Exhibit 10.43
PETRO/EL PASO AMUSEMENT SERVICES AGREEMENT
THIS PETRO/EL PASO AMUSEMENT SERVICES AGREEMENT (the "Agreement") is made
as of the 30th day of January, 1997, by and between Petro Stopping Centers,
L.P., a Delaware limited partnership ("Petro"), and El Paso Vending and
Amusement Company, a Texas general partnership ("EPAC").
RECITALS
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WHEREAS, Petro owns or leases and operates full service truck/auto travel
center facilities known as "Petro Stopping Centers" (the "Petro Business") the
location of which are more specifically described on the attached Exhibit "A"
(the "Facilities"), and Petro owns the real property and improvements comprising
the Facilities and leases them to Petro;
WHEREAS, the Facilities contain areas for amusements such as video and
electronic games for entertainment (the "Amusements" or "Amusement");
WHEREAS, EPAC is in the business of owning and providing such Amusements to
businesses;
WHEREAS, EPAC provides the Amusements and other services at each of the
Facilities pursuant to an amusement services agreement dated April 30, 1992;
WHEREAS, the April 30, 1992 amusement services agreement will expire on May
1, 1997, and Petro and EPAC desire to extend and amend such agreement whereby
EPAC will provide the Amusements for use at the Facilities and advise Petro as
to how to maximize revenues and goodwill from the location and mix of such
Amusements at the Facilities, and such other truck/auto travel center facilities
that Petro and EPAC may, from time to time, agree shall be included under the
terms of this Agreement (the "Additional Facilities"), and Petro will permit
EPAC to use the game rooms and surrounding areas at the Facilities designated by
Petro for such Amusements (the "Amusement Areas"), and further, will provide all
other services to EPAC described within this Agreement;
NOW, THEREFORE, Petro and EPAC hereby mutually agree to provide the
services and engage in the activities contemplated and described herein for
profit in accordance with the terms set forth below:
1. Services and Duties.
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1.1 EPAC's Duties. In consideration of the revenues to be received
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by EPAC, as set forth in Section 2 below, EPAC shall assist and advise Petro as
to how to maximize revenues and goodwill from the location and mix of the
Amusements at the Facilities, and without further charge or payment by Petro and
Properties, EPAC shall provide the Amusements for use in the Amusement Areas of
the Facilities and Additional Facilities until the termination of this
Agreement. Subject to the terms of this Agreement, EPAC shall be responsible
for determining and shall make all decisions regarding, the type, mix, and
location of the Amusements within the Amusement Areas at the Facilities and
Additional Facilities.
1.2 Petro's Responsibilities. Petro shall provide locations for the
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Amusements within the Amusement Areas at each of the Facilities and Additional
Facilities, if any. Further, Petro shall be responsible for, and shall make all
decisions regarding, the books and records to be maintained and the collection
and remittance of revenues. Petro shall arrange for the connection of the
Amusements to Petro's power supply and shall permit EPAC to operate the
Amusements using Petro's power supply.
Petro shall also supply heat, air-conditioning, water, janitorial and other
services as necessary for EPAC's operation of the Amusements.
1.3 Changes in Responsibilities. Any responsibilities or services to
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be provided by a party hereunder may be assumed or delegated to another party
hereunder or third party pursuant to the mutual written agreement of Petro and
EPAC from time to time.
2. Division, Collection, and Remittance of Revenues.
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2.1 Division of Revenues. During the term of this Agreement, except
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as may otherwise be required by applicable law, Petro shall distribute to EPAC
for its services as described above fifty percent (50%) of the total gross
revenues from the Amusements provided by EPAC at the Facilities (and at such
other Additional Facilities to which services are rendered by EPAC) (the
"Amusements Revenues"), and, Petro shall retain for itself for the services it
provides and the use of the Amusement Areas the remaining fifty percent (50%) of
the Amusement Revenues.
