EXCLUSIVE LICENSING AGREEMENT
EXCLUSIVE LICENSING AGREEMENT
This AGREEMENT
(Licensing Agreement) is made this 5th day of February, 2004 by and between THE
ALL AMERICAN XXXXXX, XXXX INTERNATIONAL, INC., a corporation incorporated under
the laws of the State of California and having a business address at 0000
Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX 00000 (hereinafter referred to as LICENSOR), and
GLOBAL HOSPITALITY GROUP INC , a corporation incorporated under the laws of the
State of NEVADA, and having a business address at XXXXXXX XXXX XXXXX 000, XXX
XXXXX, XX 00000 (hereinafter referred to as " LICENSEE"):
WITNESSETH:
WHEREAS, LICENSOR is
the owner of the Licensed Property described below.
WHEREAS, LICENSEE desires to acquire the rights (not sole and
exclusive) to said Licensed Property, deemed proprietary to LICENSOR, for the
purpose of opening up food establishments and products using said Licensed
Property as set forth herein.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I. - Definitions
(a) The term Licensed Property shall mean and include:
i. The name, The All American Burger.
ii. The All American Burger logo, a copy of which is attached hereto as Exhibit AA. LICENSOR holds a United States Trademark/Service Xxxx, International Class 43, Reg. No. 2,774,846 (A Licensed Trademark).
iii. The marketing materials used by The All American Burger.
iv. The menu and all future modified menus developed by LICENSOR for The All American Burger.
v. The food preparation techniques and recipes used by LICENSOR during the term of this Licensing Agreement.
vi. The accounting formats and operational budgets of The All American Burger.
The foregoing items or properties are deemed to be owned and proprietary to LICENSOR, and by this Licensing Agreement are being licensed for use by LICENSEE.
(b) The term Effective Date of This Agreement shall be the date first written above.
ARTICLE II. - Acknowledgments
LICENSOR and licensee acknowledge that another food
establishment also uses The All American Burger name, logo and format and is
currently operating in Hollywood, LICENSEE further acknowledges that said food
establishment is not owned by LICENSOR and that its existence and continued
operation shall have no effect on this Licensing Agreement or its validity.
LICENSEE further acknowledges that it has conducted due diligence with regard to
the existence of any other food establishment with a similar name. LICENSEE
acknowledges that either LICENSOR nor Xxxxx Xxxxxxxxx..
ARTICLE III. - Grant of License
LICENSOR hereby grants and agrees to grant to LICENSEE a
non-transferable license, with the right to sublicense, the Licensed Property.
This grant of license is effective for a period of fifteen (15) years beginning
as of the Effective Date of this Agreement. Providing LICENSEE is not in default
at any time during said license period, LICENSEE may extend this Licensing
Agreement for up to two (2) consecutive terms of five (5) years, each upon
written notice given to the LICENSOR not later than ninety (90) days prior to
the end of the initial license period and any extended period. In addition to
the other consideration as specified herein, LICENSEE shall pay a renewal fee of
$5,000.00 for any renewal hereunder.
ARTICLE IV. - Licensing, Sublicensing, Franchise Fees and Dilution
As consideration for the grant of a license, LICENSEE agrees
to pay to LICENSOR, at LICENSOR'S address, consideration in the amount three and
one-half million (3,500,000) shares of restricted common stock in LICENSEE plus
an additional three and one-half million (3,500,000) shares of restricted common
stock in LICENSEE, to be held in escrow. The escrow term shall be two (2) years.
LICENSEE retains the right to reclaim said shares from escrow at any time within
the two (2) year term by making payment to the Licensor the sum of One Hundred
Thousand ($100,000) Dollars. Said shares will be released back to the LICENSEE
at such time as the LICENSEE exercises its option to purchase the escrowed
shares for the amount of one hundred thousand dollars ($100,000). Shares shall
not be released to the licensee until such time as the licensor actually
receives the required payment.. If the two (2) year escrow term expires without
the licensee exercising its option to repurchase the shares, the shares shall
become the property of, and be conveyed to, LICENSOR. Failure of the licensee to
deposit the aforementioned shares into escrow within Ten (10) business days
following the signing of this agreement shall constitute a material breach and
void this agreement. The escrow term shall begin to run the next business day
following the signing of this agreement regardless of the actual date of deposit
of Said shares into escrow. The foregoing consideration shall be tendered
immediately upon execution of this Agreement. The said shares shall not be
released to LICENSOR until all monies have been fully paid and cleared in the
amount of $100,000.
