of Operator, provided that such assignment and/or
sale shall be made subject to this Agreement. The provisions of this
Paragraph shall be in addition to, and shall not derogate from, the
rights of Leasee in terms of Paragraph 45 above.
Successors and Assigns
50.4. The terms, provisions, covenants, undertakings, agreements,
obligations and conditions of this Agreement shall be binding upon and
shall inure to the benefit of the successors in interest and the
assigns of the parties, except that no assignment, transfer, pledge,
mortgage or lease by or through Operator or by or through Leasee, as
the case may be, in violation of the provisions of this Agreement
shall vest any rights in the assignee, transferee, mortgagee, pledgee,
lessee or in any occupant.
39
51. SPECIAL PROVISIONS
51.1. Any special provisions, if any, which have been agreed upon between
Leasee and Operator which relate specifically to the Hotel which is
the subject matter of this Agreement, are set forth in EXHIBIT E
attached hereto.
52. APPROVALS, CONSENTS, AND OTHER ACTIONS:
52.1. Whenever the approval, consent, satisfaction, request, agreement,
judgment, determination, or other discretionary action of Operator or
Leasee is required or permitted by this Agreement, such discretionary
action will be given, taken, or exercised reasonably and in good
faith. Any such discretionary action of one party that is requested by
the other party will not be withheld unreasonably.
52.2. Except where otherwise provided, where approvals or consents by
either Leasee or Operator are called for under this Agreement, the
procedures set forth below will be followed. All information,
documentation or Notices regarding approval or consents requested by
one party will be submitted to the other party pursuant to Paragraph
49 above. Where approvals of documents or written materials are
requested, the responding party will have thirty (30) days after
receipt thereof within which to respond. Where approvals of actions or
proposed actions are requested, the responding party will have thirty
(30) after receipt of Notice regarding same within which to respond.
If no Notice expressing disapproval is given by the responding party
to the other party within the designated time period, approval is
deemed to have been given.
53. AMENDMENTS
53.1. The conditions, covenants, agreements, and terms of this Agreement
may only be waived, altered, or modified by a writing signed by both
parties.
54. PARTIAL INVALIDITY
54.1. If any clause or term of this Agreement should be invalid,
unenforceable or illegal, then the remaining terms of this Agreement
shall be deemed to be severable therefrom and shall continue in full
force and effect unless such invalidity, unenforceability or
illegality goes to the root of this Agreement.
40
55. HEADINGS AND EXHIBITS
55.1. The headings or titles used in this Agreement are for the purpose of
convenience only and may not be employed in the interpretation or
construction of this Agreement
55.2. The various Exhibits attached to this Agreement constitute an
integral part of this Agreement as if same had been specifically
incorporated into the body hereof.
56. ENTIRE AGREEMENT
56.1. This Agreement constitutes the entire agreement and understanding
between Leasee and Operator on the subject matter hereof and
supersedes all prior agreements, written or oral, and all prior
writings.
57. COUNTERPARTS
57.1. This Agreement may be executed by the parties hereto in counterparts,
and when so executed will be given the same force and effect as if one
copy was executed by all parties.
[SIGNATURE PAGE FOLLOWS]
41
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date specified in EXHIBIT A.
For: LEASEE
Name:
-------------------------------
Title:
------------------------------
For: OPERATOR
Name:
-------------------------------
Title:
------------------------------
42
HOTEL MANAGEMENT AGREEMENT
EXHIBIT A
EXECUTION DATE AND IDENTIFICATION OF PARTIES
1. DATE OF EXECUTION This Agreement is executed as of _________________
2. OPERATOR Park Plaza Hotels Europe B.V., a company, organized and
existing under the laws of the Netherlands, whose address
for all purposes in terms of this Agreement is:
Hasselaerssteeg 11
1012 MB Amsterdam
The Netherlands
Tel.: 0031-20-7138206
Fax.: 0031-20-5240651
3. LEASEE ___________ Ltd.
4. OWNER _____________________., a company, organized and existing
under the laws of the Netherlands, whose address for all
purposes in terms of this Agreement is :
_____________________
5. THE TERRITORY : England
6. GOVERNING LAW : The laws of the Netherlands
43
HOTEL MANAGEMENT AGREEMENT
EXHIBIT B
DESCRIPTION OF THE HOTEL
1. HOTEL NAME _______________
2. HOTEL CLASSIFICATION: Four Star
3. COMMON ADDRESS OF THE HOTEL AND HOTEL SITE : ________________
4. DESCRIPTION OF THE REAL PROPERTY WHICH IS THE HOTEL SITE: ________________
5. DESCRIPTION OF THE HOTEL AND ALL RELATED FACILITIES: _______________
Guest Rooms: (Singles, Jr. Suites, Suites)
11 floors with a total of 462 rooms & suites:
- 396 four-star deluxe guest rooms & suites:
- 301 Superior rooms
- 64 Executive rooms
- 31 Executive suites
- 66 five-star luxurious, self-contained, suites with striking views:
- 10 Studios
- 41 one bedroom suites
- 15 two bedroom suites
Hotel Guest Room Amenities & Features
Air-conditioning, flat screen TVs, direct telephone with 3 extensions,
EU/UK/US power sockets, fax & modem points, Wireless Internet, movie &
music channels
44
on demand, laptop safe, mini-bar, hair-dryer, iron & ironing board, tea &
coffee making facilities, bath & separate shower as standard
Suites Guest Room Amenities & Features
All facilities as in the hotel rooms plus:
Striking views, self-contained kitchen unit with washer/drier, dishwasher,
microwave oven, fridge, high quality coffee machine and Plasma screen with
surround sound, Bose CD/DVD player, pillow menu, fax & printer, luxury
linen, exclusive bath towels and toiletries.
The suites benefit from all services & facilities offered by the hotel and
guests can charge to their room. Other exclusive services available
include:
nanny / babysitting service, children's toys, play station, business cards,
possibility to book a private chef, dedicated butler service / concierge,
relocation assistance and valet parking.
Restaurants:
Concept restaurant (80 seats, located on ground floor)
Lobby bar & lounge (located on ground floor)
Bar (1st floor)
Breakfast club lounge (basement level 1)
Executive lounge (11th floor)
Bars: See above
Banquet Facilities:
13 meetings rooms, including:
- 1 Ballroom accommodating up to 800 Theatre style
- 1 Ballroom accommodating up to 568 Theatre style
-
State-of-the-art audiovisual equipment onsite and a business centre is also
available.
Separate entrance for groups & functions.
Other Function Space:
Commercial Space, including Concessions and Shops: 1 retail unit
Parking Facilities: 120 car parking spaces
Recreational Facilities: Fitness centre, indoor swimming pool, spa, sauna,
steam room, beauty treatment rooms
Other Details and Information: 120 car parking spaces
45
HOTEL MANAGEMENT AGREEMENT
EXHIBIT C
FORM OF PROFIT AND LOSS ACCOUNT
Rooms
Revenue
Payroll and related expenses
Other expenses
Departmental income
Food and beverage
Revenue
Food
Beverage
Cost of Sales
Food
Beverage
Other income
Payroll and related expenses
Other expenses
Departmental income
Casino
Revenue
Payroll and related expenses
46
Other expenses
Departmental income
Telephone departmental income
Net income from minor
operated departments
Rentals and other income
Total Operating Department Income
Undistributed operating expenses
Administrative and general
Payroll and related expenses
Other expenses
Marketing
Energy costs
Property operation and maintenance
Replacements of and additions to
Furnishings and Equipment
Gross Operating Profit
Operator's Fee
Leasee's Profit Participation
47
HOTEL MANAGEMENT AGREEMENT
EXHIBIT D
SUB-LICENSE AGREEMENT
1. AWARD OF SUB-LICENSE
1.1 Pursuant to Article XV of the Agreement, the Operator hereby grants
the Leasee a sub-license to use the name "Park Plaza" together with
the associated logos and certain other services comprising the Park
Plaza international System developed by Park Plaza Global Holdings,
Inc., as detailed below.
