7
EXHIBIT 2
ASSET PURCHASE AGREEMENT
among
UNI-MARTS, INC.
AND
▇▇▇▇▇▇▇ SERVICE STATION, INC.,
GRACEDALE PROPERTIES, INC.,
BLAKESLEE CORNER, INC.,
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dated as of February 23, 2000
8
TABLE OF CONTENTS
ARTICLE I 1
PURCHASE AND SALE OF ASSETS 1
1.1. Purchase and Sale of Assets. 1
1.2. Excluded Assets. 3
1.3. Non-Assignable Assets. 4
1.4. Assumed Contracts. 4
1.5. Inventory Consideration. 4
ARTICLE II 6
PURCHASE PRICE 6
2.1. Purchase Price. 6
2.2. Adjustments to the Purchase Price. 7
2.3. Payment of Purchase Price. 7
2.4. Escrow Fund. 7
2.5. Allocation of Purchase Price; Tax Reporting. 8
ARTICLE III 8
NO ASSUMPTION OF THE SELLING PARTIES' LIABILITIES 8
3.1. No Assumption of Liabilities. 8
3.2. Proration of Certain Expenses. 10
3.3. Selling Parties Will Pay Its Other Liabilities. 10
3.4. Taxes, Fees and Expenses 10
ARTICLE IV 11
EMPLOYEES 11
4.1. Employees and Offers of Employment. 11
4.2. OSSI's Employee Benefit Plans. 11
4.3. Buyer Benefit Plans. 12
4.4. No Third Party Beneficiaries. 13
4.5. COBRA. 13
ARTICLE V 13
CLOSING 13
5.1. The Closing. 13
5.2. Action by the Selling Parties. 13
5.3. Action by the Buyer. 14
ARTICLE VI ▇▇
-▇-
▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ AND COVENANTS BY THE SELLING PARTIES 14
6.1. Organization and Qualification. 14
6.2. Capitalization. 14
6.3. Subsidiaries. 14
6.4. Authorization of Agreement. 15
6.5. Corporate Power. 15
6.6. No Violation of Law or Default by Reason of Execution and
Performance of this Agreement. 15
6.7. Approvals and Consents. 15
6.8. Financial Statements. 15
6.9. No Undisclosed Liabilities. 16
6.10. No Material Changes. 16
6.11. Tax Returns, Audits and Tax Payments. 17
6.12. Permits and Licenses. 18
6.13. Compliance with Laws and Regulations. 18
6.14. Environmental Matters. 18
6.15. Title to and Condition of Real Property. 22
6.16. Marketable Title to Personal Property; Condition of Personal
Property. 22
6.17. Inventory. 23
6.18. Material Contracts. 23
6.19. Litigation. 24
6.20. Insurance. 24
6.21. Banking Arrangements. 24
6.22. Absence of Creditors' Arrangements and Bankruptcies. 24
6.23. Employee Benefit Plans. 24
6.24. Labor Matters. 25
6.25. Interest in Competitors and Others. 26
6.26. Supplies and Vendors. 26
6.27. Conditions Affecting OSSI. 26
6.28. Minute Books, Stock Records, Officers, Directors. 26
6.29. Brokers. 26
6.30. Full Disclosure. 27
ARTICLE VII 27
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER 27
7.1. Organization. 27
7.2. Authorization. 27
ARTICLE VIII 27
CONDUCT OF BUSINESS AND AFFAIRS OF OSSI PENDING CLOSING 27
-ii-
10
8.1. Conduct of Business Pending Closing. 27
8.2. Negotiations with Other Parties. 29
8.3. Best Efforts. 29
8.4. Access to Information and Employees. 29
8.5. Update of Disclosure. 30
8.6. Casualty, Risk of Loss. 31
8.7. Remediation. 31
ARTICLE IX 31
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER 31
9.1. Performance of Agreements. 31
9.2. Representations and Warranties. 31
9.3. Authorization Documents. 32
9.4. Good Standing Certificate. 32
9.5. No Material Adverse Change. 32
9.6. No Adverse Legal Proceedings. 32
9.7. Opinion of the Selling Parties' Counsel. 32
9.8. HSR Act Matters. 32
9.9. Title Insurance. 33
9.10. Survey. 33
9.11. Deeds. 33
9.12. Possession. 33
9.13. Inspection Reports and Surveys. 33
9.14. Financing. 33
9.15. Consents. 33
9.16. Assets Transferred at Closing. 34
9.17. Board of Directors Approval. 34
9.18. Due Diligence. 34
9.19. PA Bulk Sales Notices. 34
9.20. Tax Lien Certificates. 35
9.21. Tax Clearance Certificates. 35
9.22. Non Competition Agreement. 35
ARTICLE X 35
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING PARTIES 35
10.1. Performance of Agreements. 35
10.2. Representations and Warranties of the Buyer. 35
ARTICLE XI 36
INDEMNIFICATION REMEDIES 36
-iii-
11
11.1. Indemnification by the Selling Parties. 36
11.2. Indemnification by the Buyer. 36
11.3. Determination of Losses. 36
11.4. Procedures Relating to Indemnification for Third Party Claims
under Sections 11.1 and 11.2. 37
11.5. Nature and Survival of Representations 38
ARTICLE XII 39
CERTAIN POST-CLOSING MATTERS 39
12.1. Availability of Records. 39
12.2. Collection of Accounts Receivable. 39
ARTICLE XIII 40
TERMINATION OF AGREEMENT 40
13.1. Termination. 40
13.2. Effect of Termination. 40
ARTICLE XIV 41
MISCELLANEOUS 41
14.1. Governing Law 41
14.2. Parties in Interest 41
14.3. No Third Party Beneficiaries. 41
14.4. Entire Agreement. 41
14.5. Notices 41
14.6. Headings and Titles 42
14.7. Modification 42
14.8. Counterparts 43
ARTICLE XV 43
INDEMNIFICATION REMEDIES 43
15.1. Indemnification by the Selling Parties. 43
15.2. Determination of Environmental Losses. 44
-iv-
12
SCHEDULES AND EXHIBITS REFERRED TO IN AGREEMENT
List of Schedules Title
--------------------- ------
Schedule 1.1(a) Store Premises
Schedule 1.1(b) Unimproved Premises
Schedule 1.1(d) Personal Property
Schedule 1.1(f) Lawsuits
Schedule 1.1(k) Assumed Prepaid Items
Schedule 1.1(n) Store Fund
Schedule 1.2 Excluded Motor Vehicles, Office and Store
Equipment and Prepaid Items
Schedule 1.4 Assumed Contracts
Schedule 1.5 Inventory
Schedule 2.3 Purchase Price Allocation Among the Selling
Parties
Schedule 2.5 Purchase Price Allocation Among the Assets
Schedule 3.2 Prepaid Operating Expenses
Schedule 4.1 Employee Accruals
Schedule 6.2 Majority Shareholders
Schedule 6.3 Subsidiaries
Schedule 6.7 Required Approvals and Consents
Schedule 6.9 Liabilities
Schedule 6.12 Permits and Licenses
Schedule 6.14 Environmental Matters
Schedule 6.15(a) Real Property Encumbrance
Schedule 6.15(b) Real Property Encroachment
Schedule 6.16 Personal Property Encumbrances
Schedule 6.18 Material Contracts
Schedule 6.19 Litigation
Schedule 6.20 Insurance
Schedule 6.21 Banking Arrangements
Schedule 6.23 Employee Benefit Plans
Schedule 6.24 Labor Matters
Schedule 6.25 Interest in Competitors and Others
Schedule 6.26 Suppliers and Vendors
Schedule 6.27 Conditions Affecting the Company
List of Exhibits Title
------------------ -----
A Indemnity Escrow Agreement
B ▇▇▇▇ of Sale
C Assignment and Assumption Agreement
D Non Competition Agreement
-v-
13
THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated February 23, 2000
is made among UNI-MARTS, INC., a Delaware corporation, or its assigns ("Buyer"),
▇▇▇▇▇▇▇ SERVICE STATION, INC., a Pennsylvania corporation ("OSSI"), GRACEDALE
PROPERTIES, INC., a Pennsylvania corporation ("Gracedale"), BLAKESLEE CORNER,
INC., a Pennsylvania corporation ("Blakeslee") (OSSI, Gracedale and Blakeslee
are collectively referred to herein as the "▇▇▇▇▇▇▇ Entities"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (collectively, the "Majority Shareholders") (the ▇▇▇▇▇▇▇
Entities and the Majority Shareholders are collectively referred to herein as
the "Selling Parties").
BACKGROUND
▇. ▇▇▇▇ is engaged in the business of operating gasoline
stations and related retail stores under the name "Orloski's Quik
Mart" ("OSSI's Business").
B. The Majority Shareholders, Gracedale and Blakeslee own
Certain parcels of real property and improvements which are used in
the operation of OSSI's Business.
C. The Majority Shareholders own a majority of the outstanding
Capital stock of OSSI and the children of the Majority Shareholders,
who will be parties to the Non-Competition Agreements described in
Section 9.22 hereof, own all of the outstanding capital stock of
Gracedale and Blakeslee.
D. The Selling Parties desire to sell to the Buyer, and Buyer
desires to purchase from the Selling Parties, all of the Assets
(defined in Section 1.1) pursuant to the terms of this Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
1.1. Purchase and Sale of Assets.
---------------------------
Upon the terms and subject to the conditions of this Agreement, at
the Closing (defined in Section 5.1) the Selling Parties will sell and the Buyer
will purchase, free and clear of all claims, liabilities, encumbrances, liens
and security interests of any kind whatsoever, OSSI's Business as a going
concern and all of the following assets of the Selling Parties as existing at
the Closing (collectively, the "Assets"):
(a) The parcels of real property used for the locations of
OSSI's Business as more particularly described on Schedule
1.1(a) and all buildings and improvements thereon, and all
fixtures, rights, easements, privileges, hereditaments belonging
or appertaining thereto (including condemnation awards) or any
additions thereto (collectively, the "Store Premises");
14
(b) The parcels of unimproved real property and all
fixtures, rights, easements, privileges, hereditaments belonging
or appertaining thereto (including condemnation awards) or any
additions thereto, as more particularly described on Schedule
1.1(b) (collectively, the "Unimproved Premises") and all
dealer locations where OSSI has an interest in the related
real property which are also described on Schedule 1.1(b)
(the "Dealer Locations") (the Store Premises, the Unimproved
Premises and the Dealer Locations are collectively referred to
herein as the "Real Property");
(c) All merchandise inventory, including petroleum product,
owned by OSSI and held for resale to customers and all parts and
supply inventory owned by OSSI, including bags and other
packaging items and janitorial supplies, in each case located
within or at any Store Premises as of the Inventory Date
(defined in Section 1.5(a)(i)) (the "Inventory");
(d) All of the furniture, fixtures, machinery, supplies,
equipment, parts and other items of personal property of OSSI,
wherever located, including but not limited to those items
listed on Schedule 1.1(d) (provided that the equipment and
machinery in the central corporate office and maintenance shed
to be transferred shall be that used in the normal course of
OSSI's Business), and all furniture, fixtures, machinery,
supplies, equipment, parts and other items of personal property,
wherever located, of the other ▇▇▇▇▇▇▇ Entities which are
described in Schedule 1.1(d) (collectively, the "Personal
Property"), and all service contracts and warranty and other
rights relating thereto;
(e) Subject to Sections 1.3 and 1.4, all rights and
interest of the Selling Parties in and to all Contracts (defined
in Section 6.18) listed on Schedule 1.4 which the Buyer has
agreed to assume;
(f) All claims and causes of action against others for
breach of contract, tort or otherwise and all lawsuits
(excluding Civil Action No. 5817-C of 1989, ▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ vs. The Commonwealth of Pennsylvania,
Department of Transportation) listed on Schedule 1.1(f);
(g) All governmental or other licenses, permits and
authorizations relating to the conduct of OSSI's Business or the
Assets which are listed on Schedule 6.12 (the "Permits");
(h) All books, records and accounts, correspondence,
production records, sales records, suppliers records, employment
records, drawings, plans, specifications and other records
relating to operating procedures, processes, inventions and know-
how of OSSI;
-2-
15
(i) All of OSSI's records relating to OSSI's Business;
(j) All of OSSI's right, title and interest in the service
▇▇▇▇ "Subs Now", and for a period of one (1) year after the
Closing Date (defined in Section 5.1), permission to the use of
the name "Orloski's" (provided that Buyer does not permit the
sale of certain magazines as agreed upon by Buyer and Selling
Parties in stores using the ▇▇▇▇ ▇▇▇▇▇▇▇'▇ during that one-year
period);
(k) certain prepaid cash items listed on Schedule 1.1(k);
(l) certain notes receivable due from dealers aggregating
approximately $270,000 and listed on Schedule 1.1(l);
(m) The goodwill associated with OSSI's Business; and
(n) The store fund (excluding lottery funds) as described
in Schedule 1.1(n) (the "Store Fund").
