Free Stipulation - District Court of California - California

Case 5:07-cv-04808-JF

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Filed 06/06/2008

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EXHIBIT B

TO SECOND AMENDED COMPLAINT

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Facilty Number: ~
Customer Account Number: 0996439
Category: NTI

am/pm MINI MARKET AGREEMENT

THIS AGREEMENT is made ~ ~J between BP West Coast Products LLC, a Delaware limited
liabilty company, with an oHice ~t4~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 liabilty company i"LLC"I; il partnership, the names of all partners and State 01 Organization; if limited partnership, the names of all general partners

and State of Organization; if corporation, the State of Incorporation; if LLC. the State 01 Organization)

with an address at 631 San Felipe Road, Hollster. CA 95035 ("Operator").
Operator desires to be the franchisee of, and BPWCP is wiling to grant 10 Operator a franchise for, an am/pm mini

market located al the Premises set forth in PART I (which togelher with the buildings and improvemenls 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 ollhe mutual covenants and promises contained in PARTS I and II hereol, each of the parties intending to be legally bound herebý, agrees as follows:
PART I

P ART I contains specific term which relate to the terms and conditions set forth in the corresponding sections - P ART II, Form

No. am/pm- 240WR-I (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 term of
this Agreement shall begin on the, ("Commencement Date"), and shall end at 10 a.m. on the first day after U1e last day of

th'e (j 120ih 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 ¡20th shall be deemed checked. If no date is set forth in this PART I, the
Cqmmencement Date shaIJ be established by the "Notice of Final of

Inspection and Readiness" provided for in Section 5.0 I

6.01

PART II. Premises:

631 San Felipe Road
(complele address by streel number, including, where applicable, designaiion of comer)

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

II.

Par

6.01(a)
7.01 (a)

Target Area:

7.01(c)

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):

n(1n.l, '~"il" operator (DOFO)
arrl/p'I!.:~'11WR.1 (412006)

Uniform

10f4

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

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 Dale. All equipment must be obtained from approved vendors, or, if 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 if excluded) Installed bv ODerator
BUILDING am/pm Sun & Moon Sign

Building Fascia (llwnnated)
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 Warmer (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
Chil/Cheese Dispenser

Condiment Dispenser (6 position) Convection Oven wlRacks

Food Merchandising Warmer (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)
20f 4

amtpm-241 WR-1 (4/2006) Uniform

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Facilty Number: 82461

(Check only Required Equipment to be Furnished and if excluded)
Installed bv Operator (continued)
FOUNTAIN Bulk C02 (vendor supplied) Maniiovoc 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 P~S System with PayPoinl(I (BPWCP Approved)

Safe
Video Surveilance Equipment

VSAT Equipment: (I) Hughes,sarelJile 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:

:íems indicated as vendor supplied may be supplied by vendors in connection with vendors' products. Operator shall be -'..rnished with a list of approved vendors and/or a copy of BPWCP's specifications for all required equipment upon ..",ecution by Operator of this Agreement.

This space is intentionally left blank.

''''''!'':-..';ee operator (DOFO) :.\rií¡,rn.241WR.1 (4/2006)
¡ Ir:i' :--"T'

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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-l (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 DERIVED 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-//-00

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

Check one:

Oa Oa
By:

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

~~~
to ) wl fJ~
n/a
n/a nla n/a

general partership;

limited liability company;

Oa

0a

CA

limited partership; coiporation

~

By:

Name:
Its:
Date Signed:

By
Name:
Its:
Date Signed:

n/a
n/a n/a nla
n/a

By

Name:
fts:

n/a n/a

Date Signed: n/a
non-lessee operator (DOFO)

ani/pm'241WR-1 (412006) U"ilmm

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am/pm MINI MART AGREEMENT
PART

II

General Terms and Conditions

ARTICLE I

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

Service Marks, Trademarks and Service Names

1.01 Subject to the temm and conditions specified herein, and to the extent of BPWCP's rights therein, BPWCP hereby grants to Operator, beginning on the Coimencement Date as defined in Section 5.01 and continuing during the tenn 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 and non BPWCP franchises and franchises operated by BPWCP's whoIly 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 maries for

"am/pm" for retail grocery store and convenience store services and trademaks for various products. BPWCP has been granted federal registration for cerrin "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 tl (30) days' prior notice thereof. In the event of any change,
alteration or modification of

the service mak or servce name, Operator agrees tht only the service mark or

servce name, as changed, altered or modified, shall be used by Operator to identify the Store. If

the service 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 naes used in connection with ampm 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 wiIl intall such modifed marks, colors or
design at Operator's expense.

the ampm servce mark and servce .name by any person, rum corporation or other entity (collectively referred to as
"person"). At its expense, BPWCP shall challenge all wwauthoried uses or ingements of the ampm servce mak, trademark and 'service name, and BPWCP shall have the sole right to decide whether to

L.03 Operator agrees that it shall notify BPWCP promptly of any unauthoried use of

prosecute any person who unawflly uses or attempts to use BPWCP's ampm service mak, trdemak or 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 with its control in connection with any such
challenge or prosecution.

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

s01'. 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 ampm mi markets and appearig on ampm stores. C¡p~!'ator hereby agrees: not to claim any right, title or interest in or to said service maks, trdemaks or s:: "'.", ,. names; not to directly or indirectly deny, assail, or assist in denyig or assailing the sole and
r,.'r..lp,.",,(' opertor (DOPO)
".,;.';. '!.4IWR-I.(4/2006)

. ;..,!t~ Td

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exclusive ownership of BPWCP in said service marks, 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 tennnation of this Agreemenl 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 tennnation 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 opèration of an am/pm' store as provided hereunder, and in accordance with the standards,
tenn 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 ofBPWCP, 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 wil, service marks, trademarks and service names.

1.07 Operator agrees, imediately upon the temmation of this Agreement or termtion of any
subsequent Store Agreement to cease and forever abstain from using the am/pm service mak and service name and other service maks, 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 tenn of tls
agreement to use BPWCP's llanchise accountig system softare at the am/pm mi market and display at Operator's am/pm Store copyrghted ampm signage, posters, and other advertsing and point of purchase materials. No rights of reproduction or distrbution are included in the grant, and upon termation for any

materials. .
-C.

reason Operator shall inediately cease and desist 110m using or displayig any such copyrghted

Trade Secrets and Confidentiality

1.09 BPWCP shaH fush or mae available to Operator for use solely in connect1on 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 fonn and materials. Operator agrees durg the tenn

of ths Agreement and after temútion to keep confdential and not to fuish inommtion as to the methods of operation, advertsing programs or ideas, .business inommtion, or any other confdential inorntin 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 parties sliall limit the ability of the Operator to consult with any tax advisor regarding tax issues pertaing to the ampm lÌanchise business.

nc"õ.lessee opertor (DFO)
:r"'f!rT- 241 WR-I (412006)
~.hitnmm
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ARTICLE 2
Relationship of Parties
2.0 I Neither Operator nor any of its employees shall 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 shall not bind nor oblig'ate BPWCP in any way, manner or thg whatsoever, nor shall
Opera

lor represent that it has any right or power to do so. Operator shall undertake all obligations herein

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

the Store and Premises and all activities conducted therein and therefrom. In order to cómmunicate with

BPWCP, goverrent agencies and others regarding matters such as financial reporting, safety, health and security, an abilty 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 imposèd upon or detenned 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-erm 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 francrusee 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 tts Agreement; subsequent amendmnts and

supplements shall also 'be loaned and fushed to Operator and Operator shall be requied to acknowledge receipt of any of the foregoing loaned materils. The manual may be provided in wrtig, on CB-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 par of th Agreement. Operator acknowledges and agrees tht compliance with the
standards, methods, procedures, requirements, intrctions and food specifications contained iI 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 shall constitute a breach of ths Agreement.

