Number: _____________
O P E R A T I N G A G R E E M E N T
___________________
EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY COMPANY
(a New York Limited Liability Company)
__________________
Total Offering
250 - 280 Units
Minimum of $12,500,000
Maximum of $14,000,000
In LLC membership interests of
EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY COMPANY
(the "Offering")
________________________
Offering Price
$50,000 per Unit of LLC Membership Interests
*
THE SECURITIES OFFERED HEREBY ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK AND SHOULD NOT BE PURCHASED BY ANYONE
WHO CANNOT AFFORD THE LOSS OF THE ENTIRE INVESTMENT.
THE DATE OF THIS OPERATING AGREEMENT IS
October 1, 2016
THE INFORMATION IN THIS DOCUMENT OR ANY OTHER DOCUMENT SUBMITTED TO
INVESTORS IN CONNECTION WITH THIS OFFERING, AND WHETHER SUCH
DISCLOSURE IS ADEQUATE AND WHETHER THESE SECURITIES ARE EXEMPT FROM
REGISTRATION, HAS NOT BEEN REVIEWED OR PASSED UPON BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AGENCY, NOR HAS ANY
SUCH AGENCY PASSED UPON THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY OR ANY REPRESENTATION THAT ANY
REGULATORY AGENCY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
OPERATING AGREEMENT IS A CRIMINAL OFFENSE. THE MEMBERSHIP INTERESTS
BEING OFFERED ARE SPECULATIVE SECURITIES WHICH INCLUDE A HIGH DEGREE OF
RISK. ACCORDINGLY, THE OFFERING IS SUITABLE ONLY FOR PERSONS WHO CAN
AFFORD A TOTAL LOSS OF THEIR INVESTMENT.
THE INTERESTS EVIDENCED BY THIS OPERATING AGREEMENT (THE "INTERESTS")
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR UNDER ANY STATE SECURITIES LAWS. THESE INTERESTS MAY
ONLY BE ACQUIRED FOR THE PURCHASER'S OWN ACCOUNT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE.
THIS AGREEMENT, TOGETHER WITH ITS ATTACHED EXHIBIT AND RELATED PAPERS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY, NOR SHALL THERE BE ANY SALES OF THESE SECURITIES, IN ANY STATE IN
WHICH THE REGISTRATION OR QUALIFICATION OF THESE SECURITIES IS REQUIRED
UNDER ANY APPLICABLE "BLUE SKY" OR OTHER STATE LAW PRIOR TO
SOLICITATION THEREIN OF SALES OR OFFERS TO BUY, UNLESS AND UNTIL THESE
SECURITIES SHALL HAVE BEEN DULY REGISTERED OR QUALIFIED UNDER THE LAWS
OF SUCH STATE.
THE INTERESTS ARE CONSIDERED 'SECURITIES' FOR PURPOSES OF FEDERAL AND
CERTAIN STATE SECURITIES LAWS. THE OFFER AND SALE OF THE INTERESTS WILL
BE MADE TO INVESTORS ONLY IN SUCH A MANNER THAT THEY WILL BE DEEMED
TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933
ACT PURSUANT TO SECTION 3(b)(2) OF THE 1933 ACT AND REGULATION A
PROMULGATED THEREUNDER.
THE MANAGERS RESERVE THE RIGHT TO WITHDRAW OR MODIFY THIS OFFERING
AND TO REJECT ANY PURCHASE OFFER IN WHOLE OR IN PART.
NO OFFERING LITERATURE OR ADVERTISING IN ANY FORM SHALL BE EMPLOYED IN
THE OFFERING OF THESE INTERESTS EXCEPT FOR THIS OPERATING AGREEMENT
AND ENCLOSED OFFERING CIRCULAR, AND NO PERSON HAS BEEN AUTHORIZED TO
MAKE OR TO GIVE ANY SUCH REPRESENTATIONS. ANY INFORMATION OR
REPRESENTATIONS NOT CONTAINED IN OR OBTAINED PURSUANT TO THE TERMS OF
THIS OPERATING AGREEMENT MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE MANAGERS.
ALL RELEVANT DOCUMENTS IN THE POSSESSION OF OR REASONABLY AVAILABLE
TO THE MANAGERS NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION
FURNISHED IN THIS OPERATING AGREEMENT WILL BE MADE AVAILABLE TO THE
OFFEREE AND/OR HIS/HER OR ITS ADVISORS UPON REQUEST.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATION FROM THE
COMPANY, THE MANAGERS, THEIR AFFILIATES OR ANY PROFESSIONAL
ASSOCIATED WITH THIS OFFERING, AS LEGAL, TAX OR INVESTMENT ADVICE. EACH
INVESTOR SHOULD CONSULT WITH AND RELY ON HIS/HER OR ITS OWN PERSONAL
COUNSEL, ACCOUNTANT AND/OR OTHER ADVISORS AS TO LEGAL, TAX AND/OR
ECONOMIC IMPLICATIONS OF THE INVESTMENT DESCRIBED IN THE OPERATING
AGREEMENT AND ITS SUITABILITY FOR HIM/HER OR IT. NO REPRESENTATION OR
WARRANTY IS OR CAN BE MADE AS TO THE ECONOMIC RETURN THAT MAY ACCRUE
TO A MEMBER. THERE MAY BE NO TAX BENEFITS FROM AN INVESTMENT IN THE
COMPANY (INCLUDING LEVERAGING AND/OR DEPRECIATION) AND ANY INVESTMENT
SHOULD BE MADE SOLELY FOR ECONOMIC REASONS. CERTAIN INVESTORS MAY BE
ABLE TO OFFSET LOSSES AGAINST CERTAIN INVESTMENT GAINS AT CERTAIN
TIMES, HOWEVER NO MEMBER SHOULD DEEM NOR RELY ON ANY STATEMENT
HEREIN AS TAX ADVICE. MEMBERS ARE ADVISED TO CONSULT A TAX ACCOUNTANT
REGARDING THE TAX REPERCUSSIONS OF THIS INVESTMENT.
Empire the Musical Worldwide, Limited Liability Company
TABLE OF CONTENTS
Article I ORGANIZATION 1
Article II GENERAL DEFINITIONS 2
Article III CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS 4
Article IV COMPANY FUNDS 6
Article V SUBSEQUENT PRODUCTIONS 6
Article VI ALLOCATIONS AND DISTRIBUTIONS OF THE COMPANY 7
Article VII RIGHTS, POWERS AND OBLIGATIONS OF THE MANAGERS 8
Article VIII TRANSFERS OF MEMBERSHIP INTERESTS 10
Article IX REPORTS AND TAX MATTERS 11
Article X DISSOLUTION AND TERMINATION 12
Article XI POWER OF ATTORNEY 13
Article XII MISCELLANEOUS PROVISIONS 13
EXHIBITS: EXHIBIT A PRODUCTION BUDGET
EXHIBIT B WEEKLY OPERATING BUDGET
OPERATING AGREEMENT
Empire the Musical Worldwide, Limited Liability Company
OPERATING AGREEMENT ("Agreement"), made and entered into as of October 1, 2016 by
these persons who have executed this Agreement or a counterpart hereof. The parties hereto,
intending to be legally bound, agree as follows:
Article I
ORGANIZATION
A. FORMATION OF LIMITED LIABILITY COMPANY
The Managers (as hereinafter defined) have organized a limited liability company (the
"Company") pursuant to the New York Limited Liability Company Act.
B. NAME
The business of the Company shall be conducted under the name of Empire the Musical
Worldwide, Limited Liability Company, or such other name as the Managers may
designate in writing.
C. PRINCIPAL OFFICE AND REGISTERED OFFICE
The principal and registered office of the Company be located at 230 West 41st Street,
Suite 1703, New York, NY 10036. The Managers may, within their sole and unrestricted
discretion, change the principal or registered office of the Company.
D. PURPOSE
The purpose of the Company is to produce and present the Broadway premiere (the
"Production") of the live dramatico-musical stage play entitled "Empire" (the "Musical"),
with book, music and lyrics by Caroline Sherman and Robert Hull (collectively, the
"Authors").
E. FISCAL YEARS
The fiscal year of the Company shall be the calendar year or such other fiscal year as the
Managers shall determine.
F. TERM AND CAPITALIZATION
The term of the Company commenced as of the date of the filing of the Articles of
Organization in the New York Department of State. Thereafter, the Company shall cease
raising further monies at such time as the aggregate contributions of Members to the
Company (plus loans, if any, pursuant to the terms below) equal at least Twelve Million
Five Hundred Thousand Dollars ($12,500,000) (the "Minimum Capitalization") have been
actually paid in. The Managers shall not be precluded from continuing to obtain
additional funds from Members but prior to the opening night performance of the
Production up to a "Maximum Capitalization" of no more than Fourteen Million Dollars
($14,000,000) from the sale of Membership Interests hereunder. The actual
capitalization raised by the Company to engage in the activities set forth herein (the
"Original Capital" or the "Capitalization") shall be raised, if ever, prior to the first paid
public performance of the Production and shall equal an amount no greater than the
Maximum Capitalization and no less than the Minimum Capitalization.
Notwithstanding anything herein to the contrary, the Company may accept loans
("Loans"), promissory notes, sponsorship, or other financing at any time which may
count towards or constitute part of the Minimum Capitalization or the Original Capital,
and nothing shall prohibit the acceptance of loans or other non-equity financing after the
Maximum Capitalization has been paid in. Loans shall be repaid prior to any
recoupment of contributions by Members, pursuant to the terms of Article VI(A)(2).
By their signature to the Subscription Agreement attached to this Agreement, Members
have the choice of authorizing the Managers to expend any or all of their capital
contributions on an "immediate use" basis, i.e., prior to the Capitalization having been
contributed by the Members. Accordingly, such contributions may be spent, prior to the
and prior to the Company reaching the Capitalization, for any proper purpose of the
Company, pursuant to the terms of the Immediate Use Authorization signed by the
Member.
If the Capitalization is not raised prior to January 31, 2021, all unspent monies
contributed hereunder shall be returned to the investors pursuant to Article IV hereof.
The term of the Company shall terminate in accordance with Article X.
G. DECISIONS
All decisions with respect to the production of the Musical, creative, operational,
financial, managerial or otherwise, shall be made by the Managers in their sole
discretion.
H. INCORPORATION BY REFERENCE
Upon execution, the terms of the attached Subscription Agreement shall be incorporated
herein by reference.
Article II
GENERAL DEFINITIONS
As used in this Agreement, the following terms when capitalized shall each have the
meaning set forth in this Article (unless the context otherwise requires). For purposes of
this Agreement, the terms "person" shall include individuals, corporations, associations,
partnerships, limited liability companies, trusts, estates and other entities.
A. ACT
Act shall mean the New York Liability Company Law, as now in effect or as hereafter
amended or revised.
B. COMPANY
Company shall mean Empire the Musical Worldwide, Limited Liability Company, the
limited liability company formed by the filing of the Certificate of Formation, as constituted
from time to time.
C. GROSS RECEIPTS
"Gross Receipts" shall be deemed to mean all sums derived by and belonging to the
Company from any and all sources (but not including Membership contributions or
Loans) including, without limitation, (i) from its stage presentations of the Musical,
including the Production, and inclusive of ancillary income such as merchandise and
commercial use products, (ii) from the disposition or exploitation of any of its rights in
the Musical, including subsidiary rights, tours, films and other derivatives or (iii) from the
disposition of its physical assets acquired with funds of the Company, and the return of
any bonds or other recoverable items, and (iv) interest, if any, on the aforesaid sums.
D. MANAGERS
"Managers" shall mean Marquee Theatrical Ventures, Inc., and Vaccaro Investments,
Inc., as well as any other Managers appointed by the afore-named Managers or
subsequent Managers pursuant to the terms hereof.
E. MEMBERS
Members shall mean investors in the Company to the extent of their contribution(s)
hereunder. All investors are required to execute this Agreement prior to being admitted
as a Member, as a condition of investment. The Managers reserve the right to reject any
potential Member and in such case no monies shall be accepted from the rejected party.
F. MEMBERSHIP INTEREST
Membership Interest shall mean, with respect to a Member, the value of ownership
interest in the Company of such Member, such value being equal to the contribution
made to the Company herewith. Membership Interests also will be expressed in units of
$50,000 each ("Units"). Members shall have the right to contribute multiple Units.
Notwithstanding anything else to the contrary herein, the Managers may consent to a
Member purchasing fractional Units and/or less than one Unit.
Members shall be responsible for paying all taxes in respect of their Membership
Interest, including, but not limited to, (1) federal income taxes resulting from increases to
a Member's Capital Account in respect to a given tax year and (2) federal income taxes
resulting from distributions made by the Company to that Member in a given year to the
extent such distributions exceed the Member's adjusted basis in the Company (that is,
the taxable value of the Member's Capital Account) for that year.
G. OFFERING
"Offering" shall mean the sale of Membership Interests hereunder.
H. PROPERTY
"Property" shall mean, at any time, all property, whether real or personal, assets or rights
owned or held by or on behalf of the Company at a given time.
I. OTHER EXPENSES
"Other Expenses" shall be deemed to mean all expenses of whatsoever kind or nature,
other than those referred to as Running Expenses (as defined herein) or Production
Expenses (as defined herein), incurred in or in connection with or by reason of the
operation of the business of the Company, including, without limitation, commissions
paid to agents, monies paid or payable in connection with claims for plagiarism, libel,
negligence, and other claims or settlements of a similar or dissimilar nature, and taxes of
whatsoever kind or nature (other than income taxes of the individual Members or
Managers). There shall be no "Other Expenses" incurred which are not reasonable and
directly related to and necessary for the formation of the Company or the operation of
the business of the Company.
J. PRODUCTION EXPENSES
"Production Expenses" shall be deemed to mean the total expenses, charges and
disbursements of whatever kind incurred by the Company directly in connection with any
production of the Musical prior to the opening of the Production, including without
limitation, fees, advances and/or other compensation of the Authors, director,
choreographer, designers, orchestrator, cast, general manager, company manager,
business manager, theater party representatives, production assistants and production
secretaries (none of which parties before referred to need render its services exclusively
in connection with the Musical); cost of sets, curtains, drapes, costumes, properties,
furnishings, electrical and sound equipment, rentals, bonds and guarantees, insurance
premiums, rehearsal salaries, charges and expenses, transportation charges, office
facilities furnished by the Managers, legal and auditing expenses, advance publicity,
theater costs and expenses, preliminary advertising, post-opening advertising, taxes of
whatsoever kind or nature other than income taxes of any of the individual Members or
Managers; expenses for replacement or substitution of any of the foregoing personnel
and items; and any and all other expenses usually included in the term "Production
Expenses." There shall be no "Production Expenses" incurred which are not reasonable
or which do not appear as a budgetary item of the final budget for the applicable
production of the Musical presented by the Company. The production budget for the
Production is attached hereto as "Exhibit A". This budget is subject to change but not so
as to change the Minimum Capitalization or the Maximum Capitalization.
K. RUNNING EXPENSES
"Running Expenses" shall be deemed to mean all expenses, charges and
disbursements of whatsoever kind actually incurred as running expenses of any
production of the Musical presented by the Company, including, without limitation,
percentage royalties payable to the Owner, Authors, director, choreographer and/or to
the Managers as a royalty; salaries and other compensation of cast, designers, stage
managers, general manager, company manager, business manager, theater party
representatives, production associates, production assistants, production secretaries
(none of which parties before referred to need render its services exclusively in
connection with the Musical), production supervisor and stage hands; theater costs and
expenses, theater rentals, transportation charges, office facilities, insurance, legal and
auditing expenses, advertising, publicity and promotion expenses (including the right to
engage an advertising agency at the usual commission and to contract for additional
payments for merchandising, exploitation, sales promotion and publicity), commissions
paid to theater party agents, brokers, telephone sales and credit card companies,
Ticketmaster and similar types of organizations, rentals of equipment, lighting, props and
other articles from parties (including the Managers or Members of the Company or the
Company), miscellaneous supplies, taxes of whatsoever kind or nature, other than
income taxes of the individual Members or Managers, and any and all other expenses
usually included in the term "Running Expenses." The term "Running Expenses" shall
also include any portion of the gross weekly box office receipts or Gross Receipts
generated by the Musical payable to any person or firm rendering or furnishing services
or materials or granting rights to be used by the Company in or in connection with the
production or presentation of the Musical or the exploitation of any of the rights therein.
A weekly operating budget is attached hereto as "Exhibit B", though such is subject to
change.
Article III
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
A. CONTRIBUTIONS OF MEMBERS
Each of the parties signing a Subscription Agreement as a Member shall contribute to
the capital of the Company at or prior to the commencement thereof the respective sum
set forth on the Subscription Agreement executed by such Member. Such capital may
consist of cash or property or services, but only pursuant to such property or services
being valued in a reasonable manner at fair market value. Cash contributions shall be
held in a special segregated bank account and may be expended by the Managers on
behalf of the Company only as authorized in this Agreement.
B. NO OBLIGATION TO ACCEPT MEMBERS
All offers to subscribe to Membership Interests are subject to acceptance by the
Managers.
C. PAYMENT FROM MANAGERS' SHARE OF NET PROFITS
Without limiting the provisions of the above, the Managers have the right for any reason
whatsoever to pay to certain Members, persons rendering services to the Company,
and/or any other party or parties, an additional participation but solely from the
Managers' share of Net Profits of the Company.
D. CAPITAL ACCOUNTS
Separate capital accounts shall be maintained by the Company for each Member. The
capital account of each Member shall be credited with his or her capital contributions (at
net fair market value with respect to contributed Property) and shall be appropriately
adjusted to reflect each Member's relative allocations (determined by relative
Membership Interest held) of profits, gains, losses, deductions, the net fair market value
of distributions made from the Company and such other adjustments as shall be
required by the Internal Revenue Code of 1986 704(b) and the regulations promulgated
thereunder. See Article IX for further tax information and terms.
E. LIMITED LIABILITY
The Members shall not have any personal liability for liabilities or obligations of the
Company except to the extent of their capital contribution, and the Members shall not be
required to make any further or additional contribution to the Company or to lend funds
to the Company for any purpose. Notwithstanding anything to the contrary in the
foregoing, a Member shall indemnify and hold harmless the Company and each Member
from any liability or loss incurred by virtue of the assessment of any tax with respect to
such Member's allocable share of the profits or gain of the Company.
F. LOANS
If the Managers believe that additional funds are necessary for the carrying on of
Company affairs, they shall have the right, in their sole discretion, to borrow in the
Company's name the amount which they deem necessary, on such terms as they in their
sole discretion shall determine, as long as the terms thereof (including interest) are
reasonable, prudent, and customary in the theater industry. Moneys borrowed together
with interest payable to parties other than a Manager, shall be repaid to such parties by
the Company pursuant to VI(A)(2) hereof.
