AGREEMENT AND PLAN OF REORGANIZATION
among
AMERICAN TRADING AND PRODUCTION CORPORATION
and
AMERICAN TRADING REAL ESTATE COMPANY, INC.
and
GATEWAY GATHERING AND MARKETING COMPANY
and
ATAPCO, INC.
Dated as of December 8, 1998
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. General . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Terms Defined Elsewhere in this Agreement . . 23
SECTION 1.3. References; Interpretation . . . . . . . . . . 24
ARTICLE II. THE REORGANIZATION . . . . . . . . . . . . . . . . . . . 24
SECTION 2.1. The Reorganization -General . . . . . . . . . 24
SECTION 2.2. The Share Exchanges . . . . . . . . . . . . . 24
ARTICLE III. VALUATION; POST-EXCHANGE DATE ADJUSTMENTS . . . . . . . 26
SECTION 3.1. Valuation . . . . . . . . . . . . . . . . . . 26
SECTION 3.2. First Adjusted Crown Central Valuation . . . . 26
SECTION 3.3. Second Adjusted Crown Central Valuation . . . 26
SECTION 3.4. Vantage/Interstate Exchange . . . . . . . . . 27
ARTICLE IV. COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . 28
SECTION 4.1. Information Statement and Consents;
Securities Laws . . . . . . . . . . . . . . 28
SECTION 4.2. Employee Matters . . . . . . . . . . . . . . . 28
SECTION 4.3. Certain Licenses and Permits . . . . . . . . . 29
SECTION 4.4. Transfer of Agreements . . . . . . . . . . . . 29
SECTION 4.5. Split Dollar Insurance . . . . . . . . . . . . 30
SECTION 4.6. Cash Payments . . . . . . . . . . . . . . . . 31
SECTION 4.7. Placement of Assets . . . . . . . . . . . . . 31
SECTION 4.8. Resignations . . . . . . . . . . . . . . . . . 31
SECTION 4.9. Directors as of the Effective Time . . . . . . 31
SECTION 4.10. Xxxxxxx; Baltimore Management . . . . . . . . 32
SECTION 4.11. Charters . . . . . . . . . . . . . . . . . . 32
SECTION 4.12. No Appraisal Rights . . . . . . . . . . . . . 32
SECTION 4.13. Other Transactions . . . . . . . . . . . . . 32
SECTION 4.14. Conduct of Business Prior to Exchange
Date . . . . . . . . . . . . . . . . . . . 32
SECTION 4.15. Directors' and Officers' Indemnification
and Insurance . . . . . . . . . . . . . . . 32
SECTION 4.16. Year 2000 . . . . . . . . . . . . . . . . . . 33
SECTION 4.17. Shared Assets . . . . . . . . . . . . . . . . 33
SECTION 4.18. Further Assurances . . . . . . . . . . . . . 33
SECTION 4.19. Limited Representations or Warranties . . . . 33
SECTION 4.20. Guarantees . . . . . . . . . . . . . . . . . 34
SECTION 4.21. Witness Services . . . . . . . . . . . . . . 35
SECTION 4.22. Compliance with IRS Ruling . . . . . . . . . 35
i
SECTION 4.23. Transfers Not Effected Prior to the
Share Exchanges; Transfers Deemed
Effective as of the Exchange Date . . . . 37
SECTION 4.24. Conveyancing and Assumption Instruments . . . 37
SECTION 4.25. Ancillary Agreements . . . . . . . . . . . . 37
SECTION 4.26. Preparation of Audited Balance Sheets . . . . 37
SECTION 4.27. Unpaid Senior Notes. . . . . . . . . . . . . 38
SECTION 4.28. Lease Liability Adjustments . . . . . . . . . 38
ARTICLE V. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 38
SECTION 5.1. Conditions to the ATAPCO Merger and Share
Exchanges . . . . . . . . . . . . . . . . . 38
ARTICLE VI. SHARED LIABILITIES AND INDEMNIFICATION . . . . . . . . . 40
SECTION 6.1. Shared Liability Account . . . . . . . . . . . 40
SECTION 6.2. Payment of Shared Liabilities from Shared
Liability Account . . . . . . . . . . . . . 41
SECTION 6.3. Other Provisions Regarding Shared
Liabilities . . . . . . . . . . . . . . . . 41
SECTION 6.4. Indemnification Obligations . . . . . . . . . 42
SECTION 6.5. Procedures for Indemnification With
Respect to Third Party Claims . . . . . . . 42
SECTION 6.6. Procedures for Third Party Claims That
Are for Shared Liabilities . . . . . . . . . 44
SECTION 6.7. Indemnification and Contribution Payments . . 45
SECTION 6.8. Tax Treatment of Indemnification and
Contribution Payments . . . . . . . . . . . 45
ARTICLE VII. ACCESS TO INFORMATION . . . . . . . . . . . . . . . . . 45
SECTION 7.1. Provision of Corporate Records . . . . . . . . 45
SECTION 7.2. Access to Information . . . . . . . . . . . . 46
SECTION 7.3. Reimbursement; Other Matters . . . . . . . . . 46
SECTION 7.4. Confidentiality . . . . . . . . . . . . . . . 46
SECTION 7.5. Privileged Matters . . . . . . . . . . . . . . 47
SECTION 7.6. Ownership of Information . . . . . . . . . . . 49
SECTION 7.7. Limitation of Liability . . . . . . . . . . . 49
SECTION 7.8. Other Agreements Providing for Exchange
of Information . . . . . . . . . . . . . . . 49
ARTICLE VIII. ADMINISTRATIVE SERVICES . . . . . . . . . . . . . . . 49
SECTION 8.1. Performance of Services . . . . . . . . . . . 49
SECTION 8.2. Independence . . . . . . . . . . . . . . . . . 50
ii
ARTICLE IX. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . 50
SECTION 9.1. Negotiation . . . . . . . . . . . . . . . . . 50
SECTION 9.2. Arbitration . . . . . . . . . . . . . . . . . 50
SECTION 9.3. Continuity of Service and Performance . . . . 51
ARTICLE X. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.1. Policies and Rights Included Within
Assets . . . . . . . . . . . . . . . . . . 51
SECTION 10.2. Post-Exchange Date Claims . . . . . . . . . . 52
SECTION 10.3. Administration; Other Matters . . . . . . . . 54
SECTION 10.4. Agreement for Waiver of Conflict and
Shared Defense . . . . . . . . . . . . . . 55
SECTION 10.5. Cooperation . . . . . . . . . . . . . . . . . 55
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.1. Complete Agreement; Construction . . . . . . 56
SECTION 11.2. Ancillary Agreements . . . . . . . . . . . . 56
SECTION 11.3. Counterparts . . . . . . . . . . . . . . . . 56
SECTION 11.4. Survival of Agreements . . . . . . . . . . . 56
SECTION 11.5. Expenses . . . . . . . . . . . . . . . . . . 56
SECTION 11.6. Notices . . . . . . . . . . . . . . . . . . . 56
SECTION 11.7. Waivers . . . . . . . . . . . . . . . . . . . 58
SECTION 11.8. Amendments . . . . . . . . . . . . . . . . . 58
SECTION 11.9. Assignment . . . . . . . . . . . . . . . . . 58
SECTION 11.10. Successors and Assigns . . . . . . . . . . . 59
SECTION 11.11. Termination . . . . . . . . . . . . . . . . 59
SECTION 11.12. Subsidiaries . . . . . . . . . . . . . . . . 59
SECTION 11.13. Third Party Beneficiaries . . . . . . . . . 59
SECTION 11.14. Title and Headings . . . . . . . . . . . . . 59
SECTION 11.15. Schedules . . . . . . . . . . . . . . . . . 59
SECTION 11.16. GOVERNING LAW . . . . . . . . . . . . . . . 59
SECTION 11.17. Consent to Jurisdiction . . . . . . . . . . 60
SECTION 11.18. Severability . . . . . . . . . . . . . . . . 60
Exhibit A Agreement and Plan of Merger between American Trading
and Production Corporation and Atapco, Inc.
Exhibit B Agreement and Plan of Merger between American Trading
Real Estate Properties, Inc. and Atapco, Inc.
iii
Schedules to Agreement and Plan of Reorganization
Schedule Description
1.1(d) Aggregate Valuation
1.1(o)(i) ATRECO Assets
1.1(p) ATRECO Group Balance Sheet
1.1(q) Description of ATRECO Real Estate Business
1.1(s) ATRECO Form of Consent, Letter of Representations and
Power of Attorney
1.1(t)(i) ATRECO Group Contracts
1.1(u) Business Entities Comprising the ATRECO Group
1.1(w)(i) Exceptions to ATRECO Liabilities
1.1(ac) Members of ATRECO Stockholder Group
1.1(ah)(i) Baltimore Management Assets
1.1(ai) Baltimore Management Group Balance Sheet
1.1 (aj) Baltimore Management Business
1.1(ak)(i) Baltimore Management Group Contracts
1.1(al) Business Entities Comprising Baltimore Management Group
1.1(aq)(i) Xxxxxxx Assets
1.1(ar) Xxxxxxx Group Balance Sheet
1.1(at)(i) Xxxxxxx Group Contracts
1.1(au) Business Entities Comprising the Xxxxxxx Group
1.1(ba) Conveyancing and Assumption Instruments
1.1(bf)(i) Gateway Assets
1.1(bg) Gateway Group Balance Sheet
1.1(bh) Description of Gateway Business
1.1(bj) Gateway Form of Consent, Letter of Representations and
Power of Attorney
1.1(bk)(i) Gateway Group Contracts
1.1(bl) Business Entities Comprising the Gateway Group
1.1(bn)(i) Exceptions to Gateway Liabilities
1.1(bt) Members of Gateway Stockholder Group
1.1(ce)(i) New ATAPCO Assets
1.1(cf) New ATAPCO Group Balance Sheet
1.1(cg) Description of New ATAPCO Real Estate Business
1.1(ch) New ATAPCO Consent, Letter of Representations and Power
of Attorney
1.1(ci)(i) New ATAPCO Group Contracts
1.1(cj) Business Entities Comprising the New ATAPCO Group
1.1(cl)(i) Exceptions to New ATAPCO Liabilities
1.1(cq) Members of New ATAPCO Stockholder Group
2.1(a) Reorganization Steps
iv
4.2(a)(i) New ATAPCO Employees
4.2(a)(ii) ATRECO Employees
4.2(a)(iii) Gateway Employees
4.2(a)(iv) Xxxxxxx Employees
4.2(a)(v) Baltimore Management Employees
4.3(a)(i) New ATAPCO Licenses and Permits
4.3(a)(ii) ATRECO Licenses and Permits
4.3(a)(iii) Gateway Licenses and Permits
4.3(a)(iv) Xxxxxxx Licenses and Permits
4.3(a)(v) Baltimore Management Licenses and Permits
4.5 Allocation of Split Dollar Asset and AFR Loan
Receivable
4.6(a) ATAPCO Debt
4.9 Directors of AI, ATRECO and Gateway
4.10(a) Xxxxxxx Limited Liability Company Agreement
4.10(b) Baltimore Management Limited Liability Company
Agreement
4.11(a) ATRECO Charter
4.11(b) Gateway Charter
4.11(c) AI Certificate of Incorporation
4.17 Shared Assets
4.20(a)(i) Guarantees of ATRECO and Gateway Liabilities by New
ATAPCO
4.20(b) Guarantees of New ATAPCO and Gateway Liabilities by
ATRECO
4.20(c) Guarantees of New ATAPCO and ATRECO Liabilities by
Gateway
4.20(e) Guarantees of Xxxxxxx and Baltimore Management
Liabilities
5.1(i) Certification of Satisfaction or Waiver of Conditions
7.7(b) Continuing Agreements Between or Among the Parties
v
____________________
[FN]
Pursuant to the terms of this Agreement, the Schedules will be
finalized prior to the Effective Time (as defined herein) and
thus are not attached hereto.
vi
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 8, 1998
(this "Agreement"), by and among AMERICAN TRADING AND PRODUCTION CORPORATION,
a Maryland corporation ("ATAPCO"), AMERICAN TRADING REAL ESTATE COMPANY,
INC., a Maryland corporation ("ATRECO"), GATEWAY GATHERING AND MARKETING
COMPANY, a Maryland corporation ("GATEWAY"), and ATAPCO, INC., a Delaware
corporation ("AI").
WHEREAS, ATRECO, Gateway and AI are indirect or direct wholly-owned
subsidiaries of ATAPCO;
WHEREAS, ATAPCO, acting through its direct and indirect
subsidiaries, currently conducts a number of businesses, including, without
limitation, (i) real estate ownership, management and development (the "Real
Estate Business"), (ii) oil and gas exploration and production, and oil and
gas gathering, marketing and trading, (iii) commercial sound and
communications product manufacturing and distribution (the "Atlas/Soundolier
Business"), (iv) office products manufacturing and distribution (the "OPG
Business"), (v) domestic and international distribution of proprietary
electronic access control systems (the "Northern Computers Business") and
(vi) the manufacture, sale and installation of high-quality amplifiers and
electronic devices (the "Millbank Electronics Business");
WHEREAS, ATAPCO indirectly holds substantial investment assets,
including, without limitation, (i) shares of common stock of Amoco
Corporation (the "Amoco Common Stock"), (ii) shares of common stock of First
Union Corporation (the "First Union Common Stock"), (iii) shares of common
stock of Capital One Financial Corporation (the "Capital One Common Stock")
(the Amoco Common Stock, the First Union Common Stock and the Capital One
Common Stock are collectively referred to herein as the "Principal Common
Stock Investments"), (iv) shares of class A common stock ("Crown Central
Class A Common Stock") and shares of class B common stock ("Crown Central
Class B Common Stock" and collectively with the Crown Central Class A Common
Stock, the "Crown Central Common Stock") of Crown Central Petroleum
Corporation ("Crown Central"), and (v) shares of common stock of ISA
International Plc (the "ISA International Common Stock");
WHEREAS, the Board of Directors of ATAPCO has determined that it is
appropriate, desirable and in the best interests of the holders of shares of
the ATAPCO Common Stock (as defined herein) to consummate the transactions
contemplated herein;
WHEREAS, each of ATAPCO, ATRECO, Gateway and AI has determined that
it is necessary and desirable to set forth the transactions required to
effect the Reorganization (as defined herein) and to set forth other
agreements that will govern certain other matters.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, and intending to be
legally bound hereby, ATAPCO, ATRECO, Gateway and AI agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. General. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or any
arbitrator.
(b) "Administrative Services Agreement" shall mean the Administrative
Services Agreement to be entered into among Baltimore Management, ATAPCO, AI,
ATRECO, Gateway, and Xxxxxxx.
(c) "Affiliate" shall mean, when used with respect to a specified
Person, another Person that controls, is controlled by, or is under common
control with the Person specified. As used in this Section 1.1(c), "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities or other interests, by contract or
otherwise.
(d) "Aggregate Valuation" shall mean the aggregate value as set forth
on Schedule 1.1(d) of those Assets of the ATAPCO Group described on Schedule
1.1(d), as adjusted in accordance with Section 3.1.
(e) "Ancillary Agreements" shall mean the Conveyancing and Assumption
Agreements, the Employee Benefits Agreement, the Intellectual Property
Agreement, the Tax Allocation Agreement, the Administrative Services
Agreement and the Amended and Restated Limited Liability Company Agreements
for Xxxxxxx and Baltimore Management.
(f) "Assets" shall mean assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected
or required to be recorded or reflected on the books and records or financial
statements of any Person, including, without limitation, the following:
(i) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc, magnetic tape
or any other form;
(ii) all apparatus, computers and other electronic data processing
equipment, fixtures, machinery, equipment, furniture, office
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equipment, automobiles, trucks, aircraft and other transportation
equipment, special and general tools, test devices, prototypes and
models and other tangible personal property;
(iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
(iv) all interests in real property of whatever nature, including
easements, whether as owner, mortgagee or holder of a Security
Interest in real property, lessor, sublessor, lessee, sublessee or
otherwise;
(v) all interests in any capital stock or other equity interests
of any Subsidiary or any other Person, all bonds, notes, debentures
or other securities issued by any Subsidiary or any other Person,
all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person and all other
investments in securities of any Person;
(vi) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services,
unfilled orders for the manufacture and sale of products and other
contracts, agreements or commitments;
(vii) all deposits, letters of credit and performance and
surety bonds;
(viii) all written technical information, data, specifications,
research and development information, engineering drawings,
operating and maintenance manuals, and materials and analyses
prepared by consultants and other third parties;
(ix) all domestic and foreign patents, copyrights, trade names,
trademarks, service marks and registrations and applications for
any of the foregoing, mask works, trade secrets, inventions, data
bases, other proprietary information and licenses from third
Persons granting the right to use any of the foregoing;
(x) all computer applications, programs and other software,
including operating software, network software, firmware,
middleware, design software, design tools, systems documentation
and instructions;
(xi) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists,
customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and specifications,
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quality records and reports and other books, records, studies,
surveys, reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other accounts
and notes receivable;
(xiii) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any Asset,
all rights in connection with any bids or offers and all claims,
choses in action or similar rights, whether accrued or contingent;
(xiv) all rights under Policies and all rights in the nature of
insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and authorizations which have
been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap, collar,
cap or other hedging or similar agreements or arrangements.
(g) "ATAPCO" shall mean American Trading and Production Corporation, a
Maryland corporation (and any successor thereto, including AI), prior to the
Effective Time.
(h) "ATAPCO Class A Common Stock" shall mean the Class A common stock,
without par value, of ATAPCO.
(i) "ATAPCO Class B Common Stock" shall mean the Class B common stock,
without par value, of ATAPCO.
(j) "ATAPCO Common Stock" shall mean collectively the ATAPCO Class A
Common Stock and the ATAPCO Class B Common Stock.
(k) "ATAPCO Group" shall mean ATAPCO, its Subsidiaries and any
predecessors thereto, as in existence at or at any time within one year prior
to the Effective Time for all purposes other than Section 1.1(cw), for which
purpose only, it shall mean ATAPCO, its Subsidiaries and any predecessors
thereto, as in existence at or at any time prior to the Effective Time.
(l) "ATAPCO Merger" shall mean the merger of ATAPCO with and into AI,
with AI as the surviving corporation, as more fully described in the ATAPCO
Merger Agreement and in Schedule 2.1(a).
(m) "ATAPCO Merger Agreement" shall mean the Agreement and Plan of
Merger, substantially in the form attached hereto as Exhibit A, providing for
the ATAPCO Merger.
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(n) "ATRECO" shall mean American Trading Real Estate Company, Inc., a
Maryland corporation.
(o) "ATRECO Assets" shall mean:
(i) 62% of any Asset relating to the swap transaction involving
Corporate Value Partners, LLC and NationsBank, N.A. and those
Assets identified on Schedule 1.1(o)(i) hereto, all such Assets
expressly intended by this Agreement to be held and owned by
members of the ATRECO Group immediately following the Effective
Time;
(ii) subject to Article X, any rights of any member of the ATRECO
Group under any of the ATRECO Policies and the ATRECO Shared
Policies, including any rights thereunder arising after the
Exchange Date in respect of any Policies that are occurrence
Policies with respect to occurrences that occur prior to the
Effective Time;
(iii) any ATRECO Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent rights or
claims primarily relating to or arising from any ATRECO Asset or
the ATRECO Business;
(iv) any Assets reflected on the ATRECO Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
Gateway and its Subsidiaries) primarily relating to or used in the
ATRECO Business. The intention of this clause (v) is only to
rectify any inadvertent omission of transfer or conveyance of any
Asset that, had the parties given specific consideration to such
Asset as of the date hereof, would have otherwise been classified
as an ATRECO Asset. No Asset shall be deemed to be an ATRECO Asset
solely as a result of this clause (v) if such Asset is within the
category or type of Asset expressly covered by the subject matter
of an Ancillary Agreement. In addition, no Asset shall be deemed an
ATRECO Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by ATRECO on or prior to the first
anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the ATRECO Assets
shall in any event exclude any and all Assets that are expressly
contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Assets to be retained by or
transferred to any member of the New ATAPCO Group, the Gateway
Group, the Xxxxxxx Group or the Baltimore Management Group.
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In the event of any inconsistency or conflict which may arise in
the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not an
ATRECO Asset, any item explicitly included on Schedule 1.1(o)(i)
shall take priority over any provision of the text hereof.
(p) "ATRECO Balance Sheet" shall mean the audited consolidated balance
sheet of the ATRECO Group as of the Exchange Date immediately following the
Effective Time, including the notes thereto, to be prepared pursuant to
Section 4.26 in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied. For information purposes only, an
unaudited pro forma consolidated balance sheet of the ATRECO Group as of June
30, 1998, is set forth as Schedule 1.1(p) hereto.
(q) "ATRECO Business" shall mean that portion of the Real Estate
Business described in Schedule 1.1(q).
(r) "ATRECO Common Stock" shall mean the common stock, par value $.01
per share, of ATRECO.
(s) "ATRECO Consent, Letter of Representations and Power of Attorney"
shall mean a written consent, letter of representations and power of attorney
substantially in the form attached hereto as Schedule 1.1(s).
(t) "ATRECO Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by which
ATAPCO or any of its Subsidiaries or any of their respective Assets is bound,
whether or not in writing, except for any such contract or agreement that is
expressly contemplated to be transferred or assigned to, or retained by, any
member of the New ATAPCO Group, the Gateway Group, the Xxxxxxx Group or the
Baltimore Management Group, in each case, pursuant to any provision of this
Agreement or any Ancillary Agreement:
(i) any contract or agreement listed or described on Schedule
1.1(t)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the ATRECO Group to the extent related to the ATRECO Business or
the ATRECO Assets;
(iii) any contract or agreement that relates primarily to the
ATRECO Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to, or retained by, any
member of the ATRECO Group; and
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(v) any guarantee, indemnity, representation or warranty of any
division, business unit or member of the ATRECO Group to the extent
related to the ATRECO Business or the ATRECO Assets.
