Exhibit 10.8
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS ARE DESIGNATED "[***]."
SCHEDULE B
LICENSE AGREEMENT
THIS AGREEMENT MADE the 9th day of February, 1996.
BETWEEN:
WAL-MART CANADA INC.
(hereinafter called the "Licensor")
OF THE FIRST PART
- and -
PCA PHOTO CORPORATION OF CANADA, INC.
(hereinafter called the "Licensee")
OF THE SECOND PART
- and -
PCA INTERNATIONAL, INC.
(hereinafter called the "Guarantor")
OF THE THIRD PART
WHEREAS:
1. The Licensor is the owner and operator of a discount department store
chain under the trade name/trade xxxx Wal-Mart at several locations within
Canada;
2. The Licensee has requested and the Licensor has agreed to grant it
licenses to operate portrait studios in certain of the Licensor's stores;
3. The Licensor and the Licensee wish to enter into this Agreement for the
purposes of establishing the framework within which the aforesaid
licensees shall operate;
4. The Guarantor has executed this Agreement for the purpose of guaranteeing
the obligations of the Licensee under this Agreement.
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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
manual covenants, conditions and agreements herein contained, other good and
valuable consideration and the sum of Five Dollars ($5.00) paid by each party to
the other (the receipt and sufficiency of which are hereby acknowledged), the
parties hereto do hereby covenant and agree, each with the other, as follows:
1.00 Definitions and Recitals
1.01 For the purposes of this Agreement the following terms shall have the
meanings hereafter ascribed to them:
"Business Day" shall mean any day of the week except a Saturday, Sunday, or a
statutory holiday in the Province of Ontario;
"Gross Sales" shall mean the entire amount of all revenue and receipts, whether
from cash, cash equivalent, credit, or otherwise, of all sales of merchandise
(including gift and merchandise certificates), services provided, and any other
business activity conducted in connection with the Licensee's Businesses,
including mail or telephone orders received or filled in connection with any of
the Licensee's Businesses, deposits not refunded to purchasers, orders taken,
although said orders may be filled elsewhere, sales to employees, sales through
vending machines or other devices, and sales by a concessionaire, licensee,
third person or otherwise in relation to the Licensee's Businesses. Each sale
upon installment or credit shall be treated as a sales for the full price in the
week during which such sale was made, irrespective of the time when the Licensee
receives payment from its customer. No deduction shall be allowed for
uncollected or uncollectable credit accounts, unless and until same have been
incapable of collection by the Licensee for a period of six (6) months following
the occurrence of such sale, provided that in the event that same is
subsequently collected, whether in whole or in part, such collected amount shall
be added to Gross Sales as at the date of collection. "Gross Sales" shall not
include, however, (i) any sums collected and paid out for any sales or goods and
services tax imposed by any duly constituted governmental authority on any sale
effected in connection with the Licensee's Businesses; (ii) the exchange of
merchandise between the various locations of the Licensee, if any, where such
exchanges are made solely for the convenient operation of the business of the
Licensee and not for the purpose of consummating a sale which has theretofore
been made in connection with one of the Licensee's Businesses and/or for the
purpose of depriving the Licensor of the benefit of a sale which otherwise would
be made in connection with one of the Licensee's Businesses; (iii) the amount of
returns to shippers or manufacturers, nor the amount of any cash or credit
refund made upon any sales where the merchandise sold, or some part thereof, is
thereafter returned by purchaser and accepted by the Licensee; or (iv) sales of
the Licensee's trade fixtures;
"Licensee's Business" shall mean the operation of a portrait studio department
under the trade name within a Licensed Premise, whereby only the following
merchandise is sold, and/or the following services are provided to the public:
the taking and sale of portrait photographs, the taking of passport and
citizenship photographs, the sale of picture frames and other portrait
accessories which do not compete with those sold by the
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Licensor from time to time in its stores, the sale of photographic plaques, the
copying and restoration of old photographs, and the provisions and sale of
photographic lamination services, together with such other services and/or
merchandise as may be approved by the Licensor in writing from time to time, in
its sole absolute and unfettered discretion, which approval may be withheld for
any reason whatsoever; and "Licensee's Businesses" shall mean more than one or
all of the Licensee's Businesses collectively, as the case may be;
"Licensed Premise" shall mean such physical area within a Store as the Licensor
shall designate from time to time in its sole, absolute, and unfettered
discretion for the Licensee's Business, with respect to those Stores for which a
Licence Schedule has been executed by the parties from time to time. For greater
certainty "Licensed Premise" shall not include any Licensed Premise with respect
to which the application of this Agreement has been terminated save and except
as referred to in any Article 12.00 and any other provision of this Agreement
expressed to survive the termination of this Agreement; and "Licensed Premises"
shall mean more than one or all of the Licensed Premises collectively, as the
case may be;
"Licence Schedule" shall mean the executed license schedules forming Schedule
"A" attached hereto and forming a part of this Agreement, together with any New
Store Licence Schedules;
"New Store Licence Schedule" shall mean a new store licence schedule executed by
the parties in substantially the form set forth in Schedule "B" attached hereto
and forming part of this Agreement;
"Stores" shall mean those retail establishments owned and operated by the
Licensor from time to time (including, without in any way limiting the
generality of the foregoing, any indoor or enclosed mall area within which the
Licensor's is entitled to sell merchandise) as more particularly set forth in
Licence Schedule; and "Store" shall mean any one of the Stores;
"Trade Name" shall mean "Wal-Mart Portrait Studio";
"week" shall mean the period commencing at the opening of business each Saturday
and ending at the close of business on the immediately following Friday;
"year" shall mean with respect to each of the Licensee's Businesses, the three
hundred and sixty-five (365) day (and in the event that a year shall include
February 29th, three hundred and sixty-six (366) day) period following the
Commencement Date and each anniversary thereof with respect to such of the
Licensee's Businesses;
1.02 The recitals hereinbefore contained are true and correct and form an
integral part of this Agreement.
2.00 License
2.01 Subject to the provisions of this Agreement, the Licensor hereby grants
to the Licensee the right and licence to carry on the Licensee's Businesses
during the Term for
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the purposes set forth in Section 5.01. Notwithstanding the foregoing, the sales
area of the Licensee is to be an integral part of each Store, and neither party
shall limit access thereto or the flow of customer traffic through such area.
For greater certainty, the Licensor shall at all times maintain care, control
and access to the Licensed Premises.
2.02 The Licensor shall be entitled from time to time to unilaterally relocate a
Licensed Premise within a store for any reason whatsoever acting reasonably, by
the delivery of written notice to that effect to the Licensee. The Licensor
shall be further entitled if the Licensor ceases operation of a Store and
commences the operation of a new Store in the same market area to unilaterally
relocate the Licensed Premise of the old Store to the new Store, by the delivery
of written notice to that effect to the Licensee. The Licensee shall, comply
with the said notice and effect such work as the Licensor stipulates is
necessary or it to make the Licensed Premise comply with the said notice, and
the Licensor shall reimburse the Licensee for reasonable costs actually incurred
to effect such relocation (which for greater certainty shall not include any
charge for administrative work or overhead of the Licensee connected with such
move, or for any loss of business or lack of trade during any period within
which the Licensee's business operations are interrupted by the Licensor). In
the event that any such relocation precludes the Licensee from operating its
business as a result of work necessary to be effected by the Licensor to
facilitate such relocation, the Licensee shall not be required to pay the
Licence Fee in connection with the affected Licensed Premise for the period of
such interruption. The Licensor shall be entitled, acting reasonably, to
designate the time and manner within which the aforesaid work shall be effected
by the Licensee by the inclusion of same in the aforesaid notice, in which case
the Licensee shall comply with same. The Licensee covenants and agrees to effect
such work in a diligent and expedient fashion and to ensure that the areas
wherein the licensed Premise was formerly located is restored to its original
condition.
2.03 The Licensee, its employees, agents, contractors, service personnel, and
customers shall have, subject to Section 2.04, in common with all other persons
entitled thereto, free access to and use of all entrances, stairways, aisles,
corridors, washrooms, and other areas open to the public within a Store from
time to time as the Licensor shall designate during such time(s) as the Licensee
shall operate its business within the Licensed Premise in such Store.
2.04 Notwithstanding Section 2.03, the Licensee, its employees, agents,
contractors, and service personnel shall only have access to such portions of a
Store as the Licensor or its Store manager shall designate from time to time for
the purpose of transporting supplies, equipment, merchandise, goods, trade
fixtures, and/or such other chattels as the Licensee may require from time to
time, to and from the Licensed Premise. The Licensor shall retain exclusive
possession and control of all keys and security codes to the Store and its
security systems.
2.05 The Licensor shall have the right to install through or upon the Licensed
Premises such pipes, aisles, conduits, wires, apparatus, and other physical
installations in connection with any service system as may be proper to useful
for the Licensor's
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operations, but the same shall be installed so as to interfere as little as
possible with the Licensee's use of the Licensed Premises.
2.06 The Licensee acknowledges that it has examined the Licensed Premises in the
Stores and is thoroughly familiar with the condition thereof and accepts each
Licensed Premise in the condition existing as at their respective Commencement
Dates;
2.07 In the event that the parties shall from time to time desire that this
Agreement shall extend to any additional retail premises operated by the
Licensor, the parties shall give effect to same by executing a New Store Licence
Schedule.
2.08 The Licensor covenants and agrees that, subject to the provisions of this
Section 2.08, it shall not permit any person other than the Licensee to operate
a portrait studio on a permanent, temporary, or "travelling promotion" basis
within any Store wherein the Licensee carries on a Licensee's Business from time
to time. The Licensor further covenants and agrees that, as to any store
operated by the Licensor in Canada in which the Licensee does not carry on a
Licensee's Business, the Licensor shall grant to the Licensee a right-of-first
refusal to establish and operate a Licensee's Business, the Licensor shall grant
to the Licensee a right-of-first refusal to establish and operate a Licensee's
Business on the terms and conditions of this Agreement. In the event that the
Licensor delivers written notice to the Licensee that it wishes to carry on a
Licensee's Business in any store operated by the Licensor in Canada in which the
Licensee does not carry on a Licensee's Business, the Licensee shall advise the
Licensor in writing of its intentions within five (5) Business Days following
its receipt of such notice, and in the event that the Licensee fails to respond
to the Licensor in writing within such period of time, and/or advises that it is
not interested in operating a Licensee's Business as requested, the Licensor
shall be free to permit any other person to operate a portrait studio in such
store. For greater certainty and notwithstanding the foregoing, nothing herein
contained shall prevent the Licensor from: (i) operating a portrait studio in
any of its stores within which the Licensee does not carry on a Licensed
Business, and with respect to a permanent portrait studio only, provided that it
has granted the right-of-first refusal contemplated in this section to the
Licensee and the Licensee has failed to agree to operate a Licensee's Business
within such store in the manner and within the time specified above; (ii) itself
or any of its other licensees selling any merchandise in any Store, including
without limitation, picture frames, film, photographic equipment, film, and
other related merchandise; (iii) operating a photographic processing department
in any Store; (iv) operating a "Glamour Shots" or similar travelling promotional
program within any Store.
3.00 Term
3.01 This Agreement and the licenses created pursuant to this Agreement shall
commence on the date hereinabove set forth and, subject to earlier termination
as provided for in this Agreement, continue in effect for a term ending at 12:00
midnight on the day which is five years following the date of this Agreement
(the "Term").
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3.02 Notwithstanding the provisions of Section 3.01, in the event that a Licence
Schedule stipulates a later or earlier date of expiration than that set forth in
Section 3.01, the "Term" in respect of the Licensee's Business governed by such
Licence Schedule and the application of this Agreement thereto, shall commence
on the Commencement Date set forth in such Licence Schedule, and end at 12:00
midnight on the date which is five (5) years thereafter.
3.03 The Licensor shall have the option to unilaterally renew the Term with
respect to any of the Licensee's Businesses for one renewal period of two (2)
years for each such renewal, by delivery of written notice to that effect to the
Licensee on or before the date which is thirty (30) days prior to the expiry of
the term with respect to such Licensee's Business. The terms of this Agreement
and the license(s) created pursuant to this Agreement shall be continued for the
renewal period, upon the exercise of any such option to renew by the Licensor.
4.00 License Fees
4.01 The Licensee shall also pay to the Licensor in respect of each of the
Licensee's Businesses, an amount equal to [***] of the total Gross Sales made by
the Licensee, its employees, concessionaires, agents, licensees, contractors,
successors and assigns in connection with such Licensee's Business during each
year (the "Licence Fee"). The Licensee covenants and agrees to pay the Licence
Fee to the Licensor for each of the Licensees Businesses weekly, on the date
which is ten (10) Business Days following the end of each week.
4.02 In addition, the Licensee shall bear the cost of and pay to the Licensor
all applicable sales, goods and services, value added and other similar taxes
(the "Taxes") exigible from time to time with respect to any payment by it under
this Agreement, in accordance with the provisions of the legislation imposing
such tax or taxes. The Licensee shall pay the Taxes to the Licensor on the date
that it is required to make the payment to the Licensor to which such Taxes
apply.
4.03 The Licensee shall deliver to the Licensor together with each Licence Fee
Payment on the date which is ten (10) days following the end of each week, a
sales report (the "Sales Report") for the immediately preceding week containing
such information and in the format set forth in Schedule "C" attached hereto and
forming a part of this Agreement. For greater certainty, the parties acknowledge
and agree that the Sales Report shall be prepared individually for each of the
Licensee's Businesses and shall specify the Gross Sales for the immediately
preceding week, and all preceding weeks in the year, together with year to date
totals shown adjacent to the budgeted amounts for same previously agreed to with
the Licensor, Licence Fee, and Taxes for the applicable Licensee's Business,
together with a summary indicating the totals of same for all of the Licensee's
Business collectively. The Licensee further covenants to provide a Sales Report
detailing the foregoing information for the immediately preceding year
applicable
_________________________
[***] Redacted pursuant to a request for confidential treatment.
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to the Licensee's Business, on the date which is thirty (30) days following the
completion of such year. The Licensee covenants and agrees to make all of its
records pertaining to the Licensee's Businesses available to the Licensor and
its agents for inspection and/or audit forthwith following the receipt by it of
one (1) Business Day's prior written notice from the licensor and/or its agents
requesting same. The Licensee covenants and agrees to retain all such records
for a minimum of two (2) years following the end of each year of the Term. The
License shall provide the Sales Report to the Licensor prepared using Microsoft
Excel on a 3.5 inch computer disk, as well as on paper.
4.04 The parties covenant and agree to re-adjust any under or over payments of
the Licence Fee, and/or Taxes payable under this Agreement with respect to the
immediately preceding year of the Term, within fifteen (15) days following any
of the delivery by the Licensee to the Licensor of the annual sales report
referred to in Section 4.03, the date that a legitimate written request therefor
by the other party based on a reporting error and/or other failure to comply
with this Agreement, and/or the date that the Licensee becomes aware that it has
effected an underpayment to the Licensor. If a statement of Gross Sales
submitted by the Licensee in respect of one of the Licensee's Businesses is
found to be incorrect, so that such error resulted in an under-reporting of
Gross Sales to the Licensor which is greater than 3.5% of the Gross Sales for
such Licensee's Business for the applicable year, the Licensee shall pay all
costs incurred by the Licensor with respect to any audits of the Licensee' books
and records for all of the Licensee's Businesses for such year, including,
without limiting the generality of the foregoing, the costs of any internal
auditors of the Licensor.
4.05 The Licensee shall pay to the Licensor interest on any monies owing to the
Licensor which are past due under this Agreement at the rate of the annual rate
of interest announced from time to time by the Toronto-Dominion Bank as a
reference rate then in effect for determining interest rates on Canadian dollar
commercial loans in Canada plus 2%. Such interest shall accrue from the date
such monies first become due and payable to the Licensor and shall be calculated
and compounded semi-annually.
4.06 The Licensee covenants and agrees to deliver to the Licensor at the end of
each quarter of each of the Licensor's fiscal years (i.e. February 1 - January
31), copies of all of its most current financial statements, including without
limiting the generality of the foregoing, balance sheet, income statement,
statement of retained earnings, and cash flow statement, whether or not same
have been independently audited and/or prepared by a chartered accountant. In
addition to the forgoing, in the event that any of such financial statements
shall be audited and/or prepared by a chartered accountant from time to time,
the Licensee shall forthwith deliver copies of any audit report or other report
as to the adequacy of such financial statements to the Licensor. The Licensor of
any audit report or other report as to the adequacy of such financial statements
to the Licensor. The Licensor covenants and agrees to maintain any financial
statements and/or other information provided to it under this Section 4.06 in
the strictest of confidence and shall not disclose any of same to any other
person.
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5.00 Use of Licensed Premises
5.01 The Licensee shall be entitled to use each Licensed Premise for the purpose
of carrying on the Licensee's Business and for no other purpose, save and except
for such other purpose as the Licensor may approve in writing from time to time
following the receipt of a written request therefor from the Licensee which
approval may be withheld for any reason whatsoever.
5.02 The Licensee shall carry on each of the Licensee's Businesses on such days
and during such hours as are specified in Schedule "D" attached hereto and
forming part of this Agreement. For greater certainty, nothing in this Agreement
shall prevent the Licensee from extending the studio hours of operation on a
province by province or individual studio basis, provided that the Licensee must
first review such change with the Licensor and receive the Licensor's approval
to extend such hours of operation.
5.03 The Licensee hereby acknowledges that its business reputation, intended use
of the Licensed Premises as set forth in Section 5.01, potential for payment of
Licence Fees and ability to generate patronage to the Licensed Premises and the
Stores were all relied upon by the Licensor and served as significant and
material inducements contributing to the Licensor's decision to enter into this
Agreement with the Licensee. The Licensee hereby covenants and agrees: (i) to
carry on the Licensee's Businesses only under the Trade Name and under no other
name or trade name whatsoever without the Licensor's prior written consent which
may be withheld for any reason whatsoever, (ii) to continuously use the Licensed
Premises for the retail sale of its goods or services in accordance with its
permitted use set forth in Section 5.01, during the hours designated by the
Licensor pursuant to Section 5.02.
6.00 Operating Standards / Customer Complaints
6.01 The Licensee shall operate its business in an efficient, high class and
reputable manner. In addition, the Licensee will conduct all business in
conjunction with and abiding by the Licensor's philosophies, culture and
standards in force from time to time. The Licensee agrees with the Licensor that
the Licensee's business will be operated in a diligent and business-like manner
in conformity with the Licensor's standards and policies as may be amended from
time to time. The Licensee's employees will at all times, while on the
Licensor's premises, maintain a pleasant and courteous attitude towards
customers. While on the Licensor's premises, the Licensee's employees shall be
subject to the Licensor's rules and regulations as may be amended from time to
time. No smoking, food or drink will be allowed on the sales floor. The personal
appearance of the Licensee's employees, agents and workmen must be neat and
clean and all attire must be consistent with attire worn by the Licensor's sales
floor associates. The Licensee will instruct each employee to refer to the
Licensor's Store management for details on all such rules and regulations. The
Licensee shall not permit any odours or noise which are objectionable or
unpleasant to the Licensor or its customers to emanate within a Store nor take
any other action which would constitute a nuisance or would disturb or endanger
the customers or occupants of the Store, nor do anything which would tend to
injure the reputation of the Store or the Licensor.
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6.02 The Licensee shall not conduct within the Licensed Premises any "fire",
"bankruptcy", "going-out-of-business," "liquidation," or other similar sales,
and/or operate within the Licensed Premises a "wholesale" or "factory outlet"
store, a "cooperative store", a "second hand" store, a "surplus" store or a
store commonly referred to as a "discount house".
6.03 The Licensee shall maintain all its displays in a neat, and attractive
condition at all times.
6.04 The Licensee shall be solely responsible for the control and management of
its operations, employment practices and labour relations concerning the
Licensee's employees and other persons rendering services to it.
6.05 If the Licensor has any complaint concerning any employees of or persons
rendering services to the Licensee, the Licensor shall inform the Licensee of
said complaint. The Licensee shall forthwith thereafter take such actions as the
Licensee deems appropriate to rectify the subject matter of such complaint and
to prevent any similar recurrence in the future. The Licensee acknowledges and
agrees that the Licensor's store managers and assistant store managers shall be
entitled to settle any customer complaint pertaining to the Licensee and/or make
any payment to any customer to give effect to such settlement, and the Licensee
shall forthwith reimburse the Licensor for same upon receipt of a request to do
so from the Licensor.
6.06 All customer complaints involving the Licensee which are received by the
Licensor shall be referred to an employee of the Licensee who shall be
designated by the Licensee as its designated corporate representative. The
Licensee shall use its best efforts to respond to these complaints within a
reasonable period after receipt of same by the Licensee and the Licensee shall
make a diligent effort to promptly resolve complaints or otherwise satisfy
customers' concerns and, if so requested by the Licensor, shall advise the
Licensor of the status of any complaint and the efforts made to resolve or
satisfy same.
6.07 The Licensee shall not, without the Licensor's prior written consent which
may be withheld for any reason whatsoever, keep anything within a Licensed
Premise or use a Licensed Premise for any activity which increases the insurance
premium cost or invalidates any insurance policy carried by any person with
respect to the Store or any part thereof. All property kept, stored or
maintained within the Licensed Premises by or on behalf of the Licensee shall be
at the Licensee's sole risk.
6.08 The Licensee shall include the address and identity of its business
activities in the Licensed Premises in all print advertisements made by it in
which the address and identity of any similar local business activity of the
Licensee is mentioned.
6.09 The Licensor shall maintain and repair the Stores within which the Licensed
Premises are located to the standard that it deems acceptable, acting
reasonable, so as to permit the Licensee to operate its business therein.
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6.10 The Licensee covenants and agrees to provide a 10% discount on all
merchandise and services offered for sale in connection with the Licensee's
Business which is not "on sale" or offered at a "special promotional price" to
all persons entitled to use and who present at the time of purchase a valid
Wal-Mart associate discount card.
6.11 The Licensor hereby grants the Licensee a licence to operate the Licensee's
Businesses under the Trade Name, and the Licensee's advertising may specify the
local address of the store in which a Licensee's Business is situate. The
Licensee shall, subject to the terms of this section, be permitted to advertise
the Licensee's Businesses in all forms of media as the Trade Name. The Licensor
shall make all reasonable efforts to assist the Licensee in obtaining any
advertising or media discount that may be available to the Licensor from time to
time. Upon termination of this Agreement with respect to a Licensee's Business
or in its entirety (as the case may be), the license granted by this section
shall be automatically terminated and of no further force or effect with respect
to the applicable Licensee's Business(es). Any advertising by the Licensee using
the Trade Name, Licensor's name, and/or the xxxx/trademark "Wal-Mart", must be
approved in advance in writing by Licensor. Notwithstanding anything herein
contained all dealings by the Licensee with its creditors, suppliers, workmen,
contractors, agents, employees, and other similar persons shall be conducted
exclusively in the Licensee's name, and the Licensee shall not in any manner
obligate the Licensor on account thereof.
6.12 The Licensor warrants that the Licensee's conduct of the Licensed
Businesses under the Trade Name in conformity with this Agreement does not and
will not infringe or violate any trademark, trade name, or other intellectual
property rights of any other licensee of the Licensor. Provided that the
Licensee complies with its obligations under this Section 6.12, the Licensor
hereby agrees to indemnify, defend, and hold the Licensee and its parent and
affiliated corporations, employees, officers, agents, successors, and assigns
harmless from all losses, damages, and expenses, (including attorney's fees
incurred by such indemnified party) which such indemnified party may suffer as
the result of any breach of the Licensor's warranties under this Section 6.12.
The indemnity contained in this Section 6.12 shall survive the termination of
this Agreement. The Licensee hereby grants and covenants and agrees to cause the
other indemnified parties to grant the Licensor the exclusive right on behalf of
the aforesaid indemnified parties to defend, compromise, settle, retain and
instruct counsel, and/or otherwise deal with any claim, demand or other
assertion made of any of them with respect to the matters for which the Licensor
has agreed to indemnify any of them under this Section 6.12.
6.13 The Licensee acknowledges that the Licensor is the operator of discount
stores featuring a full stock of quality merchandise at low, competitive prices
and that the Licensor's reputation for competitive pricing and customer
satisfaction are imperative to its successful operation. The Licensee agrees
that each of the Licensee's Business must reasonably conform to that image. The
Licensee agrees to use its best efforts to offer to its customers the ability to
obtain photographic services (including portrait packages) from each Licensee's
Business at values equal to or better than verified, bona fide prices offered by
competitors in the market within which the applicable Licensee's Business is
carried on.
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7.00 Construction/Alterations
7.01 The Licensee shall not make any replacements, improvements,
alterations or renovations to any part of a Licensed Premise (save and
except for the installation and removal of non-affiliated movable trade
fixtures which may be installed without drilling, cutting or other physical
alteration of any part of the building within which the Store is located
(referred to in this Agreement as "trade fixtures")) from that approved by
the Licensor pursuant to this Agreement, without the prior written consent
of the Licensor which may be withheld for any reason whatsoever.
7.02 All alterations, additions, improvements and fixtures (save and except
for trade fixtures, unattached readily movable furniture and office
equipment) which may be made or installed by the Licensee within a Licensed
Premise shall remain upon and become the property of Licensor upon the
termination of this Agreement with respect to such Licensed Premise, unless
the Licensor requests their removal in which event the Licensee shall
remove the same and restore such Licensed Premises to its original
condition at its sole cost and expense.
7.03 All construction work done by the Licensee within a Licensed Premise
shall be performed in a good and workmanlike manner to a standard which is
acceptable to the Licensor, in its sole, absolute and unferrered direction,
in compliance with all governmental requirements, and in such manner as to
cause a minimum of interference with other construction in progress and
with the transaction of business in the Store.
7.04 The Licensee covenants and agrees not to permit any construction lien,
claim for lien, or other lien to arise and/or be registered against the
title to the property upon which a Store is located as a direct or indirect
result of any work undertaken by it or on its behalf in respect of a
Licensed Premise. In the event that any such lien shall arise, the Licensee
covenants and agrees to, forthwith following becoming aware of same, to
take all possible action, including without limitation the payment of the
monies claimed into court, in order to have such lien removed from the
title to the property upon which a Store is located within five (5)
Business Days thereafter. In the event that the Licensee defaults in the
aforesaid obligation, the Licensor shall be entitled, if it so chooses, to
undertake the Licensee's obligations on its behalf and to invoice the
Licensee for all costs, including without limitation legal fees in their
entirety, associated with same, which shall be payable by the Licensee to
the Licensor forthwith upon receipt by the Licensee of a written demand
therefor from the Licensor. The foregoing remedy of the Licensor is in
addition to and not substitution for any other remedies available to the
Licensor under this Agreement, at law, or in equity.
