ADVERTISING DISPLAY AGREEMENT
This Advertising Display Agreement (the "Agreement") is made and entered
into this 17th day of March, 2003, by and between the Las Vegas Monorail
Company, a Nevada non-profit corporation ("Owner"), and Xxxxxx Beverage Company,
a Delaware corporation ("Advertiser"), with reference to the following facts and
purposes:
A. Owner is causing to be built a mass transit monorail system known as the
Las Vegas Monorail(TM) (the "Monorail"), to be used for public transportation in
the Las Vegas Strip resort corridor, which is expected to open for revenue
service in early 2004. In connection with the Monorail transportation services,
Owner will make available space for advertising and promotional displays in or
upon the Monorail vehicles and stations.
B. Advertiser has reviewed advertising and promotional opportunities on the
Monorail and desires to advertise on the Monorail.
Now, therefore, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Contract Price and Location of Advertising Displays. Advertiser shall
pay to Owner the sum of $____ per year (the "Contract Price") for the right to
place advertising and promotional displays on and the right to decorate both the
exterior and interior of the 4-car vehicle scheduled to be delivered to Las
Vegas in or about March 2003 (the "Vehicle") (together "Advertising"), except
that Advertising may not (i) be placed on the inside or outside of the vehicle
windows without the prior written consent of Owner nor (ii) exceed the
limitations in Section 3(b) of the Standard Terms. Advertiser has submitted
preliminary advertising designs and decorations for and advertising to appear on
the Vehicle as illustrated on Appendix 1 hereto (which are in draft form and may
be altered prior to production at the discretion of Advertiser pursuant to
Paragraph 9), and which contemplate the entire exterior of the Vehicle as well
as the floor, seating surfaces, overhead light panels, the outside face of the
interior control boxes, and other surfaces of the interior of the Vehicle, as
shown on the drawings attached as Appendix 1, being covered with film depicting
the aforesaid designs, decorations and advertising. Owner hereby warrants and
represents that such designs, decorations and advertising and any similar
designs, decorations and advertising which cover a similar area of both the
exterior and interior of the Vehicle, do not exceed the limitations contemplated
in Section 3 (b) of the Standard Terms. Owner may coordinate its designs and
color schemes for the remainder of the Vehicle's interior with Advertiser's
designs and decoration such that the aesthetics and designs of the interior are
compatible. The Advertising further includes the right to install 4 video
displays, fixtures, fittings, and other Advertising materials in and to the
interior of the Vehicle at Advertiser's expense, in accordance with the designs
approved by Owner, provided no damage results to the Vehicle.
2. Term of Agreement. Subject to the Conditions Precedent set forth in
Section 6 below, this Agreement becomes effective immediately upon full
execution and delivery hereof. The "Commencement Date" shall be the first day of
the Monorail's revenue ready status, presently estimated to begin service in
early 2004. The "Initial Term" of this Agreement shall end on the first (1st)
anniversary of the Commencement Date. The Advertiser shall have the right to
renew this Agreement for nine (9) additional one (1) year terms, each of which
additional terms shall commence on the day following the expiration of the then
current term. At least 120 days before the expiration of the then current term,
Advertiser must notify Owner in writing of its intent to renew this Agreement
for an additional one (1) year term. Should Advertiser fail to so notify Owner,
this Agreement shall expire and terminate automatically on the expiration of the
then current term. At least 120 days prior to the expiration of the then current
term, Owner may notify Advertiser of its intent to terminate this Agreement.
Should Owner so notify Advertiser, then (i) Advertiser's right to extend this
Agreement set forth in this Section 2 shall immediately expire and terminate and
(ii) the Agreement shall expire and terminate upon the expiration of the then
current term.
3. Contract Price Adjustment and Protection. Owner retains the right to
re-determine and adjust the Contract Price to fair market rates, whether an
increase or decrease to the Contract Price, at any time after the expiration of
three (3) years from the Commencement Date and at any time after the expiration
of three (3) years from any subsequent re-determination. During the Initial
Term, Owner shall provide Advertiser minimum price protection of the Contract
Price, whereby Owner shall decrease the Contract Price by or, as necessary,
refund to Advertiser the difference between the Contract Price and any lower
contract price that may be charged by Owner to any other advertiser for single
train advertising upon substantially similar terms.
