MASTER LICENSE AGREEMENT
BY AND BETWEEN
F.M.S., INC.
AND
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a subsidiary of Xxxxxxx International, Inc.
and a licensee of
Xxxxxxx Hygiene Franchise Corp.
TABLE OF CONTENTS
SECTION NO. PAGE NO.
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1. DEFINITIONS 2
2. GRANT OF LICENSE 4
3. USE AND REGISTRATION OF XXXXXXX MARKS 5
4. BEST EFFORTS 7
5. FEES AND RELATED PROVISIONS 7
6. ACCOUNTING AND RECORDS 11
7. TERM 12
8. PILOT LOCATION; DEVELOPMENT OF XXXXXXX SUBFRANCHISES 13
9. OBLIGATIONS OF MASTER FRANCHISEE 15
10. SUBRANCHISE AGREEMENTS; SERVICING, TRAINING AND
SUPERVISING XXXXXXXXXXXXXX 00
00. COMPLIANCE WITH TERRITORIAL LAWS 18
12. INDEPENDENT CONTRACTOR 19
13. COMPLIANCE WITH STANDARDS AND SPECIFICATIONS 20
14. EQUIPMENT AND SUPPLIES 20
15. OPERATIONS MANUAL; INDUSTRIAL SECRETS 22
16. SERVICE ASSISTANCE 24
17. ADVERTISING 26
18. NONCOMPETITION 27
19. TAXES AND DUTIES 28
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SECTION NO. PAGE NO.
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20. INDEMNIFICATION; INSURANCE 28
21. IMPROVEMENTS AND MODIFICATIONS 29
22. TRANSFER BY XXXXXXX 30
23. TRANSFER BY MASTER XXXXXXXXXX 00
00. XXXXXXX'X RIGHT OF FIRST XXXXXXX 00
00. TERMINATION BY XXXXXXX 33
26. TERMINATION BY MASTER XXXXXXXXXX 00
00. EFFECT OF TERMINATION 36
28. NOTICES 37
29. SURVIVAL 38
30. SEVERABILITY 39
31. WAIVER 39
32. COSTS OF ENFORCEMENT 39
33. ENTIRE AGREEMENT 40
34. ARBITRATION AND RELATED PROVISIONS 40
35. FORCE MAJEURE 42
36. TRANSLATION 42
37. GUARANTIES 43
38. CORPORATE OR OTHER FORM OF MASTER FRANCHISEE 43
39. GOVERNMENTAL APPROVALS 43
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SECTION NO. PAGE NO.
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40. GOVERNING LAW 44
41. ACKNOWLEDGMENTS 45
EXHIBITS
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EXHIBIT A - XXXXXXX MARKS
EXHIBIT B - GUARANTY
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MASTER LICENSE AGREEMENT
This Agreement is made and entered into by and between F.M.S. INC. a
Bahamanian corporation, and a subsidiary of Xxxxxxx International, with its
principal offices located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000 (hereinafter referred to as "Xxxxxxx") and _____________________________
a corporation organized under the laws of the Country of _____________________
with its principal offices located at ________________________________________
(hereinafter referred to as "Master Franchisee").
WHEREAS, Xxxxxxx has developed technology that includes the use of
equipment and processes, some of which embodies confidential, proprietary and
trade secret information belonging to Xxxxxxx, for providing restroom hygiene
services and products to restaurants, retail stores, buildings and other types
of commercial establishments; and
WHEREAS, Xxxxxxx, as a result of the expenditure of substantial time,
skill, effort and money, has developed a unique and distinctive system
("System") relating to establishing and operating restroom hygiene businesses,
and
WHEREAS, Xxxxxxx is the owner of the trademark and service xxxx XXXXXXX and
other trademarks, service marks and logos used in connection with the operation
of such businesses in the United States, and identifies or intends to identify
the operation of such businesses with the trademark and service xxxx XXXXXXX and
other trademarks, service marks and logos; and
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WHEREAS, Xxxxxxx is engaged in the business of providing restroom hygiene
services and products itself and through XXXXXXX franchises in the United
States; and
WHEREAS, Master Franchisee desires to acquire an exclusive right to own and
operate, and to license others to own and operate, XXXXXXX businesses in
__________________________________ (the "Territory"); and
WHEREAS, Master Franchisee understands that Xxxxxxx has not previously
operated or licensed any other person to operate XXXXXXX businesses in the
Territory, has no permanent or other establishments in the Territory, and will
not provide Master Franchisee with local assistance in the Territory.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by the parties, Xxxxxxx and Master Franchisee agree as
follows:
1. DEFINITIONS. As used herein:
(a) "Xxxxxxx Technology" shall mean and include the specialized
skills, procedures and techniques developed by Xxxxxxx, which include
confidential, proprietary and trade secret information of Xxxxxxx, for providing
Licensor Services/Products (defined below) and the operation of a business under
this Agreement.
(b) "Xxxxxxx Marks" shall mean and include the xxxx XXXXXXX and such
other trademarks, service xxxx and logos as are listed in Exhibit A hereto or as
may be authorized in writing by an officer of Xxxxxxx from time to time.
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(c) "Licensor Services/Products" shall mean restroom hygiene
services and products appropriate for restaurants, retail stores, buildings
and other types of commercial establishments, all provided according to or
meeting the standards and specifications promulgated by Xxxxxxx from time to
time.
(d) "Industrial Secrets" shall mean all information, knowledge,
know-how, data and techniques embodied in the System and designated or
treated by Xxxxxxx as confidential, proprietary or trade secrets, including
but not limited to information and techniques set forth in the Xxxxxxx
Operations Manual (as further referred to in Section 15), and in other
directives, news bulletins and communications provided by Xxxxxxx to Master
Franchisee. Without limiting the foregoing, Industrial Secrets shall include
customer lists developed by Xxxxxxx, Master Franchisee and Master
Franchisee's subfranchisees.
(e) "Company-owned subfranchisee" shall mean any subfranchisee
owned in whole or part by Master Franchisee or by any person or entity that
has an ownership interest in or is otherwise related to Master Franchisee.
(f) "Company-owned location" shall mean any location, office or
base of operation, however denominated, which is owned and operated by Master
Franchisee for the performance and sale of Licensor Services/Products.
(g) All references in this Agreement to the terms "owner of an
interest in Master Franchisee" and "shareholder of Master Franchisee",
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and all similar references to ownership interest in Master Franchisee,
however evidenced, shall refer jointly and severally, to the owner or owners
of any interest (i) in Master Franchisee or (ii) in any entity that has an
ownership interest in Master Franchisee, either directly or indirectly
through one or more intervening entities.
2. GRANT OF LICENSE. Subject to the terms, conditions and reservations
hereinafter described, Xxxxxxx hereby grants to Master Franchisee the exclusive
right and license to: (i) use the Xxxxxxx Technology and the Xxxxxxx Marks in
connection with promoting and providing Licensor Services/Products in the
country of _____________________ (hereinafter referred to as the "Territory");
(ii) grant to others the right to use the Xxxxxxx Technology and the Xxxxxxx
Marks in connection with promoting and providing Licensor Services/Products in
the Territory; and (iii) grant other the right to promote and provide services
and products relating to Licensor Services/Products in the Territory. For so
long as Master Franchisee is in compliance with the terms of this Agreement,
Xxxxxxx agrees that it will not, during the term of this Agreement and any
extension hereof, provide Licensor Services/Products or license other master
franchisees or subfranchisees to promote and provide Licensor Services/Products
in the Territory. Master Franchisee acknowledges and agrees that the right and
license granted in this Agreement is limited to the Territory, and confers no
rights on Master Franchisee with respect to the Xxxxxxx Technology or the
Xxxxxxx Marks outside the Territory. Xxxxxxx reserves all rights not
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expressly granted to Master Franchisee under this Agreement.
Xxxxxxx reserves the right to require that Master Franchisee's right to
provide Licensor Services/Products (as distinguished from Master Franchisee's
right to grant subfranchises) be exercised only through Company-owned
subfranchisees under separate subfranchise agreements.
3. USE AND REGISTRATION OF XXXXXXX MARKS. Master Franchisee understands
and agrees that the Xxxxxxx Marks possess substantial goodwill and reputation,
and connote a certain standard of quality in connection with Licensor
Services/Products provided in the United States. Master Franchisee agrees not
to commit any act or engage in any conduct that adversely affects any of the
Xxxxxxx Marks. Master Franchisee agrees to promptly notify Xxxxxxx of any
attempt by any party other than Master Franchisee or its subfranchisees to use
the Xxxxxxx Marks in the Territory.
