EXHIBIT 10.2
[CITGO LOGO] CITGO PETROLEUM CORPORATION
DISTRIBUTOR FRANCHISE AGREEMENT
Between CITGO Petroleum Corporation and THE PANTRY, INC.
NOTICE
As a Franchised Distributor, under this agreement you will be entitled to
the protections of the Petroleum Marketing Practices Act, a federal law which
was enacted on June 19, 1978. Title I of this law is intended to protect you
against any arbitrary or discriminatory termination or non-renewal of your
Franchise. CITGO Petroleum Corporation, as a Franchisor, is required to provide
you with a summary of title 1 of the Petroleum Marketing Practices Act whenever
notification of termination or non-renewal of your franchise is given. However,
CITGO wishes to ensure that you are totally familiar with your rights in this
regard even prior to executing this Franchise Agreement. Accordingly, on page i
through iii herein we have produced the concise summary of the provisions of
Title 1 as prepared and published by the secretary of energy in the Federal
Register. Please review this summary carefully. You should resolve with your
lawyer or other appropriate parties any questions you might have, prior to
executing this franchise.
1
OFFICE OF THE SECRETARY
SUMMARY OF TITLE I
OF THE PETROLEUM MARKETING
PRACTICES ACT
AGENCY: Department of Energy.
ACTION: Notice.
SUMMARY: This notice contains a summary of title I of the Petroleum Marketing
Practices Act, a new Federal law enacted on June 19, 1978. The law is intended
to protect franchised distributors and retailers of gasoline and diesel
motor-fuel against arbitrary or discriminatory termination or non-renewal of
franchises. The summary describes the reasons for which a franchise may be
terminated or not renewed under the new law, the responsibilities of
franchisors, and the remedies and, relief available to franchisees. Franchisors
must give franchisees copies of the summary contained in this notice whenever
notification of termination or nonrenewal of a franchise is given.
FOR FURTHER INFORMATION CONTACT:
Xxxxxxx X. Xxxx, Xx., Office of Competition, Department of Energy, 00
Xxxxxxxxxxxxx Xxxxxx XX., Xxxx 0000, Xxxxxxxxxx, X.X. 00000, 000-000-0000.
Xxxxxxx Xxxxx or Xxxxxx X. Xxxxxxxx, Office of General Counsel, Department of
Energy, 00xx xxx Xxxxxxxxxxxx Xxxxxx XX, Xxxx 0000, Xxxxxxxxxx, X.X. 00000,
000-000-0000 or 000-000-0000.
SUPPLEMENTARY INFORMATION: Title I of the Petroleum Marketing Practices Act,
Pub. L. 95-297 (the "Act"), enacted on June 19, 1978, provides for the
protection of franchised distributors and retailers of motor fuel by
establishing minimum Federal standards governing the termination of franchises
and the nonrenewal of franchise relationships by the franchisor or distributor
of such fuel. Section 104(d)(1) of the Act provides that the Secretary of Energy
shall prepare and publish in the FEDERAL REGISTER, not later than 30 days after
enactment of the Act, a simple and concise summary of the provisions of title 1,
including a statement of the respective responsibilities of, and the remedies
and relief available to, franchisors and franchisees under that title.
As required by section 104(d)(1) of the Act, the following is a summary
statement of the respective responsibilities of, and the remedies and relief
available to, franchisors and franchisees. Franchisors must give copies of this
summary statement to their franchisees when entering an agreement to terminate
the franchise or not to renew the franchise relationship, and when giving
notification of termination or nonrenewal. In addition to the summary of the
provisions of Title 1, a more detailed description of the definition contained
in the Act and of the legal remedies available to franchisees is also included
in this notice, following the summary statement.
NOTICES
SUMMARY OF LEGAL RIGHTS OF MOTOR FUEL FRANCHISEES
This is a summary of the franchise protection provisions of the Federal
Petroleum Marketing Practices Act. This summary must be given to you. as a
person holding a franchise for the sale, consignment or distribution of gasoline
or diesel motor fuel, in connection with any termination or nonrenewal of your
franchise by your franchising company (referred to in this summary as your
supplier).
The franchise protection provisions of the Act apply to a variety of franchise
arrangements. The term "franchise" is broadly defined as a license to use a
motor fuel trademark which is owned or controlled by a refiner, and it includes
secondary arrangements such as leases of real property and motor fuel supply
agreements which have existed continuously since May 15, 1973, regardless of a
subsequent withdrawal of a trademark. Thus, if you have lost the use of a
trademark previously granted by your supplier but have continued to receive
motor fuel supplies through a continuation of a supply agreement with your
supplier, you are protected under the Act.
You should read this summary carefully, and refer to the Act if necessary,
to determine whether a proposed termination or nonrenewal of your franchise is
lawful, and what legal remedies are available to you if you think the proposed
termination or failure to renew is not lawful. In addition, if you think your
supplier has failed to comply with the Act, you may wish to consult an attorney
in order to enforce your legal rights.
The Act is intended to protect you, whether you are a distributor or a
retailer, from arbitrary or discriminatory termination or nonrenewal of your
franchise agreement. To accomplish this, the Act first lists the reasons for
which termination or nonrenewal is permitted. Any notice of termination or
nonrenewal must state the precise reason, as listed in the Act, for which the
particular termination or nonrenewal is being made. These reasons are described
below under the headings "Reasons for Termination" and "Reasons for Nonrenewal."
You should note that the Act does not restrict the reasons which may be
given for the termination of a franchise agreement entered into before the June
19, 1978 effective date of the Act. However, any nonrenewal of such a terminated
franchise must be based on one of the reasons for nonrenewal summarized below.
The Act also requires your supplier to give you a written notice of
termination or intention not to renew the franchise within certain time periods.
These requirements are summarized below, under the heading "Notice Requirements
for Termination or Nonrenewal."
The Act allows trial and interim franchise agreements, which are described
below under the heading "Trial and Interim Franchises."
The Act gives you certain legal rights if your supplier terminates or does
not renew your franchise in a way that is not permitted by the Act. These legal
rights are described below under the heading "Your Legal Rights.
This summary is intended as a simple and concise description of the general
nature of your rights under the Act. For a more detailed description of these
rights, you should read the text of the Petroleum Marketing Practices Act itself
(Pub. L. 95-297, 92 Stat. 322,15 U.S.C. 2801).
I. REASONS FOR TERMINATION
The following is a list of the only reasons for which your franchise is
permitted to be terminated by the Act. One or more of these reasons must be
specified if your franchise was entered into on or after June 19, 1978 and is
being terminated. If your franchise was entered into before June 19, 1978, as
discussed above, there is no statutory restriction on the reasons for which it
may be terminated. If such a franchise is terminated, however, the Act required
the supplier to renew the franchise relationship unless one of the reasons
listed under this heading or one of the additional reasons for nonrenewal
described below under the heading "Reasons for Nonrenewal" exists.
If your supplier attempts to terminate a franchise which you entered into
on or after June 19, 1978 for a reason that is not listed under this heading,
you can take the legal action against your supplier that is described below
under the heading "Your Legal Rights."
Noncompliance with franchise agreement. Your supplier may terminate your
franchise if you do not comply with a reasonable and important requirement of
the franchise relationship. In order to use this reason, your supplier must have
learned of this non-compliance recently. The Act limits the time period within
which your supplier must have learned of your non-compliance to various periods,
the longest of which is 120 days, before you receive notification of the
termination.
Lack of good faith efforts. Your supplier may terminate your franchise if
you have not made good faith efforts to carry out the requirements of the
franchise, provided you are fast notified in writing that you are not meeting a
requirement of the franchise and you are given an opportunity to make a good
faith effort to carry out the requirement. This reason can be used by your
supplier only if you fail to make good faith efforts to carry out the
requirements of the franchise for a period of 180 days before you receive the
notice of termination.
Mutual agreement to terminate the franchise. A franchise can be terminated
by an agreement in writing between you and your supplier if the agreement is
entered into not more than 180 days before the effective date of the termination
and you receive a copy of this
FEDERAL REGISTER, VOL. 43, NO. 169 - WEDNESDAY, AUGUST 30, 1978
2
agreement, together with this summary statement of your rights under the Act.
You may cancel the agreement to terminate within 7 days after you receive a copy
of the agreement, by mailing (by certified mail) a written statement of this
effect to your supplier.
Withdrawal from the market area. Under certain conditions, the Act permits
your supplier to terminate your franchise if your supplier is withdrawing from
marketing activities in the entire geographic area in which you operate. You
should read the Act for a more detailed description of the conditions under
which market withdrawal terminations are permitted.
Other events permitting a termination. If your supplier learns within the
time period specified in the Act (which in no case is more than 120 days prior
to the termination notice) that one of the following events has occurred, your
supplier may terminate your franchise agreement:
(1) Fraud or criminal misconduct by you that relates to the operation of
your marketing premises.
(2) You declare bankruptcy or a court determines that you are insolvent.
(3) You have a severe physical or mental disability lasting at least 3
months which makes you unable to provide for the continued proper
operation of the marketing premises.
(4) Expiration of your supplier's underlying lease to the leased marketing
premises, if you were given written notice before the beginning of the
term of the franchise of the duration of the underlying lease and that
the underlying lease might expire and not be renewed during the tern
of the franchise.
(5) Condemnation or other taking by the government, in whole or in part,
of the marketing premises pursuant to the power of eminent domain. If
the termination is based on a condemnation or other taking, your
supplier must give you a fair share of any compensation which he
receives for any loss of business opportunity or good will.
(6) Loss of your supplier's right to grant the use of the trademark that
is the subject of the franchise, unless the loss was because of bad
faith actions by your supplier relating to trademark abuse, violation
of Federal or State law, or other fault or negligence.
(7) Destruction (other than by your supplier) of all or a substantial part
of your marketing premises. If the termination is based on the
destruction of the marketing premises and if the premises are rebuilt
or replaced by your supplier and operated under a franchise, your
supplier must give you a right of first refusal to this new franchise.
(8) Your failure to make payments to your supplier of any sums to which
your supplier is legally entitled.
(9) Your failure to operate the marketing premises for 7 consecutive days,
or any shorter period of time which, taking into account facts and
circumstances, amounts to an unreasonable period of time not to
operate.
(10) Your intentional adulteration, mislabeling or misbranding of motor
fuels or other trademark violations.
(11) Your failure to comply with Federal, State, or local laws or
regulations of which you have knowledge and that relate to the
operation of the marketing premises.
(12) Your conviction of any felony involving moral turpitude.
(13) Any event that affects the franchise relationship and as a result of
which termination is reasonable.
II. REASONS FOR NONRENEWAL
If your supplier gives notice that he does not intend to renew any
franchise agreement, the act requires that the reason for nonrenewal must be
either one of the reasons for termination listed immediately above, or one of
the reasons for nonrenewal fisted below.
Failure to agree on changes or additions to franchise. If you and your
supplier fail to agree to changes in the franchise that your supplier in good
faith has determined are required, and your supplier's insistence on the changes
is not for the purpose of preventing renewal of the franchise, your supplier may
decline to renew the franchise.
Customer complaints. If your supplier has received numerous customer
complaints relating to the condition of your marketing premises or to the
conduct of any of your employees, and you have failed to take prompt corrective
action after having been notified of these complaints, your supplier may decline
to renew the franchise.
Unsafe or unhealthful operations. If you have failed repeatedly to operate
your marketing premises in a clean, safe and healthful manner after repeated
notices from your supplier, your supplier may decline to renew the franchise.
Operation of franchise is uneconomical. Under certain conditions specified
in the act, your supplier may decline to renew your franchise if he has
determined that renewal of the franchise is likely to be uneconomical. Your
supplier may also decline to renew your franchise if he has decided to convert
your marketing premises to a use other than for the sale of motor fuel, to sell
the premises, or to materially alter, add to, or replace the premises.
III. NOTICE REQUIREMENTS FOR TERMINATION OR NONRENEWAL
The following is a description of the requirements for the notice which
your supplier must give you before he may terminate your franchise or decline to
renew your franchise relationship. These notice requirements apply to all
franchise terminations, including franchises entered into before June 19, 1978
and trial and interim franchises, as well as to all nonrenewals of franchise
relationships.
How much notice is required. In most cases, your supplier must give you
notice of termination or nonrenewal at least 90 days before the termination or
nonrenewal takes effect.
In circumstances where it would not be reasonable for your supplier to give
you 90 days notice, he must give you notice as soon as he can do so. In
addition, if the franchise involves leased marketing premises, your supplier may
not establish a new franchise relationship involving the same premises until 30
days notice was given to you or the date the termination or nonrenewal takes
effect, whichever is later. If the franchise agreement permits, your supplier
may repossess the premises and, in reasonable circumstances, operate them
through his employees or agents.
If the termination or nonrenewal is based upon a determination to withdraw
from the marketing of motor fuel in the area, your supplier must give you notice
at least 180 days before the termination or nonrenewal takes effect.
Manner and contents of notice. To be valid, the notice must be in writing
and must be sent by certified mail or personally delivered to you. It must
contain:
(1) A statement of your supplier's intention to terminate the franchise or
not to renew the franchise relationship, together with his reasons for
this action;
(2) The date the termination or nonrenewal takes effect; and
(3) A copy of this summary.
IV. TRIAL FRANCHISES AND INTERIM FRANCHISES
The following is a description of the special requirements that apply to
trial and interim franchises.
Trial franchises. A trial franchise is a franchise, entered into on or
after June 19, 1978, in which the franchisee has not previously been a party to
a franchise with the franchisor and which has an initial term of 1 year or less.
A trial franchise must be in writing and must make certain disclosures,
including that it is a trial franchise, and that the franchisor has the right
not to renew the franchise relationship at the end of the initial term by giving
the franchisee proper notice.
The unexpired portion of a transferred franchise (other than a trial
franchise, as described above) does not qualify as a trial franchise.
In exercising his right not to renew a trial franchise at the end of its
initial term, your supplier must comply with the notice requirements described
above under the heading "Notice Requirements for Termination or Nonrenewal."
Interim franchises. An interim franchise is a franchise, entered into on or
after June 19, 1978, the duration of which, combined with the terns of all prior
interim franchises between the franchisor and the franchisee, does not exceed 3
years, and which begins immediately after the expiration of a prior franchise
involving the same marketing premises which was not renewed, based upon a lawful
determination by the franchisor to withdraw from marketing activities in the
geographic area in which the franchisee operates.
An interim franchise must be in writing and must make certain disclosures,
including that it is an interim franchise and that the franchisor has the right
not to
FEDERAL REGISTER, VOL. 43, NO. 169 - WEDNESDAY, AUGUST 30, 1978
3
renew the franchise at the end of the term based upon a lawful determination to
withdraw from marketing activities in the geographic area in which the
franchisee operates.
In exercising his right not to renew a franchise relationship under an
interim franchise at the end of its term, your supplier must comply with the
notice requirements described above under the heading "Notice Requirements for
Termination or Nonrenewal."
V. YOUR LEGAL RIGHTS
Under the enforcement provisions of the Act, you have the right to xxx your
supplier if he fails to comply with the requirements of the Act. The courts are
authorized to grant whatever equitable relief is necessary to remedy the effects
of your supplier's failure to comply with the requirements of the Act, including
declaratory judgment, mandatory or prohibitive injunctive relief, and interim
equitable relief. Actual damages, exemplatry (punitive) damages under certain
circumstances, and reasonable attorney and expert witness fees are also
authorized. For a more detailed description of these legal remedies you should
read the text of the Act.
FURTHER DISCUSSION OF TITLE I - DEFINITIONS AND LEGAL REMEDIES
I. DEFINITIONS
Section 101 of the Petroleum Marketing Practices Act sets forth definitions
of the key terms used throughout the franchise protection provisions of the Act.
The definitions from the Act which are listed below are of those terms which are
most essential for purposes of the foregoing summary statement. (You should
consult section 101 of the Act for additional definitions not included here.)
