FIRST AMENDMENT TO REVOCABLE LICENSE AGREEMENT
Exhibit 10.3
FIRST
AMENDMENT
TO
THIS
FIRST AMENDMENT to Revocable License Agreement (this “First Amendment”) is
effective as of November
10, 2005 (“Effective Date”), by and
between DISNEYLAND RESORT, a division of Xxxx Disney World Co, (“Disney”), and CRYSTAL MAGIC,
INC. (“Crystal”).
RECITALS
WHEREAS,
Disney and Crystal have previously entered into that certain Revocable License
Agreement, effective as of November
18, 2002,
relating to the granting of a license by Disney to Crystal for Crystal to use
certain retail space within an area of Disneyland® park known as
Star Trader to operate a retail shop on the terms and conditions provided
therein (collectively the “Agreement”), and
WHEREAS,
Disney and Crystal desire to amend the Agreement as provided in this First
Amendment.
NOW,
THEREFORE, in consideration of the mutual agreements contained herein and in the
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Disney and Crystal hereby agree as
follows:
1. Definition of Terms.
All capitalized terms used in this First Amendment without being defined herein
shall have the meanings given to them in the Agreement.
2. Change of Location.
Crystal’s former Location at Star Trader has been eliminated, and Crystal’s new
Location shall be at the Castle Shop (“New Location”).
3. Permitted Use: Operation of
Locations, The 5th
sentence in subsection 3 (a) is hereby deleted: “Crystal shall have full
responsibility and obligation for the operation of the Locations and for all
direct costs (calculated pursuant to Section 5(f) hereinbelow) incurred by
Disney for Crystal’s operation including, but not limited to, the provision of
custodial service, merchandise bags and other guest service expense items” and
replaced with the following:
“Crystal
shall have full responsibility and obligation for the operation of the Locations
and for all direct costs (calculated pursuant to Section 5(f) hereinbelow)
incurred by Disney for Crystal’s operation including, but not limited to, the
provision of custodial service, merchandise bags, register supplies, credit card
fees and other guest service expense items.”
4. Fee for Services/Other
Payments. Section 5 shall be amended by deleting subsections (b) through
(g) and replacing them with the following:
“(b) For
the New Location, Disney shall be entitled to that sum (“Disney’s Share of Gross
Revenues” (i) equivalent to sixty percent (60%) of all Gross Revenues
from retail sales from the New Location less applicable sales, use, excise or
other taxes. Crystal shall be entitled to the remainder of all Gross Revenues
from retail sales from the New Location during the Term (such remainder being
“Crystal’s Share of Gross
Revenues”), The term “Gross Revenues” is defined as all revenues received
by, or paid to. Crystal or to any other person, corporation or other entity for
the use, account or benefit of Crystal
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from
whatever source (including, without limitation, (x) the actual sales price,
whether wholly or partially for cash, on credit, or otherwise, for all goods,
wares, merchandise and services of any kind, and (y) all other receipts) arising
upon, out of or in connection with all business conducted on, in and from the
New Location, whether for wholesale, retail, cash, credit, trade-ins or
otherwise (including, but not limited to, sales made by mail or telephone
although said sales may be filled elsewhere), or other electronic service or
interactive media (e.g., the Internet); all deposits not refunded to purchasers,
all orders taken on, in and from the New Location although said orders may be
filled elsewhere. Each sale on credit (including, without limitation, sales paid
for with Disney Dollars) shall be treated as a sale for the full price in cash
during the month in which such sale is initially made, without reserve or
deduction for inability or failure to collect, and irrespective of the time when
Crystal actually receives payment (whether full or partial) from its customer or
any applicable credit or credit card agency. Gross Revenues of any sublessee,
concessionaire or licensee shall be treated as if made by Crystal (provided, however, nothing
contained herein shall be deemed Disney’s consent to any sublessee,
concessionaire or licensee). The following are excluded from Gross Revenues: (1)
the proceeds from the sale of any items not sold to the public in the ordinary
course of business of the New Location; (2) the amount of any retail sales or
excise taxes; and (3) the amount of any shipping charges for Inventory shipped
to guests. Unless expressly set forth in this Agreement, any policies or
practices established by Crystal from time to time with respect to providing
Inventory at discounted prices or without charge shall require the prior
approval of Disney, which approval may be granted or withheld in Disney’s sole
and absolute discretion. If Crystal fails to receive prior approval from Disney,
unless expressly set forth in this Agreement, Crystal’s normal charge for the
Inventory so discounted or given without charge shall be used in the computation
of Gross Revenues.
(c) For
the New Location, Crystal’s Share of Gross Revenues shall be paid to Crystal on
a monthly basis, with deductions taken for costs and expenses incurred by Disney
for Crystal operation as outlined in Section 3(a), in the manner set forth below
unless otherwise requested by Disney.
(d) For
the New Location, Crystal shall, on a daily basis, turn in to Disneyland Resort
Currency Services, or its designee, all monies collected from sales of the
Inventory, and Crystal shall reconcile such monies with appropriate point of
sale documentation (i.e., register receipts).
(i) Disney’s
representatives shall collect and compute by totaling register receipts, on a
daily basis, all revenues from Inventory sales. Disney shall be responsible for
the security of all currency after its collection by Disney. Disney shall
provide to Crystal all cash control services necessary to support its operation
at the New Location which services shall include supporting all cash, credit
card and personal check functions.