Xxxxxxx reserves the right to add or substitute different trade names,
service marks, trademarks and indicia of origin for the Xxxxxxx Marks for use in
identifying the System and the businesses operated thereunder, if Xxxxxxx'x
then-current Xxxxxxx Marks no longer can be used, or if Xxxxxxx, in its sole
discretion, determines that the addition or substitution of different trade
names, service marks, trademarks and indicia of origin will be beneficial to the
System. In such event, Xxxxxxx may require Master Franchisee to discontinue
or modify Master Franchisee's use of any of the Xxxxxxx Marks or to use one or
more additional or substitute trade names, service marks, trademarks and
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indicia of origin.
Neither Master Franchisee nor any subfranchisee shall use any of the
Xxxxxxx Marks as part of its corporate or other legal name.
Master Franchisee understands and agrees that Xxxxxxx shall have the sole
right to obtain or renew any trademark or service xxxx registration in the
Territory that consists of or includes any of the Xxxxxxx Marks. None of the
Xxxxxxx Marks has been registered or may be registrable in the Territory, and
Xxxxxxx makes no warranty that any Xxxxxxx Marks will be registered. Xxxxxxx
represents: that it has filed or will file an application for registration of
the xxxx XXXXXXX in the Territory; that Xxxxxxx will pursue the application
diligently; and that Xxxxxxx will make any reasonable alterations to the xxxx
XXXXXXX as may be advisable to obtain registration. Master Franchisee
acknowledges and agrees that the denial of Xxxxxxx'x application will not be an
event entitling Master Franchisee to terminate this Agreement, to obtain a
refund of any amount paid or owed to Xxxxxxx, or otherwise to modify Master
Franchisee's obligations under this Agreement.
Master Franchisee agrees to fully cooperate with Xxxxxxx in recording
this Agreement and in registering Master Franchisee and any subfranchisee as
an authorized user of the Xxxxxxx Marks with any governmental agency that
Xxxxxxx deems appropriate and necessary, and also to cooperate in canceling
any applicable recordation and registration on termination or expiration of
this Agreement and/or any subfranchise agreement. All such recordations,
registrations and cancellations shall be
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at Master Franchisee's expense. Master Franchisee agrees to appoint Xxxxxxx
and/or the members of any law firm designated by Xxxxxxx in writing to record,
register or cancel Master Franchisee as an authorized user of the Xxxxxxx Marks.
If Xxxxxxx seeks registration of any part of the Xxxxxxx Technology in the
Territory, the terms of this Section 3 shall equally apply to any recordations,
registrations and cancellations of any licenses related thereto.
4. BEST EFFORTS. Master Franchisee acknowledges that the degree of
success and profitability experienced by Master Franchisee in connection with
the sale of subfranchises and the performance of Licensor Services/Products
under this Agreement depends substantially on the efforts and management of
Master Franchisee and, therefore, Master Franchisee agrees to diligently and
fully exploit its rights under this License Agreement in every manner by
devoting its best efforts and adequate time to promoting and selling
subfranchises to qualified subfranchisees and to promoting and furnishing
Licensor Services/Products to the general public in the Territory.
5. FEES AND RELATED PROVISIONS.
A. In consideration of the exclusive right and license granted in
Xxxxxxx 0, Xxxxxx Xxxxxxxxxx agrees to pay to Xxxxxxx an initial franchise
fee of $U.S.____________ due on execution hereof. [LANGUAGE TO BE ADDED AT
THIS POINT MORE FULLY DESCRIBING THE NATURE OF THE TERRITORIAL DEVELOPMENT
COMMISSION, DEPENDENT ON THE TAX AND OTHER LAWS OF THE PARTICULAR COUNTRY.]
The initial franchise fee shall
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be fully earned on payment to Xxxxxxx and shall be nonrefundable.
B. In consideration of the disclosure of confidential, proprietary and
trade secret information comprising a part of Xxxxxxx Technology, the provision
of technical assistance, and the grant of the right to use the Xxxxxxx Marks and
certain other rights, Master Franchisee shall pay to Xxxxxxx, on the 20th day of
each month, a continuing royalty fee equal to the higher of (i) 3% of the Gross
Sales (as defined below) of Master Franchisee and its first Company-owned
subfranchisee in the preceding calendar month, or (ii) $U.S._________ per month
during year 1 of the initial term, $U.S._________ per month during year 2 of the
initial term, and $U.S._________ per month during year 3 of the initial term,
$U.S._________ per month during year 4 of the initial term and $U.S._________
per month during years 5 to 10 of the initial term.
C. Master Franchisee shall pay to Xxxxxxx, on the 20th of each month,
_______% of Master Franchisee's then-current initial license fee or similar fee
for each new subfranchise (including each new Company-owned subfranchisee after
Master Franchisee's first) licensed in the preceding calendar month.
D. Master Franchisee shall pay to Xxxxxxx, on the 20th day of each month,
for each Company-owned subfranchisee after Master Franchisee's first, and for
each subfranchisee not a Company-owned subfranchisee, a continuing royalty fee
equal to the higher of (i) 1% of Gross Sales (as defined below) of the
subfranchisee in the preceding calendar month, or (ii) $U.S._________ per month
during year 1 of the initial
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term of the subfranchise, $U.S._________ per month during year 2 of the initial
term of the subfranchise, $U.S._________ per month during year 3 of the initial
term of the subfranchise, $U.S._________ per month during year 4 of the initial
term of the subfranchise, and $U.S._________ per month during years 5 to 10 of
the initial term of the subfranchise.
For the purposes of this Agreement, the term "Gross Sales" shall mean all
receipts for Xxxxxxx Services/Products and related services and products,
including all cash receipts, the value of all services or products received for
services or products provided, and all amounts charged, excluding excise, sales
and use taxes, gross receipts taxes or similar taxes paid based on sales, if
those taxes are separately stated when customers are charged, and also excluding
bona fide refunds, allowance or discounts to customers.
All payments to Xxxxxxx shall be made by wire transfer to a bank or
institution designated by Xxxxxxx, and shall be supported by statements that are
formatted as required by Xxxxxxx and certified as correct by Master Franchisee.
Master Franchisee agrees to promptly provide Xxxxxxx with written responses
to any questions from Xxxxxxx about such statements. All payments to Xxxxxxx
shall be made free and clear of all taxes, duties, fees, imports and other
levies, and the same shall not be deducted from any payments due Xxxxxxx, except
as may be required to comply with tax laws of the Territory; provided, however,
that Master Franchisee shall pay any amounts required to be deducted and
withheld to competent taxing authorities and obtain and furnish Xxxxxxx with
official
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receipts for the same, so that Xxxxxxx may obtain corresponding tax credits in
the United States. [LANGUAGE APPROPRIATE TO THE TAX LAWS OF THE PARTICULAR
COUNTRY AND TO THE AVAILABILITY OF A FOREIGN TAX CREDIT TO XXXXXXX WILL BE ADDED
AT THIS POINT.]
If the foreign tax credit currently available to Xxxxxxx for taxes imposed
by any taxing authority within the Territory on any income sourced within the
Territory is repealed or restricted, Xxxxxxx may terminate this Agreement on 60
days written notice to Master Franchisee, unless within such 60 days Master
Franchisee agrees in writing to increase the amounts payable hereunder to
Xxxxxxx to the extent necessary to provide Xxxxxxx with the same net amount it
would have received had the foreign tax credit not been so repealed or
restricted.
All amounts payable to Xxxxxxx under this Agreement, whether for fees,
reimbursements of expenses or otherwise, shall be payable in United States
dollars (or as Xxxxxxx may otherwise direct in writing), and shall be calculated
and converted (to the extent necessary) according to the exchange rate in effect
at the time payment is due, as quoted by a financial institution reasonably
designated by Xxxxxxx. All costs of currency exchange shall be borne by Master
Franchisee. If any payment hereunder to Xxxxxxx for any reason is not made in
United States dollars, the amount of such payment shall be increased to the
extent necessary to cover any currency exchange expenses to be incurred by
Xxxxxxx in converting such payment into United States dollars.
Any amount properly owing from Master Franchisee to Xxxxxxx
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under this Agreement, if not paid when due, shall bear interest at a rate equal
to 1-1/2% per month, or the maximum rate permitted under applicable law,
whichever is less, from 30 days after the date such amount was or would have
been due until paid.
