(PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
EXHIBIT 10.64
SEARS LICENSE AGREEMENT
-----------------------
This Agreement made as of the 1st day of January, 2003
BETWEEN:
SEARS CANADA INC., incorporated under the laws of Canada, having
its head office in the City of Toronto, Province of Ontario
(hereinafter called "Sears")
OF THE FIRST PART
AND
SEARS ▇▇▇▇▇▇▇ AND CO., incorporated under the laws of New York,
United States of America,
(hereinafter called "Owner")
OF THE SECOND PART
AND
CPI CORP. incorporated under the laws of Ontario,
having its head office in the City of Brampton, Province of
Ontario
(hereinafter called "Licensee")
OF THE THIRD PART
WHEREAS Sears is a national retailer offering goods and services
to its customers through general merchandise retail department
stores, outlet stores, free standing speciality stores, dealer
stores, catalogues, direct marketing media and the Internet;
AND WHEREAS Sears wishes to provide, market and offer
for sale portraiture and related goods and services, under the
Sears Trademark, through its retail marketing channels, including
but not limited to, general merchandise retail department stores,
outlet stores, free standing speciality stores, select direct
marketing media and on its Internet web site;
AND WHEREAS Licensee has represented to Sears that it
is fully qualified, experienced, licensed, capitalized, staffed
and equipped to successfully establish and operate a Concession
for the purpose of procurement, presentation, merchandising,
marketing and sale of the Products and Services contemplated
by this Agreement;
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AND WHEREAS Licensee is desirous to operate a Concession
on behalf of Sears for the purpose of procurement, presentation,
merchandising, marketing and sale of the Products and Services
contemplated by this Agreement through Designated Marketing Channels,
in Designated Markets, Designated Stores and Licensed Departments
under the Sears Trademark;
AND WHEREAS Sears has approved Licensee to provide and
sell the Products and Services under the name "Sears Portrait
Studio";
AND WHEREAS Licensee represents and warrants that all
information set forth in any and all applications, financial
statements and submissions to Sears is true, complete and accurate
in all material respects, and Licensee expressly acknowledges that
Sears is relying upon the truthfulness, completeness and accuracy
of such information;
AND WHEREAS the parties agree that under this License
Agreement Sears is not offering a Franchise nor is the Licensee
operating a Franchise as defined under any federal or provincial
act or legislation;
AND WHEREAS the parties hereto desire to set forth in
writing the terms, provisions and conditions governing their
relationship.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties
hereto, hereby mutually covenant and agree as follows:
1.0 DEFINITIONS
-----------
1.1 The following words and phrases used in this Agreement
shall have the following meanings:
"AGREEMENT" means this agreement and any and all
subsequent amendments to this agreement including all
of the attached Schedules and any other documents
specifically incorporated by reference herein;
"CHANGE OF CONTROL" means any of, the transfer or
issue by sale, assignment, disposition, operation of
law or otherwise of any shares, voting rights or
interests which would result in any change in the
effective control of fifty percent (50%) or more of
the voting power entitled to vote in the election of
the Board of Directors of Licensee's parent
corporation, CPI Corp. a Delaware corporation;
"CHANGE OF PRACTICES" means any change in
operational processes and practices, merchandise
assortments, presentation and/or advertising methods,
pricing policies and/or customer service policies
and practices that, in Sears sole opinion, is a
material change in Licensee's current and/or originally
proposed merchandising and marketing strategy for the
operation of the Concession;
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"COMMISSION" has the meaning given to it in Section
7.1;
"CONCESSION" means the business licensed by Sears
and operated by the Licensee, on behalf of Sears,
for the sole purpose of professionally procuring the
Products and Services under the Licensee's own name
and the presentation, marketing, merchandising and
sale of the Products and Services under the Sears
Trademark;
"CUSTOMERS" means any person or persons who avail
themselves of any product and/or service offered by
Sears or the Licensee pursuant to this Agreement;
"DESIGNATED MARKETING CHANNELS" means the Sears
marketing channels designated by Sears, as set
forth in Schedule "A" which may be amended by
Sears in writing from time to time, through which
Licensee is permitted to promote and operate the
Concession;
"DESIGNATED MARKETS" means the geographical
location and surrounding retail markets designated
by Sears, as set forth in Schedule "A" which may
be amended by Sears in writing from time to time,
in which the Licensee is permitted to operate the
Concession in a free standing specialty store or
mobile photography unit identified under the Sears
Trademark;
"DESIGNATED STORES" means the Sears retail
stores designated by Sears, as set forth in the
attached Schedule "A", which may be amended by
Sears in writing from time to time, in which
Licensee is permitted to operate the Concession;
"GROSS SALES" means the total amount of all
revenue generated by the sale of the Products and
Services sold by Licensee in association with the
Sears Trademark, through the Designated Marketing
Channels, including but not limited to, credit
card sales, cash, cheque, money orders, debit
card sales and the like;
"INFRINGEMENT" means any unauthorized use,
advertising, imitation or dilution of the Sears
Trademark or any trademark or name of Sears;
"TERM" has the meaning given to it in Section 6.1;
"LICENSED DEPARTMENTS" shall mean the physical
space and/or facility occupied by Licensee in
which Licensee shall operate the Concession under
the Sears Trademark;
"LICENSEE OBLIGATIONS" has the meaning given to
it in Section 14.6;
"LICENSEE'S CONFIDENTIAL INFORMATION" has the
meaning given to it in Section 18.2;
"MARKETING EXPENSES" has the meaning given to
it in Section 13.4;
"MERCHANT FEE" has the meaning given to it in
Section 10.6;
"MINIMUM ANNUAL COMMISSION" has the meaning given
to it in Section 7.1;
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"NET SALES" means Gross Sales less sales taxes,
goods and services taxes, returns, refunds, credits
and allowances paid or allowed by Licensee which
are necessary in connection with the operation of
the Concession;
"NORMAL BUSINESS HOURS" has the meaning given to
it in Section 4.11;
"OWNER" means Sears, ▇▇▇▇▇▇▇ and Co.;
"PRODUCTS AND SERVICES" means portrait studio
services including photographic portraits,
photographic greeting cards, passport photographs,
photographic copy and restoration, the sale of
frames and related products and services which shall
be restricted to that reasonably inferred by the
name Sears Portrait Studio, but shall not include
the sale of merchandise, products and/or services
which, in Sears reasonable opinion, competes with
merchandise, products and/or services being offered
for sale from time to time by Sears or by any other
licensee of Sears through the Designated Marketing
Channels, unless otherwise approved in advance by
Sears in writing;
"SEARS CONFIDENTIAL INFORMATION" has the meaning
given to it in Section 18.1;
"SEARS TRADEMARK" means the trademark SEARS and
any other or additional trademarks as set forth in
the attached Schedule "B", or any other trademark
or name of Sears which may be authorized, in
writing, for use from time to time, together with
such type styles, colour schemes and design matter
as Sears may designate in writing from time to time;
2.0 SCHEDULES
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2.1 The following attached Schedules form an integral
part of this Agreement:
Schedule "A"- Designated Marketing Channels,
Designated Markets and Designated
Stores;
Schedule "B"- Additional Sears Trademarks and/or
Licensee's Trademarks;
Schedule "C"- Statement of Understanding and
Acknowledgement; and,
Schedule "D"- Licensed Businesses on the Internet.
3.0 LICENSE - USE OF TRADEMARKS
---------------------------
3.1 OWNER OF SEARS TRADEMARK. Sears represents and warrants
and Licensee hereby acknowledges that the Sears Trademark is valid
and enforceable and is the sole and exclusive property of the Owner
and that Sears has the right to license the Sears Trademark to
Licensee. Sears is the Attorney-in-fact of the Owner in Canada
representing the Owner's interests in the Sears Trademark and as
such acts on behalf of the Owner in the supervision and control
of the use of the Sears Trademark in Canada by Licensee.
3.2 GRANT OF LICENSE FOR USE OF SEARS TRADEMARK BY LICENSEE.
Sears, both for itself and as Attorney-in-fact for the Owner,
hereby grants to Licensee a non-transferable and non-exclusive
right and license to use the Sears Trademark in Canada in association
with the presentation, marketing and sale of the Products and Services
through Designated Marketing Channels, in Designated Markets and in
Designated Stores on the terms and conditions herein contained.
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3.3 RIGHT, TITLE OR INTEREST. Except for the right to use
the Sears Trademark in accordance with the terms and conditions of
this Agreement, Licensee acknowledges that it does not now have nor
will it ever have, either during the Term and/or any renewal thereof,
any right, title or interest in the Sears Trademark. Licensee hereby
assigns to the Owner and Sears any rights it may have or claims to
have, in the Sears Trademark or any trademark including the word
Sears. Neither during the Term and/or any renewal thereof, nor at
any time after termination thereof, shall Licensee, either directly
or indirectly, dispute or contest the validity, enforceability or
ownership of the Sears Trademark or any Sears trade name incorporating
the word "Sears" or any other trade-▇▇▇▇ of Owner, attempt any
registration thereof, or attempt in any manner to dilute the value of
any goodwill attaching to the Sears Trademark. All uses of the Sears
Trademark pursuant to this Agreement and all goodwill resulting from
the Sears Trademark shall enure to the sole and exclusive benefit of
Owner and Sears. Subject to the limited license for use granted in
Section 3.2, Licensee shall never have any right, title or interest
in any goodwill associated therewith.
3.4 RIGHT TO USE ONLY. Except for the right to use the Sears
Trademark in accordance with the terms and conditions of this
Agreement, neither this Agreement nor the operation of the Concession
shall in any way give or be deemed to give to Licensee any other
right or interest in the Sears Trademark.
3.5 RESTRICTIONS ON USE OF THE SEARS TRADEMARK BY LICENSEE.
Except under separate agreement(s) entered into with the Owner
directly, Licensee shall not use the Sears Trademark outside Canada,
or in association with the procurement of the Products and Services,
or the operation of any business engaged in the procurement,
presentation, merchandising, marketing, provision and/or sale of
any products or services.
3.6 NO RIGHT TO ASSIGN USE OF SEARS TRADEMARK. The license
granted to Licensee hereunder is personal to it and may not be
assigned or transferred to any other person in whole or in part.
Licensee has no right to grant to any other person any permission,
license or sub-license to use the Sears Trademark independently
or on its behalf.
3.7 PRIOR APPROVAL ON USE OF SEARS TRADEMARK. All uses and
presentations of the Sears Trademark whether on signs, in
literature, in advertising or otherwise, shall be submitted by
Licensee to Sears, or to such person as Sears may designate,
for written approval prior to any use or presentation of the same.
3.8 ADVERTISING OF SEARS TRADEMARK. Licensee shall display
on all signs, literature and advertising on which the Sears
Trademark appears, and in such other manner as Sears may direct
from time to time, a notice similar to the following notice:
Sears(R)
(R)Registered Trademark of Sears licensed for use in Canada
3.9 USE OF SEARS TRADEMARK. Except as may be expressly
permitted by this Agreement, Licensee shall only use the Sears
Trademark as a trademark and only in the format in which the
Sears Trademark has been registered or filed for registration
and shall not use the word "Sears" or any other trademark belonging
to the Owner or Sears except as expressly permitted in this
Agreement or as otherwise approved in writing by Sears in advance
of such use.
3.10 PRESENTATION OF SEARS TRADEMARK. All uses and
presentations of the Sears Trademark by Licensee shall clearly
distinguish the Sears Trademark from any other trademark,
design or text appearing with it.
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3.11 RESTRICTIONS ON USE OF SEARS TRADEMARK. Except
as expressly permitted by this Agreement, Licensee shall
not use any trademark which is similar to, confusing with, or
which so nearly resembles as to be likely to cause confusion
with the Sears Trademark or any other trademark belonging to
the Owner or Sears in connection with the procurement,
presentation, merchandising, marketing and sale of the
Products and Services. Licensee shall never use the Sears
Trademark as part of any corporate, partnership, trade or
other name and shall not use the Sears Trademark in any other
way in connection with any business, corporation, partnership
or any other legal entity except for retail sales and marketing
of Products and Services to business customers or prospective
customers. Licensee shall never use the Sears Trademark in any
business to business or business to government transactions or
relationships in connection with the operation of the Concession,
except for retail sales and marketing of the Products and Services
to business or government customers or prospective customers.
Except as authorized herein all such business to business and
business to government transactions and relationships shall be
conducted solely under the Licensee's own name.
3.12 IRREPARABLE HARM CAUSED BY UNAUTHORIZED USE.
Licensee recognizes that the Sears Trademark possesses a
special, unique and extraordinary character which makes it
impossible to calculate the harm which the Sears Trademark
would sustain in the event of unauthorized use of the Sears
Trademark by Licensee. Licensee recognizes and agrees that
irreparable harm would be caused to Owner and/or Sears by
such unauthorized use and agrees that both interim and
permanent injunctive relief would be appropriate and should
be granted in the event of breach of this Agreement by the
Licensee in addition to any other remedies otherwise available
to Owner and/or Sears at law, in equity or otherwise.
