CEC ENTERTAINMENT, INC.
DEVELOPMENT AGREEMENT
____________________________________________
[CITY AND STATE]
0000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
TABLE OF CONTENTS
RECITALS.......................................................................1
1. DEFINITIONS...........................................................1
2. GRANT OF RIGHTS.......................................................4
2.1 Grant.................................................................4
2.2 Exclusivity...........................................................4
2.3 Right of First Refusal................................................4
2.4 Limitation of Rights..................................................4
3. FEES..................................................................5
3.1 Development Fee.......................................................5
3.2 Franchise Fees........................................................5
3.3 Payment and Taxes.....................................................6
4. DEVELOPMENT SCHEDULE..................................................6
4.1 Development Schedule..................................................6
4.2 Ownership Interest....................................................6
4.3 Site Location and Approval............................................6
4.4 Operational Date......................................................6
4.5 Extensions............................................................7
5. REPRESENTATIONS, WARRANTIES AND COVENANTS.............................7
5.1 Representations, Warranties and Covenants of Developer.
If Developer is not an individual.....................................7
5.1.1 Due Incorporation.....................................................7
5.1.2 Authorization.........................................................7
5.1.3 Exclusivity...........................................................7
5.1.4 Execution and Performance.............................................7
5.1.5 Corporate Documents...................................................7
5.1.6 Ownership Interests...................................................7
5.1.7 Stop Transfer Instructions............................................8
5.2 Financial Statements..................................................8
5.3 Developer's Principals................................................8
5.4. Guaranty..............................................................8
5.5 Non-Competition during Term of Agreement..............................8
5.6 Non-Competition after Termination or Non-renewal of Agreement.........9
5.8 Additional Covenants.................................................10
6. PROPRIETARY INFORMATION..............................................10
6.1 Confidential Information.............................................10
6.1.1 Confidentiality Agreements...........................................10
6.1.2 Improvements.........................................................10
6.2 Proprietary Marks....................................................10
7. TRANSFER OF INTEREST.................................................10
7.1 Transfer by Franchisor...............................................10
7.2. Transfer by Developer................................................11
8. INSURANCE AND INDEMNITY..............................................14
8.1 Insurance............................................................14
8.2 Indemnitees..........................................................14
8.2.1 Indemnification......................................................14
8.2.2. Notice and Counsel...................................................15
8.2.3 Settlement and Remedial Actions......................................15
8.2.4 Expenses.............................................................15
8.2.5 Third Party Recovery.................................................15
8.2.6 Survival.............................................................16
9. TERM AND TERMINATION.................................................16
9.1 Term.................................................................16
9.2 Automatic Termination................................................16
9.3 Termination upon Notice..............................................17
10. REMEDIES.............................................................18
10.1 Remedies.............................................................18
10.1.1 Reduction of Exclusivity.............................................18
10.1.2 Cure.................................................................18
10.1.3 Specific Enforcement.................................................18
11. DISPUTE RESOLUTION...................................................18
11.1 Mediation............................................................18
11.2 Applicable Law.......................................................19
11.3 Jurisdiction and Venue...............................................19
11.4 Mutual Benefit.......................................................19
12. MISCELLANEOUS........................................................19
12.1 Independent Contractors..............................................19
12.2 Entire Agreement.....................................................19
12.3 JUDGMENT; DISCRETION.................................................20
12.4 No Waiver............................................................20
12.5 Severability.........................................................20
12.6 Notice...............................................................21
12.7 Counterparts.........................................................21
12.8 Headings.............................................................21
12.9 Further Assurances...................................................21
12.10 Compliance with Laws.................................................21
13. ACKNOWLEDGMENTS......................................................21
13.1 Independent Investigation............................................21
13.2 Opportunity to Assess Risks..........................................22
13.3 Receipt of Disclosure Document.......................................22
13.4 No Extraneous Promises...............................................22
13.5 No Extraneous Inducements............................................22
13.6 Commercial Relationship..............................................22
13.7 Compliance with Anti-Corruption and Anti-Money Laundering Laws.......22
13.8. No Claims............................................................23
SCHEDULE 1.8 Statement of Ownership Interests and Developer's Principals...26
ATTACHMENT A Franchise Agreement..........................................A-1
ATTACHMENT B Agreement and Guaranty of Developer's Principals.............B-1
ATTACHMENT C Employee Confidentiality and Non-Competition Agreement.......C-1
ATTACHMENT D GENERAL RELEASE..............................................D-1
CEC ENTERTAINMENT, INC.
DEVELOPMENT AGREEMENT
This Development Agreement is executed and entered into as of this ___ day
of ________, 20__, by and between CEC ENTERTAINMENT, INC., a Kansas corporation
(as Franchisor), and ________________, a ________________ corporation (as
Developer).
RECITALS
1. Franchisor has developed and is the owner of the System;
2. Franchisor has developed and is the owner of, or licensee with rights to
sublicense, certain Animated Entertainment and Proprietary Marks which are
utilized in connection with and identify the System; and
3. Developer desires to obtain from Franchisor and Franchisor desires to grant
to Developer certain rights to use the System, the Animated Entertainment and
the Proprietary Marks to develop and establish Franchised Restaurants in the
Territory.
NOW THEREFORE, Franchisor and Developer in consideration of the undertakings and
commitments set forth herein, agree as follows:
1. DEFINITIONS
As used in this Agreement and the above Recitals, the following capitalized
terms shall have the meanings attributed to them in this Section:
1.1 "Action" means any cause of action, suit, proceeding, claim, demand,
investigation or inquiry (whether a formal proceeding or otherwise) with respect
to which Developer's indemnity applies.
1.2 "Agreement" means this Development Agreement and all attachments.
1.3 "Animated Entertainment" means the computer hardware and software, artistic
designs, scripts and musical scores, staging and lighting techniques and
configurations, plans, manuals and specifications, manufacturing know-how and
other intellectual property relating to video display entertainment and to three
dimensional computer controlled animated characters, including present and
future improvements, patents, trademarks, copyrights and other intellectual and
artistic property.
1.4 "Change in Control" means a Transfer of an Equity Interest in Developer
which, directly, indirectly, or combined with prior Transfers, causes a change
in the number of Persons which can vote more than fifty percent (50%) of the
total Equity Interest in Developer.
1.5 "Competing Business" means a business which operates a restaurant or food
service outlet in combination with family entertainment, including without
limitation, live entertainment and entertainment in the form of video games,
video displays or computer controlled animated characters.
1.6 "Confidential Information" means the terms of the Development Agreement and
Franchise Agreement and any amendments thereto, the components of the System,
the Animated Entertainment, manuals, written directives and all drawings,
equipment, recipes, and all other information know-how, techniques, materials
and data imparted or made available by Franchisor which is (i) designated as
confidential, (ii) known by Developer to be considered confidential by
Franchisor or (iii) by its nature inherently or reasonably considered
confidential.
1.7 "Developer" means ________________.
1.8 "Developer's Principals" means Developer's spouse, if Developer is an
individual, all officers and directors of Developer and all holders of an
ownership interest in Developer and of any entity directly or indirectly
controlling Developer, all as listed on Schedule 1.8 attached hereto.
1.9 "Development Schedule" means the schedule pursuant to which the Developer
will establish Franchised Restaurants as set forth in Section 4.
1.10 "Equity Interest" means a direct or indirect ownership interest in the
capital stock of, partnership or membership interest in, or other equity or
ownership interest in Developer (including the right to vote) any type of legal
entity.
1.11 "Execution Date" means the date upon which the Agreement is deemed duly
executed by Developer and Franchisor, as indicated on the first page of this
Agreement.
1.12 "Franchise Agreement" means the then-current form of franchise agreement
approved by Franchisor and to be executed with franchisees in accordance with
this Agreement, the current form of which is attached as Attachment "A."
1.13 "Franchised Restaurant" means a Restaurant opened pursuant to the
Development Schedule and operated (i) at a Site approved by Franchisor pursuant
to this Agreement and (ii) pursuant to a duly executed Franchise Agreement.
1.14 "Franchisee" means any person or legal entity approved by Franchisor to
enter into a Franchise Agreement and to establish a Franchised Restaurant.
1.15 "Franchisor" means CEC Entertainment, Inc. or any person or legal entity to
which CEC Entertainment, Inc. assigns or otherwise transfers its rights and
obligations contained in this Agreement.
1.16 "Indemnitees" means Franchisor and is subsidiaries and affiliates, and
directors, officers, employees, shareholders, affiliates, successors and
assigns.
1.17 "Losses and Expenses" means all losses, compensatory, exemplary or punitive
damages, fines, penalties, charges, costs, expenses, the lost profits,
assessments and fees (including reasonable attorneys', experts', accountants'
and consultants' fees); interest, court costs, settlement or judgment amounts,
compensation for damages to Franchisor's reputation and goodwill, costs of or
resulting from delays, financing costs, 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
similar amounts incurred, charged against or suffered by the Indemnitees in
connection with any Action.
1.18 "Minority Interest" means a direct or indirect ownership interest of less
than five percent (5%) of the capital stock of, partnership interest in, or
other equity interest in (including the right to vote) any type of legal entity.
1.19 "Operational" used in reference to a Franchised Restaurant, means a
Franchised Restaurant that is fully constructed and finished out as approved by
Franchisor and is legally permitted to render its services to the general public
pursuant to a duly executed Franchise Agreement.
1.20 "Person" means an individual, corporation, limited liability company,
partnership, association, joint stock company, trust or trustee thereof, estate
or executor thereof, unincorporated organization or joint venture, court or
governmental unit or any agency or subdivision thereof, or any other legally
recognizable entity.
1.21 "Proprietary Marks" means the trademarks, trade names, service marks,
logos, emblems and other indicia of origin as designated from time to time by
Franchisor, which may be owned by Franchisor or licensed to Franchisor with
sublicensing rights, including, but not limited to, the marks: "Xxxxx X. Cheese"
and "Xxxxx X. Cheese's."
1.22 "Restaurant" means a family-oriented pizza restaurant operated utilizing
the System, the Proprietary Marks and the Animated Entertainment, either in
accordance with the terms and conditions of a franchise agreement or by
Franchisor.
1.23 "Site" means the location for the construction and operation of a
Franchised Restaurant which has been approved as per Section 4 of this
Agreement.
1.24 "Sky Tubes" means components configured to create sequences of group/social
and independent play, using tubes, windows, entries, climbs, crawls, play
stations, passageways, and slides.
1.25 "System" means the distinctive system developed and owned by Franchisor for
the establishment, development, and operation of family-oriented pizza
restaurants, the distinguishing characteristics of which include without
limitation, Animated Entertainment, separate areas with a variety of rides,
amusement games and other attractions, characteristic decorations, furnishings
and materials, specially-designed equipment and equipment layouts, trade secret
food products and other special recipes, menus and food and beverage
designations, food and beverage preparation and service procedures and
techniques, operating procedures for sanitation and maintenance, methods and
techniques for inventory and cost controls, record keeping and reporting,
personnel training and management, and advertising and promotional programs,
cornerstones of operation, and operational policies, all of which may be
changed, improved or further developed by Franchisor from time to time.
1.26 "Territory" means ________________________________ in which the Developer
shall develop the System in accordance with the terms and conditions of this
Agreement.
1.27 "Transfer" means the sale, assignment, conveyance, pledge, mortgage or
other encumbrance, whether direct or indirect, in whole or in part, or in one or
a series of related transactions or occurrences, of (i) this Agreement, (ii) any
Franchise Agreement between Franchisor and Developer, (iii) any Equity Interests
in Developer, or (iv) in the assets of Developer, beyond transfer necessary in
the ordinary course of business.
2. GRANT OF RIGHTS
2.1 Grant. Subject to the terms, and conditions and limitations of this
Agreement, Franchisor hereby grants to Developer the right, and Developer
undertakes the obligation to establish and operate ________ (___) Franchised
Restaurants at duly approved Sites in the Territory and pursuant to duly
executed Franchise Agreements. Franchisor retains all other rights.
2.2 Exclusivity. For so long as Developer is in compliance with this Agreement,
Franchisor will not, without Developer's prior written consent, establish or
operate, or license anyone other than Developer to establish or operate a
Restaurant, which is physically located in the Territory prior to the last date
specified in the Development Schedule.
2.3 Right of First Refusal. For a period of two (2) years after the successful
and timely completion of the Development Schedule, if Franchisor proposes to
establish any additional Restaurants which are physically located in the
Territory, Developer shall have the right to enter into a new Development
Agreement and/or Franchise Agreement to establish such additional Restaurants
under the terms and conditions of the then-current form of Development and/or
Franchise Agreements. If the Developer and Franchisor have not executed a new
Development and/or Franchise Agreement within a period of thirty (30) days after
Franchisor provides written notice to Developer of Franchisor's desire to
further develop the Territory, Franchisor will have the right, to the exclusion
of Developer, to further develop or establish additional Restaurants in the
Territory on its own or with others.
2.4 Limitation of Rights. Franchisor retains all rights not expressly granted
hereunder. Franchisor, its affiliates, and their respective franchisees and
licensees may, among other things, operate other types of facilities besides
Restaurants in the Territory, including facilities that are identified by some
or all of the Proprietary Marks. Franchisor therefore may (or may authorize a
third party to) conduct, among other things, the following activities:
(a) Advertise and promote sales of or by Restaurants, at any location,
including within the Territory;
(b) Offer and sell collateral and ancillary products and services, such as
pre-packaged food products, toys, games, clothing, and memorabilia, in the
Territory under the Proprietary Marks, even though those products and services
may be similar to items offered by the Franchised Restaurants;
(c) Offer and sell any products and services (regardless of similarity to
products and services sold in the Franchised Restaurants) under any names and
marks other than the Proprietary Marks; at any location, including within the
Territory;
(d) Establish and operate a Restaurant anywhere outside of the Territory,
regardless of proximity or financial impact to the Franchised Restaurants;
(e) Establish and operate any business other than a Restaurant (including
restaurants) anywhere inside or outside of the Territory, regardless of
proximity or financial impact to the Franchised Restaurants; and
(f) Operate one or more sites on the World-Wide Web portion of the Internet
that advertise Restaurants, allow customers and potential customers to make
reservations at Restaurants (including the Franchised Restaurants), sell any
product or service including pre-packaged food products, games, toys, clothing
or memorabilia, or permit other activities (whether or not similar), even though
the Web site is accessible to or viewable by persons in the Territory.
This Agreement is not a Franchise Agreement, and Developer shall have no
right to use, or to license to others in any manner, the Proprietary Marks, the
Animated Entertainment or the System by virtue hereof.
3. FEES
3.1 Development Fee. Upon the execution of this Agreement, Developer shall
deliver a nonrefundable development fee of ________________ and no/100 Dollars
($________) in consideration for the administrative and other expenses incurred
by Franchisor and for the development opportunities lost or deferred as a result
of Franchisor's entering into this Agreement with Developer. This development
fee is Ten Thousand and no/100 Dollars ($10,000.00) for each restaurant to be
developed. In addition, Developer will pay to Franchisor upon the execution of
this Agreement a non-refundable amount equal to Twelve Thousand Five Hundred and
no/100 Dollars ($12,500.00) multiplied by the number of Franchised Restaurants
(excluding the first Franchised Restaurant) to be opened and operated pursuant
to the Development Schedule in Section 4. This Twelve Thousand Five Hundred and
no/100 Dollars ($12,500.00) will be credited toward each franchise fee
(excluding the franchise fee for the first Franchise Agreement) to be paid to
Franchisor pursuant the terms of this Development Agreement and the Franchise
Agreements.
3.2 Franchise Fees . Upon the execution of this Agreement, Developer shall
deliver a non-refundable franchise fee of Fifty Thousand and no/100 Dollars
($50,000.00) for the first Franchise Agreement to be executed pursuant to the
Development Schedule. Such non-refundable fee, which shall be deemed earned by
Franchisor when received, is in consideration for administrative and other
expenses incurred by Franchisor and for the development opportunities lost or
deferred as a result of Franchisor's entering into this Agreement with
Developer. The Developer will deliver all future franchise fees upon the
execution of and in accordance with the terms (including franchise fee amounts)
and conditions of the respective Franchise Agreement.
3.3 Payment and Taxes. All payments made by Developer to Franchisor pursuant to
this Agreement will be in United States dollars and will be made free and clear
of any tax, deduction, offset or withholding of any kind. All taxes and
penalties on any payment made by Developer pursuant to this Agreement now or in
the future will be fully borne by Developer. In the event of any bona fide
dispute as to liability for taxes assessed or other indebtedness, Developer may
contest the validity or the amount of the tax or indebtedness in accordance with
procedures of the taxing authority or applicable law; however, in no event shall
Developer permit a tax sale or seizure by levy of execution or similar writ or
warrant, or attachment by a creditor, to occur against the premises of any
Franchised Restaurant, or any improvements thereon.
4. DEVELOPMENT SCHEDULE
4.1 Development Schedule. The Developer agrees to execute separate Franchise
Agreements and establish Franchised Restaurants at Sites in the Territory in
accordance with the following Development Schedule:
Execution Date Number of Franchised Number of Franchised Restaurants Total Number of
Restaurants Operated by operated by an Entity in which Franchised Restaurants
Developer Directly Developer has a Majority Equity
Interest
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
________________ _________________________ __________________________________ ________________________
4.2 Ownership Interest. Franchisor and Developer agree that the Developer shall
enter into a Franchise Agreement and establish and operate the Franchised
Restaurants either directly or by using subsidiaries in which it has a majority
Equity Interest.
4.3 Site Location and Approval. Developer agrees that prior to or within one
hundred and twenty (120) days after the execution of a Franchise Agreement, it
will locate or cause the franchisee under the Franchise Agreement in question to
locate a Site within the Territory for the establishment and operation of the
respective Franchised Restaurant. Within the same one hundred and twenty (120)
day period, Developer also agrees that it will cause the franchisee under the
respective Franchise Agreement to obtain the approval for such Site from the
Franchisor as per the terms and conditions of the respective Franchise
Agreement.
4.4 Operational Date. Developer agrees that, within a period of ________ (___)
days from the approval by Franchisor of the Site, it will cause the respective
Franchised Restaurant to be fully Operational.
4.5 Extensions. Developer shall at all times comply with the Development
Schedule. However, Franchisor, at its sole discretion and without obligation,
may grant a written extension or extensions to Developer for the period of time
that the Developer requests. In the event Franchisor grants an extension,
Developer agrees to pay Franchisor a non-refundable extension fee of Two
Thousand Five Hundred and No/100 Dollars ($2,500.00) for every thirty (30) day
period of the extension.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Representations, Warranties and Covenants of Developer. If Developer is not
an individual, then Developer and each of Developer's Principals represent,
warrant and covenant to Frachisor that:
5.1.1 Due Incorporation. If Developer is a corporation, limited liability
company, limited or general partnership, or other form of business entity, it is
duly formed and organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with all requisite power and authority
to enter into this Agreement and perform the obligations contained herein.