6. ACCOUNTING AND RECORDS. Master Franchisee, its Company-owned
subfranchisees and all other subfranchisees shall maintain books and records
which are adequate to clearly ascertain the amount of continuing royalty
fees payable hereunder to Xxxxxxx. Such books and records shall show clearly
the Gross Sales of Master Franchisee, its Company-owned subfranchisees and
all other subfranchisees. Such books and records also shall reflect the
amount of initial license fees or similar fees received by Master Franchisee
from all subfranchisees. Xxxxxxx may, on reasonable advance notice to Master
Franchisee, inspect the books and records of Master Franchisee and all or any
subfranchisees of Master Franchisee in connection with the business conducted
by Master Franchisee or such subfranchisees under this Agreement. Xxxxxxx
may, in its sole discretion, designate certified public accountants to
examine such books and records to determine the accuracy of fees paid or to
be paid under this Agreement. Xxxxxxx shall pay the cost of such examination,
unless the results of such examination indicate any deficiency equal to or
greater than 5% of Gross Sales reported by Master Franchisee, in which event
Master Franchisee shall bear the entire cost of such examination. Master
Franchisee agrees to furnish Xxxxxxx annually while this Agreement is in
effect with a financial report audited by Master
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Franchisee's internal auditors and/or certified public accountants relating
to the operations of Master Franchisee under this Agreement. Master
Franchisee further agrees to furnish to Xxxxxxx such other financial
information Xxxxxxx may from time to time reasonably request.
7. TERM. This Agreement shall remain in effect for an initial term of
10 years starting from the date hereof, unless terminated sooner in the
manner provided for herein. This Agreement shall be extended automatically
for successive 10-year terms, if Master Franchise is in compliance with the
terms of this Agreement, subject to and on the terms set forth in this
Section 7. If for any reason Master Franchisee is not in compliance with the
terms of this Agreement during the 90-day period prior to expiration of the
initial term or any subsequent 10-year term, Xxxxxxx may, at its option,
preclude any extension of this Agreement by notifying Master Franchisee in
writing of Master Franchisee's noncompliance.
Not less than 90 days prior to the expiration of any terms, Master
Franchisee shall provide Xxxxxxx with notice of its intention to extend this
Agreement for an additional term of 10 years and Xxxxxxx shall, on evaluating
such factors as population growth and density, business growth, economic
conditions in the Territory, profitability of existing subfranchisees in the
Territory and Xxxxxxx'x general strategy with respect to expansion in the
Territory, determine if further development of the Territory is warranted.
Xxxxxxx shall provide Master Franchisee with notice of its determination as to
whether further development in the
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Territory is warranted. If further development is deemed warranted by
Xxxxxxx, then Xxxxxxx and Master Franchisee shall mutually agree on Master
Franchisee's development obligations for the subsequent 10-year term. If
Xxxxxxx and Master Franchisee are unable to agree on such development
obligations by the expiration of the then-current term, this Agreement shall
immediately terminate or the geographic area covered by this Agreement shall be
modified, as determined by Xxxxxxx in its sole discretion. Xxxxxxx may
require, as conditions to any such extension, (i) that Master Franchisee execute
the then-current Xxxxxxx Master License Agreement (with modifications
appropriate for the Territory) and any ancillary agreements and other legal
documents then customarily used by Xxxxxxx for the extension of Master License
Agreements, including a general release in favor of Xxxxxxx, its officers,
directors, agents, employees and affiliated companies, and (ii) that Master
Franchisee pay a $10,000 extension fee to Xxxxxxx.
8. PILOT LOCATION; DEVELOPMENT OF XXXXXXX SUBFRANCHISES.
A. Master Franchisee agrees to establish, within 1 year from the date
hereof and within the Territory, a model location acceptable to Xxxxxxx (the
"Pilot Location"), either as a Company-owned location or a Company-owned
subfranchisee. Throughout the term of this Agreement, Master Franchisee, a
Company-owned subfranchisee or an independent subfranchisee shall continuously
maintain the Pilot Location or an alternate location acceptable to Xxxxxxx for
(i) promoting and providing
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Licensor Services/Products, (ii) testing new services, products and procedures,
and (iii) training subfranchisees. Xxxxxxx agrees not to unreasonably withhold
its consent to the Pilot Location or any alternate location.
B. Subject to the terms of Section 8A, Master Franchisee agrees that it
will use its best efforts to maximize the sale of subfranchises (either to
Company-owned subfranchisees or to independent subfranchisees) in the Territory
during the term of this Agreement. Without limiting the foregoing obligation,
Master Franchisee agrees, at a minimum, to license and maintain in operation, by
and as of the end of each year (measured from the date of this Agreement), the
following cumulative number of locations (whether Company-owned locations,
Company-owned subfranchisees, or independent subfranchisees, and including the
Pilot Location) according to the schedule set forth below during years 1 to 5
of the initial term:
CUMULATIVE NUMBER OF
SUBFRANCHISES AND
COMPANY-OWNED LOCATION
END OF YEAR IN OPERATION AS OF YEAR END
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1 _____________
2 _____________
3 _____________
4 _____________
5 _____________
TOTAL _____________
Not less than 90 days prior to the expiration of year 5 to this Agreement,
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Master Franchisee agrees to submit a plan for developing additional
subfranchises for the remainder of the initial term of this Agreement. The
parties shall then agree on a minimum number of subfranchises which Master
Franchisee shall obligate itself to develop during the remainder of the
initial term; provided, that if by the expiration of year 5 of this
Agreement, Xxxxxxx and Master Franchisee are unable to agree on such
development obligations, this Agreement shall immediately terminate or the
geographic area covered by this Agreement shall be modified, as determined by
Xxxxxxx in its sole discretion.
C. If Master Franchisee fails to meet its obligations in Section 8A and
8B, Xxxxxxx may elect to terminate Master Franchisee's exclusive right to
develop XXXXXXX businesses in the Territory, and may thereafter develop or
license other with the non-exclusive rights to develop XXXXXXX businesses in
the Territory.
9. OBLIGATIONS OF MASTER FRANCHISEE. Master Franchisee agrees to pay
all of its obligations and liabilities to Xxxxxxx, suppliers and creditors
when due. Master Franchisee shall be absolutely responsible and liable for
the prompt payment of all taxes and duties, including income taxes, value
added taxes, sales and use taxes, franchise taxes, gross receipts taxes,
employee withholding taxes or similar taxes, as well as personal property and
real estate taxes payable as a result of Master Franchisee's business.
Xxxxxxx shall have no liability for these or any other taxes, and Master
Franchisee shall indemnify Xxxxxxx for any such taxes that may be assessed or
levied against Xxxxxxx which arise or
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result from the business licensed hereunder.
10. SUBFRANCHISE AGREEMENTS; SERVICING, TRAINING AND SUPERVISING
SUBFRANCHISEES. Master Franchisee warrants, agrees and represents that (a)
each subfranchisee selected by Master Franchisee shall, in the opinion of
Master Franchisee, be of good moral character, and have sufficient business
experience, aptitude and financial resources, to own and operate a XXXXXXX
business; and (b) each subfranchisee of Master Franchisee shall execute the
form of standard subfranchise agreement approved by Xxxxxxx. Master
Franchisee agrees that the standard subfranchise agreement to be executed by
subfranchisees shall not be altered or modified in any respect, without the
prior written approval of Xxxxxxx. Master Franchisee agrees, warrants and
guarantees that it shall, at its sole expense, faithfully and vigorously
enforce all of the terms of all subfranchise agreements with its
subfranchisees and that it will take all legal and other actions necessary to
require its subfranchisees to comply with all terms of their subfranchise
agreements.
Each subfranchise agreement shall provide that all rights and interests of
the subfranchisee arise by virtue of Master Franchisee's rights under this
Agreement. Each subfranchise agreement also shall provide that if this
Agreement is terminated or expires, then the subfranchise agreement also shall
expire, or at Xxxxxxx'x option, Xxxxxxx or its successor or assign shall be
substituted in place of Master Franchisee and assume all obligations and rights
of Master Franchisee under the subfranchise
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agreement. On the execution of each subfranchise agreement, Master
Franchisee shall execute and deliver to Xxxxxxx an assignment (in the form
designated by Xxxxxxx) of all of Master Franchisee's right, title and
interest in and to such subfranchise agreement, provided that such assignment
shall only be effective on (i) the termination or expiration of this
Agreement, and (ii) the election by Xxxxxxx, in its sole discretion, to
accept the assignment of the subfranchise agreement. Each such assignment
shall expressly inure to the benefit of Xxxxxxx, its successors and assigns.
