LICENSE AGREEMENT
EXHIBIT
99.2
THIS
LICENSE AGREEMENT (the “Agreement”)
is
made as of February 28, 2006 (the “Effective
Date”)
by and
between:
|
·
|
NF
Treachers Corp., a Delaware corporation having its principal place
of
business at 0000 Xxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (“Licensor”);
and
|
|
·
|
XXX
Franchise Systems, Inc., a Delaware corporation having its principal
place
of business at 00 Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(“Licensee”).
|
RECITALS:
WHEREAS,
on the same date as this Agreement is signed, Licensor and Licensee have entered
into an agreement captioned the “Asset Purchase Agreement” (the “APA”)
under
which Licensee has sold, and Licensor has purchased, the IP Assets (defined
below), on the terms and conditions set forth in the APA;
WHEREAS,
the “IP
Assets”
that
were sold to Licensor under the APA consist of, among other things, all of
the
intellectual property that is in any way associated with the “Xxxxxx Xxxxxxxx’x”
brand, concept and franchise system, worldwide, which includes but is not
limited to the “Xxxxxx Xxxxxxxx’x” name, trademarks, service marks, copyrights,
patents, trade secrets, the rights under the Treacher Letter Agreement (defined
below), and all other intellectual property whatsoever associated with the
“Xxxxxx Xxxxxxxx’x” fish and chips concept, whether or not exploited in the past
by Licensee or its predecessors, all as set forth in the APA;
WHEREAS,
before the parties’ entry into the APA, Licensee operated, and licensed, the
Xxxxxx
Xxxxxxxx’x
restaurant system to those System franchisees specified in Attachment A to
this Agreement (the “XXX
Direct Unit Franchisees”);
WHEREAS,
before the parties’ entry into the APA, Licensee, on the one hand, and Nathan’s
Famous Systems, Inc. (“NFSI”),
NF
Roasters Corp. (“NFR”),
and
Miami Subs USA, Inc. (“MSUSA”)
(all
affiliates of Licensor), on the other hand, were parties to a co-branding
development agreement dated The letter agreement dated January 1, 2003, as
amended February 4, 2003 (the “Co-Branding
Agreement”)
pursuant to which Licensee and one of NFSI, NFR, and/or MSUSA entered into
separate participation agreements (the “Participation
Agreements”)
to
permit certain franchisees of NFSI, NFR, and MSUSA (as well as those entities’
company-owned restaurants) operating NF Concept Restaurants the right to also
operate under the Xxxxxx
Xxxxxxxx’x
name and
to also sell Xxxxxx
Xxxxxxxx’x products
in their franchised NF Concept Restaurants (such NF Concept Restaurants in
existence as of the date hereof being referred to herein as the “Co-Branded
Units”);
WHEREAS,
Licensor and Licensee have agreed that as part of the overall arrangement
involving the transaction in which the parties agreed to the terms of the APA,
Licensor would license back to Licensee the rights granted under this Agreement,
which include, among other things, the right to sublicense and use certain
of
the IP Assets in connection with Licensee’s continued and uninterrupted
management and operation of the XXX Direct Franchises and Licensee's maintenance
and expansion of that system within the PFSI Market, all on the terms set forth
herein; and
Page
1
WHEREAS,
Licensee and Licensor wish to enter into this Agreement, which will confer
upon
Licensee the rights set forth herein;
NOW,
THEREFORE, in consideration of the mutual undertakings and commitments set
forth
herein, and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties agree as follows:
1. GRANT
1.1. Grant
and Acceptance.
Subject
to the other terms of this Agreement, Licensor grants to Licensee the right
to
use the Proprietary Marks and System (defined below) solely for the purpose
of operating and authorizing third parties to operate Restaurants which
are: (a) within the PFSI Market; and (b) in Non-Captive Market
Locations and Shopping Malls. Licensee accepts this grant of rights and agrees
that it shall use the Proprietary Marks and System only on the terms of this
Agreement. The grant of rights under this Section 1.1 shall also apply to the
XXX Direct Unit Franchisees under the terms specified below in Section
1.8.1.
1.2. Fees.
Licensee shall not be required to pay any fees, royalties, or make any other
payments to Licensor for the rights granted under this Agreement and/or the
exercise of those rights by Licensee’s Unit Franchisees.
1.3. Limited
Exclusivity.
The
grant of rights to use the Proprietary Marks and System, solely for the specific
purposes described in Section 1.1 above, shall be exclusive during the term
of
this Agreement subject to the other terms of this Agreement (including but
not
limited to Sections 1.4, 1.5 and 1.6 below).
1.4. Development
Schedule/Reversion of Sub-markets.
If
Licensee does not satisfy the Development Schedule for one or more of the
Sub-markets comprising the Secondary PFSI Market, then for any such Sub-market
as to which the Development Schedule has not been met, the rights granted to
Licensee for such Sub-market shall revert to Licensor, such Sub-market shall
no
longer form part of the PFSI Market, and thereafter, Licensor shall have the
sole right to operate and authorize other parties to operate Restaurants in
that
Sub-market. Nothing in this Section 1.4, however, shall negate, affect, or
otherwise impact upon any rights already granted to a Unit Franchisee operating
within the affected Sub-market by Licensee.
1.5. Shopping
Malls.
If
Licensor has the opportunity to operate or authorize a third party to operate
a
Restaurant in a Shopping Mall within the PFSI Market, Licensor shall notify
Licensee of the same. If, at the time of such notice, Licensee does not: (a)
actually have a Restaurant already operating within such Shopping Mall (either
as a company-owned or operated Restaurant or a Restaurant operated by a Unit
Franchisee); or (b) have definitive plans to develop a Restaurant within such
Shopping Mall; then Licensor shall be free to avail itself of such opportunity
without liability or obligation to Licensee or its Unit Franchisees. (For the
avoidance of any doubt, in no event will Licensee be considered to have
“definitive plans” to develop a Restaurant within a particular Shopping Mall
unless, at a minimum, Licensee has either: (a) begun and maintained ongoing
bona fide negotiations with the landlord of said Shopping Mall (or a Unit
Franchisee has done so); or (b) already submitted in writing to Licensor,
for Licensor’s approval pursuant to Section 3 below, a specific location within
such Shopping Mall and such information as Licensor may reasonably require
concerning the prospective Unit Franchisee for such Shopping Mall location.)
However, in exercising its rights under this Section 1.5, Licensor shall not
knowingly infringe upon any XXX Direct Unit Franchisee's Protected
Rights.
Page
2
1.6. Reservation
of Rights.
All
rights not expressly granted to Licensee under this Agreement are hereby
reserved to Licensor. For the avoidance of any doubt, Licensee acknowledges
that
such reserved rights include, without limitation, each of the following and
that
Licensor is free to exercise the same without liability or obligation to
Licensee and/or its Unit Franchisees;
however, in exercising its rights under this Section 1.6, Licensor shall not
knowingly infringe upon any XXX Direct Unit Franchisee's Protected
Rights:
1.6.1. Licensor
hereby reserves for itself and its designees the right to use the Proprietary
Marks and System to operate NF Concept Restaurants containing co-branded
Xxxxxx
Xxxxxxxx’x
operations anywhere within the PFSI Market (such co-branded operations to be
included in a manner and extent substantially similar to which NFSI and MSUSA
have, prior to the date hereof, included Xxxxxx
Xxxxxxxx’x menu-line
extensions in the Co-Branded Units);
1.6.2. Licensor
hereby reserves for itself and its designees the right to operate Restaurants
in
Shopping Malls located within the PFSI Market in accordance with the provisions
of Section 1.5 above;
1.6.3. Licensor
hereby reserves for itself and its designees the exclusive right to use the
Proprietary Marks and System for the purpose of operating Restaurants within
Captive Market Locations in the PFSI Market;
1.6.4. Licensor
hereby reserves for itself and its designees the exclusive right to use the
Proprietary Marks and System for the purpose of selling and distributing Retail
Products in the PFSI Market;
1.6.5. Licensor
hereby reserves for itself and its designees the exclusive right to use the
Proprietary Marks and System for the purpose of selling and distributing Branded
Food Service Products in the PFSI Market (provided that such sales shall be
made
to operators of Non-Traditional Restaurants);
1.6.6. Licensor
hereby reserves for itself and its designees the exclusive right to solicit
large institutional foodservice operators with operations that are national
in
scope, and whose operations encompass both the PFSI Market and other markets
(including but not limited to companies such as Aramark, HMS Host, Sodexho,
Compass Group, Delaware North, and BAA);
1.6.7. Licensor
hereby reserves for itself and its designees the exclusive right to use (or
to
decide not to use) the Proprietary Marks and/or System anywhere outside of
the
PFSI Market; and
1.6.8. In
no
event shall Licensor and/or its affiliates, nor shall any of their respective
designees, be prevented from operating and/or authorizing third parties to
operate restaurants under systems other than the System and/or using trademarks
other than the Proprietary Marks (including but not limited to the NF Concept
Restaurants), which restaurants may offer or sell products that are the same
as,
similar to, those offered from Restaurants operated under the System.
Conversely, nothing in this Agreement shall be construed to prevent Licensee
and/or its affiliates, nor shall any of their respective designees, from
operating and/or authorizing third parties to operate restaurants under systems
other than the System and/or using trademarks other than the Proprietary Marks
(including but not limited to Pudgie’s Chicken, Wall Street Deli, and
Burritoville), which restaurants may offer or sell products that are the same
as, similar to, those offered from Restaurants operated under the
System.
Page
3
1.7. Restrictions
on Licensee.
In
addition to any other provisions in this Agreement, Licensee agrees
that:
1.7.1. It
shall
neither solicit any party or transaction, nor exercise or attempt to exercise,
any right that is reserved to Licensor under this Agreement;
1.7.2. It
shall
not engage in the sale of Products other than through Restaurants;
1.7.3. It
shall
not use, nor shall it license to any other party the right to use, the
Proprietary Marks and/or System (except that Licensee may license the
Proprietary Marks to a Unit Franchisee that is operating a Restaurant solely
for
the purpose of operating the Restaurant, at the location set forth in the
Franchise Agreement, and under the terms and conditions of the Franchise
Agreement); and
1.7.4. It
shall
not use, nor license to any other party the right to use, the Proprietary Marks
and/or System for the purpose of operating a co-branded restaurant featuring
the
Proprietary Marks and/or System and another concept's trademarks and
system.
