AMENDMENT TO DEVELOPMENT AGREEMENT
AND FRANCHISE AGREEMENT[S]
THIS AMENDMENT TO DEVELOPMENT AGREEMENT AND FRANCHISE AGREEMENT[S]
("Amendment") is made and entered into effective as of the ______ day of
___________, 2000, by and between XXXXXXXX'X INTERNATIONAL, INC., a Delaware
corporation ("Franchisor"), _________________________, a _________________
corporation ("Developer" or "Franchisee") and _______________________
(individually, "Principal Shareholder", and collectively, "Principal
Shareholders"):
WITNESSETH:
WHEREAS, Franchisor franchises the Xxxxxxxx'x Neighborhood Grill & Bar
restaurant system (the "System"); and
WHEREAS, Franchisor and Developer have entered into the Development
Agreement listed on Schedule 1 (as amended from time to time, the "Development
Agreement") and the Franchise Agreement[s] listed on Schedule 1 (as amended from
time to time, collectively, the "Franchise Agreements" and, individually a
"Franchise Agreement"), relating to the development and operation of certain
Xxxxxxxx'x Neighborhood Grill & Bar restaurants (the "Restaurants"); and
WHEREAS, pursuant to said Development Agreement and Franchise Agreement[s],
Developer has opened for operation or commenced construction on a Restaurant at
each of the locations identified on Schedule 1; and
WHEREAS, the parties desire to amend the Development Agreement and
Franchise Agreement[s] as herein set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Notwithstanding anything to the contrary contained in Section 1.1 or
Section 9.1 of the Development Agreement, the term of the Development
Agreement shall be extended to expire twenty (20) years from the date
hereof, unless sooner terminated as permitted pursuant to the terms of this
Amendment or the Development Agreement.
2. Section 2.1 of the Development Agreement is hereby amended by deleting
the same as it now appears and inserting the following in its place and
stead:
A2.1. Developer shall develop the number of Restaurants franchised by
Franchisor in the Territory during the period commencing on November 1,
1999 and expiring October 31, 2004, in accordance with the schedule
outlined on Appendix A.2 hereof ("Initial Development Period").
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3. The Appendix A.2, attached hereto as Exhibit A [and Exhibit B] shall be
deemed attached to and incorporated by reference into the Development
Agreement, the same as if originally attached thereto as the Initial
Development Period schedule.
4. The provisions of Section 2.3 of the Development Agreement shall remain in
effect.
5. Section 3.1 of the Development Agreement is hereby amended by deleting the
same as it now appears and inserting the following in its place and stead:
3.1 During the period commencing on November 1, 2004 and expiring January
1, 2020, Developer shall develop and open for business in the
Territory, in accordance with the parameters established under
Subsection 3.2, that number of additional Restaurants as is required
to achieve at the end of such period, a total number of Restaurants
open for business within the Territory which, after including the
Restaurants currently open and operating for business within the
Territory, will equal the Minimum Development Potential of the
Territory (as defined herein below)."
6. Section 3.2 of the Development Agreement is hereby amended by deleting the
same as it now appears and inserting the following in its place and stead:
3.2 (a) Each consecutive two (2) year period, commencing with the period
beginning on November 1, 2004, is hereafter referred to as a
"Subsequent Development Period."
(b) On or before the commencement of each Subsequent Development Period,
Franchisor shall provide to Developer an updated Appendix A.2 showing
the number of Restaurants to be developed by Developer during such
Subsequent Development Period ("Subsequent Development Schedule"),
together with a detailed summary of the Minimum Development Potential
calculations used to determine the Subsequent Development Schedule.
