EXHIBIT 10.1(g)
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is dated April 10,
2003 (the "Effective Date") between Greeley Partners, L.P., a Texas limited
partnership (the "Owner") and CNMK Texas Properties, Ltd., a Texas limited
partnership (the "Operator" or "Cinemark").
BACKGROUND
A. Owner is engaged in the business of constructing, owning and
operating a multiplex movie theatre located in Greeley, Colorado on real estate
legally described on Exhibit "A" hereto (the "Theatre"). Operator has expertise
in the construction, management and operation of movie theatres and related
activities.
B. Owner desires to retain Operator to provide management services with
respect to all aspects of constructing and operating the Theatre, and Operator
is willing to provide such management services, upon the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Owner and Operator,
intending to be legally bound, agree as follows:
ARTICLE I
TERM OF AGREEMENT
1.1 INITIAL PERIOD. This Agreement commences on the Effective Date and
shall continue through and including the twentieth anniversary of the Effective
Date (the "Initial Period").
1.2 ADDITIONAL PERIODS. This Agreement shall be extended at the option
of either party hereto for one or more additional periods of five (5) years each
(each an "Additional Period") unless both Owner and Operator have delivered
written notice to the other at least 180 days but not more than 365 days prior
to the end of the then Initial Period or Additional Period, as applicable,
electing not to extend this Agreement for an Additional Period.
ARTICLE II
MANAGEMENT OF THEATRE
2.1 ENGAGEMENT OF OPERATOR. Subject to the terms and conditions of this
Agreement, (a) Owner hereby engages Operator as its sole and exclusive agent for
constructing and managing the Theatre during the Term, and (b) Operator hereby
accepts such engagement and agrees to fulfill its duties hereunder and to
construct, operate, manage, direct, maintain and supervise the Theatre during
the Term in a good, businesslike manner and at a standard comparable to the
first class theatres operated by Operator on its own behalf or for persons other
than Owner.
2.2 SPECIFIC DUTIES OF OPERATOR. Operator shall have the sole
responsibility and sole authority to make any and all decisions with respect to
the day-to-day Theatre operations. Without limiting the generality of the
foregoing, Operator shall have the following duties and authority, all at the
expense of Owner (subject to Article 4):
(a) Operator shall determine and put into effect all policies with
respect to performance at the Theatre, including, without limitation, showtimes,
hours of operation, ticket prices and "goodwill" tickets.
(b) Operator shall consult with and keep Owner advised concerning
all material aspects of Operator's activities with respect to the construction,
management and operation of the Theatre.
(c) Operator shall employ and train, at Owner's expense, theatre
managers, assistant managers, management trainees and other employees
(collectively, the "Employees") sufficient to direct, supervise and staff the
Theatre's operation. The Theatre Employees shall be paid by Owner. Operator
shall determine the compensation, fringe benefits and employment duration of all
Employees and the assignment of duties to be performed by such Employees, and
shall negotiate and settle any labor disputes. Operator shall procure and
maintain adequate workers' compensation insurance or other similar insurance as
may be required by law, at Owner's expense, covering the Employees.
(d) Operator shall contract for and purchase on behalf of and in
the name of Owner, all merchandise, materials, supplies and accessories to be
used in connection with the operation and maintenance of the Theatre, including
without limitation, concessions used in connection with the Theatre.
(e) Operator shall determine and put into effect all Theatre
advertising and all business policies with respect to such advertising,
including, without limitation, advertising slides, advertising allowances from
distributors and settlement of such allowances;
(f) Operator shall remit when due to the proper governmental
authorities all taxes on box office admissions that are not measured by net
income and all sales taxes on other Theatre revenues on behalf of Owner.
Operator shall also remit all other taxes payable with respect to the operation
of the Theatre, including without limitation payroll taxes, and file such tax
returns as are required with respect to such taxes. Operator shall timely
provide to Owner copies of all such tax returns filed and give Owner access to
all financial or other records concerning such taxes.
