DEVELOPMENT AGREEMENT
BETWEEN
FRIENDLY ICE CREAM
CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
AND
FRIENDCO RESTAURANTS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DATED
July , 1997
TABLE OF CONTENTS
Section Page
1. Schedule and Exclusivity. . . . . . . . . . . 2
2. Term. . . . . . . . . . . . . . . . . . . . . 6
3. Fees. . . . . . . . . . . . . . . . . . . . . 6
4. Application of Development Fee. . . . . . . . 7
5. Application Procedures. . . . . . . . . . . . 8
6. Restaurant Closing Procedure. . . . . . . . . 9
7. Assignment. . . . . . . . . . . . . . . . . . 11
8. Non-Competition . . . . . . . . . . . . . . . 12
9. Default and Termination . . . . . . . . . . . 14
10. Agency and Indemnity. . . . . . . . . . . . . 17
11. Notices . . . . . . . . . . . . . . . . . . . 19
12. Miscellaneous . . . . . . . . . . . . . . . . 20
13. Acknowledgement of Risk . . . . . . . . . . . 21
EXHIBITS:
Exhibit A: Territory and Time Schedule. .A-1
Exhibit B: Omitted
Exhibit C: Franchise Agreement. . . . . .C-1
Exhibit D: Commitment Agreement . . . . .D-1
DEVELOPMENT AGREEMENT
THIS AGREEMENT dated
, 19 , between FRIENDLY'S
RESTAURANTS FRANCHISE, INC., a Delaware
corporation ("Friendly's"), and FRIENDCO
RESTAURANTS, INC., a Maryland corporation
("Developer").
WHEREAS, Friendly's owns, operates and
licenses others to operate distinctive high quality
restaurants ("Friendly's Restaurants") serving the
public under the name Friendly's (the "System"); and
WHEREAS, Friendly's desires to achieve
market penetration in various areas of the United
States in order to more effectively expand, advertise
and market the System, and
WHEREAS, Friendly's has concluded that to
further its goals, it desires to grant to experienced and
financially qualified persons or organizations the
opportunity for exclusive development of Friendly's
Restaurants using the System within limited territories
for specified periods of time; and
WHEREAS, Developer desires to obtain the
right to acquire sites within a specific territory during
a specified period of time on which to construct
Friendly's Restaurants using the System, to submit to
Friendly's applications for franchise agreements to
operate Friendly's Restaurants on such sites, and upon
the approval of each such application, to
enter into a franchise agreement with Friendly's to
operate a Friendly's Restaurant using the System upon
such sites; and
WHEREAS, Developer represents that it has
the organizational, operational and financial strength,
experience and resources necessary to carry out the
multiple development of Friendly's Restaurants within
the Territory, as defined below, in the specified time
set forth below.
NOW, THEREFORE, in consideration of the
mutual covenants contained herein and pursuant to the
terms and conditions of this Agreement, the parties
hereby agree as follows:
1. SCHEDULE AND EXCLUSIVITY.
A. Developer agrees to construct,
equip and open seventy-four (74) Friendly's
Restaurants using the System within the time
schedule and territory (the "Territory") set
forth on Exhibit A attached hereto and made a
part hereof, and to maintain the operation of an
additional thirty-four (34) Friendly's
Restaurants pursuant to a franchise agreement,
subject to Paragraph 1.G., infra.
B. Developer agrees that time is of
the essence under this Agreement, and agrees
to comply strictly with each and every element
of the time schedule set forth on Exhibit A.
Developer further agrees that Exhibit A sets
forth the minimum number of Friendly's
Restaurants to be constructed, that Developer
will be required to have
the minimum number under contract and to
demonstrate the number under contract in
order to qualify for any cure period for any
default, and that it is the mutual goal of
Friendly's and Developer that Developer
construct, equip and open a greater number in
an extended time period (the "Target
Number") of Friendly's Restaurants as
described on Exhibit A, but the failure to
open the Target Number shall not be a
default hereunder.
