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EXHIBIT 10.1
MARCO'S MEXICAN RESTAURANTS, INC.
LICENSE AGREEMENT
THIS AGREEMENT is made and entered into this 29th day of June, 1997,
by and between MARCO'S MEXICAN RESTAURANTS, INC., a corporation incorporated
under the laws of the State of Texas, whose principal place of business is
00000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (hereinafter referred to
as the "Licensor") and Xxxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, with an address
of 000 X. Xxx Xxxxxxxxx, #00, Xxxx Xxxx, Xxxxx 00000 (hereinafter referred to
as the "Licensees").
WITNESSETH:
WHEREAS, the Licensor holds the exclusive rights to a proprietary
system, which has been developed through significant expenditures of time,
skill, effort and money (hereinafter the "System") relating to the
establishment, development and operation of a MARCO'S MEXICAN RESTAURANT
(hereinafter the "Licensed Business" and signifying both licensed and
company-managed outlets) which offers Mexican-style dishes and bar service in a
full service casual dining restaurant environment;
WHEREAS, the System features a distinctive exterior and interior
design, decor, color scheme, fixtures and furnishings for the Licensed Business
restaurant, as well as uniform standards, specifications, methods, policies and
procedures for the restaurant operations, inventory and management control,
training and assistance, and advertising and promotional programs, all of which
may be changed, improved upon, and further developed from time to time;
WHEREAS, the Licensor, through its dedicated operations, marketing
methods, and merchandising policies, has developed the reputation, public image
and good will of its System and established a firm foundation for its
restaurant operations consisting of the highest standards of training,
management, supervision, appearance, services and quality of products;
WHEREAS, the System is identified by means of certain trade names,
service marks, trade marks, logos, emblems and indicia of origin, including the
xxxx XXXXX'X MEXICAN RESTAURANTS and logo, and such other trade names, service
marks, and trademarks as are now, and may hereafter be designated for use in
connection with the System (the "Proprietary Marks") which Proprietary Marks
are owned by the Licensor;
WHEREAS, the Licensor continues to develop, expand, use, control and
add to the Proprietary Marks and the System for the benefit of and exclusive
use by the Licensor in order to identify for the public the source of the
products and services marketed thereunder and to represent the System's high
standards of quality and service;
WHEREAS, the Licensees desire to operate a Licensed Business under the
System and the Proprietary Marks and to obtain a license from the Licensor for
that purpose;
WHEREAS, the Licensees hereby acknowledge that they have read this
Agreement and understand and accept the terms, conditions and covenants
contained in this Agreement as being reasonably necessary to maintain the
Licensor's high standards of quality and service and the
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uniformity of those standards at all facilities which operate pursuant to the
System and thereby to protect and preserve the goodwill of the Proprietary
Marks; and
WHEREAS, the Licensees understand and acknowledge the importance of
the Licensor's uniformly high standards of quality and service and the
necessity of operating the Licensed Business granted hereunder in strict
conformity with the Licensor's quality control standards and specifications.
NOW, THEREFORE, the parties, for and in consideration of the sum of
one dollar ($1.00) and the promises, undertakings and commitments of each party
to the other set forth herein, hereby mutually agree as follows:
X. XXXXX OF LICENSE
X. XXXXX. The Licensor hereby grants to the Licensees and Licensees
accept, upon the terms and conditions herein contained, the nonexclusive and
personal license, right and authority to operate a Licensed Business only at
the specific location located at 0000 Xxxxxx Xxxxxxx, Xxxxx Xxxx, Xxxxxxxxx
Xxxxxx, Xxxxx 00000 (the "Site") in strict conformity with the Licensor's
quality control standards and specifications which are a material part of the
System, which may be changed, improved and further developed from time to time.
The Licensees hereby accept such license and agree to perform all of its
obligations in connection therewith as set forth herein. The Licensees shall
pay to the Licensor the sum of Five Dollars ($5.00) for the term of this
License.
B. The Licensor reserves the right to:
1. Establish or grant licenses or franchises for restaurants providing
products or services under marks other than the Proprietary Marks;
2. Offer and sell food products, under the Proprietary Marks or any
other marks, through grocery stores, convenience stores or other retail
locations, or through mail order or catalogues;
3. Offer or sell food products under the Proprietary Marks at special
events;
4. Offer or sell any products or services, under the Proprietary Marks
or any other marks, through any other channel of distribution; and
5. Establish company-owned Licensed Businesses or license or franchise
other Licensees or franchisees to establish Marco's Mexican Restaurants at any
other site or location that the Licensor deems appropriate.
C. RESERVATION OF CERTAIN RIGHTS. Subject to Section I.B. hereinabove,
the Licensor reserves the right to establish Licensed or Franchised Businesses
at any site the Licensor deems appropriate. The Licensor also reserves the
right to sell related products and services in other channels of distribution.
The Licensor reserves the right to offer, grant and support licenses or
franchises in similar and other lines of business. The Licensor makes no
representation or warranty to the Licensees that there will be any right to
participate in such licenses or franchises.
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II. TERM AND RENEWAL
A. INITIAL TERM. Except as otherwise provided herein, the term of this
Agreement shall commence on June 29, 1997 and terminate on June 29, 1998,
provided, however, that if the Licensees lease their business premises and in
the event that the lease agreement for the Licensees' business premises is
terminated prior to the expiration of the term of this Agreement, then the
Licensor may, at its option, terminate this Agreement. Notwithstanding the
foregoing or anything in this Agreement to the contrary, this Agreement shall
terminate if the Licensees do not maintain ownership of the restaurant and/or
the assets located at the Site.
B. RENEWAL. Upon expiration, this License may be extended in the sole
discretion of the Licensor upon terms and conditions to be determined by the
Licensor, which shall include the payment of royalties by the Licensees to the
Licensor.
III. DUTY OF LICENSOR
To provide the Licensees with written specifications for the operation
of the Licensed Business (the "Manuals"). The Manuals are confidential and
remain the property of the Licensor. The Licensor may modify the Manuals from
time to time.
IV. DUTIES OF LICENSEES
A. COMPLIANCE WITH SYSTEM. The Licensees understand and acknowledge
that every detail of the appearance and operation of the Licensed Business in
compliance with the System is critical to the Licensor, the Licensees and other
Licensees in order to:
1. Develop and maintain high and uniform operating standards;
2. Increase the demand for the products and services sold by
Licensees, and
3. Protect the Proprietary Marks and the System, and the Licensor's
trade secrets, reputation and goodwill.
B. LEASEHOLD IMPROVEMENT REQUIREMENTS. Before commencing any
construction or improvements of the Licensed Business in compliance with the
System is critical to the Licensor, the Licensees, and other Licensees in order
to:
1. The Licensees shall have received the Licensor's prior written
approval of the
2. The proposed improvements must be in compliance with all applicable
local and state laws, regulations and ordinances including all zoning, signage
and parking requirements;
3. The Licensees shall be responsible for all reasonable expenses
pertaining to the Licensor's review and approval of the proposed improvements,
the Licensor's monitoring and review of the construction and the final
inspection of the improvements;
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4. The Licensees shall employ a qualified general contractor or such
other qualified person as the Licensor may approve in its absolute and sole
discretion for the purposes of supervising the construction and ensuring the
completion of all construction or leaseholder improvements. The Licensees shall
submit to the Licensor a statement identifying the general contractor and
describing the general contractor's qualifications and financial
responsibility; and
5. The Licensees shall obtain all liquor and business licenses,
permits and certifications required for lawful construction of improvements and
ongoing operation of the Licensed Business (including, without limitation,
zoning, access, variances, health and safety, and fire requirements) and shall
certify in writing to the Licensor that all such licenses, permits and
certifications have been obtained.
6. The Licensees shall completely construct any improvements at and
equip, at Licensees's expense, the Licensed Site in accordance with Licensor's
standards and specifications. Licensor and its agents shall have the right to
inspect the construction at all reasonable times. Licensees shall promptly
notify Licensor of the date of completion of construction and thereafter the
Licensor may conduct a final inspection of the restaurant and its premises.
C. SUPERVISION REQUIREMENTS. The Licensed Business shall at all times
be under the direct on-premises supervision of the Licensees or an operating
manager ("Operating Manager") designated by Licensees and approved by Licensor.
D. TRAINING. The Licensees shall cause their employees, which shall
include the Licensees, their Operating Manager and any person subsequently
acting as the manager of the Licensed Business to attend and complete, to the
Licensor's satisfaction, such special programs or periodic training as the
Licensor may require in writing from time to time. The Licensees shall pay all
reasonable expenses incurred by the Licensor and/or its employees in connection
with such programs and training and shall be responsible for all expenses of
their employees associated therewith, including meals, lodging, travel and
wages.
E. OPERATION OF THE LICENSED BUSINESS. The Licensees shall use the
Licensed Business solely for the operation of the Licensed Business that is
licensed hereunder in strict accordance with the Licensor's specifications;
shall keep the Licensed Business open and in normal operation for such minimum
hours and days as the Licensor may from time to time prescribe; and shall
refrain at all times from using or permitting the use of the premises of the
Licensed Business for any other purpose or activity other than as contemplated
by this Agreement without first obtaining the written consent of the Licensor.
F. MAINTENANCE. The Licensees shall continuously maintain the Licensed
Business in the highest degree of sanitation, repair and condition as the
Licensor may reasonably require, and in connection therewith shall make such
additions, alterations, repairs and replacements thereto (but not without the
Licensor's prior written consent) as may be required for that purpose,
including without limitation, such periodic redecorating, replacement of
inventory and replacement of obsolete signs, fixtures or materials as the
Licensor may reasonably direct, or as otherwise required under the lease for
the Licensed Business.
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G. HEALTH AND SAFETY STANDARDS. The Licensees shall meet and maintain
the highest safety standards and ratings applicable to the operation and
management of the Licensed Business and its personnel as the Licensor may
reasonably require.
H. WORKING CAPITAL. The Licensees shall meet and maintain sufficient
levels of working capital for use in connection with the management and
operation of the Licensed Business as the Licensor may reasonably require.
I. REFURBISHMENT. At the Licensor's request, the Licensees shall
refurbish the Licensed Business, at their expense, to conform to the then
current Licensed Business design and decor, trade dress, color scheme and
presentation of trademarks and service marks consistent with the design
concepts then in effect for new Licensed Businesses licensed to operate under
the System, including, without limitation, such structural changes, remodeling,
redecoration and other modifications to existing improvements as deemed
necessary by the Licensor.
