Development Agreement - TGI Friday's Inc.
T.G.I. FRIDAY'S-Registered Trademark- RESTAURANTS
DEVELOPMENT AGREEMENT
DATE: ________________, ______
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T.G.I. FRIDAY'S-Registered Trademark- RESTAURANTS
DEVELOPMENT AGREEMENT
TABLE OF CONTENTS
1. DEFINITIONS..............................................................................1
2. EXCLUSIVE RIGHTS; TERM...................................................................5
3. DEVELOPMENT SCHEDULE; SITE SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MANUALS............6
4. FEES AND PAYMENTS........................................................................7
5. REPRESENTATIVE; OPERATOR; RESTAURANT MANAGERS; TRAINING..................................7
6. CONFIDENTIAL INFORMATION.................................................................7
7. DEVELOPER'S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS...........7
8. TRANSFER.................................................................................7
9. CONSENT AND WAIVER.......................................................................7
10. DEFAULT AND REMEDIES.....................................................................7
11. INSURANCE................................................................................7
12. INDEMNIFICATION..........................................................................7
13. NOTICES..................................................................................7
14. FORCE MAJEURE............................................................................7
15. SEVERABILITY.............................................................................7
16. INDEPENDENT CONTRACTOR...................................................................7
17. DUE DILIGENCE AND ASSUMPTION OF RISK.....................................................7
18. MISCELLANEOUS............................................................................7
19. CHOICE OF LAW; JURISDICTION; VENUE.......................................................7
20. ENTIRE AGREEMENT.........................................................................7
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ADDENDUM A........ COVENANT AND AGREEMENT FOR CONFIDENTIALITY (PRINCIPAL)
ADDENDUM B........ COVENANT AND AGREEMENT FOR CONFIDENTIALITY (OTHERS)
EXHIBIT A......... FRANCHISE AGREEMENT
EXHIBIT B......... GUARANTY AGREEMENT
EXHIBIT C......... TERRITORY
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DEVELOPMENT AGREEMENT
This Development Agreement is entered into as of the _____ day of
_____________, ______ by and between TGI Friday's Inc., a New York corporation,
with its principal place of business located at 7540 LBJ Freeway, Suite 100,
Dallas, Texas, 75251, and ________________________________, with its principal
place of business located at__________________________ 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. DEFINITIONS
As 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 - _________________, _____.
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.
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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 - ____________________________.
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 one hundred percent (100%) of the
Franchise Fee for the first Restaurant to be developed under the Development
Schedule, plus twenty percent (20%) of the Franchise Fee for each of the
second through fifth Restaurants to be developed pursuant to the Development
Schedule, and ten percent (10%) of the Franchise Fee for each additional
Restaurant to be developed thereafter 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-Registered Trademark- 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,
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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.
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.
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PRINCIPAL(S) - ___________________, ___________________, __________________
and __________________ who are (and such other persons or entities to whom
Friday's shall consent from time to time) the record and beneficial owners
of, and have the right to vote their respective interests (collectively 100%)
in the Securities of Developer or the securities or partnership 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-Registered Trademark-", "FRIDAY's-Registered Trademark-" and "THE
AMERICAN BISTRO-Registered Trademark-".
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-Registered Trademark- 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, in its sole discretion, 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 in Friday's sole
discretion) 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.
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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.
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-Registered Trademark- RESTAURANTS - restaurants operated in
accordance with the System under the registered service marks
"FRIDAY'S-Registered Trademark-" OR "T.G.I. FRIDAY'S-Registered Trademark-".
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; TERM
A. 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 and Front Row Sports
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Grill restaurants. 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.
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; OCCUPANCY CONTRACT;
DEVELOPMENT MANUALS
A. Developer shall develop, open, commence operation of and
continuously operate pursuant to the respective Franchise Agreements
__________ (__) Restaurants in the Territory, pursuant to the Development
Schedule as follows:
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RESTAURANT NO. DATE OF PRELIMINARY SITE DATE FRANCHISE DATE OPEN & OPERATING
CONSENT AGREEMENT SIGNED & FEES
PAID
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(i). 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.
(ii). Time is of the essence, with respect to each of the
development obligations specified in this Section 3.
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
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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.
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
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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.G.(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 PAYMENTS
A. 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 Seventy-Five Thousand Dollars ($75,000.00) for the first
Restaurant to be developed, Sixty-Five Thousand Dollars ($65,000.00) for the
second Restaurant to be developed, and Fifty Thousand Dollars ($50,000.00)
for each additional Restaurant, payable upon execution of the Franchise
Agreement for each Restaurant in accordance with the Development Schedule.
Developer shall receive a credit against the payment of the Franchise Fee due
for each Restaurant developed pursuant to the Development Schedule as follows:
<CAPTION>
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RESTAURANT NO. AMOUNT OF CREDIT
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1 Seventy-Five Thousand Dollars ($75,000.00)
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2 Thirteen Thousand Dollars ($13,000.00)
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3 Ten Thousand Dollars ($10,000.00)
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4 Ten Thousand Dollars ($10,000.00)
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5 Ten Thousand Dollars ($10,000.00)
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6 or more Five Thousand Dollars ($5,000.00)
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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.
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
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Developer or their respective parent corporations, subsidiaries or affiliates.
5. REPRESENTATIVE; OPERATOR; RESTAURANT MANAGERS; TRAINING
A. Developer hereby designates _______________ 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 _______________ 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 Franchisee 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-Registered Trademark- Restaurants (currently, one (1) week).
Additionally, the Restaurant Managers shall attend and successfully complete
additional training (currently, approximately twenty (20) 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(R) 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 reimburse Friday's for any Territorial Expenses or other direct
expenses incurred by Friday's for such
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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 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 Franchisee (the actual number of members shall
be determined by Friday's in its sole discretion, depending upon the number
of Restaurant locations already open and operating by Developer and such
other criteria as Friday's deems reasonable). 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):
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RESTAURANT NO. OPERATED NO. OF FRIDAY'S EMPLOYEES NO. OF TEAM MEMBERS TEAM MEMBERS PAID FOR
BY DEVELOPER ON THE NSO TEAM PAID FOR BY FRIDAY'S BY DEVELOPER
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1 & 2 12 12 0
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3 & 4 9 9 3
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5 & 6 6 6 6
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7 or more 2 2 10
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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 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 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
Franchisee shall reimburse Friday's for the Territorial Expenses and the Wage
Expenses of Friday's employees who are provided as a result of Franchisee's
failure or inability to provide Franchisee employees for participation on the
NSO-Team.
6. CONFIDENTIAL INFORMATION
A. (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
<PAGE>
Information by its agents, employees, consultants and contractors.
(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 WARRANTIES; AFFIRMATIVE AND NEGATIVE
COVENANTS
A. 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.
<PAGE>
(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 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).
<PAGE>
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 (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 , as a director, officer or in any
managerial capacity;
(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.
D. Each of the foregoing covenants is independent of each other
covenant or agreement contained in this Agreement.
E. Friday's may, in its sole discretion, 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.
<PAGE>
8. TRANSFER
A. 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 successors or permitted assigns, shall complete, or allow to be
completed, any Transfer without Friday's consent. Any purported Transfer, by
operation of law or otherwise, without Friday's consent shall be null and
void and constitute an Event of Default.
