EXHIBIT 10.40
OPTION AGREEMENT
This Option Agreement is entered into this _____ day of
___________________, 19___, by and between THE GREAT AMERICAN BACKRUB STORE,
INC. , a New York corporation, hereinafter referred to as "Franchisor," and
Xxxxxxx Xxxxxx, hereinafter referred to as "Optionee."
RECITALS
ARTICLE I
SECTION 1.01 Franchisor is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New York, with its
principal office located at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx,
00000.
SECTION 1.02. Optionee is an individual, whose principal place of
residence is located at 0000 Xxxxxxx Xxxxxxxx XXX, XX 00000.
SECTION 1.03. Franchisor is engaged in the business of granting to
others, by means of a non-exclusive franchise agreement (the "Franchise
Agreement"), limited licenses to utilize the name "The Great American BackRub,"
the related proprietary marks and the associated concepts in connection with the
operation of a "The Great American BackRub" store (the "Store") and the sale,
distribution, and marketing of back rub and massage services and products.
SECTION 1.04. The location within which the Store is located is leased
by Franchisor on terms and conditions acceptable to Franchisor, and then
subleased to franchisees on terms and conditions mutually agreement to
Franchisor and said franchisees.
SECTION 1.05. Optionee desires to acquire, pursuant to the terms and
conditions of the Franchise Agreement, a limited license to utilize the name
"The Great American BackRub," the proprietary marks and the associated concepts
in connection with Optionee's operation of a Store.
NOW, THEREFORE, in consideration of the mutual promises, premises and
covenants herein set forth, Franchisor and Optionee do hereby agree as follows:
TERMS AND CONDITIONS
ARTICLE II
SECTION 2.01. Upon execution of this Option Agreement, Optionee shall
pay to Franchisor the sum of Five Thousand Dollars ($5,000.00) (the "Payment").
In consideration of said payment, Franchisor hereby grants to Optionee, subject
to the terms and conditions of
Section 2.02 hereof, the option to require Franchisor to enter into the
Franchise Agreement in the form of Exhibit "A," attached hereto and made a part
hereof.
SECTION 2.02. The option granted to Optionee in Section 2.01 hereof is
subject to the following conditions, all of which must be satisfied within one
hundred twenty (120) days (the "Term") following the date hereof:
(a) Optionee shall, at his sole expense, locate an "Acceptable
Location" (as said term is defined in Section 2.04 hereof) within the
geographic territory (the "Option Territory") described in Exhibit "B"
attached hereto and made a part hereof.
(b) Franchisor shall have entered into a written lease relating to said
Acceptable Location on such terms and conditions as Franchisor, in its
sole discretion, deems reasonable and appropriate.
(c) Optionee and Franchisor shall have entered into a written sublease,
in the form of that certain Sublease attached hereto as Exhibit " C,"
relating to said Acceptable Location.
SECTION 2.03. Upon satisfaction of the conditions of Section 2.02
hereof, Franchisor and Optionee shall execute the Franchise Agreement. The
Franchise Agreement shall supersede, and in all respects replace, this Option
Agreement. Upon execution of the Franchise Agreement, all rights, duties and
obligations of Franchisor and Optionee shall be governed and construed by the
terms and conditions of the Franchise Agreement.
SECTION 2.04. The term "Acceptable Location" as used herein shall be
defined as a location which (i) meets the specifications established from time
to time by Franchisor for the operation of a Store, (ii) is located within the
Option Territory in an area deemed by Franchisor to be appropriate for the
operation of a Store, and (iii) is available to rent on terms and conditions
deemed by Franchisor, in its sole discretion, to be reasonable and appropriate.
SECTION 2.05. During the Term Franchisor agrees not to grant any option
to acquire, or license to operate, or operate for its own benefit, a Store
within the Option Territory.
SECTION 2.06. In the event that Optionee has not satisfied all
conditions set forth in this Article II within the Term, all rights of Optionee
under this Option Agreement shall terminate, Franchisor shall be entitled to
retain the Payment, and Franchisor shall have no further obligation to Optionee
hereunder.
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MISCELLANEOUS
ARTICLE III
SECTION 3.01. This Option Agreement contains the entire agreement of
the parties and supersedes all prior agreements, negotiations and
representations. Optionee acknowledges that Franchisor has not made any
representations, promises or inducements not embodied herein.
SECTION 3.02. In the event either party to this agreement should
institute legal action relating to the terms and conditions of this agreement,
or the enforcement of any provision hereof, the prevailing party in said action
shall be entitled to recover, in addition to any other relief or damages,
reasonable attorneys' fees and costs.
SECTION 3.03. This agreement shall be construed under the applicable
laws of the State of New York, as amended; except that for franchises located
outside of New York, the laws of the state in which the Subject Location is
located will apply.
SECTION 3.04. This agreement shall inure to the benefit of, and be
binding upon, the parties, their heirs, executors, personal representatives,
successors and assigns.
Executed as of the day and year first above written at Palos Verdes
Estates, California.
"Franchisor" "Optionee"
The Great American BackRub Store, Inc.,
A New York corporation /s/ Xxxxxxx Xxxxxx
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By: /s/ Xxxxxxxx X. Xxxxxx NOVEMBER 21, 1996
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Xxxxxxxx X. Xxxxxx
Its:CEO Xxxxxxx Xxxxxx
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EXHIBIT "B" TO OPTION AGREEMENT
DATED NOVEMBER 21, 1996 BETWEEN
THE GREAT AMERICAN BACKRUB STORE, INC. AND XXXXXXX XXXXXX
The Option Territory referred to in Section 2.20(a) shall consist of the
Counties of Los Angeles and Orange, California.
