<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to ____________
Commission file number 0-14030
ARK RESTAURANTS CORP.
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(Exact name of Registrant as specified in its charter)
New York 13-3156768
- --------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
85 Fifth Avenue, New York, N.Y. 10003
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 206-8800
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, $.01 par value NASDAQ/NMS
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X]
<PAGE>
<PAGE>
The aggregate market value at December 18, 1995 of shares of the
Registrant's Common Stock, $.01 par value (based upon the closing price per
share of such stock on the NASDAQ/National Market) held by non-affiliates of the
Registrant was approximately $14,455,586. Solely for the purposes of this
calculation, shares held by directors and officers of the Registrant have been
excluded. Such exclusion should not be deemed a determination or an admission by
the Registrant that such individuals are, in fact, affiliates of the Registrant.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: At December 18,
1995, there were outstanding 3,191,045 shares of the Registrant's Common Stock,
$.01 par value.
Document Incorporated by Reference: Certain portions of the Registrant's
definitive proxy statement to be filed not later than January 29, 1996 pursuant
to Regulation 14A are incorporated by reference in Items 10 through 13 of Part
III of this Annual Report on Form 10-K.
<PAGE>
<PAGE>
PART I
Item 1. Business
General
Ark Restaurants Corp. (the "Registrant or the Company") is a holding
company which, through subsidiaries, operates 29 restaurants, two bakeries and a
cafeteria. Of those facilities, 23 restaurants and two bakeries are owned by the
Company and six restaurants and the cafeteria are owned by others and managed by
the Company.
The Company was formed in 1983 to concentrate the ownership of four
restaurants operated by the the Company's principals since 1975. Until 1987 all
of the Company's facilities were located in the New York City metropolitan area.
In 1987, three facilities were opened in Boston, Massachusetts. Since then the
Company has opened five facilities in the Washington, D.C. metropolitan area,
one in Islamorada, Florida, one in Oxnard, California, one in Rhinebeck, New
York and one in Jersey City, New Jersey.
In addition to the shift from a Manhattan-based operation, the nature of
the facilities operated by the Company has shifted from smaller, neighborhood
restaurants, to larger destination restaurants intended to benefit from high
patron traffic attributable to the uniqueness of the restaurant's location. Most
of the restaurants opened in recent years are of the latter description and the
Company intends to concentrate on developing or acquiring similar facilities in
the future. In fiscal 1995, the Company opened two such restaurants (B. Smith's
in Washington and Bryant Park Grill and Cafe in New York). The Company
contemplates the opening in late 1996 or early 1997 of a group of restaurants in
the 2,100 room hotel to be known as New York, New York Hotel & Casino under
construction in Las Vegas, Nevada.
The names and themes of the Company's restaurants are different except
for the Company's three America restaurants, two B. Smith's restaurants and two
Sequoia restaurants. The menus in the Company's restaurants are extensive,
offering a wide variety of high quality foods at generally moderate prices. Two
of the Company's restaurants, Lutece and An American Place, may be classified as
expensive. The atmosphere at many of the restaurants is lively and extremely
casual. Most of the restaurants have separate bar areas utilized by diners
awaiting tables. A majority of the net sales of the Company is derived from
dinner as opposed to lunch service. Most of the restaurants are open seven days
a week and most serve lunch as well as dinner.
While decors differ from restaurant to restaurant, interiors are marked
by distinctive architectural and design elements which often incorporate
dramatic interior open spaces and extensive glass exteriors. The wall
treatments, lighting and decorations are typically vivid, unusual and in some
cases, highly theatrical.
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The following table sets forth certain information with respect to the
Company's facilities currently in operation.
<TABLE>
<CAPTION>
Name Location Year Opened(1) Restaurant Size Seating Lease
---- -------- -------------- (Square feet) Capacity(2) Expiration(3)
--------------- Indoor- -------------
(Outdoor)
---------
<S> <C> <C> <C> <C> <C>
Museum Cafe Columbus Avenue 1975 1,600 100 1998
New York, NY
(at 77th Street)
Perretti Columbus Avenue 1977 1,600 124 2003
New York, NY
(between 72nd and 73rd
Streets)
Metropolitan Cafe First Avenue 1982 4,000 180-(50) 2006
New York, NY
(between 52nd and 53rd
Streets)
Ernie's Broadway 1983 6,600 300 2008
New York, NY
(between 75th and 76th
Streets)
America 18th Street 1984 9,600 350 2004
New York, NY
(between 5th Avenue
and Broadway)
Woody's (4) Seventh Avenue South 1986 1,700 90 1999
New York, NY
(between Charles and
10th Streets)
B. Smith's (5) Eighth Avenue 1986 8,000 400 2006
New York, NY
(at 47th Street)
Rodeo Bar and Third Avenue 1987 4,300 120 2000
Grill New York, NY
(at 27th Street)
The Marketplace Faneuil Hall Market, 1987 3,000 100 2000
Cafe (4) Boston, Massachusetts
El Rio Grande Third Avenue 1987 4,000 160 2014
(4)(6) New York, NY
(between 38th and 39th
Streets)
The Brewskeller Faneuil Hall Market 1987 1,500 50 2000
(4) Boston, Massachusetts
</TABLE>
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<TABLE>
<CAPTION>
Name Location Year Opened(1) Restaurant Size Seating Lease
---- -------- -------------- (Square feet) Capacity(2) Expiration(3)
---------------- Indoor- -------------
(Outdoor)
---------
<S> <C> <C> <C> <C> <C>
An American Park Avenue 1986 6,000 180 2005
Place New York, NY
(at 32nd Street)
Gonzalez y Broadway 1989 6,000 250 1999
Gonzalez New York, NY
(between Houston and
Bleeker Streets)
America Union Station 1989 10,000 400 2009
Washington, D.C.
Center Cafe Union Station 1989 4,000 200 2009
Washington, D.C.
Sequoia Washington Harbour 1990 26,000 600-(400) 2005
Washington, D.C.
Sequoia South Street Seaport 1991 12,000 300-(100) 2006
New York, NY
Beekman 1766 Mill Street 1991 5,000 225 2001
Tavern Rhinebeck, NY
Mackinac Bar & 384 Columbus Avenue 1991 3,500 130 2004
Grill (4) New York, NY
(between 78th and 79th
Streets)
Canyon Road First Avenue 1984 2,500 130 2004
New York, NY
(between 76th and 77th
Streets)
Louisiana Broadway 1992 4,500 130 1999
Community Bar & New York, NY
Grill (between Houston &
Bleeker Streets)
Oar Bar & Grill Faneuil Hall Market 1987 2,500 130 2000
(4) Boston, Massachusetts
Jim McMullen Third Avenue 1993 6,000 250 2002
New York, NY
(between 76th and 77th
Streets)
Whale's Tail Channel Islands Harbor 1993 10,000 300 2028
Oxnard, California
America Tyson's Corner 1994 11,000 400 2014
McLean, Virginia
B. Smith's(5) Union Station 1994 8,600 280 2009
Washington, D.C.
</TABLE>
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<TABLE>
<CAPTION>
Name Location Year Opened(1) Restaurant Size Seating Lease
---- -------- -------------- (Square feet) Capacity(2) Expiration(3)
---------------- Indoor- -------------
(Outdoor)
---------
<S> <C> <C> <C> <C> <C>
Lutece East 50th Street 1994 2,500 92 2019
New York, NY
(between 2nd and 3rd
Avenues)
Lorelei Restaurant Islamorada, Florida 1994 10,000 400 2029
and Cabana Bar
Columbus Bakery Columbus Avenue 1988 2,000 25 2002
New York, New York
(between 82nd and 83rd
Street)
Bryant Park Grill Bryant Park 1995 [25,000] 180-(1,020) 2025
New York, New York
Columbus Bakery First Avenue 1995 2000 75 2006
New York, NY
(between 52nd and 53rd
Streets)
Market at Newport Office Tower 1995 7,500 250 2015
Newport (4) 525 Washington Blvd.
Jersey City, NJ
</TABLE>
(1) Restaurants are, from time to time, renovated and/or renamed. "Year
Opened" refers to the year in which the Company or an affiliated
predecessor of the Company first opened, acquired or began managing a
restaurant at the applicable location, notwithstanding that the
restaurant name may have changed since that date.
(2) Seating capacity refers to the seating capacity of the indoor part of
a restaurant, therefor available for dining in all seasons and weather
conditions. Outdoor seating capacity, if applicable, is set forth in
parentheses and refers to the seating capacity of terraces and
sidewalk cafes which are available for dining only in the warm seasons
and then only in clement weather.
(3) Assumes the exercise of all available lease renewal options.
(4) Restaurant owned by a third party and managed by the Company.
Management fees earned by the Company are based either on a percentage
of cash flow of the restaurant or a fixed amount or a combination of
the two.
(5) 20% of the stock of each of the corporate subsidiaries operating the
two B. Smith's restaurants is owned by the manager of the restaurant.
The corporate subsidiaries owning or managing all of the other
facilities are wholly-owned by the Company.
(6) The Company owns a 19% interest in the partnership which owns El Rio
Grande.
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<PAGE>
<PAGE>
Restaurant Expansion
During the first quarter of fiscal 1995, the Company opened its second B.
Smith's in Union Station, Washington D.C. During fiscal 1994, the Company
entered into agreements to acquire Lutece in New York City and the Lorelei
Restaurant and Cabana Bar in Islamorada, Florida, both of which acquisitions
were completed in the first quarter of fiscal 1995.
During fiscal 1995, the Company converted a restaurant on Columbus Avenue in
Manhattan into the Columbus Bakery. The Columbus Bakery supplies baked goods to
other facilities of the Company in Manhattan. It also sells at retail, coffee,
baked goods and prepared foods on a "take out" basis or for on premise
consumption. During the first quarter of fiscal 1996, the Company opened another
bakery (Columbus Bakery), operating on a retail basis similar to that of the
existing Columbus Bakery, in premises adjacent to the Company's Metropolitan
Cafe restaurant on First Avenue in Manhattan.
In the third fiscal quarter of 1995, the Company opened a major facility in
Bryant Park, Manhattan. The facility includes a restaurant, the Bryant Park
Grill and an outdoor cafe, the Bryant Park Cafe. The Bryant Park Grill has 180
seats indoors plus 400 additional seats on its roof and in an adjacent outdoor
garden. The Bryant Park Cafe has 620 outdoor seats in the Bryant Park terrace.
The Company has recently signed letters of intent with New York, New York
Hotel & Casino, a joint venture between Primadonna Resorts, Inc. and MGM Grand,
Inc. to design, build and operate a group of restaurants in the 2,100 room Las
Vegas resort casino which is expected to open in December 1996. Under the terms
of the letters of intent, the Company will build a 450-seat America restaurant,
a 150-seat steakhouse and a group of small fast food restaurants in a food court
with a New York theme. The steakhouse will be operated under the name
"Gallaghers" under a license agreement from the owner of the New York restaurant
of that name. In addition, the Company will operate the hotel's room service,
its banquet facilities and its employee cafeteria. The transaction is subject to
the negotiation of definitive agreements.
The opening of a new restaurant is invariably accompanied by substantial
pre-opening expenses and early operating losses associated with the training of
personnel, excess kitchen costs and costs of supervision and other expenses
during the pre-opening period and during a post-opening "shake out" period
until operations can be considered to be functioning normally. The Company
estimates that such pre-opening expenses and early operating losses were
approximately $950,000 in connection with the opening of B. Smith's in
Washington, the Columbus Avenue Bakery and the Company's Bryant Park facilities.
The amount of such pre-opening expense and early operating loss can generally be
expected to depend upon the size and complexity of the facility being opened.
Accordingly, the Company expects to incur extensive pre-opening expenses and
early operating losses in connection with the opening of the planned Las Vegas
operations.
The Company intends to direct its restaurant expertise and financial
resources in developing larger restaurants benefitting from the high patron
traffic of unique locations, such as Sequoia in New York and Washington, America
in Washington, B. Smith's in Washington, Bryant Park and the planned Las Vegas
facility. Nevertheless, the Company also intends to take advantage of other
opportunities considered to be favorable when they occur, such as the
acquisition of the highly regarded restaurant Lutece in the last fiscal year.
Restaurant Management
Each restaurant is managed by its own manager and has its own chef. Food
products and other supplies
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<PAGE>
are purchased from various unaffiliated suppliers in most cases by the Company's
headquarters personnel. The Company's restaurants have two or more assistant
managers and assistant chefs. The executive chef department designs menus and
supervises the kitchens. Financial and management control is maintained at the
corporate level through the use of an automated data processing system that
includes centralized accounting and reporting. The Company has developed its own
proprietary software which processes information input daily at the Company's
restaurants. The Company believes that the information generated by this process
enables it to monitor closely the activities at each restaurant and enhances the
Company's ability to effectively manage its restaurants.
Employees
At December 9, 1995, the Company employed 1,949 persons (including employees
at managed facilities), 36 of whom were headquarters personnel, 124 of whom were
restaurant management personnel, 551 of whom were kitchen personnel and 1,238 of
whom were restaurant service personnel. A number of the Company's restaurant
service personnel are employed on a part-time basis. Changes in minimum wage
levels may affect the labor costs of the Company and the restaurant industry
generally because a large percentage of restaurant personnel are paid at or
slightly above the minimum wage. With the exception of the employees at Lutece
in New York, the Company's employees are not covered by a collective bargaining
agreement. The Company believes its employee relations are satisfactory.
Competition
The restaurant and bar business is intensely competitive and involves a high
degree of risk. The Company believes that a large number of new restaurants and
bars open each year, a significant number of which do not succeed. Even
successful restaurants and bars can rapidly lose popularity due to changes in
consumer tastes, economic conditions and population and traffic patterns. There
is active competition for competent chefs and management personnel and intense
competition among major restaurateurs and food service companies for the larger,
unique sites suitable for restaurants.
Government Regulation
The Company is subject to various federal, state and local laws and
regulations affecting its business, including a variety of regulatory provisions
relating to wholesomeness of food, sanitation, health, safety and licensing in
the sale of alcoholic beverages. A number of the Company's restaurants have open
or enclosed outdoor cafes which require the approval of, or licensing by, a
number of governmental agencies. The suspension by any regulatory agency of the
food service or liquor license of any of the Company's bars or restaurants would
have a material adverse effect upon the affected bar or restaurant and may
adversely affect the Company as a whole.
The New York State Liquor Authority must approve any transaction in which a
shareholder of the Company increases his holdings to 10% or more of the
outstanding capital stock of the Company and any transaction involving 10% or
more of the outstanding capital stock of the Company.
Seasonal Nature of Business
The Company's business is highly seasonal. The second quarter, consisting of
the non-holiday portion of the cold weather season in New York, Boston and
Washington (January, February and March), is the poorest performing quarter. The
Company achieves its best results during the warm weather, attributable
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<PAGE>
<PAGE>
to the Company's extensive outdoor dining availability, particularly at Bryant
Park and Sequoia in Washington (the Company's largest restaurants) and the
Company's numerous outdoor cafes. The Company anticipates that the planned
facility in Las Vegas will operate on a more level basis through the year and,
accordingly, may have the effect of reducing the seasonal nature of the
Company's business as it currently exists.
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<PAGE>
<PAGE>
Item 2. Properties
The Company's facilities and executive offices are occupied under leases.
Most of the Company's restaurant and bar leases provide for the payment of base
rents plus real estate taxes, insurance and other expenses and, in certain
instances, for the payment of a percentage of the Company's sales at such
facility. These leases (including leases for managed restaurants) have initial
terms expiring as follows:
<TABLE>
<CAPTION>
Years Lease Number of
Term Expire Facilities
----------- ----------
<S> <C>
1995-2000 13
2001-2005 8
2006-2010 8
2011-2015 4
2016-2020 0
2021-2025 0
2026-2030 1
</TABLE>
The Company's executive, administrative and clerical offices, located in
approximately 8,500 square feet of office space at 85 Fifth Avenue, New York,
New York, are occupied under a lease which expires in October 2008, which
includes one five year renewal option. The Company maintains an office in
Washington, D.C. for its catering operations, the lease for which expires in
December 1997.
For information concerning the Company's future minimum rental
commitments under non-cancelable operating leases, see Note 6 of Notes to
Consolidated Financial Statements.
Item 3. Legal Proceedings
In the ordinary course of its business, the Company is a party to
various lawsuits arising from accidents at its restaurants and workmen's
compensation claims, which are generally handled by the Company's insurance
carriers.
The employment by the Company of management personnel, waiters,
waitresses and kitchen staff at a number of different restaurants has resulted
in the institution, from time to time, of litigation alleging violation by the
Company of employment discrimination laws. Various discrimination suits are
currently pending, some of which involve substantial claims for compensatory and
punitive damages. The Company does not believe that any of such suits will have
a materially adverse effect upon the Company, its financial condition or
operations.
In the third quarter of fiscal 1995, the Company settled an action
brought by employees at one of the Company's restaurants which alleged
violations of federal and state wage and hour laws. The circumstances that gave
rise to this claim existed at this restaurant only and have since been remedied.
Pursuant to the terms of the settlement the Company paid approximately $375,000
to the plaintiffs (including their legal fees).
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<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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<PAGE>
<PAGE>
Executive Officers of the Company
The following table sets forth the names and ages of executive officers
of the Company and all offices held by each person:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Positions and Offices
---- --- ---------------------
Michael Weinstein 52 President
Vincent Pascal 52 Vice President and
Secretary
Robert Towers 48 Vice President and
Treasurer
Andrew Kuruc 37 Vice President and
Controller
</TABLE>
Each executive officer of the Company serves at the pleasure of the
Board of Directors and until his successor is duly elected and qualifies.
Michael Weinstein has been President and a director of the Company since
its inception in January 1983. Since 1978, Mr. Weinstein has been an officer,
director and 25% shareholder of Easy Diners, Inc., a restaurant management
company which operates two restaurants in New York City. Since 1976, Mr.
Weinstein has been an officer, director and shareholder of Teacher's Restaurant
Limited, which owns and operates another restaurant in New York City. Neither
Easy Diners, Inc. nor Teachers Restaurant Limited is a parent, subsidiary or
other affiliate of the Company. Mr. Weinstein spends substantially all of his
business time on Company-related matters.
