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:
6.1.3.1. 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.
6.1.3.2. ARAMARK's failure to comply with the Trademark
provisions of this Agreement within fifteen (15) days after
receipt from STARBUCKS of notice of default.
6.1.3.3. 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.
6.1.3.4. 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.
6.1.3.5. 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.
6.1.3.6. 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.
6.1.3.7. 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.
6.1.3.8. 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.
6.1.3.9. ARAMARK's failure to have its employees complete
successfully and timely the Initial Training Program.
6.1.3.10. 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%).
6.1.3.11. ARAMARK's unauthorized use, disclosure, or
duplication of the Confidential Information.
6.1.3.12. 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:
6.4.3.1. 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;
6.4.3.2. All debts of ARAMARK to STARBUCKS are paid;
6.4.3.3. ARAMARK is not in default under this Agreement or
any other related agreement;
6.4.3.4. The transferee and its Management and Regular
Employees satisfactorily complete the training required of
new licensees on STARBUCKS' then current terms before the
transfer;
6.4.3.5. 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;
6.4.3.6. 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
6.4.3.7. 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:
6.5.3.1 Commit any act that adversely affects the Starbucks
Stores, the Trademarks, or the Confidential Information; or
6.5.3.2 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