DEVELOPMENT AGREEMENT CORNERSTONE PRODUCTIONS, INC.Development Agreement |
|
|
You are currently viewing: This Development Agreement involves
CORNERSTONE PRODUCTIONS, INC.. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
Exhibit 10.9
T.G.I. FRIDAY’S ® RESTAURANTS
DEVELOPMENT AGREEMENT
CORNERSTONE PRODUCTIONS, INC.
Date: March 15, 2004
T.G.I. FRIDAY’S ® RESTAURANTS
DEVELOPMENT AGREEMENT
TABLE OF CONTENTS
1
2
DEVELOPMENT AGREEMENT
This Development Agreement is entered into as of the day of , 2004 but effective January 1, 2004 by and between TGI Friday’s Inc., a New York corporation (“Friday’s”), with its principal place of business located at 4201 Marsh Lane, Carrollton, Texas, 75007, and Cornerstone Productions, Inc., a Delaware corporation (“Developer”), with its principal place of business located at 5050 North 40 th Street, Suite 200, Phoenix, Arizona 85018 and its Principals (as defined herein below).
RECITALS
WHEREAS, Friday’s has developed and owns the System;
WHEREAS, Friday’s intends to identify the System in the Territory with the Proprietary Marks; and
WHEREAS, Developer wishes to obtain certain rights to develop Restaurants under the System in the Territory.
NOW, THEREFORE, the parties, in consideration of the undertakings and commitments set forth herein, agree as follows:
1. DEFINITIONSAs used in this Agreement the following words and phrases shall have the meanings attributed to them in this Section:
Action - any cause of action, suit, proceeding, claim, demand, investigation or inquiry (whether a formal proceeding or otherwise) asserted or instituted by a third party with respect to which the indemnity described in Section 12 applies.
Affiliate - Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any subsidiary of TGI Friday’s Inc.
Agreement - this Development Agreement.
Appraiser(s) - one or more independent third parties selected by the parties to this Agreement in accordance with the terms and conditions hereof.
Business Days - Each day except Saturday, Sunday and national legal holidays.
Commencement Date – January 1, 2004.
Competing Business - a restaurant business offering the same or similar products and services as offered by restaurants in the System or restaurants in any other concept or system owned, operated or franchised by Friday’s or any Affiliate, including, without limitation, waiter/waitress service, sit-down dining and bar services.
1
Confidential Information - the System, the Development Manual, the Manuals (as defined in the Franchise Agreement), other manuals, the Standards, written directives and all drawings, equipment, recipes, computer and point of sale programs (and output from such programs), and any other information, know-how, techniques, materials and data imparted or made available by Friday’s which is (i) designated as confidential, (ii) known by Developer to be considered confidential by Friday’s, or (iii) by its nature inherently or reasonably considered confidential.
Developer - Cornerstone Productions, Inc., a Delaware corporation.
Developer Indemnitees - Developer, Principals, and their respective directors, officers, employees, agents, shareholders, affiliates, successors and assigns and the respective directors, officers, employees, agents, shareholders, affiliates, successors and assigns of each.
Development Fee - a fee equal to the sum of ten percent (10%) of the Franchise Fee for each Restaurant to be developed pursuant to the Development Schedule.
Development Manual - Friday’s manual, as amended from time to time, describing (generally) the procedures and parameters for the development of T.G.I. Friday’s ® Restaurants.
Development Materials - a description of the Site, a feasibility study (including, without limitation, demographic data, photographs, maps, artists’ renderings, site plans, a copy of the Occupancy Contract, and documentation indicating Developer’s prospects to acquire the Site) and such other information related to the development of the Site as Friday’s reasonably requests.
Development Schedule - the schedule pursuant to which Developer shall develop Restaurants in the Territory (see Section 3.A).
Entertainment Park – includes, but is not limited to any amusement park, theme park, or any other entertainment venue which has a national presence of at least two (2) or more such parks in existence, and which has averaged at least 1.5 million persons in annual attendance for the preceding three (3) calendar years at any one (1) park location.
Event of Default - as defined in Section 10.
Franchise Agreement - an agreement pursuant to which Developer constructs and operates a Restaurant during the Development Schedule, which shall be substantially in the form attached as Exhibit A .
Franchisee - as defined in the Franchise Agreement.
