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Exhibit 10.25
AGREEMENT
This Agreement is entered into by and between Cruise Management
International, Inc., a Florida corporation ("CMI"), and Park West at Sea, Inc.,
a Delaware corporation ("PWS").
RECITALS
1. CMI has extremely valuable relationships with cruise ship owners and
operators and has contracts to conduct art auctions on ships. CMI also has
expertise in advertising and marketing activities in connection with cruise
ships and has through affiliate companies, expertise in port lecturing.
2. PWS has expertise in obtaining and selling fine art and fine art
products through art auctions and in operating art galleries.
3. The parties have agreed to work together for the purpose of
conducting and marketing art auctions on cruise ship lines including but not
limited to the following: Royal Caribbean Cruises Ltd., Crystal Cruises,
Celebrity Cruises and Costa Cruises.
NOW, THEREFORE, the parties agree as follows:
1. Scope and Duration
A. The parties agree, during the term of the Agreement, to work
together in selling fine art and fine art products on cruise ship by various
methods of selling fine art and fine art products including but not limited to
conducting art auctions or selling fine art and fine art products at retail on
cruise ships and selling fine art and fine art products to the cruise lines for
decoration and furnishing purposes. The joint Art Sales Program, which the
parties shall conduct aboard cruise ships, pursuant to this Agreement, is
referred to herein as the "Art Sales Program."
B. This Agreement encompasses all cruise ships operating anywhere in
the world. The parties acknowledge that they currently are conducting the Art
Sales Program on ten ships. The parties shall jointly consider the advisability
of attempting to expand the Art Sales Program to additional ships and cruise
lines.
C. This Agreement shall have an initial term of two (2) years;
beginning April 11, 1996, and shall thereafter automatically renew for
successive two (2) year terms unless PWS sends notice of termination at least 90
days before the renewal date. If PWS terminates the Agreement by sending such
written notice of termination, then PWS shall be prohibited for two years,
directly or indirectly in any manner whatsoever from engaging in the business of
conducting Art Sales Programs on any cruise ship or ships, anywhere in the
world. The parties specifically agree that this covenant shall be enforceable by
injunction in any court of competent jurisdiction, in addition to all other
legal remedies.
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D. In the event any cruise ship line elects to terminate or not renew
the Art Sales Program on any or all of its ships, for any reason including the
fault of either party to this Agreement, then the parties shall jointly cease
conducting the Art Sales Program on such ship or ships. Thereafter, during the
term of this Agreement, the parties shall not conduct the Art Sales Program on
such ship or ships unless they can do so jointly in accordance with the terms
and conditions of this Agreement.
E. Provided that PWS acts in good faith and for reasons which it
reasonably believes are legitimate business reasons, then PWS shall have the
right to require that the parties either not put an Art Sales Program on a
cruise ship or terminate the Art Sales Program as to any cruise ship on thirty
(30) days written notice or on such notice as required by specific written
agreement CMI may have with that cruise ship. In that event the parties shall
not conduct the Art Sales Program on such ship, and neither party shall have the
right to conduct art auctions on that ship in the absence of the other. However,
if CMI because of contractual obligations or because of necessities created by
pressures from a specific cruiseline wishes to conduct an Art Sales Program on
board a ship and PWS chooses not to operate the Art Sales Program on that
specific ship, then CMI may have another art auction company operate the Art
Sales Program on that ship only after CMI has sent written notice to PWS
confirming that PWS has verbally informed CMI that PWS chooses not to operate
the Art Sales Program on that ship. PWS shall then have fourteen days to
formally accept or reject the Art Sales Program on that ship. Any agreement CMI
makes with such other art auction company shall be expressly terminable by CMI
upon notice of 140 days or less and CMI must immediately and unconditionally
terminate such agreement if PWS provides CMI with written notice at any time
that it wishes to operate the Art Sales Program on that ship. PWS, by sending
such notice to CMI, shall have the absolute right and obligation to take over
the Art Sales Program on such ship under the terms and conditions set forth in
this Agreement. PWS shall have the right to have CMI immediately and
unconditionally terminate another art auction company's Art Sales Program on a
specific ship, as set forth above in this paragraph, not more than once per ship
during each two-year term of this agreement.