G. NO INTEREST ON OR RIGHT TO WITHDRAW CAPITAL CONTRIBUTIONS
No interest shall be paid by the Company on capital contributions or on the balance in
any capital account (except as specifically noted below) and no Member shall have the
right to withdraw his or her capital contribution or to demand or receive a return of his or
her capital contribution, unless failure to meet such demand would constitute a breach,
by the Company, of a specific provision of this Agreement other than this Article III(G) or
a violation of any applicable law or court order. For clarification purposes, nothing in this
Article III(G) shall limit the right of a Member to recoup its capital contribution or
otherwise receive or realize allocations, distributions or other funds, revenue, profits or
other rights or entitlements as specifically set forth elsewhere in this Agreement.
H. PROHIBITION AGAINST SECURITIZATION
A Member shall not have the right to pledge its Membership Interest or any portion
thereof, or any other right or benefit hereunder, as collateral or to otherwise secure any
note or obligation.
Article IV
COMPANY FUNDS
The Managers shall open and maintain in the name of the Company a special bank account or
accounts in designated as the "Empire the Musical Worldwide, Limited Liability Company"
account in which shall be deposited all of the capital of the Company and no other funds. All
monies received from the Offering of Membership Interests hereunder shall be held in this
special bank account in trust until actually employed for the Production or until returned or
distributed to the Members pursuant to the terms hereof. In any event, the funds held in such
account shall be used solely for the business of the Company. Should any Manager become the
principal of other entities, the bank account(s) of such entities shall also not be co-mingled with
that of the Members.
If the Minimum is not reached on a timely basis pursuant to the terms set forth in Article I(F), or
the Offering is otherwise terminated prior to the Minimum being secured, the Managers will
refund unspent contributions, first to those Members who did not waive refund and thereafter, if
any unspent contributions remain, to those Members who waived refund. It is understood that
the Managers shall not be obligated to return any contributions from their own assets, and thus
Members risk the loss of all or a part of the amounts they contributed.
Subject to the provisions of this Agreement, all funds received by the Company shall be utilized
for Company purposes as determined by the Managers in the best interest of the Company.
Subject to the terms hereof, the Managers or their designee(s) shall have the right to draw
checks payable in such funds and make, deliver, accept and endorse negotiable instruments in
connection with the Company's business.
Article V
SUBSEQUENT PRODUCTIONS
A. ADDITIONAL COMPANIES
After the Production, if the Managers believe that the Musical has sufficient potential to
be produced again, one or more times, either as a tour or a sit down production (each, a
"Subsequent Production), the Managers may, in their sole discretion, form one or more
additional limited liability company(s) or similar entity(s) (each, a "Subsequent
Company") so as to produce any Subsequent Production(s). To effectuate this, the
Managers, on behalf of the Company, shall license to such Subsequent Company(s)
those rights necessary to allow the Subsequent Company to present and otherwise
exploit the Musical. The Managers also may, on behalf of the Company, license rights
held by the Company to third party companies the principals of which may not include
any Manager of the Company (a "Licensee Company"). In addition and in no way meant
to limit the above, any Subsequent Company or Licensee Company shall pay to the
Company customary and reasonable royalties, license fees and/or other compensation
as consideration of the Subsequent Company's or Licensee Company's exploitation of
rights in and to the Musical licensed to such Subsequent Company or Licensee
Company by the Company.
B. SUBSIDIARY PARTICIPATION
It is expected that the Company, as the presenter of the Production, shall be entitled to a
participation, expressed as a percentage of gross receipts (with deductions for payments
off the top to agents) of the Authors' future gross income from the Musical derived from
exploitations of the Musical licensed by the Authors' to by third parties, such third parties
not to include the Company, the Managers or any Subsequent or Licensee Company.
The participation of this Company shall depend on the number of performances of the
Production presented by the Company. Any amounts inuring to the Company as a result
of such subsidiary participation shall constitute Gross Receipts, and shall be distributed
according to the terms herein.
C. CO-PRODUCTIONS
The Managers shall also have the right to fix the terms of any co-production or licensing
agreement with third parties, and amounts inuring to the Company therefrom shall be
distributed according to the terms herein.
D. MANAGERS' COMPENSATION
The producers (which may include one or more Managers) may receive a producer
royalty (which may be a share of gross weekly box office receipts, or per gross weekly
box office percentage point royalty pool equivalent) and other customary payments in
connection with Subsequent Productions, in accordance with theater industry custom.
Article VI
ALLOCATIONS AND DISTRIBUTIONS OF THE COMPANY
A. Gross Receipts realized and actually received by the Company from all sources shall be
applied as follows and in the following order of priority:
1. First, to the payment of the Production Expenses (to the extent not paid for by
the Original Capital), Running Expenses and Other Expenses.
2. Second, to the repayment of any loans to the Company, plus any interest
thereon.
3. Third, to the establishment of a cash reserve (distributable cash held back, or
accumulated) in an amount determined by the Managers in their sole reasonable
discretion from time to time, for anticipated debts, liabilities, expenses and
working capital.
4. Gross Receipts remaining after the deductions set forth in subsections 1, 2, and
3 above shall be characterized as "Net Cash Flow." Net Cash Flow shall be
distributed to each Member in the same proportion as his contribution bears to
the aggregate amounts raised from Members, until such time as each Member
has recouped 100% of his contribution to the Company ("Recoupment").
5. Next, after Recoupment, Net Cash Flow, if any, shall be deemed "Net Profits"
and shall be distributed as follows:
a. The Managers may allocate Net Profits "off the top" to third parties in
reasonable and customary arms-length transactions in consideration of
services provided or rights contributed to the Musical, or the
production(s) presented hereunder. There shall be no other distribution
of Net Profits prior to their characterization as Adjusted Net Profits as
described below.
b. The remainder of such Net Profits, if any, shall be deemed "Adjusted Net
Profits" of the Company, and shall be applied as follows:
i. MEMBER'S NET PROFITS: An amount equal to 50% of Adjusted
Net Profits shall be divided among the Members of the Company,
with each such Member receiving that portion thereof as its
contribution bears to the amounts raised in the aggregate from
Members; and
ii. MANAGERS' NET PROFITS: An amount equal to 50% of the
Adjusted Net Profits shall be paid to the Managers of the
Company. The Managers shall have the right to allocate
Manager's Net Profits to themselves or any third parties in their
sole discretion.
C. DISTRIBUTIONS
If and so long as any amounts are payable to the Members pursuant to the foregoing,
the Company shall seek to pay such amounts within sixty (60) days after the end of each
calendar quarter with respect to any amounts payable for such quarter; provided, that
the Company shall seek to make the first such payment on the date twelve (12) weeks
following the first paid public performance of the Musical hereunder, if any such amounts
are payable at such time; and provided further, that commencing with the first calendar
year following the year in which the last performance of the Musical has been presented,
the Company shall seek to make such payments within sixty (60) days after the end of
such calendar year.
D. AUDIT AND STATEMENT
All distributions to the Members from the Company shall be accompanied by the
Company's financial statements showing the origin thereof. For a period of eighteen (18)
months after the delivery of a given financial statement, a Member may, during reasonable
business hours and upon fourteen (14) days written notice to the Company and at the
Member's expense, audit the books and records of the Company in order to verify the
accuracy thereof. Any statement in respect of which such an audit does not occur within
such 18-month period shall be deemed accepted and approved in its entirety by the
applicable Member. Notwithstanding the above, the cost of such audit shall be at the
Company's expense if, and only if, such audit uncovers that the distribution in respect of
the (or any) statement(s) to which such audit relates was in an amount which was 10% or
more lower than the amount due to the Member. If such audit reveals that there was a
discrepancy in Company's favor between the amount actually paid to the Member and the
amount owed to the Member, the Member shall immediately remit payment to the
Company in the amount of such discrepancy.
Article VII
RIGHTS, POWERS AND OBLIGATIONS OF THE MANAGERS
A. MANAGEMENT AND CONTROL IN GENERAL
The Managers shall have full and exclusive power to manage and control the business
and affairs of the Company and to designate such powers. The Members shall have no
right to act on behalf of or bind the Company. The Members shall have no power to
appoint or remove any Manager except as specifically set forth herein. The Managers
shall have all the rights, powers and obligations of a manager as provided in the Act and
as otherwise provided by law, and any action taken by a Manager shall constitute the act
of and serve to bind the Company. In dealing with a Manager (or a principal of a
Manager), no persons shall be required to inquire into, and all persons are entitled to rely
conclusively on, the authority of such Manager to bind the Company.
B. NUMBER AND APPOINTMENT OF MANAGERS
1. A Manager may resign at any time upon prior written notice to the Company. In
the event (a) of a vacancy in the position of Manager by any reason, including
resignation, removal, death or bankruptcy, or (b) that the Managers wish to
appoint additional Managers, a successor or additional Manager may be
appointed by the remaining Managers, if any, if the Managers choose to do so,
subject to the unanimous approval of the Managers. The Members must replace
a vacating Manager if the vacancy results in there being no Managers remaining.
2. A Manager shall not be required to be a Member of the Company or a resident of
any particular state.
3. The removal or resignation of any person or entity who is a Manager by any
means shall not dictate the removal of that person or entity as a Member if that
person or entity is a Member.
4 The initial number of Managers shall be two (2).
5. A Manager may be removed only in accordance with or as required by law or
applicable legal process, as mutually agreed, or in accordance with the terms of
a binding contract to which such removed Manager is a party.
C. ACTION AND DECISIONS BY MANAGERS
Managers may act and/or make decisions according to any process or voting procedure
they agree upon in writing. Unless and until any such process or procedure is thereby
agreed upon, and subject to the other provisions this Agreement, no decision or act by
the Managers shall require written resolutions or other instruments memorializing
agreement (except for approval over a decision making process or voting procedure, as
set forth in the above paragraph).
D. COMMITMENT OF MANAGERS
A Manager shall not be required to devote full time to the affairs of the Company and
shall devote such time to Company affairs as it deems necessary in its sole and
unrestricted discretion to manage and supervise the operations and business of the
Company. Nothing contained in this Agreement shall preclude the employment by a
Manager, on behalf of and at the expense of the Company, of it or any agent or third
party to operate and manage all or any portion of the business or to provide any service
relating to the business, subject to the control of the Managers. The Managers may, on
behalf of the Company, engage one or more affiliates to render services to the
Company, provided that any such engagement shall be upon terms and conditions no
less favorable to the Company than could be obtained from an independent third party.
Neither the Company nor any of the Members shall have, as a consequence of the
relationship created hereby, any right in or to any income or profits derived by the
Managers or an affiliate of a Manager from any business arrangements with the
Company which are consistent with this Section.
E. OTHER ACTIVITIES
Each Manager, any principal or affiliate of any Manager, and any Member may engage
in or possess an interest in other business ventures or investments of any kind,
independently or with others, including but not limited to ventures engaged in owning,
operating or managing businesses or properties similar to those businesses or
properties owned or operated by the Company. The fact that a Manager, a principal of a
manager, any affiliate of a Manager, or any Member may avail itself of such
opportunities, either by itself or with other persons, including persons in which it has an
interest, and not offer such opportunities to the Company or to a Member, shall not
subject the Manager, the principal of the Manager, the Member or such affiliate to
liability to the Company or to any other Member on account of lost opportunity. Neither
the Company nor any Member shall have any right by virtue of this Agreement or the
relationship created hereby in or to such opportunities, or to the income or profits
derived therefrom, and the pursuit of such opportunities, even though competitive with
the business of the Company, shall not be deemed wrongful or improper or in violation
of this Agreement.
F. TITLE TO PROPERTY
Title to Property shall be taken in the name of the Company or in the name or names of
a nominee or nominees designated by the Managers.
G. LIABILITY OF A MANAGER
The Managers and any affiliate of any Manager, and their respective officers,
shareholders, controlling persons, directors, agents and employees, shall not be liable,
responsible or accountable in damage or otherwise to the Company or to any of the
Members, their successors or permitted assigns, arising out of activities taken in
connection with Company business, except by reason of acts or omissions due to gross
negligence or willful misconduct. Any action taken in good faith in reliance upon and in
accordance with the advice or opinion of professional counsel shall be conclusively
deemed not to constitute gross negligence or willful misconduct.
H. INDEMNIFICATION
The Company shall indemnify, defend and hold harmless any person (the "Indemnified
Party") who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, against losses, damages, claims or expenses actually and reasonably
incurred by it for which such Indemnified Party has not otherwise been reimbursed
(including attorney's fees, judgments, fines and amounts paid in settlement) in
connection with such action, suit or proceeding, by reason of any acts, omissions or
alleged acts or omissions arising out of the Indemnified Party's activities as a Member or
Manager, or as an officer, shareholder, director, agent or employee of a Member or
Manager, on behalf of the Company or in furtherance of the interests of the Company,
so long as the Indemnified Party did not act in a manner constituting gross negligence or
material, willful misconduct (no reliance on the advice of professional advisor(s) shall
constitute such misconduct or negligence). The termination of any action, suit or
proceeding by judgment, order, settlement, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that the Indemnified Party's conduct
constituted gross negligence or willful misconduct.
Article VIII
ADMISSION OF NEW MEMBERS
A. ADMISSION OF MEMBERS
Subject to the consent and approval of the Managers, and pursuant to the other terms of
this Agreement, Members shall be admitted to the Company through the purchase of
Membership Interests. A Member's contribution may, upon the approval of the
Managers, consist of (i) non-cash property, including, without limitation, real property, or
services, provided that such property or services are valued at their fair market value or
(ii) a secured note payable at a date certain. The decision as to whether to accept any
contribution from any prospective Member belongs to the Managers in their sole
discretion; the Managers may accept or reject a prospective capital contribution for any
reason or for no reason.
B. DECISIONS AND MEETINGS
To the extent that Members are authorized to make decisions with regard to the
Company pursuant to the limitations set forth in this Agreement and applicable law, they
may do so (i) pursuant to the written approval of the Members holding a majority of the
Membership Interests of the Company or (ii) pursuant to the approval of the Members
holding a majority of the Membership Interests of the Company at a meeting in respect
of which all Members and Managers are given no less than ten (10) days prior written
notice and at which no less than half of the Membership Interests of the Company are
present whether in person, by proxy, or telephonically. Such notice shall set forth the
time and place of the meeting. If no place for the meeting is designated, the place of the
meeting shall be the business office of the Company.
Article IX
REPORTS AND TAX MATTERS
A. BOOKS, RECORDS AND REPORTS
1. Accurate books, records and reports shall be maintained by the Company
showing its assets, liabilities, operations, transactions and financial condition, as
well as the names of the addresses of the Members. The Company books and
records may be kept under such permissible method of accounting as the
Managers may determine. The Company books shall be maintained at the
principal office of the Company, and each Member shall have the right upon
reasonable notice given to the Company to inspect, extract and copy such books
during regular business hours of the Company.
2. The Managers shall cause income tax returns for the Company to be prepared
and filed with the appropriate authorities. Within ninety (90) days after the close
of each fiscal year of the Company, the Managers shall send to each person who
was a Member at any time during such fiscal year such information as will be
sufficient to prepare documents which may be required to be filed under relevant
federal and state income tax laws.
B. ALLOCATIONS OF GAIN ("NET TAX PROFITS") AND LOSSES ("NET TAX
LOSSES") FOR TAX PURPOSES
1. ALLOCATION OF NET TAX PROFITS
Net Tax Profits for each fiscal year will be allocated as follows:
a. First, to the Members, until the cumulative Net Tax Profits allocated
pursuant to this subsection 1(a) are equal to the cumulative Net Tax
Losses allocated to them pursuant to Section 2(b), below, for all prior
periods.
b. Next, 50% to the Members in proportion to their Membership Interest in
the Company and 50% to the Managers.
c. Notwithstanding the foregoing provisions of this Section 1, to the extent
that Net Tax Losses were allocated to a Manager or a Member in any
year by reason of the provisions of Section 3, Net Tax Profits for the
current and subsequent years will be allocated to such Manager or
Member until equal to the amount of Net Tax Losses allocated to such
Manager or Member pursuant to Section 3.
2. ALLOCATION OF NET TAX LOSSES
Net Tax Losses for each fiscal year will be allocated as follows:
a. First, to the Members and Managers, until the cumulative Net Tax Losses
allocated pursuant to this subsection 2(a) are equal to the cumulative Net
Tax Profits allocated to them pursuant to Section 1(b), above, for all prior
periods.
b. Second, to the Members pro rata in proportion to their capital
contributions.
C. TAX MATTERS PARTNER
Marquee Theatrical Ventures, Inc. shall be the "tax matters partner" for purposes of
Subchapter C of Chapter 63 of Subtitle F of the Internal Revenue Code (Code '6221-3)
and shall have the authority to exercise all functions provided for in said Act, or in
regulations promulgated thereunder by Treasury, including, to the extent, permitted by
such regulations, the authority to delegate the function of "tax matters partner" to any
other person. Marquee Theatrical Ventures, Inc. shall be reimbursed for all reasonable
expenses incurred as a result of its duties as tax matters partner. Notwithstanding
anything to the contrary in the above, at any time during the Company's existence the
Managers may appoint a new tax matters partner.
Article X
DISSOLUTION AND TERMINATION
A. DISSOLUTION OF THE COMPANY
The Company shall dissolve and be terminated upon the earlier of (1) the entry of a
decree of judicial dissolution, (2) the written agreement of all parties who are Managers at
such time, (3) such time as when all the Managers have resigned, died, or have become
incapacitated or Bankrupt (unless the Members with voting rights unanimously agreed to
change this provision at such time or appoint a new Manager), (4) the permanent
cessation of all Company activities or (5) such time as the Company is required to be
terminated or dissolved under the Act or other applicable state or federal law.
B. LIQUIDATOR
1. Upon dissolution of the Company, the Managers, or such person as the Managers
may designate, shall act as liquidator of the Company (in either case, the
"Liquidator"). The Liquidator shall have unlimited discretion to determine the time,
manner and terms of any sale of property having due regard to the activity and
condition of the relevant market and general financial and economic conditions.
The Liquidator shall distribute any proceeds received from the disposition of the
property and any other assets of the Company in accordance with the provisions of
Article IV.
2. The Liquidator shall comply with all requirements of the Act and other applicable
law pertaining to the winding up of a limited liability company, following which the
Company shall stand liquidated and terminated.
C. SOURCE OF DISTRIBUTIONS
Each Member shall look solely to the assets of the Company for all distributions with
respect to the Company, the return of his capital contribution thereto and his share of
profits or losses thereof, and shall have no recourse therefor (upon dissolution or
otherwise) against any other Member or Manager.
