EXHIBIT 10.149
CASINO LEASE AND OPERATING MANAGEMENT CONTRACT BETWEEN
SOCIETE' D' ANIMATION ET DE LOISIRS TOURISTIQUES (S.A.L.T.)
AND CLEOPATRA PALACE LIMITED
CASINO LEASE AND OPERATING
MANAGEMENT CONTRACT
Societe d' Animation et de Loisirs Touristiques
(S.A.L.T.)
"OWNER"
CLEOPATRA PALACE LIMITED
"LESSEE"
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THIS DOCUMENT WITNESSETH,
ON THE ONE HAND, SOCIETE D' ANIMATION ET DE LOISIRS TOURISTIQUES (S.A.L.T.),
S.A. represented by Xx. Xxxxxxx X. XXXXXX, acting as the chairman of the board
of directors, domiciled in Xxxxx, Xxxxxxxxx xx Xxx - Xxxx X - App. B 32, Xxx
Xxxxxx du Lac - Tunis hereinafter called "The Owner"
ON THE OTHER HAND, CLEOPATRA PALACE LIMITED, Dublin, Ireland, represented by its
General Manager Xx. Xxxxxxx XXXXXXXX hereinafter called "The Lessee"
AND XXXX XXXXXXX'X XX, INC., Guarantor, represented by Xx. Xxxx X. XXXX.
WHEREAS, Owner is the present owner of (1) casino, showroom, now under
construction (the Casino area) as more fully described in Exhibit A which is
incorporated by reference, and
WHEREAS, Societe Touristique Tunisie Golfe (S.T.T.G.) S.A. represented by Xx.
Xxxxx XX XXXXXXX, acting as chairman of the board of Directors, domiciled in
Tunis, Rue Xxx Xxxxxxxx No 8, Tunisia, is the owner of a hotel of six hundred
and thirty (630) beds, two (2) tennis courts, a shopping center, two hundred and
fifty (250) apartments, convention facilities and entertainment, sport and
health center area mentioned above and as more fully described in exhibit B
which is incorporated by reference.
WHEREAS, Owner presently has an agreement in principal which will allow it to
obtain a governmental licence or permit which legally authorizes it to operate
and maintain a gaming casino with slot machines, table games and video machines
in Tunisia (the "Gambling License") subject to compliance by Lessor and by
Lessee with all applicable Tunisian laws and regulations; and
WHEREAS, the parties hereto desire to enter into this Lease for the casino on
which Lessee shall operate (The "Casino") with the particular location of the
casino (the "Casino area") being more fully described in Exhibit A.
NOW THEREFORE, in consideration of the covenants and conditions here in to be
kept and performed by the parties hereto, and other good and valuable
consideration, the receipt and sufficiency whereof is hereby acknowledged, the
following shall be, and hereby is understood and agreed:
ARTICLE 1 : Lease. Owner does hereby lease the casino and casino area to Lessee
for a fixed rental of three million dollars US ($ 3,000,000) per annum, payable
quarterly in arrears ("Rent")
ARTICLE 2 : Operation. Lessee shall manage the Casino by and through experienced
operators, reasonably acceptable to Owner. Lessee shall have full and complete
control of the operation of the casino, subject only to the terms and conditions
of this agreement.
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ARTICLE 3 : License. The Lessee shall obtain the Gambling License from the
Tunisian Authority. Owner shall provide the necessary assistance to Lessee to
obtain and maintain the gambling License for and during the entire term of this
Agreement, and Owner hereby authorizes the Lessee to operate the casino during
the term of this Agreement in accordance with the provisions of the Gambling
License, the laws of Tunisia, and the continuation of this Agreement and
Lessee's and Lessor's obligations hereunder are subject to Lessee obtaining and
maintaining in effect, the Gambling license.
ARTICLE 4 : Compliance. Lessee shall comply with the laws of Tunisia to operate
the casino under the Gambling License in accordance with the terms of this
Agreement.
ARTICLE 5 : Term. This Agreement is considered to have come into force
immediately upon signature by the parties. The initial term of this Agreement
shall be twenty (20) years, commencing on the date (1st January 1995), shall
expire on the last day of the twentieth year, (The "Initial Term"). Three months
before the expiry of the initial period, the Owner and the Lessee may inform
each other of their intention, either to prorogate the lease or to terminate it.
If no such notice is served, the present Agreement shall be renewed for a ten
year option period.
Subject to the Licensing provisions referenced below, this Agreement shall be
automatically renewed for two (2) successive five (5) year terms, unless same is
terminated by Lessee upon written notice to owner ninety (90) days in advance of
the expiration of the initial term, or any of the additional five (5) year term.
