RETAIL SALES
AGREEMENT
This Retail
Sales Agreement, dated December 20, 2006 is between Arizona Fuel
Distributors, L.L.C., (the “Supplier”) and Bowlin
Travel Centers, Inc. (the “Retailer”).
1. Introduction .
Supplier has the right to sell gasoline and diesel fuels (hereafter
referred to as “Motor Fuels”) for resale under the
trade or brand names of Mobil (“Mobil). Retailer desires to
enter into this agreement in order to obtain the right to sell such
Motor Fuels under the Mobil Trade and brand names (hereinafter
referred to as the “Proprietary Marks”). Retailer has
independently investigated the business risks involved herein and
such other matters as Retailer deems important and has not relied
on any representation not set forth herein.
2. Sale .
Supplier agrees to sell and deliver or cause to be delivered, and
Retailer agrees to buy, receive and pay for Motor Fuels of the
kind, grade, brand and quality generally sold by Supplier within 7
days of delivery, for resale at Retailer’s place of business
located at: 16543 East Camino Adelante, Picacho, AZ 85241
(hereinafter referred to as the “Retail Location”).
During the term hereof, Retailer shall not purchase or sell Motor
Fuels at the Retail Location other than those purchased from
Supplier pursuant hereto.
3. Term . The
term of the Agreement is ten years from commencement date and shall
continue on a month to month basis unless terminated by the
Retailer. Retailer may terminate this Agreement after the term has
expired by giving thirty days advance written notice to the
supplier. Commencement date is the day on which retailer receives
his first delivery of Mobil Motor Fuel from Arizona Fuel
Distributors, L.L.C.
4. Prices .
Prices for all Motor Fuels sold to Retailer hereunder shall be
Supplier’s published applicable price in effect on the date
of delivery. Such prices may be obtained by contacting Supplier.
All prices are subject to change without notice. All deliveries
shall be invoiced and paid on Net 10 days via EFT, subject to
credit approval.
5. Proprietary
Marks . Retailer shall sell the Motor Fuels only under the
Mobil Proprietary Marks and shall have the right to use such
Proprietary Marks as are designated by Supplier, but only for the
purpose of properly identifying and advertising Motor Fuels handled
by Retailer, and in a manner and form satisfactory to Supplier in
Supplier’s sole judgment.
Retailer will
not allow or permit any of the Motor Fuels to be sold which are
mislabeled, misbranded or contaminated by mixture or adulteration
with each other or with any other material or motor fuel. Retailer
will not commingle any substance with Motor Fuel and then sell it
as a Motor Fuel. Retailer will not allow or permit the sale of any
product or Motor Fuel under any Proprietary Mark which is not a
Mobil brand product or Motor Fuel, or which is a grade of Mobil
brand product or Motor Fuel other than described by the label or
designation; nor will Retailer use the Proprietary Marks in a
manner which deceives or causes a likelihood of confusion to the
motoring public. Retailer will allow Supplier, its employees,
agents or designees, to enter the Retail Location at any time
during normal business hours of Retailer to obtain such samples, or
conduct such tests or inspections as may, in Supplier’s
judgment, be reasonably required to determine that Retailer is
complying with the aforesaid obligations. Retailer shall cooperate
with Supplier in any investigation or any alleged violations of
such obligations.
Retailer agrees
to submit a monthly Certification Statement showing inventories,
deliveries, and meter readings to verify that all Motor Fuels sold
at Retailers location under the Proprietary Marks was in fact
purchased from Arizona Fuel Distributors, L.L.C. This Certification
Statement will be completed and mailed to Arizona Fuel
Distributors, L.L.C. by the 15th of the following month.
6. Environmental
Compliance .
(A)
Retailer represents and warrants that all of its equipment used for
storage and handling of motor fuels meets applicable regulations
including, but not limited to, federal and state environmental leak
detention requirements and standards, and is capable of safely
handling motor fuels without leaking. Retailer agrees that it will
undertake its best efforts to ensure that equipment used for
storage and handling of motor fuels meets all applicable
regulations and that its employees will institute inventory
controls substantially similar to those set forth below. Supplier
shall have the right to make periodic assessments of
Retailer’s facilities for the purpose of evaluating their
capabilities to safely use, handle and store Suppliers motor
fuels.
(B)
Retailer understands and acknowledges that the leakage of motor
fuels from storage tanks is a concern and that operators of retail
facilities where motor fuels are stored must take diligent and
continual precautions to discover and stop any such leakage.
Retailer agrees to keep and reconcile inventory records to indicate
motor fuel losses. These records shall be maintained for each
operating day and shall include the following information for each
grade of type of motor fuel:
(1)
opening physical inventory, (2) sales, (3) fuel used other than
sold, (4) receipts, (5) closing Physical inventory, and (6)
variation (over or under). Retailer shall keep all records of
purchases and sales including, but not limited to, sales tax
records, product invoices and bills of lading.
(C)
Retailer shall comply with the Federal Inventory
Program.
(D) Retailer agrees to inspect motor
fuel storage and handling facilities and surrounding areas at least
once a week for indication of possible leakage. This inspection
should include, but is not limited to the following areas: (1)
around and under fuel dispensers, (2) inside remote pump access
boxes, (3) inside fuel fill boxes, (4) storage tank diked areas,
(5) transport truck loading and unloading areas, (6) pumps and
piping, and (7) low areas, such as sumps, hillsides or
culverts.
(E) The
inventory controls required by this Section 6 shall apply to all
equipment used for storage and handling of motor fuels, regardless
of legal title to the equipment. Retailer further agrees that it
shall not list Supplier as the registered owner of any storage tank
with any governmental agency without the prior written consent of
Supplier.
