H Group Holding, Inc. and Subsidiaries - Page 29

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          International group and domestic hotels based on their individual            
          chain allocations.  For 1978, 1979, and 1980, Hyatt Domestic                 
          charged the Hyatt International group hotels approximately                   
          $1,050,000, $1,200,000, and $1,375,000, respectively.                        
               During 1981, HCS contracted for the development of a                    
          computerized reservation system to be called “IMAGE”.  David                 
          Cook, an HIC employee, spent about a year and a half in Germany              
          training to become the systems manager for IMAGE.  During 1983,              
          Mr. Cook returned from Germany, and IMAGE was installed at Hyatt             
          Domestic’s information services headquarters.  Mr. Cook traveled             
          to various cities implementing the IMAGE system.  Another HIC                
          employee trained reservations personnel.  The IMAGE reservations             
          system was not fully implemented.  From 1981 through 1985, HCS               
          expended more than $4 million on the IMAGE system with funds that            
          had been advanced by HHK for the IMAGE system development.                   
               When the Hyatt International group executed a management                
          contract for a hotel that was to be constructed or when a hotel              
          under contract underwent a major renovation, the Hyatt                       
          International group frequently provided design consulting                    
          services, also known as technical services, to the hotel owners              
          in exchange for a fee.  The Hyatt International group was not                
          prohibited from supplying these services to hotels outside the               
          Hyatt chain.  These fees were earned by and payable to                       
          International Project Systems, Inc. (IPS), which was incorporated            

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Last modified: May 25, 2011