Sample Business Contracts

Software License Agreement - Friendly Ice Cream Corp. and FriendCo Restaurants Inc.

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                             SOFTWARE LICENSE AGREEMENT
                           FRIENDLY ICE CREAM CORPORATION
                                  1855 Boston Road
                          Wilbraham, Massachusetts   01095
                             FRIENDCO RESTAURANTS, INC.
                               1657 Crofton Boulevard
                             Crofton, Maryland   21114
                                 July ____, 1997


                                  TABLE OF CONTENTS

    1.   Grant of License                             1

    2.   Support                                      2

    3.   Term 3

    4.   Fee  4

    5.   Ownership of the Product:  Confidentiality   4

    6.   Warranty; Exclusion of Warranties  5

    7.   Hold Harmless and Indemnity   7

    8.   Limitation of Liability  8

    9.   Documentation  8

    10.  Notices   9

    11.  Payment   9

    12.  Modifications to Product 9

    13.  Entire Agreement    10

    14.  Governing  Laws     10

    15.  Invalid Provision   10

    Exhibit A:     Maintenance Agreement

                              SOFTWARE LICENSE AGREEMENT

    THIS AGREEMENT,  entered into as of the _____ day of __________, 199__, 
is by and between  FRIENDLY'S RESTAURANTS FRANCHISE, INC. (hereinafter 
("Friendly's") and FRIENDCO RESTAURANTS, INC.  hereinafter ("Franchisee").

    This Agreement states the terms, covenants and the conditions under which 
Friendly's will make available  to the Franchisee a proprietary computer 
program or programs (hereinafter individually and collectively,  depending on 
context, referred to as "Product").

    1.   Grant of License.  Friendly's has developed, or obtained the rights
to use and license Franchisee to use, the  Product.  Friendly's hereby grants
to the Franchisee the non-exclusive, nonassignable, limited right to use the
Product on the computer system located at the Franchisee's Restaurant
("Restaurant") located at              
______________________________________. The right granted to the Franchisee 
hereunder is personal in  nature and, further, may not be used at a location 
other than the location stated herein unless and until the  Franchise is 
transferred to a replacement restaurant pursuant to the terms of the 
Development Agreement or the  Franchise Agreement. The Product may not be 
used for any purpose other than processing the Restaurant's data.  The  
Product shall include both the Fischer Processing System and the Automated  


Labor Scheduling System,  when available.

    2.   Support.  Friendly's will provide personnel to assist Franchisee 
with the installation of the Product on  Franchisee's computer system at the 
Restaurant under one of two options to be selected by the franchisee 

    a)   Friendly's personnel will spend up to five days training the 
Franchisee's designated training team (not to  exceed 4 people) on location 
at no charge; additional days needed beyond the five days will be billed at 
reasonable costs and expenses.

    b)   Friendly's personnel will develop and execute a comprehensive 
training plan for the restaurant staff (not to  exceed 60 people); this 
customized and more extensive approach will be billed at an amount mutually 
agreed  to by Friendly's and Franchisee.

    Friendly's will make available to Franchisee certain support services. 
During the first year of the term of this  Agreement, Franchisee agrees to 
enter into and maintain a software maintenance agreement (attached as Exhibit 
 A) with Friendly's covering maintenance, upgrades and enhancements to the 
Product. Provided that  Franchisee has a software maintenance agreement in 
effect with Friendly's, Friendly's will provide to Franchisee later  versions 
of or enhancements to the Product, and Franchisee agrees to install and use 
such later versions or  enhancements, subject to the terms of this Agreement. 
 The software maintenance agreement currently provides  for a Six Hundred 
Dollar ($600.00) annual fee per restaurant and is cancelable on two (2) 
month's notice to Friendly's and renewal shall

be at the discretion of Franchisee and Friendly's.  Provided that Franchisee 
elects to enter into and maintain  a software maintenance agreement, the 
Franchisee may opt to obtain  "Help Desk" service for each restaurant 
franchised by Friendly's to Franchisee at a cost to Franchisee of One Hundred 
Dollars ($100.00) per month per  franchised restaurant.

    3.   Term.  This Agreement is effective as of the date hereof and shall 
terminate on the earlier of:

    a)   the termination or expiration of the franchise or license agreement 
for the Restaurant between Friendly's  and Franchisee;

    b)   the Franchisee's failure to cure any default under this Agreement 
within thirty (30) days after Franchisee's  receipt of written notice of such 
default; or if such default is not curable within thirty (30) days; 
Franchisee's failure to commence and diligently pursue such cure within 
thirty (30) days after written notice; or 

    c)   Friendly's delivery of notice to Franchisee that further use of the 
Product is not legally authorized due to  the decision of a court of law, 
government authority or other legal enforcement body. 