5.1.2 Authorization. The execution, delivery and performance by Developer
of this Agreement and all other agreements contemplated herein has been duly
authorized by all requisite actions on the part of Developer and no further
actions are necessary to make this Agreement or such other agreements valid and
binding upon it and enforceable against it in accordance with their respective
terms.
5.1.3 Exclusivity. Developer's corporate charter, written partnership or
limited liability company agreement, membership agreement or other governing
documents will at all times provide that Developer's activities are confined
exclusively to the development of the Franchised Restaurants unless otherwise
consented to in writing by Franchisor.
5.1.4 Execution and Performance. Neither the execution, delivery nor
performance by Developer of this Agreement or any other agreements contemplated
hereby will conflict with, or result in a breach of any term or provision of
Developer's charter, by-laws, articles of organization, or partnership agreement
and/or other governing documents and any amendments thereto, any indenture,
mortgage, deed of trust or other material contract or agreement to which
Developer is a party or by which it or any of its assets are bound, or breach
any order, writ, injunction or decree of any court, administrative agency or
governmental body.
5.1.5 Corporate Documents. Certified copies of Developer's charter,
by-laws, articles of organization, partnership agreement, membership agreement
and/or other governing documents and any amendments thereto, including board of
director's or partner's resolutions authorizing this Agreement have been
delivered to Franchisor. Any amendments or changes to such governing or charter
documents subsequent to the date of this Agreement, shall not be undertaken
without Franchisor's prior written consent.
5.1.6 Ownership Interests. All Equity Interests in Developer are accurately
and completely described in Schedule 1.8. Developer will maintain at all times a
current list of all owners of record and all beneficial owners of Equity
Interests in Developer. Developer will make such list available to Franchisor
upon request.
5.1.7 Stop Transfer Instructions. If Developer is a corporation, Developer
will maintain stop-transfer instructions against the transfer on Developer's
records of any of its equity securities and each stock certificate will have
conspicuously endorsed upon it a statement in a form satisfactory to
Franchisor's that it is held subject to all restrictions imposed upon
assignments by this Agreement; but the requirements of this Section will not
apply to the transfer of equity securities of a publicly-held corporation. If
Developer is a partnership or limited liability company, its written partnership
or limited liability company agreement will provide that ownership of an
interest in the partnership or limited liability company is held subject to all
restrictions imposed upon assignments by this Agreement.
If Developer is an individual, then Developer represents, warrants
and covenants that neither the execution, delivery nor performance by Developer
of this Agreement or any other agreements contemplated hereby conflicts with, or
results in a breach of any contract or agreement to which Developer is a party
or a breach of any order, writ, injunction or decree of any court,
administrative agency or governmental body.
5.2 Financial Statements. Developer and, at Franchisor's request, each of
Franchisee's Principals have provided Franchisor with your and their most recent
financial statements in the form and for the time periods specified by
Franchisor. The financial statements (i) present fairly Developer's financial
position and the financial position of each of Franchisee's Principals, as
applicable, at the dates indicated therein and, with respect to Franchisee, the
results of its operations and cash flow for the periods then ended; (ii) are
certified as true and correct by the Franchisee's Chief Financial Officer or
President, as applicable; and (iii) have been prepared in conformity with
generally accepted accounting principles in the United States, applied on a
consistent basis. No material liabilities, adverse claims, commitments or
obligations of any nature, whether accrued, unliquidated, absolute, contingent
or otherwise, exist as of the date of this Agreement which are not reflected as
liabilities on Developer's financial statements or those of Developer's
Principals.
5.3 Developer's Principals. Developer will notify Franchisor within ten (10)
days following the date that any person previously identified as Developer's
Principal ceases to qualify as such or that any new person succeeds to or
otherwise comes to occupy a position which would qualify such person as one of
Developer's Principals. That person will immediately execute all documents and
instruments (including, as applicable, this Agreement) required by Franchisor to
be executed by others in a comparable position; but if there is any conflict
between this provision and the transfer provisions of Section 7, the provisions
of Section 7 will control.
5.4. Guaranty. As an inducement and as a condition to Franchisor's execution and
acceptance of this Agreement, Developer's Principals will, jointly and
severally, guarantee the performance of Developer's obligations, covenants and
agreements under this Agreement pursuant to the terms and conditions of the
Agreement and Guaranty of Developer's Principals in the form of Attachment B to
this Agreement, and will otherwise bind themselves to the terms of this
Agreement as stated herein.
5.5 Non-Competition during Term of Agreement. In consideration of, among other
things, the disclosure to Developer of the System and the Confidential
Information, during the term of this Agreement, Developer and Developer's
Principals shall not, directly or indirectly:
(a) Divert or attempt to divert business of any Restaurant to any
competitor, or do or perform any other act injurious or prejudicial to the
goodwill associated with Franchisor's Proprietary Marks, the Animated
Entertainment and the System;
(b) Employ or seek to employ any person who is employed by Franchisor
or by any other franchisee or developer of Franchisor or entice such person to
leave such employment; and
(c) Except as provided for herein, own, maintain, engage in, or have
an Equity Interest in a Competing Business; provided that this provision shall
not apply to any Minority Interest collectively held by Developer or Developer's
Principals in any publicly-held corporation listed on a national stock exchange.
5.6 Non-Competition after Termination or Non-renewal of Agreement. In
consideration of, among other things, the disclosure to Developer of the System
and the Confidential Information, for a period of three (3) years after the
expiration or approved Transfer by Developer and/or Developer's Principals,
Developer and Developer's Principals (as applicable) shall not, directly or
indirectly:
(a) Divert or attempt to divert business of any Restaurant to any
competitor, or do or perform any other act injurious or prejudicial to the
goodwill associated with Franchisor's Proprietary Marks, the Animated
Entertainment and the System;
(b) Employ or seek to employ any person who is employed by Franchisor
or by any other franchisee or developer of Franchisor, or entice such person to
leave such employment; and
(c) Except as provided for herein, own, maintain, engage in, or have
an Equity Interest in a Competing Business which is located within the Territory
or within twenty five (25) miles from the outer boundaries of the Territory;
provided that this provision shall not apply to any Minority Interest
collectively held by Developer or Developer's Principals in any publicly-held
corporation.
5.7 Independent Covenants. Each of the covenants in Sections 5.5 and 5.6 will
be construed as independent of any other covenant or provision of this
Agreement.
(i) Developer and Developer's Principals understand and acknowledge
that Franchisor will have the right, in its sole discretion, to reduce the scope
of any covenant set forth in Sections 5.5 and 5.6, or any portion thereof,
without their consent, effective immediately upon notice to Developer; and
Developer and Developer's Principals agree that they will comply with any
covenant as so modified, which will be fully enforceable notwithstanding the
provisions of Section 12.2 hereof.
(ii) 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, will not constitute a defense to the enforcement by
Franchisor of the covenants in Sections 5.5 and 5.6.
(iii) Developer and each Developer's Principal acknowledges that the
covenants not to compete contained in Sections 5.5 and 5.6 are reasonable and
necessary to protect the business and goodwill of the System and to avoid
misappropriation or other unauthorized use of the System and Franchisor's other
trade secrets.
(iv) Developer and each Developer's Principal acknowledges and
confirms that Developer and the Developer's Principals possess the education,
training and experience necessary to earn a reasonable livelihood apart from
operating a Competing Business.
5.8 Additional Covenants. Developer shall require and obtain for the benefit of
Franchisor execution of covenants similar to those set forth in this Section
from any and all of its employees having access to materials or information
furnished or disclosed to Developer by Franchisor, including, which limitation,
all managers, assistant managers and director of operations.
6. PROPRIETARY INFORMATION
6.1 Confidential Information. Except expressly provided herein, Developer shall
have no right, title or interest in the Confidential Information. The Developer
and the Developer's Principals shall only communicate, disclose or use the
Confidential Information as expressly permitted herein or as required by law.
Developer and Developer's Principals shall disclose the Confidential Information
only to such of Developer's employees, agents, or independent contractors who
must have access to it in connection with their employment. The covenant in this
Section will survive the expiration, termination, or transfer of this Agreement
or any interest in this Agreement and will be perpetually binding upon Developer
and each of Developer's Principals.
6.1.1 Confidentiality Agreements. Developer shall cause all employees
having access to the Confidential Information to execute confidentiality
agreements substantially in the form of Attachment C stating that they will
preserve in confidence all Confidential Information. Neither Developer,
Developer's Principal's or their respective employees may at any time, without
Franchisor's prior written consent, copy, duplicate, record or otherwise
reproduce the Confidential Information, in whole or in part, nor otherwise make
the same available to any unauthorized person.
6.1.2 Improvements. If Developer makes any improvements (as determined by
Franchisor) to the Confidential Information or the System, Developer and the
Developer's Principals shall each execute an amendment to this Agreement
reflecting such improvements and Franchisor's exclusive ownership thereof. All
such improvements, which are hereby assigned to Franchisor, shall be considered
Confidential Information.
6.2 Proprietary Marks. Developer acknowledges Franchisor's exclusive ownership
of or right to sublicense the Proprietary Marks and shall neither directly or
indirectly infringe, contest or otherwise impair Franchisor's exclusive
ownership of, and/or license with respect to, the Proprietary Marks either
during or after termination or expiration of this Agreement.
