Viashow, Inc.
0000 X. Xxxxxxxx Xx., Xxxxx 00
Xxx Xxxxx, XX 00000
September 18, 2005
The UJAC 2005 Irrevocable Trust The MDW and GRW 2000 Irrevocable Trust Xxxx
Xxxxxx Fuego Entertainment, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Re: Royalty Agreement dated as of March 3, 2005 ("the Agreement")
Dear Sirs and Madams:
This will confirm that we have agreed to amend the above-referenced
Agreement, as follows:
1. The term "Five City Tour" is hereby amended to mean the live performance
of the Show (as defined in the Agreement) on or around the following dates in
the following cities: (1) Miami, Florida on May 10, 2005, May 27, 2005, and may
28 2005; and (2) three additional performances of the Show on such dates and
locations to be reasonably designated by Viashow, Inc., presently contemplated
to be scheduled for New York, New Jersey, Chicago, Dallas, Houston and/or
California in 2006.
2. Right of First Negotiation and Last Refusal. Prior to any sale,
assignment, pledge or other conveyance of any right, title or interest by
Investor under this Agreement, Promoter shall have a right of first negotiation
and a right of last refusal with respect to any such sale, assignment, pledge or
other conveyance ("Proposed Transfer") in accordance with the following
procedures:
(a) If Investor is considering entering into a Proposed Transfer, Investor
shall, not less than thirty (30) days prior to negotiation with third parties,
negotiate in good faith exclusively with Promoter regarding mutually agreeable
terms of a Proposed Transfer to Promoter. If an agreement is not concluded
within such thirty (30) day period, Investor may negotiate with third parties,
but Investor shall not at any time enter into an agreement with a third party
regarding the Proposed Transfer without first offering to Promoter the
opportunity to acquire such rights on the same financial terms contained in any
such bona fide proposed agreement. Promoter shall have thirty (30) business days
from its receipt of written notice of the terms of such proposed agreement
within which to accept the financial terms. If Promoter gives Investor written
notice of its acceptance thereof, Promoter and Investor shall thereafter
negotiate in good faith with the objective of entering into a formal written
agreement setting forth the financial terms and other mutually agreeable terms
agreed upon between Promoter and Investor. Any failure by Promoter and Investor
to enter into a new written agreement shall not affect
1
The UJAC 2005 Irrevocable Trust
The MDW and GRW 2000 Irrevocable Trust
Xxxx Xxxxxx
Fuego Entertainment, Inc.
September 19, 2005
Page Two
Promoters acquisition of such rights and shall be deemed to include the terms of
this agreement.
(b) Any provision of a proposed agreement by a third party which cannot be
performed by one party or another or which relates to services of any particular
person or entity or to any particular property (other than the Show and/or the
Five City Tour) shall at promoter's option be deemed to be excluded from the
financial terms of a proposed agreement.
(c) If Promoter chooses not to accept the financial terms of an offer by a
third party after receiving written notice from Investor as provided herein,
Investor shall have the right for a period of ninety (90) days thereafter to
enter into an agreement with such third party (but no other party) upon the
financial terms previously offered to Promoter. Investor may not enter into an
agreement with such third party after the expiration of such 90 day period or
enter into an agreement on any terms with another party at any time without
first offering Promoter the opportunity to acquire such rights in accordance
with the procedures set forth hereinabove. If Promoter declines to exercise its
right of Last refusal and Investor enters into an agreement with a third party,
Investor shall transmit to Promoter a copy of the agreement entered into with
such third party promptly upon Xxxxxxxx's written request.
3. Except as otherwise set forth herein, the Agreement shall remain in full
force and effect.
Please confirm your agreement to and acceptance of the foregoing by signing
where indicated below.
Sincerely,
Viashow, Inc.
By:____________________
Title:___________________
(signatures continued on next page)
2
The UJAC 2005 Irrevocable Trust The MDW and GRW 2000 Irrevocable Trust Xxxx
Xxxxxx Fuego Entertainment, Inc.
September 19, 2005
Page Three
(signatures continued from previous page)
AGREED AND ACCEPTED:
_______________________________
___________________, Trustee,
The AJAC 2005 Irrevocable Trust
______________________________
Xxxxxxx Xxxxxxxx, Trustee,
The MDW and GRW 2000 Irrevocable Trust
______________________________
Xxxx Xxxxxx
Fuego Entertainment, Inc.
By: ___________________________
Title: ________________________
3
ROYALTY AGREEMENT
This Royalty Agreement (Agreement") dated as of this 3rd day of March,
2005, is entered into by and between Viashow, Inc. (the "Promoter"), on the one
hand, and the UJAC 2005 Irrevocable Trust, the MDW and GRW 200 Irrevocable
Trust, Xxxx Xxxxxx, and Fuego Entertainment ; (Individually and collectively
referred to herein as "Investor"), on the other hand, in connection with the
financing and pro9motion of the live stage and musical performance known as
Havana Night Club: The Show (the "Show") for purposes of presenting the Show as
part of the so-called Five City Tour. The term "Five City Tour" shall mean the
live performance of the Show on or around the following dates in the following
cities: (1) Tampa, Florida on April 15th and April 16th, 2005; (2) New York, New
York on April 29th and April 30th, 2005; (3) Miami, Florida on May 27th, 28th,
and 29th, 2005: (4) Los Angeles, CA TBA in mid-May, 2005; and (5) Orlando,
Florida TBA in June, 2005.
WHEREAS, Investor desires to purchase a royalty interest in the Tour
Revenue (as defined below) received by Promoter in connection with the Five City
Tour; and
WHEREAS, Promoter desires to sell such interest to the Investor as set
forth hereinbelow.
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
I. ROYALTY INTEREST
Section 1.1 Purchase Price for Tour Royalty Interest: In consideration of
Promoter selling the Tour Royalty Interest (as more specifically defined below),
Investor shall pay to Promoter the sum of One Million Five Hundred Thousand
Dollars ($1,500,000) (the "Purchase Price") as set forth in the spread sheet
prepared by Xxxxxx and Xxxxxx, attached hereto as Exhibit A and incorporated by
reference herein.
Section 1.2 Grant of Tour Royalty Interest: With respect to the Tour Royalty
Interest, this term "Tour Revenue" shall mean: (a) all monies received by
Promoter from ticket sales in connection with the Five City Tour; (b) all monies
received from Show merchandise sold at the applicable venue where the Show is
being performed in connection with the Five City Tour; (c) less all costs
incurred by Promoter (or third parties engaged by Promoter) in the production
and performance of the Show including; (i) make-up and wardrobe; (ii) sound and
lighting; (iii) transportation, per-diem, hotel, and other related travel costs;
(iv) insurance and permits; (v) security; (vi) technical crews; (vii) sums paid
to production companies; (viii) taxes; (ix) hall fees; and (x) all other costs
customarily recognized as costs associate with the live performance of the Show.
Section 1.3 Consideration: In consideration of Promoter's receipt of the
Purchase Price, Promoter shall pay (or cause to be paid to) Investor the
following royalties (the "Royalty
4
interest")
(a) Eighty percent (80%) of Tour Revenue until Investor receives an amount
equal to the Purchase Price payable as follows: (i) Twenty percent (20%) of Tour
Revenues to Fuego Entertainment, LLC; (ii) Thirty percent of Tour Revenues (30%)
to the MDW and GRW 200 Irrevocable Trust; and (iii) Thirty percent (30%) of Tour
Revenues to the UAJC 2005 Irrevocable Trust.
(b) After recoupment of the Purchase Price as set forth in paragraph 1.3(a)
above, but prior to the end of the Term, Promoter shall pay Investor the
following: (i) Twenty percent (20%) of Tour Revenues to Fuego Entertainment,
LLC; (II) Twenty percent (20%) of Tour Revenues to the MDW and GRW 200
Irrevocable Trust; and (iii) Twenty-Five percent (25%) of Tour Revenues to the
UAJC 2005 Irrevocable Trust.
