EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
dated as of
November 23, 1992
between
NATIONAL AUTO/TRUCKSTOPS, INC.
and
UNION OIL COMPANY OF CALIFORNIA
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS............................................... 1
1.1 Definitions............................................... 1
ARTICLE II TRANSFER OF ASSETS....................................... 7
2.2 Excluded Assets........................................... 11
2.3 Assumption of Liabilities................................. 12
2.4 Assignment of Contracts and Rights........................ 14
2.5 Purchase Price for Acquisition Assets..................... 15
2.6 Closing................................................... 15
2.7 Allocation of Purchase Price.............................. 16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER................ 16
3.1 Corporate Existence and Power............................. 16
3.2 Corporate Authorization................................... 16
3.3 Governmental Authorization................................ 17
3.4 Non-Contravention......................................... 17
3.5 Financial Statements...................................... 18
3.6 No Undisclosed Liabilities................................ 19
3.7 Absence of Certain Changes................................ 19
3.8 No Brokerage Fees......................................... 21
3.9 Properties; Leases; Tangible Assets....................... 21
3.10 Sufficiency of and Title to the Transferred
Assets............................................... 23
3.11 Affiliates............................................... 24
3.12 Litigation............................................... 24
3.13 Contracts................................................ 25
3.14 Permits; Required Consents............................... 26
3.15 Compliance with Laws..................................... 27
3.16 Employment and Similar Agreements: Obliga
tions Upon Change in Control......................... 27
3.17 Labor and Employment Matters............................. 27
3.18 Employee Benefit Plans................................... 28
3.19 Intellectual Property.................................... 29
3.20 Inventories.............................................. 30
3.21 Customers................................................ 30
3.22 Material Disclosures..................................... 30
3.23 Operator and Reseller Relationships...................... 30
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER............. 31
4.1 Organization and Existence................................ 31
4.2 Corporate Authorization................................... 31
4.3 Governmental Authorization................................ 32
4.4 Non-Contravention......................................... 32
4.5 No Brokerage Fees......................................... 33
4.6 Litigation................................................ 33
4.7 Material Disclosures...................................... 33
ARTICLE V CERTAIN UNDERSTANDINGS AND
AGREEMENTS OF THE PARTIES................................. 33
5.1 Conduct of the Business................................... 33
5.2 Access to Information..................................... 36
5.3 Confidentiality........................................... 37
5.4 Access to Records and Files............................... 37
5.5 Public Announcements...................................... 38
5.6 No Shopping............................................... 38
5.7 Further Assurances........................................ 39
5.8 Cooperation in Litigation................................. 39
5.9 Certain Filings........................................... 39
5.10 Administration of Accounts................................ 40
5.11 Title Insurance; Encumbrances............................. 40
5.12 Employees and Benefits.................................... 41
5.13 Adjustment Certificate.................................... 42
5.14 Cooperation with Respect to Financing..................... 43
5.15 PMPA...................................................... 43
5.16 Properties................................................ 43
5.17 Recent Financial Statements............................... 44
ARTICLE VI CONDITIONS TO CLOSING.................................... 44
6.1 Conditions to Obligations of Each Party................... 44
6.2 Conditions to Obligations of Buyer........................ 44
6.3 Conditions to Obligations of Seller....................... 47
ARTICLE VII INDEMNIFICATION......................................... 48
7.1 Indemnification by Seller................................. 48
7.2 Indemnification by Buyer.................................. 50
7.3 Defense of Claims......................................... 50
7.4 Survival of Representations and Warranties................ 52
7.5 Limitations on Indemnification for Breaches
of Representations and Warranties.................... 52
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ARTICLE VIII TERMINATION............................................ 53
8.1 Grounds for Termination................................... 53
8.2 Effect of Termination..................................... 55
ARTICLE IX MISCELLANEOUS............................................ 55
9.1 Notices................................................... 55
9.2 Amendments; Waivers; Remedies............................. 56
9.3 Expenses.................................................. 57
9.4 Schedules................................................. 57
9.5 Successors and Assigns.................................... 57
9.6 Governing Law............................................. 57
9.7 Counterparts; Effectiveness............................... 57
9.8 Entire Agreement.......................................... 58
9.9 Jurisdiction.............................................. 58
9.10 Captions.................................................. 58
9.11 Severability.............................................. 58
9.12 Construction.............................................. 59
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as
of November 23, 1992 by and between Union Oil Company of California, a
California corporation ("Seller"), and National Auto/Truckstops, Inc., a
Delaware corporation (together with its successors and assigns,
"Buyer").
W I T N E S S E T H :
WHEREAS, Seller owns certain assets comprising a national
auto/truckstop network as more fully described in the May 1991 Confidential
Information Memorandum prepared by The First Boston Corporation (the
"Information Memorandum"), as said network has been altered by the changes
contained in Section 1 of the Disclosure Schedule (the "A/TS Network");
WHEREAS, certain of the locations comprising the A/TS Network are
Seller owned and leased to independent operators (the "Operators"), certain of
such locations are both Seller owned and operated, and certain of such locations
are owned and operated by independent marketers/ resellers (the "Resellers");
and
WHEREAS, Seller desires to sell to Buyer the A/TS Network (other
than the Excluded Locations), including sub stantially all of the assets
relating thereto, and Buyer desires to acquire the A/TS Network (other than the
Excluded Locations and the Excluded Assets) and such assets on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
(a) The following terms, as used herein, have the following
meanings:
"Affiliate" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or
under direct or indirect common control with such other Person.
"Ancillary Agreements" means, collectively, (i) a Xxxx of Sale,
Assignment and Assumption Agreement, (ii) a Non-Competition Agreement, (iii) an
Office Sublease, (iv) a Credit Card Agreement, (v) a Trademark License
Agreement, (vi) a Software License Agreement, (vii) a Services Agree ment and
(viii) a Products Agreement, each in a form to be agreed to by Buyer and Seller.
"Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, regulation,
order, writ, injunction, directive, judgment, decree or other requirement of any
Governmental Authority applicable to such Person or any of its Affiliates or any
of their respective properties, assets, officers, directors, employees,
consultants or agents (in connection with such officer's, director's,
employee's, consultant's or agent's activities on behalf of such Person or any
of its Affiliates).
"Assigned California Lease Rights" means the right to receive the
Gallonage Rental and 3% of Products and Services Gross Receipts (as such terms
are defined in Exhibit B of the California Leases).
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Los Angeles, California are authorized or
required by law to close.
"California Fuel Supply Agreements" means those Fuel Supply
Agreements identified in Section 1.1(a) of the Disclosure Schedule.
"California Leases" means those leases identified in Section 1.1(b)
of the Disclosure Schedule.
"Confidentiality Agreement" means the Confiden tiality Agreement
dated June 12, 1992 between The First Boston Corporation on behalf of Seller and
The Clipper Group, L.P.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, judgments, awards,
fines, sanctions, penalties, and charges, and amounts paid or payable in
settlement, including (y) interest on cash disbursements in respect of any of
the foregoing at the lesser of Reference
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Rate in effect from time to time and the maximum interest rate permitted by law,
compounded quarterly, from the date each such cash disbursement is made until
the Person incurring the same shall have been indemnified in respect thereof and
(z) reasonable costs, fees and expenses of attorneys, experts, accountants,
appraisers, consultants, witnesses, investigators and any other agents of such
Person.
"Designated Employees" means those employees of Seller who are
listed in Section 1.1(c) of the Disclosure Schedule.
"Disclosure Schedule" means the Disclosure Schedule attached hereto.
"Effective Time" means 1:01 a.m. Eastern Standard Time on the
Closing Date.
"Environment" means navigable waters, waters of the contiguous zone,
ocean waters, natural resources, surface waters, ground water, drinking water
supply, land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, and plant and animal life on earth.
"Environmental Agreement" means the Environmental Agreement dated as
of the date hereof between Seller and Buyer.
"Environmental Claims" means causes of action or claims of Seller
existing as of the Effective Time against any Person relating to Environmental
Liabilities.
"Environmental Laws" means federal, state, local and foreign laws,
principles of foreign law, regulations and codes, as well as orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder
relating to pollution, protection of the Environment or health or safety.
"Environmental Liabilities" means all Damages, whether direct or
indirect, known or unknown, current or potential, absolute or contingent,
matured or unmatured, past, present or future, imposed by, under or pursuant to
Environmental Laws.
"Excluded California Lease Rights" means all of Seller's rights
(other than the Assigned California Lease Rights) under the California Leases.
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"Excluded California Lease Obligations" means any Liability or
obligation of Seller under any of the California Leases including, without
limitation, any obligation for cleaning, maintenance, repairs and replace ments
pursuant to Paragraph 9 and Exhibit C of the California Leases and any Liability
or obligation of Seller for taxes and assessments pursuant to Paragraph 17 of
the California Leases.
"Excluded Causes of Action" means Environmental Claims and any
causes of action to the extent relating to (x) any Excluded Asset or (y) any
Liability set forth in Section 2.3(i) through Section 2.3(xii).
"Excluded Locations" means the auto/truckstops comprising a part of
the A/TS Network located at the following locations: Santa Nella California;
Blythe, California; Buttonwillow, California; Redding, California; Sacramento,
California; and Ontario, California.
"GAAP" means generally accepted accounting prin ciples then in
effect consistently applied.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Liability" means, with respect to any Person, any liability or
obligation of such Person of any kind, charac ter or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliqui
dated, secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise and whether or not
the same is required to be accrued on the financial statements of such Person in
accordance with GAAP.
"Lien" means, with respect to any asset, any xxxx xxxx, title defect
or objection, restrictive covenant, adverse claim, lien, pledge, charge,
security interest, hypothecation or encumbrance of any kind in respect of such
asset.
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"Material Adverse Effect" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of operations,
assets, Liabilities, reserves or any other aspect of the A/TS Network that
results in a material adverse effect on, or a material adverse change in, the
Acquisition Assets taken as a whole, or a material adverse effect on the
business of the A/TS Network taken as a whole.
"Outside Sourced Petroleum Products" means any petroleum or
petroleum derivative products (including, without limitation, gasoline,
distillates, lubricants or grease) acquired or to be acquired from any Person
(other than Seller or any Affiliate of Seller).
"Permitted Liens" means (i) Liens for taxes or governmental
assessments, charges or claims the payment of which is not yet due, or for taxes
the validity of which are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP are being
maintained and set aside; (ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other similar Persons and
other Liens imposed by Applicable Law incurred in the ordinary course of
business for sums not yet delinquent or being contested in good faith and for
which adequate reserves in accordance with GAAP are being maintained and set
aside; and (iii) Liens relating to deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security.
"Person" means an individual, corporation, part nership,
association, trust, estate or other entity or organization, including a
Governmental Authority.
"PMPA" means the Petroleum Marketing Practices Act.
"Proceeding" means any claim, action, suit, hear ing, inquiry,
arbitration, dispute, proceeding (public or private) or governmental
investigation brought by or against any Governmental Authority or any other
Person.
"Reference Rate" means the per annum rate of interest as published
in the Wall Street Journal as the prime rate (or reference rate). Any change in
the Reference Rate shall take effect at the opening of business on the day such
published quotations change.
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"Seller's knowledge" means (i) the actual knowledge of managerial or
professional personnel employed by or on behalf of Seller or any of its
Affiliates (exclud ing any agents and servants who are not and have never been
employees of Seller) and working in Division 61 or having management or
supervisory responsibility for the A/TS Network or (ii) such knowledge as any
such Person could reasonably be expected to have in the exercise of his or her
employment duties.
"WARN Act" means the Worker Adjustment and Retraining Notification
Act (and any applicable similar state law).
