Long John Silvers, Inc. v. Willingham et al
Filing
1
COMPLAINT against All Defendants Filing fee $ 350, receipt number 644-1280591., filed by Long John Silvers, Inc.. (Attachments: # 1 Cover Sheet, # 2 Exhibit A. Oracle Fran Ag part 1 & 2, # 3 Exhibit B. Broadway Fran Ag part 1 & 2, # 4 Exhibit C. Guaranty Agreements, # 5 Exhibit D. Conditional Reinstatement, # 6 Exhibit E. Default Ltrs, # 7 Exhibit F. Termination Ltr, # 8 Exhibit G. Bankruptcy Desist Ordr, # 9 Exhibit H. LJS Trademarks, # 10 Summons J. Willingham, # 11 Summons P. Willingham) (JSS)
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CONDITIONAL
REINSTATEMENT
AGREEMENT
This Conditional Reinstatement Agreement (this "Agreement") is dated for reference
purposes as of June iL, 2010, and is executed by and between LONG JOHN SILVER'S, INC., a
corporation with its principal place of business at 1441 Gardiner Lane, Louisville, KY 40213
("Franchisor"), SOUTHWEST SEAFOOD SHOPPES, LLC, a limited liability company with its
principal place of business at 4321 N. Bear Claw Way, Tucson, Arizona 85749 ("Franchisee"),
and JOHN WILLINGHAM, an individual with an address c/o Franchisee ("Guarantor").
Recitals:
A.
Franchisor and Franchisee executed six (6) Franchise Agreements, each
governing the operations ofa Long John Silver's restaurant (collectively, the "Restaurants",
hereinafter further defined) at the locations set forth on Exhibit A annexed to this Agreement
(together with all amendments thereto, including without limitation amendment by Letter
Agreement dated as of September 28, 2009, the "Franchise Agreements", hereinafter further
defined).
'
B.
Guarantor has executed and delivered to Franchisor guaranties
performance under each of the Franchise Agreements (the "Guaranties").
of the Franchisee's
C.
Franchisee defaulted under the Franchise Agreements by failing to pay royalties
and advertising contributions due thereunder, entitling Franchisor to a variety of remedies under
the Franchise Agreements and Guaranties, and Franchisor, by the letters described on Exhibit B
attached hereto (the "Default Letters") provided to the Franchisee and Guarantor due notice of
default and opportunity to cure such defaults as required by the Franchise Agreements and
applicable law.
D.
After expiration of the applicable cure periods as referenced in the Default
Letters, Franchisor, by letter dated March 31, 2010 ("Termination'Letter"), terminated the
Franchise Agreements.
E.
Franchisee, as of approximately April 2010, closed and ceased operations at
Restaurant #7723, located at 1297 E. Fry Boulevard, Sierra Vista, Arizona (the "Sierra Vista
Restaurant", with the defined terms "Restaurants" and "Franchise Agreements" including the
Sierra Vista Restaurant and the franchise agreement governing its operations unless the context
clearly requires otherwise).
F. ,
Franchisee and Guarantor have requested that Franchisor: forbear from enforcing
its remedies under the Franchise Agreements and Guaranties; reinstatethe Franchise
Agreements; allow Franchisee to continue operations at the Restaurants (excluding the Sierra
Vista Restaurant); and accept repayment of unpaid royalties and other sums over time, and
Franchisor has agreed to do so on the terms and conditions set forth in this Agreement.
ACCORDINGLY, in consideration of the promises and the representations,
covenants and agreements hereinafter set forth, the parties agree as follows:
warranties,
ARTICLE
I
DEFINITIONS
1.1
Definitions.
(a)
Capitalized terms used without definition herein shall have the respective
meanings ascribed to them in the Franchise Agreements and the Guaranties.
(b)
An "affiliate" of any person means another person or entity that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, such first person or entity.
ARTICLE
STATUS OF FRANCHISE
II
AGREEMENTS
AND GUARANTIES
2.1
Acknowledgement of Indebtedness to Franchisor. Franchisee and Guarantor
acknowledge and agree they are indebted to Franchisor and its affiliates as of the date of this
Agreement in the amounts set forth of Exhibit C attached hereto.
2.2
Acknowledgement of Default and Termination. Franchisee and Guarantor
acknowledge and agree that (a) Franchisee has defaulted, and remains in default, under the
Franchise Agreements as outlined in Franchisor's Default Letters (the "Defaults"); (b)
Franchisor has properly and effectively terminated the Franchise Agreements in accordance with
their terms and applicable law pursuant to the Termination Letter (the "Termination"); (c)
Franchisor is entitled to exercise any and all rights and remedies available under the Franchise
Agreements, Guaranties and/or applicable law in connection with such Defaults and Franchisor
is entitled to enforce the Terminations; (d) Franchisee and Guarantor have received (or to the
extent they have not received, hereby waive any right to receive) any and all notices and
opportunities to cure the Defaults due under the Franchise Agreements, Guaranties, and/or
applicable law and any and all notices needed to effect the Termination; (e) Franchisee and
Guarantor represent they have no offsets or defenses to, against or in connection with the
Defaults or Termination or under any Franchise Agreement or the Guaranty, and each of
Franchisee and Guarantor hereby knowingly waives any and all such defenses and offsets; and
(f) neither Franchisor nor any person or entity purporting to act on its behalf has made any
representation or offer in respect of the modification, amendment or reinstatement of the
Franchise Agreements, withdrawal or rescission of the Terniination or cure of the Defaults.
ARTICLE
III
DISCUSSIONS
3.1
No Prejudice from Discussions. Guarantor
Franchisor and discuss and provide information regarding
business relating to the Restaurants. All such discussions,
connection therewith relating to the Franchise Agreements
. the date of this Agreement shall be privileged and without
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and Franchisee shall cooperate with
any and all aspects of the Franchisee's
meetings, and communications in
and occurring either before or after
prejudice to any party to this
"
Agreement, and without exception, shan constitute settlement negotiations which shall not be
introduced or admissible as evidence in any administrative, judicial or other proceeding without
the express written consent of all of the parties to this Agreement. No action or proceeding of
any kind (whether legal or equitable, whether based in tort, contract, or otherwise) may be
brought by any of the parties to this Agreement against anyone based upon or relating to any
discussions undertaken with reference to this Agreement.
3.2
No Obligations to Negotiate. Franchisee and Guarantor acknowledge and agree
that Franchisor does not have any obligation to modify, amend or enter into negotiations with
respect to the Franchise Agreements or the Guaranties. Franchisor may terminate or withdraw
from discussions at any time and for any reason if it so elects, without notice or liability to any
other party.
3.3
Only Written Agreements and Amendments. None ofthe parties shall be bound
by or rely upon any agreement on any issues until (a) agreement is reached on all issues, and (b)
the agreement on all issues has been reduced to a written agreement, signed and delivered by an
authorized representative of each of the parties to this Agreement. Furthermore, in order to
avoid any confusion or misunderstanding, each of the parties agrees that this Agreement may
only be amended in writing, signed by Franchisee, Guarantor and Franchisor. Nothing in this
Agreement shall be' construed to impose any duty or obligation whatsoever upon any party to
negotiate or enter into a settlement or agreement.
3.4
No Waivers or Estoppel. Franchisee and Guarantor agree that no failure to
exercise and no delay in exercising any rights, remedies and powers under the Franchise
Agreements or Guaranties or otherwise available at law or in equity shall operate as a waiver of
any such rights, remedies or powers.
ARTICLE IV
FRANCHISEE REPRESENTATIONS
AND WARRANTIES
4.1
Authority; Non-Contravention.
Franchisee has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the transactions
contemplated
hereby.
4.2
Use of Counsel. Franchisee acknowledges and represents that it (i) has fully and
carefully read this Agreement prior to signing it, (ii) has been, or has had the opportunity to be,
advised by independent legal counsel of its own choice at its own expense as to the legal effect
and meaning of each of the terms and conditions of this Agreement, and (iii) is signing and
entering into this Agreement as a free and voluntary act without duress.
ARTICLE V
FRANCHISEE'S OBLIGATIONS
5.1
to causeeach
Conditions. Franchisee and Guarantor jointly and severally agree to perform and
other to perform each of the following, TIME BEING OF THE ESSENCE in all
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respects, with each of the following constituting independent conditions precedent to
Franchisor's performance under this Agreement:
(a)
Franchisee and Guarantor shall execute and deliver to Franchisor the
Promissory Note that is attached hereto as Exhibit D (the "Note") and shall timely and fully pay
as and when due any and all amounts owing under the Franchise Agreements and the Note in
strict accordance with their terms.
(b)
Franchisee and Guarantor shall timely and fully comply with all of its
other obligations under the Franchise Agreements, including all non-monetary and operational
covenants (i.e., all obligations and undertakings to be performed under the Franchise Agreements
which by their terms call for performance by means other than by the payment of money, even
though nonperformance might be cured by the payment of money).
(c)
Franchisee and Guarantor shall at their sole cost and expense de-identify
the Sierra Vista Restaurant and perform all post-termination covenants under the Franchise
Agreement applicable to the Sierra Vista Restaurant on or prior to thirty (30) days following the
date of this Agreement. Franchisee and Guarantor shall on or prior to such date: (i) confirm in
writing to Franchisor that they have timely and fully complied with such covenants; and (ii)
provide to Franchisor photographic or other evidence acceptable to Franchisor substantiating
such performance.
(d)
Franchisee shall purchase and contract for the distribution within the
Tucson market of at least twelve (12) (one (1) per month) Long John Silver's print
advertisements per year for the duration of the term of the Franchise Agreements and any
renewals thereof. Franchisor must approve all print advertisements in advance pursuant to the
terms of the Franchise Agreements. Franchisee shall provide Franchisor with paid media
invoices, publication affidavits, tear sheets, postal receipts andlor such other backup
documentation as Franchisor shall reasonably request to establish it has complied with the
foregoing requirements. Franchisee's payment for the print advertisements shall be entirely
"out-of-pocket" and shall not be paid for nor reimbursed by any advertising contribution
payments made by Franchisee under Section 6.02(a) of the Franchise Agreements and shall not
be credited within nor accounted for per Franchisor'S "Client Statement" advertising budget
accounting convention.
(e)
Commencing on January 1,2012 and continuing thereafter for the
durationof the term of the Franchise Agreements and any renewals thereof, Franchisee shall
purchase and contract for the airing of local television advertisements for its Long John Silver's
business in and for the Tucson market, and Franchisee shall spend at least three percent (3%) of
its Gross Receipts per year from each Restaurant for such media purchases. Franchisee shall
provide Franchisor with paid media invoices, station affidavits, scripts andlor such other backup
documentation as Franchisor shall reasonably request to establish it has complied with the
foregoing requirements. Franchisor must approve all television advertisements in advance
pursuant to the terms of the Franchise Agreements. Franchisee's payment for the local television
advertisements shall be entirely "out-of-pocket" and shall not be paid for nor reimbursed by any
advertising contribution payments made by Franchisee under Section 6.02(a) of the Franchise
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Agreements and shall not be credited within nor accounted for per Franchisor's
Statement" advertising budget accounting convention.
"Client
(f)
Franchisee shall not commence any judicial proceedings against or
involving Franchisor, including arbitration or mediation.proceedings, or formal or informal
proceedings for the dissolution or rehabilitation of Franchisee.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1
Forbearance; Royalty and Advertising Reduction. Subject to the terms of this
Agreement and so long as Franchisee and Guarantor shall have complied with those terms,
Franchisor agrees as follows, but only until the date upon which any of the conditions and
obligations set forth in Section 5.1 above is not satisfied by the date required:
(a)
Franchisor shall conditionally reinstate the Franchise Agreements
excluding, however, the franchise agreement for the Sierra Vista Restaurant, under which
Franchisee remains obligated to perform post-termination covenants.
(b)
Franchisor shall forbear from commencing any judicial proceedings to
enforce the prior Terminations of the Franchise Agreements.
(c)
The parties agree that:
(i)
the Franchise Agreements shall be deemed amended so that
coinmencing with the royalty payment due under Section 6.01(a) of the Franchise Agreements
on July 20, 2009, and continuing through the payment due on July 20, 2010, inclusive ("Royalty
Reduction Period"), the royalty rate shall be reduced from five percent (5%) to four percent (4%)
of Franchisee's Gross Receipts as defined in Section 6.03 of the Franchise Agreements.
