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EXHIBIT 2.1
REORGANIZATION AND
DISTRIBUTION AGREEMENT
between
GETTY PETROLEUM CORP.
and
GETTY PETROLEUM MARKETING INC.
dated as of
January 31, 1996
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS ................................................. 2
Section 1.01 General ............................................. 2
Section 1.02 Terms Defined Elsewhere in Agreement ................ 14
ARTICLE II - TRANSFER OF ASSETS ........................................ 14
Section 2.01 Merger of Aero into Getty ........................... 14
Section 2.02 Transfer of Assets to Marketing ..................... 14
Section 2.03 Transfers Not Effected Prior to the Distribution .... 15
Section 2.04 Cooperation Regarding Assets ........................ 16
Section 2.05 No Representations or Warranties; Consents .......... 17
Section 2.06 Conveyancing and Assumption Instruments ............. 18
ARTICLE III - ASSUMPTION AND SATISFACTION OF LIABILITIES ................ 21
Section 3.01 Assumption and Satisfaction of Liabilities .......... 21
ARTICLE IV - THE DISTRIBUTION ........................................... 21
Section 4.01 Cooperation Prior to the Distribution ............... 21
Section 4.02 Getty Board Action; Conditions Precedent
to the Distribution ................................. 22
Section 4.03 The Distribution .................................... 24
ARTICLE V - INDEMNIFICATION ............................................. 24
Section 5.01 Indemnification by Getty ............................ 24
Section 5.02 Indemnification by Marketing ........................ 25
Section 5.03 Insurance Proceeds .................................. 25
Section 5.04 Procedure for Indemnification ....................... 26
Section 5.05 Remedies Cumulative ................................. 30
Section 5.06 Survival of Indemnities ............................. 30
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ARTICLE VI - CERTAIN ADDITIONAL MATTERS ................................ 30
Section 6.01 Marketing Board ................................... 30
Section 6.02 Resignations; Getty Board .......................... 31
Section 6.03 Charter and Bylaws ................................. 31
Section 6.04 Employee Stock Ownership Plan ...................... 31
Section 6.05 Certain Post-Distribution Transactions ............. 32
Section 6.06 Corporate Name ..................................... 33
ARTICLE VII - ACCESS TO INFORMATION AND SERVICES ....................... 33
Section 7.01 Provision of Corporate Records ..................... 33
Section 7.02 Access to Information .............................. 34
Section 7.03 Production of Witnesses ........................... 34
Section 7.04 Reimbursement ...................................... 35
Section 7.05 Retention of Records ............................... 35
Section 7.06 Confidentiality .................................... 35
Section 7.07 Privileged Matters ................................. 36
ARTICLE VIII - INSURANCE ............................................... 39
Section 8.01 Policies and Rights Included Within
the Marketing Assets ............................... 39
Section 8.02 Post-Distribution Date Claims ...................... 40
Section 8.03 Administration and Reserves ........................ 40
Section 8.04 Agreement for Waiver of Conflict and
Shared Defense ..................................... 42
Section 8.05 Surety Bonds and Letters of Credit ................. 42
ARTICLE IX - MISCELLANEOUS ............................................. 43
Section 9.01 Complete Agreement; Construction ..................... 43
Section 9.02 Expenses ............................................. 44
Section 9.03 Governing Law ........................................ 44
Section 9.04 Notices .............................................. 44
Section 9.05 Amendments ........................................... 45
Section 9.06 Successors and Assigns ............................... 45
Section 9.07 Termination ......................................... 45
Section 9.08 Subsidiaries ......................................... 45
Section 9.09 No Third-Party Beneficiaries ........................ 45
Section 9.10 Titles and Headings .................................. 45
Section 9.11 Exhibits and Schedules ............................... 46
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Section 9.12 Legal Enforceability................................... 46
Section 9.13 Consent of Parties..................................... 46
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SCHEDULE OF EXHIBITS
Exhibit A: Getty Pro Forma Balance Sheet
Exhibit B: Marketing Bylaws
Exhibit C: Marketing Restated Certificate of Incorporation
Exhibit D: Marketing Pro Forma Balance Sheet
Exhibit E: Master Lease between Marketing and Getty
Exhibit F: Office Space License between Marketing and Getty
Exhibit G: Services Agreement between Marketing and Getty
Exhibit H: Tax Sharing Agreement between Marketing and Getty
Exhibit I: Trademark License Agreement between Marketing and Getty
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LIST OF SCHEDULES
Schedule 1.01(a) Environmental Liabilities
Schedule 1.01(b) Upgrades
Schedule 1.01(c) Marketing Equipment
Schedule 1.01(d) Shared Policies
Schedule 2.06 Conveyance and Assumption Instruments
Schedule 4.01 Consents
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REORGANIZATION AND DISTRIBUTION AGREEMENT
This REORGANIZATION AND DISTRIBUTION AGREEMENT (this "Agreement") is
made this 31st day of January, 1997 between Getty Petroleum Corp., a Delaware
corporation ("Getty"), and Getty Petroleum Marketing Inc. a Maryland corporation
and a wholly-owned subsidiary of Getty ("Marketing").
RECITALS
WHEREAS, Getty, directly and through subsidiaries, (i) acquires,
develops, leases and disposes of real estate (the "Real Estate Business"),
purchases, stores, transports and sells home heating oil to residential and
commercial customers in Pennsylvania and Maryland (the "Aero Home Heating Oil
Business"), and (ii) purchases, stores, markets and distributes gasoline and
diesel fuel in 12 Northeastern and Middle Atlantic States and purchases, stores,
transports and sells home heating oil to residential and commercial customers in
the New York Mid-▇▇▇▇▇▇ Valley (which businesses described in this clause (ii)
are more specifically defined herein as the "Marketing Business");
WHEREAS, the Board of Directors of Getty has determined that it is in
the best interests of Getty to separate the Aero Home Heating Oil Business and
the Real Estate Business on the one hand, and the Marketing Business on the
other hand, and, in order to effect such separation, to transfer to Marketing
the stock of certain Getty subsidiaries principally engaged in the Marketing
Business and certain other assets relating principally to the Marketing Business
(collectively, the "Asset Transfers"), and thereafter to distribute all of the
outstanding shares of common stock, par value $.01 per share, of Marketing to
the holders of Getty common stock (the "Distribution");
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WHEREAS, Getty has effected (i) certain preliminary transfers and
corporate restructurings and (ii) the elimination of all intercompany and
intracompany receivables, payables and loans between entities that will be part
of Getty and its subsidiaries after the Distribution and entities that will be
part of Marketing and its subsidiaries after the Distribution, which
transactions are not contingent upon consummation of the Distribution and will
not be undone if the Distribution does not occur; and
WHEREAS, in connection with the Distribution, Getty and Marketing have
determined that it is necessary and desirable to set forth the principal
corporate transactions required to effect the Asset Transfers and the
Distribution, and to set forth the agreements that will govern certain matters
following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. As used in this Agreement, the following terms
shall have the following meanings:
Action: Any action, claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
Aero: Aero Oil Company, a Pennsylvania corporation.
Affiliate: With respect to any specified Person, means any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person. For purposes of this
definition, "control," when used with
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respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing. Notwithstanding
the foregoing, (i) the Affiliates of Getty shall not include Marketing, the
Marketing Subsidiaries or any other Person that would be an Affiliate of Getty
by reason of Getty's ownership of the capital stock of Marketing prior to the
Distribution or the fact that any officer or director of Marketing or any of
the Marketing Subsidiaries shall also serve as an officer or director of Getty
or any of the Retained Subsidiaries, and (ii) the Affiliates of Marketing shall
not include Getty, the Retained Subsidiaries or any other Person that would be
an Affiliate of Marketing by reason of Getty's ownership of the capital stock
of Marketing prior to the Distribution or the fact that any officer or director
of Marketing or any of the Marketing Subsidiaries shall also serve as an
officer or director of Getty or any of the Retained Subsidiaries.
Agent: The distribution agent appointed by Getty to distribute the
Marketing Common Stock pursuant to the Distribution.
