AGREEMENT
THIS AGREEMENT is made as of this 5th day of December, 1995, by and
among UNITED BRODY CORP., a New York corporation, having a place of business at
Xxxxxxx Xxxx, Xxxxx, Xxx Xxxx, 00000 (hereinafter "Licensor"), and ARK
STEAKHOUSE CORP., a Nevada corporation, having an office at c/o Ark Restaurants
Corp., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (hereinafter
"Licensee").
W I T N E S S E T H:
WHEREAS, the Licensor is the owner of a certain service xxxx, namely
"GALLAGHER'S", which has been registered with the Patent and Trademark Office of
the United States of America under Registration No. 1,507,546 (hereinafter
"Service Xxxx"), and
WHEREAS, the Licensor is engaged in the restaurant business in the City
of New York, New York, and in connection therewith, Licensor has established a
national and international reputation for high-quality foods and fine service,
all of which has created substantial value in the Service Xxxx above described,
and
WHEREAS, Licensee recognizes and acknowledges the value of such Service
Xxxx, as well as the benefits to be derived from being identified with and
licensed by Licensor, with
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respect to the limited use of such Service Xxxx, and
WHEREAS, the Licensee desires to acquire the limited right to use such
Service Xxxx in connection with the operation of a restaurant at Las Vegas,
Nevada.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. USE OF NAME (SERVICE XXXX); TERMINATION OF USE: Licensor gives and
grants to Licensee during the term of this Agreement a limited license to use
the Service Xxxx "Gallagher's" alone or together with the name "New York, New
York", or together with the name "Las Vegas", or together with both such names,
or any other, or any variation thereof as may be approved in writing by the
Licensor, in Licensor's absolute discretion, exclusively for the operation of a
business of a restaurant at Las Vegas, Nevada (hereinafter "Restaurant") for the
sale at retail of full-service meals, in a sit-down environment (non-fast-food
style), and also to be permitted to engage in the sale of "take out" food,
catering and the retail sale of food items (excluding mail order and excluding
locations other than within the City limits of Las Vegas, Nevada), subject to
and in accordance with the terms, conditions and standards set forth herein. The
Licensee agrees to use Licensor's Service Xxxx and name in connection with, and
exclusively for, the promotion and conduct of the Restaurant, as provided
hereunder, in accordance with the standards and terms and conditions stated
herein. The Licensee recognizes and acknowledges that the Licensor is the sole
and exclusive owner of the Licensor's Service Xxxx and agrees that it will not
register nor attempt to register such Service Xxxx or any
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confusingly similar xxxx in its own name or that of any other firm, person,
corporation or entity, whatsoever, and that Licensee will not use the aforesaid
Service Xxxx or any confusingly similar xxxx as any part of any corporate name
or in connection with any enterprise other than the Restaurant. Immediately upon
the expiration or termination of this Agreement, the Licensee agrees to cease
and forever abstain from the use of the aforesaid Service Xxxx and Licensee at
its sole cost and expenses, shall either destroy or return to Licensor, all
documents, instruments, display items, including stationery, identification
cards, building signage, menus, invoices, matchbooks, and the like bearing the
aforesaid Service Xxxx.
The delivery of all such materials as are required to be delivered to
the Licensor hereunder shall be made by the Licensee to the Licensor, at
Licensee's prepaid expense, free and clear of all charges or liens, at the place
for notice hereinafter described or at such other place within the State of New
York, as the Licensor shall indicate in writing. Such delivery shall be made
immediately upon the expiration or termination of this Agreement, irrespective
of the reason for termination.
The Licensee, after the expiration or other termination hereof, shall
not directly or indirectly contest or aid in contesting the validity or
ownership of the Service Xxxx or any action whatsoever in derogation of the
Licensor's claimed rights therein. Nothing contained in this Agreement shall be
construed to vest in the Licensee any right, title or interest in or to the
Licensor's Service Xxxx, the good will now or hereafter associated therewith, or
any right in the design or any such Service Xxxx or the character of any such
signage in connection therewith, other than the rights and license expressly
granted herein. Any and all good will
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associated with the Licensor's Service Xxxx shall inure directly and exclusively
to the benefit of and is the property of the Licensor.
All advertising by the Licensee shall be in good taste. The Licensee
shall refrain from the use of the Licensor's Service Xxxx in conjunction with or
integrated with any other tradename or Service Xxxx or any accompanying words,
insignias or symbols, except as hereinabove approved, or as expressly approved
by the Licensor, or as may be expressly required by law.
