8. MANAGEMENT FEE
(1) By way of consideration for DPI’s performance of the Services the Owner shall pay to DPI a Management Fee which shall be calculated as follows:
(i) on all local and transit passengers for each Operating Year:
first 100,000 passengers at the rate of US$2.50 per passenger
next 50,000 passengers at the rate of US$3.50 per passenger
thereafter at the rate of US$4.50 per passenger
ii) on all freight (including post and military cargo) for each Operating Year:
first 5,000 tons at the rate of US$30 per ton
next 5,000 tons at the rate of US$35 per ton
next 5,000 tons at the rate of US$40 per ton
thereafter at the rate of US$45 per ton
in the event that any Operating Year is less than a full calendar year the thresholds set out above shall be reduced pro rata to the length of the Operating Year; and
iii) on all plane movements, including transit and military, at the rate of US$75 per movement
(2) As soon as possible after the end of each calendar month during the Operating Period DPI shall estimate the accrued Management Fee for that month and DPI may thereafter withdraw the accrued fee so estimated from the Operating Accounts. Any such estimate of the accrued fee shall be provisional only. DPI shall, in such estimate for any month adjust if necessary its estimate for any previous month and add that adjustment to or deduct that adjustment from (as appropriate) the accrued fee which would otherwise have been in the current estimate.
(3) DPI shall procure that within 120 days of the end of each Operating Year to finalize the amount of the Management Fee with agreement from the Owner. If the aggregate amount of the Management Fee which has been paid to DPI in respect of the Operating Year exceeds or falls short of the aggregate amount of the Management Fee which should have been so paid DPI shall repay to the Owner the amount of such excess or the Owner shall pay to the DPI the amount of such shortfall (and DPI may withdraw the appropriate amount from the Operating Accounts).
9. PROFIT SHARES
(1) By way of consideration for DPI’s performance of the Services DPI shall be entitled to a share in the profit of the Airport which shall be calculated in accordance with Schedule 2 (“DPI’s Profit Share”).
(2) DPI shall procure that within 120 days of the end of each Operating Year, the Auditors shall certify DPI’s Profit Share and the Owner’s Profit Share.
(3) DPI shall forthwith after production of the Auditors certificate of DPI’s Profit Share for each Operating Year:
(a) be entitled to withdraw an amount up to 50 per cent of DPI’s Profit Share; and
(b) retain the balance of DPI’s Profit Share on capital account (“DPI’s Capital Account”).
(4) The Owner shall forthwith after production of the Auditors certificate of the Owner’s Profit Share for each Operating Year:
(a) be entitled to withdraw an amount up to 50 per cent of the Owner’s Profit Share; and
(b) retain the balance of the Owner’s Profit Share on capital account (“Owner’s Capital Account”).
(5) DPI shall maintain separate records of DPI’s Capital Account and the Owner’s Capital Account. The amounts credited to DPI’s Capital Account and the Owner’s Capital Account shall, subject to Clauses 18(3) and (4), be used for working capital and investment purposes.
(6) The level of payments to be made pursuant to Clauses 9(3) and (4) above may be amended by agreement of the parties from time to time.
10. RECOVERY OF EXPENSES
In addition to the management fees and profit share, DPI shall be entitled to reimbursement from the Owner for all expenses properly and reasonably incurred by DPI in connection with the provision of the Services.
11. PERFORMANCE STANDARDS
DPI shall at all times perform its obligations under this Agreement in accordance with the provisions of this Agreement and to a standard no less stringent than the Requisite Standard
(1) DPI shall procure and maintain at the cost of the Owner at all times during the Operating Period the following insurance, on terms and conditions commensurate with the risks for such amounts as shall be determined by DPI:
(a) workers’ compensation and employer’s liability insurance;
(b) general legal liability insurance to cover the Airport against damages arising from its operation;
(c) public liability insurance; and
(d) such other insurance as DPI reasonably considers necessary for the protection of the Airport, business interruption, or any other risks arising out of or relating to the operation of the Airport.
(2) The insurance referred to in Clause 12(1) above shall
(a) name the Owner and DPI as joint insured;
(b) contain a waiver of the insurer’s right of subrogation in favour of the Owner; and
(c) be underwritten by a reputable insurer and the terms and conditions of such insurance shall be in accordance with good industry practice.