(u) "ATRECO Group" shall mean, immediately following the Effective
Time, ATRECO and each Subsidiary of ATAPCO which is a Subsidiary of ATRECO
immediately following the Effective Time as identified on Schedule 1.1(u)
hereto, which Schedule also indicates the amount of ATRECO's ownership
interest therein.
(v) "ATRECO Indemnitees" shall mean each member of the ATRECO Group,
each of their respective directors, officers, employees and agents and each
of the heirs, executors, successors and assigns of any of the foregoing.
(w) "ATRECO Liabilities" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(w)(i), (y) any employee-related Liabilities that are
subject to the Employee Benefits Agreement, and (z) any Taxes that
are subject to the Tax Allocation Agreement) primarily relating to,
arising out of or resulting from:
(A) the operation of the ATRECO Business, as conducted at any
time prior to, on or after the Exchange Date (including any
Liability relating to, arising out of or resulting from any
act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to
act is or was within such Person's authority)); or
(B) the operation at any time after the Effective Time of any
business conducted by ATRECO or any Subsidiary of ATRECO
(including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not
such act or failure to act is or was within such Person's
authority));
(ii) any Liability of ATRECO in respect of its portion of the split
dollar insurance Assets described in Section 4.5 following the
Effective Time;
(iii) subject to Section 4.28 hereof, 31.58% (which shall be
increased to 33.33% from and following the date Xxxxxxx ceases to
use office space in The Xxxxxxxxx Building) of the total costs
incurred following the Effective Time under ATAPCO's and ATREPO's
existing leases for the office space on the 14th, 23rd and 24th
floors in The Xxxxxxxxx Building and 100% of the total costs
incurred following the Effective Time in connection with parking
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spaces used in the parking garages of the Xxxxxxxxx Building and/or
the X.X. Xxxxx Building by employees of ATRECO;
(iv) 62% of any Liability relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank, N.A.;
(v) any other Liability specifically identified as an "ATRECO
Liability" elsewhere in this Agreement or in any Ancillary
Agreement; and
(vi) 37.925% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (vi), the ATRECO
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be retained or assumed by any
member of the New ATAPCO Group, the Gateway Group, the Xxxxxxx
Group or the Baltimore Management Group; or
(y) all agreements and obligations of any member of the New
ATAPCO Group, the Gateway Group, the Xxxxxxx Group or the
Baltimore Management Group under this Agreement or any of the
Ancillary Agreements to be performed after the Effective Time.
(x) "ATRECO Percentage" shall mean 37.925%.
(y) "ATRECO Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of ATAPCO or any Subsidiary of ATAPCO
immediately prior to the Effective Time which relate to the ATRECO Business
but do not relate to the New ATAPCO Business, the Gateway Business, the
Xxxxxxx Business or the Baltimore Management Business.
(z) "ATRECO Share Exchange" shall mean the exchange at the Effective
Time of shares of ATRECO Common Stock for all of the shares of ATAPCO Common
Stock held by the ATRECO Stockholders, as more fully described in Section
2.2.
(aa) "ATRECO Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary of
ATAPCO immediately prior to the Effective Time which relate in part to the
ATRECO Business and in part to the New ATAPCO, Gateway, Baltimore Management
or Xxxxxxx Businesses.
(ab) "ATRECO Stockholder" shall mean any member of the ATRECO
Stockholder Group.
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(ac) "ATRECO Stockholder Group" shall mean the ATAPCO stockholders set
forth on Schedule 1.1(ac).
(ad) "ATREPO" shall mean American Trading Real Estate Properties, Inc.,
a Maryland corporation.
(ae) "ATREPO Merger" shall mean the merger of ATREPO with and into AI,
with AI as the surviving corporation, as more fully described in the ATREPO
Merger Agreement.
(af) "ATREPO Merger Agreement" shall mean the Agreement and Plan of
Merger, substantially in the form attached hereto as Exhibit B, providing for
the ATREPO Merger.
(ag) "Baltimore Management" shall mean Baltimore Management Services,
LLC, a Maryland limited liability company.
(ah) "Baltimore Management Assets" shall mean:
(i) those Assets identified on Schedule 1.1(ah)(i) hereto, all
such Assets expressly intended by this Agreement to be held and
owned by members of the Baltimore Management Group immediately
following the Effective Time;
(ii) subject to Article X, any rights of any member of the
Baltimore Management Group under any of the Baltimore Management
Policies and the Baltimore Management Shared Policies, including
any rights thereunder arising after the Exchange Date in respect of
any Policies that are occurrence Policies, with respect to
occurrences that occur prior to the Effective Time;
(iii) any Baltimore Management Contracts, any rights or claims
arising thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any
Baltimore Management Asset or Baltimore Management Business;
(iv) any Assets reflected on the Baltimore Management Balance Sheet
or the accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to or
used in the Baltimore Management Business. The intention of this
clause (v) is only to rectify any inadvertent omission of transfer
or conveyance of any Asset that, had the parties given specific
consideration to such Asset as of the date hereof, would have
otherwise been classified as a Baltimore Management Asset. No
Asset shall be deemed to be a Baltimore Management Asset solely as
a result of this clause if such Asset is within the category or
-9-
type of Asset expressly covered by the subject matter of an
Ancillary Agreement. In addition, no Asset shall be deemed a
Baltimore Management Asset solely as a result of this clause (v)
unless a claim with respect thereto is made by Baltimore Management
or on behalf of Baltimore Management by New ATAPCO, ATRECO or
Gateway on or prior to the first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the Baltimore
Management Assets shall in any event exclude any and all Assets
that are expressly contemplated by this Agreement or any Ancillary
Agreement (or the Schedules hereto or thereto) as Assets to be
retained by or transferred to any member of the New ATAPCO Group,
the ATRECO Group, the Gateway Group or the Xxxxxxx Group.
In the event of any inconsistency or conflict which may arise in
the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not a
Baltimore Management Asset, any item explicitly included on
Schedule 1.1(ah)(i) shall take priority over any provision of the
text hereof.
(ai) "Baltimore Management Balance Sheet" shall mean the consolidated
balance sheet of the Baltimore Management Group as of the Exchange Date
immediately following the Effective Time, including the notes thereto, to be
prepared pursuant to Section 4.26 in accordance with GAAP consistently
applied. For information purposes only, an unaudited pro forma consolidated
balance sheet of the Baltimore Management Group as of June 30, 1998, is set
forth as Schedule 1.1(ai) hereto.
(aj) "Baltimore Management Business" shall be as set forth on Schedule
1.1(aj).
(ak) "Baltimore Management Contracts" shall mean the following contracts
and agreements to which ATAPCO or any of its Subsidiaries is a party or by
which ATAPCO or any of its Subsidiaries or any of their respective Assets is
bound, whether or not in writing, except for any such contract or agreement
that is expressly contemplated to be transferred or assigned to any member of
the New ATAPCO Group, the ATRECO Group, the Gateway Group or the Xxxxxxx
Group, in each case, pursuant to any provision of this Agreement or any
Ancillary Agreement:
(i) any contracts or agreements listed or described on Schedule
1.1(ak)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the Baltimore Management Group to the extent related to the
Baltimore Management Business or the Baltimore Management Assets;
-10-
(iii) any contract or agreement that relates primarily to the
Baltimore Management Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to, or retained by, any
member of the Baltimore Management Group; and
(v) any guarantee, indemnity, representation or warranty of any
division, business unit or member of the Baltimore Management Group
to the extent related to the Baltimore Management Business or the
Baltimore Management Assets.
(al) "Baltimore Management Group" shall mean, immediately following the
Effective Time, Baltimore Management and each Subsidiary of ATAPCO which is a
Subsidiary of Baltimore Management immediately following the Effective Time
as identified on Schedule 1.1(al) hereto, which Schedule also indicates the
amount of Baltimore Management's interest therein.
(am) "Baltimore Management Liabilities" shall mean:
(i) all Liabilities (except (x) any employee-related Liabilities
that are subject to the Employee Benefits Agreement and (y) any
Taxes that are subject to the Tax Allocation Agreement) primarily
relating to, arising out of or resulting from:
(A) the operation of the Baltimore Management Business
(including, without limitation, the performance by Baltimore
Management pursuant to Article VIII hereof of certain
administrative services), as conducted at any time prior to,
on or after the Exchange Date (including any Liability
relating to, arising out of or resulting from any act or
failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is
or was within such Person's authority)); or
(B) the operation at any time after the Effective Time of any
business conducted by Baltimore Management or any Subsidiary
of Baltimore Management (including any Liability relating to,
arising out of or resulting from any act or failure to act by
any director, officer, employee, agent or representative
(whether or not such act or failure to act is or was within
such Person's authority));
(ii) any other Liability specifically identified as a "Baltimore
Management Liability" elsewhere in this Agreement or in any
Ancillary Agreement; and
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(iii) subject to Section 4.28 hereof, 29.68% of the total costs
incurred following the Effective Time under ATAPCO's and ATREPO's
existing leases for the office space on the 14th, 23rd and 24th
floors in The Xxxxxxxxx Building, 100% of the total costs incurred
following the Effective Time under ATAPCO's and ATRECO's existing
leases for the storage space in the basements of The Xxxxxxxxx
Building and the X.X. Xxxxx Building, and 100% of the total costs
incurred following the Effective Time in connection with parking
spaces used in the parking garages of The Xxxxxxxxx Building and/or
the X.X. Xxxxx Building by employees of Baltimore Management.
Notwithstanding the foregoing clauses (i) to (iii), the Baltimore
Management Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be retained or assumed by any
member of the New ATAPCO Group, the ATRECO Group, the Gateway
Group or the Xxxxxxx Group; or
(y) all agreements and obligations of any member of the New
ATAPCO Group, the ATRECO Group, the Gateway Group or the
Xxxxxxx Group under this Agreement or any of the Ancillary
Agreements to be performed after the Effective Time.
(an) "Baltimore Management Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate to
the Baltimore Management Business but do not relate to the New ATAPCO
Business, the ATRECO Business, the Gateway Business or the Xxxxxxx Business.
(ao) "Baltimore Management Shared Policies" shall mean all Policies,
current or past, which are owned or maintained by or on behalf of ATAPCO or
any Subsidiary of ATAPCO immediately prior to the Effective Time which relate
in part to the Baltimore Management Business and in part to the New ATAPCO,
ATRECO, Gateway or Xxxxxxx Businesses.
(ap) "Xxxxxxx" shall mean Xxxxxxx Holdings, LLC, a Maryland limited
liability company.
(aq) "Xxxxxxx Assets" shall mean any Asset of ATAPCO or any Subsidiary
of ATAPCO that is not an ATRECO Asset, a Baltimore Management Asset, a
Gateway Asset or a New ATAPCO Asset, including but not limited to:
(i) those Assets identified on Schedule 1.1(aq)(i) hereto, all
such Assets expressly intended by this Agreement to be held and
owned by members of the Xxxxxxx Group immediately following the
Effective Time;
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(ii) subject to Article X, any rights of any member of the Xxxxxxx
Group under any of the Xxxxxxx Policies or Xxxxxxx Shared Policies,
including any rights thereunder arising after the Exchange Date in
respect of any Policies that are occurrence Policies with respect
to occurrences that are prior to the Effective Time;
(iii) any Xxxxxxx Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent rights or
claims primarily relating to or arising from any Xxxxxxx Asset or
Xxxxxxx Business;
(iv) any Assets reflected on the Xxxxxxx Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to or
used in the Xxxxxxx Business. The intention of this clause (v) is
only to rectify any inadvertent omission of transfer or conveyance
of any Asset that, had the parties given specific consideration to
such Asset as of the date hereof, would have otherwise been
classified as a Xxxxxxx Asset. No Asset shall be deemed to be a
Xxxxxxx Asset solely as a result of this clause if such Asset is
within the category or type of Asset expressly covered by the
subject matter of an Ancillary Agreement. In addition, no Asset
shall be deemed a Xxxxxxx Asset solely as a result of this clause
(v) unless a claim with respect thereto is made by Xxxxxxx or on
behalf of Xxxxxxx by New ATAPCO, ATRECO or Gateway on or prior to
the first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the Xxxxxxx
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary Agreement
(or the Schedules hereto or thereto) as Assets to be retained by or
transferred to any member of the New ATAPCO Group, the ATRECO
Group, the Gateway Group or the Baltimore Management Group.
In the event of any inconsistency or conflict which may arise in
the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not a
Xxxxxxx Asset, any item explicitly included on Schedule 1.1(aq)(i)
shall take priority over any provision of the text hereof.
(ar) "Xxxxxxx Balance Sheet" shall mean the consolidated balance sheet
of the Xxxxxxx Group as of the Exchange Date immediately following the
Effective Time, including the notes thereto, to be prepared pursuant to
Section 4.26 in accordance with GAAP consistently applied. For information
purposes only, an unaudited pro forma consolidated balance sheet of the
Xxxxxxx Group as of June 30, 1998, is set forth as Schedule 1.1(ar) hereto.
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(as) "Xxxxxxx Business" shall mean the Atlas/Soundolier Business, the
OPG Business, the Northern Computers Business, the Millbank Electronics
Business, the ownership and operation of the Monroe Property and the
ownership of ISA International Common Stock, to the extent held by ATAPCO or
any of its Subsidiaries immediately prior to the Effective Time.
(at) "Xxxxxxx Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by which
ATAPCO or any of its Subsidiaries or any of their respective Assets is bound,
whether or not in writing, except for any such contract or agreement that is
expressly contemplated to be transferred or assigned to any member of the New
ATAPCO Group, the ATRECO Group, the Gateway Group or the Baltimore Management
Group, in each case, pursuant to any provision of this Agreement or any
Ancillary Agreement:
(i) any contracts or agreements listed or described on Schedule
1.1(at)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the Xxxxxxx Group to the extent related to the Xxxxxxx Business or
the Xxxxxxx Assets;
(iii) any contract or agreement that relates primarily to the
Xxxxxxx Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to, or retained by, any
member of the Xxxxxxx Group; and
(v) any guarantee, indemnity, representation or warranty of any
division, business unit or member of the Xxxxxxx Group to the
extent related to the Xxxxxxx Business or the Xxxxxxx Assets.
(au) "Xxxxxxx Group" shall mean, immediately following the Effective
Time, Xxxxxxx and each Subsidiary of ATAPCO which is a Subsidiary of Xxxxxxx
immediately following the Effective Time as identified on Schedule 1.1(au)
hereto, which Schedule also indicates the amount of Xxxxxxx'x ownership
interest therein.
(av) "Xxxxxxx Liabilities" shall mean:
(i) all Liabilities (except (x) any employee-related Liabilities
that are subject to the Employee Benefits Agreement and (y) any
Taxes that are subject to the Tax Allocation Agreement) primarily
relating to, arising out of or resulting from:
-14-
(A) the operation of the Xxxxxxx Business, as conducted at
any time prior to, on or after the Exchange Date (including
any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to
act is or was within such Person's authority)); or
(B) the operation at any time after the Effective Time of any
business conducted by Xxxxxxx (including any Liability
relating to, arising out of or resulting from any act or
failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is
or was within such Person's authority));
(ii) any other Liability specifically identified as a "Xxxxxxx
Liability" elsewhere in this Agreement or in any Ancillary
Agreement;
(iii) subject to Section 4.28 hereof, 1.75% of the total costs
incurred following the Effective Time under ATAPCO's and ATREPO's
existing leases for the office space on the 14th, 23rd and 24th
floors in The Xxxxxxxxx Building and 100% of the total costs
incurred following the Effective Time in connection with parking
spaces used in the parking garages of The Xxxxxxxxx Building and/or
the X.X. Xxxxx Building by employees of Xxxxxxx; and
(iv) any Liability on, relating to, or arising out of or in
connection with any compensation (including incentive compensation)
to be paid to Xxxx Xxxxxxxx for or relating to his services to
Xxxxxxx.
Notwithstanding the foregoing clauses (i) to (iv), the Xxxxxxx
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be retained or assumed by any
member of the New ATAPCO Group, the ATRECO Group, the Gateway
Group or the Baltimore Management Group; or
(y) all agreements and obligations of any member of the New
ATAPCO Group, the ATRECO Group, the Gateway Group or the
Baltimore Management Group under this Agreement or any of the
Ancillary Agreements to be performed after the Effective Time.
(aw) "Xxxxxxx Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of ATAPCO or any Subsidiary of ATAPCO
immediately prior to the Effective Time which relate to the Xxxxxxx Business
-15-
but do not relate to the New ATAPCO Business, the ATRECO Business, the
Gateway Business or the Baltimore Management Business.
(ax) "Xxxxxxx Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary of
ATAPCO immediately prior to the Effective Time which relate in part to the
Xxxxxxx Business, and in part to the New ATAPCO, ATRECO, Gateway or Baltimore
Management Businesses.
(ay) "Claims Administration" shall mean the processing of claims made
under the Policies and the Shared Policies, including, without limitation,
the reporting of claims to the insurance carriers and the management of the
defense of claims.
(az) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the Treasury regulations promulgated thereunder, including any successor
legislation.
(ba) "Conveyancing and Assumption Instruments" shall mean, collectively,
the various agreements, instruments and other documents to be entered into to
effect the transfer of Assets and the assumption of Liabilities in the manner
contemplated by this Agreement or any Ancillary Agreement, or otherwise
arising out of or relating to the transactions contemplated by this Agreement
or any Ancillary Agreement, which shall be in substantially the forms
attached hereto as Schedule 1.1(ba) for transfers to be effected pursuant to
the laws of one of the states of the United States, or, if not appropriate
for a given transfer, and for transfers to be effected pursuant to non-U.S.
laws, shall be in such other form or forms as the parties agree and as may be
required by the laws of the relevant jurisdiction.
(bb) "Effective Time" shall mean 11:59 p.m., Maryland time, on the
Exchange Date.
(bc) "Employee Benefits Agreement" shall mean the Employee Benefits
Agreement to be entered into among ATAPCO, ATRECO, AI, Gateway, Xxxxxxx and
Baltimore Management.
(bd) "Exchange Date" shall mean December 31, 1998.
(be) "Gateway" shall mean Gateway Gathering and Marketing Company, a
Maryland corporation.
(bf) "Gateway Assets" shall mean:
(i) 38% of any Asset relating to the swap transaction involving
Corporate Value Partners, LLC and NationsBank, N.A. and those
Assets identified on Schedule 1.1(bf)(i) hereto, all such Assets
expressly intended by this Agreement to be held and owned by
members of the Gateway Group immediately following the Effective
Time;
-16-
(ii) subject to Article X, any rights of any member of the Gateway
Group under any of the Gateway Policies or Gateway Shared Policies,
including any rights thereunder arising after the Exchange Date in
respect of any Policies that are occurrence Policies with respect
to occurrences that are prior to the Effective Time;
(iii) any Gateway Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent rights or
claims primarily relating to or arising from any Gateway Asset or
the Gateway Business;
(iv) any Assets reflected on the Gateway Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO and its Subsidiaries) primarily relating to or used in the
Gateway Business. The intention of this clause (v) is only to
rectify any inadvertent omission of transfer or conveyance of any
Asset that, had the parties given specific consideration to such
Asset as of the date hereof, would have otherwise been classified
as a Gateway Asset. No Asset shall be deemed to be a Gateway Asset
solely as a result of this clause (v) if such Asset is within the
category or type of Asset expressly covered by the subject matter
of an Ancillary Agreement. In addition, no Asset shall be deemed a
Gateway Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by Gateway on or prior to the first
anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the Gateway
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary Agreement
(or the Schedules hereto or thereto) as Assets to be retained by or
transferred to any member of the New ATAPCO Group, the ATRECO
Group, the Xxxxxxx Group or the Baltimore Management Group.
In the event of any inconsistency or conflict which may arise in
the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not a
Gateway Asset, any item explicitly included on Schedule 1.1(bf)(i)
shall take priority over any provision of the text hereof.
(bg) "Gateway Balance Sheet" shall mean the audited consolidated balance
sheet of the Gateway Group as of the Exchange Date immediately following the
Effective Time, including the notes thereto, to be prepared pursuant to
Section 4.26 in accordance with GAAP consistently applied. For information
purposes only, an unaudited pro forma consolidated balance sheet of the
Gateway Group as of June 30, 1998, is set forth as Schedule 1.1(bg) hereto.
-17-
(bh) "Gateway Business" shall mean the oil and gas exploration and
production, and the oil and gas gathering, marketing and trading business
described in Schedule 1.1(bh).
(bi) "Gateway Common Stock" shall mean the common stock, par value $10
per share, of Gateway.
(bj) "Gateway Consent, Letter of Representations and Power of Attorney"
shall mean a written consent, letter of representations and power of attorney
substantially in the form attached hereto as Schedule 1.1(bj).
(bk) "Gateway Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by which
ATAPCO or any of its Subsidiaries or any of their respective Assets is bound,
whether or not in writing, except for any such contract or agreement that is
expressly contemplated to be transferred or assigned to, or retained by, any
member of the New ATAPCO Group, the ATRECO Group, the Xxxxxxx Group or the
Baltimore Management Group, in each case, pursuant to any provision of this
Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on Schedule
1.1(bk)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the Gateway Group to the extent related to the Gateway Business or
the Gateway Assets;
(iii) any contract or agreement that relates primarily to the
Gateway Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to, or retained by, any
member of the Gateway Group; and
(v) any guarantee, indemnity, representation or warranty of any
division, business unit or member of the Gateway Group to the
extent related to the Gateway Business or the Gateway Assets.
