HOME FURNISHINGS RETAIL OUTLET AGREEMENT
XXXXXXX HOME FURNISHINGS RETAIL OUTLET AGREEMENT
XXXXXXX FURNITURE COMPANY, INCORPORATED
THIS AGREEMENT, made as of the 23rd day of August,
2000, by and between Xxxxxxx Furniture Company,
Incorporated, a Delaware Corporation with its principal
offices at 240 Pleasant Hill Road, P. O. Xxx 000, Xxxxxx,
Xxxxx Xxxxxxxx 00000 "Xxxxxxx" and Arizona Furniture
Company, a Nevada corporation whose principal business is
00000 X. Xxxxxxx Xxx., Xxxxx X-000, Xxxxxxxxx, XX 00000
("Retailer").
WITNESSETH:
WHEREAS, Xxxxxxx is engaged in the business of
manufacturing various lines of home furniture which it sells
at wholesale to independent furniture Retailers for retail
sale to the general public; and
WHEREAS, in connection with its business, Xxxxxxx has
developed and used certain trademarks, service marks and
tradenames identifying it and its products; and
WHEREAS, as a result of the consistently high quality
and fashionable styling of its products, Xxxxxxx enjoys a
high public reputation and positive image, with various
trademarks, service marks and tradenames it uses being
widely recognized by the general public as denoting
furniture of the highest quality and value; and
WHEREAS, in recent years, the purchasing patterns of
the general public for home furnishings has changed from
that of purchasing each furniture and accessory item
separately to that of purchasing entire furniture groupings
and accessories so as to create a room environment with a
single purchase; and
WHEREAS, to meet this change in consumer purchasing
habits, Xxxxxxx has expended considerable time, money and
effort to develop a program, known as the Xxxxxxx Home
Furnishings Retail Outlet, for the sale of its products and
coordinated accessories and furniture groupings, which
program contemplates, among other things, the sale of
Xxxxxxx Products and Xxxxxxx approved accessories from
outlets devoted exclusively to the sale of such products and
with such outlets being structured and designed so as to
present such products in particular room environments; and
WHEREAS, Xxxxxxx has entered into agreements with
various manufacturers of lamps, pictures and other
accessories authorizing them to utilize certain of Xxxxxxx'x
trademarks, service marks and tradenames on such of their
products as Xxxxxxx may from time to time determine to meet
its quality and design standards and to sell such products
to those persons who operate Xxxxxxx Home Furnishings Retail
Outlets; and
WHEREAS, Retailer desires to acquire the right to
establish and operate a retail furniture outlet meeting the
requirements of the Xxxxxxx Home Furnishings Retail Outlet
Program at the site designated on Exhibit A attached hereto;
and
WHEREAS, Retailer acknowledges that it is essential to
the success of the Xxxxxxx Home Furnishings Retail Outlet
Program and the maintenance of the high standards and
reputation which the public has come to associate with
Xxxxxxx that all Xxxxxxx Home Furnishings Retail Outlets
adhere to certain standards with respect to the type,
display and presentation of the merchandize offered for sale
and the maintenance and operation of their facilities;
NOW, THEREFORE, in consideration of the premises and
mutual covenants hereinafter contained, Xxxxxxx and Retailer
hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context in which the term is used otherwise
clearly requires, the following terms when used herein with
an initial capital letter shall have the following meanings,
respectively:
(a) "Xxxxxxx" shall mean Xxxxxxx Furniture Company
Incorporated and all its divisions, subsidiaries, and
related companies that manufacture home furniture products.
(b) "Approved Accessories" shall mean those lamps,
pictures, and other non-furniture items and interior
decorations from time to time approved by Xxxxxxx for sale
in Xxxxxxx Home Furnishings Retail Outlets which are
manufactured by third parties.
(c) "Equipment" shall mean all fixtures, display
racks, permanent signs and other items of tangible personal
property which are or become necessary to equip Retailer's
outlet for business in accordance with the Xxxxxxx Home
Furnishings Retail Outlet Program as from time to time
established by Xxxxxxx.
(d) "Xxxxxxx Products" shall means those items of
furniture from time to time manufactured by Xxxxxxx and
designated by it as being approved for sale in a Xxxxxxx
Home Furnishings Retail Outlet.
(e) "Services" shall mean retail store, interior
decoration, and design services, including interactive video
catalogue services from time to time developed or approved
by Xxxxxxx for use in conjunction with the sale of Xxxxxxx
Products and Approved Accessories.
(f) "Products" shall mean Xxxxxxx Products and
Approved Accessories.
(g) "Trademarks" shall mean the Xxxxxxx trademarks and
service marks identified below for which registration with
the U.S. Patent and Trademark Office has been obtained or
has been sought, as well as other names, marks, insignias,
symbols, signs and other identifications for which Xxxxxxx
may obtain appropriate registrations, or other legal
protection or title, identifying Xxxxxxx, Xxxxxxx Products,
Approved Accessories, Services or Outlets.
GOVERNOR'S OAK
and Design
GATHERINGHOUSE
XXXXXXX
CURRITUCK CHERRY
WHALEHEAD OAK
KINGUARD
XXXXX'X ISLAND PINE
AMERICAN ARTIFACTS
KING'S ROAD
TOMORROW'S HEIRLOOMS
BELLE MAISON
ARMOIRE WITH A VIEW
CHERRY MOUNTAIN
Design (of oak tree)
HUNTER'S RUN
XXXXXXX HOME FURNISHINGS
LAMPLIGHT LANE
LE BISTRO
LENOIR Design (of oak tree)
NOUVEAU
SHAKER RIDGE
SOLID SOLUTIONS
(h) "Proprietary Marks" shall mean all other names,
marks, insignias, symbols, signs, and any other
identifications from time to time associated with Products,
Services, or any Outlet.
(i) "Payment Date" shall mean the due date as
indicated on Xxxxxxx'x invoice to Retailer.
(j) "Designated Area" shall mean a geographic area in
which no other Xxxxxxx Home Furnishings Retail Outlet will
be authorized by Xxxxxxx to anyone other than Retailer,
which geographic area is described on Exhibit B.
(k) "Outlet" shall mean when used with respect to
Retailer, the retail outlet or outlets and the premises on
which an outlet is located, whether owned or leased,
established by Retailer in accordance with this Agreement,
and when used with respect to Xxxxxxx and other Retailers,
the retail outlets established by such persons which are
Xxxxxxx Home Furnishings Retail Outlets.
ARTICLE II
APPOINTMENT, TERM AND LOCATION
Section 2.1 Appointment of Retailer. Xxxxxxx hereby
grants the Retailer, and Retailer hereby accepts from
Xxxxxxx, for the term and upon the terms and conditions
hereinafter set forth, the right (i) to establish and
operate an Outlet at such location as shall be selected by
Retailer and approved by Kincaid pursuant to Section 3.1
hereof in the area designed on Exhibit A attached hereto,
(ii) to use the Proprietary Marks and Trademarks in
connection with the operation of said Outlet, and (iii) to
purchase such Xxxxxxx Products as Retailer may from time to
time desire subject to the terms and conditions set forth in
Article VIII hereof. Retailer agrees to immediately proceed
to take all actions necessary to establish its Outlet and to
have the same completed and open for business as set forth
on Exhibit A. Retailer agrees, however, not to open its
Outlet for business until receiving written confirmation
from Xxxxxxx affirming that Retailer has satisfied all pre-
operating requirements established by this Agreement or as
otherwise established by Xxxxxxx.
Section 2.2 Term of Agreement and Agreement Renewals.
Except as otherwise provided by Article X, this Agreement
shall remain in effect subject to satisfactory annual
operations performance review conducted by Xxxxxxx. Such
requirements shall provide that Xxxxxxx has the right to
review performance annually and require Retailer to
implement any and all changes required to meet the
performance standards required by Xxxxxxx.
Section 2.3 Operational Area. Xxxxxxx shall not, while
this Agreement remains in effect, own or operate, or grant
the right to any third party to establish, any other Outlet
within the Designated Area. Nothing in this Section 2.3
shall be deemed or construed in any manner, however, as
limiting or restricting the right of Xxxxxxx to sell Xxxxxxx
Products at wholesale to any furniture Retailer doing
business within the Designated Area, including to furniture
Retailers whose store may contain a Xxxxxxx Gallery, so long
as such Retailer is not operating an Outlet therein.
Section 2.4 Personal Guarantee. If Retailer is an entity
any of whose owners enjoy limited liability by law, then any
one or more of such owners as may be designated by Xxxxxxx
shall execute and deliver to Xxxxxxx its then standard forms
of personal guarantee and subordination.
Section 2.5 Life Insurance. If the Retailer's account
with Xxxxxxx becomes ninety (90) days past due, or the
balance of such account exceeds the amount Xxxxxxx deems
appropriate, or if for any other reason Xxxxxxx reasonably
deems the prospects of payment by the Retailer to be
impaired, then in any such case, if requested by Xxxxxxx:
(a) The Retailer agrees to purchase insurance on the
lives of such of its key employees as Xxxxxxx may specify.
Such insurance shall be in such amounts as Xxxxxxx may
request.
(b) The Retailer agrees: (i) to assign such insurance
to Xxxxxxx as collateral for the Retailer's existing and
future obligations to Xxxxxxx; (ii) to execute and deliver
such documents as may be required in order to effectuate
such assignment; (iii) to cause a copy of the assignment to
be filed in the home office of the insurer; and (iv) to
provide Xxxxxxx with the insurer's written acknowledgement
that the assignment has been so filed.
ARTICLE III
LOCATION, ESTABLISHMENT AND ASSISTANCE
Section 3.1 Selection and Acquisition of Location.
Unless specifically identified on Exhibit A, the exact
location of Retailer's Outlet shall be subject to the prior
approval of Xxxxxxx. Except as herein below otherwise
provided the selection and acquisition of the location of
Retailer's Outlet shall be the sole and exclusive
responsibility of Retailer. At Retailer's request, Xxxxxxx
shall from time to time consult with Retailer with respect
to site selection and acquisition, which consultation may or
may not include consulting with Retailer with respect to the
attributes of good locations, assisting Retailer in
reviewing demographic and traffic flow characteristics, and
assisting Retailer in analyzing neighborhood
characteristics, as Xxxxxxx shall determine to be
appropriate in the sole and exclusive exercise of its
discretion. Nothing in this Section 3.1 shall be deemed as
constituting a warranty, representation or determination by
Xxxxxxx that the location ultimately selected by the
Retailer and approved by Xxxxxxx is capable of supporting a
successful outlet. Retailer acknowledges and agrees that at
any consultation, advice and assistance which may be
rendered by Xxxxxxx to Retailer hereunder shall not in any
way be deemed to alter or relieve Retailer of its absolute
obligation herein set forth to select and acquire a location
for its outlet.
Section 3.2 Terms of Controlling Agreements. Xxxxxxx
may, at its option, require that the terms of any land
contract, lease, deed, mortgage or other instrument or
additions or extensions thereof, pursuant to which
Retailer's Outlet location is financed, acquired and/or
occupied by Retailer be approved in advance by it.
Section 3.3 Relocations. Once established, Retailer
shall not move, relocate, or reconstruct its Outlet without
the prior written consent of Xxxxxxx. Xxxxxxx shall be
provided with such information regarding the proposed new
location and the design characteristics of the Outlet that
will be located thereat as Xxxxxxx may request in order to
determine that such location and Outlet will be consistent
with its standards for the establishment of a Xxxxxxx Home
Furnishings Retail Outlet.
Section 3.4 Planning, Layout and Construction of Outlet.
Retailer recognizes that various aspects of the size,
design, layout, signage and decorating schemes of Outlets
must be relatively consistent in order to protect and
enhance the reputation and market acceptance of Outlets and
their Products, and to preserve, protect and enhance such
value, it is important for all Outlets to meet and maintain
such standards as Xxxxxxx may from time to time adopt.
Accordingly, the size of Retailer's Outlet, the exterior and
interior appearance of Retailer's Outlet, and the Outlet's
interior floor plan and decor, shall meet and be in
accordance with the standards from time to time adopted by
Xxxxxxx, and shall be subject to Xxxxxxx'x prior approval.
Retailer shall be solely responsible for final plans and
specifications for its Outlet satisfactory to Xxxxxxx;
provided, however, that Xxxxxxx shall, upon request, consult
with Retailer and its builders, architects and designers
with respect to interior and exterior appearance, interior
floor planning and other matters as may be from time to time
necessary in order to facilitate the design and timely
construction of Retailer's Outlet in accordance with
Xxxxxxx'x specifications. Retailer shall provide Xxxxxxx
with a copy of its final plans, drawings and specifications,
together with any amendments thereto made during the course
of construction, so that Xxxxxxx will have at all times for
its records a complete set of "as built" plans and
specifications for Retailer's Outlet. Retailer agrees that
Xxxxxxx may provide copies of the same to existing or future
Outlet Retailers for use in connection with construction or
renovation of their Outlets or as a model from which they
can prepare their own drawings, plans and specifications.
Xxxxxxx agrees to have members of its design staff evaluate
appropriate designs for the Outlet and to advice regarding
appropriate materials, furniture and accessories therein.
Retailer agrees to pay Xxxxxxx the sum of One Thousand Five
Hundred Dollars ($1,500) in cash or cash equivalent within
two (2) weeks of execution and delivery of this Agreement.
This fee will be credited to Retailer's account if the
Outlet Grand Opening is held within six (6) months after
final plans for the Outlet have been prepared. The fee will
be forfeited in the event the Outlet is not opened within
such period.
Section 3.5 Approved Signage. Retailer acknowledges that
signage needs to be consistent to maximize consumer
recognition. All exterior and interior signage shall be of
a design, color and specification supplied by Xxxxxxx. The
vendor or manufacturer of such signage must be approved by
Xxxxxxx.
Section 3.6 Equipment. Prior to commencing operation of
its Outlet, Retailer shall procure the Equipment identified
by Xxxxxxx as being essential for the Outlet's operation.
Each item of equipment shall have the characteristics
specified by Xxxxxxx and shall be one of the makes or models
specified unless otherwise approved in advance by Xxxxxxx.
Section 3.7 Product Mix and Display. The parties
recognize that to achieve the benefits contemplated by the
Xxxxxxx Home Furnishings Retail Outlet Program, it is
necessary for Retailers to have an adequate inventory and
proper mix of Products and to display Products in carefully
coordinated displays creating an environment as similar as
possible to that which customers will experience in their
own homes. Accordingly, Retailer agrees at all times to
strictly adhere to and follow the Product inventory, Product
mix and Product display standards, methods and requirements
from time to time established by Xxxxxxx. Retailer agrees
to purchase a minimum of twelve (12) different collections
of Products along with upholstered furniture, bedding and
other products required to maintain a suitable display of
same at all times in the Outlet. The final Outlet
assortment must be approved in writing by the Vice President
- Sales, Xxxxxxx.
Section 3.8 Warehouse Space. Prior to commencing
operation of its Outlet, Retailer shall evidence to Xxxxxxx
that it has adequate warehouse space to house Product
inventories of such kind and quantity as Xxxxxxx shall
determine to be necessary for the proper operation of
Retailer's Outlet. Retailer acknowledges that, over time,
Retailer's need for warehouse space may increase and agrees
to construct or otherwise obtain such additional warehouse
space as Xxxxxxx may from time to time determine to be
necessary in order for Retailer to carry adequate Product
inventories to service its Outlet.
ARTICLE IV
TRADEMARKS, PROPRIETARY MARKS AND PATENTS
Section 4.1 Validity of Trademarks and Proprietary Marks.
Retailer hereby acknowledges the validity of the Trademarks
and Proprietary Marks (collectively referred to in this
Article IV as "Marks"), and acknowledges the same to be the
sole property of Xxxxxxx. Retailer agrees that it will use
the Marks only for so long as this Agreement remains in
force, and only in connection with the operation of the
Retailer's Outlet and the sale of Products and provision of
Services therefrom in the manner and for the purposes
specified by Xxxxxxx. Retailer acknowledges and agrees that
the Marks and goodwill associated therewith are each very
valuable and that it shall not, either during or after the
term of this Agreement, do anything, or aid or assist any
other party to do anything, directly or indirectly or by
omission, which would infringe upon, harm, or dilute the
value thereof, or to impair the right, title, and interest
of Xxxxxxx therein, or contest the right of Xxxxxxx to
ownership of Marks or in any other xxxx or name which
incorporates all or any portion of any Xxxx.
