TGI FRIDAY'S INC.
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
MAIN ST. MIDWEST, INC.
(KANSAS, NEBRASKA & MISSOURI TERRITORY)
Dated: May 2, 1997
"Kansas - Midwest"
TGI FRIDAY'S INC.
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
TABLE OF CONTENTS
RECITALS 1
1. GRANT 2
2. PREFERENTIAL RIGHTS 2
3. SCHEDULE AND MANNER FOR EXERCISING
DEVELOPMENT RIGHTS 3
4. SITE SELECTION 5
5. TERM 6
6. DUTIES OF THE PARTIES 6
7. DEFAULT 10
8. TRANSFER OF INTEREST 12
9. COVENANTS 15
10. NOTICES AND PAYMENTS 18
11. INDEPENDENT CONTRACTOR AND INDEMNIFICATION 19
12. APPROVALS, WAIVERS AND REMEDIES 21
13. SEVERABILITY AND CONSTRUCTION 22
14. ENTIRE AGREEMENT 23
15. APPLICABLE LAW 23
16. ACKNOWLEDGMENTS 24
"Kansas - Midwest"
EXHIBIT A - THE TERRITORY
EXHIBIT B - FRANCHISE AGREEMENT
EXHIBIT C - CONFIDENTIALITY COVENANTS
EXHIBIT D - CONFLICT OF INTEREST AND CONFIDENTIALITY COVENANTS
"Kansas - Midwest"
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
This Amended and Restated Development Agreement ("Agreement") is
entered into this 2nd day of May, 1997 by and between TGI Friday's Inc., a New
York corporation, with its principal place of business in Dallas, Texas
(hereinafter "Franchisor") and Main St. Midwest, Inc. , a Kansas corporation,
with its principal place of business at 0000 X. 00xx Xxxxxx #000, Xxxxxxx, XX
00000 (hereinafter "Developer"), successor in interest to Kansas City Cafe
Company (hereinafter "KCCC"(hereinafter "Developer").
WITNESSETH:
WHEREAS, Franchisor, as the result of the expenditure of time,
skill, effort and money, has developed and owns a unique and distinctive system
(hereinafter "System") relating to the establishment and operation of
full-service restaurants utilizing the trade name T.G.I. Friday's and featuring
a specialized menu and full-bar service;
WHEREAS, the distinguishing characteristics of the System
include, without limitation, distinctive exterior and interior design, decor,
color scheme and furnishings; special recipes and menu items; uniform standards,
specifications and procedures for operations; quality and uniformity of products
and services offered; procedures for inventory and management control; training
and assistance; and advertising and promotional programs; all of which may be
changed, improved and further developed by Franchisor from time to time;
WHEREAS, Franchisor identifies the System by means of certain
trade names, service marks, trademarks, emblems and indicia of origin, including
but not limited to the marks T.G.I. Friday's(R), Friday's(R) and The American
Bistro(R) and such other trade names, service marks and trademarks as are now
designated and may hereafter be designated by Franchisor in writing for use in
connection with the System (hereinafter "Proprietary Marks");
WHEREAS, Franchisor derives its rights in the Proprietary Marks
pursuant to a certain Assignment Agreement dated December 29, 1992 (the
"Assignment Agreement") by and between Franchisor and TGI Friday's of Minnesota,
Inc. a Minnesota corporation ("TGIFM"), pursuant to which Franchisor transferred
to TGIFM all right, title and interest in the Proprietary Marks and TGIFM
granted back to Franchisor the perpetual and exclusive right and license to use
the Proprietary Marks and the right to sub-license the Proprietary Marks to
third parties.
WHEREAS, Franchisor continues to develop, use and control the use
of such Proprietary Marks in order to identify for the public the source of
services and products marketed thereunder and under the System, and to represent
the System's high standards of quality, appearance and services;
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WHEREAS, Developer wishes to obtain certain development rights to
operate restaurants utilizing the System (hereinafter "Restaurants" or
"franchised businesses") in the territory described in this Agreement;
NOW, THEREFORE, the parties in consideration of the undertakings
and commitments of each party to the other party set forth herein, hereby agree
as follows:
1. GRANT
-----
A. Franchisor hereby grants to Developer and Developer accepts,
pursuant to the terms and conditions of this Agreement, development rights to
establish and operate the number of T.G.I. Friday's Restaurants set forth in the
Development Schedule as may be approved by Franchisor in accordance with its
then current Site Consent Procedures, and to use the System solely in connection
therewith, at specific locations to be designated in separate T.G.I. Friday's
franchise agreements (hereinafter "Franchise Agreement") executed as provided in
Subsection 3.A hereof and pursuant to the Development Schedule set forth in
Subsection 3.B hereof. Each Restaurant developed hereunder shall be located in
the area described on Exhibit A attached hereto (hereinafter "Territory") and
outlined on the maps attached hereto as of Exhibit A. Expressly excluded from
the Territory are airport properties otherwise located within the boundaries of
the Territory, Franchisor reserving the rights to establish or license another
party to establish Restaurants at airport properties even if otherwise located
within the boundaries of the Territory. Franchisor reserving the rights to
establish or license another party to establish Restaurants at airport
properties even if otherwise located within the boundaries of the Territory.
B. Each Restaurant for which a development right is granted
hereunder shall be established and operated pursuant to a Franchise Agreement to
be entered into between Developer and Franchisor in accordance with Subsection
3.A hereof.
C. Except as otherwise provided in this Agreement, Franchisor
shall not establish nor license anyone other than Developer to establish any
Restaurant in the Territory during the term of this Agreement.
D. This Agreement is not a franchise agreement and does not grant
to Developer any right to use Franchisor's Proprietary Marks or the System.
E. Developer shall have no right under this Agreement to license
others to use the Proprietary Marks or the System.
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3. SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT RIGHTS
--------------------------------------------------------
A. Developer shall exercise each development right granted herein
only by executing a Franchise Agreement for each Restaurant at a site consented
to by Franchisor in the Territory as hereinafter provided. The Franchise
Agreement for each development right exercised hereunder in accordance with the
development schedule set forth in Subsection 3.B hereof shall be in the form of
the franchise agreement attached hereto as Exhibit B. The franchise fee to be
paid by Developer for the development in accordance with the development
schedule set forth in Subsection 3.B hereof shall be Fifty Thousand Dollars
($50,000.00) for each Restaurant to be located in the Territory, payable upon
execution of the Franchise Agreement for each Restaurant. .
