COMMONWEALTH OF THE BAHAMAS
New Providence
DATED the 3rd day of May, 2004
BETWEEN:-
THE GOVERNMENT OF THE
COMMONWEALTH OF THE BAHAMAS
and
XXXXXXX INTERNATIONAL LIMITED
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SUPPLEMENT
TO
HEADS OF AGREEMENT
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COMMONWEALTH OF THE BAHAMAS
New Providence
THIS SUPPLEMENT TO HEADS OF AGREEMENT is made the 3rd day of May, 2004.
BETWEEN :
(1) The Government of the Commonwealth of The Bahamas represented herein by, XXXXXXX MAJOR, Secretary of
the National Economic Council, (hereinafter called "the Government") and;
(2) XXXXXXX INTERNATIONAL LIMITED a company incorporated under the laws of and having its registered office
in the Commonwealth of The Bahamas, to include its relevant subsidiaries and affiliates at every tier,
represented herein by XXXXXX X. XXXXXXX, Chief Executive Officer (hereinafter called "Xxxxxxx").
RECITALS
WHEREAS : -
A. The Government and Xxxxxxx are parties to a Heads of Agreement dated the 26th day of May, 2003 ("the
2003 HOA"). Unless otherwise defined herein, all capitalized terms used in this Supplement shall have
the meanings given to them in the 2003 HOA, and any paragraph references shall be references to
paragraphs of the 2003 HOA unless the context otherwise requires;
B. Subsequent to the 2003 HOA, Xxxxxxx has substantially increased the proposed scope of Phase III, and in
consideration thereof the Government has agreed to amend certain of the incentives and concessions
contained in the 2003 HOA as hereinafter contained.
NOW THIS SUPPLEMENT WITNESSETH in consideration of the premises as follows:-
1. INCREASE OF INVESTMENT SCOPE
1.1 In respect of Phase III, Xxxxxxx hereby agrees to the following increases in both investment and scope:
1.1.1 To increase from US$600 million to US$1.0 billion the minimum amount to be spent on Phase III;
1.1.2 To increase the number of hotel rooms to be included in the New Hotel and Facilities from a
minimum of 1,000 to a minimum of 1,500;
1.1.3 To increase the convention facilities expansion from 50,000 square feet to at least 100,000
square feet;
1.1.4 To increase the size of Marina Village from 20,000 square feet to 65,000 square feet;
1.1.5 To increase the number of permanent jobs for Bahamians to be created pursuant to paragraph
1.1.4 of the 2003 HOA from a minimum of 2,000 to a minimum of 3,000;
1.1.6 To construct 200 2-bedroom Units in a new timeshare resort development ("Harborside Phase III")
which would commence when Harborside Phase II is 75% sold out, which Xxxxxxx anticipates to be
by the end of the first quarter of 2008. Harborside Phase III shall be an element of Phase
III-B, and for the purposes of the term `substantial completion of Phase III' as defined in the
2003 HOA, it shall not be required that Harborside Phase III be open for business.
1.2 Paragraph 11.2 is hereby amended to refer to the sum of $1.0 billion instead of $600 million, and by
the addition of a new paragraph 11.3, as follows:
"11.3 If requested by the Government, Xxxxxxx shall provide reasonable evidence in support of the
amount of dollars actually invested in, or committed to, Phase III.";
1.3 It is expected that the construction period referred to in paragraph 1.2.2 of the 2003 HOA will be 24
months;
1.4 Xxxxxxx and the Government will mount a joint initiative to accelerate the training contemplated by
paragraph 6.2 (together with the training programmes contemplated by paragraph 6.5 defined as "the
Training Initiative")
1.5 Xxxxxxx will increase the sum to be contributed to community programmes pursuant to paragraph 14.2 to
$5 million. The additional $3 million contribution shall be spent as to $1 million towards each of the
Bay Street Redevelopment Project, the Xxxxxxx Heritage Project and the Training Initiative.
1.6 The scope of all other aspects of Phase III shall remain unchanged.
2. REVISION OF INCENTIVES
2.1 In consideration of the substantial increases in scope and investment set forth herein, the Government
hereby agrees to the following revisions of the incentives provided by the 2003 HOA:
2.1.1 The 11-year period referred to in paragraph 3.2 is hereby extended to expire at the end of 2024;
2.1.2 Paragraph 3.3 is deleted in its entirety;
2.1.3 The number of new work permits referred to in paragraph 6.3 are hereby increased from 25 to 50;
2.1.4 The joint marketing agreement reflected in paragraph 8 is hereby extended from 5 years to 8 years;
2.1.5 The concessions granted by paragraph 5 in respect of Harborside Phase II are hereby extended to
Harborside Phase III.
2.2 In light of the scope, complexity and accelerated schedule of Phase III, the parties recognize that it
will be necessary for many of the non-Bahamian contractors working on Phase III to work on several
different aspects of Phase III, under multiple contracts and, at times, simultaneously. The Government
hereby confirms that its undertakings to facilitate the grant of work permits, business licences, and
other necessary Government or Government agency approvals will be exercised to accommodate this fact.
3. PROMOTION OF BAHAMIAN ENTREPRENEURSHIP
In further pursuance of the agreements contained in paragraph 6 of the 2003 HOA, Xxxxxxx agrees to use
reasonable efforts to promote opportunities, where appropriate, for qualified Bahamian entrepreneurs in the
development and operation of Phase III.
4. FURTHER ASSURANCE
The parties to this Supplement will do all acts and things and sign and execute all documents and deeds
requisite for the purpose of implementing the terms of this Supplement in such form and to such effect as the
other party may reasonably require.
5. MUTUAL WARRANTY AND ACKNOWLEDGMENT
Each of the parties warrants its power and authority to enter into this Supplement.
6. PREVIOUS HEADS OF AGREEMENT
Save as amended herein, the remaining terms and conditions of the 2003 HOA shall remain in full force and effect
and without any other amendment or modification thereto. The term "Phase III" shall henceforth include the
expansions and additions referred to herein.
7. GOVERNING LAW AND JURISDICTION
This Supplement shall be governed by the laws of the said Commonwealth of The Bahamas and in the event that any
suit or legal action is commenced by either party, the other party agrees, consents and submits to the
exclusive, jurisdiction of the courts of the said Commonwealth of The Bahamas.
THE GOVERNMENT OF THE COMMONWEALTH OF THE BAHAMAS
By :
/s/ Xxxxxxx Major
Name: Xxxxxxx Major
Title: Secretary of the National Economic Council
XXXXXXX INTERNATIONAL LIMITED
By :
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