Vincent Pascal was elected Vice President, Assistant Secretary and a
director of the Company in October 1985. Mr. Pascal became Secretary of the
Company in January 1994.
Robert Towers has been employed by the Company since November 1983 and
was elected Vice President, Treasurer and a director in March 1987.
Andrew Kuruc has been employed as Controller of the Company since April
1987 and was elected as a director of the Company in November 1989.
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<PAGE>
<PAGE>
PART II
Item 5. Market for the Company's Common Stock and Related Security Holder
Matters
Market Information
Effective December 14, 1994, the Company's Common Stock, $.01 par
value, began trading in the over-the-counter market on the NASDAQ National
Market ("NASDAQ") under the symbol "ARKR." For more than the two-year period
prior thereto, the Company's Common Stock was traded on the American Stock
Exchange ("AMEX"). The high and low sale prices for the Common Stock from
October 2, 1993 through September 30, 1995 are as follows:
<TABLE>
<S> <C> <C>
Calendar 1993
Fourth Quarter 11 1/4 9 1/4
Calendar 1994
First Quarter 11 1/4 8 7/8
Second Quarter 9 1/8 6 3/8
Third Quarter 7 5/8 6 1/2
Fourth Quarter
October 1 - December 13 (AMEX) 8 3/8 7
December 14 - December 31 (NASDAQ) 8 1/2 7
Calendar 1995
First Quarter 10 1/4 7 5/8
Second Quarter 10 1/2 8 1/4
Third Quarter 10 1/4 8
</TABLE>
Dividends
The Company has not paid cash dividends since its inception and does not
intend to pay dividends in the foreseeable future. Under the terms of the
Revolving Credit and Term Loan Agreement between the Company and its main
lender, the Company may pay cash dividends and redeem shares of Common Stock in
any fiscal year only to the extent of an amount equal to 20% of operating cash
flow for such fiscal year.
Number of Shareholders
As of December 18, 1995, there were 95 holders of record of the
Company's Common Stock.
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ARK RESTAURANTS CORP. AND SUBSIDIARIES
Item 6. Selected Consolidated Financial Data
The following table sets forth certain financial data for the fiscal years
ended 1991 through 1995. This information should be read in conjunction with the
Company's Consolidated Financial Statements and the notes thereto appearing at
page F-1.
<TABLE>
<CAPTION>
Year Ended
-------------------------------------------------------------------------------
September 30, October 1, October 2, October 3, September 28,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales $73,026,907 $60,404,339 $55,973,227 $49,283,481 $41,555,383
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Gross restaurant profit $53,001,963 $43,562,653 $40,364,491 $35,406,559 $29,900,170
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Operating income (1) $ 960,794 $ 840,452 $ 3,384,230 $ 2,671,891 $ 2,138,583
Other income, net 937,763 507,200 268,606 250,558 110,439
----------- ----------- ----------- ----------- -----------
Income before provision for income
taxes and extraordinary item $ 1,898,557 $ 1,347,652 $ 3,652,836 $ 2,922,449 $ 2,249,022
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Income (loss) before extraordinary item $ 1,121,126 $ 643,032 $ 1,817,637 $ 1,473,133 $ 1,078,396
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 1,121,126 $ 1,150,802 $ 1,936,737 $ 1,546,033 $ 1,120,896
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Income (loss) per share before
extraordinary item and cumulative
effect of accounting change $.34 $.20 $.57 $.48 $.37
---- ---- ---- ---- ----
---- ---- ---- ---- ----
NET INCOME (LOSS) PER SHARE $.34 $.36 $.61 $.50 $.38
---- ---- ---- ---- ----
---- ---- ---- ---- ----
Weighted average number of shares
used in computation 3,251,336 3,225,680 3,198,429 3,101,719 2,952,595
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
BALANCE SHEET DATA (end of period):
Total assets $28,541,920 $21,768,747 $19,037,744 $17,579,531 $16,350,325
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Working capital (deficit) $ 40,996 $ 1,517,601 $ 490,956 $ (151,773) $(1,482,527)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Long-term debt $ 4,014,162 $ 761,386 $ 165,728 $ 1,537,243 $ 2,141,531
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Shareholders' equity $16,706,301 $15,210,202 $13,908,116 $11,444,566 $ 9,898,532
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Shareholders' equity per share $5.24 $4.88 $4.51 $3.88 $3.35
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Restaurants in operation at end of year,
including restaurants managed 32 27 26 24 23
-- -- -- -- --
-- -- -- -- --
</TABLE>
(1) Operating income includes charges incurred in restaurant closed of $106,586
in the year ended, October 3, 1992.
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<PAGE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Accounting period
The Company's fiscal year ends on the Saturday nearest September 30. The
fiscal years ended September 30, 1995, October 1, 1994 and October 2, 1993
included 52 weeks.
Net Sales
Net sales at restaurants and bars owned by the Company increased by
20.9% from fiscal 1994 to fiscal 1995 and by 7.9% from fiscal 1993 to fiscal
1994. The increase in fiscal 1995 was due primarily to sales from restaurants
acquired or opened in fiscal 1995 (Bryant Park Grill & Cafe, B. Smith's in
Washington, D.C., Lorelei Restaurant and Cabana Bar and Lutece) and the first
full operating year of a restaurant opened in fiscal 1994 (America in McLean,
Virginia). Same store sales in fiscal 1995 decreased by 0.8%.
The increase in fiscal 1994 was primarily due to sales from the first
full operating year of restaurants acquired in fiscal 1993 (Jim McMullen and
Whale's Tail) along with sales from a new restaurant opened in fiscal 1994
(America in Tyson's Corner, Virginia). Same store sales in fiscal 1994 increased
by 2.5% principally due to increased customer counts.
Costs and Expenses
The Company's cost of sales consists principally of food and beverage
costs at restaurants and bars owned by the Company. Cost of sales as a
percentage of net sales was 27.4% in fiscal 1995 and 27.9% in both fiscal 1994
and fiscal 1993. The Company believes its sophisticated centralized purchasing
system has enabled it to efficiently utilize its purchasing power by upgrading
product quality while controlling costs.
Operating expenses of the Company, consisting of restaurant payroll,
occupancy and other expenses at restaurants and bars owned by the Company, as a
percentage of net sales, were 66.7% in fiscal 1995, 64.2% in fiscal 1994 and
61.6% in fiscal 1993. Restaurant payroll as a percentage of net sales was 35.9%
in fiscal 1995, 34.9% in fiscal 1994 and 33.7% in fiscal 1993. This increase in
payroll expenses was principally due to costs associated with new restaurant
openings in fiscal 1995 and to a special charge related to the settlement of a
claim brought by the employees of one of the Company's New York restaurants
alleging violations of federal and state wage and hour laws. Occupancy expenses
(consisting of rent, rent taxes, real estate taxes, insurance and utility costs)
were approximately 12.5% in both fiscal 1995 and fiscal 1994 and were 11.7% in
fiscal 1993.
The Company incurred approximately $950,000 of pre-opening and early
operating losses at newly opened restaurants in fiscal 1995, $430,000 in fiscal
1994 and $160,000 in fiscal 1993. The Company typically incurs significant
pre-opening expenses in connection with its new restaurants which are expended
as incurred. Furthermore, it is not uncommon that such restaurants experience
operating losses during the early months of operation.
General and administrative expenses, as a percentage of net sales,
decreased to 5.8% in fiscal 1995 from 6.6% in fiscal 1994 and were 5.8% in
fiscal 1993. The decrease in fiscal 1995 was primarily due
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<PAGE>
to the fact that the Company was able to manage the 20.9% increase in net sales
with only a nominal increase in general and administrative expenses. In fiscal
1994 the Company had increased development staff in expectation of the fiscal
1995 new restaurants and acquisitions. If net sales at managed restaurants were
included in consolidated net sales, general and administrative expenses as a
percentage of net sales would have been 5.0% in fiscal 1995, 5.6% in fiscal 1994
and 4.8% in fiscal 1993.
As of September 30, 1995 the Company managed seven facilities owned by
others (El Rio Grande, Mackinac Bar and Grill, and Woody's in Manhattan, The
Market at Newport in Jersey City, New Jersey, the Marketplace Cafe, Oar Bar &
Grill, and the Brewskeller Pub in Boston, Massachusetts). Net sales of these
restaurants, which were $10,839,000 during fiscal 1995, $10,643,000 during
fiscal 1994 and $10,973,000 during fiscal 1993, are not included in consolidated
net sales. Management fee income in fiscal 1994 is net of charges totaling
$719,000 from the write-off of unrecoverable advances to a managed restaurant in
Miami, Florida, which the Company no longer manages, and from the write-off of a
discontinued New York catering operation.
Interest expense was $359,000 in fiscal 1995, $143,000 in fiscal 1994,
and $106,000 in fiscal 1993. The increase in fiscal 1995 from 1994 is
principally due to borrowings to finance the new restaurant openings and
acquisitions in fiscal 1995.
Interest income was $78,000 in fiscal 1995, $93,000 in fiscal 1994, and
$130,000 in fiscal 1993. The decrease in fiscal 1995 was due to continued
repayment of long-term receivables and lower interest rates.
Other income, which generally consists of purchasing service fees, and
the sale of logo T-shirts at various restaurants, was $1,219,000 in fiscal 1995,
$557,000 in fiscal 1994 and $245,000 in fiscal 1993. The significant increases
in fiscal 1995 and fiscal 1994 were principally due to amounts the Company
received from a third party due to the temporary closing in fiscal 1994 of a
restaurant (Ernie's).
Income Taxes
The provision for income taxes reflects Federal income taxes calculated
on a consolidated basis and state and local income taxes calculated by each New
York subsidiary on a non-consolidated basis. Most of the restaurants owned or
managed by the Company are owned or managed by a separate subsidiary.
For state and local income tax purposes, the losses incurred by a
subsidiary may only be used to offset that subsidiary's income with the
exception of the restaurants which operate in the District of Columbia.
Accordingly, the Company's overall effective tax rate has varied depending on
the level of losses incurred at individual subsidiaries. The Company's overall
effective tax rate was 40% in fiscal 1995, 52% in fiscal 1994 and 47% in fiscal
1993. The Company's effective rate in fiscal 1995 benefited significantly from
the first full fiscal year of tax credits available to the Company for FICA
taxes paid by the Company with respect to tip income of service personnel. The
effective tax rate in fiscal 1994 was negatively impacted by the charges to
management fee income totaling $719,000 from the write-off of unrecoverable
advances to a managed restaurant in Miami, Florida, which the Company no longer
manages, and from the write-off of a discontinued New York catering operation.
The Company's overall effective tax rate in the future will be affected
by factors such as the level of losses incurred at the Company's New York
facilities (which cannot be consolidated for state and local tax purposes),
pre-tax income earned outside of New York City (where income tax rates are
substantially lower in comparison to New York income tax rates) and the
utilization of state and local net operating loss carry forwards. In order to
more effectively utilize tax loss carry forwards at restaurants that were
-16-
<PAGE>
<PAGE>
unprofitable, the Company has merged certain profitable subsidiaries with
certain loss subsidiaries.
As a result of the enactment of the Revenue Reconciliation Act of 1993,
the Company is entitled, commencing January 1, 1994, to a tax credit based on
the amount of FICA taxes paid by the Company with respect to the tip income of
restaurant service personnel. The net benefit to the Company was $299,000 in
fiscal 1995 and $173,000 in fiscal 1994.
The Company adopted the Financial Accounting Standards Board Statement
No. 109, "Accounting for Income Taxes" (SFAS No. 109), as of the beginning of
fiscal 1994. This statement supersedes Accounting Principles Board Opinion No.
11 and requires an asset and liability approach for financial accounting and
reporting of income taxes. The cumulative effect of this adoption was to
increase net income by $508,000 in fiscal 1994.
Liquidity and Sources of Capital
The Company's source of capital is cash provided by operations and funds
available from the $4,250,000 revolving credit agreement with its main bank. The
Company utilizes capital primarily to fund the cost of developing and opening
new restaurants and acquiring existing restaurants.
The net cash used in investing activities in fiscal 1995 ($9,096,000),
fiscal 1994 ($3,008,000) and fiscal 1993 ($1,790,000) was principally from the
Company's continued investment in fixed assets associated with constructing new
restaurants and acquiring existing restaurants. In fiscal 1995 the Company
opened a 1,200-seat restaurant in Bryant Park, a nine-acre park behind the New
York City Public Library (Bryant Park Grill & Cafe) and opened another
restaurant in Union Station in Washington, DC (B.Smith's, the Company's second
such restaurant). The Company also acquired two restaurants - a renowned French
restaurant in New York City (Lutece) and a casual restaurant and bar in the
Florida Keys (Lorelei Restaurant and Cabana Bar). In fiscal 1994 the Company
opened a 400-seat restaurant (America in Tyson's Corner Shopping Complex in
McLean, Virginia) and completed the acquisition of a restaurant in Oxnard,
California (Whale's Tail). In fiscal 1993, the Company renovated an existing
restaurant which the Company has operated since 1977 (Perretti Italian Cafe) and
the Company spent amounts on design and engineering services for the restaurant
the Company opened in fiscal 1994 (America in McLean, Virginia).
The net cash provided by financing activities in fiscal 1995 was
principally from the Company's borrowings on its main credit facility exceeding
repayments on such facility and proceeds from the sale leaseback of various
kitchen equipment in a restaurant opened in New York City (Bryant Park Grill &
Cafe). In fiscal 1994 the Company received proceeds from the sale leaseback of
various kitchen equipment in the restaurant opened in McLean, Virginia
(America). In fiscal 1993 net cash used in financing activities was principally
for the continued repayment of indebtedness incurred to repurchase the Company's
Common Stock ($661,000) and to a lesser extent the repayment of bank debt
($544,000).
At September 30, 1995 and October 1, 1994 the Company had working
capital of $41,000 and
-17-
<PAGE>
<PAGE>
$1,518,000, respectively. The significant decrease in working capital in fiscal
1995 from fiscal 1994 was principally due to cash expended for the restaurant
openings and acquisitions incurred in fiscal 1995. The restaurant business does
not require the maintenance of significant inventories or the financing of
receivables, thus the Company is able to operate with minimal and even negative
working capital.
In August 1994 the Company and its main bank agreed to an extension and
increase of the existing Revolving Credit and Term Loan Facility. The agreement
enables the Company to borrow up to $4,250,000 until December 31, 1996, at which
time outstanding loans may be converted into term loans payable in 36 monthly
installments through December 31, 1999. At September 30, 1995 the Company had
$3,000,000 outstanding under this agreement. In connection with this agreement,
the Company also has a $1,750,000 Letter of Credit Facility. At September 30,
1995 the Company had delivered $1,131,000 in irrevocable letters of credit in
lieu of lease security deposits. Certain provisions of the revolving credit
facility limit permitted capital expenditures. During fiscal 1995, the Company
exceeded the capital expenditure limitation covenant due to its significant
investments in acquiring new restaurants and the construction costs for newly
opened restaurants. The limitation was waived by the bank.
The Company recently signed letters of intent with respect to extensive
restaurant facilities to be operated by the Company in a new resort casino under
construction in Las Vegas, Nevada. See "Restaurant Expansion" above. The Company
expects that its capital commitments for these facilities will be between
$8,000,000 and $9,000,000 which the Company intends to finance principally
through a new financing facility with its main bank and, to a lesser extent,
through cash from operations. The Company recently received a commitment letter
from the bank which would amend the Company's existing revolving credit facility
to provide for an increase in the amount the Company may borrow on a revolving
credit basis to $11,000,000. The proposed revolving credit facility includes a
$5,000,000 facility for working capital purposes at the Company's existing
restaurants. Approximately $3,000,000 is outstanding under the current facility
described above. Accordingly, approximately $2,000,000 in additional financing
will be available for the restaurants currently in operation. The proposed
revolving credit facility also includes a $6,000,000 facility for use in the
construction of and as working capital for the Las Vegas restaurants. The two
working capital facilities will each have two year terms at the end of which
they will convert into two year term loans. The $5,000,000 facility will convert
into a two year self-amortizing term loan. The $6,000,000 facility will convert
into a two year term loan amortizing $5,000,000 over the two year period with
the balance of $1,000,000 paid at maturity. The commitment of the bank is
subject to the negotiation of definitive agreements and other conditions
customary to a transaction of this nature.
Although the Company is not currently committed to any other projects,
the Company is exploring additional opportunities for expansion of its business.
Additional expansion may require additional external financing.
Recent Developments
The preliminary results of operations for the first two months of the
first quarter of fiscal 1996 reflect a decline in same store sales of
approximately 5% as compared to the first quarter of fiscal 1995. While the
Company currently operates four more restaurants than it did at the beginning
of the first quarter of fiscal 1995 certain of these new restaurants,
particularly Bryant Park facilities, are seasonal in nature and will not
contribute significantly to earnings in the first quarter of fiscal 1996.
-18-
<PAGE>
<PAGE>
As a result, the Company expects to report less net income in the first quarter
of fiscal 1996 than it did in the comparable period in 1995.
Item 8. Financial Statements and Supplementary Data
See page F-1.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
-19-
<PAGE>
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Company
See Part I, Item 4. "Executive Officers of the Company." Other
information required by this item is incorporated by reference from the
Company's definitive proxy statement to be filed not later than January 29, 1996
pursuant to Regulation 14A of the General Rules and Regulations ("Regulation
14A") under the Securities Exchange Act of 1934, as amended.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than January 29,
1996 pursuant to Regulation 14A.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than January 29,
1996 pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions
The information required by this item is incorporated by reference from
the Company's definitive proxy statement to be filed not later than January 29,
1996 pursuant to Regulation 14A.
