EXHIBIT 10(m)
MASTER SUPPLY CONTRACT
FOR RESALE OF OIL AND GREASES
TO BE SOLD AT
ORIGINAL AND NTG LOCATIONS FUNDED
THROUGH LOANS GUARANTEED BY MOBIL
MOBIL OIL CORPORATION
AND
GREASE MONKEY INTERNATIONAL, INC.
TABLE OF CONTENTS
SECTION PAGE NO.
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1. Products; Quantities......................................................1
2. Term......................................................................1
3. Prices, Terms; Deliveries.................................................2
4. Taxes.....................................................................2
5. Trademarks; Trade Dress; Brand Names; Advertising.........................2
6. Containers................................................................3
7. Product Quality Control...................................................3
8. Claims; Release...........................................................3
9. Contingencies.............................................................3
10. Indemnity.................................................................4
11. Permits...................................................................4
12. Seller's Right to Terminate; Default; Payments Due on Termination.........4
13. Buyer's Right to Terminate................................................5
14. Representations and Assurances............................................6
15. Relation of Seller and Buyer..............................................6
16. Notices...................................................................6
17. Severability..............................................................6
18. Entire Agreement..........................................................6
19. Number of NTG Locations...................................................6
20. Miscellaneous.............................................................7
21. Governing Law.............................................................7
MASTER SUPPLY CONTRACT
FOR
RESALE OF OILS AND GREASES
AT COMPANY OPERATED LOCATIONS AND
AT NTG LOCATIONS FUNDED
THROUGH LOANS GUARANTEED BY MOBIL
THIS SUPPLY CONTRACT is made as of September 11, 1997, between MOBIL
OIL CORPORATION ("Seller"), with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and GREASE MONKEY INTERNATIONAL, INC. ("Buyer"), with offices
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1. PRODUCTS; QUANTITIES. Seller agrees to sell and Buyer agrees to
purchase, on the terms and conditions of this Supply Contract, Mobil products
for: (i) the original company locations listed in Exhibit 2 ("Company
Operated Locations"), and (ii) certain new-to-Grease Monkey quick-lube
locations, which includes acquisitions of existing quick lube locations which
do not feature Mobil products ("NTG Locations") to be added to Exhibit 2 by
mutual agreement of the Parties, which NTG locations will be financed in
connection with the Agreement to Provide Guaranty and Security Agreement
between Seller and Buyer and dated as of September 11, 1997, (the Agreement
to Provide Guaranty and Security Agreement together with all related
documents are referred to in this Supply Contract as the "Guaranty
Agreement"). The Original Locations and NTG Locations are collectively
referred to as the "Grease Monkey Locations."
Buyer agrees to: (i) feature Mobil 1 synthetic and Mobil bulk
lubricants at all Company Operated Locations, and (ii) purchase an average of
approximately 230,000 gallons per year of Mobil lubricants for all Company
Operated Locations but no less than 2,300,000 gallons must be purchased for
the Company Locations over a ten-year period. Buyer further agrees to: (i)
feature Mobil I synthetic and Mobil bulk lubricants at all NTG Locations, the
required gallons of Mobil lubricants per year over a period of ten (10) years
for each NTG Location (there will be multiple NTG Locations and multiple ten
(10) year periods, each ten (10) year period begins at the time that each NTG
Location opens for business) such that for each $2.58 borrowed, 10 gallons
must be purchased by each NTG over each ten-year period. All NTG Locations
will begin operations within the first four (4) years of the term of this
Supply Contract. Buyer also agrees that twelve percent (12%) of all purchases
will be Mobil 1.
Purchase obligations are measured beginning on the opening day for
each NTG Location and ending ten years thereafter.
For this Supply Contract, 8 pounds of grease equals 1 gallon of oil.
As used in this Supply Contract, the terms "Seller's product" and "Mobil
lubricants" are used interchangeably.
A list of Mobil lubricants to be purchased by Buyer is set forth on
Exhibit 1, attached to and made part of this Supply Contract. Mobil lubricants,
grades, trademarks, and packaging shall be those marketed and used by Seller at
times of deliveries for similar buyers in Buyer's area, all as determined by
Seller. Seller may change the grade, specifications, characteristics, delivery
package, brand name, or other distinctive designation of any of Seller's product
and such products as so changed shall remain subject to this Supply Contract.