2. Responsibilities
The parties' responsibilities with respect to the Art Sales Program
shall be as follows:
A. PWS shall conduct and manage the Art Sales Program on board the
ships by doing the following:
1) Supplying the art and the auctioneer and being responsible
for the art and the auctioneer.
2) Shipping the art to customers.
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3) Providing a customer service department to deal with
customer complaints.
4) Generally cooperating with CMI to provide active support
for the Art Sales Program.
5) Participating with CMI in the marketing and advertising
activities to promote the Art Sales Program on board the ships.
6) Provided that CMI uses its best efforts to negotiate the
most favorable terms for both PWS and CMI for the Art Sales Program aboard
ships, CMI shall exclusively handle negotiations with the cruise lines and shall
bring in PWS for assistance in negotiations at its discretion. CMI, however,
shall keep PWS fully advised and shall consult with PWS throughout negotiations
so that PWS through CMI is a party to all negotiations with cruise lines for Art
Sales Programs.
B. CMI shall solicit Art Sales Programs from various cruise lines and
will cooperate, notwithstanding that section 2.A.6 above shall be in force, with
PWS in such solicitations. CMI shall use its best efforts to actively market and
promote the Art Sales Programs on board the ships as follows:
1) Through port lecturers when its affiliate companies have
the port lecturing agreements.
2) By the creation of videos and their placement on TV
channels on board the ships.
3) By the creation and placement of magazine advertisements in
magazines it produces for the ships.
4) By working with PWS art auctioneers on board the ships to
arrange proper scheduling, storage, and other problem-solving for marketing and
operating the Art Sales Program, and by being responsible for the distribution
of brochures and various other marketing material which shall be provided by
PWS.
5) CMI shall attempt to negotiate for the most favorable
arrangements for PWS and CMI for the Art Sales Program on board ships.
6) CMI shall provide personnel to deal with sections 1 though
5 above and to deal with problems that arise in the Art Sales Program such as
customer problems, shipping framed art to customers and solving problems with
the cruise lines. However, the cost for shipping framed art to customers is the
responsibility of PWS, with the exception that CMI shall pay its own employees
who may be involved in the shipping process.
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7) CMI shall provide active support for the Art Sales Program.
8) CMI shall actively recruit art auctioneer candidates for
PWS.
C. Whenever possible, CMI shall make available to PWS discounted
airfares at special rates available to CMI through its relationship in the
travel industry, for all air travel by PWS' employees or agents related to this
Agreement. The cost for this travel shall be invoiced by CMI weekly and paid
weekly by PWS.
D. PWS shall maintain a comprehensive general liability insurance
policy covering property damage and personal injury in the aggregate amount of
$2,000,000.00. Such insurance policy shall name CMI and the cruise lines as
additional insureds. PWS shall provide CMI with copies of all such insurance
policies and declaration sheets and all renewals thereof.
E. PWS and CMI each comply with written agreements CMI may have with
particular cruise lines for the Art Sales Program and with reasonable
requirements which may be imposed by the cruise lines relative to the Art Sales
Program. However, PWS shall not be responsible for compliance for such written
agreements until it receives copies of the agreements from CMI.
F. During the term of this Agreement, PWS hereby grants to CMI a
non-exclusive, royalty-free right and license to use the "Park West At Sea" name
and xxxx solely in connection with the preparation of videos, advertisements and
scripted lectures to promote the Art Sales Program and for no other purpose or
use. All such videos, advertisements, lectures, etc., shall be subject to the
joint editorial control of the parties and the approval of the cruise lines.
Upon termination of this Agreement, the license shall terminate and CMI shall
cease using the "Park West At Sea" name and xxxx, except in the course and scope
of winding up any remaining business obligations hereunder.