Franchise. A franchise is any contract between a refiner and a distributor,
between a refiner and a retailer, between a distributor and another distributor,
or between a distributor and a retailer, under which a refiner or distributor
(as the case may be) authorizes or permits a retailer or distributor to use, in
connection with the sale, consignment, or distribution of motor fuel, a
trademark which is owned or controlled by such refiner or by a refiner which
supplies motor fuel to the distributor which authorizes or permits such use.
The term "franchise" includes any contract under which a retailer or
distributor (as the case may be) is authorized or permitted to occupy leased
marketing premises, which premises are to be employed in connection with the
sale, consignment, or distribution of motor fuel under a trademark which is
owned or controlled by such refiner or by a refiner which supplies motor fuel to
the distributor which authorizes or permits such occupancy. The term also
includes any contract pertaining to the supply of motor fuel which is to be
sold, consigned or distributed under a trademark owned or controlled by a
refiner, or under a contract which has existed continuously since May 15, 1973,
and pursuant to which, on May 15, 1973, motor fuel was sold consigned or
distributed under a trademark owned or controlled on such date by a refiner. The
unexpired portion of a transferred franchise is also included in the definition
of the term.
Franchise relationship. The term "franchise relationship" refers to the
respective motor fuel marketing or distribution obligations and responsibilities
of a franchisor and a franchisee which result from the marketing of motor fuel
under a franchise.
Franchisee. A franchisee is a retailer or distributor who is authorized or
permitted, under a franchise, to use a trademark in connection with the sale,
consignment, or distribution of motor fuel.
Franchisor. A franchisor is a refiner or distributor who authorizes or
permits, under a franchise, a retailer or distributor to use a trademark in
connection with the sale, consignment, or distribution of motor fuel.
Marketing premises. Marketing premises are the premises which, under a
franchise, are to be employed by the franchisee in connection with the sale,
consignment, or distribution of motor fuel.
Leased marketing premises. Leased marketing premises are marketing premises
owned, leased, or in any way controlled by a franchisor and which the franchisee
is authorized or permitted, under the franchise, to employ in connection with
the sale, consignment, or distribution of motor fuel.
Fail to renew and nonrenewal. The terms "fail to renew" and "nonrenewal"
refer to a failure to reinstate, continue, or extend a franchise relationship
(1) at the conclusion of the term, or the expiration date, stated in the
relevant franchise, (2) at any time, in the case of the relevant franchise which
does not state a tern of duration or an expiration date, or (3) following a
termination (on or after June 19, 1978) of the relevant franchise which was
entered into prior to June 19, 1978 and has not been renewed after such date.
II. LEGAL REMEDIES AVAILABLE TO FRANCHISEE
The following is a more detailed description of the remedies available to
the franchisee if a franchise is terminated or not renewed in a way that fails
to comply with the Act.
Franchisee's right to xxx. A franchisee may bring a civil action in United
States District Court against a franchisor who does not comply with the
requirements of the Act. The action must be brought within one year after the
date of termination or nonrenewal or the date the franchisor fails to comply
with the requirements of the law, whichever is later.
Equitable relief. Courts are authorized to grant whatever equitable relief
is necessary to remedy the effects of a violation of the law's requirements.
Courts are directed to grant a preliminary injunction if the franchisee shows
that there are sufficiently serious questions, going to the merits of the case,
to make them a fair ground for litigation, and if, on balance, the hardship
which the franchise would suffer if the preliminary injunction is not granted
will be greater than the hardship which the franchisor would suffer if such
relief is granted.
Courts are not required to order continuation or renewal of the franchise
relationship if the action was brought after the expiration of the period during
which the franchisee was on notice concerning the franchisor's intention to
terminate or not renew the franchise agreement.
Burden of proof. In an action under the Act, the franchisee has the burden
of proving that the franchise was terminated or not renewed. The franchisor has
the burden of proving, as an affirmative defense, that the termination or
nonrenewal was permitted under the Act, and, if applicable, that the franchisor
complied with certain other requirements relating to terminations and
nonrenewals based on condemnation or destruction of the marketing premises.
Damages. A franchisee who prevails in an action under the Act is entitled
to actual damages and reasonable attorney and expert witness fees. If the action
was based upon conduct of the franchisor which was in willful disregard of the
law's requirements or the franchisee's rights under the law, exemplary
(punitive) damages may be awarded where appropriate. The court, and not the
jury, will decide whether to award exemplary damages and, if so, in what amount.
On the other hand if the court fords that the franchisee's action is
frivolous, it may order the franchisee to pay reasonable attorney and expert
witness fees.
Franchisor's defense to permanent injunctive relief. Courts may not order a
continuation or renewal of franchise relationship if the franchisor shows that
the basis of the nonrenewal of the franchise relationship was a determination
made in good faith and in the normal course of business:
(1) To convert the leased marketing premises to a use other than the sale
or distribution of motor fuel;
(2) To materially alter, add to, or replace such premises;
(3) To sell such premises,
(4) To withdraw from marketing activities in the geographic area in which
such premises are located; or
(5) That renewal of the franchise relationship is likely to be
uneconomical to the franchisor despite any reasonable changes or
additions to the franchise provisions which may be acceptable to the
franchisee.
In making this defense, the franchisor also must show that he has complied
with the notice requirements of the Act.
This defense to permanent injunctive relief, however, does not affect the
franchisee's right to recover actual damages and reasonable attorney and expert
witness fees if the nonrenewal is otherwise prohibited under the Act.
Issued in Washington, D.C. on August 23, 1978.
XXXX X. X'XXXXX,
Deputy Secretary.
[FR Doc. 78-24419 Filed 8028078. 9:15 am]
FEDERAL REGISTER, VOL. 43, XX. 000 - XXXXXXXXX, XXXXXX 00, 0000
0
XXXXXXXXXXX XXXXXXXXX AGREEMENT
It is agreed this ________ day of August , 2000 between CITGO Petroleum
Corporation, a Delaware corporation, having a place of business at Xxx Xxxxxx
Xxxxx, Xxx 0000, Xxxxx, Xxxxxxxx, 00000, hereinafter called "CITGO,"
and The Pantry. Inc.
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--------------------------------------
a --------------------------------------
corporation, having a principal
office and place of business at 0000 Xxxxxxx Xxxxx
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Xxxxxxx, Xxxxx Xxxxxxxx 00000
--------------------------------------
hereinafter called "FRANCHISEE."
WITNESSETH:
WHEREAS, CITGO and Franchisee intend by this Agreement to create a
"franchise relationship" within the meaning of the Petroleum Marketing Practices
Act; the parties expressly do not intend by this Agreement to create a
"franchise" within the meaning of any state law relating to franchises; and
WHEREAS, CITGO and Franchisee desire to provide for Franchisee's purchase
from CITGO of certain petroleum products for resale by Franchisee under CITGO's
trademark to consumers and retailers in a manner that will serve the interest of
the consuming public and be of benefit to CITGO and Franchisee;
NOW, THEREFORE, CITGO and Franchisee agree as follows:
1. TERM. This Agreement shall be effective for the term of seven (7)
years, beginning 01 July 2000 and expiring on 30 June 2007. Unless validly
terminated or nonrenewed as provided for in the Petroleum Marketing Practices
Act, this Agreement shall automatically renew for successive three (3) year
periods. This agreement replaces*
2. QUANTITIES. Franchisee shall purchase and accept hereunder quantities of
products as set forth below during the respective monthly periods and CITGO
shall sell and deliver the specified quantities of products during the
respective monthly periods. Franchisee hereby acknowledges and agrees that the
purchase and ratable lifting of the monthly quantities of product specified
herein by Franchisee are reasonable, important and of material significance to
the franchise relationship. Franchisee understands and agrees that any failure
by Franchisee to purchase and accept a minimum of ninety percent (90%) of the
monthly quantity of gasoline or diesel fuel listed below during any month on a
ratable basis shall be a violation of this Agreement. Franchisee shall have the
right to purchase up to one hundred and ten percent (110%) of the monthly
quantity of gasoline and/or diesel fuel as set forth below. However, CITGO shall
have no obligation at any time to provide more than one hundred and ten percent
(110%) of such volumes during any month.
The monthly quantities of product set forth below are based on the sales of
motor fuels projected by the Franchisee at locations that CITGO has approved for
branding with the CITGO trade name and trademark. In the event that CITGO agrees
to brand additional locations, the monthly quantities of products set forth
below shall automatically be increased by the projected sales of motor fuels at
the newly branded locations. Likewise, if any location is debranded, the monthly
quantities of product set forth below shall automatically be decreased by the
projected sales at such formerly branded location. These automatic
increases/decreases shall be effective beginning with the month in which the
installation, or removal and return, of the CITGO sign and equipment is
completed, and shall be confirmed by an Amendment to this Agreement. Franchisee
and CITGO agree that they will review the addition or deletion of branded
outlets at least on an annual basis.
Franchisee agrees that the monthly quantity of gasoline set forth below
shall be purchased and be lifted on a ratable basis during the month in the
following ratio:
Unleaded Regular 65% Mid-grade Unleaded 15%
Premium Unleaded 20% __________________ __%
--------
* all prior distributor agreements between CITGO and the Franchisee and its
affiliates, including Kangaroo Inc. and Xxxxxx Enterprises.
5
Franchisee shall have the right to request a variation of the ratio of gasoline
grades set forth above by making a written request to CITGO. Timely requests to
modify the gasoline grade ratio shall be honored by CITGO to the best of its
ability.
GASOLINE
January See the Addendum, dated this same date, to this
Distributor Franchise Agreement which requires
February Franchisee to purchase, as a minimum, a sufficient
volume of gasoline to supply 170 stations.
March
April
May
June
July
August
September
October
November
December
TOTAL
Quantities shall be determined at time and place of loading. All measurements
with regard to deliveries Into marine vessel, pipeline or tank car shall be
corrected to 60DEG. F in accordance with prevailing ASTM procedures. With
respect to all other deliveries under this Agreement, Franchisee elects to have
quantities determined by liquid measure Temperature Corrected (delete
inappropriate method) method. In any jurisdiction where applicable law dictates
the method of measurement, such method shall be used.
3. DELIVERY OF PRODUCTS. Products will be made available at terminals or other
locations selected by CITGO or, at CITGO's election, may be delivered to
destination by transportation selected by CITGO. Franchisee shall strictly
comply with all applicable rules and regulations of terminals and facilities at
which Franchisee receives motor fuel from CITGO. Except as otherwise provided
herein, deliveries shall be made in such quantities and at such times as may be
reasonably directed by Franchisee, subject to CITGO's right to adequate notice
in advance of desired delivery date. Franchisee shall ensure that all trucks,
tankers and lines are xxxx and ready to receive CITGO's motor fuel, so that said
fuel is not mixed, blended or adulterated with any other substance or product.
CITGO may refuse to make delivery into any vehicle which, in the sole judgment
of CITGO, is unsafe or inadequate. Franchisee agrees to provide such proof of
insurance as required by CITGO covering Franchisee's liability for any negligent
or willful acts it commits in connection with the loading, transporting and
delivery of products. Title and risk of loss on all products covered by this
Agreement shall pass to Franchisee at the time and place of delivery. Time and
place of delivery shall be when and at the point that products pass connections
between CITGO's truck rack or pipeline flange and Franchisee or its agent's
receiving connections, transport trucks, tank cars, or vessels.
4. PRICES. Franchisee shall pay CITGO's distributor prices in effect at time
and place of delivery. Such prices will be established by CITGO on an F.O.B.
terminal basis, or other point of sale basis, including at CITGO's election, on
a delivered basis. Franchisee shall also pay CITGO amounts equivalent to any
tax, duty or impost now or hereafter imposed by the United States and/or any
state and/ or municipality, and/or any other governmental authority.
5. TERMS OF PAYMENT. Franchisee agrees to pay CITGO in accordance with such
terms as CITGO's Credit Department, in its sole discretion may from time to time
prescribe in writing. These terms of payment are set forth on all CITGO
invoices. At the present time, CITGO's credit terms are one percent (1%)
Electronic Funds Transfer (EFT) twelve (12) days. The failure by Franchisee to
pay any invoice within the terms then prescribed by CITGO's Credit Department
may result in the restriction of credit, the denial of access to the petroleum
terminals from which Franchisee is authorized to obtain its supply of petroleum
products, and shall constitute grounds for termination and/or non-renewal of
this Agreement. Franchisee agrees to provide CITGO's Credit Department with a
current, audited or certified financial statement within ninety (90) days after
the end of each fiscal year, and such other business related information as may
be requested by CITGO's Credit Department from time to time.
6. BRANDS AND TRADE NAMES. Subject to the following, CITGO hereby grants to
Franchisee, for the term of this Agreement, the right to use CITGO's applicable
brand names, trademarks and other forms of CITGO's identification, in the manner
established by CITGO from time to time, in connection with the resale by
Franchisee of products acquired under CITGO's brand names.
6
(a) CITGO reserves the right to control fully the quality and branding of
products which may, from time to time, be sold and/or distributed under CITGO's
brands and trade names, including the right to terminate or add to such
products, or to change the name or names of any products. Franchisee shall sell
all branded products delivered hereunder under such brand names, trademarks and
trade names of CITGO as may be in use at the time of sale thereof. Franchisee
shall not change or alter by any means whatsoever the nature, quality or
appearance of any of the products purchased hereunder. However, if Franchisee
elects to sell product(s) not purchased or acquired under this Agreement,
Franchisee shall not allow nor permit the use of CITGO's brand names,
trademarks, trade dress, and all other forms of CITGO identification,' in
connection with the resale of such product(s). CITGO's "brand names and
trademarks," as used herein, include CITGO's logos, brand identification,
product and service advertising, credit cards, product names and service marks.
CITGO's "trade dress" refers to the manner and style of advertising material,
including color graphics and art work on product labels, point of sale material,
buildings, signs, pumps and other equipment. Any other product(s) shall be
dearly identified and labeled in such language and print at least comparable in
size to CITGO's brand names, trademarks, trade dress, and other forms of CITGO
identification, used on identical or similar product(s) to make it unmistakably
clear that CITGO brand product(s) are not sold and to preclude any likelihood of
confusion, mistake or deception of the public. As an example, but not by way of
limitation, if a Franchisee sells from a product dispenser a fuel which was not
purchased or acquired under this Agreement, the Franchisee shall completely
obliterate the CITGO brand names, trademarks, trade dress, and all other forms
of CITGO identification with the following designation in print at least
comparable in size to the largest CITGO identification which is being used on
any similar product dispenser: "NO BRAND, THIS IS NOT A CITGO PRODUCT."
Franchisee agrees that if a customer of the Franchisee requests a CITGO
product(s) and such product(s) is not available, the customer of the Franchisee
will be orally advised by the Franchisee that such CITGO product(s) is not
available. Franchisee hereby agrees to defend, indemnity and hold CITGO harmless
from any and all claims, damages, actions or fines (including costs and
attorneys' fees actually incurred) arising out of Franchisee's purchase, storage
or sale of non-CITGO products.
(b) Franchisee recognizes that the identification, trademark and brand
names of CITGO are the property of CITGO and that CITGO's requirements as herein
stated relating to the use of such identification and distributor's advertising
(to include motor vehicles and dispensing equipment) are reasonable and of
material significance to the franchise relationship. Accordingly, it is further
agreed that a failure by the Franchisee to comply with the terms and provisions
of this Section 6 shall constitute grounds for termination and/or non-renewal of
this Agreement.