7.05 The Licensee shall furnish, at its own expense, all affixed fixed
improvements, and trade fixtures (including without in any way limiting the
generality of the foregoing, cabinets, counters, displays, seating, tables,
cash registers, cameras, computer equipment and all other furniture and
equipment which it may require in to carry on each Licensee's Business
(hereinbefore and hereinafter referred to as the "Equipment"). The Licensor
may from time to time require the Licensee to refurbish or update any of
the foregoing (save and except for any cameras or other photographic
equipment which are not on
-12-
display to the public) and it is specifically agreed and understood that
the Licensor may remodel or refixture its retail sales floors from time to
time during the terms hereof, and in the event the Licensor does so, the
Licensor may require the Licensee, acting reasonably, to remodel and/or
refixture a Licensed Premise at the Licensee's expense as necessary to
reflect the remodelled or refixtured look of the Licensor.
8.00 Insurance
8.01 The Licensee shall, at its sole cost and expense, take out and keep in
full force and effect at all times during the Term, with an insurer which
is acceptable to the Licensor, a comprehensive public liability and
property damage insurance policy with limits in an amount of not less than
Two Million ($2,000,000.00) Dollars per occurrence. Such policy of
insurance shall include coverage for personal injury liability, bodily
injury liability, contractual liability, liability for damage to or losses
relating to the Licensed Premises and any channels, property, merchandise,
trade fixtures, or monies located therein from time to time, and "all-risk"
liability insurance, such coverage to include the business operations
conducted by the Licensee on the Licensed Premises. Such policy of
insurance shall be endorsed with an endorsement providing that no
cancellation of such policy will be effective unless the Licensor shall
have received at least sixty (60) days prior written notice of such
cancellation. The Licensee shall cause such policy of insurance to name the
Licensor as an additional insured and be endorsed with a waiver of
subrogation provision in favor of the Licensor. The Licensee shall cause a
certificate of insurance executed by the insurer named in the applicable
policy or policies of insurance or an insurance broker duly authorized by
such insurer to execute such certificate with respect to such policy of
insurance and endorsements, to be delivered to the Licensor concurrently
with the Licensee's execution of this Agreement and/or from time to time
following the receipt of a written request therefor from the Licensor.
8.02 The Licensee covenants and agrees to register itself and all persons
engaged for service by it under the workers compensation legislation
applicable to a Licensed Premise.
9.00 Compliance with Laws
9.01 The Licensee shall, at its sole cost and expense, promptly comply with
all statutes, regulations, ordinances, rules, laws, and other legal
stipulations of any governmental authority having jurisdiction with respect
to a Licensed Premise, pertaining to the Licensee's occupancy of, work
undertaken within, and/or business operation(s) within a Licensed Premise.
For greater certainty, the parties acknowledge and agree that the licensee
shall be solely responsible to procure and maintain at all times during the
term of this Agreement or any renewal thereof, any and all permits and/or
approvals of any governmental authority having jurisdiction with respect to
the Licensed Premise required in order to occupy, undertake improvements,
and operate its business therein, and the Licensor shall have no
obligations in this regard whatsoever.
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10.00 Confidentiality
10.01 The Licensee acknowledges and agrees that certain information made
available to it from time to time by the Licensor, including without
limiting the generality of the foregoing, information disseminated at any
management or other meeting(s) held by the Licensor at the Stores, is
confidential in nature. For the purposes of this Agreement, such
confidential information (hereinafter referred to as "Wal-Mart Confidential
Information") shall be defined as information received by the Licensee, its
agents or employees which is not generally known in the industry in which
the Licensor is engaged, or which would logically be considered
confidential and/or proprietary, or which would do the Licensor harm if
divulged, or which is marked "Confidential" or "Proprietary" by the
Licensor. Wal-Mart Confidential Information shall not either directly or
indirectly be disclosed to others or used in any way by the Licensee or
those for whom it is responsible at law, without the prior written
permission of the Licensor, which may be withheld for any reason
whatsoever. The provisions of this section shall survive and remain in full
force and effect following any termination of this Agreement and/or the
application of this Agreement to any of the Licensee's Business.
10.02 The Licensor acknowledges and agrees that certain information made
available to it from time to time by the Licensee, including without
limiting the generality of the foregoing, Gross Sales of any or all of the
Licensee's Businesses, is confidential in nature. For the purposes of this
Agreement, such confidential information (hereinafter referred to as "PCA
Confidential Information") shall be defined as information received by the
Licensor, its agents or employees which is not generally known in the
industry in which the Licensee is engaged, or which would logically be
considered confidential and/or proprietary, or which would do the Licensee
harm if divulged, or which is marked "Confidential" or "Proprietary" by the
Licensee. PCA Confidential Information shall not either directly or
indirectly be disclosed to others or used in any way by the Licensor or
those for whom it is responsible at law, without the prior written
permission of the Licensee, which may be withheld for any reason
whatsoever. Notwithstanding the foregoing, the Licensor shall be entitled
to disclose the following PCA Confidential Information to any person
without the prior consent of the Licensee if same: (i) is already available
to the public; (ii) becomes available to the public through no fault of the
Licensor; (iii) is already known to the Licensor as shown by written
records in the Licensor's possession at the time the PCA Confidential
Information was received; and/or (iv) is required to be disclosed by law
and/or enforcement of any contractual obligation owed by the Licensor to
any third person. The provisions of this section shall survive and remain
in full force and effect following any termination of this Agreement and/or
the application of this Agreement to any of the Licensee's Businesses.
11.00 Parking
11.01 The Licensee shall comply with such rules and regulations as the
Licensor may stipulate from time to time with respect to the parking of
motor vehicles in the vicinity of any Store. In addition to the foregoing,
the Licensee shall provide the license plate numbers of all automobiles of
the Licensee, its employees, agents, and workmen, which
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are to be parked in the vicinity of any Store, and such persons shall only
park in those area designated by the Licensor as employee parking from time
to time.
12.00 Defaults
12.01 For the purposes of this Agreement, any one or more of the following
events shall constitute a material default ("Material Default") of this
Agreement:
(a) failure of the Licensee to pay the License Fee, and/or Taxes on
the date that same is due in accordance with the provisions of
this Agreement;
(b) any sale by the Licensee of all or substantially all of its
assets or any sale or other transaction that results in the
Guarantor's ownership and voting control, directly or indirectly,
of less than 51% of the voting securities of the Licensee issued
and outstanding from time to time, with respect to which the
prior written consent of the Licensor has not been obtained,
which consent may be withheld for any reason whatsoever;
(c) the Licensee shall (i) generally not pay its debts as they fall
due; (ii) admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; (iii) institute or have instituted against in any
proceeding seeking (A) to adjudicate it a bankrupt or insolvent,
(B) any liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or
re-organization or relief of debtors or otherwise, or (C) the
entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part
of its assets, and in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of thirty (30)
days, or any of the actions sought in such proceeding (including
the entry of an order for relief against it or the appointment of
a receiver, trustee, custodian or other similar official for it
or for any substantial part of its assets) shall occur; or (iv)
take any corporate action to authorize any of the foregoing
actions; and/or
(d) the Licensee shall at any time operate or carry on any business
in any way similar to a Licensee's Business (including without
limitation a traveling or temporary portrait studio
program/service) in any department store and/or junior department
store in Canada (other than one operated from time to time by the
Licensor) which is located with a twenty-five (25) mile radius of
any retail discount department store operated from time to time
by the Licensor under the trade name/trade xxxx Wal-Mart:
(e) failure of the Licensee to fully comply with its obligations
unders (S)7.04.
12.02 In the event that a Material Default shall occur, the Licensor shall
be entitled at any time thereafter to terminate this Agreement or the
license created pursuant to this
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Agreement in respect of the Licensee's Business(es) in respect of which
such default shall have occurred and the application of this Agreement to
such Licensee's Business(es) (as the case may be) by the delivery of
written notice to that effect to the Licensee, and upon the delivery of
such written notice to the Licensee this Agreement or such license(s) and
the application of this Agreement to such Licensee's Business(es) (as the
same may be) shall, subject to any other provision contained herein which
is expressed to survive such termination of this Agreement, be at an end.
The parties acknowledge and agree that the occurrence of a Material Default
shall be incapable of rectification by the Licensee, save and except with
respect to a Material Default under Section 12.01(a) with respect to which
the Licensee has tendered and the Licensor has accepted full payment
together with interest as specified by this Agreement.
12.03 In the event that the Licensee shall at any time fail to fully
perform and/or comply with any provision contained in this Agreement, other
than one giving rise to a Material Default, and the Licensor shall have
delivered written notice to the Licensee requiring the rectification of
same, in the event that such rectification shall not have been made by the
date which is thirty (30) days following the date of delivery of the
aforesaid notice to the Licensee to the satisfaction of the Licensor in its
sole, absolute, and unferrered discretion, the Licensor shall be entitled
at any time thereafter and prior to the rectification by the Licensee of
any such default to terminate the license created pursuant to this
Agreement in respect of the Licensee's Business(es) in respect of which
such default shall have occurred and the application of this Agreement to
such Licensee's Business(es) by the delivery of written notice to that
effect to the Licensee, and upon the delivery of such written notice to the
Licensee such license(s) and the application of this Agreement to such
Licensee's Business(es) shall, subject to any other provision contained
herein which is expressed to survive such termination of this Agreement, be
at an end.