2. TERM. The term of this Supply Contract shall vary for the different
locations covered by this Supply Contract. For NTG Locations, the term shall
begin on the date such NTG location opens for business. For the
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Company Operated Locations, the term shall begin __________. In either case,
the term shall end upon the later to occur of: (i) the purchase of the volume
requirements for that location (or, in the case of the Company Operated
Locations, for all such locations), and (ii) final payment of any amounts
outstanding under any of the Promissory Notes (as defined in the Agreement to
Provide Guaranty and Reimbursement Agreement among Mobil Oil, Mobil and
Grease Monkey associated with that location.
3. PRICES, TERMS; DELIVERIES.
(a) PRICES. Initial prices of Seller's products are set forth on
Exhibit 1. Prices are prior to taxes and include delivery to Buyer's location
but exclude any loan guaranty service charge that may be due under the
Guaranty Agreement.
(b) TERMS OF PAYMENT. Net 30 days. Cash discounts, if any, are not
applicable to taxes, freight charges, or container charges. Seller shall
forward invoices for Mobil products purchased by individual Grease Monkey
Locations to Buyer for payment within 30 days.
(c) DELIVERIES. Deliveries of Mobil products shall be made by
Seller's authorized distributors, selected by Seller in its sole discretion,
and shall be promptly received by Buyer. Minimum orders for bulk Mobil
products is 500 gallons; minimum orders for packaged Mobil products (drums
and pails) is 63 gallons.
Title to, and all risk of loss of or damage to any of Seller's
products shipped to Buyer passes to Buyer at the delivery point. Seller's
products are received by Buyer when delivered to Buyer at the delivery point
specified by the ordering Grease Monkey Location.
If Buyer defaults in the payment of any indebtedness to Seller, in
addition to any other rights it may have, Seller may immediately change the
terms of payment and may suspend deliveries of all of Seller's products and
apply any funds that Buyer may have on deposit in Seller's custody to the
payment of the indebtedness.
(d) PRICE ADJUSTMENT. Seller may adjust the price or terms of
payment for Seller's products at any time by giving Buyer at least thirty
(30) days written notice.
4. TAXES. The amount of any present or future governmental tax, fee,
duty or other imposition (not included in the price or otherwise paid by
Buyer) on or measured by: (a) this Supply Contract; (b) Seller's products or
constituent materials covered by this Supply Contract; or (c) the
manufacture, sale, use, transportation or handling of Seller's products or
materials, shall be paid by Buyer to Seller, unless Buyer is required by law
to make payments directly to the governmental taxing unit. Any and all
exemptions from taxes claimed by Buyer are set forth on Exhibit 3.
5. TRADEMARKS; TRADE DRESS; BRAND NAMES; ADVERTISING. Buyer shall
use Seller's trademarks, trade dress, and brand names ("Trademarks") to
identify and advertise Seller's products. The Trademarks shall not be used
for any other purposes, or in any manner that may confuse or deceive the
public.
Buyer shall not mix any other products with Mobil products or
adulterate them in any way, and shall not use the Trademarks in connection
with the storage, handling, dispensing, or sale of any adulterated, mixed or
substituted Mobil products. Seller may take samples from Buyer's tanks to
ensure product integrity.
All advertising, including color schemes, of Seller's products are
subject to Seller's approval. Any violation of the provisions of this
Paragraph 5 gives Seller the right to immediately terminate this Supply
Contract. On any termination of this Supply Contract, Buyer shall immediately
discontinue: (a) referring to Seller, (b) using Seller's color schemes,
Trademarks and slogan, (c) advertising Seller's products, (d) return to
Seller, at no cost to Seller, all signs, advertising and promotional material
in Buyer's possession, and (e) repay all
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amounts owing to Mobil in accordance with Section 12(c) of this Supply
Contract.
Buyer acknowledges that in addition to any applicable monetary or
other damages, injunctive relief is also an appropriate remedy for Buyer's
violation of this Paragraph 5. Buyer agrees to pay Seller's reasonable
attorney fees if Seller institutes legal action to enforce any provisions of
this Paragraph 5.
6. CONTAINERS. All containers on which Seller charges a deposit
($20.00 deposit on drums) remain Seller's property, must be used only for the
original contents, and must be returned when empty, freight collect, to the
point from which Seller shipped the product to the Buyer, or other location
as may be designated by Seller from time to time. If Seller maintains a
regular pick-up service in Buyer's area, Seller may collect containers on
notice from Buyer.