(b) Each of the following terms is defined in the section set
forth opposite such term:
TERM SECTION
Acquisition Assets 2.1
Acquisition Proposal 5.6
Adjustment Certificate 5.13
Agreement Recitals
Annual Financial Statements 3.5
A/TS Network Recitals
Assumed Liabilities 2.3
Benefit Arrangements 3.18(b)
Buyer Recitals
Buyer Indemnitees 7.1
Closing 2.6
Closing Date 2.6
Contracts 2.1(iv)
Employee Plans 3.18(a)
Employment Agreements 3.16
Encumbrances 3.9(a)
Equipment 2.1
ERISA 2.3(vi)
ERISA Affiliate 3.18(a)
Excluded Assets 2.2
Excluded Storage Tanks 2.2(xi)
Financial Statements 3.5
Indemnified Party 7.3
Indemnifying Party 7.3
Information Memorandum Recitals
Intellectual Property 3.19
Interim Financial Statements 3.5
Inventory 2.1(iii)
Inventory Amount 5.13
Leased Real Property 3.9(d)
Leases 3.9(d)
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Non-Conveyable Properties 5.17
Offering Material 5.15(a)
Operators Recitals
Owned Real Property 3.8(c)
Permits 3.14(a)
Permitted Encumbrances 3.9(a)
Purchase Price 2.5
Real Property 3.9(d)
Resellers Recitals
Required Consents 3.14(b)
Required Contractual Consent 3.14(b)
Required Permit Approval 3.14(b)
Scheduled Contracts 3.13(a)
Seller Recitals
Seller Indemnitees 7.2
Subsequent Material Contract 5.1(a)
Termination Date 8.1(vi)
Uno-Ven Trademark License Agreement 2.2(x)
ARTICLE II
TRANSFER OF ASSETS
2.1 ASSETS TO BE CONVEYED. Upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein after set forth, Seller shall convey, transfer,
assign, sell and deliver to Buyer, and Buyer shall acquire, accept and purchase
at the Closing, free and clear of all Liens, other than Permitted Encumbrances,
all the assets, properties, rights, interests, licenses, permits, contracts,
causes of action, claims, operations and businesses of every kind and
description as the same shall exist as of the Effective Time (other than the
Excluded Assets), wherever located, whether tangible or intangible, real,
personal or mixed, which are owned by, leased by or in the possession of Seller
whether or not reflected on the books and records of Seller and held or used in
the business or operation of the A/TS Network (the assets, properties, rights,
interests, licenses, permits, contracts, causes of action, claims, operations
and businesses to be transferred to Buyer by Seller pursuant hereto are referred
to collectively as the "Acquisition Assets"), including, without limitation,
except as otherwise specified in Section 2.2 or 5.13, all right, title and
interest of Seller in, to and under:
(i) all real property and leases (whether capitalized
or operating) of, and other inter ests in, real property of Seller held or
used in the
7
business of the A/TS Network (but only to the extent held or used in the
business of the A/TS Network), including the items listed in Section
3.9(c) of the Disclosure Schedule, in each case together with Seller's
interest in all buildings, fixtures, signage and improvements erected
thereon and appurtenances thereto and all of Seller's rights to real
property adjacent or appurtenant thereto;
(ii) all machinery, equipment, furni ture, office
equipment, communications equipment, computer hardware which is used
exclusively in the business of the A/TS Network (including, without
limitation, computer hardware utilized in connection with the "Access 76"
system), vehicles, storage tanks (other than the Excluded Storage Tanks),
spare and replacement parts and other tangible property (and interests in
any of the foregoing) of Seller held or used in the business of the A/TS
Network (collectively, "Equipment");
(iii) all items of inventory relating to the business of
the A/TS Network notwithstanding how classified in the financial records
of Seller, includ ing all raw materials, work-in-process, finished goods,
supplies, spare parts, samples and stores ("Inven tory"), but excluding
any of the foregoing excluded from the definition of Acquisition Assets
pursuant to Section 5.13;
(iv) subject to Section 2.4 and only to the extent
relating to the business of the A/TS Network, all contracts, agreements,
options, leases, licenses, sales and purchase orders, commitments and
other instruments of any kind, whether written or oral, relating to the
business of the A/TS Network and to which Seller is a party or beneficiary
on the Closing Date or by which any of the Acquisition Assets are then
bound (including, without limitation, the California Fuel Supply
Agreements and the Assigned California Lease Rights) (all of the foregoing
to be assigned to Buyer pursuant hereto or the benefits under which are to
be provided to Buyer pursuant to Section 2.4 hereof are hereinafter
referred to collectively as the "Contracts" and individually as a
"Contract");
(v) to the extent related to the busi ness of the A/TS
Network and utilizable by the Buyer in such business, all prepaid charges
and expenses, deposits and similar assets of Seller, including any
8
such prepaid charges and expenses with respect to ad valorem taxes, leases
and rentals and utilities;
(vi) except for Excluded Causes of Action, all of
Seller's rights, claims, credits, causes of action or rights of set-off
against third parties relating to the business of the A/TS Network or the
Acquisition Assets, whether liquidated or unliquidated, fixed or
contingent, including all rights of Seller under or pursuant to all
warranties, representations and guarantees made by suppliers,
manufacturers, contractors and other third parties in connection with
products or services purchased by or furnished to Seller or any other
Person for use in the business of the A/TS Network or affecting any of the
Acquisition Assets;
(vii) to the extent that the following are held or used
in the conduct of business of the A/TS Network (but excluding the marks
"Pure" and "Firebird" and any of the following which are (x) to be
licensed to Buyer pursuant to the Trademark License Agreement to be
executed by Buyer and Seller or (y) are not set forth in Section 3.19 of
the Disclosure Schedule), all of Seller's right, title and interest in
each patent and patent application, copyright, copyright applica tion,
publication (including, without limitation, Road King magazine),
trademark, trademark registration, trade name, xxxx (including, without
limitation, the xxxx "Road King"), service xxxx, product xxxx, logo and
other commercial symbol (in any such case, whether or not registered or to
be registered in the United States of America or elsewhere) applied for,
issued to or otherwise owned by Seller and held or used in the business of
the A/TS Network or with regard to any of the Acquisition Assets;
(viii) each process, invention, trade secret, formula
and documentation owned by Seller or which the Seller has the right to use
and assign to Buyer which is held or used in the business of the A/TS
Network or with regard to any of the Acquisition Assets, but excluding any
of the foregoing which relate to the formulation or blending of the
gasoline, petroleum distillates or other petroleum products sold by the
A/TS Network;
(ix) subject to Section 2.4, all trans ferable
franchises, licenses, permits or other authori zations issued or granted
by any Governmental Authority
9
that are owned by, granted to or held or used by Seller and utilized in
the business of the A/TS Network, including the items listed in Section
3.14(a) of the Disclosure Schedule;
(x) to the extent reasonably available to Seller,
copies of all books, records, files and papers of Seller, whether in hard
copy or computer format, including books of account, invoices, engineer
ing information, sales and promotional literature, manuals and data, sales
and purchase correspondence, lists of present and former suppliers, lists
of present and former customers, and documentation developed or used for
accounting, marketing, engineering, manu facturing or any other purpose,
but in each such case only to the extent related to the conduct of the
business of the A/TS Network or with regard to any of the Acquisition
Assets at any time prior to the Closing;
(xi) to the extent utilized in the conduct of business
of the A/TS Network, all computer software (other than (i) mainframe
software and (ii) software to be licensed to Buyer pursuant to the
Software License Agreement to be executed by Buyer and Seller) used to
prepare or maintain the books and records of Seller relating to the
business of the A/TS Network, including computer software used in
connection with the credit approval process and accounts receiv able
aging;
(xii) all rights of Seller under insurance policies and
insurance funds of any nature, whether private or governmental, but
exclusive of self-insurance by Seller, in respect of Environmental
Liabilities resulting from occurrences which occur prior to the later of
the Closing Date and completion of the assessment and remediation required
pursuant to the Environmental Agreement, but only to the extent that
Seller is not obligated to indemnify Buyer for such Environmental
Liabilities pursuant to the Environmental Agreement and only after
equitably considering factors such as various layers of insurance and
self-insurance maintained by Seller; and
(xiii) all goodwill associated with the A/TS Network or
the Acquisition Assets, together with the right to represent to third
parties that Buyer is the successor to the business of the A/TS Network.
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2.2 EXCLUDED ASSETS. Notwithstanding anything contained in Section
2.1 to the contrary, Seller is not selling, and Buyer is not purchasing,
pursuant to this Agreement, any of the following, all of which shall be excluded
from the Acquisition Assets (hereinafter referred to collectively as the
"Excluded Assets"):
(i) all of Seller's cash and cash equivalents;
(ii) all accounts, accounts receivable, notes and notes
receivable existing as of the Effective Time whether or not the same arose
out of Seller's operation of the A/TS Network and which are payable to
Seller;
(iii) the real property and all furniture located
thereon at the A/TS Network's Schaumburg, Illinois headquarters office;
(iv) all mainframe software and all software to be
licensed to Buyer pursuant to the Software License Agreement;
(v) all of Seller's patents, patent applications,
copyright, copyright applications, publications, trademarks, trademark
registrations, trade names, marks, service marks, product marks, logos or
other commercial symbols which are not conveyed to Buyer pursuant to
Section 2.1(vii);
(vi) (x) all real property comprising a part of the
Excluded Locations, together with all buildings, fixtures, signage and
improvements erected thereon and appurtenances thereto and all of Seller's
rights to real property adjacent or appurtenant thereto, (y) all tangible
personal property located on or which otherwise relates exclusively to,
the Excluded Locations and (z) the Excluded California Lease Rights;
(vii) to the extent not utilized in the conduct of
business of the A/TS Network, all books, records, correspondence and other
information which relate to assets or Liabilities of Seller to be retained
by it pursuant to the terms hereof; provided, that Seller agrees to
furnish copies of such records to Buyer if requested by Buyer for bona
fide reasons relating to the operation of the A/TS Network from and after
the Closing Date;
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(viii) all Employment Agreements, whether or not
identified in Section 3.16 of the Disclosure Schedule;
(ix) all Employee Plans and Benefit Arrangements,
whether or not identified in Section 3.18 of the Disclosure Schedule;
(x) all rights of Seller under that certain Trademark
License Agreement, dated December 1, 1989, as amended, by and between
Seller and The Uno-Ven Company (the "Uno-Ven Trademark License Agreement);
(xi) all gasoline, petroleum distillate or other petroleum
product storage tanks and associated piping (whether underground or above
ground) and dispensers not located on or under the Owned Real Property (as
hereinafter defined), including any such storage tanks located on or under
any real property comprising a part of the auto/truckstops operated by
Resellers (including, without limitation, the auto/truckstops operated by
Resellers at Xxxxxx, New York, No. Lima, Ohio, Raphine, Virginia and
Shreveport, Louisiana) (all of the foregoing storage tanks, associated
piping and dispensers described or specific ally identified in this
Section 2.2 (xi) are collectively referred to as the "Excluded Storage
Tanks"); and
(xii) Excluded Causes of Action.
2.3 ASSUMPTION OF LIABILITIES. From and after the Closing Date,
Buyer shall assume and agree to pay when due, perform and discharge (a) the
executory Liabilities of Seller under each Contract in effect on the Closing
Date and assigned to Buyer pursuant to Section 2.1, but only to the extent such
Liabilities would not be required to be accrued on a balance sheet of Seller as
of the Closing Date prepared in accordance with GAAP and Buyer has in fact
benefitted from the performance by the other party to such contract from and
after the Closing Date and (b) the liabilities of Seller to be assumed by Buyer
pursuant to Section 2.4 (subject to the rest of this Section 2.3, the
liabilities described in the foregoing clauses (a) and (b) are collectively
referred to as the "Assumed Liabilities"). Notwithstanding the foregoing, the
Buyer is not assuming and shall not be deemed to be assuming any of the
following, all of which shall be excluded from and shall not constitute Assumed
Liabilities:
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(i) any Liability of Seller or any of its Affiliates
to any Person the existence of which constitutes a breach of any covenant,
agreement, repre sentation or warranty of Seller contained in this
Agreement;
(ii) any Liability of Seller or any of its Affiliates
for any federal, state, local or foreign income or excise taxes, franchise
taxes, sales taxes, state or local property taxes or other taxes of any
kind or description (including interest and penalties thereon), including
Seller's pro rata portion of any real and personal property taxes with
respect to its ownership and use of any of the Acquisition Assets before
the Closing Date;
(iii) any Liability of Seller or any of its Affiliates
for any accounts payable or under any other agreement to which Seller or
any of its Affil iates is a party;
(iv) whether or not such agreements are assigned to or
assumed by Buyer hereunder, any Liabil ity of Seller or any of its
Affiliates arising out of or resulting from any breach by Seller or any of
its Affiliates of any Contract or other agreement to which Seller or any
of its Affiliates is a party;
(v) any Liability of Seller or any of its Affiliates
arising out of or resulting from any violation or alleged violation by
Seller or any such Affiliate of any Applicable Law or in connection with
or arising out of the sale by Seller or any such Affiliate of any product
or the provision of any service;
(vi) any Liability of Seller or any of its Affiliates
to any officer, director, employee (including any Designated Employee),
consultant or agent of Seller or any such Affiliate, including, without
limitation, employment agreements between the Seller and any of its
employees (whether or not such employment agreements are set forth on
Schedule 3.16 of the Disclosure Schedule), workers' compensation, union
contracts, medical or sick pay liabilities (including, without limitation,
for continuation coverage mandated by law), pension or profit sharing
liabilities or severance liabilities (including, without limitation, under
the WARN Act) whether or not resulting from the transactions contemplated
herein and any other employee
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benefit offered by Seller or any such Affiliate, including any liability
for contributions or payments to be made under any employee benefit plan
(as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) or other plan or arrangement maintained for
an officer, director, employee, consultant or agent of Seller or any such
Affiliate; except as expressly set forth in Section 5.12 or 7.2 hereof, in
no event shall Buyer incur any obligation for any Liability relating to
any Designated Employee that arises or accrues prior to such time, if any,
as such Designated Employee is employed by Buyer;
(vii) any Liability (including expenses) resulting from
any Proceeding affecting any of the Acquisition Assets or the A/TS Network
existing or arising on or resulting from events which occurred or failed
to occur at or prior to the Effective Time;
(viii) any Liability relating to any of the Excluded
Storage Tanks;
(ix) any Liability of Seller under any Contract which is
required to be disclosed in the Disclosure Schedule and is not so
disclosed;
(x) any Liability of Seller under or relating to the
Uno-Ven Trademark License Agreement;
(xi) any Liability of Seller or any of Seller's
Affiliates under any contract or agreement providing for the purchase by
Seller or any of Seller's Affiliates of Outside Sourced Petroleum
Products; and
(xii) the Excluded California Lease Obligations.
2.4 ASSIGNMENT OF CONTRACTS AND RIGHTS.
(a) Anything in this Agreement to the con trary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Acquisition Asset or any claim or right or any benefit arising thereunder or
resulting there from if an attempted assignment thereof, without the consent of
a third party thereto, would constitute a breach or other contravention thereof,
be ineffective with respect to any party thereto or in any way adversely affect
the rights of Seller or, upon transfer, Buyer thereunder.
