Agreement of Permission for Selling Duty-Free Merchandise
in Bangkok International Airport and Regional Airports
Agreement No. 3/2545
This Agreement is made at the Airports Authority of Thailand on
February 12, 2001, between the Airports Authority of Thailand, by Flight
Lieutenant Usar Borisuth, Deputy Managing Director acting for Managing Director
of the Airports Authority of Thailand, hereinafter called "AAT" of one part,
and King Power Duty Free Co., Ltd., registered as a juristic person
Company Limited under the Civil and Commercial Code, with the head office at No.
989, 26th-27th Floors, Siam Tower, Rama I Road, Pathum Wan Sub-district, Pathum
Wan District, Bangkok Metropolis, by Mr. Viratana Suntaranond, the person
empowered to enter juristic act binding King Power Duty Free Co., Ltd. according
to the Certificate No. 761, dated January 18, 2001, issued by the Office of
Partnership/Company Registration, Bangkok Metropolis, hereinafter called the
"Operator" of the other part..
AAT and the Operator agree as follows:
1. Business Operation
AAT agrees to grant permission and the Operator agrees to receive the
permission to sell duty-free merchandise at Bangkok International
Airport and regional airports under the jurisdiction of AAT, comprising
Chiang Mai Airport, Hat Yai Airport and Phuket Airport under the terms
and conditions of this Agreement, for a period of 5 years, from January
1, 2002 to December 31, 2006.
In case the New Bangkok International Airport (Nong Xxx Xxx Airport) is
inaugurated before the expiry of the Agreement stated in the first
paragraph, both parties agree that the business operation under this
Agreement shall be terminated on the date of the inauguration of the
New Bangkok International Airport. Either party cannot demand
compensation from the other party due to the Agreement termination
before the scheduled expiry.
The inauguration date of the New Bangkok International Airport stated
in the second paragraph refers to the date on which the New Bangkok
International Airport is officially opened with a Notice to Airmen
(NOTAM).
2. Fee, Remuneration, Taxes/Duties, Other Expenses & Method of Payment
2.1 The Operator agrees to pay the fee for entering into the
Agreement, and the remuneration for receiving permission for
operating business of selling duty-free merchandise, under
this Agreement, to AAT, as follows:
2.1.1 The fee for entering into the Agreement, Bt8,334
(eight thousand three hundred and thirty-four Bath),
not including the value-added tax;
2.1.2 The Operator agrees to pay the remuneration for
receiving permission for selling duty-free
merchandise under this Agreement to AAT, on monthly
basis, at the amount equivalent to 15 (Fifteen)
percent of the total sales revenues of the duty-free
merchandise, before deduction of expenses, in that
particular month; the total remuneration in each year
shall not be less than the minimum remuneration,
specified for each year as follows:
Year 2002, from January 1, 2002 to December 31, 2002,
the operator agrees to pay the minimum remuneration
of Bt420,000,000 (four hundred and twenty million
Baht)
Year 2003, from January 1, 2003 to December 31, 2003,
the operator agrees to pay the minimum remuneration
of Bt435,000,000 (four hundred and thirty-five
million Baht)
Year 2004, from January 1, 2004 to December 31, 2004,
the operator agrees to pay the minimum remuneration
of Bt450,000,000 (four hundred and fifty million
Baht)
Year 2005, from January 1, 2005 to December 31, 2005,
the operator agrees to pay the minimum remuneration
of Bt485,000,000 (four hundred and eighty-five
million Baht)
Year 2006, from January 1, 2006 to December 31, 2006,
the operator agrees to pay the minimum remuneration
of Bt510,000,000 (five hundred and ten million Baht)
The monthly remuneration that the Operator has agreed
to pay AAT under this clause has not included the
value-added tax, which the Operator has the duty to
pay at the rate stipulated by law.
2.2 The Operator agrees to pay the remuneration under Clause 2.1.2
on a monthly basis and submit the value-added tax by the 20th
date of the following month, and enclose the total sales
revenue of duty-free merchandise for that month.
