EXHIBIT 10.12
PACIFIC PAY VIDEO (HK) LIMITED
INSTALLATION AGREEMENT
This Agreement, between Pacific Pay Video (HK) Limited, a Company duly
incorporated in Hong Kong and having its principal place of business at 1428
Prince's Building, Central, Hong Kong ("PPV") and Shangri-La Hotel & Resorts,
15/F Nat West Tower Times Square, I Matheson Street, Causeway Bay, Hong Kong
("Hotel Group") sets forth the terms for installation and operation by PPV of
on-demand video systems and related services in the Hotel Group's individual
Hotel Properties ("Hotel").
WHEREAS:
(A) The Hotel operates a Hotel for the lodging of guests in separate,
private rooms and suites which are customarily available for overnight sleeping
accommodations ("Rooms").
(B) The Hotel wish to enhance the guest's stay by giving them the
opportunity to view prerecorded entertainment programs and movies ("Programs")
and standard off-air broadcast or cable television channels available to the
Hotel without special equipment ("Channels"), conveniently in the privacy of
their own Rooms using a system provided by PPV.
Now, therefore, the parties do hereby agree as follows:
1. ON COMMAND VIDEO SYSTEM
(a) System. PPV will design, construct and provide to the Hotel a
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System for operation in all Rooms of the Hotel. "System" will mean PPV's video
entertainment and interactive services system which allows guests at the Hotel
to access, at will from their individual Rooms, Programs and Channels for
display on television receiving sets ("TVs") in the Rooms. The System includes
(i) Programs, (ii) a remote control unit for each television set linked to the
System plus ten (10) spare units, (iii) an adequate number of video playback
devices, (iv) a front-desk personal computer and printer, and (v) all necessary
electronic, computer and switching equipment. The System does not include
necessary power, wiring, connections, or cooling facilities, which are to be
provided by the Hotel.
(b) Television Sets. At the Hotel's option, PPV will provide the
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Hotel with 21" TV's, fully installed. Those TV's will remain the property of PPV
and will be included within the definition of "System." Should the hotel
require, PPV will take possession of the Hotel's existing TVs. and dispose of
them. Should PPV be responsible for disposing of existing TVs, any salvage value
will belong to PPV. PPV will be responsible for maintaining the new television
sets. Such an option will require a change to the term of Agreement and changes
in other terms and conditions, to be attached to this agreement.
2. TERM OF THE AGREEMENT
The term of this Agreement will begin on the Term Commencement Date as
defined in Section 3(b) below and will continue for a period of five (5) years
(the "Term"). Thereafter the Term automatically will be renewed annually,
subject to the right of either party to terminate this agreement upon written
notice to the other given not less than one hundred eighty (180) days prior to
the date of such annual renewal. If Tvs are provided to the hotel, then the
Term will be extended to a period of seven (7) years.
3. INSTALLATION
(a) System Computer. At the Hotel's request and in lieu of the
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front-desk personal computer and printer included in the System for printing
vouchers for each rental of a movie by a guest, PPV will interface the System
computer to the Hotel' property management system ("PMS"). The interface will
permit the System to
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
automatically post Rental Fees (as defined in Section 5) to each individual
guest's bill or Room account and will permit the addition of any optional
services specified in Section 8. Hotel will supply PPV with necessary interface
information and/or ask its PMS vendor to cooperate with PPV. Any interface
protocol installation or maintenance charges imposed by the PMS software vendor
will be paid for by the Hotel.
(b) Access. The Hotel will provide such access as PPV may reasonably
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request to enable PPV to complete installation of the System, including without
limitation providing all the Hotel Facilities set forth in Attachment A and in
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reasonable time to allow PPV to complete installation. The Hotel will allow PPV
to have access (escorted or unescorted) to guest rooms for the purpose of
equipment installation at a rate of at least one hundred (100) rooms per day.
Failure to permit access at such rate will result in Hotel forfeiting to PPV the
first month's total commission as calculated pursuant to Section 5(d).
(c) Term Commencement Date. PPV will test the System to ensure
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functionality and upon the successful conclusion of such test PPV will deliver
to the Hotel a written statement acknowledging that the installation is complete
and the System is functional. Such statement will be attached hereto when
completed, and the "Term Commencement Date" will be the date of such statement.
(d) Revenue Date. The Hotel will begin the process of billing guests
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and generating revenue upon the installation of at least ten (10) guest rooms.