C. For the purposes of this
Agreement, a restaurant will be
considered open or under construction in
such calendar year as the construction
permit is obtained and the building
footings are poured. The Developer will
have six (6) months for the date
construction commences to have the
restaurant open for business in order for
the restaurant to be included in the
minimum number required to be open or
under construction in any given year.
D. During the term of this
Agreement, Friendly's shall not operate,
or license or franchise others to operate
restaurants using the System within the
Territory except as provided in this
Agreement; provided however, that if the
Target Number has not been achieved,
Friendly's may operate, or license others
to operate Friendly's Restaurants within
the Territory and, provided further, that
during the term of this Agreement only,
Friendly's shall not own, license or
franchise any Friendly's Restaurant within
the Trade Area (as defined in Paragraph
8) of any Friendly's Restaurant operated
by Developer.
E. Developer agrees that this
Agreement does not grant it the right to
use the System at any location, nor does
it grant Developer any rights with respect
to the System or to use any of the
trademarks or trade secrets of Friendly's,
such rights being exclusively governed by
a Franchise Agreement for each
Friendly's Restaurant opened hereunder.
F. Each Friendly's Restaurant
as and when constructed, equipped and
opened, and the relationship of Developer
and Friendly's with respect to each such
restaurant, shall be governed by the terms
of an individual Franchise Agreement on
the form of such agreement attached
hereto as Exhibit C which will be granted to
Developer by Friendly's in the good faith
exercise of its sole discretion; provided,
however, that upon the earlier of the expiration
of this Agreement, the completion the Target
number or the elapse of ten (10) years from
December 31, 1997, Developer shall thereafter
use the then current form of Franchise
Agreement.
G. Developer agrees that all
Friendly's Restaurants set forth on Exhibit A
must be open and operating during established
business hours at all times (excepting casualty
or condemnation or act of God) on and after
their scheduled opening date and in the event
any such restaurant(s) is not at all times open
and operating during established business
hours, it will constitute a default hereunder,
except for such restaurant closings as are
permitted in accordance with Paragraph 6
hereof.
H. Upon final expiration or
termination of this Agreement for any reason,
Developer's territorial rights and rights to
construct, equip, open and operate Friendly's
Restaurants shall terminate and expire and
Developer's rights to use the System shall be
limited to those Friendly's Restaurants
operating pursuant to effective Franchise
Agreements which Friendly's and Developer
may have entered into prior to the final
expiration or termination of this Agreement.
I. Developer shall have a right of
first refusal on the operation of any Friendly's
Restaurant located in the Territory in an
Institutional Site (such as a government office,
theme park, hospital, airport, university or
college, military base or similar setting serving
essentially a captive audience or customer
base). The sole exceptions to the exclusivity of
territory granted hereunder shall be the
fourteen (14) managed Restaurants, the two
(2) restaurants operated by F.I.C.C. (which
shall be closed and de-identified no later than
four (4) months after the Effective Date and
the Maryland Science Center restaurant. Any
Friendly's Restaurant in the Territory which is
not managed or operated by Developer may
only be managed and operated by employees of
Friendly Ice Cream Corporation during the
term of this Agreement. Such exclusivity shall
not limit the rights reserved by Friendly's or
F.I.C.C. under Paragraph 1.C. of the Franchise
Agreement.
2. TERM.
This Agreement shall commence upon the date
first written above and shall terminate upon the earlier
of December 31, 2007, or the date of Developer's
execution of a Termination Agreement following the
opening of the seventy-fourth (74th) Friendly's
Restaurant required to be constructed, equipped,
opened and operating pursuant to this Agreement,
unless terminated earlier as provided for herein. The
feasibility of further development in the Territory shall
be assessed by Friendly's and Developer after the
completion of the 74th restaurant and again after the
completion of the 100th restaurant, and thereafter
every five (5) years. An agreement to continue the
development of additional restaurants hereunder shall
operate to extend the Term of this Agreement. In no
event shall the completion of the 74th restaurant cause
this Agreement to terminate prior to December 31,
2003.
