Master Licensing Agreement - Starbucks Corp. and ARAMARK Food and Services Group Inc.
STARBUCKS CORPORATION AMENDED AND RESTATED MASTER LICENSING AGREEMENT THIS AMENDED AND RESTATED MASTER LICENSING AGREEMENT (this "Agreement") is made and entered into this 7th day of May, 1996, by and between Starbucks Corporation, a Washington corporation ("STARBUCKS"), and ARAMARK Food and Services Group, Inc., a Delaware corporation ("ARAMARK"). RECITALS A. STARBUCKS operates specialty retail stores engaged in the sale of coffee, tea, and espresso beverages, whole bean coffee, related hardware items, and selected food items, each of which operates under the name "Starbucks Coffee." B. ARAMARK and STARBUCKS desire to enter into this Agreement to provide ARAMARK with the rights to operate a number of Starbucks Stores at businesses, industrial sites, health care locations, colleges, universities and other locations in the United States designated on each Exhibit A, which is executed by STARBUCKS and ARAMARK or any ARAMARK (as defined hereinafter) from time to time. AGREEMENT NOW, THEREFORE, in consideration of the above recitals, of the following terms and conditions, and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: DEFINITIONS The following terms used herein shall have the following definitions: Agreement. "Agreement" shall mean this Agreement executed on the date first set forth above between STARBUCKS and ARAMARK, as defined in the preamble hereto. Confidential Information. "Confidential Information" shall have the meaning set forth in Section 5.11.1. Commencement Date. "Commencement Date" shall have the meaning set forth in Section 2.2. Effective Date. "Effective Date" shall have the meaning set forth in Section 7.16. Gross Revenue. "Gross Revenue" shall have meaning set forth in Section 2.2. Initial and Advanced Training Programs. STARBUCKS' "Initial Training Program" shall mean the program developed by and presented by STARBUCKS that trains employees concerning coffee and its preparation and in the operational aspects of Starbucks Stores. STARBUCKS' "Advanced Training Program" shall mean the program developed by and presented by STARBUCKS that trains managers in the operational aspects and managerial aspects of the Starbucks System and Starbucks Stores, and that trains participants in how to train Regular Employees to do their jobs within Starbucks Stores to the level of training as presented in the Initial Training Program. Lessor. "Lessor" shall mean the party with whom ARAMARK has an Occupancy Agreement that allows ARAMARK to operate a concession, lease space, or engage in other business ventures on property controlled by such Lessor. For definitional purposes, a party granting an Occupancy Agreement to ARAMARK shall be referred to as a Lessor even if ARAMARK and such party do not have a landlord-tenant relationship. License. "License" shall have the meaning set forth in Section 1.1. "Licensed ARAMARK Affiliate" shall mean ARAMARK Services, Inc.; VERSA Services, Ltd.; ARAMARK Educational Services, Inc.; ARAMARK Refreshment Services, Inc.; and ARAMARK Healthcare Support Services, Inc. License Fee. "License Fee" shall have the meaning set forth in Section 2.1. Management Employee. "Management Employee" shall have the meaning set forth in Section 4.1. Manual. The "Manual" shall mean the series of documents, publications, and bulletins designated as such by STARBUCKS as the guide for operation of a Starbucks Store, which is hereby incorporated by reference as if fully set forth herein. STARBUCKS shall have the continuing right to revise the Manual, upon reasonable notice, and each update, modification, and expansion of and to the Manual adopted from time to time by STARBUCKS shall become a part thereof and accepted by ARAMARK when received by ARAMARK. Occupancy Agreements. As used herein, "Occupancy Agreements" shall mean those agreements, however denominated, that allow ARAMARK to lease, manage and/or operate concessions and stores at property owned by third parties. Without limiting the foregoing, Occupancy Agreements include all leases, concession agreements, licenses, and similar arrangements between ARAMARK and third parties. Regular Employee. "Regular Employee" shall have the meaning set forth in Section 4.1. Royalty. "Royalty" shall have the meaning set forth in Section 2.2. Starbucks Store. "Starbucks Store" shall mean a STARBUCKS retail coffee bar or whole bean coffee store, as the case may be, as operated by ARAMARK pursuant to this Agreement. Starbucks System. "Starbucks System" shall mean the business operation system that allows ARAMARK or a Licensed ARAMARK Affiliate to operate a Starbucks Store, including interior and exterior store design; other items of trade dress; specifications for equipment, fixtures, and uniforms; defined product offerings and preparation methods; standard operating and administrative procedures; and management and technical training programs, all as the same may exist today or as they may change from time to time, as specified in the Manual or as otherwise reasonably directed by STARBUCKS from time to time with respect to comparable operations, consistently applied. Trade Area. "Trade Area" shall include the entire contiguous campus of the college, university, business, health care, or industrial enterprise at which any Starbucks Store is located, unless a smaller Trade Area is set forth on the Exhibit A applicable to such store. Trademarks. "Trademarks" shall mean those proprietary marks held by STARBUCKS that STARBUCKS specifically designates, in writing, for use by ARAMARK, including those trademarks designated by STARBUCKS that are owned by a distributor or joint venture of which STARBUCKS is a part. ARTICLE 1.0 THE LICENSE Grant of License. Subject to the terms and conditions of this Agreement, STARBUCKS hereby grants to ARAMARK and the Licensed ARAMARK Affiliates a nonexclusive license (the "License") to use the Starbucks System and the Trademarks for each licensed Starbucks Store, to be identified on an Exhibit A to this Agreement, executed by ARAMARK or a Licensed ARAMARK Affiliate, as the case may be. Any Licensed ARAMARK Affiliate which executes an Exhibit A shall, as to all Starbucks Stores on such Exhibit, be bound by this Agreement just as if such Licensed ARAMARK Affiliate had executed this Agreement. References herein to "ARAMARK" shall include each Licensed ARAMARK Affiliate as to all Starbucks Stores on each Exhibit A executed by such Licensed ARAMARK Affiliate. ARTICLE 2.0 FEES, ROYALTIES, AND PAYMENTS 2.1. License Fee. ARAMARK will pay a license fee for each Starbucks Store opened by ARAMARK as set forth on Schedule 2.0 (the "License Fee"), with such fee attributable as set forth on Schedule 2.0. The License Fee for each Starbucks Store opened by ARAMARK shall be due on or within thirty (30) days after ARAMARK and STARBUCKS execute an Exhibit A for that Starbucks Store. No store shall open prior to the full execution of Exhibit A for such store and the payment of the applicable License Fee. 2.2. Royalty and Advertising Fee to STARBUCKS. Starting on the first day that its first Starbucks Store opens to the public (the "Commencement Date"), ARAMARK shall pay STARBUCKS a royalty as set forth on Schedule 2.0 (the "Royalty"), plus an advertising fee in accordance with Section 2.3.2. "Gross Revenue" shall mean the total of all revenues derived from the Starbucks Store during the term of the License, whether such revenues are evidenced by cash, services, property, or other means of exchange, and whether STARBUCKS offers such services or products in its other locations, and shall include without limitation, the following: (a) sales, monies, property, or receipts from sales, of any nature or kind whatsoever, derived by ARAMARK or by any other person or entity (including without limitation persons controlling, controlled by, or under common control with ARAMARK); (b) sales of STARBUCKS products in contravention of this Agreement at locations other than the Starbucks Stores, provided, that sales of Starbucks coffee through Starbucks' wholesale programs shall not be considered sales in contravention of this Agreement; (c) the proceeds of any business interruption insurance, after the satisfaction of any applicable deductible; (d) sales from vending devices; (e) mail or telephone orders received or filled on or from the Starbucks Store; (f) all deposits not refunded to purchasers; (g) orders taken although filled elsewhere. There shall be no reduction for the costs or expenses of operating the Starbucks Stores or for federal, state, or local income taxes or business and occupation taxes related to the Starbucks Stores. "Gross Revenue" shall exclude the amount of any state or local sales or use tax actually paid by ARAMARK and sales of fixtures or other capital items sold by ARAMARK after use thereof in the operation of the Starbucks Stores. 2.3. Payment. 2.3.1 Payment of Royalty. ARAMARK will calculate the Royalty due to STARBUCKS for each calendar month and submit payment to STARBUCKS for the amount due together with a statement of ARAMARK's Gross Revenue for the Accounting Period no later than the twenty-fifth day of the month following the month for which such Royalty Payment is due. 2.3.2 Payment of Advertising Fee. For each Starbucks Store, ARAMARK shall submit to STARBUCKS an advertising report in the manner set forth on Schedule 2.0. 