Deposit charges are payable without discount when payments for the
contents are due. Deposit charges are refundable if the containers are
returned in their delivered condition, less ordinary wear, within ninety (90)
days after delivery. If containers are not returned, Seller may retain the
deposit charges in settlement for the containers and expenses.
7. PRODUCT QUALITY CONTROL. Buyer has a duty to protect the quality
of products delivered to it by Seller or Seller's authorized distributors.
8. CLAIMS; RELEASE. Seller has no liability for any defect in
quality, or shortage in quantity, of any of Seller's products delivered
unless Buyer gives Seller or Seller's authorized distributor notice of
Buyer's claim within: (a) two (2) days after delivery for shortages in
quantity of Seller's products, or (b) within four (4) days after delivery for
quality deficiencies, and further provides Seller with a reasonable
opportunity to inspect Seller's products and take test samples.
Any other claim by Buyer of any kind, based on or arising out of
this Supply Contract or otherwise, is waived and barred unless Seller is
given written notice within one hundred eighty (180) days after the event,
action, or inaction to which the claim relates. Further, any claim is waived
by Buyer and barred unless asserted by the commencement of an action within
twelve (12) months after the event, action, or inaction to which the claim
relates. Seller is not liable for prospective profits or special, indirect,
or consequential damage.
9. CONTINGENCIES. Seller shall not be liable for loss, damage, or
demurrage due to any delay or failure to perform:
(a) because of compliance with any action, order, direction,
request, or control of any governmental authority; or
(b) when the supply or purchase of Seller's products or any facility
of production, manufacture, storage, transportation, distribution, or
delivery is interrupted, unavailable, or inadequate because of wars,
hostilities, public disorders, acts of enemies, sabotage, strikes, lockouts,
labor or employment difficulties, fires, floods, acts of God, accidents or
breakdowns, plant shutdowns for repairs, maintenance or inspection, weather
conditions, or for any other cause which Seller determines is beyond the
party's reasonable control when acting in good faith and in the ordinary
course of business, whether or not similar to any of the foregoing (a "Force
Majeure Event") provided that Seller has made good-faith efforts to secure an
alternative source of supply.
Seller is not required to remove any cause or replace the affected
source of supply or facility if it involves material additional expense or a
material departure from normal practices.
If, for any cause, there is, or Seller believes in its reasonable
opinion there may be, a shortage of supplies, for whatever reason, so that
Seller is or may be unable to meet the demands of all of its customers of all
kinds,
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Seller may allocate to and among its customers in each class of trade
quantities of product as Seller determines in the exercise of its ordinary
business judgment it has available for distribution to that class of trade
from any given terminal or point of supply, provided that Seller's plan of
allocation shall not unreasonably discriminate between Buyer and Seller's
other customers in that class of trade.
Seller shall not be required to make up any deliveries or quantities
omitted under the provisions of this Paragraph 9, including but not limited
to, deliveries or quantities omitted pursuant to Seller's right to allocate
Seller's products among its customers, nor shall Seller be liable for any
damages or losses in connection with omitted deliveries or quantities.
In all instances when a decision or determination of Seller is
referred to in this Paragraph 9, the decision or determination shall be made
in Seller's sole and absolute discretion acting in the ordinary course of
business.
10. INDEMNITY. Buyer shall defend and indemnify Seller, and its
agents, servants, employees, successors, and assigns from:
(i) any fines, penalties, charges, or expenses, for violations
of any law, ordinance or regulation, caused by any act or omission,
whether negligent or otherwise, of such Buyer or its agents,
servants, employees, or others under it; and
(ii) any claims, losses, liability, suits, liens and expenses
for death, personal injury, property damage, or any other injury or
claim arising out of the use, occupancy, operation, services offered
by, or maintenance of Buyer's NTG locations (including adjacent
sidewalks, drives, and curbs), lubrication equipment, or Buyer's
other businesses by Buyer or any of its operators, lessees, agents,
contractors, employees, customers, or others under it.
The provisions of Paragraphs 8 and 10 survive any termination or
nonrenewal of this Supply Contract, however arising.
11. PERMITS. Buyer must obtain all required permits and licenses in
connection with its operation of the Grease Monkey Locations and must comply
in all material respects with all applicable governmental laws and
regulations.
