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[EXHIBIT 10.18]
SUPPLY CONTRACT
Dated 7/2/90
1. PREMISES AND TERM.
XXXX XXXXXXXX OIL COMPANY, INC. ("Xxxxxxxx"), agrees to sell to Utah
Service, ("Retailer") and Retailer agrees to purchase from Xxxxxxxx such
quantities of the Chevron brand gasolines and diesel fuel ("Chevron motor
fuels") sold by Xxxxxxxx generally to motor fuel retail outlets in Retailer's
locality as are necessary to serve customer demand for Chevron motor fuels at
Retailer's premises at 000 Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxx xx Xxxx 00000, (the
"premises") for a term commencing on 7/2/90 and continuing thereafter until
terminated as provided herein. "Chevron" as used herein shall mean Chevron
Products Company, Chevron U.S.A., Inc. and their affiliates.
2. USE OF PREMISES
(a) Chevron Products. Retailer acknowledges that there is a
demand for Chevron motor fuels and Chevron brand motor oils (hereinafter
sometimes collectively referred to as "Chevron products") at the premises, and
agrees continuously to stock at the premises and to offer for sale such
quantities of Chevron products as are necessary to serve customer demand
therefor. Retailer acknowledges the financial benefit to Retailer of selling and
prominently displaying Chevron products due to the high regard of the motoring
public for retail outlets selling under the Chevron trademarks and trade names,
and Retailer agrees at all times to give the dispensing equipment, displays and
advertisements for Chevron products and brands as prominent and convenient
positions as those for any other product offered for sale on the premises and
not to disparage or diminish in any way by act or omission the good reputation
of such trademarks, trade names, products or retail outlets.
Retailer acknowledges that Xxxxxxxx has invested time, resources,
training, etc. in the establishment of the supply relationship and branding of
Retailer's premises. In consideration of the covenants and agreements contained
herein, Retailer agrees to purchase all of its Chevron products only from
Xxxxxxxx. In the event of a termination of this Contract, Retailer agrees for a
period of two years from such termination, not to purchase any Chevron products
for resale at the premises from anyone other than Xxxxxxxx.
(b) Operating Requirements. Retailer agrees to devote sufficient
time to the personal management of the premises so as to provide for the
continued proper operation thereof as a first-class motor fuel retail outlet; to
maintain and operate the premises in a clean, safe and healthful manner with a
neat and uncluttered appearance that is inviting to the motoring public; to
offer air, water and windshield cleaning materials for use by motorists; to
render prompt professional and courteous service to customers by providing
personnel in numbers adequate to handle available business who are properly
trained, well-groomed and dressed in Chevron-
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approved uniforms; to operate and manage the premises and cause customers to be
treated in a manner which engenders customer satisfaction and eliminates
customer complaints to the extent possible; to comply with all applicable
Federal, state and local laws and regulations relevant to the use and operation
of the premises or the resale of all products purchased by Retailer under this
Contract; and to supply Xxxxxxxx with all information which Xxxxxxxx shall
reasonably request to enable Xxxxxxxx to comply with all applicable Federal,
state and local laws and regulations. Xxxxxxxx and its authorized
representatives shall have the right at any time to enter upon the premises to
confirm the performance by Retailer of Retailer's obligations under this
Contract.
(c) Price Signs. Except as may be otherwise specified by
Xxxxxxxx, Retailer shall display Retailer's retail prices for all Chevron motor
fuels sold at the premises on one or more Chevron-approved motor fuel price
signs. If Retailer offers different levels of refueling service to motorists and
charges different Chevron motor fuel prices depending upon the level of service
provided, Retailer shall clearly indicate on such price signs the level of
service associated with the Chevron motor fuel prices displayed.
(d) Each of the following petroleum products shall be
continuously stocked and offered for sale at the premises in such quantities as
are necessary to meet the demand therefor:
Chevron Unleaded Gasoline; and
Chevron Regular Gasoline or Chevron Plus Unleaded Gasoline; and
Chevron Supreme Unleaded Gasoline; and
Chevron brand motor oils; and
If you offer fast lubrication services for automotive vehicles at the premises
(generally performed while the customer waits at the premises), you shall also
continuously stock and offer for sale at the premises at least one
single-viscosity Chevron brand motor oil and at least one multi-viscosity
Chevron brand motor oil in bulk storage tanks having a capacity of at least five
hundred (500) gallons each with appropriate piping for the convenient delivery
of such motor oils to all automotive lubricating locations on the premises. You
shall cause the dispensing equipment, displays and advertisements for Company's
products and brands at the premises to be as prominent and in as convenient
positions as those for any other product offered for sale on the premises.
(e) Restricted Uses. The premises shall not be used for the sale
of drug-related paraphernalia or equipment. Nor shall the premises be used for
the sale or rental of adult magazines, movies, video tapes or similar items
featuring nudity, unless such materials are handled discreetly in recognition
that they are not intended for viewing by minors and are offensive to many
adults. This means that such adult materials shall not be offered prominently at
the premises or displayed in a manner which would expose minors and adult
customers who are not interested in buying such materials to nudity or vulgar or
obscene language or images.
3. DELIVERIES-PRICES-TAXES.
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(a) Deliveries. Xxxxxxxx shall deliver or arrange for the
delivery of Chevron motor fuels to Retailer at the premises. Orders for
deliveries of Chevron motor fuels shall be placed by Retailer with such advance
notice and in such manner as Xxxxxxxx may from time to time designate.