2.4. Promotional Materials. ARAMARK shall purchase for each Starbucks Store it opens an initial supply of promotional materials from STARBUCKS costing not less than five hundred dollars ($500) and, from time to time, shall purchase additional promotional materials from STARBUCKS or a vendor approved by STARBUCKS to maintain that supply. Promotional materials are materials such as customer brochures and counter cards that contain the Trademarks. STARBUCKS will supply these materials to ARAMARK at STARBUCKS' cost, plus a markup estimated to be twenty percent (20%) to cover its costs of order processing, handling, and shipping. ARAMARK may submit samples of such products from other vendors to STARBUCKS for testing and approval under the procedures set forth in Section 5.9.1. 2.5. Training Fees. The fees and costs typically charged by STARBUCKS for training one (1) Management Employee and six (6) Regular Employees for each Starbucks Store are included in the License Fee paid by ARAMARK for such site, provided, that ARAMARK and STARBUCKS may agree to such other number of Regular Employees as may be necessary to adequately staff such Starbucks Store. For all other training requested by ARAMARK, STARBUCKS may charge reasonable fees and costs for materials and participation. STARBUCKS shall not be responsible for any out-of-pocket expenses, travel, hotel, or salary costs, incurred during training by ARAMARK personnel (including without limitation any Management Employees or Regular Employees). 2.6 Multiple Stores. In the event there is more than one Starbucks Store at a location that includes a previously licensed Starbucks Store, each such Starbucks Store shall be subject, among other things, to the fees as set forth in this Agreement, including without limitation those described in Sections 2.2, 2.4, and 2.5. 2.7. Initial Design and Fabrication; Refurbishment Costs. 2.7.1. Design, Fabrication, and Set-up. STARBUCKS shall provide initial design services for each Starbucks Store, based on plans, specifications and criteria established by STARBUCKS in accordance with its trade dress and business practice. The costs of such initial design services shall be included within the License Fee and ARAMARK shall not be separately charged for such initial design services. ARAMARK shall build and install the Starbucks Store using a contractor approved by STARBUCKS, acting reasonably, and following procedures set forth in the Manual. The fee covers only initial design services, and Starbucks shall not be responsible for detailed architectural or construction drawings or revisions. 2.7.2. Refurbishment. From time to time, ARAMARK, at its expense, shall refurbish each Starbucks Store as needed to maintain the building design, trade dress, color schemes, and presentation then used by STARBUCKS in its other operations. Refurbishment may include, without limitation, structural changes, remodeling, redecoration, and modifications to existing improvements. During each year of the term of a Starbucks Store, ARAMARK shall not be required to expend more than Twenty Percent (20%) of the total cost incurred by ARAMARK to design, construct and equip the Starbucks Store on refurbishment required by this Section 2.7.2. This limitation shall not apply in the event of a renewal of a License for a Starbucks Store, in which event ARAMARK shall modify the store as necessary to reflect STARBUCKS' current trade dress and image. 2.7.3 Notice of New Starbucks Store. Upon determining that it wishes to open a new store, ARAMARK shall provide STARBUCKS with at least ninety (90) days written notice of such desire. STARBUCKS shall inform ARAMARK whether it wishes to authorize the location within thirty (30) days of receipt of notice from ARAMARK. STARBUCKS shall retain sole and absolute discretion regarding the authorization of any new Starbucks Store, and may elect not to authorize a site for any reason including, without limitation, the failure of ARAMARK's operations to meet with STARBUCKS' continuing operational, financial and legal approval. 2.8. Purchase of Products. 2.8.1 Coffee. ARAMARK shall purchase from STARBUCKS all coffee sold by the Starbucks Stores. STARBUCKS will sell each type of the various blends and roasts of such coffee to ARAMARK at the prices set forth on Schedule 2.8 as of the execution of this Agreement, and thereafter at prices calculated in accordance with Schedule 2.8. 2.8.2 Other Products. ARAMARK may elect to purchase other products, services, and reports from either (a) STARBUCKS, if STARBUCKS has such items available for sale, or (b) other vendors that meet STARBUCKS' specifications and that have been approved in writing by STARBUCKS, which approval shall not be unreasonably withheld. The procedures for purchasing from such other vendors are further described in Section 5.9. 2.8.3 Shipment. All coffee and other products shall be shipped F.O.B. STARBUCKS' dock, Seattle, Washington, or F.O.B. STARBUCKS' dock at such other shipping point in the continental United States as STARBUCKS shall determine. Policies with respect to products, returns, and product quality are contained in the Manual. 2.9. Taxes. ARAMARK shall pay to STARBUCKS the amount of all sales taxes, real estate taxes, use taxes, personal property taxes, and similar taxes imposed on, or paid on account of, any goods or services furnished by sale, lease, or otherwise by STARBUCKS, and all amounts that STARBUCKS may advance, pay, or become obliged to pay on ARAMARK's behalf for any reason whatsoever except with respect to License Fees and Royalty Fees. 2.10. Payment of Invoices. All invoices for products, services, fees, and expenses issued by STARBUCKS are due upon issuance and payable by ARAMARK net forty-two (42) days from the date of issuance except as otherwise provided herein. ARTICLE 3.0 TERM, RENEWAL 3.1 Term of License. The License granted in Section 1.1 shall be for a term of five (5) years for each Starbucks Store, subject to the termination rights of the parties as set forth in Article 6 below. Such term shall begin on the date that such Starbucks Store first opens for business. STARBUCKS and ARAMARK acknowledge that, under certain circumstances, the term for a particular site may be longer or shorter than five years, depending on the terms and conditions of the applicable Occupancy Agreement. Upon store opening, the parties will exchange a revised Exhibit A confirming the actual opening date and expiration date for each store. 3.2 Renewal. Without limiting the termination rights accorded the parties in Article 6, STARBUCKS may renew this Agreement for a Starbucks Store for a period of five(5) years or such longer or shorter renewal term as may be appropriate pursuant to the applicable Occupancy Agreement. If such renewal notice is not given at least ninety (90) days prior to the expiration of the then-existing term for a Starbucks Store, the term for such site shall expire upon its previously established expiration date. There shall be no License Fee applicable to the renewal of a license. ARTICLE 4.0 PREOPENING ASSISTANCE AND REQUIREMENTS 4.1. Training Programs. ARAMARK acknowledges that quality control and adherence to the Starbucks System are needed to preserve and enhance the value of the Starbucks System and the License. As a condition precedent to ARAMARK's opening the Starbucks Stores to the public, all newly hired and replacement managers of ARAMARK's locations ("Management Employees") shall be subject to STARBUCKS' reasonable approval and shall successfully complete, to STARBUCKS' satisfaction, the "Initial Training Program" and the "Advanced Training Program" conducted by STARBUCKS. Employees of ARAMARK having managerial responsibilities at ARAMARK's locations shall have a skill level, training and experience commensurate with the demands of the position, and in keeping with STARBUCKS' high standards for quality products, courteous service, and cleanliness of operations. Also, each non-management employee of ARAMARK that will work in a Starbucks Store ("Regular Employee") shall, prior to, and as a condition precedent to opening of that Starbucks Store, receive training to STARBUCKS' satisfaction to the level of STARBUCKS' Initial Training Program. Except as provided in Section 2.5 hereof, ARAMARK shall pay training costs and related expenses of each person who attends any such training programs on its behalf. STARBUCKS shall not be responsible for paying the salaries and expenses of employees of ARAMARK who are attending training programs. 4.2. Opening Assistance. STARBUCKS shall furnish to ARAMARK one (1) person experienced in the Starbucks System to assist ARAMARK for a minimum period of seven (7) operating days in conjunction with, and prior to, the opening of any Starbucks Store. If ARAMARK opens more than one Starbucks Store at a campus or other location simultaneously, then STARBUCKS may furnish one person, and the opening assistance periods may run consecutively. STARBUCKS shall use diligent effort to furnish one person per Starbucks Store if ARAMARK opens more than one Starbucks Store at a campus or other location simultaneously. 