AGREEMENT BETWEEN PARTIES
AGREEMENT
BETWEEN PARTIES
This
AGREEMENT
BETWEEN PARTIES (this
"Agreement"), dated as of this 5th day of August, 2005, is made by and among
XXXXXXX
XXXXXXXX CORPORATION,
a
Delaware corporation (“DCC”
or
“Licensor”) and SHELLS
SEAFOOD RESTAURANTS, INC., a
Florida
corporation (“SSRI”
or
“Licensee”) (together hereinafter referred to as the “Parties” and,
individually, as a “Party”).
RECITALS
WHEREAS,
pursuant to an Assignment of Assets dated July 15, 1992, between Xxxx Xxxxxxxx
Corporation (“Assignor”)
and
DCC (the “Assignment
of Assets”),
DCC
became the assignee of certain service marks licensed under an Agreement for
Licensing of Service Marks dated January 1, 1992 (the “Agreement
for Licensing of Service Marks”)
between Shells, Inc. and Assignor, and, as assignee, DCC obtained, inter
alia,
all the
rights to use the service marks “Shells” and “Shells Seafood, Shellfish &
Whatnot” (the “Service
Marks”)
for
the operation of restaurants in specified trade areas for a period of
ninety-nine years, including the operation of a restaurant in the trade area
as
set forth on the attached Exhibit A (the “Carrollwood
Trade Area”);
WHEREAS,
in
addition, pursuant to the Assignment of Assets, DCC acquired all
rights to
sublicense the Service Marks
in the
Carrollwood Trade Area to Shells of Carrollwood Village, Inc. (the “Sublicense
Agreement”);
WHEREAS,
on
May
14, 1993, SSRI and Shells, Inc. entered into an Asset Purchase Agreement whereby
SSRI acquired the assets of Shells, Inc., including the Service Marks and other
proprietary information, and, subsequently, entered into a Management and
License Agreement dated July 29, 1993, between SSRI and Shells of Carrollwood
Village, Inc. (“Carrollwood
Village”),
as
amended by an Amendment to the Management and License Agreement dated July
29,
1993 and a Second Amendment to Management and License Agreement dated October
4,
2001 (together, the “Management
Agreement”),
whereby SSRI agreed to provide
management services and proprietary rights to Carrollwood Village for use in
its
restaurant located in the Carrollwood Trade Area (the “Carrollwood
Store”);
and
WHEREAS,
DCC
and
SSRI desire to enter into an agreement, to be effective upon the occurrence
of
specific conditions precedent, whereby DCC shall license to SSRI use of the
Service Marks in the Carrollwood Trade Area.
NOW,
THEREFORE,
in
consideration of the foregoing and the agreements set forth below, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE
1
LICENSE
1.1 License.
DCC
hereby grants to Licensee the exclusive right to use the Service Marks in
connection with Licensee’s operation of one or multiple restaurants in the
portion of the Carrollwood Trade Area set forth in Exhibit B (the “Limited
Carrollwood Trade Area”) under the terms and conditions of this Agreement.
Licensee shall have the right to use the Services Marks in the Limited
Carrollwood Trade Area to, open one or more restaurants in the Limited
Carrollwood Trade Area and to sublicense the use of the Service Marks to third
parties in the Limited Carrollwood Trade Area. Subsequent to opening a
restaurant in the Limited Carrollwood Trade Area depicted in Exhibit B, Licensee
shall have the rights as set forth in this Section 1.1 to open additional
restaurants and to sublicense the use of the Service Marks to third parties
within the Carrollwood Trade Area; provided, however,
that
SSRI shall be required to obtain DCC’s prior written approval,
which
approval may be withheld in DCC’s
sole discretion only in the event SSRI desires to open a restaurant within
the
South Tampa Trade Area and the North Tampa Trade Area as set forth in Exhibit
C
which trade areas overlap and extend into the Carrollwood Trade
Area.
1.2 Term.
The
initial term of this Agreement shall be deemed to have commenced on the date
of
this Agreement and shall continue for as long as Licensee owns and operates
restaurants in the Carrollwood Trade Area, unless terminated earlier pursuant
to
Article 3.
1.3 Effective
Date.
The
License granted in Sections 1.1 and 1.2 shall become effective on the Effective
Date (as defined in Section 7 of this Agreement).
