LOAN AGREEMENT BETWEEN QUAKER STATE CORPORATION
AND
GREASE MONKEY INTERNATIONAL, INC.
THIS LOAN AGREEMENT (hereinafter referred to as the (the "Agreement") is
made as of April 19, 1995 between Quaker State Corporation, a Delaware
--
Corporation, having its principal office in Oil City, Pennsylvania (hereinafter
referred to as "Quaker State") and Grease Monkey International, Inc., a Colorado
Corporation, having its principal office in Denver, Colorado (hereinafter called
"Grease Monkey").
Grease Monkey has applied to Quaker State for a loan of Two Million Four
Hundred Thousand Dollars ($2,400,000) for the purpose of satisfying its previous
loan with Quaker State improving its existing quick lubrication locations,
improving its working capital position, and for the purpose of acquiring
additional locations. Quaker State desires to lend this amount to Grease Monkey,
on the terms and subject to the conditions of this Agreement. In consideration
of the mutual covenants, agreements, representations, and warranties contained
in this Agreement, the Parties agree as follows:
1. LOANS. Subject to the terms and conditions of this Agreement and relying
upon Borrower's representations and warranties herein, Quaker State agrees
to make loans to Borrower from time to time until the expiration date of
this Agreement, in an aggregate principal amount not exceeding Two Million
Four Hundred Thousand Dollars ($2,400,000) during the term of this
Agreement, to be used and disbursed as follows:
(a) Immediately upon the execution of all required documents the sum
necessary to pay off and discharge an existing loan from Quaker State to
Grease Monkey.
Page 1 of 15
(b) Immediately upon the execution of all necessary documents the sum
of Three Hundred Fifty Thousand Dollars ($350,000) for Borrower's current
working capital needs.
(c) Balance of the funds to be available upon Borrower's request and
in accordance with the procedures and terms set forth in this Agreement for
the acquisition or construction of new fast lube centers ("Acquired
Centers") by Borrower with the amount loaned per location not to exceed
100% of the value of the property to be constructed or acquired. An
Acquired Center shall be valued at the lesser of its acquired price or 4.5
times its operating cash flow.
Loans under this Section (c) shall be available to Borrower in
accordance with the payment or purchase terms of the acquisition document
executed by Borrower or in the case of construction by Borrower on an "as
needed" basis with one-third within 30 days prior to construction,
one-third upon completion of the excavation and footing, and one-third upon
the completion of the construction.
All loans shall accrue interest at a nine percent annualized rate and
shall be repaid in quarterly installments of principal and interest over a
ten year period from date of disbursement, and shall be evidenced by
Borrower's promissory notes in form satisfactory to Quaker State. Each loan
for an Acquired Center shall be secured by a first priority, purchase money
mortgage or deed of trust (as appropriate under applicable law) or, in the
case of leased properties, by first priority leasehold mortgage or
conditional lease assignment. The initial loan disbursements under Section
l(a) and l(b) of this Agreement shall be secured by conditional lease
assignments covering the lubrication center properties set forth in
paragraph 5 of this Agreement.
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Borrower acknowledges that loans made under this Agreement shall be ln
lieu of Quaker State's other development and equipment loan programs.
2. LOAN REQUEST PROCEDURES. In order to request a loan Borrower shall
submit a written loan request to Quaker State containing the proposed date
and amount of the loan accompanied by the following documents:
(a) Address of location or locations to be acquired or constructed for
which the loan is requested; and
(b) A title search of the property demonstrating that Borrower holds
or will hold good and marketable title to the property free and clear of
all liens, mortgages, judgments and other encumbrances. In the case of
leased property, Borrower shall provide an executed copy of the lease for
the premises, and proof satisfactory to Quaker State that Borrower holds
good and sufficient leasehold interest in the property, free and clear of
prior liens, mortgages, judgments, or other encumbrances created by
Borrower or its landlord that would have priority over Quaker State's
interest or of title problems or defects with respect to the landlord's
title on such property (Quaker State waives the requirement for landlord
estoppel certificates for those locations set forth in paragraph 5 of this
Agreement which Grease Monkey was unable to provide Quaker State as part of
the previous loan between the parties hereto.); and
(c) Copies of applicable: Occupancy permits, zoning permits, and other
licenses and permits required for occupancy of and operation of the center.