(e) Hotel's MATV System. PPV will pay up to US [***] for any
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necessary upgrades to the Hotel's Master Antenna TV("MATV") system which PPV
specifies as required for proper operation of the System. The Hotel will pay for
any additional cost above US[***]. wazzu PPV agrees that at Hotel's request
PPV will finance any such upgrades in excess of US[***] for Hotel by paying
for the upgrade and receiving Hotel's share of System Revenue until the full
cost is recovered. PPV will arrange for its installation contractor to deliver a
quotation to the Hotel for such upgrade work. Should the upgrade cost exceed
US[***] the Hotel may cancel choose to be excluded from Installation. PPV
guarantees that the installation of the System will not degrade the Hotel' MATV
system or impair the ordinary reception of broadcast programs or other services
on the MATV system. PPV will not remove from the installation site any MATV
hardware and equipment owned by Hotel which has been disconnected as a result of
the installation. Hotel will be responsible for storing or retaining such
hardware or equipment for future reinstatement of the original MATV system if
required.
4. MAINTENANCE
(a) PPV Maintenance. PPV will promptly provide all maintenance,
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repairs and replacement of materials and equipment necessary to ensure
satisfactory operation of the System, including satisfactory signal quality.
Such maintenance and technical assistance will be provided free of charge except
as provided in Section 4(e) or if occasioned by a breach by the Hotel of any of
its obligations as set out in this Agreement.
(b) Notification by Hotel. The Hotel will, at the Hotel's expense,
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use reasonable efforts to notify PPV by telephone of any failure of the System
or the System's functions in any given Room or as to any given Program. The
Hotel will notify PPV as soon as is reasonably possible and upon the Hotel'
actual notice of any unauthorized use, access, theft, damage or malfunction of
or to the System or any other equipment of PPV.
(c) Access for Maintenance. The Hotel will allow authorized
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personnel of PPV or its independent contractor(s) to have access to the System
at all times in order to conduct routine maintenance, to observe and monitor the
System, to ensure suitable operating conditions, to implement improvements in
the System, to conduct repairs, and to otherwise carry out PPV's obligations set
out in this Agreement.
(d) Response Time. PPV or its independent contractor(s) will respond
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as follows after being notified of a System failure: within four(4) hours during
normal working hours on weekdays, within eight (8) hours at other times. If the
Hotel does not provide PPV or its independent contractor(s) prompt access to the
System to correct System failures once PPV or its independent contractor(s) have
been notified by the Hotel of such System failures, PPV will not be liable for
any delays so incurred and the Hotel will be liable for all charges related to
such service requests.
(e) Negligent or Willful Damage. Any repairs or replacements to any
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equipment supplied by PPV made necessary by any negligent or willful act by the
Hotel or any of its employees, contractors, servants, agents or others
authorized by the Hotel, will be undertaken by PPV at the Hotel's expense.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
(f) Repair by Hotel. The Hotel will not permit any person to tamper
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with or attempt to make repairs to any equipment supplied by PPV. In
emergencies, the Hotel may carry out repairs in accordance with instructions
given by PPV by telephone.
(g) Remote Control Units. Hotel will be responsible for paying for
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replacement infrared remote control units in the event of theft, loss or damage.
Initial replacement cost is as set forth on Attachment B plus shipping, duties
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and taxes and is subject to change upon written notice from PPV to Hotel, with
an effective date at least thirty (30) days in advance of a change.
5. FEE AND PAYMENT TERMS
(a) Rental Fee. The Hotel will charge Hotel guests for access to
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Programs an amount set by PPV in consultation with the Hotel (the "Rental Fee").
The initial Rental Fee will be as set forth on Attachment B for each occasion a
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guest accesses a Program. From time to time, PPV may revise the Rental Fee after
consultation with the Hotel. PPV will notify Hotel in writing of the new Rental
Fee and the effective date at least thirty (30) days in advance of a revision.
(b) Denials. In the event any Hotel guest disputes the amount of
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rental Fees in a situation in which Hotel personnel are otherwise unaware of any
System malfunction (herein referred to as a "Denial"), the Hotel may in its sole
discretion credit the disputed amount to the guest's account provided it
provides PPV with a copy of the credit voucher showing room number, date, time
of day, and reason for the disputed charge. For denials that amount to 5% or
less of total purchases, there will be no charge to Hotel. For denials in excess
of 5 % of total purchases, 50% of the denial amount will be deducted from the
Hotel's commission described in Section 5(d) hereof. This formula will be
applied on a monthly basis.
(c) Taxes or other Charges. In addition to the Rental Fee, the Hotel
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will collect from guests any applicable taxes or applicable charges levied
thereon and will pay those taxes or charges to the appropriate government
agencies or other authorities.
(d) Hotel Commission. The Hotel will retain for the Hotel's services
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a commission in an amount calculated as set forth in Attachment B. The remaining
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amount of Rental Fees ("Net Rental Fees") will be paid to PPV within fourteen
(14) days following the end of the month in which the fees were charged, subject
to exchange control restrictions. The payment will specify the occupancy rate
for the month and the corresponding commission rate. Net Rental Fees due to PPV
will be subject to the appropriate witholding tax or other taxes imposed by the
government of the country or any local authority.
(e) Late Charges. Net Rental Fees due but not remitted to PPV by the
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due date will bear a penalty charge at the rate of 1 1/2% per month (or the
maximum amount allowed by law, whichever is lower) until paid.
(f) Inspection-Right. The Hotel will keep current, complete and
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records of occupancy rates and all Rental Fees and other amounts due to PPV
pursuant to this Agreement, in accordance with generally accepted accounting
principles applied on a consistent basis. Throughout the duration of this
Agreement, the books and records of the Hotel pertinent to the Rental Fee for
any month will be open to inspection and reproduction by PPV and, if necessary,
to an audit by a certified public accountant as an authorized representative of
PPV upon reasonable advance written notice to the Hotel. PPV's right to inspect
and audit the books and records of Hotel will not extend beyond one year from
the expiry of each calendar year for the duration of this agreement. If any
audit by PPV discloses any non-payment or underpayment of any amount payable to
PPV pursuant to this Agreement, the Hotel will immediately pay to PPV any
deficiency, plus the interest charges as provided in Section 5(e) above. If the
deficiency is in excess of 10% of the actual amount payable to PPV for the
period for which the deficiency occurred, the Hotel will reimburse PPV for all
costs incurred by PPV in conducting the audit.
(g) Access Record. The System will generate an accurate record (the
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"Access Record") of the access to the System by any guests, including a record
of the access charges for each individual guest's bill or Room account. PPV will
be responsible for all costs associated with programming the System to enable it
to provide the aforesaid data. The Hotel and PPV agree that the Access Record
will be the sole property of PPV and will be held in strictest confidence by the
personnel of the Hotel; and that such personnel will be entitled to review
the information only to the extent necessary to ensure proper billing of guests.
PPV may review and use the Access Record for such purposes as PPV may reasonably
deem appropriate.
6. PROGRAM TITLES
(a) Program Selection. Program titles to be made available on the
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System will be selected by PPV in consultation with the Hotel.
(b) Royalty to Program Suppliers. PPV will be responsible for any
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royalty payable to Program suppliers for Program titles made available on the
System.
(c) Proper Use of Programs. The Hotel will be responsible for
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ensuring that access to the System "head-end" is restricted to persons
authorized by PPV. The Hotel will not permit copying of any Programs. The Hotel
warrants that Programs will be exhibited in the Rooms only, and not in the
public rooms and public areas (including lobbies, hallways, restaurants, bars,
meeting rooms, etc.) of Hotel; and that Programs will not be exhibited other
than in accordance with this Agreement or by any other means of transmission of
any kind whatsoever. The Hotel will use reasonable efforts to insure that only
registered guests of the Hotel and their invitees may view the Programs.
(d) Cassettes and Proper Use. The Hotel warrants that any media such
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as cassettes that contain the Programs ("Cassettes") will be kept in a secure
and locked area and will not be accessible to Hotel staff without PPV's prior
written consent. The Hotel will prevent unauthorized use, exhibition or viewing
of any Cassette by any person other than on the System on the terms set forth
herein. The Hotel will not permit any person to duplicate or make alterations of
any kind to Cassettes. The Hotel will promptly report to PPV any unauthorized
use of the Cassettes as soon as the Hotel becomes aware of any such use. If the
Hotel makes videocassette recorders available to its guests, the Hotel agrees
that PPV may disable the "record" function during installation of the System.
7. OPTIONAL SERVICES
At the Hotel's option during the term of the Agreement, additional
guest programming services will be provided by PPV ("Optional Services"). Such
programming and services, costs or commissions are described in Attachment C.
