Exhibit 10.16
JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("Agreement") is entered into and is
effective as of May 29, 1998 by and between Cinema Ride, Inc. ("CR") and Xxxx
& Buster's, Inc. ("D&B").
WHEREAS, CR has developed a location-based entertainment attraction
known as Cinema Ride ("Cinema Ride"); and
WHEREAS, CR is the owner and/or exclusive licensor in the United States
of the entire right, title and interest to the Cinema Ride and its component
parts for utilization in connection with retail entertainment environments;
and
WHEREAS, D&B owns and operates an entertainment center in Atlanta,
Georgia known as "Xxxx & Buster's" ("Facility"); and
WHEREAS, D&B and CR desire to form a joint venture to install and
operate a Cinema Ride in the existing "Xxxx & Buster's" entertainment center
in the Facility ("Installation").
NOW THEREFORE, it is agreed as follows:
ARTICLE I
FORMATION OF JOINT VENTURE
1. The parties desire to constitute themselves a joint venture for the
purposes and upon the terms, covenants and conditions hereinafter set forth
(herein the "Venture"). The parties hereto are herein sometimes collectively
referred to as the "Venturers" and individually referred to as a "Venturer".
2. The name of the Venture is the "D&B/CR - Atlanta Joint Venture" and
all business done or undertaken by the Venture shall be done and conducted
under said name and style, except that the Installation shall be operated
publicly under the trade name "Cinema Ride at Xxxx & Buster's".
3. The principal place of business of the Venture shall be such place
or places as the Venturers shall from time to time mutually determine. Until
changed by the Venturers,, the principal place of business shall be at the
Facility (defined below), except that the books and records of the Venture
may be kept at the offices of D&B in Dallas, TX.
4. The business of the Venture shall be limited to the installation
and operation of the Installation in the Facility and all business necessary
and related thereto.
ARTICLE II
CAPITAL CONTRIBUTIONS
1. D&B and CR shall each contribute $100.00 as their respective
initial capital contributions to the Venture.
2. Should additional funds be required by the Venture as provided in
Paragraph 5 of Article VI, each Venturer shall contribute its share, if any,
of such cash requirements as determined in accordance with Paragraph 5 of
Article VI promptly upon written demand of the other Venturer.
3. Neither Venturer shall have the right or power to (a) withdraw or
reduce its capital contributions, except as a result of the dissolution of
the Venture or as otherwise provided by law; (b) bring an action for
partition against the Venture or the Installation; (c) cause the termination
and dissolution of the Venture, except as set forth in the Agreement; or (d)
demand or receive property other than cash in return for its capital
contributions. Except as expressly provided in Article VI, neither Venturer
shall have priority over the other for the return of capital contributions.
No interest shall be payable on the contributions of the Venturers.
ARTICLE III
RESPONSIBILITIES OF VENTURERS
1. In addition to its capital contributions to the Venture pursuant to
Paragraphs 1 and 2 of the Article II:
a) D&B will perform or provide the following for the Venture, at
its sole expense except as otherwise specifically provided herein:
1) Provide the space in the Facility for the Installation
(the "Premises") and all management staff, rent, property insurance, real
estate taxes, utilities, and maintenance for the Premises;
2) Prepare the Premises for the Installation in accordance
with CR guidelines, but both parties will have mutual approval rights for the
design of the Installation, including the installation and cost of those
items set forth on Exhibit A hereto.
3) Provide input into the marketing, operations, theming and
staffing issues as they arise; and
4) Act as the "managing venturer" of the Venture and as such
maintain all books and records of the Venture and prepare and be responsible
for all Federal, state and local tax and information filings on behalf of the
Venture. D&B shall provide CR duplicate copies of monthly bookkeeping and
weekly debit card summaries for the Cinema Ride at the end of each month.
b) D&B will perform or provide the following for the Venture, the
costs of which shall be recovered by D&B as "Direct Operating Costs" or
"Major One-Time Costs" subject to and as provided in Paragraphs 3(a) and
3(b)of Article VI:
1) Operate the Installation on a day-to-day basis,
including, but not limited to, providing personnel, training, advertising and
promotion (in amounts as agreed by the parties), appropriate property
insurance (but only for any property owned by the Venture; D&B shall provide
insurance on the Premises at its own expense, CR shall provide insurance on
the
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Equipment at its own expense and each party shall name the other party on its
liability insurance policy), and maintaining the Installation in a clean,
orderly and safe manner; and
2) Pay for expendables, ticket stock, etc. and any direct
marketing expenses for the attraction; and
3) Apply for, and diligently attempt to obtain, all
necessary federal, state and local governmental consents, permits or licenses
which may be necessary for D&B to install and carry on the operation of the
Installation in the Premises.