1.2 Operator hereby warrants, declares and covenants that pursuant to the
provisions of the Territory License Agreement entered into between it
and Plaza Global Holdings, Inc. ("the Principal License"), it is fully
entitled, authorized and empowered to award the Sub-License to Leasee
in terms of this Agreement.
1.3 The sub-license awarded to the Leasee to make use of the Trade Name
and to make use of the hotel operation and management system developed
by Park Plaza International ("the System") which includes the right to
the System's international marketing and reservation system, to
receive advertising and promotional materials; to participate in any
association of international hotels which may be organized by Park
Plaza; to receive advise and assistance in the design, development and
enhancement of hotels within the System; to receive training and
education of hotel management and key personnel; to be included in the
Park Plaza International Directory and to receive manuals and other
materials disseminated by Park Plaza.
2. FEES AND ASSESSMENTS
2.1 In consideration for the award of the sub-license, it is hereby agreed
that Leasee shall pay the Operator a Franchise Fee (Monthly Fee) equal
to 1% (one per cent) of the Gross Room Revenues, payable on or before
the 20th day of each calendar month during the Term.
For the purposes of this Exhibit, the term Gross Room Revenues shall
be calculated on the accrual method of accounting and in accordance
with the Uniform System of Accounts for Hotels as adopted and modified
from time to time by the American Hotel
48
and Motel Association. Gross Room Revenues shall not include sales or
similar taxes, or gratuities.
2.2 In Addition, for each calendar month during the Term, Leasee will pay
to Operator a Reservation System Users Fee equal to the actual cost
pursuant to an outsourcing agreement for the provision of such
service.
3. TERMS AND CONDITIONS OF SUB-LICENSE
3.1 Operator's Obligations
The Operator shall continue to maintain high standards of quality,
cleanliness, appearance and service for the Park Plaza System and to
promote, protect and enhance the public image and reputation of the
System and reputation of the System so as to increase the demand for
lodging and other services offered under the System.
The Operator shall undertake to perform or cause others to perform the
following :
(a) Training: In co-operation with the Leasee, offer educational and
training courses for Leasee's employees.
(b) Reservation System: Maintain and make available to all hotels in
the System an international reservation system.
(c) Directory: Publish and make available to all hotels in the
System the Park Plaza International Directory;
(d) Advertising : Cause materials to be prepared for advertising,
promotion and marketing of the System for the benefit of the
hotels in the System in the country or area in which the Hotel is
located, to administer advertising and marketing programs and
review proposed marketing materials prepared by Leasee for
approval.
49
(e) Manual: Provide and maintain a Systems operations and Building
Standards Manual ("Manual") containing standards and requirements
for construction, conversion, equipping, furnishing and supplying
hotels within the system and setting forth management operational
standards, procedures and techniques.
(f) Inspection: Conduct periodic inspections of the services and
facilities provided to the public at the Hotel.
(g) Advice and Consultation : Provide continuing consultation and
advise to Leasee in the management, operation and marketing of
the Hotel.
3.2 Leasee's Obligations
Leasee acknowledges that the value of the hotel operation and
management system developed by Park Plaza International (the "System")
can only be preserved and enhanced by maintaining a high standard of
performance in the operating and maintenance of the Hotels within the
System. In this respect, Leasee will do the following:
(a) Maintenance of the System : Maintain the high standards and
public image of the System, preserve the value and reputation of
all service marks, trademarks, trade names and related goodwill,
and otherwise use all reasonable means to promote and encourage
the use of Park Plaza hotels and facilities everywhere by the
public.
(b) Maintenance of the Hotel : Maintain the Hotel in a clean,
attractive and orderly condition,
50
using standards established by Park Plaza applicable to such
hotels in the System, and make such repairs, additions or
improvements as are necessary to maintain the agreed upon
standards of the System.