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8. OWNERSHIP OF THE SYSTEM
(a) Property of PPV. The parties agree that the System and all
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equipment, materials and engineering related thereto provided by PPV are the
sole and exclusive property of PPV. The Hotel will ensure the safety and
security of the System and all related property of PPV at all times while the
System is installed in the Hotel, and will be liable for any damage to the
System resulting from negligence on the part of the Hotel's employees or third
parties to which the Hotel permits access to the System. The Hotel will use
reasonable efforts to prevent any theft of, or damage or vandalism to any of the
equipment supplied by PPV.
(b) Liens or Other Claims. The Hotel will not allow any lien,
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encumbrance, mortgage, claim or security interest to be attached to or be made
against the System.
(c) Placards. The Hotel will maintain all PPV notices or plaques,
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affixed to the System or related equipment, stating that the System and all
equipment, materials and engineering related thereto are the sole and exclusive
property of PPV.
(d) Filings. If PPV elects to file documents with governmental
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agencies for the purpose of notifying potential creditors of Hotel that the
System is the property of PPV, Hotel will assist with such filing, if requested
to do so by PPV.
(e) Removal of Equipment. Equipment comprising part of the System
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will not be removed from the Hotel for any purpose whatsoever other than by PPV,
except in the case of an emergency where such removal is necessary to ensure
safety of such equipment and the Hotel uses reasonable efforts to notify PPV of
such removal by telephone.
(f) Removal by PPV. In the event the safety of the System is
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threatened due to earthquake, flood, fire, strike, civil disruption or similar
causes, PPV will be entitled to enter upon the Hotel premises and to remove the
System from danger upon reasonable notice to the Hotel.
(g) Removal upon Termination. Upon termination of this Agreement,
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the Hotel the will allow PPV to remove the System. PPV will undertake to remove
the System within thirty (30) days after such termination and will return the
premises where the System was installed to their original condition, normal wear
and tear excepted, at no cost to the Hotel, and will do so with minimal
disruption to MATV services.
9. INSURANCE
PPV will provide general business risk insurance coverage on the
System during the term of this Agreement.
10. REPRESENTATIONS AND COVENANTS OF HOTEL
The Hotel represents, undertakes and covenants with PPV that
throughout the duration of this Agreement:
(a) Authority. The Hotel warrants and represents that it is the sole
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operator of the Hotel, that it has full legal power and authority to enter into
this Agreement and to perform all of its obligations hereunder and that this
Agreement is within the Hotel's authority as operator of the Hotel. If the
Hotel is a corporation, the Hotel further warrants and represents that all
necessary corporate action has been taken to authorize the Hotel to enter into
this Agreement and perform its obligations hereunder.
(b) Compliance. The Hotel will comply, and will ensure that
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performance of its obligations hereunder complies, with all Applicable laws,
ordinances, rules, regulations, orders, licenses, permits or other requirements
now or hereafter in effect, of any governmental authority. Without limiting the
generality of the foregoing, to the extent any filing with, or any license,
approval or other agreement of, any applicable authority is required for
performance of any of the Hotel's obligations, the Hotel will file the
appropriate documents and will maintain such documents on file, which PPV may
inspect upon demand.
11. REPRESENTATIONS AND COVENANTS OF PPV
PPV represents, undertakes and covenants with Hotel that throughout
the duration of this Agreement:
(a) Authority. PPV warrants and represents that it has full legal
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power and authority to enter into this Agreement and to perform all of its
obligations hereunder. PPV further warrants and represents that all necessary
corporate action has been taken to authorize it to enter into this Agreement and
perform its obligations hereunder.
(b) Compliance. PPV has all necessary licenses, permits, approval or
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agreements to enable it to provide the Programs and access to the Channels in
accordance with this Agreement.
(c) No Infringement. PPV warrants that the publication or
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dissemination by the System of the Programs and Channels will not infringe any
copyright or other intellectual property rights of any person and that Hotel
will not be obliged to pay as a result of the operation of the System any
license fees, royalties or other payments over and above the Rental Fees payable
to PPV. PPV will hold the Hotel harmless against any claims for infringement.
(d) Hotel Satisfaction. That the System will operate to Hotel's
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reasonable satisfaction throughout the Term and that signal quality will be to a
reasonable commercial standard.
12. PUBLICITY REGARDING THE SYSTEM
The Hotel will adequately publicize the existence of the System and
access to the Programs for use by guests. The Hotel and its employees will use
best efforts to encourage guests' use and enjoyment of the System.
If the Hotel prepares any publicity or other materials relating to the System,
the Hotel will forward such materials to PPV for approval prior to publication
and dissemination of the same. The Hotel will ensure that its employees will not
make any representations with regard to the System other than as set out in the
materials which PPV has approved.
13. TRAINING AND CONSULTATION
To enable the Hotel to generate suitable promotional material related
to the use of the System by the Hotel and to enable personnel of the Hotel to
advise and encourage guests regarding their use of the System, PPV will provide
a training course on the use and operation of the System for as many employees
of the Hotel as it deems desirable. Personnel of PPV or its independent
contractor(s) will be reasonably available for telephone consultation to provide
further assistance to Hotel personnel regarding use and operation of the System
at no charge.
14. ACCOMMODATIONS
During the installation process, the Hotel will provide PPV with two
complementary double rooms for the accommodation of the PPV installation team.
In addition the Hotel agrees to provide to PPV ten (10) complimentary room
nights per year on a space available basis for the accommodation of visiting
staff during the term of the Agreement. Any additional room nights will be
provided at the Hotel's lowest rate offered to its most favored customers.
15. CONFIDENTIALITY
The parties agree that the functions and components of the System,
facts regarding the equipment and materials related thereto, the manner of
operation thereof and the terms of this Agreement, including without limitation
Rental Fees and Hotel Commission schedule, all constitute proprietary
information of PPV ("confidential information"). The Hotel will not use or
disclose the Confidential Information to any third party or permit any third
party to have access to the System and the Confidential Information, other than
the Hotel's personnel as may be reasonably necessary for performance of its
obligations under this Agreement.
16. EXCLUSIVE VIDEO ENTERTAINMENT SYSTEM
As part of the consideration to PPV for installation of the System,
the Hotel agrees that the System will be the sole and exclusive video
entertainment and information services system provided or permitted to be
provided by the Hotel to its guests during the Term. In addition,
notwithstanding any other provision contained herein no pay-per-view
entertainment will be provided by Hotel other than such as is delivered by way
of the System, but PPV will not unreasonably deny access through the System by
outside video services not competitive with PPV, provided such service providers
agree to pay a reasonable access fee. Hotel will not either directly or
indirectly solicit or permit the installation of any video system which might in
any way directly or indirectly compete with the System or, so far as Hotel is
able to do so, permit any guest or other person using Hotel or its facilities
for any purpose to bring upon or use any such competing system on the premise of
Hotel.
17. DEFAULT
(a) The remedies set out in Section 17(b) below will apply if either
the Hotel or PPV should: (i) breach or become in default of performance of any
material term or condition contained in this Agreement, and should fail to cure,
correct or remedy such breach or default within sixty (60) days after receipt of
a written notice thereof from the other party, (ii) be adjudicated bankrupt or
petition for relief under any bankruptcy, reorganization receivership,
liquidation, compromise arrangement or moratorium statute, (iii) make an
assignment for the benefit of its creditors, or (iv) petition for the
appointment of a receiver, liquidator, trustee or custodian for all or part of
its asset.
(b) If any of the events set out in Section 17(a) above will occur,
the party not in default may exercise any or all of the following remedies: (i)
cancel and terminate this Agreement and require removal or repossession of the
System and all components thereof, (ii) obtain injunctive and other equitable
relief, and (iii) obtain such damages and other rights and remedies as the party
not in default may have at law.
(c) Should Hotel inform PPV in writing of a new feature offered by a
competitor in an installed system in the Hotel's local market which if
incorporated in the System would be reasonably expected to materially enhance
Hotel revenue, PPV will install a similar or better feature within 180 days of
written notice by Hotel to PPV, or Hotel will have the right to terminate this
Agreement.
18. FORCE MAJEURE
(a) Where a party is unable, wholly or in part, by reason of Force
Majeure, to carry out any obligations under this Agreement and that party: (i)
gives the other party prompt notice of that Force Majeure with reasonably full
particulars and, insofar as known, the probable extent to which it will be
unable to perform or be delayed in performing that obligation; and (ii) uses all
reasonable efforts to remove that Force Majeure as quickly as possible; then
that obligation is suspended insofar as it is affected by the continuance of
that Force Majeure provided that this Section 18(a) will not operate to relieve
any party of an obligation to pay money.
