EXHIBIT 10.qq
BERMUDA BERTHING AGREEMENT
THIS AGREEMENT (the "Agreement") is made the 14th day of July, 1999
BETWEEN THE GOVERNMENT OF BERMUDA (hereinafter called "The Government") and
CROWN CRUISES LIMITED, a Bermuda corporation having its principal place of
business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000-X, Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxx 00000, (hereinafter called the "Company").
WHEREAS, the Government has berths and facilities for cruise vessels at
the former Royal Dockyard in the Bermuda islands (hereinafter called the
"Dockyard") and considers it imperative to promote and use those berths and
facilities for the wellbeing of Bermuda's tourism industry and the business
community generally and in particular that of the Dockyard.
AND WHEREAS, the Company has agreed to provide regularly scheduled
cruise ship services between the Philadelphia/Baltimore/Washington, D.C. area
and the Dockyard and for that purpose has agreed to procure and utilize a vessel
named M/V Crown Dynasty (hereinafter called "the Vessel," which expression
shall, where the context admits, include any ship properly substituted for the
same under the provisions of Clause 2 hereof).
AND WHEREAS, the Vessel will be operated by the Company or its
affiliated appointee;
AND WHEREAS, the Government has agreed to make available to the Company
at the Dockyard a berth, and the facilities normally pertaining thereto,
suitable in size and location for the Vessel; and
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AND WHEREAS, the Company has applied to the Minister responsible for
Tourism to issue an appropriate permit as required under the provisions of the
Bermuda Passenger Ships Xxx 0000.
NOW, in consideration of the mutual agreements hereinafter contained IT
IS HEREBY AGREED, as follows:
1. The Government hereby grants to the Company for the benefit of
itself and its parent or subsidiary companies if any:
(a) The use of a berth at the Dockyard for a period of 22 weeks
extending over Friday, Saturday and Sunday of each week during the period
beginning on May 12, 2000 and beginning during the first week in May (as
requested by the Company) in 2001 and 2002 (such three-year period is
hereinafter called the "Term"). The exact time of arrival and departure on each
occasion shall be agreed with, and subject to the control of, the Bermuda
Harbourmaster;
(b) The use of all facilities normally made available at the
Dockyard to cruise ships at berth there; and
(c) The exclusive permission to call in Bermuda with respect to a
cruise ship sailing from the Philadelphia, PA/Baltimore, MD/Washington, D.C.
area (the "Baltimore Area") during the Term; provided, always that such
permission shall not prevent the Government from granting permission to another
vessel to sail to Bermuda from the Baltimore Area on an occasional basis during
the second or third year of the Term. And so that the Government will ensure, so
far as it is able, that if for any reason such berth cannot be used then, the
Government will permit the Company to use another suitable and safe berth to be
designated by the Harbourmaster, if one is available at that time, or a safe
anchorage.
2. The Company hereby agrees that it will:
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(a) Procure the use of and operate the Vessel (or another ship of
comparable size and quality as may be approved in writing by the Minister
responsible for tourism, such approval not to be unreasonably withheld) for the
said regularly scheduled weekly cruises during the Term.
(b) Redecorate the Vessel with a strong Bermuda theme, including
re-naming the decks with Bermuda names and displaying pieces of Bermuda art.
(c) Promote on board the Vessel during each of the said cruises to
the Dockyard the shopping and recreational opportunities in the Dockyard in
particular and in Bermuda generally in a manner and to the extent reasonably
required by the Government's Department of Tourism and ensure that the Bermuda
Cruise magazine or any other similar publications are freely distributed on
board the Vessel and a copy placed in each cabin.
(d) Retain a total of up to 30 Bermuda summer interns to work aboard
the Vessel to gain hospitality experience in five four-week rotations of six
persons each. The Company shall provide such interns with food and lodging on
the Vessel but no other compensation.
(e) Establish food and drink menus aboard the Vessel that includes
Bermuda drinks and specialty meals.
