Document:

Exhibit 10.9

 

 

T.G.I. FRIDAY’S® RESTAURANTS

 

DEVELOPMENT AGREEMENT

 

CORNERSTONE PRODUCTIONS, INC.

 

Date: March 15, 2004

 

 

T.G.I. FRIDAY’S® RESTAURANTS

 

DEVELOPMENT AGREEMENT

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  EXCLUSIVE
  RIGHTS; TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  DEVELOPMENT
  SCHEDULE; SITE SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MANUALS

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  FEES AND
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIVE;
  OPERATOR; RESTAURANT MANAGERS; TRAINING

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  DEVELOPER’S
  REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  TRANSFER

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  CONSENT
  AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  DEFAULT
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  FORCE MAJEURE

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  INDEPENDENT
  CONTRACTOR

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  DUE DILIGENCE AND
  ASSUMPTION OF RISK

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  CHOICE OF LAW;
  JURISDICTION; VENUE

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  ENTIRE
  AGREEMENT

  	
   

  

 

 

1

 

	
  ADDENDUM A

  	
  COVENANT
  AND AGREEMENT FOR CONFIDENTIALITY (PRINCIPAL)

  	
   

  
	
   

  	
   

  	
   

  
	
  ADDENDUM B

  	
  COVENANT
  AND AGREEMENT FOR CONFIDENTIALITY (OTHERS)

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  FRANCHISE
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  GUARANTY
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  TERRITORY

  	
   

  

 

2

 

DEVELOPMENT AGREEMENT

 

This
Development Agreement is entered into as of the            
day of                   ,
2004 but effective January 1, 2004 by and between TGI Friday’s Inc., a New
York corporation (“Friday’s”), with its principal place of business located at
4201 Marsh Lane, Carrollton, Texas, 75007, and Cornerstone Productions, Inc., a
Delaware corporation (“Developer”), with its principal place of business
located at 5050 North 40th Street, Suite 200, Phoenix, Arizona 85018
and its Principals (as defined herein below).

 

RECITALS

 

WHEREAS,
Friday’s has developed and owns the System;

 

WHEREAS,
Friday’s intends to identify the System in the Territory with the Proprietary
Marks; and

 

WHEREAS,
Developer wishes to obtain certain rights to develop Restaurants under the
System in the Territory.

 

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:

 

Action
- any cause of action, suit, proceeding, claim, demand, investigation or
inquiry (whether a formal proceeding or otherwise) asserted or instituted by a
third party with respect to which the indemnity described in Section 12
applies.

 

Affiliate
- Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any
subsidiary of TGI Friday’s Inc.

 

Agreement -
this Development Agreement.

 

Appraiser(s)
- one or more independent third parties selected by the parties to this
Agreement in accordance with the terms and conditions hereof.

 

Business Days
- Each day except Saturday, Sunday and national legal holidays.

 

Commencement Date
– January 1, 2004.

 

Competing Business
- a restaurant business offering the same or similar products and services as
offered by restaurants in the System or restaurants in any other concept or
system owned, operated or franchised by Friday’s or any Affiliate, including,
without limitation, waiter/waitress service, sit-down dining and bar services.

 

 

1

 

Confidential
Information - 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 any other information, know-how,
techniques, materials and data imparted or made available by Friday’s which is
(i) designated as confidential, (ii) known by Developer to be considered
confidential by Friday’s, or (iii) by its nature inherently or reasonably
considered confidential.

 

Developer - Cornerstone Productions,
Inc., a Delaware corporation.

 

Developer
Indemnitees - Developer, Principals, and their respective
directors, officers, employees, agents, shareholders, affiliates, successors
and assigns and the respective directors, officers, employees, agents,
shareholders, affiliates, successors and assigns of each.

 

Development Fee
- a fee equal to the sum of ten percent (10%) of the Franchise Fee for each
Restaurant to be developed pursuant to the Development Schedule.

 

Development Manual
- Friday’s manual, as amended from time to time, 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 copy of the Occupancy Contract, and documentation
indicating Developer’s prospects to acquire the Site) and such other
information related to the development of the Site as Friday’s reasonably
requests.

 

Development Schedule -
the schedule pursuant to which Developer shall develop Restaurants in the
Territory (see Section 3.A).

 

Entertainment Park
– includes, but is not limited to any amusement park, theme park, or any other
entertainment venue which has a national presence of at least two (2) or more
such parks in existence, and which has averaged at least 1.5 million persons in
annual attendance for the preceding three (3) calendar years at any one (1)
park location.

 

Event of Default
- as defined in Section 10.

 

Franchise
Agreement - an agreement pursuant to which Developer
constructs and operates a Restaurant during the Development Schedule, which
shall be substantially in the form attached as Exhibit A.

 

Franchisee
- as defined in the Franchise Agreement.

 

Franchise Fee
- an initial per Restaurant fee (more fully defined in the Franchise Agreement)
paid by Developer to Friday’s, which fee varies in accordance with the number
of Restaurants previously developed under each Development Schedule.

 

Friday’s
- TGI Friday’s Inc., a New York corporation.

 

Friday’s
Indemnitees - Friday’s, its directors, officers, employees,
agents, shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders and affiliates of each.

 

Headquarters
- the location(s) designated from time to time by Friday’s as its principal
place of business.

 

2

 

Indemnitees
- Friday’s Indemnitees and Developer Indemnitees.

 

Losses and
Expenses - all compensatory, exemplary or punitive damages,
fines, charges, costs, expenses, lost profits, reasonable fees of attorneys and
other engaged professionals, court costs, settlement amounts, judgments, 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 in Section 12.

 

Material Event of
Default - an Event of Default which constitutes a substantial
deviation from the performance required.

 

Multi-Unit
Manager(s) - the individual(s) designated as described in Section 5.E
who shall be solely dedicated to the management and supervision of the Restaurants.

 

NSO-Team
- a “new store opening team” consisting of Friday’s employees and certain of
Franchisee’s employees to whom Friday’s has consented which shall perform the
functions described in Section 5.I.

 

Occupancy Contract
- the proposed agreement or document (including, without limitation, any lease,
deed, contract for sale, contract for deed, land contract, management contract,
license, or other agreement purporting to grant any right, title, or interest
in or to the Site) pursuant to which Developer shall occupy or acquire rights
in any Site.

 

Operator
- 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.

 

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
one, some or all of the Proprietary Marks or other names or marks, but
utilizing a system other than the System pursuant to which a T.G.I. Friday’s
Restaurant is operated.

 

Owner
- the party (if other than the Developer) owning or controlling the Site and
being a party (with Developer) to the Occupancy Contract.

 

Payments
- all transfers of funds from Developer to Friday’s including, without
limitation, the Development 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 Friday’s.

 

Preliminary Site
Consent - written communication from Friday’s to Developer
notifying Developer that a proposed site has received the consent of the Friday’s
Site Review Committee.

 

Principal(s)
– Main Street and Main Incorporated who is (and such other persons or entities
to whom Friday’s shall consent from time to time) the record and beneficial
owner of, and has the right to vote its respective interest (collectively 100%)
in the Securities of Developer or the securities or partnership

 

3

 

interest of any person or
entity designated by Friday’s which owns or controls a direct or indirect
interest in the Securities of the Developer.

 

Project Manager
- an individual designated as described in Section 5.C who shall devote
his full-time and best efforts to the coordination and completion of Restaurant
construction.

 

Proprietary Marks
- certain trademarks, trade names, trade dress, service marks, emblems and
indicia of origin designated by Friday’s from time to time for use in
connection with the operation of Restaurants pursuant to the System in the
Territory, including, without limitation, “TGI Friday’s®”,
“Friday’s®” and “The American Bistro®”.

 

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 or over the counter pursuant
to applicable law.

 

Representative
- an individual, designated as described in Section 5.A. who (i) owns an
equity interest in the Developer and (ii) is 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.

 

Restaurant
Manager(s) - general manager, assistant general manager,
kitchen manager and other managers required for the management, operation,
supervision and promotion of the Restaurant pursuant to the terms hereof.

 

Security
- the capital stock of, partner’s interest in, or other equity or voting
interest in Developer including such interests issued or created subsequent to
the date hereof.

 

Site
- the proposed location of any Restaurant.

 

Standards
- Friday’s standards and specifications, as amended from time to time by Friday’s,
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 Friday’s (which may be
modified or further developed from time to time by Friday’s) for the
establishment and operation of full-service restaurants and restaurant/bars
under the Proprietary Marks, which includes, without limitation, a distinctive
image consisting of 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, inventory and management control (including accounting procedures
and policies); training and assistance; and advertising and promotional
programs.

 

Term
- the duration of this Agreement commencing on the Commencement Date and
continuing until the date specified on the Development Schedule for the
last restaurant to be opened.

 

Territorial
Expenses - such costs and expenses incurred by or assessed
with respect to Friday’s (or other described party’s) employees, agents and/or
representatives in connection with activities in the Territory which Developer
is obligated to pay pursuant to this Agreement, including, without limitation,
hotel/lodging, transportation and meals, and other related or incidental
expenses.

 

4

 

Territory
- the geographical area described in Exhibit C; provided, however, the
Territory shall not include any airport properties, professional sports
stadiums, military bases, Entertainment Parks or casinos otherwise located
within the Territory, nor a specifically identified restricted area surrounding
any Restaurant located within the Territory as of the date of this Agreement
nor shall it be deemed to convey any exclusivity with respect to the use of the
Proprietary Marks.

 

TGIFM -
TGI Friday’s of Minnesota Inc., a Minnesota corporation and a subsidiary of
Friday’s.

 

T.G.I. Friday’s®
Restaurants - restaurants operated in accordance with the
System under the registered service marks “Friday’s®”
or “T.G.I. Friday’s®”.

 

Training Center
- the location(s) specified from time to time by Friday’s as the training
center.

 

Transfer
- the sale, assignment, conveyance, license, devise, bequest, 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.

 

Transferee
Owner(s) - the owner of any and all record or beneficial
interest in the capital stock of, partner’s interest in, or other equity or
voting interest in any transferee of a Transfer occurring pursuant to the terms
of Section 8.

 

Wage Expenses
- such wages and/or salaries (including a reasonable allocation of the cost of
benefits) of, or with respect to, Friday’s (or other described party’s)
employees, agents and/or representatives to be reimbursed to Friday’s or such
party as described herein.

 

2.                                      EXCLUSIVE
RIGHTS; TERM

 

A.                                   Friday’s
grants to Developer the right, and Developer accepts the obligation, subject to
the terms and conditions herein, to develop and operate the number of
Restaurants set forth in the Development Schedule (set forth in Section 3.A)
as may be approved by Friday’s in accordance with its then current site consent
procedures.  The Restaurants shall be
developed and operated in the Territory pursuant to the System.  For so long as no Event of Default has
occurred and is continuing and no event has occurred which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default, Friday’s
will neither develop, nor authorize any other person to develop, T.G.I. Friday’s
Restaurants in the Territory during the Term.

 

B.                                     Friday’s
reserves the right to use the Proprietary Marks in connection with Other
Concepts.

 

C.                                     Friday’s
expressly reserves the right, and Developer acknowledges that Friday’s has the
exclusive unrestricted right, to engage, directly and indirectly, through its
employees, developers, franchisees, licensees, agents and others within the
Territory, in Other Concepts.  Such Other
Concepts may compete with Developer directly or indirectly.

 

D.                                    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.

 

5

 

E.                                      Unless
sooner terminated as provided herein, this Agreement shall commence on the
Commencement Date and continue until the expiration of the Term.  This Agreement shall automatically expire at
11:59 p.m. on the date specified in Section 3.A. as the opening date for
the last restaurant to be opened.

 

F.                                      Upon
any termination or expiration of this Agreement, (i) Developer shall not
develop additional Restaurants in the Territory pursuant to this Agreement; 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) Friday’s may develop, or authorize others to develop,
Restaurants in the Territory.

 

3.                                      DEVELOPMENT
SCHEDULE; SITE SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MANUALS

 

A.                                   Developer
shall develop, open, commence operation of and continuously operate pursuant to
the respective Franchise Agreements six (6) Restaurants in the Territory,
pursuant to the Development Schedule as follows:

 

	
  Restaurant No.

  	
   

  	
  Date of Preliminary

  Site Consent

  	
   

  	
  Date Franchise

  Agreement Signed

  & Fees Paid

  	
   

  	
  Date Open &

  Operating

  	
   

  
	
  1

  	
   

  	
  9/23/04

  	
   

  	
  12/23/04

  	
   

  	
     3/23/05*

  	
   

  
	
  2

  	
   

  	
  6/23/05

  	
   

  	
  9/23/05

  	
   

  	
  12/23/05

  	
   

  
	
  3

  	
   

  	
  6/23/06

  	
   

  	
  9/23/06

  	
   

  	
  12/23/06

  	
   

  
	
  4

  	
   

  	
  6/23/07

  	
   

  	
  9/23/07

  	
   

  	
  12/23/07

  	
   

  
	
  5

  	
   

  	
  6/23/08

  	
   

  	
  9/23/08

  	
   

  	
  12/23/08

  	
   

  
	
  6

  	
   

  	
  6/23/09

  	
   

  	
  9/23/09

  	
   

  	
  12/23/09

  	
   

  

 

*Restaurant
No. 1 must be under construction by December 31, 2004.

 

(i).                                  To
satisfy a particular deadline for preliminary site consent, Developer must
submit a site that can be open and operating by the corresponding restaurant
opening deadline.  If Developer submits a
site for preliminary site consent, but the site cannot be open and operating by
the next restaurant opening deadline, that site will not satisfy the deadline
for preliminary site consent that corresponds to the next restaurant opening
deadline.

 

(ii).                               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.

 

(iii).                            Time
is of the essence, with respect to each of the development obligations
specified in this Section 3.

 

(iv).                           The
Development Schedule contains a specific minimum number of Friday’s
Restaurants to be open and operating by Developer within the Territory during certain
time periods, and if any Restaurants are temporarily or permanently closed for
business (except for authorized holidays or temporarily for major repairs),
such closed Restaurants will not be included, while closed, as open and
operating in computing such minimum numbers of open and operating Friday’s
Restaurants and in satisfying the deadlines set forth in the Development
Schedule.

 

6

 

B.                                     The
number of Restaurants indicated in the Development Schedule shall be OPEN AND OPERATING by the date(s) specified therein.  Friday’s consent to any Site or execution of
a Franchise Agreement shall not waive, extend or modify the Development
Schedule.  Unless otherwise agreed and
approved by Friday’s, the Restaurants shall refer to traditional T.G.I. Friday’s
Restaurants.

 

C.                                     Developer
assumes all cost, liability, expense, risk and responsibility for locating,
obtaining and developing Sites for Restaurants, and for constructing and
equipping Restaurants at such Sites.  Prior to execution of each Franchise
Agreement, Developer shall obtain Friday’s consent to each Site (including,
without limitation, the Proprietary Mark which shall be used to identify the
Restaurant at the Site to the public) pursuant to the time frames set forth in Section 3.A.
above in accordance with Friday’s then existing Site selection criteria and
procedures including:

 

(1)                                  submission
of all Development Materials to Friday’s; and

 

(2)                                  with
respect to each Restaurant to be developed hereunder, completion of one (1)
Site visit by Friday’s at Friday’s sole cost and expense, if required by Friday’s.

 

D.                                    Within
thirty (30) days following receipt of all Development Materials and completion
of any such visit, Friday’s shall consent to or reject such Site.  Friday’s failure to consent shall constitute
rejection of such Site.  Promptly after
Friday’s consent is obtained, but prior to commencing construction at such
Site, Developer shall execute a Franchise Agreement and pay the Franchise Fee.

 

E.                                      Neither
Friday’s (i) consent to nor (ii) assistance in the selection of, any Site shall
constitute Friday’s representation or warranty that a Restaurant operated at
such Site will be profitable or meet any financial projection.

 

F.                                      Friday’s
shall have the right to review and consent to the Occupancy Contract prior to
the execution thereof.  A copy of the
proposed Occupancy Contract shall be provided to Friday’s within sixty (60)
days of the date of Preliminary Site Consent. 
The Occupancy Contract shall be executed by all necessary parties within
thirty (30) days following Friday’s consent thereto.  Developer shall furnish Friday’s a complete
copy of the executed Occupancy Contract within ten (10) days after execution.
Unless it conveys to Developer fee simple title to the Site, the Occupancy
Contract shall include the following covenants:

 

(1)                                  Owner
shall deliver to Friday’s, 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)                                  Friday’s
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 Friday’s without any fee or modification
thereof and Friday’s 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 Owner’s consent; and

 

(4)                                  Owner
and Developer shall not amend the Occupancy Contract in any way which is
inconsistent with the provisions of Sections 3.F(1) through (4), inclusive.

 

7

 

G.                                     Notwithstanding
the terms of Section 3.F, Developer shall:

 

(1)                                  deliver
to Friday’s, immediately after delivery to or by Developer, any notice of
default under the Occupancy Contract which threatens or purports to terminate
the Occupancy Contract or result in a foreclosure thereof;

 

(2)                                  permit
Friday’s 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, all at Developer’s expense; and

 

(3)                                  not
amend the Occupancy Contract in any way which is inconsistent with the
provisions of Sections 3.F.(1) through (4), inclusive.

 

H.                                    Friday’s
shall provide Developer with one (1) Development Manual “on loan” and two (2)
sets of Friday’s standard plans and specifications as of the date hereof for
the construction of a typical Restaurant. 
Developer acknowledges Friday’s ownership of the Development Manual and
any such plans and specifications, together with any copyright rights in or to
such materials.  Developer shall observe
Friday’s reasonable requests concerning copyright notices.  The Development Manual and such plans shall
be returned to Friday’s immediately upon termination or expiration of this
Agreement.

 

I.                                         Friday’s
shall provide such consultation as it reasonably deems necessary to consent to
vendors and products proposed to be used in Restaurant development and
operation.

 

4.                                      FEES
AND PAYMENTS

 

A.                                   In
consideration of the development rights granted herein, Developer shall pay to
Friday’s upon execution of this Agreement the Development Fee. Under no
circumstances shall Developer be entitled to any refund of any portion of the
Development Fee.

