Exhibit 10.2
MASTER LICENSE AGREEMENT
THIS MASTER LICENSE AGREEMENT (generally, the "Transaction" or "Agreement") made
and entered into as of the 1st day of July, 2001, by and between DIGITAL THEATRE
RESOURCES CO., a Tennessee general partnership and its affiliates ("DTR") and
XXXXX X. XXXX and SHOWINTEL NETWORKS, INC. (collectively, "Licensee"). The names
of the present DTR affiliates are Malco Stage Road, LLC and Malco Theatres, Inc.
(collectively, "Malco"), superseding any and all understandings and agreements
regarding the subject matter.
RECITALS
Licensee has also represented to DTR that they and their operation have (i)
developed and shall operate at DTR locations a Plasma and Digital Projection
Wall Displays with integrative software control through a site-based server and
systems software that displays advertising and other matter (herein sometimes,
as "Displays" or "Dynamic Displays"), (ii) the capacity and continued capacity
to provide DTR brokered locations with a network operation and interactive
touch-screen access and e-commerce shopping and (iii) that they are developing,
and will continue to develop, products and services that can be used in
conjunction with their servers, master controls and facilities. [Items (i), (ii)
and (iii) are hereinafter collectively sometimes referred to for convenience as
"Licensee's Products and Services."]
Licensee and DTR each perceives mutual benefits of displays of advertising,
trailers and other matter in a DTR location lobby and products sold at DTR
locations by e-commerce, including compact disks and other services and products
of Licensee.
DTR and Malco have entered into a separate agreement contemplating that DTR will
broker Licensee services, products and facilities at Malco locations,
conditioned upon Malco acknowledging (which Malco does as evidenced by its
signature below) that (i) DTR has no obligations to perform under this agreement
or to provide Licensee services, products or facilities and Malco will look
exclusively to Licensee for such services, products and facilities and (ii)
Malco, with DTR's participation, Malco will look exclusively to Licensee; and
Malco will look exclusively to DTR for compensation under this Master License
Agreement.
Given that Malco is about to become the first movie exhibitor to contract with
Licensee for their advertising program and their Kiosk-based programs (including
e-commerce and compact disks programs), therefore, as an inducement for DTR to
enter into and continue to perform this agreement, Licensee warrants and
covenants to DTR as follows:
(i) During the term of this agreement and each extension hereof, the Malco
locations will in all cases be given priority treatment in the
provision and installation of equipment and operational support and
continued operational support despite the size or potential financial
rewards to Licensee or the affiliates of either of them of later
exhibitor prospects or customers of Licensee; and
PAGE 1 OF MASTER LICENSE AGREEMENT
(ii) DTR and Licensee as of this day and date entered into a Broker
Agreement (which is part of this Master License Agreement by
reference) respecting (a) exclusivity for a territory composed of
Shelby County and a radius of 250 miles from the Shelby County borders
and the County of St. Louis, Missouri, together with an area within a
radius of thirty (30) miles of the County of St. Xxxxx xxxxxxx; and
in entering into this Agreement and performing their respective obligations
hereunder, DTR and Malco each relies upon each of said inducements and Licensee
covenants.
NOW, THEREFORE, for and in consideration of the recitals, the sum of One
Thousand ($1,000.00) Dollars cash in hand paid by Licensee to DTR, and other
good and valuable consideration, the receipt and sufficiency of all of which is
hereby acknowledged, and for the further consideration of the covenants,
agreements and stipulations herein contained, the parties hereto do adopt the
recitals into the body of this agreement and further do hereby covenant,
undertake and agree with each other as follows:
1. LICENSE. DTR has brokered an agreement between Malco and Licensee and
pursuant thereto, Malco and Licensee agree as set forth in this Section 1.
1.1 Malco hereby grants unto Licensee the personal and non-assignable rights
and privilege for providing advertising via Displays and such products
[Licensee will provide DTR with Kiosk-based programs that include a network
operation and interactive touch-screen access and e-commerce shopping
including the Kiosk-based Stations] in its locations as designated on the
attached ANNEX "A", and such other locations as DTR may designate in
writing; and in exchange for the master license, Malco's covenants and
undertakings herein expressed and the benefits conferred hereby and to be
conferred upon Licensee, Licensee covenants and agrees that he shall
continuously, and without interruption, provide such advertising and
display and Kiosk-based products and programs during the usual business
hours of the location and each regular business day on which the
location(s) are open for business in strict and faithful compliance with
the requirements herein imposed upon Licensee and the Licensee undertakings
herein set forth. A name change of Licensee or a merger into a corporation
with substantially identical ownership and management will not be deemed to
be an assignment; except, however, as a condition precedent to such change
or merger, there must first be a signed Agreement of assumption of all
obligations by the assignee and on terms satisfactory to DTR and in
compliance with Subsection 8.2(f).
1.2 Licensee shall make no material alterations or installations to or
affecting any Malco location without Malco's prior written approval.
1.3 The term of the DTR Master license herein granted shall commence on July 1,
2001, and shall continue until the later to occur of July 31, 2003, or the
expiration of the separate two (2) year license for any specific DTR
location; but the term of the separate license for any specific location
herein granted shall continue for a period of two (2) years from date of
PAGE 2 OF MASTER LICENSE AGREEMENT
installation; however, the master term and each specific license is subject
to sooner termination as provided by the provisions of Sections 8, 12, 20
and 23 of this Agreement.