(2) Friday's may require satisfaction of any of the
following conditions and such other conditions as Friday's may reasonably
require prior to consenting to any Transfer, each of which Developer
acknowledges and agrees is reasonable and necessary:
(a) no Event of Default shall have occurred and be
continuing and no event shall have occurred which, with the giving of notice
or lapse of time, or both, would constitute an Event of Default;
(b) Developer and/or any affected Principal shall
deliver a general release of any and all claims against the Friday's
Indemnitees including, without limitation, claims arising under this
Agreement and any Franchise Agreement, in a form acceptable to Friday's;
(c) Developer and/or any affected Principal shall
remain liable for the performance of its obligations, covenants and
agreements herein through the date of transfer and shall execute all
instruments reasonably requested by Friday's to evidence such liability;
(d) the transferee and all Transferee Owners, as
applicable, shall (i) make each of Developer's and Principal's
representations and warranties; (ii) assume full, unconditional, joint and
several liability for, and agree to perform from the date of Transfer, each
of Developer's and Principal's obligations, covenants and agreements herein;
and (iii) execute all instruments (in a form acceptable to Friday's)
reasonably requested by Friday's to evidence the foregoing;
(e) the transferee and all Transferee Owners shall
satisfy, in Friday's reasonable judgment, Friday's then existing criteria for
T.G.I. Friday's-Registered Trademark- developers or principals, as
applicable, including, without limitation: (i) education; (ii) business
skill, experience and aptitude; (iii) character and reputation; and (iv)
financial resources;
(f) the transferee and all Transferee Owners shall
execute (without extending the Term) the standard form of development
agreement then being offered to new System developers or other form of this
Agreement as Friday's requests and such other ancillary agreements as
Friday's may request for the development of the Restaurants, which shall
supersede this Agreement and its ancillary documents and the terms of which
may differ from the terms hereof; provided, however, that
<PAGE>
the transferee shall not be required to pay the Development Fee (transferee
shall pay all Franchise Fees and other fees described in each Franchise
Agreement which have not already been paid in full by Developer); and
(g) at the transferee's expense, the transferee's
Representative, any Multi-Unit Manager(s), Operator, and Restaurant Managers
shall complete such training as then required (if not previously trained
pursuant to the terms hereof), upon such terms and conditions as Friday's may
reasonably require.
C. Developer and each Principal agree that:
(1) (i) Friday's shall have and is hereby granted a right
of first refusal with respect to any Transfer; (ii) should Developer and/or
any Principal desire to accept a bona fide offer to make a Transfer, such
party shall promptly notify Friday's thereof and shall provide such
information and documents relating thereto as Friday's may require; (iii)
within thirty (30) days after receipt of such notice, information and
documents, Friday's may notify such party that it intends to exercise its
right of first refusal with regard to such Transfer upon such terms and
conditions; provided, however, that such transaction shall be consummated
within a reasonable period of time after Friday's has given such notice; (iv)
any material change in the terms of any offer or any change in the identity
of the proposed transferee shall constitute a new offer subject to Friday's
right of first refusal; and (v) Friday's failure to exercise such right shall
not constitute a waiver of any other provision of this Agreement, including
such right with respect to future offers; and
(2) in the event such offer provides for payment of
consideration other than cash, Friday's may elect to purchase the interest
for the reasonable equivalent in cash. If the parties cannot agree within
thirty (30) days of the receipt of notice of Friday's election to exercise
such right of first refusal on such reasonable equivalent in cash, an
Appraiser designated by Friday's shall determine such amount, and his
determination shall be final and binding. If Friday's elects to exercise the
right of first refusal described above, the cost of the appraisal, if any,
shall be set off against any payment made by Friday's hereunder.
D. In the event Developer requests Friday's consent to any proposed
Transfer, there shall be paid to Friday's a non-refundable fee of Five
Thousand Dollars ($5,000.00), or such greater amount as is necessary to
reimburse Friday's for its costs and expenses associated with reviewing the
proposed Transfer including, without limitation, Territorial Expenses, legal
and accounting fees and Wage Expenses. No such fee shall be payable with
respect to a transaction with Friday's described in Section 8.C.
E. In the event Developer or any Principal is a natural person,
Developer or his administrator, executor, guardian or personal representative
shall promptly notify Friday's of the death or Permanent Disability of such
Developer or such Principal. Any Transfer upon death or Permanent Disability
shall be subject to the terms and conditions described in Sections 8.B.(2)
and 8.C. and shall be completed prior to a date which is (i) one (1) year
after the date of death; or (ii) ninety (90) days after the date Developer or
such Principal becomes, or is deemed to be, Permanently Disabled. Developer
or any Principal refusing to submit to examination with respect to Permanent
Disability shall be deemed Permanently Disabled.
F. Friday's consent to any Transfer shall not constitute a waiver of
(i) any claims it may have against the transferor; or (ii) the transferee's
compliance with the terms hereof.
<PAGE>
9. CONSENT AND WAIVER
A. When required, Developer or any Principal shall make a written
request for Friday's consent in advance and such consent shall be obtained in
writing. Friday's consent shall not be unreasonably withheld. The foregoing
not withstanding, where either party's consent is expressly reserved to such
party's sole discretion, the exercise of such discretion shall not be subject
to contest.
B. FRIDAY'S MAKES NO REPRESENTATIONS OR WARRANTIES UPON WHICH
DEVELOPER OR ANY PRINCIPAL MAY RELY AND ASSUMES NO LIABILITY OR OBLIGATION TO
DEVELOPER, ANY PRINCIPAL OR ANY THIRD PARTY BY PROVIDING ANY WAIVER, ADVICE,
CONSENT OR SERVICES TO DEVELOPER OR DUE TO ANY DELAY OR DENIAL THEREOF.
10. DEFAULT AND REMEDIES
10.01 A. The following shall constitute Events of Default by
Developer or any Principal: (i) failure to comply with the Development
Schedule; (ii) the breach or falsity of any representation or warranty
herein; (iii) failure to deliver executed covenants as required in Section
6.C; (iv) failure to comply with or perform its covenants, obligations and
agreements herein; (v) any Transfer that (a) occurs other than as provided in
Section 8 or (b) fails to occur within the time periods described in Section
8 (notwithstanding any lack of, or limits upon, the enforceability of any
term or provision of Sections 7 or 8); (vi) failure to make any Payment on or
before the date payable; (vii) failure to meet and/or maintain the Standards;
(viii) Developer (a) is adjudicated, or is, bankrupt or insolvent, (b) makes
an assignment for the benefit of creditors, or (c) seeks protection from
creditors by petition in bankruptcy or otherwise or there is filed against
Developer a similar petition which is not dismissed within thirty (30) days;
(ix) the appointment of a liquidator or receiver for (a) all or substantially
all of Developer's assets or (b) any Restaurant is sought which is not
dismissed within thirty (30) days; (x) breach or failure to perform any other
term or condition of this Agreement; (xi) an event of default shall arise
under any Franchise Agreement; (xii) Developer or any Principal pleads guilty
or no contest to or is convicted of a felony or a crime involving moral
turpitude or any other crime or offense that Friday's reasonably believes is
likely to adversely affect the Proprietary Marks, the System or the goodwill
associated therewith (whether in the Territory or elsewhere) or Friday's
interest therein; or (xiii) any (a) two (2) or more Events of Default shall
arise under any single subsection of this Section 10.01.A or (b) three (3) or
more Events of Default shall arise under this Section 10.01.A in any
continuous twelve (12) month period notwithstanding the previous cure of such
Events of Default.