7. TRANSFER OF INTEREST
7.1 Transfer by Franchisor. Franchisor shall have the right to transfer or
assign this Agreement, its rights to the Proprietary Marks, and all or any part
of its rights or obligations herein to any person or legal entity without the
consent of Developer or Developer's Principals. Upon such transfer by
Franchisor, any transferee or assignee of Franchisor shall become solely
responsible for all obligations of Franchisor under this Agreement from the date
of transfer or assignment. Without limiting the foregoing, Developer
acknowledges that Franchisor may sell its assets (including its rights in the
Proprietary Marks and the System) to a third party; may offer its securities
privately or publicly; may merge, acquire other legal entities or be acquired by
another legal entity; and may undertake a refinancing, recapitalization,
leveraged buy out or other economic or financial restructuring. With regard to
any or all of the above sales, assignments and dispositions, Developer expressly
and specifically waives any claims, demands, or damages against Franchisor or
its affiliates arising from or related to Franchisor's transfer of its rights in
this Agreement, the Proprietary Marks or the System to any other party. Nothing
contained in this Agreement will require Franchisor to remain in the business of
operating or licensing the operation of the Restaurants or other businesses or
to offer any services or products to Developer, whether or not bearing or not
bearing the Proprietary Marks, it Franchisor transfers or assigns its rights in
or obligations under this Agreement.
7.2. Transfer by Developer. Developer and Developer's Principals understand and
acknowledge that the rights and duties set forth in this Development Agreement
are personal to Developer and are granted, in part, in reliance upon the skill,
aptitude, business and financial capacity of Developer and Developer's
Principals and their intention of complying with its terms and conditions.
Therefore, if the Developer and/or Developer's Principals desire to Transfer any
interest to any individual or entity (including a trust), they must first obtain
the prior written approval of Franchisor. Any such attempted Transfer not
approved by Franchisor shall be null and void from its purported inception.
Prior to authorizing such Transfer, Franchisor may require, among other
things, satisfaction of any or all of the following:
(a) Developer shall be in full compliance with all of the terms and
conditions of this Agreement;
(b) Developer and/or any Developer's Principal shall remain liable for the
performance of its obligations contained in this Agreement through the date of
Transfer and shall execute all instruments reasonably requested by Developer to
evidence such liability;
(c) The transferee shall satisfy, in Franchisor's judgment, Franchisor's
then existing criteria for a developer including, without limitation: (i)
education; (ii) business skill, experience and aptitude; (iii) character and
reputation; and (iv) financial resources;
(d) The transferee and all owners of any record or beneficial interest in
the capital stock (or other interest) of transferee shall execute all
instruments (including a new development agreement and guaranty) reasonably
requested by Franchisor to evidence acceptance and assumption of all of the
terms and conditions of this Agreement. Such new development agreement may
contain terms materially different from this Agreement; and
(e) Developer pays a transfer fee equal to (i) one half (1/2) of the
development fee contained herein, if the Developer does not have a majority
Equity Interest (as reasonably determined by Franchisor) in the transferee or
(ii) an amount equal to the reasonable costs incurred by Franchisor in
connection with the Transfer among Developers principals, but in no event less
than One Thousand and no/100 Dollars ($1,000.00). Franchisee and Franchisee's
Principals (if applicable) must have executed a general release, in a form
satisfactory to Franchisor, of any and all claims against Franchisor, its
affiliates, and the officers, directors, members, shareholders, partners,
agents, representatives, independent contractors, servants and employees of each
of them, in their corporate and individual capacities, including, without
limitation, claims arising under this Agreement and any other agreement between
Franchisee or any of Franchisee's affiliates and Franchisor's or any of its
affiliates or under federal, state or local laws, rules, regulations or orders.
Franchisor's current form of general release is attached hereto as Attachment D.
7.3. Right of First Refusal. In the event that Developer and/or any of
Developer's Principals or any holder of an Equity Interest in Developer desire
to effectuate a Transfer, Franchisor shall have the right and option,
exercisable within thirty (30) days after Franchisor's receipt of all materials
and information described Section 7.3(a), (b), (c) and (e) to purchase the
interest proposed to be transferred in accordance with the following:
(a) Developer or the proposed transferee shall notify Franchisor in writing
of any bona fide proposed Transfer and set forth a complete description of all
terms and fees of the proposed Transfer in the manner prescribed by the
Franchisor, including the prospective transferee's name, address, financial
qualifications and previous five years business experience;
(b) Developer shall provide Franchisor with any additional information,
agreements, certifications or documents Franchisor requests for use in its
evaluation of whether to exercise its first refusal right.
(c) Upon receipt of the Franchisor's request, Developer or the proposed
transferee shall promptly provide Franchisor with access to any real or personal
property, documents or records relevant to the transaction and to the interest
which is the subject of the Transfer. Once Franchisor has received all materials
submitted by Developer or the proposed transferee and has reviewed all property,
records and documents it has requested, Franchisor shall notify Developer or the
proposed transferee of its decision to exercise its option to acquire the
interest being transferred, and the conditions, if any, under which it will
approve the proposed Transfer.
(d) If the Franchisor exercises its first refusal right, the transferor
shall transfer the interest to Franchisor or to its assignee pursuant to an
agreement to purchase which contains the material terms to which the transferor
and the proposed transferee had agreed. If the offer or proposed purchase
contract omitted any terms customarily addressed in a transfer of an interest of
the type which is the subject of the transaction, Franchisor may supply those
terms in the purchase agreement and related documents.
(e) If the proposed transferor wishes to make a Transfer, the transferor
shall provide Franchisor with a copy of any offer or agreement to purchase,
signed by the proposed transferee, together with copies of any documents
referenced in the offer or agreement. If all material terms of the proposed sale
are not described in the offer or agreement, Developer shall provide details of
all such terms in its submission to the Franchisor, accompanied by the proposed
transferee's written agreement to the terms.
(f) In the event the consideration, terms, and/or conditions offered by the
third party are such that Franchisor or its nominee may not reasonably be able
to furnish the same consideration, terms, and/or conditions, then Franchisor or
its nominee, as appropriate, may purchase the interest proposed to be
transferred for the reasonable equivalent in cash. If the parties cannot agree,
within a reasonable time, on the reasonable equivalent in cash of the
consideration, terms, and/or conditions offered by the third party, an
independent appraiser shall be designated by Franchisor, and such appraiser's
determination shall be binding.
7.4. Death or Disability. Within fifteen (15) days after the death or permanent
disability of Developer or any Developer's Principal, Developer or a
representative of Developer must notify Franchisor in writing. Any transfer upon
death or permanent disability will be subject to the same terms and conditions
as described in this Section for any inter vivos transfer.
Upon the death of Developer (if natural person) or any Developer's
Principal who is a natural person and who has an interest in this Agreement, the
Developer's business or in Developer, the executor, administrator, or other
person representative of the deceased will transfer the interest of the deceased
to a third party approved by Franchisor within twelve (12) months after the date
of death. If no personal representative is designated or appointed and no
probate proceedings are instituted with respect to the estate of the deceased,
then the distributee of the interest of the deceased must be approved by
Franchisor. If the distributee is not approved by Franchisor, then the
distributee will transfer the interest of the deceased to a third party approved
by Franchisor within twelve (12) months after the date of death of the deceased.
Upon the permanent disability of Developer (if a natural person) or any
Developer's Principal who is a natural person and who has an interest in this
Agreement, in Developer's business or in Developer, Franchisor may require the
interest to be transferred to a third party in accordance with the conditions
described in this Section 7 within six (6) months after notice to Developer. For
purposes of this Section 7.4, "permanent disability" means any physical,
emotional, or mental injury, illness, or incapacity that would prevent a person
from performing the obligations set forth in this Agreement or in the Guaranty
made part of this Agreement for at least ninety (90) consecutive days, and from
which condition recovery within ninety (90) days from the date of determination
of disability is unlikely. If the parties disagree as to whether a person is
permanently disabled, the existence of permanent disability will be determined
by a licensed practicing physician selected by Franchisor, upon examination of
the person or if the person refuses to submit to an examination, then (for the
purpose of this Section 7.4) the person automatically will be considered
permanently disabled as of the date of refusal. The costs of any examination
required by this Section 7.4 will be paid by Franchisor.
If an interest is not transferred upon death or permanent disability as
required in this Section 7.4 then the failure will constitute a material event
of default under this Agreement.
7.5. Public Offerings. Equity Interests in Developer and Developer's Principals
may be offered, only with the prior written consent of Franchisor, which consent
shall not be unreasonably withheld. Such approval will be subject to the
following:
(a) All registration materials required for such offering by federal or
state law shall be submitted to Franchisor for review prior to their being filed
with any government agency;
(b) No offering material (for either a public or private offering) shall
express or imply (by use of the Proprietary Marks or otherwise) that Franchisor
is participating in an underwriting, issuance or public offering of Developer,
Developer's Principals, or Franchisor securities. Franchisor may, at its option,
require such offering materials to contain a written statement prescribed by
Franchisor concerning the limitations described in the preceding sentence;
(c) Developer, Developer's Principals and the other participants in the
registration and offering must fully indemnify Franchisor in connection with the
offering;
(d) For each proposed public offering, other than offerings which are
exempt from registration, Developer shall pay to Franchisor a nonrefundable fee
of Ten Thousand and no/100 Dollars ($10,000.00) or such greater amount as is
necessary to reimburse Franchisor for its reasonable costs and expenses
associated with reviewing the proposed offering, including, without limitation,
legal and accounting fees;
(e) Franchisor's receipt of a legal opinion from counsel satisfactory to
Franchisor stating (a) that the offering materials and the conduct of the
securities offering comply in all material respects with the laws of the
applicable Territory Segment from which an offer of securities originates or
into which an offer of securities is directed, and (b) that neither the conduct
nor consummation of the securities offering will result in a violation of any
anti-terrorism or anti- money laundering laws; and
(f) Developer and Developer's Principals shall give Franchisor at least
sixty (60) days' prior written notice before the effective date of any offering
or other transaction covered by this Section 7.5.