Franchise Fee - an initial per Restaurant fee (more fully defined in the Franchise Agreement) paid by Developer to Friday’s, which fee varies in accordance with the number of Restaurants previously developed under each Development Schedule.
Friday’s - TGI Friday’s Inc., a New York corporation.
Friday’s Indemnitees - Friday’s, its directors, officers, employees, agents, shareholders, affiliates, successors and assigns and the respective directors, officers, employees, agents, shareholders and affiliates of each.
Headquarters - the location(s) designated from time to time by Friday’s as its principal place of business.
2
Indemnitees - Friday’s Indemnitees and Developer Indemnitees.
Losses and Expenses - all compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, reasonable fees of attorneys and other engaged professionals, court costs, settlement amounts, judgments, costs of or resulting from delays, financing, costs of advertising material and media time/space, and costs of changing, substituting or replacing the same, and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described in Section 12.
Material Event of Default - an Event of Default which constitutes a substantial deviation from the performance required.
Multi-Unit Manager(s) - the individual(s) designated as described in Section 5.E who shall be solely dedicated to the management and supervision of the Restaurants.
NSO-Team - a “new store opening team” consisting of Friday’s employees and certain of Franchisee’s employees to whom Friday’s has consented which shall perform the functions described in Section 5.I.
Occupancy Contract - the proposed agreement or document (including, without limitation, any lease, deed, contract for sale, contract for deed, land contract, management contract, license, or other agreement purporting to grant any right, title, or interest in or to the Site) pursuant to which Developer shall occupy or acquire rights in any Site.
Operator - an individual designated as described in Section 5.B. who shall devote his full time and best efforts to the management and supervision of (i) Developer’s duties and obligations hereunder; and (ii) the operation of the Restaurants.
Other Concepts - Retail, wholesale, restaurant, bar, tavern, take-out or any other type of business involving the production, distribution or sale of food products, beverages, services, merchandise or other items in connection with the use of one, some or all of the Proprietary Marks or other names or marks, but utilizing a system other than the System pursuant to which a T.G.I. Friday’s Restaurant is operated.
Owner - the party (if other than the Developer) owning or controlling the Site and being a party (with Developer) to the Occupancy Contract.
Payments - all transfers of funds from Developer to Friday’s including, without limitation, the Development Fee and reimbursement of expenses.
Permanent Disability - any physical, emotional or mental injury, illness or incapacity which would prevent the afflicted person from performing his obligations hereunder for more then ninety (90) consecutive days as determined by a licensed physician selected by Friday’s.
Preliminary Site Consent - written communication from Friday’s to Developer notifying Developer that a proposed site has received the consent of the Friday’s Site Review Committee.
Principal(s) – Main Street and Main Incorporated who is (and such other persons or entities to whom Friday’s shall consent from time to time) the record and beneficial owner of, and has the right to vote its respective interest (collectively 100%) in the Securities of Developer or the securities or partnership
3
interest of any person or entity designated by Friday’s which owns or controls a direct or indirect interest in the Securities of the Developer.
Project Manager - an individual designated as described in Section 5.C who shall devote his full-time and best efforts to the coordination and completion of Restaurant construction.
Proprietary Marks - certain trademarks, trade names, trade dress, service marks, emblems and indicia of origin designated by Friday’s from time to time for use in connection with the operation of Restaurants pursuant to the System in the Territory, including, without limitation, “ TGI Friday’s ® ”, “ Friday’s ® ” and “ The American Bistro ® ”.
Publicly - Held Entity - a corporation or other entity whose equity securities are (i) registered pursuant to applicable law; (ii) widely held by the public; and (iii) traded on a public securities exchange or over the counter pursuant to applicable law.
Representative - an individual, designated as described in Section 5.A. who (i) owns an equity interest in the Developer and (ii) is authorized to act on behalf of, and bind, Developer with respect to this Agreement.
Restaurant(s) - T.G.I. Friday’s ® Restaurant(s) developed pursuant to this Agreement.
Restaurant Manager(s) - general manager, assistant general manager, kitchen manager and other managers required for the management, operation, supervision and promotion of the Restaurant pursuant to the terms hereof.
Security - the capital stock of, partner’s interest in, or other equity or voting interest in Developer including such interests issued or created subsequent to the date hereof.
Site - the proposed location of any Restaurant.