B. The parties agree that an Event of Default arising under Section
10.01.A.(i), (iii), (iv) [with respect to Events of Default arising, without
limitation, under Section 7.C.(3)], (v), (vi), (viii), (ix), (xi), (xii) or
(xiii) shall constitute a Material Event of Default. The parties further
agree that Events of Default committed by Developer or any Principal arising
under other Sections of this Agreement may also be deemed to be Material
Events of Default.
C. Upon the occurrence of an Event of Default by Developer or any
Principal, Friday's may exercise one or more of the following remedies or
such other remedies as may be available at law or in equity:
(1) cure such Event of Default at Developer's expense and
in connection therewith
<PAGE>
Developer (i) hereby grants to Friday's all rights and powers necessary or
appropriate to accomplish such cure; (ii) shall indemnify and hold the
Friday's Indemnitees harmless from and against all costs, expenses (including
reasonable fees of attorneys and other engaged professionals), liabilities,
claims, demands and causes of action (including actions of third parties)
incurred by or alleged against any Friday's Indemnitee in connection with
Friday's cure; and (iii) shall reimburse or pay such costs or damages within
ten (10) days of receipt of Friday's invoice therefor;
(2) in the event of a Material Event of Default, upon
notice to Developer, terminate this Agreement and all rights granted
hereunder without waiving any (i) claim for damages suffered by Friday's; or
(ii) other rights, remedies or claims (no notice of termination shall be
required with regard to a Material Event of Default under Section
10.01.A.(viii) or (ix)); or
(3) with respect to an Event of Default arising from a
breach of covenant contained in Section 7.C.(3)(a), the affected former
employer shall be compensated by the breaching party (and Developer shall be
additionally liable for breaches by any Principal) for the reasonable costs
and expenses incurred by such employer in connection with training such
employee. Developer and each Principal acknowledge that such expenses are
impossible to accurately quantify and agree that, as liquidated damages and
not as a penalty, an amount equal to such employee's annual rate of
compensation in the final twelve (12) months of employment (or an annualized
rate if employed for a shorter period) by such former employer shall be paid
by the breaching party to the former employer at such time as such employee
commences employment.
D. Friday's shall not exercise any remedies available hereunder with
respect to the following described Events of Default unless such Events of
Default remain uncured after notice from Friday's thereof and the expiration
of the following cure periods:
(1) with respect to any Event of Default arising under
Section 10.01.A.(vi) - ten (10) days; or
(2) with respect to any Event of Default arising under
Sections 10.01.A.(i)-(v) inclusive, (vii) and (x) - thirty (30) days.
E. If any Events of Default arising under Sections 10.01.A.(i) - (v)
inclusive, (vii) or (x) cannot reasonably be cured within thirty (30) days,
Developer shall provide Friday's notice thereof (together with Developer's
best estimate of the time period required to complete such cure) and
immediately undertake efforts to cure such default within the cure period,
and continue such efforts with diligence to completion. In no event, however,
shall such cure period be extended without the prior written consent of
Friday's.
F. Developer and each Principal agree that Friday's exercise of the
rights and remedies set forth herein are reasonable. Friday's may, in
addition to pursuing any other remedies, specifically enforce such
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.
10.02 A. The following shall constitute Events of Default by
Friday's: (i) failure to comply with or perform its obligations and
agreements herein, or (ii) Friday's (a) is adjudicated, or is, bankrupt or
insolvent, (b) makes an assignment for the benefit of creditors, or (c) seeks
protection from creditors by petition in bankruptcy or otherwise or there is
filed against Friday's a similar petition which is not dismissed within
thirty (30) days.
<PAGE>
B. Upon the occurrence of a Material Event of Default by Friday's,
Developer may, upon notice to Friday's, terminate this Agreement and all
rights granted hereunder without waiving any (i) claim for damages suffered
by Developer; or (ii) other rights, remedies or claims. Any termination of
this Agreement by Developer other than as provided in this Section 10.02
shall be deemed a termination by Developer without cause.
C. Developer shall not exercise any remedies available hereunder
with respect to any Events of Default unless such Events of Default remain
uncured after (i) notice from Developer thereof and (ii) the expiration of
thirty (30) days following such notice.
D. If any Events of Default cannot reasonably be cured within thirty
(30) days, Friday's shall provide Developer notice thereof (together with
Friday's best estimate of the time period required to complete such cure) and
immediately undertake efforts to cure such default within the cure period,
and continue such efforts with diligence to completion. In no event, however,
shall such cure period be extended without the prior written consent of
Developer.
10.03 Subject to the provisions of Section 10.06, all rights and
remedies of either party shall be cumulative, and not exclusive, of any other
right or remedy described herein or available at law or in equity. The
expiration or termination of this Agreement shall not release any party from
any liability or obligation then accrued or any liability or obligation
continuing beyond, or arising from, such expiration or termination. Nothing
in this Agreement shall impair either party's right to obtain injunctive or
other equitable relief.
10.04 The failure of any party to exercise any right or remedy or to
enforce any obligation, covenant or agreement herein shall not constitute a
waiver by, or estoppel of, that party's right to any of the remedies
described herein including, without limitation, to enforce strict compliance
with any such obligation, covenant or agreement. No custom or practice shall
modify or amend this Agreement. The waiver of, or failure or inability of any
party to enforce, any right or remedy shall not impair that party's rights or
remedies with respect to subsequent Events of Default of the same, similar or
different nature. The delay, forbearance or failure of any party to exercise
any right or remedy in connection with any Event of Default or default by any
other developers shall not affect, impair or constitute a waiver of such
party's rights or remedies herein. Acceptance of any Payment shall not waive
any Event of Default.
10.05 Developer and each Principal shall, jointly and severally, pay
all costs and expenses (including reasonable fees of attorneys and other
engaged professionals) incurred by Friday's in successfully enforcing, or
obtaining any remedy arising from the breach of this Agreement. The existence
of any claims, demands or actions which Developer or any Principal may have
against Friday's, whether arising from this Agreement or otherwise, shall not
constitute a defense to Friday's enforcement of Developer's or any
Principal's representations, warranties, covenants, obligations or agreements
herein.
10.06 IN THE EVENT OF A DISPUTE BETWEEN THEM WHICH IS NOT SUBJECT
TO, NOR ARISES UNDER, SECTION 12, FRIDAY'S, DEVELOPER AND PRINCIPALS HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY
PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, BUT SPECIFICALLY EXCLUDING,
HOWEVER, DAMAGES TO THE REPUTATION AND GOODWILL ASSOCIATED WITH AND/OR
SYMBOLIZED BY THE PROPRIETARY
<PAGE>
MARKS) AGAINST THE OTHER ARISING OUT OF ANY CAUSE WHATSOEVER (WHETHER SUCH
CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR
OTHERWISE) AND AGREE THAT EACH SHALL BE LIMITED TO THE RECOVERY OF ANY ACTUAL
DAMAGES SUSTAINED BY IT. IF ANY OTHER TERM OF THIS AGREEMENT IS FOUND OR
DETERMINED TO BE UNCONSCIONABLE OR UNENFORCEABLE FOR ANY REASON, THE
FOREGOING PROVISION SHALL CONTINUE IN FULL FORCE AND EFFECT.
