EXHIBIT 99.2
ASSET PURCHASE AGREEMENT
AMONG
B.R.G., INC.
(AS SELLER PARENT),
RIP ▇▇▇▇▇▇▇ TRUCK SERVICE CENTER, INC.
(AS SELLER),
TRAVELCENTERS OF AMERICA, INC.
(AS BUYER PARENT),
AND
TA OPERATING CORPORATION
(AS BUYER)
DATED
OCTOBER 1, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS................................................................. 1
1.1 DEFINITIONS...................................................................... 1
ARTICLE II - PURCHASE AND SALE OF ACQUIRED ASSETS....................................... 12
2.1 PURCHASE AND SALE OF ACQUIRED ASSETS............................................. 12
2.2 ASSUMED OBLIGATIONS AND RETAINED OBLIGATIONS..................................... 14
2.3 PURCHASE PRICE................................................................... 16
2.4 ESCROW DEPOSIT................................................................... 17
2.5 CASH ON HAND AMOUNT.............................................................. 17
2.6 AS IS, WHERE IS; RISK OF LOSS; CASUALTY LOSS..................................... 17
2.7 ALLOCATION OF PURCHASE PRICE..................................................... 18
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE SELLER.............................. 18
3.1 ORGANIZATION, STANDING AND POWER................................................. 18
3.2 AUTHORITY FOR AGREEMENT.......................................................... 19
3.3 CONSENTS AND APPROVALS........................................................... 19
3.4 NO BREACH........................................................................ 19
3.5 FINANCIAL STATEMENTS............................................................. 19
3.6 COMPLIANCE WITH LEGAL REQUIREMENTS............................................... 20
3.7 ENVIRONMENTAL MATTERS............................................................ 20
3.8 TANGIBLE ACQUIRED ASSETS......................................................... 21
3.9 REAL PROPERTY.................................................................... 21
3.10 PERMITS......................................................................... 23
3.11 CONTRACTS....................................................................... 23
3.12 TAXES........................................................................... 23
3.13 ABSENCE OF CERTAIN CHANGES...................................................... 23
3.14 INSURANCE....................................................................... 24
3.15 EMPLOYEES AND EMPLOYEE BENEFIT PLANS............................................ 24
3.16 BROKERAGE FEES.................................................................. 25
3.17 SUFFICIENCY..................................................................... 25
3.18 INTERCOMPANY AGREEMENTS......................................................... 25
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER.................................... 25
4.1 ORGANIZATION, STANDING AND POWER................................................. 25
4.2 AUTHORITY FOR AGREEMENT.......................................................... 25
4.3 ABSENCE OF BREACH; CONSENTS AND APPROVALS........................................ 25
4.4 ADEQUATE RESOURCES............................................................... 25
4.5 CLAIMS, LITIGATION............................................................... 26
4.6 BROKERAGE FEES................................................................... 26
4.7 BUYER'S INVESTIGATION............................................................ 26
ARTICLE V - ADDITIONAL AGREEMENTS....................................................... 26
5.1 ACTIONS PRIOR TO CLOSING......................................................... 26
5.2 COOPERATION...................................................................... 27
5.3 ACCESS........................................................................... 27
5.4 INSURANCE........................................................................ 28
5.5 COMPLIANCE WITH LAWS............................................................. 28
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5.6 KEEPING OF BOOKS AND RECORDS..................................................... 28
5.7 LITIGATION....................................................................... 28
5.8 EMPLOYEES........................................................................ 28
5.9 CONSENTS......................................................................... 28
5.10 CONFIDENTIALITY................................................................. 28
5.11 BROKERS FEES.................................................................... 29
5.12 SUPPLEMENTAL DISCLOSURES........................................................ 30
5.13 SIGNS AND LOGOS................................................................. 31
5.14 POST-CLOSING COVENANT........................................................... 31
5.15 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ FILINGS....................................................... 32
5.16 SELLER'S ACCESS TO BOOKS AND RECORDS AND PERSONNEL.............................. 33
5.17 BUYER'S ACCESS TO BOOKS AND RECORDS AND PERSONNEL............................... 33
5.18 POST-CLOSING MATTERS: ACCOUNTING................................................ 34
5.19 TITLE AND SURVEY MATTERS........................................................ 34
5.20 SECTION 1031 LIKE KIND EXCHANGE................................................. 38
5.21 INTERIM FINANCIAL STATEMENTS.................................................... 39
5.22 COBRA COMPLIANCE................................................................ 39
5.23 NO-SHOP......................................................................... 40
5.24 ADA COMPLIANCE.................................................................. 40
5.25 CLEANUP REIMBURSEMENT........................................................... 40
5.26 ARKANSAS SITE................................................................... 40
5.27 RETENTION OF PROCEEDS........................................................... 40
ARTICLE VI - CONDITIONS TO SELLER'S OBLIGATION TO SELL THE ACQUIRED ASSETS.............. 41
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS........................................ 41
6.2 [INTENTIONALLY OMITTED.]......................................................... 41
6.3 PAYMENT OF CASH PORTION OF PURCHASE PRICE........................................ 41
6.4 CLOSING DOCUMENTS................................................................ 41
ARTICLE VII - CONDITIONS TO BUYER'S OBLIGATIONS TO PURCHASE THE ACQUIRED ASSETS......... 41
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS........................................ 41
7.2 CLOSING DOCUMENTS................................................................ 41
7.3 CONSENTS......................................................................... 41
7.4 NO CHANGE........................................................................ 41
ARTICLE VIII - CONDITIONS TO OBLIGATIONS OF ALL PARTIES................................. 42
8.1 NOTIFICATIONS.................................................................... 42
8.2 REGULATORY APPROVALS............................................................. 42
8.3 ACTION OR PROCEEDING............................................................. 42
ARTICLE IX - CLOSING.................................................................... 42
9.1 GENERAL.......................................................................... 42
9.2 BUYER'S CLOSING DOCUMENTS AND PAYMENT............................................ 42
9.3 SELLER'S CLOSING DOCUMENTS....................................................... 43
ARTICLE X - INDEMNIFICATION............................................................. 45
10.1 BY SELLER....................................................................... 45
10.2 BY BUYER........................................................................ 45
10.3 NOTIFICATION AND HANDLING OF THIRD PARTY CLAIMS................................. 45
10.4 NOTIFICATION OF OTHER CLAIMS.................................................... 47
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10.5 ENVIRONMENTAL CLAIMS............................................................ 47
ARTICLE XI - LIMITATIONS AND SURVIVAL................................................... 47
11.1 LIMITATIONS AND CAPS ON LOSSES AND INDEMNITY.................................... 47
11.2 RECOURSE........................................................................ 48
11.3 SURVIVAL........................................................................ 48
ARTICLE XII - TERMINATION............................................................... 49
12.1 TERMINATION..................................................................... 49
12.2 EFFECT OF TERMINATION........................................................... 49
ARTICLE XIII - TAXES AND PREPAID RENTS/DEPOSITS......................................... 50
13.1 GENERAL TAX OBLIGATIONS......................................................... 50
13.2 PRORATION....................................................................... 50
13.3 OPERATING TAXES................................................................. 50
13.4 PREPAID RENTS/DEPOSITS.......................................................... 51
ARTICLE XIV - MISCELLANEOUS............................................................. 51
14.1 EXPENSES........................................................................ 51
14.2 NOTICES......................................................................... 51
14.3 MODIFICATION OR WAIVER.......................................................... 52
14.4 BINDING EFFECT AND ASSIGNMENT................................................... 52
14.5 GOVERNING LAW................................................................... 53
14.6 SECTION HEADINGS................................................................ 53
14.7 FURTHER ASSURANCES.............................................................. 53
14.8 ENTIRE AGREEMENT................................................................ 53
14.9 NO THIRD PARTY BENEFICIARIES.................................................... 53
14.10 COUNTERPARTS................................................................... 53
14.11 SEVERABILITY................................................................... 53
14.12 INTERPRETATION OF AGREEMENT.................................................... 53
14.13 WAIVER OF TRIAL BY JURY; JURISDICTION.......................................... 53
14.14 GENERAL DISCLAIMER............................................................. 54
14.15 PUBLIC ANNOUNCEMENTS........................................................... 54
INDEX OF EXHIBITS
Exhibit A - Inventory Procedures
Exhibit B - Escrow Agreement
Exhibit C - Special Warranty Deed (Arizona)
Exhibit D - Special Warranty Deed (Arkansas)
Exhibit E - Special Warranty Deed (California)
Exhibit F - Special Warranty Deed (Colorado)
Exhibit G - Special Warranty Deed (New Mexico)
Exhibit H - Special Warranty Deed (Texas)
Exhibit I - Special Warranty Deed (Wyoming)
Exhibit J - Assignment and Assumption Agreement (Leases)
Exhibit K - Assignment and Assumption Agreement (Contracts)
Exhibit L - Buyer's Legal Opinion
Exhibit M - ▇▇▇▇ of Sale
Exhibit N - Seller's Legal Opinion
Exhibit O - Amusement Agreement
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INDEX OF SCHEDULES
Schedule Page Number
-------- -----------
Schedule 1.1 (Seller's Knowledge)............................................... 10
Schedule 2.1(a)(i)(x) (Owned Real Property)..................................... 12
Schedule 2.1(a)(i)(y) (Leased Real Property).................................... 12
Schedule 2.1(a)(iv) (Vehicles).................................................. 12
Schedule 2.1(a)(v) (Assigned Contracts)......................................... 12
Schedule 2.1(b)(ii) (Retained Equipment, Video Games and Vending Machines)...... 13
Schedule 2.1(b)(vii) (Retained Motor Vehicles, Trailers and Tankers)............ 13
Schedule 2.1(b)(xiii) (Retained Legal Proceedings).............................. 14
Schedule 2.6 (Allocations for Total Loss) ...................................... 17
Schedule 2.7 (Allocation of Purchase Price)..................................... 18
Schedule 3.1 (Qualifications)................................................... 18
Schedule 3.3 (Consents and Approvals)........................................... 19
Schedule 3.5(a) (Financial Statements).......................................... 19
Schedule 3.5(d) (Reconciliation) ............................................... 20
Schedule 3.6 (Compliance with Legal Requirements)............................... 20
Schedule 3.7 (Environmental Matters)............................................ 21
Schedule 3.8 (Tangible Acquired Assets Exceptions).............................. 21
Schedule 3.9 (Real Property Exceptions)......................................... 22
Schedule 3.9(h) (Certain Property).............................................. 23
Schedule 3.10 (Permits)......................................................... 23
Schedule 3.11 (Assigned Contracts Exceptions)................................... 23
Schedule 3.12 (Taxes)........................................................... 23
Schedule 3.13 (Certain Changes)................................................. 23
Schedule 3.14 (Insurance)....................................................... 24
Schedule 3.15 (Employees and Employee Benefit Plans)............................ 24
Schedule 3.16 (Brokerage Fees--Seller).......................................... 25
Schedule 3.18 (Intercompany Agreements)......................................... 25
Schedule 4.4 (Adequate Resources)............................................... 25
Schedule 4.6 (Brokerage Fees--Buyer)............................................ 26
Schedule 5.9 (Required Consents)................................................ 28
Schedule 5.14 (Existing Business) .............................................. 31
Schedule 13.4 (Seller's Prepaid Expenses)....................................... 51
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into on this
1st day of October, 2004, by and among B.R.G., INC., a Texas corporation
("Seller Parent") (solely for purposes of Sections 3.2, 5.14 and 5.23), Seller
Parent's wholly-owned subsidiary RIP ▇▇▇▇▇▇▇ TRUCK SERVICE CENTER, INC., a Texas
corporation ("Seller"), TRAVELCENTERS OF AMERICA, INC., a Delaware corporation
("Buyer Parent"), and Buyer Parent's wholly-owned subsidiary TA OPERATING
CORPORATION, a Delaware corporation ("Buyer"). Capitalized terms used but not
defined herein shall have the meanings specified in Section 1.1 hereof.
RECITALS
WHEREAS, Seller is the owner of the Acquired Assets, through which Seller
operates 11 full service travel centers; and
WHEREAS, Seller desires to sell, convey, transfer and assign to Buyer, and
Buyer desires to acquire from Seller, the Acquired Assets, and Buyer has agreed
to assume certain liabilities of Seller relating to the Acquired Assets and the
operation of the Business, all on the terms and conditions set forth in the
Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
conditions, and mutual covenants and agreements hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto agree as follows:
AGREEMENT
ARTICLE I - DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms shall have the following
definitions:
"AAA" shall have the meaning set forth in Section 5.19(j).
"Actions" shall have the meaning set forth in Section 3.6(b).
"Agreement" shall have the meaning set forth in the preamble.
"Acquired Assets" shall have the meaning set forth in Section 2.1(a).
"Affiliate" shall mean any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise.
"Amusement Agreement" shall have the meaning set forth in Section 9.3(q).
"Ancillary Agreements" shall mean the Escrow Agreement, the Deeds, the
Assignment and Assumption Agreement (Contracts), the Assignment and Assumption
Agreement (Leases), the ▇▇▇▇ of Sale, the Gaming Agreement, the Deed
Restrictions and, to the extent applicable, the ▇▇▇▇▇▇▇ Non-Competition
Agreements.
"Arizona Leases" shall have the meaning set forth in Section 5.19(i).
"Assigned Contracts" shall have the meaning set forth in Section 2.1(a)(v) and
shall include the Leases.
"Assignment and Assumption Agreement (Contracts)" shall have the meaning set
forth in Section 9.2(a).
"Assignment and Assumption Agreement (Leases)" shall have the meaning set forth
in Section 5.19(g).
"Assumed Obligations" shall have the meaning set forth in Section 2.2(a).
"Audited Statements" shall have the meaning set forth in Section 3.5(a).
"Base Consideration" shall mean the sum of $120,000,000 in United States
dollars.
"Basket" shall have the meaning set forth in Section 10.1.
"▇▇▇▇ of Sale" shall have the meaning set forth in Section 9.3(d)(i).
"Breach" shall mean a breach of a representation, warranty, covenant, obligation
or other provision of the Agreement or any instrument delivered at Closing
pursuant to the Agreement and will be deemed to have occurred if there is or has
been any inaccuracy in or breach of, or any failure to perform or comply with,
such representation, warranty, covenant, obligation or other provision.
"Business" shall mean the business of operating the Acquired Assets as they are
currently operated by Seller.
"Business Day" shall mean a day other than a Saturday, Sunday or legal holiday
for commercial banking institutions in the State of Texas.
"Buyer" shall mean Buyer and its successors, assigns and transferees.
"Buyer Legal Opinion" shall have the meaning set forth in Section 9.2(f).
"Buyer Parent" shall mean Buyer Parent and its successors, assigns and
transferees.
"Cash on Hand Amount" shall have the meaning set forth in Section 2.5.
"Claim" shall mean an asserted or threatened claim or Action by any third Person
or Governmental Body that could result in a Loss by a Party subject to
indemnification under Article X of this Agreement.
"Claim Notice" shall have the meaning provided in Section 10.3(a).
"Cleanup" shall mean all actions required to (i) cleanup, remove, treat or
remediate Hazardous Materials, (ii) perform pre-remedial studies and
investigations and post-remedial monitoring and care or (iii) respond to any
requests of Government Bodies for information or documents in any way relating
to cleanup, removal, treatment, assessment or remediation or potential cleanup,
removal, treatment or remediation of Hazardous Materials.
"Closing" shall mean consummation of the transactions contemplated in the
Agreement, which Closing shall take place on the Closing Date at the offices of
Buyer's counsel.
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"Closing Date" shall mean the date which is five Business Days after all of the
conditions set forth in Articles VI, VII and VIII of this Agreement have been
satisfied or such other date as is mutually agreeable to Buyer and Seller, but
not later than the Termination Date.
"Closing Payment" shall have the meaning provided in Section 2.3(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consent" shall mean any approval, consent, ratification, waiver or other
authorization (Including any Governmental Authorization), Including those
required to transfer an Acquired Asset (Including the Assigned Contracts) to
Buyer under the terms set forth in this Agreement or for Buyer to operate the
Business after Closing.
"Consent Decree" shall have the meaning set forth in Section 5.16(d).
"Contract" shall mean any agreement, obligation, promise, undertaking or
commitment, whether written or oral, express or implied, that is legally binding
pertaining to the Business and the Acquired Assets.
"Convenience Store Operation" shall mean any business which primarily caters to
passenger car motorist through a combination of the sale of (i) motor fuels
(which may include diesel fuel sold at a passenger car island only) and (ii)
convenience store items and/or quick service restaurants.
"Deed Restrictions" shall have the meaning set forth in Section 9.3(o).
"Deeds" shall have the meaning set forth in Section 5.19(f).
"Disclosure Schedules" shall mean the disclosure schedules attached to this
Agreement.
"Disposal" shall have the meaning assigned to such term in RCRA or in any other
applicable Environmental Law; provided however, that for the purposes of this
Agreement, the term shall apply to all Materials of Environmental Concern.
"DOJ" shall mean the United States Department of Justice.