8. INSURANCE AND INDEMNITY
8.1 Insurance. During the entire term of this Agreement, Developer shall obtain
and maintain insurance protecting Developer and the Indemnitees against any
demand or claim arising or occurring in connection with the operation of
Developer's business. Such policies shall: (i) be of the types and for the
minimum amounts of coverage indicated in Franchisor's operational policies; (ii)
contain a waiver of subrogation in favor of Franchisor; (iii) name the
Indemnitees as additional insureds; (iv) contain no provision which limits or
reduces coverage in the event of a claim by any one (1) or more of the
Indemnities; (v) provide that policy limits shall not be reduced, coverage
restricted, canceled, allowed to lapse or otherwise altered or such policy(ies)
amended without Franchisor's consent; and (vi) be obtained from reputable
insurance companies approved by Franchisor and authorized to do business in all
jurisdictions in which the Franchised Restaurants are, or are to be located.
Developer also acknowledges and agrees to:
(a) furnish Franchisor with evidence that Developer has obtained the
required insurance not less than fifteen (15) days after the Execution Date, and
each year afterwards, and at any other time a carrier or coverage is changed;
(b) increase the insurance coverage amounts in the amounts indicated by
Franchisor upon thirty (30) days prior written notice from Franchisor; and
(c) reimburse Franchisor for any insurance policies obtained by Franchisor
on behalf of Developer if Developer fails to obtain the insurance required by
this Section.
8.2 Indemnitees
8.2.1 Indemnification. Developer and Developer's Principals agree to and
hereby, jointly and severally, indemnify, defend (by counsel chosen by
Franchisor) and agree to hold harmless each Indemnitee from all Losses and
Expenses alleged, incurred or assessed in connection with:
(a) Developer's or any Developer's Principal's alleged infringement or
alleged violation of any trademark or other proprietary name, xxxx, or right
allegedly owned or controlled by a third party;
(b) The violation, breach or asserted violation or breach, by Developer or
any of Developer's Principals, of any federal, state or local law, regulation,
ruling, standard or directive or any industry standard;
(c) Libel, slander or any other form of defamation of Franchisor, the
System or any developer or franchisee operating under the System, by Developer
or by any of Developer's Principals;
(d) The violation or breach by Developer or any of Developer's Principals,
of any warranty, representation, agreement or obligation in this Agreement or in
any other agreement, between Developer, its subsidiaries and affiliates and
Franchisor, its subsidiaries and affiliates or the officers, directors,
shareholders, partners, agents, representatives, independent contractors and
employees thereof; and
(e) Acts, errors, or omissions of Developer, any of Developer's
subsidiaries or affiliates or any of Developer's Principals and the officers,
directors, shareholders, partners, agents, representatives, independent
contractors and employees of Developer and its subsidiaries and affiliates in
connection with the development activities contemplated under this Agreement or
the operation of a Franchised Restaurant.
8.2.2. Notice and Counsel. Developer and each of Developer's Principals
agree to give Franchisor immediate notice of any Action. Franchisor may engage,
at its expense, separate counsel to represent the Indemnitees in such Action
and/or elect to assume (but under no circumstance is obligated to undertake) the
defense and/or reasonable settlement of any Action. Franchisor's election to
settle shall not diminish Developer's and each of Developer's Principal's
obligation to defend, indemnify and hold the Indemnitees harmless from all
Losses and Expenses.
8.2.3 Settlement and Remedial Actions. 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 sole
judgment deems appropriate, consent or agree to settlements or take such other
remedial or corrective actions it deems expedient with respect to any Action if,
in Franchisor's sole judgment, there are reasonable grounds to believe that:
(a) any of the acts or circumstances enumerated in Section 8.2.1 ((a)
through (d)) above have occurred;
(b) any act, error, or omission as described in Section 8.2.1 (e) may
result directly or indirectly in damage, injury, or harm to any person or any
property.
8.2.4 Expenses. All Losses and Expenses incurred under this Section shall
be chargeable to and paid by Developer or any of Developer's Principals pursuant
to Developer's obligations of indemnity under this Section 8 regardless of any
actions, activity or defense undertaken by Franchisor or the subsequent success
or failure of such actions, activity, or defense.
8.2.5 Third Party Recovery. Under no circumstances shall the 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 agree that
the failure to pursue such recovery or mitigate loss will in no way reduce the
amounts recoverable from Developer or any of Developer's Principals by the
Indemnitees.
8.2.6 Third Party Liability. The Indemnitees do not assume any liability
whatsoever for acts, errors, or omissions of any third party with whom
Developer, any of the Developer's Principals, Developer's affiliates or any of
the officers, directors, shareholders, partners, agents, representatives,
independent contractors and employees of Developer, its Principals or their
affiliates may contract, regardless of the purpose. Developer and each of its
Principals will hold harmless and indemnify the Indemnitees for all Losses and
Expenses which may arise out of any acts, errors or omissions of Developer,
Developer's Principals, their respective affiliates, and the officers,
directors, shareholders, partners, agents, representatives, independent
contractors and employees of each and any such other third parties without
limitation and without regard to the cause or causes thereof or the strict
liability or negligence of Franchisor or any other party or parties arising in
connection therewith, and whether such negligence be sole, joint or concurrent,
or active or passive.
8.2.7 Survival. Developer and Developer's Principals expressly agree that
the terms of this Section 8 shall survive the termination, expiration or
transfer of this Agreement or any interest herein.
9. TERM AND TERMINATION
9.1 Term. Unless terminated as provided for herein, the term of this Agreement
and all rights granted hereunder shall commence on the Execution Date and expire
on the date on which Developer successfully and in a timely manner completes the
Development Schedule.
9.2 Automatic Termination. Developer will be in default under this Agreement,
and all rights granted by this Agreement will automatically terminate without
notice to Developer:
(a) If Developer becomes insolvent or makes a general assignment for the
benefit of creditors;
(b) If Developer files a voluntary petition under any section or chapter of
the federal bankruptcy law or under any similar law or statute of the United
States or any state, or admits in writing its inability to pay its debts when
due;
(c) If Developer is adjudicated bankrupt or insolvent in proceedings filed
against Developer under any section or chapter of the federal bankruptcy laws or
under any similar law or statute of the United States or any state; 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;
(d) If proceedings for a composition with creditors under any state or
federal law is instituted by or against Developer;
(e) If a final judgment against Developer in any amount Franchisor deems
material (but in no event more than $25,000) remains unsatisfied or of record
for 30 days or longer (unless an appeal bond is filed);
(f) If Developer is dissolved;
(g) If Developer, or any of Developer's Principals, makes any offer,
attempts to offer, solicits an offer, or takes steps to offer publicly any
interest in Developer in violation of Section 7.5 of this Agreement;
(h) If execution is levied against Developer's business or property in any
amount Franchisor deems material (but in no event more than $25,000);
(i) If suit to foreclose any lien or mortgage against the Developer's
business or any asset thereof in any amount Franchisor deems material (but in no
event more the $25,000) is instituted against Developer and not dismissed within
30 days; or
(j) If the real or personal property of Developer's business will be sold
after levy thereupon by any sheriff, marshal, or constable.
9.3 Termination upon Notice. This Agreement shall terminate immediately upon
notice from Franchisor to Developer and without providing Developer the right to
cure such default, if Developer:
(a) Or any of Developer's Principals is convicted of, or pleads nolo
conendere to a felony or any other crime or offense that is reasonably likely,
in the opinion of Franchisor, to adversely affect the System, the Proprietary
Marks, the Animated Entertainment, the goodwill associated therewith, or
Franchisor's interest therein;
(b) Or any of Developer's Principals copies or duplicates any Animated
Entertainment programs or materials or purports to transfer ownership or
possession of any Animated Entertainment components or materials without the
prior written consent of Franchisor;
(c) Or any of Developer's Principals, except as described in Section
9.2(g), violates the requirements for Transfers contained in Section 7;
(d) Or any of Developer's Principals, as applicable, fails to comply with
the representations and warranties in Sections 5 and 13 hereof;
(e) Or any of Developer's Principals discloses or divulges any Confidential
Information contrary to the provisions of this Agreement;
(f) Fails to maintain the insurance(s) required by Section 8;
(g) Or any of Developer's Principals fails to comply with the in-term
covenants in Section 5.5 or if Developer fails to obtain execution of the
covenants and related agreements required under Section 5.8 within thirty (30)
days after being requested to do so by Franchisor;
(h) Or Developer's Principals engage in any act, conduct, or practice which
Franchisor, in its sole judgment, deems to be deceptive, misleading unethical or
otherwise contrary to or in conflict with the reputation and image of the
System.
(i) Fails to meet is obligations under the Development Schedule, or fails
to comply with the terms and/or conditions of any Franchise Agreement between
Developer (or a person or entity affiliated with or controller by Developer) and
Frachisor after receiving written notice from Franchisor and fifteen (15) days,
within which to remedy such default; provided, however that if the applicable
Franchise Agreement provides for a shorter notice period or provides for
termination without notice and/or opportunity to cure, Franchisor may terminate
this Agreement upon Developer's receipt of written notice from Franchisor and,
if applicable, such shorter time as described in the Franchise Agreement.
9.4 Termination with Thirty Day Notice. Except as otherwise provided in this
Section 9, Developer shall have thirty (30) days after its receipt from
Franchisor of a written notice within which to remedy any default of the terms
of this Agreement and the attachments hereunder and provide evidence thereof to
Franchisor. If any such default is not cured within that time, this Agreement
shall terminate without further notice to Developer, effective immediately upon
the expiration of the thirty (30) day period.