(3) The Owner shall not take or fail to take any reasonable action or (in so far as it is reasonably within its power) permit or allow others to take or fail to take any action whereby any of the insurances maintained pursuant to this Clause 12 may be rendered void, voidable, unenforceable or suspended or impaired.
(4) Each party shall indemnify the other party against any loss incurred by that other party to the extent the loss arises by reason of any insurance effected pursuant to this Clause 12 being vitiated or invalidated or payment under the same being reduced or withheld as a result of any act, omission, negligence or wilful default on the part of that party.
(1) Nothing in this Agreement shall exclude or restrict the liability of either party for death or personal injury resulting from its negligence or that of its employees, servants or agents while acting in the course of their employment.
(2) Save as otherwise provided in this Agreement, neither party shall be liable to the other in connection with the exercise of its rights or the performance of its obligations under this Agreement for any consequential, or indirect loss, or loss of business, contracts or damage to goodwill, profits or anticipated savings whether foreseeable or otherwise.
(3) If any claim is made against either party then the party so notified will inform the other party in writing at the earliest opportunity and will not prejudice the position of the other party in relation to such claim.
(4) The Owner agrees to indemnify and hold harmless DPI from and against any and all actions, proceedings, costs, claims and demands brought against DPI arising as a direct consequence of DPI’s provision of the Services in accordance with this Agreement save and to the extent that such actions, proceedings, costs, claims or demands arise out of the breach by DPI of its obligations under this Agreement or as a consequence of the negligence of DPI.
14. REPRESENTATIONS AND WARRANTIES
Each of the parties makes the following representations and warranties to the other:
(a) it has the power to enter into and perform, and has taken all necessary action to authorise the entry into, performance and delivery by it of, this Agreement;
(b) this Agreement constitutes its legal, valid and binding obligations;
(c) the entry into and performance by it of, and the transactions contemplated by this Agreement do not and will not:
(i) conflict with any law or judicial or official regulation applicable to it; or
(ii) conflict with its constitutional documents; or
(iii) conflict in any respect with any Agreement or document which is binding upon it.
Each party hereto shall not, and shall use all reasonable efforts to ensure that its employees and advisers do not, at any time hereafter (whether during the term of this Agreement or thereafter) disclose (except with the prior written consent of the other party) to any person, firm or company (save as may be necessary for it to exercise its rights and discharge its obligations under this Agreement) any information (whether written or not), being the property of or otherwise relating to the other party or its business, secrets, dealings, transactions or affairs and which is not in the public domain otherwise than through an unauthorised disclosure. A copy of this agreement may be delivered to the Auditors for purposes of their confirmation of the profit sharing calculations. The Auditors shall be required to maintain and respect the commercial confidentiality of the information contained in this agreement.
16. FORCE MAJEURE
Neither party will be liable to the other for failure to perform its obligations under this Agreement to the extent that such failure is caused by an event of force majeure (being an event beyond the reasonable control of that party and causing prevention of performance which could not reasonably have been avoided by the exercise of due diligence by that party either when the event happened or previously) provided that party gives to the other party immediate written notice to that effect specifying the nature of the event of force majeure and its likely duration. The party whose performance is affected by the event of force majeure shall forthwith upon the occurrence of such event take all steps within its power and at its cost with a view to terminating the event of force majeure or, while continuing, to ameliorate or to remove its effect.
17. TERM AND TERMINATION
(1) This Agreement commences on the date of signing by both parties and subject to Clause 17(2) shall continue in force for a term of 20 years.
(2) Without prejudice to any other rights or remedies, either party may serve notice of termination on the other party if:
(a) the other party is in breach of any material obligation contained in this Agreement (including but not limited to failure to make any payment when it is due under this Agreement) which is not remedied within 45 days of a written notice to do so; or
(b) the other party suspends or discontinues business or becomes subject to or itself invokes, or evidences an intention to invoke, any law or proceedings (in any jurisdiction to which it is subject) relating to its insolvency, liquidation, bankruptcy, winding-up, administration or dissolution; or
(c) the other party is unable to comply with all or a material part of its obligations under the Agreement by reason of an event of force majeure in accordance with Clause 16 and the event of force majeure continues for more than six months; or
(d) the Owner may serve notice of termination on DPI if DPI ceases (without the consent of the Owner) to be a subsidiary of DPA;
in which case this Agreement shall terminate immediately, unless in the case of subparagraph (a), the matter is the subject of a bona fide dispute between the parties and has been referred to arbitration pursuant to Clause 21.