Master Franchisee covenants that it shall perform all of the obligations
of the subfranchise agreements, and shall employ and train such personnel as
may be necessary to do so. Master Franchisee acknowledges that it is solely
responsible for performance of all obligations toward subfranchisees in the
Territory and shall in no way represent to any subfranchisee that Xxxxxxx has
any obligations towards such subfranchisee. Without limiting the generality
of the foregoing, Master Franchisee shall provide field support, guidance and
assistance to subfranchisees on a continuing basis, as well as accounting and
administrative support and guidelines, assistance in identifying and
correcting operational problems and all other support services which Xxxxxxx
may from time to time require of the Master Franchisee to properly service
and support subfranchisees in the Territory.
Master Franchisee shall be solely responsible for training all
subfranchisees, and shall develop a training program for subfranchisees which
meets Xxxxxxx'x requirements and is not less than the training
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provided by Xxxxxxx to its franchisees in the United States.
Master Franchisee shall diligently supervise and monitor on a continuing
basis all subfranchisees operating in the Territory to ensure compliance with
their subfranchise agreements, the Operations Manual and Xxxxxxx'x quality
control standards and specifications. Master Franchisee shall report to
Xxxxxxx (or as it may request) on a regular basis (and from time to time as
requested by Xxxxxxx) with respect to all subfranchisees operating in the
Territory. Xxxxxxx shall have the right, in its sole discretion, to contact
Master Franchisee's subfranchisees directly, to discuss or monitor (i) Master
Franchisee's compliance with this Agreement, (ii) the subfranchisees'
compliance with Xxxxxxx'x quality control standards and specifications, or
(iii) any disputes between master Franchisee and its subfranchisees.
11. COMPLIANCE WITH TERRITORIAL LAWS. Master Franchisee agrees to comply
with the requirements of all laws affecting Master Franchisee's business
hereunder, including all applicable laws from time to time in effect in any part
of the Territory regarding the offer and sale of franchises in the Territory or
relating to the ongoing relationship between a franchiser and a franchisee. In
the marketing of subfranchises to prospective subfranchises, Master Franchisee
shall provide accurate information, shall not make any misrepresentations
(whether innocent, negligent or fraudulent), shall not mislead prospective
subfranchisees, and shall in all respects adhere to the highest standards of
business ethics and integrity. Master Franchisee shall indemnify and hold
Xxxxxxx harmless
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from and against any losses, damages, court costs or attorneys' fees sustained
by Xxxxxxx as a result of any activities of the Master Franchisee in violation
of territorial laws, including but not limited to, any such activities in the
franchise selling process. In order to assist Master Franchisee in effecting
compliance with territorial laws, Xxxxxxx shall provide Master Franchisee, on
request, such information relating to Xxxxxxx as is available and shall
otherwise assist Master Franchisee in all reasonable ways in effecting such
compliance, all at Master Franchisee's expense. Master Franchisee agrees to
submit to Xxxxxxx for approval, prior to filing with any territorial, provincial
or municipal governmental entity, true copies of all documents required by any
applicable laws to be filed or submitted by Master Franchisee in connection with
the business licensed under this Agreement.
Master Franchisee acknowledges that Xxxxxxx has supplied to Master
Franchisee all information concerning Xxxxxxx and the development and operation
of the business licensed hereunder that is required under United States law and
the laws of the Territory and as Master Franchisee deems necessary in order to
make a determination to enter into this Agreement.
12. INDEPENDENT CONTRACTOR. Master Franchisee is an independent
contractor acting exclusively on Master Franchisee's own behalf. Therefore,
Master Franchisee does not have any authority to act as the agent or
representative of Xxxxxxx, to create any obligation of any type on behalf of
Xxxxxxx, or to enter into any agreement on behalf of Xxxxxxx. Master Franchisee
shall conspicuously identify itself in all dealings with
- 19 -
customers, suppliers, public officials personnel and others as the independent
owner and operator of the business authorized under this Agreement, and shall
place notices of independent ownership and operation on signs, forms, business
cards, stationery, advertising and other materials as Xxxxxxx may require.
13. COMPLIANCE WITH STANDARDS AND SPECIFICATIONS. Master Franchisee
acknowledges the reputation for quality associated with services and products
sold in connection with the Xxxxxxx Marks in the United States. Master
Franchisee agrees that it and its subfranchisees shall strictly adhere to the
techniques, processes, standards specifications and instructions set forth in
Xxxxxxx'x Operations Manual. The Operations Manual may be revised from time to
time by Xxxxxxx. Master Franchisee agrees that Xxxxxxx shall have access to the
facilities of Master Franchisee to observe the procedures, techniques and
employees of Master Franchisee and its subfranchisees, to inspect the equipment
and supplies of Master Franchisee and its subfranchisees, and to accompany
Master Franchisee's and its subfranchisees' employees on job assignments.
14. EQUIPMENT AND SUPPLIES. All equipment and supplies (including, but
not limited to, chemicals) used by Master Franchisee and its subfranchisees
shall meet Xxxxxxx'x then-current standards and specifications. If Master
Franchisee elects to use equipment from a source other than Xxxxxxx or a source
previously approved by Xxxxxxx, Master Franchisee first shall submit such
equipment to Xxxxxxx or permit Xxxxxxx access to such equipment in such other
manner as Xxxxxxx may agree, in
- 20 -
order to allow Xxxxxxx to determine whether its then-current standards and
specifications are met. If Master Franchisee elects to use supplies
(including, but not limited to, chemicals) from a source other than Xxxxxxx
or a source previously approved by Xxxxxxx, Master Franchisee first shall
submit such supplies to Xxxxxxx or an independent testing laboratory
designated by Xxxxxxx, in order to allow Xxxxxxx to determine whether its
then-current standards and specifications are met. Master Franchisee agrees
that the submission and reasonable testing of such equipment and supplies
shall be at Master Franchisee's expense, and Xxxxxxx agrees not to
unreasonably withhold approval of a source whose equipment or supplies are
found to meet Xxxxxxx'x then-current standards and specifications.
Master Franchisee acknowledges and agrees that if it purchases equipment
or supplies from Xxxxxxx, Xxxxxxx may seek to earn a 20% profit on the sale
of such equipment or supplies. Master Franchisee further acknowledges and
agrees that if it purchases equipment or supplies from a source approved by
Xxxxxxx, Xxxxxxx may require Master Franchisee to pay Xxxxxxx a fee equal to
20% of the purchase price of such equipment or supplies. Xxxxxxx agrees that
Master Franchisee may purchase equipment or supplies from other XXXXXXX
businesses, if such equipment or supplies were originally supplied by Xxxxxxx
or a source approved by Xxxxxxx and also meet Xxxxxxx'x then-current
standards and specifications.
Master Franchisee agrees that if any inspection by Swisher discloses any
deviation from Xxxxxxx'x then-current standards and specifications,
- 21 -
Master Franchisee shall immediately take such measures as may be prescribed
by Xxxxxxx to correct such deviation or Xxxxxxx shall have the right to
terminate this Agreement.
On receipt of written notice from Xxxxxxx that Xxxxxxx'x standards and
specifications have been revised or modified, Master Franchisee shall
promptly proceed to comply with Xxxxxxx'x revised or modified standards and
specifications.
15. OPERATIONS MANUAL; INDUSTRIAL SECRETS. At initial training, Xxxxxxx
shall loan Master Franchisee a copy of Xxxxxxx'x Operations Manual. The Manual
is in English, and Master Franchisee shall bear any costs associated with
translating the manual into any other language. Master Franchisee acknowledges
that the Manual is subject to the protection of United States copyright laws and
of the copyright laws of the Territory; contains valuable confidential,
proprietary and trade secret business information of Xxxxxxx; and constitutes a
portion of the Industrial Secrets of Xxxxxxx. Master Franchisee agrees not to
make any reproductions of the Manual except for (i) employees of Master
Franchisee who have a need to know the information in the manual and who have
agreed in writing not to make any use or disclosure of such information except
as authorized herein, and (ii) subfranchisees of Master Franchisee under
subfranchise agreements containing non-disclosure provisions similar to this
Section 15. The Manual shall at all times remain the exclusive property of
Xxxxxxx and shall be delivered to Xxxxxxx on termination of this Agreement,
together with all copies thereof and notes
- 22 -
therefrom in the possession of Master Franchisee and its subfranchisees.
