EXHIBIT 10.10
DEVELOPMENT AGREEMENT
T.G.I. FRIDAY'S RESTAURANTS
[COUNTRY]
DATED AS OF [DEV AGMT DATE]
T.G.I. FRIDAY'S RESTAURANTS
DEVELOPMENT AGREEMENT
[COUNTRY]
TABLE OF CONTENTS
1. DEFINITIONS....................................................................................................1
2. EXCLUSIVE RIGHTS; TERM.........................................................................................4
3. DEVELOPMENT SCHEDULE; SITE SELECTION...........................................................................5
4. FEES AND PAYMENTS..............................................................................................7
5. REPRESENTATIVE; DIRECTOR OF OPERATIONS; MANAGERS; TRAINING.....................................................8
6. CONFIDENTIAL INFORMATION.......................................................................................9
7. DEVELOPER'S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS.................................9
8. TRANSFER......................................................................................................12
9. CONSENT AND WAIVER............................................................................................13
10. DEFAULT AND REMEDIES.........................................................................................13
11. ARBITRATION..................................................................................................13
12. INDEMNIFICATION..............................................................................................17
13. NOTICES......................................................................................................19
14. FORCE MAJEURE................................................................................................20
15. SEVERABILITY.................................................................................................20
16. INDEPENDENT CONTRACTOR.......................................................................................20
17. DUE DILIGENCE AND ASSUMPTION OF RISK.........................................................................21
18. MISCELLANEOUS................................................................................................21
19. ENTIRE AGREEMENT.............................................................................................22
EXHIBIT A - FRANCHISE AGREEMENT
EXHIBIT B - COVENANT AND AGREEMENT FOR CONFIDENTIALITY (PRINCIPAL)
EXHIBIT C - COVENANT AND AGREEMENT FOR CONFIDENTIALITY (EMPLOYEES)
SCHEDULE 4.A. - CONCEPT FEE AND PRE-PAID FRANCHISE FEE
DEVELOPMENT AGREEMENT
[COUNTRY]
This DEVELOPMENT AGREEMENT is entered into as [Dev Agmt Date] by and
among TGI FRIDAY'S INC., a New York corporation, with its principal place of
business in Dallas, Texas, United States of America, [DEVELOPER NAME], with
its principal place of business in [Place of Business] and [Principals?].
RECITALS
WHEREAS, Grantor has developed in the United States and owns the
System;
WHEREAS, Grantor intends to identify the System in the Territory
with the Proprietary Marks;
WHEREAS, Developer wishes to obtain certain rights to develop
Restaurants under the System in the Territory; and
WHEREAS, _________ and __________ own and have the right to vote
___% and ___%, respectively (collectively 100%), of the Securities of
Developer
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:
ACCOUNT - an account designated by Grantor to receive Payments
ACTION - any cause of action, suit, proceeding, claim, demand, investigation
or inquiry (whether a formal proceeding or otherwise) with respect to which
Developer's indemnity described in Section 12 applies
AFFILIATE - Xxxxxxx Restaurants Worldwide Inc. or any subsidiary thereof or
of Grantor
AGREEMENT - this Development Agreement
BUSINESS DAYS - Each day except Saturday, Sunday and national legal holidays
under the laws of the country of the recipient of the notice
COMMENCEMENT DATE - [Dev Agmt Date]
COMPETING BUSINESS - a restaurant business offering the same or similar
products and services as offered by restaurants in the System, including,
without limitation, waiter/waitress service, sit-down dining and bar services
CONFIDENTIAL INFORMATION - the terms of the Development Agreement and
Franchise Agreement and any amendments thereto, 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 all
other information know-how, techniques, materials and data imparted or made
available by Grantor which is (i) designated as
confidential, (ii) known by Developer to be considered confidential by
Grantor, or (iii) by its nature inherently or reasonably considered
confidential
CONCEPT FEE - a fee in United States dollars calculated as described on
Schedule 4.A. paid to Grantor by Developer in consideration of (a) certain
administrative and other expenses previously incurred by Grantor in
connection with this Agreement and with respect to the Proprietary Marks and
(b) Grantor's prior development in the United States of the System, the
Standards and the Confidential Information
DEVELOPER - [Developer Name]
DEVELOPMENT MANUAL - Grantor's manual, as amended from time to time in
Grantor's reasonable discretion, describing (generally) the procedures and
parameters for the development of T.G.I. Friday's restaurants
DEVELOPMENT MATERIALS - a description of the Site, a feasibility study
(including, without limitation, demographic data, photographs, maps, artists'
renderings, site plans, a summary (in English) of the Occupancy Contract, and
documentation indicating Developer's prospects to acquire the Site) and such
other information as Grantor reasonably requests
DEVELOPMENT SCHEDULE - the schedule pursuant to which Developer shall develop
Restaurants in the Territory (SEE Section 3.A.)
DIRECTOR OF OPERATIONS - 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
EVENT OF DEFAULT - as defined in Section 10.A.
FRANCHISE AGREEMENT - an agreement pursuant to which Developer shall
construct and operate a Restaurant, substantially in the form attached as
EXHIBIT A; which agreement may be modified at the time of signing only in the
event of the following: (i) changes in local law which affect the
enforceability of said agreement; (ii) changes in the System which require
clarification in the agreement; or (iii) identification of typographical
errors in the form
FRANCHISE FEE - a per Restaurant fee in United States dollars paid by
Franchisee to Franchisor, each as defined in the Franchise Agreement (SEE
Section 3.01 of Exhibit A)
GRANTOR - TGI FRIDAY'S INC., a New York (U.S.) corporation
HEADQUARTERS - the location(s) in the United States designated from time to
time by Grantor where Developer personnel shall complete training
IN-COUNTRY EXPENSES - such costs and expenses incurred by or assessed with
respect to Grantor's (or other described party's) employees, agents and/or
representatives in connection with activities traveling to or in the
Territory pursuant to this Agreement, including, without limitation,
hotel/lodging, transportation and meals
INDEMNITEES - Grantor and its directors, officers, employees, agents,
shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders and affiliates of each
LESSOR - the party owning or controlling the Site and being a party (with
Developer) to the Occupancy Contract
LOSSES AND EXPENSES - compensatory, exemplary or punitive damages; fines,
penalties, charges and fees (including reasonable attorney's, accounting and
consultant fees); interest, court costs, settlement or judgment amounts and
other similar amounts incurred or suffered by the Indemnitees in connection
with any Action; PROVIDED, HOWEVER, that Losses and Expenses shall not
include loss of reputation, goodwill or other losses of a similar nature
MULTI-UNIT MANAGER(S) - an/the individual(s) designated as described in
Section 5.D. who shall be solely dedicated to the management and supervision
of the Restaurants
OCCUPANCY CONTRACT - the agreement pursuant to which Developer shall occupy
any Site
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 the word "Friday's" or letters "T.G.I.", utilizing a system other
than the System pursuant to which a T.G.I. Friday's Restaurant is operated.
PAYMENTS - all transfers of funds from Developer to Grantor, including,
without limitation, the Concept Fee, the Pre-Paid Franchise 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 Grantor
PRELIMINARY SITE CONSENT - written communication from Grantor to Developer
notifying Developer that a proposed site has received the consent of the
Grantor's Site Review Committee
PRE-PAID FRANCHISE FEE - a fee in United States dollars calculated as
described on Schedule 4.A. paid to Grantor by Developer which will be
credited as described in Section 4.A.