(F)
Pollution control will be maintained by Retailer in connection with
all operations by it. Retailer shall immediately report any spill
or release as required by any federal, state, or local
law.
(G)
Retailer shall cooperate with Supplier to facilitate the
dissemination of any environmental, health and safety information
from Supplier to all persons whom Retailer can reasonably foresee
may be exposed to possible hazards from the products sold under
this prescribed by Supplier, including but not limited to Material
Safety Sheets, dispenser decals, portable container labels, fueling
area signs, and information leaflets.
7. Termination .
In addition to any other rights of termination which Supplier may
have, upon the occurrence of any of the following events, which
events the parties agree are both reasonable and of material
significance to the relationship hereunder, or upon such other
grounds as are allowed under the Petroleum Marketing Practices Act,
15 U.S.C. Section 2801, et seq., as amended from time, Supplier may
terminate this Agreement:
(A) If retailer fails to observe
Supplier’s reasonable rules, regulations, and requirements
set forth in this agreement in effect at the delivery point at
which delivery is made;
(B) Upon
default in the payment of any sum when due hereunder in the event
any such payment is not made when due, Supplier may also at its
option suspend making all further deliveries of all Motor Fuels
until Retailer’s indebtedness is paid in full. The right to
suspend deliveries does not operate as a waiver of Supplier’s
right of termination for Retailer’s failure to pay for Motor
Fuel when due and the obligation to pay for Motor Fuel delivered
shall not be subject to offset for any claims against Supplier
except for non-delivery of Motor Fuel billed to
Retailer;
(C) If
Retailer, its employees, agents or invitees, violate the covenants
of or fail to comply with any of the provisions of Paragraph 6,
Environmental Compliance;
(D) If
Retailer violated or fails to comply with the minimum standards as
required by the provisions of Paragraph 9, Minimum
Standards;
(E) If
Retailer fails to take reasonable action to satisfy customer
complaints as set forth in Paragraph 11, Customer
Complaints;
(F) If
Retailer fails to comply with any applicable laws, ordinances,
regulations, judicial or administrative orders, or other legal
requirements of all governmental authorities, federal, state,
municipal or other authority, pertaining to this Agreement and the
loading, unloading, storage, transportation and sale of petroleum
products. Termination of agreement cannot occur if Retailer is in
litigation, contesting or appealing such failure of compliance in
good faith;
(G) If Retailer fails to maintain the
quality integrity of Mobil brand Motor Fuels as set forth in
Paragraph 5, Proprietary Marks;
(H)
Retailer shall not sell, assign, give, grant, devise or otherwise
dispose of Retailer’s interests in this Agreement, without
the prior written approval of Supplier; Supplier’s written
approval shall not be unreasonably withheld or delayed.
(I) If
bankruptcy or insolvency proceedings are begun by or against
Retailer under the Bankruptcy Code or if Retailer becomes
insolvent;
(J) Upon
any breach of any of the terms, covenants, warranties, agreements
or conditions of the Agreement or any other agreement that may be
in effect between the parties pertaining to this
facility;
(K) If
retailer makes or furnishes any false or misleading statement, or
if Retailer fails to disclose information to Supplier, its agents
or employees, concerning any material fact for the purpose of
inducing Supplier to make any payment, to deliver Motor Fuels, to
extend or continue to extend or increase credit or to issue any
credit memorandum to Retailer or to any other party acting in
concert with Retailer;
(L) If
the Retailer fails to comply with the provisions of Paragraph 19,
Health and Safety Information;
Retailer shall
not suffer, permit or allow the occurrence of any of the events
enumerated in Subparagraphs (A) through (L) above. The occurrence
of any of the events enumerated in Subparagraphs (A) through (L)
above of this Termination Paragraph shall constitute a failure by
Retailer to comply with a provision of this Agreement which is both
reasonable and of material significance to the relationship between
Supplier and Retailer and shall constitute good cause to cancel or
terminate this Agreement as the term “good cause” or
any similar term is or may be used in any federal or state statute
effecting the rights of the parties to terminate this Agreement.
Supplier’s rights of termination for good cause as defined
above shall not in any way be affected by any previous waiver,
forbearance or course of dealing.
8. Market
Withdrawal . In the event Supplier elects to withdraw from the
marketing of Motor Fuels in the area of the Retail Location,
pursuant to the provisions of the Petroleum Marketing Practices
Act, 15 U.S.C. Section 2801, et. Seq., as the same may be amended
from time to time, Supplier may terminate this Agreement at any
time without further liability upon one hundred eighty (180) days
written notice thereof to Retailer may, at any time thereafter,
terminate this Agreement prior to the expiration of such 180-day
period effective upon delivery of written notice thereof to
Supplier.
9. Mobil
Identification and Minimum Standards . It is understood and
agreed by Retailer that Supplier does not control the signs,
brands, trademarks, or trade name Mobil has the right to disallow
the use of the name Mobil or sale of its products if the retail
facilities which Retailer operates do not comply with the
provisions hereunder.
Retailer
recognizes that it is in the interest of the parties to this
Agreement for Retailer to affirmatively conduct its business to
reflect favorably on the parties and to further promote public
acceptance of Mobil Motor Fuels and its trademarks, brand names and
trade dress (collectively “Identification”).
Retailer shall
have the right to use certain Identification of Mobil, but only for
the purpose of properly identifying and advertising Mobil brand
Motor Fuels handled by Retailer through Mobil-branded retail
outlets and in a manner and form satisfactory to Supplier and Mobil
in Suppliers