Section 4.2 Use of Trademarks and Proprietary Marks.
Retailer acknowledges and agrees that it shall have a non-
exclusive right to use Xxxxxxx'x Marks during the term of
this Agreement, provided that in all such cases (i) Retailer
shall not use such Marks, or any other marks or names, in
such a way as is likely to lead any third person to believe
that Retailer is, or may be, an agent or representative of
or have the power to bind Xxxxxxx, (ii) Retailer shall use
such Marks in all advertising and on all stationary,
letterheads, invoices and other business forms only in such
a manner and form as shall be approved by Xxxxxxx, and to
facilitate such approval Retailer agrees at Xxxxxxx'x
request to send Xxxxxxx samples, specimens, photographs, or
finalized layouts of all such advertising and other
materials relating to each different use of any of the Marks
and shall refrain from such use until written approval is
given by Xxxxxxx; unless advised to the contrary by Xxxxxxx,
material furnished by Xxxxxxx shall be considered approved
for use, (iii) Retailer agrees to promptly and fully follow
all directions and instructions of Kincaid as to use of each
of such Marks and to promptly cease and desist any
particular use of any Xxxx determined to be inappropriate by
Xxxxxxx, (iv) Retailer shall not use any such Xxxx or any
portion thereof as all or any portion of its firm or
corporate or domain name, (v) Retailer agrees to promptly
advise Xxxxxxx of the appearance of any infringement of the
Marks, acknowledges that Xxxxxxx has the exclusive right to
assert claims of infringement and to institute proceedings
for infringement of such Marks, and agrees to render such
assistance in connection therewith as Xxxxxxx may require;
it being understood that Retailer shall have no right to
take any action by itself against an alleged infringer of
such Marks, and (vi) at the request of Xxxxxxx, Retailer
agrees to use appropriate marking, such as "Reg", "Reg.
Xxxx", or "r" if appropriate, with all Xxxxxxx trademarks.
Retailer further agrees that it will not register or attempt
to register any Xxxx, alone or with any other word, symbol
or phrase, in its own name or that of any other person or
other entity.
Section 4.3 Future Rights and Trademarks. Retailer
agrees that all rights and any future rights which may
develop in any of the Marks are reserved to Xxxxxxx and any
rights and benefits arising because of their use (whether in
whole or in part) at any time by Retailer accrue entirely to
Xxxxxxx. Retailer hereby assigns and agrees to assign to
Xxxxxxx all of Retailer's right, title and interest in and
to each of the Marks or any other xxxx similar thereto,
together with that part of the goodwill of the business
conducted with and symbolized by such Marks. The foregoing
shall survive the termination of this Agreement and be
without the payment of any consideration to Retailer either
during or upon termination of this Agreement or thereafter.
Section 4.4 Ownership of Trademarks. Retailer
acknowledges and agrees that it shall have no property right
or interest whatsoever in any of the Marks other than as
specifically provided by this Agreement. Upon the request
of Xxxxxxx, or upon termination or expiration of this
Agreement, whichever shall first occur, Retailer agrees to
immediately and permanently cease to directly or indirectly,
carry on business under, and will not thereafter in any way
use in any manner whatsoever, any of the Marks or the term
"Xxxxxxx Home Furnishings," "Xxxxxxx Home Furnishings
Retail Outlet", or any xxxx or name that includes "Xxxxxxx"
or colorable imitations thereof, or the service xxxx,
"Tomorrow's Heirlooms," or any names or marks confusingly
similar to any of Xxxxxxx'x Marks. Retailer agrees to
promptly file termination documents including certificates
of discontinuance of use of assumed names, corporate change
of name resolutions, etc. with the appropriate governmental
agencies indicating that it has terminated use of the Marks.
Retailer agrees to make such changes in its signs,
advertising, stationary, forms, telephone books, and any
other matters as Xxxxxxx shall reasonably direct for the
purpose of clearly distinguishing from each of the Marks.
If Retailer shall, upon request by Xxxxxxx, fail to make
such changes or notifications, Xxxxxxx or its agents shall
have the right to enter upon the premises of Retailer at the
expense of Retailer, and remove, obliterate, or change all
signs, advertising or other things identifiable in any way
with the Marks. It is expressly understood that the
provisions of this Section survive termination and are not a
limitation on any other rights or remedies of Xxxxxxx.
Section 4.5 Goodwill. Retailer acknowledges that all
goodwill which may arise from Retailer's sale of Products,
provision of Services and use of the Marks is and shall at
all times remain the sole and exclusive property of Xxxxxxx
and shall inure to the sole benefit of Xxxxxxx.
Section 4.6 Ownership of Improvements to Xxxxxxx
Products. Retailer acknowledges that many Xxxxxxx Products
or components thereof are protected by domestic and/or
foreign patents and that many such Products contain
attributes or features which, in Xxxxxxx'x opinion,
constitute confidential trade secrets. Upon termination of
this Agreement for any reason whatsoever, Retailer agrees
that it will not use, disclose to others, register, or
challenge the ownership of Xxxxxxx to, any inventions,
improvements, discoveries, technology, know-how, patents, or
patent applications made, conceived, developed or reduced to
practice by any party with respect to Xxxxxxx Products,
whether then registered or unregistered, or used or unused,
by Xxxxxxx.
ARTICLE V
REPORTS AND RECORDS
Section 5.1 Monthly Sales Reports. By the tenth (10th)
day of each month, Retailer shall submit to Xxxxxxx a
complete statement of its net written sales for the
preceding calendar month and of its month ending inventory
in form and substance satisfactory to Xxxxxxx.
Section 5.2 Annual Financial Statements. Within ninety
(90) days following the end of Retailer's fiscal year,
Retailer shall provide Xxxxxxx with a copy of its year-end
financial statements containing a balance sheet and profit
and loss statements completed in accordance with the Xxxxxxx
chart of accounts. Such statements shall be prepared in
accordance with generally accepted accounting principles
consistently applied by independent certified public
accountants acceptable to Xxxxxxx on a reviewed or certified
basis, as Xxxxxxx may from time to time request, and shall
be accompanied by such notes and qualifications as are
necessary in order to make such statements accurately
reflect Retailer's financial condition as of the date
thereof in accordance with the manner of their presentation.
Section 5.3 Monthly Financial Statements. In the event
any amount payable to Xxxxxxx becomes past due, Xxxxxxx may,
at its option, require Retailer to provide it with monthly
financial statements. If required, such financial
statements shall be prepared and delivered to Xxxxxxx within
twenty (20) days of the end of each calendar month, and
shall be in such form and contain such information as
Xxxxxxx may request. Retailer's obligation to provide
monthly financial statements as contained herein shall
continue until such time as Xxxxxxx shall otherwise direct
or Retailer shall pay all invoices due Xxxxxxx on a full and
current basis for a period of twelve (12) consecutive
months.
Section 5.4 Other Reports. Retailer covenants and agrees
to prepare and submit such additional reports in such form
and containing such information as Xxxxxxx may from time to
time request.
ARTICLE VI
ADVERTISING
Section 6.1 Cooperation with National Advertising.
Retailer acknowledges that during the term of this Agreement
Xxxxxxx may from time to time initiate national advertising
campaigns to promote the sale of Products and agrees to
participate in such national campaigns. For purposes
hereof, participation shall mean actively supporting the
promotional theme of such national advertising campaign by
the placement of adequate, appropriate and professional
advertising in Retailer's local media announcing and
promoting the theme and/or the Products being emphasized by
Xxxxxxx in such campaign through the use of such in-store
materials and advertisements as shall be satisfactory to
Xxxxxxx. Except for such materials, if any, as may be
provided by Xxxxxxx, Retailer shall be solely and
exclusively responsible for obtaining or preparing all
materials and advertisements and for all costs incurred by
it in connection with participation in such campaigns.
Section 6.2 Retailer's Advertising. In addition to
participating in national advertising campaigns as required
by Section 6.1, Retailer shall use reasonable efforts to
actively advertise and promote Retailer's Outlet and the
sale of Products therefrom at all times. Retailer
acknowledges that to achieve the benefits contemplated by
the Xxxxxxx Home Furnishings Retail Outlet Program, a
substantial advertising commitment is required and, based on
past experience, advertising expenditures should approximate
eight percent (8%) of sales except during startup periods
when larger advertising commitments are required.