(c) Service : Provide efficient, courteous and high quality service
to the public in accordance with the System.
(d) Health Standard : Meet and maintain high health standards and
ratings applicable to the operations of the Hotel.
(e) Right of Inspection : Allow Operator and its agents to enter the
Hotel at any reasonable time for conducting inspections to ensure
compliance with the standards and policies of the System.
(f) Reservation System : Participate in the International reservation
system and observe all terms and conditions of participating in
the international reservation system.
(g) Legal Compliance : Comply with all governmental laws and
requirements, pay all taxes and maintain all governmental
licenses and permits necessary for operating the Hotel in
accordance with the System.
(h) Compliance with Agreement : Comply in all respect with the System
Operations and Building Standards Manual, as amended from time to
time and with all other requirements of the Agreement.
51
3.3 Records, Reporting And Payments
Leasee will be responsible for maintaining accurate records with
respect to all matters affecting the performance hereof. Within ten
(10) days after each month, Leasee will provide monthly reports on
Room Revenues, occupancies, average daily rates, food and beverage and
miscellaneous revenues, gross operating profit and such other
information as Operator from time to time specifies.
3.4 Proprietary Rights
(a) Proprietary Marks. Leasee acknowledges the name "Park Plaza
International" and all related names, trademarks, service marks,
copyrights, logos and other indicia, whether registered or not
("Marks") are the exclusive property of Plaza Global Holdings,
Inc. which granted a license to Golden Wall Investments Ltd.
which grant a sub License to the Operator as more fully detailed
in the preamble to this agreement. Leasee agrees not to use the
name Park Plaza, Park Plaza, Park Suites or similar combination
or variation thereof or the Marks other than in terms hereof
without the prior written consent of Park Plaza.
(b) Proper Use of the Marks : Proper use of the Marks pursuant to
this Agreement applies only to their use in connection with the
operation of the Hotel subject to the terms of this Agreement,
and includes only such Marks as are designated herein or as may
be designated by Park Plaza and Operator from time to time in
writing.
(c) Reservation of Rights. Nothing herein contained will ever be
52
construed as giving Leasee any right, title or interest
whatsoever in or to the Marks or giving Leasee or others
permission to use the Marks or any imitation thereof in any
manner, except in accordance with the terms and provisions hereof
or with the prior written approval of Park Plaza and/or the
Operator, Leasee will not use any Marks as part of Leasee's
corporate or other formal business name, except as may result as
a consequence of operating the Hotel under the name "Park Plaza
International" or "Park Plaza" or with the prior written consent
of Park Plaza and Operator.
(d) Undertaking not to Register Rights. Leasee will not register or
attempt to register any of the Marks in any state, nation or
political subdivision thereof. The use by Leasee of the Marks
outside the scope of this sub-license, without the prior written
consent of Park Plaza and Operator, will be an infringement of
Park Plaza's exclusive right, title and interest in he Marks, and
Leasee expressly covenants that during the term of this
sub-license, and after the expiration or termination thereof,
Leasee will not directly or indirectly commit an act of
infringement or contest or aid in contesting the validity of
ownership of Park Plaza's Marks, or take any other action in
derogation thereof.
(e) Rights upon Termination. Upon any termination or expiration of
the Principal Agreement for any
53
reason and upon its terms, the sub-license awarded in terms
hereof shall automatically lapse, and in such event Leasee will,
at its expense, immediately remove and discontinue the use of all
signs, furnishing, printed material, emblems, slogan or other
distinguishing characteristics which are now or hereafter
connected with the Park Plaza name or the Marks. Upon such
termination or expiration, Leasee will not operate or do business
at the Hotel under any name or in any manner that may tend to
give the general public the impression that Leasee or the Hotel
are in any way connected with Operator or Park Plaza or the
System, and Leasee will, at its own expense, immediately make
such modifications or alterations as may be necessary to
distinguish the Hotel so clearly from its former appearance as to
prevent any possible confusion therewith by the public. If he
fails to take any of the foregoing action, Operator or its
designated agents may enter the Hotel and adjacent areas at any
time to take such actions, at Leasee's sole risk and expense
without liability for trespass or other tort or criminal act.