2. ANNUAL MINIMUM LICENSE FEE: The Annual Minimum License Fee shall be
Ten Thousand Dollars ($10,000) per year. Such minimum fee for the first year of
the term of this agreement is being paid concurrently with the execution of this
Agreement. If the lease for the Restaurant (the "Lease") is not executed on or
before September 30, 1996, the Licensor shall return to the Licensee $5,000 of
such minimum fee for the first year and upon such payment this agreement shall
be null and void and neither party shall have any liability hereunder.
The Annual Minimum License Fee, for each year during the term of this
agreement, shall be applied against an Annual License Fee computed at two
percent (2%) of Licensee's gross sales (as hereinafter defined). Payments to be
made monthly on account of such license fee on or before the 15th day of each
month beginning in the month immediately following the month in which the
restaurant commences operation and the same shall be based upon the gross sales
of the preceding calendar month.
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For the purposes of this Paragraph 2, each twelve month period shall be
based on Licensee's fiscal year ending on the Saturday nearest September 30th
and shall consist of the twelve months or shorter period ending on such date and
the first year of the term of this agreement (which may be shorter than twelve
months) shall be deemed to begin on the date Licensee commences operations at
the Restaurant.
The terms "gross sales" shall mean the aggregate of all receipts,
revenues and income, however characterized, resulting or derived directly from
the operation of the Restaurant during the term. Gross sales shall include
revenues from the sale at the Restaurant, for cash or credit, of all food,
beverages (including alcoholic beverages), goods, wares or merchandise
customarily produced for retail sale to the consumer public at a sit-down
restaurant operation both served at the premises or catered off premises. Gross
sales shall not include (i) any sales, excise or other taxes collected or
received by the Licensee in connection with the Restaurant and paid to the
taxing authorities by Licensee, (ii) gratuities to employees paid by Licensee's
customers, and (iii) the amount of sales otherwise included in the gross sales
which are received for payment of "complimentary meals" supplied to the
casino/hotel guests, patrons and executives for which the Licensee receives a
discounted payment below the stated menu prices; further provided, however, that
solely for purposes of calculating gross sales the total of such excluded
"complimentary meals" shall be limited to $500,000 per annum (or with respect to
any period less than a year, $500,000 multiplied by a fraction, the numerator of
which shall be the number of days in such period less than a year and the
denominator of which shall be 365).
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3. ACCOUNTING PROCEDURE: Licensee agrees to keep complete records of
the gross receipts of the Restaurant. Licensee shall furnish on a monthly basis
statements for the Restaurant's gross receipts for the preceding month. Such
statements will be certified by an officer of Licensee for the subject period.
All such statements shall be in accord with good accounting practice and shall
be submitted to the Licensor not later than the fifteenth (15th) day of the
month following the period for which the written statement is required to be
submitted. In addition thereto, the Licensee shall submit, with such statements,
its State of Nevada sales tax return for the immediately-preceding sales tax
reporting period.
Licensee shall submit an annual statement on or before October 20th of
each year for the year just ended, which statement shall be certified to by an
officer of Licensee. The Annual Statement shall set forth (i) gross receipts
less the authorized exclusion amount as set forth above, (ii) the calculation of
the percentage license fee for the prior year, (iii) the license fee previously
paid and (iv) the balance due, if any.
If any such annual statement shows additional sums payable by the
Licensee to the Licensor, such amount shall be delivered simultaneously with the
annual statement. If any such annual statement shows that an amount is payable
by Licensor to the Licensee, the Licensor shall within ten (10) days of the
annual statement pay such amount to the Licensee.
4. RIGHT OF AUDIT: Licensee agrees that, on reasonable notice, Licensor
or its agent shall have the right, once per annum during the term of this
Agreement, during regular business hours, to examine or audit the books and
accounts of Licensor to verify gross receipts
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as certified hereunder. If the audit shows a deficit, the parties shall endeavor
to resolve such dispute. In the event that the parties are unable to arrive at a
mutually satisfactory resolution, the accountants of each of Licensee and
Licensor, shall select an independent certified public accountant who shall
resolve the dispute, which resolution shall be conclusive and binding on the
parties.
If the audit shows a deficit in the license fees of five (5%) percent
or more, the cost of the audit shall be paid by Licensee. If the audit shows a
deficit of less than five (5%) percent, the cost of the audit shall be shared
equally by Licensor and Licensee. If the audit shows no deficit or any
overpayment, the cost of the audit will be borne by the Licensor. All deficits
uncovered by an audit shall bear interest at the rate of TWELVE (12%) per annum
from the date same was first due until paid.