3. FEES.
In consideration of the rights granted
Developer, Developer shall pay to Friendly's the sum
of Nine Hundred Thirty Thousand and 00/100 Dollars
($930,000.00) (the "Development Fee") all of which
is non-refundable except as provided under Paragraph
9G and all or part of which has either heretofore been
paid or is tendered herewith.
4. APPLICATION OF
DEVELOPMENT FEE.
A. Developer agrees that Friendly's
is not obligated in any event, including the
termination or expiration of this Agreement, to
return to Developer all or any part of the
Development Fee, except as provided in
Paragraph 9G of this Agreement.
B. Developer has no rights in the
Development Fee except as are specifically set
out in this Agreement.
C. Friendly's agrees that, at such
time as Developer and Friendly's execute a
Commitment Agreement for the issuance of a
Franchise Agreement ("Commitment
Agreement") for any of the Friendly's
Restaurants to be constructed, equipped and
opened hereunder, Friendly's shall apply the
Development Fee in an amount equal to one
half (.5) of the initial franchise fee required to
be paid in connection with each such
application and subsequent grant of a Franchise
Agreement. The Franchise Fee shall be Thirty
Thousand Dollars ($30,000.00) for the first
two (2) restaurants constructed hereunder and
Twenty-Five Thousand Dollars ($25,000.00)
for each additional restaurant set forth in
Exhibit A, and thereafter shall be an amount
equal to the then-current initial franchise fee.
D. In the event the Development
Fee has been applied such that there is a
balance owed against any initial fee(s) which
may become due, Developer shall pay
any balance of such initial fee due to Friendly's
with Developer's application for a Franchise
Agreement.
5. APPLICATION PROCEDURES.
A. Developer acknowledges and
agrees that franchise agreements are granted by
Friendly's only after submission and approval of
a formal application on Friendly's then-current
application form supplying all information
requested thereon and paying all required fees.
Developer further understands that a
Commitment Agreement is first executed and
delivered following approval of such
application and that if the terms and conditions
of the Commitment Agreement are complied
with, a Franchise Agreement granting a
franchise to operate a Friendly's Restaurant will
be executed and delivered. Developer
acknowledges and agrees that the Commitment
Agreement and the Franchise Agreement will
be the forms of such agreements as are
attached hereto as Exhibits C and D for the
restaurants developed in accordance with
Exhibit A .
B. Developer shall comply in all
respects with Friendly's franchise
application policies and procedures when
Developer applies for a Franchise
Agreement in order to fulfill its obligations
under this Agreement. Developer
understands that it should obtain a
Commitment Agreement before making
any unconditional binding commitments to
third parties, and understands and agrees
that any activities undertaken in reliance
on this Agreement prior to such time are
at Developer's own risk and expense.
C. Developer acknowledges
and agrees that Friendly's may choose to
grant or deny applications for franchise
agreements; however, Friendly's will
exercise good faith in exercising its
discretion.
D. Developer shall be solely
responsible for locating appropriate sites
for the construction of Friendly's
Restaurants as contemplated hereunder
and taking all other actions necessary to
finance, build, and construct such
restaurants. Developer understands and
agrees that all proposed sites are subject
to Friendly's prior approval, not to be
unreasonably withheld.
6. RESTAURANT CLOSING
PROCEDURE.
A. Developer may discontinue
operations at any Friendly's Restaurant opened
or maintained pursuant to this Development
Agreement (other than through condemnation
or casualty loss) only in accordance with the
procedure set forth in this Section 6.
Developer shall notify Friendly's that the
restaurant to be discontinued does not produce
a profit at a restaurant operating level, and shall
afford Friendly's not less than thirty (30) days
to audit the operations of such restaurant,
should Friendly's choose to do so. Evidence of
a restaurant's failure to produce a profit shall be
established through six (6) quarters of
consecutive losses totaling Seventy-Five
Thousand Dollars ($75,000.00) or if an aggregate loss of
Seventy-Five Thousand
Dollars ($75,000.00) is achieved in such shorter
period when measured on the basis
of restaurant operating income. Thereafter,
Developer may proceed to discontinue
operations at the restaurant so long as de-identification
of the restaurant occurs within fifteen (15) days of the
cessation of restaurant operations.