4.3. Opening Timetable. ARAMARK shall locate its first Starbucks Store and obtain STARBUCKS' approval for the location promptly following execution of this Agreement. Initial training for ARAMARK's employees will be scheduled after the execution of this Agreement and completed before the opening date scheduled pursuant to Section 2.7.3 ARAMARK shall commence construction promptly following receipt of approval of a site by STARBUCKS and shall open each Starbucks Store promptly on completing construction. ARTICLE 5.0 OPERATION OF THE BUSINESS 5.1. Standards of Performance and Quality. ARAMARK understands and acknowledges that it is important to STARBUCKS and ARAMARK to develop and maintain high and uniform operating standards, to increase the demand for STARBUCKS' products and services, and to protect the reputation and goodwill of STARBUCKS. Without limiting the standards of performance set forth in the Manual, ARAMARK covenants and agrees as follows: 5.1.1. ARAMARK shall ensure that the operation of each Starbucks Store is at all times under the direct control of a Management Employee. Each Management Employee shall be solely dedicated to operation of the Starbucks Store to which the person is assigned, provided, that a Management Employee may supervise multiple stores if such stores are located within a geographic area that reasonably allows for such multiple store supervision, such as the campus or other location identified on the Exhibit A covering the Starbucks Stores, with such area to be approved by STARBUCKS. 5.1.2. ARAMARK shall operate the Starbucks Stores in accordance with the standards of service, advertising, promotion, management, and cleanliness prescribed by STARBUCKS and on such days and during such hours as ARAMARK may reasonably determine, exercising its judgment as a global provider of food and other managed services; comply with all business policies, practices, and procedures imposed by STARBUCKS; maintain the physical facilities of each Starbucks Store at a "like new" level of cosmetic appearance; sell at the Starbucks Stores only those services and products designated and approved by STARBUCKS; and maintain the interior and exterior of the Starbucks Stores in a sound, clean, and attractive condition. ARAMARK may, exercising its judgment as a global provider of food and other managed services, reasonably determine what STARBUCKS- approved services and products are to be sold at a Starbucks Store, provided, that ARAMARK shall at all times offer the items included in the "core menu" established for such store on the Exhibit A applicable to such store. 5.1.3. ARAMARK shall obtain and use materials distinctive to the operations of Starbucks Stores (napkins, paper bags, etc.) only of the kind now or hereafter marketed or licensed by STARBUCKS in accordance with its specifications. ARAMARK specifically acknowledges and agrees that the cup used to serve STARBUCKS coffee is an integral and valuable part of the STARBUCKS product. ARAMARK therefore agrees to use in the operation of its Starbucks Stores only cups that comply with STARBUCKS' specifications., 5.1.4. ARAMARK shall not alter, add to, or delete from any portion of the Starbucks System, Trademarks, or STARBUCKS products as licensed hereunder without STARBUCKS' prior written consent, which STARBUCKS may withhold in its sole and absolute discretion. 5.1.5. ARAMARK shall purchase all furniture, fixtures, equipment, supplies, and signage, including replacements, in accordance with STARBUCKS' specifications, and from suppliers approved by STARBUCKS under Section 5.9.1. 5.1.6. ARAMARK shall use at all times the methods, materials, and equipment designated by STARBUCKS to serve customers. 5.1.7. ARAMARK shall maintain at all times an inventory of goods and supplies sufficient to satisfy customer demand. 5.1.8. ARAMARK shall cause all of its employees, while working at Starbucks Stores, to wear uniforms of such color, design, and other specifications as STARBUCKS may reasonably designate, to present a neat and clean appearance, and to render competent and courteous service to customers. ARAMARK's employees working in the Starbucks Stores shall be dedicated solely to the Starbucks Stores and shall not work at any other business owned or operated by ARAMARK, except where ARAMARK reasonably determines it can provide shifts at other locations with no detrimental effect on the operations of its Starbucks Stores. 5.1.9. ARAMARK shall operate the Starbucks Stores as a retail business only under the name "Starbucks Coffee" without any additional or accompanying words or symbols unless otherwise directed or approved by STARBUCKS in writing, in STARBUCKS' sole and absolute discretion, subject only to the requirement that such words or symbols be required to be adopted at substantially all other Starbucks Stores. ARAMARK shall implement all changes in identification required by STARBUCKS within forty-five (45) days after receipt of a notice setting out an alternate Trademark pursuant to Section 5.10.2. 5.1.10. ARAMARK shall promptly pay when due all trade and supplier accounts, all federal, state, and local taxes (including, but not limited to, income, business and occupation, gross receipts, sales, use, property, and excise taxes), lease payments, and indebtedness of any kind incurred by ARAMARK in the operation of the Starbucks Stores, unless ARAMARK in good faith, contests any such payment. 5.1.11. ARAMARK shall secure, maintain in force, and, on reasonable notice, give reasonable evidence (or access) to STARBUCKS on request of all business licenses, permits, registrations, and certificates legally required to operate the Starbucks Stores and shall comply with all applicable laws, ordinances, and regulations. 5.1.12. ARAMARK shall faithfully observe and timely perform all covenants to be observed and performed by it pursuant to the Occupancy Agreements for the locations for its Starbucks Stores. 5.1.13. ARAMARK shall not, without the prior consent of STARBUCKS, knowingly employ or seek to employ any person who is at the time employed by STARBUCKS or operating a business under license from STARBUCKS, or otherwise directly or indirectly induce any such person to leave his or her employment. STARBUCKS shall give ARAMARK notice as promptly as is practicable of any situation in which it appears ARAMARK may breach, or has breached, this Section 5.1.13. 5.1.14. ARAMARK shall pay a compensation rate specified by STARBUCKS and out-of-pocket expenses including, but not limited to, transportation, lodging, and food, of any agent or employee of STARBUCKS who works at any of ARAMARK's Starbucks Stores and performs services that would otherwise be performed by an employee of ARAMARK (whether a Management Employee or a Regular Employee). 5.1.15. ARAMARK shall replace items of equipment that are obsolete or otherwise mechanically impaired to the extent they require replacement, or as STARBUCKS may reasonably require. 5.1.16. Except for participation in STARBUCKS' wholesale programs or as otherwise specifically authorized by STARBUCKS, ARAMARK shall sell no coffee products or other products supplied by STARBUCKS outside of the Starbucks Stores nor to any customer for the purpose of resale by the customer, and all sales by ARAMARK shall be for retail consumption only. 5.1.17. ARAMARK shall notify STARBUCKS in writing within ten (10) days after ARAMARK receives actual notice of the commencement of any action, suit, or other proceeding, or the issuance of any order, writ, injunction, award, or other decree of any court, agency, or other governmental instrumentality that pertains to the Starbucks Stores or that may adversely affect ARAMARK's operation of the Starbucks Stores or ability to meet its obligations hereunder, of such proceeding or decree. 5.2. Inspection. ARAMARK agrees to permit representatives of STARBUCKS to inspect ARAMARK's business locations and operating methods during normal business hours to determine the condition of the Starbucks Stores and ARAMARK's compliance with this Agreement. STARBUCKS acknowledges that in certain instances, access to a Starbucks Store may be subject to the consent of the ARAMARK client, and that such client may refuse to grant consent. ARAMARK shall use diligent efforts to obtain such client's consent to access by STARBUCKS. 5.3. Prices. [Intentionally deleted.] 5.4. Employee Training. 5.4.1. STARBUCKS and ARAMARK agree that it is desirable for the benefit and promotion of the Starbucks System to use uniform product preparation methods and employ approved products, ingredients, and techniques. ARAMARK therefore agrees that each Management Employee must be fully trained by STARBUCKS in its Initial Training Program and Advanced Training Program prior to beginning work as a manager in any Starbucks Store and each Regular Employee must be trained up to the level of training in STARBUCKS' Initial Training Program either by a fully trained Management Employee or by attending STARBUCKS' Initial Training Program. The Manual shall contain current charges payable by ARAMARK for any such training performed by STARBUCKS if requested by ARAMARK or required hereunder and not covered by Section 2.5. Notwithstanding any training provided by STARBUCKS, STARBUCKS has no responsibility for the quality of any products provided by ARAMARK to its customers except for beans and other products manufactured by STARBUCKS and provided to ARAMARK. 5.4.2. Pursuant to Sections 2.5 and 4.1, STARBUCKS shall provide the initial training of ARAMARK's initial staff at ARAMARK's Starbucks Stores. STARBUCKS shall also bear the costs of any other training requested by STARBUCKS. ARAMARK shall bear the direct costs and fees associated with any training requested by ARAMARK or required hereunder. ARAMARK shall pay the costs and expenses of each person who attends any STARBUCKS training program on its behalf. STARBUCKS shall not be responsible for any such expenses, or for any salary or salary-related expenses of any of ARAMARK's employees during attendance at training. 5.5. Advertising. 5.5.1. All advertising for its Starbucks Stores conducted by ARAMARK must be dignified and must conform to the highest ethical advertising standards and to policies prescribed by STARBUCKS. All advertising, promotional, or marketing plans and materials that ARAMARK uses shall be developed by STARBUCKS or shall be approved (except with respect to prices charged) in writing by STARBUCKS before use. ARAMARK shall use any advertising schemes or promotional materials developed by STARBUCKS only with STARBUCKS' approval. Any advertising or promotional material submitted by ARAMARK for STARBUCKS' approval, which is not rejected within thirty (30) days after STARBUCKS receipt thereof, shall be deemed approved. 5.5.2. ARAMARK agrees to keep visible to customers at its Starbucks Stores at all times a display, a counter card, a supply of catalogs, or such other items promoting STARBUCKS' mail order business as STARBUCKS may reasonably designate, provided that STARBUCKS gives such materials to ARAMARK without charge. 5.6. Insurance. 5.6.1. At all times during the term of this Agreement, ARAMARK shall keep in effect such insurance (including, but not limited to, course of construction insurance, fire and extended coverage insurance on the real property, equipment, leasehold improvements and stock at the Starbucks Stores, business interruption insurance, rental insurance, and workers' compensation insurance) as may be required by the terms of Occupancy Agreements covering ARAMARK's Starbucks Stores' premises, such insurance as may be required by law, comprehensive general liability insurance (including products and completed operations), and personal injury at a minimum limit of liability of $3,000,000. All policies shall name STARBUCKS as an additional insured as appropriate, and shall provide that STARBUCKS shall receive thirty (30) days' prior written notice of termination, expiration or cancellation of any such policy. All policies shall be written with insurers with a rating reasonably acceptable to STARBUCKS and each insurer shall be licensed to do business in the jurisdiction in which the applicable Starbucks Store is located. 5.6.2. On the execution hereof, ARAMARK shall provide STARBUCKS with an insurance certificate evidencing the coverages required by this Section 5.6. Thereafter, ARAMARK, shall submit to STARBUCKS an insurance certificate evidencing the coverages required by this Section 5.6, at any time and from time to time, within thirty (30) days after a request therefor from STARBUCKS, and ARAMARK shall submit to STARBUCKS annually evidence of the renewal or extension of each insurance policy. 5.6.3. [Intentionally omitted] 5.7 Procurement of Insurance. If ARAMARK at any time fails to maintain in effect any insurance coverage required by STARBUCKS or to furnish satisfactory evidence thereof, STARBUCKS in addition to its other rights and remedies under this Agreement at law or in equity, may, but need not, obtain such insurance coverage on behalf of ARAMARK, and ARAMARK shall promptly execute any applications or other forms or instruments required to obtain any such insurance and pay to STARBUCKS on demand any premiums and any expenses of procurement incurred by STARBUCKS. 5.8. Signs. ARAMARK shall pay all costs of signage, and shall only use signs in connection with its Starbucks Stores that STARBUCKS has approved in writing. ARAMARK shall, at all times, maintain and display signs reflecting the current image of the Starbucks System, which shall be the color, size, design, and materials specified by STARBUCKS, in the locations specified by STARBUCKS, and subject to the approval of the governing body that controls the site on which the Starbucks Store is located, if required by ARAMARK's Occupancy Agreement. ARAMARK agrees that it shall not use any handwritten signs. On receipt of notice by STARBUCKS of a requirement to alter any existing sign on its premises, ARAMARK will at its cost make the required changes within forty-five (45) days, subject to the approval of the applicable governing body for the location of the Starbucks Store if required. ARAMARK shall not place or allow to be placed additional signs or posters on its premises without the written consent of STARBUCKS. 5.9. Purchases From STARBUCKS and Approved Suppliers. 5.9.1. To promote the uniformity and quality of the Starbucks System, ARAMARK shall purchase all coffee from STARBUCKS and all goods, products, and supplies used in or sold from the Starbucks Stores' only from STARBUCKS or from suppliers designated or approved in writing by STARBUCKS, acting in its sole and absolute discretion. In considering its approval, STARBUCKS may require ARAMARK to submit samples or specifications of any goods or supplies from a proposed supplier to STARBUCKS or to any other person for testing and ARAMARK shall bear any cost of such testing. STARBUCKS will notify ARAMARK of the grant or denial of such approval or of STARBUCKS' need for additional information or samples within thirty (30) days of the submission of specifications or samples. All coffees, goods, products, and supplies purchased from STARBUCKS shall be purchased in accordance with the order format issued from time to time by STARBUCKS, the current form of which shall be set forth in the Manual. 5.9.2. STARBUCKS may change the prices, delivery terms and other terms relating to its sale of goods, products and supplies to ARAMARK, including coffee prices, on thirty days' notice. STARBUCKS, in its sole discretion, may discontinue the sale of any product at any time if in STARBUCKS' sole judgment its continued sale becomes unfeasible, unprofitable, or otherwise undesirable. 5.9.3. STARBUCKS shall not be liable to ARAMARK for unavailability of, or delay in shipment or receipt of, merchandise because of temporary product shortages, order backlogs, production difficulties, delays, unavailability of transportation, fire, strikes, work stoppages, or other causes beyond the reasonable control of STARBUCKS. 5.9.4. STARBUCKS may act as a manufacturer or wholesaler of goods, products, and/or supplies purchased by ARAMARK and shall be entitled to a reasonable return comparable to other wholesalers or other manufacturers for similar items in the marketplace. ARAMARK agrees to the wholesale price as set forth in STARBUCKS' wholesale catalog, on all goods, products, and supplies purchased from STARBUCKS, except for coffees purchased at prices set forth in Schedule 2.8 or as adjusted in accordance therewith. 5.9.5. On the termination of this Agreement, STARBUCKS shall not be obliged to fill or ship any orders then pending or made any time thereafter by ARAMARK. 5.10. Trademarks. 5.10.1. ARAMARK acknowledges that STARBUCKS owns the Trademarks and ARAMARK agrees that it shall use only the Trademarks in the operation of the Starbucks Stores and no other trade name or trademark and shall use the Trademarks only for the term of this Agreement. ARAMARK may also use the Trademarks for presentations for business opportunities that it reasonably believes will lead to the development of more Starbucks Stores. 5.10.2. STARBUCKS expressly reserves the right to change the Trademarks or substitute any other trade name, trademark, service name, or service mark at any time; provided that such change or substitution is made effective for substantially all of retail stores operated or owned by STARBUCKS directly. If STARBUCKS makes such a change, each new mark or name shall be a "Trademark" for purposes of this Agreement and shall replace the appropriate discontinued mark or name used in this Agreement. 5.10.3. ARAMARK agrees that it will not use or display any Trademark or any variation thereof other than in strict conformity with STARBUCKS' specifications and the provisions of this Agreement, that ARAMARK has no right to license any person to use any Trademark, and that ARAMARK shall not use any Trademark or any phonetically or visually similar name or mark or any combination thereof in any trading name of any corporation, partnership, or other organization or business without STARBUCKS' express written consent, which may be withheld in STARBUCKS' sole and absolute discretion. Neither during nor after the term of this Agreement shall ARAMARK take any action that does or may adversely affect the goodwill associated with the Trademarks. 5.10.4. ARAMARK shall not imprint or authorize any person to imprint any Trademark on any product without the express written approval of STARBUCKS. ARAMARK shall not use the Trademarks in connection with any offering of securities or any request for credit without the prior express written approval of STARBUCKS. STARBUCKS may withhold or condition any approval related to the Trademarks, including those described in this Section, in its sole and absolute discretion. 