1.2. Excluded Assets.
---------------
The Selling Parties will not sell and the Buyer will not purchase
pursuant to Section 1.1 the following assets of the Selling Parties existing at
the Closing (the "Excluded Assets"):
(a) The Selling Parties' cash, excluding the Store Fund;
(b) OSSI's trade accounts receivable existing at the Closing
and amounts earned but not yet billed for goods sold and
delivered before the Closing Date (the "Accounts Receivable");
(c) OSSI's receivables due from shareholders;
(d) OSSI's corporate seal, minute books and other records
relating exclusively to OSSI's corporate organization and
capitalization;
(e) Certain motor vehicles used by ▇▇▇▇▇▇▇ family members
or otherwise not used in the day-to-day operation of the OSSI
Business and listed on Schedule 1.2;
(f) Certain prepaid cash items listed on Schedule 1.2;
(g) The Non-Assignable Assets (defined in Section 1.3); and
(h) Certain store and office equipment not owned by the
Selling Parties listed on Schedule 1.2.
-3-
16
1.3. Non-Assignable Assets.
---------------------
To the extent that any of the Assumed Contracts (defined in Section
1.4) or Permits is not capable of being transferred validly to the Buyer as
provided for in Section 1.1 without the consent or waiver of any Person (defined
in this Section 1.3) (including without limitation any governmental agency) or
if such a transfer or an attempt to effect such a transfer would constitute a
breach thereof or a violation of any law, nothing in this Agreement will
constitute a transfer or an attempted transfer of such Assumed Contract or
Permit (the "Non-Assignable Assets"). For purposes of this Agreement, "Person"
shall mean an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization. The Selling Parties will
use their best efforts to obtain such consent or waiver of each such Person
whose consent or waiver is so required. If the Closing occurs and the Buyer
shall have waived the conditions of Section 9.15 relating to such consent or
waiver, then to the extent that any such consent or waiver shall not have been
obtained, after the Closing the Selling Parties will (a) use reasonable efforts
to obtain such consent or waiver and upon obtaining it will assign and transfer
such Assumed Contract or Permit to the Buyer, (b) cooperate with the Buyer by
entering into any reasonable arrangement designed to provide to the Buyer the
benefit of such Assumed Contract or Permit (without Selling Parties' incurring
any new or additional obligations to any Person other than the Buyer) and (c) at
the request and expense of the Buyer, enforce for the Buyer's account any rights
of the Selling Parties under or arising from any such Assumed Contract or Permit
(including without limitation the right to terminate such Assumed Contract or
Permit). In any such case, among the parties hereto, (i) the Selling Parties
will have no liabilities or obligations hereunder other than as set forth in
this Agreement with respect to such Assumed Contract or Permit, (ii) the failure
to obtain any such consent or waiver with respect to such Assumed Contract or
Permit will not be a breach of any obligation of the Selling Parties hereunder,
(iii) the Buyer will indemnify the Selling Parties with respect to such Assumed
Contract or Permit as provided in Section 11.2 and (iv) the Buyer will have no
obligation with respect to any such Assumed Contract or Permit except to the
extent provided in the arrangements respecting it referred to in the fourth
sentence of this Section.
1.4. Assumed Contracts.
-----------------
There is set forth on Schedule 1.4 a list of Contracts (defined in
Section 6.18) to be assigned to and assumed by Buyer (the "Assumed Contracts").
Selling Parties shall (subject to Section 1.3 ) at Closing be obligated to
assign all of their respective right, title and interest under such Assumed
Contracts to Buyer. Subject to Section 1.3, Buyer shall assume and be fully
liable for the obligations accruing on or after Closing under the Assumed
Contracts and Selling Parties shall not be responsible for any such obligations.
1.5. Inventory Consideration.
-----------------------
(a) For the purpose of this Agreement, the "Inventory
Purchase Price" shall be the sum of:
-4-
17
(i) 70% of the sum of the Aggregate Retail Value (defined
in Section 1.5(b)(i)) of all Stores Premises for all
shelf merchandise Inventory owned by OSSI other than
petroleum product located within or at any of the
Store Premises as of the date which is within two (2)
days prior to the Closing Date, on which date a physical
inventory is conducted of the Inventory for each Store
Premises (the "Inventory Date"). The proceeds from the
sale of Inventory during the time the physical inventory
is being conducted shall be divided equally between
Buyer and Selling Parties. From the Inventory Date until
the Closing Date, Buyer shall be entitled to all
proceeds from the sale of Inventory; provided, however,
Selling Parties shall retain all liability and risk of
loss until the Closing has occurred; plus
(ii) OSSI's last net rack price on the day
prior to the Inventory Date, including all
applicable (as determined by Selling Parties'
and Buyer's counsel) federal, state and local
taxes plus freight costs, as of the Inventory
Date, for all petroleum product Inventory in
tanks at any of the Store Premises as of the
Inventory Date; plus
(iii) mutually agreed upon dollar amounts (i)
per Store Premises, (ii) for the office for
all of OSSI's office supplies located at
the Store Premises, and (iii) for OSSI's
office supplies located at the Office
Premises (as determined at the Inventory
Date by the Inventory Team) (as defined in
Section 1.5(b)) and supply Inventory owned
by OSSI located within or at any of the
Store Premises as of the Inventory Date;
plus
(iv) OSSI's net invoice cost for all cups and
ice bags located at the Store Premises.
The amount of Inventory transferred hereunder shall be determined in
accordance with Section 1.5(b) hereof.
(b) The inventory procedures used to determine the Aggregate
Retail Value for each Store Premises shall be as follows
(together with such additional procedures as shall be
mutually agreed upon):
(i) Buyer and Selling Parties, on the Inventory
Date, shall each have representatives
present at each Store Premises (the
"Inventory Counting Team")
-5-
18
to conduct a physical inventory of the shelf
merchandise Inventory (other than petroleum
product Inventory) for each Store Premises,
based upon categories presently used by
Buyer for physical inventories. The
"Aggregate Retail Value" of such inventory
for each Store Premises shall be the
product of the retail price charged by OSSI
and the count as determined by the physical
inventory. In conducting such physical
inventory of the shelf merchandise Inventory
(other than the petroleum product Inventory,
cups, ice bags and supplies as described
above), all Inventory at each Store Premises
shall be deemed merchantable (excluding
damaged goods) and within code unless the
date stamped by the manufacturer has expired
on or before the Inventory Date.
(ii) The quantities of petroleum product
Inventory to be purchased and sold hereunder
shall be determined by measuring the
quantities of petroleum product by an
electronic monitoring system or by a
dipstick coated with "water paste" at the
Inventory Date with respect to each Store
Premises. Such measuring shall be done
jointly by Selling Parties and Buyer, and
the quantity of water determined shall be
subtracted from each dipstick reading.
(iii) The quantities of parts and supply Inventory,
including cups, ice bags and supplies as described
above to be purchased and sold hereunder shall be
determined by an itemized physical inventory at each
Store Premises conducted by the Inventory Counting
Team. Such physical inventory shall be conducted for
such Store Premises on the Inventory Date. Such
inventory counting may be observed jointly
by Selling Parties and Buyer.
A list of supply Inventory categories is attached hereto as
Schedule .5.
ARTICLE II
PURCHASE PRICE
--------------
2.1. Purchase Price.
--------------
The purchase price for the Assets (the "Purchase Price") shall be
Thirty-eight Million Eight Hundred Eighty Thousand Dollars ($38,880,000), as
adjusted pursuant to Sections 2.2 and 3.2 hereof.
-6-
19
2.2. Adjustments to the Purchase Price.
---------------------------------
The Purchase Price shall be increased by (i) the Inventory Purchase
Price, (ii) the amount outstanding at Closing of the notes receivable listed on
Schedule 1.1(l), (iii) the amount of the Store Fund, and (iv) the amount of the
prepaid cash items listed on Schedule 1.1(k), decreased by Twenty-
five Thousand Dollars ($25,000), representing the previously
delivered nonrefundable deposit by Buyer (the "Deposit"), and
increased or decreased by the net prorations described in Section 3.2.
2.3. Payment of Purchase Price.
-------------------------
At the Closing the Buyer will pay (i) $1 million to the Escrow Agent
to be deposited into the Escrow Fund (defined in Section 2.4 hereof), and (ii)
to the Selling Parties the balance of the Purchase Price (other than the
Inventory Purchase Price) in cash by interbank wire transfer to such bank
account of the Selling Parties as the Selling Parties shall have designated to
Buyer at least two (2) business days before the Closing Date. Within ninety (90)
days after the Closing Date, Buyer shall pay the Selling Parties the Inventory
Purchase Price in the same manner as described above. The Purchase Price shall
be allocated to each of the Selling Parties as set forth in Schedule 2.3, which
will be mutually agreed upon by the parties and attached to this Agreement prior
to Closing.
2.4. Escrow Fund.
-----------
(a) At Closing, Buyer, on behalf of the Selling
Parties, shall pay One Million Dollars ($1,000,000) out of
the Purchase Price to a mutually acceptable escrow agent
("Escrow Agent"), to be held (the "Escrow Fund") and
disbursed by the Escrow Agent as described in this
Agreement and pursuant to a certain Indemnity Escrow
Agreement attached hereto as Exhibit A (the "Indemnity
Escrow Agreement"). For a period of one (1) year after the
Closing Date, Selling Parties' obligations to Buyer
pursuant to Sections 11.1 and 15.1 hereof shall be
satisfied first from the Escrow Fund to the extent that the
Escrow Fund has enough funds to pay Buyer's claims for
Losses and Environmental Losses (defined in Sections 11.1
and 15.2). After such one (1) year period or to the extent
the Escrow Fund has insufficient funds to cover Buyer's
Losses and Environmental Losses, Buyer may otherwise
proceed against the Selling Parties to enforce its rights
under Article XI hereof.
(b) Pursuant to the terms of the Escrow Agreement,
upon the first anniversary of the Closing Date, the Escrow
Agent shall release the Escrow Fund to the Selling Parties;
provided, however, that if there exist outstanding claims
by Buyer against Selling Parties pursuant to Sections 11.1
or 15.1 on such date, Escrow Agent shall only release such
portion of the Escrow Fund equal to the Escrow Fund less
the outstanding claims.
-7-
20
2.5. Allocation of Purchase Price; Tax Reporting.
-------------------------------------------
The Purchase Price will be allocated among the Assets pursuant to
Schedule 2.5, which will be mutually agreed upon by the parties and
attached to this Agreement prior to Closing. The Buyer will prepare for
filing all information returns and statements which may be required by Section
1060 of the Internal Revenue Code and any regulations issued thereunder (the
"Section 1060 Reports"). The Selling Parties will furnish to the Buyer all
information relating to the Selling Parties and the Assets needed by the Buyer
to prepare such Section 1060 Reports and the Selling Parties will execute and
file the Section 1060 Reports as requested by the Buyer. The parties hereto
will file all their respective tax returns and reports relating to the
transactions contemplated hereby on a basis consistent with the Section 1060
Reports.
ARTICLE III
NO ASSUMPTION OF THE SELLING PARTIES' LIABILITIES
-------------------------------------------------
3.1. No Assumption of Liabilities.
----------------------------
(a) Except as expressly provided herein, Buyer shall
not assume, nor in any way be liable or responsible for,
any claims, lawsuits, liabilities, obligations or debts of
Selling Parties, including without limitation:
(i) tort claims asserted against Selling
Parties, claims for breach of contract, or
any claims of any kind asserted by
customers, employees of Selling Parties or
any other party that are based on acts or
omissions occurring on or before the Closing
Date;
(ii) any accounts payable, employment or other
taxes, and any other obligation or liability
of Selling Parties to pay money whatsoever;
(iii) liabilities or obligations of the Selling
Parties, the existence of which constitutes
a breach of any of the Selling Parties'
representations, warranties or covenants
hereunder;
(iv) liabilities or obligations of the Selling
Parties to make distributions to its
shareholders as dividends in liquidation or
otherwise;
(v) liabilities or obligations of the Selling
Parties (other than the liabilities and
obligations referred to in Section 3.1(b))
under or in connection with any transaction
occurring after the Closing;
-8-
21
(vi) liabilities or obligations of the Selling
Parties incurred in connection with or
related to the transfer of the Assets and
OSSI's Business pursuant to this Agreement
or in connection with the Selling Parties'
liquidation and dissolution;
(vii) liabilities of the Selling Parties, if any,
for federal, state or other income taxes
arising out of, or resulting from, the
transactions contemplated by this Agreement;
and
(viii)liabilities of Selling Parties for any
severance or similar benefits to non-
Transferred Employees.