PRINCIPAL(S) - _____ and _____ who are (and such other persons or entities
which are from time to time) the record and beneficial owners of, and have
the right to vote, ____% and _____% (collectively 100%), of the Securities
of Developer
PROPRIETARY MARKS - certain trademarks, trade names, service marks, emblems
and indicia of origin designated by Grantor from time to time in connection
with the operation of T.G.I. Friday's restaurants pursuant to the System in
the Territory
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 pursuant to
applicable law
REPRESENTATIVE - an individual, designated as described in Section 5.A.,
authorized to act on behalf of, and bind, Developer with respect to this
Agreement
RESTAURANT(S) - T.G.I. Friday's restaurant(s) developed pursuant to this
Agreement.
SECURITY - the capital stock of, partner's interest in, or other equity
interest (including the right to vote) in Developer, including such interests
issued or created subsequent to the date hereof
SITE - the proposed location of any Restaurant
STANDARDS - the standards and specifications, as amended from time to time,
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 Grantor for the
establishment and operation of T.G.I. Friday's restaurants, including,
without limitation, distinctive 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 and inventory and management control (including
accounting procedures and policies); training and assistance; and advertising
and promotional programs (as further developed by Grantor from time to time)
TERM - the duration of this Agreement commencing on the Commencement Date and
continuing until ___________, 19__, unless sooner terminated as provided
herein
TERRITORY - [Country], as geographically constituted on the date hereof
[NOTE: Are there any territorial issues disputes that need to be addressed?]
TRANSFER - the sale, assignment, conveyance, 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
TGIFM - TGI Friday's of Minnesota Inc., a Minnesota (U.S.) corporation and a
subsidiary of Grantor
UNCITRAL ARBITRATION RULES - the arbitration rules of the United Nations
Commission on International Trade Law
WAGE EXPENSES - such wages and/or salaries (including a reasonable allocation
of the cost of benefits) of, or with respect to, Grantor's (or other
described party's) employees, agents and/or representatives to be reimbursed
to Grantor or such party as described herein
2. EXCLUSIVE RIGHTS; TERM
A. Grantor grants to Developer the right, and Developer
accepts the obligation, subject to the terms and conditions herein, to
develop and operate [# of Rest] Restaurants pursuant to the System in the
Territory (excluding, however, airport properties and rail depots). For so
long as no Event of Default has occurred under this Agreement and is
continuing and no event has occurred under this Agreement which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, Grantor will neither develop, nor authorize any other person to
develop, T.G.I. Friday's restaurants under the System in the Territory
(except as may be located within airport properties or rail depots) during
the Term.
B. Grantor expressly reserves the right, and Developer
acknowledges that Grantor has the exclusive, unrestricted right, to develop
and operate, directly and indirectly, through its employees, developers,
franchisees, licensees, agents and others within the Territory, Other
Concepts. Such Other Concepts may compete with Developer directly or
indirectly.
C. 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.
D. Unless sooner terminated as provided herein, this Agreement
shall commence on the Commencement Date and continue until the expiration of
the Term.
E. Upon any termination of this Agreement, (i) Developer shall
not develop additional Restaurants in the Territory (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) Grantor may develop, or authorize others to develop, T.G.I. Friday's
restaurants in the
Territory.
3. DEVELOPMENT SCHEDULE; SITE SELECTION
A. Developer shall develop Restaurants in the Territory
pursuant to the Development Schedule as follows:
-------------------------------------------------------------------------------------------------------------------------
RESTAURANT NO. DATE OPEN & DATE OF FINAL SITE DATE FRANCHISE DATE CONSTRUCTION DATE ALL
OPERATING CONSENT AGREEMENT SIGNED & BEGINS MANAGERS MUST BE
FRANCHISE FEE PAID TRAINED
---------------- ----------------- ---------------------- ------------------------ ------------------- ------------------
9 mos prior to open 6 mos prior to open 6 mos prior to 2 mos prior to
open open
---------------- ----------------- ---------------------- ------------------------ ------------------- ------------------
---------------- ----------------- ---------------------- ------------------------ ------------------- ------------------
(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.
(iii) The Development Schedule requires that the cumulative
number of Restaurants described above be OPEN AND OPERATING by the date(s)
specified. Grantor's consent to any Site or execution of a Franchise
Agreement SHALL NOT waive, extend or modify the Development Schedule.
B. Prior to execution of each Franchise Agreement, Developer
shall obtain Grantor's consent to each Site pursuant to the time frames set
forth in Section 3.A. above in accordance with Grantor's then existing Site
selection criteria and procedures including:
(1) submission of all Development Materials to
Grantor; and
(2) with respect to each Restaurant to be developed
hereunder, completion of one (1) Site visit by Grantor if required by
Grantor. Developer shall bear the In-Country Expenses in connection with each
such visit.
In addition, Grantor may make a minimum of two (2) visits to the
Territory per year for purposes of conducting a more general review of
available Sites in the Territory. Such visits shall be scheduled in
coordination with Developer. Developer shall bear the In-Country Expenses in
connection with any such visit.
C. Within thirty (30) days following receipt of all
Development Materials and completion of any such visit, Grantor shall consent
to or reject such Site. Grantor's failure to consent shall constitute
rejection of such Site. Promptly after Grantor's consent is obtained and
prior to commencing construction, Developer shall execute a Franchise
Agreement and pay the Franchise Fee.
D. Neither Grantor's (i) consent to nor (ii) assistance in the
selection of, any Site shall constitute Grantor's representation or warranty
that a Restaurant operated at such Site will be profitable or meet any
financial projection.
E. Developer shall furnish Grantor a complete copy of the
Occupancy Contract within ten (10) days after execution. Such copy may be in
[native language] if accompanied by Developer's certificate to the effect
that (i) the terms and conditions of the Occupancy Contract are not
inconsistent
with the summary delivered as part of the Development Materials; and (ii) the
following covenants are included therein and directing Grantor to such
covenants:
(1) Lessor shall deliver to Grantor, 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) Grantor 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 Grantor
without any fee or modification thereof and Grantor 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 Lessor's consent; and
(4) Lessor and Developer shall not amend the Occupancy
Contract in any way which is inconsistent with the provisions of Sections
3.E.(1) through (4), inclusive.
F. Notwithstanding the terms of Section 3.E., Developer shall:
(1) deliver to Grantor, immediately after delivery to or by
Developer, any notice of default under the Occupancy Contract which threatens
or purports to terminate the Occupancy Contract;
(2) permit Grantor to enter the Restaurant premises to
protect the Proprietary Marks or the System or to cure any Event of Default
or default under the Occupancy Contract or the applicable Franchise
Agreement; and
(3) not amend the Occupancy Contract in any way which
is inconsistent with the provisions of Sections 3.E.(1) through (4),
inclusive.
G. Grantor shall provide Developer with one (1) Development
Manual "on loan" and two (2) sets of Grantor's standard plans and
specifications in existence as of the date hereof for the construction of a
typical T.G.I. Friday's restaurant in the United States. Developer
acknowledges that the Development Manual and all other materials to be
provided hereunder shall be in the English language. Developer acknowledges
Grantor's ownership of any copyright rights in or to such materials.
