Revenue Sharing Agreement

REVENUE SHARING AGREEMENT


Revenue Sharing Agreement (Agreement) made this 4th day of November , 1997, by and between NAMCO CYBERTAINMENT, INC., 877 Supreme Drive, Bensenville, IL 60106, a Delaware corporation ("Namco"), and, SKYLINE MULTIMEDIA ENTERTAINMENT, INC. and its wholly owned subsidiary, SKYLINE VIRTUAL REALITY, INC, d/b/a XS NEW YORK, 350 Fifth Ave., New York, NY 10118 a Delaware corporation ("Skyline") FEIN # 11-3182335 .


In consideration of the mutual covenants and conditions contained herein and other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


1. LICENSE. Skyline does hereby grant to Namco the full and exclusive right to operate traditionally coin operated Video, Pinball, Prize-Dispensing and Merchandise Games as defined by and operated by Namco in its company-owned locations (the Equipment) at the site located at Between 41st & 42nd Sts. and Broadway & 7th Ave., New York, New York (the "Premises" or "Location") according to the provisions specifically described in this Agreement.


2. TERM. This Agreement shall commence on November 4th, 1997 and remain in force and effect for a term of three years, terminating on November 4th, 2000 . Notwithstanding the foregoing, this agreement shall terminate concurrently with the surrender of the Location by Skyline if the Landlord of the Location elects to terminate the lease for the Location, other than as a result of a default thereunder by Skyline. This Agreement shall automatically renew itself for a period of one year and shall continue to do so thereafter upon the same terms and conditions unless either party delivers written notice to the other party by registered mail, return receipt requested, at least 30 days prior to the expiration of the initial or subsequent terms.


3. FEES. For and in consideration of the use of the Equipment, Skyline shall pay to Namco the following fees: (Which fees shall be paid retroactively from October 12, 1997.)


Video, Pinball, or other Amusement-Only Games - 14 (fourteen) percent of net revenues derived from the Equipment, with net revenues defined as gross sales less sales taxes.


Prize-Dispensing or "Merchandising" Games - 14 (fourteen) percent of net revenues, with net revenues defined as gross sales less sales taxes. To the extent Skyline requests Prize-Dispensing or Merchandise Games, redemption merchandise will be purchased and supplied at Skyline's sole cost and expense. The Location will award redemption merchandise to consumers as the result of their skillful and successful play of the games. The prizes and merchandise from these merchandising games shall be awarded solely on skill, with no element of chance involved.


All revenues and fees due shall be paid by Skyline to Namco as provided in Paragraph 7 below. Fees due to Namco shall be addressed: Attention: Thomas Savvides at Namco Cybertainment, Inc., 877 Supreme Drive, Bensenville, IL 60106.


4. PRICING. Namco shall have final approval, which shall not be unreasonably withheld, of the pricing structure for game play on all equipment including discounts, promotional programs, special or corporate events or any other specials that impact the equipment and revenues derived from the Equipment. Namco and Skyline agree to establish a discounted price per play for special events. In absence of Namco's approval to participate in any such promotions or events, the fee due Namco for events wherein XS New York is not 100% open to the public, shall be the higher of the following: (a) 14% of the revenues received on the Equipment during those hours; or (b) an amount equal to 14% of the average hourly revenues earned by the Equipment for hours opened 100% to the public during the preceding seven (7) days times the number of hours XS New York is not open 100% to the public.


5. OWNERSHIP. Skyline acknowledges that all of the Equipment is and shall always remain the sole and separate property of Namco. Skyline shall in no way pledge the Equipment or any part thereof or in any manner interfere with Namco's ownership of the Equipment. Namco will request the location to sign and file a UCC form or related form to further attest to Namco's ownership of the Equipment and Skyline shall comply. As for the Debit Card Equipment purchased by Namco, Skyline may purchase same at market value when this Agreement expires or is terminated.


6. EXCLUSIVE USE. Namco shall have the full and exclusive right to operate at the Premises traditionally coin operated Video, Pinball, Prize-Dispensing and Merchandise Games as defined by and operated by Namco in its company-owned locations. Skyline covenants, warrants, and agrees that during the term of this Agreement it will not operate or cause to be operated at the Premises any equipment other than Equipment installed and maintained by Namco, provided that Namco is able to provide such other equipment. Skyline certifies that it has no other contractual agreement with any person or entity regarding Equipment at the Premises and hereby agrees to indemnify and hold harmless Namco if Namco should be called upon to defend in a civil action with respect to such a pre-existing contractual relationship.


Namco has informed Skyline that two (2) games currently at the Premises violate Namco's exclusive use clause, specifically Home Run Derby/Pitcher's Duel and The Shocker. Namco offers to purchase these games at cost less depreciation from Skyline and operate them as part of the Equipment in the Premises. If this is not acceptable, then Namco demands they be removed from the Premises to cure Skyline's default of this provision.


7. COLLECTION. For purposes of this Agreement "operating week" shall mean seven (7) days beginning on Monday and ending on Sunday and "collection date" shall ...