Neither Master Franchisee nor any officer, director or shareholder of
Master Franchisee, during the term of this Agreement or thereafter, shall: (i)
communicate, divulge or use for the benefit of any other person, persons,
partnership, association or corporation, any Industrial Secrets which may be
communicated to Master Franchisee or any such persons, or of which they may be
apprised, in connection with the development or operation of the business
licensed hereunder or under any subfranchisee agreement, without the prior
written approval of Xxxxxxx; (ii) disclose to any third party any information
Master Franchisee or any such persons receive in confidence from Xxxxxxx,
without the prior written approval of Xxxxxxx; or (iii) disclose to employees of
Master Franchisee any information Master Franchisee or any such persons receive
in confidence from Xxxxxxx, except to employees who have a need to know the
same, who have agreed not to make any use or disclosure of the same except as
authorized herein and who have acknowledged no prior experience in the restroom
hygiene business as embodied in the System; provided, however, that, after the
term of this Agreement, Master Franchisee may use any information that has
become generally known or easily accessible to the public other than because of
the breach by Master Franchisee or any officer, director or shareholder of
Master Franchisee of any term of this Agreement.
Master Franchisee acknowledges that any failure to comply with the
requirements of this Section 15 shall constitute a material breach of this
- 23 -
Agreement, and further, that a violation of the term of this Section 15 would
result in irreparable injury to Xxxxxxx for which no adequate remedy at law may
be available. Accordingly, Master Franchisee and its officers, directors and
shareholders consent to the issuance of an injunction or similar form of remedy
prohibiting any conduct in violation of the terms of this Section 15, and agree
to pay all expenses (including court costs and reasonable attorneys' fees)
incurred by Xxxxxxx in enforcing the terms of this Section 15.
16. SERVICE AND ASSISTANCE. Xxxxxxx shall furnish the following services
and assistance to Master Franchisee in connection with the business to be
conducted under this Agreement:
A. PRE-OPENING SERVICES.
(1) Initial training for 2 representatives of Master Franchisee at the
Xxxxxxx training center in Charlotte, North Carolina for up to 3 weeks. Xxxxxxx
shall provide the training at its expense, but Master Franchisee shall be
responsible for its and its representatives' wages, benefit, transportation,
lodging, meal and other expenses. Further, Master Franchisee shall be
responsible for and shall indemnify Xxxxxxx against the acts of and any injuries
to Master Franchisee or its representatives while receiving training. Training
shall be conducted in connection with:
(a) Marketing
(b) Selling Subfranchises
(c) Operations
(d) Field Sales
- 24 -
(e) Field Service
(f) General Management
(g) Business Planning
After the completion of initial training in the United States, a
representative or representatives of Xxxxxxx shall make at least 1 trip to the
Territory, at a mutually agreeable time, for up to 1 week of additional training
and support, to assist Master Franchisee in establishing the business licensed
hereunder. Xxxxxxx shall bear all costs associated with such trip.
(2) Proprietary software package and approved forms (in English).
(3) Samples of forms and marketing materials (in English).
B. CONTINUING SERVICES.
(1) Telephone consultation on a day-to-day basis.
(2) Consultation with Master Franchisee in establishing a marketing
program.
(3) Periodic suggestions on new marketing programs.
(4) Budgetary and financial analysis on request.
(5) Ongoing research and development pertaining to chemicals, equipment
and techniques.
(6) Annual international conference in the United States. Each
conference will last about 2 days and will be designed to deal with common
issues encountered by Master Franchisees in the development of XXXXXXX
businesses. Each conference will be conducted exclusively in English.
Xxxxxxx will provide Master Franchisee with reasonable advance
- 25 -
notice of the time and place of each conference. Xxxxxxx reserves the right
to require Master Franchisee or a representative to attend any conference.
In connection with attending a conference, Master Franchisee will bear the
cost of its and its representatives' wages, benefit, transportation, lodging,
meal and other expenses.
(7) Periodic news bulletins.
(8) In-country assistance at a fee of $500 U.S. per day per Swisher
representative (including travel time), plus all related food, travel lodging
and other expenses incidental to such assistance, for a minimum of 4 days
(assuming 2 days of travel and 2 days of in-country assistance). The fee
must be prepaid by wire transfer. Expenses not prepaid will be invoiced by
facsimile for remittance within 15 days of receipt of the invoice.
17. ADVERTISING. Master Franchisee shall advertise Licensor
Services/Products throughout the Territory. Master Franchisee shall
contribute and require its subfranchisees to contribute, on a monthly basis,
at least 2% of Gross Sales to a fund managed by Master Franchisee and used
solely to finance such advertising.
In addition, Master Franchisee and its subfranchisees shall maintain at
all times during the terms of this Agreement, at Master Franchisee's and its
subfranchisees' expense, display advertisements in Master Franchisee's and
its subfranchisees' primary local telephone directories covering all areas
serviced by Master Franchisee and its subfranchisees. Such advertisements
shall use and display the xxxx XXXXXXX, and shall be in the form and size and
contain such wording as is approved in advance by
- 26 -
Xxxxxxx. Annually during the term of this Agreement, Master Franchisee shall
furnish Xxxxxxx with proof of Master Franchisee's and its subfranchisees'
subscriptions to or renewal of such advertisements no later than 60 days before
the local telephone companies' deadlines for receiving subscriptions to or
renewals for the applicable telephone directories.
All advertisements placed by Master Franchisee and its subfranchisees, in
any medium, shall be dignified, shall conform to standards prescribed from time
to time by Xxxxxxx and shall display the Xxxxxxx Xxxx in a manner approved by
Xxxxxxx.
18. NONCOMPETITION. During the term of this agreement and any extension
hereof, and for a period of 1 year after termination, expiration or transfer of
any interest in this Agreement, neither Master Franchisee, nor its subsidiaries
or affiliates, nor its shareholders (or owners of any other interest in Master
Franchisee), nor its officers or directors, shall in any capacity, either
directly or indirectly, except under the terms of this Agreement, engage in
any competing business in the Territory, meaning any business which is the
same or substantially similar to any part of the business that is the subject
of this Agreement, engage in any competing business in the Territory, meaning
any business which is the same or substantially similar to any part of the
business that is the subject of this Agreement or have any direct or indirect
ownership interest in any such business if such interest confers on the owner
the power to influence the economic conduct of such business. Master
Franchisee shall require all officers, directors and shareholders of Master
Franchise to enter into
- 27 -
similar restrictive covenants for the benefit of Xxxxxxx, and shall take all
appropriate legal action necessary to enforce such covenants.
Failure to comply with the requirements of this Section 18 shall
constitute a material breach of this Agreement. Master Franchisee
acknowledges that a violation of the terms of this Section 18 would result in
irreparable injury to Xxxxxxx for which no adequate remedy at law may be
available. Master Franchisee and its officers, directors and shareholders
accordingly consent to the issuance of an injunction or similar form of
remedy prohibiting any conduct by Master Franchisee in violation of the terms
of this Section 18.
19. TAXES AND DUTIES. All value added, sales, use and similar taxes
levied or require to be paid under any city, local, county, territorial,
state, federal or other governmental law or regulations by virtue of this
Agreement, shall be promptly paid by Master Franchisee. Master Franchisee
also shall be responsible for, and shall pay, all duties imposed with respect
to the importation of all materials, equipment and supplies relating to its
business, including materials, equipment and supplies furnished by Xxxxxxx.
If Xxxxxxx is required to pay any such taxes or duties, Master Franchisee
shall reimburse Xxxxxxx therefore on demand.
20. INDEMNIFICATION; INSURANCE. Master Franchisee shall indemnify and
hold harmless Xxxxxxx, its subsidiaries and affiliates, and their respective
officers, directors, shareholders employees and agents, against any and all
taxes, suits, causes of action, liabilities, damages, claims and demands of
any type whatsoever, arising out of the operation of the
- 28 -
business conducted by Master Franchisee or any of its subfranchisees, and
against all costs, legal expenses and other expenses arising from or in
connection with any suit proceeding or claim incident to any of the
foregoing. Master Franchisee shall maintain, at Master Franchisee's expense,
comprehensive liability insurance. Such insurance shall be with reliable
companies, shall be of types and amounts satisfactory to Xxxxxxx, and shall
name and insure both Master Franchisee and Xxxxxxx. Master Franchisee shall
cause Xxxxxxx to be furnished, on an annual basis, with certificates of
insurance issued by said insurance companies, together with evidence showing
that the premiums therefore have been paid. Such insurance shall not be
changed or canceled without 60 days written notice to Xxxxxxx.
