Master License Agreement - Scores Holding Co. Inc., Scores Licensing Corp. and Entertainment Management Services Inc.
AMENDED AND RESTATED MASTER LICENSE AGREEMENT
THIS AGREEMENT, made and entered into this 13th day of November, 2006, by
and between SCORES HOLDING COMPANY, INC., a Utah corporation with its principal
place of business at 533-535 West 27th Street, New York, NY 10001 and SCORES
LICENSING CORP., a New York corporation with its principal place of business at
533-535 West 27th Street, New York, NY 10001 that is a wholly owned subsidiary
of SCORES HOLDING COMPANY, INC. (collectively, "Licensor") and ENTERTAINMENT
MANAGEMENT SERVICES, INC., a New York corporation with its principal office at
533-535 West 27th Street, New York, NY 10001 or designee("Licensee").
W I T N E S S E T H:
WHEREAS, SCORES HOLDING COMPANY, INC. is the owner of the SCORES
trademarks and related intellectual property listed on Exhibit A (the "Scores
Name Trademarks"); and
WHEREAS, SCORES LICENSING CORP. is the owner of the SCORES trademarks and
related intellectual property listed on Exhibit B (the "Diamond Dollar
Trademarks") (the Scores Name Trademarks and the Diamond Dollar Trademarks will
be referred to collectively as the "Scores Trademarks"); and
WHEREAS, Licensee has been and will continue to be engaged in owning,
operating, partnering with and licensing upscale, adult-entertainment cabaret
night clubs/restaurants that will conduct business under the name "Scores" or
other combined name using the name "Scores" and the Scores Trademarks in some
respect (the "Club Business") by and through entities existing or to be formed
to operate specific clubs engaged in Club Business ("Club Subsidiary") (the "EMS
Business");
WHEREAS, pursuant to a Master License Agreement dated March 31, 2003 (the
"Master License Agreement"), Licensee received from Licensor the right and
license to use and sublicense the Scores Trademarks in connection with the EMS
Business and the sale of certain merchandise utilizing the Scores Trademarks as
hereinafter provided; and
WHEREAS, the parties have agreed to amend and restate the Master License
Agreement to conform to the intentions of the parties when the Master License
Agreement was entered into and to the course of conduct consistently engaged in
by the parties subsequent thereto.
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 parties agree as
follows:
1. LICENSE GRANT.
(a) EMS Business. Licensor hereby grants to Licensee and Licensee accepts,
an exclusive, world-wide license to use the Scores Trademarks during the
Term in connection with the EMS Business in similar fashion to the
original "Scores" nightclub located at 333 E. 60th Street, New York, New
York 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, an 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 each respective location engaged in the Club Business by a Club
Subsidiary, including the right to sell any merchandise utilizing the
Scores Trademarks relative to a specific Club Subsidiary over the Internet
on a site maintained by the Club Subsidiary and by mail order, catalog or
at any other location or in any other channel maintained by the Club
Subsidiary specific to the Club Subsidiary's Club Business.
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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 each Club
Subsidiary licensed to use the Scores Trademarks in connection with club
Business during the term hereof. Gross Revenues shall mean 100% of a Club
Subsidiary's receipts received from a Club Subsidiary's operation of Club
Business, less only actual sales tax paid by the Club Subsidiary.
(b) Non-Club Subsidiaries. Should Licensee enter into a sublicense with
any entity that is not a Club Subsidiary, but that desires to license and
use the Scores Trademarks, then Licensee shall pay to Licensor a royalty
of 50% of the revenues paid to Licensee by the third party entity for use
of the Scores Trademarks. Notwithstanding the foregoing for so long as any
shareholder, officer or director of Licensee shall serve at the same time
serve as an officer or director of Licensor, Licensee shall pay to
Licensor a royalty of 100% of the revenues paid to License by the third
party entity for use of the Scores Trademarks. For the purposes of the
balance of this Agreement, Non-Club Subsidiaries will be required to
comply with the same obligations under this Agreement applied to Club
Subsidiaries and are included in the definition thereof, with the
exception of the royalty amount and calculation thereof.
(c) Royalty Reports. Licensee shall furnish Licensor with written reports
describing in detail all sales that are required to be provided by each
Club Subsidiary as and when received from the Club Subsidiary. Club
Subsidiaries will be required to provide reports within seven (7) days of
the end of each month. The reports will be adjusted (if required) on a
quarterly basis, not later than ten (10) days following the end of each
calendar quarter period ending in March, June, September and December of
each year.
