LICENSE AGREEMENT
This Agreement dated as of April 1, 1998 is by and between Grill Concepts,
Inc. ("Licensor") of 00000 Xxx Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000 and the
Airport Grill, LLC (the "Operator") with offices at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxx Xxxx 00000.
WHEREAS, Licensor and CAl formed an LLC under the name of the Airport
Grill, LLC on February 15, 1995 and executed an Operating Agreement in
connection therewith dated March 15, 1995;
WHEREAS, under the terms of such Operating Agreement, the Operator operated
a full service restaurant in Xxxxxx Xxxxxxx International Airport under the name
the "Airport Grill" (the "Restaurant) using proprietary recipes, logos and
systems developed by Licensor;
WHEREAS, Licensor has this date transferred and assigned all of its
Membership and Economic Interest in the Operator to Air Terminal Services, Inc.,
a wholly owned subsidiary of CAl;
WHEREAS, Licensor has developed and continues to develop certain
proprietary recipes and food products described on Exhibit A (the "Proprietary
Products");
WHEREAS, in connection with the sale of such Proprietary Products, Licensor
has developed and owns certain designs, logos, names and trademarks (the "Name
and Marks"). See Exhibit B for description of the Name and Marks;
WHEREAS, the Operator wishes to continue using certain Proprietary Products
and Names and Marks of Licensor in connection with the operation of the
Restaurant, all as hereinafter described;
WHEREAS, Licensor have agreed to permit such use.
NOW THEREFORE, in consideration for the premises hereto and the mutual
covenants and agreements hereinafter contained the parties agree as follows:
1. Grant of Rights
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Licensor represents that it is the absolute owner of the Name and the Marks
as shown on Exhibit B. Licensor hereby grants Operator the exclusive right to
use the Name and Marks in connection with the Restaurant in the Xxxxxx Xxxxxxx
International Airport (the "Airport") Licensor covenants not to license the use
of its Name and Marks to any third party for use at the Airport. Licensor agrees
to indemnify, defend, and hold Operator harmless from and against any losses,
damages, claims or costs (including attorney's fees incurred by Operator in its
enforcing this provision) for trademark or servicemark infringement commenced by
any third party against Operator with respect to the use of its Name or the
Marks by Operator in accordance with this Agreement. In the event that Operator
receives notice of any claims, suit or demand against it on account of any
alleged infringement, unfair competition or similar matter relating to its use
of its Name or the Marks in accordance with the terms of this License Agreement,
Operator shall promptly notify Licensor of such event whereupon Licensor shall
take all action necessary to protect and defend Operator and hold Operator
harmless as described above.
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2. Term
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This Agreement shall be in effect for a term coterminous with the term of a
certain Concession Agreement by and between CA I and the City of Los Angeles
dated March 24, 1995 which grants CAl and the LLC as CAl's subtenant, the right
to operate the Restaurant (the "Contract") and any extension or novation of
same.
3. Design Approval
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Licensor hereby approves the design of the Restaurant, as constructed. No
material changes will be made without Licensor's prior approval which shall not
be unreasonably withheld.
4. Sale of Proprietary Products and Fees
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4.1 In consideration for the foregoing Operator agrees to feature the Names
and Marks in the Restaurant and sell certain Proprietary Products throughout the
Term of this Agreement.
4.2 In connection with the preparation and sale of Proprietary Products,
Operator covenants to:
(a) strictly abide by all recipe formulations related to such products,
including specifications for production, cooking, temperature and
holding times;
b) insure that wholesome and unadulterated ingredients are used in the
production of the Proprietary Products and that such ingredients meet
the grade levels prescribed by Licensor in its recipes;
(c) maintain quality standards described in Licensor's Manuals, copies of
which have been delivered to and received by Operator. Means and
methods of production shall be maintained using the existing system at
the Airport Grill.