21. IMPROVEMENTS AND MODIFICATIONS. Master Franchisee agrees that if
it shall develop any new concept, process or improvement in the operation or
promotion of the Xxxxxxx Technology or the business licensed hereunder, it
shall promptly notify Xxxxxxx and provide Xxxxxxx with all necessary
information with respect thereto without compensation therefore. Master
Franchisee acknowledges that concepts, processes or improvements which relate
to the Xxxxxxx Technology and the business licensed hereunder developed by
Master Franchisee shall become the exclusive property of Xxxxxxx, and that
Xxxxxxx may itself utilize or disclose such concepts, processes or
improvements to other Xxxxxxx franchisees.
Master Franchisee acknowledges and agrees that Xxxxxxx may from
- 29 -
time to time change the components of the System, including, without limitation,
Xxxxxxx Technology, Licensor Services/Products, and the equipment and supplies
used in the performance of Licensor Services/Products, in order to enhance the
System and the goodwill associated therewith. Such changes may be made from
time to time by changes in the contents of the Operations Manual, and Master
Franchisee shall abide by, and shall require its subfranchisees to abide by,
any such changes.
22. TRANSFER BY XXXXXXX. Xxxxxxx may assign, encumber or otherwise
transfer all or any part of its rights, interests or obligations under this
Agreement to any person or entity.
23. TRANSFER BY MASTER FRANCHISEE. Master Franchisee and the owners of
any interest in Master Franchisee shall not assign, encumber or otherwise
transfer this Agreement or any ownership interest in Master Franchisee, in
whole or in part, without the prior written consent of Xxxxxxx. Xxxxxxx
shall not unreasonably withhold consent to transfer.
In determining whether it shall grant its consent to any proposed
transfer, Xxxxxxx shall be entitled to consider, without limitation, the
following: (i) the proposed transferee's moral character, business reputation
and ability to conduct the business licensed herein; and (ii) the adequacy of
the proposed transferee's financial resources and capital to successfully
operate the business licensed herein.
Xxxxxxx may condition its consent to any proposed transfer on: (i)
- 30 -
payment of all amounts owed by Master Franchisee or its shareholders or owners
to Xxxxxxx, its affiliates or any other party to whom Xxxxxxx or its affiliates
has any contingent liability; (ii) payment to Xxxxxxx of a U.S. $10,000 transfer
fee; (iii) reimbursement to Xxxxxxx of all attorneys' fees, accountants' fees
and other expenses incurred by Xxxxxxx in connection with the transfer on
demand; (iv) submission to Xxxxxxx of copies of all written agreements relating
to a proposed transfer, all financial statements of the proposed transferee in a
form acceptable to Xxxxxxx and a Franchise Application Form completed by the
proposed transferee; (v) submission to Xxxxxxx of any additional information
Xxxxxxx may request in order to determine if it should grant its consent to a
proposed transfer; (vi) execution by Master Franchisee of a general release, in
form satisfactory to Xxxxxxx, of any and all claims against Xxxxxxx and its
affiliates, officers, directors, employees and agents; (vii) submission to
Xxxxxxx of a written acknowledgment that the proposed transferee must complete
the same initial training Xxxxxxx requires of new franchisees as of the date of
the proposed transfer, that Xxxxxxx'x consent to transfer will be conditioned on
successful completion of initial training by the proposed transferee, and that
the proposed transferee's failure to complete initial training promptly shall
constitute a revocation of Xxxxxxx'x consent; and (viii) execution by the
proposed transferee of Xxxxxxx'x then-current form of Master License Agreement
(with modifications appropriate for the Territory).
In the event of the death or permanent disability of a shareholder or other
owner of Master Franchisee, said shareholder/owner's stock (or
- 31 -
other ownership interest) may be transferred to said shareholder/owner's
heirs or representatives by will or by operation of law, if such
shareholder/owner's heirs or representatives agree in writing to be bound
by all of the terms of this Agreement.
Except as expressly provided herein, the assignment, encumbrance
or other transfer, either voluntarily or by operation of law, of any part of the
capital stock of (or other ownership interest in) Master Franchisee, without the
prior written consent of Xxxxxxx, shall constitute a material breach of this
Agreement.
24. XXXXXXX'X RIGHT OF FIRST REFUSAL. If Master Franchisee or any
shareholder of (or other owner of an interest in) Master Franchisee receives
a bona fide arms length offer from any third party to purchase an interest in
Master Franchisee or Master Franchisee's interest in this Agreement or in the
business conducted hereunder, or if Master Franchisee proposes to convert,
assign or otherwise transfer Master Franchisee's interest in this Agreement
or in the business conducted hereunder, in whole or in part, to any third
party, the shareholder/owner or Master Franchisee, as the case may be, shall
first offer to sell said interest to Xxxxxxx. The seller shall make
available to Xxxxxxx in a written statement verified by the seller the terms
of the offer received or made by the seller, and Xxxxxxx shall have 30 days
from the receipt of said statement to either accept or refuse such offer.
Written notice of Xxxxxxx'x decision to accept or refuse said offer shall be
delivered to the seller. Acceptance by Xxxxxxx shall be on the same price
and terms set forth in
- 32 -
the written statement submitted by the seller. If Xxxxxxx fails to accept
the offer within the 30-day period, the seller shall be free to effect the
disposition described in the statement on the exact terms set forth in the
statement delivered to Xxxxxxx, subject to the terms of Section 23.
25. TERMINATION BY XXXXXXX. This Agreement may be terminated as follows:
A. Master Franchisee shall be deemed to be in default under this
Agreement and Xxxxxxx may, at its option, terminate this Agreement and all
rights granted hereunder, effective immediately on giving notice of termination
to Master Franchisee, but without giving any notice of default or opportunity to
cure the default, on the occurrence of any of the following events:
(1) if Master Franchisee or any owner of an interest in Master Franchisee
is convicted of any criminal offense or engages in any conduct or practice that
is reasonably likely, in the sole opinion of Xxxxxxx, to adversely affect the
System, the Xxxxxxx Marks, the goodwill associated therewith or Xxxxxxx'x
interest therein;
(2) if Master Franchisee or any owner of an interest in Master Franchisee
breaches any term of Section 15, 18, 23 or 24;
(3) if Master Franchisee knowingly provides or submits any false records
or reports to Xxxxxxx or willfully or fraudulently misrepresents any fact or
condition required to be disclosed hereunder;
(4) if Master Franchisee makes, or purports to make, a bulk sale of its
assets;
- 33 -
(5) if Master Franchisee or any owner of an interest in Master Franchisee
is adjudged bankrupt, becomes insolvent or makes a general assignment for the
benefit of creditors, or if a receiver, guardian, conservator, trustee in
bankruptcy or similar officer is appointed by a court of competent jurisdiction
to take charge of all or any part of Master Franchisee's or any such owner's
property, or if any proceeding for a composition or similar arrangement with
creditors under any law is instituted by or against Master Franchisee or any
owner of an interest in Master Franchisee, or if a final judgment remains
unsatisfied or of record for 30 days or longer against Master Franchisee or any
owner of an interest in Master Franchisee, or if execution is levied against any
of the assets of the Master Franchisee or any owner of an interest in Master
Franchisee;
(6) if Master Franchisee passes any corporate resolution to enable it to
take proceedings for its dissolution, liquidation or amalgamation, to wind down
Master Franchise;
(7) if a Company-owned subfranchisee defaults under its subfranchise
agreement and does not cure within the time limit therefore, or if any
subfranchise agreement with a Company-owned subfranchisee is terminated prior to
the expiration thereof;
(8) if Master Franchisee disputes or contests, directly or indirectly, the
ownership, validity or enforceability of the Xxxxxxx Technology or the Xxxxxxx
Marks; or
(9) if Master Franchisee promotes Licensor Services/Products
- 34 -
outside the Territory, or uses the Xxxxxxx Technology or the Xxxxxxx Marks
outside the Territory.
B. Subject to the proviso in the last sentence in Section 8B, Master
Franchisee shall have 180 days after receipt of written notice of default
from Xxxxxxx in which to cure any failure by Master Franchisee to meet the
Development Schedule set forth in Section 8. If such failure to meet the
Development Schedule is not cured within the said 180-day period, Xxxxxxx may
terminate this Agreement by giving written notice of such termination to
Master Franchisee.
C. Except for any events of default referred to in Sections 25A and 00X,
Xxxxxx Xxxxxxxxxx shall have 30 days after receipt of written notice of default
from Xxxxxxx within which to cure any default in the performance of Master
Franchisee's obligations and covenants hereunder. If any such default is not
cured within said 30-day period, Xxxxxxx may terminate this Agreement by giving
written notice of such termination to Master Franchisee.