(g) Operator shall obtain and maintain, for itself or on behalf of
and in the name of Owner, as the case may be, all licenses, permits and
authorizations from any governmental authorities that are necessary for the
operation of the Theatre in the manner required by this Agreement. Owner agrees
to execute and deliver any and all applications and other documents and to
otherwise cooperate to the fullest extent with Operator in applying for,
obtaining and maintaining all such licenses, permits and authorizations.
Operator shall at all times, and at its expense, remain qualified and licensed
to do business and be in good standing in the State of Colorado.
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(h) Operator shall have the right and duty on behalf of and in the
name of Owner to contract for and purchase concessions and concession supplies
for the Theatres and to set prices for and sell such concessions and concession
supplies; to determine and put into effect advertising and all business policies
with respect thereto; and to do and perform any and all things ordinarily
required in the operation thereof, all without limitation or prejudice to the
right and duty of Operator generally to supervise and manage the operations of
such Theatre concessions.
(i) Operator shall maintain at the expense of Owner all insurance
coverage customarily carried for comparable theatres in each jurisdiction where
the Theatre is located, which shall include, but not be limited to, terms,
conditions and provisions typically contained in the insurance policies covering
the theatres Operator owns or leases. Each policy shall cover Owner or any
mortgagee or beneficiary under any mortgage on the theatre as a named insured
and shall waive any rights of subrogation against any named insured. All
insurance policies shall include loss payment clauses in the term reasonably
required by any mortgage or other agreement. Operator shall have the right to
maintain such coverage pursuant to policies covering other properties of
Operator, provided that the cost of such coverage is allocated to the Theatre in
a manner reasonably acceptable to Owner and Operator.
(j) Operator shall immediately notify the Owner of any casualty,
disaster, loss, damage or injury occurring at the Theatre whether covered by
insurance or not. Operator shall not use the Theatre, or permit the same to be
used, for any purpose which will make void or voidable any such insurance
policies. Operator shall, upon request of Owner, assist Owner in any reasonable
manner, as Owner may request, in the settlement of any claim under any such
insurance policies.
(k) Operator shall manage the operations of the Theatre in
substantialcompliance with all applicable laws, regulations and other
requirements of all governmental and regulatory entities having jurisdiction
over the Theatre (collectively, "Regulatory Requirements"). Operator shall not
unreasonably refuse or delay compliance with any specific instructions of Owner
that are reasonably necessary to cause the Theatre to comply with Regulatory
Requirements. Owner shall cooperate with Operator in complying with Regulatory
Requirements, including paying all direct costs of compliance, including,
without limitation, the costs of third party consultants and reasonable
attorneys' fees.
(l) Subject to Section 10.11 regarding Confidential Information,
Operator shall keep, maintain and make available for inspection by any
authorized representative of Owner upon its request, at the principal office of
Operator and at reasonable times and intervals, sufficient records and other
data and books of account reflecting accurately all cash receipts and
disbursements and income and expenditures in the management and operation of the
Theatre.
(m) To the extent Operator deems necessary in connection with this
Agreement, Operator shall enter into contracts (after receiving approval from
Owner in the case of each contract involving expenditures over $100,000.00
annually in the aggregate) on behalf of and in the name of Owner with
architects, engineers, tradesmen and other independent contractors to perform
services
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with respect to the Theatre and supervise the administration, and monitor the
performance, of all work to be performed and services to be rendered under all
such contracts.
(n) On behalf of and in the name of Owner, Operator may enter into
such service, maintenance and other contracts, or otherwise obtain or provide
such service or maintenance as shall be necessary or appropriate for the
operation and maintenance of the Theatre, including the equipment and systems
located in or servicing such Theatre, contracts for utilities, elevator
maintenance, telephone service, interior cleaning, window cleaning, landscape
maintenance, rubbish removal, parking lot maintenance, fuel, heating and air
conditioning maintenance, security and vermin and insect extermination.
(o) On behalf of Owner, Operator shall, subject to Owner approval
in case of repairs involving expenditures in excess of the Replacement Reserve
(as defined in Section 2.4(a) below), refurbish, remodel and renovate the
Theatre, including all landscaping and parking fields, replace or supplement
operating equipment and fixtures and make repairs, in each case as it deems
necessary fromtime to time to preserve the Theatre as a first-class theatre.