14
(b) Seller agrees that between the date hereof and the Closing
Date it will use its best efforts (other than paying consideration) to obtain
the necessary consents to the assignment of each Contract or other Acquisition
Asset which by its terms requires the consent of any of the other contracting
parties thereto to an assignment thereof to Buyer. If (y) such consent is not
obtained with respect to any such Contract or other Acquisition Asset and (z)
notwithstanding the provisions of Section 6.2(f), Buyer elects to consummate the
Closing, Seller and Buyer will cooperate in an arrangement reasonably
satisfactory to Buyer and Seller under which Buyer shall obtain, to the extent
practicable, the claims, rights and benefits and assume the corresponding
obligations thereunder in accordance with this Agreement, including
subcontracting, sub-licensing or sub-leasing to Buyer, or under which Seller
shall enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all claims, rights and benefits of Seller against a third
party thereto. Seller will promptly pay to Buyer when received all monies
received by Seller under any Contract or other Acquisition Asset or any claim,
right or benefit arising thereunder that has been assigned to Buyer or which
Seller has made an arrangement to the satisfaction of Buyer pursuant to this
Section 2.4. Buyer agrees to perform at its sole expense all of the obli gations
of Seller to be performed after the Closing Date under any such Contract or
other Acquisition Asset the bene fits of which Buyer is receiving pursuant to
the provisions of this Section 2.4.
2.5 PURCHASE PRICE FOR ACQUISITION ASSETS. The purchase price for
the Acquisition Assets (the "Purchase Price") shall be in the amount and shall
be payable as follows:
(i) at the Closing, Buyer shall pay to Seller, by wire
transfer of immediately available funds, the sum of $141,000,000;
(ii) at the Closing, Buyer shall assume the Assumed
Liabilities; and
(iii) Buyer shall make a payment to Seller, by wire
transfer of immediately available funds, pursuant to and in accordance
with Section 5.13.
2.6 CLOSING. The Closing of the transactions contemplated by this
Agreement (the "Closing") shall occur at the law offices of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx at
15
10:00 a.m. on the date five (5) Business Days after all conditions to the
Closing set forth in Article VI have been satisfied or waived by the party
entitled to waive the same, or such other time, date or place as is agreed to in
writing by the parties hereto. The date on which the Closing occurs is referred
to herein as the "Closing Date".
2.7 ALLOCATION OF PURCHASE PRICE. Seller and Buyer hereby agree that
(i) the allocation for tax purposes of the Purchase Price shall be as agreed to
by Buyer and Seller prior to the Closing, (ii) each party shall timely file
Internal Revenue Service Form 8594 and (iii) neither the Buyer nor the Seller
shall take a position on any report, return, information return or other
document (including any related or supporting information) filed or required to
be filed with any federal, state or local taxing authority, before any taxing
authority or in any judicial proceeding that is in any way inconsistent with
such allocation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 CORPORATE EXISTENCE AND POWER. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California, and has all corporate power and all governmental licenses,
authori zations, consents and approvals required to carry on the business of the
A/TS Network as now conducted and to own and operate the Acquisition Assets.
Seller is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the Acquisition Assets or the nature of the
business of the A/TS Network makes such qualification necessary to carry on the
business as now conducted. Seller has heretofore delivered to Buyer true and
complete copies of the certificate of incorporation and bylaws of Seller as
currently in effect.
3.2 CORPORATE AUTHORIZATION. Seller has all requisite corporate
power and authority to enter into this Agreement and all other agreements to be
executed by Seller in connection herewith and to consummate the transactions
contemplated hereby and thereby. This Agreement and all other agreements to be
executed by Seller in connection herewith have been (or upon execution will have
been) duly
16
executed and delivered by Seller, have been effectively authorized by all
necessary action, corporate or otherwise, and constitute (or upon execution will
constitute) legal, valid and binding obligations of Seller enforceable in
accordance with their respective terms (i) except as limited by applicable
bankruptcy, insolvency, reorganization, xxxx torium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers and (ii) subject to the limitations
imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
3.3 GOVERNMENTAL AUTHORIZATION.
(a) The execution, delivery and performance by Seller of this
Agreement require no action by, consent or approval of, or filing with, any
Governmental Authority other than:
(i) compliance with any applicable requirements of the
HSR Act;
(ii) compliance with any applicable requirements of the
bulk sales, bulk transfer or similar laws of the states in which the
Acquisition Assets are located;
(iii) the Required Permit Approvals; and
(iv) compliance with any applicable requirements of
the WARN Act.
(b) To Seller's knowledge, there are no facts relating to the
identity or circumstances of Seller that would prevent or materially delay
obtaining any of the authorizations referred to in Sections 3.3, 3.14 or 4.3.
3.4 NON-CONTRAVENTION. The execution, delivery and performance by
Seller of this Agreement and all other agreements to be executed by Seller in
connection herewith does not and will not (a) (i) contravene or conflict with
the certificate of incorporation or bylaws of Seller; (ii) assuming compliance
with the HSR Act, the WARN Act and California Business and Professions Code
Section 20999.25(a) and receipt of the Required Consents and each Required
Permit Approval, contravene or conflict with or constitute a violation of any
provision of any Applicable Law binding upon or applicable to Seller, the A/TS
Network or any of the
17
Acquisition Assets; and (iii) assuming compliance with the HSR Act and receipt
of the Required Contractual Consents and each Required Permit Approval,
constitute a default under, conflict with, violate, breach or give rise to any
right of termination, cancellation or acceleration of, or to a loss of any
benefit to which Seller is entitled, under any Contract or any license,
franchise, permit or similar authorization relating to the A/TS Network or
included in any of the Acquisition Assets or by which the business of the A/TS
Network or the Acquisition Assets may be bound, or (b) result in the creation or
imposition of any Lien on any Acquisition Asset.
3.5 FINANCIAL STATEMENTS. Section 3.5 of Disclosure Schedule sets
forth (i) the unaudited Income Statement of the A/TS Network for the calendar
years ended December 31, 1989, 1990 and 1991 (including the addendums thereto
relating to Seller's operating expenses during such periods), the unaudited
Statement of Net Assets of the A/TS Network as of December 31, 1989, 1990 and
1991, the un audited Statement of Cash Flows for the calendar year ended
December 31, 1991, the unaudited Statement of Gallons Sold for the calendar
years ended December 31, 1989, 1990 and 1991 and the unaudited Statement of
Capital Expenditures for the calendar years ended December 31, 1989 and 1990
(collec tively, the "Annual Financial Statements") and (ii) the unaudited Income
Statement of A/TS Network for the nine months ended September 30, 1992, the
Unaudited Statement of Net Assets of the A/TS Network as of September 30, 1992,
the unaudited Statement of Gallons Sold for the nine months ended September 30,
1992 and the unaudited Statement of Cash Flows for the nine months ended
September 30, 1992 (the "Interim Financial Statements" and together with the
Annual Financial Statements, the "Financial Statements"). The Financial
Statements (i) were prepared in accordance with the books and records of Seller
subject to the assumptions, exceptions and limitations described therein; (ii)
were prepared in accordance with GAAP applied on a basis consistent with that of
the preceding periods, subject to the assumptions, exceptions and limitations
described therein; (iii) fairly present the financial condition and the results
of operations of the A/TS Network as at the relevant dates thereof and for the
periods covered thereby in accordance with GAAP applied on a basis consistent
with that of the preceding periods, subject to the assumptions, exceptions and
limitations described therein; (iv) fairly present the revenues, cost of goods
sold and direct operating expenses actually incurred by the A/TS Network during
the periods covered thereby in accordance with GAAP applied on a basis
consistent with that of the preceding
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periods, subject to the assumptions, exceptions and limitations described
therein; (v) do not contain any items of special or nonrecurring income or any
other income not earned in the ordinary course of business except as otherwise
stated therein; and (vi) set forth therein all material assumptions upon which
the Financial Statements are based. No improper accounting practices have been
used for the purpose of not reflecting or incorrectly reflecting in the
Financial Statements or the books or records of Seller any material properties,
assets, revenues or expenses. Upon the delivery of any financial statements by
Seller to Buyer pursuant to Section 5.17 hereof, the definitions Annual
Financial Statements, Interim Financial Statements and Financial Statements
shall be deemed to include, as appropriate, the financial statements delivered
to Buyer by Seller pursuant to Section 5.17 and the representations made by
Seller in this Section 3.5 shall encompass the financial statements delivered
pursuant to Section 5.17.
3.6 NO UNDISCLOSED LIABILITIES. Since Septem ber 30, 1992, except
for (i) the transactions specifically contemplated by this Agreement and (ii) as
set forth in Section 3.6 to the Disclosure Schedule, Seller has not incurred any
material Liability, other than Liabilities incurred in the ordinary course of
business that would properly be reflected or reserved against in a balance sheet
prepared in conformity with generally accepted accounting principles applied on
a basis consistent with that used in the preparation of the Unaudited Statement
of Net Assets of the A/TS Network as at September 30, 1992 referred to in
Section 3.5.
3.7 ABSENCE OF CERTAIN CHANGES. Since Septem ber 30, 1992, the
business of the A/TS Network has been conducted in the ordinary course, and
there has not been:
(a) except as set forth in Section 3.7(a) of the Disclosure
Schedule, any event, occurrence, development or state of circumstances or facts
or change in the Acqui sition Assets or the business of the A/TS Network
(including any damage, destruction or other casualty loss) affecting the
business of the A/TS Network or any Acquisition Asset which has had or which may
be reasonably expected to have, either alone or together with all such events,
occurrences, developments, states of circumstances or facts or changes, a
Material Adverse Effect;
(b) except as set forth in Section 3.7(b) of the Disclosure
Schedule, any material transaction or commit ment made, or any Contract entered
into, by Seller relating
19
to the business of the A/TS Network or any Acquisition Asset (including the
acquisition or disposition of any Acquisition Assets), or any waiver, amendment,
termination or cancella tion of any Contract or Permit by Seller, or any
relinquish ment of any rights thereunder by Seller, or of any other right or
debt owed to Seller relating to the business of the A/TS Network or the
Acquisition Assets, other than in each such case actions (i) taken in the
ordinary course of business or (ii) otherwise permitted by this Agreement;
(c) except as set forth in Section 3.7(c) of the Disclosure
Schedule, any material change (i) in the compensation, benefits, title or
responsibilities of any Designated Employee or (ii) the termination or
re-assignment of any Designated Employee with significant A/TS Network
managerial responsibilities.
(d) any change by Seller in the accounting principles or
methods or practices applied to the A/TS Network or in the manner it keeps the
books and records of the A/TS Network;
(e) any labor dispute (other than routine individual
grievances), lockouts, strikes, slowdowns, work stoppages or threats thereof by
or with respect to any such employees or, to Seller's knowledge, any activity or
proceeding by a labor union or representative thereof to organize any employees
of Seller involved in the business of the A/TS Network;
(f) except as set forth in Section 3.7(f) of the Disclosure
Schedule, any payment, discharge or satis faction of any Liabilities of Seller
related to the business of the A/TS Network, other than payments, discharges or
satisfactions in the ordinary course of business;
(g) except as set forth in Section 3.7(g) of the Disclosure
Schedule, any material waiver or material amendment or any termination or
cancellation of any auto/ truckstop lease agreement, motor fuel contract (or
other commitment or arrangement whether written or oral) between Seller and any
Operator or Reseller, or any material relinquishment, amendment or modification
of any rights thereunder by Seller; or
(h) except as set forth in Section 3.7(h) of the Disclosure
Schedule, as of the date hereof, any change in Approved Products or Approved
Services (as such terms are defined in the Trademark License Agreement).
20
3.8 NO BROKERAGE FEES. No broker or finder, other than The First
Boston Corporation, has acted for Seller or any of Seller's Affiliates in
connection with this Agreement or the transactions contemplated hereby, and no
broker or finder, other than The First Boston Corporation, is entitled to any
brokerage or finders' fees in respect of such transactions based in any way on
agreements, arrange ments or understandings made by or on behalf of Seller or
any of Seller's Affiliates.
3.9 PROPERTIES; LEASES; TANGIBLE ASSETS.
(a) Seller owns and has good and marketable title to or, in
the case of leased properties, a good and marketable leasehold interest in, all
of the Acquisition Assets, including all such assets (real, personal or mixed,
tangible or intangible) reflected in the Statement of Net Assets as of December
31, 1991 or acquired thereafter, except those assets disposed of in the ordinary
course of business after such date. Seller holds title to each such property and
asset free and clear of all Liens, adverse claims, easements, rights of way,
servitudes, zoning or building restrictions, or any other rights of others or
other adverse interests or title or survey defects of any kind, including
leases, chattel mortgages, conditional sales contracts, rights of first refusal,
options to purchase, collateral security arrangements and other title or
interest retention arrangements (collectively, "Encumbrances"), except for (i)
Permitted Liens, (ii) Encumbrances set forth on Section 3.9(a) of the Disclosure
Schedule and (iii) with respect to each parcel of Real Property, Encumbrances
that, individually or in the aggregate, do not and will not (A) materially
interfere with the use, occupancy or operation of such parcel as currently used,
occupied and operated, (B) materially reduce the fair market value of such
parcel below the fair market value such parcel would have had but for such
Encumbrances or (C) result in any material increase in the cost of operating,
occupying or owning (or leasing) such parcel. The Encumbrances described by
clauses (i), (ii) and (iii) of the foregoing sentence are collectively referred
to herein as the "Permitted Encumbrances."
(b) Except as disclosed in Section 3.9(b) of the Disclosure
Schedule, all tangible properties and assets included in the Acquisition Assets
are structurally sound and free of any material defects and are in good
operating condition and repair and are adequate for the uses to which they are
put, and no properties or assets necessary for the conduct of the business of
the A/TS Network in substantially
21
the same manner as such business has heretofore been conducted are in need of
material replacement, maintenance or repair, except, in the case of each
auto/truckstop leased to an Operator, for regularly scheduled, routine
maintenance and repair required under the applicable auto/truckstop lease
agreement.