3. INTEREST RATE. The unpaid balance of the loan shall bear interest at a
rate of nine percent (9%) per annum.
4. OPTIONAL PREPAYMENT. Grease Monkey may at its option prepay all loans
made under the terms of this Agreement in whole at any time or in such part
from time to time without penalty or premium. Any such prepayment shall be
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applied to the latest maturity of principal then remaining unpaid. In the
event of the prepayment in part, interest shall accrue only on the unpaid
balance. Upon payment of all loans and all accrued interest thereon Grease
Monkey's purchase obligations under the Fast Lube Supply Contracts shall be
satisfied and the Fast Lube Supply Contracts shall become null and void.
5. SECURITY. In addition to the collateral required by paragraph 1 of this
Agreement the loan shall be secured by conditional assignments of Grease
Monkey's leases covering those properties as identified below and shall be
further secured by a Security Agreement executed by Grease Monkey as debtor
to Quaker State as secured party, granting Quaker State a security interest
in all of the collateral described therein. The Security Agreement shall be
delivered to Quaker State upon execution of this Agreement by Grease Monkey
along with executed UCC 1 forms.
Leasehold interest:
8885 N. Washington 8801 W. Colfax Ave.
Thornton, CO 80229 Lakewood, CO 80215
515 S. Federal Blvd. 50 W. Belleview
Denver, CO 80219 Englewood, CO 80110
1527 Peoria St. 6000 Parkway Drive
Aurora, CO 80010 Commerce City, CO 80037
2495 S. University 6549 S. Broadway
Denver, CO 80210 Littleton, CO 80120
1098 S. Wadsworth 3693 W. Bowles Ave.
Lakewood, CO 80226 Littleton, CO 80123
2890 N. Colorado 1295 S. Colorado
Denver, CO Denver, CO 80222
7005 E. Colfax Ave. 7225 E. Hampden
Denver, CO 80220 Denver, CO 80224
1790 S. Buckley 8450 N. Federal
Aurora, CO 80017 West Minister, CO 80030
7181 N. Pecos
Denver, CO 80220
Page 4 of 15
6. REPRESENTATIONS AND WARRANTIES OF GREASE MONKEY.
(a) Grease Monkey is a corporation, duly organized, validly existing,
and in good standing under the laws of the State of Colorado, has all
necessary corporate powers to own and lease its properties, carry on its
business as now being operated, and is duly qualified to do business, and
is in good standing with the State of Colorado.
(b) Grease Monkey has supplied to Quaker State consolidated audited
balance sheets of Grease Monkey Holding Corporation as of December 31, 1994
and 1993 and related consolidated statements of income and stockholders'
equity for the years ending on those dates. The financial statements
described herein are referred to as the "Financial Statements". The
Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently followed by Grease Monkey
throughout the periods indicated, and fairly present the financial position
of Grease Monkey as of the respective dates of the balance sheets included
in the Financial Statements, and the results of its operations for the
respective period. Except as reflected in the Financial Statements, there
exist no liabilities of Grease Monkey of a type customarily reflected on a
balance sheet in accordance with the generally accepted accounting
principles, contingent or absolute, matured or unmatured.
(c) Except as set forth in Exhibit "A" since the date of the last
audited Financial Statements referred to in the above paragraph there has
not been any change in the financial condition or operation of Grease
Monkey, except changes in the ordinary course of business, which changes
have not in the aggregate been materially adverse.