11. INSURANCE
A. Developer shall obtain within thirty (30) days from the date
hereof and maintain throughout the Term, such insurance coverage (including,
without limitation, auto liability coverage and workers compensation
insurance) as may be (i) required by law; or (ii) reasonably designed to
protect Developer from the risks inherent in the development activities to be
engaged in by Developer pursuant to this Agreement. Friday's shall have the
right to reasonably consent to the types and amounts of coverage and the
issuing companies. Such insurance shall:
(1) name the Friday's Indemnitees as additional insured
parties and provide that coverage applies separately to each insured and
additional insured party against whom a claim is brought as though a separate
policy had been issued to each Friday's Indemnitee;
(2) contain no provision which limits or reduces coverage
in the event of a claim by any one (1) or more of the insured or additional
insured parties;
(3) provide that policy limits shall not be reduced,
coverage restricted, canceled, allowed to lapse or otherwise altered or such
policy(ies) amended without Friday's consent, but in no event upon less than
thirty (30) days prior written notice to Friday's;
(4) be obtained from reputable insurance companies with an
A.M. Best Rating of "A" and an A.M. Best Class Rating of XIV (or comparable
ratings from a reputable insurance rating service, in the event such A.M.
Best ratings are discontinued or materially altered), authorized to do
business in the jurisdiction in which the Restaurant is located; and
(5) be in an amount and form satisfactory to Friday's; but
in no event in amounts less than the following:
(a) auto liability insurance, including coverage
of owned, non-owned and hired vehicles, with a combination of primary and
excess limits of not less than Five Hundred Thousand Dollars ($500,000.00)
for bodily injury for each person, One Million Dollars ($1,000,000.00) for
bodily injury for each occurrence and Two Hundred Fifty Thousand Dollars
($250,000.00) for each occurrence of property damage;
(b) employer's liability insurance with a limit of
not less than Five Hundred Thousand Dollars ($500,000.00); and
(c) workers compensation insurance in such amount
as may be required by applicable statute or rule.
<PAGE>
B. Such insurance may provide for reasonable deductible amounts with
Friday's consent.
C. A certificate of insurance shall be submitted for Friday's
consent within ten (10) days following commencement of such coverage, and
additional certificates of insurance shall be submitted to Friday's
thereafter, evidencing uninterrupted coverage. Developer shall deliver a
complete copy of such policy(ies) within ten (10) days of request.
D. In the event of a claim of any one or more of the Friday's
Indemnitees against Developer, Developer shall, on request of Friday's,
assign to Friday's any and all rights which Developer then has or thereafter
may have with respect to such claim against the insurer(s) providing the
coverage described in this Section.
E. Developer's obligation to obtain and maintain insurance or to
indemnify any Friday's Indemnitee shall not be limited by reason of any
insurance which may be maintained by any Friday's Indemnitee, nor shall such
insurance relieve Developer of any liability under this Agreement.
Developer's insurance shall be primary to any policies maintained by any
Friday's Indemnitee.
F. If Developer fails to obtain or maintain the insurance required
by this Agreement, as such requirements may be revised from time to time,
Friday's may acquire such insurance, and the cost thereof, together with a
reasonable fee for Friday's expenses in so acting and interest at eighteen
percent (18%) per annum from the date acquired, shall be payable by Developer
upon notice.
12. INDEMNIFICATION
A. Developer and each Principal will, at all times, indemnify and
hold harmless, to the fullest extent permitted by law, Friday's Indemnitees
from all "losses and expenses" (as defined below) incurred in connection with
any action, suit, proceeding, claim, demand, investigation or inquiry (formal
or informal), or any settlement thereof (whether or not a formal proceeding
or action has been instituted) which arises out of or is based upon any of
the following:
(1) The infringement, alleged infringement, or any other
violation or alleged violation by Franchisee or any Principal of any patent,
mark or copyright or other proprietary right owned or controlled by third
parties.
(2) The violation, breach or asserted violation or breach
by Developer or any Principal of any contract, federal, state or local law,
regulation, ruling, standard or directive or any industry standard.
(3) Libel, slander or any other form of defamation of
Friday's or the System, by Developer or any Principal.
(4) The violation or breach by Developer or any Principal
of any warranty, representation, agreement or obligation in this Agreement.
(5) Acts, errors or omissions of Developer or any of
its agents, servants, employees, contractors, partners, affiliates or
representatives.
B. Developer and each Principal agree to give Friday's immediate
notice of any such
<PAGE>
action, suit, proceeding, claim, demand, inquiry or investigation.
C. Friday's shall at all times have the absolute right to retain
counsel of its own choosing in connection with any action, suit, proceeding,
claim, demand, inquiry or investigation. Friday's shall at all times have the
absolute right to investigate any action, suit proceeding, claim or demand
itself.
D. Developer and each Principal shall indemnify Friday's Indemnitees
for attorneys' fees, expenses, and costs incurred in connection with the
exercise of Friday's rights under Section 12. This provision shall not be
construed so as to limit or in any way affect Developer's indemnity
obligations pursuant to the other provisions of Section 12.
E. In the event that Friday's exercise of its rights under Section
12 actually results in Developer's insurer with respect to insurance required
to be maintained by Developer pursuant to Section 11 (hereinafter, the
"Insurer") refusing to pay on a third party claim, all causes of action and
legal remedies which Developer might have against the Insurer shall be
automatically assigned to Franchisor without the need for any further action
on Friday's or Developer's part. For the purposes of Section 12, "actually
results" means that, but for Friday's exercise of its rights under Section
12, the Insurer would not have refused to pay on said third-party claim.
F. In the event that Friday's exercise of its rights under Section
12 actually results in the Insurer refusing to pay on a third-party claim,
Developer shall not be required to indemnify Friday's for the latter's
attorneys' fees, expenses and costs incurred in connection with that claim.
G. In the event that the Insurer subsequently reverses its previous
decision to not pay a claim, by in fact paying that claim, Developer shall be
required to indemnify Friday's for the latter's attorneys' fees, expenses and
costs incurred in connection with that claim, just as if the Insurer had
never denied the claim.
H. In the event that Developer encourages, requests, or suggests
that the Insurer deny a claim, Developer shall indemnify Friday's for its
attorneys' fees, expenses and costs in connection with that claim.
I. Subject to the provisions of Section 12.B. above, in order to
protect persons or property, or its reputation or goodwill, or the reputation
or goodwill of others, Friday's may, at any time and without notice, as it,
in its judgment deems appropriate, consent or agree to settlements or take
such other remedial or corrective action as it deems expedient with respect
to the action, suit, proceeding, claim, demand, inquiry or investigation if,
in Friday's sole judgment, there are reasonable grounds to believe that:
(1) any of the acts or circumstances enumerated in Section
12.A. above have occurred; or
(2) any act, error, or omission of Developer or any
Principal may result directly or indirectly in damage, injury or harm to any
person or any property.