The minimum development potential ("Minimum Development Potential")
shall be determined as follows:
(i) Each A.D.I. comprising all or a portion of the Territory shall be
placed into one of four market categories ("Market Categories"),
identified as either a "Small Market", defined as those A.D.I.s
containing less than 135,000 households in metropolitan counties
within the Territory with incomes greater than $25,000 ("Income
Qualified Metro Household"); a "Medium Market", defined as those
A.D.I.s with containing 135,000 to 399,999 Income Qualified Metro
Households; a "Large Market", defined as those A.D.I.s containing
400,000 to 1,399,999 Income Qualified Metro Households; or a "Mega
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Market", defined as those A.D.I.s containing 1,400,000 or more Income
Qualified Metro Households (Small Market, Medium Market, Large Market
or Mega Market may also be referred to herein individually as an
"A.D.I. Market" or collectively as "A.D.I. Markets"). The parties
understand and agree that the income level set forth above may, but
need not, be adjusted upward or downward by Franchisor once every five
(5) years in order to reflect changes in household income, such
adjustments to be determined by reference to the United States Census
Bureau's Median Household Income Index or if such index no longer
exists at the time it is to be used, then the index employed shall be
such other generally known index used by NPD Crest or such other
similar company then used by Franchisor.
(ii) Each county within an A.D.I. Market shall be classified as a
"Metropolitan County", those counties with a total population greater
than 50,000; a "Small Town County", those counties with a total
population of 20,000 to 50,000; or an "Other County", those counties
with a total population less than 20,000 (Metropolitan County, Small
Town County and Other County may be for description purposes also
referred to herein as a "County Type").
(iii)Each A.D.I. Market shall at that time be assigned to one of four
development groups according to the level of development penetration
which Developer has achieved in the A.D.I. Market as compared to the
level of development penetration achieved by all domestic development
in the System. The four development groups will be determined by
ranking each A.D.I. in the System within each of the Market Categories
from most developed to least developed. The A.D.I.s, in ranking order
from most developed to least developed, shall then be divided into
four substantially equal development groups: "Opportunistic Group",
"Second Group", "Third Group" and "Lower Limit Group". The average
number of Restaurants per Income Qualified Metro Household developed
by the top three territories in the System of the Second Group in each
A.D.I. Market category shall be the development target for each such
A.D.I. Market category ("Penetration Target").
(iv) The total number of Restaurants to be developed by Developer in each
Metropolitan County of an A.D. I. Market shall be equal to the number
of Income Qualified Metro Households in such A.D.I. Market divided by
the Penetration Target ("Metropolitan Development Potential"). The
Metropolitan Development Potential minus the number of Restaurants in
each Metropolitan County then open and operating in said A.D.I. Market
shall be the number of Restaurants in each Metropolitan County then
available for development in the A.D.I. Market ("Metropolitan
Development Balance"). Until such time as Franchisor releases other
prototypes for use in Small Town or other Counties, as hereinafter
more fully described, the Metropolitan Development Balance shall be
the Developer's "Minimum Development Potential" for the Territory.
(v) The Minimum Development Potential shall be the maximum number of
Restaurants Franchisor may include on the Subsequent Development
Schedule and thus require Developer to develop in the A.D.I. Market
during the next Subsequent Development Period; subject, however, to
the minimum and maximum development criteria outlined in paragraph (c)
and (d) of this Subsection 3.2. In the event, however, a particular
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A.D.I. Market is in the Opportunistic Group, Developer and Franchisor
shall negotiate in good faith a mutually agreeable Subsequent
Development Schedule; provided, however, said Subsequent Development
Schedule shall not reflect a number of Restaurants less than the
remaining undeveloped portion of the Metropolitan Development
Potential, nor shall the Developer be required (without its consent)
to develop more than the remaining undeveloped portion of the
Metropolitan Development Potential."
7. Section 3.2 of the Development Agreement is hereby amended by inserting
immediately after paragraph (b), the following:
(c) During each Subsequent Development Period that Developer has less than
ten (10) Restaurants open and operating in the Territory, Developer
shall be required to develop no more than one (1) Restaurant each
calendar year that the number of Restaurants in Developer's Territory
does not meet or exceed the Minimum Development Potential of the
Territory. During each Subsequent Development Period that Developer
has ten (10) or more Restaurants in the Territory, Developer shall be
required to develop no more than two (2) Restaurants each calendar
year that the number of Restaurants in the Territory does not meet or
exceed the Minimum Development Potential for the Territory.
(d) Notwithstanding the Minimum development Potential for which Developer
might otherwise be obligated in order to satisfy the Penetration
Target for the Territory, Developer shall not be required to develop
more than ten (10) Restaurants in any one calendar year in the
Territory. In the event Developer holds other development agreements
with the System or the Principal Shareholders of Developer are the
identical Principal Shareholders of other entities who hold other
development agreement[s] within the System (such other entities being
defined hereunder as "Affiliates"), Developer, together with such
Affiliates, may limit their combined development under all such
development agreements to no more than ten (10) Restaurants in the
aggregate in any calendar year. Provided however, Developer and
Principal Shareholder[s] hereby acknowledge that if Developer
exercises its option under this provision to limit its combined
development with its Affiliates and after so limiting its development,
Developer (together with its Affiliate) does not achieve such
aggregate development, Developer shall be in default under that
development agreement(or all such development agreements as the case
may be) but only such development agreement(s) which did not meet the
individual Subsequent Development Schedule calculated and agreed to
for that individual development agreement."
8. The provisions of Section 3.3 shall remain in effect.
9. Notwithstanding the foregoing and in additional thereto, Franchisor shall
further divide and place those counties identified as Small Town Counties
and Other Counties on a separate list, attached hereto as Appendix A-3. It
is understood that the matters set forth in paragraphs 2-6 of this
Amendment are intended for the development of the Metropolitan Counties in
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the A.D.I. Market and that this paragraph 7 is intended to (and shall)
provide for the development of all other counties (i.e., Small Town
Counties and Other Counties) in the A.D.I. Market ).
(a) At such time as Franchisor makes available to the franchise system as
a whole a small town Restaurant prototype or a revised method of
operation or both for use in smaller populated, less dense markets
("STC Release"), Franchisor shall request Developer to commit to
develop and open for operation pursuant to a pre-determined
development schedule the number of Restaurants utilizing the STC
Release and in the specified counties set forth on the written request
tendered to Developer by Franchisor (the "STC Notice"). The counties
so specified will be a portion of those shown on Appendix A-3. The STC
Notice provided Developer will further reflect the proposed
development schedule for all such STC Releases. Within 30 days of
Developer's receipt of such STC Notice, Developer shall indicate in
writing whether it desires to develop a STC Release in all or a
portion of the counties listed. Thereafter, the development schedule
suggested in the STC Notice will be adjusted by the Franchisor, using
the same pace of development as set forth in paragraph 7 above. With
respect to this process, the Franchisor and Developer will review the
development feasibility of each county listed in the STC Notice,
giving appropriate consideration to such factors as liquor license
availability, proximity to existing Restaurants, the presence or
absence of competitive concepts and other such matters as Franchisor
deems appropriate. Any counties removed from the purview of the STC
Notice by such negotiations will be returned to the pool of unused
counties shown on the Appendix A-3 list for possible future
development. At or before the conclusion of the 30 day notice period,
unless otherwise extended in writing, Developer shall:
(i) Signify its agreement to develop in accordance with the STC Release in
all of the listed counties and in accordance with the proposed
development schedule included with the revised STC Notice and as a
result, Developer's exclusive right to develop Restaurants in the
Territory as previously granted remains unaffected;
(ii) Signify its agreement to develop a STC Release in a portion of the
listed counties, and in such event, Developer shall no longer have the
exclusive right to develop Restaurants in the counties in which it
chose not to develop the STC Release and will be subject to the terms
set forth in subparagraph (c) below; or
(iii)Reject the development of a STC Release in all of the STC Notice
listed counties, and in such an event, Developer shall no longer have
the exclusive right to develop Restaurants in the counties listed in
the final STC Notice and will be subject to the terms of subparagraph
(c) below; or
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(iv) Seek mediation of the inclusion of one or more of the counties in the
STC Notice with the National Franchise Mediation Board in accordance
with Section 9(b); or
(v) Fail to respond in writing to the STC Notice, in which event the
Developer will no longer have the exclusive right to develop
Restaurants in the counties set forth in the STC Notice and will be
subject to the terms of subparagraph (c) below.