2.3 In case the total remuneration in one year that the Operator
pays is lower than the minimum remuneration that the Operator
agrees to pay for that year, the Operator shall pay the
missing remuneration to AAT in 30 days from December 31 of
each year.
2.4 The Operator agrees to be responsible for payment of the taxes
and/or other expenses related to the business operation under
this Agreement at the rates stipulated by law and/or set forth
in directives of AAT.
2.5 All payment under this Agreement shall be made at Finance
Division, Finance Department, of AAT. After the Operator has
made payment to AAT, a receipt shall be issued to the Operator
as evidence. The receipt shall have the signatures of the
Director, Finance Division, Finance Department, of AAT or the
designated person, jointly with the cashier of Finance
Division, Finance Department, of AAT or the designated person
who must be a financial staff of AAT.
If the Operator is in default of any payment under this
Agreement, the Operator consents to pay penalty to AAT at a
rate of 1.5 percent (one point five) per month of the
outstanding amount. A fraction of month shall be counted as
one month.
The Operator agrees that this clause is a separate part, and
with no effects to the right of AAT to terminate this
Agreement and claim for damages.
3. Duties and Responsibilities of the Operator
3.1 The Operator shall operate the business prescribed herein
only.
3.2 In operating the business under this Agreement, the Operator
agrees to invest in decoration of the premises which shall be
attractive and modern as well as acquiring articles and
equipment at the Operator's own expense.
3.3 The Operator shall not transfer the business under this
Agreement or permit a third party to operate the business,
either in part or in whole, unless a written permission has
been obtained from AAT first.
3.4 The Operator shall operate the business under this Agreement
with expertise, caution and competence in accordance with the
standards of this type of business, whereby the Operator shall
take into consideration AAT's reputation and image.
3.5 The Operator shall not use the words "Airports Authority of
Thailand," "AAT" or other words related to AAT or the logo or
xxxx of the Airports Authority of Thailand as his trading
name, characteristics or logo of the Operator's business or
juristic person name, to such an extent that it would be
mistaken as the business of AAT.
3.6 To sell duty-free merchandise under this Agreement that some
or all requires a license from an authority in accordance with
law, rules, or regulations of a relevant organization, the
Operator shall work to receive that license from the authority
in accordance with law, rules, or regulations of a relevant
organization.
3.7 In each accounting cycle each year, the Operator shall have
his licensed auditor to audit and certify the sales revenue of
the duty-free merchandise of that particular year before
deducting any expenses, and notify AAT in writing in 150 days
from the closing date of the Operator's accounting cycle at
the Operator's own expenses.
3.8 In operating the business under this Agreement, if any damage
occurred to the property or reputation of AAT, by an act of
the Operator or the person whom the Operator has appointed,
assigned, hired or requested to perform the works of the
Operator, the Operator shall be liable to that act as if he
did it himself and responsible for compensation of such
damage.
3.9 While operating the business under this Agreement, if such
serious crisis as war or riot occurs and causes the decrease
in the number of aircraft that may affect the sales revenue of
duty-free merchandise, the Operator may not be able fulfill
his promise to offer the minimum remuneration to AAT each year
according to Clause 2.1.2. In such a case, AAT and the
Operator shall negotiate to reach a new proper minimum
remuneration rate. AAT's decision shall be considered final
and the Operator cannot argue.
3.10 AAT reserves its rights to have its officers appointed,
assigned by AAT to supervise the Operator's business
enterprises, inspect the business facilities and check
evidences and documents concerning the sale of duty-free
merchandise as well as audit the Operator's books of account
from time to time at appropriate time. The Operator shall
facilitate AAT or AAT staff members.
3.11 To operate the business of duty-free merchandise, the Operator
agrees to handle and comply with the following:
3.11.1 Duty-free merchandise brought in for sale or stored
in the bonded warehouse shall have been licensed by
officers in accordance with the customs law.