(b) For the purposes of this Agreement, "Force Majeure" means: (i) an
act of God, strike, lockout or other interference, (ii) war declared or
undeclared, blockade, disturbance, lightning, fire, earthquake, storm, flood, or
explosion, (iii) governmental or quasi-governmental restraint, expropriation,
prohibition, intervention, direction or embargo (iv) unavailability or delay in
availability of equipment or transport not due to any action or inaction on
behalf of either party, (v) unavailability or delay in obtaining governmental or
quasi-governmental approvals, consents, permits, licenses, authorities or
allocations and (vi) any other cause whether of the kind specifically enumerated
in this Section 18(b) or otherwise which is not reasonably within the control of
the party affected; and "all reasonable efforts" does not require the settlement
of strikes, lockouts or other labor disputes, or claims or demands by any
government or quasi-government authority on terms contrary to the reasonable
business judgment of the party affected.
(c) In the event any Force Majeure prevents performance under this
Agreement by either party which continues in existence for more than thirty (30)
days, the parties will meet in good faith to discuss the situation and to make
all reasonable efforts to achieve a mutually satisfactory resolution of the
problem.
(d) In the event performance by either party is prevented due to
Force Majeure for a period not to exceed one hundred and twenty (120) days
during any twelve (12) month period, such failure of performance will not be
deemed default hereunder; provided, however, that in the event of such failure
of performance by Hotel, PPV will be entitled to remove the System until
performance is no longer prevented by Force Majeure.
19. WARRANTIES; REMEDIES
PPV makes no representation or warranty, either express or implied,
with regard to the System, including implied warranties of merchantibility or
fitness for a particular purpose. The obligations of PPV under Section 4
constitutes Hotel's sole and exclusive remedies for any claim which Hotel may
have arising out of or in connection with the System.
20. LIMITATION OF LIABILITY
In no event will PPV be liable for costs of procurement of substitute
goods by Hotel. In no event will PPV be liable for any special, consequential,
incidental or indirect damages (including without limitation loss of profit)
whether or not PPV has been advised of the possibility of such loss, however
caused and on any theory of liability (including but not limited to negligence
or strict liability) arising out of the Agreement. This exclusion includes any
liability that may arise out of third-party claims against Hotel. These
limitations will apply notwithstanding any failure of essential purpose of any
limited remedy.
21. GENERAL TERMS
(a) This Agreement will be governed by the laws of Hong Kong.
(b) Except as otherwise set forth herein, the provisions hereof will
be binding upon, and will inure to the benefit of, the respective successors and
assigns of the parties hereto; provided that no assignment of this Agreement
will be made by Hotel without the express prior written consent of PPV, such
consent not to be unreasonably withheld.
(c) This Agreement may be modified or amended only by a written
agreement signed by both parties. No waiver by either party of any breach or
default hereunder will be construed as a waiver of any precedent or subsequent
breach or default.
(d) This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and merges and supersedes
all prior discussions and understanding between the parties related thereto,
whether written or oral.
(e) Any dispute, controversy or claim arising out of or in relation
to this Agreement, or the breach, termination or invalidity thereof which the
parties are unable to mutually resolve within ninety (90) days, will be settled
by arbitration in Hong Kong in accordance with the then-current rules of the
International Chamber of Commerce. The appointing authority will be the
President of the Law Society of Hong Kong.
22. CHANGED CIRCUMSTANCES
Hotel covenants with PPV that in the event Hotel sells or assigns the
assets or the leasehold of the land upon which the Hotel is erected to a third
party, it will use its best efforts to induce the incoming owner and/or operator
to accept assignment of this agreement or enter into an agreement with PPV on
the same terms as this Agreement for the balance of the unexpired portion of the
Term.
IN WITNESS WHEREOF, this Agreement is entered into by the parties
hereto this ________ day of ______, 19___.
PACIFIC PAY VIDEO(HK) LIMITED HOTEL SHANGRI-LA INTERNATIONAL
HOTEL MANAGEMENT LIMITED
By: /s/ Alison J. Thorpe By: /s/ J. David Hayden
Alison J. Thorpe J. David Hayden
Title: Regional Manager Title: Managing Director
ATTACHMENT A
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FACILITIES TO BE PROVIDED BY THE HOTEL FOR INSTALLATION
1. The Hotel MATV system must be able to handle the bandwidth 7 MHz
to 456 MHz, including bi-directional communications at 7 MHz. For countries
adhering to the PAL standard, all channels between 279 MHz and 478 MHz must be
reserved for the System. For countries adhering to the NTSC standard, all
channels between 330 MHz and 456 MHz must be reserved for the System.