2.2 Collection of Revenues. EPAC and Petro shall, on a weekly basis,
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collect the Amusement Revenues from those Amusements located at the Facilities
and Additional Facilities to which Petro shall provide EPAC with continual
access, and Petro shall retain such weekly collected receipts until it remits
them in accordance with Section 2.4 below. EPAC shall not be obligated to
collect Amusement Revenues from any Amusement if, at any time during the term of
this Agreement, the lock or security code is changed and EPAC is unable to then
have access to such Amusement, and Petro shall use all commercially reasonable
efforts to provide EPAC with access thereto as promptly as practicable after any
such change of a lock or security code or other restriction to EPAC's access to
any such Amusement. Petro shall immediately report to EPAC any Amusement
Revenues collected or received by Petro other than in connection with the
procedure described in this Section 2.2.
2.3 Risk of Noncollectability. Petro shall bear the risk of
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noncollectability of any of the Amusement Revenues through EPAC's inability to
access any Amusement. Petro shall bear the risk as to its fifty percent (50%)
and EPAC as to its fifty percent (50%) of noncollectability as the result of
theft, casualty or other loss resulting from events beyond the control of either
party.
2.4 Remittance. EPAC shall keep complete and accurate records of the
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Amusement Revenues collected hereunder. Petro shall remit to EPAC an amount
equal to fifty percent (50%) of the Amusement Revenues collected during any
monthly period under this Agreement on the fifteenth (15th) day of the month
following the end of the month of collection or receipt by Petro. All amounts
shall be remitted by a check drawn on a United States bank, or by bank wire
transfer. At the time of each payment, Petro shall provide to EPAC a written
accounting of such payment, setting forth in detail the source of such Amusement
Revenues and each Facility and/or Additional Facility from which such Amusement
Revenues were collected. Subject to the provisions of Section 4.3, in the event
either party shall fail to pay the other any sum required under this Agreement
on or before the due date thereof, the amount past due shall bear interest at
the rate of one percent (1%) per month from the due date until paid. If this
rate exceeds the maximum interest rate allowable by law, then interest shall
accrue at the maximum rate allowable by law. Acceptance by either party of any
payments under this Agreement shall not prevent such party from disputing the
amount owed or from demanding more information from the other party regarding
payments finally due at a later date, and such acceptance of any payment by a
party shall not constitute a waiver of any breach of any term or provision of
this Agreement by the other party. Either party may offset any amounts due from
the other hereunder from the Amusement Revenues collected and owed hereunder.
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3. Title to Amusements. Legal title to the Amusements shall at all times
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during the term of this Agreement remain in and with EPAC, and EPAC shall be
treated as the owner of the Amusements for all purposes, including for Federal,
state and local income tax purposes.
4. Books and Records; Right to Audit.
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4.1 Books and Records. EPAC, at its sole cost and expense, shall
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keep complete and accurate books and records of all Amusement Revenues collected
and distributed by it under this Agreement and of all other transactions
relating to the activities of the parties under this Agreement. EPAC shall make
such books and records readily available to Petro, its agents or
representatives, at such reasonable times during normal business hours as Petro
may from time to time reasonably request for inspection, copying and extracting.
EPAC shall keep such books and records at its principal offices in the United
States in accordance with United States generally accepted accounting
principles, consistently applied and EPAC shall retain and keep such books and
records available for five (5) years after the termination of this Agreement for
possible inspection, copying, extracting and/or audit by Petro; provided,
however, that if EPAC wishes to dispose of such books and records at an earlier
date, it may do so if it first provides Petro with a sixty (60) day period
within which to review, retrieve and/or copy any such books and records, at
Petro's expense.
4.2 Right to Audit. At any time during the term of this Agreement
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and for a period of ninety (90) days after the expiration and termination of
this Agreement, either party shall be entitled to an audit of those books and
records of the other party relating to the Amusement Revenues collected and/or
remitted hereunder. Such audit may be conducted by Petro, its employees,
representatives or agents at Petro's sole cost and expense; provided, however,
that if the Amusement Revenues are discovered to have been in excess of ten
percent (10%) of the amounts delivered by EPAC for periods ending before the
commencement of the audit, EPAC shall bear the costs of the audit. Such audit
shall be limited to the determination of the Amusement Revenues and shall be
conducted during normal business hours at EPAC's principal place of business.