1.8. XXX
Direct Unit Franchisees and Co-Branded Units.
1.8.1. XXX
Direct Unit Franchisees.
During
the term of this Agreement, except as otherwise provided herein, Licensor shall
not preclude the continued operation of, and use of the Proprietary Marks and
System by, the XXX Direct Unit Franchisees that are still in operation as of
the
Effective Date (nor shall Licensor preclude Licensee from allowing Direct XXX
Unit Franchisees to renew their Franchise Agreements to the extent such
Franchise Agreements allow for such renewal rights). Notwithstanding the
foregoing or anything to the contrary contained herein, Licensee agrees that
it
will not, without first obtaining Licensor’s written consent, amend, extend or
otherwise alter any Franchise Agreement concerning any XXX Direct Unit
Franchisee which is located outside the PFSI Market or located in a Captive
Market Location within the PFSI Market (and Licensee will immediately notify
Licensor in the event that any such Franchise Agreement expires or is terminated
for any reason). Furthermore, Licensee represents and warrants to Licensor
that
Licensee has not granted any Protected Rights other than as expressly noted
and
described in the column marked “Radius Restriction” in Attachment A to this
Agreement.
1.8.2. Co-Branded
Units.
1.8.2.1. The
Co-Branding Agreement is terminated upon the Effective Date, and Licensee shall
have no further rights thereunder, nor any right or entitlement to (and neither
Licensor, NFSI, MSUSA or any of their respective franchisees shall have further
obligation to pay) any fees, royalties, rebates or other consideration in
connection with the Co-Branded Units (except as otherwise provided in Section
4.3 below).
Page
4
1.8.2.2. Licensee
hereby assigns to Licensor all of its future right, title, and interest in
and
to all of the Participation Agreements. In connection with such assignment,
Licensor assumes all of Licensee’s obligations arising under the Participation
Agreements from and after the Effective Date (it being expressly understood
that
Licensee shall remain solely responsible for all of such obligations arising
prior to the Effective Date and that it shall indemnify and hold Licensor
harmless in connection with same). The parties agree that they will sign, and
that Licensor will cause its affiliates to sign, the Letter Agreement in the
form specified in Attachment C to this Agreement to implement this
clause.
1.9. Definitions.
The
following terms shall have the following meanings as used in this
Agreement:
1.9.1. “Branded
Food Service Products”
means
products sold: (a) under and/or in conjunction with the Proprietary Marks;
(b)
at a food service location by a food service operator that is not a Unit
Franchisee or a franchisee or licensee of Licensor’s; (c) in a fully cooked or
prepared state for on-site or take-away consumption by the
customer.
1.9.2. “Captive
Market Locations”
means
locations, other than “Shopping Malls” (as defined below), where the primary
reason that patrons enter that environment is not to frequent food service
establishments, and includes, among other things: airports; book stores; bus
stations; department stores and big-box retain environments (such as Wal-Mart,
Target, and similar stores); factories; government facilities; hospitals and
other health-care facilities; military bases; recreational facilities and sports
arenas; schools, colleges and other academic facilities; seasonal facilities
(such as a state fair); supermarkets; theaters; train stations; and workplace
cafeterias.
1.9.3. “Development
Schedule”
shall
mean the schedule set out in Attachment B to this Agreement.
1.9.4. “Franchise
Agreement”
means
the form of franchise agreement that Licensee uses to grant rights to a Unit
Franchisee, subject to the provisions of Section 3 below.
1.9.5. “IP
Assets”
means
the assets that were sold to Licensor under the APA, which among other things
consist of the intellectual property that is in any way associated with the
“Xxxxxx Xxxxxxxx’x” brand, concept and franchise system, worldwide, which
includes but is not limited to the “Xxxxxx Xxxxxxxx’x” name, trademarks, service
marks, copyrights, patents, trade secrets, the rights under the Treacher Letter
Agreement (defined below), and all other intellectual property whatsoever
associated with the “Xxxxxx Xxxxxxxx’x” fish and chips concept, whether or not
exploited in the past by Licensee or its predecessors.
1.9.6. “Manuals”
means
the operating manuals for the System, which have been transferred to Licensor
pursuant to the APA, and which Licensor shall have the right to revise as it
deems fit from time to time.
Page
5
1.9.7. “NF
Concept Restaurant(s)”
means
a
restaurant concept owned, operated, and/or licensed by Licensor and/or its
affiliates, including but not limited to restaurants that are part of the
Nathan’s
Famous, Xxxxx Xxxxxx Roasters,
and/or
Miami
Subs systems.
1.9.8. “Non-Captive
Market Locations”
means
traditional, street-level free-standing and in-line restaurant locations that:
(a) are not contained within larger retail or other foot traffic generating
environments; and (b) are not co-branded with other retail food service
concepts.
1.9.9. “Non-Traditional
Restaurants”
include, but are not limited to, those operating at military bases, hotels,
high
school and college campuses, airports, train stations, travel plazas, toll
roads, beaches, parks and other seasonal facilities, government buildings and
establishments, prisons, hospitals, convenience stores, cafeterias, snack bars,
trucks, casinos, sports or entertainment venues or stadiums, and retail
restaurant locations being sublet under a lease to a master concessionaire,
whether currently existing or constructed or established subsequent to the
date
hereof.
1.9.10. “Northern
New York State”
means
all of the counties in the State of New York except for the following counties:
Nassau, Suffolk, Queens, Kings, Richmond, New York, Bronx, Westchester,
Rockland, Orange, Putnam, Sullivan, Ulster, Dutchess, Delaware, Xxxxxx, and
Columbia.
1.9.11. “PFSI
Market”
means
the Principal PFSI Market and the Secondary PFSI Market, taken together (subject
to the provisions of Sections 1.4, 1.5, and 1.6 above).
1.9.12. “Principal
PFSI Market”
means
the States of Indiana, Michigan, and Ohio, and the Commonwealth of
Pennsylvania.
1.9.13. “Product(s)”
means
any proprietary item that is produced according to confidential methods,
recipes, and/or formulas, and/or using such ingredients as are either
confidential and/or trade secrets, that belong to (or are licensed by)
Licensor.
1.9.14. “Proprietary
Marks”
means
the trade names, service marks, trademarks, logos, emblems, and indicia of
origin, including but not limited to the xxxx Xxxxxx
Xxxxxxxx’x
and such
other trade names, service marks, and trademarks as are now designated (and
may
hereinafter be designated by Licensor in writing) for use in connection with
the
System.
1.9.15. “Protected
Rights”
means
a
protected area, restricted radius, or other form of “exclusivity” that Licensee
has granted to a XXX Direct Unit Franchisee under the terms of that XXX Direct
Unit Franchisee's Franchise Agreement that are in effect before the Effective
Date, as detailed in Attachment A to this Agreement.
1.9.16. “Restaurant”
means
a
business operating in a building that bears the interior and/or exterior trade
dress typical of an Xxxxxx
Xxxxxxxx'x
restaurant, using the Proprietary Marks, and operated under the
System.
1.9.17. “Retail
Products”
means
products branded with the Proprietary Marks which are sold through a
non-Restaurant channel of distribution for off-site preparation and consumption
by the customer. (Solely by way of example, “Retail Products” shall include
products branded with the Proprietary Marks which are sold for off-site
preparation and consumption through grocery-type channels (e.g.,
supermarkets, club stores, groceries, etc.) and/or direct-to-consumer channels
(e.g., mail-order, the Internet, online, and television shopping channels,
etc.).)
Page
6
1.9.18. “Secondary
PFSI Market”
means
the area comprised of each of the Sub-markets, taken together.
1.9.19. “Shopping
Mall”
means
an enclosed shopping mall located inside the PFSI Market, which shopping mall
is
not otherwise connected to and/or part of a larger Captive Market Location.
(Solely by way of example, a shopping mall located within an airport shall
not
be considered a “Shopping Mall” for the purposes of this Agreement, but rather
such shopping mall shall be considered a “Captive Market Location” hereunder.)
1.9.20. “Sub-market(s)” means
each of the District of Columbia, the State of Maryland, Northern New York
State, and the Commonwealth of Virginia.
1.9.21. “System”
means
the format and the methods and techniques that relate to the establishment
and
operation of Restaurants and specializing in the sale of proprietary items,
which currently include fish sandwiches and meals, as well as non-proprietary
items such as beverages and related products that Licensor may periodically
designate.
1.9.22. “Transfer”
(as
applied to Licensee) shall mean any attempt to sell, assign, transfer, convey,
give away, subcontract, issue stock, sell securities, pledge, mortgage, or
otherwise encumber any direct or indirect interest in the rights granted under
this Agreement, in Licensee (including any direct or indirect interest in an
entity that is the Licensee), or in substantially all of the assets of the
Licensee (and, as applied to a Unit Franchisee, “Transfer” shall mean any
attempt to sell, assign, transfer, convey, give away, subcontract, issue stock,
sell securities, pledge, mortgage, or otherwise encumber any direct or indirect
interest in the franchise, in the Franchise Agreement, or in the Unit Franchisee
(including any direct or indirect interest in an entity that is the Unit
Franchisee), or in substantially all of the assets of the
Restaurant);
1.9.23. “Treacher
Letter Agreement”
means
the agreement dated March 14, 1972 between Xx. Xxxxxx X. Xxxxxxxx and Xx.
Xxxxxxxx Xxxxxxxxx Xxxxxxxx, and NFF Corp., as subsequently assigned by NFF
Corp., and, through various intermediate transfers, to Licensee, before
Licensee’s sale of the IP Assets to Licensor under the APA.
1.9.24. “Unit
Franchisee”
means
a
party to whom Licensee has licensed rights, pursuant to a Franchise Agreement,
to establish and operate a Restaurant. XXX Direct Unit Franchisees are included
within the definition of the term “Unit Franchisees.”