(f) Provide the plans for the redecoration of the Vessel to reflect
the Bermuda theme for the review of the Government in advance to ensure that the
Government has an adequate opportunity to provide the Company with its
meaningful input, notify the Government of the progress of the redecoration of
the Vessel and provide the Government with an opportunity or opportunities to
inspect the Vessel to ensure that the redecoration is proceeding
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in accordance with the agreed upon plans prior to the commencement of the first
cruise to Bermuda during the Term in May 2000.
(g) Guaranty that an average number of cruise passengers will stay
in Bermuda hotel rooms each week of the cruise season as follows: 100 passengers
(300 bed nights) per week in 2000, 150 passengers (450 bed nights) per week in
2001 and 200 passengers (600 bed nights) in 2002.
(h) Provide weekly lists of cruise passengers aboard the Vessel who
have elected to take advantage of the "cruise and stay" program described in
(g).
(i) Arrange for the marketing of the Bermuda cruises aboard the
Vessel to passengers in the Chicago, IL and other areas and arrange for charter
flights for passengers from Chicago, IL to Bermuda and returning through
Philadelphia, PA.
(j) In all aspects of the Vessel's operation and maintenance and in
respect of any other work carried out to the Vessel, have regard to the physical
environment of Bermuda, and observe and comply with the provisions of the
International Convention for the Safety of Life at Sea (1974) as amended and the
International Convention for the Prevention of Pollution from Ships (1973) as
amended and any other legislation or treaty which has effect in Bermuda and is
designed or intended or, which, in the opinion of the Government, has the effect
of enhancing or preserving the physical environment of Bermuda or of protecting
Bermuda or its people from harm or damage resulting from the operation of the
Vessel.
(k) Fully indemnify the Government and its employees against all
proceedings, claims, costs, expenses and liabilities whatsoever which may be
occasioned by the Company's servants or by the use of said berth or anchorage by
the Company, except that such indemnity in favour of the Government shall not
extend to any claims, costs, expenses and
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liabilities occasioned by reason of any negligence or misconduct on the part of
the Government or its employees.
(l) At all times during the Term of this Agreement, provide the
Government with such insurance protection as is usual, customary and appropriate
in the cruise industry to protect the Government against third-party risks and
any claims against the Government or its employees under this Agreement that may
arise in connection with the Company's use of the said berth or anchorage, pay
all premiums necessary for that purpose within seven (7) days after the same
shall become due and deliver to the Government on written demand the policy or
policies of such insurance and the receipt for the current premium for the same.
3. (a) Should the Vessel fail to call at Bermuda in accordance with
Clause 2 hereof then the Company shall pay to the Government for each such
voyage not so undertaken, by way of liquidated damages and not as a penalty, and
as a complete remedy for such failure, a sum equal to the average of the
"passenger departure tax" paid per voyage together with pilotage, bouyage and
berthing charges in respect of the failed arrival or arrivals. Provided always
that if there are no, or an insufficient number of voyages, then the sum shall
be computed as if the appropriate voyages had been undertaken at ninety percent
(90%) of the capacity of the Vessel. If the Company fails to comply with Clause
2(g), the Company shall pay to the hotels contracted to provide the rooms the
contract rate for each bed night guaranteed but not used. Provided also,
however, that no such payment shall fail to be made if the failure is caused by
an act of God, war, riot, civil commotion, strike, lock-out, substantial
mechanical breakdown or other force majeure (being an event outside the
reasonable control of the Company).
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(b) For the purposes of this Agreement the term "passenger departure
tax" shall have the meaning assigned to it by the Miscellaneous Xxxxx Xxx, 0000,
as amended from time to time, or in any substitution or re-enactment thereof.
(c) No increase in the passenger departure tax or the passenger
cabin tax under the Miscellaneous Taxes Act 1976 and the Miscellaneous Taxes
(Rates) Xxx 0000, respectively, or the port fees under the Marine and Ports
Authority (Port Dues) Regulations 1969 shall be binding on the Company until
twelve (12) months after notice of such increase shall have been given to the
Company by or on behalf of the Government.
