EXHIBIT 10.155
LETTER OF INTENT
BETWEEN:
Compagnie Monastirienne Immobiliere et Touristique S.A. 00, Xxx xx xxx Xxxx,
Xxxxx, Xxxxxxx, represented by Xx. Xxxxxxx Xxx Xxxxxxx, General, Manager
hereinafter called "The Owner".
AND,
Cleopatra Palace Limited, Flat 2 Chartwell House, 00 Xxxxxxxxx Xxxxxxxx Xxxxxx
XX00 0XX Xxxxxxx. Represented by Xx. Xxxxxxx Xxxxxxxx, President, hereinafter
called "Cleopatra".
The owner has an important development plan in SKANES, MONASTIR focused
basically on real estate, casino and hotel facilities.
The owner is ready to invest in the construction of a casino of approximately
3000 square meters that could be extended to 5000 square meters.
The owner is interested in leasing the casino under terms and conditions to be
agreed. Therefore the two parties have agreed as follows:
1-RESPONSIBILITIES OF THE OWNER:
The owner will bear all costs incurred in the interior construction and fitting
out of the casino building including exterior works such as the provision of
roads, adequate car parking space...and putting the building into such condition
that Cleopatra may immediately commence its business activities.
2-RESPONSIBILITIES OF CLEOPATRA:
Cleopatra will lease the casino for twenty (20) years renewable for two (2)
periods of five (5) years each; will manage and conduct the casino to profits to
the best of its ability and in a proper efficient and business like manner to
the intent that ambiance of a high class casino shall at all time thereafter be
maintained.
Cleopatra shall bear the cost of all equipment to be used for the purposes of
gaming, such equipment to include gaming tables, slot machines and related
equipment, including chips and tokens to be used for gaming.
Cleopatra shall bear the costs of close circuit television and computer
equipment. All such equipment shall remain at all times the property of
Cleopatra. Cleopatra will provide technical assistance including architectural
services and engineering consultation.
1
3-THE RENTAL AGREEMENT:
Cleopatra undertakes to pay the Owner an annual rental of:
-15% of the casino's cost incurred by the Owner for the first two (2) years -
plus 10% of the second year rental for the third year - plus 10% of the third
year rental for the fourth year - plus 10% of the fourth year rental for the
years 5, 6, and 7 - 25% of the casino's costs for the years 8, 9, 10, 11, 12,
13, 14 and 15. - plus 13% of the fifteen year rental for years 16, 17, 18, 19,
and 20.
Based on casino's cost of US $3,000,000 the annual rent will be as follows
Year 1...............................................450,000 US$
Year 2...............................................450,000 US$
Year 3...............................................495,000 US$
Year 4...............................................545,000 US$
Year 5...............................................600,000 US$
Year 6...............................................600,000 US$
Year 7...............................................600,000 US$
Year 8...............................................750,000 US$
Year 9...............................................750,000 US$
Year 10..............................................750,000 US$
Year 11..............................................750,000 US$
Year 12..............................................750,000 US$
Year 13..............................................750,000 US$
Year 14..............................................750,000 US$
Year 15..............................................750,000 US$
Year 16..............................................850,000 US$
Year 17..............................................850,000 US$
Year 18..............................................850,000 US$
Year 19..............................................850,000 US$
Year 20..............................................850,000 US$
The rental agreed will be payable in equivalent Tunisian Dinars in the first of
each quarter. Bearing in mind that the delivery of the casino by the Owner to
Cleopatra must be on the first of May, 1998,
Cleopatra shall pay the Owner the amount of 450,000 US$ prior to the opening of
the casino as part of the rent. Such payment shall be made in accordance with
the advancement of the casino construction.
2
These installments shall be delivered as follows in US $:
- 50,000 shall be paid after the work has started - 150,000 shall be paid after
the roof is installed - 150,000 shall be paid when the casino carpeting is
finished
- 100,000 shall be paid when Cleopatra accepts the casino as ready for use.
The payment will be reimbursed on four (4) years time as follows:
- 1st of May, 1999...................................100,000 US$
- 1st of May, 2000...................................100,000 US$
- 1st of May, 2001...................................125,000 US$
- 1st of May, 2002 ..................................125,000 US$
The Owner and Cleopatra will sign the lease agreement within one (1) month.
THE OWNER
/s/ Compagnie Monastirienne Immobiliere et Touristique S.A.
CLEOPATRA
/s/ Cleopatra Palace Limited
3
CASINO LEASE
COMPAGNIE MONASTIRIENNE IMMOBILIERE ET
TOURISTIQUE
"OWNER"
CLEOPATRA PALACE LIMITED
"LESSEE"
THE DOCUMENT WITNESSETH
ON THE ONE HAND, Compagnie Monastirienne Immobiliere et Touristique S.A. 00, Xxx
xx xxx Xxxx, Xxxxx, Xxxxxxx, represented by Xx. Xxxxxxx Xxx Xxxxxxx, General,
Manager hereinafter called "The Owner".