3.13 PRESERVATION OF THE VALUE, VALIDITY, DISTINCTIVENESS
OF SEARS TRADEMARK. Licensee shall use its best efforts to
preserve the value, validity and distinctiveness of the Sears
Trademark and any registrations and applications for
registration thereof and shall provide Owner and/or Sears
with any information and other assistance as to the use of
the Sears Trademark which Owner and/or Sears may require
from time to time in order to assist Owner and/or Sears in
registering, protecting, enforcing or maintaining the Sears
Trademark. Licensee shall promptly notify Sears of any
infringement, unauthorized use, advertising, imitation,
dilution or other infringement of the Sears Trademark that
comes to its attention. Owner and/or Sears shall have the
sole right, at their own expense, to take such action as
they determine, in their sole discretion, to be appropriate
to protect and preserve the Sears Trademark. Licensee
hereby waives the provisions of s.50 (3) of the Trade-marks
Act, R.S.C., 1985, c. T-13 as amended and any similar
foreign legislation. Licensee undertakes to co-operate
and assist in such protest or legal action by Owner and/or
Sears at Owner's and/or Sears expense. If required by Owner
or Sears, Licensee shall join in such protest or legal action
at the Owner's and/or Sears expense. Licensee shall not
undertake such protest or legal action in regard to the
Sears Trademark on its own behalf. It is expressly
understood that, upon expiration or other termination of
Licensee's right to use the Sears Trademark for any cause,
nothing in this Agreement shall be construed as to prevent
Owner and/or Sears from protecting their respective rights
to the exclusive use of Sears Trademark against infringement
thereof by any party or parties, including Licensee.
3.14 CHANGES TO SEARS TRADEMARK. Owner and/or Sears
reserves the exclusive right to change the Sears Trademark
and designate such other or additional trademarks to be
licensed and used under this Agreement upon notice of such
change to Licensee. This Agreement shall be deemed to refer
only to such designated trademarks; provided, however, that
Licensee shall have a period of three (3) months within which
to change uses and advertising of the Sears Trademark to
efer only to the trademark so designated.
3.15 UPON TERMINATION OF AGREEMENT. Upon termination
of this Agreement or the
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Licensee's rights hereunder for any reason whatsoever,
with or without cause, Licensee shall immediately cease
all use of the Sears Trademark and shall not use the same
thereafter whether as a trademark or in advertising or
otherwise nor refer to itself as having been a former
licensed user of the Sears Trademark. Licensee will
forthwith execute any and all documents which Owner and/or
Sears may deem reasonable to confirm Owner and/or Sears
rights and to transfer to Owner and/or Sears all rights
in the Sears Trademark.
4.0 LICENSE - OPERATION OF THE CONCESSION
-------------------------------------
4.1 GRANT OF LICENSE TO OPERATE THE CONCESSION.
Subject to the terms and conditions of this Agreement,
Sears hereby grants to Licensee the non-transferable and
non-exclusive right to operate the Concession for the express
purpose of procurement, presentation, merchandising, marketing
and sale of the Products and Services through the Designated
arketing Channels in the Designated Markets and in the Designated
Stores under the Sears Trademark and identified by the name
"Sears Portrait Studio", provided that Licensee shall not offer
the same, similar or related services under any other trademark
or in any other business in Canada.
4.2 NO RIGHT TO ASSIGN OR TRANSFER WITHOUT SEARS PRIOR
WRITTEN APPROVAL. No part of the right granted to Licensee
under Section 4.1 shall be assigned or transferred to any other
party in any manner whatsoever. Licensee has no right to
authorize any party to operate the Concession or procure,
present, merchandise, market or sell the Products and Services
licensed under this Agreement on its behalf without the prior
written consent of Sears, which consent may be withheld in the
sole discretion of Sears.
4.3 LICENSEE TO GUARANTEEC COMPLIANCE. Licensee guarantees
the full and faithful performance by itself and by its employees,
agents, designees and servants of all of the terms and conditions
contained in this Agreement.
4.4 LICENSEE TO DEFEND SEARS AGAINST ALL CLAIMS, DEMANDS,
ETC. Licensee agrees to protect, defend, hold harmless and
indemnify Owner and Sears from and against any and all claims,
demands, damages, expenses (including legal fees and disbursements),
losses, actions, causes of action, judgements, fines, penalties,
fees, suits and proceedings of any kind whatsoever, actually or
allegedly, resulting or arising from or in connection with the
operation of the Concession including any actual or alleged
infringement of any patent, trademark, copyright, confidential
relationship, trade secret or other proprietary right of third
parties and including any dispute between or among Licensee,
its employees, designees, suppliers and any third parties,
Customers or any of them.
4.5 QUALITY OF PRODUCTS AND SERVICES TO BE PROVIDED BY
LICENSEE. The Products and Services procured, presented,
merchandised, marketed and sold by Licensee shall be of a high
quality and in compliance with all applicable legislative,
regulatory and/or industry requirements. Sears shall have
the right to inspect all aspects of the procurement, presentation,
merchandising, marketing and sale of the Products and Services
from time to time to ensure that the quality of such activities
and the Products and Services meets its approval.
4.6 QUANTITY OF PRODUCTS AND SERVICES TO BE PROVIDED BY
LICENSEE. The quantity of inventory of the Products and
Services offered for sale by Licensee shall, in Sears
reasonable opinion, be sufficient to ensure the Licensee
has the ability to present the Products and Services in a
professional and competitive manner and to achieve maximum
sales through each individual Designated Marketing Channel
in each Designated Market and Designated Store.
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4.7 ASSORTMENT OF PRODUCTS AND SERVICES TO BE
OFFERED FOR SALE BY LICENSEE. The assortment of Products
and Services shall, in Sears reasonable opinion, be
competitive, reflect the needs of the Customers and be
of a breadth and depth as required to have the potential
to achieve maximum sales through each individual
Designated Marketing Channel in each Designated Market
and Designated Store.
4.8 PRICING OF PRODUCTS AND SERVICES OFFERED FOR
SALE BY LICENSEE. The Products and Services offered
for sale by the Licensee shall, in Sears and Licensee's
reasonable opinion, be priced competitively in the retail
market and shall reflect Sears own pricing strategy
within that retail market to ensure each individual
Designated Marketing Channel, Designated Market and
Designated Store has the potential to achieve maximum
sales and supports Sears position in the marketplace
as offering Customers recognized superior values.
4.9 SUPERVISION OF THE OPERATION OF THE CONCESSION.
Licensee understands, acknowledges and agrees that the
proper conduct and operation of the Concession by Licensee
is of paramount importance to Owner, Sears and Licensee.
Therefore, in order to protect and enhance the reputation
and goodwill of Owner, Sears and Licensee, in order to
develop and maintain high and uniform standards for all
aspects of operation of the Concession, and in order to
increase the demand for the Products and Services,
Licensee agrees to supervise the performance of its
employees to ensure that the procurement, presentation,
merchandising, marketing, pricing and sale of the Products
and Services as well as the provision of exemplary customer
service meets or exceeds the requirements of this Agreement.
4.10 PROCESSES AND POLICIES. Licensee shall employ
policies and practices in the operation of the Concession as
documented and/or as contemplated at the time of the execution
of this Agreement and shall not implement any Change of
Practices that in Sears sole opinion, does not complement
the corporate direction, policies and practices of Sears
in Sears procurement, merchandising, marketing, pricing and
sale of the Sears merchandise selection through Designated
Marketing Channels in Designated Markets and Designated
Stores without Sears prior written approval.
4.11 NORMAL BUSINESS HOURS. The Licensed Departments
in Designated Stores and the Licensed Departments located
in free standing specialty stores in Designated Markets
shall be open for business and the Products and Services
will be provided for sale to Customers by fully qualified
Licensee's employees during the same business hours
maintained by the Designated Stores and/or the mall hours
in the Designated Markets respectively, the ("Normal
Business Hours"), except to the extent prevented by
circumstances beyond the control of Sears or Licensee, or
as Sears and Licensee may otherwise agree upon in advance
in writing.
5.0 GOODWILL
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5.1 GOODWILL GENERATED BY THE OPERATION OF THE CONCESSION.
All goodwill in, or which may be generated by the operation
of the Concession shall enure to the sole and exclusive benefit
of Owner and Sears and shall reside in the Sears Trademark.
Licensee shall not have any right, title or interest in said
goodwill. For greater certainty, Licensee hereby unconditionally
and irrevocably transfers and assigns to Owner and Sears any and
all rights it may have or may claim to have, now and in the
future, to said goodwill.
5.2 CUSTOMER LISTS AND CUSTOMER INFORMATION. Owner and
Sears goodwill shall always include the exclusive right to and
interest in Customer information, including Customer
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lists, which lists and information shall be immediately
transferred in its entirety by Licensee to Sears upon
expiration or termination, for any reason, of this Agreement.
6.0 TERM
----
6.1 THE TERM. Subject to the terms and conditions of
this Agreement the term of this Agreement shall be for a period
of three (3) years commencing the 1st day of January, 2003 and
ending December 31st, 2005 (the "Term").
6.2 TERM FOR ADDITIONAL OPPORTUNITIES. In the event
additional Sears general merchandise retail stores, Sears
speciality stores, Sears catalogues, Sears direct marketing
media, Sears Internet web site or any other Sears identified
Designated Marketing Channels are added to Schedule "A" during
the Term or any renewal thereof, the term of this Agreement for
such additions shall be the remaining length of the Term and/or
any renewal thereof.
7.0 COMMISSION
----------
7.1 COMMISSION AND RATE. In consideration of the rights
granted to Licensee under the terms, provisions and conditions
of this Agreement Sears shall be entitled to receive from
Licensee and Licensee shall pay to Sears:
(a) in the first Sears fiscal year of this Agreement
(2003);
(i) the greater of, Four Million Four Hundred
Thousand Dollars ($4,400,000.00) (the
"Minimum Annual Commission"), or the sum
total of the commissions calculated pursuant
to paragraph 7.1 (a) (ii) plus 7.1 (a) (iii)
below
(ii) Thirteen per cent (13%) of the first Thirty
Million Dollars ($30,000,000.00) annual Net
Sales generated in the Licensed Departments
in Designated Stores based on Sears fiscal
calendar); and,
(iii) Eight percent (8%) on all annual Net Sales
generated in excess of Thirty Million
Dollars ($30,000,000) generated in the
Licensed Departments in Designated
Stores (based on Sears fiscal calendar);
plus;
(iv) Five percent (5.0%) of all other Net Sales
generated under the Sears Trademark from
locations or premises outside of the
Designated Stores in addition to the greater
of the Minimum Annual Commission or the
commission calculated under Sections 7.1(a)(ii)
and 7.1 (a) (iii);
(b) In the second and third Sears fiscal years of this
Agreement (2004 and 2005 respectively);
(i) Thirteen per cent (13%) of the first Thirty
Million Dollars ($30,000,000.00) annual Net
Sales generated in the Licensed Departments
in Designated Stores (based on Sears fiscal
calendar); plus,
(ii) Eight percent (8%) on all annual Net Sales
generated in excess of Thirty
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Million Dollars ($30,000,000) generated in the
Licensed Departments in Designated Stores
(based on Sears fiscal calendar); plus,
(iii) Five percent (5.0%) of all other Net Sales
generated under the Sears Trademark from
locations or premises outside of the Designated
Stores;
(collectively, the "Commission"), and payable as contemplated
by Sections 7.3 and 7.4.
7.2 REPORTING OF NET SALES. Licensee shall use:
(a) its own point of sale registers which shall be
interfaced with the Sears point of sale processing
system to record the Net Sales generated by the sale
of the Products and Services in Licensed Departments
in Designated Stores. Sears shall provide Licensee
with a daily change fund and all sales proceeds
will be processed on a daily basis through the
administrative services office in the Designated
Stores. An account will be kept by Sears of all
such Net Sales and Sears shall have the right to
retain out of such Net Sales the Commission to be
paid by Licensee to Sears, together with any and
all other monies that may be due under this
Agreement; and,
(b) its own point of sale register and point of sale
processing system to record the Net Sales generated
by the sale of the Products and Services generated
from locations or transactions generated outside
of Licensed Departments in Designated Stores. In
these circumstances Licensee shall provide its own
daily change funds and shall process its own
sales receipts on a daily basis through its own
administrative processes and Licensee shall be
solely responsible for such change funds and for
all such sales receipts.
7.3 COMMISSION SETTLEMENT PROCESS.
(a) for Net Sales recorded through Sears point of sale
processing system in Licensed Departments in
Designated Stores, Sears agrees to pay to Licensee
an interim remittance equal to eighty-seven percent
(87%) of the Net Sales of the first (1st) two (2)
fiscal weeks, during the fourth (4th) fiscal week of
each monthly fiscal period. Sears, after first
retaining all monies due and owing to Sears under
the terms of this Agreement out of the Net Sales,
shall prepare a settlement between Licensee and
Sears for each Sears monthly fiscal period and shall
remit the monies remaining from the Net Sales to
Licensee within twelve (12) working days of the end
of each monthly fiscal period; and,
(b) for Net Sales generated outside of Licensed
Departments in Designated Stores, Licensee shall
prepare and submit to Sears a daily Gross Sales and
Net Sales statement and a weekly settlement,
including all supporting sales documents, in a
manner and form as Sears may reasonably request,
and shall pay Sears all monies due and owing to
Sears under the terms of this Agreement.