(bl) "Gateway Group" shall mean, immediately following the Effective
Time, Gateway and each Subsidiary of ATAPCO which is a Subsidiary of Gateway
immediately following the Effective Time as identified on Schedule 1.1(bl)
hereto, which Schedule also indicates the amount of Gateway's ownership
interest therein.
(bm) "Gateway Indemnitees" shall mean each member of the Gateway Group,
each of their respective directors, officers, employees and agents and each
of the heirs, executors, successors and assigns of any of the foregoing.
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(xx) "Xxxxxxx Xxxxxxxxxxx" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(bn)(i), (y) any employee-related Liabilities that are
subject to the Employee Benefits Agreement, and (z) any Taxes that
are subject to the Tax Allocation Agreement) primarily relating to,
arising out of or resulting from:
(A) the operation of the Gateway Business, as conducted at
any time prior to, on or after the Exchange Date (including
any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to
act is or was within such Person's authority)); or
(B) the operation at any time after the Effective Time of any
business conducted by Gateway or any Subsidiary of Gateway
(including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not
such act or failure to act is or was within such Person's
authority));
(ii) subject to Section 4.28 hereof, 9.23% of the total costs
incurred following the Effective Time under ATAPCO's and ATREPO's
existing leases for the office space on the 14th, 23rd and 24th
floors in The Xxxxxxxxx Building and 100% of the total costs
incurred following the Effective Time in connection with parking
spaces used in the parking garages of The Xxxxxxxxx Building and/or
the X.X. Xxxxx Building by employees of Gateway;
(iii) 38% of any Liability relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank, N.A.;
(iv) any other Liability specifically identified as a "Gateway
Liability" elsewhere in this Agreement or in any Ancillary
Agreement; and
(v) 22.952% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (v), the Gateway
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be retained or assumed by any
member of the New ATAPCO Group, the ATRECO Group, the Xxxxxxx
Group or the Baltimore Management Group; or
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(y) all agreements and obligations of any member of the New
ATAPCO Group, the ATRECO Group, the Xxxxxxx Group or the
Baltimore Management Group under this Agreement or any of the
Ancillary Agreements to be performed after the Effective Time.
(bo) "Gateway Percentage" shall mean 22.952%.
(bp) "Gateway Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of ATAPCO or any Subsidiary of ATAPCO
immediately prior to the Effective Time which relate to the Gateway Business
but do not relate to the New ATAPCO Business, the ATRECO Business, the
Xxxxxxx Business or the Baltimore Management Business.
(bq) "Gateway Share Exchange" shall mean the exchange at the Effective
Time of shares of Gateway Common Stock for all of the shares of ATAPCO Common
Stock held by the Gateway Stockholders, as more fully described in Section
2.2.
(br) "Gateway Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary of
ATAPCO immediately prior to the Effective Time which relate in part to the
Gateway Business, and in part to the New ATAPCO, ATRECO, Baltimore Management
or Xxxxxxx Businesses.
(bs) "Gateway Stockholder" shall mean any member of the Gateway
Stockholder Group.
(bt) "Gateway Stockholder Group" shall mean the ATAPCO stockholders set
forth on Schedule 1.1(bt).
(bu) "Governmental Authority" shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
(bv) "Indemnifiable Losses" shall mean any and all losses, Liabilities,
claims, damages, demands, costs or expenses (including, without limitation,
reasonable attorneys' fees and any and all out-of-pocket expenses) reasonably
incurred in investigating, preparing for or defending against any Actions or
potential Actions or in settling any Action or potential Action or in
satisfying any judgment, fine or penalty rendered in or resulting from any
Action.
(bw) "Information Statement" shall mean the Information Statement/Offering
Circular sent to all holders of ATAPCO Common Stock in connection with the
Reorganization, including any amendment or supplement thereto.
(bx) "Insurance Administration" shall mean, with respect to each Policy
and Shared Policy, the accounting for premiums, retrospectively-rated
premiums, defense costs, indemnity payments, deductibles and retentions, as
appropriate, under the terms and conditions of each of the Policies and
-20-
Shared Policies; and the reporting to excess insurance carriers of any losses
or claims which may cause the per-occurrence, per claim or aggregate limits
of any Policy or Shared Policy to be exceeded, and the distribution of
Insurance Proceeds as contemplated by this Agreement.
(by) "Insurance Proceeds" shall mean those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on
behalf of an insured, in either case net of any applicable premium
adjustment, retrospectively-rated premium, deductible, retention, or cost of
reserve paid or held by or for the benefit of such insured.
(bz) "Insured Claims" shall mean those Liabilities that, individually or
in the aggregate, are covered within the terms and conditions of any of the
Shared Policies, without regard to policy limits whether or not subject to
deductibles, Co-insurance, uncollectibility or retrospectively-rated
premium adjustments.
(ca) "Intellectual Property Agreement" shall mean the Intellectual
Property Agreement to be entered into among ATAPCO, ATRECO, Gateway, AI,
Xxxxxxx and Baltimore Management.
(cb) "Liabilities" shall mean any and all losses, claims, charges,
debts, demands, Actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations, covenants,
contracts, controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising
under any law, rule, regulation, Action, threatened or contemplated Action
(including the costs and expenses of demands, assessments, judgments,
settlements and compromises relating thereto and attorneys' fees and any and
all costs and expenses, whatsoever reasonably incurred in investigating,
preparing or defending against any such Actions or threatened or contemplated
Actions), order or consent decree of any Governmental Authority or any award
of any arbitrator or mediator of any kind, and those arising under any
contract, commitment or undertaking, including those arising under this
Agreement or any Ancillary Agreement, in each case, whether or not recorded
or reflected or required to be recorded or reflected on the books and records
or financial statements of any Person.
(cc) "Monroe Property" shall mean the parcel of approximately 84 acres
owned by ATREPO in Monroe, Connecticut.
(cd) "New ATAPCO" shall mean Atapco, Inc., a Delaware corporation, after
the Effective Time.
(ce) "New ATAPCO Assets" shall mean:
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(i) those Assets identified on Schedule 1.1(ce)(i) hereto, all
such Assets expressly intended by this Agreement to be held and
owned by members of the New ATAPCO Group immediately following the
Effective Time;
(ii) subject to Article X, any rights of any member of the New
ATAPCO Group under any of the New ATAPCO Policies or the New ATAPCO
Shared Policies, including any rights thereunder arising after the
Exchange Date in respect of any Policies that are occurrence
Policies, with respect to occurrences that occur prior to the
Effective Time;
(iii) any New ATAPCO Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent rights or
claims primarily relating to or arising from any New ATAPCO Asset
or the New ATAPCO Business;
(iv) any Assets reflected on the New ATAPCO Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to or
used in the New ATAPCO Business. The intention of this clause (v)
is only to rectify any inadvertent omission of transfer or
conveyance of any Asset that, had the parties given specific
consideration to such Asset as of the date hereof, would have
otherwise been classified as a New ATAPCO Asset. No Asset shall be
deemed to be a New ATAPCO Asset solely as a result of this clause
(v) if such Asset is within the category or type of Asset expressly
covered by the subject matter of an Ancillary Agreement. In
addition, no Asset shall be deemed a New ATAPCO Asset solely as a
result of this clause (v) unless a claim with respect thereto is
made by New ATAPCO on or prior to the first anniversary of the
Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the New ATAPCO
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary Agreement
(or the Schedules hereto or thereto) as Assets to be retained by or
transferred to any member of the ATRECO Group, the Gateway Group,
the Xxxxxxx Group or the Baltimore Management Group.
In the event of any inconsistency or conflict which may arise in
the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not a New
ATAPCO Asset, any item explicitly included on Schedule 1.1(ce)(i)
shall take priority over any provision of the text hereof.
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(cf) "New ATAPCO Balance Sheet" shall mean the audited consolidated
balance sheet of the New ATAPCO Group as of the Exchange Date immediately
following the Effective Time, including the notes thereto, to be prepared
pursuant to Section 4.26 in accordance with GAAP consistently applied. For
information purposes only, an unaudited pro forma consolidated balance sheet
of the New ATAPCO Group as of June 30, 1998, is set forth as Schedule 1.1(cf)
hereto.
(cg) "New ATAPCO Business" shall mean that portion of the Real Estate
Business described in Schedule 1.1(cg).
(ch) "New ATAPCO Consent, Letter of Representations and Power of
Attorney" shall mean a written consent, letter of representations and power
of attorney substantially in the form attached hereto as Schedule 1.1(ch).
(ci) "New ATAPCO Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by which
ATAPCO or any of its Subsidiaries or any of their respective Assets is bound,
whether or not in writing, except for any such contract or agreement that is
expressly contemplated to be transferred or assigned to, or retained by, any
member of the ATRECO Group, the Gateway Group, the Xxxxxxx Group or the
Baltimore Management Group, in each case, pursuant to any provision of this
Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on Schedule
1.1(ci)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the New ATAPCO Group to the extent related to the New ATAPCO
Business or the New ATAPCO Assets;
(iii) any contract or agreement that relates primarily to the New
ATAPCO Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary
Agreements to be transferred or assigned to, or retained by, any
member of the New ATAPCO Group; and
(v) any guarantee, indemnity, representation or warranty of any
division, business unit or member of the New ATAPCO Group to the
extent related to the New ATAPCO Business or the New ATAPCO Assets.
(cj) "New ATAPCO Group" shall mean, immediately following the Effective
Time, New ATAPCO and each Subsidiary of ATAPCO which is a Subsidiary of New
ATAPCO immediately following the Effective Time as identified on Schedule
1.1(cj) hereto, which Schedule also indicates the amount of New ATAPCO's
ownership interest therein.
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(ck) "New ATAPCO Indemnitees" shall mean each member of the New ATAPCO
Group, each of their respective directors, officers, employees and agents and
each of the heirs, executors, successors and assigns of any of the foregoing.
(cl) "New ATAPCO Liabilities" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(cl)(i), (y) any employee-related Liabilities that are
subject to the Employee Benefits Agreement, and (z) any Taxes that
are subject to the Tax Allocation Agreement) primarily relating to,
arising out of or resulting from:
(A) the operation of the New ATAPCO Business, as conducted at
any time prior to, on or after the Exchange Date (including
any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to
act is or was within such Person's authority)); or
(B) the operation at any time after the Effective Time of any
business conducted by New ATAPCO or any Subsidiary of New
ATAPCO (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not
such act or failure to act is or was within such Person's
authority));
(ii) any Liability of New ATAPCO in respect of its portion of the
split dollar insurance Assets described in Section 4.5 following
the Effective Time;
(iii) subject to Section 4.28 hereof, 27.76% of the total costs
incurred following the Effective Time under ATAPCO's and ATREPO's
existing leases for the office space on the 14th, 23rd and 24th
floors in The Xxxxxxxxx Building and 100% of the total costs
incurred following the Effective Time in connection with parking
spaces used in the parking garages of The Xxxxxxxxx Building and/or
the X.X. Xxxxx Building by employees of New ATAPCO;
(iv) any other Liability specifically identified as a "New ATAPCO
Liability" elsewhere in this Agreement or in any Ancillary
Agreement; and
(v) 39.123% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (v), the New ATAPCO
Liabilities shall not include:
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(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be retained or assumed by any
member of the ATRECO Group, the Gateway Group, the Xxxxxxx
Group or the Baltimore Management Group; or
(y) all agreements and obligations of any member of the
ATRECO Group, the Gateway Group, the Xxxxxxx Group or the
Baltimore Management Group under this Agreement or any of the
Ancillary Agreements to be performed after the Effective Time.
(cm) "New ATAPCO Percentage" shall mean 39.123%.
(cn) "New ATAPCO Policies" shall mean all Policies current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary of
ATAPCO immediately prior to the Effective Time which relate to the New ATAPCO
Business but do not relate to the ATRECO Business, the Gateway Business, the
Xxxxxxx Business or the Baltimore Management Business.
(co) "New ATAPCO Shared Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate in
part to the New ATAPCO Business, and in part to the ATRECO, Gateway,
Baltimore Management or Xxxxxxx Businesses.
(cp) "New ATAPCO Stockholder" shall mean any member of the New ATAPCO
Stockholder Group.
(cq) "New ATAPCO Stockholder Group" shall mean the ATAPCO stockholders
set forth on Schedule 1.1(cq).
(cr) "Other Tax Costs" shall have the meaning set forth in the Tax
Allocation Agreement.
(cs) "Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, limited liability
company or Governmental Authority.
(ct) "Policies" shall mean insurance policies and insurance contracts of
any kind (other than life and benefits policies or contracts), including,
without limitation, primary, excess and umbrella policies, comprehensive
general liability policies, director and officer liability, fiduciary
liability, automobile, aircraft, property and casualty, workers' compensation
and employee dishonesty insurance policies, bonds and captive insurance
company arrangements, together with the rights, benefits and privileges
thereunder.
(cu) "Security Interest" shall mean any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
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(cv) "Share Exchanges" shall mean the collective reference to the ATRECO
Share Exchange and the Gateway Share Exchange.
(cw) "Shared Liabilities" shall mean any Liability of the ATAPCO Group
that is not a New ATAPCO Liability described in Section 1.1(cl)(i)-(iv), an
ATRECO Liability described in Section 1.1(w)(i)-(v), a Gateway Liability
described in Section 1.1(bn)(i)-(iv), a Xxxxxxx Liability described in
Section 1.1(av)(i)-(iv) (other than a Xxxxxxx Liability which is satisfied by
any member of the New ATAPCO Group, the ATRECO Group or the Gateway Group, or
which any member of the New ATAPCO Group, the ATRECO Group or the Gateway
Group becomes obligated to satisfy), or a Baltimore Management Liability
described in Section 1.1(am)(i)-(iii) (other than a Baltimore Management
Liability which is satisfied by any member of the New ATAPCO Group, the
ATRECO Group or the Gateway Group or which any member of the New ATAPCO
Group, the ATRECO Group or the Gateway Group becomes obligated to satisfy),
including, but not limited to:
(i) any Liability arising from any suit, Action or other
proceeding brought by or on behalf of any Person not a party to
this Agreement challenging the Reorganization or any of the
transactions, documents or agreements entered into by AI, ATAPCO,
ATRECO, Gateway, Xxxxxxx, Baltimore Management or any member of the
ATAPCO Group in connection therewith;
(ii) any Liability arising from the property formerly owned by the
Atlas/Soundolier Business in Parsippany, New Jersey;
(iii) any Liability arising from any Asset, Subsidiary, business or
operation divested by ATAPCO or any member of the ATAPCO Group
prior to the Effective Time;
(iv) any Liability that may arise in connection with the
obligations of New ATAPCO pursuant to Section 4.15;
(v) any Liability that may arise in connection with any guarantees
relating to the Xxxxxxx Business or the Baltimore Management
Business;
(vi) any Liability arising under the American Trading and
Production Salary Continuation Plan for Employees of the Baltimore
Headquarters and the American Trading and Production Salary
Continuation Plan for Employees of Real Estate Subsidiaries as a
result of any termination of any employee of any member of the
ATAPCO Group prior to the Effective Time or as a result of any
termination by Xxxxxxx or Baltimore Management of any employee of
any member of the Xxxxxxx Group or the Baltimore Management Group
following the Effective Time;
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(vii) any Liability of any member of the ATAPCO Group for any
agreement or obligation under this Agreement or any Ancillary
Agreement the performance of which is to occur at or prior to the
Effective Time;
(viii) any Xxxxxxx Liability or Baltimore Management Liability
which is satisfied by any member of the New ATAPCO Group, the
ATRECO Group or the Gateway Group or which any member of the New
ATAPCO Group, the ATRECO Group or the Gateway Group becomes
obligated to satisfy;
(ix) any Liability on, relating to, or arising out of or in
connection with the Unpaid Senior Notes;
(x) any Liability on, relating to, or arising out of or in
connection with the S&P 500 Call Options;
(xi) any Liability set forth on Schedule 1.1(w)(i), Schedule
1.1(bn)(i) and Schedule 1.1(cl)(i);
(xii) all costs incurred following the Effective Time relating
to, arising out of or in connection with the renovation of the
office space in The Xxxxxxxxx Building to provide separate office
space for New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore
Management; and
(xiii) any other Liability specifically identified as a "Shared
Liability" elsewhere in this Agreement or in any Ancillary
Agreement.
(cx) "Shared Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of ATAPCO or any Subsidiary of ATAPCO
immediately prior to the Effective Time which relate to one or more of the
New ATAPCO Business, the ATRECO Business, the Gateway Business, the Xxxxxxx
Business and the Baltimore Management Business.
(cy) "S&P 500 Call Options" shall mean the call options arising from and
relating to the contract between ATAPCO and Bankers Trust Company, London
Branch, dated October 31, 1997, and amended on November 12, 1997.
(cz) "Subsidiary" shall mean any corporation, partnership, limited
liability company, trust or other entity of which another entity (i) owns,
directly or indirectly, ownership interests sufficient to elect a majority of
the Board of Directors (or persons performing similar functions)
(irrespective of whether at the time any other class or classes of ownership
interests of such corporation, partnership, limited liability company, trust
or other entity shall or might have such voting power upon the occurrence of
any contingency) or (ii) is a general partner or an entity performing similar
functions (e.g., a trustee).
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(da) "Tax" shall have the meaning set forth in the Tax Allocation
Agreement.
(db) "Tax Allocation Agreement" shall mean the Tax Allocation Agreement
to be entered into among ATAPCO, AI, ATRECO and Gateway.
(dc) "Unpaid Senior Notes" shall mean the 10 1/4% Senior Notes, due
December 1, 2007, issued by ATAPCO.
SECTION 1.2. Terms Defined Elsewhere in this Agreement. The following
is a list of additional terms used in this Agreement and a reference to the
Section hereof in which such term is defined:
Term Section
"Agreement Disputes" . . . . . . . . . . . . . . . . 9.1
"AI" . . . . . . . . . . . . . . . . . . . . . . . . Preamble
"AMEX" . . . . . . . . . . . . . . . . . . . . . . . 3.2
"Amoco Common Stock" . . . . . . . . . . . . . . . . Recital
"Assignee" . . . . . . . . . . . . . . . . . . . . . 4.4
"Atlas/Soundolier Business" . . . . . . . . . . . . . Recital
"Capital One Common Stock" . . . . . . . . . . . . . Recital
"Contributing Parties" . . . . . . . . . . . . . . . 6.6
"Crown Central" . . . . . . . . . . . . . . . . . . . Recital
"Crown Central Class A Common Stock" . . . . . . . . Recital
"Crown Central Class B Common Stock" . . . . . . . . Recital
"Crown Central Common Stock" . . . . . . . . . . . . Recital
"Crown Central Shortage" . . . . . . . . . . . . . . 3.3
"Crown Central Surplus" . . . . . . . . . . . . . . . 3.3
"Defender" . . . . . . . . . . . . . . . . . . . . . 6.6
"Determination Date" . . . . . . . . . . . . . . . . 3.1
"Dissolved Party" . . . . . . . . . . . . . . . . . . 6.3
"Earnings Release" . . . . . . . . . . . . . . . . . 3.3
"Firm" . . . . . . . . . . . . . . . . . . . . . . . 4.26
"First Adjusted Crown Central Valuation" . . . . . . 3.2
"First Union Common Stock" . . . . . . . . . . . . . Recital
"GAAP" . . . . . . . . . . . . . . . . . . . . . . . 1.1(p)
"Indemnifying Party" . . . . . . . . . . . . . . . . 6.5
"Indemnitee" . . . . . . . . . . . . . . . . . . . . 6.5
"IRS" . . . . . . . . . . . . . . . . . . . . . . . . 3.4
"IRS Ruling" . . . . . . . . . . . . . . . . . . . . 4.22
"ISA International Common Stock" . . . . . . . . . . Recital
"Millbank Electronics Business" . . . . . . . . . . . Recital
"Northern Computers Business" . . . . . . . . . . . . Recital
"Oil and Gas Business" . . . . . . . . . . . . . . . Recital
"OPG Business" . . . . . . . . . . . . . . . . . . . Recital
"Other Account" . . . . . . . . . . . . . . . . . . . 4.27
"Principal Common Stock Investments" . . . . . . . . Recital
"Real Estate Business" . . . . . . . . . . . . . . . Recital
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"Records" . . . . . . . . . . . . . . . . . . . . . . 7.1
"Reorganization " . . . . . . . . . . . . . . . . . . 2.1
"Rules" . . . . . . . . . . . . . . . . . . . . . . . 9.2
"Second Adjusted Crown Central Valuation" . . . . . . 3.3
"Shared Liability Account" . . . . . . . . . . . . . 6.1
"Supplemental Ruling" . . . . . . . . . . . . . . . . 4.22
"Third Party Claim" . . . . . . . . . . . . . . . . . 6.5
SECTION 1.3. References; Interpretation. References in this Agreement
to any gender include references to all genders, and references to the
singular include references to the plural and vice versa. The words
"include", "includes" and "including" when used in this Agreement shall be
deemed to be followed by the phrase "without limitation". Unless the context
otherwise requires, references in this Agreement to Articles, Sections and
Schedules shall be deemed references to Articles and Sections of, and
Schedules to, this Agreement. Unless the context otherwise requires, the
words "hereof", "hereby" and "herein" and words of similar meaning when used
in this Agreement refer to this Agreement in its entirety and not to any
particular Article, Section or provision of this Agreement.