(b) Notwithstanding the provisions of the immediately
preceding Section 3.1(a), on the Closing Date, contingent
upon the consummation of the transactions contemplated
hereby, Buyer shall assume and thereafter in due course
fully satisfy the following liabilities of the Selling
Parties:
(i) those obligations arising under the Assumed
Contracts specified pursuant to Section 1.4
and assigned by Selling Parties to Buyer,
with respect to, and only with respect to,
performance that becomes due thereunder
subsequent to the Closing Date. Liabilities
and obligations under such Assumed Contracts
that have accrued, or the performance of
which is due, on or prior to the Closing
Date, and all liabilities and obligations
under all other Contracts not expressly
assumed by Buyer, shall remain the sole
responsibility of the Selling Parties;
(ii) the obligations and liabilities of the
Selling Parties to Amoco Oil Company
("Amoco") pursuant to an agreement with an
effective date of January 1, 1998 in
connection with Amoco's reimaging of certain
of the Store Premises, which obligation
shall be no greater than $2,340,000;
(iii) the obligations and liabilities of the Selling Parties
to Texaco pursuant to an agreement with an effective
date of July 1, 1998 in connection with
Texaco's reimaging of certain of the Store
Premises, which obligation shall be no
greater than $200,000; and
(iv) certain obligations and liabilities of the Selling
Parties to Amoco pursuant to an agreement dated
March 18, 1997 in connection with the purchase of
gasoline for the Store Premises, which obligation
shall be no greater than $3,000,000.
-9-
22
3.2. Proration of Certain Expenses.
-----------------------------
(a) Operating expenses such as telephone, utilities, rent and
wages for the month (or other billing or payment period) in which
the Closing occurs (the "Current Period"), which become payable
after the Closing will be paid by the Buyer when due, subject to
reimbursement or advance by the Selling Parties of the portion
thereof accrued or relating to a period prior to the Closing (the
"Selling Parties' Portion of Current Period Expenses").
The Buyer will pay the Selling Parties for the portion of any
operating expenses for the Current Period prepaid by the Selling
Parties for the portion thereof accruing or relating to a period on or
after the Closing Date which are listed on Schedule 3.2 (the "Buyer's
Portion of Current Period Expenses"). To the extent that the
Selling Parties' or the Buyer's Portion of Current Period Expenses
is ascertainable at the Closing Date, the Selling Parties and
the Buyer will pay such amount to the other at the Closing.
(b) Real property taxes and all other public or governmental
charges against the Real Property (including charges for sewer,
water, drainage or other services) shall be apportioned between
Selling Parties and Buyer as of the Closing Date and paid thereafter
by Buyer; provided, however, that any penalties or interest for late
payment or non-payment of such taxes or charges shall be paid solely
by Selling Parties.
3.3. Selling Parties Will Pay Its Other Liabilities.
----------------------------------------------
The Selling Parties will pay and satisfy when due, whether before or
after the Closing, all the Selling Parties' liabilities other than those
described in Section 3.1(b). Subject to completion of the Closing, the Selling
Parties will give the Buyer such evidence of such payment and satisfaction as
the Buyer may from time to time request.
3.4. Taxes, Fees and Expenses
------------------------
Buyer and the Selling Parties shall each pay one-half of all
transfer taxes payable in connection with the transfer and conveyances to be
made to the Buyer hereunder. Buyer shall pay all sales tax, if any, payable in
connection with the transfer and conveyances to be made to the Buyer hereunder.
Buyer shall also pay all required filing fees in connection with the filing of
the Notification and Report Form with the U.S. Department of Justice and Federal
Trade Commission pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"). After the Closing the Selling Parties will pay all their
other expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including all related accounting and legal fees. No such
taxes, fees or expenses shall be regarded for the purposes of this Agreement as
having arisen in the ordinary course of business.
-10-
23
ARTICLE IV
EMPLOYEES
---------
4.1. Employees and Offers of Employment.
----------------------------------
(a) On or prior to the Closing Date, Buyer may, but
shall not be obligated to, offer employment to any or all
employees of OSSI. Any such offers shall be at such salary
or wage and benefit levels and on such other terms and
conditions as Buyer shall in its sole discretion deem
appropriate. The employees who accept and commence
employment with Buyer are hereinafter collectively referred
to as the "Transferred Employees." The Selling Parties
shall not take any action that would impede, hinder,
interfere or otherwise compete with Buyer's effort to hire
any Transferred Employees. Buyer shall not assume
responsibility for any Transferred Employee until such
employee commences employment with Buyer. OSSI shall use
its best efforts to retain certain employees of OSSI who
are not Transferred Employees to assist Buyer in transition
matters for a period of thirty (30) days after the Closing
Date. Such OSSI employees shall not be employees or agents
of Buyer and shall not be entitled to any of Buyer's
employee benefits. OSSI shall pay all costs and expenses
associated with such employee's services except that Buyer
shall pay a portion of such costs proportional to the
services rendered by such employees on behalf of Buyer
during such 30-day period. OSSI shall not pay such
employees any severance or similar benefits until after the
expiration of such thirty (30) day period.
(b) Selling Parties shall be solely responsible to pay
and shall hold Buyer harmless from the compensated absence
balance of all Transferred Employees as of the Closing
Date, including the amounts of accrued vacation and
vacation pay (if any), sick-pay days, attendance bonuses
and other bonuses or amounts payable in lieu of benefits
applicable to the period prior to the Closing Date payable
to the Transferred Employees, which amounts shall be paid
by Selling Parties within 30 days after the Closing Date.
4.2. OSSI's Employee Benefit Plans.
-----------------------------
(a) OSSI shall retain all obligations and liabilities
under the Plans (as defined in Section 6.24) in respect of
each employee or former employee of OSSI (including any
beneficiary thereof). Except as expressly set forth
herein, OSSI shall retain all
-11-
24
liabilities and obligations in respect of benefits accrued
as of the Closing Date by the Transferred Employees under
the Plans, and neither Buyer nor any of its affiliates
shall have any liability with respect thereto. No assets
of any Plan shall be transferred to Buyer or any of its
affiliates or to any plan of Buyer or any of its
affiliates. Accrued benefits or account balances of
Transferred Employees under the Plans shall be fully vested
as of the Closing Date.
(b) With respect to the Transferred Employees
(including any beneficiary or dependent thereof), OSSI
shall retain (i) all liabilities and obligations arising
under any group life, accident, medical, dental or
disability plan or similar arrangement (whether or not
insured) to the extent that such liability or obligation
relates to contributions or premiums accrued (whether or
not payable), or to claims incurred (whether or not
reported), on or prior to the Closing Date, (ii) all
liabilities and obligations arising under any worker's
compensation arrangement to the extent such liability or
obligation relates to the period prior to the Closing Date,
including liability for any retroactive ▇▇▇▇▇▇▇'▇
compensation premiums attributable to such period and (iii)
all other liabilities and obligations arising under the
Plans to the extent any such liability or obligation
relates to the period prior to the Closing Date.
(c) With respect to any Transferred Employee
(including any beneficiary or dependent thereof) who enters
a hospital or is on short-term disability under any Plan on
or prior to the Closing Date and continues in a hospital or
on short-term disability after the Closing Date, OSSI shall
be responsible for claims and expenses incurred both before
and after the Closing Date in connection with such
Transferred Employee, to the extent that such claims and
expenses are covered by a Plan, until such time, (if any)
that such Transferred Employee resumes full-time employment
with Buyer or one of its affiliates and, in the case of any
beneficiary or dependent of a Transferred Employee, such
person's hospitalization has terminated. With respect to
any Plan covering medical expenses and other costs relating
to pregnancies and maternity leave of Transferred
Employees, OSSI shall be responsible for all claims
(whether or not reported) and expenses incurred during the
period prior to and ending on the Closing Date, and Buyer
or one of its affiliates shall be responsible for such
benefit arrangements covering such pregnancies and
maternity leave for the period subsequent to the Closing
Date.
4.3. Buyer Benefit Plans.
-------------------
Buyer or one of its affiliates will recognize all service of the
Transferred Employees with OSSI, only for purposes of eligibility to participate
in and vesting in those employee benefit plans, within the meaning of Section
3(3) of ERISA, in which the Transferred Employees are enrolled by Buyer or one
of its affiliates immediately after the Closing Date.
-12-
25
4.4. No Third Party Beneficiaries.
----------------------------
No provision of this Article IV shall create any third party
beneficiary or other rights in any employee or former employee (including any
beneficiary or dependent thereof) of OSSI in respect of continued employment (or
resumed employment) with either Buyer or any of its affiliates, and no provision
of this Article IV shall create any such rights in any such persons in respect
of any benefits that may be provided, directly or indirectly, under any Plan or
any plan or arrangement that may be established by Buyer or any of its
affiliates. No provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate after the Closing Date any such plans or
arrangements of Buyer or any of its affiliates.
4.5. COBRA.
-----
OSSI shall notify all of its employees in writing of their rights
with regard to any group health plan coverage, shall timely collect and remit
all premiums to the appropriate party, and perform all other actions mandated by
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
as codified in Section 4980B of the Code and that are required to be given,
collected, or otherwise performed as a result of the Closing under this
Agreement. Each of the Selling Parties and Buyer agree that Buyer is not
intended to be and is not a successor employer for COBRA purposes with respect
to any Plan subject to COBRA, and that no benefit plan or arrangement maintained
by Buyer shall be a successor plan for COBRA purposes to any Plan of OSSI.
ARTICLE V
CLOSING
-------
5.1. The Closing.
-----------
The Closing hereunder (the "Closing") will be held at such place as
the parties hereby mutually agree at 10:00 a.m. within ten (10) calendar days
(so long as the tenth day is a business day) after the complete satisfaction of
the conditions set forth in Articles IX and X hereof (the "Closing Date"). The
parties agree to use their mutual best efforts to cause the Closing to occur.
5.2. Action by the Selling Parties.
-----------------------------
At the Closing the Selling Parties will deliver to the Buyer such
instruments of transfer and related documents as shall in the opinion of counsel
for the Buyer be effective to vest in the Buyer good and marketable title to the
Assets, free and clear of all claims, liabilities, encumbrances, liens, charges
or security interests.
-13-
26
5.3. Action by the Buyer.
-------------------
At the Closing the Buyer will (i) pay the Purchase Price as provided
in Section 2.2 and (ii) deliver to the Selling Parties such instruments of
assumption to evidence the assumption by the Buyer pursuant to Section 3.1(b) of
the Assumed Contracts.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE SELLING PARTIES
----------------------------------------------------------------
The Selling Parties, jointly and severally, represent, warrant and
covenant as follows:
6.1. Organization and Qualification.
------------------------------
The ▇▇▇▇▇▇▇ Entities are each (i) corporations duly
incorporated, validly existing and in good standing under the laws of
the state of their respective jurisdictions, (ii) duly qualified as
foreign corporations and are in good standing in the jurisdictions
where the conduct of their respective businesses and the ownership of the
Assets makes such qualification necessary, and (iii) have the corporate power,
and hold all licenses, permits and authority necessary to carry on their
respective businesses as such businesses are now being conducted. The copies
(certified by each of the ▇▇▇▇▇▇▇ Entities' Secretaries) of the ▇▇▇▇▇▇▇
Entities' Certificate (or Articles) of Incorporation
and bylaws which have been delivered to the Buyer are true, correct and complete
as at the date of this Agreement.
6.2. Capitalization.
--------------
The authorized capital stock of OSSI consists of 10,000 shares of
common stock, $100.00 par value per share, of which 2,500 shares are issued and
outstanding. All of such shares are held of record and beneficially by the
shareholders listed on Schedule 6.2. None of such shares are held by OSSI in
its treasury. There are no outstanding options, warrants or other commitments
of any character obligating OSSI to issue any shares of its capital stock or
options or rights with respect thereto, and there are no existing or outstanding
securities of OSSI or any of its Subsidiaries (defined in Section 6.3) of any
kind convertible into or exchangeable for shares of OSSI's capital stock. There
are not outstanding any obligations or commitments of OSSI or any of its
Subsidiaries to purchase, redeem or otherwise acquire any outstanding shares of
OSSI.
6.3. Subsidiaries.
------------
The Selling Parties do not directly or indirectly control any
Person, except the subsidiaries listed on Schedule 6.3 (the "Subsidiaries").
-14-
27
6.4. Authorization of Agreement.
--------------------------
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by each of the
▇▇▇▇▇▇▇ Entities' respective boards of directors and shareholders. This
Agreement when executed and delivered by the Selling Parties shall be the legal,
valid and binding obligation of the Selling Parties, enforceable against each of
them in accordance with its terms.
6.5. Corporate Power.
---------------
The ▇▇▇▇▇▇▇ Entities have unrestricted corporate power to convey,
transfer, assign, and deliver to the Buyer all of the Assets owned by
them to be transferred hereunder.