 

B.                                     The
Franchise Fee to be paid by Developer for each new Restaurant to be developed
under the Development Schedule set forth in Section 3.A hereof shall
be Fifty Thousand Dollars ($50,000.00) for each Restaurant, payable upon
execution of the Franchise Agreement for each Restaurant in accordance with the
Development Schedule.  Developer shall
receive a credit of $5,000 against the payment of the Franchise Fee due for
each Restaurant developed pursuant to the Development Schedule.

 

 

	
  Restaurant No.

  	
   

  	
  Amount of Credit

  	
   

  
	
  6 or more

  	
   

  	
  Five Thousand
  Dollars ($5,000.00)

  	
   

  

 

C.                                     (1)                                  All
Payments shall be submitted to Friday’s at the address provided in Section 13
hereof, in care of the “Treasurer”, or such other address as Friday’s shall
designate in writing.

 

(2)                                  Payments
shall be received by Friday’s (i) upon execution hereof in the case of the
Development Fee; (ii) upon execution of each Franchise Agreement; and (iii) not
more than thirty (30) days after date of invoice for all other Payments.  Delinquent Payments shall bear interest from
the due date until received by Friday’s at eighteen percent (18%) per annum or
the maximum rate permitted by law, whichever is less.

 

8

 

D.                                    Developer
shall not withhold or off-set any portion of any Payment due to Friday’s
alleged non-performance under this Agreement or any other agreement by and between
Friday’s and Developer or their respective parent corporations, subsidiaries or
affiliates.

 

5.                                      REPRESENTATIVE;
OPERATOR; RESTAURANT MANAGERS;
TRAINING

 

A.                                   Developer
hereby designates Bill Shrader as
the Representative.  Any replacement
Representative shall be designated within ten (10) days of the prior
Representatives’ resignation or termination. 
Each Representative shall attend and successfully complete at the
Training Center Friday’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
hereby designates Jeff L. Smit as
the Operator.  Any replacement Operator
shall be designated within ten (10) days of the prior Operator’s resignation or
termination.  Each Operator shall attend
and successfully complete at the Training Center within six (6) months of
appointment Friday’s training program required for Restaurant Managers (see
Section 5.D.).  The Operator
hereunder and under each Franchise Agreement shall be the same individual.

 

C.                                     Not
less than sixty (60) days prior to the commencement of Restaurant construction,
Developer shall designate the Project Manager. 
Any replacement Project Manager shall be designated within ten (10) days
of the prior Project Manager’s resignation/termination.

 

D.                                    The
requisite number of Restaurant Managers, as determined by Friday’s, shall be
employed by Developer for each Restaurant developed hereunder.  All Restaurant Managers shall attend and successfully
complete at the Training Center Friday’s training program for Restaurant
Managers of T.G.I. Friday’s® Restaurants (currently, one (1)
week).  Additionally, the Restaurant
Managers shall attend and successfully complete additional training (currently,
approximately fourteen (14) weeks) at such then existing T.G.I. Friday’s
Restaurants as shall be designated by Friday’s. 
Any previously trained Restaurant Manager who is not a general manager,
but has been selected to become a general manager shall attend and successfully
complete such additional training as Friday’s may require.  Friday’s may require general and kitchen
managers, at Developer’s expense, to attend and successfully complete
additional training at the Training Center.

 

E.                                      When
the Franchise Agreement for the third Restaurant is executed, Developer shall
designate a Multi-Unit Manager. 
Additional Multi-Unit Managers shall be designated from time to time as
reasonably required by Friday’s.  Prior
to assuming his duties, each Multi-Unit Manager shall have successfully
completed Restaurant Manager training and shall attend at the Training Center
and successfully complete Friday’s training program for Multi-Unit Managers
(currently, two (2) days at the Training Center and approximately four (4)
weeks at such then existing T.G.I. Friday’s® Restaurant locations as
shall be designated by Friday’s).

 

F.                                      Friday’s
shall have the right to interview and consent to each Operator, each Multi-Unit
Manager, Project Manager and all Restaurant Managers.  Friday’s shall endeavor to conduct such
interviews in the Territory, but may require that such interviews occur at
Headquarters.  Developer shall bear all
costs and expenses related to making the Restaurant Managers available for such
interviews.

 

G.                                     Friday’s
shall provide instructors, facilities and materials for training at the
Training Center, and shall provide, at its option, other training programs at
non-Training Center locations as may be designated by Friday’s from time to
time in the Manuals or otherwise in writing. 
Developer shall

 

9

 

reimburse Friday’s for
any Territorial Expenses or other direct expenses incurred by Friday’s for such
other training programs.

 

H.                                    Except
as provided herein, Developer shall bear all costs and expenses relating to any
Representative, Operator, Multi-Unit Manager, Project Manager and Restaurant
Manager training.

 

I.                                         The
NSO Team shall assist in (i) training Developer’s/Franchisee’s employees at
each Restaurant; and (ii) the opening of each Restaurant.  The NSO Team for a Restaurant typically
consists of a combined total of approximately twelve (12) employees of Friday’s
and Developer/Franchisee (the actual number of members shall be determined by
Friday’s depending upon the number of Restaurant locations already open and
operating by Developer and such other criteria as Friday’s deems
relevant).  The members of the NSO Team
shall be subject to Friday’s consent. 
The number of Friday’s employees selected to serve on the NSO Team for a
Restaurant is determined according to the following schedule, provided however,
Friday’s may elect to modify this schedule in the event the total number
of people on the NSO Team is greater or less than twelve (12):

 

	
  No. of Restaurants

  Operated

  By Developer

  	
   

  	
  No. of Friday’s

  Employees

  on the NSO Team

  	
   

  	
  Team Members

  Paid for by

  Developer

  
	
  7 or more

  	
   

  	
  2

  	
   

  	
  10

  

 

In the event Friday’s
determines that more than 12 NSO team members are necessary for an opening,
Developers with five or more restaurants open (inclusive of the new restaurant)
shall be responsible for the costs associated with the team members in excess
of 12.  For Developers with less than
five restaurants open, Friday’s will bear the costs of the additional team
members.

 

If Developer/Franchisee
fails or is unable to timely provide such employees, Friday’s may, but shall
not be obligated to, staff the NSO-Team with Friday’s employees.  Friday’s and Developer/Franchisee shall each
be responsible for: (a) making all travel, food and lodging arrangements, and
(b) the wage and other expenses of the NSO-Team members provided by each;
provided, however, that Developer/Franchisee shall reimburse Friday’s for the
Territorial Expenses and the Wage Expenses of Friday’s employees who are
provided as a result of Developer’s/Franchisee’s failure or inability to
provide Developer/Franchisee employees for participation on the NSO-Team.

 

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, and shall use all reasonable efforts to maintain such
information as secret and confidential. 
Neither Developer nor any Principal shall, without Friday’s prior
consent, copy, duplicate, record or otherwise reproduce any Confidential
Information.  Confidential Information
may be provided to employees, agents, consultants and contractors only to the
extent necessary for such parties to provide services to Developer.  Prior to such disclosure of any Confidential
Information, each of such employees, agents, consultants and contractors shall
(a) be advised by Developer of the confidential and proprietary nature of the
Confidential Information, and (b) agree to be bound by the terms and conditions
of Section 6 of this Agreement. 
Notwithstanding such agreement, Developer shall indemnify the Friday’s
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.

 

10

 

(2)                                  In
the event Developer or Developer’s employees, agents, consultants, or
contractors receive notice of any request, demand, or order to transfer or
disclose all or any portion of the Confidential Information, Developer shall
immediately notify Friday’s thereof, and shall fully cooperate with and assist
Friday’s in prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Developer shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

(3)                                  Developer
and each Principal acknowledge Friday’s exclusive ownership of the Confidential
Information and the System, and TGIFM’s exclusive ownership of, and Friday’s
license with respect to, the Proprietary Marks. Neither Developer nor any
Principal shall, directly or indirectly, contest or impair Friday’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 Friday’s) to the Confidential
Information, Developer and the Principals shall each, without additional
consideration, execute such agreements and other documentation as shall be
deemed necessary by Friday’s, granting exclusive ownership thereof to Friday’s.  All such improvements shall be Confidential
Information.

 

C.                                     Each
Principal shall execute and deliver to Friday’s a covenant in the form attached
as Addendum A.  Developer shall
cause each Operator, Representative, Multi-Unit Manager, Project Manager, and
Restaurant Manager and such other employees of Developer whom Friday’s shall
designate to execute and (if requested) deliver to Friday’s a covenant in the
form attached as Addendum B. 
Notwithstanding the execution of such covenant, Developer shall
indemnify the Friday’s Indemnitees from any damages, costs or expenses
resulting from or related to any disclosure or use of Confidential Information
by any Principal, Operator, Representative, Multi-Unit Manager, Project Manager
or Restaurant Manager.

 

D.                                    Immediately
upon any termination or expiration hereof, Developer and each Principal shall
return the Confidential Information including, without limitation, 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, and all copies thereof.

 

7.                                      DEVELOPER’S
REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

 

A.                                   In
the event Developer is a corporation, limited liability company or partnership,
Developer represents and warrants to Friday’s as follows:

 

(1)                                  Developer
is 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 action and no further action is necessary to make
this Agreement, any Franchise Agreement or

 

11

 

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 articles of
incorporation, by-laws, partnership agreement or other governing documents or
under any 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
articles of incorporation, 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 articles of incorporation, by-laws, partnership
agreement, other governing documents and any amendments thereto, including
board of director’s or partner’s resolutions authorizing this Agreement, have
been delivered to Friday’s.

 

(5)                                  A
certified current list of all Principals has been delivered to Friday’s.

 

(6)                                  Developer’s
articles of incorporation or other governing documents, or partnership agreement
limit Transfers as described in Sections 8.B.(2) and 8.C.

 

(7)                                  Each
Security shall bear a legend (in a form to which Friday’s shall consent)
indicating that any Transfer is subject to Sections 8.B and 8.C.

 

B.                                     Developer
affirmatively covenants with Friday’s as follows:

 

(1)                                  Developer
shall perform its duties and obligations hereunder and under any Franchise
Agreement and shall require each Operator, Multi-Unit Manager, Project Manager
and Restaurant Manager to dedicate their respective full time and best efforts
to the development, construction, management, operation, supervision and
promotion of the Restaurants in accordance with the terms and conditions
hereof.

 

(2)                                  Developer
shall promptly provide Friday’s with all 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 without compensation. 
Developer and the Principals shall each execute such agreements and other
documentation as shall be deemed necessary by Friday’s, granting Friday’s
exclusive ownership thereof.

 

(3)                                  Developer
shall comply with all requirements of applicable rules, regulations, statutes,
laws and ordinances.

 

(4)                                  Developer
shall maintain a current list of all Principals and deliver a certified copy
thereof to Friday’s upon (i) any Transfer; or (ii) request.

 

(5)                                  Each
Security issued subsequent to the date hereof shall be in compliance with Section 7.A.(7).

 

(6)                                  Developer
and each Principal represent and warrant to Friday’s that: (a) neither
Developer nor any Principal is named, either directly or by an alias, pseudonym
or nickname, on the lists of “Specially Designated Nationals” or “Blocked
Persons” maintained by the U.S. Treasury

 

12

 

Department’s Office of
Foreign Assets Control currently located at
www.treas.gov/offices/enforcement/ofac/; (b) Developer and each Principal will
take no action that would constitute a violation of any applicable laws against
corrupt business practices, against money laundering and against facilitating
or supporting persons or entities who conspire to commit acts of terror against
any person or entity, including as prohibited by the U.S. Patriot Act
(currently located at http://www.epic.org/privacy/terrorism/hr3162.html), U.S.
Executive Order 13244 (currently located at
http://www.treas.gov/offices/enforcement/ofac/sanctions/terrorism.html) or any
similar laws; and (c) that Developer and each Principal shall immediately
notify Friday’s in writing of the occurrence of any event or the development of
any circumstance that might render any of the foregoing representations and
warranties false, inaccurate or misleading.

 

C.                                     Developer
acknowledges and/or negatively covenants with Friday’s as follows:

 

(1) Developer shall not amend its articles of
incorporation, by-laws, partnership agreement or other governing documents in a
manner which is inconsistent with Sections 7.A.(3), 8.B.(2) 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 Restaurant 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
one (1) year after the expiration or termination hereof, 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 Friday’s, (ii) by any developer or
franchisee of Friday’s, 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 three (3) mile radius of any
restaurant which is a part of a concept or system owned, operated, or
franchised by Friday’s or any Affiliate.

 

(4)                                  Sections
7.C.(3)(b), (c) and (d) shall not apply to 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.

 

13

 

D.                                    Each
of the foregoing covenants is independent of each other covenant or agreement
contained in this Agreement.

 

E.                                      Friday’s
has the absolute right to 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.                                   Friday’s
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 Friday’s obligations which are assigned shall be fully assumed by
the party to whom Friday’s assigns such obligations.

 

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 Friday’s 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, their respective successors or permitted assigns,
shall complete, or allow to be completed, any Transfer without Friday’s
consent.  Any purported Transfer, by
operation of law or otherwise, without Friday’s consent shall be null and void
and constitute an Event of Default.

 

(2)                                  Friday’s
may require satisfaction of any of the following conditions and such other
conditions as Friday’s may reasonably require prior to consenting to any
Transfer, each of which Developer acknowledges and agrees is reasonable and
necessary:

 

(a)                                  no
Event of Default shall have occurred and be continuing and no event shall have
occurred 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 Friday’s Indemnitees including, without limitation, claims
arising under this Agreement and any Franchise Agreement, in a form acceptable
to Friday’s;

 

(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 Friday’s to evidence such
liability;

 

(d)                                 the
transferee and all Transferee Owners, as applicable, 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 Friday’s) reasonably requested by Friday’s to evidence the foregoing;

 

14

 

(e)                                  the
transferee and all Transferee Owners shall satisfy, in Friday’s reasonable
judgment, Friday’s then existing criteria for T.G.I. Friday’s®
developers or principals, as applicable, including, without limitation: (i)
education; (ii) business skill, experience and aptitude; (iii) character and
reputation; and (iv) financial resources;

 

(f)                                    the
transferee and all Transferee Owners shall execute (without extending the Term)
the standard form of development agreement then being offered to new System
developers or other form of this Agreement as Friday’s requests and such other
ancillary agreements as Friday’s may request for the development of the
Restaurants, 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 Development Fee
(transferee shall pay all Franchise Fees and other fees described in each
Franchise Agreement which have not already been paid in full by Developer); and

 

(g)                                 at
the transferee’s expense, the transferee’s Representative, any Multi-Unit
Manager(s), Operator, and Restaurant Managers shall complete such training as
then required (if not previously trained pursuant to the terms hereof), upon
such terms and conditions as Friday’s may reasonably require.

 

C.                                     Developer
and each Principal agree that:

 

(1)                                  (i)
Friday’s shall have and is hereby granted a right of first refusal with respect
to any Transfer; (ii) should Developer and/or any Principal desire to accept a
bona fide offer to make a Transfer, such party shall promptly notify Friday’s
thereof and shall provide such information and documents relating thereto as
Friday’s may require; (iii) within thirty (30) days after receipt of such
notice, information and documents, Friday’s may notify such party that it
intends to exercise its right of first refusal with regard to such Transfer
upon such terms and conditions; provided, however, that such transaction shall
be consummated within a reasonable period of time after Friday’s has given such
notice; (iv) 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
Friday’s right of first refusal; and (v) Friday’s failure to exercise such
right shall not constitute a waiver of any other provision of this Agreement,
including such right with respect to future offers; and

 

(2)                                  in
the event such offer provides for payment of consideration other than cash,
Friday’s may elect to purchase the interest for the reasonable equivalent in
cash.  If the parties cannot agree within
thirty (30) days of the receipt of notice of Friday’s election to exercise such
right of first refusal on such reasonable equivalent in cash, an Appraiser
designated by Friday’s shall determine such amount, and his determination shall
be final and binding.  If Friday’s elects
to exercise the right of first refusal described above, the cost of the
appraisal, if any, shall be set off against any payment made by Friday’s
hereunder.

 

D.                                    In
the event Developer requests Friday’s consent to any proposed Transfer, there
shall be paid to Friday’s a non-refundable fee of Five Thousand Dollars
($5,000.00), or such greater amount as is necessary to reimburse Friday’s for
its costs and expenses associated with reviewing the proposed Transfer
including, without limitation, Territorial Expenses, legal and accounting fees
and Wage Expenses.  No such fee shall be
payable with respect to a transaction with Friday’s described in Section 8.C.

 

E.                                      In
the event Developer or any Principal is a natural person, Developer or his
administrator, executor, guardian or personal representative shall promptly
notify Friday’s of the death or

 

15

 

Permanent Disability of
such Developer or 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 the date of death; or (ii) ninety
(90) days after the date Developer or such Principal becomes, or is deemed to
be, Permanently Disabled.  Developer or
any Principal refusing to submit to examination with respect to Permanent
Disability shall be deemed Permanently Disabled.

 

F.                                      Friday’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 a written request for Friday’s consent in advance and such consent
shall be obtained in writing.  Friday’s
consent shall not be unreasonably withheld. 
The foregoing not withstanding, where either party’s consent is
expressly reserved to such party’s sole discretion, the exercise of such
discretion shall not be subject to contest.

 

B.                                    FRIDAY’S
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, ADVICE, CONSENT OR SERVICES TO
DEVELOPER OR DUE TO ANY DELAY OR DENIAL THEREOF.

 

10.                               DEFAULT
AND REMEDIES

 

10.01                     A.                                   The
following shall constitute Events of Default by Developer or any Principal: (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 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
or 8); (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 for (a) all or substantially all of Developer’s assets
or (b) any Restaurant is sought which is not dismissed within thirty (30) days;
(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 or no contest to or is convicted of a
felony or a crime involving moral turpitude or any other crime or offense that
Friday’s reasonably believes is likely to adversely affect the Proprietary
Marks, the System or the goodwill associated therewith (whether in the
Territory or elsewhere) or Friday’s interest therein; or (xiii) any (a) two (2)
or more Events of Default shall arise under any single subsection of this Section 10.01.A
or (b) three (3) or more Events of Default shall arise under this Section 10.01.A
in any continuous twelve (12) month period notwithstanding the previous cure of
such Events of Default.