ARTICLE II. THE REORGANIZATION
SECTION 2.1. The Reorganization -General. The "Reorganization" shall
consist of those actions, covenants, promises, agreements and transactions
described in this Agreement, the Ancillary Agreements and the Schedules and
Exhibits hereto and thereto, pursuant to which, among other things the ATAPCO
Merger and the Share Exchanges will occur, the members of the ATRECO
Stockholder Group will become the sole stockholders of ATRECO, the members of
the Gateway Stockholder Group will become the sole stockholders of Gateway,
and the members of the New ATAPCO Stockholder Group will become the sole
stockholders of New ATAPCO. A general description of certain principal
transactions included in the Reorganization is set forth on Schedule 2.1(a)
and the parties hereby agree to take, or cause to be taken, all such actions
set forth on Schedule 2.1(a) at the times specified therein.
SECTION 2.2. The Share Exchanges.
(a) On or prior to the Exchange Date, ATAPCO will cause ATRECO's
charter to be amended and restated as set forth on Schedule 4.11(a), which
will result in a reclassification of ATRECO's outstanding capital stock in a
manner that allows the ATRECO Share Exchange to be effected on a one share
for one share basis. In connection therewith, ATAPCO shall deliver to ATRECO
for cancellation the share certificate held by it representing ATRECO Common
Stock and shall receive new certificates representing the total number of
shares of ATRECO Common Stock, reclassified into five series, to be
exchanged by ATAPCO in the ATRECO Share Exchange.
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(b) On or prior to the Exchange Date, ATRECO shall prepare new stock
certificates, which certificates shall be for the relevant series of ATRECO
Common Stock to be held by such members of the ATRECO Stockholder Group as
set forth in Schedule 4.11(a), in the names of the members of the ATRECO
Stockholder Group. Each such certificate shall be for that number of shares
of ATRECO Common Stock (of the appropriate series) equal to the number of
shares of ATAPCO Common Stock held by the ATRECO Stockholder whose name
appears on each stock certificate.
(c) On or prior to the Exchange Date, Gateway shall issue to ATAPCO as
a stock dividend such number of shares of Gateway Common Stock that, together
with the shares of Gateway Common Stock already held by ATAPCO, will be
required to effect the Gateway Share Exchange on a one share for one share
basis. In connection therewith, ATAPCO shall deliver to Gateway for
cancellation the share certificates held by it representing Gateway Common
Stock and shall receive a new certificate representing the total number of
shares of Gateway Common Stock to be exchanged by ATAPCO in the Gateway Share
Exchange.
(d) On or prior to the Exchange Date, Gateway shall prepare new stock
certificates in the names of the members of the Gateway Stockholder Group.
Each such certificate shall be for that number of shares of Gateway Common
Stock equal to the number of shares of ATAPCO Common Stock held by the Gateway
Stockholder whose name appears on each stock certificate.
(e) Immediately prior to the Effective Time, AI shall surrender --
(i) to ATRECO the certificate theretofore representing all of the issued and
outstanding ATRECO Common Stock in return for the new stock certificates to
be exchanged by AI with the ATRECO Stockholders in the ATRECO Share Exchange,
and (ii) to Gateway the certificate theretofore representing all of the
issued and outstanding Gateway Common Stock in return for the new stock
certificates to be exchanged by AI with the Gateway Stockholders in the
Gateway Share Exchange. The certificate representing ATRECO Common Stock
surrendered by AI shall be canceled by ATRECO and the certificate
representing Gateway Common Stock surrendered by AI shall be canceled by
Gateway.
(f) Subject to the satisfaction or waiver (subject to applicable law)
of the conditions set forth in Article V of this Agreement, the Share
Exchanges shall be effective at the Effective Time, at which time the
following will occur:
(i) each share of ATAPCO Common Stock held by an ATRECO
Stockholder will be exchanged by AI for one share of ATRECO Common
Stock of the relevant series;
(ii) each share of ATAPCO Common Stock held by a Gateway
Stockholder will be exchanged by AI for one share of Gateway Common
Stock;
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(iii) each ATRECO Stockholder and each Gateway Stockholder will
deliver to AI one or more certificates representing all of the
shares of ATAPCO Common Stock held by such stockholder;
(iv) AI will deliver to each ATRECO Stockholder and to each Gateway
Stockholder a stock certificate representing the shares of ATRECO
Common Stock or Gateway Common Stock such stockholder is entitled
to receive pursuant to the provisions of this Agreement; and
(v) the certificates representing ATAPCO Common Stock surrendered
by ATRECO Stockholders and Gateway Stockholders shall be canceled
by AI.
(g) ATAPCO may establish such other rules and procedures as it deems
reasonably necessary in its discretion for the implementation of the Share
Exchanges pursuant to, and in a manner consistent with, this Agreement.
(h) Certificates representing shares of ATRECO Common Stock or Gateway
Common Stock issued in exchange for certificates representing shares of
ATAPCO Common Stock in accordance with the terms of this Section 2.2 shall be
deemed to have been issued in full satisfaction of all rights pertaining to
the shares of ATAPCO Common Stock exchanged therefor.
ARTICLE III. VALUATION; POST-EXCHANGE DATE ADJUSTMENTS
SECTION 3.1. Valuation. ATAPCO, ATRECO and Gateway acknowledge and
agree that Schedule 1.1(d) sets forth the Aggregate Valuation as of October
31, 1998. The parties agree that the value of any Asset set forth on
Schedule 1.1(d) shall be the value used for all purposes (other than the
preparation of the balance sheets pursuant to Section 4.26) under this
Agreement, except that for the purposes of determining the cash transfers to
be made on the Exchange Date as set forth in Schedule 2.1(a) -- (i) the
aggregate market value of the Crown Central Common Stock shall be the First
Adjusted Crown Central Valuation determined in accordance with Section 3.2,
(ii) the value of any Assets included in Schedule 1.1(d) shall be increased
by the amount of any capital expenditure paid for by the ATAPCO Group between
October 31, 1998 and the Effective Time with respect to such Assets that have
not been taken into account in determining the valuations on Schedule 1.1(d),
(iii) the value of the swap transaction involving Corporate Value Partners,
LLC and NationsBank shall be updated as of the close of business on December
24, 1998 (the "Determination Date") according to the value reported by
Corporate Value Partners, (iv) the value of any material Asset acquired by
the ATAPCO Group after October 31, 1998, but prior to the Effective Time
which is not allocated among the parties according to the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage shall be
included in the Aggregate Valuation at its acquisition cost and (v) further
adjustments shall be made as necessary to implement any other provision of
this Agreement that specifically requires such adjustment.
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SECTION 3.2. First Adjusted Crown Central Valuation. ATAPCO shall
prepare an updated calculation of the aggregate market value as of the close
of business on the Determination Date of the shares of Crown Central Common
Stock (the "First Adjusted Crown Central Valuation"). The First Adjusted
Crown Central Valuation shall be the sum of (A) the product of (i) the
average per share closing price of the shares of the Crown Central Class A
Common Stock as reported on the American Stock Exchange ("AMEX") composite
transactions tape for the 10 trading days prior to and ending on the
Determination Date and (ii) the number of shares of Crown Central Class A
Common Stock allocated to Gateway pursuant to this Agreement, and (B) the
product of (i) the average per share closing price of the shares of the Crown
Central Class B Common Stock as reported on the AMEX composite transactions
tape for the 10 trading days prior to and ending on the Determination Date
and (ii) the number of shares of Crown Central Class B Common Stock allocated
to Gateway pursuant to this Agreement.
SECTION 3.3. Second Adjusted Crown Central Valuation.
(a) As soon as practicable after the tenth trading day following the
date Crown Central issues a press release in the ordinary course of its
business and consistent with past practice containing its earnings for the
three- and six-month periods ending on June 30, 1999 (the "Earnings
Release"), Baltimore Management shall prepare a second calculation of the
aggregate market value of the shares of Crown Central Common Stock allocated
to Gateway pursuant to the terms of this Agreement (the "Second Adjusted
Crown Central Valuation"). The Second Adjusted Crown Central Valuation shall
be the sum of (A) the product of (i) the average per share closing price of
the shares of Crown Central Class A Common Stock as reported on the AMEX
composite transactions tape for the 10 trading days beginning on and
including the first trading day following the date of the issuance by Crown
Central of its Earnings Release and (ii) the number of shares of Crown
Central Class A Common Stock allocated to Gateway pursuant to this Agreement,
and (B) the product of (i) the average per share closing price of the shares
of Crown Central Class B Common Stock as reported on the AMEX composite
transactions tape for the 10 trading days beginning on and including the
first trading day following the date of the issuance by Crown Central of its
Earnings Release and (ii) the number of shares of Crown Central Class B
Common Stock allocated to Gateway pursuant to this Agreement.
(b) The Second Adjusted Crown Central Valuation shall be subject to
appropriate adjustment to take proper account of the following events, if any
such events should occur prior to tenth trading day following the date of the
Earnings Release: (1) Crown Central pays a dividend or makes a distribution
in shares of Crown Central Common Stock or in any other debt or equity
securities, including options or warrants, on any of the Crown Central Common
Stock, subdivides any Crown Central Common Stock into a greater number of
shares of Crown Central Common Stock, or combines any Crown Central Common
Stock into a smaller number of shares of Crown Central Common Stock; or
(2) Crown Central reclassifies any Crown Central Common Stock; or (3) Crown
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Central consolidates or merges with or into any other Person, or is the
subject of a successful tender offer or share exchange, in which the
securities of any other Person are substituted or exchanged in whole or in
part for any of the shares of Crown Central Common Stock allocated to Gateway
pursuant to the terms of this Agreement; or (4) Crown Central makes or
engages in an extraordinary dividend, distribution, redemption or similar
transaction with respect to or affecting the Crown Central Common Stock
allocated to Gateway pursuant to this Agreement.
(c) In the event that the Second Adjusted Crown Central Valuation is
greater than the First Adjusted Crown Central Valuation (the "Crown Central
Surplus"), the parties agree that each of New ATAPCO, ATRECO and Gateway
shall be entitled to that portion of any Crown Central Surplus equal to the
amount of the Crown Central Surplus multiplied by the New ATAPCO Percentage,
the ATRECO Percentage and the Gateway Percentage, respectively. Within 10
business days of the calculation of the Crown Central Surplus, Gateway shall
transfer to New ATAPCO or a member of the New ATAPCO Group and to ATRECO or a
member of the ATRECO Group cash in amounts necessary to provide for the
division of the Crown Central Surplus in accordance with the applicable
percentages.
(d) In the event that the Second Adjusted Crown Central Valuation is
less than the First Adjusted Crown Central Valuation (the "Crown Central
Shortage"), the parties agree that each of New ATAPCO, ATRECO and Gateway
shall be liable for that portion of any Crown Central Shortage equal to the
amount of the Crown Central Shortage multiplied by the New ATAPCO Percentage,
the ATRECO Percentage and the Gateway Percentage, respectively. Within 10
business days of the calculation the Crown Central Shortage, New ATAPCO and
ATRECO shall transfer to Gateway or a member of the Gateway Group cash in
amounts necessary to provide for the division of the Crown Central Shortage
in accordance with the applicable percentages and to reimburse Gateway or a
member of the Gateway Group for that portion of the Crown Central Shortage
that exceeds the Gateway Percentage.
SECTION 3.4. Vantage/Interstate Exchange. If at any time following the
Exchange Date, the Internal Revenue Service ("IRS") refunds any portion of
the federal income tax paid with respect to the Vantage/Interstate exchange,
the refund proceeds shall be paid over to Baltimore Management or allocated
to the parties pursuant to the Tax Allocation Agreement. If, as a result of
such refund, ATRECO is required to decrease its adjusted basis, for federal
income tax purposes, in the Interstate Property, then, within 10 business
days following the date on which the IRS grants any such refund, (i) Gateway
shall pay to ATRECO an amount equal to 6.294% of the dollar amount by which
ATRECO's adjusted basis in the Interstate Property is decreased as a result
of such refund and (ii) New ATAPCO shall pay to ATRECO an amount equal to
10.728% of the dollar amount by which ATRECO's adjusted basis in the
Interstate Property is decreased as a result of such refund.
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ARTICLE IV. COVENANTS AND AGREEMENTS
SECTION 4.1. Information Statement and Consents; Securities Laws.
(a) As soon as practical following execution of this Agreement, ATAPCO
shall:
(i) prepare the Information Statement;
(ii) mail a New ATAPCO Consent, Letter of Representations and Power
of Attorney and an Information Statement to each New ATAPCO
Stockholder;
(iii) mail an ATRECO Consent, Letter of Representations and Power
of Attorney and an Information Statement to each ATRECO
Stockholder; and
(iv) mail a Gateway Consent, Letter of Representations and Power of
Attorney and an Information Statement to each Gateway Stockholder.
(b) ATAPCO shall obtain all necessary state securities law or "blue
sky" permits and approvals required to carry out the transactions
contemplated by this Agreement.
(c) Each of the parties hereto agrees to furnish to ATAPCO all
information concerning itself and its Subsidiaries, Affiliates, officers,
directors and future stockholders as may be requested by ATAPCO in connection
with the foregoing.
SECTION 4.2. Employee Matters.
(a) Schedules 4.2(a)(i), 4.2(a)(ii), 4.2(a)(iii), 4.2(a)(iv) and
4.2(a)(v) set forth the names of all of the employees currently employed with
ATAPCO or its Subsidiaries who have been offered employment by, and have
accepted employment with, New ATAPCO or any member of the New ATAPCO Group,
ATRECO or any member of the ATRECO Group, Gateway or any member of the
Gateway Group, Xxxxxxx or any member of the Xxxxxxx Group and Baltimore
Management or any member of the Baltimore Management Group, respectively.
(b) Each of New ATAPCO, ATRECO, and Gateway agrees that for a period of
two years from the Exchange Date they will not, and they will cause their
Affiliates not to, employ, offer to employ or solicit for employment the
employees set forth on Schedules 4.2(a)(i), 4.2(a)(ii) and 4.2(a)(iii)
without the prior written consent of the party who has offered employment to
such employee as indicated on the relevant Schedule, which consent shall not
be unreasonably withheld. In the event that New ATAPCO, ATRECO or Gateway
employs any of the employees set forth on Schedules 4.2(a)(iv) or 4.2(a)(v),
that party agrees to provide reasonable notice to the other parties of its
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intention to employ such employee and to cooperate with the other parties to
provide a reasonable transition period for such employee.
(c) Each of New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore
Management agree that after the Exchange Date, they shall cause their
employees set forth on Schedules 4.2(a)(i), 4.2(a)(ii), 4.2(a)(iii),
4.2(a)(iv) and 4.2(a)(v) to cooperate with and be made available to the other
parties hereto, upon reasonable notice and during normal business hours, in
connection with matters relating to the services performed by such employee
for the ATAPCO Group prior to the Exchange Date or relating to the management
of each party of its internal affairs during the transition period following
the Effective Time. In the event that the cumulative requests for services of
one or more employees results in an unreasonable burden upon any party hereto,
the parties agree to negotiate a reasonable compensation structure to account
for the burden placed on the party employing the employees subject to such
burden. Each of New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore Management,
on their own behalf and on behalf of each of their respective Subsidiaries,
agree that the employer of any such employee shall not be liable for, and
agree and undertake not to seek or to attempt to seek to hold the employer of
any such employee liable for, the acts or omissions of any such employee in
connection with any services provided hereunder.
SECTION 4.3. Certain Licenses and Permits. Without limiting the
generality of the obligations set forth elsewhere in this Agreement or in the
Ancillary Agreements:
(a) Prior to or at the Effective Time, ATAPCO and the members of the
ATAPCO Group shall take any and all actions necessary or appropriate to
transfer duly and validly all transferable licenses, permits and
authorizations issued by any Governmental Authority as follows:
(i) to entities that will be members of the New ATAPCO Group, all
such licenses, permits and authorizations that relate primarily to
the New ATAPCO Business (including, without limitation, those set
forth on Schedule 4.3(a)(i));
(ii) to entities that will be members of the ATRECO Group, all such
licenses, permits and authorizations that relate primarily to the
ATRECO Business (including, without limitation, those set forth on
Schedule 4.3(a)(ii));
(iii) to entities that will be members of the Gateway Group, all
such licenses, permits and authorizations that relate primarily to
the Gateway Business (including, without limitation, those set
forth on Schedule 4.3(a)(iii));
(iv) to entities that will be members of the Xxxxxxx Group, all
such licenses, permits and authorizations that relate primarily to
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the Xxxxxxx Business (including, without limitation, those set
forth on Schedule 4.3(a)(iv)); and
(v) to entities that will be members of the Baltimore Management
Group, all such licenses, permits and authorizations that relate
primarily to the Baltimore Management Business (including, without
limitation, those set forth on Schedule 4.3(a)(v)).
(b) To the extent any transfers required by Section 4.3(a) are not made
prior to or at the Effective Time, each of New ATAPCO, ATRECO, Gateway,
Xxxxxxx and Baltimore Management shall cause such transfers to be made as
soon as practicable following the Exchange Date and, to the extent possible,
effective at the Effective Time.
(c) The parties hereto shall use their commercially reasonable efforts
to obtain required consents to the transfer and/or assignment of licenses,
permits and authorizations of Governmental Authorities hereunder as
contemplated by this Agreement or any Ancillary Agreement.
SECTION 4.4. Transfer of Agreements. Without limiting the generality of
the obligations set forth elsewhere in this Agreement or in the Ancillary
Agreements:
(a) Prior to or at the Effective Time, ATAPCO and the members of the
ATAPCO Group shall take any and all actions necessary or appropriate to
transfer duly and validly all transferable agreements or contracts of the
ATAPCO Group as follows:
(i) to entities that will be members of the New ATAPCO Group, all
such agreements or contracts that are New ATAPCO Contracts;
(ii) to entities that will be members of the ATRECO Group, all such
agreements or contracts that are ATRECO Contracts;
(iii) to entities that will be members of the Gateway Group, all
such agreements or contracts that are Gateway Contracts;
(iv) to entities that will be members of the Xxxxxxx Group, all
such agreements or contracts that are Xxxxxxx Contracts; and
(v) to entities that will be members of the Baltimore Management
Group, all such agreements or contracts that are Baltimore
Management Business Contracts.
(b) To the extent any transfers required by Section 4.4(a) are not made
prior to or at the Effective Time, each of New ATAPCO, ATRECO, Gateway,
Xxxxxxx and Baltimore Management shall cause such transfers to be made as
soon as practicable following the Exchange Date and, to the extent possible,
effective at the Effective Time.
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(c) The parties hereto shall use their commercially reasonable efforts
to obtain required consents to the transfer and/or assignment of agreements
and contracts hereunder as contemplated by this Agreement or any Ancillary
Agreement.
(d) Subject to the provisions of this Section 4.4, any agreement to
which any of the parties hereto or any of their Subsidiaries is a party that
inures to the benefit of more than one of the New ATAPCO Business, the ATRECO
Business, the Gateway Business, the Xxxxxxx Business and the Baltimore
Management Business shall be assigned in part so that each party shall be
entitled to the rights and benefits inuring to its business under such
agreement.
(e) The assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall be liable for and shall assume and agree to
pay, perform, and fully discharge all obligations of the assignor under such
agreement or, in the case of a partial assignment under Section 4.4(d), such
Assignee's related portion of such obligations as determined in accordance
with the terms of the relevant agreement, where determinable on the face
thereof, and otherwise as determined in accordance with the practice of the
parties prior to the Effective Time.
(f) Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any agreement, in whole
or in part, or any rights thereunder if the agreement to assign or attempt to
assign, without the consent of a third party, would constitute a breach thereof
or in any way adversely affect the rights of the assignor or Assignee thereof.
Until such consent is obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of any party hereto so that
the intended Assignee would not, in fact, receive all such rights, the parties
will cooperate with each other in any arrangement designed to provide for the
intended Assignee the benefits of, and to permit the intended Assignee to
assume liabilities under, any such agreement.
SECTION 4.5. Split Dollar Insurance. The parties agree that all of
ATAPCO's interests in the split dollar insurance Assets and the AFR loan
receivable related to such split dollar insurance Assets will be allocated
between New ATAPCO and ATRECO in accordance with the terms set forth on
Schedule 4.5 and Schedule 1.1(d).
SECTION 4.6. Cash Payments.
(a) ATAPCO shall repay or cause to be repaid from its cash balances all
of the third party debt listed on Schedule 4.6(a) and shall transfer to the
Shared Liability Account cash in the amounts set forth in Section 4.27 and
Section 6.1.
(b) ATAPCO shall take or cause to be taken all necessary actions,
including selling marketable securities, so that sufficient cash shall be
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available to make any repayments or cash transfers contemplated pursuant to
this Agreement.
SECTION 4.7. Placement of Assets. ATAPCO, AI, ATRECO and Gateway, as
applicable, shall be entitled to designate the member within such party's
respective Group to which any Assets are to be transferred pursuant to this
Agreement or any Ancillary Agreement.
SECTION 4.8. Resignations.
(a) Subject to Section 4.8(e), ATAPCO shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the ATRECO Group
in which they serve, and ATRECO shall cause all its directors, officers and
employees to resign, effective no later than the Effective Time, from all
positions as officers or directors of any members of the New ATAPCO Group in
which they serve.
(b) Subject to Section 4.8(e), ATAPCO shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the Gateway
Group in which they serve, and Gateway shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any members of the New ATAPCO
Group in which they serve.
(c) Subject to Section 4.8(e), Gateway shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the ATRECO Group
in which they serve, and ATRECO shall cause all its directors, officers and
employees to resign, effective no later than the Effective Time, from all
positions as officers or directors of any members of the Gateway Group in
which they serve.
(d) Subject to Section 4.8(e), (x) any person who is not a member of
the New ATAPCO Stockholder Group shall resign, no later than the Effective
Time, from all positions as directors of any member of the New ATAPCO Group,
(y) any Person who is not a member of the ATRECO Stockholder Group shall
resign, no later than the Effective Time, from all positions as directors of
any member of the ATRECO Stockholder Group, and (z) any Person who is not a
member of the Gateway Stockholder Group shall resign, no later than the
Effective Time, form all positions as directors of any member of the Gateway
Group.