J. COMPLIANCE WITH UNIFORM STANDARDS. The Licensees shall operate the
Licensed Business in conformity with such uniform methods, standards and
specifications as the Licensor may from time to time prescribe to ensure that
the highest degree of product quality and service is uniformly maintained. The
Licensees shall conduct their business in a manner which reflects favorably at
all times on the System and the Proprietary Marks. The Licensees shall at no
time engage in deceptive, misleading or unethical practices or conduct any
other act which may have a negative impact on the reputation and goodwill of
the Licensor or any other Licensees or franchisees operating under the System.
Pursuant to this ongoing responsibility, the Licensees agree;
1. To maintain in sufficient supply as the Licensor may require and
use at all times only such products and supplies as conform to the Licensor's
standards and specifications, and to refrain from deviating therefrom without
the Licensor's prior written consent;
2. To sell or offer for sale only such products and services as meet
the Licensor's uniform standards of quality and quantity which have been
expressly approved for sale in writing by the Licensor in accordance with the
Licensor's methods and techniques; to sell or offer for sale all approved
items; to refrain from any deviation from the Licensor's standards and
specifications for serving or selling such products or services; and to
discontinue selling and offering for sale any such products or services as the
Licensor may, in its sole discretion, disapprove in writing at any time;
3. To lease or purchase and install at the Licensees' expense all
fixtures, furnishings, signs and equipment as the Licensor may reasonably
specify from time to time, and to refrain from installing or permitting to be
installed on or about the Licensed Business without the Licensor's prior
written consent any fixtures, furnishings, signs, cards, promotional
literature, equipment or other items not previously specifically approved as
meeting the Licensor's standards and conforming to the Licensor's
specifications;
4. To purchase and maintain any and all signs for use at the Licensed
Business, whether for interior or exterior use, in conformity with the
Licensor's quality control standards and specifications;
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5. To employ such minimum number of employees as may be prescribed by
the Licensor and to comply with all applicable federal, state and local laws,
rules and regulations with respect to such employees;
6. To maintain a competent, conscientious staff; and
7. To maintain all licenses and permits in good standing.
K. PURCHASE AND LEASE OF PRODUCTS, EQUIPMENT AND SUPPLIES. Licensees
shall lease or purchase all products, initial inventory, equipment, supplies
and other materials required for the operation of the Licensed Business solely
from approved suppliers who shall have proved, to the continuing reasonable
satisfaction of the Licensor, the ability to meet the Licensor's then current
standards and specifications for such products and related items. Such approved
suppliers must meet all of the Licensor's specifications and standards as to
content, quality, appearance, warranty, performance and serviceability and must
adequately demonstrate their capacity and facilities to supply the Licensees's
needs for an effective and efficient operation of the Licensed Business as well
as all Licensed Businesses operating under the Licensor's System.
L. INSPECTION OF PREMISES. The Licensees shall permit the Licensor or
its agents or representatives to enter upon the premises of the Licensed
Business at any time for purposes of conducting inspections, taking photographs
and interviewing employees and customers. The Licensees shall cooperate fully
with the Licensor's agents or representatives in such inspections by rendering
such assistance as they may reasonably request. Upon notice from the Licensor
or its agents or representatives, and without limiting the Licensor's other
rights under this Agreement, the Licensees shall take such steps as may be
necessary to immediately and diligently correct any deficiencies detected
during such inspections, including, without limitation, immediately ceasing and
preventing the further use of any products, equipment, inventory, advertising
materials, supplies or other items that do not conform to the Licensor's then
current specifications, standards or requirements. In the event the Licensees
fails or refuses to correct such deficiencies, the Licensor shall have the
right to enter upon the premises of the Licensed Business, without being guilty
of trespass or any other tort, for the purpose of making or causing to be made
such corrections as may be required, at the sole expense of the Licensees.
M. PROPRIETARY METHODS. The Licensees acknowledge and agree that the
Licensor has developed certain products, services, operational systems and
management techniques and may continue to develop additional products and
proprietary methods and techniques for use in the operation of the Licensed
Business which are all highly confidential and which are trade secrets of the
Licensor. Because of the importance of quality control, uniformity of product
and the significance of such proprietary products in the System, it is to the
mutual benefit of the parties that the Licensor closely control the
dissemination of this proprietary information. Accordingly, the Licensees
agrees that in the event such information and techniques become a part of the
System, the Licensees shall comply and strictly follow these techniques in the
operation of its business and shall purchase from an approved source designated
by the Licensor any supplies or materials necessary to protect and implement
such techniques.
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N. DEVELOPMENT OF THE MARKET. The Licensees shall at all times use its
best efforts to promote and increase the sales and consumer recognition of the
products and services offered at the Licensed Business pursuant to the System,
to effect the widest and best possible distribution of the Licensor's products
and services from the Licensed Business and to devote its best efforts in
controlling the Licensed Business, its managers, assistants and employees
O. DISPLAY OF PROPRIETARY MARKS AND LOGOS. The Licensees shall display
the Licensor's Proprietary Marks and logos at the Licensed Business, on
uniforms and otherwise in the manner prescribed by the Licensor. The color,
design and location of said displays shall be specified by the Licensor and may
be changed from time to time in the sole discretion of the Licensor. The
Licensees shall not display any signs or posters at the premises or elsewhere
without the prior written consent of the Licensor,
P. OTHER REQUIREMENTS. The Licensees shall comply with all other
requirements set forth in this Agreement or as the Licensor may designate from
time to time.
V. PROPRIETARY MARKS
X. XXXXX OF LICENSE. The Licensor hereby grants the Licensees the
right and license to use the Proprietary Marks only in connection with the
operation of its Licensed Business and the provision of services and products
to its customers. The Licensor represents with respect to the Proprietary Marks
that: (1) the Licensor has, to the best of the Licensor's knowledge, all right,
title and interest in and to the Proprietary Marks in the United States; (2)
the Licensor has taken all steps which it deems reasonably necessary to
preserve and protect the ownership and validity of such Proprietary Marks in
the United States; and (3) the Licensor will use and license the Licensees and
other Licensees to use the Proprietary Marks only in accordance with the System
and the operating standards and quality control specifications attendant
thereto which underlie the goodwill associated with and symbolized by the
Proprietary Marks.
B. CONDITIONS FOR USE. With respect to the Licensees' use of the
Proprietary Marks pursuant to the license granted under this Agreement, the
Licensees agree that:
1. The Licensees shall use only the Proprietary Marks designated by
the Licensor and shall use them only in the manner required or authorized and
permitted by the Licensor.
2. The Licensees shall use the Proprietary Marks only in connection
with the right and license to operate the Licensed Business granted hereunder.
3. During the term of this Agreement and any renewal hereof, the
Licensees shall identify themselves as licensees and not the owner of the
Proprietary Marks and shall make any necessary filings under state law to
reflect such status, In addition, the Licensees shall identify themselves as
licensees of the Proprietary Marks on all invoices, order forms, receipts,
business stationary and contracts, as well as at the Licensed Business on any
sign required by the Licensor which shall be conspicuously displayed to
customers.
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4. The Licensees' right to use the Proprietary Marks is limited to
such uses as are authorized under this Agreement, and any unauthorized use
thereof shall constitute an infringement of the Licensor's rights and grounds
for termination of this Agreement.
5. The Licensees shall not use the Proprietary Marks to incur or
secure any obligation or indebtedness.
6. The Licensees shall not use the Proprietary Marks as part of
business or other legal name.
7. The Licensees shall comply with the Licensor's instructions in
filing and maintaining the requisite trade name or fictitious name
registrations, and shall execute any documents deemed necessary by the Licensor
or its counsel to obtain protection for the Proprietary Marks or to maintain
their continued validity and enforceability.
8. In the event that the Licensees becomes aware of any infringement
of the Proprietary Marks or if the Licensees' use of the Proprietary Marks is
challenged by a third party, then the Licensees are obligated to immediately
notify the Licensor, and the Licensor will have the sole discretion to take
such action as it deems appropriate. If the Licensor determines that no action
to protect the Proprietary Marks is necessary, than the Licensees may take any
action they deem necessary to protect their own interest, at their own expense.
If it becomes advisable at any time in the sole discretion of the Licensor to
modify or discontinue the use of any name or xxxx and/or use one or more
additional or substitute names or marks, the Licensees shall modify or
discontinue the use of any such name or xxxx, and use such additional or
substitute name or xxxx, and shall be responsible for the tangible costs (such
as replacing signs and materials) of complying with this obligation. In the
event that litigation alleging that the Proprietary Marks infringe a third
party's rights is instituted or threatened against the Licensees, the Licensees
shall promptly notify the Licensor and shall cooperate fully in defending or
settling such litigation.
C. ACKNOWLEDGEMENTS. The Licensees expressly understand and
acknowledge that:
1. The Licensor is the exclusive owner of all right, title and
interest in and to the Proprietary Marks and the goodwill associated with and
symbolized by them;
2. The Proprietary Marks are valid and serve to identify the System
and those who are licensed to operate a Licensed Business in accordance with
the System;
3. The Licensees' use of the Proprietary marks pursuant to this
Agreement does not give the Licensees any ownership interest or other interest
in or to the Proprietary Marks, except the nonexclusive license granted herein;
4. Any and all goodwill arising from the Licensees' use of the
Proprietary Marks and/or the System shall inure solely and exclusively to the
Licensor's benefit, and upon expiration or termination of this Agreement no
monetary amount shall be assigned as attributable to any goodwill associated
with the Licensees' use of the System or the Proprietary Marks;
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5. The license and rights to use the Proprietary Marks granted
hereunder to the Licensees are nonexclusive, and the Licensor thus may: (a)
itself use, and grant franchises and licenses to others to use, the Proprietary
Marks and the System, (b) establish, develop, license and franchise other
systems, different from the System licensed to the Licensees herein, without
offering or providing the Licensees any rights in, to or under such other
systems; and (c) modify or change, in whole or in part, any aspect of the
Proprietary Marks or the System, so long as the Licensees' rights thereto are
in no way materially harmed thereby;
6. The Licensor reserves the right to substitute different trade
names, trademarks and service marks for use in identifying the System, the
Licensed Business and other Licensed or Franchised Businesses operating
thereunder, all of which shall become Proprietary Marks;
7. The Licensor shall have no liability to the Licensees for any
senior users that may claim rights to the Proprietary Marks; and
8. The Licensees shall not register or attempt to register the
Proprietary Marks in the Licensees' name or that of any other person, firm,
entity or corporation.