"Effective Time" shall mean the 12:01 a.m. on the Closing Date.
"Employee" shall mean all employees of Seller whose employment relates to the
Acquired Assets or the Business and who are employed at the Travel Centers.
"Employee Benefit Plan" shall mean any of the following arrangements (whether
formal or informal, and whether written or unwritten) under which Seller, or any
of its Affiliates, has any liability to provide benefits or compensation to or
on behalf of any employee or former employee, or the spouse or dependents of any
employee or former employee:
(a) any employee benefit plan within the meaning of Section 3(3) of
ERISA, and
(b) any other profit-sharing, deferred compensation, incentive
compensation, bonus, commission, stock option, stock purchase, severance
pay, unemployment benefit, vacation pay, savings, cafeteria, dependent
care, scholarship, accident, disability, weekly income, salary
continuation or other compensation or fringe benefit plan or program.
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"Encumbrance" shall mean any equitable interest, lien, encumbrance, option,
pledge, security interest, mortgage, deed of trust, tenancy or other possessory
interest, conditional sale or other title retention agreement, assessment,
easement, right of way, restriction, condition, covenant or limitation of any
kind, Including any restriction on use or building, reservation, option, or
right of first refusal.
"Environment" shall mean the soil, land surface or subsurface strata, surface
waters (Including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (Including indoor air), plant and animal life and any other
environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities" or "EHS Liabilities" shall mean
any cost, damages, expense, liability, obligation, or other responsibility to or
of Seller (or to or of Buyer following the Closing) arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of,
relating to or resulting from:
(a) any environmental, health, or safety matters or conditions
(Including on-site or off-site contamination, occupational safety and
health, and regulation of Materials of Environmental Concern);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, Including
any investigation, Cleanup, removal, containment, or other remediation or
response actions required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any
natural resource damages;
(d) any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and
Health Law; or
(e) the use, presence, generation, storage, treatment, disposal,
management, emission or Release of Materials of Environmental Concern.
For purposes of this definition the terms "removal", "remedial",
"remediate", "remediation", and "response" include the applicable types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as amended
("CERCLA").
"Environmental Law" shall mean any Legal Requirement that:
(a) requires advising appropriate authorities, employees, and the
public of intended or actual releases of Materials of Environmental
Concern, violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction,
that could impact the Environment;
(b) requires preventing or reducing to acceptable levels the release
of Materials of Environmental Concern into the Environment;
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(c) requires reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) requires assuring that products are designed, formulated,
packaged, and used so that they do not present unreasonable risks to human
health or the Environment when used or disposed of;
(e) requires protecting resources, species, or ecological amenities;
(f) requires reducing to acceptable levels the risks inherent in the
transportation of Materials of Environmental Concern;
(g) requires any Cleanup of Materials of Environmental Concern that
have been Released, preventing the threat of Release, or paying the costs
of such Cleanup or prevention;
(h) requires making responsible parties pay private parties or any
Governmental Body, or groups of them, for damages done to their health or
the Environment, or permitting self-appointed representatives of the
public interest to recover for injuries done to public assets; or
(i) relates to Materials of Environmental Concern or the protection
of the Environment, public or employee health or safety, or disposal,
storage, treatment, emissions, discharges, spills, releases, or threatened
releases of Materials of Environmental Concern, or otherwise relating to
the presence, generation, management, manufacture, processing,
distribution, use, import, export, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern, and shall
include the Resource Conservation and Recovery Act, as amended ("RCRA");
CERCLA, the Clean Water Act, as amended; the Clean Air Act, as amended;
the Safe Drinking Water Act, as amended; the Toxic Substances Control Act,
as amended; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Materials Transportation Act, as amended; the Occupational
Safety and Health Act of 1970, as amended ("OSHA"); and all implementing
laws and all similar Legal Requirements, with respect to each of the
foregoing acts.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" shall mean the escrow agent specified in the Escrow Agreement.
"Escrow Agreement" shall have the meaning stated in Section 2.4.
"Escrow Deposit" shall mean the sum of $5,000,000 (together with all interest
and income accrued thereon), payable in accordance with Section 2.4 of this
Agreement.
"Estimated Price of Inventory" shall mean the estimated Price of Inventory,
determined as of the Closing Date, in accordance with the procedures set forth
on Exhibit A.
"Exchange" shall have the meaning stated in Section 5.20.
"Excluded Assets" shall have the meaning stated in Section 2.1(b).
"Financial Statements" shall have the meaning set forth in Section 3.5(a).
"FTC" shall mean the United States Federal Trade Commission.
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"GAAP" shall mean generally accepted accounting principles in the United States
of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board.
"Governmental Authorization" shall mean any approval, order, consent, license,
permit, franchise, filing, waiver or other authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement.
"Governmental Body" shall mean any or all of the following:
(a) nation, state, county, parish, city, town, village or district;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental jurisdiction or authority of
any nature (Including any governmental agency, branch, department,
official, or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) governmental body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature.
"▇▇▇▇▇▇▇ Non-Competition Agreements" shall have the meaning set forth in Section
9.3(p).
"Hazardous Materials" shall mean any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under, pursuant to or
otherwise regulated by any Environmental Law or Occupational Safety and Health
Law, Including any mixture or solution thereof, and specifically Including
petroleum and all derivatives thereof or synthetic substitutes therefor,
asbestos or asbestos-containing materials and polychlorinated biphenyls
("PCB's") or PCB containing materials.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Including" shall mean including without limitation.
"Indemnitee" shall have the meaning set forth in Section 10.3(a).
"Indemnitor" shall have the meaning set forth in Section 10.3(a).
"Independent Accountants" shall have the meaning set forth in Section 2.3(d).
"Insurance Claims" shall mean claims to recovery of proceeds owed under property
insurance on the Acquired Assets, whether for damages known to exist at this
time or which may occur on or prior to the Closing and which may be discovered
at any time in the future, but shall not include any insurance claims that may
provide coverage for Environmental, Health, and Safety Liabilities.
"Intellectual Property" shall mean all (i) United States and foreign patents and
patent applications of any kind, United States and foreign works of authorship,
mask-works, copyrights, and copyright and mask work registrations and
applications for registration, and any rights or licenses in the foregoing, and
(ii) unpatented inventions (whether or not patentable), trade secrets, know-how
and proprietary information,
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Including (in whatever form or medium), discoveries, ideas, compositions,
formulas, computer programs (Including source and object codes), computer
software and computer software documentation, database, drawings, designs,
plans, proposals, specifications, photographs, samples, models, processes,
procedures, data, information, manuals, reports, financial, marketing and
business data, and pricing and cost information, correspondence and notes, and
any rights or licenses in the foregoing which may be sublicensed to any Person
who is not an Affiliate of Seller without the payment of compensation or other
consideration to any Person.
"Interim Statements" shall have the meaning set forth in Section 3.5(a).
"Inventory" shall mean, whether located at the Travel Centers or in transit
thereto or therefrom, all gasoline, diesel, other fuel, lubricants, parts, food
and grocery items, merchandise and other products of Seller pertaining to the
operation of the Business and the Acquired Assets (Including in tank fuel), held
for sale to its customers, but excluding Inventory that is Obsolete or
Non-saleable, with the quantities of same as of the Closing Date to be
determined in accordance with the procedures set forth on Exhibit A.
"Leases" shall mean the agreements described on Schedule 2.1(a)(i)(y).
"Leased Real Property" shall have the meaning set forth in Section 2.1(a)(i)(y).
"Legal Requirement" shall mean any federal, state, local, municipal, foreign,
international, multinational, or other administrative Order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Loss" or "Losses" shall mean any and all costs, losses, liabilities, actions,
demands, obligations (Including corrective and remedial obligations), penalties,
interest, damages and expenses, Including reasonable legal fees, expert fees and
litigation expenses, excluding any consequential damages, lost profits or
punitive damages, suffered, incurred or claimed by a Party; provided, however,
that for any Losses asserted other than for Breaches of representations and
warranties contained in this Agreement, such Losses may include consequential
damages and lost profits. Such Loss or Losses shall be calculated to be net of
any realizable tax benefits or insurance proceeds received by a Party in
connection with the Loss or Losses.
"Material Adverse Change" shall be deemed to have occurred if the dollar amount
determined by the sum of (a) multiplying Seller's Modified Annualized Dollar
Differential by 7.7 plus (b) the GAAP financial effect of one-time events (e.g.,
environmental remediation adjustments, etc.) exceeds the Financial Threshold.
The "Financial Threshold" amount will be $10,000,000 through January 31, 2005
and $12,500,000 for the period after January 31, 2005. For purposes of the
foregoing, the following provisions shall apply:
(i) "Seller's Modified Annualized Dollar Differential" shall mean the
dollar amount determined by multiplying Seller's Initial Annualized Dollar
Differential by the difference between 100% and the Seller/Buyer Percentage
Delta.
(ii) "Seller/Buyer Percentage Delta" shall mean Buyer's LTM Percentage
Differential divided by Seller's LTM Percentage Differential; provided, however,
if Buyer's LTM Percentage Differential is greater than Seller's LTM Percentage
Differential, Seller/Buyer Percentage Delta shall be equal to one (1).
(iii) "Seller's Initial Annualized Dollar Differential" shall mean the
positive dollar difference, if any, between Seller's June 30, 2004 LTM and
Seller's Effective Time LTM, annualized based on the
7
actual number of full months elapsed between June 30, 2004 and the end of the
accounting period of Seller immediately preceding the Effective Time.
(iv) "Seller's LTM Percentage Differential" shall mean the percentage
decline, if any, between Seller's June 30, 2004 LTM and Seller's Effective Time
LTM, calculated on an annualized basis based on the actual number of all months
elapsed between June 30, 2004 and the end of the accounting period of Seller
immediately preceding the Effective Time.
(v) "Buyer's LTM Percentage Differential" shall mean the percentage
decline, if any, between Buyer's June 30, 2004 LTM and Buyer's Effective Time
LTM, calculated on an annualized basis based on the actual number of all months
elapsed between June 30, 2004 and the end of the accounting period of Buyer
immediately preceding the Effective Time.
(vi) "Seller's June 30, 2004 LTM" shall mean $15,600,000; provided that,
for periods after December 31, 2004, Seller's June 30, 2004 LTM shall be reduced
by $750,000.
(vii) "Buyer's June 30, 2004 LTM" shall mean $123,108,012.
(viii) "Seller's Effective Time LTM" shall mean, pertaining solely to the
Business and the Acquired Assets, Seller's unaudited earnings (or loss) before
interest, Taxes, depreciation, amortization, and administrative expenses, less
GAAP extraordinary items (but including rebate income, income from ATMs and
excluding dues paid to AMBEST), for the twelve month period ending at the
conclusion of the last completed monthly accounting period of Seller immediately
preceding the Effective Time.
(ix) "Buyer's Effective Time LTM" shall mean Buyer's unaudited earnings
(or loss) before interest, Taxes, depreciation and amortization, less GAAP
extraordinary items, for the Buyer-owned/Buyer-operated sites as included in
Appendix A for the twelve month period ending at the conclusion of the last
completed monthly accounting period of Buyer immediately preceding the Effective
Time.
(x) All financial data utilized by Seller and Buyer in connection with the
foregoing calculations shall be derived solely from the interim financial
statements delivered by both Seller and Buyer pursuant to Section 5.21.
(xi) In the event of a dispute between Seller and Buyer in connection with
the foregoing calculations, both parties shall refer such dispute to the
Independent Accountants in accordance with the time periods and procedures set
forth in Section 2.3(d), which shall also be deemed applicable to this
circumstance but with reference to the determination of Material Adverse Change
in accordance with the calculation set forth herein instead of the Estimated
Price of Inventory and the Price of Inventory.
"Materials of Environmental Concern" shall mean Hazardous Materials and other
hazardous substances, oil or other substances potentially harmful to human
health or the Environment.
"▇▇▇▇▇▇▇▇▇ Leases" shall have the meaning set forth in Section 5.19(i).
"Non-saleable" shall mean Inventory that, at the date of the inventory count, is
expired merchandise (in the case of food items or cosmetics), damaged
merchandise, consigned merchandise, recalled merchandise or merchandise that has
been opened or merchandise that is not in its original packaging (except for
vehicle parts held for sale as Inventory that are not in their original
packaging in accordance with customary business practices of Seller) on a per
item basis.
8
"Obsolete" shall mean holiday seasonal products (other than Christmas products)
or products having no readily available retail market in those markets where the
Travel Centers are located.
"Occupational Safety and Health Law" shall mean any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards.
"Order" shall mean any award, decision, injunction, judgment, writ, decree,
order, ruling, subpoena or verdict entered, issued, made, or rendered by any
court, administrative agency or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" shall mean an action taken by a Person if and only
if:
(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day operations of
such Person; and
(b) such action is not required to be authorized by the members,
managers, shareholders or board of directors of such Person (or by any
Person or group of Persons exercising similar authority).
"Owned Real Property" shall have the meaning set forth in Section 2.1(a)(i)(x).
"Party" shall mean either Buyer or Seller; "Parties" shall mean Buyer and
Seller.
"Permits" shall mean all licenses, permits, pending applications, consents,
approvals, and authorizations of or from any public or Governmental Body
utilized by Seller in connection with their current, or required by any
Governmental Body for, its use of the Acquired Assets.
"Permitted Encumbrances" shall mean with respect to the Acquired Assets: (i)
liens for current taxes and assessments not yet due and payable; (ii)
mechanics', materialmen's and similar liens arising in the Ordinary Course of
Business securing amounts not yet due and payable or amounts not in excess of
$100,000 in the aggregate, or $25,000 individually, with respect to any
individual Travel Center, being contested in good faith with appropriate
procedures (and reserved for on Seller's books and records) which liens shall be
paid by Seller if, upon conclusion of such contest it is determined that Seller
is responsible for such liens; (iii) public road right-of-ways as currently
located and traveled; (iv) railroad spur track easements and railroad rights, if
any, for railroad tracks as currently located and traveled; (v) the leases and
subleases (other than the Lease), licenses and similar agreements which are
Assigned Contracts; (vi) Legal Requirements generally applicable to owners and
operators of properties and businesses similar to the Travel Centers that do not
materially affect the business conducted at a Travel Center (as is currently
being conducted at such Travel Center); (vii) any condition set forth in the
Surveys which is accepted or deemed accepted by Buyer pursuant to Section 5.19
of this Agreement; and (viii) exceptions set out in the Title Commitments which
are accepted or deemed accepted by Buyer pursuant to Section 5.19 of this
Agreement.
"Person" shall mean any individual, corporation (Including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Price of Inventory" shall mean the price of the Inventory as of the Closing
Date, determined in accordance with the provisions set forth on Exhibit A.
9
"Proceeding" shall mean any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal, public or private) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Purchase Price" shall mean the sum of the Base Consideration (Including the
Escrow Deposit) plus (i) the Price of Inventory and (ii) the Cash on Hand
Amount, payable in accordance with the provisions of Sections 2.3 and 2.4 of
this Agreement.
"Real Property" shall mean the Owned Real Property and the Leased Real Property,
together with all interests of Seller (or, if applicable, any Affiliate of
Seller) in and to the buildings, structures, fixtures and improvements thereon
and all other appurtenances thereto.
"Release" shall mean any spilling, leaking, emitting, discharging, depositing,
disposing, escaping, leaching, dumping or other releasing into the Environment,
whether intentional or unintentional.
"Representative" shall mean with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor or other representative of such
Person, Including legal counsel, accountants and financial advisors.
"Retained Obligations" shall have the meaning set forth in Section 2.2(b).
"Retained Property" shall have the meaning set forth in Section 9.3(o).
"Seller" shall mean Seller and its successors, assigns and transferees.
"Seller Parent" shall mean Seller Parent and its successors, assigns and
transferees.
"Seller's Financial Statements" shall mean the unaudited, non-GAAP operating
statements pertaining to the Business and the Acquired Assets, derived from the
books and records of Seller and adjusted for interest, Taxes, depreciation and
administrative expenses (as supplemented by schedules including rebate income,
income from ATMs and dues paid to AMBEST), for the fiscal year ended January 31,
2004 and the five month periods ended June 30, 2003 and June 30, 2004.
"Seller's Knowledge" shall mean the actual knowledge (after reasonable inquiry)
of any individual listed in Schedule 1.1 hereto. It being understood, that for
the purposes of this Agreement, such individuals shall have no personal
liability hereunder.
"Seller's Prepaid Expenses" shall have the meaning set forth in Section 13.4.
"Shareholders" shall mean the shareholders of Seller Parent, which are B.R.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, The ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust, The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust, The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Pointer Trust, The ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Trust and The
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust.
"Survey" shall have the meaning set forth in Section 5.19(a).
"Taxes" shall mean all taxes, charges, fees, imposts, duties, levies,
withholdings or other assessments imposed by any Governmental Body, Including ad
valorem, property, income, sales, use, excise, utility, environmental, value
added, transfer and fuel taxes, customs duties and any interest, fines,
penalties or additions to tax attributable to or imposed on or with respect to
any such assessment.