(d) Grease Monkey has good and valid leases for all of the leases to
be used as collateral for this Agreement, except as may be disclosed to
Quaker State in the Exhibit C provided to Quaker State and as accepted by
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Quaker State prior to the execution of this Agreement. None of the leases
are subject to any prior assignments, conditional or otherwise, or
encumbrances. All leases are free and clear of restrictions or conditions
prohibiting the assignment of the leases as security for this loan. Grease
Monkey has not taken any action or failed to take any action or done
anything that would constitute a default in any of the leases. Grease
Monkey has not received any written or oral notice that it is in default
beyond any period provided for cure under any of the leases and has no
knowledge of any action or proceeding by any of its landlords that could
result in the loss of any of Grease Monkey's leasehold interests that are
to be used as collateral for the loan.
(e) Grease Monkey has maintained, now maintains and shall continue to
maintain insurance on all of its leasehold interests that are to be used as
collateral herein covering property, damage, and loss of income by fire or
other casualty and adequate insurance protection covering all liabilities,
claims, and risks against which it is customary to insure and for amounts
not less than required by the leases. Grease Monkey shall secure from each
of its landlords of Acquired Centers an acknowledgement and estoppel
certificate substantially in a form provided by Quaker State and shall
deliver to Quaker State certificates and estoppels on or before the date of
the closing of this loan.
(f) Except as set forth in Exhibit "B", there is no default or
event that with notice or lapse of time or both that would constitute a
default by Grease Monkey to any lease or agreement relating to the
property of Grease Monkey constituting the collateral hereunder to which
Grease Monkey is a party or by which any of the property of Grease
Monkey constituting the collateral hereunder is bound, and there exists
no contract, a default under which would have a material adverse effect
on the business, property
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or financial condition of Grease Monkey, or which Grease Monkey has or
reasonably should have knowledge. Grease Monkey has not received notice
that any party to any of these agreements intends to cancel or terminate
any of these agreements or to exercise or not to exercise any options under
any of these agreements.
(g) Except as set forth in Exhibit "F" and in the financial
statements, there is no suit, action, arbitration, or legal,
administrative, or other proceeding, order, judgment or decree, or
governmental investigation pending to the best knowledge of Grease Monkey,
against, or affecting Grease Monkey, or any of its businesses, assets or
financial condition that may foreseeably result in a material adverse
impact to such business, assets or financial condition.
(h) The execution and delivery of this Agreement and consummation of
the transactions contemplated by this Agreement will not result or
constitute a default or an event with notice or lapse of time or both,
which would be a default, breech, or violation of the Articles of
Incorporation or Bylaws of Grease Monkey or any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of
trust, or other agreement, instrument, or arrangement to which Grease
Monkey is a party or by which Grease Monkey or the property of Grease
Monkey is bound.
(i) Grease Monkey has the right, power, legal capacity, and authority
to enter into and perform its obligations under this Agreement and the
documents, instruments, and agreements to be executed and delivered
pursuant to this Agreement. All approvals or consents of any landlord,
lender person or entity required for Grease Monkey to enter into and
perform its obligation under the Agreement and documents which shall be
executed and delivered pursuant to this Agreement will be obtained and
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provided to Quaker State. The execution and delivery of this Agreement and
such other documents, instruments, and agreements by Grease Monkey has been
duly authorized by its Board of Directors. The officers of Grease Monkey
executing this Agreement and any note, instrument or agreement required
under this Agreement are duly and properly in office and fully authorized
to execute them.
(j) No event has occurred or would result from the making of the loan
which constitutes an Event of Default as defined in this Agreement or
which, under lapse of time or notice or both, would become such an Event of
Default.
7. Grease Monkey shall deliver to Quaker State in form and detail
reasonably satisfactory to Quaker State as Quaker State may request as soon
as available but no later than one hundred twenty (120) days after the
close of Grease Monkey's fiscal year: copies of Grease Monkey Holding
Corporation's consolidated balance sheet, income statement, and statement
of cash flow certified by an independent public accountant selected by
Grease Monkey and such other documents or statements that Grease Monkey
prepares in the normal course of its business for public distribution or is
required to file by relevant securities laws or regulations.