10. REMEDIES
10.1 Remedies. Upon the occurrence of an uncured breach and subsequent
termination pursuant to Xxxxxxx 0, Xxxxxxxxxx may exercise one or more of the
following remedies or such other remedies as may be available at law or in
equity (each of the following remedies are nonexclusive and noncumulative):
10.1.1 Reduction of Exclusivity. Franchisor, at its sole discretion, can
completely terminate or, alternatively, reduce the number of Franchised
Restaurants that Developer was given the right to develop and establish pursuant
to the Development Schedule or terminate or reduce the territorial exclusivity
granted Developer pursuant to Section 2 in the understanding that this Agreement
will remain in effect and will be considered to be amended accordingly.
10.1.2 Cure. Franchisor, at Franchisor's discretion and without obligation,
may cure such breach at Developer's expense and, in connection therewith,
Developer (i) hereby grants to Franchisor all rights and powers necessary or
appropriate to accomplish such cure; (ii) shall indemnify and hold the
Indemnitees harmless from and against all costs, expenses (including reasonable
fees of counsel and other engaged professionals), liabilities, claims, demands
and causes of action (including actions of third parties) incurred by or alleged
against any Indemnitee in connection with Franchisor's cure; and (iii) shall
reimburse or pay such costs or damages within ten (10) days of receipt of
Franchisor's invoice therefor;
10.1.3 Specific Enforcement. Franchisor may, in addition to pursuing any
other remedies, specifically enforce Developer's and Developer's Principal's
obligations, covenants and agreements or obtain injunctive or other equitable
relief in connection with the violation or anticipated violation of such
obligations, covenants and agreements without the necessity of showing (i)
actual or threatened harm; (ii) the inadequacy of damages as a remedy; or (iii)
likelihood of success on the merits, and without being required to furnish bond
or other security. Nothing in this Agreement shall impair Franchisor's right to
obtain equitable relief.
11. DISPUTE RESOLUTION
11.1 Mediation. Except for infringement of Proprietary Marks, Animated
Entertainment or other violation of Franchisor's intellectual property rights,
regarding which Franchisor may apply for emergency, special, or injunctive
relief, both Franchisor and Developer will attempt in good faith to settle any
dispute related to the execution of or performance under this Agreement and the
operation of Developer's business. If Franchisor and Developer are unable to do
so, they hereby agree to submit to non-binding mediation prior to bringing such
claim, controversy or dispute in a court. The mediation shall be conducted
through either an individual mediator or a mediator appointed by a mediation
services organization or body, experienced in the mediation of food service
business disputes, as agreed upon by Franchisor and Developer. The costs and
expenses of mediation, including compensation of the mediator, shall be borne by
the parties equally. If the parties are unable to resolve the claim, controversy
or dispute within ninety (90) days after the mediator has been appointed, unless
such time period is extended by written agreement of the parties, then either
party may bring a legal proceeding under the following Sections, 11.2 through
11.4, to resolve such claim.
11.2 Applicable Law. Franchisor and Developer agree that this Agreement shall be
governed, construed and enforced in accordance with the laws of the State of
Texas without regard to its conflicts of laws provisions.
11.3 Jurisdiction and Venue. FRANCHISOR AND DEVELOPER HEREBY IRREVOCABLY SUBMIT
THEMSELVES TO THE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND
THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION.
DEVELOPER AND DEVELOPER'S PRINCIPALS FURTHER AGREE THAT VENUE FOR ANY PROCEEDING
RELATING TO OR ARISING OUT OF THIS AGREEMENT WILL BE DALLAS COUNTY, TEXAS,
PROVIDED HOWEVER THAT, WITH RESPECT TO ANY ACTION (I) FOR MONIES OWED, (II) FOR
INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF, (III) INVOLVING OWNERSHIP OR USE OF
THE PROPRIETARY MARKS OR THE ANIMATED ENTERTAINMENT, OR (IV) INVOLVING
POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO THE PREMISES OF ANY
FRANCHISED RESTAURANT, FRANCHISOR MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL
DISTRICT COURT WHICH HAS JURISDICTION.
11.4 Mutual Benefit. FRANCHISOR, DEVELOPER AND DEVELOPER'S PRINCIPALS
ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM
IN SECTIONS 11.2 AND 11.3 PROVIDES THE PARTIES WITH THE MUTUAL BENEFIT OF
UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS
AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS AGREEMENT. FRANCHISOR,
DEVELOPER AND DEVELOPER'S PRINCIPALS FURTHER ACKNOWLEDGE THE RECEIPT AND
SUFFICIENCY OF MUTUAL CONSIDERATION FOR THAT BENEFIT.
12. MISCELLANEOUS
12.1 Independent Contractors. In performing this Agreement, the parties
specifically agree that Franchisor and Developer's relationship is and always
will be solely that of independent contractors. Neither Franchisor or Developer
shall not represent itself or permit any of its employees, agents, servants, or
representatives to represent itself as an employee, agent, servant, or joint
venturer of the other. Neither party shall have no right to and shall not
attempt to enter into contracts or commitments in the name of or on behalf of
the other in any respect whatsoever.
12.2 Entire Agreement. This Agreement and the Attachments hereto constitute the
entire agreement between Franchisor, Developer and Developer's Principals
concerning the subject matter hereof. All prior agreements, discussions,
representations, warranties and covenants are merged herein. THERE ARE NO
WARRANTIES, REPRESENTATIONS, COVENANTS OR AGREEMENTS, EXPRESS OR IMPLIED,
BETWEEN THE PARTIES EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. Except
those permitted to be made unilaterally by Franchisor, any amendments or
modifications of this Agreement shall be in writing and executed by Franchisor
and Developer.
12.3 JUDGMENT; DISCRETION . DEVELOPER AND FRANCHISOR ACKNOWLEDGE THAT VARIOUS
PROVISIONS OF THIS AGREEMENT SPECIFY CERTAIN MATTERS THAT ARE WITHIN THE
DISCRETION OR JUDGMENT OF FRANCHISOR OR ARE OTHERWISE TO BE DETERMINED
UNILATERALLY BY FRANCHISOR. IF THE EXERCISE OF FRANCHISOR'S DISCRETION OR
JUDGMENT AS TO ANY SUCH MATTER IS SUBSEQUENTLY CHALLENGED, THE PARTIES TO THIS
AGREEMENT EXPRESSLY DIRECT THE TRIER OF FACT THAT FRANCHISOR'S RELIANCE ON A
BUSINESS REASON IN THE EXERCISE OF ITS DISCRETION OR JUDGMENT IS TO BE VIEWED AS
A REASONABLE AND PROPER EXERCISE OF SUCH DISCRETION OR JUDGMENT, WITHOUT REGARD
TO WHETHER OTHER REASONS FOR ITS DECISION MAY EXIST, WITHOUT REGARD TO WHETHER
THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME WEIGHT TO THE BUSINESS
REASONS, AND WITHOUT REGARD TO WHETHER SUCH DISCRETION OR JUDGMENT IS EXERCISED
IN THE BEST INTERESTS OF DEVELOPER.
12.4 No Waiver. Either party's failure to exercise any right or remedy or to
enforce any obligation, covenant or agreement herein shall not constitute a
waiver by, or estoppel of, such party's right to enforce strict compliance with
any such obligation, covenant or agreement. No custom or practice shall modify
or amend this Agreement. Either party's waiver of, or failure or inability to
enforce, any right or remedy shall not impair such party's rights or remedies
with respect to subsequent default of the same, similar or different nature.
Acceptance of any payment shall not waive any default.
12.5 Severability. If all or any portion of any covenant contained herein are
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 the covenant that imposes the maximum duty
permitted by law, as if the resulting covenant were separately stated in and
made a part of this Agreement. Notwithstanding the above, should any term,
covenant or provision hereof, or the application thereof, be determined by a
valid, final, non-appealable order to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the term or provision so
held to be invalid or unenforceable and all of the remaining terms, covenants or
provisions hereof shall continue in full force and effect without regard to the
invalid or unenforceable provision. In such event such term, covenant or
provision shall be deemed modified to impose the maximum duty permitted by law
and such term, covenant or provision shall be valid and enforceable in such
modified form as if separately stated in and made a part of this Agreement.
Notwithstanding the foregoing, if any term hereof is so determined to be invalid
or unenforceable and such determination adversely affects, in Franchisor's
absolute discretion, Franchisor's ability to preserve its rights in, or the
goodwill underlying, the Proprietary Marks, the Animated Entertainment, the
System and/or the Confidential Information, or materially effects Franchisor's
other rights hereunder or its ability to receive and enjoy the economic benefits
of this Agreement (including those provisions requiring the payment by Developer
of liquidated damages or interest on past due payments or amounts under the
indemnity provided by Developer) or to protect the System or the Xxxx (including
the covenants regarding non-competition and confidentiality), Franchisor may
terminate this Agreement immediately upon notice to Developer.
12.6 Notice. All notices required or desired to be given hereunder shall be in
writing and shall be sent by personal delivery, expedited delivery service,
return receipt requested or facsimile to the following addresses or such other
addresses as designated by Franchisor or Developer in writing pursuant to this
Section:
Notices to Franchisor: Director of Franchise
CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Tel. (972) 000- 0000
Fax. (972) 000- 0000
Notices to Developer: ____________________________
____________________________
____________________________
____________________________
Tel. (___) ___-_________
Fax. (___) ___-_________
Notices posted by personal delivery or given by facsimile shall be deemed
given upon receipt. Notice to Developer shall constitute notice to Developer's
Principals.
12.7 Counterparts. This Agreement may be executed in any number of counterparts
each of which when so executed shall be an original, but all of which together
shall constitute one (1) and the same instrument.
