Exhibit 10.4
CONCESSION
AGREEMENT
This
CONCESSION AGREEMENT (this “Agreement”) is entered
into and effective as of December 7, 1999, by and between
WALT DISNEY
WORLD CO . (“Disney”), with a mailing
address of P.O. Box 10,000, Lake Buena Vista, Florida 32830,
and CRYSTAL
MAGIC, INC . (“Vendor”), with a mailing
address of 2120 Hidden Pine Lane, Apopka, Florida, 32712
whereby Vendor shall provide certain services and/or
merchandise for sale to guests of Epcot® (the
“Premises”), located at the WALT DISNEY WORLD®
Resort.
IN
CONSIDERATION of the mutual covenants contained herein, the
parties agree as follows;
1.
Grant
of License . Disney hereby grants to Vendor a
non-exclusive, non-transferable license to enter upon the
Premises to perform the services described on Exhibit A
, attached hereto and made a part hereof (the
“Services”), and for no other purpose, Vendor
shall provide the Services at the Premises at Epcot® Imagination
Institute (the “Concession”). The
provisions of this Agreement shall be deemed to create a mere
license only, and shall not be construed no be a lease,
sublease, assignment, easement or” any other conveyance
of any interest in or to the Premises or in or to anything
contained therein or thereon. Vendor shall not make any
alterations or modifications to the Premises or the Concession
without the prior written approval of Disney, which approval
may be withheld by Disney in its sole discretion. Disney may
enter the Concession at any time for any purpose Including,
without limitation, ensuring that Vendor is complying with the
terms of this Agreement.
2.
Name
of the Concession. The name and any changes to the name
of the Concession must be pre-approved in writing by Disney in
its sole discretion. Unless otherwise agreed in writing by
Disney, in its sole discretion, in providing the Services,
Vendor shall not identify the name of Vendor or the brand name
of the merchandise, products or services being offered by
Vendor at the Concession.
3.
Days
and Times of the Services , Vendor shall provide the
Services at the Concession on the days and times as set forth
on Exhibit
A , or such other days and times as Disney shall
designate in its sole discretion.
4.
Term
, The term of this Agreement shall commence on December 7,
1999, and continue through and including September 30, 2006
(the “Term”), unless either party terminates this
Agreement, with or without cause, by providing the other party
with sixty (60) days’ prior written notice, In addition,
Disney may terminate this Agreement for cause (e.g., if Vendor
fails to perform any of its obligations under this Agreement)
immediately by giving notice to Vendor, The parties mutually
agree that there may be a period during the Term during which
the Concession will be closed by Disney for, among other
reasons, maintenance and rehabilitation of the Premises or
special events (the “Closed Period”). The
existence of the Closed Period shall not extend the Term or
release the parties from their obligations
hereunder.
5.
Merchandise/Other
Products/Services . Vendor shall provide the
merchandise, other products and/or services in connection with
the Services, as identified in Exhibit,
B . attached hereto and made a part hereof. All changes
in the merchandise, other products and/or services shall be
approved by Disney in writing in its sole discretion, Disney
shall have the right, in its sole discretion, to require
Vendor to remove any merchandise, other products and/or
services from the Concession and/or to add any merchandise,
other products and/or services to the Concession; provided,
however, that Disney shall not have the right to requite
Vendor to remove crystal glass cubes completely from the
Concession without the prior written approval of
Vendor
6. I
nventory/Equipment/Supplies
. Vendor will provide all inventory, equipment and supplies
necessary to provide the Services including, but not limited
to. the equipment described on Exhibit
C , attached hereto and made a pan hereof (the
“Equipment”) All of the inventory, Equipment and
supplies shall be subject to the prior approval of Disney in
its sole discretion. Vendor shall keep the Concession fully
supplied at all times. Vendor shall regularly inspect and
service the Equipment, keeping each piece of Equipment in good
working order. Vendor will be responsible for cleaning below,
above and behind the Equipment and for complying with all
other applicable rules and regulations relating to the
Equipment Including, but not limited to, those rules and
regulations more fully set forth in Exhibit
D , attached hereto and made a part hereof. During the
Term, Vendor shall retain ownership of all of the inventory,
Equipment and supplies necessary to provide the Services and
all risk of loss thereto shall be borne solely by Vendor,
except to the extent such loss is caused solely by
Disney’s gross negligence or willful misconduct.