12.04 The Licensee acknowledges and agrees that the Licensor may be a
tenant of a Store. In the event that: (i) the Licensor's right to occupancy
of a Store is terminated for any reason whatsoever, (ii) damage is caused
to the Store which necessitates repairs taking in excess of sixty (60) days
within which to restore the Store to a condition capable of operation as a
retail establishment, and/or (iii) the Licensor elects to cease operation
of a retail establishment within the Store, this Agreement shall in turn
automatically be terminated and of no further force or effect with respect
to such Store and the applicable Licensee's Business, subject to the
Licensee paying to the Licensor the Licence Fee and Taxes and other monies
that are owned to the Licensor hereunder in respect of such Licensee's
Business to such date of termination, and notwithstanding any other
provision of this Agreement, the Licensor shall bear no responsibility or
liability to the Licensee with respect to any damage or loss which the
Licensee may occasion by virtue of such termination of this Agreement with
respect to such Store and Licensee's Business.
12.05 Notwithstanding anything herein to the contrary and in addition to
any other remedy available to the Licensor, it is specifically agreed
between the parties that if at any time the Licensee's quality of
merchandise, method of operation, merchandise variety, and/or financial
stability or solvency is not reasonably acceptable to the Licensor with
respect to any of the Licensee's Businesses, then the Licensor may give the
Licensee
-16-
written notice to that effect, which notice shall describe the nature of
such deficiencies. The Licensee shall have thirty (30) days following the
receipt by it of such notice within which to correct such deficiencies. If
such deficiencies are not satisfactorily corrected within such thirty (30)
day period in the sole absolute and unfettered discretion of the Licensor,
it may unilaterally terminate the license created pursuant to this
Agreement in respect of such Licensee's Business(es) and the application of
this Agreement to such Licensee's Business(es) by the delivery at any time
thereafter of ten (10) further days written notice to the Licensee to that
effect, and upon the expiration of such ten (10) day period, such
license(s) and the application of this Agreement to such Licensee's
Business(es) shall, subject to any other provision contained herein which
is expressed to survive such termination of this Agreement, be at an end.
12.06 Upon any termination of this Agreement in its entirety or with
respect to one of the Licensee's Businesses, the Licensee shall, at its
sole cost and expense, forthwith following the date that such termination
shall be effective:
(a) immediately return all store badges and security identification
which may be in the possession of the Licensee;
(b) immediately discontinue its use of the applicable Licensed
Premise and remove any and all of its merchandise, chattels,
trade fixtures, and other property, from such Licensed Premise;
(c) remove any and all Signs in or about the applicable Licensed
Premise;
(d) repair any and all damage or alterations caused to the physical
installations in the Store to the standard and condition that
existed immediately prior to the granting of the license in
respect of such Licensee's Business; and
(e) deliver to the Licensor any and all materials with respect to
such Licensee's Business containing or bearing the Licensor's
trademark/trade name "Wal-Mart" whether alone or in conjunction
with any other name or xxxx.
The Licensor retains the right to perform any work necessary to remove the
merchandise, chattels, trade fixtures, and/or any other property of the
Licensee within the Licensed Premise, and xxxx the Licensee for any and all
expenses the Licensor may incur in such process and the Licensee shall
forthwith pay same. Notwithstanding anything herein contained, in the event
that the Licensee fails to comply with (S) 12.06(b) within twenty-one (21)
days following the date of the termination of this Agreement in its
entirety or with respect to a Licensee's Business (as the case may be), the
Licensor shall be entitled to retain for its own use, sell, or otherwise
deal with such merchandise, chattels, trade fixtures, and/or any other
property of the Licensee located therein, without notice and without any
liability with respect thereto to the Licensee or any other person. The
Licensor shall be entitled to set off any monies owing to it pursuant to
this provision which are not paid in accordance with this provision against
any monies it may then or in
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the future owe to the Licensee. The provisions of this Section 12.06 shall
survive the termination of this Agreement.
12.07 In the event that the Gross Sales in respect of a Licensee's Business
shall be less than $90,000 during the first year of the Term for such
Licensee's Business, $99,000 during the second year of the Term for such
Licensee's Business, $108,900 during the third year of the term for such
Licensee's Business, $ 119,800 during the fourth year of the Term for such
Licensee's Business, and/or $ 131,780 during the fifth year of the Term for
such Licensee's Business or any year thereafter, the Licensor, may
unilaterally terminate the license created pursuant to this Agreement in
respect of such Licensee's Business and the application of this Agreement
to such Licensee's Business(es) by the delivery at any time thereafter of
ninety (90) days written notice to the Licensee to that effect, and upon
the expiration of such ninety (90) day period, such license and the
application of this Agreement to such Licensee's Business shall, subject to
any other provision contained herein which is expressed to survive such
termination of this Agreement, be at an end. In the event that on any
annual anniversary of the Commencement Date set forth for those Licensee's
Businesses listed in Schedule "A" (the "Anniversary Date"), the Gross Sales
in respect of five (5%) percent or greater of the Licensee's Businesses
described in Schedule "A" and Schedule "B" for the immediately preceding
year are less than $ 90,000 (such Licensee's Businesses being herein
referred to as the "Non-Performing Stores"), the Licensee, may unilaterally
terminate the license created pursuant to this Agreement in respect of the
Non-Performing Stores and the application of this Agreement to any such
Non-Performing Store(s) by the delivery within ten (10) days following the
Anniversary Date of ninety (90) days written notice to the Licensor to that
effect, and upon the expiration of such ninety (90) day period, such
license and the application of this Agreement to such Non-Performing Stores
shall, subject to any other provision contained herein which is expressed
to survive such termination of this Agreement, be at an end. For the
purposes of the foregoing sentence, the Gross Sales in respect of any
Licensee's Business that has not been in operation for a full one year
period leading up to the Anniversary Date shall be extrapolated for a one
year period by multiplying the Gross Sales for same to the Anniversary Date
by 365 and dividing that product by the number of days from and including
such Licensee's Business's Commencement Date to the Anniversary Date.
12.08 In the event that the Licensor shall at any time be entitled to or
already have terminated the application of this Agreement and the licenses
created pursuant to this Agreement in respect of thirty-three (33%) percent
or more of the number of Licensee's Businesses described in Schedule "A"
and Schedule "B", the Licensor, may unilaterally terminate the license
created pursuant to this Agreement in respect of such Licensee's Business
and the application of this Agreement to such Licensee's Business(es) by
the delivery at any time thereafter of one hundred and eighty (180) days
written notice to the Licensee to that effect, and upon the expiration of
such one hundred and eighty (180) day period, such license and the
application of this Agreement to such Licensee's Business shall, subject to
any other provision contained herein which is expressed to survive such
termination of this Agreement, be at an end.
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13.00 Indemnity
13.01 The Licensee hereby agrees to indemnify and save the Licensor, its
directors, officers, employees, and agents, harmless from and against any
and all claims, damages, losses, liabilities, demands, suits, judgments,
causes of action, legal proceedings, penalties or other sanctions and any
and all costs and expenses arising in connection therewith including legal
fees and disbursements on a solicitor and on his own client basis
(including, without limitation, all such legal fees and disbursements in
connection with any and all appeals) which may, either directly or
indirectly, in any way result from or arise out of or be in relation to the
Licensee's use and/or occupation of the Licensed Premises, the Licensee's
business operations, and/or this Agreement (save and except as a result of
the negligence and/or recklessness of the Licensor and/or its employees),
including, without limiting the generality of the foregoing, arising by
reason of or in connection with:
(a) any breach, violation, non-observance or non-performance by the
Licensee or by any of its servants, employees, agents, invitees
or any other persons for whom it is responsible, of any of the
terms or conditions contained in this Agreement;
(b) any damage to property whether or not owned by the Licensor
howsoever occasioned;
(c) any damage, theft, or other loss in any way related to or in
respect of any property, chattels, fixtures, merchandise and/or
monies of the Licensee located from time to time in or about a
Licensed Premise;
(d) any illness, disease or injury to any person or persons caused
either directly or indirectly by the carrying on of the
Licensee's Business(es), including death resulting at any time
therefrom;
(e) any negligent act(s) or omission(s) of the Licensee, or anyone
for whose acts it may be responsible at law and/or in equity;
(f) the occurrence of any Material Default; and/or
(g) any legal expenses incurred by the Licensor with respect to the
exercise of any of its rights under this Agreement with respect
to or following a default hereunder by the licensee, on a
solicitor and client basis.
The provisions of this section shall survive and remain in full force and
effect following any termination of this Agreement and/or the application
of this Agreement to any Licensee's Business.
14.00 Taxes
14.01 Save and except as herein provided, the Licensee shall be solely
responsible for bearing the cost of and paying any and all license fees and
taxes, whether presently
-19-
existing or created during the Term, including without in any way limiting
the generality of the foregoing, realty, sales, goods and services, value
added, business and corporate taxes, applicable to the Licensee's
Businesses and/or the Licensed Premises. Notwithstanding the foregoing,
with respect to realty taxes, the parties acknowledge and agree that the
Licensor shall bear the cost of and pay same with respect to the Licensed
Premises, but only to the amounts applicable to each Licensed Premise as at
their respective Commencement Dates together with any increases which are
not attributable to the Licensee's Business and/or the Licensed Premises.
