H Group Holding, Inc. and Subsidiaries - Page 21

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          five hotels under its Exelaris banner.  The joint venture was                
          called Hoteles Exelaris, S.A. (HESA), and was owned 51 percent by            
          VIS and 49 percent by HIC (Mexico), a wholly owned subsidiary of             
          HIC.  HIC’s 49-percent ownership was, to some extent                         
          unrepresentative in that HIC had contributed about 75 percent of             
          the value and was entitled to about 25 percent of economic                   
          returns.  After 2 years the profit split was changed to 65                   
          percent for HIC and 35 percent for VIS.  Mexican law did not                 
          permit greater than 49-percent ownership by a foreign                        
          corporation.  HESA was established and operated in Mexico; it was            
          a VIS-oriented chain, and it was VIS’ intention to exploit the               
          Exelaris name in the marketplace.  On each HESA hotel was the                
          name Exelaris, and underneath was the name Hyatt and the name of             
          the city.  VIS established an HESA office in Mexico City with                
          approximately 70 to 80 employees.  Fred Lederer, then general                
          manager at Hyatt Regency Acapulco, was named as the first                    
          director general of HESA.  According to the agreement between VIS            
          and HIC (Mexico), Fred Lederer would continue serving as general             
          manager for 18 months, and, thereafter, he would work exclusively            
          for HESA.                                                                    
               The Hyatt International group formed certain companies to               
          provide services that supported its hotel management activities,             
          to wit:  Support services companies, hotel consulting and project            
          development companies, and special purposes companies.  Support              

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Last modified: May 25, 2011