(e) No Person shall be required by any party hereto to resign from any
position or office with another party hereto if such Person is disclosed in
the Information Statement, or is otherwise designated by New ATAPCO, ATRECO
and Gateway, as a Person who is to hold such position or office following the
Reorganization.
SECTION 4.9. Directors as of the Effective Time. On or prior to the
Exchange Date, ATAPCO, as the sole stockholder of AI, ATRECO and Gateway,
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shall take all necessary action to cause the Boards of Directors of AI,
ATRECO and Gateway to consist, as of the Effective Time, of the individuals
identified in Schedule 4.9.
SECTION 4.10. Xxxxxxx; Baltimore Management: On or prior to the
Exchange Date:
(a) Xxxxxxx will have a limited liability company agreement
substantially in the form of Schedule 4.10(a) hereto.
(b) Baltimore Management will have a limited liability company
agreement substantially in the form of Schedule 4.10(b) hereto.
SECTION 4.11. Charters. On or prior to the Exchange Date:
(a) the Charter of ATRECO will be amended as set forth in Schedule
4.11(a).
(b) the Charter of Gateway will be amended as set forth in Schedule
4.11(b).
(c) the Certificate of Incorporation of AI will be amended as set forth
in Schedule 4.11(c).
SECTION 4.12. No Appraisal Rights. Because written consents approving
and consenting to the Reorganization will be obtained from each holder of
ATAPCO Common Stock, such holders will not have objecting stockholder rights
or appraisal rights under applicable law in connection with the
Reorganization.
SECTION 4.13. Other Transactions. On or prior to the Exchange Date,
ATAPCO, ATRECO and Gateway shall consummate those other transactions in
connection with the Reorganization that are contemplated by the ruling
request submission by ATAPCO to the IRS dated June 26, 1998 (and any
modifications, supplements or additions thereto in connection with the
rulings received from the IRS), and not specifically referred to in this
Agreement, as such transactions will be restated in a letter from Xxxxxx &
Xxxxxxxxx to ATAPCO, AI, ATRECO and Gateway on or prior to the Exchange Date.
After the Exchange Date, New ATAPCO, ATRECO and Gateway will exercise good
faith commercially reasonable efforts to consummate as promptly as
practicable all other transactions which must be consummated in order fully
to complete the Reorganization and any of the transactions contemplated
hereby or by any of the Ancillary Agreements.
SECTION 4.14. Conduct of Business Prior to Exchange Date. During the
period from the date of this Agreement through the Effective Time, other than
in connection with the transactions contemplated by this Agreement and the
Ancillary Agreements, each of the members of the ATAPCO Group (including all
entities that will be members of the New ATAPCO Group, the ATRECO Group, the
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Gateway Group, the Xxxxxxx Group and the Baltimore Management Group) shall --
(i) in all material respects, carry on their respective businesses in the
ordinary course consistent with past practice and, to the extent consistent
therewith, use reasonable efforts to preserve intact all existing Assets and
business organizations, keep available the services of current officers and
key employees, and preserve any and all significant present relationships
with customers, suppliers and others with whom these entities have
significant business dealings and (ii) not take or fail to take any action
that would reasonably be expected to result in ATAPCO receiving a
Supplemental Ruling that would not satisfy Section 5.1(b).
SECTION 4.15. Directors' and Officers' Indemnification and Insurance.
New ATAPCO shall maintain in effect in its certificate of incorporation and
by-laws for a period of six years after the Effective Time, the current
provisions regarding limitation of liability of directors and indemnification
of officers, directors and employees contained in the certificate of
incorporation and by-laws of ATAPCO. ATAPCO also agrees that prior to the
Exchange Date ATAPCO shall purchase prepaid directors' and officers'
liability insurance policies and fiduciary liability policies (which provide
a level of protection to the insureds equivalent to that under ATAPCO's
policies in effect as of the date of the Agreement) which shall provide
continuing coverage for the current directors and officers of ATAPCO for a
period of six years after the Exchange Date for events that occurred on or
prior to the Exchange Date. ATRECO and Gateway agree (i) to guarantee the
indemnity obligations set forth in the New ATAPCO certificate of
incorporation and by-laws and (ii) to be jointly and severally liable for any
payments to any directors, officers or employees contemplated in the by-laws
with respect to claims arising from facts or events that occurred at or
before the Effective Time. Any amounts paid to obtain any insurance coverage
or in satisfaction of the indemnification obligations pursuant to this
Section 4.15 made after the Exchange Date shall be Shared Liabilities.
SECTION 4.16. Year 2000. From and after the Effective Time, New
ATAPCO, ATRECO and Gateway agree to cooperate fully with one another to
address Year 2000 compliance issues; provided, that each party shall bear its
own expenses and Liabilities related to Year 2000 compliance issues.
SECTION 4.17. Shared Assets. From and after the Effective Time, each
of New ATAPCO, ATRECO and Gateway shall have full ownership, and all rights
and privileges attendant thereto, to all Assets set forth on Schedule 4.17.
SECTION 4.18. Further Assurances. In case at any time after the
Effective Time any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement and the Ancillary Agreements, the
proper officers of New ATAPCO, ATRECO, Gateway, Xxxxxxx, Baltimore Management
and their Affiliates shall take all such necessary action. Without limiting
the foregoing, New ATAPCO, ATRECO, Gateway, Xxxxxxx, Baltimore Management and
their Affiliates shall use their commercially reasonable efforts promptly to
obtain all consents and approvals, to enter into all amendatory agreements
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and to make all filings and applications that may be required for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including, without limitation, all applicable
governmental and regulatory filings.
SECTION 4.19. Limited Representations or Warranties. Each of the
parties hereto agrees that no party hereto is, in this Agreement, any
Ancillary Agreement or in any other agreement or document contemplated by
this Agreement, any Ancillary Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of Assets being
transferred or retained except that (i) ATRECO warrants to AI good marketable
fee simple title to the Vantage property, subject to the exceptions taken in
ATRECO's title insurance policy relating to the Vantage property, and
provided that ATRECO's liability for breach of this warranty shall be limited
to the proceeds, if any, that ATRECO receives under the terms of such title
insurance policy, and (ii) AI warrants to ATRECO good marketable fee simple
title to the Interstate property, subject to the exceptions taken in ATREPO's
title insurance policy relating to the Interstate property, and provided that
AI's liability for breach of this warranty shall be limited to the proceeds,
if any, that AI receives under the terms of such title insurance policy. It
is also agreed that, notwithstanding anything to the contrary otherwise
expressly provided in the relevant Conveyancing and Assumption Instrument,
all Assets either transferred to or retained by the parties, as the case may
be, shall be "as is" and that (subject to Section 4.18) the party which such
Assets are to be transferred to or retained by hereunder shall bear the
economic and legal risk that such party's or any of the Subsidiaries' title
to any such Assets shall be other than good and marketable and free from
encumbrances. Similarly, each party hereto agrees that, except as otherwise
expressly provided in the relevant Conveyancing and Assumption Instrument, no
party hereto is representing or warranting in any way that the obtaining of
any consents or approvals, the execution and delivery of any amendatory
agreements and the making of any filings or applications contemplated by this
Agreement or any Ancillary Agreement will satisfy the provisions of any or all
applicable agreements or the requirements of any or all applicable laws or
judgments, it being agreed that the party which any Assets are transferred to
or retained by shall bear the economic and legal risk that any necessary
consents or approvals are not obtained or that any requirements of laws or
judgments are not complied with.
SECTION 4.20. Guarantees. Without limiting the generality of the
obligations set forth in this Agreement and the Ancillary Agreements:
(a) (i) Except as otherwise specified in any Ancillary Agreement,
ATAPCO, ATRECO and Gateway shall use their commercially reasonable efforts to
have, on or prior to the Exchange Date, or as soon as practicable thereafter
(but, except as otherwise provided, in no event more than 30 days
thereafter), ATAPCO and any member of the New ATAPCO Group removed as
guarantor of or obligor for any ATRECO Liability or Gateway Liability,
including, without limitation, in respect of those guarantees set forth on
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Schedule 4.20(a)(i) to the extent that they relate to ATRECO Liabilities or
Gateway Liabilities.
(ii) Without limiting the generality of Section 4.20(a)(i) New
ATAPCO and Gateway each acknowledge, recognize and agree that it will not be
possible for Gateway to procure the release of New ATAPCO from all Gateway
Liabilities arising from ATAPCO's guarantee of the obligations of Gateway in
connection with its purchases and sales of oil and gas on or prior to the
Exchange Date. New ATAPCO and Gateway therefore agree that if Gateway
exercises diligent good faith efforts to comply with this Section 4.20(a)(ii)
with respect to such guarantees but is unable to procure the release of New
ATAPCO from such guarantees, including because the Persons guaranteed thereby
will not promptly agree to the release of such guarantee or, if the Gateway
Business to which such guarantee relates is conducted by a Subsidiary of
Gateway, will not promptly agree to the substitution of such guarantee by a
guarantee by Gateway, or require further information or explanation in
connection therewith or in connection with the circumstances relating to the
transactions contemplated hereby insofar as they effect such guarantee, then
(i) Gateway will not be deemed to be in breach of this Section 4.20(a)(ii) if
it continues to exercise diligent good faith efforts to effect the release of
such guarantees and in fact does effect the full and unconditional release of
such guarantees within six months after the Exchange Date, and (ii) in such
circumstances and during such period, Gateway or its Subsidiary may continue
to effect transactions in the Gateway Business to which such guarantees
relate after the Exchange Date, notwithstanding that such transactions will
be guaranteed by such guarantees which have not yet been released. Without
limiting the generality of Section 6.4, the Gateway Liabilities or alleged
Gateway Liabilities with respect to which Gateway shall indemnify, defend and
hold harmless the New ATAPCO Indemnitees under Section 6.4 shall include any
and all Liabilities of New ATAPCO and the New ATAPCO Indemnitees arising in
connection with any such guarantees by ATAPCO of such Gateway Liabilities
which have not been fully released. If the release of New ATAPCO from any
guarantees described in this Section 4.20(a)(ii) are not obtained by Gateway
on or prior to June 30, 1999, Gateway will not undertake any transaction
after such date in reliance on such guarantees or take any action which could
result in New ATAPCO becoming obligated to perform under such guarantees, and
Gateway will notify in writing the beneficiaries of such guarantees on or
before June 30, 1999, that it may not undertake any further transactions in
reliance on such guarantees. Beginning on May 1, 1999, Gateway will promptly
notify New ATAPCO of any transactions undertaken by Gateway in reliance on
any guarantees from which New ATAPCO has not been released. Gateway will
provide New ATAPCO promptly after receipt written evidence of the release of
each guarantee described in this Section 4.20(a)(ii).
(b) Except as otherwise specified in any Ancillary Agreement, ATAPCO,
ATRECO and Gateway shall use their commercially reasonable efforts to have,
on or prior to the Exchange Date, or as soon as practicable thereafter (but,
except as otherwise provided, in no event more than 30 days thereafter), any
member of the ATRECO Group removed as guarantor of or obligor for any New
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ATAPCO Liability or Gateway Liability, including, without limitation, in
respect of those guarantees set forth on Schedule 4.20(b) to the extent that
they relate to New ATAPCO Liabilities or Gateway Liabilities.
(c) Except as otherwise specified in any Ancillary Agreement, ATAPCO,
ATRECO and Gateway shall use their commercially reasonable efforts to have,
on or prior to the Exchange Date, or as soon as practicable thereafter (but,
except as otherwise provided, in no event more than 30 days thereafter), any
member of the Gateway Group removed as guarantor of or obligor for any New
ATAPCO Liability or ATRECO Liability, including, without limitation, in
respect of those guarantees set forth on Schedule 4.20(c) to the extent that
they relate to ATRECO Liabilities or New ATAPCO Liabilities.
(d) Subject to Section 4.20(a)(ii), if ATAPCO, ATRECO or Gateway is
unable to obtain, or to cause to be obtained, any such required removal as
set forth in clauses (a)-(c) of this Section 4.20, the applicable guarantor
or obligor shall continue to be bound as such and, unless not permitted by
law or the terms thereof, the relevant beneficiary shall or shall cause one
of its Subsidiaries, as agent or subcontractor for such guarantor or obligor,
to pay, perform and discharge fully all the obligations or other Liabilities
of such guarantor or obligor thereunder from and after the date hereof.
(e) The parties shall use commercially reasonable efforts to transfer
any guarantees (i) with respect to any Xxxxxxx Liabilities to Xxxxxxx and
(ii) with respect to any Baltimore Management Liabilities to Baltimore
Management, including, without limitation, in respect of those guarantees set
forth on Schedule 4.20(e) to the extent that they relate to Xxxxxxx
Liabilities or Baltimore Management Liabilities. Any guarantees described
in the preceding sentence that can not be so transferred will be retained by
New ATAPCO, ATRECO or Gateway, as the case may be. Any Liabilities
resulting from or arising out of or in connection with guarantees described
in this Section 4.20(e) are Shared Liabilities.
SECTION 4.21. Witness Services. At all times from and after the
Exchange Date, each of New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore
Management shall use their commercially reasonable efforts to make available
to the others, upon reasonable written request, its and its Subsidiaries'
officers, directors, employees and agents as witnesses to the extent that (i)
such Persons may reasonably be required in connection with the prosecution or
defense of any Action in which the requesting party may from time to time be
involved and (ii) there is no conflict in the Action between the requesting
party and New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore Management, as
applicable. A party providing witness services to another party under this
Section 4.21 shall be entitled to receive from the recipient of such
services, upon the presentation of invoices therefor, payments for such
amounts, relating to disbursements and other out-of-pocket expenses (which
shall be deemed to exclude the costs of salaries and benefits of employees
who are witnesses), as may be reasonably incurred in providing such witness
services.
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SECTION 4.22. Compliance with IRS Ruling.
(a) ATAPCO has or will submit to the IRS to the extent necessary such
supplemental information and documentation regarding the Agreement, the
Ancillary Agreements, and the transactions contemplated hereby and thereby as
is approved by ATAPCO, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxx
Xxxxxxxxxx in order for the IRS to confirm the ruling received by ATAPCO from
the IRS on November 12, 1998 (the "IRS Ruling") in a supplemental ruling (the
"Supplemental Ruling").
(b) Each of ATAPCO, AI, New ATAPCO, ATRECO and Gateway shall comply and
shall cause its respective Subsidiaries to comply with, and otherwise not
take action inconsistent with, the factual information, representations and
statements made to the IRS in connection with the request by ATAPCO for the
IRS Ruling and the Supplemental Ruling, which factual information,
representations and statements will be restated in a letter from Xxxxxx &
Xxxxxxxxx to ATAPCO, AI, ATRECO and Gateway dated not later than the Exchange
Date and delivered to ATAPCO as a condition precedent to consummation of the
ATAPCO Merger and the Share Exchanges.
(c) (i) In the event that New ATAPCO, its Subsidiaries, its Affiliates
or its stockholders takes or fails to take any action that causes
or results in the transactions contemplated by this Agreement and
the Ancillary Agreements (including the Share Exchanges) to be
taxable (other than as contemplated in the IRS Ruling and the
Supplemental Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway,
the Subsidiaries of any of the foregoing, or the stockholders of
any of the foregoing, New ATAPCO and its Subsidiaries shall
indemnify and hold harmless ATRECO, Gateway, their Subsidiaries and
their stockholders from and against any and all resulting Taxes and
Other Tax Costs.
(ii) In the event that ATRECO, its Subsidiaries, its Affiliates or
its stockholders takes or fails to take any action that causes or
results in the transactions contemplated by this Agreement and the
Ancillary Agreements (including the Share Exchanges) to be taxable
(other than as contemplated in the IRS Ruling and the Supplemental
Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway, the
Subsidiaries of any of the foregoing, or the stockholders of any of
the foregoing, ATRECO and its Subsidiaries shall indemnify and hold
harmless New ATAPCO, Gateway, their Subsidiaries and their
stockholders from and against any and all resulting Taxes and Other
Tax Costs.
(iii) In the event that Gateway, its Subsidiaries, its Affiliates
or its stockholders takes or fails to take any action that causes
or results in the transactions contemplated by this Agreement and
the Ancillary Agreements (including the Share Exchanges) to be
taxable (other than as contemplated in the IRS Ruling and the
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Supplemental Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway,
the Subsidiaries of any of the foregoing, or the stockholders of
any of the foregoing, Gateway and its Subsidiaries shall indemnify
and hold harmless New ATAPCO, ATRECO, their Subsidiaries and their
stockholders from and against any and all resulting Taxes and Other
Tax Costs.
(iv) Notwithstanding the foregoing Sections 4.22(c)(i), (ii) and
(iii), no party shall have any Liability to any other party under
this Section 4.22(c) for actions or omissions that relate to the
preparation and filing of Pre-Exchange Date Returns (as defined in
the Tax Allocation Agreement) or for taking any actions in
compliance with the provisions of this Agreement, the Ancillary
Agreements or the factual information, statements or
representations set forth in the correspondence and other
documentation provided to the IRS in connection with the IRS Ruling
and Supplemental Ruling.
(v) Except as specifically provided in this Section 4.22(c), no
party to this Agreement shall have any Liability or responsibility
for any Taxes imposed on any ATAPCO stockholder, any AI
stockholder, any ATRECO Stockholder, any Gateway Stockholder, any
New ATAPCO Stockholder, or any Person or entity that is or becomes
a stockholder of ATRECO, Gateway or New ATAPCO. Notwithstanding
Section 11.2 or any other provision of this Agreement to the
contrary, the provisions of this Section 4.22(c)(v) shall supersede
and take priority over any provision of any Ancillary Agreement
(including the Tax Allocation Agreement) to the contrary, even if
such Ancillary Agreement is executed after the date of this
Agreement.
.
SECTION 4.23. Transfers Not Effected Prior to the Share Exchanges;
Transfers Deemed Effective as of the Exchange Date. To the extent that any
transfers contemplated by this Agreement or any Ancillary Agreement shall not
have been consummated on or prior to the Exchange Date, the parties shall
cooperate to effect such transfers as promptly following the Exchange Date as
shall be practicable. Nothing herein shall be deemed to require the transfer
of any Assets or the assumption of any Liabilities which by their terms or
operation of law cannot be transferred; provided, however, that the parties
hereto and their respective Subsidiaries shall cooperate to seek to obtain
any necessary consents or approvals for the transfer of all Assets and
Liabilities contemplated to be transferred pursuant to this Agreement or any
Ancillary Agreement. In the event that any such transfer of Assets or
Liabilities has not been consummated, from and after the Exchange Date the
party retaining such Asset or Liability shall hold such Asset in trust for
the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such Liability for the account of the party
by whom such Liability is to be assumed pursuant hereto, as the case may be,
and take such other action as may be reasonably requested by the party to
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whom such Asset is to be transferred, or by whom such Liability is to be
assumed, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such
Asset or Liability been transferred or assumed as contemplated hereby. As
and when any such Asset or Liability becomes transferable, or assumable, such
transfer or assumption shall be effected forthwith for no additional
consideration. The parties agree that, as of the Exchange Date, each party
hereto shall be deemed to have acquired complete and sole beneficial
ownership over all of the Assets, together with all rights, powers and
privileges incident thereto, and shall be deemed to have assumed in
accordance with the terms of this Agreement all of the Liabilities, and all
ons and responsibilities incident thereto, which such party is entitled to
acquire or required to assume pursuant to the terms of this Agreement and any
Ancillary Agreement.
SECTION 4.24. Conveyancing and Assumption Instruments. In connection
with the transfers of Assets and the assumptions of Liabilities contemplated
by this Agreement, the parties shall execute or cause to be executed by the
appropriate entities the Conveyancing and Assumption Instruments in
substantially the form contemplated hereby for transfers to be effected
pursuant to the laws of one of the states of the United States or, if not
appropriate for a given transfer, and for transfers to be effected pursuant
to non-U.S. laws, in such other form as the parties shall reasonably agree,
including the transfer of real property with deeds as may be appropriate.
The transfer of capital stock shall be effected by means of delivery of stock
certificates and executed stock powers and notation on the stock record books
of the corporation or other legal entities involved, or by such other means
as may be required in any non-U.S. jurisdiction to transfer title to stock
and, to the extent required by applicable law, by notation on public
registries.
SECTION 4.25. Ancillary Agreements. On or prior to the Exchange Date,
each of ATAPCO, AI, ATRECO and Gateway shall enter into, and/or (where
applicable) shall cause members of their respective Groups and the Xxxxxxx
Group and the Baltimore Management Group, as applicable, to enter into, the
Ancillary Agreements and any other agreements in respect of the
Reorganization reasonably necessary or appropriate in connection with the
transactions contemplated hereby and thereby.
SECTION 4.26. Preparation of Audited Balance Sheets. Prior to the date
hereof the parties have retained Ernst & Young, LLP (the "Firm") to prepare
the New ATAPCO Balance Sheet, the ATRECO Balance Sheet, the Gateway Balance
Sheet, the Xxxxxxx Balance Sheet and the Baltimore Management Balance Sheet
in the manner contemplated in this Agreement and the Schedules hereto. Each
of New ATAPCO, ATRECO and Gateway agree to, and agree to cause Xxxxxxx and
Baltimore Management to, provide all reasonably requested information,
assistance and cooperation in connection with preparation of the balance
sheets and to use their reasonable best efforts to ensure that the balance
sheets are prepared in the manner contemplated by this Agreement and the
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Schedules hereto. In the event of any discrepancy between the Assets and
Liabilities set forth on any of the balance sheets and the division of Assets
and Liabilities set forth herein, the parties agree to cooperate with one
another to promptly resolve any such disputes. If the parties are unable to
resolve any such discrepancies themselves within 30 days of the delivery of
the balance sheets by the Firm, the parties shall submit their proposed
resolutions of the discrepancies to the Firm within 15 days thereafter. The
Firm shall select the resolution it deems appropriate, and such determination
shall be final and binding on all the parties. All costs and expenses of the
Firm in connection with its services under this Section 4.26 shall be Shared
Liabilities.