Article XI
POWER OF ATTORNEY
A. POWER OF ATTORNEY
Each Member, by executing this Agreement or a counterpart hereof, does hereby
irrevocably constitute and appoint the Managers, and any successor Manager of the
Company, with full power of substitution, as such Member's true and lawful attorney-in-
fact (the "Attorney-in-Fact"), in his or her name, place and stead, to execute,
acknowledge, swear to, deliver, file and record such documents which are now or may
hereafter be required by law to be filed on behalf of the Company or are deemed
necessary or desirable by the Managers to carry out fully the provisions of this
Agreement in accordance with its terms, and which (1) are in no way inconsistent with
the terms hereof and (2) do not lessen the interests, rights or entitlements or any
Member.
B. NATURE OF POWER OF ATTORNEY
The grant of authority in Article XI(A) by each Member (1) is a special power of attorney
coupled with an interest in favor of the Attorney-in-Fact and as such shall be irrevocable
and shall survive the death or legal incapacity of the Member; (2) may be exercised for
the Member by a facsimile signature of the Attorney-in-Fact; and (3) shall survive the
assignment by the Member of all or any portion of his or her Membership Interest.
Article XII
MISCELLANEOUS PROVISIONS
A. NOTICES
All legal notices or other communications required under this Agreement shall be in
writing and shall be considered as properly given if personally delivered or if mailed by
certified mail, or via Federal Express, to such Member or Manager at his or her address
on the records of the Company, or faxed if such fax may be confirmed with appropriate
written confirmation, or emailed if receipt of such email may be confirmed with
appropriate written confirmation. A Member may change his or her address for notice by
giving notice in like manner. Any notice or other communication shall be deemed to
have been given to, or received by, the appropriate party as of the date on which it is
personally delivered or, if mailed, on the third business day after the date on which it is
deposited in the United States mail, or if faxed or emailed, on the day of confirmation
thereof, or if by Fed-Ex, on the day of delivery. If the time of notice is not during regular
business hours, notice shall be deemed given as of the start of the next business day. A
courtesy copy of all notices sent to the Managers or Company shall be sent to Ben
Feldman, Esq., Feldman, Golinski + Reedy, PLLC, 100 Wall Street, 23rd Floor, New
York, NY 10005, email: bfeldman@fgrslaw.com, fax: 212-230-1090.
B. GOVERNING LAW/ARBITRATION
Any and all disputes or controversies arising out of, under, or in connection with this
Agreement, its making, interpretation, validity, or the performance or breach thereof,
shall be submitted to arbitration before a single arbitrator in New York City under the
rules and regulations of the American Arbitration Association and judgment upon the
award may be entered in any court, state or federal, having jurisdiction thereof. The
arbitrator shall be directed to award the prevailing party reasonable attorney's fees. The
parties consent to the jurisdiction of the state (or federal, for federal claims) courts of the
State of New York for the purpose of enforcing this arbitration agreement and
proceeding, and entry of judgment on any award. This Agreement shall be deemed
made and to be performed in New York and shall be construed in accordance with the
laws of the State of New York, without regard to conflicts of law principles.
C. SUCCESSORS AND ASSIGNS
This Agreement and all terms and provisions hereof shall be binding upon and shall
inure to the benefit of the Members and their respective heirs, executors, administrators,
successors and permitted assigns. Any person acquiring or claiming an interest in the
Company, in any manner whatsoever, shall be subject to and bound by all the terms,
conditions and obligations of this Agreement to which his or her predecessor in interest
was subject or bound, without regard to whether such person has executed this
Agreement or a counterpart hereof or any other document contemplated hereby. No
person shall acquire an interest in the Company or become a Member thereof except as
permitted by the terms of this Agreement.
D. COUNTERPARTS
This Agreement may be executed in any number of identifiable counterparts, each of
which, for all purposes, shall be deemed an original, and all of which constitute,
collectively, one and the same Agreement, in addition, this Agreement may contain more
than one counterpart signature page and may be executed by the affixing of the
signature of each of the Members to one of such counterpart signature pages, and all
such counterpart signature pages shall be read as one and shall have the same force
and effect as though all the signers had signed the same signature page.
E. ADDITIONAL ASSURANCES
Upon the request of the Managers, each Member agrees to perform all further acts and
execute, acknowledge and deliver any documents which the Managers deem reasonably
necessary to effectuate the provisions of this Agreement.
F. MODIFICATION TO BE IN WRITING
This Agreement constitutes the entire understanding of the parties hereto with respect to
the subject matter hereof and supersedes any and all prior negotiations, understandings
and agreements in regard hereto. No amendment, modification or alteration of the terms
hereof shall be binding unless the same is in writing and is effected in accordance with
this Agreement.
G. PARTITION
Each of the parties hereto irrevocably waives during the term of the Company any right
that he or she may have to maintain any action for partition with respect to Company
Property.
H. NO WAIVER
Failure or delay of any party in exercising any right or remedy under this Agreement, or
any other agreement between the parties, or otherwise, will not operate as a waiver
thereof. The express waiver by any party of a breach of any provision of this Agreement
by any other party shall not operate or be construed as a waiver of any subsequent
breach by said party. No waiver will be effective unless and until it is in written form and
signed by the waiving party.
I. GENDER AND NUMBER
Wherever from the context it appears appropriate, each term stated in either the singular
and plural, and pronouns stated in either the masculine, the feminine or the neuter
gender, shall include if appropriate, the singular, plural, masculine, feminine and neuter.
J. HEADINGS
The captions in this Agreement are inserted for convenience of reference only and shall
not affect the construction of this Agreement. References in this Agreement to any
Article or part of an Article are to the same contained in this Agreement.
K. VALIDITY AND SEVERABILITY
If any provision of this Agreement contravenes any law and such contravention would
thereby invalidate this Agreement, or if the operation of any provision hereof is
determined by law, administrative regulation or otherwise to result in classification of the
Company as an association taxable as a corporation for federal income tax purposes, or
to make a Member generally liable for the obligations of the Company, then such
provision is declared to be invalid and subject to severance from the remaining portion of
this Agreement, and this Agreement shall be read and construed as though it did not
contain such provision in a manner to give effect to the intention of the parties to the
fullest extent possible.
L. NO THIRD-PARTY RIGHTS
This Agreement and the covenants and agreements contained herein are solely for the
benefit of the parties hereto and their affiliates. No other person shall be entitled to
enforce or make any claims, or have any right pursuant to the provisions of the
Agreement.
M. COUNSEL
Each Member and Manager has been advised to obtain independent legal counsel in
connection with this Agreement and that such party has either obtained such
independent legal counsel or has voluntarily waived its right to do so.
N. SUBSCRIPTION AGREEMENT
The applicable representations, warranties and other terms of the Subscription
Agreement executed by the Member as a condition of the Member's investment in the
Company are hereby incorporated by reference.
AGREED TO AND ACCEPTED BY:
MARQUEE THEATRICAL VENTURES, INC.
___________________________________
By: Rick Stevens, Authorized Signatory
VACCARO INVESTMENTS, INC.
______________________________________
By: Brenda Sue Vaccaro, Authorized Signatory
EXHIBIT A
PRODUCTION BUDGET
EXHIBIT B
WEEKLY OPERATING BUDGET
OFFERING CIRCULAR
___________________
EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY COMPANY
230 West 41st Street, Suite 1703
New York, NY, 10036
P: (917) 941-4869
__________________
Total Offering
250-280 Units
Minimum of $12,500,000
Maximum of $14,000,000
In LLC membership interests of
EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY COMPANY
(the "Offering")
________________________
Offering Price
$50,000 per Unit of LLC Membership Interests
*
THE SECURITIES OFFERED HEREBY ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK AND SHOULD NOT BE PURCHASED BY ANYONE
WHO CANNOT AFFORD THE LOSS OF THE ENTIRE INVESTMENT.
THE DATE OF THIS OFFERING CIRCULAR IS
October 1, 2016
TABLE OF CONTENTS
Article I SUMARY INFORMATION 3
Article II RISK FACTORS 5
Article III USE OF PROCEEDS OF ISSUER 8
Article IV DESCRIPTION OF BUSINESS 9
Article V DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT
EMPLOYEES 11
Article VI COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS 11
Article VII INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS 12
Article VIII SECURITIES BEING OFFERED 12
Article I
SUMMARY INFORMATION
This summary highlights information contained elsewhere in this Offering Circular and does not contain
all of the information prospective investors should consider in making their investment decision.
Prospective investors should read this summary together with the more detailed information in this
Offering Circular, as well as the Operating Agreement and Subscription Documents.
The Limited Liability Company
Empire The Musical Worldwide, Limited Liability Company (the "Company") is a Limited Liability
Company formed under the laws of the State of New York. The principal executive offices of the
Company are anticipated to be located at 230 West 41st Street, Suite 1703, New York, NY, 10036.
The Managers of the Company are Marquee Theatrical Ventures, Inc. (whose principal and authorized
signatory is Rick Stevens), Vaccaro Investments, LLC (whose principal and authorized signatory is
Brenda Sue Vaccaro), and any additional Managers added pursuant to the terms hereof and the terms of
the Operating Agreement.
Members shall mean investors in the Company.
The purpose of the Company is to produce and present the musical play entitled "Empire" (the
"Musical"), with book, music and lyrics by Caroline Sherman and Robert Hull, and to exploit the rights in
the Musical. The Company intends to mount a production of the Musical in 2017 on Broadway in New
York City.
The Musical
The Musical is a romantic comedy, set against the building of the Empire State Building, with big dance
numbers, great characters, and toe-tapping songs, bringing to life the majesty and grandeur of 1930's New
York City.
The Managers intend for the initial production of the Musical (the "Production") to premiere in 2017 on
Broadway, though they shall have the right to postpone that production in their sole discretion. In January
and February 2016, the Managers produced a production of the Musical at the La Mirada Theatre,
directed by Marcia Milgrom Dodge. While an agreement with a theater is not yet completed in connection
with the Production, the Managers have started discussions with suitable Broadway theaters between
1400-1600 seats which are available in 2017.
The Offering
Security offered Membership Interests
Units offered Aggregate Membership Interests are not actually divided into a
specific number of units and monetary amounts. For purposes of
convenience, they may be considered to consist of 250 units of
$50,000 for the minimum capitalization and 280 units of $50,000 for
the maximum capitalization.
Price per unit $50,000
Minimum offering $12,500,000 (250 units). Prospective investors should note that the
Managers may accept non-equity contributions, loans and/or funding
in the form of cash payments or goods or services from sponsors,
which would have the effect of reducing the amount of capitalization
to possibly below the minimum amount to be furnished by capital
contributions from the Members.
Maximum offering $14,000,000 (280 units)
Minimum investment One unit at $50,000. The Managers may in their sole discretion
approve the purchase of portions of a unit, or less than one unit.
Overcall None
Expenses of offering It is estimated that expenses of the offering shall be paid from the
offering proceeds, such as clerical fees, legal fees, filing fees,
disbursements and others.
Use of proceeds The proceeds of the offering will be used for the production of the
Musical and reimbursement of Managers for sums expended or to be
expended on the production of the Musical.
Purchaser requirements These securities are offered to investors pursuant to exemptions
under Federal and State securities laws including, without limitation,
Regulation A under Title IV of the JOBS Act. Therefore, investors in
the Company may either be "accredited" or "unaccredited" investors,
but certain limitations are placed on investments by unaccredited
investors. The Managers may decline investments from any
prospective investor that does not meet the above requirements or for
any other reason.
Termination of Offering This offering shall end if the minimum capitalization of the
Company is not raised by the earlier of (i) the close of business on
the day before the first paid public performance of the Musical is to
be presented; or (ii) the date on which the producer's production
rights expire.
Risk Factors An investment in the Company is highly speculative and involves
substantial risks. Prospective investors should carefully review and
consider the factors described under "Risk Factors".
Article II
RISK FACTORS
An investment in Empire The Musical Worldwide, Limited Liability Company involves significant risks.
Prospective investors should read these risk factors carefully before deciding whether to invest. The
following is a description of what is considered the Company's key challenges and risks. The risks and
uncertainties described below are not the only risks and uncertainties faced by the Company. Additional
risks and uncertainties not presently known to the Company or that are currently deemed immaterial may
impair the Company's success.
This Memorandum contains certain forward-looking statements that involve many risks and
uncertainties. These statements relate to future events or the Company's future financial performance. In
some cases, one can identify forward-looking statements by terminology including "could," "may,"
"will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or
"continue," the negative of these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially from those projected as a result of certain of
the risk factors set forth below and elsewhere in the Memorandum. The Company cannot guarantee
future results, performance or achievements.
No Assurance of Recovery of Capital or Payment of Profits. The Company wishes to emphasize that no
one should consider the purchase of the interests being offered without recognizing the highly speculative
nature of and the risks of loss involved in the purchase of an interest in an enterprise devoted to a
particular theatrical production. Prospective investors should only invest in the Company if they do not
require liquidity in their investment and are prepared to lose their entire investment.
High Statistical Chance of Failure. It is estimated that of the plays produced for the Broadway stage,
seventy percent (70%) result in a loss to their investors.
Uncertainty of Critical or Public Acceptance. Considerable competition exists among producers in the
acquisition of theatrical properties. To some extent, the success or failure of the theatrical venture is
dependent upon the ability of the producer to select talent and plays that will appeal to the theater-going
public and to produce such work in a desirable theater. Ultimately, however, it is for the audience to
determine whether a production will be a commercial success or failure.
Competition. All aspects of the theatrical industry are highly competitive. The Company faces
competition from other theatrical producers and presenters not only in attracting creative, business and
technical personnel for the production of show, but also in securing theaters to present the Musical. Many
of these competitors have substantially greater experience, assets, and financial and other resources than
the Company, and have worldwide producing organizations in place. In addition, the Musical will
encounter competition from other plays and musicals as well as other types of public entertainment. The
competition faced by live presentation theaters for the public's leisure-time activities has increased in
recent years because of the expansion of the number of entertainment outlets such as cable, DVD, and
digital.
The Company has No Operating History. The Company has recently been formed (formed on August 24,
2011). As such there is no operating history or financial statements on which an investment decision can
be based. The likelihood of success of the Company must be considered in light of the risks, costs,
difficulties and delays frequently encountered in establishing a new enterprise, many of which are beyond
the Company's control. The Company is subject to all of the risks inherent in the creation of a new
enterprise and the competitive environment in which it will operate. There can be no assurance that the
Company will prove to be commercially successful or profitable.
Limited Business Purpose of Company. The sole business of the Company will be the production and
presentation of the Musical and the exploitation of the rights in the Musical. In such a venture the risk of
loss is especially high in contrast with the prospects of any profit.
Non Marketability of Interests. The customary method of financing legitimate theater business ventures is
by the organization of a Limited Liability Company. A theatrical Limited Liability Company is formed
usually for the purpose of producing, presenting and exploiting the rights held by it in a single theatrical
property. There is no market for the resale of Membership Interests and none is expected to develop.
Although an investor has the right to assign his/her interest in the profits of the Company, with the
consent of the Managers, no assignee of an investor of the Company has the right to become a substituted
investor in place of his/her assignor, unless the Managers consent thereto in writing, which they are not
obligated to do.
In addition, as the Membership Interests of the Company are unregistered securities within the meaning of
the Federal and State securities laws, an investor may not transfer his/her Membership Interests without
registration of such interests or exemption from the provisions of the applicable securities laws and
regulations. The Managers are not obligated to register the Membership Interests at any time or to
repurchase any units from any investor. Therefore, an investor should only make a purchase for
investment purposes and be prepared to bear the economic risk of this investment for an indefinite period
of time.
No Assurance of Recoupment of Capital Contribution. The Musical will have to run for a significant
amount of time (8 or more shows) at or well over 60% capacity to recoup investments made by investors.
Subsidiary Rights Income is Uncertain. If the Musical is presented for a certain number of performances
within a specified period, prospective investors may be entitled to share in the proceeds from the
exploitation of subsidiary rights in the Musical. If the Company is entitled to share in said subsidiary
rights income, it is impossible to determine the extent to which such income will amount.
Potential Conflict of Interest. The interests of the Managers may be in conflict with the interests of the
investors because the Managers, who will also be the producers, shall be entitled to receive a weekly
office expense charge, producer fee, and a royalty of 3% of the gross weekly box office receipts. In
certain instances it may be in the Managers' interest as the producer to continue to present the Musical,
whereas it may be in the interest of investors for the run of the play to be terminated.
The obligations of the Managers to the Company are not exclusive. The Managers and their principals are
involved in other theatrical and entertainment-related projects as well as in other business activities.
Liabilities incurred and commitments undertaken by the Managers with respect to projects other than the
Company's business could adversely affect its ability to manage the Company. Moreover, the Managers
are expected to engage in the production of other theatrical productions for its own account, and for
others, during the term of the Company. Such activities could be seen as competing with the Company
and resulting in potential conflicts of interest.
In addition, the Managers may now or hereafter engage in businesses which provide goods and/or
services to the Company which otherwise would be provided by unrelated third parties. By becoming an
investor in the Company, investors consent to such transactions as long as they are on terms substantially
as favorable to the Company as would have been provided by unrelated third parties.
Contributions to the Capital of the Limited Liability Company. Any monies expended by the Managers
prior to the completion of the offering of the Company for items which, if incurred by the Company
would have constituted production expenses, weekly operating expenses or other expenses relating to any
production of the Musical will be considered equivalent to a cash contribution to the capital of the
Company if the Managers elect not to have such monies reimbursed to them. The Managers have not
made any such election and, consequently, it cannot be known whether such expenditures will, in fact, be
cash contributions to the capital of the Company. In any event, none of such monies will be repaid to the
Managers prior to the receipt by the Company of the minimum capitalization unless authorized to be used
prior to the minimum capitalization of the Company.
Managers' Control. The Managers have complete control over the management of the Company which
includes the production of the Musical and the exploitation of all of the Company's rights. Therefore,
investors will not participate in the decision making process as far as management of the Company is
concerned and may not hold the Managers liable for any action it may take in good faith within the scope
of its authority as Managers.
Abandonment or Close of Production. The Managers have the right to abandon production of the Musical
at any time, for any reason whatsoever. If such abandonment occurs before the opening of the Production
financed by the Company, then the investors must be prepared for the loss of all or substantially all of
their investment. If such abandonment occurs after the opening of the Musical on Broadway and the
Musical does not have a successful run, the investors must also be prepared for the loss of all or
substantially all of their investment, except to the extent that the Company can profitably exploit the
subsidiary rights in the Musical.