6.6. No Violation of Law or Default by Reason of Execution and
---------------------------------------------------------
Performance of this Agreement.
-----------------------------
The execution, delivery and, subject to obtaining the approvals and
consents referred to in Section 6.7, the performance of this Agreement by the
Selling Parties will not violate any applicable law or constitute a default or
result in a right of acceleration, termination or similar right by any party (or
would, but for the passage of time or the giving of notice, constitute a default
or result in such a right of acceleration, termination or similar right) under
the respective Certificate (or Articles) of Incorporation or bylaws of the
▇▇▇▇▇▇▇ Entities or any Contract nor will it result in the cancellation,
modification, revocation or suspension of any of the Permits.
6.7. Approvals and Consents.
----------------------
Except as set forth in Schedule 6.7, no approval, consent or
authorization of, or declaration or filing with, any governmental or judicial
authority or any other Person is required in connection with the execution and
delivery of this Agreement by the Selling Parties or the performance by any of
them of their obligations hereunder or the consummation by them of the
transactions contemplated hereby.
6.8. Financial Statements.
--------------------
OSSI has delivered to the Buyer the audited financial statements of
OSSI as at December 31, 1999 for the three (3) years then ended, and shall
deliver, at the Selling Parties' expense, within forty-five (45) days after the
Closing Date, such statements for the interim period from January 1, 2000
through the Closing Date, reviewed by Parente ▇▇▇▇▇▇▇▇, PC, ▇▇▇▇'▇ independent
accountants. (The December 31, 1999 balance sheet is sometimes referred to
herein as the "December 31, 1999 Balance Sheet" and December 31, 1999 as the
"Balance Sheet Date.") All such financial statements are correct and complete,
fairly present the financial condition, assets and liabilities of OSSI as at
their respective dates and the results of its operations for such periods, and
have been prepared in accordance with generally accepted accounting principles
consistently applied and in accordance with OSSI's historical practices.
-15-
28
6.9. No Undisclosed Liabilities.
--------------------------
To the best knowledge of the Selling Parties, as at the Balance
Sheet Date, OSSI had no liability or obligation of any nature, whether due or to
become due, absolute, contingent or otherwise, including no liabilities for
taxes (including any interest or penalties relating thereto) in respect of or
measured by the income of OSSI for any period prior to the Balance Sheet Date,
except to the extent reflected or reserved against in the December 31, 1999
Balance Sheet or as set forth in Schedule 6.9 or otherwise disclosed by this
Agreement (provided that the Selling Parties shall be obligated to indemnify and
hold Buyer harmless from any liability if this statement is not correct,
regardless of knowledge). None of the Selling Parties knows or has any
reasonable ground to know of any basis for the assertion against OSSI as of the
date hereof of any such liability reflected or reserved against in the December
31, 1999 Balance Sheet except for (i) liabilities arising since the Balance
Sheet Date in the ordinary course of business and (ii) other liabilities
disclosed in this Agreement.
6.10. No Material Changes.
-------------------
Since the Balance Sheet Date there has not been:
(a) any change in the financial or other condition,
assets, liabilities or business of OSSI, except changes in
the ordinary course of business, none of which individually
or in the aggregate has had a Material Adverse Effect on
OSSI's Business;
(b) any damage, destruction or loss of property of the
Selling Parties (whether or not covered by insurance)
involving an amount in excess of $50,000 or otherwise
having a Material Adverse Effect on OSSI's Business;
(c) any increase in the compensation payable or to
become payable by OSSI to any of its officers, employees or
agents (including without limitation any bonus or other
contingent arrangement), excepting any increase necessarily
incurred by OSSI by reason of any law or regulation
affecting minimum wages payable to employees thereof and an
approximately 3% average annual increase in salary to its
employees;
(d) any strike, lockout, labor trouble, or any similar
event or condition of any character involving employees of
OSSI having a Material Adverse Effect on OSSI's Business;
(e) any failure by any of the Selling Parties to
maintain in full force and effect all policies of insurance
then in effect or any renewals or replacements thereof, or
to give any notice or present any claim under any such
policy when due;
-16-
29
(f) any sale or transfer by the Selling Parties of any
of the Assets other than in the ordinary course of its
business;
(g) any mortgage, pledge, hypothecation or other
encumbrance of any of the Assets;
(h) any agreement or arrangement to which any of the
Selling Parties is a party granting to any Person any
rights to purchase any of the Assets other than in the
ordinary course of business;
(i) any capital expenditure commitment by any of the
Selling Parties in excess of $10,000 in any one case or
$50,000 in the aggregate or other than for ordinary repairs
and maintenance of the Assets;
(j) any other material expenditure or any commitment
by OSSI other than in the ordinary course of its business;
(k) any other material transaction by OSSI other than
in the ordinary course of its business;
(l) any failure or refusal by OSSI to pay any of its
obligations, including obligations to vendors and Persons
rendering services to it; or (m) any failure or refusal by
the Selling Parties to make, in a timely manner, all
filings and declarations with and notices to governmental
authorities required to be made in connection with the
conduct of its business.
"Material Adverse Effect" means a material adverse effect on (i)
the business, financial condition, results of operation or
prospects of OSSI or (ii) the ability of OSSI to perform
its obligations under this Agreement. Any event or
circumstance shall be deemed to have a Material Adverse
Effect if such event or circumstance, individually or
together with all other events and circumstances which have
occurred or come into existence at or prior to the date of
determination of such Material Adverse Effect, has or is
reasonably likely to have a Material Adverse Effect,
excluding events or circumstances which are recognized as
part of the normal, historical or seasonal trends of the
business.
6.11. Tax Returns, Audits and Tax Payments.
------------------------------------
OSSI has filed with the appropriate governmental agencies, domestic
and foreign, all tax returns required to be filed by it. The Internal Revenue
Service has not audited the federal income tax returns of OSSI except for its
current audit of OSSI's 1997 return. No waiver of statutes of limitation for
federal income or other tax liability has been executed by OSSI. OSSI has
not filed any consent or agreement under Section 341(f) of the Internal Revenue
Code. There are no proposed assessments of federal income or other taxes
-17-
30
pending against OSSI. All such returns have been prepared in accordance with all
applicable laws and regulations. Any of the following due or payable by OSSI on
or before the Balance Sheet Date or relating to the operation of OSSI's Business
on or before such date has been paid or provided for in the December 31, 1999
Balance Sheet: contributions pursuant to unemployment insurance laws, sales and
use taxes and similar contributions and taxes arising under the law of any
jurisdiction. OSSI has withheld from each payment to each of its employees the
amount of all taxes (including but not limited to, federal income taxes, state
and municipal income taxes, Federal Insurance Contribution Act contributions and
all other employee taxes or contributions) legally required to be withheld
therefrom and has paid the same to the proper tax receiving or other officer,
except for such amounts withheld but not yet payable.
6.12. Permits and Licenses.
--------------------
There is set forth on Schedule 6.12 a complete list of the Permits,
issued or granted by any governmental authority, commercial enterprise or other
Person, held by OSSI. OSSI owns, possesses or has the legal right to use the
Permits, free and clear of all liens, pledges, claims or other encumbrances of
any nature whatsoever. OSSI is not in default under, nor has it received any
notice of any claim or default or any other claim or proceeding relating to, any
such Permit. To the best knowledge of the Selling Parties, the Permits
constitute all of the authorizations from federal, state, local or foreign
governments or governmental agencies, departments or bodies that are necessary
for the conduct of OSSI's Business and OSSI is, and at all times in the past has
been, in compliance with the Permits (provided that the Selling Parties shall be
obligated to indemnify and hold Buyer harmless from any liability relating to
the operation of the OSSI Business and the Assets prior to the Closing Date if
these statements are not correct, regardless of knowledge).
6.13. Compliance with Laws and Regulations.
------------------------------------
To the best knowledge of the Selling Parties, OSSI neither is nor
has been (by virtue of any action, omission, occurrence of any event, existence
of any circumstances or contract to which it is a party) in violation of any
law, ordinance, regulation, order or decree (including, without limitation, all
regulations of governmental agencies having jurisdiction or supervision over its
business or properties), provided that the Selling Parties shall be obligated to
indemnify and hold Buyer harmless from any liability relating to the operation
of the OSSI Business and the Assets prior to the Closing Date if this statement
is not correct, regardless of knowledge.
6.14. Environmental Matters.
---------------------
(a) Except as disclosed in Schedule 6.14:
(i) Neither the Selling Parties nor, to the best of the
Selling Parties' knowledge, any previous owner,
tenant, occupant, operator or user of any of the Real
Property or Former Real Property (as
-18-
31
defined below), has engaged in or permitted
any operation or activity at or upon, or any
use or occupancy of, any Real Property or
Former Real Property for the purpose of or
in any way involving the handling,
manufacture, treatment, storage, use,
generation, release, refining, reclaiming,
recycling, dumping or disposal of any
Hazardous Materials (as defined below), on,
under or in any Real Property or Former Real
Property. The Selling Parties have not
transported any Hazardous Materials to, from
or across any Real Property or Former Real
Property. No Hazardous Materials currently
are produced, incorporated in any
construction on, deposited, stored or
otherwise located on, under or in any Real
Property or Former Real Property. The
foregoing shall not be interpreted to apply
(a) to the handling, storage,
transportation, use or sale of petroleum
products to the extent such handling,
storage, transportation, use or sale is
consistent with the operation of those
petroleum dispensing locations that are
included as Assets, and (b) the handling,
storage, transportation, use or sale
of any substance in a manner that is
customarily incidental to the operation of
any retail store that is related to any such
petroleum dispensing locations.
(ii) No Hazardous Materials have migrated from
any Real Property or Former Real Property
to, upon, or beneath other properties, and,
to the best of Selling Parties' knowledge,
no Hazardous Materials have migrated or
threaten to migrate from other properties
to, upon, about or beneath any Real Property
or Former Real Property.
(iii) No underground improvement, including
without limitation treatment or storage tank
of water, gas or oil well, is, nor ever has
been, located on any Real Property or Former
Real Property, except for basements or as
disclosed in Schedule 6.14.
(iv) All Real Property and Former Real Property and all
activities conducted by the Selling Parties on the
Real Property, including without limitation the use,
maintenance and operation of the Real Property,
including the use, maintenance and operation of all
aboveground and underground storage tanks, currently
comply and, at all times have complied, with all
Environmental Requirements (as defined below).
-19-
32
(v) Neither the Selling Parties nor, to the
best of the Selling Parties' knowledge, any
current or prior owner or occupant of any
Real Property or Former Real Property, has
received any notice or other communication
concerning or has knowledge of (A) any
violation or alleged violation of
Environmental Requirements, whether or not
corrected or (B) any alleged liability for
Environmental Damages (as defined below) in
connection with any Real Property or Former
Real Property or material transported to,
from or across any Real Property or Former
Real Property. No writ, injunction, decree,
order or judgment relating to the foregoing
is outstanding. There is no lawsuit, claim,
proceeding, citation, directive, summons or
investigation pending or threatened against
any of the Selling Parties relating to any
alleged violation of or liability under any
applicable Environmental Requirements or
the presence of any Hazardous Materials.
(vi) To the best of the Selling Parties'
knowledge, there has been no spilling,
leaking, pumping, emitting, emptying,
discharging, escaping, leaching, dumping,
release, or disposing of any Hazardous
Materials into the environment, except as
set forth in Schedule 6.14.
(b) For the purposes of this Agreement:
(i) "Environmental Damages" means all claims, judgments,
damages, losses, penalties, fines, liabilities
(including strict liability), encumbrances, liens,
costs and expenses of defense of a claim (whether or
not such claim is ultimately defeated), good faith
settlements of judgment, and costs and expenses of
reporting, investigating, removing and/or remediating
Hazardous Materials, of whatever kind or nature,
contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including without
limitation reasonable attorneys' fees and disbursements
and consultants' fees, any of which arise out of or
relate to the existence of Hazardous Materials at,
upon, or beneath the Real Property or Former Real
Property, migrating or threatening to migrate from the
Real Property or Former Real Property or transported
to, from, or across any Real Property or Former Real
Property.
-20-
33
(ii) "Environment Requirements" means all
applicable statutes, regulations, rules,
ordinances, codes, policies, advisories,
actions, licenses, permits, orders,
approvals, plans, authorizations,
concessions, franchises and similar items of
all federal, state and local governmental
branches, agencies, departments,
commissions, boards, bureaus or
instrumentalities having jurisdiction and
all applicable judicial and administrative
and regulatory decrees, judgments and orders
and all covenants running with the land that
relate to the protection of health or the
environment, including without limitation
those that relate to the existence,
handling, manufacture, treatment, storage,
use, generation, release, discharge,
refining, recycling, reclaiming or disposal
of Hazardous Materials.