Licensee shall remit said monies owing to Sears
within ten (10) working days of the end of each
calendar week period in a manner and form which
Sears may reasonably request.
7.4 SETTLEMENT OF MINIMUM ANNUAL COMMISSION. If, at
the end of the first Sears fiscal year, during the Term, the
Commission paid is less than the Minimum Annual Commission,
Sears shall calculate the difference and shall deduct the
calculated difference from the last fiscal monthly settlement
of the first fiscal year. In the event the amount of funds
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available to Sears from the last fiscal monthly settlement is
not sufficient to retire the amount owed by Licensee to Sears,
Sears shall advise Licensee and Licensee shall immediately pay
uch shortfall to Sears.
7.5 WITHHOLDING ON TERMINATION. Notwithstanding the
provisions of Section 7.3, upon termination of this Agreement
by either party for any reason, Licensee agrees that Sears may
withhold any monies due and owing to Licensee which Sears in
good faith believes will be required to satisfy customer
adjustments, payment for Sears provision of any prepaid
services pursuant to Section 10.5 and/or any other amounts
owed to Sears by Licensee, including but not limited to monies
owing from Sears to Licensee from any outstanding settlement
of Licensee's sales to Customers made on Sears credit plans,
for a period of one hundred and eighty (180) days from the
said termination date, in order to ensure the fulfillment of
any reasonable adjustments to Customers by Sears. Such
adjustments will be detailed by Sears and will be deducted
from monies owing to Licensee. A final settlement will be
made to Licensee within twelve (12) working days of the
expiration of the one hundred and eighty (180) day
withholding period.
8.0 FACILITIES, EQUIPMENT, AND MERCHANDISE
--------------------------------------
8.1 LICENSEE TO FURNISH AND INSTALL FIXTURES, FURNITURE
AND EQUIPMENT. Licensee shall, at its sole expense, furnish
and install safe and modern leasehold improvements, fixtures,
counters, shelves, furniture and equipment suitable and
necessary for the professional operation of the Concession in
all Designated Marketing Channels. Such leasehold improvements,
fixtures, counters, shelves, furniture and equipment located
in Designated Stores shall be in keeping with the Designated
Stores' appearance. All such leasehold improvements, furniture,
fixtures, equipment, operating supplies, materials, products
and merchandise shall be subject to the written approval of Sears.
8.2 LICENSEE TO PROVIDE PLANS AND DRAWINGS. Licensee
shall, at its sole expense, provide all construction,
electrical, plumbing and elevation plans and drawings required
by Sears, in a manner and quantity specified by Sears, for the
construction of the Licensed Departments in Designated Stores
and the construction, electrical, plumbing and elevation plans
and drawings required by a landlord for the construction and
the plans required by the cities, municipalities, provinces,
erritories and federal governments for the operation of
Licensed Departments in Designated Markets where the Licensed
Departments are not located in Designated Stores.
8.3 LICENSEE TO PROVIDE LEASEHOLD IMPROVEMENTS. Except
only for those specific leasehold improvements in Licensed
Departments in Designated Stores which Sears has agreed to
provide, at Sears costs as detailed in Section 8.8 herein,
Licensee shall, at its expense, be responsible for the cost
of the supply, construction and installation of all leasehold
improvements to the Licensed Departments as requested by
Licensee and approved in writing by Sears, including but not
limited to:
(a) the cost to raise, lower or change the construction
of the ceiling above or below Sears store standard
height;
(b) the cost to extend, shorten, replace or move
existing sprinkler systems and heating/air
conditioning ducts required to accommodate
Licensee's request to raise, lower or change the
construction of Sears store standard selling
floor ceilings;
(c) the additional cost of, and any additional
installation costs of the requested and
11
approved Sears non-standard store floor coverings;
(d) the cost of, and the installation cost of, any
lighting, including but not limited to track
lighting, spot lighting, pot lighting and flood
lighting which is in addition to the Sears store
standard ceiling lighting;
(e) the cost of, and the installation cost of, any
additional leasehold improvements that are
particular to, and are required for the operation
of the Concession;
(f) the cost of, construction cost of, and the
installation cost of, specific trims or decorative
treatments to enhance the overall presentation of
the Licensed Departments in Designated Stores;
(g) the cost of, construction cost of, and the
installation cost of, all plumbing and plumbing
fixtures including Licensee requested and Sears
approved employee and/or Customer washrooms; and,
(h) the cost of, construction cost of, and the
installation cost of electrical panels, wiring,
computer wiring, data lines and fixtures, that
are specifically required for the operation of
the Concession.
8.4 ADDITIONAL IMPROVEMENTS. Licensee shall, at its
sole expense, furnish and install furniture, fixtures and
equipment not specifically included in Section 8.1 hereof,
so as to furnish and equip the Licensed Departments in
Designated Markets and Designated Stores with safe, modern,
sanitary and proper furniture, fixtures and equipment
suitable for the operation of the Concession. All such
leasehold improvements and furniture, fixtures and equipment
shall be subject to the written approval of Sears.
8.5 CAPITAL COSTS OF LICENSED DEPARTMENTS OUTSIDE
DESIGNATED STORES. For greater clarification Licensee shall
be solely responsible for all capital costs associated with
the installation, identification and the operation of any
free standing or mobile Licensed Department located outside
Designated Stores. Such locations, mobile units, leasehold
improvements and identification shall be subject to the
written approval of Sears.
8.6 LICENSEE TO MAINTAIN FURNITURE, FIXTURES AND
EQUIPMENT, ETC.. Licensee shall maintain all furniture,
fixtures, equipment in good working order, good repair and
in keeping with Sears presentation standards, in the Licensed
Departments in Designated Markets and Designated Stores.
8.7 LICENSEE TO REMODEL LICENSED DEPARTMENTS. Sears
may from time to time require Licensee to, and Licensee shall
at its expense, remodel the Licensed Departments with new
and/or updated furniture, fixtures and equipment to maintain
an appropriate overall presentation in keeping with Sears
presentation standards either in conjunction with a
remodelling of Designated Stores, the Licensed Departments
or at any other time as may be required.
8.8 SEARS TO PROCIDE. Sears shall, at its expense,
except as set out hereunder, provide, construct and install
the following with respect to the Licensed Departments in
Designated Stores:
(a) erect, finish and paint all perimeter and interior
standard walls and doors as requested on Licensee
supplied plans. In the event that Licensee elects
to provide, at its expense, paper or vinyl wall
coverings approved by Sears, then Sears will, at
its expense, apply said wall coverings in lieu of
the finish coat of
12
paint;
(b) standard heating/air conditioning ducts and
sprinklers required by local building code and
as approved by Sears;
(c) suspended ceiling at the height of, and in
keeping with, the ceiling generally installed
throughout the Designated Store;
(d) standard floor coverings appropriate to, and in
keeping with, the general standards of decor for
the Designated Store;
(e) the boxing, finishing and painting of columns
within the Licensed Departments in Designated
Stores;
(f) Sears standard Licensed Department identification
lettering. In the event that Licensee elects,
with the prior written approval of Sears, to provide
at Licensee's sole cost other Licensed Department
identification Sears will install same at Licensee's
sole expense;
(g) standard in ceiling lighting as per the general
standard of lighting for the Designated Store;
(h) standard electrical wiring to and within the
Licensed Departments, including only Designated
Store standard switches, receptacles and covers;
and,
(i) water lines and drain lines for sinks up to the
exterior wall of the Licensed Departments.
8.9 LICENSEE TO ASSUME ALL OPERATING COSTS. Licensee
shall assume and be responsible for, to the complete
exoneration of Owner and Sears, all tenant and/or other
responsibilities owed to third parties for the operation of
the Concession in Licensed Departments located and/or
operated outside Designated Stores.
8.10 LICENSEE TO PROVIDE VEHICLES, TOOLS, EQUIPMENT,
COMPUTERS AND SOFTWARE. Licensee shall, at its sole expense,
provide all vehicles, tools, equipment, computer hardware
and software, supplies and all items as may be necessary for
the establishment and ongoing professional operation of the
Concession in all Designated Marketing Channels.
8.11 LICENSEE TO UPDATE OF FURNITURE, FIXTURES AND
EQUIPMENT, VEHICLES, ETC. Licensee shall, at its sole
expense, update or replace all furniture, fixtures,
equipment, vehicles, computer hardware and software as
necessary to operate the Concession in a professional and
competitive manner in all Designated Marketing Channels.
8.12 SEARS TO MAINTAIN WALLS, CARPETS AND CEILINGS.
In Licensed Departments located in Designated Stores Sears
shall at its sole expense monitor, inspect and maintain
painted walls, floor coverings and ceiling tiles in good
condition and repair to the standard of the Designated Store
in which the Licensed Department is located.
9.0 UTILITIES, JANITORIAL AND MAINTENANCE SERVICES,
-----------------------------------------------
TELEPHONE SERVICE, SUPPLIES, ETC.
---------------------------------
9.1 UTILITIES. In Licensed Departments located in
Designated Stores, Sears shall provide to Licensee heat,
light, electric current and air conditioning in Licensed
Departments as
13
generally provided by Sears to other selling departments
throughout the Designated Stores. The provision and cost
of all requirements for the operation of the Concession
including but not limited to heat, light, electric current
and air conditioning required for the operation of the
Concession outside of Licensed Departments in Designated
Stores, through any other Designated Marketing Channel,
shall be the sole responsibility and expense of the Licensee.
9.2 JANITORIAL AND MAINTENANCE SERVICE.
(a) In Licensed Departments in Designated Stores
Sears shall provide the emptying of wastebaskets,
floor cleaning including the vacuuming of carpets,
the dry and/or damp mopping of hard surface floors,
replacement of store standard equipment light bulbs
and the touch-up of and/or periodic re-painting of
walls, all to the same level of service as provided
to Sears own selling departments for Licensed
Departments in such Designated Stores;
(b) Licensee shall provide at Licensee's sole expense
any additional levels of janitorial and/or maintenance
services that it may require for the professional
operation of the Concession and/or the upkeep of the
Licensed Department's presentation in Designated
Stores and shall provide at Licensee's sole expense
all janitorial and maintenance services, including
but not limited to those in Section 9.2 (a), required
for the professional operation of the Concession
outside of the Licensed Departments in Designated
Stores through any other Designated Marketing Channel.
9.3 TELEPHONE SERVICE. Sears shall provide basic
telephone service to the Licensed Departments in the Designated
Stores provided that Licensee reimburses Sears for the cost of
such telephone service, including a prorated share of central
switchboard expenses. Licensee's share of the costs shall be
Forty Dollars ($40) per month, per telephone installed in the
Licensed Departments in the Designated Stores. This cost may
be adjusted by Sears, at Sears sole discretion, acting reasonably,
upon thirty (30) days written notice to Licensee. Licensee shall
have sole responsibility for all costs for all telephone or
information service lines required for the operation of the
Concession through Licensed Departments located outside
Designated Stores through any other Designated Marketing Channel.
9.4 SUPPLEMENTAL TELEPHONE AND/OR COMMUNICATION SERVICES.
Licensee may, after requesting and receiving Sears approval in
writing, and at Licensee's sole cost, arrange for the
installation of additional direct telephone or information
service lines as required for the operation of the Concession
in Designated Stores.
9.5 OPERATIONAL SUPPLIES. Licensee shall provide at
Licensee's sole expense all operating supplies, materials,
products and merchandise that it deems necessary for the
professional operation of the Concession in all Designated
Marketing Channels. Notwithstanding the foregoing, Sears
shall provide at Sears expense Sears standard customer
product bags and boxes to Licensed Departments in Designated
Stores. Licensee shall be responsible, at Licensee's sole
cost, to order from the Sears approved supplier, Sears
approved customer bags and boxes as required for the
operation of all Concessions operated outside Licensed
Departments in Designated Stores.
9.6 NO LIABILITY. Sears shall not be liable to
Licensee nor shall Licensee be able to claim compensation
of any kind for Sears inability from time to time to provide
Licensee with the services specified in this Article 9.0
except claims arising from injury to Customers or employees
arising from Sears failure to provide the services outlined
in Sections 9.1 and 9.2 of this Agreement.
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10.0 CASH AND CREDIT SALES
---------------------
10.1 SALES - GENERAL. Subject to the terms and
conditions of this Agreement all sales generated from the
operation of the Concession shall be made only on Sears
regularly established credit plans, Sears approved
third-party credit plans, debit card, cash, Sears gift
cards, Sears merchandise certificates, Licensee's gift cards
and certificates and cheque or money order made payable to
Sears if recorded through a Sears point of sale processing
system or made payable to Licensee if recorded through
Licensee's own point of sale processing system. Any fund
shortages between that recorded at the point of sale and that
actually remitted or reported to Sears shall be the
responsibility of Licensee.