Managers' Right to Obtain and Make Loans. The Managers may obtain from third parties or any Manager
may make loans to be repaid before return of the investors' capital contributions without affecting the
respective interests of the investors. Any such loans advanced or to be advanced for the Company's
purposes may be entitled to be repaid in full with or without interest before the return of any contributions
to the investors (provided, however, that any loan to the Company made by a Manager shall not require
the payment of any interest thereon). If the Managers elect to borrow additional sums or advance funds in
the Company's name, such loans or advances may result in considerable delay in the repayment of
investors' capital contributions to the Company or in a complete loss to investors if the gross receipts
from the Musical are not sufficient to meet operating expenses and repay both loans or advances and the
capital contributions of the investors.
Production of Musical at Minimum Capitalization Reduces Chance of Success. The Company may
complete the offering upon raising at least $12,500,000. This amount represents the Managers' estimate
of the minimum amount required to produce the Musical. Capitalizing the Company at such a figure
might mean that the Company would have less funds with which to meet contingencies or on which to
draw for increased advertising or other expenditures that might be required to increase the likelihood of
the Musical's success.
Risk of Authorizing Immediate Use of Contribution Prior to Minimum Capitalization of the Company.
The investors have agreed to the use of his/her capital contribution to the Company prior to the minimum
capitalization of the Company for pre-production or production purposes, without waiving the right to
have their contributions refunded. As such if insufficient funds are raised to complete the offering, the
investors may lose part or all of their contribution without a production of the Musical having been
presented. Any investor authorizing immediate use of their contribution obtains no advantage, unless such
advantage has been negotiated with the Manager. Rather an investor incurs a distinct risk by authorizing
use of contributions prior to the minimum capitalization of the Company.
Possibility of Investors Receiving Unaudited Financial Statements. If the Company receives an exemption
from the requirements of filing certain certified accounting statements pursuant to New York accounting
laws applicable to theatrical productions, then investors may be provided with unaudited financial
statements. The Managers have not as of the date of this Memorandum applied for such exemption or
determined whether such application will be made.
Not All Contracts Have Been Entered Into. Not all written contracts necessary for the Production have
been completed as of the date hereof. Some agreements with key personnel, such as the director, musical
director, performers and certain other creative personnel and others when entered into, may include
provisions for compensation measured by percentages of gross weekly box office receipts or weekly
operating profits (in the case of a royalty pool). Investors should be aware that additional payments based
on gross weekly box office receipts or weekly operating profits (in the case of a royalty pool) will
increase the Weekly Operating Expenses of the show and increase the amount of time that profits will
accrue that can pay back investors' investments.
No Withdrawal from Company. Prospective investors should note that once their investment has been
approved by the Managers and they become a Member of the Company, they cannot withdraw from the
Company and demand the return of their investment.
Offering Price of the Units Arbitrarily Determined. The offering price of $50,000 per unit has been
arbitrarily determined by the Company based upon such factors as the proceeds to be raised by this
offering, the lack of a public market for the Company interests and the capital requirements of the
Company. There is no relationship whatsoever between such offering price and the assets or book value
of the Company, or any other recognized criteria of value.
Federal Income Tax Consequences. The Company has not obtained and will not seek to obtain a ruling
from the Internal Revenue Service or an opinion of counsel as to its status as a Company for federal
income tax purposes or as to any other issue. Prospective investors should consult their own tax advisers
as to the tax consequences of investment in the Company.
Article III
USE OF PROCEEDS OF ISSUER
The net proceeds of the offering are estimated to be a minimum of $12,500,000 (unless loans or prior
contributions comprise part of the minimum capitalization) and a maximum of $14,000,000, which
include the cost of mounting the play in New York City up to the opening of the Musical in New York
City.
Prospective investors should note that the Managers have expended certain funds in connection with the
Musical (including by way of example only, attorneys and general manager fees and author advances) for
which they will be entitled to reimbursement. It is further anticipated that the Managers may, from time to
time, advance additional sums for which they will be reimbursed. The Managers shall be entitled to be
reimbursed for such pre-production expenses from funds authorized to be used prior to the minimum
capitalization of the Company and after its receipt of minimum capitalization. However, the Managers
may elect to have such unreimbursed expenses deemed the equivalent of a cash contribution to the
Company.
The Production Budget represents the Company's best estimate of its allocation of the net proceeds of this
offering based upon its current plans and estimates regarding its anticipated expenditures. Actual
expenditures to be made cannot be predicted with any degree of certainty and may vary substantially from
these estimates. In particular, many of the personnel to be used in or in connection with the production of
the Musical have not yet been selected and many of the key contracts have not been negotiated.
The Managers reserve the right to revise the Production Budget if productions costs become more or less
expensive or if additional production items are required. The Managers make no representations with
respect to the final actual production costs or cost of any items of production expenses. Furthermore, if
the Managers in their best judgment and in good faith determine that a lesser sum than the maximum
capitalization is sufficient to meet the production requirements of the Musical, it is anticipated that
amongst other things, the reserve and advertising allocations will be reduced.
In the Managers' best judgment, the minimum net proceeds under this offering will be sufficient to mount
a Broadway production of the Musical. Nevertheless, the Managers reserve the right, in their sole
discretion, to advance or cause to be advanced or to borrow in the Company's name from the Managers
and/or third parties, such additional funds as it may deem necessary, as set forth herein.
Article IV
DESCRIPTION OF THE BUSINESS
Theatrical Industry
The commercial theater business in the United States is generally separated into two categories, New
York and outside New York. New York is the central and principal venue for commercial theater in the
United States with a significant resident population of theater-goers and a tourist population that attends
the commercial theater regularly. The commercial theater business in New York is generally either
"Broadway" productions, which are presented in larger theaters principally in New York's Times Square
area or "Off-Broadway" productions, which are presented in smaller theaters in other areas in the
Manhattan Borough of New York City. Productions of plays and musicals in New York City tend to be
produced on an open ended basis whereby they can run for an unlimited period of time, dependent upon
adequate ticket sales. Tickets are usually sold on an individual basis. In other cities across the United
States, productions tend to run for a limited period of time, and sell tickets on a subscription basis along
with other productions.
A theatrical producer begins the process of producing a play or musical by obtaining, by him or herself or
with others, an option for the right to present the play on the live stage in New York City (either on
Broadway or Off-Broadway) from the author or authors of the play or musical. Such option is exclusive
to the producer and usually contains additional options for the producer to present the play on tour and in
other cities in the United States and Canada as well as certain international territories. It is typical for the
producer to pay the writer or writers a non-recoupable advance against a royalty to be paid to the writer or
writers from the gross weekly box office receipts derived from the producer's presentation or
presentations of the play or musical. The royalty paid to the author or authors of a play is typically
between 4.5% and 10% of the gross weekly box office receipts. Occasionally, a play or musical is based
on another work or on the life of a person. On these occasions, the producer would be required to obtain
such rights to the other work or from the person who is the subject matter of the work. Typically, the
holders of such rights would also be entitled to a royalty based on the gross weekly box office receipts;
such amount is usually between 1% and 2%. Gross weekly box office receipts are usually defined as the
receipts received from the sale of tickets for the show minus credit card costs, applicable amusement or
sales tickets and certain pension and welfare union payments (for Broadway only) that do not usually
amount to over 10%.
When a producer is presenting a new play or musical or is presenting a play or musical that has not been
previously presented in the United States, the producer will usually be entitled to vest a percentage of
revenues earned by the author or authors in the future from the exploitation of the play or musical,
including revenues from a film or television adaptation of the play or musical and future stage
presentations of the work. This revenue participation is called subsidiary rights participation and the
percentage is vested by the producer based upon the number of performances of the play or musical that is
presented by him or her. The top subsidiary rights participation that can be earned by the producer is
typically from 40% to 50%.
The theatrical producer with an option on a play or musical will usually form a legal entity in which to
raise funds to produce the play or musical and to actually serve as the company to actually produce the
play or musical. The producer will also begin the process of preparing the necessary offering papers to
legally raise money from the public, usually as an exempt offering under federal and state securities laws.
The customary entity employed in the theatrical industry is a Limited Liability Company or a limited
liability company. The producer will assign to such entity the rights he or she obtained by virtue of the
option agreement with the writer or writers of the play or musical, including the producer's right to
subsidiary rights participation. Very often the producer will team with other producers to partner with
him or her in presenting the play or musical and/or in raising the necessary financing. It is at this stage
that the company will most likely begin its involvement with a theatrical production.
Virtually simultaneously with the creation of the legal entity and preparation of the offering papers, the
producers of the play or musical will usually begin to assemble the business and creative elements and
personnel for the presentation of the play or musical. On the business side, the producers will retain a
theatrical attorney, a general manager, a company manager, a theatrical press agent, a marketing
specialist, an advertising firm, a production supervisor and other related personnel. On the creative side,
the producers will retain a director, a cast and chorus, a choreographer, designers for the set, costumes,
lighting, sound and hair, a stage manager, a musical director, a conductor, a casting director and other
related personnel. The compensation paid to the above-mentioned personnel is usually paid in
accordance with applicable union rules. Many are entitled to royalties of the gross weekly box office
receipts, including the producers. In addition to the above, the producers must license a theater or, if
producing a tour, must license a number of theaters in each city that it is planning to tour the show.
Theater licenses often provide that the production pay a fixed rent, plus the expenses associated with the
running of the theater facility and a royalty based on a percentage of gross weekly box office receipts.
Usually, the producers of a show will want to enhance a developmental, not for profit, limited run
production, regionally, at a LORT theater.
The show will usually require significant rehearsals prior to public performances of the play or musical.
Rehearsals can typically be from four to fourteen weeks. Prior to a show opening on Broadway or Off-
Broadway, it will run a number of preview performances before paying audience members. These
preview performances will allow the producers and the creative personnel the chance to see how certain
material is received by the audience and to make changes, if necessary, prior to the opening of the show.
Just prior or after a play or musical opens, the critics for newspapers, television, magazines and other
media will see the play or musical and write their reviews. Usually, the first reviews for the play or
musical appear in public on opening night or the morning after.
A medium to large Broadway theater can gross between $60,000 and $200,000 in ticket sales per week.
The point at which a given show breaks even depends upon a great many factors. On average, producers
of a play or musical will attempt to keep the break-even point for a production at no more than 60% of the
theater's potential gross. As noted above, many of a show's personnel (including the producers) are paid
a percentage of a show gross weekly box office receipts. As such, the amount of such compensation will
vary from week to week depending upon the number of tickets sold. Over the past number of years,
producers have tended to institute a royalty pooling arrangement that allows for reduced royalties for
royalty recipients when a show is doing poor to average business. This royalty pooling arrangement may
allow the show to make net profits during these periods of poor to average business when they would
ordinarily not be entitled to such profits. It is unusual for the theater owner to participate in such a royalty
pooling arrangement.
Typically, as a show makes operating profits, 100% of such profits are paid to investors of the show until
the investors are paid back in full. Thereafter, the investors and producers each are entitled to 50% of the
adjusted net profits from the show. As the weekly running costs to the show are direct (i.e., they are
limited to the actual running of the physical production of the play or musical) and the entity that
produces a show is a single purpose entity (i.e., its purpose is solely to exploit the play or musical), a
show that makes profits will pay such profits to investors.
Article V
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
Marquee Theatrical Ventures-Ricky Stevens (Producer). Ricky has spent his entire life in the theater
since appearing with Vincent Price and Michelle Lee in Damn Yankees at the age of 11. He earned a
Bachelor of Fine Arts in Arts Administration from the University of Missouri and is a graduate of the
Commercial Theater Institute (CTI). Broadway credits include A Catered Affair by Harvey Fierstein and
John Bucchino (Three Tony Award nominations), Is He Dead by Mark Twain (One Tony Award
nomination), and Radio Golf by August Wilson (Four Tony Award nominations). London, West End
credits include Marguerite by Legrand, Boubil, Schoenerg, Kretzmer, and Rodgers and Hammerstein's
Carousel. Since the age of 25 he has produced and general managed over 100 productions including
Forever Plaid, The Odd Couple, Nunsense, The Exonerated, Belfast Blues, Border Clash, Sidd the
Musical, Oedipus for Kids, and Back Home, The War Brides Musical. Ricky is a proud member of the
Broadway League.
The Rivet Gang (Producer). The Rivet Gang is a private group of individual angel investors, each of
whom made possible, through investment, several readings, as well as the productions of Empire in Los
Angeles, CA in 2003, and Stamford, CT in 2004. In continuous communication with the Empire team,
The Rivet Gang has been an integral part of the Musical's development, offering support both financially
and professionally, and creating invaluable connections within and outside the theater industry.
Vaccaro Investments-Sue Vaccaro (Producer). Sue has been in the entertainment industry for over
forty years. She has a degree in human relations, business law and a Masters in education. Ms. Vaccaro
has been involved in numerous entertainment ventures in television, film and stage, including working
with Rue McClanahan on her one-woman musical My First Five Husbands. Ms. Vaccaro runs several
highly successful investment companies including her own, Vaccaro Investments. She is also a partner in
Marquee Ventures which has several new musicals in development. Ms. Vaccaro has spent several years
on various boards for non-profit organizations. She is a member of the Broadway League of Theaters and
Producers. Sue is proud to have produced the revival of Smokey Joe's Caf, at the Landor Theater in London.
Article VI
COMPENSATION OF MANAGERS
Managers. The Managers are going to be the producers of the Musical. For the Production and for
services rendered in the development of the Musical, the Managers will be entitled to receive, for their
own account and not shared with the Members, the following producer compensation for their producing
services: An executive producer fee of $50,000, a producer's management royalty of up to three (3%)
percent of GWBOR (or Royalty Pool equivalent), a weekly producer's fee of not more than $2,500, and a
weekly cash office charge of $1,500 (to continue for six weeks after the close of the Production).
Prospective investors should note that the foregoing compensation shall be in addition to the Managers'
50% share of Adjusted Net Profits of the Company, and reimbursement of any sums advanced by the
Managers. Prospective investors should note that the Managers reserve the right to convert any sums
advanced or loaned by a Manager into Membership Interests in which case, such Manager and/or its
affiliates will become a Member of the Company.
In addition, the Managers and/or any person, partnership, corporation or other entity in which the
Managers are in any way interested may provide other services to the Company with all monies received
to belong solely to the Manager furnishing such equipment for its sole benefit and account.
Article VII
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Theater. It is expected that the Company shall enter into a theater license agreement with a theater in
New York's Times Square district. It is customary that theater license agreements provide that the theater
owner will get a weekly rent, expense reimbursement and a weekly royalty. Most often, weekly royalties
to the theater are not included in a royalty pool arrangement. The Company shall negotiate such a license
at terms within customary industry standards.
Other Personnel. Contracts have been or shall be entered into with other parties granting rights and/or
rendering services to the Company, and such contracts shall provide that such parties will be entitled to
receive a fixed fee, a percentage of the gross weekly box office receipts, and/or other rights and benefits
as the Manger and the parties shall mutually agree, in accordance with theater industry custom. The
Managers may or may not choose to make arrangements for payment of a percentage of gross weekly box
office receipts or on the basis of the royalty pool.
Developmental Productions. There were developmental productions of the Musical produced by third
parties prior to the Managers entering into an agreement with the authors. The Managers have agreed that
the financiers of such developmental productions of the Musical shall be entitled to receive, collectively,
with respect to any production of the Musical presented by the Company, a royalty of two (2%) percent of
gross weekly box office receipts (or the Royalty Pool equivalent). The financial enhancement has been
folded in to constitute part of the capitalization hereunder.
Article VIII
SECURITIES BEING OFFERED
The securities being offered hereunder have not been registered under the Federal and State securities
laws and therefore may not be resold unless registered or exempted from registration under applicable
laws and regulations. The Managers shall have no obligation to register the Membership Interests at any
time or to repurchase any of them from any investor.
The Members shall not have any personal liability for liabilities or obligations of the Company except to
the extent of their capital contribution, and the Members shall not be required to make any further or
additional contribution to the Company or to lend or advance funds to the Company for any purpose.
Notwithstanding anything to the contrary in the foregoing, (i) if any court of competent jurisdiction holds
that distributions (or any part thereof) received by a Member pursuant to the provisions hereof constitute a
return of capital and directs and requires that a Member pay such amount (with or without interest
thereon) to or for the account of the Company or any creditor thereof, such obligation shall be the
obligation of said Member and not of any other Member or the Company, and (ii) a Member shall
indemnify and hold harmless the Company and each Member from any liability or loss incurred by virtue
of the assessment of any tax with respect to such Member's allocable share of the profits or gain of the
Company.
Furthermore, investors do not have the right to assign all or any portion of his/her interest in the Company
unless the Managers give written consent to such assignment. The Managers are not obligated to give its
consent and may withhold such consent for any reason whatsoever. Such consent will in no event be
given if, in the opinion of counsel of the Company, granting such consent would or might place the
Company or any of its partners at risk for alleged violations of any applicable securities laws or
regulations or would or might alter the tax status of the Company. If the Managers grant such consent, it
may be pre-conditioned upon things such as full compliance with applicable laws and regulations and
payment to the Company of costs involved in granting the consent (including counsel fees).
The Managers' consent will also be required before anyone can be substituted as a Member of the
Company. Such consent may be withheld for any reason whatsoever.
Prospective investors should note that no market exists for the Company interests and none is expected to
develop.
LIMITED LIABILITY COMPANY MEMBER SIGNATURE PAGE
FOR MEMBERS
THE FOLLOWING SIGNS THE EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY
COMPANY OPERATING AGREEMENT AND AGREES TO BE BOUND BY THE TERMS
THEREOF.
Name of Subscriber: ___________________________
(Print Subscriber's Name)
___________________________
(Signature)
Signer's Name: ___________________________
Title/Capacity: ___________________________
Social Security or Tax ID #: ___________________________
Address: ___________________________
(Business address if
other than Individual) ___________________________
Telephone: ___________________________
Fax: ___________________________
Capital Contribution: $___________________________
-------------------------------------------------------------------------------------------------------------------------------
SUBSCRIPTION of _______________________ ACCEPTED on this ___ day of _____________,
2016.
THE MANAGERS OF EMPIRE THE MUSICAL WORLDWIDE, LIMITED LIABILITY COMPANY:
____________________________________ ______________________________________
Marquee Theatrical Ventures, Inc. Vaccaro Investments, LLC
By: Rick Stevens, Authorized Signatory By: Brenda Sue Vaccaro, Authorized Signatory
1
RIDER dated November 10, 2014 to the SDC AGREEMENT made as of
this 10th day of November 2014, by and between EMPIRE THE
MUSICAL WORLDWIDE LLC ("Producer"), c/o Bespoke Theatricals, 230
West 41st Street, Suite 1703, New York, NY 10036 and MARCIA
MILGROM DODGE ("Director/Choreographer") c/o Sendroff & Baruch
LLP, 1500 Broadway # 2201 New York, NY 10036 Attn: Mark D.