Claims Administration: The processing of pre-Distribution claims made
under the Policies (including Self Insurance Programs), including the reporting
of claims to the insurance carrier, management and defense of claims and
providing for appropriate releases upon settlement of claims.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Conveyancing and Assumption Instruments: Collectively, the various
agreements, instruments and other documents to be entered into to effect the
Asset Transfers
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and the assumption of Liabilities in the manner contemplated by this Agreement
and the Related Agreements.
Distribution Date: The date determined by the Getty Board as the date
on which the Distribution shall be effected.
Distribution Record Date: The date established by the Getty Board as
the date for taking a record of the Holders of Getty Common Stock entitled to
participate in the Distribution.
Employee Stock Ownership Plan: The Employee Stock Ownership Plan of
Getty Petroleum Marketing Inc.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Financing Obligations: All (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, notes, debentures or similar instruments, (iii)
obligations under capitalized leases and deferred purchase arrangements, (iv)
reimbursement or other obligations relating to letters of credit or similar
arrangements, and (v) obligations to guarantee, directly or indirectly, any of
the foregoing types of obligations on behalf of others.
▇▇▇▇▇▇: ▇▇▇▇▇▇, Inc., a New York corporation.
Getty Board: The Board of Directors of Getty.
Getty Books and Records: The books and records (including
computerized records, ledgers, files and software) of Getty and the Retained
Subsidiaries and all books and records owned by Getty and its Subsidiaries which
relate to the Retained Business, are necessary to operate the Retained Business,
or are required by law to be retained by Getty, including, without limitation,
all such books and records relating to Retained Employees, all
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files relating to any Action pertaining to the Retained Liabilities, original
corporate minute books, stock ledgers and certificates and corporate seals, and
all licenses, leases, agreements and filings, relating to Getty, the Retained
Subsidiaries or the Retained Business (but not including the Marketing Books
and Records, provided that Getty shall have access to, and shall have the right
to obtain duplicate copies of, the Marketing Books and Records in accordance
with the provisions of Article VII).
Getty Common Stock: The common stock, par value $0.10 per share, of
Getty.
Getty Group: Getty and the Retained Subsidiaries, collectively.
[Getty Pro Forma Balance Sheet: The Pro Forma Consolidated Balance
Sheet for Getty, after giving effect to the Distribution, as of [ October 31,
1996] attached hereto as Exhibit A.
Holders: The holders of record of Getty Common Stock as of the
Distribution Record Date.
HSR Act: The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
Indemnified Environmental Liabilities: All Liabilities relating to
(i) the pre-closing environmental liabilities and obligations set forth on
Schedule 1.01(a) hereto, (ii) all future upgrades set forth on Schedule 1.01(b)
hereto necessary to cause USTs to conform to the 1998 federal standards for
USTs, and (iii) all environmental liabilities and obligations arising out of
discharges with respect to the properties containing USTs that have not been
upgraded to conform to the 1998 federal standards for USTs, that are discovered
prior to the date such USTs are upgraded to meet the 1998 federal standards.
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Insurance Administration: With respect to each Policy, the accounting
for premiums, retrospectively rated premiums, defense costs, adjuster's fees,
indemnity payments, deductibles and retentions as appropriate under the terms
and conditions of such Policy; and the reporting to excess insurance carriers of
any losses or claims in accordance with Policy provisions, and the distribution
of Insurance Proceeds as contemplated by this Agreement.
Insurance Proceeds: Those moneys (i) received by an insured from an
insurance carrier or (ii) paid by an insurance carrier on behalf of an insured,
in either case net of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention, cost or reserve paid or held by or for the
benefit of such insured.
Insured Claims: Those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectability or
retrospectively rated premium adjustments, but only to the extent that such
Liabilities are within applicable Policy limits, including aggregates.
IRS: The Internal Revenue Service.
▇▇▇▇▇: Kingston Oil Supply Corp., a New York corporation.
Liabilities: Any and all debts, liabilities and obligations, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including all costs and expenses
relating thereto, and including, without limitation, those debts, liabilities
and obligations arising under any law, rule, regulation, Action, threatened
Action, order or consent decree of any governmental
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entity or any award of any arbitrator of any kind, and those arising under any
contract, commitment or undertaking.
Marketing Adjustment Amount: The difference between the Marketing
Initial Target Net Working Capital and the Marketing Initial Net Working
Capital.
Marketing Balance Sheet: The Consolidated Balance Sheet for Marketing
as of [October 31, 1996] attached hereto as Exhibit D.
Marketing Board: The Board of Directors of Marketing.
Marketing Books and Records: The books and records (including
computerized records, ledgers, files and software) of Marketing and the
Marketing Subsidiaries and all books and records owned by Getty and its
Subsidiaries that relate to the Marketing Business or are necessary to operate
the Marketing Business including, without limitation, all such books and records
relating to Marketing Employees, all files relating to any Action being assumed
by Marketing as part of the Marketing Liabilities, original corporate minute
books, stock ledgers and certificates and corporate seals, and all licenses,
leases, agreements and filings relating to Marketing, the Marketing Subsidiaries
or the Marketing Business (but not including the Getty Books and Records,
provided that Marketing shall have access to, and have the right to obtain
duplicate copies of, the Getty Books and Records in accordance with the
provisions of Article VII).
Marketing Business: The businesses conducted by Marketing and the
Marketing Subsidiaries and the businesses conducted pursuant to or utilizing the
Marketing Assets, including without limitation (i) the purchase, storage,
distribution, marketing and sale of gasoline and diesel fuel and other related
products at wholesale and through terminals and
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a retail service station network and (ii) the purchase, storage, transportation
and sale of home heating oil to residential and commercial customers in the New
York Mid-▇▇▇▇▇▇ Valley.
Marketing Bylaws: The Bylaws of Marketing, substantially in the form
of Exhibit B, to be in effect at the Distribution Date.
Marketing Charter: The Articles of Incorporation of Marketing,
substantially in the form of Exhibit C, to be in effect at the Distribution
Date.
Marketing Common Stock: The common stock, par value $.01 per share,
of Marketing.
Marketing Employees: The persons employed by the Marketing Group on
the Distribution Date, all of whom (except those employed pursuant to union
contracts or to agreements providing for continued employment upon a change in
control of Getty) are at will employees.
Marketing Equipment: Certain equipment of Getty relating to the
storage, distribution and marketing of motor fuel, including the tanks (other
than the Retained USTs), racks, signs, motor fuel pumps, canopies and associated
equipment described on Schedule 1.01(c) hereto.
Marketing Group: Marketing and the Marketing Subsidiaries,
collectively.
Marketing Initial Cash Balance: $____________, which is the amount of
cash sufficient to cause Marketing Initial Net Working Capital to equal
Marketing Initial Target Net Working Capital.
Marketing Initial Net Working Capital: The excess of the book value
of the current assets of the Marketing Group over the book value of the current
liabilities of the
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Marketing Group as of the Distribution Date, as determined in accordance with
Section 2.06(b) hereof.
Marketing Initial Target Net Working Capital: $1,100,000.
Marketing Liabilities: (i) All of the Liabilities of the Marketing
Group under, or to be retained or assumed by Marketing or any of the Marketing
Subsidiaries pursuant to, this Agreement or any of the Related Agreements, (ii)
all Liabilities for payment of outstanding drafts of Getty attributable to the
Marketing Business existing as of the Distribution Date, and (iii) all other
Liabilities arising out of or in connection with any of the Marketing Assets or
the Marketing Business, determined on a basis consistent with the determination
of the Liabilities of Marketing included on the Marketing Balance Sheet (but
excluding (i) all Indemnified Environmental Liabilities and (ii) any Financing
Obligations of Getty or any of the Retained Subsidiaries, except to the extent
otherwise set forth above or reflected in the Marketing Balance Sheet).
Marketing Policies: All Policies, current or past, which are owned or
maintained by or on behalf of Getty or any of its Affiliates or predecessors,
that relate to the Marketing Business but do not relate to the Retained
Business, and which Policies are either maintained by the Marketing Group or
assignable to the Marketing Group.
Marketing Balance Sheet: The Consolidated Balance Sheet for Marketing
as of [January 31, 1996] attached hereto as Exhibit D-1.
Marketing Security Deposits: Any claim to or right in (i) monies
deposited with third parties to secure the performance of any obligation of
Getty, Marketing or any of their subsidiaries incurred in connection with the
Marketing Business or any Marketing Asset and (ii) monies deposited with Getty
by motor fuel station operators or dealers.