ON THE OTHER HAND, Cleopatra Palace Limited, Flat 2 Chartwell House, 00
Xxxxxxxxx Xxxxxxxx Xxxxxx XX00 0XX Xxxxxxx. Represented by Xx. Xxxxxxx Xxxxxxxx,
President, hereinafter called "The Lessee"
WHEREAS, the Owner has an important development plan in SKANES MONASTIR focused
basically on real estate, casino and hotel facilities
The Owner is ready to invest in the construction of a casino and approximately
3000 square meters that could be extended to 5000 square meters.
The Owner is interested in leasing the casino under terms and conditions to be
agreed. Therefore the two parties have agreed as follows:
WHEREAS, the parties hereto desire to enter into the 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 herein 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 the Casino area to Lessee for an annual
rental of: -15% of the casino's cost incurred by the Owner for the first two (2)
years - plus 10% of the second year rental for the third year - plus 10% of the
third year rental for the fourth year - plus 10% of the fourth year rental for
the years 5, 6, and 7 - 25% of the casino's costs for the years 8, 9, 10, 11,
12, 13, 14 and 15. - plus 13% of the fifteen year rental for years 16, 17, 18,
19, and 20.
Based on casino's cost of US $3,000,000 the annual rent will be as follows:
Year 1 450,000 US$
Year 2 450,000 US$
Year 3 495,000 US$
Year 4 545,000 US$
Year 5 600,000 US$
Year 6 600,000 US$
Year 7 600,000 US$
Year 8 750,000 US$
Year 9 750,000 US$
Year 10 750,000 US$
Year 11 750,000 US$
Year 12 750,000 US$
Year 13 750,000 US$
Year 14 750,000 US$
Year 15 750,000 US$
Year 16 850,000 US$
Year 17 850,000 US$
Year 18 850,000 US$
Year 19 850,000 US$
Year 20 850,000 US$
The rental agreed will be payable in equivalent Tunisian Dinars in the first of
each quarter. Bearing in mind that the delivery of the casino by the Owner to
Cleopatra must be on the first of May, 1998,
Cleopatra shall pay the Owner the amount of 450,000 US$ prior to the opening of
the casino as part of the rent. Such payment shall be made in accordance with
the advancement of the casino construction.
These installments shall be delivered as follows in US $:
- 50,000 shall be paid after the work has started - 150,000 shall be paid after
the roof is installed - 150,000 shall be paid when the casino carpeting is
finished
- 100,000 shall be paid when Cleopatra accepts the casino as ready for use.
The payment will be reimbursed on four (4) years time as follows:
- 1st of May, 1999 100,000 US$
- 1st of May, 2000 100,000 US$
- 1st of May, 2001 125,000 US$
- 1st of May, 2002 125,000 US$
ARTICLE 2: Operation:
Lessee shall manage the Casino by and through experienced operators, reasonable
acceptable to Own. Lessee shall have full and complete control of the operation
of the
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 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: Terms:
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 May, 1998), shall expire on the last day of the
twentieth year, (The "Initial Term "). Three months before expiry of the Initial
Term, the Owner and the Lessee may inform each other of their intention, either
to prorogate the lease or to terminate Initial Term. If no such notice is
served, the present Agreement shall be renewed for a five 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 to occupancy twenty-four (24) months
after commencement of the construction of the Casino, then, 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 and the said date, Lessee is entitled to complete at his expenses
and withhold 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 . The Lessee shall exercise reasonable
skill, care and diligence in the performance of his obligations under this
Agreement.
ARTICLE 8: 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 the Lessee's
books and records on reasonable notice to Lessee, at Owner's expense.
ARTICLE 9: 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.
ARTICLE 10: Furniture, Furnishings, Fixtures & Equipment:
A- Owner shall, at its sole expense, complete and finish out the Casino and
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 buildings 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.
ARTICLE 11: Conduct of Business:
A -Cleopatra will manage and conduct the casino to profits to the best of its
ability and in a proper efficient and business like manner to the intent that
ambiance of a high class casino shall at all time thereafter be maintained.
Cleopatra shall bear the cost of all equipment to be used for the purposes of
gaming, such equipment to include gaming tables, slot machines and related
equipment, including chips and tokens to be used for gaming.
Cleopatra shall bear the costs of close circuit television and computer
equipment.
All such equipment shall remain at all times the property of Cleopatra.
Cleopatra will provide technical assistance including architectural services and
engineering consultation.
B- During the term of this Agreement, the Casino and Gambling License shall be
used solely for the purpose 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 ambiance 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) no less than 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 reasonable 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.
C- Lessee shall employ and train all employees of the Casino. All such employees
shall be the employee 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.
D- 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.