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) (1) Financial Statements: Page
Report of Independent Certified
Public Accountants F-1
Consolidated Balance Sheets --
at September 30, 1995 and October 1, 1994 F-2
Consolidated Statements of Operations --
For each of the three fiscal years ended
September 30, 1995, October 1, 1994 and October 2, 1993 F-3
Consolidated Statements of Shareholders' Equity --
For each of the three fiscal years ended
September 30, 1995, October 1, 1994 and October 2, 1993 F-4
Consolidated Statements of Cash Flows --
For each of the three fiscal years ended
September 30, 1995, October 1, 1994 and October 2, 1993 F-5
Notes to Consolidated Financial Statements F-6
-20-
<PAGE>
<PAGE>
(2) Exhibits:
3.1 Certificate of Incorporation of the Registrant, filed on
January 4, 1983, incorporated by reference to Exhibit 3.1 to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended October 1, 1994 (the "1994 10-K").
3.2 Certificate of Amendment of the Certificate of Incorporation
of the Registrant filed on October 11, 1985, incorporated by
reference to Exhibit 3.2 to the 1994 10-K.
3.3 Certificate of Amendment of the Certificate of Incorporation
of the Registrant filed on July 21, 1988, incorporated by
reference to Exhibit 3.3 to the 1994 10-K.
3.4 By-Laws of the Registrant, incorporated by reference to
Exhibit 3.4 to the 1994 10-K.
10.1 Amended and Restated Redemption Agreement dated June 29, 1993
between the Registrant and Michael Weinstein, incorporated by
reference to Exhibit 10.1 to the 1994 10-K.
10.2 Form of Indemnification Agreement entered into between the
Registrant and each of Michael Weinstein, Ernest Bogen,
Vincent Pascal, Robert Towers, Jay Galin, Andrew Kuruc and
Donald D. Shack, incorporated by reference to Exhibit 10.2 to
the 1994 10-K.
10.3 Ark Restaurants Corp. Amended Stock Option Plan, incorporated
by reference to Exhibit 10.3 to the 1994 10-K.
10.4 Lease Agreement dated June 9, 1982, between Rebak Realty Co.,
as lessor, and MEB Emporium Corp., as lessee, incorporated by
reference to Exhibit 10.4 to the 1994 10-K.
10.5 Lease Agreement dated October 27, 1982, between Majestic
Towers Co., as lessor, and MEB Emporium Corp., as lessee,
incorporated by reference to Exhibit 10.5 to the 1994 10-K.
10.6 Lease Agreement dated June 1, 1983, between 101 West 77th
Street Corp., as lessor, and MEB On Columbus, Inc., as lessee,
as assignee of DPK Restaurants, Inc., incorporated by
reference to Exhibit 10.6 to the 1994 10-K.
10.7 Lease Agreement dated November 10, 1983, between BJW
Associates, as lessor, and MEB Dining 18 Inc., as lessee,
incorporated by reference to Exhibit 10.7 to the 1994 10-K.
10.8 Lease Agreement dated August 9, 1984, between G.P. Associates,
as lessor, and MEB On First, Inc., as lessee, incorporated by
reference to Exhibit 10.8 to the 1994 10-K.
10.9 Agreement of Lease dated April 26, 1985, between 2 Park Avenue
Associates and The Ritz Cafe, Inc., incorporated by reference
to Exhibit 10.9 to the 1994 10-K.
10.10 Assumption Agreement dated June 27, 1985, between Future
Brothers, Inc., as assignee of Alfred Steiner, as sublessor,
and Father Brad's Broadway Dining, Inc., as sublessee,
incorporated by reference to Exhibit 10.10 to the 1994 10-K.
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<PAGE>
<PAGE>
10.11 Lease Agreement dated August 1, 1985, between Livingstone
Management Co., Inc., as lessor, and Conis Realty Corp., as
lessee, incorporated by reference to Exhibit 10.11 to the 1994
10-K.
10.12 Lease Agreement dated August 1, 1985, between Soledad Place
Corp., as lessor, and La Femme Noire, Inc., as lessee,
incorporated by reference to Exhibit 10.12 to the 1994 10-K.
10.13 Indenture of Lease dated as of January 1, 1986, between
Buchbinders Restaurant, Inc. and Ark 27th St., Inc.,
incorporated by reference to Exhibit 10.13 to the 1994 10-K.
10.14 Agreement of Lease dated as of April 1, 1986, between 377
Third Avenue Co. and Ark 27th St., Inc., incorporated by
reference to Exhibit 10.14 to the 1994 10-K.
10.15 Management Agreement dated September 10, 1986 by and between
Amphitryon, Inc. and Standish Group Inc. and Ark Seventh
Avenue South Corp., incorporated by reference to Exhibit 10.15
to the 1994 10-K.
10.16 Agreement dated as of November 11, 1986 among the Registrant,
La Femme Noire, Inc. and Barbara Smith, incorporated by
reference to Exhibit 10.16 to the 1994 10-K.
10.17 Management Agreement dated June 1987 between Ark Operating
Corp. and Rio Restaurant Associates, incorporated by reference
to Exhibit 10.17 to the 1994 10-K.
10.18 Agreement of Lease dated June 29, 1987 between the Registrant
and Bruce and Carol Haley, incorporated by reference to
Exhibit 10.18 to the 1994 10-K.
10.19 Lease Agreement dated as of May 2, 1988, between Union Station
Venture, Ltd., as lessor, and Ark Union Station, Inc., as
lessee, incorporated by reference to Exhibit 10.19 to the 1994
10-K.
10.20 Agreement dated December 9, 1988 among 625 Property Associates
and Ark Sub-One Corp., incorporated by reference to Exhibit
10.20 to the 1994 10-K.
10.21 Lease Agreement dated as of January 5, 1989 by and between
Union Station Venture, Ltd. and Ark D.C. Kiosk, Inc.,
incorporated by reference to Exhibit 10.21 to the 1994 10-K.
10.22 Agreement dated February 22, 1989 by and among Lawrence P.
Forgione, Ark Restaurants Corp. and Ark Columbus Corp.,
incorporated by reference to Exhibit 10.22 to the 1994 10-K.
10.23 Restaurant Lease Agreement dated August 22, 1989 by and
between Potomac River Front Limited Partnership and Ark
Potomac Corporation, incorporated by reference to Exhibit
10.23 to the 1994 10-K.
10.24 Lease dated January 1, 1990 between George H. Beane and
Encarnita V. Quinlan, as lessors, and Columbus Cafe Corp., as
lessee, incorporated by reference to Exhibit 10.24 to the 1994
10-K.
10.25 First Amendment to Lease dated January 1990 between Potomac
River Front Limited
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<PAGE>
<PAGE>
Partnership ("Landlord") and Ark Potomac Corporation
("Tenant"), incorporated by reference to Exhibit 10.25 to the
1994 10-K.
10.26 Second Amendment to Lease dated June 11, 1990 between Potomac
River Front Limited Partnership ("Landlord") and Ark Potomac
Corporation ("Tenant"), incorporated by reference to Exhibit
10.26 to the 1994 10-K.
10.27 Amended and Restated Management Agreement dated December 4,
1990 between AROC and Ark Corporation and DBS Restaurant
Group, Inc., incorporated by reference to Exhibit 10.27 to the
1994 10-K.
10.28 Lease dated January 25, 1991 between Wayfarer Inns of New
York, Inc., as lessor, and SSWB Restaurants, Inc., as lessee,
incorporated by reference to Exhibit 10.28 to the 1994 10-K.
10.29 Lease dated April 18, 1991 between South Street Seaport
Limited Partnership, as lessor, and Ark of the Seaport, Inc.,
as lessee, incorporated by reference to Exhibit 10.29 to the
1994 10-K.
10.30 Management Agreement dated June 1, 1991 between Ark Boston
Corp. and Flower Market Restaurant, Inc., incorporated by
reference to Exhibit 10.30 to the 1994 10-K.
10.31 Third Amendment to Lease dated January 28, 1992 between
Potomac River Front Limited Partnership ("Landlord") and Ark
Potomac Corporation ("Tenant"), incorporated by reference to
Exhibit 10.31 to the 1994 10-K.
10.32 Lease dated August 5, 1992 between Lehndorff Tysons Joint
Venture, as Landlord, and Tysons America Corp., as Tenant,
incorporated by reference to Exhibit 10.32 to the 1994 10-K.
10.33 Letter Agreement dated December 4, 1992 among the Registrant,
La Femme Noire, Inc. and Barbara Smith, incorporated by
reference to Exhibit 10.33 to the 1994 10-K.
10.34 Amended and Restated Credit Agreement dated December 30, 1992
between the Registrant and Bank Leumi Trust Company of New
York, incorporated by reference to Exhibit 10.34 to the 1994
10-K.
10.35 Modification of Lease dated December 31, 1992 between Moklam
Enterprises, Inc. ("Landlord") and Father Brad's Broadway
Dining, Inc. ("Tenant"), incorporated by reference to Exhibit
10.35 to the 1994 10-K.
10.36 Operating Agreement, dated March 3, 1993 between Ark JMR Corp.
and Jim McMullen Restaurant, Inc., incorporated by reference
to Exhibit 10.36 to the 1994 10-K.
10.37 Restated Indenture of Lease dated August 1, 1993 between
Bryant Park Restoration Corporation, as Landlord, and Ark
Bryant Park, as Tenant, as amended by an Amendment dated
December 1, 1993, incorporated by reference to Exhibit 10.37
to the 1994 10-K.
10.38 Amendment dated August 5, 1993 to the Lease dated January 1,
1990 between George H. Beane and Encarnita V. Quinlan, as
lessors, and Columbus Cafe Corp., as lessee,
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<PAGE>
<PAGE>
incorporated by reference to Exhibit 10.38 to the 1994 10-K.
10.39 Sublease Agreement dated October 13, 1993 between Frank
Catania, as Lessor and Ark Fifth Avenue Corp., as Lessee,
incorporated by reference to Exhibit 10.39 to the 1994 10-K.
10.40 Sublease dated November 15, 1993 between Ark Oxnard Corp., as
subtenant, and Michael Koutnik, as sublandlord, incorporated
by reference to Exhibit 10.40 to the 1994 10-K.
10.41 First Amendment to Lease dated January 15, 1994 between
Lehndorff Tysons Joint Venture ("Landlord") and Tysons America
Corp., incorporated by reference to Exhibit 10.41 to the 1994
10-K.
10.42 Lease Agreement dated February 4, 1994 between Union Station
Venture, Ltd. and La Femme Noire D.C. Incorporated,
incorporated by reference to Exhibit 10.42 to the 1994 10-K.
10.43 Agreement dated July 15, 1994 between Avis Rent A Car System,
Inc. and MEB Emporium Corp., incorporated by reference to
Exhibit 10.43 to the 1994 10-K.
10.44 Letter Agreement dated August 10, 1994 between the Registrant
and Bank Leumi Trust Company of New York, incorporated by
reference to Exhibit 10.44 to the 1994 10-K.
10.45 Letter Agreement dated September 27, 1994 among Barbara Smith,
the Registrant, La Femme Noire, Inc. and La Femme Noire D.C.
Incorporated, incorporated by reference to Exhibit 10.45 to
the 1994 10-K.
10.46 Lease dated November 2, 1994 between Andre Soltner and Simone
Soltner d/b/a ANSI Realty Company, Owner and KRA Holdings,
Inc., Tenant, incorporated by reference to Exhibit 10.46 to
the 1994 10-K.
10.47 Lease dated November 18, 1994 between Islamorada Resort, Inc.,
as Landlord, and Ark Islamorada Corp., as Tenant, incorporated
by reference to Exhibit 10.47 to the 1994 10-K.
*10.48 First Amendment of Lease dated as of the 13th day of July,
1994 by and between Mega Realty, L.L.C. and Conis Realty Corp.
*10.49 Extension and Modification of Lease dated September 1995
between Rebak Realty Co. and MEB Emporium Corp.
*10.50 Amendment and Modification of Leases, dated as of June 13,
1995 between Buchbinders Restaurant Inc. and Ark 27th Street,
Inc.
*10.51 Agreement dated December 5, 1995 between United Brody Corp.
and Ark Steakhouse Corp.
*21 Subsidiaries of the Registrant.
*23 Consent of Deloitte & Touche LLP.
*27 Financial Data Schedule pursuant to Article 5 of Regulation
S-X filed with EDGAR Version only.
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<PAGE>
<PAGE>
---------------------------------
*Filed Herewith
(b) Reports on Form 8-K:
None
-25-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Ark Restaurants Corp.:
We have audited the accompanying consolidated balance sheets of Ark Restaurants
Corp. and its subsidiaries as of September 30, 1995 and October 1, 1994, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended September 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Ark Restaurants Corp. and
subsidiaries as of September 30, 1995 and October 1, 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended September 30, 1995, in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the consolidated financial statements, effective
October 3, 1993, the Company changed its method of accounting for income taxes
to conform with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes.
New York, New York
November 30, 1995 (except for Note 13,
as to which the date is December 28, 1995)
<PAGE>
<PAGE>
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, October 1,
ASSETS 1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,271,284 $ 2,912,913
Accounts receivable 1,273,827 1,085,176
Current portion of long-term receivables (Note 2) 163,436 139,340
Inventories (Note 3) 888,344 414,677
Deferred income taxes (Note 10) 395,539 93,000
Prepaid expenses 957,018 392,271
Other current assets 534,852 618,307
----------- -----------
Total current assets 5,484,300 5,655,684
----------- -----------
LONG-TERM RECEIVABLES (Note 2) 1,414,909 1,534,864
FIXED ASSETS - At cost (Notes 3 and 6):
Leasehold improvements 14,421,187 9,632,792
Furniture, fixtures and equipment 12,369,017 9,086,903
Leasehold improvements in progress 133,789 801,032
----------- -----------
26,923,993 19,520,727
Less accumulated depreciation and amortization 10,548,687 9,025,243
----------- -----------
16,375,306 10,495,484
----------- -----------
INTANGIBLE ASSETS (Note 3) 4,336,347 3,041,262
OTHER ASSETS (Note 4) 454,515 564,471
----------- -----------
$28,541,920 $21,768,747
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 2,035,769 $ 1,805,939
Accrued expenses and other current liabilities (Notes 3 and 5) 2,849,292 2,151,764
Current maturities of capital lease obligations (Note 7) 204,042 76,893
Current maturities of long-term debt (Notes 3 and 6) 88,832 76,329
Accrued income taxes (Note 10) 265,369 27,158
----------- -----------
Total current liabilities 5,443,304 4,138,083
----------- -----------
OBLIGATIONS UNDER CAPITAL LEASES (Note 7) 929,985 349,405
LONG-TERM DEBT - Net of current maturities (Notes 3 and 6) 3,925,330 685,057
OPERATING LEASE DEFERRED CREDIT (Note 7) 1,537,000 1,386,000
COMMITMENTS (Notes 6 and 7)
SHAREHOLDERS' EQUITY (Notes 6 and 8):
Common stock, par value $.01 per share - authorized,
10,000,000 shares; issued, 4,536,382 and 4,461,832 shares,
respectively 45,364 44,618
Additional paid-in capital 7,481,636 7,107,409
Retained earnings 10,426,700 9,305,574
----------- -----------
17,953,700 16,457,601
Less treasury stock, 1,345,337 shares 1,247,399 1,247,399
----------- -----------
16,706,301 15,210,202
----------- -----------
$28,541,920 $21,768,747
=========== ===========
</TABLE>
See notes to consolidated financial statements.