Sendroff, Esq. in connection with the Broadway Production
(including any Pre-Broadway presentation) of the dramatic-
musical work by CAROLINE SHERMAN AND ROBERT HULL ("Authors")
currently entitled "EMPIRE" (the "Play")
The parties do hereby agree as follows:
1. ENGAGEMENT. Producer hereby engages Director/Choreographer's
personal services as the director and choreographer of the
initial first-class production of the Play which is intended
to be a Broadway production, and subject to the terms herein,
additional productions of the Play set forth herein and
Director/Choreographer hereby accepts such engagement, upon
all of the terms and conditions herein set forth. It is
further agreed that as part of this agreement
Director/Choreographer shall also furnish her services for
any pre-Broadway production of the Play produced, co-
produced, or licensed by Producer, provided that (i) if SDC
requires any additional compensation for any such production
for reasons including but not limited to any lapse in time
between productions or additional rehearsal periods,
Director/Choreographer shall receive all such amounts
required by SDC and (ii) if Producer licenses the Play to a
not-for-profit regional theatre pre-Broadway, the terms of
Paragraph 7(b) shall control.
2. TERM OF EXCLUSIVE SERVICES. Director/Choreographer's
exclusive directorial and choreographic services shall
commence on the first day of rehearsals of the Broadway
production, and shall continue through the official opening
of the Play on Broadway. As the Broadway dates are pending
and will be subject to theatre availability,
Director/Choreographer agrees to keep Producer apprised of
any other potential professional commitments that might
conflict with the terms of this Agreement and both parties
agree to discuss such in good faith before
Director/Choreographer accepts any potentially conflicting
commitment. Producer agrees that provided
Director/Choreographer has informed Producer of any such
potential conflict prior to accepting it, she shall not be in
breach of this Agreement should the Broadway dates conflict
and both parties agree to work together to find mutually
agreeable alternate dates.
3. NATURE OF SERVICES. Director/Choreographer shall render all
services customarily rendered by the director and
choreographer of a first class musical stage production,
including but not limited to conducting auditions,
supervising and conducting rehearsals, attending and
supervising pre-opening performances of the Play, and
attending casting sessions and conferences with other
creative personnel. Following the official opening of the
Play on Broadway, Director/Choreographer shall from time to
time and at Producer's request, without extra compensation,
render her services to rehearse replacements, conduct brush
up rehearsals, and otherwise assist in maintaining the
quality of the Play; it being understood and agreed, however,
that the rendition of such services described in this
sentence shall be subject to her other professional
activities and that the failure to render such services shall
not be deemed a breach of this Agreement.
4. APPROVALS. Director/Choreographer shall have approval of the
following elements of each production of the Play: Cast,
Understudies, Scenic, Costume, Lighting, Projection, and
Sound Designers and their designs, Assistant/Associate
Director, Assistant/Associate Choreographer, Music Director,
Dance Arranger, Production Stage Manager and all replacements
thereof, said approval not to be unreasonably withheld or
delayed. Director/Choreographer shall have approval with
regard to deputy director/choreographer(s) of additional
companies Director/Choreographer elects not to personally
direct or choreograph (where Director/Choreographer's
direction and/or choreography is being replicated in whole or
part), said approval not to be unreasonably withheld or
delayed. Notwithstanding the above, Director/Choreographer
acknowledges that the approval of the Producer, and/or
Authors also may be required on any and all such personnel.
In the event Director/Choreographer does not exercise her
right of approval within five (5) business days (two [2] days
in the case of emergency) following receipt of Producer's
request for approval, she shall be deemed to have given
approval.
5. COMPENSATION. In full consideration of the faithful
performance of Director/Choreographer's services hereunder,
Producer agrees to pay to Director/Choreographer and
Director/Choreographer agrees to accept the following:
a. A non-returnable, non-refundable fee of Sixty Thousand
Dollars ($60,000), and an advance of Eighty Thousand Dollars
($80,000) recoupable against all royalties due Director in
excess of the minimum weekly guarantee ("MWG") set forth in
this Agreement. The fee and advance payable to
Director/Choreographer in connection with the Play shall be
paid: one-quarter (1/4) upon signing of this Agreement; one-
quarter (1/4) upon the first day of the first week of
rehearsals for the initial production; one-quarter (1/4) upon
the first day of the second week of rehearsals for the
initial production; and one-quarter (1/4) upon the first day
of the third week of rehearsals for the initial production.
The above notwithstanding, Director/Choreographer
acknowledges prior receipt of a payment of Twenty Thousand
Dollars ($20,000) which shall be credited against the signing
payment listed above.
b. Commencing with the first paid public performance of the
Play and continuing through the final performance of the
Play, a royalty equal to Two (2.00%) Percent of the Net
Adjusted Gross Weekly Box Office Receipts ("NAGWBOR") or
Company Share (in connection with touring productions) of the
Play. This percentage shall increase to Two and One Half
(2.5%) Percent of NAGWBOR or Company Share commencing the
week after 110% Recoupment, on a company by company basis, is
reached.
c. Anything else to the contrary notwithstanding, at
Producer's election, and provided that all other percentage
royalty recipients (other than stars and theatre) agree that
their contractual royalties may be so calculated, the royalty
payable to Director/Choreographer shall be based on weekly
net operating profit ("WNOP") in lieu of the royalty based on
NAGWBOR set forth in this Agreement, and in such event
Producer agrees to pay and Director agree to accept a MWG of
Three Thousand Five Hundred ($3,500.00) Dollars (pro-rated in
weeks of fewer or greater than eight (8) performances) as an
advance against Five (5.00%) percent of One Hundred (100%)
percent of WNOP through the four (4) week cycle in which 110%
Recoupment shall occur, increasing, on a company by company
basis, to Five and One Half (5.50%) percent of One Hundred
[100%] percent of WNOP after 110% Recoupment, increasing to
Six percent (6.00%) of One Hundred (100%) percent at 125%
Recoupment. WNOP and/or weekly operating losses of each
production shall be calculated in periods of four (4)
consecutive weeks, which may be extended to six (6) weeks to
accommodate the preview/opening period and the period
immediately prior to and including closing.
d. In connection with the Broadway and West End Productions,
Producer shall have the right to amortize one and one-half
percent (1.5%) of the Production Costs against WNOP until
Recoupment in the same manner as set forth in the production
agreement between the Producer and the Authors. All royalty
participants will be repaid on customary terms any royalties
deferred on a proportionate basis as a result of the
amortization out of ten percent (10%) of net profits until
they have recovered one hundred and five percent (105%) of
such deferred royalties ("the Clawback)". If the Play closes
before the Clawback is repaid, then the Clawback will be
repaid from thirty percent (30%) of the subsidiary right
income otherwise payable to Producer. Producer agrees that
during any amortization period, Director/Choreographer's MWG
shall be increased in an amount to be negotiated in good
faith at the time. In no event shall any other percentage
royalty participant receive more favorable amortization terms
than those provided to Director/Choreographer herein.
Director/Choreographer agrees to discuss in good faith
amortization for additional productions should the production
circumstances so warrant.
e. In the event that the Play's Authors and all other
percentage royalty recipients (other than stars and theatres)
agree to any waiver, reduction or deferral of the royalties
otherwise payable to them, Director/Choreographer shall in
good faith approve, such approval not to be unreasonably
withheld, being subject to the same waiver, reduction or
deferral in the same proportion agreed to by the Authors and
all other percentage royalty recipients (it being understood
and agreed that any percentage royalty recipient's waiver,
reduction, or deferral to the extent permitted by any
applicable collective bargaining agreement shall be deemed
full compliance with the provisions hereof). The foregoing
shall be subject to the rules of the SDC Basic Agreement and
shall be applicable with respect to the Broadway Production,
as well as any Additional Company of the Play hereunder.
f. Royalties due to Director/Choreographer shall be
accompanied by copies of weekly box office statements
certifying NAGWBOR, and any shares of NAGWBOR shall be
payable within 14 days following the close of the week to
which they apply, and any shares of WNOP shall be payable
within 28 days after the close of each four (or six, as
applicable) week cycle. Copies of all statements relating to
WNOP and Recoupment of the Play to which investors in the
Play are entitled shall be sent to Director/Choreographer at
the same time such statements are sent to such investors.
g. It is specifically agreed that the fees, advances and
royalties payable to Director/Choreographer hereunder include
any and all applicable minimum payments required by the SDC
Basic Agreement, provided, however, that in the event that
any such minimums exceed the payments described hereunder,
the applicable minimum payments required by the SDC Basic
Agreement shall prevail.
h. All payments made to Director/Choreographer and/or her
designee shall be subject to all applicable tax laws and
regulations.
6. DEFINITIONS. For the purposes of this Agreement, the terms
Net Adjusted Gross Weekly Box Office Receipts (NAGWBOR),
Weekly Net Operating Profits (WNOP), Weekly Breakeven,
Production Costs, and Recoupment, shall be defined as in the
limited partnership or other agreement used in connection
with the financing of the Broadway Production but in any
event shall be defined on a most favored nations basis with
any individual or entity receiving compensation in connection
with the Play and in a manner that is customary in the
commercial theatre in the location where the Play is being
produced.
7. DEVELOPMENTAL PREPARATION. Nothing contained in this
Agreement to the contrary, should Producer require
Director/Choreographer's services for a developmental stage
reading(s), lab(s) and/or workshop(s) of the Play prior to
the Pre-Broadway or Broadway production,
Director/Choreographer agrees to provide
Director/Choreographer's services for such at mutually
agreeable times. For such services Producer agrees to pay
Director/Choreographer and Director/Choreographer agrees to
accept additional compensation as follows:
a. For Workshops, Labs and Staged Readings: Two Thousand
Five Hundred ($2,500) Dollars per week for each such
reading, workshop, or Lab. It is agreed that Producer
shall sign an SDC Developmental Contract with
Director/Choreographer prior to any such workshop,
lab or reading.
b. Regional Productions: Director/Choreographer agrees,
subject to her availability, to direct and
choreograph any developmental regional productions
licensed to regional theatres under Producer's
authority on the best terms offered to directors at
the applicable regional theatre during the season the
production takes place. In addition, should the
regional theatre not provide Director/Choreographer
with a per diem of at least Fifty Dollars ($50),
Producer shall provide Director/Choreographer the
difference between the per diem offered by the
regional theatre and Fifty Dollars ($50). If any
other party receives enhanced travel and living terms
for a regional production, so too shall
Director/Choreographer.
Producer shall have the right but not the obligation to
require any such developmental work of the Play on times
mutually agreed between Director/Choreographer and Producer.
Producer further agrees that no credit for any such
payment(s) shall be taken against other fees due to
Director/Choreographer under this Agreement.
8. ADDITIONAL COMPANIES.
a. Provided Director/Choreographer's services are rendered as
herein set forth, that Director/Choreographer is the director
and choreographer of record on the Official Opening of the
Broadway Production of the Play, and provided
Director/Choreographer is not in material breach of this
Agreement, Director/Choreographer shall be offered the first
right to direct and choreograph all additional English
language first- or second-class companies of the Play
produced or co-produced by Producer, as well as any
productions under license or assignment from Producer in the
United States, United Kingdom, or Canada, except non-Equity
productions licensed by producer to third parties not under
control of Producer. Producer shall notify
Director/Choreographer in writing concerning any production
which Director/Choreographer has the right to direct and
choreograph, not less than ninety (90) nor more than one
hundred twenty (120) days prior to the scheduled or
anticipated rehearsal commencement date, and
Director/Choreographer shall notify Producer in writing
within fifteen (15) days of such notice from Producer as to
whether Director/Choreographer wishes to direct and
choreograph the production in question. Failure to elect to
direct and choreograph shall be deemed a declination of the
company in question, but will not affect
Director/Choreographer's right with respect to other
companies.
b. In connection with any such subsequent first-class sit down
company or any Production Contract Tour, which
Director/Choreographer has the right to direct and
choreograph hereunder and elects to personally direct and
choreograph, Producer shall pay to Director/Choreographer a
fee, advance, and royalty at terms no less than those stated
in Paragraph 5 above.
c. In connection with any first-class company which
Director/Choreographer has the right to direct and
choreograph hereunder, and Director/Choreographer declines to
personally direct and choreograph, but
Director/Choreographer's direction and choreography is
reproduced by an assistant(s) or associate(s) designated by
Director/Choreographer ("Associate(s)"),
Director/Choreographer shall receive the fee, advance, and
royalty as stated in Paragraph 5 above, reducible by the
mutually approved fee and any SDC required minimum
compensation payable to the Associate(s), but in no event
reducible to a floor of less than one-half
Director/Choreographer's otherwise payable compensation. The
engagement of any Associate(s) along with the employment
terms for the Associate(s) shall be subject to the mutual
approval of Producer and Director/Choreographer, not to be
unreasonably withheld by either party.
d. In connection with any second-class company or for any
SET/TIER tours, which Director/Choreographer has the right to
direct and choreograph hereunder and elects to either
personally direct/choreograph or to designate an
Associate(s), Director/Choreographer's compensation shall be
negotiated in good faith based upon the size and scope of the
production.
e. In connection with any company which Director/Choreographer
declines to direct/choreograph and further declines to
designate an Associate, no fee, advance or royalty or any
other compensation shall be due to Director/Choreographer and
for the avoidance of doubt, in such case,
Director/Choreographer's direction or choreography shall not
used in whole or in part. The above notwithstanding, in the
event the parties are unable to arrive at agreeable terms,
Director/Choreographer shall be offered any more favorable
terms Producer is prepared to offer to a third party
director/choreographer before such offer is made.
9. TRANSPORTATION AND LIVING EXPENSES. When
Director/Choreographer is required by Producer to travel/stay
more than 50 miles from the greater New York City area (or
Director/Choreographer's then-current residence if other than
New York City), Producer will provide round-trip economy
class air-transportation (not less than business class for
any flight over five hours) or ground transportation, or at
Producer's election, for nearby venues [i.e. between
Hartford, CT and Philadelphia]. Producer shall also reimburse
Director/Choreographer for taxi fare to and from airports or
train stations for such trips. Furthermore, for each night
away, Director/Choreographer shall receive a mutually
approved first-class hotel room or furnished one-bedroom
apartment plus a per diem of Seventy Five ($75.00) Dollars
for all North American cities except Los Angeles which shall
be One Hundred ($100.00) Dollars. For London, the per diem
shall be the equivalent of One Hundred Pounds Sterling
(100.00). All other international cities shall be
negotiated in good faith. Director/Choreographer shall
receive one-half (50%) per diem for any travel days of less
than seven (7) hour. Producer shall provide that
Director/Choreographer's apartment or hotel room is furnished
with high-speed internet at no expense to
Director/Choreographer. All other incidental hotel or
apartment charges beyond room and taxes shall be at
Director/Choreographer's own expense. A rental car
(including gas, parking at the hotel/theatre, and insurance
charges) will be provided if/when in Los Angeles, and such
other cities where it is mutually agreed that the use of an
automobile is reasonably necessary for local transportation.
Should any member of the creative team receive a more
favorable provision of any term contained in this paragraph,
the same shall be provided to Director/Choreographer. All
flights, accommodations, and/or cars provided for herein
shall be paid only if used and no financial remuneration
shall be provided in place of actual use.
10. BILLING.
a. With respect to each company of the Play for which
Director/Choreographer serves as such, Director/Choreographer
shall receive billing on the title page of theatre programs,
on house boards, in print advertising equal to or larger than
1/4 page, and whenever and wherever the Authors or any other
person (other than stars above the tile) appear in advertising
and publicity under the Producer's authority or control. Such
billing shall appear in substantially the following form:
"Directed and Choreographed by Marcia Milgrom Dodge"
b. Director/Choreographer's name shall appear on a separate
line, in the last position afforded all persons and entities
receiving billing. Director/Choreographer's billing shall not
be less than Fifty Percent (50%) the size of the non-artwork
title of the Play or Twenty Five percent (25%) of an artwork
title, but in no event less than the size, type, boldness,
manner and style of the Authors' billing, or any other person
(other than stars above the title). It is agreed that no one
shall be billed larger except star(s) above the title and no
one shall be billed the same except the Authors and star(s)
billed under the title.
c. Whenever Director/Choreographer is entitled to receive
billing and such billing is accorded in a so-called "billing
box", the size of the aforementioned credit shall be
determined by the size of the title in said billing box or as
a separate billing title. If credits are accorded in a so-
called "billing box", no one, except for stars above the
title, will receive credit outside of said "billing box". In
addition, Producer shall have the right to use so called "run-
on" or continuous-line format billing for any advertising
and/or publicity connected with the Play provided that all
those accorded billing are billed only in such "run-on"
billing (except only stars billed above the title).
d. The foregoing requirements shall not apply to the use of
extracts from critical reviews or awards where the names of
any persons associated with the Play are used in the context
of quotations from such reviews or reference to such awards,
or in congratulatory ads, or ads welcoming new actors to the
show.
e. With respect to each additional company for which
Director/Choreographer does not serve as director nor
choreographer, but in which Producer uses
Director/Choreographer's direction and choreography,
Director/Choreography shall receive the following billing
whenever the substitute director/choreographer is billed:
Originally Directed and Choreographed on Broadway
by
Marcia Milgrom Dodge
Said billing will appear on a line by itself
immediately above the substitute director's billing, in a
size no less than that afforded the substitute director.
f. Director/Choreographer's approved biography, the length and
format of which shall be at least equal to each party
consisting of Author, but in no event fewer than two hundred
(200) words, shall appear in the Playbill and souvenir program
(if any) for any and all productions where
Director/Choreographers' direction/choreography is used.
g. No casual or inadvertent failure to accord credit as
hereinabove provided shall be deemed a breach of this
agreement, unless same shall not be rectified prospectively as
soon as practicable after written notice to Producer.
11. PUBLICITY. Director/Choreographer grants Producer the
nonexclusive right to use and license others to use her name,
approved biography and approved reproductions of her likeness
(to the extent that Producer has control over the use of such
likenesses) in connection with any services that
Director/Choreographer may perform pursuant to the provisions
hereof and in advertising or exploiting the Play. At
Producer's request, but subject to Director/Choreographer's
reasonable availability, Director/Choreographer agrees to be
available for publicity and promotional appearances in
connection with the Play. Director/Choreographer will not
issue or authorize the issuance of any publicity regarding
the Play, Director/Choreographer's services hereunder, or
Producer, without Producer's consent, not to be unreasonably
withheld, provided that incidental, non-derogatory references
to the Play shall not be deemed to be issuance of publicity.