3.11.2 The Operator shall open and close the business
facilities and be ready to sell duty-free merchandise
according to the following conditions: - Bangkok
International Airport: Open and close from 06.00 to
02.00 of the following morning each day. - At
regional airports, namely, Chiang Mai Airport, Hat
Yai Airport and Phuket Airport, the Operator shall
open his duty-free merchandise outlets 30 minutes
before the first flight arriving or departing that
airport and close one hour after the last flight
arriving or department that airport, each day.
3.11.3 The Operator shall have price tags of the duty-free
merchandise visibly displayed in Thai Baht and/or any
other currencies.
3.11.4 The Operator shall oversee and train his staff and
employees to dress and behave decently while working
the business facilities selling products or other
duties.
3.11.5 The Operator shall not put up any advertising signs
or boxes, except with written permission of AAT
beforehand.
3.11.6 Should there by any complaint regarding price or
quality of the merchandise, AAT reserves the right to
order the Operator to adjust the price and improve
quality of merchandise as AAT deems appropriate. In
this respect, AAT's decision shall be final.
4. Performance Guarantee
In entering into this Agreement, the Operator shall submit a
performance guarantee in cash or a Letter of Guarantee issued by a
local bank to AAT in advance on a yearly basis, for an amount
equivalent to 6 times of the monthly minimum remuneration (averaged
from the yearly minimum remuneration), including value-added tax. The
Operation shall submit the performance guarantee to AAT in advance at
least 30 days before business operation for each year.
AAT shall return the said Letter of Guarantee after the Operator has
been relieved from all obligations under this Agreement.
5. AAT' reservation of rights
Fixing the annual minimum remuneration that the Operator has to pay to
AAT according to the condition in Clause 2.1.2, AAT has calculated
based on the outlet space (including preorder space) in which the
Airport Duty Free Co.,Ltd, who is the original operator has made used
of them as of January 31, 2001. (the calculation has included space No.
3265/1 of 108.50 square meter, and space No. 3265 F/1 of 165.00 square
meters on the 3rd floor of the Departure Lounge, Xxxxxxxxxxxxx Xxxxxxxx
0, Xxxxxxx International Airport, and the Operator agrees to return the
said premises to AAT on the operation commencement date to turn them
into a passenger lounge and the remuneration will remain unchanged,
shown in the Operator's letter No. Khor Phor Dor 657/2543, dated
November 13, 2000.)
If on the date this Agreement goes into effect, the space becomes
larger or smaller than the one the Operator used to occupy, AAT
reserves its right to increase or reduce the annual minimum
remuneration rate as it deems appropriate.
6. Termination of Agreement
6.1 During the period of this Agreement, if AAT or the Operator
wishes to terminate the Agreement prior to the scheduled
expiry, either party is entitled to do so, provided that a
written notice must be given to the party at least 180 days in
advance. Thereby, both parties agree not to xxx or claim for
damage from each other .
In case the Operator terminates the Agreement, the Operator
must be free from any debts to AAT.
6.2 If there are reasonable grounds to believe that the Operator
shall not be able to operate the business successfully, or the
operator is in breach of any clauses herein, AAT is entitled
to terminate the Agreement; thereby the Operator shall be
subject to indemnity to AAT as well.
6.3 Each and every clause of this Agreement is deemed essential.
If it appears that the Operator acts or omits to act in
violation of or non-compliance with any clauses herein, or
becomes bankrupt, AAT is entitled to immediately terminate the
Agreement, claim for damage and forfeit the performance
guarantee.
This Agreement is made in duplicated copies. Both parties, having read
and understood it entire, hereunder sign their names and affix seal (if any) in
the presence of witnesses and each retaining one copy.
AAT The Operator
--- ------------
Flight Lieutenant.... Signed.... .... Signed....
(Usar Borisuth) (Mr. Viratana Suntaranond)
(Seal of King Power Duty Free Co.,Ltd.)
Witness Witness
------- -------
..... Signed .... .... Signed ....
(Mr. Sukhawat Chayakorn) (Xx. Xxxxxx Dechapanichkul)