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

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

specifications and other i;I.lnndentiaI Inommtion ftom tie to tie. BPWCP shall have sole discretion and control over all aspects of

"on .11s~ce opertor (DOFO)
,'.;11"';1" 241 WR-1 (41200) ; !!iii.'rrn
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the extranet, including the contenl and functionality thereof. BPWCP wil have no obligation to maintain the extr net indefinitely, and may dismantle it at any time without liabilty to Operator.

the Standards, protocols and restrctions that BPWCP may establish fiom 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 communications, (b) communications between or among operators that endorse
or encourage breach of any operator's franchise agreement, (c) confdential treatment of materials thaI BPWCP

(b) Operator shall have the privilege to use the extranet, subject to Operator's strict compliance with

transmits via the extrnet, (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 pri'lcy policy governing
BPWCP's access to and use of electronic communications that operators post to the extraneI. Operator

acknowledges that" as administrator of the extranet, BPWCP can technically access and view any
communication that any person posts on the extraneI. Operator fuer acknowledges tht the extranet facility and all communications that are posted to it will become BPWCP's propert, free of any claims of privacy or
privilege that Operator or any other person may assert.

(c) Operator shall establish and have contiually available (durg all times that the extranet shall be
established and until the terInation of ths Agreement) an electronic connection (the specifications of which

shall be specified in the Manual) with the extanet that allows BPWCP' to send messages to and receive messages from Operator, subject to the standards and specifications. Operator shall partcipate and use the extrnet 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 only be required to provide Operator a paper copy of the Manual and any
updates thereto, if none' have been previously provided to Operator, wùess 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 ths Agreement. Operator shall cause the Store to be open for business

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

. 4.02 Failure of Operator to cause the store to be open for business in the manner and durg the hours and days prescnòed herein shall constitute a material preach 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 prescnòed 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 fo~ the prescribed hours.

4.03 Operator shall participate in the operation of the am/pm business for a period of at least 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 àmlpm 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 of ths
Agreement (with two month of the date sùch designated person is no Io~ger employed at the store,
Operator must replace such Store Manager with another traied Store Manager or the fianchisemay be

non-iesscc 'opetor (DOFO) amlpm-24IWR-I (412006)
Unifomm

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tennnated). For purposes of personal participation, Operator shall be the sole proprietor if Operator is a

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
sole proprietor, the Operational Designee 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 Concurent Operations at the Premises, as more

fully described in Article 4.05 hereof, Operator is obligated to participate in the operation of an franchise 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 employed at the store on a full time basis and/or, if applicable, to replace such person with another trained Store Manager withn two months 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 malerial breach of

this Agreement.

4.05 In the event the am/pm mi market, with BPWCP's approval, is operated at the Premises by Operator in conjunction with another or more than one other BPWCP franchise, ("Concurent Operations"),
such Concurent Operations shall be conducted and governed by the tei; and conditions of the franchise àgreements of each of the applicable ffanchises and any additional special term, conditions and provisions
relatig to Concurent Operattons as may be included in such ffanchise ag:eements or other wrtig with

regard to such operations.

4.06 Each individual who own an interest in the franchise entity must sign a personal guarantee agreeing to discharge all obligations of the Operator under the franchise agreement. TIs 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 franchisee sole proprietorsllp, partersllp, 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 1. 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 Inspectton and Readiness") as the date the Premises are available for occupancy and ready for conduct of the business of the am/pm mi market. The term hereof shall end as of 10:00 a.m
on the fit day after the last day of the one hundred twentieth (120ib) or two hundred fortieth (240th) full

calendar month followig the Conmncement Date as set fort in Par I, uness ths Agreement is
temmted earlier puruant to the term hereof. In addition, BPWCP may, at its discretion, extend the term

of ths Agreement for a period of up to 180 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 frncilsed 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, plwnbing 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, easemt:nt, sign codes, local building codes and other requirements. Operator shall promptly do all of the followig:
"on-k.~see opertor (DOFO) aii/l'ln- 24IWR-I (4/2006)
1.//iifl1rm

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A. Have prepared and submit to BPWPC, for approval, in a fonnat 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 mini market specific to the Premises.

right to occupy and modify the Premises .
market.
With 60 days after BPWCP's approval of the architectual plans and drawings, Operator shall apply