ARTICLE
2
LICENSE
FEE
2.1 License
Fee.
DCC
shall be entitled to receive from SSRI and SSRI shall be obligated to pay to
DCC
on or before the 15th
day
immediately following the end of the prior month a fee in the amount of two
percent (2%) of the gross receipts of each Shells Seafood Restaurant operated
or
sublicensed by SSRI within any portion of the Carrollwood Trade Area. For
purposes of determining gross receipts for this Section 2.1, gross receipts
shall be calculated in the same manner as gross receipts are calculated for
the
following sublicensees of DCC: Shells of Sarasota South, Inc., and Shells of
North Tampa, Inc. In the event that both Shells of Sarasota South, Inc., and
Shells of North Tampa, Inc. cease to operate, gross receipts shall continue
to
be calculated in the same manner as previously calculated by Shells of Sarasota
South, Inc., and Shells of North Tampa, Inc.
ARTICLE
3
USE
OF SERVICE MARKS
3.1 SSRI
agrees to use the Service Marks in the Carrollwood Trade Area only in connection
with the operation or sublicensing of Shells Seafood restaurants.
3.2 The
foundation of the value of the Service Marks is the establishment and
maintenance of a reputation among the public for the operation of high quality
restaurants. A fundamental requirement of this license is adherence by SSRI
to
the Shells Seafood restaurants’ standards and policies, as such may be amended
and revised during the term of this Agreement, providing for the uniform
operation of all restaurants licensing the Service Marks. Compliance by SSRI
with the foregoing standards and policies in conjunction with the use of the
Service Marks provides the basis for the wide public acceptance of the Service
Marks and its valuable goodwill. Adherence by SSRI to all aspects of the
standards and policies for the uniform operation of the Shells Seafood
restaurants is required at all times.
3.3 DCC
shall
have the right at any time, and from time to time, to have its representatives
enter the premises of any Shells Seafood restaurant in the Carrollwood Trade
Area, with 48 hours notice, and to confer with Licensee’s employees and
customers, for the purpose of inspecting the use of the Service Marks to
determine whether Licensee is in compliance with the terms and conditions
contained in this Agreement.
ARTICLE
4
TERMINATION
4.1 Termination
by DCC.
DCC
shall have the right to terminate this Agreement in the event that SSRI fails
to
cure any default described below within thirty (30) days of the receipt of
written notice by SSRI from DCC stating the reason for such
default:
(a) in
the
event of any breach or default of any of the provisions of this Agreement;
including but not limited to, failure to pay the License Fee as when due
pursuant to the terms of this Agreement;
(b) in
the
event SSRI or a sublicense of SSRI ceases to own and operate a restaurant in
the
Carrollwood Trade Area for any reason other than a Casualty Loss event as
described in Section 4.3 of this Agreement; and
(c) in
the
event of liquidation of assets as a result of bankruptcy proceedings against
SSRI.
4.2 Termination
by SSRI.
SSRI
shall have the right to terminate this Agreement in the event that DCC fails
to
cure any default described below within thirty (30) days of the receipt of
written notice by DCC from SSRI stating the reason for such
default:
(a) in
the
event of any breach or default of any of the provisions of this Agreement by
DCC.
| 4.3 |
Casualty
Loss.
In the event that SSRI is rendered unable, wholly or in part, by
a
Casualty Loss (as defined here in this Section 4.3), to carry out
its
obligations under this Agreement to open and operate a restaurant
in the
Carrollwood trade Area, and provided that SSRI provides DCC with
written
notice that a Casualty Loss event has occurred and SSRI continues
to remit
a license fee in an amount set forth in Exhibit D or, if after December
31, 2006, a license fee equivalent to that remitted applicable to
the same
fiscal month of the previous year, then such cause shall be remedied
as
soon as possible within commercially reasonable standards. All license
fees shall be payable at the times stated in Section 2.1. The term
“Casualty Loss” as used herein shall mean any cause or causes not
reasonably within control of SSRI including, but not limited to,
acts of
God; acts of the public enemy; wars; strikes, lockouts or differences
with
workmen; lightning; earthquakes; fires; storms; floods; washouts;
civil
disturbances; and explosions.
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4.4
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In
the event that a Shells Seafood Restaurant is not open in the Carrollwood
Trade Area due to a Casualty Loss, the license held by DCC in the
Carrollwood Trade Area shall not
terminate.