12.8 Headings. The section headings in this Agreement are for convenient
reference only and shall be given no substantive or interpretive effect.
12.9 Further Assurances. Franchisor and Developer shall execute and deliver any
and all additional papers, documents, and other assurances and shall do any and
all acts and things reasonably necessary in connection with the performance of
their obligations hereunder and to carry out the intent of the parties hereto.
12.10 Compliance with Laws. Developer agrees to comply at its sole expense with
all laws and regulations applicable to this Agreement and the operation of the
Franchised Restaurants.
13. ACKNOWLEDGMENTS
13.1 Independent Investigation. Developer acknowledges that it has conducted an
independent investigation of the business venture contemplated by this Agreement
and recognizes that the success of this business venture involves substantial
business risks and will largely depend upon the ability of Developer. Franchisor
expressly disclaims making, and Developer acknowledges that it has not received
or relied on, any warranty or guaranty, express or implied, as to the potential
volume, profits or success of the business venture contemplated by this
Agreement.
Developer's Principals' Initials _____________
13.2 Opportunity to Assess Risks. Developer acknowledges that Developer has
received, read, and understands this Agreement and the related Attachments and
agreements and that Franchisor has afforded Franchisee sufficient time and
opportunity to consult with advisors selected by Franchisee about the potential
benefits and risks entering into this Agreement.
Developer's Principals' Initials _____________
13.3 Receipt of Disclosure Document. Developer acknowledges that it received a
complete copy of this Agreement and all related Attachments and agreements at
least five business days before 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 business days before the date of on which
this Agreement was executed.
Developer's Principals' Initials _____________
13.4 No Extraneous Promises. Developer confirms and acknowledges that no written
or oral agreements, promises, commitments, undertakings or understandings were
made to or with Developer that are not expressly set forth in this Agreement and
any duly executed amendment or addendum attached to this Agreement.
Developer's Principals' Initials _____________
13.5 No Extraneous Inducements. Developer confirms and acknowledges that no
representation, warranty, guaranty or promise other than those expressly set
forth in this Agreement and in the disclosure described in Section 13.3 was made
by Franchisor or any other person to induce Developer to sign this Agreement.
Developer recognizes that neither Franchisor nor any other party can guarantee
Developer's business success or state the exact costs of operating Developer=s
Business, and that such success and costs will depend primarily upon Developer's
own efforts and business ability. Developer also recognizes that any new
business venture is speculative.
Developer's Principals' Initials _____________
13.6 Commercial Relationship. Developer acknowledges that this Agreement creates
an arm's length commercial relationship that cannot and will not be transformed
into a fiduciary or other "special" relationship by course of dealing, by any
special indulgences or benefits that Franchisor bestows on Developer, or by
inference from a party's conduct.
Developer's Principals' Initials _____________
13.7 Compliance with Anti-Corruption and Anti-Money Laundering Laws. Developer
represents covenants and warrants to Franchisor that, to the best of its
knowledge, neither it nor any owner or managerial employee thereof is
identified, either by name or an alias, pseudonym or nickname, on the lists of
"Specially Designated Nationals" or "Blocked Persons" maintained by the U.S.
Treasury Department's Office of Foreign Assets Control (texts currently
available at xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/). Further Developer
represents, covenants and warrants that, to the best of its knowledge, it has
not violated and agrees that it will not violate any law (in effect now or which
may become effective in the future) prohibiting corrupt business practices,
money laundering or the aid or support of persons or entities who conspire to
commit acts of terror against any person or government, including acts
prohibited by the U.S. Patriot Act, Public Law No. 107-56 (text currently
available at http.//xxx.xxxx.xxx/xxxxxxx/xxxxxxxxx/xx0000.xxxx), U.S. Executive
Order 13244 (text currently available at
xxxx://xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/ sanctions/terrorism.html), or similar
law. The foregoing constitute continuing representations and warranties, and
Developer shall notify Franchisor immediately in writing of the occurrence of
any event or the development of any circumstance that might render the foregoing
representation and warranty false, inaccurate or misleading.
Developer's Principals' Initials _____________
13.8. No Claims. Developer and Developer's Principals represent, covenant and
warrant to Franchisor that, to the best of their knowledge, neither they nor an
affiliate of either hold or are due, as applicable, any claims, debts,
liabilities, demands, obligations, expenses, actions, or causes of action of any
nature, character or description related to this Agreement against Franchisor,
and its affiliates and each of their respective successors, partners and the
partners, shareholders, representatives, assigns, agents, servants, employees,
independent contractors, officers and directors of each of them, in their
corporate and individual capacities.
Developer's Principals' Initials _____________
[Signatures appear on following pages]
IN WITNESS WHEREOF, the parties hereto have fully executed and delivered
this Agreement on the day and year first above written.
CEC ENTERTAINMENT, INC.
By: ________________________
Name: ________________________
Title: ________________________
STATE OF TEXAS
COUNTY OF DALLAS
Before me personally appeared ________________ who, after being duly sworn,
says that he is the ________________ of CEC Entertainment, Inc., a corporation,
organized and existing under the laws of Kansas, and that he has authority to
execute under oath and has so executed the above Agreement for and on behalf of
such corporation for such purposes therein contained.
WITNESS my hand and official seal this ___ day of ________, 20__.
(SEAL) ___________________________
Notary Public in and for
The State of ______________
DEVELOPER:
_________________________________
By: ________________________
Name: ________________________
Title: ________________________
STATE OF _____________
COUNTY OF ____________
Before me personally appeared ________________ who, after being duly sworn,
says that he is the ________________ of ________________, a (corporation)
(partnership), organized and existing under the laws of ________________, and
that he has authority to execute under oath and has so executed the above
Agreement for and on behalf of such (corporation) (partnership) for the purposes
therein contained.
WITNESS my hand and official seal this ___ day of ________, 20__.
_________________________________
(SEAL) Notary Public in and for
The State of ______________
SCHEDULE 1.8
STATEMENT OF OWNERSHIP INTERESTS
AND DEVELOPER'S PRINCIPALS
A. The following is a list of stockholders, partners or other investors in
Developer, including all investors who own or hold a direct or indirect interest
in Developer, and a description of the nature of their interest. All such
individuals and entities shall be deemed to be "Developer's Principals"
described in and designated pursuant to the Development Agreement, each of whom
will execute the Agreement and Guaranty of Developer's Principals:
Name Percentage of Ownership/Nature of Interest
B. The following is a list of all other of "Developer's Principals" not
described in "A", above, described in and designated pursuant to the Development
Agreement, each of whom will execute the Agreement and Guaranty of Developer's
Principals.
ATTACHMENT A
FRANCHISE AGREEMENT
ATTACHMENT B
AGREEMENT AND GUARANTY OF
DEVELOPER'S PRINCIPALS
Each of the undersigned acknowledges and agrees as follows:
(1) Each has read the terms and conditions of the Development Agreement and
acknowledges that the execution of this Guaranty and the undertakings of the
Developer's Principals in the Development Agreement are in partial consideration
for, and a condition to, the granting of the rights contracted in the
Development Agreement, and that the Franchisor would not have granted the rights
contained in the Development Agreement without the execution of this Guaranty
and the other undertakings by each of the undersigned;
(2) Each is included in the term "Developer's Principals";
(3) Each individually, jointly, and severally, makes all of the covenants,
representations, warranties and agreements of Developer's Principals set forth
in the Development Agreement and is obligated to perform thereunder; and
(4) Each individually, jointly and severally, unconditionally, and
irrevocably guarantees to Franchisor and its successors and assigns that all of
Developer's obligations under the Development Agreement will be punctually paid
and performed. Upon default by Developer's or upon notice from Franchisor, each
will immediately make each payment and perform each obligation required of
Developer's under the Development Agreement.
(5) Without affecting the obligations of any of Developer's Principals
under this Guaranty, Franchisor may, without notice to the Developer's
Principals, waive, renew, extend, modify, amend, or release any indebtedness or
obligation of Developer or settle, adjust, or compromise any claims that
Franchisor may have against Franchisee.
(6) Each of the Developer's Principals waives all demands and notices of
every kind with respect to the enforcement of this Guaranty, including notices
of presentment, demand for payment or performance by Developer, any default by
Developer or any guarantor, and any release of any guarantor or other security
for this Guaranty or the obligations of Developer.
(7) Franchisor may pursue its rights against any of Developer's Principals
without first exhausting its remedies against Developer and without joining any
other guarantor and no delay on the part of Franchisor in the exercise of any
right or remedy will operate as a waiver of the right or remedy, and no single
or partial exercise by Franchisor of any right or remedy will preclude the
further exercise of that or any other right or remedy.
(8) Upon receipt by Franchisor of notice of the death of any of Developer's
Principals, the estate of the deceased will be bound by the foregoing Guaranty,
but only for defaults and obligations under the Franchise Agreement existing at
the time of death, and in that event, the obligations of the remaining
Franchisee's Principals will continue in full force and effect.
ATTEST: DEVELOPER'S PRINCIPALS
Name: _________________________
_________________________
Name: _________________________
_________________________
Name: _________________________
_________________________
STATE OF ____________
COUNTY OF ___________
Before me personally appeared the following persons _______________________
who are known to me to be the persons who executed the foregoing Agreement and
Guaranty of Developer's Principals and each acknowledged the same to be his or
her free act and deed for the purpose s therein contained.
WITNESS my hand and official seal this ___ day of ________, 20__.
___________________________
(SEAL) Notary Public
ATTACHMENT C
EMPLOYEE CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This Confidentiality and Non-Competition Agreement ("Agreement") is made
and entered into this ____ day of ________________, 20__, by and between CEC
Entertainment, Inc., a Kansas corporation ("Franchisor"), ___________
("Developer"), and __________________ ("Covenantor").