1.9.25. “Vittoria
Agreements”
means
a
Franchise Agreement entered into by and between Licensee and one of the Vittoria
Parties in the form appended to this Agreement as Attachment D for the
establishment and operation of a Restaurant in the PFSI Market.
1.9.26. “Vittoria
Party”
means
Xx. Xxxx Xxxxxxxxx, Vittoria, Inc., and/or Xxxxxxx Xxxxxxxx, Inc.
Page
7
2. TERM.
The
term of this Agreement shall start on the Effective Date and shall expire,
unless sooner terminated, one hundred (100) years from the date
hereof.
3. LICENSEE’S
OFFER AND SALE OF FRANCHISES.
Licensee
understands and acknowledges that Licensor shall have the right to review and
approve all activities in conjunction with the offer and sale of franchises,
and
changes to the terms of existing Franchise Agreements with XXX Direct Unit
Franchisees, and that Licensor shall also have the right to determine the
details and characteristics of the System. Licensee also acknowledges and agrees
that the terms and conditions set forth below also apply with respect to any
“company-owned” or “company-operated” Restaurants established by Licensee and/or
its affiliates.
3.1. New
Unit Franchisees.
Licensee shall not enter into a Franchise Agreement with a prospective Unit
Franchisee unless and until Licensee has received Licensor’s written approval of
such prospective Unit Franchisee, which shall neither be unreasonably withheld
nor unduly delayed. Before entering into any agreement with a prospective Unit
Franchisee, Licensee shall submit to Licensor a copy of the UFOC receipt signed
on behalf of such prospective Unit Franchisee, along with a unit franchise
application in the form reasonably prescribed by Licensor, which form shall
disclose, without limitation, details concerning the prospective Unit Franchisee
and its principals and the prospective Unit Franchisee’s personal and corporate
financial statements. Nothing in this Section 3.1 shall prevent Licensee from
entering into one or more Vittoria Agreements.
3.2. Proposed
Sites.
Licensee shall not approve a proposed site for the establishment and operation
of a Restaurant without Licensor’s prior written approval of said site. Licensee
agrees to submit to Licensor such information as Licensor may reasonably request
concerning the proposed site of each prospective Restaurant. Furthermore, in
no
event shall Licensee grant any prospective Unit Franchisee any protected area,
restricted radius, or other form of “exclusivity” without first obtaining
Licensor’s prior written consent.
3.3. Design.
Licensor will, from time to time, establish design, appearance and trade dress
standards for the System and Licensee will (and will cause its Unit Franchisees
to) comply with such standards in connection with their development and
operation of Restaurants hereunder; provided, however, that Licensee understands
and agrees that: (a) any such standards shall not take into account design,
architectural, zoning, and/or other legal requirements; and (b) as between
Licensor and Licensee, Licensee shall be solely responsible for compliance
with
any such design, architectural, zoning, and/or other legal requirements
pertaining to the standards. Nothing in this Section 3.3 shall require a XXX
Direct Unit Franchisee to renovate its Restaurant if Licensee does not have
the
right to require that XXX Direct Unit Franchisee to do so under the terms of
that XXX Direct Unit Franchisee's Franchise Agreement in force as of the date
of
this Agreement; however, Licensee agrees to make commercially reasonable efforts
to convince any such XXX Direct Unit Franchisees without a renovation
obligations to renovate their Restaurants at reasonable intervals in order
to
meet the then-current System standards.
3.4. Transfers.
Licensee shall not approve any proposed Transfer without Licensor’s prior
written approval therefor, which shall neither be unreasonably withheld nor
unduly delayed. Licensor’s approval may be conditioned on the receipt of such
information concerning the transaction and the proposed transferee as Licensor
may reasonably request, including, but not limited to, information that would
be
required in connection with a prospective Unit Franchisee under Section 3.1
above.
Page
8
3.5. Inspections.
Licensor shall have the right, but not the obligation, to conduct on-site visits
or inspections in carrying out it rights and obligations under this Agreement.
If Licensor exercises its rights under this Section 3.5 without providing prior
notice to Licensee and the Unit Franchisee, then Licensor agrees to advise
Licensee contemporaneously with conducting such inspections.
3.6. No
Changes to the Franchise Agreement.
Licensee shall not make any changes, amendments, or other revisions to the
form
of Franchise Agreement appended to the then-current form of UFOC prepared by
Licensee without Licensor’s prior written approval of said changes. Nothing in
this Section 3.6 shall prevent Licensee from entering into one or more Vittoria
Agreements.
3.7. The
Restaurants and the Unit Franchisees.
3.7.1. Licensee
acknowledges and agrees that every detail of the appearance and operation of
the
Restaurants is important to Licensor, Licensee, and Unit Franchisees in order
to
develop and maintain superior operating standards, to increase the demand for
services and products sold by the Restaurants, and to protect Licensor’s
reputation and goodwill.
3.7.2. In
addition to and not in place of other provisions of this Agreement, Licensee
agrees that Licensee shall fulfill all of the duties of the “Franchisor” under
each Franchise Agreement executed pursuant to this Agreement and shall use
commercially reasonable efforts to maintain compliance by each Unit Franchisee
under, and enforce, each Franchise Agreement according to the terms and
conditions thereof; and Licensee further agrees that it shall comply with the
terms of each Franchise Agreement; however, Licensee agrees that it shall not,
without Licensor’s prior written consent:
3.7.2.1. Approve
a
proposed site for any Restaurant;
3.7.2.2. Approve
the use of any supplies, fixtures, furnishings, signs, equipment, interior
or
exterior design, or methods of operation not specified in the Manuals or
otherwise approved in writing by Licensor;
3.7.2.3. Approve
or disapprove suppliers to the Restaurant;
3.7.2.4. Approve
the sale in a Restaurant of any product or service that has not previously
been
approved in writing by Licensor, or which has been disapproved by Licensor
for
sale in the Restaurants;
3.7.2.5. Permit
any Unit Franchisee to engage in any action or make any use of the Proprietary
Marks other than in compliance with the terms of Section 5.1 below (as if terms
applied to the Unit Franchisee);
3.7.2.6. Approve
any advertising or promotional materials proposed to be used, or marketing
plans
proposed to be implemented, by a Unit Franchisee; or
Page
9
3.7.2.7. Permit
(with knowledge thereof) any deviation by a Unit Franchisee from Licensor’s
standards, specifications, or procedures as set forth in the Manuals or
otherwise in writing by Licensor.
3.8. Unit
Franchise Fees.
Licensee shall be responsible for the collection of all royalties and initial
franchise fees due pursuant to each Franchise Agreement. Licensee shall not
be
obligated to pay any portion of those fees to Licensor.
3.9. Dealing
with Unit Franchisees and Prospective Unit Franchisees.
In all
dealings and contacts with Unit Franchisees and prospective Unit Franchisees,
Licensee shall do each of the following:
3.9.1. Make
no
representations that conflict with the terms and conditions of this Agreement,
the Franchise Agreement, the Manual, or other related documents. Any document
prepared by Licensee for the purpose of complying with any federal or state
law
or otherwise concerning the offer and sale of franchises, and any advertisement
proposed to be used for the purpose of promoting the sale of franchises, shall
be submitted to Licensor before such document is filed with a government
authority and/or used by Licensee.
3.9.2. Not
use
any document or material in connection with the offer or solicitation of Unit
Franchisees unless and until such proposed promotional material has been
submitted to Licensor and Licensor has given its prior written approval
thereof.
3.9.3. Carefully
screen and evaluate prospective Unit Franchisees pursuant to the standards
prescribed by Licensor, and prepare and submit to Licensor a written report
in
the form prescribed by Licensor for each prospective Unit Franchisee deemed
qualified by Licensee, including any materials which may be required under
Section 3.1 above and a site analysis prepared by Licensee concerning the
location proposed by such prospective Unit Franchisee for the establishment
of a
Restaurant.
3.10. Obligations
as to Unit Franchisees.
For
each Unit Franchisee, Licensee shall:
3.10.1. Provide
an initial training program to a principal of each Unit Franchisee and any
person hired by each Unit Franchisee for the position of Restaurant manager,
and
such other courses, seminars, and training programs for Unit Franchisees and
their employees as may be prescribed by Licensor from time to time.
3.10.2. Provide
plans and specifications for each Restaurant for the construction of the
Restaurant and for the exterior and interior design and layout, fixtures,
furnishings, equipment, and signs.
3.10.3. Review
the proposed location of each Restaurant to be established by a Unit Franchisee
(as provided in the Franchise Agreement) and provide to Licensor a written
report concerning each such proposed location.
3.10.4. Provide
advice and consultation with regard to equipping the Restaurant, grand-opening
assistance, and such periodic and continuing assistance as Unit Franchisee
may
reasonably request and as may be prescribed by Licensor.
Page
10
3.10.5. Monitor
(and submit to Licensor, at Licensor’s request, written reports on such form as
Licensor shall provide and at such time as Licensor may request) and, upon
Licensor’s request, promptly take all steps necessary to remedy the
following:
3.10.5.1. Any
apparent deficiencies and problems concerning the uniformity and quality of
service provided by the Unit Franchisee;
3.10.5.2. Any
apparent opportunities for the Unit Franchisee to improve its
performance;
3.10.5.3. Any
apparent deviations from Licensor’s operating procedures, standards, and
specifications or from proper usage of the Proprietary Marks;
3.10.5.4. Any
apparent violations of the Franchise Agreement; and
3.10.5.5. Any
apparent violations of applicable laws, rules, or regulations.
3.10.6. Supply
menu items, products, and services to Unit Franchisees as have been prescribed
by Licensor in the Manuals or otherwise.
3.11. Laws
Pertaining to Franchising and Licensing.
Licensee shall comply with any and all federal and state laws and regulations
that apply to the offer and sale of franchises as well as the relationship
between a Licensor and its franchisees, and Licensee shall timely obtain any
and
all government approvals and/or registrations necessary for the full and proper
conduct of the business contemplated hereunder.