(c) All signs, poles and identification items furnished or leased to
Franchisee by CITGO, for display at premises through which Franchisee supplies
products for resale, shall be erected, installed and maintained in accordance
with CITGO's specifications, shall remain the property of CITGO and shall be
detached by the Franchisee, or by CITGO (at Franchisee's expense), at CITGO's
option, from the premises and be safely stored and made available for
repossession by CITGO upon CITGO's request. Franchisee agrees to obtain written
acknowledgement on forms satisfactory to CITGO, from the owner and/or occupant
at each of said premises, of CITGO's ownership of said signs, poles and
identification items and of the right of Franchisee or CITGO or their agents to
remove same from the premises at any time. Franchisee understands and agrees
that CITGO identification items will only be provided for those premises that
fulfill CITGO's standards and requirements. Therefore, Franchisee shall not make
available or erect any such CITGO identification items at any location that has
not been approved in writing by CITGO nor shall Franchisee relocate any CITGO
identification items without CITGO's prior written consent. Franchisee hereby
agrees to install all said signs, poles and identification items in accordance
with CITGO's specifications and to maintain all said equipment in good repair.
Franchisee shall bear all responsibility for costs involved in such maintenance
and repair as well as removal. Franchisee agrees to purchase insurance
sufficient to cover the repair and/or replacement value of all said signs, poles
and identification items. CITGO retains title and all ownership rights in all
such signs, poles and identification items. Franchisee agrees that all such
signs, poles and identification items will remain at the designated CITGO
branded location until such time as CITGO grants its permission in writing to
relocate same. Franchisee hereby grants to CITGO the right to enter upon
Franchisee's property and each CITGO branded location for the purpose of
installing, repairing, maintaining, or removing all signs, poles and
identification items at any time during reasonable business hours. Franchisee
further agrees to indemnify and hold CITGO harmless from any and all damages
and/or claims for damages arising out of the installation, use, repair,
maintenance, or removal of all signs, poles and identification items furnished
or leased to Franchisee by CITGO.
(d) In the event that Franchisee terminates this Agreement, or breaches
this Agreement which breach results in termination, Franchisee shall reimburse
CITGO for its costs and expenses, including costs for material and installation
incurred for branding Franchisee's or its customers' service stations and
convenience stores (the "Branding Costs"). The amount of Branding Costs to be
reimbursed shall be equal to the amount of Branding Costs incurred for a
station/store multiplied by a fraction, the numerator being 36 minus the number
of months that the station/store was branded CITGO subsequent to the Completion
Date and the denominator being 36. For purposes herein, the Completion Date
shall mean the date that the station/store was approved by CITGO as a CITGO
branded outlet.
7. MINIMUM STANDARDS. Franchisee shall operate or cause to operate retail
facilities including all buildings, equipment, restrooms, and driveways which
are owned, operated, supplied, leased, licensed or franchised by Franchisee in a
clean, neat, safe, lawful and healthful manner, and not in violation of CITGO's
rules and image standards. CITGO shall have the right to debrand or require
Franchisee to debrand any retail facility failing to meet the provisions of this
Section 7.
8. ALLOCATION. If CITGO, because of a shortage of crude oil, raw materials,
products, or refining capacity, either of its own, or of its other regular
sources of supply, or in the industry generally, or because of governmental
regulations, or for any reason, deems that it may be unable to meet all of its
supply requirements, CITGO may allocate its products equitably among its various
customers pursuant to a plan, method or formula as CITGO believes fair and
reasonable. Franchisee agrees to be bound by any such allocation. During the
period of such allocation, the provisions of Paragraph 2 relating to volume
requirements shall not be effective, and the quantity deliverable under this
Agreement shall then be such quantity as CITGO determines it can equitably
allocate to Franchisee. Upon cessation of any such period of allocation neither
CITGO nor Buyer shall be obligated to make up any quantities omitted pursuant to
the provisions herein.
9. CLAIMS. Any claim for defect or variance in quality of product furnished
hereunder shall be made in writing directed to CITGO as herein provided within
five (5) days after discovery of the defect or variance. CITGO shall be
furnished samples adequate to test the products claimed to be defective and
shall be afforded the opportunity to take its own samples. Any and all claims
not made within the time and in the manner herein provided shall be deemed
waived and released by the Franchisee.
7
10. CREDIT CARDS. During the term of this franchise, Franchisee shall be
entitled to grant credit to holders of credit cards which may be issued by CITGO
and/or issued by other companies listed in CITGO's then current credit card
regulations, a copy of which has been provided to Franchisee. It is specifically
understood that the granting of credit shall be pursuant to the terms and
conditions set forth in such credit card regulations including that such credit
extension shall be only in conjunction, with the sale of CITGO products and that
CITGO shall have the right in its sole discretion to amend or terminate such
regulations and discontinue its credit card program at any time. Franchisee
agrees that all credit card invoices which it may transmit and assign to CITGO
shall be in conformity with CITGO's credit card regulations and that CITGO may
reject or charge back any credit card invoices not conforming to said
instructions. Franchisee further agrees that upon such rejection or charge back,
the value of the credit card invoices which were rejected or charged back shall
become immediately due and owing from Franchisee to CITGO and may be deducted
from subsequent checks for payment of credit card invoices. All credit card
invoices shall be forwarded by registered mail or other means authorized by
CITGO to such place(s), and at such time intervals, as CITGO may designate, from
time to time. Franchisee expressly agrees that CITGO shall have the right but
not the obligation to apply the proceeds of credit card invoices or any other
credits which may be owing to Franchisee toward the payment of any indebtedness
owed by Franchisee to CITGO. Franchisee grants to CITGO a security interest in
all credit card invoices and proceeds from such credit card invoices to secure
the payment of product purchases from CITGO, and agrees to execute documents
reasonably necessary to perfect such security interest.
11. FORCE MAJEURE. In the event that either party hereto is hindered, delayed
or prevented by "force majeure" in the performance of this Agreement, the
obligation of the party so affected shall be suspended and proportionally abated
during the continuance of the force majeure condition and the party so affected
shall not be liable in damages or otherwise for its failure to perform. The term
"force majeure" as used herein shall mean any cause whatsoever beyond the
control of either party hereto, including, but not limited to (a) act of God,
flood, fire, explosion, war, riot, strike and other labor disturbance; (b)
failure in, or inability to obtain on reasonable terms, raw materials, finished
products, transportation facilities, storage facilities and/or manufacturing
facilities; (c) diminution, nonexistence or redirection of supplies as a result
of compliance by CITGO, voluntary or otherwise, with any request, order,
requisition or necessity of the government or any governmental officer, agent or
representative purporting to act under authority, or with any governmental or
industry rationing, allocation or supply program; and (d) CITGO's inability to
meet the demand for its products at CITGO's normal and usual source points for
supplying Franchisee, regardless of whether CITGO may have been forced to divert
certain supplies from such source points in order to alleviate shortages at
other distribution points.
If by reason of any force majeure condition CITGO shall be unable to supply
the requirements of all of its customers of any product covered by this
Agreement, CITGO's obligation while such condition exists shall, at its option,
be reduced to the extent necessary in its sole judgment and discretion to
apportion fairly and reasonably among CITGO's customers the amount of product
which it is able to supply. Franchisee shall not hold CITGO responsible in any
manner for any losses or damages which Franchisee may claim as a result of any
such apportionment. CITGO shall not be required to make up any deficiency in any
product not delivered as a result of any such apportionment. In no event shall
any force majeure condition affect Franchisee's obligation to pay for product
when due.
12. TERMINATION AND NON-RENEWAL. CITGO's rights to terminate or elect not to
renew this franchise relationship are as specified in Title I of the Petroleum
Marketing Practices Act as same maybe amended from time to time. The Pantry's
termination*
13. HANDLING OF PRODUCTS. (a) Franchisee acknowledges that the petroleum
products being sold under this franchise, by their nature, require special
precautions in handling and that Franchisee, its employees and agents are fully
informed as to governmental regulations and approved procedures relating
thereto. Franchisee is solely responsible for compliance with all laws, rules,
regulations and orders relative to receiving, transporting, storing, pricing,
selling and distributing products covered hereunder. Franchisee is also solely
responsible for the proper disposal of waste materials generated at any of the
Franchisee's facilities. Franchisee shall also inject into the gasoline such
additives and in such amounts as requested by CITGO.
(b) Franchisee agrees and understands that the regulations of the
Environmental Protection Agency require that where motor gasoline is marketed as
"unleaded gasoline" such gasoline will not contain more than 0.05 grams of lead
per gallon at the retail level and that such regulations may lead to imposition
of substantial penalties whenever violations occur. CITGO hereby agrees that it
will utilize all necessary and appropriate testing procedures to ensure that the
lead concentration in "unleaded gasoline" CITGO sells to Franchisee does not
exceed legally acceptable limits. Franchisee agrees that insofar as it sells
unleaded gasoline under CITGO's brand name or trademark, Franchisee will
regularly and frequently test its transportation means and all storage tanks
from which such product is dispensed so as to ensure that the lead content of
such gasoline at no time exceeds the legal limits. Franchisee further covenants
that insofar as its aforementioned tests should, at any time reflect that the
lead content of such gasoline exceeds 0.04 grams per gallon, it will immediately
notify CITGO and take such further action with respect to said gasoline as CITGO
may request. Franchisee further agrees to comply with all applicable posting and
labeling laws and regulations, including but not limited to those pertaining to
octane ratings, lead and oxygenates.
(c) Franchisee further agrees to comply or to require compliance with all
laws, rules and regulations, whether federal, state or local, pertaining to
underground storage tanks and lines which hold petroleum products sold to
Franchisee pursuant to this Agreement including but not limited to those of
financial responsibility and/or pollution insurance requirements.
(d) Franchisee further agrees to indemnify and hold CITGO harmless from
any and all damages and/or claims for damages arising out of any violation of
this Section 13.
14. INDEMNITY (a) Franchisee hereby releases and agrees to indemnify
and hold CITGO, its agents, servants, employees, successors and assigns,
harmless from and against any and all claims, suits, losses, obligations,
liabilities, injuries, and damages, including attorneys' fees and costs of
litigation, for death, personal injury, property damage or other claim arising
out of any failure by Franchisee to perform, fulfill or observe any obligation
or liability of, Franchisee set forth herein or any negligent act or omission by
Franchisee or any cause or condition of any kind directly or indirectly arising
in connection with the use, occupancy, maintenance, upkeep, repair, replacement
or operation of any place of business, service station or marketing premises
(including but not limited to adjacent sidewalks, drives, curbs, signs, poles
and all other fixtures and equipment located thereon) which place of business,
service station or marketing premise is or was either directly or indirectly
owned, leased, operated, supplied, franchised, or licensed by or through
Franchisee.
*rights as set forth in Paragraph 11 of the Addendum to this DFA
that was executed by the parties on this same date shall survive the termination
of the Addendum and remain in full force and effect during the term of this
agreement.
8
(b) Franchisee hereby releases and agrees to indemnify and hold CITGO, its
agents, servants, employees, successors and assigns, harmless from and against
any and all claims, suits, Iosses, injuries, liabilities and damages, including
attomeys' fees and costs of litigation, resulting from the shipment, delivery,
use, storage, (handling, and sale of petroleum products, including, but not
limited to, the seepage or leakage of any petroleum products and fire or
explosion at any place of business, service station or marketing premises,
including, but not limited to, the storage tanks, piping and pumps located
thereon which place of business, service station or marketing premises is or was
either directly or indirectly owned, leased, operated, supplied, franchised or
licensed by or through Franchisee.
(c) Franchisee shall defend, indemnify and hold CITGO, its agents,
servants, employees, successors and assigns, harmless from and against any
fines, penalties, taxes, judgments, charges, or expenses, (including attorneys'
fees and costs of litigation), for violations of any law, ordinance or
regulation caused by any act or omission, whether negligent or otherwise, of
Franchisee or its agents, servants, employees, contractors, dealers, franchisees
or licensees.
(d) Notwithstanding the foregoing provisions, Franchisee will not be
responsible for violations of any law, ordinance or regulation by CITGO, nor for
any acts or omissions arising from the sole negligence of CITGO, its agents, or
employees.
15. INSURANCE. (a) Franchisee shall obtain and maintain, at its own expense,
insurance through an insurer acceptable to CITGO. Such insurance shall include:
(1) Worker's Compensation Insurance covering Franchisee's employees; and
Employer's Liability Insurance with a minimum limit of FIVE HUNDRED THOUSAND
DOLLARS ($500,000) per occurrence.
(2) Commercial General Liability Insurance, including contractual liability and
products-completed operations liability, explosion, and collapse liability, as
well as coverage on all contractor's equipment (other than motor vehicles
licensed for highway use) owned, hired, or used in performance of this Agreement
having a minimum combined single limit of ONE MILLION DOLLARS ($1,000,000) each
occurrence (or the equivalent) for bodily injury and property damage including
personal injury.
(3) Automobile Liability Insurance, including contractual liability covering
all motor vehicles owned, hired, or used in the performance of this Agreement,
with a minimum combined single limit of ONE MILLION DOLLARS ($1,000,000) each
occurrence (or the equivalent) for bodily injury and property damage.
(b) The foregoing are minimum insurance requirements only and may not
adequately meet the entire insurance needs of Franchisee. Franchisee shall list
CITGO as an additional insured on all insurance policies described in subsection
(2) and (3) above and such insurance shall not be subject to other insurance
clauses. Franchisee shall furnish to CITGO upon request with certificates of
insurance acceptable to CITGO, which provide that coverage will not be canceled
or materially changed prior to thirty (30) working days' advance written notice
to CITGO.
(c) Franchisee shall require its dealers, who are handling CITGO product,
to maintain the insurance described herein.
16. ASSIGNMENT/TRANSFER. This Agreement may not be assigned by Franchisee
except with CITGO's prior written consent which will not be unreasonably
withheld. In the event more than thirty-five percent (35%) of the ownership
interest of Franchisee's business is sold, transferred, or otherwise disposed
of, then CITGO reserves the right to deem such a transfer an attempt to assign
this Agreement. In any event, Franchisee must notify CITGO thirty (30) days
prior to the transfer of any ownership interest in Franchisee's business.
17. RELATIONSHIP OF THE PARTIES. Franchisee is an independent contractor
operating an independent business and is not authorized to act as an agent or
employee of CITGO or to make any commitments or incur any expense or obligations
of any kind on behalf of CITGO, unless expressly authorized by CITGO in writing.
18. GENERAL PROVISIONS. This Agreement shall bind the executors,
administrators, personal representatives, assigns and successors of the
respective parties. The right of either party to require strict performance by
the other party hereunder shall not be affected by any previous waiver,
forbearance or course of dealing. No delay or omission of CITGO in exercising or
enforcing any right or power accruing upon any breach of this Agreement by
Franchisee shall impair any such right or power, or shall be construed to be a
waiver of any breach of this Agreement, or any acquiescence therein. All notices
hereunder shall be deemed to have been sufficiently given if and when presented
or mailed by certified mail to the parties at the addresses above or such other
addresses as may be fumished to the other in writing by certified mail. All
understandings and agreements relating to the subject matter hereof either
verbal or written, except insofar as incorporated in this Agreement, are hereby
canceled and withdrawn. CITGO has made no promises, claims or representations to
Franchisee which are not contained in this Agreement. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and may be altered only by writing signed by the parties hereto. This Agreement
shall not be binding upon CITGO until it has been duly accepted by CITGO as
evidenced by the signature of its Vice President or other authorized designee.
Commencement of dealing between the parties shall not be deemed a waiver of this
requirement. This Agreement shall be governed by the laws of the State of
Oklahoma.
IN WITNESS WHEREOF, the parties have caused this Instrument to be duly executed
the day and year first above written.
Firm: THE PANTRY, INC. CITGO PETROLEUM CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ WA XxXxxx
------------------------------ ---------------------------
/s/ Xxxxxx Xxxxx /s/ X X Xxxxxx
------------------------------ ---------------------------
Witness: Witness:
9
ADDENDUM TO DISTRIBUTOR FRANCHISE AGREEMENT
CITGO IMAGE VALUE PROGRAM
Franchisee acknowledges that the appearance and cleanliness of CITGO brand
retail outlets are important for both CITGO and its distributors since they are
key factors in enabling distributors to gain new customers, keep customers
coming back, and compete more effectively. In an effort to further enhance the
CITGO brand image and customer loyalty, CITGO has developed the CITGO Image
Value Program ("Program") that establishes standards for appearance and
cleanliness for all CITGO brand retail outlets.
