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Exhibit 2.2
CLOSING AGREEMENT
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This Closing Agreement ("Agreement"), dated as of June 19, 1997, is by
and among DAIRY MART CONVENIENCE STORES, INC., a Delaware corporation ("Dairy
Mart"), DAIRY MART, INC., a Massachusetts corporation ("DM-MA"), DAIRY MART
EAST, INC., a Rhode Island corporation ("DM-RI"), CIA FOODMARTS, INC., a New
York corporation ("CIA-NY"), CONVENIENT GASOLINE, INC., a New York corporation
("CGI"), REMOTE SERVICES, INC., a Kentucky corporation ("RSI"), and CONVENIENT
INDUSTRIES OF AMERICA, INC., a Kentucky corporation ("CIA-KY"), all with a
principal place of business at 000 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxx 00000
(Dairy Mart, DM-MA, DM-RI, CIA-NY, CGI, RSI and CIA-KY are hereinafter
individually and collectively sometimes referred to as "Seller"), FINANCIAL
OPPORTUNITIES, INC., a Kentucky corporation also with a principal place of
business at 000 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxx 00000 ("FIN-OP"), and DB
COMPANIES, INC., a Rhode Island corporation with a principal place of business
at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter referred to as
"Buyer").
W I T N E S S E T H:
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WHEREAS, Seller, FIN-OP and Buyer entered into an Asset Purchase
Agreement dated as of March 6, 1997, as amended by a First Amendment to Asset
Purchase Agreement dated as of May 15, 1997, a Second Amendment to Asset
Purchase Agreement dated as of May 23, 1997, and a Third Amendment to Asset
Purchase Agreement dated as of May 28, 1997, and a Fourth Amendment to Asset
Purchase Agreement dated as of June 19, 1997 (as amended, the "Purchase
Agreement"), with respect to the sale and purchase of certain convenience stores
operated or franchised under the "Dairy Mart" name as more particularly
described therein. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings given to them respectively in the Agreement; and
WHEREAS, the parties are closing the transactions contemplated by the
Purchase Agreement and desire to amend certain of its terms and to clarify
certain of its provisions,
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth and,
upon the terms and subject to the conditions hereinafter set forth, the parties
hereto agree as follows:
1. DELETION OF LOCATIONS. Seller and Buyer agree that the following
Locations have been deleted from the purchase and sale pursuant to the
Purchase Agreement: Location #1605 (Prospect, Connecticut), Location
#1609 (Milford, Connecticut), Location #1616 (Ansonia, Connecticut),
Location #3832 (West Warwick, Rhode Island) and Location #6649 (Tappan,
New York). The parties agree that the value of such
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Locations and the adjustment of the Purchase Price in respect thereof
pursuant to Section 7.5 of the Agreement are as follows: Location
#1605--$46,079; Location # 1609--$0; Location #1616--$50,304; Location
#3832--$0; and Location #6649-- $181,908.
2. CONDITION OF ASSETS. The parties agree to be responsible for the
amounts and matters identified as their responsibility in ATTACHMENT A
hereto with respect to the repair of the Assets being transferred
pursuant to the Agreement, Buyer being identified on ATTACHMENT A as
"DB" and Seller being identified on ATTACHMENT A as "Dairy Mart" or
"DM". Seller shall complete all matters for which Seller is identified
as being responsible on ATTACHMENT A as soon as practicable and in
accordance with applicable law. The obligations of Sellers pursuant to
this paragraph 2 are in full satisfaction of the matters set
forth in Section 7.14 of the Agreement.
3. SPECIAL SITUATION LOCATIONS.
a. The parties are aware that the Franchisee of Location #6680
(Port Jervis, New York) has claimed that a Release at the
Location has been caused by tank testing carried out in an
allegedly negligent fashion by Tanknology Inc. Seller hereby
agrees to indemnify and hold harmless Buyer and its officers,
directors, shareholders, employees, consultants, agents and
representatives wholly harmless from, against and in respect
of any and all liability, loss, cost and expense whatsoever
(including reasonable fees of legal counsel) that may be
incurred by Buyer or any such person as a result of the matter
referred to in the preceding sentence. Buyer acknowledges that
Seller retains its rights against the Franchisee, Tanknology
Inc. and any other third party in respect of such matter.