VI. CONFIDENTIAL MANUALS
A. COMPLIANCE. In order to protect the reputation and goodwill of the
Licensor and to maintain uniform standards of operation in connection with the
Proprietary Marks, the Licensees shall conduct its business in strict
compliance with the operational systems, procedures, policies, methods and
requirements prescribed in the Licensor's Manuals and any supplemental
bulletins, notices, revisions, modifications or amendments thereto, all of
which shall be deemed a part thereof.
B. USE. The Licensees agree to immediately adopt and use the programs,
services, methods, standards, materials, policies and procedures set forth in
the Manuals, as they may be modified by the Licensor from time to time. The
Licensees acknowledge that the Licensor is the owner or licensee of all
proprietary rights in and to the System, and the Manuals, and any changes or
supplements thereto
C. CONFIDENTIALITY. The Licensees shall at all times treat the
Manuals, any other manuals created for or approved for use in the operation of
the Licensed Business and all of the information contained therein as
proprietary and confidential, and shall use all reasonable efforts to maintain
such information as confidential. The Manuals must remain on the premises of
the Licensed Business at all times.
D. TRADE SECRETS. The Licensees acknowledge, know and agree that
designated portions of the Manuals are "trade secrets" owned and treated as
such by the Licensor.
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E. ACCESS. The trade secrets must be accorded maximum security
consistent with the Licensees' need to make frequent reference thereto. The
Licensees shall strictly limit access to the Manuals to employees who have a
demonstrable and valid need to know the information contained therein in order
to perform their duties. The Licensees shall strictly follow any provisions in
the Manuals regarding the care, storage and use of the Manuals and all related
proprietary information.
F. DUPLICATION. The Licensees shall not at any time, without the
Licensor's prior written consent, copy, duplicate, record or otherwise
reproduce in any manner any part of the Manuals, updates, supplements or
related materials, in whole or in part, or otherwise make the same available to
any unauthorized person.
G. LICENSOR'S PROPERTY. The Manuals shall at all times remain the sole
property of the Licensor. Upon the expiration or termination of this Agreement
for any reason, the Licensees shall return to the Licensor the Manuals and all
supplements thereto.
H. UPDATES OR REVISIONS. The Licensor retains the right to prescribe
additions to, deletions from or revisions to the Manuals, which shall become
binding upon the Licensees upon being mailed or otherwise delivered to the
Licensees, as if originally set forth therein. The Manuals, and any such
additions, deletions or revisions thereto, shall not alter the Licensees'
rights and obligations hereunder.
I. MASTER SET. The Licensees shall at all times insure that their set
of the Manuals is kept current and up-to-date, and in the event of any dispute
as to the contents of the Manuals, the terms contained in the master set of the
Manuals maintained by the Licensor at the Licensor's headquarters shall be
controlling.
J. REPLACEMENT FEE. If The Manuals are lost, stolen or destroyed, the
Licensees shall pay the costs to replace each volume of the Manuals.
VII. CONFIDENTIAL INFORMATION
A. CONFIDENTIAL RELATIONSHIP. The parties expressly understand and
agree that the relationship established between the Licensor and the Licensees
by this Agreement is one of confidence and trust, and that as a result, the
Licensor will be disclosing and transmitting to the Licensees certain trade
secrets and other confidential and proprietary information concerning various
aspects of the Licensees' operation of the Licensed Business, its methods of
operation, techniques and all proprietary systems, procedures and materials
relevant thereto pursuant to the System and this Agreement.
B. OBLIGATIONS OF LICENSEES. In order to preserve and protect the
trade secrets and the confidential and proprietary information (the
"Confidential Information") which are disclosed to the Licensees during the
term of this Agreement, the Licensees agree that:
1. The Licensees shall treat and maintain the Confidential Information
as confidential both during the term of this Agreement and thereafter;
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2. The Licensees shall use the Confidential Information only for its
operation of the Licensed Business under this Agreement;
3. The Licensees shall disclose the Confidential Information only as
necessary to their employees or agents who have a demonstrable and valid need
to know the Confidential Information and not to anyone else;
4. The Licensees shall restrict disclosure of the Confidential
Information to only those of their employees or agents who are directly
connected with the performance of work requiring knowledge thereof and shall
disclose only so much of the Confidential Information as is required to
enable those employees or agents to carry out their assigned duties;
5. The Licensees shall advise their employees or agents of the
confidential nature of such information and the requirements of nondisclosure
thereof; and
6. The Licensor and the Licensees shall conduct a review to determine
which employees will have access to the Confidential Information and to the
Manuals. The Licensees shall not disclose any Confidential Information or
provide access to the Manuals to such employee or agent until that person
executes a nondisclosure agreement in a form prescribed by the Licensor,
acknowledging the confidential and proprietary nature of the Confidential
Information and agreeing not to disclose such information during the course of
employment or thereafter. The Licensor shall be designated a third-party
beneficiary of such nondisclosure agreements with the right to enforce its
provisions independently of the Licensees.
C. CONFIDENTIAL INFORMATION DEFINED. Any and all information,
knowledge, know-how, systems, programs and other methods and techniques which
the Licensor designates as confidential shall be deemed Confidential
Information for purposes of this Agreement, except information which the
Licensees can demonstrate had become a part of the public domain through
publication or communication by others or which, after disclosure to the
Licensees by the Licensor, becomes a part of the public domain through
publication or communication by others. It is understood and agreed that
information, improvements to the System or techniques prepared, compiled or
developed by the Licensees, its employees or agents during the term of this
Agreement and relating to the Licensed Business, whether developed separately
or in conjunction with the Licensor, shall be considered as part of the
Confidential Information. The Licensees hereby grant to the Licensor an
irrevocable, worldwide, exclusive, royalty-free license, with the right to
sub-license such information, improvement or technique.
D. PROTECTION OF INFORMATION. The Licensees acknowledge that they have
knowledge of confidential matters, trade secrets, management and training
techniques, operational, accounting, quality control procedures, programs and
other methods developed by the Licensor through and in its System which, for
purposes of this Agreement are owned by the Licensor and which are necessary
and essential to the operation of the Licensed Business, without which
information the Licensees could not efficiently, effectively and profitably
operate the same. The Licensees further acknowledges that the unique and novel
combination of "know how" and methods developed by the Licensor and licensed to
the Licensees by the Licensor for the operation of the Licensed Business are
peculiar to the Licensor. The Licensees shall take all steps necessary, at
their own expense, to protect the Confidential Information and shall not
divulge the same either during or upon the termination of this Agreement
without the prior written consent of the Licensor.
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E. REMEDIES. The Licensees acknowledge that in addition to any
remedies available to the Licensor under Section XII hereunder, the Licensees
agree to pay all court costs and reasonable attorneys' fees incurred by the
Licensor in obtaining specific performance of, a temporary restraining order
and/or an injunction against violation of the requirements of this Section VII.
F. COMMUNICATION WITH CUSTOMERS. In order to maintain the high
standards of quality control throughout the System, the Licensor reserves the
right to use test customers from time to time, without prior notification to
the Licensees, in order to determine whether the Licensed Business is
maintaining high standards of quality, integrity, safety, appearance and
customer service.
VIII. ACCOUNTING, INSPECTIONS AND RECORDS
A. MAINTENANCE OF BOOKS AND RECORDS. The Licensees shall maintain
during the term of this Agreement and shall preserve for not less than seven
(7) years from the date of preparation full, complete and accurate books,
records and accounts in accordance with the System and in the form and manner
prescribed by the Licensor in the Manuals or otherwise in writing from time to
time.
B. FINANCIAL AND RELATED REPORTING. During the term of this Agreement,
the Licensees shall, at the Licensees' expense, submit to the Licensor an
annual financial statement which shall include an income statement and balance
sheet prepared in accordance with generally accepted accounting principles and
copies of federal and state tax returns for the Licensees within ninety (90)
days of the completion of the fiscal year of the Licensees. Each annual
financial statement and tax return shall be compiled by an independent
certified public accounting firm and signed by the Licensees attesting that the
statement is true and correct. The Licensor also reserves the right to require
the Licensees to submit to the Licensor certified financial statements for any
period or periods of any fiscal year, which shall be certified by the
Licensees' accounting firm and attested to by the Licensees. In addition,
Licensees shall submit exact copies of the Licensees' invoices for goods
purchased from suppliers and copies of the Licensees' operating reports to its
landlord, immediately following the Licensor's request for such information.
C. OTHER SUBMISSIONS. The Licensees shall also submit to the Licensor,
for review and auditing, such other forms and reports, including annual
accounting of local advertising expenditures and any and all other information
and data, as the Licensor may reasonably designate, in the form and at the
times and places reasonably required by the Licensor, upon request and as
specified from time to time in the Manuals or otherwise in writing, at any time
during the term of this Agreement.
D. INSPECTION. The Licensor or its designated agents shall have the
right at all reasonable times to examine and copy, at its expense, the books,
records, receipts and tax returns of the Licensees.
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IX. ADVERTISING
Recognizing the value of advertising, and the importance of the
standardization of advertising programs to the furtherance and protection of
the Proprietary marks, goodwill and public image of the System, the parties
agree as follows:
SUBMISSION AND APPROVAL OF PROMOTIONAL AND MARKETING MATERIALS. All
promotional and marketing materials to be used by the Licensees in any medium
shall be presented in a dignified manner and shall conform to such standards
and requirements as the Licensor may specify from time to time in the Manuals
or otherwise. The Licensees shall submit to the Licensor for its prior written
approval, samples of all promotional and marketing material in whatever form
that the Licensees desire to use at least ten (10) days before their intended
use. The Licensor shall approve, disapprove, or revise such materials. The
Licensees shall comply with all revisions to said promotional and marketing
materials which the Licensor may require prior to approving said promotional
and marketing materials. The Licensees shall not use any advertising or
promotional plans or materials which have not been approved in writing by the
Licensor, and the Licensees shall cease to use any plans or materials promptly
upon notice by the Licensor. Failure by the Licensees to obtain the prior
written approval of the Licensor for all proposed advertising shall be deemed a
default of this agreement in accordance with Section XII.A hereof.