F-2
<PAGE>
<PAGE>
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
---------------------------------------------
September 30, October 1, October 2,
1995 1994 1993
<S> <C> <C> <C>
NET SALES $ 73,026,907 $ 60,404,339 $ 55,973,227
COST OF SALES 20,024,944 16,841,686 15,608,736
------------ ------------ ------------
Gross restaurant profit 53,001,963 43,562,653 40,364,491
MANAGEMENT FEE INCOME (Note 9) 925,332 59,159 726,850
------------ ------------ ------------
53,927,295 43,621,812 41,091,341
------------ ------------ ------------
OPERATING EXPENSES:
Payroll and payroll benefits 26,191,191 21,092,870 18,876,132
Occupancy 9,035,078 7,554,536 6,522,016
Depreciation 2,289,211 1,694,530 1,520,554
Other 11,227,851 8,427,639 7,558,574
------------ ------------ ------------
48,743,331 38,769,575 34,477,276
GENERAL AND ADMINISTRATIVE EXPENSES 4,223,170 4,011,785 3,229,835
------------ ------------ ------------
52,966,501 42,781,360 37,707,111
------------ ------------ ------------
OPERATING INCOME 960,794 840,452 3,384,230
------------ ------------ ------------
OTHER EXPENSE (INCOME):
Interest expense (Note 6) 359,159 143,130 106,453
Interest income (77,856) (93,347) (130,420)
Other income (Note 11) (1,219,066) (556,983) (244,639)
------------ ------------ ------------
(937,763) (507,200) (268,606)
------------ ------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES,
EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 1,898,557 1,347,652 3,652,836
PROVISION FOR INCOME TAXES (Note 10) 777,431 704,620 1,835,199
------------ ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 1,121,126 643,032 1,817,637
EXTRAORDINARY ITEM - Utilization of state net
operating loss carryforwards (net of Federal
income tax of $61,400) - - 119,100
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE (Note 10) - 507,770 -
------------ ------------ ------------
NET INCOME $ 1,121,126 $ 1,150,802 $ 1,936,737
============ ============ ============
INCOME PER SHARE:
Income before extraordinary item and
cumulative effect of a change in
accounting principle $ .34 $ .20 $ .57
Extraordinary item - - .04
Cumulative effect of a change in
accounting principle - .16 -
----- ------ ------
NET INCOME $ .34 $ .36 $ .61
===== ====== ======
WEIGHTED AVERAGE NUMBER OF SHARES
USED IN COMPUTATIONS 3,251,336 3,225,680 3,198,429
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
<PAGE>
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1995, OCTOBER 1, 1994 AND OCTOBER 2, 1993
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------------ Paid-In Retained Treasury Shareholders'
Shares Amount Capital Earnings Stock Equity
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 3, 1992 4,297,932 $ 42,979 $ 6,430,950 $ 6,218,035 $(1,247,399) $11,444,565
Exercise of stock options 132,650 1,327 287,274 - - 288,601
Tax benefit on exercise of options - - 238,213 - - 238,213
Net income - - - 1,936,737 - 1,936,737
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, OCTOBER 2, 1993 4,430,582 44,306 6,956,437 8,154,772 (1,247,399) 13,908,116
Exercise of stock options 31,250 312 67,813 - - 68,125
Tax benefit on exercise of options - - 83,159 - - 83,159
Net income - - - 1,150,802 - 1,150,802
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, OCTOBER 1, 1994 4,461,832 44,618 7,107,409 9,305,574 (1,247,399) 15,210,202
Exercise of stock options 74,550 746 182,111 - - 182,857
Tax benefit on exercise of options - - 192,116 - - 192,116
Net income - - - 1,121,126 - 1,121,126
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, SEPTEMBER 30, 1995 4,536,382 $ 45,364 $ 7,481,636 $10,426,700 $(1,247,399) $16,706,301
=========== =========== =========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
F-4
<PAGE>
<PAGE>
ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
-----------------------------------------
September 30, October 1, October 2,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before extraordinary item and
cumulative effect of a change in accounting principle $ 1,121,126 $ 643,032 $ 1,817,637
Extraordinary item - - 119,100
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization of fixed assets 1,988,968 1,508,489 1,367,509
Amortization of intangibles 450,787 264,092 200,061
Provision for uncollectible long-term receivable 100,000 200,000 -
Operating lease deferred credit 151,000 220,000 194,000
Deferred income taxes (302,100) (107,005) (171,243)
Changes in assets and liabilities:
Increase in accounts receivable (188,651) (420,737) (69,533)
(Increase) decrease in inventories (126,205) 9,450 (91,057)
(Increase) decrease in prepaid expenses (564,747) 34,734 311,463
Decrease (increase) in other assets, net 223,411 647,891 (1,193,624)
Increase in accounts payable - trade 229,830 315,830 541,463
Increase (decrease) in accrued income taxes 238,211 (47,819) (300,165)
(Increase) decrease in accrued expenses and
other current liabilities 397,528 (66,257) 102,122
----------- ----------- -----------
Net cash provided by operating activities 3,719,158 3,201,700 2,827,733
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (6,610,540) (2,820,366) (1,095,831)
Additions to intangible assets (145,872) (39,887) (81,458)
Issuance of demand notes and long-term receivables (224,913) (206,512) (298,504)
Payments received on demand notes and long-term
receivables 220,772 58,940 135,673
Acquisition deposit - - (450,000)
Restaurant acquisitions (2,335,712) - -
----------- ----------- -----------
Net cash used in investing activities (9,096,265) (3,007,825) (1,790,120)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment on long-term debt (1,847,224) (2,095,342) (2,827,765)
Issuance of long-term debt 4,500,000 2,250,000 1,456,250
Exercise of stock options 374,973 151,284 526,814
Principal payment on capital lease obligations (117,218) (52,144) -
Proceeds from sale lease back 824,947 478,442 -
----------- ----------- -----------
Net cash provided by (used) in financing activities 3,735,478 732,240 (844,701)
----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (1,641,629) 926,115 192,912
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 2,912,913 1,986,798 1,793,886
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 1,271,284 $ 2,912,913 $ 1,986,798
=========== =========== ===========
SUPPLEMENTAL INFORMATION:
Cash payments for the following were:
Interest $ 422,159 $ 143,130 $ 106,453
=========== =========== ===========
Income taxes $ 649,689 $ 776,473 $ 1,959,471
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
<PAGE>
ARK RESTAURANTS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, OCTOBER 1, 1994 AND OCTOBER 2, 1993
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ark Restaurants Corp. and subsidiaries (the "Company") own and operate 25
restaurants, and manage 7 restaurants in New York City (20), Washington,
D.C. (4), Boston (3), Rhinebeck, New York, Oxnard, California, McLean,
Virginia, Islamorada, Florida and Jersey City, New Jersey. The Company also
operates catering businesses in New York City and Washington, D.C. and
wholesale and retail bakeries in New York City.
Accounting Period - The Company's fiscal year ends on the Saturday nearest
September 30. The fiscal years ended September 30, 1995, October 1, 1994 and
October 2, 1993, included 52 weeks.
Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly owned and majority owned
subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation. Investments in affiliated companies where
the Company is able to exercise significant influence over operating and
financial policies even though the Company holds 50% or less of the voting
stock, are accounted for under the equity method.
Cash Equivalents - Cash equivalents include instruments with original
maturities of three months or less.
Inventories - Inventories are stated at the lower of cost (first-in,
first-out) or market, and consist of food and beverages.
Fixed Assets - Leasehold improvements and furniture, fixtures and equipment
are stated at cost. Depreciation of furniture, fixtures and equipment
(including equipment under capital leases) is computed using the
straight-line method over the estimated useful lives of the respective
assets (7 years). Amortization of improvements to leased properties is
computed using the straight-line method based upon the initial term of the
applicable lease or the estimated useful life of the improvements, whichever
is less, and ranges from 5 to 35 years.
Certain costs incurred during the construction period of restaurants,
including rental of premises, training and payroll, are expensed as
incurred.
Intangible and Other Assets - Costs associated with acquiring leases and
subleases, principally purchased leasehold rights, have been capitalized and
are being amortized on the straight-line method based upon the initial terms
of the applicable lease agreements, which range from 10 to 21 years.
Goodwill recorded in connection with the acquisition of shares of the
Company's common stock from a former shareholder, as discussed in Note 3, is
being amortized over a period of 40 years. Goodwill arising from restaurant
acquisitions is being amortized over a period of 15 years.
Legal and other costs incurred to organize restaurant corporations are
capitalized as organization costs and are amortized over a period of 5
years.
F-6
<PAGE>
<PAGE>
Covenants not to compete arising from restaurant acquisitions are amortized
over the contractual period of 5 years.
Operating Lease Deferred Credit - Several of the Company's operating leases
contain predetermined increases in the rentals payable during the term of
such leases. For these leases, the aggregate rental expense over the lease
term is recognized on a straight line basis over the lease term. The
difference between the expense charged to operations in any year and amounts
payable under the leases during that year are recorded as a deferred credit.
The deferred credit subsequently reverses over the lease term (Note 7).
Occupancy Expenses - Occupancy expenses include rent, rent taxes, real
estate taxes, insurance and utility costs.
Income Taxes - In February 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. Statement 109 requires a change from the deferred method of
accounting for income taxes of APB Opinion 11 to the asset and liability
method of accounting for income taxes. Under the asset and liability method
of Statement 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes enactment
date.
Effective October 3, 1993, the Company adopted Statement 109 and has
reported the cumulative effect of that change in the method of accounting
for income taxes in the 1994 statement of operations. Prior years' financial
statements have not been restated.
Income Per Share of Common Stock - Per share data is based upon the weighted
average number of shares of common stock and common stock equivalents
outstanding during each year. Common stock equivalents consist of dilutive
stock options. Fully dilutive income per share of common stock is not shown
for the effect is not material.
Future Impact of Recently Issued Accounting Standards - In May of 1993, the
Financial Accounting Standards Board issued Statement No. 114, "Accounting
by Creditors for Impairment of a Loan" ("SFAS 114"), which requires impaired
loans be measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate. This Statement will be
adopted by the Company as of October 1, 1995. The effect of the adoption of
SFAS 114 on the Company's consolidated financial statements is not expected
to be material.
The Financial Accounting Standards Board has also issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for the Impairment
of Long-Lived Assets to Be Disposed Of" ("SFAS 121"), which requires that
long-lived assets and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. This Statement will be adopted by the Company as of September
29, 1996. The effect of the adoption of SFAS 121 on the Company's
consolidated financial statements is not expected to be material.
Reclassifications - Certain reclassifications have been made to the 1994 and
1993 financial statements to conform to the 1995 presentation.
F-7
<PAGE>
<PAGE>
2. LONG-TERM RECEIVABLES
Long-term receivables consist of the following:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Advances for construction, working capital and certain
bankruptcy claims, at one of the Company's managed
locations, at prime interest rate plus 2% (a) $ 860,131 $ 900,563
Advances for construction and working capital, at one of
the Company's managed locations, at 15% interest; due
in monthly installments through December 2000 311,674 349,784
Advances for construction, at one of the Company's managed
locations, at prime plus 1%; due in monthly installments
through December 1999 99,244 -
Note receivable, at 8% interest, due in monthly installments,
through August 2001 (b) 186,612 168,752
Note receivable, secured by personal guarantees of officers of a
managed restaurant and fixed assets at that location, at 15%
interest; due in monthly installments, through September 2000 115,287 129,708
Note receivable, unsecured at prime plus 1%; due in six
annual installments commencing April 1995 (c) - 120,000
Other 5,397 5,397
---------- ----------
1,578,345 1,674,204
Less current portion 163,436 139,340
---------- ----------
$1,414,909 $1,534,864
========== ==========
</TABLE>
(a) The Company entered into an agreement in December 1990 to manage a
restaurant located in New York City owned by a corporation which emerged
from bankruptcy in accordance with a court-approved plan of
reorganization. The Company has made advances for working capital and to
pay certain bankruptcy claims. The advances bear interest at prime plus
2% and are generally repayable from excess cash flow after the payment
of interest on the advances and the management fee. $595,974 of the
advances are secured by the restaurant's assets. Interest has been
recorded only to the extent it is considered to be collectible.
Advances are generally payable from excess cash flow of the restaurant.
However, in fiscal 1995 the restaurant cash flow was severely impacted
by a 17.3% decrease in sales. Management believes that this sales
decline is temporary and was principally due to a major street
reconstruction project undertaken by the City of New York on the main
avenue directly in front of the restaurant. The project occurred
throughout a major portion of the fiscal year and is scheduled for
completion shortly. Although in fiscal 1996, certain advances will be in
default, the Company
F-8
<PAGE>
<PAGE>
intends to renegotiate all advances. The Company continues to expect to
recover the carrying value of these advances.
(b) The Company has subleased since fiscal 1989 a restaurant site to a third
party who is also operating a restaurant at such site. The sublease
period was through March 1995 at an annual rate of $70,000. The Company
agreed in July 1993 to extend and reschedule the amount due under the
sublease and was issued a note to be paid in monthly installments
through August 2001. The Company was given a limited personal guarantee
by officers of the sublessee.
(c) The Company lent $120,000 in June 1993 to an individual who is a manager
and minority stockholder at one of the Company's restaurants. Such
amount was fully repaid in fiscal 1995.
3. INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Goodwill (a) $3,812,877 $3,002,877
Purchased leasehold rights (b) 1,277,740 1,274,540
Noncompete agreements and other (a) 1,158,000 368,000
Organization costs 575,949 433,277
---------- ----------
6,824,566 5,078,694
Less accumulated amortization 2,488,219 2,037,432
---------- ----------
$4,336,347 $3,041,262
========== ==========
</TABLE>
(a) In August 1985, certain subsidiaries of the Company acquired
approximately one-third of the then outstanding shares of common stock
(964,599 shares), from a former officer and director of the Company for
a purchase price of $3,000,000. The consolidated balance sheets reflect
the allocation of $2,946,000 to goodwill.
During fiscal 1995, the Company acquired two restaurants for
approximately $2,336,000 in cash plus the assumption of $900,000 in
liabilities. These acquisitions were accounted for as purchase
transactions with the purchase prices allocated as follows: inventories,
$348,000; other assets, $30,000; leasehold improvements, $865,000;
furniture, fixtures and equipment, $393,000; and intangible assets,
$1,600,000.
(b) Purchased leasehold rights arise from acquiring leases and subleases of
various restaurants.
F-9
<PAGE>
<PAGE>
4. OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Deposits $392,018 $317,698
Investments in and advances to affiliates (a) 62,497 96,773
Other advances (b) - 150,000
-------- --------
$454,515 $564,471
======== ========
</TABLE>
(a) The Company, through a wholly owned subsidiary, became a general partner
with a 19% interest in a partnership which acquired on July 1, 1987 an
existing Mexican food restaurant, El Rio Grande, in New York City.
Several related parties also participate as limited partners in the
partnership. The Company's equity in earnings of the limited partnership
was $60,000, $75,000 and $92,000 for the years ended September 30, 1995,
October 1, 1994 and October 2, 1993, respectively.
The Company also manages El Rio Grande through another wholly owned
subsidiary on behalf of the partnership. Management fee income relating
to these services was $519,000, $383,000, and $368,000 for the years
ended September 30, 1995, October 1, 1994 and October 2, 1993,
respectively (Note 8).
The Company acquired a 50% interest in a catering business in December
1992 for approximately $121,000. In February 1994, the Company
terminated its interest in such business and wrote-off its equity
investment. Management fee income for the years ended October 1, 1994
and October 2, 1993 is net of losses of $212,000 and $152,000,
respectively, from such investment.
(b) The Company entered into an agreement in March 1993 to operate an
existing restaurant in New York City. The owner of the restaurant leased
the furniture, fixtures and leasehold improvements to the Company along
with a license to use the restaurant's name. The Company agreed to pay
the owner an annual share of defined cash flow and advanced $900,000 in
March 1993 to the owner with such amount to be applied against the
owner's share of cash flow payable during the initial three year term of
the agreement. As of September 30, 1995, the balance of $150,000 is
classified in other current assets on the consolidated balance sheet.
5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Sales tax payable $ 667,399 $ 509,981
Accrued wages and payroll related costs 636,734 673,114
Other current liabilities 1,545,159 968,669
---------- ----------
$2,849,292 $2,151,764
========== ==========
</TABLE>
F-10
<PAGE>
<PAGE>
6. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Note, issued in connection with acquisition of restaurant site, at
prime plus 2.5%, payable in monthly installments through
February 1997 (a) $ 412,382 $ 421,408
Revolving Credit and Term Loan Facility with interest at the
prime rate, plus 1%; payable on December 31, 1996 (b) (Note 13) 3,000,000 250,000
Promissory note payable to a landlord of a restaurant site,
payable in monthly installments through May 1996 (c) 29,717 89,978
Note issued in connection with acquisition of restaurant site,
at 7.25%, payable in monthly installments through
January 1, 2000 (d) 572,063 -
---------- ----------
4,014,162 761,386
Less current maturities 88,832 76,329
---------- ----------
$3,925,330 $ 685,057
========== ==========
</TABLE>
(a) In November 1993, the Company completed the purchase of a restaurant in
Oxnard, California and issued a note for $441,000. The Company is
obligated to remit monthly payments of $4,830 inclusive of interest
until February 1997, at which time the remaining balance outstanding is
due. The debt is secured by the leasehold improvements and tangible
personal property of the restaurant.
(b) In August 1994 the Company and its main bank agreed to an extension and
increase of the existing revolving credit and term loan facility. The
agreement enables the Company to borrow up to $4,250,000 until December
31, 1996, at which time outstanding loans may be converted into term
loans payable in 36 monthly installments through December 31, 1999.
Outstanding loans bear interest at the bank's prime rate plus 1% until
December 31, 1996 and at the bank's prime rate plus 1 1/2% thereafter.
The Company is required to pay a commitment fee of 1/2 of 1% per annum
on the average daily unborrowed amounts.
The Company also obtained a $1,750,000 Letter of Credit Facility. The
Company pays commissions ranging from 1 1/2% to 2% per annum on
outstanding letters of credit. The Bank's obligation to issue letters of
credit terminates on December 31, 1999.
The Company's subsidiaries each guaranteed the obligations of the
Company under the foregoing facilities and granted security interests in
their respective assets as collateral for such guarantees. In addition,
the Company pledged stock of such subsidiaries as security for
obligations of the Company under such facilities.
F-11
<PAGE>
<PAGE>
The agreement includes restrictions relating to, among other things,
indebtedness for borrowed money, capital expenditures, advances to
managed businesses, acquisitions of, or investments in, other than
restaurant related businesses, and the ability of the Company to
guarantee the indebtedness of others. Under the agreement, the Company
may pay cash dividends and redeem stock only to the extent of 20% of
operating cash flow as defined in the agreement for such fiscal year.
The agreement also contains certain financial covenants such as minimum
cash flow in relation to the Company's debt service requirements and the
maintenance of minimum shareholders' equity (no less than $12,000,000).
During Fiscal 1995, the Company exceeded the capital expenditure
limitation covenant due to its significant investments in acquiring
new restaurants and the construction costs for newly opened restaurants,
which limitation was waived by the bank.
(c) The Company is indebted to a landlord at one of its Washington, D.C.
restaurant sites for amounts loaned by the landlord to fund leasehold
improvements. The loan is payable in monthly installments through May
1996 with interest at a rate of 8% per annum. The obligation of the
Company is secured by the leasehold improvements and other tangible
property at the restaurant.
(d) In November 1994, the Company issued a $600,000 note in connection with
the acquisition of a restaurant in the Florida Keys. The Company remits
monthly payments of $7,044 inclusive of interest until January 1, 2000,
at which time the outstanding balance of $358,511 is due. The debt is
secured by the leasehold improvements and tangible personal property at
the restaurant.
Required principal payments on long-term debt are as follows:
<TABLE>
<CAPTION>
Year Amount
<S> <C>
1996 $ 88,832
1997 1,195,630
1998 1,051,437
1999 1,055,292
2000 622,971
Thereafter -
----------
$4,014,162
==========
</TABLE>
During the fiscal years ended September 30, 1995, October 1, 1994 and
October 2, 1993, interest expense was $422,159, $143,130 and $106,453,
respectively, of which $63,000 was capitalized during the fiscal year ended
September 30, 1995.
7. LEASES
The Company leases its restaurants, bar facilities, and administrative
headquarters through its subsidiaries under terms expiring at various dates
through 2029. Most of the leases provide for the payment of base rents plus
real estate taxes, insurance and other expenses and, in certain instances,
for the payment of a percentage of the restaurants' sales in excess of
stipulated amounts at such facility.
F-12
<PAGE>
<PAGE>
As of September 30, 1995, future minimum lease payments, net of sublease
rentals, under noncancellable leases are as follows:
<TABLE>
<CAPTION>
Operating Capital
Year Leases Leases
<S> <C> <C>
1996 $ 5,811,257 $ 311,590
1997 6,149,340 321,235
1998 6,136,089 321,235
1999 5,732,928 263,365
2000 5,265,817 154,118
Thereafter 38,060,894 -
----------- -----------
Total minimum payments $67,156,325 1,371,543
===========
Less amount representing
interest 237,516
------------
Present value of
net minimum lease
payments $ 1,134,027
============
</TABLE>
In connection with the leases included in the table above, the Company
obtained and delivered irrevocable letters of credit in the aggregate amount
of $1,131,130 as security deposits under such leases.