(d) Payment. Payment of royalties due under this Paragraph shall be made
within twenty (20) days of forwarding of each royalty report set forth
above.
3. SUBLICENSES.
(a) Club Business. Licensee will cause each Club Subsidiary to enter into
a sublicense agreement to pay to Licensee, at a minimum, a non-refundable
royalty equal to four and 99/100 percent (4.99%) of the Gross Revenues of
the Club Subsidiary earned during the term of any such sublicense. Gross
Revenues shall mean 100% of Club Subsidiary's receipts, less only actual
sales tax paid by the Club Subsidiary. These revenues will be paid to
Licensor under section 2 above.
(b) Further Terms of Sublicense. Each Club Subsidiary will execute an
agreement that is at least as restrictive as this Master License
Agreement, and that shall contain identical terms and conditions with
respect to use, ownership and limitations of the Scores Trademarks, and
require Club Subsidiaries to provide payment and royalty reports as set
forth in Section 2. The Sublicenses will be non-exclusive and will include
provisions applicable to the Club Subsidiary of similar force and effect
of sections 4- 7, 9-11 and 14-20 hereof.
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4. 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 EMS 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 twenty-four 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.
5. 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 4 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.
6. BOOKS AND RECORDS; AUDIT.
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. Licensor may
also direct it's certified public accountants to audit records of
Licensee, and Licensee shall reasonably cooperate in any such 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.
7. INTELLECTUAL PROPERTY RIGHTS.
(a) All copyrights, trademarks and/or patents in the Scores Trademarks and
related intellectual property belong solely to Licensor and are within the
scope of the license granted herein. Upon termination of this Agreement
all intellectual property rights and rights granted herein in the Scores
Trademarks immediately revert to Licensor 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. 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 Licensor's
exclusive ownership of all intellectual property rights in and to 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.
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(b) Application and Registration. Licensor shall, at its own expense and
in its own discretion, obtain and maintain trademark protection for
whatever name or other protectable feature of the Scores Trademarks it
deems appropriate.
8. 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.
9. OFFENSIVE LITIGATION.
Licensee agrees to give Licensor prompt notification 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,
infringement 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.
10. 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.
11. 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 with respect to any Club Subsidiary,
Licensee shall use it's best efforts to collect sums due by a Club
Subsidiary within the relevant thirty (30) day period. Upon notice to
Licensor that royalties are due by a Club Subsidiary, the cure period
shall be extended to ninety (90) days to allow Licensee to resolve the
issue with the Club Subsidiary. Should Licensee be unable to resolve the
issue or collect the royalties from the Club Subsidiary, then the parties
shall reasonably agree to a payment schedule to pay the royalties due
within a reasonable time.
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(b) Any termination under this paragraph will be without prejudice to the
rights and remedies of either party with respect to any provisions or
covenants arising out of breaches committed prior to such termination.
(c) Licensee may terminate this Master License Agreement on sixty (60)
days written notice to Licensor.
(d) 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. The parties acknowledge that the effective and proper
performance of the provisions of this Agreement is dependent upon several
particular individuals employed by Licensee, including but not limited to
Richard Goldring, Elliot Osher and William Osher.
12. TERM.
Subject to Paragraph 11, the Term of this Agreement shall have commenced
on March 31, 2003 and continue for a period of twenty (20) years. Licensee
shall have six (6) consecutive five-year options to renew this Agreement
provided it is not in breach of this Agreement. Each option will be
exercised automatically, unless notice of termination for default is given
by Licensor at least ninety (90) days prior to the end of the Term (as the
same may be renewed or extended) of the Agreement and in such case
Licensee will have the ninety (90) day period to cure any noticed default.
13. 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.
14. 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.
15. 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: Adam S. Gottbetter, Esq., Kaplan Gottbetter & Levenson,
LLP, 630 Third Avenue, New York, NY 10017.
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16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
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(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-1 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 hereto have executed this Agreement of
Seven (7) pages as of the date first written above.
SCORES HOLDING COMPANY, INC. ENTERTAINMENT
MANAGEMENT SERVICES, INC.
By: /s/Curtis Smith By: /s/ Richard Goldring
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Title: CFO Title: President
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SCHEDULE A
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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)