8. Grease Monkey shall perform such acts as may be necessary or advisable
in the reasonable judgment of Quaker State, to perfect the lien, pledge,
assignment, or security interest provided for in this Agreement or
otherwise to carry out the intent of this Agreement.
9. CONDITIONS TO CLOSING OF LOANS. The following shall constitute
conditions precedent to Quaker State's obligations to make all or any
part of the loans to Borrower:
(a) Delivery of all information required by this Agreement shall have
occurred; and
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(b) No event of default as defined in this Agreement shall have
occurred and be existing; and
(c) Borrower shall have executed and delivered to Quaker State a
promissory note in a form acceptable to Quaker State, a mortgage or
conditional lease assignment in a form satisfactory to Quaker State,
landlord consents, attornment and non-disturbance agreements or estoppel
certificates for all Acquired Centers as deemed necessary or advisable by
Quaker State, an executed supply agreement on Quaker State's standard form
of agreement committing the locations for which the loans are made to
purchase at least 85% of its (or their) requirements of motor oils from
Quaker State for a period of ten years from the date of the loan subject to
earlier termination in the event Borrower pays in full all principal and
accrued interest on all loans made by Quaker State to Borrower; and
(d) All other closing documents shall be in form satisfactory to
Quaker State and its counsel; and
(e) A policy of title insurance insuring Quaker State's interest in
the property as lender shall have been issued by a title insurance company
acceptable to Quaker State which property shall not be subject to any
exceptions or conditions reasonably unacceptable to Quaker State; and
(f) A certified resolution of Borrower's Board of Directors
authorizing the loan and execution of all documents relating thereto shall
be delivered to Quaker State; and
(g) A certificate of Borrower's President certifying that all
representations and warranties as set forth in this Agreement are true and
correct as of the date of the loan; and
(h) A current certificate of Borrower's good standing in the state of
Colorado and of Borrower's authority to conduct business in the state of
Colorado; and
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(i) Quaker State shall be satisfied, in its sole discretion, with
Borrower's credit worthiness at the time of the loan.
10. EVENTS OF DEFAULT. The occurrence of any of the events set forth below
("Events of Default") shall give Quaker State the option to accelerate all
principal and interest remaining on any of the loans which shall become
immediately due and payable, with thirty (30) days written notice of
default, or as otherwise specified in this Agreement. If Quaker State
executes its right to accelerate hereunder, the entire unpaid principal,
together with accrued but unpaid interest, shall, after such exercise, bear
interest at the rate of twelve percent (12%) per annum. The existence of an
Event of Default shall permit, but shall not require, Quaker State to
foreclose upon or otherwise exercise all or any of its rights respecting
any security provided pursuant to this Agreement.
The following shall constitute an Event of Default under this
Agreement:
(a) NON-PAYMENT. Grease Monkey shall fail to pay, within thirty (30)
days after written notice of default of a past due amount, whether by
acceleration or otherwise, any installment of interest or principal or any
other sum payable in accordance with the terms of this Agreement or any
loan document between Grease Monkey and Quaker State, or any amount due and
owing on any product account between Grease Monkey and Quaker State.
(b) FALSE REPRESENTATION OR WARRANTY. Any representation or warranty
by Grease Monkey in this Agreement, in any Financial Statement, in any
Exhibit to this Agreement, or in any loan document, or certificate executed
for this Agreement, or in connection with any transaction contemplated by
this Agreement shall prove to have been false or misleading in any material
respect when made;
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(c) INVOLUNTARY LIEN. An involuntary lien or liens recorded against
any of the leases or other property used as collateral for this loan
including a judgment entered against Grease Monkey and affecting the
leasehold interest and other items used as collateral for the loan in the
aggregate amount exceeding Fifty Thousand Dollars ($50,000) on a claim or
claims not covered by insurance. Grease Monkey shall have ninety (90) days
to remove any such liens and those items set forth on Exhibit C shall be
excluded from this provision.