Rent expense (net of sublease rental income of $124,025, $182,800 and
$200,299 for the fiscal years ended September 30, 1995, October 1, 1994 and
October 2, 1993, respectively) was $5,633,662, $4,558,202 and $3,885,884,
during the fiscal years ended September 30, 1995, October 1, 1994 and
October 2, 1993, respectively. Rent expense for the fiscal years ended
September 30, 1995, October 1, 1994 and October 2, 1993 includes
approximately $151,000, $220,000 and $194,000 of operating lease deferred
credits, representing the difference between rent expense recognized on a
straight-line basis and actual amounts currently payable. Contingent
rentals, included in rent expense, were $405,399, $253,725 and $219,825 for
the fiscal years ended September 30, 1995, October 1, 1994 and October 2,
1993, respectively.
8. STOCK OPTIONS
On October 15, 1985, the Company adopted a Stock Option Plan (the "Plan")
pursuant to which the Company reserved for issuance an aggregate of 175,000
shares of common stock. In May 1991 and March 1994, the Company amended such
Plan to increase the number of shares issuable under the Plan to 350,000 and
447,650, respectively. Options granted under the Plan to key employees and
directors are exercisable at prices at least equal to the fair market value
of such stock on the dates the options were granted. The options expire five
years after the date of grant and are generally exercisable as to 25% of the
shares commencing on the first anniversary of the date of grant and as to an
additional 25% commencing on each of the second, third and fourth
anniversaries of the date of grant.
F-13
<PAGE>
<PAGE>
Additional information follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Shares under option, beginning of year 183,800 195,050 327,700
Options:
Granted 81,000 20,000 -
Exercised (74,550) (31,250) (132,650)
Canceled or expired (1,125) - -
-------- -------- --------
Shares under option, end of year (a) 189,125 183,800 195,050
======== ======== ========
Shares available for future grant 20,075 99,950 22,300
======== ======== ========
Options exercisable (a) 88,125 162,550 183,050
======== ======== ========
Price range of outstanding
options (b) $2.25-$8.00 $2.125-$6.50 $2.125-$4.375
=========== ============ =============
</TABLE>
(a) Options become exercisable at various times until expiration dates
ranging from March 1995 through October 1999.
(b) Prices reflect the fair market value on the dates of grant.
The exercise of nonqualified stock options in the fiscal years ended
September 30, 1995, October 1, 1994 and October 2, 1993 resulted in income
tax benefits of $192,116, $83,159 and $238,213, respectively, which were
credited to additional paid-in capital. The income tax benefits result from
the difference between the market price on the exercise date and the option
price.
9. MANAGEMENT FEE INCOME
As of September 30, 1995, the Company provides management services to six
restaurants and a cafeteria owned by outside parties. In accordance with the
contractual arrangements, the Company earns fixed fees and management fees
based on restaurant sales and operating profits as defined by the various
management agreements.
The Company terminated a management agreement for a restaurant located in
Miami, Florida in April 1994. During 1994, the Company had advanced
approximately $507,000 for working capital and restaurant supplies at such
location. In connection with the termination, the owner of the restaurant
agreed to pay $200,000 of such advances and issued a note to the Company for
such amount. The Company wrote off as uncollectible and charged to
management fee income $307,000 of advances. Additionally, the Company
provided an allowance by charging management fee income of $200,000 against
the note due to the uncertainty of the note's collectibility.
Restaurants managed had net sales of $10,838,664, $10,642,895 and
$10,973,081 during the management periods within the years ended September
30, 1995, October 1, 1994, October 2, 1993, respectively, which are not
included in consolidated net sales of the Company.
F-14
<PAGE>
<PAGE>
10. INCOME TAXES
As discussed in Note 1, the Company adopted Statement 109 as of October 3,
1993. The cumulative effect of this change in accounting for income taxes of
$507,770 is determined as of October 3, 1993 and is reported separately in
the statement of operations for the year ended October 1, 1994.
The provision for income taxes reflects Federal income taxes calculated on a
consolidated basis and state and local income taxes calculated by each
subsidiary on a nonconsolidated basis. For New York State and City income
tax purposes, the losses incurred by a subsidiary may only be used to offset
that subsidiary's income.
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
Year Ended
------------------------------------------
September 30, October 1, October 2,
1995 1994 1993
<S> <C> <C> <C>
Current provision:
Federal $ 532,947 $ 365,464 $ 1,188,281
State and local 475,062 446,161 818,161
----------- ----------- -----------
1,008,009 811,625 2,006,442
----------- ----------- -----------
Deferred provision (credit):
Federal (314,745) (206,955) (127,315)
State and local 84,167 99,950 (43,928)
----------- ----------- -----------
(230,578) (107,005) (171,243)
----------- ----------- -----------
777,431 704,620 1,835,199
Utilization of net operating loss
carryforward - - (119,100)
----------- ----------- -----------
$ 777,431 $ 704,620 $ 1,716,099
=========== =========== ===========
</TABLE>
The provision for deferred income taxes as of October 2, 1993 consists of
the following:
<TABLE>
<S> <C>
Excess (book) tax depreciation and amortization $ (105,283)
Operating lease deferred credit (65,960)
------------
$ (171,243)
============
</TABLE>
F-15
<PAGE>
<PAGE>
The provision for income taxes differs from the amount computed by applying
the Federal statutory rate due to the following:
<TABLE>
<CAPTION>
Year Ended
------------------------------------------
September 30, October 1, October 2,
1995 1994 1993
<S> <C> <C> <C>
Provision for Federal income taxes (34%) $ 646,000 $ 458,000 $ 1,242,000
State and local income taxes net of Federal
tax benefit 369,000 360,000 511,000
Amortization of goodwill 26,000 26,000 26,000
Tax credits (299,000) (173,000) -
Effect of net operating loss carryforward - (119,100)
Nondeductible losses - 51,680
Other 35,431 33,620 4,519
----------- ----------- -----------
$ 777,431 $ 704,620 $ 1,716,099
=========== =========== ===========
</TABLE>
Deferred tax assets or liabilities are established for (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes,
and (b) operating loss carryforwards. The tax effects of items comprising
the Company's net deferred tax asset are as follows:
<TABLE>
<CAPTION>
September 30, October 1,
1995 1994
<S> <C> <C>
Deferred Tax Assets:
Operating loss carryforwards $ 639,096 $ 647,622
Operating lease deferred credits 673,530 607,124
Carryforward tax credits 361,539 -
Provision for uncollectible long-term receivable 34,000 68,000
Valuation allowance (690,204) (574,357)
----------- -----------
1,017,961 748,389
Deferred Tax Liabilities:
Depreciation and amortization 145,879 178,407
----------- -----------
Net deferred tax asset $ 872,082 $ 569,982
=========== ===========
</TABLE>
F-16
<PAGE>
<PAGE>
A valuation allowance for deferred taxes is required if, based on the
evidence, it is more likely than not that some of the deferred tax assets
will not be realized. The Company believes that uncertainty exists with
respect to future realization of certain operating loss carryforwards and
operating lease deferred credits. Therefore, the Company provided a
valuation allowance of $690,204 at September 30, 1995 and $574,357 at
October 1, 1994. The Company has state operating loss carryforwards of
$6,646,056 and local operating loss carryforwards $4,857,850, which expire
in the years 2000 through 2010.
11. OTHER INCOME
Other income consists of the following:
<TABLE>
<CAPTION>
Year Ended
-----------------------------------------------
September 30, October 1, October 2,
1995 1994 1993
<S> <C> <C> <C>
Purchasing service fees $ 67,367 $ 126,780 $ 97,433
Insurance proceeds (a) 914,475 242,666 -
Sales of logo T-shirts and hats 180,364 67,455 68,006
Other 56,860 120,082 79,200
------------ ---------- ----------
$ 1,219,066 $ 556,983 $ 244,639
============ ========== ==========
</TABLE>
(a) In July 1994, the Company was required to close a restaurant in
Manhattan (Ernie's) on a temporary basis to enable structural repairs to be
made to the ceiling of the restaurant. The cost of such repairs, other
ongoing restaurant operating expenses and a guaranteed profit were borne by
a third party. The restaurant reopened in February 1995 and the agreement
provides that the third party continue to guarantee some level of operating
profits through January 1998. During the fiscal years ended September 30,
1995 and October 1, 1994, the Company received $914,475 and $242,666,
respectively, in excess of the continuing restaurant operating expenses.
12. QUARTERLY INFORMATION (UNAUDITED)
The following table sets forth certain quarterly operating data.
<TABLE>
<CAPTION>
Fiscal Quarter Ended
------------------------------------------------------------
December 31, April 1, July 1, September 30,
1994 1995 1995 1995
<S> <C> <C> <C> <C>
1995
Net sales $ 16,357,705 $ 14,759,085 $ 21,046,818 $ 20,863,299
Gross restaurant profit 11,837,623 10,584,425 15,359,109 15,220,807
Net income (loss) 291,213 (482,122) 635,834 676,200
Net income (loss) per share $.09 $(.15) $.20 $.20
</TABLE>
F-17
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal Quarter Ended
---------------------------------------------------------
January 1, April 2, July 2, October 1,
1994 1994 1994 1994
<S> <C> <C> <C> <C>
1994
Net sales $ 15,202,498 $ 11,582,738 $ 17,792,902 $ 15,826,701
Gross restaurant profit 11,073,152 7,981,649 13,083,359 11,929,706
Income (loss) before cumulative
effect of accounting change 445,088 (1,037,407) 771,034 454,318
Net income (loss) 957,088 (1,037,407) 771,034 454,318
Income (loss) per share before
cumulative effect of accounting
change $.14 $(.32) $.24 $.14
Net income (loss) per share $.30 $(.32) $.24 $.14
</TABLE>
13. SUBSEQUENT EVENT
In September 1995, the Company signed letters of intent with a third party
to design, build and operate a group of restaurants in a 2,100-room Las
Vegas resort/casino (''Las Vegas Project'') which is expected to open in
December 1996. The Company plans to spend approximately $8-$9 million on
these restaurants.
In December 1995, the Company received a commitment letter from its main
bank which would amend the Company's existing credit facility. The new
agreement would enable the company to borrow $5,000,000 for working capital
for the existing Company restaurants and $6,000,000 for the construction of
and working capital for the Las Vegas Project. After 2 years the revolving
loans will be converted into term loans payable over 24 months. Outstanding
revolving loans bear interest at 1% above the bank's prime rate until
converted to term loans at which time the interest rate will become 1 1/2%
above the bank's prime rate. The Company is required to pay a commitment fee
of $150,000 at closing, and a facility fee on any unused portion of the
revolving credit facility.
The commitment letter includes a four year $2,000,000 Letter of Credit
Facility for use for the Company's existing restaurants, and a one year
(with a six month extension available at the Company option) $3,000,000
Letter of Credit Facility for the Las Vegas Project. The Company is
required to pay commissions ranging from 1 1/2% to 2% per annum on
outstanding letters of credit.
The existing revolving credit facility is, and the amended facility will be
guaranteed by each of the Company's subsidiaries, and secured by security
interests in their respective assets and by a pledge by the Company of the
stock of such subsidiaries.
The new agreement includes restrictions relating to, among other things,
indebtedness for borrowed money, capital expenditures, advances and
investments, mergers, sale of assets, dividends, and liens on the property
of the Company. The agreement will also contain financial covenants,
requiring the Company to maintain a minimum ratio of debt to net worth,
minimum shareholders equity, and a minimum ratio of cash flow to prior
debt service.
* * * * * *
F-18
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 28th day of December, 1995.
ARK RESTAURANTS CORP.
By: /s/ Michael Weinstein
--------------------------------
MICHAEL WEINSTEIN, President
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been duly signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Ernest Bogen Chairman of the Board December 28, 1995
- ----------------
(Ernest Bogen)
/s/ Michael Weinstein President and Director December 28, 1995
- ---------------------
(Michael Weinstein)
/s/ Vincent Pascal Vice President, December 28, 1995
- ------------------ Secretary and Director
(Vincent Pascal)
/s/ Robert Towers Vice President, Treasurer, December 28, 1995
- ----------------- Principal Financial Officer
(Robert Towers) and Director
/s/ Andrew Kuruc Vice President, Controller, December 28, 1995
- ---------------- Principal Accounting Officer
(Andrew Kuruc) and Director
/s/ Donald D. Shack Director December 28, 1995
- -------------------
(Donald D. Shack)
/s/ Jay Galin Director December 28, 1995
- -------------------
(Jay Galin)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS SEQUENTIALLY
- ----------------- NUMBERED
PAGE
------------
<S> <C> <C>
3.1 Certificate of Incorporation of the Registrant, filed on January
4, 1983, incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
October 1, 1994 (the "1994 10-K").
3.2 Certificate of Amendment of the Certificate of Incorporation of
the Registrant filed on October 11, 1985, incorporated by
reference to Exhibit 3.2 to the 1994 10-K.
3.3 Certificate of Amendment of the Certificate of Incorporation of
the Registrant filed on July 21, 1988, incorporated by reference
to Exhibit 3.3 to the 1994 10-K.
3.4 By-Laws of the Registrant, incorporated by reference to Exhibit
3.4 to the 1994 10-K.
10.1 Amended and Restated Redemption Agreement dated June 29, 1993
between the Registrant and Michael Weinstein, incorporated by
reference to Exhibit 10.1 to the 1994 10-K.
10.2 Form of Indemnification Agreement entered into between the
Registrant and each of Michael Weinstein, Ernest Bogen, Vincent
Pascal, Robert Towers, Jay Galin, Andrew Kuruc and Donald D.
Shack, incorporated by reference to Exhibit 10.2 to the 1994
10-K.
10.3 Ark Restaurants Corp. Amended Stock Option Plan, incorporated by
reference to Exhibit 10.3 to the 1994 10-K.
10.4 Lease Agreement dated June 9, 1982, between Rebak Realty Co., as
lessor, and MEB Emporium Corp., as lessee, incorporated by
reference to Exhibit 10.4 to the 1994 10-K.
10.5 Lease Agreement dated October 27, 1982, between Majestic Towers
Co., as lessor, and MEB Emporium Corp., as lessee, incorporated
by reference to Exhibit 10.5 to the 1994 10-K.
10.6 Lease Agreement dated June 1, 1983, between 101 West 77th Street
Corp., as lessor, and MEB On Columbus, Inc., as lessee, as
assignee of DPK Restaurants, Inc., incorporated by reference to
Exhibit 10.6 to the 1994 10-K.
10.7 Lease Agreement dated November 10, 1983, between BJW Associates,
as lessor, and MEB Dining 18 Inc., as lessee,
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
incorporated by reference to Exhibit 10.7 to the 1994 10-K.
10.8 Lease Agreement dated August 9, 1984, between G.P. Associates, as
lessor, and MEB On First, Inc., as lessee, incorporated by
reference to Exhibit 10.8 to the 1994 10-K.
10.9 Agreement of Lease dated April 26, 1985, between 2 Park Avenue
Associates and The Ritz Cafe, Inc., incorporated by reference to
Exhibit 10.9 to the 1994 10-K.
10.10 Assumption Agreement dated June 27, 1985, between Future
Brothers, Inc., as assignee of Alfred Steiner, as sublessor, and
Father Brad's Broadway Dining, Inc., as sublessee, incorporated
by reference to Exhibit 10.10 to the 1994 10-K.
10.11 Lease Agreement dated August 1, 1985, between Livingstone
Management Co., Inc., as lessor, and Conis Realty Corp., as
lessee, incorporated by reference to Exhibit 10.11 to the 1994
10-K.
10.12 Lease Agreement dated August 1, 1985, between Soledad Place
Corp., as lessor, and La Femme Noire, Inc., as lessee,
incorporated by reference to Exhibit 10.12 to the 1994 10-K.
10.13 Indenture of Lease dated as of January 1, 1986, between
Buchbinders Restaurant, Inc. and Ark 27th St., Inc., incorporated
by reference to Exhibit 10.13 to the 1994 10-K.
10.14 Agreement of Lease dated as of April 1, 1986, between 377 Third
Avenue Co. and Ark 27th St., Inc., incorporated by reference to
Exhibit 10.14 to the 1994 10-K.
10.15 Management Agreement dated September 10, 1986 by and between
Amphitryon, Inc. and Standish Group Inc. and Ark Seventh Avenue
South Corp., incorporated by reference to Exhibit 10.15 to the
1994 10-K.
10.16 Agreement dated as of November 11, 1986 among the Registrant, La
Femme Noire, Inc. and Barbara Smith, incorporated by reference to
Exhibit 10.16 to the 1994 10-K.
10.17 Management Agreement dated June 1987 between Ark Operating Corp.
and Rio Restaurant Associates, incorporated by reference to
Exhibit 10.17 to the 1994 10-K.
10.18 Agreement of Lease dated June 29, 1987 between the Registrant and
Bruce and Carol Haley, incorporated by reference to Exhibit 10.18
to the 1994 10-K.
10.19 Lease Agreement dated as of May 2, 1988, between Union Station
Venture, Ltd., as lessor, and Ark Union Station, Inc., as lessee,
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
incorporated by reference to Exhibit 10.19 to the 1994 10-K.
10.20 Agreement dated December 9, 1988 among 625 Property Associates
and Ark Sub-One Corp., incorporated by reference to Exhibit 10.20
to the 1994 10-K.
10.21 Lease Agreement dated as of January 5, 1989 by and between Union
Station Venture, Ltd. and Ark D.C. Kiosk, Inc., incorporated by
reference to Exhibit 10.21 to the 1994 10-K.
10.22 Agreement dated February 22, 1989 by and among Lawrence P.
Forgione, Ark Restaurants Corp. and Ark Columbus Corp.,
incorporated by reference to Exhibit 10.22 to the 1994 10-K.
10.23 Restaurant Lease Agreement dated August 22, 1989 by and between
Potomac River Front Limited Partnership and Ark Potomac
Corporation, incorporated by reference to Exhibit 10.23 to the
1994 10-K.
10.24 Lease dated January 1, 1990 between George H. Beane and Encarnita
V. Quinlan, as lessors, and Columbus Cafe Corp., as lessee,
incorporated by reference to Exhibit 10.24 to the 1994 10-K.
10.25 First Amendment to Lease dated January 1990 between Potomac River
Front Limited Partnership ("Landlord") and Ark Potomac
Corporation ("Tenant"), incorporated by reference to Exhibit
10.25 to the 1994 10-K.
10.26 Second Amendment to Lease dated June 11, 1990 between Potomac
River Front Limited Partnership ("Landlord") and Ark Potomac
Corporation ("Tenant"), incorporated by reference to Exhibit
10.26 to the 1994 10-K.
10.27 Amended and Restated Management Agreement dated December 4, 1990
between AROC and Ark Corporation and DBS Restaurant Group, Inc.,
incorporated by reference to Exhibit 10.27 to the 1994 10-K.
10.28 Lease dated January 25, 1991 between Wayfarer Inns of New York,
Inc., as lessor, and SSWB Restaurants, Inc., as lessee,
incorporated by reference to Exhibit 10.28 to the 1994 10-K.
10.29 Lease dated April 18, 1991 between South Street Seaport Limited
Partnership, as lessor, and Ark of the Seaport, Inc., as lessee,
incorporated by reference to Exhibit 10.29 to the 1994 10-K.
10.30 Management Agreement dated June 1, 1991 between Ark Boston Corp.
and Flower Market Restaurant, Inc., incorporated by reference to
Exhibit 10.30 to the 1994 10-K.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
10.31 Third Amendment to Lease dated January 28, 1992 between Potomac
River Front Limited Partnership ("Landlord") and Ark Potomac
Corporation ("Tenant"), incorporated by reference to Exhibit
10.31 to the 1994 10-K.
10.32 Lease dated August 5, 1992 between Lehndorff Tysons Joint
Venture, as Landlord, and Tysons America Corp., as Tenant,
incorporated by reference to Exhibit 10.32 to the 1994 10-K.
10.33 Letter Agreement dated December 4, 1992 among the Registrant, La
Femme Noire, Inc. and Barbara Smith, incorporated by reference to
Exhibit 10.33 to the 1994 10-K.
10.34 Amended and Restated Credit Agreement dated December 30, 1992
between the Registrant and Bank Leumi Trust Company of New York,
incorporated by reference to Exhibit 10.34 to the 1994 10-K.
10.35 Modification of Lease dated December 31, 1992 between Moklam
Enterprises, Inc. ("Landlord") and Father Brad's Broadway Dining,
Inc. ("Tenant"), incorporated by reference to Exhibit 10.35 to
the 1994 10-K.
10.36 Operating Agreement, dated March 3, 1993 between Ark JMR Corp.
and Jim McMullen Restaurant, Inc., incorporated by reference to
Exhibit 10.36 to the 1994 10-K.
10.37 Restated Indenture of Lease dated August 1, 1993 between Bryant
Park Restoration Corporation, as Landlord, and Ark Bryant Park,
as Tenant, as amended by an Amendment dated December 1, 1993,
incorporated by reference to Exhibit 10.37 to the 1994 10-K.
10.38 Amendment dated August 5, 1993 to the Lease dated January 1, 1990
between George H. Beane and Encarnita V. Quinlan, as lessors, and
Columbus Cafe Corp., as lessee, incorporated by reference to
Exhibit 10.38 to the 1994 10-K.
10.39 Sublease Agreement dated October 13, 1993 between Frank Catania,
as Lessor and Ark Fifth Avenue Corp., as Lessee, incorporated by
reference to Exhibit 10.39 to the 1994 10-K.
10.40 Sublease dated November 15, 1993 between Ark Oxnard Corp., as
subtenant, and Michael Koutnik, as sublandlord, incorporated by
reference to Exhibit 10.40 to the 1994 10-K.
10.41 First Amendment to Lease dated January 15, 1994 between Lehndorff
Tysons Joint Venture ("Landlord") and Tysons America Corp.,
incorporated by reference to Exhibit 10.41 to the 1994 10-K.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
10.42 Lease Agreement dated February 4, 1994 between Union Station
Venture, Ltd. and La Femme Noire D.C. Incorporated, incorporated
by reference to Exhibit 10.42 to the 1994 10-K.
10.43 Agreement dated July 15, 1994 between Avis Rent A Car System,
Inc. and MEB Emporium Corp., incorporated by reference to Exhibit
10.43 to the 1994 10-K.
10.44 Letter Agreement dated August 10, 1994 between the Registrant and
Bank Leumi Trust Company of New York, incorporated by reference
to Exhibit 10.44 to the 1994 10-K.
10.45 Letter Agreement dated September 27, 1994 among Barbara Smith,
the Registrant, La Femme Noire, Inc. and La Femme Noire D.C.
Incorporated, incorporated by reference to Exhibit 10.45 to the
1994 10-K.
10.46 Lease dated November 2, 1994 between Andre Soltner and Simone
Soltner d/b/a ANSI Realty Company, Owner and KRA Holdings, Inc.,
Tenant, incorporated by reference to Exhibit 10.46 to the 1994
10-K.
10.47 Lease dated November 18, 1994 between Islamorada Resort, Inc., as
Landlord, and Ark Islamorada Corp., as Tenant, incorporated by
reference to Exhibit 10.47 to the 1994 10-K.
10.48 First Amendment of Lease dated as of the 13th day of July, 1994
by and between Mega Realty, L.L.C. and Conis Realty Corp.
10.49 Extension and Modification of Lease dated September 1995 between
Rebak Realty Co. and MEB Emporium Corp.
10.50 Amendment and Modification of Leases, dated as of June 13, 1995
between Buchbinders Restaurant Inc. and Ark 27th Street, Inc.
10.51 Agreement dated December 5, 1995 between United Brody Corp. and
Ark Steakhouse Corp.
21 Subsidiaries of the Registrant.
23 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule pursuant to Article 5 of Regulation S-X
filed with EDGAR Version only.
</TABLE>
<PAGE>
<PAGE>
FIRST AMENDMENT OF LEASE
This First Amendment of Lease, dated as of the 13th day of July, 1994,
by and between MEGA REALTY, L.L.C., having offices c/o CPL New York, 145 West
30th Street, New York, New York 10001 ("Landlord"), and CONIS REALTY CORP.,
having offices at 158 West 29th Street, New York, New York 10001 ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant are parties to a certain Lease dated
August 1, 1985 (the "Lease") between Livingstone Management Co., Inc.
(Landlord's predecessor-in-interest) and Tenant affecting premises known as
957-961 First Avenue, New York, New York ("Premises"); and
WHEREAS, Landlord and Tenant desire to amend the Lease as set forth
herein.
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. Schedule B of the Lease is hereby amended, so that the fixed annual
rent payable for each Lease Year (as such term is defined in the Lease) from
October 1, 1994 through September 30, 1997, shall be at the annual rate equal to
the greater of:
(a) $380,000.00 per annum (which amount is calculated to include
the reduction of $2,500.00 per month referred to in Note 2 of Schedule B, and is
subject to increase to $410,000.00 per annum pursuant to the terms of said Note
2); and
(b) Thirteen (13%) percent of Gross Sales (hereinafter defined),
but not more than $430,000.00 per annum (subject to increase to $460,000.00 per
annum pursuant to the terms of said Note 2).
2. The term "Gross Sales," as used herein, shall mean and include
receipts from all business conducted upon or from the Premises by Tenant and all
others (including all licensees, concessionaires and tenants of Tenant), whether
such sales be evidenced by check, credit, charge account, exchange or otherwise,
and shall include, but not be limited to amounts received from the sales of food
and other merchandise and for services performed at the Premises, together with
all orders for goods or
<PAGE>
<PAGE>
services taken or received at the Premises, whether such orders be filled at the
Premises or elsewhere, and whether such sales be made by means of merchandise or
other vending machines at the Premises. If one or more departments, spaces or
concessions shall be sublet or conducted by any person other than Tenant, there
shall be included in Gross Sales all of the gross receipts of such departments,
spaces or concessions in the same manner and with the same effect as if the
business or sales of such departments, spaces or concessions had been conducted
by Tenant itself, provided, however, that with respect to the store presently
leased by Tenant to a subtenant at 957 First Avenue, neither the rents paid by
such subtenant to Tenant nor the gross receipts of such subtenant shall be
included in Gross Sales. Gross Sales shall not include the amount of any sales,
use or gross receipts tax imposed by any federal, state or municipal authority
on sales and collected from customers, provided that the amount thereof is
separately added to the selling price and actually paid by Tenant to such
governmental authority, and provided, further, that no franchise, capital stock,
corporation, income or similar tax imposed upon Tenant's receipts or income
(whether gross income or adjusted income) shall reduce Gross Sales. Gross Sales
shall also exclude gratuities paid by customers to and received by Tenant's
employees. Each charge or sale upon credit shall be treated as a sale for the
full price in the month during which such charge or sale shall be made, and
shall be reduced by the amount of fees imposed by any third party for extending
or processing such charges or credits, and irrespective of when payment is
actually received by Tenant.
3. During the Lease Year commencing October 1, 1994, Tenant shall pay
estimated monthly installments on account of fixed annual rent at the rate set
forth in sub-paragraph 1(a) above, subject to adjustment following the end of
said Lease year based upon Tenant's Gross Sales for said Lease Year, in the
manner hereinafter set forth. For each subsequent Lease Year during the term of
this rent adjustment, Tenant shall pay estimated monthly installments on account
of fixed annual rent at the greater of the two rates set forth in sub-paragraphs
1(a) and 1(b) above as applied to the immediately preceding Lease Years, which
estimated payment shall be adjust following the end of such Lease Year in the
manner hereinafter set forth.
<PAGE>
<PAGE>
4. Gross Sales shall be determined by Tenant for each Lease Year
during the term of the rent adjustment provided for herein. Within thirty days
following the end of each such Lease Year, Tenant shall furnish Landlord with a
statement in reasonable detail of Gross Sales for the prior Lease Year, which
statement shall be certified as true and complete by an independent certified
public accountant or by the chief financial officers of Tenant. Such statement
shall be accompanied by payment to Landlord of the amount of fixed annual rent,
if any, shown to have been underpaid to Landlord for the prior Lease Year.
Tenant shall also furnish its federal income tax returns to Landlord for the
entire period of this rent adjustment, within 30 days after Tenant shall file
each return.
If Tenant's statement for such Lease Year shall show that Tenant has
overpaid fixed annual rent, then Landlord shall allow Tenant a credit against
next installments of fixed annual rent in the amount so overpaid, and fixed
annual rent for such then current Lease Year shall again be adjusted equal to
the prior Lease Year's fixed annual rent, as so re-calculated.
5. Tenant agrees to prepare and keep on the Premises or its principal
office in Manhattan for a period of not less than three (3) years following the
end of each Lease Year, accurate books of account and records of daily Gross
Sales, including without limitation all federal, state and local tax returns,
and copies of relevant contracts, checks, vouchers, inventory records, dated
cash register tapes, sales slips and such other documentations as would enable
Landlord to make a full and complete audit of Gross Sales ("Books and Records").
Landlord and Landlord's authorized representatives shall have the right to
examine Tenants's Books and Records during regular business hours. Tenant agrees
that all Gross Sales shall be registered at the time each sale or transaction is
made in cash registers containing locked-in cumulative tapes with cumulation
capacity satisfactory to Landlord or by means of other devices then customarily
used by similar businesses.
6. The acceptance by Landlord of payments of rent and statements of
Gross Sales shall be without prejudice to Landlord's right to examine Tenant's
Books and Records in order to verify the amounts thereof.
<PAGE>
<PAGE>
7. At its option, Landlord may conduct, at any reasonable time upon
(7) days prior written notice to Tenant, a complete audit to be made of the
Books and Records (including the books and records of any subtenant, operator,
concessionaire or licensee) for the period covered by any statement required to
be furnished by Tenant as set forth above. Any additional fixed annual rent
found to be due and owing to Landlord as a result of any examination or audit
shall immediately be due and payable with interest. In the event such
examination or audit discloses that Tenant has understated Gross Sales by 3% or
more, Tenant agrees to pay to Landlord the reasonable cost of such examination
and audit, and all future statements of Gross Sales shall be certified as true
and complete by an independent certified public accountant; and in the event
that such examination or audit discloses that Tenant has understated Gross Sales
by 5% or more, then, in addition to the foregoing, at Landlord' option, the rent
reduction provided for in this First Amendment of Lease shall be null and void,
and the terms of Schedule B of the Lease shall be reinstated as of October 1,
1994 and Tenant shall immediately pay any deficiency in fixed annual rent
together with interest and late charges thereon at the rates specified in the
Lease from the dates as of which said deficient amounts would have been payable
initially, but for this First Amendment of Lease, until the date of full payment
by Tenant.
8. If Tenant shall assign this Lease or sublet more than 30% of that
portion of the Premises presently used for restaurant purposes, then, at
Landlord's option, as of the effective date of such assignment or subletting the
rent adjustments set forth in this First Amendment of Lease shall be of no
further force or effect and the rents payable under Schedule B of the Lease
shall be reinstated.
9. From and after October 1, 1997, Tenant shall pay fixed annual rent
pursuant to the provisions of Schedule B of the Lease, without modification
hereunder.
10. Except as hereby modified, the Lease remains in full force and
effect in accordance with its terms. Tenant and Landlord each confirms that, to
the best of its knowledge, the other party is not in default under the Lease.
However, the immediately preceding sentence is not intended for the benefit of,
nor as a waiver of any claims either party may have against, any prior owner,
prior mortgagee or prior managing agent of the Premises.
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11. This First Amendment of Lease represents the entire agreement
between the parties with respect to the subject matter hereof, and it cannot be
changed except by written agreement of the parties.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this First
Amendment of Lease as of the day and year first above written.
LANDLORD: MEGA REALTY, L.L.C.
By:______________________________
TENANT: CONIS REALTY CORP.
By:______________________________
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EXTENSION AND MODIFICATION OF LEASE
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AGREEMENT made as of this ______ day of September, 1995.
W I T N E S S E T H:
WHEREAS by lease ("Lease") dated as of June 9, 1982, REBAK REALTY
CO. ("Landlord"), having an office at 250 West 57th Street, Suite 1714, New
York, New York 10107, did lease to MEB EMPORIUM CORP. ("Tenant") premises as
described in such Lease ("Demised Premises").
WHEREAS Landlord and Tenant desire to extend and modify such
Lease, it is hereby agreed as follows:
1) The term of the Lease shall be extended to November 30, 2008.
2) Commencing with January 1, 1996 Paragraph 40 of such Lease
shall be deemed deleted and in lieu of the rent payable therein Tenant shall pay
the following fixed minimum rent ("Fixed Minimum Rent") as same may be increased
pursuant to Paragraph 3 below:
a) The sum of $300,000.00 per annum for the period from January
1, 1996 to December 31, 1996 ($25,000.00 per month);
b) The sum of $306,000.00 per annum for the period from January
1, 1997 to December 31, 1997 ($25,500.00 per month);
c) The sum of $312,120.00 per annum for the period from January
1, 1998 to December 31, 1998 ($26,010.00 per month);
d) The sum of $318,362.40 per annum for the period from January
1, 1999 to December 31, 1999 ($26,530.20 per month);
e) The sum of $324,729.65 per annum for the period from January
1, 2000 to December 31, 2000 ($27,060.80 per month);
f) The sum of $331,224.19 per annum for the period from January
1, 2001 to December 31, 2001 ($27,602.02 per month);
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g) The sum of $337,848.72 per annum for the period from January
1, 2002 to December 31,2002 ($28,154.07 per month);
h) The sum of $344,605.82 per annum for the period from January
1, 2003 to December 31, 2003 ($28,717.15 per month);
i) The sum of $351,497.92 per annum for the period from January
1, 2004 to December 31,2004 ($29,291.49 per month);
j) The sum of $358,527.84 per annum for the period from January
1, 2005 to December 31, 2005 ($29,877.32 per month);
k) The sum of $365,698.40 per annum for the period from January
1, 2006 to December 31, 2006 ($30,474.87 per month);
l) The sum of $373,012.41 per annum for the period from January
1, 2007 to December 31, 2007 ($31,084.37 per month);
m) The sum of $380,472.69 per annum for the period from January
1, 2008 to November 30, 2008 ($31,706.06 per month).
3) The Fixed Minimum Rent shall be a minimum as against
percentage rent ("Percentage Rent") equal to eight (8%) percent of gross sales
("Gross Sales") of Tenant for the calendar year up to $4,000,000 in sales, and
nine (9%) percent of gross sales above $4,000,000. During the last year of the
term, such percentage rent will be prorated.
a) The term Gross Sales as used herein is hereby defined to
mean, except as specifically excluded below, receipts from sales of food,
liquor, and all other items from business conducted upon the Demised Premises by
Tenant and/or any agents, licensees, or sublessees and whether such sales be
evidenced by check, credit, script or barter certificate, charge account, or
cash. If any one or more departments or other divisions of Tenant's business in
the Demised Premises shall be sublet by Tenant or conducted by any person, firm
or corporation other than Tenant, then there shall be included in Gross Sales
for the purpose of determining
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the Rent payable hereunder all the Gross Sales of such departments or divisions
made in the Demised Premises in the same manner and with the same effect as if
the business or sales of such departments and divisions of Tenant's business had
been conducted by Tenant itself. Each charge or sale upon installment or credit
shall be treated as a sale in the month during which such charge or sale shall
be made, irrespective of the time when Tenant shall receive payment (whether
full or partial) therefor.
Notwithstanding anything herein to the contrary, in computing
Gross Sales, the following shall be omitted:
(i) the amount of any sales, use or gross receipt taxes, cabaret,
amusement, excise or other similar tax or use taxes paid by Tenant's customers
at the time of sale and imposed by any federal, state, municipal or other
governmental authority;
(ii) all sums and credits received in settlement of claims for
loss or damage to merchandise; (iii) gratuities paid by customers to waiters or
other employees.