J. In addition to their indemnity obligations under Section 12.D.,
Developer and each Principal shall indemnify Friday's for any and all losses,
compensatory damages, exemplary or punitive damages, fines, charges, costs,
expenses, lost profits, settlement amounts, judgments, compensation for
damages to Friday's reputation and goodwill, costs of or resulting from
delays, financing, costs of
<PAGE>
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, which result from any of the items set
forth in Section 12.
K. Friday's does not assume any liability whatsoever for acts,
errors, or omissions of those with whom Developer or any Principal may
contract, regardless of the purpose. Developer and each Principal shall hold
harmless and indemnify Friday's for all losses and expenses which may arise
out of any acts, errors or omissions of these third parties.
L. Under no circumstances shall Friday's be required or obligated to
seek recovery from third parties or otherwise mitigate its losses in order to
maintain a claim against Developer or any Principal. Developer and each
Principal agree that the failure to pursue such recovery or mitigate loss
will in no way reduce the amounts recoverable by Friday's from Developer or
any Principal.
M. Notwithstanding anything to the contrary contained in this
Agreement, Developer is not required to indemnify Friday's with regard to any
infringement, alleged infringement or other violation or alleged violation by
Developer or any Principal of any patent, mark, or copyright or other
proprietary right owned or controlled by a third party, arising in connection
with the use of the Proprietary Marks and System franchised to Developer when
used in the manner authorized and required by Friday's pursuant to this
Agreement. In the event Developer is involved in such an action, Friday's
agrees to indemnify Developer Indemnitees in connection with the defense
thereof, and to indemnify and hold Developer Indemnitees harmless from any
and all losses, damages, claims, liabilities, expenses, including attorney's
fees (prior to litigation, during litigation, and on appeal) and all costs
(whether taxed or not taxed) in connection with proceedings regarding the
same. Developer shall give notice to Friday's of any such claim no later than
fifteen (15) days after Developer becomes aware of same or is given notice
thereof. This indemnity shall be inoperative to the extent that failure to
have timely provided such notice to Friday's materially impairs Friday's
ability to defend any such claim, in whole or in part, or to minimize the
costs of this indemnity. Developer shall not be required to defend Friday's
with regard to Developer's utilization pursuant to this Agreement of the
Proprietary Marks and System provided such utilization is in strict
compliance with that authorized and required by Friday's pursuant to this
Agreement.
13. NOTICES
All notices required or desired to be given hereunder shall be in
writing and shall be sent by personal delivery, expedited delivery service,
facsimile or certified mail, return receipt requested to the following
addresses (or such other addresses as designated pursuant to this Section 13):
if to Friday's: TGI Friday's Inc.
Attention: General Counsel
7540 LBJ Freeway, Suite 100
Dallas, Texas 75251
Facsimile No.: (972) 450-5636
if to Developer or any Principal: __________________________
__________________________
__________________________
__________________________
<PAGE>
__________________________
Facsimile No._____________
Notices posted by personal delivery, expedited service or given by
facsimile shall be deemed given the next business day after transmission.
Notices posted by certified mail shall be deemed received three (3) Business
Days after the date of posting. Any change in the foregoing addresses shall
be effected by giving fifteen (15) days written notice of such change to the
other party.
14. FORCE MAJEURE
No party shall be liable for any inability to perform resulting from
acts of God or other causes (other than financial inability or insolvency)
beyond their reasonable control; provided, however, that nothing herein shall
excuse or permit any delay or failure (i) to remit any Payment on the date
due; or (ii) for more than one-hundred eighty (180) days. The party whose
performance is affected by an event of force majeure shall, within three (3)
days of the occurrence of such event, give notice thereof to the other party
setting forth the nature thereof and an estimate of its duration.
15. SEVERABILITY
A. 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, 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
Friday's reasonable judgment, Friday's ability to realize the principal
purpose of the Agreement or preserve its or TGIFM's rights in, or the
goodwill underlying, the Proprietary Marks, the System, or the Confidential
Information, Friday's may terminate this Agreement upon notice to Developer.
B. Captions in this Agreement are for convenience only and shall not
affect the meaning or construction of any provision hereof.
16. INDEPENDENT CONTRACTOR
A. Developer is an independent contractor. Friday's does not operate
the Developer's business. Nothing herein shall create the relationship of
principal and agent, legal representative, joint ventures, partners, employee
and employer or master and servant between the parties. No fiduciary duty is
owed by, or exists between, the parties.
B. Nothing herein authorizes Developer or any Principal to make any
contract, agreement, warranty or representation or to incur any debt or
obligation in Friday's name.
17. DUE DILIGENCE AND ASSUMPTION OF RISK
A. Developer and each Principal (i) have conducted such due
diligence and investigation as each desires; (ii) recognize that the business
venture described herein involves risks; and (iii)
<PAGE>
acknowledge that the success of such business venture is dependent upon the
abilities of Developer and Principals. FRIDAY'S EXPRESSLY DISCLAIMS THE
MAKING OF, AND DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE THAT THEY HAVE NOT
RECEIVED OR RELIED UPON, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
AS TO THE POTENTIAL PERFORMANCE OR VIABILITY OF THE BUSINESS VENTURE
CONTEMPLATED BY THIS AGREEMENT.
B. Developer and each Principal have received, read and understand
this Agreement, the documents referred to herein and the Exhibits and
Schedules hereto. Developer and each Principal have had ample time and
opportunity to consult with their advisors concerning the potential benefits
and risks of entering into this Agreement.
18. MISCELLANEOUS
A. Time is of the essence to this Agreement.
B. There are no third party beneficiaries to this Agreement except
for the remedy provided for breach of Developer's or any Principal's covenant
contained in Section 7.C.(3)(a), the provision for liquidated damages
contained in Section 10.01.C.(3), and the rights and remedies provided for in
EXHIBIT B.
C. 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.
D. All references herein to the masculine, neuter or singular shall
be construed to include the masculine, feminine, neuter or plural, unless
otherwise suggested by the text.
E. This Agreement will become effective only upon execution hereof
by the President or a vice president of Friday's.
F. This Agreement is not a franchise agreement and does not grant
Developer or any Principal any rights in or to the (i) System (except as
expressly provided herein); or (ii) Proprietary Marks.
G. Developer shall not use the words "FRIDAY'S-Registered
Trademark-", "T.G.I. FRIDAY's-Registered Trademark-", "TGIF(R)" OR "THE
AMERICAN BISTRO-Registered Trademark-", or any part thereof, as part of its
corporate or other name.
H. Developer and each Principal acknowledge that each has received a
complete copy of this Agreement, the documents referred to herein and the
Exhibits and Addenda hereto at least five (5) business days prior to the date
on which this Agreement was executed. Developer and each Principal further
acknowledge that each has received the disclosure document required by the
Trade Regulation Rule of the Federal Trade Commission entitled "Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures" at least ten (10) business days prior to the date on which this
Agreement was executed.
19. CHOICE OF LAW; JURISDICTION; VENUE
A. DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE THAT FRIDAY'S
<PAGE>
MAY GRANT DEVELOPMENT RIGHTS THROUGHOUT THE UNITED STATES ON TERMS AND
CONDITIONS SIMILAR IN CERTAIN MATERIAL RESPECTS TO THOSE SET FORTH IN THIS
AGREEMENT, AND THAT IT IS OF MUTUAL BENEFIT TO DEVELOPER AND EACH PRINCIPAL
AND TO FRIDAY'S THAT THESE TERMS AND CONDITIONS BE UNIFORMLY INTERPRETED.
THEREFORE, THE PARTIES AGREE THAT TO THE EXTENT THE LAW OF THE STATE OF TEXAS
IS HELD ENFORCEABLE, TEXAS LAW SHALL APPLY TO THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT (EXCEPT FOR TEXAS CHOICE OF LAW RULES) AND
SHALL GOVERN ALL QUESTIONS WHICH ARISE WITH REFERENCE HERETO.
B. THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT SHALL BE PERFORMED IN
SUBSTANTIAL PART IN DALLAS COUNTY, TEXAS. THE PARTIES THEREFORE AGREE THAT
ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE PERFORMANCE THEREOF WHICH CANNOT BE AMICABLY SETTLED, EXCEPT
AS OTHERWISE PROVIDED HEREIN, SHALL BE RESOLVED BY A PROCEEDING IN A COURT IN
DALLAS COUNTY, TEXAS, AND DEVELOPER AND PRINCIPALS EACH IRREVOCABLY ACCEPT
AND SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE
FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS FOR SUCH CLAIMS, CONTROVERSIES
OR DISPUTES; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION WHICH INCLUDES
INJUNCTIVE RELIEF, OR ANY ACTION FOR THE RECOVERY OF ANY PROPERTY, REAL OR
PERSONAL, FRIDAY'S MAY BRING SUCH ACTION IN ANY STATE WHICH HAS JURISDICTION.
20. ENTIRE AGREEMENT
This Agreement and the Exhibits, Addenda and Schedules
hereto constitute the entire agreement between Friday's, Developer and the
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 CONCERNING THE SUBJECT MATTER HEREOF, INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING,
EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT THOSE PERMITTED TO
BE MADE UNILATERALLY BY FRIDAY'S HEREUNDER, NO AMENDMENT, CHANGE OR VARIANCE
FROM THIS AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED
TO BY FRIDAY'S AND DEVELOPER AND EXECUTED IN WRITING.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the day and year first above written.
TGI FRIDAY'S INC. DEVELOPER
By: _____________________ By: ________________________
Name: _____________________ Name: ________________________
Title: _____________________ Title: ________________________
Date: _____________________ Date: ________________________
<PAGE>
Each Principal acknowledges, covenants and represents as follows:
(1) each has read the terms and conditions of this Agreement;
(2) each is a "Principal" as described in this Agreement;
(3) each is the owner of and has the right to vote the percent of
the Securities of Developer indicated next to the signature below of
each Principal;
(4) each makes all of the representations, warranties, covenants and
agreements of the Developer (including liability to make Payments) and a
Principal set forth in this Agreement (including, without limitation, the
covenants and agreements concerning Transfer, non-compete and maintenance of
Confidential Information) and is obligated to perform thereunder;
(5) each individually, jointly and severally, irrevocably and
unconditionally guarantees that all of Developer's obligations under the
terms and conditions of this Agreement will be timely paid and performed;
(6) each acknowledges that Friday's may, without notice to
Principals, waive, renew, extend, modify, amend or release any indebtedness
or obligation of Developer, or settle, adjust, or compromise any claims
against Developer;
(7) each waives all demands and notices of every kind with respect
to this guaranty including, without limitation, notice 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
Agreement or the obligations of Developer. Friday's may pursue its rights
against Developer's Principals without first exhausting its remedies against
Developer and without joining any other guarantor hereto, and no delay on the
part of Friday's in the exercise of any right or remedy shall operate as a
waiver of such right or remedy;
(8) each has derived and expects to derive financial or other
benefit, directly or indirectly, from this Agreement and the transaction
described herein;
(9) each acknowledges that his/its execution of this Agreement, and
his/its undertakings and agreements herein, has induced Friday's to enter
into the transactions described in, and to execute, this Agreement;
(10) each consents to and shall be bound by any amendment of
this Agreement made by Friday's and Developer pursuant to the terms hereof;
and
(11) each has executed, concurrent herewith, the Guaranty Agreement
on EXHIBIT B.
<CAPTION>
PRINCIPALS Securities
Voting %
--------------------------- --------
Name:
-----------------
--------------------------- --------
Name:
-----------------
<PAGE>
EXHIBIT 10.8
ADDENDUM A TO DEVELOPMENT AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [PRINCIPAL'S NAME] [an
individual residing in the state of _______________ OR a corporation/partnership
organized under the laws of the state of _________________] ("Principal"), and
TGI Friday's Inc., a corporation organized under the laws of the state of New
York ("Friday's"), in connection with that certain Development Agreement dated
________________, _____ (the "Development Agreement"), by and between Friday's
and ("Developer").
WHEREAS, Friday's and Developer have entered into the Development
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Friday's and is not generally known to, and not legally available to,
third parties; and
WHEREAS, Friday's has taken and intends to take all steps necessary
to maintain the confidentiality of the Confidential Information; and
WHEREAS, Principal will receive, and desires to receive, the
Confidential Information in his capacity as a Principal of Developer; and
WHEREAS, this Agreement is executed and delivered pursuant to
Section 6.C. of the Development Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Principal and Friday's agree as follows:
1. Capitalized terms used herein and not otherwise defined shall
have the meanings attributed to them in the Development Agreement.
2. Friday's shall disclose to Principal some or all of the
Confidential Information which may be utilized by Principal solely (a) in his
capacity as a Principal of Developer and (b) in connection with Developer's
performance of its duties and obligations pursuant to the Development
Agreement. No other use or disclosure of any of the Confidential Information
shall be made by Principal. Principal acknowledges and agrees that Friday's
or TGIFM is the exclusive owner of the Confidential Information, the System
and the Proprietary Marks. Principal shall not, directly or indirectly,
contest or impair Friday's or TGIFM's ownership of, or interest in, the
Confidential Information, the System or the Proprietary Marks.
3. Principal shall receive the Confidential Information in strict
confidence. The Confidential Information may be utilized by Principal only
(a) so long as Principal remains a Principal of Developer and (b) during the
Term. The Confidential Information shall not be used in any manner that is
adverse or detrimental to, or competitive with, Friday's, TGIFM or Developer.
Except as permitted pursuant to the Development Agreement or this Agreement,
the Confidential Information shall not, without the prior written consent of
Friday's, be (i) copied, (ii) compiled (in total or in part) with other
information, or (iii) disclosed to any third party.