Deliveries shall be made (except at Xxxxxxxx'x option) in full bulk transport
quantities in Xxxxxxxx'x customary manner using equipment selected by Xxxxxxxx.
Retailer shall provide Xxxxxxxx with unimpeded and adequate ingress to and
egress from the premises twenty-four (24) hours per day. Retailer shall comply
with such reasonable rules and regulations as Xxxxxxxx may from time to time
establish regarding deliveries by Xxxxxxxx at the premises. If there is
inadequate storage capacity to accept any delivery of Chevron motor fuels
ordered by Retailer and the delivery vehicle must leave the premises without
delivering all of the products ordered, Retailer shall be subject to an
additional handling fee in the amount of $250.00, or in such other amount as
Xxxxxxxx may from time to time designate. Retailer shall also reimburse Xxxxxxxx
on demand for any demurrage or other charges incurred by Xxxxxxxx by reason of
Retailer's failure to unload any delivery vehicle or release the same within the
time allowed therefor without demurrage or other charge.
(b) Prices. The prices Retailer shall pay Xxxxxxxx for Chevron
motor fuels hereunder shall be Xxxxxxxx'x prices to Retailer, as established by
Xxxxxxxx from time to time, for the particular product, grade, quantity and type
of delivery involved. Retailer shall, except at Xxxxxxxx'x option, pay Xxxxxxxx
cash before delivery for Chevron motor fuels and any other resale merchandise
which Retailer may purchase from Xxxxxxxx. Except as otherwise agreed by
Xxxxxxxx, all amounts payable under this Contract shall be paid by electronic
funds transfer from Retailer's designated bank account to such Xxxxxxxx bank
account as may be designated by Xxxxxxxx from time to time. Retailer shall
provide such information and shall execute such authorizations as Xxxxxxxx may
from time to time request to allow Xxxxxxxx to withdraw payments due hereunder
directly from Retailer's designated bank account. If credit is extended to
Retailer by Xxxxxxxx, Retailer shall furnish Xxxxxxxx with such information
regarding Retailer's financial condition as Xxxxxxxx may reasonably request from
time to time. Xxxxxxxx'x terms of payment are subject to change without notice
at discretion of Xxxxxxxx.
(c) Taxes. Any tax, duty, toll, fee, impost, charge or other
exaction, or the amount equivalent thereto, and any increase thereof now or
hereafter imposed, levied or assessed by any governmental authority upon,
measured by, incident to or as a result of the transactions herein provided for
(other than local, state and Federal net income taxes measured by the net income
of Xxxxxxxx from all sources), or the transportation, importation, production,
manufacture, use or ownership of the goods the subject of this Contract shall,
if collectible or payable by Xxxxxxxx, be paid by Retailer on demand by
Xxxxxxxx. Any such payment shall be in addition to the prices otherwise herein
provided for.
4. TRADEMARKS. TRADE NAMES. COLOR SCHEMES AND IMAGE REQUIREMENTS.
(a) The products purchased by Retailer under this Contract shall
be sold by Retailer as the products of Chevron and only under the trademark and
trade names authorized for
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such products by Chevron. Retailer shall not at any time offer for sale under
such trademarks and trade names any product not authorized by Chevron to be sold
thereunder. Retailer shall conduct Retailer's business so as to eliminate any
likelihood of confusion between Chevron's products and those of others and so as
to eliminate any likelihood of substitution or commingling of the products of
others as or with those of Chevron. Retailer agrees to abide by such reasonable
regulations to this end as Chevron may from time to time establish by written
notice to Retailer. Without limitation on the foregoing, Xxxxxxxx shall have the
right at any time to take samples of Chevron motor fuels from the premises for
testing purposes, compensating Retailer (at Retailer's cost, which for this
purpose shall be based on Xxxxxxxx'x prices to Retailer hereunder in effect at
the time the product is taken, or, at Xxxxxxxx'x option, in kind) for any
products so taken.
(b) Retailer recognizes Chevron's right to use and authorize
others to use all trademarks, service marks, trade names, color schemes and
service station designs (collectively "insignia") utilized by Chevron to
identify products and services, and Retailer agrees not to claim any right,
title or interest therein. Retailer acknowledges the need to control Retailer's
use of such insignia in order to maintain the validity thereof and to assure the
continued recognition of, acceptance by and high regard of the motoring public
for products and services identified by such insignia. Accordingly, Retailer
agrees that Retailer shall use such insignia only in such manner as may be
approved by Chevron and that Chevron may from time to time change such insignia
and its promotional materials as it sees fit. Retailer shall not use any such
insignia in Retailer's company name if Retailer is a corporation or limited
liability company ("LLC"), nor permit the use of any such insignia in the name
of any corporation or LLC in which Retailer has an interest. All signs
advertising Chevron's products and all signs in the colors used by Chevron to
identify its products or the places at which its products are sold and all
rights therein are and shall continue to be the property of Chevron. Retailer
shall not use any such signs except in connection with products manufactured or
handled by Chevron and only in such manner as may be approved by Chevron.