SECTION 4.27. Unpaid Senior Notes. Prior to the Effective Time, ATAPCO
shall assign to Baltimore Management, and Baltimore Management shall assume
from ATAPCO, all obligations relating to or arising out of or in connection
with the Unpaid Senior Notes. Baltimore Management shall apply funds from
the Shared Liability Account (as defined in Section 6.1), or such other
account of Baltimore Management (the "Other Account") into which funds may be
deposited for this purpose, to the payment, on or about January 4, 1999, of
any and all principal and interest due on the Unpaid Senior Notes and any
prepayment penalties relating thereto. Any Liability relating to or arising
out of or in connection with the Unpaid Senior Notes is a Shared Liability.
The parties agree that prior to the Effective Time, ATAPCO shall transfer to
the Shared Liability Account or the Other Account $48.3 million in cash to be
paid out pursuant to this Section 4.27.
SECTION 4.28. Lease Liability Adjustments. In the event that any
party's usage of the space in The Xxxxxxxxx Building increases or decreases
by more than 5% as a result of the initial build-out of such space to
accommodate the needs of the parties, the parties agree that the percentages
set forth in Sections 1.1(w)(iii), 1.1(am)(iii), 1.1(av)(iii), 1.1(bn)(ii)
and 1.1(cl)(iii) and the corresponding liability for the total costs incurred
following the Effective Time under ATAPCO's and ATREPO's existing leases for
the office space on the 14th, 23rd and 24th floors in The Xxxxxxxxx Building
shall be adjusted to reflect such change.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.1. Conditions to the ATAPCO Merger and Share Exchanges. The
consummation of the ATAPCO Merger and the Share Exchanges shall be subject to
the satisfaction or waiver of the following conditions at or prior to the
effectiveness of the ATAPCO Merger, in the case of conditions to the ATAPCO
Merger, and prior to the Effective Time, in the case of the Share Exchanges:
(a) ATAPCO Stockholder Consents.
(i) Each New ATAPCO Stockholder shall have submitted to ATAPCO a
duly executed New ATAPCO Consent, Letter of Representations and
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Power of Attorney and no such Consent, Letter of Representations
and Power of Attorney shall have been revoked prior to 12:01 p.m.,
Maryland time, on December 29, 1998 (after which time such
Consents, Letters of Representations and Powers of Attorney by
their terms shall be irrevocable).
(ii) Each ATRECO Stockholder shall have submitted to ATAPCO a duly
executed ATRECO Consent, Letter of Representations and Power of
Attorney and no such Consent, Letter of Representations and Power
of Attorney shall have been revoked prior to 12:01 p.m., Maryland
time, on December 29, 1998 (after which time such Consents, Letters
of Representations and Powers of Attorney by their terms shall be
irrevocable).
(iii) Each Gateway Stockholder shall have submitted to ATAPCO a
duly executed Gateway Consent, Letter of Representations and Power
of Attorney and no such Consent, Letter of Representations and
Power of Attorney shall have been revoked prior to 12:01 p.m.,
Maryland time, on December 29, 1998 (after which time such
Consents, Letters of Representations and Powers of Attorney shall
by their terms be irrevocable).
(b) IRS Ruling. ATAPCO shall have obtained the Supplemental Ruling
from the IRS confirming the IRS Ruling.
(c) No Injunction or Restraint. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Authority preventing the consummation of
any transaction that is part of the Reorganization shall be in effect;
provided, however, that each of the parties shall have used its best efforts
to prevent the entry of any such temporary restraining order, injunction or
other order and to appeal as promptly as possible any injunction or other
order that may be entered.
(d) Resignations. All resignations contemplated by Section 4.8 shall
have been received and be acceptable in form and substance.
(e) Ancillary Agreements. Each of the Ancillary Agreements shall have
been executed by all necessary parties.
(f) Other Transactions.
(i) In the case of the ATAPCO Merger, every transaction or other
action required by this Agreement or any Ancillary Agreement to be
taken or completed prior to the effectiveness of the ATAPCO Merger
shall have been taken or completed and every transaction or other
action required by this Agreement or any Ancillary Agreement to be
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taken or completed after the effectiveness of the ATAPCO Merger
shall not have been taken or completed.
(ii) In the case of the Share Exchanges, every transaction and
other action (including effecting the ATAPCO Merger) required by
this Agreement or any Ancillary Agreement to be taken or completed
prior to the Effective Time shall have been taken or completed.
(g) Xxxxxx & Xxxxxxxxx Letter and Opinion.
(i) ATAPCO, AI, ATRECO and Gateway shall have received an opinion
from Xxxxxx & Xxxxxxxxx, Chartered, in form and substance
satisfactory to them, (1) restating all of the factual information,
representations and statements provided to the IRS in connection
with the IRS Ruling and the Supplemental Ruling and on which the
IRS, in the opinion of Xxxxxx & Xxxxxxxxx, relied in issuing the
IRS Ruling and the Supplemental Ruling and (2) confirming that to
the extent the facts relating to the transactions described in this
Agreement, the Ancillary Agreements and the Information Statement
differ from or were not described in the factual material submitted
to the IRS, in the opinion of Xxxxxx & Xxxxxxxxx, such differences
and/or omissions will have no effect on the validity of the IRS
Ruling and the Supplemental Ruling. Xxxxxx & Chevalier's opinions
will be based on the facts existing at the Effective Time, and no
assurance can be given that factual changes subsequent to the
Effective Time (unless otherwise described in this Agreement, the
Ancillary Agreements, the Information Statement or the factual
information, representation and statement provided to the IRS in
connection with the IRS Ruling and the Supplemental Ruling) will
not have a material effect on the tax treatment of the transaction.
(ii) ATAPCO, AI, ATRECO and Gateway shall have received an opinion
from Xxxxxx & Xxxxxxxxx, in form and substance satisfactory to
them, as to certain federal income tax consequences of the
Reorganization and certain related matters.
(h) Fairness Opinion. The opinion of Warburg Dillon Read, delivered to
the Board of Directors of ATAPCO on November 19, 1998, to the effect
that the Reorganization is fair to the stockholders of ATAPCO from a
financial point of view, shall not have been withdrawn prior to the
Effective Time.
(i) Schedules. Each of the Schedules shall have been agreed to by the
parties and each of Xxxxx X. Xxxxxxxxxx, Xxxxx X. Xxxxxxxxx, Xx. and
Xxxxxx X. Xxxxxxxxxx.
(j) Certification. Each of Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxx and
Xxxxxx Xxxxxxxxxx shall have executed a certificate in the form attached
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hereto as Schedule 5.1(i), dated as of the Exchange Date, certifying
that all Conditions Precedent have been satisfied or waived.
ARTICLE VI. SHARED LIABILITIES AND INDEMNIFICATION
SECTION 6.1. Shared Liability Account. Prior to the Effective Time,
ATAPCO will deposit into an account (the "Shared Liability Account")
controlled by Baltimore Management, in addition to the cash set forth in
Section 4.27, (i) $3 million in cash in the event that the sale of the
Northern Computers Business has not been completed prior to the Effective
Time or (ii) $10 million in cash in the event the sale of the Northern
Computers Business has been completed prior to the Effective Time. The
parties agree that all cash available from the disposition of any Xxxxxxx
Business (or any portion thereof) shall be deposited in the Shared Liability
Account so as to increase the balance in such account (not including any
amounts transferred to the Shared Liability Account under Section 4.27) from
time to time to $10 million. If at any time the amount in the Shared
Liability Account falls below $3 million, Baltimore Management shall make a
request to Xxxxxxx to provide funds to increase the amount in the Shared
Liability Account to $10 million (or such lower amount as may be permitted
following the first and second anniversaries of the Exchange Date) and
Xxxxxxx shall provide such funds to the extent such funds are available to
Xxxxxxx at the time of the request. If at any time Xxxxxxx does not have
sufficient funds to provide to the Shared Liability Account as required by
the preceding sentence, Baltimore Management shall request that each of New
ATAPCO, ATRECO and Gateway directly contribute to the Shared Liability
Account an amount equal to the amount of funds required to increase the
Shared Liability Account to the required level multiplied by the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage, respectively,
and each of New ATAPCO, ATRECO and Gateway agrees to make such contributions
upon such request. On the first anniversary of the Exchange Date, the
aggregate amount to be maintained in the Shared Liability Account shall be
reduced to $6.7 million and on the second anniversary of the Exchange Date
the aggregate amount to be maintained in the Shared Liability Account shall
be reduced to $3.3 million through the payment of any funds in excess of such
amounts to New ATAPCO, ATRECO and Gateway in accordance with the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage, respectively;
provided that if any of New ATAPCO, ATRECO or Gateway shall object to any
such reduction in writing sent to the other parties prior to the relevant
anniversary of the Exchange Date, such reduction shall not take place. Prior
to the third anniversary of the Exchange Date, the parties will negotiate in
good faith regarding extending the Shared Liability Account if appropriate
and necessary to provide resources for fulfilling the parties' continuing
obligations after that date under this Agreement and the Ancillary
Agreements. In the absence of such an extension, the Shared Liability
Account shall be terminated on the third anniversary of the Exchange Date;
provided, that if any Third Party Claims (as defined herein) with respect to
Shared Liabilities are pending or threatened on such date, the Shared
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Liability Account shall not be terminated until all such Third Party Claims
have been finally resolved. Upon termination, the funds remaining in the
Shared Liability Account shall be distributed to New ATAPCO, ATRECO and
Gateway in accordance with the New ATAPCO Percentage, the ATRECO Percentage
and the Gateway Percentage, respectively. At the time Baltimore Management
is liquidated or New ATAPCO, ATRECO and Gateway cease to own at least 50% of
the equity interest in Baltimore Management, the Shared Liability Account
shall be transferred to an escrow agent mutually acceptable to New ATAPCO,
ATRECO and Gateway, and such escrow agent will thereafter manage the Shared
Liability Account subject to the terms and conditions of this Agreement and
any Ancillary Agreements.
SECTION 6.2. Payment of Shared Liabilities from Shared Liability
Account. Following the Effective Time, Baltimore Management shall apply the
funds in the Shared Liability Account solely to the payment of Shared
Liabilities. All requests for payment of any Shared Liability shall be
forwarded to Baltimore Management promptly after receipt by one the parties
of a request for payment of a Shared Liability from a third party or a
party's discovery that it has previously paid a Shared Liability using its
own funds or a party becomes legally obligated to pay a Shared Liability.
Upon receipt of any such payment request for any amounts less than $50,000,
Baltimore Management shall make the appropriate disbursements. For payment
requests equal to or in excess of $50,000, Baltimore Management shall,
immediately upon receipt of the same, forward by facsimile a copy of such
payment request to each party. Each party shall have two business days in
the case of any request for payment of an amount between $50,000 and $250,000
and five business days in the case of any request for payment of an amount in
excess of $250,000 from the receipt of such payment request to notify
Baltimore Management and the other parties of any objections to the same;
provided, however, that the failure to make such objections shall not prevent
any party to further dispute the right to make such payment in whole or in
part. Unless a party makes any such objection within the designated period,
Baltimore Management shall make the appropriate disbursement. Baltimore
Management will provide New ATAPCO, ATRECO and Gateway with reports on a
monthly basis setting forth the disbursements that have been made from the
Shared Liability Account. All disputes as to whether any payment from the
Shared Liability Account was in satisfaction of a Shared Liability or whether
a requested payment should be made from the Shared Liability Account shall be
resolved in accordance with Article IX hereof.
SECTION 6.3. Other Provisions Regarding Shared Liabilities.
(a) If a party has paid or becomes obligated to pay any Shared
Liability and there are insufficient funds in the Shared Liability Account to
satisfy the payment request submitted to Baltimore Management in accordance
with Section 6.2 with respect to such Shared Liability, subject to the terms
of Section 6.2, Baltimore Management shall disburse all remaining funds from
the Shared Liability Account as appropriate and notify the other two parties
of the amount each such party owes to the requesting party in respect of such
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Shared Liability. Promptly following receipt of such notice, the other two
parties will pay the appropriate amounts to the requesting party.
(b) If a party has paid or becomes obligated to pay any Shared
Liability after the termination of the Shared Liability Account, each of the
other two parties will pay its applicable share of the Shared Liability to
the party which has paid or become obligated to pay such Shared Liability
promptly after receiving notice from the paying party.
(c) In the event that any of New ATAPCO, ATRECO or Gateway
(i) liquidates, dissolves or undertakes any corporate reorganization and
there is no successor entity contractually obligated to satisfy any such
party's obligations under this Agreement following such transaction, (ii) is
legally discharged from its obligations under this Agreement, or (iii) is
unable to satisfy its obligations under this Agreement due to the pendency of
any federal or state bankruptcy or similar proceeding (in any such
circumstance, a "Dissolved Party"), then for all purposes under this
Agreement or any Ancillary Agreement the remaining parties shall be liable
for a percentage of the Shared Liabilities equal to the quotient of (i) each
party's original applicable percentage, divided by (ii) 100 minus the
original applicable percentage of the Dissolved Party. Notwithstanding the
above sentence, in no event shall such party's acceptance of such Liability
be considered a release or novation or otherwise preclude such party from
seeking indemnification for its increased costs hereunder from a Dissolved
Party.
(d) The parties agree to enter into one or more "common interest"
agreements in a form to be agreed upon in respect of third-party claims
relating to any Shared Liabilities.
SECTION 6.4. Indemnification Obligations.
(a) In addition to the indemnification obligations specifically set
forth elsewhere in this Agreement or in any Ancillary Agreement, the parties
shall have the indemnification obligations set forth in this Article VI.
(b) Indemnification by New ATAPCO. Except as otherwise specifically
set forth in any provision of this Agreement or of any Ancillary Agreement,
New ATAPCO shall indemnify, defend and hold harmless the ATRECO Indemnitees
and the Gateway Indemnitees from and against any and all Indemnifiable Losses
of the ATRECO Indemnitees and the Gateway Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the New ATAPCO Liabilities
or alleged New ATAPCO Liabilities or (ii) any breach by New ATAPCO or any
member of the New ATAPCO Group of any provision of this Agreement or any
Ancillary Agreement.
(c) Indemnification by ATRECO. Except as otherwise specifically set
forth in any provision of this Agreement or of any Ancillary Agreement,
ATRECO shall indemnify, defend and hold harmless the New ATAPCO Indemnitees
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and the Gateway Indemnitees from and against any and all Indemnifiable Losses
of the New ATAPCO Indemnitees and the Gateway Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the ATRECO Liabilities or
alleged ATRECO Liabilities or (ii) any breach by ATRECO or any member of the
ATRECO Group of any provision of this Agreement or any Ancillary Agreement.
(d) Indemnification by Gateway. Except as otherwise specifically set
forth in any provision of this Agreement or of any Ancillary Agreement,
Gateway shall indemnify, defend and hold harmless the New ATAPCO Indemnitees
and the ATRECO Indemnitees from and against any and all Indemnifiable Losses
of the New ATAPCO Indemnitees and the ATRECO Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the Gateway Liabilities or
alleged Gateway Liabilities or (ii) any breach by Gateway or any member of the
Gateway Group of any provision of this Agreement or any Ancillary Agreement.
SECTION 6.5. Procedures for Indemnification With Respect to Third Party
Claims.
(a) The provisions of this Section 6.5 are applicable to the
indemnification obligations of the parties hereto to the extent those
obligations relate to Third Party Claims (as defined below) and are not the
subject of the provisions of Section 6.6.
(b) Third Party Claims. If a claim or demand is made against a New
ATAPCO Indemnitee, an ATRECO Indemnitee or a Gateway Indemnitee (each, an
"Indemnitee") by any Person who is not a party to this Agreement (a "Third
Party Claim") as to which such Indemnitee is entitled to indemnification
pursuant to this Agreement, such Indemnitee shall notify the party which is
or may be required pursuant to Section 6.4(b), (c) or (d) hereof to make such
indemnification (the "Indemnifying Party") in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 15
business days) after receipt by such Indemnitee of written notice of the
Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent
the Indemnifying Party shall have been actually prejudiced as a result of
such failure (except that the Indemnifying Party shall not be liable for any
expenses incurred during the period in which the Indemnitee failed to give
such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying
Party, promptly (and in any event within five business days) after the
Indemnitee's receipt thereof, copies of all notices and documents (including
court papers) received by the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges in writing its obligation to indemnify
the Indemnitee therefor, to assume the defense thereof with counsel selected
by the Indemnifying Party; provided that such counsel is not reasonably
objected to by the Indemnitee. Should the Indmenifying Party so elect to
assume the defense of a Third Party Claim, the Indemnifying Party shall,
within 30 days (or sooner if the nature of the Third Party Claim so requires),
notify the Indemnitee of its intent to do so, and the Indemnifying
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Party shall thereafter not be liable to the Indemnitee for legal or other
expenses subsequently incurred by the Indemnitee in connection with the
defense thereof; provided, that such Indemnitee shall have the right to
employ counsel to represent such Indemnitee if, in such Indemnitee's
reasonable judgment, a conflict of interest between such Indemnitee and such
Indemnifying Party exists in respect of such claim which would make
representation of both such parties by one counsel inappropriate, and in such
event the fees and expenses of such separate counsel shall be paid by such
Indemnifying Party. If the Indemnifying Party assumes such defense, the
Indemnitee shall have the right to participate in the defense thereof and to
employ counsel, subject to the proviso of the preceding sentence, at its own
expense, separate from the counsel employed by the Indemnifying Party, it
being understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel
employed by the Indemnitee for any period during which the Indemnifying Party
has failed to assume the defense thereof (other than during the period prior
to the time the Indemnitee shall have given notice of the Third Party Claim
as provided above). If the Indemnifying Party so elects to assume the
defense of any Third Party Claim, all of the Indemnitees shall cooperate with
the Indemnifying Party in the defense or prosecution thereof, including by
providing or causing to be provided, Records and witnesses as soon as
reasonably practicable after receiving any request therefor from or on behalf
of the Indemnifying Party.
If the Indemnifying Party acknowledges in writing responsibility
for a Third Party Claim, then in no event will the Indemnitee admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the Indemnifying Party's prior written consent; provided,
however, that the Indemnitee shall have the right to settle, compromise or
discharge such Third Party Claim without the consent of the Indemnifying Party
if the Indemnitee releases the Indemnifying Party from its indemnification
obligation hereunder with respect to such Third Party Claim and such
settlement, compromise or discharge would not otherwise adversely affect the
Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any
settlement, compromise or discharge of a Third Party Claim that the
Indemnifying Party may recommend and that by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Party Claim and releases the Indemnitee completely in connection
with such Third Party Claim and that would not otherwise adversely affect the
Indemnitee; provided, however, that the Indemnitee may refuse to agree to any
such settlement, compromise or discharge if the Indemnitee agrees that the
Indemnifying Party's indemnification obligation with respect to such Third
Party Claim shall not exceed the amount that would be required to be paid by
or on behalf of the Indemnifying Party in connection with such settlement,
compromise or discharge. If an Indemnifying Party elects not to assume the
defense of a Third Party Claim, or fails to notify an Indemnitee of its
election to do so as provided herein, such Indemnitee may compromise, settle
or defend such Third Party Claim.
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Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable
for the fees and expenses of counsel incurred by the Indemnitee in defending
such Third Party Claim) if the Third Party Claim seeks an order, injunction
or other equitable relief or relief for other than money damages against the
Indemnitee which the Indemnitee reasonably determines, after conferring with
its counsel, cannot be separated from any related claim for money damages. If
such equitable relief or other relief portion of the Third Party Claim can be
so separated from that for money damages, the Indemnifying Party shall be
entitled to assume the defense of the portion relating to money damages.
(c) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third Party Claim against any claimant or
plaintiff asserting such Third Party Claim. Such Indemnitee shall cooperate
with such Indemnifying Party in a reasonable manner, and at the cost and
expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
(d) The remedies provided in this Article VI shall be cumulative and
shall not preclude assertion by any Indemnitee of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
SECTION 6.6. Procedures for Third Party Claims That Are for Shared
Liabilities.
(a) Compliance with the provisions of Section 6.5 and the remaining
subsections of this Section 6.6 is not required with respect to any Shared
Liability that either -(i) is paid out of the Shared Liability Account, or
(ii) is paid by New ATAPCO, ATRECO or Gateway if the payor in its sole
reasonable discretion determines either (A) that such payment is in the
ordinary course of business or (B) that there is no defense against such
Shared Liability that is more likely than not to prevail. In the case of any
such Shared Liability, the parties shall make prompt payments to each other
as required by Sections 6.1, 6.2 and 6.3 and shall thereafter cooperate if
one or more parties elects to pursue a recovery of part or all of any
payments made with respect thereto.
(b) If a Third Party Claim is made against a party hereto or any of its
Subsidiaries (the "Defender") which would, if adversely determined, result in
a Shared Liability, such Defender shall notify the other parties hereto (the
"Contributing Parties") in writing, and in reasonable detail of the Claim
promptly (and in any event within 15 business days) after receipt by such
Defender of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the obligations of the
Contributing Parties provided for in this Agreement or any Ancillary
Agreement except to the extent any Contributing Party shall have been
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actually prejudiced as a result of such failure. Thereafter, the Defender
shall deliver to the Contributing Parties, promptly (and in any event within
five business days) after the Defender's receipt thereof, copies of all
notices and documents (including court papers) received by the Defender
relating to the Third Party Claim.