X. INSURANCE
A. PROCUREMENT. The Licensees shall maintain in full force and effect
during the terms of this agreement, at the Licensees' expense, an insurance
policy or policies protecting the Licensees and the Licensor, and their
officers, directors, partners and employees, against any loss, liability,
personal injury, death, property damage or expense whatsoever from fire,
lightning, theft, vandalism, malicious mischief and the perils included in the
extended coverage endorsement, arising or occurring upon or in connection with
the Licensed Business or the leasehold improvements to the Licensed Business,
or by reason of the operation or occupancy of the Licensed Business, as well as
such other insurance applicable to such other special risks, if any, as the
Licensor may reasonably require for its own and the Licensees' protection.
B. MINIMUM COVERAGE. Such policy or policies shall be written by an
insurance company satisfactory to the Licensor in accordance with the standards
and specifications set forth in the Manuals or otherwise in writing, and shall
include, at a minimum (except as additional coverage and higher policy limits
may reasonably be specified from time to time by the Licensor in the Manuals or
otherwise in writing) the following:
1. Comprehensive general liability insurance, including contractual
liability, broad form property damage, personal injury, advertising injury,
product liability, completed operations and independent contractors coverage,
and fire damage coverage in the amount of at least One Million Dollars
($1,000,000), or such higher amount as required by the lease, combined single
limit, and naming the Licensor and any landlord as an additional insured in
each such policy or policies;
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2. Worker's compensation and employer's liability insurance as well as
such other insurance as may be required by statute or rule of the state in
which the Licensed Business is located and operated;
3. Fire, vandalism and extended coverage insurance with primary and
excess limits of not less than the full replacement value of the Licensed
Business and its furniture, fixtures and equipment; and
C. CONSTRUCTION COVERAGE. In connection with any leasehold
improvements, renovation, refurbishment or remodeling of the premises of the
Licensed Business, the Licensees shall cause the general contractor to maintain
with a reputable insurer comprehensive general liability insurance (with
comprehensive automobile liability coverage for both owned and non-owned
vehicles, builder's risk, product liability and independent contractors
coverage) in at least the amount of One Million Dollars ($1,000,000) with the
Licensor named as an additional insured, and worker's compensation and
employees liability insurance as required by state law. Copies of the
Certificates of Insurance for such coverage shall be provided to the Licensor.
D. CERTIFICATES. The Licensees shall submit to the Licensor, original
or duplicate copies of all policies and policy amendments. The evidence of
insurance shall include a statement by the insurer that the policy or policies
will not be canceled or materially altered without at least thirty (30) days
prior written notice to the Licensor.
E. INDEPENDENCE OF COVERAGE REQUIREMENTS. The Licensees' obligation to
obtain and maintain the foregoing policy or policies in the amounts specified
shall not be limited in any way by reason of any insurance which may be
maintained by the Licensor, and the Licensees' performance of that obligation
shall not relieve them of liability under the indemnity provision set forth in
Section XVII of this Agreement.
F. FAILURE TO PROCURE. Should the Licensees for any reason fail to
procure or maintain the insurance required by this Agreement, as revised from
time to time for all Licensees by the Manuals or otherwise in writing, the
Licensor shall have the right and authority (without, however, any obligation)
to immediately procure such insurance and to charge the same to the Licensees,
which charges, together with a reasonable fee for the Licensor's expenses in so
acting, including all attorneys' fees, shall be payable by the Licensees
immediately upon notice.
G. THIRD PARTIES. The Licensees shall ensure that all third parties
with which the Licensees conduct business, are properly insured.
XI. TRANSFER OF INTEREST: OPERATION BY LICENSOR
A. TRANSFER BY LICENSOR. The Licensor shall have the right to assign
this Agreement, and all of its rights and privileges hereunder, to any person,
firm, corporation or other entity provided that, with respect to any assignment
resulting in the subsequent performance by the assignee of the functions of
the Licensor, (i) the assignee shall, at the time of such assignment, be
capable of performing the obligations of the Licensor hereunder, and (ii) the
assignee shall expressly assume and agree to perform such obligations.
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Specifically, and without limitation to the foregoing, the Licensees
expressly affirm and agree that the Licensor may sell its assets, its rights to
the Proprietary Marks and the System outright to a third party; may engage in a
private placement of some or all of its securities; may merge, acquire other
corporations, or be acquired by another corporation; may undertake a
refinancing, recapitalization, leveraged buy-out or other economic or financial
restructuring; and, with regard to any or all of the above sales, assignments
and dispositions, the Licensees expressly and specifically waive any claims,
demands or damages arising from or related to the loss of said Proprietary
Marks (or any variation thereof) and/or the loss of association with or
identification of "Marco's Mexican Restaurants" as the Licensor hereunder.
Nothing contained in this Agreement shall require the Licensor to
remain in the restaurant business or to offer the same products and services,
whether or not bearing the Licensor's Proprietary Marks, in the event that the
Licensor exercises its rights hereunder to assign its rights in this Agreement.
B. TRANSFER BY LICENSEES.
The License granted hereunder is personal to Licensees and is
nontransferable and nonassignable. Notwithstanding the foregoing, Licensees
shall have the right to transfer this Agreement to an affiliated corporation or
entity in which Licensees have a controlling voting and ownership interest with
the written consent of the Licensor. Such corporation or entity must enter into
an agreement acknowledging the terms, conditions and restrictions contained in
this Agreement, including the limitations on transfer of the License. Any
corporation or entity not 100% beneficially owned by Licensees shall be subject
to standard licensing fees and royalties which the Licensor receives or may
receive in the future from licensees using the System. Licensees, except as
specifically provided above for affiliated entities, shall have no right to
license, sublicense, franchise or otherwise grant any person or entity any
rights with respect to the use of the System. Neither Licensees nor any
permitted transferee shall encumber or grant any lien with respect to his or
their rights arising under, or interest in, this Agreement and the License. Any
purported assignment or transfer, by operation of law or otherwise, not having
the written consent of the Licensor shall be null and void and shall constitute
a material breach of this Agreement, for which the Licensor may then terminate
this Agreement without opportunity to cure pursuant to Section XII.A. of this
Agreement.
C. NON-WAIVER OF CLAIMS. The Licensor's consent to a transfer of any
interest in the Licensed Business shall not constitute a waiver of any claims
it may have against the transferring party, and it will not be deemed a waiver
of the Licensor's right to demand exact compliance with any of the terms of
this Agreement, or any other agreement to which the Licensor and the transferee
are parties, by the transferee.
D. OPERATION OF THE LICENSED BUSINESS BY LICENSOR. In order to prevent
any interruption of the business of the Licensed Business and any injury to the
goodwill and reputation thereof which would cause harm to the Licensed Business
and thereby depreciate the value thereof, the Licensees hereby authorize the
Licensor, and the Licensor shall have the right, but not the obligation, to
operate said Licensed Business for so long as the Licensor deems necessary and
practical, and without waiver of any other rights or remedies the Licensor may
have under this Agreement, in the event that: (i) any of the Licensees'
principals, shareholders or partners is absent or incapacitated by reason of
illness or death and that the Licensees are not, therefore, in the sole
judgment of the Licensor, able to do the business licensed hereunder, or (ii)
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any allegation or claim is made against the Licensed Business, the Licensees or
any principals, directors, shareholders, partners or employees of the
Licensees, involving or relating to misrepresentations or any fraudulent or
deceptive practice. If, as herein provided, the Licensor elects to temporarily
operate the Licensed Business on behalf of the Licensees, the Licensees hereby
agrees to indemnify and hold the Licensor harmless from any and all claims
arising from the acts and omissions of the Licensor and its representatives.