(d) OTHER DEFAULT. Grease Monkey shall materially breach or default
under any term, condition, representation, or warranty in this Agreement or
any other agreement made at a later date between Grease Monkey and Quaker
State;
(e) DEFAULT IN SUPPLY AGREEMENT OBLIGATIONS. Notwithstanding anything
to the contrary contained herein, if Grease Monkey fails in any one year
contract period to purchase the minimum quantity of Quaker State motor oils
and greases required by a Quaker State Fast Lube Supply Contract, the loan
shall become due and payable at Quaker State's option;
(f) ACTS OF BANKRUPTCY. Grease Monkey shall become insolvent as the
term is defined in the Federal Bankruptcy Code, or shall commit any act of
bankruptcy including the filing of any voluntary petition or action for
relief under any bankruptcy, arrangement, reorganization, insolvency, or
moratorium law or an other law or laws for the relief of or relating to
debtors, or shall with respect to any involuntary petition or action for
relief under such law or laws, file an answer consenting to the relief
requested in the petition.
(g) DEFAULT IN LEASE. Grease Monkey defaults under any of the
provisions of the Leasehold interest to be used as collateral by Quaker
Page 11 0f 15
State for the Loan and said default is not cured within the time allowed by
the terms of the relevant Lease Agreement.
(h) SALE OR MERGER. Any sale of a majority of Grease Monkey's assets
or a change in control of Grease Monkey or any merger of Grease Monkey into
another corporate entity that is a competitor of Quaker State.
11. EXPIRATION. Provided that Grease Monkey is in full compliance with all
the terms and conditions of this Agreement, Grease Monkey may, in
accordance with the terms of this Agreement, request from Quaker State a
disbursement of loan proceeds any time within the 24 consecutive months
effective from the execution of this Agreement. All other terms, conditions
and provisions of this Agreement shall remain in full force and effect
until the full amount of all principal and accrued interest of all loans
made under this Agreement are repaid by Grease Monkey to Quaker State or
its assignee.
12. EFFECTIVE HEADINGS. Subject headings of the articles, sections, and
sub-sections of this Agreement are included for purposes of convenience,
and shall not affect the construction or interpretation of any of the
provisions.
13. ENTIRE AGREEMENT MODIFICATION. This Agreement, together with its
attachments and exhibits, constitutes the entire agreement between the
parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and understanding of
the parties. Except as otherwise provided in this Agreement, no supplement,
modification, or amendment of this Agreement shall be binding unless
executed in writing by both parties: Provided that all promissory notes
hereunder need only be executed by Grease Monkey.
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14. COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one in the same instrument.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants, and agreements herein or in any certificate, or
document provided by Grease Monkey pursuant to this Agreement shall be
deemed material and relied upon by Quaker State, notwithstanding any
investigation made by Quaker State or on Quaker State's behalf, and shall
survive the execution and delivery of this Agreement and all disbursements
made pursuant to this Agreement.
16. ASSIGNMENTS. This Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective successors and assigns;
provided, however, Grease Monkey may not assign any of its rights, duties,
or obligations under the Agreement without prior written consent of Quaker
State.
17. LITIGATION COSTS. If a legal action or arbitration or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any the
provisions of this Agreement or any Loan documents or if Quaker State
incurs any legal expense in protecting its rights under this Agreement or
Document in any legal proceeding, then the prevailing party in such action
shall be entitled to recover reasonable attorneys fees and all other costs
incurred under that action or proceeding, in addition to any other relief
that it may be entitled; or if any promissory note or other evidence of
indebtedness issued hereunder is collected by an attorney after the
occurrence of an Event of Default, with or without suit, Grease Monkey
shall pay reasonable attorneys fees together with all costs and expenses.
Page 13 of 15
18. NOTICES. All notices, requests, demands, and other communication under
this Agreement shall be in writing and shall be deemed effective and duly
given on the date of service and served personally on the party to which
notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given by registered or certified, postage
Quaker State Corporation
255 Elm Street, P. O. Box 989
Oil City, Pennsylvania 16301
Attention R. Scott Keefer, Vice President/Finance
& Chief Financial Officer
Grease Monkey International, Inc.
216 16th Street Mall Suite 1100
Denver, Colorado 80202
Attention: Tim Kershisnik, Controller and Treasurer
19. DELAYS AND WAIVERS. No delay or omission to exercise any right, power,
or remedy accruing to Quaker State on any breach or default of Grease
Monkey under this Agreement shall impair any such right or remedy of Quaker
State, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence in such breach or default occurring later; nor
shall any waiver of any single breach or default be considered a waiver of
any other prior or subsequent breach or default. No course of dealing
between Grease Monkey and Quaker State shall operate as a waiver of any of
Quaker State's rights hereunder; nor shall the disbursement of funds or the
extension of any time or payment during the existence of an Event of
Default constitute a waiver thereof. All remedies, either under this
Agreement or by law or otherwise afforded to Quaker State, shall be
cumulative and not alternative.
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20. FEES AND EXPENSES. Borrower shall be responsible for all reasonable
fees and expenses incurred by Quaker State in making loans pursuant to this
Agreement, including but not limited to appraisal fees, attorney fees,
consultant fees, environmental assessment fees, recording cost, title
insurance premiums, and excise, documentary, mortgage, or stamp fees.
21. CONFIDENTIALITY. Quaker State and Borrower agree not to make any
disclosure of the terms of this Agreement to any party other than those of
their employees who need to know such information in the course of
performance of this Agreement and except as may be required by law unless
such disclosure is approved in writing by the non-disclosing party.
22. GOVERNING LAW. This Agreement shall be construed in accordance with and
be governed by the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed on the
day first above written.
Date: 4-19-95 QUAKER STATE CORPORATION
--------------------
ATTEST:
/s/ Joyce A. McFadden By /s/ Conrad A. Conrad
------------------------------------ -------------------------------
Assistant Corporate Secretary Vice Chairman and
Chief Administrative Officer
Its President, Satellite Companies
-------------------------------
Date: 4-19-95 GREASE MONKEY INTERNATIONAL, INC.
--------------------
ATTEST:
/s/ T. Timothy Kershisnik /s/ Rex L.Utsler
------------------------------------ By -------------------------------
PRESIDENT
Its -------------------------------
Page 15 of 15
EXHIBIT "A"
REPRESENTATION 6(c) CHANGES IN FINANCIAL CONDITION
EXHIBIT "B"
REFERENCE SECTION 6(f) EVENTS OF LEASE DEFAULT
EXHIBIT "C"
SECTION 6(d) DEFECTS IN LEASEHOLD TITLE
EXHIBIT "D"
NOTHING REQUIRED
EXHIBIT "F"
SECTION 6(g) LAWSUITS, ACTIONS OR OTHER PROCEEDINGS - MATERIAL ADVERSE IMPACT
F. L. No. _______
QUAKER STATE CORPORATION
FAST LUBE SUPPLY AGREEMENT
This Agreement, dated the 19TH day of April, 1995, by and between Quaker
State Corporation, Oil City, Pennsylvania, hereinafter called "Quaker State" and
Grease Monkey International, Inc., hereinafter called "Buyer".
Whereas, Buyer conducts a business which provides quick automotive oil
changes to consumers, and Buyer desires to obtain an assured source of supply
for a portion of its needs of motor oil and greases for the said business; and
Whereas, Quaker State is willing to provide a source of supply for Buyer on
the terms and conditions hereinafter set forth.
Now, Therefore, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, Buyer and Quaker State agree as
follows:
1. QUANTITY. During each one-year period while this Agreement is in
effect, commencing the date of this Agreement, Buyer agrees to purchase from
Quaker State, and Quaker State agrees to sell to Buyer, not less than 85% of
Buyer's total requirements of motor oils and grease and Buyer agrees to
feature only Quaker State motor oil as the bulk for resale at its fast lube
facilities at:
8885 N. Washington 8801 W. Colfax Ave.
Thornton, CO 80229 Lakewood, CO 80215
515 S. Federal Blvd. 50 W. Belleview
Denver, CO 80219 Englewood, CO 80110
1527 Peoria St. 6000 Parkway Drive
Aurora, Co 80010 Commerce City, CO 80037
2495 S. University 6549 S. Broadway
Denver, CO 80210 Littleton, CO 80120
1098 S. Wadsworth 3693 W. Bowles Ave.
Lakewood, CO 80226 Littleton, CO 80123
2890 N. Colorado 1295 S. Colorado
Denver, CO Denver, CO 80222
7005 E. Colfax Ave. 7225 E. Hampden
Denver, CO 80220 Denver, CO 80224
1790 S. Buckley 8450 N. Federal
Aurora, CO 80017 West Minister, CO 80030
Page 1 of 4
7181 N. Pecos
Denver, CO 80220
Buyer shall maintain complete and accurate records of its sales at the
above facilities, and Quaker State shall have the right, on an annual basis, to
inspect such records at Buyer's facilities to review compliance with this
covenant.
2. ORDER. The Buyer shall purchase the minimum gallonage by placing its
firm order for the products with a Quaker State Distributor, with a Quaker
State direct sales branch, or directly with Quaker State at Quaker State's
central order number. Such order shall specify the type, quantity and
delivered cost of said products and shall contain such other information as
necessary to ensure proper delivery. Unless otherwise indicated thereon, all
such orders shall be deemed to be for the earliest possible shipment.
3. TERMS OF PAYMENT. Buyer agrees to pay for said oils and greases at
the price reflected on the order form, which shall be the delivered price
agreed upon with the local Quaker State distributor or the suggested
delivered price on the applicable Quaker State price list. Said price lists
shall be subject to change with thirty (30) days written notice. The Buyer
covenants and agrees to pay all invoices for said oil and other products sold
and delivered under this Agreement in cash within thirty (30) days from the
date of invoice, all such invoices for purchases from Quaker State being
subject to a discount of one percent (1%) if paid within ten (10) days from
date of same.
4. SHIPPING TERMS. Deliveries hereunder shall be made from the place of
business of a Quaker State contract distributor or from a Quaker State
refinery or packaging plant. All deliveries are subject to the minimum
quantity provisions contained in the appropriate price list.
5. FORCE MAJEURE. It is agreed that Quaker State and its distributors
shall not be liable for delays or inability to deliver said products on
account of any cause whatsoever beyond its control, including but not limited
to fire, riots, flood, acts of God, accident, strike or work stoppages for
any reason, embargo, government regulation, shortage of crude petroleum or
other products or of transportation facilities, and other causes whether or
not of the same class or kind as specifically named. Should shortages occur
for any reason, Quaker State and its distributors will comply with the
government regulations pertaining to the allocation of said oils and other
products, or in the absence of government regulations, Quaker State and its
distributors may allocate their supply among their customers in such manner
and amount as shall in their judgment fairly allocate the supply among them.
In the event Quaker State or its distributor cannot deliver the minimum
amounts of oils and greases required hereunder, Buyer shall be released from
its obligation to purchase such minimum quantities and shall only be required
to purchase that amount which Quaker State or its distributor can actually
deliver.
6. CONDITION PRECEDENT. It is a severable condition precedent and this
Agreement of Sale is dependent on and subject to the continued performance
thereof, that Buyer will pay according to the terms stated on the appropriate
price list in effect at the time of purchase of all products purchased
hereunder, and that the credit of Buyer will be kept unimpaired and
satisfactory
Page 2 of 4
to Quaker State. In the event that Buyer defaults on any payment due hereunder
or on any payment due Quaker State under any agreement beyond any period
provided for cure or files for bankruptcy, Quaker State may require and the
Buyer shall promptly provide payment in advance of shipment or satisfactory
security to assure payments, and until Buyer so provides, Quaker State or any of
its distributors may defer making shipment of said oil or other products. It is
likewise a severable condition precedent that Buyer not be in default under any
other agreement with Quaker State as default is defined under that Agreement. In
the event Buyer shall fail to keep or comply with the covenants and conditions
herein set forth, Quaker State may deem any of such defaults to be material
nonperformance on the part of the Buyer defeating the purposes of this
Agreement, and at its option may rescind the Agreement by giving notice to the
Buyer and may thereupon terminate all obligations of Quaker State or
distributors for delivery of all products then unshipped. All sums due Quaker
State or its distributors from Buyer shall then become immediately due and
payable. A waiver by Quaker State or its distributor of the performance of any
said condition shall not constitute or be deemed a waiver of strict performance
thereafter. Quaker State agrees to provide Grease Monkey written notice of its
intention to require advance payment for oil and grease shipments or terminate
this Agreement setting forth the reasons for such action by Quaker State and
allowing Grease Monkey thirty (30) days to cure said default in a manner
satisfactory to Quaker State.
7. TRADEMARKS. All Quaker State trademarks, colors, designs and symbols
shall be used only in connection with the sale and identification of Quaker
State branded products. Any other use, including, but not limited to signs,
letterheads, and fast lube promotional materials, requires the prior written
approval of Quaker State. Use of the Quaker State name or marks in an
improper manner or without prior written approval, shall constitute a
material breach of this agreement. This shall be in addition to any other
remedies or damages to which Quaker State may be entitled by virtue of
Buyer's use of the mark.
8. NOTICES. All notices or requests given pursuant to this Agreement
shall be in writing and shall be given by United States mail, postage prepaid
to Quaker State Corporation, P. O. Box 989, Oil City, Pennsylvania 16301,
marked to the attention of the National Account Sales Department, with a copy
thereof mailed to the affected distributor, if any, and notices to the Buyer
shall be mailed in writing to the Buyer at the name and the address as set
forth in the Loan Agreement.
9. RENEWAL AND TERMINATION. This agreement shall become effective upon
execution hereof and shall continue for so long as any amount remains due and
owing to Quaker State under a Loan Agreement dated even date herewith.
During the initial or any extended term of this Agreement, this
Agreement may be terminated only by mutual consent of the parties in writing
or by either party upon material default in the performance of any covenant
herein or in any other agreement between Quaker State and Buyer when such
default remains uncured thirty (30) days following written notice by the
non-breaching party specifying that a default has occurred. In the event
Quaker State should terminate this Agreement by reason of the default or
non-performance by Buyer, Quaker State shall be entitled to recover on demand
all damages incurred by Quaker State as a result of Buyer's default or
non-performance.
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11. ASSIGNMENT. This Agreement is personal to the parties hereto and
neither it nor any rights arising out of it may or can be assigned by either
party, either voluntarily or by operation of law, without the written consent
of the other party, but it shall be binding upon and inure to the successors
of either party.
12. FEES AND COSTS. Buyer and Quaker State agree that, in the event
either party brings any action or proceeding to enforce any of the terms of
this Agreement, the non-prevailing party shall pay the prevailing party on
demand all costs, attorney's fees, and other expenses incurred in such
proceeding, including appeals and post-judgment collection efforts.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Colorado.
Attest: QUAKER STATE CORPORATION
/s/ Joyce A. McFadden By: /s/
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Assistant Corporate Secretary Its: Treasuser
WITNESS: GREASE MONKEY INTERNATIONAL, INC.
/s/ T. Timothy Kershisnik By: /s/ Rex L. Utsler
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Title: PRESIDENT
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