EVENT PRODUCTION AND PROMOTION AGREEMENT
This Agreement ('Agreement') is dated as of September 17, 1997, by and
between Protruck Racing Organization, a Nevada corporation (the 'Sanctioning
Body') and Beachport Entertainment Corporation, a Utah corporation (the
'Promoter/Producer'). Sanctioning Body and Promoter/Producer sometimes are
referred to herein collectively as the 'Parties'.
RECITALS
WHEREAS, Sanctioning Body has established itself as an off road
closed-course truck racing event sanctioning body in the Western United States
and elsewhere whose sanction and racing standards universally are accepted in
the field; and
WHEREAS, Promoter/Producer is engage in the business of financing,
producing, operating and exploiting live events in the Western United States and
elsewhere; and
WHEREAS, Sanctioning Body and Promoter/Producer desire to provide for the
presentation of a series of sanctioned off road closed-course truck racing
events (the 'Events') in stadiums to ;be selected by Promoter/Producer for the
period and on the terms and conditions hereinafter set forth;
NOW THEREFORE, the parties hereto, in consideration of the promises and of
the covenants and agreements hereinafter contained, agree as follows:
1. TERM, TERRITORY. The initial term ('Initial Term') of this agreement is
three (3) years, which shall commence as of the date of this agreement.
Promoter/Producer shall have the option to extend the Initial Term for an
additional three (3) years by giving Sanctioning Body its written election to
extend by no later than 120 days prior to the expiration of the Initial Term.
Promoter/Producer reserves the right to terminate this agreement after the first
year but guarantees the presentation of the first year. The Event Territory
covered by this Agreement is all states west of the Mississippi River.
Provided, however, the licensing territory described in the separate license
agreement attached hereto and incorporated herein by reference is North America.
2. EVENTS. During the first racing season (running from February through
May of each year of the Term or any extended Term), the Parties shall sanction,
fiance, promote
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and exploit a minimum of five (5) and a maximum of eight (8) Events in
accordance with the following:
a. Promoter/Producer shall function as the exclusive producer of all Events
and Sanctioning Body hereby delegates to Promoter/Producer all operating
obligations and decisions in exchange for the sanctioning fee described in this
agreement.
b. The featured class of each Event shall be composed of Protruck racing
vehicles, as the only truck class, on a stadium venue dirt track designed and
sanctioned by Sanctioning Body.
c. The Parties will mutually agree upon the addition of other classes of
competition for each Event and the appropriate sanctioning body for each such
class added to the Events.
d. The races shall be officiated by Promoter/Producer's Director of
Competition and other Promoter/Producer personnel in accordance with Sanctioning
Body's standardized, published technical ;racing rules which the Sanctioning
Body shall provide.
e. All trucks will be of the same specifications within a particular class
of racing trucks, as specified by Sanctioning Body.
f. The Events will comprise a competitive series for the Protruck class,
with prize money awarded at each venue, culminating in a grand prize for the
winner of the series.
g. Each Event will feature several races between competitors in Protruck
class and in other classes approved by the Parties.
h. Each Event shall run on a single day format.
i. The Events must not conflict with the dates for the Score Desert event
series.
3. PROMOTER/PRODUCER'S EVENT OBLIGATIONS. For each Event which is
presented, Promoter/Producer shall;
a. Act as exclusive Event Promoter/Producer in charge of the management of
all Event operations, including but not limited to all Event-related agreements,
leases and promotions.
b. Either directly or through sponsorship participation, promotional
programs, sale or license of Event rights or other forms of participation by
financiers, provide the necessary financing for each Event, including
advertising, sanctioning fees plus approved sanctioning expenses, price money,
facility expenses, rental expenses and operational expenses (including but not
limited to fuel area, pit, ticketing/credentials, entry fees, practice and
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testing areas). Prize money for each Event shall be a minimum of $24,500, with a
grand prize of $37,000 awarded at the end of each racing season to the overall
champion in the Protruck class only. Sanctioning Body, Promoter/Producer and
Promoter/Producer's agent, Xxxxxx-Xxxx Marketing (the 'Agent'), will jointly
develop Event series sponsorships in accordance with a mutually-agreeable
program for sponsorship to be developed by the Agent.