Maintenance of the Equipment during the Term shall be
Vendor’s sole responsibility. Upon the expiration or
sooner termination of this Agreement, Vendor shall promptly
remove all of its inventory, Equipment and supplies from the
Premises. If Vendor shall fail to remove any of its inventory,
Equipment or supplies from the Premises, Disney may, at its
option, either remove and dispose of any or all of the same at
Vendor’s expense or retain the same, in which latter
event all right, title and interest therein shall pass to and
vest m Disney.
7.
License
To Use Disney Characters .
a. Disney
hereby grants to Vendor a revocable, non-transferable,
royalty-free, nonexclusive license to use the characters
identified on Exhibit
B only. On the merchandise identified on Exhibit
B . Vendor acknowledges that Disney has adopted the
Code of Conduct for Manufacturers (the “Code”) set
forth on Exhibit
D . attached hereto and made a part hereof. If Vendor,
at any time, desires to utilize a third party to manufacture
or produce any of the merchandise identified on Exhibit
B . Vendor will notify Disney of the names and physical
street addresses of such third parties (individually, a
“Third Party” and collectively, the “Third
Panics”), Disney shall have the right, in its sole
discretion, to approve in writing all of the Third Parties, If
Disney does not approve in writing any Third Party, Vendor
shall not use such Third Party to manufacture or produce the
merchandise identified on Exhibit
B . If Disney approves a Third Party in writing, Vendor
may use such Third Party to manufacture or produce the
merchandise identified on Exhibit
B
b. To
the extent Vendor wishes to manufacture or produce any of the
merchandise Identified on Exhibit
B itself, Vendor shall adopt the Code and shall
evidence such adoption by executing a copy of the Code and
delivering the originally executed copy of the Code to Disney
prior to Vendor’s commencement of the manufacture or
production of the merchandise identified on Exhibit
B
c. Disney
shall have the right, in its sole discretion, to withdraw its
approval of any Third Party at any time. If Disney withdraws
its approval of any Third Party. Vendor shall immediately stop
using such Third Party to manufacture or produce the
merchandise identified on Exhibit
B . provided, however, that Vendor shall be permuted to
sell ail of such merchandise in its inventory, unless Disney
provides otherwise in writing to Vendor
d. Disney
shall have the right to evaluate and monitor Vendor to ensure
that Vendor is only using Third Parties approved by Disney
hereunder to manufacture and produce the merchandise
identified on Exhibit
B including, but not limited to, on-sire inspections
and reviews of books and records
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e. Vendor
shall not sell or use the merchandise identified on
Exhibit
B at any ocher location or for any purpose other than
in connection with [he Services, unless approved by Disney in
its sole discretion. Upon the expiration or sooner termination
of this Agreement, Vendor shall return to Disney any remaining
Inventory of such merchandise.
8.
Signage.
Disney shall provide, at its sole cost and expense, such
signage and promotional materials for the Concession as Disney
deems necessary, in its sole discretion. Vendor shall not
display or distribute any other signage or promotional
materials at the Concession.
9.
Uniforms
. Disney will provide all uniforms for Vendor and its
employees. Vendor acknowledges and agrees that Vendor has no
ownership rights in the uniforms Vendor shall return the
uniforms to Disney for cleaning and maintenance as Disney may
require during the Term. Vendor shall keep such uniforms clean
and professional at all times in accordance with
Disney’s safety and appearance standards whenever Vendor
or its employees are performing the Services. Upon expiration
or sooner termination of this Agreement, Vendor shall
immediately return the uniforms to Disney Vendor will be
responsible for reimbursing Disney for Disney’s uniform
cleaning, maintenance and /or replacement costs for Vendor and
Vendor’s employees upon receipt of a monthly invoice
from Disney. To the extent any of the uniforms are lost or
substantially damaged, as determined by Disney in its sole
discretion. Vendor agrees to reimburse Disney for the
replacement costs of such uniforms.
10.
Disney’s
Responsibilities During the Term, Disney shall be
responsible for the following, at its sole cost and
expense:
a. Utilities
(other than telephone). In no event shall Disney be liable or
responsible for any interruption or disruption of utility
service and Vendor hereby waives any and all claims against
Disney for any loss, damage or expense arising out of, or
incurred In connection with, any such interruption or
disruption, and
b. Trash
pick up.
11.
Vendor’s
Responsibilities . During the Term, Vendor shall be
responsible for the following, at its sole cost and
expense:
a. Telephone
service; and
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b.
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Keeping
the Concession clean, sanitary and free from trash and
debris,
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12.
Compensation
for the Services.
a. Vendor’s
compensation for the Services shall be based solely on the
Services provided
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b. All
sales at the Concession are to be handled by Disney’s
personnel whether on sue or by mail order or drop shipping.