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Marketing Subsidiaries: The Transferred Subsidiaries and all
Subsidiaries of Marketing or the Transferred Subsidiaries at the time of the
Distribution.
Master Lease: The Master Lease between Marketing and Getty, which
agreement shall be entered into on or before the Distribution Date in
substantially the form of Exhibit E hereto.
NYSE: The New York Stock Exchange, Inc.
Office Space License: The Office Space License between Marketing and
Getty, which agreement shall be entered into on or prior to the Distribution
Date in substantially the form of Exhibit F hereto.
Person: Any individual, corporation, partnership, association, trust,
estate or other entity or organization, including any governmental entity or
authority.
Petro: PT Petro Corp., a New York corporation.
Policies: Insurance policies and insurance contracts of any kind
(each a "Policy") relating to the Marketing Business or the Retained Business as
conducted prior to the Distribution Date, including without limitation primary
and excess policies, comprehensive general liability policies, and automobile
and workers' compensation insurance policies, together with the rights, benefits
and privileges thereunder.
Privileged Information: All Information as to which Getty, Marketing
or any of their Subsidiaries are entitled to assert the protection of a
Privilege.
Privileges: All privileges that may be asserted under applicable law
including, without limitation, privileges arising under or relating to the
attorney-client relationship (including but not limited to the attorney-client
and work product privileges), the accountant-client privilege, and privileges
relating to internal evaluative processes.
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Related Agreements: All of the agreements, instruments,
understandings, assignments or other arrangements which are entered into in
connection with the transactions contemplated hereby and which are set forth in
a writing, including, without limitation, the Conveyancing and Assumption
Instruments, the Master Lease, the Tax Sharing Agreement, the Trademark License
Agreement, the Services Agreement and the Office Space License.
Retained Assets: The assets of Getty other than the Marketing Assets,
including without limitation (i) the capital stock of the Retained Subsidiaries,
(ii) assets relating to the Retained Business, determined on a basis consistent
with the determination of assets included on the Getty Pro Forma Balance Sheet,
(iii) all of the assets expressly allocated to Getty or any of the Retained
Subsidiaries under this Agreement or the Related Agreements, and (iv) any other
assets of Getty and its Affiliates relating to the Retained Business.
Retained Business: The businesses conducted by Getty and its
Affiliates other than the Marketing Business, including without limitation the
Aero Home Heating Oil Business and the Real Estate Business.
Retained Employees: The persons employed by the Getty Group on the
Distribution Date, all of whom (except those employed pursuant to union
contracts or to agreements providing for continued employment upon a change in
control of Getty) are at will employees.
Retained Liabilities: (i) All of the Liabilities arising out of or in
connection with the Retained Assets or the Retained Business [determined on a
basis consistent with the determination of the Liabilities of Getty included on
the Getty Pro Forma Consolidated Balance Sheet], (ii) all of the Liabilities of
Getty under, or to be retained or assumed by
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Getty or any of the Retained Subsidiaries pursuant to, this Agreement
or any of the Related Agreements, (iii) any Financing Obligations not
constituting Marketing Liabilities, (iv) any Liabilities arising out of the
settlement of lawsuits relating to the Distribution (other than those
Liabilities that constitute Marketing Liabilities), (v) all Liabilities for the
payment of outstanding drafts of Getty attributable to the Retained Business
existing as of the Distribution Date, (vi) all Indemnified Environmental
Liabilities, and (vii) all other Liabilities of Getty not constituting
Marketing Liabilities.
Retained Policies: All Policies, current or past, that are owned or
maintained by or on behalf of any member of the Getty Group (or any of its
predecessors) which relate to the Retained Business but do not relate to the
Marketing Business.
Retained Subsidiaries: All Subsidiaries of Getty, except Marketing
and the Marketing Subsidiaries.
Retained USTs: The USTs that, pursuant to Section 7.6 of the Master
Lease, are retained by Getty after the Distribution Date.
Securities Act: The Securities Act of 1933, as amended.
Services Agreement: The Services Agreement, which shall be entered
into between Getty and Marketing on or prior to the Distribution Date in
substantially the form attached hereto as Exhibit G.
Shared Policies: All Policies, current or past, that are owned or
maintained by or on behalf of Getty or any of its Subsidiaries or their
respective predecessors that relate to both the Retained Business and the
Marketing Business, and all other Policies not constituting Marketing Policies
or Retained Policies, as specified on Schedule 1.01(d) hereto.
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Subsidiary: With respect to any Person, (a) any corporation of which at
least a majority in interest of the outstanding voting stock (having by the
terms thereof voting power under ordinary circumstances to elect a majority of
the directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned or controlled by such Person, by one or
more Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries, or (b) any non-corporate entity in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof, has
at least majority ownership interest.
Tax Ruling: The private letter ruling issued by the Internal Revenue
Service on September 11, 1996, with respect to certain tax matters relating to
the Distribution.
Tax Sharing Agreement: The Tax Sharing Agreement between Marketing and
Getty, which agreement shall be entered into on or prior to the Distribution
Date in substantially the form of Exhibit H attached hereto.
Terminals: Getty Terminals Corp., a New York corporation.
Trademark License Agreement: The Trademark License Agreement between Getty
and Marketing, pursuant to which Getty will license certain intellectual
property rights to Marketing, which agreement shall be entered into on or prior
to the Distribution Date in substantially the form of Exhibit I attached
hereto.
Transferred Subsidiaries: Terminals, ▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇.
Transferred Subsidiary Stock: All of the issued and outstanding capital
stock of the Transferred Subsidiaries.
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UST: An underground storage tank including related piping, underground
pumps, wiring and monitoring devices.
Section 1.02 Terms Defined Elsewhere in Agreement.
Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
---- -------
Aero Home Heating Oil Business Recitals
Asset Transfers Recitals
Consents 4.01
Corporate Expenses 2.06
Current Assets 2.06
Current Liabilities 2.06
Distribution Recitals
Excess Revolving Credit Facilities Balance 2.06
Form 10 Registration Statement 4.01
Getty Recitals
Indemnifiable Loss 5.01
Indemnifying Party 5.03
Indemnitee 5.03
Information 7.02
Marketing Recitals
Marketing Assets 2.02
Marketing Indemnitees 5.01
Marketing Self Insurance Liabilities 8.06
Real Estate Business Recitals
Retained Self Insurance Liabilities 8.06
Third-Party Claim 5.04
Working Capital Accounts 2.06
Working Capital Balance 2.06
ARTICLE II
TRANSFER OF ASSETS
Section 2.01 Merger of Aero into Getty. Prior to the Distribution
Date, Getty shall take or cause to be taken all actions necessary to cause Aero
to merge into Getty.
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Section 2.02 Transfer of Assets to Marketing. Prior to the
Distribution Date, Getty shall take or cause to be taken all actions necessary
to cause the transfer, assignment, delivery and conveyance to Marketing or the
Marketing Subsidiaries of all of Getty's and its Subsidiaries' right, title and
interest in the Marketing Assets, and Marketing shall take or cause to be taken
all actions necessary to cause the assumption by Marketing or the Marketing
Subsidiaries of the Marketing Liabilities. The "Marketing Assets" shall consist
of the following assets:
(i) the Transferred Subsidiary Stock;
(ii) the Marketing Security Deposits;
(iii) the Marketing Books and Records;
(iv) the Marketing Equipment;
(v) all licenses and permits relating to the Marketing
Business, to the extent such licenses and permits are
transferable;
(vi) all of the other assets to be assigned to Marketing under
this Agreement or the Related Agreements; and
(vii) all other assets (including, without limitation, all
accounts receivable, deferred income taxes, prepaid
expenses, reserves and other current assets) relating
to the Marketing Business, determined on a basis
consistent with the determination of the assets
included on the Marketing Combined Balance Sheet.