3. Allocation and Payment of Revenues
A. The term "Gross Revenue" shall mean the auction hammer bid price
plus buyer's premium obtained by PWS for each artwork sold to a passenger on
board a cruise ship covered by this Agreement, even though delivery may occur
off the cruise ship or at a date after termination of the cruise, including the
price of the frame, but excluding any shipping, handling, insurance, appraisals
or any other applicable charges such as duty, taxes, freight, or storage which
may be charged to a customer purchasing art on a ship. The term "Net Revenue"
shall mean the "Gross Revenue" less the "Cruise Line Fee" as defined below. The
CMI Fee shall be [*] of the Net Revenue, hereinafter referred to as the "CMI
Fee."
B. For each refund paid by PWS with respect to a sale for which CMI was
paid a fee, CMI shall in turn refund to PWS [*] of the Net Revenue for the
original sale and CMI shall
__________________
* This confidential portion has been omitted and filed separately with the
Commission.
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endeavor to collect the Cruise Line Fee with respect to such refund from the
cruise line and remit it to PWS.
C. The parties acknowledge that the "Cruise Line Fee" is presently [*]
of the Gross Revenue.
4. Collection and Disbursement of Revenue
A. CMI shall collect revenues from the cruise lines (Gross Revenue plus
shipping, handling, insurance, appraisals or any other applicable charges such
as duty, taxes, freight, or storage which may be charged to a customer
purchasing art on a ship less the Cruise Line Fee). PWS shall receive from CMI
the net revenue (plus shipping, handling, insurance, appraisals or any other
applicable charges such as duty, taxes, freight, or storage which may be charged
to a customer purchasing art on a ship), less the CMI fee, and that amount is
hereinafter referred to as the "PWS Share." CMI shall disburse to PWS the PWS
Share as soon as reasonably practicable after CMI's receipt of the funds and, in
any event, not more than three business days after CMI's receipt of the funds.
CMI shall have no right whatever to withhold any funds belonging to PWS as the
PWS Share, for any reason, including but not limited to any set-offs or
reductions based on any claims which CMI may have against PWS. It is the express
intent of the parties that the PWS Share which CMI is obliged to timely remit
shall not be subject to claims of CMI and the PWS Share shall continue to be
paid out as set forth above notwithstanding any dispute of any type or nature
which may arise between PWS and CMI. CMI shall not be deemed to have waived any
claims against PWS by CMI's fulfillment of its payment obligations hereunder,
nor shall PWS be deemed to have waived any claims against CMI by its acceptance
and deposit of such monies or of its acceptance and deposit of a lesser amount
than PWS believes is owed. In the event CMI withholds funds belonging to PWS,
and CMI has been paid by the particular cruise lines for the cruises for which
funds are withheld, PWS, in addition to any other remedies allowed by law, shall
be entitled to recover interest at 8% per annum and its reasonable attorney fees
and legal expenses incurred in collecting the PWS Share. In addition, in the
event PWS has not shipped art within sixty-six days after the ending date of a
particular cruise, then CMI will have the right to withhold payment to PWS for
the purposes of making refunds for that art to the purchaser. In the event PWS
does not ship art within sixty-six days after the ending date of a particular
cruise and PWS has been paid by CMI for the particular cruises for which art has
not been shipped then CMI, in addition to any other remedies allowed by law,
shall be entitled to seek appropriate relief from PWS, withhold such amounts
from PWS future payments and recover interest at 8% per annum and any payments
already received by PWS for such sales to which PWS was not entitled by virtue
of such non-delivery and its reasonable attorney fees and legal expenses. In the
event there is litigation on either side, actual attorney fees and legal
expenses should be recovered only by the prevailing party in the litigation.
B. CMI's obligations to timely remit the PWS Share (after CMI's receipt
of the funds from the cruise lines), free of any claims or setoffs, is
personally guaranteed by Xxxxxx Xxxxxx. PWS's obligation to ship artwork for
which it has been paid is personally guaranteed by Xxxxxx
__________________
* This confidential portion has been omitted and filed separately with the
Commission.
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Xxxxxxxxx and Park West Galleries, Inc. If CMI does not receive the funds from
the cruise lines through no fault or action by Xxxxxx Xxxxxx, CMI or PWS, then
there is no personal obligation by Xxxxxx Xxxxxx to remit said funds to PWS.