(c) Section 3.9(c) of the Disclosure Sched ule sets forth a
true and complete list of all Acquisition Assets that constitute real property
owned by Seller (such property, together with all recorded easements and
licenses benefiting such property, collectively referred to here inafter as the
"Owned Real Property"), such list setting forth the location of each parcel of
Owned Real Property, the record owner thereof, the approximate acreage and a
brief description of the nature of the activities of Seller on such Owned Real
Property.
(d) Section 3.9(d)(i) of the Disclosure Schedule sets forth
(by date and the parties thereto) all personal property leases and all real
property leases relating to real property used by the Seller as lessee (such
property, together with all recorded easements and licenses benefiting such
property, collectively referred to here inafter as the "Leased Real Property";
the Leased Real Property and Owned Real Property being collectively referred to
as the "Real Property") or to which Seller is a party or by which Seller is
bound as lessor (including all cases in which Seller is both the lessor or
lessee of such personal property or real property) which were entered into in
connection with the business of the A/TS Network (the "Leases"), and indicating
where appropriate those leases which have been recorded for tax, protection of
title or interest, or other purposes. With respect to the Leases (including,
without limitation, Exhibit C thereto), there exist no defaults by Seller and no
events have occurred and no condition exists which, with the giving of notice or
lapse of time or both, would constitute such a default, and, to Seller's
knowledge, there exists no default or threatened default by any third party
thereunder, that has affected or could reasonably be expected to affect the
rights and priv ileges thereunder of Seller and no events have occurred and no
condition exists which, with the giving of notice or lapse of time or both,
would constitute such a default. Except as disclosed in Section 3.9(d)(ii) of
the Disclosure Schedule and except for regularly scheduled, routine maintenance
and repair, Seller has performed all of its cleaning, maintenance and
replacement responsibilities set forth in Exhibit C to the Leases, and, to
Seller's knowledge, each third party to such Leases has performed all
22
of its cleaning, maintenance and replacement responsibi lities set forth in such
Exhibit C. Except as disclosed in Section 3.9(d)(iii) of the Disclosure
Schedule, all Leases to which Seller is a party or by which it is bound may be
assigned, transferred and conveyed to Buyer without default,
penalty or modification thereof.
(e) To Seller's knowledge, except as disclosed in Section
3.9(e) of the Disclosure Schedule, with respect to any Real Property, there
exists no (i) applicable restrictive covenant, zoning ordinance, building code,
use or occupancy restriction, land use restriction, fire, subdivision, health or
other law applicable to real property, or any violation of any such ordinance,
code, restriction or law, or any condemnation action or proceeding of any
Governmental Authority, that detracts or can reasonably be expected to detract
in any material respect from the use or value of such property in the business
of the A/TS Network or will interfere with the transferability thereof to Buyer
pursuant hereto or (ii) non-conforming uses or zoning or code exceptions that
currently permit the non-conforming use of such Real Property.
(f) No condemnation proceeding is pending, or to Seller's
knowledge threatened, which would preclude or impair the use of any Real
Property for the uses for which it is currently being used or is anticipated by
Seller to be used. Except as set forth in Section 3.9(f) of the Dis closure
Schedule, to Seller's knowledge there is no existing or proposed plan to widen,
modify or realign any street or highway contiguous to any of the Real Property
which would materially reduce the size or value of any of the Real Property.
(g) Section 3.9(g) of the Disclosure Sched ule sets forth a
true and complete list of all computer hardware used exclusively in the business
of A/TS Network.
(h) Each parcel of Real Property has direct access to a public
street or highway and such access is xxx xxxxx for the use of such parcel in the
business of the A/TS Network. No Real Property is dependent for its access,
operation or utility on any land, building or other improve ment not included in
the Real Property. Notwithstanding the foregoing, Seller makes no representation
that title insurance policies with so-called "access endorsements" are
obtainable with respect to any parcel of Real Property.
3.10 SUFFICIENCY OF AND TITLE TO THE TRANSFERRED ASSETS. Upon
consummation of the transactions contemplated
23
by this Agreement, Seller will have assigned, transferred and conveyed to Buyer,
free and clear of all Liens and Encumbrances (other than Permitted
Encumbrances), all of the Acquisition Assets, exclusive of the Excluded Assets
and assets transferred prior to Closing in the ordinary course of business or
otherwise transferred as permitted hereunder. The business of the A/TS Network
is a going concern and the transfer of the Acquisition Assets to Buyer pursuant
to this Agreement (together with sufficient working capital supplied by Buyer,
adequate arrangements for the supply of motor fuel and other petroleum products
not provided pursuant to the Products Agreement, and the rights of Buyer under
the Office Sublease, the Credit Card Agreement, the Trademark License Agreement,
the Software License Agreement, the Services Agreement and the Products
Agreement) will enable Buyer to operate such business as Seller operated it
immediately prior to the Closing with all operations of such business unimpaired
in any material respect immediately after the Closing, subject to the exclusion
of the Excluded Locations.
3.11 AFFILIATES. The business and operation of the A/TS Network is
conducted exclusively and solely by Seller and not by any of its Affiliates and
no assets or properties used in the business of the A/TS Network are owned or
leased by any of Seller's Affiliates.
3.12 LITIGATION.
(a) Except as disclosed in Section 3.12(a) of the Disclosure
Schedule: (i) there are no Proceedings pending or, to Seller's knowledge,
threatened, against or affecting the business of the A/TS Network or any of the
Acquisition Assets; (ii) there are no existing judgments affecting in any
respect any of the Acquisition Assets or the business of the A/TS Network; or
(iii) there are no existing orders or decrees of any Governmental Authority
specifically applicable to any of the Acquisition Assets or the business of the
A/TS Network.
(b) Except as set forth in Section 3.12(b) of the Disclosure
Schedule, there are no Proceedings pending or, to Seller's knowledge,
threatened, against Seller, the A/TS Network or the Acquisition Assets which
seek to enjoin or rescind the transactions contemplated by this Agreement or
otherwise prevent Seller from complying with the terms and provisions of this
Agreement.
24
3.13 CONTRACTS.
(a) Section 3.13(a) of the Disclosure Sched ule, together with
Sections 3.9, 3.16 and 3.18 of the Dis closure Schedule, sets forth an accurate
and complete list (by date of execution, expiration date (if applicable) and the
parties thereto, and to the extent applicable, by common form of agreement) of
all contracts, commitments and obli gations (whether written or oral) of Seller
which relate to the business of the A/TS Network or any of the Acquisition
Assets, except for (i) purchase orders of Seller entered into in the ordinary
course of business for materials, goods or services requiring payments by Seller
to any third party of not more than $100,000 for any single purchase order or
$250,000 for two or more such purchase orders and (ii) sales acknowledgments and
invoices of Seller for goods or services requiring payments to Seller by any
third party of not more than $100,000 for any single sales acknowledgement or
invoice or $250,000 for two or more such sales acknowledge ments or invoices
(the contracts, commitments and obliga tions of Seller set forth in Sections
3.9, 3.13, 3.16 and 3.18 of the Disclosure Schedule sometimes being hereinafter
referred to collectively as the "Scheduled Contracts").
(b) Except as disclosed in Section 3.13(b) of the Disclosure
Schedule, each Scheduled Contract and each other Contract relating to the
business or any of the Acqui sition Assets is a legal, valid and binding
obligation of Seller and, to Seller's knowledge, each other party thereto,
enforceable against Seller and, to Seller's knowledge, each such other party, in
accordance with its terms (except as limited by applicable bankruptcy,
insolvency, reorganiza tion, moratorium or other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally, including the
effect of statutory and other laws regarding fraudulent conveyances and
preferential transfers, and subject to the limitations imposed by general
equitable principles regardless of whether such enforceability is considered in
a proceeding at law or in equity). With respect to the Contracts, there exists
no default by Seller and no events have occurred and no conditions exist which,
with the giving of notice or the lapse of time or both, would constitute such a
default, and to Seller's knowledge, there exists no default by any third party
thereunder, that has affected or could reasonably be expected to affect the
rights and privileges thereunder of Seller. Except as disclosed in Section
3.14(b)(ii) of the Disclosure Schedule, all Contracts to which Seller is a party
or by which it is bound may be assigned, transferred and conveyed to Buyer
without default, penalty or modification thereof. Complete
25
and correct copies of each Scheduled Contract have been made available to Buyer.
3.14 PERMITS; REQUIRED CONSENTS.
(a) Section 3.14(a) of the Disclosure Sched ule sets forth all
material approvals, registrations, authorizations, certificates, certificates of
occupancy, consents, licenses, orders and permits or other similar
authorizations of or with any Governmental Authority (and all other Persons)
necessary for the operation of the Acquisition Assets or the business of the
A/TS Network in substantially the same manner as currently operated by Seller,
or affecting or relating in any way to the business of the A/TS Network (the
"Permits"), including (i) all such permits and approvals relating to the
transportation, storage or sale of any petroleum product or the discharge of
by-products or waste material into a public waste discharge system and (ii) all
registrations, approvals and exemptions required under any state or federal
franchise, business opportunity or similar law.
(b) Section 3.14(b)(i) of the Disclosure Schedule lists each
governmental or other registration, filing, application, notice, transfer,
consent, approval, order, qualification and waiver (each, a "Required Permit
Approval") required under Applicable Law to be obtained by Seller or Buyer by
virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby to avoid the loss of any Permit. Section
3.14(b)(ii) of the Disclosure Schedule lists each Contract with respect to which
the consent of the other party or parties thereto must be obtained by Seller by
virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby to avoid the invalidity of the transfer of
such Contract, the termination thereof, a breach or default thereunder or any
other change or modification to the terms thereof (each, a "Required Contractual
Consent" and collectively with the Required Permit Approvals, the "Required
Consents"). Except as set forth in Section 3.14(b)(i) of the Disclosure
Schedule, each Permit is valid and in full force and effect in all material
respects and, assuming the related Required Permit Approvals have been obtained
prior to the Closing Date, are, or will be, transferable by Seller, and none of
the Permits will, assuming the related Required Permit Approvals have been
obtained prior to the Closing Date, be terminated or become terminable or
impaired in any respect as a result of the transactions contemplated hereby.
26
3.15 COMPLIANCE WITH LAWS. Except as set forth in Section 3.15 of
the Disclosure Schedule, the ownership and operation of the A/TS Network and the
ownership, use and condition of the Acquisition Assets have not violated or
infringed, and do not violate or infringe, any Applicable Law, or any order,
writ, injunction or decree of any Govern mental Authority in any material
respect. Seller has not received, and has no knowledge of, any notification from
any Governmental Authority having jurisdiction over the business of the A/TS
Network or the Acquisition Assets affecting or purporting to restrict the
operation of the business of the A/TS Network or the use of the Acquisition
Assets or alleging any violation of Applicable Law relating to the foregoing.
3.16 EMPLOYMENT AND SIMILAR AGREEMENTS: OBLIGA TIONS UPON CHANGE IN
CONTROL. Except as set forth in Section 3.16 or 3.18 of the Disclosure Schedule,
there is no employment, consulting, severance pay, continuation pay, termination
pay, indemnification agreement or other agreement not subject to ERISA with
Seller (or any of its Affiliates) and any Designated Employee and, except as set
forth in Section 3.16 of the Disclosure Schedule, no such scheduled agreement
provides for an increase in such Designated Employee's compensation, benefits or
rights in excess of his compensation, benefits and rights provided on the date
hereof if such Designated Employee were to accept or refuse an employment offer
from Buyer. Seller has provided Buyer with complete and correct copies of all
such agreements.
3.17 LABOR AND EMPLOYMENT MATTERS. Except as set forth in Section
3.16, 3.17 and/or 3.18 of the Disclosure Schedule, in connection with the A/TS
Network or with respect to any Designated Employee: (a) Seller has not, and to
Seller's knowledge none of its Affiliates have engaged in any unfair labor
practice; (b) there is no labor strike, dispute, slowdown or stoppage pending
or, to Seller's knowledge, threatened against or directly affecting Seller or
any of its Affiliates; (c) no union representation question or, to Seller's
knowledge, union or other organi zational activity that would be subject to the
National Labor Relations Act (29 U.S.C. Sections 151 ET SEQ.) exists respecting
any employees of Seller or any of its Affiliates; (d) no collective bargaining
agreement exists which is bind ing on Seller or any of its Affiliates; (e)
neither Seller nor any of its Affiliates has experienced any material work
stoppage or other material labor difficulties; (f) neither Seller nor any of its
Affiliates is delinquent in any material respect in payments to any of the
Designated
27
Employees; (g) neither Seller nor any of its Affiliates has received any notice
or has any knowledge of any threatened labor, employment, civil rights dispute
or grievance or any other unfair labor practice proceeding with respect to
claims of, or obligations to, any Designated Employee.
3.18 EMPLOYEE BENEFIT PLANS.
(a) Section 3.18(a) of the Disclosure Schedule lists each
"employee benefit plan," as such term is defined in Section 3(3) of ERISA, which
(i) is subject to any provision of ERISA; and (ii) currently covers any
Designated Employee (hereinafter referred to collectively as the "ERISA Plans").
With respect to each ERISA Plan, Seller has furnished to Buyer a current summary
plan description of such plan and such ERISA Plan's most recent annual report.
(b) Section 3.18(b) of the Disclosure Schedule lists each
written or oral plan or arrangement providing for health, medical, life or other
welfare benefit coverage (including insured, self-insured or other arrange
ment), disability benefits, severance pay, termination pay, supplemental
unemployment benefits, vacation benefits, retirement benefits or providing for
deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits and any other employee benefit plan,
program, agreement, policy or arrangement under which Seller or any of its
Affiliates has directly or indirectly (through any Affiliate) any present or
contingent obligation or liability which (i) is not disclosed pursuant to
Section 3.18(a) above, (ii) is or has been entered into, maintained,
administered or contributed to, as the case may be, by Seller or any of its
Affiliates and (iii) currently covers any Designated Employee. Such plans and
arrangements as are described above, copies and/or descriptions of which have
been furnished by the Company, are hereinafter referred to as the "Benefit
Arrangements." For purposes of this Section 3.18 the term "ERISA Affiliate"
means, with respect to any Person, which, together with such Person was or is
required to be treated as a single employer under Section 414 of the Internal
Revenue Code.