18. CONSEQUENCES OF TERMINATION
(1) Termination of this Agreement will be without prejudice to any rights and obligations which may have accrued prior to the date of termination which shall include the payment by the Owner to DPI of such sum which represents the value of any Services provided by DPI prior to such termination in relation to which no previous invoice has been submitted.
(2) In the event that this Agreement is terminated in accordance with its terms by either party and notwithstanding that this Agreement will have terminated, DPI shall, at the request of the Owner, continue to provide the Services to the Owner to the extent that this is necessary to maintain the safe running of the Airport until the Owner has appointed a successor to manage the Airport provided that:
(a) the Owner pays to the DPI a pro rated portion of the Management Fee which shall be calculated by reference to the period of time during which DPI provides the Services in accordance with this Clause;
(b) the period of time in which DPI provides the Services in accordance with this Clause shall not exceed six months from the date of termination of the Agreement; and
(c) the Owner shall use its best endeavours to appoint a successor to DPI as soon as possible following the termination of this Agreement.
(3) Upon expiration or termination of this Agreement in accordance with its terms, DPI shall forthwith be entitled to payment of all of DPI’s Profit Share retained on DPI’s Capital Account in accordance with Clause 9(3)(b), in immediately available and freely transferable US Dollars.
(4) In the event that the Owner terminates this Agreement, prior to the expiry of the 20 year term referred to in Clause 17(1) above, for any reason other than as set out in Clause 17(2) above, DPI shall be entitled to an amount equal to three times the average Management Fee for the preceding two Operating Years (or any lesser period, if less than 2 years completed), together with payment of all DPI’s Profit Share retained on DPI’s Capital Account in accordance with Clause 9(3)(b). The amount so payable to DPI shall be paid by the Owner within 30 days after the date of termination in immediately available and freely transferable US Dollars.
(5) Termination or expiry of this Agreement shall not affect any rights or obligations which have accrued prior to such termination or which are expressly intended to survive termination, whether resulting from the event giving rise to the right to terminate or otherwise.
19. ASSIGNMENT, WAIVERS, MODIFICATIONS, SEVERABILITY, ENTIRE AGREEMENT AND COUNTERPARTS
(1) Neither party shall without the prior written consent of the other assign, transfer or otherwise deal with any of its rights and obligations under this Agreement.
(2) No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy. No waiver shall be effective unless expressed in writing signed by or on behalf of the party granting it.
(3) No modification of or addition to this Agreement shall be effective unless made in writing and signed by both parties.
(4) If any provision of this Agreement shall be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect. The parties hereby agree to attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision which achieves to the greatest extent possible the economic, legal and commercial objectives of the invalid or unenforceable provision.
(5) This Agreement supersedes all oral and written representations and agreements between the parties relating to the subject matter hereof prior to the date hereof, and this Agreement represent the entire understanding between the parties in relation to the subject matter hereof and thereof.
(6) This Agreement may be executed in any number of counterparts, each deemed to be an original, but all of which together shall constitute one and the same instrument.
20. GENERAL OBLIGATIONS
Each party agrees to co-operate with the other in the fulfilment of the purposes and intent of this Agreement.
21. DISPUTE RESOLUTION
Any dispute arising in connection with this Agreement will be referred in writing by either party to arbitration in London in accordance with the arbitration rules of the International Chamber of Commerce. Any such arbitration will be conducted in English before one arbitrator who will be appointed by agreement between the parties to this Agreement, or failing such agreement within 14 days, upon the application of either party by the International Chamber of Commerce.
22. GOVERNING LAW
This Agreement is governed by English law.
IN WITNESS WHEREOF the above-named parties or their authorised representatives have set their hands the day and year first above written.