Chevron may, during the term of this Contract, and within a reasonable period
thereafter, remove or obliterate such signs, and repaint so much of the premises
as it elects, in a color or colors selected by it. If Chevron removes or
obliterates any signs or repaints any of the premises, Chevron need not restore
any pre-existing signs on or paint schemes of the premises. Retailer may not use
other signs to advertise products purchased from Xxxxxxxx without Xxxxxxxx'x
prior written consent. No other signs (except motor fuel price signs) shall be
placed on a sign pole containing a sign advertising a product manufactured or
handled by Chevron. Retailer shall not, during the term of this Contract or
thereafter, simulate in any way any insignia identifying Chevron's products or
the places or outlets where they are sold or marketed. Upon termination of this
Contract, Retailer shall immediately return to Xxxxxxxx all signs supplied to
Retailer by Chevron or Xxxxxxxx and shall immediately discontinue any and all
use of such insignia and shall obliterate such insignia from all real or
personal property utilized by Retailer. Retailer likewise shall obliterate such
insignia from any real or personal property of Retailer before selling any such
property to a third party.
(c) Chevron shall have the right at any time during the term of
this Contract to change, alter or amend any of the trademarks and trade names
under which the motor fuels covered by this Contract are now or may hereafter be
sold. If Xxxxxxxx shall at any time during the term of this Contract discontinue
the marketing in Retailer's locality of any or all of the motor
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fuels covered by this Contract, Xxxxxxxx shall be relieved of all obligation to
sell or deliver such discontinued product to Retailer and, if Xxxxxxxx shall
market any other product in lieu of the discontinued product, this Contract
shall embrace the new product and all of the terms and conditions hereof
previously applicable to the discontinued product shall apply to the new
product.
(d) Retailer shall cause the premises at all times to comply with
Chevron's image standards for branded retail outlets, as established by Chevron
from time to time. Xxxxxxxx shall give Retailer at least one hundred twenty
(120) days' prior written notice of any change in Chevron's image standards for
branded retail outlets.
5. CONDUCT OF RETAILER'S BUSINESS.
(a) Retailer is engaged in an independent business and nothing
herein contained shall be construed as granting to Xxxxxxxx any right to control
Retailer's business or operations or the manner in which the same shall be
conducted, Retailer's obligation to Xxxxxxxx hereunder being the performance of
the terms and conditions of this Contract. Xxxxxxxx has no right to hire or fire
any employees of Retailer or to exercise any control over any of Retailer's
employees, all of whom are entirely under the control and direction of Retailer,
who shall be responsible for their acts and omissions. Retailer accepts
exclusive liability for all contributions and payroll taxes required under
Federal Social Security laws and State Unemployment Compensation laws or other
payments under any laws of similar character as to all persons employed by or
working for Retailer. Retailer is not limited in the customers to whom or the
geographic area in which Retailer may sell goods or services from the premises.
Retailer is not granted any territorial rights by Xxxxxxxx whatsoever (such as
any exclusive area or territory). Xxxxxxxx reserves the right to establish
additional motor fuel retail outlets or service stations anywhere it chooses for
operation under the Chevron brand (or another brand) by other dealers, by
jobbers or by Xxxxxxxx itself through its employees or agents.
(b) Retailer shall indemnify, defend and hold harmless Xxxxxxxx,
Chevron, Chevron's parent company, Chevron Corporation, the subsidiary and
affiliated companies of each of them (collectively "Chevron and its
affiliates"), and their respective directors, officers, agents and employees,
from and against all expense (including attorneys' fees), liability and claims
of whatsoever kind and nature, including but not limited to those for damage to
property (including Retailer's property) or injury to or death of persons
(including Retailer), directly or indirectly resulting, or alleged to result,
from anything occurring from any cause on or about or in connection with the
maintenance, upkeep, repair, replacement, operation or use of the premises, or
anything located thereon. The foregoing indemnity shall not apply where such
expense, liability or claims result from Xxxxxxxx'x sole negligence or willful
misconduct.
6. PREVENTION OF PERFORMANCE-SHORTAGE OF SUPPLY.
(a) There shall be no obligation to sell or deliver or to receive
or use the petroleum products covered by this Contract when and while, and to
the extent that, the receiving or using or manufacture or making deliveries in
the customary manner are prevented or hindered
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by act of God, fire, riot, labor disturbances (whether involving employees of
the party affected or of others and regardless of whether the disturbance could
be settled by acceding to the demands of a labor group), accident, war or the
acts of any government (whether foreign or domestic, Federal, state, county or
municipal) or any causes beyond the reasonable control of the party affected,
whether or not similar to any of the foregoing causes. In cases of partial or
total interruption or loss or shortage of transportation facilities or supplies,
or shortage of products deliverable hereunder, Xxxxxxxx may allocate deliveries
of available products among Retailer, Xxxxxxxx'x other customers, contract or
otherwise, and Xxxxxxxx for its own use, on any basis which in Xxxxxxxx'x sole
judgment is fair and reasonable, allowing for such priorities as Xxxxxxxx deems
appropriate.
(b) Due to uncertainties in the supply/demand situation (which
may include a decision by Xxxxxxxx that the costs of some petroleum products
which might be available are unreasonable), Xxxxxxxx may not have sufficient
supplies of one or more of the petroleum products covered by this Contract to
meet the full requirements of Retailer, of Xxxxxxxx'x other customers, contract
or otherwise, and of Xxxxxxxx for its own use. Whenever that situation exists
and Xxxxxxxx'x performance hereunder is not otherwise excused, Xxxxxxxx may
allocate deliveries of available products on any basis which in Xxxxxxxx'x sole
judgment is fair and reasonable, allowing for such priorities as Xxxxxxxx deems
appropriate.
7. TERMINATION.
(a) Retailer may terminate this Contract without cause at any
time during the term hereof upon giving Xxxxxxxx sixty (60) days' written notice
of such termination.