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"Termination Date" shall mean the later of (i) the date that is four months from
the date of the execution of this Agreement, (ii) the date that is 30 days after
the receipt of approval from the FTC and DOJ under the HSR Act, and (iii) the
date on which all of the conditions set forth in Article VII are satisfied, but
in no event later than the date that is six months from the date of the
execution of this Agreement.
"Threat of Release" shall mean a substantial likelihood of a Release that may
require Cleanup.
"Title Commitment" shall mean an Owner's title commitment issued by the Title
Company on each parcel of Real Property, as provided in Section 5.19(a),
together with copies of the material documents referenced in such Title
Commitment.
"Title Company" shall mean either First American Title Insurance Company or
▇▇▇▇▇▇▇ Title Company. Buyer shall reasonably select the Title Company based on
bids provided to Buyer no later than five days from the date hereof. In the
event that Buyer selects First American Title Insurance Company as the Title
Company, and the costs associated with obtaining the Title Commitments and the
Title Policies materially exceeds the bid prepared by ▇▇▇▇▇▇▇ Title Company,
then, notwithstanding the provisions of Section 5.19(a) and 5.19(e), Buyer shall
be responsible for the payment of the difference by which such costs exceed the
bid submitted by ▇▇▇▇▇▇▇ Title Company.
"Title Policy" shall mean an owner's title policy issued to Buyer by the Title
Company on each parcel of Real Property, as provided in Section 5.19(e).
"Title Review Period" shall have the meaning set forth in Section 5.19(b).
"Total Loss" shall mean an actual, constructive or agreed loss resulting from
casualty, condemnation or taking, of 55% of the value set forth on Schedule 2.6
of a Travel Center (Including the Acquired Assets comprising a part thereof
(e.g., buildings and improvements located on the Real Property)).
"Trademarks" shall mean trademarks, tradenames, applications for trademark
registration, service marks, applications for service ▇▇▇▇ registration, domain
names, registrations and applications for registrations pertaining to the
foregoing owned by Seller or an Affiliate of Seller or licensed to Seller or an
Affiliate of Seller by any person, any derivations of the foregoing, and all
goodwill associated therewith.
"Transfer Forms" shall have the meaning set forth in Section 5.19(f).
"Travel Center Operations" shall mean any business which does any of the
following: (i) sells diesel fuel at separate fuel islands, (ii) provides parking
for long haul trucks, (iii) has full service restaurants (not including quick
service restaurants) intended to service professional drivers or motorists, (iv)
caters to professional drivers or motorists, or (v) provides driver amenities,
Including showers, laundry, truck weigh scales or television lounges; provided,
however, that Travel Center Operations shall not include stand alone Hotels or
Motels or stand alone restaurants.
"Travel Centers" shall mean the travel centers listed on Schedule 2.1(a).
"Transferred Employees" shall have the meaning set forth in Section 5.8.
"Treatment" shall have the meaning assigned to such term in RCRA or other
applicable Environmental Law; provided, however, that for purposes of this
Agreement, the term "Treatment" shall apply to all Materials of Environmental
Concern.
"Umpires" shall have the meaning set forth in Section 5.19(k).
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"Uncured Title Matter" shall have the meaning set forth in Section 5.19(d).
"Update Amount" shall have the meaning set forth in Section 5.12(e).
"Vehicles" shall have the meaning set forth in Section 2.1(a)(iv).
"WARN Act" shall mean the Worker Adjustment and Retraining Notification Act.
ARTICLE II - PURCHASE AND SALE OF ACQUIRED ASSETS
2.1 PURCHASE AND SALE OF ACQUIRED ASSETS. At the Closing and subject to the
terms and conditions of the Agreement, Seller shall sell, transfer, assign,
convey and deliver to Buyer and Buyer shall purchase, acquire, take assignment
and delivery from Seller, all of the right, title and interest of Seller in and
to the Acquired Assets, as specified below, save and except the Excluded Assets.
(a) Acquired Assets. The Acquired Assets shall consist of all assets
used by Seller in the operation of the Travel Centers or the Business at
the Travel Centers, excluding the Excluded Assets, and shall Include the
following property, rights and interests (collectively, the "Acquired
Assets"):
(i) the Seller owned real property listed on Schedule
2.1(a)(i)(x) (the "Owned Real Property") and all improvements,
buildings, fixtures and appurtenant rights and interest located
thereon or associated therewith, and, to the extent any required
Consents are obtained and subject to Section 5.9, all real property
leased by Seller upon which the Travel Centers are located and which
are listed on Schedule 2.1(a)(i)(y) (the "Leased Real Property") and
all Seller owned or leased leasehold improvements located thereon;
(ii) the Seller owned equipment and tangible personal property
located at the Travel Centers;
(iii) the Seller owned Inventory;
(iv) the Seller owned motor vehicles listed on Schedule
2.1(a)(iv) (the "Vehicles");
(v) to the extent any required Consents are obtained, and
subject to Section 5.9, the Contracts listed on Schedule 2.1(a)(v)
(the "Assigned Contracts");
(vi) the files, books and records (or copies thereof) owned by
Seller, directly relating to the Acquired Assets or the Business,
Including maintenance and repair records, plans, drawings, real
property documents, environmental reports and assessments;
(vii) Seller's rights to proceeds from Insurance Claims for
damage to any of the Acquired Assets arising prior to the Closing
and not repaired by Seller on or prior to Closing to the extent
agreed pursuant to Section 2.6; and
(viii) the Seller owned Cash on Hand Amount.
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(b) Excluded Assets. Notwithstanding anything to the contrary
contained in this Section 2.1, the Parties to this Agreement expressly
understand and agree that the Seller is not agreeing hereunder to sell,
assign, transfer or convey to the Buyer any of the Excluded Assets. The
Excluded Assets shall solely consist of the following property, rights and
interests (collectively, the "Excluded Assets"):
(i) all accounts receivable, notes receivable and other
receivables, Including any amounts payable to Seller under the
Assigned Contracts listed on Schedule 2.1(a)(v), with respect to the
Acquired Assets or the operations at the Travel Centers based upon
or attributable to performance under such Assigned Contracts
provided by the Seller or the operation of the Acquired Assets and
the Business prior to the Closing Date. It being understood, that,
to the extent paid to Buyer, Buyer shall segregate such payment from
its own assets and shall remit the same to Seller, without any
deduction or set-off. Any such payment shall at all times remain the
property of Seller, and Buyer acknowledges that it has no rights or
interests with respect thereto, Buyer and Seller further agree to
cooperate with respect to the collection of accounts receivable
pursuant to Section 5.18;
(ii) all equipment owned by third parties (which are the
subject of an Assigned Contract), all equipment (other than any
equipment acquired pursuant to an assumption of the contracts listed
on Schedule 2.1(a)(v)) which is being leased to Seller at the Travel
Centers and any video games or vending machines owned or leased by
Seller or Seller's Affiliates and located at the Travel Centers, in
each case as listed on Schedule 2.1(b)(ii);
(iii) cash and cash equivalents on hand, or in banks,
certificates of deposit, bank or savings and loan accounts, U.S.
government securities, and any other marketable securities of any
kind or nature (other than the Cash on Hand Amount);
(iv) all Intellectual Property (except as provided in Section
5.13);
(v) all Trademarks (except as provided in Section 5.13);
(vi) all signs and logos or personal property which contain
the name (or trade derivative thereof) or logo of Seller, Including
all uniforms supplied to Seller's employees (except as provided in
Section 5.13);
(vii) motor vehicles, trailers and tankers listed on Schedule
2.1(b)(vii);
(viii) Seller's rights to proceeds from Insurance Claims for
damage to any of the Acquired Assets arising prior to the Closing
and repaired by Seller on or prior to Closing to the extent agreed
pursuant to Section 2.6;
(ix) all records prepared in connection with the sale of the
Acquired Assets, Including bids received from third parties and
analyses relating to the Acquired Assets and the Business;
(x) any refunds or reimbursements with respect to Taxes or
federal or state Environmental Laws relating to any period occurring
prior to the Closing Date;
(xi) undeposited or uncollected checks and food stamps;
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(xii) any Contract to the extent that such Contract is not an
Assigned Contract; provided, however, that if after Closing the
Parties obtain the Consent to assignment of any Assigned Contract
that is not assigned at Closing pursuant to Section 5.9, the
Assigned Contract so affected shall then be assigned to Buyer and
shall become an Acquired Asset rather than an Excluded Asset;
(xiii) all rights and obligations associated with the legal
proceedings set forth on Schedule 2.1(b)(xiii);
(xiv) any rights to contribution, indemnity and/or defense
related to the ownership of the Acquired Assets or the Business
prior to Closing but only to the extent such rights relate to
Retained Obligations or to remediation or repairs effected by Seller
prior to Closing;
(xv) all defenses related to liabilities and obligations
retained by Seller,
(xvi) Inventory that is Obsolete or Non-Saleable:
(xvii) the minute book, stock transfer records and similar
corporate and limited liability company records of Seller and its
predecessors; and
(xviii) all Employee Benefit Plans and any related trust or
assets thereof.
2.2 ASSUMED OBLIGATIONS AND RETAINED OBLIGATIONS.
(a) Assumed Obligations. At and after the Effective Time, Buyer
shall assume and covenant to pay, perform and discharge only the following
obligations relating to the Seller, the Acquired Assets and the Business,
but excluding the Retained Obligations (collectively, the "Assumed
Obligations"):
(i) all obligations and liabilities of the Seller for
performance under the Assigned Contracts arising or accruing from
and after the Effective Time;
(ii) any Taxes of the Buyer, any Taxes attributable to the
Acquired Assets or the Business for any period from and after the
Effective Time, Including any Taxes that are prorated to Buyer
pursuant to Section 13.2;
(iii) any third party claims against any of the Acquired
Assets or the Business or the Seller solely to the extent
attributable to occurrences or events which occur from and after the
Effective Time;
(iv) all obligations relating to the Transferred Employees
solely to the extent arising or accruing from and after the
Effective Time, Including any liabilities under the WARN Act;
(v) all EHS Liabilities relating to the Business and the
Acquired Assets, whether arising or occurring prior to, at, or after
the Effective Time (subject to Seller's indemnification obligations,
and the limitations thereon, pursuant to Article X and Article XI of
this Agreement, and Seller's obligations pursuant to Section
2.2(b)(xi) of this Agreement); and
14
(vi) the operation of the Business and the Acquired Assets
from and after the Effective Time.
(b) Retained Obligations. Seller shall retain from and after the
Closing, all liabilities and obligations existing with respect to the
Seller, the Acquired Assets and the Business immediately prior to the
Effective Time, other than the Assumed Obligations, Including all Losses
based upon, arising out of or resulting from any of the following
(collectively, the "Retained Obligations"):
(i) all obligations and liabilities of the Seller for
performance under the Assigned Contracts, arising or accruing prior
to the Effective Time;
(ii) all obligations relating to the Transferred Employees
arising or accruing prior to the Effective Time (Including all
accrued wages, vacation pay, required contributions and related
payroll obligations), together with any claims by any employee or
former employee of the Seller arising out of the employment or
termination of employment of such employee or former employee by
Seller or its Affiliates, Including all obligations in respect of
Employee Benefit Plans;
(iii) any Taxes of the Seller, any Taxes attributable to the
Acquired Assets or the Business for any period prior to the
Effective Time, excluding any Taxes that are prorated to Buyer
pursuant to Section 13.2, and, to the extent asserted against the
Buyer, or any Affiliate thereof or any asset of the Buyer or any
such Affiliate;
(iv) any third party claims against any of the Acquired Assets
or the Business or the Seller to the extent attributable to
occurrences or events which occurred prior to the Effective Time and
any liabilities arising out of any Actions referred to in Schedule
3.6;
(v) all of the long-term debt of Seller, Including the current
portion thereof and all interest thereon;
(vi) all liabilities with respect to services performed by
Seller prior to the Effective Time, without regard to (A) the basis
or theory of claim (negligence, strict tort, breach of express or
implied warranty, fraud or failure to warn, test, inspect or
instruct or otherwise), (B) the nature of the damages sought
(property damage, economic loss, personal injury, wrongful death or
other) or (C) whether the claim arose or is asserted before or after
the Effective Time;
(vii) all liabilities of Seller to customers or third parties
with respect to shortages or defects in services performed for
customers prior to the Effective Time, including, but not limited
to, liabilities for product warranty claims;
(viii) all Liabilities arising out of the employment
relationship between Seller and any of its employees or former
employees existing at any time, whether before or after the
Effective Time, including, but not limited to, all Liabilities
relating to any Employee Benefit Plan sponsored or maintained by
Seller or any Affiliate of Seller or to which Seller has made
contributions, claims arising under any collective bargaining
agreement or trust, all severance claims of any employee of such
Seller (including, but not limited to, such claims relating to or
resulting from the consummation of the transactions contemplated
hereby) and all workers' compensation, unemployment compensation or
state or federal discrimination claims, claims arising under the
Family
15
and Medical Leave Act, as amended, the Fair Labor Standards Act, as
amended, the National Labor Relations Act, as amended, OSHA, ERISA,
the Americans with Disabilities Act, as amended, the Age
Discrimination in Employment Act, as amended, contract claims
(express or implied) or tort claims, demands, investigations or
proceedings relating to matters which occurred prior to the
Effective Time; provided, however, that Seller shall have no
obligations or responsibilities with under the WARN Act with respect
to the termination of any employees by Buyer;
(ix) all accounts payable, accrued expenses and other balance
sheet liabilities of Seller;
(x) all liabilities relating to the operation of the Business
prior to the Effective Time; and
(xi) all liabilities related to offsite Disposal by Seller
prior to the Effective Time.
2.3 PURCHASE PRICE.
(a) At the Closing, Buyer shall pay Seller the Purchase Price as
consideration for the purchase of the Acquired Assets, as set forth in
this Section 2.3.
(b) An amount equal to (x) the Base Consideration (reduced by the
amount of the Escrow Deposit), plus (y) the Cash on Hand Amount, plus (z)
90% of the Estimated Price of Inventory (such total amount, the "Closing
Payment") shall be payable to Seller at Closing by wire transfer of
immediately available funds to a bank account specified by Seller;
provided, however, that the Base Consideration shall be reduced by any
amounts determined in accordance with the procedures specified in Sections
2.6(c)(iii) and 5.19(d) and for prorations for Taxes and prepayments as
specified in Article XIII.
(c) The Escrow Deposit shall be released by the Escrow Agent to
Seller in accordance with the Escrow Agreement.
(d) Within 10 days after Closing, Seller shall determine the actual
final quantities of Inventory as of the Closing Date and the applicable
final Price of Inventory, as determined pursuant to the procedures set
forth in Exhibit A, and notify Buyer in writing of such determination.
Within two Business Days of the giving of such notice, either Buyer or
Seller, as applicable, shall pay to the other Party the amount required to
reconcile and adjust the 90% of the Estimated Price of Inventory paid at
Closing to the Price of Inventory; provided, however, that in the event
Buyer disputes Seller's determination of the final quantities of
Inventory, Buyer shall provide written notice to Seller within two
Business Days, and Buyer and Seller shall endeavor in good faith and with
reasonable diligence, to resolve the said dispute through discussions. If
the Inventory dispute has not been resolved through discussions between
the Parties' within 30 days after the Closing Date, then said Inventory
dispute shall be resolved by arbitration in Dallas, TX, before Deloitte &
Touche LLP (the "Independent Accountants"). The Independent Accountants
shall conduct such arbitration and perform their services in compliance
with the provisions and guidelines of this Agreement, as expeditiously as
possible, and deliver to Buyer and Seller a written statement describing
in detail their findings and rationale for its award or decision, the
results of which shall be final and binding upon Buyer and Seller and not
subject to challenge; provided, however, that the calculation of or
determination by the Independent Accountants with respect to the value of
the Inventory as of the Closing Date shall be no less than the amount
16
asserted by Buyer and no more than the amount asserted by Seller. The fees
and expenses of the Independent Accountants for the resolution of the
dispute shall be shared equally by Buyer and Seller. Within two Business
Days of receipt of the written statement from the Independent Accountants,
either Buyer or Seller, as applicable, shall pay to the other Party the
amount required to reconcile and adjust the 90% of the Estimated Price of
Inventory paid at closing to the Price of Inventory as determined by the
Independent Accountants.
2.4 ESCROW DEPOSIT. As security for the fulfillment of the Agreement by Buyer,
Buyer will upon the execution of this Agreement post with the Escrow Agent the
Escrow Deposit pursuant to the terms of the Escrow Agreement attached hereto as
Exhibit B (the "Escrow Agreement"). Buyer and Seller agree that the Escrow
Deposit shall, as applicable, be either (a) paid to Seller at Closing as part of
the Purchase Price, (b) paid to Buyer upon Seller's termination of this
Agreement to the extent provided in Sections 12.2(b)(i) and (iii), or (c) paid
to Seller upon termination of this Agreement to the extent provided in Section
12.2(b)(ii).