With respect to advertising and promotion the parties agree that there
will be initial, dedicated advertising and promotion expenditures in an
amount to be agreed upon, which may be higher than 5% of first year Venture
revenues, but thereafter ongoing advertising and promotion expenditures will
not exceed 5% of Venture revenue annually, unless otherwise agreed by both
parties.
2. In addition to its capital contributions to the Venture pursuant to
Paragraphs 1 and 2 of Article II, CR will perform or provide the following to
the Venture at its expense except as otherwise specifically provided herein:
a) Manufacture, ship and install at the Premises the Cinema Ride
equipment package including signage and props (the "Equipment"), as specified
on Exhibit B hereto, with signage and props subject to D&B's approval, which
approval will not be unreasonably withheld.
b) Provide on-site training for the personnel at the Facility.
CR should be responsible for directing the repair and maintenance of the
Equipment (other than routine maintenance and repair by the on-site staff);
however, the Venture will bear the expense, subject to the approval of D&B,
which will not be unreasonably withheld. All work shall be performed by
qualified technicians who receive authorization from CR, and who will be
local service companies, not affiliated in any way with CR;
c) Maintain the Equipment in timely fashion;
d) Provide a non-exclusive license for use of the Cinema Ride and
any related trademarks at the Installation;
e) Provide one copy of the current Operations Manual, and a copy
of all additions, revisions, modifications, updates and addenda to such
manual as deemed appropriate in CR's sole discretion (the "Manual"). D&B
agrees that the Manual contains confidential information and "Trade Secrets"
subject to Paragraph 7 of Article IX of this Agreement and, in its entirety,
constitutes a compilation of information that is not available in equivalent
form to the general public. CR is the exclusive owner of all property and
proprietary rights to the information revealed in the Manual and to the
Manual itself. D&B agrees not to disclose the Manual to any person (i)
except to employees and agents of D&B and the Venture for purposes related
solely to the operation of the Installation and (ii) except as provided in
Paragraph 7 of Article IX; nor shall D&B use, reprint or reproduce the Manual
other than as expressly authorized by CR hereunder.
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f) Provide input into the design, marketing, operations, theming
and staffing issues as they arise and on-going service and marketing support.
3. a) CR will provide to the Venture any written or verbal
warranties it receives on any part of the Equipment from a manufacturer, but
CR makes no other warranty with respect to any part of the Equipment.
b) CR warrants that it has the right to license the Cinema Ride
and related trademarks to the Venture.
4. Except as expressly provided in paragraph 3 of Article VI, no
compensation, drawings, or other remuneration shall be payable by the Venture
to either of the Venturers hereto, or to their respective officers, directors
and shareholders, if any.
ARTICLE IV
MANAGEMENT
1. D&B will be responsible for, and will have authority to manage, the
day-to-day operations of the Installation and the Venture so long as the
Installation is operated in accordance with the Manual.
2. Notwithstanding any contrary implication in Paragraph 1 of this
Article IV, D&B and the Venture shall not do any of the following without
CR's prior written consent:
a) Operate the Installation under any name other than "Cinema
Ride at Xxxx & Buster's" or use any other registered or unregistered
trademark, service xxxx, logo or trade or service name in connection with
operation of the Installation;
b) Use any equipment in the operation of the Installation other
than the Equipment supplied by CR; or
c) Sell merchandise and other products which relate to the
Installation or the Cinema Ride (the "Merchandise") not purchased by the
Venture from CR or a third party licensed by CR to produce and sell such
Merchandise.
