EXHIBIT 10.9
INDEMNITY GUARANTEE
This Agreement is made this 29th day of January, 2003 between NPC INC.,
a Colorado corporation ("NPC"), and FLYING J INC., a Utah corporation ("FJI").
1. Recital. Flying J Oil and Gas Inc., all of the capital stock of
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which is owned by FJI, and Big West Oil & Gas Inc., all of the capital stock
of which is owned by Flying J Oil and Gas Inc., are together the "Seller" under
a Purchase and Sale Agreement dated December 13, 2002, (the "PSA") with NPC as
the "Buyer" and with St. Mary Land & Exploration Company ("St. Mary") also a
party thereto.
2. Guarantee of FJI. (a) In consideration for NPC and St. Mary entering
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into and performing the PSA, FJI hereby agrees upon demand to guarantee and
perform the indemnification and related obligations of the Seller in favor of
the Buyer, and to be jointly and severally liable therefor with the Seller,
under Sections 8.03(b) and 8.03(d) of the PSA as fully with respect to such
Sections as if FJI were a party to the PSA. Notwithstanding anything to the
contrary contained in the foregoing, the obligation of FJI with respect to
Section 8.03(d) shall be subject to the dollar thresholds set forth in such
Section to the same extent as such thresholds apply to the Seller and in the
same manner as if FJI and the Seller were a single party.
(b) THE INDEMNIFICATION PROVIDED FOR IN SUBPARAGRAPH (a) ABOVE SHALL BE
APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION
ARISE SOLELY OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE
OR OTHER FAULT OF NPC OR ST. MARY. NPC AND FJI ACKNOWLEDGE THAT THIS STATEMENT
COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.
3. Survival. The obligations of FJI under this Agreement shall survive
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the Closing under the PSA, subject to the same provisions applicable to the
liability of the Seller under Section 8.06 of the PSA.
4. Representation of FJI. FJI represents and warrants to NPC that the
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execution, delivery and performance of this Agreement have been duly and validly
authorized by all requisite action on the part of FJI and that this Agreement
constitutes the legal and valid obligation of FJI fully enforceable in
accordance with its terms. The performance of this Agreement will not violate,
nor be in conflict with, any provision of FJI's governing documents or any
agreement or instrument to which FJI is a party or to which it is bound or any
judgment, decree, order, statute, rule or regulation applicable to FJI.
5. Notices. Any communications under this Agreement shall be in writing
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and shall be effective when received by mail, telecopy or hand delivery as
follows:
If to FJI:
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Flying J Inc.
1104 Country Hills Drive
Ogden, Utah 84403
Attn: Mr. Barre Burgon, General Counsel
Telephone: 801-624-1402
Telecopy: 801-624-1263
If to NPC:
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NPC Inc.
550 N. 31st Street, Suite 500
Billings, Montana 59101
Attn: Mr. Ron Santi, Vice President - Land
Telephone: 406-245-6248
Telecopy: 406-245-9106
With a copy to:
St. Mary Land & Exploration Company
1776 Lincoln St., Suite 700
Denver, Colorado 80203
Attn: Milam Randolph Pharo, Vice President,
Land & Legal
Telephone: 303-863-4313
Telecopy: 303-863-1040
6. Benefit. This Agreement shall be binding upon and shall inure to the
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benefit of NPC and FJI and their respective successors and assigns, provided
that FJI may not assign or delegate any portion of its obligations under this
Agreement without the prior written consent of NPC, which consent shall not be
unreasonably withheld.
7. Limited Application. Except as set forth in this Agreement, FJI
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shall not be obligated under or be a party to the PSA.
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Executed as of the day first above written.
NPC INC.
By: /s/ RONALD B. SANTI
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Ronald B. Santi, Vice President -
Land
FLYING J INC.
By: /s/ PHIL ADAMS
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Phil Adams
President
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