12. SELLER'S RIGHT TO TERMINATE; DEFAULT; PAYMENTS DUE ON TERMINATION.
(a) If Buyer or any Grease Monkey Location is in material default
under this Supply Contract, or under any other agreement between the parties:
(i) Seller may suspend deliveries (to the Grease Monkey Location in default)
during the default; and (ii) Seller shall provide notice of default to Buyer
and Buyer shall have thirty (30) days to cure such default. Thereafter, if
the default continues, Seller may terminate this Supply Contract with respect
to the Grease Monkey Location in default and the payment provisions in
section 12(b) and 12(c) shall apply.
(b) Upon providing written notice to Buyer, Seller may immediately
terminate this Supply Contract (with respect to one or more Grease Monkey
Locations) upon the occurrence of one or more of the following events:
(i) Buyer or Grease Monkey Location's material failure to comply
with the provisions of Section 5 of this Supply Contract;
(ii) except in circumstances where Seller is unable to deliver
product to a specific Grease Monkey Location by reason of a Force
Majeure Event, the non-Mobil inventory of lubricants at a Grease
Monkey
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Location constitutes more than 15% of that Grease Monkey Location's
total inventory of lubricants;
(iii) a Grease Monkey Location(s) is closed for more than 7
days except by reason of a Force Majeure Event;
(iv) a Grease Monkey Location(s) does not materially meet its
purchase obligations as set forth in this Supply Contract;
(v) a sale or transfer of a Grease Monkey Location occurs other
than those transfers permitted by the Guaranty Agreement;
(vi) without Mobil's prior written consent, more than 30% of
the voting shares or other form of ownership and control of Grease
Monkey Holding Corporation, of which GMI is a wholly owned
subsidiary is sold or transferred to a party that Mobil considers to
be a direct competitor;
(vii) Buyer becomes insolvent; an insolvency, receivership or
bankruptcy proceeding is commenced by or against Buyer; or Buyer
makes an assignment for the benefit of creditors;
(viii) Buyer attempts to assign or otherwise transfer its
interest in this Agreement in contravention of the terms of Section
20; or
(ix) Mobil Corporation is required to pay under the Guaranty
Agreement or related documents.
On or prior to the effective date of any termination (partial or
whole) of this Supply Contract, funds owed by Buyer to Seller with respect to
the affected Grease Monkey Location(s), including: (i) payments due Seller
under the Guaranty Agreement, (ii) amounts owing Seller for Buyer's purchases
of Seller's products, and (iii) any other amounts outstanding shall become
immediately due and payable to Seller.
(c) It is understood that Mobil is relying on sales to Buyer of
Mobil lubricants in quantities and percentages set forth in Section I and
that any termination of this Supply Contract or failure to purchase those
quantities and percentages of Mobil lubricants will result in serious losses
to Mobil. Buyer and Mobil acknowledge that the amount of those losses is and
will be difficult to determine. It is agreed, therefore, that upon any
termination of this Supply Contract, in whole or with respect to a specific
location, Buyer shall pay to Mobil, as liquidated damages to compensate for
such losses, fifteen cents ($0.15) per gallon multiplied by the excess of the
number of gallons of Mobil lubricants that are required to be purchased over
the term of this Agreement pursuant to Section 1 for the affected locations,
over the number of gallons actually purchased prior to such termination.
Buyer may terminate certain locations as allowed by the Agreement to Provide
Guaranty without incurring any liquidated damages pursuant to this Section
12. The damages here liquidated are confined to losses resulting from
termination of this Supply Contract and shall not affect such other rights
and remedies Mobil may have under this Supply Contract and under applicable
law.
13. BUYER'S RIGHT TO TERMINATE.
(a) If Seller defaults under this Supply Contract, Buyer shall
provide written notice to Seller and Seller shall have sixty (60) days to
cure such default. Thereafter, if the default continues, Buyer may terminate
this Supply Contract upon providing thirty (30) days written notice to Seller
and the payment provision in Section 12(c) of this Supply Contract shall not
apply.
(b) Buyer may terminate this Supply Contract upon providing ninety
(90) days prior written notice to Seller. Prior to the effective date of
termination, Buyer agrees to: (i) make all payments due Seller under the
Guaranty Agreement and related documents to Seller, (ii) make all payments
owing Seller for Buyer's purchases
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of Seller's products, (iii) pay any other amounts outstanding, and (iv) pay
liquidated damages set forth in Section 12(c).