2. LICENSE FEES, ETC; BENEFITS. Licensee further covenants and agrees with DTR
to pay each month and no later than the seventh (7th) of the month and to
account for each month unto DTR for the licenses, unless Licensee, because
of their default(s), must account and pay DTR more frequently as otherwise
required by this Agreement:
2.1 A fee equal to fifty (50%) percent of each month's gross revenues,
(hereinafter defined), ["DTR share"], except that for prepaid revenues
received or accrued Licensee shall thereupon pay to DTR fifty (50%) percent
of such prepaid revenues; and the term "gross revenues" includes the
imputed fair value of any barter that arises or in the future arises from
Licensee advertising at any Malco location; and, for e-commerce sales at
DTR locations, fees will be determined by written agreement of the Parties.
(See Subsection 2.5 below providing for additional fees and royalties.)
2.2 All such gross revenues received by Licensee shall be reported and
accounted for, at Licensee's own cost, by the methods used by DTR, or which
may hereafter be adopted or used by DTR.
2.3 Except as required by Subsection 8.2(h), the amount of such gross revenues
effected by Licensee shall be ascertained monthly on a calendar basis and
Licensee shall provide DTR with a full, true and correct statement showing
such gross revenues for the month and such statements shall be provided to
DTR on the seventh of each month, accompanied by a check for the amount, if
any, due to DTR if not paid for the prior month on the seventh (7th) day of
the month.
2.4 Licensee holds all such DTR Share IN TRUST for DTR and Licensee, and
Licensee grants DTR a first-priority security interest in the DTR Share,
now or hereafter arising, arising from operations at or in connection with
DTR locations.
2.5 During the term of this Agreement, Licensee shall punctually pay DTR added
royalties for being the demonstration model in sums equal to five (5%) per
cent of gross advertising revenues at locations (sold or serviced by
Licensee) generated by third parties within a 10-mile radius of any Malco
location(s) and an added five (5%) per cent of gross advertising revenues
generated by each third party which contracts with Licensee after being
shown (prior to contracting with Licensee) operations at a Malco
location(s) or its headquarters; this obligation cannot be avoided or
evaded by an affiliate.
3. INTEGRATION. As far as Malco customer-base and the other public is and may
become aware, Licensee's name will not be publicized; rather, the
advertising display and all Licensee functions will appear to the public as
an integrated part of the Malco operations, except that Licensee may apply
a tasteful identification below the panels and may also show an
identification "spot" in the advertising rotation, subject to Malco's prior
written approval, which will not be unreasonably withheld.
PAGE 3 OF MASTER LICENSE AGREEMENT
4. XXXX - INDEPENDENT CONTRACTOR.
4.1 Licensee is an independent contractor. The parties (including Malco) are
not partners; the parties are not engaged in a joint venture; as far as the
vendors and creditors of Licensee are and may become aware, Licensee is an
independent contractor responsible for purchase and payment of their own
equipment, software and services in their own name and in their own
responsibility and account.
4.2 Licensee agrees to furnish all equipment, software and support for the
operation in the licensed space. Said furnishings and equipment at all
times will belong to and be owned by Licensee, and Licensee shall maintain
them in good condition and state-of-the-art, working order, repair and
replacement.
4.3 Licensee agrees to obtain and pay for, at their own costs, all expenditures
and expenses associated with the services and products contemplated for
Licensee to furnish now or in the future under this Agreement (except to
the extent specifically and expressly excluded in this Agreement and
imposed on DTR). Included in these expenditures and expenses, without
limiting the generality of the foregoing, are:
(a) ALL UTILITIES BILLED AFTER NOVEMBER 1, 2002, WITHOUT EXPENSE TO MALCO.
Licensee shall also pay all governmental charges, of every kind and
nature, which have been or may be levied, assessed or charged against
Licensee's property and goods. All other expenses of operation will be
paid for by Licensee without cost as a part of the services to be
supplied.
(b) All necessary employee or contractor records, sales tax records, and
any other records required by state, county or federal law shall be
kept by Licensee for their own employees, contract employees,
subcontractors and supplier; and further Licensee shall be responsible
for their own personnel, their wages and all taxes thereon or measured
thereby.
(c) All expenditures and expenses related to the acquisition,
installation, operation, maintenance, repair, replacement and
upgrading of the Dynamic Displays and Kiosks. Each Dynamic Display,
Kiosk, and its related hardware and software components, with the
exception of the content provided by Malco, shall remain the property
of Licensee. In the event of termination of any license for a Dynamic
Display, Malco shall not be entitled to use, retain or otherwise
appropriate any rights to any of the intellectual property rights
owned or controlled by Licensee with respect to the Dynamic Display.
4.4 Malco under this Master Agreement is a beneficiary of Licensee's
covenants, undertakings and obligations herein set forth, as is DTR,
and Malco is granted the right and power to enforce such Licensee
covenants, undertakings and obligations hereunder to the same extent
as if the name of Malco is expressly set forth herein in each place,
and DTR has no responsibility of any kind directly to Licensee once
the contract is signed other than to remit to Malco its ratable share
of the DTR share.