3.11.1. Any
documents necessary to be prepared to comply with said laws (whether or not
filed with government authorities), including but not limited to the UFOC,
shall
be submitted to Licensor for Licensor’s prior written approval before Licensee
may use such documents and/or submit them to a government authority for approval
or otherwise. Licensee shall forward to Licensor copies of all such government
approvals, receipts, exemptions, and/or registrations obtained pursuant to
this
Section within ten (10) days of receipt thereof.
3.11.2. Licensee
shall have the right to require Licensee to include such information and/or
disclaimers with respect to the relationship between Licensee and Licensee
as
Licensee may reasonably require.
3.11.3. As
used
in this Agreement, the term “UFOC”
means
the Uniform Franchise Offering Circular prepared in the then-current form and
format required under the Federal Trade Commission Franchise Rule and any
applicable state franchise laws.
3.12. Sublicensing.
In its
agreements and relationship with Unit Franchisees, including but not limited
to
its licensing of the Proprietary Marks to Unit Franchisees, Licensee shall
not
take any action, tolerate or permit any action or use of Proprietary Marks,
or
otherwise include in its agreements any provision that is inconsistent with
the
provisions of this Agreement.
Page
11
4. VENDOR
RELATIONSHIPS AND REBATES.
4.1. Existing
Relationships.
Licensee and Licensor shall have separate and independent relationships with
suppliers to the System, including but not limited to any financial terms,
Rebates, and related matters; provided, that:
4.1.1. If
it
should be necessary to license the supplier’s use of the Proprietary Marks, only
Licensor shall have the right to do so;
4.1.2. Licensor
and Licensee shall cooperate with one another so that, to the extent possible,
they will seek to aggregate their respective purchases (and those of their
respective franchisees) in order to maximize volume discounts, vendor rebates,
and other beneficial treatment; and
4.1.3. Licensor
shall have the sole right to designate and/or approve the identity of all
suppliers to the System.
4.1.3.1. Licensor
may approve suppliers and producers of Products, food items, ingredients,
supplies, materials, and other products that meet its standards and requirements
including, but not limited to, standards and requirements relating to product
quality, prices, consistency, reliability, financial capability, labor and
customer relations. Licensee shall purchase (and designate for purchase in
the
portion of the System that Licensee operates and licenses to Unit Franchisees)
all Products, food items, ingredients, supplies, materials, and other products
used or offered for sale at the Restaurant solely from suppliers (including
manufacturers, producers, and other sources) who demonstrate, to the continuing
reasonable satisfaction of Licensor, the ability to meet Licensor’s then-current
standards and specifications for such items; who possess adequate quality
controls and capacity to supply Licensee’s needs promptly and reliably; whose
approval would enable the System, in Licensor’s sole opinion, to take advantage
of marketplace efficiencies; and who have been approved in writing by Licensor
prior to any purchases by Licensee from any such supplier, and have not
thereafter been disapproved (collectively, “Approved
Suppliers”).
Approval of a supplier may be conditioned on requirements relating to the
frequency of delivery, standards of service, including prompt attention to
complaints, or other criteria, and concentration of purchases, as set forth
above, and may be temporary pending a further evaluation of such supplier by
Licensor.
4.1.3.2. Licensor
shall have the right to approve a single supplier as an Approved Supplier for
any product or special equipment and may designate an Approved Supplier as
to
certain products. Licensor shall have the right to concentrate purchases with
one or more suppliers to obtain lower prices and/or the best advertising support
and/or services for any group of Restaurants franchised or operated by Licensor.
Licensor may from time to time modify the list of Approved Suppliers, and
Licensee shall not, after receipt of written notice of such modification, order
any Products or other items from any supplier which is no longer an Approved
Supplier.
4.1.3.3. If
Licensee desires to purchase any products from an unapproved supplier, Licensee
shall submit to Licensor a written request for such approval. Licensee shall
not
purchase from any supplier until, and unless, such supplier has been approved
in
writing by Licensor. Licensor shall have the right to require that its
representatives be permitted to inspect the supplier’s facilities, and that
samples from the supplier be delivered, either to Licensor or to an independent
laboratory designated by Licensor for testing. A charge not to exceed Licensor’s
actual reasonable cost of the inspection and the actual cost of the test shall
be paid by Licensee or the supplier. Licensor shall also have the right to
require that the supplier comply with such other requirements as Licensor may
deem appropriate, including payment of reasonable continuing inspection fees
and
administrative costs, or other payment to Licensor by the supplier on account
of
their dealings with Licensee and other Licensees, for use, without restriction
(unless instructed otherwise by the supplier) and for services that Licensor
may
render to such suppliers. Licensor reserves the right, at its option, to
reinspect from time to time the facilities and products of any such approved
supplier and to revoke its approval upon the supplier’s failure to continue to
meet any of Licensor’s then-current quality-control and quality-related
criteria. Nothing in the foregoing shall be construed to require Licensor to
approve any particular supplier, nor to require Licensor to make available
to
prospective suppliers, standards and specifications for formulas that Licensor
deems confidential. Licensor’s approval of any Approved Supplier is not and
shall not be a warranty on the part of Licensor as to the safety, fitness,
or
merchantability of any of the Products or other materials supplied by any
Approved Supplier.
Page
12
4.1.3.4. Licensor
may establish Licensor or affiliate owned and operated food commissaries, which
Licensor may designate as one of (or the only) Approved Supplier.
4.1.3.5. It
shall
be Licensee’s sole responsibility to arrange for distribution of Products to its
Unit Franchisees.
4.2. Relationships
with Suppliers.
Licensor shall not control the terms of Licensee’s relationships with its
vendors, and neither shall Licensee control the terms of Licensor’s
relationships with its vendors. Without limiting the foregoing, both Licensor
and Licensee agree to timely disclose to each other the terms of their
relationships with their respective vendors (including, without limitation,
product pricing and rebates or other allowances).
4.3. Rebates.
Notwithstanding Section 4.1 above, the parties agree that Licensor shall pay
Licensee fifty percent (50%) of any Rebates that Licensor receives from Vendors
for sales of the Selected Items by Vendors to Co-Branded Units during the
Initial Period. As used in this Section 4, the following terms have the
following meanings:
4.3.1. “Initial
Period”
means
the one (1) year period following the Effective Date hereof.
4.3.2. “Rebate”
means
any payment to Licensor (or a related advertising/marketing fund) from the
Vendor on account of the sale of Selected Items to a Co-Branded
Restaurant.
4.3.3. “Vendor”
means
the food item manufacturers that are manufacturing and selling the Selected
Items to the Co-Branded Units during the Initial Period.
4.3.4. “Selected
Items”
means
only the following Xxxxxx
Xxxxxxxx’x
products: (a) hush puppy mix (currently supplied by Xxxxxxxx Laboratories);
(b)
fish batter mix (currently supplied by Xxxxxxxx Laboratories); (c) frozen fish
wedges (currently supplied by Odyssey Enterprises); (d) clam strips (currently
supplied by SeaWatch International); and (e) shrimp (currently supplied by
King
& Prince Seafood Corporation).
Page
13
5. THE
PROPRIETARY MARKS.
5.1. Use
and Licensing of the Marks.
With
respect to Licensee’s use and licensing of the Proprietary Marks, in addition to
the other provisions of this Agreement, Licensee agrees that:
5.1.1. Licensee
shall use only the Proprietary Marks designated by Licensor, and shall use
them
only in the manner authorized and permitted by Licensor.
5.1.2. Licensee
shall use the Proprietary Marks only for the operation of the Restaurants and
only at the locations authorized under the Franchise Agreements, or in
Licensor-approved advertising for the businesses conducted at or from those
locations.
5.1.3. Unless
otherwise authorized or required by Licensor, Licensee shall operate and
advertise the Restaurant only under the names “XXXXXX XXXXXXXX’X”, or “XXXXXX
XXXXXXXX’X FISH AND CHIPS”, without prefix or suffix.
5.1.4. During
the term of this Agreement, Licensee and its Unit Franchisees shall identify
themselves (in a manner reasonably acceptable to Licensor) as the owner of
the
Restaurants in conjunction with any use of the Proprietary Marks, including,
but
not limited to, uses on invoices, order forms, receipts, and contracts, as
well
as the display of a notice in such content and form and at such conspicuous
locations on the premises of the Restaurants as Licensor may designate in
writing.
5.1.5. Licensee’s
right to use the Proprietary Marks is limited to such uses as are authorized
under this Agreement, and any unauthorized use thereof shall constitute an
infringement of Licensor’s rights.
5.1.6. Licensee
shall not use the Proprietary Marks to incur any obligation or indebtedness
on
behalf of Licensor.
5.1.7. Licensee
shall not use any of the Proprietary Marks as part of its corporate or other
legal name, or as part of any e-mail address, domain name, or other
identification of Licensee in any electronic medium.
5.1.8. Licensee
shall execute any documents deemed necessary by Licensor or its counsel to
obtain protection for the Proprietary Marks or to maintain their continued
validity and enforceability.
5.1.8.1. Licensee
shall promptly notify Licensor of any suspected infringement of the Proprietary
Marks, any challenge to the validity of the Proprietary Marks, or any challenge
to Licensor’s ownership of, or Licensee’s right to use, the Proprietary Marks
licensed hereunder. Licensee acknowledges that Licensor shall have the sole
right to initiate, direct, and control any administrative proceeding or
litigation involving the Proprietary Marks, including any settlement thereof.
Licensor shall also have the sole right, but not the obligation, to take action
against uses by others that may constitute infringement of the Proprietary
Marks.
Page
14
5.1.8.2. Provided
that Licensee has used the Proprietary Marks in accordance with this Agreement,
Licensor shall defend Licensee at Licensor’s expense against any third party
claim, suit, or demand involving the Proprietary Marks arising out of Licensee’s
use thereof. Licensor shall have the sole right to determine whether Licensee
has or has not used the Proprietary Marks in accordance with this Agreement,
and
if Licensor determines that Licensee’s use of the Proprietary Marks is not in
accordance with this Agreement, then Licensor shall defend Licensee, at
Licensee’s expense (which Licensee agrees to pay promptly upon demand from
Licensor), against such third party claims, suits, or demands.