Notwithstanding anything to the contrary herein, all of the royalty rates
payable under this section 1.2 are based on Promoter receiving a Purchase Price
of $1,500,000. In the event that Promoter shall receive a Purchase Price of less
than #1,500,000, then all of the royalty rates payable under this section 1.2
shall be reduced by multiplying the applicable royalty rates by a fraction of
the number of which is the amount of the actual Purchase Price received by
Promoter and he denominator of which is the Purchase Price.
Section 1.3 Term: The "Term" of this Agreement shall commence on the date hereof
and shall last for the duration of the Five-City Tour.
II. OBLIGATIONS OF PROMOTER
Section 2.1 Obligations of Promoter: The Promoter shall set in good faith and
use its best efforts in connection with the promotion of the Five-City Tour,
including the sale of tickets and merchandise, the realization of Tour Revenue,
and the performance of its obligations hereunder.
Section 2.2 Indemnification: The parties hereto do each agree to indemnify and
hold the other parties, and their respective employees, directors, officers,
attorneys, licensees, parent, affiliates, divisions, successor and assigns
harmless from and against any liability, damage, cost or expense (including
costs and reasonable attorneys' fees) occasioned by or arising out of any claim,
demand or action which is inconsistent with any warranty, representation,
agreement or grant of rights made or assumed by such indemnifying party
hereunder which is reduced to final adverse judgment or settled with the
indemnifying party's prior written consent. The indemnifying party agrees to pay
the indemnified party on demand any amount for which the indemnifying party may
be responsible under the foregoing indemnity. The indemnified party shall
provide the indemnifying party with notice of all claims to which any indemnity
obligations hereunder relate. The indemnifying party shall, at the indemnified
party's request, cooperate fully with the indemnified party in any controversy
which may arise with third parties or litigation which may be brought by third
parties concerning this Agreement or any of each of the party's hereto rights
hereunder. The indemnifying party shall have the right to participate, at its
sole cost and expense, in all such claims relating to the indemnifying party's
obligations, but
5
Promoter shall maintain control thereof. The indemnities contained in this
section 2.2 shall survive the termination of this Agreement.
Section 2.3 Accounting: Promoter shall maintain complete, up-to-date books and
records with respect to monies received by Promoter in connection with the
Five-City Tour.
(a) Within sixty (60) days after May 30, during which monies are received
by Promoter in connection with the Five-City Tour, Promoter shall render a
statement of accrued royalties earned under this Agreement during the preceding
calendar quarterly period. Concurrently with the rendition of such statement,
Promoter shall pay Investor all royalties shown to be due by such statement. No
statements need be rendered by Promoter for any such calendar quarterly period
after the expiration of the Term. All statements and payments shall be made to
the order of Xxxxxxx Xxxxxxxx and shall be sent to 0000 Xxxxxxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx, XX 00000. Investor shall be deemed to have consented to
all accountings rendered by Promoter hereunder and such accountings shall be
binding upon investor and not subject to any objection by Investor for any
reason unless specific objection, in writing, stating the basis thereof, is
given to Promoter within one (1) year after the date Promoter is deemed to have
rendered the applicable statement, and after such written objection, unless suit
is instituted within two (2) years after the date Promoter is deemed to have
rendered the applicable statement. Promoter shall be deemed conclusively to have
rendered such statement on the date prescribe in this Section 2.3(a) unless
Investor notifies Promoter otherwise with respect to any particular statement
within thirty (30) days after the date that Promoter is required to render that
statement pursuant to the first sentence of this paragraph.
(b) Investor shall have the right at Investor's sole cost and expense to
appoint a certified public accountant to examine the books and records of
Promoter as same pertain to the Five-City Tour; provided that, any such
examination shall be for a reasonable duration, shall take place at Promoter's
offices during normal business hours on reasonable prior notice and shall not
occur more than once in any calendar year. Investor may examine books and
records with respect to a particular statement only once. If Promoter agrees
that there has been an under-crediting of royalties to Investor exceeding ten
percent (10%) of the total royalties reported or credited by Promoter to
Investor's account hereunder for the period covered by such examination,
Promoter shall reimburse Investor in the amount of all reasonable fees paid by
Investor to the auditors concerned in connection with such audit, up to a
maximum amount of Ten Thousand Dollars ($10,000) per audit.
Section 2.5 Confidentiality: Each party hereto respectively warrants,
represents, covenants and agree that said party shall not disclose to any
person, partnership, corporation or other entity any information relating to the
negotiation, documentation or implementation of this agreement (including,
without limitation, the existence of this agreement and the responsibilities of
each party as defined herein) or any information relating to the terms and
conditions of this agreement; provided that each party may: (a) disclose to a
court of competent jurisdiction or other competent adjudicatory authority
information relating to the terms and conditions of this agreement, but only to
the extent necessary to enforce that party's rights under this agreement; (b)
disclose information relating to the terms and conditions of this agreement to
bona fide potential investors; and (c) disclose information relating to the
terms and conditions of this
6
agreement to their respective professional advisors to the extent necessary for
such advisor to render the representative services.
Section 2.6 Independent Contractor: Nothing contained in this Agreement shall
constitute a partnership or joint venture between Promoter and Investor. Neither
party hereto shall hold itself out contrary to the terms of this paragraph.
Neither party shall become liable for any representations, acts, or omissions of
the other contrary to the provision of this paragraph.
III. REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1 Representations, Warranties and Covenants of Investor: The Investor
represents, warrants and covenants (which shall be ongoing and in effect
throughout the Term of this Agreement) to the Promoter as follows:
(a) Investor has the power and authority to execute this Agreement and to
perform in accordance herewith;
(b) Performance by Investor of its obligations under this Agreement will
not result in (i) the breach of, conflict with, or constitute a default under
any agreement, indenture, loan or credit agreement or other instrument to which
the investor is subject, or (ii) the violation of any law to which the Investor
is subject.
(c) As between Promoter and Investor, Promoter shall own all copyrights,
trademarks, tradenames, and other intellectual property with respect to this
Show and the Five-City Tour and all adaptations, derivatives, versions, and
interpretations thereof. For the avoidance of doubt, this Agreement confers upon
Investor certain rights with respect to income participation only that derive
from the Five-City Tour.
Section 3.2 Representations, Warranties and Covenants of Promoter: Promoter
represents and covenants (which shall be ongoing and in effect throughout the
Term of this Agreement) to the Investor as follows:
(a) Investor has the power and authority to execute this Agreement and to
perform in accordance herewith;
(b) All covenants, waivers, exemptions, permits, licenses and other
approvals from any person, including any federal or state governmental agency,
that are necessary in connection with the performance by the Promoter of its
obligations under this Agreement, have been granted to or obtained by the
Promoter, and are in full force and effect.
(c) Performance by Promoter of its obligations under this Agreement will
not result in (i) the breach of, conflict with, or constitute a default under
any agreement, indenture, loan or credit agreement or other instrument to which
the Promoter is subject or (ii) the violation of any law to with the Investor is
subject.
(d) No selections, materials, ideas, or other properties selected or
created by
7
Promoter hereunder in connection with the Five-City Tour shall violate or
infringe upon any common law or statutory right of any person, firm, or
corporation.
Section 3.3 Additional Representations, Warranties and Covenants of Promoter:
With respect to the Five City Tour, the Promoter represents, warrants and
covenants (which shall be ongoing and in effect throughout the Term of this
Agreement) to the Investor as follows:
(a) Except as otherwise provided for under this Agreement (or as required
under customary agreements used in connection with live performances), Promoter
is, and shall remain, for so long as this Agreement shall remain in effect, the
owner of the rights to the Show, free and clear of any and all mortgages,
pledges, security interests, encumbrances, claims, charges or other lien
(whether arising by contract or operation of law), subject solely to the
interest of other investors in substantially the same position as the Investor.