(f) Goodwill. It is expressly recognized that any and all goodwill
associated with the Marks, including any goodwill which might be
deemed to have arisen from the use of the Marks at the Hotel,
inures directly and exclusively to the benefit of Park Plaza and
is the property of Park
54
Plaza or of the companies affiliated with it. Upon expiration or
termination of the Principal Agreement, no monetary value will be
assigned as attributable to any goodwill associated with Leasee
or the operation of the Hotel.
55
HOTEL MANAGEMENT AGREEMENT
EXHIBIT E
SPECIAL CONTRACT PROVISIONS
This Exhibit contains agreements and provisions which have been concluded
between the Parties, and which relate specifically and only to the Hotel
designated in Exhibit A.
56
HOTEL MANAGEMENT AGREEMENT
EXHIBIT F
ANNUAL BUDGET
57
FIRST ADDENDUM
to the Hotel Management Agreement dated _____ (the "MANAGEMENT AGREEMENT")
signed between the parties identified in EXHIBIT A thereto as "Operator"
"Leasee" and "Owner" respectively.
Dated ______________
WITNESSING THAT IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES TO REVISE THE
PROVISIONS OF THE MANAGEMENT AGREEMENT AS FOLLOWS:
1. AS TO GENERAL
All the provisions of the Management Agreement and its exhibits, which are
not being amended in this First Addendum, shall stay in full force and
effect.
2. EARLY TERMINATION
New section 45A shall be added to read -
"45A Notwithstanding anything to the contrary contained above, and
without derogating from the rights of either party to terminate
this Agreement for cause in terms of Paragraph 45 above, each
party shall be entitled to terminate this Agreement on the giving
of not less than six (6) months advance written notice.
Early Termination Fee
In the event that Leasee shall terminate this Agreement as
provided in this section 45A, then and in such event Leasee shall
be obliged and undertakes to pay to Operator an early termination
fee in an amount equal to MFxMM.
MF means 1/12 of the Operator's Fee, and the Franchise Fee
provided for under EXHIBIT D attached hereto, paid to the
Operator in respect of the accounting year immediately preceding
the effective date of termination.
MM means 18 less the number of advance notice months provided for
in the advanced written termination notice.
58
Operator shall not be entitled to receive an early
termination fee in the event that: (a) Leasee shall have
terminated this Agreement for cause in terms of the provisions of
section 45 above; or (b) either Leasee or Operator shall have
elected not to extend the Term of this Agreement to include the
Extended Term as provided for in Paragraph 3.3 above.
3. Paragraph 2.3.1 shall be amended to read -
"2.3.1 to sell, transfer or otherwise dispose of its rights and interests
in and to the Property and/or the Hotel, subject to Operator's rights
as specified in Paragraphs 45A and 50.3 below."
4. Paragraph 50.3 shall be amended to read -
"Assignment by Leasee
Leasee shall have the right to assign its rights and obligations under this
Agreement and/or to sell and transfer its rights and interests in and to
the Hotel to any third party without requiring the consent or approval of
Operator, provided that such assignment and/or sale shall be made subject
to this Agreement. The provisions of this Paragraph shall be in addition
to, and shall not derogate from, the rights of Leasee in terms of
Paragraphs 45 or 45A above."
5. EFFECT
This Addendum is effective as from ___________.
[SIGNATURE PAGE FOLLOWS]
59
IN WITNESS WHEREOF, the parties hereto have executed this First Addendum as of
the date specified above.
