AGREEMENT
THIS AGREEMENT is by and between, NAMCO CYBERTAINMENT, INC., ("NAMCO"),
a Delaware Corporation, and Laser Storm, Inc., a Colorado Corporation ("LSI").
1. Definitions.
"Premises" means the entire entertainment and amusement area leased by
NAMCO at the ----------------- located at ----------------, -------------------,
-----, ------.
"Location" means the part of the Premises where the LSI lobby, counter,
ready-rooms and arena are located.
"Equipment" means all LSI system components, products and arena
installed at the location in the Premises.
"Gross Sales" all ticket sales originating from the location.
"Adjusted Gross Sales" is Gross Sales less any and all sales, use or
other taxes imposed by Federal, State and Local governments, or any subdivision
thereof, and less 2% royalty for the Stargate theme. The royalty will be
calculated on Gross Sales before any reduction.
2. Premises. The premises consists of --------- square feet of the Premises
designated for the Laser Storm arena, --------- square feet designated for the
lobby, counter and ready-rooms. The exact square footage may vary as agreed by
the parties. Namco will be responsible for all rents to the owner of the
property. LSI has no property interest in the subject property or the Premises
nor responsibility for rents due to the owner of the property.
3. Build-out. LSI will be responsible for the demolition (if any), construction
of demising walls, sales counter and basic finish treatments, including paint
and carpet for the location. The cost of build-out will be initially borne by
LSI. Upon completion of the build-out, NAMCO will reimburse LIS for the cost of
the build-out up to $40,000.00. LSI will pay back to NAMCO, in full, without
interest, the build-out allowance by the end of the first year of this Agreement
(from the commencement date). Any rent received over the $50,000.00 minimum
guarantee rent will be attributed to the pay off of the build-out debt. All
fixtures installed as part of LSI's build-out of the premises, including but not
limited to the sales counter, carpet, all components associated with the arena,
all support structures for the arena, cash registers, office equipment,
merchandise and vending machines, shall remain the property of LSI and may be
removed by LSI at the termination of this Agreement for any extension thereof.
4. Term.
a. The "Commencement Date" of the term of this Agreement shall be December 1,
1996, but in no event shall the Commencement Date be later than March 1, 1997.
b. The term of this Agreement shall be for a period of three (3) full years
beginning with the Commencement Date and ending on the last day of the month
following completio9n of the third year. So long as the adjusted gross sales are
$300,000 or more for the third year, LSI has the option to renew this Agreement
once for a three year extension pursuant to its terms. If however, adjusted
gross sales is less than $300,000, then the option for three years can be
exercised only by agreement of the parties.
5. Rent. As for the Location, LSI will pay to NAMCO 25% for the first $250,000
of Adjusted Gross Sales and 35% of Adjusted Gross Sales in excess of $250,000.
This amount has no upward limit, but LIS will pay a minimum of $50,000.00 in
rent for each of the first three years of this Agreement. In the first year of
the agreement, any rent paid over the $50,000.00 minimum will be credited
against the build-out allowance owed to NAMCO, as provided for in this
Agreement. For example, of the cost of building out the space is $37,000 and LSI
pays $70,000 in rent, pursuant to this paragraph, then LSI will owe NAMCO at the
end of the first year $17,000.00 to pay in-full the build-out allowance.
Payments will be by the 15th of each month, the amount based on the previous
months Adjusted Gross Sales.
6. Advertising Budget. Advertising after the first twelve (12) months from the
commencement date, LSI will rebate to NAMCO 25% of any funds not expended under
the advertising and marketing line item budget projection of ten (10)% of gross
sales.
7. Reporting of Adjusted Gross Sales.
a. On or before the 15th day following the end of each month, LSI shall submit a
written statement showing accurately and in detail the amount of the Adjusted
Gross Sales during the preceding monthly period. b. LSI agrees to keep at LSI's
principal office accurate and adequate books and records using generally
accepted accounting principles to record and report Adjusted Gross sales of LSI.