 

B.                                     The
parties agree that an Event of Default arising under Section 10.01.A.(i),
(iii), (iv) [with respect to Events of Default arising, without limitation,
under Section 7.C.(3)], (v), (vi), (viii), (ix), (xi), (xii) or (xiii) shall
constitute a Material Event of Default. 
The parties further agree that Events of

 

16

 

Default committed by
Developer or any Principal arising under other Sections of this Agreement may
also be deemed to be Material Events of Default.

 

C.                                     Upon
the occurrence of an Event of Default by Developer or any Principal, Friday’s
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 Friday’s all rights and powers necessary or
appropriate to accomplish such cure; (ii) shall indemnify and hold the Friday’s
Indemnitees harmless from and against all costs, expenses (including reasonable
fees of attorneys and other engaged professionals), liabilities, claims,
demands and causes of action (including actions of third parties) incurred by
or alleged against any Friday’s Indemnitee in connection with Friday’s cure;
and (iii) shall reimburse or pay such costs or damages within ten (10) days of
receipt of Friday’s invoice therefor;

 

(2)                                  in
the event of a Material Event of Default, upon notice to Developer, terminate
this Agreement and all rights granted hereunder without waiving any (i) claim
for damages suffered by Friday’s; or (ii) other rights, remedies or claims (no
notice of termination shall be required with regard to a Material Event of
Default under Section 10.01.A.(viii) or (ix)); 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.

 

D.                                    Friday’s
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 Friday’s thereof and the expiration of the following
cure periods:

 

(1)                                  with
respect to any Event of Default arising under Section 10.01.A.(vi) - ten
(10) days; or

 

(2)                                  with
respect to any Event of Default arising under Sections 10.01.A.(i)-(v)
inclusive, (vii) and (x) - thirty (30) days.

 

E.                                      If
any Events of Default arising under Sections 10.01.A.(i) - (v) inclusive, (vii)
or (x) cannot reasonably be cured within thirty (30) days, Developer shall
provide Friday’s notice thereof (together with Developer’s best estimate of the
time period required to complete such cure) and immediately undertake efforts
to cure such default within the cure period, and continue such efforts with
diligence to completion.  In no event,
however, shall such cure period be extended without the prior written consent
of Friday’s.

 

F.                                      Developer
and each Principal agree that Friday’s exercise of the rights and remedies set
forth herein are reasonable.  Friday’s
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.

 

17

 

10.02                     A.                                   The
following shall constitute Events of Default by Friday’s: (i) failure to comply
with or perform its obligations and agreements herein, or (ii) Friday’s (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 Friday’s a similar petition
which is not dismissed within thirty (30) days.

 

B.                                     Upon
the occurrence of a Material Event of Default by Friday’s, Developer may, upon
notice to Friday’s, terminate this Agreement and all rights granted hereunder
without waiving any (i) claim for damages suffered by Developer; or (ii) other
rights, remedies or claims.  Any
termination of this Agreement by Developer other than as provided in this Section 10.02
shall be deemed a termination by Developer without cause.

 

C.                                     Developer
shall not exercise any remedies available hereunder with respect to any Events
of Default unless such Events of Default remain uncured after (i) notice from
Developer thereof and (ii) the expiration of thirty (30) days following such
notice.

 

D.                                    If
any Events of Default cannot reasonably be cured within thirty (30) days,
Friday’s shall provide Developer notice thereof (together with Friday’s best
estimate of the time period required to complete such cure) and immediately
undertake efforts to cure such default within the cure period, and continue
such efforts with diligence to completion. 
In no event, however, shall such cure period be extended without the
prior written consent of Developer.

 

10.03                     Subject to
the provisions of Section 10.06, all rights and remedies of either party
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 any
party from any liability or obligation then accrued or any liability or
obligation continuing beyond, or arising from, such expiration or
termination.  Nothing in this Agreement
shall impair either party’s right to obtain injunctive or other equitable
relief.

 

10.04                     The failure
of any party to exercise any right or remedy or to enforce any obligation,
covenant or agreement herein shall not constitute a waiver by, or estoppel of,
that party’s right to any of the remedies described herein including, without
limitation, to enforce strict compliance with any such obligation, covenant or
agreement. No custom or practice shall modify or amend this Agreement.  The waiver of, or failure or inability of any
party to enforce, any right or remedy shall not impair that party’s rights or
remedies with respect to subsequent Events of Default of the same, similar or
different nature.  The delay, forbearance
or failure of any party to exercise any right or remedy in connection with any
Event of Default or default by any other developers shall not affect, impair or
constitute a waiver of such party’s rights or remedies herein.  Acceptance of any Payment shall not waive any
Event of Default.

 

10.05                     Developer and
each Principal shall, jointly and severally, pay all costs and expenses
(including reasonable fees of attorneys and other engaged professionals)
incurred by Friday’s in successfully enforcing, or obtaining any remedy arising
from the breach of this Agreement.  The
existence of any claims, demands or actions which Developer or any Principal
may have against Friday’s, whether arising from this Agreement or otherwise,
shall not constitute a defense to Friday’s enforcement of Developer’s or any
Principal’s representations, warranties, covenants, obligations or agreements
herein.

 

10.06                 IN
THE EVENT OF A DISPUTE BETWEEN THEM WHICH IS NOT SUBJECT TO, NOR ARISES UNDER, SECTION 12,
FRIDAY’S, DEVELOPER AND PRINCIPALS

 

18

 

HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY
PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, BUT SPECIFICALLY EXCLUDING,
HOWEVER, DAMAGES TO THE REPUTATION AND GOODWILL ASSOCIATED WITH AND/OR
SYMBOLIZED BY THE PROPRIETARY MARKS) AGAINST THE OTHER ARISING OUT OF ANY CAUSE
WHATSOEVER (WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT
LIABILITY, OTHER TORT OR OTHERWISE) AND AGREE THAT EACH SHALL BE LIMITED TO THE
RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY IT. 
IF ANY OTHER TERM OF THIS AGREEMENT IS FOUND OR DETERMINED TO BE
UNCONSCIONABLE OR UNENFORCEABLE FOR ANY REASON, THE FOREGOING PROVISION SHALL
CONTINUE IN FULL FORCE AND EFFECT.

 

11.                               INSURANCE

 

A.                                   Developer
shall obtain within thirty (30) days from the date hereof and maintain
throughout the Term, such insurance coverage (including, without limitation,
auto liability coverage and workers compensation insurance) as may be (i)
required by law; or (ii) reasonably designed to protect Developer from the
risks inherent in the development activities to be engaged in by Developer
pursuant to this Agreement.  Friday’s
shall have the right to reasonably consent to the types and amounts of coverage
and the issuing companies.  Such
insurance shall:

 

(1)                                  name
the Friday’s Indemnitees as additional insured parties and provide that
coverage applies separately to each insured and additional insured party
against whom a claim is brought as though a separate policy had been issued to
each Friday’s Indemnitee;

 

(2)                                  contain
no provision which limits or reduces coverage in the event of a claim by any
one (1) or more of the insured or additional insured parties;

 

(3)                                  provide
that policy limits shall not be reduced, coverage restricted, canceled, allowed
to lapse or otherwise altered or such policy(ies) amended without Friday’s
consent, but in no event upon less than thirty (30) days prior written notice
to Friday’s;

 

(4)                                  be
obtained from reputable insurance companies with an A.M. Best Rating of “A” and
an A.M. Best Class Rating of XIV (or comparable ratings from a reputable
insurance rating service, in the event such A.M. Best ratings are discontinued
or materially altered), authorized to do business in the jurisdiction in which
the Restaurant is located; and

 

(5)                                  be
in an amount and form satisfactory to Friday’s; but in no event in amounts less
than the following:

 

(a)                                  auto
liability insurance, including coverage of owned, non-owned and hired vehicles,
with a combination of primary and excess limits of not less than Five Hundred
Thousand Dollars ($500,000.00) for bodily injury for each person, One Million
Dollars ($1,000,000.00) for bodily injury for each occurrence and Two Hundred
Fifty Thousand Dollars ($250,000.00) for each occurrence of property damage;

 

(b)                                 employer’s
liability insurance with a limit of not less than Five Hundred Thousand Dollars
($500,000.00); and

 

19

 

(c)                                  workers
compensation insurance in such amount as may be required by applicable statute
or rule.

 

B.                                     Such
insurance may provide for reasonable deductible amounts with Friday’s consent.

 

C.                                     A
certificate of insurance shall be submitted for Friday’s consent within ten
(10) days following commencement of such coverage, and additional certificates
of insurance shall be submitted to Friday’s thereafter, evidencing
uninterrupted coverage.  Developer shall
deliver a complete copy of such policy(ies) within ten (10) days of request.

 

D.                                    In
the event of a claim of any one or more of the Friday’s Indemnitees against
Developer, Developer shall, on request of Friday’s, assign to Friday’s any and
all rights which Developer then has or thereafter may have with respect to such
claim against the insurer(s) providing the coverage described in this Section.

 

E.                                      Developer’s
obligation to obtain and maintain insurance or to indemnify any Friday’s
Indemnitee shall not be limited by reason of any insurance which may be
maintained by any Friday’s Indemnitee, nor shall such insurance relieve Developer
of any liability under this Agreement. 
Developer’s insurance shall be primary to any policies maintained by any
Friday’s Indemnitee.

 

F.                                      If
Developer fails to obtain or maintain the insurance required by this Agreement,
as such requirements may be revised from time to time, Friday’s may acquire
such insurance, and the cost thereof, together with a reasonable fee for Friday’s
expenses in so acting and interest at eighteen percent (18%) per annum from the
date acquired, shall be payable by Developer upon notice.

 

12.                               INDEMNIFICATION

 

A.                                   Developer
and each Principal will, at all times, indemnify and hold harmless, to the
fullest extent permitted by law, Friday’s 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, mark 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 Friday’s 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,

 

20

 

contractors, partners,
affiliates or representatives.

 

B.                                     Developer
and each Principal agree to give Friday’s immediate notice of any such action,
suit, proceeding, claim, demand, inquiry or investigation.

 

C.                                     Friday’s
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.  Friday’s 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 Friday’s Indemnitees for attorneys’ fees,
expenses, and costs incurred in connection with the exercise of Friday’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 Friday’s exercise of its rights under Section 12 actually
results in Developer’s insurer with respect to insurance required to be
maintained by Developer pursuant to Section 11 (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 Friday’s without the need for any further action on Friday’s or Developer’s
part.  For the purposes of Section 12,
“actually results” means that, but for Friday’s exercise of its rights under Section 12,
the Insurer would not have refused to pay on said third-party claim.

 

F.                                      In
the event that Friday’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 Friday’s for the latter’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 Friday’s for the latter’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 Friday’s 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, Friday’s 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 Friday’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 their indemnity obligations under Section 12.D., Developer and
each Principal shall indemnify Friday’s for any and all losses, compensatory
damages, exemplary or punitive

 

21

 

damages, fines, charges,
costs, expenses, lost profits, settlement amounts, judgments, compensation for
damages to Friday’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.                                    Friday’s
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 Friday’s for all losses and expenses which
may arise out of any acts, errors or omissions of these third parties.

 

L.                                      Under
no circumstances shall Friday’s 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 loss will in no way reduce the amounts recoverable by
Friday’s from Developer or any Principal.

 

M.                                 Notwithstanding
anything to the contrary contained in this Agreement, Developer is not required
to indemnify Friday’s with regard to any infringement, alleged infringement or
other violation or alleged violation by Developer or any Principal of any
patent, mark, 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 Friday’s pursuant to this Agreement. 
In the event Developer is involved in such an action, Friday’s agrees to
indemnify Developer Indemnitees in connection with the defense thereof, and to
indemnify and hold Developer Indemnitees 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 Friday’s 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 extent that failure to have timely provided such notice to
Friday’s materially impairs Friday’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
Friday’s 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 Friday’s 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, facsimile or certified mail, return receipt requested to the following
addresses (or such other addresses as designated pursuant to this Section 13):

 

	
  if
  to Friday’s:

  	
   

  	
  TGI Friday’s
  Inc.

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  4201 Marsh Lane

  
	
   

  	
   

  	
  Carrollton,
  Texas 75007

  
	
   

  	
   

  	
  Facsimile No.:
  (972) 662-5636

  
	
   

  	
   

  	
   

  
	
  if
  to Developer or any Principal:

  	
   

  	
  Cornerstone
  Productions, Inc.

  
	
   

  	
   

  	
  Attention: Bill
  Shrader

  
	
   

  	
   

  	
  5050 North 40th
  Street

  

 

22

 

	
   

  	
   

  	
  Suite 200

  
	
   

  	
   

  	
  Phoenix, Arizona
  85018

  
	
   

  	
   

  	
  Facsimile No.:
  (602) 852-0001

  

 

Notices
posted by personal delivery, expedited service or given by facsimile shall be
deemed given the next business day after transmission.  Notices posted by certified mail shall be
deemed received three (3) Business Days after the date of posting.  Any change in the foregoing addresses shall
be effected by giving fifteen (15) days written notice of such change to the
other party.

 

14.                               FORCE
MAJEURE

 

No
party shall be liable for any inability to perform resulting from acts of God
or other causes (other than financial inability or insolvency) beyond their
reasonable control; provided, however, that nothing herein shall excuse or
permit any delay or failure (i) to remit any Payment on the date due; or (ii)
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 Friday’s reasonable judgment,
Friday’s ability to realize the principal purpose of the Agreement or preserve
its or TGIFM’s rights in, or the goodwill underlying, the Proprietary Marks,
the System, or the Confidential Information, Friday’s 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.  Friday’s
does not operate the Developer’s business. 
Nothing herein shall create the relationship of principal and agent,
legal representative, joint ventures, 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 Friday’s name.

 

17.                               DUE
DILIGENCE AND ASSUMPTION OF RISK

 

A.                                   Developer
and each Principal (i) have conducted such due diligence and investigation as
each desires; (ii) recognize that the business venture described herein
involves risks; and (iii)

 

23

 

acknowledge that the success
of such business venture is dependent upon the abilities of Developer and
Principals.  FRIDAY’S
EXPRESSLY DISCLAIMS THE MAKING OF, AND DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE
THAT THEY HAVE 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 understand 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 to this Agreement.

 

B.                                     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),
the provision for liquidated damages contained in Section 10.01.C.(3), and
the rights and remedies provided for in Exhibit B.

 

C.                                     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
(1) and the same instrument.

 

D.                                    All
references herein to the masculine, neuter or singular shall be construed to
include the masculine, feminine, neuter or plural, unless otherwise suggested
by the text.

 

E.                                      This
Agreement will become effective only upon execution hereof by the President or
a vice president of Friday’s.

 

F.                                      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.

 

G.                                     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.

 

H.                                    Developer
and each Principal acknowledge that each has received a complete copy of this
Agreement, the documents referred to herein and the Exhibits and Addenda hereto
at least five (5) business days prior to the date on which this Agreement was
executed.  Developer and each Principal
further acknowledge that each has received the disclosure document required by
the Trade Regulation Rule of the Federal Trade Commission entitled “Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures” at least ten (10) business days prior to the date on which this
Agreement was executed.

 

19.                               CHOICE
OF LAW; JURISDICTION; VENUE

 

A.                                    DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE THAT FRIDAY’S MAY GRANT
DEVELOPMENT RIGHTS THROUGHOUT THE UNITED STATES ON TERMS

 

24

 

AND
CONDITIONS SIMILAR IN CERTAIN MATERIAL RESPECTS TO THOSE SET FORTH IN THIS
AGREEMENT, AND THAT IT IS OF MUTUAL BENEFIT TO DEVELOPER AND EACH PRINCIPAL AND
TO FRIDAY’S THAT THESE TERMS AND CONDITIONS BE UNIFORMLY INTERPRETED.  THEREFORE, THE PARTIES AGREE THAT TO THE
EXTENT THE LAW OF THE STATE OF TEXAS IS HELD ENFORCEABLE, TEXAS LAW SHALL APPLY
TO THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT (EXCEPT FOR TEXAS
CHOICE OF LAW RULES) AND SHALL GOVERN ALL QUESTIONS WHICH ARISE WITH REFERENCE
HERETO.

 

B.                                    THE
PARTIES ACKNOWLEDGE THAT THIS AGREEMENT SHALL BE PERFORMED IN SUBSTANTIAL PART
IN DALLAS COUNTY, TEXAS.  THE PARTIES
THEREFORE AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PERFORMANCE THEREOF WHICH CANNOT BE AMICABLY
SETTLED, EXCEPT AS OTHERWISE PROVIDED HEREIN, SHALL BE RESOLVED BY A PROCEEDING
IN A COURT IN DALLAS COUNTY, TEXAS, AND DEVELOPER AND PRINCIPALS EACH
IRREVOCABLY ACCEPT AND SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS AND THE FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS FOR SUCH CLAIMS,
CONTROVERSIES OR DISPUTES; PROVIDED, HOWEVER, WITH RESPECT TO ANY
ACTION WHICH INCLUDES INJUNCTIVE RELIEF, OR ANY ACTION FOR THE RECOVERY OF ANY
PROPERTY, REAL OR PERSONAL, FRIDAY’S MAY BRING SUCH ACTION IN ANY STATE WHICH
HAS JURISDICTION.

 

20.                               ENTIRE
AGREEMENT

 

This
Agreement and the Exhibits, Addenda and Schedules hereto constitute the entire
agreement between Friday’s, 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 CONCERNING THE SUBJECT MATTER HEREOF, INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING, EXCEPT THOSE EXPRESSLY SET
FORTH IN THIS AGREEMENT.  EXCEPT THOSE
PERMITTED TO BE MADE UNILATERALLY BY FRIDAY’S HEREUNDER, NO AMENDMENT, CHANGE
OR VARIANCE FROM THIS AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS
MUTUALLY AGREED TO BY FRIDAY’S AND DEVELOPER AND EXECUTED IN WRITING.