B. Recognizing that time is of the essence, Developer agrees to
exercise each of the development rights granted hereunder in the manner
specified in Subsection 3.A hereof, and to satisfy the development schedule set
forth below:
Midwest Territory (as defined in Exhibit A)
------------------ ------------------- ------------------ -------------
Restaurant No. Date of Date Franchise Date Open &
Preliminary Site Agreement Signed Operating
Consent & Fees Paid
------------------ ------------------- ------------------ -------------
1 6/98 9/98 12/15/98
------------------ ------------------- ------------------ -------------
2 6/99 9/99 12/15/99
------------------ ------------------- ------------------ -------------
3 6/00 9/00 12/15/00
------------------ ------------------- ------------------ -------------
4 6/01 9/01 12/15/01
------------------ ------------------- ------------------ -------------
5 6/02 9/02 12/15/02
------------------ ------------------- ------------------ -------------
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Failure by Developer to adhere to the development schedule shall
constitute a material event of default under this Agreement as provided in
Subsection 7.C hereof
C. Franchisor and Developer agree that during the year 2002 of
the term of the Agreement a new development schedule will be negotiated
providing for the number of Restaurants to be developed during the ensuing 7
year period and the schedule for such development. In the event the parties are
unable to agree upon the number of Restaurants to be developed or the schedule
for such development within thirty (30) days after having exerted good faith
efforts to do so, the parties agree to retain an independent third party
("Appraiser") mutually acceptable to both parties to determine such factors. The
decision of such Appraiser shall be binding on Franchisor and Developer. In the
event the parties are unable to agree upon a mutually acceptable Appraiser, the
selection of appraisers and the determination of the necessary factors shall be
conducted using the same procedures set forth at Subsection 17.03 of the
Franchise Agreement attached hereto as Exhibit B. Should Developer fail to
develop according to the new development schedule, Developer agrees that it will
lose its rights to development within, and agrees that Franchisor shall have the
right to develop or license other parties to develop Restaurants within the
Territory. For each of the Restaurants to be developed Developer shall execute
the standard form of franchise agreement then being offered to new System
franchisees and other ancillary agreements as Franchisor may require for the
franchised business, the terms of which may differ from the terms of the
Franchise Agreement attached to this Agreement, including, without limitation, a
higher franchise fee, percentage royalty rate and advertising contribution.
4. SITE SELECTION
--------------
A. Developer assumes all cost, liability, expense and
responsibility for locating, obtaining and developing sites for Restaurants, and
for constructing and equipping Restaurants at such sites. The development of a
Restaurant at any site must be consented to by Franchisor in accordance with the
then existing site selection procedures including, but not limited to, the
following procedures:
(1) Prior to acquisition by lease or purchase of a
site for a Restaurant in the Territory, Developer shall submit to Franchisor for
each Restaurant, in the form prescribed by Franchisor, a description of the
site, a market feasibility study for the site which shall include, but not be
limited to, demographic information, site plans and such other information or
materials as Franchisor may reasonably require, together with a letter of intent
or other evidence satisfactory to Franchisor which confirms Developer's
favorable prospects for obtaining the site. Recognizing that time is of the
essence, Developer agrees that it must submit such information and materials for
each proposed site to Franchisor in writing for its consent. Franchisor shall
have thirty (30) days after receipt of such information and materials from
Developer to consent to or refuse its consent to use the proposed site as the
location for a Restaurant, which consent shall not be unreasonably withheld. No
site shall be deemed approved unless it has been expressly approved to in
writing by Franchisor.
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(2) Developer acknowledges that Franchisor's
consent to the use of a prospective Restaurant site or the rendering of
assistance in the selection of a site for a Restaurant does not constitute a
representation, promise or guarantee by Franchisor that a Restaurant operated at
that site would be profitable or otherwise successful.
(3) After the location for a Restaurant is
consented to by Franchisor and leased or acquired by Developer in accordance
with the requirements of this Section 4, Developer shall execute a Franchise
Agreement relating to the Restaurant and its location shall be recorded in
Attachment A to the applicable Franchise Agreement.
B. If the Developer will occupy the premises of any Restaurant
under a lease, Developer shall furnish to Franchisor a copy of the executed
lease within ten (10) days after execution thereof. Prior to such execution,
Developer shall submit the lease to Franchisor for its written approval. Unless
Developer has obtained Franchisor's written consent to the exclusion of a
required provision, the lease shall include the following terms and conditions:
(1) That the premises shall be used for the
operation of the Restaurant;
(2) That the lessor consents to the use of such
Proprietary Marks and signage as Franchisor may prescribe for the franchised
business;
(3) That the lessor agrees to furnish Franchisor
with copies of any and all letters and notices sent to Developer pertaining to
the lease and the premises at the same time that such letters and notices are
sent to Developer;
(4) That Developer may not sublease or assign all
or any part of its occupancy rights, or extend the term of or renew the lease,
without Franchisor's prior written consent, which shall not be unreasonably
withheld;
(5) That Franchisor shall have the right to enter
the premises to make any modification necessary to protect Franchisor's
Proprietary Marks or to cure any default under the lease, this Agreement or the
Franchise Agreement;
(6) That the lessor agrees that Developer may
assign the lease to Franchisor; that the lessor will consent to such assignment
and may not impose any assignment fee or similar charge on Franchisor in
connection with such assignment; and that Franchisor may sublease the premises
for all or any part of the remaining term of the lease; and
(7) That the lessor and Developer shall not amend
or otherwise modify the lease in any manner which would materially affect any of
the foregoing terms and conditions without Franchisor's prior written consent.
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C. Developer shall construct the Restaurant in accordance with
the provisions of the Franchise Agreement.
5. TERM
----
Unless sooner terminated in accordance with the provisions of this
Agreement, the term of this Agreement shall commence on the date hereof and
shall terminate on June 26, 2009.
6. DUTIES OF THE PARTIES
---------------------
A. Franchisor shall furnish to Developer the following:
(1) One (1) copy of the Development Manual
("Development Manual"), which is a part of the Confidential Operating Manuals
("Manuals") referred to in Section 4 of the Franchise Agreement. The Development
Manual contains the instructions, requirements, standards, specifications and
procedures for the development and construction of a typical Restaurant,
including site selection guidelines and criteria, construction management
techniques and development planning and scheduling methods. The Development
Manual will be delivered to Developer on loan upon execution of this Agreement
and shall be returned to Franchisor immediately upon request or upon termination
or expiration of this Agreement. Developer shall at all times treat the
Development Manual as confidential.
(2) Such site selection counseling and assistance
as Franchisor may deem advisable.
(3) Such on-site evaluation as Franchisor may deem
advisable in response to Developer's requests for site approval; provided,
however, that Franchisor shall not provide on-site evaluation for any proposed
site prior to the receipt of all required information and materials concerning
such site prepared pursuant to Section 4 hereof.
(4) One (1) set of Franchisor's standard plans and
specifications for the construction of a typical Restaurant including the
exterior and interior design and layout, fixtures, furnishings and signs.
(5) Pre-opening and opening training and assistance
as Franchisor deems advisable with due regard to the number of trained personnel
then employed by Franchisee and/or its affiliates then operating other
Restaurants utilizing the System. Developer currently operates in excess of
seven Restaurants. In accordance with current policy, Franchisor would provide
no more than two NSO Team Members for each opening.
(6) Training programs for the Operator (as
hereinafter defined) in the operation of the Restaurants at such location, as
may be designated by Franchisor from time to time in the Manuals or otherwise in
writing.
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B. Developer makes the following representations, warranties and
covenants and accepts the following obligations:
(1) Developer shall comply with all terms and
conditions set forth in this Agreement.
(2) Upon execution of this Agreement, Developer
shall designate:
(i) an individual who is fully
authorized to act on behalf of Developer in all transactions with Franchisor
concerning Developer's obligations under this Agreement ("Representative"). A
qualified Representative shall be designated at all times during the term of
this Agreement by Developer and Developer shall designate a replacement
Representative from time to time as necessary;
(3) If this Agreement provides for the development
of three or more Restaurants, Developer will be required to designate an
individual to supervise the Restaurants (a "Regional Manager") in accordance
with the provisions of Subsection 4.03 of the Franchise Agreement.