(c) Except as set forth in Section 3.18(c) of the Disclosure
Schedule, no ERISA Plan or Benefit Arrangement is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA) or provides post-retirement
medical benefits (other than the Unocal Medical Plan) and/or life insurance
benefits (other than the Unocal Life Insurance Plan).
28
(d) Section 3.18(d) of the Disclosure Schedule sets forth a
list of each state in which any Designated Employee is covered by any workers'
compensation laws.
3.19 INTELLECTUAL PROPERTY.
There is listed in Section 3.19 of the Disclosure Schedule (i) an
identification of each copyright, copyright registration, copyright application,
patent, patent regis tration, patent application, invention disclosure, trade
xxxx, trademark registration, trademark application, trade name, xxxx, service
xxxx, publication, logo and other commercial symbol held (together with the
federal or state offices, if any, in which any of the foregoing are regis tered)
or employed by Seller in the business of the A/TS Network other than any of the
foregoing relating exclusively to the formulation or blending of the gasoline,
petroleum distillates or other petroleum products sold by the A/TS Network
("Intellectual Property") and (ii) a true and complete list of all licenses or
similar agreement or arrangements to which Seller is a party either as licensee
or licensor for each such item of Intellectual Property. Except as indicated in
Section 3.19 of the Disclosure Schedule:
(a) there have not been any Proceedings involving Seller
concerning the infringement or misappro priation of any intellectual property
rights of any third person or any Proceedings otherwise concerning Seller's
ownership interest in any of such items of Intellectual Property, nor to
Seller's knowledge, is any such Proceeding threatened;
(b) Seller has the right and authority to use said items of
Intellectual Property in connection with the conduct of the A/TS Network in the
manner presently conducted and to convey such right and authority to Buyer, and
such use does not conflict with, infringe upon or vio late any intellectual
property rights, including any patent, copyright, trademark or trade name, of
any other Person;
(c) there are no outstanding, or to Seller's knowledge any
threatened, disputes or disagreements with respect to any licenses or similar
agreements or arrange ments described in Section 3.19 of the Disclosure
Schedule; and
(d) pursuant to this Agreement and the Trademark License
Agreement, concurrently with the Closing,
29
Buyer will be vested with all rights, title and interest and authority to use
all of the Intellectual Property of the A/TS Network so as to operate the A/TS
Network and use the Acquisition Assets in the same manner as Seller immediately
prior to the Closing.
3.20 INVENTORIES. All Inventories of Seller per taining to the
business of the A/TS Network: (a) have been acquired or manufactured in the
ordinary course of business, in accordance with Seller's normal inventory
practices; (b) are of a quality usable and salable in the ordinary course of
business, free of any material defect or defi ciency; and (c) are in
merchantable and undamaged condition and are not obsolete.
3.21 CUSTOMERS. Except as disclosed in Sec tion 3.21 of the
Disclosure Schedule, during the calendar year ended December 31, 1991, not more
than five percent (5%) of the total revenues of the A/TS Network was
attributable to any single Operator or Reseller.
3.22 MATERIAL DISCLOSURES. No statement, repre sentation or warranty
made by Seller in this Agreement, in any Exhibit hereto or in the Disclosure
Schedule, or in any certificate, statement, list, schedule or other document
furnished or to be furnished to Buyer hereunder, contains or will contain any
untrue statement of a material fact, or fails or will fail to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they are made, not materially misleading.
3.23 OPERATOR AND RESELLER RELATIONSHIPS.
(a) Except as set forth in Sections 3.13 or 3.23 of the
Disclosure Schedule, there are no projections, representations, contracts,
commitments or obligations (whether written or oral) between Seller and any
Operator or Reseller currently involved in the business of the A/TS Network or
the use of any of the Acquisition Assets which involve:
(i) the amendment, modification, renewal, non-renewal
or termination of any lease, motor fuel purchase agreement or other
agreement or arrange ment relating to the business of the A/TS Network or
the use of any Acquisition Assets;
(ii) pricing, unit volume, sales revenues, maintenance
expenses, capital expenditures,
30
earnings capability or any other financial information relating to the
business of the A/TS Network or the performance of any truck stop
operation;
(iii) lease, rental, merchandise or other payments to be
due to Seller; or
(iv) obligations to purchase materials used or sold in
the business of the A/TS Network (x) from specified manufacturers,
suppliers, distrib utors or any other Person or (y) meeting performance,
operating or other quality standards imposed by Seller or any other
Person.
(b) Section 3.23(b) of the Disclosure Schedule sets forth a
true and accurate list of all disclosures that have been made to date by Seller
to Operators and Resellers pursuant to any federal, state or local franchising
laws.
(c) Section 3.23(c) of the Disclosure Schedule sets forth a
list of (x) all employees of Seller with primary responsibility for negotiating
lease, purchase or other material contracts with Operators and Resellers, and
(y) all employees of Seller with primary responsibility for insuring that Seller
has complied with all franchising laws relating to the business of the A/TS
Network.
(d) Except as set forth in Section 3.23(d) of the Disclosure
Schedule, Seller has not received any oral or written communications from any
Governmental Authority concerning the applicability of any franchising laws to
the business of the A/TS Network.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
4.1 ORGANIZATION AND EXISTENCE. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
4.2 CORPORATE AUTHORIZATION. Buyer has all requisite corporate power
and authority to enter into this Agreement and all other agreements to be
executed by Buyer in connection herewith and to consummate the transactions
31
contemplated hereby and thereby. This Agreement and all other agreements herein
contemplated to be executed in connection herewith have been (or upon execution
will have been) duly executed and delivered by Buyer, have been effectively
authorized by all necessary corporate action, and constitute (or upon execution
will constitute) legal, valid and binding obligations of Buyer, enforceable in
accordance with their respective terms (i) except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers and (ii) subject to the limitations
imposed by general equitable principles (regardless whether such enforceability
is considered in a proceeding at law or in equity).
4.3 GOVERNMENTAL AUTHORIZATION. (a) The execu tion, delivery and
performance by Buyer of this Agreement require no action by, consent or approval
of, or filing with, any governmental body, agency, official or authority other
than:
(i) compliance with any applicable requirements of the
HSR Act; and
(ii) compliance with any applicable requirements of the
bulk sales, bulk transfer or similar laws of the states in which the
Acquisition Assets are located;
(iii) the Required Permit Approvals; and
(iv) compliance with state franchise
registration/disclosure laws.
(b) To Buyer's knowledge, there are no facts relating to the
identity or circumstances of Buyer that would prevent or materially delay any of
the authorizations referred to in Section 3.3 or 4.3.
4.4 NON-CONTRAVENTION. The execution, delivery and performance by
Buyer of this Agreement does not and will not (a)(i) contravene or conflict with
the certificate of incorporation or bylaws of Buyer, (ii) assuming compliance
with the matters referred to in Section 4.3, contravene or conflict with or
constitute a violation of any provision of any Applicable Law binding upon or
applicable to Buyer, (iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or
32
obligation of Buyer or to a loss of any benefit to which Buyer is entitled under
any provision of any agreement, contract or other instrument binding upon Buyer
or any license, franchise, permit or other similar authorization held by Buyer,
except in the case of clauses (ii) and (iii) for any such contravention,
conflict, violation, default, termination, cancellation, acceleration or loss
that would not have a material adverse effect on the condition (financial or
otherwise), business, assets or results of operations of Buyer.
4.5 NO BROKERAGE FEES. No broker or finder has acted for Buyer in
connection with this Agreement or the transactions contemplated hereby, and no
broker or finder is entitled to any brokerage or finders' fees in respect of
such transactions based in any way on agreements, arrangements or understandings
made by or on behalf of Buyer.
4.6 LITIGATION. There are no Proceedings pending or, to Buyer's
knowledge, threatened, against Buyer which seek to enjoin or rescind the
transactions contemplated by this Agreement or otherwise prevent Buyer from
complying with the terms and provisions of this Agreement.
4.7 MATERIAL DISCLOSURES. No statement, repre sentation or warranty
made by Buyer in this Agreement, in any exhibit hereto, or in any certificate,
statement, list, schedule or other document furnished or to be furnished by
Buyer hereunder, contains or will contain any untrue state ment of material
fact, or fails or will fail to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances in which
they are made, not materially misleading.
4.8 NO KNOWLEDGE OF BREACHES. At the date hereof Buyer has no
knowledge of any breach of any representation or covenant of Seller contained
herein.
ARTICLE V
CERTAIN UNDERSTANDINGS AND
AGREEMENTS OF THE PARTIES
5.1 CONDUCT OF THE BUSINESS. From the date hereof until the Closing
Date, Seller shall conduct the business of the A/TS Network in the ordinary
course and consistent with past practice and preserve intact the Acqui sition
Assets and the A/TS Network's business organization
33
and relationships and goodwill with third parties and use its best efforts to
keep available the services of the pre sent officers, employees and agents of
Seller employed in the business of the A/TS Network. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date:
(a) without Buyer's prior written consent,
Seller will not and will not agree to:
(i) purchase or otherwise acquire assets that would
constitute Acquisition Assets from any Person other than in the ordinary
course of business;
(ii) sell, assign, lease, license, transfer or
otherwise dispose of, or mortgage, pledge or encumber (other than with
Permitted Liens), any Real Property or amend, terminate or renew any lease
thereof;
(iii) sell, assign, lease, license, transfer or
otherwise dispose of, or mortgage, pledge or encumber (other than with
Permitted Liens), any Acquisition Assets (other than Real Property) or
assets that would constitute Acquisition Assets (other than Real Property)
except (x) pursuant to existing obliga tions of Seller as set forth in
Section 5.1(a)(iii) of the Disclosure Schedule, (y) in the ordinary course
of business (but only with respect to Acquisition Assets with a fair
market value not in excess of $100,000);
(iv) amend or modify any material respect or terminate
or renew any Scheduled Contract or any other Contract entered into by
Seller after the date hereof which, if in existence on the date hereof,
would be required to be set forth in Section 3.13 of the Disclosure
Schedule as a Scheduled Contract (each, a "Subsequent Material Contract");
(v) except in the ordinary course of business, waive,
cancel or take any other action mate rially impairing any of its rights
relating to the Acquisition Assets (but only with respect to Acqui sition
Assets with a fair market value not in excess of $100,000);
(vi) commit to make capital expenditures in excess of
an aggregate of $100,000 for all such capital expenditures relating to the
A/TS Network or
34
the Acquisition Assets, other than capital expenditures set forth on
Section 5.1(a)(vi) of the Disclosure Schedule and capital expenditures
required under any Scheduled Contract;
(vii) enter into or commit or propose to enter into any
Subsequent Material Contract other than the entering into of a Subsequent
Material Contract as provided in Section 5.1(a)(vii) of the Disclosure
Schedule;
(viii)take any action that would consti tute, or fail to
take any action that would prevent, a breach of or a default under any
Contract or Subsequent Material Contract or a violation of the terms of
any Permit;
(ix) other than a Designated Employee who the Buyer has
notified Seller is to no longer provide services on behalf of the Buyer
(1) Seller shall not increase a Designated Employee's wage or salary level
except in the ordinary course of business; (2) amend any ERISA Plan or
Benefit Arrangement, including any Employment Agreement, or adopt any new
such plan or arrangement applicable to any Designated Employee, except for
changes made to Seller's similarly situated employees generally and in the
ordinary course of business; and (3) there has been no (a) material change
in the compensation, benefits, title or respon sibilities of any
Designated Employee or (b) the termination or re-assignment of any
Designated Employee with significant A/TS Network managerial responsi
bilities; or
(x) make any change in the accounting methods for any
Contract or other Acquisition Asset or in the manner of keeping the books
and records of the A/TS Network or financial statements relating to the
operation of the A/TS Network.
(b) Seller will:
(i) (1) maintain the Acquisition Assets in the
ordinary course of business in good operating order and condition,
reasonable wear and tear excepted, and (2) upon any damage, destruction or
loss to any of the Acquisition Assets, apply any and all insurance
proceeds received with respect thereto to the prompt repair, replacement
and restoration thereof to the condition of the Acquisition Assets before
such event;
35
(ii) use its best efforts (other than paying
consideration) to obtain, prior to the Closing Date, all Required
Consents;
(iii) take all actions reasonably necessary to be in
compliance with, and to maintain the effectiveness of, all Permits;
(iv) notify Buyer in writing of any action, event,
condition or circumstance, or group of actions, events, conditions or
circumstances, relating to Seller, the A/TS Network, or, to Seller's
knowledge, any other Person, that results in, or could result in, a
Material Adverse Effect, such notification to be provided to Buyer by
Seller promptly after the occurrence of any such action, event, condition
or circumstance, or group thereof;
(v) notify Buyer in writing of the commencement of any
material Proceeding by or against Seller relating to the business of the
A/TS Network or any of the Acquisition Assets, or of Seller becoming aware
of any threat, claim, action, suit, inquiry, proceeding, notice of
violation, demand letter, subpoena, government audit or disallowance that
could reasonably be expected to result in such a Proceeding, such
notification to be provided to Buyer by Seller promptly after such
commencement or Seller's becoming aware thereof;
(vi) notify Buyer in writing of the occurrence of any
breach by Seller of any representation or warranty, or any covenant or
agreement, contained in this Agreement, promptly after becoming aware of
any such breach;
(vii) pay accounts payable and pursue collection of its
accounts receivable relating to the A/TS Network or Acquisition Assets in
the ordinary course of business; and
(viii)comply with all provisions and requirements of the
WARN Act applicable to the consummation of the transactions contemplated
herein.