 

IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
on the day and year first above written.

 

	
  TGI
  FRIDAY’S INC.

  	
  CORNERSTONE
  PRODUCTIONS, INC.

  
	
  By:

  	
  /s/ Leslie Sharman

  	
   

  	
  By:

  	
  /s/ William G.
  Shrader

  	
   

  
	
  Name:

  	
  Leslie Sharman

  	
   

  	
  Name:

  	
  William G.
  Shrader

  	
   

  
	
  Title:

  	
  Sr. Vice
  President-General Counsel

  	
   

  	
  Title:

  	
  President-CEO

  	
   

  
	
  Date:

  	
  March 15,
  2004

  	
   

  	
  Date:

  	
  March 11,
  2004

  	
   

  
										

 

25

 

Each
Principal acknowledges, covenants and represents as follows:

 

(1)                                  each
has read the terms and conditions of this Agreement;

 

(2)                                  each
is a “Principal” as described in this Agreement;

 

(3)                                  each
is the owner of and has the right to vote the percent of the Securities of
Developer indicated next to the signature below of each Principal;

 

(4)                                  each
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, non-compete and maintenance of Confidential Information)
and is obligated to perform thereunder;

 

(5)                                  each
individually, jointly and severally, irrevocably and unconditionally guarantees
that all of Developer’s obligations under the terms and conditions of this
Agreement will be timely paid and performed;

 

(6)                                  each
acknowledges that Friday’s may, without notice to Principals, waive, renew,
extend, modify, amend or release any indebtedness or obligation of Developer,
or settle, adjust, or compromise any claims against Developer;

 

(7)                                  each
waives all demands and notices of every kind with respect to this guaranty
including, without limitation, notice of presentment, demand for payment or
performance by Developer, any default by Developer or any guarantor, and any
release of any guarantor or other security for this Agreement or the
obligations of Developer.  Friday’s may
pursue its rights against Developer’s Principals without first exhausting its
remedies against Developer and without joining any other guarantor hereto, and
no delay on the part of Friday’s in the exercise of any right or remedy shall
operate as a waiver of such right or remedy;

 

(8)                                  each
has derived and expects to derive financial or other benefit, directly or
indirectly, from this Agreement and the transaction described herein;

 

(9)                                  each
acknowledges that its execution of this Agreement, and its undertakings and
agreements herein, has induced Friday’s to enter into the transactions
described in, and to execute, this Agreement;

 

(10)                            each
consents to and shall be bound by any amendment of this Agreement made by
Friday’s and Developer pursuant to the terms hereof; and

 

(11)                            each
has executed, concurrent herewith, the Guaranty Agreement on Exhibit B.

 

	
   

  	
   

  	
  Securities

  	
   

  
	
  PRINCIPAL

  	
   

  	
  Voting %

  	
   

  
	
   

  	
   

  	
  100

  	
  %

  

 

	
  MAIN STREET AND
  MAIN INCORPORATED

  	
   

  
	
  By:

  	
  /s/ William G.
  Shrader

  	
   

  	
   

  
	
  Name:

  	
  William G.
  Shrader

  	
   

  	
   

  
	
  Title:

  	
  President-CEO

  	
   

  	
   

  
							

 

26

 

ADDENDUM A TO DEVELOPMENT AGREEMENT

 

COVENANT AND AGREEMENT FOR CONFIDENTIALITY

 

This
agreement (“Agreement”) is made by Main Street and Main Incorporated, a
corporation organized under the laws of the state of Delaware (“Principal”),
and TGI Friday’s Inc., a corporation organized under the laws of the state of
New York (“Friday’s”), in connection with that certain Development Agreement
dated                         ,
2004 (the “Development Agreement”), by and between Friday’s and Cornerstone
Productions, Inc. (“Developer”).

 

WHEREAS,
Friday’s and Developer have entered into the Development Agreement; and

 

WHEREAS,
the Confidential Information provides economic advantages to Friday’s and is
not generally known to, and not legally available to, third parties; and

 

WHEREAS,
Friday’s 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 Friday’s agree as follows:

 

1.                                       Capitalized
terms used herein and not otherwise defined shall have the meanings attributed
to them in the Development Agreement.

 

2.                                       Friday’s
shall disclose to Principal some or all of the Confidential Information which
may be utilized by Principal solely (a) in his 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 Friday’s
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 Friday’s or TGIFM’s ownership
of, or interest in, the Confidential Information, the System or the Proprietary
Marks.

 

3.                                       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, Friday’s, 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 Friday’s, be (i) copied, (ii)
compiled (in total or in part) with other information, or (iii) disclosed to
any third party.

 

4.                                       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

 

1

 

disclosed to Principal’s
agents, consultants, contractors 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.  Prior to such disclosure of any Confidential
Information, each of such agents, consultants, contractors and employees shall
(a) be advised by Principal of the confidential and proprietary nature of the
Confidential Information and (b) agree to be bound by the terms and conditions
of this Agreement.  Notwithstanding such agreement,
Principal shall indemnify the Friday’s Indemnitees from and against any
damages, costs (including reasonable fees of attorneys and other engaged
professionals) 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.

 

5.                                       In
the event Principal or Principal’s agents, representatives, or employees
receive notice of any request, demand or order to transfer or disclose all or
any portion of the Confidential Information, Principal shall immediately notify
Friday’s thereof, and shall fully cooperate with and assist Friday’s in
prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Principal shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

6.                                       Immediately
upon Friday’s request or upon any termination or expiration of the Term,
Principal shall return the Confidential Information including, without
limitation, 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, and any copies thereof.

 

7.                                       Each
of the representations, warranties, covenants, acknowledgments and agreements
of Principal, and the rights and remedies of Friday’s 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 of the Development
Agreement, are incorporated in this Agreement by reference as if fully set
forth.  In connection with Friday’s
enforcement of such rights and remedies (or other rights and remedies of Friday’s
under this Agreement), any court of competent jurisdiction selected by Friday’s
shall have personal jurisdiction over Principal, to which jurisdiction
Principal irrevocably consents.  The
parties agree that to the extent the law of the State of Texas is held
enforceable, Texas law shall apply to the interpretation and construction of this
Agreement (except for Texas choice of law rules) and shall govern all questions
which arise with reference hereto.

 

8.                                       Friday’s
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 Friday’s right to obtain equitable relief.

 

9.                                       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.

 

10.                                 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.

 

2

 

11.                                 Principal
acknowledges and warrants that he 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.

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties on the dates
indicated below.

 

	
  TGI
  FRIDAY’S INC.

  	
  MAIN
  STREET AND MAIN INCORPORATED

  
	
   

  	
   

  
	
  By:

  	
  /s/ Leslie Sharman

  	
   

  	
   

  	
  /s/ William G. Shrader

  	
   

  
	
  Name:

  	
  Leslie Sharman

  	
   

  	
  Name:

  	
  William G.
  Shrader

  	
   

  
	
  Title:

  	
  Sr. Vice President-General Counsel

  	
   

  	
  Date:

  	
  March 11,
  2004

  	
   

  
	
  Date:

  	
  March 15,
  2004

  	
   

  	
   

  	
   

  	
   

  
													

 

3

 

ADDENDUM B TO DEVELOPMENT AGREEMENT

 

COVENANT AND AGREEMENT FOR CONFIDENTIALITY

 

This
agreement (“Agreement”) is made by [Employee’s Name], an individual
residing in the state of                
(“Employee”), Cornerstone Productions, Inc., a corporation organized
under the laws of the State of Delaware (“Developer”), in connection with that
certain Development Agreement dated                 ,
2004 (the “Development Agreement”), by and between TGI Friday’s Inc. (“Friday’s”)
and Developer.

 

WHEREAS,
Friday’s and Developer have entered into the Development Agreement; and

 

WHEREAS,
the Confidential Information provides economic advantages to Friday’s, and is
not generally known to, and is not legally available to, third parties; and

 

WHEREAS,
Friday’s 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 and Developer agree as follows:

 

1.                                       Capitalized
terms used herein and not otherwise defined shall have the meanings attributed
to them on Annex A hereto.

 

2.                                       Developer
or Friday’s, acting on behalf of Developer, shall disclose to Employee some or
all of the 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 Friday’s
or TGIFM is the exclusive owner of the Confidential Information, the System and
the Proprietary Marks.  Employee shall
not, directly or indirectly, contest of impair Friday’s or TGIFM’s ownership
of, or interest in, the Confidential Information, the System or the Proprietary
Marks.

 

3.                                       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, Friday’s, TGIFM or Developer. 
Except as permitted

 

1

 

pursuant to this
Agreement, the Confidential Information shall not, without the prior written
consent of Friday’s, be (i) copied, (ii) compiled (in total or in part) with
other information, or (iii) disclosed to any third party.

 

4.                                       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.  Prior to such disclosure of any Confidential
Information, each such employee shall (i) be advised by Employee of the
confidential and proprietary nature of the Confidential Information and (ii)
agree to be bound by the terms and conditions of this Agreement.

 

5.                                       In
the event Employee receives notice of any request, demand, or order to transfer
or disclose all or any portion of the Confidential Information, Employee shall
immediately notify Developer thereof, and shall fully cooperate with and assist
Friday’s in prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Employee shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

6.                                       Immediately
upon Friday’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 the Confidential Information
including, without limitation, 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, and any copies
thereof, to Developer or Friday’s.

 

7.                                       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 one (1) year 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 Friday’s
or Developer, (ii) by any developer or franchisee of Friday’s, 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 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 radius of three (3) miles of any
restaurant which is a part of any concept or system owned, operated or
franchised by Friday’s or any Affiliate.

 

8.                                       In
connection with the enforcement of rights and remedies under this Agreement,
any court of competent jurisdiction selected by Developer or Friday’s shall
have personal jurisdiction over Employee, to which jurisdiction Employee
irrevocably consents.  THE PARTIES AGREE THAT TO THE EXTENT THE LAW OF THE STATE OF TEXAS IS
HELD ENFORCEABLE, TEXAS

 

2

 

LAW SHALL
APPLY TO THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT (EXCEPT FOR
TEXAS CHOICE OF LAW RULES) AND SHALL GOVERN ALL QUESTIONS WHICH ARISE WITH
REFERENCE HERETO.

 

9.                                       A.                                   Employee
acknowledges and agrees that (i) Friday’s is a third party beneficiary to this
Agreement and (ii) Friday’s exercise of the rights and remedies set forth
herein is reasonable.

 

B.                                     Developer
or Friday’s 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 Developer’s or Friday’s right to obtain equitable
relief.

 

C.                                     With
respect to Employee’s breach of the covenants contained in Section 7.A
hereof, the affected former employer shall be compensated by Employee 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 to the former employer at such time
as such employee commences employment.

 

10.                                 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.

 

11.                                 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.

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties on the dates
indicated below.

 

	
    [Employee]

  	
   

  	
  CORNERSTONE
  PRODUCTIONS, INC.

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
							

 

3

 

Annex A to Covenant and Agreement for
Confidentiality

 

Affiliate
– Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any
subsidiary of TGI Friday’s Inc.

 

Commencement Date
-                               ,
2004.

 

Competing Business
- a restaurant or bar/restaurant business offering the same or similar products
and services as offered by restaurants in the System or restaurants in any
other concept or system owned, operated or franchised by Friday’s or any
Affiliate, including, without limitation, waiter/waitress service, sit-down
dining and bar services.

 

Confidential
Information - the System, the Development Manual, the
Manuals, other manuals, the Standards, written directives and all drawings,
equipment, recipes, computer and point of sale programs (and output from such
programs); and any other information, know-how, techniques, materials and data
imparted or made available by Friday’s which is (i) designated as confidential,
(ii) known by Developer or Employee to be considered confidential by Friday’s,
or (iii) by its nature inherently or reasonably considered confidential.

 

Development Manual
- Friday’s manual, as amended from time to time, describing (generally) the
procedures and parameters required for the development of T.G.I. Friday’s®
Restaurants in the United States.

 

Indemnitees
- Friday’s, its directors, officers, employees, agents, shareholders,
affiliates, successors and assigns and the respective directors, officers,
employees, agents, shareholders and affiliates of each.

 

Manuals
- Friday’s confidential operating manuals, as amended from time to time by Friday’s,
which contain the instructions, requirements, Standards, specifications,
methods and procedures for the operation of the Restaurants including (i) those
relating to the selection, purchase, service and sale of all products being
sold at the Restaurants, (ii) those relating to the maintenance and repair of
the Restaurants, buildings, grounds, equipment, signs, interior and exterior
decor items, fixtures and furnishings and (iii) those relating to employee
apparel and dress, accounting, bookkeeping, record retention and other business
systems, procedures and operations.

 

Proprietary Marks
- certain trademarks, trade names, service marks, emblems and indicia of origin
designated by Friday’s from time to time in connection with the operation of
Restaurants pursuant to the System in the Territory, including, without
limitation, “TGI Friday’s®”, “Friday’s®” and “The American
Bistro®”.

 

Restaurant(s)
- a T.G.I. Friday’s® Restaurant(s) developed pursuant to the
Development Agreement.

 

Standards
- the standards and specifications, as amended from time to time by Friday’s,
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 Friday’s (which may be
modified or further developed from time to time by Friday’s) for the
establishment and operation of full-service restaurants under the Proprietary
Marks, which includes, without limitation, a distinctive image consisting of
exterior and interior design, decor, color scheme and furnishings; special
recipes, menu

 

1

 

items and full service
bar; employee uniform standards, products, services and specifications; procedures
with respect to operations and inventory and management control; training and
assistance; and advertising and promotional programs.

 

Term
- the duration of the Development Agreement, commencing on the Commencement
Date and continuing until                       ,
20    , unless sooner terminated.

 

Territory
- the geographical area described and set forth in Exhibit C.

 

TGIFM
- TGI Friday’s of Minnesota Inc., a Minnesota corporation and a subsidiary of
Friday’s.

 

T.G.I. Friday’s®
Restaurants - restaurants operated in accordance with the
System under the Proprietary Marks.

 

2

 

EXHIBIT B TO DEVELOPMENT AGREEMENT

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (the “Guaranty”) is made as of
the      day of                         ,
2004, by the undersigned (hereinafter referred to individually and collectively
as “Guarantors” whether one or more) in favor of TGI Friday’s Inc., a New York
Corporation (“Friday’s”).

 

WHEREAS,
Friday’s, Cornerstone Productions, Inc., and certain other individuals and/or
entities entered into that certain Development Agreement dated                   ,
2004 (the “Development Agreement”) regarding the development of T.G.I. Friday’s®
restaurants located in certain territory stated therein (the “Restaurant”);

 

WHEREAS,
as an inducement to Friday’s to enter into the Development Agreement, the
undersigned Guarantors have agreed to make and deliver this Guaranty to Friday’s.

 

NOW
THEREFORE, FOR VALUE RECEIVED, Guarantors, jointly and severally, if more than
one, hereby acknowledge and agree as follows:

 

1.                                       Each
has read the terms and conditions of this Guaranty and of the Development
Agreement.

 

2.                                       Each
is a “Principal” as defined in the Development Agreement.

 

3.                                       Each
makes all of the representations, warranties, covenants and agreements of the
Developer (including liability to make Payments) and a Principal set forth in
the Development Agreement (including, without limitation, the covenants and
agreements concerning Transfer, non-compete and maintenance of Confidential
Information) and is obligated to perform thereunder.

 

4.                                       Each
acknowledges that Friday’s may, without notice to Guarantors and without
affecting the obligations of any of the Guarantors under this Guaranty, waive,
renew, extend, modify, amend or release any indebtedness or obligation of
Developer, or settle, adjust, or compromise any claims against Developer;

 

5.                                       Each
waives all demands and notices of every kind with respect to this Guaranty
including, without limitation, notice of presentment, demand for payment or
performance by Developer, notice of any default by Developer or any Guarantor,
and any release of any Guarantor or other security for the Development
Agreement or the obligations of Developer. 
Friday’s may pursue its rights against Guarantors without first
exhausting its remedies against Developer and without joining any other
Guarantor hereto, and no delay on the part of Friday’s in the exercise of any
right or remedy shall operate as a waiver of such right or remedy;

 

6.                                       Each
individually, jointly and severally, irrevocably and unconditionally guarantees
that all of Developer’s obligations under the terms and conditions of the
Development Agreement will be timely paid and performed;

 

7.                                       Each
has derived and expects to derive financial or other benefit, directly or
indirectly, from the Development Agreement and the transaction described
therein;

 

1

 

8.                                       Each
acknowledges that its execution of the Development Agreement, and its
undertakings and agreements herein, have induced Friday’s to enter into the
transactions described in, and to execute, the Development Agreement.

 

9.                                       Each
consents to and shall be bound by any amendment of the Development Agreement
made by Friday’s and Developer pursuant to the terms thereof.

 

 

	
  GUARANTOR

  
	
   

  
	
  MAIN STREET AND
  MAIN INCORPORATED

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

2

 

EXHIBIT C TO DEVELOPMENT AGREEMENT

 

THE TERRITORY

 

1)                                      The
following counties in the State of Arizona:

 

	
  Apache
  South

  	
  Greenlee

  	
  Pima

  
	
  Apache
  North

  	
  La Paz

  	
  Pinal

  
	
  Cochise

  	
  Maricopa

  	
  Santa Cruz

  
	
  Coconino

  	
  Mohave

  	
  Yavapai

  
	
  Gila

  	
  Navajo

  	
  Yuma

  
	
  Graham

  	
   

  	
   

  

 

2)                                      The
following counties in the State of Nevada:

 

	
  City
  Limits of Carson City

  	
  Eureka

  	
  Nye

  
	
  Churchill

  	
  Humboldt

  	
  Pershing

  
	
  Clark

  	
  Lander

  	
  Storey

  
	
  Douglas

  	
  Lincoln

  	
  Washoe

  
	
  Elko

  	
  Lyon

  	
  White Pine

  
	
  Esmeralda

  	
  Mineral

  	
   

  

 

3)                                      The
following counties in the State of New Mexico:

 

	
  Bernalillo

  	
  Harding

  	
  San Juan

  
	
  Catron

  	
  Hidalgo

  	
  San Miguel

  
	
  Chaves

  	
  Lea North

  	
  Sandoval

  
	
  Cibola

  	
  Lincoln

  	
  Santa Fe

  
	
  Colfax

  	
  Los Alamos

  	
  Sierra

  
	
  De
  Baca

  	
  Luna

  	
  Socorro

  
	
  Donna
  Ana

  	
  McKinley

  	
  Taos

  
	
  Eddy

  	
  Mora

  	
  Torrance

  
	
  Grant

  	
  Otero

  	
  Valencia

  
	
  Guadalupe

  	
  Rio Arriba

  	
   

  

 

4)                                      The
following counties in the State of Texas:

 

	
  Culberson

  	
   

  	
   

  
	
  El
  Paso

  	
   

  	
   

  
	
  Hudspeth

  	
   

  	
   

  

 

1Exhibit 10.10

 

T.G.I. FRIDAY’S® RESTAURANTS

 

DEVELOPMENT AGREEMENT

 

MAIN ST. CALIFORNIA, INC.