10.2 CREDIT SALES. Licensee shall accept payments
from Customers on Sears regularly established credit plans
or on Sears approved third-party credit plans provided that:
(a) approval of the appropriate Sears Credit Central
shall be obtained by Licensee for each individual
credit sale on a Sears regularly established
credit plan, such approval to be granted at the
sole discretion of the appropriate Sears Credit
Central;
(b) approval of the appropriate authorization location
shall be obtained by Licensee for each individual
credit sale on a Sears approved third-party credit
plan and the authorization number, Customer's full
account number, expiry date and Customer's name
shall be shown;
(c) no part of the carrying or interest charge which
may be levied by Sears in connection with any credit
sale on a Sears regularly established credit plan,
or by any third party on any Sears approved
third-party credit plan shall be payable to or
credited in any way to Licensee;
(d) Licensee acknowledges and agrees that it shall be
responsible for and charged with any losses on
any credit sale for which the proper approval
procedures have not been followed; and
(e) Licensee shall comply with all federal and
provincial laws governing credit sales and their
solicitation, including but not limited to
provisions dealing with disclosure to Customers,
finance charges and the like.
10.3 CASH, CHEQUES, AND MONEY ORDERS. Although Sears
does not encourage the use of cheques or money orders for
payment of any products or services offered for sale in its
retail stores, in the event Licensee is required to use:
(a) its own point of sale processing system Licensee
shall accept payments from Customers in cash or may
choose, entirely at Licensee's sole responsibility,
to accept payment in the form of cheques or money
orders made payable to Licensee. Sears Commission
shall not be effected by any fund shortages or the
inability of Licensee to collect on unpaid or
returned Customer cheques or money orders; or
(b) a Sears point of sale processing system, Licensee
shall accept payments from Customers in cash and
may choose to accept payment in the form of
cheques or money orders made payable to Sears,
provided that:
15
(i) Licensee ensures that all cheques are
properly completed with the current date,
the correct amount (in both locations),
Customers address, telephone number, Sears
account number or driver's license number
and Customer's signature;
(ii) cheques which are deficient in any of the
above requirements shall be returned to
Licensee and Licensee shall reimburse Sears
for any loss, including any Commission lost
as a result of Licensee's failure to obtain
properly completed cheques;
(iii) any and all losses which may be sustained
by Sears by reason of non-payment of any
cheque upon presentment shall be borne by
and charged to Licensee and Sears shall have
no liability with respect thereto. Sears may
make whatever effort it deems reasonable to
collect on such cheques prior to returning
said cheques to Licensee;
(iv) Licensee shall be accountable to Sears, at all
times, for the full amount of all cash, cheque
or money order payments made by Customers.
Any shortage in or manipulation of such payments
will be deemed to be a misappropriation of funds
and will be cause for immediate termination of
this Agreement, in whole or in part, by Sears
under the provisions of Subsection 20.7 (o) and
20.7 (p) hereof; and
(v) Sears Commission shall not be effected by fund
shortages or the inability of Licensee to
collect on unpaid or returned Customer cheques
or money orders.
10.4 SEARS GIFT CARDS AND MERCHANDISE CERTIFICATES.
Licensee shall accept all Sears gift cards and merchandise
certificates as accepted by all other Sears merchandise
departments as payment for Products and Services. Licensee
shall follow Sears policies and procedures for the acceptance
of such Sears gift cards and merchandise certificates.
10.5 FUTURE SERVICES, DOWN PAYMENTS. Licensee shall not
▇▇▇▇ or accept payment from a Customer for any Products and
Services, to be performed or provided in the future, except
Licensee may accept payment for enrolment fees for Licensee's
SmileSavers program and for Licensee's gift cards or
certificates provided Licensee shall provide Sears with a
performance bond or an irrevocable letter of credit in Sears
favour in an amount equal to the outstanding liability of Licensee
to Customers represented by the pre-payment for
services through the Customer's purchase of such the
SmileSaver program and the Licensee's gift cards and certificates.
Unless otherwise previously approved in
writing by Sears, Licensee shall not charge Customers for
down payments or for estimates or proposals.
10.6 FEES CHARGED BY SEARS CREDIT PLANS. In the event
Licensee chooses, or is required to use, its own point of
sale processing system, Licensee agrees to pay, and Sears
shall have the right to deduct, a fee based on a percentage
of each Gross Sale processed through any Sears credit plans
including sales made to Customers on the Sears Card ("Merchant Fee").
The Merchant Fee charged shall be negotiated, prior to acceptance of
the Sears Card as a method of payment by the Customer, and an
agreement with respect to the Merchant Fee must be signed between
Licensee and Sears Corporate Credit Department 753.
10.7 FEES CHARGED BY THIRD PARTY CREDIT CARD PLANS. In
the event Licensee chooses, or is required to use, its own
point of sale processing system, Licensee agrees to pay all
installation, communication and third party credit card fees
as provided for in Licensee's independent agreement with third
party credit service providers.
16
10.8 SEARS CREDIT SERVICES. Licensee shall make
reference in any advertising of the Products and Services
available through all Designated Marketing Channels, that
Sears credit services are available. Such advertising shall
be subject to the prior approval of Sears as outlined in
Section 13.3.
11.0 LICENSEE'S EMPLOYEES AND EMPLOYEE DISCOUNTS
-------------------------------------------
11.1 STAFFING OF BUSINESS. Licensee shall at all times
staff the operation of the Concession with sufficient,
qualified, competent, well trained, professional personnel,
who shall demonstrate the morals, safe work habits and
attitudes necessary to produce and maintain good relations
with Customers.
11.2 SUB-CONTRACTIONG/ SUB-LICENSING. Licensee shall
not authorize any person other than its own employees to
perform any of Licensee's obligations under this Agreement
on Licensee's behalf without the prior written consent of
Sears. Such consent may be given or withheld in the sole
discretion of Sears.
11.3 EMPLOYEE RELATIONS. Licensee shall have the sole
and exclusive control over labour and employee relations
and policies relating to wages, hours of work and working
conditions of its own employees. Licensee shall have the
sole and exclusive right to hire, transfer, suspend, lay off,
recall, promote, assign, discipline, adjust grievances and
discharge said employees, provided, however, that at any time
if Sears so requests, Licensee shall remove from the operation
of the Concession in any Designated Marketing Channel any
employee as contemplated by Section 11.12.
11.4 SUPERVISION OF EMPLOYEES. Licensee shall
diligently supervise its employees in order to protect and
enhance the reputation and goodwill of Owner, Sears and
Licensee, to develop and maintain high and uniform standards
for all aspects of the operation of the Concession and to
increase the demand for the Products and Services. Licensee
shall be solely responsible for the acts of its employees
and agents in the performance and operation of the Concession
during the Term and/or any renewal thereof.
11.5 LICENSEE'S RESPONSIBILITY FOR COMPENSATION, ETC.
Licensee shall have and agrees to assume complete
responsibility for all salaries, other compensation or
employee benefits, of all of its employees and shall make
all necessary salary deductions and withholdings from said
employees' salaries and other compensation. Licensee
assumes full responsibility for the payment of any and all
contributions, taxes and assessments including any applicable
Workers' Compensation or Workplace Safety and Insurance
legislation and shall meet all requirements of the Employment
Insurance and federal and provincial or territorial income tax
and pension plan laws. Licensee shall, at Sears reasonable
request, provide evidence to Sears that all payroll obligations
to employees have been met in a timely and appropriate manner
and that all deductions, withholdings and payments of taxes,
contributions and assessments have been duly made by Licensee
as required by law. Licensee further agrees to provide Sears,
at Sears request, with a list of the range of salaries and
benefits provided to its employees involved in the operation
of the Concession.
11.6 NO ENTITLEMENT TO SEARS EMPLOYEE BENEFITS. None of
the employees, directors, officers or shareholders of Licensee
are entitled to any of the benefits that Sears provides for
Sears employees, including, but not limited to, disability
insurance, group insurance, pension plan, holiday pay, paid
vacation, discount privileges or other benefit plans.
11.7 RULES, REGULATIONS, ETC. Licensee represents and
warrants that Licensee and
17
Licensee's employees, while operating the Concession under
this Agreement, will comply with any and all federal,
provincial, territorial and local laws, regulations and
ordinances and industry standards applicable to such
operations and will comply with Sears general rules and
regulations which are in effect from time to time in the
Designated Stores relating to the conduct of employees in
the Designated Store.
11.8 UNDERSTANDING OF EMPLOYMENT FORM. No employees
of Licensee shall be considered to be employees or agents
of Sears. Licensee shall have all its employees, engaged
in the operation of the Concession under this Agreement,
sign an Understanding of Employment form, a sample of which
is attached as Schedule "C" hereto, and shall provide a copy
of all such completed forms to the Sears Human Resources
Department in the Designated Stores prior to the employee's
engagement in the operation of the Concession in the
Designated Stores.
11.9 LICENSEE'S EMPLOYEE DISCOUNT AT SEARS. Sears agrees
to grant a discount of fifteen per cent (15%) on all personal
purchases made from the Designated Stores, by employees of
Licensee working on a regular schedule and reporting to work
exclusively at the Licensed Departments located in the
Designated Stores and whose employment is solely dedicated
to the operation of the Concession in the Designated Stores.
Such discount shall be allowed under the terms and conditions
as specified by Sears in the Sears Personnel Manual, Employee
Discounts section (Paragraphs 4-6) and in any updates or
revisions thereto.
11.10 SEARS EMPLOYEE DISCOUNT. Licensee shall grant a
discount of fifteen per cent (15%) to all Sears employees
and retirees, in addition to all price reductions, promotions
and/or discounts offered to Customers who are not Sears
employees, on all the Products and Services purchased by
Sears employees and retirees.
11.11 LICENSED DEPARTMENT IDENTIFICATION CARD. When
dealing with Customers, Licensee's employees operating the
Concession shall have available on their person and offer as
identification when requested by Customers, an identification
card issued by Sears. Licensee shall have, and hereby accepts,
responsibility for the control and distribution of such
identification cards to ensure they are only held by current
employees of Licensee active in the operation of the Concession.
Such control shall include the repossession and return to Sears
of identification cards from persons who are no longer active
in the operation of the Concession including those who are no
longer employed by Licensee. In the event the identification
cards not repossessed by the Licensee from its employees who
are no longer solely involved in the operation of the Concession,
or those individuals that no longer are in the employ of the
Licensee, are used to obtain a discount from Sears, Licensee
shall be responsible for the amount of any such discount granted
by Sears in the course of honouring such un-repossessed
identification cards.
11.12 Removal of Employees, Contractors, Etc. at Sears
Objection. Sears, acting reasonably and in accordance with
its own employment practices, may request Licensee to remove
from the operation of the Concession any employee, agent,
contractor or subcontractor of Licensee who is objectionable
to Sears for reasons of safety or security of Customers,
employees or merchandise, or whose manner, in Sears sole
judgement, impairs Owner's or Sears goodwill or Customer
relations. In such cases where:
(a) Licensee has the right under applicable law to
remove the employee, agent, contractor or subcontractor for
cause, Licensee shall do so immediately and if Licensee
refuses to remove such employee, agent, contractor or
subcontractor Sears shall have the right, at its sole option,
to terminate this Agreement or to amend Schedule "A" to
terminate the right to operate the Concession in the
Designated Marketing Channel and/or the Designated Market
and/or the
18
Designated Store where such employee, agent, contractor or
sub-contractor is involved; or
(b) Licensee is required by applicable law to provide
said employee, agent, contractor or subcontractor an
opportunity to remedy his or her conduct through a process
and over a specified reasonable period of time, Licensee
shall do so and monitor the situation and in the event the
situation which caused Sears to request the removal of the
employee, agent, contractor or sub-contractor from the
operation of the Concession is not remedied to Sears sole
satisfaction, acting reasonably, within the specified
period of time and Licensee refuses to remove such employee,
agent, contractor or subcontractor, Sears shall have the
right, at its sole option, to terminate this Agreement or
to amend Schedule "A" to terminate the right to operate the
Concession in the Designated Marketing Channel and/or the
Designated Market and/or the Designated Store where such
employee, agent, contractor or sub-contractor is involved.
11.13 SEARS MAY WITHHOLD AND PAY MONIES. Licensee agrees
that in order to protect the goodwill of Owner, Sears and
Licensee it is imperative that Licensee meet its payroll
obligations to its employees in a timely manner and in the
normal course of business. In the event Licensee fails to
meet its payroll obligations in a timely manner in the
normal course of business and an employee or former employee
of Licensee makes representation to Sears as to wages owed
as a result of employment in connection with the operation
of the Concession Sears may immediately, after notifying
Licensee of such representation, withhold the amount of such
wages owed from the settlement with Licensee and make payment
of such wages to the employee and/or former employee on behalf
of the Licensee.
12.0 CUSTOMER RELATIONS AND ADJUSTMENTS
----------------------------------
12.1 CUSTOMER SATISFACTION POLICY. Licensee shall at
all times treat all Customers fairly and courteously and
shall maintain a policy of "Satisfaction or Money Refunded".
12.2 CUSTOMER COMPLAINTS. Licensee agrees to resolve
all complaints and controversies with Customers in a manner
fully satisfactory to Sears. In any case in which the
resolution of any complaint or controversy is unsatisfactory
to Customers, Sears shall have the right, after discussing
the complaint or controversy with Licensee or Licensee's
employees, to make such adjustment as Sears may deem necessary
in the circumstances at Licensee's expense, and any adjustment
made by Sears, even when in excess of the selling price of the
product or service in question, shall be conclusive and binding
upon Licensee. Sears may deduct the amount of any such adjustment
from any monies payable to Licensee. Licensee shall maintain and
make available to Sears upon request all files pertaining to
Customer complaints and adjustments made to Customer accounts.