3. Notwithstanding anything to the contrary, the following actions of
the Venture shall require the consent of both Venturers:
a) Incurring any "Major One-Time Costs" (as hereinafter defined);
b) The sale, exchange, lease, mortgage, pledge, or other transfer
of all or a substantial part of the assets of the Venture (it being
acknowledged that CR leases the Equipment and conveys a lien thereon to the
lessor);
c) The incurrence of indebtedness by the Venture, other than
simple credit transactions;
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d) A change in the sole nature of the Venture's business as
identified in paragraph 4 of Article I;
e) The admission of additional Venturers;
f) The continuation of the term of the Venture; and
g) Any amendment of this Agreement.
4. Except as to matters entered into pursuant to Paragraph 1 (b) of
Article III and Paragraph 1 of this Article IV in the ordinary course of
business of the operation of the Installation in accordance with the
requirements of said paragraphs, no contract, commitment, obligation,
liability or expense of any type shall be entered into or incurred by one
Venturer on behalf of the Venture unless such contract, commitment,
obligation or liability is approved in writing by the other Venturer. Each
Venturer shall be solely responsible for its respective individual debts and
obligations, without any right to contribution from the other Venturer in
connection with any such individual debts or obligations.
5. CR or its authorized agents and representatives shall have the
right to enter and inspect the Premises and the Installation at any time
during the term of this Agreement, and D&B shall permit and assist CR in
making all such other investigations and inspections as CR reasonably
considers to be necessary or desirable in order to ensure compliance with
CR's rules and standards for use of the Cinema Ride as set forth in the
Manual.
ARTICLE V
ADVERTISING AND PROMOTION
1. D&B will generally be responsible for creating and placing all
advertising and promotion on behalf of the Installation and the Venture. D&B
agrees that all use of any registered or unregistered trademarks, service
marks or trade or service names of CR or its licensors or affiliated, in any
advertising or promotional materials (in whatever medium), shall be subject
to the prior written approval of CR, which approval shall not be unreasonably
withheld. Any advertising and promotional materials supplied by CR or
previously approved by CR shall be deemed approved.
2. CR may from time to time create or place, or both create and place,
advertising or promotion for the Cinema Ride that includes the Installation
and the Venture. CR agrees that all use of any registered or unregistered
trademarks, service marks, logos, or trade or service names or marks of D&B
or its affiliated, in any advertising or promotional materials (in whatever
medium) for the Cinema Ride, shall be subject to the prior written approval
of D&B, which approval shall not be unreasonably withheld. Any advertising
and promotional materials supplied by D&B or previously approved by D&B shall
be deemed approved.
3. Notices of copyright, trademark usage, trademark registration or
other proprietary rights, notices or designations and credits shall be
included in all advertising and promotional materials as reasonably required
by either party in writing from time to time on materials disseminated by or
on behalf of the Venture using CR's or its licensor's marks or as required by
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D&B in writing from time to time on materials disseminated by or on behalf of
CR using D&B's marks.
ARTICLE VI
CASH DISTRIBUTIONS
1. The following terms are used in the Agreement with the following
definitions:
a) "Gross Revenue" means the aggregate of all sales or other
income from whatever source received by the Venture, or either of the
Venturers, arising from the operation of the Installation, but excluding any
sales and use taxes actually collected and paid to the governmental taxing
authority. For parties and special events involving the Installation and
other parts of the Facility, the amount to be included in Gross Revenue will
be the party prices in effect for the Installation at such time.
b) "Direct Operating Costs" means only the following direct cash
expenses incurred by the Venture, or D&B on behalf of the Venture, in the
course of operation of the Installation: Salaries, payroll taxes and fringe
benefits (but excluding profit sharing plans and bonuses not based
specifically upon performance at the Installation) of personnel while working
exclusively for the Installation; advertising relating exclusively to the
Installation and for pro-rated costs of advertising shared with other
operations in the Facility; cost of merchandise sold; and miscellaneous
direct, out-of-pocket costs of operation of the Installation such as
supplies. In no event, however, shall "Direct Operating Costs" recoverable
by D&B include any overhead or profit of D&B, occupancy costs of the Premises
(other than percentage rent on revenues of the CR if payable to D&B's
landlord), "Major One-Time Costs" (as defined below) or any other cost not
reflecting direct cash expenses attributable to the operation of the
Installation.
c) "Major One-Time Costs" means significant, nonrecurring
expenses incurred outside the ordinary course of the business of the Venture,
but only if approved by the Venturers as required by Paragraph 3(a) of
Article IV.