Standards - Friday’s standards and specifications, as amended from time to time by Friday’s, contained in, and being a part of, the Confidential Information pursuant to which Developer shall develop and operate Restaurants in the Territory.
System - a unique, proprietary system developed and owned by Friday’s (which may be modified or further developed from time to time by Friday’s) for the establishment and operation of full-service restaurants and restaurant/bars under the Proprietary Marks, which includes, without limitation, a distinctive image consisting of exterior and interior design, decor, color scheme and furnishings; special recipes, menu items and full service bar; uniform standards, products, services and specifications; procedures with respect to operations, inventory and management control (including accounting procedures and policies); training and assistance; and advertising and promotional programs.
Term - the duration of this Agreement commencing on the Commencement Date and continuing until the date specified on the Development Schedule for the last restaurant to be opened.
Territorial Expenses - such costs and expenses incurred by or assessed with respect to Friday’s (or other described party’s) employees, agents and/or representatives in connection with activities in the Territory which Developer is obligated to pay pursuant to this Agreement, including, without limitation, hotel/lodging, transportation and meals, and other related or incidental expenses.
4
Territory - the geographical area described in Exhibit C ; provided, however, the Territory shall not include any airport properties, professional sports stadiums, military bases, Entertainment Parks or casinos otherwise located within the Territory, nor a specifically identified restricted area surrounding any Restaurant located within the Territory as of the date of this Agreement nor shall it be deemed to convey any exclusivity with respect to the use of the Proprietary Marks.
TGIFM - TGI Friday’s of Minnesota Inc., a Minnesota corporation and a subsidiary of Friday’s.
T.G.I. Friday’s ® Restaurants - restaurants operated in accordance with the System under the registered service marks “ Friday’s ® ” or “ T.G.I. Friday’s ® ”.
Training Center - the location(s) specified from time to time by Friday’s as the training center.
Transfer - the sale, assignment, conveyance, license, devise, bequest, pledge, mortgage or other encumbrance, whether direct or indirect, of (i) this Agreement; (ii) any or all rights or obligations of Developer herein; or (iii) any interest in any Security, including the issuance of any new Securities.
Transferee Owner(s) - the owner of any and all record or beneficial interest in the capital stock of, partner’s interest in, or other equity or voting interest in any transferee of a Transfer occurring pursuant to the terms of Section 8.
Wage Expenses - such wages and/or salaries (including a reasonable allocation of the cost of benefits) of, or with respect to, Friday’s (or other described party’s) employees, agents and/or representatives to be reimbursed to Friday’s or such party as described herein.
2. EXCLUSIVE RIGHTS; TERMA. Friday’s grants to Developer the right, and Developer accepts the obligation, subject to the terms and conditions herein, to develop and operate the number of Restaurants set forth in the Development Schedule (set forth in Section 3.A) as may be approved by Friday’s in accordance with its then current site consent procedures. The Restaurants shall be developed and operated in the Territory pursuant to the System. For so long as no Event of Default has occurred and is continuing and no event has occurred which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, Friday’s will neither develop, nor authorize any other person to develop, T.G.I. Friday’s Restaurants in the Territory during the Term.
B. Friday’s reserves the right to use the Proprietary Marks in connection with Other Concepts.
C. Friday’s expressly reserves the right, and Developer acknowledges that Friday’s has the exclusive unrestricted right, to engage, directly and indirectly, through its employees, developers, franchisees, licensees, agents and others within the Territory, in Other Concepts. Such Other Concepts may compete with Developer directly or indirectly.
D. Subject to Sections 3 and 4 hereof, Developer shall exercise the rights granted herein for each Restaurant by executing, delivering and otherwise performing pursuant to a Franchise Agreement.
5
E. Unless sooner terminated as provided herein, this Agreement shall commence on the Commencement Date and continue until the expiration of the Term. This Agreement shall automatically expire at 11:59 p.m. on the date specified in Section 3.A. as the opening date for the last restaurant to be opened.
F. Upon any termination or expiration of this Agreement, (i) Developer shall not develop additional Restaurants in the Territory pursuant to this Agreement; provided , however , that Developer may complete development of and/or operate Restaurants under then existing Franchise Agreements subject to the terms and conditions thereof; and (ii) Friday’s may develop, or authorize others to develop, Restaurants in the Territory.