4. Non-exclusivity. This Agreement does not provide sponsorship or naming
rights for any Monorail vehicle or station. For reasons related to the
Monorail's tax exempt financing, Owner must retain the right to accept any
advertising for any product whatsoever from any advertiser elsewhere on the
Monorail, and this Agreement does not convey any exclusive rights to advertising
for beverage, soft or energy drinks or product categories on the Monorail.
5. Bombardier Consent. Owner may not have the right to allow the Advertiser
to place advertising on or decorate the Vehicle until ownership is transferred
to Owner. Consequently, in addition to Owner's approval of Advertising as set
forth herein, Advertiser will need to obtain the permission of Owner's
contractor, Bombardier Transit Corporation ("BTC"), as Advertiser intends to
place Advertising on the Vehicle, before Owner takes ownership of the vehicle.
Owner will assist Advertiser to obtain this consent at the earliest available
opportunity, though Owner cannot guarantee BTC's willingness to so consent.
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6. Conditions Precedent. The validity of this Agreement is conditioned upon
and subject to the fulfillment of the following conditions precedent. Should any
of the following conditions precedent not be timely fulfilled or waived in
writing by Advertiser, this Agreement shall be null and void and neither party
shall have any obligation/s of whatsoever nature to the other:
(a) That agreement is reached in writing between the Owner and Advertiser
with respect to the designs, decorations and advertising to appear on both
the exterior and interior of the Vehicle, by not later than April 4, 2003.
Advertiser is aware that Owner's approval of Advertiser's designs requires
prior approval by Owner's Board of Directors and a Section 3(b) compliance
determination by Owner's tax compliance counsel prior thereto;
(b) That all permissions required from BTC with regard to the decoration of
and application of advertising on and access to the Vehicle are obtained by
no later than April 4, 2003; and
(c) That a final written agreement is concluded between the Owner and
Advertiser with respect to the rights of the Advertiser to place vending
machines to sell Advertiser's Monster/ Xxxxxx'x Energy Drinks and Natural
Sodas on all monorail stations throughout the term of this agreement, upon
mutually acceptable terms and conditions, by no later than July 31, 2003.
7. Testing and Promotions. Owner agrees that the Vehicle will be operated
regularly by Owner during the testing period ending January 1, 2004 (the
"Testing Period") in accordance with Owner's established system testing
procedures and shall, during the Testing Period, be the primary vehicle used and
be used whenever reasonably possible by Owner to demonstrate and promote the
Monorail to members of the press, third parties, consumers, passengers, and
members of the public to achieve maximum visibility for the Vehicle (fully
decorated), though not exclusively. Furthermore, Advertiser agrees that, subject
to the timely delivery of the Vehicle, it will make its reasonable best efforts
to organize, hold and fund various cross-promotional events, being, : (1) an
event in New York City, New York for the "unveiling" the nose car of the Vehicle
and general promotion of the Monorail/Monster drink substantially like the event
described in Appendix 2 attached hereto as "Unveiling of First Train -
Manhattan, New York" and (2) an event for the arrival of the Vehicle in Las
Vegas, Nevada substantially like the event described in Appendix 2 attached
hereto as "Arrival of First Train in Las Vegas". Owner and Advertiser agree to
make reasonable efforts to coordinate and participate in events that
cross-promote the Monorail and Monster drinks and other of the Advertiser's
products, such as those listed on Appendix 2, throughout the term of this
Agreement; however, neither Owner nor advertiser shall be obligated to fund any
such events.
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8. Letter of Credit. No less than thirty (30) days prior to the
Commencement Date, Advertiser shall provide owner an irrevocable standby letter
of credit (the "Letter of Credit") in the Contract Price amount in favor of
Owner to serve as a guaranty of payment of the quarterly installment payments
required to be made to Owner pursuant to Section 1 of the Standard Terms
(defined below). If Advertiser fails to make any quarterly payment of the
Contract Price by the end of the five (5) day grace period provided in written
notice pursuant to Section 1 of the Standard Terms, then Owner may draw the
outstanding amount of the quarterly payment due to Owner against the Letter of
Credit at any time thereafter. Once a quarterly payment has been made, then the
Letter of Credit shall decrease by the amount of the quarterly payment.
Advertiser or the bank issuing the Letter of Credit must obtain owner's consent
to the form of the Letter of Credit, which consent shall not be unreasonably
withheld. In the event that Advertiser renews the Agreement for an additional
term, the Advertiser shall renew the Letter of Credit.