2. D&B shall collect all Gross Revenue and other monies (e.g., sales
and use taxes) on behalf of the Venture. If CR receives any Gross Revenue or
other monies of the Venture, it shall promptly pay it over to D&B. D&B shall
also pay all Direct Operating Costs and Major One-Time Costs on behalf of the
Venture out of Gross Revenue collected. If CR pays any Direct Operating
Costs or Major One-Time Costs, D&B shall reimburse CR within 45 days after
D&B's receipt of an invoice and appropriate supporting documentation out of
Gross Revenue collected. Subject to reimbursement as provided in Paragraph 3
of this Article VI, D&B shall pay any Direct Operating Costs to the extent
Gross Revenue collected is not sufficient to pay such costs, and D&B and CR
shall each pay one-half of any Major OneTime Costs approved by them to the
extent Gross Revenue collected is not sufficient to pay such costs.
3. D&B shall account to CR on a monthly basis for all Gross Revenue,
Direct Operating Costs and Major One-Time Costs, and shall apply Gross
Revenue in the following order of priority:
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a) First, to pay for all Direct Operating Costs payable during
such monthly period and to reimburse D&B for any Direct Operating Costs paid
by D&B during such monthly period Or during any prior period which have not
previously been reimbursed;
b) Second, to pay for all Major One-Time Costs approved by the
Venturers payable during such monthly period and to reimburse D&B and CR for
any Major One-Time Costs approved by the Venturers paid by them during such
monthly period or during any prior period which have not previously been
reimbursed; and
c) Third, all Gross Revenue received in excess of the amounts
necessary to make the payments provided for in Paragraphs 3(a) and 3(b) of
this Article VI shall be paid 50% to CR and 50% to D&B.
4. All payments to the Venturers pursuant to this Article VI shall be
made in cash within thirty days after the end of each monthly accounting
period based upon monthly cash basis financial statements prepared by D&B
pursuant to Article XI, Section 6. Payments to the Venturers in the third
month of a fiscal quarter will reflect accrual basis accounting adjustments
recorded quarterly. Without limiting either Venturer's rights to declare a
material breach of this Agreement, if either Venturer withholds, or causes to
be withheld, any payment due the other pursuant to this Article VI without
cause, such payment shall bear interest after the due date until paid in full
at an annual rate of interest equal 125% of the United States prime rate in
effect from time to time, as published in the United States Western edition
of THE WALL STREET JOURNAL calculated and payable monthly, in arrears, both
before and after default or judgment, with interest on overdue interest at
the aforesaid rate.
5. D&B and CR shall each bear 50% of the financial loss of any Direct
Operating Costs and any Major One-Time Costs to the extent Gross Revenues are
insufficient to pay or reimburse such costs upon dissolution and liquidation
of the Venture.
6. CR shall have the right, upon giving reasonable notice to D&B, to
appoint its own auditors to undertake audits of the accounts and records of
the Venture, during normal business hours at such reasonable intervals as CR
may consider necessary. D&B agrees to provide full access to all of the
Venture's accounts and records to CR and to CR's auditors in this event.
7. D&B shall keep at the principal office of the Venture, or at its
offices located in Dallas, TX, all of the following:
a) Copies of all of the Venture's federal, state and local income
tax information returns and reports, if any, for the two most recent taxable
years;
b) Copies of this Agreement and all amendments thereto; and
c) The Venture's books and records for at least the current and
past two fiscal years.
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ARTICLE VII
TAX ALLOCATIONS
Profit, gain, loss and other tax items will be allocated to follow as
closely as possible the allocation of cash distributions between the parties
as provided in Article VI:
1. Any tax loss items shall be allocated equally between the Venturers.
2. Any tax profit or gain items shall be allocated in the following
order of priority:
a) First, pro rata between the Venturers in proportion to the
amount of any loss items previously allocated to the Venturers until the
amount allocated pursuant to this item (a) equals the amount of any items
previously allocated;
b) Second, all items of profit and gain in excess of the amounts
necessary to make the payments provided for in paragraphs 2(a) and 2 (b) of
this Article VII shall be allocated 50% to CR and 50% to D&B.