4. If the Company shall at any time give notice to the Government of
its intention to withdraw the Vessel without substituting an alternative vessel
under the provisions of Clause 2 hereof or if the Vessel does not make three or
more consecutive visits in accordance with the terms of this Agreement without
the consent in writing of the Government or, without such consent misses five or
more of such visits during any one calendar year, the Government shall, without
prejudice to any other rights it may have under the terms of this Agreement or
at law, be entitled to terminate this Agreement by giving notice to the Company.
Notwithstanding the foregoing, the Company shall not have violated this Clause 4
if its failure to visit the Dockyard is due to an act of God, war, riot, civil
commotion, strike, lock-out or other force majeure (being an event outside the
reasonable control of the Company).
5. (a) If during the Term of this Agreement the Government has
reasonable and proper cause to claim, and does claim, that the quality of the
service and equipment provided by the Company under the terms of this Agreement
have deteriorated in a material respect (fair wear and tear of equipment
excepted), it shall promptly give written notice thereof to the Company giving
reasons for any such claim.
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(b) The Company agrees that it will within ninety (90) days, if it
accepts the claim, commence and diligently prosecute to completion reasonable
measures to correct such deterioration or, if it does not accept the claim,
discuss with the Government how to resolve the matter complained of and, failing
agreement thereon either party shall be entitled to refer the dispute to
arbitration as provided in Clause 8 hereof and the decision of the arbitrator or
arbitrators shall be final binding and conclusive. Provided, however that a
delay in or failure by the Company to so commence or diligently prosecute to
completion such measures shall not constitute a default or breach under this
Agreement to the extent such delay or failure is occasioned by an act of God,
war, riot, civil commotion, unavailability or embargo of materials or equipment,
strike, lockout, or other force majeure (being an event outside the reasonable
control of the Company).
6. (a) If during the Term of this Agreement, the Company has reasonable
and proper cause to claim, and does claim, that the berth or any alternative
berth or safe anchorage available to it is unsafe or unsuitable in a material
respect or that the facilities provided or agreed to be proved by the Government
have deteriorated in a material respect, the Company shall promptly give written
notice thereof to the Government giving reasons for any such claim.
(b) The Government agrees that it will within 90 days, if it accepts
the claim, take all reasonable measures to remedy the matters complained of or,
if it does not accept the claim, discuss with the Company how to resolve the
complaint and, failing agreement thereon, either party shall be entitled to
refer the dispute to arbitration as provided in Clause 8 hereof and the decision
of the arbitrator or arbitrators shall be final binding and conclusive.
Provided, however that a delay in or failure by the Government to so commence or
diligently prosecute to completion such measures shall not constitute a default
or breach under this Agreement to the
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extent such delay or failure is occasioned by an act of God, war, riot, civil
commotion, unavailability or embargo of materials or equipment, strike, lockout,
or other force majeure (being an event outside the reasonable control of the
Government).
7. Should this Agreement be, for any reason terminated by the Company,
the Company shall pay to the Government by way of liquidated damages, and not as
a penalty, and as complete remedy therefor, a sum equal to the amount that would
have been payable to the Government under the provisions of Clause 3(a) of this
Agreement as if the Company had failed to provide a Vessel to call at Bermuda
for a period equal to the lesser of the balance of the Term or of two (2) years
following the date of such termination. Notwithstanding the foregoing, in the
event the Company determines during the first year of the Term that its
operation of the Vessel is not successful, it shall notify the Government on or
before August 15, 2000 and the parties shall modify this Agreement to achieve a
resolution to such problem.