Anything to the contrary hereinabove notwithstanding with regard
to any income received from any juke box at the premises, or cigarette machines
at the premises, if such installations are operated by Tenant, the gross sales
for purpose of this Agreement shall be 10% of the net profits from the operation
of such installations, without giving Tenant credit for cost of installation
thereof. Should any of such equipment be operated by an outside operator, the
income received for purpose of this paragraph shall be the actual net income
received from such operator.
b) Tenant shall keep its records on a fiscal year basis ending on
the Saturday closest to September 30th. Within one hundred twenty (120) days
after the end of each fiscal year, the Tenant shall cause to be delivered to
Landlord a statement certified by an officer of Ark Restaurant Corp., which
shall set forth the Gross Sales (as defined herein) from the operation of the
Demised Premises for such calendar year. Such certification shall further state
that this is the same statement submitted to and accepted by Ark's auditors in
connection with the preparation of Ark's certified statement. So long as Tenant
is controlled by Ark Restaurant Corp., such accountant shall be the one
regularly certifying the records of Ark Restaurant Corp. In addition to all
other remedies of Landlord, failure to deliver such statement within
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the period as required above shall be deemed a substantial default by Tenant
under the Lease. If such report shall disclose that overage rent is due for such
preceding fiscal year, Tenant shall pay such overage rent together with such
report. After the first fiscal year and during each fiscal year thereafter
commencing with February 1 of the second fiscal year and February 1 of each
subsequent fiscal year Tenant shall pay as Additional Rent on account of such
years overage percentage of 1/12th of the annualized percentage rent of the
prior fiscal year. Upon the rendering of the certified statement for such year,
there shall be an adjustment by way of immediate payment of any additional sums
due for such year or credit for any overpayment made on account.
c) Tenant, with respect to business done on the Demised Premises,
shall keep or make available at the Demised Premises or office of parent, for a
period of three (3) years following the end of each Lease Year true and accurate
records and accounts which shall show all sales made and all gross receipts from
the business done upon and within the Demised Premises. Tenant shall provide
Landlord with copies of any Tenant's auditor's reports, statements, trial
balances or the like which relate to Tenant's sales in the Demised Premises. The
same shall be retained by Tenant for a period of three years after the date of
Tenant's receipt of such documents to the extent the same have been prepared by
and for Tenant. The Tenant covenants that accurate cash registers or other
commonly accepted method of recording sales will be installed and kept, or cause
to be installed and kept, by the Tenant within the Demised Premises, which shall
show and record each and every sale made upon and within the Demised Premises.
Such registers or other method shall show the total of the daily sales of all
business done upon and within the said Demised Premises by the Tenant. Such
records and accounts of the said business and sales tax returns pertaining
thereto shall be made available to Landlord or an accountant representing
Landlord and may be audited at Tenant's office at Ark Restaurant Corp. at all
reasonable times upon twenty (20) days prior written notice to Tenant, all at
Landlord's expense. If Landlord desires, at its own expense, to audit Tenant's
records of accounts it shall do so within one hundred eighty (180) days
following its receipt of the Tenant's annual certified statement mentioned in
subparagraph (b) of this paragraph. If Landlord does not so audit, then the
Tenant's aforementioned annual certified statement shall be deemed to be
conclusively
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accepted by Landlord as being correct, and Landlord shall have no right
thereafter to question or examine said records of accounts, except as to errors
resulting from fraud.
In the event it is determined by Landlord's audit of said
accounts and records that Tenant has understated its Gross Sales, whether
intentionally or unintentionally, Tenant will pay the Additional Rent due plus
interest on such rental from the date it should have been paid at the rate of
three (3) percent over prime of Chemical Bank. If the Gross Sales have been
understated by three (3%) percent or more, the cost of such audit, including all
reasonable expenses pertaining thereto, shall also be paid by Tenant
immediately. Any overpayment revealed by the audit shall be returned to the
Tenant. Notwithstanding the foregoing, should Landlord and Tenant disagree as to
any alleged discrepancy in rent, then the said accounts and records shall be
audited by an independent certified public accounting firm selected by Landlord
and Tenant and said firm's audit shall be deemed to be conclusive as between the
parties hereto, If the parties are unable to agree upon the independent
certified public accounting firm, then each of the parties will name an
independent accounting firm and then by lottery determine which of the two
independent accounting firms shall be utilized. "Independent" as used in the
foregoing sentence shall mean a firm that is not at the time nor has not, within
three (3) years prior to such time, been employed directly or indirectly by
Landlord or Tenant or their respective auditors. The party not prevailing shall
bear the cost of such audit.
3) Paragraph 61 of the Lease is deemed deleted and the sum of
$50,000 shall be deemed deleted from Paragraph 31 and of Paragraph 61 and
replaced with the sum of $100,000. In lieu of Paragraph 61 there shall be
inserted the following paragraph: Should Tenant not have been declared in
default under this lease it may replace the security hereunder with a clean,
irrevocable letter of credit in the sum of $100,000.00 drawn on Bank Leumi or a
major New York bank which is a member of the New York Regional Clearing House,
which letter of credit by its terms shall be automatically annually renewable
unless the bank issuing same serves written notice upon the Landlord, c/o Rebak
Realty Co., 250 West 57th Street, Suite 1714, New York, New York 10107, or such
other agent as to which Landlord notifies bank in writing in accordance with the
bank's standard procedure, and its attorney Jack Weprin, Esq., 1501
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Broadway, New York, New York 10036, at least thirty (30) days prior to the
expiration thereof, that it will not renew same. Should the letter of credit not
be replaced within twenty (20) days of its due date, then the beneficiary may
present same for payment. The terms of the letter of credit shall merely state
that the letter of credit is due and payable upon presentation of a sight draft
together with a signed statement by Landlord under the lease for store premises
2150 Broadway, New York, New York, stating that Tenant has defaulted thereunder.
Should such letter of credit be presented for payment, the proceeds thereof
shall be held by Landlord as if same were security in cash received under this
lease and shall be disposed of in such fashion. Tenant may, however, twice
during the term of this Lease as modified herein replace such cash with a letter
of credit as above.
Tenant acknowledges that as of the execution of this Amendment
there is no security held by Landlord or due to Tenant.
4) Anything to the contrary in the Lease as amended hereby
notwithstanding, Landlord may terminate the Lease at any time commencing with
December 1, 2003 ("Date of Termination"), provided Landlord has given Tenant
notice not less than six (6) months prior to Date of Termination, by paying to
Tenant the sum of $250,000.00, which sum shall be reduced by 1/60th for each
month that has transpired from December 31, 2003. Said sum to be placed in
escrow with Landlord's attorney four (4) weeks before date required for
surrender of possession. It is understood that Tenant shall be required to
deliver vacant possession of the premises "broom clean" upon the Date of
Termination which shall be deemed the Date of Termination pursuant to the Lease
as modified with Tenant's right to return of security subject to Landlord's
right to apply such portion of it necessary to cure any unperformed obligations
of Tenant. Should Tenant not peaceably and voluntarily deliver such possession
on such date, this Lease as amended shall in any event be deemed cancelled and
Landlord may use such remedies, at law or equity, which might be necessary to
obtain such possession. However, should such possession not have been granted
peaceably and voluntarily by Tenant on or before Date of Termination, the
aforesaid sum shall cease to be due to Tenant and Landlord shall be under no
obligation to pay same to such Tenant.
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Any reference to cancellation referred to in this paragraph
requiring the payment of any sums of money to the Tenant, shall deal only with
voluntary cancellation by Landlord. It is understood and agreed of course, that
should this Lease as amended be terminated or cancelled by Landlord because of
Tenant's failure to perform pursuant to the terms of the Lease as amended, that
there shall be no monetary consideration due to Tenant.
5) Tenant acknowledges that it waives any claim it may have
against Landlord with regard to the collapse of the 2nd floor of the building
containing the premises being let hereunder or any damages suffered by Tenant,
whether to its own property, to the property of other tenants in the building,
or as a result of the remedial work undertaken with regard to any part of the
building. Tenant further acknowledges that it waives any claim it may have
against Landlord as a result of the alleged missing staircase between the 2nd
floor and the 1st floor of the building and Tenant acknowledges it is renting
the premises "as is" with all conditions as presently exist. It is understood
that any reduced size of the premises being let as a result of the alteration to
the premises is what has been considered in arriving at the rental referred to
in this Agreement. This does not negate any claims which Tenant might have
against Avis.
5) Except for the aforementioned modifications, all of the terms,
covenants and conditions of the Lease dated June 9, 1982, including the
continuation of 1982/83 as the base tax year, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have hereunto executed this
Agreement this ____ day of September, 1995.
REBAK REALTY CO.
By:_____________________________
MEB EMPORIUM CORP.
By:_____________________________
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AMENDMENT AND MODIFICATION OF LEASES
AMENDMENT AND MODIFICATION OF LEASES made as of June 13, 1995 by
and between BUCHBINDERS RESTAURANT INC., with offices c/o Buchbinder & Warren,
One Union Square, New York, New York 10003 dated as of the 1st day of January,
1986 ("Buchbinders") and 377 THIRD AVENUE CO, dated as of the 1st day of April,
1986 ("377 Third"), which two leases together may hereinafter be referred to as
"The Leases", and ARK 27TH ST., INC., with offices at 85 Fifth Avenue, New York,
New York 10003 ("Tenant").
W I T N E S S E T H:
WHEREAS, Buchbinders and Tenant entered into a certain agreement
of lease dated as of January 1, 1986 whereby premises 375 Third Avenue and a
portion of 203 East 27th Street, New York, New York were leased to Tenant as
described in such lease.
WHEREAS, 377 Third and Tenant entered into a certain agreement of
lease dated as of April 1, 1986 whereby store and basement at 377 Third Avenue,
New York, New York were leased to Tenant.
WHEREAS, the parties wish to modify and extend The Leases, it is
hereby agreed as follows:
1. The term of The Leases shall be extended for a five-year
period commencing January 1, 1996 through December 31, 2000.
2. The aggregate base rental payable pursuant to The Leases shall
be at the rate of $200,000.00 per annum, payable in monthly installments of
$16,666.67.
3. Paragraph 2(a) of Buchbinders is hereby amended whereby the
figure "5%" is deleted and replaced with 10%, which overage shall be payable in
each calendar year where the aggregate gross receipts of both premises exceed
$1,900,000.00.
4. In lieu of the tax contribution called for under The Leases,
Tenant shall pay as tax contribution any increase in taxes over and above the
fiscal tax year 1994/95 as follows:
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375 Third Avenue - 100%
203 East 27th Street - 25%
377 Third Avenue - 50%
5. Tenant shall pay for any increase in vault taxes over and above
fiscal tax year ending May 31, 1995 with regard to the premises covered by The
Leases.
6. Tenant shall pay for all water & sewer charges as a result of any
meter servicing premises 373 Third Avenue and 375 Third Avenue, as well as 203
East 27th Street, New York, New York.
7. Except as hereby extended and amended all of the terms, covenants
and conditions of The Leases shall remain in full force and effect.
IN WITNESS WHEREOF Buchbinders, 377 Third and Tenant have duly executed
this Amendment as of the day and year first above written.
BUCHBINDERS RESTAURANT, INC.
By:_______________________________
377 THIRD AVENUE CO.
By:_______________________________
ARK 27TH ST., INC.
By:_______________________________
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AGREEMENT
THIS AGREEMENT is made as of this 5th day of December, 1995, by and
among UNITED BRODY CORP., a New York corporation, having a place of business at
Leggett Road, Ghent, New York, 12075 (hereinafter "Licensor"), and ARK
STEAKHOUSE CORP., a Nevada corporation, having an office at c/o Ark Restaurants
Corp., 85 Fifth Avenue, 14th Floor, New York, New York, 10003 (hereinafter
"Licensee").
W I T N E S S E T H:
WHEREAS, the Licensor is the owner of a certain service mark, namely
"GALLAGHER'S", which has been registered with the Patent and Trademark Office of
the United States of America under Registration No. 1,507,546 (hereinafter
"Service Mark"), and
WHEREAS, the Licensor is engaged in the restaurant business in the City
of New York, New York, and in connection therewith, Licensor has established a
national and international reputation for high-quality foods and fine service,
all of which has created substantial value in the Service Mark above described,
and
WHEREAS, Licensee recognizes and acknowledges the value of such Service
Mark, as well as the benefits to be derived from being identified with and
licensed by Licensor, with
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respect to the limited use of such Service Mark, and
WHEREAS, the Licensee desires to acquire the limited right to use such
Service Mark in connection with the operation of a restaurant at Las Vegas,
Nevada.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. USE OF NAME (SERVICE MARK); TERMINATION OF USE: Licensor gives and
grants to Licensee during the term of this Agreement a limited license to use
the Service Mark "Gallagher's" alone or together with the name "New York, New
York", or together with the name "Las Vegas", or together with both such names,
or any other, or any variation thereof as may be approved in writing by the
Licensor, in Licensor's absolute discretion, exclusively for the operation of a
business of a restaurant at Las Vegas, Nevada (hereinafter "Restaurant") for the
sale at retail of full-service meals, in a sit-down environment (non-fast-food
style), and also to be permitted to engage in the sale of "take out" food,
catering and the retail sale of food items (excluding mail order and excluding
locations other than within the City limits of Las Vegas, Nevada), subject to
and in accordance with the terms, conditions and standards set forth herein. The
Licensee agrees to use Licensor's Service Mark and name in connection with, and
exclusively for, the promotion and conduct of the Restaurant, as provided
hereunder, in accordance with the standards and terms and conditions stated
herein. The Licensee recognizes and acknowledges that the Licensor is the sole
and exclusive owner of the Licensor's Service Mark and agrees that it will not
register nor attempt to register such Service Mark or any
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confusingly similar mark in its own name or that of any other firm, person,
corporation or entity, whatsoever, and that Licensee will not use the aforesaid
Service Mark or any confusingly similar mark as any part of any corporate name
or in connection with any enterprise other than the Restaurant. Immediately upon
the expiration or termination of this Agreement, the Licensee agrees to cease
and forever abstain from the use of the aforesaid Service Mark and Licensee at
its sole cost and expenses, shall either destroy or return to Licensor, all
documents, instruments, display items, including stationery, identification
cards, building signage, menus, invoices, matchbooks, and the like bearing the
aforesaid Service Mark.
The delivery of all such materials as are required to be delivered to
the Licensor hereunder shall be made by the Licensee to the Licensor, at
Licensee's prepaid expense, free and clear of all charges or liens, at the place
for notice hereinafter described or at such other place within the State of New
York, as the Licensor shall indicate in writing. Such delivery shall be made
immediately upon the expiration or termination of this Agreement, irrespective
of the reason for termination.
The Licensee, after the expiration or other termination hereof, shall
not directly or indirectly contest or aid in contesting the validity or
ownership of the Service Mark or any action whatsoever in derogation of the
Licensor's claimed rights therein. Nothing contained in this Agreement shall be
construed to vest in the Licensee any right, title or interest in or to the
Licensor's Service Mark, the good will now or hereafter associated therewith, or
any right in the design or any such Service Mark or the character of any such
signage in connection therewith, other than the rights and license expressly
granted herein. Any and all good will
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associated with the Licensor's Service Mark shall inure directly and exclusively
to the benefit of and is the property of the Licensor.
All advertising by the Licensee shall be in good taste. The Licensee
shall refrain from the use of the Licensor's Service Mark in conjunction with or
integrated with any other tradename or Service Mark or any accompanying words,
insignias or symbols, except as hereinabove approved, or as expressly approved
by the Licensor, or as may be expressly required by law.
2. ANNUAL MINIMUM LICENSE FEE: The Annual Minimum License Fee shall be
Ten Thousand Dollars ($10,000) per year. Such minimum fee for the first year of
the term of this agreement is being paid concurrently with the execution of this
Agreement. If the lease for the Restaurant (the "Lease") is not executed on or
before September 30, 1996, the Licensor shall return to the Licensee $5,000 of
such minimum fee for the first year and upon such payment this agreement shall
be null and void and neither party shall have any liability hereunder.
The Annual Minimum License Fee, for each year during the term of this
agreement, shall be applied against an Annual License Fee computed at two
percent (2%) of Licensee's gross sales (as hereinafter defined). Payments to be
made monthly on account of such license fee on or before the 15th day of each
month beginning in the month immediately following the month in which the
restaurant commences operation and the same shall be based upon the gross sales
of the preceding calendar month.
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For the purposes of this Paragraph 2, each twelve month period shall be
based on Licensee's fiscal year ending on the Saturday nearest September 30th
and shall consist of the twelve months or shorter period ending on such date and
the first year of the term of this agreement (which may be shorter than twelve
months) shall be deemed to begin on the date Licensee commences operations at
the Restaurant.
The terms "gross sales" shall mean the aggregate of all receipts,
revenues and income, however characterized, resulting or derived directly from
the operation of the Restaurant during the term. Gross sales shall include
revenues from the sale at the Restaurant, for cash or credit, of all food,
beverages (including alcoholic beverages), goods, wares or merchandise
customarily produced for retail sale to the consumer public at a sit-down
restaurant operation both served at the premises or catered off premises. Gross
sales shall not include (i) any sales, excise or other taxes collected or
received by the Licensee in connection with the Restaurant and paid to the
taxing authorities by Licensee, (ii) gratuities to employees paid by Licensee's
customers, and (iii) the amount of sales otherwise included in the gross sales
which are received for payment of "complimentary meals" supplied to the
casino/hotel guests, patrons and executives for which the Licensee receives a
discounted payment below the stated menu prices; further provided, however, that
solely for purposes of calculating gross sales the total of such excluded
"complimentary meals" shall be limited to $500,000 per annum (or with respect to
any period less than a year, $500,000 multiplied by a fraction, the numerator of
which shall be the number of days in such period less than a year and the
denominator of which shall be 365).
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3. ACCOUNTING PROCEDURE: Licensee agrees to keep complete records of
the gross receipts of the Restaurant. Licensee shall furnish on a monthly basis
statements for the Restaurant's gross receipts for the preceding month. Such
statements will be certified by an officer of Licensee for the subject period.