If any additional shares of common stock of LICENSEE are
authorized and distributed in the future, LICENSOR shall receive a portion
thereof which will allow Licensor to retain a percentage of ownership in
licensee equal to the percentage granted by transference of the above mentioned
consideration of Three and one half million (3,500,000) shares of licensee.
Currently GHG has authorized 50,000,000 shares with 15,000,000 issued.
If LICENSEE sublicenses the Licensed Property, LICENSEE shall pay LICENSOR fifty
percent (50%) of the sublicense fee. A sublicense fee shall be no less than
fifty thousand dollars ($50,000.00) per sublicense, thus providing LICENSOR with
a minimum of twenty-five thousand dollars ($25,000.00) per sublicense granted,
which shall be paid to LICENSOR within fifteen (15) days of receipt by LICENSEE.
Any sublicense agreement shall contain a clause requiring that the sublicense
agree to the Royalty and related provisions set forth herein.
If LICENSEE enters into a franchise agreement including the
Licensed Property, LICENSOR shall receive fifteen percent (15%) of the initial
franchise fee. A franchise fee shall be no less than thirty thousand dollars
($30,000.00) per franchise, thus providing LICENSOR with a minimum of seven
thousand five hundred dollars ($4,500.00) per franchise granted, which shall be
paid to LICENSOR within fifteen (15) days of receipt by LICENSEE. Any franchise
agreement shall contain a clause requiring that the franchisee agree to the
Royalty and Royalty Review provisions set forth herein.
No sublicense or franchise shall be granted for any period of time beyond the
expiration of this Agreement.
ARTICLE V. - Royalties
LICENSEE agrees to pay to LICENSOR a monthly royalty fee
equal to three percent (3%) of the gross revenues generated from operations of
all food establishments owned and operated by LICENSEE, or sublicensed by
LICENSEE, which utilize any of the Licensed Property. The Minimum Royalty
Payment paid by LICENSEE, or any sublicense, will be no less than $500.00 per
month starting 90 days after store opens and will increase $50.00 per month each
year thereafter for the term of this Licensing Agreement.
LICENSEE agrees to pay LICENSOR a monthly royalty fee equal
to two percent (2%) of the gross revenues generated from operations of all food
establishments that have been franchised by LICENSEE that utilize any of the
Licensed Property. The Minimum Royalty Payment paid by any franchisee, will be
no less than $250.00 starting 90 days after store opens for the first year and
increase $25.00 per month each year thereafter for the term of this Licensing
Agreement.
In addition to the foregoing, LICENSEE agrees to pay LICENSOR
a royalty fee equal to three (3%) of the gross revenues generated from sales of
T-Shirts, Hats, Barbeque Grills and any other accessory or product containing
depictions of any of the Licensed Property herein, whether sold by LICENSEE, a
sublicense or a franchisee.
All royalty fees shall be calculated and paid to LICENSOR not
later than the 10th day after the end of each month.
Any default in any royalty payment hereunder shall bear interest at the rate of
10% per annum on the total unpaid balance until paid.
Royalties paid by LICENSEE to LICENSOR under this Licensing Agreement shall not
be refundable for any purpose, except for excess payment made due to
computational errors.
LICENSOR shall be entitled to verify the accuracy of any
royalty payment generated as set forth below.
This provision shall be included in and apply to any
sublicense or franchise agreement entered into by LICENSEE.
ARTICLE VI. - Royalty Reports, Royalty Review
LICENSOR shall be entitled to conduct a monthly Royalty
Review of all royalties generated by LICENSEE, or any sublicense or franchise.
LICESNSOR shall also be entitled to conduct monthly reviews of all fund raising
activities for GHG. In this regard, a Royalty Report shall be produced monthly
be LICENSEE, and by any sublicense or franchisee, during the term of this
Licensing Agreement. Such Royalty Reports shall be due within ten (10) days
after the end of each month and shall be accompanied by the royalty payment set
forth above, if any, in accordance with the report.
This provision shall be included in and apply to any
sublicense or franchise agreement entered into by LICENSEE.