If anything pertaining to this Agreement and/or the use of a Licensed
Premise by the Licensee causes the assessed value and/or realty taxes or
other taxes payable, whether directly or indirectly, by the Licensor to
increase, the Licensee shall forthwith reimburse the full amount of any
increase in such realty or other taxes to the Licensor following receipt by
the Licensee of a written demand therefor from the Licensor. The Licensor
shall be entitled to set off any monies owing to it pursuant to this
provision which are not paid in accordance with this provision against any
monies it may then or in the future owe to the Licensee. In the event that
any such taxes are billed to the Licensor, then the Licensee covenants and
agrees to pay the same to the Licensor forthwith following receipt of a
written demand therefor from the Licensor.
14.02 In the event that a Licensed Premise is separately assessed from the
balance of the Store within which it is located so that its assessed value
per square foot becomes greater than two (2) times that for the balance of
the Store, and the Licensee has undertaken and exhausted all possible
appeals of such assessment and/or the quantum of such assessment without
success in reducing such assessment beneath the aforesaid threshold, the
Licensee may unilaterally terminate the license created pursuant to this
Agreement in respect of such Licensee's Business and the application of
this Agreement to such Licensee's Business(es) by the delivery at any time
thereafter of thirty (30) days written notice to the Licensor to that
effect, and upon the expiration of such thirty (30) day period, such
license and the application of this Agreement to such Licensee's Business
shall, subject to any other provision contained herein which is expressed
to survive such termination of this Agreement, be at an end.
15.00 Utilities
15.01 The Licensor shall provide lighting, electrical, heating,
air-conditioning, and water service (collectively the "Utilities"), and
janitorial service as is necessary to operate the Licensee's Business, and
shall construct to each Licensed Premise rough-ins for the Licensee to
connect its equipment and machinery to the Utilities. The Licensee
covenants and agrees to reimburse the Licensor for the cost of any physical
construction, installations, and/or alterations to a Store and/or its
service systems made by the Licensor in order to make the Utilities and
rough-ins available at each Licensed Premise. Notwithstanding the
foregoing, the Licensor shall not be responsible for any temporary
interruption in such services or for any damage to the Licensee's property
cause by any temporary interruption in such services or for any damage to
the Licensee's property caused by any temporary interruption in any of such
services, power surge, electrical failure, or other mechanical problem.
-20-
15.02 If the Licensee wants a separate telephone line to a Licensed
Premises, Licensee shall be responsible for its telephone equipment,
installation and charges. In the event Licensor installs and provides
telephone equipment to Licensee in any Licensed Premise at Licensee's
request, Licensee shall reimburse Licensor for the costs of said
installation and equipment. The Licensee may list such telephone number in
any telephone directory using the Trade Name.
16.00 Maintenance
16.01 During such times as the Licensee carries on a Licensee's Business,
it shall keep, operate and maintain the applicable Licensed Premise in a
clean and sanitary condition and shall leave same in a reasonably neat and
tidy condition after using same, including without limitation, following
the termination of any licence with respect to such Licensee's Business.
17.00 Signs and Advertising
17.01 The Licensee shall not paint, display, install, erect or affix any
sign, fixture, advertisement, notice, lettering or decoration (a "Sign")
within the Licensed Premises without the prior written consent of the
Licensor which may be withheld for any reason whatsoever. In addition to
the foregoing and without in any way limiting same, any Sign displayed,
installed, erected or affixed by the Licensee within or about a Licensed
Premise shall be professionally prepared, type set and manufactured, and
shall not include any hand written text, script, logos, and/or designs. Any
Sign displayed, installed erected or affixed by the Licensee in
contravention of this provision may be removed by the Licensor at any time
at the sole cost and expense of the Licensee, and the Licensee shall
forthwith reimburse the Licensor for the cost of same following receipt of
a written demand therefor from the Licensor.
17.02 The Licensee shall, subject to the Licensor's approval as required by
(S)17.01, at its sole cost and expense provide and install such reasonable
number of signs as the Licensor shall require from time to time in each
Licensed Premise in a conspicuous location in full view of all customers at
all times the Store is open for business. Letters, numbers, background
color and all other aspects of such signs shall be stipulated by the
Licensor acting reasonably. Such signage is to be located in the Licensed
Premises and to compliment the surrounding decor.
18.00 Notices
18.01 Any notice or other communication required or permitted to be given
by this Agreement shall be in writing and shall be effectively given if:
(a) delivered personally;
(b) sent by prepaid courier services;
(c) sent by registered mail; or
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(d) sent by prepaid telecopier, telex or other similar means of
electronic communication and confirmed by mailing the original
document so sent by prepaid mail on the same or following day,
in the case of notice to:
(a) in the case of notice to the Licensor at:
00 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Specialty Division Marketing Manager and Xxx XxxXxxxxx
Telecopier No. (000) 000-0000
(b) in case of notice to the Licensee at:
000 Xxxxxxxx-Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx
Xxxxxx Xxxxxx of America
28105
Attention: Xxxx Xxxxxx
Telecopier No. (000) 000-0000
or at such other address as the party to whom such notice or other
communication is to be given shall have advised the party giving same in
the manner provided in this section. Any notice or other communication
delivered personally or by prepaid courier service shall be deemed to have
been given and received on the day it is so delivered at such address,
provided that if such day is not a Business Day such notice or other
communication shall be deemed to have been given and received on the next
following Business Day. Any notice or other communication sent by
registered mail shall be deemed to have been given and received on the
fifth Business Day following the date of mailing. Any notice or other
communication transmitted by telecopier, telex or other similar form of
electronic communication shall be deemed given and received on the day of
its transmission provided that such day is a Business Day and such
transmission is completed before 5:00 p.m. on such day, failing which such
notice or other communication shall be deemed given and received on the
first Business Day after its transmission. Regardless of the foregoing, if
there is a mail stoppage or labour dispute or threatened labour dispute
which has affected or could affect normal mail delivery by the applicable
postal service, then no notice or other communication may be delivered by
registered mail. If there has been a mail stoppage and if a party sends a
notice or other communication by telecopier, telex or other similar means
of electronic communication, such party shall be relieved from the
obligation to mail the original document in accordance with this section.
-22-
19.00 No Liability
19.01 The Licensor shall not be liable or responsible in any way for any
death or injury arising from or out of any occurrence in, upon, at, or
relating to the Licensee's Businesses and/or the Licensed Premises, or for
any loss of or damage or injury to any property, including without
limitation the merchandise, chattels, trade fixtures, and/or any other
property located therein from time to time, belonging to the Licensee or
its employees or to any other person while such property is in the Licensed
Premises, whether or not such property has been entrusted to employees of
the Licensor, or for any consequential or economic damages, loss or injury
or for damages for personal discomfort or inconvenience however caused
(including, without limitation, by negligence, fundamental breach of
contract or the breach of a fundamental term of any contract), save and
except if any of same are the result of the negligence and/or recklessness
of the Licensor or any of its employees. All merchandise, chattels, trade
fixtures, and/or any other property of the Licensee kept or stored on or in
the Licensed Premises shall be so kept or stored at the risk of the
Licensee only and the Licensee shall hold the Licensor harmless from and
against any claims arising out of damage to same, including, but not
limited to, any subrogation claims by the Licensee's insurers.
20.00 No Waiver
20.01 No condoning or waiver by the Licensor of any default or breach by
the Licensee at any time or times in respect of any of the obligations,
terms, covenants and conditions contained in this Agreement to be performed
or observed by the Licensee shall be deemed or construed to operate as a
waiver of the Licensor's rights under this Agreement in respect of any
continuing or subsequent default or breach nor so as to defeat or affect in
any way the rights and remedies of the Licensor under this Agreement in
respect of any such continuing or subsequent default or breach. Unless
expressly waived in writing, the failure of the Licensor to insist in any
one or more cases upon the strict performance of any of the obligations,
terms, covenants and conditions contained in this Agreement to be performed
or observed by the Licensee shall not be deemed or construed to operate as
a waiver for the future strict performance or observance of such
agreements, terms, covenants and conditions.
21.00 Relationship and Assignment
21.01 The rights granted to the Licensee hereby are personal only and
create no interest or right in the Store and/or the leasehold interest of
the Licensor in the Store. This Agreement shall not create or confer upon
the parties hereto, in any way or for any purpose, any relationship except
that of contracting parties, and in particular does not create a
partnership, a joint venture or a landlord and tenant relationship between
the Licensor and the Licensee or an employer-employee relationship between
the Licensor and the employees of and other persons rendering services to
the Licensee.
21.02 The Licensee shall not assign, transfer or set over this Agreement or
any part thereof, any rights therein or thereto, and/or in any way permit
anyone other than itself to carry on the Licensee's Business within a
Licensed Premise, without having obtained the
-23-
prior written consent of the Licensor, which consent may be withheld for
any reason whatsoever. In the event that the Licensor sells its entire
business operation at any Store to any third person or otherwise transfers
its entire right of possession in a Store to a third person, it shall
forthwith deliver written notice to the Licensee of that fact and upon the
expiration of thirty (30) days following the later of the date of delivery
of such notice to the Licensee and the date of completion of such
transaction, the license granted to the Licensee and the application of
this Agreement with respect to the Licensee's Business within such Store
shall, subject to any other provision contained herein which is expressed
to survive such termination of this Agreement, be at an end.