c. Build and set up each Event track in accordance with the specifications for
each Event track designated by Sanctioning Body to be attached to the Agreement
and incorporated herein by reference as Exhibit 'A', when each of the individual
Event design plans becomes available, as set forth in this Agreement, at its
expense.
d. Pay to Sanctioning Body:
(i) A $10,000 sanctioning fee for each Protruck Event. Sanctioning fees
also to be paid to Sanctioning Body for additional classes of competition, which
shall be the subject of good faith negotiations between the Parties. All
sanctioning fees shall be paid in full, within ten (10) days of each Event.
(ii) Actual, reasonable sanctioning expenses incurred by Sanctioning
Body in conjunction with Events.
(iii) A sanctioning royalty of 7.5% of the net profits of each Event
derived by deducting from Gross Revenue all reasonable 'direct producing and
operating expenses' therefor. 'Gross Revenue' includes, but is not necessarily
limited to, the following: Event and series sponsorship; ticket sales/gate
receipts; entry fees; pit and paddock pass sales; food and beverage sales;
apparel and merchandising; program sales; television revenues (but only in the
third and following years of the Term and/or extended term of this Agreement);
hospitality and suite revenue; display and expo space; on track signage; home
video sales. 'Direct Producing and Operating Expenses' includes but is not
necessarily limited to the following: track construction, maintenance and
removal; facility rental; direct outside labor expenses in connection with each
separate Event, advertising and marketing; public relations; television
production cost; prize monies; Event production; and hospitality and suite
expense. The reconciliation and any net profit payment will be made within 45
days after each Event.
(iv) For all Event merchandise sold exclusively by Promoter/Producer, a
licensing royalty of 15% of the wholesale price of all such merchandise sold
under this agreement. This payment will be made within thirty (30) days after
each Event.
(v) For all licensed or sub-licensed products sold, pursuant to the
terms and conditions of the separate Licensing Agreement attached hereto as
Exhibit 'B', fifty (50%) percent of royalty payments received by
Promoter/Producer will be paid to Sanctioning
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Body on a monthly basis, commending ten (10) days after Promoter/Producer's
first receipt thereof.
e. Develop and execute a marketing and promotional program for the Event series,
at its expense.
f. Provide all required insurance for the Events at its expense.
Promoter/Producer shall obtain and maintain liability insurance, with a minimum
policy of two million ($2,000,000) dollars. In addition, Sanctioning Body,
Xxxxxxx & Xxxxxxx Racing Development, Inc., Xxxx Xxxxxxx, Xxxxx Xxxxxxx and
XxXxxxxx, Xxxxxx & Associates, Inc. shall be named as additional insureds.
g. Provide a national television broadcast schedule on a major sports cable
network for the Events at its expense.
h. Protect and pay for all required trademarks, service marks and other
intellectual property rights for the Events and obtain and pay for all required
licenses. Upon termination of this Agreement, Promoter/Producer shall assign and
transfer to Sanctioning Body all rights, title and interest in said trademarks,
service marks, and other intellectual property rights to the Sanctioning Body at
Promoter/Producer's expense.
i. It is the intention of the parties that all expenses in connection with the
Events and/or any related matters, are to be borne by Promoter/Producer.
4. SANCTIONING BODY'S EVENT OBLIGATIONS. Sanctioning Body shall:
x. Xxxxx to Promoter/Producer the exclusive right to finance, produce, promote
and exploit the stadium series Events west of the Mississippi river utilizing
the sanctions conferred upon the Events by Sanctioning Body hereunder and to use
the Protruck Racing Organization name and related trademarks, service marks and
artwork subject to the terms and conditions of the separate Licensing Agreement
attached hereto as Exhibit 'B'. However, Sanctioning Body will grant to
Promoter/Producer the right to use the Xxxx 'Ironman' Xxxxxxx name on a
nonexclusive, contract by contract basis, subject to the approval of Xxxx
Xxxxxxx. Sanctioning Body reserves the right to sanction other series events
which do not compete with Promoter/Producer's off-road course truck racing
Events in stadiums.