(b) In the event the Developer contests the STC Notice as referenced in
subparagraph 9(a)(iv) above, such disagreement shall be submitted for
mediation to a board to be formed that shall be known as the National
Franchise Mediation Board (the "NFMB"), which shall be comprised of
two (2) individuals appointed by Franchisor, two (2) individuals
appointed by the Franchise Business Council and one (1) individual
chosen by the foregoing four (4) individuals, in accordance with the
following:
(i) Developer will deposit with Franchisor at the time of the filing of
its written demand for mediation an amount equal to $35,000 times the
number of counties about which Developer is contesting development.
Notwithstanding the foregoing, in no event shall less than $35,000 be
so deposited. If the deposit is not so timely made, then in such an
event, the Developer shall be deemed to have waived its right to
request mediation and further, deemed to have elected alternative (v)
as set forth in subparagraph 9(a) above.
(ii) The NFMB will determine in its sole discretion the procedure, time
limits and additional filing and responses required with respect to
the mediation. However, it is understood and agreed by all parties
that the mediation is intended to provide a more expeditious
resolution of the matter submitted to the NFMB.
(iii) The mediation decision to be rendered by the NFMB will be
binding upon all parties to the mediation.
(iv) The party for whom a favorable decision is rendered shall receive from
the other party reimbursement for all out of pocket costs and
expenses, including attorneys fees, incurred with respect to the
mediation which are determined to be reasonable by the NFMB.
(v) At the conclusion of the mediation, the NFMB shall issue its decision
either supporting Developer and indicating that the county(ies) to
which the Developer objected shall be removed from the STC Notice (and
returned to the pool of unused county(ies) shown on the Appendix A-3
list), or conversely, supporting Franchisor and indicating that the
county(ies) about which an objection was raised should be so included
in the STC Notice and therefore a STC Release should be developed
therein.
(vi) If the decision of the NFMB supports the Developer, then in such an
event, the Developer shall maintain its exclusive right to the county
(ies) in question, and shall continue to maintain its right to develop
therein in the future. In addition, the amount of deposited by
Developer shall be refunded to Developer.
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(vii)If the decision of the NFMB supports the Franchisor then in such an
event, the Developer shall be required to construct the STC Release in
the county (ies) in question, pursuant to the development schedule
originally listed in the STC Notice. The funds previously deposited by
Developer with Franchisor shall be applied to the Franchise fee due
for each of said units at the rate of $35,000 per each unit. In the
event Developer fails to develop some or all of the STC Releases in
the county(ies) here in question, any unused deposit shall be
forfeited and further, the Developer's exclusive rights to the
county(ies) in which no development occurred shall be terminated and
not subject to any first right of refusal rights, notwithstanding
anything herein to the contrary.
(c) Except as otherwise provided in subparagraph 9(b) hereof, in the event
that the Developer, after receiving its STC Notice, falls within the
purview of subparagraphs 9(a), (ii), (iii) or (v) above, the counties
for which the Developer rejected the right to develop a STC Release,
Franchisor may in its discretion seek another franchisee to develop
the rejected counties or develop STC Releases in those counties on its
own. Upon the identification of a bonafide prospective franchisee for
those counties or upon the determination by Franchisor that it will
develop those counties, Franchisor shall provide Developer with a
written first right of refusal notice ("FROR Notice"), which FROR
Notice will set forth the counties in question and the schedule
development. Developer shall have 30 days within which to respond to
such FROR Notice in writing. Such response shall be solely to accept
or reject in whole its right of refusal. No partial acceptances will
be honored by the Franchisor. In the event the Developer fails to
respond or responds and indicates its desire not to develop the
counties listed, then Developer's exclusive right to develop such
counties shall no longer be valid and exclusivity rights previously
granted in the Development Agreement as to those counties shall be of
no further effect, and in such an event the Franchisor may grant a
third party prospective franchisee the right to develop STC Releases
in those counties or develop STC Releases itself, without regard to
the Developer. Conversely, if the Developer responds to the FROR
Notice in writing and indicates its desire to build the STC Releases
listed in compliance with the schedule set forth, and at the same time
tenders a non-refundable deposit in the amount of $35,000 for each of
the Restaurants to be developed in the counties listed in the FROR
Notice, the Developer shall have the right to develop said STC
Releases and shall further retain the exclusive right to develop
Restaurants in the counties so listed.