(iii) "Former Real Property" means any real
property in which the Selling Parties
heretofore held but no longer hold a fee,
leasehold or other legal, beneficial or
equitable interest.
(iv) "Hazardous Materials" means any substance:
(A) the presence of which requires
reporting, investigation, removal or
remediation under any Environmental
Requirement; (B) that is defined as a
"hazardous waste," "hazardous substance" or
"pollutant" or contaminate" under any
Environmental Requirement; (C) that is
toxic, explosive, corrosive, flammable,
ignitable, infectious, radioactive,
reactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated under
any Environmental Requirement; (D) the
presence of which on any Real Property or
Former Real Property causes a nuisance upon
any Real Property or Former Real Property or
to adjacent properties or poses a hazard to
the health or safety of persons on or about
any Real Property or Former Real Property;
(E) the presence of which on adjacent
properties constitutes a trespass by the
Selling Parties or the Company; (F) that
contains gasoline, diesel fuel or other
petroleum hydrocarbons; or (G) that contains
PCBs, asbestos or urea formaldehyde foam
insulation.
(c) The Selling Parties have complied in all material
respects with all Environmental Requirements.
(d) The Selling Parties have furnished the Buyer with
true and complete copies of all claims, complaints,
reports, assessments,
-21-
34
audits, investigations and other documents in the
possession of or obtainable by the Selling Parties made by,
on behalf of or against the Selling Parties during the past
five (5) years pertaining to Environmental Requirements or
Hazardous Materials.
(e) There is not and has not been, during any period
through and including the Closing Date any substance, the
presence of which on any Real Property or Former Real
Property causes or caused a nuisance upon any Real Property
or Former Real Property or to any other property or
properties.
(f) There is not and has not been during any period
through and including the Closing Date, any substance, the
presence of which on any other property or properties
constitutes or constituted a trespass by the Selling
Parties.
6.15. Title to and Condition of Real Property.
---------------------------------------
(a) Except for the mortgages and other liens listed
and described on Schedule 6.15(a), all of which will be
satisfied, terminated and/or discharged by Selling Parties
on or before the Closing Date, the Selling Parties have
good and marketable title to all of the Real Property
subject to no mortgage, security interest, pledge, lien,
lease, claim, encumbrance or charge, or restraint on
transfer whatsoever.
(b) The buildings, structures and equipment included
in the Real Property have no material defects, are in good
operating condition and repair and have been reasonably
maintained consistent with standards generally followed in
the industry (giving due account to the age and length of
use of same, and ordinary wear and tear), are suitable for
their present uses and, in the case of buildings and other
structures, such buildings and other structures (including
without limitation, the roofs thereof), are structurally
sound.
(c) The buildings and structures included in the Real
Property currently have access to water supply, storm and
sanitary sewer facilities, telephone, gas and electrical
connections, fire protection, drainage and other public
utilities, as is necessary for the conduct of OSSI's
Business.
6.16. Marketable Title to Personal Property; Condition of Personal
-----------------------------------------------------------
Property.
--------
(a) The Selling Parties have good and marketable title
to all of the Personal Property (except for Personal
Property which is described on Schedule 6.16 as being
leased), and, except as set forth in Schedule 6.16, the
Personal Property is subject to no mortgage, pledge, lien,
restriction, claim, encumbrance or security interest. All
encumbrances listed in Schedule 6.16 shall be
-22-
35
satisfied, discharged and removed prior to Closing unless
Buyer agrees otherwise.
(b) All of the Personal Property is in good operating
condition and repair, subject to normal wear and
maintenance, are useable in the regular and ordinary course
of business and conform to all applicable laws, ordinances,
codes, rules or regulations applicable to the Selling
Parties and relating to their construction, use and
operation.
6.17. Inventory.
---------
The Inventory of the Selling Parties reflected in the December 31,
1999 Balance Sheet consisted of, and such Inventory on hand as of the Closing
Date pursuant to Section 1.5 will consist of, items of a quality and quantity
usable or saleable in the ordinary course of its business and such Inventory has
been valued for purposes of such Balance Sheet, and will be valued on the OSSI's
books at the Closing Date, in accordance with generally accepted accounting
principles and pursuant to Section 1.5.
6.18. Material Contracts.
------------------
Except as set forth in Schedule 6.18, OSSI has no oral or written
(i) employment, severance or collective bargaining or similar agreement with or
relating to any employee or any consulting, brokerage or agency agreement not
terminable without cost on no more than 30 days' notice, (ii) agreement or
arrangement with any officer or director, (iii) agreement, plan or arrangement
providing for any bonus, stock option, stock ownership, stock purchase, stock
appreciation right, pension or retirement benefit, vacation, insurance or other
employee benefit, (iv) agreement, contract, indenture or other instrument
relating to the borrowing of money or the guarantee of any obligation for the
borrowing of money or to the grant of any mortgage, lien, security interest or
other encumbrance in or on any of its property, (v) lease of, or contract for
installment or other deferred purchase or sale of, any real or personal
property, (vi) license of any patent, copyright, trademark, trade secret or
other intellectual property, (vii) agreement or arrangement for the future
purchase or delivery of goods or rendition of service, including without
limitation any such agreement or arrangement with any customer of or supplier to
OSSI, (viii) franchise agreements, (ix) dealer agreements or (x) other contract,
arrangement or commitment which does or may have a material effect on the
business, assets, condition or prospects of OSSI. True copies of all written,
and complete summaries of all oral, agreements, arrangements, plans and other
things referred to in such Schedule (the "Contracts") have been made available
to the Buyer. OSSI is not a party to or bound by any presently existing
agreement or other arrangement which has had, or is anticipated by the Selling
Parties to have, a Material Adverse Effect on OSSI's Business. No event has
occurred which constitutes a default or may result in a right of acceleration,
termination or any similar right by any party (or would, but for the passage of
time or the giving of notice, constitute a default or result in such a right of
acceleration, termination or similar right) under any Contract.
-23-
36
6.19. Litigation.
----------
Except as set forth in Schedule 6.19, there are no
disputes, claims, actions, suits, litigation, proceedings,
arbitrations or investigations, either administrative or judicial,
pending, or to the best knowledge of the Selling Parties, threatened,
against or affecting the Selling Parties or any of the Assets to be
conveyed hereunder, whether or not fully covered by insurance, or
Selling Parties' ability to consummate the transactions hereunder, at
law or in equity or otherwise before any court or governmental agency
or body, domestic or foreign, or before any arbitrator of any kind.
6.20. Insurance.
---------
Set forth in Schedule 6.20 is a complete list of all insurance
policies (including without limitation fire, casualty, liability, worker's
compensation and product liability) currently held by the Selling Parties
related to the Assets or OSSI's Business and any claims pending by the Selling
Parties under each such policy. True copies of each insurance policy have been
made available to the Buyer. All such insurance policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with or without the
giving of notice or lapse of time or both, would constitute a default
thereunder. Such policies are in amounts which are adequate in relation to
OSSI's Business and the Assets and all premiums to date have been paid in full.
The Selling Parties has not been refused any insurance, nor has its coverage
been limited, by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the past five years. The Selling
Parties has not been advised by any of its insurance carriers of any disputes
between the Selling Parties and any insurance carrier regarding coverage,
claims, settlements or premiums.
6.21. Banking Arrangements.
--------------------
Set forth in Schedule 6.21 is listing by Store Premises of the name
and address of each bank in which OSSI has an account.
6.22. Absence of Creditors' Arrangements and Bankruptcies.
---------------------------------------------------
OSSI has no arrangement with creditors not made in the ordinary
course of its business, nor has any involuntary or voluntary petition in
bankruptcy been filed by or against OSSI.
6.23. Employee Benefit Plans.
----------------------
(a) OSSI maintains a defined benefit pension plan
(the "Plan"). Neither OSSI, nor any member of a controlled
group, group of commonly controlled trades or businesses or
affiliated service group (within the meaning of Sections
414(b), (c) or (m) of the Internal Revenue Code) which
includes OSSI (the "Affiliated Companies"), maintains or
has maintained, or has any obligation to
-24-
37
contribute to, any other employee pension benefit or
employee welfare benefit plan within the meaning of Section
3 of the Employee Retirement Income Security Act of 1974
("ERISA"). The contributions made or required (whether or
not waived) of OSSI for the most recently ended annual
accounting period of the Plan are as set forth on Schedule
6.23. All such contributions which currently are, or within
90 days of the date hereof will become, due from OSSI have
been paid, except as specifically noted on such Schedule.
(b) The Plan is in compliance with all requirements
of federal law. The Plan has no "Accumulated Funding
Deficiency" (within the meaning of Section 302(a)(2) of
ERISA and Section 412(a) of the Internal Revenue Code),
whether or not waived. No material liability to the
Pension Benefit Guaranty Corporation has been, or to the
knowledge of the Selling Parties is expected to be,
incurred with respect to the Plan by OSSI.
6.24. Labor Matters.
-------------
(a) OSSI is not a party to any contract or collective
bargaining agreement with any labor organization except as
disclosed on Schedule 6.24. To the best knowledge of
Selling Parties, no organization or representation question
is pending respecting the employees of OSSI, and no such
question has been raised within the preceding three (3)
years.
(b) All reasonably anticipated obligations of OSSI
whether arising by operation of law, contract, past custom
or otherwise, for unemployment compensation benefits,
pension benefits, salaries, wages, bonuses, sick leave,
vacation and other forms of compensation payable to the
officers, directors and other employees and independent
contractors of OSSI have been paid as of the Closing Date
or adequate accruals therefore have been made, other than
salary accrued in the ordinary course and vacation accrued
in the ordinary course.
(c) There is no controversy pending between OSSI and
any of its employees that individually or in the aggregate
materially affects or may materially affect the Assets,
OSSI or the business, financial condition or results of
operations of OSSI except for worker's compensation and
unemployment compensation claims, all of which are covered
by appropriate insurance coverage. Except as set forth on
Schedule 6.24, to the best knowledge of the Selling
Parties, there is no basis for any claim, grievance,
arbitration, negotiation, suit, action or charge of or by
any employee of OSSI and no complaint is pending against
OSSI before the National Labor Relations Board or any state
or local agency. OSSI has complied, in respect of its
employees, in all material respects with all applicable
statutes, regulations, orders and restrictions of the
United States of America, all states and other subdivisions
thereof, all foreign jurisdictions and all agencies and
instrumentalities of the foregoing.
-25-
38
(d) OSSI has furnished the Buyer with copies of all
claims, complaints, reports or other documents in such
entity's files concerning such entity or its employees made
by or against such entity during the past five years
pursuant to workers' compensation laws, Title VII of the
Civil Rights Act of 1964, the Occupational Safety and
Health Act of 1970, the National Labor Relations Act of
1935, or any other federal or state laws relating to the
employment of labor.
6.25. Interest in Competitors and Others.
----------------------------------
Except for ownership of less than 1% of the outstanding shares of
stock of any class of any corporation which are listed on the New York Stock
Exchange, the American Stock Exchange or quoted on NASDAQ or listed on Schedule
6.25, none of the Selling Parties has any interest in any Person which (i)
competes in any manner with OSSI or (ii) has an existing contractual
relationship with OSSI.
6.26. Supplies and Vendors.
--------------------
Except as set forth in Schedule 6.26, OSSI has satisfactory
relationships with its vendors, suppliers and contractors, and the Selling
Parties have no reason to believe there will be any adverse change in any of
such relationships, whether by reason of the acquisition of the Assets by the
Buyer or for any other reason.
6.27. Conditions Affecting OSSI.
-------------------------
OSSI has used its best efforts to keep available for Buyer the
services of the employees, agents, customers and suppliers of OSSI. The Selling
Parties do not have any reason to believe that any loss of any agent, customer
or supplier, or other advantageous arrangement, will result because of the
consummation of the transactions contemplated hereby.
6.28. Minute Books, Stock Records, Officers, Directors.
------------------------------------------------
Each of the ▇▇▇▇▇▇▇ Entities has made available for
inspection by the Buyer its minute books and capital stock records,
which contain all of such corporation's minutes and stock records.
Such minute books contain minutes of all meetings of the board of
directors, committees of the board of directors and the shareholders
of such corporation, and such minutes reflect all actions taken at
such meetings and contain references to all matters discussed at such
meetings that may have a Material Adverse Effect on the business of
the Selling Parties.
6.29. Brokers.
-------
The Selling Parties have not made any agreement or taken any action
which may cause anyone to become entitled to a commission as a result of the
transactions contemplated by this Agreement.
-26-
39
6.30. Full Disclosure.
---------------
No representation or warranty by the Selling Parties contained in
this Agreement and no statement contained in any certificate or other instrument
furnished or to be furnished to the Buyer pursuant hereto or in connection with
the transactions contemplated hereby, contains or at Closing will contain any
untrue statement of a material fact, or omits or will omit at Closing to
state a material fact necessary to provide the Buyer with proper
information as to the Selling Parties, the Assets and OSSI's Business.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
------------------------------------------------------
The Buyer represents, warrants and covenants as follows:
7.1. Organization.
------------
The Buyer is a corporation duly incorporated, validly existing and
presently subsisting under the laws of the State of Delaware and has the
corporate power to engage in the transactions contemplated by this Agreement.
