PURCHASE AND SUPPLY AGREEMENT
THIS PURCHASE AND SUPPLY AGREEMENT (this "Agreement") is made this 4th day of
DECEMBER, 2003, by and between ALKHALIFA Petroleum Corp.., whose business
address is 0000 XX 00xx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, with a copy to
Xxxxxxx Xxxxx, 00xx xxxxx, Xx-Xxxxxxx Xxxx, Xxxxxx, Xxxxxxx, X.X Xxx 00000,
Xxxxxx, Xxxxxxx, a Florida for profit corporation ("ALKHALIFA") the ("Supplier")
having a place of business at 0000 XX 00xx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx
00000 and FuelNation Inc. a Florida for profit corporation (the "Seller").
WITNESSETH THAT:
WHEREAS, Supplier and Seller desire to set forth their agreement regarding the
sale and purchase of certain gasolines and diesel fuels (the "Supplies") which
Supplier acquires from time to time pursuant to its agreement with The Oil
Companies.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein,
Supplier and Seller agree as follows:
1. TERM AND PREMISES.
a) The term of this Agreement shall be for a period of TEN (10) year(s)
beginning on December 4, 2003, and ending on December 4, 2013. During
the term hereof, Supplier shall supply and Seller shall purchase all
of the ALKHALIFA Supplies. For purpose of this Agreement, ALKHALIFA
Supplies shall mean those products manufactured or distributed by or
through the ALKHALIFA Petroleum Corp. SELLER agrees to pay, in the
manner hereinafter provided in Paragraph 2(e) below, for all motor
oils, lubricants, fluids, antifreeze, and miscellaneous related items
and tires, batteries and filters, if any ("related products"),
purchased by SELLER pursuant to SUPPLIER's Dealer Price Schedule in
effect on the date of shipment for the particular related product
delivered to the Premises. SUPPLIER reserves the right at any time to
change the price for any product or related product or to substitute a
new pricing system without notice to SELLER. The prices referred to
herein are exclusive of taxes, license fees, and inspection fees.
b) The premises for delivery supply will be designated from time to time
by Seller (the "Premises"). The Supplier acknowledges that Seller
intends to market and deliver fuel to multiple locations operated by
independent dealers, and Seller shall be responsible to furnish any
and all Premises with all equipment necessary for the operation of
petroleum dispensing and or diesel fueling.
c) In addition to the premises above, Supplier acknowledges the need to
supply a continuous supply of gasoline and fuel to the Travel Center
located in Davie, Florida. Site opening is intended to be in 2004.
2. DELIVERIES AND PAYMENT.
(a) SUPPLIER shall not be required or obligated to deliver any products to
the Premises other than during its normal business hours or in any
quantity less than the maximum load permitted by applicable statute,
rule or regulation. Subject to change and at SUPPLIER's option, all
deliveries shall be made to the Premises. The title to and the risk of
loss for the products shall pass from SUPLIER to SELLER when such
products are delivered to SELLER's tanks or otherwise delivered to the
Premises. SELLER shall permit the unloading of SUPPLIER's transport
trucks or common carriers engaged by SUPPLIER to make deliveries at
the Premises without delay.
(b) Any claims for defect or variance in quality or shortage in quantity of
any product delivered to the Premises, shall be made by SELLER within
twenty four (24) hours of delivery and SUPPLIER shall be given the
opportunity to inspect the same. Otherwise, SELLER waives any and all
claims against SUPPLIER for such defects, variances, or shortages, and
SELLER agrees to indemnify, release and hold SUPPLIER harmless pursuant
to Paragraph 20, below.
c) Deliveries shall be made (except at Supplier's option) in full bulk
transport quantities and with reasonable notice at the Premises in
Supplier's customary manner using equipment selected by Supplier.
Transportation costs are determined by published common carrier rates
applicable to Seller's site. Costs are subject to change without
notice.
PRODUCT MINIMUM MAXIMUM
(i) Gasoline 20,000,000 gallons annually 80,000,000 gallons annually
(ii) Diesel Fuels 60,000,000 gallons annually 150,000,000 gallons annually
d) The prices which Seller shall pay to Supplier for the Supplies shall
be:
egular Unleaded "87" octane; .02 cents Per Gallon
lus Unleaded "89 octane; .02 cents Per Gallon
remium Unleaded "93" octane; .02 cents Per Gallon
iesel Fuel; .02 cents Per Gallon
(rounded to the highest whole number) over the posted ALKHALIFA Jobber
Rack Price for the particular item of Supplies. The terms of payment
shall be as set forth on each invoice for the Supplies from Supplier
to Seller, provided however that said invoices shall provide, among
other things, that payment is due as follows:
(i) Seller has agreed to place with Supplier upon the execution of
this Agreement, the sum of $8,000,000 in cash and/or irrevocable
documentary letter of credit as security deposit on all future
supply deliveries. Supplier, in its sole discretion, may have the
option to apply said deposit to any and all outstanding balances
due from Seller. Seller shall not be entitled to receive the
interest, if any, accrued on the security deposit. Supplier upon
the execution of this Agreement, hereby subscribes for and agrees
to purchase 8,000 (eight thousand) Shares of Series A Convertible
Preferred Stock (the "Shares") as defined in the Summary of Terms
("Term Sheet") of FUELNATION INC., a Florida corporation (the
"Corporation"), in the amount of $1,000.00 per Share on the terms
and conditions described therein relating to the offering.
DISCLOSURE. Because this Series A Convertible Preferred Stock
offering is limited to accredited investors in reliance upon
exemptions contained in the Securities Act of 1933 ("Securities
Act") and Rule 506 promulgated there under and applicable state
securities laws, the Shares are being sold without registration
under the Securities Act. Accordingly, the Corporation is
offering the Shares utilizing the Term Sheet and the Subscription
Agreement. Supplier acknowledges receipt of the Term Sheet and
Subscription Agreement and has reviewed or had reasonable access
to all exhibits listed therein for Supplier's inspection.
(ii) At all times, the term "Gallon" as used in this Agreement, shall
be construed to mean "Net Gallons" as determined by standard
temperature adjustment.
e) Method and Terms of Payments: Payment for all shipments of Supplies
shall be due and payable in full within (10) days of the date of
delivery of said shipment. Seller shall pay Supplier via Supplier's
Electronic Fund Transfer (EFT) System in accordance with Supplier's
terms in effect on the date of delivery. If Supplier, in its sole
discretion, does not approve Seller's payment via EFT, Seller shall
pay Supplier by bank cashier's check at time of delivery, or at such
time and place or method as Supplier, in its sole discretion, may
designate from time to time. If a legal holiday shall precede a
payment due date or shipment date, the payment shall be presented to
the Supplier on the normal workday preceding the holiday.
(i) Supplier reserves the right to make changes in such payment,
terms and conditions for products sold and Seller agrees to
conform to all such terms and conditions.
The Seller shall not be entitled to any discount for early payment and
shall also pay to the Supplier all taxes, all other fees or charges
imposed on the supplies or the delivery thereof by the Supplier, and
all appropriate freight and delivery charges.
3. DEFAULT IN PAYMENT.
(a) Default in payment shall include, ie; a check not paid.
(i) Failure to make any payment required hereunder; or
(ii) Issuing a worthless check, ie; a check not paid when presented to
Seller bank.
(b) Upon Seller default in payment, Supplier reserves the following
rights, without notice, among other remedies:
(i) To terminate this Agreement.
(ii) To suspend further deliveries.
(iii) To enter upon Seller's premises to inspect Inventory and compute
and obtain receipts to apply on account.
(iv) To enter upon Seller's premises and take possession of and remove
all or any part of the products, without liability therefor,
using all reasonable means to effect such entry and removal, and
without liability for damage done in the course thereof: Seller
shall be liable for and shall pay Supplier for any products not
removed by Supplier; and/or;
(v) To exercise any of Suppliers rights arising out of or in
connection with Suppliers security interest in the products.
(vi) None of these rights shall be exclusive of any other rights held
by Supplier
4. EQUIPMENT.
(a) The Supplier has agreed to furnish to the Seller certain services
and/or equipment which are more particularly described in Exhibit "B"
attached hereto, which is made a part hereof. The said services and/or
equipment shall be furnished at the time described in Exhibit "B".
Upon the completion of the furnishing of such services and/or
equipment, the Supplier will notify the Seller as to the value of such
services and/or equipment. The Seller agrees to pay to the Supplier
the full value for said services and/or equipment and hereby agrees to
evidence said promise to pay therefor by the execution of a promissory
note or other instrument (the "Note") which is in a form acceptable to
Supplier. Supplier and Seller agree that the Note shall provide that
Seller shall receive a credit on the obligation owed by Seller for
such services and/or equipment at the rate of (.005) one-half cent for
each gallon of Supplies which are fully paid for by the Seller until
the full value of such services and/or equipment is fully paid.
Notwithstanding the full payment by Seller of its obligation to pay
for such services and equipment, the price which Seller will pay for
the Supplies will continue during the term hereof to be as stated in
Paragraph 2(e) hereof. Additionally the Note shall also provide that
the Seller shall be responsible to pay for the services and/or
equipment referred to in Exhibit "B" even if Seller terminates its
rights hereunder; in such event, the Seller shall be obligated to pay
the Note in full at the time it terminates this Agreement.
(b) All equipment and signs which bear the ALKHALIFA Petroleum Corp
emblem's shall remain the sole property of ALKHALIFA Petroleum Corp.
The Seller shall not encumber, sublet or sell the equipment or any
part thereof, nor remove the equipment or any part thereof from any
premises, nor deliver possession thereof to any other person, firm or
corporation, nor permit any other person, firm or corporation to use
the equipment. The Seller shall not do anything whereby said equipment
may be destroyed, damaged or by which the title of the Suppler or
right of severance or removal by the Supplier may in any way be
affected or prejudiced. The Seller hereby grants to Supplier a First
and Continuing Security Interest under the Article 9 of Florida
Uniform Commercial Code in all of its assets described in Exhibit "B"
attached hereto, together with the proceeds and products thereof, to
secure the promise of Seller to repay the loan according to the terms
and conditions of the note. Seller agrees to execute a UCC 1 Form.
(c) The Supplier will furnish to and install for the Seller one or more
electronic card terminals and 34 credit card imprinters. The Seller
will pay to the Supplier the sum of $3000.00 per month for the use of
said credit card machines, for materials therefor and for maintenance
thereon. Said credit card machines will remain the property of
ALKHALIFA Petroleum Corp. The Seller shall pay all personal property
or other taxes assessed on the equipment and shall comply with all
laws, rules, regulations and requirements of all governmental agencies
or authorities having jurisdiction thereof.
The following three (3) subparagraphs (d), (e), and (f) shall be applicable only
in the event that SELLER and SUPPLIER have executed an Improvement Agreement
which has not expired or been terminated and is of a duration which extends
beyond the term of this Agreement.
(d) Due to the existence of a certain Improvement Agreement between them
and subject to the conditions set out below, SUPPLIER will continue to
supply motor fuel to SELLER and to maintain a "franchise relationship"
, if branded, with SELLER within the meaning of the Petroleum
Marketing Practices Act, 15 USC ss.2801 et. seq. for the duration of
said Improvement Agreement, unless SELLER shall determine that SELLER
no longer wishes to purchase motor fuel from, and to maintain a
franchise relationship with, SUPPLIER. In such case, SELLER may
terminate the relationship created by the Seller Agreement (or similar
agreement then in force) in the manner provided therein or by
declining to enter into a new Seller Agreement (or similar agreement,
howsoever denominated) with SUPPLIER.
(e) At the end of the term of the Seller Agreement currently in force
between the Parties, and of any succeeding, similar, agreements
between the Parties, should SELLER desire the franchise relationship
to continue for the duration of the Improvement Agreement, through
December 4, 2013, then, unless SUPPLIER shall exercise its rights
preserved by sub-paragraph (f) of this paragraph 4, SELLER and
SUPPLIER will continue the relationship by executing new agreements
containing such terms and conditions as may be contained in those
Seller Agreements (or in those agreements of a similar type if no
longer denominated "Seller Agreement" by SUPPLIER) in then current use
for general application by SUPPLIER.
(f) Nothing herein contained in this paragraph 4 shall be construed to
limit the right of SUPPLIER to terminate or to not renew the franchise
relationship or franchise between SUPPLIER and SELLER for such causes
as may be provided for in this Seller Agreement (or in similar
agreements between SELLER and SUPPLIER) and in the Petroleum Marketing
Practices Act.
5. TRADEMARKS AND TRADENAMES: EXCLUSIVE USE OF ALKHALIFA PRODUCTS.
(a) Seller agrees, during the term of this Agreement, to sell only
ALKHALIFA Petroleum Corp. Supplied brand gasoline and to purchase all
such products only from Supplier and from no other jobber or person
who deals in ALKHALIFA products, except in the circumstances described
in Paragraph 8 hereof.
(b) Seller shall not sell any of the Supplies until ALKHALIFA has given
its written approval therefor. At all times during the term hereof,
Seller shall also comply with the requirements of ALKHALIFA for acting
as a Seller and seller of ALKHALIFA products.
6. PRODUCT INTEGRITY.
(a) Seller shall not mix ALKHALIFA brand products one with another or mix
or adulterate ALKHALIFA brand products with petroleum products of
others or with any other chemical or other material whatsoever.
(b) Seller warrants and agrees that Seller will not mix or allow Lead-Free
ALKHALIFA Gasoline to be mixed with any gasoline in or through any
containers, tank, pump, pipe or other element of its gasoline storage
or distribution system unless such facilities comply with all federal,
state and local government requirements for dispensing unleaded
gasoline.
(c) Seller further warrants and agrees that Seller, its employees and
agents will not introduce, cause or allow the introduction of leaded
gasoline into any motor vehicle which is labeled "UNLEADED GASOLINE
ONLY" or which is equipped with a gasoline tank filler inlet which is
designed for the introduction of unleaded gasoline.
(d) Seller will allow Supplier, its employees or agents to enter Seller's
place or places of business at any time to obtain such samples or
conduct such tests as may, in Supplier's judgement, be reasonably
required to confirm that Seller is complying with the aforesaid
obligations and will cooperate with Supplier in any investigation of
any alleged violations of such obligations.
7. COMPLIANCE WITH ENVIRONMENTAL AND OTHER APPLICABLE LAWS.
(a) Seller acknowledges that the petroleum products which are the subject
of this Agreement, by their nature, require special handling and that
Sellers, its employees and agents are fully informed as to all
governmental regulations and rules and approved procedures relating
thereto. Seller is solely responsible for compliance with all laws,
ruled, regulations and orders relative to the receiving, storing,
pricing, selling and distributing the Supplies. Seller is also solely
responsible for the proper disposal of all waste materials generated
by the Seller's activities.
(b) Seller represents that He/She is currently in compliance with all
Federal, state and local environmental laws and regulations and with
all other applicable Federal, state and local laws and regulations of
every kind and nature. Seller represents that He/She will remain in
compliance with all said applicable laws and regulations.
(c) Seller represents that all of the underground storage tanks into which
the Supplies will be delivered are, on the date hereof, in compliance
with all said laws and regulations. Seller represents that it is the
properly registered owner, agent or leasee of all the underground
storage tanks located on the Premises. Seller agrees that it will
properly upgrade all underground storage tanks in accordance with all
applicable laws and regulation.
8. PREVENTION OF PERFORMANCE: FORCE MAJEURE.
If 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;
and (b) failure in, or inability to obtain, on reasonable terms, Supplies
by reason of any whole or partial failure or inability of ALKHALIFA to sell
to or supply Supplier under the ALKHALIFA Contract.
If by reason of any force majeure condition Supplier shall be unable to
supply the requirements of Seller regarding any product covered by this
Agreement, Supplier's obligation while such condition exists shall, at its
option, be reduced to the extent necessary in its sole judgement and
discretion to apportion fairly and reasonable among Supplier's customers
the amount of product which it is able to supply. Such allocation shall be
made by Supplier among all of its customers including, but not limited to,
Seller and any and all stores or stations owned by ALKHALIFA PETROLEUM
CORP. or related companies. Supplier shall not be responsible in any manner
for any losses or damages which Seller may claim or suffer as a result of
any such apportionment. Supplier shall not be required to make up any
deficiency in any product not delivered as a result of any such
apportionment.
If Supplier is prevented by any force majeure condition from supplying any
of the Supplies to Seller, then, in such event but only during the period
of time that such force majeure condition is in effect, Seller may purchase
ALKHALIFA gasoline, diesel or products from another supplier or jobber who
deals in ALKHALIFA gasoline's, diesel or products. As soon as the force
majeure condition has terminated, then Seller agrees to purchase all of its
requirements for gasoline and diesel from Supplier.
EXCUSED NONPERFORMANCE. SELLER shall be excused from the obligation to take
deliveries of the products as required by Paragraph 2 to the extent and for
the period that the operation of SELLER's business is limited or impaired
because of governmental orders and regulation, judicial decree, fire,
flood, war, civil disturbance, any labor disputes, blockade, embargo or any
other causes beyond SELLER's control. SUPPLIER shall be excused from the
performance of its obligations herein to the extent and for such time that
its performance is delayed or prevented by any cause reasonably beyond
SUPPLIER's control, including, but not limited to, those causes or
conditions set out above excusing SELLER's obligation as well as the
cancellation or non renewal of product exchange agreements with third
parties or the failure of third parties to deliver product for whatever
reason. Should SUPPLIER's supply of any product be insufficient at any time
and for any reason to enable SUPPLIER to supply the demand of all customers
normally receiving such product(s), SUPPLIER may, without incurring any
liability to SELLER, discontinue deliveries of such product(s) hereunder
for the duration of the shortage or apportion deliveries thereof among
SELLER and such other customers, including SUPPLIER's own requirements, as
SUPPLIER, in its sole discretion, may determine. In all instances, SUPPLIER
shall not be required to conclude product purchase or exchange agreements
which it deems to be uneconomic nor shall SUPPLIER be required to operate
any refining or other facility if the same is deemed by SUPPLIER to be
physically or economically undesirable.
9. MARKET WITHDRAWALS.
In the event Supplier elects to withdraw from the marketing of automotive
gasolines for resale in the area supplied by the ALKHALIFA supply point
supplying Seller, Supplier may terminate this Agreement at any time without
further liability on 100 days' written notice. Upon receipt of the
aforesaid notice of termination, Seller may at any time thereafter
terminate this Agreement prior to the expiration of said 100-day period
upon delivery of written notice of termination to Supplier.
10. CHANGE OF SUPPLIERS.
Should Supplier discontinue selling ALKHALIFA brand products, it shall have
the right to substitute any other brand of petroleum products and this
Agreement shall remain in full force and effect.
11. SALE OR LEASE OF PREMISES.
If, during the term of this Agreement, Seller receives a bona fide offer
(hereinafter called an "Outside Offer") for the sale or lease of the
Premises, which Seller intends to accept, Seller shall give notice to
Supplier of such offer and of such intention, the name and address of the
proposed purchaser or lessee, a true and correct copy of the offer or
agreement and, if no written offer or agreement exists, the terms of the
proposed transaction and such other information as Supplier may reasonable
require, and shall offer to sell or lease the Premises to Supplier or its
designee, corporate or otherwise, on the same terms and conditions as
contained in such Outside Offer. Within Thirty (30) days after receipt of
such notice, Supplier may elect, by notice to Seller, to purchase or lease
the Premises, as applicable, on the same terms and conditions as contained
in the Outside Offer. In the event the Supplier elects to purchase or lease
the Premises, closing shall occur at the office of the attorneys for the
Supplier in accordance with the terms of the offer but not greater than
ninety (90) days after the giving of notice by the Supplier of its election
to accept such offer. Any purported sale or lease of the Premises in
violation of this section shall be voidable at the election of the
Supplier.
12. LABELING: UNLEADING GASOLINES.
(a) Seller shall comply at all times with the programs and procedures
established by Supplier and by ALKHALIFA for controlling the quality
of the lead-free products which are sold to Seller as part of the
Supplies. Seller shall indemnify Supplier against any penalty, loss or
liability of any nature whatsoever resulting from failure of Seller to
maintain lead-free specifications of ALKHALIFA's lead-free products.
(b) Seller's indemnity obligation under Subsection 8 (b) of this Agreement
shall include, but not be limited to, any and all expense (including
trial and appellate attorney's fees), liability, claims, fines, civil
penalties or demands which may arise or be assessed as a result of any
act or omission of Seller or Seller's agents or employees in handling
unleaded gasolines hereunder, or a result of failure by any of them to
follow Supplier's and ALKHALIFA's programs and procedures for handling
unleaded gasolines.
(c) Seller agrees to inject into the Supplies any additives as requested
by ALKHALIFA or Supplier.
13. WARRANTIES.
Supplier warrants that it has good title to the Supplies supplied,
free of liens. THE FOREGOING WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL
OTHER WARRANTIES, WHETHER WRITTEN, ORAL OR IMPLIED. THE WARRANTY OF
MERCHANTABILITY, IN ALL OTHER RESPECTS, OTHER THAN EXPRESSLY SET FORTH
HEREIN AND RESPECTS, OTHER THAN EXPRESSLY SET FORTH HEREIN, ARE EXPRESSLY
EXCLUDED AND DISCLAIMED.
14. CLAIMS.
Any claim for defect or variance in quality or product furnished
hereunder shall be made in writing directed to Supplier, with a copy to
ALKHALIFA, within three (3) days, excluding weekends and holidays, after
discovery of the defect or variance. Supplier and ALKHALIFA shall be
furnished samples adequate to test the products claimed to be defective and
both Supplier and ALKHALIFA shall be afforded the opportunity to take their
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 Seller.
15. CREDIT CARDS.
Seller may grant credit to holders of credit cards which may be issued
by ALKHALIFA and/or issued by other companies listed in ALKHALIFA's then
current credit card regulations, a copy of which has been provided to
Seller. 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 ALKHALIFA products and that ALKHALIFA shall
have the right, in its sole discretion, to amend or terminate such
regulations and discontinue this credit card program at any time. Seller
may also grant credit to such ALKHALIFA credit card holders for other items
of merchandise sold by Seller at the Premises which are not ALKHALIFA
products, but only if Seller has been given specific written permission by
ALKHALIFA to extend such credit. Seller agrees that all credit card
invoices which it may transmit and assign to ALKHALIFA shall be in
conformity with ALKHALIFA's credit card regulations and that ALKHALIFA may
reject or charge back any credit card invoices not conforming to said
instructions. Seller 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 Seller to ALKHALIFA 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 ALKHALIFA to such place(s) and at such time intervals
as ALKHALIFA my designate from time to time.
16. MARKETING AND ADVERTISING ALLOWANCE
Seller is hereby granting exclusive marketing and advertising rights to
Supplier (exclusive to petroleum and related advertising products or
vendors), and Supplier herewith is accepting from Seller the exclusive
marketing and advertising rights and agrees to pay a monthly allowance, to
Seller, for these rights for a period of 10 years, commencing with the term
of the fuel supply agreement. The exclusive marketing and advertising right
will be granted at each location that Supplier supplies petroleum products
and that Marketing and Advertising rights are available, (i.e. Billboards,
canopies, banners, road signs, roof tops, buildings, walls, pumps, marquee
boards, trucks, cars, radio, television, etc.)
Supplier agrees to issue a marketing and advertising allowance credit to
Seller in the amount of one and one-half (1 1/2) cents per gallon on all
purchases of petroleum products monthly. This exclusive marketing and
advertising rights allowance will be paid monthly to Seller, or may be
applied against outstanding invoices, at Suppliers sole discretion.
It is further agreed that Supplier is be being granted the exclusive
marketing and advertising rights on the entire Travel Center site to be
built in Davie, Florida. In addition to the marketing and advertising
allowance credit to Seller in the amount of one and one-half (1 1/2) cents
per gallon on all purchases of petroleum products monthly Supplier hereby
agrees to pay Seller an additional fixed payment of $200,000 per month for
a total of $2,400,000 annually for a period of 10 years. The total
advertising budget for 10 years will be $24,000,000. The advertising
dollars will be used to market and advertise brand awareness and related
products. The Travel Center rights will not be restricted to petroleum and
vendor advertising only; these rights will be granted to allow Supplier to
sub-lease space to third party advertisers that do not compete with Seller
or the location. This lease will commence January 2004 through January
2014.
17. CARE AND HANDLING OF PRODUCT.
SUPPLIER agrees that all ALKHALIFA gasoline (for purposes of this
paragraph, the "product") sold hereunder, shall comply with all applicable
federal, state and local rules and regulations in effect at the time and
place of delivery to SELLER. SELLER agrees:
(a) To abide by all laws, ordinances and regulations regarding the
storage, transportation, dispensing and sale of the product;
(b) To protect the product from contamination or from commingling with
other gasoline, blend products, or otherwise and to do nothing during
the transportation, storage, dispensing or sale of the product which
may result in contamination of any sort or result in a product which
does not comply with applicable Xxxx Vapor Pressure, oxygenated
gasoline, and/or reformulated gasoline standards;
(c) To periodically train SELLER's employees in the handling, sampling,
and oversight for Xxxx Vapor Pressure, oxygenated gasoline, and/or
reformulated gasoline standards
(d) To use equipment (such as pumps, nozzles, tanks, hoses, and Stage II
Vapor Recovery equipment, where applicable) designed and intended for
the storage, dispensing and sale of the products and to keep such
equipment clean and in good working condition at all times;
(e) To permit SUPPLIER, its agents and employees to inspect and/or copy
the daily inventory control records and reconciliations and to sample
the products at all reasonable times and to annually certify to
SUPPLIER compliance with the Federal Occupational Safety and Health
Administration (OSHA) Service Station Regulation 1910.106(g), and 40
CFR Part 280 which require SELLER to maintain and reconcile accurate
daily physical and book inventory records of underground storage tanks
on the Premises;
(f) To regularly inspect and sample, and to permit SUPPLIER, its agents
and employees to inspect and sample, the product in SELLER's
possession at all reasonable times and to fully cooperate to cure and
correct any contamination and take immediate corrective action if any
contamination, adulteration, or misbranding, regardless of source, is
discovered whether by SELLER or by SUPPLIER. If discovered by SELLER,
SUPPLIER shall be immediately notified thereof. In any case, SUPPLIER
may thereafter refuse to make further deliveries of products into such
tank(s) pending proper correction of any such contamination;
(g) To protect, indemnify and hold SUPPLIER harmless from any and all
losses, claims, damages, penalties, suits or costs which may arise or
grow out of any violation or alleged violation of this Paragraph 19.
18. LIQUIDATED DAMAGES.
It is understood that the Supplier is relying on sales to Seller of
the minimum product quantities set forth in Article 2, Paragraph (b) and
that any repudiation of this Agreement and failure to purchase those
minimum product quantities by Seller will result in serious losses to
Supplier. Seller and Supplier acknowledge that the amount of those losses
is and will be difficult to determine. It is agreed, therefore, that upon
any repudiation of this Agreement by Seller, Seller shall pay to Supplier,
as liquidated damages to compensate for such losses, two cents per gallon
multiplied by the minimum number of gallons set forth in Article 2,
Paragraph (b) measured from time of repudiation to the end of the term of
this Agreement and any extensions thereof. The damages here liquidated are
confined to losses resulting from Seller's repudiation of this Agreement
and shall not affect such other rights and remedies as Supplier may have
under this Agreement and under applicable law including, but not limited
to, the PMPA and the Uniform Commercial Code.
19. INDEMNITY.
(a) Seller hereby releases and agrees to indemnify and hold Supplier, its
agents, servants, employees, successors and assigns (the "Indemnified
Parties"), harmless from and against any and all claims, suits,
losses, obligations, liabilities, injuries and damages, including
attorney's fees, trial and appellate, and costs of litigation for
death, personal injury, property damage or other claim arising out of
any failure by Seller to perform, fulfill or observe any obligation or
liability of Seller set forth herein or any negligent act or omission
by Seller 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 premises is or was either directly or indirectly owned,
leased, operated, supplied, franchised or licensed by or through
Seller.
(b) Seller hereby releases and agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims,
suits, losses, injuries, liabilities and damages, including attorney's
fees, trial and appellate, and costs of litigation for death, personal
injury, property damage or other claim arising out of or resulting
from delivery, use, storage, handling and sale of petroleum products
including, but not limited to, the seepage, leakage or release 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 pump 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 Seller; unless such damages are caused by
the sole negligence of Supplier or its agents.
(c) Seller shall defend, indemnify and hold the Indemnified Parties
harmless from and against any fines, penalties, taxes, judgements,
charges or expenses (including attorney's fees, trial and appellate
and cost of litigation) for violations of any law, ordinance or
regulation caused by any act of omission, whether negligent or
otherwise, of Seller or its agents, servants, employees, contractors,
Sellers, franchises or licensees.
(d) Notwithstanding the foregoing provisions, Seller will not be
responsible for violations of any law, ordinance or regulation by
Supplier, nor for any acts or omissions arising from the sole
negligence of Supplier, its agents or employees.
20. INSURANCE.
Without limiting in any way the scope of any obligations and/or liabilities
assumed hereunder by SELLER, SELLER shall procure and maintain at its
expense for the duration of the Term hereof, the insurance policies
described below:
(a) Workmen's Compensation and Occupational Disease Insurance, including
Employers' Liability Insurance in compliance with the state laws in
which the SELLER and the Premises are located;
(b) Comprehensive General Liability Insurance covering bodily injury,
including death, and property damage and endorsed to include premises
and operations, complete operations, products liability, and
contractual liability, with a combined single limit of not less than
$500,000;
(c) Insurance for SELLER's Garage Keeper's legal liability for property
under SELLER's care, custody and control, where SELLER operates Repair
and Lubrication Bays, on the Premises, including coverage for fire,
theft, or collision of automobiles, including vandalism and malicious
mischief with limits of not less than $25,000; and
(d) Automobile Liability Insurance covering bodily injury, including
death, and property damage for the operation of owned, hired, or
otherwise operated non-owned automotive equipment used in performance
of the business of SELLER, with a single limit of not less than
$500,000.
SELLER's insurance shall be endorsed to include SUPPLIER as an additional
insured under Paragraphs 20 (b), (c), and (d) above.
SELLER shall provide SUPPLIER with a Certificate of Insurance. The
Certificate of Insurance shall provide that SUPPLIER be given at least
thirty (30) days' prior notice prior to cancellation or any material change
in the coverages provided above.
21. GENERAL PROVISIONS.
(a) This Agreement is personal to Seller, but Seller may assign this
Agreement to such other person or entity as Supplier, in its sole and
absolute discretion, specifically approves in writing.
(b) This Agreement shall bind the executors, administrators, personal
representatives, assigns and successors of the respective parties.
(c) 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.
(d) 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 and such other addresses as may be furnished to the
other in writing by certified mail.
(e) All understandings and agreements related to the subject matter hereof,
either verbal or written, except insofar as incorporated in this
Agreement, are hereby cancelled and withdrawn.
(f) 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.
(g) This Agreement shall be governed by the laws of the State of Florida.
(h) Seller hereby grants to the Supplier the right to inspect and audit
Seller's books, records, property and all storage tanks located on the
Premises during normal business hours upon a two (2) hour notice.
(i) Exhibit "A: Promissory Note and UCC1 Form is made a part of this
Agreement.
(j) Exhibit "B" Equipment Agreement is made a part of this Agreement.
Signed, sealed and Supplier:
delivered in the ALKHALIFA Petroleum Corp.
presence of:
_______________________________ By:_______________________________
_______________________________ Its:______________________________
Seller: FuelNation Inc.
_______________________________ By:_______________________________
_______________________________ Its:______________________________
UNCONDITIONAL
GUARANTY
In consideration of ALKHALIFA Petroleum Corp. (hereinafter referred to as
ALKHALIFA) extending credit to FuelNation Inc. (hereinafter referred to as ("the
Company") in which the undersigned are stockholders, directors, members,
officers or employees, the undersigned do hereby guarantee to ALKHALIFA the
payment of any and all debts and financial obligations of the Company to
ALKHALIFA, incurred pursuant to Purchase and Supply Agreement, Equipment
Agreement and Promissory Note of even date herewith.
Each of the undersigned as a primary obligor jointly and severally and
unconditionally guarantees to ALKHALIFA that the Company will fully, promptly
and faithfully perform, pay and discharge all its present and future obligations
to ALKHALIFA Oil and each agrees, without ALKHALIFA first having to proceed
against the Company or to liquidate any security of the Company which may be
held by ALKHALIFA or to otherwise pursue or exhaust its remedies against the
Company or against any other security ALKHALIFA may have to pay on demand all
sums due and to become due to ALKHALIFA from the Company together with all
losses, costs, attorney's fees, trial and appellate, or expenses which may be
suffered or incurred by ALKHALIFA by reason of the Company's default or default
of any of the undersigned. Each of the undersigned waives notice of nonpayment,
protest and notice of protest with respect to the indebtedness covered by this
guaranty.
This Guaranty shall be binding upon the heirs, administrators, successors and
assigns of the undersigned and shall inure to the benefit of ALKHALIFA, its
successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the 4th day
of December 2003 in Broward County Florida.
------------------------------ --------------------------------
Witness FuelNation Inc.
------------------------------ --------------------------------
Witness
ALKHALIFA PETROLEUM CORP.
Equipment Agreement
"EXHIBIT B"
SELLER: FuelNation Inc. SUPPLIER: ALKHALIFA PETROLEUM Corp.
Invoice Address: 0000 XX 00xx xxxxxx, Xxxxx 0000 0000 XX 00xx xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxx Xxxxx, 00xx xxxxx, Xx-Xxxxxxx Xxxx, Xxxxxx, Xxxxxxx, X.X Xxx 00000,
Xxxxxx, Xxxxxxx
Provisions Relating To Loan Of Equipment
1. The Seller agrees to use the Equipment, as defined below, only for the
purposes of distributing, handling or storing petroleum or other products
purchased from the Supplier by the Seller.
2. The Equipment shall at all times be and remain the property of the
Supplier, and the Seller shall at all times keep and maintain the Equipment
in good order, condition and repair. It is the Seller's obligation to keep
the Equipment in a clean and attractive appearance. If, at the discretion
of the Supplier, the Equipment is found to need cleaning and polishing, the
Supplier may clean and polish the equipment and then the Seller shall
reimburse the Supplier for any expenses incurred. The Seller shall, at all
times, keep and maintain on said Equipment the trade xxxx, insignia or any
identification marks of the Supplier. Any expenses incurred for the repair,
maintenance or removal of such equipment shall be paid by the Seller. Upon
the termination of the Purchase and Supply Agreement, the Seller shall be
obligated to return all of the equipment described herein in the same
condition as at the commencement of this agreement, reasonable wear and
tear excepted.
Equipment
The Supplier will furnish and loan to the Seller, installed at the Seller's
delivery address, the following items of Equipment ("the Equipment"):
Number Description Agreed Value
34 Card Readers for Gilbarco dispensers 30,000.00
Total $30,000.00
Seller ______________________________ Witness _____________________________
FuelNation Inc.
Witness ____________________________
PROMISSORY NOTE
EXHIBIT "A"
$ 30,000 Davie, Florida December 04, 2003
FOR VALUE RECEIVED the undersigned, jointly and severally, promise to PAY TO
THE ORDER OF ALKHALIFA Petroleum Corp.. the principal sum of thirty Thousand
and 00/100 Dollars ($30,000.00) together with the interest from 12/4/03 at the
rate of (8%) percent per annum until maturity, all payable in lawful money of
the United States of America, as follows: This note sets forth the agreed value
under the Purchase and Supply Agreement by and between "ALKHALIFA" (Supplier)
and the Maker (Seller) for all the services and/or equipment in Exhibit "B" of
that Agreement. Supplier shall issue credit to Seller of one-half (1/2) cents
per gallon on all purchases of petroleum products monthly. The amount credited
shall be applied against the value of this note. The total term of this note
shall be Sixty (60) months. Any unpaid balance shall become due and payable on
Demand. In the event of Seller default, the entire unpaid balance shall become
due and payable immediately.
All payments shall apply first to accrued interest, and the remainder, if any,
to reduction of principal. If any installment of principal or interest is not
paid when due, or upon any default in the performance of any of the covenants
or agreements of this note, or of any instrument now or hereafter evidencing or
accruing this note or the obligation represented hereby, the whole indebtedness
(including principal and interest) remaining unpaid, shall, at the option of
the holder, become immediately due, payable and collectible, and during such
period, this note and deferred interest shall bear interest at the rate of
eighteen (18%) percent per annum. Each maker and endorser severally waives
demand, protest and notice of maturity, non-payment or protest and all
requirements necessary to hold each of them liable as makers and endorsers.
Each maker and endorser further agrees, jointly and severally, to pay all costs
of collection, including reasonable attorney fees in case the principal of this
note or any payment on the principal or any interest thereon is not paid at the
respective maturity thereof, or in case it becomes necessary to protect any
security hereof, whether suit be brought or not, said costs shall include
reasonable attorney's fees for any appeal should an appeal be taken
Payable at 0000 XX 00xx xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000
___________________________(Seal)
FuelNation Inc.,
or such other place as shall be designated by
the holder of this note in writing.