<PAGE>
4. Principal shall not communicate, disclose or use the Confidential
Information, or any part thereof, except as (a) permitted herein or (b)
required by law. The Confidential Information may be disclosed to Principal's
agents, consultants, contractors and employees who need to know the
Confidential Information for the sole purpose of providing services to
Principal in his capacity as a Principal of Developer. Prior to such
disclosure of any Confidential Information, each of such agents, consultants,
contractors and employees shall (a) be advised by Principal of the
confidential and proprietary nature of the Confidential Information and (b)
agree to be bound by the terms and conditions of this Agreement.
Notwithstanding such agreement, Principal shall indemnify the Friday's
Indemnitees from and against any damages, costs (including reasonable fees of
attorneys and other engaged professionals) and expenses resulting from any
disclosure or use of the Confidential Information, or any part thereof, by
such agents, representatives or employees contrary to the terms hereof.
5. In the event Principal or Principal's agents, representatives, or
employees receive notice of any request, demand or order to transfer or
disclose all or any portion of the Confidential Information, Principal 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, Principal shall fully cooperate with and assist
Friday's in protecting the confidentiality of the Confidential Information to
the maximum extent permitted by law.
6. Immediately upon Friday's request or upon any termination or
expiration of the Term, 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 Principal, its agents, representatives or employees, and any copies
thereof.
7. Each of the representations, warranties, covenants,
acknowledgments and agreements of Principal, and the rights and remedies of
Friday's in connection therewith, contained in the Development Agreement
including, without limitation, those contained in Sections 6, 7.C.(3), 8.B,
8.C, 8.E and 10 of the Development Agreement, are incorporated in this
Agreement by reference as if fully set forth. In connection with Friday's
enforcement of such rights and remedies (or other rights and remedies of
Friday's under this Agreement), any court of competent jurisdiction selected
by Friday's shall have personal jurisdiction over Principal, to which
jurisdiction Principal irrevocably consents. The parties agree that to the
extent the law of the State of Texas is held enforceable, Texas law shall
apply to the interpretation and construction of this Agreement (except for
Texas choice of law rules) and shall govern all questions which arise with
reference hereto.
8. Friday's may, in addition to pursuing any other remedies,
specifically enforce such 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 Friday's right to obtain equitable relief.
9. 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, 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.
<PAGE>
10. Any of Principal's agreements, obligations or covenants which
contemplate performance thereof after the termination or expiration of this
Agreement shall survive such termination or expiration.
11. Principal acknowledges and warrants that he has derived and
expects to derive financial or other advantage and benefit, directly or
indirectly, from the Development Agreement, this Agreement and/or the
provision of the Confidential Information to Developer and/or Principal.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
on the dates indicated below.
TGI FRIDAY'S INC. PRINCIPAL
By: _______________________ ____________________________
Name: _______________________ Name: ______________________
Title: _______________________ Date: ______________________
Date: _______________________
<PAGE>
EXHIBIT 10.8
ADDENDUM B TO DEVELOPMENT AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [EMPLOYEE'S NAME], an
individual residing in the state of _______________ ("Employee"), ["DEVELOPER'S
NAME"], [an individual residing in the state of _______________ OR a
corporation/partnership organized under the laws of the State of
_________________] ("Developer"), in connection with that certain Development
Agreement dated ________________, _____ (the "Development Agreement"), by and
between TGI Friday's Inc. ("Friday's") and Developer.
WHEREAS, Friday's and Developer have entered into the Development
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Friday's, and is not generally known to, and is not legally available to,
third parties; and
WHEREAS, Friday's has taken and intends to take all steps necessary
to maintain the confidentiality of the Confidential Information; and
WHEREAS, it will be necessary for certain employees of Developer to
have access to and to use some or all of the Confidential Information in
connection with the performance of their job functions related to the
development, construction and operation of Restaurants under the System; and
WHEREAS, Employee is the [INSERT TITLE] of Developer; and
WHEREAS, Employee needs to receive, and desires to receive and use,
the Confidential Information in the course of his employment by Developer in
order to effectively perform his job function; and
WHEREAS, the Agreement is executed and delivered pursuant to Section
6.C. of the Development Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Employee and Developer agree as follows:
1. Capitalized terms used herein and not otherwise defined shall
have the meanings attributed to them on ANNEX A hereto.
2. Developer or Friday's, acting on behalf of Developer, shall
disclose to Employee some or all of the Confidential Information which may be
utilized by Employee solely (a) in his capacity as the [TITLE] of Developer
and (b) in connection with Employee's performance of his job functions. No
other use or disclosure of any of the Confidential Information shall be made
by Employee. Employee acknowledges and agrees that Friday's or TGIFM is the
exclusive owner of the Confidential Information, the System and the
Proprietary Marks. Employee shall not, directly or indirectly, contest of
impair Friday's or TGIFM's ownership of, or interest in, the Confidential
Information, the System or the Proprietary Marks.
3. Employee shall receive the Confidential Information in strict
confidence. The Confidential Information may be utilized by Employee only (a)
so long as Employee is employed by
<PAGE>
Developer and (b) during the Term. The Confidential Information shall not be
used in any manner that is adverse or detrimental to, or competitive with,
Friday's, TGIFM or Developer. Except as permitted pursuant to this Agreement,
the Confidential Information shall not, without the prior written consent of
Friday's, be (i) copied, (ii) compiled (in total or in part) with other
information, or (iii) disclosed to any third party.
4. Employee shall not communicate, disclose or use the Confidential
Information, or any part thereof, except as (a) permitted herein or (b)
required by law. The Confidential Information may be disclosed to fellow
employees as necessary to train or assist such other employees of Developer
in the performance of their job functions with respect to the development,
construction or operation of a Restaurant. Prior to such disclosure of any
Confidential Information, each such employee shall (i) be advised by Employee
of the confidential and proprietary nature of the Confidential Information
and (ii) agree to be bound by the terms and conditions of this Agreement.
5. In the event Employee receives notice of any request, demand, or
order to transfer or disclose all or any portion of the Confidential
Information, Employee shall immediately notify Developer 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, Employee shall fully cooperate with
and assist Friday's in protecting the confidentiality of the Confidential
Information to the maximum extent permitted by law.
6. Immediately upon Friday's request, upon Employee's termination of
employment with Developer, or upon the conclusion of the use for which any
Confidential Information was furnished, Employee 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, and any copies thereof, to Developer or Friday's.
7. In order to protect the goodwill and unique qualities of the
System and the confidentiality and value of the Confidential Information, and
in consideration of the disclosure to Employee of the Confidential
Information, Employee covenants that, during the period of his employment by
Developer and for a period of one (1) year following termination of such
employment, Employee shall not, 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 (i) by Friday's or Developer, (ii) by any developer or
franchisee of Friday's, or (iii) in any other concept or system owned,
operated or franchised by an Affiliate, as a director, officer or in any
managerial capacity;
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
radius of three (3) miles of any restaurant which is a part of any concept or
system owned, operated or franchised by Friday's or any Affiliate.
8. In connection with the enforcement of rights and remedies under
this Agreement, any court of competent jurisdiction selected by Developer or
Friday's shall have personal jurisdiction over
<PAGE>
Employee, to which jurisdiction Employee irrevocably consents. THE PARTIES
AGREE THAT TO THE EXTENT THE LAW OF THE STATE OF TEXAS IS HELD ENFORCEABLE,
TEXAS LAW SHALL APPLY TO THE INTERPRETATION AND CONSTRUCTION OF THIS
AGREEMENT (EXCEPT FOR TEXAS CHOICE OF LAW RULES) AND SHALL GOVERN ALL
QUESTIONS WHICH ARISE WITH REFERENCE HERETO.