ARTICLE VIII
TERM AND TERMINATION
1. The Venture shall commence as of the effective date hereof and
shall continue thereafter until July 15, 2001 unless terminated earlier as
provided in the Article VIII (the "Term").
2. The Term of the Agreement may be terminated prior to the date
referred to in paragraph 1 of this Article VIII:
a) If both Venturers agree in writing to terminate the Venture; or
b) Upon thirty days prior written notice of termination from CR
to D&B in the event D&B fails to obtain any material governmental consent,
permit or license required for the lawful operation of the Installation,
unless D&B obtains such consent, permit or license within such 30 day period;
or
c) Upon thirty days prior written notice of termination from
either party to the other party in the event that the aggregate Gross
Revenues of the Installation fall below a total of $120,000.00 for any period
of 180 days after opening of the Installation to the public for business; or
d) Upon thirty days prior written notice of termination from
either party to the other party if aggregate Direct Operating Costs exceed
60% of aggregate Gross Revenues (if Gross Revenues are below $65,000) for any
period of three consecutive months after opening of the Installation to the
Public for business; or
e) Upon thirty days prior written notice of termination from CR
to D&B:
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(i) In the event D&B breaches any material provision of this
Agreement and fails to cure such breach within five business days after
receipt of such written notice; or
(ii) In the event of repeated and significant violation of
CR's operating requirements (as outlined in Paragraph 1 of Article IV above)
by D&B after notice and opportunity to cure prior violations as provided in
subpart (i);
f) Upon thirty days prior written notice of termination from D&B
to CR:
(i) In the event CR breaches any material provision of this
Agreement and fails to cure such breach within five business days after
receipt of such written notice; or
(ii) In the event of repeated and significant failures by CR
to support the Installation as required by Paragraphs 2 and 3 of Article III
above after notice and opportunity to cure prior failures as provided in
subpart (i);
g) Immediately without notice or other action in the event of the
"withdrawal", "bankruptcy" or dissolution of either Venturer. As used
herein, the term (i) "withdrawal" of a Venturer means the voluntary
withdrawal of a Venturer from the business of the venture, which shall
constitute a material non-curable breach of this Agreement; and (ii)
"bankruptcy" includes not only the adjudication of a Venturer as bankrupt
under applicable bankruptcy laws, but also includes a Venturer's assignment
for the benefit of creditors of a substantial portion of such Venturer's
assets, the appointment of a receiver for the property or affairs of such
Venturer, or any petition for any type of relief under applicable bankruptcy
or insolvency laws which has been filed and is not vacated within 90 days
after filing.
3. CR and D&B expressly agree that "cure" of any default must include
the cessation of the defaulting conduct; correction of all factors
contributing to the occurrence of the defaulting conduct; and establishment
of such correcting measures as shall provide a reasonable basis for
concluding that the breaching Venturer will be able to perform all of its
contractual obligations in the future without default.
4. At the expiration of the Term or the effective date of any prior
termination, the Installation shall be closed to the public, the Equipment
and Manual supplied by CR and all items bearing or utilizing its trademarks
or other property rights of the Cinema Ride will be removed and returned to
CR at CR's expense (CR being responsible for any damage to the Facility
caused by such removal if CR directs the removal of its Equipment) and the
Venture shall be dissolved and its assets liquidated and the proceeds
therefrom shall be applied as follows:
a) First, to payment or provision for payment of all Venture
debts and liabilities to persons other than Venturers;
b) Second, to payment or provision for payment of any other costs
and expenses advanced by any Venturer as approved in accordance with the
provisions of this Agreement; and
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c) Thereafter, any remaining cash shall be distributed to the
Venturers in accordance with the provisions of Article VI, and all remaining
assets other than cash shall be distributed to the Venturers, as tenants in
common, in the proportions in which they share in Venture cash distributions
pursuant to Article VI.
D&B shall be responsible for taking all acts and filing all documents
required to dissolve and liquidate the Venture, except that if the Venture
has been terminated pursuant to the provisions of Paragraph 2(e) of this
Article VIII or by reason of the withdrawal, bankruptcy or dissolution of
D&B, CR shall be responsible for taking all acts and filing all documents
required to dissolve and liquidate the Venture.
ARTICLE IX
INDEMNITIES
1. D&B agrees, during and after the term of this Agreement, to
indemnify and hold CR, its licensors, directors, officers, shareholders,
agents, subcontractors, employees, and its parent, subsidiary and affiliated
entities, harmless from and against any and all claims, losses, damages,
costs and expenses incurred by any such indemnified persons as a result of
any violation of this Agreement by, or any act of omission or commission on
the part of, D&B or any of its directors, officers, shareholders, agents,
subcontractors, or employees, and from all claims, damages, suits or rights
of any persons arising out of the negligence, breach of contract or other
civil wrong of D&B or its directors, officers, shareholders, agents,
subcontractors, and employees in connection with the operation of the
Installation.
2. CR agrees, during and after the term of this Agreement, to
indemnify and hold D&B, its directors, officers, shareholders, agents,
subcontractors, employees, and its parent, subsidiary and affiliated
entities, harmless from and against any and all claims, losses, damages,
costs and expenses incurred by any of such indemnified persons as a result of
the violation of this Agreement by, or any act of omission or commission on
the part of, CR or any of its directors, officers, shareholders, agents,
subcontractors or employees, and from all claims, damages, suits or right of
any persons arising out of CR's negligence, breach of contract, or other
civil wrong, or that of its directors, officers, shareholders, agents,
subcontractors or employees in connection with the operation of the
Installation.
3. D&B and CR shall promptly exchange information about any claims or
actions that are subject to the aforementioned indemnification and each shall
furnish, at its own expense, all such information and evidence as is
available and all assistance as is necessary to resist, defend or settle any
such claim. The indemnifying Venturer shall promptly assume the defense
thereof and be entitled, at its own expense, to comprise or defend any such
claim. The failure to give timely notice under this clause shall not
preclude an indemnified person from seeking indemnification hereunder unless
such failure has materially prejudiced the indemnifying Venturer's ability to
defend the claim or litigation.
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ARTICLE X
GENERAL PROVISIONS
1. AFFILIATE. As used in this Agreement the term "Affiliate" means
(i) any person directly or indirectly controlling, controlled by or under
common control with any other person, or (ii) any person owning or
controlling 50% or more of the outstanding securities of such other person.
The term "person" shall mean any natural person, partnership, corporation,
association, trust or other legal entity. The term "control" (including the
terms "controlled by" and "under common control with") shall mean the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of
voting securities or by contract.
2. OUTSIDE ACTIVITIES/NON-COMPETITION. Each of the Venturers
recognizes and acknowledges that the other Venturer has heretofore engaged
and may hereafter (both during and after the expiration of the Term of the
Venture) engage, for its account and for, with and on behalf of others, in
activities and transactions (herein at time collectively called the "outside
activities") whether of the same type or in the same field as, or different
from, the activities or transactions of the Venture. Neither the Venture nor
either of the Venturers shall be entitled to any rights in or to any
remuneration or profits from nor shall it bear any of the losses of any of
the outside activities. Notwithstanding the foregoing, however, CR agrees
that it will not open another Cinema Ride within a radius of five (5) miles
of the Facility at any time during the Term of this Agreement or for a period
of 1 year thereafter, except in the event of termination of this Agreement
(a) pursuant to Paragraphs 2(b) or 2(e) or Article VIII or (b) by reason of
the withdrawal from the venture, bankruptcy or dissolution of D&B as provided
in Paragraph 2(g) of Article VIII. All rights in the Cinema Ride not
expressly licensed to the Venture or to D&B as provided in the Agreement are
expressly reserved to CR without obligation to account, report or inform D&B
or the Venture of its exercise of such rights. Without limiting the
generality of such reservation of rights, CR specifically reserves the right
to demonstrate and to sell the Cinema Ride or any of its component parts on a
temporary basis at all trade shows, conventions and other events wherever
they occur, including those within a radius of five (5) miles of the
Facility, provided that no such demonstration of the Cinema Ride within a
radius of five (5) miles of the Facility at any time during the term of this
Agreement shall be on other than a temporary basis (not to exceed thirty
consecutive days).