2.5 CASH ON HAND AMOUNT. At Closing, Seller shall provide notice of the amount
of cash contained in cash registers and ATMs located at the Travel Centers (the
"Cash on Hand Amount") and Buyer shall pay the Cash on Hand Amount to Seller
pursuant to Section 2.3(b).
2.6 AS IS, WHERE IS; RISK OF LOSS; CASUALTY LOSS.
(a) AS IS, WHERE IS. The sale and delivery of the Acquired Assets
shall be on an "AS IS, WHERE IS" basis at the time of Closing, subject to
the express representations and warranties and other provisions set forth
in this Agreement.
(b) Risk of Loss. Except as otherwise specifically provided herein,
risk of loss of each of the Acquired Assets shall be borne by Seller
through the Effective Time and shall transfer to the Buyer as of the
Effective Time subject to the occurrence of the Closing.
(c) Casualty Loss or Damage. Any casualty loss, damage or event of
condemnation or takings to any Acquired Asset between the date of this
Agreement and the Effective Time shall be governed by the provisions of
this Section 2.6(c).
(i) In the event of a Total Loss of a single Travel Center
prior to the Effective Time, at Buyer's option, either (A) the
Purchase Price shall be reduced by an amount equal to the allocated
portion of the Purchase Price applicable to the Travel Center
subject to the Total Loss as set forth in Schedule 2.6, reduced by
the allocated value of the land constituting the Real Property,
associated with such Travel Center as set forth on Schedule 2.6, or
(B) the Travel Center subject to the Total Loss shall be deemed an
Excluded Asset and retained by the Seller and the Purchase Price
shall be reduced by an amount equal to the allocated portion of the
Purchase Price applicable to the Travel Center subject to the Total
Loss as set forth in Schedule 2.6. It being understood that the
amounts set forth on Schedule 2.6 shall apply only with respect to a
reduction in the Purchase Price under this Section 2.6, and such
amounts shall not relate to any other purposes, Including any
allocation pursuant to Section 2.7.
(ii) The Purchase Price shall not be reduced in the event any
of the Acquired Assets sustains a casualty loss, condemnation or
other damage prior to Closing that does not constitute a Total Loss,
it being understood and agreed that the sale and purchase of the
Acquired Assets shall be, subject to the conditions of this
Agreement, on an "AS IS, WHERE IS" basis at Closing. However, in the
event of a casualty loss or takings of or
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damage to an Acquired Asset prior to the Effective Time that does
not constitute a Total Loss, Seller, at its option, shall (i) repair
such Acquired Asset in compliance with applicable Legal Requirements
and policies of insurance and to the reasonable satisfaction of
Buyer prior to Closing, whenever it would be consistent with
Seller's past practices in the Ordinary Course of Business, or (ii)
to the extent such repairs have not been effected prior to Closing,
Seller shall assign to Buyer (x) all insurance proceeds or
condemnation awards actually received by Seller on account of such
loss of or damage, save and except insurance proceeds or
condemnation awards covering amounts then expended by Seller to
repair such Acquired Asset (with Seller bearing any deductible), or
(y) any Insurance Claim or claim against a third party or
condemnation authority relating to such casualty loss or takings
under Seller's insurance policies; save and except to the extent
that such Insurance Claim, third party claim or condemnation award
covers amounts expended by Seller to repair such Acquired Asset
(with Seller bearing any deductible).
(iii) Following exclusion of a Travel Center as a result of a
Total Loss under Section 2.6(c)(i) above, in the event that any
other Total Loss and/or other loss, taking or casualty asserted
pursuant to this Section 2.6 with respect to all other Travel
Centers, together with any amounts relating to Uncured Title Matters
asserted pursuant to Section 5.19(d) with respect to all other
Travel Centers, exceeds $5,000,000 in the aggregate, then Buyer, at
its sole option, may (i) terminate this Agreement pursuant to
Section 12.1(a)(v), or (ii) elect to reduce the Purchase Price by
the amounts asserted pursuant to this Section 2.6, together with all
amounts asserted pursuant to Section 5.19(d) with respect to such
other Travel Centers. In the event that such Total Loss, other loss,
taking or casualty asserted pursuant to this Section 2.6 with
respect to such other Travel Centers, together with any amounts
asserted pursuant to Section 5.19(d) with respect to such other
Travel Centers, does not exceed $5,000,000, then the Purchase Price
shall be reduced by an amount equal to the sum of (i) all amounts
allocated to such Total Loss, other loss, taking or casualty with
respect to such other Travel Centers, and (ii) all amounts asserted
pursuant to Section 5.19(d) with respect to such other Travel
Centers, and Buyer shall not have any right to terminate the
Agreement pursuant to this Section 2.6(c)(i).
2.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated on an
estimated basis among the Acquired Assets on a site-specific Travel Center basis
(Including the land constituting the Real Property), in accordance with Schedule
2.7 which shall be prepared by Buyer and Seller on or prior to Closing. The
Seller and the Buyer agree to prepare and file all federal, state, local and
foreign income tax returns and other filings reflecting the transactions
contemplated by the Agreement on a basis consistent with such allocation.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1 ORGANIZATION, STANDING AND POWER. Seller is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Texas, and
is duly qualified to do business and is in good standing in all jurisdictions in
which the nature of its business or the ownership of its properties or both
makes such qualification necessary (as disclosed on Schedule 3.1). Seller has
the requisite power and authority to own, lease, operate and transfer its
properties, Including the Acquired Assets, and to conduct the Business as
currently conducted. Seller has no subsidiaries.
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3.2 AUTHORITY FOR AGREEMENT. Each of Seller Parent and Seller has all corporate
power and authority to enter into this Agreement, and to carry out the
transactions contemplated hereby, and its obligations hereunder. The execution
and delivery of this Agreement by each of Seller Parent and Seller, the
performance of its obligations pursuant to this Agreement, and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action, and do not and will not directly or indirectly
contravene or conflict with any provision of the articles of incorporation or
bylaws of each of Seller Parent and Seller. No further actions on the part of
Seller Parent or Seller is necessary to authorize the Agreement and the
transaction contemplated hereby. The officer executing the Agreement on behalf
of each of Seller Parent and Seller has been duly authorized by the board of
directors of Seller Parent and Seller to execute the Agreement and to consummate
the transactions contemplated hereby. The Agreement has been duly and validly
executed and delivered by each of Seller Parent and Seller and (assuming the
valid authorization, execution, and delivery of the Agreement by Buyer Parent
and Buyer) is a valid and binding obligation of each of Seller Parent and
Seller, enforceable against it in accordance with its terms. The Shareholders
are all of the shareholders of Seller Parent.
3.3 CONSENTS AND APPROVALS. Except as set forth on Schedules 3.3 and 3.11, and
except for (i) filings of deeds and memoranda of leases in the real property
records of the counties where the Real Property is located, (ii) transfers of
the certificates of title of the Vehicles in the appropriate state agencies
where the Vehicles are titled, (iii) filings of applications for Permits
relating to the ownership or operation of the Business and the Acquired Assets
required to be made by Buyer, (iv) any required approvals under the HSR Act, and
(v) except for notices or Consents the failure of which to obtain would not
result in a material adverse effect on the Business or the Acquired Assets, no
notice to or Consent of, or filing with any Governmental Body or other Person is
required for the execution or delivery of the Agreement by the Seller or for the
performance of its obligations hereunder or the consummation of the transactions
contemplated hereby, or, if required, all such notices to, Consents of or
filings will be duly made or obtained prior to Closing.
3.4 NO BREACH. The execution and delivery of the Agreement and the performance
of its obligations hereunder and the consummation of the transactions
contemplated hereby do not and will not, directly or indirectly, contravene or
conflict, directly or indirectly, with or result in a Breach or violation of any
provision of, constitute a default or an event which with notice or passage of
time or both would constitute a default under, or give rise to a right of
termination, cancellation, or acceleration of indebtedness under, (i) any
material Contract to which Seller is a party or by which the Acquired Assets may
be bound or which would result in the creation of an Encumbrance on any Acquired
Asset; or (ii) any material Legal Requirement, Order or Permit applicable to
Seller or the Acquired Assets, or give any Governmental Body or other Person the
right to challenge any of the transactions contemplated hereby or to exercise
any remedy or obtain any relief under, any Legal Requirement to which Seller or
any of the Acquired Assets may be subject. Except as disclosed in Schedule 3.6,
there are no pending, or to Seller's Knowledge, there are no threatened disputes
with respect to any of the Assigned Contracts that could result in a material
adverse effect on the Business or the Acquired Assets.
3.5 FINANCIAL STATEMENTS.
(a) Attached hereto and incorporated herein by reference in Schedule
3.5(a) are true, correct and complete copies of: (i) the balance sheets of
Seller as of January 31, 2004 and 2003, and the related statements of
earnings, stockholders' equity, and cash flows for the years then ended
and the related footnotes thereto, all of the foregoing audited by ▇▇▇▇▇▇▇
and ▇▇▇▇▇, LLP, certified public accountants (the "Audited Statements");
(ii) the unaudited balance sheets of Seller as of July 31, 2004 and 2003,
and the related income statement and statements of cash flows and of
stockholders' equity for the six month periods then ended (the "Interim
Statements"); and (iii) the Seller's Financial Statements. The Audited
Statements, Interim Statements and the Seller's
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Financial Statements are collectively referred to as the "Financial
Statements." The Financial Statements were prepared from Seller's books of
account.
(b) The Audited Statements and Interim Statements were prepared in
accordance with GAAP, consistently applied, and present fairly, in all
material respects, the financial position of Seller as of the dates
indicated and the results of operations for the periods then ended,
subject, in the case of the Interim Statements, to customary year end and
audit adjustments of a normal, recurring type which would not be material
in the aggregate and the absence of footnote disclosure.
(c) The Seller's Financial Statements accurately show, in all
materials respect, the operating results of the Acquired Assets and the
Business, adjusted for interest, Taxes, depreciation and administrative
expenses (as supplemented by schedules showing rebate income, income from
ATMs and dues paid to AMBEST), for the periods covered thereby.
(d) Attached hereto as Schedule 3.5(d) is a reconciliation of the
audited statement of earnings for the fiscal year ended January 31, 2004
and the portion of the Seller's Financial Statements related to the fiscal
year ended January 31, 2004 and such reconciliation is true, complete and
correct in all material respects, based on the assumptions and other
disclosures set forth therein.
3.6 COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) Except for Environmental Matters set forth in Section 3.7, and
except as set forth on Schedule 3.6, Seller has not received notice of any
violation of and is in material compliance with all Legal Requirements
applicable to the operation of the Acquired Assets and the Business.
(b) Schedule 3.6, sets forth a listing of all pending, and to the
Seller's Knowledge, threatened Proceedings at law or in equity, against
Seller relating to the operation of the Acquired Assets or the Business,
(collectively the "Actions"). There are no Proceedings at law or in equity
pending, or to Seller's Knowledge, threatened against Seller Parent or
Seller which would materially affect the ability of either Seller Parent
or Seller to perform its obligations under this Agreement. Except as set
forth on Schedule 3.6, there are no outstanding Orders against, involving,
or affecting the Business, or any Acquired Asset.
3.7 ENVIRONMENTAL MATTERS. Except as set forth in Schedule 3.7:
(a) Seller has complied, in all material respects, with all
Environmental Laws and Occupational Safety and Health Laws pertaining to
the operation of the Acquired Assets and the Business, Including, to
Seller's Knowledge, payment of all fees and other amounts required under
applicable Environmental Law in order for Seller to be entitled to
compensation or other financial assistance from any storage tank or other
governmental program which provides reimbursement for Cleanup expenses.
(b) Seller has filed, obtained, has complied with, in all material
respects, all Permits required by Environmental Laws and Occupational
Safety and Health Laws for the ownership or operation of the Acquired
Assets or the Business, Including those required for the treatment,
storage, disposal or Release of Materials of Environmental Concern to the
Environment.
(c) There are no pending or, to Seller's Knowledge, threatened
Claims, citations, demands, Actions, Orders, agreements, notices of
violation, notice of potential liability,
20
investigations, requests for information, administrative proceedings or
other communications against Seller that are in any way related to the
Business or the Acquired Assets under or pursuant to Environmental Laws
and/or Occupational Safety and Health Laws.
(d) Seller is not subject to any outstanding injunction, judgment,
order, decree, settlement or compliance schedule or ruling under or
pursuant to Environmental Laws and/or Occupational Safety and Health Laws
related to the Business or the Acquired Assets.
(e) No Cleanup is being conducted or planned or is reasonably
expected to be required or necessary under Environmental Law at or on any
of the Acquired Assets.
(f) Seller has provided Buyer with copies of all environmental,
health or safety reports, audits, studies, assessments, inspections,
investigations or other environmental, health or safety reports relating
to the operation of the Acquired Assets or the Business, and pertaining to
any Environmental Law for which the Business is or may be held
responsible, that are in the possession, custody or control of Seller.
(g) Seller has not conducted any Treatment or Disposal of any
Hazardous Material at, on or under any Real Property, nor to Seller's
Knowledge, has any such Treatment or Disposal been conducted by any other
Person at, on or under any Real Property.
(h) There are no underground storage tanks, retention ponds, or, to
Seller's Knowledge, any landfills that were used by the general public
located at the Travel Centers.
(i) To Seller's Knowledge, Seller has not sent any Materials of
Environmental Concern to a site that, pursuant to any Environmental Law,
has been placed or proposed for placement on the National Priorities List
or any similar state list or is subject to any Order from any Governmental
Body to take "removal," "response," "corrective" or other remedial action
to pay for the cost of any such action at a site under Environmental Law.
Schedule 3.7 identifies all known EHS Liabilities of Seller or the Business.
This Section 3.7 includes the sole and exclusive representations and warranties
with respect to matters relating to the Environment under this Agreement and no
other representation or warranty shall be construed to cover such matters.
3.8 TANGIBLE ACQUIRED ASSETS. Schedules 2.1(a)(ii) and (iv) list the material
tangible assets owned by Seller and relating to the Business, other than the
Real Property and the Inventory. Except as described on Schedule 3.8, Seller has
good title to such assets, and is in possession of same, in each case free and
clear of all Encumbrances, except for Permitted Encumbrances.
3.9 REAL PROPERTY.
(a) Schedule 2.1(a)(i)(x) identifies the parcels of Real Property
that constitute the Owned Real Property, and sets forth, in all material
respects, the legal description of the Owned Real Property. The Owned Real
Property constitutes all of the real property together with all rights,
title and interest of Seller in and to the buildings, structures and
improvements located thereon, and all rights, licenses, permits,
easements, rights-of-way and appurtenances belonging thereto, owned by
Seller that is used or held for use in connection with the Business.
Seller is in possession of all Owned Real Property, Seller has good,
marketable and insurable (to the extent provided in the Title Policies)
title in fee simple to such Owned Real Property free and clear of all
Encumbrances except for Permitted Encumbrances.
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(b) Schedule 2.1(a)(i)(y) identifies the parcels of Real Property
that constitute the Leased Real Property, lists the Lease relating to such
Leased Real Property and sets forth, in all material respects, the legal
description of the Leased Real Property. Seller has a valid and subsisting
leasehold estate and the right to quiet enjoyment of the Leased Real
Property (pursuant to written lease agreements), subject to Permitted
Encumbrances. The Leased Real Property constitutes all Real Property
leased to Seller that is used or held for use in connection with the
Business. Each Lease, subject to the Permitted Encumbrances, is in full
force and effect; all rents and additional rents due to date pursuant to
each Lease have been paid in full; there is no existing default by Seller
or, to Seller's Knowledge, Landlord or any other party to such Leases,
Seller has not received any notice that it is in default under any Lease;
and to Seller's Knowledge, there exists no event, occurrence, condition or
act (including the transactions contemplated by this Agreement), that with
the giving of notice, the lapse of time or the happening of any further
event or condition, would become a default by Seller under any Lease
(c) Neither the whole nor any portion of the Real Property has been
condemned, requisitioned, or otherwise taken by any public authority, and
no written notice of any such condemnation, requisition, or taking has
been received by Seller. To Seller's Knowledge, no such condemnation,
requisition, or taking is threatened or contemplated.
(d) Except as set forth in Schedule 3.9, to Seller's Knowledge (i)
excluding compliance with Environmental Laws, which is addressed in
Section 3.7, the Real Property is in compliance in all material respects
with all applicable Legal Requirements, (ii) the zoning of each parcel of
Real Property permits the existing improvements and uses and the
continuation following consummation of the transactions contemplated
hereby of the Business as presently conducted thereon, and (iii) Seller
has all licenses, certificates of occupancy, permits, and authorizations
materially necessary to conduct the Business as currently conducted by
Seller and Seller has not received any written notice of violations in
connection with such items.