4.3 Adjustments. If it is determined as a result of such audit that
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there has been a deficiency in Amusement Revenues paid and reported by EPAC,
then such deficiency shall become immediately due and payable to Petro with
interest thereon at a rate of one percent (1%) per month from the date upon
which it is determined that an underpayment has been made until paid. If this
rate exceeds the maximum interest rate allowable by law, then interest shall
accrue at the maximum rate allowable by law. If it is determined as a result of
such audit that there has been an overpayment of the Amusement revenues by EPAC
to Petro, then EPAC shall be entitled, within thirty (30) days after EPAC
delivers written demand therefor, to a refund from Petro of such overpayment
with interest thereon at a rate equal to the lesser of one percent (1%) per
month or the maximum interest rate allowable by law, in each case from the date
of such overpayment until the date of repayment by Petro.
5. Insurance. EPAC agrees that, at its sole cost and expense, it shall
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provide and maintain in force during the term of this Agreement and any
extension thereof, public liability insurance for the Amusements and for Petro,
adequate to protect against liability for damage claims through public use of or
arising out of accidents occurring in connection with Amusements, with limits of
at least One Million Dollars ($1,000,000) single limit (per occurrence)
liability coverage for both personal injury and property damage and Two Million
Dollars ($2,000,000) aggregate coverage per location and with a deductible of no
more than Five Thousand Dollars ($5,000) from an insurance company licensed to
do business in each state in which the Facilities are located, and which is
financially sound and reputable and which is reasonably acceptable to Petro.
Such insurance policy shall name Petro as an additional insured and shall also
require that Petro be given written notice thirty (30) days prior to
cancellation. Copies of the
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policies shall be delivered to Petro for safekeeping. EPAC agrees that, if such
insurance policies are not kept in force during the entire term of this
Agreement and any extension hereof, Petro may procure the necessary insurance,
pay the premium therefor, and that Petro may offset its costs and charges for
such premium against the Amusement Revenues due to EPAC hereunder.
6. Maintenance of Equipment; Rotation and Removal of Amusements; Service
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Personnel.
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6.1 Maintenance of Equipment. EPAC shall have the sole and exclusive
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responsibility and obligation at its sole cost and expense to maintain the
Amusements in good and proper working order and condition, and EPAC shall
immediately repair and/or replace Amusements upon telephonic or written notice
from Petro of problems with any of the Amusements. EPAC acknowledges and agrees
that great value is placed on the need to maintain the Amusements in good,
normal, and safe working order and condition, that the consuming public and the
industry now associates Petro Stopping Centers with products and services of
consistently high quality, and that the terms and conditions of this Agreement
are necessary and reasonable to assure the consuming public and the industry
that the Amusements will be maintained in the same consistently high quality as
other products and services sold and/or provided by Petro. Accordingly, Petro
may, in its reasonable discretion and after at least five (5) days have elapsed
after Petro has provided notice of a problem with any of the Amusements in
accordance with this Section 6.1, repair or replace any of the Amusements and
offset all sums expended by Petro therefor, and an amount equal to Petro's lost
revenues during the time any of the Amusements is not operating properly,
against amounts otherwise payable to EPAC. EPAC or its representatives may,
during all reasonable business hours and with reasonable prior notice to Petro,
enter the Facilities and/or Additional Facilities to repair or replace any of
the Amusements in disrepair.
6.2 Rotation and Removal of Amusements. EPAC shall have sole control
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over the selection and placement of Amusements at each of the Reserved
Facilities and Additional Facilities as required to meet the needs of the
Amusements customers of the Reserved Facilities and Additional Facilities. The
number, variety, rotation, and removal of the Amusements at each of the Reserved
Facilities and Additional Facilities shall be determined by EPAC, but shall be
consistent with industry standards and with the objective to maximize the
Amusements Revenues by providing high quality and appealing Amusements to the
customers of the Facilities and Additional Facilities.