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 req1,ested by BPWCP to verify Operator's financial ability to constrct and operate the am/pm mini

for all licenses, permts, variances and other required governental approvals(colIectively "Permis") necessary for the New Constrction or the Raze and Rebuild. BPWCP, at its sole discretion, may provide assistance in obtaing Permts. All expenses in connection with obtainng Permts 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 submitted to BPWCP in writig with
drawigs and specifications and approved by BPWCP in advance of constrction. If changes are madated by

governental 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 governental 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
Premises duug the tenn 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.
Softre 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 designted addressee. All cross references must be bound prior to transmi~l.
If Operator uses a BPWCP approved arcmtectual fim to prepare the Site Investigation Report and all

architectual plan and drwigs; and after Operator has paid the totallltial Fracmse Fee set fort in Arcle 7,
BPWCP shall reimure' Operator up to a maùnwn of $20,000 for the fees and expenses incured for such
Report and plan and drawigs upon submission to BPWCP of satisfactory docwnentation of

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

the paymnt of

Operator shall obtain a license to sell beer and wie if lawfl in the jursdiction in wmch 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 witlW 12 month of the Effective Date.

non-lessee opetor (DOFO)
am'pm- 241 WR.I (412006) Uniform

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peßIts 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 teßInate this Agreement within 18 month of the Effective Date if this Agreement is for New Constrction or 12 months of the Effective Date if this Agreement is for a Raze and Rebuild. In the event of such teßInation by Operator, any initial franchise fee paid to BPWCP

(e) Only in the event that Operator is not able, for reasons beyond Operator's control, to obtain

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

interest shaH 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

temúate this Agreement. . .

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

traing, BPWCP shaH issue the Notice of Final Inspection and Readiness settg fort the Commencement
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 coHect, as liquidated damges and not as a penalty, in addition to the mimtU

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 termnate ths Agreement. In addition, in the event of such
termation pursuant to ths subparagraph, the Intial Franchise Fee shaH 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 vvsual

and design standards, Operator shaH 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, intaHation
of new fitues, including shelving gondolas and sales counters, new equipment and new graphics as specified in

tle Retrofit Progr Design Intent. Operator shall obtain at its expense all necessary peßIts and licenses to
complete such modications and installations. In the event tht permts necessar for the retrofit are obtained by

BPWCP and assigned to Operator, Operator shall reimbure BPWCP for its out of pocket costs to obtain such permts. Operator shall complete the Retrofit Program no later than nie month after the Effective Date of ths
Agreement.
(b) If ths Agreement is for an existig convenience store tht is not branded am/pm, Operator

shall mae modifcations to the store and Premises to comply with, at a miwn the Retrofit Program. In
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 shall maintain satisfactory creditwortess and submit to BPWCP all documnts

reasonably requested by BPWCP to verify Operator's financial ability 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 temmate 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 fir to prepare all architectul

non-lessee opertor (DOFO) amlpm-241WR-I (4/2006) Unifoim

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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 trining, 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 Final Inspection and

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

right to collect, as liquidated damages and not as a penalty, in addition to the miimum royalty fee, one ttrtieth
of the minimum 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 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 tennnate tts Agreement. In addition, in the event of such temration pursuant to tts
subparagraph, the Initial Franchise Fee shall not be refudable in whole or in part.

5.04 Upon expirtion 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 fra.:chise Agreement for the Premises which right can be exercised by payment of the then-curent Renewal Franchise Fee or other fees which may
then be payable and by execution of a new franchise 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 temm and conditions of all such àgreements durg the term of such Store Agreement; and
(c) All of riet thoughout the term of

the Operator's accrued monetary obligations to BPWCP have been satisfied and tiely 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 lintation, sign, equipment,
fushigs, and decor so as to reflect the then-curent image required for new am/pm mi markets; and

am/pm mi maket frcmse in the relevant geogrphic area in which the Premises are located.

(e) BPWCP has not exercised its right to withdraw from marketing and to no longer maintain the

5.05 If th Agreement has a term of 240 months, after 120 month, Operator will 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
non-iessee optor (DFOj
am/pm- 241WR-I (412006) Uniform
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ARTICLE 6
Preßßses and Store Equipment

6.01 The am/pm mini market franchise granted hereunder is for the operation of an am/pm mini market on the Premises 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 1. Operator