3. OPERATION OF THE CINEMA RIDE. Both parties must reasonably agree
to the ticket pricing structure for the Cinema Ride and operational/marketing
methods for Cinema Ride. All operations employees for the Cinema Ride shall
be employees of D&B.
4. PROMOTIONAL USE OF THE CINEMA RIDE. D&B shall be restricted from
operating the Equipment for free or discounted promotional use to no more
than 100 rides per month, unless otherwise agreed to by CR. This excludes
party and special event pricing, the structure of which will be set forth and
approved by both parties in advance.
5. PUBLIC REPORTING REQUIREMENTS. Either party may report the results
and terms of this Agreement to the extent required by applicable law.
Further, the finalization of the Agreement may be announced by press release,
subject to both parties' approval as to form.
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6. FURTHER INSTRUMENTS. Each of the Venturers agrees to execute,
acknowledge and deliver and cause to be executed, acknowledged and delivered,
any and all such further documents and instruments, and to perform and cause
to be performed all such acts, as may be necessary or proper to carry out the
intent of this Agreement and such Venturer's obligations hereunder, all of
which further documents, instruments and acts shall be in accordance with and
consistent with the terms and the content hereof.
7. TRANSFER OF VENTURE INTERESTS. No Venturer may assign, hypothecate
or otherwise transfer (collectively "sell") any portion of its Venture
interest or other rights or obligations hereunder, without the consent of the
other Venturer, except that each Venturer may sell all or any part of its
interest in the Venture to any Affiliate of such Venturer ("affiliated
transferee"), subject to compliance with applicable securities and other
laws, if any, and provided that the affiliated transferee shall become a
Venturer hereunder and shall expressly agree in writing to assume and be
bound by all of the terms, provisions and obligations of this Agreement (it
being acknowledged that CR leases the Equipment and conveys a lien thereon to
the lessor). No transfer pursuant to this Paragraph shall relieve either
Venturer of its obligations to the Venture or the other Venturer or from
personal liability for Venture debts incurred prior to such transfer, except
in the case of an affiliated transferee if the applicable creditor(s)
expressly accepts the affiliated transferee as an obligor in place of such
Venturer. Notwithstanding the above, a transfer of interest in this Venture
by either party by way of merger of the party into another entity or buy-out
of the stock or assets of such party will not be a violation of this
Paragraph, so long as there is no financial or operational impact on the
Venture.
8. INVESTMENT REPRESENTATIONS. Each Venturer represents to the other
that it: (i) either has a preexisting personal or business relationship with
the other Venturer or that by reason of its business or financial experience
(or the business or financial experience of its professional advisors) such
Venturer has the capacity to protect its own interests in connection with
entering into the Agreement; (ii) is contributing capital to the Venture as
an investment for its own account and without a view to resell or distribute;
and (iii) has sufficient assets to be able to hold its Venture interest for
an indefinite period of time to suffer a complete loss of capital contributed
to the Venture.
9. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered in one or more of the following ways: (a) on the day of delivery,
if delivered personally; (b) three days after the date of mailing, if mailed
by certified or registered first class mail, return receipt requested and
postage prepaid, or the date of actual receipt, if earlier; (c) the next
business day after deposit with an overnight air courier company guaranteeing
next day delivery; or (d) when received by facsimile (with a copy sent as
provided in item (b) or (c) within 24 business hours) at the following
address and/or facsimile telephone number (or to such person or persons or
such other address or addresses or facsimile telephone number or numbers as a
party may specify by notice pursuant to this provision):
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For CR: Cinema Ride, Inc.
Attention: Xxxxx Xxxxxxx
00000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Telecopier: (000) 000-0000
For D&B: Xxxx & Buster's, Inc.
