Free Notice (Other) - District Court of California - California

Case 5:07-cv-04808-JF

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EXHIBIT B

TO SECOND AMENDED COMPLAINT

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Facilty Number: 82461
Customer Account Number: 0996439

am/pm MINI MARKET AGREEMENT

Category:l!

THIS AGREEMENT is made ~ ~, between BP West Coast Products lLC, a Delaware limited
liabilty company, with an office at 4 ~NTE DRIVE, LA PALMA, CALIFORNIA 90623 ("BPWCP") and STTN Enterprises, Inc., a Californla Corporation
(state whether a sole proprietorship, partnership, limited partnership, corporation or limited liability company I"LLC"I; if partnership, the names 01 all partners and State 01 Organization; if limited partnership, the names of all general partners
and State 01 Organlzalion; il corporation, the State 01

Incorporation; il LLC, the Slate 01 Organization)

with an address at 631 San Felipe Road. Hollster, CA 95035 ("Operato!").
Operator desires to be the franchisee of, and BPWCP is wiling to grant to Operator a franchise for, an am/pm mini market located at the Premises set forth in PART I (which together with the buildings and improvements now or
hereafter constructed thereon is referred to herein as the "Premises") on the terms and conditions set forth in PARTS I and II of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises contained in PARTS 1 and II hereof, each ollhe parties intending to be legally bound hereby, agrees as follows:
PART I

P ART I contains specific temm which relate to the temms and conditions set forth in the corresponding sections - PART II, Fomm

No. am/pm- 240WR-1 (4/2006), attached hereto and incorporated herein.
Section
4.03
Store Manager (if

Operator operates more than one am/pm mini market):

5.01

This Agreement shall be binding on the paries as of the date first written above (Effective Date.) The frchise temm of this Agreement shall begin on the, ("Commencement Date"), and shall end at 10 a.m. on the first day after the last day of th'e () 120m or (XX) 240'h full calendar month following the Commencement Date. If no box is checked at the tie this Agreement is executed, the box for 120th shall be deemed checked. If no date is set forth in this PART I, the

Cqmmencement Date shall be established by the "Notice of Final Inspection and Readiness" provided for in Section 5.0 I
of

PART 11.

6.01

Premises:

631 San Felipe Road
(complete address by street number, including, where applicable, designation of comer)

City Hollster State CA Zip 95035
Ifno address is set fort, the Premises shall be established by the "Site Acceptance" provided for in Section 6.01 of

Par

11.

6.01(a)
7.01(a)
7.0 I (c)

Target Area:

Initial Franchise Fee: Seventy Thousand and 00/100 Dollars ($ 70.000.00). Renewal Franchise Fee:

Dollars ($ .00)
7.02(a)
7.03

Minimum royalty fee: One Thousand and 00/100
Dollars ($ 1.000..00).

Security Deposit: One Thousand and 00/100
Dollars ($ 1.000..001.

16.01

Operational Designee, if applicable:

17.02

Entity Designee (Corprate Operators, LLC's, Limited Partnerships):

nor"", 'S:;i~" operator (DOFO)
am/pi !! ,:~41 WR-1 (4/2006)

Uniform

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Facilty Number:
Store Size 3,600 sq. Ct.

STORE EQUIPMENT (Real and Personal Property)

(exterior dimensions)

The equipment listed below is required to be installed in the Store unless otherwise indicated by a check mak
at the left of the required items. Operator must install and maintain the equipment so indicated prior to the

Commencement Date. All equipment must be obtained from approved vendors, or, iC applicable, meet BPWCP's specifcations including, but not linnted to, specifications with respect to brand, model, size, color and quality.

(Check only Required Equipment to be Furnished and
iC excluded) Installed bv Operator

BUILDING amlpm Sun & Moon Sign

Building Fascia (Ilumnated)
Comer Signage Interior Signage

STORE
COFFEE
Airpots (4) w/Rack (vendor supplied) Cappuccino Machine (5 head) (vendor supplied) Coffee Airpot Brewer (vendor supplied) Coffee Brewer (I Burner) (vendor supplied) Coffee Brewer (3 Burner) (vendor supplied) Coffee Brewer Riser (vendor supplied) Coffee Condiment Rack (vendor supplied) Coffee Menu Board Coffee Mug rack (vendor supplied) Coffee Wanner (2 position) (vendor supplied) Tea Rack (vendor supplied) Timer (vendor supplied) FLOOR Beverage Merchandiser, Breeze 20 oz Cigarette MerchandiserlBackbar
Cooler Cabinet (Upright)

Cooler boxes (walk-in) Napkin Dispenser (3)
Shelving (Modular; Walk-in Cooler)

Shelving (Storage Room), NSF Approved

Shelving (hand sink in food area) FOOD
Bun Toaster

Chili/Cheese Dispenser
Condiment Dispenser (6 position) Convection Oven wlRacks

Food Merchandising Wanner (i)
Food Preparation Table

Hood and Exhaust Ventilation System (for convection oven) (California only) Microwave Oven (Commercial) Nacho Rack (3 position)
Sink (3 compartment-food)

Sink (hand sink in food area)
Thermometer (digital)
non-lessee operator (DOFO)

am/pm-241WR-1 (4/2006)
Uniform

2014

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Facilty Number: 82461

(Check only Required Equipment to be Furnished and if excluded) Installed bv ODerator (continued)
FOUNTAIN Bulk C02 (vendor supplied) Mantiovoc Ice and Beverage Equipment
Scotman Ice Maker

FROZEN BEVERAGE
Frozen Carbonated Beverage (FCB) Machine

OFFICE/SALES COUNTER
Computer Softare and Hardware

Counter Merchandising System Fax Machine
POS System with PayPointCI (BPWCP Approved)

Safe
Video Surveilance Equipment

VSA T Equipment: (I) Hughes. Satellite Dish and Hughes Indoor Unit - Satellte Receiver (2) Deicer (if required for colder climate)

OTHER
Ice Maker PayQuick Island Cashier (PIC) Sales, take-out and beverage counters (including cup dispensers)

_._--

------

Sink (service/mop)

Water Heater
Other: Other: Other: Other:

:(ems indicated as vendor supplied may be supplied by vendors in conneclion wilh vendors' producls. Operator shall be "',irnished with a list of approved vendors and/or a copy of BPWCP's specifcations for all required equipmenl upon .,",ecution by Operator of Ihis Agreement.

This space is intentionally left blank.

'11,..i.",.,;OO operator (DOFO)

;ir:IΡJrT.241WA.1 (4/2006)
iJr;:':''"Y'

3014

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IN WITNESS WHEREOF, BPWCP and Operator have executed this Agreement as of

the date first above written.

OP.ERATOR ACKNOWLEDGES HAVING READ THIS AGREEMENT, INCLUDING PART II, GENERAL TERMS AND CONDITIONS, FORM No. am/pm- 240WR-1 (4/2006), AND UNDERSTANDS FULLY ALL THE
TERMS, PROVISIONS AND CONDITIONS HEREOF. No representative of BPWCP is authorized by

BPWCP to orally modify, amend, add to or waive any provision of this Agreement.
BPWCP MAKES NO REPRESENTATION OR WARRNTY, EXPRESS OR IMPLIED, AS TO OPERATOR'S PROFIT OR INCOME TO BE DERlVED FROM THE OPERATION OF THE am/pm STORE CONTEMPLATED HEREUNER.
IN WITNESS WHEREOF, BPWCP and Operator have executed this Agreement as of

the date first above written.