No additional compensation shall be due to
Director/Choreographer for participation in publicity and
promotional appearances except for the reimbursement of pre-
approved bona fide out-of-pocket expenses.
12. USES IN OTHER MEDIA.
a. Producer shall have the absolute and irrevocable right to
use, or to authorize the use, of Director/Choreographer's
contributions to the Play and the actual stage performances
of Producer's production(s) of the Play, for purposes of
print advertising and publicity, including use in
newspapers, magazines, theatre programs, souvenir
brochures, and any and all other print advertising and
publicity materials issued by Producer or with Producer's
consent and approval.
b. Producer shall also have the absolute and irrevocable right
to produce television, radio, mobile, and online
commercials which may incorporate Director/Choreographer's
contributions to the Play and the actual stage performances
of Producer's production(s) of the Play, and to authorize
others to do the same. Producer shall also have the
absolute and irrevocable right to authorize the filming,
videotaping, broadcasting, and/or recording of the Play for
purposes of advertising and publicizing the Play, including
but not limited to use on any and all broadcast and cable
television programs, on so-called "Tony Award" type
presentations, documentaries and "making-of' type specials
and programs, on internet websites, for display in
connection with group sales kiosks, airline and in-hotel
promotions, group sales and other marketing promotions, and
for purposes of advertising and publicity in any and all
other media now known or to be devised in the future. All
of the foregoing uses by Producer shall not require the
payment of any additional compensation or royalties to
Director/Choreographer, provided that neither Producer nor
any other creative personnel receives any compensation
therefore other than reimbursement of out-of-pocket
expenses or payments required by a union. Producer shall
also have the right to authorize a film or videotape of the
Play for the archives of the Library of the Performing Arts
at Lincoln Center with no additional compensation to
Director/Choreographer. None of such uses described in
this Paragraph 12, with the exception of the archival
recording, shall utilize more than fifteen (15) minutes of
the Play.
c. It is agreed that Producer shall furnish to
Director/Choreographer a copy of the b-roll footage to be
used for Director/Choreographer's own promotional and
archival uses provided that all applicable unions allow
such use and Director/Choreographer agrees to comply with
any union restrictions.
13. OWNERSHIP OF DIRECTOR/CHOREOGRAPHER'S CONTRIBUTIONS. As
between Director/Choreographer and Producer, all rights in
and to the direction conceived and created by the
Director/Choreographer in the course of the rendition of her
services hereunder shall become upon their creation and will
remain, the sole and exclusive property of
Director/Choreographer, provided however that with respect to
any company of the Play produced wholly or partially under
Producer's management, ownership, control or under license,
assignment, or lease of rights from Producer, or under
license, assignment or lease of rights from any entity
affiliated with Producer, Producer shall have a perpetual and
irrevocable license to utilize such direction, or to
authorize the utilization of such direction, for any company
of the Play from which Director/Choreographer receives a fee
and/or royalty (or waives same) pursuant to the terms of this
Agreement and the SDC Agreement. Any additional use or
license of the direction by Producer shall be subject to
further agreement between Producer and
Director/Choreographer. The foregoing is not intended to
alter, diminish, or affect, in any way, any of the Authors'
rights in the Play. Producer shall not authorize the
publication in any form of the stage directions of the
Director/Choreographer without Director/Choreographer's
written consent. Director/Choreographer reserves the right
to copyright such stage directions and choreography.
14. HOUSE SEATS/OPENING NIGHT.
a. Producer agrees to make available to
Director/Choreographer, at regular box office prices, three
(3) adjacent pair of house seats, located in center orchestra
rows 5 through 8, for each and every performance of the Play
directed by Director/Choreographer, except for performances
designated as Theatre Party Performances, Tony Voter
Performances, Benefit Performances, and Critics
Performance(s) when Director/Choreographer shall receive two
(2) such pairs. Said house seats shall be held until ninety-
six (96) hours preceding each performance. Said house seats
shall be maintained by the Director/Choreographer or
Director/Choreographer's representative who shall maintain
the proper records regarding disposition of said house seats
as required by any Governmental Authority having
jurisdiction.
b. For the Official Opening(s) of the Broadway, London, and
National Tour Production(s) of the Play,
Director/Choreographer shall receive, at no charge, a total
of eight (8) pairs, with two (2) pairs in the location
described in the preceding paragraph and the remaining six
(6) pairs in best available orchestra locations and sixteen
(16) complimentary invitations to the opening night party,
immediately following the performance (if one is held). A
table will be held for the sole usage of
Director/Choreographer and Director/Choreographer's guests at
all opening night parties, if any, such table to accommodate
up to sixteen (16) guests. It is specifically agreed that
the allocations of Opening Night tickets and party passes set
forth herein is intended to include tickets and passes for
Director/Choreographer's representatives (including, without
limitation, agents, managers, attorneys, etc.), and that
Producer shall not offer separate tickets or passes to such
persons. It is understood that all seating for the Official
Opening performance is at the sole discretion of Producer.
15. AGENCY/PAYMENTS. Sendroff & Baruch, LLP is hereby
irrevocably appointed by Director/Choreographer as
Director/Choreographer's exclusive representative in
connection with any and all productions of the Play and
hereby directs Producer or any third-party to pay all
advances, fees, royalties and any other sums due
Director/Choreographer hereunder (except for per diems and
reimbursements of expenses) as follows: 90% in the name of
and to Marcia Milgrom Dodge, 23 West 73rd Street, Apt 30, New
York, NY 10023 and 10% in the name of and to Sendroff and
Baruch, LLP, 1500 Broadway, Suite 2201, New York, NY 10036.
16. RIGHT TO AUDIT. Director/Choreographer shall have the right
to examine Producer's books and records relating to any
company of the Play from which Director/Choreographer is
entitled to receive compensation hereunder, not more than
once per the Producer's fiscal year, solely for the purpose
of verifying or ascertaining the amounts payable to
Director/Choreographer hereunder. Director/Choreographer
shall give reasonable advance notice to Producer of
Director/Choreographer's desire to examine such books and
records. Any such examination of Producer's books and records
shall take place during normal business hours and at
Producer's place of business, and shall be at the sole
expense of Director/Choreographer (unless an undisputed or
adjudicated error resulting in greater than a five percent
(5%) underpayment to Director/Choreographer is found, in
which case Producer shall bear the actual costs of audit).
17. ASSISTANT. Producer shall engage the services of two
assistants/associates to Director/Choreographer, who shall be
subject to the mutual approval of Director/Choreographer and
Producer. The assistant's services shall be engaged on a
full time, exclusive basis for both the Pre-Broadway (if
applicable) and Broadway productions of the Play, commencing
one (1) week prior to the commencement of rehearsals, and as
mutually determined needed for auditions and pre-production
dance work. It is agreed that the engagement of any
assistant shall be subject to Producer's ability to negotiate
employment terms for such assistant that are on industry
standard terms. For the avoidance of doubt, it is expected
that one assistant will be designated as an assistant
director and the other an assistant choreographer.
18. CAST ALBUM. Director/Choreographer shall have a right to
attend the recording of the cast album, if any, of the
Broadway Production of the Play, and in the event
Director/Choreographer elects to attend such recording,
Director/Choreographer shall receive a fee in the amount of
Ten Thousand Dollars ($10,000) provided the cast album is not
self-funded by Producer in which case, Director/Choreographer
shall receive no such fee.
19. SDC PENSION AND WELFARE: Producer agrees to contribute those
amounts required by SDC for pension and welfare payments in
addition to any other amounts payable hereunder due on all
companies directed by Director/Choreographer.
20. NO WAIVER. No waiver by either if the parties hereto of any
failure by the other party to keep or perform any covenant or
condition of this Agreement shall be deemed to be a waiver of
any preceding or succeeding breach of the same or any other
covenant or condition.
21. INSURANCE: Producer shall include Director/Choreographer as
an additional insured on all commercial general liability and
errors and omissions (if any) policies for the Play.
22. REPRESENTATIONS AND WARRANTIES.
a. Director/Choreographer represents, warrants and agrees
that:
i. Director/Choreographer is a member in good standing of
the SDC;
ii. Director/Choreographer has the full right and authority
to enter into this Agreement and to grant the rights
stated herein to Producer;
iii. Director/Choreographer is not subject to any
obligations or disabilities which will prevent or
interfere with the due performance of all of
Director/Choreographer's obligations hereunder;
iv. Director/Choreographer has not made, nor will he make,
any grant or assignment which will conflict with or impair
the complete enjoyment of the rights and privileges
granted to Producer hereunder; and
v. The direction, choreography, and other materials provided
by Director/Choreographer hereunder will be wholly
original with Director/Choreographer, will not infringe
upon or violate the copyright or other intellectual
property rights of any other person or entity, and will
not, to the best of Director/Choreographer's knowledge,
infringe upon or violate any other rights of any other
person or party.
b. Producer represents and warrants that it has the authority
to enter into this agreement and perform its obligation in
connection therewith.
c. Director/Choreographer will indemnify Producer and anyone
claiming from or through Producer against any and all claims,
liabilities, losses, costs, expenses (including reasonable
outside attorneys' fees and expenses), damages or recoveries
(including payments made in settlement with
Director/Choreographer's consent, not to be reasonably
withheld) caused by or arising out of or in connection with
any finally adjudicated breach of the representations and
warranties made by Director/Choreographer herein.
d. Producer will indemnify Director/Choreographer against any
and all liabilities, damages, costs, expenses (including
reasonable attorneys' fees and expenses), damages or
recoveries (including payments made in settlement with
Producer's consent, not to be reasonably withheld) caused by,
arising out of, or in connection with (i) any breach of
Producer's representations or warranties hereunder and/or
(ii) the production, presentation or other exploitation of
the Play, but excluding those liabilities, damages, costs,
expenses or other amounts caused by or arising out of or in
connection with Director/Choreographer's breach of
Director/Choreographer's representations and warranties
hereunder.
e. Neither party hereto shall make a settlement of any claim
as to which indemnification is, or will be, sought against
the other party, without the prior approval of the
indemnifying party, such approval not to be unreasonably
withheld.
23. NOTICES. Except as otherwise set forth herein, all notices
hereunder shall be in writing and shall be deemed to have
been duly given or made: if by hand, immediately upon
delivery and receipt acknowledged; if by Federal Express or
any other overnight delivery service, on the first business
day after dispatch with proof of delivery from the company
making such delivery; and if by certified mail, return
receipt requested, three (3) business days after delivery or
the return of the notice to sender marked "unclaimed." All
notices, requests and demands are to be given or made to the
parties at the following addresses (or to such other address
as either party may designate by notice in accordance with
the provisions of this paragraph):
To Director/Choreographer:
[please provide]
With a simultaneous copy to:
Sendroff & Baruch, LLP
1500 Broadway, Suite 2201
New York, NY 10036
Att. Mark D. Sendroff, Esq.
To Producer:
Empire The Musical Worldwide LLC
c/o Bespoke Theatricals
230 West 41st Street, Suite 1703
New York, NY 10036
Attn: Amy Jacobs
Except as otherwise set forth herein, notices shall be deemed
given when delivered to the address set forth above.
24. SDC. Director/Choreographer, at her sole expense, shall
remain during the entire term of this agreement a member in
good standing of the SDC. This Agreement shall be subject to
then current Collective Bargaining Agreement between the
Society of Stage Director/Choreographers and Choreographers,
Inc. and The League of American Theatres and Producers, Inc.
except to the extent that this Agreement provides more
favorable financial terms for Director/Choreographer in which
case the terms of this Agreement shall prevail. Any and all
disputes, claims or controversies arising out of or in
connection with this Agreement or breach thereof shall be
subject to arbitration pursuant to Article XV of the SDC
Agreement. It is understood and agreed that Section III (F)
of the SDC Agreement shall not be altered or deleted.
25. NO INJUNCTION. In the event of a breach of this Agreement
by Producer, Director/Choreographer's remedy shall be limited
to monetary damages, and in no event shall
Director/Choreographer be entitled to seek or obtain
injunctive relief, and any arbitrator appointed under this
Agreement shall be bound by this provision.
26. FORCE MAJEURE. If Producer shall be prevented from
producing any production of the Play within any applicable
time period set forth herein, or if any production produced
hereunder shall be interrupted due to fire, strikes, labor
disputes, governmental or court order, war or civil commotion
or any other cause beyond Producer's control, such prevention
or interruption shall not be deemed a breach of this
Agreement or a cause for forfeiture of Producer's rights
hereunder, and the applicable time periods set forth herein
shall be extended for the actual number of days of such
prevention or interruption plus thirty (30) days. Either
party shall have the right to terminate this Agreement if
force majeure events total over one hundred twenty (120)
days.
27. CONFIDENTIALITY. Producer and Director/Choreographer agree
to use all reasonable efforts to ensure that the terms and
conditions of this Agreement shall remain in strict
confidence, except for the applicable party's management,
legal counsel, accountants, investors, and professional
advisors.
28. MISCELLANEOUS.
a. Producer shall have no obligation to produce or present the
Play hereunder. In the event Producer elects not to so
produce or present the Play, Producer's sole obligation to
Director/Choreographer shall be the payment of any amounts
which, as of the date of such abandonment or termination
are due from Producer but unpaid as of such date.
b. This Agreement shall be governed by and construed in
accordance with the laws of New York State applicable to
contracts made and entirely performed therein regardless of
the actual place of execution and shall be operative
throughout the world.
c. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements (oral or
written) between the parties with respect to the subject
matter hereof and shall not be amended, modified, waived,
or supplemented other than in writing signed by the parties
hereto. No waiver shall be deemed a continuing waiver or a
waiver of any other provisions.
d. Nothing contained in this Agreement shall be deemed to
constitute a partnership or joint venture between the
parties.
e. Except as specifically permitted hereunder,
Director/Choreographer shall have no right to license or
assign any of Director/Choreographer's obligations
hereunder, except to a personal services corporation solely
owned and controlled by Director/Choreographer which will
provide Director/Choreographer's services hereunder
("Company"), and said assignment will be subject to Company
and Director/Choreographer's agreement to keep and perform
the terms and conditions of said this Agreement as they
apply to Director/Choreographer. Producer shall be
entitled to license or assign, in its sole discretion, any
and all of the rights and obligations hereunder to any
third party or affiliated entity formed to produce
production(s) of the Play provided such entity assumes all
obligations of Producer hereunder and provided that
Producer shall remain primarily liable therefore unless
license or assignment is to a Limited Partnership in which
Producer is a General Partner, a Limited Liability
Corporation in which Producer is a Managing Member or other
entity in which Producer has a controlling interest.
f. This Agreement may be signed in counterparts, all of which
taken together shall constitute a binding agreement, and
facsimile signatures shall be binding.
g. Paragraph headings are used herein for convenience only and
shall not be referred to in the interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
DIRECTOR/CHOREOGRAPHER PRODUCER
MARCIA MILGROM DODGE EMPIRE THE MUSICAL WORLDWIDE
LLC
_____________________________
____________________________
Marcia Milgrom Dodge By: Ricky Stevens,
Managing Member
THIS CONTRACT, MADE AND ENTERED INTO AS OF THE 13TH DAY OF
NOVEMBER, 2008 ("EFFECTIVE DATE") BY AND BETWEEN:
RICKY STEVENS MARQUEE VENTURES, INC.
whose address is:
240 West 44th Street, Helen Hayes Theatre
New York, New York 10019 hereinafter
referred to as "Producer," and
Sherman & Hull
(Caroline Sherman & Robert Hull)
c/o Lynne Walder, esq.
777 S. Harbour Island Boulevard, Suite 190
Tampa, FL 33602
Which owns and holds exclusively the rights to "Empire", as
assigned by Caroline Sherman and Robert Hull, herinafter referred
to as the "Authors"
W I T N E S S E T H:
WHEREAS, the Dramatists Guild of America, Inc. (the "Guild")
has promulgated this form of agreement known as the Approved
Production Contract for Plays (the "APC") which it has
recommended to its members as being fair and reasonable to both
authors and producers;
WHEREAS, Authors have written a certain musical play
entitled "Empire" (hereinafter referred to as the "Play"); and
WHEREAS, Authors alone are the sole owner of all rights in
and to the Play, and
WHEREAS, the Producer desires to acquire the sole and
exclusive rights to produce the Play in the United States, its
territories and possessions, including Puerto Rico, and Canada
(the "Territory") and to acquire Authors' services in connection
therewith;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
parties hereto agree as follows:
Producer and Authors hereby agree that all of the terms and
provisions of the APC in effect as of the above Effective Date are
hereby incorporated herein by this reference and made a part
hereof as if fully set forth herein. In addition, the parties
agree that Rider "A," attached hereto and made a part hereof,
shall comprise SECTIONS 22.01 through 22.22 (including Exhibit
A) of said APC and shall be part of this Contract. All
capitalized terms used in Rider A, not otherwise defined
therein, shall have the meanings given in the APC.
IN WITNESS WHEREOF, each of the parties has signed this
Contract as of the Effective Date of this Contract.
Date of
Date of
Producers Signing
For Sherman & Hull Signing
MARQUEE VENTURES, INC.
LYNNE WALDER, ESQ
By:
ACKNOWLEDGED BY:
Date of
Date of
Author Signing
Author Signing
CAROLINE SHERMAN .
ROBERT A. HULL By:
Rider A
ADDITIONAL TERMS
SECTION 22.01 Additional Production Terms Prevail. Wherever
and to the extent that the terms set forth in this ARTICLE XXII
differ from those set forth in the printed form of this Contract,
the terms of this ARTICLE XXII shall prevail.
SECTION 22.02 Developmental Production Rights. (a) Intentionally
omitted.
(b) Notwithstanding the provisions of Article IX,
First-class production rights hereunder shall be deemed to include
and relate to first-class "bus and truck" tours of the Play.
SECTION 22.03 Royalties.
(a) Increases in Authors' Royalty from four and one-
half percent (4.5%) of Gross Weekly Box Office Receipts to six
percent (6.0%) of Gross Weekly Box Office Receipts under Section
4.02 of this Contract shall take place the week following the
Performance Week in which one hundred percent (100%) of the costs
of presenting the relevant Company have been Recouped, with no
cross-collateralization of receipts between Companies.
(b) (i) With respect to any Company of the Play
hereunder (including any post-Broadway tour or additional United
States and/or Canadian Company of the Play) which is produced as a
"bus-and-truck" company, and for any and all Reno, Las Vegas,
Atlantic City, or other "fixed-fee" type bookings, Authors'
Royalties may be computed on the basis of "Company Share" in
lieu of Gross Weekly Box Office Receipts for such Company or
bookings, provided that all other royalties (other than
percentage payments to performers, theatre proprietors, and/or
local presenters) based upon a percentage of Gross Weekly Box
Office receipts are computed and paid in the same manner,
including any Producer's compensation which is customarily
calculated as a percentage of Gross Weekly Box Office Receipts.