ARTICLE VII. - Records
In order to substantiate the accuracy of any Royalty Report,
LICENSOR shall have the right to engage an independent certified public
accounting firm to review the books and records of LICENSEE, and any sublicensee
or franchisee, during normal business hours upon reasonable notice, for the
purpose of determining the accuracy of said Royalty Report. LICENSEE, and any
sublicensee or franchisee, shall keep accurate books and records in accordance
with customary accounting principles in a manner consistent with the accounting
methods employed throughout LICENSEE's, or any sublicensee's or franchisee's,
business and shall cooperate with said independent certified public accounting
firm to the extent necessary for said firm to present an accurate opinion
consistent with good established accounting principles concerning the accuracy
of the Royalty Reports prepared by LICENSEE, or any sublicense or franchisee,
and submitted to LICENSOR pursuant to this Licensing Agreement. The fee for the
independent certified public accounting firm shall be paid by the LICENSOR
unless such examination results in an upward adjustment of royalties due
LICENSOR by more than three percent (3%) or an amount of three thousand dollars
($3,000.00), whichever is greater, in the case of calculation errors or by any
amount for any other reason, in which event LICENSEE shall reimburse LICENSOR
for the fee paid to the independent certified public accounting firm.
This provision shall be included in and apply to any
sublicense or franchise agreement and confirm that LICENSOR itself shall have
the independent right to conduct the above described review.
ARTICLE VIII. - Default in Royalty Payments
If the LICENSEE, or any sublicense or franchisee, does not
make the Royalty Payment called for herein to LICENSOR within thirty (30) days
of any given Royalty Period, LICENSOR shall provide written notice to LICENSEE,
or any sublicense or franchisee, of such default and LICENSEE, or any sublicense
or franchisee, shall have ten (10) days to cure the default. In the event that
LICENSEE, or any sublicense or franchisee, still does not make the Minimum
Royalty Payment to LICENSOR within said ten (10) days, LICENSOR shall have the
right to revoke license, sublicense or franchise granted. If LICENSOR decides
not to revoke a penalty of 25% per month of amount due will be imposed.
This provision shall be included in and apply to any
sublicense or franchise agreement.
ARTICLE IX. - Area
The license granted and issued to LICENSEE hereunder shall be
valid only for and in the United States of America, its territories and
protectorates.
ARTICLE X. - Exclusivity
The license granted and issued to LICENSEE shall be
prohibited from licensing any or all of the described properties during the term
of this Licensing Agreement, together with any extensions. Although this
exclusivity shall prohibit LICENSOR from licensing these described properties to
any third parties, it shall not restrict the use of same by LICENSOR in any way.
Consistent with ARTICLE XIX., below, LICENSOR may use the Licensed Property, or
any extrapolation thereof, in any manner it deems appropriate, and may open new
restaurants that may provide competition to LICENSEE.
ARTICLE XI. - Right of Review/Revocation
LICENSOR shall be provided with and have the right to approve
any and all sublicense and franchise agreements before they are entered into to
confirm they are consistent with the purpose and intent of this Licensing
Agreement. The use of the Licensed Property described above shall be consistent
with good morals and traditional American values, e.g., the Licensed Property
shall not be used in conjunction with any gentleman's clubs, or strip clubs.
LICENSOR shall have the right to revoke this License, or any sublicense or
franchise granted hereunder, if such a prohibited use is discovered pursuant to
Article XVI below. Alcohol may be served at AAB establishments should the proper
licenses be held with the appropriate agencies.
This provision shall be included in and apply to any
sublicense or franchise agreement.
ARTICLE XII. - Display of Mottos/Pledge of Allegiance/American Flag
LICENSEE shall display, and shall require all sub licensees
and franchisees to display, , , The All American Burger logo, the Flag of the
United States of America, and the pledge of allegiance, grouped together, in a
minimum of one (1) location within the restaurant and visible when walking into
or dining in the store. It is the intent of the parties hereto to promote the
knowledge of America's history including its spiritual heritage of Christianity
and to promote the knowledge of the Judeo-Christian values of good citizenship,
it is not the intention of the LICENSOR to discriminate against any person,
group or religion in any fashion. LICENSOR AND LICENSEE agree to SPLIT the
weight of defense for any legal claims which may arise from the foregoing
Article (Article XII) and to indemnify and hold LICENSEE harmless against all
third party claims based thereon.