(d) to use proprietary ingredients purchased from approved suppliers where
use of such items is specified by Licensor and to abide by established
shelf life set for such items;
(e) to use approved and/or specified packaging for the Proprietary
Products;
(f) obtain prior approval from Licensor for all uses of Licensor's Marks;
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(g) use all reasonable efforts to obtain Department of Aviation ("DOA")
approval from time to time as necessary, for recipe alterations and
the sale of new Proprietary Products that may be introduced elsewhere
by Licensor with the understanding that no such changes may be
implemented without the prior approval of DOA.
4.3 Operator shall pay Licensor a royalty for the use of its Name and Marks
equal to 2 1/2% of the first $5MM in annual Gross Revenues, as defined below,
derived from the sale of food and beverages in the Restaurant, plus 4% of all
annual Gross Revenues in excess of $5MM derived from the sale of food and
beverages in the Restaurant. As used herein, Gross Revenues shall be defined in
accordance with Section 4.8 of the Contract, a copy of which is attached as
Exhibit C. Payment shall be made on a monthly basis, with each such payment due
and payable on the 2Oth day of the following month.
4.4 Licensor shall have the right to audit (at its sole cost and expense)
all records relating to Operator's Gross Revenue at the Restaurant and the
calculation of fees payable hereunder for a period of one year following each
payment period.
5. Methods and Standards of Operation
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5.1 Maintenance and Repair. Operator shall at all times maintain the
Restaurant in good condition and repair and shall be solely responsible for
maintenance, cleanliness, repair and replacement (where necessary to maintain it
in good operating condition), and any liabilities arising therefrom, including
but not limited to all signs, furniture, fixture, equipment and any other
tangible property on and about the Restaurant.
5.2 Compliance with Laws. Operator shall operate the Restaurant in strict
compliance with all applicable laws, rules, and regulations, of governmental
authorities, including, but not limited to, any and all alcoholic beverage
control laws and regulations. Operator shall procure and continuously maintain
thereafter all necessary permits and licenses required for the operation of the
Restaurant.
5.3 Inspection. Upon reasonable advance notice, Licensor, or their
employees may, but shall not be obligated to inspect the Restaurant during
regular operating hours and interview Operator's managers at any reasonable time
to determine that the Restaurant is being operated in accordance with the terms
of this Agreement and to ensure the protection of the Names and Marks, and the
goodwill associated therewith.
5.4 Operator acknowledges that changes to the menu offerings at the
Restaurant must be approved by Licensor in advance.
5.5 Operator covenants that the Restaurant will be managed by a manager who
has been properly trained with respect to Licensor's system and the preparation
and sale of the Proprietary Products. At least one of Operator's managers shall
have satisfactorily completed Licensor's formal training program at all times
thereafter during the term of this Agreement.
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6. Termination
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6.1 In the event either party fails to fulfill, in any material and
substantial respect, its obligations hereunder and such failure continues
unremedied for twenty (20) days after receipt of written notice of the
particular failure (except where such failure or refusal is due to a "Force
Majeure" as described in Section 8 hereof), the other party may terminate this
Agreement by furnishing the first party with written notice of its intent to do
so.
6.2 If the particular failure to perform described above cannot be cured
within the applicable curative periods provided above, the breaching party shall
have a reasonable time thereafter in which to remedy the problem provided that
it is diligently and continuously making any and all reasonable efforts required
to correct the problem.
6.3 Upon termination of this Agreement, by lapse of time or otherwise, all
matters, rights and liabilities existing on the date of termination between the
parties hereto shall be determined by the parties hereto as of such termination
date, and discharged as promptly as possible thereafter. No termination shall be
effective until all matters rights and liabilities between the parties are
resolved.
6.4 Operator acknowledges that upon and after the expiration or termination
of this Agreement, all rights granted by Licensor hereunder shall forthwith
revert to Licensor, and Operator will remove from its signage at the Airport any
reference to the Marks or the Name.