PAGE 4 OF MASTER LICENSE AGREEMENT
4.5 During the initial base period expiring July 31, 2003, Malco shall bear all
the costs for utilities for normal and expected cost of utilities, but
Malco will monitor from time to time the utilities to determine whether or
not the utility cost exceeded expectations. Malco will decide where real
estate alterations will be made and shall bear the reasonable costs of
construction to buildings and improvements for the accommodation of
Licensee or Licensee-related equipment.
4.6 Licensee shall bear the cost of returns of product purchased through
e-commerce by any Malco customer for sales originating on or in connection
with Malco locations based upon a liberal return policy in recognition of
the loyalty of Malco customers.
5. XXXX COVENANTS. Licensee hereby further covenants and agrees with Malco:
(a) As a further material inducement for DTR and Malco to enter into or
perform this Agreement, Licensee further covenants and agrees with DTR
and with Malco to provide the priority treatment set forth in the
recitals, on which inducement and covenant both DTR and Malco relies
and will continue to rely.
(b) Licensee's systems shall be fully operational in designated initial
Malco location(s) (which are listed on ANNEX "A" attached) no later
than November 1, 2001.
(c) Licensee is and shall be responsible, at their own cost and expense,
for installation, management, maintenance, repair, replacement and
upgrading of the equipment and systems transactions to provide Malco
with reliable and first-class advertising and shopping systems.
(d) Before displaying advertising in any Malco location(s), Licensee shall
provide Malco advance screening in each case without exception.
(e) Licensee (i) shall avoid operating any display and advertising and
(ii) shall not display any advertising matter or display in any Malco
location(s) unless and until Malco has given its prior written and
specific approval, which it may withhold, delay or condition in its
sole and uncontrolled discretion.
(f) Given that technology is changing rapidly, Licensee shall also be
responsible, at their expense, for upgrading hardware and software to
timely keep pace with technological advances and replacements.
(g) In extension of these covenants, upon the expressed prior written
permission and in each location, present and future, specified by
Malco, Licensee shall install the Dynamic Display, the site-based
server, Kiosk equipment (for compact disks and e-commerce and loyalty
program), "Kiosk-based operating software," "network operations"
software, related high-speed data lines and additional hardware for
the facilitation of Licensee's services. The commencement of full
operation of that Dynamic Display in such Malco locations shall xxxx
XXXX 5 OF MASTER LICENSE AGREEMENT
the beginning of the term of the license for that unit for the
purposes of calculations under Section 2 above.
(h) Licensee shall conduct their operations during existence of this
contract with skill and according to highest professional ethics; and
in extension thereof, Licensee shall deal with advertisers and their
respective agencies and agents with high ethical standards and shall
not charge for nor collect any advertising revenues (unless identified
to the advertiser as prepaid advertising) until actually displayed in
a Malco location.
(i) Two-thirds of the available time in the rotation of advertising
content is expected to be devoted to advertising paid by third
parties. DTR has no obligation to pay advertising-related expenses
except for the production of advertising content intentionally
provided by or on behalf of itself, its subsidiaries and affiliates
and except for those expenses specifically identified in this
agreement. Licensee shall also bear the costs, if any, of conversion
from analog to digital of any of the advertising content.
(j) Also as part of the consideration given to DTR and Malco during the
term of this Master Agreement, Licensee hereby further grants Malco
the right and power to use that equipment which Licensee uses, will
use or dedicates for their use at Malco locations for any or all of
the following Malco purposes: other Malco operations including,
without limitation, highspeed or broadband connections; provided,
however, Malco's right and power to use any such equipment will be
restricted to the extent that it materially interferes with Licensee's
use of such equipment and to the extent that it does not materially
add to Licensee's cost of use.
(k) Licensee shall cooperate fully with Malco in the furtherance and
development of Malco's loyalty program at no additional expense to
Malco. In extension thereof, Licensee's hardware, software and
accounting shall be utilized to maintain Malco's loyalty program and
the hardware, software and accounting shall be developed with full
cooperation by Licensee.
(l) Licensee shall indemnify, defend (at their expense) and hold Malco and
its affiliates (including DTR) harmless from and against any and all
product liability claims that may be suffered or asserted by Malco
customers or any other claimant, family or otherwise, arising out of
defective Licensee equipment or products whose sales are effected at
Malco locations or in conjunction with Malco operations.
(m) The Licensee advertising display, and their concept, and the Licensee
Products and Services and Kiosk-based sales covered by this Master
License Agreement shall be exclusively available in Malco locations
for five (5) years from date (or, if earlier, upon termination of the
license hereunder for that location) within the radius hereinafter
described; and Licensee shall under no circumstances make such goods
and services available, directly or indirectly, to any other
exhibitors within a 20-mile radius of each Malco location during such
PAGE 6 OF MASTER LICENSE AGREEMENT
five (5) year period unless prior written consent is given by Malco in
writing, which Malco may withhold in its absolute discretion. Licensee
shall deal with advertisers and their respective agencies and agents
with high ethical standards and shall not charge for or collect any
advertising revenues (unless identified to the advertiser as prepaid
advertising) until the advertising is actually displayed in a Malco
location.