All such statements shall be in accord with good accounting practice and shall
be submitted to the Licensor not later than the fifteenth (15th) day of the
month following the period for which the written statement is required to be
submitted. In addition thereto, the Licensee shall submit, with such statements,
its State of Nevada sales tax return for the immediately-preceding sales tax
reporting period.
Licensee shall submit an annual statement on or before October 20th of
each year for the year just ended, which statement shall be certified to by an
officer of Licensee. The Annual Statement shall set forth (i) gross receipts
less the authorized exclusion amount as set forth above, (ii) the calculation of
the percentage license fee for the prior year, (iii) the license fee previously
paid and (iv) the balance due, if any.
If any such annual statement shows additional sums payable by the
Licensee to the Licensor, such amount shall be delivered simultaneously with the
annual statement. If any such annual statement shows that an amount is payable
by Licensor to the Licensee, the Licensor shall within ten (10) days of the
annual statement pay such amount to the Licensee.
4. RIGHT OF AUDIT: Licensee agrees that, on reasonable notice, Licensor
or its agent shall have the right, once per annum during the term of this
Agreement, during regular business hours, to examine or audit the books and
accounts of Licensor to verify gross receipts
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as certified hereunder. If the audit shows a deficit, the parties shall endeavor
to resolve such dispute. In the event that the parties are unable to arrive at a
mutually satisfactory resolution, the accountants of each of Licensee and
Licensor, shall select an independent certified public accountant who shall
resolve the dispute, which resolution shall be conclusive and binding on the
parties.
If the audit shows a deficit in the license fees of five (5%) percent
or more, the cost of the audit shall be paid by Licensee. If the audit shows a
deficit of less than five (5%) percent, the cost of the audit shall be shared
equally by Licensor and Licensee. If the audit shows no deficit or any
overpayment, the cost of the audit will be borne by the Licensor. All deficits
uncovered by an audit shall bear interest at the rate of TWELVE (12%) per annum
from the date same was first due until paid.
5. STANDARDS: Licensee acknowledges that Licensor's reputation and the
value of its Service Mark has derived, in part, from Licensor's high quality of
service, presentation of restaurant product, showcasing, pre-preparation of
certain food products and preparation of food products. Licensee further
acknowledges that with respect to such service, presentation of restaurant
product, showcasing, pre-preparation of certain food products and preparation of
food products, Licensor has a secret, protected propriety interest in the
methods with respect thereto. Accordingly, Licensee agrees that Licensor's
Service Mark can only be protected through the adherence to certain public
service and food preparation standards.
In order to protect Licensor's proprietary interests, Licensee agrees
that the
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making of this Agreement and the payment of the initial fee is a prerequisite to
the availability of the various methodologies and standards with respect
thereto. Licensor shall, within thirty (30) days from the date the Lease is
executed, undertake the training of Licensee with regard to Licensor's
methodologies and standards employed at Licensor's location at 228 West 52nd
Street, New York, New York, 10019. Thereafter, Licensor shall provide Licensee
with a detailed written manual of such methodologies and standards (hereinafter
"Manual").
During the operation of the Restaurant, in recognition of the mutual
benefits accruing from maintaining the modus operandi set forth in the Manual,
Licensee agrees to make all reasonable efforts to adhere to the Manual in
connection with the Restaurant. If Licensee deviates in a material fashion from
the Manual, Licensor will give Licensee notice setting forth in reasonable
detail the manner in which the Licensee is materially deviating from the Manual
and Licensor shall take all reasonable steps to correct the deviation. Licensor
agrees that Licensee will not be in default hereunder as long as it is making
reasonable efforts, in good faith, to comply with the Manual. Nothing, however,
shall relieve Licensee of complying with the standards as set forth herein
(Manual), and continued deviation and/or noncompliance shall constitute default
hereunder. Any dispute as to whether the Licensee is complying with the
standards shall be resolved by arbitration pursuant to Paragraph 21 below.
6. RIGHT OF ENTRY AND INSPECTION: The Licensor or its authorized agent
and representative shall have the right to enter and inspect the premises and
examine and test food products and supplies for the purpose of ascertaining that
Licensee is operating the
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<PAGE>
<PAGE>
Restaurant in accordance with the terms of this Agreement and, in particular,
subject to the standards herein contained (Manual).
Any such inspection requiring the participation of personnel employed
by Licensee shall be limited to twice per annum.
Inspections shall be conducted during normal business hours.
The Licensor shall notify the Licensee in writing of any deficiencies
detected during the inspection. Licensor and Licensee shall discuss such
deficiencies and the manner in which they should be corrected and licensee shall
proceed to make all reasonable efforts, in good faith, to correct the
deficiencies.
7. AUTHORITY: The Licensee shall not represent or hold itself out as an
agent, legal representative, partner, subsidiary, joint venturer, franchise or
employee of the Licensor. The Licensee shall have no right or power to and shall
not bind or obligate the Licensor in any way, manner or thing whatsoever, nor
represent that it has any right to do so. In its public records and in its
relationship with other persons, or letterheads and business forms, Licensee
shall indicate its independent ownership of said business, and that it is only a
licensee of the Licensor. Licensee agrees to exhibit on the premises in a place
agreed upon between the Licensor and Licensee a notification that it is a
licensee of Licensor. All disclaimers required hereunder shall be subject to
Licensor's prior written approval.
8. DEFAULT: TERMINATION: The occurrence of any of the following events
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<PAGE>
<PAGE>
shall constitute good cause for Licensor, at its option and without prejudice to
any other rights or remedies provided for herein or hereunder or by law or
equity, to terminate this Agreement:
A. If Licensee shall be adjudicated a bankrupt, because
insolvent, or if a receiver (permanent or temporary) of its
property or any part thereof is appointed by a court of
competent jurisdiction and authority; if it makes a general
assignment for the benefit of creditors, or if a final
judgment remains unsatisfied of record for thirty (30) days or
longer (unless supersedeas bond is filed) or if execution is
levied against Licensee's business or property or suit to
foreclose any lien or mortgage against the premises or
equipment is instituted against Licensee and not dismissed
within thirty (30) days; or if Licensee defaults in the
performance of any term, condition or obligation in the
payment of any indebtedness to Licensor, its suppliers or
others, arising out of the purchase of supplies or the
purchase or lease of equipment or operation of the Restaurant,
except where any such amount owed are being diligently
contested in good faith by appropriate proceedings, and if any
such default is not cured within thirty (30) days after
written notice by Licensor to Licensee.
B. If Licensee defaults in the payment of any fee or other
payment due hereunder or fails to submit the financial or
reports, sales slips or the like of the "gross sales" as
provided herein, and fails to cure said default within thirty
(30) days
-11-
<PAGE>
<PAGE>
after written notification thereof, or if Licensee makes any
intentionally false statement in connection therewith.
C. If Licensee fails in good faith to make reasonable efforts to
cure any material deviation from the standards as set forth in
Paragraph 5 and 6 of this Agreement and such failure or
non-compliance shall continue after notification; or if
Licensee repeatedly commits violations of such provisions.
D. If Licensee violates any other term or condition of this
Agreement and Licensee shall not have diligently commenced to
cure such defaults thirty (30) days after written notice from
Licensor to cure same.
E. If Licensee suffers a violation of any law, ordinance, rule or
regulation of a governmental agency in connection with the
operation of the Restaurant and permits the same to go on
uncorrected after notification thereof, unless there is a bona
fide dispute as to the violation or legality of such law,
ordinance, rule or regulation.
F. If Licensee ceases to do business at the premises or defaults
under the Lease or loses its rights to possession of the
premises.
-12-
<PAGE>
<PAGE>
9. LICENSOR'S OBLIGATION: The Licensor shall have no obligations to
Licensee, whatsoever, except as expressly stated herein. Licensor shall not have
the obligation to direct or advise Licensee in the operation of the Restaurant,
and the terms hereof shall be considered limitations for the purpose of
protecting the Service Mark of the Licensor and the good will connected
therewith. This Agreement is not intended to create a franchise, and the
Licensee is not relying on any relationship, as such.
10. NO REPRESENTATIONS: Licensee acknowledges that Licensor has made no
representations to Licensee with regard to the profitability of the Restaurant,
the market therefor or the operations thereof.
Licensor acknowledges that Licensee had made no representations to
Licensor with regard to the profitability of the Restaurant, the market therefor
or the operations thereof.
11. EXCLUSIVITY: The Licensee's rights shall be exclusive to the City
of Las Vegas, Nevada.
12. TERM: This Agreement shall be effective on the date hereof and
shall end on the termination of the Lease, as such may be renewed or extended,
unless this Agreement is otherwise terminated in accordance with the terms
hereof. The term of this Agreement, for purposes of the license fee, shall be
governed by the provisions of Paragraph 2 above.
-13-
<PAGE>
<PAGE>
13. ASSIGNABILITY: This Agreement is not assignable by Licensee, except
with the written consent of Licensor, which shall not be unreasonably withheld.
Any attempted assignment without such consent shall be void and constitute a
default hereunder. Notwithstanding the foregoing, Licensee shall be able to
assign its rights and obligations hereunder, without the consent of Licensor, in
connection with the sale of all or substantially all of the assets or stock of
Ark Restaurant Corp. Nothing herein shall preclude the transfer of Licensor's
rights hereunder.
14. ENFORCEMENT OF SERVICE MARK:
A. Licensee and Licensor shall promptly notify each other of any
suspected infringement of their respective interests in and to the Service Mark
by any third party. In the event that any legal action against any third party
is deemed necessary by either Licensee or Licensor for the protection of their
respective interests in and to the Service Mark, Licensee and Licensor shall
cooperate with each other and render all reasonably necessary assistance in
connection with any such legal action; provided, however, that neither party
shall settle any such action without the prior written consent of the other,
which shall not be unreasonably withheld. Within thirty (30) days after notice
from Licensee of a suspected infringement, Licensor shall advise Licensee of
whether or not Licensor shall prosecute a suit for infringement. If Licensor
elects to prosecute such a suit, Licensor may select legal counsel and shall
bear all legal fees and other costs and expenses incurred in connection
therewith. Any monies recovered after such costs and expenses are reimbursed,
shall be shared fifty (50%) percent by Licensor and fifty
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<PAGE>
(50%) percent by Licensee. If Licensor chooses not to prosecute any such suit
for infringement, then Licensee may do so after notice to Licensor; and Licensee
may select legal counsel and shall bear all legal fees and other costs and
expenses incurred in connection therewith. Any monies recovered after such costs
and expenses are reimbursed, shall be shared fifty percent (50%) by Licensor and
fifty percent (50%) by Licensee.
B. Licensor hereby agrees to be solely responsible for, to defend
and indemnify Licensee, its officers, agents and employees and to hold each of
them harmless from any claims, demands, causes of action or damages, including
reasonable attorney's fees (collectively the "Costs"), arising out of an action
against Licensee contesting the right of Licensee to use the Service Mark. In
the event such claim is asserted against the Licensee, the Licensee shall notify
the Licensor of such claim, and the Licensor shall immediately thereafter bear
all the Costs. The provisions of this paragraph shall survive the termination of
this Agreement.
15. INDEMNIFICATION: Licensee hereby agrees to be solely responsible
for, to defend and indemnify Licensor, its officers, agents and employees, and
to hold each of them harmless from any claims, demands, causes of action or
damages, including reasonable attorneys' fees, arising out of the operation of
the Restaurant.
Licensee will obtain and keep in full force and effect the following
(the "Policies"):
A. a policy of commercial general liability on an occurrence basis
with a
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<PAGE>
combined single limit with respect to each occurrence in an amount of $1,000,000
for bodily injury or death to persons; and
B. a Liquor Liability insurance policy in an amount of $1,000,000
for bodily injury or death to persons
The Licensor shall be named as an additional insured on the Policies.
16. NOTICE: Any and all notices required or permitted to be given or
made pursuant to any of the provisions of this Agreement shall be deemed to have
been duly given or made for all purposes if sent by mail, postage prepaid, or by
recognized overnight delivery service, or by telephone facsimile, in any case
addressed as follows:
If to Licensee, at:
c/o Ark Restaurants Corp.
Attention: Michael Weinstein
85 Fifth Avenue, 14th Floor
New York, New York 10003
Telecopy: (212) 206-8814
With copy to:
Shack & Siegel, P.C.
Attention: Donald D. Shack, Esq.
530 Fifth Avenue
New York, New York 10036
Telecopy: (212) 730-1964
If to Licensor, at:
United Brody Corp.
Attention: Jerome Brody
Leggett Road
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<PAGE>
<PAGE>
Ghent, New York 12075
Telecopy:
With a copy to:
Rapport, Meyers, Whitbeck, Shaw & Rodenhausen
Attention: Carmi Rapport, Esq.
436 Union Street
Hudson, New York 12534
Telecopy: (518) 828-9719
or at such other address as any party may specify by notice given to the other
party in accordance with this paragraph. The date of giving of any such notice
shall be the third business day after mailing if sent by certified mail and the
date of first receipt if sent by any other permitted method.
17. CONSTRUCTION: This Agreement and the terms hereof shall be
construed in accordance with the laws of the State of New York and, subject to
the provisions of Paragraph 21 below, venue for all actions in a court of
competent jurisdiction shall lie in New York, New York and for federal
litigation, in the Southern District of the State of New York.
18. ENTIRE AGREEMENT, MODIFICATION: No statements, representations,
variations, either written or oral from whatever source arising, except as
stated in this Agreement, shall have any legal validity between the parties or
be binding upon any of them. The parties acknowledge that this Agreement
contains the entire understanding and agreement of the parties. No modifications
hereof shall be effective unless made in writing and computed by the parties
hereto with the same formalities as this Agreement is executed.
-17-
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<PAGE>
19. NON-WAIVER: The failure of the Licensor to exercise any right,
power or option given to it hereunder or to insist upon strict compliance with
the terms hereof by the Licensee shall not constitute a waiver of the terms and
conditions of this Agreement with respect to any other or subsequent breach
thereof, nor a waiver by the Licensor of its rights at any time thereafter to
require exact and strict compliance with all of the terms hereof. The rights and
remedies hereunder are cumulative to any other rights or remedies which may be
granted by law.
20. SEVERABILITY: Should any word, phrase or provisions hereof be
declared illegal or invalid by a court of competent jurisdiction, such
declaration of illegality and/or invalidity shall not affect the remainder
hereof.
21. ARBITRATION: Except as otherwise specifically provided in this
agreement, any controversy or claim arising out of or relating to this
Agreement, of the breach thereof, shall be settled by arbitration in the City
and County of New York, in accordance with the commercial arbitration rules of
the American Arbitration Association, and any judgment upon the award may be
entered in any court having competent jurisdiction thereof. The arbitrator shall
be entitled to award any relief which may be available at law or in equity,
including, without limitation, issuing a preliminary or permanent injunction.
-18-
<PAGE>
<PAGE>
22. HEADINGS: The headings or captions associated with paragraphs of
this Agreement are for convenience and reference only and do not form a part
hereof, and do not in any way modify, interpret or construe the intent of the
parties or affect any of the provisions of this Agreement.
LICENSEE: LICENSOR:
ARK STEAKHOUSE CORP. UNITED BRODY CORP.
By___________________________ By____________________________
Robert Towers, Vice President Jerome Brody, President
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<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
---------- -------------
<S> <C>
Columbus Cafe Corp. New York
SSWB Restaurants, Inc. New York
MEB Emporium Corp. New York
MEB On Columbus Inc. New York
MEB Dining 18, Inc. New York
MEB On First, Inc. New York
Conis Realty Corp. New York
Conis Restaurant Corp. New York
Ernie's Hackensack, Inc. New Jersey
Four Gentlemen From Verona, Inc. New Jersey
La Femme Noire, Inc. New York
Ark 27th Street, Inc. New York
Ark Seventh Avenue South Corp. New York
Ark Rio Corp. New York
Ark Operating Corp. New York
Ark Sub-One Corp. New York
Ark 474 Corp. New York
Ark Twenty-Ninth Street Corp. New York
Ark Boston Corp. Massachusetts
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
---------- -------------
<S> <C>
Ark Union Station, Inc. District of Columbia
Ark D.C. Kiosk, Inc. District of Columbia
Ark Potomac Corporation District of Columbia
Washington Parties & Events Related Industries, Inc. District of Columbia
Aroc and Ark Corporation New York
Ark Bryant Park Corp. New York
Ark of the Seaport, Inc. New York
Ark Parties, Inc. New York
Tysons America Corp. Virginia
Ark JC Corp. Florida
Ark Oxnard Corp. California
Ark JMR Corp. New York
Ark Fifth Avenue Corp. New York
Ark Islamorada Corp. Florida
KRA Holdings, Inc. New York
La Femme Noire D.C. Incorporated District of Columbia
Ark Cafeteria Corp. New Jersey
Ark Steakhouse Corp. Nevada
</TABLE>
<PAGE>
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Form S-8 Registration Statement
No. 33-48217 and Registration Statement No. 33-85724 of Ark Restaurants Corp.
of our report dated November 30, 1995 (except for Note 13, as to
which the date is December 28, 1995), appearing in this Annual Report on
Form 10-K of Ark Restaurants Corp. for the year ended September 30, 1995.
New York, New York
December 28, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated balance sheet of Ark Restaurants Corp. and its subsidiaries as of
September 30, 1995, and the related consolidated statement of operations, and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> $1,271,284
<SECURITIES> 0
<RECEIVABLES> 1,273,827
<ALLOWANCES> 0
<INVENTORY> 888,344
<CURRENT-ASSETS> 5,484,300
<PP&E> 26,923,993
<DEPRECIATION> 10,548,687
<TOTAL-ASSETS> 28,541,920
<CURRENT-LIABILITIES> 5,443,304
<BONDS> 5,148,189
<COMMON> 45,364
0
0
<OTHER-SE> 16,660,937
<TOTAL-LIABILITY-AND-EQUITY> 16,706,301
<SALES> 73,026,907
<TOTAL-REVENUES> 73,026,907
<CGS> 20,024,944
<TOTAL-COSTS> 48,743,331
<OTHER-EXPENSES> 4,582,329
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 359,159
<INCOME-PRETAX> 1,898,557
<INCOME-TAX> 777,431
<INCOME-CONTINUING> 1,121,126
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,121,126
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0
<PAGE>