Section 6.3 Advertising Materials. Retail materials have
been developed for sole use by the Xxxxxxx Home Furnishings
Retail Outlets to advertise and promote Xxxxxxx Products.
The Retailer shall follow Kincaid instructions for use of
said advertising and promotional materials. Nothing
contained in this Section 6.3 shall be construed to obligate
Xxxxxxx to advertise or promote the Products or Retailer's
Outlet in the Outlet's market area nor to limit in any way
the form, content, manner or frequency of its own
advertising, nor to require Xxxxxxx to mention Retailer's
Outlet in its advertising.
Section 6.4 Grand Openings. Retailer acknowledges that
to achieve the benefits associated with the Grand Opening of
a new store, the advertising expenditures associated with a
Grand Opening advertising campaign will exceed the
approximately eight percent (8%) of sales advertising
expenditures anticipated during the normal course of
business.
Section 6.5 Cooperative Advertising. Cooperative
advertising funds will be governed by the separate
Cooperative Advertising Agreement, which accompanies this
Agreement.
ARTICLE VII
RETAILER'S AGREEMENT WITH RESPECT TO OPERATION OF OUTLET
Section 7.1 In General. Promptly following the execution
of this Agreement, Xxxxxxx shall furnish Retailer with
instructions governing the operation of the Outlet and shall
provide amended and updated instructions as conditions
warrant.
Section 7.2 Outlet Appearance and Design. Retailer
acknowledges that the appearance of its Outlet, both
interior and exterior, is an essential component of the
Xxxxxxx Home Furnishings Retail Outlet Program, and that it
is necessary in order to promote goodwill and customer
recognition and acceptance that a general consistency of
appearance be maintained. Accordingly, Retailer agrees (i)
that it will make no change to the interior or exterior of
its Outlet without the prior written consent of Xxxxxxx;
(ii) that it shall make no change to the floor plan layout
of its Outlet without the prior written consent of Xxxxxxx,
(iii) that it shall, at its sole cost and expense,
diligently maintain the interior and exterior decor of its
Outlet and modify and update the same in such a manner as
may be from time to time reasonably prescribed by Xxxxxxx,
and (iv) that it shall purchase and display only such signs,
emblems, logos, lettering and the like as may be reasonably
prescribed by Xxxxxxx from time to time.
Section 7.3 Outlet Maintenance. Retailer agrees at all
times to maintain its Outlet premises and related parking
lots in a clean, attractive and safe condition and in good
maintenance and repair.
Section 7.4 Maintenance of Inventory. Retailer
acknowledges that it is an essential premise of the Xxxxxxx
Home Furnishings Retail Outlet Program that at all times
adequate Products in all categories be available for sale
and delivery to the consumer. Retailer accepts that too
little inventory works against maximizing the sale of
Xxxxxxx Products, and too much inventory reduces turn and
impairs the Retailer's profitability. Retailer also accepts
that inventory levels cannot be static, but seasonal needs
must be anticipated to consistently service the consumer.
Based on Xxxxxxx experience numerical guidelines to properly
back up inventory requirements may be provided from time to
time by Xxxxxxx.
Section 7.5 Sale of Other Products. Retailer
acknowledges that the concept of the Xxxxxxx Home
Furnishings Retail Outlet Program requires that only Xxxxxxx
Products and Approved Accessories be sold from Retailer's
Outlet. Therefore, Retailer hereby agrees that it shall
limit the products and services sold at its Outlet to
Xxxxxxx Products and Approved Accessories and such warranty
and other services as are related thereto and approved by
Xxxxxxx, and that Retailer shall not sell or provide any
other products or services of any kind or character
whatsoever therefrom.
Section 7.6 Outlet Operations. Retailer shall at all
times operate its Outlet in conformity with any customer
service requirements prescribed by Xxxxxxx and will give
prompt, courteous and efficient service to the public. All
business dealing with members of the public and advertising
connection therewith shall be governed by the highest
standards of honesty, integrity, fair dealing, and ethical
conduct. Retailer shall do nothing which would tend to
discredit, dishonor, reflect adversely upon, or in any other
manner injure the reputation of Xxxxxxx.
Section 7.7 Best Efforts. Retailer acknowledges and
agrees that the Xxxxxxx Products are sold to Retailer for
resale in the Designated Area assigned to the Retailer.
Retailer therefore agrees to use its best efforts to solicit
sales of the Xxxxxxx Products within its Designated Area
and, in consultation with Xxxxxxx, develop annual sales
goals and marketing programs reasonably necessary to assure
maximum penetration of the Xxxxxxx Products in the
Retailer's Designated Area. Retailer agrees to diligently
pursue such goals.
Section 7.8 Personnel. Retailer shall at all times
employ sufficient personnel to operate its Outlet in
accordance with the requirements from time to time
prescribed by Xxxxxxx and shall require that such personnel
conduct themselves and Outlet operations in the manner
required by Section 7.6.
Section 7.9 Insurance. Retailer shall be solely
responsible for all loss or damage of any nature whatsoever
arising out of or relating to the operation of Retailer's
Outlet, or arising out of the acts or omission of Retailer
or any of its agents, servants, employees, contractees or
customers in connection with the sale of Products or the
rendering of services to public at the Outlet, and for all
claims for damage to property or for the injury or for the
death of any person directly or indirectly resulting
therefrom, and Retailer agrees that it shall indemnify and
hold Xxxxxxx harmless from and against any and all such
claims, losses and damages, including costs and reasonable
attorneys' fees. Retailer agrees to obtain and at all times
during the term of this Agreement maintain in full force and
effect, and to pay the premiums for, adequate public
liability insurance, property damage insurance and product
liability insurance.
Section 7.10 Submission of Additional Information. In
addition to any other reports required of Retailer by the
terms of this Agreement, Retailer shall submit to Xxxxxxx
such other reports and financial information as Xxxxxxx from
time to time may require. Specifically, Xxxxxxx shall be
provided upon its request with personal financial statements
of any person or persons having, or wishing to acquire, a
material financial interest in Retailer's business.
Section 7.11 Retailer as Independent Contractor. Retailer
is acting hereunder on its own behalf as an independent
contractor. Nothing herein contained shall constitute or be
deemed to constitute Retailer, or any agent, servant,
employee or contractee of Retailer, as an employee or agent
of Xxxxxxx for any purpose whatsoever, nor shall it give
rise to a relationship between Xxxxxxx and Retailer of
partnership, joint venture or any other relationship than
one of independent contractor (except that with respect to
the sale of Xxxxxxx Products the relationship between
Xxxxxxx and Retailer shall be that of vendor and vendee).
Retailer is not, nor are any of its agents, servants,
employees or contractees, hereby or otherwise granted any
express or implied right or authority to assume or create
any obligation or responsibility for or on behalf of, or in
the name of, Kincaid, or to bind or obligate Kincaid in any
manner or in any way whatsoever. Retailer acknowledges that
its operations hereunder shall be at its own risk, and
hereby agrees to prominently use and display the legend "An
Independently Owned and Operated Retailer Specializing in
Xxxxxxx Furniture" or one of like meaning in connection with
use of the trademark "Xxxxxxx Home Furnishings" and such
other Trademarks and Proprietary Marks as Xxxxxxx may
direct.
Section 7.12 Xxxxxxx'x Right of Inspection. To insure
compliance with the terms and conditions of this Agreement
by Retailer, Xxxxxxx and its authorized representatives or
agents shall have the right at all reasonable or necessary
times to enter Retailer's Outlet for the purpose of
inspecting the same, including, but not limited to,
inspecting the appearance, types, quantities and displays of
Products on hand, the appearance of the premises, the nature
and quality of customer Services rendered, the general
manner or method of operating the Outlet, and Retailer's
books and records. Without limiting the foregoing,
inspection by Xxxxxxx of Retailer's Outlet at any time
during normal business hours during any date the Outlet is
or should be open for business shall be deemed a reasonable
time for inspection. If Xxxxxxx should ascertain that
Retailer has failed to operate its Outlet in accordance with
any of the standards and requirements set forth in this
Agreement, Xxxxxxx may require Retailer, at Retailer's
expense, to employ such contractors or others necessary to
assist Retailer and Retailer's managers in effecting full
compliance with all such standards and requirements in lieu
of and in addition to exercising any other right or remedy
available to it under this Agreement.