C. If a cruise line fails to remit payment to CMI, due to financial
problems or otherwise, and demands for payment have been made and such cruise
line has not responded to those demands with a reasonable schedule of dates of
payments, then CMI, in conjunction with PWS, shall take all action permitted by
law to collect amounts due and owing. CMI shall immediately pass along to PWS
any information CMI may receive concerning financial problems or possible
bankruptcy by a cruise line.
5. Miscellaneous
A. Assignment. Neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof may be assigned or delegated
by either party without the prior written consent of the other party.
B. Amendments. This Agreement may not be amended unless evidenced by a
writing signed by the party to be charged.
C. Construction. The parties acknowledge that this Agreement was the
result of arms-length negotiations by parties represented by independent legal
counsel. This Agreement shall be interpreted without regard to any presumption
or rule requiring construction against the party causing this Agreement to be
drafted.
D. WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT ACKNOWLEDGE THAT
THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
EACH PARTY, AFTER CONSULTING WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN
THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO THIS AGREEMENT.
E. Counterparts. This Agreement may be executed in one or more
counterparts, including facsimile counterparts, each of which shall be deemed as
original, but all of which together shall constitute one and the same agreement.
F. Inspection of books and records. Each party shall be entitled to
inspect the books and records of the other solely as they pertain to the Art
Sales Program and the services rendered under this Agreement, at any reasonable
time or times, upon three (3) business day's written notice, in order to verify
the amounts due to each party, respectively.
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G. In the event of any litigation arising hereunder, the prevailing
party shall be entitled to recover from the losing party all reasonable
attorney's fees and costs incurred in such litigation.
H. (i) This paragraph 5(H) deals with the use of cruise ship passenger
names, and lists and records of such names. For purposes of this paragraph 5(H),
except 5(H) (vii), references to cruise ship passenger names (and lists and
records of such names) are only to persons who have purchased art from PWS
during a cruise.
(ii) The parties agree that in connection with PWS ability to
use the cruise ship passenger names, that CMI will not be obliged to operate in
any manner which may damage its valuable relationships with the cruise lines or
in contravention of the written agreements with the cruise lines, provided,
however, that CMI will not do anything to cause or encourage the cruise lines
from disallowing PWS to use the cruise ship passenger names or to cause or
encourage the cruise lines to limit or restrict PWS use of the names in any way.
(iii) PWS and CMI shall have the right to utilize cruise ship
passenger names for customer service and other purposes (i.e., sales of
additional art) only as allowed by the contracts with the cruise lines. Neither
CMI or PWS or their affiliates shall be allowed to sell or disclose the cruise
ship passenger names (or records or lists of such names) to any third party.
(iv) Even if allowed by the cruise lines, CMI and its
affiliates agree that they shall not sell art in any manner to passengers
identified on the cruise ship passenger name records except in conjunction with
Park West Gallery. However, PWS or its affiliates may, without the involvement
of CMI, sell art in their normal course of business to cruise passengers on the
cruise ship passenger records, only provided that it is in keeping with the
contracts with the cruiselines. It is the intent of the parties that PWS and its
affiliates shall have the right to sell art to cruise ship passengers in the
normal course of business (provided this is allowed by the cruise lines),
without the involvement of CMI or its affiliates, and that CMI shall take no
action (and shall not cause or encourage the cruise line to take any action) to
interfere with such activities by PWS.
(v) Notwithstanding paragraph (H)(iv) above, PWS and their
affiliates agree not to work with any firm other than CMI or its affiliates in
any joint telemarketing ventures which PWS or its affiliates may enter into with
third parties to sell art to passengers on the cruise ship passenger records.
(vi) Nothing in this paragraph 5(H) shall prevent PWS or its
affiliates in any way from utilizing names of customers or prospective customers
obtained by PWS or its affiliates from sources other than cruise ship auctions.
(vii) The above paragraph deals with passenger names (and
records) for passengers who have purchased art from PWS during a cruise. For all
other passengers ("non-
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buying passengers"), the following provisions apply: Neither CMI nor PWS will
sell or disclose lists of names of "non-buying passengers" to any third parties.