13.0 PROMOTIONS, ADVERTISING, PUBLICITY
----------------------------------
13.1 LICENSEE TO ADVERTISE. Licensee shall, subject to
the terms and conditions of this Agreement, actively advertise
and promote the sale of the Products and Services authorized
by this Agreement to maximize the full sales potential of the
Products and Services through each Designated Marketing
Channel. Licensee agrees to spend on an annual basis, not
less than eight percent (8%) of the planned annual Net Sales
on advertising the Products and Services available through the
Designated Marketing Channels. The Sears Trademark, as
authorized by this Agreement and in accordance with the
provisions specified by Sears (on how the Sears Trademark is
to be used), shall be used in all advertisements for the
Products and
19
Services available through the Designated Marketing Channels.
13.2 LICENSEE SHALL PARTICIPATE. Licensee shall
participate in all Sears store wide promotional events
offering Customers special discounts on purchases which may
include but not be limited to events such as special
discounts for seniors, G.S.T. free days, special coupon
events, etc. Such discounts shall be absorbed as a ▇▇▇▇
down by Licensee at its sole cost and Sears shall be entitled
to its full Commission on the discounted sale price. Licensee
shall not be charged for any share of the advertising space
devoted by Sears to such storewide events.
13.3 SEARS PRIOR APPROVAL. Licensee shall submit to
Sears for Sears prior approval all signs and advertising
copy and plans, including but not limited to sales brochures,
newspaper and yellow pages advertisements, radio and television
commercials, sales promotional plans and devices (including
coupons and contests) intended for any promotion of the
Products and Services if Licensee incorporates the Sears
Trademark or any other trademark owned by Sears, as made known
to Licensee. Sears shall have the right to withhold its
approval of such activity based on any of the following:
(a) improper use of Sears Trademark;
(b) concerns surrounding liability, loss of goodwill,
damage to Sears reputation or Customer or
government relations;
(c) failure to comply with applicable legislation,
regulation or ordinance;
(d) failure to conform to community or Sears reasonable
standards of good taste and honest dealing; or,
(e) failure to conform to Sears advertising and pricing
policies.
13.4 MARKETING AND MARKETING EXPENSES. Licensee shall
be offered and shall have the opportunity to participate in
Sears regularly scheduled advertising media to promote the
Products and Services, on an "as available" basis, at the
sole cost of Licensee. Licensee shall reimburse Sears for all
marketing expenses including but not limited to advertising
expenses, incurred by Sears on behalf of Licensee at
Licensee's request (the "Marketing Expenses"). Licensee
shall pay all Sears invoices for the Marketing Expenses
within thirty (30) days of receipt of the invoice. Licensee
shall pay to Sears late payment charges in the amount of one
and one-half percent (1.5%) per month. Sears shall have the
right to retain out of the Net Sales or any settlement of the
sales proceeds made on any Sears credit plans payable to
Licensee if such invoices are not paid within thirty (30) days
of the issue date of the invoice.
13.5 TELEMARKETING SOLICITATION. Licensee shall not
utilize any unsolicited telemarketing solicitation for the
Products and Services without obtaining prior written
approval from Sears. Such approval may be arbitrarily
withheld. If approved, telemarketing solicitation shall
be conducted only in accordance with all applicable legislation
and Sears policies and procedures.
13.6 INTERNET SOLICITATION. Licensee shall not utilize
any unsolicited Internet solicitation for the Products and
Services without obtaining prior written approval from Sears.
Internet activity, if approved, shall be conducted only in
accordance with all applicable legislation and Sears policies
and procedures (as outlined in Schedule "D" attached hereto)
and all Customer solicitations and communications presentations
for the Products and Services utilizing the Internet shall
become part of or be "hot linked" to the Sears corporate web
site with no facility for the Customer to exit except through
the Sears web site.
20
13.7 ESTABLISHMENT OF AN INTERNET WEB SITE USING THE
SEARS TRADEMARK. Licensee shall not establish an Internet
site using the Sears Trademark as part of its marketing,
advertising, promotional programs or to conduct sales or
any other business transaction without obtaining prior
written approval from Sears, or from such other person as
Sears shall designate. If approved, Licensee may establish
an Internet site using the Sears Trademark for communication
with Customers only. Such Internet site shall not be used to
communicate with suppliers or any other business partners of
Licensee. Such Internet site shall only be used for
communication with Customers regarding the operation of
the Concession and the presentation, marketing and sale
of the Products and Services, and must reside on the
Licensee's web server and conform to the Licensed Business on
the Internet form attached hereto as Schedule "D" which must
be signed and dated as part of this Agreement. The
implementation, content and maintenance of this web site
shall be through and with the approval of Sears, which
approval may be arbitrarily withheld.
13.8 YELLOW PAGES. Licensee agrees that all Yellow
Page advertising for the Products and Services under the
Sears Trademark will be placed through Sears and/or Sears
designated agent in the same way Sears places Yellow Page
advertising for its own merchandise and service departments.
All such advertising shall be at the sole expense of Licensee.
13. PUBLICITY, PRESS RELEASE. Licensee shall not issue
any publicity or press release regarding this Agreement, or
the operation of the Concession or the procurement, presentation,
merchandising, marketing or sale of the Products and Services
contemplated hereunder without obtaining Sears prior written
approval, which approval may be arbitrarily withheld.
14.0 LICENSEE'S PURCHASES
--------------------
14.1 PURCHASE IN THE NAME OF LICENSEE. Licensee hereby
agrees that all purchases, contracts and obligations made or
incurred by Licensee in connection with the operation of the
Concession and/or the procurement, presentation, merchandising,
marketing and sale of the Products and Services under this
Agreement shall be made solely in the name of Licensee and under
no circumstances shall any legal document, purchase order,
letterhead, invoice or other document, expense or obligation
of any kind whatsoever be identified with Owner, Sears or Sears
Trademark. For greater certainty, under no circumstances will
Licensee make any purchase or incur any obligation or expense
of any kind whatsoever in the name of Owner, Sears or on their
respective behalf.
14.2 NOTIFICATION TO VENDOR. Prior to making any initial
purchase involving the operation of the Concession, Licensee
shall inform the vendor, in writing, with copy to Sears, that
neither Owner nor Sears is obligated in any way for, or as a
result of, said purchase.
14.3 INVOICES ISSUED IN ERROR. Upon receipt by Licensee,
of an invoice from a supplier identified as an invoice to Sears,
Sears Portrait Studio, or the portrait studio at Sears, or
identified in any manner with the Sears Trademark, or Sears,
Licensee shall immediately advise the supplier in writing,
with a copy to Sears, that the supplier has not invoiced
correctly and advise the supplier to reissue the invoice to
Licensee exclusively in Licensee's own business name.
14.4 PROMPT PAYMENT OF INVOICES. Licensee shall promptly
pay all obligations incurred in connection with the operation
of the Concession and shall hold Owner and Sears free and
harmless from any and all claims, costs or liabilities
incurred in connection with the
21
operation of the Concession.
14.5 LICENSEE'S NON-COMPLIANCE. In the event Licensee
fails to comply, in whole or in part, with any or all of
Sections 14.1, 14.2, 14.3 or 14.4, Sears may, in addition to
any other remedies afforded it under this Agreement, request,
and Licensee shall furnish Sears with a dated detailed
accounts payable report including the individual amounts
owed, names and addresses of all parties from whom it
purchases merchandise and/or services for sale or use under
this Agreement, as well as the names and addresses of all
other parties with whom it has any business or contractual
relations in connection with the operation of the Concession.
14.6 SEARS MAY WITHHOLD MONIES. Licensee agrees that in
the event a supplier and/or creditor of Licensee makes
representation, and/or provides copies of invoices and
shipping and receiving documentation to Sears, as to amounts
owing to the said supplier and/or creditor by Licensee (the
"Licensee Obligations"), which were incurred by Licensee in
connection with the operation of the Concession, and Licensee
has not met the terms of the payment agreed, Sears, after
discussion with Licensee may withhold the amount of such
invoices from the settlement with Licensee until such time
as Licensee provides to Sears proof of payment, or Licensee
provides documentation from the supplier and/or creditor that
verifies that the supplier and/or creditor waives any claim
against Owner and Sears for payment of such unpaid invoices,
or until such time as Owner and Sears are legally absolved of
any responsibility for payment of such unpaid invoices.
14.7 PAYMENT BY SEARS. In the event Licensee, Owner or
Sears are found legally responsible for the payment of the
Licensee Obligations, and Licensee is unwilling or unable to
pay the Licensee Obligations, Licensee agrees Sears may make
such payments on Licensee's behalf and deduct the entire amount
of such payments from monies due to Licensee by Sears and/or
from the monies withheld by Sears from Licensee's settlement.
15.0 LAWS, LICENSES, ORDINANCES AND PERMITS
--------------------------------------
15.1 COMPLIANCE WITH LAWS. Licensee shall comply with
any and all federal, provincial or territorial and local laws,
regulations and ordinances and industry standards applicable
to operation of the Concession including but not limited to
those relevant to environmental matters, those governing credit
sales and their solicitation (including but not limited to
disclosure to Customers and finance charges), and employment
matters (including but not limited to compensation, hours of
work, overtime and equal opportunities for employment).
Licensee shall comply, and represents and warrants to Sears
that it will comply, with all applicable federal, provincial
and territorial Human Rights, Employment Standards, Workers'
Compensation, Workplace Safety and Insurance and labour
relations' legislation.
15.2 PERMITS, LICENSES. Licensee shall, at its sole
expense, obtain all permits and licenses which may be
required under any applicable federal, provincial or
territorial or local law, ordinance, rule or regulation
in connection with the operation of the Concession.
15.3 BUSINESS LICENSE. Licensee shall prominently
display its business license and, upon the request of Sears,
shall prominently display and do all things as Sears in its
sole discretion may deem necessary to inform Customers that
the Concession is being operated by the Licensee and the
Products and Services are being procured, presented, marketed
and sold by Licensee under a license from Sears.
16.0 FEES, TAXES
-----------
22
16.1 LICENSEE TO PAY. Licensee shall, at its sole
expense, pay and discharge all license fees, business, use,
sales, gross receipts, income, separately assessed property,
realty or other similar or different taxes including but not
limited to provincial or territorial sales taxes and Goods and
Services Taxes or assessments which may be charged, levied or
payable in connection with the operation of the Concession,
excluding however, all taxes and assessments applicable to
Sears income from Commissions payable to Sears hereunder or
applicable to Sears property.
16.2 LICENSEE TO COLLECT FROM CUSTOMERS. Licensee shall
collect from Customers all taxes applicable to the sale of the
Products and Services, including but not limited to Goods and
Services Tax and provincial or territorial sales tax and other
equivalent or similar taxes.
17.0 ACCOUNTING, RECORDS, REPORTS, AUDITS AND INSPECTIONS
----------------------------------------------------
17.1 BOOKKEEPING, ACCOUNTING AND OTHER RECORDS. Licensee
shall keep and maintain books and records in accordance with
generally accepted accounting principles, applied on a
consistent basis, which accurately reflect the Gross Sales,
deductions, Net Sales and taxes resulting from the operation
of the Concession including the advertising expenses which
Licensee incurs under this Agreement.
17.2 LICENSEE'S FINANCIAL STATEMENTS. Within one hundred
and eighty (180) days of each fiscal year end of Licensee,
and upon such other time or times as Sears may reasonably request,
including prior to commencing the operation of the Concession,
Licensee shall provide to Sears its current
financial statements which shall be prepared in accordance
with GAAP and which shall include but not be limited to:
(a) Licensee's balance sheet; and
(b) Licensee's income statement.
17.3 SEARS INSPECTION AND AUDIT RIGTHS OF BOOKS AND
RECORDS. Sears or its designate shall have the right, at
any reasonable time, and for a period of two (2) years after
the expiration or other termination of this Agreement, to
review, inspect and audit the books and records of Licensee
to determine compliance with this Agreement with respect to
the business transacted by the Licensee in the operation of
the Concession including the advertising expense incurred by
the Licensee under this Agreement and the Commission payable
by Licensee to Sears.
17.4 AVAILABILITY OF LICENSSE'S BOOKS AND RECORDS.
Licensee shall, at Licensee's sole expense, provide to Sears
or its designate, for inspection or audit, such forms, reports,
records, financial statements and other information relating
to the operation of the Concession and the advertising expense,
as Sears may reasonably require within forty eight (48) hours
of a request from Sears or at such reasonable times as Sears
may specify in writing. Licensee shall make such financial and
other information available at such locations as Sears may
request, and shall afford Sears or its designate full and
free access thereto during regular business hours. Sears or
its designate shall have the right to communicate freely with
Licensee's employees, and to take extracts from, and copies
of all such information.