Developer shall observe Grantor's reasonable requests concerning copyright
notices. The Development Manual and such plans shall be returned to Grantor
immediately upon termination or expiration of this Agreement.
H. Grantor shall provide such consultation as it reasonably
deems necessary to consent to vendors and products proposed to be used in
Restaurant development and operation. Should consultation require, in
Grantor's reasonable judgment, that Grantor's personnel visit the Territory,
the In-Country Expenses of such personnel in connection with such
consultation shall be borne or reimbursed by Developer.
4. FEES AND PAYMENTS
A. Developer shall pay the Concept Fee and the Pre-Paid
Franchise Fee to Grantor upon execution of this Agreement. The Pre-Paid
Franchise Fee shall be credited toward the Franchise Fee as shown on Schedule
4.A. Developer acknowledges (i) that the Concept Fee reflects and is in
consideration of (a) certain administrative and other expenses previously
incurred by Grantor in connection with this Agreement and with respect to the
Proprietary Marks and (b) Grantor's prior development of the System,
the Standards and the Confidential Information; (ii) that the Pre-Paid
Franchise Fee reflects and is in consideration of, in part, Grantor's lost
opportunity to develop Restaurants in the Territory; (iii) that the Concept
Fee and the Pre-Paid Franchise Fee are reasonable in amount; and (iv) that
the Concept Fee and the Pre-Paid Franchise Fee are non-refundable.
B. (1) All Payments shall be made in United States dollars
by deposit in the Account in immediately available funds. If United States
dollars are not available in the local currency market, Payments shall be
made in a currency and/or jurisdiction designated by Grantor. Acceptance of
any Payment in a currency other than United States dollars shall not release
Developer's obligation to make future Payments in United States dollars.
(2) To the extent any Payment requires conversion, such
amount shall be converted using the "interbank" exchange rate (or other rate
Grantor reasonably designates) using the "buy rate" United States dollar
purchase price (or at the purchase price for such other currency Grantor
designates pursuant to Section 4.B.(1)) as published at the end of the day by
such financial institution Grantor designates on (i) the date of Grantor's
invoice therefor; or (ii) the date hereof in the case of the Concept Fee and
the Pre-Paid Franchise Fee. All costs of currency exchange and all currency
risk shall be borne by Developer.
(3) Payments shall be deposited (i) upon execution hereof
in the case of the Concept Fee and the Pre-Paid Franchise Fee; or (ii) not
more than thirty (30) days after date of invoice. Delinquent Payments shall
bear interest from the due date until deposited at eighteen percent (18%) per
annum or the maximum rate permitted by law, whichever is less. Conversion of
any interest amounts into United States dollars shall occur on the due date
or the date of the applicable invoice.
C. (1) Subject to Section 4.C.(2), all Payments shall be
made net of, and Developer shall pay from its own funds to the appropriate
taxing authority, any and all applicable withholding tax, value added tax or
similar tax or fee, it being the parties' intention that all Payments to
Grantor hereunder shall be absolutely net. Developer shall deliver to Grantor
receipts certifying that such taxes or fees have been paid. Any taxes or
duties imposed upon or with respect to this Agreement or any materials,
supplies or specifications acquired by or provided to Developer pursuant to
or in connection with this Agreement shall be paid by Developer.
(2) Notwithstanding Section 4.C.(1), Developer shall (i)
withhold from Payments of the Concept Fee and Pre-Paid Franchise Fee any
applicable withholding tax, value added tax or similar tax or fee; (ii) pay
such tax to the appropriate authority; and (iii) deliver to Grantor receipts
therefor as described in Section 4.C.(1).
D. Developer shall not withhold or off-set any portion of any
Payment due to Grantor's alleged non-performance hereunder.
E. All In-Country Expenses shall be incurred for the account of,
and directly billed to, Developer. When such direct billing is not feasible,
Developer shall reimburse such expenses to Grantor upon receipt of invoice.
5. REPRESENTATIVE; DIRECTOR OF OPERATIONS; MANAGERS; TRAINING
A. Developer hereby designates [Rep Name] as the Representative.
Any replacement Representative shall be designated within ten (10) days of
the prior Representative's resignation or termination. Each Representative
shall attend and successfully complete at Headquarters Grantor'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 shall designate the Director of Operations within
thirty (30) days of the date hereof. Any replacement Director of Operations
shall be designated within ten (10) days of the prior Director of Operations'
resignation or termination. Each Director of Operations shall attend and
successfully complete at Headquarters within six (6) months of appointment
Grantor's training program required for general managers (SEE Section 5.C.).
The Director of Operations hereunder and under each Franchise Agreement shall
be the same individual.
C. At least six (6) managers (general manager, assistant general
manager, kitchen manager and other managers) are required with respect to the
initial Restaurant developed hereunder. Such managers shall attend and
successfully complete at Headquarters Grantor's training program for managers
of T.G.I. Friday's restaurants in the United States (currently approximately
twenty-one (21) weeks). Subject to Grantor's approval, subsequent managers
(except general managers) may be trained by Headquarters-trained general
managers in training Restaurants to which Grantor has consented. Any
previously trained manager who is to become a general manager shall attend
and successfully complete at Headquarters Grantor's training program for
general managers of T.G.I. Friday's restaurants in the United States
(currently approximately four (4) weeks).
D. When the Franchise Agreement for the third Restaurant is
executed, Developer shall designate the Multi-Unit Manager. Additional
Multi-Unit Managers shall be designated from time to time as reasonably
required by Grantor. Prior to assuming his duties, each Multi-Unit Manager
shall have successfully completed general manager training and shall attend
at Headquarters and successfully complete Grantor's training program for
multi-unit managers (currently approximately four (4) weeks).
E. Grantor shall have the right to interview and consent to each
Director of Operations, each Multi-Unit Manager and all Restaurant managers.
Grantor shall endeavor to conduct such interviews in the Territory, but
Grantor may require that such interviews occur at Headquarters at Developer's
expense.
F. Developer shall bear all costs and expenses relating to the
training of any Representative, Director of Operations, Multi-Unit Manager
and general, assistant, kitchen and other manager.
G. Grantor shall provide instructors, facilities and materials
for Headquarters training. All personnel trained at Headquarters and all
management employees at each Restaurant shall be fluent in [native language]
and in the English Language. All training shall be in the English language.
In the event a translator is required for training of Developer's employees
at any Site, Developer shall provide, at its expense, such translator (to
whom Grantor must consent).
H. Developer shall designate an individual who will be
responsible for sourcing food and beverage products ("F&B Director") within
sixty (60) days of the date hereof. Any replacement F&B Director shall be
designated within ten (10) days of the prior F&B Director's resignation or
termination. Each F&B Director shall dedicate sufficient time to this work to
enable the timely development of menus and sourcing and procurement of food
and beverage items which will be required to operate each Restaurant. The F&B
Director hereunder and under each Franchise Agreement shall be the same
individual. Within ninety (90) days of the date hereof and from time to time
thereafter, as Grantor deems necessary, Grantor's representative may visit,
at Developer's expense, the Developer in the Territory to ascertain the
availability of locally-sourced material, food and beverages.