In the event the casino area is not ready for occupancy by (1st of July 1996)
Lessee may terminate this agreement and receive a return of the full Deposit
made by him to the owner plus interest at seven and one half percent (7 1/2 %)
per annum, or if premises are not ready at the said date, Lessee is entitled to
complete at his expenses and with hold funds from rent until repaid.
ARTICLE 6 : Surrender at Termination. At the expiration of the term of this
Agreement, or upon the earlier termination thereof, Lessee shall surrender and
return the casino and casino area in the condition thereof existing at the
commencement of the term, ordinary wear and tear, and damage by fire or other
casualty, excepted. Provided, Lessee shall be entitled to retain all of its
furniture, gambling machines, equipment, records, supplies, inventories and
other personal property utilized in the operation of the casino. It is
understood that anything supplied or paid by the Lessee for the performance of
the casino operation shall be his property.
ARTICLE 7 : Operating Capital. Lessee shall provide the appropriate amount of
funds to equip and operate the casino during the term of this Agreement, in
addition to the Deposit referenced below. The Lessee shall exercise reasonable
skill, care and diligence in the performance of his obligations under this
Agreement.
ARTICLE 8 : Additional Rent. The Rent shall increase in the third (3rd) year of
the commencement of the initial term by Three Hundred Thousand Dollars ($
300,000.00) per year (which is an additional $ 75,000 per quarter), and shall
increase by an additional Three Hundred Thousand Dollars per year ($ 75,000
maximum per quarter) each year thereafter, until the rent reaches a maximum of
Five Million One Hundred Thousand Dollars ($ 5,100,000.00) per year, which is
One Million Two Hundred Seventy-five Thousand Dollars ($ 1,275,000) per quarter
("Rent Ceiling"). When the Rent Ceiling is reached, there shall be no further or
additional rent increases.
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ARTICLE 9 : Books and records. Lessee shall be responsible for the maintenance
of such records and books of account as may reasonably reflect the operation of
the casino and shall preserve such records and books of account during the term
of this Agreement and shall permit Owner (or its authorized representatives) and
auditors to examine and audit such records and books of account at any and all
reasonable times. Lessee shall cause the books and records of Lessee to be
audited annually, at Lessee's expense, and shall furnish owner with a copy of
the audit, but Owner shall not be required to accept the audit and may audit or
examine any of Lessee's books and records, on reasonable notice to Lessee, at
Owner's expense.
ARTICLE 10 : Taxes. Lessee agrees to pay all taxes, licenses, charges and fees
levied or assessed on Lessee by any governmental authority in connection with/or
incident to the performance of this Agreement, Lessee agrees to require the same
agreements from any of its subcontractors
Lessee agrees to reimburse Owner on demand for all such taxes, fees licenses and
charges which Owner may be required or deem it necessary to pay on account of
the agents, employees and representative of Lessee or its assignees. Upon
demand, Lessee agrees to furnish Owner with the information required to enable
it to make the necessary reports and pay such taxes, fees, licenses and charges.
ARTICLE 11 : Furniture, Furnishings, Fixtures and Equipment
A- Owner shall, at its own expenses, complete and finish out the casino and the
casino area, decorated and fixtured, including, but not limited to, carpets and
drapes. This includes all costs of roads, adequate parking, access corridors,
walkways, landscaping and generally putting the building into such condition
that Lessee may commence its business activities. Such costs will not include
items specified in (B) below.
B- Lessee shall, at its sole expense, provide all gaming devices and relating
equipment necessary for the operation of the casino.
C- It is understood that any gaming devices and related equipment provided by
Lessee shall remain the property of the Lessee.
D- Lessee shall, at all times, keep and maintain the inside of the casino area
and the furniture, furnishings, fixtures and equipment of the casino in good
order and repair, reasonable wear and tear excepted. Owner will allocate the
maximum possible parking for the casino, and the parking attendants for casino
parking shall be the responsibility of Lessee.
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ARTICLE 12 : Conduct of Business
A- During the term of this Agreement, the casino and Gambling License shall be
used solely for the purposes of this Agreement. Lessee shall manage and operate
the casino to the best of its ability; and in a proper, efficient and
businesslike manner; and to the intent that the ambience of a high class casino
shall at all times be maintained. Lessee shall keep the casino open and
available for business on all days for the months of January through December
(twelve [12] months) not less that eight (8) hours per day, but only during the
times when there is sufficient business to justify the operation, except when
prevented by force majeure. The phrase "prevented by force majeure", as used in
this Agreement, shall be deemed to mean prevented by government regulation, wars
or civil strife which might impede travel to and from Tunisia; riots; civil
commotion; war; hostilities, invasion, act of foreign enemies, rebellion,
revolution, insurrection, and any operation of the forces of nature against
which precautions could not reasonably have been expected to have been taken.