6. REPRESENTATIONS AND WARRANTIES. As further material inducements for Malco
and DTR to sign this Agreement and to continue to perform under this
Agreement, Licensee hereby represents and warrants to Licensee and Malco,
and each of them, each of the following, which are continuing
representations and warranties:
(a) Standard vendor representations and warranties, including that the
equipment (including systems and software) have been pre-tested and
are and will be bug-free and will be continuously operational.
(b) Licensee has developed a Plasma and Digital Projection Wall Display
with integrative software control which presently consists of plasma
screens with integrated software, as well as digital projection wall
displays, that are controlled through a site-based server which stores
content for the Dynamic Display and a high-speed connection to a
remote server. (The number of panels may vary depending upon Malco and
Licensee objectives, as adjusted.)
(c) Licensee has participated in the design and exclusively owns and
operates and shall continuously keep in first-class, reliable
operation, without interruption, "dynamic display operating system"
software which permits each of the four panels of the Dynamic Display
to present different or coordinated multi-media digital content. The
multi-media digital content displayed on each of the panels of the
Dynamic Displays is intended to assist in the promotion of Malco
Theatres or generate revenues as follows:
(i) Project or display "trailers" or other promotional materials
relating to attractions and concessions at the Malco Theatres.
(ii) Project or display "loyalty program" information, including
special discount and contest activities.
(iii) Project or display advertisements by paying sponsors and
advertisers.
(iv) Project or display general information of public interest (via
text or video transmission) or certain productions related to
Malco Theatres' loyalty or merchandising programs.
(v) Multiple panels may be linked to display one contiguous display
depending upon content to be displayed.
PAGE 7 OF MASTER LICENSE AGREEMENT
(d) Licensee has participated in the design of and exclusively owns
software and shall continuously link, manage and operate digital
transmissions in each and all of the Dynamic Displays through a
process known as "network operations."
(e) Licensee has developed, exclusively owns and, as and where designated
by Malco, shall operate Interactive Touchscreen Access Stations (the
"Kiosk-based Stations") controlled through integrated software capable
of integration with a site-based server.
(f) Licensee has participated in the design, exclusively owns and shall
operate "Kiosk operating system" software for the Kiosk-based Stations
which permits users to engage in high-speed digital transactions,
including "e-commerce shopping," Internet-based entertainment, and
purchasing of downloaded digital multi-media content (such as recorded
music or films).
(g) Licensee is the sole owner, legally and beneficially, of the Kiosk
Operating System and there are no persons, government(s) or entities
who have, or have asserted a claim to, ownership, lien or any interest
in the Kiosk Operating System, including, without limitation, any
persons or entities who have, or have asserted a claim to, royalties
or income from the Kiosk Operating System or from any of its features
or components.
7. INDEMNITY. Licensee agrees to defend, at their expense, and to indemnify
and hold Malco harmless from and against any and all claims, actions,
proceedings or lawsuits asserted or filed against Malco or DTR arising out
of the development, organization, ownership, use or marketing of Licensee's
products or services, or any combination of the foregoing (herein
collective as "contest"). The indemnity in this Section 7 is in addition to
the indemnities at Subsection 5(l) and Section 21 herein. However, Malco
reserves the right (although it is not obligated to do so), at its expense,
to employ its own separate counsel to appear and represent Malco in any
such contest or to monitor the contest, and Licensee agrees that their
counsel shall cooperate fully with such separate counsel employed by Malco.
8. REMEDIES.
8.1 XXXX'X REMEDIES UNDER THE AGREEMENT. Remedies for default by Malco of its
duties or obligations under this agreement: only termination.
8.2 MALCO'S REMEDIES UNDER THE AGREEMENT. Upon any default by Licensee; Malco
is empowered to exercise any one following remedies:
(a) Right and power to terminate at any time for any reason, or no reason,
that Malco deems advisable, in Malco's sole and uncontrolled
discretion; and Licensee shall remove equipment within one hundred
twenty (120) calendar days thereafter.
(b) Recover all amounts to which Malco is entitled to under
revenue-sharing.
PAGE 8 OF MASTER LICENSE AGREEMENT
(c) Obtain a restraining order and injunctive relief whenever the
exclusivity or royalty provisions are violated or any other equitable
remedy or all of same.
(d) Malco enjoys the option, on termination by Licensee or by Malco
whenever Licensee defaults, to buy the plasma screens, digital
projectors, screens, and any other hardware or non-proprietary
software for a price fixed by formula.
(e) Malco shall also be direct additional beneficiary of each of
Licensee's contracts with advertising providers, including an
intermediary (who places advertising): Malco shall have right and
power to enforce Licensee's agreement with the advertiser, agency or
advertising provider.
(f) Given that Licensee's programs hereunder are made exclusively
available in Malco locations for five (5) years and not made available
to any other exhibitors within a twenty (20) mile radius of each Malco
location unless prior written consent is given by Malco in writing,
Malco shall enjoy the remedies of restraining order or injunction,
without bond, to enforce this exclusivity and its other remedies
hereunder.
(g) In the event the Licensee fails to make the specified periodic fee or
royalty payment and default continues for a period of fifteen (15)
days after written notice to Licensee of such default, then and in
that event the Malco shall have the added power and remedy of
declaring this License Agreement thereupon terminated and have the
further right and remedy to collect from the Licensee the entire
unpaid balance.