(ii) Within
twenty (20) business days of the end of each fiscal month, Disney shall furnish
Crystal a monthly statement in writing, for the Term of this Agreement, showing
the aggregate amount of currency collected from the sale of the Inventory in
connection with the New Location during the preceding calendar month from all
sources, Disney’s Share of Gross Revenues, Crystal’s Share of Gross Revenues and
the total number of sales of Inventory in connection with the New Location from
all sources. Each such statement shall include a payment to Crystal of Crystal’s
Share of Gross Revenues payable for each reporting month.
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(e) Disney
reserves the exclusive right, throughout the Term hereof, to have sole control
over the Now Location and Crystal shall have no rights or interest therein,
which control may include, but is not limited to; admission to Disneyland® park and to the
various facilities therein and to charge such rates and prices for the services
and merchandise of the New Location as it may determine from time to time in its
sole and absolute discretion, all of which shall be for Disney’s account, the
establishment of the hours of operation of the New Location which need not be
the same as the hours of operation of Disneyland® park or the
various facilities therein, the establishment of the schedule for maintenance,
repair and rehabilitation of the New Location, the promulgation of strict
standards and rules for the appearance, sanitation, cleanliness and maintenance
of the New Location and for the conduce courteousness and appearance of persons
employed therein, and the promulgation of Strict standards and rules for the
preservation of good order with respect to the New Location and for the health,
comfort and convenience of the patrons and guests thereof. At all times, Crystal
shall have no rights or interest, implied or otherwise, in any revenues realized
from the New Location (other than from the sale of the Inventory), the sale of
food, beverage, merchandise or any other items offered or the various facilities
therein.
(f) For
all Locations, any services of Disney’s personnel which are subject to
reimbursement shall be invoiced at Disney’s direct costs for such services (i.e.
payroll costs, including, without limitation, payroll taxes and fringe benefit
costs) (at Disney’s composite rate, as computed annually) plus overhead items
directly related to those services, such as supervision, small tools, owned
equipment, training, etc, (expressed as a percentage of direct labor costs and
recomputed annually) plus twenty percent (20%) of all direct labor costs to
cover administrative overhead. Materials shall be invoiced at net cost to
Disney, plus three percent (3%) thereof to cover overhead. Any other services
performed on behalf of Disney by any person not a party to this Agreement shall
be billed at net cost to Disney, plus five percent (5%) to cover
overhead.
(g) Crystal
shall accept all major credit cards issued to the general public in payment for
Inventory sold at the New Location.
(h) Crystal
shall reduce by twenty percent (20%), the sales price of Inventory sold to
employees of The Xxxx Disney Company from all Locations, and Disney shall reduce
by the following percentages the sales price of merchandise and/or services in
any Disney-owned and operated retail shop sold to Crystal’s employees other than
by employee credit card if Disney does so for its own employees with respect to
the same merchandise and/or services and in the same retain shop. Said
percentages are currently as follows:
(i) all
employees hired prior to January 1, 1998 date shall receive a thirty-five
percent (35%) reduction; and
(ii) all
other employees not otherwise described above shall receive a twenty percent
(20%) reduction; provided, however, that if any of Crystal’s employees are
already receiving a thirty-five percent (35%) reduction as discussed in
subsection (i) above, such employee shall continue to receive a thirty-five
percent (35%) reduction.”
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5. Sales Tax. Section 7
is hereby amended by adding the following;
“As to
the New Location, amounts retained by Disney or paid to Disney under this
Agreement may be subject to tax. Accordingly, the applicable sales, use, excise
or other taxes on such amounts shall be deducted from Crystal’s Share of Gross
Revenues for the New Location and retained by Disney or paid to Disney by
Crystal as appropriate. Crystal shall be responsible for and shall pay any and
all personal property taxes and/or assessments on Crystal’s Property, the
Inventory, and the Equipment in connection with the New Location.”
6. Insurance:
Indemnification. The last sentence of this Section 11(b) is hereby
deleted and replaced with the following:
“The
provisions of this Section 11(b) shall survive, indefinitely, the expiration or
earlier termination of this Agreement, shall not be limited by the amount of
insurance required to be maintained hereunder or maintained by Crystal, and
shall extend to claims occurring after the expiration or earlier termination of
this Agreement as well as to claims occurring “while this Agreement is in
force.”
7. Exterior Sign at New
Location. This new section shall he added to the Agreement as
follows:
“EXTERIOR SIGN AT NEW
LOCATION. Disney agrees to design and fabricate a new exterior sign for
the New Location, which design and fabrication shall be in Disney’s sole
discretion, and Crystal agrees to pay Disney for such design and fabrication,
such cost not to exceed Fifteen Thousand Dollars ($15,000.00),”
8. No Other Changes.
Except as expressly provided by this First Amendment, the Agreement remains in
full force and effect and this First Amendment shall not be construed to alter
or amend any of the other terms or conditions set forth in the Agreement,
Furthermore, in the event of any conflict between the provisions of this First
Amendment and any of the provisions of the Agreement, the provisions contained
in this First Amendment shall control.
IN
WITNESS WHEREOF, the parties hereto have executed this First Amendment effective
on the Effective Date first above written.
DISNEYLAND
RESORT, A
DIVISION CRYSTAL
MAGIC, INC.
OF XXXX
DISNEY WORLD CO.
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxxxx Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Vice President Title: President
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