JOINT VENTURE AGREEMENT
AGREEMENT made as of this 10th day of April, 1998, by and among NIK0
INTERNATIONAL ENTERTAINMENT CORP. ("Niko"), a Florida Corporation, 000 Xxxxxxx
Xxxx, Xxxxx XX0, Xxxxx Xxxxx 00000, and MAGICWORKS ENTERTAINMENT, INC.
("MagicWorks"), an Ohio Corporation, 000 Xxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxx 00000.
Each of Niko and MagicWorks is hereinafter sometimes referred to as a "Venturer"
and both together are collectively referred to as the "Venturers".
The parties hereto desire to form a joint venture to produce and
present, upon the terms and conditions stated below, a national tour of the
National Actors Theatre production of the dramatic stage play entitled "THE GIN
GAME" (the "Play"), written by X.X. Xxxxxx ("the Author").
Accordingly, the parties hereto hereby agree as follows:
1. Formation of Joint Venture.
1.1 The Venturers hereby form a Florida joint venture (the "Joint
Venture") to be called "The Gin Touring Company" to produce and cause the
production of an Equity bus and truck touring production of the Play and to
exploit any and all other rights in the Play granted to it or to either of the
Venturers by the Author and/or the National Actors Theatre, including without
limitation non-Equity rights, if any, commercial sponsorships, merchandising and
the sale of commercial use products.
2. Decisions; Contracts.
2.1 All decisions (including budget, routing, creative staffing and
selection of personnel, including attorney and accountant) shall require mutual
approval of the parties hereto, not to be unreasonably withheld.
Decisions affecting the day-to-day operations of the touring company
are hereby delegated to Niko Associates in its capacity as general manager.
2.2 The production budget attached hereto as Exhibit 2.2 is hereby
approved.
2.3 The following personnel are hereby approved:
2.3.1 Xxxxxxx Xxxxxx Xxxxxx - director
2.3.2 Xxxxx Xxxxxx - star
2.3.3 Xxxxxxx Xxxxxxx - star
2.3.4 Franklin, Xxxxxxx, Xxxxxx & Vaesallo
(Xxxxxx X. Xxxxx) - attorney
2.4 All contracts with respect to the production and presentation of
the Play may be signed by either of the parties hereto. All day to day contracts
may also be signed on behalf of the Joint Venture by Niko or its authorized
representative.
3. Agreements with Venturers. The Venturers agree that if the Play is to be
presented at any theatre owned or controlled by either of them, or is to be
presented or promoted in any location by either of them, including, for this
purpose, any corporation or other entity controlled by or under common control
with such Venturer or its principals, the terms for booking the Play at such
theatre and the terms for such presentation or promotion shall be as set forth
in Exhibit 3 annexed hereto.
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4. Assignment of Rights.
Both of the Venturers shall assign, or cause to be assigned, all rights
and interest that it now has or may hereafter acquire in the Play to the Joint
Venture upon its formation.
5. Production Contract. The parties are in the process of negotiating a
production contract (the "Production Contract") with the National Actors Theatre
which will permit the parties to produce and present the Play. The Venturers
shall have mutual approval of the final form of the Production Contract, and the
parties shall assign the Production Contract to the Joint Venture and the Joint
Venture shall assume all obligations thereunder.
6. Term. The term of this Agreement and of the Joint Venture shall commence
on the date hereof and shall continue for as long as rights in the Play,
including the right to receive income, either (a) continue to be held by any
Venturer or (b) are reacquired by any Venturer during the period concluding five
years after the termination of the Joint Venture.
7. Bank Account; Checks.
The parties have agreed to open bank accounts in New York in the name
of the Joint Venture at Republic Bank, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
Checks on said account may be signed by either joint venturer.
8. Pre-Production Expenses. The Venturers have heretofore contributed
certain pre-production expenses in connection with the production of the Play as
set forth in Exhibit 8 attached hereto, which also reflects how such funds have
been expended. Such expenses shall be included as part of the production budget
of the Play and shall be credited to the Venturers' respective obligations to
contribute funds to the Joint Venture pursuant to Paragraph 9.2 below.
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9. Financing Production of the Play.
9.1 The Venturers agree that the initial capitalization required for
the initial production of the Play (the "Capitalization") inclusive of all
required bonds shall be as set forth on the production budget attached hereto as
Exhibit 2.2.