5.2 ACCESS TO INFORMATION. From the date hereof until the Closing
Date, Seller and its representatives (including counsel, financial advisors,
auditors and other representatives) will promptly: (a) give Buyer and its
counsel, financial advisors, auditors and other authorized
36
representatives reasonable access to the offices, prop erties, contracts, books
and records of Seller and its Affiliates relating to the A/TS Network or the
Acquisition Assets, (b) furnish to Buyer and its counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information relating to the A/TS Network or the Acquisition Assets as
Buyer may reasonably request, including, without limitation, financial and
operating data of Seller's refining and marketing division directly relating to
the performance of the A/TS Network and (c) instruct the employees, counsel,
auditors, financial advisors and other representatives of Seller and its
Affiliates to cooperate with Buyer and its representa tives in its investigation
of the business of the A/TS Network and the Acquisition Assets; provided,
however, that nothing set forth herein shall obligate Seller to provide Buyer or
any of its attorneys, agents, employees, accoun tants or other representatives
with access to any infor mation that is protected by the attorney-client
privilege or any similar privilege. Seller will provide Buyer and its
representatives (including counsel, financial advisors, auditors and other
authorized representatives) reasonable access to Seller's employees employed in
the business of the A/TS Network, and Buyer shall have the right to discuss the
affairs and business of the A/TS Network with such employees.
5.3 CONFIDENTIALITY. Until the Closing, Buyer shall be subject to
the terms and conditions of the Confidentiality Agreement, as if an original
party thereto. The Confidentiality Agreement shall terminate upon the occurrence
of the Closing.
5.4 ACCESS TO RECORDS AND FILES. Seller shall have the right for a
period of three (3) years following the Closing Date to have reasonable access,
during normal busi ness hours and upon reasonable prior notice, to such books,
records and accounts, correspondence, and employment records and other similar
information as are transferred to Buyer pursuant to the terms of this Agreement
for the limited pur poses of concluding Seller's involvement in the business of
the A/TS Network prior to the Closing Date; PROVIDED, HOW EVER, that nothing set
forth herein shall obligate Buyer to provide Seller or any of its attorneys,
agents, employees, accountants or other representatives with access to any
information that is protected by the attorney-client privi lege or any similar
privilege. Nothing contained herein shall impose any obligation upon Buyer to
retain any such books and records beyond the retention periods delineated in the
Buyer's policies relating to the retention of books and
37
records pertaining to similar subject matter or of a similar type. All
information obtained by Seller and its authorized representatives pursuant to
this Section 5.4 shall be kept confidential by Seller and shall not be used by
it for any purpose other than concluding its involvement in the busi ness of the
A/TS Network prior to the Closing Date.
5.5 PUBLIC ANNOUNCEMENTS. The parties hereto agree that prior to the
Closing they will not make any dis closures to any Person (other than Operators
and Resellers) regarding the existence or contents of this Agreement or
negotiations relating to the transactions contemplated herein or cause to be
publicized in any manner whatsoever by releases or otherwise any aspect or
proposed aspect of the transactions contemplated herein without prior written
notice to and approval of, which shall not be unreasonably withheld, the other
parties hereto, unless such party reasonably concludes that such release of
information is required by Applicable Law or necessary in order to obtain
Required Consents and the parties hereto cannot reach agreement upon a mutually
acceptable form of release. Notwithstanding the foregoing, the parties hereto
may, on a confidential basis, advise their respective agents, accoun tants,
attorneys and prospective financing sources (includ ing any Operators or
Resellers) with respect to the contents of this Agreement and the transactions
contemplated herein.
5.6 NO SHOPPING. From the date hereof until the earlier of the
Closing Date or the termination of this Agreement in accordance with its terms,
Seller shall not, and shall cause each of its Affiliates not to, directly or
indirectly, through any officer, director, employee or agent or otherwise,
solicit, initiate, encourage, participate in any negotiation or discussion or
enter into any agreement in respect of, or cooperate with (including, without
limita tion, by way of furnishing any non-public information con cerning, or
affording access to, the business, properties or assets of the A/TS Network),
any Acquisition Proposal (as hereinafter defined) pertaining to the A/TS
Network. The term "Acquisition Proposal" means any proposal (other than a
proposal by Buyer) for the acquisition of all or any portion of the assets
comprising the A/TS Network or for a merger, consolidation or other business
combination pursuant to which any other person would acquire the A/TS Network or
any substantial equity interest therein or any Acquisition Assets (or portion
thereof). In the event Seller receives any Acquisition Proposal it shall
promptly notify Buyer in writing of the identity of the party making the
Acquisition Proposal and, if, in the good faith judgment of Seller, Seller
determines that it can disclose the terms, conditions
38
and circumstances of such Acquisition Proposal to Buyer without breaching an
obligation to such party or otherwise exposing Seller to liability, Seller shall
disclose such terms, conditions and circumstances to Buyer.
5.7 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each party will use all rea sonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under Applicable Law to consummate the transac tions contemplated by
this Agreement. Seller and the Buyer agree to execute and deliver such other
documents, certif icates, agreements and other writings, including instruments
of transfer with respect to the Acquisition Assets, and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the trans actions contemplated by this Agreement, provided that
Seller is not obligated to pay consideration to obtain any consents.
5.8 COOPERATION IN LITIGATION. Each party will fully cooperate with
the other in the defense or prosecution of any litigation or proceeding already
instituted or which may be instituted hereafter against or by such party relat
ing to or arising out of the conduct of the A/TS Network or the Acquisition
Assets prior to or after the Closing Date (other than litigation arising out of
the transactions con templated by this Agreement).
5.9 CERTAIN FILINGS. Seller and Buyer shall cooperate with one
another in determining whether any action by or in respect of, or filing with,
any Governmental Authority or with respect to any Required Permit Approval is
required or reasonably appropriate, or any action, consent, approval or waiver
from any party to any Contract is required or reasonably appropriate, in
connection with the consummation of the transactions contemplated by this Agree
ment; PROVIDED, HOWEVER, that Seller and Buyer retain the right to make any
filings required by Applicable Law. Subject to the terms and conditions of this
Agreement, Seller and Buyer shall seek to timely obtain any such actions,
consents, approvals or waivers and shall furnish all information required in
connection therewith. Without limiting the foregoing, (i) Seller and Buyer shall
each promptly complete and file all reports and forms, and respond to all
requests or further requests for additional information, as may be required or
authorized under the HSR Act and (ii) Seller will comply with all provisions and
requirements of the WARN Act applicable to the consummation of the transactions
contemplated herein, including any such
39
provisions and requirements applicable to (x) any termination of the employment
of any of Seller's employees upon notice from Buyer pursuant to Section 5.12
that it no longer desires the services of such employees or (y) the expiration
of the six-month period set forth in Section 5.12. None of the provisions in
this Section 5.9 abrogate or limit in any way any of the representations,
warranties and covenants made by Seller in any of the other provisions in this
Agreement.
5.10 ADMINISTRATION OF ACCOUNTS.
(a) All accounts receivable paid in the ordinary course by any
third party in the name of or to Buyer in connection with the operation of the
A/TS Network on or prior to the Closing Date shall be held by Buyer in trust for
the benefit of Seller and, promptly upon receipt by Buyer of any such payment,
Buyer shall forward to Seller such monies, checks, instruments or other payments
without right of set off. Seller hereby authorizes Buyer to open any and all
mail addressed to Seller (if delivered to Buyer) if received on or after the
Closing Date.
(b) All accounts receivable paid in the ordinary course by any
third party in the name of or to Seller in connection with the operation of the
A/TS Network after the Closing Date shall be held by Seller in trust for the
benefit of Buyer and, immediately upon receipt by Seller of any such payment,
Seller shall forward to Buyer such monies, checks, instruments or other payments
without right of set off. Buyer hereby authorizes Seller to open any and all
mail addressed to Buyer (if delivered to Seller) if received on or after the
Closing Date.
5.11 TITLE INSURANCE; ENCUMBRANCES. If, at any time on or prior to
the Closing Date, Buyer obtains preliminary title reports or surveys showing, or
otherwise learns of, any Encumbrance on any parcel of Real Property that is not
a Permitted Encumbrance, Seller will, immedi ately upon receipt of notice from
Buyer of such Encumbrance (or immediately upon Seller's obtaining actual
knowledge of such Encumbrance, whichever is sooner), use its best efforts to
cause title to such Real Property to be cleared of such Encumbrance on or prior
to the Closing Date; PROVIDED, HOWEVER, that if such Encumbrance relates to or
is in connection with indebtedness, Seller covenants that it will cause the
indebtedness to be paid in full and/or take all actions necessary to remove such
Encumbrance.
40
5.12 EMPLOYEES AND BENEFITS. (a) For a period of six months
following the Closing Date, Seller will use its best efforts to continue to have
the Designated Employees available to render services on behalf of and at the
direction of the Buyer. Such best efforts shall not require the Seller to incur
any costs in excess of those reimbursable by Buyer. Seller will continue to
maintain and contribute to the ERISA Plans and Benefit Arrangements, including
Employment Agreements, for the Designated Employees during such six month period
on the same terms and conditions as on the Closing Date, except for changes made
generally applicable to Seller's similarly situated employees. Buyer will
reimburse Seller for such employees' salaries (but not bonuses) and hourly wages
(at their salary and wage rate in effect as of the Closing or as thereafter
increased in the ordinary course consistent with past practice) and will pay to
Seller an additional amount equal to 45% of such salaries and wages as full
reimbursement for all employee benefit expenses incurred by Seller. Except as
provided in Section 7.2(d) (concerning Buyer's indemnification with respect to
certain employment discrimination violations), Buyer's obligation for any
Liability with respect to any Designated Employee that arises or accrues prior
to such time, if any, as such Designated Employee is employed by Buyer shall be
limited to payment of the amounts described in the preceding sentence. Buyer
acknowledges that Seller shall have no liability to Buyer for any actions or
decisions made or taken by the Designated Employees (whether as a result of the
negligence, gross negligence or willful misconduct of the Designated Employees
or otherwise) in the course of their rendering services on behalf of and at the
direction of Buyer.
(b) Upon at least 14 days' advance written notice to Seller,
during the six month period following the Closing Date, Buyer may offer
employment to such of the Designated Employees as Buyer may determine in its
sole discretion. Upon any such Designated Employee's acceptance of employment
with Buyer, Buyer will notify Seller of such acceptance and Buyer's obligation
to reimburse Seller for such employee's salary and benefits, and Seller's
obligation to provide such salary and benefits, will terminate on the effective
date of such employee's employment with Buyer, which date shall be within the
six month period following the Closing Date and which date shall be set forth in
the aforesaid notice of acceptance of employment.
(c) If a Designated Employee of Seller is hired by Buyer
within one year after the Closing Date, Buyer shall recognize under each of
Buyer's comparable plans, if
41
any, such employee's prior service with Seller for purposes of eligibility for
participation and vesting.
(d) Upon 30 days' advance written notice to Seller, Buyer may
notify Seller that it no longer wishes the services of any of the Designated
Employees that Buyer may determine in its sole discretion. Upon the effective
date of such notice to Seller, such employee shall no longer provide services
to Buyer and Buyer's obligation hereunder to reimburse Seller for such
employee's salary, wages and bene fits will terminate. Neither Seller nor Buyer
shall have any obligation hereunder to employ or continue to employ any of
Seller's employees. With respect to any Designated Employee for whom notice has
not been given pursuant to either subsection (b) or subsection (d) of this
Section 5.12 within 14 days prior to the end of the six month period following
the Closing Date, then the service of any such Designated Employee on behalf of
Buyer shall end as of the last day of such six-month period.
(e) All termination or similar benefits, if any, payable to a
Designated Employee who is not employed by the Buyer shall be solely the
responsibility of Seller.
5.13 ADJUSTMENT CERTIFICATE. At the Closing, Seller shall deliver to
Buyer a draft certificate and within seven days after the Closing Date Seller
shall deliver to Buyer a final certificate (such final certificate being
referred to as the "Adjustment Certificate") specifying (i) the various amounts
of each type of Inventory as of the Closing Date and (ii) the various types and
amounts of deposits which Seller has made with third parties in connection with
the operation of the A/TS Network and (iii) the various types and amounts of
prepaid expenses (including, personal and real property taxes but excluding any
and all transfer and conveyance taxes). Buyer may elect not to purchase, and
exclude from the definition of Acqui sition Assets, any of such Inventory other
than petroleum distillate and gasoline, and saleable products and mer chandise.
Buyer and Seller shall mutually agree to the "fair market" wholesale price (the
"Inventory Amount") of those items of Inventory included within the definition
of Acquisition Assets according to the pricing methodology set forth in Section
5.13 of the Disclosure Schedule. Buyer shall, promptly following delivery by
Seller of the Adjustment Certificate, pay to Seller an amount equal to the
Inventory Amount plus the aggregate amount of such deposits and prepaid
expenses. In the event of any dispute as to the amount to be paid by Buyer to
Seller pursuant to this Section 5.13, Buyer and Seller shall attempt to resolve
such
42
dispute and in the absence of any such resolution, Buyer and Seller shall
mutually appoint a Person to determine the amount payable by Buyer to Seller
pursuant to this Section 5.13.
