Document:

Exhibit 10.11

 

FIRST AMENDMENT TO DEVELOPMENT AGREEMENT

 

This First Amendment to Development
Agreement (this “Amendment”) is entered into effective as of  February 17, 2005, (the “Effective Date”),
by and between TGI Friday’s Inc. (“Friday’s”), and Main St. California, Inc. (“Developer”).

 

WITNESSETH:

 

WHEREAS,
Friday’s and Developer are parties to a certain Development Agreement dated March 15,
2004, with an effective date of January 1, 2004 (the “Development
Agreement”), pursuant to which Developer was granted the right to develop
T.G.I. Friday’s restaurants in portions of Southern California defined as the
Territory; and

 

WHEREAS,
Friday’s and Developer desire to amend and supplement the terms of the
Development Agreement as hereinafter set forth; and

 

WHEREAS,
capitalized terms used herein shall have the meaning attributed to them in the
Development Agreement unless expressly defined otherwise herein.

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged
by each of the parties hereto, Friday’s and Developer agree as follows:

 

1.                                       Section 3.A.(iv).
of the Development Agreement is hereby deleted in its entirety.

 

2.                                       In
consideration of Friday’s execution of this Amendment, Developer and its
franchisee companies, for themselves, their successors, assigns and affiliates
(collectively, the “Releasing Parties”), remise, release, acquit, satisfy and
forever discharge Friday’s, its successors, predecessors, counsel, insurers,
assigns, officers, directors, employees, representatives, agents, parent
company, affiliates and subsidiaries, past and present from and against all
claims, actions, causes of actions, demands, damages, costs, suits, debts,
covenants, controversies, and any other liabilities whatsoever, whether known
or unknown, liquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal or equitable, which the Releasing Parties ever had, now have,
can, shall or may have, against Friday’s arising out of or in connection with,
the Development Agreement, any Franchise Agreement, the relationship between
Friday’s and Developer as vendor and vendee of goods or as a franchisor and a
franchisee, the consent, development and operation of the T.G.I. Friday’s
restaurant to be located at the Southwest Quadrant of Beach Boulevard and La
Palma Avenue at Knott’s Berry Farm, Buena Park, California or any other cause
or circumstances, until the date of this Amendment.

 

3.                                       The
provisions, representations, terms, conditions, covenants and agreements of the
Development Agreement, as modified hereby, shall remain in full force and
effect, enforceable in accordance with its terms.  This Amendment shall be binding upon the
heirs, legal representatives, successors and assigns of the parties hereto.

 

4.                                       Execution
and delivery of this Amendment shall not waive any rights or remedies of the
parties under the Development Agreement, at law or in equity.

 

 

IN
WITNESS HEREOF, the parties have executed this Amendment as of the day and year
first above mentioned.

 

 

	
  TGI
  FRIDAY’S INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Michael J.
  Archer

  	
   

  
	
  Name:

  	
  Michael J.
  Archer

  	
   

  
	
  Title:

  	
  Chief Operating
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MAIN
  ST. CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Michael J.
  Herron

  	
   

  
	
  Name:

  	
  Michael J.
  Herron

  	
   

  
	
  Title:

  	
  Vice PresidentExhibit 10.12

 

CALIFORNIA DEVELOPMENT INCENTIVE
AGREEMENT

 

This CALIFORNIA DEVELOPMENT INCENTIVE AGREEMENT
(this “Agreement”) is entered this 15 day of March, 2004 but effective as of January 1,
2004 (the “Effective Date”), by and among TGI Friday’s Inc. (“Friday’s”), Main
St. California, Inc. (the “Franchisee”),
and Main Street and Main Incorporated (the “Principal”).

 

RECITALS

 

A.                                   Friday’s and Franchisee
are parties to a Development Agreement dated March    ,
2004 for certain counties in Southern California (the “Development Agreement”)
and to the Franchise Agreements for the T.G.I. Friday’s Restaurants located in
Southern California (the “Restaurants”) listed on Exhibit A (collectively,
and including any Franchise Agreements entered into during the term of this
Agreement, the “Franchise Agreements”). 
Unique economic circumstances in Southern California have resulted in
increased development and operating costs for the Restaurants as compared to
restaurants in other areas of the country.

 

B.                                     The Principal has an
ownership interest in or otherwise controls Franchisee, and as such is deemed
to be a “Principal” under the applicable Franchise Agreements.

 

C.                                     Friday’s has agreed to provide Franchisee
certain development incentives as specifically described in this Agreement
conditioned upon Franchisee’s full and timely compliance with the terms and
conditions of this Agreement, the Development Agreement and the Franchise
Agreements.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto, Friday’s, Franchisee and Principal
agree as follows:

 

1.                                       Term.  The term of this Agreement shall be from January 1,
2004 through December 31, 2009 (the “Term”), unless earlier terminated
pursuant to the terms hereof.

 

2.                                       Modification
of Royalty Payment Obligation.  Throughout the Term, Franchisee’s obligation
to pay Royalty Fees (as that term is defined in the Franchise Agreements) at
the Restaurants shall be as stated in the following Royalty Modification
Tables.

 

Royalty Modification Table – Schedule A (2004 only)

 

	
  Annual Gross Sales for

  each Restaurant

  	
   

  	
  Royalty Fee

  	
   

  
	
  Under $2 million

  	
   

  	
  1.5

  	
  %

  
	
  $2.0 - $2.5 million

  	
   

  	
  2.0

  	
  %

  
	
  $2.5 - $3.0 million

  	
   

  	
  2.5

  	
  %

  
	
  $3.0 - $3.5 million

  	
   

  	
  3.0

  	
  %

  
	
  $3.5 million and over

  	
   

  	
  4.0

  	
  %

  

 

1

 

Royalty Modification Table – Schedule B (2005 – 2009)

 

	
  Annual Gross Sales for

  each Restaurant

  	
   

  	
  Royalty Fee

  	
   

  
	
  Under $ 2 million

  	
   

  	
  1.5

  	
  %

  
	
  $ 2.0 - $ 2.5 million

  	
   

  	
  2.0

  	
  %

  
	
  $2.5 - $3.0 million

  	
   

  	
  2.5

  	
  %

  
	
  $3.0 - $4.0 million

  	
   

  	
  3.0

  	
  %

  
	
  $4.0 million and over

  	
   

  	
  4.0

  	
  %

  

 

3.                                       Modification of Franchise
Fee.  Throughout the Term, the Franchise Fee, as
that term is defined in the Development Agreement, for restaurants developed
thereunder (“New Restaurants”) shall be reduced from Fifty Thousand dollars
($50,000) to Twenty Five Thousand dollars ($25,000).

 

4.                                       Modification of Royalty for New Restaurants.  The Royalty
Fee for New Restaurants shall be two percent (2%) for the first twelve months of
operation, regardless of annual gross sales. 
Thereafter, for the balance of the Term, the Royalty Fee shall be as set
forth in Paragraph 2 above. Following expiration or earlier termination of this
Agreement, the Royalty Fee shall be as set forth in the respective Franchise
Agreements.

 

5.                                       Performance
of Development Obligations.

 

(a)                                  Franchisee acknowledges the
requirement of Franchisee’s full and timely compliance with both the
Preliminary Site Consent dates and the Open and Operating dates contained in
the Development Schedule in Section 3.A. of the Development
Agreement.  A reasonable denial of site
consent by Friday’s, in accordance with the site approval procedures set forth
in the Development Agreement, shall not be deemed to be an excuse of performance
by Franchisee.  Time is of the essence
with respect to each of the development obligations specified in the
Development Agreement.

 

(b)                                 In the event that Franchisee
fails to comply with any date set forth in the Development Schedule, then
automatically commencing the month following such noncompliance, the Royalty
Fees for the Restaurants and New Restaurants shall be as set forth in the
respective Franchise Agreements (the “Original Royalty Fee”).  The Original Royalty Fees for all Restaurants
and New Restaurants shall be paid by Franchisee until the first day of the
month following the date on which Franchisee returns to full compliance with
the Development Schedule, at which time the modified Royalty Fees as set forth
in this Agreement shall be due and payable.

 

(c)                                  If at any time during the term of this
Agreement Franchisee is not in compliance with the Development Schedule for
more than three (3) restaurants, then automatically commencing the month
following the noncompliance for the fourth restaurant the Original Royalty Fees
for the Restaurants and New Restaurants as set forth in the respective
Franchise Agreements shall be retroactively reinstated to January 1, 2004
(or the later applicable Commencement Date for New Restaurants) and any unpaid
Royalty Fees (the “Unpaid Royalty Fees”) shall be immediately due and payable
as set forth in Paragraph 8 below.  This
Agreement shall automatically terminate upon the occurrence of such event.

 

2

 

6.                                       Sales
Reporting Obligation.  No later than forty-five (45) days after December 31st
of each year, Franchisee shall provide to Friday’s true and complete sales
information for the Restaurants for the immediately preceding twelve month
period.

 

7.                                       Default and Early Termination.  If
Franchisee defaults under Section 10.01.A. of the Development Agreement or
under Section 10.01.A. of the Development Agreement between Friday’s and
Cornerstone Productions, Inc. (the “S.W. Development Agreement”), then upon
notification by Friday’s the Original Royalty Fees for the Restaurants and New
Restaurants as set forth in the respective Franchise Agreements shall be
retroactively reinstated to January 1, 2004 (or the later applicable
Commencement Date for New Restaurants) and any Unpaid Royalty Fees shall be
immediately due and payable as set forth in Paragraph 8 below.  This Agreement shall automatically terminate
upon such default.

 

8.                                       Repayment of Royalties Upon
Default or Noncompliance With Development Schedule.  In the event of a termination of this Agreement pursuant to Paragraphs 5(c) or 7, the Unpaid Royalty
Fees for each Restaurant and New Restaurant shall be paid to Friday’s in equal
monthly payments over the same period of time in which the modified Royalty Fee
applied. By way of illustration only, if the modified Royalty Fee applied for
36 months for a Restaurant, the Unpaid Royalty Fees would be payable to Friday’s
in 36 equal monthly payments with the first monthly payment being due with the
payment of Royalty Fees in the second month following (a) noncompliance with
the Development Schedule as described in Paragraph 5(c), or (b)
notification by Friday’s of a default and termination, in the case of Paragraph
7.  Failure to make a payment of Unpaid
Royalty Fees shall be deemed a nonpayment of Royalty Fees under the respective
Franchise Agreements and entitle Friday’s to exercise such rights and remedies
as may be available under such Franchise Agreements.

 

9.                                       Repayment of Reduced
Franchise Fee.  In the event of a default and termination of
this Agreement, the Franchise Fee under the Development Agreement shall be
retroactively reinstated to Fifty Thousand Dollars ($50,000) and the sum of
Twenty Five Thousand Dollars ($25,000) shall be immediately due and payable for
each New Restaurant opened during the Term as a repayment of the discounted
portion of the reduced Franchise Fee.

 

10.                                 Penalty for Noncompliance with Development Obligations. 
Following expiration or earlier termination of this Agreement,
Franchisee shall pay Friday’s the sum of $250,000 for each of the first three
(3) restaurants Franchisee has failed to construct pursuant to the terms of the
Development Agreement (the “Penalty”). 
In the event that Franchisee is obligated to pay the Penalty, Friday’s
agrees that Franchisee will not be required to pay any Unpaid Royalty Fees as
set forth in Paragraph 8 or the reduced Franchise Fee as set forth in Paragraph
9, if such amounts may otherwise be applicable. 
The Penalty shall be paid by Franchisee to Friday’s over the course of
one (1) year from the date of the expiration or termination of this Agreement,
in equal monthly installments. 
Franchisee’s failure to comply with the Development Schedule shall
not incur the Penalty in the event and to the extent that Franchisee’s noncompliance
results from acts of God or other causes (other than financial inability
or insolvency) beyond Franchisee’s reasonable control.  In no event shall the total
Penalty due by Franchisee to Friday’s exceed the sum of Unpaid Royalty Fees and
discounted Franchise Fees.  Failure of
Franchisee to pay the Penalty shall be deemed a material breach of the
Franchise Agreements and entitle Friday’s to exercise such rights and remedies
as may be available under such Franchise Agreements.  Notwithstanding the foregoing, in the event
that following expiration or earlier termination of this Agreement it is
determined that Franchisee has failed to construct four (4) or more restaurants
in accordance with the terms of the Development Agreement, the Penalty shall not
apply and the provisions of Paragraphs 5(c), 8 and 9 of this Agreement shall
control.

 

3

 

11.                                 General Release by Franchisee.  Franchisee hereby releases
Friday’s, its successors, predecessors, counsel, insurers, assigns, officers,
directors, employees, representatives’ agents, parent company, affiliates and
subsidiaries, past and present, of and from any and all claims, demands and
causes of action whatsoever, however claimed to arise, which Franchisee has or
may have by reason of any matter, cause or thing whatsoever arising out of or
in connection with any Development Agreement, any Franchise Agreement,
relationships or a course of dealing with Friday’s as a franchisor, the
operation of any Restaurant or for any other cause or circumstance which
existed prior to the date of this Agreement.

 

12.                                 Release by Friday’s.  Friday’s hereby releases Franchisee, its successors, predecessors,
counsel, insurers, assigns, officers, directors, employees, representatives’ agents,
parent company, affiliates and subsidiaries, past and present, of and from any
and all claims, demands and causes of action whatsoever, however claimed to
arise, which Friday’s has or may have by reason of any matter, cause or thing
whatsoever arising out of or in connection with any Development Agreement, any
Franchise Agreement, relationships or a course of dealing with Franchisee as a
franchisee, the operation of any Restaurant or for any other cause or
circumstance which existed prior to the date of this Agreement, except that
this release shall not apply to any unpaid amounts due to Friday’s by
Franchisee or its affiliates, including but not limited to royalty fees,
trades, advertising contributions, purchasing fees and help desk support fees.