 

Date: March 15, 2004

 

 

T.G.I. FRIDAY’S® RESTAURANTS

 

DEVELOPMENT AGREEMENT

 

TABLE OF CONTENTS

 

	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  EXCLUSIVE
  RIGHTS; TERM

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  DEVELOPMENT
  SCHEDULE; SITE SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MANUALS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  FEES AND
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  REPRESENTATIVE;
  OPERATOR; RESTAURANT MANAGERS; TRAINING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  DEVELOPER’S
  REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  TRANSFER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  CONSENT
  AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  DEFAULT
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  FORCE
  MAJEURE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  INDEPENDENT CONTRACTOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  DUE DILIGENCE AND
  ASSUMPTION OF RISK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  CHOICE OF LAW;
  JURISDICTION; VENUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  ENTIRE AGREEMENT

  	
   

  

 

1

 

	
  ADDENDUM
  A

  	
   

  	
  COVENANT
  AND AGREEMENT FOR CONFIDENTIALITY (PRINCIPAL)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDENDUM
  B

  	
   

  	
  COVENANT
  AND AGREEMENT FOR CONFIDENTIALITY (OTHERS)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  FRANCHISE
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  B

  	
   

  	
  GUARANTY
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  C

  	
   

  	
  TERRITORY

  	
   

  

 

2

 

DEVELOPMENT AGREEMENT

 

This
Development Agreement is entered into as of the 15th day of March, 2004 with an
effective date of January 1, 2004 by and between TGI Friday’s Inc., a New
York corporation (“Friday’s”), with its principal place of business located at
4201 Marsh Lane, Carrollton, Texas, 75007, and Main St. California, Inc., an
Arizona corporation (“Developer”), with its principal place of business located
at 5050 North 40th Street, Suite 200, Phoenix, Arizona 85018 and its
Principals (as defined herein below).

 

RECITALS

 

WHEREAS,
Friday’s has developed and owns the System;

 

WHEREAS,
Friday’s intends to identify the System in the Territory with the Proprietary
Marks; and

 

WHEREAS,
Developer wishes to obtain certain rights to develop Restaurants under the
System in the Territory.

 

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:

 

Action
- any cause of action, suit, proceeding, claim, demand, investigation or
inquiry (whether a formal proceeding or otherwise) asserted or instituted by a
third party with respect to which the indemnity described in Section 12
applies.

 

Affiliate
- Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any
subsidiary of TGI Friday’s Inc.

 

Agreement -
this Development Agreement.

 

Appraiser(s)
- one or more independent third parties selected by the parties to this
Agreement in accordance with the terms and conditions hereof.

 

Business Days
- Each day except Saturday, Sunday and national legal holidays.

 

Commencement Date
– January 1, 2004.

 

Competing Business
- a restaurant business offering the same or similar products and services as
offered by restaurants in the System or restaurants in any other concept or
system owned, operated or franchised by Friday’s or any Affiliate, including,
without limitation, waiter/waitress service, sit-down dining and bar services.

 

1

 

Confidential
Information - 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 any other information, know-how,
techniques, materials and data imparted or made available by Friday’s which is
(i) designated as confidential, (ii) known by Developer to be considered
confidential by Friday’s, or (iii) by its nature inherently or reasonably
considered confidential.

 

Developer - Main St. California,
Inc., an Arizona corporation.

 

Developer Indemnitees
- Developer, Principals, and their respective directors, officers, employees,
agents, shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders, affiliates, successors
and assigns of each.

 

Development Fee
- a fee equal to the sum of ten percent (10%) of the Franchise Fee for each
Restaurant to be developed pursuant to the Development Schedule.

 

Development Manual
- Friday’s manual, as amended from time to time, 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 copy of the Occupancy Contract, and documentation
indicating Developer’s prospects to acquire the Site) and such other
information related to the development of the Site as Friday’s reasonably
requests.

 

Development Schedule -
the schedule pursuant to which Developer shall develop Restaurants in the
Territory (see Section 3.A).

 

Entertainment Park
– includes, but is not limited to any amusement park, theme park, or any other
entertainment venue which has a national presence of at least two (2) or more such
parks in existence, and which has averaged at least 1.5 million persons in
annual attendance for the preceding three (3) calendar years at any one (1)
park location.

 

Event of Default
- as defined in Section 10.

 

Franchise
Agreement - an agreement pursuant to which Developer
constructs and operates a Restaurant during the Development Schedule, which
shall be substantially in the form attached as Exhibit A.

 

Franchisee
- as defined in the Franchise Agreement.

 

Franchise Fee
- an initial per Restaurant fee (more fully defined in the Franchise Agreement)
paid by Developer to Friday’s, which fee varies in accordance with the number
of Restaurants previously developed under each Development Schedule.

 

Friday’s
- TGI Friday’s Inc., a New York corporation.

 

Friday’s
Indemnitees - Friday’s, its directors, officers, employees,
agents, shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders and affiliates of each.

 

Headquarters
- the location(s) designated from time to time by Friday’s as its principal
place of business.

 

2

 

Indemnitees
- Friday’s Indemnitees and Developer Indemnitees.

 

Losses and
Expenses - all compensatory, exemplary or punitive damages,
fines, charges, costs, expenses, lost profits, reasonable fees of attorneys and
other engaged professionals, court costs, settlement amounts, judgments, 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 in Section 12.

 

Material Event of
Default - an Event of Default which constitutes a substantial
deviation from the performance required.

 

Multi-Unit
Manager(s) - the individual(s) designated as described in Section 5.E
who shall be solely dedicated to the management and supervision of the
Restaurants.

 

NSO-Team
- a “new store opening team” consisting of Friday’s employees and certain of
Franchisee’s employees to whom Friday’s has consented which shall perform the
functions described in Section 5.I.

 

Occupancy Contract
- the proposed agreement or document (including, without limitation, any lease,
deed, contract for sale, contract for deed, land contract, management contract,
license, or other agreement purporting to grant any right, title, or interest
in or to the Site) pursuant to which Developer shall occupy or acquire rights
in any Site.

 

Operator
- 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.

 

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
one, some or all of the Proprietary Marks or other names or marks, but
utilizing a system other than the System pursuant to which a T.G.I. Friday’s
Restaurant is operated.

 

Owner
- the party (if other than the Developer) owning or controlling the Site and
being a party (with Developer) to the Occupancy Contract.

 

Payments
- all transfers of funds from Developer to Friday’s including, without
limitation, the Development 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 Friday’s.

 

Preliminary Site
Consent - written communication from Friday’s to Developer
notifying Developer that a proposed site has received the consent of the Friday’s
Site Review Committee.

 

Principal(s)
– Main Street and Main Incorporated who is (and such other persons or entities
to whom Friday’s shall consent from time to time) the record and beneficial
owner of, and has the right to vote its respective interest (collectively 100%)
in the Securities of Developer or the securities or partnership

 

3

 

interest of any person or
entity designated by Friday’s which owns or controls a direct or indirect
interest in the Securities of the Developer.

 

Project Manager
- an individual designated as described in Section 5.C who shall devote
his full-time and best efforts to the coordination and completion of Restaurant
construction.

 

Proprietary Marks
- certain trademarks, trade names, trade dress, service marks, emblems and
indicia of origin designated by Friday’s from time to time for use in
connection with the operation of Restaurants pursuant to the System in the
Territory, including, without limitation, “TGI Friday’s®”,
“Friday’s®” and “The American Bistro®”.

 

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 or over the
counter pursuant to applicable law.

 

Representative
- an individual, designated as described in Section 5.A. who (i) owns an
equity interest in the Developer and (ii) is 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.

 

Restaurant
Manager(s) - general manager, assistant general manager,
kitchen manager and other managers required for the management, operation,
supervision and promotion of the Restaurant pursuant to the terms hereof.

 

Security
- the capital stock of, partner’s interest in, or other equity or voting interest
in Developer including such interests issued or created subsequent to the date
hereof.

 

Site
- the proposed location of any Restaurant.

 

Standards
- Friday’s standards and specifications, as amended from time to time by Friday’s,
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 Friday’s (which may be
modified or further developed from time to time by Friday’s) for the
establishment and operation of full-service restaurants and restaurant/bars
under the Proprietary Marks, which includes, without limitation, a distinctive
image consisting of 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, inventory
and management control (including accounting procedures and policies); training
and assistance; and advertising and promotional programs.

 

Term
- the duration of this Agreement commencing on the Commencement Date and
continuing until the date specified on the Development Schedule for the
last restaurant to be opened.

 

Territorial
Expenses - such costs and expenses incurred by or assessed
with respect to Friday’s (or other described party’s) employees, agents and/or
representatives in connection with activities in the Territory which Developer
is obligated to pay pursuant to this Agreement, including, without limitation,
hotel/lodging, transportation and meals, and other related or incidental
expenses.

 

4

 

Territory
- the geographical area described in Exhibit C; provided, however, the
Territory shall not include any airport properties, professional sports
stadiums, military bases, Entertainment Parks or casinos otherwise located
within the Territory, nor a specifically identified restricted area surrounding
any Restaurant located within the Territory as of the date of this Agreement
nor shall it be deemed to convey any exclusivity with respect to the use of the
Proprietary Marks.

 

TGIFM -
TGI Friday’s of Minnesota Inc., a Minnesota corporation and a subsidiary of
Friday’s.

 

T.G.I. Friday’s®
Restaurants - restaurants operated in accordance with the
System under the registered service marks “Friday’s®”
or “T.G.I. Friday’s®”.

 

Training Center
- the location(s) specified from time to time by Friday’s as the training
center.

 

Transfer
- the sale, assignment, conveyance, license, devise, bequest, 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.

 

Transferee
Owner(s) - the owner of any and all record or beneficial
interest in the capital stock of, partner’s interest in, or other equity or
voting interest in any transferee of a Transfer occurring pursuant to the terms
of Section 8.

 

Wage Expenses
- such wages and/or salaries (including a reasonable allocation of the cost of
benefits) of, or with respect to, Friday’s (or other described party’s)
employees, agents and/or representatives to be reimbursed to Friday’s or such
party as described herein.

 

2.                                      EXCLUSIVE
RIGHTS; TERM

 

A.                                   Friday’s
grants to Developer the right, and Developer accepts the obligation, subject to
the terms and conditions herein, to develop and operate the number of
Restaurants set forth in the Development Schedule (set forth in Section 3.A)
as may be approved by Friday’s in accordance with its then current site consent
procedures.  The Restaurants shall be
developed and operated in the Territory pursuant to the System.  For so long as no Event of Default has occurred
and is continuing and no event has occurred which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default, Friday’s will
neither develop, nor authorize any other person to develop, T.G.I. Friday’s
Restaurants in the Territory during the Term.

 

B.                                     Friday’s
reserves the right to use the Proprietary Marks in connection with Other
Concepts.

 

C.                                     Friday’s
expressly reserves the right, and Developer acknowledges that Friday’s has the
exclusive unrestricted right, to engage, directly and indirectly, through its
employees, developers, franchisees, licensees, agents and others within the
Territory, in Other Concepts.  Such Other
Concepts may compete with Developer directly or indirectly.

 

D.                                    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.

 

5

 

E.                                      Unless
sooner terminated as provided herein, this Agreement shall commence on the
Commencement Date and continue until the expiration of the Term.  This Agreement shall automatically expire at
11:59 p.m. on the date specified in Section 3.A. as the opening date for
the last restaurant to be opened.

 

F.                                      Upon
any termination or expiration of this Agreement, (i) Developer shall not
develop additional Restaurants in the Territory pursuant to this Agreement; 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) Friday’s may develop, or authorize others to
develop, Restaurants in the Territory.

 

3.                                      DEVELOPMENT
SCHEDULE; SITE SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MANUALS

 

A.                                   Developer
shall develop, open, commence operation of and continuously operate pursuant to
the respective Franchise Agreements ten (10) Restaurants in the Territory,
pursuant to the Development Schedule as follows:

 

	
  Restaurant No.

  	
   

  	
  Date of Preliminary

  Site Consent

  	
   

  	
  Date Franchise

  Agreement Signed

  & Fees Paid

  	
   

  	
  Date Open &

  Operating

  	
   

  
	
  1

  	
   

  	
  6/23/05

  	
   

  	
  9/23/05

  	
   

  	
  12/23/05

  	
   

  
	
  2

  	
   

  	
  6/23/06

  	
   

  	
  9/23/06

  	
   

  	
  12/23/06

  	
   

  
	
  3

  	
   

  	
  6/23/06

  	
   

  	
  9/23/06

  	
   

  	
  12/23/06

  	
   

  
	
  4

  	
   

  	
  6/23/07

  	
   

  	
  9/23/07

  	
   

  	
  12/23/07

  	
   

  
	
  5

  	
   

  	
  6/23/07

  	
   

  	
  9/23/07

  	
   

  	
  12/23/07

  	
   

  
	
  6

  	
   

  	
  6/23/08

  	
   

  	
  9/23/08

  	
   

  	
  12/23/08

  	
   

  
	
  7

  	
   

  	
  6/23/08

  	
   

  	
  9/23/08

  	
   

  	
  12/23/08

  	
   

  
	
  8

  	
   

  	
  6/23/09

  	
   

  	
  9/23/09

  	
   

  	
  12/23/09

  	
   

  
	
  9

  	
   

  	
  6/23/09

  	
   

  	
  9/23/09

  	
   

  	
  12/23/09

  	
   

  
	
  10

  	
   

  	
  6/23/09

  	
   

  	
  9/23/09

  	
   

  	
  12/23/09

  	
   

  

 

(i).                                  To
satisfy a particular deadline for preliminary site consent, Developer must
submit a site that can be open and operating by the corresponding restaurant
opening deadline.  If Developer submits a
site for preliminary site consent, but the site cannot be open and operating by
the next restaurant opening deadline, that site will not satisfy the deadline
for preliminary site consent that corresponds to the next restaurant opening
deadline.

 

(ii).                               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.

 

(iii).                            Time
is of the essence, with respect to each of the development obligations
specified in this Section 3.

 

(iv).                           Notwithstanding the grant of rights herein,
the Territory may, at Friday’s election, be co-developed by Friday’s with
company operated restaurants.  Friday’s
additionally reserves the right to issue franchises for location within the
Territory to third parties on a site specific basis, without the issuance of a
development territory or additional development rights.

 

6

 

B.                                     The
number of Restaurants indicated in the Development Schedule shall be OPEN AND OPERATING by the date(s) specified therein.  Friday’s consent to any Site or execution of
a Franchise Agreement shall not waive, extend or modify the Development
Schedule.  Unless otherwise agreed and
approved by Friday’s, the Restaurants shall refer to traditional T.G.I. Friday’s
Restaurants.

 

C.                                     Developer
assumes all cost, liability, expense, risk and responsibility for locating,
obtaining and developing Sites for Restaurants, and for constructing and
equipping Restaurants at such Sites. 
Prior to execution of each Franchise Agreement, Developer shall obtain
Friday’s consent to each Site (including, without limitation, the Proprietary
Mark which shall be used to identify the Restaurant at the Site to the public)
pursuant to the time frames set forth in Section 3.A. above in accordance
with Friday’s then existing Site selection criteria and procedures including:

 

(1)                                  submission
of all Development Materials to Friday’s; and

 

(2)                                  with
respect to each Restaurant to be developed hereunder, completion of one (1)
Site visit by Friday’s at Friday’s sole cost and expense, if required by Friday’s.

 

D.                                    Within
thirty (30) days following receipt of all Development Materials and completion
of any such visit, Friday’s shall consent to or reject such Site.  Friday’s failure to consent shall constitute
rejection of such Site.  Promptly after
Friday’s consent is obtained, but prior to commencing construction at such
Site, Developer shall execute a Franchise Agreement and pay the Franchise Fee.

 

E.                                      Neither
Friday’s (i) consent to nor (ii) assistance in the selection of, any Site shall
constitute Friday’s representation or warranty that a Restaurant operated at such
Site will be profitable or meet any financial projection.

 

F.                                      Friday’s
shall have the right to review and consent to the Occupancy Contract prior to
the execution thereof.  A copy of the
proposed Occupancy Contract shall be provided to Friday’s within sixty (60)
days of the date of Preliminary Site Consent. 
The Occupancy Contract shall be executed by all necessary parties within
thirty (30) days following Friday’s consent thereto.  Developer shall furnish Friday’s a complete
copy of the executed Occupancy Contract within ten (10) days after execution.
Unless it conveys to Developer fee simple title to the Site, the Occupancy
Contract shall include the following covenants:

 

(1)                                  Owner
shall deliver to Friday’s, 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)                                  Friday’s
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 Friday’s without any fee or modification
thereof and Friday’s 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 Owner’s consent; and

 

7

 

(4)                                  Owner
and Developer shall not amend the Occupancy Contract in any way which is inconsistent
with the provisions of Sections 3.F(1) through (4), inclusive.

