SUBLICENSE AGREEMENT
THIS AGREEMENT, made and entered into this 31St day of March, 2003, by and
between ENTERTAINMENT MANAGEMENT SERVICES, INC., a New York corporation with its
principal office at 000 Xxxx 00xx Xxxxxx, 00x!' Xxxxx, Xxx Xxxx, XX 00000 or
designee ("Licensor") and GO WEST ENTERTAINMENT, INC. a New York corporation
with its principal office at 000 Xxxx 00xx Xxxxxx, 00x Xxxxx, Xxx Xxxx, XX
00000.
WITNESSETH:
WHEREAS, LICENSOR licenses the SCORES trademarks and related intellectual
property listed on Exhibit A (the "Scores Trademarks") and has the right to
sublicense the same on the terms set forth herein; and
WHEREAS, Licensee is the owner and operator of an adult-entertainment night
club/restaurant to be located at 000-000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(the "Location") which will conduct business under the name "Scores" ("Scores
West"); and
WHEREAS, Licensee will hereby receive the right and license to use the Scores
Trademarks in connection with the operation of Scores West at the Location, and
the sale of certain merchandise, for the Term (as defined below) (the "Scores
West Business");
NOW, THEREFORE, for and in consideration of the promises, covenants, and
agreements contained herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged by both parties, the patties agree as
follows:
1. LICENSE GRANT.
(a) Scores West Business. Licensor hereby grants to Licensee and Licensee
accepts, a nonexclusive license to use the Scores Trademarks during the Term in
connection with the Scores West Business subject to the terms and conditions of
this License Agreement.
(b) Merchandising. Licensor hereby grants to Licensee, on the terms and
conditions set forth herein, a non-exclusive license during the Term to use the
Scores Trademarks in connection with the retail sale of commercial merchandise,
including tee-shirts, sweatshirts, sweat pants, jackets, baseball hats, key
rings, and other similar merchandise, all to be sold at and out of Scores West
including the right to sell any merchandise utilizing the Scores Trademarks
relative to Scores West over the Internet on a site maintained by Scores West
and by mail order, catalog or at any other location or in any other channel
maintained by Scores West specific to the Scores West Business.
2. ROYALTIES
(a) Amount. Licensee agrees to pay Licensor a non-refundable royalty equal to
four and 99/100 percent (4.99%) of the Gross Revenues of Licensee earned in
connection with Scores West during the term hereof. Gross Revenues shall mean
100% of Licensee's receipts received from Scores West's operation, less only
actual sales tax paid.
(b) Royalty Reports. Licensee shall furnish Licensor with written reports
describing in detail all sales relative to Scores West Business. The reports
shall be prepared and sent to Licensor not later than seven (7) days following
the end of each month. Reports will be adjusted on a quarterly basis (if
necessary), not later than ten (10) days after each calendar quarter period
ending in March, June, September and December of each year.
(c) Payment. Payment of royalties due under this Paragraph shall be made within
ten (10) days of the issuance of each royalty report set forth above,
3. APPROVAL BY LICENSOR. In order to preserve the value, goodwill and reputation
of the Scores Trademarks, Licensee and Licensor shall consult each other during
the Term hereof with regard to any marketing, advertising or promotional
activities pursuant to the Scores West Business. Furthermore, prior to releasing
or using any promotional, marketing, advertising or other similar materials
which have not been approved by Licensor in the twenty-four (24) month period
preceding the proposed use or in the event Licensee intends to utilize any such
materials which have been used in the past 24 months but intends to do so in a
media not used by Licensor in the 24-month period preceding the proposed use,
Licensee shall first obtain the prior written consent of Licensor for such use,
which shall not be unreasonable withheld. In connection with obtaining such
consent, Licensee shall send copies of all materials and media for the proposed
use so that Licensor can thoroughly evaluate the proposed use.
4. COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS. Licensee is responsible for
the compliance with all applicable laws and safety standards regarding the
operation of its business, the Location, other licensed locations and the use of
the Scores Trademarks herein. Licensor's approval of submissions pursuant to
Paragraph 3 above in no way affects, alters, diminishes or waives Licensee's
obligations hereunder or under Licensee's obligation to indemnify Licensor as
set forth herein below.
5. BOOKS AND RECORDS. Licensee shall, for a minimum of three (3) years from
their rendition, keep full and accurate books of account, records, data and
memoranda representing Licensee's sales. Licensee further gives Licensor the
right, at its own cost and expense, to examine said books and records on
reasonable notice, such examination to be conducted in such a manner as to not
unreasonably interfere with the business of Licensee. Licensee shall reasonably
cooperate with Licensor in the event the owner of the Scores Trademarks requests
an audit. Licensor or its representatives shall not disclose to any other
person, firm, or corporation any information acquired as a result of any
examination, provided, however, that nothing contained herein shall be construed
to prevent Licensor and/or its duly authorized representatives from using or
disclosing said information in any court, arbitration, or other action
instituted to enforce the rights of Licensor hereunder.
6. INTELLECTUAL PROPERTY RIGHTS.
(a) All copyrights, trademarks and/or patents in the Scores Trademarks and
-related intellectual propertybelong solely to Licensor and are within the scope
ofthe license granted herein. Upon termination of this Agreement all
intellectual property-rights and rights granted herein in the Scores Trademarks
immediately revert to Licensor or the owner of the Scores Trademarks and
Licensee agrees to return to Licensor all original artwork, models, samples,
prototypes, renderings and drawings incorporating the Scores Trademarks. All use
by Licensee of the intellectual property rights of the Scores Trademarks shall
inure to the sole benefit of Licensor and the owner of the Scores Trademarks.
Licensee shall execute any and all documents necessary to confirm said
reversions of rights and hereby appoints Licensor its attorney-in-fact to
execute any such documents in the event Licensee is unwilling or unable to do
so. Licensee acknowledges the exclusive ownership of all intellectual property
rights in and to the Scores Trademarks by the owner of the Scores Trademarks and
will not take any action to interfere with or challenge said ownership,
including but not limited to registering or attempting to register the same or
similar marks or properties anywhere in the World, nor commence or participate
in cancellation or opposition proceedings.
7. WARRANTY.
(a) Licensor hereby warrants that, to the best of its knowledge, the granting of
the license hereunder or the subsequent commercial exploitation of the license
does not violate the intellectual property or contract rights of any third
party. Licensor further warrants that it has not intentionally violated the
rights of any third party in granting Licensee this license.
(b) Licensee hereby warrants that any goods sold by it bearing the Scores
Trademarks and each component thereof shall be of good quality and free of
defects in design, materials, workmanship and shall comply with all applicable
laws and safety standards.
8. OFFENSIVE LITIGATION. Licensee agrees to give Licensor prompt notif,cation of
any third party's actions which would constitute an infringement of the rights
granted to it by this Agreement. Licensor shall prosecute, at its own
discretion, in ingement actions against any third party infringers and any
recoveries obtained therein shall belong exclusively to Licensor. Licensee
shall, at Licensor's expense, cooperate in all respects with Licensor's
prosecution of said suits, including but not limited to being named as a party
in any such suit, producing documents, appearing as witnesses, etc.
9. INDEMNIFICATION.
(a) Licensor agrees to indemnify and hold harmless Licensee from and against any
and all damage, loss, and expense incurred as a result of the breach of any of
Licensor's warranties herein. This indemnification shall become operative only
after a final judgment, order or decree is issued which contains a finding that
Licensor intentionally infringed upon the rights of a third party. Any claims
made against Licensee which would result in Licensor becoming obligated to
indemnify Licensee hereunder shall not permit Licensee to withhold any amounts
due Licensor hereunder.
(b) Licensee agrees to indemnify, defend, and hold harmless Licensor, its agents
and employees from and against any and all loss and expense arising out of any
claims of personal injury, product liability, wrongful death, negligence, strict
liability or other similar action, in addition to the breach of any of its
warranties hereunder or the violation of any applicable law or safety standard
based on the use of the Scores Trademarks by or on behalf of Licensee and/or its
subsidiary, affiliated, controlled company. Licensee shall maintain, at its sole
cost and expense, premises liability, liquor liability, xxxxxxx'x compensation
(in the amount required by New York State Law), plate glass insurance (as per
Licensee's lease), commercial liability coverage and other customary insurance.
The premises, commercial, and liquor policies must provide coverage of at least
$3,000,000/$3,000,000, naming Licensor as an additional insured, and providing
that such policy cannot be canceled without thirty (30) days prior written
notice to Licensor. In the event any claim is made against Licensor in excess of
the limits of Licensee's insurance set forth, above, Licensor may, at Licensee's
expense, retain counsel of its own choosing to defend said claims. All insurance
shall be primary and not contributory. Licensee agrees to provide Licensor with
a copy of the insurance declarations and/or certificates within 20 days
following the date of this Agreement.
10. TERMINATION.
(a) In case either party fails to perform under or commits or allows to be
committed a breach of any of the several covenants and conditions herein
contained, the other party shall notify such party in writing of such failure or
default and such party shall then have the right to remedy such failure or
default within thirty (30) days. If the default has not been cured within said
thirty (30) days of notice to the defaulting party, then the aggrieved party may
terminate this Agreement immediately by a further notice in writing. If Licensor
shall send notice of default to Licensee based on a failure to pay royalties,
then Licensee shall cure such default within ten (10) days of notice.
(b) Any termination under this paragraph will be without prejudice to the rights
and remedies of either partywith respect to any provisions or covenants arising
out of breaches committed prior to such termination.
(c) If a petition in bankruptcy is filed by or against Licensee, or Licensee
becomes insolvent, or makes an assignment for the benefit of creditors, or any
other arrangement pursuant to any bankruptcy law, or if Licensee discontinues
its business or if a receiver is appointed for it or its business, to the
fullest extent permitted by law at the time of the occurrence, the license
hereby granted shall automatically terminate without any notice whatsoever being
necessary. In the event this License is so terminated, Licensee, its receivers,
representatives, trustees, agents, administrators, successors, and/or assigns
shall have no right to sell, use, exploit or in any way deal with or in the
Scores Trademarks or anything relating to it whatsoever except with and under
the special consent and instructions of Licensor in writing, which they shall be
obliged to follow.
11. TERM. Subject to Paragraph 10, the Term of this Agreement shall commence on
the date first written above and continue as long as Scores West continues in
operation. Upon cessation of operation by Scores West for a period of greater
than one hundred eighty (180) days for any reason other than Force Maj xxxx,
this Agreement shall automatically terminate.
12. REPRESENTATION. It is expressly agreed and understood that neither party
hereto is the agent or legal representative of the other and neither party has
the authority, express or implied to bind the other or pledge its credit. This
Agreement does not create a partnership or joint venture between the two
parties.
13. FORCE MAJEURE. It is understood and agreed that in the event of an act of
the government, war, fire, flood or other natural disaster, or labor or
manufacturing strikes which prevent the performance of this Agreement, such
nonperformance will not be considered a breach of this Agreement, and such
nonperformance shall be excused while, but not longer than, the conditions
described herein prevail. The period of Force Majeure shall not exceed twelve
(12) months.
14. NOTICES. All notices, whenever required in this Agreement, will be in
writing and sent by certified mail, return receipt requested to the addresses
set forth above. Notices will be deemed to have been given two business days
following mailing. A copy of all notices to Licensor shall be sent via regular
mail to:
15. CONTROLLING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York, United States of America and jurisdiction over
the parties and subject matter over any controversy arising hereunder shall be
in the Courts of the State of New York, County of York or the Federal courts
therein. Both parties hereby irrevocably consent to said jurisdiction and venue.
16. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns, but
neither this Agreement, nor any of the rights, interests or obligations
hereunder shall be assigned by Licensee without the prior written consent of
Licensor, and any attempts to do so without the consent of Licensor shall be
void and of no effect. As an express exception to the preceding sentence,
Licensee shall have the right to assign this License to any parent, subsidiary
or affiliated company on written notice to Licensor.
17. ENTIRE AGREEMENT. This writing constitutes the entire agreement and
understanding between the parties. No other oral or written agreements or
representations exist or are being relied upon by either party, all being merged
herein. Any modifications or additions hereto must be made in writing and signed
by both parties.
18. MISCELLANEOUS.
(a) The paragraph headings used herein are for reference purposes only and do
not effect the meaning or interpretation of this Agreement. If any provisions of
this Agreement are for any reason declared to be invalid or illegal, the
remaining provisions shall not be affected thereby.
(b) The failure of either party to enforce any or all of its rights hereunder as
they accrue shall not be deemed a waiver of those rights, all of which are
expressly reserved.
(c) This Agreement may be executed in more than one counterpart, all of which
shall be deemed to be originals.
19. SECURITY INTEREST.
(a) In order to induce Licensor to enter into this Agreement and to secure the
complete and timely performance of Licensee's obligations hereunder, Licensee
hereby grants to Licensor a security interest in the license granted under this
Agreement as well as Licensee's receivables in connection therewith. In the
event Licensee defaults under this license and Agreement, Licensor may enforce
against Licensee all the rights and remedies of a secured creditor upon default
under all applicable laws. In the event Licensee files for bankruptcy under the
U.S. Bankruptcy laws, Licensor may enforce all rights and remedies of a secured
creditor under the U.S. Bankruptcy Code,
(b) Licensee agrees to execute any and all documents necessary to perfect
Licensor's security interest in this license including, but not limited to,
Financing Statement Form UCC-I and any other security agreements and financing
statements evidencing said security interests in such form as may be recorded
and perfected according to the laws of the State of New York and the U.S. Patent
and Trademark Office.
IN WITNESS WHEREOF, the parties hc, to have executed this Agreement of Seven (7)
pages as of the date first written above.
ENTFRTAINIENT MANAGEMENT SYSTEMS, INC.
GO WEST ENTERTAINMENT, INC.
Schedule A
1. U.S. Trademark Registration No. 1855829 for SCORES SHOWROOM with design
(INT 25, 41, 42);
2. U.S. Trademark Registration No. 1830405 for SCORES NEW YORK with design
(INT 25, 41, 42);
3. U.S. Trademark Registration No. 1830135 for SCORES (INT. 6, 41, 42)