XII. DEFAULT AND TERMINATION
A. DEFAULT WITH NO OPPORTUNITY TO CURE. The Licensees shall be deemed
to be in default and the Licensor may, at its option, terminate this Agreement
and all rights granted hereunder, without affording the Licensees any
opportunity to cure the default, effective immediately upon receipt of notice
from the Licensor to the Licensees, upon the occurrence of any of The following
events:
1. If the Licensees become insolvent or makes a general assignment for
the benefit of creditors, or if a petition in bankruptcy is filed by the
Licensees or such a petition is filed against and consented to by the
Licensees, or if the Licensees are adjudicated bankrupt, or if a xxxx in equity
or other proceeding for the appointment of a receiver of the Licensees or other
custodian for the Licensees' business or assets is filed and consented to by
the Licensees, or if a receiver or other custodian (permanent or temporary) of
the Licensees' business or assets is appointed by any court of competent
jurisdiction, or if proceedings for a conference with a committee of creditors
under any state, federal or foreign law should be instituted by or against the
Licensees, or if a final judgment remains unsatisfied or of record for thirty
(30) days or longer (unless supersedeas bond is filed), or if execution is
levied against the Licensees' operating location or property, or suit to
foreclose any lien or mortgage against the premises or equipment is instituted
against the Licensees and not dismissed within thirty (30) days, or if any
substantial real or personal property of the Licensed Business shall be sold
after levy thereupon by any sheriff, shall or constable;
2. If the Licensees cease to do business at the Licensed Business for
two (2) or more consecutive days, excluding holidays, or lose the right to
possession of the premises upon which the Licensed Business is located or
otherwise forfeit the right to do or transact business in the jurisdiction
where the Licensed Business is located;
3. If the Licensees have made any material misrepresentation or
omission in this Agreement or any other agreement to which the Licensees and
the Licensor are parties;
4. If the Licensees (or the principal shareholder or general partner
of a corporation or partnership Licensees) engage in the use and/or abuse of
drugs;
5. If the Licensees, by act or omission, permit a continued violation
in connection with the operation of the Licensed Business of any law,
ordinance, rule or regulation of a governmental agency, in the absence of a
good faith dispute over its application or legality and without promptly
resorting to an appropriate administrative or judicial forum for relief
therefrom;
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6. If the Licensees fail to obtain and maintain all required licenses
under state and local law;
7. If the Licensees misuse or make any unauthorized use of the
Proprietary Marks, engage in any business or market any service or products
under a name or xxxx which is confusingly similar to the Proprietary Marks, or
otherwise materially impair the goodwill associated therewith or the Licensor's
rights therein;
8. If a threat or danger to public safety results from the
construction, maintenance or operation of the Licensed Business;
9. If the Licensees are convicted of a crime of moral turpitude or
similar felony or are convicted of any other crime or offense that the Licensor
reasonably believes is likely to have an adverse effect on the System, the
Proprietary Marks, the goodwill associated therewith or the Licensor's interest
therein;
10. If a judgment or a consent decree against the Licensees, or any of
their officers, directors, shareholders or partners is entered in any case or
proceeding involving allegations of fraud, racketeering, unfair, improper or
deceptive trade practices or similar claim which is likely to have an adverse
effect on the System, or the Proprietary Marks, the goodwill associated
therewith or the Licensor's interest therein;
11. If the Licensees purport to transfer any rights or obligations
under this Agreement to any third party without the Licensor's prior written
consent, contrary to any of the terms of Section XI of this Agreement;
12. If the Licensees fail to comply with any of the covenants
contained in Section XIV hereof;
13. If, contrary to Sections VI and VII hereof, the Licensees disclose
or divulge the contents of the Manuals or any other trade secrets or
Confidential Information provided to the Licensees by the Licensor;
14. If the Licensees knowingly maintain false books or records or
submit any false statements, applications or reports to the Licensor or any
assignee of the Licensor;
15. If the Licensees willfully and repeatedly engage in a course of
conduct which constitutes a misrepresentation or a deceptive or unlawful act or
practice in connection with their sale of the services and products offered at
the Licensed Business;
16. If the Licensees fail to strictly comply with the product and
quality control standards and specifications, fail to utilize suppliers
approved by the Licensor or otherwise fail to meet any other significant
specifications or guidelines set forth in the Manuals;
17. If any other license or franchise agreement issued to the
Licensees by the Licensor is terminated for any reason;
18. If the Licensees receive three (3) or more notices of default
under Section XII.B. hereof during the term of this Agreement whether or not
such defaults are cured after notice;
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19. If the Licensees willfully engage in any illegal, immoral or
unethical acts or any act in violation of the mission and values of the
Licensor;
20. If the Licensees default under their sublease agreement for the
premises on which the Licensed Business is located or under any other agreement
to which the Licensees and the Licensor, or any parent or subsidiary
corporation or any other affiliated entity of the Licensor, are parties and
fail to cure said default within the grace period (if any) provided for in such
agreement; or
B. DEFAULT WITH THIRTY (30) DAY OPPORTUNITY TO CURE. Except as
provided in Section XII.A. of this Agreement, the Licensees shall have thirty
(30) days after receiving from the Licensor a written notice of default within
which to remedy any default described in this Section XII.B. and provide
evidence thereof to the Licensor. If any such default is not cured within that
time, or such longer period as applicable law may require, this Agreement, at
Licensor's option, shall terminate without further notice to the Licensees
effective immediately upon the expiration of the thirty (30) day period or such
longer period as applicable law may require. The Licensees shall be in default
hereunder for any failure to comply substantially with any of the requirements
imposed by this Agreement, as it may from time to time reasonably be
supplemented by updates to the Manuals, or for any failure to carry out the
terms of this Agreement in good faith. Such defaults shall include, without
limitation, the occurrence of any of the following events:
1. If the Licensees fail to maintain any of the standards or
procedures prescribed by the Licensor in this Agreement, the Manuals, any other
license or franchise agreement between the Licensor and the Licensees, or any
other written agreements between the parties or otherwise;
2. If the Licensees fail to comply with their duties set forth in
Section IV of this Agreement or fail to perform any obligation owing to the
Licensor or to observe any covenant or agreement made by the Licensees, whether
such obligation, covenant or agreement is set forth in this Agreement or in any
other agreement with the Licensor including any other license or franchise
agreement by and between the Licensor and the Licensees or any entity related
to the Licensor;
3. If the Licensees fail to adequately promote the Licensed Business
as provided in the Manuals or otherwise in writing;
4. If the Licensees fail to maintain and submit to the Licensor all
reports required pursuant to Section VIII hereof;
5. If the Licensees fail to maintain the Licensor's quality control
standards with respect to its use of signage and other uses of the Proprietary
Marks;
6. If the Licensees, its Operating Manager or employees fail to attend
and successfully complete any mandatory training program unless attendance is
excused or waived, in writing, by the Licensor;
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7. If the Licensees fail to obtain the prior written approval of the
Licensor of any and all advertising, marketing or promotional plans and
materials in whatever form used by the Licensees in connection with its
promotion of the Licensed Business or otherwise fail to comply with Licensor's
policies and procedures with respect to advertising, marketing or promotion; or
8. If the Licensees fail, refuse or neglect to pay promptly any monies
owing to the Licensor or its subsidiaries or affiliates or suppliers when due.
C. NO RIGHT OR REMEDY. No right or remedy herein conferred upon or
reserved to the Licensor is exclusive of any other right or remedy provided or
permitted by law or equity.
D. DEFAULT AND TERMINATION. The events of default and grounds for
termination described in this Section XII shall be in addition to any other
grounds for termination contained elsewhere in this Agreement or otherwise.
E. RIGHT TO PURCHASE. In the event of termination of this Agreement
for any reason, including a default under this Section XII, the Licensor shall
have the right and option, but not the obligation, to purchase the Licensees'
interest in the tangible assets of the Licensed Business as set forth in
Paragraph XIII.K below. In the event that the Licensor elects to purchase the
Licensees' interest in said assets, the Licensees shall also execute an
assignment of the lease for the premises of the Licensed Business.
XIII. OBLIGATIONS UPON TERMINATION
Upon termination or expiration of this Agreement, all rights granted
hereunder to the Licensees shall forthwith terminate, and Licensees shall
observe and perform the following:
A. CESSATION OF OPERATION. The Licensees shall immediately cease to
operate the Licensed Business and shall not thereafter, directly or indirectly,
represent to the public or hold themselves out as a Licensees of the Licensor.
B. CESSATION OF USE OF PROPRIETARY MARKS. The Licensees shall
immediately and permanently cease to use, in any manner whatsoever, any
equipment, format, confidential methods, customer data base, programs,
literature, procedures and techniques associated with the System, the name
MARCO'S MEXICAN RESTAURANTS and any Proprietary Marks and distinctive trade
dress, forms, slogans, uniforms, signs, symbols or devices associated with the
System. In particular, the Licensees shall cease to use, without limitation,
all signs, fixtures, furniture, equipment, advertising materials or promotional
displays, uniforms, stationery, forms and any other articles which display the
Proprietary Marks associated with the System.
C. CANCELLATION OF NAME. The Licensees shall take such action as may
be necessary to cancel any assumed name or equivalent registration which
contains the Proprietary Marks or any other trademark, trade name or service
xxxx of the Licensor, and the Licensees shall furnish the Licensor with
evidence satisfactory to the Licensor of compliance with this obligation within
ten (10) days after termination or expiration of this Agreement.
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D. OPTIONAL ASSIGNMENT OF LEASE. The Licensees shall, at the
Licensor's option pursuant to Section XII.E. above, assign to the Licensor any
interest which the Licensees has in any lease or sublease for the premises of
the Licensed Business. In the event the Licensor elects to exercise its option
to acquire such lease or sublease, the Licensor shall pay for any furniture,
equipment, supplies and signs acquired by the Licensor as a result of such
assignment, at the Licensees' cost or fair market value (whichever is less),
less any sums of money owed by the Licensees to the Licensor and less any sums
of money necessary to upgrade and renovate the premises to meet the Licensor's
then current standards for its Licensed Business and less any sums necessary to
acquire clear title to the lease or sublease interest. In the event that the
Licensor and the Licensees are unable to agree on the fair market value of
said items, an independent appraiser shall be appointed by the Licensor to
determine the fair market value of said items. The determination of said
appraiser shall be final and binding upon the parties. The costs and expenses
associated with the appointment of an independent appraiser shall be paid by
the Licensees.
In the event that the Licensor does not elect to exercise its option
to acquire such lease or sublease, the Licensees shall make such modifications
or alterations to the premises of the Licensed Business immediately upon
termination or expiration of this Agreement as may be necessary to distinguish
the appearance of said premises from that of other Licensed Businesses under
the System, and shall make such specific additional changes thereto as the
Licensor may reasonably request for that purpose. In the event the Licensees
fail or refuse to comply with the requirements of this Section XIII, the
Licensor shall have the right to enter upon the premises of the Licensed
Business without being guilty of trespass or any other tort for the purpose of
making or causing to be made such changes as may be required, at the expense of
the Licensees, which expense the Licensees agree to pay upon demand.
E. LICENSOR'S RIGHT TO CONTINUE OPERATIONS. In the event this
Agreement is terminated, the Licensor may, at its option, immediately enter the
premises of the Licensed Business and continue to provide services to customers
of the Licensed Business and apply receipts therefrom to debts owed to the
Licensor by the Licensees. The Licensor shall have no other obligations to the
Licensees in connection with the Licensor's operation of the Licensed Business
following said termination.
F. NON-USAGE OF MARKS. The Licensees agree, in the event they continue
to operate or subsequently begin to operate any other business, not to use any
reproduction, counterfeit, copy or colorable imitation of the Proprietary Marks
or trade dress, either in connection with such other business or the promotion
thereof, which is likely to cause confusion, mistake or deception, or which is
likely to dilute the Licensor's exclusive rights in and to the Proprietary
Marks or trade dress, and agree not to utilize any designation of origin or
description or representation which falsely suggests or represents an
association or connection with the Licensor so as to constitute unfair
competition.
G. PROMPT PAYMENT UPON DEFAULT. The Licensees shall promptly pay all
sums owing to the Licensor and its subsidiaries, affiliates and suppliers. In
the event of termination for any default of the Licensees, such sums shall
include all damages, costs and expenses, including reasonable attorneys' fees,
incurred by the Licensor as a result of the default, which obligation shall
give rise to and remain, until paid in full, a lien in favor of the Licensor
against any and all of the personal property, machinery, furniture, fixtures,
equipment and inventory owned by the Licensees and on the premises of the
Licensed Business at the time of default.
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H. PAYMENT OF COSTS. The Licensees shall pay to the Licensor all
damages, costs and expenses, including reasonable attorneys' fees, incurred by
the Licensor subsequent to the termination or expiration of this Agreement in
obtaining injunctive or other relief for the enforcement of any provision of
this Section XIII or any other obligation under this Agreement.
I. RETURN OF MATERIALS. The Licensees shall immediately turn over to
the Licensor all copies of all materials in the Licensees' possession including
the Manuals, all records, files, instructions, correspondence, customer
database, brochures, agreements, disclosure statements and any and all other
materials relating to the operation of the Licensed Business in tile Licensees'
possession, and all copies thereof (all of which are acknowledged to be the
Licensor's property), and shall retain no copy or record of any of the
foregoing, excepting only the Licensees' copy of this Agreement, any
correspondence between the parties and any other documents which the Licensees
reasonably needs for compliance with any provision of law. In addition to the
foregoing, the Licensees shall deliver to the Licensor a complete list,
including names, addresses, and phone numbers, of all persons employed by the
Licensees during the three (3) years immediately preceding termination. All
costs of delivering all materials required by this Section XIII.I. shall be
borne by the Licensees. The Licensees shall retain all business records,
including employment files, for at least six (6) years (or such longer period
as may be required by law) after the date of the termination of this Agreement
and must keep the Licensor advised of the location of these records. The
Licensor shall be permitted to inspect such records at any time during normal
business hours.