(h) In the events that Licensee for two (2) consecutive months fails to
make the specified periodic fee or royalty payment on the scheduled
date for payment or in the events that Licensee fails to make the
specified periodic fee or royalty payments on the scheduled date three
times within any period of twelve (12) consecutive months, then in
either such case Malco or DTR shall have the added power and remedy of
declaring this license agreement thereupon terminated with the right
to make demand and collect from Licensee the entire unpaid balance or
DTR shall have the added power and remedy of requiring that the
requirements of Section 2 be tightened in the following manner: The
amount of gross revenues effected by Licensee under Section 2.3 shall
be ascertained monthly or semi-monthly as designated by DTR and that
Licensee covenants and agrees with DTR to pay DTR weekly or bi-weekly
as required by DTR each Tuesday following the conclusion of the prior
week or bi-week.
8.3 REMEDIES CUMULATIVE. Except as may be otherwise specifically provided
herein, all rights, privileges and remedies afforded the parties by this
Agreement shall be deemed cumulative and not exclusive and the exercise of
any one or more of such remedies shall not be deemed a waiver of any other
right, remedy, privilege provided for herein or available at law or in
equity. Remedies may be exercised separately and sequentially.
PAGE 9 OF MASTER LICENSE AGREEMENT
9. ANNOUNCEMENTS. Until the execution and delivery of this Agreement, the
timing and content of all announcements, publicity or reports regarding any
aspect of the Transaction to the financial community, advertising
community, government agencies, customers, suppliers or the public
generally must be mutually agreed upon in writing in advance and either
party may exercise its independent judgment about any detail of any such
announcement.
10. GOVERNING LAW. This letter shall be governed by and construed under the
laws of the State of Tennessee as applied to contracts entered into solely
between residents of and to be performed entirely in such state, and the
forum for any dispute will be a court of general jurisdiction within Shelby
County, Tennessee.
11. EXPENSES. Each party will pay their/its own expenses incident to the
negotiation, preparation and execution of this Agreement and the
transactions contemplated thereby, including all fees and expenses of
counsel and accountants and any broker or finder commission.
12. TERMINATION. Licensee is hereby obligated (i) to give at least thirty (30)
days advance written notice before termination of service and before
removal of any of the equipment and (ii) to remove Licensee's equipment
from Malco's premises not more than seven (7) calendar days from their
receipt of notice in the event of termination by Malco or its affiliate.
Upon termination this Agreement shall have no further force or effect
except for the obligations regarding announcements and expenses under
Sections 3 and 5, which obligations shall survive for a period of one (1)
year from date hereof.
13. CONTENT.
(a) Malco at its election at any time and from time to time may provide
content to Licensee for the display, which may include "trailers" or
other promotional materials relating to attractions and concessions at
the Malco Theatres, and such display shall be made at no charge to
Malco.
(b) Licensee shall continuously provide all other content for the Dynamic
Displays and advertising and sponsorship content for the Dynamic
Displays subject to Malco's powers under Subsection 8(e).
14. ACCESS. Licensee hereby agrees to and grants to Malco reasonable access to
Licensee's books and records.
15. SUBORDINATION. Licensee's banker(s) as a condition, precedent to the
effectiveness of this Agreement shall deliver to Malco (in form
satisfactory to Malco) that such Lender(s) thereby subordinates its
security interest in this Agreement and in the revenues and equipment
involved in this transaction to Malco's position and not to disturb the
same.
PAGE 10 OF MASTER LICENSE AGREEMENT
16. LIABILITY. Each party has no obligation or liability to the other, other
than as expressly set forth in the Agreement.
17. SUBJECT TO. The licenses granted to Licensee hereunder are in every case
subject to terms or conditions of leases between Malco, other exhibitors
and third-parties.
18. BASE STATION. Licensee, DTR and Malco each acknowledge that the first
on-site server is designed to be the "base station" for multiple
applications to be delivered and installed per a roll out schedule as the
systems become available and the market warrants.
19. FURTHER WARRANTIES BY EACH PARTY. Each party and signatory hereto further
represents and warrants to, and covenants and agrees with, each other party
and signatory, as of the date of this Agreement Date and as of the
Assignment Date, as follows:
(a) Said Party/Signatory has the full and unrestricted right, power and
authority to enter in to this Agreement and to consummate the actions
contemplated in this Agreement without the joinder, consent, approval
or concurrence of any other individuals or entities or of any court or
governmental agency; and
(b) Upon the satisfaction of the pre-conditions of this Agreement, each
Party/Signatory shall take, and agrees to take, the actions and
execute and enter into the instruments and agreements contemplated
herein to be taken or executed.
20. ABATEMENT. In the event of fire by which the building in which said
premises are located shall be destroyed so as to make it impossible to
carry on business therein, then this license as to that exhibitor
location(s) shall become terminated and be of no further force and effect
as to Licensee operations in that particular exhibitor location(s); but in
case said premises shall be only partially destroyed, exhibitor shall have
the right at its own option, within a reasonable time to place said
premises in a suitable condition for business purposes and to continue
business therein, in which event said license for that exhibitor location
shall not be terminated. In the event that during such repairs Licensee is
not able to conduct their operation thereat, this Agreement as to that
location shall be suspended for that period of time it takes the exhibitor
to place said premises in a workable condition.