5.14 COOPERATION WITH RESPECT TO FINANCING.
(a) Seller will cooperate with Buyer in connection with the
obtaining of the financing referred to in Section 6.2(h) hereof and in the
preparation of one or more registration statements or offering memoranda for the
public or private offering of debt or equity securities to be issued by Buyer
(collectively, the "Offering Material") by furnishing to Buyer all information
reasonably requested by Buyer relating to such financing or the preparation of
the Offering Material.
(b) In connection with the preparation of the Offering
Material, Seller will assist in the preparation of all historical information
requested by Buyer with respect to the A/TS Network or Acquisition Assets for
inclusion in such Offering Material, provided such information is available to
Seller without unreasonable expense, including, without limitation, (i) a
description of the business and properties of, and the legal proceedings with
respect to, the A/TS Network or Acquisition Assets and (ii) financial
information with respect to the A/TS Network or Acquisition Assets, including,
without limitation, financial statements, selected financial data and supple-
mentary financial information, management's discussion and analysis of financial
condition and results of operations and disagreements with accountants on
accounting and financial disclosure, if any.
5.15 PMPA. Prior to the Closing Date (i) Seller agrees not to take
any action (and Buyer agrees not to cause Seller to take any action) (including,
without limitation, failing to renew the lease of any Operator) which would give
any Operator any option or other right, whether under PMPA or any other statute
or regulation, to acquire the facility leased by Seller to such Operator.
5.16 PROPERTIES. Without diminishing or impairing any rights of
Seller or Buyer contained elsewhere in this Agreement or in any other agreement,
document or certificate delivered pursuant hereto, in the event that one or more
of the properties (the "Non-Conveyable Properties") included in the Acquisition
Assets cannot be conveyed by Seller to Buyer (whether as a result of a title
defect, environmental matter, damage or otherwise), Seller and Buyer
43
shall enter into negotiations with respect to the conveyance of the Acquisition
Assets (other than the Non-Conveyable Properties) to Buyer at a purchase price
to be agreed upon by Seller and Buyer.
5.17 RECENT FINANCIAL STATEMENTS. Prior to the Closing Date, Seller
agrees to timely prepare and deliver to Buyer financial statements comparable to
those delivered pursuant to Section 3.5 hereof for any quarter or year which
ends on a date subsequent to September 30, 1992.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 (a) CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
Seller and Buyer to consummate the transactions contemplated hereby shall be
subject to the fulfillment, at or prior to the Closing Date, of the following
conditions:
(b) NO ACTION OR PROCEEDING. No Proceeding shall be pending or
threatened before any Governmental Authority which presents a material risk of
the restraint or prohibition of the transactions contemplated by this Agreement
or the obtaining of material Damages or other relief in connection therewith.
(c) COMPLIANCE WITH LAW. There shall have been obtained all
permits, approvals and consents of Governmental Authorities which counsel for
Buyer or for Seller may reasonably deem necessary or appropriate so that
consummation of the transactions contemplated by this Agreement will be in
compliance with Applicable Law, including, without limitation, the permits,
approvals and consents listed in Section 3.3 and 4.3, but excluding any Required
Permit Approvals.
(d) ANCILLARY AGREEMENTS. Seller and Buyer shall have executed
and delivered the Ancillary Agreements.
6.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transactions contemplated hereby shall be, at the option of
Buyer, subject to the fulfillment, at or prior to the Closing Date, of the
following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Seller contained in
44
this Agreement, the Environmental Agreement or in any other document of Seller
delivered pursuant hereto shall be true and correct in all material respects on
the Closing Date with the same effect as if made on the Closing Date. Seller
shall have delivered to Buyer a certificate to such effect signed by the
President or any Vice President and the Secretary or any Assistant Secretary of
Seller.
(b) SELLER'S PERFORMANCE. Each of the obligations of Seller to
be performed by it on or before the Closing Date pursuant to the terms of this
Agreement or the Environmental Agreement shall have been duly performed in all
material respects on or before the Closing Date. Seller shall have delivered to
Buyer a certificate to such effect signed by the President or any Vice President
and the Secretary or any Assistant Secretary of Seller.
(c) OPINION OF SELLER'S COUNSEL. Buyer shall have been
furnished at the Closing with an opinion of Xxxxxx Codon, counsel to Seller,
dated the Closing Date, addressed to Buyer in form and substance satisfactory to
Buyer. As to any matter contained in such opinion which involves the laws of a
jurisdiction in which such counsel is not admitted to practice, such counsel may
rely upon the opinion of local counsel of established reputation satisfactory
to Buyer. Any such opinion may expressly rely as to matters of fact upon
certificates furnished by appropriate officers of Seller or appropriate
governmental officials.
(d) ADDITIONAL CLOSING DOCUMENTS OF SELLER. Buyer shall have
received at the Closing the following documents, dated the Closing Date:
(i) copies, certified by the Secretary or an Assistant
Secretary of Seller, of resolutions of the Board of Directors of Seller or
the Executive Committee thereof authorizing the execution, delivery and
performance of this Agreement and all other agreements, documents and
instruments relating hereto and the consummation of the transactions
contemplated hereby;
(ii) bills of sale and assignment, in form and
substance reasonably satisfactory to counsel for Buyer, duly executed by
Seller, covering the items of personal property included in the
Acquisition Assets to be transferred or assigned to Buyer at the Closing,
and assignments in form and substance reasonably satisfactory to counsel
for Buyer;
45
(iii) special warranty deeds (or their equivalent in
each applicable state) in proper statutory form for recording duly
executed and acknowledged by Seller covering the Owned Real Property to be
conveyed to Buyer pursuant to this Agreement;
(iv) such further instruments of sale, transfer,
conveyance, assignment or delivery covering the Acquisition Assets or any
part thereof as Buyer may reasonably require to assure the full and
effective sale, transfer, conveyance, assignment or delivery to it of the
Acquisition Assets to be transferred to Buyer under this Agreement; and
(v) such other documents (duly executed
as applicable) as Buyer may reasonably request.
(e) REQUIRED PERMIT APPROVALS. All
Required Permit Approvals shall have been obtained without the imposition of any
conditions that are or would become applicable to the A/TS Network, the
Acquisition Assets, Buyer or any Operator or Reseller which Buyer in good faith
reasonably determines would be materially burdensome upon the A/TS Network, the
Acquisition Assets, Buyer or any Operator or Reseller or Buyer's conduct of
business after the Closing. All such Required Permit Approvals shall be in
effect, and no Proceeding shall have been instituted or threatened by any
Governmental Authority with respect thereto as to which, in Buyer's good faith
opinion, there is a material risk of a determination that would terminate the
effectiveness of, or otherwise materially and adversely modify the terms of, any
such Permit Approval.
(f) REQUIRED CONTRACTUAL CONSENTS. All Required Contractual
Consents shall have been obtained in written instruments reasonably satisfactory
to Buyer.
(g) TITLE TO REAL PROPERTY. Title to the Real Property being
transferred to Buyer hereunder shall have been cleared of any Encumbrances which
are not Permitted Encumbrances
(h) FINANCING. All conditions precedent set forth in the
documents relating to the funding of any debt and equity the proceeds of which
Buyer shall use to effectuate the acquisition of the Acquisition Assets shall
have been fulfilled and the Persons committed to providing such funding shall be
prepared to do so concurrently with the Closing.
46
(i) MATERIAL ADVERSE EFFECT. There shall not have occurred any
event, occurrence, development or state of circumstances or facts or change in
the Acquisition Assets or business of the A/TS Network (including any damage,
destruction or other casualty loss) affecting the business of the A/TS Network
or any Acquisition Asset which has had or which may reasonably be expected to
have, either alone or together with all such events, occurrences, developments,
states of circumstances or facts or changes, a Material Adverse Effect.
6.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the transactions contemplated hereby shall be, at the option of
Seller, subject to the fulfillment, at or prior to the Closing Date, of the
following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Buyer contained in this Agreement or in any document delivered
pursuant hereto shall be true and correct in all material respects on the
Closing Date with the same effect as if made on the Closing Date. Buyer shall
have delivered to Seller a certificate to such effect, signed by the President
or any Vice President and the Secretary or any Assistant Secretary of Buyer.
(b) PERFORMANCE OF COVENANTS. Each of the obligations of Buyer
to be performed on or before the Closing Date pursuant to the terms of this
Agreement shall have been duly performed in all material respects on or before
the Closing Date. Buyer shall have delivered to Seller a certificate to such
effect signed by the President or any Vice President and the Secretary or any
Assistant Secretary of Buyer.
(c) OPINION OF BUYER'S COUNSEL. Seller shall have been
furnished with an opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel
to Buyer, dated the Closing Date, addressed to Seller in form and substance
satisfactory to Seller. As to any matter which involves the laws of a
jurisdiction in which the counsel rendering the opinion is not admitted to
practice, such counsel may rely upon the opinion of local counsel of established
reputation satisfactory to Seller. Such opinion may expressly rely as to matters
of fact upon certificates furnished by appropriate officers of Buyer or
appropriate governmental officials.
47
(d) ADDITIONAL CLOSING DOCUMENTS OF BUYER. Seller shall have
received at the Closing the following documents, each dated the Closing Date:
(i) copies, certified by the Secretary or an Assistant
Secretary of Buyer, of resolutions of its Board of Directors or the
Executive Committee thereof authorizing the execution and delivery of this
Agreement and all other agreements, documents or instruments relating
hereto and the consummation of the transactions contemplated hereby;
(ii) confirmation of the wire transfers to be delivered
by Buyer at the closing pursuant to Section 2.05(i) and (iii) hereof; and
(iii) such other closing documents (duly executed as
applicable) as Seller may reasonably request.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY SELLER. Except for indemnification with
respect to Environmental Liabilities, which shall be governed by the
Environmental Agreement, Seller shall indemnify and hold harmless Buyer, Buyer's
Affiliates and their respective officers, directors, employees and agents
(collectively, the "Buyer Indemnitees") in respect of any and all Damages
reasonably incurred by any Buyer Indemnitee, whether paid or payable, as a
result of or otherwise in connection with each and all of the following:
(a) any breach of any representation or warranty made by
Seller in this Agreement;
(b) the breach of any covenant, agreement or obligation of
Seller contained in this Agreement or any other instrument contemplated by this
Agreement;
(c) any misrepresentation contained in any statement or
certificate furnished by Seller pursuant to this Agreement or in connection with
the transactions contemplated by this Agreement:
(d) any Liability relating to the A/TS Network or the
Acquisition Assets existing or arising on or resulting from events which
occurred or failed to occur on
48
or before the Closing Date, except to the extent such liability is assumed by
Buyer hereunder;
(e) any failure of Buyer to obtain the protections afforded by
compliance with the notification requirements of the bulk sale, bulk transfer
and similar laws in force in the jurisdictions in which such laws may be
applicable to either Seller or the transactions contemplated by this Agreement;
(f) the Excluded Assets and any Liability which is not an
Assumed Liability, including, without limitation, the liabilities listed in
clauses (i) through (xii) of Section 2.3 (other than any Liability within clause
(vii) of Section 2.3 to the extent (and solely to the extent) such Liability
results from a claim against Buyer in respect of actions taken by Buyer prior to
the Closing Date);
(g) any Liability arising under the WARN Act with respect to
the termination by Seller or any of its Affiliates of any employee of Seller
(including any Designated Employee) and any Liability under any ERISA Plan or
Benefit Arrangement with respect to any employee (including any Designated
Employee) of Seller or any of Seller's Affiliates;
(h) any Liability with respect to any tax liabilities of any
and all kinds arising out of the ownership, operation or possession of the A/TS
Network or the Acquisition Assets prior to the Effective Time, and, except as
expressly provided elsewhere in this Agreement, any obligation of Seller or any
consolidated group of which Seller is or was a member with respect to any and
all taxes, including, without limitation, any debts, liabilities, obligations or
commitments for any income, excise, sales, use, gross receipts, franchise,
employment, payroll-related or property tax of any sort, and any deficiencies,
assessments, charges, interest and penalties associated therewith, imposed upon
Seller or any consolidated group of which Seller is or was a member by the
United States, any taxing authority outside the United States or any state or
local instrumentality or authority within the United States, relating to,
accrued for, applicable to or arising from any period as of, prior to or after
the Effective Time; and
(i) any claim pursuant to PMPA or any similar or related
federal or state statute or regulation (including any such claim arising out of
or resulting from the execution and delivery of this Agreement or the sale of
any of the Acquisition Assets to the Buyer) but excluding
49
(x) any such claim to the extent to which it arises out of or results from
events which occur after the Closing Date or (y) any such claim against Buyer
which arises out of or results from actions which are alleged will be taken by
the Buyer after the Closing Date (provided, that any claim described in this
clause (y) shall not be excluded from the scope of Seller's indemnity in this
paragraph (f) if the claim against Buyer is withdrawn or dismissed or it is
determined that neither Buyer nor Seller has any Liability in respect of such
claim).
7.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold
harmless Seller, Seller's Affiliates and their respective officers, directors,
employees and agents (collectively the "Seller Indemnitees") in respect of any
and all Damages reasonably incurred by any Seller Indemnitee, whether paid or
payable, as a result of or in connection with each and all of the following:
(a) any breach of any representation or warranty made by Buyer
in this Agreement;
(b) the breach of any covenant, agreement or obligation of
Buyer contained in this Agreement or any other instrument contemplated by this
Agreement;
(c) any misrepresentation contained in any statement or
certificate furnished by Buyer pursuant to this Agreement or in connection with
the transactions contemplated by this Agreement;
(d) the Assumed Liabilities and any Liability relating to the
A/TS Network or the Acquisition Assets arising after or resulting from events
which occurred after the Closing Date, except to the extent such liability is
specifically assumed by Seller hereunder;
(e) any Liability arising out of, or resulting from: (i) the
Buyer's violation of any employment discrimination law with respect to any
Designated Employee prior to or during the six month period following the
Closing Date; (ii) Buyer's improper use of any Designated Employee's employment
records transferred to Buyer by Seller or any of its Affiliates; or (iii)
Buyer's illegal conduct in connection with Buyer's interviews of Seller's
employees pursuant to Section 5.2; or
(f) any Liability with respect to any tax liabilities of any
and all kinds arising out of the ownership, operation or possession of the A/TS
Network or the Acquisition Assets after the Effective Time.