5. STANDARDS: Licensee acknowledges that Licensor's reputation and the
value of its Service Xxxx has derived, in part, from Licensor's high quality of
service, presentation of restaurant product, showcasing, pre-preparation of
certain food products and preparation of food products. Licensee further
acknowledges that with respect to such service, presentation of restaurant
product, showcasing, pre-preparation of certain food products and preparation of
food products, Licensor has a secret, protected propriety interest in the
methods with respect thereto. Accordingly, Licensee agrees that Licensor's
Service Xxxx can only be protected through the adherence to certain public
service and food preparation standards.
In order to protect Licensor's proprietary interests, Licensee agrees
that the
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making of this Agreement and the payment of the initial fee is a prerequisite to
the availability of the various methodologies and standards with respect
thereto. Licensor shall, within thirty (30) days from the date the Lease is
executed, undertake the training of Licensee with regard to Licensor's
methodologies and standards employed at Licensor's location at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000. Thereafter, Licensor shall provide Licensee
with a detailed written manual of such methodologies and standards (hereinafter
"Manual").
During the operation of the Restaurant, in recognition of the mutual
benefits accruing from maintaining the modus operandi set forth in the Manual,
Licensee agrees to make all reasonable efforts to adhere to the Manual in
connection with the Restaurant. If Licensee deviates in a material fashion from
the Manual, Licensor will give Licensee notice setting forth in reasonable
detail the manner in which the Licensee is materially deviating from the Manual
and Licensor shall take all reasonable steps to correct the deviation. Licensor
agrees that Licensee will not be in default hereunder as long as it is making
reasonable efforts, in good faith, to comply with the Manual. Nothing, however,
shall relieve Licensee of complying with the standards as set forth herein
(Manual), and continued deviation and/or noncompliance shall constitute default
hereunder. Any dispute as to whether the Licensee is complying with the
standards shall be resolved by arbitration pursuant to Paragraph 21 below.
6. RIGHT OF ENTRY AND INSPECTION: The Licensor or its authorized agent
and representative shall have the right to enter and inspect the premises and
examine and test food products and supplies for the purpose of ascertaining that
Licensee is operating the
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Restaurant in accordance with the terms of this Agreement and, in particular,
subject to the standards herein contained (Manual).
Any such inspection requiring the participation of personnel employed
by Licensee shall be limited to twice per annum.
Inspections shall be conducted during normal business hours.
The Licensor shall notify the Licensee in writing of any deficiencies
detected during the inspection. Licensor and Licensee shall discuss such
deficiencies and the manner in which they should be corrected and licensee shall
proceed to make all reasonable efforts, in good faith, to correct the
deficiencies.
7. AUTHORITY: The Licensee shall not represent or hold itself out as an
agent, legal representative, partner, subsidiary, joint venturer, franchise or
employee of the Licensor. The Licensee shall have no right or power to and shall
not bind or obligate the Licensor in any way, manner or thing whatsoever, nor
represent that it has any right to do so. In its public records and in its
relationship with other persons, or letterheads and business forms, Licensee
shall indicate its independent ownership of said business, and that it is only a
licensee of the Licensor. Licensee agrees to exhibit on the premises in a place
agreed upon between the Licensor and Licensee a notification that it is a
licensee of Licensor. All disclaimers required hereunder shall be subject to
Licensor's prior written approval.
8. DEFAULT: TERMINATION: The occurrence of any of the following events
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shall constitute good cause for Licensor, at its option and without prejudice to
any other rights or remedies provided for herein or hereunder or by law or
equity, to terminate this Agreement:
A. If Licensee shall be adjudicated a bankrupt, because
insolvent, or if a receiver (permanent or temporary) of its
property or any part thereof is appointed by a court of
competent jurisdiction and authority; if it makes a general
assignment for the benefit of creditors, or if a final
judgment remains unsatisfied of record for thirty (30) days or
longer (unless supersedeas bond is filed) or if execution is
levied against Licensee's business or property or suit to
foreclose any lien or mortgage against the premises or
equipment is instituted against Licensee and not dismissed
within thirty (30) days; or if Licensee defaults in the
performance of any term, condition or obligation in the
payment of any indebtedness to Licensor, its suppliers or
others, arising out of the purchase of supplies or the
purchase or lease of equipment or operation of the Restaurant,
except where any such amount owed are being diligently
contested in good faith by appropriate proceedings, and if any
such default is not cured within thirty (30) days after
written notice by Licensor to Licensee.