(4) Developer and Developer's Principals (as
defined in Subsection 13.A hereof) covenant and agree that neither shall, during
the term of this Agreement or thereafter, communicate, divulge or use for the
benefit of any other person, persons, partnership, association or corporation
any confidential information, knowledge or know-how concerning the methods of
development and operation of the Restaurant which may be communicated to
Developer or Developer's Principals or of which they may be apprised by virtue
of Developer's operation under the terms of this Agreement. Developer and
Developer's Principals shall divulge such confidential information only to such
of Developer's employees as must have access to it in connection with their
employment. Any and all information, knowledge, techniques and know-how,
including without limitation, the Development Manual and all drawings,
materials, equipment, recipes, computer and point of sale programs and output
from such programs, and all other data which Franchisor designates as
confidential shall be deemed confidential for purposes of this Agreement.
Neither Developer nor any of Developer's Principals shall at any time, without
Franchisor's prior written consent, copy, duplicate, record or otherwise
reproduce such materials or information, in whole or in part, or otherwise make
the same available to any unauthorized person.
(5) Developer shall, prior to the disclosure of any
confidential information, require any of its employees who will have access to
such confidential information to execute covenants that they will maintain the
confidentiality of information they receive in connection with their employment
by Developer. Such covenants shall be in a form satisfactory to Franchisor,
including, without limitation, specific identification of Franchisor as a third
party beneficiary of such covenants with the independent right of enforcement.
Such covenants shall be in a form substantially similar to the Confidentiality
Covenants attached hereto as Exhibit C. Developer shall be responsible for
compliance by its employees with such covenants.
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(6) If Developer or Developer's Principals develop
any new process or improvement in the development, operation or promotion of the
Restaurants, Developer agrees to promptly notify Franchisor and provide
Franchisor with all necessary information concerning same, without compensation.
Developer and Developer's Principals acknowledge that any such process or
improvement shall become the property of Franchisor and Franchisor may utilize
or disclose such information to other developers as it determines to be
appropriate.
(7) Developer and each of Developer's Principals
acknowledge complete ownership by Franchisor of the Proprietary Marks,
specifications, standards, management and accounting methods, operating
procedures and other concepts embodied in and comprising the System, and
covenants that during the term of this Agreement or thereafter, regardless of
the cause of termination, Developer and each of Developer's Principals shall
not, either directly or indirectly, contest or aid others in contesting, the
exclusive ownership and rights of Franchisor in any aspect of the System, or do
anything that will otherwise impair such rights without Franchisor's prior
written consent, including, without limitation, using or reproducing any
materials copyrighted by Franchisor.
(8) Developer and each of Developer's Principals
acknowledge and agree: (a) that any failure to comply with the covenants in this
Subsection 6.B or any failure to obtain execution of the covenants in Subsection
6.B(5) shall constitute a material event of default under Subsection 7.C; (b)
that any such failure will cause Franchisor irreparable injury for which no
adequate remedy at law may be available; and (c) therefore, Franchisor shall be
entitled, in addition to any other remedies which it may have hereunder, at law,
or in equity, to obtain specific performance of, or to an injunction against
violation of, the requirements of Subsections 6.B(4), (5) and (7), without the
necessity of showing actual or threatened damage and without being required to
furnish a bond or other security. If Franchisor prevails, Developer and each of
Developer's Principals agree to pay all court costs and reasonable attorneys'
fees incurred by Franchisor in connection with the enforcement of Subsections
6.B(4), (5) and (7), including the agreements referred to in Subsection 6.B(5).
(9) Developer shall comply with all requirements of
federal, state and local laws, rules and regulations.
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C. In the event Developer is a corporation or a partnership,
Developer represents, warrants and covenants that:
(1) Developer is duly organized and validly
existing under the state law of its formation;
(2) Developer is duly qualified and is authorized
to do business in each jurisdiction in which its business activities or the
nature of the properties owned by it require such qualification;
(3) Developer's corporate charter or written
partnership agreement shall at all times provide that the activities of
Developer are confined exclusively to the development and operation of the
Restaurants;
(4) The execution of this Agreement and the
transactions contemplated hereby are within Developer's corporate power, or if
Developer is a partnership, permitted under Developer's written partnership
agreement;
(5) If Developer is a corporation, copies of
Developer's Articles of Incorporation, Bylaws, other governing documents and any
amendments thereto, including the resolution of the Board of Directors
authorizing entry into and performance of this Agreement, shall be promptly
furnished to Franchisor; or, if Developer is a partnership, copies of the
written partnership agreement, other governing documents and any amendments
thereto shall be promptly furnished to Franchisor including evidence of consent
or approval of the entry into and performance of this Agreement by the requisite
number or percentage of partners, if such approval or consent is required by
Developer's written partnership agreement;
(6) If Developer is a corporation, Developer shall
maintain a current list of all owners of record and all beneficial owners of any
class of voting securities of the corporation; or if Developer is a partnership,
Developer shall maintain a current list of all owners of an interest in the
partnership. Such lists shall be furnished to Franchisor upon request;
(7) If Developer is a corporation, Developer shall
maintain stop-transfer instructions against the transfer on its records of any
equity securities and each stock certificate of the corporation shall have
conspicuously endorsed upon its face a statement in a form satisfactory to
Franchisor that it is held subject to and that further assignment or transfer
thereof is subject to all restrictions imposed upon assignments by this
Agreement; provided, however, that the requirements of this Subsection 6.C(7)
shall not apply to a publicly-held corporation (as defined at Subsection 8.B(1)
hereof). If Developer is a partnership, its written partnership agreement shall
provide that ownership of an interest in the partnership is held subject to and
that further assignment or transfer is subject to all restrictions imposed upon
assignments by this Agreement;
(8) Developer represents that: (a) Xxxxxx Xxxxxxxxx
and Xxxx Xxxxx, Xx. are voting members of the Board of Directors of Developer
and (ii) together constitute a majority of the voting members of the Board with
voting control over the actions of the Board; (or an approved replacement of
either or both of them; (b) that Xxxxxx Xxxxxxxxx and Xxxx Xxxxx, Xx.(or their
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approved replacements) shall at all times during the term of this Agreement be
and remain voting members of the Board of Directors of Developer and (ii)
together constitute a majority of the voting members of the Board with voting
control over the actions of the Board; and (c) that Developer shall obtain the
prior written approval of Franchisor of any replacement or subsequent
replacement for or an approved replacement of either or both of them Xxxxxx
Xxxxxxxxx and Xxxx Xxxxx, Xx. in accordance with the provisions of Section 8 of
this Agreement before either of them or any approved replacement is replaced as
a member of the Board. Xxxxxx Xxxxxxxxx or Xxxx Xxxxx, Xx. or an approved
replacement of either or both of them is replaced as a member of the Board.
Notwithstanding the foregoing, in the event the Board of Directors of Developer
is reduced to a single director Board, either Xxxxxx Xxxxxxxxx or Xxxx Xxxxx,
Xx., or an approved replacement shall be the sole Director
D. Developer acknowledges and agrees
that the representations, warranties and covenants set forth in Subsection 6.C
are continuing obligations of Developer and that any failure to comply with such
representations, warranties and covenants shall constitute a material event of
default under this Agreement pursuant to Subsection 7.C hereof.
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7. DEFAULT
-------
A. The rights granted to Developer in this Agreement have been
granted in reliance on Developer's representations and assurances, among others,
that the conditions set forth in Sections 1, 3 and 4 of this Agreement will be
met by Developer in a timely manner. Time is of the essence in relation to all
obligations of Developer in this Agreement.