(b) Xxxxxxxx may, in addition to such other remedies as Xxxxxxxx
may have (including but not limited to the right to terminate this Contract as
otherwise provided herein) and subject to any valid requirements of any
applicable statute, terminate this Contract upon giving Retailer ninety (90)
days' prior written notice of such termination or, if it would not be reasonable
for Xxxxxxxx to give ninety (90) days' prior written notice, at Xxxxxxxx'x
election upon giving Retailer prior written notice for such lesser period as is
reasonable in the circumstances, if any one of the following occurs:
(1) Retailer by act or omission breaches or defaults on
any covenant, condition or other provision of this Contract; or
(2) Retailer fails to exert good faith efforts to carry
out the provisions of this Contract following written notice to Retailer from
Xxxxxxxx of such failure and a reasonable opportunity to exert good faith
efforts to carry out such provisions; or
(3) Retailer fails to pay to Xxxxxxxx in a timely manner
when due all sums to which Xxxxxxxx is legally entitled (whether or not such
sums are owed to Xxxxxxxx under this Contract); or
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(4) Retailer knowingly fails to comply with Federal, state
or local laws or regulations relevant to the use or operation of the premises;
or
(5) Willful adulteration, commingling, mislabeling or
misbranding of motor fuels or other violations by Retailer of trademarks
utilized by Chevron; or
(6) This Contract, or any interest therein, is assigned or
otherwise transferred contrary to the provisions of section 9 hereon or
(7) Retailer vacates, abandons, transfers or is deprived
of possession of the premises; or
(8) Unlawful, fraudulent or deceptive acts or practices or
criminal misconduct by Retailer relevant to the operation of the premises; or
(9) Continuing severe physical or mental disability of
Retailer of three (3) months' duration which renders Retailer unable to provide
for the continued proper operation of the promises as a motor fuel retail
outlet; or
(10) Failure by Retailer to operate the premises as a
motor fuel retail outlet for seven (7) consecutive days, or such lesser period
which under the facts and circumstances constitutes an unreasonable period of
time; or
(11) Conviction of Retailer of any felony involving moral
turpitude; or
(12) Retailer's death; or
(13) Any other event which is relevant to the relationship
between Xxxxxxxx and Retailer and as a result of which termination of this
Contract is reasonable.
Without limitation on the foregoing, it is agreed that upon the occurrence of
any of the events specified in clauses (3) through (12) of this subsection (b)
it would not be reasonable for Xxxxxxxx to give ninety (90) days' prior written
notice, that ten (10) days' notice would be reasonable in such circumstances,
and that in any such circumstance Xxxxxxxx may elect to terminate this Contract
upon giving Retailer ten (10) instead of ninety (90) days' prior written notice
of such termination.
(c) If during the term hereof Xxxxxxxx decides to withdraw from
marketing motor fuels in the relevant geographic market area in which the
premises are located, Xxxxxxxx may terminate this Contract by giving Retailer
one hundred eighty (180) days' prior written notice of such termination and
otherwise complying with any applicable requirements of law, including the
Federal Petroleum Marketing Practices Act.
(d) Waiver by Xxxxxxxx or Retailer of one or more breaches or
defaults hereunder shall not be deemed to be a waiver of any other or continuing
breach or default
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hereunder. No modification of this Contract, and no waiver of any provision
hereof, shall be binding on Xxxxxxxx or Retailer unless in writing and signed by
Xxxxxxxx and Retailer. Termination of this Contract shall not relieve Xxxxxxxx
or Retailer of responsibility for obligations incurred prior to termination.
Upon termination of this Contract, subject to any valid requirements of any
applicable statute, neither Xxxxxxxx nor any incoming Retailer shall have any
obligation to purchase from Retailer any of Retailer's inventory, tools,
equipment or supplies.
(e) If Xxxxxxxx continues to accept orders from Retailer for
motor fuels following termination of this Contract, such sales shall be upon all
of the terms and conditions hereof; provided that such sales shall not be
construed to evidence a renewal of this Contract by operation of law or
otherwise, but shall imply only an agreement from day to day, which Xxxxxxxx may
(subject to any valid requirements of any applicable statute) terminate without
cause at any time upon giving Retailer written notice of such termination.
(f) Retailer's obligations, duties and responsibilities,
including without limitation, any amounts owed to Xxxxxxxx by Retailer pursuant
to this Contract or that may accrue as a result of Retailer's breach of this
Contract shall be secured by a Trust Deed on the Premises.
8. ASSIGNMENT.
This Contract is personal to Retailer, and Dealer shall not, without
Xxxxxxxx'x prior written consent: assign this Contract, or any interest therein
(either voluntarily or by operation of law) by assignment or other arrangements
having similar effect; or become associated with any other person, directly or
indirectly, as a partner or otherwise in regard to Retailer's interest or
operations under this Contract. Subject to any valid requirements of any
applicable statute, Xxxxxxxx reserves the right in its sole discretion
arbitrarily to withhold its consent to any such assignment or other transfer by
Retailer. Xxxxxxxx shall have the right at anytime to assign its rights and
delegate its duties under this Contract without Retailer's consent. In the event
of any such assignment by Xxxxxxxx, the prices to be paid by Retailer pursuant
to section 3(b) hereof shall be such prices as may be set in good faith by the
transferee. Any such assignment or other transfer by Retailer or Xxxxxxxx shall
not relieve Retailer or Xxxxxxxx of their obligations hereunder.