b. Provide design documents for Promoter/Producer to use to build a track
suitable for each stadium for which Events are scheduled. Promoter/Producer will
provide to Sanctioning Body the available measurements and configurations for
each stadium in which the Events are scheduled in a timely manner so that
Sanctioning Body may deliver a design pursuant to its obligations herein in a
timely manner. Promoter/Producer shall reimburse Sanctioning Body for a
reasonable expense incurred in preparation and testing
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of said design. It is understood that Sanctioning Body will perform testing of
the design layout of each Event prior to the delivery of the design document and
will incur expenses thereby.
c. Provide Promoter/Producer with an Event rule book for use in the presentation
of the Events.
d. Provide to Promoter/Producer a list of names and a recommended individual to
oversee, manage, and provide for all operations, including but not limited to
identifying the individuals and the expenses and all necessary personnel for
timing and scoring, medical and safety staff, track maintenance, equipment and
all other related personnel and expense in a timely manner. All individuals,
persons and/or personnel set forth in this subparagraph shall be paid by
Promoter/Producer.
e. Assist Promoter/Producer and Agent in securing automotive-related and other
sponsors for the Events and Event prizes to be awarded and to cooperate and lend
its name to any reasonable advertising and promotional programs aimed at
attracting financing or ticket sales for the Events, in order to increase gross
revenue as defined herein.
f. Provide to Promoter/Producer Sanctioning Body's official Event sanction for
the Event series, along with any and all trademarks, service marks, logos and
related artwork for Promoter/Producer's use solely in connection with the Event.
g. Consult with Promoter/Producer concerning all aspects of presenting the Event
series.
5. ANCILLARY EXPLOITATION
Promoter/Producer shall engage in the ancillary exploitation of the Events,
which shall include but shall not be limited to the following areas:
a. Television --
b. Home video --
c. Event Merchandising --
x. Xxxxxxx Passes --
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e. Local and National Sponsorships --
f. Parking Concession (where applicable) --
g. Food and Beverage (where applicable) --
Any ancillary exploitation by Promoter/Producer shall be subject to the terms
and conditions of this Agreement and the Licensing Agreement attached hereto as
Exhibit 'B'.
6. WAIVER. The delay or failure of either party to assert or exercise any
right, remedy or privilege hereunder, with actual or constructive notice or
knowledge of the breach of any representation, warranty, or provision herein,
shall not constitute a waiver of any such right, remedy, privilege or breach.
7. FORCE MAJEURE. If Sanctioning Body's or Promoter/Producer's obligations
contained in this Agreement are rendered impossible or infeasible by any act,
requirement or regulation of any public authority or bureau, strike or labor
difficulties, flood, fire, snow, civil tumult, effects of energy use
restrictions emergencies, act of God, absence of Power or other essential
services, failure of technical facilities or failure or delay of transportation
facilities, or any other cause beyond Sanctioning Body's or Promoter/Producer's
reasonable control, then there shall be no claim for damages by either party to
this Agreement and the term of this Agreement shall be extended to allow for all
missed Events.
8. RELATIONSHIP OF PROMOTER/PRODUCER TO SANCTIONING BODY. The relationship
of Promoter/Producer to Sanctioning Body is that of an independent contractor,
and neither Promoter/Producer nor Sanctioning Body is the agent, partner or
legal representative of the other or has the right or authority to create any
liability or responsibility whatsoever on the part of or on behalf of the other.
Promoter/Producer agrees not to represent in any manner to any guild or union
that it has any authority to represent Sanctioning Body in any labor relations
matter. Sanctioning Body has acted and is acting on its own, without the use or
benefit of an agent in negotiating and executing this Agreement, and agrees to
indemnify, defend, and hold harmless Promoter/Producer for any claims made by
any agent.
9. INDEMNIFICATION
a. Promoter/Producer shall indemnify, defend and hold Sanctioning Body
harmless from any and all loss, cost, expense and liability (including
attorneys' fees) incurred in connection with any claim or asserted claim which
may be made against Sanctioning Body which results from the acts or omissions of
Promoter/Producer, its officers, shareholders, partners, investors, servants,
employees, or agents, or any claim or asserted claim made by Promoter/Producer's
servants, employees, or agents.