50
7.3 DEFENSE OF CLAIMS. Whenever any claim shall arise for
indemnification hereunder, the party entitled to indemnification (the
"Indemnified Party") shall promptly notify the other party (the "Indemnifying
Party") of the claim and, when known, the facts constituting the basis for such
claim. If the Indemnified Party fails to provide the Indemnifying Party with
such notice prior to the time at which the Indemnifying Party's ability to
defend against such claim is irrevocably prejudiced by the failure to provide
such notice, the Indemnifying Party will not be obligated to indemnify the
Indemnified Party with respect to such portion of the claim as to which the
Indemnifying Party's ability to defend has been prejudiced by such failure. The
Indemnifying Party may, upon written notice to the Indemnified Party within 30
calendar days of receipt of the notice specified in the first sentence of this
para graph, assume the defense of any such claim if the Indemnifying Party
acknowledges to the Indemnified Party the Indemnified Party's right to indemnity
pursuant hereto in respect of the entirety of such claim. If the Indemnifying
Party assumes the defense of any such claim, the Indemnifying Party shall
select counsel reasonably acceptable to the Indemnified Party to conduct the
defense of such claim, shall take all steps necessary in the defense or
settlement thereof and shall at all times diligently and promptly pursue the
resolution thereof. If the Indemnifying Party shall have assumed the defense of
any claim in accordance with this Section 7.3, the Indemnifying Party shall be
authorized to consent to a settlement of, or the entry of any judgment arising
from, any such claim, without the prior written consent of the Indemnified
Party; PROVIDED, HOWEVER, that the Indemnifying Party shall pay or cause to be
paid all amounts arising out of such settlement or judgment concurrently with
the effectiveness thereof; PROVIDED, FURTHER, that the Indemnifying Party shall
not be authorized to encumber any of the assets of the Indemnified Party or to
agree to any restriction that would apply to the Indemnified Party, or to any
other Buyer or Seller Indemnitee, as applicable, or to its conduct of business
or to any other Buyer or Seller Indemnitee, as applicable, or to their conduct
of business; AND PROVIDED, FURTHER, that a condition to any such settlement
shall be a complete release of the Indemnified Party with respect to such claim.
The Indem nified Party shall be entitled to participate in (but not control) the
defense of any such action, with its own counsel and at its own expense. The
Indemnified Party shall, and shall cause each of its Affiliates, officers,
employees, consultants and agents and each other Buyer or Seller Indemnitee, as
applicable, to, cooperate fully with the Indemnifying Party in the defense of
any claim pursuant to this Section 7.3. If the Indemnifying Party does not
51
assume the defense of any claim resulting therefrom in accordance with the terms
of this Section 7.3, the Indemnified Party may defend against such claim in
such manner as it may deem appropriate, including settling such claim after
giving notice of the same to the Indemnifying Party, on such terms as the
Indemnified Party may deem appropriate.
7.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by the parties in Articles III and IV and in any instrument
or document furnished in connection herewith shall survive the Closing and any
investigation at any time made by or on behalf of the parties hereto and shall
expire on the fourth anniversary of the Closing Date, except (i) as to any
matter as to which a claim is submitted in writing to the Indemnifying Party
prior to such fourth anniversary and identified as a claim for indemnification
pursuant to this Agreement, (ii) the inaccuracy of any representation or
warranty arising out of the fraud, gross negligence or willful misconduct of
Seller or Buyer, which representation and warranty shall survive until sixty
(60) days following the expiration of the applicable statute of limitations,
including extensions thereof and (iii) any inaccuracy in the representations or
warranties set forth in Sections 3.8 and 4.5 of this Agreement, which
representations and warranties shall survive until the expiration of sixty (60)
days following the applicable statute of limitations, including extensions
thereof. The covenants of Seller and Buyer hereunder, including the
indemnification obligations of Seller under Section 7.1(b), (d), (e), (f) and
(g) and the indemnification obligations of Buyer under Section 7.2(b) and (d),
shall survive until the expiration of any applicable statute of limitations. No
claim or action for indemnity pursuant to Sections 7.1 or 7.2 hereof for breach
of any representation or warranty shall be asserted or maintained by any party
hereto after the expiration of such representation or warranty pursuant to the
first sentence of this Section 7.4 except for claims made in writing prior to
such expiration and actions (whether instituted before or after such expiration)
based on any claim made in writing prior to such expiration.
7.5 LIMITATIONS ON INDEMNIFICATION FOR BREACHES OF REPRESENTATIONS
AND WARRANTIES. No amount shall be recoverable for Damages under Section 7.1(a)
or (c) unless and only to the extent that the aggregate amount of such Damages,
when added to all other Damages claimed by the Buyer Indemnitees under Section
7.1(a) and (c) (exclusive of any Damages for which the Buyer Indemnitees are
indemnified pursuant to Article VIII), exceeds $250,000. Notwithstanding the
foregoing sentence, indemnification under Section
52
7.1(a) and (c) may be claimed with respect to all Damages resulting from, and
full recovery shall be made for, (i) the inaccuracy of any representation or
warranty set forth in Section 3.8 or 3.19 and (ii) the inaccuracy of any
representation or warranty arising out of the fraud, gross negligence or willful
misconduct of Seller.
ARTICLE VIII
TERMINATION
8.1 GROUNDS FOR TERMINATION. This Agreement may
be terminated at any time prior to the Closing:
(i) by mutual written agreement of Seller and Buyer;
(ii) by Buyer at any time following the expiration of
ten (10) days from the date that Buyer has given written notice to Seller
of any one or more material inaccuracies or material misrepresentations in
or material breaches of the representations or warranties made by Seller
and Seller shall have failed to cure such inaccuracies and breaches in all
material respects in said ten (10) day period; PROVIDED, HOWEVER, that in
the event that within said ten (10) day period Seller has undertaken
reasonable actions to cure such inaccuracies and breaches and such actions
are being diligently pursued by Seller, no termination under this clause
(ii) shall take effect unless Seller shall have failed to cure such
inaccuracies and breaches in all material respects within forty-five (45)
days after delivery of the original notice from Buyer;
(iii) by Buyer at any time following the expiration of
ten (10) days from the date that Buyer has given written notice to Seller
of Seller's failure to perform and satisfy in any material respect any of
Seller's obligations under this Agreement and Seller shall have failed to
cure such failure in all material respects in said ten (10) day period;
PROVIDED, HOWEVER, that in the event that within said ten (10) day period
Seller has undertaken reasonable actions to cure such failure and such
actions are being diligently pursued by Seller, no termination under this
clause (iii) shall take effect unless seller shall have failed to cure
such failure in all material respects within forty-five (45) days after
delivery of the original notice from Buyer;
53
(iv) by Seller at any time following the expiration of
ten (10) days from the date that Seller has given written notice to Buyer
of any one or more material inaccuracies or material misrepresentations in
or material breaches of the representations or warranties made by Buyer
herein and Buyer shall have failed to cure such inaccuracies and breaches
in all material respects in said ten (10) day period; PROVIDED, HOWEVER,
that in the event that within said ten (10) day period Buyer has
undertaken reasonable actions to cure such inaccuracies and breaches and
such actions are being diligently pursued by Buyer, no termination under
this clause (iv) shall take effect unless Buyer shall have failed to cure
such inaccuracies and breaches in all material respects within forty-five
(45) days after delivery of the original notice from Seller;
(v) by Seller at any time following the expiration of
ten (10) days from the date that Seller has given written notice to Buyer
of Buyer's failure to perform and satisfy in any material respect any of
Buyer's obligations under this Agreement and Buyer shall have failed to
cure such failure in all material respects in said ten (10) day period;
PROVIDED, HOWEVER, that in the event that within said ten (10) day period
Buyer has undertaken reasonable actions to cure such inaccuracies and such
actions are being diligently pursued by Buyer, no termination under this
clause (v) shall take effect unless Buyer shall have failed to cure such
inaccuracies in all material respects within forty-five (45) days after
delivery of the original notice from Seller;
(vi) by either Buyer or Seller if the Closing shall not
have been consummated by May 15, 1993, or such later date as mutually
agreed to in writing by Buyer and Seller (the "Termination Date");
provided, however, that neither Buyer nor Seller may terminate this
Agreement pursuant to this clause (vi) if the Closing shall not have been
consummated by the Termination Date by reason of the failure of such party
to perform in all material respects any of its cove nants or agreements
contained in this Agreement; or
(vii) by Buyer by written notice to Seller on or prior
to December 31, 1992 if Buyer, in its reasonable judgment, determines that
it is not satisfied with the results of its due diligence.
54
8.2 EFFECT OF TERMINATION. Subject to the next sentence, if this
Agreement is terminated in accordance with Section 8.1 as a result of a breach
by any party to this Agreement, the liability of the breaching party shall not
exceed the out-of-pocket costs of the non-breaching party in connection with
this Agreement and the transactions contemplated hereby. If this Agreement is
terminated in accordance with Section 8.1 as a result of (i) the wilful failure
of a party to fulfill a condition to the performance of the other party, (ii)
the wilful failure of a party to perform a covenant under this Agreement, or
(iii) a breach, the consequences of which are material with respect to the
Acquisition Assets, of any representation contained in this Agreement, which the
party making such representation knew was false on the date hereof, then such
breaching party shall be fully liable for any and all Damages sustained or
incurred by the other party.
ARTICLE IX
MISCELLANEOUS
9.1 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) if
personally delivered, when so delivered, (ii) if mailed, two Business Days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below,
(iii) if given by telex or telecopier, once such notice or other communication
is transmitted to the telex or telecopier number specified below and the
appropriate answer back or telephonic confirmation is received, provided that
such notice or other communication is promptly thereafter mailed in accordance
with the provisions of clause (ii) above or (iv) if sent through a reputable
overnight delivery service in circumstances to which such service guarantees
next day delivery, the day following being so sent:
If to Seller, to: Union Oil Company of California
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: X.X. Xxxxxxxxx
Telecopy: (000) 000-0000
55
Copy to: Union Oil Company of California
0000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: W. Xxxxxx Xxxx
Telecopy: (000) 000-0000
If to Buyer,to: National Auto/Truckstops, Inc.
c/o Unocal Petroleum Products and
Chemicals Division
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Copy to: The Clipper Group, L.P.
Park Avenue Plaza
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
Copy to: Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
Either party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Either party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
9.2 AMENDMENTS; WAIVERS; REMEDIES.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by Buyer and Seller, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No waiver by either party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation
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or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence. No single or partial
exercise by either party in exercising any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
9.3 EXPENSES. Personal and real property taxes and prepaid expenses
shall be prorated as of the Closing Date. Buyer shall timely file (after giving
effect to any applicable extensions) or cause to be filed all required personal
and real property reports and returns which are due on or after the Closing Date
and shall pay or cause to be paid to the Tax Authorities all such taxes
reflected on such reports or returns. All taxes imposed on the transactions
contemplated hereby, including any sales and use taxes and any real property
transfer taxes, shall be borne by the Seller. Subject to the immediately
preceding sentence, as to any special or general assessments against any of the
Acquisition Assets which are payable in installments, Buyer shall be responsible
for all assessments which relate to periods after the Effective Time. The costs
of obtaining surveys and title insurance shall be borne by Buyer. Except as
otherwise provided herein, all costs, fees and expenses incurred in connection
with this Agreement shall be paid by the party incurring the same.
9.4 SCHEDULES. Seller and Buyer acknowledge that the Disclosure
Schedule is in draft form. Seller shall finalize the Disclosure Schedule as
promptly as practicable but in any event within ten days of the date hereof.
9.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
9.6 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the internal laws (and not the conflict of laws) of the
State of California; PROVIDED, HOWEVER, that the validity of the conveyance of
Real Property shall be governed by the law of the state in which the Real
Property is situated.
9.7 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto
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shall have received a counterpart hereof signed by the other party hereto.
9.8 ENTIRE AGREEMENT. This Agreement (including the documents,
schedules and exhibits referred to herein which are hereby incorporated by
reference) constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements, understandings
and negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
9.9 JURISDICTION. Each of the parties hereto irrevocably submits to
the jurisdiction of any state or federal court sitting in the County of Los
Angeles, State of California, in any action or proceeding arising out of or
relating to this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, or to contest the
jurisdiction (in rem or in personam) or power or decision of such court over or
pertaining to the party or with respect to the subject matter in any other court
within or without the United States other than appropriate appellate courts.
Each of the parties hereto irrevocably waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any bond,
surety, or other security that might be required of the other party hereto with
respect thereto.
9.10 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article or Section include all subparts thereof.
9.11 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
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9.12 CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against either
party. Whenever required by the context, any gender shall include any other
gender, the singular shall include the plural and the plural shall include the
singular. The headings contained in this Agreement are for reference purposes
only and shall not effect in any way the meaning or interpretation of this
Agreement. Whenever the word "including" is used in this Agreement, it shall be
deemed to mean "including, without limitation," "including, but not limited to"
or other words of similar import such that the items following the word
"including" shall be deemed to be a list by way of illustration only and shall
not be deemed to be an exhaustive list of applicable items in the context
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
UNION OIL COMPANY OF CALIFORNIA
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
--------------------------
NATIONAL AUTO/TRUCKSTOPS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Treasurer
NATIONAL AUTO/TRUCKSTOPS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
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