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Section 2.03 Transfers Not Effected Prior to the Distribution. To the
extent that any transfers contemplated by this Article II shall not have been
fully effected on the Distribution Date, the parties shall cooperate to effect
such transfers as promptly as shall be practicable following the Distribution
Date. Nothing herein shall be deemed to require the transfer of any assets or
the assumption of any Liabilities that by their terms or operation of law
cannot be transferred or assumed; provided, however, that Getty and Marketing
and their respective Subsidiaries and Affiliates shall cooperate in seeking to
obtain any necessary consents or approvals for the transfer of all assets and
Liabilities contemplated to be transferred pursuant to this Article II. In the
event that any such transfer of assets or Liabilities has not been consummated
as of the Distribution Date, the party retaining such asset or Liability shall
thereafter hold such asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto) and retain such
Liability for the account of the party by whom such Liability is to be assumed
pursuant hereto, and take such other actions as may be reasonably required in
order to place the parties, insofar as reasonably possible, in the same
position as would have existed had such asset been transferred or such
Liability been assumed as contemplated hereby. As and when any such asset or
Liability becomes transferable, such transfer and assumption shall be effected
forthwith. The parties agree that, except as described in this section below,
as of the Distribution Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership over all of the assets, together with
all rights, powers and privileges incidental thereto, and shall be deemed to
have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incidental
thereto, which such party is entitled to acquire or required to assume pursuant
to the terms of this Agreement.
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Section 2.04 Cooperation Regarding Assets. In the case that at any
time after the Distribution Date, Marketing reasonably determines that any of
the Retained Assets are essential for the conduct of the Marketing Business, or
Getty reasonably determines that any of the Marketing Assets are essential for
the conduct of the Retained Business, and the nature of such assets makes it
impracticable for Marketing or Getty, as the case may be, to obtain substitute
assets or to make alternative arrangements on commercially reasonable terms to
conduct their respective businesses, and reasonable provisions for the use
thereof are not already included in the Related Agreements, then Marketing (with
respect to the Marketing Assets) and Getty (with respect to the Retained Assets)
shall cooperate to make such assets available to the other party on commercially
reasonable terms, as may be reasonably required for such party to maintain
normal business operations (provided that such assets shall be required to be
made available only until such time as the other party may reasonably obtain
substitute assets or make alternative arrangements on commercially reasonable
terms to permit it to maintain normal business operations).
Section 2.05 No Representations or Warranties; Consents. Each of the
parties hereto understands and agrees that no party hereto is, in this Agreement
or in any other agreement or document contemplated by this Agreement or
otherwise, representing or warranting in any way (i) as to the value or freedom
from encumbrance of, or any other matter concerning, any assets of such party or
(ii) as to the legal sufficiency to convey title to any asset transferred
pursuant to this Agreement or any Related Agreement, including, without
limitation, any Conveyancing or Assumption Instruments. It is also agreed and
understood that there are no warranties, express or implied, as to the
merchantability or fitness of any of the assets either transferred to or
retained by the parties, as the case may
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be, and all such assets shall be "as is, where is" and "with all
faults" (provided, however, that the absence of warranties shall have no effect
upon the allocation of Liabilities under this Agreement). Similarly, each
party hereto understands and agrees that no party hereto is, in this Agreement
or in any other agreement or document contemplated by this Agreement or
otherwise, representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any amendatory agreements
and the making of any filings or applications contemplated by this Agreement
will satisfy the provisions of any or all applicable laws or judgments or other
instruments or agreements relating to such assets. Notwithstanding the
foregoing, the parties shall use their good faith efforts to obtain all
consents and approvals, to enter into all reasonable amendatory agreements and
to make all filings and applications which may be reasonably required for the
consummation of the transactions contemplated by this Agreement, and shall take
all such further reasonable actions as shall be reasonably necessary to
preserve for each of the Marketing Group and the Getty Group, to the greatest
extent feasible, the economic and operational benefits of the allocation of
assets and Liabilities provided for in this Agreement. In case at any time
after the Distribution Date any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of
each party to this Agreement shall take all such necessary or desirable action.
Section 2.06 Conveyancing and Assumption Instruments. In connection
with the Asset Transfers and the assumptions of Liabilities contemplated by this
Agreement, the parties shall execute or cause to be executed by the appropriate
entities the Conveyancing and Assumption Instruments in such forms as the
parties shall reasonably agree, including the assignment of franchise rights and
the assignment and assumption of existing agreements as
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set forth in Schedule 2.06 hereto. The transfer of capital stock shall be
effected by means of delivery of stock certificates and executed stock powers
and notation on the stock record books of the corporation or other legal
entities involved and, to the extent required by applicable law, by notation on
public registries.
(a) Cash Allocation on the Distribution Date. To satisfy the
business needs of cash of Getty and Marketing, as of the close of business on
the Distribution Date, Marketing shall be allocated, out of all cash bank
balances and short-term investments of Getty and its Subsidiaries ("Cash"), an
amount of Cash equal to the Marketing Initial Cash Balance and Getty shall
retain all other Cash. To the extent practicable, the parties shall use their
reasonable best efforts to take all necessary action to cause the Cash balances
of Marketing and its Subsidiaries immediately prior to consummation of the
Distribution to be equal to the Marketing Initial Cash Balance. In the event
the actual Cash balances of Marketing and its Subsidiaries as of the
Distribution are less than the Marketing Initial Cash Balance, the amount of the
deficiency shall be recorded in the accounts of Marketing as of the Distribution
Date as a payable from Getty to Marketing (which payable will be paid as
promptly as practicable following the Distribution); and in the event the actual
Cash balances of Marketing and its Subsidiaries as of the Distribution Date
exceeds the Marketing Initial Cash Balance, the amount of such excess shall be
recorded in the accounts of Getty and Marketing as of the Distribution Date as a
payable from Marketing to Getty (which payable will be paid as promptly as
practicable following the time it is determinable).
(b) Post-Distribution Adjustment. Within [30] days of the
Distribution Date, Marketing shall prepare a combining balance sheet of the
Marketing Group showing the Marketing Initial Net Working Capital and the
Marketing Adjustment Amount. If the
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Marketing Adjustment Amount exceeds zero, Getty shall promptly pay to Marketing
such Marketing Adjustment Amount. If the Marketing Adjustment Amount is less
than zero, Marketing shall promptly pay to Getty such Marketing Adjustment
Amount.
(c) Cash Management After the Distribution Date. Marketing shall
separate from Getty, and establish and maintain a cash management system and
accounting records with respect to the Marketing Business effective as of 12:01
a.m. on the day following the Distribution Date; thereafter, (i) any payments by
Getty or its Retained Subsidiaries on behalf of Marketing or the Marketing
Subsidiaries in connection with the Marketing Business shall be recorded in the
accounts of the Marketing Group as a payable from the Marketing Group to the
Getty Group; (ii) any payments by Marketing or the Marketing Subsidiaries on
behalf of Getty or its Retained Subsidiaries in connection with the Retained
Business shall be recorded in the accounts of the Getty Group as a payable from
the Getty Group to the Marketing Group; (iii) any cash payments received by
Getty and the Retained Subsidiaries relating to the Marketing Business or the
Marketing Assets shall be recorded in the accounts of the Getty Group as a
payable from the Getty Group to the Marketing Group; (iv) any cash payments
received by Marketing or the Marketing Subsidiaries relating to the Retained
Business or the Retained Assets shall be recorded in the accounts of the
Marketing Group as a payable from the Marketing Group to the Getty Group; (v)
Marketing and Getty shall make adjustments for late deposits, checks returned
for not sufficient funds and other post-Distribution Date transactions as shall
be reasonable under the circumstances consistent with the purpose and intent of
this Agreement; and (vi) the net balance due to the Getty Group or the Marketing
Group, as the case may be, in respect of the aggregate amounts of clauses (i),
(ii), (iii), (iv) and (v) shall be paid by Marketing or
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Getty, as appropriate, as promptly as practicable. For purposes of this
Section 2.06(c), the parties contemplate that the Retained Business and the
Marketing Business, including but not limited to the administration of accounts
payable and accounts receivable, will be conducted in the normal course.
(d) Audit and Disputes. All transactions contemplated in this
Section 2.06 shall be subject to audit by the parties, and any dispute
thereunder shall be resolved by an independent firm of certified public accounts
mutually acceptable to Getty and Marketing, whose decision shall be final and
unappealable.