B. Developer shall be deemed to be in default under this
Agreement and all rights granted herein shall automatically terminate without
notice to Developer, if Developer shall become insolvent or make a general
assignment for the benefit of creditors; or if a petition in bankruptcy is filed
under any chapter of Title 11 of the United States Code by Developer or such a
petition is filed against Developer and not opposed by Developer; or if a xxxx
in equity or other proceeding for the appointment of a receiver of Developer or
other custodian for Developer's business or assets is filed and consented to by
Developer; or if a receiver or other custodian (permanent or temporary) of
Developer's assets or property, or any part thereof, is appointed by any court
of competent jurisdiction; or if proceedings for a composition with creditors
under any state or federal law should be instituted by or against Developer; or
if a final judgment remains unsatisfied or of record for thirty (30) days or
longer (unless supersedeas bond is filed); or if Developer is dissolved; or if
execution is levied against Developer's business or property; or if suit to
foreclose any lien or mortgage against the premises or equipment of any
Restaurant developed hereunder is instituted against Developer and not dismissed
within thirty (30) days; or if the real or personal property of any Restaurants
developed hereunder shall be sold after levy thereupon by any sheriff, marshal
or constable.
C. If Developer fails to comply with the development schedule set
forth in Subsection 3.B hereof or any subsequent development schedule; Developer
or Developer's Principals fail to comply with the restrictions on confidential
information set forth in Subsection 6.B(4) or the requirements of Subsection 9.B
concerning in-term covenants against competition (except where liquidated
damages have been otherwise expressly provided); Developer fails to obtain
execution of the covenants from the persons designated by Franchisor pursuant to
Subsections 6.B(5) and 9.G; Developer breaches the warranties, representations
and covenants set forth in Subsection 6.C; Developer or any partner or
shareholder makes or attempts to make a transfer or assignment in violation of
Section 8 hereof; Developer fails to pay any monies owed to Franchisor within
ten (10) days of the date the monies become due and payable; Developer fails to
comply with any other terms and conditions of this Agreement, or the terms of
any Franchise Agreements or any other development agreements between Developer
and Franchisor; such action shall constitute a material event of default under
this Agreement. Upon such default, Franchisor, in its discretion, may do any one
or more of the following:
(1) Terminate this Agreement and all rights granted
hereunder without affording Developer any opportunity to cure the default,
effective immediately upon notice to Developer;
(2) Provide Developer a reasonable period of time,
not to exceed thirty (30) days after notice from Franchisor, to cure a default
which is susceptible to cure;
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(3) Reduce the number of Restaurants which
Developer may establish pursuant to Subsection 1.A of this Agreement;
(4) Terminate the territorial exclusivity granted
Developer in Subsection 1.C hereof, or reduce the Territory granted Developer
hereunder; or
(5) Accelerate the development schedule set forth
in Subsection 3.B hereof.
D. Upon termination of this Agreement, Developer shall have no
right to establish or operate any Restaurant for which a Franchise Agreement has
not been executed by Franchisor and delivered to Developer at the time of
termination and Franchisor shall be entitled to establish and to license others
to establish Restaurants in the Territory except as may be otherwise provided
under any other agreement which is then in effect between Franchisor and
Developer.
E. No default under this Agreement shall constitute a default
under any Franchise Agreement between the parties hereto, unless Developer's
acts or omissions also violate the terms and conditions of the applicable
Franchise Agreement.
8. TRANSFER OF INTEREST
--------------------
A. Franchisor shall have the right to transfer or assign this
Agreement and all or any part of its rights or obligations herein to any person
or legal entity.
B. (1) Developer and Developer's Principals understand and
acknowledge that the rights and duties set forth in this Agreement are personal
to Developer, and that Franchisor has granted the development rights in reliance
on the business skill, financial capacity and business reputation and character
of the Developer . Accordingly, neither Developer nor any initial or subsequent
successor or assign to any part of Developer's interest in the development
rights, nor any individual, partnership, corporation or other entity which
directly or indirectly has or owns any interest in this Agreement or in
Developer shall sell, assign, transfer, convey, give away, pledge, mortgage or
otherwise encumber any direct or indirect interest in this Agreement or in any
entity which owns the development rights without the prior written consent of
Franchisor; provided, however, that Franchisor's prior written consent shall not
be required for a transfer of less than a five percent (5%) interest in a
publicly-held corporation. A publicly-held corporation is a corporation
registered pursuant to Section 12 under the Securities Exchange Act of 1934, as
amended. Any purported assignment or transfer, by operation of law or otherwise,
not having the written consent of Franchisor required by this Subsection 8.B
shall be null and void and shall constitute a material event of default for
which Franchisor may terminate this Agreement pursuant to Subsection 7.C hereof.
(2) Franchisor shall not unreasonably withhold its
consent to a transfer of any interest in Developer or in this Agreement.
Franchisor may, in its sole discretion, require any or all of the following as
conditions of its approval:
(a) All of Developer's accrued
monetary obligations and all other
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outstanding obligations to Franchisor, its subsidiaries and its affiliates shall
have been satisfied;
(b) Developer is not in default of
any provision of this Agreement, any amendment hereof or successor hereto, or
any other agreement between Developer and Franchisor or its subsidiaries and
affiliates;
(c) The transferor shall have
executed a general release, in a form satisfactory to Franchisor, of any and all
claims against Franchisor and its officers, directors, shareholders and
employees, in their corporate and individual capacities, including, without
limitation, claims arising under this Agreement and federal, state and local
laws, rules and ordinances;
(d) The transferee shall enter into
a written agreement in a form satisfactory to Franchisor, assuming full,
unconditional, joint and several liability for and agreeing to perform from the
date of the transfer, all obligations, covenants and agreements contained in
this Agreement; and as applicable, transferee's spouse, shareholders, partners
or other investors, shall also execute such agreement;
(e) The transferee shall demonstrate
to Franchisor's satisfaction the following: that transferee meets the criteria
which Franchisor considers when reviewing a prospective developer's application
for development rights including Franchisor's educational, managerial and
business standards; that transferee possesses a good moral character, business
reputation and credit rating; that transferee has the aptitude and ability to
conduct the franchised businesses contemplated herein (as may be evidenced by
prior related business experience or otherwise); and that transferee has
reasonably adequate financial resources and capital to develop and operate the
franchised businesses;
(f) At Franchisor's option, the
transferee shall execute (and/or, upon Franchisor's request, shall cause all
interested parties to execute), the standard form of development agreement then
being offered to new System developers and other ancillary agreements as
Franchisor may require for the development of the Restaurants, which agreements
shall supersede this Agreement and its ancillary documents in all respects and
the terms of which agreements may differ from the terms of this Agreement;
provided, however, that the transferee shall not be required to pay any
development fee;
(g) Developer and Developer's
Principals shall remain liable for all of the obligations to Franchisor in
connection with this Agreement incurred prior to the effective date of the
transfer and shall execute any and all instruments reasonably requested by
Franchisor to evidence such liability;
(h) Developer shall pay a transfer
fee of Five Thousand Dollars ($5,000.00), or such greater amount as is necessary
to reimburse Franchisor for its reasonable costs and expenses associated with
reviewing the application to transfer, including, without limitation, legal and
accounting fees;
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13
(i) If transferee is a corporation
or a partnership, transferee shall make and will be bound by any or all of the
representations, warranties and covenants set forth at Subsection 6.C as
Franchisor requests. Transferee shall provide to Franchisor evidence
satisfactory to Franchisor that the terms of Subsection 6.C have been satisfied
and are true and correct on the date of the transfer.