(d) As to the other counties unallocated under the foregoing process set
forth in subparagraph (c) and shown on Xxxxxxxx X-0, Franchisor may
issue future notices regarding development of the same STC Release for
use in some or all of the counties. Further, Franchisor may create
other new small town prototypes using the System developed for the
Restaurants, which extend the brand name but which would more likely
be adaptable to the demographics shown for some or all of the other
counties listed on the Appendix A-3 which have not been identified for
development under the preceding sentence or under subparagraph (b)
above. As each such release (which may be in one or more increments)
is developed by the Franchisor, the same procedures set forth in
subparagraphs (a) and (b) above shall apply.
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(e) Once the STC Release is released by Franchisor for use in the System
as a whole, the development and opening of a Restaurant in a county
listed on Appendix A-3 will not apply to or substitute for the
development required under paragraph 2 hereof. However, in the event
Developer fails to develop and open the Restaurants called for under
this paragraph pursuant to the schedule established by Franchisor,
such default in development shall only effect the Developer's right to
open and operate in the counties so listed. If Developer fails to open
one or more of the STC Release Restaurants in the total aggregate time
period set forth in the schedule, then in such an event, Developer
shall lose its rights to develop any STC Releases in the counties
listed in the STC Notice or the FROR Notice (as the case may be)
wherein no Restaurant is in operation and further, the exclusivity
provided by this Development Agreement shall be of no further force or
effect with respect to those counties listed in said Notice (but only
as to said affected counties) and Franchisor may grant development
rights to a third party or develop said counties itself. It is
understood that the 60 day period provided for in Section 2.3 of the
Development Agreement shall apply to all of the Restaurants to be
developed under this paragraph.
10. In the event, as a result of the matters described in paragraph 9 hereof,
or for some other reason, more than one franchisee operates in an ADI, the
provisions contained in the Manuals with respect to co-operative
marketing/advertising programs shall apply.
11. Section 4.3 of each Development Agreement described on Schedule 1 is hereby
amended by deleting the same as it now appears and inserting the following
in its place and stead:
4.3 As partial consideration for the rights granted to Developer pursuant
to the franchise agreements covering the Restaurants which Developer
develops hereunder, Developer (as franchisee under each such franchise
agreement) shall pay Franchisor a monthly royalty fee as determined by
Franchisor. Until January 1, 2020, the monthly royalty fee shall not
exceed four percent (4%) of each calendar month's gross sales (as that
term is defined in the form of franchise agreement which is attached
hereto as Appendix B). Thereafter, the monthly royalty fee shall be as
determined by Franchisor."
12. (a) Except as otherwise provided in subparagraph 12(b) hereof, Subsection
9.1(b) of each Franchise Agreement described on Schedule 1 is hereby
amended by deleting the same as it now appears and inserting the following
in its place and stead:
(b) until January 1 of the year 2020, a monthly royalty fee equal to
four percent (4%) of each calendar month's gross sales, as provided in
Subsection 4.3 of the Development Agreement, as payment for
Franchisee's continuing right to operate the Restaurant as part of the
System. Thereafter, a monthly royalty fee as determined by Franchisor."
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(b) Notwithstanding the foregoing subparagraph 12(a), if a Franchise
Agreement is listed on Schedule 1-A hereof, the 4% maximum royalty fee
shall apply only for the remaining term of the Franchise Agreement.