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. Confidential Information
shall be disclosed only to such employees of Developer as is required in
connection with performance of job functions. Neither Developer nor any
Principal shall, without Grantor's prior consent, copy, duplicate, record or
otherwise reproduce any Confidential Information. Confidential Information
may be provided to consultants and contractors only to the extent necessary
for such parties to provide services to Developer. Developer shall indemnify
the Indemnitees from any damages, costs or expenses resulting from or related
to any disclosure or use of Confidential Information by its agents,
employees, consultants and contractors.
(2) Developer and each Principal acknowledge Grantor's
exclusive ownership of the Confidential Information and the System, and
TGIFM's exclusive ownership of, and Grantor's license with respect to, the
Proprietary Marks. Neither Developer nor any Principal shall, directly or
indirectly, contest or impair Grantor'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 Grantor)
to the Confidential Information, Developer and the Principals shall each
execute an amendment to this Agreement reflecting such improvements and
Grantor's or TGIFM's exclusive ownership thereof. All such improvements shall
be Confidential Information.
C. Each Principal shall execute and deliver to Grantor a
covenant in the form attached as EXHIBIT B. Developer shall cause each
Director of Operations, Representative, Multi-Unit Manager, general, kitchen
and other managers and such other employees of Developer whom Grantor shall
designate to execute and deliver to Grantor a covenant in the form attached
as EXHIBIT C. Notwithstanding the execution of such covenant, Developer shall
indemnify the Indemnitees from any damages, costs or expenses resulting from
or related to any disclosure or use of Confidential Information by any
Principal, Director of Operations, Representative, Multi-Unit Manager,
general, kitchen and other managers and other employees of Developer.
D. Immediately upon any termination or expiration of this
Agreement, Developer and each Principal shall return to Grantor the
Confidential Information (and any copies thereof), including 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.
7. DEVELOPER'S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE
COVENANTS
A. Developer represents and warrants to Grantor as follows:
(1) Developer is a corporation or partnership, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with all requisite power and authority to
own, operate and lease its assets (real or personal), to carry on its
business, to enter into this Agreement and perform its obligations hereunder.
Developer is duly qualified to do business and is in good standing in each
jurisdiction in which its business or the ownership of its assets requires.
(2) The execution, delivery and performance by Developer
of this Agreement, any Franchise Agreement and all other agreements
contemplated herein has been duly authorized by all requisite corporate or
partnership 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
certificate or articles of incorporation,
corporate charter, by-laws or partnership agreement or under any indenture,
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 certificate or articles of incorporation,
corporate charter, 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 certificate or
articles of incorporation, corporate charter, by-laws, partnership agreement,
other governing documents and any amendments thereto, including board of
director's or partner's resolutions authorizing this Agreement, each
translated into the English language, have been delivered to Grantor.
(5) Certified list of the shareholders of Developer,
including the number and type of shares owned by each shareholder.
(6) Developer's certificate or articles of incorporation,
corporate charter or partnership agreement limit Transfers as described in
Sections 8.B. and 8.C.
(7) If Developer is (i) a corporation, each Security
shall bear a legend (in a form to which Grantor consents) indicating that; or
(ii) a partnership, its partnership agreement shall provide (in a form to
which Grantor consents) that, any Transfer is subject to Sections 8.B. and
8.C.
B. Developer affirmatively covenants with Grantor as follows:
(1) Developer shall perform its duties and obligations
hereunder and under any Franchise Agreement and shall require each Director
of Operations, Multi-Unit Manager and general, assistant general, kitchen and
other managers to dedicate their respective full time and best efforts to the
development, construction, management, operation, supervision and promotion
of the Restaurants.
(2) Developer shall promptly provide to Grantor, without
charge, any 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. Any such process or
improvement shall be Grantor's exclusive property.
(3) Developer shall comply with all requirements of
applicable laws, rules, regulations and ordinances.
(4) Developer shall maintain a current list of all
Principals and deliver a certified copy thereof to Grantor upon (i) any
Transfer; or (ii) request.
(5) Each Security issued subsequent to the date hereof
shall bear a legend (in a form acceptable to Grantor) indicating that any
Transfer is subject to Sections 8.B. and 8.C.
C. Developer acknowledges to and/or negatively covenants with
Grantor as follows:
(1) Developer shall not amend its certificate or articles
of incorporation, corporate charter, by-laws, partnership agreement or other
governing documents in a manner which is inconsistent with Sections 7.A.(3),
8.B. 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 Restaurants 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 two (2) years
after the expiration or termination of this Agreement, neither Developer nor
any Principal shall, directly or indirectly:
(a) employ or seek to employ any person (or
induce such person to leave his or her employment) who is, or has within
one (1) year been, employed as a director, officer or in any managerial
capacity (i) by Grantor; (ii) by any developer or franchisee of Grantor; or
(iii) in any other concept or system owned, operated or franchised by an
Affiliate;
(b) own, maintain, operate or have any interest
in any Competing Business;
(c) own, maintain, operate or have any interest
in any Competing Business which business is, or is intended to be, located in
the Territory; or
(d) own, maintain, operate or have any interest
in any Competing Business which business is, or is intended to be, located
within a twenty (20) kilometer radius of any restaurant in the System (for
purposes of enforcement of this Section 7.C.(3)(d) the law of the
jurisdiction where such restaurant is located shall control).
(4) Sections 7.C.(3)(b), (c) and (d) shall not apply to
the acquisition by Developer of 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. Grantor 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.
8. TRANSFER
A. Grantor 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 any such assignment shall not
affect Developer's rights hereunder.
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 Grantor 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, or their
respective successors or permitted assigns, shall complete, or allow to be
completed, any Transfer without Grantor's consent. Any purported Transfer, by
operation of law or otherwise, without Grantor's consent shall be null and
void and constitute an Event of Default.
(2) Grantor may require satisfaction of any of the
following conditions, and such other conditions as Grantor may reasonably
require, prior to consenting to any Transfer:
(a) (i) no Event of Default shall have occurred
under this Agreement and be continuing, and (ii) no event shall have occurred
under this Agreement 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 Indemnitees,
including, without limitation, claims arising under this Agreement and any
Franchise Agreement, in a form acceptable to Grantor;
(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 Grantor to evidence such liability;
(d) the transferee and all owners of any record
or beneficial interest in the capital stock (or other interest) thereof 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 Grantor) reasonably requested by Grantor
to evidence the foregoing;
(e) the transferee shall satisfy, in Grantor's
reasonable judgment, Grantor's then existing criteria for international
developers or principals, including, without limitation: (i) education; (ii)
business skill, experience and aptitude; (iii) character and reputation; and
(iv) financial resources;
(f) the transferee and its owners shall execute
(without extending the Term) the standard form of development agreement then
being offered to new System developers in international markets or other form
of this Agreement and such other ancillary agreements as Grantor may request,
all of which shall supersede this Agreement and its ancillary documents and
the terms of which may differ from the terms hereof; PROVIDED, HOWEVER, that
the transferee shall not be required to pay the Pre-Paid Franchise Fee
(transferee shall pay all Franchise Fees and other fees described in each
Franchise Agreement); and
(g) at the transferee's expense, the transferee's
Representative, any Multi-Unit Manager(s), Director of Operations, general
manager(s) and other managers shall complete such training as then required
(if not previously trained pursuant to the terms hereof), upon such terms and
conditions as Grantor may reasonably require.