(3) Developer acknowledges and agrees that each
condition which must be met by the transferee is reasonable and necessary to
assure such transferee's full performance of the obligations hereunder.
(4) In the event the proposed transfer is to a
corporation formed solely for the convenience of ownership, Franchisor's consent
may be conditioned upon any of the requirements set forth at Subsection 8.B(2),
except that the requirements set forth at Subsections 8.B(2)(c), (e), (f) and
(h) shall not apply. With respect to a transfer to a corporation formed for the
convenience of ownership, the percentage of interest owned in the transferee
shall be the same as that previously owned in the transferor, except as may be
required by law.
(5) Notwithstanding any other provision of this
Section 8, if: (a) together Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xx. or an approved
replacement of either or both of them shall no longer constitute a majority of
the voting members of the Board of Directors of Developer with voting control
over the actions of the Board, or (b) either Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xx.
or an approved replacement of either or both of them is no longer a voting
member of the Board, then under any of such circumstances, Franchisor may, at
its option, terminate this Agreement effective sixty (60) days after notice to
Developer
(5) INTENTIONALLY DELETED.
----------------------
(6) With respect to the approval of any replacement
for Xxxxxx X. Xxxxxxx, Xxx X. Xxxxxx or a replacement for Xxxxxx Xxxxxxxxx or
Xxxx Xxxxx, Xx. or any subsequently approved replacement of either or both of
them as a voting member of the Board of Directors of Developer, Franchisor, in
its sole discretion, may require, among others, any or all of the following as
conditions of its approval:
(a) Developer shall not be in default of any
provision of this Agreement, any amendment hereof or successor hereto, or any
other agreement between Developer and Franchisor, or their subsidiaries and
affiliates;
(b) the replacement shall enter into a written
agreement in a form satisfactory to Franchisor agreeing to assume and perform
the covenants and agreements contained herein to be assumed and performed by
Developer's Principals; and
(c) the replacement shall demonstrate to
Franchisor's satisfaction the following: (i) that the replacement meets the
criteria which Franchisor considers when reviewing a prospective developer's
application for development rights, including Franchisor's educational,
managerial and business standards, (ii) that the replacement possesses a good
moral character, business reputation
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14
and credit rating, and (iii) that the replacement has the aptitude and ability
to conduct the franchised business (as may be evidenced by prior related
business experience or otherwise).
C. (1) Any party holding any interest (including interests
required to be transferred pursuant to Subsection 8.D hereof if such proposed
transfer would constitute the sale to or purchase by a third party of any
interests in the Franchisee, the franchised business or this Agreement) in
Developer or in this Agreement who desires to accept any bona fide offer from a
third party to purchase such interest shall promptly notify Franchisor in
writing of each such offer, and shall provide such information and documentation
relating to the offer as Franchisor may require. Franchisor shall have the right
and option, exercisable within thirty (30) days after receipt of such written
notification and documentation, to send written notice to the seller that
Franchisor intends to purchase the seller's interest on the same terms and
conditions offered by the third party. Any material change in the terms of any
offer prior to closing shall constitute a new offer subject to the same rights
of first refusal by Franchisor as in the case of an initial offer. Failure of
Franchisor to exercise the option afforded by this Subsection 8.C shall not
constitute a waiver of any other provision of this Agreement, including all of
the requirements of Subsection 8.B with respect to a proposed transfer.
(2) In the event the offer from the third party
provides for payment of consideration other than cash or involves certain
intangible benefits, Franchisor may elect to purchase the interest proposed to
be sold for the reasonable equivalent in cash. If the parties cannot agree
within a reasonable time on the reasonable equivalent in cash of the non-cash
part of the offer, an independent appraiser shall be designated by Franchisor to
determine such amount and his determination shall be final and binding.
(3) If Franchisor elects to exercise the option
described above, it shall have the right to set off one-half (1/2) of the cost
of the appraisal, if any, against any payment made hereunder.
E. Franchisor's consent to a transfer of any interest in
Developer or this Agreement shall not constitute a waiver of any claims it may
have against the transferring party, nor shall it be deemed a waiver of
Franchisor's right to demand exact compliance with any of the terms of this
Agreement by the transferee.
9. COVENANTS
---------
A. Developer covenants that during the term of this Agreement
except as otherwise approved in writing by Franchisor, Developer shall devote
requisite time, energy and best efforts to meet its obligations under this
Agreement and shall require its Operators and Regional Manager, if applicable,
to devote full time, energy and best efforts to the management, operation and
supervision of the franchised business and the Restaurants.
B. Developer and Developer's Principals specifically acknowledge
that they will receive valuable specialized training, trade secrets and
confidential information, including, without limitation, information regarding
the site selection and other methods and techniques of Franchisor
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15
and the System related to the development of the Restaurants which are beyond
the present skills and experience possessed by Developer, Developer's Principals
and Developer's managers and other employees. Developer and Developer's
Principals acknowledge that such training, trade secrets and confidential
information provide a competitive advantage and will be valuable to them in the
development of the franchised businesses and that gaining access to such
training, trade secrets and confidential information are, therefore, a primary
reason why they are entering into this Agreement. In consideration for such
training, trade secrets and confidential information, Developer and Developer's
Principals covenant as follows:
(1) With respect to Developer, during the term of
this Agreement, or with respect to each of Developer's Principals, during the
term of this Agreement for so long as such individual or entity satisfies the
definition of "Developer's Principal" as described in Subsection 13.A, neither
Developer nor any of Developer's Principals shall, either directly or
indirectly, for themselves, or through, on behalf of, or in conjunction with any
person, persons, partnership or corporation:
(a) Divert or attempt to divert any business
or customer of the franchised businesses to any competitor, by direct or
indirect inducement or otherwise, or do or perform, directly or indirectly, any
other act injurious or prejudicial to the goodwill associated with Franchisor's
Proprietary Marks and the System;
(b) Employ or seek to employ any person who,
is at that time or has within one (1) year been employed by Franchisor or by any
other developer or franchisee of Franchisor, or otherwise directly or indirectly
to induce such person to leave his or her employment thereat (for breach of this
covenant and due to the difficulty of establishing the precise amount of
damages, for each breach of this covenant Developer agrees to pay to Franchisor
or other developer of Franchisor as appropriate, liquidated damage in amount
equal to the annualized rate of compensation of such person in the final twelve
(12) months of employment with such former employer);
(c) Own, maintain, operate, engage in or have
an ownership interest (including any right to share in revenues or profits) in
any business offering the same or similar products and services as offered by
restaurants within the System.