B. Developer shall replace any closed
restaurant with (and shall transfer
the Franchise Agreement for such closed restaurant) to a
newly constructed or remodeled restaurant within
eighteen (18) months of the
cessation of restaurant
operations, if the replacement restaurant does not
have a drive-thru window, or within
twenty-four (24) months if the replacement restaurant
does have a drive-thru window
(collectively, such period shall be considered the "Replacement Period").
C. Developer shall be entitled to a moratorium on
royalties and marketing
fees for the Replacement Period for a total of four (4)
closed restaurants; however, for
each additional closed restaurant, Developer shall
continue to pay the average monthly
royalty and marketing fee for such restaurant as
was paid during the last twelve (12)
months of operation until each such additional
restaurant is replaced pursuant to the
terms of this Paragraph 6, and the Franchise
Agreement for such closed restaurant is
transferred to the replacement restaurant.
D. For each closed Restaurant to
be replaced, Developer shall pay a Site
Replacement Fee to Friendly's to cover
Friendly's costs of reviewing and approving the
proposed replacement site, such Fee to be in
the amount of the lesser of Friendly's actual
costs or Two Thousand Five Hundred Dollars
($2,500.00).
7. ASSIGNMENT.
A. Friendly's may assign all or any
part of its rights or obligations hereunder to
any person or entity, provided, however, that
such person or entity has no right or authority,
at the time of such assignment, to license
others to operate Friendly's Restaurants within
the Territory, unless and until this Agreement
has expired or terminated.
B. The rights and obligations of
Developer hereunder are not assignable
without the prior written consent of Friendly's
which may be withheld in Friendly's sole
discretion. For the purposes of this clause, an
assignment includes an assignment, sale, or
other transfer, directly or indirectly of any
interest in Developer, but shall not include a
transfer by merger with the corporate parent or
other affiliate of Developer, provided that the
net worth of the affiliate successor entity is the
same or greater than the net worth of the
Developer and its corporate parent as of the
Effective Date.
C. Developer shall not assign, sell
or transfer any interest in Developer during the
term hereof without the prior written consent
of Friendly's, not to be unreasonably withheld.
D. Any purported assignment
contrary to the foregoing provisions shall be
void and of no force and effect and shall
constitute a default hereunder.
8. NON-COMPETITION.
Developer acknowledges and agrees that
Friendly's has invested a substantial amount of time
and money in developing the System and the
confidential information associated therewith (the
"Confidential Information") and that Friendly's
would be unable to protect its System, the
Confidential Information and trade secrets against
unauthorized use or disclosure and would be unable to
encourage a free exchange of ideas and information
among Friendly's and its licensees if prospective
licensees or licensees were permitted to hold interests
in or perform services for any competing business and
that the following restrictions are reasonably required
in order to protect Friendly's information, marketing
strategies, operating policies and other elements of the
System from unauthorized appropriation and to ensure
that Developer is using its best efforts in employing its
financial and management resources effectively to
meet and exceed the minimum and target development
schedule set forth in this Agreement. Therefore,
Developer agrees that, during the term of this
Agreement, neither Developer nor any of its corporate
parent, subsidiaries or their affiliates will have any
direct or indirect legal or beneficial interest or perform
services in any business which owns, operates,
licenses, franchises or develops any restaurant concept
which both (i) has sit down, table service, and (ii) is a
mid-scale priced, family style restaurant, coffee shop
or ice cream/frozen yogurt shoppe (as defined by
CREST operators list as of June 1, 1997) including
but not limited to Denny's Shoney's Big Boy, Country
Kitchen, ▇▇▇ ▇▇▇▇▇, Cracker Barrel, IHOP, Village
Inn, Waffle House, Dairy Queen, ▇▇▇▇▇▇▇'▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, TCBY or similar. Notwithstanding
the above, a restaurant concept which is a mid-scale
priced family style restaurant will be deemed
competitive if frozen deserts comprise 5% or more of
the sales mix as measured on any six (6) month basis.