Franchisor shall, upon Franchisee's request, consider extending the Royalty Reduction Period in
six (6)-month increments. Franchisee and Guarantor acknowledge and agree that any extension
of the royalty Reduction Period shall be in Franchisor's sole discretion. Franchisor's agreement
to reduce the royalty rate for the Royalty Reduction Period and to consider extending that Period
is conditioned upon the Franchisee having complied with all of its monetary and nonmonetary
covenants under the Franchise Agreements and this Agreement.
(ii)
The parties acknowledge and agree that the foregoing amendment
gives retroactive effect to the amendatory language in Paragraph 1 of the Letter Agreement dated
September 28, 2009 and ratifies Franchisee's payment of areduced royalty commencing on July
20, 2009, rather than October 20, 2009 as per the Letter Agreement, and it extends the royalty
Reduction Period through July 20, 2010 rather than having it expire on March 20, 2010 as per
the Letter Agreement.
(d)
The parties further agree that:
(i)
the Franchise Agreements shall be deemed amended so that
Commencing with the advertising contribution payment due under Section 6.02(a) of the
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Franchise Agreements on July 20,2009, and continuing for a period often (10) years thereafter,
or on the date that term of each Franchise Agreement expires, whichever shall first occur
("Advertising Contribution Reduction Period"), the advertising contribution rate shall 'be reduced
from five percent (5%) to four percent (4%) of Franchisee's Gross Receipts as defined in Section
6.03 of the Franchise Agreements. Franchisor's agreement to reduce the advertising contribution
rate for the Advertising Contribution Reduction Period is conditioned upon the Franchisee
having complied with all of its monetary and nonmonetary covenants under the Franchise
Agreements and this Agreement.
(ii)
The parties acknowledge and agree that the foregoing amendment
gives retroactive effect to the amendatory language in Paragraph 2 of the Letter Agreement dated
September 28, 2009 and ratifies Franchisee's payment of a reduced advertising contribution
commencing on July 20, 2009, rather than October 20,2009, as per the Letter Agreement.
(e)
The parties intend and agree that each of the Franchise Agreements, the
Note and this Agreement shall be cross-defaulted with one another. In the event that Franchisee
fails to timely or fully perform any of the conditions or obligations under this Agreement, the
Note or any of the Franchise Agreements, then this agreement and the Franchise Agreements
shall thereupon terminate upon notice, but without the necessity of any further act, by Franchisor
and Franchisor shall have available to it all additional remedies under this Agreement, the
Franchise Agreements and such other legal and equitable remedies available under applicable
law. Further, Franchisee and Guarantor agree that in the event of a default, Franchisor shall be
entitled to recover from Franchisee and Guarantor as damages, and without limitation, (whether
awarded as unpaid amounts, liquidated damages or lost royalty or other income or profits) the
full amount of royalties and advertising contributions calculated at the rate set forth in the
Franchise Agreements without giving effect to the reductions contemplated by this Agreement.
A breach of or default under this Agreement or the Franchise Agreements shall constitute an
event of default under the Note.
6.2
Consideration to Franchisor, Franchisee and Guarantor agree that, in
consideration of the forbearance of Franchisor from currently exercising its rights and remedies
to terminate or to commence judicial proceedings to enforce the provisions of the Franchise
Agreements and the Guaranties and other benefits and consideration that Franchisee is receiving
under this Agreement, the value and sufficiency of which are expressly acknowledged by
Franchisee, in the event Franchisee or either Guarantor shall (i) file with any bankruptcy court of .
competent jurisdiction or be the subject of any petition under Title 11 of the U,S. Code, as
amended (the "Bankruptcy Code"), (ii) be the subject of any order or relief issued under the .
Bankruptcy Code, (iii) file or be the subject of any petition seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, rehabilitation or similar relief under any
present or future federal or state act or law relating to bankruptcy, insolvency, or other relief for
debtors, (iv) have sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator, rehabilitator, or liquidator, or (v) be the subject of any order, judgment, or
decree entered by any court of competent jurisdiction approving a petition filed against such
party for any reorganization, arrangement, composition, readjustment, liquidation, dissolution,
rehabilitation, or similar relief under any present or future federal or state act or law relating to
. bankruptcy, insolvency, or other relieffor debtors, then, subject to court approval, Franchisor
shall thereupon be entitled and Franchisee and Guarantor irrevocably consent to relief from any
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automatic stay imposed by Section 362 (or and successor provision) of the Bankruptcy Code, or
otherwise, on or against the exercise of the rights and remedies otherwise available to Franchisor
and Franchisee and Guarantor hereby irrevocably waive their rights to object to such relief and
.agrees that the recitals and representations contained in this Agreement shall operate as judicial
admissions binding on Franchisee and Guarantor in connection with any request by Franchisor
for relief from any such automatic stay.
6.3
Confidentiality. Franchisee and Guarantor and their present and prospective
affiliates, and their respective directors, officers, employees, agents or advisors (including,
without limitation, attorneys, accountants, consultants, financial advisors and equity holders)
(collectively, "Representatives"), agree to treat, with the utmost strictest confidence, and not to
disclose in any manner whatsoever, in whole or in part, the terms of this Agreement, the fact that
this Agreement exists, the negotiations and discussions leading up to this Agreement, and any
other information relating to this Agreement (collectively, the "Confidential Information"). The
Confidential Information shall not, without the prior written consent of Franchisor, be disclosed
to any person or entity other than Franchisee's Representatives who need to know such
information for the purpose of providing legal or financial advice to the Franchisee (and in those
instances only to the extent justifiable by that need), who are informed by Franchisee of the
confidential nature of the Confidential Information and who are provided with a copy of this
Section 6.3 and agree to be bound by the terms hereof. Notwithstanding the foregoing,
Franchisee and its representatives shall not, under any circumstances, disclose the Confidential
Information to any other franchisee of Franchisor or franchisees of any affiliates of Franchisor.