shall submit to BPWCP such demographic and other ilÚormtion 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 informtion. 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 within 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 ffnallease 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 uuess

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

defied above.

(b) BPWCP may voluntarily (without obligation) assist Operator in obtaing an acceptable location.
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 profftable or successful
operation of the Premises by Operator, and BPWCP hereby expressly disclaim any responsibility therefore.
Operator ackkowledges its sole responsibility for fiding the Premises. Operator acknowledges its sole

rèsponsibility for finding 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 Eqttpment" attached to PART I ("Store Equipment"). Operator agrees to intall the Store Equipment on
or before the Conuencement Date. Cërtin 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 Eqttpment must meet BPWCP's specifcations,

including but not limted 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 pemùt the equipment to be used oruy 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 malfiction, 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 malfictioning 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 term of the Agreement and Operator will intall or remove such Equipment with 90 days after wrtten notice ffom BPWCP. If specifications for Store Equipment or approved suppliers for Store Equipment are
changed by BPWCP,any replacement of Store Equipment by Operator, due to wear and tear, malfictÍon,
nnn-lessee operator (DFO)
:i;t1/~'n- 24IWR-I (4/2006)

!'ni;~;ïm

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depreciation or otherwse, shall be with the then current Store Equipment. 9therwise, 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 markel 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 Í. The Initial Francllsee Fee is payable as follows: one half upon the signng of ths
Agreement by Operator; The remainder of the Initial Francllse 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 refidable in whole or in part except for the followig
circumtances:
(I) If ths Agreement is for New Constrction or Raze and Rebuild at the Premises, after

Operator executes the Agreement, BPWCP shall have up to 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 6.0I(a) with the tie limts

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

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

payment and there shall be no reffd.

(3) If ths Agreement is for New Constrction or a Rae and Rebuild and the Operator

temmtes ths Agreement with 18 month for New Constrction or i 2 month for Rae and
Rebuild after the Effective Date of tls Agreement pursunt to 5.02 (e) for inbility to obtain

pemmts or a beer and wie license for reasons beyond Operator's control, BPWCP wil refid the Intial Franchise Fee paid after deductig the greater of either BPWCP's expenses incured in contemplation of Operator operatig an ampm mi market or $ 1,500.00.
(4) The Initial Fracmse Fee or Renewal Franchise Fee shall be prorated on a monthy
basis

over the tenn 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,
wmch renders operator unable to provide for the continued proper operation of

am/pm mi maket;
(iii) Condemnation or the takig, in whole or in part, of

the

power of emient domain;

the Premises pursuant to the

non-lessee opetor (DOFO) am/pm- 24IWR-I (412006)
Uniform

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(iv) Destrction of all or a substantial part of the Premises though no fault of the
Operator; or,

(v) A detemmation made by BPWCP in good faith and in the nonnl course of
business to withdraw fÌom 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 term 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 accordance with BPWCP's then cucren!

policy.
(co)

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

Franchise Fee ("Renewal Fee") is payable as follows: .
Amount Payable
One ttd of

Due Date ofPavrent fur Operator's Subsequent Term

the total amount payable - On the Commencement Date of ths Agreement the total amount payable - On the 1st 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 ttd of 3rdyearofthe 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,
transfer or assignment with BPWCP's consent of Operator'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 circwntances
described in Arcle 7.01(b)(4) of

ths Agreement.

In the event Operator's Renewal Frachise Fee is retwed, 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 Franchise Fee for any tenn of the ffchie offered in the futue may differ from those set fort above
payments on account of and, accordingly, schedules of payments and due dates of

payments and due dates of

curent policy.

payments shall be m accordance with BPWCP's then

(d) Operator shall pay an Intial Development Fee, if applicable, in the amount set fort in PART I as follows: one-half is payable at the tie the Operator executes ths Agreement and the other half is payable on the
Conmencement Date.

non-lessee operator (DOFO).

am/pm- 24 i WR-I (4/200)

Uniform .

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Article 7.0I(b)(4) of

The Initial Development Fee is 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 term is hereinafter defined, but not less than the nnnirum 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 nol less than the mimum montty royalty fee set fort in PART 1. .

The nnniwn monthly royalty fee is payable on the Commencement Date and thereafter in advance on ~r before the first day of each calendar month durg the term 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 term 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 change in royalty fee.
(b) As used herein the term "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 curency, 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 of

material used, labor or servce cost, interest paid, or any other expense;

or

(iii) cost of transporttion of the goods.
(2) Gross sales includes all cash, credits, propert or other consideration received for:

(i) all sales of merchandise made from or in the Store or in the inediate vicinity of the store, including, but not limted to, a carr kiosk, drve tlu or sidewalk sale;
(ii) all compnsation received for services pedonned from or in the Store including but
not limted to, conmsioDS and referral, commssions on lottery .and lotto tickets (including
all payments by state agencies for the sale of

tickets and for the redeenng ofwig tickets),

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

(ii) all rentals of equipment or merchandise.

(3) The inventory variation shall be deteIned 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
vaaation is defied as either the inventory ~ain (physical inventory value is greater tban 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 described in the Store Systems ManuaL.

non-lessee opnntor. (DOFO) am/pm- 241WR.I (4/2006) Uniform

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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;
(ii) 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 merchandise is included in'gross sales subject to royalty. For
the purpose of t1s 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 staled-percentage of sales price or gross
receipts, whether imposed upon the Operator, as a seller, or upon the customer, as a purchaser.
(v) for newly constrcted or raed and rebuilt arpm mi markets Oiùy, store sales

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

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

(c) Any montWy royalty fee due in excess of the minium monthy royalty fee shall be payable
the calendar month succeeding the month in which the sales were made for which said fee. is due. Payment of the royalty fee shall be made in accordance herewith and with fonn and
on or before the tenth (10th) day of

procedures set fort in the Systems ManuaL.

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 pedonnce of any of

the tenn and conditions of tls 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 tenn of tls Agreement, to coirect said default and

dedùct any cost or expense in connection therewith ttom said securty deposit. Imediately 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 tls 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 defmed 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 term. of ths Agreement and BPWCP may not increase the fee by n:ore than one percent (i %) in any
c,.'''e.TJdar year. The advertsing and promotion fee is payable on or before the tenth (10th) day of the calendar
non-lessee opetor (DOFO)
",Ii/imi- 241 WR-I (412006)
"'niConn
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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 t1s Aricle and any other
provisions oft1s 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, casrner's check, wie transfer or electroiúc funds trnsfer iiútiated by BPWCP, whichever

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 trnsfer 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 'peimts 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 peimts payment by wire transfe~, all such payments shall be made to IIBPWCP, c/o Citibank NA, For 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 IIBPWCP", c/o Citibank Delawar~, 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
peimts payment by electroiúc fuds tranfer ("EFT"), all such payments shall be made in strct accord with
procedures established and promulgated by the BPWCP credit departéÍÍt. Operator agrees

to indemnfy 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 mOlÙes due BPWCP after notice of temmnation or non-renewal does not constitute a waiver by BPWCP of such

notice of temmation 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

peimts 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
håness 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 (except those !aes based upon or measured by the net income ofBPWCP) in connection with the operation of the Store or in connection with any payments made pursuant to ths Agreement. Opeetor agrees to pay
promptly when due and to hold BPWCP hanness from any taes (including interest, penalties aid additions to

tax) imosed upon any propert of Operator located at or used in connection with the operation of the Store.
Operator agrees to pay promptly when due and to hold BPWCP haness 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

promptly

revocation of any peimt or license required for the operation of the Store. Operator shall fush to BPWCP, upon request, any documentation, 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. .
adnsterig such laws. Operator agrees to iIediately notify BPWCP, in wrtig, 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
violation or 'other conuuncations alleging violations of federal, state or local laws, ordices, rules,
regulations, directives.or orders, affecting the operation of

any citations, notices of

the Store and Premises.

non-lessee openntor (DFO) am/pm- 24IWR-I (4/2006) Uniform

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Case 5:07-cv-04808-JF

Document 37-2

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
leases, contr'actsand agre.ements affecting the Premises and Operator's use and possession of

the Premises.

ARTICLE 9

Utiities
9.0 I Operator shall be providedsolely responsible for all costsStore. . on utilties 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 mainlenance 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
perfonnnce is grounds for temmtion 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 nonnl authoried uses are no longer practicable, either par may tennate ths Agreement with 120 days of such destrction by givig the other part wrtten notice. The effective date of such temmtion shall relate back to

the date of destrction. .

Accidents occurg at the Premises resultig in personal injur are to be reported in wrtig imediately
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 Opetator shall allow BPWCP the right of entr at all ties and the right to remain on the Premises for examnation and inpection of the Premises, Store, Sto