Developer further agrees that for a period of two (2)
years after the termination or expiration of this
Agreement, Developer and all of such persons will be
subject to the same restriction on competing activities
(i) within the Territory and (ii) within the trade area
(as reasonably determined by Friendly's) of any
Friendly's Restaurant currently operated by Friendly's
or any licensee, but in no event within a radius of three
(3) miles from any such restaurant. Developer further
acknowledges that this paragraph confers no
exclusivity on Developer with respect to Developer's
further operation of any Restaurant within the
Territory after the expiration or termination of this
Agreement.
The restrictions of this section shall not be
applicable to the Friendly's Restaurants operated under
franchise agreements between Developer and
Friendly's, to the ownership of shares of a class of
securities listed on a stock exchange or traded on the
over-the-counter market that represent five percent
(5%) or less of the numbers of shares of that class of
securities issued and outstanding, or to any restaurants
franchised by Wendy's International and operated by
the corporate parent or any affiliate of Developer.
9. DEFAULT AND TERMINATION.
A. This Agreement shall terminate
without further notice at the time and date set
forth in Paragraph 2 hereof, unless extended or
earlier terminated as set forth hereinbelow.
B. This Agreement shall
automatically terminate without notice in the
event Developer becomes insolvent or is unable
to pay its debts as they may mature or make an
assignment for the benefit of creditors or an
admission of inability to pay obligations as they
become due or file a voluntary petition in
bankruptcy or any pleading seeking any
reorganization, liquidation, dissolution or
composition or other settlement with creditors
under any law, or admitting or failing to
contest the material allegations of any such
pleading filed against Developer, or its
adjudicated a bankrupt or insolvent or a
receiver or other custodian is appointed for a
substantial part of Developer's assets or the
assets of any Friendly's Restaurant owned by
Developer or a final judgment remains
unsatisfied or of record for ninety (90) days or
longer (unless supersedeas bond is filed), or if
execution is levied against any substantial part
of Developer's assets is made, or suit to
foreclose any lien or mortgage against
Developer or any Friendly's Restaurant owned
by Developer is instituted and is not dismissed
within ninety (90) days, or if a substantial part
of Developer's real or
personal property is sold after levy of judgment
thereupon by any sheriff, marshal or constable,
or the claims of Developer's creditors are
abated or subject to a moratorium under any
law;
C. In the event Developer
materially fails to comply with any of the terms
and conditions of this Agreement (excepting
only by reason of force majeure, such as, but
not limited to: civil strife or commotion, labor
strike, lockout or Acts of God) or the terms
and conditions of any Commitment Agreement,
Franchise Agreement orother agreement
between Friendly's and Developer, it shall
constitute a default of this Agreement, and if
Developer fails to cure such default(s) within
one hundred eighty (180) days in the first year
of this Agreement, or sixty (60) days in the
next four (4) subsequent years, of Friendly's
giving written notice of said default(s) to
Developer or the cure period provided in such
other agreement, Friendly's, in its sole and
absolute discretion, and in addition to any other
rights and remedies it may have at law or in
equity, may terminate this Agreement and any
Commitment Agreements in force at the time
of the default without further notice.
D. In the event of termination of
this Agreement, Friendly's shall retain all of the
Development Fee, as a liquidated damage
except as provided for in Subparagraph G
herein, and any unaccrued portion of the
Development Fee shall be retained by Friendly's
without the necessity of notice thereof.
E. A default under this Agreement
shall not constitute a default under any
Franchise Agreement between Friendly's and
Developer. However, the failure of Developer
to complete the minimum development
required hereunder shall grant to Friendly's the
option to purchase the assets and rights relating
to the original thirty-four (34) restaurants sold
to Developer by Friendly Ice Cream
Corporation at the same multiple of cash flow
(i.e. 5.3 times EBITDA on a trailing twelve
(12) month basis) as in the original transaction
by Friendly Ice Cream Corporation and
Developer, pursuant to the Purchase and Sale
Agreement dated July 10, 1997.