(c) If a Third Party Claim is made against a Defender which would, if
adversely determined, result in a Shared Liability, the Contributing Parties
shall be entitled to participate in the defense thereof if such Contributing
Parties acknowledge in writing that the Third Party Claim relates to a Shared
Liability, it being understood that the Defender shall control such defense.
Each Contributing Party shall cooperate with the Defender in the defense or
prosecution of the Third Party Claim, including by providing or causing to be
provided, Records and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of Defender.
(d) If a Contributing Party acknowledges in writing proportionate
responsibility for such a Third Party Claim, then in no event will the
Defender admit any liability with respect to, or settle, compromise or
discharge such Third Party Claim without the Contributing Party's prior
written consent; provided, however, that the Defender shall have the right to
settle, compromise or discharge such Third Party Claim without the consent of
the Contributing Party if the Defender releases the Contributing Party from
its proportionate liability for the Shared Liability hereunder with respect
to such Third Party Claim and such settlement, compromise or discharge would
not otherwise adversely affect the Contributing Party. If a Contributing
Party does not notify the Defender of its acknowledgment of a proportionate
liability for the Shared Liability, such Defender may compromise, settle or
defend such Third Party Claim without the consent or participation of such
Contributing Party without prejudice to its right to indemnification or
contribution. Notwithstanding the foregoing, the Defender shall present
every settlement proposal to the Contributing Parties. If the proposed
settlement offer is rejected by Defender and/or one or more of the
Contributing Parties, the Defender and/or Contributing Parties proposing to
accept the proposed settlement offer shall be entitled to pay an amount equal
to their respective applicable Percentage of the proposed settlement amount
to the remaining parties. If any party or parties exercise such right, the
remaining parties shall assume the defense of the Third Party Claim and the
parties who have paid the applicable Percentage of the proposed settlement
amount shall have no further Liability with respect to the Third Party Claim
and shall be indemnified by the remaining parties against any such Liability.
SECTION 6.7. Indemnification and Contribution Payments.
Indemnification and contribution required by this Article VI shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss, Liability,
claim, damage or expense is incurred and in no event later than 10 business
days following receipt of notification of any of the foregoing.
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SECTION 6.8. Tax Treatment of Indemnification and Contribution
Payments. The parties agree that, for federal and state income tax purposes,
they shall treat all payments made pursuant to this Article VI or the
indemnification provisions of any Ancillary Agreement as contributions to
capital and/or distributions, as the case may be, made immediately prior to
the Effective Time.
ARTICLE VII. ACCESS TO INFORMATION
SECTION 7.1. Provision of Corporate Records.
(a) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by ATRECO or
Gateway for specific and identified agreements, documents, books, records or
files (collectively, "Records") which relate to (x) the conduct of ATAPCO's
business (or the business of any and all of the subsidiaries of ATAPCO),
prior to the Effective Time, or (y) any Ancillary Agreement to which New
ATAPCO and ATRECO and/or Gateway are parties, as applicable, New ATAPCO shall
arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the
originals thereof if the party making the request has a reasonable need for
such originals) in the possession or control of New ATAPCO or any of its
Subsidiaries, but only to the extent such items are not already in the
possession or control of the requesting party.
(b) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by New
ATAPCO or Gateway for specific and identified Records which relate to (x) the
conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any Ancillary
Agreement to which ATRECO and New ATAPCO and/or Gateway are parties, as
applicable, ATRECO shall arrange, as soon as reasonably practicable following
the receipt of such request, for the provision of appropriate copies of such
Records (or the originals thereof if the party making the request has a
reasonable need for such originals) in the possession or control of ATRECO or
any of its Subsidiaries, but only to the extent such items are not already in
the possession or control of the requesting party.
(c) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by New
ATAPCO or ATRECO for specific and identified Records which relate to (x) the
conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any Ancillary
Agreement to which Gateway and New ATAPCO and/or ATRECO are parties, as
applicable, Gateway shall arrange, as soon as reasonably practicable
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following the receipt of such request, for the provision of appropriate
copies of such Records (or the originals thereof if the party making the
request has a reasonable need for such originals) in the possession or
control of Gateway or any of its Subsidiaries, but only to the extent such
items are not already in the possession or control of the requesting party.
(d) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such article will
govern), after the Exchange Date, upon the prior written request by
New ATAPCO, ATRECO or Gateway for specific and identified Records which
relate to (x) the conduct of ATAPCO's business (or the business of any and
all of the Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any
Ancillary Agreement to which Xxxxxxx and/or Baltimore Management are parties,
the parties shall cause Xxxxxxx or Baltimore Management to arrange, as soon
as reasonably practicable following the receipt of such request, for the
provision of appropriate copies of such Records (or the originals thereof if
the party making the request has a reasonable need for such originals) in the
possession or control of Xxxxxxx or any of its Subsidiaries or Baltimore
Management or any of its Subsidiaries, but only to the extent such items are
not already in the possession or control of the requesting party.
(e) New ATAPCO, ATRECO and Gateway shall, and shall cause their
Subsidiaries to, retain all Records (including those of Xxxxxxx and Baltimore
Management) for a period of five years following the Exchange Date.
SECTION 7.2. Access to Information. Other than in circumstances in
which indemnification is sought pursuant to Article VI (in which event the
provisions of such Article will govern), from and after the Exchange Date,
each of New ATAPCO, ATRECO and Gateway shall, and shall cause Xxxxxxx and
Baltimore Management to, afford to the others and their authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, books and Records of such party and its Subsidiaries insofar as
such access is reasonably required by another party and relates to the
conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time.
SECTION 7.3. Reimbursement; Other Matters. Except to the extent
otherwise contemplated by any Ancillary Agreement, a party (including Xxxxxxx
and Baltimore Management) providing Records or access to information to any
other party under this Article VII shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments for such
amounts, relating to supplies, disbursements and other out-of-pocket
expenses, as may be reasonably incurred in providing such Records or access
to information.
SECTION 7.4. Confidentiality. Each of (i) New ATAPCO and its
Subsidiaries, (ii) ATRECO and its Subsidiaries, (iii) Gateway and its
Subsidiaries, (iv) Xxxxxxx and its Subsidiaries and (v) Baltimore Management
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and its Subsidiaries shall not use or permit the use of (without the prior
written consent of the other relevant party or parties) and shall keep, and
shall cause its consultants and advisors to keep, confidential all
information concerning the other parties in its possession, its custody or
under its control (except to the extent that (A) such information has been in
the public domain through no fault of such party, or (B) such information has
been later lawfully acquired by such party from other sources not under any
obligation to maintain such confidentiality, or (C) this Agreement or any
other Ancillary Agreement or any other agreement entered into pursuant hereto
permits the use or disclosure of such information) to the extent such
information (w) relates to or was acquired during the period up to the
Effective Time, (x) relates to any Ancillary Agreement, (y) is obtained in
the course of performing services for another party pursuant to any Ancillary
Agreement, or (z) is based upon or is derived from information described in
the preceding clauses (w), (x) or (y), and each party shall not (without the
prior written consent of the other relevant party or parties) otherwise
release or disclose such information to any other person, except such party's
auditors and attorneys, unless compelled to disclose such information by
judicial or administrative process or unless such disclosure is required by
law and such party has used commercially reasonable efforts to consult with
the other affected party or parties prior to such disclosure and afforded
such party or parties the reasonable opportunity to take actions to secure
confidential treatment.
SECTION 7.5. Privileged Matters. The parties hereto recognize that
legal and other professional services that have been and will be provided
prior to the Effective Time have been and will be rendered for the benefit of
each of the members of the New ATAPCO Group, the members of the ATRECO Group,
the members of the Gateway Group, the members of the Xxxxxxx Group and the
members of the Baltimore Management Group and that each of the members of the
New ATAPCO Group, the members of the ATRECO Group, the members of the Gateway
Group, the members of the Xxxxxxx Group and the members of the Baltimore
Management Group should be deemed to be the client for the purposes of
asserting all privileges which may be asserted under applicable law. To
allocate the interests of each party in the information as to which any party
is entitled to assert a privilege, the parties agree as follows:
(a) New ATAPCO shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged
information which relates solely to the New ATAPCO Business, whether or not
the privileged information is in the possession of or under the control of
New ATAPCO, ATRECO, Gateway, Xxxxxxx or Baltimore Management. New ATAPCO
shall also be entitled, in perpetuity, to control the assertion or waiver of
all privileges in connection with privileged information that relates solely
to the subject matter of any claims constituting New ATAPCO Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by New ATAPCO, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Xxxxxxx or Baltimore Management.
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(b) ATRECO shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the ATRECO Business, whether or not the privileged
information is in the possession of or under the control of N Management.
ATRECO shall also be entitled, in perpetuity, to control the assertion or
waiver of all privileges in connection with privileged information which
relates solely to the subject matter of any claims constituting ATRECO
Liabilities, now pending or which may be asserted in the future, in any
lawsuits or other proceedings initiated against or by ATRECO whether or not
the privileged information is in the possession of or under the control of
New ATAPCO, ATRECO, Gateway, Xxxxxxx or Baltimore Management.
(c) Gateway shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Gateway Business, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Xxxxxxx or Baltimore Management. Gateway shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to the subject
matter of any claims constituting Gateway Liabilities, now pending or which
may be asserted in the future, in any lawsuits or other proceedings initiated
against or by Gateway, whether or not the privileged information is in the
possession or under the control of New ATAPCO, ATRECO, Gateway, Xxxxxxx or
Baltimore Management.
(d) Xxxxxxx shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Xxxxxxx Business, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Xxxxxxx or Baltimore Management. Xxxxxxx shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to the subject
matter of any claims constituting Xxxxxxx Liabilities, now pending or which
may be asserted in the future, in any lawsuits of other proceedings initiated
against or by Xxxxxxx, whether or not the privileged information is in the
possession or under the control of New ATAPCO, ATRECO, Gateway, Xxxxxxx or
Baltimore Management.
(e) Baltimore Management shall be entitled, in perpetuity, to control
the assertion or waiver of all privileges in connection with privileged
information which relates solely to the Baltimore Management Business,
whether or not the privileged information is in the possession of or under
the control of New ATAPCO, ATRECO, Gateway, Xxxxxxx or Baltimore Management.
Baltimore Management shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged
information which relates solely to the subject matter of any claims
constituting Baltimore Management Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other proceedings initiated
against or by Baltimore Management, whether or not the privileged information
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is in the possession or under the control of New ATAPCO, ATRECO, Gateway,
Xxxxxxx or Baltimore Management.
(f) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this
Section 7.5, with respect to all privileges not allocated pursuant to the
terms of Sections 7.5(a)-(e). All privileges relating to any claims,
proceedings, litigation, disputes, or other matters which involve New ATAPCO,
ATRECO, Gateway, Xxxxxxx and Baltimore Management in respect of which all
parties retain any responsibility or Liability under this Agreement or any
Ancillary Agreement, shall be subject to a shared privilege among them.
(g) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which any other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation with third parties or
as provided in Section 7.5(h). Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within 20 days after
notice upon the other party requesting such consent.
(h) In the event of any litigation or dispute between or among any of
the parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto,
either such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that
such waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the parties
and/or their Subsidiaries, and shall not operate as a waiver of the shared
privilege with respect to third parties.
(i) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the
rights of the other parties, and shall not unreasonably withhold consent to
any request for waiver by another party. Each party hereto specifically
agrees that it will not withhold consent to waiver for any purpose except to
protect its own legitimate interests.
(j) Upon receipt by any party hereto or by any Subsidiary thereof of any
subpoena, discovery or other request which arguably calls for the production
or disclosure of information subject to a shared privilege or as to which
another party has the sole right hereunder to assert a privilege, or if any
party obtains knowledge that any of its or any of its Subsidiaries' current
or former directors, officers, agents or employees have received any subpoena,
discovery or other requests which arguably calls for the production or
disclosure of such privileged information, such party shall promptly notify
the other party or parties of the existence of the request and shall provide
the other party or parties a reasonable opportunity to review the information
and to assert any rights it or they may have under this Section 7.5 or
otherwise to prevent the production or disclosure of such privileged
information.
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(k) The transfer of all Records and other information pursuant to this
Agreement or any Ancillary Agreement is made in reliance on the agreement of
New ATAPCO, ATRECO and Gateway, as set forth in Sections 7.4 and 7.5, to, and
to cause Xxxxxxx and Baltimore Management to, maintain the confidentiality of
privileged information and to assert and maintain all applicable privileges.
The access to information being granted pursuant to Sections 7.1 and 7.2
hereof, the agreement to provide witnesses and individuals pursuant to
Section 4.21, Section 6.5 and Section 6.6 hereof, the furnishing of notices
and documents and other cooperative efforts contemplated by Sections 6.5 and
6.6 hereof, and the transfer of privileged information between and among the
parties and their respective Subsidiaries pursuant to this Agreement shall
not be deemed a waiver of any privilege that has been or may be asserted
under this Agreement or otherwise.
SECTION 7.6. Ownership of Information. Any information owned by one
party or any of its Subsidiaries that is provided to a requesting party
pursuant to Article VI or this Article VII shall be deemed to remain the
property of the providing party. Unless specifically set forth herein,
nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such information.
SECTION 7.7. Limitation of Liability.
(a) No party shall have any liability to any other party in the event
that any information exchanged or provided pursuant to this Agreement which
is an estimate or forecast, or which is based on an estimate or forecast, is
found to be inaccurate.
(b) No party or any Subsidiary thereof shall have any Liability or
claim against any other party or any Subsidiary of any other party based
upon, arising out of or resulting from any agreement, arrangement, course of
dealing or understanding existing on or prior to the Exchange Date (other
than this Agreement or any Ancillary Agreement or any agreement entered into
in connection herewith or in order to consummate the transactions
contemplated hereby or thereby), unless such agreement, arrangement, course
of dealing or understanding is listed on Schedule 7.7(b) hereto, and any such
Liability or claim, whether or not in writing, which is not reflected on such
Schedule, is hereby irrevocably canceled, released and waived.
SECTION 7.8. Other Agreements Providing for Exchange of Information.
The rights and obligations granted under this Article VII are subject to any
specific limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of information set forth in any Ancillary
Agreement.
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ARTICLE VIII. ADMINISTRATIVE SERVICES
SECTION 8.1. Performance of Services. Beginning on the Exchange Date,
Baltimore Management will provide to the parties hereto, Xxxxxxx and their
Subsidiaries such services on such terms and conditions as may be set forth
in the Administrative Services Agreement.
SECTION 8.2. Independence. Unless otherwise agreed in writing, all
employees and representatives of Baltimore Management providing the scheduled
services to a recipient of such services will be deemed for purposes of all
compensation and employee benefits matters to be employees or representatives
of Baltimore Management and not employees or representatives of the recipient
of such services. In performing such services, such employees and
representatives will be under the direction, control and supervision of
Baltimore Management (and not the recipient of such services) and Baltimore
Management will have the sole right to exercise all authority with respect to
the employment (including, without limitation, termination of employment),
assignment and compensation of such employees and representatives.
ARTICLE IX. DISPUTE RESOLUTION
SECTION 9.1. Negotiation. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this
Agreement or the transactions contemplated hereby, including, without
limitation, any claim based on contract, tort, statute or constitution (but
excluding any controversy, dispute or claim arising out of any agreement
relating to the use or lease of real property if any third party is a party
to such controversy, dispute or claim) (collectively, "Agreement Disputes"),
the appropriate officers designated by the parties shall negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute,
provided such reasonable period shall not, unless otherwise agreed by the
parties in writing, exceed 30 days from the time the parties began such
negotiations; provided further that in the event of any arbitration in
accordance with Section 9.2 hereof, the parties shall not assert the defenses
of statute of limitations and laches arising for the period beginning after
the date the parties began negotiations hereunder, and any contractual time
period or deadline under this Agreement to which such Agreement Dispute
relates shall not be deemed to have passed until such Agreement Dispute has
been resolved.
SECTION 9.2. Arbitration. If after such reasonable period such
officers are unable to settle such Agreement Dispute (and in any event,
unless otherwise agreed in writing by the parties, after 60 days have elapsed
from the time the parties began such negotiations), such Agreement Dispute
shall be determined, at the request of any party, by arbitration conducted in
Baltimore County, Maryland, before and in accordance with the then-existing
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International Arbitration Rules of the American Arbitration Association (the
"Rules"). In any dispute between the parties hereto, the number of
arbitrators shall be three. Any judgment or award rendered by the
arbitrators shall be final, binding and nonappealable (except upon grounds
specified in 9 U.S.C. Section 10(a) as in effect on the date hereof). If the
parties are unable to agree on the arbitrators, the arbitrators shall be
selected in accordance with the Rules; provided that each arbitrator shall be
a U.S. national. Any controversy concerning whether an Agreement Dispute is
an arbitrable Agreement Dispute, whether arbitration has been waived, whether
an assignee of this Agreement is bound to arbitrate, or as to the
interpretation of enforceability of this Article IX shall be determined by
the arbitrators. In resolving any dispute, the parties intend that the
arbitrators apply the substantive laws of the State of Maryland, without
regard to the choice of law principles thereof. The parties intend that the
provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. The parties agree to comply with any award made in any such
arbitration proceeding that has become final in accordance with the Rules and
agree to enforcement of or entry of judgment upon such award, by any court of
competent jurisdiction, including (a) the Circuit Court, 3rd Judicial
Circuit, Baltimore County, Maryland, or (b) the United States District Court
for the District of Maryland, in accordance with Section 11.17 hereof. The
arbitrators shall be entitled, if appropriate, to award any remedy in such
proceedings, including, without limitation, monetary damages, specific
performance and all other forms of legal and equitable relief; provided,
however, the arbitrators shall not be entitled to award punitive damages.
Without limiting the provisions of the Rules, unless otherwise agreed in
writing by or among the parties or permitted by this Agreement, the parties
shall keep confidential all matters relating to the arbitration or the award,
provided such matters may be disclosed (i) to the extent reasonably necessary
in any proceeding brought to enforce the award or for entry of a judgment upon
the award and (ii) to the extent otherwise required by law. Notwithstanding
Article 32 of the Rules, the party other than the prevailing party in the
arbitration shall be responsible for all of the costs of the arbitration,
including legal fees and other costs specified by such Article 32. Nothing
contained herein is intended to or shall be construed to prevent any party, in
accordance with Article 22(3) of the Rules or otherwise, from applying to any
court of competent jurisdiction for interim measures or other provisional
relief (including, without limitation, injunctive or other equitable relief)
in connection with the subject matter of any Agreement Disputes.
SECTION 9.3. Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during
the course of dispute resolution pursuant to the provisions of this Article
IX with respect to all matters not subject to such dispute, controversy or
claim.
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ARTICLE X. INSURANCE
SECTION 10.1. Policies and Rights Included Within Assets.
(a) The New ATAPCO Assets shall include (i) any and all rights of an
insured party under each of the New ATAPCO Shared Policies, subject to the
terms of such New ATAPCO Shared Policies and any limitations or obligations
of New ATAPCO contemplated by this Article X, specifically including rights
of indemnity and the right to be defended by or at the expense of the
insurer, with respect to all claims, suits, Actions, proceedings, injuries,
losses, Liabilities, damages and expenses incurred or claimed to have been
incurred on or prior to the Exchange Date by any party in or in connection
with the conduct of the New ATAPCO Business or, to the extent any claim is
made against New ATAPCO or any of its Subsidiaries, the conduct of the ATRECO
Business, the Gateway Business, the Xxxxxxx Business or the Baltimore
Management Business, and which claims, suits, Actions, proceedings, injuries,
losses, Liabilities, damages and expenses may arise out of an insured or
insurable occurrence under one or more of such New ATAPCO Shared Policies;
provided, however, that nothing in this clause shall be deemed to constitute
(or to reflect) an assignment of such New ATAPCO Shared Policies, or any of
them, to New ATAPCO, and (ii) the New ATAPCO Policies.
(b) The ATRECO Assets shall include (i) any and all rights of an
insured party under each of the ATRECO Shared Policies, subject to the terms
of such ATRECO Shared Policies and any limitations or obligations of ATRECO
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended by or at the expense of the insurer, with
respect to all claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the ATRECO Business or, to the extent any claim is made against
ATRECO or any of its Subsidiaries, the conduct of the New ATAPCO
Business, the Gateway Business, the Xxxxxxx Business and the Baltimore
Management Business, and which claims, suits, Actions, proceedings, injuries,
losses, Liabilities, damages and expenses may arise out of an insured or
insurable occurrence under one or more of such ATRECO Shared Policies;
provided, however, that nothing in this clause shall be deemed to constitute
(or to reflect) an assignment of such ATRECO Shared Policies, or any of them,
to ATRECO, and (ii) the ATRECO Policies.
(c) The Gateway Assets shall include (i) any and all rights of an
insured party under each of the Gateway Shared Policies, subject to the terms
of such Gateway Shared Policies and any limitations or obligations of Gateway
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended by or at the expense of the insurer, with
respect to all claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the Gateway Business or, to the extent any claim is made against
Gateway or any of its Subsidiaries, the conduct of the New ATAPCO Business,
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the ATRECO Business, the Xxxxxxx Business or the Baltimore Management
Business, and which claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Gateway Shared Policies; provided,
however, that nothing in this clause shall be deemed to constitute (or to
reflect) an assignment of such Gateway Shared Policies, or any of them, to
Gateway, and (ii) the Gateway Policies.