21. INDEMNITY; INSURANCE.
21.1 The parties mutually agree that, at all times, each will save the other
harmless, defend and indemnify the other against all actions, claims,
demands, liabilities and damages (including suits for infringement of
trademarks), which may, in any manner, be imposed upon or incurred by
either party as a consequence of or arising out of any act, default or
omission on the part of either party, or their/its employees or agents, all
in connection with the operation of their/its business and that of any
affiliate or subsidiary, or in other words, the party hereto in default
will bear the burden as outlined above.
PAGE 11 OF MASTER LICENSE AGREEMENT
21.2 Licensee shall carry the following insurance:
Workmen's Compensation for the employees of Licensee to the full extent
legally required;
Comprehensive public liability in limits of $300,000.00/$500,000.00 for
bodily injury and $2,000,000.00 for property damages.
21.3 The foregoing insurance policies shall cover DTR, Malco and Licensee, and
shall be written by companies reasonably satisfactory to DTR. Certificates
for such policies with DTR, exhibitor and landlord as added insureds and
loss payees shall be furnished by Licensee to Malco. The premiums required
to keep said insurance policies in full force and effect shall be paid by
Licensee. If Licensee fails to do so, either DTR or Malco may effect such
insurance, pay the premiums thereof, charge the same to Licensee, and be
reimbursed from the gross receipts of the business of Licensee. Such policy
or policies shall be in such form and with such insurance companies as
shall be reasonably satisfactory to Landlord with provision for at least
twenty (20) days' notice to Malco and landlord of cancellation. At least
ten (10) days before the expiration of any such policy Licensee shall
supply Landlord and DTR with a substitute therefor with evidence of payment
of the premiums thereof. If such premiums shall not be so paid and/or the
policies therefor shall not be so delivered, then Landlord or DTR may
procure and/or pay for the same and the amounts so paid by Landlord, with
interest thereon at the rate of six (6%) percent per annum from time of
payment, shall be collected out of gross revenues or interest.
22. BANKRUPTCY. In the event a petition in bankruptcy is filed by or against
either of the parties hereto, or if either party should become insolvent
within the meaning of any State or Federal Insolvency Law, or should make
an assignment for the benefit of creditors, or if a receiver for all or any
part of the business of either party is appointed an such receivership
shall not be vacated within five (5) days from the date of their or its
appointment, or if any property or assets of either party shall be attached
and such attachment shall not be vacated within ten (10) days, then in
either of said events this Agreement shall be deemed breached by the party
at fault, and the other party shall be entitled to be released from all
liability for further performance of this Agreement, and if Licensee is the
defaulting party, then the Malco shall have the right to re-enter the
premises. This Agreement shall, in no event, constitute an asset of either
party so as to be assignable to anyone, including a receiver or trustee in
bankruptcy, by operation of law or otherwise.
23. MATERIALITY. Each and all of the agreements of Licensee herein contained
are material and of the essence of this Agreement, and if Licensee shall
default or permit a breach in whole or in part of any covenants, agreements
or stipulations herein contained to be kept by him, Malco may give Licensee
notice, in writing, to be sent by United States registered mail, of said
breach or default, and Licensee shall then have seven (7) days after said
notice within which to cure and rectify said breach or default. In the
event Licensee fails to rectify said breach or default within seven (7)
days, he shall then be lawful for the Malco, its successors or assigns,
without further notice, to declare this Agreement and privilege terminated
PAGE 12 OF MASTER LICENSE AGREEMENT
and resume possession of the premises from Licensee, and remove Licensee's
goods and equipment (including software and systems) from the premises or
alternatively to enjoy and utilize any other remedy afforded by Subsection
8.2(h).
24. EARLY TERMINATION. Anything to the contrary notwithstanding, each party is
granted and shall have the absolute and uncontrolled right and option to
terminate this license agreement at any time upon giving one hundred twenty
(120) days' written notice to the other party of intention to do so, and
upon the lapse of the one hundred twenty (120) days exercise of such right
by either party, this license agreement and all licenses hereunder shall
cease and terminate on the one hundred twentieth (120th) day as fully and
to all intents and purposes as if that were the date originally fixed for
termination.
25. SOLE AGREEMENT. Other than Malco's separate agreements with its landlords
and exhibitor(s), this Agreement constitutes the only agreement between the
parties hereto with reference to the conduct of the business hereinabove
set forth for the term therein stated, and no modification nor any waiver
of any provision hereof shall be binding upon either party or signatory
unless it shall be in writing and signed by all parties, except for the
later written designations by Malco for added locations subject to this
Agreement.
26. NO THIRD PARTY BENEFICIARY. Nothing in this agreement, expressed or
implied, is intended or shall be construed to confer upon any person, firm,
corporation, or entity, other than the parties, Malco and Malco's
affiliate(s), any right, power, remedy or claim under or by any reason of
this Agreement, this Agreement being intended for the sole and exclusive
benefit of the parties, Malco and Malco's affiliate(s).