ARTICLE XIII. - Consulting
In consideration of the fees and royalties provided for
herein, LICENSOR agrees to provide consulting services and training as necessary
during the term of this Licensing Agreement. In this regard, the parties
understand that Xxxxx Xxxxxxxxx shall be designated LICENSOR to provide such
services. It is understood that Xxxxx Xxxxxxxxx is generally confined to his
home due to health reasons and cannot travel; he therefore will use his best
efforts to provide his services by telephone and through written communications.
Xxxxx Xxxxxxxxx will not be required to travel to any location.
ARTICLE XIV. - Operational Control
Nothing mentioned in this Licensing Agreement shall be
construed to grant any rights to control or otherwise influence LICENSEE's,
sublicense's or franchisee's business.
ARTICLE XV. - Development Period
The first year after the Effective Date of this Licensing
Agreement shall be considered the Development Period. During this period,
LICENSEE will expend no less than fifty (50%) percent of gross revenues or One
Hundred Thousand Dollars ($100,000), which ever is less, in development and
promulgation of its business and will use its best efforts in developing such
business.
ARTICLE XVI. - Termination or Cancellation
(a) This Licensing Agreement may be terminated by either party in the event of breach of one or more of the provisions hereof by the other party. In order to effectuate such termination, such party must provide the other party with sixty (60) days notice in writing of its intention to terminate, and such notice must specify the nature of the breach. If the other party has not cured such breach within said sixty (60) days, this Licensing Agreement may be terminated upon notice in writing to the other party.
(b) Grant of rights under this Licensing Agreement shall be revoked and canceled if LICENSEE, or any sublicense's or franchisee's, operations are conducted in such a manner as to bring discredit to the name licensed herein, or the identity with LICENSEE' business xxxxx or injures LICENSOR in a material way as determined by a neutral third party appointed by LICENSOR and LICENSEE. If the parties cannot agree on a neutral third party to make the aforementioned determination, each party shall appoint a third party evaluator of its choosing and such evaluators shall agree to the appointment of a third evaluator and the three evaluators shall together make a determination as to whether the operations of LICENSEE, or the sublicense or franchisee in question, were in violation of this clause (b).
This provision shall be included in and apply to any sublicense or franchise agreement.
(c) This Licensing Agreement shall automatically terminate upon the final holding of invalidity or unenforceability by any court of competent jurisdiction, which holding is either non-appealed or non-applicable.
(d) Upon termination of this Licensing Agreement, nothing herein shall be construed as relieving the parties of any rights or obligations which may have arisen prior to the effective date of such termination.
ARTICLE XVII. - Renewal of Trademark
GHG shall be responsible for renewal of the Licensed
Trademark and payment of all associated fees, when said becomes due. The
Licensed Trademark shall be renewed in LICENSORs name, or in the name of any
other party designated by LICENSOR. LICENSEE shall provide LICENSOR with any
assistance and information needed for the purposes of said renewal.
ARTICLE XVIII. - Trademark Enforcement and Litigation
(a) LICENSEE shall have the duty and authority to institute and prosecute, at its sole expense, suits for infringement of the Licensed Trademark. LICENSEE will use its best efforts in upholding the validity of the Licensed Trademark. Notwithstanding the same, nothing contained herein shall preclude LICENSOR from instituting and prosecuting a suit for infringement of the Licensed Trademark in its sole discretion.
(b) If any recovery is made by LICENSEE on any suit instituted by LICENSEE for infringement of the Licensed Trademark, LICENSEE shall pay to LICENSOR fifteen percent (15%) of any such recovery.
ARTICLE XIX. - Continued Development
LICENSEE shall open at least one new store, whether its own,
its sub licensee's or its franchisee's, be opened each calendar year or the
Licensing Agreement may be canceled by LICENSOR.
ARTICLE XX. - Competition Between LICENSOR and LICENSEE
LICENSEE itself intends on constructing and operating more
than one retail hamburger store, which will incorporate the properties licensed
herein by LICENSOR. It is possible that the two parties to this Licensing
Agreement may operate similar facilities in close proximity or in the same
regions, thereby resulting in some competitive effect on one or both of the
operations. Notwithstanding the fact that each of the parties may be competing
for the same market share, neither of the parties may complain or bring an
action to enjoin or otherwise prohibit the other from building in close
proximity to existing facilities of the other, or bring an action predicated on
unfair or other competition.