3. DEVELOPMENT SCHEDULE; SITE SELECTION; OC CUPANCY CONTRACT; DEVELOPMENT MANUALSA. Developer shall develop, open, commence operation of and continuously operate pursuant to the respective Franchise Agreements six (6) Restaurants in the Territory, pursuant to the Development Schedule as follows:
*Restaurant No. 1 must be under construction by December 31, 2004.
(i). To satisfy a particular deadline for preliminary site consent, Developer must submit a site that can be open and operating by the corresponding restaurant opening deadline. If Developer submits a site for preliminary site consent, but the site cannot be open and operating by the next restaurant opening deadline, that site will not satisfy the deadline for preliminary site consent that corresponds to the next restaurant opening deadline.
(ii). The Franchise Agreement for each restaurant location must be fully executed and all franchise fees paid within the time frames set forth in the foregoing Development Schedule.
(iii). Time is of the essence, with respect to each of the development obligations specified in this Section 3.
(iv). The Development Schedule contains a specific minimum number of Friday’s Restaurants to be open and operating by Developer within the Territory during certain time periods, and if any Restaurants are temporarily or permanently closed for business (except for authorized holidays or temporarily for major repairs), such closed Restaurants will not be included, while closed, as open and operating in computing such minimum numbers of open and operating Friday’s Restaurants and in satisfying the deadlines set forth in the Development Schedule.
6
B. The number of Restaurants indicated in the Development Schedule shall be OPEN AND OPERATING by the date(s) specified therein. Friday’s consent to any Site or execution of a Franchise Agreement shall not waive, extend or modify the Development Schedule. Unless otherwise agreed and approved by Friday’s, the Restaurants shall refer to traditional T.G.I. Friday’s Restaurants.
C. Developer assumes all cost, liability, expense, risk and responsibility for locating, obtaining and developing Sites for Restaurants, and for constructing and equipping Restaurants at such Sites. Prior to execution of each Franchise Agreement, Developer shall obtain Friday’s consent to each Site (including, without limitation, the Proprietary Mark which shall be used to identify the Restaurant at the Site to the public) pursuant to the time frames set forth in Section 3.A. above in accordance with Friday’s then existing Site selection criteria and procedures including:
(1) submission of all Development Materials to Friday’s; and
(2) with respect to each Restaurant to be developed hereunder, completion of one (1) Site visit by Friday’s at Friday’s sole cost and expense, if required by Friday’s.
D. Within thirty (30) days following receipt of all Development Materials and completion of any such visit, Friday’s shall consent to or reject such Site. Friday’s failure to consent shall constitute rejection of such Site. Promptly after Friday’s consent is obtained, but prior to commencing construction at such Site, Developer shall execute a Franchise Agreement and pay the Franchise Fee.
E. Neither Friday’s (i) consent to nor (ii) assistance in the selection of, any Site shall constitute Friday’s representation or warranty that a Restaurant operated at such Site will be profitable or meet any financial projection.
F. Friday’s shall have the right to review and consent to the Occupancy Contract prior to the execution thereof. A copy of the proposed Occupancy Contract shall be provided to Friday’s within sixty (60) days of the date of Preliminary Site Consent. The Occupancy Contract shall be executed by all necessary parties within thirty (30) days following Friday’s consent thereto. Developer shall furnish Friday’s a complete copy of the executed Occupancy Contract within ten (10) days after execution. Unless it conveys to Developer fee simple title to the Site, the Occupancy Contract shall include the following covenants:
(1) Owner shall deliver to Friday’s, simultaneously with delivery to Developer, any notice alleging Developer’s default under the Occupancy Contract which threatens or purports to terminate the Occupancy Contract;
(2) Friday’s may enter the Restaurant premises to protect the Proprietary Marks or the System or to cure any Event of Default or default under the Occupancy Contract or the applicable Franchise Agreement;
(3) Developer may assign the Occupancy Contract to Friday’s without any fee or modification thereof and Friday’s may assign or sublease the Occupancy Contract or license the Restaurant premises for any part of the remaining term of the Occupancy Contract, each without Owner’s consent; and
(4) Owner and Developer shall not amend the Occupancy Contract in any way which is inconsistent with the provisions of Sections 3.F(1) through (4), inclusive.