The items of furnishings, fixtures and equipment so replaced or added shall be
and become, forthwith upon acquisition and installation and without further act
or action, the property of Owner and part of the Theatre (except as may
otherwise be provided by the applicable lease or state law). All such
replacements and additions shall be purchased by Operator, on behalf of and in
the name of Owner, at competitive prices, utilizing the funds in the Replacement
Reserve. Any such expenditure in excess of the Replacement Reserve must be
approved by Owner in advance. Emergency repairs immediately necessary for the
preservation and safety of the Theatre as to avoid the suspension of services
to the Theatre or danger of life or property may be made by the Operator
without the approval of Owner.
(p) On behalf of and at the expense of Owner, Operator shall
obtain the software for all necessary management information systems and the
necessary computer hardware for such systems.
(q) Operator shall manage the Theatres in a manner that is
consistent with and does not violate or cause a default under any leases,
reciprocal easement agreements, covenants, common area maintenance agreements
and other agreements to which Owner is a party affecting the Theatre (the
"Realty Documents") or any covenants, easements or other restrictions on the
use of the Theatre.
(r) Operator shall set programming times and location for the
Theatre,subject to the terms of any film licenses restricting Operator's
discretion with respect thereto.
(s) Operator shall receive, consider and handle the complaints of
all guests and users of any of the services or facilities of the Theatre.
(t) Operator shall book and license or cause to be licensed on
Owner's behalf, films and other attractions for exhibition in the Theatres,
negotiating film rental payments to be made by Owner, select films to be
exhibited, holding over existing films, book sneak previews and perform other
duties associated with the buying, booking and licensing of films, including
without
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limitation, any cooperative advertising with film distributors' trailer
placement. Operator shall book and pay film rental for the Theatre consistent
with the manner Operator books and pays film rental for the other theatres it
operates in the United States. Operator shall maintain a first run film policy
unless Owner approves a change of the booking policy in writing.
(u) Operator shall render the necessary accounting and bookkeeping
services generally required in the management of the affairs and operation of
theatres.
(v) Operator shall provide each partner of Owner, via email or
fax, with weekend box office and concession revenue figures no later than the
end of business every Monday.
(w) Operator shall provide each partner of Owner the following film
week bookings and schedules no later than the end of business each Tuesday.
2.3 PURCHASES FROM AFFILIATES. In its management of the Theatre,
Operator may purchase necessary goods, necessary supplies and necessary services
from or through Operator or any of its Affiliates so long as Affiliates are
disclosed to each partner of Owner and such prices are competitive and
comparable with the prices and terms of goods, supplies and services of like
quality available from non-affiliated third parties in an arm's length
transaction.
2.4 DUTIES OF THE OWNER. Owner shall consult with and cooperate with
Operator, at Operator's request, in the management and operation of the Theatres
and shall have the following specific duties:
(a) A reserve fund (the "Replacement Reserve") shall be created by
Owner for the purpose of refurbishing, remodeling and renovating the Theatre,
and replacing and supplementing the operating equipment and fixtures and making
repairs, all as described above in Section 2.2(o). Owner shall deposit into the
Replacement Reserve a sum of cash at least equal to one and one-half percent
(1.5%) of Gross Revenues (as defined below) from the Theatre for each month.
Such funds shall be deposited in a separate account in Owner's name. The monthly
deposits will be based on the Gross Revenues as shown on the Theatre's monthly
unaudited financial statements. Upon receipt of the annual audited financial
statements, Owner shall promptly deposit into the Replacement Reserve the amount
by which the aggregate monthly deposits for such year was less than one and
one-half percent (1.5%) of the annual Gross Revenues as shown on such annual
audited financial statements. If one and one-half percent (1.5%) of the annual
Gross Revenues shown on such audited financial statements are less than the
amount deposited for such year, Owner may reduce the amount of the next monthly
deposit(s) by the amount of such overpayment. Notwithstanding anything to the
contrary contained herein, at no time shall the balance in the Replacement
Reserve exceed $100,000.00. Any expenditure for the purposes described above in
Section 2.2(o) shall be paid out of the Replacement Reserve. Any such
expenditure in excess of the Replacement Reserve must be approved by Owner in
advance. The term "Gross Revenues" means the sum of all receipts from sales of
all items and services sold at or from the Theatre (for cash, credit, redeemed
gift certificate or discount tickets), as determined in accordance with
generally accepted accounting principles.
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(b) To the extent performable only by Owner (and not Operator as
agent of and on behalf of Owner), Owner shall use its best efforts to ensure
compliance with all Regulatory Requirements and Realty Documents.
2.5 OPERATOR'S PERFORMANCE WAIVED. Notwithstanding anything contained
in this Article II or elsewhere in this Agreement, Operator shall be excused
from its obligation to operate the Theatre in conformity with the standards set
out in Section 2.1 and, to the extent but only to the extent Operator is unable
to do so, perform the duties set forth in Section 2.2:
(a) to the extent Operator shall be prevented from compliance
with such standards or performance of such duties by events beyond Operator's
reasonable control, for the duration of such events, provided Operator shall
take all reasonable action to keep such period as short as possible;
(b) to the extent of any material breach by Owner of any provision
hereof, which breach prevents Operator from operating the Theatre in accordance
with such standards or performing such duties and is not cured within a
reasonable period of time after written notice of such breach to Owner by
Operator; and
(c) to the extent and whenever there is herein provided a
limitation upon Operator's ability to expend funds because of Owner's failure to
make such funds available, it being understood that in no event shall Operator
be required to expend its own funds to operate, maintain, repair or refurbish
the Theatre or to advance from its own funds to pay for any costs or other
expenditures authorized pursuant to the terms of this Agreement. However,
Operator shall bear and pay all of its own overhead, including the salaries of
its own officers, supervisory, administrative or accounting personnel.
ARTICLE III
COSTS AND EXPENSES
3.1 BANK ACCOUNTS. All monies advanced to the Theatre by Owner and all
Theatre revenues and all other funds of Owner with respect thereto shall be
deposited in a bank account or bank accounts (the "Owner Accounts") designated
by Owner, and Operator shall have unrestricted use of such funds as are
reasonably required to be maintained in the Owner Accounts to reimburse Operator
for any costs to be borne by Owner hereunder, to carry on the operation of the
Theatres and to make payments, on a basis substantially the same as that of
Operator in the conduct of its business, of the expenses incurred to carry on
the operation of the Theatre. Appropriate backup relating to payments made to
Operator for reimbursement of costs to be borne by Owner shall be sent to Owner
within thirty (30) days of such payments. Owner acknowledges that the operation
of the Theatre will require sufficient cash availability on an ongoing basis to
enable the business to be properly conducted and that the Owner will maintain
sufficient funds in the Owner Accounts for such purpose.
3.2 DISBURSEMENTS. Operator shall pay from the Owner Accounts, on
behalf of Owner, the costs and expenses of operating the Theatre. Checks or
other documents of withdrawal drawn
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upon the Operating Accounts shall be signed by representatives of Owner or
Operator, as agent for Owner.
3.3 ALLOCATION OF EXPENSES AND OVERHEAD COSTS. Operator shall have the
right to utilize its employees and assets in connection with the operation of
the Theatres as required under this Agreement. When doing so, Operator shall be
reimbursed for any necessary and direct out-of-pocket costs for travel, meals
and lodging while performing services for the Theatre in Greeley, Colorado. Such
costs shall be allocated on a prorata basis if Operator's costs also covered
work at Operator's other theatre(s) in Colorado.
ARTICLE IV
MANAGEMENT FEES AND REMITTANCE TO OPERATOR
Operator shall not receive a management fee for its services hereunder,
but shall be reimbursed for any expenses incurred by it rendering its management
services under this Agreement, including the salaries and benefits, consistent
with operation policies and practices for other theatres owned or operated by
Operator, of all on-site Employees, provided that none of the on-site Employees
provide any services to any of Operator's other theatres. If there are employees
who provide services to other theatres, any expenses incurred by such employees
shall be shared on a prorata basis. However, Operator shall bear and pay all of
its own overhead, including the salaries, benefits and bonuses of its own
officers, supervisory, administrative or accounting personnel.