Buyer also acknowledges that Seller shall not be required to
take Corrective Action at such Location until a reasonable
period of time has elapsed following Seller's discussions with
and actions against the Franchisee and Tanknology Inc.
regarding their responsibility, if any, for such matter;
provided, however, that Seller shall take Corrective Action
upon the imposition of any lien that materially affects the
Buyer's interest in the Purchased Lease.
b. With respect to Locations #0000 (Xxxxx Xxxxxxx, Xxxxxxxxxxxxx)
and #0000 (Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxxx), Seller hereby
agrees to indemnify and hold harmless Buyer and its officers,
directors, shareholders, employees, consultants, agents and
representatives wholly harmless from, against and in respect
of any and all liability, loss, cost and expense whatsoever
(including reasonable fees of legal counsel) that may be
incurred by Buyer or any such person as a result of either or
both owner's claims that there is no valid and existing lease
with Seller with respect to such Locations, including without
limitation, the pending action commenced by Xxxxx Xxxxxxxx,
Trustee of the
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Xxxxxxx X. Xxxxxxx Trust vs. Xxxxxxxx Petroleum Company.
Seller understands that following the Closing, Buyer intends
to attempt to exercise the purchase option with respect to
Location #2210 and Buyer shall indemnify and hold harmless
Seller and its officers, directors, shareholders, employees,
consultants, agents and representatives wholly harmless from,
against and in respect of any and all liability, loss, cost
and expense whatsoever (including reasonable fees of legal
counsel) that may be incurred by Seller or any such person as
a result of such attempted exercise of such purchase option.
c. With respect to Location #6605 (Hopewell Junction, New York),
Seller hereby agrees to indemnify and hold harmless Buyer and
its officers, directors, shareholders, employees, consultants,
agents and representatives wholly harmless from, against and
in respect of any and all liability, loss, cost and expense
whatsoever (including reasonable fees of legal counsel) that
may be incurred by Buyer or any such person as a result of the
owner's claim regarding Seller's alleged breach of the lease
covering such Location.
d. With respect to Location #6688 (Armonk, New York), Seller
shall be responsible for all expense and costs associated with
repairs that pursuant to the applicable lease are required to
be made at Seller's expense as of the Closing, and Seller
hereby agrees to indemnify and hold harmless Buyer and its
officers, directors, shareholders, employees, consultants,
agents and representatives wholly harmless from, against and
in respect of any and all liability, loss, cost and expense
whatsoever (including reasonable fees of legal counsel) that
may be incurred by Buyer or such person as a result of the
making of such repairs and any failure of Seller to complete
the same as required by the lease.
e. Seller agrees that if Buyer is dispossessed from any of the
Locations described in clauses (a) through (d) of this
paragraph 3 by reason of the matters described in such clauses
(a) through (d), then Seller shall repurchase such Location
and all related equipment, Inventory, licenses and permits
from Buyer as hereinafter provided. The repurchase price for
such Location, equipment, licenses and permits shall equal the
amount that would have been deducted from the Purchase Price
in accordance with Section 7.5 of the Purchase Agreement had
such Locations been deleted prior to the Closing and the
repurchase price for the Inventory at such Location shall be
determined in accordance with the valuation procedure set
forth on Exhibit 2.2 to the Purchase Agreement. The repurchase
price shall be paid within ten (10) days of the date as of
which Buyer is dispossessed of such Location, and Buyer shall,
except to the extent that the Purchased Lease for the
respective Location is terminated, modified or otherwise
affected by reason of the matters described in clauses (a)
through (d) affecting Buyer's right to possession, reconvey to
Seller with appropriate
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instruments of conveyance and assignment of interest conveyed
to Buyer in such Location, equipment, Inventory, licenses and
permits.
(f) Seller acknowledges and agrees that the indemnification set
forth above is separate from the indemnities set forth in
Article IX of the Purchase Agreement, that the limitation on
indemnification claims set forth in Section 9.3 of the
Purchase Agreement shall not apply to the indemnification set
forth herein, but the procedures set forth in Section 9.5
shall apply.
4. TITLE ISSUES. Seller acknowledges that Buyer has accepted and purchased
certain Purchased Leases for which Seller has responsibility to Buyer
under Section 7.18 of the Purchase Agreement. Seller and Buyer agree to
exercise reasonable efforts to obtain any notices or memoranda of lease
and consents to assignment of Seller's leasehold interests to Buyer
that may be required by any title insurance company in order to vest
record and insurable title in Buyer to any of such Purchased Leases.