In any event, Franchisee shall be responsible for any breach of this Agreement by any of
Franchisee's Representatives for prohibited or unauthorized disclosure or use of the Confidential
Information, and Franchisee agrees, at its sole expense, to take all reasonable measures to
restrain its Representatives from prohibited or unauthorized disclosure or use of the Confidential
Information. In the event that Franchisee or its Representatives are requested pursuant to, or
required by, applicable law or regulation or by legal process to disclose any Confidential
Information, Franchisee agrees that it will provide Franchisor with prompt written notice (and
copies, if applicable) of such request or requirement in order to enable Franchisor to seek an
appropriate protective order or other remedy, to consult with Franchisee with respect to
Franchisor taking steps to resist or narrow the scope of such request or legal process, or to waive
compliance, in whole or in part, with the terms of this Section 6.3 of the Agreement. In any such
event, Franchisee and its Representatives agree to (i) furnish only that portion of the Confidential
Information for which Franchisor has waived compliance or for which Franchisee is advised by
counsel is legally required to be furnished and (ii) use their reasonable best efforts to ensure that
all Confidential Information and other information that is so disclosed will be accorded
confidential treatment. Immediately upon termination of this Agreement, or at any time upon the
request of Franchisor, Franchisee and its Representatives shall promptly deliver to Franchisor-all
written material containing or reflecting any Confidential Information (including all copies,
extracts or other reproductions in whole or in part) and agree to destroy all documents,
memoranda, notes and other writings whatsoever (including all copies, extracts or other
reproductions in whole or in part) prepared by Franchisee or its Representatives based on the
Confidential Information. Upon the written request of Franchisor, Franchisee shall certify in
writing to Franchisor Franchisee's destruction of such documents, memoranda, notes and other
writings. Notwithstanding the return or destruction of the Confidential Information, Franchisee
and its Representatives will continue to be bound by the obligations imposed by this Section 6.3.
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It is further understood and agreed that money damages would not be a sufficient remedy for any
breach of this Agreement by Franchisee or its Representatives, and that Franchisor would be
entitled to specific performance and injunctive or other equitable relief as a remedy for any such
breach. Such remedy shall not be deemed to be the exclusive remedy for Franchisee's or its
Representatives' breach of this Agreement, but shall be in addition to all other remedies
available at law or equity to Franchisor. Franchisee shall be responsible to payor reimburse
Franchisor for any costs and expenses (including reasonable attorney's fees and costs) incurred
by Franchisor in connection with the enforcement of this Section 6.3 if it is determined that
Franchisee or its Representatives has breached this Section 6.3.
ARTICLE VII
RELEASE
7.1
Release. Franchisee and Guarantor, each on behalf of itself and each of their
Affiliates, hereby releases and forever discharges Franchisor and each of its past, present and
future Representatives, affiliates, parent companies, employees controlling persons, subsidiaries,
successors and assigns (individually, a "Releasee" and collectively, "Releasees") from any and
all claims, demands, proceedings, causes of action, suits, liens, losses, costs, expenses, orders,
obligations, contracts, debts and liabilities of any kind, character or nature whatsoever, whether
known or unknown, suspected or unsuspected, asserted or unasserted, fixed or contingent, both
at law and in equity, that Franchisee, Guarantor or any of their Affiliates now has, has ever had,
or may hereafter have arising contemporaneously with or prior to the date of this Agreement or
on account of or arising out of any matter, cause or event occurring contemporaneously with or
prior to the date of this Agreement; provided, however, that nothing contained herein shall
operate to release any obligations of the Franchisee arising under the Franchise Agreements or
Guarantor arising under the Guaranty after the date of this Agreement. Franchisee and
Guarantor hereby irrevocably covenant to refrain from, directly or indirectly, asserting any claim
or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind
against any Releasee, based upon any matter purported to be released hereby.
7.2
Indemnification. Without in any way limiting any of the rights and remedies
otherwise available to any Releasee, Franchisee and Guarantor jointly and severally shall
indemnify, defend and hold harmless each Releasee from and against all loss, liability, claim,
damage (including incidental and consequential damages) or expense (including costs of
investigation and defense and reasonable attorney's fees) whether or not involving third party
claims, arising directly or indirectly from or in connection with the operation of the Restaurants,
the Franchise Agreement, the Guaranties, or any matter embraced by or contemplated by this
Agreement or the parties' franchise relationship .
. ARTICLE VIII
GENERAL PROVISIONS
8.1
Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, assigns
(including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
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or substantially all of the business and/or assets of either party), spouses, heirs, executors and
personal and legal representatives.
8.2
Severability. The provisions of this Agreement shall be severable in the event
that any ofthe provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.
8.3
Survival. The provisions of Sections 6.2, 6.3 and Article VII shall remain in full
force and effect and shall survive any termination of this Agreement.
8.4
Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a) delivered by
hand (with written confirmation of receipt), (b) sent by telecopier (with written confirmation of
receipt) or (c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate.addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):
Franchisor:
Long John Silver's, Inc.
1441 Gardiner Lane
Louisville, KY 40213
Attention: General Counsel
Franchisee and Guarantor:
Southwest Seafood Shoppes, LLC
Attn: John Willingham
4321 N. Bear Claw Way
Tucson, AZ 85749
8.5
Section Headings. The headings of sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation.
8.6
Certain Interpretive Matters. No provision of this Agreement shall be interpreted
. in favor of, or against, either ofthe parties hereto by reason of the extent to which any suchparty
or its counsel participated in the drafting thereof or by reason of the extent to which any such
provision is inconsistent with any prior draft hereof or thereof.
8.7
Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Kentucky without regard to conflicts oflaws principles.
8.8
Consent to Personal Jurisdiction in Kentucky. As further consideration for
Franchisor's agreement to enter into this Agreement, Franchisee and Guarantor agree that any
9
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action arising from or out of this Agreement must be brought exclusively in the Commonwealth
of Kentucky and Franchisee and Guarantor consent to personal jurisdiction in Kentucky for all
purposes.
'
8.9
Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. Delivery of a signed
counterpa.rt by facsimile transmission will constitute a party's due execution and delivery of this
Agreement.
8.10 Franchise Agreement Provisions. The parties agree that all provisions of the
Franchise Agreements that are not inconsistent with or contemplated to be amended by the
provisions hereof shall apply to this agreement, including without limitation the notices (Section
15.10), governing law and jurisdiction (Section 15.02) and similar provisions.
8.11 No Assignment. Franchisee and Guarantor agree that the benefits contemplated
to be provided of this Agreement are personal to them and shall become null and void and of no
further force and effect in the event of a transfer (as defined in Section 13.02(a) of the Franchise
Agreements) of any Franchise Agreement, including any transfer to which Franchisor may
consent.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
FRANCHISOR:
LONG JOHN SILVER'S INC.