5.10.5. If ARAMARK learns of the use of the name "STARBUCKS", any other Trademark, or any phonetically or visually similar name or mark by another, ARAMARK shall promptly inform STARBUCKS. If another person claims that ARAMARK's use of a Trademark infringes upon the rights of such other person, ARAMARK shall promptly notify STARBUCKS. STARBUCKS shall wholly control any litigation with respect to any Trademark, shall be solely responsible for all of its attorneys' fees associated with such litigation, and shall be entitled to all damages awarded based on infringement of any Trademark. STARBUCKS shall indemnify and hold ARAMARK and its affiliates harmless from and against any claim, liability or other obligation arising out of ARAMARK's use of the Trademarks or other intellectual property provided to ARAMARK by STARBUCKS. 5.10.6. If STARBUCKS changes any Trademark, ARAMARK agrees to comply with the change within forty-five (45) days after notice thereof by STARBUCKS, at ARAMARK's expense. 5.10.7. ARAMARK acknowledges and recognizes STARBUCKS' exclusive ownership of the Trademarks and the validity of the Trademarks, and agrees that its use of the Trademarks inures to the benefit of STARBUCKS. ARAMARK agrees not to contest or assist anyone in contesting at any time during or after the term of this Agreement, in any manner, the validity of any Trademark or its registration, and ARAMARK further agrees to maintain the integrity of the Trademarks and to prevent their dilution. ARAMARK agrees that nothing in this Agreement shall grant ARAMARK any right, title, or interest in the Trademarks. 5. 10.8. STARBUCKS makes no representation or warranty about the rights of STARBUCKS or ARAMARK to use the Trademarks. 5.11. Confidential Information. 5.11.1. ARAMARK has or will have knowledge concerning the Starbucks System and other confidential matters necessary or useful to the successful development of Starbucks Stores, such as STARBUCKS' plans, strategy, costing, prospects, and potential locations (the "Confidential Information). Any and all information pertaining to the Starbucks System and that is identified in writing as confidential, either through a stamp on such information or through specific identification of such information as confidential in other written communication, including all information in the Manual, except information that is or has become a part of the public domain through publication or communication by others, or that ARAMARK can show was already in ARAMARK's possession before receipt from STARBUCKS, shall be "Confidential Information" for purposes of this Agreement. ARAMARK acknowledges that the Confidential Information is confidential, proprietary information, and a trade secret. Any financial, operating, statistical, customer, marketing or similar information supplied by ARAMARK to STARBUCKS or compiled by STARBUCKS or its auditors or other agents, directly related to ARAMARK's operations, including without limitation, any client or customer lists, and that is identified in writing as confidential, either through a stamp on such information or through specific identification of such information as confidential in other written communication (the "ARAMARK Information") is confidential, proprietary and constitutes a trade secret owned solely by ARAMARK. STARBUCKS shall not disclose any ARAMARK Information to any third party (except to the extent permitted in Section 5.12.2), and shall not use the ARAMARK Information for any purpose other than fulfilling the terms of this Agreement, without the prior written consent of ARAMARK. 5.11.2. ARAMARK hereby covenants to treat as confidential at all times the Confidential Information and to use all reasonable efforts to keep such information confidential. ARAMARK acknowledges that the unauthorized use or disclosure of such Confidential Information will cause incalculable and irreparable injury to STARBUCKS. ARAMARK accordingly agrees that it shall not at any time during or after the term of this Agreement disclose or use or permit the use (except as may be required by applicable law or authorized by this Agreement) of the Confidential Information, in whole or in part, or otherwise make the same available to any unauthorized person or source without STARBUCKS' prior written consent. 5.11.3. ARAMARK shall grant access to the Confidential Information to its employees only on a need-to-know basis, and shall, to the extent permitted by law, require all of its Management Employees to enter into a written confidentiality and noncompetition agreement in the form attached hereto as Exhibit B, prohibiting them during the term of their employment or thereafter from communicating, divulging, or using for the benefit of anyone, any Confidential Information that they may acquire during their employment with ARAMARK at the Starbucks Stores. 5.11.4. If ARAMARK has any reason to believe that any Management Employee has violated the provisions of the confidentiality and noncompetition agreement, ARAMARK shall promptly notify STARBUCKS and shall cooperate with STARBUCKS to protect STARBUCKS against infringement or other unlawful use including, but not limited to, the prosecution of any lawsuits if, in the reasonable judgment of STARBUCKS, such action is necessary or advisable. 5.11.5. In view of the importance of the Trademarks and the Confidential Information to STARBUCKS, and the importance of the ARAMARK Information to ARAMARK and the incalculable and irreparable harm that would result to either party if the other party were to breach its covenants and agreements in connection with these matters, the parties agree that STARBUCKS may seek specific performance and/or injunctive relief to enforce the covenants and agreements in this Agreement, in addition to any other relief to which STARBUCKS may be entitled at law or in equity, and that ARAMARK may seek specific performance and/or injunctive relief, in addition to other legal or equitable remedies, to enforce the covenants and agreements in this Section 5.11. 5.11.6. ARAMARK shall not disclose the substance of this Agreement to any third party except as necessary to inform entities from which it is seeking Occupancy Agreements or entities which are parties to Occupancy Agreements in order to obtain renewals of, or avoid terminations of, such Occupancy Agreements or as necessary to obtain any governmental permits, licenses, approvals, etc., or to the extent required by the lawful order of any court of competent jurisdiction or federal, state, or local agency having jurisdiction over ARAMARK, provided that ARAMARK shall give STARBUCKS prior notice of such disclosure. The parties agree to cooperate on press releases and other public communications and to coordinate any public announcements concerning this Agreement. 5.12. Accounting, Reports, and Records. 5.12.1. ARAMARK shall prepare, and keep for a period of not less than three (3) years following the end of each of its fiscal years, adequate books and records showing inventories and receipts of all inventory, daily receipts in, at, or from the Starbucks Stores, applicable sales tax returns (if any), all pertinent original serially numbered sales slips and cash register records, and such other sales records as may be reasonably required by STARBUCKS from time to time to verify Gross Revenue reported by ARAMARK to STARBUCKS, in a form suitable for an audit of its records by an authorized auditor or agent of STARBUCKS. Such information shall be broken down by categories of goods, foods and beverages sold, where possible. ARAMARK shall permit STARBUCKS or its duly authorized auditor or agent to inspect, audit, examine and make copies from ARAMARK's books and accounting records for the Starbucks Stores at any reasonable time during normal business hours. 5.12.2 ARAMARK shall submit reports of Gross Revenue for the Starbucks Stores to STARBUCKS for each calendar month or at such intervals as STARBUCKS may reasonably require. STARBUCKS agrees that this information is ARAMARK Information, and shall be treated as provided in Section 5.11(except to the extent that applicable law requires disclosure or that STARBUCKS uses it to prepare reports detailing average sales and income and similar statistics). STARBUCKS may require that ARAMARK connect each of its Starbucks Stores to STARBUCKS' point-of-sale system at STARBUCKS' cost or otherwise give daily reports of sales to STARBUCKS. STARBUCKS may require ARAMARK to submit annual reports of Gross Revenue for the Starbucks Stores prepared at ARAMARK's expense and reviewed and approved by ARAMARK's internal audit staff. STARBUCKS also has the right to have an independent audit made of the books of ARAMARK's Starbucks Stores at any time. If an audit reveals that any Gross Revenues have been understated in any report to STARBUCKS, then ARAMARK shall pay STARBUCKS the Royalty due on the understated Gross Revenues immediately on demand, together with interest at the prime rate as announced from time to time by Seattle First National Bank plus two percent (2%) or, if less, the maximum rate permitted by law. In addition, if an audit reveals that Gross Revenues were understated by two percent (2%) or more during the period audited, ARAMARK shall reimburse STARBUCKS for all costs and expenses incurred in connection with the audit. The foregoing remedies shall be in addition to any other remedies available to STARBUCKS. 