(ii) For the purposes of this Contract, the term
"Company Share" shall be defined as follows:
(A) With respect to any so-called
"guaranteed" or other similar "fixed-fee" type bookings, the term
"Company Share" shall be deemed to include all receipts received
by Producer from such fixed fee payments, and (if
applicable) any percentage overages, plus any sums paid directly
to a star or stars by the theatre at which such Company of the
Play is presented and any other expenses borne by the local
presenter which are customarily paid by the Producer, less
reasonable arms length booking fees.
(B) With respect to any so-called
"four-wall," "sharing-term," or other similar type bookings, the
term "Company Share" shall be deemed to include all actual Gross
Weekly Box Office Receipts, after deduction of booking fees, and
any and all payments made by Producer for local facilities,
services, and personnel required to be engaged with respect to
such bookings, including but not limited to salaries of local
stagehands, local wardrobe attendants, local musicians, box office
and theatre personnel, local theatre rent and theatre operating
expenses, local advertising costs, and any and all other costs of
any kind or nature incurred locally in the city
in which such engagements of the Play are presented, all of
which shall be within customary industry parameters, at fair
market value and on an arms length basis.
(C) At the request of the Authors, Producer shall furnish
full details of any bookings of the Play for which royalties are
computed on the basis of "Company Share."
(iii) All Performances to which this Section 22.03(b) is
applicable shall be deemed "Fixed-Fee Performances" for the
purposes of this Contract and the terms of Section 4.02(d) hereof
shall apply except that to the extent of any conflict between the
terms of this Section and the terms of Section
4.02(d) of this Contract, the terms of this Section shall
prevail.
(iv) Producer shall have the option to pay royalties
based on a Royalty Pool on Company Share; once, however, Producer
elects for royalties for a particular Company to be
paid thus, Producer shall continue to do so for such Company for
its duration.
(c) In the event Producer chooses not to pay royalties
based on GWBOR or Company Share, it may elect to institute a
royalty pool as described in Exhibit A hereof ("Royalty Pool") and
its provisions are hereby incorporated herein and made part of
this agreement.
SECTION 22.04 House Seats. For each regular evening and
matinee performance of the Play in New York City, Producer shall
hold for each party constituting the Authors two (2) pairs of
adjoining house seats in rows five (5) through ten (10) of the
center orchestra section (except for preview performances,
benefit and theater party performances and subscription
performances, as well as Tony and Olivier voting periods, when
only one pair per each party constituting the Authors shall be
available). Such tickets shall be set aside and made available
for purchase by Authors at regular box-office prices until 6:00
p.m. of the second day prior to the scheduled evening
performances or until 12:00 noon of the second day prior to
scheduled matinee performances. For opening nights of the Play in
New York City, Producer shall accord each party constituting the
Authors for Authors' private use (A) ten (10) complimentary pairs
of seats in the orchestra section of the theatre and (B) six (6)
complimentary pairs of seats in other sections of the theater,
along with an equivalent number of opening night party
invitations. Authors agree to maintain and make available to the
Producer and the Attorney General of the State of New York such
records with respect to house seats as may be required to comply
with New York law and shall otherwise comply with the provisions
of SECTION 8.14 herein.
SECTION 22.05 Authors' Expenses. The hotel and travel
expenses to be paid pursuant to SECTION 8.04 by Producer to each
of the Authors for each day that Authors are required by
Producer to be away from their principal place of residence in
connection with any production of the Play hereunder, shall be (i)
first class hotel accommodations, (ii) One Hundred Dollars
($100) per day for living expenses in New York City, Seventy
Five Dollars ($75) elsewhere, and (iii) economy class round-trip
transportation expenses between Authors' place of residence and
the place where Authors' presence is required (business class if
such trip exceeds 3000 miles)at times to be mutually agreed
(subject to requirements of the applicable production), provided,
however, that in the event any other individual other than
star(s) receives a more favorable class of transportation
or per diem at the expense of the production, Authors shall also
be accorded such more favorable class of transportation and/or per
diem. Transportation carrier and time of departure shall be
determined by Producer. "Hotel and/or other living expenses"
shall be defined as the cost of hotel room and tax, any
incidental charges, including without limitation, charges for
local and long distance phone calls, laundry/valet, parking,
room service, in-room bar, etc., the cost of all meals and
entertainment, and local transportation, including transportation
to and from the theatre and/or rehearsal studio. In Toronto, each
party constituting the Authors shall be provided with a rental car
paid for by Producer plus reimbursement, upon presentation of
receipts, for parking charges.
SECTION 22.06 Producer's Share of Subsidiary Rights
Proceeds. Producer hereby elects to participate in the income
from the disposition of Subsidiary Rights to the extent set forth
in Producer's Alternative III in SECTION 11.03 of this Contract,
provided Producer shall be entitled to amend its selection of the
formula of participation to the fullest extent permitted under
this Contract, but in no event later than written notice of such
choice on or before 12 o'clock midnight on the first day or
rehearsal at which Producer requires all cast members of the Play
to be in attendance.
SECTION 22.07 Additional Warranties and Representations.
(a) The Authors hereby warrant, represent and covenant
that they, Sherman & Hull, are the sole authors of the Play and
the Play (except to the extent that it contains material which is
in the public domain) is wholly original and
has not been copied in whole or in part from any other work; the
Play is and will continue to be protected by copyright in the
United States and countries adherent to the Universal Copyright
Convention and the Berne Convention; the Play and the uses of
the Play will not violate, conflict with or infringe upon any
rights of any nature whatsoever of any person, firm or
corporation, subject to Section 22.07(c) below.
(b) The Authors represents and warrants that it has
not granted, assigned, encumbered or otherwise disposed of, nor
shall it at any time grant, assign, encumber or otherwise dispose
of any right, title or interest in and to the Play or any rights
which are in conflict with or inconsistent with the rights granted
hereunder, or by which any of the rights granted hereunder or the
full exercise of any or all such rights might
be diminished, encumbered or impaired. No prior grant of rights
in the Play will conflict with the rights granted Producer
hereunder and no rights in the Play shall be further granted
except as provided in this Contract until such time as all of
Producer's options have expired.
(c) The Authors represent and warrant that Authors'
right to use the title of the Play has not been affected by any
act or omission on their part and that to the best of Authors'
knowledge and belief they have the right to use said title as
herein contemplated. Additionally, the Producer acknowledges
that the subject matter of the play and its title are associated
with the Empire State Building, the representatives and owners of
which may take issue with its usage and henceforth the Producers
further acknowledge that the Authors have no liability in the
event that any legal or public action is taken by representatives
and owners of the Empire State Building.
(d) The Authors represent and warrant that the Play
does not and will not libel, slander or defame or violate,
infringe upon, conflict or interfere with any rights of privacy or
publicity or any other rights whatsoever of any third party nor
will it contain any unlawful matter.
(e) The Authors represent and warrant that, except for
material in the public domain, there exists no literary, dramatic
or musical material created by the Authors which is substantially
similar to the Play and as to which Producer has not acquired the
rights hereunder.
(f) The Authors represent and warrant that there is no
claim, action, suit or proceeding relating to the Play pending or
threatened before any court, administrative or governmental body.
GANG.
SECTI
ON
22.08
Devel
opmen
t
Agree
ment
With
The
RIVET
a) Without limitation of any of Producer's rights
herein, Producer acknowledges and agrees that Authors have entered
into an agreement with The Rivet Gang, pursuant to which Producer
has agreed to assume the following obligations of Authors for all
productions of the Play covered by this Agreement: Producer shall
pay to the Rivet Gang's investors two
percent (2.00%) royalty on a weekly basis, to be included in the
Royalty Pool. The Rivet Gang acknowledges that when the majority
of the other pool participants are in agreement to waiver their
royalty, the Rivet Gang will automatically agree to also waive
their royalty. Any waiver will be determined on a week by week
basis.
b) It is acknowledged and agreed that Producer has
assumed the obligations to the Initial Investors, ("Rivet Gang")
for all productions of the Play covered by this Agreement. It
is further agreed that the Producers will incorporate the royalty
listed in paragraph 22.08 a, into the budget of each production,
produced by the Producers, as recognition of past financial
support in the development and workshops of the Play by the Rivet
Gang. Such amount will be placed into a separate account and
shared among the separate past investors (or their representative
organization as a single entity) as Investor Shares, pro rata
with their initial investment. Each past investor will also be
guaranteed 1 (one) pair of complimentary opening night tickets,
for both the pre-Broadway out-of-town production, and the
Broadway production, and any parties, events, and special
celebrations created for the Play under the control of the
Producer.
c) In addition to the ten and six pairs of seats, and
equivalent number of party invitations, granted to each of the
Authors in Section 22.04 of this Agreement, it is acknowledged
and agreed that the Producer, in recognition of the Authors'
contributions to cultivating capital, will grant the Authors,
together, an additional complimentary 50 seats for opening
nights of the Play in New York City, along with an equivalent
number of opening night party invitations.
SECTION 22.09 Indemnification. The Authors will
indemnify and hold harmless Producer and all others claiming by,
through or under the Producer (the "Indemnitee"), in each case
against any and all claims, demands, suits, losses, costs,
expenses (including reasonable outside counsel fees and
disbursements), damages or recoveries (including any amounts
paid by the Indemnitee in settlement, provided that it consents
thereto in writing, which consent shall not be withheld
unreasonably, and provided that if The Authors shall fail to
notify the Indemnitee of its response within three (3) business
days after the actual receipt by The Authors of the Indemnitee's
notice of all material terms of a proposed settlement, then such
failure shall be deemed to signify consent) by reason of,
resulting from or arising out of any breach by The Authors of
any of the representations, warranties or covenants contained
herein. Producer agrees to indemnify and hold harmless The
Authors for any claims, demands, suits, losses, costs and expenses
(including reasonable attorney's fees and disbursements), damages
or recoveries (together, "Claims") arising from Producer's
exploitation of the rights granted Producer hereunder.
SECTION 22.10 Billing.
follows:
(a)
Authors
shall
receive
billing
substant
ially as
"EMPIRE"
Book, Music & Lyrics
by
Caroline Sherman & Robert Hull
(b) Notwithstanding the provisions of SECTION 8.10(b)
herein to the contrary, Authors shall receive billing credit in
all house boards, programs and in all advertising and publicity
under Producer's control, excluding so-called "ABC" (except Friday
and Sunday ABC's) and "teaser" ads and advertisements and
publicity where the only credits are for the title of the Play,
the name of the theatre, the names of stars and/or critics'
quotes. Notwithstanding the above, any special "congratulatory"
type advertisement announcing a nomination or award for "Best
Musical," or in the event of an award or nomination for separate
categories related to Authors' work, such as "Best Lyrics,"
shall include the Authors' names. The names of the Authors will
be in size at least fifty percent (50%) of the size of type,
style and prominence used for the title of the Play, and shall
be on one or two separate line(s) immediately below the title.
The Producer shall have the right to use a so-called "billing
box," provided that all other creative personnel other than stars
are accorded billing therein and if the Authors receive credit
therein then reference to the size of the title shall be deemed to
refer to the size of the title in said billing box.
(c) In addition to the producer credits to which
Producer is entitled in connection with productions of the Play
under its lease, license, management or control, if the Producer
has presented the Play for its Official Press Opening on
Broadway, the Producer shall also receive clear and prominent
credit on any and all playbills and publications of the Play in
the United States and Canada (and in the British Isles and any
other foreign territory if the Producer presented the Play
therein) authorized by the Authors and (subject to the Authors
best efforts to provide such credit) on any and all playbills
and publications outside of such territories and on any recorded
versions (including but not limited to motion picture and
television versions) of the Play authorized by the Authors
substantially as follows:
"Original Broadway Production by [TBD]"
(d) No casual or inadvertent failure to comply with
the foregoing credit provisions shall be deemed a breach of this
Contract unless such breach is not rectified prospectively
promptly upon written notice by the injured party to party
failing to accord the required credit.
(e) Producer shall accord the following credit in the
programs for the Play:
"Originally produced April 2003 at the Hudson Backstage
Theater by The Rivet Gang/Ronn Goswick/Shoestring
Productions/James Vukovich, and in September 2004, as a Benefit
for The NOEL Foundation in Stamford, CT by Peter de
Caprio/Shiseido Co./The Rivet Gang/Stamford Center for the Arts.
SECTION 22.11 Right of Assignment; Consent to Other
Producers. Producer shall have the right, without consent from
the Authors, to assign this Contract to any limited partnership
of which Producer is a general partner, a limited liability
company of which Producer is a managing member, a corporation of
which Producer is a principal owner, or a joint venture in which
Producer or a corporation of which Producer is a principal
owner. Producer shall have the right to assign this Contract
and/or license the rights granted hereunder to any other person or
entity with the Authors prior consent, not to be unreasonably
withheld. All assignees must assume in writing all of the
obligations to the Authors under the APC, and the Producer
should remain secondarily liable for a failure by any assignee to
honor its obligations.)
SECTION 22.12 Force Majeure. If Producer shall be
prevented from producing the Play within an applicable Option
Period, or if any production hereunder shall be interrupted, due
to epidemic, fire, action of the elements, strikes, labor
disputes, governmental order, court order, act of God, public
enemy, wars, riots, civil commotion, illness of stars or any other
cause beyond Producer's control, such as breakdown of the
theatre's heating or air-conditioning systems, or any other cause,
such prevention or interruption shall not be deemed a breach of
this Agreement or a cause for forfeiture of Producer's rights
hereunder, and the Option Period shall be extended for
the actual number of days of such prevention. Except with regard
to any event of force majeure caused by an illness of a star, no
one such delay due to force majeure shall extend beyond two (2)
months, nor shall the total of all delays due to force majeure
extend beyond four (4) months.
SECTION 22.13 Inspection of Books and Records. The Authors
shall have the right, during reasonable business hours and not
more than once a quarter in each calendar year, to examine
Producer's books and records pertaining to the Play for the
purpose of verifying any statements and/or ascertaining any
amounts which may be due to the Authors hereunder. Authors
shall have the right to make extracts from such books and
records, or copies thereof, and/or to cause an audit to be made
thereof at their own expense, for a period of two (2) years after
receipt of such statements. Producer or Producer's designee shall
have a similar inspection and copying right with respect to books
and records pertaining to the Authors' disposition of Subsidiary
Rights in the Play.
SECTION 22.14 Agency. Omitted.
SECTION 22.15 Notices. All notices to either party hereunder
shall be in writing and shall be deemed given when personally
delivered, or when mailed by first-class mail in the continental
United States (postage prepaid) or sent by facsimile transmission.
Notices by mail shall be addressed and sent to Lynne Walder,
Attorney At Law, 777 S. Harbour Island Blvd, Suite
190, Tampa, FL 33602. Copies of notices to the Producer also shall
be sent to Mark L. Beigelman, Esq., Beigelman, Feldman &
Associates, P.C., 100 Wall Street, 23rd Floor, New York, NY
10005.
SECTION 22.16 Supplemental Territories. The Producer shall have
the right to produce the Play in the following territories, with
each such numbered group of territories to be considered one
territory (the "Supplemental Territories"):
1. Germany/Austria
2. Belgium/Luxembourg/The Netherlands
3. France/Spain
4. Sweden/Norway/Finland/Denmark
5. South Africa
6. Asia, but excluding Japan, Korea and China
7. Japan
8. Korea
9. China
10. South America, Central America and Mexico
11. Australia/New Zealand
12. Russia and its territories
Producer shall have the right to produce in each Supplemental
Territory for a period commencing with the opening of the Play on
Broadway and continuing for eighteen (18) months thereafter.
However, Producer shall pay to the Authors one of the below
mentioned territory advances no later than six (6) months from
the opening of the Play on Broadway, one additional territory
advance no later than twelve (12) months from the opening of the
Play on Territory and one further additional territory advance no
later than eighteen (18) months from the opening of the Play on
Territory. In the event Producer licenses the right to produce
the Play in a Supplemental Territory during the period commencing
with the opening of the Play on Broadway and continuing for
eighteen (18) months thereafter, Producer agrees to pay to the
Authors an advance against Authors' royalties in such
Supplemental Territory equal to the greater of (i) 50% of
the advance received by the Producer from a licensee for such
Supplemental Territory or (ii) the following minimums:
1. Germany/Austria $10,000
2. Belgium/Luxembourg/The Netherlands $10,000
3. France/Spain/Italy $10,000
4. Sweden/Norway/Finland/Denmark $10,000
5. South Africa $10,000
6. Asia, including Korea, but excluding Japan and China
$10,000
7. Japan $10,000
8. Korea $15,000
9. China $15,000
10. South America, Central America and Mexico
$10,000.
11. Australia/New Zealand $10,000
12. Russia and its territories $10,000
Such amounts shall be due and payable the earlier of
(i) within ten (10) days of Producer's receipt of an advance for
any such additional territory from a licensee together with a
fully executed copy of the agreement or (ii) no later than
twelve (12) months following the opening of the Play on
Broadway.
Producer shall have the right to extend the right to produce
the Play in any Supplemental Territory for one further period of
one year by paying an advance to Authors against Authors'
royalties in such Supplemental Territory equal to the greater of
(i) $5,000 ($10,000 for Japan, $10,000 for Korea and
$7,500 for China) or (ii) 50% of the advance received by the
Producer from a licensee for such Supplemental Territory (if
applicable for the period of such one-year extension) for each
such one year period.
Producer shall pay the following Authors Royalties to the
Authors for the Supplemental Territory:
1. Germany/Austria - 6% going to 7% at 100% recoupment
2. Belgium/Luxembourg/The Netherlands - 6% going to 7%
at 100% recoupment
3. France/Spain - 6% (flat)
4. Sweden/Norway/Finland/Denmark - 6% (flat)
5. South Africa - 6% going to 8% at 100% recoupment
6. Asia, including Korea, but excluding Japan and China
- 6% going to 7% at 100% recoupment
7. Japan - 6% going to 7% at 100% recoupment
8. China - 6% going to 7% at 100% recoupment
9. South America, Central America and Mexico - 6% going to 7% at 100%
recoupment
10. Australia/New Zealand - 6% (flat)
11. Russia and its territories - 6% (flat)
Producer agrees to meaningfully consult with the Authors
regarding Producer's licensing of all additional territories.
SECTION 22.17 Omitted.
Section 22.18 Waiver of Advance Payments. The Authors
hereby agree to waive their right to receive the advance Payments
as described in Article III, Sections 3.01 to 3.04 of the APC.
Authors will receive a fee of $28,000 at such time as
$600,000 of the capitalization has been received.