Attention: Legal Department
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
10. APPLICABLE LAW, ARBITRATION. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas applicable to
contracts entered into and fully to be performed therein. In the event of
any dispute or controversy hereunder (including, without limitation, any
dispute involving the existence, validity or breach of this Agreement), the
parties agree to submit same to arbitration privately and confidentially in
Dallas, Texas, by one arbitrator mutually agreed (or, if none, appointed
pursuant to the commercial arbitration rules of the American Arbitration
Associations), subject to the arbitrator executing an appropriate
confidentiality agreement. The result of any such arbitration shall be
binding but shall not be made public unless necessary to confirm same after
non-compliance by a Venturer.
11. ATTORNEYS' FEES. The prevailing party in any proceeding brought
pursuant to this Agreement shall be entitled to reasonable attorneys' fees
and all costs and other expenses which it expends or incurs in enforcing this
Agreement against the other party including, but not limited to, all costs,
attorneys' fees and expenses incurred by the prevailing party in connection
with any insolvency, bankruptcy, reorganization, arrangement or other similar
proceedings involving the other party which in any way affects the exercise
of the prevailing party of its rights any remedies hereunder.
12. WAIVER. A waiver by either Venturer of any of the terms and
conditions of this Agreement in any one instance shall not be construed to be
a waiver of any preceding or succeeding breach thereof or of any other term
or condition of this Agreement. All remedies, rights, undertakings,
obligations and agreements contained in the Agreement shall be cumulative and
none of them shall be in limitation of any other remedy, right, undertaking,
obligation or agreement of either Venturer.
13. ARTICLE HEADINGS. The headings of the Articles in the Agreement
are for convenience only. They shall not be used in any way to govern,
limit, modify, construe or affect the provisions of this Agreement nor shall
they otherwise be given any legal effect.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be a valid and binding original, but all of
which together shall constitute one and the same instrument.
15. ENTIRE AGREEMENT. This agreement constitutes the entire agreement
between the Venturers. No representations or warranties have been made,
except as herein specifically
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provided. This Agreement cannot be modified except by a written agreement
signed by both of the Venturers.
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first hereinabove written.
XXXX & BUSTER'S, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxx, President
CINEMA RIDE, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------
Xxxxx Xxxxxxx, President
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EXHIBIT A
DECORATING IMPROVEMENTS TO PREMISES
(Note: All items direct from vendors with no CR xxxx-up)
1) Florescent Carpet Approx. $25 per yard
2) Florescent Wallpaper (3 rolls) Approx. $35 each
3) Florescent Tape Rolls for Accent (6) Approx. $20 each
4) Misc. Florescent Materials Approx. $300
Note: All walls, doors and ceiling to be painted semi-gloss black.
Pre-show area to utilize black light florescent bulbs in standard
florescent fixtures.
15
EXHIBIT B
CR EQUIPMENT CONTRIBUTIONS
QUALITY ITEM DESCRIPTION
------- ----------------
1 15 Seat Capsule with Seatbelts
1 Show Control System and Programmable Logic Computer System
3 LCD Video Projectors (includes 1 backup)
3 NTSC Laser Disc Players
1 Flat Screen (per specifications of approximately 7 feet wide
and 5 feet height at a 3:4 aspect ratio)
1 Full Spectrum Digital Sound Systems with Amplifiers, Speakers
and Graphic Equalizers
1 Seat Shaker System
1 Fan/Wind System
1 Electronic Equipment Rack
1 Pilot Operations Console with 4 Video Cameras, Monitors and
Slow-Scan Recorder
1 Retractable Loading Platform
1 Pre-Show Monitor and Mount
10 Line CR Sanctions with Directional Signage
1 Hydraulic oil (system shipped dry)
1 Uninterrupted Power Supply
1 Initial 3-D glasses
1 Ticket Sales Sheet Package
1 3-D Glass Deposit Sign
Marquee Signage - Approx. $5,000 to $8,000
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EXHIBIT B
CR EQUIPMENT CONTRIBUTIONS
QUALITY ITEM DESCRIPTION
------- ----------------
Movie Poster Cases (up to 8) - Approx. $700 each
Ride Film Posters (up to 8) - Approx. $350.00 each
Florescent Panels (4) - Approx. $1,500 each
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