SUBLICENSE AGREEMENT
THIS AGREEMENT, made and entered into this ______ day of
_____________,
2004, by and between
ENTERTAINMENT MANAGEMENT SERVICES, INC., a New York
corporation with its
principal office at 533-535 West 27th Street, New York,
New York 10001, or designee
("Licensor"), and DBD MANAGEMENT, INC. ("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is the exclusive owner of the right to sublicense
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 a premium
adult-entertainment nightclub
located at 3411 North Federal Highway (the
"Location"), which will
conduct business under the name "Scores Ft. Lauderdale";
and
WHEREAS, Licensee hereby will receive the right and license to use
the
Scores Trademarks in
connection with the operation of the Location, and the
sale
of certain merchandise, for
the Term (as defined below) (the "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 hereby is
acknowledged by both parties, the parties agree as
follows:
1.
LICENSE GRANT:
a. Business.
Licensor hereby grants to Licensee and Licensee accepts,
a non-exclusive (except as provided in subparagraph (c)
below)
license to use the Scores Trademarks during the Term in
connection
with the Business subject to the terms and conditions of
this
License Agreement. Licensor hereby grants to Licensee and
Licensee
accepts, an exclusive lease of, and license to the
ScoresFtLauderdale.com URL for the website for the
Business.
b.
Merchandising. Licensor hereby grants to Licensee, on the
terms
and conditions set forth herein, a non-exclusive (except
as
provided in subparagraph (c) below) license during the Term to
use
the Scores Trademarks in connection with the retail sale
of
commercial merchandise, including tee-shirts, sweat shirts,
sweat
pants, jackets, baseball hats, key rings and other
similar
merchandise, all to be sold at and out of the Business,
including
the right to sell any merchandise utilizing the Scores
Trademarks
relative to the Business over the Internet on a site maintained
by
the Business and by mail order, catalogue or at any other
location
or in any other channel specific to the Business,
provided
further, that Licensee will purchase all merchandise from
Licensor
at cost plus a twenty-five percent (25%) markup, but not more
than
what the Licensee currently pays for similar products.
<PAGE>
c. Licensee
shall have exclusivity within twenty (20) miles of the
Location in Ft. Lauderdale, Licensor will not open any
adult
entertainment nightclub, or license use of the Scores
Trademarks
to any other person or entity, within a twenty (20) mile radius
of
the Location.
d. Nothing
contained herein shall prohibit Licensee from
advertising
its location throughout the State of Florida, the United
States,
and the world.
2.
ROYALTIES:
a. AMOUNT.
Beginning on the one hundred and twenty-first day
(121st)
day of the first day of operation as SCORES-Fort Lauderdale,
the
Licensee agrees to pay four and 99/100 percent (4.99%) of
the
gross revenues
of Licensee earned at the location during the term
hereof, above two hundred and fifty thousand dollars
($250,000.00)
per month (cumulative). After the 121st day, however, the
minimum
payment per month shall be four thousand dollars
($4,000.00).
Gross Revenues shall mean one hundred percent (100%) of
Licensee's
receipts received from the Business operation, less all
actual
local sales taxes paid, and amounts specifically designated
by
customers on credit card receipts as "tips for service",
credit
card discount fees, complementary food and beverage sales.
Gross
Revenues include all revenues from operation of the
Business,
including, but not limited to, liquor revenue, beer
revenue,
champagne revenue, shot girl house fees, wine revenue,
non-alcoholic beverage revenue, food revenue, party
revenue,
admission fees club, admission fees private revenue,
candy
revenue, concession-cigarette, concession-bathroom,
concession-massage, concession-tarot, dressing room rent,
house
fees-entertainers, house fees-DJ's, house fees-floor
manager,
house fees-service personnel, feature-calendar,
feature-novelty,
feature-video, feature-cigar and internet revenue, and also
will
include the fee charged to customers for the purchase of
Diamond
Dollars (r) and the fee paid by entertainers for cashing
in
Diamond Dollars (r).
b. MERCHANDISE
ROYALTIES. Licensee will purchase all re-sellable
Merchandise from Licensor, or Licensor's authorized
affiliate.
Licensee will pay for all such Merchandise on a cost
plus
twenty-five percent (25%) markup basis, unless otherwise
agreed,
but not more than what the current Licensee pays for
similar
products.
<PAGE>
c.
ROYALTY REPORTS.
Licensee shall furnish Licensor with written
reports describing in detail all sales relative to the
Business.
The reports shall be prepared and sent to the Licensor not
later
than seven (7) days following the fifteenth (15th) and last day
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.
d. 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. Payment for merchandise will be under
Licensor's
standard merchandise sale and payment terms.
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 Business, and Licensor will have the
right
to approve all advertisements, promotional, marketing, and
other
similar materials, including, but not limited to the images and
format
of Diamond Dollars (r) for the Location. Furthermore, prior
to
releasing or using any promotional, marketing advertising or
other
similar materials which 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 twenty-four (24) months but intends to do so in
a
media not used by Licensor in the twenty-four (24) month
period
preceding the proposed use, Licensee first shall obtain the
prior
written consent of Licensor for such use, which shall not
be
unreasonably withheld. In connection with obtaining such
consent,
Licensee shall send copies of all materials and media for proposed
use
so that Licensor can evaluate thoroughly the proposed use.
Licensor
agrees to inform the Licensee of its decision regarding any
approvals
within twenty-four (24) hours of receiving all materials and media
for
approval. The failure to receive notice from Licensor that it
objects
to such materials in media shall be deemed its approval. Licensor
also
will have general approval over the continuing operations of
the
Business so as to preserve the value, goodwill and reputation of
the
SCORES Trademarks, but will have no control over day-to-day
operating
or
hiring and firing, and will not do anything that violates the
Lease
Agreement with M.J. Peters.
1.
COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS:
Licensee is responsible for the compliance with all applicable laws
and
safety standards regarding the operation of the 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.
<PAGE>
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
r