C. Developer and each Principal agree that (i) no Transfer
(including the issuance of any new Securities) shall occur without Grantor's
prior written consent; (ii) Grantor shall have and is hereby granted a right
of first refusal and option with respect to any Transfer; (iii) should any
Principal desire to accept a BONA FIDE offer to so Transfer or should
Developer desire to issue or sell any new Securities, such party shall
promptly notify Grantor thereof and shall provide such information and
documents relating thereto as Grantor may require; (iv) within thirty (30)
days after receipt of such notice and documents, Grantor may notify such
party that it intends to complete such Transfer upon such terms and
conditions (PROVIDED, HOWEVER, that (a) Grantor may elect to make payment in
United States dollars or such other
currency Grantor designates and (b) such transaction shall be consummated
within a reasonable period of time after Grantor has given such notice); (v)
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 Grantor's
right and option; and (vi) Grantor's failure to exercise such right and
option shall not constitute a waiver of such right and option with respect to
future offers.
D. In the event Developer requests Grantor's consent to any
proposed Transfer, there shall be paid to Grantor a non-refundable fee to
compensate Grantor for its costs and expenses associated with reviewing the
proposed Transfer, including, without limitation, travel costs and expenses,
legal and accounting fees and diversion of employee resources. No such fee
shall be payable with respect to a transaction with Grantor described in
Section 8.C.
E. In the event any Principal is a natural person, Developer
shall promptly notify Grantor of the death or Permanent Disability of 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 date of death;
or (ii) ninety (90) days after the date such Principal becomes, or is deemed
to be, Permanently Disabled. Any Principal refusing to submit to examination
with respect to Permanent Disability shall be deemed Permanently Disabled.
F. Grantor'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.
9. CONSENT AND WAIVER
A. When required, Developer or any Principal shall make written
request for Grantor's consent in advance and such consent shall not be deemed
given by Grantor unless it is set forth in writing. Grantor's consent shall
not be unreasonably withheld, except as expressly provided herein.
B. Grantor 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,
approval, advice, consent or services to Developer or due to any delay or
denial thereof.
10. DEFAULT AND REMEDIES
A. The following shall constitute Events of Default by
Developer: (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 to 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.A.(6) or 8.B.); (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 that is not dismissed within
thirty (30) days of appointment for (a) all or substantially all of
Developer's assets or (b) any Restaurant; (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 to or is convicted of a felony or a crime involving moral turpitude or
any other crime or offense that Grantor reasonably believes is likely to
adversely affect the System or the goodwill associated therewith (whether in
the United States, the Territory or elsewhere) or Grantor's interest
therein; or (xiii) any (a) two (2) or more Events of Default shall arise
under any single Section of this Section 10.A. or (b) three (3) or more
Events of Default shall arise under this Section 10.A., in any continuous
twelve (12) month period, notwithstanding the previous cure of such Events of
Default.
Grantor 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 Grantor thereof and the
expiration of the following cure periods:
(a) with respect to any Event of Default arising under
Section 10.A.(vi) - ten (10) days; or
(b) with respect to any Event of Default arising under
Sections 10.A.(i)-(v) inclusive, (vii) and (x) - thirty (30) days.
No such limitation upon Grantor's right to exercise remedies
shall exist with respect to Events of Default arising under Sections
10.A.(viii), (ix) or (xi) through (xiii), inclusive.
B. Upon the occurrence of an Event of Default, Grantor 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 Developer (i) hereby grants to Grantor all
rights and powers necessary or appropriate to accomplish such cure; (ii)
shall indemnify and hold the Indemnitees harmless from and against all costs,
expenses (including reasonable fees of counsel and other engaged
professionals), liabilities, claims, demands and causes of action (including
actions of third parties) incurred by or alleged against any Indemnitee in
connection with Grantor's cure; and (iii) shall reimburse or pay such costs
or damages within ten (10) days of receipt of Grantor's invoice therefor;
(2) in the event of a material Event of Default,
terminate this Agreement and all rights granted hereunder, upon notice to
Developer, without waiving any (i) claim for damages suffered by Grantor; or
(ii) other rights, remedies or claims; 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 ; or
(4) with respect to an Event of Default for failure to
comply with the Development Schedule, Grantor may, at its discretion,
exercise any one or more of the following remedies:
(i) cause any Pre-Paid Franchise Fees then being
held by Grantor to be forfeited, in which case Developer (or Franchisee, as
the case may be) will be required to pay the full Franchise Fee (without
deduction of a Pre-Paid Franchise Fee) with respect to any Restaurants
developed after the date such Pre-Paid Franchise Fees are forfeited;
(ii) provided Grantor has not elected to terminate
this Agreement pursuant to Section 10.B.(2) above, require Developer to pay
to Grantor additional Pre-Paid Franchise Fees equal to
fifteen percent (15%) of the Franchise Fee, multiplied by the number of
Restaurants remaining to be developed under the Development Schedule;
(iii) provided Grantor has not elected to terminate
this Agreement pursuant to Section 10.B.(2) above, require the Developer to
pay to Grantor the Franchise Fee for the next Restaurant coming due under the
Development Schedule in full on a date certain, even if such date certain is
prior to the date such Franchise Fee would have otherwise been due under this
Agreement;
(iv) provided Grantor has not elected to terminate
this Agreement pursuant to Section 10.B.(2) above, cause the Development
Schedule to be modified by (a) reducing the number of Restaurants the
Developer has a right to develop under this Agreement by the number of
Restaurants that have not been developed on a timely basis; or (b)
accelerating the schedule for future Restaurant development;
(v) provided Grantor has not elected to terminate
this Agreement pursuant to Section 10.B.(2) above, require the Developer to
pay to Grantor a sum equal to the amount of royalties that would have been
paid to Grantor had Developer opened, in accordance with Developer's
obligations under the Development Schedule, the Restaurant for which an Event
of Default has been declared, such amount to be calculated based on the
greater of: (a) the "pro forma" Gross Sales figures developed by Developer in
connection with the site consent process; or (b) the average unit gross sales
volume for all T.G.I. Friday's international restaurants for the year ended
prior to the first day of the year in which the default has been declared;
and/or
(vi) provided Grantor has not elected to
terminate this Agreement pursuant to Section 10.B.(2) above, in the event
that the Territory may, in the reasonable judgment of Grantor, be divided
into two or more territories for the development of T.G.I. Friday's
restaurants, Grantor may terminate Developer's rights to develop certain
portions of the Territory (thus terminating Developer's claims under this
Agreement with respect to such portions of the Territory) without terminating
Developer's rights to develop certain other portions of the Territory.
For purposes of this Section 10., "material" shall mean a
substantial deviation from the performance required. The parties agree that
Events of Default arising under Sections 10.A.(i), (v), (vi), (viii), (ix),
(xi), (xii) or (xiii) (without limitation) shall constitute material Events
of Default.
C. Developer and each Principal agree that Grantor's exercise of
the rights and remedies set forth herein are reasonable. Grantor 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
Grantor's right to obtain equitable relief.
D. Grantor's rights and remedies 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 Developer or any Principal from any liability or obligation then
accrued or any liability or obligation continuing beyond, or arising from,
such expiration or termination.