7
G. Notwithstanding the terms of Section 3.F, Developer shall:
(1) deliver to Friday’s, immediately after delivery to or by Developer, any notice of default under the Occupancy Contract which threatens or purports to terminate the Occupancy Contract or result in a foreclosure thereof;
(2) permit Friday’s to enter the Restaurant premises to protect the Proprietary Marks or the System or to cure any Event of Default or default under the Occupancy Contract or the applicable Franchise Agreement, all at Developer’s expense; and
(3) not amend the Occupancy Contract in any way which is inconsistent with the provisions of Sections 3.F.(1) through (4), inclusive.
H. Friday’s shall provide Developer with one (1) Development Manual “on loan” and two (2) sets of Friday’s standard plans and specifications as of the date hereof for the construction of a typical Restaurant. Developer acknowledges Friday’s ownership of the Development Manual and any such plans and specifications, together with any copyright rights in or to such materials. Developer shall observe Friday’s reasonable requests concerning copyright notices. The Development Manual and such plans shall be returned to Friday’s immediately upon termination or expiration of this Agreement.
I. Friday’s shall provide such consultation as it reasonably deems necessary to consent to vendors and products proposed to be used in Restaurant development and operation.
4. FEES AND PAYMENTSA. In consideration of the development rights granted herein, Developer shall pay to Friday’s upon execution of this Agreement the Development Fee. Under no circumstances shall Developer be entitled to any refund of any portion of the Development Fee.
B. The Franchise Fee to be paid by Developer for each new Restaurant to be developed under the Development Schedule set forth in Section 3.A hereof shall be Fifty Thousand Dollars ($50,000.00) for each Restaurant, payable upon execution of the Franchise Agreement for each Restaurant in accordance with the Development Schedule. Developer shall receive a credit of $5,000 against the payment of the Franchise Fee due for each Restaurant developed pursuant to the Development Schedule.
C. (1) All Payments shall be submitted to Friday’s at the address provided in Section 13 hereof, in care of the “Treasurer”, or such other address as Friday’s shall designate in writing.
(2) Payments shall be received by Friday’s (i) upon execution hereof in the case of the Development Fee; (ii) upon execution of each Franchise Agreement; and (iii) not more than thirty (30) days after date of invoice for all other Payments. Delinquent Payments shall bear interest from the due date until received by Friday’s at eighteen percent (18%) per annum or the maximum rate permitted by law, whichever is less.
8
D. Developer shall not withhold or off-set any portion of any Payment due to Friday’s alleged non-performance under this Agreement or any other agreement by and between Friday’s and Developer or their respective parent corporations, subsidiaries or affiliates.
5. REPRESENTATIVE; OPERATOR; RESTAURANT MAN AGERS; TRAININGA. Developer hereby designates Bill Shrader as the Representative. Any replacement Representative shall be designated within ten (10) days of the prior Representatives’ resignation or termination. Each Representative shall attend and successfully complete at the Training Center Friday’s “Owner’s Orientation Program” (currently approximately four (4) weeks). The Representative hereunder and under each Franchise Agreement shall be the same individual.
B. Developer hereby designates Jeff L. Smit as the Operator. Any replacement Operator shall be designated within ten (10) days of the prior Operator’s resignation or termination. Each Operator shall attend and successfully complete at the Training Center within six (6) months of appointment Friday’s training program required for Restaurant Managers ( see Section 5.D.). The Operator hereunder and under each Franchise Agreement shall be the same individual.
C. Not less than sixty (60) days prior to the commencement of Restaurant construction, Developer shall designate the Project Manager. Any replacement Project Manager shall be designated within ten (10) days of the prior Project Manager’s resignation/termination.
D. The requisite number of Restaurant Managers, as determined by Friday’s, shall be employed by Developer for each Restaurant developed hereunder. All Restaurant Managers shall attend and successfully complete at the Training Center Friday’s training program for Restaurant Managers of T.G.I. Friday’s ® Restaurants (currently, one (1) week). Additionally, the Restaurant Managers shall attend and successfully complete additional training (currently, approximately fourteen (14) weeks) at such then existing T.G.I. Friday’s Restaurants as shall be designated by Friday’s. Any previously trained Restaurant Manager who is not a general manager, but has been selected to become a general manager shall attend and successfully complete such additional training as Friday’s may require. Friday’s may require general and kitchen managers, at Developer’s expense, to attend and successfully complete additional training at the Training Center.