17.5 UNREPORTED NET SALES. If the Commission payments
or reports are delinquent, or if an inspection or audit
should reveal that Net Sales have been understated in any
report to Sears or not processed through the point of sale
register by Licensee, Licensee shall immediately pay to Sears
the amount overdue, unreported or understated. If an
inspection or
23
audit discloses an understatement of Net Sales of two and one
half percent (2 1/2%) or more, Licensee shall, in addition to
immediate payment to Sears of any amount overdue, unreported
or understated, reimburse Sears for all expenses connected
with the inspection or audit including, travel expenses and
reasonable accounting and legal fees. The foregoing remedies
shall be in addition to any other rights Sears may have and
shall survive the termination or expiration of this Agreement.
17.6 EXAMINATION OF THE LICENSED DEPARTMENTS, ETC. BY
SEARS. Licensee shall permit Sears, or its designate, at
any time to examine the merchandise, fixtures and equipment
located and/or used in the Licensed Departments in Designated
Markets and Designated Stores, and to confer with Licensee
and the employees of Licensee, to ensure compliance with this
Agreement.
18.0 CONFIDENTIAL INFORMATION
------------------------
18.1 SEARS CONFIDENTIAL INFORMATION. Sears policies,
processes, operating methods, source relationships, computer
software and all tangible items on which there is recorded
information related to Sears business, is deemed to be the
exclusive property of Sears. In addition all information
relating to the presentation, merchandising, marketing and
sale of the Products and Services, including but not limited
to all Customer lists and Customer information developed by
Licensee, its employees or agents, from the operation of the
Concession either during the Term and/or any renewal thereof,
or after termination of this Agreement is also deemed to be
the exclusive property of Sears (collectively, the "Sears
Confidential Information"). Licensee shall have no right,
title or interest in the Sears Confidential Information.
18.2 LICENSEE'S CONFIDENTIAL INFORMATION. All the
policies and processes of Licensee, Licensee operating
methods, Licensee's source relationships, any Licensee
computer software and information relating to the operation
of the Concession and the procurement of the Products and
Services, but excluding Customer information and Customer
lists derived from the operation of the Concession and/or
the presentation, merchandising, marketing, and sale of the
Products and Services, is deemed to be the exclusive property
of Licensee (collectively, the "Licensee's Confidential
Information"). Sears shall have no right, title or interest
in such Licensee's Confidential Information.
18.3 NO DISCLOSURE OF CONFIDENTIAL INFORMATION. All
Sears Confidential Information and Licensee's Confidential
Information shall be treated by the parties as confidential
and neither party shall reproduce, disclose nor in any way
make available, either directly or indirectly, any of the
other parties' Confidential Information to any other person,
firm, corporation, association or organization at any time
without the prior written consent of the party whose
Confidential Information is being disclosed provided however
that Licensee may disclose Confidential Information to employees
of its outside marketing agency involved in developing marketing
plans and materials on a "need to know" basis and who agree to
honour the confidentiality of the information. Licensee shall
ensure that all employee contracts contain an express written
provision to this effect. The parties agree that they shall
be responsible for any breach of this Article 18.0 by their
employees or any third party.
18.4 LICENSEE'S PROTECTION OF ALL SEARS CONFIDENTIAL
INFORMATION. Licensee shall protect all Sears Confidential
Information from destruction, loss, theft, misuse or
disclosure during the Term and/or any renewal thereof.
18.5 RESTRICTED USE OF SEARS CONFIDENTIAL INFORMATION.
Licensee agrees not use
24
or permit others to use any Sears Confidential Information
in any manner except in connection with the operation of the
Concession during the Term and/or any renewal thereof.
18.6 LICENSEE MAINTENANCE OF SEARS CONFIDENTIAL
INFORMATION. Licensee shall at all times maintain all Sears
Confidential Information physically separated and distinct
from any customer lists and information Licensee may maintain
that is unrelated to this Agreement and the operation of the
Concession.
18.7 RETURN OF SEARS CONFIDENTIAL INFORMATION. Upon
termination of this Agreement for any reason, Licensee shall
immediately deliver to Sears all copies of any Sears
Confidential Information including but not limited to all
copies of Customer lists, potential Customer lists and all
other copies of information concerning Customers, whether
written, computerized or otherwise. Licensee and its
officers, directors, employees, agents, designees, successors
and assigns, shall not use any Sears Confidential Information
to solicit any Customers in any manner whatsoever.
19.0 INDEMNITY BY LICENSEE
---------------------
19.1 INDEMNITY. Licensee covenants and agrees that it
will protect, defend, hold harmless and indemnify Owner and
Sears and their respective directors, officers, employees,
authorized representatives, agents and assigns from and
against:
(a) any and all expenses (including but not limited to
reasonable legal fees and disbursements), suits,
claims, demands, actions, causes of action,
liabilities, damages, judgements, fines, penalties,
fees, losses and proceedings of any kind whatsoever
(including, without limitation, death or injury to
persons and damage to property), actually or allegedly
resulting from or connected with the operation of the
Concession and the use by anyone of Products and
Services, including without limitation, goods sold,
work done, services rendered or products utilized
therein, any actual or alleged infringement of any
patent, trademark, copyright, confidential
relationship, trade secret or other proprietary right
of third parties, any claims by Licensee's employees,
suppliers, and any third parties or Customers,
including but not limited to failure to pay suppliers,
lack of repair in or about the Licensed Departments,
the operation of or defects in any machinery,
vehicles, or equipment used in connection with the
operation of the Concession and the use by anyone of
the Products and Services, or from the omission to
act or commission of any act, lawful or unlawful, by
Licensee or its agents, employees or designees, whether
or not such act is within the scope of the employment
of such agents, employees, or designees;
(b) without limiting the generality of Subsection 19.1 (a),
any and all penalties, judgements, taxes or fines of
any nature or kind whatsoever, including but not
limited to reasonable legal fees and disbursements
which may be incurred by Sears by reason of the alleged
or actual violation by Licensee, its employees,
officers, directors, sub-contractors or agents, of
any federal, provincial or territorial or municipal
law, ordinance or regulation; and
(c) without limiting the generality of Subsection 19.1(a),
any and all claims, actions or costs (including legal
costs, retroactive wages, awards, damages and
penalties) made against any of them by any employee
of Licensee:
(i) for salary and wages, fringe benefits,
compensation, arbitration, severance or
relocation costs;
25
(ii) under the WORKPLACE SAFETY AND INSURANCE ACT,
1997 (Ontario) or equivalent or similar
legislation in any province or territory and
any successor legislation thereof;
(iii) arising out of any alleged negligence, acts
or omissions of any person, including Sears,
except where said act or omission by Sears is
the sole cause of said claim; and
(iv) arising out of employment or termination of
employment for any reason whatsoever;
and notwithstanding anything to the contrary contained in this
Agreement, such indemnification in respect of any breach, violation
or nonperformance, damage to third parties property, injury or
death occurring during the Term and/or any renewal thereof will
survive the termination of this Agreement.
20.0 TERMINATION
-----------
20.1 NO FAULT TERMINATION. Licensee, Owner or Sears
shall each have the right to terminate this Agreement without
cause, cost, penalty or damages for any reason whatsoever upon
providing the other parties with at least one hundred and
eighty (180) days written notice at any time during the Term
and/or any renewal thereof.
20.2 AUTOMATIC TERMINATION. This Agreement shall
terminate without cause, cost, penalty or damages at the
end of the Term and/or any renewal thereof.
20.3 TERMINATION NOTICE UPON CLOSING OF DESIGNATED
STORES. Licensee agrees that Sears may, solely at Sears
discretion, terminate or amend this Agreement in whole or in
part without notice, due to the closing of Designated Stores
during the Term and/or any renewal thereof. The parties
recognize that, because of the many factors involved, a
requirement that Sears give notice to Licensee of the
Designated Stores closing prior to a public announcement is
not possible. Licensee shall be entitled to a notice of
amendment and/or termination of this Agreement due to the
closing of the Designated Stores concurrent with the public
announcement of said closing. The time period between the
public announcement of such closing and the actual closing
date shall be considered an adequate notice period to
Licensee and Licensee shall not be entitled to recover,
from Owner or Sears, any damages incurred as a result of
said closing.
20.4 CHANGE OF LOCATION, DIMENSIONS OR SPACE OF THE
LICENSED DEPARTMENTS. Licensee hereby acknowledges that:
(a) Sears marketing, merchandising, retailing and
development plans are under constant review and
that plans for such marketing, merchandising,
retailing and development may change from time to
time and such changes may necessitate a change of
location, dimensions, amount of space of the
Licensed Departments and/or the termination of any
or all the Licensed Departments located in Designated
Stores;
(b) In the event Sears determines that a change of
location, dimensions or amount of space occupied
by any or all of the Licensed Departments locations
is necessary in Designated Stores, Sears will use
its best efforts to provide a space
26
and location for the Licensed Department, in the same
Designated Store, of similar customer exposure,
prominence and size;
(c) In the event the new location is acceptable to
Licensee and the furniture, fixtures and equipment
complement the new presentation in the Designated
Store and is of the current generation of the Sears
approved presentation for the Licensed Department:
(i) Sears shall provide the decor presentation and
leasehold improvements to the current level in
the new location at Sears expense;
(ii) Licensee shall move and install all existing
furniture, fixtures and equipment into the new
location and shall provide and install any new
furniture, fixtures and equipment as required,
in Sears opinion necessary to professionally
operate the Concession and professionally
present the Products and Services in the new
location at Licensee's expense;
(d) In the event the new location is acceptable to
Licensee and the furniture, fixtures, equipment
and/or leasehold improvements do not, in Sears
reasonable opinion, complement the Designated Store
and/or are not of the current generation of the
Sears approved presentation for the Licensed
Department, the re-location shall be assumed to
be a closure of the old location and the opening
of a new location for the purposes of the
responsibilities and the obligation for the payment
of the costs of the re-location for both parties;
(e) Notwithstanding Article 6.0, if such changed location
or space is not satisfactory to Licensee, Licensee
may vacate the Licensed Departments at such
Designated Stores, without cost or penalty to any
of the parties, and Schedule "A" shall be amended
by Sears accordingly.
20.5 FAILURE TO GIVE NOTICE. Failure by any party to
give notice or otherwise object to any default, failure or
breach under this Agreement by any other party, or any waiver
of the same by any party shall not affect or impair such
party's rights in respect of continuous or any subsequent
default, failure or breach nor shall any delay or omission by
any party in exercising or failing to exercise any right
arising from any default, failure or breach hereunder, affect
or impair such party's rights in respect of the same or any
other default, failure or breach.
20.6 TERMINATION WITH CAUSE ON THIRTY (30) DAYS NOTICE.
This Agreement and all rights granted hereunder may (at Sears
exclusive option) for cause, be terminated, or be amended,
and Schedule "A" adjusted accordingly, by Sears as it may
relate to any individual Designated Marketing Channel,
Designated Market or any Licensed Department in any
Designated Market and/or Designated Store, at any time, upon
giving at least thirty (30) days prior written notice to
Licensee. Sufficient cause for termination or amendment of
the Agreement by Sears shall include, but not be limited to:
(a) Licensee's failure to comply with any of the terms,
provisions or conditions of this Agreement and such
failure is not rectified within such thirty (30)
day period;
(b) Licensee's failure to remove from the operation of
the Concession an employee, agent, contractor or
subcontractor to which Sears objects pursuant to
Section 11.12 (b) before the expiry of such thirty
(30) day notice period;
27
(c) Licensee's failure to operate the Concession in
accordance with Licensee's own operational
standards and processes as provided in Licensee's
other retail operations or as outlined in
Licensee's operations manual if such failure is
not rectified within such thirty (30) day notice
period;
(d) Sears determination, in its sole discretion, that
the operations, conduct or business practices of
Licensee or Licensee's employees are detrimental
to Owner's and/or Sears reputation, goodwill,
relationship with its Customers and/or suppliers
or otherwise adversely affects Owner's and/or
Sears operations, merchandise and/or property if
such failure is not rectified within such thirty
(30) day notice period;
(e) Licensee's failure to provide evidence of insurance
as required by Section 22.5 and 22.6, and/or, in
Sears sole discretion, the insurance policies obtained
by Licensee do not afford adequate protection for
Owner and Sears, and Licensee fails to provide to
Sears evidence of insurance or such additional
insurance as Sears may require, within thirty (30)
days of notice of same being given by Sears to
Licensee if such failure is not rectified within
such thirty (30) day notice period.
Such termination for cause shall not prejudice the enforcement
of any other legal right or remedy Sears may have under this
Agreement.
20.7 TERMINATION WITH CAUSE IMMEDIATELY. Notwithstanding
anything to the contrary, this Agreement and all rights
granted hereunder may, for cause, be terminated in their
entirety or may be amended, and Schedule "A" adjusted accordingly,
as it may relate to any individual Designated
Marketing Channel, Designated Market or any Licensed Department in
any Designated Market and/or Designated Store, by Sears,
at any time, upon written notice to Licensee, effective
immediately, if the cause for termination or amendment is due
to:
(a) the Licensee instituting any proceedings under any
statute or otherwise related to insolvency or
bankruptcy of Licensee, or should any proceeding
under any statute or otherwise be instituted against
Licensee;
(b) the apparent insolvency or bankruptcy of Licensee due
to its inability to meet its financial commitments as
they become due;
(c) the Licensee making a proposal or filing a notice of
intention to make a proposal or an application under
the Companies' Creditors Arrangement Act (Canada) or
similar legislation then in place;
(d) a secured creditor of Licensee giving notice of its
intention to enforce its security on the property of
Licensee;
(e) any property of Licensee passing into the hands of
any receiver, assignee, officer of the law or
creditor, pursuant to the Bankruptcy and Insolvency
Act (Canada) or similar legislation then in place;
(f) Licensee's failure to discharge, vary or stay
within such time period as action must be taken in
order to discharge, vary or stay a distress or
execution against any of the undertaking, business,
property or assets of the Licensee;
(g) Licensee making or purporting to make a sale of its
assets which is not in the
28
ordinary course of its business;
(h) Licensee making or purporting to make a general
assignment for the benefit of creditors;
(i) a court order or a resolution being passed for the
winding up or liquidation of the Licensee if the
Licensee is a corporation;
(j) the Licensee passing or purporting to pass, or taking
or purporting to take any corporate proceedings for
its dissolution, liquidation or amalgamation if the
Licensee is a corporation;
(k) the Licensee loosing its charter by expiration,
forfeiture or otherwise if incorporated, looses its
status as a corporation;
(l) Licensee's failure to operate and conduct business
in any Licensed Department during Normal Business
Hours for more than three (3) consecutive business
days, except if necessary due to remodeling or
repairs subject to Sears prior approval;
(m) Licensee permitting the Licensed Department to be
used by any other party other than such as is
properly entitled to use same;
(n) Licensee vacating, abandoning or ceasing to operate
the Concession in any Designated Marketing Channel,
Designated Market or Designated Store without Sears
prior written approval;
(o) Licensee's misappropriation of funds, including but
not limited to any shortage in or manipulation of any
Customer payments, unless arising from Licensee's
employee dishonesty and provided such employee is
immediately removed from the Licensed Department and
any involvement in the operation of the Concession in
any Designated Marketing Channel and complete
restitution is made by Licensee to Sears satisfaction;
(p) Licensee's misappropriation of Sears assets, unless
arising from Licensee's employee's dishonesty and
provided such employee is immediately removed from
the Licensed Department and any involvement in the
operation of the Concession in any Designated
Marketing Channel and complete restitution is made
by Licensee to Sears satisfaction;
(q) the disclosure to any third party by Licensee or any
of its directors, officers, shareholders or employees
of any Sears Confidential Information;
(r) Licensee's authorization of persons other than
employees of Licensee to perform any of Licensee's
obligations under this Agreement;
(s) Licensee's provision to Sears of incomplete, false
or misleading information in connection with the
application to be approved as a licensee of Sears;
(t) Licensee engaging at any time in disorderly conduct
that offends moral values or which constitutes moral
turpitude, all as determined by Sears in Sears sole
discretion;
(u) a Change of Control without Sears prior written
approval;
29
(v) Licensee's failure to remove from the operation of
the Concession an employee, agent, contractor or
subcontractor to which Sears objects pursuant to
Section 11.12 (a);
(w) Licensee's implementation of a Change of Practice
without Sears prior written approval and consent to
the changes in the operation of the Concession;
(x) Licensee's failure to meet its employment payroll
obligations in an appropriate and timely manner; or,
(y) Licensee's refusal to co-operate with Sears in the
performance of this Agreement, or Licensee's failure
or refusal, within three (3) days after receipt of
written notice from Sears, to comply with any material
provision or condition, including but not limited
to failure to pay Commission owed to Sears.
Such immediate termination or amendment to Schedule "A", for
cause, shall not prejudice the enforcement of any other legal
right or remedy that Sears may have under this Agreement.
20.8 FORCE MAJEURE. If any party is unable to perform its
obligations under this Agreement due to strike, fire, flood, or
act of God, and such condition subsists for thirty (30)
consecutive days, any party may terminate this Agreement
forthwith without cost, penalty or damages upon providing
written notice of termination to the other parties.
20.9 NON-OPPRESSIVE. Licensee acknowledges and agrees
that if Owner or Sears terminates this Agreement and gives
Licensee a notice of termination as provided for in this Agreement:
(a) such termination by Owner or Sears was entirely
contemplated by Licensee, and was within the spirit
of negotiations between them for the license and any
other rights granted hereunder prior to, and at the
time of, the execution of this Agreement by the
parties;
(b) the provisions of this Article 20.0 and Article
21.0 are just, equitable and non-oppressive to
Licensee; and
20.10 LICENSEE'S, OWNER'S AND SEARS RIGHTS AFTER
TERMINATION. After the termination of this Agreement in
accordance with the terms herein, it is agreed that Licensee
shall not have any right or interest in future contracts
entered into by Owner or Sears relating to the subject matter
of this Agreement or the operation of any business which is
the same or similar to that contemplated by this Agreement and
it is further agreed that Owner or Sears may, without incurring
any liability to Licensee:
(a) enter into an agreement for the operation of a
Concession and/or the procurement, presentation,
merchandising, marketing and/or sale of the same
or similar Products and Services with any person
or organization Sears chooses;
(b) directly operate a department to procure, present,
market and/or sell the same or any similar Products
and Services itself; or,
(c) completely terminate the operation of the Concession
and/or the procurement, presentation, merchandising,
marketing and/or sale of such Products and Services.
30
21.0 CONSEQUENCES UPON TERMINATION
-----------------------------
21.1 IMMEDIATELY UPON TERMINATION. Immediately upon
expiration or any termination of this Agreement, Licensee
shall:
(a) cease all use of the Sears Trademark and otherwise
comply with the requirements of Section 3.15, and
remove from Licensee's own premises and/or the
Licensed Departments and return to Sears, all signs,
work orders, invoices and related documentation
bearing the Sears Trademark or any other Sears
identification, failing which Owner or Sears shall
have the right to enter any of Licensee's premises
to do so, at Licensee's sole cost;
(b) return to Sears, or as Sears may direct, all Sears
property, including but not limited to all Sears
Confidential Information, employee identification
cards, Sears merchandise, forms, signing, operating
guides, sales and distribution reports;
(c) transfer to Sears, or as Sears may direct, all
Customer goods and Customer contracts which are
outstanding as at the date of expiration or other
termination;
(d) cease to use all listed telephone and facsimile
numbers used for the operation of the Concession
transfer such numbers to Sears or as Sears may
direct, and notify the telephone company of the
transfer. Licensee hereby appoints Sears as its
true and lawful attorney in fact, for it and in
its name, place and stead to execute and deliver
any and all documents and instruments as may be
required to transfer such telephone and facsimile
numbers to Sears or as Sears may direct; and,
(e) Licensee shall at its sole expense remove all of
Licensee's inventory, furniture, fixtures, equipment
and supplies from any Designated Store, and Licensee
shall, without delay and without any expense to Owner
or Sears whatsoever, repair any damage to the premises
caused by such removal and surrender the Licensed
Departments to Sears in good condition and repair,
ordinary wear and tear excepted. Licensee
acknowledges and agrees that, failure by the Licensee
to remove its inventory, furniture, fixtures,
equipment, and supplies, within the seven (7) days
immediately following the date of expiration or any
termination of this Agreement for any reason, shall
constitute abandonment of such Licensee's assets,
including without limitation, all inventory, furniture,
fixtures, equipment and supplies and Sears may, at
Sears exclusive option, and at Licensee's sole cost
and risk, and without any liability whatsoever to
Licensee dispose of the Licensee's assets including
without limitation all inventory, furniture,
fixtures, equipment and supplies without cost,
penalty or damages owed to Licensee by Sears.
21.2 DISENGAGEMENET COSTS. Licensee acknowledges and
agrees that neither Owner nor Sears shall have any liability
to Licensee for any disengagement or termination costs.
Without limiting the generality of the foregoing, Licensee
shall assume, to the complete exoneration of Owner and Sears,
all costs and expenses relating to legal, administration,
overhead, employees' wages and all other costs relating to
severance, pensions, employment insurance and employer/employee
contracts and Licensee shall indemnify and hold Owner and Sears
harmless from any and all claims, actions arising therefrom and
all costs and expenses connected therewith.
21.3 LICENSED DEPARTMENT RESTORATION COSTS. Notwithstanding
anything to the
31
contrary in this Agreement, Licensee acknowledges and agrees
that if the operation of the Concession in a Licensed Department
in a Designated Store is terminated, vacated or abandoned by
Licensee or terminated by Sears for cause, Licensee shall pay
to Sears the amount of ten thousand dollars ($10,000) to help
defray any expense incurred by Sears in the preparation of such
effected the Licensed Department in the Designated Store for
use by the Licensee.
21.4 LOSS OF BUSINESS. Licensee acknowledges and agrees
that neither Owner nor Sears shall have any liability to
Licensee for payment of any actual, perceived and/or anticipated
loss of revenue or profit. Owner and Sears do not have any
liability to Licensee for payment of any actual, perceived
and/or anticipated decrease in value of Licensee's business
due to the expiration or termination of this Agreement by
any party, for any reason.
21.5 SURVIVAL. The expiration or other termination of
this Agreement shall not relieve any party from its obligations
which survive the termination of this Agreement, including but
not limited to the obligation to pay any amount due hereunder
and the obligations and provisions of Sections 3.1, 3.3, 3.4,
3.5, 3.9, 3.11, 3.12, 3.13, 3.15, 4.4, 7.5, 9.6,
10.3 (b) (ii) (iii), (iv) and (v), 10.6, 10.7, 11.5, 11.6,
11.11, 11.13, 12.2, 13.4, 13.8, 13.9, 15.1, 15.2, 20.09, 20.10,
22.6, 22.7, 33.2 and Articles 5.0, 14.0, 16.0, 17.0, 18.0, 19.0,
22.2, 23.0, 24.0 27.0, 28.0, 32.0, 37.0, 39.0 and this
Article 21.0.
21.6 NO SOLICITATION. From and after expiration or other
termination for any reason of this Agreement, Licensee and its
officers, directors, employees and/or agents shall not use any
Sears Confidential Information including but not limited to
Customer lists and information to solicit any Customers for
any reason.
22.0 INSURANCE
---------
22.1 POLICIES OF INSURANCE REQUIRED. Licensee hereby
agrees and covenants that it shall, at its sole expense, obtain
and maintain, during the term of this Agreement, the following
policies of insurance from a company or companies satisfactory
to Sears and adequate to fully protect Owner, Sears and Licensee
from and against all expenses, claims, actions, liabilities and
losses arising out of subjects covered by said policies of
insurance:
(a) Workers' Compensation Insurance or Workplace Safety &
Insurance coverage with the applicable Provincial or
Territorial Workplace Safety & Insurance Board and/or
Employer's Liability Insurance covering all persons
employed or working in connection with the operation
of the Concession and the procurement, presentation,
merchandising, marketing and sale of the Products
and Services;
(b) Comprehensive General Liability Insurance, including
but not limited to Products and Completed Operations
coverage with a 24 month indemnity period and
containing a Contractual Liability Endorsement
specifically covering Licensee's indemnification of
Sears under this Agreement. The policy must contain
a Cross Liability Article and must not have any
exclusions for work done by sub-contractors and/or
sub-trades. This policy must also provide coverage
for Non-Owned Automobile Liability as well as Tenant's
legal liability. The limits of liability must not be
less than Two Million Dollars ($2,000,000.00) for
bodily injury, death and property damage;
(c) Motor Vehicle Liability Insurance covering all
vehicles used by Licensee in connection with the
operation of the Concession with limits of not less
than Two Million Dollars ($2,000,000.00), combined
single limit for bodily injury, death and property
damage per accident;
32
(d) All Risk Property Insurance, including theft upon
Licensee's property, equipment and merchandise
utilized in connection with the operation of the
Concession. The policy shall also cover any and all
Sears and/or Customer assets in the care, custody
and/or control of Licensee in an amount not less
than the Full Replacement Cost thereof; and,
(e) Employee Fidelity coverage to include Licensee and
all those under its direction involved in the
operation of the Concession and/or the procurement,
presentation, merchandising, marketing and/or sale
of the Products and Services in an amount not less
than Ten Thousand Dollars ($10,000.00).
22.2 SELF INSURED, ALL RISK PROPERTY INSURANCE. Sears
agrees that Licensee may self insure for All Risk Property
Insurance pursuant to Section 22.1 (d), including all damages
and/or theft of property, furniture, equipment, inventory and
merchandise used in connections with the operation of the
Concession, regardless of the reason for the damage or loss,
provided Licensee will hold Sears and Owner harmless from
and against any claims or damages to any of Licensee's assets
including but not limited to Licensee's property, furniture,
equipment, inventory and merchandise. Furthermore, Licensee
shall accept sole responsibility for the greater of the full
replacement cost of any Sears or Customers' lost or damaged
assets within the care, custody or control of Licensee or
any amount awarded by an arbitrator or court of law to Sears
or to Customers as compensation for such losses regardless
of the reason for such damage or loss. Sears shall have the
right to withhold the amount of any such claims from any
settlement between License and Sears in the event Licensee
fails to provide compensation to Sears or the Customer.
22.3 ADDITIONAL NAMED INSUREDS. All policies of
insurance required by Section 22.1 (b), (c), (d) and (e)
shall name Sears Canada Inc. and Sears, ▇▇▇▇▇▇▇ and Co. as
Named Additional Insureds and such policies shall not be
subject to material change or cancellation except upon at
least thirty (30) days prior written notice. Said policies
shall be prepared in such a form that neither Owner or
Sears shall be liable for any premiums.