IV. EVENT OF DEFAULT
Section 4.1 Event of Default: Anyone or more of the following events shall
constitute an "Event of Default" hereunder:
(a) Promoter shall fail to pay Investor as set forth herein.
(b) Promoter shall (i) apply for or consent to the appointment of or the
taking of possession by a receiver, custodian, trustee or liquidator of itself
or of all or substantially all of its property, (ii) admit in writing to a court
its inability to pay its debts as such debts become due, (iii) make a general
assignment of the benefit of its creditors, (iv) commence a voluntary case under
the federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up or adjustment of debts, or (vi) fail to contest in a
timely or appropriate manner, or acquiesces in writing to, any petition filed
against itself in an involuntary case under such Bankruptcy Code, or
(c) A proceeding or case shall be commenced, without the application or
consent of the Promoter, in any court of competent jurisdiction, seeking (i)
liquidation, reorganization, dissolution, winding-up or composition or
readjustment of debts, (ii) the appointment of trustee, receiver, custodian,
liquidator or the like of the Promoter or of all or any substantial part of its
assets or (iii) similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of thirty (30) days or any order for relief
against the Promoter shall be entered in an involuntary case under such
Bankruptcy Code.
8
(d) Notwithstanding anything to the contrary contained herein, Promoter
shall not be in breach of this Agreement and no Event of Default shall exist
unless Investor has given Promoter written notice of such breach and/or Event of
Default and Promoter fails to cure same within ninety (90) business days after
Xxxxxxxx's receipt of such notice.
Section 4.2 Remedies: Upon the occurrence of any of the Events of Default,
Investor may pursue all remedies afforded to Investor by law or equity. In the
event Investor shall receive monies hereunder in an amount equal to the Purchase
Price, then Investor shall be limited to a claim of money damages solely with
respect to Tour Revenues. In no event shall Investor acquire, receive or
otherwise be deemed to have any ownership interest in the Show and/or any of the
rights with respect thereto.
V. GENERAL PROVISIONS
Section 5.1 Assignment: Investor may assign, pledge or otherwise convey his
rights under this Agreement provided Promoter is given written notice thereof.
Promoter may assign, pledge or otherwise convey to any person Promoter's rights
with respect to the Five-City Tour without the prior written consent of the
Investor, but subject to section 1.2.
Section 5.2 Amendments: Severability: and Further Amendments: This Agreement may
be amended, modified or supplemented only by an instrument in writing executed
by both the Investor and the Promoter, except as provided in the following
sentence. If any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate nor render unenforceable any other provision hereof, and such invalid
or unenforceable provision shall be amended, if possible, in order to accomplish
the purposes of this Agreement. The Investor and the Promoter shall set in good
faith to execute and deliver, or cause to be executed and delivered, from time
to time, any supplements and instruments hereto as may be reasonably be required
or appropriate to further the purposes or to facilitate the performance of this
Agreement. Each party hereto acknowledges that this agreement constitutes and
contains the entire agreement and understanding of the parties concerning the
subject matter hereof and that this agreement supersedes and replaces all prior
negotiations, proposed agreements, and agreements, whether written or oral.
Section 5.3 GOVERNING LAW: THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWAS OF THE SATE OF NEVADA, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. VENU SHALL BE IN THE
COUNTY OF LAS VEGAS, NEVADA. THE PROMOTER AGREES TO PAY ANY AND ALL LEGAL FEES
INCURRED BY THE INVESTOR IN ENFORCING ITS RIGHTS UNDER THIS AGREEMENT SHOULD IT
BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE SATE OF NEVADA THAT THE
INVESTOR IS JUSTIFIED IN ANY AND ALL SUCH ACTION(S).