ARTICLE III
ASSUMPTION AND SATISFACTION OF LIABILITIES
Section 3.01 Assumption and Satisfaction of Liabilities. Except as
set forth in the Tax Sharing Agreement, the Master Lease or other Related
Agreements, effective as of and after the Distribution Date, (a) Marketing
shall, and/or shall cause the Marketing Subsidiaries to, assume, pay, perform,
and discharge in due course all of the Marketing Liabilities and (b) Getty
shall, and/or shall cause the Retained Subsidiaries to, pay, perform and
discharge in due course all of the Retained Liabilities.
ARTICLE IV
THE DISTRIBUTION
Section 4.01 Cooperation Prior to the Distribution.
(a) Getty and Marketing have prepared, and Marketing has filed with
the Commission, a Form 10 registration statement with respect to the
registration under the Exchange Act of the Marketing Common Stock (the "Form 10
Registration Statement").
(b) Getty and Marketing shall cooperate in preparing, filing with the
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Commission and causing to become effective any registration statements or
amendments thereto which are appropriate to reflect the establishment of, or
amendments to, the Employee Stock Ownership Plan and any employee benefit plans
and other plans contemplated by the Agreement.
(c) Getty and Marketing shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of states or other political
subdivisions of the United States in connection with the transactions
contemplated by this Agreement and the Related Agreements.
(d) Getty and Marketing shall prepare, and Marketing shall file and pursue,
an application to permit the listing of Marketing Common Stock on the NYSE.
(e) Getty and Marketing shall make any requisite filings under the HSR
Act.
(f) Getty and Marketing shall use all reasonable efforts to obtain any
third-party consents or approvals necessary or desirable in connection with the
transactions contemplated hereby, including without limitation the consents or
approvals set forth on Schedule 4.01 hereto ("Consents").
(g) Getty and Marketing will use all reasonable 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 transactions contemplated
under this Agreement.
Section 4.02. Getty Board Action; Conditions Precedent to the Distribution
The Getty Board shall, in its discretion, establish the Distribution Record Date
and the Distribution Date and any appropriate procedures, including establishing
the exchange ratio,
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in connection with the Distribution. In no event shall the Distribution occur
unless the following conditions shall have been satisfied:
(i) the transactions contemplated by Sections 2.01 and 2.02 shall have been
consummated in all material respects;
(ii) Getty shall have modified its existing stock option plans and/or
amended option grants thereunder to insure that the Distribution does not
adversely affect the current holders of options under those plans;
(iii) the Marketing Common Stock shall have been approved for listing on
the NYSE, subject to official notice of issuance;
(iv) the Marketing Board, comprised as contemplated by Section 6.01, shall
have been elected by Getty, as sole stockholder of Marketing, and the Marketing
Charter and Marketing Bylaws shall have been adopted and shall be in effect;
(v) the Marketing Board shall have established the Employee Stock Ownership
Plan;
(vi) the Form 10 Registration Statement shall have become effective under
the Exchange Act;
(vii) the Tax Ruling shall have been granted in form and substance
satisfactory to the Getty Board, in its sole discretion;
(viii) a favorable no-action letter shall have been obtained from the
Securities and Exchange Commission regarding issuance of Marketing Common Stock
and certain other matters;
(ix) any applicable waiting period under the HSR Act shall have expired (or
been earlier terminated);
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(x) Getty and Marketing shall have obtained all Consents and any other
consents, the failure of which to obtain would, in the determination of the
Getty Board, have a material adverse effect on Getty or Marketing; and
(xi) Getty and Marketing shall have entered into the Related Agreements;
provided, however, that (i) any such condition may be waived by the Getty Board
in its sole discretion upon the advice of counsel, and (ii) the satisfaction of
such conditions shall not create any obligation on the part of Getty or any
other party hereto to effect the Distribution or in any way limit Getty's power
of termination set forth in Section 9.07 or alter the consequences of any such
termination from those specified in such Section.
Section 4.03 The Distribution. On the Distribution Date, subject to the
conditions and rights of termination set forth in this Agreement, Getty shall
deliver to the Agent a share certificate representing all of the then
outstanding shares of Marketing Common Stock owned by Getty and shall instruct
the Agent to distribute, on or as soon as practicable following the Distribution
Date, such Marketing Common Stock to the Holders. Marketing agrees to provide
all share certificates that the Agent shall require in order to effect the
Distribution.
ARTICLE V
INDEMNIFICATION
Section 5.01 Indemnification by Getty. Except as otherwise expressly
set forth in a Related Agreement, Getty shall indemnify, defend and hold
harmless Marketing and each of the Marketing Subsidiaries, and each of their
respective directors, officers, employees, agents and Affiliates and each of the
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heirs, executors, successors and assigns of any of the foregoing (the "Marketing
Indemnitees") from and against the Retained Liabilities.
Section 5.02 Indemification by Marketing. Except as otherwise expressly
set forth in a Related Agreement, Marketing shall indemnify, defend and hold
harmless Getty and each of the Retained Subsidiaries, and each of their
directors, officers, employees, agents and Affiliates and each of the heirs,
executors, successors and assigns of any of the foregoing (the "Getty
Indemnitees") from and against the Marketing Liabilities.
Section 5.03. Insurance Proceeds. The amount that any party (an
"Indemnifying Party") is or may be required to pay to any other Person (an
"Indemnitee") pursuant to Section 5.01 or Section 5.02 shall be reduced
(including, without limitation, retroactively) by any Insurance Proceeds or
other amounts actually recovered by or on behalf of such Indemnitee in reduction
of the related Indemnifiable Loss. If an Indemnitee shall have received the
payment required by this Agreement from an Indemnifying Party in respect of an
Indemnifiable Loss and shall subsequently actually receive Insurance Proceeds,
or other amounts in respect of such Indemnifiable Loss as specified above, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the amount
of such Insurance Proceeds or other amounts actually received.
Section 5.04 Procedure for Indemnification.
(a) Except as may be set forth in a Related Agreement, if an Indemnitee
shall receive notice or otherwise learn of the assertion by a Person (including,
without limitation, any governmental entity) who is not a party to this
Agreement or to any of the Related Agreements of any claim or of the
commencement by any such Person of any Action (a "Third-Party Claim") with
respect to which an Indemnifying Party may be obligated to
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provide indemnification pursuant to this Agreement, such Indemnitee shall give
such Indemnifying Party written notice thereof promptly after becoming aware of
such Third-Party Claim; provided, that the failure of any Indemnitee to give
notice as required by this Section 5.04 shall not relieve the Indemnifying of
its obligations under this Article V, except to the extent that such
Indemnifying Party is prejudiced by such failure to give notice. Such notice
shall describe the Third-Party Claim in reasonable detail, and shall indicate
the amount (estimated if necessary) of the Indemnifiable Loss that has been or
may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third-Party Claim, provided that the Indemnifying Party
must confirm in writing that it agrees that Indemnitee is entitled to
indemnification hereunder in respect of such Third-Party Claim. Within 30 days
of the receipt of notice from an Indemnitee in accordance with Section 5.04(a)
(or sooner, if the nature of such Third-Party Claim so requires), the
Indemnifying Party shall notify the Indemnitee of its election whether to assume
responsibility for such Third-Party Claim (provided that if the Indemnifying
Party does not so notify the Indemnitee of its election within 30 days after
receipt of such notice from the Indemnitee, the Indemnifying Party shall be
deemed to have elected not to assume responsibility for such Third-Party Claim),
and such Indemnitee shall cooperate in the defense or settlement or compromise
of such Third-Party Claim. After notice from an Indemnifying Party to an
Indemnitee of its election to assume responsibility for a Third-Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article V for any legal or other expenses (except expenses approved in advance
by the Indemnifying
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Party) subsequently incurred by such Indemnitee in connection with the defense
thereof; provided, that if the defendants in any such claim include both the
Indemnifying Party and one or more Indemnitees and in such Indemnitees'
reasonable judgment a conflict of interest between such Indemnitees and such
Indemnifying Party exists in respect of such claim, such Indemnitees shall have
the right to employ separate counsel and in that event the reasonable fees and
expenses of such separate counsel (but not more than one separate counsel
reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for a Third-Party Claim (which election may be made only in the
event of a good faith dispute that a claim was inappropriately tendered under
Section 5.01 or 5.02, as the case may be) such Indemnitee may defend or (subject
to the following sentence) seek to compromise or settle such Third-Party Claim.