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FRANCHISEE:
SOUTHWEST SEAFOOD
SHOPPES, LLC
GUARANTOR:
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EXHIBIT A
[The Restaurant Locations - Recital A]
Store ID #
Store Address
City
State
07459
07555
07606
07705
07723
07919
4105 N Oracle Road
7120 E Broadway
4030 E 22"0 Street
3700 S 6lh Avenue
1297 E Fry Boulevard
4640 W Ina Road .
Tucson
Tucson
Tucson
Tucson
Sierra Vista
Tucson
AZ
AZ
AZ
AZ
AZ
AZ
EXHIBITB
Default Letter dated October 29,2009
Default Letter dated December 16, 2009
Default Letter dated January 14,2010
Default Letter dated February 22,2010
EXHIBITC
[Indebtedness to Franchisor - Section 2.1]
Month Owed
Sales Reported
Royalty Owed
Adyertising
Owed
AU2ust2009
September 2009
October 2009
Novem ber 2009
December 2009
Januarv 2010
Februarv 2010
March 2010
TOTAL
$224,917
$175,948
$182,922
$175,855
. $194,364
$211,158
$329,093
$343,147
$1,837,404
$8,996.68
$7,037.92
$7,316.88
$7,034.20
$7,774.56
$8,446.32
$13,163.72
$13,725.88
$73,496.16
$8,996.68
$7,037.92
$7,316.88
$7,034.20
$7,774.56
$8,446.32
$13,163.72
$13,725.88
$73,496.16
Total Owed
(Royalties plus
Advertising)
$17,993.36
$14,075.84
$14,633.76
$14,068.40
$15,549.12
$16,892.64
$26,327.44
$27,451.76
$146.992.32
EXHIBITD
[The Note - Section 5.1(a) - see following page]
.'
'."
PROMISSORY NOTE
LOUISVILLE,
$146,992.32
KENTUCKY
June 2, 2010
For value received, the undersigned ("Maker(s)") promise to pay Long John Silver's, Inc.
("Payee"), a Delaware corporation having its principal place of business at 1441 Gardiner Lane,
Louisville, Jefferson County, Kentucky 40213, the principal sum of $146,992.32 (One Hundred
Forty-Six Thousand Nine Hundred Ninety-Two Dollars and Thirty-Two Cents). The payments
.due hereunder shall be payable at the Payee's principal place of business address as set forth
herein.
This Promissory Note (this "Note") is issued pursuant to a certain Conditional
Reinstatement Agreement dated June ll, 2010 by and among Makers and Payee (the
"Reinstatement Agreement'), and shall be payable in sixty (60) uneven consecutive monthly
installments of principal in the amounts set forth on Schedule D-1, on the first day of each
month, beginning July 1, 2010, and with a final installment of $1,192.32 due on June 1, 2015
("Maturity Date").
All principal installments that are not paid in full on the due date shall thereupon and
thereafter bear interest from the due date (or date of prior acceleration upon sale or transfer) at
the rate of 10% (ten percent) per annum. Principal and interest shall be payable in lawful money
of the United States.
This Note is issued pursuant to, and is subject to all the terms and conditions of the
Reinstatement Agreement, with capitalized terms used in this Note without definition having the
meanings assigned to those terms in the Reinstatement Agreement.
The occurrence of any of the following shall constitute an "Event of Default."
(a)
Default in the payment of any· amount owed on this Note when due, or in the
performance of any other obligation of Makers hereunder pursuant to the terms
hereof.
(b)
Default occurring in the performance of any obligation contained in the
Reinstatement Agreement, any Franchise Agreement, any Guaranty or any other
agreement, or any amendment.thereof or addendum thereto, by or between any
Maker or any Maker's affiliate and Payee, or any affiliate of Payee, including,
without limitation, Yum Brands, Inc. or any of its direct or indirect subsidiaries.
Upon the occurrence of any such Event of Default, and the Makers' failure to cure such
Event of Default within (i) five (5) days thereafter if the default is in the payment of any
installment when due hereunder; or (ii) ten (10) days after receipt by Makers of written notice if
the default is the failure to perform or the breach of covenants, representations, warranties,
agreements or other such non-monetary defaults, then at the option of Payee, the entire unpaid
balance of principal on this Note, together with all accrued interest thereon, shall be immediately
due and payable. Any Event of Default under this Note that is not cured within the foregoing
0';
grace periods shall, without further
termination under the Reinstatement
other agreement, or any amendment
any Maker's affiliate and Payee, or
notice, be deemed a default and a cause for immediate
Agreement, any Franchise Agreement, any Guaranty or any
thereof or addendum thereto, by or between any Maker or
any affiliate of Payee.
In the event that any installment payable hereunder is not paid when due, then in addition
to all other rights set forth herein, Payee shall have the right, commencing fifteen (15) days after
the due date for such payment, to collect a late charge equal to not more than four percent (4%)
of the delinquent payment. The right to collect such late charge shall be in addition to all other
rights granted to Payee hereunder.
If any installment herein provided for, either of principal or interest, is not paid at
maturity, then such owner or holder may, at its or his option, without notice or demand, declare
the unpaid balance of principal and interest on this Note at once due or payable.
Each Maker hereof and any and all endorsers, guarantors
demand, presentment for payment, notice of dishonor or default,
diligence in collecting and bringing suit against any party hereto
extensions or partial payments and to any release or substitution
in part, with or without notice, before or after maturity.
and sureties severally waive
protest and notice of protest,
and agree to all renewals,
of securityherefor.in whole or
The holder of this Note shall have the right at any time to set off the same amount that
either the Makers, endorser or guarantor shall have on deposit with it, whether such deposit be
special or general, whether the said Note is then due or not.
All agreements by the Makers hereof are hereby expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to the holder hereof
for the use, forbearance, or detention of the money to be loaned hereunder exceed the maximum
amount permissible under applicable law or be deemed usurious. If, from any circumstances
whatsoever, fulfillment of any provision hereof at the time performance of such provision shall
be due shall involve transcending the limit of validity prescribed by law or be deemed usurious,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, andf
i
from any circumstances the holder hereof should ever receive as interest an amount that would
exceed the highest lawful rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing hereunder and not to the payment of interest.