Section 7.13 Wholesaling. Retailer acknowledges that
Xxxxxxx is the only person entitled to wholesale, or to
authorize the wholesaling of, Xxxxxxx Products and the
Xxxxxxx Home Furnishings Retail Outlet Program is intended
to promote the retail sale of Products to the general
public. Accordingly, Retailer covenants and agrees that all
Products shall be marketed by it at retail to the general
public through operation of Retailer's Outlet in the
ordinary and usual course of business and that Retailer
shall not sell, assign, transfer or otherwise distribute
Products to any persons or entity in a wholesale manner or
in any other manner as would facilitate the further
distribution or resale thereof in connection with the
business of any person or entity acquiring the same.
Section 7.14 Sale of Products from Other Locations.
Retailer acknowledges that the Xxxxxxx Home Furnishings
Retail Outlet Program contemplates that all Product sales
will occur at the Outlet or other authorized locations and,
accordingly, agrees that it shall not, without the prior
written authorization of Xxxxxxx, sell, offer for sale,
accept offers or solicit for Products from any location
other than the Outlet or any other authorized location.
Section 7.15 Competitive Businesses. Retailer covenants
and agrees that during the term of this Agreement if it or
any person, corporate or otherwise, controlled by or
affiliated with it, whether as an officer, director,
employee or otherwise, shall jointly or severally engage or
participate in, operate, manage, own or have any ownership
interest, as a partner, shareholder, officer, director,
employee, consultant, agent or otherwise, in any business
directly or indirectly involved in whole or in part in the
wholesale or retail sale of household furniture, it will
promptly inform Xxxxxxx with respect to each such instance.
Section 7.16 Business Hours. Retailer shall have the
Outlet open for business on such days and during such hours
so as to be competitive and consistent with those generally
kept by competitive furniture stores located within the
Outlet's market area.
Section 7.17 Alteration of Products and Names. Given the
association which will exist between the Products and
Xxxxxxx'x Trademarks and Proprietary Marks, Retailer agrees
that it shall not make any alterations to, or modification
of, any Product sold by it. In addition, all Products shall
be advertised and sold only under such Trademarks,
Proprietary Marks or other names and designations as Xxxxxxx
shall from time to time specify. Specifically, unless
otherwise authorized by Xxxxxxx in writing, Retailer shall
not promote, advertise or sell any Approved Accessory using
all or any portion of any name, trademark or other
identification identifying the manufacturer thereof.
Section 7.18 National Furniture Markets. Retailer
acknowledges that in order to stay competitive in the retail
furniture business, it is important for Retailer to stay
abreast of the marketing and product trends in the furniture
industry. Accordingly, Retailer covenants and agrees that
Retailer shall attend either the Spring or Fall National
Highpoint Market each year.
Section 7.19 Performance of Warranty Work. Retailer
agrees to follow procedures established by Xxxxxxx in its
Authorized Retailer Policy when providing or performing
warranty service or work on all Xxxxxxx Products and in
dealing with its customers with regard to the same.
Section 7.20 Authorized Retailer Policy. Retailer agrees
to adhere to Xxxxxxx'x Authorized Retailer Policy as in
effect from time to time.
ARTICLE VIII
XXXXXXX PRODUCT SALES
Section 8.1 Sale of Xxxxxxx Products.
(a) During the term of this Agreement, Xxxxxxx agrees
to sell to Retailer, upon the terms and conditions
hereinafter set forth, such Xxxxxxx Products as Xxxxxxx may
from time to time designate as being available for sale to
Xxxxxxx Home Furnishings Retail Outlets in such quantities
as Retailer may from time to time order. Assuming Retailer
meets all applicable Xxxxxxx credit standards, Xxxxxxx shall
fill all orders promptly following their receipt, but
Xxxxxxx shall not be liable to Retailer or any other person
for any loss or damage in the event that the demand exceeds
Xxxxxxx'x ability to manufacture and/or supply the same, or
for any delays on Xxxxxxx'x part in supplying the same
resulting from delays of transportation carriers, fires,
strikes, riots, floods, acts of God, governmental
regulations, inability to obtain sufficient labor, necessary
materials, supplies or equipment, or any other matter, act,
cause or thing beyond Xxxxxxx'x actual and total control.
(b) All orders shall be communicated to Xxxxxxx in
accordance with Xxxxxxx'x directions, and all orders shall
be final and binding upon Retailer upon Xxxxxxx'x
acknowledgement thereof, and the terms and conditions of
Xxxxxxx'x purchase order shall control in any event. [CHECK
THIS]
(c) The purchase price of each Xxxxxxx Product ordered
shall be Xxxxxxx'x established wholesale price therefore as
in effect on the day Xxxxxxx receives Retailer's order, less
any applicable discounts or incentives then being offered by
Xxxxxxx. Xxxxxxx may from time to time increase or decrease
its wholesale prices and any applicable discounts or
incentives as it determines to be necessary or appropriate
for any reason without advance notice of any kind or
character to Retailer.
(d) The purchase price for all Xxxxxxx Products
contained in each shipment shall be paid in full on or
before the payment date as indicated on each invoice.
Invoices shall immediately follow all shipments and no
additional invoicing by Xxxxxxx shall be required. In the
event that all or any portion of the purchase price is not
paid on or before the payment date applicable thereto,
Xxxxxxx may, in accordance with its general sales practices
then in effect, assess such late charges and/or accrue
interest on the outstanding balance from the date of
delivery at the rate of eighteen percent (18%) per annum or
the maximum rate Retailer is permitted to pay by applicable
law, whichever is lower, as Xxxxxxx shall determine to be
appropriate in its sole discretion. Retailer agrees that
any and all amounts so assessed or charged may be, at
Xxxxxxx'x absolute discretion, considered and treated as
interest, a late charge and/or liquidated damages for late
payment. If a rate or charge in excess of the maximum rate
Retailer is permitted to pay is taken or received by
Xxxxxxx, the excess portion thereof shall be applied to any
other debt of Retailer owing to Xxxxxxx, or if no such debt
exists, shall be refunded by Xxxxxxx to Retailer.
Notwithstanding anything in this Agreement to the contrary,
and at any time during the term of this Agreement that
Xxxxxxx believes that the prospect for timely payments from
Retailer is questionable, Xxxxxxx may, at its option, demand
such other payment arrangements or security for payment as
Xxxxxxx shall determine to be appropriate in the sole
exercise of its discretion, including, but not limited to,
cash on delivery, advance payment on orders, or the receipt
of an acceptable letter of credit or other absolute
guarantee of payment.
(e) Xxxxxxx shall ship all Xxxxxxx Products FOB from
Xxxxxxx'x plant or warehouse from which such products are
shipped, and title to Xxxxxxx Products shall pass to
Retailer at such plant or warehouse upon delivery to the
common carrier transporting the same. Retailer shall assume
all risk of loss or damage to all Xxxxxxx Products while in
transit and Retailer shall be responsible for the payment of
all shipping and insurance charges at such time and in such
manner as Xxxxxxx shall from time to time establish.
(f) Retailer shall immediately and completely inspect
each shipment of Xxxxxxx Products upon arrival. In the
event Retailer ascertains or believes that all or a portion
of such shipment does not conform to Retailer's order,
Retailer shall immediately notify Xxxxxxx. Retailer shall
be bound to pay for all shipments accepted from the carrier
regardless of whether or not actually inspected by Retailer.
Section 8.2 Warranty of Xxxxxxx Products. Xxxxxxx makes
no warranties or representations whatsoever, whether express
or implied, with respect to Xxxxxxx Products except such
warranty as may from time to time be provided with respect
to the Xxxxxxx Product to which the warranty in question is
applicable. In connection with each sale of Xxxxxxx
Products, Retailer shall pass any warranty of Xxxxxxx on to
the Retailer's customer. Retailer agrees to make no other
promise, representation or warranty of any kind or character
whatsoever, express or implied, with respect to a Xxxxxxx
Product except the Xxxxxxx warranty applicable thereto, if
any. Xxxxxxx shall have no liability or obligation
whatsoever to Retailer or any other person other than the
applicable Xxxxxxx warranty, if any, and Retailer shall
defend, indemnify and hold Xxxxxxx harmless from any and all
claims, demands, proceedings or actions of any kind or
character whatsoever arising in any manner whatsoever from
any additional promise, representation or warranty made by
Retailer. UNDER NO CIRCUMSTANCES SHALL XXXXXXX BE LIABLE IN
ANY MANNER WHATSOEVER FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES SUSTAINED BY DEALER DUE TO ANY DEFECT IN, OR FAILURE
OF QUALITY OF, ANY XXXXXXX PRODUCT. Retailer further
acknowledges and agrees that Xxxxxxx'x liability under any
applicable warranty is conditioned upon Xxxxxxx being
provided with such information as it may request in order to
determine to its satisfaction that a breach of warranty has
occurred, which may include, among other things, return of
the allegedly defective item to Xxxxxxx for its inspection.