Notwithstanding the foregoing, an Indemnitee may not settle or compromise any
claim without prior written notice to Indemnifying Party, which shall have the
option within ten days following the receipt of such notice (i) to disapprove
the settlement and assume all past and future responsibility for the claim,
including reimbursing the Indemnitee for prior expenditures in connection with
the claim, or (ii) to disapprove the settlement and continue to refrain from
participation in the defense of the claim, in which event the Indemnifying Party
shall have no further right to contest the amount or reasonableness of the
settlement if the Indemnitee elects to proceed therewith, or (iii) to approve
the amount of the settlement, reserving the Indemnifying Party's right to
contest the Indemnitee's right to indemnity, or (iv) to approve and agree to pay
the settlement. In the event the Indemnifying Party makes no response to such
written notice from the Indemnitee, the Indemnifying Party shall be deemed to
have elected option (ii).
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(c) If an Indemnifying Party chooses to defend or to seek to compromise any
Third-Party Claim, the Indemnitee shall make available to such Indemnifying
Party any personnel and any books, records or other documents within its control
or which it otherwise has the ability to make available that are necessary or
appropriate for such defense.
(d) Notwithstanding anything else in this Section 5.04 to the contrary, an
Indemnifying Party shall not settle or compromise any Third-Party Claim unless
such settlement or compromise contemplates as an unconditional term thereof the
giving by such claimant or plaintiff to the Indemnitee of a written release from
all liability in respect of such Third-Party Claim (and provided further that
such settlement may not provide for any non-monetary relief by Indemnitee
without the written consent of Indemnitee). In the event the Indemnitee shall
notify the Indemnifying Party in writing that such Indemnitee declines to accept
any such settlement or compromise, such Indemnitee may continue to contest such
Third-Party Claim, free of any participation by such Indemnifying Party, at such
Indemnitee's sole expense. In such event, the obligation of such Indemnifying
Party to such Indemnitee with respect to such Third-Party Claim shall be equal
to (i) the costs and expenses of such Indemnitee prior to the date such
Indemnifying Party notifies such Indemnitee of the offer to settle or compromise
(to the extent such costs and expenses are otherwise indemnifiable hereunder)
plus (ii) the lesser of (A) the amount of any offer of settlement or compromise
which such Indemnitee declined to accept or (B) the actual out-of-pocket amount
such Indemnitee is obligated to pay subsequent to such date as a result of such
Indemnitee's continuing to pursue such Third-Party Claim.
(e) Any claim on account of an Indemnifiable Loss which does not result
from a Third-Party Claim shall be asserted by written notice given by the
Indemnitee to the
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applicable Indemnifying Party. Such Indemnifying Party shall
have a period of 15 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such
15-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 15-day period or rejects such claim in whole or in part,
such Indemnitee shall be free to pursue such remedies as may be available to
such party under applicable law or under this Agreement.
(f) In addition to any adjustments required pursuant to Section 5.03, if
the amount of any Indemnifiable Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third-Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third-Party Claim against any claimant or plaintiff asserting
such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim.
Section 5.05 Remedies Cumulative. The remedies provided in this Article V
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
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Section 5.06. Survival of Indemnities. The obligations of each of
Marketing and Getty under this Article V shall survive the sale or other
transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any Indemnifiable Loss of the other related to such
assets, businesses or Liabilities.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS
Section 6.01 Marketing Board. Marketing and Getty shall take all actions
which may be required to constitute, effective as of the Distribution Date, the
following persons as the directors of Marketing: (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ________ __________ (none of whom shall be officers, directors or
owners of more than 5% of the outstanding voting stock of Getty) and (ii) ▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
Section 6.02 Resignations; Getty Board.
(a) Marketing shall cause all of its directors and Marketing Employees to
resign, effective as of the Distribution Date, from all boards of directors or
similar governing bodies of Getty or any of its Retained Subsidiaries on which
they serve, and from all positions as officers or employees of Getty or any of
its Retained Subsidiaries in which they serve, except (i) ▇▇▇ ▇▇▇▇▇▇▇▇▇ shall
serve as a director, President and Chief Executive Officer of Getty and as a
director and Chief Executive Officer of Marketing and as an officer or director
of certain of the Marketing Subsidiaries and certain of the Retained
Subsidiaries, (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall serve as a director of Marketing and
certain of the Marketing Subsidiaries and as a director of Getty and certain of
the Retained Subsidiaries and (iii) as set forth in the Services Agreement.
Getty shall cause all of its directors and the Retained Employees to resign from
all boards of directors or similar governing bodies of Marketing or
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any of its subsidiaries on which they serve, and from all positions as officers
or employees of Marketing or any of its subsidiaries in which they serve, except
to the extent specified in the preceding sentence.
Section 6.03 Charter and Bylaws. On or prior to the Distribution
Date, Marketing shall adopt the Marketing Charter and the Marketing Bylaws,
and shall file the Marketing Charter with the Secretary of State of the
State of Maryland.
Section 6.04 Employee Stock Ownership Plan. On or prior to the
Distribution Date, Marketing shall approve and take all steps necessary to
establish the Employee Stock Ownership Plan.
Section 6.05 Certain Post-Distribution Transactions.
(a) Marketing. Marketing shall, and shall cause each of the Marketing
Subsidiaries to, comply with each representation and statement made, or to be
made, to any taxing authority in connection with any ruling obtained, or to be
obtained, by Getty Marketing acting together, from any such taxing authority
with respect to any transaction contemplated by this Agreement; neither
Marketing nor any of the Marketing Subsidiaries shall take or omit any action
inconsistent therewith, unless, [(i) required to do so by law, (ii) permitted to
do so by the prior written consent of Getty, or (iii)] pursuant to a favorable
supplemental ruling letter reasonably satisfactory to Getty that such act or
omission would not adversely affect the tax consequences of the Distribution to
Getty or the stockholders of Getty, as set forth in any ruling issued by any
taxing authority. Neither Marketing nor any of the Marketing Subsidiaries has a
present intention to take or omit any such action.
(b) Getty. Getty shall, and shall cause each of the Retained Subsidiaries
to, comply with each representation and statement made, or to be made, to any
taxing
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authority in connection with any ruling obtained, by Getty and Marketing
acting together, from any such taxing authority with respect to any transaction
contemplated by this Agreement; neither Getty nor any of the Retained
Subsidiaries shall take or omit any action inconsistent therewith, unless, [(i)
required to do so by law, (ii) permitted to do so by the prior written consent
of Marketing, or (iii)] pursuant to a favorable supplemental ruling letter
reasonably satisfactory to Marketing that such act or omission would not
adversely affect the tax consequences of the Distribution to Marketing or the
stockholders of Marketing, as set forth in any ruling issued by any taxing
authority. Neither Getty nor any of the Retained Subsidiaries has a present
intention to take or omit any such action.
Section 6.06 Corporate Name. Effective as of the Distribution Date, Getty
shall change its corporate name to "Getty Realty Corp.," either by statutory
merger or by action of the stockholders. All references to Getty herein shall
be references to such corporation both before and after such corporate name
change.
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.01 Provision of Corporate Records.
(a) Except as may otherwise be provided in a Related Agreement, Getty shall
arrange as soon as practicable following the Distribution Date, to the extent
not previously delivered in connection with the transactions contemplated in
Article II, for the transportation (at Marketing's cost) to Marketing of the
Marketing Books and Records in its possession, except to the extent such items
are already in the possession of Marketing or a Marketing Subsidiary. Such
Marketing Books and Records shall be the property of
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Marketing, but shall be available to Getty for review and duplication until
Getty shall notify Marketing in writing that such records are no longer of use
to Getty.
(b) Except as otherwise provided in a Related Agreement, Marketing shall
arrange as soon as practicable following the Distribution Date, to the extent
not previously delivered in connection with the transactions contemplated in
Article II, for the transportation (at Getty's cost) to Getty of the Getty Books
and Records in its possession, except to the extent such items are already in
the possession of Getty. The Getty Books and Records shall be the property of
Getty, but shall available to Marketing for review and duplication until
Marketing shall notify Getty in writing that such records are no longer of use
to Marketing.