E. When the Franchise Agreement for the third Restaurant is executed, Developer shall designate a Multi-Unit Manager. Additional Multi-Unit Managers shall be designated from time to time as reasonably required by Friday’s. Prior to assuming his duties, each Multi-Unit Manager shall have successfully completed Restaurant Manager training and shall attend at the Training Center and successfully complete Friday’s training program for Multi-Unit Managers (currently, two (2) days at the Training Center and approximately four (4) weeks at such then existing T.G.I. Friday’s ® Restaurant locations as shall be designated by Friday’s).
F. Friday’s shall have the right to interview and consent to each Operator, each Multi-Unit Manager, Project Manager and all Restaurant Managers. Friday’s shall endeavor to conduct such interviews in the Territory, but may require that such interviews occur at Headquarters. Developer shall bear all costs and expenses related to making the Restaurant Managers available for such interviews.
G. Friday’s shall provide instructors, facilities and materials for training at the Training Center, and shall provide, at its option, other training programs at non-Training Center locations as may be designated by Friday’s from time to time in the Manuals or otherwise in writing. Developer shall
9
reimburse Friday’s for any Territorial Expenses or other direct expenses incurred by Friday’s for such other training programs.
H. Except as provided herein, Developer shall bear all costs and expenses relating to any Representative, Operator, Multi-Unit Manager, Project Manager and Restaurant Manager training.
I. The NSO Team shall assist in (i) training Developer’s/Franchisee’s employees at each Restaurant; and (ii) the opening of each Restaurant. The NSO Team for a Restaurant typically consists of a combined total of approximately twelve (12) employees of Friday’s and Developer/Franchisee (the actual number of members shall be determined by Friday’s depending upon the number of Restaurant locations already open and operating by Developer and such other criteria as Friday’s deems relevant). The members of the NSO Team shall be subject to Friday’s consent. The number of Friday’s employees selected to serve on the NSO Team for a Restaurant is determined according to the following schedule, provided however, Friday’s may elect to modify this schedule in the event the total number of people on the NSO Team is greater or less than twelve (12):
In the event Friday’s determines that more than 12 NSO team members are necessary for an opening, Developers with five or more restaurants open (inclusive of the new restaurant) shall be responsible for the costs associated with the team members in excess of 12. For Developers with less than five restaurants open, Friday’s will bear the costs of the additional team members.
If Developer/Franchisee fails or is unable to timely provide such employees, Friday’s may, but shall not be obligated to, staff the NSO-Team with Friday’s employees. Friday’s and Developer/Franchisee shall each be responsible for: (a) making all travel, food and lodging arrangements, and (b) the wage and other expenses of the NSO-Team members provided by each; provided, however, that Developer/Franchisee shall reimburse Friday’s for the Territorial Expenses and the Wage Expenses of Friday’s employees who are provided as a result of Developer’s/Franchisee’s failure or inability to provide Developer/Franchisee employees for participation on the NSO-Team.
6. CONFIDENTIAL INFORMATIONA. (1) Neither Developer nor any Principal shall communicate, disclose or use any Confidential Information except as (i) permitted herein or (ii) required by law, and shall use all reasonable efforts to maintain such information as secret and confidential. Neither Developer nor any Principal shall, without Friday’s prior consent, copy, duplicate, record or otherwise reproduce any Confidential Information. Confidential Information may be provided to employees, agents, consultants and contractors only to the extent necessary for such parties to provide services to Developer. Prior to such disclosure of any Confidential Information, each of such employees, agents, consultants and contractors shall (a) be advised by Developer of the confidential and proprietary nature of the Confidential Information, and (b) agree to be bound by the terms and conditions of Section 6 of this Agreement. Notwithstanding such agreement, Developer shall indemnify the Friday’s Indemnitees from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by its agents, employees, consultants and contractors.
10
(2) In the event Developer or Developer’s employees, agents, consultants, or contractors receive notice of any request, demand, or order to transfer or disclose all or any portion of the Confidential Information, Developer shall immediately notify Friday’s thereof, and shall fully cooperate with and assist Friday’s in prohibiting or denying any such transfer or disclosure. Should such transfer or disclosure be required by a valid, final, non-appealable court order, Developer shall fully cooperate with and assist Friday’s in protecting the confidentiality of the Confidential Information to the maximum extent permitted by law.