Section 5.4 Notices: All notices, certificates or other communications hereunder
shall be in writing and be deemed given when delivered (which delivery may be
made by electronic facsimile transmission or First Class U.S. Postal Service) to
the appropriate party in the address
9
identified on the execution page hereof. Each party may, by notice given
hereunder, designate any further or different address to which subsequent
notices, certificates and other communications to such party shall be sent.
Section 5.5 Counterparts: This agreement may be executed via facsimile and in
any number of counterparts, each of which shall be deemed an original for all
purposes and all of which taken together shall constitute but one of the same
instrument. It is not necessary that each party hereto execute the same
counterpart.
Section 5.6 Force Majeure: Neither party hereto shall be deemed in default of
its obligations hereunder if performance of any portion or all of the Five City
Tour (or the live performance of the Show currently scheduled to take place in
Miami, Florida, on March 10th, 2005) is delayed, or becomes impossible or
impractical, by reason of any cause beyond Promoter's reasonable control
including, without limitation, war, strike, accident, act of God, civil unrest,
epidemic, death, illness, or act or order of any governmental authority (such
causes collectively referred to herein as a "Force Majeure Event"). Each party
acknowledges this risk that any portion or all of the Five City Tour and/or the
above referenced March 10th, 2005 performance may be canceled due to a Force
Majeure Event. In the event any portion or all of the Five City Tour and/or
March 10th, 2005, performance is canceled due to a Force Majeure Event, Promoter
shall use best efforts to reschedule the applicable date(s) canceled. Both
parties shall be responsible for their own costs and expenses in connection with
any such Force Majeure Event.
IN WITNESS HEREOF, as of this 3rd day of March 2005, the Investor and the
Promoter have executed this Agreement.
INVESTOR:
The UAJC 2005 Irrevocable Trust The MDW and GRW 2000 Irrevocable Trust
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxxx
-------------------------- --------------------------
By: Xxxxx Xxxxxxxx, Trustee By: Xxxxxxx Xxxxxxxx, Trustee
Fuego Entertainment, Inc. Xxxx Xxxxxx
/s/ Xxxx Xxxxxx /s/ Xxxx Xxxxxx
-------------------------- --------------------------
By: Xxxx Xxxxxx, Director By: Xxxx Xxxxxx, Individually
PROMOTER:
/s/ Xxxxxx Xxxx
--------------------------
By: Viashow Inc.
Xxxxxx Xxxx, President
10
VIASHOW, INC.
c/x Xxxxxxxxx Xxxxx Xxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX
Attn: Xxxxx X. Xxxxx, Esq.
The UJAC 2005 Irrevocable Trust The MDW and GRW 200 Irrevocable Trust Xxxx
Xxxxxx Fuego Entertainment, Inc.
Dear Gentlemen:
Please refer to the Royalty Agreement among us in connection with the live stage
and musical performance known as Havana Night Club: The Show ("Show"). When
signed by all parties below, this letter shall constitute our further agreement
with respect thereto:
1. It is agreed that the term "Five City Tour" shall include the live
performance of the Show scheduled to take place in Miami, Florida, on
March 10th, 2005.
Please confirm your agreement with the following by signing in the appropriate
place below.
Very Truly Yours,
VIASHOW, INC.
/s/ Xxxxxx Xxxx
-------------------------
An Authorized Signatory
Xxxxxx Xxxx, President
ACCEPTED AND AGREED TO:
The UAJC 2005 Irrevocable Trust The MDW and GRW 2000 Irrevocable Trust
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxxx
-------------------------- --------------------------
By: Xxxxx Xxxxxxxx, Trustee By: Xxxxxxx Xxxxxxxx, Trustee
Fuego Entertainment, Inc. Xxxx Xxxxxx
/s/ Xxxx Xxxxxx /s/ Xxxx Xxxxxx
-------------------------- --------------------------
By: Xxxx Xxxxxx, Director By: Xxxx Xxxxxx, Individually