B

Date

'7-//-0h

If Operator is an entity, complete and sign below:
STTN Enterprises. Inc.
(prit or tye name of entity)

Check one:

Da Da
By:

Name: Nazim Faauirvan
Its: CEO and President
Date Signed:

~~~
Io ) WllJf?
n/a
n/a n/a n/a n/a
nla nla n/a nla nla

general partership;

limited liability company;

Da
12 a

CA

limited partership; corporation

By:

Name:
Its:
Date Signed:

By
Name:
Its:
Date Signed:

By

Name:
rts:

nla

Date Signed: nla
non-lessee operator (DOFO)
an¡/prn..241WR-1 (412006)

U'iilmm

4014

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am/pm MINI MART AGREEMENT
PART II
General Terms and Conditions

ARTICLE I

Service Mark and Service Name Conditons, Copyrights, Trade Secrets and Confidentiality
A.

Scrvice Marks, Trademarks and Service Names

1.01 Subject to the, term and conditions specified herein, and to the extent of BPWCP's rights

therein, BPWCP hereby grants to Operator, begitUing on the Commencement Date as defined in Section 5.01 and continuing during the term of this Agreement, the non-exclusive right and license to use the trade secrets and know-how regarding operation of am/pm mi markets, the service mark and service name "am/pm", or any variation thereof as may be approved in wrtig by BPWCP, and any other service marks, trademarks and service names used in connection with am/pm mi markets, solely in conjunction with

Operator's operation of the Store provided for herein. Operator has no exclusive terrtory. BPWCP
reserves the right, in its sole discretion, to establish additional am/pm mini market stores and other BPWCP

arid non BPWCP franchises and franchises operated by BPWCP's wholly owned subsidiary or other
company operated franchises and businesses, in any location and proximty to Operator's business.
1.02 BPWCP represents that it has applied for federal registration for various service marks for

"am/pm" for retail grocery store and convenience store services and trademarks for various products. BPWCP has been granted federal registration for certin "am/pm" service marks and trademarks for retail grocery store and convenience store services. BPWCP expressly reserves the right to change, alter or
modify the am/pm service mark or service name or substitute any other service mak or service name at any
tie by givig Operator not less than th (30) days' prior notice thereof. In the event of any change,

alteration or modification of the service mak or servce name, Operator agrees that only the service mark or
servce name, as changed, altered or modified, shall be used by Operator to identify the Store. If

the servce mark and service name "am/pm" is changed by BPWCP, it is agreed that the new service mark and service

name adopted by BPWCP shall be substituted for "am/pm" wherever "ampm" appears in ths Agreement.

BPWCP also expressly reserves the right to change, alter or modify colors and design and other service maks, trademarks and service names used in connection with arpm mi markets from time to time and place to place as BPWCP deems appropriate or as required by law and, upon 90 days prior wrtten notice from BPWCP (uness a lesser time is required by law), Operator will intall such modifed marks, colors or
design at Operator's expense.

the arpm servce mark and servce .name by any person, rum corporation or other entity (collectively refeired to as "person"). At its expense, BPWCP shall challenge all unauthoried uses or ingements of the arpm
servce mak, trademark and 'service name, and BPWCP shall have the sole right to decide whether to prosecute any person who wùawflly uses or attempts to use BPWCP's ampm service mak, trademark or

1.03 Operator agrees that it shall notify BPWCP promptly of any unauthoried use of

servce name for retail grocery store, convenience store, or fast food services. Operator agrees to provide such evidence and expert assistance as Operator may have witt its control in connection with any such
challenge or prosecution.

1.04 Operator recognes and acknowledges that, as between BPWCP and Operator, BPWCP is the

sni~ and exclusive owner of the am/pm service mak, trademak and service name and other service marks,
tn.d,.:marks and service names used in connection with am/pm mi markets and appearig on ampm stores. (¡p~i'ator hereby agrees: not to claim any right, title or interest in or to said service maks, trdemaks or ~::: n.' ;" ,. names; not to directly or indirectly deny, assail, or assist in denyig or assailing the sole and
r.. '~'I''''''('(", opertor (DOPO)

;,.,;.';. '14IWR-I,(412006)
. : i . i J t ~ '!iI

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exclusive ownership of BPWCP in said service marIes, trademarks and service names; not to adopt or use as

Operator's own propert any service marks, trademarks or service names of BPWCP nor employ any service marks, trademarks or service names confusingly similar to those of BPWCP; not to register or
attempt to register BPWCP's service names or service marks, trademarks in Operator's name or that of

other person and not to use such service marks, trademarks or service names, or any parts thereof, as any

any

part of any corporate or partership name or any other business name. It is understood that this covenant
shall surive the teffnation of this Agreement and shaH be binding upon the heirs, successors and assigns
of

Operator.

1.05 Operator agrees, upon tennnation or non-renewal of this Agreement or upon teffnation or
non-renewal of any subsequent Store Agreement, to assign BPWCP, without additional consideration, any service name or service mark, trademark rights that may have vested in Operator notwthstanding the provisions of Section 1.04 as a result of any activities of Operator pursuant to this Agreement. Operator agrees to use said service marks, trademarks and service names in connection with and exclusively for, the promotion and operation of an am/pm' store as provided hereunder, and in accordance with the standards,
term and conditions set fort in the Agreement and in accordance with intrctions, rules and procedures

prescribed in writing by BPWCP. Operator shall not use the am/pm service mark or service name, or other service marks, trademarks or service names of BPWCP, except as authorized by BPWCP and in no event in any manner that mayor could adversely imact orjeopardize the am/pm imge.

1.06 Operator agrees to display the ampm service mark, trademark and service names as prescribed
by BPWCP and to conduct the business of the Store in such a manner as to not reflect unfavorably on BPWCP's good will, service marks, trademarks and service names.
1.07 Operator agrees, inediately upon the temmation of this Agreement or tenntion of any

subsequent Store Agreement to cease and forever abstain from using the am/pm service mak and service name and other service maries, trdemarks and servce names used in connection with am/pm mi markets.
B.

Copyrights

1.08 BPWCP grants to Operator a nonexclusive right and license durg the tern of ths
materials. No rights of reproduction or distrbution are included in the grt, and upon termation for any
reason Operator shall inediately cease and desist from using or displayig any such copyrghted

agreement to use BPWCP's franchise accountig system softare at the am/pm mi market and display at Operator's am/pm Store copyyghted ampm signage, posters, and other advertsing and point of purchase
materials.

-co

Trade Secrets and Confidentiality

1.09 BPWCP shall fush or mae available to Operator for use solely in connection with
Oprator's conduct of Operator's am/pm Store, BPWCP's frnchise accountig system softare, an am/pm

Store System/Operations Manual, guides, and other form and materials. Operator agrees durg the temm

of ths Agreement and after tenntion to keep confdential and not to fuish inommtion as to the
methods of operation, advertsing programs or ideas, ,business inommtion, or any other confdential inommtion of BPWCP relatig to the operation of any am/pm Store, to any person, except BPWCP, Operator's employees, or .Operator~s attorneys or accountats engaged by Operator in connection with
Operator's operation of Operator's am/pm Store who have undertaken the same obligation of confdentiality
