CALGARY, May 28 /CNW/ - Nevada Bob's Canada Inc. (the ''Company'')
announces that the agreement between the Company and Nevada Bob's Pro Shop,Inc. (''Pro Shop, Inc.'') dated February 19, 1997, as amended, (the ''1997 Agreement'') has been terminated. Pro Shop, Inc. is the master franchisor for the ''Nevada Bob's'' business worldwide. Pro Shop, Inc. has sought protection under Chapter 11 of the U.S. Bankruptcy Code and pursuant to Chapter 11, the U.S. Bankruptcy Court for the District of Nevada (the ''Court'') has ordered that a number of the contracts to be performed by Pro Shop, Inc., including
the 1997 Agreement, be terminated.
The 1997 Agreement grants to the Company the exclusive right in Canada to expand the Nevada Bob's system, by way of acquiring Nevada Bob's franchises or otherwise. The Court order does not effect the validity of the individual franchise agreements with Pro Shop, Inc. assumed by the Company, such that the operation of all of the Company's Nevada Bob's stores will not be affected by
the termination of the 1997 Agreement.
Given these developments, and with the consent of the Court, the Company has entered into a interim licensing agreement with Pro Shop, Inc., whereby the Company is given the continuing right to use the ''Nevada Bob's Inc.'' trade name and trade marks in Canada, the right to sub-licence such trade names and trade marks and thereby continue to expand the Nevada Bob's system in Canada. The term of this temporary licence agreement is 90 days ending August 23, 1999. The Company is responsible for paying a royalty to Pro Shop,
Inc., based on the sales of the Company, for the period of the temporary licence agreement.
The Company and Pro Shop, Inc. have further agreed to negotiate in good faith a long term licencing agreement in respect of the use of the ''Nevada Bob's'' name and trade marks in Canada, and the Company is confident that such an agreement will be reached in the very near future.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
-0- 05/28/1999
For further information: Mr. Kevin R. Baker, Q.C. , Chairman of the Board, Mr. Lyle P. Edwards, President, (403) 294-0612, Fax: (403) 269-1715 |