8. In the event of a reference to arbitration pursuant to the
provisions of Clause 5 or 6 of this Agreement, the same shall be submitted to
arbitration by three (3) arbitrators, one to be chosen by the Government, one by
the Company and the third to be appointed by the President for the time being of
the London Maritime Arbitrators Association from its members. Such arbitration
shall be conducted in Bermuda in accordance with the Bermuda International
Conciliation and Arbitration Xxx 0000 or any re-enactment or statutory
modification thereof for the time being in force to the extent consistent with
this clause. The party desiring arbitration shall serve upon the other party
written notice of its desire, specifying the issues to be arbitrated and the
name of the arbitrator whom it appoints. Within fourteen (14) days after receipt
of notice of such demand for arbitration, the other party shall in turn appoint
an arbitrator and give notice in writing of such appointment to the party
demanding an arbitration. If a party fails to appoint an arbitrator as aforesaid
within fourteen (14) days following receipt of notice of demand for arbitration
by the other party, the party failing to appoint
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an arbitrator shall be deemed to have accepted as its own arbitrator the
arbitrator appointed by the party demanding arbitration and any arbitration
shall proceed before the two remaining arbitrators who, in such event, shall
constitute the arbitration Tribunal.
9. The Company acknowledges that it is in the final stages of
negotiations with Apple Vacations ("Apple") to formalize Apple's role in the
Vessel's Bermuda operation. In the event such arrangements are not consummated,
the Company shall enter into a marketing arrangement with another comparable
company to assure that the Company fully meets its obligations under this
Agreement. The Company shall advise the Government of the name of the company
whom it engages to assist in the marketing of the Bermuda operation as soon as
such engagement is finalized, and shall obtain the written approval of the
Minister of Tourism of such engagement, which approval shall not be unreasonably
withheld. The Government consents to Apple's (or such other company's)
fulfillment of some of the Company's obligations under this Agreement including
the development of the "cruise and stay" program, the provision of charter
flights and the marketing of cruises aboard the Vessel to Bermuda; provided,
however, that the Company shall remain primarily responsible for fulfilling all
of its obligations under this Agreement.
10. This Agreement:
(a) shall inure to the benefit of and be binding on the Company and
its successors and assigns.
(b) shall be governed by and construed according to the law of
Bermuda.
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(c) shall be subject to the grant of a permit by the Minister
responsible for Tourism under the provisions of the Passenger Ships Xxx 0000,
such grant of a permit not to be unreasonably withheld, and the payment of any
fee which shall from time to time be properly charged by regulation and the
observance and performance of the conditions set out in such permit.
11. Neither the Company nor the Government shall be entitled to assign,
underlet or dispose of the benefits accruing to it under this Agreement or any
part thereof without the previous written consent of the other party, such
consent not to be unreasonably withheld, except that the Company shall be
permitted to assign responsibilities to Apple (or to another company with whom
it may enter into a marketing arrangement) in accordance with Clause 9, provided
that the Company has obtained the approval of the Minister of Tourism in
accordance with Clause 9.
12. The Government hereby irrevocably and unconditionally:
(a) agrees with the Company that should the Company bring legal
proceedings against the Government or its property or assets in relation to its
obligations under this Agreement it will not claim immunity for such assets;
(b) waives any such right of immunity which it or its property or
assets now has or may hereafter acquire; and
(c) consents generally in respect of any such proceedings to the
giving of any relief or the issue of any process in connection with such
proceedings including, without limitation, the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended use) or any
order of judgment which may be made or given in such proceedings.
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13. This Agreement may be executed in any number of counterparts each
of which shall constitute one and the same document.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
signed by their duly authorized representative on the day and year first before
written.
THE MINISTER OF TOURISM, FOR AND ON
BEHALF OF THE GOVERNMENT OF BERMUDA
By: Illegible Witness:
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Name: /s/ Xxxx X. Xxxxxxxx
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Title: Minister of Tourism Name: Xxxx X. Xxxxxxxx
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FOR CROWN CRUISES LIMITED
By: /s/ Xxxxxxxxx X. Xxxxx Witness:
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Name: Xxxxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxxxxxxx
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Title: CEO Name: Xxxxxx Xxxxxxxxxxx
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