 

G.                                     Notwithstanding
the terms of Section 3.F, Developer shall:

 

(1)                                  deliver
to Friday’s, immediately after delivery to or by Developer, any notice of
default under the Occupancy Contract which threatens or purports to terminate
the Occupancy Contract or result in a foreclosure thereof;

 

(2)                                  permit
Friday’s 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, all at Developer’s expense; and

 

(3)                                  not
amend the Occupancy Contract in any way which is inconsistent with the
provisions of Sections 3.F.(1) through (4), inclusive.

 

H.                                    Friday’s
shall provide Developer with one (1) Development Manual “on loan” and two (2)
sets of Friday’s standard plans and specifications as of the date hereof for
the construction of a typical Restaurant. 
Developer acknowledges Friday’s ownership of the Development Manual and
any such plans and specifications, together with any copyright rights in or to
such materials.  Developer shall observe
Friday’s reasonable requests concerning copyright notices.  The Development Manual and such plans shall
be returned to Friday’s immediately upon termination or expiration of this
Agreement.

 

I.                                         Friday’s
shall provide such consultation as it reasonably deems necessary to consent to
vendors and products proposed to be used in Restaurant development and
operation.

 

4.                                      FEES
AND PAYMENTS

 

A.                                   In
consideration of the development rights granted herein, Developer shall pay to
Friday’s upon execution of this Agreement the Development Fee. Under no
circumstances shall Developer be entitled to any refund of any portion of the
Development Fee.

 

B.                                     The
Franchise Fee to be paid by Developer for each new Restaurant to be developed
under the Development Schedule set forth in Section 3.A hereof shall
be Fifty Thousand Dollars ($50,000.00) for each Restaurant, payable upon
execution of the Franchise Agreement for each Restaurant in accordance with the
Development Schedule.  Developer shall
receive a credit of $5,000 against the payment of the Franchise Fee due for
each Restaurant developed pursuant to the Development Schedule.

 

C.                                     (1)                                  All
Payments shall be submitted to Friday’s at the address provided in Section 13
hereof, in care of the “Treasurer”, or such other address as Friday’s shall
designate in writing.

 

(2)                                  Payments
shall be received by Friday’s (i) upon execution hereof in the case of the
Development Fee; (ii) upon execution of each Franchise Agreement; and (iii) not
more than thirty (30) days after date of invoice for all other Payments.  Delinquent Payments shall bear interest from
the due date until received by Friday’s at eighteen percent (18%) per annum or
the maximum rate permitted by law, whichever is less.

 

8

 

D.                                    Developer
shall not withhold or off-set any portion of any Payment due to Friday’s
alleged non-performance under this Agreement or any other agreement by and
between Friday’s and Developer or their respective parent corporations,
subsidiaries or affiliates.

 

5.                                      REPRESENTATIVE;
OPERATOR; RESTAURANT MANAGERS;
TRAINING

 

A.                                   Developer
hereby designates Bill Shrader as
the Representative.  Any replacement
Representative shall be designated within ten (10) days of the prior
Representatives’ resignation or termination. 
Each Representative shall attend and successfully complete at the
Training Center Friday’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
hereby designates Jeff L. Smit as
the Operator.  Any replacement Operator
shall be designated within ten (10) days of the prior Operator’s resignation or
termination.  Each Operator shall attend
and successfully complete at the Training Center within six (6) months of
appointment Friday’s training program required for Restaurant Managers (see
Section 5.D.).  The Operator hereunder
and under each Franchise Agreement shall be the same individual.

 

C.                                     Not
less than sixty (60) days prior to the commencement of Restaurant construction,
Developer shall designate the Project Manager. 
Any replacement Project Manager shall be designated within ten (10) days
of the prior Project Manager’s resignation/termination.

 

D.                                    The
requisite number of Restaurant Managers, as determined by Friday’s, shall be
employed by Developer for each Restaurant developed hereunder.  All Restaurant Managers shall attend and
successfully complete at the Training Center Friday’s training program for
Restaurant Managers of T.G.I. Friday’s® Restaurants (currently, one
(1) week).  Additionally, the Restaurant
Managers shall attend and successfully complete additional training (currently,
approximately fourteen (14) weeks) at such then existing T.G.I. Friday’s
Restaurants as shall be designated by Friday’s. 
Any previously trained Restaurant Manager who is not a general manager,
but has been selected to become a general manager shall attend and successfully
complete such additional training as Friday’s may require.  Friday’s may require general and kitchen
managers, at Developer’s expense, to attend and successfully complete
additional training at the Training Center.

 

E.                                      When
the Franchise Agreement for the third Restaurant is executed, Developer shall
designate a Multi-Unit Manager. 
Additional Multi-Unit Managers shall be designated from time to time as
reasonably required by Friday’s.  Prior
to assuming his duties, each Multi-Unit Manager shall have successfully
completed Restaurant Manager training and shall attend at the Training Center
and successfully complete Friday’s training program for Multi-Unit Managers
(currently, two (2) days at the Training Center and approximately four (4)
weeks at such then existing T.G.I. Friday’s® Restaurant locations as
shall be designated by Friday’s).

 

F.                                      Friday’s
shall have the right to interview and consent to each Operator, each Multi-Unit
Manager, Project Manager and all Restaurant Managers.  Friday’s shall endeavor to conduct such
interviews in the Territory, but may require that such interviews occur at
Headquarters.  Developer shall bear all
costs and expenses related to making the Restaurant Managers available for such
interviews.

 

G.                                     Friday’s
shall provide instructors, facilities and materials for training at the
Training Center, and shall provide, at its option, other training programs at
non-Training Center locations as may be designated by Friday’s from time to
time in the Manuals or otherwise in writing. 
Developer shall

 

9

 

reimburse Friday’s for
any Territorial Expenses or other direct expenses incurred by Friday’s for such
other training programs.

 

H.                                    Except
as provided herein, Developer shall bear all costs and expenses relating to any
Representative, Operator, Multi-Unit Manager, Project Manager and Restaurant
Manager training.

 

I.                                         The
NSO Team shall assist in (i) training Developer’s/Franchisee’s employees at
each Restaurant; and (ii) the opening of each Restaurant.  The NSO Team for a Restaurant typically
consists of a combined total of approximately twelve (12) employees of Friday’s
and Developer/Franchisee (the actual number of members shall be determined by
Friday’s depending upon the number of Restaurant locations already open and
operating by Developer and such other criteria as Friday’s deems
relevant).  The members of the NSO Team
shall be subject to Friday’s consent. 
The number of Friday’s employees selected to serve on the NSO Team for a
Restaurant is determined according to the following schedule, provided however,
Friday’s may elect to modify this schedule in the event the total number
of people on the NSO Team is greater or less than twelve (12):

 

	
  No. of Restaurants

  Operated

  By Developer

  	
   

  	
  No. of Friday’s

  Employees

  on the NSO Team

  	
   

  	
  Team Members

  Paid for by

  Developer

  	
   

  
	
  7 or more

  	
   

  	
  2

  	
   

  	
  10

  	
   

  

 

In the event Friday’s
determines that more than 12 NSO team members are necessary for an opening,
Developers with five or more restaurants open (inclusive of the new restaurant)
shall be responsible for the costs associated with the team members in excess
of 12.  For Developers with less than
five restaurants open, Friday’s will bear the costs of the additional team
members.

 

If Developer/Franchisee
fails or is unable to timely provide such employees, Friday’s may, but shall
not be obligated to, staff the NSO-Team with Friday’s employees.  Friday’s and Developer/Franchisee shall each
be responsible for: (a) making all travel, food and lodging arrangements, and
(b) the wage and other expenses of the NSO-Team members provided by each;
provided, however, that Developer/Franchisee shall reimburse Friday’s for the
Territorial Expenses and the Wage Expenses of Friday’s employees who are
provided as a result of Developer’s/Franchisee’s failure or inability to
provide Developer/Franchisee employees for participation on the NSO-Team.

 

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, and shall use all reasonable efforts to maintain such
information as secret and confidential. 
Neither Developer nor any Principal shall, without Friday’s prior
consent, copy, duplicate, record or otherwise reproduce any Confidential
Information.  Confidential Information
may be provided to employees, agents, consultants and contractors only to the
extent necessary for such parties to provide services to Developer.  Prior to such disclosure of any Confidential
Information, each of such employees, agents, consultants and contractors shall
(a) be advised by Developer of the confidential and proprietary nature of the
Confidential Information, and (b) agree to be bound by the terms and conditions
of Section 6 of this Agreement. 
Notwithstanding such agreement, Developer shall indemnify the Friday’s
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.

 

10

 

(2)                                  In
the event Developer or Developer’s employees, agents, consultants, or
contractors receive notice of any request, demand, or order to transfer or
disclose all or any portion of the Confidential Information, Developer shall
immediately notify Friday’s thereof, and shall fully cooperate with and assist
Friday’s in prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Developer shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

(3)                                  Developer
and each Principal acknowledge Friday’s exclusive ownership of the Confidential
Information and the System, and TGIFM’s exclusive ownership of, and Friday’s
license with respect to, the Proprietary Marks. Neither Developer nor any
Principal shall, directly or indirectly, contest or impair Friday’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 Friday’s) to the Confidential
Information, Developer and the Principals shall each, without additional
consideration, execute such agreements and other documentation as shall be
deemed necessary by Friday’s, granting exclusive ownership thereof to Friday’s.  All such improvements shall be Confidential
Information.

 

C.                                     Each
Principal shall execute and deliver to Friday’s a covenant in the form attached
as Addendum A.  Developer shall
cause each Operator, Representative, Multi-Unit Manager, Project Manager, and
Restaurant Manager and such other employees of Developer whom Friday’s shall
designate to execute and (if requested) deliver to Friday’s a covenant in the
form attached as Addendum B. 
Notwithstanding the execution of such covenant, Developer shall
indemnify the Friday’s Indemnitees from any damages, costs or expenses
resulting from or related to any disclosure or use of Confidential Information
by any Principal, Operator, Representative, Multi-Unit Manager, Project Manager
or Restaurant Manager.

 

D.                                    Immediately
upon any termination or expiration hereof, Developer and each Principal shall
return the Confidential Information including, without limitation, 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, and all copies thereof.

 

7.                                      DEVELOPER’S
REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

 

A.                                   In
the event Developer is a corporation, limited liability company or partnership,
Developer represents and warrants to Friday’s as follows:

 

(1)                                  Developer
is 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 action and no further action is necessary to make
this Agreement, any Franchise Agreement or

 

11

 

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 articles of
incorporation, by-laws, partnership agreement or other governing documents or
under any 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
articles of incorporation, 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 articles of incorporation, by-laws, partnership
agreement, other governing documents and any amendments thereto, including board
of director’s or partner’s resolutions authorizing this Agreement, have been
delivered to Friday’s.

 

(5)                                  A
certified current list of all Principals has been delivered to Friday’s.

 

(6)                                  Developer’s
articles of incorporation or other governing documents, or partnership
agreement limit Transfers as described in Sections 8.B.(2) and 8.C.

 

(7)                                  Each
Security shall bear a legend (in a form to which Friday’s shall consent)
indicating that any Transfer is subject to Sections 8.B and 8.C.

 

B.                                     Developer
affirmatively covenants with Friday’s as follows:

 

(1)                                  Developer
shall perform its duties and obligations hereunder and under any Franchise
Agreement and shall require each Operator, Multi-Unit Manager, Project Manager
and Restaurant Manager to dedicate their respective full time and best efforts
to the development, construction, management, operation, supervision and
promotion of the Restaurants in accordance with the terms and conditions
hereof.

 

(2)                                  Developer
shall promptly provide Friday’s with all 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 without compensation. 
Developer and the Principals shall each execute such agreements and
other documentation as shall be deemed necessary by Friday’s, granting Friday’s
exclusive ownership thereof.

 

(3)                                  Developer
shall comply with all requirements of applicable rules, regulations, statutes,
laws and ordinances.

 

(4)                                  Developer
shall maintain a current list of all Principals and deliver a certified copy
thereof to Friday’s upon (i) any Transfer; or (ii) request.

 

(5)                                  Each
Security issued subsequent to the date hereof shall be in compliance with Section 7.A.(7).

 

(6)                                  Developer
and each Principal represent and warrant to Friday’s that:  (a) neither Developer nor any Principal is
named, either directly or by an alias, pseudonym or nickname, on the lists of “Specially
Designated Nationals” or “Blocked Persons” maintained by the U.S. Treasury

 

12

 

Department’s Office of
Foreign Assets Control currently located at
www.treas.gov/offices/enforcement/ofac/; (b) Developer and each Principal will
take no action that would constitute a violation of any applicable laws against
corrupt business practices, against money laundering and against facilitating
or supporting persons or entities who conspire to commit acts of terror against
any person or entity, including as prohibited by the U.S. Patriot Act
(currently located at http://www.epic.org/privacy/terrorism/hr3162.html), U.S.
Executive Order 13244 (currently located at
http://www.treas.gov/offices/enforcement/ofac/sanctions/terrorism.html) or any
similar laws; and (c) that Developer and each Principal shall immediately
notify Friday’s in writing of the occurrence of any event or the development of
any circumstance that might render any of the foregoing representations and
warranties false, inaccurate or misleading.

 

C.                                     Developer
acknowledges and/or negatively covenants with Friday’s as follows:

 

(1) Developer shall not amend its articles of
incorporation, by-laws, partnership agreement or other governing documents in a
manner which is inconsistent with Sections 7.A.(3), 8.B.(2) 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 Restaurant 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
one (1) year after the expiration or termination hereof, 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 Friday’s, (ii) by any developer or
franchisee of Friday’s, 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 three (3) mile radius of any
restaurant which is a part of a concept or system owned, operated, or
franchised by Friday’s or any Affiliate.

 

(4)                                  Sections
7.C.(3)(b), (c) and (d) shall not apply to 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.

 

13

 

D.                                    Each
of the foregoing covenants is independent of each other covenant or agreement
contained in this Agreement.

 

E.                                      Friday’s
has the absolute right to 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.                                   Friday’s
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 Friday’s obligations which are assigned shall be fully assumed by
the party to whom Friday’s assigns such obligations.

 

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 Friday’s 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, their respective successors or permitted assigns,
shall complete, or allow to be completed, any Transfer without Friday’s
consent.  Any purported Transfer, by
operation of law or otherwise, without Friday’s consent shall be null and void
and constitute an Event of Default.

 

(2)                                  Friday’s
may require satisfaction of any of the following conditions and such other
conditions as Friday’s may reasonably require prior to consenting to any
Transfer, each of which Developer acknowledges and agrees is reasonable and
necessary:

 

(a)                                  no
Event of Default shall have occurred and be continuing and no event shall have
occurred 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 Friday’s Indemnitees including, without limitation, claims
arising under this Agreement and any Franchise Agreement, in a form acceptable
to Friday’s;

 

(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 Friday’s to evidence such
liability;

 

(d)                                 the
transferee and all Transferee Owners, as applicable, 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 Friday’s) reasonably requested by Friday’s to evidence the foregoing;

 

14

 

(e)                                  the
transferee and all Transferee Owners shall satisfy, in Friday’s reasonable
judgment, Friday’s then existing criteria for T.G.I. Friday’s®
developers or principals, as applicable, including, without limitation: (i)
education; (ii) business skill, experience and aptitude; (iii) character and
reputation; and (iv) financial resources;

 

(f)                                    the
transferee and all Transferee Owners shall execute (without extending the Term)
the standard form of development agreement then being offered to new System
developers or other form of this Agreement as Friday’s requests and such other
ancillary agreements as Friday’s may request for the development of the
Restaurants, 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 Development Fee
(transferee shall pay all Franchise Fees and other fees described in each
Franchise Agreement which have not already been paid in full by Developer); and

 

(g)                                 at
the transferee’s expense, the transferee’s Representative, any Multi-Unit
Manager(s), Operator, and Restaurant Managers shall complete such training as
then required (if not previously trained pursuant to the terms hereof), upon
such terms and conditions as Friday’s may reasonably require.

 

C.                                     Developer
and each Principal agree that:

 

(1)                                  (i)
Friday’s shall have and is hereby granted a right of first refusal with respect
to any Transfer; (ii) should Developer and/or any Principal desire to accept a
bona fide offer to make a Transfer, such party shall promptly notify Friday’s
thereof and shall provide such information and documents relating thereto as
Friday’s may require; (iii) within thirty (30) days after receipt of such
notice, information and documents, Friday’s may notify such party that it
intends to exercise its right of first refusal with regard to such Transfer
upon such terms and conditions; provided, however, that such transaction shall
be consummated within a reasonable period of time after Friday’s has given such
notice; (iv) 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
Friday’s right of first refusal; and (v) Friday’s failure to exercise such
right shall not constitute a waiver of any other provision of this Agreement,
including such right with respect to future offers; and

 

(2)                                  in
the event such offer provides for payment of consideration other than cash,
Friday’s may elect to purchase the interest for the reasonable equivalent in
cash.  If the parties cannot agree within
thirty (30) days of the receipt of notice of Friday’s election to exercise such
right of first refusal on such reasonable equivalent in cash, an Appraiser
designated by Friday’s shall determine such amount, and his determination shall
be final and binding.  If Friday’s elects
to exercise the right of first refusal described above, the cost of the
appraisal, if any, shall be set off against any payment made by Friday’s
hereunder.

 

D.                                    In
the event Developer requests Friday’s consent to any proposed Transfer, there
shall be paid to Friday’s a non-refundable fee of Five Thousand Dollars
($5,000.00), or such greater amount as is necessary to reimburse Friday’s for
its costs and expenses associated with reviewing the proposed Transfer
including, without limitation, Territorial Expenses, legal and accounting fees
and Wage Expenses.  No such fee shall be
payable with respect to a transaction with Friday’s described in Section 8.C.

 

E.                                      In
the event Developer or any Principal is a natural person, Developer or his
administrator, executor, guardian or personal representative shall promptly
notify Friday’s of the death or

 

15

 

Permanent Disability of
such Developer or 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 the date of death; or (ii) ninety
(90) days after the date Developer or such Principal becomes, or is deemed to
be, Permanently Disabled.  Developer or
any Principal refusing to submit to examination with respect to Permanent
Disability shall be deemed Permanently Disabled.