5.13. Promotional Programs. ARAMARK shall honor all coupons, discounts, and similar promotions provided by STARBUCKS for use at its stores generally that are presented by ARAMARK's customers. STARBUCKS shall reimburse ARAMARK for any direct costs incurred by ARAMARK thereby. STARBUCKS shall have no obligation to reimburse ARAMARK for coupons, discounts, and similar promotions if (i) promoted or undertaken for ARAMARK's Starbucks Stores but not for Starbucks Stores generally, or (ii) if ARAMARK has delayed more than 60 days in submitting reimbursement requests for such coupons, discounts and promotions pursuant to the above. 5.14. Customer Lists. ARAMARK shall use reasonable efforts to secure the names and addresses of its customers at Starbucks Stores and shall allow such ARAMARK information to be used by STARBUCKS. This obligation shall not require ARAMARK to solicit such customer information outside the boundaries of the Starbucks Stores. 5.15. Indemnification. ARAMARK hereby agrees to indemnify and hold harmless STARBUCKS, its officers, directors, shareholders, employees, and agents and each of them, in their corporate and individual capacities, from any liability or damage any of them may incur, including reasonable attorneys fees, as a result of claims, demands, costs, or judgments of any kind or nature, by anyone whomsoever, for bodily injury or property damage arising out of or otherwise connected with ARAMARK's negligent performance or actions with respect to this Agreement, the License, the Trademarks, the Confidential Information, the ownership, maintenance, or operation of the Starbucks Stores, or any act of omission or commission by ARAMARK or its officers, directors, shareholders, partners, employees, or agents, except to the extent such liability or damage is due to the negligence or fault of STARBUCKS. ARAMARK's obligations to indemnify and the rights of STARBUCKS and its officers, directors, shareholders, employees and agents, to indemnification under this Section shall survive termination or expiration of this Agreement. STARBUCKS shall give ARAMARK prompt notice of any claim for which STARBUCKS demands indemnity, shall cooperate with ARAMARK in the defense of such claim, and hereby grants to ARAMARK full right and power to direct, manage, control and settle the litigation of such claim. The absence of any indemnity obligation of STARBUCKS (other than that set forth in Section 5.10) shall not be, or be construed to be, a bar to ARAMARK's action for such indemnity for claims, including without limitation, those claims excepted out of ARAMARK's indemnity obligation in this Section 5.15. ARTICLE 6.0 TERMINATION; TRANSFERS 6.1. Termination; Default. 6.l.1. The License may be terminated at any time by mutual agreement of ARAMARK and STARBUCKS. 6.1.2. Either ARAMARK or STARBUCKS may terminate this License and Agreement for convenience at any time, either with respect to one or more particular Starbucks Stores or with respect to the entire Agreement, on thirty (30) days' written notice. 6.1.3. STARBUCKS may terminate this Agreement due to default by ARAMARK by written notice to ARAMARK at any time before its expiration on any of the following grounds: 22.214.171.124. ARAMARK's failure to pay STARBUCKS any sums due and owing STARBUCKS under this Agreement within fifteen (15) days after receipt of written notice of default. 126.96.36.199. ARAMARK's failure to comply with the Trademark provisions of this Agreement within fifteen (15) days after receipt from STARBUCKS of notice of default. 188.8.131.52. By giving ARAMARK not less than thirty (30) days' prior written notice of termination (or such longer notice as may be required by applicable law) on the failure of ARAMARK to comply with any other terms required to be observed by ARAMARK under this Agreement or any other agreement between STARBUCKS and ARAMARK, or on any grounds that are a basis for termination of the License under applicable law and, in the case of any default capable of being cured, failure to cure such default within fifteen (15) days after receipt of written notice of default. 184.108.40.206. With respect to a particular Starbucks Store, on the fourth default by ARAMARK at such store within any 12- month period, after three such defaults at such store of which ARAMARK was given notice and an opportunity to cure, regardless of whether previous defaults were cured, and without affording ARAMARK any additional time to cure such default. 220.127.116.11. With respect to a particular site, on not less than thirty (30) days' prior written notice on the occurrence of any one or more of the following events: a condemnation or transfer in lieu of condemnation, or the withdrawal of permission from the applicable Lessor that results in ARAMARK's inability to continue operation of any Starbucks Store; casualty damage to a Starbucks Store that cannot reasonably be repaired or replaced within thirty (30) days; or closing of a Starbucks Store required by law if such closing was not the result of a violation by STARBUCKS, provided that in any such case, the termination shall apply only to the affected Starbucks Store. 18.104.22.168. ARAMARK's filing of a voluntary petition in bankruptcy or any pleading seeking any reorganization, liquidation, or dissolution under any law, or ARAMARK's admission or failure to contest the material allegations of any such pleading filed against it, the entry of an order for relief against ARAMARK under the Bankruptcy Code, the adjudication of ARAMARK as insolvent, the appointment of a receiver for a substantial part of the assets of ARAMARK or its Starbucks Stores, the abatement of the claims of creditors of ARAMARK or the Starbucks Stores under any law, or the making of an assignment for the benefit of creditors, or similar disposition of the assets of the Starbucks Stores. 22.214.171.124. ARAMARK's participation in fraud or criminal misconduct relating to operation of the Starbucks Stores or if ARAMARK or any of its officers, directors, or key employees is convicted of or pleads guilty or nolo contendere to a charge of any felony, or any law, the violation of which will adversely affect the Starbucks Stores, the Trademarks, any Confidential Information, or the reputation of STARBUCKS or ARAMARK. 126.96.36.199. ARAMARK's assignment, transfer, or attempt to assign or transfer: (i) the Starbucks Stores, License Agreement, or ARAMARK in whole or in part or (ii) any portion of the premises upon which any Starbucks Store is located, in a manner inconsistent with the provisions of Section 6.5 and 6.6 of this Agreement. 188.8.131.52. ARAMARK's failure to have its employees complete successfully and timely the Initial Training Program. 184.108.40.206. ARAMARK's submission to STARBUCKS on three or more separate occasions for the same Starbucks Store at any time during the term of the License a periodic report, financial statement, tax return or schedule, or other information that understates the Gross Revenues of the Starbucks Stores for any period by more than two percent (2%). 220.127.116.11. ARAMARK's unauthorized use, disclosure, or duplication of the Confidential Information. 18.104.22.168. ARAMARK's surrender or transfer of control of any Starbucks Stores without STARBUCKS' written consent. 6.1.4. Termination shall be without prejudice to any other rights or remedies that STARBUCKS or ARAMARK, as the case may be, shall have in law or in equity. 6.1.5 STARBUCKS, without waiving any rights it may have pursuant to this Section 6.1, and in its sole discretion, may elect not to terminate a License as a result of a default. In the event a default occurs, STARBUCKS may elect to give written notification (a "Notice of Noncompliance") to ARAMARK that a Starbucks Store (or more than one Starbucks Store, if applicable), is not in compliance with the terms and conditions of this Agreement. Such Notice of Noncompliance shall state a period for ARAMARK to cure the noncompliance, which shall be a period not less than thirty (30) days. For a period of six months from and after the date of such Notice of Noncompliance, ARAMARK shall reimburse STARBUCKS for reasonable costs that STARBUCKS incurs with respect to the Starbucks Store(s) identified in such notice, including without limitation the costs of any audit or inspection of such store(s) in excess of STARBUCKS' normal audit program applied to all Starbucks stores, any mystery shopping for such store during such six month period in excess of STARBUCKS' normal mystery shopping program applied to all Starbucks Stores, additional training that STARBUCKS determines is required to bring the store up to STARBUCKS standards, and any personnel costs incurred by STARBUCKS at the store site to ensure the proper management and operation of such store(s). Nothing in this section shall limit STARBUCKS' termination rights as otherwise set forth in this Agreement, which STARBUCKS reserves the right to exercise at any time. 6.1.6 ARAMARK may terminate this Agreement due to a default by STARBUCKS, which is not cured by STARBUCKS within thirty (30) days after STARBUCKS receipt of such notice, upon written notice to STARBUCKS, provided, that if the default is such that it cannot be reasonably cured within such thirty-day period, STARBUCKS shall not be deemed in default if it commences to cure such default within thirty days and diligently prosecutes such cure to completion. 