9. A. Employee acknowledges and agrees that (i) Friday's is a third
party beneficiary to this Agreement and (ii) Friday's exercise of the rights
and remedies set forth herein is reasonable.
B. Developer or Friday's may, in addition to pursuing any other
remedies, specifically enforce such obligations and covenants or obtain
injunctive or other equitable relief in connection with the violation or
anticipated violation of such obligations and covenants 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 Developer's or Friday's right to obtain equitable relief.
C. With respect to Employee's breach of the covenants contained
in Section 7.A hereof, the affected former employer shall be compensated by
Employee for the reasonable costs and expenses incurred by such employer in
connection with training such employee. Developer and Employee acknowledge
that such expenses are impossible to accurately quantify and agree that, as
liquidated damages and not as a penalty, an amount equal to such employee's
annual rate of compensation in the final twelve (12) months of employment (or
an annualized rate if employed for a shorter period) by such former employer
shall be paid by Employee to the former employer at such time as such
employee commences employment.
10. 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, 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.
11. Any of Employee's agreements, obligations or covenants which
contemplate performance thereof after the termination or expiration of this
Agreement shall survive such termination or expiration.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
on the dates indicated below.
[EMPLOYEE] DEVELOPER
Name: By: ________________________
Date: Name: ______________________
Title: ______________________
Date: ______________________
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EXHIBIT 10.8
ANNEX A TO COVENANT AND AGREEMENT FOR CONFIDENTIALITY
AFFILIATE - Carlson Restaurants Worldwide Inc., or any subsidiary thereof or
any subsidiary of TGI Friday's Inc.
COMMENCEMENT DATE - ___________________, _____.
COMPETING BUSINESS - a restaurant or bar/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.
CONFIDENTIAL INFORMATION - the System, the Development Manual, the Manuals,
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 or Employee to be considered confidential by Friday's, or
(iii) by its nature inherently or reasonably considered confidential.
DEVELOPMENT MANUAL - Friday's manual, as amended from time to time,
describing (generally) the procedures and parameters required for the
development of T.G.I. Friday's-Registered Trademark- Restaurants in the
United States.
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.
MANUALS - Friday's confidential operating manuals, as amended from time to
time in Friday's sole discretion, which contain the instructions,
requirements, Standards, specifications, methods and procedures for the
operation of the Restaurants including (i) those relating to the selection,
purchase, service and sale of all products being sold at the Restaurants,
(ii) those relating to the maintenance and repair of the Restaurants,
buildings, grounds, equipment, signs, interior and exterior decor items,
fixtures and furnishings and (iii) those relating to employee apparel and
dress, accounting, bookkeeping, record retention and other business systems,
procedures and operations.
PROPRIETARY MARKS - certain trademarks, trade names, service marks, emblems
and indicia of origin designated by Friday's from time to time in connection
with the operation of Restaurants pursuant to the System in the Territory,
including, without limitation, "TGI FRIDAY'S-Registered Trademark-",
"FRIDAY'S-Registered Trademark-" and "THE AMERICAN BISTRO-Registered
Trademark-".
RESTAURANT(S) - a T.G.I. Friday's-Registered Trademark- Restaurant(s)
developed pursuant to the Development Agreement.
STANDARDS - the standards and specifications, as amended from time to time by
Friday's in its sole discretion, 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 in Friday's sole
discretion) for the establishment and operation of full-service restaurants
under the Proprietary Marks, which includes, without limitation, a
distinctive image consisting of exterior and interior design, decor, color
scheme and furnishings; special recipes,
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menu items and full service bar; employee uniform standards, products,
services and specifications; procedures with respect to operations and
inventory and management control; training and assistance; and advertising
and promotional programs.
TERM - the duration of the Development Agreement, commencing on the
Commencement Date and continuing until _________________, 20___, unless
sooner terminated.
TERRITORY - the geographical area described and set forth in EXHIBIT C.
TGIFM - TGI Friday's of Minnesota Inc., a Minnesota corporation and a
subsidiary of Friday's.
T.G.I. FRIDAY'S-Registered Trademark- RESTAURANTS - restaurants operated in
accordance with the System under the Proprietary Marks.
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EXHIBIT 10.8
EXHIBIT B TO DEVELOPMENT AGREEMENT
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is made as of the ____ day
of ________________________, _____, by the undersigned (hereinafter referred
to individually and collectively as "Guarantors" whether one or more) in
favor of TGI Friday's Inc., a New York Corporation ("Friday's").
WHEREAS, Friday's, [Developer's name], and certain other individuals
and/or entities entered into that certain Development Agreement
dated __________________, _____ (the "Development Agreement") regarding the
development of T.G.I. Friday's-Registered Trademark- restaurants located in
certain territory stated therein (the "Restaurant");
WHEREAS, as an inducement to Friday's to enter into the Development
Agreement, the undersigned Guarantors have agreed to make and deliver this
Guaranty to Friday's.
NOW THEREFORE, FOR VALUE RECEIVED, Guarantors, jointly and
severally, if more than one, hereby acknowledge and agree as follows:
1. Each has read the terms and conditions of this Guaranty and of the
Development Agreement.
2. Each is a "Principal" as defined in the Development Agreement.
3. Each makes all of the representations, warranties, covenants and
agreements of the Developer (including liability to make Payments) and a
Principal set forth in the Development Agreement (including, without
limitation, the covenants and agreements concerning Transfer, non-compete and
maintenance of Confidential Information) and is obligated to perform
thereunder.
4. Each acknowledges that Friday's may, without notice to Guarantors and
without affecting the obligations of any of the Guarantors under this
Guaranty, waive, renew, extend, modify, amend or release any indebtedness or
obligation of Developer, or settle, adjust, or compromise any claims against
Developer;
5. Each waives all demands and notices of every kind with respect to this
Guaranty including, without limitation, notice of presentment, demand for
payment or performance by Developer, notice of any default by Developer or
any Guarantor, and any release of any Guarantor or other security for the
Development Agreement or the obligations of Developer. Friday's may pursue
its rights against Guarantors without first exhausting its remedies against
Developer and without joining any other Guarantor hereto, and no delay on the
part of Friday's in the exercise of any right or remedy shall operate as a
waiver of such right or remedy;
6. Each individually, jointly and severally, irrevocably and unconditionally
guarantees that all of Developer's obligations under the terms and conditions
of the Development Agreement will be timely paid and performed;
7. Each has derived and expects to derive financial or other benefit,
directly or indirectly, from the Development Agreement and the transaction
described therein;
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8. Each acknowledges that his/its execution of the Development Agreement, and
his/its undertakings and agreements herein, have induced Friday's to enter
into the transactions described in, and to execute, the Development Agreement.
9. Each consents to and shall be bound by any amendment of the Development
Agreement made by Friday's and Developer pursuant to the terms thereof.
GUARANTORS
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EXHIBIT 10.8
EXHIBIT C TO DEVELOPMENT AGREEMENT
THE TERRITORY