Nothwithstanding anything to the contrary above, if Metro Colorado
Corporation or any affiliate of Metropolitan Theatres Corporation ("MTC") or
entity owned or controlled by MTC, Xxxxx Xxxxxx or Xxxxx Xxxxxx is no longer a
limited partner of the Owner, Owner agrees to pay Operator an annual management
fee (the "Management Fee") equal to (i) six percent (6%) of the aggregate Gross
Revenues of the Theatre in each year. In such event, on or before the 30th day
of each month, Owner shall pay Operator the portion of the Management Fee earned
during the preceding month based upon the financial statements of Owner prepared
by Operator. Within 30 days after the audited financial statements of Owner for
the preceding fiscal year are delivered to Operator and Owner, the parties shall
calculate the amount of the Management Fee for such fiscal year and any
adjustments between the parties shall be made.
ARTICLE V
INTELLECTUAL PROPERTY
5.1 THEATRE BRANDING. During the term of this Agreement, the Theatre
shall be operated, marketed and branded as a Cinemark Theatre. Owner
acknowledges that Operator and its Affiliates own and use all registered names,
logos, insignias, trademarks, trade dress and other intellectual property
specified on Exhibit "A" and others used in the future (collectively, the
"Cinemark Trademark Rights") in the operation of any Cinemark theatre, including
the Theatre.
5.2 GRANT OF LICENSE. Operator hereby grants Owner during the term of
this Agreement the conditional, limited and non-exclusive right, without
royalties or other consideration, to use the
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Cinemark Trademark Rights in connection with the operation of the Theatre in
accordance with this Agreementand for no other purpose. Owner acknowledges and
agrees that:
(a) The license granted to Owner hereunder shall not restrict
Operator and its Affiliates' use of the Cinemark Trademark Rights in any manner,
including without limitation, competing with the Theatre, Owner or its partners.
(b) Owner shall not, by virtue of the operation of the
Theatre, acquire any right to any of the Cinemark Trademark Rights, and any
goodwill derived from use of the Cinemark Trademark Rights in connection with
the Theatre shall inure to the benefit of Operator and its Affiliates.
(c) The license to use the Cinemark Trademark Rights granted
hereunder shall terminate upon termination of this Agreement, and Operator and
its Affiliates shall be under no obligation to offer or extend such license for
any purpose, upon termination due to sale of the Theatre or otherwise.
(d) Owner shall not contest or dispute Operator and its Affiliates'
ownership of the Cinemark Trademark Rights.
(e) The Theatre shall use only labeling, packaging,
advertising, promotional and other items using the Cinemark Trademark Rights
that have been approved by Operator to ensure that Owner is maintaining
appropriate quality standards regarding the use of the Cinemark Trademark Rights
in a manner consistent with the quality standards of Operator and its
Affiliates.
ARTICLE VI
TERMINATION
This Agreement may be terminated only in accordance with this Article.
6.1 TERMINATION FOR CAUSE BY OWNER. Owner may terminate this Agreement
for Cause in accordance with this Section 6.1. The term "Cause" shall mean that
(i) Operator has breached the terms of this Agreement by committing any act or
acts of bad faith, willful misconduct or gross negligence that have,
individually or in the aggregate, had a materially adverse effect on the
business or operations of Owner, taken as a whole; (ii) Operator has breached
this Agreement or failed to satisfy its obligations hereunder in any material
respect and such breach or default was within the power of the Operator to cure;
(iii) Owner sells, assigns or subleases the entire Theatre to an independent
third party or (iv) one of the partners of Owner buys the entire interest of the
other partner. At any time Owner determines that there is Cause, Owner may give
Operator written notice of Owner's intention to seek termination, specifying in
reasonable detail the Cause (a "Termination Notice"). If Operator fails to cure
such Cause with thirty (30) days of receipt of such Notice, Owner may pursue
arbitration pursuant to Section 10.1, and Owner agrees not to terminate this
Agreement unless and until there is a final arbitral award from the panel of
arbitrators entitling Owner to do so. However, if a longer period is actually
necessary in order to cure the Cause, Owner shall not pursue arbitration in
accordance with Section 10.1 to terminate this Agreement until the
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earlier of (a) the cure of the Cause, in which case the termination notice
shall be ineffective; or (b) Operator discontinues diligently pursuing a cure
for the Cause.