6.3 Service Personnel. EPAC shall provide the necessary service
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personnel to perform the repairs, maintenance, rotation, and removal of the
Amusements and all other services required of EPAC under this Agreement. The
expenses of employing or contracting for such service personnel and employees,
as well as any associated travel expenses, shall be born by EPAC. Any
employees, contractors or service personnel employed or contracted by EPAC
shall, for all purposes, not be employees or contractors of Petro, including for
Federal, state and local employment tax, workers' compensation, employee
benefit, withholding tax, and employer/employee liability purposes.
7. Indemnification. EPAC hereby agrees to indemnify, defend, and hold
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harmless Petro and its past, present, and future partners, Board of Control
members, directors, officers, agents, partners, representatives, attorneys and
employees and their respective successors and assigns from and against any and
all liabilities, claims, obligations, demands, suits, judgments, costs and
expenses, whatsoever, including but not limited to court costs and attorneys'
fees, which Petro and/or such other indemnified parties may incur or which may
be asserted against any of them, and which arise or occur in any way from, or
are in any way related to the Amusements and/or a breach by EPAC of its
obligations under this Agreement.
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Petro hereby agrees to indemnify, defend, and hold harmless EPAC, and its
past, present, and future directors, officers, shareholders, agents, partners,
representatives, attorneys and employees and their respective successors and
assigns from and against any and all liabilities, claims, obligations, suits,
demands, judgments, costs and expenses whatsoever, including but not limited to
court costs and attorneys' fees, which EPAC and/or such other indemnified
parties may incur or which may be asserted against any of them, and which arise
out of or occur primarily because of an intentional or negligent breach of
Petro's obligations under this Agreement.
8. Assignments and Transfers. During the term of this Agreement, neither
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EPAC nor Petro may assign or transfer its rights and interest in this Agreement
without the prior written consent of the other party which shall not be
unreasonably withheld. Any transfer or assignment of any party's interest under
this Agreement or its profits shall be subject to the rights and obligations
provided in this Agreement. No transfer or assignment shall relieve any party
of such party's duties or obligations under this Agreement except with the
express prior written consent of the other party.
9. Compliance with Local Laws. EPAC hereby agrees to comply, and EPAC
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represents and covenants that the Amusements and the normal operation of the
Amusements currently comply and will during the term of this Agreement
continuously comply, with all applicable local, state and federal laws, rules
and regulations, and EPAC will at all times conduct its activities under this
Agreement in a reasonable, safe and lawful manner. EPAC shall pay the expense
of ensuring such compliance.
10. Additional Facilities. As Petro begins operating additional
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truck/auto travel center facilities or terminates arrangements with other
providers of Amusements as to existing truck/auto travel center facilities which
it operates (previously defined and referenced herein as the "Additional
Facilities"), Petro shall, at least sixty (60) days prior to the termination of
such arrangements or the commencement of operations at such Additional
Facilities, provide notice to EPAC of such Additional Facilities, and EPAC shall
notify Petro if EPAC wishes to provide Amusements to such Additional Facilities
upon the terms set forth in this Agreement by giving written notice to Petro
within thirty (30) days following receipt of notice from Petro. Petro shall
within ten (10) days thereafter notify EPAC if Petro agrees to permit EPAC to
provide Amusements at such facilities, and, if Petro agrees to permit EPAC to
provide Amusements to any such Additional Facilities, the terms of this
Agreement shall apply to the Additional Facilities, except to the extent Petro
and EPAC agree otherwise in writing, and such Additional Facilities will be
added to the attached Exhibit A and incorporated herein for all purposes.
11. Termination. Unless extended by mutual agreement of the parties, this
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Agreement shall terminate upon the earlier of:
(i) May 1, 2002; or
(ii) If any party remains in material breach for thirty (30) days (ten
(10) days if the default is a payment default) after receipt of written notice
from the non-defaulting party of such breach (and describing such breach with
reasonable detail).