B. If Licensee defaults in the payment of any fee or other
payment due hereunder or fails to submit the financial or
reports, sales slips or the like of the "gross sales" as
provided herein, and fails to cure said default within thirty
(30) days
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after written notification thereof, or if Licensee makes any
intentionally false statement in connection therewith.
C. If Licensee fails in good faith to make reasonable efforts to
cure any material deviation from the standards as set forth in
Paragraph 5 and 6 of this Agreement and such failure or
non-compliance shall continue after notification; or if
Licensee repeatedly commits violations of such provisions.
D. If Licensee violates any other term or condition of this
Agreement and Licensee shall not have diligently commenced to
cure such defaults thirty (30) days after written notice from
Licensor to cure same.
E. If Licensee suffers a violation of any law, ordinance, rule or
regulation of a governmental agency in connection with the
operation of the Restaurant and permits the same to go on
uncorrected after notification thereof, unless there is a bona
fide dispute as to the violation or legality of such law,
ordinance, rule or regulation.
F. If Licensee ceases to do business at the premises or defaults
under the Lease or loses its rights to possession of the
premises.
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9. LICENSOR'S OBLIGATION: The Licensor shall have no obligations to
Licensee, whatsoever, except as expressly stated herein. Licensor shall not have
the obligation to direct or advise Licensee in the operation of the Restaurant,
and the terms hereof shall be considered limitations for the purpose of
protecting the Service Xxxx of the Licensor and the good will connected
therewith. This Agreement is not intended to create a franchise, and the
Licensee is not relying on any relationship, as such.
10. NO REPRESENTATIONS: Licensee acknowledges that Licensor has made no
representations to Licensee with regard to the profitability of the Restaurant,
the market therefor or the operations thereof.
Licensor acknowledges that Licensee had made no representations to
Licensor with regard to the profitability of the Restaurant, the market therefor
or the operations thereof.
11. EXCLUSIVITY: The Licensee's rights shall be exclusive to the City
of Las Vegas, Nevada.
12. TERM: This Agreement shall be effective on the date hereof and
shall end on the termination of the Lease, as such may be renewed or extended,
unless this Agreement is otherwise terminated in accordance with the terms
hereof. The term of this Agreement, for purposes of the license fee, shall be
governed by the provisions of Paragraph 2 above.
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13. ASSIGNABILITY: This Agreement is not assignable by Licensee, except
with the written consent of Licensor, which shall not be unreasonably withheld.
Any attempted assignment without such consent shall be void and constitute a
default hereunder. Notwithstanding the foregoing, Licensee shall be able to
assign its rights and obligations hereunder, without the consent of Licensor, in
connection with the sale of all or substantially all of the assets or stock of
Ark Restaurant Corp. Nothing herein shall preclude the transfer of Licensor's
rights hereunder.
14. ENFORCEMENT OF SERVICE XXXX:
A. Licensee and Licensor shall promptly notify each other of any
suspected infringement of their respective interests in and to the Service Xxxx
by any third party. In the event that any legal action against any third party
is deemed necessary by either Licensee or Licensor for the protection of their
respective interests in and to the Service Xxxx, Licensee and Licensor shall
cooperate with each other and render all reasonably necessary assistance in
connection with any such legal action; provided, however, that neither party
shall settle any such action without the prior written consent of the other,
which shall not be unreasonably withheld. Within thirty (30) days after notice
from Licensee of a suspected infringement, Licensor shall advise Licensee of
whether or not Licensor shall prosecute a suit for infringement. If Licensor
elects to prosecute such a suit, Licensor may select legal counsel and shall
bear all legal fees and other costs and expenses incurred in connection
therewith. Any monies recovered after such costs and expenses are reimbursed,
shall be shared fifty (50%) percent by Licensor and fifty
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(50%) percent by Licensee. If Licensor chooses not to prosecute any such suit
for infringement, then Licensee may do so after notice to Licensor; and Licensee
may select legal counsel and shall bear all legal fees and other costs and
expenses incurred in connection therewith. Any monies recovered after such costs
and expenses are reimbursed, shall be shared fifty percent (50%) by Licensor and
fifty percent (50%) by Licensee.