Section 7.02 Access to Information. Except as otherwise provided in a
Related Agreement, from and after the Distribution Date, Getty shall afford to
Marketing and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to persons or firms possessing information) and duplicating rights
during normal business hours to all records, books, contracts, instruments,
computer data, software and systems and other data and information relating to
pre-Distribution operations (collectively, "Information") within Getty's
possession insofar as such access is reasonably required by Marketing for the
conduct of its business, subject to appropriate restrictions for classified or
Privileged Information. Similarly, except as otherwise provided in a Related
Agreement, Marketing shall afford to Getty and its authorized accountants,
counsel and other designated representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Marketing's possession, insofar as such is reasonably required by
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Getty for the conduct of its business, subject to appropriate restrictions for
classified or Privileged Information. Information may be requested under this
Article VII for the legitimate business purposes of either party, including
without limitation, audit, accounting, claims (including claims for
indemnification hereunder), litigation and tax purposes, as well as for purposes
of fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
Section 7.03 Production of Witnesses. At all times from and after the
Distribution Date, each of Marketing and Getty shall use reasonable efforts to
make available to the other, upon written request, its and its subsidiaries'
officers, directors, employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any Action.
Section 7.04 Reimbursement. Except to the extent otherwise contemplated
in any Related Agreement, a party providing Information or witness services to
the other party under this Article VII shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments of such amounts,
relating to supplies, disbursements and other out-of-pocket expenses (at cost)
and direct and indirect expenses of employees who are witnesses or otherwise
furnish assistance (at cost), as may be reasonably incurred in providing such
Information or witness services.
Section 7.05. Retention of Records. Except as otherwise required by law or
agreed to in a Related Agreement or otherwise in writing, each of Getty and
Marketing may destroy or otherwise dispose of any of the Information (including
information that is material Information and is not contained in other
Information retained by Getty or Marketing, as the case may be) at any time
after the tenth anniversary of this Agreement, provided that, prior
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to such destruction or disposal, (a) it shall provide no less than 90 or more
than 120 days prior written notice to the other, specifying in reasonable detail
the Information proposed to be destroyed or disposed of and (b) if a recipient
of such notice shall request in writing prior to the scheduled date for such
destruction or disposal that any of the Information proposed to be destroyed or
disposed of be delivered to such requesting party, the party proposing the
destruction or disposal shall promptly arrange for the delivery of such of the
Information as was requested at the expense of the party requesting such
Information.
Section 7.06 Confidentiality. Each of Getty and its Subsidiaries on the
one hand, and Marketing and its Subsidiaries on the other hand, shall hold, and
shall cause its consultants advisors to hold, in strict confidence, all
Information concerning the other in its possession or furnished by the other or
the other's representatives pursuant to this Agreement (except to the extent
that such Information has been (i) in the public domain through no fault of such
party or (ii) later lawfully acquired from other sources by such party), and
each party shall not release or disclose such Information to any other person,
except its auditors, attorneys, financial advisors, rating agencies, bankers and
other consultants and advisors, unless compelled to disclose by judicial or
administrative process or, as reasonably advised by its counsel, by other
requirements of law, or unless such Information is reasonably required to be
disclosed in connection with (x) any litigation with any third-parties or
litigation between the Getty Group and the Marketing Group, (y) any contractual
agreement to which the Getty Group or the Marketing Group are currently parties,
or (z) in exercise of either parties' rights hereunder.
Section 7.07 Privileged Matters. Getty and Marketing recognize that legal
and other professional services that have been and will be provided prior to the
Distribution
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Date have been and will be rendered for the benefit of both the Getty Group and
the Marketing Group and that both the Getty Group and the Marketing Group should
be deemed to be the client for the of asserting all Privileges. To allocate the
interests of each party in the Privileged Information, the parties agree as
follows:
(a) Getty shall be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Privileged Information which
relates solely to the Retained Business, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
Getty shall also be entitled, in perpetuity, to control the assertion or waiver
of all Privileges in connection with Privileged Information that relates solely
to the subject matter of any claims constituting Retained Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Getty, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
(b) Marketing shall be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Privileged Information which
relates solely to the Marketing Business, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
Marketing shall also be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Information which relates solely to
the subject matter of any claims constituting Marketing Liabilities, now pending
or which may be asserted in the future, in any lawsuits or other proceedings
initiated against or by Marketing, whether or not the Privileged Information is
in the possession of Marketing or under the control of Getty or Marketing.
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(c) Getty and Marketing agree that they shall have a shared Privilege, with
equal right to assert or waive, subject to the restrictions in this Section
7.07, with respect to all Privileges not allocated pursuant to the terms of
Sections 7.07(a) and (b). (All Privileges relating to any claims, proceedings,
litigation, disputes, or other matters which involve both Getty and Marketing in
respect of which Getty and Marketing retain any responsibility or liability
under this Agreement, shall be subject to a shared Privilege.)
(d) No party may waive any Privilege which could be asserted under any
applicable law, and in which the other party has a shared Privilege, without the
consent of the other party, except to the extent reasonably required in
connection with any litigation with third-parties or as provided in subsection
(e) below. Consent shall be in writing, or shall be deemed to be granted unless
written objection is made within twenty (20) days after notice upon the other
party requesting such consent.
(e) In the event of any litigation or dispute between a member of the Getty
Group and a member of the Marketing Group, either party may waive a Privilege in
which the other party has a shared Privilege, without obtaining the consent of
the other party, provided that such waiver of a shared Privilege shall be
effective only as to the use of Information with respect to the litigation or
dispute between the Getty Group and the Marketing Group, and shall not operate
as a waiver of the shared Privilege with respect to third-parties.
(f) If a dispute arises between the parties regarding whether a Privilege
should be waived to protect or advance the interest of either party, each party
agrees that it shall negotiate in good faith, shall endeavor to minimize any
prejudice to the rights of the other party, and shall not unreasonably withhold
consent to any request for waiver by the
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other party. Each party specifically agrees that it will not withhold consent
to waiver for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party of any subpoena, discovery or other request
which arguably calls for the production or disclosure of Information subject to
a shared Privilege or as to which the other party has the sole right hereunder
to assert a Privilege, or if any party obtains that any of its current or former
directors, officers, agents or employees have received any subpoena, discovery
or other requests which arguably calls for the production or disclosure of such
Privileged Information, such party shall promptly notify the other party of the
existence of the request and shall provide the other party a reasonable
opportunity to review the Information and to assert any rights it may have under
this Section 7.07 or otherwise to prevent the production or disclosure of such
Privileged Information.
(h) The transfer of the Marketing Books and Records and the Getty Books and
Records and other Information between Getty and its Subsidiaries and Marketing
and its Subsidiaries, is made in reliance on the agreement of Getty and
Marketing, as set forth in Sections 7.06 and 7.07, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges. The access to information being granted pursuant to
Sections 7.01 and 7.02 hereof, the agreement to provide witnesses and
individuals pursuant to Section 7.03 hereof and the transfer of Privileged
Information between Getty and its Subsidiaries and Marketing and its
Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any
Privilege that has been or may be asserted under this Agreement or otherwise.
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ARTICLE VIII
INSURANCE
Section 8.01. Policies and Rights Included Within the Marketing Assets.
Without limiting the generality of the definition of the Marketing Assets set
forth in Section 2.02 or the effect of Section 2.02, the Marketing Assets shall
include (a) any and all rights of an insured party under each of the Shared
Policies, specifically including rights of indemnity and the right to be
defended by or at the expense of the insurer, with respect to all injuries,
losses, liabilities, damages and expenses incurred or claimed to have been
incurred on or prior to the Distribution Date by any party in or in connection
with the conduct of the Marketing Business or, to the extent any claim is made
against Marketing or any of its subsidiaries, the Retained Business, and which
injuries, losses, liabilities, damages and expenses may arise out of insured or
insurable occurrences or events under one or more of the Shared Policies;
provided, however, that except as provided in Section 8.05 below, nothing in
this clause shall be deemed to constitute (or to reflect) the assignment of the
Shared Policies, or any of them, to Marketing and (b) the Marketing Policies.