Recitals
WHEREAS, Franchisor and Developer have entered into a Development Agreement
dated __________________ (the "Development Agreement"), pursuant to which
Franchisor has granted Developer the right to establish and operate a
family-oriented pizza restaurants (the "Franchised Restaurant") and to use the
Proprietary Marks and System solely in connection therewith; and
WHEREAS, Franchisor has provided, or will provide to Developer, a
confidential operations manual and such other written or printed material to
explain the operation of the System and aid in its use (the "Documentation") and
certain confidential information, knowledge, and know-how concerning the
construction and methods of operation of the Franchised Restaurants relating to
the System, including the Documentation, drawing, materials, equipment,
techniques, products, recipes, and other data of Franchisor ("Trade Secrets");
and
WHEREAS, the Proprietary Marks and Trade Secrets provide economic
advantages to Franchisor and the Trade Secrets are not generally known to, and
are not readily ascertainable by proper means by, Franchisor's competitors who
could obtain economic value from knowledge and use of the Trade Secrets; and
WHEREAS, Covenantor acknowledges that receipt of and the right to use the
Trade Secrets constitutes independent valuable consideration for the
representations, promises and covenants made by Covenantor herein;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, the parties agree as follows:
Confidentiality Agreement
1. Franchisor and Developer shall disclose to Covenantor some or all of the
Trade Secrets. All information and materials, including, without limitation, the
Documentation, which Franchisor provides to Developer and/or Covenantor shall be
deemed confidential Trade Secrets for purposes of this Agreement.
2. Covenantor shall at all times treat as confidential, and shall not at
any time disclose, distribute, copy, duplicate, record, or otherwise reproduce,
in whole or in part, or otherwise make available to any person or source or
otherwise use in any manner except for the operation of the Franchised
Restaurants, the contents of the Trade Secrets without the prior written consent
of Franchisor.
3. Covenantor agrees that any goodwill that may arise from Covenantor's use
of the Trade Secrets shall at all times remain the sole and exclusive property
of Franchisor and shall inure to the sole benefit of Franchisor.
4. Covenantor agrees to notify Franchisor and Developer promptly in writing
of any loss, theft, or unauthorized disclosure or use of any of the Trade
Secrets of which Covenantor has knowledge.
5. Covenantor shall surrender any material containing some or all of the
Trade Secrets, including the Documentation, to Developer or Franchisor, upon
request, or upon termination of employment by Developer, or upon conclusion of
the use for which such information or material may have been furnished to
Covenantor.
Covenants Not to Compete
1. Covenantor specifically acknowledges that, pursuant to Covenantor's
employment or association with Developer, Covenantor will receive valuable,
specialized training and/or confidential information. In consideration for the
disclosure of the Trade Secrets, Covenantor covenants that during Covenantor's
employment or association with Developer, and for one (1) year following the
earlier of the expiration, termination or transfer of all of Developer's
interest in the Development Agreement or the termination of Covenantor's
association with or employment by Developer, except as otherwise approved in
writing by Franchisor, Covenantor shall not, either directly or indirectly, for
itself, or through, on behalf of, or in conjunction with, any person or legal
entity:
2. Divert or attempt to divert any business or customer of the Franchised
Restaurants 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 the Proprietary Marks, the Animated Entertainment
or the System;
i. Employ or seek to employ any person who is at that time employed
by Franchisor, Developer, or by any principal of Developer (other
than ____________ ), or otherwise directly or indirectly induce
such person to leave his or her employment; or
ii. Own, maintain, operate, engage in, be employed by, provide any
assistance to, or have any interest in (as owner or otherwise)
any business with entertainment by three dimensional
computer-controlled animated characters or video display;
provided, however, that this provision shall not apply to the
operation by Covenantor of any license which may be granted by
Franchisor to Covenantor; and provided, further, that this
provision shall not apply to any ownership by Covenantor, of less
than five percent (5%) of the outstanding equity securities in
any publicly-held corporation.
Miscellaneous
1. Developer and Covenantor agree that in the event of a breach of this
Agreement, Franchisor and/or Developer shall be entitled to enforce the
provisions of this Agreement and shall be entitled, in addition to any other
remedies which are made available to it at law or in equity, to a temporary
and/or permanent injunction and a decree for the specific performance of the
terms of this Agreement, without the necessity of showing actual or threatened
harm and without being required to furnish a bond or other security.
2. Covenantor agrees to pay all expenses (including court costs and
reasonable attorneys' fees) incurred by Franchisor and Developer in enforcing
this Agreement.
3. THIS AGREEMENT SHALL BE INTERPRETED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF ____________, WITHOUT REFERENCE TO _________________
CHOICE OF LAW PRINCIPLES.
4. This Agreement contains the entire agreement of the parties regarding
the subject matter hereof. This Agreement may be modified only by a duly
authorized writing executed by all parties.
5. Any and all notices required or permitted under this Agreement shall be
in writing and shall be personally delivered or mailed by certified mail, return
receipt requested, to the respective parties at the following addresses unless
and until a different address has been designated by written notice to the other
party:
Notices to Franchisor: Director of Franchise
CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Notices to Developer: ____________________________
____________________________
____________________________
____________________________
Notices to Covenantor: ____________________________
____________________________
____________________________
____________________________
Any notice by certified mail shall be deemed to have been given at the date
and time of mailing.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
witnessed by their signatures below.
FRANCHISOR:
CEC ENTERTAINMENT, INC.,
a Kansas corporation
By: ___________________________
Name: ___________________
Title: ___________________
DEVELOPER: COVENANTOR:
By: ___________________________ By: ___________________________
Name: __________________ Name: ___________________
Title: __________________ Title: ___________________
ATTACHMENT D
GENERAL RELEASE
(UPON TRANSFER)
THIS GENERAL RELEASE (this "Release") is made and entered into this ___ day
of ________, 20__, by ________________ ("Developer"), and ________________ (the
"Developer's Principals").
RECITALS
WHEREAS, on ________, ____, CEC Entertainment, Inc. ("Franchisor") and
Developer entered into that certain Development Agreement (the "Development
Agreement") for the establishment and operation of a Xxxxx X. Cheese's
restaurants;
WHEREAS, Developer and/or one or more of Developer's Principals desire to
effect a Transfer, as such term is defined in the Development Agreement; and
WHEREAS, the Development Agreement provides, as a condition to Franchisor's
approval of such Transfer, Developer and Developer's Principals shall execute a
release of certain claims.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged by each of the parties hereto, Developer and the Developer's
Principals agree as follows:
AGREEMENT
1. RELEASE. Developer, each of the Developer's Principals, individually and
collectively, jointly and severally, do hereby release and forever discharge
Franchisor and its affiliates, and each of their respective successors,
partners, and the shareholders, partners, representatives, assigns, agents,
servants, employees, independent contractors, officers, and directors of each of
them, in their corporate and individual capacities ("Designees"), of and from
any claims, debts, liabilities, demands, obligations, costs, expenses, actions,
and causes of action of every nature, character, and description, known or
unknown, vested or contingent ("Claims"), which the Developer and the
Developer's Principals now own or hold, or have at any time heretofore owned or
held, or may at any time own or hold against the Franchisor, or each of the
respective Designees of the Franchisor, arising under or in connection with any
agreement, law, rule, regulation ordinance, or any other context whatsoever,
including, without limitation, the Development Agreement and any development
agreement or the operation of a Xxxxx X. Cheese's restaurant established
thereunder, and any state or federal franchise or business opportunity law;
provided, however, that this release shall not serve to terminate any agreement
currently effective by an among Developer or any or all of the Developer's
Principals and Franchisor.
[The parties intend this paragraph 1 to cover, encompass, release, and
extinguish all claims and matters that might otherwise be reserved by California
Civil Code section 1542, which provides as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected the settlement with the
debtor."]
2. AUTHORITY. By executing this Release, the parties represent and warrant
that each have the right and authority to enter into and to accept the terms and
covenants of this Release, and that no third party has or claims an interest in
any claim released hereby.
3. NO CONFLICTS. Each of the undersigned hereby represents and warrants
that its execution of this Release does not violate any other agreement to which
it is a party.
4. MISCELLANEOUS.
4.1 Counterparts. This Release may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
4.2 Opportunity to Review. Developer and the Developer's Principals
represent and warrant that they: (i) have had an opportunity to review this
Release; (ii) have had an opportunity to consult with an attorney; and (iii)
fully understand the content and legal effect of this Release; and
4.3 Governing Law. This Release shall be governed by the laws of the State
of ________, which laws shall be controlling in the event of any conflict of
law.
4.4 Section Headings. The section headings of this Release are for the
convenience of the parties only shall have no force or effect.
4.5 Severability. The provisions of this release are severable, and, in the
event that any of them is held void and unenforceable as a matter of law, the
remainder shall continue in full force and effect.
IN WITNESS WHEREOF, Developer and the Developer's Principals have executed
and delivered this Release.
DEVELOPER:
By: ________________________
Title: ________________________
Date: ________________________
Developer's Principals:
____________________________________ ____________________________________
Name: _____________________________ Name: _____________________________
Date: _____________________________ Date: _____________________________
____________________________________ ____________________________________
Name: _____________________________ Name: _____________________________
Date: _____________________________ Date: _____________________________
____________________________________ ____________________________________
Name: _____________________________ Name: _____________________________
Date: _____________________________ Date: _____________________________
____________________________________ ____________________________________
Name: _____________________________ Name: _____________________________
Date: _____________________________ Date: _____________________________