6.2. ARAMARK's Obligations Upon Termination, Expiration or Nonrenewal. On termination, expiration or nonrenewal of this Agreement for any reason, with respect to each Starbucks Store, ARAMARK agrees as follows: 6.2.1. ARAMARK shall immediately pay all sums due and owing to STARBUCKS, including any reasonable expenses incurred by STARBUCKS in obtaining injunctive relief for the enforcement of this Agreement. 6.2.2. ARAMARK shall immediately cease to operate the Starbucks Stores, and shall not thereafter, directly or indirectly, hold any of its locations out as a Starbucks Store. 6.2.3. ARAMARK shall immediately cease using all of the Confidential Information, the Trademarks, and any confusingly similar names, marks, systems, insignia, symbols, or other rights, procedures, and methods. ARAMARK shall deliver all goods and materials containing the Trademarks to STARBUCKS and STARBUCKS shall have the sole and exclusive use of any items containing the Trademarks. ARAMARK shall immediately make any specified changes to its location as STARBUCKS may reasonably require for this purpose, which shall include, but not be limited to, removal of the signs, custom decorations, and promotional materials. 6.2.4. ARAMARK shall immediately cease representing itself as then or formerly a licensee or other affiliate of STARBUCKS. 6.2.5. ARAMARK shall immediately return the Manual and all written materials incorporating Confidential Information and any copies thereof to STARBUCKS. 6.2.6. ARAMARK shall immediately cancel all assumed name or equivalent registrations relating to its use of any Trademark, notify the telephone company and all listing agencies of the termination or expiration of ARAMARK's right to use any telephone number and any classified or other telephone directory listings associated with its Starbucks Stores, and authorize their transfer to STARBUCKS. 6.2.7 If STARBUCKS so elects, at its sole option, upon any termination or expiration of this Agreement, ARAMARK will sell to STARBUCKS such equipment and furnishings as STARBUCKS may designate that are associated with the Starbucks Store (other than product and inventory, which shall be handled in accordance with Section 6.3) at its net book value, using a 5-year amortization period. 6.3. Product, Inventory, and De-identification. 6.3.1 If STARBUCKS terminates this Agreement with respect to any or all Starbucks Stores for convenience, or if ARAMARK terminates this Agreement with respect to any or all Starbucks Stores due to a default by STARBUCKS, STARBUCKS shall repurchase all unused, but usable, product and supplies inventory at the terminated Starbucks Store(s) at ARAMARK's cost for such product and supplies inventory. In such event, STARBUCKS shall bear the expense of de- identifying the Starbucks Store(s) subject to such termination. If the termination is partial, and if STARBUCKS so permits, ARAMARK shall use its best efforts to use the inventory at other Starbucks Stores to reduce the amount STARBUCKS would pay pursuant to this Section. STARBUCKS shall have no other payment obligations to ARAMARK, and ARAMARK specifically waives any and all claims to be paid for equipment, furnishings, fixtures, personalized materials not usable by STARBUCKS, or the goodwill associated with the terminated Starbucks Store(s). STARBUCKS may offset against its obligations pursuant to this Section any amounts owed by ARAMARK to STARBUCKS. 6.3.2 If ARAMARK terminates this Agreement with respect to any or all Starbucks Stores for convenience, or if STARBUCKS terminates this Agreement with respect to any or all Starbucks Stores due to a default by ARAMARK, ARAMARK shall not receive any compensation for any remaining product and supplies inventory at the terminated Starbucks Store(s). Upon STARBUCKS' request and at ARAMARK's expense, ARAMARK shall return any remaining product and supplies inventory to a location designated by STARBUCKS. In such event, ARAMARK shall also bear the expense of de-identifying the Starbucks Store(s) subject to such termination. If the termination is partial, and provided there is no adverse effect on the quality of products sold, STARBUCKS shall permit ARAMARK to use such inventory at other Starbucks Stores to reduce the expense of returning such inventory to STARBUCKS. 6.3.3 Upon any termination or expiration, each Starbucks Store shall be de-identified to the standard set forth in the Manual, or, if no standard is included in the Manual, to such standards as STARBUCKS may then have in effect for its company-owned operations. Upon any termination or expiration of this Agreement, STARBUCKS shall return all ARAMARK Information and copies thereof, to ARAMARK 6.4. Transferability of Interest. 6.4.1. ARAMARK may not sell, assign, or transfer its interest in this Agreement, including transfers for security, without STARBUCKS' prior written approval, which STARBUCKS may withhold in its sole and absolute discretion, and any attempt or purported assignment or transfer shall constitute a breach of this Agreement and be void and shall be cause for termination. 6.4.2. Without limiting STARBUCKS' discretion to approve any assignment of this Agreement or the License for security, ARAMARK shall grant no security interest in this Agreement, the License, the Starbucks Stores, or any of its assets at a Starbucks Store unless the secured party agrees that it shall give STARBUCKS prior notice of any attempt to foreclose on its security interest, STARBUCKS shall have the right and option to be substituted as obligee to the secured party, and STARBUCKS shall have the right to cure any default of ARAMARK. 6.4.3. STARBUCKS has the right to disapprove, in its sole discretion, of any person or entity or any transaction that would change the actual, legal, or effective control of the License or the Starbucks Stores upon a sale, transfer, or change of ownership of ARAMARK, the License, or the Starbucks Stores. Without limiting the foregoing, STARBUCKS may disapprove an assignment, sale, or transfer of this Agreement, the License, or the Starbucks Stores by ARAMARK or its owners unless: 22.214.171.124. The assignment or transfer complies with all applicable laws and regulations, all obligations of ARAMARK created by this Agreement, and any other agreement between STARBUCKS and ARAMARK, and the relationships created hereunder are assumed by the transferee, provided however, that such assumption shall not relieve ARAMARK of any such obligations; 126.96.36.199. All debts of ARAMARK to STARBUCKS are paid; 188.8.131.52. ARAMARK is not in default under this Agreement or any other related agreement; 184.108.40.206. The transferee and its Management and Regular Employees satisfactorily complete the training required of new licensees on STARBUCKS' then current terms before the transfer; 220.127.116.11. ARAMARK reasonably satisfies STARBUCKS that the transferee meets all requirements of STARBUCKS for new ARAMARK's, including, but not limited to, experience, skill, aptitude, good reputation and character, business acumen, financial strength, and other business conditions; 18.104.22.168. ARAMARK or transferee pays to STARBUCKS Five Thousand Dollars($5,000) for each Starbucks Store for transferee's initial training, and STARBUCKS' internal and out-of-pocket costs associated with acting on the transfer request, including without limitation all of STARBUCKS' costs and attorneys' fees associated with the transfer; and 22.214.171.124. There shall not be any suit, action, or proceeding pending, or to the knowledge of ARAMARK any suit, action, or proceeding threatened, against ARAMARK with respect to the Starbucks Stores. 6.4.5. Any consent to assignment or transfer shall be without prejudice to STARBUCKS' rights against ARAMARK hereunder or to any right (including right of indemnity), remedy, or relief vested in or to which STARBUCKS may be entitled by reason of the default, breach, or nonobservance of any covenant, term, or condition that occurred before the sale or assignment. Without limiting the foregoing, it is expressly understood and agreed that STARBUCKS' consent to an assignment of this Agreement or transfer of the License shall not waive: (i) any payment or other duty owed by ARAMARK to STARBUCKS under this Agreement before such assignment or transfer; or (ii) ARAMARK's duty of indemnification and defense as set forth in Section 5.15 hereof, whether before or after such assignment or transfer, or (iii) the obligation to obtain STARBUCKS' consent to any subsequent transfer. 6.4.6. ARAMARK shall not assign this Agreement as security for the payment of any obligation that may arise by reason of such sale or assignment. 6.5. Noncompetition. 6.5.1. During the term of this Agreement and for a period of three (3) years following its termination, ARAMARK shall not without first obtaining STARBUCKS' written consent solicit or contact personnel of STARBUCKS or its related or affiliated companies in an attempt to hire or employ said personnel. 