If this Note is not paid when due or if an Event of Default occurs, Makers promise to pay
all costs of collection, including, but not limited to, reasonable attorneys' fees incurred by Payee
on account of such collection whether or not suit is filed hereon ..
Makers consent to any extension of time for the payment hereof, release of all or any part
of the security for the payment hereof or release of any party liable for this obligation. Any such
extension or release may be made without notice to Makers and without discharging their
liability.
Reference in this Note to "Payee" shall mean the original Payee hereunder so long as
such Payee shall be the holder ofthis Note and thereafter shall mean any subsequent holder of
this Note.
,
.•..
Time is of the essence of each obligation of Makers hereunder.'
Neither delay or omission on the part of Payee in exercising any rights hereunder or
under the terms of any instrument given to secure this Note nor the acceptance by the Payee of
any late or non-conforming payments hereunder, shall operate as a waiver of such right or of any
other right hereunder or under said instruments.
This Promissory Note and all obligations hereunder are payable and performable in
Louisville, Jefferson County, Kentucky and this Promissory Note shall be construed and
governed by the laws of the Commonwealth of Kentucky. This Promissory Note is given in
consideration of the forbearance of Payee from instituting legal action for collection of the debt
evidenced hereby.
This Note is executed in and shall be governed in accordance with the laws of the
Commonwealth of Kentucky as to interpretation, validity, performance and enforcement. Should
any action at law or in equity be brought by Payee to secure or protect its rights under this Note,
such action shall be brought in the United States District Court for the Western District of
Kentucky, or, if said court does not have subject matter jurisdiction, then such action shall be
brought in the appropriate state court in the City of Louisville and County of Jefferson,
Kentucky.
If the Makers or any of them shall sell, assign, convey, transfer, encumber or alienate any
interest under any Franchise Agreement and/or the restaurant property and/or related assets
described in any Franchise Agreement, or any part thereof, or any interest therein, or ifthe
Makers or any of them shall be divested of title or any interest therein in any manner of way,
whether voluntarily or involuntarily, without Payee's prior written consent or in contravention of
the Reinstatement Agreement or any Franchise Agreement, the same shall be an Event of Default
and Payee shall have the right, at its option and without notice or demand, to declare any
indebtedness or obligations evidenced hereby, irrespective of the Maturity Date specified in this
Note, immediately due and payable.
In the event that Makers shall fully and timely pay the installments due hereunder for a
period of twelve (12) consecutive months (on a non-cumulative basis with no double counting),
then upon Makers' prior written request, Payee shall credit the sum of$10,000.00 against the
principal amount then due hereunder for each such twelve (12) consecutive month period of such
full and timely performance by Makers, not to exceed a credit of $40,000.00. Provided,
however, that such credit shall be revoked without notice and of no further force or effect In the
event that Maker defaults at any time after receiving such credit and Payee accelerates the
indebtedness due hereunder.
.
The Makers executed this Note as of the date set forth above.
[Signatures Next Page}
'to"
~
SOUTHWEST SEAFOOD SHOPPES,
LLC
SCHEDULE D-l
Amount
.
:Annuallnterest
,,
;
$146,9~2~
0%
i. Loan
.
.
• "1
.~.
,
•••
'.
~
•••
~ •••
,I
... .s:.
:Term (Years)
:
.
7/1/2010.:
.Start Date
•
.Month .Date
.M·
..
;Beg Balance .. :Fla~ Paym.ent
:."'.~::.
?!.~!?qi9._:
..
-.::
s..~.4.?,.~~?:??_
..$._
.. .l1dB..~I.~.I1~.~.
~
l!Qq.Q.9.g ..:.... .... ~~.~!.~~?~.??.
$
:
, $.14.~,~.~.?32 :.$ . .1,q~9.~OO
..;.$ 14.~,.~.~.?..3.2..:
: $ 144,992.32: $ 1,000.00;
143,992.32
~
'$' . i~oo6:oo"i i42~99i.32 ;
.2..._:8/~!2010
3 :9/1/2010
s
. 4' -:io/l/i-clio s 143;99;i.32 .
's'
: . '5'":lijijioio"'- r $....
142;9-9·2:32·;$
-2;-000.00-r$· "-i40;'99'2~'32:
.
"6"................•.. 1"0" ............•.......... _ 2--:'". $ .'"'iooo:'oo""; ""f '"i38~992:'3'2"'i
";"12/1;20'
$';-'140";992":3' ..
-..... ..
_
..•...
,
,
.... 8
.
;
,
7
)/1/2011
:2/i/ioii'
........•...
s
.
138,992.32; $
:
.:.
s 136;992:3i"$
9'j3i1ji'Oll
s '133,99'ij2';'-f
'1
;"
,
_ ........•......
2,000.00, $ 136,992.32:
'3';000.00'; $ 133',992:32 ~
-io,ooo:-OO·~"$·"i23:-99i.i~";
: ..'io·: .":~i'1;?Qii-'· -::i: 'i?~;'~:~?:~~:i
·
....
~;·.i"····j~Q9.'~.Q()::.L"fj~i~~~~?
.. ~~i.~
..
~
11 :5/1/2011
1~'
s
: $ 118,992.32'
1,000.00: $ 117,992.32 i
~;:gO'9·-O'Q:_;-{,· ..1j~;.. ...
~~X·~?
:
::6lil?9i,·1...... '.. S· 117;_~~i:~2;'.$ .:
s
s
116,992.32
1,000.00: $ 115,992.32;
115';992:32""$" .
11'4;99'2.32:
:$' 114,992:32-i$
1,000.00;' $' 113;992.32·!
13 .7/1/2011
:
l,ooO.oo·-:·f
15 :9/1/2011
:... '·.iqb!.~q.li.. ij·ii.~;·~~~.~? ··i;99O'~:... f...
i.~"
........
_:
$
.~O ~~?!.9.~~?:-i2..::
'14 ~8;ii2oii' $
: $ 112,992.32' $
, 1711/1/2011
... 18 ':'12/1/2011'" '.'
$-110,992:32!
'S'
s: i08;992·.32 :$ i.;ooo~6(i'!"'$ ..i06;992":32-;
19 -:;i/20-ii
i
2'0 ':2i1/20ii
.