9. Advertising Changes. Advertiser may change the image of advertising on
the Vehicle at any time and may promote any of its products thereon, at
Advertiser's sole cost and expense. Advertiser may make any such changes only
after receiving prior written approval from Owner, which approval shall not be
unreasonably withheld or delayed.
10. Video Displays. Advertiser shall have the right to install one video
display in each car in the Vehicle for promotional or advertising purposes.
Owner shall have the right to install a separate video network of up to one
video display per car in the Vehicle for promotional, advertising or
informational purposes but shall not promote or advertise competitive beverages
thereon. Owner and Advertiser shall make reasonable efforts to coordinate or
integrate their video display systems.
11. Standard Terms. The attached Standard Terms and Conditions to
Advertising Display Agreement ("Standard Terms") are hereby incorporated by
reference and made a part hereof.
In witness whereof, the parties have entered into this Agreement on the
date first written above.
LAS VEGAS MONORAIL COMPANY XXXXXX BEVERAGE COMPANY
By /s/XXXX XXXXXXX By /s/XXXXXX XXXXX
--------------------------------- ---------------------------
Name/Title Chairman Xxxxxx X. Xxxxx
------------------------- Chief Executive Officer/Chairman
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STANDARD TERMS AND CONDITIONS TO ADVERTISING DISPLAY AGREEMENT
1. Payment Terms. Payment of the Contract Price for the Initial Term of
this Agreement shall be divided into four (4) equal quarterly installments. The
first quarterly installment shall be received by Owner no later than the
Commencement Date and each quarterly installment thereafter shall be received by
Owner no later than the first day of each subsequent three (3) month period. The
Contract Price for each additional term for which this Agreement is renewed
shall be due on the same terms. The Advertiser's failure to make any payment
required hereunder within 5 days after receipt of written notice to Advertiser
in terms of Section 10 below, shall be a default of this Agreement or trigger
Owner's right to draw on the Letter of Credit.
2. Renewals. Renewals shall be permitted as provided in Paragraph 3 of the
Agreement.
3. Approval of Advertising. Owner retains reasonable discretion as to the
suitability of all Advertising. If Owner fails or declines to approve
Advertising which reasonably complies with the terms of the Agreement (including
the Advertising Policy and the Section 3(b) tax limitations), Advertiser shall
be entitled to thereupon terminate this Agreement, with no further obligations
or liability hereunder and shall be entitled to a refund of a pro rata portion
of the Contract Price in respect of the unexpired portion of the then current
term of this Agreement.
a. Advertiser shall comply with the Advertising Policy ("Policy") approved
by Owner, which may be amended from time to time. A copy of the Policy is
attached and made a part hereof. The extent and scope of the Advertiser's
advertising may not exceed limitations arising out of Owner's tax exempt
bonds. Subject to the provisions of Section 1 of the Advertising Display
Agreement, Owner may request the alteration of or adjustment to such
advertising to ensure such compliance. In addition to Advertiser's
termination right provided in section 3 (a) above and without any
limitation thereto, should Owner require the alteration of or adjustment to
the advertising to enable the same to comply with any limitations arising
out of Owner's tax exempt bonds, Advertiser shall be entitled to terminate
this Agreement, with no further obligations or liability hereunder and
shall be entitled to a refund of a pro rata portion of the Contract Price
in respect of the unexpired portion of the then current term of this
Agreement or, at the Advertiser's election, to an equitable reduction of
the Contract Price.
b. Owner may alter or adjust such advertising to ensure such compliance. In
addition to the Advertiser's termination right provided in this Section 3
above, if Owner must alter or adjust materially the advertising to comply
with tax law, Advertiser is entitled to an equitable adjustment of the
Contract Price.
c. Advertiser shall submit and obtain written pre-production approval from
Owner of all design, cabinetry, mechanics, installation, artwork, and copy.
Advertiser's initial designs shall be submitted within 30 days of the date
hereof, but in no case later than 14 days before Advertiser plans to
install the Advertising. Advertiser may not install advertising displays,
or change the design, cabinetry, mechanics, installation, artwork, and copy
without the prior written approval of Owner, which approval shall not be
unreasonably withheld or delayed. Advertiser shall coordinate and schedule
installation of the advertising with Owner.