THE WARRANTIES DESCRIBED HEREIN SHALL BE THE ONLY WARRANTIES
MADE BY XXXXXXX WITH RESPECT TO ITS PRODUCTS AND SHALL BE
EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR
IMPLIED, INCLUDING ANY AND ALL OTHER WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OTHERWISE IMPLIED BY LAW. XXXXXXX EXPRESSLY RESERVES THE
RIGHT TO CHANGE, AMEND OR ABOLISH ANY WARRANTIES IT MAY FROM
TIME TO TIME MAKE WITH RESPECT TO ITS PRODUCTS BY WRITTEN
NOTIFICATION TO DEALER.
Section 8.3 Performance of Warranty Work. Retailer
acknowledges that except to the extent otherwise
specifically provided by the terms of any applicable limited
warranty, Xxxxxxx shall have the option of requiring
Retailer to return any Xxxxxxx Product to Xxxxxxx'x
designated plant or warehouse for repair or replacement, or
having Retailer replace such Product or make such repairs
with components or parts supplied by Xxxxxxx. Retailer
acknowledges that Xxxxxxx shall not be responsible for pick
up and delivery costs, inspection charges or minor repairs,
which Retailer or any customer may incur in returning any
Kincaid Product to Retailer and Retailer's assessment and
correction of such problem during the course of determining
whether a warranty claim exists.
ARTICLE IX
TRANSFERABILITY
Section 9.1 In General. Retailer acknowledges that
Retailer's right to operate an Outlet under this Agreement
may, in the future, appreciate in value, and that such
appreciation is dependent in substantial part upon the
customer goodwill and acceptance attaching to Xxxxxxx'x
Trademarks and Proprietary marks. Retailer recognizes that
it is in its best interest, as well as Xxxxxxx'x, that any
person to whom it assigns its interest in this Agreement be,
in Xxxxxxx'x judgment, qualified and capable to operate the
Outlet in such manner as not to jeopardize, but rather to
increase, such customer goodwill and acceptance. Therefore,
except as permitted by the provisions of this Article IX,
Retailer shall not make or attempt any assignment of this
Agreement or any interest of any nature whatsoever therein.
Section 9.2 Definitions of Assignment. For purposes of
this Article IX, the following shall constitute an
assignment which, unless effected pursuant to the provisions
of this Article IX, is prohibited:
(a) Any conveyance, assignment, transfer or
sublicense, by Retailer of any portion of any interest or
right in or under this Agreement;
(b) Any pledge encumbrance or grant of security by
Retailer of any interest or right in or under this
Agreement;
(c) Any judicial sale, sale by a pledge, lien or
holder of a security interest or other conveyance under
power of sale of any portion of any interest or right in or
under this Agreement;
(d) A passing by operation of law of any portion of
any interest or right in or under this Agreement; or
(e) Any assignment, including any and all those types
described in sections 9.2(a) through (d) above, of any
interest in Retailer, if Retailer is not a single
individual, which, together with all other such assignments,
whenever made, results in any change of control or of a
material interest in Retailer. (If Retailer herein is two
(2) or more individuals, Retailer for purposes of this
Article IX shall be deemed to be a partnership.) For
purposes hereof, any transfer of a ten percent (10%) or
greater ownership or financial interest in Retailer shall be
a change of control or a material interest.
Section 9.3 Effect of Assignment. Any assignment other
than as permitted pursuant to this Article IX, or as
otherwise approved by Xxxxxxx in writing, shall constitute a
breach of this Agreement, and shall confer no rights or
interest whatsoever under this Agreement upon any other
party.
Section 9.4 Consent to Voluntary Assignment. In the
event that a voluntary assignment to any other party is
proposed, Xxxxxxx shall not refuse its consent to the
proposed transaction, provided that all of the following
conditions are fulfilled:
(a) Xxxxxxx shall be reasonably satisfied that the
proposed assignee and each of the persons who, individually
or together, own or control the proposed assignee, is of
good moral character, and possesses the furniture business
experience, credit standing, health and financial resources
necessary to successfully operate the Outlet in full
accordance with the terms of this Agreement.
(b) If Retailer is in default under this Agreement,
all such defaults are cured at or prior to the closing of
the voluntary assignment and all amounts owed to Xxxxxxx are
paid in full at or prior to the closing of the voluntary
assignment.
(c) Xxxxxxx shall have received a written instrument,
in form reasonably satisfactory to it, in which the assignee
expressly assumes all of its assignor's obligations
hereunder, whether then accrued or thereafter arising, and
agrees to be bound by all terms and provisions of this
Agreement to the same extent and in the same manner as its
assignor. In addition, if such assignee is an entity any of
whose owners enjoy a limited liability by law, any one or
more of such owners designated by Xxxxxxx shall further
execute and deliver to Xxxxxxx its then standard form of
personal guaranty and subordination.
Section 9.5 Consent to Pledge. In the event Retailer or
any person owning an interest in Retailer desires to pledge,
encumber or grant any security interest which would
constitute an assignment within the meaning of Section 9.2,
Retailer shall first notify Xxxxxxx in writing of the
proposed transaction. Provided that such security interest
does not relate to Xxxxxxx'x Trademarks and Proprietary
Marks, Xxxxxxx shall not unreasonably withhold its consent
to such transaction upon full compliance with the following
conditions:
(a) Retailer shall continue to be bound by all the
terms and conditions of this Agreement, and such pledgee,
encumbrancer or secured party shall not be entitled to, nor
shall attempt to, exercise any rights whatsoever accorded a
holder of an ownership interest in Retailer or accorded
Retailer under the terms of this Agreement.
(b) Xxxxxxx'x consent shall in no way be deemed to be
consent to any transaction other than said pledge,
encumbrance or security interest grant as such. Any
subsequent disposition by such pledgee, encumbrancer or
secured party which is deemed to be an assignment within the
meaning of Section 9.2 shall be subject to the provisions of
Section 9.6 herein below.
(c) The pledgee, encumbrancer or secured party shall have
executed and delivered to Xxxxxxx a written instrument,
satisfactory in form and substance to Xxxxxxx, agreeing to
be fully bound by the provisions of this Article IX.
Section 9.6 Consent to Disposition to or by Secured
Party. Any disposition by a pledgee, encumbrancer or
secured party (which pledge, encumbrance or security
interest was consented to by Xxxxxxx under Section 9.5, if
such disposition would be deemed to be an assignment within
the meaning of Section 9.2), shall be consented to by
Xxxxxxx, provided that each of the conditions in Section
9.2(a) through (c) shall have been complied with.
References to assignor in Section 9.4(c) shall herein be
deemed to refer to the person who pledged, encumbered or
granted a security interest.
Section 9.7 Death. In the event of the death of
Retailer, or any person owning an interest in Retailer,
which death results in an assignment within the meaning of
Section 9.2, Xxxxxxx shall consent to the assignment and
transfer to the executor, administrator or personal
representative of the deceased of Retailer's interest in
this Agreement or the deceased's interest in Retailer, as
the case may be, provided that the conditions set forth in
Section 9.2(a) through (c) shall have been fully complied
with. Any consent by Xxxxxxx to an assignment with respect
to this Agreement to the executor, administrator, or
personal representative of the deceased shall not constitute
a consent to any subsequent assignment thereof from such
executor, administrator or personal representative to any
distributee of the estate. Any consent by Xxxxxxx to such
subsequent assignment or transfer shall be subject to
fulfillment of all of the conditions stated in this Section
9.7 with respect to the assignment to the executor,
administrator or personal representative. Reference to
assignor in Section 9.4(c) shall be deemed to refer to the
deceased.