as set fort herein for Operator. Notwthtanding the foregoing, nothing in this Agreement or any other

agreement between the paries sliall linnt the abilty of the Operator to consult with any tax advisor
regarding tax issues pertaing to the ampm franchise business.

"ro';, lessee opertor (DFO)
:.1...:,,11- 241WR-I (412006) .
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ARTICLE 2
Relationship of Parties
2.0 I Neither Operator nor any of its employees shaH hold itself or himself out at any time as an

agent, representative, parter, joint ventuer or employee of BPWCP. Operator shall have no authority,
right or power to, and shaH not bind nor oblig'ate BPWCP in any way, manner or tlg whatsoever, nor shaH Operator represent that it has any right or power to do so. Operator shaH undertake all obligations herein

described as an independent contractor and shaH exercise and be responsible for the exclusive control of the

Store and Premises and an activities conducted therein and therefrom. In order to cõmmunicate with BPWCP, goverrent agencies and others regarding matters such as financial reporting, safety, health and
security, an ability to comprehend and communicate in English is necessary. Passing an English proficiency

test is required. '

2.02 Operator shall be solely responsible for hiring, supervising and directing all employees,

the payment and witholding of all payroll and other taxes imposed upon or detemmed by wages and
salaries of such employees, and for complying with all applicable workers' and unemployment

compensation, occupational disease, wage and hour, disability and simlar laws. BPWCP shall have no control over employees of Operator, including, without limtation, the t-eID and conditions of their
employment.
2.03 Unless otherwse expressly set forth in ths Agreement, "Operator" shall include and refer to

the sole proprietor, shareholders if francllsee is a corporation, parters if franchisee is a partership and
members if franchisee is an LLC.
2.04 Operator shall continuously display on the exterior of the building in a conspicuous manner

at a point visible and accessible to the public a legible sign meeting BPWCP's specifications, showig that
Operator is the owner of the business being conducted thereon.

ARTICLE 3

am/pm Store Systems/Operations Manual; Extranet
3.01 Operator agrees that it shall operate the Store and maintain the Premises in accordance with the standards, methods, procedures, requirements, intrctions, food specifications and equipment specifications set
fort in the ampm Store Systems/Operations Manual ("Manual" or "Systems Manual"), and any and all

subsequent amendments and supplements thereto. BPWCP shall loan to Operator a copy of the Manual which
shall be fushed to Operator upon execution by Operator of ths Agreement; subsequent amendmnts and

supplements shall also 'be loaned and fuhed to Operator and Operator shall be requied to acknowledge
receipt of any of the foregoing loaned materials. The manual may be provided in wrtig, on æ-ROM, via the

intemet, extranet or equivalent means. Operator fuer agrees to .intrct and keep its employees fully inonned of all such methods and procedues as shall be promulgated by BPWCP from tie to tie. The Manua~ as presently constituted and as it may hereafter be amended or supplemented by BPWCP .from tie to tie, is
incorporated in and made a part of th Agreement. Operator acknowledges and agrees tht compliance with the
standards, methods, procedures, requirements, intrctions and food specifications contained IJ the Manual (as

from tie to tie amended or supplemented) is imortt to Operator and to BPWCP. Failure to adhere to the
provisions of the Manual shaH constitute a breach of ths Agreement.

3.02(a) Operator must maintain a computer connection to connect to BPWCP's extranet, though which

BPWCP and Operator may communcate with each other and though which BPWCP may dissemite the
jVIImnal, updates thereto, planogram, inventory books, required stadards and

specifications and other i;i.inndential Inommtion from tie to tie. BPWCP shall have sole discretion and control over all aspects of

"nn .lessee opertor (DOFO) ,'.n/";n. 24\ WR-\ (41200)
; !iiii.'nn

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the extranet, including the content and functionality thereof. BPWCP wil have no obligation to maintain the
extrnet indefinitely, and may dismantle it at any time without liabilty to Operator.
(b) Operator shall have the privilege to use the extranet, subject to Operator's strict compliance with

the Standards, protocols and restrctions that BPWCP may establish from time to time. Such Standards,
protocols and restrictions may relate to, among other things, (a) the use of abusive, slanderous or otherwise

offensive language in electronic conuunications, (b) conuunications between or among operators that endorse
or encourage breach of any operator's ftanchise agreement, (c) confdential treatment of materials that BPWCP

net, (d) password protocols and other securty precautions, (e) grounds and procedures for BPWCP's suspending or revoking an operator's access to the extranet, and (f) a prhiacy policy governing BPWCP's access to and use of electronic conuunications that operators post to the extraneI. Operator
transnúts via the extr

acknowledges that" as adnúnistrator of the extranet, BPWCP can technically access and view any
conuunication that any person posts on the extraneI. Operator fuer acknowledges that the extranet facilty
and all conuunications that are posted to it will become BPWCP's propert, free of any claims of

privilege that Operator or any other person may assert.

privacy or

established and until the tem1nation of ths Agreement) an electronic connection (the specifications of which

(c) Operator shall establish and have contiually available (durg all times that the extranet shall be

shall be specified in the Manual) with the extanet that allows BPWCP' to send messages to and receive messages from Operator, subject to the standads and specifications. Operator shall partcipate and use the
extr

net in accordance with BPWCP's requirements as set fort in the ManuaL

(d) If Operator shall breach ths Agreement or any other agreement with BPWCP or it's Affliates, BPWCP may, in addition to, and without limting any other rights and remedies available to BPWCP,
disable or termate Operator's access to the extranet without BPWCP having any liability to Operator, and in which case BPWCP shall Oiùy be required to provide Operator a paper copy of the Manual and any updates thereto, if none' have been previously provided to Operator, uness not otherwse entitled to the ManuaL.

ARTICLE 4

Hours or Operation and Personal Participation
, 4.01 Operator shall promote the business of the Store and shall cause the Store to be operated
continuously thoughout the tenn of

not less than sixteen (16) hours every day of the year, excluding Chstms, or the maxium hour
pemmtted by applicable law if less thn sixteen (16) hours.

ths Agreement. Operator shall cause the Store to be open for business

. 4.02 Failure of Operator to cause the store to be open for business in the manner and durg the hours and days prescribed herein shall constitute a material ~reach of ths Agreement In addition to any
other remedy available to BPWCP, in the event Operator fails to operate the Store durg the; hour and
days prescnèed in Section 4.01 durg any calendar month durg the tenn of ths Agreement, Operator

shall pay BPWCP, as liquidated damges and not as a penalty, in addition to the royalty fee payable for

such month one theth of the miwn monthy royalty fee for each day Operator fails to cause the Store
to be open for the prescribed hours.
4.03 Operator shall participate in the operation of the am/pm business for a period of at ltast 40

hours per week and if Operator has more than one ampm mi maket, Operator must have one employee for each store, who has attended and successfuly completed the am/pm Store Manger trinig program
offered by BPWCP and who is employed on a full ti basis at each store ("Store Manager"). If Operator

operates more than one am/pm mi market, Operator hereby designtes the person whose name is set fort