    Upon termination of this Agreement, Franchisee shall:  (i) cease using 
the Product, (ii) cause the Product to  be completely erased from its 
computer system, including any backup copies, (iii) promptly return each and  
every Product, including all documentation

and copies thereof, and (iv) certify within fifteen (15) business days of the
termination that the obligations of  this Section 3 have been complied with.

    Franchisee may terminate this Agreement and the license granted hereunder 
at any time by ceasing to use the  Product and otherwise complying with the 
preceding paragraph. 

    4.   Fee.  The one time license fee for the use of the Product is  One 
Thousand Five Hundred Dollars  ($1,500.00), plus a Five Hundred Dollar 
($500.00) X Cellnet License fee, per restaurant, which shall be waived for 
the thirty-four (34) original Franchised Restaurants.  The annual software 
maintenance fee is Six Hundred Dollars  ($600.00) per restaurant per year and 
may be adjusted from time to time.  The software maintenance fee shall be 
waived for the first year for the thirty-four (34) original Franchised 
Restaurants and  any managed restaurants  which are converted to Franchised 
Restaurants pursuant to subparagraph 1B of the Purchase and Sale  Agreement 
dated July 10, 1997.  Franchisee is responsible for the acquisition of the 
required hardware, as outlined in  the UFOC, in order to insure that the 
Product runs properly, and for obtaining an approved hardware  maintenance 
contract in order for Friendly's to perform its obligations pursuant to the 
software maintenance agreement. 

    5.   Ownership of the Product:  Confidentiality.  Friendly's is the owner 
of the Product, or is otherwise authorized to  make available to Franchisee 
the Product, and warrants that it has full and complete authority to enter 
into this Agreement with Franchisee.

    Franchisee acknowledges that the Product is a valuable trade secret of 
Friendly's, the author or the owner of  the Product.  Friendly's, the author 
or the owner of the Product developed the Product through the  expenditure of 
substantial time, effort and money.  Friendly's, the author and the owner of 
the Product wish to, and  Franchisee agrees to, maintain in strict confidence 
and withhold from disclosure to unauthorized persons any data  or information 
concerning the Product.  Franchisee hereby agrees that the Product and any 
information,  knowledge and factual data related to the Product which may be 
imparted to the Franchisee by Friendly's, the author  or the owner of the 
Product at any time, or from time to time, will not be copied (except one 
back-up copy of  the Product is permitted) or communicated to any third 
party, except for information required by employees of  the Franchisee for 
use only in performing their duties on behalf of Franchisee and which is to 
be retained in confidence by such employees.  This Agreement creates in the 
Franchisee a license to obtain and utilize the  Product for the limited 
purposes provided herein, but confers no right, title or interest in or to 
the Product, which title shall continue to vest solely in Friendly's, the 
author or owner of the Product. 

    6.   Warranty; Exclusion of Warranties.  Friendly's warrants that the 
Product will function in accordance with the  specifications contained in the 
Friendly's authored documentation delivered by Friendly's, so long as  
Franchsee uses a Friendly's-supported version of the Product.  THIS WARRANTY 



    Franchisee hereby acknowledges that Friendly's has made no 
representations or warranties to Franchisee  with  respect to the Product 
inconsistent with those described in materials previously provided to 
Franchisee.   All warranties and guarantees, if any, that affect Franchisee's 
use of the Product are expressly contained herein. 

    In the event of significant malfunction of the Product, provided that 
Franchisee promptly notifies Friendly's  thereof, Friendly's will use all 
commercially reasonable efforts to correct any fault occurring in the Product 
or replace the Product with a comparable substitute, other than faults caused 
by the intentional or negligent acts  of the Franchisee or Franchisee's 
employees or independent contractors, or by the malfunction of Franchisee  
computer system.

    Provided that Franchisee is not in default of this Agreement during the 
term hereof, Friendly's will defend  Franchisee against any claim or suit 
brought against Franchisee on the basis of a claim that Franchisee's use of  
the Product infringes third party patent, copyright or other proprietary 
rights, provided that Friendly's is  promptly notified of such claims or 
suits and Franchisee has given Friendly's full authority, information and  
assistance in the

defense thereof.  Friendly's will not be responsible for fees or costs of 
counsel retained by Franchisee, or for  any settlement made without 
Friendly's written consent.

    Provided that Franchisee is not in default of this Agreement, in the 
event Friendly's receives notice of  Franchisee's alleged infringement of a 
third party's rights or if Franchisee's use of the Product is prevented by an 
injunction based on alleged infringement of a third party's rights, 
Friendly's, may, at its option, (a) obtain the  rights to continue using the 
Product, (b) substitute other suitable software, or (c) modify or obtain 
modifications  to the Product so it is no longer infringing.  If none of the 
above options are reasonably available, in  Friendly's discretion, upon 
written notice from Friendly's, Franchisee shall stop using the Product and 
comply with  Section 3 of this Agreement, in which event Friendly's will 
refund to Franchisee the license fee paid by  Franchisee under this Agreement.

    7.   Hold Harmless and Indemnity.  Franchisee has read the description of 
the Product's features and capabilities,  and has participated in one or more 
demonstrations of the Product's capabilities.  Franchisee acknowledges  that 
it has exercised its independent judgment in making its decision to acquire 
the Product and enter this  Agreement.  Franchisee hereby agrees that it will 
not pursue a claim of any sort against Friendly's or its officers,  
directors, partners, employees or representatives, or the author or owner of 
the Product in the event the Product  fails to perform in a manner or produce 
the results anticipated by Franchisee.  Franchisee agrees to indemnify  and 
hold harmless Friendly's, the author and the owner of the Product from any 
claims, demands, losses and  expenses,

including attorney fees and court costs, including such costs on appeal, from 
any third party resulting from  the actions of Franchisee, its agents or 
employees which cause or contribute to any loss, destruction,  unauthorized 
access or misappropriation of programs, information or data stored on the 
computer on which the Product  is installed or to which any such computer may 
have access, except to the extent caused or contributed to by  Friendly's, 
its agents or employees.

    8.   Limitation of Liability.  In no event shall Friendly's, the author 
or the owner of the Product be liable, whether  based on breach of warranty 
or contract, in tort or strict liability or otherwise, for (a) any damages 
arising from  performance or nonperformance of the Product, (b) any lost 
profits, loss of use, or other consequential or  incidental damages, even if 
Friendly's, the author or the owner of the Products have been advised of the 
possibility  of such damage, or (c) any claim against Franchisee by any other 
party, except as provided for in Section 5 or  Section 7 with respect to 
infringement of the rights of others.  In no event shall Friendly's liability 
to  Franchisee for any cause related to this Agreement or the Product exceed 
the license fee paid by Franchisee to Friendly's  pursuant to this Agreement, 
except as may be provided above. 

    9.   Documentation.  Franchisee will be provided with all necessary
documentation by Friendly's, the author or  the owner of the Product, which
documentation will be required to operate the Product effectively.  


    All material, both written and otherwise, furnished to Franchisee by 
Friendly's, the author or the owner of  the Product, shall remain the 
property of the provider of such material, and Franchisee shall save and 
preserve  any such material except those that may be consumed in the normal 
course of business operations.   

    10.  Notices.  Any notice permitted or required to be given pursuant to 
this Agreement shall be sent via  certified mail, return receipt requested, 
or overnight courier, or telecopy, to the party intended to receive the same 
at such address as either party may provide to the other.

    11.  Payment.  any amounts due hereunder, including the help desk fee, on 
the same schedule as royalty  payments are made pursuant to the Franchise 
Agreement.  All past due amounts are subject to 1.5% per month late fee.  
Payment of support fees where the second training option is elected under 
Paragraph 2, are subject to the  separate negotiations related to that 
support option.

    12.  Modifications to Product.  Franchisee will not modify, amend, add 
to, decompile, disassemble, reverse  engineer or otherwise alter the Product 
or the menu or menus of the Product without the prior written consent of  
Friendly's. Franchisee will not alter or remove any copyright notice or other 
notice of proprietary interest of  Friendly's, the author or the owner of the 

    Franchisee shall not use the Product in connection or combination with
software not provided or approved  by Friendly's for the Product.

    13.  Entire Agreement.  This Agreement constitutes the entire 
understanding of the relationship between the  parties with respect to the 
Product.  No prior or contemporaneous representation or agreement outside of 
this  Agreement shall have any effect whatsoever on the terms hereof. 

    14.  Governing Laws.   This Agreement shall be governed by and construed 
in accordance with the laws of the  State of Delaware.

    15.  Invalid Provision.   If any provision of this Agreement is 
determined by a court of competent jurisdiction to  be invalid, such 
provision shall be stricken and the remaining provisions shall be given full 
force and effect. 

    WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date and year  first above written.

                   FRIENDLY'S RESTAURANTS
                   FRANCHISE, INC.