5. CLOSING DATE. The documents evidencing the Closing of the transactions
contemplated by the Purchase Agreement are generally dated as of June
19, 1997 and it is anticipated that the payment of the Purchase Price
will occur on June 20, 1997. The parties hereby agree, however, that
the Closing shall be deemed to have occurred, and the Cut-over Time for
purposes of EXHIBIT 2.2 to the Purchase Agreement shall be deemed to
be, as of 12:01 a.m. on June 22, 1997. As part of the determination of
the aggregate value of the Inventory, the parties shall reconcile
sales, deposits, credit card transactions and other cash items at the
Locations based upon whether they relate to sales occurring before or
after the Closing Date and to whose credit they were made and make
appropriate adjustments therefore and pay for the same at the time and
in the same manner as the determination of Inventory.
6. INDEMNIFICATION FOR CERTAIN ISSUES. Sellers shall indemnify and hold
harmless Buyer and its officers, directors, shareholders, employees,
consultants, agents and representatives wholly harmless from, against
and in respect of any and all liability, loss, cost and expense
whatsoever (including reasonable fees of legal counsel) that may be
incurred by Buyer or any such person as a result of any one or more of
the following:
(a) Any tax liability of any kind or nature of DM-RI to the State
of Rhode Island, including without limitation, any liability
arising out of the failure of DM-RI to notify the Tax
Administrator and Department of Employment Security of the
State of Rhode Island of the sale of a major part in value of
DM-RI's assets in Rhode Island, except to the extent that the
liability for any such tax is imposed on Buyer by the Purchase
Agreement;
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(b) Any tax liability of any kind or nature of Conna Corporation,
a Kentucky corporation, to the State of New York, including
without limitation, any liability arising out of the failure
of Conna Corporation to be qualified as a foreign corporation
in the State of New York; or the failure of Conna Corporation
to be duly organized to have appropriate authority to transfer
to any Seller any interest in any of the Assets conveyed to
Buyer pursuant to the Purchase Agreement.
(c) Any tax liability of any kind or nature of CIA-NY and CGI to
the State of New York, including without limitation, any
liability that may be asserted against Buyer as a result of
Buyer's filing the New York Notification of Sale, Transfer or
Assignment in Bulk, with respect to the conveyance of Assets
in New York, except to the extent that the liability for any
such tax is imposed on Buyer by the Purchase Agreement;
(d) Any tax liability of any kind or nature of DM-MA and DM-RI to
the Commonwealth of Massachusetts, including without
limitation, any liability that may be asserted against Buyer
to the extent that any waiver of lien fails to include all of
the Locations being conveyed by DM-MA and DM-RI, except to the
extent that the liability for any such tax is imposed on Buyer
by the Purchase Agreement;
(e) Any tax liability of any kind or nature of DM-MA and RSI to
the State of Connecticut, including without limitation, any
liability that may be asserted against Buyer arising out of
the failure of DM-MA and RSI to provide sales tax liability
certificates, except to the extent that the liability for any
such tax is imposed on Buyer by the Purchase Agreement;
(f) Seller acknowledges and agrees that the indemnification set
forth above is separate from the indemnities set forth in
Article IX of the Purchase Agreement, that the limitation on
indemnification claims set forth in Section 9.3 of the
Purchase Agreement shall not apply to the indemnification set
forth herein, but the procedures set forth in Section 9.5
shall apply.
[Balance of page left blank intentionally; signatures on succeeding pages.]
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
WITNESS DAIRY MART CONVENIENCE
STORES, INC., Seller
_________________________ By:
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Its
DAIRY MART, INC., Seller
_________________________ By:
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Its
DAIRY MART EAST, INC., Seller
_________________________ By:
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Its
CIA FOOD MARTS, INC., Seller
_________________________ By:
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Its
CONVENIENT GASOLINE, INC., Seller
_________________________ By:
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Its
REMOTE SERVICES, INC., Seller
_________________________ By:
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Its
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CONVENIENT INDUSTRIES OF
AMERICA, INC., Seller
_________________________ By:
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Its
FINANCIAL OPPORTUNITIES, INC.
_________________________ By:
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Its
DB COMPANIES, INC., Buyer
_________________________ By:
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Its
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