14. REPRESENTATIONS AND ASSURANCES. Seller is entering into this
Supply Contract in reliance on Buyer's qualifications and representation to
Seller of its desire to operate the Grease Monkey Locations selling Mobil
products. Buyer acknowledges that its conduct impacts Mobil's products,
trademarks, and other Mobil retailers, distributors, and dealers; therefore,
Buyer agrees to conduct its business in a manner that maintains and enhances
public acceptance of Mobil products, trademarks, and Mobil retailers,
distributors, and dealers.
At all times, Buyer shall keep visible and legible Seller's logos,
signs and trademarks used in connection with the sale of Mobil products
inside of Buyer's Grease Monkey Locations, unless otherwise agreed upon by
the Buyer and Seller. Seller shall not require Buyer to display Seller's
logo, signs or trademarks in violation of Buyer's graphic standards contained
in Buyer's corporate identity guide.
15. RELATION OF SELLER AND BUYER. Buyer and Seller are independent
businesses, and nothing in this Supply Contract creates any right in Seller
or Buyer to exercise any control over, or to direct in any respect, the
conduct or management of the other party's business, subject only to each
party's performance of their respective obligations set forth in this Supply
Contract. Neither Buyer nor any person performing work at the Grease Monkey
Locations for, or on behalf of, Buyer shall be considered as an employee or
agent of Seller.
16. NOTICES. All notices under this Supply Contract, except those
under Paragraph 6, must be in writing and delivered personally or sent by
certified mail to the address set forth below unless changed by notice.
Notice by mail is effective 3 days from the postmark date.
Address for Seller: Mobil Oil Corporation
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: _______________
With a copy to: Mobil Oil Corporation
Customer Support Center
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Address for Buyer: Grease Monkey International, Inc.
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Financial and Legal Departments
17. SEVERABILITY. If any provision or any portion of this Supply
Contract or the application of it to any person or circumstance is finally
determined by a court of competent jurisdiction to be invalid or
unenforceable, the invalidity or unenforceability shall not affect the other
provisions of this Supply Contract.
18. ENTIRE AGREEMENT. This instrument (including the documents
referred to in this instrument and documents incorporated herein) contains
the entire agreement covering the subject matter, and supersedes any prior
discussions between the parties relating to the subject matter of this Supply
Contract. THERE ARE NO ORAL UNDERSTANDINGS, REPRESENTATIONS OR WARRANTIES
AFFECTING THIS SUPPLY CONTRACT WHICH ARE NOT FULLY SET FORTH IN THIS SUPPLY
CONTRACT.
19. NUMBER OF NTG LOCATIONS. Buyer and Seller acknowledge that the
number of NTG Locations may change during the term of this Supply Contract
requiring additions or deletions to the number and location of NTG
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Locations serviced by particular Mobil distributors and time for Seller to
prepare the necessary administrative connections so that deleted or added NTG
Locations will be properly serviced. Buyer agrees to provide timely
notification of such events to Seller, enabling Seller to accommodate such
changes.
20. MISCELLANEOUS. Any attempt to assign this Supply Contract by
Buyer without obtaining Seller's prior written consent is void and
constitutes a default of this Supply Contract. The headings of the paragraphs
of this Supply Contract are for convenience only and do not limit, amplify,
or otherwise affect its terms and conditions. Seller's right to require
strict performance shall not be affected by any previous waiver or course of
dealing. Modifications to this Supply Contract must be in writing and signed
by an authorized representative of each party.
21. GOVERNING LAW. This Supply Contract shall be construed and
enforced in accordance with the laws of the Commonwealth of Virginia, without
giving effect to its rules on the conflicts of laws. The parties to this
Supply Contract irrevocably submit to the exclusive jurisdiction of the
United States District Court for the Eastern District of Virginia, for all
purposes of this Supply Contract, except for those matters over which said
Court does not have subject matter jurisdiction in which case the parties
irrevocably submit to the exclusive jurisdiction of the Circuit Court of the
County of Fairfax, Commonwealth of Virginia.
EXECUTED as of the date first above written.
WITNESSES: MOBIL OIL CORPORATION
/s/ ▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: General Manager, Lubes Business
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GREASE MONKEY INTERNATIONAL, INC.
/s/ T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Its: President and CEO
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