Vendor shall not accept any money from guests but shall refer
all sales transactions, including special orders and mail
orders, to Disney personnel for processing through cash
registers in accordance with Disney’s standard sales
procedures.
c. Disney
shall collect the compensation from the guests and shall pay
to Vendor sixty percent (60%) of gross revenues from retail
sales from the Services, less applicable sales, use, excise or
other taxes. Disney shall retain the remaining gross revenues
from retail sales from the Services. The term “gross
revenues from retail sales from the Services” is denned
as all monies and other things of value received by, or paid
to, Disney and all credit extended by Disney, arising upon,
out of or in connection with the Services at the Concession
during the Term, plus the amount of any applicable sales, use,
excise or other taxes, less the amount of any of
Vendor’s merchandise or products which are returned to
Disney or replaced by Disney, less the amount of any refunds
made by Disney in connection with the Services, less the
amount of any cancelled orders for Vendor’s merchandise
or products. Such fee shall be payable on or before Thursday
of each week with respect to gross revenues from retail sales
from the Services made during the preceding week (Sunday
through Saturday), through and including the calendar week
immediately following the expiration or sooner termination of
this Agreement.
d. Disney
shall maintain complete and accurate records evidencing the
gross revenues from retail sales from the Services Disney
agrees to make available to Vendor once each calendar year,
upon thirty (30) days’ prior written request by Vendor,
a full, permanent and accurate set of Disney’s
accounting books and records relating solely to gross revenues
from retail sales from the Services. Vendor will have the
right, at its sole cost and expense, to audit said books and
records, Disney agrees to keep all such books and records for
at least three (3) years following the expiration or sooner
termination of this Agreement.
13.
Taxes.
a. 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
Vendor’s compensation and retained by Disney or paid to
Disney by Vendor, as appropriate.
b. On
or before the 10 th
day of each month during the Term (including the month
immediately following the expiration or sooner termination of
this Agreement), Vendor shall supply Disney with a copy of
Vendor’s monthly sales tax report submitted to the State
of Florida, Department of Revenue
14.
Exhibits
The exhibits referred to in, and attached to, this Agreement
are hereby incorporated herein by reference. Unless otherwise
expressly provided in the exhibit or the body of this
Agreement, in the event of any conflict or inconsistency with
the provisions contained in the body of this Agreement and the
exhibits, the provisions contained in the body of this
Agreement shall prevail.
15.
Miscellaneous
. The GENERAL TEPMS AND
CONDITIONS attached to this Agreement are hereby
incorporated herein by reference, This Agreement constitutes
the entire agreement of the panics hereto with respect to the
subject matter of this Agreement and supersedes any and all
previous agreements between the panics, whether written or
oral, with respect to such subject matter, Any modification of
this Agreement shall be in writing and signed by both parties,
If any provision of this Agreement is deemed to be invalid, it
shall be considered deleted herefrom and shall not invalidate
the remaining provisions.
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16.
Signature
Authority The person who executes this Agreement on
behalf of either party hereto expressly represents and
warrants that he/she has full and complete authority to do so,
knowing that the other party intends to rely solely
thereon.
17.
No
Offer . This instrument does not constitute an offer by
Disney. When executed by Vendor, it shall constitute an offer
by Vendor to Disney irrevocable for a period often (10) days
after receipt by Disney and, upon execution by Disney and
delivery to Vendor, shall constitute a binding agreement
between the parties.
IN
WITNESS
WHEREOF , the parties have executed this Agreement as
of the date first above written.
(“DISNEY”) (“VENDOR”)
WALT
DISNEY WORLD
CO, CRYSTAL
MAGIC, INC
By:
/s/ Karl L. Holz
By:
/s/ Steven M. Rhodes
Print
Name: Karl L.
Holz
Print Name: Steven M. Rhodes
Title:
Vice
President
Title:
President
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GENERAL
TERMS AND CONDITIONS
A.
Control
of the premises . Nothing in this Agreement is intended
or shall be deemed or construed to grant to or confer upon
Vendor any rights whatsoever in respect of the Premises,
including, without limitation, rights in connection with the
closing, alteration, discontinuance, condemnation or casualty
loss thereof. Accordingly, without limiting the generality of
the foregoing. Disney shall have ultimate and unfettered
control over the Premises.
B.