2,000.00: $ 110,992.32'
2,000.00':
108,·99'2.32··!
$
s :106;992il';"$ 'ioo6~6oT$' 103;992,32 :
; s 103,992.32: $ 10,000.00 i $ 93,992.32:
•..•.•.•..
••.
21 :3/1/2012
. ...•..•....
_._ ..•..••.•.
•. ..•. ,.. -I
•..•..
_ ••. -..........
•. •.••.•.••.•.•.
- .•••.•.••
_."
2'2' ';'4/i)261'2' ....:.... ....
$· 93;992~32 ";"'$' ·5;oo(j':6o....··$·-·~i8~99i3-Z-·:
..
•••• ,
' ••.••.••••••
"
••
~? ..:5/1.I~9.1?
! .. ~~
,",'
•••
..~
.• '
•••
••••
.''''
•• "
.8.?1.~.~2f; $
..
~
$. .. ~?(~.92.:~2
..,.$·
•
.•
"
•.••••
~ •• " •• _..
,,~,q.99:QQ:.$
' ." "_,,
••
_ ._ •••••
,._ ••••
_ .••
1
~.?'.~,~.?~.?~
..
I
}~99.Q:go~.~. ._ ~§.'_9.~.~.:.~?
_
;
s.:".~?,~~?.
.:~~;~. _~,9..qQ:.9.g' .$.... ~.?~.~-~.~~-.!
.;.§/.1(?Q12 .i.
.?~. Jr1.a9_~2
26 :8/1/2012
27 :9/1/20i2
2.? 10/i/2012
29 .11/1/2012
".
:.
$
.$
36' 12jii2·O.ii "$
s
$
$
85,992.32; $
84;992.32'
83,9~2.32· $
82,992.32 $
8'0,99'2.32'$'.
s
1,000,00; $
i.eoo.oo $
s
i,oQO·Q9:
2,000.00 $
!
84,992.32'
83;992.32
.8~~~~..3.2
80,992.32.
2,oo6':qq .'$ ~:'''''78;992:32''
SCHEDULE D-l (cont.)
.
.,
.'Beg Balance
".
..-.. _.....
.Month 'Date
,
'
.$
31 '1/1/2013
32 ...
33 :3/1/2013
'·z/il?9.i3.·
.78,992.32 : $
$... '76,9'9·2:32'·': s
~.
.
.
'End Balance .
. .. ..~-.~,
'Flat Payment
..'
. ..
$
76,992.32:
1,000.00 : $
55,992.32:
2,000.00
3;'oo6~oo"!'''f '-73':99'2':'3-£";
.
.: S 73,992.i~· ~s 10~ooo':oo; $ ··63~·99·2j2 !
34 ·~4/iji613
s ·63;992.32·· $ ... 5,·ooiJ:o·o··r-s .·58,9·9i.i~ :
.
'''35 :5/1;2013 $ .: 58,9'92:32" $'1;000'.00 $ 57,992.'32 :
. '3'6..·;67iiio.~"i.·... $ ."~?;9.~2.~?·.· ·i;o.q"O~·g9..:.;I . ·~§:9~?.~2.·:
.'$'
1
i?I.Y~9~? :$ 56,992.32; $
.?? _i ~L.Y?913.$·55,~.~~·:~? -:$.
..." ~ ;~/1l.?'Q~? :$ 54,992.32: $
..
. 31.
; 40 :10/1/2013
; 41",1i/l/2013
·i~.9..~Q_~q9.·::
..~
~~!.~~~:·3.?:·i
1,000.00: $
53,992.32:
~'f·5·3~99i.3·2"!"'$· 'i))oo:oO': "'$"""'52:992':3'i":
i;ooo:c)O ';$" ·SO;99i·3Z·.:.
.·.
.:. 4-2· r12/i/20i3
.....
..; 50;992.32";- $ ...
f'"
2;000':00";'$' "4~i,'9'9i'3':i"
; .. 43:'" h/1/2014"
...$' 48~'9gi:3i: $ 2~oo·o.6o.'$ 46,992.3'2:
~
.
~.. 44~·_:·?1i.12qi.4 . :$. '46~~-~2:~i'; S·· 3;ooq~9.9·'··: r·4~,·~_~·~.32.;
.~.?...~(y?p~4 'J
. :
L
:4/1/2014
:·.·.47 .. ";'5/1)2014'"
·.. ·
•
.~?!.~.~?3?.: $..19!.9.q9.:~9_.; ..$. ..~.3.!~:~?}2:
s 28,992.32·
"'4'8-·
'''i6ii)ioi~--''r $'-"27';99~i:ii"':"$'_. i;ooo:oo"!' of' "·2·6:99-ij2"";
: 46
v
$
. $ .52,992.32:
:
$
s
33,992.32'
5,000.00 :
\$ 2'8,99'2::32 :.'$ ...'1;600.60 ..$ ..... 2:32 ~
· .. 27,·99'
:. .. 49..· __•'7/1/2014""'-~$'''26~99'2'~32';$' ,"1~ooo:()"6'T$"-"25;992'•....32"'1
.•.......••...•..
_......
. ............•
_
.••.... - ......•.. _
I..........
- •.....•.•.•........
: 50
;8/1/2014
i
$
s
25,992.32'
1,000.00 ! $
24,992.32;
:. si'······rg/i/2014 _.."$ ·24·:gg·2:32 ...$" ..· ..·1':00-0:00 ..·;·$·· ..'23';'9'92-:'3'2":
r
.: s'2 ...
···io/i/2Cii4 , ...:.. 23,"9·92~32·· !:ooo.oo ..... "22;99i'3'i";
..
.:
; ..5'3 iiii/io14: $ "'22;99iii' ':"$ "'2:;00'0:00-$" ici,9'gii'2 ';
.''',
.:
.
! 54 "'; 12/i/2014 .: $ .. 20;992::32' f i·,ooo.·oo";$ 18,992.32:
: "'55'" :1/1/2015 . -s·.; i8;992il'~"$ "2~OOO'' Oo'':'$ .. 16;992:32"-:
.
·.. ·56 ....
:·271/2015 ..- .... ''16;-992:32'''$ ..3;006:·6"0":'$" ·'13/'9·9"2.3'2"1
:.$
~:?'··?/ii?~~5. :"$ ·l~!~~?.:ii..·io,:o.99:~o.9.·.i ~$'~;~,~.2'.3.?'.;
..