Section 9.8 Transfer to Controlled Corporation. If
Retailer is an individual or a partnership, he or it may
transfer this Agreement to a corporation organized and
operated for the sole purpose of operating the Outlet
subject to the following conditions:
(a) Retailer shall be and remain the owner of 100% of
the issued and outstanding capital stock of said
corporation.
(b) Said corporation shall by written instrument
expressly assume all obligations of Retailer hereunder,
whether accrued at the time of such assignment or arising
thereafter, and agree to be bound by all the terms and
provisions of this Agreement to the same extent and in the
same manner as Retailer. A copy of said instrument, duly
executed, shall be delivered to Xxxxxxx.
(c) Retailer shall execute and deliver to Xxxxxxx its
then standard form of personal guaranty and subordination.
Notwithstanding said assignment, Retailer shall not be
released from, and shall remain personally bound and liable
to, Xxxxxxx with respect to all non-monetary obligations of
Retailer under this Agreement then accrued or hereafter
arising.
ARTICLE X
DEFAULT AND TERMINATION
Section 10.1 Termination by Retailer. Retailer may
terminate this Agreement at any time upon not less than
thirty (30) days prior notice to Xxxxxxx, specifying the
termination date, following the occurrence of any default by
Xxxxxxx under this Agreement and the continuation of such
default for a period of thirty (30) days from and after such
date as Retailer shall give Xxxxxxx written notice of the
default.
Section 10.2 Defaults by Retailer. Retailer shall be
deemed to be in default under the terms of this Agreement if
any of the following events occur:
(a) If Retailer shall fail to pay, when due, any
monies owing Xxxxxxx under and pursuant to the terms of this
Agreement.
(b) If Retailer shall willfully falsify any portion of
any report, statement or other written data furnished to
Xxxxxxx under or pursuant to the provisions of this
Agreement.
(c) If Retailer shall willfully deceive its customers
with respect to the source, nature or quality of Products or
other items sold.
(d) If Retailer makes a prohibited assignment, as
defined in Article IX of this Agreement, or any attempt at
such an assignment.
(e) If Retailer is unable for any reason to obtain
Approved Accessories such that, in Xxxxxxx'x sole opinion,
Retailer's ability to display Xxxxxxx Products in the manner
contemplated by the Xxxxxxx Home Furnishings Retail Outlet
Program has been materially inhibited.
(f) If Retailer fails to implement changes required as
a result of an unsatisfactory annual operations performance
review as required by Section 2.2 hereof.
(g) If Retailer fails to willingly and professionally
perform such service requirements as detailed in any
standard Xxxxxxx warranty as outlined in Sections 8.2 and
8.3 of this Agreement.
(h) If Retailer breaches any other material covenant,
specifically including but not limited to those in Article
IV, or fails to perform any other obligation imposed by this
Agreement.
(i) If Retailer fails to meet the sales potential for
Xxxxxxx Products in the Designated Area for any twelve (12)
month period or fails to use its best efforts to make
meaningful progress towards meeting the sales potential for
Xxxxxxx Products in the Designated Area for the following
twelve (12) month period. Such sales potential shall be
determined mutually and shall be based on Xxxxxxx'x market
penetration in similar marketing areas.
Section 10.3 Termination by Xxxxxxx. Xxxxxxx may
terminate this Agreement on ten (10) days notice to Retailer
upon the occurrence of any default specified in Section
10.2(a) through (e). With the exception of a prohibited
assignment pursuant to Section 10.2(d), Retailer shall be
given a period of fifteen (15) days to cure any such default
specified in the referenced Sections (a) through (e) in a
manner and fashion acceptable to Xxxxxxx in its sole
discretion. Except as otherwise provided below, upon the
occurrence of any other default, Xxxxxxx may terminate this
Agreement, at any time upon not less than thirty (30) days
written notice to Retailer following the occurrence of such
default and the continuation thereof for a period of thirty
(30) days from and after such date as Xxxxxxx shall give
Retailer written notice of such default. Notwithstanding
the preceding sentence, Xxxxxxx may immediately terminate
this Agreement by written notice to Retailer if the same
default occurs twice during any period of twelve consecutive
months from the date the first default is remedied.
Section 10.4 No Waiver. The failure of Xxxxxxx to
terminate this Agreement under and pursuant to the
provisions of this Article X or to give notice as permitted
by Section 10.3, shall not be deemed to constitute a consent
to, or a waiver of, any such default, unless a consent or
waiver is given to Retailer by Xxxxxxx in writing, and any
such written consent or waiver shall not be deemed to be a
consent or waiver with respect to any such future event of
default or the continuance of an existing event of default.
This Agreement shall remain binding and in full force and
effect as between Xxxxxxx and Retailer unless and until
Xxxxxxx elects to terminate the same pursuant to the
provisions of this Article.
Section 10.5 Remedies Not Exclusive. The right of Xxxxxxx
to terminate this Agreement pursuant to this Article,
whether or not exercised, shall not be exclusive nor
preclude the exercise of any other remedies given Xxxxxxx by
this Agreement at law or in equity on account of any default
by Retailer.
Section 10.6 Automatic Termination. This Agreement shall
be deemed to have automatically terminated upon the
occurrence of any of the following events, without the
necessity of any notice whatsoever being given to Retailer
by Xxxxxxx:
(a) Any termination of Retailer's right to possession
of all or any material portion of the Premises upon which
Retailer's Outlet is located.
(b) The adjudication of Retailer as a bankrupt, or the
filing of any petition by or against Retailer, under the
federal bankruptcy laws or the laws of any state or
territory relating to the relief of debtors, for
reorganization, arrangement, or other similar relief
provided therein, or the making by Retailer of a general
assignment for the benefit of creditors.
(c) The appointment of any receiver, trustee, or
similar officer to take charge of Retailer's business, or
any attachment, execution, levy, seizure, garnishment, or
appropriation by any legal process of Retailer's interest in
this Agreement, unless the appointment of such officer is
vacated or discharged or the effect of such legal process is
otherwise released within ten (10) days.
(d) If Retailer is a corporation, partnership, or
other business association, the occurrence of any act of the
type described in paragraphs (b) or (c) in this Section
which relates to, involves, or effects the interest of any
person owning a controlling interest in Retailer.
Section 10.7 Obligations Continuing After Termination.
Upon termination of this Agreement, whether by lapse of time
or for any other reason whatsoever, Retailer shall cease to
be an authorized Kincaid dealer with respect to all
Products, and Retailer and all persons directly or
indirectly owning any interest in Retailer or in any way
associated with or employed by or related to Retailer shall:
(a) Promptly pay Xxxxxxx all sums which are owing from
Retailer to Xxxxxxx without setoff or diminution or on
account of unliquidated claims against Xxxxxxx.
(b) Immediately and permanently discontinue use of the
Trademarks and Proprietary marks and all materials and
supplies which may in any way indicate or tend to indicate
that Retailer was an authorized Xxxxxxx Retailer or was in
any way associated with Xxxxxxx.
(c) Promptly and permanently remove or obliterate, at
Retailer's expense, all signs containing any of the marks,
names, indicia, or other things, the use of which is
prohibited by Section 10.7(b) and/or sell to Xxxxxxx such of
the aforesaid signs as Xxxxxxx may request, at Retailer's
original installed cost thereof minus a reasonable allowance
for depreciation, wear and tear, and obsolescence.
(d) Promptly destroy all stationery, letterheads,
printed matter, promotional materials, and advertising
containing any of the marks, names, indicia and other
things, the use of which is prohibited by Section 10.7(b).
(e) Immediately discontinue all advertising placed by
Retailer which contains or makes reference to any of the
marks, names, indicia, or other things the use of which is
prohibited by Section 10.7(b).
Section 10.8 Status of Unfilled Orders Upon Termination.
All unfilled orders for Xxxxxxx Products may be cancelled by
Xxxxxxx, at its option, upon termination of this Agreement.
If Xxxxxxx elects to complete all or any portion of such
unfilled orders, or if Xxxxxxx accepts orders or otherwise
transacts business with Retailer subsequent to termination
of this Agreement, all such transactions shall be deemed to
be covered by this Agreement insofar as its terms may be
applicable, but such act or acts shall not constitute or be
deemed to constitute a waiver of termination or a renewal of
this Agreement.