6.2 Termination for Cause by Manager. By Manager, ten (10) days after
Owner's receipt of a written notice from Manager that a monetary default by
Owner has occurred, and thirty (30) days after Owner's receipt of a written
notice from Manager that a non-monetary default by Owner of any material
provision of this Agreement has occurred ("Owner Default"); provided, however,
if any non-monetary default by Owner cannot be cured within the foregoing thirty
(30) day period, it shall not terminate this Agreement and Owner shall have an
additional period to cure such default, if corrective action is instituted by
Owner within the original thirty (30) day period and diligently and, to the
extent practical, continuously pursued until the default is remedied. All claims
of Owner Default shall be stated with reasonable particularity and specify the
Section hereof believed to be breached.
6.3 TERMINATION IN CONNECTION WITH OTHER AGREEMENTS. This Agreement may
be terminated in accordance with the provisions of the Limited Partnership
Agreement of Greeley Partners, L.P.
6.4 EFFECT OF TERMINATION. If this Agreement is terminated for any
reason, any amounts accrued but not yet paid to Operator hereunder shall be
payable by Owner at the time of such termination, and the Operator shall deliver
to the Owner the originals of all books, records, contracts and all other
documents, certificates, permits or instruments relating to the Theatre.
Additionally, upon the expiration or earlier termination of this Agreement,
Operator shall have the right to remove all items using the Cinemark Trademark
Rights, including without limitation, Operator's signage, except those items
using the Cinemark Trademark Rights and the Confidential Information. Operator
shall pay the cost to repair any damage to the Theatre inflicted upon removal of
such items.
ARTICLE VII
SUCCESSORS AND ASSIGNS
7.1 ASSIGNMENT BY OPERATOR. Operator shall have the right to assign its
rights and obligations under this Agreement, without the consent of Owner, to
any wholly-owned subsidiary of Operator, provided such subsidiary is engaged
primarily in the management of first-run motion picture theatres and is managing
a majority of Operator's other theatres. Except as herein above provided,
Operator shall not assign its rights and obligations under this Agreement
without the approval of Owner, which may be withheld in Owner's sole and
absolute discretion. After an assignment of this Agreement after receipt of
approval for any assignment as provided for in the preceding sentence,
Operator's liability hereunder shall terminate for any of its obligations after
the date of such assignment. It is understood and agreed that any approval given
by Owner to any assignment shall not be deemed a waiver of the covenant herein
contained against assignment in any subsequent case.
7.2 ASSIGNMENT BY OWNER. Owner shall not assign its rights and
obligations under this Agreement without the approval of Operator, which may be
withheld in Operator's sole and absolute discretion. Upon an assignment of this
Agreement after receipt of approval for any assignment as
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provided for in thepreceding sentence, Owner's liability hereunder shall
terminate for any of its obligations after the date of such assignment. It is
understood and agreed that any approval given by Operator to any assignment
shall not be deemed a waiver of the covenant herein contained against assignment
in any subsequent case.
7.3 BINDING ON SUCCESSORS. Except as otherwise provided herein, the
terms, provisions, covenants, undertakings, agreements, obligations and
conditions of this Agreement shall be binding upon and shall inure to the
benefit of the successors in interest and the permitted assigns of the parties
hereto with the same effect as if mentioned in each instance where the party
hereto is named or referred to and shall be appurtenant to and run with the
Theatre and shall be binding on any subsequent owner of any interest in the
Theatre.
ARTICLE VIII
GENERAL COVENANTS
8.1 RELEASE OF OPERATOR. Operator, its directors, agents, officers,
employees and Affiliates, as agents of Owner, shall not be liable to Owner or to
any other person or entity for any act or omission committed in the performance
of this Agreement unless such act constitutes bad faith, gross negligence, fraud
or willful and wanton misconduct. Notwithstanding any other provision of this
Agreement, in no event shall Owner make any claims against Operator on account
of any alleged errors of judgment made in good faith in the operation of the
Theatre.