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4. Production and Removal, Costs. The Contract Price represents the total
net payments to Owner for the advertising as set forth herein. The Contract
Price does not include charges for production, installation, and/or removal of
the Advertiser's advertising or the cost of construction and maintenance of such
advertising. The Advertiser shall be responsible for and bear all costs to
construct, install, produce, maintain, and remove the advertising, including the
cost to restore the Monorail to its original condition. Should it become
necessary for Owner to remove Advertiser's advertising as a result of
Advertiser's default, Advertiser shall reimburse Owner for all reasonable costs
incurred in connection therewith upon fifteen (15) days written notice.
5. Interruptions and Alterations. Any interruption of service caused by
Owner shall not constitute a breach of the Agreement, and Owner shall have the
option of giving Advertiser an extension of term of service or pro rata credit
equal to the period of interruption. Should Owner need to substantially alter
the Advertiser's advertising due to remodeling or construction, whether
temporary or permanent, Advertiser agrees that its display(s) can be relocated
by Owner to a comparable location upon prior approval of Advertiser, which
approval shall not be unreasonably withheld, without any modification or
adjustment to the Agreement, including the Contract Price and Term. The
display(s) will be returned to their original location at the conclusion of
construction should the location be available for such display(s). Owner will be
responsible for any costs to remove, reinstall or relocate the display(s) due to
construction or remodeling of the Monorail.
6. Power. Owner will provide electrical power to Advertiser's display(s) up
to the standard 5.4 kw per hour. Advertiser shall be responsible for the cost of
power in excess of the standard load if the Advertiser's electrical load exceeds
the standard. Such additional costs shall be due and payable monthly upon
fifteen (15) days written notice.
7. Duty to Maintain. Advertiser shall be responsible to keep and maintain
its advertising display(s) in a clean, operable and aesthetically pleasing
manner. Owner, in its reasonable discretion, may require changes or improvements
to display(s) which are or have not been kept in a clean, operable or
aesthetically pleasing manner; however, Owner is responsible for washing and
cleaning the Vehicle regularly. If Advertiser has failed or refused to make
appropriate changes within fifteen (15) days of Owner's written notice, Owner
shall have the right, at its option, to make said changes and charge Advertiser
for all reasonable costs in connection therewith. Unless an emergency,
Advertiser, or its contractor, must notify Owner of all maintenance scheduled
for display(s) at least 48 hours in advance, regardless of the reason for the
maintenance.
8. Insurance. Advertiser agrees to obtain and maintain in full force and
effect throughout the term of this Agreement commercial general liability
insurance with a minimum coverage limit of Two Million Dollars ($2,000,000.00)
per occurrence, Five Million Dollars ($5,000,000.00) aggregate, issued by a
company and in a form acceptable to Owner. The policy shall name Owner as an
additional insured on the policy and must cover damage to Owner's property
arising out of damages caused by Advertiser, its agents, representatives or
contractors in addition to claims by third parties for damages arising out of
Advertiser's advertising. The policy shall require that Owner be notified in
writing at least thirty (30) days prior to its cancellation. A certificate of
insurance for the policy shall be delivered to Owner within ten (10) days after
execution of this Agreement, and any renewal or substitute policy shall be
delivered at least twenty (20) days prior to expiration of an existing policy.
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9. Indemnification.
a. Indemnification by Advertiser. Advertiser agrees to indemnify, defend
and hold Owner, its officers, directors, employees, and representatives forever
harmless from and against all claims, demands, lawsuits, liability, loss,
judgments or other expense (including, but not limited to, defense costs,
expenses and reasonable attorneys' fees) made or imposed upon Owner arising out
of any allegations of injuries to or death of persons (including wrongful
death), damages to property, damages for libel, violation of the right of
privacy, plagiarism, copyright infringement, and any other claims, that directly
arise from (1) the display of any Advertising installed by Advertiser on the
Monorail pursuant to this Agreement, or (2) damage from the materials or
equipment that Advertiser may install on the Monorail pursuant to this
Agreement.
b. Indemnification by Owner. Owner agrees to indemnify, defend and hold the
Advertiser, its officers, directors, employees, and representatives forever
harmless from and against all claims, demands, lawsuits, liability, loss,
judgments or other expense (including, but not limited to, defense costs,
expenses and reasonable attorneys' fees) made or imposed upon the Advertiser
arising out of any allegations of injuries to or death of persons (including
wrongful death), damages to property, and any other claims which do not arise
out of (1) the installation, removal, or display of Advertising installed on the
Monorail pursuant to this Agreement or (2) damage from the materials or
equipment that Advertiser may install on the Monorail pursuant to this
Agreement.
c. The parties, their respective officers, directors, employees,
representatives and agents, shall not be liable for any damage or liability
occurring by reason of the negligent act or omission, or intentional or willful
misconduct of the other party, its officers, directors, employees,
representatives or agents.