7. Indemnification
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Each party (the "First Party") agrees to indemnify, defend and save and
hold harmless the other (the "Second Party") from and against all suits and
claims that may be based on any injury or alleged injury to any person
(including death) or to the property of any person not a party hereto, that may
arise, or that may be alleged to have arisen out of the negligence or
intentional action or omission of the First Party or that of its employees,
servants or agents. In any such event, the First Party, at its own cost and
expense, shall pay all reasonable charges of attorneys and all costs and other
expenses arising therefrom or incurred by the Second Party in connection
therewith. The foregoing indemnity shall not apply with respect to any injuries
which may be alleged to have arisen out of the negligence or intentional action
of the First Party if and to the extent the same shall be ultimately determined
to have arisen out of the negligence or intentional action or omission of the
Second Party.
8. Operator's Insurance
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8.1 Operator shall carry: (a) Worker's Compensation insurance in such
amount as is required by the laws of the State of California) Comprehensive
general liability insurance (commercial, dram shop and automobile liability
coverages) with limits of not less than $1,000,000 covering each person and
$5,000,000 covering each occurrence and property damage liability insurance,
with limits of not less than $1,000,000 covering each occurrence and $3,000,000
in the aggregate (with no exclusion for liability assumed by contract) and (c)
blanket crime insurance covering its employees in a minimum amount of $500,000.
Operator shall deliver to Licensor prior to commencing operations hereunder and
then on or prior to, the expiration date of any then existing policies in the
future during the Term hereof, a certificate or certificates evidencing that
such insurance coverages are in effect for a period of not less than one year
from the date of such certificate. All policies shall contain a clause providing
in substance that such policies shall not be canceled or any material provisions
thereof amended adversely to the Licensor unless it shall have been first given
at least thirty (30) days advance notice of such termination or of any such
proposed amendment. Operator shall cause the Licensor to be named as an
additional insured on its liability insurance policies for liability arising out
of Operator's responsibilities under this Agreement, including but not limited
to Section 7 above.
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8.2 All such policies may be provided under blanket and/or umbrella
policies carried by the Operator.
8.3 The insurance required by Section 8.l shall be primary insurance and
the insurer shall be liable for the full amount of any loss up to the total
limit of liability required without the right of contribution of any other
insurance coverage held by the Licensor.
8.4 This Section 8 is subject to all limitations identified in Section 7,
respecting Indemnification. Nothing in this Section 8 shall be construed as
requiring liability coverage and/or indemnification of the Licensor for
Licensor's negligence or willful action or omission.
9. Force Majeure
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It is expressly understood and agreed that failure or delay on the part of
either party hereto in the performance in whole, or in part, of the terms and
conditions of this Agreement shall not constitute a breach hereof, nor a default
hereunder, if such failure or delay is attributable to acts of God, fire,
floods, inevitable accident, or riots, insurrection, public commotion, strikes
or labor disturbances, embargo, emergency or governmental orders, regulations,
actions, priority or other limitations or restrictions, or unforeseen causes
interfering with personnel, sales, source of supplies, production,
transportation and delivery, or for any cause beyond the control of either party
("Forces Majeure").
10. Consents and Approvals
----------------------
Where consent or approval of or authorization (the "Consent") from the
Licensor is required hereunder, such Consent shall mean the Consent of a Vice
President of Licensor. Where Consent of Operator is required hereunder such
Consent shall mean that of the President of a member of Operator. Each party
agrees that whenever prior Consent of a proposed action is required, it will not
unreasonably withhold or delay such Consent. Failure to provide an explanation
for disapproval shall be considered "unreasonable" per se. Each party also
agrees that if it fails to either approve or disapprove a request for a period
of ten days or longer, the other party shall have the right to construe such
silence as Consent.