5.1.8.3. If
Licensor undertakes the defense or prosecution of any litigation relating to
the
Proprietary Marks, Licensee shall execute any and all documents and do such
acts
and things as may, in the opinion of counsel for Licensor, be necessary to
carry
out such defense or prosecution, including, but not limited to, becoming a
nominal party to any legal action. Except to the extent that such litigation
is
the result of Licensee’s use of the Proprietary Marks in a manner inconsistent
with the terms of this Agreement, Licensor agrees to reimburse Licensee for
its
out of pocket costs in doing such acts and things, except that Licensee shall
bear the salary costs of its employees, and Licensor shall bear the costs of
any
judgment or settlement.
5.2. Acknowledgements.
Licensee expressly understands and acknowledges that:
5.2.1. Licensor
is the owner of all right, title and interest in and to the Proprietary Marks
and the goodwill associated with and symbolized by them.
5.2.2. The
Proprietary Marks are valid and serve to identify the System and those who
are
authorized to operate under the System.
5.2.3. Licensee
shall not directly or indirectly contest the validity or Licensor’s ownership of
the Proprietary Marks, nor shall Licensee, directly or indirectly, seek to
or
assist any person in registering the Proprietary Marks with any government
agency except with Licensor’s express prior written consent.
5.2.4. Licensee’s
use and sublicensing of the Proprietary Marks does not give Licensee or any
other party any ownership interest or other interest in or to the Proprietary
Marks, except the license granted by this Agreement.
5.2.5. Any
and
all goodwill arising from Licensee’s use (and/or that of its Unit Franchisees)
of the Proprietary Marks shall inure solely and exclusively to Licensor’s
benefit, and upon expiration or termination of this Agreement and the license
herein granted, no monetary amount shall be assigned as attributable to any
goodwill associated with Licensee’s use and sublicensing (and/or Unit
Franchisees’ use) of the System or the Proprietary Marks.
5.2.6. The
right
and license of the Proprietary Marks granted to Licensee under this Agreement
is
non-exclusive, and Licensor thus has and retains the rights, among
others:
5.2.6.1. To
use
the Proprietary Marks itself in connection with selling products and
services;
Page
15
5.2.6.2. To
grant
other licenses for the Proprietary Marks, in addition to those licenses that
have already been granted;
5.2.6.3. To
develop and establish other systems using the same or similar Proprietary Marks,
or any other proprietary marks, and to grant licenses or franchises thereto
without providing any rights therein to Licensee.
5.2.7. The
provisions of Section 5.2.6 above are not meant to, and shall neither be
interpreted nor construed to, diminish any of Licensee’s rights under Section
1.1 or 1.3 above.
5.3. Substitution.
Licensor reserves the right to substitute different Proprietary Marks for use
in
identifying the System and the businesses operating thereunder if Licensor’s
currently owned Proprietary Marks no longer can be used, or if Licensor
determines that substitution of different Proprietary Marks will be beneficial
to the System. Nothing in this Section 5.3 shall require a XXX Direct Unit
Franchisee to change its Proprietary Marks if Licensee does not have such right
under the terms of that XXX Direct Unit Franchisee's Franchise Agreement in
force as of the date of this Agreement; however, Licensee agrees to make
commercially reasonable efforts to convince any such XXX Direct Unit Franchisees
to update, refresh, or otherwise change its Proprietary Marks at reasonable
intervals in order to meet the then-current System standards.
6. ADVERTISING.
6.1. General.
All
advertising and promotion by Licensee (and/or any Unit Franchisees) shall be
in
such media, and of such type and format as Licensor may approve; shall be
conducted in a dignified manner; and, shall conform to such standards and
requirements as Licensor may specify. Licensee shall not use, permit, or fail
to
disapprove any of its Unit Franchisees’ use of any advertising or promotional
plans or materials unless and until Licensee has received written approval
from
Licensor as provided in Section 6.2 below. Without limiting the generality
of
the foregoing, Licensee specifically agrees it shall not engage in (nor shall
Licensee permit any other party and/or fail to disapprove any of its Unit
Franchisees’) advertising, marketing and/or other promotional activity that is
not: (a) in accordance with the terms of this Agreement; (b) inside
the PFSI Market; and/or (c) relating specifically to a XXX Direct
Franchisee.
6.2. Approval.
For all
proposed advertising and promotional plans intended to be used by Licensee
and/or by a Unit Franchisee, Licensee shall submit samples of such materials
and
details of such plans to Licensor’s Advertising Designee for Licensor’s prior
written approval. If written approval is not received by Licensee from Licensor
within seven (7) days of the date of receipt by Licensor of such samples or
materials, Licensor shall be deemed to have approved them.
6.2.1. For
the
purpose of this Section 6.2, the term “Advertising Designee” shall mean: (a) Xx.
Xxxxx Xxxxxx at Licensor’s offices; or (b) such other individual that
Licensor may designate in writing to Licensee with at least ten (10) days prior
written notice.
6.2.2. If
Licensor has not disapproved of proposed advertising samples or materials within
the seven-day period noted above, and such proposed advertising samples or
materials are therefore deemed “approved” under the terms set forth above,
Licensor shall nonetheless have the right thereafter to notify Licensee that
the
proposed advertising samples or materials are disapproved; and if Licensor
does
so, Licensor shall compensate Licensee and/or the Unit Franchisees for the
cost
of replacing advertising samples or materials in reasonable quantities that
were
produced in reliance on any such implied approval.
Page
16
6.2.3. Once
proposed advertising samples or materials have been submitted to Licensor for
review and either expressly approved or impliedly approved, said advertising
samples or materials need not be resubmitted to Licensor.
6.2.4. Upon
submission to Licensor, the proposed advertising and any copyrights in the
proposed advertising shall become the property of Licensor, and Licensee agrees
to sign and, where so requested, cause to be signed, such documents as may
be
necessary in order to implement this provision.
6.3. Materials.
Licensor shall make available to Licensee from time to time, at Licensee’s
expense, advertising plans and promotional materials, including newspaper mats,
coupons, merchandising materials, sales aids, point-of-purchase materials,
special promotions, direct mail materials, community relations programs, and
similar advertising and promotional materials. To the extent that these items
are sold by Licensor, Licensor shall make them available to Licensee and the
Unit Franchisees on the same terms as are generally available to Licensor’s
franchisees (however, this clause shall not be deemed to constitute a most
favored nations clause).
6.4. Websites.
6.4.1. Licensee
specifically acknowledges and agrees not to operate a Consumer Website (as
defined below).
6.4.2. Licensee
shall have the right to operate a Franchise Website (as defined below); provided
that Licensee has obtained Licensor’s prior written approval of the content of
said Franchise Website and the domain name or other electronic address at which
said Franchise Website is operated. Licensor hereby grants its approval to
Licensee’s use of the domain name <xxx.xxxxxxxx.xxx> for a Franchise
Website.
6.4.3. Definitions.
6.4.3.1. “Consumer
Website”
shall
mean a Website at which consumers can obtain information about Licensee, the
Unit Franchisees, and the Restaurants operated by Unit Franchisees.
6.4.3.2. “Franchise
Website”
shall
mean a Website at which a person seeking information about entering into a
Franchise Agreement with Licensee for operation of a Restaurant in the PFSI
Market is able to seek information and make an application to become a
franchisee.
6.4.3.3. “Website”
means
an interactive electronic document, contained in a network of computers or
other
electronic devices, linked by communications software or other technology.
The
term Website includes, but is not limited to, Internet, intranet, extranet,
e-mail, and World Wide Web home pages.)
Page
17
7. CONFIDENTIAL
INFORMATION
7.1. Each
party understands and agrees that during the term of this Agreement it may
be
furnished with or otherwise have access to non-public information that the
other
party considers to be of a confidential, proprietary, or trade secret nature,
including but not limited to business and marketing plans, as well as other
know-how of the Licensor, whether in tangible or intangible form, and whether
or
not stored, compiled or memorialized physically, electronically, graphically,
photographically, or in writing (collectively, the “Confidential
Information”).
The
receiving party agrees to secure and protect the other party’s Confidential
Information in a manner consistent with the maintenance of the other party’s
rights therein, using at least as great a degree of care as the receiving party
uses to maintain the confidentiality of its own confidential information of
a
similar nature or importance, but in no event using less than reasonable
efforts. Neither party will sell, transfer, publish, disclose, or otherwise
use
or make available any portion of the Confidential Information of the other
party
to third parties, except to those of its directors, officers, employees or
attorneys who clearly have a need-to-know the same, in furtherance of the
specific purposes of this Agreement and as expressly authorized in this
Agreement. All such disclosures shall be subject to all of the terms and
conditions of this Agreement, and the party making such disclosures to such
directors, officers, employees and/or attorneys shall be fully responsible
for
ensuring the compliance of all such parties with the terms and conditions of
this Agreement. Nothing in this Agreement shall be deemed to obligate either
party to disclose any Confidential Information to the other, or to accept any
Confidential Information from the other.
7.2. The
parties acknowledge that any failure to comply with the requirements of this
Section 7 will cause the non-defaulting party irreparable injury, and the
each party agrees to pay all court costs and reasonable attorneys’ fees incurred
by the prevailing party in obtaining specific performance of, or an injunction
against violation of, the requirements of this Section 7.
8. INSURANCE
AND INDEMNIFICATION.
8.1. Licensee’s
Indemnity.
Licensee agrees that it shall defend, indemnify, hold harmless the Nathan’s
Parties against any and all Claims, as well as all of the costs, including
but
not limited to attorneys’ fees, of defending against them.