EPAC shall remove the Amusements from the Facilities and Additional
Facilities within fifteen days after the termination of this Agreement. The
removal of the Amusements by EPAC shall be done as expeditiously and with as
little disruption as reasonably possible to allow substitute Amusements to be
located within the Amusement Areas at the Facilities and Additional Facilities
to provide Amusement services to Petro's customers on a continuous and
uninterrupted basis.
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12. Tax Matters. This Agreement is not intended by the parties and it is
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specifically agreed that the parties are not creating a partnership or joint
venture for any purpose, whether under federal, state or local law, including,
but not limited to for purposes of the application of Subchapter K of Chapter 1
of Subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), or
any similar state statute. This Agreement is for the purpose of evidencing the
services that each party will provide to the other and the obligations of each
party in connection with such services to be rendered. Each party shall be
responsible for the proper and timely payment of any Federal, state, and local
taxes attributable to its share of the Amusement Revenues.
13. Access by EPAC; Inspection by Petro.
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13.1 Access. Petro agrees to provide EPAC, its agents and employees
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reasonable access to the Facilities or Additional Facilities consistent with
past practices. Petro shall permit the placement of such equipment or devices
as are reasonably necessary for EPAC to provide the services required hereunder
and for the purpose of maintaining, repairing or replacing such equipment and
devices consistent with past practices, provided that EPAC's activities shall
not unreasonably interfere with the operations and activities of Petro in the
Facilities and Additional Facilities.
13.2 Petro's Right To Inspect, Repair, and Maintain Premises. Petro
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reserves the right to enter the Amusement Areas at reasonable times to inspect
them, to perform, maintenance and repair required of Petro, or to make additions
or alterations to any part of the Facilities in which the Amusement Areas are
located, and EPAC agrees to permit Petro to do so. Petro may, in connection
with such alterations, additions, or repairs, erect scaffolding, fences, and
similar structures, post relevant notices, and place moveable equipment without
incurring liability to EPAC for loss of Amusement Revenues. Petro shall use
reasonable efforts to minimize its interference with the use of the Amusement
Areas and the Amusements located therein by the customers of Petro.
14. Notices. Any and all notices or other communications required or
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permitted to be given under any of the provisions of this Agreement shall be
given in writing and shall be deemed to have been duly given when personally
delivered or mailed by first class mail, certified, return receipt requested,
postage prepaid and addressed as follows, if mailed:
To Petro:
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Petro Stopping Centers, L.P.
0000 Xxxxxx Xxxxx
Xx Xxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxx, Senior Vice President
With a copy to:
Xxxxxxx X. Xxxxxxx
Kemp, Smith, Xxxxxx & Xxxxxxx, P.C.
0000 Xxxxxxx Xxxxx
Xx Xxxx, Xxxxx 00000
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To EPAC:
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El Paso Vending and Amusement Company
0000 Xxxxxxx
Xx Xxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, General Manager
With a copy to:
X.X. Xxxxxxxx, Xx.
0000 Xxxxxx Xxxxx
Xx Xxxx, Xxxxx 00000
Any party may change its address and/or the party to whom the notice
is to be sent by giving notice to all other parties hereto in accordance with
this Section 14.
15. Entire Agreement. This Agreement contains the entire agreement of the
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parties hereto regarding the subject matter addressed herein. This Agreement
may not be changed or amended orally but only by an agreement in writing signed
by each party hereto.
16. Counterparts. This Agreement may be executed in several counterparts
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each of which shall be an original and all of which shall constitute but one and
the same document.
17. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF TEXAS.
18. Joint Preparation. This Agreement shall be deemed to have been
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jointly prepared, and no ambiguity herein shall be construed for or against any
party based upon the identity of the author of this Agreement or any portion
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PETRO STOPPING CENTERS, L.P.
By: /s/ Xxxxx X. Zine
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Xxxxx Zine, Executive Vice President
EL PASO VENDING AND AMUSEMENT COMPANY
By: /s/ X.X. Xxxxxxxx
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X.X. Xxxxxxxx, President
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