(3) Developer and each Principal acknowledge Friday’s exclusive ownership of the Confidential Information and the System, and TGIFM’s exclusive ownership of, and Friday’s license with respect to, the Proprietary Marks. Neither Developer nor any Principal shall, directly or indirectly, contest or impair Friday’s or TGIFM’s exclusive ownership of, and/or license with respect to, the Confidential Information, the System or the Proprietary Marks.
B. If Developer develops improvements (as determined by Friday’s) to the Confidential Information, Developer and the Principals shall each, without additional consideration, execute such agreements and other documentation as shall be deemed necessary by Friday’s, granting exclusive ownership thereof to Friday’s. All such improvements shall be Confidential Information.
C. Each Principal shall execute and deliver to Friday’s a covenant in the form attached as Addendum A . Developer shall cause each Operator, Representative, Multi-Unit Manager, Project Manager, and Restaurant Manager and such other employees of Developer whom Friday’s shall designate to execute and (if requested) deliver to Friday’s a covenant in the form attached as Addendum B . Notwithstanding the execution of such covenant, Developer shall indemnify the Friday’s Indemnitees from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by any Principal, Operator, Representative, Multi-Unit Manager, Project Manager or Restaurant Manager.
D. Immediately upon any termination or expiration hereof, Developer and each Principal shall return the Confidential Information including, without limitation, that portion of the Confidential Information which consists of analyses, compilations, studies or other documents containing or referring to any part of the Confidential Information, prepared by Developer or such Principal, their agents, representatives or employees, and all copies thereof.
7. DEVELOPER’S REPRESENTATIONS AND WARRANTI ES; AFFIRMATIVE AND NEGATIVE COVENANTSA. In the event Developer is a corporation, limited liability company or partnership, Developer represents and warrants to Friday’s as follows:
(1) Developer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with all requisite power and authority to own, operate and lease its assets (real or personal), to carry on its business, to enter into this Agreement and perform its obligations hereunder. Developer is duly qualified to do business and is in good standing in each jurisdiction in which its business or the ownership of its assets requires.
(2) The execution, delivery and performance by Developer of this Agreement, any Franchise Agreement and all other agreements contemplated herein has been duly authorized by all requisite action and no further action is necessary to make this Agreement, any Franchise Agreement or
11
such other agreements valid and binding upon it and enforceable against it in accordance with their respective terms. Neither the execution, delivery nor performance by Developer of this Agreement, any Franchise Agreement or any other agreements contemplated hereby will conflict with, or result in a breach of any term or provision of Developer’s articles of incorporation, by-laws, partnership agreement or other governing documents or under any mortgage, deed of trust or other 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.
(3) Developer’s articles of incorporation, by-laws, partnership agreement and other governing documents expressly limit Developer’s business activities solely to the development and operation (pursuant to this Agreement and the Franchise Agreements) of the Restaurants.
(4) Certified copies of Developer’s articles of incorporation, by-laws, partnership agreement, other governing documents and any amendments thereto, including board of director’s or partner’s resolutions authorizing this Agreement, have been delivered to Friday’s.
(5) A certified current list of all Principals has been delivered to Friday’s.
(6) Developer’s articles of incorporation or other governing documents, or partnership agreement limit Transfers as described in Sections 8.B.(2) and 8.C.
(7) Each Security shall bear a legend (in a form to which Friday’s shall consent) indicating that any Transfer is subject to Sections 8.B and 8.C.
B. Developer affirmatively covenants with Friday’s as follows:
(1) Developer shall perform its duties and obligations hereunder and under any Franchise Agreement and shall require each Operator, Multi-Unit Manager, Project Manager and Restaurant Manager to dedicate their respective full time and best efforts to the development, construction, management, operation, supervision and promotion of the Restaurants in accordance with the terms and conditions hereof.
(2) Developer shall promptly provide Friday’s with all information concerning any new process or improvements in the development, construction, management, operation, supervision or promotion of the Restaurants developed by Developer or any Principal without compensation. Developer and the Principals shall each execute such agreements and other documentation as shall be deemed necessary by Friday’s, granting Friday’s exclusive ownership thereof.
(3) Developer shall comply with all requirements of applicable rules, regulations, statutes, laws and ordinances.