13. (a)Except as provided in subparagraph 13(b) below, notwithstanding anything
to the contrary contained in Section 1.2 of each Franchise Agreement
described on Schedule 1, the term of the Franchise Agreement shall be
extended to expire twenty (20) years from the date hereof, unless sooner
terminated as permitted pursuant to the terms of the respective Franchise
Agreement.
(b) Notwithstanding the foregoing subparagraph 13(a), if a Franchise
Agreement is listed on Schedule 1-A hereof, the term of said Franchise
Agreement shall not be extended; rather, said Franchise Agreement shall
retain its original term as set forth in the Franchise Agreement.
14. Notwithstanding Section 1.3 of each Franchise Agreement described on
Schedule 1but not listed on Schedule 1-A, as consideration for the
additional term realized as a result of Franchisor issuing a new Franchise
Agreement to Developer [extending the term] for each Restaurant, on the
date which each original Franchise Agreement for the respective Restaurant
would have expired, Developer shall pay Franchisor an additional franchise
fee equal to $1,750 [$700 if elects is sign new Franchise Agreement form]
multiplied by the difference between twenty (20) years and the number of
years which would have been remaining under such original franchise
agreement.
15. [Section 9.3 (a) of the Franchise Agreement shall be amended so as to
provide that a royalty shall not be due upon the sale of a gift certificate
by the Franchisee. Rather, royalty shall be due and payable upon the
redemption of the gift certificate. Section 9.3 (b) (iii) shall be modified
by deleting the same as it now appears and inserting in its place the
following:
The sale of merchandise for which a gift certificate is redeemed, if the
initial sale of the gift certificate shall have been previously included in
gross sales, . . ."
16. Section 18.3 of the Franchise Agreements listed on the attached exhibit and
those to be issued in the future shall be amended by inserting the
following subsection (c):
(c) the production, distribution and sale of products through another
restaurant or restaurants which do not utilize the System or the
Xxxxxxxx'x Neighborhood Grill & Bar service xxxx and which otherwise
compete or might compete with the Restaurant."
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17. (a) If the Developer has timely developed and opened for operation the
Restaurants called for by Appendix A.2 and thereafter during a Subsequent
Development Period objects to the development of the last Restaurant
required during that Subsequent Development Period under Article 3 of the
Development Agreement, then, Franchisor hereby grants Developer the right
to make a written demand for a study as to whether said last Restaurant may
be located in the Territory or whether said Restaurant will at that time
cannibalize the sales and traffic with respect to its other existing
Restaurants in the Territory. In the event a written request for such a
study is received by Franchisor prior to the end of the subsequent
Development Period in question and prior to any default under the
Development Agreement, then, in such an event, Franchisor and Developer
shall in good faith attempt to resolve the issue regarding whether the last
Restaurant should or should not be developed and opened. If an agreement
cannot be reached (which process may include the Franchisor and Developer
ordering a PIN study at Developer's cost) Franchisor and Developer shall
submit the disagreement to the NFMB for handling and disposition. The
submission of said disagreement will be in accordance with subparagraph
17(b) hereof.
(b) The following shall apply to the submission to the NFMB pursuant to
the preceding paragraph:
(i) The disagreement shall be submitted by the Developer by way of a
written demand for mediation tendered to Franchisor within thirty (30)
days after the Franchisor has indicated to the Developer that an
agreement cannot be reached. Developer will deposit $35,000 with
Franchisor at the time of the filing of its written demand for
mediation. If the demand or the deposit or either or both of them are
not so timely made, then in such an event, the Developer shall be
deemed to have waived its right to request mediation and further,
shall be deemed to have elected to accept the full number of
Restaurants Franchisor had determined for the Subsequent Development
Period then in question.
(ii) The NFMB will determine in its sole discretion the procedure, time
limits and additional filing and responses required with respect to
the mediation. However, it is understood and agreed by all parties
that the mediation is intended to provide a more expeditious
resolution of the matter submitted to the NFMB.
(iii)The mediation decision to be rendered by the NFMB will be binding
upon all parties to the mediation.