(d) The Xxxxxxx Assets shall include (i) any and all rights of an
insured party under each of the Xxxxxxx Shared Policies, subject to the terms
of such Xxxxxxx Shared Policies and any limitations or obligations of Xxxxxxx
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the Xxxxxxx Business or, to the extent any claim is made against
Xxxxxxx or any of its Subsidiaries, the conduct of the New ATAPCO Business,
the ATRECO Business, the Gateway Business and the Baltimore Management
Business, and which claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Xxxxxxx Shared Policies; provided,
however, that nothing in this clause shall be deemed to constitute (or to
reflect) an assignment of such Xxxxxxx Shared Policies, or any of them, to
Xxxxxxx, and (ii) the Xxxxxxx Policies.
(e) The Baltimore Management Assets shall include (i) any and all
rights of an insured party under each of the Baltimore Management shared
Policies, subject to the terms of such Baltimore Management Shared Policies
and any limitations or obligations of Baltimore Management contemplated by
this Article X, specifically including rights of indemnity and the right to
be defended by or at the expense of the insurer, with respect to all claims,
suits, Actions, proceedings, injuries, losses, Liabilities, damages and
expenses incurred or claims to have been incurred on or prior to the Exchange
Date by any party in or in connection with the conduct of the Baltimore
Management Business or, to the extent any claim is made against Baltimore
Management or any of its Subsidiaries, the conduct of the New ATAPCO
Business, the ATRECO Business, the Gateway Business or the Xxxxxxx Business,
and which claims, suits, Actions proceedings, injuries, losses, Liabilities,
damages and expenses may arise out of an insured or insurable occurrence
under one or more of such Baltimore Management Shared Policies; provided,
however, that nothing in this clause shall be deemed to constitute (or to
reflect) an assignment of such Baltimore Management Shared Policies, or any
of them, to Baltimore Management, and (ii) the Baltimore Management Policies.
SECTION 10.2. Post-Exchange Date Claims.
(a) If, subsequent to the Exchange Date, any Person shall assert a
claim against New ATAPCO or any of its Subsidiaries (including, without
limitation, where New ATAPCO or its Subsidiaries are joint defendants with
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other Persons) with respect to any claim, suit, Action, proceeding, injury,
loss, Liability, damage or expense incurred or claimed to have been incurred
prior to the Exchange Date in or in connection with the conduct of the New
ATAPCO Business or, to the extent any claim is made against New ATAPCO or any
of its Subsidiaries (including, without limitation, where New ATAPCO or its
Subsidiaries are joint defendants with other Persons), the conduct of the
ATRECO Business, the Gateway Business, the Xxxxxxx Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the New ATAPCO Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of New ATAPCO, assert and attempt to collect any related
Insurance Proceeds under such New ATAPCO Shared Policy, and shall remit to
New ATAPCO any and all Insurance Proceeds collected with respect to such
asserted claim; provided, however, that New ATAPCO shall not be relieved of
the primary responsibility for reporting such Insured Claim accurately,
completely and in a timely manner.
(b) If, subsequent to the Exchange Date, any Person shall assert a
claim against ATRECO or any of its Subsidiaries (including, without
limitation, where ATRECO or its Subsidiaries are joint defendants with other
Persons) with respect to any claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense incurred or claimed to have been incurred prior
to the Exchange Date in or in connection with the conduct of the ATRECO
Business or, to the extent any claim is made against ATRECO or any of its
Subsidiaries (including, without limitation, where ATRECO or its Subsidiaries
are joint defendants with other Persons), the conduct of the New ATAPCO
Business, the Gateway Business, the Xxxxxxx Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the ATRECO Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of ATRECO, assert and attempt to collect any related
Insurance Proceeds under such ATRECO Shared Policy, and shall remit to ATRECO
any and all Insurance Proceeds collected with respect to such asserted claim;
provided, however, that ATRECO shall not be relieved of the primary
responsibility for reporting such Insured Claim accurately, completely and in
a timely manner.
(c) If, subsequent to the Exchange Date, any Person shall assert a
claim against Gateway or any of its Subsidiaries (including, without
limitation, where Gateway or its Subsidiaries are joint defendants with other
Persons) with respect to any claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense incurred or claimed to have been incurred prior
to the Exchange Date in or in connection with the conduct of the Gateway
Business or, to the extent any claim is made against Gateway or any of its
Subsidiaries (including, without limitation, where Gateway or its
Subsidiaries are joint defendants with other Persons), the conduct of the New
ATAPCO Business, the ATRECO Business, the Xxxxxxx Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
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Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the Gateway Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of Gateway, assert and attempt to collect any related
Insurance Proceeds under such Gateway Shared Policy, and shall remit to
Gateway any and all Insurance Proceeds with respect to such asserted claim;
provided, however, that Gateway shall not be relieved of the primary
responsibility for reporting such Insured Claim accurately, completely and
in a timely manner.
(d) If, subsequent to the Exchange Date, any Person shall assert a
claim against Xxxxxxx or any of its Subsidiaries (including, without
limitation, where Xxxxxxx or its Subsidiaries are joint defendants with
other Persons) with respect to any claim, suit, Action, proceeding, injury,
loss, Liability, damage or expense incurred or claimed to have been incurred
prior to the Exchange Date in or in connection with the conduct of the
Xxxxxxx Business or, to the extent any claim is made against Xxxxxxx or any
of its Subsidiaries (including, without limitation, where Xxxxxxx or its
Subsidiaries are joint defendants with other Persons), the conduct of the New
ATAPCO Business, the ATRECO Business, the Gateway Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the Xxxxxxx Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of Xxxxxxx, assert and to attempt to collect any related
Insurance Proceeds under such Xxxxxxx Shared Policy, and shall remit to
Xxxxxxx all Insurance Proceeds collected with respect to such asserted claim;
provided, however, that Xxxxxxx shall not be relieved of the primary
responsibility for reporting such Insured claim accurately, completely and in
a timely manner.
(e) If, subsequent to the Exchange Date, any Person shall assert a
claim against Baltimore Management or any of its Subsidiaries (including
without limitation, where Baltimore Management or its Subsidiaries are joint
defendants with other Persons) with respect to any claim, suit, Action,
proceeding, injury, loss, Liability, damage or expense incurred or claimed
to have been or claimed to have been incurred prior to the Exchange Date in
connection with the conduct of the Baltimore Management Business or, to the
extent any claim is made against Baltimore Management or any of its
Subsidiaries (including, without limitation, where Baltimore Management or its
Subsidiaries are joint defendants with other Persons), the conduct of the
New ATAPCO Business, the ATRECO Business, the Gateway Business or the
Xxxxxxx Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insurable occurrence under
one or more of the Baltimore Management Shared Policies, Baltimore Management
shall, at the time it asserts such a claim, assert and attempt to collect any
related Insurance Proceeds under such Baltimore Management Shared Policy, and
shall retain all Insurance Proceeds with respect to such asserted claim;
provided, however, that Baltimore Management shall not be relieved of the
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primary responsibility for reporting such Insured Claim accurately, completely
and in a timely manner.
SECTION 10.3. Administration; Other Matters.
(a) Administration. From and after the Exchange Date, Baltimore
Management shall be responsible for (i) Insurance Administration of the
Shared Policies and (ii) Claims Administration under such Shared Policies
with respect to New ATAPCO Liabilities, ATRECO Liabilities, Gateway
Liabilities, Xxxxxxx Liabilities and Baltimore Management Liabilities;
provided that the assignment of such responsibilities to Baltimore Management
is in no way intended to limit, inhibit or preclude any right to insurance
coverage for any Insured Claim of a named insured under such Shared Policies
as contemplated by the terms of this Agreement; and provided further that
Baltimore Management's handling of the administrative responsibilities for the
Shared Policies shall not relieve the party submitting any Insured Claim of
the primary responsibility for reporting such Insured Claim accurately,
completely and in a timely manner or of such party's authority to settle any
such Insured Claim within any period permitted or required by the relevant
Shared Policy. Baltimore Management may discharge its administrative
responsibilities under this Section 10.3(a) by contracting for the provision
of services by independent parties. Each of the parties hereto shall
administer and pay any costs relating to defending its respective Insured
Claims under Shared Policies to the extent such defense costs are not covered
under such Shared Policies and shall be responsible for obtaining or reviewing
the appropriateness of releases upon settlement of its respective Insured
Claims under Shared Policies. The disbursements, out-of-pocket expenses and
direct and indirect costs of employees or agents of Baltimore Management
relating to Claims Administration and Insurance Administration contemplated
by this Section 10.3(a) shall be treated in accordance with the terms of the
Administrative Services Agreement, if still in effect with respect to
insurance and risk management, or, if the Administrative Services Agreement
shall no longer be in effect with respect to insurance and risk management,
then each of New ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore Management,
as the case may be, shall each be responsible for its own Claims
Administration and Insurance Administration.
(b) Exceeding Policy Limits.
(i) Where New ATAPCO Liabilities and/or ATRECO Liabilities
and/or Gateway Liabilities and/or Xxxxxxx Liabilities and/or
Baltimore Management Liabilities, as applicable, are
specifically covered under the same Shared Policy for periods
prior to the Exchange Date, or covering claims made after the
Exchange Date with respect to an occurrence prior to the
Exchange Date, then from and after the Exchange Date New
ATAPCO, ATRECO, Gateway, Xxxxxxx and Baltimore Management may
claim coverage for Insured Claims under such Shared Policy as
and to the extent that such insurance is available up to the
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full extent of the applicable limits of Liability of such
Shared Policy (and may receive any Insurance Proceeds with
respect thereto as contemplated by Section 10.2 or Section
10.3(c)), subject to the terms of this Section 10.3.
(ii) Except as set forth in Section 10.3(c), New ATAPCO,
ATRECO, Gateway, Xxxxxxx and Baltimore Management shall not be
liable to one another for claims not reimbursed by insurers
for any reason not within the control of New ATAPCO, ATRECO,
Gateway, Xxxxxxx and Baltimore Management, as the case may be,
including, without limitation, coinsurance provisions,
deductibles, quota share deductibles, self-insured retentions,
bankruptcy or insolvency of an insurance carrier, Shared
Policy limitations or restrictions, any coverage disputes, any
failure to timely claim by New ATAPCO, ATRECO, Gateway,
Xxxxxxx or Baltimore Management or any defect in such claim or
its processing.
(c) Allocation of Insurance Proceeds. From and after the Effective
Time, Insurance Proceeds received under the Shared Policies shall be paid to
Baltimore Management, which shall thereafter administer the Shared Policies
by paying the Insurance Proceeds, as appropriate, to New ATAPCO with respect
to New ATAPCO Liabilities, to ATRECO with respect to ATRECO Liabilities, to
Gateway with respect to the Gateway Liabilities and to Xxxxxxx with respect
to Xxxxxxx Liabilities. Baltimore Management shall retain the Insurance
Proceeds with respect to Baltimore Management Liabilities. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from
such Shared Policies will be made by Baltimore Management to the appropriate
party upon receipt from the insurance carrier. In the event that the
aggregate amount recoverable (by virtue of policy limits, insurer insolvency
or similar reason) on any Shared Policies is exceeded by the aggregate of
outstanding Insured Claims by two or more of the relevant parties hereto,
such parties agree to allocate the Insurance Proceeds received thereunder
based upon their respective percentage of the total of their bona fide claims
which were covered under such Shared Policy (their "allocable portion of
Insurance Proceeds"), and any party who has received Insurance Proceeds in
excess of such party's allocable portion of Insurance Proceeds shall pay to
the other party or parties the appropriate amount so that each party will have
received its allocable portion of Insurance Proceeds pursuant hereto. Each of
the parties agrees to use commercially reasonable efforts to maximize
available coverage under those Shared Policies applicable to it, and to take
all commercially reasonable steps to recover from all other responsible
parties in respect of an Insured Claim to the extent coverage limits under a
Shared Policy have been exceeded or would be exceeded as a result of such
Insured Claim.
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(d) Allocation of Deductibles. In the event that two or more parties
have Insured Claims under any Shared Policy for which a deductible is payable
(which shall include the application of any retention), the parties agree that
the aggregate amount of the deductible paid shall be borne by the parties in
the same proportion which the Insurance Proceeds received by each such party
bears to the total Insurance Proceeds received under the applicable Shared
Policy (their "Allocable Share of the Deductible"), and any party who has paid
more than such share of the deductible shall be entitled to receive from any
other party or parties an appropriate amount so that each party has borne its
Allocable Share of the Deductible pursuant hereto.
SECTION 10.4. Agreement for Waiver of Conflict and Shared Defense. In
the event that Insured Claims of more than one of the parties hereto exist
relating to the same occurrence, the applicable parties shall jointly defend
and waive any conflict of interest necessary to the conduct of the joint
defense. Nothing in this Article X shall be construed to limit or otherwise
alter in any way the obligations of the parties to this Agreement, including
those created by this Agreement, by operation of law or otherwise.
SECTION 10.5. Cooperation. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
ARTICLE XI. MISCELLANEOUS
SECTION 11.1. Complete Agreement; Construction. This Agreement,
including the Schedules, and the Ancillary Agreements shall constitute the
entire agreement among the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. In the event of any inconsistency between
this Agreement and any Schedule hereto, the Schedule shall prevail. Other
than Section 4.19, Section 7.5 and Article IX, which shall prevail over any
inconsistent or conflicting provisions in any Ancillary Agreement,
notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions
of this Agreement and the provisions of any Ancillary Agreement, such
Ancillary Agreement shall control.
SECTION 11.2. Ancillary Agreements. Subject to the last sentence of
Section 11.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION 11.3. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
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SECTION 11.4. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Exchange Date. The provisions
of this Agreement that assign responsibilities and duties to, and confer
rights upon, Baltimore Management shall survive until Baltimore Management
has been liquidated or the date on which New ATAPCO, ATRECO and Gateway
cease to own in the aggregate among them at least 50% of the equity interests
in Baltimore Management (except to the extent that Baltimore Management has
assigned such responsibilities and duties to another entity prior to its
liquidation).
SECTION 11.5. Expenses. Except as otherwise set forth in this
Agreement or any Ancillary Agreement, all costs and expenses incurred by
ATAPCO on or prior to the Exchange Date (whether or not paid on or prior to
the Exchange Date) in connection with the preparation, execution, delivery
and required implementation of this Agreement and any Ancillary Agreement,
the Information Statement and the Reorganization and the consummation of the
transactions contemplated hereby, including, without limitation, filing fees
and related transfer fees (whether incurred prior to or after the Effective
Time) with regard to the transfers contemplated pursuant to this Agreement or
any Ancillary Agreement, shall be charged to and paid by ATAPCO on or prior
to the Exchange Date or by Baltimore Management from the Shared Liability
Account after the Exchange Date; provided, however, that all other internal
costs and expenses incurred by each of the parties on or prior to the Exchange
Date, shall be the responsibility of the party incurring such expense. Except
as otherwise set forth in this Agreement or any Ancillary Agreement, all costs
and expenses incurred after the Exchange Date, including those incurred in
connection with the required implementation of this Agreement or any
Ancillary Agreement, the consummation of the Reorganization or the
consummation of the transactions contemplated by this Agreement or any
Ancillary Agreement, shall be charged to and paid by the party incurring such
costs and expenses. Except as otherwise set forth in this Agreement or any
Ancillary Agreement, each party shall bear its own costs and expenses incurred
after the Exchange Date. Any amount or expense to be paid or reimbursed by
any party hereto to any other party hereto shall be so paid or reimbursed
within ten business days after the existence and amount of such obligation is
determined and demand therefor is made.
SECTION 11.6. Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified
mail (return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties
at the following addresses (or at such other addresses for a party as shall
be specified by like notice) and will be deemed given on the date on which
such notice is received:
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To AI or ATAPCO:
American Trading and Production Corporation
The Xxxxxxxxx Building
Suite 2400
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxx
Xxxxxxx Xxxxxx Building
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
To ATRECO:
American Trading Real Estate Company, Inc.
The Xxxxxxxxx Building
Suite 1400
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
with a copy to:
Morris, Nichols, Arsht & Xxxxxxx
0000 X. Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: X. Xxxxxxxxx Sparks
To Gateway:
Gateway Gathering & Marketing Company
The Xxxxxxxxx Building
23rd Floor
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
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with a copy to:
McGuire, Woods, Battle & Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Telecopy: (000) 000-0000
Attention: Clive X.X. X'Xxxxx
SECTION 11.7. Waivers. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not
waive or diminish that party's right to demand strict performance thereafter
of that or any other provision hereof.
SECTION 11.8. Amendments. Subject to the terms of Section 11.15
hereof, this Agreement may be modified or amended only by an agreement in
writing signed by each of the parties hereto. From and after 12:01 p.m. on
December 29, 1998 through the Effective Time, this Agreement may not be
modified or amended without the written consent of the ATAPCO Stockholders,
directly or through their attorneys-in-fact.
SECTION 11.9. Assignment.
(a) This Agreement shall not be assignable, in whole or in part,
directly or indirectly, by any party hereto without the prior written consent
of the other parties hereto, and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.
(b) New ATAPCO will not distribute to its stockholders any interest in
New ATAPCO or any New ATAPCO Subsidiary, by way of a spin-off distribution,
split-off or other exchange of interests in New ATAPCO or any New ATAPCO
Subsidiary for any interest in New ATAPCO held by New ATAPCO stockholders, or
any similar transaction or transactions, unless the distributed New ATAPCO
Subsidiary undertakes to each of ATRECO and Gateway to be jointly and
severally liable for all New ATAPCO Liabilities hereunder.
(c) ATRECO will not distribute to its stockholders any interest in
ATRECO or any ATRECO Subsidiary, by way of a spin-off distribution,
split-off or other exchange of interests in ATRECO or any ATRECO
Subsidiary for any interest in ATRECO held by ATRECO stockholders, or any
similar transaction or transactions, unless the distributed ATRECO Subsidiary
undertakes to each of New ATAPCO and Gateway to be jointly and severally
liable for all ATRECO Liabilities hereunder.
(d) Gateway will not distribute to its stockholders any interest in
Gateway or any Gateway Subsidiary, by way of a spin-off distribution,
split-off or other exchange of interests in a Gateway or a Gateway
Subsidiary for any interest in Gateway held by Gateway stockholders, or any
similar transaction or transactions, unless the distributed Gateway
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Subsidiary undertakes to each of New ATAPCO and ATRECO to be jointly and
severally liable for all Gateway Liabilities hereunder.
(e) For ten years after the Effective Time, or such shorter time
period as the parties agree to in writing, neither New ATAPCO, ATRECO
nor Gateway may (i) enter into any transaction involving a merger,
consolidation, corporate reorganization or similar transaction unless
the surviving entity of any such transaction expressly assumes and
agrees to be liable for the obligations of the relevant party under this
Agreement, or (ii) dispose of all or substantially all of its assets
unless the entity purchasing such assets expressly assumes and agrees to
be liable for the obligations of the relevant party under this
Agreement. If ten years after the Effective Time there is still a
matter in dispute between any of the parties regarding a matter
hereunder, the ten-year time period provided for in this Section 11.9(e)
will be extended until the matter in dispute is resolved.
SECTION 11.10. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
SECTION 11.11. Termination. Subject to applicable law, this
Agreement and the Reorganization may be terminated by the board of
directors of ATAPCO at any time prior to the Effective Time. In the
event of such termination, no party shall have any Liability of any kind
to any other party or any other Person.
SECTION 11.12. Subsidiaries. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary
of such party or by any entity that is contemplated to be a Subsidiary of
such party after the Effective Time.
SECTION 11.13. Third Party Beneficiaries. Except as provided in
Article VI relating to Indemnitees and Article IV relating to the
stockholders of the parties hereto, this Agreement is solely for the benefit
of the parties hereto and their respective Subsidiaries and should not be
deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION 11.14. Title and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
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SECTION 11.15. Schedules. The Schedules shall be construed with and as
an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein. In the event of any inconsistency between the
terms of any Schedule and the terms set forth in the main body of the
Agreement, the terms of the Schedule shall govern. The parties have approved
the material items to be reflected in the Schedules. The parties agree that
the Schedules may be amended or modified with the approval of each of the
parties in any manner consistent with the terms of this Agreement or any
Ancillary Agreement at any time prior to the Effective Time.
SECTION 11.16. GOVERNING LAW. THIS AGREEMENT AND ALL DEALINGS OF THE
PARTIES WITH RESPECT TO THE MATTERS ADDRESSED HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND (WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF) APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF MARYLAND.
SECTION 11.17. Consent to Jurisdiction. Without limiting the
provisions of Article IX hereof, each of the parties irrevocably submits to
the exclusive jurisdiction of (a) the Circuit Court, 3rd Judicial Circuit,
Baltimore County, Maryland, and (b) the United States District Court for the
District of Maryland, for the purposes of any suit, Action or other
proceeding arising out of this Agreement, any Ancillary Agreement or any
transaction contemplated hereby or thereby. Each of the parties agrees to
commence any Action, suit or proceeding relating hereto either in the United
States District Court for the District of Maryland or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons,
in the Circuit Court, 3rd Judicial Circuit, Baltimore County, Maryland. Each
of the parties further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any Action, suit or proceeding
in Maryland with respect to any matters to which it has submitted to
jurisdiction in this Section 11.17. Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any Action,
suit or proceeding arising out of this Agreement, or any Ancillary Agreement,
or the transactions contemplated hereby or thereby in (i) the Circuit Court,
3rd Judicial Circuit, Baltimore County, Maryland, or (ii) the United States
District Court for the District of Maryland, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
SECTION 11.18. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
AMERICAN TRADING AND PRODUCTION CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Chairman of the Board
AMERICAN TRADING REAL ESTATE COMPANY, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: President
GATEWAY GATHERING AND MARKETING COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
ATAPCO, INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: President
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