2. An as-built drawing of the hotels MATV design must be provided to
PPV as soon as possible after signature of Agreement.
3. The room in which the System is to be located must be secure from
unauthorized access and the location intended for the system must measure at
least 2.5 meters by 2.5 meters. Adequate access must be available for rolling
the System from the delivery truck to the installation room. A table or desk
will be provided of at least 0.6 meter by 0.8 meter for use by staff during the
installation process.
4. Electrical service of at least 10 amps (220-240 VAC) must be
provided; unless only 100-200 VAC is available in which event 20 amp electrical
service is required.
5. The Hotel must provide cooling capability of at least 6800 BTUs
in the System room. The required ambient temperature range is 22 degrees C, +/-
1 degree (72 degrees F, +/-2 degrees).
6. The Hotel must provide two dedicated telephone lines for
connection to the System, equipped with RJ-11 jacks, One is for modem use and
the other is for voice use. The Hotel will be obligated to pay for line
installation and rental but not for usage charges.
7. For the purpose of staging and configuring room interface units,
the Hotel must provide the installation team with use of a secure space for five
days. The space must be at least three meters on a side, and be equipped with
electrical service. A guest room is preferable, near the service lifts.
8. The Hotel must coordinate access by the installation team to
blocks of rooms for equipment installation, which will proceed at approximately
100 rooms per day. If the Hotel wishes the installation team to be escorted
while in rooms it must provide Hotel personnel for that purpose.
ATTACHMENT B
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Initial Rental Fee: [***] for each access of a Program [***]
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Hotel Commission & Bonus:
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FLOOR COMMISSION [***] available room/month
(Guaranteed to each Hotel)
COMMISSION % [***]
(Based on Revenue less denial)
INITIAL BONUS THRESHOLD [***]
(Net Revenue after denials/available room/day)
This would be computed on an annual basis. For all incremental movie sales above
the [***] threshold, the Commission Rate above Threshold would apply. This
threshold will automatically increase by [***].
COMMISSION RATE ABOVE THRESHOLD [***]
Remote Control
Replacement Cost: [***] for each replacement unit
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*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
ATTACHMENT C
OPTIONAL SERVICES
Guest services include guest messaging, folio review, remote check
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out, breakfast ordering, video survey, housekeeping status and minibar posting
at no charge to the Hotel.
Free to Guest Scheduled Movie Programming includes one channel with
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four rotating movies, at a cost of-,
[***] per available room per day
or
[***] per occupied room per day.
Whichever is the lower per month.
The Hotel agrees to continue to include Free to Guest programming for
the entire term of the contract.
Retail Shopping Services include product advertisement and delivery
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services for guest selected shopping, with a commission equal to the movie
commission on PPV operating income generated from shopping purchases. Payable to
the Hotel monthly.
Video Games available for guests in the room, with a commission equal
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to the Movie commission. Payable to the Hotel monthly.
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
ADDENDUM TO INSTALLATION AGREEMENT
BETWEEN PACIFIC PAY VIDEO & SHANGRI-LA HOTELS & RESORTS
Both parties do hereby agree on the following additional terms and
conditions:
* After consultation, either party may determine whether an individual hotel
property (listed in Attachment A) may be excluded from installation.
* Should more than 20% of the hotel properties, (as listed in Attachment A)
choose to be excluded from the Installment Agreement, as of December 31,
1996, the group terms & conditions will be re-evaluated fro the remaining
contract period.
* Should an individual hotel property choose not to include Free to guest
programming, the terms & conditions of the individual hotel property will
change as follows:
HOTEL IN UNCENSORED MARKET HOTEL IN CENSORED MARKET
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COMMISSION %(BASED ON [***] [***]
REVENUE LESS DENIALS)
COMMISSION RATE ABOVE [***] [***]
THRESHOLD
APPROVED AND AGREED BY:
SHANGRI-LA HOTELS & RESORTS Pacific Pay Video
By /s/ authorized signature By /s/ authorized signature
Title Title President
Date 20 January 95 Date 20 January 95
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.