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b. Sanctioning Body shall indemnify, defend and hold Promoter/Producer,
harmless from any and all loss, cost, expense and liability (including
attorneys' fees) incurred in connection with any claim or asserted claim which
may be made against Promoter/Producer, which results from the acts or omissions
of Sanctioning Body, its officers, shareholders, partners, investors, servants,
employees, or agents, or any claim or asserted claim made by Sanctioning Body's
servants, employees, or agents.
10. GENERAL PROVISIONS
a. This Agreement is not assignable by either Party without the prior
written consent of the other Party.
b. This Agreement, which constitutes the entire understanding between
the Parties and supersedes all prior agreements, oral or written, between the
Parties with respect to the subject matter hereof, shall be construed according
to the laws of the State of California and cannot be altered, modified or
terminated except upon written consent of both Parties.
c. This Agreement shall be governed by the laws of the State of
California. If legal action is initiated relative to this Agreement or the
rights or obligations of any party hereunder, the Parties hereto stipulate and
agree that such action must be initiated, maintained and continued in San Diego
County, California, and the non-prevailing Parties in such action shall pay
reasonable attorneys' fees to the prevailing Parties, with the amount to be
determined by the court in said action. The Parties hereto shall comply with and
observe, and this Agreement shall be subject to, any and all relevant, present
and future laws, statutes, regulations and ordinances of all governmental
authorities with appropriate jurisdiction. If any of the provisions of this
Agreement contravene or are invalid under any applicable laws or statute, such
contravention or invalidity shall not invalidate the entire Agreement, but it
shall be construed as if not containing the particular provision or provisions
held to be invalid and any rights and obligations or Sanctioning Body and
Promoter/Producer shall be construed accordingly.
d. Either party to this Agreement shall have the right to terminate this
Agreement and to seek its appropriate legal or equitable remedies upon material
breach of this Agreement by the other party provided the party alleging material
breach notifies the other party by written notice pursuant to this Agreement of
the exact nature of the material breach and the other party fails to cure said
material breach within five (5) days of its receipt of said notice.
e. Headings are used herein for convenience only, and shall not be
referred to in the interpretation of this Agreement.
f. Each party represents that it has the full right, power and authority
to enter
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into this Agreement and to effectuate the purposes and intents thereof. Each
party further represents and warrants, respectively, that it is under no
obligation or disability which would prevent it from entering into this
Agreement and fully performing all of its obligations hereunder.
g. Time is the essence of this Agreement and all of the terms, covenants
and conditions hereof.
h. This Agreement may be executed in counterparts, each of which shall
be deemed an executed original and all of which together shall constitute one
and the same instrument.
i. The Parties hereto shall take any actions necessary on or after the
date hereof which may be required to effectuate the terms of this Agreement.
11. NOTICE. Except as otherwise provided herein, any notices under this
Agreement shall be deemed given on the day when delivered in person or five (5)
business days after the date when mailed by certified, express or registered
first class mail, return receipt requested, addressed to the party receiving the
communication at the following address:
To the Promoter/Producer Beachport Entertainment Corporation
000 Xxxxx Xxxxx Xxxxxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 9048
With a copy to: Xxxxxx X. Xxxxx, Esq.
Wiley and Bonda, P.C.
0000 Xxxxx Xxxxxxx Xxx.
Xxx Xxxxxxx, XX 00000
To Sanctioning Body: Protruck Racing Organization
0000 Xxxxxxx Xxx, Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
With a copy to: De Angelo, Minton & Associates
0000 Xxxxxxxx Xxx., X.X.
Xxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the Parties have caused this instrument to be executed
whether in one or more counterparts, all as of the day and year first above
written.
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AGREED AND ACCEPTED:
BEACHPORT ENTERTAINMENT PROTRUCK RACING ORGANIZATION
CORPORATION
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxxx
--------------------------------- ----------------------------------
Xxxxx Xxxxxxxxx Xxxx Xxxxxxx
Title: President, CEO Title: President
Sept. 24, 97
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