27. PRIOR AGREEMENTS SUPERSEDED. DTR and Licensee have entered into a Broker
Agreement dated of even date herewith, and with that exception, this
Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof, and supersedes any and all prior understandings
or oral or written agreements between the parties (including without
limitation, inventors, developers, investors, co-owners or any combination
of the foregoing) respecting such subject matter. As a further material
inducement for DTR to enter into and perform this Master License Agreement,
DTR also relies upon the foregoing as well as Licensee's warranty of
ownership and authority.
28. SURVIVAL. The warranties, representations, covenants and agreements of the
parties set forth herein shall survive The Execution Date and any
termination of this Agreement.
29. NON-WAIVER. No failure to exercise, no indulgence and no delay in
exercising, on the part of Malco of any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, remedy or privilege hereunder
preclude any other or further exercise thereof or the exercise of any party
or Malco's affiliate(s) of any other or later-arising rights, powers,
privileges, remedies or entitlements hereunder.
30. ATTORNEY'S FEES. If either Party finds it necessary to initiate legal
action or proceedings for the enforcement or interpretation of this
PAGE 13 OF MASTER LICENSE AGREEMENT
Agreement, then the prevailing party shall be entitled, in addition to
other remedies authorized by applicable law, to recover reasonable
attorney's fees and expenses incurred in such matter.
31. NOTICES. Any notice, communication, request, reply or advice, (hereinafter
severally and collectively, for convenience called "notice"), in this
Agreement provided or permitted to be given, made or accepted by Malco or
either party to the other party must be in writing and may, unless
otherwise in this instrument expressly provided, be given or be served by
advance written notice to the addressee, delivered by hand, by certified U.
S. Mail return receipt requested, by recognized overnight courier service
or recognized local courier service, by telecopy or its equivalent,
addressed to Licensee at their last known home address and, if to either
Malco or DTR, at its principal office in Shelby County, Tennessee or to the
residence of its President, Chief Executive or its Vice-President.
32. FURTHER INSTRUMENTS AND ACTIONS. Malco and each party agrees to do all acts
or deliver such additional documents after signing hereof as are necessary
to effectuate the intent of the transaction contemplated herein as Malco or
a party may reasonably request from time to time for the effectuation and
implementation of their/its duties and obligations hereunder.
33. SEVERABILITY. If any term, covenant or condition of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby and each remaining term, covenant or
condition of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
34. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of Malco and the parties, and their respective affiliates,
successors and assigns, heirs and personal representatives. DTR may assign
its rights hereunder to any corporation or other legal entity controlled by
it and upon the assignment, the assignee shall be deemed to have assumed
all liabilities and obligations of the DTR under this Agreement, but in
addition, neither DTR nor any exhibitor hereunder shall be relieved from of
their/its liabilities or obligations under this Agreement. Licensee may
assign this Agreement only as permitted in Section 1.1 above.
35. CONSTRUCTION OF AGREEMENT. In construing this Agreement, all headings and
titles are for the convenience of the parties only and shall not be
considered a part of this Agreement. Whenever required by the context, the
singular shall include the plural and the masculine or neuter shall include
the feminine and neuter and vice versa. This Agreement shall not be
construed as if prepared by one of the parties, but rather according to its
fair meaning as a whole, as if both parties had prepared it. The terms and
provisions of this Agreement represent the results of negotiations between
the parties, each of which has been represented by legal counsel of
their/its selection, and neither of which has acted under duress or
compulsion, whether legal, economic or otherwise. Consequently, the terms
and provisions of this Agreement shall be interpreted and construed in
accordance with their usual and customary meanings, and the parties hereby
expressly waive and disclaim in connection with the interpretation and
construction of this Agreement any rule of law or procedure requiring
otherwise, including, without limitation, any rule of law to the effect
PAGE 14 OF MASTER LICENSE AGREEMENT
that ambiguous or conflicting terms or provisions contained in this
Agreement shall be interpreted or construed against the party whose
attorney prepared this Agreement or any earlier draft of this Agreement.
36. SUBORDINATION. Upon written request by DTR or the applicable exhibitor,
Licensee shall execute and deliver an agreement subordinating this
Agreement to any first mortgage (first lien deed of trust) or security
agreement upon the Premises of any of such exhibitor's lenders. Such
subordination shall be upon the express condition that the validity of this
Agreement shall be recognized by the mortgagee, and that, notwithstanding
any default by Malco or its affiliate(s) with respect to said mortgage or
any foreclosure thereof, Licensee's possession and rights of use under this
License and to the Demised Premises shall not be disturbed by such lender
or purchaser unless and until Licensee shall materially breach any of the
provisions hereof in this License or Licensee's license for use hereunder
shall have been terminated in accordance with the provisions of this
License.
37. TERM. The term of each License hereunder is for a period of two (2) years,
commencing on the date of each License ("the License Commencement Date").
Each License shall be automatically renewed for an additional term of six
(6) months unless either Licensee or DTR gives ninety (90) day advance,
written notice prior to the end of the original term and the renewal term
of their/its intention not to renew.
38. DELIVERY AT END OF LICENSE AGREEMENT. The said Licensee agrees to deliver
up to the said exhibitor all of the said premises at the expiration of this
Master License Agreement or termination hereof in good order and condition,
and make good all damages to said premises, ordinary wear and tear,
casualty and damage by the elements excepted.