J. ASSIGNMENT OF TELEPHONE LISTINGS. The Licensees shall promptly
notify the appropriate telephone company and all telephone directory listing
agencies of the termination or expiration of its right to use any telephone
number and any regular, classified or other telephone directory listings
associated with any Proprietary Marks and authorize the transfer of same to or
at the direction of the Licensor. The Licensees agree to execute updated
letters of direction to any telephone companies and telephone directory listing
agencies directing termination and/or transfer of the Licensees' right to use
any telephone number associated with the Proprietary Marks, which the Licensor
may hold until termination or expiration hereof. The Licensees acknowledge that
as between the Licensor and the Licensees, the Licensor has the sole right to
and interest in all telephone numbers and directory listings associated with
any Proprietary Marks. The Licensees authorize the Licensor, and hereby appoint
the Licensor and any officer of the Licensor as its attorney in fact, to direct
the appropriate telephone company and all listing agencies to transfer all such
listings to the Licensor upon termination of this Agreement.
K. OPTION TO PURCHASE. The Licensor shall have the right, but not the
obligation, to purchase any or all of the tangible assets of the Licensed
Business, including the signs, advertising materials, promotional displays,
supplies, forms, inventory, software, furniture or other items bearing the
Proprietary Marks, at the Licensees' cost or fair market value, whichever is
less. If the parties cannot agree on fair market value within a reasonable
time, an independent appraiser shall be designated by the Licensor, and the
appraiser's determination shall be final and binding. The Licensor's election
to purchase provided for herein must be exercised by written notice to the
Licensees within thirty (30) days after termination or expiration of this
Agreement. If the Licensor elects to exercise any option to purchase provided
herein it shall have the right to set off all amounts due from the Licensees
under this Agreement and the cost of the appraisal, if any, against any
payment therefor.
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L. COVENANT OF FURTHER ASSURANCES. The Licensees shall execute any
legal document that may be necessary to effectuate the termination hereunder
and shall furnish to the Licensor, within thirty (30) days after the effective
date of termination, written evidence satisfactory to the Licensor of the
Licensees' compliance with the foregoing obligations.
M. COMPLIANCE WITH COVENANTS. The Licensees shall comply with all
applicable covenants contained in Section XIV of this Agreement.
N. NO FURTHER INTEREST. Other than as specifically set forth above,
the Licensees shall have no interest in the Licensed Business upon termination
or expiration of this Agreement.
XIV. COVENANTS
A. BEST EFFORTS. The Licensees covenant that during the term of this
Agreement, and subject to the post-termination provisions contained herein, and
except as otherwise approved in writing by the Licensor, the Licensees will
devote their full time, energy and best efforts to the efficient and effective
management and operation of the Licensed Business.
B. NON-SOLICITATION AND NON-COMPETITION. The Licensees have heretofore
specifically acknowledged that pursuant to this Agreement, the Licensees shall
receive valuable specialized training and confidential and other information
regarding the business, promotional, sales, marketing and operational methods
and techniques of the Licensor and the System. The Licensees covenant that
during the term of this Agreement and subject to the post-termination
provisions contained herein, and except as otherwise approved in writing by the
Licensor, the Licensees shall not, either directly or indirectly, for
themselves or through, on behalf of or in conjunction with any person, persons,
partners or corporation:
1. Divert or attempt to divert any business or customer of the
Licensed Business to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with the Proprietary Marks and the
System;
2. Employ or seek to employ any person who is at that time employed by
the Licensor or by any other Licensees, Franchisee or multi-unit operator of
the Licensor, or otherwise directly or indirectly induce such person to leave
his or her employment;
3. Own, maintain, engage in, be employed by, advise, assist, invest
in, franchise, make loans to or have any interest in any business which is the
same as or substantially similar to the Licensed Business; or
4. Sell, or offer for sale, products or services offered by, or
similar to those offered by, the Licensed Business in any venue other than
through, and on the premises of, the Licensed Business.
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C. RESTRICTIVE COVENANTS. The Licensees covenant that, except as
otherwise approved in writing by the Licensor, for a continuous uninterrupted
period commencing upon the expiration or termination of this Agreement,
regardless of the cause for termination, and continuing for two (2) years
thereafter, the Licensees will not either directly or indirectly, for
themselves or through, on behalf of or in conjunction with any person, persons,
partnership or corporation, own, maintain, engage in, be employed by, advise,
assist, invest in, franchise, make loans to or have any interest in any
business which is the same as or substantially similar to the Licensed Business
and which is located within a radius of ten (10) miles of the Site or the
location of any Licensor-owned or operated or other licensees-operated Licensed
Business or franchisee-operated Franchise Business for the System which is in
existence on the date of expiration or termination of this Agreement.
If the period of time or the area specified above, should be adjudged
unreasonable in any proceeding, then the period of time will be reduced by such
number of months or the area will be reduced by the elimination of such portion
thereof, or both, so that such restrictions may be enforced in such area and
for such time as is adjudged to be reasonable.
D. NO UNDUE HARDSHIP. The Licensees acknowledge and agree that the
covenants not to compete set forth in this Agreement are fair and reasonable
and will not impose any undue hardship on the Licensees, or the Licensees'
shareholders or partners, if the Licensees are a corporation or partnership,
since the Licensees, its shareholders or partners have other considerable
skills, experience and education which afford the Licensees, its shareholders
or partners the opportunity to derive income from other endeavors
E. INDEPENDENCE OF COVENANTS. The parties agree that each of the
covenants in this Agreement shall be construed as independent of any other
covenant or provision of this Agreement. If any or all portions of the
covenants in this Section XIV is held unreasonable or unenforceable by a court
or agency having valid jurisdiction in an unappealed final decision to which
the Licensor is a party, the Licensees expressly agree to be bound by any
lesser covenant subsumed within the terms of such covenant that imposes the
maximum duty permitted by law, as if the resulting covenant were separately
stated in and made a part of this Agreement.
F. MISSION. The Licensees agree to support the Licensor's mission and to
conduct the Licensed Business in accordance with the Licensor's operating
policies and stated principles.
G. MODIFICATION OF COVENANTS. The Licensees understand and acknowledge
that the Licensor shall have the right, in its sole discretion, to reduce the
scope of any covenant set forth in this Section XIV or any portion thereof,
without the Licensees' consent, effective immediately upon receipt by the
Licensees of written notice thereof, and the Licensees agree that they shall
forthwith comply with any covenant as so modified, which shall be fully
enforceable notwithstanding the provisions of Section XXII hereof.
H. ENFORCEMENT OF COVENANTS. The Licensees expressly agree that the
existence of any claims they may have against the Licensor, whether or not
arising from this Agreement, shall not constitute a defense to the enforcement
by the Licensor of the covenants in this Agreement. The Licensees agree to pay
all costs and expenses (including reasonable attorneys' fees) incurred by the
Licensor in connection with the enforcement of the covenants set forth in this
Agreement.
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I. INJUNCTIVE RELIEF. The Licensees acknowledge that their violation of
the covenants not to compete contained in this Agreement would result in
immediate and irreparable injury to the Licensor for which no adequate remedy
at law will be available. Accordingly, the Licensees hereby consent to the
entry of an injunction prohibiting any conduct by the Licensees in violation of
the terms of the covenants not to compete set forth in this Agreement. The
Licensees expressly agree that it may be presumed conclusively that any
violation of the terms of said covenants not to compete was accomplished by and
through the Licensees' unlawful utilization of the Licensor's confidential
information, know-how, methods and procedures.
J. WRITTEN AGREEMENTS. At the Licensor's request, the Licensees shall
require and obtain execution of covenants similar to those set forth in this
Section XIV (including covenants applicable upon the termination of a person's
relationship with Licensees) from the Licensees' officers, directors,
shareholders, and employees. All covenants required by this Section XIV.K.
shall be in forms satisfactory to Licensor, including, without limitation,
specific identification of Licensor as a third party beneficiary of such
covenants with the independent right to enforce them. Failure by Licensees to
obtain execution of a covenant required by this Section XIV.K. shall constitute
a default under Section XII.B hereof.
XV. CHANGES AND MODIFICATIONS
The Licensor may modify this Agreement only upon the execution of a
written agreement by the Licensor and the Licensees. The Licensor reserves and
shall have the sole right to make changes in the Manuals, the System and the
Proprietary Marks at any time and without prior notice to Licensees. Licensees
shall promptly alter any signs, products, business materials or related items,
at their sole cost and expense, upon written receipt of written notice of such
change or modification in order to conform with the Licensor's revised
specifications. In the event that any improvement or addition to the Manuals,
the System or the Proprietary Marks is developed by the Licensees, then the
Licensee agrees to grant to the Licensor an irrevocable, world-wide, exclusive,
royalty-free license, with the right to sublicense such improvement or
addition.
The Licensees understand and agree that due to changes in competitive
circumstances, presently unforeseen changes in the needs of customers, and/or
presently unforeseen technological innovations, the Licensor's System MUST NOT
remain static, in order that it best serve the interests of Licensor, Licensees
and the System. Accordingly, Licensees expressly understand and agree that
Licensor may from time to time change the components of the System, including
altering the programs, services, methods, standards, forms, policies and
procedures of that System; adding to, deleting from or modifying those
programs, products and services which the Licensed Business is authorized to
offer; and changing, improving or modifying the Proprietary Marks. Subject to
the other provisions of this Agreement, Licensees expressly agree to abide by
any such modifications, changes, additions, deletions and alterations.
XVI. TAXES AND INDEBTEDNESS
A. PAYMENT. The Licensees shall promptly pay, when due, all taxes levied
or assessed by any federal, state or local tax authority and any and all other
indebtedness incurred by the Licensees in the operation of the Licensed
Business.
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B. DISPUTE. In the event of any bona fide dispute as to liability for
taxes assessed or other indebtedness, the Licensees may contest the validity or
the amount of the tax or indebtedness in accordance with procedures of the
taxing authority or applicable law; provided, however, in no event shall the
Licensees permit a tax sale or seizure by levy of execution or similar writ or
warrant, or attachment by a creditor, to occur against the premises of the
Licensed Business or any improvements thereon.
C. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS. The Licensees shall
comply with all federal, state, and local laws, rules and regulations, and
shall timely obtain any and all permits, certificates, licenses and bonds
necessary for the full and proper operation and management of the Licensed
Business, including, without limitation, a license to do business and provide
services, fictitious name registration and sales tax permits. Copies of all
subsequent inspection reports, warnings, certificates and ratings, issued by
any governmental entity during the term of this Agreement in connection with
the conduct of the Licensed Business which indicate Licensees' failure to meet
or maintain the highest governmental standards or less than full compliance by
Licensees with any applicable law, rule or regulation, shall be forwarded to
Licensor by Licensees within three (3) days of Licensees' receipt thereof.
D. DUTY TO NOTIFY. The Licensees shall notify the Licensor in writing
within three (3) days of the commencement of any action, suit or proceeding,
and of the issuance of any order, writ, injunction, award or decree of any
court, agency or other governmental instrumentality, which may adversely affect
the operation or financial condition of the Licensed Business. Additionally,
any and all consumer related complaints shall be answered by the Licensees
within fifteen (IS) days after receipt thereof or such shorter period of time
as may be provided in said complaint. A copy of said answer shall be forwarded
to the Licensor within three (3) days of the date that said answer is forwarded
to the complainant.
XVII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
A. INDEPENDENT CONTRACTOR.
1. It is understood and agreed by the parties hereto that this Agreement
does not create a fiduciary relationship between them, that the Licensees shall
be independent contractors, and that nothing in this Agreement is intended to
make either party an agent, legal representative, subsidiary, joint venturer,
partner, employee or servant of the other for any purpose whatsoever.
2. During the term of this Agreement and any extensions hereof, the
Licensees shall hold themselves out to the public as independent contractors
operating the Licensed Business pursuant to a license from the Licensor and as
authorized users of the System and the Proprietary marks which are owned by the
Licensor. The Licensees agree to take such affirmative action as may be
necessary to do so, including exhibiting to customers a sign provided by
Licensor in a conspicuous place on the premises of the Licensed Business.
3. The Licensor shall not have the power to hire or fire the Licensees'
employees, and except as herein expressly provided, the Licensor may not
control or have access to the Licensees' funds or the expenditures thereof, or
in any other way exercise dominion or control over the Licensed Business.
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B. NO LIABILITY. IT IS UNDERSTOOD AND AGREED THAT NOTHING IN THIS
AGREEMENT AUTHORIZES THE LICENSEES TO MAKE ANY CONTRACT, AGREEMENT, WARRANTY OR
REPRESENTATION ON THE LICENSOR'S BEHALF, OR TO INCUR ANY DEBT OR OTHER
OBLIGATION IN THE LICENSOR'S NAME, AND THAT THE LICENSOR SHALL IN NO EVENT
ASSUME LIABILITY FOR OR BE DEEMED LIABLE HEREUNDER AS A RESULT OF ANY SUCH
ACTION OR BY REASON OF ANY ACT OR OMISSION OF THE LICENSEES IN THE LICENSEES'
CONDUCT OF THE LICENSED BUSINESS OR ANY CLAIM OR JUDGMENT ARISING THEREFROM
AGAINST THE LICENSOR. THE LICENSEES AGREE AT ALL TIMES TO DEFEND AT THEIR OWN
COST, AND TO INDEMNIFY AND HOLD HARMLESS TO THE FULLEST EXTENT PERMITTED BY
LAW, THE LICENSOR, ITS CORPORATE PARENT, THE CORPORATE SUBSIDIARIES,
AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES OF EITHER ENTITY, AND THE
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, DESIGNEES, AND
REPRESENTATIVES OF EACH (LICENSOR AND ALL OTHER HEREINAFTER REFERRED TO
COLLECTIVELY AS "INDEMNITEES") FROM ALL LOSSES AND EXPENSES INCURRED IN
CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, CLAIM, DEMAND, INVESTIGATION, OR
FORMAL OR INFORMAL INQUIRY (REGARDLESS OF WHETHER SAME IS REDUCED TO JUDGMENT)
OR ANY SETTLEMENT THEREOF WHICH ARISES OUT OF OR IS BASED UPON ANY OF THE
FOLLOWING: THE LICENSEES' ALLEGED INFRINGEMENT OR ANY OTHER VIOLATION OR ANY
OTHER ALLEGED VIOLATION OF ANY PATENT, TRADEMARK OR COPYRIGHT OR OTHER
PROPRIETARY RIGHT OWNED OR CONTROLLED BY THIRD PARTIES; THE LICENSEES' ALLEGED
VIOLATION OR BREACH OF ANY CONTRACT, FEDERAL, STATE OR LOCAL LAW, REGULATION,
RULING, STANDARD OR DIRECTIVE OF ANY INDUSTRY STANDARD; LIBEL, SLANDER OR ANY
OTHER FORM OF DEFAMATION BY THE LICENSEES; THE LICENSEES' ALLEGED VIOLATION OR
BREACH OF ANY WARRANTY, REPRESENTATION, AGREEMENT OR OBLIGATION IN THIS
AGREEMENT; ANY ACTS, ERRORS OR OMISSIONS OF THE LICENSEES OR ANY OF THEIR
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS, OWNERS, PARTNERS, PROPRIETORS,
AFFILIATES, OR REPRESENTATIVES; LATENT OR OTHER DEFECTS IN THE LICENSED
BUSINESS, WHETHER OR NOT DISCOVERABLE BY THE LICENSOR OR THE LICENSEES; THE
INACCURACY, LACK OF AUTHENTICITY OR NONDISCLOSURE OF ANY INFORMATION BY ANY
CUSTOMER OF THE LICENSED BUSINESS; ANY SERVICES OR PRODUCTS PROVIDED BY THE
LICENSEES AT, FROM OR RELATED TO THE OPERATION AT THE LICENSED BUSINESS; ANY
SERVICES OR PRODUCTS PROVIDED BY ANY AFFILIATED OR NONAFFILIATED PARTICIPATING
ENTITY; ANY ACTION BY ANY CUSTOMER OF THE LICENSED BUSINESS; AND, ANY DAMAGE TO
THE PROPERTY OF THE LICENSEES OR THE LICENSOR, THEIR AGENTS OR EMPLOYEES, OR
ANY THIRD PERSON, FIRM OR CORPORATION, WHETHER OR NOT SUCH LOSSES, CLAIMS,
COSTS, EXPENSES, DAMAGES, OR LIABILITIES WERE ACTUALLY OR ALLEGEDLY CAUSED
WHOLLY OR IN PART THROUGH THE ACTIVE OR PASSIVE NEGLIGENCE OF THE LICENSOR OR
ANY OF ITS AGENTS OR EMPLOYEES, OR RESULTED FROM ANY STRICT LIABILITY IMPOSED
ON THE LICENSOR OR ANY OF ITS AGENTS OR EMPLOYEES.
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C. IDENTIFICATION. The Licensees shall conspicuously identify themselves
and the Licensed Business and in all dealings with their clients, contractors,
suppliers, public officials and others, as an independent Licensees of the
Licensor, and shall place such notice of independent ownership on all forms,
business cards, stationery, advertising, signs and other materials and in such
fashion as the Licensor may, in its sole and exclusive discretion, specify and
require from time to time, in its Manuals (as same may be amended from time to
time) or otherwise.
D. NO FALSE REPRESENTATIONS. Except as otherwise expressly authorized by
this Agreement, neither party hereto will make any express or implied
agreements, warranties, guarantees or representations or incur any debt in the
name of or on behalf of the other party, or represent that the relationship
between the Licensor and the Licensees is other than that of Licensor and
Licensees. The Licensor does not assume any liability, and will not be deemed
liable, for any agreements, representations, or warranties made by the
Licensees which are not expressly authorized under this Agreement, nor will the
Licensor be obligated for any damages to any person or property which directly
or indirectly arise from or relate to the operation of the Licensed Business
XVIII. APPROVALS AND WAIVERS
A. WRITTEN CONSENT. Whenever this Agreement requires the prior approval
or consent of the Licensor, the Licensees shall make a timely written request
to Licensor therefor and such approval or consent shall be obtained in writing.
B. NO WAIVER. No failure of the Licensor to exercise any power or right
reserved to it by this Agreement, or to insist upon strict compliance by the
Licensees with any obligation or condition hereunder, and no custom or practice
of the parties at variance with the terms hereof, shall constitute a waiver of
the Licensor's right to demand exact compliance with any of the terms herein.
Waiver by the Licensor of any particular default by the Licensees shall not
affect or impair the Licensor's rights with respect to any subsequent default
of the same, similar or different nature, nor shall any delay, forbearance or
omission of the Licensor to exercise any power or right arising out of any
breach or default by the Licensees of any of the terms, provisions or covenants
hereof affect or impair the Licensor's right to exercise the same, nor shall
such constitute a waiver by the Licensor of any right hereunder or the right to
declare any subsequent breach or default and to terminate this License
Agreement prior to the expiration of its term. Subsequent acceptance by the
Licensor of any payments due to it hereunder shall not be deemed to be a waiver
by the Licensor of any preceding breach by the Licensees of any terms,
covenants or conditions of this Agreement.
C. WAIVER TO JURY TRIAL. The Licensees hereby waive any right to a jury
trial with respect to this Agreement and/or any matters arising hereunder.
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XIX. NOTICES
Any and all notices required or permitted under this Agreement shall be in
writing and shall be personally delivered or mailed by certified mail, return
receipt requested, or dispatched by overnight delivery envelope, to the
respective parties at the following addresses unless and until a different
address has been designated by written notice to the other party:
Notices to Licensor: Marco's Mexican Restaurants, Inc.
Attention: Legal Department
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Notices to Licensees: Xxxxxxxx X. and Xxxxxxx X. Xxxxxx
000 X. Xxx Xxxxxxxxx, #00
Xxxx Xxxx, Xxxxx 00000
Any notice sent by certified mail shall be deemed to have been given at the
date and time of mailing.