D. The termination of this Agreement shall be without prejudice to any
remedy or cause of action which Xxxxxxx may have against Master Franchisee for
the recovery of any amounts due Xxxxxxx or any equipment or property of Xxxxxxx,
or to any other right of Xxxxxxx to recover damages for any breach hereof.
26. TERMINATION BY MASTER FRANCHISEE. This Agreement may be terminated
by Master Franchisee only if Xxxxxxx fails to perform any of its obligations
under this Agreement, and only if such failure is not
- 35 -
corrected within 60 days after receipt by Xxxxxxx of written notice thereof.
27. EFFECT OF TERMINATION.
A. On termination of this Agreement, whether by reason of lapse of
time, default in performance or other reasons, Master Franchisee and its
Company-owned subfranchisees:
(1) shall immediately discontinue the use of the Xxxxxxx Marks, any
marks confusingly similar thereto, and any and all signs and printed
materials bearing said marks or any references thereto;
(2) shall immediately discontinue use of the Xxxxxxx Technology, and
shall not operate or do business under any name or in any manner that might
tend to give the general public the impression that this Agreement is still
in force or that Master Franchisee is still connected in any way with
Xxxxxxx, and if applicable, shall immediately amend the name under which it
performed Licensor Services/Products under this Agreement, and delete from
that name any references to the Xxxxxxx Marks or any marks confusingly
similar thereto, and shall immediately thereafter furnish Xxxxxxx evidence of
the same;
(3) shall not avail itself of any of the confidential, proprietary or
trade secret information imparted by Swisher, nor disclose or reveal any such
information, or any portion thereof, to others;
(4) shall immediately discontinue use of and deliver to Xxxxxxx all
customer lists, customer service contracts and records, and all copies
thereof, all of which Master Franchisee acknowledges to be Xxxxxxx'x property;
- 36 -
(5) shall promptly return to Xxxxxxx the Xxxxxxx Operations Manual
furnished herewith, and all copies thereof, together with any other materials
containing confidential, proprietary or trade secret information.
(6) shall not (and it officers, directors and shareholders shall not)
compete with Xxxxxxx'x business interests for 1 year as provided in Section 18;
and
(7) shall, on request by Xxxxxxx, take such action as may be necessary to
cancel any assumed name or equivalent registration which contains the xxxx
XXXXXXX or any other Xxxxxxx Xxxx.
B. On termination of this Agreement for whatever reason, all subfranchise
agreements in existence as of the date of termination also shall terminate and
Xxxxxxx shall have no further obligation to Master Franchisee or its
subfranchisees; provided, however, that Xxxxxxx, its successor or assign, may at
its option and on notice of Master Franchisee, assume all of Master Franchisee's
rights and obligations to all or any of its subfranchisees without payment of
any fee to Master Franchisee, under the assignments executed by Master
Franchisee in accordance with Section 10.
28. NOTICES. All notices required or permitted to be given hereunder
shall be in writing, shall be mailed by certified or registered mail, return
receipt requested, with postage thereon prepaid, or sent by expedited and
receipted delivery, and shall be addressed to Xxxxxxx or Master Franchisee at
the following address:
- 37 -
Xxxxxxx: F.M.S., INC.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
000-000-0000
Facsimile 000-000-0000
With copy to:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Facsimile:
----------------------------------
Master Franchisee:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Facsimile:
----------------------------------
If a party changes its address, it shall give written notice to the
other party. Any notice given hereunder by certified or registered mail
shall be deemed to have been given 15 days after the date of mailing, and any
notice given hereunder by expedited delivery service shall be deemed to have
been given 3 days after the date of sending, provided that any written
notice, however given, shall be deemed to have been given no later than the
date of its actual receipt. Except as expressly provided herein or designated
by Xxxxxxx, all payments required under this Agreement shall be made at
Xxxxxxx'x office at the above address, and all deliveries of equipment and
supplies form Xxxxxxx to Master Franchisee shall be made F.O.B. Charlotte,
North Carolina.
29. SURVIVAL. Any debts, obligations or liabilities accrued
- 38 -
hereunder between the parties hereto, including but not limited to, Master
Franchisee's (and its officers', directors' and shareholders') obligations of
indemnification, of nonuse and non-disclosure of confidential, proprietary or
trade secret information under Section 15, and of non-competition under Section
18, shall survive the expiration, termination or transfer of this Agreement,
regardless of reason.
30. SEVERABILITY. If any term this Agreement is invalid, illegal or
incapable of being enforced by reason of any law or public policy, all other
terms of this Agreement shall nevertheless remain in full force and effect,
and no term shall be dependent on any other term unless so expressed herein.
31. WAIVER. Xxxxxxx'x failure to enforce or delay in enforcing any of
its rights under this Agreement, including but not limited to, the right of
termination because of breach by Master Franchisee of any term of this
Agreement, shall not be a waiver of Xxxxxxx'x rights, including but not
limited to, the right of termination for the enforcement of any subsequent
breach or breaches by Master Franchisee of any term of this Agreement.
32. COST OF ENFORCEMENT. If it becomes necessary for Xxxxxxx to employ
attorneys, bring an arbitration proceeding or institute any action at law or
in equity against Master Franchisee to secure or protect Xxxxxxx'x rights
under this Agreement, or to enforce any of Master Franchisee's covenants and
obligations contained herein, Xxxxxxx shall be entitled to recover from
Master Franchisee all reasonable attorneys' fees expended, together with
court costs and all damages allowed by law.
- 39 -
If Master Franchisee fails to perform any duty or obligation in
accordance with this Agreement, Xxxxxxx, at its option (but without any
obligation to do so), may perform or attempt to perform such obligation or
duty on behalf of Master Franchisee. In such event, Master Franchisee shall
promptly pay to Xxxxxxx on demand any amount expended by Xxxxxxx in such
performance or attempted performance.
33. ENTIRE AGREEMENT. This Agreement (which includes the Exhibits
attached hereto) contains the entire agreement of Xxxxxxx and Master
Franchisee. Any representations, inducements, promises or agreements, oral
or otherwise, of Xxxxxxx or Master Franchisee that are not set forth herein,
or in a written amendment hereof executed by Xxxxxxx and Master Franchisee,
shall not be of any force or effect, and shall not be binding on either
Xxxxxxx or Master Franchisee. Master Franchisee acknowledges that it has had
an opportunity to ask questions of Xxxxxxx and has received satisfactory
answers concerning the business licensed hereunder and the operations of
Xxxxxxx.
34. ARBITRATION AND RELATED PROVISIONS.
A. Any dispute, claim or controversy arising out of or relating to this
Agreement or other offer or execution of this Agreement, if not resolved by
negotiation or mutually agreed mediation, shall be resolved solely and
exclusively under the then-current International Arbitration Rules of the
American Arbitration Association ("AAA"), in Charlotte, North Carolina unless
agreed otherwise by the parties in writing, by 1 AAA arbitrator appointed in
accordance with such rules. The prevailing party
- 40 -
in any arbitration proceeding shall be entitled to recover its expenses,
including reasonable attorneys' fees and accounting fees, in addition to any
other relief to which it is found to be entitled. Any award shall provide
for interest from the date of the award until the award is paid in full, at a
rate to be fixed by the arbitrator. The award of the arbitrator shall be the
sole and exclusive remedy between the parties regarding any claims,
counterclaims, issues or accountings presented or pled to the arbitrator, and
shall be enforceable free of any tax, deduction or offset. Any costs, fees
or taxes incident to enforcing the award of the arbitrator, to the maximum
extent permitted by law, shall be charged against the party resisting such
enforcement. Xxxxxxx and Master Franchisee each consents to entry of judgment
on the award of the arbitrator in any court having jurisdiction (including
any court in the Territory having jurisdiction), or the grant of any
application made to such court for a judicial acceptance of the award or an
order of enforcement.
X. Xxxxxxx and Master Franchisee each waives, to the fullest extent
permitted by law, any right or claim for any punitive or exemplary damages
against the other, and each agree, in the event of a dispute with the other,
to be limited to the recovery of actual damages sustained.
C. Nothing in this Section 34 shall prevent Xxxxxxx from obtaining
temporary, preliminary or permanent injunctive relief from a court or agency
of competent jurisdiction against conduct causing actual or threatened
irreparable injury to Xxxxxxx. Master Franchisee acknowledges that any
breach by Master Franchisee of any term of Section 15
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(Operations Manual; Industrial Secrets) or Section 18 (NONCOMPETITION) would
cause irreparable injury to Xxxxxxx for which no adequate remedy at law may
be available. Accordingly, Master Franchisee consents to the issuance of
injunctive relief prohibiting any conduct by Master Franchisee in violation
of any term of those Sections.