(e) Seller has delivered or made available to Buyer copies of all
existing deeds, leases, mortgages, deeds of trust, certificates of
occupancy, title reports and surveys relating to the Real Property that
are within Seller's possession or control. Except as set forth in Schedule
3.9, to Seller's Knowledge, the buildings, plants, and structures at the
Real Property do not encroach upon the property of, or otherwise conflict
with the superior property rights of, any other Person to the extent that
the value or use (in the manner in which it is currently being used by
Seller) of the subject Real Property is materially and adversely affected
thereby.
(f) To Seller's Knowledge, there are no public improvements proposed
or in progress that will result in special assessments against or
otherwise adversely affect any of the Real Property. Seller has not been
notified in writing of future improvements by any public authority, any
part of the cost of which would or might be asserted against any of the
Real Property. To Seller's Knowledge, all of the streets, roads and
avenues adjoining and/or adjacent to the Real Property are publicly owned
and maintained without assessment or charge to Seller. To Seller's
Knowledge, no fact or condition exists which would result in the
termination or impairment of access to the Real Property. Seller has not
received any written notice relating to the material disconnection of
sewer, water, electrical, gas, telephone or other utilities at the Travel
Centers.
(g) Except as set forth on Schedule 3.9, no Real Property is subject
to any options, purchase or sale contracts, leases or rights of occupancy
or other agreements not otherwise identified in this Agreement, and from
the date hereof until the Closing Date, Seller will not do,
22
commit or suffer to be done any act or thing, or enter into any agreement
other than with Buyer, which could adversely affect Seller's present title
or interest to the Real Property.
(h) Schedule 3.9(h) sets forth any and all real property that is
owned or leased by Seller, Seller Parent or any of their Affiliates which
is (i) contiguous to the Real Property, or (ii) within a 10 mile radius of
any Real Property and larger than five acres.
3.10 PERMITS. To Seller's Knowledge, set forth on Schedule 3.10 is a list of
all material Permits for each Travel Center. Seller (i) maintains, with respect
to the Business and the Acquired Assets, all Permits materially necessary in
connection with the ownership or operation thereof, (ii) has complied in all
material respects with all conditions and requirements imposed by such Permits,
and (iii) has not received any written notice that any appropriate authority
intends to cancel, terminate, or suspend any of such Permits.
3.11 CONTRACTS. Schedule 2.1(a)(v) lists all of the Assigned Contracts. The
Assigned Contracts Include all existing Contracts relating to the Business and
the Acquired Assets (Including the Leases, but excluding any loan agreements or
other financing agreements that will be retained by the Seller), that have a
term greater than 12 months or require payments to, or payments by, Seller in
excess of $25,000 annually. Seller has made available to Buyer copies of all
Assigned Contracts, including all amendments thereto. Except as set forth on
Schedule 3.11 and except for the Leases which are covered by Section 3.9(b), all
of the Assigned Contracts are in full force and effect. None of the Assigned
Contracts, except for the Leases which are covered by Section 3.9(b), has been
terminated, except as set forth on Schedule 3.11, nor has written notice of
termination been given to Seller with respect thereto, and except as set forth
in Schedule 3.11, no written notice has been given by any party thereto of any
alleged default thereunder by any party thereto. Except as set forth on Schedule
2.1(a)(v), no Consent of any Person is required to assign the Assigned Contracts
to Buyer.
3.12 TAXES. Except as set forth on Schedule 3.12, Seller has filed in a timely
manner all tax reports, returns and forms affecting the Acquired Assets or the
Business as may have been required under applicable law, Including all required
federal, state and local income, sales, use, property (real or personal) and
franchise tax returns, and has paid (except amounts for taxes being diligently
contested in good faith by appropriate procedures and disclosed in Schedule 3.12
and for which adequate reserves have been established) all required Taxes or
similar assessments affecting the Acquired Assets or the Business, Including any
interest, penalties or additions attributable thereto. Taxes which Seller was
required by law to withhold or collect in respect to the Acquired Assets or the
Business have been withheld or collected and have been paid over to the proper
Governmental Body or are properly held by Seller for such payment when due and
payable.
3.13 ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule 3.13, since
January 31, 2004:
(a) Seller has conducted the Business only in the Ordinary Course of
Business;
(b) Seller has not permitted or allowed any of the Acquired Assets
to be subjected to any Encumbrances, except for Permitted Encumbrances,
not otherwise disclosed in the Disclosure Schedules;
(c) Seller has not sold, transferred, or otherwise disposed of any
assets used in the Business, except for Inventory sold in the Ordinary
Course of Business;
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(d) Seller has not granted any increase in compensation or benefits
or granted any bonus to any Employee, except for increases in wages or
salary in the Ordinary Course of Business;
(e) Seller has not changed its methods of accounting in effect at
January 31, 2004, except as permitted pursuant to any actions taken
pursuant to Section 5.20 of this Agreement; and
(f) Seller has not committed or agreed to do any of the foregoing.
3.14 INSURANCE. Schedule 3.14 sets forth a list of all insurance policies
issued in favor of the Seller, or pursuant to which Seller is named insured or
otherwise beneficiary, that relate to any of the Acquired Assets or the
Business. All policies listed in Schedule 3.14 are in full force and effect, all
premiums due thereon have been paid and Seller has complied in all material
respects with the provisions of such policies.
3.15 EMPLOYEES AND EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.15 sets forth a list of all Employees, Including
their position, and hire date and credited period with Seller for purposes
of determining measurements of eligibility, waiting periods and vacation
allowances. Seller has provided Buyer with an accurate listing of each
such Employee's current salary or hourly rate, together with a description
of their benefits, to the extent such disclosures are allowed under
applicable law.
(b) Schedule 3.15 sets forth a complete and correct list of all
Employee Benefit Plans maintained or contributed to by Seller or any
Affiliate of Seller in respect of or for the benefit of the Employees or
former employees with respect to which Seller or any of its Affiliates may
have any liability and which could become after the Closing Date, an
obligation of Buyer.
(c) None of Seller's employees have been, nor are any of the
Employees represented by a labor union or labor organization and there are
no threatened or contemplated attempts by such employees to organize for
collective bargaining purposes.
(d) Seller has maintained and operated the Employee Benefit Plans,
in all material respects, in compliance with applicable Legal
Requirements, including any requirements under ERISA.
(e) Neither Seller, nor any of its Affiliates, participates or
contributes to (nor at any time has participated in or contributed to) any
multiemployer plan (as defined in Section 3(37) or 4001(a)(3) of ERISA) or
any defined benefit plan (as defined in Section 3(35) of ERISA).
(f) Neither Seller, nor any of its Affiliates, has any commitment to
any employee or former employee to provide any post-retirement welfare
benefit other than liability for coverage mandated by applicable Legal
Requirement, including continued medical coverage required under COBRA,
the premiums for which are borne by such employee or former employee.
(g) Seller's existing 401(k) Plan currently satisfies in all
material respects, and has at all times since its inception satisfied in
all material respects, the qualification requirements under Code Section
401(a), and the trust related to Seller's 401(k) Plan is, and at all times
has been, tax exempt under Code Section 501(a).
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(h) Since July 1, 2004, there has been no "mass layoff" or "plant
closing" at any Travel Center (as such terms are defined in the WARN Act).
3.16 BROKERAGE FEES. Except as set forth in Schedule 3.16, no Person acting on
behalf of Seller is entitled to any brokerage or finder's fee or commission in
connection with the transactions.
3.17 SUFFICIENCY. Except for the Excluded Assets, the Acquired Assets
constitute all of the assets materially necessary for the operation of the
Business.
3.18 INTERCOMPANY AGREEMENTS. Schedule 3.18 sets forth all contracts or
agreements between Seller, on the one hand, and Seller Parent, any Affiliates of
Seller Parent and any Affiliates of Seller, on the other.
ARTICLE IV- REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller as follows:
4.1 ORGANIZATION, STANDING AND POWER. Each of Buyer Parent and Buyer is a
corporation, duly organized, validly existing, and in good standing under the
laws of the State of Delaware, and is duly qualified to do business and is in
good standing in all jurisdictions in which the nature of its business or the
ownership of its properties or both makes such qualification necessary.
4.2 AUTHORITY FOR AGREEMENT. Each of Buyer Parent and Buyer has all corporate
power and authority to enter into the Agreement and to carry out the
transactions contemplated hereby, and its obligations hereunder. The execution
and delivery of the Agreement by each of Buyer Parent and Buyer, the performance
of its obligations pursuant to this Agreement, and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action, and do not and will not directly or indirectly contravent or
conflict with any provisions of the certificate of incorporation or bylaws of
each of Buyer Parent and Buyer. No further actions on the part of each of Buyer
Parent and Buyer is necessary to authorize the Agreement and the transactions
contemplated hereby. The officer executing the Agreement on behalf of each of
Buyer Parent and Buyer has been duly authorized by the Board of Directors of
Buyer Parent and Buyer to execute the Agreement and consummate the transactions
contemplated hereby. The Agreement has been duly and validly executed and
delivered by each of Buyer Parent and Buyer and (assuming the valid
authorization, execution, and delivery of the Agreement by Seller Parent and
Seller) is a valid and binding obligation thereof, enforceable against it in
accordance with its terms.
4.3 ABSENCE OF BREACH; CONSENTS AND APPROVALS. Except for any required
approvals under the HSR Act, no notice to or approval or Consent of, or filing
with, any third party or Governmental Body is required for the execution or
delivery of the Agreement by either Buyer Parent or Buyer or for the performance
of its obligations hereunder. The execution and delivery of the Agreement do
not, and the consummation of the transactions contemplated hereby will not
result in a breach or violation of any provision of, constitute a default, or an
event which with notice or passage of time or both would constitute a default
under, or give rise to a right of termination, cancellation, or acceleration of
indebtedness under, any material Contract or any material Legal Requirement to
which either Buyer Parent or Buyer is a party or by which it or its property is
bound.
4.4 ADEQUATE RESOURCES. Buyer has adequate cash resources on hand or pursuant
to binding and enforceable written agreements, which are disclosed on Schedule
4.4, to consummate the transactions contemplated by this Agreement and fulfill
all of its obligations under this Agreement subject to the satisfaction of any
conditions contained in the written agreements disclosed on Schedule 4.4.
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4.5 CLAIMS, LITIGATION. There are no claims, demands, actions, suits or other
Proceedings at law, or in equity, or to Buyer's Knowledge, threatened against
Buyer which would materially affect Buyer's ability to perform its obligations
under this Agreement.
4.6 BROKERAGE FEES. Except as set forth in Schedule 4.6, no Person acting on
behalf of Buyer is entitled to any brokerage or finder's fee or commission in
connection with the transactions contemplated by this Agreement.
4.7 BUYER'S INVESTIGATION. Except as may be otherwise provided in this
Agreement, Buyer acknowledges that it is accepting the Acquired Assets in their
present condition and locations and with their present operating capabilities.
Buyer acknowledges that Seller makes no warranty, express or implied concerning
the Acquired Assets or the Business except as expressly set forth in this
Agreement. Buyer has not relied upon, and Seller shall not be liable for or
bound in any manner by, any express or implied verbal or written information,
warranties, guarantees, promises, statements, inducements, representations or
opinions except as may be contained in this Agreement and certificates delivered
hereunder. Buyer acknowledges that it is knowledgeable in the business and
industry of operating travel centers similar to the Travel Centers and the
Business.
ARTICLE V- ADDITIONAL AGREEMENTS
5.1 ACTIONS PRIOR TO CLOSING. Seller shall operate the Acquired Assets and the
Business prior to the Closing only in the Ordinary Course of Business. During
such period, Seller shall use commercially reasonable efforts to (i) preserve
intact its relationships with Persons having business dealings with Seller, and
(ii) maintain the Travel Centers (Including making necessary repairs where
Seller would typically do so in the Ordinary Course of Business). Without
limiting the generality of the foregoing, Seller shall not, without the prior
written consent of Buyer, undertake any of the following actions:
(a) enter into any new Contract binding any material portion of the
Acquired Assets subsequent to the Closing or release or relinquish any
Assigned Contract, except in the Ordinary Course of Business;
(b) permit or allow any of the Acquired Assets to be subjected to
any Encumbrances, except for Permitted Encumbrances;
(c) sell, transfer, or otherwise dispose of all or any portion of
the Acquired Assets, except for Inventory sold in the Ordinary Course of
Business;
(d) (i) increase in any manner the rate of compensation of any of
its employees, other than normal scheduled increases using standards
consistent with past practice or in the Ordinary Course of Business, or
(ii) pay or agree to pay, other than those explicitly agreed to by Buyer,
any bonus, pension, retirement allowance, severance or other employee
benefit not required or permitted by any existing Employee Benefit Plan or
in the Ordinary Course of Business;
(e) change any accounting procedures or practices or its financial
structure, except for any actions taken pursuant to Section 5.20 of this
Agreement;
(f) take any action to accelerate the generation of revenues beyond
the level that would result from operations in the Ordinary Course of
Business or take any action the taking of which, or omit to take any
action the omission of which, would cause any of the representations and
warranties herein to fail to be true and correct in all respects as though
made at and as of the date of such action or omission; or
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(g) agree or commit to do any of the foregoing.
5.2 COOPERATION. Buyer and Seller agree:
(a) until the Closing, Buyer and Seller shall use their reasonable
good faith efforts to perform and fulfill all conditions and obligations
to be fulfilled or performed by them hereunder, to the end that the
transactions contemplated hereby will be fully and timely consummated;
(b) if any event should occur, within the knowledge and control of
any Party, that would prevent fulfillment of the conditions to the
obligations of any Party hereto to consummate the transactions
contemplated by the Agreement, to use its or their reasonable efforts to
cure the same as expeditiously as possible;
(c) to deliver such other instruments of title, certificates,
endorsements, assignments, assumptions and other documents or instruments,
in form reasonably acceptable to the Party requesting the same and its
counsel, as may be reasonably necessary to carry out and/or to comply with
the terms of the Agreement and the transactions contemplated herein; and
(d) to confer on a regular basis with each other, report on material
operational matters, and promptly advise each other orally and in writing
of any change or event having, or which, insofar as can reasonably be
foreseen, could have a material adverse effect on either Party or which
would cause or constitute a material breach of any of the representations,
warranties, or covenants of any Party contained herein, provided, however,
that neither Party nor any of their Affiliates shall be required to
disclose any material nonpublic information relating to such Party or such
Affiliates for which such Party or Affiliate is prohibited from disclosing
under applicable United States securities laws.
5.3 ACCESS. Until the Closing, and subject to Sections 5.2 and 5.18 hereof,
Seller shall give Buyer and Buyer's Representatives reasonable access, upon
reasonable notice and at reasonable times, to the Acquired Assets and to
Seller's executive management team, in order that Buyer may have opportunity to
make such examination and investigation as it may reasonably request, Including
(a) physical inspections of the Acquired Assets, (b) undertaking surveys of the
Real Property and (c) undertaking a Phase I environmental report at Buyer's sole
expense (it being understood that Buyer shall not be permitted to undertake any
Phase II environmental report). Buyer's access shall not unreasonably interfere
with Seller's continuing operation of the Business and shall be subject to
Seller's customary safety and security policies. Except as specifically set
forth herein, without Seller's prior consent (which shall not be unreasonably
withheld, delayed or conditioned; provided, however, that Seller shall not
consent to any Phase II environmental report), Buyer may not conduct any other
analysis or testing of any of the Acquired Assets or at any of the Travel
Centers. Buyer's contacts with Seller's employees shall remain subject to
guidance and control by Seller's management, and Seller shall not discuss future
employment issues with any such employee without prior notice to and consent by
Seller, which shall not be unreasonably withheld. Seller shall furnish Buyer's
representatives during such period with all such information in Seller's
possession or control as such representatives may reasonably request concerning
the Acquired Assets and the Business and instruct Seller's respective officers,
employees, consultants, agents, accountants, and attorneys to cooperate fully
with Buyer's representatives in connection with such review and examination;
provided however, that Buyer and Buyer's Representatives shall hold the
documents and information concerning Seller, the Acquired Assets and the
Business confidential in accordance with Section 5.10 hereof.
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5.4 INSURANCE. Until the Closing, Seller shall maintain insurance on each of
the Acquired Assets which is insured on the date of this Agreement, providing
substantially the same coverage with respect to each such Acquired Asset as is
currently in force.
5.5 COMPLIANCE WITH LAWS. Until the Closing, Seller shall use the Acquired
Assets in compliance in all material respects with all applicable Legal
Requirements.
5.6 KEEPING OF BOOKS AND RECORDS. Until the Closing, Seller shall keep records
and books of account with respect to the Business and the Acquired Assets
consistent with Seller's past practice.
5.7 LITIGATION. Until the Closing, Seller shall promptly notify Buyer of any
Actions relating either to the Business or any Acquired Asset, or to the Seller
in connection with the Business or any Acquired Asset, that are served on
Seller, or to Seller's Knowledge are threatened, or anticipated against or by
the Seller.