E. Grantor's failure to exercise any right or remedy or to
enforce any obligation, covenant or agreement herein shall not constitute a
waiver by, or estoppel of, Grantor's right to enforce strict compliance with
any such obligation, covenant or agreement. No custom or practice shall
modify or amend this Agreement. Grantor's waiver of, or failure or inability
to enforce, any right or remedy shall not impair Grantor's rights or remedies
with respect to subsequent Events of Default of the same, similar or
different nature. Grantor's delay, forbearance or failure to exercise any
right or remedy in connection with
any Event of Default or default by other developers shall not affect, impair
or constitute a waiver of such rights or remedies. Acceptance of any Payment
shall not waive any Event of Default.
F. Developer and each Principal shall, jointly and severally,
pay all costs and expenses (including reasonable fees of counsel and other
engaged professionals) incurred by Grantor in successfully enforcing this
Agreement. The existence of any claims, demands or actions which either
Developer or any Principal may have against Grantor, whether arising from
this Agreement or otherwise, shall not constitute a defense to Grantor's
enforcement of Developer's or any Principal's representations, warranties,
covenants, obligations or agreements herein.
G. During the Term, the parties acknowledge that:
(1) if any governmental authority expropriates or
threatens to expropriate any of the assets of Developer;
(2) if any governmental authority expropriates or
threatens to expropriate any assets (including, but not limited to, the
intellectual property rights) of Grantor; or
(3) if Developer is prevented by any governmental
authority whether due to foreign exchange restrictions or for any other
reason from paying any Royalty Fee (as defined in the applicable Franchise
Agreement) or making any other payment to Grantor in United States Dollars
for a period of twelve (12) months, Grantor or Developer may, at either
party's option, terminate this Agreement on the giving of thirty (30) days
notice in writing to the other party.
H. In addition to all other rights and remedies set forth in
this Section 10, in the event that Developer shall fail, for any reason, to
comply with the Development Schedule, Grantor shall have the right to notify
Developer of such failure and to require Developer to immediately pay to
Grantor the total amount of unpaid Franchise Fees that would have been
payable to Grantor if Developer had complied with the Development Schedule.
In the event that Developer fails to pay such amount within thirty (30) days
of receipt of written request therefor by Grantor, such failure shall be
deemed an Event of Default by Developer under this Agreement and a default or
Event of Default under each Franchise Agreement executed pursuant to this
Agreement, without the passage of any additional grace or cure period. In
such event, Grantor shall be entitled to exercise any or all of its rights
and remedies as Grantor under this Agreement and as Franchisor under each
Franchise Agreement.
11. ARBITRATION
A. EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED HEREIN, ANY DISPUTE
UNDER THIS AGREEMENT NOT SETTLED BY AGREEMENT SHALL BE REFERRED TO
ARBITRATION. ARBITRATION MAY BE INITIATED AND ARBITRATORS CHOSEN AS PROVIDED
IN THE UNCITRAL ARBITRATION RULES.
B. NO ARBITRATOR CHOSEN PURSUANT TO SECTION 11.A. SHALL BE
RELATED TO OR AFFILIATED WITH GRANTOR, DEVELOPER, EITHER PARTY'S AFFILIATES,
ANY PRINCIPAL, THE REPRESENTATIVE OR THE DIRECTOR OF OPERATIONS. ALL
ARBITRATORS SHALL BE FLUENT IN THE ENGLISH LANGUAGE.
C. THE ARBITRAL PROCEEDINGS SHALL BE CONDUCTED IN (i) ACCORDANCE
WITH AND SHALL BE SUBJECT TO THE UNCITRAL ARBITRATION RULES IN EFFECT FROM
TIME TO TIME; AND (ii) THE ENGLISH LANGUAGE. THE ARBITRATION PROCEEDINGS
SHALL BE CONDUCTED IN THE CITY IN WHICH THE RESPONDENT PARTY'S CORPORATE
HEADQUARTERS
IS LOCATED.
D. THE DECISION IN WRITING OF THE ARBITRATOR(S) SHALL BE (i) IN THE
ENGLISH LANGUAGE AND (ii) FINAL AND BINDING. THE COSTS AND EXPENSES OF
ARBITRATION SHALL BE BORNE 50% BY GRANTOR AND 50% BY DEVELOPER. EACH PARTY SHALL
BEAR THE COSTS AND EXPENSES OF THE ARBITRATOR IT HAS CHOSEN AND THE COSTS AND
EXPENSES OF ANY ADDITIONAL ARBITRATORS SHALL BE SHARED 50% BY GRANTOR AND 50% BY
DEVELOPER. EITHER PARTY MAY APPLY TO ANY COURT HAVING JURISDICTION FOR AN ORDER
CONFIRMING, OR TO ENFORCE, THE AWARD. ANY RIGHT OF EITHER PARTY TO JUDICIAL
ACTION ON ANY MATTER SUBJECT TO ARBITRATION HEREUNDER IS HEREBY WAIVED, EXCEPT
SUIT TO ENFORCE THE ARBITRATION AWARD.
E. THE ARBITRATOR(S) SHALL NOT EXTEND, MODIFY OR SUSPEND ANY OF THE
TERMS OF THIS AGREEMENT OR THE REASONABLE STANDARDS OF BUSINESS PERFORMANCE AND
OPERATION ESTABLISHED BY GRANTOR IN GOOD FAITH. A NOTICE OF, OR REQUEST FOR,
ARBITRATION WILL NOT OPERATE TO STAY, POSTPONE OR RESCIND THE EFFECTIVENESS OF
ANY DEMAND FOR PERFORMANCE OR NOTICE OF TERMINATION.
F. NOTWITHSTANDING THE FOREGOING, ACTIONS INITIATED OR MAINTAINED BY
GRANTOR FOR INJUNCTIVE OR OTHER EQUITABLE RELIEF ARE NOT LIMITED TO ARBITRATION
AND MAY BE BROUGHT IN ANY COURT HAVING JURISDICTION.
12. INDEMNIFICATION
A. Subject to Section 9.01.C of each Franchise Agreement, Developer and
each Principal shall, at all times, indemnify and hold harmless, to the fullest
extent permitted by law, the 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 Developer or any Principal of any patent, xxxx
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
Grantor 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 Grantor immediate notice
of any such action, suit, proceeding, claim, demand, inquiry or investigation.
C. Grantor 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. Grantor 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 Grantor for its
attorneys' fees, expenses, and costs incurred in connection with the exercise of
Grantor'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 Grantor's exercise of its rights under Section
12.C. actually results in Developer's insurer (with respect to insurance
required to be maintained by Developer pursuant to Section 11 of the Franchise
Agreement) (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 Grantor without the need for any
further action on Grantor's or Developer's part. For the purposes of Section 12,
"actually results" means that, but for Grantor's exercise of its rights under
Section 12.C., the Insurer would not have refused to pay on said third-party
claim.
F. In the event that Grantor'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 Grantor for the Grantor'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 Grantor for the Grantor'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 Grantor 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, Grantor 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 Grantor'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 its indemnity obligations under Section 12.D.,
Developer and each Principal shall indemnify Grantor for any and all losses,
compensatory damages, exemplary or punitive damages, fines, charges, costs,
expenses, lost profits, settlement amounts, judgments, compensation for damages
to the Grantor's reputation and goodwill, 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, which result from any of the items set
forth in Section 12.
K. Grantor 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 Grantor for all losses and expenses which may arise out of
any acts, errors or omissions of these third parties.
L. Under no circumstances shall Grantor 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 losses will
in no way reduce the amounts recoverable by Grantor from Developer or any
Principal.
M. Notwithstanding anything to the contrary contained in this
Agreement, Developer is not required to indemnify Grantor with regard to any
infringement, alleged infringement or other violation or alleged violation by
Developer or any Principal of any patent, xxxx, 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 Grantor pursuant to this
Agreement. In the event Developer is involved in such an action, Grantor agrees
to indemnify Developer and each Principal in connection with the defense
thereof, and to indemnify and hold Developer and each Principal 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 Grantor 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 extend that failure to have timely
provided such notice to Grantor materially impairs Grantor'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 Grantor 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 Grantor 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 or
facsimile to the following addresses (or such other addresses as designated
pursuant to this Section 13):
if to Grantor: TGI FRIDAY'S INC.
Attention: General Counsel
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx XXX 00000
Facsimile No. (1)(000) 000-0000
if to Developer or any Principal:
[Developer Name]
[Attention]
[Address1]
[Address2]
Facsimile No. (011) [Fax #]
Notices posted by personal delivery or given by facsimile shall be
deemed given upon receipt. Notices posted by expedited delivery service shall be
deemed received three (3) Business Days after the date of posting.
14. FORCE MAJEURE
No party shall be liable for any inability to perform resulting from
acts of God or other causes beyond their reasonable control; PROVIDED, HOWEVER,
that (i) nothing herein shall excuse or permit any delay or failure to remit any
Payment on the date due; (ii) financial inability or insolvency shall never be
deemed an act of God or other cause beyond a party's control; and (iii) no such
cause shall excuse or permit any delay or failure to perform 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 Grantor's reasonable judgment, Grantor's
ability to preserve its or TGIFM's rights (if any) in, or the goodwill (if any)
underlying, the Proprietary Marks, the System and/or the Confidential
Information, Grantor 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. Nothing herein shall create
the relationship of principal and agent, legal representative, joint venturers,
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 Grantor's name.
17. DUE DILIGENCE AND ASSUMPTION OF RISK
A. Developer and each Principal (i) have conducted such due diligence
and investigation as it desires; (ii) recognize that the business venture
described herein involves risks; and (iii) acknowledge that the success of such
business venture is dependent upon the abilities of Developer and each
Principal. GRANTOR EXPRESSLY DISCLAIMS THE MAKING OF, AND DEVELOPER AND EACH
PRINCIPAL ACKNOWLEDGES THAT IT HAS 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 understands
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 with respect to this Agreement.
B. Grantor shall not be considered to be engaged in or doing
business in [Country] or any political subdivision thereof by virtue of
being a party to this Agreement.
C. 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) and the requirement of liquidated damages
contained in Section 10.B.(3).
D. 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 and the same instrument.
E. Except as otherwise provided in Section 7.C.(3)(d), this Agreement
shall be interpreted and construed under the laws of [Country Law].
F. All references herein to the masculine, neuter or singular shall be
construed to include the masculine, feminine, neuter or plural.
G. This Agreement shall be executed in English only. Developer may
translate this Agreement into [native language], but the English language
version of this Agreement shall define the rights, duties and remedies of the
parties and shall control in all respects. Developer shall prepare all
correspondence, reports, notices and other materials required or permitted
hereunder in English. If required and upon notice to Grantor, Developer may
translate, at its expense, any materials provided by Grantor. Developer's
translator must be consented to by Grantor. Any changes or improvements that
occur as a result of translation shall inure to the sole benefit of Grantor.
H. 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.
I. Developer shall not use the words "Friday's," "T.G.I. Friday's,"
"TGIF" or "the American Bistro," or any part thereof, as part of its corporate
or other name.
19. ENTIRE AGREEMENT
This Agreement and the Exhibits and Schedules hereto
constitute the entire agreement between Grantor, 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 EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. Except
those permitted to be made unilaterally by Grantor, any amendments or
modifications of this Agreement shall be in writing and executed by Developer
and Grantor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Grantor: TGI FRIDAY'S INC. Developer: [DEVELOPER NAME]
By: By:
----------------------- ------------------------
Name: Name:
--------------------- ----------------------
Title: Title:
--------------------- ---------------------
(PRINCIPAL'S NAME) acknowledges, covenants and represents as follows:
------------------------
(1) he/it has read the terms and conditions of this Agreement;
(2) he/it is a "Principal" as described in this Agreement;
(3) he/it is the owner of and has the right to vote ____ percent (____%) of
the Securities of Developer;
(4) he/it 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 and maintenance of
Confidential Information) and is obligated to perform thereunder;
(5) he/it has derived and expects to derive financial or other benefit,
directly or indirectly, from this Agreement and the transaction described
herein;
(6) he/it acknowledges that his/its execution of this Agreement, and his/its
undertakings and agreements herein, has induced Grantor to enter into the
transactions described in, and to execute, this Agreement; and
(7) he/it consents to and shall be bound by any amendment of this Agreement
made by Grantor and Developer pursuant to the terms hereof.
Signed, sealed and delivered
in the presence of
Name:
Name
Date:
EXHIBIT 10.10
EXHIBIT B TO DEVELOPMENT AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [PRINCIPAL'S NAME]
("Principal") and TGI FRIDAY'S INC. ("Grantor"), a corporation organized
under the laws of the State of New York, United States of America, in
connection with that certain Development Agreement dated [Dev Agmt Date] (the
"Development Agreement"), by and between Grantor and [Developer Name]
("Developer").
WHEREAS, Grantor and Developer have entered into the Development
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Grantor that are not generally known to, and are not legally available to,
third parties; and
WHEREAS, Grantor 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 Grantor agree as follows:
1. Grantor or Developer may disclose to Principal certain Confidential
Information which may be utilized by Principal solely (a) in [his/its] 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 Grantor 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 Grantor's
or TGIFM's ownership of, or interest in, the Confidential Information, the
System or the Proprietary Marks.
2. 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, Grantor, 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
Grantor, be (x) copied, (y) compiled (in total or in part) with other
information, or (z) disclosed to any third party.
3. 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,
representatives 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. Each of such agents, representatives and employees shall
have been advised by Principal, prior to disclosure of any Confidential
Information, of the confidential and proprietary nature of the Confidential
Information and each shall have agreed to be bound by the terms and conditions
of this Agreement. Notwithstanding such agreement, Principal shall indemnify the
Indemnitees from and against any damages, costs (including attorney's fees) 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.
4. Immediately upon Grantor's request or upon any termination of the
Term, Principal shall return to Grantor the Confidential Information (and any
copies thereof), including 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.
5. Each of the representations, warranties, covenants, acknowledgments
and agreements of Principal, and the rights and remedies of Grantor 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.B.(3)
of the Development Agreement, are incorporated in this Agreement by reference as
if fully set forth herein. In connection with Grantor's enforcement of such
rights and remedies (or other rights and remedies of Grantor under this
Agreement), any court of competent jurisdiction selected by Grantor shall have
personal jurisdiction (to which Principal hereby irrevocably consents) over
Principal.
6. Grantor 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 Grantor's right to obtain equitable relief.
7. 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.
8. 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.