 

F.                                      Friday’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 a written request for Friday’s consent in advance and such consent
shall be obtained in writing.  Friday’s
consent shall not be unreasonably withheld. 
The foregoing not withstanding, where either party’s consent is
expressly reserved to such party’s sole discretion, the exercise of such
discretion shall not be subject to contest.

 

B.                                    FRIDAY’S
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, ADVICE, CONSENT OR SERVICES TO
DEVELOPER OR DUE TO ANY DELAY OR DENIAL THEREOF.

 

10.                               DEFAULT
AND REMEDIES

 

10.01                     A.                                   The
following shall constitute Events of Default by Developer or any Principal: (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 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
or 8); (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 for (a) all or substantially all of Developer’s assets
or (b) any Restaurant is sought which is not dismissed within thirty (30) days;
(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 or no contest to or is convicted of a
felony or a crime involving moral turpitude or any other crime or offense that
Friday’s reasonably believes is likely to adversely affect the Proprietary
Marks, the System or the goodwill associated therewith (whether in the
Territory or elsewhere) or Friday’s interest therein; or (xiii) any (a) two (2)
or more Events of Default shall arise under any single subsection of this Section 10.01.A
or (b) three (3) or more Events of Default shall arise under this Section 10.01.A
in any continuous twelve (12) month period notwithstanding the previous cure of
such Events of Default.

 

B.                                     The
parties agree that an Event of Default arising under Section 10.01.A.(i),
(iii), (iv) [with respect to Events of Default arising, without limitation,
under Section 7.C.(3)], (v), (vi), (viii), (ix), (xi), (xii) or (xiii)
shall constitute a Material Event of Default. 
The parties further agree that Events of

 

16

 

Default committed by
Developer or any Principal arising under other Sections of this Agreement may
also be deemed to be Material Events of Default.

 

C.                                     Upon
the occurrence of an Event of Default by Developer or any Principal, Friday’s
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 Friday’s all rights and powers necessary or
appropriate to accomplish such cure; (ii) shall indemnify and hold the Friday’s
Indemnitees harmless from and against all costs, expenses (including reasonable
fees of attorneys and other engaged professionals), liabilities, claims,
demands and causes of action (including actions of third parties) incurred by
or alleged against any Friday’s Indemnitee in connection with Friday’s cure;
and (iii) shall reimburse or pay such costs or damages within ten (10) days of
receipt of Friday’s invoice therefor;

 

(2)                                  in
the event of a Material Event of Default, upon notice to Developer, terminate
this Agreement and all rights granted hereunder without waiving any (i) claim
for damages suffered by Friday’s; or (ii) other rights, remedies or claims (no
notice of termination shall be required with regard to a Material Event of
Default under Section 10.01.A.(viii) or (ix)); 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.

 

D.                                    Friday’s
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 Friday’s thereof and the expiration of the following
cure periods:

 

(1)                                  with
respect to any Event of Default arising under Section 10.01.A.(vi) - ten
(10) days; or

 

(2)                                  with
respect to any Event of Default arising under Sections 10.01.A.(i)-(v)
inclusive, (vii) and (x) - thirty (30) days.

 

E.                                      If
any Events of Default arising under Sections 10.01.A.(i) - (v) inclusive, (vii)
or (x) cannot reasonably be cured within thirty (30) days, Developer shall
provide Friday’s notice thereof (together with Developer’s best estimate of the
time period required to complete such cure) and immediately undertake efforts
to cure such default within the cure period, and continue such efforts with
diligence to completion.  In no event,
however, shall such cure period be extended without the prior written consent
of Friday’s.

 

F.                                      Developer
and each Principal agree that Friday’s exercise of the rights and remedies set
forth herein are reasonable.  Friday’s
may, in addition to pursuing any other remedies, specifically

 

17

 

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.

 

10.02                     A.                                   The
following shall constitute Events of Default by Friday’s: (i) failure to comply
with or perform its obligations and agreements herein, or (ii) Friday’s (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 Friday’s a similar petition
which is not dismissed within thirty (30) days.

 

B.                                     Upon
the occurrence of a Material Event of Default by Friday’s, Developer may, upon
notice to Friday’s, terminate this Agreement and all rights granted hereunder
without waiving any (i) claim for damages suffered by Developer; or (ii) other
rights, remedies or claims.  Any
termination of this Agreement by Developer other than as provided in this Section 10.02
shall be deemed a termination by Developer without cause.

 

C.                                     Developer
shall not exercise any remedies available hereunder with respect to any Events
of Default unless such Events of Default remain uncured after (i) notice from
Developer thereof and (ii) the expiration of thirty (30) days following such
notice.

 

D.                                    If
any Events of Default cannot reasonably be cured within thirty (30) days,
Friday’s shall provide Developer notice thereof (together with Friday’s best
estimate of the time period required to complete such cure) and immediately
undertake efforts to cure such default within the cure period, and continue
such efforts with diligence to completion. 
In no event, however, shall such cure period be extended without the
prior written consent of Developer.

 

10.03                     Subject to
the provisions of Section 10.06, all rights and remedies of either party
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 any
party from any liability or obligation then accrued or any liability or
obligation continuing beyond, or arising from, such expiration or
termination.  Nothing in this Agreement
shall impair either party’s right to obtain injunctive or other equitable
relief.

 

10.04                     The failure
of any party to exercise any right or remedy or to enforce any obligation,
covenant or agreement herein shall not constitute a waiver by, or estoppel of,
that party’s right to any of the remedies described herein including, without
limitation, to enforce strict compliance with any such obligation, covenant or
agreement. No custom or practice shall modify or amend this Agreement.  The waiver of, or failure or inability of any
party to enforce, any right or remedy shall not impair that party’s rights or
remedies with respect to subsequent Events of Default of the same, similar or
different nature.  The delay, forbearance
or failure of any party to exercise any right or remedy in connection with any
Event of Default or default by any other developers shall not affect, impair or
constitute a waiver of such party’s rights or remedies herein.  Acceptance of any Payment shall not waive any
Event of Default.

 

10.05                     Developer and
each Principal shall, jointly and severally, pay all costs and expenses
(including reasonable fees of attorneys and other engaged professionals)
incurred by Friday’s in successfully enforcing, or obtaining any remedy arising
from the breach of this Agreement.  The existence
of any claims, demands or actions which Developer or any Principal may have
against Friday’s, whether arising from this Agreement or otherwise, shall not
constitute a defense to Friday’s enforcement of Developer’s or any Principal’s
representations, warranties, covenants, obligations or agreements herein.

 

18

10.06                 IN
THE EVENT OF A DISPUTE BETWEEN THEM WHICH IS NOT SUBJECT TO, NOR ARISES UNDER, SECTION 12,
FRIDAY’S, DEVELOPER AND PRINCIPALS HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY,
INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFITS, BUT SPECIFICALLY EXCLUDING, HOWEVER, DAMAGES TO
THE REPUTATION AND GOODWILL ASSOCIATED WITH AND/OR SYMBOLIZED BY THE
PROPRIETARY MARKS) AGAINST THE OTHER ARISING OUT OF ANY CAUSE WHATSOEVER
(WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER
TORT OR OTHERWISE) AND AGREE THAT EACH SHALL BE LIMITED TO THE RECOVERY OF ANY
ACTUAL DAMAGES SUSTAINED BY IT.  IF ANY
OTHER TERM OF THIS AGREEMENT IS FOUND OR DETERMINED TO BE UNCONSCIONABLE OR
UNENFORCEABLE FOR ANY REASON, THE FOREGOING PROVISION SHALL CONTINUE IN FULL
FORCE AND EFFECT.

 

11.                               INSURANCE

 

A.                                   Developer
shall obtain within thirty (30) days from the date hereof and maintain
throughout the Term, such insurance coverage (including, without limitation,
auto liability coverage and workers compensation insurance) as may be (i)
required by law; or (ii) reasonably designed to protect Developer from the
risks inherent in the development activities to be engaged in by Developer
pursuant to this Agreement.  Friday’s
shall have the right to reasonably consent to the types and amounts of coverage
and the issuing companies.  Such
insurance shall:

 

(1)                                  name
the Friday’s Indemnitees as additional insured parties and provide that
coverage applies separately to each insured and additional insured party
against whom a claim is brought as though a separate policy had been issued to
each Friday’s Indemnitee;

 

(2)                                  contain
no provision which limits or reduces coverage in the event of a claim by any
one (1) or more of the insured or additional insured parties;

 

(3)                                  provide
that policy limits shall not be reduced, coverage restricted, canceled, allowed
to lapse or otherwise altered or such policy(ies) amended without Friday’s
consent, but in no event upon less than thirty (30) days prior written notice
to Friday’s;

 

(4)                                  be
obtained from reputable insurance companies with an A.M. Best Rating of “A” and
an A.M. Best Class Rating of XIV (or comparable ratings from a reputable insurance
rating service, in the event such A.M. Best ratings are discontinued or
materially altered), authorized to do business in the jurisdiction in which the
Restaurant is located; and

 

(5)                                  be
in an amount and form satisfactory to Friday’s; but in no event in amounts less
than the following:

 

(a)                                  auto
liability insurance, including coverage of owned, non-owned and hired vehicles,
with a combination of primary and excess limits of not less than Five Hundred
Thousand Dollars ($500,000.00) for bodily injury for each person, One Million
Dollars ($1,000,000.00) for bodily injury for each occurrence and Two Hundred
Fifty Thousand Dollars ($250,000.00) for each occurrence of property damage;

 

19

 

(b)                                 employer’s
liability insurance with a limit of not less than Five Hundred Thousand Dollars
($500,000.00); and

 

(c)                                  workers
compensation insurance in such amount as may be required by applicable statute
or rule.

 

B.                                     Such
insurance may provide for reasonable deductible amounts with Friday’s consent.

 

C.                                     A
certificate of insurance shall be submitted for Friday’s consent within ten
(10) days following commencement of such coverage, and additional certificates
of insurance shall be submitted to Friday’s thereafter, evidencing
uninterrupted coverage.  Developer shall
deliver a complete copy of such policy(ies) within ten (10) days of request.

 

D.                                    In
the event of a claim of any one or more of the Friday’s Indemnitees against
Developer, Developer shall, on request of Friday’s, assign to Friday’s any and
all rights which Developer then has or thereafter may have with respect to such
claim against the insurer(s) providing the coverage described in this Section.

 

E.                                      Developer’s
obligation to obtain and maintain insurance or to indemnify any Friday’s
Indemnitee shall not be limited by reason of any insurance which may be
maintained by any Friday’s Indemnitee, nor shall such insurance relieve
Developer of any liability under this Agreement.  Developer’s insurance shall be primary to any
policies maintained by any Friday’s Indemnitee.

 

F.                                      If
Developer fails to obtain or maintain the insurance required by this Agreement,
as such requirements may be revised from time to time, Friday’s may acquire
such insurance, and the cost thereof, together with a reasonable fee for Friday’s
expenses in so acting and interest at eighteen percent (18%) per annum from the
date acquired, shall be payable by Developer upon notice.

 

12.                               INDEMNIFICATION

 

A.                                   Developer
and each Principal will, at all times, indemnify and hold harmless, to the
fullest extent permitted by law, Friday’s 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, mark 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 Friday’s 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.

 

20

 

(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 Friday’s immediate notice of any such action,
suit, proceeding, claim, demand, inquiry or investigation.

 

C.                                     Friday’s
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.  Friday’s 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 Friday’s Indemnitees for attorneys’ fees,
expenses, and costs incurred in connection with the exercise of Friday’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 Friday’s exercise of its rights under Section 12 actually
results in Developer’s insurer with respect to insurance required to be
maintained by Developer pursuant to Section 11 (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 Friday’s without the need for any further action on Friday’s or Developer’s
part.  For the purposes of Section 12,
“actually results” means that, but for Friday’s exercise of its rights under Section 12,
the Insurer would not have refused to pay on said third-party claim.

 

F.                                      In
the event that Friday’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 Friday’s for the latter’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 Friday’s for the latter’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 Friday’s 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, Friday’s 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 Friday’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.

 

21

 

J.                                        In
addition to their indemnity obligations under Section 12.D., Developer and
each Principal shall indemnify Friday’s for any and all losses, compensatory
damages, exemplary or punitive damages, fines, charges, costs, expenses, lost profits,
settlement amounts, judgments, compensation for damages to Friday’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.                                    Friday’s
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 Friday’s for all losses and expenses which
may arise out of any acts, errors or omissions of these third parties.

 

L.                                      Under
no circumstances shall Friday’s 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 loss will in no way reduce the amounts recoverable by
Friday’s from Developer or any Principal.

 

M.                                 Notwithstanding
anything to the contrary contained in this Agreement, Developer is not required
to indemnify Friday’s with regard to any infringement, alleged infringement or
other violation or alleged violation by Developer or any Principal of any
patent, mark, 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 Friday’s pursuant to this Agreement. 
In the event Developer is involved in such an action, Friday’s agrees to
indemnify Developer Indemnitees in connection with the defense thereof, and to
indemnify and hold Developer Indemnitees 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 Friday’s 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 extent that failure to have timely
provided such notice to Friday’s materially impairs Friday’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
Friday’s 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 Friday’s 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, facsimile or certified mail, return receipt requested to the following
addresses (or such other addresses as designated pursuant to this Section 13):

 

	
  if to Friday’s:

  	
   

  	
  TGI Friday’s
  Inc.

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  4201 Marsh Lane

  
	
   

  	
   

  	
  Carrollton,
  Texas 75007

  
	
   

  	
   

  	
  Facsimile No.:
  (972) 662-5636

  

 

22

 

	
  if to Developer
  or any Principal:

  	
   

  	
  Main St.
  California, Inc.

  
	
   

  	
   

  	
  Attention: Bill
  Shrader

  
	
   

  	
   

  	
  5050 North 40th
  Street, Suite 200

  
	
   

  	
   

  	
  Phoenix, Arizona
  85018

  
	
   

  	
   

  	
  Facsimile No.:
  (602) 852-0001

  

 

Notices
posted by personal delivery, expedited service or given by facsimile shall be
deemed given the next business day after transmission.  Notices posted by certified mail shall be
deemed received three (3) Business Days after the date of posting.  Any change in the foregoing addresses shall
be effected by giving fifteen (15) days written notice of such change to the
other party.

 

14.                               FORCE
MAJEURE

 

No
party shall be liable for any inability to perform resulting from acts of God
or other causes (other than financial inability or insolvency) beyond their
reasonable control; provided, however, that nothing herein shall excuse or
permit any delay or failure (i) to remit any Payment on the date due; or (ii)
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 Friday’s reasonable judgment,
Friday’s ability to realize the principal purpose of the Agreement or preserve
its or TGIFM’s rights in, or the goodwill underlying, the Proprietary Marks,
the System, or the Confidential Information, Friday’s 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.  Friday’s
does not operate the Developer’s business. 
Nothing herein shall create the relationship of principal and agent,
legal representative, joint ventures, 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 Friday’s name.

 

23

 

17.                               DUE DILIGENCE AND ASSUMPTION OF RISK

 

A.                                   Developer
and each Principal (i) have conducted such due diligence and investigation as
each 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 Principals.  FRIDAY’S EXPRESSLY
DISCLAIMS THE MAKING OF, AND DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE THAT THEY
HAVE 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 understand 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 to this Agreement.

 

B.                                     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),
the provision for liquidated damages contained in Section 10.01.C.(3), and
the rights and remedies provided for in Exhibit B.

 

C.                                     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
(1) and the same instrument.

 

D.                                    All
references herein to the masculine, neuter or singular shall be construed to
include the masculine, feminine, neuter or plural, unless otherwise suggested
by the text.

 

E.                                      This
Agreement will become effective only upon execution hereof by the President or
a vice president of Friday’s.

 

F.                                      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.

 

G.                                     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.

 

H.                                    Developer
and each Principal acknowledge that each has received a complete copy of this
Agreement, the documents referred to herein and the Exhibits and Addenda hereto
at least five (5) business days prior to the date on which this Agreement was
executed.  Developer and each Principal
further acknowledge that each has received the disclosure document required by
the Trade Regulation Rule of the Federal Trade Commission entitled “Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures” at least ten (10) business days prior to the date on which this
Agreement was executed.

 

24

 

19.                               CHOICE
OF LAW; JURISDICTION; VENUE

 

A.                                    DEVELOPER AND EACH PRINCIPAL ACKNOWLEDGE THAT FRIDAY’S MAY GRANT
DEVELOPMENT RIGHTS THROUGHOUT THE UNITED STATES ON TERMS AND CONDITIONS SIMILAR
IN CERTAIN MATERIAL RESPECTS TO THOSE SET FORTH IN THIS AGREEMENT, AND THAT IT
IS OF MUTUAL BENEFIT TO DEVELOPER AND EACH PRINCIPAL AND TO FRIDAY’S THAT THESE
TERMS AND CONDITIONS BE UNIFORMLY INTERPRETED. 
THEREFORE, THE PARTIES AGREE THAT TO THE EXTENT THE LAW OF THE STATE OF
TEXAS IS HELD ENFORCEABLE, TEXAS LAW SHALL APPLY TO THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT (EXCEPT FOR TEXAS CHOICE OF LAW RULES) AND SHALL
GOVERN ALL QUESTIONS WHICH ARISE WITH REFERENCE HERETO.

 

B.                                    THE
PARTIES ACKNOWLEDGE THAT THIS AGREEMENT SHALL BE PERFORMED IN SUBSTANTIAL PART
IN DALLAS COUNTY, TEXAS.  THE PARTIES
THEREFORE AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PERFORMANCE THEREOF WHICH CANNOT BE AMICABLY
SETTLED, EXCEPT AS OTHERWISE PROVIDED HEREIN, SHALL BE RESOLVED BY A PROCEEDING
IN A COURT IN DALLAS COUNTY, TEXAS, AND DEVELOPER AND PRINCIPALS EACH
IRREVOCABLY ACCEPT AND SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS AND THE FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS FOR SUCH CLAIMS,
CONTROVERSIES OR DISPUTES; PROVIDED, HOWEVER, WITH RESPECT TO ANY
ACTION WHICH INCLUDES INJUNCTIVE RELIEF, OR ANY ACTION FOR THE RECOVERY OF ANY
PROPERTY, REAL OR PERSONAL, FRIDAY’S MAY BRING SUCH ACTION IN ANY STATE WHICH
HAS JURISDICTION.