SIGNED for and on behalf of )
AEROPORT INTERNATIONAL DE DJIBOUTI )
SIGNED for and on behalf of )
DUBAI PORTS INTERNATIONAL FZE )
DPI shall do all things and take all necessary action for the operation and management of the Airport. This shall include the following:
(A) the selection, employment and termination of all employees, supervision, direction and training of employees;
(B) the appointment of technical consultants or experts;
(C) the determination and implementation of operating policy, standards of operation and quality of service standards;
(D) the establishment of all tariffs, rates, prices and charges for the Airport;
(E) the settting of rates and the collection of all charges, rents and other amounts due from users and tenants, including all departure taxes, parking and pass dues, taxes on the domestic sale of airline tickets, and all other revenues, taxes and fees directly or indirectly related to air travel in Djibouti;
(F) the selection, engagement, supervision, determination of remuneration and termination of the engagement of those persons, firms and companies required to supply or render goods and/or services in connection with the operation of the Airport;
(G) the supervision and control of the activities of users and tenants;
(H) the granting and termination of leases, licenses, concessions and privileges as DPI shall consider reasonably necessary or desirable;
(I) the planning, supervision and direction of advertising, promotion and other public relations activities in respect of the Airport;
(J) the initiation, supervision and control of the maintenance and repair of the Airport;
(K) the maintenance of books and records; and
(L) the commencement of, settlement or compromise of legal actions, claims or proceedings.
(M) the commercial marketing of the Airport to airlines and airport related services
(N) selection of airlines authorized to utilize the services of the airport in accordance with the government’s open sky policy, and subject to international agreements or conventions regarding international travel restrictions on designated countries
(A) DPI shall be entitled to a share in the profit of the Airport in each Operating Year (“DPI’s Profit Share”) in the amount of:
A less B
Where A is calculated as follows:
7.5 per cent of the first US$500,000 of Gross Operating Profit; and
12.5 per cent of the next US$500,000 of Gross Operating Profit; and
17.5 per cent of the next US$500,000 of Gross Operating Profit; and
22.5 per cent of Gross Operating Profit in excess of US$1,500,000
save that in the first Operating Year A shall be calculated with percentages reduced pro rata to the length of the Operating Year;
and B is DPI’s share of the Finance Charges which is pro rata to its share in Gross Operating Profit.
In the event that any Operating Year is less than a full calendar year the US$ threshold for Gross Operating Profit set out above shall be reduced pro rata to the length of the Operating Year.
(B) The Owner shall be entitled to the balance, after deducting DPI’s Profit Share, of Gross Operating Profit less its pro rata share of the Finance Charges (the “Owner’s Profit Share”)
(C) In this Schedule 2:-
“Gross Operating Profit” means, in relation to any Operating Year, any excess of Gross Revenue over Operating Expenses. It is specifically agreed that all provisions related to activities prior to the Commencement date will not be included in the calculation of Gross Operating Profit. It is further agreed that all provisions in respect of Government of Djibouti – related financial transactions and accounts will not be included in the calculation of Gross Operating Profit.
“Gross Revenue” means, in relation to any Operating Year, all revenues and income from the operating of the Airport determined in accordance with International Accounting Standards.
“Finance Charges” means for each Operating Year, the aggregate amount of all interest, fees, commissions and costs payable by the Owner in as far as they relate exclusively to the ownership or operation of the Airport during such Operating Year in respect of all of its Financial Indebtedness.
“Financial Indebtedness” means any indebtedness in respect of moneys borrowed, any debenture, bond, note, loan, stock or other security, any acceptable credit, any guarantee, indemnity or similar assurance against financial loss of any person or any amount raised under any other transaction having the commercial effect of a borrowing or raising of money. Any financial indebtedness incurred prior to the Commencement Date that is not directly related to Airport activities is to be excluded for purposes of this calculation.
“Operating Expenses” means, in relation to any Operating Year, all reasonably and properly incurred costs and expenses of operating and maintaining the Airport determined in accordance with International Accounting Standards but excluding, for this purpose, Finance Charges.
“International Accounting Standards” means International Accounting Standards as published by the Accounting Standards Committee of the International Federation of Accountants.