9. Principal acknowledges and warrants that [he/it] 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.
10. Capitalized terms used herein and not otherwise defined shall have
the meanings attributed to them in the Development Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the dates indicated below.
TGI FRIDAY'S INC.
Name: By:
Date: Its:
Date:
WITNESS:
Date:
EXHIBIT 10.10
EXHIBIT C TO DEVELOPMENT AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [EMPLOYEE'S NAME]
("Employee"), [Developer Name] ("Developer") and TGI FRIDAY'S INC. ("Grantor"),
a corporation organized under the laws of the State of New York, United
States of America, in connection with that certain Development Agreement
dated [Dev Agmt Date] (the "Development Agreement"), by and between Grantor
and Developer.
WHEREAS, Grantor and Developer have entered into the Development
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Grantor that are not generally known to, and are not legally available to,
third parties; and
WHEREAS, Grantor 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, Developer and Grantor agree as
follows:
1. Grantor or Developer may disclose to Employee certain 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 Grantor or
TGIFM is the exclusive owner of the Confidential Information, the System and the
Proprietary Marks. Employee shall not, directly or indirectly, contest or impair
Grantor's or TGIFM's ownership of, or interest in, the Confidential Information,
the System or the Proprietary Marks.
2. 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 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, Grantor, TGIFM or Developer. Except as
permitted pursuant to this Agreement, the Confidential Information shall not,
without the prior written consent of Grantor, be (x) copied, (y) compiled (in
total or in part) with other information, or (z) disclosed to any third party.
3. 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.
4. Immediately upon Grantor'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 to Developer or
Grantor the Confidential Information (and any copies therof), including 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.
5. 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 two (2) years 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 Grantor or
Developer; (ii) by any other developer or franchisee
of Grantor; 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
business offering the same or similar products and
services as offered by restaurants in the System;
(c) own, maintain, operate or have any interest in any
business offering the same or similar products and
services as offered by restaurants in the System
which business is, or is intended to be, located in
the Territory; or
(d) own, maintain, operate or have any interest in any
business offering the same or similar products and
services as offered by restaurants in the System,
which business is, or is intended to be, located
within a radius of twenty (20) kilometers of any
restaurant in the System (for purposes of enforcement
of this Section (d) the law of the jurisdiction where
such restaurant is located shall control).
6. A. Grantor 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 Grantor's right to obtain
equitable relief.
B. With respect to Employee's breach of the covenants
contained in Section 5(a) hereof, the affected former employer shall be
compensated by Employee (and Developer shall be additionally liable for such
breach) 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 and Developer (jointly and severally) to the former employer
at such time as such employee commences employment.
C. In connection with Grantor's enforcement of such rights and
remedies (or other rights and remedies of Grantor under this Agreement), any
court of competent jurisdiction selected by Grantor shall have personal
jurisdiction (to which Employee hereby irrevocably consents) over Employee.
7. 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.
8. 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.
9. Developer undertakes to cause Employee to comply with the terms and
conditions of this Agreement. Developer shall indemnify and hold the Indemnitees
harmless from and against any damages, costs or expenses (including attorney's
fees) resulting from any disclosure or use of Confidential Information, or any
part thereof, by Employee contrary to the terms hereof.
10. Capitalized terms used herein and not otherwise defined shall have
the meanings attributed to them on ANNEX A hereto.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the dates indicated below.
[EMPLOYEE] TGI FRIDAY'S INC.
Name: By:
Date: Its:
Date:
WITNESS: [DEVELOPER NAME]
By:
Its:
Name: Date:
EXHIBIT 10.10
Annex A to Covenant and Agreement for Confidentiality
AFFILIATE - Xxxxxxx Restaurants Worldwide Inc. or any subsidiary thereof or
of Grantor
COMMENCEMENT DATE - [Dev Agmt Date]
CONFIDENTIAL INFORMATION - the terms of the Development Agreement and Franchise
Agreement and any amendments thereto, 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 all other information
know-how, techniques, materials and data imparted or made available by Grantor
which is (i) designated as confidential, (ii) known by Developer or Employee to
be considered confidential by Grantor, or (iii) by its nature inherently or
reasonably considered confidential
DEVELOPMENT MANUAL - Grantor's manual, as amended from time to time in Grantor's
reasonable discretion, describing (generally) the procedures and parameters
required for the development of T.G.I. Friday's restaurants
INDEMNITEES - Grantor, its directors, officers, employees, agents,
shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders and affiliates of each
MANUALS - Grantor's United States confidential operating manuals, as amended
from time to time
PROPRIETARY MARKS - certain trademarks, trade names, service marks, emblems
and indicia of origin designated by Grantor from time to time in connection
with the operation of T.G.I. Friday's restaurants pursuant to the System in
the Territory
RESTAURANT(S) - T.G.I. Friday's restaurant(s) developed pursuant to the
Development Agreement
STANDARDS - the standards and specifications, as amended from time to time,
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 Grantor for the
establishment and operation of T.G.I. Friday's restaurants, including, without
limitation, distinctive exterior and interior design, decor, color scheme and
furnishings; special recipes, menu items and full service bar; employee uniform
standards, products, services and specifications; procedures with respect to
operations and inventory and management control (including accounting procedures
and policies); training and assistance; and advertising and promotional programs
(as further developed by Grantor from time to time);
TERM - the duration of the Development Agreement, commencing on the
Commencement Date and continuing until _________, 19__, unless sooner
terminated
TERRITORY - [Country], as geographically constituted on [Dev Agmt Date]
TGIFM - TGI Friday's of Minnesota Inc., a Minnesota (U.S.) corporation and a
subsidiary of Grantor
EXHIBIT 10.10
SCHEDULE 4.A. TO DEVELOPMENT AGREEMENT
CALCULATION OF CONCEPT FEE
The Concept Fee shall be calculated by dividing U.S. $350,000.00 by a
number equal to 1.00 minus any applicable withholding, value added or
similar tax or fee (expressed as a percentage; rate of "X") or:
U.S. $350,000.00 = Concept Fee
-----------
1.00-X
Example: If the applicable withholding, value added or similar tax or fee
(expressed as a percentage) is 10%, the Concept Fee is calculated as follows:
U.S. $350,000.00 = $388,888.88
-----------
1.00-0.10
It is the intention of the parties that, after Developer's payment of
applicable taxes or fees as described in Section 4.C.(2), the net amount
received by Grantor shall be U.S. $350,000.00.
CALCULATION OF PRE-PAID FRANCHISE FEE
The Pre-Paid Franchise Fee shall be calculated as follows:
U.S. $(10,000 X # OF RESTAURANTS) = Pre-Paid Franchise Fee
----------------------------
1.00-X
It is the intention of the parties that, after Developer's payment of
applicable taxes or fees as described in Section 4.C.(2), the net amount
received by Grantor shall be (U.S. $10,000 x # of Restaurants).
PRE-PAID FRANCHISE FEE CREDIT
(after withholding, value added or similar tax or fee)
NET AMOUNT PAYABLE
FRANCHISE FEE PRE-PAID FRANCHISE UPON EXECUTION OF
PER RESTAURANT FEE PER RESTAURANT FRANCHISE AGREEMENT
-------------- ------------------ -------------------
U.S. $100,000 U.S. $10,000 U.S. $90,000