SECTION 22.19 Stage Manager's Script. The script referred
to in SECTION 8.08 shall be a stage manager's script containing
information usually contained in such scripts, provided that the
delivery of such script does not constitute any statement of
position by Producer with respect to the use of the script.
SECTION 22.20 Holdback. Notwithstanding the provisions of
ARTICLE XI and ARTICLE XIII, the Authors shall not, without
first obtaining the prior written consent of Producer, allow the
whole or any part of the Play in any language to be exploited
during the run of the Play hereunder in any media now known or
hereafter created (other than print publication), including,
without limitation, (i) motion pictures and any other audio-
visual works of any kind (including, without limitation, musical
motion pictures, dramatic motion pictures, motion pictures in
series or serial form, live action motion pictures, animated
motion pictures, remake, sequel and/or prequel motion pictures)
anywhere in the world, (ii) television motion pictures, series and
mini-series anywhere in the world, (iii) sound recordings
anywhere in the world and (iv) live stage plays and musicals
anywhere in the Territory or the Additional Territories.
SECTION 22.21 Audio and Visual Promotions; Use of
Biographical Information.
(a) Notwithstanding anything herein to the contrary,
Producer shall have the right to authorize one or more radio
and/or television excerpts of the Play, not exceeding fifteen (15)
minutes each, for the purpose of advertising, promoting,
exploiting and publicizing the theater industry, performances of
the Play, any person performing in the Play and for use on
awards programs (including, but not limited to, the Antoinette
Perry Award program), without any additional approval by, or
payment to, the Authors, provided that Producer receives no
compensation therefrom other than reimbursement of out-of-pocket
expenses and, provided further, that Authors shall have right of
prior written approval of any change to be made to the script in
an extract produced under the control of the Producer, such
approval not to be unreasonably withheld.
(b)Each party comprising Authors hereby grants to Producer and
Producer's licensees and assigns the right to use Authors' names,
Authors' biography (or biographies), and Authors'
photographs and likenesses, and the title of, and excerpts from,
the Play for advertising, press and promotional purposes by any
means or medium, as either co-authors, co-composers, or co-
writers of the Play.
EXHIBIT A
ROYALTY POOL
DEFINITIONS:
"Standard Royalty" shall mean the percentage of Gross
Weekly Box Office Receipts attributable to Authors for the
purposes of this Royalty Pool. Authors may receive a "deemed"
royalty in the Royalty Pool in order to result in Authors' Share
hereinafter set forth. Such deemed royalty shall not affect
Authors' Minimum Weekly Guarantee.
"Pool Period" shall mean four (4) consecutive weeks
during which the Play is performed before a paying audience. This
period may be up to six (6) weeks or less than four (4) weeks if
at the beginning or the end of a run.
"Minimum Weekly Guarantee" shall mean an aggregate
amount equal to Four Thousand Five Hundred Dollars ($4,500) (pro
rated for weeks of fewer than eight (8) performances) to Authors
during the relevant period during which this Royalty Pool is in
effect, increasing to Five Thousand Five Hundred Dollars
($5,500) following 100% Recoupment. The Minimum Weekly
Guarantee is payable weekly in arrears directly to Authors. If
Producer elects to institute a Pool on Company Share, the
Minimum Weekly Guarantee shall be Six Thousand Dollars ($6,000),
increasing to Seven Thousand Dollars ($7,000) following 100%
Recoupment. All such Minimum Weekly Guarantees shall be
applicable against percentages of Company Share or Weekly Net
Operating Profits, as the case may be.
"Operating Profits" shall mean the excess of Gross
Weekly Box Office Receipts derived in a given Pool Period less
Running Expenses. Minimum Weekly Guarantee payments shall not be
charged as "Running Expenses" for purposes of determining
Operating Profits.
"Authors' Share" shall mean 15.56% of the Operating
Profits derived in a Pool Period through the week in which 100%
Recoupment occurs and 16.78% thereafter, on a company by company
basis.
"Recoupment" shall mean with respect to each company
separately, the point at which the aggregate of (i) all
Production Expenses (exclusive of bonds and security deposits) and
(ii) all Running and Other Expenses shall have been recovered, but
not pre-paid, as a result of the receipt by such
company of monies from any and all sources with respect to any
rights in or to the Play, whether the same is derived directly or
indirectly from the production and presentation of the Play,
including, without limitation, income from performances thereof,
and any other activities in which such company participates
hereunder, (such as the sale of souvenir programs) to the extent
any such revenues are paid to, or for the benefit of, such
company and any share of the net receipts received as a result
of the exploitation or other disposition of any subsidiary rights
relating to such production and presentation in which such
company and/or investors therein are entitled to participate.
"Production Expenses" shall mean the total actual,
out-of-pocket expenses, charges and disbursements of whatsoever
kind or nature other than those included in Running Expenses and
Other Expenses actually incurred in connection with the Play's
production prior to the official opening of said company
(without regard to whether such items are actually paid after
such opening), including, without limitation, advances and fees of
direction, choreographer, designers, general manager, company
manager, theater party representatives, production secretaries,
assistants, sets, curtains, drapes, costumes, properties,
furnishing, electrical and sound equipment, premiums for bonds
and insurance, deposits (to the extent not returned) with Actors'
Equity Association or other similar organizations which may be
required to be made according to customs or usual practices of
theatrical business, advances to Author, rehearsal charges and
legal and accounting expenses, advance publicity, theater costs
and expenses, transportation charges, cash office charges of up to
$2,500 per week in the case of productions on Broadway or $1,500
per week in the case of all productions other than productions on
Broadway (each of such $2,500 and $1,500 amounts shall be subject
to adjustment to account for increases in the Consumer Price
Index), transfer costs, reasonable travel and living expenses,
insurance premiums, out-of-town losses, if any, preliminary
advertising, advance royalties, taxes of whatsoever kind or nature
with respect to which refunds have not been paid, expenses for
replacement or substitution of any of
the foregoing items and any and all other expenses usually
included in the term "production expenses" in the theatrical
industry.
"Running Expenses" shall mean all actual, out-of-
pocket expenses, charges and disbursements of whatsoever kind or
nature other than those included in Production Expenses and
Other Expenses actually incurred in connection with the
operation of the Play, including, without limitation, royalties,
if any, based upon Gross Weekly Box Office Receipts payable to all
parties including Author, Producer, director, choreographer,
stars, designers, theater, compensation paid to the cast and
general manager, salaries of musicians, if any, and
miscellaneous stage help, transportation charges, post-opening
cash office charges of up to $2,500 per week in the case of
productions on Broadway or $1,500 per week in the case of all
productions other than productions on Broadway (each of such
$2,500 or $1,500 amounts shall be subject to adjustment to account
for increases in the Consumer Price Index), advertising, rentals,
miscellaneous supplies, legal and accounting expenses, theater
charges and operating expenses, and all other expenses and losses
of whatever kind actually incurred in connection with the
operation of the Play, and taxes of whatsoever kind or nature,
other than taxes on the incomes of the members or
limited partners of the financing entity formed to produce any
company of the Play. It is agreed that, for purposes hereof,
Running expenses shall also include an amortization amount equal
to Two (2%) Percent of the Production Expenses.
"Other Expenses" shall mean all actual expenses of
whatsoever kind or nature other than those included in
Production Expenses and Running Expenses actually and reasonably
incurred in connection with the operation of the business of
producing the Play, including, without limitation, commissions
paid to agents, monies paid or payable in connection with claims
for plagiarism, libel, negligence, etc. and contingent expenses
and liabilities, as well as unmatured expenses and liabilities,
and until the final determination thereof, Producer shall have the
absolute right to fix, as the reasonable amount thereof,
such sums as Producer, in its sole discretion, deems advisable.
POOL:
a) Notwithstanding the royalty provisions set forth in the
Rights Agreement, Producer shall have the right to pay to the
Authors and the Authors shall accept the following:
b) The Authors shall receive, on a weekly basis, the
Minimum Weekly Guarantee. The aggregate amount of the Minimum
Weekly Guarantee payments made in a given Pool Period shall be
deemed a non-returnable advance recoupable against Authors' Share
of the Royalty Pool for such Pool Period.
c) Upon the close of each such Pool Period, Producer shall
pay to the Authors the difference, if any, between Author's Share
for such Pool Period and the aggregate amount of
the Minimum Weekly Guarantee payments made to Authors in such
Pool Period.
d) Notwithstanding the foregoing, prior to Recoupment in
no event shall Authors receive in any Pool Period more than one
hundred (100%) of the Royalty that would have been payable to
the Authors for such Pool Period pursuant to the Rights
Agreement.
e) The payment of Author's Share and the rendering of
statements shall be made within fourteen (14) days from the end of
each Pool Period for productions of the Play in the United States
and Canada, and within twenty-one (21) days therefrom for all
other productions unless the payor is local, in which event,
payment will be made within fourteen (14) days. Minimum Weekly
Guarantees will be paid within seven (7) days after the close of a
week. All payments will be made to the Authors.
f) Authors Agree to allow Producers to Amortize the
Capitalization up to two percent (2%) of the final capitalization
during recoupment on a weekly basis until such time as the
investors have recouped one hundred (100%) of their
investment. One hundred (100%) of the deferred royalties will be
clawed back post-recoupment and Authors shall receive a pro rata
share of the net profits pool of 10% to pay back for deferrals.
If the Play closes before the clawback is repaid, then the
clawback will be paid from 30% of the subsidiary rights income
otherwise payable to the Producer.
6. Supplementing Section 7.01 of this Contract, all
payments will be accompanied by full and complete copies of weekly
operating statements and the Authors shall also receive copies of
all financial statements sent to investors.
Pool on Company Share. At Producer's option the Pool may be
applied to Company Share where Company Share is customary,
subject to payment of Authors' Author's Minimum Weekly Guarantee
as set forth herein.
Percentage of Operating Profits. At Producer's option,
Producer may pay to the Authors 15.56% of Operating Profits
through the week that Recoupment occurs and 16.78% thereafter on a
company by company basis, averaged over four (4) week periods. The
Minimum Weekly Guarantee shall be the same if a Royalty Pool
were utilized.
LICENSE AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") is entered into as of October
20, 2016, by and between Empire the Musical Worldwide, LLC, care of
Feldman, Golinski + Reedy PLLC, 100 Wall Street, 23rd Floor, New York,
NY 10005 ("Producer") on the one hand, and ESRT Empire State
Building, L.L.C., care of Empire State Realty Trust, Inc., One Grand
Central Place, 60 East 42nd Street, New York, NY 10165 ("Licensor") on
the other, with respect to that certain original live stage
dramatico-musical play entitled EMPIRE (the "Play").
1. GRANT OF RIGHTS:
a. On a worldwide basis and for a term commencing on the date
hereof until the expiration of the Play's term of (US) copyright, the
Licensor hereby grants to the Producer, on a non-exclusive, quitclaim
basis (that is, only to the extent that such rights are held by
Licensor), the rights (a) to present and perform the Play on the
stage before live paying audiences, as such may contain logos, marks,
trademarks and copyrightable expression including without limitation,
designs, architecture, photographs and drawings relating to or in
connection with the Empire State Building name and image (the
"Properties"), the creation of which building is the subject of the
libretto of the Play, (b) to exploit such Properties as is necessary
and reasonable, in all media, for the sole purpose of advertising,
marketing and publicizing productions of the Play (or Ancillary
Rights), provided that the Producer does not earn income, revenue or
other consideration solely in connection with such usage, and
provided that the Properties shall not be used to sponsor, endorse or
advertise any other or third party good, service, political party or
movement, body or entity (the foregoing not to include investors,
producers, presenters, venues and other parties presenting the Play,
in their capacity as such), and (c) to exploit such Properties in
connection with "Ancillary Rights", that is, as is necessary and
reasonable in the applicable medium so as to create, distribute,
sell, copy, perform or exhibit (i) print publications of the Play,
(ii) souvenir publications relating to the Play, (iii) mechanical or
digital sound recordings of casts/orchestras performing the score of
the Play, and (iv) commercial use products and other merchandising
sold in connection with and that relate to the Play (i.e., coffee
cups and t-shirts) (the "Merchandising"). The foregoing shall be
referred to herein as the "Rights". Nothing herein shall obligate
the Producer to produce the Play, or use, include or exploit any
Rights.
b. The Producer recognizes that the Properties are of great
value and a source of significant goodwill for Licensor and that any
trademark rights which arise from the use of the Properties pursuant
to this Agreement shall inure to the benefit of Licensor. Any use of
the Properties pursuant to this Agreement shall be of good and
reasonable quality and Licensee shall have the right to inspect such
uses to ensure such quality. Notwithstanding any contrary provision
herein, no usage of the Properties is permitted hereunder that might
in any way disparage any aspect of the Empire State Building or the
activities of its owner or operator.
c. Any use by the Producer of an image or visual
representation of the Empire State Building in connection with
Merchandising also must prominently display the name of the Play in
close proximity to such image or visual representation.
d. All programs for the Play shall contain the following
attribution in a location and manner typical for such attribution:
"The Empire State Building name and image are registered trademarks
of ESRT Empire State Building, L.L.C. and are used with permission."
IA. ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the parties' respective successors and assigns. A
party may assign this Agreement only in writing and provided that the
assignor remains secondarily liable for the discharge of obligations
assigned. The parties acknowledge that when the Producer's rights
in and to the Play expire, the Producer will assign this Agreement to
the authors of the Play, so that the authors may thereafter license
the Play worldwide, particularly stock and amateur productions.
2. PAYMENT AND CONSIDERATION.
a. Concurrent with the execution of this Agreement by the
Licensor the Producer shall pay the sum of Two Thousand Five Hundred
Dollars (US$2,500) to the Licensor the satisfaction of which such
obligation in its entirety shall be a condition precedent to the
discharge by the Licensor of any obligations hereunder.
b. With respect to the creation, sale, distribution, copying
or other use, inclusion or exploitation of the Properties in or in
connection with or related to any Merchandising, the Licensor shall
be paid Five Percent (5%) of 100% of gross retail sale price paid by
consumer(s) at source with no deduction or offset, but subject to
returns and not to include amounts paid as sales or other tax.
i. The Producer shall provide the Licensor with customary
statements and payments within 90 days following each calendar half
year accompanied by monies due. Not more than once every calendar
year and with two weeks' prior written notice, the Licensor may, at
its expense, engage a CPA to examine all of the books and records of
the Producer relating to Merchandising, at the Producer's regular
place of business, during business hours. The Producer will
reimburse the Licensor for the cost of such audit if any underpayment
is found (and shall pay the underpayment).
3. REPRESENTATIONS AND WARRANTIES: Producer warrants that (a) the
Play (including title) and exploitations of it contemplated hereunder
will not conflict with or infringe upon any rights whatsoever of any
person, entity or body, including, without limitation, privacy,
publicity, copyright, or trademark (b) the discharge by Producer of
the obligations hereunder and the performance of this Agreement shall
not violate the rights of any third party, (c) the Producer has the
right and authority to enter into this Agreement on behalf of the
Play and Authors, (d) the Producer is an entity in good standing in
all applicable jurisdictions and (e) any use of the Properties shall
comply with all applicable laws, rules and regulations . The
Producer shall indemnify, defend and hold harmless the Licensor and
its affiliates, subsidiaries, owners, investors, directors, managers,
members, stockholders, parents, successors, licensees, assigns,
employees, representatives and agents, and the principals and owners
of the foregoing in their capacity as such in the case of any
entities (the "Indemnified Parties"), from and against any claim,
suit, action, case, arbitration or litigation and any attendant
costs, fees, losses, damages, settlements or other liabilities
(collectively, "Liability") resulting from the Producer's breach
hereof, Producers negligence, Producer's misconduct, or any
performance, exhibition, presentation, copying, distribution or other
exploitation of the Play, the Properties or the Rights, including in
connection with Merchandising. The Indemnified Parties shall be
endorsed as additional insured parties on the general liability and
errors and omissions policies obtained in connection with the Play or
any production or other exploitation thereof.
4. RELEASE. To the extent that the Producer commits any act or
omission, including any acts or omissions prior to the date hereof,
related to the use of the Properties in connection with the Play or
Merchandising, which, but for the existence of this Agreement, would
give rise to a claim (a "Claim"), the Licensor hereby releases the
Producer and its successors in interest from any such Claim and any
attendant Liability.
5. REMEDIES: Remedies for any breach or alleged breach hereunder
shall be limited to an action at law for money damages, if any, and
in no event shall either party pursue or obtain equitable or
injunctive relief or otherwise impair, hamper, enjoin or restrain the
exhibition, performance, distribution, production or other
exploitation of the Play. This Agreement shall be governed by the
laws of the State of New York and the United States federal laws, and
any controversy or claim arising out of or in relation to this
Agreement, including the validity, construction or performance of
this Agreement, shall be resolved by arbitration in accordance with
the rules and procedures of the American Arbitration Association
(AAA) before a single arbitrator in New York City. The arbitrator
will be instructed to award attorney's fees and arbitration costs to
the prevailing party. The resultant decision shall be enforceable in
any court having jurisdiction over the party(s) to be bound thereby.
A party shall not be in breach hereof until such party has failed to
cure the breach in question within one (1) week of its receipt of
written notice thereof from the other party. A waiver of any breach
shall not waive a prior or subsequent breach.
6. NOTICES: Notices hereunder shall be in writing, via email (if
written confirmation may be obtained), facsimile (if written
confirmation may be obtained), personal delivery, overnight courier
or certified mail. The date and time of confirmation (for facsimile
or email), certification or delivery (if notice is by personal
delivery or overnight courier) shall be the date and time of such
notice, unless such date and time do not fall between 9:00 a.m. and
5:00 p.m. (recipient's time zone) on a business day, in which case
the date and time shall be deemed to be 9:00 a.m. on the next
business day.
7. MISCELLANEOUS: This Agreement contains the entire understanding
of the parties as to the subject matter hereof. If any provision of
this Agreement is invalid, void or unenforceable, the remainder of
this Agreement shall remain in full force and effect. This Agreement
may not be altered in any way except by a written instrument signed
by the parties. Previous agreements or communications regarding the
subject matter hereof are of no force or affect. This Agreement is
not a partnership between or joint venture by the parties hereto and
neither party is the agent of the other. This Agreement may be signed
in counterpart (and/or facsimile and/or PDF), each of which shall be
deemed an original, but all of which together shall constitute the
Agreement.
IN WITNESS WHEREOF each the parties hereto have executed this
Agreement as of date set forth above.
ESRT EMPIRE STATE BUILDING, L.L.C. EMPIRE THE MUSICAL
WORLDWIDE LLC
_______________________________
_______________________________
By: By:
Title: Authorized Signatory Title: Authorized
Signatory
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