For: LEASEE
Name:
-------------------------------------
Title:
------------------------------------
For: OPERATOR
Name:
-------------------------------------
Title:
------------------------------------
60
SECOND ADDENDUM
TO THE HOTEL MANAGEMENT AGREEMENT DATED _____(THE "Management Agreement")
SIGNED BETWEEN THE PARTIES IDENTIFIED IN Exhibit A THERETO AS "OPERATOR"
"LEASEE" AND "OWNER" RESPECTIVELY.
Dated _______
WITNESSING THAT IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES TO REVISE THE
PROVISIONS OF THE MANAGEMENT AGREEMENT AS FOLLOWS:
1. AS TO SECTION 6
Section 6: Central and Regional Office Services, shall be amended to read:
Operator shall provide administrative services in support of the Hotel,
including general supervision, consultation, planing monitoring compliance
with the sub license agreement, corporate finance, personal and employee
relations, research and development, and the services of Operator's
technical operational and marketing experts making periodic inspections and
consultation visits to the Hotel.
Operator shall also provide various marketing services and advertising.
(All the said services shall herein be called "CENTRAL OFFICE SERVICES").
The Central Office Services shall be rendered to the Hotel together with
the other hotels operated by Consultant in any respective year by
Operator's regional and central offices.
All the cost of the performance of the Central Office Services including
all the employment costs of the personnel employed in the performance of
the Central Office Services and all the general and administrative costs to
be incurred in connection to the performance of the Central Office Services
shall, whether incurred by any of the hotels operated by Operator, be borne
and defrayed by the hotels operated by Operator so that operator shall
reimbursed for all these costs. Leasee shall bear its pro rata share of
such actual and substantiated costs incurred by Operator, provided however
that the total amount of such costs to be borne by Leasee shall not exceed
3% (three percent) of the Gross Operating Profit of the Hotel.
Notwithstanding the aforesaid, the costs of employment of the CEO of
Operator and maintaining his office shall be borne by Operator without
reimbursement from the Hotel or the other hotels operated by Operator.
2. AS TO SECTION 22
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Section 22.2.2: a new subsection (xv) shall be inserted after section (xiv)
to read:
(xv) The Base Fee (as calculated in accordance with the provisions of
section 21.1.a. above).
3. AS TO GENERAL
All the provisions of the Management Agreement and its exhibits, which are
not being amended in this Second Addendum, shall stay in full force and
effect.
[SIGNATURE PAGE FOLLOWS]
62
IN WITNESS WHEREOF, the parties hereto have executed this Second Addendum as of
the date specified above.
For: LEASEE
Name:
-------------------------------------
Title:
------------------------------------
For: OPERATOR Park Plaza Hotels Europe B.V.
Name:
-------------------------------------
Title:
------------------------------------
63
Dated, _____
On the date hereof we the undersigned, _________________. ("LEASEE") and Park
Plaza Hotels Europe B.V. ("OPERATOR"), entered into a Hotel Management Agreement
(the "HOTEL MANAGEMENT AGREEMENT") pursuant to which Operator shall manage the
__________ Park Plaza Hotel in London (the "HOTEL").
Notwithstanding any thing contained in the Hotel Management Agreement, it is
hereby agree between the parties that in the event that the Leasee and/or the
Owner shall introduce and offer a time sharing program in the Hotel - the
revenue in consideration for the sale of such program units itself (in
distinction to maintenance fees or other payment of a category similar to
maintenance fee such as annual club membership fee) SHALL NOT be part of the
Hotel's "Gross Operating Profit" or the "Room Revenues" in accordance with
section 22 of the Hotel Management Agreement and accordingly shall not be part
of the basis of calculation of the fees payable to Operator pursuant to the
Hotel Management Agreement or its early termination.
IN WITNESS WHEREOF,
For: LEASEE
Name:
-------------------------------------
Title:
------------------------------------
For: OPERATOR Park Plaza Hotels Europe B.V.
Name:
-------------------------------------
Title:
------------------------------------
64
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘20-F’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 6/30/06 |
| For Period End: | | 12/31/05 | | | | | | | 6-K |
| List all Filings |
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