E- Lessee shall operate and provide in the Casino all casino services normally
operated and provided in casinos or comparable class.
F - Lessee shall be entitled to operate service liquor bars within the Casino
area for the purpose of selling drinks to patrons of the Casino as well as
dispensing complimentary beverages.
ARTICLE 12: 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 13: Hold Harmless:
Owner and Lessee shall at all 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 for all
claims, suits or proceedings that may be brought against Owner or Lessee with
respect to such cause.
ARTICLE 14: Insurance:
During the term of this Agreement, Lessee shall maintain, at Lessee's expense,
in a reasonable insurance company or companies reasonably satisfactory to Owner,
personal injury and property liability insurance with coverage of no less than
$1,000,000.00 for personal injury and no less than $500,000.00 for property
damage, and Owner shall be listed as an additional insured by such policies of
workmen's compensation or similar insurance as may be required by applicable
laws.
ARTICLE 15: Untenantability and Hostilities:
If, during the term of this Agreement, any of the Casino area 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 16: 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 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 casino area at any time;
provided, however, such visits or conditions shall be conducted with as little
disturbance as possible to the operations of the Casino and in the company of
representative of Lessee.
ARTICLE 17: Assignment:
Lessee agrees not to sublease or assign Agreement or its interest in the Casino
or its interest in Casino, and any of its rights or privileges under this
Agreement without the written prior consent of Owner which shall not be
unreasonably withheld. Assignment of the present Agreement or the subcontracting
of the work or services to be performed hereunder, is so stated by the Owner
shall not relieve Lessee or its duties or conditions hereunder.
ARTICLE 18: Appearance of Premises:
It is expressly understood that the appearance of the Casino and the Casino area
have been provided by the Owner at its expense, including placing if signs and
the general conduit of the business on Casino area, will have a material effect
on the reputation of Owner. The Owner hereby expressly reserves the right to
control and regulate the appearance of the Casino and the Casino area and at all
times during the term of this Agreement, including but not limited to the
regulation of any signs, advertisement 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 19: Entertainment:
Lessee shall have the right to decide if entertainment is needed in the Casino.
Lessee shall be responsible for the payment for all entertainment in the Casino.
ARTICLE 20: Default:
Default by Lessee:
At any time during the term of this Agreement, one or more of the following
events shall occur, Owner may forthwith terminate this agreement.
Lessee shall fail to make any payment due under this Agreement prior to the date
upon which it is due, and such failure to continue for thirty (30) days after
written notice;
Lessee shall fail or refuse to fully perform or comply with this Agreement,
covenant, or undertaking, which is rendered 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 reasonable necessary for Lessee to cure the non-monetary default, in
the exercise of reasonable diligence.
ARTICLE 20.2: 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.
ARTICLE 20.3: 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 21: Notices:
Unless a party hereto shall in written direct other, all notices to be served
and rendered if sent by Registered mail directed to:
OWNER: Compagnie Monastirienne Immobiliere et Touristique S.A. 00, Xxx
xx xxx Xxxx, Xxxxx, Xxxxxxx
COPY TO:
LESSEE: Cleopatra Palace Limited, Flat 2 Chartwell House, 00 Xxxxxxxxx
Xxxxxxxx Xxxxxx XX00 0XX Xxxxxxx.
COPY TO:
Any party may change its address for notice by written notice and such change
shall be effective upon actual receipt of same.
ARTICLE 22: Governing Law:
This Agreement is subject to and shall be interpreted in accordance with the
laws of Tunisia.
ARTICLE 23: Arbitration:
Any dispute between Owner and Lessee arising from the execution or
interpretation of the provisions in this Agreement, if not settled amicable,
shall be settled by an arbitral tribunal consisting of three arbitrators whose
award shall be final and enforceable.
Each of the above mentioned party 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
abstain from appointing its arbitrator.
The arbitration shall be conducted in Tunisia.
ARTICLE 24: Promotional Material:
Lessee will annually prepare a specification book for a program of promotional
and touristic activities.
ARTICLE 25: Language and Interpretation:
The condition of the Agreement are drawn in English its interpretation should be
in conformity with the parties's 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
vise-versa where the context requires.
If there is conflict between provisions of the Agreement, the last to be written
chronologically shall prevail, unless otherwise specified.
ARTICLE 26: 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.
ARTICLE 27: Savings Clause:
In the event any provision of this Agreement is inconsistent with or contrary to
any applicable law, rule, regulation, code, or other, said provision shall be
deemed to be modified to the extend 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.
WITNESS WHEREOF, this Agreement is executed in duplicate of like terms and
effect, on this 7th day of July, 1996.
CLEOPATRA PALACE LIMITED
By: /s/ Cleopatra Palace Limited
COMPAGNIE MONASTIRIENNE IMMOBILIERE ET TOURISTIQUE
By: /s/ Compagnie Monastirienne Immobiliere et Touristique S.A.