Paragraph 7 of the Distributor Franchise Agreement requires that Franchisee
comply with certain minimum standards of CITGO. This obligation includes
operating, or causing the retail outlets to operate, the retail facilities in a
xxxx neat, safe, lawful and healthful manner. If any retail outlet is not
operated in accordance with these minimum standards, CITGO may debrand, or cause
the Franchisee to debrand, the retail outlet. Thus, pursuant to Xxxxxxxxx 0,
Xxxxxxxxxx agrees to meet, and cause its CITGO brand retail outlets to meet, the
standards set forth in the program.
The evaluation and debrand procedures of the Program are as follows:
.. A CITGO representative will evaluate each retail outlet of Franchisee twice a
year unless the retail outlet scores 90% or above on the first evaluation in
which case a second evaluation will not be required that year.
.. If the retail outlet scores below 70% on the first evaluation, CITGO will
send Franchisee a notice of noncompliance to Franchisee. A second evaluation
will then be performed within 30 to 60 days from the date of the
noncompliance notice.
.. If the retail outlet scones below 70% on the second evaluation, CITGO will
send Franchisee a notice to debrand the retail outlet. Franchisee, at
Franchisee's sole expense, will have 120 days from the date of this notice to
debrand and remove the CITGO signs and take all necessary steps to otherwise
debrand the retail outlet. This will provide Franchisee with enough time to
comply with the notice requirements of the Petroleum Marketing Practices Act.
Franchisee shall pay the fees charged to conduct the evaluations as follows: 1)
50% of the fees will be paid out of Franchisee's cooperative advertising fund
and 2) CITGO will EFT Franchisee's account for the remaining 50% of the fees. If
Franchisee does not have enough cooperative advertising funds to cover 50%, the
shortfall will also be drafted from Franchisee's account. The fee that will be
charged for each evaluation in 1998 will be $25.00 per retail outlet.
CITGO Petroleum Corporation [CITGO LOGO]
X.X. Xxx 0000
Xxxxx XX 00000-0000
May 27, 1994
Dear CITGO Branded Distributor:
The EPA has suggested that a branded refiner's supply agreement
specifically refer to RVP regulations. CITGO's Distributor Franchise Agreement
does require full compliance with all applicable laws and regulations. The
purpose of the enclosed Addendum is to reference the RVP regulations
specifically. Please place the Addendum with your CITGO Distributor Franchise
Agreement.
Very truly yours,
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
General Manager
Marketing
SJB/kl
ADDENDUM TO DISTRIBUTOR FRANCHISE AGREEMENT
The EPA have promulgated regulations restricting the maximum allowable xxxx
vapor pressure ("RVP") for gasoline. The maximum RVP during the RVP season
(generally June 1 through September IS) is 7.8 psi in nonattainment areas and
9.0 psi in all other areas. These regulations provide for the imposition of
substantial penalties whenever violations occur. Section 13 of the Distributor
Franchise Agreement requires Franchisee to comply with all laws, rules,
regulations and orders relative to the receiving, transporting, storing,
distributing and selling gasoline, including the RVP regulations.
CITGO will utilize all necessary and appropriate testing procedures to
ensure that motor fuels sold to Franchisee are in compliance with the RVP
regulations. Franchisee, after lifting or receiving the motor fuels, will take
appropriate measures to ensure that the motor fuels remain in compliance with
the RVP regulations through sale at retail. Specifically, Franchisee will
deliver and sell only 7.8 psi (or lower) gasolines into nonattainment areas and
9.0 psi (or lower) into all other areas during the RVP season, and will not
adulterate, contaminate or add any components to CITGO motor fuels, or allow
others to do so, the effect of which would result in the motor fuels no longer
complying with the RVP regulations. Prior to the start of the RVP Season,
Franchisee will also monitor its gasoline inventory turnover so that all grades
of gasoline at the retail locations that are supplied by Franchisee are in
compliance with the RVP regulations at the start of the RVP season.
All retail locations that are branded CITGO are included in CITGO's retail
quality program and are subject to random and periodic sampling. CITGO and/or
Franchisee may take samples at retail locations that are operated or supplied by
Franchisee for the purpose of testing for RVP compliance. Insofar that an RVP
violation is detected by testing or otherwise, Franchisee shall immediately
cease selling motor fuels that are in violation and take such further action
necessary to remedy the violation, including such action as CITGO or the EPA may
request. Furthermore, Franchisee must immediately report such violation to CITGO
and advise CITGO of corrective actions, steps to prevent future violation, steps
to identify the cause of the violation, and the results of resampling and
testing.
Franchisee will advise its employees, agents, and dealers who are involved
in the ordering, selling, dispatching and delivery of motor fuels of the RVP
regulations and provide appropriate training of such personnel especially for
those supplying retail locations in nonattainment areas that borders attainment
areas, and supplied from terminals that handle both 7.8 psi and 9.0 psi motor
fuels.
CITGO Petroleum Corporation [CITGO LOGO]
X.X. Xxx 0000
Xxxxx XX 00000-0000
December 2, 1994
Dear CITGO Branded Distributor:
The EPA has suggested that a branded refiner's supply agreement
specifically refer to RFG regulations. CITGO's Distributor Franchise Agreement
does require full compliance with all applicable laws and regulations. The
purpose of the enclosed Addendum is to reference the RFG regulations
specifically. Please place the Addendum with your CITGO Distributor Franchise
Agreement.
Very truly yours,
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
General Manager
Marketing
ADDENDUM TO DISTRIBUTOR FRANCHISE AGREEMENT
The U.S. Environmental Protection Agency (the "EPA) has issued regulations
in CFR Part 80 of Title 40 in order to comply with the Clean Air Act of 1990
(the "Regulations"). The Regulations require that, on and after December 1,
1994, only reformulated gasoline ("RFG") may be delivered to retail locations
that are located within various ozone nonattainment areas ("RFG Areas"). CITGO
will supply to you motor fuels that meet the requirements of the Regulations.
However, it is also your responsibility to comply with the Regulations. These
Regulations prescribe various rules concerning segregation of RFG, transfer
documentation when transferring title or custody throughout the distribution
chain, quality assurance programs, fuel additive requirements, retention of
records for five years, varying specifications by regions, and registration with
the EPA. These Regulations provide for the imposition of substantial penalties
whenever violations occur. Section 13 of the Distributor Franchise Agreement
requires Franchisee to comply with all laws, rules, regulations and orders
relative to the receiving, transporting, storing, distributing and selling
gasoline, including the Regulations.
Maintain Product Integrity. The Regulations require that downstream
parties, including distributors, not (i) sell or deliver to any retail facility
located within a RFG Area motor fuels that do not meet the Regulation's RFG
requirements, (ii) contaminate or commingle RFG with any product that is not
RFG, and sell or distribute the resulting mixture as RFG, or (iii) contaminate
or impermissibly commingle conventional gasoline or RBOB. Contaminate or
impermissibly commingle conventional gasoline means blending any material
(except legally permissible amounts of oxygenates), unless (i) the material
itself, prior to blending, satisfies all the requirements and specifications for
conventional gasoline and (ii) such blending is performed by someone who is in
compliance with all of the regulations pertaining to "refiners," including
registration requirements with the EPA. With respect to RBOB, only CITGO may
blend the oxygenate. With respect to conventional gasoline, only CITGO may blend
products and oxygenates. Franchisee shall not blend any products, materials or
oxygenates with CITGO branded gasolines unless (i) such blending complies with
all Regulations and (ii) prior written consent is obtained from CITGO's Manager
of gasoline products.
Franchisee shall allow CITGO, its agents and contractors access to the
retail facility for the purpose of obtaining samples to be tested under CITGO's
Quality Assurance Program. Franchisee shall provide to CITGO a copy of the
results of any testing that was performed on the motor fuels by Franchisee or
that were received by the Franchisee from the EPA or any other third party. In
the event that a violation of the requirements for RFG or conventional gasoline
is detected, whether by testing or otherwise, Franchisee shall immediately cease
selling the noncomplying RFG or conventional gasoline and take such further
action as is necessary to remedy the violation, including such action as CITGO
or the EPA may request. Furthermore, Franchisee must immediately report any
violations to CITGO and advise CITGO of corrective actions, steps to prevent
further violation, steps to identify the cause of the violations, and the
results of resampling and testing.
Transfer Documents. CITGO and Franchisee agree to comply with the
Regulations on Product Transfer Documentation with respect to transfer of title
or custody of RFG, RBOB, and conventional gasoline. The Product Transfer
Documents (PTD) must contain the specific information described in Sections
80.77, 80.106 and 80.158 of the Regulations. This information includes (i) name
and address of both the transferor and transferee; (ii) the volume, (iii)
location and date of transfer; (iv) the proper identification of the gasoline as
conventional or reformulated; and (v) in the case of RFG or RBOB additional
information including whether the RFG or RBOB is VOC controlled, and if so,
whether VOC is controlled in Region 1 or 2, whether the gasoline is oxygenated
fuels program reformulated gasoline ("OPRG"), whether the gasoline is certified
under the simple or complex model, and the minimum and/or maximum standards of
benzene, oxygen and RVP. If the transferor or transferee is a refiner, importer
or oxygenate blender, its EPA assigned registration number must also be included
on the PTD.
The PTD for conventional gasoline must also contain a statement that the
product does not meet the requirements for reformulated gasoline, and may not be
used in any reformulated gasoline covered area.
The PTD must be given by the transferor to transferee for each change of
title or custody in the distribution chain (retailer's sales to consumer users
are excluded).
The PTD must be kept for 5 years for both RFG and conventional gasoline.
Additionally, retail locations must keep the PTD for the most recent three
deliveries.
The PTD for each load of gasoline shall state whether the gasoline has been
additized or if not additized, shall state that the gasoline can not be sold to
the ultimate consumer.
Fuel Additive. As of January 1, 1995, no gasoline can be sold to the retail
consumer that has not been properly additized. All gasoline must contain the
proper level of a certified additive. CITGO will provide automated additive
injection systems at all of its "owned" or "equity" terminals and most of the
exchange terminals. For gasolines lifted from those exchange terminals not
having automated additive injection systems, CITGO will provide the additive but
the Franchisee must blend the additive by hand. CITGO will advise you of
terminals that require manual additive treating. The Franchisee is responsible
for ordering and maintaining a sufficient inventory of additive to meet the
requirements of manual treating under the Regulations.
The Franchisee must comply with the record keeping requirements of the
Regulations, and such records must be available to the EPA and CITGO. In
addition to the PTD, Franchisee is required to maintain the volumetric additive
reconcilation (VAR) records for each load of gasoline that is hand treated. The
records must show that each load of gasoline was properly additized.
SUMMARY OF TITLE I OF THE PETROLEUM MARKETING PRACTICES ACT
[3128-01] 38743
OFFICE OF THE SECRETARY
SUMMARY OF TITLE I
OF THE PETROLEUM MARKETING PRACTICES ACT
AGENCY: Department of Energy.
ACTION: Notice.
SUMMARY: This notice contains a summary of Title I of the Petroleum Marketing
Practices Act, a new Federal law enacted on June 19, 1978. The law is intended
to protect franchised distributors and retailers of gasoline and diesel motor
fuel against arbitrary or discriminatory termination or non-renewal of
franchises. The summary describes the reasons for which a franchise may be
terminated or not renewed under the new law, the responsibilities of
franchisors, and the remedies and , relief available to franchisees. Franchisors
must give franchisees copies of the summary contained in this notice whenever
notification of termination or nonrenewal of a franchise is given.
FOR FURTHER INFORMATION
CONTACT:
Xxxxxxx X. Xxxx, Xx., Office of Competition, Department of Energy, 00
Xxxxxxxxxxxxx Xxxxxx XX., Xxxx 000, Xxxxxxxxxx, X.X. 00000, 000-000-0000.
Xxxxxxx Xxxxx or Xxxxxx X. Xxxxxxxx, Office of General Counsel, Department
of Energy, 00xx xxx Xxxxxxxxxxxx Xxxxxx XX, Xxxx 0000, Xxxxxxxxxx, X.X.
00000, 000-000-0000 or 000-000-0000.
SUPPLEMENTARY INFORMATION: Title I of the Petroleum Marketing Practices Act,
Pub. L. 95-297 (the "Act"), enacted on June 19, 1978, provides for the
protection of franchised distributors and retailers of motor fuel by
establishing minimum Federal standards goveming the termination of franchises
and the non-renewal of franchise relationships by the franchisor or distributor
of such fuel. Section 104(d)(1) of the Act provides that the Secretary of Energy
shall prepare and publish in the FEDERAL REGISTER, not later than 30 days after
enactment of the Act, a simple and concise summary of the provisions of Title 1,
including a statement of the respective responsibilities of, and the remedies
and relief available to, franchisors and franchisees under that title.
As required by section 104(d)(1) of the Act, the following is a summary
statement of the respective responsibilities of, and the remedies and relief
available to, franchisors and franchisees. Franchisors must give copies of this
summary statement to their franchisees when entering an agreement to terminate
the franchise or not to renew the franchise relationship, and when giving
notification of termination or non-renewal. In addition to the summary of the
provisions of Tide 1, a more detailed description of the definition contained in
the Act and of the legal remedies available to franchisees is also included in
this notice, following the summary statement.
SUMMARY OF LEGAL RIGHTS OF MOTOR FUEL FRANCHISEES
This is a summary of the franchise protection provisions of the Federal
Petroleum Marketing Practices Act. This summary must be given to you. as a
person holding a franchise for the sale, consignment or distribution of gasoline
or diesel motor fuel, in connection with any termination or non-renewal of your
franchise by your franchising company (referred to in this summary as your
supplier).
The franchise protection provisions of the Act apply to a variety of franchise
arrangements. The term "franchise" is broadly defined as a license to use a
motor fuel trademark which is owned or controlled by a refiner, and it includes
secondary arrangements such as leases of real property and motor fuel supply
agreements which have existed continuously since May 15, 1973, regardless of a
subsequent withdrawal of a trademark. Thus, if you have lost the use of a
trademark previously granted by your supplier but have continued to receive
motor fuel supplies through a continuation of a supply agreement with your
supplier, you are protected under the Act.
You should read this summary carefully, and refer to the Act if necessary,
to determine whether a proposed termination or non-renewal of your franchise is
lawful, and what legal remedies are available to you if you think the proposed
termination or failure to renew is not lawful. In addition, if you think your
supplier has failed to comply with the Act, you may wish to consult an attorney
in order to enforce your legal rights.
The Act is intended to protect you, whether you are a distributor or a
retailer, from arbitrary or discriminatory termination or non-renewal of your
franchise agreement. To accomplish this, the Act first lists the reasons for
which termination or nonrenewal is permitted. Any notice of termination or
non-renewal must state the precise reason, as listed in the Act, for which the
particular termination or non-renewal is being made. These reasons are described
below under the headings "Reasons for Termination" and "Reasons for Nonrenewal."
You should note that the Act does not restrict the reasons which may be
given for the termination of a franchise agreement entered into before the June
19, 1978 effective date of the Act. However, any non-renewal of such a
terminated franchise must be based on one of the reasons for non-renewal
summarized below.
The Act also requires your supplier to give you a written notice of
termination or intention not to renew the franchise within certain time periods.
These requirements are summarized below, under the heading "Notice Requirements
for Termination or Non-renewal."
The Act allows trial and interim franchise agreements, which are described
below under the heading "Trial and Interim Franchises."
The Act gives you certain legal rights if your supplier terminates or does
not renew your franchise in a way that is not permitted by the Act. These legal
rights are described below under the heading "Your Legal Rights."
This summary is intended as a simple and concise description of the general
nature of your rights under the Act. For a more detailed description of these
rights, you should read the text of the Petroleum Marketing Practices Act itself
(Pub. L. 95-297, 92 Stat. 322,15 U.S.C. 2801).
I. REASONS FOR TERMINATION
The following is a list of the only reasons for which your franchise is
permitted to be terminated by the Act. One or more of these reasons must be
specified if your franchise was entered into on or after June 19, 1978 and is
being terminated. If your franchise was entered into before June 19, 1978, as
discussed above, there is no statutory restriction on the reasons for which it
may be terminated. If such a franchise is terminated, however, the Act requires
the supplier to renew the franchise relationship unless one of the reasons
listed under this heading or one of the additional reasons for non-renewal
described below under the heading "Reasons for Non-renewal" exists.
If your supplier attempts to terminate a franchise which you entered into
on or after June 19, 1978 for a reason that is not listed under this heading,
you can take the legal action against your supplier that is described below
under the heading "Your Legal Rights."
Noncompliance with franchise agreement. Your supplier may terminate your
franchise if you do not comply with a reasonable and important requirement of
the franchise relationship. In order to use this reason, your supplier must have
learned of this non-compliance recently. The Act limits the time period within
which your supplier must have learned of your non-compliance to various periods,
the longest of which is 120 days, before you receive notification of the
termination.
Lack of good faith efforts. Your supplier may terminate your franchise if
you have not made good faith efforts to carry out the requirements of the
franchise, provided you are fast notified in writing that you are not meeting a
requirement of the franchise and you are given an opportunity to make a good
faith effort to carry out the requirement. This reason can be used by your
supplier only if you fail to make good faith efforts to carry out the
requirements of the franchise for a period of 180 days before you receive the
notice of termination.
Mutual agreement to terminate the franchise. A franchise can be terminated
by an agreement in writing between you and your supplier if the agreement is
entered into not more than 180 days before the effective date of the termination
and you receive a copy of this agreement, together with this summary statement
of your rights under the Act. You may cancel the agreement to terminate within 7
days after you receive a copy of the agreement, by mailing (by certified mail) a
written statement of this effect to your supplier.
Withdrawal from the market area. Under certain conditions, the Act permits
your supplier
FEDERAL REGISTER, VOL. 43, NO. 169 - WEDNESDAY, AUGUST 30, 1978
i
to terminate your franchise if your supplier is withdrawing from marketing
activities in the entire geographic area in which you operate. You should read
the Act for a more detailed description of the conditions under which market
withdrawal terminations are permitted.
Other events permitting a termination. If your supplier learns within the
time period specified in the Act (which in no case is more than 120 days prior
to the termination notice) that one of the following events has occurred, your
supplier may terminate your franchise agreement:
(1) Fraud or criminal misconduct by you that relates to the operation of
your marketing premises.
(2) You declare bankruptcy or a court determines that you are insolvent.
(3) You have a severe physical or mental disability lasting at least 3
months which makes you unable to provide for the continued proper
operation of the marketing premises.
(4) Expiration of your supplier's underlying lease to the leased marketing
premises, if you were given written notice before the beginning of the
term of the franchise of the duration of the underlying lease and that
the underlying lease might expire and not be renewed during the tern
of the franchise.
(5) Condemnation or other taking by the government, in whole or in part,
of the marketing premises pursuant to the power of eminent domain. If
the termination is based on a condemnation or other taking, your
supplier must give you a fair share of any compensation which he
receives for any loss of business opportunity or good will.
(6) Loss of your supplier's right to grant the use of the trademark that
is the subject of the franchise, unless the loss was because of bad
faith actions by your supplier relating to trademark abuse, violation
of Federal or State law, or other fault or negligence.
(7) Destruction (other than by your supplier) of all or a substantial part
of your marketing premises. If the termination is based on the
destruction of the marketing premises and if the premises are rebuilt
or replaced by your supplier and operated under a franchise, your
supplier must give you a right of first refusal to this new franchise.
(8) Your failure to make payments to your supplier of any sums to which
your supplier is legally entitled.
(9) Your failure to operate the marketing premises for 7 consecutive days,
or any shorter period of time which, taking into account facts and
circumstances, amounts to an unreasonable period of time not to
operate.
(10) Your intentional adulteration, mislabeling or misbranding of motor
fuels or other trademark violations.
(11) Your failure to comply with Federal, State, or local laws or
regulations of which you have knowledge and that relate to the
operation of the marketing premises.
(12) Your conviction of any felony involving moral turpitude.
(13) Any event that affects the franchise relationship and as a result of
which termination is reasonable.
II. REASONS FOR NON-RENEWAL
If your supplier gives notice that he does not intend to renew any
franchise agreement, the act requires that the reason for non-renewal must be
either one of the reasons for termination listed immediately above, or one of
the reasons for nonrenewal listed below.
Failure to agree on changes or additions to franchise. If you and your
supplier fail to agree to changes in the franchise that your supplier in good
faith has determined are required, and your supplier's insistence on the changes
is not for the purpose of preventing renewal of the franchise, your supplier may
decline to renew the franchise.
Customer complaints. If your supplier has received numerous customer
complaints relating to the condition of your marketing premises or to the
conduct of any of your employees, and you have failed to take prompt corrective
action after having been notified of these complaints, your supplier may decline
to renew the franchise.
Unsafe or unhealthful operations. If you have failed repeatedly to operate
your marketing premises in a clean, safe and healthful manner after repeated
notices from your supplier, your supplier may decline to renew the franchise.
Operation of franchise is uneconomical. Under certain conditions specified
in the act, your supplier may decline to renew your franchise if he has
determined that renewal of the franchise is likely to be uneconomical. Your
supplier may also decline to renew your franchise if he has decided to convert
your marketing premises to a use other than for the sale of motor fuel, to sell
the premises, or to materially alter, add to, or replace the premises.
III. NOTICE REQUIREMENTS FOR TERMINATION OR NONRENEWAL
The following is a description of the requirements for the notice which
your supplier must give you before he may terminate your franchise or decline to
renew your franchise relationship. These notice requirements apply to all
franchise terminations, including franchises entered into before June 19, 1978
and trial and interim franchises, as well as to all non-renewals of franchise
relationships.
How much notice is required. In most cases, your supplier must give you
notice of termination or non-renewal at least 90 days before the termination or
non-renewal takes effect.
In circumstances where it would not be reasonable for your supplier to give
you 90 days notice, he must give you notice as soon as he can do so. In
addition, if the franchise involves leased marketing premises, your supplier may
not establish a new franchise relationship involving the same premises until 30
days notice was given to you or the date the termination or non-renewal takes
effect, whichever is later. If the franchise agreement permits, your supplier
may repossess the premises and, in reasonable circumstances, operate them
through his employees or agents.
If the termination or non-renewal is based upon a determination to withdraw
from the marketing of motor fuel in the area, your supplier must give you notice
at least 180 days before the termination or non-renewal takes effect.
Manner and contents of notice. To be valid the notice must be in writing
and must be sent by certified mail or personally delivered to you. It must
contain:
(1) A statement of your supplier's intention to terminate the franchise or
not to renew the franchise relationship, together with his reasons for
this action;
(2) The date the termination or non-renewal takes effect; and
(3) A copy of this summary.
IV. TRIAL FRANCHISES AND INTERIM FRANCHISES
The following is a description of the special requirements that apply to
trial and interim franchises.
Trial franchises. A trial franchise is a franchise, entered into on or
after June 19, 1978, in which the franchisee has not previously been a party to
a franchise with the franchisor and which has an initial term of 1 year or less.
A trial franchise must be in writing and must make certain disclosures,
including that it is a trial franchise, and that the franchisor has the right
not to renew the franchise relationship at the end of the initial term by giving
the franchisee proper notice.
The unexpired portion of a transferred franchise (other than a trial
franchise, as described above) does not qualify as a trial franchise.
In exercising his right not to renew a trial franchise at the end of its
initial term, your supplier must comply with the notice requirements described
above under the heading "Notice Requirements for Termination or Non-renewal."
Interim franchises. An interim franchise is a franchise, entered into on or
after June 19, 1978, the duration of which, combined with the terns of all prior
interim franchises between the franchisor and the franchisee, does not exceed 3
years, and which begins immediately after the expiration of a prior franchise
involving the same marketing premises which was not renewed, based upon a lawful
determination by the franchisor to withdraw from marketing activities in the
geographic area in which the franchisee operates.
An interim franchise must be in writing and must make certain disclosures,
including that it is an interim franchise and that the franchisor has the right
not to renew the franchise at the end of the term based upon a lawful
determination to withdraw from marketing activities in the geographic area in
which the franchisee operates.
FEDERAL REGISTER, VOL. 43, NO. 169 - WEDNESDAY, AUGUST 30, 1978
ii
In exercising his right not to renew a franchise relationship under an
interim franchise at the end of its term, your supplier must comply with the
notice requirements described above under the heading "Notice requirements for
Termination or Non-renewal."
V. YOUR LEGAL RIGHTS
Under the enforcement provisions of the Act, you have the right to xxx your
supplier if he fails to comply with the requirements of the Act. The courts are
authorized to grant whatever equitable relief is necessary to remedy the effects
of your supplier's failure to comply with the requirements of the Act, including
declaratory judgment, mandatory or prohibitive injunctive relief, and interim
equitable relief. Actual damages, exemplary (punitive) damages under certain
circumstances, and reasonable attorney and expert witness fees are also
authorized. For a more detailed description of these legal remedies you should
read the text of the Act.
FURTHER DISCUSSION OF TITLE I - DEFINITIONS AND LEGAL REMEDIES
I. DEFINITIONS
Section 101 of the Petroleum Marketing Practices Act sets forth definitions
of the key terms used throughout the franchise protection provisions of the Act.
The definitions from the Act which are listed below are of those terms which are
most essential for purposes of the foregoing summary statement. (You should
consult section 101 of the Act for additional definitions not included here.)
Franchise. A franchise is any contract between a refiner and a distributor,
between a refiner and a retailer, between a distributor and another distributor,
or between a distributor and a retailer, under which a refiner or distributor
(as the case may be) authorizes or permits a retailer or distributor to use, in
connection with the sale, consignment, or distribution of motor fuel, a
trademark which is owned or controlled by such refiner or by a refiner which
supplies motor fuel to the distributor which authorizes or permits such use.
The term "franchise" includes any contract under which a retailer or
distributor (as the case may be) is authorized or permitted to occupy leased
marketing premises, which premises are to be employed in connection with the
sale, consignment, or distribution of motor fuel under a trademark which is
owned or controlled by such refiner or by a refiner which supplies motor fuel to
the distributor which authorizes or permits such occupancy. The term also
includes any contract pertaining to the ',supply of motor fuel which is to be
sold, consigned or distributed under a trademark owned or controlled by a
refiner, or under a contract which has existed continuously since May 15, 1973,
and pursuant to which, on May 15, 1973, motor fuel was sold consigned or
distributed under a Trademark owned or controlled on such date by a refiner. The
unexpired portion of a transferred franchise is also included in the definition
of the term.
Franchise relationship. The term "franchise relationship" refers to the
respective motor fuel marketing or distribution obligations and responsibilities
of a franchisor and a franchisee which result from the marketing of motor fuel
under a franchise.
Franchisee. A franchisee is a retailer or distributor who is authorized or
permitted, under a franchise, to use a trademark in connection with the sale,
consignment, or distribution of motor fuel.
Franchisor. A franchisor is a refiner or distributor who authorizes or
permits, under a franchise, a retailer or distributor to use a trademark in
connection with the sale, consignment, or distribution of motor fuel.
Marketing premises. Marketing premises are the premises which, under a
franchise, are to be employed by the franchisee in connection with the sale,
consignment, or distribution of motor fuel.
Leased marketing premises. Leased marketing premises are marketing premises
owned, leased, or in any way controlled by a franchisor and which the franchisee
is authorized or permitted, under the franchise, to employ in connection with
the sale, consignment, or distribution of motor fuel.
Fail to renew and non-renewal. The terms "fail to renew" and "non-renewal"
refer to a failure to reinstate, continue, or extend a franchise relationship
(1) at the conclusion of the term, or the expiration date, stated in the
relevant franchise, (2) at any time, in the case of the relevant franchise which
does not state a tern of duration or an expiration date, or (3) following a
termination (on or after June 19, 1978) of the relevant franchise which was
entered into prior to June 19, 1978 and has not been renewed after such date.
II. LEGAL REMEDIES AVAILABLE TO FRANCHISEE
The following is a more detailed description of the remedies available to
the franchisee if a franchise is terminated or not renewed in a way that fails
to comply with the Act.
Franchisee's right to xxx. A franchisee may bring a civil action in United
States District Court against a franchisor who does not comply with the
requirements of the Act. The action must be brought within one year after the
date of termination or non-renewal or the date the franchisor fails to comply
with the requirements of the law, whichever is later.
Equitable relief. Courts are authorized to grant whatever equitable relief
is necessary to remedy the effects of a violation of the law's requirements.
Courts are directed to grant a preliminary injunction if the franchisee shows
that there are sufficiently serious questions, going to the merits of the case,
to make them a fair ground for litigation, and if, on balance, the hardship
which the franchise would suffer if the preliminary injunction is not granted
will be greater than the hardship which the franchisor would suffer if such
relief is granted. Courts are not required to order continuation or renewal of
the franchise relationship if the action was brought after the expiration of the
period during which the franchisee was on notice concerning the franchisor's
intention to terminate or not renew the franchise agreement.
Burden of proof. In an action under the Act, the franchisee has the burden
of proving that the franchise was terminated or not renewed. The franchisor has
the burden of proving, as an affirmative defense, that the termination or
nonrenewal was permitted under the Act, and, if applicable, that the franchisor
complied with certain other requirements relating to terminations and
nonrenewals based on condemnation or destruction of the marketing premises.
Damages. A franchisee who prevails in an action under the Act is entitled
to actual damages and reasonable attorney and expert witness fees. If the action
was based upon conduct of the franchisor which was in willful disregard of the
law's requirements or the franchisee's rights under the law, exemplary
(punitive) damages may be awarded where appropriate. The court, and not the
jury, will decide whether to award exemplary damages and, if so, in what amount.
On the other hand if the court fords that the franchisee's action is
frivolous, it may order the franchisee to pay reasonable attorney and expert
witness fees.
Franchisor's defense to permanent injunctive relief. Courts may not order a
continuation or renewal of franchise relationship if the franchisor shows that
the basis of the non-renewal of the franchise relationship was a determination
made in good faith and in the normal course of business:
(1) To convert the leased marketing premises to a use other than the sale
or distribution of motor fuel;
(2) To materially alter, add to, or replace such premises;
(3) To sell such premises,
(4) To withdraw from marketing activities in the geographic area in which
such premises are located; or
(5) That renewal of the franchise relationship is likely to be
uneconomical to the franchisor despite any reasonable changes or
additions to the franchise provisions which may be acceptable to the
franchisee.
In making this defense, the franchisor also must show that he has complied
with the notice requirements of the Act.
This defense to permanent injunctive relief, however, does not affect the
franchisee's right to recover actual damages and reasonable attorney and expert
witness fees if the non-renewal is otherwise prohibited under the Act.
Issued in Washington, D.C. on August 23, 1978.
XXXX X. X'XXXXX,
Deputy Secretary.
FR Doc. 78-24419 Filed 8028078. 9:15 am]
FEDERAL REGISTER, VOL. 43, NO. 169 - WEDNESDAY, AUGUST 30, 1978
iii
SCHEDULE "A"
------------
THE PANTRY, INC
Customer #30201131 Tank #3278
Debrand Date 07/01/2000
Location Program Category Commit. Exp. Reimb. Amt.
33278001 PROJECT LIGHT 200102 $ *
33278001 IAP BNFNB 200009 $ *
33278001 Total $ *
33278002 IAP ARREB 200102 $ *
33278002 IAP EFCB 200102 $ *
33278002 PROJECT LIGHT 200112 $ *
33278002 PROJECT CRIND 200107 $ *
33278002 Total $ *
33278003 IAP ARREB 200102 $ *
33278003 Total $ *
33278004 IAP ARREB 200102 $ *
33278004 PROJECT LIGHT 200111 $ *
33278004 Total $ *
33278005 PROJECT LIGHT 200112 $ *
33278005 PROJECT CRIND 200106 $ *
33278005 IAP ARREB 200102 $ *
33278005 Total $ *
33278006 IAP ARREB 200102 $ *
33278006 PROJECT LIGHT 200112 $ *
33278006 Total $ *
33278007 PROJECT LIGHT 200111 $ *
33278007 PROJECT CRIND 200106 $ *
33278007 IAP ARREB 200102 $ *
33278007 Total $ *
33278008 IAP ARREB 200102 $ *
33278008 PROJECT LIGHT 200112 $ *
33278008 Total $ *
33278009 PROJECT LIGHT 200212 $ *
33278009 IAP ARREB 200102 $ *
33278009 Total $ *
33278010 PROJECT LIGHT 200203 $ *
33278010 PROJECT CRIND 200202 $ *
33278010 IAP ARREB 200102 $ *
33278010 Total $ *
33278011 IAP ARREB 200102 $ *
33278011 PROJECT LIGHT 200112 $ *
33278011 Total $ *
33278012 PROJECT CRIND 200008 $ *
33278012 BRANDCOSTS ENHAN 200309 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
1
33278012 IAP EFCB 200409 $ *
33278012 IAP KCOFF 200502 $ *
33278012 IAP KCOFF 200609 $ *
33278012 IAP EFCB 200302 $ *
33278012 Total $ *
33278013 IAP FCOFF 200305 $ *
33278013 IAP ARRNB 200010 $ *
33278013 PROJECT LIGHT 200101 $ *
33278013 BRANDCOSTS ENHAN 200210 $ *
33278013 BRANDCOSTS ENHAN 200210 $ *
33278013 BRANDCOSTS ENHAN 200311 $ *
33278013 BRANDCOSTS ENHAN 200404 $ *
33278013 BRANDCOSTS ENHAN 200406 $ *
33278013 Total $ *
33278018 PROJECT CRIND 200105 $ *
33278018 Total $ *
33278020 PROJECT HRISE 200405 $ *
33278020 IAP AGUNB 200009 $ *
33278020 IAP ANFNB 200009 $ *
33278020 Total $ *
33278021 IAP FFCB 200012 $ *
33278021 Total $ *
Grand Total $ *
LIL' CHAMP FOOD STORES
Customer #29980885 Tank #0595
Debrand Date 07/01/2000
Location Program Category Commit. Exp. Reimb. Amt.
30595003 PROJECT CRIND 200201 $ *
3059003 Total $ *
30595005 IAP IINCI 200307 $ *
30595005 Total $ *
30595006 IAP PAP 200405 $ *
30595006 IAP IRIC 200405 $ *
30595006 BRANDCOSTS REBRD 200309 $ *
30595006 BRANDCOSTS REBRD 200208 $ *
30595006 Total $ *
30595009 IAP PAP 200210 $ *
30595009 IAP EFCB 200210 $ *
30595009 IAP NCGU2 200410 $ *
30595009 Total $ *
30595014 IAP FFCB 200211 $ *
30595014 IAP NCGU2 200411 $ *
30595014 IAP PAP 200211 $ *
30595014 Total $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
2
30595033 IAP EFCB 200301 $ *
30595033 Total $ *
30595046 IAP PAP 200307 $ *
30595046 IAP BNFNB 200203 $ *
30595046 Total $ *
30595049 PROJECT CRIND 200202 $ *
30595049 Total $ *
30595050 PROJECT CRIND 200202 $ *
30595050 Total $ *
30595051 PROJECT CRIND 200109 $ *
30595051 Total $ *
30595072 PROJECT CRIND 200105 $ *
30595072 IAP CRREB 200107 $ *
30595072 IAP EFCB 200107 $ *
30595072 Total $ *
30595074 PROJECT CRIND 200203 $ *
30595074 Total $ *
30595102 PROJECT CRIND 200102 $ *
30595102 IAP EFCB 200107 $ *
30595102 IAP QGUNB 200107 $ *
30595102 Total $ *
30595103 IAP INF 200301 $ *
30595103 PROJECT CRIND 200111 $ *
30595103 Total $ *
30595104 IAP NCGU 200307 $ *
30595104 IAP EFCB 200107 $ *
30595104 PROJECT LIGHT 200112 $ *
30595104 PROJECT CRIND 200102 $ *
30595104 Total $ *
30595105 PROJECT CRIND 200109 $ *
30595105 IAP EFCB 200203 $ *
30595105 IAP NCGU 200403 $ *
30595105 Total $ *
30595106 IAP FFCB 200201 $ *
30595106 IAP NCGU 200401 $ *
30595106 PROJECT CRIND 200112 $ *
30595106 Total $ *
30595108 IAP PAP 200210 $ *
30595108 IAP FFCB 200210 $ *
30595108 IAP NCGU2 200410 $ *
30595108 Total $ *
30595109 PROJECT CRIND 200202 $ *
30595109 Total $ *
30595110 BRANDCOSTS RAMP 200310 $ *
30595110 IAP ANFN2 200410 $ *
30595110 IAP FFCB 200210 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
3
30595110 IAP NCGU2 200410 $ *
30595110 IAP PAP 200210 $ *
30595110 Total $ *
30595111 IAP IINF 200301 $ *
30595111 PROJECT CRIND 200203 $ *
30595111 Total $ *
30595112 PROJECT CRIND 200107 $ *
30595112 IAP HPCC 200401 $ *
30595112 Total $ *
30595115 IAP NCGU2 200508 $ *
30595115 IAP PAP 200308 $ *
30595115 IAP FFCB 200308 $ *
30595115 BRANDCOSTS NEW 200309 $ *
30595115 Total $ *
30595116 BRANDCOSTS NEW 200306 $ *
30595116 IAP ANFN4 20505 $ *
30595116 IAP PAP 200305 $ *
30595116 IAP FFCB 200305 $ *
30595116 IAP NCGU2 200505 $ *
30595116 Total $ *
30595117 IAP PAP 200307 $ *
30595117 IAP FFCB 200307 $ *
30595117 IAP NCGU2 200507 $ *
30595117 BRANDCOSTS ENHAN 200306 $ *
30595117 BRANDCOSTS ENHAN 200305 $ *
30595117 BRANDCOSTS NEW 200308 $ *
30595117 Total $ *
30595118 BRANDCOSTS NEW 200403 $ *
30595118 IAP NCGU2 200510 $ *
30595118 IAP PAP 200310 $ *
30595118 IAP FFCB 200310 $ *
30595118 Total $ *
30595119 PROJECT CRIND 200203 $ *
30595119 IAP EFCB 200205 $ *
IAP HPCC3 200405 $ *
30595119 Total $ *
30595120 BRANDCOSTS NEW 200401 $ *
30595120 IAP FFCB 200310 $ *
30595120 IAP NCGU2 200510 $ *
30595120 IAP PAP 200310 $ *
30595120 Total $ *
30595122 BRANDCOSTS NEW 5 $ *
30595122 Total $ *
30595123 BRANDCOSTS NEW 200309 $ *
30595123 IAP NCGU2 200509 $ *
30595123 IAP PAP 200309 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
4
30595123 IAP FFCB 200309 $ *
30595123 Total $ *
30595125 IAP PAP 200405 $ *
30595125 IAP FFCB 200405 $ *
30595125 IAP ANFN4 200605 $ *
30595125 IAP NCGU2 200605 $ *
30595125 BRANDCOSTS RAMP 200310 $ *
30595125 BRANDCOSTS NEW 200404 $ *
30595125 Total $ *
60595183 PROJECT CRIND 200201 $ *
30595183 Total $ *
30595210 PROJECT CRIND 200106 $ *
30595210 Total $ *
30595234 IAP PAP 200207 $ *
30595234 IAP NCRR2 200407 $ *
30595234 Total $ *
30595235 IAP PAP 200207 $ *
30595235 IAP NCRR2 200407 $ *
30595235 BRANDCOSTS ENHAN 200308 $ *
30595235 BRANDCOSTS ENHAN 200307 $ *
30595235 Total $ *
30595236 PROJECT CRIND 5 $ *
30595236 Total $ *
30595258 PROJECT CRIND 200201 $ *
30595258 Total $ *
30595271 PROJECT CRIND 200103 $ *
30595271 Total $ *
30595272 BRANDCOSTS ENHAN 200208 $ *
30595272 Total $ *
30595290 PROJECT CRIND 200111 $ *
30595290 Total $ *
30595291 PROJECT CRIND 200203 $ *
30595291 Total $ *
30595292 PROJECT CRIND 200110 $ *
30595292 Total $ *
30595322 PROJECT CRIND 200108 $ *
30595322 BRANDCOSTS ENHAN 5 $ *
30595322 BRANDCOSTS REBRD 200310 $ *
30595322 Total $ *
30595326 PROJECT CRIND 200108 $ *
30595326 Total $ *
30595330 IAP EFCB 200107 $ *
30595330 IAP CRREB 200107 $ *
30595330 Total $ *
30595333 PROJECT CRIND 200110 $ *
30595333 Total $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
5
30595334 PROJECT CRIND 200201 $ *
30595334 Total $ *
30595356 IAP PAP 200309 $ *
30595356 IAP IRIC 200309 $ *
30595356 BRANDCOSTS REBRD 200307 $ *
30595356 Total $ *
30595403 PROJECT CRIND 200201 $ *
30595403 Total $ *
30595404 PROJECT CRIND 200201 $ *
30595404 Total $ *
30595406 PROJECT CRIND 200202 $ *
30595406 Total $ *
30595407 PROJECT CRIND 200201 $ *
30595407 Total $ *
30595408 PROJECT CRIND 200202 $ *
30595408 Total $ *
30595416 PROJECT CRIND 200107 $ *
30595416 Total $ *
30595427 IAP PAP 200309 $ *
30595427 IAP INGU 200309 $ *
30595427 BRANDCOSTS REBRD 200307 $ *
30595427 Total $ *
30595429 IAP EFCB 200204 $ *
30595429 IAP IINCI 200204 $ *
30595429 Total $ *
30595432 IAP PAP 200207 $ *
30595432 IAP NCRR2 200407 $ *
30595432 Total $ *
30595483 PROJECT CRIND 200201 $ *
30595483 Total $ *
30595485 PROJECT CRIND 200201 $ *
30595485 Total $ *
30595502 PROJECT CRIND 200201 $ *
30595502 IAP HPCC2 200405 $ *
30595502 IAP EFCB 200205 $ *
30595502 Total $ *
30595503 IAP NCGU 200401 $ *
30595503 IAP EFCB 200201 $ *
30595503 PROJECT CRIND 200111 $ *
30595503 Total $ *
30595504 PROJECT CRIND 200009 $ *
30595504 IAP QGUND 200101 $ *
30595504 IAP FFCB 200301 $ *
30595504 BRANDCOSTS REBRD 200209 $ *
30595504 Total $ *
30595505 IAP HPCC3 200406 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
6
30595505 IAP EFCB 200206 $ *
30595505 IAP ANFNB 200206 $ *
30595505 PROJECT CRIND 200204 $ *
30595505 Total $ *
30595510 PROJECT CRIND 200204 $ *
30595510 IAP FFCB 200205 $ *
30595510 IAP NCGU 200405 $ *
30595510 Total $ *
30595525 IAP EFCB 200010 $ *
30595525 IAP CRREB 200010 $ *
30595525 PROJECT CRIND 200203 $ *
30595525 Total $ *
30595527 PROJECT CRIND 200103 $ *
30595527 Total $ *
30595571 IAP IINCI 200307 $ *
30595571 Total $ *
30595575 PROJECT CRIND 200110 $ *
30595575 Total $ *
30595576 PROJECT CRIND 200203 $ *
30595576 Total $ *
30595612 PROJECT CRIND 200202 $ *
30595612 Total $ *
30595643 PROJECT CRIND 200203 $ *
30595643 Total $ *
30595655 PROJECT CRIND 200201 $ *
30595655 Total $ *
30595759 PROJECT CRIND 200106 $ *
30595759 Total $ *
30595777 PROJECT CRIND 200203 $ *
30595777 Total $ *
30595798 IAP PAP 200210 $ *
30595798 IAP NCR2 200410 $ *
30595798 Total $ *
30595799 PROJECT CRIND 200201 $ *
30595799 Total $ *
30595800 PROJECT CRIND 5 $ *
30595800 Total $ *
30595804 BRANDCOSTS ENHAN 200501 $ *
30595804 BRANDCOSTS IMAGE 200310 $ *
30595804 BRANDCOSTS ENHAN 200208 $ *
30595804 PROJECT CRIND 200108 $ *
30595804 Total $ *
30595805 PROJECT CRIND 200201 $ *
30595805 Total $ *
30595806 PROJECT CRIND 200202 $ *
30595806 Total $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
7
30595846 BRANDCOSTS ENHAN 200310 $ *
30595846 BRANDCOSTS REBRD 200307 $ *
30595846 IAP PAP 200308 $ *
30595846 IAP IRIC 200308 $ *
30595846 Total $ *
30595901 PROJECT CRIND 200108 $ *
30595901 Total $ *
30595902 PROJECT CRIND 200107 $ *
30595902 Total $ *
30595903 PROJECT CRIND 200110 $ *
30595903 Total $ *
30595904 BRANDCOSTS ENHAN 200501 $ *
30595904 BRANDCOSTS ENHAN 200402 $ *
30595904 IAP PAP 200207 $ *
30595904 IAP NCRR2 200407 $ *
30595904 Total $ *
30595907 PROJECT CRIND 200108 $ *
30595907 Total $ *
30595908 PROJECT CRIND 200110 $ *
30595908 IAP EFCB 200201 $ *
30595908 IAP NCGU 200401 $ *
30595908 Total $ *
30595910 PROJECT CRIND 200202 $ *
30595910 Total $ *
Grand Total $ *
THE PANTRY, INC.
Customer #30202972 Tank #3346
Debrand Date 07/01/2000
Location Program Category Commit. Exp. Reimb. Amt.
33346001 PROJECT LIGHT 200009 $ *
33346001 PROJECT CRIND 200012 $ *
33346001 IAP HPCC4 200404 $ *
33346001 Total $ *
33346002 IAP HPCC4 200404 $ *
33346002 PROJECT LIGHT 200009 $ *
33346002 PROJECT CRIND 20209 $ *
33346002 BRANDCOSTS ENHAN 200402 $ *
33346002 BRANDCOSTS ENHAN 200402 $ *
33346002 BRANDCOSTS IMAGE 200404 $ *
33346002 IAP ANFN2 200404 $ *
33346002 Total $ *
33346003 IAP NCGU3 200601 $ *
33346003 IAP CARWA 200401 $ *
33346003 IAP PAP 200401 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
8
33346003 IAP LTG 200405 $ *
33346003 BRANDCOSTS NEW 200312 $ *
33346003 Total $ *
33346004 PROJECT LIGHT 200009 $ *
33346004 BRANDCOSTS ENHAN 200304 $ *
33346004 BRANDCOSTS ENHAN 200311 $ *
33346004 BRANDCOSTS ENHAN 200402 $ *
33346004 BRANDCOSTS ENHAN 200402 $ *
33346004 IAP HPCC4 200404 $ *
33346004 Total $ *
33346005 IAP HPCC4 200404 $ *
33346005 PROJECT CRIND 200108 $ *
33346005 BRANDCOSTS ENHAN 200402 $ *
33346005 BRANDCOSTS ENHAN 200402 $ *
33346005 Total $ *
33346006 BRANDCOSTS RAMP 200208 $ *
33346006 BRANDCOSTS REBRD 200301 $ *
33346006 BRANDCOSTS REBRD 200304 $ *
33346006 IAP HPCC3 200404 $ *
33346006 IAP ANFNB 200204 $ *
33346006 IAP LTG 200204 $ *
33346006 Total $ *
33346007 IAP HPCC4 200404 $ *
33346007 PROJECT LIGHT 200203 $ *
33346007 IAP AGUNB 200011 $ *
33346007 Total $ *
33346008 PROJECT CRIND 200112 $ *
33346008 PROJECT LIGHT 200009 $ *
33346008 BRANDCOSTS IMAGE 200404 $ *
33346008 IAP HPCC4 200404 $ *
33346008 Total $ *
33346009 IAP HPCC4 200404 $ *
33346009 PROJECT CRIND 200011 $ *
33346009 PROJECT LIGHT 200101 $ *
33346009 BRANDCOSTS ENHAN 200309 $ *
33346009 BRANDCOSTS RAMP 200310 $ *
33346009 BRANDCOSTS ENHAN 200402 $ *
33346009 IAP QGUNB 200101 $ *
33346009 Total $ *
33346010 PROJECT CRIND 200403 $ *
33346010 IAP HPCC 200404 $ *
33346010 IAP LTG 200204 $ *
33346010 IAP HPCC4 200404 $ *
33346010 Total $ *
33346011 IAP LTG 200204 $ *
33346011 IAP HPCC4 200204 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
9
33346011 PROJECT CRIND 200403 $ *
33346011 BRANDCOSTS REBRD 200301 $ *
33346011 BRANDCOSTS ENHAN 200402 $ *
33346011 Total $ *
33346012 PROJECT CRIND 200209 $ *
33346012 IAP HPCC 200404 $ *
33346012 IAP LTG 200204 $ *
33346012 IAP HPCC4 200404 $ *
33346012 Total $ *
33346013 IAP XXXXX 200404 $ *
33346013 PROJECT LIGHT 200205 $ *
33346013 PROJECT CRIND 200205 $ *
33346013 Total $ *
33346014 PROJECT LIGHT 200203 $ *
33346014 IAP HPCC4 200404 $ *
33346014 Total $ *
33346015 IAP LTG 200204 $ *
33346015 IAP HPCC4 200404 $ *
33346015 IAP ANFN2 200204 $ *
33346015 PROJECT CRIND 200212 $ *
33346015 BRANDCOSTS RAMP 200212 $ *
33346015 IAP AGUNB 200011 $ *
33346015 Total $ *
33346016 PROJECT LIGHT 200203 $ *
33346016 BRANDCOSTS ENHAN 200207 $ *
33346016 BRANDCOSTS ENHAN 200304 $ *
33346016 IAP HPCC4 200404 $ *
33346016 IAP PAP 200401 $ *
33346016 Total $ *
33346017 IAP LTG 200204 $ *
33346017 IAP HPCC4 200404 $ *
33346017 IAP PAP 200401 $ *
33346017 IAP ANFNB 200204 $ *
33346017 Total $ *
33346018 BRANDCOSTS NEW 200308 $ *
33346018 BRANDCOSTS RAMP 200304 $ *
33346018 IAP HPCC3 200508 $ *
33346018 IAP CARWA 200308 $ *
33346018 Total $ *
33346019 IAP HPCC4 200404 $ *
33346019 PROJECT LIGHT 200210 $ *
33346019 PROJECT CRIND 200207 $ *
33346019 BRANDCOSTS RAMP 200312 $ *
33346019 Total $ *
33346021 BRANDCOSTS NEW 200407 $ *
33346021 IAP NCGU2 200607 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
10
33346021 IAP FFCB 200407 $ *
33346021 IAP LTG 200407 $ *
33346021 Total $ *
33346022 IAP HPCC4 200404 $ *
33346022 PROJECT CRIND 200105 $ *
33346022 PROJECT LIGHT 200207 $ *
33346022 Total $ *
33346023 PROJECT LIGHT 200207 $ *
33346023 PROJECT LIGHT 5 $ *
33346023 BRANDCOSTS ENHAN 200207 $ *
33346023 BRANDCOSTS ENHAN 200304 $ *
33346023 BRANDCOSTS ENHAN 200309 $ *
33346023 BRANDCOSTS ENHAN 200402 $ *
33346023 IAP HPCC4 200404 $ *
33346023 IAP PAP 200209 $ *
33346023 Total $ *
33346024 IAP HPCC4 200404 $ *
33346024 IAP PAP 200311 $ *
33346024 PROJECT LIGHT 200209 $ *
33346024 BRANDCOSTS REBRD 200208 $ *
33346024 BRANDCOSTS ENHAN 200309 $ *
33346024 BRANDCOSTS ENHAN 200402 $ *
33346024 Total $ *
33346027 PROJECT LIGHT 200009 $ *
33346027 PROJECT CRIND 200210 $ *
33346027 BRANDCOSTS ENHAN 200309 $ *
33346027 BRANDCOSTS ENHAN 200402 $ *
33346027 IAP HPCC4 200404 $ *
33346027 Total $ *
33346028 IAP HPCC4 200404 $ *
33346028 PROJECT LIGHT 200009 $ *
33346028 PROJECT CRIND 200209 $ *
33346028 BRANDCOSTS ENHAN 200304 $ *
33346028 Total $ *
33346029 BRANDCOSTS NEW 200212 $ *
33346029 BRANDCOSTS ENHAN 200301 $ *
33346029 BRANDCOSTS ENHAN 200402 $ *
33346029 BRANDCOSTS ENHAN 200402 $ *
33346029 IAP HPCC3 200404 $ *
33346029 IAP PAP 200303 $ *
33346029 Total $ *
33346030 BRANDCOSTS TSTOP 200207 $ *
33346030 BRANDCOSTS ENHAN 200402 $ *
33346030 BRANDCOSTS ENHAN 200402 $ *
33346030 BRANDCOSTS ENHAN 200407 $ *
33346030 IAP ANFNB 200204 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
11
33346030 IAP HPCC4 200404 $ *
33346030 IAP PAP 200312 $ *
33346030 Total $ *
33346031 IAP HPCC4 200404 $ *
33346031 IAP LTG 200204 $ *
33346031 PROJECT CRIND 200403 $ *
33346031 BRANDCOSTS ENHAN 200311 $ *
33346031 Total $ *
33346032 PROJECT CRIND 200201 $ *
33346032 IAP HPCC4 200404 $ *
33346032 Total $ *
33346033 IAP HPCC4 200404 $ *
33346033 PROJECT LIGHT 200009 $ *
33346033 PROJECT CRIND 200209 $ *
33346033 Total $ *
33346034 BRANDCOSTS ENHAN 200312 $ *
33346034 BRANDCOSTS ENHAN 200402 $ *
33346034 IAP HPCC4 200404 $ *
33346034 Total $ *
33346035 IAP HPCC4 200404 $ *
33346035 IAP PAP 200406 $ *
33346035 IAP NCRR2 200606 $ *
33346035 BRANDCOSTS IMAGE 200402 $ *
33346035 Total $ *
33346036 PROJECT CRIND 200210 $ *
33346036 BRANDCOSTS ENHAN 200301 $ *
33346036 BRANDCOSTS RAMP 200402 $ *
33346036 IAP HPCC4 200404 $ *
33346036 Total $ *
33346037 IAP HPCC4 200404 $ *
33346037 IAP PAP 200401 $ *
33346037 PROJECT LIGHT 200009 $ *
33346037 BRANDCOSTS IMAGE 200311 $ *
33346037 BRANDCOSTS ENHAN 200402 $ *
33346037 BRANDCOSTS ENHAN 200402 $ *
33346 037 Total $ *
33346038 PROJECT LIGHT 200009 $ *
33346038 BRANDCOSTS ENHAN 200301 $ *
33346038 IAP HPCC4 200404 $ *
33346038 Total $ *
33346039 IAP HPCC4 200404 $ *
33346039 PROJECT CRIND 200201 $ *
33346039 BRANDCOSTS ENHAN 200207 $ *
33346039 BRANDCOSTS ENHAN 200304 $ *
33346039 BRANDCOSTS ENHAN 200309 $ *
33346039 BRANDCOSTS ENHAN 200403 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
12
33345039 Total $ *
33346040 PROJECT LIGHT 200009 $ *
33346040 BRANDCOSTS ENHAN 200208 $ *
33346040 BRANDCOSTS ENHAN 200311 $ *
33346040 BRANDCOSTS IMAGE 200404 $ *
33346040 IAP HPCC4 200404 $ *
33346040 IAP CARWA 200105 $ *
33346040 IAP CARW3 200204 $ *
33346040 Total $ *
33346041 IAP LTG 200204 $ *
33346041 IAP HPCC4 200404 $ *
33346041 PROJECT CRIND 200209 $ *
33346041 BRANDCOSTS RAMP 200310 $ *
33346041 Total $ *
33346042 BRANDCOSTS NEW 200310 $ *
33346042 BRANDCOSTS ENHAN 200402 $ *
33346042 IAP NCGU2 200511 $ *
33346042 IAP PAP 200311 $ *
33346042 IAP LTG 200311 $ *
33346042 Total $ *
33346043 IAP XXXXX 200404 $ *
33346043 PROJECT CRIND 200204 $ *
33346043 PROJECT LIGHT 200205 $ *
33346043 BRANDCOSTS TSTOP 200207 $ *
33346043 PROJECT HRISE 200212 $ *
33346043 BRANDCOSTS ENHAN 200402 $ *
33346043 BRANDCOSTS ENHAN 200402 $ *
33346043 BRANDCOSTS ENHAN 200403 $ *
33346043 BRANDCOSTS ENHAN 200404 $ *
33346043 BRANDCOSTS ENHAN 200406 $ *
33346043 BRANDCOSTS ENHAN 200407 $ *
33346043 IAP ANFNB 200204 $ *
33346043 Total $ *
33346044 IAP NCGU 200404 $ *
33346044 PROJECT LIGHT 200205 $ *
33346044 PROJECT CRIND 200205 $ *
33346044 BRANDCOSTS ENHAN 200402 $ *
33346044 BRANDCOSTS ENHAN 200402 $ *
33346044 IAP XXXXX 200404 $ *
33346044 Total $ *
33346045 IAP NCGU3 200504 $ *
33346045 IAP PAP 200304 $ *
33346045 IAP LTG 200304 $ *
33346045 IAP FFCB 200304 $ *
33346045 BRANDCOSTS NEW 200306 $ *
33346045 BRANDCOSTS TSTOP 200306 $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
13
33346045 BRANDCOSTS ENHAN 200309 $ *
33346045 BRANDCOSTS ENHAN 200310 $ *
33346045 BRANDCOSTS ENHAN 200311 $ *
33346045 BRANDCOSTS ENHAN 200312 $ *
33346045 BRANDCOSTS ENHAN 200401 $ *
33346045 Total $ *
33346046 PROJECT LIGHT 200009 $ *
33346046 IAP HPCC4 200404 $ *
33346046 Total $ *
Grand Total $ *
THE PANTRY, INC.
Customer 330204135 Tank #3495
Debrand Date 07/01/2000
Location Program Category Commit. Exp. Reimb. Amt.
13495403 PROJECT CRIND 200203 $ *
13495403 IAP IREIC 200207 $ *
13495403 Total $ *
13495407 PROJECT CRIND 200009 $ *
13495407 Total $ *
13495408 PROJECT CRIND 200009 $ *
13495408 Total $ *
13495409 PROJECT CRIND 200205 $ *
13495409 Total $ *
13495411 PROJECT CRIND 200011 $ *
13495411 Total $ *
13495412 PROJECT LIGHT 200008 $ *
13495412 PROJECT CRIND 200102 $ *
13495412 Total $ *
13495413 PROJECT CRIND 200105 $ *
13495413 Total $ *
13495415 PROJECT LIGHT 200211 $ *
13495415 PROJECT CRIND 200105 $ *
13495415 BRANDCOSTS ENHAN 200302 $ *
13495415 BRANDCOSTS ENHAN 200403 $ *
13495415 IAP QGUNB 200107 $ *
13495415 IAP ANFNB 200107 $ *
13495415 IAP CARWA 200310 $ *
13495415 Total $ *
Grand Total $ *
Total All Cust #'s $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
14
LOAN MAINTENANCE
----------------
Loan
Outlet Customer #/ Loan # Outlet Name Total Adv Balance
---------- ------------------ ------------------- ---------- ----------
33346000 30202972/33460004 The Pantry Inc
d/b/a Kang $ * $ *
33346001 """""""""""""""" Kangaroo 3304 * *
33346002 """""""""""""""" Kangaroo 3305 * *
33346003 """""""""""""""" Kangaroo 3347 * *
33346004 """""""""""""""" Kangaroo 3306 * *
33346005 """""""""""""""" Kangaroo 3307 * *
33346006 """""""""""""""" Kangaroo 3308 * *
33346007 """""""""""""""" Kangaroo 3336 * *
33346008 """""""""""""""" Kangaroo 3337 * *
33346009 """""""""""""""" Kangaroo 3338 * *
33346010 """""""""""""""" Kangaroo 3339 * *
33346011 """""""""""""""" Kangaroo 3341 * *
33346012 """""""""""""""" Kangaroo 3342 * *
33346013 """""""""""""""" Kangaroo 3343 * *
33346014 """""""""""""""" Kangaroo 3327 * *
33346015 """""""""""""""" Kangaroo 3328 * *
33346016 """""""""""""""" Kangaroo 3331 * *
33346017 """""""""""""""" Kangaroo 3334 * *
33346018 """""""""""""""" Kangaroo 3309 * *
33346019 """""""""""""""" Kangaroo 3335 * *
33346021 """""""""""""""" Kangaroo 3350 * *
33346022 """""""""""""""" Kangaroo 3326 * *
33346023 """""""""""""""" Kangaroo 3324 * *
33346024 """""""""""""""" Kangaroo 3325 * *
33346025 """""""""""""""" Kangaroo 3348 * *
33346026 """""""""""""""" Kangaroo 3351 * *
33346027 """""""""""""""" Kangaroo 3319 * *
33346028 """""""""""""""" Kangaroo 3320 * *
33346029 """""""""""""""" Kangaroo 3321 * *
33346030 """""""""""""""" Kangaroo 3322 * *
33346031 """""""""""""""" Kangaroo 3323 * *
33346032 """""""""""""""" Kangaroo 3315 * *
33346033 """""""""""""""" Kangaroo 3316 * *
33346034 """""""""""""""" Kangaroo 3317 * *
33346035 """""""""""""""" Kangaroo 3318 * *
33346036 """""""""""""""" Kangaroo 3310 * *
33346037 """""""""""""""" Kangaroo 3311 * *
33346038 """""""""""""""" Kangaroo 3312 * *
33346039 """""""""""""""" Kangaroo 3313 * *
33346040 """""""""""""""" Kangaroo 3314 * *
33346041 """""""""""""""" Kangaroo 3344 * *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
15
Loan
Outlet Customer #/ Loan # Outlet Name Total Adv Balance
---------- ------------------ ------------------- ---------- ----------
33346042 30202972/33460004 Kangaroo 3349 * *
33346043 """""""""""""""" Kangaroo 3333 * *
33346044 """""""""""""""" Kangaroo 3345 * *
33346045 """""""""""""""" Kangaroo 3346 * *
33346046 """""""""""""""" Kangaroo 4036 * *
TOTAL AMOUNT: $ *
BALANCE: $ *
Loan
Outlet Customer #/ Loan # Outlet Name Total Adv Balance
---------- ------------------ ------------------- ---------- ----------
30595000 29980885/05959704 Xxxxxx Enterprises,
Inc. $ * $ *
30595005 """""""""""""""" Handy Way #2005 * *
30595072 """""""""""""""" Handy Way #2072 * *
30595102 """""""""""""""" Handy Way #2102 * *
30595104 """""""""""""""" Handy Way #2104 * *
30595106 """""""""""""""" Handy Way #2106 * *
30595112 """""""""""""""" Handy Way #2112 * *
30595233 """""""""""""""" Handy Way #2233 * *
30595234 """""""""""""""" Handy Way #2234 * *
30595236 """""""""""""""" Handy Way #2236 * *
30595319 """""""""""""""" Handy Way #2319 * *
30595321 """""""""""""""" Handy Way #2321 * *
30595326 """""""""""""""" Handy Way #2326 * *
30595330 """""""""""""""" Handy Way #2330 * *
30595332 """""""""""""""" Handy Way #2328 * *
30595334 """""""""""""""" Handy Way #2334 * *
30595427 """""""""""""""" Handy Way #2427 * *
30595432 """""""""""""""" Handy Way #2432 * *
30595503 """""""""""""""" Handy Way #2503 * *
30595525 """""""""""""""" Handy Way #2525 * *
30595548 """""""""""""""" Handy Way #2548 * *
30595571 """""""""""""""" Handy Way #2571 * *
30595612 """""""""""""""" Handy Way #2612 * *
30595759 """""""""""""""" Handy Way #2759 * *
30595799 """""""""""""""" Handy Way #2799 * *
30595889 """""""""""""""" Handy Way #2889 * *
30595903 """""""""""""""" Handy Way #2903 * *
30595907 """""""""""""""" Handy Way #2907 * *
30595908 """""""""""""""" Handy Way #2908 * *
TOTAL AMOUNT: $ *
BALANCE: $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
16
Loan
Outlet Customer #/ Loan # Outlet Name Total Adv Balance
---------- ------------------ ------------------- ---------- ----------
3327800 30201131/32780003 The Pantry, Inc. $ * $ *
33278013 """""""""""""""" The Pantry #3299 * *
TOTAL AMOUNT: $ *
BALANCE: $ *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
17
AMENDED AND RESTATED
ADDENDUM TO DISTRIBUTOR FRANCHISE AGREEMENT
This Amended and Restated Addendum to Distributor Franchise Agreement is
entered into on this 11th day of February, 2003, by and between CITGO Petroleum
Corporation ("CITGO") and The Pantry, Inc. (the "Company").
WHEREAS, CITGO and the Company have entered into a Distributor Franchise
Agreement on or about August, 2000 (the "DFA");
WHEREAS, CITGO and the Company agree that this Amended and Restated
Addendum (the "Addendum") will amend and restate in its entirety the Addendum to
the DFA dated August, 2000 and all amendments thereto including the 1st
Amendment to Addendum to DFA dated September, 2000, and the 2nd and 3rd
Amendments to Addendum to DFA both dated January 31, 2002.
WHEREAS, the Company has received offers from other suppliers to purchase
motor fuels; and therefore, has requested that CITGO sell branded and unbranded
gasoline and low sulfur diesel on a similar basis;
WHEREAS, CITGO has agreed to sell to the Company CITGO branded and
unbranded gasoline and low sulfur diesel in accordance with the terms as
provided herein;
WHEREAS, to the extent that the provisions of this Addendum are
inconsistent with the provisions of CITGO's Marketing and Branding Programs
regarding rebates, amortization schedules, length of branding commitment, and
amount of branding expenses, the terms of this Addendum shall control.
NOW THEREFORE in consideration of the premises and covenants contained
herein, it is agreed as follows:
1. EFFECTIVE DATE: The effective date of this Addendum shall be March 1, 2003.
2. CONTRACT TERM: The Company agrees to extend the term of the DFA to February
29, 2008, a period of five (5) years from the effective date of this
Addendum. Thereafter, the DFA shall automatically renew for additional
three year periods unless terminated by written notice given by either
party not less than ninety (90) days prior to the end of the term. This
Addendum will terminate upon termination of the DFA.
3. SCOPE: The * applies to motor fuel that is sold FOB at the following
terminals:
Apex, NC (Raleigh) Doraville, GA N Charleston, SC Savannah, GA
Arcadia, LA Evansville, IN N. Augusta, SC Selma, NC
Athens, GA Greensboro, NC Orlando, FL (Xxxx) Spartanburg, SC
Xxxxxx, SC Greenville, MS Owensboro, KY Tampa, FL (Hooker's Pt.)
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
1
Charlotte, NC Jacksonville, FL (Xxxxxxxx Pt.) Vicksburg, MS
Chesapeake, VA Meridian, MS Pascagoula, MS Wilmington, NC
Xxxxxxx, MS Montvale, VA Richmond, VA
Unless the parties agree otherwise in writing, the *, other than those
listed above, shall be CITGO's *.
4. MARKET RELATED PRICING: The purchase price for the applicable motor fuel
that the Company ratably purchases from CITGO during the term of this
Addendum shall be equal to (i) the * set forth herein, plus (ii) an * plus
applicable taxes, if any.
(i) The * for * the * of the * for the * at the * as of the *.
In determining the *, CITGO * any * which was * or * that has no * at
the * on the *.
For purposes of this Addendum, the * shall mean the *. There are *
on this *.
(ii) The * shall be as follows (in $/gal):
UnBranded
Aggregate Gals. Branded Gasoline Gasoline LSD
(in million gals/ ---------------------------- ---------- ----------
Contract Year) RUL MID PREM all grades all grades
-------------------- ------- ------- -------- ---------- ----------
* $ * $ * $ * $ (*) $ (*)
* $ * $ * $ * $ (*) $ (*)
* $ * $ * $ * $ (*) $ (*)
The difference between * and the * described above is considered the * (the "*).
Specifically for the purpose of calculating this *, "*" shall means its *.
Contract Year shall mean March 1, 2003, through February 29, 2004 and each
subsequent twelve month period thereafter.
5. PAYMENT AND SETTLEMENT TERMS: The Company shall pay *, for the applicable
grade of motor fuel at the applicable Terminal as of the date of lifting,
in accordance with CITGO's payment and credit terms and conditions
established from time to time by CITGO's Credit Department. Initially the
payment terms are *
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
2
E.F.T. *, CITGO shall within fifteen (15) days after the end of each month,
* and then *.
In the event that the Company is delinquent, at anytime during a month, in
its trade accounts payable to CITGO, the Company *.
6. ALLOWABLE MARKETING PROGRAMS: It is acknowledged and agreed that the * and
that *, the Company shall not be entitled to receive any allowances or
benefits of other CITGO marketing programs (including, but not limited to,
IAP rebates on existing and future branded locations and the Brand
Enhancement Fund) other than credit card, and certain branding expenses for
stations that are branded with CITGO during the term of this Addendum.
For stations that are branded after the date of this agreement, CITGO will
* and *, however, CITGO management reserves the right to * .
On existing CITGO branded stations that have not been re-imaged, CITGO will
* and *, however, CITGO management reserves the right to *.
CITGO's branding material and installation expenses shall be amortized over
a five year period, using the straight-line method. Should a station be
debranded within the five year period, the Company shall pay to CITGO the
unamortized portion of the branding material and installation expenses for
the station.
7. PERFORMANCE CRITERIA: The * are based on the Company keeping a minimum of *
branded stations with CITGO, which number may be decreased by station
closings, and purchasing a minimum aggregate volume of * gallons per
Contract Year, to include all grades of gasoline (branded and unbranded)
and diesel (the "Minimum Volume"). The * CITGO branded stations less any of
the * stations that are subsequently closed are hereinafter referred to as
the "Minimum CITGO Branded Stations." If, through no fault of the Company,
the number of CITGO branded stations falls below the Minimum CITGO Branded
Stations or if the Company's purchases of motor fuels from CITGO during a
Contract Year fall below *, then *, and if *.
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
3
For the initial Contract Year, the parties estimate that the Company will
purchase between * and * gallons of aggregate motor fuels, and agree that
the * will be based on using the * for this *. If, however, the aggregate
volume of motor fuel purchased by the Company during the initial or any
subsequent Contract Year is less than * gallons (unless such shortfall is
due to allocation constraints, force majeure or other causes beyond the
Company's control), the Company *, and CITGO *, the * on * upon which the
Company * during the Contract Year. Such * may be * as the *. The * that
are used for each subsequent Contract Year will be based on the volume of
motor fuels purchased by the Company during the immediately preceding
Contract Year. Notwithstanding anything to the contrary, if the actual
volume of motor fuels purchased by the Company, during any Contract Year,
be in a volume range (as described in the schedule in Paragraph 4)
different than the volume range that was used to calculate the *, then the
* for the entire Contract Year shall be recalculated using the appropriate
* based on actual volumes. After such recalculation, a reconciliation
between the recalculated * and the * previously paid shall be made and
CITGO shall debit or credit the Company's account accordingly within (*)
days of the end of the Contract Year.
The $* described above is not intended nor will it prevent * with the terms
of the DFA or this Addendum or * prior to agreed branding commitment
periods. Such additional language may include but are not limited to * and
any *.
The Company agrees to lift the motor fuels on a ratable basis and only
CITGO *. If the Company fails to purchase CITGO motor fuels ratably or if
during any month the Company fails to purchase, other than as a result of
supply disruptions or force majeure, between *% and *% of the volume set
forth in the monthly volume requirements of the DFA, the Company shall not
be entitled to receive the * on *.
Each station branded through the Company shall comply with CITGO's image
standards and specifications.
The Company agrees to use destination codes to show the store destination
of all deliveries of motor fuels that the Company purchases hereunder or
some other procedure, acceptable to CITGO, to show the actual volume sold
at each store.
8. EXISTING MARKETING PROGRAM COMMITMENTS: The Company acknowledges that as of
February 28, 2003 its existing commitments to CITGO
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
4
for unamortized image allowance rebates, image allowance advances, and
branding costs existing on July 1, 2000 total $* (excluding accrued
interest). See the attached Exhibit A for the calculations. The Company
acknowledges that subsequent to July 1, 2000, it assumed, from Eden Oil, an
image allowance advance on 12/1/2000. As of February 28, 2003 the
outstanding principal balance on that advance totals $* (see Exhibit A for
the calculations). Beginning March 1, 2003 the total $* will be amortized
over the following fifty-two (52) months on a straight-line basis; provided
that, the Company maintains the minimum CITGO Branded Stations. .
Therefore, for each month, beginning March 1, 2003, that the Company
maintains the Minimum CITGO Branded Stations, the $* balance will be
reduced by $*. Further, if the Company has not maintained the Minimum CITGO
Branded Stations for 52 consecutive months beginning March 1, 2003, the
Company may extend the term of this Addendum in order to amortize the
entire balance during the period of the extension.
The parties acknowledge that the aggregate accrued interest on the image
allowance advances totals $* as of February 28, 2003. CITGO agrees to
forgive the interest associated with each location if the applicable
location remains branded with CITGO through June 30, 2007.
The Company has not yet confirmed the outstanding balances of loans, the
amount of accrued interest or the IAP amounts that are set forth in the
Addendum. Nothing herein is intended to prevent either party from showing
that the balances set forth in this Addendum are incorrect, and in which
event, the actual or correct balances will be substituted for the balances
set forth in this Addendum.
Upon termination of this Addendum and the DFA by the Company, the Company
shall pay CITGO the then remaining unamortized portion of the $*. Upon
termination of this Addendum by CITGO for any reason, The Company shall pay
to CITGO the remaining unamortized liabilities, if any, with respect to any
debranded stations. Notwithstanding the termination of this Addendum, the
remaining unamortized liabilities with respect to any stations that remain
branded CITGO shall continue to be reduced by one fifty-second each month
while such station remains branded with CITGO after March 1, 2003.
Thereafter, if any station debrands, The Company shall pay to CITGO the
remaining unamortized liabilities with respect to such debranded stations.
The Company acknowledges that in addition to the above $*. in liabilities,
the Company also has certain unamortized branding costs for brandings that
occurred after July 1, 2000. CITGO has agreed that the unamortized amounts
relating branding costs incurred after July 1, 2000 will continue to
amortize, on a station-specific basis, in accordance with the provisions of
the applicable marketing program in which each station was originally
enrolled. Should a location debrand, any remaining unamortized balances
with respect to such location shall be payable by the Company to CITGO.
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
5
In addition, the Company acknowledges that it has received certain advances from
CITGO in conjunction with the provisions of the 2nd Amendment to Addendum to
DFA. As of January 31, 2003, these advances have an outstanding principal
balance of $*. As such, the parties desire that the outstanding balance will be
repaid to CITGO by * the *, that the *, defined in Section * , that the * would
*. Repayments shall continue until the entire $* has been fully repaid.
9. CREDIT CARDS: *.
10. If CITGO sells or assigns the DFA to a third party or undergoes a change of
control (acquisition by an entity or affiliated group of fifty-one percent
[51%] of the voting stock of CITGO or those entities which control CITGO,
directly or indirectly), and such third party or CITGO, either (i) is
unable or unwilling to license the CITGO Trademarks to the Company for the
remaining term of this Addendum, or (ii) terminates this Addendum, then the
Company may, upon thirty (30) days written notice, terminate the DFA and
this Addendum without having to pay the unamortized portion of IAP,
advances and branding costs as described in Section 8 and the unamortized
portion for branding expenses as described in Section 6.
11. It is expressly understood and agreed that this Addendum is entered into in
order for CITGO to meet a competitive offer received by the Company.
IN WITNESS WHEREOF, this Addendum was executed on the date above written.
CITGO PETROLEUM CORPORATION THE PANTRY, INC.
By: /s/ WA XxXxxx By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------- --------------------------------
Senior Vice President Senior Vice President
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
6
EXHIBIT A
------------------------------------------------------------------------------
# of Locations Branded CITGO Amortization
------------------------------------ in accordance
The Pantry The Pantry Balance with 8/2000
--FL Inc. of Unamort. Addendum
Date #222631 #261378 Total* Liabilities (*)
------------------------------------------------------------------------------
** $ *
31-Jul-02 * * * $ * $ *
31-Aug-02 * * * $ * $ *
30-Sep-02 * * * $ * $ *
31-Oct-02 * * * $ * $ *
30-Nov-02 * * * $ * $ *
31-Dec-02 * * * $ * $ *
31-Jan-03 * * * $ * $ *
-------
28-Feb-03 $ * $ *
------------------------------------------------------------------------------
------------------------------------------------------------------------------
*** $ *
31-Jul-02 * * * $ * $ *
31-Aug-02 * * * $ * $ *
30-Sep-02 * * * $ * $ *
31-Oct-02 * * * $ * $ *
30-Nov-02 * * * $ * $ *
31-Dec-02 * * * $ * $ *
31-Jan-03 * * * $ * $ *
-------
28-Feb-03 $ * $ *
------------------------------------------------------------------------------
-----------
****COMBINED UNAMORTIZED LIABILITY as of 2-28-03
(used in Section 8 of the new Addendum
effective 3/1/03): $ *
-----------
------------------------------------------------------------------------------
*- Pantry was required to have at least * stations branded CITGO to
qualify for 1/60th monthly amortization (per 8/2000 Addendum, *)
**- Amount of The Pantry's total IAP O/S loans, unamortized IAP and
unamortized branding expense as of July 1, 2000 (per * of the
Addendum dated 8/2000).
***- Amount of loan that The Pantry assumed from Eden Oil on 12/1/2000
(amortizing in the same fashion as previous loans - 1/60 per month
beginning 7/1/2002)
* Selected portions have been deleted as confidential pursuant to Rule 24b-2.
Complete copies of the entire exhibit have been filed separately with the
Securities and Exchange Commission and marked "CONFIDENTIAL TREATMENT."
7
****- This amount excludes: (i) unamortized branding cost for branding
that occurred after July 1, 2000, (ii) accrued interest on the IAP
loans and (iii) outstanding advances received by The Pantry in
conjunction with the provision of the 2nd Amendment to the 8/2000
Addendum. These items are addressed separately in Section 8 of this
new Addendum effective 3/1/03).
8