(iv) The party for whom a favorable decision is rendered shall receive from
the other party reimbursement for all out of pocket costs and
expenses, including attorneys fees incurred and any PIN study
conducted with respect to the mediation which are determined to be
reasonable by the NFMB.
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(v) At the conclusion of the mediation, the NFMB shall issue its decision
either supporting Developer and indicating that the last Restaurant
need not be developed as a part of the Subsequent Development Period
in question, or conversely, supporting Franchisor and indicating that
the last Restaurant should be a part of the development for that
Subsequent Development Period.
(vi) If the decision of the NFMB supports the Developer, then in such an
event, the Developer shall maintain its exclusive rights to the
Territory, and shall continue to maintain its right to develop therein
in the future. Provided, however, Franchisor may request further
development during future Subsequent Development Periods. In addition
Franchisor shall reimburse Developer the $35,000 previously deposited
at the commencement of the mediation process.
(vii)If the decision of the NFMB supports the Franchisor then in such an
event, the Devleoper shall be required to construct and open the last
Restaurant, pursuant to the development schedule originally listed as
a part of the Subsequent Development Period so in question. In
addition, the funds previously deposited by Developer with Franchisor
shall be applied to the Franchise fee due for such Restaurant.
However, in the event Developer fails to develop the Restaurant, the
$35,000 shall be forfeited and shall become the exclusive property of
Franchisor and further, the exclusive development rights granted by
the Development Agreement shall terminate and be of no further force
and effect.
(c) If after a new developer has been appointed to open the last
Restaurant, and said Restaurant has opened for operation, and within
the first twelve (12) months of operation of said Restaurant,
Developer believes that said new developer's Restaurant has had a
significant cannibalization effect upon one or more of Developer's
Restaurants, then, in such in event, the Developer may avail itself of
the following post impact process ("Post Impact Process"). The Post
Impact Process will consist of the submission of the positions of the
Developer, new developer and Franchisor to the NFMB for study and
mediation. The Post Impact Process is and shall be from time to time
more fully outlined in the Manuals. The NFMB shall have the right to
issue a non-binding determination as to whether or not the Developer's
Restaurant or Restaurants (as the case may be) were, in fact
significantly cannibalized as contended by Developer and if so
determined, a recommendation on whether any and what type of royalty
relief or other relief, if any, should be granted Developer. The
parties agree to exhaust the foregoing remedies and seek the mediation
provided by the NFMB prior to submitting the matter to any judicial
tribunal.
18. Developer and Principal Shareholder[s] hereby acknowledge and agree that
each of them, jointly and severally, shall remain liable to Franchisor
including, if appropriate, interest thereon, for any royalties, franchise
fees, advertising fees and other charges and expenses as determined by
Franchisor to be incurred by and due from Developer prior to the date
hereof.
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19. Developer and Principal Shareholder[s] hereby warrant and represent to
Franchisor that:
(a) Developer is a [corporation] duly organized and validly existing under
the laws of the State of [_______________] and is in good standing
under the laws of all other states or jurisdictions where the conduct
of its business requires such qualifications; Developer has all
requisite [corporate] power and authority to own all of its assets and
carry on its business as now conducted.
(b) The execution and delivery of this Amendment and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by the [Board of Directors] of Developer and by all other
necessary [corporate] action. This Amendment has been duly executed
and validly delivered by Developer and the Principal Shareholder[s]
and constitutes a legally binding agreement on them.
(c) The execution, delivery and performance of this Amendment and the
consummation of the obligations contemplated hereby do not and will
not (i) conflict with the organizational documents of Developer or
(ii) result in any breach of any of the provisions of, or constitute a
default under, any contract, agreement, commitment, indenture,
mortgage, note, security interest, bond, license, pledge, encumbrance,
lien, claim, charge, right, option, or other instrument or obligations
to which Developer or the Principal Shareholder[s] or any of them
individually is now a party or by which any of them may be bound or
affected; or (iii) violate any law, statute, ordinance, rule, or
regulation of any administrative agency or governmental body, or any
order, writ, injunction, judgment or decree of any court,
administrative agency, or governmental body, or any decision or
finding of any arbitration panel to which Developer or the Principal
Shareholder[s] is subject.