8. Equipment. LSI will install a 48 player system and a Stargate themed
arena.
9. LSI Covenants and Agrees to:
a. Operate the Premises as a themed interactive laser tag game
b. Operate the Premises during the normal business hours as determined by
NAMCO.
c. Be solely responsible for the operation of the Location and Equipment; shall
provide management and other personnel at its sole cost and expense; keep the
Equipment and location in good condition and good working order. c. Promptly pay
all personal property taxes and similar assessments attributable thereto; all
sales, gross receipts, or other taxes assessed on the Adjusted Gross Sales; and
necessary licenses and fees to operate the Location and/or Equipment. LSI agrees
to hold NAMCO harmless from any loss, damage, cost or expense for failure to pay
such taxes and other expenses. e. Obtain and keep in full force during the term
a broad form of comprehensive general liability insurance with respect to the
operation of the location and Equipment thereon. The coverages shall include
activities and operation conducted by the LSI and any other person performing
work on behalf of LSI. The minimum limits of liabi8lity shall not be less than
One Million Dollars ($1,000,000) for each occurrence of bodily injury and
property damage or such higher limits as may be reasonably necessary. In
addition, LSI shall maintain worker's compensation insurance for all of LSI's
employees working on the location in amounts sufficient to comply with
applicable laws and regulation. To the extent LSI is to provide insurance, NAMCO
shall be named as an additional insured.
10. NAMCO Covenants and Agrees to:
a. Continue to operate the Premises and provide entertainment facilities to the
public as long as NAMCO holds a lease on the Premises.
b. Pay all property taxes and similar assessments on the Premises and shall
indemnify and hold LSI harmless from any loss, damage, cost or expense for
failure to pay such taxes and other assessments.
c. Provide, at its sole cost and expense, heating and air conditioning,
electricity, water and utilities necessary to operate Premises, and sprinkler
system as required by law or ordinance.
d. Provide floor plans of the Premises and Location. From this floor plan LSI
will prepare a construction plan and build the Location.
11. Indemnification. LSI shall indemnify and hold NAMCO harmless for all losses,
claims, demands, damages, liability or expenses resulting from any injury or
death of any person or any loss or damage to any property caused by or resulting
from any acts or omissions of any officer, employee, agent, contractor,
licensee, guest, invitee, or visitor of LSI in or about the Location. NAMCO
shall indemnify and hold LSI harmless from all losses, claims, demands, damages,
liability or expenses resulting from any injury or death of any person or any
loss or damage or any property caused by or resulting from any acts or omissions
of any officer, employee, agent, contractor, licensee, guest, invitee, or
visitor of Namco in or about the Premises.
12. Damages.
a. In the event that the location is partially damaged during the Term by fire
or other casualty, then NAMCO shall proceed to repair such damages and restore
the facility to substantially the same condition at the time of such damage. If
the Location is closed, then the monies due as shall be abated, pro-rata, from
the date of the damage until the facility has been restore. If the Location is
open, then the monies due as rent as shall be reduced proportionately to the
loss of the average daily adjusted gross sales for that year of the agreement,
the deadline for such repayment will be extended by the number of days the
location is damaged regardless of whether or not the location is closed or
remains open. b. In the event that the Location is substantially damaged or
destroyed by fire or other casualty, then all rents and build-out allowance (if
in the first year) will be abated and LIS shall not open for business. The
Agreement shall stay in full force and effect and LSI shall re-open for business
when the facility has been restore or rebuilt. NAMCO may elect not to rebuild or
restore the facility and terminate this Agreement by giving notice to LSI within
a reasonable time.
13. Failure, Stoppage or Interruption of Service. Any failure by NAMCO, for any
reason whatsoever, to open, or keep open, the Location for business, or provide
the utilities and services as stated herein, shall be deemed a default of this
Agreement and all monies due shall be abated until the Premises/Location
re-opens for business or said services have been restored.