B. Licensor hereby agrees to be solely responsible for, to defend
and indemnify Licensee, its officers, agents and employees and to hold each of
them harmless from any claims, demands, causes of action or damages, including
reasonable attorney's fees (collectively the "Costs"), arising out of an action
against Licensee contesting the right of Licensee to use the Service Xxxx. In
the event such claim is asserted against the Licensee, the Licensee shall notify
the Licensor of such claim, and the Licensor shall immediately thereafter bear
all the Costs. The provisions of this paragraph shall survive the termination of
this Agreement.
15. INDEMNIFICATION: Licensee hereby agrees to be solely responsible
for, to defend and indemnify Licensor, its officers, agents and employees, and
to hold each of them harmless from any claims, demands, causes of action or
damages, including reasonable attorneys' fees, arising out of the operation of
the Restaurant.
Licensee will obtain and keep in full force and effect the following
(the "Policies"):
A. a policy of commercial general liability on an occurrence basis
with a
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combined single limit with respect to each occurrence in an amount of $1,000,000
for bodily injury or death to persons; and
B. a Liquor Liability insurance policy in an amount of $1,000,000
for bodily injury or death to persons
The Licensor shall be named as an additional insured on the Policies.
16. NOTICE: Any and all notices required or permitted to be given or
made pursuant to any of the provisions of this Agreement shall be deemed to have
been duly given or made for all purposes if sent by mail, postage prepaid, or by
recognized overnight delivery service, or by telephone facsimile, in any case
addressed as follows:
If to Licensee, at:
c/o Ark Restaurants Corp.
Attention: Xxxxxxx Xxxxxxxxx
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
With copy to:
Shack & Xxxxxx, P.C.
Attention: Xxxxxx X. Shack, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
If to Licensor, at:
United Brody Corp.
Attention: Xxxxxx Xxxxx
Xxxxxxx Xxxx
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Xxxxx, Xxx Xxxx 00000
Telecopy:
With a copy to:
Rapport, Meyers, Whitbeck, Xxxx & Xxxxxxxxxxx
Attention: Carmi Rapport, Esq.
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
or at such other address as any party may specify by notice given to the other
party in accordance with this paragraph. The date of giving of any such notice
shall be the third business day after mailing if sent by certified mail and the
date of first receipt if sent by any other permitted method.
17. CONSTRUCTION: This Agreement and the terms hereof shall be
construed in accordance with the laws of the State of New York and, subject to
the provisions of Paragraph 21 below, venue for all actions in a court of
competent jurisdiction shall lie in New York, New York and for federal
litigation, in the Southern District of the State of New York.
18. ENTIRE AGREEMENT, MODIFICATION: No statements, representations,
variations, either written or oral from whatever source arising, except as
stated in this Agreement, shall have any legal validity between the parties or
be binding upon any of them. The parties acknowledge that this Agreement
contains the entire understanding and agreement of the parties. No modifications
hereof shall be effective unless made in writing and computed by the parties
hereto with the same formalities as this Agreement is executed.
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19. NON-WAIVER: The failure of the Licensor to exercise any right,
power or option given to it hereunder or to insist upon strict compliance with
the terms hereof by the Licensee shall not constitute a waiver of the terms and
conditions of this Agreement with respect to any other or subsequent breach
thereof, nor a waiver by the Licensor of its rights at any time thereafter to
require exact and strict compliance with all of the terms hereof. The rights and
remedies hereunder are cumulative to any other rights or remedies which may be
granted by law.
20. SEVERABILITY: Should any word, phrase or provisions hereof be
declared illegal or invalid by a court of competent jurisdiction, such
declaration of illegality and/or invalidity shall not affect the remainder
hereof.
21. ARBITRATION: Except as otherwise specifically provided in this
agreement, any controversy or claim arising out of or relating to this
Agreement, of the breach thereof, shall be settled by arbitration in the City
and County of New York, in accordance with the commercial arbitration rules of
the American Arbitration Association, and any judgment upon the award may be
entered in any court having competent jurisdiction thereof. The arbitrator shall
be entitled to award any relief which may be available at law or in equity,
including, without limitation, issuing a preliminary or permanent injunction.
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22. HEADINGS: The headings or captions associated with paragraphs of
this Agreement are for convenience and reference only and do not form a part
hereof, and do not in any way modify, interpret or construe the intent of the
parties or affect any of the provisions of this Agreement.
LICENSEE: LICENSOR:
ARK STEAKHOUSE CORP. UNITED BRODY CORP.
By___________________________ By____________________________
Xxxxxx Xxxxxx, Vice President Xxxxxx Xxxxx, President
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