8.2 INDEMNIFICATION OF OPERATOR. Owner hereby agrees to defend,
indemnify and hold harmless Operator, its agents, directors, employees, officers
and Affiliates from and against any claim, liability, loss, damage, cost or
expense (including reasonable attorneys' fees) arising out of or incurred in
connection with (a) Operator's operation of the Theatre unless caused by the bad
faith, gross negligence, material misrepresentation, fraud or willful and wanton
misconduct of Operator, or (b) Owner's breach of this Agreement. It is the
express intention of the parties hereto that the indemnity provided for in this
Section is an indemnity by Owner to indemnify and protect Operator from the
consequences of Operator's ordinary (as opposed to gross) negligence, whether
that negligence is the sole or a concurring cause of any loss, injury, death or
damage. This Section 8.2 shall survive the termination or expiration of this
Agreement.
8.3 INDEMNIFICATION OF OWNER. Operator hereby agrees to defend,
indemnify and hold harmless Owner, its agents, directors, employees, officers
and Affiliates from and against any claim, liability, loss, damage, cost or
expense (including reasonable attorneys' fees) arising out of or incurred in
connection with (a) Operator's operation of the Theatre in a grossly negligent
manner, or arising from Operator's bad faith, material misrepresentation, or
fraudulent or willful and wanton misconduct, or (b) Operator's breach of this
Agreement. This Section 8.3 shall survive the termination or expiration of this
Agreement.
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ARTICLE IX
NOTICES
All notices to be given hereunder shall be given in writing and shall
be deemed given (i) when delivered by messenger with receipt obtained, (ii) when
received if sent by overnight delivery service with receipt retained, (iii) when
sent by telecopy if notice is also sent the same day by overnight delivery
service, or (iv) by the United States mails (and, if mailed, shall be deemed
received five (5) business days after the postmarked date thereof) with postage
prepaid, registered or certified; and delivered or addressed to:
If to Owner: Greeley Partners, L.P.
c/o Cinemark USA, Inc.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: President
With copy to: Metro Colorado Corporation
c/o Metropolitan Theatres Corporation
0000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
If to Operator: Cinemark USA, Inc.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: President
With copy to: Cinemark USA, Inc.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attn: Vice President-General Counsel
Either party hereto may change the address for notices hereunder by such party
giving notice of such change to the other party hereto in the manner hereinabove
provided.
ARTICLE X
MISCELLANEOUS
10.1 ARBITRATION. Any claim, dispute or other matter in question
between the parties hereto arising out of or relating to this Agreement, or the
breach thereof, shall be decided by arbitration in accordance with the rules of
the American Arbitration Association in effect on the date hereof before three
(3) arbitrators; one designated by each party and the third in accordance with
the Rules of the American Arbitration Association. Any such arbitration shall be
conducted in Dallas, Texas unless the parties mutually agree to another
location. The arbitrators shall be qualified by education, training or
experience as may be appropriate according to the nature of the claim, dispute
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or other matter in question. The foregoing agreement to arbitrate and any other
agreement to arbitrate shall be specifically enforceable under the prevailing
arbitration law. The award rendered by the arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof. To the extent permitted by law, by agreeing to
engage in the arbitration provided for in this Section 10.1, the parties waive
their right to appeal any decision made by the arbitrators. The demand for
arbitration shall be made within a reasonable time after the claim, dispute or
other matter in question has arisen; and in no event shall it be made after the
date when institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the applicable statute of
limitations. All costs and expenses (including reasonable attorneys' fees and
costs) in connection with any such arbitration shall be borne in the manner
which the arbitrators making the determination shall direct. Notwithstanding the
provisions of this Section, either party may seek appropriate injunctive relief
for any threatened breach.