XX. RELEASE OF PRIOR CLAIMS
By executing this Agreement, the Licensees, individually and on behalf of
the Licensees' heirs, legal representatives, successors and assigns, and each
assignee of this Agreement by accepting assignment of the same, hereby forever
releases and discharges the Licensor and its officers, directors, employees,
agents and servants, including the Licensor's parent, subsidiary and affiliated
corporations, their respective officers, directors, employees, agents and
servants, from any and all claims relating to or arising under any license
agreement or any other agreement between the parties executed prior to the date
of this Agreement including any and all claims, whether presently known or
unknown, suspected or unsuspected, arising under the franchise, securities or
antitrust laws of the United States or of any state or territory thereof
XXI. DISCLOSURE STATEMENT AND DISCLAIMER
ACKNOWLEDGEMENT. The Licensees acknowledge and accept the following:
THE SUCCESS OF THE LICENSEES IN OPERATING A LICENSED BUSINESS IS
SPECULATIVE AND WILL DEPEND ON MANY FACTORS INCLUDING, TO A LARGE EXTENT, THE
LICENSEES' INDEPENDENT BUSINESS ABILITY. THIS OFFERING IS NOT A SECURITY AS
THAT TERM IS DEFINED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THE
OBLIGATION TO TRAIN, MANAGE, PAY, RECRUIT AND SUPERVISE EMPLOYEES OF THE
LICENSED BUSINESS RESTS SOLELY WITH THE LICENSEES. THE LICENSEES HAVE NOT
RELIED ON ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE
POTENTIAL SUCCESS OR PROJECTED INCOME OF THE BUSINESS VENTURE CONTEMPLATED
HEREBY. NO REPRESENTATIONS OR PROMISES HAVE BEEN MADE BY THE LICENSOR TO INDUCE
THE LICENSEES TO ENTER INTO THIS AGREEMENT EXCEPT AS
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SPECIFICALLY INCLUDED HEREIN. THE LICENSOR HAS NOT MADE ANY REPRESENTATION,
WARRANTY OR GUARANTY, EXPRESS OR IMPLIED, AS TO THE POTENTIAL REVENUES, PROFITS
OR SERVICES OF THE BUSINESS VENTURE TO THE LICENSEES AND CANNOT, EXCEPT UNDER
THE TERMS OF THIS AGREEMENT, EXERCISE CONTROL OVER THE LICENSEES' BUSINESS. THE
LICENSEES ACKNOWLEDGE AND AGREE THAT THEY HAVE NO KNOWLEDGE OF ANY
REPRESENTATION MADE BY THE LICENSOR OR ITS REPRESENTATIVES OF ANY INFORMATION
THAT IS CONTRARY TO THE TERMS CONTAINED HEREIN.
[PLEASE INITIAL TO ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND THIS PARAGRAPH
XXI.]
XXII. ENTIRE AGREEMENT
This Agreement, the documents referred to herein and the attachments
hereto, if any, constitute the entire, full and complete Agreement between the
parties hereto concerning the subject matter hereof, and supersede all prior
agreements with no other representations having induced the Licensees to
execute this Agreement. No amendment, change or variance from this Agreement
shall be binding on the parties hereto unless mutually agreed to by the parties
and executed by themselves or their authorized officers or agents in writing.
XXIII. SEVERABILITY AND CONSTRUCTION
A. SEVERABILITY. Except as expressly provided to the contrary herein, each
section, part, term and/or provision of this Agreement shall be considered
severable, and if, for any reason, any section, part, term and/or provision
herein is determined to be invalid and contrary to, or in conflict with, any
existing or future law or regulation by a court or agency having valid
jurisdiction, such shall not impair the operation of, or have any other effect
upon, such other portions, sections, parts, terms and/or provisions of this
Agreement as may remain otherwise intelligible, and the latter shall continue
to be given full force and effect and bind the parties hereto, and said invalid
sections, parts, terms and/or provisions shall be deemed not to be a part of
this Agreement; provided, however, that if the Licensor determines that such
finding of invalidity or illegality adversely affects the basic consideration
of this Agreement, the Licensor, at its option, may terminate this Agreement.
B. COVENANTS. The Licensees expressly agree to be bound by any promise or
covenant imposing the maximum duty permitted by law which is subsumed within
the terms of any provision hereof, as though it were separately articulated in
and made a part of this Agreement, that may result from striking from any of
the provisions hereof any portion or portions which a court may hold to be
unreasonable and unenforceable in a final decision to which the Licensor is a
party, or from reducing the scope of any promise or covenant to the extent
required to comply with such a court order.
C. CAUTIONS. All captions in this Agreement are intended solely for the
convenience of the parties, and none of the captions shall be deemed to affect
the meaning or construction of any provision hereof.
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D. REFERENCES. All references herein to the masculine, neuter or singular
shall be construed to include the masculine, feminine, neuter or plural, where
applicable, and all acknowledgements, promises, covenants, agreements and
obligations herein made or undertaken by the Licensees shall be deemed jointly
and severally undertaken by all of the parties executing this Agreement in his
individual capacity on behalf of the Licensees. This Agreement may be executed
in one or more originals, each of which shall be deemed an original.
E. DEFINITION OF LICENSEES. As used in this Agreement, the term
"Licensees" shall include all persons who succeed to the interest of the
original Licensees by transfer or operation of law and shall be deemed to
include not only the individuals or entity defined as the "Licensees" in the
introductory paragraph of this Agreement.
F. FORCE MAJEURE. If, as a result of hurricane, tornado, typhoon,
flooding, lightning, blizzard and other unusually severe weather, earthquake,
avalanche, volcanic eruption, fire, riot. insurrection, war, explosion,
unavoidable calamity or other act of God (a "Force Majeure"), compliance by any
party with the terms of this Agreement is rendered impossible or would
otherwise create an undue hardship upon any party, all parties shall be excused
from their respective obligations hereunder for the duration of the Force
Majeure and for a reasonable recovery period thereafter, but otherwise this
Agreement shall continue in full force and effect,
XXIV. APPLICABLE LAW
A. GOVERNING LAW. This Agreement takes effect upon its acceptance and
execution by the Licensor. This Agreement shall be interpreted and construed
under the laws of the State of Texas except to the extent governed by the
United States Trademark Act of 1946 (Xxxxxx Xxx, 00 U.S.C. Section 105 1 et
seq.).
B. JURISDICTION AND VENUE. Except as otherwise expressly provided by
applicable state law or regulation, the parties agree that any action brought
by either party against the other shall be brought in Xxxxxx County, Texas and
the parties do hereby waive all questions of personal jurisdiction or venue for
the purpose of carrying out this provision.
C. REMEDY. No right or remedy conferred upon or reserved by the Licensor
or the Licensees by this Agreement is intended and it shall not be deemed to be
exclusive of any other right or remedy provided or permitted herein, by law or
at equity, but each right or remedy shall be cumulative of every other right or
remedy.
D. INJUNCTIVE RELIEF. Nothing herein contained shall bar the Licensor's
right to obtain injunctive relief against threatened conduct that will cause it
loss or damage under the usual equity rules, including the applicable rules for
obtaining restraining orders and preliminary injunctions
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XXV. MEDIATION
Except as specifically otherwise provided in this Agreement, the parties
agree that any and all disputes between them and any claim by either party that
cannot be amicably settled shall first be submitted to mediation. The parties
shall select a mutually acceptable independent mediator who is experienced in
license and restaurant business matters to preside over the mediation. Except
as otherwise expressly provided by applicable state law or regulation, the
mediator shall hear the dispute in Houston, Texas or at such other location as
may be designated by the Licensor. Each party shall bear all of its own fees,
costs and attorneys' fees. The decision of the mediator shall be non-binding and
any unsatisfied party may pursue litigation after mediation. The Licensees
know, understand and agree that it is the intent of the parties that any
mediation between the Licensor and the Licensees shall be of the Licensees'
individual claims and that the claims subject to mediation shall not be
mediated on a classwide basis.
Notwithstanding any provision contained in this Section XXV, the Licensor
may, at its sole option, institute an action or actions for temporary,
preliminary, or permanent injunctive relief or seeking any other equitable
relief against the Licensees in addition to any other rights and remedies
provided herein. In no event shall the Licensees be entitled to make, the
Licensees shall not make, and the Licensees hereby waive, any claim for money
damages by way of set-off, counterclaim, defense or otherwise based upon any
claim or assertion by the Licensees that the Licensor has unreasonably withheld
or unreasonably delayed any consent or approval to a proposed act by the
Licensees under any of the terms of this License Agreement. The Licensees' sole
remedy for any such claim shall be an action or proceeding to enforce any such
provisions, for specific performance or declaratory judgment. .
XXVI. ACKNOWLEDGMENTS
The Licensees acknowledge that they have conducted an independent
investigation of all aspects relating to the Licensed Business and recognizes
that the business venture contemplated by this Agreement involves business
risks and that its success will be largely dependent upon the skills and
ability of the Licensees as independent business persons or organization. The
Licensees acknowledge that they have received, read and understand this
Agreement, the attachments hereto and agreements relating thereto, and that the
Licensor has accorded the Licensees ample time and opportunity to consult with
advisors of the Licensees' own choosing about the potential benefits and risks
of entering into this Agreement.
The Licensees understand and accept the terms, conditions and covenants
contained in this Agreement as being reasonably necessary to maintain the
Licensor's high standards of quality and service and the uniformity of those
standards at all MARCO'S MEXICAN restaurants and thereby to protect and
preserve the goodwill of the Proprietary Marks. The Licensor expressly
disclaims the making of, and the Licensees acknowledge that they have not
received or relied upon, any guaranty, express or implied, as to the revenue,
profits or success of the business venture contemplated by this Agreement or
the extent to which the Licensor will continue to develop and expand the
network of MARCO'S MEXICAN restaurants. The Licensees acknowledge and agree
that the Licensor's directors, officers, employees and agents act only in a
representative, and not in a personal, capacity in connection with any of their
dealings with the Licensees. The Licensees further acknowledge that they have
not received or relied on any
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representations about the license, the Licensed Business, the Licensor or its
licensing program or policies made by the Licensor or its directors, officers,
employees or agents that are contrary to the terms herein.
[PLEASE INITIAL TO ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND THIS PARAGRAPH
XXVI]
IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and
delivered this Agreement on the day and year first above written,
LICENSOR:
MARCO'S MEXICAN RESTAURANTS, INC.
By: /s/ XXXXXX X. XXXXXXXXXX
-----------------------------------------
XXXXXX X. XXXXXXXXXX
Title: President and Chief Operating Officer
LICENSEES:
By: /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
XXXXXXXX X. XXXXXX
By: /s/ XXXXXX X. XXXXXX
-----------------------------------------
Xxxxxx X. Xxxxxx
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