5.8 EMPLOYEES. At the time of Closing, Buyer shall, subject to such Employees
satisfying Buyer's reasonable standard employment requirements, (i) offer
employment to the Employees at substantially the same salaries paid to such
Employees prior to the Closing and (ii) provide to such Employees benefits
comparable to those benefits provided to employees of Buyer in comparable
positions. Any such offer shall be made effective as of the Closing Date with
respect to active Employees on such date. Employees accepting employment with
Buyer ("Transferred Employees") shall be credited for time of service with
Seller for measurements of eligibility, waiting periods, vesting purposes and
vacation allowance. Seller shall be responsible for termination of any existing
employment agreements, severance payments, pension or other employment
obligations related to past service for all employees of Seller, whether or not
offered employment by Buyer. Buyer shall be responsible for any obligations
under the WARN Act with respect to the Employees following the Closing Date.
5.9 CONSENTS. For any Assigned Contract or Permit which is subject to a
Consent, Seller shall use commercially reasonable efforts, and Buyer shall
provide commercially reasonable cooperation to Seller, to obtain all Consents
required to effect assignment thereof to Buyer as of the Closing Date.
Notwithstanding the foregoing, Buyer shall not be required to pay or contribute
to any consent fee required by any third party and Seller must obtain the
Consents listed on Schedule 5.9 as a condition to Closing. For all other
Consents, if Seller is unable to obtain the requisite Consent to assignment of
any Assigned Contract or Permit prior to the Closing Date, the obtaining of such
Consent shall not be a condition to Closing, but Buyer and Seller shall continue
to cooperate in good faith and to take all commercially reasonable and necessary
actions, other than the expenditure of money, but Including Seller's performance
of the Retained Obligations, required to assign to Buyer such Assigned Contract
or Permit as soon as practicable after the Closing Date. If Buyer and Seller
should determine that any Consent to assignment to Buyer is reasonably necessary
to the continued operation of the Business either commercially or in accordance
with applicable Legal Requirements, then, except where such action would be
unlawful or prohibited by the affected Contract or Permit, Seller shall retain
the affected Contract or Permit and shall enter into an arrangement with Buyer
to provide Buyer with the benefits of such Contract or Permit until such
Contract or Permit is properly assigned to Buyer or expires at the earliest
opportunity in accordance with its terms, provided, that Buyer shall perform
Seller's obligations thereunder arising after the Closing (and indemnify Seller
against Losses arising in connection therewith after the Closing).
5.10 CONFIDENTIALITY.
(a) From the date of this Agreement, except as required by
applicable Legal Requirements, neither Buyer, nor any of its Affiliates or
their representatives shall, at any time,
28
make use of, divulge or otherwise disclose, directly or indirectly, any
Seller Proprietary Information unless such Seller Proprietary Information:
(i) is or becomes generally available and known to the public; (ii) is
rightfully received by Buyer and any of its representatives, agents or
Affiliates from any Person, without restriction on use or disclosure and
without breach of any obligation to Seller or any of its representatives,
agents or Affiliates; (iii) is independently developed by or for Buyer
without reference to or use of Seller Proprietary Information; or (iv) is
the subject of prior written approval of Seller.
(b) If Buyer is required by any court or legislative or
administrative body (by oral questions, interrogatories, request for
information or documents, subpoena or similar process) to disclose any
Seller Proprietary Information, Buyer shall provide Seller with prompt
notice of such requirement in order to afford Seller an opportunity to
seek an appropriate protective order. Buyer shall cooperate with Seller in
an effort to obtain such a protective order, and shall, if appropriate,
allow Seller to intervene or appear in any proceeding in order to protect
the confidentiality of the Seller Proprietary Information. However, if
Seller is unable to obtain or does not seek such a protective order, and
Buyer is, in the opinion of counsel, compelled to disclose the Seller
Proprietary Information under penalty of liability for contempt, censure
or penalty, disclosure of such Seller Proprietary Information may be made
without liability, but only to the extent that Buyer is so compelled to
disclose the Seller Proprietary Information in response to such process.
(c) Notwithstanding anything herein to the contrary, any Party to
this Agreement (and any employee, representative, or other agent of any
Party to this Agreement) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(Including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure; provided, however, any
such information relating to the tax treatment or tax structure shall be
kept confidential to the extent necessary to comply with any applicable
federal or state securities laws.
(d) The foregoing notwithstanding, Buyer's obligations of
confidentiality as set forth in the Confidentiality Agreement between
Buyer and Seller shall survive and continue until the Closing Date and, if
the Closing does not occur, such obligations shall survive and continue in
accordance with the terms of such Confidentiality Agreement.
(e) For the purposes of this Section 5.10, "Seller Proprietary
Information" means any and all information regarding Seller, not relating
to the Acquired Assets and the Business, together with all information
relating to the Excluded Assets or the Retained Obligations under this
Agreement, which has not been or is not generally made available to the
public by Seller prior to the Closing Date.
(f) The Parties acknowledge that any breach of this Section 5.10
could result in irreparable harm that might not be adequately compensated
by damages, and expressly recognize Seller's right to immediate injunctive
relief in the event of the breach of this Section 5.10, in addition to any
and all other remedies and damages available to Seller at law or in
equity.
5.11 BROKERS FEES. Seller shall be responsible for and shall pay any financial
advisory fee, brokerage commission, finder's fee, or like payment payable to any
broker, agent, advisors, or other Persons acting on behalf of Seller or under
their authority in connection with the transactions contemplated hereby. Buyer
shall be responsible for any such similar fees payable to any financial advisor
acting on behalf of Buyer.
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5.12 SUPPLEMENTAL DISCLOSURES.
(a) Between the date of the Agreement and the Closing Date, Seller
will promptly notify Buyer in writing if there occurs, after the date of
this Agreement, any event, fact, or condition, Including a Total Loss or
other loss or casualty that causes or constitutes a Breach of any of
Seller's representations and warranties as of the date of this Agreement,
or if Seller becomes aware, of the occurrence after the date of this
Agreement of any fact or condition, Including a Total Loss or other loss
or casualty, that would cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made
as of the time of occurrence or discovery of such fact or condition.
Should any such fact or condition require any change in any of the
Disclosure Schedules if the Disclosure Schedules were dated the date of
the occurrence or discovery of any such fact or condition, Seller will
promptly deliver to Buyer a supplement to the Disclosure Schedules
specifying such change. During the same period, Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of Seller in
this Article V or of the occurrence of any event that may prevent
satisfaction of the conditions in Article VII or Article VIII.
(b) From the date hereof through and Including the Closing Date,
Buyer agrees to notify Seller promptly if any representation or warranty
of Buyer in this Agreement is not true and correct in all material
respects.
(c) If any of the Assigned Contracts, other than a Contract listed
on Schedule 5.9, should expire or be terminated under its provisions prior
to Closing, other than as a reason of a default by Seller, then Seller may
amend Schedule 2.1(a)(v) to reflect such change. Seller may add to
Schedule 2.1(a)(v) any new or replacement Contracts entered into by Seller
prior to Closing, in the Ordinary Course of Business, other than any
agreements with (i) any Affiliate of Seller, (ii) any agreements whereby
Seller incurs future obligations as settlement of past liabilities, (iii)
any agreements affixing a lien or encumbrance on any of the Acquired
Assets, (iv) any agreements not cancelable by Seller (or Buyer, following
assumption) on 90 days notice. Any new or replacement Contracts added
pursuant to this subsection (c) shall become Assigned Contracts. Seller
may amend Schedule 3.7 to reflect matters revealed in any Phase I
environmental reports performed by Buyer; it being understood that in the
case of such amendments, Buyer shall have the rights set forth in Section
5.12(e) below.
(d) This Section 5.12 shall not apply with respect to any Real
Property title matters, which are governed by Section 5.19.
(e) In the event that any of Seller's updates or supplements to the
Disclosure Schedules pursuant to this Section 5.12 would, individually, or
in the aggregate, have an adverse effect on the financial condition,
results of operations or condition of the Acquired Assets or the Business
(Including its liabilities), the amount of such effect shall be reasonably
calculated (the "Update Amount") and the following shall apply:
(i) to the extent such Update Amount is in excess of $500,000
but not in excess of $5,000,000, the Purchase Price shall be reduced
by an amount equal to the aggregate Update Amount, minus $500,000;
and
(ii) to the extent such Update Amount is in excess of
$5,000,000, then, at Buyer's sole option, (y) the Agreement may be
terminated pursuant to Section 12(a)(v), or (z) the Purchase Price
shall be reduced by an amount equal to the aggregate Update Amount,
minus $500,000.
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5.13 SIGNS AND LOGOS. All interior signs and personal property (excluding
exterior signs) which contain the name (or trade derivative thereof) or logo of
Seller, Including all uniforms supplied to Seller's employees shall be removed
from the Travel Centers within 30 days of the Closing Date by Buyer at Buyer's
sole expense. Within 180 days after Closing, Buyer shall remove Seller's
exterior signs, Including signs on equipment and Vehicles, and all sign fascia
from all pylon, monument or other similar center signs. Buyer shall use
commercially reasonable care to prevent damage to any of the signs or other
personal property that is removed pursuant to this Section 5.13. Buyer shall
store all removed signs and logos and other personal property removed hereunder
in a commercially reasonable manner and Seller shall remove such items from the
Travel Centers within 30 days after receipt of notice from Buyer. An item of
personal property shall not be considered an Excluded Asset by virtue of the
presence of any name (or trade derivative thereof) or other logo of Seller on
such item of personal property, provided that such name or logo, if not
otherwise removable, can be effectively masked. At Closing, Seller shall grant
to Buyer a non-transferable, royalty free, fully paid up, exclusive license to
use all of Seller's rights in the "Country Fare" name for a period of five
years; provided, however, that Seller and/or Seller Parent shall retain the
right to use the Country Fare name for its existing businesses located in
Lubbock, Texas and any Travel Center that is excluded from the transactions
contemplated by this Agreement. Following such five year period, to the extent
requested by Buyer, Seller and Buyer agree that they will negotiate, in good
faith, a commercially reasonable license for Buyer's continued use of such
Country Fare name.
5.14 POST-CLOSING COVENANT. Neither Seller, Seller Partner nor any of their
Affiliates shall own or operate directly or indirectly (whether, without
limitation, individually or as a partner, joint venturer, shareholder, member,
landlord, tenant, financier or lender of any entity) any of the following:
(a) Travel Center Operations within the United States for a period
of five years from the Closing Date;
(b) Convenience Store Operations within a 25 mile radius of any
travel center owned by Buyer or Buyer Parent (Including the Travel
Centers) for a period of three years from the Closing Date;
(c) a truck repair facility, other than a truck repair facility
associated with a truck manufacturer dealership within the United States,
for a period of five years from the Closing Date; or
(d) a dealership, including a truck repair facility associated with
a truck manufacturer dealership, within a 25 mile radius of any travel
center owned by Buyer or Buyer Parent (Including the Travel Centers) for a
period of three years from the Closing Date;
provided, however, that nothing contained herein shall restrict, or otherwise
prohibit, Seller, Seller Parent, or any of their Affiliates from continuing to
operate and own the assets or businesses set forth on Schedule 5.14 and any
Travel Center excluded from the transactions contemplated by this Agreement.
Each of Seller Parent and Seller recognizes and agrees that any violation of
this covenants will result in irreparable harm to Buyer for which money damages
will not alone be an adequate remedy and that Buyer shall be entitled to
equitable relief without the necessity of posting any bond therefor. Each of
Seller Parent, Seller and their respective Affiliates acknowledge and agree
that: (i) the scope of this Section 5.14 in time, geography and types and limits
of activities is reasonable and no greater than required for the protection of
the legitimate business interests of Buyer in the Acquired Assets and the
Business; (ii) it imposes no undue hardship on any of Seller Parent, Seller or
any of their Affiliates; and (iii) if this Section 5.14 is found by any court
having jurisdiction to be too broad in scope, whether as to activities, time
period, geographic area or otherwise, this Section 5.14 will nevertheless remain
effective but will be considered amended to the extent considered by such court
to be reasonable, and will be fully enforceable
31
as so amended. During the five year period following the Closing, neither Seller
nor Seller Parent (including their respective Affiliates) shall (1) attempt to
induce or encourage others to induce any Transferred Employee or consultant to
Buyer to terminate such person's employment with Buyer, or cease providing
services to Buyer, or (2) divert from, solicit or attempt to divert, or assist
or encourage any Person in diverting, soliciting or attempting to divert, to or
for Buyer, any customer or supplier of any of Buyer or the Business.
5.15 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ FILINGS.
(a) In furtherance and not in limitation of the foregoing, Buyer and
Seller shall use their commercially reasonable efforts to file
Notification and Report Forms under the HSR Act and similar applications
with any other applicable Governmental Body whose Governmental
Authorization is required, or with which a premerger notification is
required, in connection with the consummation of the transactions
contemplated by this Agreement as promptly as practicable following the
date hereof and in any event no later than 5 Business Days following the
date hereof. Buyer shall pay all filing fees associated with the HSR Act.
Buyer and Seller, and their respective Affiliates, shall cooperate and use
their respective commercially reasonable efforts (i) to obtain any
Governmental Authorization required for the Closing (Including through
compliance with the HSR Act), to respond to any requests for information
from a Governmental Body, and (ii) to contest and resist any Action and to
have vacated, lifted, reversed, or overturned any Order (whether
temporary, preliminary or permanent) that restricts, prevents or prohibits
the consummation of the transactions contemplated by this Agreement. In
connection with the foregoing, Buyer and its Affiliates shall work in good
faith and use commercially reasonable efforts to satisfy any conditions of
the FTC or DOJ for approval of the transactions contemplated by this
Agreement; provided, however, that neither Buyer nor its Affiliates shall
have any obligation to (i) sell or otherwise dispose of assets or
businesses of Buyer or any of its Affiliates (Including the Travel
Centers), or (ii) withdraw from doing business in a particular
jurisdiction to the extent required to do so, or (iii) agree not to do
business in any particular jurisdiction. To the extent permitted by
applicable Legal Requirement, Buyer and Seller shall provide the other the
opportunity to make copies of all material correspondence, filings or
communications (or memoranda setting forth the substance thereof) between
such party or its representatives, on the one hand, and any Governmental
Body, on the other hand, with respect to this Agreement or the
transactions contemplated by this Agreement. Each of Buyer and Seller, or
their counsel, as appropriate, will be given notice of and a reasonable
opportunity to participate in contacts with any Governmental Entity
regarding antitrust or merger control matters. Any documents filed
pursuant to Item 4(c) of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Notification and Report
Form or communications regarding the same or documents or information
submitted in response to any request for additional information or
documents pursuant to the HSR Act which reveal Seller's or Buyer's, or
their Affiliates', negotiation objectives or strategies or purchase price
expectations shall be retained by outside counsel and shall not be
disclosed to such outside counsel's client, absent prior written consent
of the party that produced such material in the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ process.
Buyer and Seller acknowledge that all such information provided pursuant
to the foregoing sentence shall be subject to the terms of the
Confidentiality Agreement.
(b) Buyer and Seller shall notify and keep the other advised as to
(i) any material communication from the FTC, the DOJ or any other
Governmental Body regarding any of the transactions contemplated hereby
and (ii) any Action pending or known to such party or, to its knowledge,
threatened, which challenges the transactions contemplated hereby. Except
as provided herein, Buyer and Seller shall not take any action
inconsistent with their obligations under this Agreement which would
materially hinder or delay the consummation of the transactions
contemplated by this Agreement.
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(c) To the extent that any foreign Governmental Body requires one or
both of the Parties to provide post-Closing notice of the consummation of
the transactions contemplated hereby, the Parties shall use their
commercially reasonable efforts to cooperate with respect to the filing of
such notices.
5.16 SELLER'S ACCESS TO BOOKS AND RECORDS AND PERSONNEL. For a period of three
years from the Closing Date (or such longer period as may be required by any
Governmental Body or requested by Seller in connection with disputes or
litigation):
(a) Buyer shall neither dispose of nor destroy any of the books and
records delivered to Buyer in connection with the Closing without first
offering to turn over possession thereof to Seller, by written notice to
Seller at least 30 days prior to the proposed date of such disposition or
destruction;
(b) Buyer shall allow Seller and its agents reasonable access to
such books and records during normal working hours at the offices of Buyer
at which such books and records are located;
(c) Buyer shall make available to Seller upon written request
therefor (i) copies of any such books and records, (ii) Buyer's personnel
to assist Seller in locating and obtaining any such books and records, and
(iii) any of Buyer's personnel who were employed by Seller prior to the
Closing Date and whose assistance or participation is reasonably required
by Seller in connection with existing or future litigation, tax returns or
other matters in which Seller is involved relating to the Business, to
Seller's ownership of the Acquired Assets, to the Retained Obligations.
Seller shall reimburse Buyer for the reasonable costs and expenses
incurred by Buyer in performing the covenants contained in this Section
5.16;
(d) Buyer shall allow Seller and its agents reasonable access to
make such improvements to the Travel Centers as are required to be made
under the Consent Decree, dated as of September 10, 2004, issued by the
United States District Court, Central District of California in Case No.