 

13.                                 Confidentiality.  The terms of this Agreement are confidential except to the extent
disclosure is required by law.  No press
release or other disclosure of this Agreement, or the terms and conditions
hereof, shall be made without prior written consent of Friday’s.

 

14.                                 Cross Default of Agreements.  A
default by Franchisee under this Agreement, the Development Agreement or the
S.W. Development Agreement (including, for example, but not by way of
limitation, the failure of Franchisee to submit to Friday’s the required sales
information, the failure to make any payment when due or the failure of
Franchisee to strictly comply with the terms of the Development Agreement),
shall constitute a material default by Franchisee of this Agreement and the
Development Agreement entitling Friday’s to terminate this Agreement, as well
as exercise such rights and remedies as may be available to Friday’s under such
Development Agreement.

 

15.                                 Miscellaneous Terms.

 

(a)                                  Paragraphs 8, 9, 10, 11, 12 and 14 shall
survive the termination of this Agreement.

 

(b)                                 The provisions, representations, terms,
conditions, covenants and agreements of the Franchise Agreements, as modified
hereby, shall remain in full force and effect, enforceable in accordance with
their terms.  This Agreement shall be
binding upon the heirs, legal representatives, successors and assigns of the
parties hereto, but shall constitute an amendment of the Franchise Agreements,
Development Agreement and S.W. Development Agreement only for so long as this
Agreement continues to be in effect.

 

4

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above mentioned.

 

	
   

  	
  FRIDAY’S:

  
	
   

  	
   

  
	
   

  	
  TGI FRIDAY’S INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Leslie Sharman

  	
   

  
	
   

  	
  Name:

  	
  Leslie Sharman

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President-General Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FRANCHISEE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MAIN ST. CALIFORNIA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ William G. Shrader

  	
   

  
	
   

  	
  Name:

  	
  William G. Shrader

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRINCIPAL:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MAIN STREET AND MAIN INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ William G. Shrader

  	
   

  
	
   

  	
  Name:

  	
  William G. Shrader

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  	
   

  
												

 

5

 

EXHIBIT A

 

Restaurant
#1116; Long Beach.  Franchise Agreement
dated August 22, 2000.

Restaurant
#1902; San Diego.  Franchise Agreement
dated December 22, 1993.

Restaurant
#1903; Costa Mesa.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1906; Santa Clarita.  Franchise
Agreement dated December 28, 1993.

Restaurant
#1907; Torrance.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1908; La Jolla.  Franchise Agreement
dated December 18, 1996.

Restaurant
#1909; Palm Desert.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1911; West Covina.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1912; Orange.  Franchise Agreement dated
December 28, 1993.

Restaurant
#1913; Ontario.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1915; Laguna Niguel.  Franchise
Agreement dated December 28, 1993.

Restaurant
#1917; San Bernardino.  Franchise
Agreement dated December 28, 1993.

Restaurant
#1918; Brea.  Franchise Agreement dated December 28,
1993.

Restaurant
#1919; Riverside.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1920; Rancho San Diego.  Franchise
Agreement dated February 9, 1999.

Restaurant
#1921; City of Industry.  Franchise
Agreement dated February 9, 1999.

Restaurant
#1940; San Diego.  Franchise Agreement
dated December 28, 1993.

Restaurant
#1941; Oxnard.  Franchise Agreement dated
December 28, 1993.

Restaurant
#1942; Rancho Santa Margarita.  Franchise
Agreement dated December 20, 1995.

Restaurant
#1943; Northridge.  Franchise Agreement
dated November 6, 2001.

Restaurant
#1945; Cerritos.  Franchise Agreement
dated September 4, 1996.

Restaurant
#1947; Temecula.  Franchise Agreement
dated December 9, 1999.

Restaurant
#1948; Yorba Linda.  Franchise Agreement
dated November 16, 1999.

Restaurant
#1949; Thousand Oaks.  Franchise
Agreement dated March 13, 2000.

Restaurant
#1950; San Diego.  Franchise Agreement dated
October 8, 1998.

Restaurant
#1951; Simi Valley.  Franchise Agreement
dated September 17, 1999.

Restaurant
#1952; Carlsbad.  Franchise Agreement
dated November 1, 1999.

 

6

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