D. Unless Xxxxxxx seeks relief from a court or agency in the Territory
that operates using another language, any arbitration or other proceeding
relating to this Agreement shall be conducted in English.
35. FORCE MAJEURE. If Xxxxxxx or Master Franchisee shall be delayed in,
hindered in or prevented from, the performance of any act required hereunder
by reason of fire, casualty, strikes, lockouts, labor trouble, inability to
procure materials or supplies, failure of power, governmental authority,
riots, insurrections, war or other reason of like nature, where such delay,
hindrance or prevention of performance shall not be within reasonable control
of the part obligated to perform and not be avoidable by diligence, the party
so delayed shall promptly give notice to the other party, and performance of
such act shall be excused for such period of delay.
36. TRANSLATION. To the extent deemed necessary by Master Franchisee or
Xxxxxxx, as applicable, Master Franchisee or Xxxxxxx may appoint a translator
to translate (at Master Franchisee's expense) this Agreement and related
materials correspondence or notices into a language other than English. All
correspondence and all notices required or permitted hereunder from one party
to the other shall be in English,
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without any translation required. The English version of this Agreement and
related materials, correspondence or notices shall control over any other
versions.
37. GUARANTIES. All shareholders of Master Franchisee, and all holders
of any other ownership interest in Master Franchisee, shall execute the
Guaranty attached hereto as Exhibit B, thereby guaranteeing to Xxxxxxx the
obligations of Master Franchisee and themselves under this Agreement. Failure
to provide such Guaranty shall constitute a material default under this
Agreement.
38. CORPORATE OR OTHER FORM OF MASTER FRANCHISEE. If Master Franchisee
is conducting business in a corporate, partnership or similar form, Master
Franchisee shall furnish such evidence of its existence and good standing
under the laws of the Territory as Xxxxxxx may request. Additionally, Master
Franchisee shall cause all certificates or instruments representing ownership
interest in the Master Franchisee to bear a legend on their face to the
effect that transfers of the interests represented by such certificates or
instruments are subject to the consent of Xxxxxxx under this Agreement.
39. GOVERNMENTAL APPROVALS. Master Franchisee shall obtain all
required approvals, consents, permits and licenses necessary from government
agencies in the Territory to enter into, make enforceable the terms of, or
perform under, this Agreement. In this connection, Xxxxxxx will assist Master
Franchisee in responding to inquiries from such government agencies, but
Master Franchisee will be responsible for the
- 43 -
cost of any translation of this Agreement or any other document required by
such government agencies (which translation, however, will be subject to
Xxxxxxx'x approval before its use). If, at any time before approval of this
Agreement or during the term of this Agreement, any government agency in the
Territory requires, directly or indirectly, alteration or modification of any
term of this agreement, or of the performance of the parties under this
Agreement, the parties shall use their best efforts to comply with such
requirement. If, however, either of the parties considers the requirement to
be material and adverse to it, then that party may terminate this Agreement
by giving written notice to that effect to the other party. If required, at
Master Franchisee's cost, Master Franchisee will submit advertising or
promotional materials (whether prepared by or under the directions of Xxxxxxx
or Master Franchisee) to any appropriate government agency for review and
approval. If the government agency requires Master Franchisee to
revise any advertising or promotional materials as a condition of approval,
Master Franchisee will submit the revised advertising or promotional
materials to Xxxxxxx for approval before their use.
40. GOVERNING LAW. This agreement shall be governed by the laws of North
Carolina, without giving effect to the choice of law principles thereof;
provided that if any term of this Agreement is not enforceable under the laws of
North Carolina, that term shall be governed by the laws of the Territory.
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41. ACKNOWLEDGMENTS.
A. Master Franchisee acknowledges that it has no prior experience in
the restroom hygiene business as embodied in the System, and that, pursuant
to this Agreement, it will receive valuable specialized training and
information concerning operational sales, promotional and marketing methods
and techniques of Xxxxxxx as embodied in the System.
B. Master Franchisee acknowledges that the System and the Xxxxxxx Marks
will continue to evolve in order to reflect changing market conditions, and to
meet new and changing consumer and technology demands; and that variations and
additions to the System may be required in order to preserve and enhance the
public image of the Xxxxxxx Marks and to ensure the continuing operational
efficiency of XXXXXXX businesses generally.
C. Master Franchisee acknowledges that Xxxxxxx made no representations
or promises to Master Franchisee, or reached any arrangements, understandings
or agreements with Master Franchisee, except as set forth in this Agreement
and, in particular, that Xxxxxxx has made no promises to Master Franchisee
regarding now or in the future granting Master Franchisee rights to operate
XXXXXXX businesses outside of the Territory.
D. Master Franchisee acknowledges that its investment is a speculative
investment, that the most important factors in the success of any XXXXXXX
business is the operator's personal business, marketing, sales, management and
other skills, and that any investment by Master
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Franchisee may be a risk and may not be recovered. Master Franchisee
represents and warrants that it has, before signing this Agreement, conducted an
independent investigation of this venture and that in making the decision to
enter into this Agreement and any related agreements, Master Franchisee is
relying on its personal knowledge of the market in the Territory and its own
business abilities and efforts, which will be essential to its possible success.
E. Master Franchisee acknowledges and represents that it has, before
executing this Agreement, obtained the advice of independent legal counsel
experienced in licensing or franchising matters.
F. Master Franchisee acknowledges that it has not received or relied on
any warranty or representations, express or implied, as to the potential
volume, profits or success of the business contemplated by this Agreement.
THIS AGREEMENT is executed as of the ____day of 199___.
F.M.S., INC.
By:
------------------------------------
Title:
---------------------------------
---------------------------------------
---------------------------------------
MASTER FRANCHISEE
By:
------------------------------------
Title:
---------------------------------
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EXHIBIT A
XXXXXXX MARKS
XXXXXXX
XXXXXXX & "S" Design (See U.S. Reg. No. 1,744,818)
XXXXXXX HYGIENE
EXHIBIT B
GUARANTY
As an inducement to F.M.S.,INC. ("Xxxxxxx") to execute that certain
Master License Agreement dated _________________, 199_, with ("Master
Franchisee") ___________________________________ the undersigned, jointly and
severally, hereby agree to be individually bound by all the terms of the
above Master License Agreement, including any amendments or modifications
thereto whenever made (hereinafter the "Agreement"), and unconditionally and
irrevocably guarantee to Xxxxxxx and its successors and assigns that all of
the obligations of Master Franchisee under the Agreement will be punctually
paid and performed. Without limiting the generality of the foregoing, the
undersigned jointly and severally agree to be individually bound by the terms
of Sections 15, 18, 23 and 24 of the Agreement.
On default by Master Franchisee or notice from Xxxxxxx, the undersigned
will immediately make each payment and perform each obligation required of
Master Franchisee under the Agreement. Without affecting the obligations of
the undersigned under this Guaranty, Xxxxxxx may, without notice to the
undersigned, extend, modify, amend or release any indebtedness or obligation
of Master Franchisee, or may settle, adjust or compromise any claims against
Master Franchisee.
The undersigned waive all demands and notice of every kind with respect
to this Guaranty and the Agreement, including, without limitation, notice of:
the amendment or modification of this Guaranty or the Agreement; the demand
for payment or performance by Master Franchisee; any default by Master
Franchisee or any guarantor; any release of and any guarantor or other
security for this Agreement or the obligations of Master Franchisee.
Xxxxxxx may pursue its rights against the undersigned without first
exhausting its remedies against Master Franchisee and without joining any
other guarantor hereto. No delay on the part of Swisher in the exercise of
Guaranty - 1 -
any right or remedy shall operate as a waiver of such right or remedy, and no
single or partial exercise by Xxxxxxx of any right or remedy shall preclude
the further exercise of such right or remedy.
On the death of an individual guarantor, the estate of such guarantor
will be bound by this Guaranty, but only for defaults and obligations
hereunder existing at the time of death, and the obligations of the other
guarantors hereunder will continue in full force and effect.
IN WITNESS WHEREOF, the undersigned have signed this ____ day of
____________, 199__.
--------------------------------------
GUARANTOR
Name:
---------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
GUARANTOR
Name:
---------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
GUARANTOR
Name:
---------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
Guaranty - 2 -