7.2. Authorization.
-------------
The Buyer has taken all such corporate action as may be necessary or
appropriate to enable it to perform its obligations hereunder. This Agreement
when executed and delivered by the Buyer shall be the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
ARTICLE VIII
CONDUCT OF BUSINESS AND AFFAIRS OF OSSI PENDING CLOSING
-------------------------------------------------------
8.1. Conduct of Business Pending Closing.
-----------------------------------
From and after the date hereof to and including the Closing Date,
except as the Buyer may otherwise agree in writing, the Selling Parties will:
(a) Conduct OSSI's Business only in the ordinary
course, including maintaining inventory and parts levels,
consistent with past practices and policies, and not make
any material change in the nature or character of or the
manner of conducting the business conducted by OSSI.
(b) Use their best efforts to preserve OSSI's
organization intact, to keep available to the Buyer the
services of OSSI's present officers and employees and to
preserve for the benefit of the Buyer the goodwill of
OSSI's customers, suppliers and others having business
relations with it.
-27-
40
(c) Not adopt any amendment to OSSI's Certificate (or
Articles) of Incorporation or its bylaws.
(d) Not transfer any of the Assets other than in the
ordinary course of business or as permitted by Section
8.1(k).
(e) Not permit any of the Assets to be subject to any
mortgage, lien, security interest or other encumbrance,
except for
the encumbrances set forth in Schedules 6.15 and 6.16.
(f) Not enter into any new employee benefit or welfare plan or
arrangement nor make any material modification to any such existing
Plans or arrangements.
(g) Not increase the compensation payable or to become payable
to any officer or to any employee.
(h) Not purchase, lease or otherwise acquire or transfer,
lease or otherwise dispose of any item of Real Property or Personal
Property included in the Assets other than in the ordinary course of
business.
(i) Not make any change in any of the banking and safe deposit
arrangements referred to in Section 6.22.
(j) Not waive any substantial claim or right or terminate any
material contract or commitment (except as specifically provided for
herein).
(k) Not do or omit to do any act nor permit any event to occur
or condition to exist which will result in or cause a breach of any
Contract of OSSI, the breach of which would have a Material Adverse
Effect on OSSI's Business.
(l) Duly comply with all applicable laws to complete validly
the transactions provided for in this Agreement, including without
limitation any law which might, on failure of compliance
therewith, impose any liability on the Buyer for any debts
or obligations of OSSI.
(m) Not take any action that would result in the inaccuracy or
breach at Closing of any of the representations, warranties or
covenants of the Selling Parties set forth in Article VI.
(n) Not (i) enter into any commitment to do any act which
would violate any provision of this Article VIII or (ii) enter into
any contract or commitment, the performance of which may extend
beyond the Closing, except those made in the ordinary course of
business the terms of which are consistent with OSSI's past practice
and reasonable in light of current conditions.
-28-
41
8.2. Negotiations with Other Parties.
-------------------------------
The Selling Parties will not, and the Majority Shareholders will not
cause or permit the Selling Parties to, cause, permit or authorize any officer,
director, employee or agent to (a) solicit, initiate or encourage submission of
proposals or offers from any Persons relating to any acquisition or purchase of
all or a material amount of the Assets, or any equity interest in, or any
merger, consolidation or business combination with OSSI, (b) participate in any
discussions regarding the foregoing or (c) except as may be required by law
furnish to any Person other than the Buyer or its representatives any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage any effort or attempt by any other
Person to do any of the foregoing. OSSI will promptly notify the Buyer if it
shall have knowledge of any such proposal or offer, or any expression of
interest in making any such proposal or offer. In determining whether the
conduct sought to be prohibited by this Section 8.2 is required by law, OSSI
shall have been advised by counsel reasonably satisfactory to the Buyer, that
the failure to take such action would, in the opinion of such counsel result in
a breach of fiduciary duty by any such director, officer or agent owed to OSSI
or the shareholders of OSSI. In that event, OSSI may take such actions as it is
advised by such counsel are necessary to avoid such breach of fiduciary duty.
8.3. Best Efforts.
------------
Subject to the terms and conditions of this Agreement, Selling
Parties will use their best efforts to take, or cause to be taken, all actions
to be taken by Selling Parties that are necessary, proper or desirable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using its best efforts to
obtain promptly all necessary waivers, consents, licenses and approvals and
effecting all necessary registrations and filings.
8.4. Access to Information and Employees.
-----------------------------------
Prior to the Closing, OSSI shall give the Buyer and its authorized
representatives reasonable access to OSSI's employees and related employee files
in order to allow the Buyer's representatives to interview such employees for
the purposes of introducing them to the Buyer, offering them employment with the
Buyer and facilitating their transition from OSSI to the Buyer.
Prior to the Closing Date, Buyer may make, or cause to be made, such
investigation of the Assets and OSSI's financial and legal condition as Buyer
deems necessary or advisable to familiarize itself with the Assets and/or
matters relating to OSSI's Business, history or operation. The Selling Parties
shall permit Buyer and its authorized representatives (including legal counsel
and accountants) to have full access to the Assets and the Selling Parties'
books and records upon not less than twenty-four (24) hours advance notice,
provided such access will not unreasonably disrupt OSSI's Business. The Selling
Parties will furnish, or cause to be furnished, to Buyer such financial and
operating data and other information and copies of documents with respect to
OSSI's Business and the Assets, as Buyer shall from time to time request to
enable the Buyer and its representatives to investigate the affairs of the
▇▇▇▇▇▇ Parties and the Assets and the accuracy of the representations and
warranties made in this Agreement.
-29-
42
8.5. Update of Disclosure.
--------------------
(a) Prior to Closing, the Selling Parties shall promptly
notify Buyer in writing of: (i) the discovery by any of the Selling
Parties of any event, condition, fact or circumstance that occurred
or existed on or prior to the date of this Agreement and that caused
or constitutes a material inaccuracy in any representation or
warranty made by the Selling Parties in this Agreement; (ii) any
event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that would cause or constitute
a material inaccuracy in any representation or warranty made by
the Selling Parties in this Agreement if (A) such representation or
warranty had been made as of the time of the occurrence, existence
or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or
existed on or prior to the date of this Agreement; (iii) any event,
condition, fact or circumstance hereafter arising which, if existing
or occurring at the date of this Agreement, would have been required
to be set forth or described in the Selling Parties' Schedules; (iv)
any material breach of any covenant or obligation of the Selling
Parties; and (v) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set
forth in Article IX impossible or unlikely or that has had or could
reasonably be expected to have a Material Adverse Effect on OSSI's
Business. No notification given to Buyer pursuant to this Section
8.5(a) shall limit or otherwise affect (i) any representations,
warranties, covenants or obligations of the Selling Parties
contained in this Agreement or (ii) any of Buyer's rights
with respect to any inaccuracy or breach of such representations,
warranties, covenants or obligations of the Selling Parties
contained in this Agreement.
(b) If any event, condition, fact or circumstance that
is required to be disclosed pursuant to Section 8.5(a)
requires any change in the Selling Parties' Schedules, or
if any such event, condition, fact or circumstance would
require such a change assuming the Selling Parties'
Schedule was dated as of the date of the occurrence,
existence or discovery of such event, condition, fact or
circumstance, then the Selling Parties shall promptly
deliver to Buyer an update to the Selling Parties'
Schedules specifying such change. No such update shall be
deemed to supplement or amend the Selling Parties'
Schedules for the purpose of (i) determining the accuracy
of any of the representations and warranties made by the
Selling Parties in this Agreement, or (ii) determining
whether any of the conditions set forth in Article IX has
be satisfied, nor shall such update affect any of Buyer's
rights with respect to any inaccuracy or breach of such
representations, warranties, covenants or obligations of
Selling Parties contained in this Agreement.
-30-
43
8.6. Casualty, Risk of Loss.
----------------------
The Selling Parties shall bear the risk of all loss or damage to the
Assets from all causes, until the Closing. If at any time prior to the Closing
any portion of the Assets is damaged or destroyed as a result of fire, other
casualty or for any reason whatsoever, or in the event condemnation or eminent
domain proceedings (or private purchase in lieu thereof) shall be commenced by
any public or quasi-public authority having jurisdiction against all or any part
of the Assets, the Selling Parties shall immediately give notice thereof to
Buyer. Buyer shall have the right, in its sole and absolute discretion, within
ten (10) days of receipt of such notice, to (1) elect not to proceed with the
Closing and terminate this Agreement or (2) proceed to Closing and consummate
the transactions contemplated hereby and receive any and all insurance proceeds
received or receivable by the Selling Parties on account of any such casualty.
8.7. Remediation.
-----------
The Selling Parties, at their expense, shall remediate the
contamination of the well at Bear Creek by either drilling a new well
or installing a filtration system acceptable to Buyer, which will be
completed prior to the Closing Date.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
------------------------------------------------
The obligations of the Buyer to complete the transactions
contemplated by this Agreement are subject to the fulfillment prior to or at
Closing of the following conditions (any of which conditions may, at its option,
be waived by the Buyer):
9.1. Performance of Agreements.
-------------------------
The Selling Parties shall have performed all agreements and complied
with all conditions required by this Agreement to be performed or complied with
by them at or prior to the Closing, and the Buyer shall have received a
certificate dated as of the Closing Date to that effect signed by the respective
Presidents of the ▇▇▇▇▇▇▇ Entities and by the Majority Shareholders.
9.2. Representations and Warranties.
------------------------------
The representations and warranties of the Selling Parties contained
in this Agreement shall be true and correct at and as of the date of this
Agreement and shall be true and correct at and as of the Closing
Date, and the Buyer shall have received a certificate dated as of the
Closing Date to that effect signed by the respective Presidents of
the ▇▇▇▇▇▇▇ Entities and by the Majority Shareholders.
-31-
44
9.3. Authorization Documents.
-----------------------
Buyer shall have received copies of the resolutions of each of the
▇▇▇▇▇▇▇ Entities' respective boards of directors and shareholders authorizing
this Agreement and the transactions contemplated hereby, and Buyer shall have
received a certificate dated as of the Closing Date to that effect signed by the
respective Secretaries of the ▇▇▇▇▇▇▇ Entities.
9.4. Good Standing Certificate.
-------------------------
Buyer shall have received copies of the respective Articles of
Incorporation of each of the ▇▇▇▇▇▇▇ Entities certified by the Secretary of the
State of Pennsylvania and Good Standing Certificates of each of the ▇▇▇▇▇▇▇
Entities dated within ten (10) days of the Closing Date issued by the Secretary
of the State of Pennsylvania.
9.5. No Material Adverse Change.
--------------------------
Since the Balance Sheet Date there shall not have occurred any
material adverse change in the financial or other condition, of the Assets, or
the business, properties, results of operations or prospects of OSSI, and the
Buyer shall have received a certificate dated as of the Closing Date to that
effect signed by the respective Presidents or any Vice Presidents and the chief
financial officers of the ▇▇▇▇▇▇▇ Entities and by the Majority Shareholders.
9.6. No Adverse Legal Proceedings.
----------------------------
No injunction, restraining order or other order issued by a court of
competent jurisdiction or governmental authority that prohibits the consummation
of any of the transactions contemplated by this Agreement shall be in effect,
and there shall not be pending any administrative, regulatory or judicial
proceeding which seeks to prohibit, restrain or invalidate the consummation of
any such transaction or to recover damages from any of the parties hereto by
reason thereof.
9.7. Opinion of the Selling Parties' Counsel.
---------------------------------------
The Selling Parties shall have delivered to the Buyer an opinion of
the Selling Parties' counsel, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, dated the Closing
Date, as to those matters and in such form as shall be satisfactory to Buyer and
Buyer's counsel.
9.8. HSR Act Matters.
---------------
All applicable waiting periods under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated without the imposition of any conditions.
-32-
45
9.9. Title Insurance.
---------------
Buyer, after requesting such, shall have obtained owner's title
policies (owner's ALTA Policy Form B, as amended 1992) with respect to the Real
Property from the title company selected by Buyer revealing no exceptions to
coverage except such exceptions as are acceptable to Buyer in its sole
discretion.
9.10. Survey.
------
Buyer shall have obtained a current as-built survey of each parcel
of Real Property, which shall be to ALTA standards and shall be certified to
Buyer, the title company insuring title and Buyer's lenders, and shall show no
defects or encroachments in the applicable Real Property.
9.11. Deeds.
-----
The Selling Parties shall have delivered the necessary recordable
special warranty deeds for the Real Property.
9.12. Possession.
----------
Possession of the Real Property shall be or shall have been
delivered to Buyer as provided in this Agreement, free and clear of any leases,
other than any lease which may be an Assumed Contract.
9.13. Inspection Reports and Surveys.
------------------------------
Buyer shall have received, prior to the scheduled Closing Date, all
inspection reports and surveys relating to the Real Property from each local,
state and federal authority which are available to the Selling Parties.
9.14. Financing.
---------
Buyer shall have obtained sufficient financing to complete the
transactions contemplated by this Agreement on terms satisfactory to Buyer in
its sole discretion (Buyer acknowledges that it has accepted a commitment letter
for financing prior to the execution of this Agreement).
9.15. Consents.
--------
The Buyer shall have received the consents of each of the Persons
listed on Schedule 6.7 to the consummation by the Buyer of the transactions
contemplated by this Agreement.
-33-
46
9.16. Assets Transferred at Closing.
-----------------------------
Selling Parties shall have delivered to Buyer possession of the
Assets, free and clear of all liens, security interests, encumbrances, claims
and other exceptions of any kind whatsoever, together with such instruments of
sale and transfer, including without limitation, a ▇▇▇▇ of Sale and an
Assignment and Assumption Agreement in substantially the forms of Exhibits B and
C, respectively, attached hereto and made a part hereof.
9.17. Board of Directors Approval.
---------------------------
Buyer's board of directors shall have approved this
Agreement and the transactions contemplated hereby.
9.18. Due Diligence.
-------------
Buyer shall have satisfactorily completed, as determined in Buyer's
sole discretion, its due diligence review of OSSI, OSSI's Business and the
Assets as described in Section 8.4.
9.19. PA Bulk Sales Notices.
---------------------
The ▇▇▇▇▇▇▇ Entities shall have delivered, at least ten (10) days
prior to the Closing Date:
(a) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
▇▇▇ 7240 regarding the ▇▇▇▇▇▇▇ Entities' liability for
sales and use tax;
(b) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
▇▇▇ 7321.1 regarding the ▇▇▇▇▇▇▇ Entities' liability for
personal income tax withholding;
(c) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
▇▇▇ 1403 regarding the ▇▇▇▇▇▇▇ Entities' liability for
corporate taxes; and
(d) to the Pennsylvania Department of Labor and
Industry, a notice in accordance with the provisions of 43
Pa. Stat. ▇▇▇. 788.3 regarding the ▇▇▇▇▇▇▇ Entities'
liability for unemployment compensation taxes.
-34-
47
9.20. Tax Lien Certificates.
---------------------
The ▇▇▇▇▇▇▇ Entities shall deliver to Buyer, at least five (5) days
prior to the Closing Date, tax lien certificates from the Pennsylvania
Department of Revenue showing no liens against any of the ▇▇▇▇▇▇▇ Entities.
9.21. Tax Clearance Certificates.
--------------------------
The ▇▇▇▇▇▇▇ Entities shall file with the Pennsylvania Department of
Revenue Applications For Tax Clearance Certificates within ten (10) days of the
Closing Date and shall deliver Tax Clearance Certificates from the Pennsylvania
Department of Revenue to Buyer upon issuance of such certificates.
9.22. Non Competition Agreement.
-------------------------
The Majority Shareholder and the other shareholders of the ▇▇▇▇▇▇▇
Entities listed on Schedule 6.2 shall have executed and delivered a certain Non
Competition Agreement in substantially the form attached hereto as Exhibit D.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING PARTIES
----------------------------------------------------------
The obligations of the Selling Parties to complete the
Transactions contemplated by this Agreement are subject to the
fulfillment prior to or at Closing of the following conditions (any
of which conditions may, at its option, be waived by the Selling
Parties):
10.1. Performance of Agreements.
-------------------------
The Buyer shall have performed all agreements and complied with all
conditions required by this Agreement to be performed or complied with by it at
or prior to the Closing, and the Selling Parties shall have received a
certificate dated as of the Closing Date to that effect signed by an executive
officer of the Buyer.
10.2. Representations and Warranties of the Buyer.
-------------------------------------------
The representations and warranties of the Buyer contained in this
Agreement hereof shall be true and correct at and as of the date of this
Agreement and shall be true and correct at and as of the Closing Date, and the
Selling Parties shall have received a certificate dated as of the Closing Date
to that effect signed by an executive officer of Buyer.
-35-
48
ARTICLE XI
INDEMNIFICATION REMEDIES
------------------------
11.1. Indemnification by the Selling Parties.
--------------------------------------
The Selling Parties, jointly and severally, shall indemnify and hold
the Buyer harmless from and against any damage (including without limitation
incidental and consequential damages), deficiency, cost, expense or diminution
of value, whether or not involving a third-party claim (a "Loss") resulting from
(i) any misrepresentation, any breach of any representation or warranty of
Selling Parties contained herein or in any schedule or document delivered or to
be delivered pursuant to this Agreement or any failure to perform any covenant
or obligation of the Selling Parties contained herein or in any document
delivered or to be delivered pursuant to this Agreement; (ii) any liability or
alleged liability of Selling Parties that is not expressly assumed by Buyer
pursuant to the terms of this Agreement, including but not limited to, any Loss
related to the environmental conditions at the Hazelton Store Premises located
at 22nd and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, any Loss related
to any outstanding litigation between OSSI and its present or future employees
and any Loss related to any benefits, severance or salary due to any OSSI
employees on or before the Closing Date; (iii) the failure to comply with any
applicable bulk sales law, including but not limited to, amounts of any kind or
character, determined due to local, state or federal taxing authorities; (iv)
any shortfall in payment of the notes receivable listed on Schedule 1.1(l); (v)
any Loss relating to the parking lot and driveway for the Midway store in
Wyoming, PA; or (vi) any claims, actions, judgments, costs and expenses incident
to the foregoing (including without limitation costs of investigation and
reasonable attorneys' fees). Notwithstanding the foregoing, this Paragraph 11.1
shall not apply to any breach of any representation or warranty set forth in
Section 6.14.
11.2. Indemnification by the Buyer.
----------------------------
The Buyer will indemnify and hold the Selling Parties harmless from
and against any Loss resulting from (i) any misrepresentation, any breach of any
representation or warranty of the Buyer contained herein or in any schedule or
document delivered or to be delivered pursuant to this Agreement or the failure
to perform any obligation of the Buyer contained herein or in document delivered
or to be delivered pursuant to this Agreement; (ii) any liability of OSSI with
respect to the Assumed Contracts for obligations accruing after Closing; or (ii)
any claims, actions, judgments, costs and expenses incident to the foregoing
(including without limitation costs of investigation and reasonable attorneys'
fees).
11.3. Determination of Losses.
-----------------------
Losses shall be determined taking into account the actual
amount of damage, deficiency, cost or expense incurred or suffered or the
diminution of value of any Asset by reason of the event or condition giving
rise to the obligation to indemnify. If Buyer suffers damage caused by any
inaccuracy or misstatement in the audited financial statements of OSSI as at
December 31, 1999
-36-
49
which adversely affects the sales, earnings or cash flow of Selling Parties or
the Assets, then the Loss shall be calculated as the amount of the liability
multiplied by seven (7). Notwithstanding the forgoing, this Paragraph 11.3
shall not apply to any breach of any representation or warranty set forth in
Section 6.14.
11.4. Procedures Relating to Indemnification for Third Party Claims under
-------------------------------------------------------------------
Sections 11.1 and 11.2.
----------------------
(a) A party seeking indemnification pursuant to
Sections 11.1 or 11.2 (an "Indemnified Party") with respect
to any claim or assessment, or the commencement of any
action, suit, audit or proceeding, by a third party in
respect of which indemnity may be sought hereunder
(collectively, a "Third Party Claim") shall give prompt
notice to the party from whom such indemnification is
sought (the "Indemnifying Party") of the assertion of such
Third Party Claims and will give the Indemnifying Party
such information with respect thereto as the Indemnifying
Party may reasonably request, but no failure to give such
notice shall relieve the Indemnifying Party of any
liability hereunder (except to the extent the Indemnifying
Party has suffered actual prejudice thereby). The
Indemnifying Party shall have the right, exercisable by
written notice to the Indemnified Party (which notice shall
state that the Indemnifying Party expressly agrees that, as
between the Indemnifying Party and the Indemnified Party,
the Indemnifying Party shall be solely obligated to satisfy
and discharge the Third Party Claim) within ten (10) days
of receipt of notice from the Indemnified Party of the
commencement of or assertion of any Third Party Claim, to
assume the defense of such Third Party Claim, using counsel
selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party; provided, that the
Indemnifying Party shall not have the right to assume a
Third Party Claim if (i) the named parties to any such
action (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and (ii) the
Indemnified Party shall have been advised by counsel in
writing that under applicable standards of professional
responsibility, a conflict will arise in the event both the
Indemnified Party and the Indemnifying Party are
represented by the same counsel with respect to the Third
Party Claim, in which case such Indemnified Party shall
have the right to participate in the defense of such Third
Party Claim and all Losses in connection therewith shall be
reimbursed by the Indemnifying Party. In addition, if the
Indemnifying Party fails to give the Indemnified Party the
notice complying with the provisions stated above within
the stated time period, the Indemnified Party shall have
the right to assume control of the defense of the Third
Party Claim and all Losses in connection therewith shall be
reimbursed by the Indemnifying Party upon demand of the Indemnified
Party.
(b) If at any time after the Indemnifying Party
assumes the defense of a Third Party Claim any of the
conditions set forth in clauses (i) or (ii) of Section
11.4(a) above come into existence,
-37-
50
the Indemnified Party shall have the same rights as set
forth above as if the Indemnifying Party never assumed the
defense of such claim.
(c) The Indemnifying Party or the Indemnified Party,
as the case may be, shall in any event have the right to
participate, at its own expense, in the defense of any
Third Party Claim which the other is defending.
(d) The Indemnifying Party, if it shall have assumed
the defense of any Third Party Claim in accordance with the
terms hereof, shall have the right, upon thirty (30) days
prior written notice to the Indemnified Party, to consent
to the entry of judgment with respect to, or otherwise
settle such Third Party Claim unless (i) the Third Party
Claim involves equitable or other non-monetary damages or
(ii) in the reasonable judgment of the Indemnified Party
such settlement would have a continuing Material Adverse
Effect on the Indemnified Party's business (including any
material impairment of its relationships with customers
and suppliers), in which case such settlement may be made
only with the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld.
(e) Whether or not the Indemnifying Party chooses to
defend or prosecute any claim involving a third party, all
the parties hereto shall cooperate in the defense or
prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals as may
be reasonably requested in connection therewith.
11.5. Nature and Survival of Representations
--------------------------------------
All statements contained in any certificate or other instrument
delivered by or on behalf of the Selling Parties pursuant to this Agreement or
in connection with the transactions contemplated hereby shall be deemed
representations and warranties by the Selling Parties hereunder, and all
statements contained in any certificate or other instrument delivered by or on
behalf of the Buyer pursuant to this Agreement shall be deemed representations
and warranties by the Buyer hereunder. Any claim for indemnification under this
Article XI must be asserted within two years following the Closing Date except
that the following representations and warranties shall survive and
indemnification claims may be asserted based upon breach of such representations
and warranties for the applicable statute of limitations periods: Sections 6.6
(No Violation of Law), 6.9 (No Undisclosed Liabilities), 6.11 (Tax
Payments), 6.14 (Environmental Matters), 6.15, subparagraph (a) only
(Title to Real Property), 6.16 (Marketable Title to Personal
Property), 6.19 (Litigation) and 6.23 (Employee Benefit Plans).
-38-
51
ARTICLE XII
CERTAIN POST-CLOSING MATTERS
----------------------------
12.1. Availability of Records.
-----------------------
For six (6) years after the Closing at the request and expense (for
storage and disposal) of the Selling Parties, the Buyer will make available to
the Selling Parties and their representatives the records relating to OSSI's
Business acquired by the Buyer pursuant hereto, for inspection and copying at
reasonable times for purposes (which shall be specified in the request therefor)
of preparation of tax returns or reports or responding to an audit thereof or
other reasonable business purpose. The Buyer will make available at no cost to
the Selling Parties such financial, accounting and other personnel employed by
the Buyer as may be reasonably necessary to enable the Selling Parties to
prepare such tax, accounting and financial reports as may be reasonably
requested by Selling Parties in connection with winding up its involvement in
the Seller's Business.