Upon the exercise of the repurchase
option, the leases and subleases between
Friendly Ice Cream Corporation and
Developer, as well as any guarantee of such
leases or subleases by DavCo Restaurants, Inc.
will terminate, excepting only such leases or
subleases which Developer shall have assigned
or sublet to a third party (the "Remaining
Leases").
The assignment or sublease between
Developer and any third party on the
Remaining Leases shall attorn to Friendly Ice
Cream Corporation, and any guarantee of the
Remaining Leases by DavCo Restaurants, Inc.
shall remain in full force and effect throughout
the remainder of the base term (and renewals at
the sole discretion of such third party) of such
assignment or sublease.
F. Upon final expiration or
termination of this Agreement for any reason,
Developer's territorial rights and rights to
construct, equip, open and operate Friendly's
Restaurants using the System shall
automatically terminate and expire and
Developer's rights to use the System shall be
limited to those Friendly's Restaurants pursuant
to effective Franchise Agreements which
Friendly's and Developer may have executed
and delivered prior to such expiration or
termination.
G. Friendly's failure to comply with
the terms and conditions of this Agreement
shall constitute a default hereunder. If
Friendly's fails to cure such default(s) within
thirty (30) days of its receipt of written notice
thereof, this Agreementshall terminate and any
portion of the Development Fee not applied
pursuant to Paragraph 4 hereunder shall be
refunded to Developer.
10. AGENCY AND INDEMNITY.
A. Developer and Friendly's agree
that this Agreement does not create any
fiduciary relationship between them and
nothing in this Agreement is intended to make
either party an agent, legal representative, joint
venturer, partner, employee or servant of the
other for any purpose whatsoever. Each party
to this Agreement is an independent contractor
and shall hold itself out to the public as an
independent contractor.
B. Developer shall not make any
contract, agreement, warranty or
representation in the name of Friendly's, and
Friendly's assumes no liability for, nor shall it
be deemed liable by reason of, any action or
omission of Developer and its conduct of
business pursuant to this Agreement or any
claim or action arising therefrom.
C. Developer shall indemnify and hold Friendly's
harmless from and promptly reimburse it for any and all claims,
demands, taxes or penalties, actions and payment of money
(including, but not limited to, fines, damages legal fees and
expenses) by reason of any or all claims, demands, taxes, or
penalties arising directly or indirectly from, as a result of, or in
connection with Developer's actions or
omissions hereunder or those of its agents or employees,
including those of its contractors and subcontractors. At the
election of Friendly's, Developer will also defend Friendly's
against same at Developer's expense. In any event, and
regardless of Developer's payment of legal fees, Friendly's will
have the right, through counsel of its choice, to control any
claim, demand, action or matter to the extent it could directly
or indirectly affect Friendly's financially, and all such expenses
shall be subject to indemnity hereunder. Developer's
obligations under this paragraph shall survive the termination
or expiration of this Agreement.
D. Except as provided above, Friendly's and
Developer shall indemnify, defend and hold each other
harmless from claims, demands and causes of action asserted
against the indemnitee by any person for personal injury or
death or for loss of or damage to property and resulting from
the indemnitor's active or passive negligence or willful
misconduct. Where such injury, death, loss or damage is the
result of joint active or passive negligence or willful
misconduct, the duty of indemnification shall be in proportion
to the allocable share of the joint active or passive negligence
or willful misconduct.
11. NOTICES.
All notices required under this Agreement shall be in writing
and shall be personally delivered, sent by facsimile or overnight
courier or mailed by United States Mail, Return Receipt Requested,
to the respective parties at the following addresses unless and until a
different address has been designated by written notice to the other
party:
Friendly's: FRIENDLY'S
RESTAURANTS FRANCHISE, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Developer: FRIENDCO RESTAURANTS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Notices sent (i) by personal delivery or facsimile shall be
effective when received; (ii) by mail on the third business day after
mailing; and (iii) by overnight courier on the second business day after
delivery to the courier.