Ed CV 02-327 RT (SGL) (the "Consent Decree"); and
(e) Seller's access under this Section 5.16 shall not unreasonably
interfere with Buyer's continuing operations or business and shall be
subject to Buyer's customary safety and security policies and shall be
subject to any legal privileges that may then be applicable.
5.17 BUYER'S ACCESS TO BOOKS AND RECORDS AND PERSONNEL. For a period of three
years from the Closing Date (or such longer period as may be required by any
Governmental Body or requested by Seller in connection with disputes or
litigation):
(a) Seller shall neither dispose of nor destroy any of the books and
records (other than records regarding the conduct of the Business at times
prior to seven years prior to the Closing Date) retained by Seller
relating to the ownership or operation of the Acquired Assets or the
Business without first offering to turn over possession thereof to Buyer,
by written notice to Buyer at least 30 days prior to the proposed date of
such disposition or destruction;
(b) Seller shall allow Buyer and their agents reasonable access to
such books and records during normal working hours at the offices of
Seller at which such books and records are located;
33
(c) Seller shall make available to Buyer upon written request
therefor (i) copies of any such books and records, (ii) Seller's personnel
to assist Buyer in locating and obtaining any such books and records, and
(iii) any assistance or participation reasonably required by Seller in
connection with existing or future litigation, tax returns or other
matters in which Buyer is involved, relating to the Business, to Seller's
ownership of the Acquired Assets, to the Assumed Obligations. Buyer shall
reimburse Seller for the reasonable costs and expenses incurred by Seller
in performing the covenants contained in this Section 5.17; and
(d) Buyer's access under this Section 5.17 shall not unreasonably
interfere with Seller's continuing operations or business and shall be
subject to Seller's customary safety and security policies and shall be
subject to any legal privileges that may then be applicable.
5.18 POST-CLOSING MATTERS: ACCOUNTING. The Parties acknowledge that Seller is
not assigning to Buyer any accounts receivable and that, although customers will
be notified promptly of changes in payment procedures, revenues may be received
by either Party attributable to performance under Assigned Contracts either to
periods prior to or following the Closing. Buyer and Seller agree, consistent
with their normal business practices, to cooperate in collecting and accounting
for accounts receivable earned prior to the Closing Date and to ensure that any
receipts attributable to any period prior to the Closing received by Buyer and
any receipts attributable to any period after Closing received by Seller shall
be promptly accounted for and remitted to the appropriate Party. After Closing,
Buyer shall provide all such assistance and cooperation as may be reasonably
requested by Seller, in order to allow Seller to collect receivables
attributable to any period prior to the Closing; provided, however, that Buyer
shall not be required to commence, or participate in, any litigation or
collection action relative to Seller's accounts receivable. The Parties further
agree to develop a procedure on or prior to Closing to implement the foregoing.
Such procedure shall include provision for identifying and matching, by invoice
number, payments received and remitting periodically funds collected from
customers which are due the other Party. In the event that any payment is
received by Buyer from a Person owing an outstanding accounts receivable
relating to periods prior to the Effective Time, and such payment does not
specify the invoice to which such payment relates, such payment shall be applied
first to any accounts receivable owed by such Person to Seller for periods prior
to the Effective Time until such receivables are paid in full, and then applied
to any receivables owed by such Person to Buyer. Buyer and Seller shall contact
such Person to determine which invoice(s) or charge(s) such payment relates. The
parties further agree that after Closing each shall provide such assistance and
cooperation as may be reasonably requested by the other party to aid the
requesting party to remove any credit card chargebacks applied to the requesting
party's account, but which in fact apply to a transaction originally made on the
non-requesting party's account.
5.19 TITLE AND SURVEY MATTERS.
(a) Seller shall use its commercially reasonable efforts to, within
15 days following the date of this Agreement, but in no event later than
30 days following the date of this Agreement, (i) cause the Title Company
to issue, and shall deliver to Buyer a current Title Commitment for each
parcel of Real Property which shall reflect the condition of title that
will be transferred at the Closing, and (ii) deliver the surveys in
Seller's possession for each parcel of the Real Property. Buyer shall have
the opportunity to order and obtain (at Buyer's sole cost and expense),
with respect to any individual Travel Center, a land title survey of the
Real Property for each such Travel Center, prepared in accordance with the
ALTA/ACSM Minimum Detail Requirements adopted in 1999 (including Table A,
items 1,2, 3, 4, 5, 6, 7(a) and 7(b), 8, 9, 10, 11 and 15), and otherwise
acceptable to Buyer and its lenders (each a "Survey").
34
(b) Within 45 days after Buyer's receipt of a Title Commitment with
respect to any individual Travel Center pursuant to Section 5.19(a) (the
"Title Review Period"), Buyer may object to any title matter reflected on
such Title Commitment or any Survey obtained by Buyer with respect to the
Travel Center subject to the Title Commitment, by providing written notice
to Seller, provided that such objectionable title matter (A) would
materially and adversely affect the ability of the Buyer to conduct
business at the subject Real Property in the manner in which it is
currently being conducted by Seller, (B) (in the case of Owned Real
Property) would materially reduce the fair market value of the subject
Owned Real Property or (in the case of Leased Real Property) would
materially reduce the fair market value of Buyer's leasehold interest in
the subject Leased Real Property, and (C) is not a Permitted Encumbrance.
If, within the Title Review Period, Buyer fails to so notify Seller of any
title matter reflected on a Survey or Title Commitment pertaining to the
Real Property, or if any such title or Survey matter is not properly
objectionable (as specified above), then such title matter shall be deemed
accepted by Buyer. If Buyer properly objects in writing within the Title
Review Period, Seller may elect to do one of the following at its expense:
(A) cure such matter by causing such matter to be removed from the Title
Commitment and/or Survey, (B) cure such matter by causing the Title
Company to provide express insurance coverage with respect to such matter
that is reasonably acceptable to Buyer, (C) indemnify Buyer against such
item in form and substance reasonably acceptable to Buyer, or (D) deem
that such title matter is to be an Uncured Title Matter. Seller shall
notify Buyer of its election not less than five days (or as soon as
reasonably possible once the Closing Date is established) prior to the
Closing. Unless Seller elects to indemnify Buyer pursuant to the
provisions of this Section 5.19(b), Seller shall provide Buyer with a new
Title Commitment and/or Survey reflecting either (i) the removal of the
objectionable matter from the Title Commitment and/or Survey or (ii)
reflecting the express insurance coverage. If Seller elects to indemnify
Buyer, then Seller shall deliver to Buyer at Closing an indemnity
agreement reasonably satisfactory to Buyer. Upon Seller's compliance with
its obligations under this Section 5.19(b) with regard to a title matter
objected to by Buyer such matter shall be deemed accepted by Buyer. All
title or Survey matters accepted or deemed accepted pursuant to this
Section 5.19(b) shall become Permitted Encumbrances.
(c) Within ten days after discovery, either party shall inform the
other in writing of any new title matter affecting Real Property that
arises for the first time after the date of hereof and before the Closing
and is not reflected in any Title Commitment or Survey pertaining to Real
Property. If the new title matter (A) would materially and adversely
affect the ability of the Buyer to conduct business at the subject Real
Property in the manner in which it is currently being conducted by Seller,
or (B) (in the case of Owned Real Property) would materially reduce the
fair market value of the subject Owned Real Property or (in the case of
Leased Real Property) would materially reduce the fair market value of
Buyer's leasehold interest in the subject Leased Real Property, or (C) is
a title matter that will be reflected on the applicable Title Commitment
or Survey as an exception to coverage, and (D) is not a Permitted
Encumbrance, then Buyer may object thereto by giving written notice to
Seller within five days after Buyer's discovery or Buyer's receipt of
notice from Seller as to such new title matter. If Buyer fails to so
notify Seller, or if the new title matter is not properly objectionable
(as specified above), then such new title matter shall be deemed accepted
by Buyer. If Buyer properly objects in writing within the five day period,
Seller shall elect to do one of the following at its expense: (A) cure
such matter by removing it from the Title Commitment and/or Survey, (B)
cure such matter by causing the Title Company to provide express insurance
coverage with respect to such objectionable matter that is reasonably
acceptable to Buyer, (C) indemnify Buyer against such new item in form and
substance reasonably acceptable to Buyer, or (D) deem that such title
matter is to be an Uncured Title Matter. Seller shall notify Buyer of its
election not less than five days (or as soon as reasonably possible once
the Closing Date has been established) prior to the Closing. Unless
35
Seller elects to indemnify Buyer, Seller shall provide Buyer with a new
Title Commitment and/or Survey reflecting either (i) the removal of the
objectionable matter from the Title Commitment and/or Survey or (ii)
reflecting the express insurance coverage. If Seller elects to indemnify
Buyer than Seller shall deliver to Buyer at Closing an indemnity agreement
reasonably satisfactory to Buyer. Upon Seller's compliance with its
obligations under this Section 5.19(c) with regard to a title matter
objected to by Buyer such matter shall be deemed accepted by Buyer. All
title or survey matters accepted or deemed accepted pursuant to this
Section 5.19(c) shall become Permitted Encumbrances. If the new title
matter is discovered by or disclosed to Buyer later than ten days prior to
Closing, the Closing Date may, at the option of either party, be extended
for up to ten days, such option to be exercised by notice to the other
party which shall specify the new Closing Date.
(d) For purposes of this Section 5.19, any Title Commitment or
Survey matter which Buyer properly objects to and which is not cured by
Seller prior to Closing in accordance with Section 5.19(b) or Section
5.19(c), as the case may be, shall be referred to herein as an "Uncured
Title Matter"; it being understood, that in no event shall an
objectionable title matter resulting from any of Seller's financing
arrangements be deemed to be an Uncured Title Matter, and Seller shall be
obligated to cure such objectionable title matter. Following exclusion of
a Travel Center as a result of a Uncured Title Matters under this Section
5.19(d) or the exclusion of a Travel Center as a result of a Total Loss
pursuant to Section 2.6(c)(i), in the event that any other Uncured Title
Matters with respect to all other Travel Centers, together with any
amounts relating to any other Total Loss and/or other loss or casualties
asserted pursuant to Section 2.6 with respect to all other Travel Centers,
exceeds $5,000,000 in the aggregate, then Buyer may terminate this
Agreement pursuant to Section 12.1(a)(v). In the event that such Uncured
Title Matters asserted pursuant to this Section 5.19(d) with respect to
such other Travel Centers, together with any amounts asserted pursuant to
Section 2.6 with respect to such other Travel Centers, does not exceed
$5,000,000, then the Purchase Price shall be reduced by an amount equal to
the sum of (i) all amounts asserted for Uncured Title Matters with respect
to such other Travel Centers, and (ii) all amounts asserted pursuant to
Section 2.6 with respect to such other Travel Centers, and Buyer shall not
have any right to terminate the Agreement pursuant to this Section
5.19(d).
(e) At Closing, Seller shall cause the Title Company to issue either
actual or pro forma Title Policies with respect to each parcel of Real
Property consistent with the Title Commitments. Each such title policy to
be issued pursuant to such commitment, shall be in ALTA Form 1970-B (rev.
10-17-70) with extended coverage acceptable to Buyer, and shall insure in
Buyer good title to the Real Property on Closing in an amount of the
Purchase Price allocable to such Real Property; Seller shall be
responsible for payment of the basic premium for the Title Policies and
the cost of any express insurance provided pursuant to Sections 5.19(b) or
5.19(c), and Buyer shall be responsible for the payment of any additional
premiums for all other special modifications or endorsements reasonably
requested by Buyer, Including any endorsements required by any financing
source for Buyer.
(f) At Closing, Seller shall (i) convey to Buyer, by Special
Warranty Deed substantially in the form of Exhibit C, Seller's right,
title and interest to all Owned Real Property located in Arizona, (ii)
convey to Buyer, by Special Warranty Deed substantially in the form of
Exhibit D, Seller's right, title and interest to all Owned Real Property
located in Arkansas, (iii) convey to Buyer, by Special Warranty Deed
substantially in the form of Exhibit E, Seller's right, title and interest
to all Owned Real Property located in California, (iv) convey to Buyer, by
Special Warranty Deed substantially in the form of Exhibit F, Seller's
right, title and interest to all Owned Real Property located in Colorado,
(v) convey to Buyer, by Special Warranty Deed
36
substantially in the form of Exhibit G, Seller's right, title and interest
to all Owned Real Property located in New Mexico, (vi) convey to Buyer, by
Special Warranty Deed substantially in the form of Exhibit H, Seller's
right, title and interest to all Owned Real Property located in Texas, and
(vii) convey to Buyer, by Special Warranty Deed substantially in the form
of Exhibit I, Seller's right, title and interest to all Owned Real
Property located in Wyoming (all of such Deeds described in this Section
5.19(f) being referred to herein as, the "Deeds"). Seller shall also
execute and deliver affidavits reasonably requested by Buyer and provide
at Closing any and all reasonably necessary transfer tax forms or other
conveyance forms, instruments and documents ("Transfer Forms") require in
connection with the recording of the deeds and issuance of the Title
Policies.
(g) At Closing, Seller shall assign the Leases to Buyer, and Buyer
shall assume the same, by the Assignment and Assumption Agreement (Leases)
in the form attached as Exhibit J (the "Assignment and Assumption
Agreement (Leases)"). Buyer agrees that in connection with the assignment
and assumption of the Lease, Buyer shall provide to the lessor thereunder
any financial statements or other information that is reasonably requested
by such lessor.
(h) Notwithstanding any other provisions herein to the contrary, as
to matters affecting title to the Real Property and Seller's
indemnification obligations with respect thereto pursuant to Section 10.1,
Buyer agrees to use its commercially reasonable efforts to recover from
the Title Company and the Title Policies the payment of such Losses. To
the extent that the Title Company refuses to pay such Losses, Buyer, to
the extent permitted under this Agreement, may look to Seller to recover
such Losses pursuant to the provisions of Section 10.1(i) due to a Breach
of the representation and warranties contained in Section 3.9 (only as to
title); provided, however, with respect to any such Losses that are paid
by Seller, Buyer shall cause Seller to be subrogated to Buyer's rights
against the Title Company under the Title Policy.
(i) At the Closing, Seller shall use its commercially reasonable
efforts to provide to Buyer, to the extent required under any applicable
Lease, the written consents to assignment (as disclosed on Schedule 5.9)
of the Leases, in form and substance reasonably acceptable to Buyer and
its lenders. Seller shall use its commercially reasonable efforts to cause
such Consents to permit the assignment to, and assumption by, Buyer of the
Leases (including all options, rights and renewals) without amendment. At
the Closing, Seller shall use its commercially reasonable efforts to
provide to Buyer certificates of estoppel with respect to the Leases
relating to the Leased Real Property located at ▇▇▇▇▇▇▇▇▇, New Mexico
(collectively, the "▇▇▇▇▇▇▇▇▇ Lease"), in form and substance reasonably
acceptable to Buyer and its lenders. Seller shall use its commercially
reasonable efforts to cause each landlord of the Leased Real Property
covered by the ▇▇▇▇▇▇▇▇▇ Lease to certify to Buyer and its lenders that;
(i) the ▇▇▇▇▇▇▇▇▇ Leases are in full force and effect, (ii) there exists
no event of default; (iii) to the actual rent and additional rent payable;
(iv) to the areas leased, and (v) to the existence or nonexistence, as the
case may be, of any options or renewals. At the Closing, Seller shall use
commercially reasonable efforts to provide to Buyer certificates of
estoppel with respect to the Leases relating to the Leased Real Property
located at Tonopah, Arizona (collectively, the "Arizona Leases"), in form
and substance reasonably acceptable to Buyer and its lenders. Seller shall
use its commercially reasonable efforts to cause each landlord of the
Leased Real Property covered by the Arizona Leases to certify to Buyer and
its lenders that; (i) the Arizona Leases are in full force and effect,
(ii) there exists no event of default; (iii) to the actual rent and
additional rent payable; (iv) to the areas leased, and (v) to the
existence or nonexistence, as the case may be, of any options or renewals.
Furthermore, Seller shall use its commercially reasonable efforts to cause
the applicable landlords to certify in the estoppels delivered pursuant to
this Section 5.19(i) that leasehold mortgages or similar pledges by tenant
are not prohibited.
37
(j) The matters set forth on Schedule 3.9 shall be Permitted
Encumbrances; provided, however, that in the event Buyer receives, after
the date hereof, title information reflected on a new or updated Title
Commitment or Survey in addition to title information provided to Buyer
prior to the date hereof which, in Buyer's commercially reasonable
judgment, causes any matter set forth on Schedule 3.9 to be objectionable
under the standards set out in Sections 5.19(b) or 5.19(c), as applicable,
then such matter shall not be a Permitted Encumbrance under this Section
5.19(i). Seller may amend Schedule 3.9 to the extent that any title defect
is deemed to be a Permitted Encumbrance under Sections 5.19(b) or 5.19(c)
or is resolved as an Uncured Title Matter in accordance with Section
5.19(d).