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ARTICLE
5
RELATIONSHIP
OF THE PARTIES
5.1 Relationship
of the Parties.
Neither
Party shall represent or hold itself out as, an agent, legal representative,
partner, employee or servant of the other Party for any purpose whatsoever.
Neither Party is authorized to make any contract, agreement, warranty or
representation on behalf of the other or to create any obligation, express
or
implied, on behalf of the other.
ARTICLE
6
CONFIDENTIALITY
6.1 Confidentiality.
This
Agreement is to remain confidential. The existence, terms and conditions of
this
Agreement shall be kept strictly confidential by the Parties, except as
necessary: (i) to comply with an order of a court of competent jurisdiction;
(ii) to enforce any terms of this Agreement by legal process, (iii) to comply
with any governmental reporting obligations, or (iv) to discuss with legal
and
business advisors and other licensees.
ARTICLE
7
CONDITION
PRECEDENT OF EFFECTIVE DATE
7.1 Condition
Precedent to Effective Date.
The
transaction contemplated by this Agreement shall become
effective on the date upon which the conditions set forth in Section 7.1(a)
have
been
satisfied (the “Effective Date”):
(a) Upon
the
earlier to occur of either:
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(i)
|
Execution
of written agreements between DCC and Carrollwood Village and SSRI
and
Carrollwood Village by which Carrollwood Village agrees to abandon
or
terminate the Sublicense Agreement
and the Management Agreement; or
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(ii)
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Receipt
by SSRI of a written declaration by DCC representing that Carrollwood
Village has defaulted under the terms of the Sublicense Agreement
and that any cure period available under the terms of the Sublicense
Agreement
for cure of default has expired
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7.2 Deadline
for Opening of Restaurant; Extension of Time.
SSRI
shall use its best commercial efforts to open a Shells Seafood restaurant in
the
Limited Carrollwood Trade Area by October 1, 2005. If SSRI fails to open a
Shells Seafood restaurant by such date, DCC will allow an extension of three
(3)
months from October 1, 2005, for the opening of a restaurant (the “Extension
Period”).
SSRI, as successor to Shells, Inc., agrees that SSRI will not exercise its
rights under paragraph 16(g) of the Agreement for Licensing of Service Marks
to
declare DCC in default due to failure to maintain the operation of a restaurant
in the Carrollwood Trade Area. If SSRI fails to open a Shells Seafood restaurant
by the end of the Extension Period, DCC will grant SSRI additional three month
extension periods (“Additional Extension Periods”). However, commencing April 1,
2006, and on the first (1st)
day of
each month thereafter, SSRI shall pay to DCC a license fee in the amount set
forth in Exhibit D until a Shells Seafood Restaurant is opened in the Limited
Carrollwood Trade Area. All license fees shall be payable at the times stated
in
Section 2.1. In the event no Shells Seafood Restaurant is opened in the Limited
Carrollwood Trade Area by December 31, 2006 (the “Termination Date”), SSRI shall
have no further rights under this Agreement. During the term of all extension
periods and for a period of twelve (12) months after the Termination Date,
SSRI
shall not exercise its right to declare DCC in default due to failure to
maintain the operation of a restaurant in the Carrollwood Trade
Area.
7.3 Failure
of Agreement to Become Effective.
In the
event that the conditions precedent set forth in Section 7.1 (a) have not been
satisfied by the end of the Extension Period or any Additional Extension Period
granted by DCC, this Agreement shall not become effective and shall be declared
null and void, except that the license held by DCC for the Carrollwood Trade
Area shall not terminate due to the lack of a Shells Seafood Restaurant being
opened in the Carrollwood Trade Area, unless DCC fails to operate or license
a
Shells Seafood Restaurant in the Carrollwood Trade Area for a period of twelve
(12) months following the end of the Extension Period or any Additional
Extension Period granted to SSRI.
ARTICLE
8
MISCELLANEOUS
8.1 Descriptive
Headings.
The
descriptive headings herein are inserted for convenience of reference only
and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
8.2 Notices.
All
notices, requests, demands, consents or other communications provided for in
or
to be given under this Agreement shall be in writing and shall be given by
personal service, by prepaid registered or certified airmail (return receipt
requested), by prepaid overnight air courier, or by telex or facsimile
transmission, to the respective parties at the following addresses:
If
to SSRI:
Shells
Seafood Restaurants, Inc.