9.2 MagicWorks shall be responsible for providing one hundred percent
(100%) of the Capitalization. Any third party deposits in the form of advances
shall reduce the share due from MagicWorks. The aforesaid contribution shall be
provided to the Joint Venture, as mutually agreed.
9.3 The Capitalization shall not be increased without unanimous
approval of the Venturers. The foregoing shall in no way derogate from any
Venturer's liability for losses and liabilities beyond the Capitalization, as
set forth in Paragraph 10.3 below.
9.4 If, in obtaining any monies hereunder, the parties are required to
take any actions to comply with the Securities Act of 1933, as amended, or any
rules or regulations promulgated thereunder, or to comply with Article 23 of the
Arts and Cultural Affairs Law of the State of New York, or any rules and
regulations promulgated thereunder, or the laws of any other state or
jurisdiction relating to the sale of securities, they shall take, or cause to be
taken, such action as may be required to comply therewith. Each Venturer shall
indemnify and hold harmless the Joint Venture and the other Venturer against any
and all liability resulting from the breach by it of this Paragraph 9.4.
10. Allocation of Profits and Losses.
10.1 Any and all net profits of the Joint Venture shall first be
distributed equally to the parties until any sums contributed by the parties in
excess of the Capitalization
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have been recovered by the parties, then to MagicWorks until the entire
Capitalization has been recouped by MagicWorks.
10.2 Following recoupment, any and all net profits of the Joint Venture
shall be divided, as follows:
NIKO - 25%
MagicWorks - 75%
10.3 All losses and liabilities of the Joint Venture in excess of
Capitalization, including without limitation any costs, expenses or other
liability pursuant to the bonds, shall be borne and paid equally by the parties
hereto.
10.4 The profits and losses of the Joint Venture shall be defined in
accordance with generally accepted accounting principles, consistently applied.
The receipts of the Joint Venture shall include all receipts of any kind or
nature directly or indirectly received by the Joint Venture or any Venturer,
arising from, relating to, or connected with the Play, including without
limitation receipts from commercial sponsorships, merchandising, and the sale of
commercial use products, but specifically not including receipts of any Venturer
as general manager, theater owner, local presenter or promoter, booking agent,
or as a result of any interest it may have in any merchandising company,
publishing company or similar entity.
10.5 Any and all profits of the Joint Venture shall be distributed to
the Venturers at such time as the parties may agree provided that the Joint
Venture shall always have the right to retain sufficient monies to cover any
liabilities and to maintain adequate reserve.
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10.6 The books and records of the Joint Venture shall be kept at the
offices of the General Manager, as defined in Paragraph 13 below, in New York
City. Each Venturer or its authorized representative shall have the right, at
reasonable times, during regular business hours, to inspect such books and
records.
11. Credit. Subject to the terms of the Production Agreement, the
production of the Play shall be announced substantially as follows:
MAGICWORKS ENTERTAINMENT
AND XXXXX XXXXXXXX
Present
THE NATIONAL ACTORS THEATRE
(XXXX XXXXXXX, FOUNDER AND ARTISTIC DIRECTOR)
PRODUCTION OF
"THE GIN GAME"
The names of the Venturers shall be of equal size, style and prominence.
12. Producer's Fee.
12.1 The producer's weekly royalty (the "Producer's Fee") shall be two
percent (2%) of the gross weekly box office receipts of each company of the Play
presented by the Joint Venture. The Producer's Fee shall be shared as follows:
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NIKO - 50%.
MagicWorks - 50%
12.2 The Producer's Fee shall be calculated and paid in the same manner
as the royalty payable to National Actors Theatre pursuant to the Production
Contract.
13. General Management. The Venturers agree to engage Franklin,
Xxxxxxx, Xxxxxx & Xxxxxxxx, to act as legal counsel. The Venturers further agree
that Niko Associates, Inc. ("the General Manager") shall provide general
management services in connection with all productions of the Play produced
hereunder, on the following basic financial terms:
13.1 Production Fee - $25,000
13.2 Weekly Fee - $2,500
13.3 Office Charge - $500
The Venturers intend to enter into a more formal agreement with Niko on
terms usual in the United States touring industry.
14. Other Activities. Each of the Venturers shall devote such time and
effort as may be necessary or advisable for the furtherance of the production of
the Play. Each of the Venturers shall have the right to engage in other business
activities during the continuation of this Agreement, including, without
limitation, the production of other plays.