8.1.1. “Claims”
means
all claims, lawsuits, actions, losses, obligations and damages directly or
indirectly arising out of the operation of Licensee’s business conducted
pursuant to this Agreement, whether or not caused by Licensee’s negligent or
willful action or failure to act. Claims includes, but are not limited to,
matters that arise directly or indirectly from, as a result of, or otherwise
in
connection with Licensee’s failure to comply with the terms of this Agreement,
Licensee’s offer and sale of franchises, Licensee’s contact with and
relationship to prospective Xxxx Xxxxxxxxxxx, Xxxx Xxxxxxxxxxx, prospective
transferees, and suppliers to the System, Licensee’s conduct under the Franchise
Agreements, Licensee’s ownership and/or operation of any Restaurants, Licensee’s
contact with and relationship to franchisees operating Co-Branded Units (with
respect to events that took place on or before the Effective Date), and
Licensee’s compliance with applicable laws.
Page
18
8.1.2. “Nathan’s
Parties”
means
Licensor, its corporate parents and affiliates, and their respective past,
present, and future officers, directors, employees, franchisees, and
agents.
8.2. Licensor’s
Indemnity.
Licensor agrees that it shall defend, indemnify, hold harmless the Licensee
Parties against any and all Assertions as well as all of the costs, including
but not limited to attorneys’ fees, of defending against them.
8.2.1. “Assertions”
means
all claims, lawsuits, actions, losses, obligations and damages directly or
indirectly arising out of the operation of Licensor’s business conducted
pursuant to this Agreement, whether or not caused by Licensor’s negligent or
willful action or failure to act. Assertions include, but are not limited to,
matters that arise directly or indirectly from, as a result of, or otherwise
in
connection with Licensor’s failure to comply with the terms of this Agreement,
Licensor’s offer and sale of franchises, Licensor’s contact with and
relationship to its own prospective franchisees (not Unit Franchisees or
prospective Unit Franchisees), and suppliers to the System, Licensor’s conduct
under the franchise agreements with its own franchisees, Licensor’s ownership
and/or operation of any Restaurants, Licensor’s contact with and relationship to
franchisees operating Co-Branded Units (with respect to events that took place
after the Effective Date), and Licensor’s compliance with applicable
laws.
8.2.2. “Licensee
Parties”
means
Licensee, its corporate parents and affiliates, and their respective past,
present, and future officers, directors, employees, franchisees, and
agents.
8.3. Insurance.
Licensee shall maintain such insurance policies (containing such limits and
other terms) as is customary and prudent for a restaurant system franchisor
to
maintain in the marketplace. Additionally, Licensee shall maintain such other
insurance policies (containing such limits and other terms) as Licensor may
deem
advisable. If requested by Licensor, all such policies shall name Licensor
and
its affiliates as additional insureds.
9. TRANSFER
OF INTEREST.
9.1. Transfer
by Licensor:
Licensor shall have the right to Transfer all or any part of its rights or
obligations herein to any person or legal entity.
9.2. Transfer
by Licensee.
Licensee understands and acknowledges that the rights and duties set forth
in
this Agreement are personal to Licensee, and that Licensor has granted the
rights hereunder in reliance on the business skill, financial capacity, and
personal character of Licensee or the owners of Licensee. Accordingly, neither
Licensee nor any immediate or remote successor to any part of Licensee’s
interest in this franchise, nor any individual, partnership, corporation, or
other legal entity which directly or indirectly owns any interest in this
franchise shall make a Transfer without Licensor’s prior written consent (which
consent shall not be unreasonably withheld). Any purported assignment or
Transfer, by operation of law or otherwise, not having the written consent
of
Licensor shall be null and void and shall constitute a material breach of this
Agreement, for which Licensor may terminate this Agreement and all rights
hereunder without opportunity to cure pursuant to Section 10
below.
Page
19
9.3. Offer
of Securities by Licensee:
All
materials required for any offer or sale of securities of Licensee (or any
entity that owns or is affiliated with Licensee) by federal or state law shall
be submitted to Licensor for review, reasonable approval, and consent, prior
to
their being filed with any government agency; and any materials to be used
in
any exempt offering shall be submitted to Licensor for review, approval, and
consent prior to their use. No such offering shall imply (by use of the
Proprietary Marks or otherwise) that Licensor is participating as an
underwriter, issuer, or offeror of Licensee’s or Licensor’s securities; and
Licensor’s review of any offering shall be limited solely to the subject of the
relationship between Licensee and Licensor. Licensee and the other participants
in the offering shall fully indemnify Licensor in connection with the offering.
For each proposed offering, Licensee shall reimburse Licensor for Licensor’s
costs (including, but not limited to, legal and accounting fees) in an amount
of
at least Seven Thousand Five Hundred Dollars ($7,500) associated with reviewing
the proposed documents and offering. In addition, Licensee shall submit to
Licensor an opinion of Licensee’s legal counsel (which shall be addressed to
Licensor and in a form acceptable to Licensor) that the offering documents
properly use the Proprietary Marks and accurately describe Licensee’s
relationship with Licensor. Licensee shall give Licensor written notice at
least
thirty (30) days prior to the date of commencement of any offering or other
transaction covered by this Section 9.3.
9.4. Special
Provisions Relating to Existing Pledges.
Licensee has advised Licensor that as of the date of this Agreement, Licensee
already has in place arrangements with lenders as detailed below in Section
9.4.2 (the “Pledges”).
9.4.1. Licensor
agrees not to object to said Pledges on the following terms and with the
following understandings, which Licensee acknowledges and to which Licensee
agrees: (a) Licensor’s agreement not to object to the Pledges is on the
basis of Licensor’s understanding that all aspects of the Pledge that apply to
the IP Assets, the Proprietary Marks, and the System have been released and
that
neither Pledge shall hereafter apply to said assets transferred to Licensor
under the APA; and (b) Licensor’s agreement not to object to the Pledges
shall in no way prevent or in any way restrict Licensor from exercising any
of
its rights under this Agreement (including but not limited to its rights under
Sections 9.1-9.3 above) if a party holding a Pledge should foreclose upon and
assume the position of Licensee under this Agreement.
9.4.2. The
Pledges are:
9.4.2.1. A
first
position security interest granted to Xxxxxx Bridge Loan Co., Inc. for a term
loan agreement; and
9.4.2.2. A
second
position security interest granted to Xxxxx Xxxxxxx for a term loan
agreement.
10. DEFAULT
AND TERMINATION.
10.1. Automatic.
Licensee shall be deemed to be in default under this Agreement, and all rights
granted herein shall automatically terminate without notice to Licensee, if
Licensee enters into liquidation (whether compulsory or voluntarily), or makes
any arrangement or composition with its creditors or has a receiver appointed
in
respect of all or any part of its assets, or takes any similar action in
consequence of debt.
Page
20
10.2. With
Notice.
Licensee shall be deemed to be in default and Licensor may, at its option,
terminate this Agreement and all rights granted hereunder, without affording
Licensee any opportunity to cure the default, effective immediately upon receipt
of notice by Licensee, upon the occurrence of any of the following
events:
10.2.1. If
Licensee at any time violates the territorial restrictions contained herein
by
operating or authorizing any third party to operate a Restaurant outside of
the
PFSI Market or in a Captive Market Location within the PFSI Market;
10.2.2. If
any
transfer is made without Licensor’s prior written consent, contrary to the terms
of Section 9 above;
10.2.3. If
Licensee, after curing a material default pursuant to Section 10.3 below,
commits the same material default again within twelve (12) months, whether
or
not cured after notice; and
10.2.4. If,
under
Section 10.3 hereof, Licensee is repeatedly in default for failure to comply
substantially with any of the material requirements imposed by this Agreement,
whether or not cured after notice. For the purpose of this Section 10.2.4,
“repeatedly” shall mean three or more times in one year.
10.3. With
Notice and Opportunity to Cure.
Except
as provided in Sections 10.1 and 10.2 above, Licensor may terminate this
Agreement only by giving written notice of termination stating the nature of
such default to Licensee at least thirty (30) days prior to the effective date
of termination. Licensee may avoid termination by immediately initiating a
remedy to cure such default and curing it to Licensor’s reasonable satisfaction
within the thirty-day period and by promptly providing proof thereof to
Licensor. If any such default is not cured within the specified time, this
Agreement shall terminate without further notice to Licensee, effective
immediately upon the expiration of the specified time period. Licensee shall
be
in default hereunder for any failure to comply with any of the requirements
imposed by this Agreement, or any failure to carry out the terms of this
Agreement in good faith.
10.4. -No
Rights or Remedies are Exclusive.
No
right or remedy herein conferred upon or reserved to Licensor is exclusive
of
any other right or remedy provided or permitted by law.
11. OBLIGATIONS
UPON TERMINATION OR EXPIRATION
Upon
termination or expiration of this Agreement, all of the rights granted to
Licensee under this Agreement shall immediately terminate and:
11.1. The
Franchise Agreements.
Licensor shall have the right, but not the obligation, to either assume
Licensee’s rights under some or all of the Franchise Agreements then in effect
with regard to the Restaurants operated pursuant to such Franchise Agreements,
or terminate such Franchise Agreements, pursuant to the terms thereof. If
Licensor chooses, in its sole discretion, to exercise its right to assume
Licensee’s rights under any Franchise Agreement pursuant to this Section 11.1,
Licensee shall: (a) in no way be relieved of its obligations under such
Franchise Agreements, including, without limitation, amounts owed to or
obligations assumed on behalf of the Unit Franchisees; and (b) execute and
deliver to Licensor such documents as Licensor may request in order to implement
this Section 11.1. Unless (and only to the extent that) Licensor assumes
Licensee’s obligations under one or more of the Franchise Agreements, Licensor
shall have no obligation or responsibility to any of the Unit
Franchisees.
Page
21
11.2. Cessation
of Operations.
Licensee shall immediately cease to operate any company-owned Restaurants,
and
shall immediately cease to solicit or provide service to Unit Franchisees,
and
shall not at any time thereafter, directly or indirectly, represent to the
public or hold itself out as a present or former franchisee, developer,
Licensee, or any other relation to Licensor, the Proprietary Marks, the System,
and/or the Products.
11.3. Activities
with Respect to Unit Franchisees.
Licensee: (a) shall immediately cease to solicit prospective Unit
Franchisees and have contact with existing Unit Franchisees; (b) shall not
enter into any Franchise Agreements with new Unit Franchisees nor any amendments
to Unit Franchisee Agreements with then-existing Unit Franchisees; and
(c) shall not exercise any right or perform any obligation under the
Franchise Agreements except with Licensor’s express prior written consent in
each such instance.
11.4. Cease
Use of Intellectual Property.
Licensee shall immediately and permanently cease to use, in any manner
whatsoever:
11.4.1. Any
trade
secrets, confidential methods, procedures, and techniques associated with the
System;
11.4.2. The
Proprietary Marks and all other proprietary marks and distinctive forms,
slogans, signs, symbols, and devices associated with the System, including,
without limitation:
11.4.2.1. All
signs, advertising materials, displays, stationery, forms, and any other
articles which display or make any reference to the Proprietary Marks;
and
11.4.2.2. Any
and
all references whatsoever to Licensor, the Proprietary Marks, any other xxxx
owned by Licensor, the System, and/or Licensee’s status as a former
Licensee.
11.5. Premises.
Licensee shall make such modifications or alterations to the premises of each
company-owned Restaurant (including, without limitation, the changing of the
telephone numbers) immediately upon the termination or expiration of this
Agreement as may be necessary to distinguish the appearance of the premises
from
that of restaurants under the System, and shall make such specific additional
changes thereto as Licensor may reasonably request for that
purpose.
11.6. No
Use
of Marks in Other Businesses.
Licensee agrees, if it continues to operate or subsequently begins to operate
any other business, not to use any reproduction, counterfeit, copy, or colorable
imitation of the Proprietary Marks (nor any reference to the System, the
Proprietary Marks, any other of Licensor’s marks, Licensor, or Licensee’s status
as a former Licensee) in connection with either such other business or the
promotion thereof, and further agrees not to use any designation of origin
or
description or representation that suggests, implies, or represents a past
or
present association or connection with Licensor, the System, the Proprietary
Marks, or the Restaurants.
Page
22
11.7. Damages.
Licensee shall pay Licensor all damages, costs, and expenses, including
reasonable legal fees, incurred by Licensor subsequent to the termination or
expiration of this Agreement in obtaining injunctive or other relief for the
enforcement of any provisions of this Section 11.
11.8. Return
Manuals and Other Data.
Licensee shall immediately deliver to Licensor all manuals, including the Manual
(and any copies of the Manual, even if made in violation of this Agreement),
in
all media where recorded whatsoever, and all other records and reports,
correspondence, and instructions containing trade secrets or confidential
information of Licensor.
11.9. Return
Documents.
Licensee shall, at its own expense: (a) immediately deliver to Licensor any
and all materials, agreements, amendments, correspondence, and records relating
to the Franchise Agreements, Unit Franchisees, and any prospective Unit
Franchisees with whom Licensee has had contact; (b) cooperate fully with
Licensor, at Licensee’s expense, in any subsequent interaction between Licensor
and the Unit Franchisees; and (c) cooperate fully with Licensor if Licensor
(or its designee) seeks to be substituted as the Licensor under the Franchise
Agreements. Licensee agrees to execute such documents as Licensor deems
necessary in order to implement this Section 11.9.
12. TAXES,
PERMITS, AND INDEBTEDNESS
12.1. Taxes
Imposed on Licensee.
Licensee shall promptly pay when due all taxes levied or assessed, including,
without limitation, sales taxes and payroll taxes, and all accounts and other
indebtedness of every kind incurred by Licensee in the operation of its business
(including but not limited to any company-owned Restaurants).
12.2. Tax
Disputes.
In the
event of any bona
fide
dispute
as to Licensee’s liability for taxes assessed or other indebtedness, Licensee
may contest the validity or the amount of the tax or indebtedness in accordance
with procedures of the taxing authority or applicable law, but in no event
shall
Licensee permit a tax sale or seizure by levy of execution or similar writ
or
warrant, or attachment by a creditor, to occur against Licensee and/or the
premises of any company-owned Restaurant or any improvements
thereon.
12.3. Permits.
Licensee shall timely obtain any and all permits, certificates, or licenses
necessary for the full and proper operation of each company-owned Restaurant,
including, without limitation, licenses to do business, tax permits, and fire
clearances.
12.4. Legal
Actions with Possible Adverse Consequences.
Licensee shall notify Licensor in writing within five (5) days after Licensee
becomes aware of the commencement of any action, suit, or proceeding, and of
the
issuance of any order, writ, injunction, award, or decree of any court, agency,
or other governmental instrumentality, which may adversely affect the operation
or financial condition of any Restaurant.
13. PARTIES
-INDEPENDENT RELATIONSHIP
13.1. No
Fiduciary Relationship.
It is
understood and agreed by the parties hereto that this Agreement does not create
a fiduciary relationship between them; that Licensee is an independent
contractor, and that nothing in this Agreement is intended to constitute either
party an agent, legal representative, subsidiary, joint venturer, partner,
employee, or servant of the other for any purpose whatsoever.
Page
23
13.2. No
Franchise Relationship.
It is
understood and agreed by the parties that while both Licensor and Licensee
will,
in turn, enter into franchise agreements with their respective franchisees,
the
relationship between Licensor and Licensee is not a franchise, as there are
no
payments or other fees due from Licensee to Licensor.
13.3. Independent
Contractor.
During
the term of this Agreement, the parties shall hold themselves out to the public
as independent parties operating pursuant to this Agreement. Licensee agrees
to
take such actions as shall be necessary to that end including, without
limitation, posting a conspicuous notice (in such form as may be reasonably
acceptable to Licensor) that Licensee operates under a license from Licensor,
on
the premises of any company-owned Restaurants as well as in all contracts,
checks, invoices, business stationery, etc., in which reference is made to
the
Proprietary Marks in any manner. Licensee further agrees to require its Unit
Franchisees to meet similar requirements in connection with their operations
and
uses of the Proprietary Marks.
13.4. No
Right to Bind Each Other.
Nothing
in this Agreement authorizes either party to make any contract, agreement,
warranty, or representation on the other party’s behalf, or to incur any debt or
other obligation in the other party’s name; and in no event shall one of the
parties to this Agreement assume liability for, or be deemed liable as a result
of, any such action, or by reason of any act or omission of the other party,
or
any claim or judgment arising therefrom.
14. APPROVALS
AND WAIVERS
14.1. Request
for Approval.
Whenever this Agreement requires Licensor’s prior approval or consent, Licensee
shall make a timely written request to Licensor therefor and such approval
or
consent shall be obtained in writing. Licensor shall neither unreasonably
withhold nor unduly delay its approval or consent.
14.2. No
Waivers.
No
delay, waiver, omission, or forbearance on the part of Licensor to exercise
any
right, option, duty, or power arising out of any breach or default by Licensee
under any of the terms, provisions, covenants, or conditions hereof shall
constitute a waiver by Licensor to exercise any such right, option, duty, or
power as against Licensee, or as to subsequent breach or default by Licensee.
Subsequent acceptance by either party of any performance due to it hereunder
shall not be deemed to be a waiver of any preceding breach of any terms,
provisions, covenants, or conditions of this Agreement.
15. NOTICES.
Any and
all notices required or permitted under this Agreement shall be in writing
and
shall be delivered by any means that affords the sender evidence of delivery
or
of attempted delivery, to the respective parties at the addresses designated
on
the signature page of this Agreement, unless and until a different address
has
been designated by written notice to the other party. Any notice by a means
which affords the sender evidence of delivery, or rejected delivery, shall
be
deemed to have been given at the date and time of receipt or rejected
delivery.
16. SEVERABILITY
AND CONSTRUCTION
16.1. Each
Clause Severable.
Except
as expressly provided to the contrary herein, each portion, section, part,
term,
and/or provision of this Agreement shall be considered severable; and if, for
any reason, any portion, section, part, term, and/or provision herein is
determined to be invalid and contrary to, or in conflict with, any existing
or
future law or regulation by a court or agency having valid jurisdiction, such
determination shall not impair the operation of, or have any other effect upon,
such other portions, sections, parts, terms, and/or provisions of this Agreement
as may remain otherwise intelligible. The latter shall continue to be given
full
force and effect and bind the parties hereto, and the invalid portions,
sections, parts, terms, and/or provisions shall be deemed not to be a part
of
this Agreement.
Page
24
16.2. Consents.
Provisions of this Agreement under which one party requires the consent of
the
other party before undertaking an action or doing a thing are not meant, and
shall not be construed, to impose any obligation on the part of the party whose
consent is sought except as otherwise stated in this Agreement.
16.3. No
Third-Party Beneficiary Rights; No Rights Conferred on Others.
This
parties agree that this Agreement is not intended to, and shall not be deemed
to, create, establish or in any way confer upon any person the right of a third
party beneficiary or any similar such right. Except as expressly provided to
the
contrary herein, nothing in this Agreement is intended or shall be deemed to
confer upon any person or legal entity other than Licensee, Licensor, Licensor’s
officers, directors, and employees, and such of Licensee’s and Licensor’s
respective successors and assigns as may be contemplated (and, as to Licensee,
permitted) by Section 9 above, any rights or remedies under or by reason of
this Agreement.
16.4. Provisions
Meant to Survive Agreement.
All
covenants, obligations, and agreements hereunder that by their terms or by
reasonable implication are to be performed, in whole or in part, after the
termination or expiration of this Agreement, shall survive such termination
or
expiration.
16.5. Costs.
Each
party shall bear its own costs in complying with its obligations under this
Agreement
16.6. Captions
and Headings.
The
captions and headings in this Agreement are merely for the sake of convenient
reference and shall not amend, modify, or have any effect whatsoever on the
terms of this Agreement.
17. ENTIRE
AGREEMENT AND AMENDMENTS
17.1. Complete
Agreement.
This
Agreement and the APA constitute the entire agreement between Licensor and
Licensee concerning the subject matter hereof and supersede any and all prior
agreements concerning the same subject matter. The parties agree that in
deciding whether to enter into this Agreement, they did not rely on anything
other than the words of this Agreement.
17.2. Amendment.
Except
for those permitted to be made unilaterally by Licensor hereunder, no amendment,
change, or variance from this Agreement shall be binding on either party unless
mutually agreed to by the parties and executed by their authorized officers
or
agents in writing.
