ARIVA HOSPITALITY

Proposal for technical and management services

Hospitality Project in Yangon for Top Global Engineering

By e-mail: uyinhtwe@yahoo.com; uyinhtwe@topglob.com.sg

July 29, 2013

Dear Mr. U Yin,
It was a pleasure meeting you and Mr. Soe Thein and we would like to thank you
for taking the time to introduce your project to us.
We are experienced both in doing mix used development and doing it in
emerging countries. As you know we are working on 2 smaller projects in
Yangon so we do understand the local constraints and how to resolve them.
As discussed we have included in our proposal a high level 5 year projection,
please note that these numbers are conservative and will change once the details
of the development are firmed up.
We have attached the scope of services for the technical portion of the contract.
For the management please note the simplicity of the fee structure, there are no
hidden fees or costs, our remuneration will vary with the quality of the results
we produce so our interest is even more closely aligned with the owners.
The sales and lease back scheme is an additional option that you may want to
consider. We have at this stage not included a proposal for the strata title
management as you are talking to some real estate firms. We would however
help you on the retail mix for the office and retail component.

Yours sincerely,

Jean-Claude Erne
Executive Director, Ariva Hospitality

CC: Cameron Ong, Executive Chairman, Ariva Hospitality
CC: Stanley Ling, CFO, Ariva Hospitality
CC: Ronald Loges, VP Operations, Ariva Hospitality

Confidential

ARIVA HOSPITALITY
Proposal for technical and management services
Hospitality Project in Yangon for Top Global Engineering

The technical service and management agreement
Please note that the information below has to be read as one agreement
comprising two parts, technical services and management agreement. These two
parts are indivisible. The terms in the attached proposal is subject to a formal
Management Agreement to be signed within 2 months from the date hereof, and
on expiry of the 2 months, the terms shall become subject to further review.

Technical Services
Duration: estimated 24 months
Scope: To work with the client, the architect and other consultants as nominated
by the client to ensure that the end product is desirable for the customer, easy to
operate and economical to build and operate. We have attached the scope in a
separate document.
Please note that in the case of mixed-use development, at no extra cost, we will
provide consulting on the overall scheme to ensure that all parts are integrated
in a rational and functional way.
Fees: For a 300-room Hotel and 220-serviced Residence , including all ancillary
facilities we will charge a fee of S$ 286000 (S$ 550 per unit)
All out-of-pocket travel and other expenses incurred by Ariva and/or its affiliates
shall be reimbursable in full, including but not limited to travel, accommodation
and meal expenses.
Payment Schedule:
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30% upon signing of the agreement

15% when reaching the 6th month
15% when reaching the 12th month
15% when reaching the 18th month
15% when reaching the 24th month
10% when reaching the end of the technical contract

Confidential

ARIVA HOSPITALITY
Proposal for technical and management services
Hospitality Project in Yangon for Top Global Engineering


Management Contract (for both Hotel & Serviced Residences)
Duration: 10 years with an option to renew for 10 years
Management fee of 2.5 % on gross operating revenue of the property managed
Incentive fee is on a sliding scale to ensure that operators interests are aligned
with the owners. The fee is based on the Gross Operating Profit (GOP), which is
the revenue minus the operating expenses; the GOP is defined per the Hospitality
Industry standard and is before deducting owners cost such as amortization,
interest payment, depreciation, management fees, etc.
-

5% if the GOP is 34.9% or below

6% if the GOP is 35% to 39.9%
7% if the GOP is 40% to 45%
8% if the GOP is 45.1% or above

IP fee waived

Marketing fee we do not charge centralized marketing fee but will ensure that
sufficient marketing expenses are budgeted in the yearly operating budget

Training fee - we do not charge centralized training fee but will ensure that
sufficient training expenses are budgeted in the yearly operating budget

IT fee we do not charge IT fees, if you decide to purchase Arimax, our property
management system (PMS), at no extra cost we will deliver
-
-
-
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The loading fee for the property on the website is free of charge, all
documents and photography to be provided by owners
The loading on the booking engine and the training is free of charge
30 e-mail addresses are provided free of charge
Please note that there are fees for materialized booking ranging from 3 to
5%, which is one of the lower in the industry.

PMS/Accounting system we have our own property management system and

accounting package, both are proven system at a very attractive cost.
Pre Opening pre opening services are included in the technical service and
management agreement at no extra cost. The owners will fund the pre opening
activities based on a budget prepared by Ariva and approved by the owner.
Budgets Ariva will prepare all the necessary budgets for the owners review
and approval

Confidential

ARIVA HOSPITALITY
Proposal for technical and management services
Hospitality Project in Yangon for Top Global Engineering


Sales and Lease back scheme
Arivas involvement in this scheme can take several forms, depending on the
market and desired outcome. There are a number of different schemes that can
be implemented, for example guaranteed or non-guaranteed lease back, pool
system etc. Our scope of work will cover the following:-
We will attend road shows in key South East Asia and China cities,
accompany and be in attendance with your team to meet prospective
buyers to market the sales and lease back scheme as well as to promote
the management of the property.
- We will hold a training session with the sales team to brief them on the
product, as the product being sold is different from the conventional real
estate transaction.
- Ariva will develop and work out the mechanics of the sales and lease back
scheme and work with your team on the collaterals and presentation
materials.
- Ariva will also work in conjunction with you and the real estate agents on
the market pricing possibilities.

The fees for the scheme set-up will be a one-time set-up fee of Singapore Dollars
Thirty Thousand S$30,000.00, including developing the mechanics and
documentation as well as the conduct of the training.

For the road shows, we will charge a rate per Diem of Singapore Dollars Two
Thousand S$2,000.00 per day. Alternatively we could consider being
remunerated based on the sales at the rate of 0.5% of the gross sales proceeds.
-

All out-of-pocket travel and other expenses incurred by Ariva and/or its affiliates
shall be reimbursable in full, including but not limited to travel, accommodation
and meal expenses. Travel with scheduled flight time of more than 3 hours shall
be at business class fare.

Confidential