9. INSURANCE.
(a) Retailer shall maintain, at Retailer's own expense during the
term hereof, insurance with respect to Retailer's business, the premises and all
activities on or about or in connection with the premises of the types and in
the minimum amounts described generally as follows:
(1) Garage Liability Insurance or Comprehensive General
Liability Insurance (bodily injury and property damage) of not less than
$500,000.00 combined single limit per occurrence, including the following
coverages: explosion hazard, personal injury,
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premises-operations, products and completed operations, blanket contractual and
independent contractors liability, and liquor liability (if alcoholic beverages
are sold from the premises); and
(2) Business Auto Liability Insurance (bodily injury and
property damage) of not less than $500,000.00 combined single limit per
occurrence on all nonowned automobiles, all tow trucks and service vehicles
which are owned, hired or leased by Retailer, and all vehicles bearing the
hallmark or other insignia used by Chevron, which are owned, hired or leased by
Retailer; and
(3) Environmental Impairment Liability Insurance (bodily
injury and property damage) of not less than $500,000.00 combined single limit
of liability, including gradual seepage, pollution and cleanup costs; and
(4) Worker's Compensation and Employer's Liability
Insurance as prescribed by applicable law; and
(5) Any other insurance or surety bonding that may be
required by applicable Federal, state and local laws and regulations; and
(6) Excess liability insurance of not less than
$1,000,000.00 per occurrence in excess of the insurance required under clauses
(1), (2), (4) (except Worker's Compensation) and (5) above, affording not less
than the same coverage and including personal injury and property damage
coverage.
(b) The insurance required under clauses (1), (2), (3), (5) and
(6) of subsection (a) above shall include Xxxxxxxx, Chevron and its affiliates
as additional insureds except with regard to occurrences that are the result of
their sole negligence.
(c) The insurance required under clauses (1), (2), (3), (5) and
(6) of subsection (a) above shall provide that it is primary coverage with
respect to Retailer, Xxxxxxxx, Chevron and all other additional insureds.
(d) The insurance required above shall be issued by insurance
companies which meet Xxxxxxxx'x financial standards for insurers (as established
by Xxxxxxxx from time to time) and shall provide that no cancellation or
material change in any policy shall become effective except upon thirty (30)
days' prior written notice to Xxxxxxxx.
(e) The insurance companies shall have no recourse against
Xxxxxxxx, Chevron, or any other additional insured, for payment of any premiums
or assessments under any policy issued by a mutual insurance company.
(f) shall furnish certificates satisfactory to Xxxxxxxx as
evidence that the insurance required under this section 10 above is being
maintained.
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(g) Retailer shall be responsible for all deductibles in all of
Retailer's insurance policies.
(h) Retailer's indemnity and other obligations shall not be
limited by the foregoing insurance requirements.
10. CORPORATE/LLC RETAILER -- OPERATOR.
(a) The personal qualifications of each Chevron retailer are of
material significance to Xxxxxxxx, other retail outlets displaying Chevron
insignia, and the motoring public. When Xxxxxxxx accommodates an individual's
desire to do business in corporate or limited liability company ("LLC") form by
entering into this Contract with the corporation/LLC, this is done with the
understanding that, although it is only the corporate/LLC Retailer that enjoys
rights under this Contract, those rights are conditioned on the individual
remaining actively involved with and responsible for the operation of the
premises and retaining control of the corporation/LLC. Accordingly, if Retailer
is a corporation/LLC and subject to any valid requirements of any applicable
statute, Retailer agrees that the references to "Retailer" in clauses (8), (9),
(11) and (12) of subsection 7(b) hereof are amended hereby to read Retailer or
any Operator. and that Retailer's rights under this Contract are subject to the
following conditions being met throughout the term of this Contract, which
Retailer shall cause the following named individual Xxxx Xxxx, ("Operator") to
meet:
(1) Operator shall perform Retailer's obligations under
subsection 2(b) hereof to devote sufficient time to the personal management of
the premises so as to provide for the continued proper operation thereof as a
motor fuel retail outlet.
(2) This clause (2) applies if Retailer is a
corporation. Operator shall own all right, title and interest, legal and
beneficial, in and to a majority of the voting stock and any other stock of
Retailer (as well as a majority thereof after giving effect to the conversion of
all securities convertible into stock of Retailer and taking into account the
issuance of any additional stock or securities convertible into stock) and
Operator shall not pledge or otherwise hypothecate any such stock or securities,
or permit or suffer any lien or encumbrance to be placed thereon, or grant
proxies or enter into stockholder or other agreements which limit in any manner
Operator's control of Retailer, or otherwise create, permit or suffer legal,
beneficial or other rights or interests to exist in others with regard to any
such stock or securities.
(3) This clause (3) applies if Retailer is an LLC.
Operator shall own all right, title and interest, legal and beneficial, in and
to a majority voting interest, majority profit interest and majority capital
interest in Retailer. Operator shall not pledge or otherwise hypothecate any
such interests, or permit or suffer any lien or encumbrance to be placed
thereon, or grant proxies or enter into operating or other agreements which
limit in any manner Operator's control of Retailer, or otherwise create, permit
or suffer legal, beneficial or other rights or interests to exist in others with
regard to any such interests of Operator in Retailer.
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(4) Operator shall guarantee the performance of all of
Retailer's obligations under this Contract.