$.
r
58- :4/1/2015 . -: $
..
.
59 5/1/2015
.$
60 .. 671/2015' .: $"
...-~
..
"."
-
,
r
:$
.
2,992.32 . $
.. 1,·992.iz $'
.. . 3,992.32
.. .. .
._
,'.
r.
's· ...
1,000.00 . $
..
..
1,000.00 $
"'-"
'
",.
l,992.3'i $"
$ 146,992.32:
2,992.32 1
~ ~ .'.
..
1,992.32 :
,.
,
,
·····0.66·:
".
t
/
AMENDMENT
TO CONDITIONAL
REINSTATEMENT
AGREEMENT
This Amendment to Conditional Reinstatement Agreement (this" Amendment") is
dated for reference purposes as
9.1IllO.-, 2010, and is executed by and between
LONG JOHN SILVER'S, INC., a cotporation with its principal place of business at 1441
Gardiner Lane, Louisville, KY 40213 ("Franchisor"), SOUTHWEST SEAFOOD
SHOPPES, LLC, a limited liability company with its principal place of business at 4321
N. Bear Claw Way, Tucson, Arizona 85749 ("Franchisee"), and JOHN WILLINGHAM,
, an individual with an address c/o Franchisee ("Guarantor").
o:WJG 2
Recitals:
A.
Franchisor and Franchisee executed six (6) Franchise Agreements, each
governing the operations a Long John Silver's restaurant (collectively, the "Restaurants",
hereinafter further defined) at the locations set forth therein (together with all
amendments thereto, including without limitation amendment by Letter Agreement dated
as of September 28, 2009, the "Franchise Agreements").
'
B.
Guarantor has executed and delivered to Franchisor guaranties of the Franchisee's
performance under each of the Franchise Agreements (the "Guaranties").
C.
Franchisee defaulted under the Franchise Agreements and Franchisor, after giving
due notice and an opportunity to cure the defaults, terminated the Franchise Agreements
by letter dated March 31, 2010 ("Termination Letter").
D.
By Conditional Reinstatement Agreement dated as of June 11,2010
("Reinstatement Agreement") Franchisor agreed to conditionally reinstate the Franchise
Agreements on the terms set forth therein.
, E.
Section 6. 1(c)(i) of the Reinstatement Agreement provided for a temporary
reduction in royalty payments otherwise due under Section 6.01(a) of the Franchise
Agreements, and the parties have agreed, also pursuant to Section 6.1 (c )(i) of the
Reinstatement Agreement, that the royalty reduction shall be further temporarily
extended on the terms and conditions set forth in this Amendment
ACCORDINGLY, in consideration of the promises and the representations,
warranties, covenants and agreements hereinafter set forth, the parties agree and amend
the Reinstatement Agreement as follows:
1.
Construction. Capitalized terms used without definition herein shall have the
respective meanings ascribed to them in the Reinstatement Agreement, the Franchise
Agreements and the Guaranties. In the event that the terms of this Amendment conflict
with any terms in the Reinstatement Agreement, the terms of this Amendment shall
control.
2.
Extension of Royalty Reduction Period; Cross Default.
(a)
The parties
agree that, as contemplated by Section 6.1 (c)(i) of the Reinstatement Agreement, the
Franchise Agreement amendment effecting a reduction in royalty rate from five percent
r
j
I
(5%) to four percent (4%) of Franchisee's Gross Receipts shall continue for and during
an extended Royalty Reduction Period, which shall commence with the royalty payment
due August 20,2010 and continue through the payment due January 20,2011.
Franchisee acknowledges and agrees that the foregoing extension of the Royalty
Reduction Period was effected per Franchisor's sole discretion and accordingly,
Franchisor may discontinue the royalty reduction at any time in its sole discretion upon
notice to Franchisee. Without limiting.the generality of the foregoing, the royalty
reduction: (i) is conditioned upon Franchisee having complied with all of its monetary
and nonmonetary covenants under the Franchise Agreements and the Reinstatement
Agreement; and (ii) is conditioned upon the continuing truth and accuracy of
Franchisee's representations to Franchisor that it has so complied with such covenants.
(b)
The parties acknowledge that the Reinstatement Agreement, as amended
hereby, is cross-defaulted with the Promissory Note and the Franchise Agreements.
Accordingly, in the event that Franchisee fails to timely or fully perform any of the
conditions or obligations under the Reinstatement Agreement, the Promissory Note or
any of the Franchise Agreements, then the Reinstatement Agreement and the Franchise
Agreements shall thereupon terminate upon notice, but without the necessity of any
further act by Franchisor, and Franchisor shall have available to it all additional remedies
under the Reinstatement Agreement, the Franchise Agreements and such other legal and
equitable remedies available under applicable law. Further, Franchisee and Guarantor
agree that in the event of a default, Franchisor shall be entitled to recover from
Franchisee and Guarantor as damages, and without limitation, (whether awarded as
unpaid amounts, liquidated damages or lost royalty or other income or profits) the full
amount of royalties and advertising contributions calculated at the rate set forth in the
Franchise Agreements without giving effect to the reductions contemplated by the
Reinstatement Agreement. A breach of or default under the Reinstatement Agreement or
the Franchise Agreements shall constitute an event of default under the Promissory Note.
3.
No Extension of Time for Performance.
Franchisee and Guarantor
acknowledge and agree that TIME IS OF THE ESSENCE in Franchisee's performance of
each and every obligation under the Reinstatement Agreement, Promissory Note and
Franchise Agreements and that the time for such performance shall not be extended nor
tolled by reason of this Amendment.
4.
Ratification.
Franchisee and Guarantor ratify and reaffirm the Reinstatement
Agreement and each and every provision thereof, the same having been amended only as
specifically set forth herein. For avoidance of doubt, Franchisee and Guarantor hereby
remake all of the agreements and all of the representations made in the Reinstatement
Agreement as if the provisions containing such agreements and representations were fully
set forth herein. None of Franchisee's or Guarantor's agreements or representations shall
be diminished by the execution of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
[Signatures Next Page}
2
I
/
FRANCHISOR:
LONG JOHN SILVER'S INC.
FRANCHISEE:
SOUTHWEST SEAFOOD
SHOPPES, LLC
3
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