This provision shall be included in and apply to any
sublicense or franchise agreement.
ARTICLE XXI. - Right to Review any Sublicense or Franchise Agreement
LICENSOR shall be presented with and have the right to review
each and every sublicense and franchise agreement entered into by LICENSEE to
confirm that the same is in conformity with the provisions of this Licensing
Agreement.
ARTICLE XXII. - Successors and Assigns
This Licensing Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective successors and
assigns. No such assignment shall serve to reduce the amount of royalty to which
LICENSOR is otherwise entitled pursuant to this Licensing Agreement. Any
assignment by LICENSEE of rights licensed hereunder shall be void unless first
approved by LICENSOR.
ARTICLE XXIII. - Notice
Any notice or other communication permitted or required to be
given hereunder shall be in writing, specifically referring to this Licensing
Agreement and shall be delivered by hand or sent registered mail, return receipt
requested, postage prepaid, and shall be deemed given upon receipt thereof and
shall be sent to the parties at the addresses noted at the beginning of this
Licensing Agreement or to such other addresses as the parties may, from time to
time, designate by notice similarly given.
The date of receipt shown on the return receipt for any
notice dispatched with return receipt requested shall be conclusively presumed
to be the date of receipt.
ARTICLE XXIV. - Defense and Indemnity
LICENSEE, and any sublicensee and franchisee, shall defend,
indemnify and hold LICENSOR harmless against all claims of any nature made
against LICENSOR arising out of or in any way relating to the use of the
Licensed Property by LICENSEE, or any sublicensee or franchisee.
This provision shall be included in and apply to any
sublicense or franchise agreement.
ARTICLE XXV. - Waiver
The waiver by either party hereto of a breach of any
provision hereof shall not be taken to be a waiver as to any prior or subsequent
breach of the same or any other provisions, or waiver of the provision itself.
ARTICLE XXVI. - Severability
If any provision hereof is held invalid or unenforceable by a
court of competent jurisdiction, it shall be considered severed from this
Licensing Agreement and shall not serve to invalidate the remaining provisions
hereof.
ARTICLE XXVII. - Modifications, Entire Agreement
This Licensing Agreement shall not be modified or amended
except in writing signed by an authorized representative of each party hereto,
and said modification or amendment should specifically refers to this Licensing
Agreement. This Licensing Agreement constitutes the entire understanding between
the parties hereto with respect to the subject matter hereof and replaces and
supersedes all prior oral or written understandings between the parties, and is
intended as a final expression of their agreement and a complete statement of
the terms and conditions thereof.
ARTICLE XXVIII. - Warranty
(a) LICENSEE and LICENSOR each warrant and represent that it has obtained the approval of its Directors to enter into this Licensing Agreement, and that no additional action or approval is necessary as indicated by the authorized representative below.
(b) LICENSOR warrants that it is the owner of said Licensed Property and that it has the right to enter into this Licensing Agreement.
(c) LICENSOR makes no other representations or warranties, express or implied, nor does LICENSOR make any representations or warranties or assume any liability in respect to any infringement of patents or other rights of third parties due to the Licensed Property which are made, used, sold, or offered for sale by LICENSEE.
ARTICLE XXIX. - Choice of Law
This Licensing Agreement shall be construed in accordance
with the trademark laws of the United States and the laws of the State of
California. Exclusive venue and jurisdiction for disputes arising from or
related to this Licensing Agreement shall be in either the Superior Court of the
State of California, for the County of Los Angeles, Central District, or in the
United States District Court, Central District of California, as deemed
appropriate by LICENSOR, and the parties hereby consent to the jurisdiction of
such courts.
ARTICLE XXX. - Attorneys Fees
If either party shall bring an action to enforce any
provision of this Licensing Agreement, the prevailing party shall be entitled to
reimbursement for all reasonable legal fees and costs. This provision shall be
included in and apply to any sublicense or franchise agreement
IN WITNESS WHEREOF, the parties have signed this Licensing
Agreement on the dates as shown below.
LICENSOR:
THE ALL AMERICAN XXXXXX, XXXX
INTERNATIONAL, INC.
Dated: ___________________, 2004
By: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, CFO
LICENSEE:
Dated: ___________________, 2004
By
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