39. ADVERTISING. Unless otherwise agreed in this License Agreement the Licensee
shall not be permitted to affix or attach, or cause to be affixed or
attached, any signs on the premises herewith License Agreement without
consent in writing from the Lessor.
Upon termination of this License Agreement, Licensee shall remove any sign,
advertisement or notice painted on or affixed to the License Agreement
premises and restore the place it occupied in the condition which it
existed as of the date of this License Agreement.
40. WAIVER OF SUBROGATION. DTR, Malco and Licensee hereby waive any right of
subrogation which they may have against the other for any losses paid to
them on insurance policy or policies carried on the property to the extent
permitted by the terms of such policy or policies.
41. MISCELLANEOUS.
A. The reference in this Master License Agreement to an "Annex" or
attachment is in each case to an annex or attachment which is
incorporated into this Master License Agreement as fully as if set
forth herein verbatim.
PAGE 15 OF MASTER LICENSE AGREEMENT
B. Titles and headings to sections or paragraphs hereof are for the
purpose of reference only, and shall in no way limit, define or
otherwise affect the provisions hereof.
C. If any term, covenant or condition of this Agreement shall to any
extent be invalid or unenforceable, the remainder of this Agreement
shall not be affected thereby and each remaining term, covenant or
condition of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
D. As used herein, the phrase "gross revenues" shall include all revenues
on an accrual basis derived from displays of advertising in Malco or
other locations that are received or receivable by Licensee, less
sales taxes payable and also includes, without limitation, the imputed
fair value of any barter that arises or in the future arises from
Licensee advertising in any Malco or other location. A separate agreed
schedule, signed by the parties, will specify the amounts or
revenue-share due to Malco for products and other services sold at or
arising from Malco locations.
E. Terms used herein applicable to security agreements, security
interests, liens and the like shall have the same meanings
respectively ascribed to them by the uniform commercial code as
adopted in the State of Tennessee, unless such term (s) is otherwise
expressly defined in this Agreement.
F. The word "location" and the phrase "DTR location," as used herein, is
meant broadly to include any Malco movie theater and bowling center,
wherever located, that has been designated by DTR as licensed to
Licensee, unless the context manifestly indicates a different meaning
for the word "location."
G. The word and concept "Kiosk-based" and the phrases products or
e-commerce or Touchscreen, CDS, separately or together are used
interchangeably in this Master License Agreement to refer to a variety
of products sold at Malco and other services and product of Licensee
[see also Kiosk-based product].
H. The words "advertising" and "wall display" may be used interchangeably
in this Agreement, unless contrary to the expressed terms.
I. The word "shopping," as used herein, is meant to include Licensee's
network operation, interactive touch-screen access or e-commerce
shopping or any combination of them.
J. The phrase "Malco customers" is meant to include patrons and guests,
whether paying or non-paying or accompanying a customer.
K. The word "affiliate," as used herein, is intended to mean broadly each
business or investment affiliate of Xxxxx X. Xxxx ("Xxxx") and
Showintell Networks, Inc. ("Showintell") or either of them, whether
presently existing or hereafter created, engaged in advertising,
PAGE 16 OF MASTER LICENSE AGREEMENT
displaying or exhibiting on plasma screens in theaters and includes
each such entity in which either Xxxx or Showintell possesses one or
more of the following: (a) an ownership interest or creditor interest,
(b) significant participation in the control of such entity, (c) a
directorship (or board membership) or membership in senior management
or (d) a substantial influence.
42. COLLATERAL. Malco may file this Agreement or a financing statement UCC-1
with public records to perfect the security interests granted to Malco by
this Agreement in DTR Share, present and future, however arising, and Malco
has and may exercise the rights, powers and remedies of the holder of a
first priority security interest under the Tennessee Uniform Commercial
Code as to the DTR share. Licensee authorizes and empowers DTR to execute a
financing statement as Licensee's attorney in fact to perfect DTR's
security interest granted by this instrument.
43. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by any one or more of the
parties hereto, and each such executed counterpart shall be, and shall be
deemed to be, an original instrument and to have the forces and effect of
an original as against the parties signing the counterpart, but all
counterpart shall constitute, and shall be deemed to constitute, in the
aggregate but one and the same instrument.
44. FAXED ORIGINALS. Execution of this document may be accomplished by
facsimile transmission of signed copies of this Agreement followed by
delivery of the original signed hard copies in the manner provided herein.
[END OF PAGE]
PAGE 17 OF MASTER LICENSE AGREEMENT
IN WITNESS WHEREOF, each party has caused this instrument to be executed by and
through its duly authorized officers or owner the day and year first above
written. Malco has caused this instrument to be executed as of the day and year
first above written to evidence its obligations and undertakings set forth in
this instrument, as well as its express consent to the contents of this
instrument.
XXXXX X. XXXX
----------------------------------------
Xxxxx X. Xxxx
SHOWINTELL NETWORKS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
DIGITAL THEATRES RESOURCES CO.
A Tennessee General Partnership
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MALCO THEATRES, INC.
An Arkansas Corporation
By:
-------------------------------------
Xxxxxx X. Xxxx
Vice President
PAGE 18 OF MASTER LICENSE AGREEMENT