in PART I, Section 4.03, hereof as the Store Manger for the Premises .which are the subject oÎ tIs Agreement (with two month of the date such designated person is no longer employed at the store,
Operator must replace such Store Manager with another traied Store Manager or the francmse 'may be

non-lessee 'opetor (DOFO) amlpm-241WR-I (4/2006) Uniform

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teimnated). For purposes of personal participation, Operator shall be the sole proprietor if Operator is a
sole proprietor, the Operational Designee if Operator is a corporation, partership or LLC. The Operational Designee must be an offcer or shareholder if Operator is a corporation, a member or manager of the LLC if Operator is an LLC, a general parter if Operator is a limited partership, a parter ,if Operator is a

partership other than a limited partership. In the case of Concunent Operations at the Premises, as more

fully described in Article 4.05 hereof, Operator is obligated to participate in the operation of all ftanchise businesses for at least 40 hours per week.
4.04 Failure of Operator to participate in the operation of the am/pm business as described in

Section 4.03 and/or, if applicable, to have the Store Manager designated in PART I emproyed at the store on a full time basis and/or, if applicable, to replace such person with another trained Store Manager withn two month from the date the Store Manager designated in PART I or any successor to such person is no
longer employed at the store shall constitute a material breach of this Agreement.

4.05 In the event the am/pm mii market, with BPWCP's approval, is operated at the Premises by Operator in conjunction with another or more than one other BPWCP ftanchise, ("Concunent Operations"),
such Concunent Operations shall be conducted and governed by the tenn and conditions of the ftanchise agreements of each of the applicable ffanchises and any additional special temm, conditions and provisions
relatig to Concunent Operations as may be included in such ftanchise ag:eements or other wrtig with

regard to such operations.

4.06 Each individual who own an interest in the frnchise entity must sign a personal guarantee agreeing to discharge all obligations of the Operator under the franchise agreement. Ths will also be required of the . individual's spouse where the individual lives in or the franchise is located in a communty propert state. BPWCP will only accept as a ffanchisee sole proprietorship, partership, corporation or limited liability
company. A franchisee may not be a trt, custodian or trstee of a trt, nor can a trt, trtee or custodian be

a parer, shareholder or member of an LLC.

ARTICLE 5

Term
5.01 Ths Agreement shall be binding on the pares as of the Effective Date. Except as otherwse
provided in ths Arcle, the "Commencement Date" shall be on the date set fort in PART i. If

set fort in PART I, the Commencement Date shall be the date established by BPWCP by notice to

no date is

Operator ("Notice of Final Inspection and Readiness") as the date the Premlses are available for occupancy and ready for conduct of the business of the am/pm mi market. The term hereof shall end as of i 0:00 a.m.
on the fit day after the last day of

calendar month followig the Conmncement Date as set fort in Par I, uness ths Agreement is

the one hundred twentieth (120il) or two hundred fortieth (240th) full

temmted earlier pursuant to the temm hereof. In addition, BPWCP may, at its discretion, extend the term

of ths Agreement for a period of up to i 80 days by giving written notice to Operator before the end of the

term
5.02 New Construction or Raze and Rebuild.
(a) If ths Agreement is for an ampm mi market that will be newly constrcted after ths Agreement is executed or an am/pm mi market at Premises where an existing BPWCP franchised premises is to be razed
and a new am/pm mi market constrcted after ths Agreement is executed ("New Constrction" or "Rae and

Rebuild"), BPWCP shall provide stadard generic architectual, plumbing and electrcal site plans to Operator. It will be necessary for Operator to have the generic plans modified in order to take into consideration the
topographic featues of the Premises, meet the zonig, setback, easem~nt, sign codes, local building codes and
other requirements. Operator shall promptly do all of

the followig:

T1on-k~see opertor (DOFO) an1l!,'n- 24IWR-I (4/2006)
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A. Have prepared and submit to BPWPC, for approval, in a fommat provided by BPWCP or

acceptable to BPWCP, a Site Investigation Report which includes, but is not limited to, detailed
Development Guidelines, Requirements and Restrictions, Roadway Considerations, Approval Process, Assessments and Fees, Project Timeline, Cost Estimate and Site Photographs.

B. Have prepared and submit to BPWCP for approval, architectural and constrction plans
and drawings for the am/pm mirù market specific to the Premises.

right to occupy and modify the Premises .

C. Submit to BPWCP a copy of the deed, lease or other documents evidencing Operator's

D.' Maintain satisfactory creditwortiness and submit to BPWCP all documents reasonably
requested by BPWCP 10 verify Operator's financial ability to constrct and operate the am/pm mini market.
With 60 days after BPWCP's approval of the architectual plans and drawings, Operator shall apply

for all licenses, pemmts, variances and other required governental approvals(collectively "Pemmts") necessary for the New Constrction or the Rae and Rebuild. BPWCP, at its sole discretion, may provide assistance in obtaing Pemmts. All expenses in connection with obtainng Pemmts shall be Operatots responsibility.

All changes to the BPWCP approved plans to meet local building codes and other governental requirements

' and changes not resultig from governental requirements must be subm.tted to BPWCP in writig with , drawigs and specifications and approved by BPWCP in advance of constrction. If changes are madated by
govenuental authority, a copy of the specific intrctions to change the plans shall be submitted along with the
request for approval of the changes. Any changes not mandated by govenuental authority shall be submitted
simultaneously as one consolidated request for modification of

the approved plans.

All constrction of the am/pm mi market and Premises shall be in accordance with plans and drawings

approved by BPWCP and, once constrcted, Operator shall not make alterations or changes to the Store or
Prem.ses durg the teim of ths Agreement, except with the prior wrtten consent of BPWCP. Prior to the sta of constrction, Operator shall tranmit a complete constrction drawig set in electronic fonnt to BPWCP.
Softe fonnt shall be AutoCAD release 14 or 13. Drawigs created on softre other than those AutoCAD
versions shall be converted prior to trnsmittal. Multiple drwig files shall be contained on either a 100 mega

bYte zip disk or 650 megabyte compact disk. Single sheet or small fies, 1MB or less, shall be emailed to a
designated addressee. All cross references must be bowwd prior to transDD~l.

If Operator uses a BPWCP approved architectual rim to prepare the Site Investigation Report and all

arcmtectual plan and drwigs; and after Operator has paid the total Intial Frachise Fee set fort in Arcle 7, BPWCP shall reimure' Operator up to a maImwn of $20,000 for the fees and expenses incured for such
Report and plan and drawigs upon submission to BPWCP of satisfactory docwnentation of-the paymnt of

such fees and expenses to such arcmtectul rum but no sooner than the start of constrction.
(b)
Store is located.

Operator shall obtain a license to sell beer and wie if lawfl in the jurisdiction in which the

(c) If this Agreement is for New Constrction, Operator shall begin constrction with 18

months of the Effective Date and complete constrction and open for business with 24 months of the Effective

Date.
(d) If ths Agreement is for a Raze and Rebuild, Operator shall complete constrction and open
for business withi 12 month of

the Effective Date.