 

20.                               ENTIRE
AGREEMENT

 

This
Agreement and the Exhibits, Addenda and Schedules hereto constitute the entire
agreement between Friday’s, 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 CONCERNING THE SUBJECT MATTER HEREOF,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED COVENANT OF GOOD FAITH AND FAIR
DEALING, EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT.  EXCEPT THOSE PERMITTED TO BE MADE
UNILATERALLY BY FRIDAY’S HEREUNDER, NO AMENDMENT, CHANGE OR VARIANCE FROM THIS
AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED TO BY FRIDAY’S
AND DEVELOPER AND EXECUTED IN WRITING.

 

IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
on the day and year first above written.

 

	
  TGI
  FRIDAY’S INC.

  	
   

  	
  MAIN
  ST. CALIFORNIA, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Leslie
  Sharman

  	
   

  	
   

  	
  By:

  	
  /s/William G.
  Shrader

  	
   

  
	
  Name:

  	
  Leslie Sharman

  	
   

  	
   

  	
  Name:

  	
  William G.
  Shrader

  	
   

  
	
  Title:

  	
  Sr. Vice President-General
  Counsel

  	
   

  	
  Title:

  	
  President-CEO

  	
   

  
	
  Date:

  	
  March 15,
  2004

  	
   

  	
   

  	
  Date:

  	
  March 11,
  2004

  	
   

  
											

 

25

 

Each
Principal acknowledges, covenants and represents as follows:

 

(1)                                  each
has read the terms and conditions of this Agreement;

 

(2)                                  each
is a “Principal” as described in this Agreement;

 

(3)                                  each
is the owner of and has the right to vote the percent of the Securities of
Developer indicated next to the signature below of each Principal;

 

(4)                                  each
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, non-compete and maintenance of Confidential Information) and is
obligated to perform thereunder;

 

(5)                                  each
individually, jointly and severally, irrevocably and unconditionally guarantees
that all of Developer’s obligations under the terms and conditions of this
Agreement will be timely paid and performed;

 

(6)                                  each
acknowledges that Friday’s may, without notice to Principals, waive, renew,
extend, modify, amend or release any indebtedness or obligation of Developer,
or settle, adjust, or compromise any claims against Developer;

 

(7)                                  each
waives all demands and notices of every kind with respect to this guaranty
including, without limitation, notice of presentment, demand for payment or
performance by Developer, any default by Developer or any guarantor, and any
release of any guarantor or other security for this Agreement or the
obligations of Developer.  Friday’s may
pursue its rights against Developer’s Principals without first exhausting its
remedies against Developer and without joining any other guarantor hereto, and
no delay on the part of Friday’s in the exercise of any right or remedy shall
operate as a waiver of such right or remedy;

 

(8)                                  each
has derived and expects to derive financial or other benefit, directly or
indirectly, from this Agreement and the transaction described herein;

 

(9)                                  each
acknowledges that its execution of this Agreement, and its undertakings and
agreements herein, has induced Friday’s to enter into the transactions
described in, and to execute, this Agreement;

 

(10)                            each
consents to and shall be bound by any amendment of this Agreement made by
Friday’s and Developer pursuant to the terms hereof; and

 

(11)                            each
has executed, concurrent herewith, the Guaranty Agreement on Exhibit B.

 

	
  PRINCIPAL

  	
   

  	
  Securities

  Voting%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MAIN
  STREET AND MAIN INCORPORATED

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William G.
  Shrader

  	
   

  	
   

  	
  100

  	
  %

  
	
  Name:

  	
  William G.
  Shrader

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President-CEO

  	
   

  	
   

  	
   

  	
   

  
									

 

26

 

ADDENDUM
A TO DEVELOPMENT AGREEMENT

 

COVENANT AND AGREEMENT FOR CONFIDENTIALITY

 

This
agreement (“Agreement”) is made by Main Street and Main Incorporated, a
corporation organized under the laws of the state of Delaware (“Principal”),
and TGI Friday’s Inc., a corporation organized under the laws of the state of
New York (“Friday’s”), in connection with that certain Development Agreement
dated March 15, 2004 (the “Development Agreement”), by and between Friday’s
and Main St. California, Inc. (“Developer”).

 

WHEREAS,
Friday’s and Developer have entered into the Development Agreement; and

 

WHEREAS,
the Confidential Information provides economic advantages to Friday’s and is
not generally known to, and not legally available to, third parties; and

 

WHEREAS,
Friday’s 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 Friday’s agree as follows:

 

1.                                       Capitalized
terms used herein and not otherwise defined shall have the meanings attributed
to them in the Development Agreement.

 

2.                                       Friday’s
shall disclose to Principal some or all of the Confidential Information which
may be utilized by Principal solely (a) in his 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 Friday’s
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 Friday’s or TGIFM’s ownership
of, or interest in, the Confidential Information, the System or the Proprietary
Marks.

 

3.                                       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, Friday’s, 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 Friday’s, be (i) copied, (ii)
compiled (in total or in part) with other information, or (iii) disclosed to
any third party.

 

4.                                       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

 

1

 

disclosed to Principal’s
agents, consultants, contractors 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.  Prior to such disclosure of any Confidential
Information, each of such agents, consultants, contractors and employees shall
(a) be advised by Principal of the confidential and proprietary nature of the
Confidential Information and (b) agree to be bound by the terms and conditions
of this Agreement.  Notwithstanding such
agreement, Principal shall indemnify the Friday’s Indemnitees from and against
any damages, costs (including reasonable fees of attorneys and other engaged
professionals) 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.

 

5.                                       In
the event Principal or Principal’s agents, representatives, or employees
receive notice of any request, demand or order to transfer or disclose all or
any portion of the Confidential Information, Principal shall immediately notify
Friday’s thereof, and shall fully cooperate with and assist Friday’s in
prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Principal shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

6.                                       Immediately
upon Friday’s request or upon any termination or expiration of the Term,
Principal shall return the Confidential Information including, without
limitation, 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, and any copies thereof.

 

7.                                       Each
of the representations, warranties, covenants, acknowledgments and agreements
of Principal, and the rights and remedies of Friday’s 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 of the Development
Agreement, are incorporated in this Agreement by reference as if fully set
forth.  In connection with Friday’s
enforcement of such rights and remedies (or other rights and remedies of Friday’s
under this Agreement), any court of competent jurisdiction selected by Friday’s
shall have personal jurisdiction over Principal, to which jurisdiction
Principal irrevocably consents.  The
parties agree that to the extent the law of the State of Texas is held
enforceable, Texas law shall apply to the interpretation and construction of
this Agreement (except for Texas choice of law rules) and shall govern all
questions which arise with reference hereto.

 

8.                                       Friday’s
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 Friday’s right to obtain equitable relief.

 

9.                                       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.

 

10.                                 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.

 

2

 

11.                                 Principal
acknowledges and warrants that he 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.

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties on the dates
indicated below.

 

	
  TGI
  FRIDAY’S INC.

  	
   

  	
  MAIN
  STREET AND MAIN INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Leslie
  Sharman

  	
   

  	
   

  	
  By:

  	
  /s/William G.
  Shrader

  	
   

  
	
  Name:

  	
  Leslie Sharman

  	
   

  	
   

  	
  Name:

  	
  William G.
  Shrader

  	
   

  
	
  Title:

  	
  Sr. Vice
  President-General Counsel

  	
   

  	
  Date:

  	
  March 11,
  2004

  	
   

  
	
  Date:

  	
  March 15,
  2004

  	
   

  	
   

  	
   

  	
   

  	
   

  
														

 

3

 

ADDENDUM
B TO DEVELOPMENT AGREEMENT

 

COVENANT AND AGREEMENT FOR CONFIDENTIALITY

 

This
agreement (“Agreement”) is made by [Employee’s Name], an individual
residing in the state of                
(“Employee”), Main St. California, Inc., a corporation organized under
the laws of the State of Arizona (“Developer”), in connection with that certain
Development Agreement dated                 ,
2004 (the “Development Agreement”), by and between TGI Friday’s Inc. (“Friday’s”)
and Developer.

 

WHEREAS,
Friday’s and Developer have entered into the Development Agreement; and

 

WHEREAS,
the Confidential Information provides economic advantages to Friday’s, and is
not generally known to, and is not legally available to, third parties; and

 

WHEREAS,
Friday’s 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 and Developer agree as follows:

 

1.                                       Capitalized
terms used herein and not otherwise defined shall have the meanings attributed
to them on Annex A hereto.

 

2.                                       Developer
or Friday’s, acting on behalf of Developer, shall disclose to Employee some or
all of the 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 Friday’s
or TGIFM is the exclusive owner of the Confidential Information, the System and
the Proprietary Marks.  Employee shall
not, directly or indirectly, contest of impair Friday’s or TGIFM’s ownership
of, or interest in, the Confidential Information, the System or the Proprietary
Marks.

 

3.                                       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, Friday’s, TGIFM or Developer.  Except as permitted

 

1

 

pursuant to this
Agreement, the Confidential Information shall not, without the prior written
consent of Friday’s, be (i) copied, (ii) compiled (in total or in part) with
other information, or (iii) disclosed to any third party.

 

4.                                       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. 
Prior to such disclosure of any Confidential Information, each such
employee shall (i) be advised by Employee of the confidential and proprietary
nature of the Confidential Information and (ii) agree to be bound by the terms
and conditions of this Agreement.

 

5.                                       In
the event Employee receives notice of any request, demand, or order to transfer
or disclose all or any portion of the Confidential Information, Employee shall
immediately notify Developer thereof, and shall fully cooperate with and assist
Friday’s in prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be
required by a valid, final, non-appealable court order, Employee shall fully
cooperate with and assist Friday’s in protecting the confidentiality of the
Confidential Information to the maximum extent permitted by law.

 

6.                                       Immediately
upon Friday’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 the Confidential Information
including, without limitation, 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, and any copies
thereof, to Developer or Friday’s.

 

7.                                       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 one (1) year 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 Friday’s
or Developer, (ii) by any developer or franchisee of Friday’s, 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 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 radius of three (3) miles of any
restaurant which is a part of any concept or system owned, operated or
franchised by Friday’s or any Affiliate.

 

8.                                       In
connection with the enforcement of rights and remedies under this Agreement,
any court of competent jurisdiction selected by Developer or Friday’s shall
have personal jurisdiction over Employee, to which jurisdiction Employee
irrevocably consents.  THE PARTIES AGREE THAT TO THE EXTENT THE LAW OF THE STATE OF TEXAS IS
HELD ENFORCEABLE, TEXAS

 

2

 

LAW SHALL
APPLY TO THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT (EXCEPT FOR
TEXAS CHOICE OF LAW RULES) AND SHALL GOVERN ALL QUESTIONS WHICH ARISE WITH
REFERENCE HERETO.

 

9.                                       A.                                   Employee
acknowledges and agrees that (i) Friday’s is a third party beneficiary to this
Agreement and (ii) Friday’s exercise of the rights and remedies set forth
herein is reasonable.

 

B.                                     Developer
or Friday’s 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 Developer’s or Friday’s right to obtain equitable
relief.

 

C.                                     With
respect to Employee’s breach of the covenants contained in Section 7.A
hereof, the affected former employer shall be compensated by Employee 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 to the former employer at such time
as such employee commences employment.

 

10.                                 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.

 

11.                                 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.

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties on the dates
indicated below.

 

	
  [Employee]

  	
   

  	
  MAIN
  ST. CALIFORNIA, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
							

 

3

 

Annex A to Covenant and Agreement for
Confidentiality

 

Affiliate
– Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any
subsidiary of TGI Friday’s Inc.

 

Commencement Date
-                    ,
2004.

 

Competing Business
- a restaurant or bar/restaurant business offering the same or similar products
and services as offered by restaurants in the System or restaurants in any
other concept or system owned, operated or franchised by Friday’s or any
Affiliate, including, without limitation, waiter/waitress service, sit-down
dining and bar services.

 

Confidential
Information - the System, the Development Manual, the
Manuals, other manuals, the Standards, written directives and all drawings,
equipment, recipes, computer and point of sale programs (and output from such
programs); and any other information, know-how, techniques, materials and data
imparted or made available by Friday’s which is (i) designated as confidential,
(ii) known by Developer or Employee to be considered confidential by Friday’s,
or (iii) by its nature inherently or reasonably considered confidential.

 

Development Manual
- Friday’s manual, as amended from time to time, describing (generally) the
procedures and parameters required for the development of T.G.I. Friday’s®
Restaurants in the United States.

 

Indemnitees
- Friday’s, its directors, officers, employees, agents, shareholders,
affiliates, successors and assigns and the respective directors, officers,
employees, agents, shareholders and affiliates of each.

 

Manuals
- Friday’s confidential operating manuals, as amended from time to time by
Friday’s, which contain the instructions, requirements, Standards,
specifications, methods and procedures for the operation of the Restaurants
including (i) those relating to the selection, purchase, service and sale of
all products being sold at the Restaurants, (ii) those relating to the
maintenance and repair of the Restaurants, buildings, grounds, equipment, signs,
interior and exterior decor items, fixtures and furnishings and (iii) those
relating to employee apparel and dress, accounting, bookkeeping, record
retention and other business systems, procedures and operations.

 

Proprietary Marks
- certain trademarks, trade names, service marks, emblems and indicia of origin
designated by Friday’s from time to time in connection with the operation of
Restaurants pursuant to the System in the Territory, including, without
limitation, “TGI Friday’s®”, “Friday’s®” and “The American
Bistro®”.

 

Restaurant(s)
- a T.G.I. Friday’s® Restaurant(s) developed pursuant to the
Development Agreement.

 

Standards
- the standards and specifications, as amended from time to time by Friday’s,
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 Friday’s (which may be
modified or further developed from time to time by Friday’s) for the establishment
and operation of full-service restaurants under the Proprietary Marks, which
includes, without limitation, a distinctive image consisting of exterior and
interior design, decor, color scheme and furnishings; special recipes, menu

 

1

 

items and full service
bar; employee uniform standards, products, services and specifications;
procedures with respect to operations and inventory and management control;
training and assistance; and advertising and promotional programs.

 

Term
- the duration of the Development Agreement, commencing on the Commencement
Date and continuing until                  ,
20   , unless sooner terminated.

 

Territory
- the geographical area described and set forth in Exhibit C.

 

TGIFM
- TGI Friday’s of Minnesota Inc., a Minnesota corporation and a subsidiary of
Friday’s.

 

T.G.I. Friday’s®
Restaurants - restaurants operated in accordance with the
System under the Proprietary Marks.

 

2

 

EXHIBIT B TO DEVELOPMENT AGREEMENT

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (the “Guaranty”) is made as of
the      day of                         ,
2004, by the undersigned (hereinafter referred to individually and collectively
as “Guarantors” whether one or more) in favor of TGI Friday’s Inc., a New York
Corporation (“Friday’s”).

 

WHEREAS,
Friday’s, Main St. California, Inc., and certain other individuals and/or
entities entered into that certain Development Agreement dated                   ,
2004 (the “Development Agreement”) regarding the development of T.G.I. Friday’s®
restaurants located in certain territory stated therein (the “Restaurant”);

 

WHEREAS,
as an inducement to Friday’s to enter into the Development Agreement, the
undersigned Guarantors have agreed to make and deliver this Guaranty to Friday’s.

 

NOW
THEREFORE, FOR VALUE RECEIVED, Guarantors, jointly and severally, if more than
one, hereby acknowledge and agree as follows:

 

1.                                       Each
has read the terms and conditions of this Guaranty and of the Development
Agreement.

 

2.                                       Each
is a “Principal” as defined in the Development Agreement.

 

3.                                       Each
makes all of the representations, warranties, covenants and agreements of the
Developer (including liability to make Payments) and a Principal set forth in
the Development Agreement (including, without limitation, the covenants and
agreements concerning Transfer, non-compete and maintenance of Confidential
Information) and is obligated to perform thereunder.

 

4.                                       Each
acknowledges that Friday’s may, without notice to Guarantors and without
affecting the obligations of any of the Guarantors under this Guaranty, waive,
renew, extend, modify, amend or release any indebtedness or obligation of
Developer, or settle, adjust, or compromise any claims against Developer;

 

5.                                       Each
waives all demands and notices of every kind with respect to this Guaranty
including, without limitation, notice of presentment, demand for payment or
performance by Developer, notice of any default by Developer or any Guarantor,
and any release of any Guarantor or other security for the Development
Agreement or the obligations of Developer. 
Friday’s may pursue its rights against Guarantors without first
exhausting its remedies against Developer and without joining any other
Guarantor hereto, and no delay on the part of Friday’s in the exercise of any
right or remedy shall operate as a waiver of such right or remedy;

 

6.                                       Each
individually, jointly and severally, irrevocably and unconditionally guarantees
that all of Developer’s obligations under the terms and conditions of the
Development Agreement will be timely paid and performed;

 

7.                                       Each
has derived and expects to derive financial or other benefit, directly or
indirectly, from the Development Agreement and the transaction described therein;

 

1

 

8.                                       Each
acknowledges that its execution of the Development Agreement, and its
undertakings and agreements herein, have induced Friday’s to enter into the
transactions described in, and to execute, the Development Agreement.

 

9.                                       Each
consents to and shall be bound by any amendment of the Development Agreement
made by Friday’s and Developer pursuant to the terms thereof.

 

 

	
  GUARANTOR

  
	
   

  
	
  MAIN
  STREET AND MAIN INCORPORATED

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

2

 

EXHIBIT C TO DEVELOPMENT AGREEMENT

 

THE TERRITORY

 

Southern
California Territory – that area contained in the following
counties:  Imperial, Inyo, Kern, Los
Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and
Ventura.

 

1

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