(d) There is no suit, action, or legal, administrative, arbitration, or
other proceeding or governmental investigation pending, or to the
knowledge of Developer or Principal Shareholder[s] threatened, against
Developer or affecting the System or the operation of the Restaurants
to which either Developer or the Principal Shareholder[s] is a party.
(e) Developer and Principal Shareholder[s] are otherwise in compliance
with their obligations, covenants and agreements as set forth in the
Development Agreement and any Franchise Agreement executed as of the
date hereof.
20. Except as otherwise expressly set forth in this Amendment, the Development
Agreement[s] and any addendum or amendment thereto made and entered prior
to the date hereof shall remain in full force and effect, Developer and
Principal Shareholders hereby reaffirming and readopting said instruments,
the same as if they were fully set forth herein.
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21. Except as otherwise expressly set forth in this Amendment, the Franchise
Agreement[s] and any addendum or amendment thereto made and entered prior
to the date hereof shall remain in full force and effect, Developer and
Principal Shareholders hereby reaffirming and readopting said instruments,
the same as if they were fully set forth herein.
22. Developer and Principal Shareholder[s], jointly and severally, represent
and warrant to Franchisor that with respect to the terms of this Amendment,
they have sought and have been represented by independent legal counsel.
Said legal counsel has fully and completely explained to Developer and
Principal Shareholders the terms and conditions of this Amendment.
Accordingly, Developer and Principal Shareholders hereby acknowledge that
they enter this Amendment to Development Agreement with a full
understanding of the terms and conditions contained herein.
23. This Amendment to Development Agreement and the documents and instruments
referred to herein constitute the entire agreement between the parties,
superseding and canceling any and all prior and contemporaneous agreements,
understandings, representations, inducements and statements, oral or
written, of the parties in connection with the subject matter hereof.
24. Except as expressly set forth herein or in the documents or instruments
herein referred to, no further amendment or modification of this Amendment
to Development Agreement shall be binding unless executed in writing by the
parties hereto or their authorized successors or assigns.
25. If any part of this Amendment shall for any reason be declared invalid,
unenforceable or impaired in any way, the validity of the remaining
portions shall remain in full force and effect as if this Amendment had
been executed with such invalid portion eliminated, and it is hereby
declared the intention of the parties that they would have executed the
remaining portion of this Amendment without including therein any such
portions which might be declared invalid.
26. This Amendment shall be binding upon and shall inure to the benefit of the
parties hereto, their successors and assigns and shall be construed in
accordance with and governed by the laws of the state of Kansas [Missouri],
except as to any "choice of law" provision or rule thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers the day and year first above
written.
FRANCHISOR:
WITNESS: XXXXXXXX'X INTERNATIONAL, INC.
____________________________ By: ______________________________
Xxxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxxx
Secretary Executive Vice President
of Strategic Development
DEVELOPER:
---------
WITNESS: [__________________________]
By: _______________________________
Name: ________________________ Name: ____________________________
Title: _________________________ Title: _____________________________
PRINCIPAL SHAREHOLDERS:
----------------------
Witness
---------------------------- [---------------------------- ]
Witness
---------------------------- [---------------------------- ]
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SCHEDULE 1
[developer name]
DOCUMENT * LOCATION DATE
Development Agreement ____________ ADI
_________________ ADI
_________________ ADI
Franchise Agreement [Restaurant address]
Franchise Agreement [Restaurant address]
* Each document specified includes the original document plus all amendments or
addendums thereto.
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EXHIBIT A
APPENDIX A.2
to Development Agreement for the following Territory:
[list applicable A.D.I.'s]
METRO. SMALL COUNTY
DEV. DEV. OPEN AND
ADI POTENTIAL POTENTIAL OPERATING BY
---------------------------- ---------------- ---------------- -----------------
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SCHEDULE 1-A
[developer name]
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