14. Default. Any one of the following shall be deemed to be an "Event of
Default"" a. Failure on the part of LSI to make payment of any monetary amount
due under this Agreement within (10) days after NAMCO has sent to LIS notice of
such default. b. Failure on the part of LSI to open for business, except as a
result of unavoidable casualty; failure to perform any other covenants or
agreements under this Agreement; or abandonment of the location. NAMCO shall
give LSI written notice of such breach of this Agreement and LSI shall have ten
(30) days to cure any such breach, which, if not cured, shall be deemed a
default by LSI. c. Failure on the part of NAMCO to open the Premises for
business or provide to LSI utilities and services as specified in Section 9
except as the result of unavoidable casualty; or failure to perform any other
covenants or agreements under this Agreement. LSI shall give NAMCO written
notice of such breach of this Agreement and NAMCO shall have ten (30) days to
cure any such breach, which if not cured, shall be deemed a default by NAMCO. d.
Should any Event of Default by NAMCO occur, then LSI, in addition to any
remedies under applicable statues or law, shall have the right to terminate this
Agreement by giving 30 days written notice to NAMCO and shall remove its
Equipment, fixtures and personal property and immediately vacate the Location.
15. Assignment. LSI shall have the right to assign or transfer this Agreement
upon the consent of NAMCO, which shall not be unreasonably withheld, in relation
to LSI's merger or consolidation with a Parent, subsidiary or affiliated
corporation. Any such assignment or transfer shall not relieve LSI as primary
obligor from its obligations hereunder.
16. Miscellaneous.
a. The parties shall not violate any laws, ordinance, notices, orders, rules,
regulations or requirements promulgated by any governmental authority in its use
of the Location. b. NAMCO and LSI shall cooperate in their respected operations
to maximize and insure the operations of the other. Without limitation, such
cooperation shall include joint personnel training sessions, joint operational
meetings, joint advertising, and cross-use of NAMCO and LSI facilities. c. LSI
shall participate with NAMCO in promotional activities, group sales, birthday
parties and other events to customers, providing free coupons or discounted
tokens.
Notice.
Whenever by the terms of this Agreement notice, demand or other communication
shall or may be given either to NAMCO or to LSI, the same shall be in writing
and shall be sent by registered or certified mail, or shall be delivered by
private express carrier. All such notices shall be effective upon delivery,
attempted delivery or refusal, whichever shall first occur at the address to
which the same were sent. The terms of this agreement will be subordinate to the
existing ANMCO lease in this location.
LASER STORM, INC., NAMCO CYBERTAINMENT, INC.,
a Colorado Corporation a Delaware Corporation
By: By:
------------------------ ---------------------------
Its: Its:
------------------------ --------------------------
Date: Date:
AMENDMENT
This agreement hereby amends the previously executed Letter of Understanding
dated May 31, 1996 and six subsequent location Agreements dated October 21,
1996, together known as "Agreements", by and between Laser Storm, Inc. ("LSI")
and Namco Cybertainment, Inc. ("NAMCO").
1. Definitions.
"Premises" shall be amended by the attachment made hereto.
This attachment amends the pending Agreements dated October
21, 1996 as referenced above.
4. Term.
Commencement Date. Commencement date is hereby amended to no later
than August 1, 1997 unless otherwise agreed by both parties.
8. Equipment. LSI will install its laser tag game equipment as
is appropriate for the size of each location's allocated
space. LSI will provide no less than one (1) player unit per
100 square feet of arena playing area. LSI will provide an
appropriate theme for each location and will be at LSI's
sole discretion.
This Amendment, where amended, supersedes all previously executed Agreements as
indicated above. All other portions of the Agreements remain unchanged unless
further agreed to in writing by both LSI and NAMCO.
Accepted:
Laser Storm, Inc., Namco Cybertainment, Inc.,
A Colorado Corporation a Delaware Corporation
By: By:
----------------------- ------------------------
Its: Its:
---------------------- -----------------------
Date: Date:
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