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11. Arbitration
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Except as otherwise therein provided, if any controversy should arise
between the parties in the performance, interpretation or application of this
Agreement, either may serve upon the other a written notice stating that such
party desires to have such controversy adjudicated by a board of three
arbitrators and naming the person whom such party has designated to act as an
arbitrator. Within fifteen (15) days after receipt of such notice, the other
party shall designate a person to act as arbitrator and shall notify the party
requesting arbitration of such designation and the name of the person so
designated. The two arbitrators designated as aforesaid shall promptly select a
third arbitrator, and if they are not able to agree on such third arbitrator,
then either arbitrator, on five (5) days notice in writing to the other, or both
arbitrators shall apply to JAMS/ENDISPUTE to designate and appoint such third
arbitrator with same to be selected by the "strike-off method". If the party
upon whom such written request for arbitration is served shall fail to designate
its arbitrator within fifteen (15) days after receipt of such notice, then the
arbitrator designated by the party requesting arbitration shall act as the sole
arbitrator and shall be deemed to be the single, mutually approved arbitrator to
resolve such controversy. The decision and award of a majority of the
arbitrators or of such sole arbitrator shall be binding upon all parties hereto
and shall be enforceable in any court of competent jurisdiction. Such decision
and award may allocate the costs of such arbitration to the parties equally or
disproportionately between the parties. Any arbitration pursuant to this
paragraph shall take place in Los Angeles, Califorma.
Notwithstanding the foregoing, for all disputes in which the amount in
controversy is less than $250,000, the parties agree that one arbitrator shall
be chosen from a list provided by JAMS/ENDISPUTE, using the strike-off method.
The nonprevailing party in any such action agrees to pay the prevailing
party's costs and reasonable attorneys' fees incurred in connection therewith.
Except as otherwise provided herein, any arbitration pursuant to this Agreement
shall be in accordance with the rules and procedures of JAMS/ENDISPUTE.
12. Assignment
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This Agreement and all rights hereunder are personal to Licensor and
Operator, and neither party shall, without the prior written consent of the
other, assign, mortgage, sublicense, or otherwise encumber this Agreement and
its rights hereunder, by operation of law or otherwise. Notwithstanding the
foregoing, Operator shall have the unilateral right to assign its rights and
obligations hereunder to CA One Services, Inc., which such assignment being
effective upon delivery of notice of same.
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13. Notices
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Whenever provision is made in this Agreement for the giving, service or
delivery of any notice, statement or other instrument, such notice shall be in
writing and shall be deemed to have been duly given, served and delivered either
upon personal delivery, by facsimile, or, if mailed, when deposited in the
United States mail, proper postage paid, registered or certified mail, addressed
to the party entitled to receive the same at its address first set forth above,
or to such other mailing address as the parties may be written notice designate.
14. Miscellaneous
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14.1 Nothing contained in this Agreement shall be construed in any manner
whatsoever to constitute or appoint Operator as the agent or legal
representative of Licensor, or to place the parties in the relationship of
partners or joint venturers. Neither party shall have any right or authority
hereunder to obligate or bind the other in any manner whatsoever.
14.2 The parties agree to comply with all laws, statutes and ordinances
relating to the operation conducted hereunder and to each party's rights,
obligations and duties hereunder. Each party agrees to indemnify and hold
harmless the other party, including its officers, directors, principals,
employees, agents and successors, from and against any and all claims,
liabilities, losses, damages, costs, expenses, obligations or deficiencies
arising out of or by reason of such party's failure to comply with any such
laws.
14.3 Subject to the provisions of Section 12 above, this Agreement shall be
binding upon and inure to the benefit of the respective parties and their
successors, assigns and transferees.
14.4 The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision.
14.5 This Agreement shall be construed in accordance with and governed by
the laws of the State of California.
14.6 This Agreement contains the sole and entire agreement between the
parties with respect to the subject matter hereof, and shall supersede any and
all other agreements between them. The parties acknowledge and agree that
neither of them has made any representations with respect to the subject matter
of this Agreement, or any representation including the execution and delivery
hereof, except such representations as are specifically set forth herein, and
each of the parties acknowledges that it has relied on its own judgment in
entering into the same.
14.7 No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid unless the same is
made in writing and duly executed by the party to be charged therewith. No
evidence of any waiver or modification shall be offered or received in evidence
in any proceeding, arbitration, or litigation between the parties arising out of
or affecting this Agreement, or the rights or obligations of any party
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.
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14.8 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
GRILL CONCEPTS, INC.
By:
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AIRPORT GRILL, LLC
By: CA ONE SERVICES, INC.,
Its Member
By:
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By: AIR TERMINAL SERVICES, INC.
Its Members
By:
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