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(e) Only in the event that Operator is not able, for reasons beyond Operator's control, to obtain pennts required for New Constrction or Raze and Rebuild or obtain a beer and wine license, if lawful in the jurisdiction where the Premises is located, Operator may terTnate this Agreement within 18 month of the
Effective Date if this Agreement is for New Constrction or 12 months of the Effective Date if

for a Raze and Rebuild. In the event of such terTnation by Operator, any initial franchise feethis Agreement is paid to BPWCP

shall be refunded after deducting the greater of either BPWCP's out of pocket expenses incuITed or $ 1500. No

interest shall be payable on any refunded amounts. '
(f) In the event that Operator fails to timely comply with any of the requirements set fort herein,

does not complete the New Constrction or Raze and Rebuild, obtain a beer- and wine license, if available, and satisfactorily complete the initial training described in Article 16 of this Agreement within the time limits specified, in addition to any other remedies BPWCP shall have under this or any other agreement, BPWCP may

tennate this Agreement. ,
traing, BPWCP shall issue the Notice of Final

, (g) After Operator has completed constrction and successfully completed required intial

Date. If Operator fails to open the Store for business on the Commencement Date as established by the Notice of Finl Inpection and Readiness, in addition to any other remedies provided in ths Agreement, at its option, BPWCP shall have the right to collect, as liquidated damges and not as a penalty, in addition to the mium

Inspection and Readiness settg fort the Commencement

royalty fee, one theth of the mimum royalty fee per day for each calendar day operator fails to open the Store for business. In addition, if Operator fails to open the Store for business with 30 days after the Commencement Date, in addition to any other remedies BPWCP has under ths Agreement or any other
agreement between

the partes, BPWCP may terrnate ths Agreement. In addition, in the event of such

tennation pursuant to ths subparagraph, the Intial Franchise Fee shall not be refudable in whole or in part.

5.03 Retrofit or Rebrand.
(a) If ths Agreement is for an existig am/pm mi maket that does not meet BPWCP's curent visual and design standards, Operator shall made modifications to the am/pm mi maket and the Premies in accordance with the Retrofit Program Design Intent, Visual Standards and approved ampm Store layouts
provided to Operator ("Retrofit Program"). Such Retrofit Progr includes building enhancements, intallation
of

new fitues, including shelving gondolas and sales counters, new equipment and new graphics as specified in

the Retrofit Program Design Intent. Operator shall obtain at its expense all necessary pennts and licenses to
complete such modications and installations. In the event tht perTts necessar for the retrofit are obtained by
BPWCP and assigned to Operator, Operator shall reimbure BPWCP for its out of perTts. Operator shall complete the Retrofit Program no later than nie month after the Effective Date of

pocket costs to obtain such

Agreement.

ths

shall mae modifcations to the store and Premises to comply with, at a mium the Retrofit Program In

(b) If ths Agreement is for an exjstig convenience store tht is not branded ainpm, Operator

addition, BPWCP and Operator may agree to additional modifications. Operator shall apply for all necessary
pemúts and licenses to complete such modifications and intallations. Operator shall complete the Retrofit
Progr and any additional modifications no later than nie months after the Effective Date of

ths Agreement
(c) Operator shaIl maintain satisfactory creditwortess and submit to BPWCP all documnts

reasonably requested by BPWCP to verify Operator's financial abilty to retrofit or rebrand 'ånd operate the ampm mi market. If Operator fails to complete the Retrofit Progrm with nie months of the Effective Date of ths Agreement, in addition to any other remedies BPWCP may have under ths Agreement or any other agreement between the parties, BPWCP may tennate ths Agreement.
(d) . All costs and expenses in connection with the Retrofit Program modifications shall be at the

sole expense of Operator. If Operator uses BPWCP approved architectul fim to prepare all architectul
non-lessee opertor (DOFO) amlpm-.241 WR-I (4/2006) Unifonn

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plans and drawings to Rebrand a convenience store, but not to Retrofit an existing am/pm mini market, and after Operator has paid the total Initial Franchisee Fee set fort in Artcle 7, BPWCP shall reimbure Operator up to a maximum of $20,000,00 for the fees and expenses incurred for such plans and drawings upon submission to BPWCP of satisfactory docwnentation of the payment of such fees and expenses to the approved architectural finn but no sooner than the start of the retrofit constrction.
(e) After Operator has completed the retrofit or rebrand work and training, if applicable, BPWCP

shall issue the Notice of Final Inspection and Readiness setting forth the Commencement Date. If Operator fails
to open the Store for business on the Commencement Date as established by the Notice of

. Readiness, in addition to any other remedies provided in this Agreement, at its option, BPWCP shall have the

Final Inspection and

nght to collect, as liquidated damages and not as a penalty, in addition to the miimum royalty fee, one thrtieth

of the minimum royáity fee per day for each calendar day operator fails to open the Store for business. In addition, if Operator fails to open the Store for business within 30 days after the Commencement Date, in
addition to any other remedies BPWCP has under this Agreement or any other agreement between the parties,

BPWCP may temmnate ths Agreement. In addition, in the event of such termation pursuant to ths
subparagraph, the Initial Franchise Fee shall not be refudable in whole or in part.

5.04 Upon expiration of the term of this Agreement if ths Agreement is the intial Store Agreement for the Premises, Operator shall have the right .to be offered a subsequent ffa..cruse Agreement for the Premises wruch nght can be exercised by payment of the then-curent Renewal Franchise Fee or other fees wruch may
then be payable and by execution of a new francruse agreement and collateral agreements on the tenn and

conditions then existig, which may differ materially from those presently existing, provided that:

(a) Operator gives BPWCP wrtten notice of its election to be offered a subsequent frnchise agreement not less thn six month prior to the expiration of the term of the intial Store Agreement ("notice of election"); and
(b) Operator, at the time of the notice of election and at the end of the term of the intial Store

Agreement is not in default of any of the tenn or conditions of such Store Agreement or any other agreement

between Operator and BPWCP and has substantially complied with the tenn and conditions of all such
agreements durg the term of

such Store Agreement; and

(c) All of the Operator's accrued monetary obligations to BPWCP have been satisfied and tiely
met thoughout the term of

the intial Store Agreement; and

, ' (d) Operator is in compliance with the standards set fort in the then-curent Systems Manual and

has made or has provided for, to BPWCP's reasonable satifaction, such renovation and moderntion of Operator's Premises as BPWCP may reasonably require, including, without limtation, sign, equipment,
fushigs, and decor so as to reflect the then-curent image required for new am/pm mi markets; and

(e) BPWCP has not exercised its nght to withdrw from marketing and to no longer mainta the am/pm mi maket frcruse in the relevant geogrpruc area in wruch the Premises are located.
5.05 If th Agreement has a term of 240 months, after 120 month, Operator wil make such

modifications and imrovements as may be required to comply with the then curent visual and design stadards

for am/pm mi makets' and which may include such items as paintig, intallation of new fixtues and
equipment and compliance with new visual standards but shall not include major strctual modifications.

This space is intentionally left blank
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ARTICLE 6