10.2 SPECIFIC PERFORMANCE. The parties declare that it is impossible to
measure in money the damages that will accrue to a party hereto by reason of a
breach of this Agreement by a party hereto or a failure of a party hereto to
otherwise perform any of the obligations under this Agreement. Therefore, if any
party shall institute any action or proceeding to enforce the provisions hereof,
any person against whom any such action or proceeding is brought hereby waives
the claim or defense therein that such party has or had an adequate remedy at
law, and such person shall not urge in any such action or proceeding the claim
or defense that such remedy at law exists. Further, the parties hereto expressly
agree that any non-breaching party shall have the right to injunctive relief for
breach of any of the terms hereof, plus damages for such breach to the maximum
extent permitted by law.
10.3 NO WAIVER. No failure by Operator or Owner to insist upon the
strict performance of any covenant, agreement, terms or conditions of this
Agreement, or to exercise any right or remedy consequent upon a breach thereof,
shall constitute a waiver of any such breach of such covenant, agreement, term
or condition. No waiver of any breach shall affect or alter this Agreement, but
each and every covenant, agreement, term and condition of this Agreement shall
continue in full force and effect with respect to any other then existing or
subsequent breach thereof.
10.4 FURTHER ASSURANCES. Each party hereto shall further execute and
deliver all such other appropriate supplemental agreements and other instruments
and take such other action as may be necessary to make this Agreement fully and
legally effective, binding and enforceable as between the parties hereto and as
against third parties, or as the other party may reasonably request.
10.5 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
10.6 PARTIAL INVALIDITY. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement and the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, as the case may be, shall not be affected
thereby, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
12
10.7 ENTIRE AGREEMENT. This instrument, together with the exhibits
hereto, shall constitute the entire agreement between the parties with respect
to the management of the Theatre.
10.8 AMENDMENTS. Neither this Agreement nor any term or provision
hereof may be changed, waived or discharged or terminated orally, except by an
instrument in writing signed by the party against which the enforcement of the
change, waiver, discharge or termination is sought.
10.9 CAPTIONS. The captions to the sections of this Agreement are for
the convenience of reference only and in no way define, limit or describe the
scope or intent of this Agreement or any party thereof, nor in any other way
affect this Agreement or any part thereof.
10.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which, when taken together, shall constitute one and the
same Agreement.
10.11 CONFIDENTIAL INFORMATION. In performing its duties under this
Agreement, Operator may use operating procedures and practices for the Theatre
that are used in its other theatres similar to the Theatre. Owner and Operator
recognize that in the ordinary course of performing this Agreement, it will be
necessary, and each may exchange information on pricing, marketing, advertising,
booking and employment practices with respect to the operation of the Theatre.
Owner and Operator acknowledge that all of Operator's procedures and practices
in the Theatre and in other theatres that Operator may own or operate, including
without limitation, those procedures relating to pricing, marketing,
advertising, booking and employment practices are proprietary and confidential
(collectively, "Confidential Information"), are proprietary and confidential.
Accordingly, neither Owner nor its representatives shall be entitled to see or
inspect the Confidential Information, and to the extent such Confidential
Information is provided by Operator, such information shall remain Operator's
property and shall not be disclosed by Owner to any third party.
10.12 AUTHORITY, BINDING AGREEMENT. Each party to this Agreement
represents and warrants that (i) it is a corporation (or limited liability
company or limited partnership, as applicable) duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization, and in the case of the Operator, it is a qualified foreign
corporation under the laws of Texas, (ii) it has the requisite power to execute,
deliver and perform this Agreement, (iii) the execution, delivery and
performance by it of this Agreement has been duly and validly authorized by all
necessary corporate actions, and (iv) this Agreement constitutes the legal,
valid and binding obligations of such party, enforceable against such party in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditor's
rights generally.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION
THAT IS BINDING ON THE PARTIES
CNMK TEXAS PROPERTIES, LTD.
a Texas limited partnership
By: SUNNYMEAD CINEMA CORP.,
its General Partner
By: /s/ Xxxxxxx Xxxxxxxx
----------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President-
General Counsel
GREELEY, LTD.
A Texas limited partnership
By: GREELEY HOLDINGS, INC.,
Its general partner
By: /s/ Xxxx X. Stock
---------------------
Name: Xxxx X. Stock
Title: President
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