Further, neither CMI nor PWS shall attempt to sell art to non-buying passengers
unless they do so jointly under mutually agreeable terms and conditions for such
art auctions.
I. In the event a cruise line elects to sponsor or promote an art
auction on land and to invite cruise ship passengers, then PWS and CMI
exclusively agree to work together with the cruise line under mutually agreeable
terms and conditions for such art auctions.
J. Indemnification. Both CMI and PWS shall indemnify the cruise lines
as may be required by virtue of written agreements between CMI and the cruise
lines. This shall include responsibility for employees to the extent reasonably
required by the cruise lines. PWS shall indemnify CMI against all claims made by
employees or independent contractors of PWS, except to the extent that CMI is at
fault. CMI shall indemnify PWS against all claims made by employees or
independent contractors of CMI, except to the extent that PWS is at fault.
K. Confidentiality and Non-Compete: Neither party shall solicit the
other party's employees or independent contractors without the other party's
written consent and both parties shall instruct their employees or independent
contractors to not solicit the employees or independent contractors of the other
party.
L. Bankruptcy: If PWS files chapter 7 or chapter 11 bankruptcy, then
CMI may at its option terminate this agreement and work with any other art
auction company to conduct Art Sales Programs on cruise ships. If CMI files
chapter 7 or chapter 11 bankruptcy, then PWS may at its option terminate this
agreement and will not be subject to any non-compete and may work directly with
cruise lines or through any other parties it deems fit to conduct Art Sales
Programs on cruise ships. If PWS files chapter 7 or chapter 11 bankruptcy, PWS
is still subject to the non-compete provision of this agreement and as to the
joinder.
M. Tabulations: PWS will provide CMI with detailed per-cruise
tabulations of sales in order for CMI to verify cruise line remittances for
sales. Detailed per cruise tabulations of sales should have the same information
as the individual invoices for customer service purposes.
N. PWS shall use good faith efforts to cause its auctioneers to
consummate all art sales at sea, in all situations where possible, and not delay
such sales so that they are consummated on land.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates set below.
CRUISE MANAGEMENT INTERNATIONAL, INC.
Dated: By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: President
PARK WEST AT SEA, INC.
Dated: April 11, 1996 By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: President
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JOINDER AS TO SECTIONS 1 AND 5(H)
It is the intent of the parties that during the term of this Agreement, except
as otherwise provided herein, neither shall circumvent the other, directly or
indirectly, by conducting the Art Sales Program on cruise ships without the
other. Accordingly, to the extent Section 1 of this Agreement (titled Scope and
Duration) imposes obligations on PWS and CMI, such obligations are also imposed
on all related or affiliated persons and entities including but not limited to
the following: as to CMI; Onboard Media, Inc., Xxxxxx Xxxxxx, Xxxxx Xxxxxxx and
Xxxxxx Xxxxxx, and any companies or entities owned or controlled by all or any
of them. And as to PWS; Park West Galleries, Inc., Xxxxxx Xxxxxxxxx, London
Contemporary Art, (hereinafter "LCA"), and the principals of LCA, but in the
case of LCA and the principals of LCA only to the extent that Xxxxxx Xxxxxxxxx
or PWS or parties controlled by them have control over the principals of LCA,
and any companies or entities owned or controlled by all or any of them. To
further that intent, and for other good and valuable consideration, the
undersigned have executed this Agreement to acknowledge their joinder as to the
obligations of Section 1. This Joinder also applies to section 5(H).
Dated: April 11, 1996 /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Dated: 6/18/96 /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Dated: 4/18/96 /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Dated: 4/18/96 /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
PARK WEST GALLERIES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Dated: April 11, 1996 Its: President
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ON-BOARD MEDIA, INC.
By: /s/ Xxxxxx Xxxxxx
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Dated: 4/18/96 Its: President
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JOINDER AS TO SECTION 4(B)
To induce each party to execute and perform this Agreement, and for
other good and valuable consideration, the undersigned hereby agree to comply
with and be subject to section 4(B):
Dated: April 11, 1996 /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Dated: 4/18/96 /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
PARK WEST GALLERIES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Dated: April 11, 1996 Its: President
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