(2) With respect to Developer, for a continuous
uninterrupted period commencing upon the expiration or termination of this
Agreement or with respect to each of Developer's Principals, for a continuous
uninterrupted period commencing upon the earlier of: (i) the expiration or
termination of this Agreement or (ii) the time such individual or entity ceases
to satisfy the definition of "Developer's Principal" as described in Subsection
13.A, and
(a) For one (1) year thereafter neither
Developer nor any of Developer's Principals shall, either directly or
indirectly, for themselves, or through, on behalf of, or in conjunction with any
person, persons, partnership or corporation:
(i) Divert or attempt to divert any
business or customer of the "Midwest"
16
franchised businesses to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with Franchisor's Proprietary Marks and
the System;
(ii) Employ or seek to employ any person
who is at that time or has within one (1) year been employed by Franchisor or by
any other developer or franchisee of Franchisor, or otherwise directly or
indirectly to induce such person to leave his or her employment thereat (for
breach of this covenant and due to the difficulty of establishing the precise
amount of damages, for each breach of this covenant Developer agrees to pay to
Franchisor or other developer of Franchisor as appropriate, liquidated damage in
amount equal to the annualized rate of compensation of such person in the final
twelve (12) months of employment with such former employer);
(iii) Own, maintain, operate, engage in
or have an ownership interest (including any right to share in revenues or
profits) in any business offering the same or similar products and services as
offered by restaurants within the System, which business is, or is intended to
be, located within the Territory; and
(b) For one (1) year thereafter neither
Developer nor any of Developer's Principals shall, either directly or
indirectly, for themselves, or through, on behalf of, or in conjunction with any
person, persons, partnership or corporation own, maintain, operate, engage in,
or have any interest (including any right to share in the revenues or profits)
in any business offering the same or similar products and services as offered by
restaurants within the System, which business is, or (ii) to future food and
beverage operations which are not e System. intended to be, located within a
radius of three (3) miles of any restaurant in the System.
(3) Subsections 9.B(1)(c), 9.B(2)(a)(iii) and 9.B(2)(b)
shall not apply: (i) to an ownership interest of less than five percent (5%) of
the outstanding equity securities of any publicly-held company if such interest
is owned for investment only and not owned by an officer, director, employee or
consultant of such publicly-held company;
(ii) to future food and beverage operations which
are not the same or substantially similar in concept, decor or menus to
restaurants with the System.
C. The parties agree that each of the foregoing covenants shall
be construed as independent of any other covenant or provision of this
Agreement. If all or any portion of a covenant in this Section 9 is held
unreasonable or unenforceable by a court or agency having valid jurisdiction in
an unappealed final decision to which Franchisor is a party, Developer and
Developer's Principals expressly agree to be bound by any lesser covenant
subsumed within the terms of such covenant that imposes the maximum duty
permitted by law, as if the resulting covenant were separately stated in and
made a part of this Section 9.
D. Developer and Developer's Principals understand and
acknowledge that Franchisor shall have the right, in its sole discretion, to
reduce the scope of any covenant set forth in Subsection 9.B of this Agreement,
or any portion thereof, without their consent, effective
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17
immediately upon written notice to Developer and Developer and Developer's
Principals agree that they shall comply forthwith with any covenant as so
modified, which shall be fully enforceable notwithstanding the provisions of
Section 14 hereof.
E. Developer and Developer's Principals expressly agree that the
existence of any claims they may have against Franchisor, whether or not arising
from this Agreement, shall not constitute a defense to the enforcement by
Franchisor of the covenants in this Section 9.
F. Developer and each of Developer's Principals acknowledge and
agree: (1) that any failure to comply with the covenants in this Section 9 or
any failure to obtain execution of the covenants in Subsection 9.G below shall
constitute a material event of default under Subsection 7.C; (2) that a
violation of the requirements of this Section 9 would result in irreparable
injury to Franchisor for which no adequate remedy at law may be available; and
(3) therefore, Franchisor shall be entitled, in addition to any other remedies
which it may have hereunder, at law, or in equity, to obtain specific
performance of or an injunction against the violation of the requirements of
this Section 9, without the necessity of showing actual or threatened damage and
without being required to furnish a bond or other security. If Franchisor
prevails, Developer and Developer's Principals agree to pay all costs and
expenses (including reasonable attorneys' fees) incurred by Franchisor in
connection with the enforcement of this Section 9, including enforcement of the
agreements referred to in Subsection 9.G below.
G. Developer shall, prior to arranging any training or disclosing
any confidential information, require its Representative, Regional Manager, if
applicable, and such other supervisory or managerial employees of Developer as
Franchisor shall designate to execute covenants similar to those set forth in
this Section 9 and in Section 6 (including covenants applicable upon the
termination of a person's relationship with Developer). Every covenant required
shall be in a form satisfactory to Franchisor, including, without limitation,
specific identification of Franchisor as a third party beneficiary of such
covenants with the independent right of enforcement. Such covenants shall be in
a form substantially similar to the Confidentiality Agreement and Covenant Not
to Compete attached hereto as Exhibit D. Developer shall be responsible for
compliance by its employees with such covenants.
10. NOTICES AND PAYMENTS
--------------------
A. All notices required to be given hereunder shall be in writing
and shall be sent by personal delivery or by certified or registered mail,
return receipt requested to the respective parties.
If directed to Franchisor, the notice shall be addressed to TGI
Friday's Inc., attention General Counsel, 0000 XXX Xxxxxxx Xxxxxx, Xxxxx 00000.
If directed to Developer or Developer's Principals, the notice
shall be addressed to Developer, at the address shown on the first page hereof.
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18
Any notices sent by certified or registered mail shall be deemed
given at the time of mailing. Any change in the foregoing addresses shall be
effected by giving fifteen (15) days written notice of such change to the other
party.
Unless otherwise specified, all payments required to be made by
Developer to Franchisor under this Agreement are due and payable immediately
upon demand and/or receipt of any billing therefore and shall be sent by
personal delivery or by mail, postage prepaid, and directed to Franchisor as
shown above.
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11. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
------------------------------------------
A. It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, that Developer
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, employer, joint employer, enterprise or servant of
the other for any purpose whatsoever.
B. Developer shall hold itself out to the public to be an
independent contractor operating pursuant to this Agreement. Developer agrees to
take such actions as shall be necessary to that end.
C. Developer understands and agrees that nothing in this
Agreement authorizes Developer to make any contract, agreement, warranty, or
representation on Franchisor's behalf, or to incur any debt or other obligation
in Franchisor's name; and that Franchisor shall in no event assume liability for
or be deemed liable hereunder for any such action; nor shall Franchisor be
deemed liable by reason of any act or omission of Developer in the conduct of
its business pursuant to this Agreement, or for any claim or judgment arising
therefrom
D. (1) Developer and each of Developer's Principals will, at all
times, indemnify and hold harmless to the fullest extent permitted by law
Franchisor, its corporate affiliates, successors and assigns and the respective
directors, officers, employees, agents and representatives of each (Franchisor
and all others hereinafter collectively "Indemnitees") from all "losses and
expenses" (as defined below) incurred in connection with any action, suit,
proceeding, claim, demand, investigation or inquiry (formal or informal), or any
settlement thereof (whether or not a formal proceeding or action has been
instituted) which arises out of or is based upon any of the following, provided,
however, such indemnity shall not extend to any liability, claim, demand,
damages or action to the extent that the liability is determined to have been
caused by Franchisor or by a product which Developer is required to purchase
from Franchisor and to the extent that the product so purchased has not been
adulterated or modified by Developer and has been used in the manner prescribed
by Franchisor, if any:
(a) The infringement, alleged infringement,
or any other violation or alleged violation by Developer or any of Developer's
Principals of any patent, xxxx or copyright or other proprietary right owned or
controlled by third parties.
(b) The violation, breach or asserted
violation or breach by Developer or any of Developer's Principals of any
contract, federal, state or local law, regulation, ruling, standard or directive
or any industry standard.