(b) The occurrence of any event, whether voluntary, involuntary,
direct or indirect, by operation of law, by merger or other corporate/LLC
proceedings or otherwise caused, which results in any of the following shall be
construed as an assignment of this Contract for the purposes of section 9
hereof:
(1) Operator having less than a majority of the voting and
other stock of Retailer as required by clause (2) of subsection (a) above, or
any action otherwise in breach of clause (2) of subsection (a) above; or
(2) Operator having less than a majority of the voting
interest, profit interest or capital interest in Retailer as required by clause
(3) of subsection(a) above, or any action otherwise in breach of clause (3) of
subsection (a) above.
11. MOTOR FUEL REGULATIONS.
(a) The motor fuels covered by this Contract are subject to
Federal air pollution laws and regulations controlling fuels and fuel additives
for use in motor vehicles and motor vehicle engines. Those laws and regulations
require motor fuels to meet product specifications designed to minimize harmful
emissions, and impose directly on Retailer and Chevron specific legal
obligations regarding the quality control, distribution, sale and dispensing of
regulated motor fuels. Chevron has established certain programs and procedures
for handling regulated motor fuels to achieve compliance with these governmental
requirements and reduce liability exposure for noncompliance. Retailer
recognizes the importance to Chevron, Xxxxxxxx, Retailer and the public of
Retailer meeting fully all governmental motor fuel requirements. Accordingly,
Retailer shall comply fully with Chevron's current and future programs and
procedures for handling regulated motor fuels, as set forth in Chevron's Retail
Facility Compliance Guide and in all other manuals and written communications
pertaining to regulated motor fuels that Chevron has distributed or may in the
future distribute to Retailer. Chevron does not represent or warrant that
following its programs and procedures for handling regulated motor fuels will
ensure compliance with all governmental motor fuel requirements. Retailer is
independently responsible for complying fully with all applicable Federal, state
and local laws and regulations pertaining to motor fuels.
(1) prohibit the sale, dispensing or offering for sale
of gasoline represented to be unleaded gasoline unless it meets the requirements
for unleaded gasoline defined in the Federal regulations;
(2) prohibit introduction, or causing or allowing
introduction of leaded gasoline into any motor vehicle which is labeled
"unleaded gasoline only", or which is equipped with a gasoline tank filler inlet
which is designed only for the introduction of unleaded gasoline;
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(3) require that all gasoline pumps, from which leaded
gasoline is introduced into motor vehicles, be equipped with a nozzle spout
having a terminal end with an outside diameter of not less than 0.930 inch
(2.363 centimeters);
(4) require that all gasoline pumps, from which unleaded
gasoline is introduced into motor vehicles, be equipped with a nozzle spout
which meets the following specifications: (i) the outside diameter of the
terminal end shall not be greater than 0.840 inch (2.134 centimeters); (ii) the
terminal end shall have a straight section of at least 2.5 inches (6.34
centimeters) in length; and (iii) the retaining spring shall terminate 3.0
inches (7.6 centimeters) from the terminal end;
(5) require that the following notice be displayed in the
immediate area of each pump
Federal Law Prohibits the Introduction of Any Gasoline Containing Lead or
Phosphorus Into Any Motor Vehicle Labeled UNLEADED GASOLINE ONLY.;
(6) require that unleaded gasoline pumps have affixed a
label stating: "Unleaded Gasoline"; and
(7) require that leaded gasoline pumps have affixed a
label stating: "Contains lead antiknock compounds".
You shall also comply fully with all documents, manuals and other written
communications pertaining to unleaded gasoline, which Jobber or Company have
distributed to you or may distribute to you at any time in the future.
(b) Retailer shall promptly advise Xxxxxxxx if Retailer has any
indication that contamination of motor fuel at the premises may have occurred in
order that Xxxxxxxx may, at its option, conduct a test of such product.
Xxxxxxxx'x representatives shall have the right at any time to enter upon the
premises and to take such quantities of such products as they deem necessary to
check the quality of the product, compensating Retailer for any product so
taken.
(c) Retailer's indemnity obligation under section 5(b) of this
Contract shall include, but not be limited to, any and all expense (including
attorneys' fees), liability, claims, fines, civil penalties or demands which may
arise or be assessed as a result of any act or omission of Retailer, or
Retailer's agents or employees in handling motor fuel purchased hereunder, or as
a result of failure by any of them to follow Chevron's programs and procedures
for handling motor fuel.
(d) If Retailer fails to comply with the requirements of this
section 12 with regard to any particular motor fuel product, then Xxxxxxxx, in
addition to such other remedies as it may have, shall have the right to
terminate delivery to Retailer of the motor fuel product in question or to
suspend such delivery until Xxxxxxxx is satisfied that Retailer is again in
compliance herewith.
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12. INCENTIVE AND PROMOTIONAL PROGRAMS.
(a) Chevron may offer to Xxxxxxxx and Retailer from time to time
incentive, promotional or other development programs. The terms and conditions
of such incentive, promotional and development programs including the Hallmark
21 Program (attached hereto marked Exhibit "A" and by reference made a part
hereof) are hereby incorporated herein.
(b) Such incentive, promotional and development programs may be
amended, modified or terminated upon thirty (30) days' prior written notice to
Retailer.
(c) The obligations, responsibilities and duties imposed on
Retailer pursuant to the incentive, promotional or development programs
including any reimbursement, credit, refund, or adjustment shall be secured by a
Trust Deed and lien on Retailer's premises.