10. Default.
a. Default by Advertiser. In addition to other defaults set forth herein,
Advertiser shall be in default if Advertiser fails to: (i) maintain current
insurance policies as provided in Section 8; (ii) obtain Owner's approval of the
advertising pursuant to Section 3 of the Standard Terms above; or (iii) fulfill
any other part of this Agreement. Owner shall provide Advertiser a reasonably
detailed written notice of default. Advertiser shall have fifteen (15) days from
receipt of the notice (5 days in the case of non payment of any part of the
Contract Price) to cure the default. If Advertiser has not cured the default
within fifteen or five (15 or 5 ) days of notice, as the case may be, Owner may,
at its sole option, terminate this Agreement or draw on the Letter of Credit,
retain all sums of money paid by Advertiser to Owner, or remove the Advertising
pursuant to Section 4.
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b. Default by Owner. Owner shall be in default if Owner fails to fulfill
any terms of this Agreement. Advertiser shall provide Owner with a reasonably
detailed written notice of default. Owner shall have fifteen (15) days from
receipt of the notice to cure the default. If Owner has not cured the default
within fifteen (15) days of notice, Advertiser may, at its sole option,
terminate this Agreement, recover a pro rata portion of the Contract Price in
respect of the unexpired portion of the then current term of this Agreement
11. Compliance with Law. The parties and this Agreement shall comply with
all federal, state, and local laws. If any clause, provision, section or part of
this Agreement (i) is ruled invalid by a court of competent jurisdiction, or
(ii) would negatively affect the tax-exempt status of Owner's bonds, then the
parties shall promptly meet and negotiate a substitute for such clause,
provision, section or part, which shall, to the greatest extent legally
permissible, effect the original intent of the parties, including an equitable
adjustment to the Contract Price to account for any change in the amount or type
of advertising resulting from such invalidated or offending portion.
12. Owner's Rights. Owner has registered Las Vegas Monorail(TM) and
reserves all rights to the use of the name. Advertiser, including all
representatives and agents, must obtain Owner's advance written consent to use
Las Vegas MonorailTM or images of any portion of the Monorail for any public
relations, promotional, marketing, advertising, or other purpose, provided that
such consent may not be unreasonably withheld or delayed by Owner. Owner hereby
acknowledges that it is the intent and purpose of Advertiser to utilize the
Monorail and images of portions of the Monorail for major public relations,
promotional, marketing, advertising and other similar purposes for, and in
connection with, the operation by the Advertiser of its business and sale of its
products and hereby agrees thereto, subject to Owner's approval of such
promotional campaigns. Owner hereby consents to Advertiser's use of the visual
images of the Vehicle with its advertising and Las Vegas Monorail(TM) in its
normal day-to-day operations, advertising and marketing activities, and
communications with third parties, provided that Owner reserves the right to
withdraw such consent at any time.
13. General Terms. This document embodies the entire agreement between the
parties and may not be amended, modified, altered or changed in any respect
whatsoever except by a writing duly executed by the parties hereto. Advertiser
represents and warrants to Owner that it has all corporate or entity approvals
necessary to enter into this Agreement. Advertiser shall not assign or transfer
Advertiser's rights or duties under this Agreement without the prior written
consent of Owner, which consent shall not be unreasonably withheld. The waiver
by either party of a breach of any provision of the Agreement by the other shall
not operate or be construed as waiver of any subsequent breach by the party. Any
notice given under this Agreement must be in writing and hand-delivered, faxed,
or sent by public mail to an address either party to the agreement specifies in
writing to the other party. This Agreement is to be performed in, governed by,
and construed in accordance with the laws of the State of Nevada. In the event
of any dispute, the venue of any action shall be had in Xxxxx County, Nevada,
and the prevailing party shall be entitled to recover its reasonable attorneys'
fees and costs, including fees and costs in bankruptcy.