22.00 Entire Agreement
22.01 This Agreement continues the entire agreement between the parties
regarding the Licensee's use of the Licensed Premises. It is understood and
agreed that there are no agreements, conditions, warranties, terms,
representations or arrangements, oral or written, statutory or otherwise,
other than those contained herein, and that all prior conversations,
understandings, arrangements, statements, communications or agreements,
oral or written, with respect to this Agreement are hereby superseded.
23.00 Governing Law
23.01 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable
therein.
24.00 Time of the Essence
24.01 Time is of the essence of this Agreement and every part hereof.
25.00 Interpretation
25.01 This Agreement shall be read with all changes in gender and number
required by the context. The headings contained in this Agreement are for
convenience of reference only, and shall not affect the interpretation of
this Agreement.
26.00 Payments in Canadian Currency
26.01 All references herein to currency are to Canadian currency and all
payments shall be made in Canadian currency.
27.00 Severability
27.01 If for any reason whatsoever any term, covenant or condition of this
Agreement, or the application thereof to any person, firm or corporation or
circumstance, is to any extent held or rendered invalid, unenforceable or
illegal, then such term, covenant or condition:
(a) shall be deemed to be independent of the remainder of this
Agreement and to be severable and divisible therefrom, and its
invalidity, unenforceability
-24-
or illegality shall not affect, impair or invalidate the
remainder of this Agreement or any part thereof; and
(b) continues to be applicable to and enforceable to the fullest
extent permitted by law against any person and circumstance
other than those as to which it has been held or rendered
invalid, unenforceable or illegal.
28.00 Force Majeure
28.01 Notwithstanding any other provisions of this Agreement, whenever and
to the extent that either party is unable to fulfill or is delayed or
restricted in the fulfillment of any of its obligations under this
Agreement by reason of any of the following impediments:
1. strike;
2. lockout;
3. war or acts of military authority;
4. rebellion or civil commotion;
5. material or labour shortage not within the control of such
Owners;
6. fire, explosion;
7. flood, wind, water, earthquake or other casualty;
8. any applicable lawful statute, by-law, ordinance, regulation or
order;
9. acts of God; or
10. any act of the landlord of the store to terminate or deny
possession of the Store to the Licensor, whether temporary or
not;
not caused by the default, act, or omission of the other party and not
avoidable or surmountable by the exercise of reasonable effort or foresight
by it (save and except with reference to item 10 above for which the
Licensor shall have no such obligations whatsoever), then so long as any
such impediment exists, such party shall be temporarily relieved from the
fulfillment of such obligation and the other party shall not be entitled to
compensation for any damage, inconvenience, nuisance or discomfort thereby
occasioned and, to the extent necessitated thereby, there shall be a
postponement of any deadline, compliance with which would be otherwise
adversely affected by such impediment, provided that at the expiration of
such temporary relief, such party shall forthwith proceed with fulfillment
of such obligation.
-25-
29.00 Encumbrance
29.01 The licensee shall not charge, mortgage, hypothecate, pledge, give a
security interest in, or otherwise encumber this Agreement and/or the
alterations, additions, improvements and fixtures (save and except for
trade fixtures, unattached readily movable furniture and office equipment)
installed from time to time by the Licensee within any Licensed Premise
without the prior written consent of the Licensor, which consent may be
withheld for any reason whatsoever.
30.00 Schedules
30.01 The following Schedules whether attached hereto or acknowledged as a
separate document shall form a part of this Agreement:
Schedule "A" - License Schedules;
Schedule "B" - Form of New Store License Schedule;
Schedule "C" - Form of Sales Report;
Schedule "D" - Days and Hours of Operation.
31.00 Successors and Assigns
31.01 Subject to any restrictions herein contained, this Agreement shall
enure to the benefit of and be binding upon the parties and their
respective successors and permitted assigns.
32.00 Guarantee
32.01 The Guarantor covenants and agrees with the Licensor to guarantee the
performance of each and every one of the Licensee's obligations under this
Agreement, including, without in any way limiting the generality of the
foregoing, payment of the Licence Fee and Taxes, and further covenants and
agrees to fully perform each and every obligation of the Licensee contained
in this Agreement in the event that the Licensee fails to do so. The
obligations of the Licensee and the Guarantor under this Agreement shall be
joint and several.
33.00 Language
33.01 The parties acknowledge and agree that they have required that this
Agreement be prepared in the English language. Les parties reconnaissent
avoir exige que les presentes soient redigees en langue anglaise.
-26-
IN WITNESS WHEREOF the parties have executed this Agreement this 9th day of
February, 1996, with effect as of the date hereinabove set forth.
WAL-MART CANADA INC.
Per: /s/ J. Xxxxxxx Xxxxxxxxxx
----------------------------------------
J. Xxxxxxx Xxxxxxxxxx - Vice President
PCA PHOTO CORPORATION OF CANADA, INC.
Per: /s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx - President
PCA INTERNATIONAL, INC.
Per: /s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx - President
-27-
SCHEDULE "A"
LICENCE SCHEDULE
The Licensor does hereby grant a non-exclusive license to the Licence and
the Licensee does hereby accept such licence in accordance with the Licence
Agreement between the parties made the 9/th/ day of February, 1996 to carry on a
Licensee's Business in or about each of the following Wal-Mart stores (each of
which shall be a "Store"), each of which shall have a Commencement Date in
respect of the Licensee's Business located in or about the applicable Store as
set forth adjacent to the applicable store (for greater certainty, the format
below show the Wal-Mart Store #, followed by its municipal address, and the
Commencement Date applicable to the Licensee's Business within the Store):
3002
Centre Regional Manicouagan, 000 Xxxx. Xxxxxxx, Xxxx-Xxxxxx, XX X0X 0X0
April 22, 1996
3005
Brantford Plaza, Xxxx Xxxxxxx Rd., (24 HWY), Xxxxxxxxx, XX X0X 0X0
April 22, 1996
3008
Lougheed Mall, 0000 Xxxxxx Xxx., Xxx 000, Xxxxxxx, X.X. X0X IN5
April 22, 1996
3009
Xxxxxxxxx Plaza, 0000 00/xx/ Xxxxxx X., Xxxxxxx, XX X0X IS3
April 22, 1996
3010
Xxxxxxx Mall SC., 0000 Xxxxxxx Xxxxx, Xxxxxxx, XX X0X 0X0
April 22, 1996
3011
Northland Village SC., 0000 Xxxxxxxxx Xxxxx XX, Xxxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxxxx Xxxx, 000-00xx Xxx., XX, Xxxxxxx, XX X0X 0X0
April 22, 1996
3019
West Oak Mill, 00000 Xxxxx Xxxxxx Xxx, Xxxxxxxxxx, XX X0X 0X0
April 22, 0000
-00-
0000
Xxxxxxxxx Xxxx XX., 000 Xxxxxxxxx Xxx., Xxxxxxxx, XX X0X 0X0
April 22, 1996
3023
Les Galeries Xxxxxxxx, 000 Xxxx. Xx. Xxxxxx, Xxxxxxxxxxxxx, XX X0X 0X0
April 22, 1996
3026
# 1 Capilano SC, 00/xx/ Xx. & 000 Xxx., Xxxxxxxx, XX X0X 0X0
April 22, 1996
3027
000 Xxxxxxxx Xxxxxx, 000/xx/ Xx. & Xxxxxx Xxxx Xx., Xxxxxxxx, XX X0X 0X0
April 22, 1996
3029
Heritage Mall, 0000 000/xx/ Xxxxxx, Xxxxxxxx, XX X0X 0X0 April 22, 1996
3036
Exploits Valley Mall, 00 Xxxxxx Xxx., Xxxxx Xxxxx Xxxxxxx, XXXX X0X 0X0
April 22, 1996
3039
Les Galeries Joliette, 0000 Xxxx. Xxxxxxxxx, Xxxxxxxx, XX X0X 0X0
April 22, 1996
3042
Orchard Park SC., 0000 Xxxxxx Xxx., Xxxxxxx, XX X0X 0X0
April 22, 1996
3043
Frontenac Mall SC., 000 Xxxx Xx., Xxxxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxxxx Xxxx Xxxx, 0000 Xxxxxxxx, Xxxxxxxxx, XX X0X 0X0
April 22, 1996
3049
Argyle Shopping Mall, 0000 Xxxxxx Xx. X., Xxxxxx, XX X0X 0X0
April 22, 1996
3050
Oakridge Makk, 0000 Xxxxxx Xx. X., Xxxxxx, XX X0X 0X0
April 22, 0000
-00-
0000
Xxxxxx Xxx XX., 000 Xxxx Xxxxxx Xx., Xxxxxxxxxxx, XX X0X 0X0
April 22, 1996
3060
Chako-Mika Mall, 000 Xxxxxxxx Xx., Xxxxxx, XX X0X 0X0
April 22, 0000
0000
Xxxxx X'Xxxxxxx XX., 000 Xxxxx X'Xxxxxxx Xxxxx, Xxxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxxxx Xxxx XX., 0000 00/xx/ Xxx., Xxx Xxxx, XX X0X 0X0
April 22, 1996
3076
Northgate SC., 000 Xxxxx Xxxxxx Xx., Xxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxxx Xxxx, Xxxxxx Xx., Xxxxxx, XX X0X 0X0
April 22, 1996
3086
Plaza Rock Forest, 0000 Xxxx. Xxxxxxx, Xxxx Xxxxxx, XX X0X 0X0
April 22, 1996
3090
Les Galeries Richelieu, 000 Xxxx. Xx Xxxxxxxxx, Xx. Xxxx, XX 0XX 0X0
April 22, 1996
3091
Loch Lomond SC., 00 XxXxxxxx Xx., Xx. Xxxx, XX X0X 0X0
April 22, 1996
3098
Guildwood Town SC., 0000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxx Xxxxxx SC., Xxxxxxxx xx Xxx 0&0, Xxxxxx, XX X0X 0X0
April 22, 1996
3105
North Park SC., 0000 Xxxxxxxx Xxx. X., Xxxxxxx, XX X0X 0X0
April 22, 1996
-30-
3106
Dufferin Mall, 000 Xxxxxxxx Xx., Xxxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxx Xxxx SC., Xxxxxxxx Xx. & Xxx #0, Xxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxxxxx Xxxxx, Xxxxxxx Xxx., Xxxxxxx, XX X0X 0X0
April 22, 1996
3115
Eastown SC., 0000 Xxxxxx Xx., Xxxxxxx, XX X0X 0X0
April 22, 1996
3118
Garden City Square, 000 Xxxxx Xxx., Xxxxxxxx, XX X0X 0X0
April 22, 1996
0000
Xxxx'x Xxx #00 & Xxxxxxxxxx Xx., Xxxxxxxxxx, XX X0X 0X0
April 22, 1996
3123
00 Xxxxxx Xxxx Xxxxx, Xxxxxx, XX X0X 0X0
April 22, 1996
3124
000 Xxxxxxxx Xxx., Xxxxxxx Xxx, XX X0X 0X0
April 22, 1996
3125
000 Xxx Xxxxxxx Xxxxx, Xxxxxxxx, XX X0X 0X0
April 22, 1996
3130
00 Xxxxxx Xxxx Xxxxx, Xxxxxxxx, XX X0X 0X0
April 22, 1996
The licences created pursuant to this Licence Schedule shall commence on the
Commencement Date and, subject to earlier termination as provided for in the
Agreement, continue in effect for each Licensee's Business for a term ending at
12:00 midnight on the day which is five (5) years following the Commencement
Date for such Licensee's Business (the "Term").