12. MISCELLANEOUS.
A. No failure or delay of Friendly's or Developer
to exercise any rights reserved to it in this Agreement or to
insist upon compliance by either party of any obligation or
condition in this Agreement, and no custom or practice of the
parties at variance with the terms hereof, shall constitute a
waiver of either party's right to demand strict compliance with
the terms of this Agreement. Waiver by either party of any
particular default will not affect or impair the rights of
Friendly's or Developer with respect to any subsequent default
of the same or a different nature.
B. This Agreement is solely for the benefit of the
parties hereto and their permitted assignees and is not intended
to and shall not be construed to benefit any other person, firm
or entity.
C. The title headings of the respective paragraphs
of this Agreement are for reference purposes only and shall not
effect the meaning or interpretation of this Agreement in any
way.
D. This Agreement and any rights or liabilities
arising from or in connection with this Agreement shall be
governed by the laws of the State of Delaware. Any action
brought to enforce any provision of this Agreement shall be
brought and maintained only in a state or federal court of
competent jurisdiction in Wilmington, Delaware.
E. This is the entire agreement between the parties
concerning the development of Friendly's Restaurants within
the Territory and any modifications must be in writing and
signed by both parties, or said modifications will be void and
of no force and effect.
F. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to
persons whose circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby.
13. ACKNOWLEDGEMENT OF RISK.
A. Developer acknowledges the success of the
business ventures contemplated by this Agreement involves
substantial business risks and is dependent upon the
Developer's ability. Friendly's expressly disclaims the making
of, and Developer acknowledges that it has not received and is
not relying upon, any warranty or guarantee,
express or implied, as to the potential
volume, profits, or success of the business venture
contemplated by this Agreement.
B. Developer represents that it has independently
investigated the risks of the business venture contemplated by
this Agreement and has read the disclosure documents
prepared by Friendly's in accordance with the state and federal
franchise laws and agrees that Friendly's has made no
representation that is not fully set forth therein or herein.
C. Developer acknowledges that it has not and
agrees that it will not rely upon any representations not
contained herein or in the disclosure documents prepared by
Friendly's in accordance with state and federal franchise laws.
WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date and year first above written.
ATTEST: FRIENDLY'S RESTAURANTS FRANCHISE, INC.
/S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Chairman and President
Date: July 10, 1997
WITNESS: DEVELOPER
/S/▇▇▇▇ ▇▇▇▇▇▇▇▇ FriendCo Restaurants, Inc.
By: /S/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Chairman and President
Date: July 10, 1997
E X H I B I T A
to
DEVELOPMENT AGREEMENT
Dated: ________________ , 199_
between
FRIENDLY'S RESTAURANTS FRANCHISE, INC.
and
---------------------------------------------
Territory:
States of Delaware,
Maryland, the District of
Columbia and following
Virginia counties:
Alexandria, Arlington,
▇▇▇▇▇▇▇▇, Clarke, Culpeper,
Essex, Fairfax, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, King George,
Lancaster, Loudoun, North
Umberland, Prince ▇▇▇▇▇▇▇,
Rappahanock, Richmond,
Shenandoah, Spotsylvania,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇▇▇.
The boundaries of the Territory defined above shall,
throughout the term of this Development Agreement,
be those boundaries as they exist as of the date hereof.
TIME SCHEDULE:
No later than (Date) Minimum number of new Target number of Friendly's
Friendly's Restaurants to be Restaurants to be opened or
opened or under construction under construction
(permits obtained, footings
poured - six (6) months to
to complete construction)
December 31, 1998 11
December 31, 1999 26
December 31, 2000 41
December 31, 2001 52
December 31, 2002 63
December 31, 2003 74
December 31, 2004 81
December 31, 2005 88
December 31, 2006 94
December 31, 2007 100