Section 8.02 Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person, corporation, firm or entity shall assert a claim
against Marketing or any Marketing Subsidiary with respect to any injury, loss,
liability, damage or expense incurred or claimed to have been incurred prior to
the Distribution Date in or in connection with the conduct of the Marketing
Business or, to the extent any claim is made against Marketing or any of its
Subsidiaries or the Marketing Business, and which injury, loss, liability,
damage or expense may arise out of insured or insurable occurrences or events
under one or more of the Shared Policies, Getty shall at the time such claim is
asserted be
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deemed to assign, without need of further documentation, to Marketing any and
all rights of an insured party under the applicable Shared Policy with respect
to such asserted claim, specifically including rights of indemnity and the right
to be defended by or at the expense of the insurer; provided, however, that
except as provided in Section 8.05 below nothing in this sentence shall be
deemed to constitute (or to reflect) the assignment of the Shared Policies, or
any of them, to Marketing.
Section 8.03 Administration and Reserves
(a) Notwithstanding the provisions of Article III, but subject to any
contrary provisions of the Master Lease or the Services Agreement, from and
after the Distribution Date:
(i) Marketing shall be responsible for the (A) Insurance
Administration of the Marketing Policies, and (B) Claims Administration
with respect to the Marketing Liabilities; provided, that the
administration of the Marketing Policies by Marketing is in no way intended
to limit, inhibit, or preclude any right to insurance coverage for any
Insured Claim of a named insured under the Marketing Policies, including
but not limited to, Getty and any of its operations, Subsidiaries and
Affiliates;
(ii) Getty shall conduct (A) Insurance Administration of the Shared
Policies, and (B) Claims Administration with respect to the Retained
Liabilities; provided that the administration of the Shared Policies by
Getty is in no way intended to limit, inhibit, or preclude any right to
insurance coverage for any Insured Claim of a named insured under the
Shared Policies, including but not limited to, Marketing and any of its
operations, subsidiaries and Affiliates;
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(iii) Marketing shall be entitled to any reserves established by Getty
or any of its Subsidiaries, or the benefit of reserves held by any
insurance carrier, with respect to the Marketing Liabilities; and
(iv) Getty shall be entitled to any reserves established by Getty or
any of its Subsidiaries, or the benefit of reserves held by any insurance
carrier, with respect to the Retained Liabilities.
(b) Insurance Premiums. Getty shall have the right but not the obligation
to pay the premiums, to the extent that Marketing does not pay premiums with
respect to Marketing Liabilities (retrospectively-rated or otherwise), with
respect to Shared Policies and the Retained Policies, as required under the
terms and conditions of the respective Policies, whereupon Marketing shall
forthwith reimburse Getty for that portion of such premiums paid by Getty as are
attributable to the Marketing Liabilities. Unless otherwise agreed by the
parties hereto, Getty shall purchase (subject to a 50% reimbursement by
Marketing within 15 days of its receipt of invoice) continued coverage under its
director and officer liability insurance policy for a period no longer than 180
days following the Distribution Date for claims relating to periods prior to the
Distribution Date.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received with
respect to claims, costs and expenses under the Policies shall be paid to
Marketing with respect to the Marketing Liabilities and to Getty with respect to
the Retained Liabilities. Payment of the allocable portions of indemnity costs
of Insurance Proceeds resulting from the liability policies will be made to the
appropriate party upon receipt from the insurance carrier. In the event that
the aggregate limits on any Shared Policies are exceeded, the parties agree to
provide an equitable allocation of Insurance Proceeds received after the
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Distribution Date based upon their respective bona fide claims. The parties
agree to use their best efforts to cooperate with respect to insurance matters.
Section 8.04 Agreement for Waiver of Conflict and Shared
Defense. In the event that Insured Claims of both Marketing and Getty exist
relating to the same occurrence, Marketing and Getty agree to jointly defend
and to waive any conflict of interest necessary to the conduct of that joint
defense. Nothing in this paragraph shall be construed to limit or otherwise
alter in any way the indemnity obligations of the parties to this Agreement,
including those created by this Agreement, by operation of law or otherwise.
Section 8.05 Surety Bonds. Schedule 8.05 sets forth the
surety bonds posted by the Getty Group to secure obligations for state motor
fuel licenses (the "Surety Bonds"). Marketing shall use its reasonable best
efforts to replace such Surety Bonds with bonds posted by Marketing. Prior to
the replacement of such Surety Bonds the parties' respective obligations with
respect to such Surety Bonds shall be as follows: (i) the parties shall keep
such Surety Bonds in place after the Distribution to secure obligations
relating to periods preceding the Distribution Date for such time as may be
required by law, (ii) the obligations secured by the Surety Bonds will remain a
direct obligation of Getty; provided, however, that Marketing shall be
responsible for payment of all such obligations constituting Marketing
Liabilities (and shall reimburse Getty for any payment made directly by Getty
with respect to such Marketing Liabilities) and Getty shall be responsible for
all such obligations constituting Retained Liabilities (and shall reimburse
Marketing for any payments made directly by Marketing on behalf of such
Retained Liabilities), consistent with the allocation of Marketing Liabilities
and Retained Liabilities set forth herein; [(iii) Marketing shall execute a
guarantee pursuant to which Marketing will guarantee 100% of the obligations
secured by such Surety
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Bonds (subject to reimbursement by Getty for any payments made by Marketing
with respect to Retained Liabilities) and (iv)] Marketing will reimburse Getty
for Marketing's pro rata share of any premiums required to be paid to keep such
Surety Bonds outstanding.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Complete Agreement; Construction. This
Agreement, including the Schedules and Exhibits and the Related Agreements and
other agreements and documents referred to herein, shall constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter. Notwithstanding any other provisions in
this Agreement to the contrary, in the event and to the extent that there shall
be a conflict between any provision of this Agreement and any provision of a
Related Agreement, then the provision in the applicable Related Agreement shall
control.
Section 9.02 Expenses. Except as otherwise set forth in
this Agreement or any Related Agreement, all costs and expenses in connection
with the preparation, execution, delivery and implementation of this Agreement,
the Distribution and with the consummation of the transactions contemplated by
this Agreement shall be charged to the party for whose benefit the expenses are
incurred, with any expenses which cannot be allocated on such basis to be split
equally between the parties.
Section 9.03 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the principles of conflicts of laws thereof.
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Section 9.04 Notices. All notices and other
communications hereunder shall be in writing and shall be delivered by hand or
mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
To Marketing:
Getty Petroleum Marketing Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: __________________
To Getty:
Getty Realty Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: __________________
Section 9.05 Amendments. This Agreement may not be
modified or amended except by an agreement in writing signed by the parties.
Section 9.06 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
Section 9.07 Termination. This Agreement may be
terminated and the Distribution abandoned at any time prior to the Distribution
Date by and in the sole discretion of the Getty Board without the approval of
Marketing. In the event of such termination, no party shall have any liability
to any other party pursuant to this Agreement.
Section 9.08 Subsidiaries. Each of the parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations
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set forth herein to be performed by any Subsidiary of such party which is
contemplated to be a Subsidiary of such party on and after the Distribution
Date.
Section 9.09 No Third-Party Beneficiaries. Except for the
provisions of Article V relating to Indemnities, this Agreement is solely for
the benefit of the parties hereto and their respective Subsidiaries and
Affiliates and should not be deemed to confer upon third- parties any remedy,
claim, Liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 9.10 Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
Section 9.11 Exhibits and Schedules. The Exhibits and
Schedules shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
Section 9.12 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.
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9.13 Consent of Parties. The Parties hereby consent to
the jurisdiction of the New York Supreme Court, Nassau County, or the United
States District Court for the Eastern District of New York for all purposes.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
GETTY PETROLEUM CORP.
By:
----------------------------------
Title:
-------------------------------
GETTY PETROLEUM MARKETING INC.
By:
----------------------------------
Title:
-------------------------------
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SCHEDULE 1.01(a)
Environmental Liabilities
[To be provided]
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SCHEDULE 1.01(b)
Upgrades
[To be provided]
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SCHEDULE 1.01(c)
Marketing Equipment
[To be provided]
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SCHEDULE 1.01(d)
Shared Policies
[To be provided]
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SCHEDULE 2.06
Conveyancing and Assumption Instruments
[To be provided]
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SCHEDULE 4.01
Consents
[To be provided]
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