-31-
IN WITNESS WHEREOF the parties have executed this Licence Schedule this
9/th/ day of February, 1996.
WAL-MART CANADA INC.
Per: /s/ J. Xxxxxxx Xxxxxxxxxx c/s
------------------------------------
J. Xxxxxxx Xxxxxxxxxx - Vice President
PCA PHOTO CORPORATION OF CANADA, INC.
Per: /s/ Xxxx Xxxxxx c/s
------------------------------------
Xxxx Xxxxxx - President
-32-
SCHEDULE "B"
NEW STORE LICENCE SCHEDULE
WHEREAS Wal-Mart Canada Inc. (the "Licensor") and PCA Photo Corporation of
Canada, Inc. (the "Licence") entered into a License Agreement dated the 9th
day of February, 1996 (the "Licence Agreement");
AND WHEREAS the Licensor and the Licensee desire that a further retail
store of the Licensor be made subject to the Licence Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants, conditions and agreements herein contained, other good and
valuable consideration and the sum of Five Dollars ($5.00) paid by each
party to the other (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto do hereby covenant and agree, each with
the other, as follows:
All of the capitalized terms used in this New Store License Schedule shall
have the meanings ascribed to them in the License Agreement unless
otherwise defined.
The Licensor does hereby grant a non-exclusive license to the Licensee and
the Licensee does hereby accept such license in accordance with the License
Agreement between the parties made the * day of *, 199* to carry on a
Licensee's Business in or about Wal-Mart Store # * located at * (the
"Store").
The Commencement Date in respect of the Licensee's Business located in or
about this Store shall be *.
The license created pursuant to this New Store License Schedule shall
commence on the Commencement Date and, subject to earlier termination as
provided for in the License Agreement, continue in effect for a term ending
at 12:00 midnight on the day which is five (5) years following the
Commencement Date for such Licensee's Business (the "Term").
Upon the execution of this New Store License Schedule, the Licensee's
Business located in or about this Store shall become subject to the terms
of the License Agreement.
IN WITNESS WHEREOF the parties have executed this License Schedule
this * day of *, 199*.
WAL-MART CANADA INC.
Per: _______________________c/s
*
-33-
PCA PHOTO CORPORATION OF
CANADA, INC.
Per:_______________________________ c/s
Xxxx Xxxxxx - President
-34-
SCHEDULE C
SALES REPORT
All Sections
Sales thru: 3/15/96 (week 7)
# Customers Average
Locations Gross Sales Photographed Purchase License G.S.T.
------------------ ------------------ ------------------
Week Operating Budget Actual Budget Actual Budget Actual Fee Taxes
---------- ----------- -------- -------- -------- -------- -------- -------- -------- -------
1
2
3
4
5
6
7
---------- -------- -------- -------- -------- -------- -------- -------- -------
Cumulative
========== ======== ======== ======== ======== ======== ======== ======== =======
-35-
SCHEDULE C
SALES REPORT
Store # _______________
Sales thru: 3/15/96 (week 7)
# Customers Average
Locations Gross Sales Photographed Purchase License G.S.T.
------------------ ------------------ ------------------
Week Operating Budget Actual Budget Actual Budget Actual Fee Taxes
---------- ----------- -------- -------- -------- -------- -------- -------- -------- -------
1
2
3
4
5
6
7
---------- -------- -------- -------- -------- -------- -------- -------- -------
Cumulative
========== ======== ======== ======== ======== ======== ======== ======== =======
-36-
SCHEDULE "D"
License Agreement
Days and Hours of Operation
In accordance with Section 5.02 of the License Agreement, the following
sets forth the Days and Hours of Operation for the Licensee's Business:
Days of Operation:
Licensee's Business will operate seven (7) days a week, Monday through
Sunday, excluding all Canadian holidays whereby the Licensor's retail
establishment is closed due to the holiday.
Hours of Operation:
Monday through Friday:
All Licensee's Businesses will operate on Monday through Friday
according to the following schedule and based on the preference of the
Licensor on a region by region or province by province basis, studio
hours as follows:
a) Open at 10:00 AM and operate through 2:00 PM. From 2:00 PM
to 3:00 PM, there will be posted one (1) hour lunch break in
all studios. Operations in all studios will continue from
3:00 PM to 7:00 PM for total operating hours Monday through
Friday in all studios of eight (8) hours. Operating hours
and all lunch hours will be prominently posted in all
studios and in all advertising and in-store merchandising
materials.
or
b) Open at 11:00 AM and operate through 3:00 PM. From 3:00 PM
to 4:00 PM, there will be posted one (1) hour lunch break in
all studios. Operations in all studios will continue from
4:00 PM to 8:00 PM for total operating hours Monday through
Friday in all studios of eight (8) hours. Operating hours
and all lunch hours will be prominently posted in all
studios and in all advertising and in-store merchandising
materials.
Saturday:
All studios will open at 9:00 AM and operate through 1:30 PM.
From 1:30 PM to 2:30 PM, there will be posted one (1) hour lunch
break in all studios. Operations in all studios will continue
from 2:30 PM to 8:00 PM for total operating hours on Saturday in
all studios of ten (10) hours.
-37-
Within the framework of the ten (10) operating hours, Licensee
will vary the hours of operation on a region by region and/or
province by province basis as the Licensor determines to most
closely match the Licensor store hours of operation. Operating
hours and all lunch hours will be prominently posted in all
studios and in all advertising and in-store merchandising
materials.
Sunday:
All studios will open at 10:00 AM and operate through 2:00 PM.
From 2:00 PM to 3:00 PM, there will be posted one (1) hour lunch
break in all studios. Operations in all studios will continue
from 3:00 PM to 7:00 PM for total operating hour on Sunday of
eight (8) hours. Within the framework of the eight (8) operating
hours, Licensee will vary the hours of operation on a region by
region and/or province by province basis as the Licensor
determines to most closely match the Licensor store hours of
operation. If any of the Licensor stores are open for business
less than nine (9) hours on a Sunday, Licensee's hours of
operation will coincide with the posted store hours in that
situation. Operating hours and all lunch hours will be
prominently posted in all studios and in all advertising and
in-store merchandising materials.
Christmas Season:
During the eight-week holiday season, from approximately November
/1/st through December 25/th/, Licensee will extend the hours of
operation on Monday through Friday and Sunday to ten (10) hours per
day (from eight [8] hours per day) in consideration of higher traffic
and extended store hours by the Licensor. During this eight-week
period, operating hours for all seven days of the week will be from
9:00 AM to 8:00 PM with a posted one (1) hour lunch break from 1:30 PM
to 2:30 PM. Within the framework of the ten (10) operating hours per
day, Licensee will vary the hours of operation on a region by region
and/or province by province basis as the Licensor determines to most
closely match the Licensor store hours of operation. Operating hours
and all lunch hours will be prominently posted in all studios and in
all advertising and in-store merchandising materials.