13. RIGHT OF FIRST REFUSAL.
It is agreed that should Retailer or Retailer's heirs, executors,
grantees, successors or assigns, at any time during the term of this Supply
Contract or within one (1) year after the termination of this Supply Contract,
regardless of the grounds of said termination, receive an offer to purchase the
premises or any part thereof, and Retailer desires to accept said offer; or
should Retailer during any such time make an offer to sell the premises, or any
part thereof, Retailer shall give Xxxxxxxx forty-five (45) days' notice in
writing of such offer setting forth the name and address of the proposed
purchaser, the amount of the proposed purchase price, and all other terms and
conditions of such offer, and Xxxxxxxx shall have the first option to purchase
the premises which are the subject of the offer by giving written notice to
Retailer of its intention to purchase within said forty-five (45) day period at
the same price and on the same terms of any such offer. If Xxxxxxxx does not
exercise such Right of First Refusal, Retailer may, at any time within three (3)
months after the expiration of such forty-five day period, but no later, sell or
otherwise transfer such interest, but only to the original offeror and only upon
the terms of the offer submitted by Retailer to Xxxxxxxx. It being understood
that in the event Xxxxxxxx does not give notice of its intention to exercise
said option to purchase within said period, the provisions of this Supply
Contract and all of its terms and conditions shall nevertheless remain in full
force and effect and Retailer and any purchaser or purchasers of the premises
shall be bound thereby. In the event the premises set forth in the offer are not
sold for any reason, Xxxxxxxx shall have the continuing Right of First Refusal
to purchase the premises or any part thereof upon any terms of any subsequent
offer or offers to purchase during the term of the Contract and for one (1) year
after any termination of this Supply Contract.
In the event the foregoing option is exercised, Retailer shall convey a
merchantable title and fee simple to said real estate by good and sufficient
warranty deed, free from any and all encumbrances whatsoever. Within thirty (30)
days of the exercise of such option, Retailer will furnish to Xxxxxxxx a
guaranteed title insurance policy of a company acceptable to Xxxxxxxx, in its
usual form, insuring Xxxxxxxx against loss or damage to the extent of the
purchase price by reason of defects and/or liens upon Retailer's title, subject
to only the usual exceptions contained in title
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policies of the issuing company. Settlement of the purchase price and conveyance
to Xxxxxxxx shall be made within ninety (90) days from said date of exercise.
Taxes, utilities, rents, and other expenses shall be adjusted as of the date of
settlement.
Nothing herein shall be construed as a consent by Xxxxxxxx to any such
sale or transfer or waiver of any of Xxxxxxxx'x rights under this Supply
Contract. An offer by a third-party to exchange other property interests owned
or to be acquired by it or any interest of Retailer shall be deemed to
constitute an offer to purchase for price equal to the fair market value of the
property offered in exchange.
14. PRIOR AGREEMENTS.
Effective as of the commencement of the term hereof, this Contract
supersedes and terminates all prior supply contracts between Xxxxxxxx and
Retailer covering the delivery of motor fuels to the premises, provided that any
outstanding breach by Retailer of any such prior Supply Contract shall be deemed
to be a breach of this Contract and the occurrence of any event authorizing the
termination of any such prior Supply Contract shall authorize the termination of
this Contract. This Contract and other written agreements between Xxxxxxxx and
Retailer constitute the entire agreement between Xxxxxxxx and Retailer with
regard to the premises. Retailer acknowledges and agrees that there are no
understandings or agreements between Xxxxxxxx and Retailer with regard to the
premises except as set forth in such written agreements and that Retailer has
not relied on any oral statements or representations by Xxxxxxxx or on
Xxxxxxxx'x behalf in connection with the premises.
15. NOTICE.
All notices to be given under this Contract shall be in writing and
shall be posted by United States mail or personally delivered to Xxxxxxxx at
X.X. Xxx 000, Xxxxx, Xxxx 00000, and to Retailer at the premises or such other
address as either party may designate by written notice to the other in the
manner herein provided.
16. EXECUTION OF DOCUMENTS.
Retailer agrees to execute any and all documents, instruments,
agreements, deeds, or other workings that may be necessary to implement the
terms and conditions of this Contract.
17. ATTORNEYS' FEES.
In the event of any lawsuit between Xxxxxxxx and Retailer arising out of
or relating to the transactions or relationship contemplated by this Contract
(regardless whether such action alleges breach of contract, tort, violation of a
statute or any other cause of action), the substantially prevailing party shall
be entitled to recover its reasonable costs of suit including its reasonable
attorneys' fees. If a party substantially prevails on some aspects of such
action but not others, the court may apportion any award of costs or attorneys'
fees in such manner as it deems equitable.
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IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the
date first above written.
XXXX XXXXXXXX OIL COMPANY, INC. Xxxx Xxxx
PERSONAL GUARANTY
In consideration of the covenants and agreements contained herein,
whereby Xxxxxxxx agrees to extend credit and supply petroleum products to
Retailer, the undersigned do hereby jointly and severally guaranty payments of
any and all obligations arising out of the Supply Contract together with any
obligations, payments, refunds or adjustments pursuant to any incentive,
promotional or development program offered thereunder which may now exist, or
hereinafter arise, of whatever nature and however represented and whether
secured or unsecured. This agreement is continuing in nature, and it is
specifically understood that this agreement is to encompass any and all future
sales, accommodations and indebtedness of Retailer to Xxxxxxxx, as well as any
existing indebtedness of Retailer and that any obligations or indebtedness may
be changed, modified, increased, renewed, paid or reinstated all without notice
to guarantors or any of them. This Guaranty shall remain in full force and
effect until terminated in writing, even though from time to time, there may be
no outstanding balance or obligation owed by Retailer to Xxxxxxxx. This
agreement is severable as to each guarantor, it being specifically understood
that no one guarantor is relying upon the obligations of any other guarantor and
Xxxxxxxx may release or modify this agreement and relationship to the
obligations of one or more guarantors without effecting the liability of any
other guarantor. Each guarantor agrees to pay all costs and expenses including a
reasonable attorneys' fee incurred in enforcing this Guaranty. This Guaranty
shall be binding upon the heirs, personal representatives, successors and
assigns of the Guarantor and shall inure to the benefit of Xxxxxxxx, its
successors and assigns. This Contract and Guaranty is assignable by Xxxxxxxx in
whole or in part without notice to guarantors.
GUARANTORS
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EXHIBIT "A"
HALLMARK 21 INVESTMENT INCENTIVE PROGRAM
Chevron U.S.A. Products Company (.Chevron.) has created the Hallmark 21
Investment Incentive Program to promote the development by Chevron branded
jobbers of new and rebuilt convenience stores and conventional service stations
following Chevron's Hallmark 21 designs. Pursuant to said Program, Retailer has
proposed to construct or completely reconstruct the above-noted service station
(the "premises") under this Program. Xxxxxxxx hereby approves Retailer's
proposal and agrees to partially reimburse Retailer for the costs of
constructing or reconstructing the premises on the following terms and
conditions:
1. The premises shall be constructed or reconstructed to
Chevron's Hallmark 21 specifications, in accordance with plans which Retailer
shall purchase from Chevron. The required Hallmark 21 elements are set forth in
Chevron's Hallmark 21 Retail Image Guidelines manual, which Xxxxxxxx has
provided to Retailer.
2. This approval and agreement shall terminate and be of no
further force or effect unless the construction or reconstruction work at the
premises is commenced within twelve (12) months of the date hereof, prosecuted
diligently and completed to Chevron's satisfaction.
3. Subject to the limitations set forth below, Xxxxxxxx shall pay
Retailer $.02 per gallon for each gallon of Chevron brand gasoline sold at the
premises during the three-year period commencing on the first day of the first
full month after the construction or reconstruction work has been completed and
the premises have opened or reopened for business (the "start date"). Xxxxxxxx
shall make such payments to Retailer monthly on the basis of the prior month's
sales at the premises by credits to Retailer's petroleum products account with
Xxxxxxxx, provided that Retailer furnishes Xxxxxxxx with satisfactory proof of
such sales in accordance with paragraph 6 of this letter. The maximum amount of
such payments shall be $200,000.00.
4. If Retailer so elects by indicating "Yes" below, Xxxxxxxx
shall make a lump sum payment to Retailer in the amount of $_____________
promptly following the start date, in lieu of making monthly payments to
Retailer under paragraph 3 above. The lump sum payment amount shall be adjusted
in the following manner at the end of each of the first four years after the
start date, if the Chevron gasoline sales volume at the premises during each
such year (the "actual volume") is more or less than ________________ gallons
(the "base volume"). If the base volume exceeds the actual volume, Retailer
shall promptly pay to Xxxxxxxx an amount equal to $.02 times the difference (in
gallons) between the base and actual volumes. If the actual volume exceeds the
base volume, Xxxxxxxx shall promptly pay to Retailer an amount equal to $.02
times the difference (in gallons) between the actual and base volumes; provided
that in no event shall the aggregate of the lump sum payment amount and the
amount of any adjustment payments by Xxxxxxxx to Retailer under this paragraph 4
exceed the sum of $160,000.00.
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5. Please indicate by "Yes" or "No" below whether Retailer is
also electing the "DCR option". Choosing this option means that Retailer will
equip all of the self-service motor fuel dispensers at the premises with
Chevron-approved dispenser card readers for processing credit card sales
directly at the dispensers ("DCR's"). Provided that Retailer completes the
installation of DCR's at the premises by the start date, Xxxxxxxx will reimburse
Retailer for thirty percent (30%) of Retailer's DCR costs up to a maximum
reimbursement limit of $15,000.00.
The undersigned elects the DCR option YES.
6. Retailer shall keep such records and submit to Xxxxxxxx such
reports and other documentation as shall be satisfactory to Xxxxxxxx regarding
the quantities of Chevron brand gasoline sold at the premises during the
four-year period in question. Xxxxxxxx shall be permitted to inspect and audit
such records at any time during Retailer's business hours on reasonable notice
to Retailer. Retailer shall also xxxxx Xxxxxxxx the right at any time to enter
upon the premises for the purpose of reading the meters of the dispensers for
Chevron brand gasoline in order to verify the quantities of such products sold
at the premises. If Retailer has elected the DCR option under paragraph 4 above,
Retailer shall also submit to Xxxxxxxx original paid invoices documenting
Retailer's costs of installing DCR's at the premises.
7. If for any reason Retailer's authorization to use Chevron's
trademarks and other insignia at the premises is terminated or not renewed at
any time during the ten-year period after the start date, then Retailer shall
reimburse to Xxxxxxxx the total sum paid to Retailer by Xxxxxxxx under this
agreement (including any sum for DCR's), less 1/120 of such sum for each month
elapsed during such ten-year period.
8. Any breach of this agreement and incentive program shall
constitute a breach of the Supply Contract between Xxxxxxxx and Retailer and any
agreement authorizing the use of Chevron's trademarks and other insignia at the
premises then operative between Retailer and Xxxxxxxx.
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