Section 10.9 General. Termination of Agreement shall not
under any circumstances:
(a) Impair, release or extinguish any debt,
obligation, or liability of Retailer to Xxxxxxx, or of
Xxxxxxx to Retailer, which may have accrued prior to such
termination, including, without limitation any such debt,
liability or obligation which was the cause of termination.
(b) Affect any covenants and/or agreements of Retailer
which are to be performed, in whole or in part, after
termination of this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Grant of Security Interest. In order to
secure any and all sums hereafter becoming due and payable
by Retailer to Xxxxxxx of any kind or character whatsoever,
including, but not limited to, the purchase price of all
Xxxxxxx Products, Retailer hereby grants unto Xxxxxxx a
security interest in all Xxxxxxx Products from time to time
held by Retailer. Retailer hereby agrees to make, execute
and deliver to Xxxxxxx such additional agreements,
instruments and other documents as Xxxxxxx may from time to
time request to better evidence or perfect the security
interest granted hereby, which agreements, instruments and
documents may include, but shall not be limited to, such
xxxxxx and more comprehensive security agreements as Xxxxxxx
may from time to time generally require of its Retailers and
such UCC-1 and other financing statements as Xxxxxxx may
from time to time determine, in the sole exercise of its
discretion, to be necessary, proper or convenient in order
to perfect Xxxxxxx'x security interest.
Section 11.2 Xxxxxxx Employees and Agents. Retailer
represents, warrants and covenants that no Kincaid employee,
agent or commissioned sales representative, or any person
lineally related by blood or marriage to any such
individual, owns or, during the term of the Agreement, will
own, either directly or indirectly, any interest in Retailer
or has or will have any other financial interest in Retailer
of any kind or character whatsoever.
Section 11.3 Relationship with Approved Accessory
Manufacturers. Retailer acknowledges that the terms and
conditions of all orders and purchases of Approved
Accessories shall be as from time to time agreed by Retailer
and the manufacturer of such products and agrees that
Xxxxxxx has no obligation or duty of any kind or character
whatsoever to procure or assist Retailer in procuring
Approved Accessories. Xxxxxxx makes no warranty of any kind
or character whatsoever with respect to Approved Accessories
and such products shall carry only such warranties as the
manufacturer thereof may from time to time extend. Retailer
acknowledges and agrees that, pursuant to its agreements
with manufacturers of Approved Accessories, Xxxxxxx may, at
its option, from time to time revoke its approval of
products previously designated as Approved Accessories, and
may terminate the designation of any manufacturer as being
an authorized supplier of Approved Accessories.
Section 11.4 Gender. The neuter of any pronoun shall
include the feminine and/or the masculine thereof, and the
singular of any noun or pronoun shall include the plural or
vice-versa, wherever the context shall require.
Section 11.5 Effect of Assignment, License/Assignee. Upon
any effective assignment of Retailer's interest in this
Agreement pursuant to Article IX, any and all references
herein to "Retailer" shall, unless the context otherwise
requires, mean and refer to such assignee.
Section 11.6 Headings. Section headings are for
convenience only, and shall not be construed as limiting or
defining the meaning of any provision herein.
Section 11.7 Attorneys' Fees. In the event Xxxxxxx is
required to employ legal counsel, or to incur any other
expense, in connection with enforcing any obligation of
Retailer hereunder, whether by way of legal action or
otherwise, or to defend against any claim, demand, action,
or proceeding by reason of Retailer's failure to perform any
obligation imposed upon Retailer by this Agreement, whether
or not legal action is involved, Xxxxxxx shall be entitled
to recover from Retailer the amount of all reasonable
attorneys' fees and any and all other expenses reasonably
incurred to enforce such obligation or in defending against
any such claim, demand, action or proceeding.
Section 11.8 Cumulation and Survivability of Remedies.
All rights and remedies conferred upon Xxxxxxx by this
Agreement, at law and in equity shall be cumulative of each
other, and neither the exercise nor the failure to exercise
any such right or remedy shall preclude the exercise of any
other such right or remedy.
Section 11.9 Severability. If any provision of this
Agreement shall be deemed or held by a court of last resort
to be invalid or unenforceable, either in its entirety or by
virtue of its scope or application to a given circumstance,
such provision shall be deemed modified to the extent
necessary to render the same valid, or to be not applicable
to given circumstances or to be deleted from this Agreement
(as the situation may require), and this Agreement shall be
construed and enforced as if such provision had been
included as so modified in scope or application, or had not
been included herein (as the case may be), it being the
stated intention of the parties that had they known of such
invalidity or unenforceability at the time of entering into
this Agreement, they would have nevertheless contracted upon
the terms contained herein, either by excluding such
provisions, or including such provisions only to the extent
so permitted by law. In the event such total or partial
invalidity or enforceability of any provision of this
Agreement exists only with respect to the laws of a
particular jurisdiction, this Section shall operate upon
such provision only to the extent that the laws of such
jurisdiction are applicable.
Section 11.10 Notice. Any notice or demand given or made
pursuant to the terms of this Agreement shall be deemed to
have been given or made only if served in the following
manner:
(a) If given to Xxxxxxx it shall be sent by United
States Registered or Certified Mail, postage fully prepaid,
addressed to Xxxxxxx Furniture Company, Incorporated, 000
Xxxxxxxx Xxxx Xxxx, P. O. Xxx 000, Xxxxxx, Xxxxx Xxxxxxxx
00000, or at such changed address or addresses as Xxxxxxx
may, from time to time, designate to Retailer by written
notice; and
(b) If given to Retailer, it shall, unless otherwise
specified, either be delivered personally to a manager or
shall be sent by United States Registered or Certified Mail,
postage fully prepaid, addressed to Retailer at the address
of Retailer's Outlet. Any such notice or demand shall be
deemed to have been given or made, and shall be deemed
effective, when the same has been received (if hand
delivered), or three days after posting (if served by
registered or certified mail).
Section 11.11 Merger. This Agreement constitutes and
contains the entire agreement and understanding of the
parties. There are no representations, undertakings,
agreements, terms or conditions not contained or referred to
herein. This Agreement supercedes and extinguishes any
prior written agreement between the parties or any of them
relating to the Outlet, provided that it shall not release
or extinguish any debt, obligation or liability of Retailer
to Xxxxxxx accrued immediately prior to the execution of
this Agreement, or cancel any credit owed by Kincaid to
Retailer at that time.
Section 11.12 Heirs, Assigns, etc. Subject to all the
provisions hereof, this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto (including
the parties whose signatures follow those of Xxxxxxx and
Retailer), as well as their respective heirs, executors,
administrators, personal representatives, successors, and
assigns.
Section 11.13 Applicable Law. This Agreement, including
all matters relating to the validity, construction, and
enforcement thereof, shall be governed by the laws of the
State of North Carolina.
Section 11.14 Execution Copies. This Agreement may be
executed in any number of counterparts, and each such
counterpart shall be deemed a duplicate original hereof.
IN WITNESS WHEREOF, Xxxxxxx and Retailer have caused
this Agreement to be executed and entered into as of the day
and year first above written.
Arizona Furniture Company
(Name of Retailer)("Retailer")
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: President
Witness /s/ Xxxx Xxxxxxx
XXXXXXX FURNITURE COMPANY,
INCORPORATED
("Xxxxxxx")
By: /s/ Xxxx X. XxXxxxx
Name: Xxxx X. XxXxxxx
Vice President
of Marketing
Witness___________________________________
Exhibit A to the
Xxxxxxx Home Furnishings Retail Outlet Agreement
Dated 23rd August 2000
Between
Arizona Furniture Company ("Retailer")
and
Xxxxxxx Furniture Company, Incorporated
The authorized retail furniture outlet is designated as:
________________________________________________
________________________________________________
________________________________________________
________________________________________________
Xxxxxxx Account #________________
Exhibit B to the
Xxxxxxx Home Furnishings Retail Outlet Agreement
Dated 23rd August 2000
Between
Arizona Furniture Company ("Retailer")
and
Xxxxxxx Furniture Company, Incorporated
The geographic area in which no other Xxxxxxx Home
Furnishings Retail Outlet will be authorized by Xxxxxxx to
anyone other than Retailer is described as:
The State of Arizona
____________________________________________________________
______
____________________________________________________________
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