Premises and Store Equipment
6.01 The am/pm nnni market franchise granted hereunder is for the operation of an am/pm nnni ma~ket
on the Prennses set fort in PART I hereof

which must have prior approval from BPWCP ("Premises") during

the term hereof and may not be relocated to another site.

(a) If no address has been inerted in the space provided in Part I at the time of execution of this
Agreement, Operator shall promptly followig the execution hereof (but in no event more than 6 months

following the Effective Date) locate one or more proposed sites which meet BPWCP's then-current Standards and specifications, .which must be located within the Target Area designated by BPWCP in Part i. Operator shall submit to BPWCP such demogrphic and other informtion regarding the proposed site(s) and neighboring areas as BPWCP shall require, in the form prescribed by BPWCP ("Site Review Request"). BPWCP may seek such additional inormtion as it deems necessary Operator shall respond promptly to such request for additional infommtion. If BPWCP shall not deliver wrtten notice to Operator that BPWCP accepts the proposed site, with 30 days of receipt of Operator's Site Review Request, or with 10 days after receipt'of such additional requested inormtion, whichever is later, the site shall be deemed rejected; If BPWCP accepts the proposed site it shall notify Operator of its acceptace of the site ("Acceptance"), which Acceptance shall be subject to Operator enterig into a finllease or purchase agreement, and such other conditions as BPWCP may imose. Promptly followig mutual execution of ths Agreement, or Operator's receipt of Acceptance, if no address has
been inerted in the blan space provided above, Operator shall proceed to negotiate a lease or pUrchase agreement for the site. Operator's enterig into any lease or purchase agreement for the Premises UIess

Operator has received Acceptace relating to the proposed site is at Operator's sole discretion and at Operator's
sole rik. Upon Acceptance of

the proposed site by BPWCP, such site shall be deemed to be the "Premises" as
in obtaing an acceptable location.

defied above.
(b) BPWCP may voluntarily (without obligation) assist Operator.

Neither BPWCP's said assistance, if any, its acceptace of Operator's proposed site, nor its acceptace of the

proposed lease or purchase agreement shall be constred to insure or guartee the profitable or successful operation of the Premises by Operator, and BPWCP hereby expressly disclaim any responsibilty therefore.
Operator ackÌowledges its sole responsibility for fiding the Premises. Operator acknowledges its sole

responsibility for rinding each site (or the Store it develops puruant to ths Agreement.
6.02 Operator is required to have intalled on the Premises the equipment

"Store Equipment" attached to PART I ("Store Equipment"). Operator agrees to intall the Store Equipment on
or before the Conuencement Date. Certin Store Equipiint mut be purchased or obtained from approved

shown on the list entitled

suppliers, as set fort in the Store Systems ManuaL. All Store Equipment must meet BPWCP's specifcations,

including but not linted to specifications with respect to brand, model, size, color and quality, Operator may not intall additional equipment, fixtues or machies without the prior wrtten consent of BPWCP. Operator
shall maintain all equipment, includin required and optional equipment, ready for use and in operable condition and shall use or pennt the equipment to be used only for its intended use and only in a maer consistent with

the maufactuer's intrctions, and Operator shall utilize the equipment and exert Operator's best effort to
promote the retail sale of items or services for which the equipment is designed. Operator agrees not to remove

any of the Store Equipment from Store without' the, prior wrtten consent of BPWCP except in the 'event
replacement of

the equipment is necessitated by malfuction, in which case Operator shall replace the equipment

With the then curent equipment or equipment meeting the sam specifications' with respect to size, color and quality as the equipment replaced, if the malfuctioning equipment is less than 3 years old.. Operator shall'

notify BPWCP of any such replacement. BPWCP reserves the right to add or delete Store Equipment during the tenn of the Agreement and Operator will intall or remove such Equipment with 90 days after wrtten notice from BP.wCP. If specifications for Store Equipment or approved suppliers for Store Equipment are diaiiged by BPWCP,any replacement of Store Equipment by Operator, due to wear and tear, malfuction,
nnn-I,:ssee operator (DFO)
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depreciation or otherwse, shall be with the then current Store Equipment. Qtherwise, Operator wil be required
to obtain the then current Store Equipment upon renewaL.

6.03 Operator shall not operate other business within the am/pm mii market, the building housing the

am/pm mini market or on the Premises without the prior consent ofBPWCP.

ARTICLE 7

Fees

7.01 (a) Operator shall pay BPWCP an Initial Franchise Fee or Renewal Franchise Fee in the amount

set forth in PART i. The Initial Franchisee Fee is payable as follows: one half upon the signng of tls
Agreement ~y Operator; The remainder of

the Initial Franchise Fee is payable on the Commencement Date. The Initial Franchise Fee shall not be considered paid until paid in full.

(b) The Initial Franchise Fee is not refud"ble in whole or in part except for the followig
circwntances:
(I) If ths Agreement is for New Constrction or Raz= and Rebuild at the Premises, after

Operator executes the Agreement, BPWCP shall have up tò 90 days to execute the Agreement.

BPWCP shall not be obligated under the Agreement until it is executed by BPWCP. If
BPWCP elects not to execute the Agreement, BPWCP shall notify Operator and shall retu

in full, any Intial Fee paid by Operator.
(2) If th Agreement is for New Constrction or Rae and Rebuild, and the Operator

fails to complete the New Constrction or Raze and Rebuild, obtain a beer and wie license, if

lawf in the jurdiction in which the Premies is located, satisfactorily complete the intial
traing program or meet the requirements of Arcle 5 or 6.01(a) with the tie limts

specified, BPWCP may tennate ths Agreement and refid one half of the total Intial
Franchise Fee provided tht in the event Franchise Fee, BPWCP shall retain

Operator has paid only one half of the Intial
the one-half

payment and there shall be no refud.

(3) If ths Agreement is for New Constrction or a Rae and Rebuild and the Operator tenntes ths Agreement with 18 month for New Constrction or 12 month for Rae and

Rebuild after the Effective Date of ths Agreement pursunt to 5.02 (e) for inbility to obtain pennts or a beer and wie license for reasons beyond Operator's control, BPWCP wil refud the Intial Franchise Fee paid after deductig the greater of either BPWCP's expenses incured in contemplation of Operator operatig an ampm nn market or $ 1,500.00.
(4) The Initial Frachise Fee or Renewal Franchise Fee shall be prorated on a monthy
basis

over the term of the Agreement from the Commencement Date to the tennation date

and shall be refudable or payable on such prorated basis if BPWCP tenntes the Agreement for the followig reasons:
(i) Operator's death;

(ii) Operatots physical or mental incapacitation, for more than 90 consecutive days,
which renders Operator unable to provide for the continued proper operation of

am/pm nn maket;
(ii) Condemnation or the takig, in whole or in par, of

the

power Of emient domain;

the Premises pursuant to the

non-lessee opetor (DOFO)
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(iv) Destrction of all or a substantial part of the Premises though no fault of the
Operator; or,

(v) A detennation made by BPWCP in good faith and in the nonnl course of
business to withdraw from and to no longer maintain the marketing of Motor Fuels

though retail outlets and/or the am/pm mii market franchise in the relevant
geographic maket area in which Operator's am/pm mini market is located.

In the event Operator's Initial Franchise Fee or Renewal Franchise Fee is returned in whole or in