15. Abandonment. Notwithstanding anything to the contrary contained in
Paragraph 9, at any time after a company of the Play has presented at least two
full weeks of paid public performances, either Venturer may request, by notice
in writing delivered to the other Venturers, that such company (the "Closing
Company") be closed on the following Saturday (the "Effective
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Date"). Such notice shall be given no later than twelve o'clock noon on the
Monday preceding the Effective Date. If either Venturer shall desire to close a
Closing Company (the "Closing Party"), and the other Venturer shall desire to
continue to run such Closing Company (the "Running Party") , then the Running
Party shall have the right to do so, and the Closing Party shall (i) have no
further participation or interest in any proceeds or profits including, without
limitation, any operating profits of, and management fees and office charges,
relating to such Closing Company following the Effective Date, and (ii) have no
further liability with respect to any operating losses of such Closing Company
following the Effective Date, provided that the Retiring Party shall remain
liable for any accrued obligations. For purposes of the foregoing sentence, the
proceeds derived from all companies of the Play shall be computed on a
company-by-company basis. In the event that a Closing Party withdraws from a
Closing Company, the Running Party shall indemnify the Closing Party against any
operating losses of such Loss Company of the Play incurred following the
Effective Date.
If the performance week of the Play shall close after the Sunday
matinee, then, for the purposes of this Paragraph 15, references to "Saturday"
hereinabove shall be deemed changed to "Sunday" and the reference to "Monday" in
the second sentence hereof shall be deemed changed to "Tuesday".
16. Assignment. This Agreement shall bind and inure to the benefit of
each of the Venturers and their respective executors, administrators, successors
and personal representatives. No Venturer hereto shall have the right to assign
this Agreement or any of its rights hereunder or herein without the prior
written consent of the other Venturer, except that:
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16.1 NIKO may assign this Agreement to Xxxxx Xxxxxxxx, to any
corporation of which it or any of the foregoing individual is a controlling
shareholder, or to any partnership of which it or any of the foregoing
individual is a general partner, provided that such assignee assumes in writing
all of the obligations of the assignor.
16.2 MagicWorks may assign this Agreement to any of Xxx Xxxxxxxx and/or
Xxx Xxxxx, to any corporation of which it or any of the foregoing individuals is
a controlling shareholder, or to any partnership of which it or any of the
foregoing individuals is a general partner, provided that such assignee assumes
in writing all of the obligations of the assignor.
17. Governing Law. This contract is made in the State of [Florida] and
shall be construed in accordance with, and governed by, the laws of that state
applicable to contracts made and performed entirely therein.
18. Notices. All notices ("Notices") which any Venturer is required or
may desire to give to any other party under this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail
(postage prepaid) or by telegraph, telex, telecopy or cable (toll prepaid) to
such party at the address of such party given above, or at such other address as
such party shall have designated by notice daily given in the manner above
provided. All such notices shall be deemed given on receipt.
19. Arbitration. Any controversy, claim, dispute or question arising
out of, or in connection with, or in relation to, the validity, interpretation,
performance or nonperformance of this Agreement, or any breach thereof, shall be
determined and settled by arbitration in New York City before a single
arbitrator in accordance with the then existing rules of the American
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Arbitration Association, and judgment upon any award, which may include an award
of damage, may be entered in the highest court, of the forum, state or federal,
having jurisdiction.
20. Miscellaneous
20.1 Both of the parties hereto agrees to sign such further instruments
in writing as may be required to effectuate the purpose and intent of this
Agreement.
20.2 The failure of any party hereto to enforce at any time any of the
provisions hereof shall not be construed to be a waiver of such provisions or of
such party's rights thereafter to enforce such provisions.
20.3 This Agreement constitutes the entire understanding between the
parties hereto and replaces all prior understandings and agreements between the
parties with respect to the Play. It may not be modified except by a written
instrument signed by all of the parties.
20.4 Paragraph headings are inserted for convenience only and shall not
be deemed part of this Agreement for any purpose whatsoever.
20.5 This Agreement may be executed in several counterparts, and all
counterparts so executed by both the parties hereto and affixed to this
Agreement shall constitute a valid and binding agreement, even though all the
parties have not signed the same counterpart.
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IN WITNESS WHEREOF, the parties have affixed their hands as of the day
and year first above written.
NIKO INTERNATIONAL
ENTERTAINMENT CORP.
By
---------------------------------
MAGICWORKS ENTERTAINMENT INC.
By
---------------------------------
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EXHIBIT 2.2
[Production Budget]
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EXHIBIT 3
[Booking Terms]
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EXHIBIT 8
[Preproduction Expenses]
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