18. APPLICABLE
LAW
18.1. Choice
of Law.
This
Agreement takes effect upon its acceptance and execution by Licensor, and shall
be interpreted and construed exclusively under the laws of the State of New
York
which laws shall prevail in the event of any conflict of law (without regard
to,
and without giving effect to, the application of New York choice-of-law
rules).
Page
25
18.2. Choice
of Venue.
Subject
to Sections 18.3 and 18.4 below, the parties agree that any action brought
by
either party in any court, whether federal or state, shall be brought only
within such state and in the judicial district in which Licensor has its
principal place of business. The parties agree that this Section shall not
be
construed as preventing either party from removing an action from state to
federal court; provided, however, that venue shall be as set forth above.
Licensee hereby waives all questions of personal jurisdiction or venue for
the
purpose of carrying out this provision. Any such action shall be conducted
on an
individual basis, and not as part of a consolidated, common, or class
action.
18.3. Injunctions.
Nothing
contained in this Agreement shall bar either party’s right to obtain injunctive
relief against threatened conduct that will cause it loss or damages, under
the
usual equity rules, including the applicable rules for obtaining restraining
orders and preliminary injunctions.
18.4. Parties
Rights Are Cumulative.
No
right or remedy conferred upon or reserved to Licensor or Unit Franchisee by
this Agreement is intended to be, nor shall be deemed, exclusive of any other
right or remedy herein or by law or equity provided or permitted, but each
shall
be cumulative of every other right or remedy.
18.5. Waiver
of Jury Trial.
Licensor and Licensee irrevocably waive trial by jury in any action, proceeding,
or counterclaim, whether at law or in equity, brought by either of them against
the other, whether or not there are other parties in such action or
proceeding.
18.6. Payment
of Legal Fees.
In any
litigation between the parties, the parties agree that the prevailing party
shall be entitled to recover its costs (including but not limited to lawyers’
fees) from the other party.
19. ACKNOWLEDGMENTS
19.1. No
Warranties or Guarantees.
Each
party expressly disclaims the making of any warranty or guarantee, express
or
implied, as to the potential volume, profits, or success of the business
ventures that are contemplated by this Agreement.
19.2. Cooperation.
Licensor and Licensee agree to cooperate reasonably and amicably with one
another in terms of exchange and transfer of know-how and information concerning
the System to Licensor, including for example meetings between the parties’
personnel, Licensor’s questions regarding the Manuals and the System, the and
such other matters as may be necessary in order to implement the APA and this
Agreement.
19.3. Representations
and Warranties.
Each
party to this Agreement hereby represents and warrants to the other that:
(a) the person signing this Agreement on such party’s behalf has been duly
authorized to do so; (b) any and all corporate actions necessary to be
taken in order to authorize entry into this Agreement have been duly taken;
and
(c) there are no other agreements, court orders, or other legal obligations
that limit or prevent such party from negotiating, entering into, exercising
its
rights, and/or carrying out its responsibilities under this
Agreement.
[Signature
Page to Follow]
Page
26
IN
WITNESS WHEREOF,
the
parties hereto have duly signed and delivered this Agreement in duplicate on
the
day and year first above written.
|
NF
Treachers Corp.
Licensor
By:
s/Xxxx
Xxxxxx
Name:
Xxxx
Xxxxxx
Title:
VP-Corporate
Counsel
|
XXX
Franchise Systems, Inc.
Licensee
By:
s/Xxxxxxx
Xxxxxxxxx
Name:
Xxxxxxx
Xxxxxxxxx
Title:
President
|
|
Address
for Notices:
0000
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
Xxx Xxxx 00000
Attn:
President
Fax:
000.000.0000
|
Address
for Notices:
0000
Xxxxxx Xxxxxx, Xxxxx X00
Xxxx
Xxxxxxx, Xxx Xxxx 00000
Attn:
President
Fax:
000.000.0000
|
Attachments:
A
- List
of XXX Direct Unit Franchises
B
-
Development Schedule
C
-
Participation Agreement Transfer Agreement
D
-
Vittoria Agreement
Page
27
Attachment
A
List
of XXX Direct Unit Franchises
[see
two
attached pages]
Page
28
Attachment
B
Development
Schedule
|
The
following number of Restaurants shall be open and in operation in
each
Sub-market - either by Licensee and/or one or more Unit Franchisees
|
||||
|
By
this Date
|
Washington,
D.C.
|
Maryland
|
Northern
New York
|
Virginia
|
|
September
30, 2007
|
Four
(4)
|
Four
(4)
|
Four
(4)
|
Four
(4)
|
|
March
31, 2009
|
Eight
(8)
|
Eight
(8)
|
Eight
(8)
|
Eight
(8)
|
|
March
31, 2010
|
Twelve
(12)
|
Twelve
(12)
|
Twelve
(12)
|
Twelve
(12)
|
|
March
31, 2011
|
Sixteen
(16)
|
Sixteen
(16)
|
Sixteen
(16)
|
Sixteen
(16)
|
|
March
31, 2012
|
Twenty
(20)
|
Twenty
(20)
|
Twenty
(20)
|
Twenty
(20)
|
|
March
31, 2013
|
Twenty-four
(24)
|
Twenty-four
(24)
|
Twenty-four
(24)
|
Twenty-four
(24)
|
|
March
31, 2014
|
Twenty-seven
(27)
|
Twenty-seven
(27)
|
Twenty-seven
(27)
|
Twenty-seven
(27)
|
|
March
31, 2015
|
Thirty
(30)
|
Thirty
(30)
|
Thirty
(30)
|
Thirty
(30)
|
|
March
31, 2016
|
Thirty-three
(33)
|
Thirty-three
(33)
|
Thirty-three
(33)
|
Thirty-three
(33)
|
|
March
31, 2017
|
Thirty-six
(36)
|
Thirty-six
(36)
|
Thirty-six
(36)
|
Thirty-six
(36)
|
|
March
31, 2018
|
Thirty-eight
(38)
|
Thirty-eight
(38)
|
Thirty-eight
(38)
|
Thirty-eight
(38)
|
|
March
31, 2019
|
Forty
(40)
|
Forty
(40)
|
Forty
(40)
|
Forty
(40)
|
|
March
31, 2020
|
Forty-two
(42)
|
Forty-two
(42)
|
Forty-two
(42)
|
Forty-two
(42)
|
|
March
31, 2021
|
Forty-four
(44)
|
Forty-four
(44)
|
Forty-four
(44)
|
Forty-four
(44)
|
|
Thereafter
|
Forty-four
(44)
|
Forty-four
(44)
|
Forty-four
(44)
|
Forty-four
(44)
|
Page
29
Attachment
C
Participation
Agreement Transfer Agreement
February
28, 2006
XXX
Franchise Systems, Inc.
0000
Xxxxxx Xxxxxx, Xxxxx X00
Xxxx
Xxxxxxx, Xxx Xxxx 00000
NF
Treachers Corp.
Nathan’s
Famous Systems, Inc.
NF
Roasters Corp.
Miami
Subs USA, Inc.
0000
Xxx
Xxxxxxx Xxxx
Xxxxxxxx,
Xxx Xxxx 00000
Re: Transfer
to NF Treachers Corp. of all Participation Agreements
Dear
Sir
or Madam:
Effective
as of the date of this letter agreement, XXX Franchise Systems, Inc.
(“PFSI”)
hereby
transfers to NF Treachers Corp. (“NFTC”)
all of
PFSI’s rights and obligations under the Participation Agreements (defined
below), in conjunction with and in consideration for other agreements between
the parties as of this same date.
Effective
as of the date of this letter agreement:
(a) PFSI
shall have no further entitlement to receive any fees, royalties, or other
compensation under any of the Participation Agreements;
(b) PFSI
shall no longer have any rights whatsoever under any Participation Agreement
or
any other agreement entered into with Nathan’s Famous Systems, Inc.
(“NFSI”),
NF
Roasters Corp. (“NFR”),
and
Miami Subs USA, Inc. (“MSUSA”),
or
any of those companies’ respective franchisees (except with respect to a
Franchise Agreement with such a franchisee for a stand-alone Xxxxxx Xxxxxxxx’x
restaurant, without a Nathan’s
Famous,
Xxxxx
Xxxxxx Roasters,
or
Miami
Subs
operation); and
(c) NFTC
shall assume PFSI’s obligations under the Participation Agreements, with PFSI’s
express understanding and agreement that: (i) PFSI is and shall remain
solely responsible for any and all obligations that arose prior to the date
of
this letter agreement; and (ii) PFSI shall indemnify and hold Licensor and
its affiliates harmless in connection with same, as specified in the License
Agreement between NFTC and PFSI of this same date.
The
term
“Participation
Agreement”
means
an agreement among: (i) PFSI; (ii) Nathan’s Famous Systems, Inc.
(“NFSI”),
NF
Roasters Corp. (“NFR”),
and/or Miami Subs USA, Inc. (“MSUSA”);
and
(iii) a franchisee of NFSI, NFR, and/or MSUSA (the “NF
Franchisee”);
pursuant to which agreement the NF Franchisee was granted the right to also
operate its franchised Nathan’s
Famous, Miami Subs,
and/or
Xxxxx
Xxxxxx Roasters franchised
restaurant under the Xxxxxx
Xxxxxxxx’x
name and
to sell Xxxxxx
Xxxxxxxx’x products
in said franchised restaurant.
Page
30
Acknowledged
and agreed, as of this 28th day of February 2006.
|
XXX
Franchise Systems, Inc.
|
NF
Treachers Corp.
|
|
By:
Printed
Name:
Title:
|
By:
Printed
Name:
Title:
|
|
Nathan’s
Famous Systems, Inc.
|
NF
Roasters Corp.
|
|
By:
Printed
Name:
Title:
|
By:
Printed
Name:
Title:
|
|
Miami
Subs USA, Inc.
|
|
|
By:
Printed
Name:
Title:
|
Page
31
Attachment
D
Form
of Vittoria Agreement
[see
attached pages]
Page
32