Themed
Cart . If requested by Disney, Vendor shall provide a
cart for use in connection with the Services. Disney shall
have the right to approve every aspect of the Cart, including,
without limitation, design, theming and signage, such approval
to be in Disney’s sole and absolute discretion;
provided, however, that by giving any such approval, Disney
shall not assume responsibility for the quality, workmanship
and/or safety of such cart. Once approved, Vendor shall not
change the design, theming or any other aspect of the cart
without the express written approval of Disney, which approval
may be withheld by Disney in its sole discretion.
Vendor’s expenditure of any monies in connection with
the design, construction, installation, removal, acquisition
and/or operation of the cart shall be at Vendor’s sole
risk. Upon the expiration or sooner termination of this
Agreement, Disney shall have the right to request that Vendor
remove any theming from the cart and Vendor shall remove the
cart from the Premises at its sole cost and expense. If Vendor
shall fail to remove the cart from the Premises, Disney may,
at its option, either remove and dispose of the cart at
Vendor’s expense or retain the same, in which latter
event all right, title and interest therein shall pass to and
vest in Disney.
C.
Disney’s
Approval of Cart Manufacturer . The architects,
engineers, consultant and general contractors selected by
Vendor for the design and production of the cart shall be
licensed in the State of Florida and shall be subject to the
prior written approval of Disney, which approval may be
withheld by Disney in its sole discretion. If requested by
Disney, Vendor shall furnish to Disney copies of all contracts
for any work in connection with the design and construction of
the cart (including, without limitation, all contracts for the
purchase of materials and supplies in connection
therewith).
D.
No
Representations or Warranties by Disney . Disney makes
no representations or warranties whatsoever in connection with
this Agreement, including, without limitation, the condition
of the Premises, its suitability for the use described herein
or for any other use, the visibility, of the Concession to the
guests of the Premises, the profitability of the Services to
be provided at the Concession or the success or failure of the
Services to be provided at the Concession.
E.
Participants
. Vendor acknowledges that Disney and its parent, related,
affiliated and subsidiary companies are parties to certain
participant agreements and that Disney and its parent,
related, affiliated and subsidiary companies may enter into
additional participant agreements in the future. Vendor agrees
to comply with the provisions of such participant agreements
as they exist from time to time. Disney shall disclose the
relevant provisions of such agreements to Vendor.
F.
Licenses
. Vendor and its employees shall be licensed as required by
law. Vendor shall obtain and maintain throughout the Term, all
professional, occupational equipment, and other licenses and
permits required by law to perform the Services and shall
provide copies of such licenses to Disney upon
request.
G.
Disney
Traditions/Guest Surveys/Meetings . If requested by
Disney, Vendor and its employees shall enroll in, at
Vendor’s expense, and complete the Disney Traditions
class and any other Disney class that Disney deems necessary
prior to commencement of the Services or at any time
thereafter as Disney may determine in its sole discretion.
Vendor and its employees shall, if requested by Disney: (i)
conduct or participate in guest evaluation and experience
surveys at periodic intervals relating to the Premises and/or
the Concession and (ii) attend meetings called by
Disney.
H.
Parking
Passes/ID Cards . Disney shall provide Vendor and its
employees with parking passes and ID cards to gain admission
to the Premises and to the cast parking lot at the Premises.
Upon the expiration or sooner termination of this Agreement,
Vendor shall return to Disney all parking passes and ID cards
issued to Vendor and its employees pursuant to this
Agreement.
I.
Additional
Services/Disney Standard . Vendor shall pay Disney for
any and all services provided by Disney which are requested by
Vendor, including, without limitation, the installation of
water lines and fixtures, electricity lines and sanitary
sewer. In addition, to the extent Disney determines that
Vendor needs additional equipment to provide the Services,
including, without limitation, lightning rods, Disney shall
have the option of either requiring Vendor to acquire and
install such equipment at Vendor’s sole cost and expense
or acquiring and installing such equipment itself and then
billing Vendor for such equipment and installation. Further,
to the extent Disney determines that any of the equipment,
supplies, signage or any other items or materials used by
Vendor in connection with the Services do not satisfy the
Disney standard, as determined by Disney from time to time,
Disney shall have the option of either requiring Vender to
bring such equipment, supplies, signage or any other items or
materials into compliance at Vendor’s sole cost and
expense or taking whatever actions are required, as determined
by Disney in its sole discretion, to bring such equipment,
supplies, signage or any other items or materials into
compliance and then billing Vendor for such
actions.
J.
Late
Charges . Any amounts payable by Vendor pursuant to
this Agreement which are not paid when due shall bear interest
from the date due until the date paid at the lesser of the
maximum rate allowed by law or the annual rate of eighteen
percent (18%) and such interest shall be payable on demand.
Vendor shall be res
