Software License Agreement - Friendly Ice Cream Corp. and FriendCo Restaurants Inc.
SOFTWARE LICENSE AGREEMENT
BETWEEN
FRIENDLY ICE CREAM CORPORATION
1855 Boston Road
Wilbraham, Massachusetts 01095
AND
FRIENDCO RESTAURANTS, INC.
1657 Crofton Boulevard
Crofton, Maryland 21114
DATED
July ____, 1997
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TABLE OF CONTENTS
SectionPage
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
EXHIBITS
Exhibit A: Maintenance Agreement
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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
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Labor Scheduling System, when available.
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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
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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
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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.
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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
IS IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR IMPLIED, INCLUDING BUT NOT
LIMITED TO A WARRANTY BY FRIENDLY'S OF MERCHANTABILITY OF THE PRODUCT OR A
WARRANTY OF FITNESS
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FOR A PARTICULAR PURPOSE OF THE PRODUCT. NEITHER FRIENDLY'S, THE AUTHOR NOR
THE OWNER OF THE PRODUCT WARRANTS THE PERFORMANCE OR RESULTS FRANCHISEE MAY
OBTAIN BY USING THE PRODUCT.
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
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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,
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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.
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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
Product.
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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.
By:
Its:
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FRANCHISEE
By:
Its: