Exhibit 10.6
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS ARE DESIGNATED "[***]."
WAL-MART MASTER LICENSE AGREEMENT
THIS LICENSE is entered into as of the 4th day of April, 2002 by and
between Licensor and Licensee as hereinafter defined.
WHEREAS, in consideration of the obligation of Licensee to pay License
Fees as herein provided and in consideration of the Standard Terms and
Conditions set forth herein, Licensor hereby licenses to Licensee, and Licensee
hereby takes from Licensor, the Licensed Premises, for the License Term
specified below, and upon the terms and conditions set forth in this License.
BASIC PROVISIONS
1. Licensor: Wal-Mart Stores, Inc., a Delaware corporation, on behalf of
itself, or alternatively, where appropriate, on behalf of, and as
authorized agent for, its affiliates, as designated in the Commencement
Agreement and/or New Store License Attachment applicable to the
particular store identified on such Commencement Agreement and/or New
Store License Attachment; Attn: ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇ ▇/▇▇/ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
2. Licensee/Address: PCA International, Inc.; ▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
3. Licensee's Trade Name(s): Wal-Mart Portrait Studio
4. Licensed Premises: The area Licensed by Licensee within the Wal-Mart
Store (the "Store") as described on the Attachment A and Attachment B
documents.
5. Grand Opening: The time at which Licensor first opens for business to
the public.
6. Targeted Commencement Date: See section 2.2.
7. Licensee's Hours of Operation: See Section 7.1.
8. License Term: Commencing on the Commencement Date as shown on
Attachment A or Attachment B (or as modified by Exhibit A, Commencement
Agreement) and continuing through the last day of the month in which the fifth
anniversary of the Commencement Date occurs. This License shall renew
automatically in accordance with Exhibit B. References to the "License Term"
shall refer to the original term and any extensions or renewals thereof.
9. License Fees: See Section 1.1(i).
10. Security Deposit: N/A. Security Deposit to be refunded upon Licensee
satisfactorily terminating the License and vacating the premises. Security
Deposit will be forfeited if Licensee terminates prior to License expiration or
as otherwise stated in this License.
11. Permitted Use: See Section 1.1(f).
EXECUTED AS OF THE DATE HEREIN ABOVE STATED.
LICENSOR: WAL-MART STORES, INC. LICENSEE: PCA INTERNATIONAL, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------ ----------------------------------------
Director Wal-Mart Realty Title: CEO
--------------------------------------
Attest: ________/s/_________________________ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Assistant Secretary -------------------------------------
Secretary
1
ARTICLE I. DEFINITIONS
1.1 Definitions
ARTICLE II. GENERAL PROVISIONS
2.1 Quiet Possession
2.2 Target Commencement Date
ARTICLE III. ACCEPTANCE AND CONSTRUCTION OF PREMISES
3.1 Acceptance of Licensed Premises
3.2 Possession
3.3 Tender of Possession
3.4 Store Renovation
ARTICLE IV. LICENSE FEES
4.1 License Fees
4.2 Taxes
4.3 Sales Report
4.4 Adjustments
4.5 Interest
4.6 Quarterly Statements
ARTICLE V. SALES REPORTS AND RECORDS
5.1 Statement of Gross Sales
5.2 Records
5.3 Licensor's Right to Audit
ARTICLE VI. COMMON AREAS
6.1 Store Access
6.2 Parking
ARTICLE VII. USE AND CARE OF LICENSED PREMISES
7.1 Operation
7.2 Customer Service Complaints
7.3 Customer Service Line
7.4 Trade Name
7.5 Care of Licensed Premises
7.6 Permits and Other Requirements
ARTICLE VIII. MAINTENANCE AND REPAIR OF LICENSED PREMISES
8.1 Licensor's Responsibilities
8.2 Licensee's Responsibilities
8.3 Licensee's Responsibilities Upon Quitting the Licensed Premises
ARTICLE IX. ALTERATIONS AND CONSTRUCTION
9.1 Alterations
9.2 Construction
9.3 Covenants Against Liens
ARTICLE X. LICENSOR'S RIGHT OF ACCESS:
10.1 Licensor's Right of Access
10.2 Use of Roof
ARTICLE XI. SIGNS; STOREFRONTS
11.1 Signs; Storefronts
11.2 Building Signage
11.3 Installation and Permitting
11.4 Licensor Approval
11.5 Restrictions
2
ARTICLE XII. UTILITIES
12.1 Utility Charge
12.2 Interruption of Utilities
ARTICLE XIII. INDEMNITY AND PUBLIC LIABILITY INSURANCE
13.1 Injury and Damage
13.2 Insurance
ARTICLE XIV. NON-LIABILITY FOR CERTAIN DAMAGES
14.1 Licensor Non-Liability
14.2 Licensee Non-Liability
14.3 Mutual Waiver of Subrogation
ARTICLE XV. DAMAGES BY CASUALTY
15.1 Notice to Licensor
15.2 Licensor's Repair of Casualty Damage
15.3 Licensee's Repair of Casualty Damage
15.4 Operation of Licensed Premises After Casualty
15.5 Licensee's Insurance
ARTICLE XVI. CONDEMNATION
16.1 Condemnation Equal to or Greater Than Thirty Percent
16.2 Condemnation Less Than Thirty Percent
16.3 Condemnation of Common Area
16.4 Condemnation Compensation
ARTICLE XVII. ASSIGNMENT AND SUBLICENSING
17.1 Licensor's Consent
17.2 Corporations as Licensees
17.3 Effect of Licensor Consent
17.4 Licensor's License
17.5 No Encumbrances
17.6 Transfer by Licensor
17.7 Franchises
ARTICLE XVIII. TAXES AND INSURANCE
18.1 Licensee's Responsibility for Taxes
18.2 Licensor's Responsibility for Taxes
18.3 License Fees Taxes, etc
ARTICLE XIX. DEFAULT BY LICENSEE AND REMEDIES
19.1 Events of Default
19.2 Licensor's Remedies
19.3 Injunction
19.4 Attorney's Fees
19.5 Additions to Minimum License Fees
19.6 Remedies are Cumulative
ARTICLE XX. LICENSOR'S CONTRACTUAL SECURITY INTEREST
20.1 Deleted
20.2 Deleted
ARTICLE XXI. HOLDING OVER
21.1 Holdover Status
ARTICLE XXII. SUBORDINATION AND ATTORNMENT
22.1 Mortgages, etc
22.2 Notice to Mortgagee
22.3 Estoppel Certificates
3
22.4 Attornment
ARTICLE XXIII. NOTICES & CORRESPONDENCE
23.1 Notices
23.2 Notice Binding
ARTICLE XXIV. REGULATIONS
24.1 Compliance with Regulations
24.2 Hazardous Waste
ARTICLE XXV. RELOCATION
25.1 Relocation
ARTICLE XXVI. MISCELLANEOUS
26.1 No Partnership
26.2 Consents
26.3 Waivers
26.4 Force Majeure
26.5 Governing Law
26.6 Captions
26.7 Number; Gender
26.8 Successors
26.9 Entire Agreement
26.10 Other Payments
26.11 Store Closing
26.12 Licensee
26.13 Approvals
26.14 Restrictions
26.15 Advertisements
26.16 Licensor's Default & Liability
26.17 Right to Remove Location from License/Terminate
26.18 Right to Terminate all Locations
26.19 Attorney's Fees
4
STANDARD TERMS AND CONDITIONS FOR WAL-MART LICENSE AGREEMENT
ARTICLE I. DEFINITIONS
1.1 Definitions: The following capitalized terms shall have the meanings
shown. Other capitalized terms appear elsewhere in this License.
(a) Percentage License Fees: Intentionally omitted.
(b) Natural Break Point: Intentionally omitted.
(c) Percentage License Fees Rate: Intentionally omitted.
(d) License Fees: this includes Minimum License Fees,
Percentage License Fees and any additional or other License
Fees or License Fees tax as provided for in this License.
(e) Dry Run: a test of all equipment used in the
operation of Licensee's business as well as a test of any
other aspects of Licensee's business to assure full
operational abilities.
(f) Licensee's Business: the operation of a portrait
studio department, whether permanent or temporary, under the
Trade Name within a Licensed Premise, whereby only the
following merchandise is sold, and/or the following services
are provided to the public: the taking and sale of portrait
photographs and related products, the customization of
portraits including oil portraits, the taking of passport and
citizenship photographs, the sale of picture frames and other
portrait accessories which do not compete with those sold by
Licensor from time to time in its stores, the sale of
photographic plaques, the copying and restoration of old
photographs, the sale of portraiture related software and
digital images, and the provision and sale of photographic
lamination services, together with such other services and/or
merchandise as may be approved by Licensor in writing from
time to time, in its sole and absolute discretion, which
approval may be withheld for any reason whatsoever; and
"Licensee's Businesses" shall mean more than one or all of
Licensee's Businesses collectively, as the case may be.
(g) High Volume Location: any of Licensee's Businesses
that has generated over $150,000 in Gross Sales during the
preceding twelve (12) months.
(h) Increase Date: the date on which an increase of
one-half percentage point (0.5%) actually takes effect.
(i) Minimum License Fees: the amount of money paid by
Licensee to Licensor, expressed as a percentage of Gross Sales
made by Licensee, its employees, concessionaires, agents,
licensees, contractors, successors and assigns in connection
with such Licensee's Business.
(j) Licensee's Studio Business: the operation of a
portrait studio department on a permanent basis under the
Trade Name within a Licensed Premise.
(k) Licensee's Travelling Business: the operation of a
portrait studio department on a travelling or temporary basis
under the Trade Name within a Licensed Premise.
(l) Net New Stores: the number of new stores Licensed to
Licensee under this License minus the number of stores in
which the License under this License was terminated and shall
not include stores Licensed on a temporary basis.
(m) Proposed Increase Date: the day on which it is
proposed, subject to certain conditions, that the License Fees
increase by [***], being the first day of Licensee's fiscal
years as follows: February 2, 2004; January 30, 2006; February
4, 2008 and February 1, 2010.
---------------------
[***] Redacted pursuant to a request for confidential treatment.
5
(n) Gross Sales: the entire amount of all revenue and receipts,
whether from cash, cash equivalent, credit, or otherwise, of all
sales of merchandise (including gift and merchandise
certificates), services provided, and any other business activity
conducted in connection with Licensee's Businesses, including
mail or telephone orders received or filled in connection with
any of Licensee's Businesses, deposits not refunded to
purchasers, orders taken, although said orders may be filled
elsewhere, sales to employees, sales through vending machines or
other devices, and sales by a concessionaire, licensee, third
person or otherwise in relation to Licensee's Businesses. Each
sale upon installment or credit shall be treated as a sale for
the full price in the week during which such sale was made,
irrespective of the time when Licensee receives payment from its
customer. No deduction shall be allowed for uncollected or
uncollectable credit accounts, unless and until same have been
incapable of collection by Licensee for a period of six (6)
months following the occurrence of such sale, provided that in
the event that same is subsequently collected, whether in whole
or in part, such collected amount shall be added to Gross Sales
as at the date of collection. "Gross Sales" shall not include,
however, (i) any sums collected and paid out for any sales or
goods and services tax imposed by any duly constituted
governmental authority on any sale effected in connection with
Licensee's Businesses; (ii) the exchange of merchandise between
the various locations of Licensee, if any, where such exchanges
are made solely for the convenient operation of the business of
Licensee and not for the purpose of consummating a sale which has
theretofore been made in connection with one of Licensee's
Businesses and/or for the purpose of depriving Licensor of the
benefit of a sale which otherwise would be made in connection
with one of Licensee's Businesses; (iii) the amount of returns to
shippers or manufacturers, nor the amount of any cash or credit
refund made upon any sale where the merchandise sold, or some
part thereof, is thereafter returned by purchaser and accepted by
Licensee; or (iv) sales of Licensee's trade fixtures.
ARTICLE II. GENERAL PROVISIONS
2.1 Quiet Possession: Except as otherwise provided herein, if
Licensee shall perform all of Licensee's obligations under this
License, Licensee shall, subject to the provisions of this License, at
all times during the License Term, have peaceful and quiet possession
of the Licensed Premises.
2.2 Targeted Commencement Date:
(a) New, Relocated, or Expanded Stores: Subject to Section 3.3,
the Targeted Commencement Date for new, relocated, or expanded
Stores shall be the date and time of the Store Grand Opening
(regardless of the normal business hours). Should Licensee fail
to be open and operating on the Targeted Commencement Date,
Licensee agrees to pay Licensor as an additional License Fee
$5,000.00 ( five thousand dollars) in damages. Licensee also
agrees to pay as additional License Fees $100.00 (one hundred
dollars) for each additional day that it is not open for
business. It would be impracticable or difficult to ascertain
actual resulting damages to Licensor and the amounts set forth
above are reasonable estimates of such damage and shall be paid
to Licensor as liquidated damages in such event. In addition, it
is requested that Licensee perform a dry run of all operations by
the Friday before the Grand Opening date.
(b) Existing Store Spaces: Subject to Section 3.2, the Targeted
Commencement Date for existing Store spaces shall be mutually
agreed upon between Licensor and Licensee as shown on the
Attachment for each location.
(c) Licensee Possesses: In any event, if Licensee takes
possession of the space, but does not open for business within
three (3) months of taking possession for any reason whatsoever,
Licensor may, at its sole option, terminate this License as to
such location and neither party shall have any further rights,
duties or obligations hereunder.
ARTICLE III. ACCEPTANCE AND CONSTRUCTION OF PREMISES
3.1 Acceptance of Licensed Premises: By taking possession of the
Licensed Premises, Licensee shall be deemed conclusively to have
accepted the same "as is" and to have acknowledged that the same
complies fully with Licensor's obligations hereunder, unless Licensee
notifies Licensor in writing of any defects within three (3) business
days of taking possession. Upon taking possession of the Licensed
Premises, Licensee shall have the gate keyed and shall provide the
store manager with a key to the gate for emergencies.
6
3.2 Possession: If any present Licensee or occupant of the Licensed
Premises holds over and Licensor cannot reasonably acquire possession
of the Licensed Premises prior to the Targeted Commencement Date of
this License, Licensor shall not be deemed to be in default hereunder,
and Licensee agrees to accept possession of the Licensed Premises at
such time as Licensor is able reasonably to tender the same. Licensor
hereby waives the payment of License Fees for any period prior to such
tender of possession.
3.3 Tender of Possession: If Licensor does not tender possession of
the Licensed Premises to Licensee for completion of Licensee's work by
the Targeted Commencement Date, as above defined, Licensor shall not
be deemed to be in default hereunder, and Licensee agrees to accept
possession of the Licensed Premises at such time as Licensor tenders
the same. Notwithstanding the foregoing, if Licensor, in Licensor's
sole discretion (i) determines it will be unable to deliver possession
of the Licensed Premises to Licensee within a reasonable time after
the Targeted Commencement Date, by reason of construction or
regulatory delays or otherwise, or (ii) elects not to construct the
Store or the Licensed Premises, Licensor shall have the right to
terminate this License Agreement as to such location by written notice
to Licensee. In such event, this License shall terminate as to such
location and neither party shall have any further rights, duties or
obligations hereunder as to such location.
3.4 Store Renovation: Licensee recognizes that Licensor may, from
time to time, wish to renovate the Store by remodeling, rearranging or
expanding the Store. Licensor has the right to relocate Licensee's
space within the Store at any time. The costs involved shall be paid
as mutually agreed upon on a future date on a site by site basis. In
no event will Licensor be responsible for "loss of business," "lack of
trade," or any other claim resulting out of such renovation.
Notwithstanding any relocation of the Licensed Premises required by
reason of renovating the Store, the Licensed Premises shall always be
comparable in configuration and shall always retain approximately the
same overall size to the original Licensed Premises, and shall be
located at the front of the Store. Licensor agrees that Licensee may
temporarily close the Licensed Premises if Licensee reasonably
determines that its ability to operate is materially impaired due to
work associated with Store renovation. License Fees shall be abated
during periods in which the Licensed Premises is closed by reason of
such work. If Licensee does not desire to relocate the Licensed
Premises in accordance with the foregoing, then Licensee may terminate
this License as to such location by giving Licensor written notice not
less than thirty (30) days after Licensor's notice of intention to
perform such renovation. Licensor reserves the right to terminate as
to such location this License in the event that as a consequence of
such renovation, Licensor cannot relocate the Licensed Premises.
ARTICLE IV. LICENSE FEES
4.1 License Fees: Licensee shall pay to Licensor License Fees in
respect of Licensee's Studio Businesses of [***] during each month of
the Term. Upon Licensor's request, the License Fee shall be by wire
transfer and shall be made for each calendar month not later than the
tenth (10/th/) day (or the first business day following the tenth day,
if the tenth day is a weekend or major holiday) of the calendar month
following the month for which the License Fees are calculated.
Licensee shall provide daily sales data for each Licensed Premise to
Licensor's cash office. At the end of each calendar month, Licensor
shall compile the sales data so received by the Licensed Premise,
calculate the appropriate License Fee due by Licensed Premise and the
aggregate License Fee for all Licensed Premises due for the previous
calendar month, and shall communicate such calculations to Licensee.
After Licensor's request, the License Fee shall continue to be paid in
this manner each month until Licensor requests otherwise.
The License Fees shall increase by [***] at each Proposed Increase
Date, to a maximum of [***], provided that either of the following has
occurred at such Proposed Increase Date:
(a) Net New Stores shall have increased by [***] during the
shorter of (i) the two years prior to the Proposed Increase Date
or (ii) the period from the last Increase Date to the Proposed
Increase Date, or
(b) the Gross Sales from all studios Licensed under this
License shall have increased by [***] during the shorter of (i)
the two years prior to the Proposed Increase Date or (ii) the
period from the last Increase Date to the Proposed Increase Date.
---------------------
[***] Redacted pursuant to a request for confidential treatment.
7
For measurement purposes, Gross Sales for the twelve (12) months
preceding the Proposed Increase Date will be compared with the Gross
Sales for the twelve (12) months immediately preceding (i) the date of
this License, (ii) two years prior to the Proposed Increase Date or
(iii) the last Increase Date, as appropriate.
In the event that neither condition (a) nor (b) is met at a Proposed
Increase Date, such increase shall not occur on the Proposed Increase
Date, but shall occur on the first day of Licensee's fiscal year
following the fiscal year during which either condition (a) or (b) is
met, using, as the starting date for comparison, the same starting
date that was used for the missed Proposed Increase Date.
Licensor and Licensee recognize that Licensee's Travelling Business is
unprofitable and is maintained as a service to Licensor and Licensee's
customers. For this reason, the License Fees payable to Licensor with
respect to Licensee's Travelling Business shall be [***] of the total
Gross Sales made by Licensee, its employees, concessionaires, agents,
licensees, contractors, successors and assigns in connection with such
Licensee's Business during each week throughout the Term.
4.2 Taxes: In addition, Licensee shall bear the cost of and pay to
the appropriate taxing authority all applicable federal, state and
municipal sales, goods and services and other similar taxes (the
"Taxes") applicable from time to time with respect to any payment by
it under this License, in accordance with the provisions of the
legislation imposing such tax or taxes.
4.3 Sales Report: Licensee shall deliver to Licensor, each week, at
its offices in Bentonville, AR, or at such other location as may be
designated from time to time by Licensor, a sales and license fees
report ("Sales and License Fees Report") for the week ended no more
than ten (10) business days prior to the date of the Sales and License
Fees Report, containing such information and in such format as may be
agreed between the parties from time to time, along with the License
Fees relative to the Gross Sales indicated on such Sales and License
Fees Report. For greater certainty, the parties acknowledge and agree
that the Sales and License Fees Report shall be prepared individually
for each of Licensee's Businesses and shall specify the Gross Sales
for the relevant week, and all preceding weeks in the year, the
License Fees, together with a summary indicating the totals of same
for all of Licensee's Businesses collectively. Licensee further
covenants to provide a Sales and License Fees Report detailing the
foregoing information for the immediately preceding year applicable to
Licensee's Businesses, on the date which is thirty (30) days following
the completion of such year. Licensee covenants and agrees to make all
of its records pertaining to Licensee's Businesses available to
Licensor and its agents for inspection and/or audit forthwith
following the receipt by it of one (1) Business Day's prior written
notice from Licensor and/or its agents requesting same. Licensee
covenants and agrees to retain all such records for a minimum of two
(2) years following the end of each year of the Term. Licensee shall
provide the Sales and License Fees Report to Licensor electronically,
as well as on paper, unless otherwise agreed between Licensor and
Licensee.
4.4 Adjustments: The parties covenant and agree to re-adjust any
under or over payments of the License Fees payable under this License
with respect to the immediately preceding year of the Term, within
fifteen (15) days following any of the delivery by Licensee to
Licensor of the annual Sales and License Fees Report referred to in
Section 4.3, the date that a legitimate written request therefor by
the other party based on a reporting error and/or other failure to
comply with this License, and/or the date that Licensee becomes aware
that it has effected an underpayment to Licensor. If a statement of
Gross Sales submitted by Licensee in respect of one of Licensee's
Businesses is found to be incorrect, so that such error resulted in an
under-reporting of Gross Sales to Licensor which is greater than 3.5%
of the Gross Sales for such Licensee's Business for the applicable
year, Licensee shall pay all costs incurred by Licensor with respect
to any audits of Licensee's books and records for all of Licensee's
Businesses for such year, including, without limiting the generality
of the foregoing, the costs of any internal auditors of Licensor.
4.5 Interest: Licensee shall pay to Licensor interest on any monies
owing to Licensor which are past due under this License at the rate of
the annual rate of interest announced from time to time at the prime
rate as a reference rate then in effect for determining interest rates
on United States dollar commercial loans in the United States plus 3%.
Such interest shall accrue from the date such monies first become due
and payable to Licensor and shall be calculated and compounded
semi-annually.
4.6 Quarterly Statements: Licensee covenants and agrees to deliver to
Licensor at the end of each quarter of each of Licensor's fiscal years
(i.e. February 1 - January 31), copies of all of its most current
financial statements,
-------------------
[***] Redacted pursuant to a request for confidential treatment.
8
including without limiting the generality of the foregoing, balance
sheet, income statement, statement of retained earnings, and cash flow
statement, whether or not same have been independently audited and/or
prepared by a certified public accountant. In addition to the
foregoing, in the event that any of such financial statements shall be
audited and/or prepared by a certified public accountant from time to
time, Licensee shall forthwith deliver copies of any audit report or
other report as to the adequacy of such financial statements to
Licensor. Licensor covenants and agrees to maintain any financial
statements and/or other information provided to it under this section
4.6 in the strictest of confidence and shall not disclose any of same
to any other person except as required by law or court order.
ARTICLE V. SALES REPORTS AND RECORDS
5.1 Statement of Gross Sales: See 4.3, above
5.2 Records: See 4.3 and 4.6, above
5.3 Licensor's Right to Audit: See 4.3 and 4.5, above.
ARTICLE VI. COMMON AREAS
6.1 Store Access: Licensee and its employees and their agents shall
have free access to the public areas of the building and the Licensed
Premises during regular store hours.
6.2 Parking: Employees, subLicensees, licensees, or concessionaires
of Licensee, while working in the Licensed Premises, shall be
permitted to park their automobiles in spaces designated by Licensor.
Licensee agrees that if any automobile or other vehicles owned by
Licensee or any of its employees, subLicensees, licensees or
concessionaires shall be parked in any part of the Common Area other
than the specified areas designated for employee parking while
performing services at the Licensed Premises, such vehicles will be
towed at Licensee's expense. Licensor may from time to time substitute
for any parking area other areas reasonably accessible to Licensee.
ARTICLE VII. USE AND CARE OF LICENSED PREMISES
7.1 Operation:
(a) The Licensed Premises may be used only for the purpose or
purposes specified as Permitted Use in the Basic Provisions, and for
no other purpose without the prior written consent of Licensor.
Licensee shall not operate an ATM machine. Licensee shall not at any
time leave the Licensed Premises vacant, but shall in good faith carry
on each of Licensee's Businesses on such days, except for legal
holidays on which the Store is closed or other days as agreed between
Licensor and Licensee, and during such hours as are specified herein.
The specific hours of operation during any day, except Sunday, shall
be from 10:00am to 7:00pm, except that the studio shall be closed from
2:00pm to 3:00pm for lunch, or otherwise as determined by Licensee
based upon local business practice. On Sunday the hours shall be from
the later of store opening or 10:00 am to the earlier of store closing
or 7:00pm with the studio closed from 2:00pm to 3:00pm for lunch. High
Volume Locations may operate for an additional hour to 8:00p.m. at the
option of Licensee. For greater certainty, nothing in this License
shall prevent Licensee from extending the studio hours of operation on
an individual studio basis, provided that Licensee must first review
such change with Licensor and receive Licensor's approval to extend
such hours of operation. Noncompliance by Licensee this Section 7.1(a)
has an adverse, material impact on Licensor. Therefore, on a "per
location" basis during a rolling twelve (12) month period, the first
time Licensee does not comply with such paragraph, Licensee shall pay
Licensor, as an additional License Fee, $200. For each time Licensee
fails to comply thereafter, Licensee shall pay Licensor, as additional
License Fees, $500. In addition, if Licensee fails to comply three (3)
times within a consecutive twelve month period, Licensor may, at its
sole option, terminate this License as it applies to a particular
location.
(b) Licensor covenants and agrees that, subject to the
provisions of this section 7.1(b), it shall not permit any person
other than Licensee to operate a portrait studio on a permanent,
temporary, or "travelling promotion" basis, including, without
limiting the foregoing, the taking of photographic portraits for
graduation, weddings, holidays or special events, within any Store
wherein Licensee carries on a Licensee's Business from time to time.
For greater certainty and notwithstanding the foregoing, nothing
herein contained shall prevent Licensor from: (i) itself or any of its
other licensees selling any merchandise in any Store, including
without limitation, picture frames, film, photographic equipment and
other related merchandise or products related to portrait photographs,
including, but not limited to, the
9
customisation of portraits including oil portraits; (ii) operating a
photographic processing department in any Store; or (iii) operating a
"Glamour Shots" or similar travelling promotional program within any
Store.
7.2 Customer Service Complaints: In the event Licensor receives over
ten (10) legitimate, in Licensor's sole discretion, customer service
complaints in any form (i.e., telephone, written, oral, etc.)
regarding Licensee's business or activities conducted at or from the
Licensed Premises, on a per location basis, during any fiscal year,
Licensee will reimburse Licensor as additional License Fees, within
fifteen (15) days of demand by Licensor, the amount of Fifty Dollars
($50.00) per complaint for administrative services, which shall be in
addition to and not in lieu of any other rights or remedies Licensor
may have under this License or applicable law.
7.3 Customer Service Line: Licensee shall provide, at its sole
expense, signage with a Customer Service Line notice including a toll
free phone number and principal office address. The signage shall be
in a conspicuous location in the Licensed Premises in full view of all
customers while the Store is open for business.
7.4 Trade Name: Licensee hereby acknowledges that Licensee's business
reputation, Permitted Use of the Licensed Premises and ability to
generate patronage to the Licensed Premises and the Store were all
relied upon by Licensor and served as significant and material
inducements contributing to Licensor's decision to execute this
License with Licensee. Licensee hereby covenants and agrees to operate
in the Licensed Premises only under the trade name(s) set forth in the
Basic Provisions, and under no other name or trade name whatsoever
without Licensor's prior written consent which may be withheld in
Licensor's sole discretion. Licensee shall not own, operate, or be
financially interested in, either directly or indirectly (by itself or
with others), a business like or similar to the business permitted to
be conducted hereunder, or which employs the same or similar trade
name, within a radius of one quarter (1/4) mile of the perimeter of
the Store, except for those which Licensee has in operation as of the
date hereof. Without limiting Licensor's other available remedies, in
the event Licensee should violate this section, Licensor may, at its
option, (a) terminate this License as to such location upon thirty
(30) days' written notice to Licensee, (b) enjoin the operation of the
violative Store, or (c) include all Gross Sales generated by any
violative store as Gross Sales in calculating the Percentage License
Fees under this License.
7.5 Care of Licensed Premises:
(a) Licensee shall not conduct within the Licensed Premises any
"fire", "bankruptcy", "going-out-of-business,"
"lost-our-License," "fifty percent off" or similar sales within
the Licensed Premises.
(b) Licensee shall not permit any objectionable or unpleasant
odors to emanate from the Licensed Premises; nor place or permit
any radio, television, loudspeaker or amplifier on the inside or
outside the Licensed Premises or where the same can be seen or
heard from outside the Licensed Premises; nor place any antenna,
awning or other projection on the exterior of the Licensed
Premises; nor take any other action which would constitute a
nuisance or would disturb or endanger other Licensees of the
Store or unreasonably interfere with their use of their
respective premises; nor do anything which would tend to injure
the reputation of the Store. Licensee shall take good care of the
Licensed Premises and keep the same free from waste, dirt, and
rubbish at all times. Receiving and delivery of goods and
merchandise and removal of refuse and trash shall be made only in
the manner and areas prescribed by Licensor.
(c) Licensee shall not, without Licensor's prior written
consent, keep anything within the Licensed Premises or use the
Licensed Premises for any purpose which increases the cost of
insurance or invalidates or diminishes the coverage of any
insurance policy carried on the Licensed Premises or other parts
of the Store. All property kept, stored or maintained within the
Licensed Premises by Licensee shall be at Licensee's sole risk
and responsibility.
(d) Licensee shall maintain all display areas in a neat,
attractive condition and shall keep all display areas lighted
while Licensee is open for business.
7.6 Permits and Other Requirements: Licensee shall be Licensee's sole
responsibility to identify and procure at its sole expense any
permits, certificates of occupancy, business licenses and other
licenses required for the transaction of business in the Licensed
Premises and otherwise comply with all applicable laws, ordinances,
and governmental regulations by Grand Opening.
ARTICLE VIII. MAINTENANCE AND REPAIR OF LICENSED PREMISES
10
8.1 Licensor's Responsibilities: Licensor shall keep the foundation,
exterior walls, heating, air conditioning (operating temperature range of
68 (degrees) to 74 (degrees), roof, rolling or sliding grills and fire
shutters (except doors, and other exterior openings; locks and hardware;,
signs, placards, decorations or advertising media of any type; and interior
painting or other treatment of exterior walls) of the Licensed Premises in
good repair. Licensor, however, shall not be required to make any repairs
occasioned by the act or omission of Licensee or Licensee's agents,
employees, sublicensees, licensees and concessionaires. If the Licensed
Premises needs repairs required to be made by Licensor hereunder, Licensee
shall give immediate written and oral notice thereof to Licensor, and
Licensor shall not be responsible in any way for failure to make any such
repairs until a reasonable time shall have elapsed after receipt by
Licensor of such notice. In addition to sending Licensor written notice,
for any maintenance, warranty, or heat and air control issues, please call
▇▇▇-▇▇▇-▇▇▇▇ or after hours and weekends call ▇▇▇-▇▇▇-▇▇▇▇.
8.2 Licensee's Responsibilities: Licensee shall be responsible for
maintenance and repair of the interior of the Licensed Premises and shall
keep the Licensed Premises in good, clean and habitable condition and shall
at its sole cost and expense keep the Licensed Premises free of insects,
rodents, vermin and other pests and make all needed repairs and
replacements, including replacement of cracked or broken glass, except for
repairs and replacements required to be made by Licensor under the
provisions of Section 8.1, Article XV and Article XVI. Without limiting the
coverage of the previous sentence, it is understood that all construction,
installation and modifications to the Licensed Premises by Licensee are
Licensee's responsibilities and therein include, but are not limited to the
repair and replacement of all plumbing, sprinkler and other electrical,
mechanical and electromotive installation, equipment and fixtures, all
utility repairs in ducts, conduits, pipes and wiring, and any sewer
stoppage located in, under or above the Licensed PremisesIf any repairs
required to be made by Licensee hereunder are not made within ten (10) days
after notice by Licensor, Licensor may at its sole option make such repairs
without liability to Licensee for any loss or damage which may result to
its stock or business by reason of such repairs; and Licensee shall pay to
Licensor upon demand, as additional License Fees hereunder, the cost of
such repairs plus ten percent (10%) thereof as an administrative fee to
Licensor plus interest at the maximum lawful rate in the state where the
Licensed Premises is located (but in no event to exceed one and one-half
percent (1 1/2%) per month), such interest to accrue continuously from the
date of payment by Licensor until repayment by Licensee.
8.3 Licensee's Responsibilities upon Quitting Licensed Premises:
(a) Upon quitting the Licensed Premises for any reason
whatsoever, Licensee agrees to promptly remove all fixtures,
internal and external signage, and personal property. Licensee
shall turn the space into a vanilla shell. This includes removing
all counters, floor coverings, cabinets, signage, partition
walls, and safe. Dropped ceiling and light fixtures shall remain.
Sheetrock on the perimeter walls is to be complete and
unblemished. Licensee shall place a temporary dust wall across
the front of the Licensed Premises during tear down and removal
to prevent dust from entering the Store. Licensee shall be
responsible for disposing of all fixtures and improvements from
the Store, but shall not remove any construction debris during
peak daytime shopping hours as determined by Licensor. The
Licensed Premises shall be left in a clean condition. In
addition, Licensee shall remove exterior signage from the
Licensed Premises and the Store, if applicable and restore
exteriors to their original condition.
(b) If Licensee fails to remove and repair damage caused by the
removal of all fixtures, internal and external signage, and
personal property within five (5) business days after quitting
the Licensed Premises, Licensee shall pay Licensor as additional
License Fees $15,000.00 (fifteen thousand dollars). Licensee's
security deposit, if any, will be applied toward such amount. It
would be impracticable or difficult to ascertain actual resulting
damages to Licensor and the amount set forth above is a
reasonable estimate of such damage and shall be paid to Licensor
as liquidated damages. In the event that any unrepaired, physical
damage to the Demised Premises is in excess of $15,000.00
(fifteen thousand dollars), Licensor reserves the right to repair
such damage and seek further reimbursement from Licensee.
ARTICLE IX. ALTERATIONS AND CONSTRUCTION
9.1 Alterations: Licensee shall not make any alterations, additions or
improvements to the Licensed Premises without the prior written consent of
Licensor, except for the installation of trade fixtures which may be
installed without drilling, cutting, or otherwise defacing the Licensed
Premises. Licensee shall not place merchandise or fixtures outside of the
Licensed Premises, except for T-stands for advertising which have been
approved by Wal-Mart Marketing.
9.2 Construction: All construction work done by Licensee, its contractors,
employees, agents, licensees, officers, suppliers, or any other persons
performing any function for Licensee within the Licensed Premises shall
11
be performed in a good and workmanlike manner, in compliance with all
governmental requirements and in such manner as to cause a minimum of
interference with other construction in progress and with the transaction
of business in the Store. Licensee must erect a dust wall of plywood and
plastic sheeting (i.e. Visquine) during buildout and any other construction
work. Licensee agrees to defend, indemnify and hold Licensor harmless (with
counsel reasonably acceptable to Licensor) against any loss, liability or
damage to persons or property that might arise from such construction or
maintenance, including, without limitation, attorneys' fees and costs of
litigation ("Damages") resulting from such work performed by Licensee, its
contractors, employees, agents, licensees, officers, suppliers, or any
other persons performing any function for Licensee, and Licensee shall, if
requested by Licensor, furnish a bond or other security satisfactory to
Licensor against any such Damages. Licensee's contractors must be licensed
and carry workers' compensation coverage as required by law. Licensee's
contractors must comply with all governmental requirements, including but
not limited to obtaining all applicable permits, licenses, and other
documents necessary to perform such construction work.
9.3 Covenants Against Liens: Licensee covenants and agrees that it shall
not, during the term hereof, suffer or permit any lien to be attached to or
upon the Licensed Premises or any part thereof by reason of any act or
omission on the part of Licensee, its contractors, employees, agents,
licensees, officers, suppliers, or any other persons performing any
function for Licensee, and hereby agrees to save and hold harmless Licensor
from or against any such lien or claim of lien. In the event that any such
lien is filed, Licensee may post a bond or other adequate security to cure
such default; however, any lien must be cleared within five (5) days after
receipt of notice of such lien. If such lien is not cleared, Licensor in
its sole discretion, may pay and discharge the same and relieve the
Licensed Premises therefrom, and Licensee agrees to repay and reimburse
Licensor upon demand for the amount so paid by Licensor together with
interest thereon and such interest shall be at a rate which is the lower of
fifteen percent (15%) per annum or the highest rate allowed by the law of
the state in which the Licensed Premises is located.
ARTICLE X. LICENSOR'S RIGHT OF ACCESS
10.1 Licensor's Right of Access: Licensor shall have the right to enter
upon the Licensed Premises at any reasonable time for the purpose of
inspecting the same or making repairs, alterations or additions to adjacent
premises, showing the Licensed Premises to prospective purchasers, lessees
or lenders, or pursuing or investigating suspected shoplifting offenses.
10.2 Use of Roof: Use of the roof above the Licensed Premises is reserved
to Licensor.
ARTICLE XI. SIGNS; STOREFRONTS
11.1 Signs; Storefronts: Licensee shall not, without Licensor's prior
written consent, (a) make any changes to the storefront or exterior facade
of the Licensed Premises, (b) install any exterior lighting, decorations,
paintings, awnings, canopies or the like, or (c) erect or install any
signs, window or door lettering placards, decorations or advertising media
of any type which can be viewed from the exterior of the Licensed Premises,
excepting only appropriate displays of customary type in its display area.
All signs, lettering, placards, decorations and advertising media shall
conform in all respects to the sign criteria established by Licensor for
the Store from time to time in the exercise of its sole discretion, and
shall be subject to the prior written approval of Licensor as to
construction, method of attachment, size, shape, height, lighting, color
and general appearance, pursuant to the procedures outlined in 11.2 through
11.5. All signs inside the Licensed Premises shall be kept in good
condition and in proper operating order at all times at Licensee's expense.
No temporary banners shall be substituted for permanent signs at any time
or for any reason.
11.2 Building Signage: Licensor may allow, but does not guarantee, exterior
signage of one sign with a maximum of 20 sq. ft. stud- mounted, illuminated
or non-illuminated letters or box with prior written approval required by
the Vestibule Leasing Department. The sign will be installed in the
location dictated by Licensor, in Licensor's sole discretion.
11.3 Installation and Permitting: Licensee will be responsible for all
installation, permitting and costs.
11.4 Licensor Approval: Licensor shall give the final approval of Licensee
signage projects. Licensee will be allowed to begin the permitting process
for its sign after Licensor's signing package has been approved. NOTE:
LICENSOR SIGNAGE WILL HAVE PRIORITY AT ALL LOCATIONS.
12
11.5 Restrictions: No other Licensee signage, such as flags, floor decals,
road signs, road-sign banners, banners hanging on outside of building,
shopping cart signs, etc. will be permitted. All signage must be submitted
to and approved by the Vestibule Leasing Department before they can be
considered for part of Licensee signage in any store. No additional signage
is authorized.
ARTICLE XII. UTILITIES
12.1 Utility Charge: Licensor shall pay all charges for electricity, water,
gas, sewerage service, and H.V.A.C. furnished to the Licensed Premises.
Licensee shall pay for telephone service and any other utility services not
paid for by Licensor. Licensee shall be responsible for the ordering of any
separate telephone line needed in a Licensed Premise. Licensee shall be
responsible for ordering, equipment and monthly recurring charges
associated with same. Licensee may list such telephone number in any
telephone directory using the Trade Name. Licensor will provide cabling and
phone access from the Licensor's phone system to the Licensee's area.
Cabling will be limited to 2-CAT 3 cables terminated on flush-mount
faceplates. Each face plate will be a dual outlet. Phone access will be
limited to an extension phone off of the phone system and will be
programmed to provide paging system access only. Licensor will
cross-connect the Licensee's telephone line to the cabling if requested by
Licensee. Licensee will not use any cordless phone within the Licensed
Premises unless approved by Licensor Telecommunications Department at phone
number ▇▇▇-▇▇▇-▇▇▇▇, option #7.
12.2 Interruption of Utilities: Licensor shall not be liable for any
interruption whatsoever in utility services not furnished by Licensor nor
for interruptions in utility services furnished by Licensor which are due
to fire, accident, strike, acts of God or other causes beyond the control
of Licensor or in order to make alterations, repairs or improvements.
ARTICLE XIII. INDEMNITY AND PUBLIC LIABILITY INSURANCE
13.1 Injury and Damage: Licensor shall not be liable to Licensee or to
Licensee's employees, agents, invitees, or visitors, or to any other person
whomsoever, for any injury to person or damage to property on or about the
Licensed Premises, the Common Area or elsewhere in the Store, caused by the
acts or omissions of Licensee, its employees, sublicensees, licensees or
concessionaires, or of any other person entering the Licensed Premises,
Common Area or Store under the express or implied invitation of Licensee,
or arising out of the use of the Licensed Premises by Licensee or the
conduct of its business therein, or arising out of any breach or default by
Licensee in the performance of its obligations under this License; and
Licensee hereby agrees to defend, indemnify and hold Licensor harmless
(with counsel reasonably acceptable to Licensor) from any damages arising
out of such damage or injury.
13.2 Insurance: Licensee shall keep in force and effect at all times during
the term of this License, with a company or companies acceptable to
Licensor, the following minimum insurance coverages:
a. Workers' Compensation coverage as required by law;
b. Employer's liability coverage on an occurrence basis with general
aggregate limit per occurrence of not less than $1,000,000.00;
and
c. Commercial general liability coverage on an occurrence basis with
general aggregate limit per occurrence of not less than
$2,000,000.00.
If permitted by law, each policy shall name Licensor as an additional
insured and shall contain a provision that such policy may not be canceled
or the coverages provided by it reduced without first giving at least ten
(10) days' written notice to Licensor. Licensee shall provide Licensor with
evidence satisfactory to Licensor of the existence of insurance in
compliance with the provisions of this License. If Licensee fails to comply
with any of the requirements of this License relating to insurance,
Licensor may obtain such insurance and Licensee shall pay to Licensor on
demand as additional License Fees hereunder the cost incurred by Licensor
in doing so, plus ten percent (10%) as an administrative fee to Licensor,
plus interest at the maximum contractual rate (but in no event to exceed
one and one-half per cent (1 1/2%) per month) from the date of payment by
Licensor until repaid by Licensee.
ARTICLE XIV. NON-LIABILITY FOR CERTAIN DAMAGES
14.1 Licensor Non-Liability:
13
(a) Licensor and Licensor's agents and employees shall not be liable
to Licensee for any injury to person or damage to property caused by
the Licensed Premises or other portions of the Store becoming out of
repair; or by defect or failure of any structural element of the
Licensed Premises or of any equipment, pipes or wiring or broken
glass; or by the backing up of drains; or by gas, water, steam,
electricity or oil leaking, escaping or flowing into the Licensed
Premises; nor shall Licensor be liable to Licensee for any loss or
damage that may be occasioned by or through the acts or omissions of
other Licensees of the Store or of any other persons whomsoever,
excepting only duly authorized employees and agents of Licensor.
(b) Licensor and Licensor's agents and employees shall not be liable
to Licensee or to Licensee's employees, agents or visitors, or to any
other person whomsoever, for any injury to person or damage to
property on or about the Licensed Premises or the Common Area caused
in whole or in part by the negligence or misconduct of Licensee, its
employees, sublicensees, invitees, licensees or concessionaires, or of
any other person entering the Store under express or implied
invitation of Licensee, or arising out of the use of the Licensed
Premises by Licensee or the conduct of its business therein, or
arising out of any breach or default by Licensee in the performance of
its obligations under this License; and Licensee hereby agrees to
defend, indemnify and hold Licensor harmless (with counsel reasonably
acceptable to Licensor) from any Damages arising out of such damage or
injury.
14.2 Licensee Non-Liability: Licensee and its agents and employees shall
not be liable to Licensor for any injury to person or damage to property
caused by the Licensed Premises or other portions of the Store becoming out
of repair; or by defect or failure of any structural element of the
Licensed Premises or of any equipment, pipes or wiring or broken glass; or
by the backing up of drains; or by gas, water, steam, electricity or oil
leaking, escaping or flowing into the Licensed Premises; nor shall Licensee
be liable to Licensor for any losses or damage that may be occasioned by or
through the acts or omissions of other Licensees of the Store or of any
other persons whomsoever, excepting only duly authorized employees and
agents of Licensee.
14.3 Mutual Waiver of Subrogation: Licensor and Licensee each hereby
releases the other from any and all liability or responsibility to the
other or to any other party claiming through or under them by way of
subrogation or otherwise, for any loss or damage to property caused by a
casualty which is insured under standard fire and extended coverage
insurance; provided, however, that this mutual waiver shall be applicable
only with respect to a loss or damage occurring during the time when
standard fire and extended coverage insurance policies contain a clause or
endorsement to the effect that any such release shall not adversely affect
or impair the policy or the right of the insured party to receive proceeds
under the policy or when such liability is caused by gross negligence or
willful misconduct.
ARTICLE XV. DAMAGES BY CASUALTY
15.1 Notice to Licensor: Licensee shall give immediate oral and written
notice to Licensor of any damage caused to the Licensed Premises by fire or
other casualty.
15.2 Licensor's Repair of Casualty Damage: In the event that the Store or
Licensed Premises is damaged or destroyed by fire or other casualty covered
by Licensor's insurance, then Licensor may elect either to terminate this
License as to such location or proceed to rebuild and repair the Store
and/or Licensed Premises. Licensor shall give notice to Licensee of such
election within sixty (60) days after the occurrence of such casualty, and
if Licensor elects to rebuild and repair, shall proceed to do so with
reasonable diligence and at its sole cost and expense. As it relates to the
Licensed Premises, Licensor's work under this Article XV shall be limited
to restoring the Licensed Premises to substantially the condition in which
the same existed prior to such casualty, exclusive of any alterations,
additions, improvements, fixtures and equipment installed by Licensee to
substantially the same condition in which the same existed prior to the
casualty.
15.3 Licensee's Repair of Casualty Damage: Licensee agrees that promptly
after completion of such work by Licensor, Licensee will proceed with
reasonable diligence and at Licensee's sole cost and expense to restore,
repair and replace all alterations, addition, improvements, fixtures, signs
and equipment installed by Licensee.
15.4 Operation of Licensed Premises After Casualty: Licensee agrees that
during any period of reconstruction or repair of the Licensed Premises, it
will continue the operation of its business within the Licensed Premises to
the extent practicable. During the period from the occurrence of the
casualty until Licensor's repairs are completed, the Minimum License Fees
shall be reduced to such extent as may be fair and reasonable under the
14
circumstances. License Fees shall be abated during periods in which the
Licensed Premises is closed by reason of work associated with Store
reconstruction or repair.
15.5 Licensee's Insurance: Licensee will secure at Licensee's sole cost
property insurance coverage normally covered in a fire and extended
coverage policy for Licensee's equipment, fixtures, alterations and
improvements and/or betterments. Loss of License Feess coverage shall also
be included.
ARTICLE XVI. CONDEMNATION
16.1 Condemnation Equal to or Greater Than Thirty Percent: If thirty
percent (30%) or more of the floor area of the Licensed Premises is taken
for any public or quasi-public use under any governmental law, ordinance or
regulation or by right of eminent domain or by private purchase in lieu
thereof, this License shall terminate as to such location and the License
Fees shall be abated during the unexpired portion of this License,
effective on the date physical possession is taken by the condemning
authority.
16.2 Condemnation Less Than Thirty Percent: If less than thirty percent
(30%) of the floor area of the Licensed Premises is taken as aforesaid,
this License shall not terminate. Following such partial taking, Licensor
shall make all necessary repairs or alterations to the remaining premises
required to make the remaining portions of the Licensed Premises an
architectural whole.
16.3 Condemnation of Common Area: If any part of the Common Area is taken
as aforesaid, this License shall not terminate nor shall the License Fees
payable hereunder be reduced, except that either Licensor or Licensee may
terminate this License as to such location if the area of the Common Area
remaining following such taking plus any additional parking area provided
by Licensor in reasonable proximity to the Store is less than seventy
percent (70%) of the area of the Common Area immediately prior to the
taking. Any election to terminate this License as to such location in
accordance with this provision shall be evidenced by written notice of
termination delivered to the other party within thirty (30) days after the
date physical possession is taken by the condemning authority.
16.4 Condemnation Compensation: All compensation awarded for any taking (or
the proceeds of private sale in lieu thereof) of the Licensed Premises or
Common Area shall be the property of Licensor, and Licensee hereby assigns
its interest in any such award to Licensor; provided, however, Licensor
shall have no interest in any award made to Licensee for Licensee's moving
and relocation expenses or for the loss of Licensee's fixtures and other
tangible personal property if a separate award for such items is made to
Licensee.
ARTICLE XVII. ASSIGNMENT AND SUBLINCENSING; FRANCHISES
17.1 Licensor's Consent: Licensee shall not assign or in any manner
transfer this License or any estate or interest therein, or sublicense the
Licensed Premises or any part thereof, or grant any license, concession or
other right of occupancy of any portion of the Licensed Premises without
the prior written consent of Licensor, which consent may be withheld at
Licensor's sole discretion. Consent by Licensor to one or more assignments,
sublicensing or grants shall not operate as a waiver of Licensor's rights
as to any subsequent assignments, sublicensing or grants.
17.2 Corporations as Licensees: Intentionally omitted
17.3 Effect of Licensor Consent: Notwithstanding any assignment, subletting
or grant, Licensee and any guarantor of Licensee's obligations under this
License shall at all times remain fully responsible and liable for the
payment of the License Fees herein specified and for all of Licensee's
other obligations under this License (even if future assignments,
sublettings or grants occur subsequent to the assignment, subletting or
grant by Licensee and regardless of whether or not Licensee's consent has
been obtained for such future assignments, sublettings or grants). If the
License Fees and other consideration paid and payable by an assignee,
sublessee or grantee exceeds the License Fees payable under this License,
then Licensee shall be bound and obligated to pay Licensor all such excess
License Fees and other excess consideration within ten (10) days following
receipt thereof by Licensee. In any such event of assignment, subletting or
grant, it is understood and agreed that all License Fees and other
consideration paid to Licensee by an assignee, sublessee or grantee shall
be received by Licensee in trust for Licensor, to be forwarded immediately
to Licensor without offset or reduction of any kind, and upon election by
Licensor, such License Fees and other consideration shall be paid directly
to Licensor as specified in Section 4.1 of this License (to be applied as a
credit and offset to such of Licensee's License Fees and other obligations
as may be selected by Licensor.)
15
17.4 Licensor's Sublease: If Licensor is subleasing the Store,, Licensee
accepts this License subject to all of the terms and conditions of the
underlying Sublease under which Licensor holds the Store as lessee.
Licensee covenants that it will do no act or thing which would constitute a
violation by Licensor of its obligations under such underlying Sublease.
17.5 No Encumbrances: Licensee shall not mortgage, pledge or otherwise
encumber its interest in this License or in the Licensed Premises.
17.6 Transfer by Licensor: In the event of the transfer and assignment by
Licensor of its interest in this License and in the Store to a person
expressly assuming Licensor's obligations under this License, Licensor
shall thereby be released from any further obligations hereunder, and
Licensee agrees to look solely to such successor in interest of Licensor
for performance of such obligations. Any security given by Licensee to
secure performance of Licensee's obligations hereunder may be assigned and
transferred by Licensor to such successor in interest, and Licensor shall
thereby be discharged of any further obligation relating thereto.
17.7 Franchises: From time to time and with written consent from Licensor,
Licensee may grant to third parties selected by Licensee the right to
operate a business in the Licensed Premises, under the same trade name, as
a franchisee of Licensee. A franchisee will be responsible to Licensor in
the same manner and to the same extent as Licensee is under this License
and shall execute such documents as Licensor shall reasonably require to
evidence their assumption of the obligations contained herein. Licensee
shall, at all times, remain liable to Licensor despite any grant to a
franchisee, and shall also be liable for all acts or omissions of any
franchisee. Licensee shall, with counsel reasonably acceptable to Licensor,
defend, indemnify and hold Licensor harmless from any claim, suit, action
or proceeding brought by any franchisee or prospective franchisee of
Licensee alleging a breach or violation of any law, regulation or statute
concerning or regulating the sale or operation of franchisees, except if
such breach or violation is caused by the gross negligence or willful act
of Licensor. Licensor shall not be considered a franchisor under any
circumstance and shall have no relationship with such franchisee except for
the relationship of Licensor and Licensee.
ARTICLE XVIII. TAXES AND INSURANCE
18.1 Licensee's Responsibility for Taxes: Licensee shall be liable for all
taxes levied against personal property and trade fixtures placed by
Licensee in the Licensed Premises. If any such taxes are levied against
Licensor or Licensor's property and Licensor elects to pay the same, or if
the assessed value of Licensor's property is increased by inclusion of
personal property and trade fixtures placed by Licensee in the Licensed
Premises and Licensor elects to pay the taxes based on such increase,
Licensee shall pay to Licensor upon demand that part of such taxes for
which Licensee is primarily liable hereunder.
18.2 Licensor's Responsibility for Taxes: Except as provided in Section
18.1, Licensor shall pay or cause to be paid all general real estate taxes,
general and special assessments, parking surcharges and other governmental
charges (hereinafter collectively referred to as the "General Taxes")
levied against the Store for each real estate tax year.
18.3 License Fees Taxes, etc.: If at any time during the License Term, a
tax or excise on License Fees or other tax however described (except any
franchise, capital stock, income or excess profits tax imposed upon
Licensor) is levied or assessed against Licensor by any lawful taxing
authority on account of Licensor's interest in this License or the License
Fees or other charges reserved hereunder, as a substitute in whole or in
part, or in addition to the General Taxes described in Section 18.2 above,
Licensee agrees to pay to Licensor upon demand, and in addition to the
License Fees and other charges prescribed in this License, the amount of
such tax or excise. In the event any such tax or excise is levied or
assessed directly against Licensee, then Licensee shall be responsible for
and shall pay the same at such times and in such manner as the taxing
authority shall require.
ARTICLE XIX. DEFAULT BY LICENSEE AND REMEDIES
19.1 Events of Default: In addition to any Events of Default specifically
mentioned throughout this License, each of the following shall be deemed to
be an "Event of Default" by Licensee under this License:
16
a. Licensee shall fail to pay any installment of License Fees or any
other obligation hereunder involving the payment of money and such
failure shall continue for a period of ten (10) days after the date
due.
b. Licensee shall fail to comply with any term, provision or covenant
of this License other than as described in subsection (a) above.
Licensee shall have the right to cure such failure within fifteen (15)
days after notice thereof to Licensee by Licensor, or, as to matters
which cannot be remedied within fifteen (15) days if Licensee fails to
commence efforts to remedy such default within such fifteen (15) day
period and thereafter diligently prosecute such efforts so that such
default is cured within a reasonable time, not to exceed ninety (90)
days from Licensee's receipt of such notice. If such event of default
occurs, Licensor shall have the right to enter upon the Licensed
Premises without being liable for prosecution of any claim for damages
therefor, and do whatever Licensee is obligated to do under the terms
of this License; and Licensee agrees to reimburse Licensor on demand
for any expenses which Licensor may incur in thus effecting compliance
with Licensee's obligations under this License including reasonable
attorney fees, court costs, and/or other expenses; and Licensee
further agrees that Licensor shall not be liable for any damages
resulting to Licensee from such action.
c. Licensee or any guarantor of Licensee's obligations under this
License shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
d. Licensee or any guarantor of Licensee's obligations under this
License shall file a petition (or have an involuntary petition filed
against it which is not dismissed within sixty (60) days after filing)
under any section or chapter of the Federal Bankruptcy Act, as
amended, or under any bankruptcy or insolvency law or statute of the
United States or any state.
e. A receiver or trustee shall be appointed for the Licensed Premises
or for all or substantially all of the assets of Licensee or any
guarantor of Licensee's obligations under this License.
f. Licensee shall desert, cease to continuously operate, or vacate or
commence, threaten or declare its intention to desert or vacate, the
Licensed Premises or any substantial portion of the Licensed Premises;
or shall remove, attempt to remove or threaten or declare its
intention to remove, without the prior written consent of Licensor,
all or a substantial value of Licensee's goods, wares, equipment,
fixtures, furniture, or other personal property.
g. Licensee shall, by any act or omission, cause or permit a lien to
be created or to arise by operation of law or otherwise upon the
Licensed Premises. In the event a lien is filed, Licensee may post a
bond or other adequate security to cure such default; however, any
lien must be cleared within five (5) days after receipt of notice of
such lien.
h. Licensee or any of its employees, agents, licensees, officers,
suppliers, or contractors shall violate any rule, local ordinance, law
(civil or criminal), or commit any illegal act or omission in the
operation or any other activity associated in any way with the
Licensed Premises.
19.2 Licensor's Remedies: Failure by Licensor to enforce one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default.
(a) In the event that Licensor shall obtain possession by reentry,
summary proceedings, legal or equitable actions or proceedings or
other lawful measures as a result of any Default by Licensee, Licensee
agrees to pay to Licensor all reasonable and ordinary legal expenses
incurred by Licensor in obtaining possession of the Licensed Premises
and the usual and ordinary commissions for re-letting the same for any
term not extending beyond the term of this License. Licensee further
agrees in such event to remain liable for and to pay all License Fees
and other sums herein reserved, less the net amount of License Fees
which shall be collected and received by Licensor from the Licensed
Premises, for and during the balance of the term of this License. If
Licensor does not re-let the Licensed Premises, Licensor may elect to
recover, as liquidated damages and not as a penalty, an amount equal
to the License Fees provided herein to be paid by Licensee to Licensor
for the remainder of the term of this License, less the fair rental
value of the Licensed Premises for said period.
17
(b) Licensor may terminate this License as to such location upon ten
(10) days written notice, in which event Licensee shall immediately
surrender the Licensed Premises to Licensor. If Licensee fails to do
so, Licensor may, without prejudice to any other remedy which Licensor
may have for possession or arrearages in License Fees (including any
interest which may have accrued pursuant to Article III of this
License), enter upon and take possession of the Licensed Premises. In
addition, Licensee agrees to pay to Licensor on demand the amount of
all loss and damage which Licensor may suffer by reason of any
termination effected pursuant to this Subsection. Licensee hereby
waives any statutory requirement of prior written notice for filing
eviction or damage suits for nonpayment of License Fees. Licensee
hereby waives any claim that may arise against Licensor as a
consequence of Licensor's re-entry. In addition, Licensor may choose
to terminate either a specific location or the entire License
agreement at Licensor's sole discretion. Terminating one location does
not mean all locations are automatically terminated.
(c) When Licensor desires, Licensor may demand a final settlement.
Upon demand for a final settlement, Licensor shall have a right to,
and Licensee hereby agrees to pay, the difference between the total of
all License Fees and other charges provided in this License for the
remainder of the term and the reasonable rental value of the Licensed
Premises for such period, such difference to be discounted to present
value at the rate of eight percent (8%) per annum).
(d) Licensor may accelerate payments of future installments of License
Fees without setoff or mitigation, and Licensee shall pay to Licensor
a sum equal to the entire amount of the License Fees for the remainder
of the License term, plus any other sums due to Licensor under this
License.
(e) Licensee shall compensate Licensor for all expenses incurred by
Licensor in repossession (including among other expenses, any increase
in Insurance Premiums caused by the vacancy of the Licensed Premises),
all expenses incurred by Licensor in relicensing or reletting
(including among other expenses, repairs, remodeling, replacements,
advertisements and brokerage fees), all concessions granted to a new
Licensee or Tenant upon relicensing or reletting (including among
other concessions, renewal options), all losses incurred by Licensor
as a direct or indirect result of Licensee's default (including among
other losses, any adverse reaction by Licensor's mortgagee or by other
Licensees or Tenants or potential Licensees or Tenants of the Store),
and a reasonable allowance for Licensor's administrative efforts,
salaries and overhead attributable directly or indirectly to
Licensee's default and Licensor's pursuing the rights and remedies
provided herein and under applicable law.
19.3 Injunction: Licensor may restrain or enjoin any breach or threatened
breach of any covenant, duty or obligation of Licensee herein contained
without the necessity of proving the inadequacy of any legal remedy or
irreparable harm.
19.4 Attorney's Fees: Licensee agrees to pay any reasonable attorney's fees
and expenses incurred by Licensor by reason of an Event of Default.
19.5 Additions to Minimum License Fees: In determining the monthly License
Fees and other amounts due as provided in this License, there shall be
added to the Minimum License Fees, the charges for taxes, plus one
twenty-fourth (1/24) of the total of all Percentage License Fees because of
Gross Sales during the two (2) full fiscal years immediately preceding the
date Licensor initiated action pursuant to said subsection (or, if two (2)
full fiscal years have not then elapsed, to the corresponding fraction of
all Percentage License Fees required to be paid because of Gross Sales
during the period commencing with the Commencement Date of this License and
concluding with the date on which Licensor initiated such action).
19.6 Remedies are Cumulative: Unless expressly provided otherwise herein,
remedies conferred by this License upon the respective parties are not
intended to be exclusive, but are cumulative and in addition to remedies
otherwise afforded by law.
ARTICLE XX. LICENSOR'S CONTRACTUAL SECURITY INTEREST
20.1 This section has been deleted in its entirety.
20.2 This section has been deleted in its entirety.
18
ARTICLE XXI. HOLDING OVER
21.1 Holdover Status: If Licensee remains in possession of the Licensed
Premises after the expiration of this License and without the execution of
a new License, it shall be deemed to be occupying the Licensed Premises as
a Licensee from month-to-month at a monthly rate equal to the Minimum
License Fees in effect at the expiration of this License, plus other
amounts (including without limitation any Percentage License Fees) due
under this License, plus fifty percent (50%) of the total of all such
amounts, and such holdover tenancy shall otherwise be subject to all the
provisions of this License.
ARTICLE XXII. SUBORDINATION AND ATTORNMENT
22.1 Mortgages, etc.: Licensee accepts this License subject and subordinate
to any leases, mortgages, deeds of trust or other liens ("Lien") presently
existing or hereafter placed upon the Licensed Premises or the Store as a
whole and to any renewals and extensions thereof. Licensee agrees that any
such Lien holder shall have the right at any time to subordinate such Lien
to this License; provided, however, notwithstanding that this License may
be (or made to be) superior to a Lien, the provisions of such Lien relative
to the rights of the Lien holder with respect to proceeds arising from an
eminent domain taking (including a voluntary conveyance by Licensor) and/or
arising from insurance payable by reason of damage to or destruction of the
Licensed Premises shall be prior and superior to any contrary provisions
contained in this instrument with respect to the payment or usage thereof.
Licensor is hereby irrevocably vested with full power and authority to
subordinate this License to any Lien hereafter placed upon the Licensed
Premises or the Store as a whole, and Licensee agrees upon demand to
execute such further instruments subordinating this License as Licensor may
request; provided, however, that upon Licensee's written request, Licensor
shall use good faith efforts to obtain from any such Lien holder a written
agreement that the rights of Licensee shall remain in full force and effect
during the License Term so long as an Event of Default does not occur under
this License.
22.2 Notice to Mortgagee: If the holder of an outstanding mortgage, deed of
trust or other lien covering Licensor's interest in the Licensed Premises
has given Licensee written notice of its interest in this License, Licensee
may not exercise any remedies for default by Licensor hereunder unless such
default remains uncured thirty (30) days after Licensee gives such holder
written notice of such default.
22.3 Estoppel Certificates: Licensee agrees that it will from time to time
upon request by Licensor execute and deliver to Licensor a written
statement addressed to Licensor (or as designated by Licensor), identifying
Licensee and this License, certifying that this License is unmodified and
in full force and effect (or identifying any modifications and certifying
that this License is in full force and effect as so modified), confirming
that Licensor is not in default under this License (or if Licensor is in
default, specifying any default), confirming Licensee's agreements
contained above in this Article XXII, confirming the Commencement and
Termination Dates of this License and containing such other information,
certifications or confirmations as Licensor may reasonably request.
Licensor is hereby irrevocably appointed and authorized as the agent and
attorney-in-fact of Licensee to execute and deliver any such written
statement on Licensee's behalf if Licensee fails to do so within seven (7)
days after the delivery of a written request from Licensor to Licensee.
Licensor may treat such failure as an Event of Default.
22.4 Attornment: Licensee shall attorn to any of Licensor's successors
under all the terms, covenants and conditions of this License for the
balance of any remaining License Term.
ARTICLE XXIII. NOTICES & CORRESPONDENCE
23.1 Notices: Any notice required or permitted hereunder shall be in
writing (a) by certified mail or (b) by overnight delivery. Any notice
shall be deemed to be delivered when actually received by the designated
addressee if delivered in person; or, regardless of whether actually
received or not, when deposited in the United States Mail, postage prepaid,
certified mail, return receipt requested, addressed to the parties hereto
at the respective notice addresses set forth in the Basic Provisions or at
such other addresses as they have theretofore specified by written notice.
23.2 Notice Binding: All parties included within the terms "Licensor" and
"Licensee", respectively, shall be bound by notices and payments given and
made in accordance with the provisions of this License to the same effect
as if each had received such notice or payment.
19
ARTICLE XXIV. REGULATIONS
24.1 Compliance with Regulations:
(a) Licensee shall comply with all laws, rules, orders, directives and
regulations (collectively "Regulations") pertaining to the Licensed
Premises, including but not limited to the Americans with Disabilities Act
(ADA) and environmental Regulations. Licensee waives any claim it may have
against Licensor regarding any changes Licensor may make in the Store or
the Licensed Premises necessary to comply with such Regulations.
(b) Licensee and Licensor specifically acknowledge and agree that they
will comply with all applicable Federal, state and local laws prohibiting
discrimination because of race, national origin, citizenship, religion,
sex, disability, or veteran status.
24.2 Hazardous Waste: Licensee (hereafter the indemnifying party), its
successors and assigns, shall indemnify, defend and hold harmless Licensor
(with counsel reasonably acceptable to Licensor) from and against any and
all losses, liabilities (including strict liability), damages, injuries,
expenses, and costs including, without limitation, reasonable attorney's
fees, of any settlement or judgment and claims of any and every kind
whatsoever paid, incurred or suffered by, or asserted against, Licensor,
its successors and assigns by any person or entity or governmental agency,
for, with respect to, or as a direct or indirect result of the escape,
seepage, leakage, spillage, emission, discharge or release of any Hazardous
Substance (as defined herein below) resulting from the operations of the
Licensee upon or under Licensor's land including without limitation, any
losses, liabilities (including strict liability), damage, injuries,
expenses, and costs, including, without limitation, reasonable attorney's
fees, of any settlement or judgement or claims asserted or arising under,
as amended, the Comprehensive Environmental Response, Compensation and
Liability Act, the Superfund Amendment and Reauthorization Act, the
Resource Conservation Recovery Act, the Federal Water Pollution Control
Act, the Federal Environmental Pesticides Act, the Clean Water Act, any so
called federal, state or local "Superfund" or "Superlien" statute, or any
other statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability (including strict liability),
or standards of conduct concerning any Hazardous Substance.
ARTICLE XXV. RELOCATION
25.1 Relocation: If the Store relocates, Licensor, at its sole option, may
terminate this License as to such location and neither party shall have any
further rights, duties or obligations hereunder. If Licensor chooses not to
terminate the License, then Licensee shall relocate with the Store.
Licensee will be responsible for installing its own improvements and trade
fixtures in the same manner as previously described in this License.
ARTICLE XXVI. MISCELLANEOUS
26.1 No Partnership: Nothing herein shall be deemed to create the
relationship of principal and agent, partnership, joint venture or any
relationship between the parties hereto other than the relationship of
Licensor and Licensee.
26.2 Confidentiality: Both parties agree that they, and all of their
employees and agents, shall keep confidential the terms of this License.
The only information either party may give another, upon inquiry is that
Licensor and Licensee have negotiated a License, unless additional
disclosure is required by law. Both parties specifically recognizes that it
is important to the other that any future negotiations it may have with
others not be impacted by the terms of this arms length agreement, and
therefore neither party shall disclose any of the economics nor any other
terms of this License.
26.3 Consents: Any clause referring to Licensor approval refers to written
consent. Where consent, approval or permission is required of a party,
whether to grant such consent, approval or permission shall be within the
sole discretion of such party; and the delay or withholding of such
consent, approval or permission shall not constitute any nature of breach
hereunder or any defense to the performance of any covenant or obligation
of the other party hereunder.
26.4 Waivers: One or more waivers of any covenant, term, or condition of
this License by either party shall not be construed as a waiver of a
subsequent breach of the same covenant, term or condition. The consent or
approval by either party to or of any act by the other party requiring such
consent or approval shall not be deemed to waive or render unnecessary
consent to or approval of any subsequent similar act.
20
26.5 Force Majeure: Whenever a period of time is prescribed for action
to be taken by either party, neither party shall be liable or
responsible for, and there shall be excluded from the computation of
any such period of time, any delays due to strikes, riots, acts of God,
terrorism, shortages of labor or materials, war, governmental laws,
regulations or restrictions or any other causes of any kind whatsoever
which are beyond the reasonable control of such party.
26.6 Governing Law: The laws (excluding the law regarding conflict of
laws) of the state in which the Licensed Premises are located shall
govern this License with regards to such Licensed Premises. If any
provision of this License is held to be invalid or unenforceable, the
validity and enforceability of the remaining provisions of this License
shall not be affected thereby. The parties agree that any action, suit
or proceeding concerning this License shall be brought only in ▇▇▇▇▇▇
County, Arkansas, which shall be the sole and exclusive venue therefor.
26.7 Captions: The captions used are for convenience only and do not
limit or enlarge the provisions.
26.8 Number; Gender: Whenever here the singular is used, the same
shall include the plural, and words of any gender shall include each
other gender.
26.9 Successors: This License shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors
in interest and legal representatives, except as otherwise expressly
provided.
26.10 Entire Agreement: This License, together with any exhibits or
other writings attached hereto or incorporated by reference herein,
contain the entire agreement between the parties, and all prior and
contemporaneous negotiations, agreements and understandings are
superseded hereby and merged and integrated herein. No agreement shall
be effective to change, modify or terminate this License, in whole or
in part, unless in writing and duly signed by both parties. Licensor
and Licensee hereby acknowledge that they are not relying on any
representation or promise of the other, except as may be expressly set
forth or incorporated by reference in this License. No oral statements,
representations or prior written matter relating to the subject matter
of this License shall give rise to any duties or covenants on the part
of either party, express or implied, other than the express duties and
covenants set forth herein. ANY REPRESENTATION BY A PARTY'S EMPLOYEES
OR AGENTS OR BY ANY THIRD PARTY WHICH IS NOT INCORPORATED IN THIS
LICENSE SHALL NOT BE BINDING UPON THE PARTY AND SHOULD BE CONSIDERED AS
UNAUTHORIZED.
26.11 Other Payments: Notwithstanding the provisions of Section 4.1
above, any check or other payment tendered by Licensee as a payment in
full or in any other stated proportion of an unliquidated or disputed
amount shall be sent to the address to be used for notices under this
License and shall be accompanied by similarly addressed correspondence
which states that the accompanying check or other payment is tendered
as payment in full or in a stated proportion of a specified debt. A
check or other consideration sent to the address given under subsection
a above shall not be effective as an accord and satisfaction, whether
or not marked or accompanied by a writing indicating "payment in full"
or similar language, or have any other effect upon the obligations of
Licensee, other than a credit for payment in the amount of the check or
other consideration received by Licensor.
26.12 Store Closing: Notwithstanding anything herein to the contrary,
Licensee agrees to the cancellation of this License and agrees to
vacate the Licensed Premises on the date the Store ceases doing
business in and at that location. Licensor shall be allowed to cease
doing business in the Store at any time, for any reason. This License
is subordinate to the Licensor's Store Lease in all respects. If
Licensor's right to occupy is terminated or Licensor closes the Store
for any reason, this License terminates without liability.
26.13 Licensee: "Licensee" includes Licensee's successors and assigns.
26.14 Approvals: When approvals are required to be obtained herein by
Licensee from Licensor, "Licensor" means the Wal-Mart Leasing Manager
as listed in the Basic Provisions, unless otherwise specifically stated
or Licensee is otherwise notified.
26.15 Restrictions: If Licensee is prohibited from operating its
business in the Licensed Premises due to restrictions found in an ECR
or similar document, Licensor will not be considered in default of this
License, and this License will terminate as to such location upon
written notice to Licensee from Licensor. Licensee shall have no
recourse against Licensor for any resulting damages.
21
26.16 Advertisements: Licensee may advertise the existence and location
of its business only after Licensor has approved the manner and content
of such advertisement, which approval will not be unreasonably withheld
or delayed. Aside from notices of the existence and location of
Licensee's business, Licensee will not use Licensor's name, trademark,
servicemark, or logo in any advertising, marketing, or solicitation
materials without the Licensor's written consent. In no event will
either party advertise or otherwise represent that it has any
relationship with the other other than the relationship of Licensor and
Licensee arising out of Licensee's occupying space in the Store. In
addition, Licensee may not initiate any press release containing
Licensor's name or representing any relationship to Licensor
whatsoever. Notwithstanding the foregoing, Licensor recognizes that
Licensee's competitors have access to radio and television advertising
and that Licensee believes that its weekly unit sales will improve in
some areas if it has access to radio, television or other electronic
advertising. In this regard, Licensor will use its best efforts, but
shall not be obligated in any way, to permit and enable Licensee to use
radio, television and other electronic media for advertising purposes.
26.17 Licensor's Default & Liability: If Licensor fails to comply with
a term, provision or covenant of this License, Licensor shall have
thirty (30) days after written notice thereof by Licensee to Licensor
to cure such default, or, as to matters which cannot be remedied within
thirty (30) days, Licensor agrees to commence efforts to remedy such
default within such thirty (30) day period and thereafter diligently
prosecute such efforts so that such default is cured within a
reasonable time from Licensor's receipt of such notice. The liability
of Licensor to Licensee for any default by Licensor under the terms of
this License shall be limited to an amount equal to one year of License
Fees for the location in which Licensor was found in default.
26.18 Right to Remove Location from License/Terminate: Intentionally
omitted.
26.19 Right to Terminate all Locations: In the event Licensee is in
default of this License regarding one-third of its locations, Licensor
reserves the right to terminate this License as it applies to all
locations.
26.20 Attorney's Fees: Licensor and Licensee agree that if either party
brings an action against the other party to enforce the terms hereof or
to declare rights hereunder each party shall pay its own attorney's
fees and costs incurred therein except as otherwise provided herein.
26.21 Licensing of Stores: With regard to the licensing of Stores,
Licensor hereby agrees to the following:
. Licensor shall License a minimum of one hundred and fifty (150) Net
New Stores per year for the first four (4) years of this License,
thereafter, Licensor shall use its best efforts to License
approximately one hundred and fifty (150) Net New Stores per year;
. In all new and existing Stores in which space is available for
outside vendors, Licensor shall use its best efforts, but shall not
be obligated in any way, to give [***] to Licensee for the use of
such space;
. Licensor shall use its best efforts, but shall not be obligated in
any way, to have Licensee's Business drawn into the architectural
plans for any new Store of one-hundred thousand square feet (100,000
sq. ft.) or larger, and
. Licensor shall use its best efforts, but shall not be obligated in
any way, to License Licensee's Business in all of its Division 1
Stores and SuperCenters that do not have a portrait studio.
. Licensor shall use its best efforts, but shall not be obligated in
any way, to provide sufficient floor space to allow for two camera
rooms in High Volume Locations.
Notwithstanding the provisions of this Section 26.21, Licensor
disclaims that this Section 26.21 warrants or guarantees in any way that this
License shall be extended to any particular Store operated by Licensor in the
United States and Licensor further reserves the right to refuse, in its sole and
absolute discretion, to extend this License to any particular Store operated by
Licensor in the United States.
-----------------------
[***] Redacted pursuant to a request for confidential treatment.
22
EXHIBIT A
COMMENCEMENT AGREEMENT
Re: Wal-Mart Master License Agreement between Wal-Mart Stores, Inc.
("Licensor") and the undersigned ("Licensee") concerning
Wal-Mart Store No. _______, _______, _______, (the "Store").
List store location on all correspondence.
Licensor and Licensee confirm the following information with respect to
the Store (capitalized terms not otherwise defined in this agreement shall have
the meaning given to them in the Wal-Mart License Agreement).
1. The Wal-Mart License Agreement is in full force and effect and has not been
modified, superseded or changed, except as follows:
2. Licensee accepted the Licensed Premises and opened on ________________.
3. The initial License Term commenced on _________ and will expire on ________.
EXECUTED BY LICENSOR AND LICENSEE AS OF ______________________:
Licensor: Licensee:
Wal-Mart Stores, Inc. PCA International, Inc.
By:________________________________________ By:________________________________
Title: Director Title: ____________________________
-------------------------------------
23
EXHIBIT B
RENEWAL OPTION
This License shall be automatically renewed with respect to any of
Licensee's Businessess for one (1) term of five (5) year(s) unless notice is
given by either Licensor or Licensee at least 180 (one hundred eighty) days
prior to expiration of the then current term as to such of Licensee's Businesses
as stated in the notice. The terms of this License and the Licenses created
pursuant to this License shall be continued for any any renewal period.
INITIALED:
LICENSOR: _____________
LICENSEE: _____________
24
ATTACHMENT A
LICENSEE'S BUSINESSES
Licensor does hereby License to Licensee and Licensee does hereby accept such
License in accordance with the Wal-Mart Master License Agreement between the
parties made the 4th day of April, 2002 to carry on a Licensee's Business in or
about each of the following Wal-Mart stores (each of which shall be a "Store"),
each of which shall have a Commencement Date in respect of Licensee's Business
located in or about the applicable Store as set forth adjacent to the applicable
store (for greater certainty, the format below shows the Wal-Mart Store #,
followed by the city and state of such Store):
SEE ATTACHED SPREADSHEET--ATTACHMENT A-1
The Licenses created pursuant to this Attachment A shall supersede any agreement
currently in place for such locations and shall commence on the Commencement
Date and, subject to earlier termination as provided for in this License,
continue in effect for each Licensee's Business for a term ending on the End
Date (the "Term").
IN WITNESS WHEREOF the parties have executed this Attachment A this 5th
day of April, 2002.
WAL-MART STORES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: Director, Wal-Mart Realty Co.
-----------------------------------
WAL-MART STORES EAST, LP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: Director, Wal-Mart Realty Co.
-----------------------------------
WAL-MART LOUISIANA, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: Director, Wal-Mart Realty Co.
-----------------------------------
WAL-MART STORES TEXAS, LP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: Director, Wal-Mart Realty Co.
-----------------------------------
PCA INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇ - President
25
ATTACHMENT A - Supplement 1
LICENSEE'S BUSINESSES IN MICHIGAN
Licensor does hereby License to Licensee and Licensee does hereby accept such
License in accordance with the Wal-Mart Master License Agreement between the
parties made the 4th day of April 2002 to carry on a Licensee's Business in or
about each of the following Wal-Mart stores (each of which shall be a "Store"),
each of which shall have a Commencement Date in respect of Licensee's Business
located in or about the applicable Store as set forth adjacent to the applicable
store (for greater certainty, the format below shows the Wal-Mart Store #,
followed by the city and state of such Store):
SEE ATTACHED SPREADSHEET -- A-1 - Supplement 1
The Licenses created pursuant to this Attachment A - Supplement 1 shall
supersede any agreement currently in place for such locations and shall commence
on the Commencement Date and, subject to earlier termination as provided for in
this License, continue in effect for each Licensee's Business for a term ending
on the End Date (the "Term").
IN WITNESS WHEREOF the parties have executed this Attachment A
this 17th day of June, 2002.
WAL-MART STORES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr.
---------------------------------------------
Title: ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr. - Director
------------------------------------------
Wal-Mart Realty
---------------
WAL-MART STORES EAST, LP
By: /s/ ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr.
---------------------------------------------
Title: ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr. - Director
------------------------------------------
Wal-Mart Realty
---------------
WAL- LOUISIANA, LLC
By: /s/ ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr.
---------------------------------------------
Title: ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr. - Director
------------------------------------------
Wal-Mart Realty
---------------
WAL- MART STORES TEXAS, LP
By: /s/ ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr.
---------------------------------------------
Title: ▇▇▇▇▇▇ ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇, Jr. - Director
------------------------------------------
Wal-Mart Realty
---------------
PCA INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇ - President
26
PCA INTERNATIONAL, INC. ATTACHMENT A - 1 - Supplement 1
Store Lease City State Commencement Date End Date Square Footage
----- ----- ---- ----- ------------------ -------- --------------
01422 27494 ▇▇▇▇ MI 4/4/2002 4/30/2007 180
01428 27497 MT. PLEASANT MI 4/4/2002 4/30/2007 180
01540 32855 SOUTH HAVEN MI 4/4/2002 4/30/2007 98
01593 27587 COLDWATER MI 4/4/2007 4/30/2007 390
01611 27600 FORT GRATIOT MI 4/4/2007 4/30/2007 260
01642 27620 CHARLOTTE MI 4/4/2007 4/30/2007 390
01719 33626 BIG RAPIDS MI 4/4/2007 4/30/2007 390
01752 27690 BAY CITY MI 4/4/2007 4/30/2007 216
01754 27692 HOWELL MI 4/4/2007 4/30/2007 390
01790 27713 MONROE MI 4/4/2007 4/30/2007 180
07198 31924 CARO MI 4/4/2007 4/30/2007 390
01824 27731 YPSILANTI MI 4/4/2007 4/30/2007 260
01836 27741 ADRIAN MI 4/4/2002 4/30/2007 180
01923 27809 COMSTOCK PARK MI 4/4/2002 4/30/2007 180
01928 27810 FLINT MI 4/4/2007 4/30/2007 180
01942 27817 HOLLAND MI 4/4/2007 4/30/2007 180
02010 29988 NILES MI 4/4/2002 4/30/2007 180
02061 31929 PLAINWELL MI 4/4/2002 4/30/2007 390
02062 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 4/4/2007 4/30/2007 180
02079 27900 MARQUETTE MI 4/4/2007 4/30/2007 180
02080 27901 BATTLE CREEK MI 4/4/2007 4/30/2007 180
02102 31352 LUDINGTON MI 4/4/2002 4/30/2007 390
02238 28007 MUSKEGON MI 4/4/2002 4/30/2007 180
02273 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 4/4/2007 4/30/2007 260
02338 28061 TRAVERSE CITY MI 4/4/2007 4/30/2007 180
02354 28065 AUBURN HILLS MI 4/4/2002 4/30/2007 180
02358 28067 ALPENA MI 4/4/2002 4/30/2007 390
02417 28089 PETOSKEY MI 4/4/2002 4/30/2007 180
02493 28116 KENTWOOD MI 4/4/2007 4/30/2007 180
02558 29155 STERLING HEIGHTS MI 4/4/2007 4/30/2007 216
02559 28156 WARREN MI 4/4/2007 4/30/2007 216
02567 28162 GRANDVILLE MI 4/4/2002 4/30/2007 216
02618 28193 COMMERCE MI 4/4/2002 4/30/2007 216
02619 28194 MIDLAND MI 4/4/2002 4/30/2007 216
02644 28203 SAGINAW MI 4/4/2007 4/30/2007 216
02692 33633 MOUNT CLEMENS MI 4/4/2007 4/30/2007 260
02693 33167 FENTON MI 4/4/2002 4/30/2007 240
02700 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ 4/4/2002 4/30/2007 216
02869 27266 LANSING MI 4/4/2002 4/30/2007 216
02872 27265 BELLEVILLE MI 4/4/2007 4/30/2007 216
02873 27264 TROY MI 4/4/2007 4/30/2007 216
02912 28682 TAYLOR MI 4/4/2002 4/30/2007 216
02959 31934 ROSEVILLE MI 4/4/2002 4/30/2007 240
Initial BF
--
Initial MGG
---
27
ATTACHMENT B
NEW STORE LICENSE ATTACHMENT
WHEREAS Wal-Mart Stores, Inc. (the "Licensor") and PCA International, Inc.
(the "Licensee") entered into a Wal-Mart Master License Agreement dated the ____
day of ___________, _____ (the "License");
AND WHEREAS Licensor and Licensee desire that a further retail store of Licensor
be made subject to the License;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants, conditions and agreements herein contained, other good and valuable
consideration and the sum of Five Dollars ($5.00) paid by each party to the
other (the receipt and sufficiency of which are hereby acknowledged), the
parties hereto do hereby covenant and agree, each with the other, as follows:
All of the capitalized terms used in this New Store License Attachment shall
have the meanings ascribed to them in the License unless otherwise defined.
Licensor does hereby License to Licensee and Licensee does hereby accept such
License in accordance with the License between the parties made the ____day of
_____________, _____ to carry on a Licensee's Business in or about Wal-Mart
Store #_______ located at * (the "Store").
The Commencement Date in respect of Licensee's Business located in or about this
Store shall be __________________, unless modified by an Exhibit A, Commencement
Agreement.
The License created pursuant to this New Store License Attachment shall commence
on the Commencement Date and, subject to earlier termination as provided for in
the License Agreement, continue in effect for a term ending at 12:00 midnight on
the last day of the commencement month which is five (5) years following the
Commencement Date for such Licensee's Business (the "Term") and shall be
automatically renewed for an additional period of five (5) years, as provided
for and subject to the conditions contained in Exhibit B of the License.
Upon the execution of this New Store License Attachment, Licensee's Business
located in or about this Store shall become subject to the terms of the License
Agreement.
IN WITNESS WHEREOF the parties have executed this License Attachment
this ___ day of ___________, ____.
WAL-MART STORES, INC.
By: __________________________________
Title:________________________________
PCA INTERNATIONAL, INC.
By: _______________________________
▇▇▇▇▇ ▇▇▇▇ - President
28