(c) Libel, slander or any other form of
defamation of Developer or the System, by Developer or any of Developer's
Principals.
(d) The violation or breach by Developer or
any of Developer's
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20
Principals of any warranty, representation, agreement or obligation in this
Agreement.
(e) Acts, errors or omissions of Developer or
any of its agents, servants, employees, contractors, partners, affiliates or
representatives.
(2) Developer and each of Developer's Principals
agrees to give Franchisor notice of any such action, suit, proceeding, claim,
demand, inquiry or investigation. At the expense and risk of Developer and each
of Developer's Principals, Franchisor may elect to assume (but under no
circumstance is obligated to undertake), the defense and/or settlement of any
such action, suit, proceeding, claims, demand, inquiry or investigation. Such an
undertaking by Franchisor shall, in no manner or form, diminish the obligation
of Developer and each of Developer's Principals to indemnify Franchisor and to
hold it harmless.
(3) In order to protect persons or property, or
its reputation or goodwill, or the reputation or goodwill of others, Franchisor
may, at any time and without notice, as it, in its judgment deems appropriate
consent or agree to settlements or take such other remedial or corrective action
as it deems expedient with respect to the action, suit, proceeding, claim,
demand, inquiry or investigation if, in Franchisor's sole judgment, there are
reasonable grounds to believe that:
(a) any of the acts or circumstances
enumerated in Subsection 11.D(1) above have occurred; or
(b) any act, error, or omission of Developer
or any of Developer's Principals may result directly or indirectly in damage,
injury or harm to any person or any property.
(a) All losses and expenses incurred under
this Section shall be chargeable to and paid by Developer or any of Developer's
Principals pursuant to its obligations of indemnity under this Section,
regardless of any actions, activity or defense undertaken by Franchisor or the
subsequent success or failure of such actions, activity or defense.
(b) As used in this Section, the phrase
"losses and expenses" shall include, without limitation, all losses,
compensatory, exemplary or punitive damages, fines, charges, costs, expenses,
lost profits, attorneys' fees, court costs, settlement amounts, judgments,
compensation for damages to the Franchisor's reputation and goodwill, costs of
or resulting from delays, financing, costs of advertising material and media
time/space, and costs of changing, substituting or replacing the same, and any
and all expenses of recall, refunds, compensation, public notices and other such
amounts incurred in connection with the matters described.
(5) Indemnitees do not assume any liability
whatsoever for acts, errors, or omissions of those with whom Developer or any of
Developer's Principals may contract, regardless of the purpose. Developer and
each of Developer's Principals shall hold harmless and indemnify Indemnitees for
all losses and expenses which may arise out of any acts, errors or omissions of
"Midwest"
21
these third parties.
(6) Under no circumstances shall Indemnitees be
required or obligated to seek recovery from third parties or otherwise mitigate
their losses in order to maintain a claim against Developer or any of
Developer's Principals. Developer and each of Developer's Principals agrees that
the failure to pursue such recovery or mitigate loss will in no way reduce the
amounts recoverable by Indemnitees from Developer or any of Developer's
Principals.
(7) Notwithstanding anything in this Section 11 to
the contrary, the obligation to indemnify shall not extend to (i) losses
resulting from a breach of this Agreement by Franchisor, or the willful conduct
or negligent act or omission of Franchisor; or (ii) to the extent such loss is
covered by insurance benefiting Franchisor.
12. APPROVALS, WAIVERS AND REMEDIES
-------------------------------
A. Whenever this Agreement requires the approval or consent of
Franchisor, Developer shall make a timely written request to Franchisor for such
approval or consent.
B. Franchisor makes no warranties or guarantees upon which
Developer may rely and assumes no liability or obligation to Developer or any
third party to which it would not otherwise be subject, by providing any waiver,
approval, advice, consent, or services to Developer in connection with this
Agreement, or by reason of any neglect, delay or denial of any request therefor.
C. No failure of Franchisor to exercise any power reserved to it
by this Agreement, or to insist upon strict compliance by Developer or
Developer's Principals with any obligation or condition hereunder, and no custom
or practice of the parties at variance with the terms hereof, shall constitute a
waiver or estoppel of Franchisor's right to demand exact compliance with any of
the terms herein and Developer and each of Developer's Principals warrants and
undertakes that it shall not rely on such failure, custom or practice. Waiver by
Franchisor of any particular default by Developer or any of Developer's
Principals shall not affect or impair Franchisor's rights with respect to any
subsequent default of the same, similar or different nature, nor shall delay,
forbearance, or omission of Franchisor to exercise any power or right arising
out of any breach or default by its other developers or by Developer or any of
Developer's Principals of any of the terms, provisions, or covenants hereof,
affect or impair Franchisor's right to exercise the same, nor shall such
constitute a waiver by Franchisor of any right hereunder, or the right to
declare any subsequent breach or default and to terminate this Agreement prior
to the expiration of its term. Subsequent acceptance by Franchisor of any
payments due to it hereunder shall not be deemed to be a waiver by Franchisor of
any preceding breach by Developer of any terms, covenants or conditions of this
Agreement. The provisions of this Subsection 12.C. shall apply mutatis mutandis.
D. All rights and remedies of the parties hereto shall be
cumulative and not alternative, in addition to and not exclusive of any other
rights or remedies which are provided for herein or which may be available at
law or in equity in case of any breach, failure or default or threatened breach,
failure or default of any term, provision or condition of this Agreement. The
rights and
22
remedies of the parties hereto shall be continuing and shall not be exhausted by
any one or more uses thereof, and may be exercised at any time or from time to
time as often as may be expedient; and any option or election to enforce any
such right or remedy may be exercised or taken at any time and from time to
time. The expiration of earlier termination of this Agreement shall not
discharge or release Franchisor or Developer from any liability or obligation
then accrued, or any liability or obligation continuing beyond, or arising out
of, the expiration or earlier termination of this Agreement.
E. Nothing herein contained 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.
13. SEVERABILITY AND CONSTRUCTION
-----------------------------
A. The term "Developer's Principals" as used in this Agreement
shall mean Main Street and Main Incorporated, a Delaware corporation.
B. 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 shall not impair the operation of or have any
other affect upon such other portions, sections, parts, terms and/or provisions
of this Agreement as may remain intelligible, and the latter will continue to be
given full force and effect and bind the parties hereto; and said invalid
portions, sections, parts, terms and/or provisions shall be deemed not to be a
part of this Agreement.
C. Developer and Developer's Principals expressly agree to be
bound by any promise or covenant imposing the maximum duty permitted by law
which is subsumed within the terms of any provision hereof, as though it were
separately articulated in and made a part of this Agreement, that may result
from striking from any of the provisions hereof any portion or portions which a
court may hold to be unreasonable and unenforceable in a final decision to which
Franchisor is a party, or from reducing the scope of any promise or covenant to
the extent required to comply with such a court order or to the extent which
Franchisor in its sole discretion may otherwise determine.
D. All captions in this Agreement are intended solely for the
convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provision hereof.
E. All references herein to the masculine, neuter, or singular
shall be construed to include the masculine, feminine, neuter, or plural, where
applicable; and all acknowledgments, promises, covenants, agreements and
obligations herein made or undertaken by Developer shall be deemed jointly and
severally undertaken by all those executing this Agreement on behalf of
Developer.
F. This Agreement may be executed in several parts, and each copy
so executed shall
"Midwest"
23
be deemed an original.