6.5.2. During the term of this Agreement, within the Trade Area of a licensed Starbucks Store, ARAMARK shall not, except as authorized under the License or any additional or successor license granted by STARBUCKS, or as consented to by STARBUCKS in writing, have any interest, direct or indirect, in the ownership or operation of, nor grant any rights of operation to, any retailer selling espresso drinks, premium branded coffee by the drink other than STARBUCKS, or whose primary product is premium branded coffee. The foregoing shall not preclude ARAMARK from selling any of its own proprietary brands of drip coffee, whether regular or flavored (but not whole bean coffee, espresso or espresso related drinks) within the Trade Area of a Starbucks Store, so long as ARAMARK's sales of such coffee are made in a manual food service location such as a cafeteria servery, or food court, or in a vending area, or in any other location where such coffee is not the dominant product offering at that location. 6.5.3. At no time during or after the terms of this Agreement shall ARAMARK: 126.96.36.199 Commit any act that adversely affects the Starbucks Stores, the Trademarks, or the Confidential Information; or 188.8.131.52 Except as authorized under the License or any additional or successor license granted by STARBUCKS, use, in connection with the operation of any business wherever located, the Starbucks System, any Trademarks, or the Confidential Information, or cause or permit any such business to imitate the Starbucks System or to be operated in a manner tending to have such effect. 6.5.4. The parties agree that (i) if any provision of this Section 6.5 is held to be invalid or unenforceable, the remaining provisions shall continue to be valid and enforceable as though the invalid or unenforceable part had not been included, and (ii) if any geographical area or term or period of this Section 6.5 is held to be invalid or unenforceable, such geographical area or term or period shall be valid and enforceable over a reasonable geographical area or a reasonable term or period of time. 6.5.5 ARAMARK agrees that, if it goes into a business pursuant to which it offers, by mail order, products available from STARBUCKS, it will provide STARBUCKS a reasonable opportunity to participate in such program. ARTICLE 7.0 MISCELLANEOUS 7.1. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Washington. 7.2. Relationship of Parties. 7.2. 1. ARAMARK is an independent contractor and is not, and shall not hold itself out as, a partner, joint-venturer, agent, employee, or legal representative of STARBUCKS, and is not otherwise authorized to act for or on behalf of STARBUCKS as a result of this Agreement or any other agreement and cannot act for nor legally bind STARBUCKS. ARAMARK is not authorized to make any agreement, warranty, covenant, or other representation nor to create any obligation, express or implied, on behalf of STARBUCKS, nor shall ARAMARK represent that it has any right or power to do so. 7.2.2. ARAMARK shall hire and be exclusively responsible for the compensation and training of all employees of its Starbucks Stores except for the training described in Sections 2.5 and 4.1, and ARAMARK shall have sole responsibility to collect and promptly pay when due all federal, state, and FICA, FUTA, withholding, and other applicable payroll taxes, worker's compensation contributions, unemployment insurance premiums, and all similar taxes, fees, and charges. ARAMARK acknowledges that it is acting as an independent contractor, and not as an agent for STARBUCKS, in connection with all matters described in this Section. 7.3. Limitation of Remedy. If STARBUCKS should breach this Agreement or any related agreement, ARAMARK may pursue whatever remedies may be available at law or in equity, provided, that in no event shall ARAMARK have the remedy of withholding any payment due STARBUCKS under this Agreement. If ARAMARK breaches this Agreement or any related agreement, STARBUCKS may pursue any remedies that may be available at law or in equity. 7.4. Entire Agreement. This Agreement and all documents, schedules, exhibits, and information specifically incorporated into this Agreement by reference, collectively constitute the entire agreement between STARBUCKS and ARAMARK in respect of the subject matter hereof, and supersedes all prior agreements between STARBUCKS and ARAMARK in connection with its subject matter. No officer, employee, or other servant or agent of STARBUCKS or ARAMARK is authorized to make any representation, warranty, or other promise not contained in this Agreement. No change, termination, or attempted waiver of any provision of this Agreement shall bind STARBUCKS or ARAMARK unless in writing and signed by STARBUCKS and ARAMARK. 7.5. Severability. If any provision of this Agreement or the application of any provision to any person or to any circumstance is determined to be invalid or unenforceable, then such determination shall not affect any other provision of this Agreement or the application of such provision to any other person or circumstance, all of which other provisions shall remain in full force and effect. STARBUCKS and ARAMARK intend that if any provision of this Agreement is susceptible to two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall be given the meaning that renders it enforceable. 7.6. Waiver and Consent. No waiver by either party of any covenant or condition or the breach of any covenant of this Agreement to be kept or performed by the other party shall be construed as a waiver by the waiving party of any subsequent breach of such covenant or condition or authorize the breach or nonobservance on any other occasion of the same or any other covenant or condition of this Agreement. Acceptance by STARBUCKS of any payments due it hereunder shall not be deemed to be a waiver of any preceding breach by ARAMARK of any terms, covenants, or conditions of this Agreement. 7.7 Modification. To be effective, any modification of this Agreement must be in writing and signed by ARAMARK and STARBUCKS. 7.8. Section Headings; Pronouns. This Agreement may be executed in duplicate originals, each of which shall be deemed an original. The Section headings are for convenience of reference only and shall not be deemed to alter or affect any provision thereof. Each pronoun used herein shall be deemed to include the other number and gender. 7.9. Forum. Any lawsuit, arbitration or other proceeding arising out of or with respect to this Agreement shall be conducted in King County, Washington. 7.10. Attorneys' Fees and Costs. If either party is required to employ legal counsel or to incur other expenses to enforce any provision of this Agreement, then the prevailing party will be entitled to recover from the nonprevailing party the amount of all reasonable fees of counsel and all other expenses incurred in enforcing such obligation or in defending against such claim, demand, action, or proceeding. 7.11. Interest. Any sum owed to STARBUCKS by ARAMARK or paid by STARBUCKS on ARAMARK's behalf shall bear interest from the date due until paid by ARAMARK at the rate of twelve percent (12%) or, if lower, the maximum lawful rate. 7.12. Notices. Notices under this Agreement shall be in writing, and shall be delivered in person or by registered or certified mail, return-receipt requested, prepaid, addressed as follows: If to STARBUCKS: STARBUCKS Corporation 2401 Utah Avenue South Seattle, Washington 98134 Attn: Department of Law and Corp. Affairs If to ARAMARK: ARAMARK Food & Support Services Group, Inc. 1101 Market Street, ARAMARK Tower Philadelphia, PA 19107 Attn: Don Lowry, Vice President, Marketing With a required copy to: Any Starbucks Store(s) affected by such notice at the address set forth on Exhibit A for such Starbucks Store. Any Licensed ARAMARK Affiliates affected by such notice, at the principal ARAMARK notice address set forth above. or such other address any party shall have specified in a written notice to the other. 7.13. Successors and Assigns. The terms and provisions of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 7.14. Incorporation of Exhibits, Schedules, Etc. The terms of the Manual, as the same may change from time to time, and all Exhibits and Schedules hereto are hereby incorporated into and made a part of this Agreement as if the same had been set forth in full herein. The following Exhibits and Schedules are incorporated herein: Exhibit A (form of notice and agreement on location); Exhibit B (form of nondisclosure agreement) Schedule 2.0 - Fee Schedule Schedule 2.8 - Coffee Price Adjustment 7.15. Acknowledgments. ARAMARK acknowledges that: 7.15.1. STARBUCKS expressly disclaims the making of, and ARAMARK acknowledges that it has not received or relied upon, any warranty or guaranty, express or implied, as to the potential volume, profits, or success of the business venture contemplated by this Agreement. 7.15.2. It knows of no representation by STARBUCKS, or its officers, directors, shareholders, employees, agents, or servants, about the ARAMARK that is contrary to the terms of this Agreement or the documents incorporated herein, and further represents to STARBUCKS as an inducement to its entry into this Agreement, that it has made no misrepresentations in obtaining this Agreement. 7.16. Effective Date. This Agreement shall be effective as of the date it is execute an authorized representative of STARBUCKS. IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and year indicated below. EXECUTED by ARAMARK this 7th day of May, 1996. ARAMARK FOOD AND SUPPORT SERVICES GROUP, INC. By: /s/ Michael O'Hara ------------------ Its: Vice President EXECUTED by STARBUCKS at Seattle, Washington, this 7th day of May 1996. STARBUCKS CORPORATION By: /s/ Howard Schultz ------------------ Its: Chairman of the Board and Chief Executive Officer