22.4 WAIVER OF SUBROGATION. All policies of insurance
required by Section 22.1 (d) shall contain a Waiver of
Subrogation in favour of Sears.
22.5 EVIDENCE OF INSURANCE. Licensee shall provide to
Sears copies of policies or Certificates of Insurance as
evidence of the insurance required by Section 22.1 (b), (c),
(d) and (e) both:
(a) prior to commencement of the operation of the
Concession in any Designated Marketing Channel;
and
(b) upon each anniversary date of the policy or
policies.
22.6 EVIDENCE OF WORKERS' COMPENSATION INSURANCE COVERAGE.
Licensee shall provide to Sears quarterly proof of paid up
coverage for Workers' Compensation Insurance or Workplace
Safety and Insurance coverage, or similar coverage under
the legislative requirements of the applicable province or
territory and any replacement or successor thereof, in the
form of a provincial certificate of good standing, or a
provincial financial statement showing Licensee has paid
amounts owing in full in each Province the Concession is
operated. In addition, upon expiration or other termination
of this Agreement, Licensee shall provide to Sears evidence
of compliance with Workers' Compensation Insurance or
Workplace Safety and Insurance or equivalent or similar
coverage under the legislative requirements of the applicable
province or territory and any replacement or successor thereof.
33
22.7 INADEQUATE INSURANCE, ETC. In the event:
(a) Licensee fails to provide evidence of insurance
as required by Sections 22.5 and/or 22.6; or,
(b) Sears sole discretion, the policies obtained by
Licensee do not afford adequate protection for
Sears,
Licensee shall deliver to Sears evidence of insurance or such
additional insurance as Sears may require, within fifteen (15)
days of notice of same being given by Sears to Licensee,
failing which Sears shall have the right, at its option, to:
(i) obtain such insurance or additional insurance at
the expense of Licensee and to invoice Licensee and
offset same from any monies payable to Licensee; or,
(ii) immediately terminate this Agreement pursuant to
Subsection 20.6(e).
22.8 SEARS APPROVAL. Any approval by Sears of any of the
insurance policies obtained by Licensee, or any insurance or
additional insurance obtained by Sears on Licensee's behalf
shall not relieve Licensee from any of its obligations under
this Agreement.
23.0 LOSS, DAMAGE, DESTRUCTION, ETC.
-------------------------------
23.1 Loss of Business, Damages, Etc. Neither Owner nor
Sears shall be responsible for or liable to Licensee for any
loss of business suffered by Licensee or for any damage or
injury to Licensee or to Licensee's property, or to the
property of Licensee's employees, agents or designees, by any
cause whatsoever.
24.0 RELATIONSHIP
------------
24.1 INDEPENDENT CONTRACTOR. It is intended that
Licensee shall operate in the capacity of an independent
contractor, and that nothing contained in or done pursuant
to this Agreement is to be construed as creating a partnership,
agency or joint venture between or among the parties and no
party shall become bound by any conduct, representation, act
or omission of the other party. Licensee shall not do any act
or make any statement that may imply that Sears in any manner
owns, controls, operates or is a franchiser for the operation
of the Concession or the procurement, presentation, merchandising,
marketing or sale of the Products and Services.
25.0 INDEPENDENT LEGAL ADVICE
------------------------
25.1 INDEPENDENT ADVICE. Licensee acknowledges that
Sears has advised Licensee that prior to the execution by
Licensee of this Agreement, Licensee has the right to obtain
independent legal advice.
26.0 TRANSFER AND ASSIGNMENT
-----------------------
26.1 NO ASSIGNMENT BY LICENSEE WITHOUT CONSENT.
Licensee acknowledges that
34
Sears, in granting this license and the rights and interests
under this Agreement, has relied upon, among other things,
the character, background, qualifications and financial
ability of Licensee and, where applicable, its partners,
officers, directors, shareholders and managers. Accordingly,
this Agreement, Licensee's rights and interests hereunder
and the assets owned and used by Licensee in connection with
the operation of the Concession shall not be encumbered,
sold, assigned or transferred in whole or in part in any
manner whatsoever including pursuant to an order of a Court
under the Family Law Act (Ontario), or any applicable matrimonial
property legislation relating to Licensee without the prior
written consent of Sears, which consent may be withheld at
Sears sole discretion.
26.2 CHANGE OF CONTROL IS DEEMED AN ASSIGNMENT. If
Licensee is a corporation or partnership, any actual or
proposed Change of Control in such corporation or partnership
shall be deemed to be an assignment or proposed assignment
and shall be subject to all of the requirements of this
Article 26.0. Licensee shall make available to Sears or its
designate all of its corporate or partnership records, as the
case may be, for inspection at all reasonable times, in order
to ascertain whether any Change of Control has occurred.
26.3 ASSIGNMENT NULL AND VOID. Any actual or purported
assignment occurring by operation of law or otherwise without
Sears prior written consent shall be a material default of
this Agreement and shall be null and void.
26.4 ASSIGNMENT BY SEARS. Licensee acknowledges that
Sears may, at its sole discretion, assign, encumber or
transfer its rights under this Agreement.
27.0 SEARS RIGHT TO RETAIN AND OFFSET AMOUNTS, LIEN AND
--------------------------------------------------
SECURITY INTEREST
-----------------
27.1 RIGHT TO RETAIN AND OFFSET AMOUNTS. Sears, at its
exclusive discretion, may retain and offset any amount owing
to Licensee under this Agreement which Sears deems necessary
to meet the obligations of Licensee under this Agreement
including but not limited to any overdue invoices for the
Marketing Expenses, the amount of any overdue invoices payable
to any supplier of Licensee, the amount of any overdue wages to
Licensee's employees, the amount of any matter for which Sears
is indemnified by Licensee under Article 19.0, and any other
amounts payable to Sears.
28.0 ENUREMENT
---------
28.1 This Agreement shall be binding upon Licensee and
upon its heirs, executors, legal personal representatives,
successors and permitted assigns and shall be binding upon
and enure to the benefit of Owner and Sears and their
respective successors and assigns, it being expressly
stipulated that nothing herein shall authorize an assignment
or sub-license under this Agreement or any delegation of any
duties hereunder by Licensee without the prior written consent
of Sears, which consent may be arbitrarily withheld.
29.0 PRICES
------
29.1 Notwithstanding Section 4.8, nothing in this
Agreement shall be construed as giving Owner or Sears any
right or power to effect or control the price of merchandise
or services, which shall be offered hereunder in the operation
of the Concession said right and power being retained
exclusively by Licensee.
35
30.0 NOTICES
-------
30.1 Any notice, consent, approvals, statements,
authorizations, documents or other communications
(collectively "notices") required or permitted to be
given under this Agreement shall be in writing and shall
be delivered personally, or mailed by registered mail,
postage prepaid or by facsimile transmission followed by
registered mail, postage prepaid to the said parties at
their respective addresses set forth hereunder, namely;
To Sears at: Sears Canada Inc.
Department 895A
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: National Manager, Licensed
Businesses
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: Sears Canada Inc.
Department ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: The Secretary
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to: Sears, ▇▇▇▇▇▇▇ and Co.
Department 766 - B06 - 311B
Sears Merchandise Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
To Licensee at: CPI Corp.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice-President and General
Manager
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to: CPI Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇
Attention: President, Portrait Studio
Division
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to: CPI Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇
Attention: General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
36
Any notice, if delivered personally or sent by facsimile
transmission, shall be deemed to have been given on the date
of delivery or transmission, and if mailed, shall be deemed
to have been given on the fifth (5th) day following the date
of mailing. When notice is delivered by facsimile
transmission, the original notice must be delivered promptly
thereafter.
31.0 PREVIOUS AGREEMENTS
-------------------
31.1 All existing agreements between Licensee,
Owner and Sears and any prior arrangements, if any
concerning the operation of the Concession are hereby
cancelled and the terms and provisions hereof are in
each case substituted therefore, effective in each case
with the opening of business on the first day of the
Term of this Agreement provided that any payments
required thereunder or any subsequent amendments and
any liabilities thereunder shall survive such termination.
32.0 ENTIRE AGREEMENT
----------------
32.1 This Agreement sets forth the entire agreement
and understanding between the parties hereto with respect
to the subject matter hereof. This Agreement shall not be
supplemented, modified or amended except by a written
instrument signed by Licensee (or by a duly authorized officer
if Licensee is a corporation) and by a duly authorized officer
or agent of Sears and Owner, and no person has or shall have
the authority to supplement, modify or amend this Agreement
in any other manner, subject only to the attached Schedules,
which Schedules may be amended from time to time at the sole
discretion of Sears, by written notice from Sears to Licensee.
33.0 NO REPRESENTATIONS
------------------
33.1 Licensee acknowledges and confirms that no promises
or representations whatsoever have been made to Licensee, as
to the potential amount of business, revenue, profit or otherwise,
Licensee can expect at any time during the Term
and/or any renewal thereof.
33.2 Licensee represents and warrants that Licensee is
solely responsible for any costs or expenses incurred related
to this Agreement and agrees that neither Owner nor Sears
shall be obligated for any expenses incurred by Licensee in
connection with any increase in the number of its employees
or expenditures made by Licensee for facilities or equipment,
or any other costs or expenses whatsoever incurred by Licensee
in connection with the operation of the Concession.
34.0 APPROVALS AND CONSENTS
----------------------
34.1 Any approvals or consents required to be obtained
from Sears pursuant to this Agreement shall be in writing and
may be unreasonably withheld by Sears at its sole discretion
unless otherwise expressly provided for in this Agreement.
35.0 OTHER AGREEMENTS
----------------
35.1 If any claim is made by a third party that this
Agreement in any way contravenes any previous agreement
entered into by Sears or such third party as to the operation
of any
37
Designated Stores, the shopping centre or facility of which
such Designated Stores forms a part, Sears shall conduct
a thorough investigation of such claim and shall give
Licensee notice of such claim and disclose to Licensee the
results of such investigation. It is understood and agreed
that if Sears determines that this Agreement does in fact
contravene any such previous agreement then this Agreement
shall be automatically terminated without cost, penalty or
damages, as it relates to such Designated Stores, otherwise
this Agreement shall continue and remain in full force and effect.
36.0 SEVERABILITY
------------
36.1 If any term, provision or condition of this
Agreement shall be held to be invalid, illegal or
unenforceable by a court of competent jurisdiction, the
remaining terms, provisions and conditions shall be and
remain in full force and this Agreement shall be construed
as if such invalid, illegal or unenforceable provision had
never been contained herein. Licensee and Sears agree that
all of the terms, provisions and conditions of this Agreement are
reasonable and are not unduly harsh in the circumstances.
37.0 GOVERNING LAWS
--------------
37.1 This Agreement shall be interpreted and governed by
the laws of the Province of Ontario and the laws of Canada
applicable therein, and the parties hereby irrevocably submit
to the jurisdiction of the courts of Ontario and all courts
competent to hear appeals therefrom.
38.0 HEADINGS
--------
38.1 All Article and Section headings and table of
contents appearing in this Agreement or any Schedule hereto
have been inserted for convenience of reference only and shall
not in any way effect or be considered in any construction or
interpretation of this Agreement.
39.0 CUMULATIVE REMEDIES
-------------------
39.1 It is agreed that the remedies provided to Owner
and/or Sears for any default, failure or breach in this
Agreement are distinct, separate and cumulative and no one of
them whether or not exercised by Owner or Sears shall be deemed
to exclude any other rights or remedies provided to Owner
and/or Sears in this Agreement, by law or equity.
40.0 GRAMMATICAL VARIATIONS
----------------------
40.1 In this Agreement, whenever the context so requires
grammatical variations of any term defined herein shall have
similar meanings and a term used herein importing the singular
number shall include the plural and vice versa and a word
importing gender shall include any other gender.
41.0 FURTHER ASSURANCES
------------------
41.1 Each of the parties hereto shall from time to time
execute and deliver all such further documents and other
instruments and do all acts and things as either of the
parties
38
hereto may reasonably require to effectively carry
out or better evidence or perfect the full intent and
meaning of this Agreement.
42.0 LANGUAGE
--------
42.1 It is the express wish of the parties that this
Agreement and any related documents be drawn up and executed
in English. Il est la volonte expresse des parties que cette
convention et tous les documents s'y rattachant soient
rediges en anglais.
39
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by their duly authorized signatories
as at the date first shown above.
EXECUTED at ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, this 1st day of January, 2003.
SEARS CANADA INC.
Per: /s/ ▇▇. ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Procurement and Specialty Businesses
Per: /s/ ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
SEARS, ▇▇▇▇▇▇▇ AND CO.
Per: /s/ ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Attorney-in-fact
Sears Canada Inc.
EXECUTED at Toronto, Ontario, this 1st day of January, 2003.
CPI CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------- ----------------------
(▇▇▇▇▇▇▇ ▇▇▇▇▇▇) (▇▇▇▇ ▇▇▇▇▇▇)
(Witness Signature) Licensee signature
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇ ▇▇▇▇▇▇
Print Title: Vice President
c/s
(affix corporate seal)
40