Attention:
Xxxxxx Xxxxxx
00000
Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx,
Xxxxxxx 00000
with
a copy to:
R.
Xxxx
Xxxxxx, Esq.
Xxxxxx
White Xxxxx Banker P.A.
000
X.
Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx,
Xxxxxxx 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
If
to DCC:
Xxxxxxx
Xxxxxxxx Corporation
Attention:
Xxxxxxx Xxxxxxxx
0000
Xxxxxx Xxxxx Xxxxx
Xxxxx,
Xxxxxxx 00000
with
a copy to:
Xxxxxxxxxx
X. Xxxxxxx, Esquire
Xxxxxxx,
Tucker, Miller, Xxxxxxx & Xxxxx, P.A.
000
Xxxx
Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx,
Xxxxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Notices
shall be deemed given and shall become effective (i) upon receipt if delivered
in person or by facsimile or telex (as conclusively evidenced in the case of
notice by telex by confirmed delivery of a telex copy by an overnight carrier),
(ii) three days after having been delivered to an overnight air courier, or
(iii) five days after having been deposited in the mails as prepaid registered
or certified matter. Any Party may by notice to the others designate a new
address for notices.
8.3 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original, but all of which shall constitute one and the same
agreement.
8.4 Binding
Effect; Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective and successors and permitted assigns.
8.5 The
parties agree that time shall be of the essence of this Agreement.
8.6 Amendment.
This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the parties.
8.7 Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Florida. Each Party hereto irrevocably submits to the exclusive
jurisdiction of the courts located in Hillsborough County, Florida.
8.8 Supercedes
Other Agreements.
To the
extent that anything contained herein is inconsistent with the terms of any
other agreements entered into between the Parties, this Agreement shall
supersede and control such other agreements and to the extent inconsistent
shall
constitute an amendment to the other agreements.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
SHELLS
SEAFOOD RESTAURANTS, INC.
By:
/s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx
X. Xxxxxx
Title:
Executive Vice President
XXXXXXX
XXXXXXXX CORPORATION
By:
/s/ Xxxxxxx
Xxxxxxxx
Name:
Xxxxxxx
Xxxxxxxx
Title:
President
EXHIBIT
A
CARROLLWOOD
TRADE AREA
“A
circular area having a diameter 20 miles long and having as the midpoint of
its
diameter the business premises located at 00000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxxxx,
Xxxxxxx.”
EXHIBIT
B
LIMITED
CARROLLWOOD TRADE AREA
Property
lying within an area bounded by Xxx Xxxx on the North, Xxxxx Boulevard on the
South, North Xxxx Xxxxx on the East, and Xxxxxxx Road north along Xxxx Highway
on the West
AND any
property which may be accessed via private ingress and egress to and from Xxx
Xxxx, Xxxxx Boulevard, North Xxxx Xxxxx and Xxxxxxx Road.
EXHIBIT
C
NORTH
TAMPA TRADE AREA
A
circular area having a diameter 20 miles long and having as the MIDPOINT OF
ITS
DIAMETER the business premises located at 00000 Xxxxx 00xx
Xxxxxx,
Xxxxx, Xxxxxxx.
SOUTH
TAMPA TRADE AREA
A
circular area having a diameter 20 miles long and having as the MIDPOINT OF
ITS
DIAMETER the business premises located at 000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxxxx,
Xxxxxxx.
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Exhibit
D
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Shells
of Carrollwood Village Inc.
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Calculation
of Monthly License Fees for
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April
2006 to December 2006
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|
Sales
Derived
|
2%
License
|
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Month
|
From
|
Sales
|
Fee
|
|
Apr-06
|
Apr-05
|
137,664
|
$
2,753
|
|
May-06
|
May-05
|
140,007
|
$
2,800
|
|
Jun-06
|
Jun-05
|
166,166
|
$
3,323
|
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Jul-06
|
Jul-04
|
124,792
|
$
2,496
|
|
Aug-06
|
Aug-04
|
119,987
|
$
2,400
|
|
Sep-06
|
Sep-04
|
120,027
|
$
2,401
|
|
Oct-06
|
Oct-04
|
107,407
|
$
2,148
|
|
Nov-06
|
Nov-04
|
129,511
|
$
2,590
|
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Dec-06
|
Dec-04
|
133,258
|
$
2,665
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