part for any reasons, no interest shall be paid on the amount returned. .

BPWCP's policy with respect to the payment of the Initial Franchise Fee or Renewal Franchise Fee for any tenn of the franchise offered in the futue may differ from that set fort above and, accordingly,
schedules of payments and due dates of payments shall be in accordánce with BPWCP's then current policy.
(c-)

If ths Agreement is for Operator's subsequent tenn of the Franchise at the Premises, the Renewal

Franchise Fee ("Renewal Fee") is payable as follows: ,
Amount Payable
One thd of

Due Date ofPavrent for Operator's Subsequent Term

the total amount payable - On the Connencement Date of ths Agreement the total amount payable - On the i st day of the 2nd year of the term of ths Agreement One thid of the total amount payable - On the 1st day of the
One thd of 3rd year of the term

Agreement

of

ths

Notwthtading the foregoing, payment of any remaing balance due and owig BPWCP on
account of the renewal fee shall be accelerated to become due and payable on or before the effective date of termation of ths Agreement and, at BPWCP's sole discretion, on or before the effectie date of the sale, iraIIfer or assignment with BPWCP's consent of Oper¡¡tor's interest in ths Agreement and on or before the
effective date a designted successor-in-interest asswnes all of a deceased or incapacitated Operator's duties and

obligations under ths Agreement and other agreements with BPWCP.
the Renewal Franchise Fee is not the obligation to mae accelerated, the transferee' or successor-in-interest must asswne payments.
If

The Renewal Frachise Fee is not refidabIe, in whole or in part, except in the circumtances
described in Arcle 7.0 i (b)(4) of

th Agreement.

In the event Operator's Renewal Frachise Fee is retued, in whole or in part for any of the

reason, no interest shall be paid on the amount retued.
BPWCP's policy ,with respect to schedules of

the Renewal Francruse Fee for any ter of the frchie offered in the futue may differ paymentsthose set of above from on account fort
and, accordingly, schedules of payments and due dates of

payments and due dates of

curent policy.
(d) Operator shall pay an hhtial Development Fee, if

payments shall be ii accordance with BPWCP's then

follows: one-half is payable at the tie the Operator executes ths Agreement and the other half is payable on the
Connencement Date.

applicable, in the amount set fort in PART las

non-lessee operator (DOFO).
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Article 7.01(b)(4) of

The Initial Development Fee iii not refundable in whole or part except in the circumstances described in this Agreement and no interest shall be paid on the amount returned.

7.02 (a) Unless otherwise agreed to in writing by the parties, Operator shall pay BPWCP, as a monthly royalty

fee, six percent (6%) of'the monthly gross sales, as that tenn is hereinafter defined, but not less than the nnnimum royalty fee set fort in PART i. Notwthtanding the foregoing, unless otherwise agreed to in wrting
by the parties, in the event Operator operates the Store twenty-four (24) hours of every day in any given calendar month, the monthly royalty fee for such a month shall be five percent (5%) of the monthly gross sales, but not less than the mimum montIy royalty fee set fort in PART I. .

The nnnium monthly royalty fee is payable on the Commencement Date and thereafter in advance on 9r before the first day of each calendar month durg the tenn of this Agreement. For any month this Agreement is in effect which is less than a full calendar month, the mimum monthly royalty fee shall be
prorated on a daily basis.

BPWCP shall have the right to increase the amount of the royalty fee at any tie by up to one
percent (1%) durg the tenn of

ths Agreement in accordance with BPWCP's then prevailing royalty fee policy.

BPWCP shall notify Operator not less than 90 days in advance of any such c~ange in royalty fee.
(b) As used herein the tenn "gross sales" shall mean the total amount of the sales of Operator and

any inventory varation calculated as described below.
(1) Gross sales shall be valued in United States cWTency, whether received in that fonn or

otherwse, without deduction on account of any of the followig:

(i) the cost of the goods sold, including taxes paid by Operator in procurig goods for
resale;
(ii) the cost ofmatenal used, labor or servce cost, interest paid, or any other expense;

or
(iii) cost oftraI:porttion of

the goods.

(2) Gross sales includes all cash, credits, propert or other consideration received for:

(i) all sales of merchadise made from or in the Store or in lhe imediate vicinity of the store, including, but not limted to, a cart kiosk, drve tlu or sidewalk sale;
(ii) all compnsation received for services pedonned from or in the Store including but
not limted to, conmssions and referral, commssions on lottery 'and lotto tickets (including
all payments by state agencies for the sale of tickets and for the redeemig of

handling and placement fees and fees for placement of coin operated and other machies; and

wig tickets),

(ii) all rentals of equipment or merchandise.

(3) The inventory variation shall be detem1ed each tie a physical inventory is taken of
merchandise curently held for sale in the Store, as required in Section 15.03 (b). The inventory
varation is defied as either the inventory ~ain (phySical inventory value is greater ttan book

inventory) or the inventory loss (book inventory value is greater than physical inventory). The inventory varation subject to gross sales calculation for royalty reportg is the inventory varation in
excess. of the allowable varation. Detailed' calculations for variations and allowable variations are

fuer descrbed in the Store Systems ManuaL.

non-lessee optor. (DOFO)
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(4) The following are not included in gross sales:

(i) gasoline and other motor fuel sales, if any, including all applicable motor fuel and
sales taxes;

(ii) any deposits refunded to customers;

(Hi) sale price of propert returned by customer when the full sale price is refuded
either in cash or credit. Where the customer is required to exchange retÜmed merchandise for
othçr new merchandise, the cashier is required to ring the sale of the new merchandise on the

register and the sale of the new merèhandise is includedin'gross sales subject to royalty. For
the purpose of ths paragraph, refud or credit of the entire amount shall be deemed to be

given when the purchase price, less rehandling and restocking costs, is refuded or credited to
the customer;

(iv) the amount of any tax imposed by the United States or any city, county, state, or

other governental entity or agency or intrentality thereof upon or with respect to retail sales of tangible personal propert measured by a stated_percentage of sales price or gross
receipts, whether imsed upon the Operator, as a seller, or upon the customer, as a purchaser.

made during the first 7 days of the term of the frnchise, i.e., durg the period comprised of the Commencement Date as established by the "Notice of Final Inpection and Readiness"
and the next succeeding 6 days of intial operation.
(vi) store sales made durg an eligible Grand Openig Event for a new store, or for an

(v) for newly constrcted or raed and rebuilt ampm mi markets only, store sales

existig store, followig completion of BPWCP-approved retrofit, remodeling or rebuilding. An eligible Grand Openig Event, wruch event is not to exceed seven consecutive days, is
more fully described in Arcle 14.02 hereof. .

on or before the tenth (iOth) day of the calendar month succeeding the month, in wruch the sales were made for
wruch said fee, is due. Payment of the royalty fee shall be made in accordance herewith and with fomm and procedures set fort in the Systems ManuaL.

(c) Any monthy royalty fee due in excess of the mium monthy royalty fee shall be payable

7.03 Operator shall pay to BPWCP a securty depsit in the amount set fort in PART I on or before the
Commencement Date of ths Agreement. If Operator shall be in default at any ti in the pedommce of any of

the tenn and conditions of ths Agreement, BPWCP, at its option, shall have the right, in addition to any other
remedy it may possess either at law or at equity or under the term of

ths Agrement, to conect said default and deduct any cost or expense in coruection therewith from said securty deposit. hmediately upon application of all or par of said securty deposit towad any such cost or expense, Operator shall pay to BPWCP an amount
equal to that porton of the securty deposit so applied so as to restore the securty deposit to the amount stated

above. Except as provided herein the securty deposit, less any depletion because of default by Operator shall be refuded to Operator without interest upon temmation of ths Agreement.

7.04 Unless otherwse agreed to in writing by the partes, commencing on the Commencement Date, Operator shall pay an advertsing and promotion fee for each month equal to 5.5% of Operator's gross sales.
("Gross Sales" is dermed in Section 7.02 above.) At any tie durg the term hereof, on th (30) days' prior
wrtten notice to Operator; BPWCP may increase or decrease the advertising and promotion fee, but

the total

advertising and promotion fee may not be increased to more than six and one-half percent (6.5%) at any tie

during the tenn of ths Agreement and BPWCP may not increase the fee by o;ore than one percent (1 %) in any
c.'"le,ndar year. The advertsing and promotion fee is payable on or before the tenth (10th) day of the calendar
non-lessee opetor (DOFO)
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month succeeding the month in which sales were made upon which the fee is calculated. In addition, Operator
may be required to pay shipping costs, plus the cost of replacement signs, if

Operator requests duplicate signage.

7.05 Any fees and other amounts due and owing BPWCP pursuant to ths Aricle and any other
provisions of

ths Agreement shall be paid when due by Operator to BPWCP, at BPWCP's option, to BPWCP's

address set fort in the Systems Manual or BPWCP's representative, by money order approved by BPWCP,

business check, casruer's check, wie transfer or electronic funds trnsfer initiated by BPWCP, wruchever BPWCP directs and which may change from time to time at BPWCP's sole discretion. Operator's financial institution though which payment by electronic funds transfer intiated by BPWCP is made must be a member of NACHA (The National Automated Clearing House Association). If any Agreement between Operator and BPWCP requires or pennts payment by check, all checks shall be made payable to "BPWCP" or "BP West
Coast Products LLC," and to no other person, finn or entity. If such Agreement requires or pennts payment by wire transfer, all such payments shall be made to "BPWCP, c/o Citibank NA, Fòr Credit to BP West Coast
Products #4051-4874 ABA 021000089, New York, New York 10043," and to no other ban or account number

unless so advised in wrting by the Credit Manager, BPWCP. If such Agreement requires or pennts payment by automated clearig house ("ACH"), all such payments shall be made to "BPWCP", c/o Citibank Delaware, For
Credit to BP West Coast Products - ACH #3815-2114, New Castle, Delaware 19720," and to no other ban or

account number uness so advised in wrtig by the Credit Manager, BPWCP. If such Agreement requires or pennts payment by electronic fuds tranfer ("EFT"), all such payments shall be made in strct accord with
procedures established and promulgated by the BPWCP credit departé'ít. Operator agrees

to indenmfy BPWCP for any loss or expense caused by Operator's failure to comply with th Paragraph. Payment shall be deemed made when, and only when, its receipt has been verified by BPWCP. Receipt by BPWCP of any monies due BPWCP after notice of termnation or non-renewal does not constitute a waiver by BPWCP of such

notice oftennation or non-renewal. '
ARTICLE 8

Licenses, Permits, Taxes and Compliance with Laws

8.01 Operator agrees to obtain post as required, and ,maintain at its expense, all pennts and licenses
necessary for the operation of the Store and Store Equipment includig, without litig the foregoing, all

pennts and licenses required for selling beer and wie, if available pursuant to applicable laws and regulations, and for sign used or intalled by Oprator. Operator agrees to pay promptly when due and to hold BPWCP hiiess from all ad valorem taes assessed upon the Premises and all fees, and sales, use, rental, gross receipts,

inventory, excise, income, business and occupation and any other taxes (includig interest, penalties and
additions to ta) imosed by any federal, state or local governental authority upon Operator or BPWCP

BPWCP) in connection with the operation of the Store or in connection with any payments made puruant to ths Agreement. Opertor agrees to pay
(except those taes based upon or measured by the net income of

promptly when due and to hold BPWCP han1ess ttom any taes (including interest, penalties aid additions to

tax) imosed upon any propert of Operator located at or used in connection ~th the operation of the Store.
Operator agrees to pay promptly when due and to hold BPWCP hamess from all sales or use taes and other

simlar taxes (includig interest, penalties and additions to ta) imosed upon or with respect to charges for the
use of any loaned propert. Oprator fuer agrees not to do any act which may result in the suspension or

revocation of any pennt or license required for the operation of the Store. Operator shall fush to BPWCP, promptIyupon request, any docwnentation, which in BPWCP's sole discretion is required to evidence the
payment of any tax, including but not limted to, offcial receipts of the appropriate taxig authorities, copies of

tax retus and cancelled checks. '
regulations, directives or orders, affecting the operation of

8.02 Operator shall at all times operate the Store and Premises in strct accordance with all applicable federal, state and local laws, ordinances, rules, regulations and lawfl directives or orders of public, offcials
admsterig such laws. Operator agrees to imediately notify BPWCP, in wrtig, of any citations, notices of violation or 'other conuuncations alleging violations of federal, state or local laws, ordùces, rules,

the Store and Premises.

non-lessee operator (DFO)
am/pm- 241WR-1 (4/2006)
14 of 34

Unifonn

92

Case 5:07-cv-04808-JF

Document 38-2

Filed 06/06/2008

Page 20 of 42

8.03 Operator represents and warrants that as of the date hereof, Operator is in compliance with all
¡eases, contr'actsand agre,ements affecting the Premises and Operator's use and possession of

the Premises.

ARTICLE 9

Utilties
9.01 Operator shall be providedsolely responsible for all costs Store. .on utilities used at or to the of and taxes and assessments
ARTICLE 10

Appearance, Housekeeping, Maintenance, Right of Entry and Crisis Management
10.01 Operator shall comply with the housekeeping and maintenance provisions set fort in the Systems Manual and shall maintain the Premises, Store and Store Equipment in a clean orderly, safe, graffiti free,
sanitar and operable condition. BPWCP shall perfonn periodic inspections, for which repeated failure or poor
performnce is grounds for termtion or nonrenewal of

ths Agreement.

10.02 In addition to the requirements of Section 10.01, Operator shall perfonn all maintenance, ,
repairs, and replacement, as necessary, of the Premises, Store and Store Equipment. Replacement equipment

must meet BPWCP's then-curent specifications.

Notwthtanding the foregoing, in the event of destrction of the Premises to the extent that the norml authoried wes are no longer practicable, either par may ternate ths Agreement with 120 days of such destrction by givig the other part wwtten notice. The effective date of such termtion shall relate back to

the date of destrction. '

, Accidents occurg at the Premises resultig in personal injur are to be reported in wwtig inediately
to BPWCP; such report shall include names and addresses of people involved, names of inurance companes
involved, or potentially involved, and details of

the accident.

10.03 Operator shall allow BPWCP the right of entr at all ties and the right to remain on the Preiises
for exannation and inpection o