12.2. Collection of Accounts Receivable.
---------------------------------
(a) Buyer will use reasonable efforts to collect all
Accounts Receivable. In addition, Buyer shall assist OSSI
by allowing examination by OSSI's authorized
representatives of relevant documentation in Buyer's
possession after the Closing Date, and by transferring to
OSSI any payments Buyer may receive from any source
whatsoever concerning OSSI's recovery of Accounts
Receivable as provided below. Any payments received by
Buyer from any payors with respect to the Accounts
Receivable will be transferred to OSSI within ten (10) days
after receipt thereof by Buyer. Any payments made by such
payors and specified as applying to certain time periods
either preceding or following the Closing Date shall be
applied to accounts receivables relating to such time
periods.
(b) All OSSI employees who have previously been
involved in the collection of its Accounts Receivable and
who do not become Transferred Employees shall assist Buyer
in the collection of the Accounts Receivable for sixty (60)
days after the Closing Date. Such OSSI employees shall not
be employees or agents of Buyer and shall not be entitled
to any of Buyer's employee benefits. OSSI shall pay all
costs associated with such employees' services.
(c) Except as hereinabove provided, the collection of
any Accounts Receivable due OSSI that have not been
collected by Buyer or OSSI within sixty (60) days after the
Closing Date shall become the sole responsibility of OSSI,
and Buyer shall have no further obligation to assist OSSI
with respect to collection thereof.
-39-
52
ARTICLE XIII
TERMINATION OF AGREEMENT
------------------------
13.1. Termination.
-----------
This Agreement may be terminated and the transactions contemplated
hereby abandoned:
(a) by mutual consent of Buyer and the Selling Parties
at any time prior to the Closing for any reason;
(b) by written notice from Buyer to the Selling
Parties (i) if a breach by any of the Selling Parties of
any of their representations, warranties or agreements
contained in this Agreement occurs which is not cured
within ten (10) days after written notice of such breach is
given to the party committing such breach; or (ii) if the
conditions set forth in Article IX have not been satisfied
on or before May 31, 2000, unless expressly waived by
Buyer; provided, however, that the right to terminate this
Agreement under this Section 13.1(b)(ii) shall not be
available to Buyer if a breach by Buyer of any of its
representations, warranties or agreements contained in this
Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date.
(c) by written notice from the Selling Parties to
Buyer (i) if a breach by any of Buyer of any of its
representations, warranties or agreements contained in this
Agreement occurs which is not cured within ten (10) days
after written notice of such breach is given to the party
committing such breach; or (ii) if the conditions set forth
in Article X have not been satisfied on or before May 31,
2000, unless expressly waived by the Selling Parties;
provided, however, that the right to terminate this
Agreement under this Section 13.1(c)(ii) shall not be
available to the Selling Parties if a breach by Selling
Parties of any of their representations, warranties or
agreements contained in this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or
before such date.
13.2. Effect of Termination.
---------------------
In the event that (i) this Agreement is terminated by Selling
Parties for any reason other than pursuant to Section 13.1(c) hereof
or Selling Parties otherwise fail to consummate the transaction
contemplated hereunder, and (ii) within a one-year period following
termination of this Agreement, any of the Selling Parties enter into any letter
of intent or similar document or any agreement to sell, lease, exchange or
otherwise transfer more than 50% of the assets of Selling Parties , or a sale,
merger, consolidation, share exchange, business combination or other similar
transaction transferring beneficial or record ownership or control of more than
50% of the equity securities of Selling
-40-
53
Parties (excluding transfers among Orloski family members or family trusts),
then Selling Parties will pay Buyer, within one (1) business day following the
date of termination, a break-up fee in the amount of $2,500,000, such fee being
in the nature of liquidated damages as exclusive compensation to Buyer for any
and all claims and losses which Buyer has or may have incurred in connection
with this Agreement and the transactions contemplated hereby.
Selling Parties have agreed to this provision in order to induce
Buyer to enter into this Agreement and as a means of compensating
Buyer for the substantial direct and indirect monetary and other
costs incurred or to be incurred in connection with this Agreement
and the transactions contemplated hereby and for the loss of its
ability to pursue other advantageous transactions and the potential
adverse consequences if the transactions contemplated by this
Agreement are not completed.
ARTICLE XIV
MISCELLANEOUS
-------------
14.1. Governing Law
-------------
This Agreement will be governed by the laws of the Commonwealth of
Pennsylvania without regard to Pennsylvania's conflict of laws principles.
14.2. Parties in Interest
-------------------
This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and assigns. Neither
party hereto may assign its interest under this Agreement to any other Person
without the prior written consent of the other party, except that Buyer may
assign its rights hereunder to an affiliate of Buyer.
14.3. No Third Party Beneficiaries.
----------------------------
Nothing in this Agreement is intended to create rights enforceable
against any party hereto by any so-called third party beneficiary, and it is
expressly intended that no covenant herein shall be enforceable by any employee
or former employee of the Selling Parties, any party to a contract (other than
this Agreement) or other arrangement with the Selling Parties or any creditor of
the Selling Parties.
14.4. Entire Agreement.
----------------
This Agreement contains the entire agreement among the parties
hereto with respect to the sale and purchase of the Assets and the other
transactions contemplated herein and supersedes any prior agreements or
understandings between or among any of the parties hereto relating to the
subject matter hereof.
14.5. Notices
-------
All notices and other communications hereunder or in connection
herewith shall be in writing and shall be deemed to have been duly given if
-41-
54
delivered (which may be by facsimile or other electronic transmission) or mailed
in the continental United States by registered or certified mail, return receipt
requested, to a party at the following address, or to such other address as such
party may hereafter specify by notice:
If to the Selling Parties to:
▇▇▇▇▇▇▇ Service Station, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and CEO
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esquire
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Buyer to:
Uni-Marts, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and CEO
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Saul, Ewing, ▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14.6. Headings and Titles
-------------------
The headings and titles of Articles, Sections and the like in this
Agreement are inserted for convenience of reference only, form no part of this
Agreement and shall not be considered for purposes of interpreting or construing
the text hereof.
14.7. Modification
------------
No amendment or modification of or supplement to this Agreement will
be effective unless it is in writing and duly executed by the party to be
charged thereunder.
-42-
55
14.8. Counterparts
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
ARTICLE XV
ENVIRONMENTAL INDEMNIFICATION REMEDIES
--------------------------------------
15.1. Indemnification by the Selling Parties.
--------------------------------------
Subject to the limitations set forth in Paragraphs 15.1(a),
(b), and (c), the Selling Parties, jointly and severally,
shall indemnify and hold the Buyer harmless from and
against any Loss resulting from (i) any misrepresentation,
any breach of any representation or warranty of Selling
Parties contained in Section 6.14, or any failure to
perform any covenant or obligation of the Selling Parties
contained in Section 6.14, and (ii) any claims, actions,
judgments, costs and expenses incident to the foregoing
(including without limitation costs
of investigation and reasonable attorneys' fees). Losses
identified in this Paragraph shall be known as
"Environmental Losses."
(a) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent that Buyer (i) is
reimbursed for such Environmental Loss by the
Pennsylvania Underground Storage Tank Indemnification
Fund (the "Tank Fund") established pursuant to the
Storage Tank and Spill Prevention Act of 1989, 32 P.S.
6021.101 et seq., as amended (the "Act"), or (ii)
Buyer is not reimbursed for such Environmental Loss by
the Tank Fund because it does not remain in compliance
with the Act after Closing. Within fourteen (14) days
after receipt of notice from Buyer under Paragraph
15.3(a), Selling Parties shall notify Buyer as to
whether Selling Parties contend that the alleged
Environmental Loss is covered by the Tank Fund, and
Buyer shall thereafter diligently pursue recovery from
such Tank Fund with respect to such Environmental Loss. Selling
Parties shall not have an obligation to indemnify and hold
Buyer harmless with respect to such Environmental Loss
unless and to the extent that the Tank Fund formally
determines that Buyer is not entitled to
indemnification from the Tank Fund. If any such claim
by Buyer against the Tank Fund is denied in whole or
in part, Buyer shall share with Selling Parties all
reports submitted by Buyer and
written communications received from regulatory
authorities by Buyer in connection with such claim.
-43-
56
(b) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent Selling Parties can
show that such Environmental Loss resulted from any
release of Hazardous Substances caused by Buyer.
Within fourteen (14) days after receipt of notice
from Buyer that a claim against the Tank Fund has been
denied in whole or in part, Selling Parties shall
notify Buyer as to whether Selling Parties contend
that the alleged Environmental Loss resulted from any
release of Hazardous Substances caused by Buyer, and
shall thereafter have the right to have an independent
arbitrator (that is selected by agreement between the
Selling Parties and Buyer) determine the extent to
which the Environmental Loss resulted from any release
of Hazardous Substances caused by Buyer. The
prevailing party in the arbitration shall pay the
reasonable attorneys' fees of the other party that are
incurred as part of the arbitration process. The
arbitration process shall be completed within ninety
(90) days from the date of notice from Selling Parties
to Buyer that Selling Parties contend that the
Environmental Loss resulted from a release of Hazardous
Substances caused by Buyer. Selling Parties shall comply with
their obligations under this Article with respect to any
Environmental Loss until and unless the arbitrator
rules in Selling Parties' favor.
(c) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent tha
tsuchEnvironmental Loss exceeds the amount in the
Indemnity Escrow Fund.
15.2. Determination of Environmental Losses.
-------------------------------------
Environmental Losses shall be determined taking into account the
actual amount of damage, deficiency, cost or expense incurred or suffered.
-44-
57
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
UNI-MARTS, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
▇▇▇▇▇▇▇ SERVICE STATION, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and CEO
GRACEDALE PROPERTIES, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and CEO
BLAKESLEE CORNER, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and CEO
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-45-
58
ADDENDUM TO ASSET PURCHASE AGREEMENT
Among
UNI-MARTS, INC.
AND
ORLOSKI SERVICES STATION, INC.,
GRACEDALE PROPERTIES, INC.,
BLAKESLEE CORNER, INC.,
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Original Agreement dated as of February 23, 2000
This Addendum dated as of April 2, 2000
59
THIS ADDENDUM TO AN ASSET PURCHASE AGREEMENT, dated February 23, 2000, is
made among UNI-MARTS, INC., a Delaware corporation, or its assigns ("Buyer"),
▇▇▇▇▇▇▇ SERVICE STATION, INC., a Pennsylvania Corporation ("OSSI"), GRACEDALE
PROPERTIES, INC., a Pennsylvania Corporation ("Gracedale"), BLAKESLEE
CORNER, INC., a Pennsylvania Corporation ("Blakeslee") (OSSI,
Gracedale and Blakeslee are collectively referred to herein as the
"Orloski Entities"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(collectively, the "Majority Shareholders") (the Orloski Entities and
Majority Shareholders are collectively referred to herein as the
"Selling Parties").
BACKGROUND
A. The Selling Parties entered into an Asset Purchase Agreement
dated February 23, 2000 ("Original Asset Purchase Agreement") to sell
certain parcels of real property and improvements as well as other
assets of OSSI to the Buyer.
B. One of the properties to be conveyed is a parcel of 1.84
acres located in Rice Township, Luzerne County, Pennsylvania, more
fully described as Uni-Mart Parcel "A", copy of the description thereof is
attached hereto and made a part hereof and marked Exhibit "A".
60
C. That parcel is part of a larger parcel containing
approximately 16.73 acres of land, more or less, more fully described
in a Deed of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇-▇▇▇▇▇, Luzerne County,
Pennsylvania and attached hereto as Exhibit "B".
D. A sub-division plan has been filed for that parcel and said
subdivision plan is expected to be signed and filed shortly after the
closing under the Asset Purchase Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. The purchase price defined in Section 2.1 of the Original
Asset Purchase Agreement shall be reduced by the sum of
$1,454,600.00.
2. The Majority Shareholders shall enter into a Lease for the parcel
described in Exhibit "A" with the Buyer for a period of twenty (20) years in the
form attached hereto and made a part hereof and marked Exhibit "C".
61
3. That promptly upon receipt of all approvals for the
subdivision and the expiration of any appeal period and, in no event,
later than five (5) months later than the closing on the Original Asset Purchase
Agreement, the Majority Shareholders shall convey to the Buyer, subject to all
of the covenants and conditions of the Original Asset Purchase Agreement, the
land described in Parcel "A" for the same purchase price under the Original
Asset Purchase Agreement was reduced.
4. If the Majority Shareholders are unable to so convey the
property within a period of five (5) months then, in that event, the
Lease shall remain in full force and effect and the Buyer shall have
the option to purchase Parcel "A" anytime during the next seven (7)
months for the purchase price hereintofore described at its option,
upon the same terms and conditions as set forth in the Original Asset
Purchase Agreement.
5. In all other respects the parties hereto confirm and affirm
the conditions and covenants of the Original Asset Purchase Agreement
dated February 23, 2000.
62
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the date first above written.
UNI-MARTS, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
▇▇▇▇▇▇▇ SERVICE STATION, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and CEO
GRACEDALE PROPERTIES, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and CEO
BLAKESLEE CORNER, INC.
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Chairman
and CEO
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