(4) Developer shall maintain a current list of all Principals and deliver a certified copy thereof to Friday’s upon (i) any Transfer; or (ii) request.
(5) Each Security issued subsequent to the date hereof shall be in compliance with Section 7.A.(7).
(6) Developer and each Principal represent and warrant to Friday’s that: (a) neither Developer nor any Principal is named, either directly or by an alias, pseudonym or nickname, on the lists of “Specially Designated Nationals” or “Blocked Persons” maintained by the U.S. Treasury
12
Department’s Office of Foreign Assets Control currently located at www.treas.gov/offices/enforcement/ofac/; (b) Developer and each Principal will take no action that would constitute a violation of any applicable laws against corrupt business practices, against money laundering and against facilitating or supporting persons or entities who conspire to commit acts of terror against any person or entity, including as prohibited by the U.S. Patriot Act (currently located at http://www.epic.org/privacy/terrorism/hr3162.html), U.S. Executive Order 13244 (currently located at http://www.treas.gov/offices/enforcement/ofac/sanctions/terrorism.html) or any similar laws; and (c) that Developer and each Principal shall immediately notify Friday’s in writing of the occurrence of any event or the development of any circumstance that might render any of the foregoing representations and warranties false, inaccurate or misleading.
C. Developer acknowledges and/or negatively covenants with Friday’s as follows:
(1) Developer shall not amend its articles of incorporation, by-laws, partnership agreement or other governing documents in a manner which is inconsistent with Sections 7.A.(3), 8.B.(2) and 8.C.
(2) Developer shall not remove or permit removal from any Security or its partnership agreement, or issue any Security that does not have endorsed upon it, the legend described in Section 7.A.(7).
(3) Developer and each Principal shall receive valuable, unique training, trade secrets and the Confidential Information which are beyond the present skills, experience and knowledge of Developer, any Principal and Developer’s employees. Developer and each Principal acknowledge that (i) such training, trade secrets and the Confidential Information (a) are essential to the development of the Restaurant and (b) provide a competitive advantage to Developer; and (ii) access to such training, trade secrets and the Confidential Information is a primary reason for their execution of this Agreement. In consideration thereof, Developer and each Principal covenant that, during the Term and for a period of one (1) year after the expiration or termination hereof, neither Developer nor any Principal shall, directly or indirectly:
(a) employ or seek to employ any person (or induce such person to leave his or her employment) who is, or has within one (1) year been, employed as a director, officer or in any managerial capacity (i) by Friday’s, (ii) by any developer or franchisee of Friday’s, or (iii) in any other concept or system owned, operated or franchised by an Affiliate;
(b) own, maintain, operate or have any interest in any Competing Business;
(c) own, maintain, operate or have any interest in any Competing Business which business is, or is intended to be, located in the Territory; or
(d) own, maintain, operate or have any interest in any Competing Business which business is, or is intended to be, located within a three (3) mile radius of any restaurant which is a part of a concept or system owned, operated, or franchised by Friday’s or any Affiliate.
(4) Sections 7.C.(3)(b), (c) and (d) shall not apply to an interest for investment only of five percent (5%) or less of the capital stock of a Publicly-Held Entity if such owner is not a director, officer or manager therefor or consultant thereto.
13
D. Each of the foregoing covenants is independent of each other covenant or agreement contained in this Agreement.
E. Friday’s has the absolute right to reduce the area, duration or scope of any covenant contained in Section 7.C. without Developer’s or any Principal’s consent, effective upon notice to Developer. Developer and each Principal shall comply with any covenant as so modified.
F. Developer’s representations, warranties, covenants and agreements herein are continuing representations, warranties, covenants and agreements each of which shall survive the expiration or termination hereof.
8. TRANSFERA. Friday’s may assign this Agreement, or any of its rights or obligations herein, to any person or entity without Developer’s or any Principal’s consent; provided, however, that Friday’s obligations which are assigned shall be fully assumed by the party to whom Friday’s assigns such obligations.
B. (1) Developer and each Principal acknowledge that Developer’s rights and obligations herein and in each Franchise Agreement are personal to Developer and that Friday’s has entered into this Agreement and will enter into each Franchise Agreement relying upon the business skill, experience and aptitude, financial resources and reputation of Developer and each Principal. Therefore, neither Developer nor any Principal, their respective su |
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
