Fill and Sign the Advertising Cooperative Form

FF 10/96© STP 6030-1 Form 6.03 Subscription Agreement  ADVERTISING COOPERATIVE SUBSCRIPTION AGREEMENT This Agreement, made this day of , 19 , by and between each of the undersigned franchisees of ABC, Inc. (“Franchisees”), is made with reference to the following facts: (a) Each of the undersigned Franchisees is a Franchisee in good standing of ABC, Inc. (the “Franchisor”). (b) Each of the undersigned Franchisees owns and operates at least one “ABC” restaurant in t he Area of Dominant Influence (“ADI”), more fully described as follows: (c) Each of the undersigned Franchisees believes it to be in their mutual and respec tive best interest to contribute to a joint advertising effort to more fully advertise and promote said Franchisee's “ABC” restaurant business in the ADI. (d) In order to accomplish this joint advertising effort throughout the ADI, the undersigned Franchisees have agreed to create, join and contribute to a non-profit, non-stock corporation (the “ Co- op”) for the mutual benefit of all Franchisees who own and operate “ABC” restaurants in t he ADI who join the Co-op, and Franchisor, if Franchisor shall own and operate one or more “ABC” restaurants i n the ADI. NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows: 1. The parties hereto hereby agree to organize and incorporate the Co-op under the laws of the State of Delaware a non-profit, non-stock corporation for the mutual benefit of its members, for the purpose of jointly and cooperatively advertising “ABC” restaurants in the ADI. Each of the undersi gned Franchisees hereby agrees that when the Co-op is incorporated, they, and each of them, will become members thereof. 2. The undersigned Franchisees, and each of them, hereby agree that the bylaws of the Co-op, when organized and duly incorporated, shall, among other provisions, contain the following provisions: (a) All Franchisees who own and operate “ABC” restaurants located in the ADI, and Franchisor, and any subsidiary or affiliate thereof who owns and operates “ABC” restaurants in the ADI, shall be eligible to become members of the Co-op. (b) Each member of the Co-op shall be entitled to one vote for each “ABC” resta urant which the member owns and operates in the ADI. Thus, if a member of the Co-op owns and operates three “ ABC” restaurants in the ADI, the member shall be entitled to three votes, and if the m ember owns and operates one “ABC” restaurant within the ADI, the member shall be entitled to one vote. Addi tionally, even if Franchisor shall not own and operate any “ABC” restaurants in the ADI, Franchisor shall be a member of the Co-op, but shall not be entitled to vote with respect to any matter other tha n the amendment of the Certificate of Incorporation or the By-Laws of the Co-op, and then shall only have veto powe r with respect to any such amendment.  This form is a sample only. Counsel must comply with applicable law and should view thi s form as suggestive of typical provisions. Form 6.03 6030-2© STP FF 10/96 (c) Except in the case of Franchisor or its subsidiaries or affiliates, in the event tha t any member of the Co-op shall cease to become the owner and operator of at least one “ABC” re staurant located within the ADI pursuant to a franchise agreement with ABC, his membership in the Co-op shal l automatically and forthwith terminate. (d) For so long as the Co-op shall continue in existence, each of the undersigned Franchisees agree that for so long as they are Franchisees, they, and each of them, will contribute that percentage of their respective Gross Volume of Business (as such term is defined in their respective fra nchise agreements) as a majority of the membership votes of the Co-op shall determine; provide d, however, that such contribution shall not be less than 1% or more than 3-1/2% of each Franchisee's Gross Volume of Business. Additionally, Franchisor, its subsidiaries and affiliates who own and operate “ABC” restaurants in the ADI will make similar contributions, based upon the Gross Volume of Business of all of their restaurants located in the ADI. All contributions to the Co-op shall be expended for Advertising and Marketing (as such term is more fully defined in the by-laws) “ABC” restaurants within the ADI. (e) Regular meetings of the Co-op shall be held at least quarterly, on the dates est ablished each year at the annual meeting of the membership of the Co-op. Special meetings of the Co-op may be called upon at least 10 days notice by Franchisor, or by Franchisee members entitled to vote at least 20% of the votes of the Co-op. (f) Members of the Co-op shall, from time to time, appoint an advertising agency to pla n and place advertising, using the funds contributed by its members to the Co-op. Said agency shall be directed to cooperate with and coordinate its activities with the advertising agency of rec ord of Franchisor, in order that Franchisor's advertising and promotional activities and the advertising activi ties of the Co-op shall have a consistent theme and message. (g) In addition to the contributions made by the membership of the Co-op to the Co-op for advertising and promotion of “ABC” restaurants located within the ADI, each member of the Co-op shall contribute one-half of 1% of the member's Gross Volume of Business derived from “ABC” restaurants located in the ADI to a fund, administered by ABC, for the purpose of developing and creating the production of advertising and promotional materials; provided, however, that if a member shall be required, pursuant to his franchise agreement, to make such contribution, this provision shall not be applicable to such Franchisee, and the provisions of such Franchisee's franchise agreement shall control. (h) The Co-op shall have perpetual existence unless or until it is dissolved by a majorit y of all of the votes of the Co-op. 3. In order to assist the Co-op and Franchisor to develop an appropriate advertising program and budget, each Franchisee shall deliver to Franchisor on Monday of each week a Sales report for e ach of his ABC restaurants in such form as Franchisor shall prescribe, setting forth the restaurant's sale s for the prior week. 4. Any controversy or claim arising out of or relating to this Advertising Cooperative Subscription Agreement, or any breach thereof, including, without limitation, any claim that sai d agreement, or any part thereof, is invalid, illegal or otherwise voidable or void, or any dispute arising out of or relating to any subscriber's membership in the Co-op shall be submitted to arbitration before Franchisor as a rbitrator. The decision of Franchisor shall be final and binding upon the parties to such arbitration whic h shall be conducted in accordance with the rules of the American Arbitration Association. If, wit hin five days of the receipt of any demand for arbitration, any member of the Co-op shall, in writing, re ject Franchisor as the arbitrator of said dispute, the dispute shall be submitted to arbitration before and in accordance with the rules of the American Arbitration Association, and judgment upon the award may be entere d in any court of competent jurisdiction. Such arbitration, whether before the American Arbitration Association or Franchisor, shall take place in the city in which the principal offices of Franchi sor shall be located, or if no office of the American Arbitration Association shall be located in said city the n in the city nearest the Form 6.03 FF 10/96© STP 6030-3 city in which the principal office of Franchisor shall be located which has an office of the American Arbitration Association. This arbitration proceeding shall be deemed to be self-executing, a nd in the event that either party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such party notwithstanding said failure to appear. The prevailing party in arbit ration shall be awarded his costs and reasonable attorneys' fees. This section shall be effective as to all claims, controversies or disputes arising out of or relating to membership in the Co-op, or to the Adverti sing Cooperative Subscription Agreement, even if membership has terminated or this Advertising Coope rative Subscription Agreement is no longer in force. 5. The board of directors of the Co-op may enforce by appropriate legal action, through the Arbitration provision contained in paragraph 3 hereof, the payment of all due and unpaid dues, assessments, and fees for which a member or former member has become obligated by virtue of his execution of the Advertising Cooperative Subscription Agreement. 6. The form of Certificate of Incorporation and Bylaws of the Co-op are annexed hereto. Said form of Certificate of Incorporation and Bylaws has by the execution hereof, been ratified, adopt ed and approved by the undersigned. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have execute d this Agreement on the day and year set forth above. FRANCHISEE SUBSCRIBERS ADDRESS DATE ABC, Inc. By: Its: