Retail Contracts Library

THIS AGREEMENT is between Bowlin Travel Centers, Inc. (”Buyer") whose address is 150 Louisiana Blvd, Albuquerque, NM 87108 and Arizona Fuel Distributors, LLC ("Seller") whose address is P.O. Box 63634 Phoenix, AZ 85082.

1.       DEFINITIONS. As used in this Agreement, the terms below have the following meanings, whether singular or plural:

(a)   “Business Entity” - Any legal entity that is not an individual or sole proprietorship, including, without limitation, a partnership, corporation, limited liability company, limited liability partnership, or association.

(b)   “Buyer’s Marketing Premises” - Buyer’s premises, including, but not limited to, Buyer’s office and storage, and distribution facilities that Buyer uses in connection with the Products.

(c)   “Buyer’s Outlets” - Those retail outlets, including marinas and truck stops, operated or supplied by Buyer and which Seller has authorized Buyer to display the Identifications in connection with the resale of the Products to consumers.

(d)   “Identifications” - The trademarks, trade dress, service marks, and color schemes relating to the Shell brand licensed to Buyer by Seller under the terms of this Agreement for use by Buyer and Buyer’s Outlets in connection with the marketing and sale of the Products.

(e)   “Law” - Any applicable statute, constitution, ordinance, regulation, rule, administrative order, or other requirement of any federal, state, or local government agency or authority in effect at the time of execution, or during the term, of this Agreement.

(f)   “Plant” - The distributing plant from which deliveries of Petroleum Products are made to Buyer.

(g)   “PMPA” - The Petroleum Marketing Practices Act as may be amended from time to time (15 U.S.C. §2801 et seq.).

(h)   “Products” - The gasoline and diesel fuel sold to Buyer by Seller for resale under the Identifications.

2.      PURCHASE AND SALE OF PRODUCTS.

(a)   Subject to Articles 18 and 19, Seller shall sell and deliver to Buyer, and Buyer shall purchase and accept from Seller, the minimum quantities of Products identified in Exhibit A during each month and year during the term of this Agreement (“Minimum Quantities”). Buyer acknowledges that the Minimum Quantities are necessary and reasonable for, among other reasons, Seller to plan its supply operations and, as such, are of material and reasonable significance to the franchise relationship. Buyer also acknowledges that Seller has established minimum volume levels for gasoline (“Base Volume”) to be resold through Buyer’s Outlets for its customers in order to retain a Wholesale Marketer Agreement. Accordingly, in no event may Buyer’s Minimum Quantities be less than the following Base Volume:

If the Minimum Quantities are less than the minimum Base Volume, the Minimum Quantities are deemed amended to be the same as the minimum Base Volume; and the Maximum Quantities will be proportionately increased. If Buyer fails to purchase this minimum Base Volume, Seller may take such action as Seller deems appropriate, including, without limitation, terminating or not renewing this Agreement.

(b)   Seller may, but will not be obligated to, sell Buyer more than the “Maximum Quantities” identified in Exhibit A. Seller’s exercise of its right to do so will not obligate Seller to continue to sell Buyer such excess quantities.

(c)   To the extent practicable, Buyer shall take delivery of all Products on a ratable basis.

(d)   If Buyer fails to purchase and accept the Minimum Quantities in any 12-month period, Seller may unilaterally downward adjust the Minimum/Maximum Quantities each succeeding 12-month period by the difference between the annual Minimum Quantities and the amount actually purchased for that 12-month period. In addition, Buyer may request that Seller downward adjust Buyer’s Minimum/Maximum Quantities if the need for the downward adjustment is due to a reason beyond Buyer’s reasonable control. If Seller agrees that the reason is beyond Buyer’s reasonable control, Seller shall downward adjust the Minimum/Maximum Quantities each succeeding 12-month period by the difference between the annual Minimum Quantities and the amount actually purchased for that 12-month period. Likewise, if Buyer purchases more than the Minimum Quantities, Buyer may request that Seller upward adjust Buyer’s Minimum/Maximum Quantities. If Seller agrees, the Minimum/Maximum Quantities will be upward adjusted for each succeeding 12-month period.

(e)   If the term of this Agreement commences at any time after January 1st of any year during the term of this Agreement, Buyer must purchase and accept the Minimum Quantities during the remaining months of that 12-month period, but Seller's rights and remedies set forth in Articles 2(a) and (d) above will not commence until the next full 12-month period.

(f)   If Buyer terminates this Agreement prior to the expiration of its term or if Seller terminates this Agreement for cause in accordance with the PMPA or applicable Law, Seller will be entitled to all remedies available at Law or in equity. Notwithstanding the foregoing, if Buyer terminates this Agreement and Buyer’s Outlets remain branded under the Identifications, Seller may waive its remedies pursuant to this article.

3.      PRICES AND TERMS OF PAYMENT.

(a)   PRICES: For Gasoline and Diesel Fuel: Seller’s price to retailer in effect at time of delivery.

(b)   TERMS OF PAYMENT:   Gasoline and Diesel Fuel terms are net seven days EFT subject to credit approval.

(c)   Seller may charge Buyer interest, at a reasonable lawful rate per annum, on all overdue sums owed to Seller. Further, if Buyer fails to make timely payment of any amount due Seller, in addition to all other rights or remedies available, Seller may take such action as Seller deems reasonable under the circumstances. Without limiting the generality of the foregoing, Seller may setoff or equitably recoup against any amount then due Buyer, defer further deliveries of the Products until payment of all outstanding indebtedness is made, and demand advance cash payment for further deliveries. Buyer shall comply with the terms of any commercially acceptable reclamation notice issued to Buyer by Seller under applicable Law.

4.      TERM. The term of this Agreement is ten years subject to the Seller’s right to terminate or not renew this Agreement in accordance with applicable law. Upon expiration, this Agreement will continue on a month-to-month basis until the parties execute a new agreement or Seller terminates or does not renew this Agreement in accordance with applicable law. The term begins on the date of the first delivery of Shell gasoline.

5.      PERMISSION TO USE THE IDENTIFICATIONS.

(a)   Seller grants to Buyer permission to use the Identifications only in connection with the resale of the Products and so long as Buyer complies with the terms of this Agreement. Buyer acknowledges that the Identifications are a valuable and important property right and are essential to the goodwill and reputation of the Products. Buyer further acknowledges Seller’s interest in the Identifications and Buyer shall not claim any right to or title or interest thereto.

(b)   Buyer must obtain Seller’s prior written authorization to use and display, or permit the use and display of, the Identifications at any retail outlet.

(c)   Buyer shall follow all rules, regulations, standards, and guidelines Seller establishes from time to time relating to the use and display of the Identifications in connection with the resale of the Products.

6.      PRODUCT STEWARDSHIP AND QUALITY. Pursuant to Seller’s permission to grant Buyer use of the Identifications, Buyer shall comply with the following requirements relating to the marketing, storage, and resale of the Products.

(a)   Buyer shall not resell, nor may any operator of Buyer’s Outlets resell, gasoline at Buyer’s Outlets other than the gasoline purchased by Buyer from Seller to be resold under the Identifications pursuant to the terms of this Agreement.

(b)   The quality of the Products must be strictly maintained and not adulterated, commingled, or blended with any other products or substances in any manner.

(c)   All Products must be clearly identified, correctly labeled, and resold under their proper Identifications and grades.

(d)   All signs and other advertising devices or materials furnished by Seller to Buyer will remain Seller's property, must be used solely in connection with the resale of the Products, and must be returned to Seller immediately upon demand at Buyer's expense.

(e)   Buyer shall obtain Seller's prior written approval before using, or permitting the use of, any promotional materials or advertising that bear any of the Identifications.

7.      BRAND IDENTIFICATION AND MINIMUM STANDARDS. Buyer acknowledges that the Identifications represent to the motoring public the manufacture and sale of quality Products. Buyer shall undertake no action of any kind that may harm or degrade the Identifications. Buyer further acknowledges that uniform standards of quality and appearance must be maintained at all retail outlets displaying the Identifications in order to properly market and sell the Products, preserve and promote the reputation of Seller, and achieve public acceptance of the Products. Accordingly, Buyer shall comply with, and cause the operators of Buyer’s Outlets to comply with, all standards of operation and appearance established from time to time by Seller, including, without limitation, the following minimum obligations; provided, however, the means and the manner of performance are within the sole discretion of Buyer:

(a)   Buyer shall comply with the Retail Visual Identity Design Standards and Conversion guidelines (“Image Guidelines”) as may be amended by Seller or Shell from time to time. If Seller or Shell amends the Image Guidelines, Seller shall provide Buyer written notice.

(b)   Buyer acknowledges receipt of, or has been informed on how to access through the online website of Seller and/or SHELL, the brand standards pertaining to Seller’s and SHELL’S operations, appearance, and cleanliness requirements (“Brand Standards”). At all times during the term of this Agreement, Buyer shall maintain, and cause the operators of Buyer’s Outlets to maintain, Buyer’s Outlets in accordance with the Brand Standards, as may be amended by Seller or SHELL from time to time. If Seller or SHELL amends the Brand Standards, Seller shall provide Buyer notice. If any Buyer’s Outlet fails to meet the Brand Standards, Buyer shall de-identify the Buyer’s Outlet upon notice from Seller in accordance with Article 23.

(c)   The Products must be diligently and efficiently merchandised and promoted at Buyer’s Outlets.

(d)   The operations at Buyer’s Outlets must be conducted in a professional and business-like manner and the public must be provided with prompt, courteous, and efficient service.

(e)   Buyer shall promptly and courteously respond to any customer complaints (including written responses when appropriate) and take immediate action to satisfactorily resolve each customer complaint.

(f)   In order to operate Buyer’s Outlets in an organized and efficient manner, adequate and competent personnel who are able to converse in English with Seller, customers, government officials, and other persons, considering both the volume and nature of the business activity must be maintained at Buyer’s Outlets.

(g)   The operators and employees at Buyer’s Outlets shall wear neat, clean uniforms of a type and style approved by Seller; provided, however, for uniforms with Buyer logos, such approval will not be unreasonably withheld.

(h)   All service work at Buyer’s Outlets must be performed in a workmanlike manner utilizing only first-class new materials and parts except when the customer specifically authorizes rebuilt or used materials or parts.

(i)   Buyer’s Outlets must be kept in a clean, sanitary, and safe condition and all property and equipment kept in good operating condition and repair. The driveways, sidewalks, and other landscaped areas must be kept in a neat and orderly appearance free from weeds, debris, snow, ice, and rubbish.

(j)   Buyer’s Outlets may not be used for any unlawful, offensive, hazardous, unsightly, or other objectionable purpose, including, but not limited to, the sale or display of materials with dominant themes of sex, nudity, prurient interest, or pornography, which are unacceptable under local community standards. Merchandise or paraphernalia that is morally offensive or distasteful to the general public may not be displayed or offered for sale at Buyer’s Outlets.

(k)  Buyer’s Outlets must be kept clear of vehicles, other mobile equipment, and obstructions that restrict traffic flow, endanger customer safety, or detract from appearance. Buyer’s Outlets may not be used to sell, lease, or store motor vehicles, trailers, boats, or other mobile equipment, without Seller’s prior written consent.

(l)   Buyer’s Outlets must be operated in a secure manner so that criminal activity is adequately deterred from occurring there and so that all persons at Buyer’s Outlets are adequately protected from injury, harm, or loss. Buyer has complete control over and the sole responsibility for security at Buyer’s Outlets.

8.      SELLER’S MARKETING RIGHTS. SHELL or Seller may, from time to time: (a) add, change, or modify the grade, Product brand name, delivery package, or other distinctive designation of any Product; (b) change or modify the formulations and specifications of any Product; and (c) upon 30 days’ prior notice, discontinue at any time the sale of any Product in which event the parties will be relieved of any further obligation with respect to that Product.

9.      SALES AND MARKETING OBLIGATIONS.

(a)   Buyer shall use its reasonable efforts to develop and actively promote the sales of Products. Nothing in this Agreement grants Buyer an exclusive territory to market and resell the Products. Seller reserves the right to market and sell, and authorize others to market and sell, the Products in any manner Seller chooses, including, without limitation, through its own retail outlets or through designated wholesalers or other buyers.

(b)   Buyer shall keep all Buyer’s Outlets supplied on a timely basis with sufficient volumes and quantities of Products to meet the needs and demands of all Buyer’s Outlets and their customers. Buyer shall maintain a sufficient amount of all grades of Seller’s branded gasoline and, if applicable, branded diesel fuel at Buyer’s Outlets.

(c)   Buyer shall not sell, deliver, or otherwise supply the Products to retail outlets Seller has not authorized, in writing, Buyer to supply. Further, Buyer shall not supply the Products to any reseller or retailer who Buyer knows or has reason to know will resell the Products under trademarks or brand names other than those of Seller.

10.     TRAINING.

(a)   Buyer shall attend and shall cause all the managers or operators of Buyer’s Outlets to attend a minimum of 2 days (16 hours) of Shell approved training courses or courses deemed appropriate by Shell for each year of the term of this Agreement, as and if required by Shell. The training will be conducted at a training facility designated by Seller.

(b)   Buyers without previous automobile service station, motor fuel dispensing station, or convenience store experience shall attend the appropriate initial new Buyer training class and shall cause all the operators of Buyer's Outlets without such previous experience to attend the appropriate initial new Buyer training class. The training will be conducted at a training facility designated by Seller.

(c)   Upon Seller’s request, Buyer shall provide proof of training for Buyer, Buyer’s managers, and the operators of Buyer’s Outlets. Buyer shall have available and utilize training equipment, materials, and programs made available by Seller from time to time for training purposes.

(d)   Buyer shall distribute Seller’s communications relating to training and Seller’s training materials within 90 days after receipt to Buyer’s employees and the operators and employees of Buyer’s Outlets.

11.     DELIVERIES.

(a)   POINT OF DELIVERY: 16098 East Camino Adelante, Picacho, AZ.

(b)   Title and risk of loss passes to Buyer when Products pass from Seller's delivery line into the receiving connection of Buyer's tank unless otherwise agreed to by Seller.

12.     TRANSACTION CARDS.

(a)   As long as Seller elects to accept specified credit cards, credit identifications, debit cards, pre-paid cards, or other transaction authorization cards (collectively “Transaction Cards”) in the state in which Buyer’s Outlets are located, Buyer shall accept all Transaction Cards identified in Seller’s Transaction Card guide (“Guide”) for the purchase of authorized products and services. Buyer shall account for and process, and cause the operators of Buyer’s Outlets to account for and process, all such transactions in strict compliance with the terms set forth in the Guide, as may be amended by Seller from time to time. If Seller amends the Guide, Seller shall provide Buyer with notice. Seller may assess Buyer a Transaction Card processing fee for providing such services.

(b)   Seller shall accept from Buyer all transactions generated as a result of purchases made with authorized Transaction Cards and processed in accordance with the terms in the Guide. At Seller’s option, Seller shall pay the amount of the transactions to Buyer, after deducting any processing fee in effect under Seller’s then current Guide, by: (1) setting off the amount against Buyer’s account with Seller; (2) a credit to Buyer’s bank account by EFT.

(c)   For each transaction not authorized, disputed by a customer, or otherwise subject to chargeback under the Guide, Seller may either charge the amount to Buyer’s account or require Buyer to make immediate refund to Seller, including refund by draft or EFT initiated by Seller, without any deduction for any processing fee.

(d)   In order to provide efficient service to the motoring public, Buyer shall comply with Seller’s software and hardware standards, established from time to time by Seller, relating to Electronic Point of Sale (“EPOS”) systems, including, but not limited to, Seller approved compatible hardware, customer activated terminals, integrated and non-integrated EPOS systems, and other requirements necessary to electronically accept and process the Transaction Cards at all times during the term of this Agreement. Buyer shall upgrade the EPOS system with any new release of the software within 9 months after notice from Seller.

(e) Buyer shall execute any applicable Seller agreement relating to the use or access of the EPOS system. In addition, if Seller loans or leases any imprinter, EPOS terminal, or other related equipment to Buyer in connection with acceptance of the Transaction Cards, Buyer shall: (1) comply with the terms of the Guide; (2) execute any applicable Seller agreement relating to the use of such equipment; and (3) reimburse Seller for any charges relating to the use of such equipment (whether third party or internal) incurred by Seller.

(f)   Without limiting any rights or remedies available to Seller, if Buyer fails to comply with this article or the Guide, Seller may limit or terminate Buyer’s or the operator’s right to participate in Seller’s program for Transaction Cards; provided, however, if the failure is technical or immaterial, in Seller’s sole discretion, Seller may provide Buyer or the operator of Buyer’s Outlet, as the case may be, 30 days to correct such failure. Further, Seller may terminate its Transaction Card program at any time upon notice to Buyer.

13.     INSPECTION AND AUDIT. Buyer grants Seller, its agents, and representatives the right to enter the Buyer’s Marketing Premises and Buyer’s Outlets at all reasonable times to inspect the facilities, procedures, and materials being used in connection with the purchase and sale of the Products, to obtain samples of and conduct tests on the Products, to inspect the books and records pertaining to the purchase and sale of the Products, and to audit, observe, and otherwise verify Buyer’s compliance with this Agreement.

14.     TAXES. Buyer shall pay all federal, state, and local taxes, excises, duties, license fees, inspection fees, and other assessments and charges of any kind and nature, now or hereafter levied, (“Taxes”) assessed by any governmental authority, relating to the importation, manufacture, sale, purchase, transportation, storage, resale, or use of the Products insofar as the same is not expressly included in the price for the Products. If Buyer pays directly any Tax normally remitted by Seller, Seller may require proof of payment of such charges from Buyer and may require Buyer to provide a bond or other form of security necessary to protect Seller against loss arising from nonpayment. Buyer shall furnish Seller with satisfactory tax exemption certificates where an exemption is claimed.

15.     WARRANTY AND DISCLAIMER.

16.     CLAIMS.

(a)   Seller will not be liable to Buyer for any defect in quality or shortage in quantity of the Products unless: (1) Buyer gives Seller notice within 2 business days after delivery for shortages and within 4 business days after delivery for quality defects (or 4 business days after discovery if the defect is latent) and (2) Buyer provides Seller with a reasonable opportunity to inspect, take samples, and test the Products that are the subject of the claim.

(b)   Except as set forth in Article 20 or claims relating to indebtedness, or as otherwise specified in this Agreement the parties will not be liable to each other for any other claim arising out of this Agreement unless the claimant provides the other party with written notice of the claim (setting forth fully the facts on which the claim is based) within 180 days after the date on which the claim arose.

17.     COMPLIANCE WITH LAWS.

(a)   Buyer shall comply with all Laws, licenses, and permits relating to its business and, as applicable, the receipt, handling, storage, dispensing, packaging, transportation, labeling, advertising, and sale of the Products at Buyer’s Outlets.

(b)   Without limiting the generality of the foregoing, Buyer shall comply with all Laws relating to unleaded gasoline, oxygenated gasoline, reformulated gasoline, Reid vapor pressure, fuel additives, and diesel fuel as specified in Exhibit D, which Seller may amend from time to time upon written notice to Buyer. Further, if Buyer or any operator of Buyer’s Outlets owns or operates any UST systems (as defined in applicable Laws), Buyer shall comply, and cause the operator to comply, with all applicable Laws governing UST systems, including but not limited to financial responsibility requirements through mechanisms provided for in such Laws such as guarantees, surety bonds, and insurance. Buyer shall also comply with Retailer Inventory Control Program (Exhibit D-1).

1 8.     EXCUSES FOR NON-PERFORMANCE. Both parties will be excused from their obligations under this Agreement (except for financial obligations) to the extent that performance is delayed or prevented by the following matters: circumstances reasonably beyond the parties’ control including, but not limited to, flood, ice storm, snowstorm, or earthquake; fire or explosion; delay or loss of transportation or delivery equipment; mechanical breakdown; strikes or other labor trouble, plant shutdown, riots, or other civil disturbances; or voluntary or involuntary compliance with any Law or request of any governmental authority.

19.     ALLOCATION . If Seller, for any reason, does not have sufficient supplies of the Products to supply its customers, then during any period of short supply Seller may restrict deliveries of the Products to Buyer without liability and may allocate Seller’s supply of the Products among its customers and classes of customers which in Seller’s judgment is fair and reasonable under the circumstances. After cessation of any period of short supply, Buyer and Seller shall promptly resume deliveries and receipts of the Products but shall not be obligated to make up any deliveries or receipts not made because of such period of short supply.

20.     INDEMNITY.

(a)   TO THE EXTENT PERMITTED BY LAW, BUYER SHALL INDEMNIFY AND DEFEND SELLER, ITS MEMBERS, SUBSIDIARIES, AFFILIATES AND JOINT VENTURE PARTNERS, AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (“INDEMNIFIED PARTIES”) AGAINST ALL CLAIMS, DEMANDS, CAUSES OF ACTION, SUITS, DAMAGES, JUDGMENTS, LIENS, PENALTIES, AND EXPENSES, INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND LITIGATION COSTS, WHETHER INCURRED FOR AN INDEMNIFIED PARTY’S PRIMARY DEFENSE OR FOR ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS (COLLECTIVELY, “CLAIM”), INCLUDING, WITHOUT LIMITATION, ANY CLAIM FOR HARM, INJURY, OR DEATH TO ANY PERSON, OR DAMAGE TO PROPERTY OR TO THE ENVIRONMENT ARISING OUT OF OR IN CONNECTION WITH ANY OF THE FOLLOWING MATTERS:

(1)   BUYER’S PERFORMANCE OR NONPERFORMANCE UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, BUYER’S POSSESSION, SALE, TRANSPORTATION, STORAGE, HANDLING, AND USE OF THE PRODUCTS;

(2)   ANY ACTION OR OMISSION OF BUYER OR BUYER’S EMPLOYEES, AGENTS, CONTRACTORS, ASSIGNS, OR THIRD PARTIES; AND

(3)   ANY EVENT OR OCCURRENCE AT OR INVOLVING THE OPERATION OF ANY BUYER’S OUTLET.

(c)   NOTWITHSTANDING BUYER’S OBLIGATIONS IN ARTICLE 20(a), BUYER SHALL INDEMNIFY AND DEFEND THE INDEMNIFIED PARTIES AGAINST ALL CLAIMS ARISING SOLELY AT PLANTS OWNED OR OPERATED BY SELLER BUT ONLY TO THE EXTENT OF THE NEGLIGENCE OF BUYER, BUYER’S EMPLOYEES, AGENTS, OR CONTRACTORS.

(d)   WITHIN A REASONABLE TIME AFTER ANY OCCURRENCE WHICH MAY RESULT IN A CLAIM BUYER SHALL REPORT THE SAME TO SELLER BY TELEPHONE AND SHALL PROMPTLY THEREAFTER CONFIRM THE SAME BY WRITTEN NOTICE, INCLUDING ALL CIRCUMSTANCES THEREOF KNOWN TO BUYER OR THE OPERATORS OF BUYER'S OUTLETS OR THEIR EMPLOYEES.