Rent under this Agreement shall xxxxx so long as casino operations are prevented
by force majeure, provided that if the force majeure continues for six (6)
months, Lessee may at its convenience terminate its Agreement.
B- Lessee shall employ and train all employees of the casino. All such employees
shall be the employees of the Lessee. All employees of the casino shall be
neatly and cleanly attired and if any of the casino's employees shall in any way
bring discredit upon the country of Tunisia or any city therein, they shall be
immediately discharged.
C- Lessee shall comply, and the casino shall be operated so as to comply, with
all laws and regulations presently in force or subsequently enacted by Tunisia.
D- Lessee shall operate and provide in the casino all casino facilities and
casino services normally operated and provided in casinos of comparable class.
E- Lessee shall be entitled to operate liquor bars within the casino area for
the purpose of selling drinks to patrons of the casino as well as dispensing
complimentary beverages.
ARTICLE 13 : Relationship of the parties. Nothing herein contained shall be
construed as effecting a co-partnership or joint venture between the parties,
and it is the express intent of the parties that the relationship between them
shall be solely and exclusively that of Landlord and Tenant, under the terms and
conditions hereof.
ARTICLE 14 : Hold Harmless. Owner and Lessee shall at times during the term of
this agreement defend, indemnify and hold harmless each other from any liability
or penalty which may be imposed by reason of act or omission of a third party,
and also from all claims, suits or proceedings that may be brought against owner
or Lessee with respect to such clause.
ARTICLE 15 : Insurance. During the term of this Agreement, Lessee shall
maintain, at Lessee's expense, in a responsible insurance company or companies
reasonably satisfactory to owner, personal injury and property liability
insurance with coverages of no less than One Million Dollars ($ 1,000,000.00)
for personal injury and no less than Five Hundred Thousand Dollars ($
500,000.00) for property damage, and Owner shall be listed as an additional
insured by such policies as workmen's compensation or similar insurance as may
be required by applicable laws.
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ARTICLE 16 : Untenantability and Hostilities. If, during the term of this
Agreement, any of the casino are made wholly untenantable by fire or other
casualty so that said premises cannot be properly utilized as a casino facility,
then Lessee's obligations (including the obligation to pay rent) shall xxxxx
during such period, until such time as the operation of the casino may resume.
If such condition continues for more than twelve (12) months, then the Lessee
may terminate this agreement.
ARTICLE 17 : Right of Inspection. Owner shall have the right to enter upon
and/or inspect any part of the casino area at any time and may also inspect any
of the gambling equipment, other special equipment, bankrolls, safe, or accounts
used and maintained on said casino area at any time; provided, however, such
visits or inspections shall be conducted with as little disturbance as possible
to the operations of the casino and in the company of a representative of
Lessee.
ARTICLE 18 : Assignment. Lessee agrees not to sublease or assign this Agreement
or its interest in the casino, and any of its rights and privileges under this
Agreement without the written prior consent of Owner which shall not be
unreasonably withheld.
ARTICLE 19 : Appearance of Premises. It is expressly understood and agreed that
the appearance of the casino and the casino area which have been provided by the
owner at its expense, including the placing of signs and the general conduct of
the business on the casino area, will have a material effect on the reputation
of owner. The owner therefore hereby expressly reserves the right to control and
regulate the appearance of the casino and the casino area at all times during
the terms of this Agreement, including, but not limited to the regulation of any
signs, advertisements or other promotional material used in connection with the
operation of the casino. Lessee shall have the right to advertise the casino but
the format of the advertising shall be in keeping with the dignity of the
casino, and the owner shall not unreasonably withhold its approval of the form
of such advertising.
ARTICLE 20 : Entertainment. Lessee shall have the right to decide if any
entertainment is needed in the casino; Lessee shall be responsible for the
payment of all entertainment in the casino area
ARTICLE 21 : Condition to owner's performance.
As a condition precedent to owner's performance, Lessee will provide evidence
that it has at least Six Million Dollars ($ 6,000,000.00) of working capital,
and that it is capable of working under this Agreement.
ARTICLE 22 : Default.
22.1 Default by lessee :
If, at any time during the term of this Agreement, one or more of the following
events shall occur, owner may forthwith terminate this Agreement.
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A. Lessee shall fail to make any payment due under this Agreement on
or prior to the date upon which it is due, and such failure shall continue for
thirty (30) days after written notice;
B. Lessee shall fail or refuse to fully perform or comply with any
other agreement, covenant, or undertaking, which is required by this Agreement
to perform or comply with, or shall otherwise violate any provision hereof, and
such failure shall continue for thirty (30) days after written consent.
Provided that, if lessee is diligently attempting to cure a non-monetary default
but cannot reasonably do so in thirty (30) days, the cure period shall continue
as long as reasonably necessary for lessee to cure the non-monetary default, in
the exercise of reasonable diligence.