G. Except as expressly provided to the contrary herein, nothing
in this Agreement is intended, nor shall be deemed, to confer upon any person or
entity other than Developer, Franchisor, Franchisor's officers, directors, and
employees, and such of Developer's and Franchisor's respective successors and
assigns as may be contemplated (and, as to Developer, permitted) by Section 8
hereof, any rights or remedies under or by reason of this Agreement.
H. This Agreement will become effective only upon execution
hereof by the President or a vice president of Franchisor.
14. ENTIRE AGREEMENT
----------------
This Agreement, the documents referred to herein, and the
Exhibits hereto constitute the entire, full and complete agreement between
Franchisor and Developer concerning the subject matter hereof and shall
supersede all prior agreements, no other representations having induced
Developer to execute this Agreement. THERE ARE NO WARRANTIES, EXPRESS OR
IMPLIED, OF FAIR DEALING OR OTHERWISE, BETWEEN THE PARTIES OTHER THAN THOSE
EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT THOSE PERMITTED TO BE MADE
UNILATERALLY BY FRANCHISOR HEREUNDER, NO AMENDMENT, CHANGE OR VARIANCE FROM THIS
AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED TO BY THE
PARTIES AND EXECUTED IN WRITING.
15. APPLICABLE LAW
--------------
A. DEVELOPER AND DEVELOPER'S PRINCIPALS ACKNOWLEDGE THAT
FRANCHISOR MAY GRANT NUMEROUS DEVELOPMENT RIGHTS THROUGHOUT THE UNITED STATES ON
TERMS AND CONDITIONS SIMILAR TO THOSE SET FORTH IN THIS AGREEMENT, AND THAT IT
IS OF MUTUAL BENEFIT TO DEVELOPER AND DEVELOPER'S PRINCIPALS AND TO FRANCHISOR
THAT THESE TERMS AND CONDITIONS BE UNIFORMLY INTERPRETED. THEREFORE, THE PARTIES
AGREE THAT TO THE EXTENT THAT THE LAW OF THE STATE OF TEXAS DOES NOT CONFLICT
WITH LOCAL FRANCHISE INVESTMENT STATUTES, RULES AND REGULATIONS, TEXAS LAW SHALL
APPLY TO THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT AND SHALL GOVERN
ALL QUESTIONS WHICH ARISE WITH REFERENCE HERETO. NOTWITHSTANDING THE ABOVE, THE
PARTIES RECOGNIZE THAT THE STATE IN WHICH A POST-TERMINATION OR POST-EXPIRATION
COVENANT AGAINST COMPETITION WILL BE ENFORCED HAS THE SIGNIFICANT PUBLIC POLICY
INTEREST: AND, THEREFORE, WITH RESPECT TO ANY ACTION REGARDING SUCH COVENANTS
CONTAINED IN THIS AGREEMENT, THE LAW OF THE STATE IN WHICH THE COVENANT WOULD BE
ENFORCED SHALL APPLY.
"Midwest"
24
B. THE PARTIES AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PERFORMANCE THEREOF WHICH
CANNOT BE AMICABLY SETTLED, EXCEPT AS OTHERWISE PROVIDED HEREIN, SHALL BE
RESOLVED BY A PROCEEDING IN A COURT IN DALLAS COUNTY, TEXAS, AND DEVELOPER AND
DEVELOPER'S PRINCIPALS EACH IRREVOCABLY ACCEPT THE JURISDICTION OF THE COURTS OF
THE STATE OF TEXAS AND THE FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS FOR
SUCH CLAIMS, CONTROVERSIES OR DISPUTES; PROVIDED, HOWEVER, WITH RESPECT TO ANY
ACTION WHICH INCLUDES INJUNCTIVE RELIEF, FRANCHISOR MAY BRING SUCH ACTION IN ANY
STATE WHICH HAS JURISDICTION.
C. The parties agree that service of process in any proceeding
arising out of or relating to this Agreement or the performance thereof may be
made as to Developer and Developer's Principals by serving a person of suitable
age and discretion (such as the person in charge of the office) at the address
of Developer specified in this Agreement and as to Franchisor, by serving the
President or a vice president of Franchisor at the address of Franchisor or by
serving Franchisor's registered agent.
"Midwest"
25
16. ACKNOWLEDGMENTS
---------------
A. Developer acknowledges that it has conducted an independent
investigation of the business contemplated by this Agreement, and recognizes
that it involves business risks and that the success of the venture is largely
dependent upon the business abilities of Developer. FRANCHISOR EXPRESSLY
DISCLAIMS THE MAKING OF, AND DEVELOPER ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR
RELIED UPON, ANY WARRANTY OR GUARANTY EXPRESS OR IMPLIED, AS TO THE POTENTIAL
VOLUME, PROFITS, OR SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED BY THIS
AGREEMENT.
B. Developer acknowledges that Franchisor has made no
representations about the development rights granted herein that are contrary to
the terms of this Agreement or the documents referred to herein and Exhibits
attached hereto, and further represents to Franchisor, as an inducement to its
entry into this Agreement, that Developer has made no misrepresentations in
obtaining the development rights granted herein.
C. Developer acknowledges that it has received, read and
understood this Agreement, the documents referred to herein and the Exhibits
attached hereto and that Franchisor has accorded Developer ample time and
opportunity to consult with advisors of Developer's own choosing about the
potential benefits and risks of entering into this Agreement.
D. Developer acknowledges that it received a complete copy of
this Agreement, the documents referred to herein and the Exhibits attached
hereto, at least five (5) business days prior to the date on which this
Agreement was executed. Developer further acknowledges that it has received the
disclosure document required by the Trade Regulation Rule of the Federal Trade
Commission entitled "Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures" at least ten (10) business days
prior to the date on which this Agreement was executed.
17. RESTATED AGREEMENT
------------------
This Development Agreement amends and restates that certain
Development Agreement dated June 26, 1989, as Amended and Restated April 17,
1995
"Midwest"
26
IN WITNESS WHEREOF, the parties hereto have duly executed,
sealed, and delivered this Agreement on the day and year first above written.
ATTEST: TGI FRIDAY'S INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
MAIN ST. MIDWEST, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Main Street and Main Incorporated acknowledges and agrees as
follows:
(1) it has read the terms and conditions of this Agreement;
(2) it is a "Developer's Principals" as described in Subsection
13.A of this Agreement; and
(3) it is bound as a Developer's Principal as set forth in this
Agreement and is obligated to perform thereunder.
Developer's Principal
MAIN STREET AND MAIN INCORPORATED
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
"Midwest"
27
EXHIBIT A
---------
THE TERRITORY
-------------
(1) The following counties in the State of Kansas:
Xxxxxxxx Xxxxxxx
Atchison Leavenworth
Doniphan Xxxx
Xxxxxxx Miami
Franklin Wyandotte
(2) The following counties in the State of Nebraska:
Xxxx Otoe
Xxxxxx Pawnee
Xxxx Xxxxxxxxxx
Colfax Sarpy
Cuming Xxxxxxxx
Dodge Xxxxxx
Xxxxxxx Washington
Xxxxxxx
Nemaha
(3) The following counties in the State of Missouri:
Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxx Lafayette
Xxxx Xxxx
Xxxx Xxxxxxxxxx
Xxxxxxx Xxxxxx
Daviess Platte
DeKalb Xxx
Xxxxxx Saline