22.2 Default by owner :
The Lessee may by written notice to the owner terminate this agreement if he
considers that the owner is not discharging his obligations under this
agreement, stating the reasons therefore. In the event that the owner does not
respond to such notice within fifteen (15) days, the Lessee may deem the
agreement terminated, or at his convenience the lessee may correct defaults at
the Owner's expense and withhold rents until Lessee has been repaid Lessee's
costs.
22.3 Claims for default :
Any claim for damages arising out of default and termination shall be agreed
between the Owner and the Lessee or, failing agreement, shall be referred to
arbitration in accordance with clause 25 of this agreement.
ARTICLE 23 : Notices. Unless a party hereto shall in written direct otherwise,
all notices to be served and rendered if sent by Registered Mail directed to:
OWNER : Society d'Animation et de Loisirs Touristiques
"S.A.L.T."
Residence du Lac Bloc B - Appt. B 00
Xxx Xxxxxx xx Xxx
Xxxxx, XXXXXXX
COPY TO :
LESSEE : Cleopatra Palace Limited
x/x Xxxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxx
00 Wimbledon Parkside
London SW19 5LN, ENGLAND
Any party may change its address for notice by written notice and such change
shall be effective upon actual receipt of same.
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ARTICLE 24 : Governing Law. This agreement is subject to and shall be
interpreted in accordance with the laws of Tunisia.
ARTICLE 25 : Arbitration. Any dispute between Owner and Lessee arising from the
execution or interpretation of the provisions of this Agreement, if not settled
amicably, shall be settled by an arbitral tribunal consisting of three
arbitrators whose award shall be final and enforceable.
Each of the above mentioned parties shall appoint an arbitrator and the two
arbitrators, before proceeding to arbitration, shall appoint a Chairman who
shall be the Chairman of the arbitral tribunal. If the two arbitrators as
mentioned above fail within a delay of 30 days after their appointment to
appoint the Chairman, then each party may request the first President of the
Appeal Court of Tunis to appoint such chairman. The same procedure shall apply
if either party abstains from appointing its arbitrator.
- The arbitration shall be conducted in Tunisia.
ARTICLE 26 : Promotional Material Lessee will annually prepare a specification
book for a program of promotional and tourist activities.
ARTICLE 27 : Other obligations.
Xxxx Xxxxxxx'x XX, Inc. shall secure and guarantee Lessee's performance under
this Agreement.
Lessee shall provide a yearly revolving Letter of Credit so as to maintain the
security for Lessee's performance to Owner under this agreement for one year's
rent including additional as established by the Agreement.
In the event that payments are not made in accordance with this Agreement,
Lessee shall instruct the bank holding the common stock to sell it and pay the
proceeds to Owner as liquidated damages. If Lessee fails to instruct the bank
holding the common stock within a delay of fifteen (15) days, Owner shall be
entitled, upon sending a notice to both Lessee and the bank, to authorize the
bank to proceed to the sale of the said common stock.
During the period of lease of the Casino as defined under this Agreement, should
the market value of the stock drop below the outstanding balance due, then in
that event Lessee commits itself to increase the number of shares of XXXX stock
in escrow to the amount of shares necessary to maintain a market value equal to
the outstanding balance due.
ARTICLE 28: Language and interpretation.
The conditions of the Agreement are drawn in English. It's interpretation should
be in conformity with the parties' intention and the technical meaning. The
headings in the agreement shall not be used in its interpretation.
The singular includes the plural, the masculine includes the feminine, and
vice-versa where the context requires.
If there is a conflict between provisions of the agreement, the last to be
written chronologically shall prevail, unless otherwise specified.
ARTICLE 29 : Alterations.
Should circumstances arise which call for modifications of the agreement, these
may be made by mutual consent given in writing. Proposals in this respect from
any party shall be given due consideration by the other party.
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ARTICLE 30 : Savings Clause.
In the event any provision of this Agreement is inconsistent with or contrary to
any applicable law, rule, regulation, code or order said provision shall be
deemed to be modified to the extent required to comply with said law, rule,
regulation, code or order and as so modified, said provision and this Agreement
shall continue in full force and effect.
IN WITNESS WHEREOF, This Agreement is executed in duplicate copies, of like
terms and effect, on this day ---------- of ----------------------.
LESSEE : /s/ Cleopatra Palace Limited
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CLEOPATRA PALACE LIMITED
OWNER : /s/ Societe D'Animation et de Loisirs
Touristiques "S.A.L.T."
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SOCIETE D'ANIMATION ET DE LOISIRS
TOURISTIQUES "S.A.L.T."
GUARANTOR : /s/ Xxxx Xxxxxxx'x XX, Inc.
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XXXX XXXXXXX'X XX, INC.
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