(k) In the event Buyer believes it is entitled to a Purchase Price
reduction pursuant to Section 5.19(d) and there is a dispute between
Seller and Buyer as to whether Buyer is so entitled, and such dispute
cannot be resolved within five business days after written notice of such
disagreement, such matter shall be referred to three mutually agreeable
independent arbitrators (the "Umpires") who shall consist of the
following: (i) one Umpire shall be an attorney who is Board Certified by
the Texas Board of Legal Specialization in Commercial Real Estate Law, has
practiced law for more than 15 years, and has never represented any party
to the dispute, (ii) one Umpire shall be a real estate financial
specialist with at least 15 years experience and at least one year of
experience in the market where such Real Estate in dispute is located, and
(iii) one Umpire shall be an executive officer of a business with
substantial real property experience. If Seller and Buyer cannot promptly
agree upon the Umpires, then Seller and Buyer shall promptly arbitrate the
matter of the selection of the Umpires before the American Arbitration
Association ("AAA") in accordance with the Rules of the AAA for the Real
Estate Industry and utilizing the AAA's Expedited Procedures and a single
arbitrator, at the AAA office located in Dallas, Texas. Buyer and Seller
shall share equally in the costs of the AAA and the Umpires. Buyer and
Seller shall submit all non-privileged relevant information, Including
third party work product, other reports and supporting documentation, to
the Umpires. Both Buyer and Seller shall have a right to make an oral
presentation to the Umpires. The Umpires shall consider all information
submitted to it to make the final determination, but shall not perform any
additional title examination, surveys or other site work, unless expressly
agreed to by Buyer and Seller. The Umpires' determination, which shall
require only a majority vote of the Umpires, shall be delivered within
fifteen working days of the date the matter is submitted for its
determination, and shall be binding. If the foregoing procedure has not
been completed by the Closing Date, then the Closing Date shall be
extended to a date mutually acceptable to Seller and Buyer or, if Seller
and Buyer are unable to agree, to the date that is ten days following the
date the dispute is resolved.
(l) In the event there is a dispute between the Parties with regard
to any matter addressed in this Section 5.19 other than Buyer's right to
terminate this Agreement pursuant to Section 5.19(d) of this Agreement,
(A) Closing shall occur in accordance with all other provisions of this
Agreement, (B) the matter in dispute shall be submitted to binding
arbitration before the AAA in accordance with the procedures set out in
Section 5.19(k) promptly after Closing, and (C) the Parties shall take
such post-Closing actions as may be required by the arbitrator. In the
event there is a dispute between the Parties with regard to Seller's
rights to terminate this Agreement pursuant to this Section 5.19 (solely
with respect to Uncured Title Matters), the Parties agree to submit such
matter to binding arbitration before the AAA in accordance with the
procedures set out in Section 5.19(k).
5.20 SECTION 1031 LIKE KIND EXCHANGE. Notwithstanding anything contained herein
to the contrary, provided there is no delay in Closing, Seller and/or Seller
Parent has the right to structure the transactions contemplated hereby in order
to qualify as a tax deferred exchange under the provisions of Section 1031 of
the Code and the Treasury Regulations thereunder (the "Exchange"). Buyer agrees
to use reasonable
38
efforts to cooperate with Seller with respect to the Exchange, Including
executing before closing all documents required or advisable under Section 1031
of the Code and the Treasury Regulations thereunder, provided that: (a) Buyer
incurs no additional cost or expense in connection with the exchange; (b) Seller
agrees to indemnify and hold Buyer harmless from and against all liability
arising out of its cooperation in effecting the Exchange as requested by Seller,
provided, however, that such indemnification shall in no way affect the rights
of the Buyer under any other paragraph of this Agreement or in any other
contract connected with the Exchange; (c) Buyer shall have no liability with
respect to the Exchange and shall not be required to purchase any property other
than as required by this Agreement, and (d) all documents are reasonably
satisfactory in form and substance to Buyer and its counsel. Seller and Buyer
acknowledge that all agreements solely in connection with performing the
Exchange shall be prepared at Seller's expense by Seller's counsel. Seller may
assign all or a portion of its rights to the Agreement as necessary to comply
with any Legal Requirements applicable to Section 1031, but not its obligations
by an assignment of rights and notice to be signed by Seller, a qualified
financial intermediary to be designated by Seller, and Buyer prior to Closing.
On Seller's request, Buyer will sign the written assignment referred to in this
paragraph with the clear understanding that all obligations under this Agreement
remain with Seller. It being understood that for purposes of this Section 5.20,
Seller and/or Seller Parent shall be permitted to change their corporate form or
structure and, in the event of such change, this Agreement shall be deemed to
have been amended to read as if it reflected such change.
5.21 INTERIM FINANCIAL STATEMENTS.
(a) Within 30 days after the end of each calendar month prior to
Closing, and as soon as reasonably practical before the Closing Date for
the month preceding the month in which the Closing takes place, Seller
will deliver to Buyer the following:
(i) consolidated unaudited financial statements of Seller for
the month then ended in form substantially similar to the Interim
Statements, and an officer of Seller shall certify that such
unaudited financial statements were prepared in accordance with
GAAP, consistently applied, and present fairly, in all material
respects, the financial position of Seller as of the dates indicated
and the results of operations for the periods then ended, subject to
customary year end and audit adjustments of a normal and recurring
type which would not be material in the aggregate and the absence of
footnote disclosure, and
(ii) operating statements pertaining to the Business and the
Acquired Assets in form substantially similar to Seller's Financial
Statements; in each case, for the month then ended, and an officer
of Seller shall certify that such operating statements accurately
show, in all material respects, the operating results of the
Acquired Assets and the Business, adjusted for interest, Taxes,
depreciation and administrative expenses (as supplemented by
schedules including rebate income, income from ATMs and dues paid to
AMBEST), for the periods covered thereby.
(b) Within 30 days after the end of each calendar month prior to the
Closing, and as soon as reasonably practical before the Closing Date for
the month preceding the month in which the Closing takes place, Buyer will
deliver to Seller a statement, reflecting Buyer's last twelve months
EBITDA for the Buyer owned/Buyer operated sites, and an officer of Buyer
shall certify that such statement is accurate in all material respects.
5.22 COBRA COMPLIANCE. Seller agrees that it will timely provide all notices
and any continuation of health benefit coverage required to be provided to all
Employees, former employees, or the beneficiaries or dependent employees or
former employees, under Part 6 of Subtitle B of Title I of ERISA
39
4980B(f) of the Code (herein collectively referred to as "COBRA"), to the extent
such notices and continuation of health benefit coverage are required to be
provided by Seller by reason of events occurring prior to or on the Closing Date
or by reason of the transactions contemplated by this Agreement. For purposes of
the foregoing, Seller agrees that it will treat employees who are engaged in the
conduct of the Business (and such employees' beneficiaries and dependents) as of
the Closing Date as having incurred a "qualifying event" (within the meaning of
ERISA Section 603 ) and Code Section 498013(f)(3)) on the Closing Date. Seller
agrees that it will continue the health benefit coverage required by COBRA and
the provisions of this Agreement irrespective of the elimination of any health
benefit plan of Seller.
5.23 NO-SHOP. During the period commencing on the date hereof and ending on the
Termination Date, neither Seller nor Seller Parent (Including the Shareholders
and the Affiliates and Representative of Seller or Seller Parent) shall solicit,
propose or facilitate (including by way of providing information regarding
Seller or the Business to any Person or providing access to any Person),
directly or indirectly, any inquiries, discussions or proposals regarding,
continue or enter into negotiations looking toward, or enter into or consummate
any agreement or understanding in connection with any proposal regarding, any
purchase or other acquisition of all or any portion of Seller, Seller Parent or
the Business or any capital stock, right to acquire any capital stock or other
equity securities or interests (whether newly issued or currently outstanding)
of Seller or Seller Parent, any merger, business combination or recapitalization
involving Seller Parent or Seller, the liquidation, dissolution or
reorganization of any of Seller Parent or Seller, or any similar transaction;
Seller and Seller Parent shall cause their respective directors, officers,
representatives and Affiliates to refrain from the foregoing. If any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, any of Seller Parent or Seller or any of their respective Representatives,
then Seller shall promptly notify Buyer of the nature and terms of any of the
foregoing and the identity of the parties involved.
5.24 ADA COMPLIANCE. From and after the Closing Date, Seller shall have access
to the Travel Centers so that Seller may comply with its obligations under the
Consent Decree. Seller covenants and agrees to comply with the terms and
conditions of the Consent Decree and to complete the necessary repairs or make
the required improvements in accordance with the deadlines provided for therein.
5.25 CLEANUP REIMBURSEMENT. From and after the Closing Date, Buyer shall be
entitled to all compensation and other financial assistance available from any
storage tank fund or other governmental programs from or in which Seller has the
right to participate or receive contribution as a result of the presence of any
Materials of Environmental Concern on, in, under or about the Real Property.
Seller agrees to cooperate and assist in Buyer's efforts to obtain such
compensation and assistance. In no event shall Seller be required to be a party
to, or cooperate in any litigation under this Section 5.25.
5.26 ARKANSAS SITE. Within 180 days after the Closing Date, Seller shall, at
its sole cost and expense, cause the damaged pavement in the parking lot (which
is the subject of the litigation matter disclosed in Item 2 on Schedule
2.1(b)(xiii)) at the Prescott, Arkansas Travel Center to be repaired to a
reasonably satisfactory standard consistent with industry practice. Buyer shall
provide Seller with access to the Prescott, Arkansas Travel Center so that
Seller and its representatives and contractors may repair the same.
5.27 RETENTION OF PROCEEDS. Seller covenants and agrees that for 12 months
following the Closing Date Seller shall maintain at least $5,000,000 in cash,
cash equivalents, marketable securities or other assets easily converted into
cash. At the end of such 12-month period, in the event that there are
outstanding claims for indemnification which were timely made by Buyer pursuant
to Section 10.1, Seller shall maintain an amount in cash, cash equivalents,
marketable securities or other assets easily converted
40
into cash in an amount equal to the lesser of (i) $5,000,000 and (ii) the amount
asserted in such claims until such claims have been resolved and satisfied. It
being further understood, that at no time after 12 months following the Closing
Date, shall Seller be required to maintain cash, cash equivalents, marketable
securities or other assets easily convertible into cash in excess of the then
outstanding claims by Buyer for indemnification.
ARTICLE VI- CONDITIONS TO SELLER'S
OBLIGATION TO SELL THE ACQUIRED ASSETS
The obligation of Seller to sell the Acquired Assets and the Business to
Buyer pursuant to this Agreement shall be subject to the satisfaction of each of
the following conditions, each of which may be waived, in whole or in part, in
the sole discretion of Seller, by a written instrument signed by Seller:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Buyer set forth in Article IV shall be true in all material
respects as of the Closing with the same effect as though made on and as of the
Closing Date; and Buyer shall in all material respects have performed all
obligations and complied with all covenants required by the Agreement to be
performed or complied with by Buyer on or prior to the Closing Date.
6.2 [INTENTIONALLY OMITTED.].
6.3 PAYMENT OF CASH PORTION OF PURCHASE PRICE. At Closing, Buyer shall have
tendered payment of the Closing Payment pursuant to Section 2.3.
6.4 CLOSING DOCUMENTS. At Closing, Buyer shall have delivered to Seller the
documents listed in Section 9.2.
ARTICLE VII- CONDITIONS TO BUYER'S
OBLIGATIONS TO PURCHASE THE ACQUIRED ASSETS
The obligations of Buyer to purchase the Acquired Assets from Seller
pursuant to this Agreement shall be subject to the satisfaction of each of the
following conditions, each of which may be waived, in whole or in part, in the
sole discretion of Buyer, by a written instrument signed by Buyer:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Seller set forth in Article III, shall be true in all material
respects as of the Closing with the same effect as though made on and as of the
Closing Date, after giving effect to any supplemental disclosures to the
Disclosure Schedules made pursuant to Section 5.12. Seller shall in all material
respects have performed all obligations and complied with all covenants required
by the Agreement to be performed or complied with by Seller on or prior to the
Closing Date.
7.2 CLOSING DOCUMENTS. At Closing, Seller shall have delivered to Buyer the
documents listed in Section 9.3 and Section 5.19, including the Consents
relating to the ▇▇▇▇▇▇▇▇▇ Leases and the Arizona Leases, the estoppel
certificates relating to the ▇▇▇▇▇▇▇▇▇ Leases, and to the extent obtained, any
estoppel certificates relating to the Arizona Leases. It being understood, that
the delivery of the estoppel certificates relating to the Arizona Leases shall
not be a condition to Closing.
7.3 CONSENTS. Seller shall have obtained all required Consents set forth on
Schedule 5.9.
7.4 NO CHANGE. There shall not have occurred a Material Adverse Change.
41
ARTICLE VIII- CONDITIONS TO OBLIGATIONS OF ALL PARTIES
The obligations of the Seller to sell, and the Buyer to purchase, the
Acquired Assets shall be subject to the following additional conditions:
8.1 NOTIFICATIONS.
(a) At least three days prior to the Closing Date, Seller shall
provide Buyer with the following information:
(i) Wire transfer instructions, designating the account
information where the Purchase Price is to be delivered;
(ii) A statement reflecting the proration of ad valorem taxes
and other prepayments to be included in the adjustments at Closing
with respect to the Acquired Assets under this Agreement; and
(iii) A statement of the Estimated Price of Inventory
determined in accordance with the procedures set forth on Exhibit A.
(b) On the Closing Date, Seller shall provide Buyer with the Cash on
Hand Amount.
8.2 REGULATORY APPROVALS. All required regulatory approvals, consents, and
Permits, as applicable, shall have been received (Including the expiration of
any applicable waiting periods under the HSR Act), and any other required United
States or state or local government or regulatory notifications shall have been
made.
8.3 ACTION OR PROCEEDING. There must not be any pending or threatened
Proceeding against Buyer or Seller, or against any Affiliate of Buyer or Seller,
(a) involving any challenge to, or seeking damages or other relief in connection
with, any of the transactions contemplated under this Agreement, or (b) that may
have the effect of preventing, delaying, making illegal, conditioning or
otherwise interfering with any of the transactions contemplated under this
Agreement.
ARTICLE IX- CLOSING
9.1 GENERAL. The Closing shall, unless another date or place is agreed to in
writing by the Parties hereto, take place on the Closing Date, if all conditions
to the purchase and sale of such Acquired Assets have been satisfied or waived
on or before such date, or, if this Agreement has not been terminated pursuant
to Article XII, as soon as practicable following the satisfaction or waiver of
all such conditions if all such conditions have not been satisfied or waived on
or before such date.
9.2 BUYER'S CLOSING DOCUMENTS AND PAYMENT. Buyer shall deliver to Seller at
the Closing the following:
(a) To the extent any required Consents have been obtained, an
assignment and assumption agreement, in the form of Exhibit K (the
"Assignment and Assumption Agreement (Contracts)"), executed by Buyer,
with respect to the Assigned Contracts being assigned to Buyer;
(b) A certificate executed by Buyer to the effect that each of
Buyer's representations and warranties in the Agreement was true on and as
of the date of the Agreement and is true in all
42
material respects on and as of the Closing Date as if made on and as of
the Closing Date and that Buyer has complied in all material respects with
all of its covenants to be performed under the Agreement prior to Closing;
(c) Payment by wire transfer of the Base Consideration (minus the
Escrow Deposit), as adjusted for the following:
(i) any adjustments required pursuant to Section
2.6(c)(i) and 5.19(d); and
(ii) prorations for Taxes and prepayments, as provided
in Article XIII;
(d) Payment by wire transfer of 90% of the Estimated Price of
Inventory;
(e) Payment by wire transfer of the Cash on Hand Amount;
(f) A legal opinion from Buyer's counsel, addressed to Seller,
containing the opinions set forth on Exhibit L (the "Buyer's Legal
Opinion");
(g) To the extent any required Consents have been obtained, the
Assignment and Assumption Agreement (Leases) as provided in Sections
5.19(g) hereof; and
(h) Other documents reasonably required by Seller or its counsel in
order to more fully consummate the transactions contemplated by the
Agreement.
9.3 SELLER'S CLOSING DOCUMENTS. Seller shall deliver to Buyer at the Closing
the following:
(a) Copies of all third-party Consents identified on Schedule 5.9,
together with any other governmental or third party Consents and waivers
Seller has received prior to Closing;
(b) The Deeds, the Transfer Forms and, to the extent any required
Consents have been obtained and subject to Section 5.9, the Assignment and
Assumption Agreement (Leases) as provided in Sections 5.19(g) hereof;
(c) To the extent any required Consents have been obtained, the
Assignment and Assumption Agreement (Contracts);
(d) For Acquired Assets which are not Real Property, the following
instruments:
(i) a ▇▇▇▇ of Sale, in the form of Exhibit M (the "▇▇▇▇ of
Sale"); and
(ii) Certificates of Title for all Vehicles, each executed by
Seller and in form reasonably satisfactory to the Buyer;
(e) Subject to the receipt of any required Consents, assignment of
the Permits included in the Acquired Assets;
(f) UCC-3's and releases of deeds of trust or mortgages and all
other satisfactions or releases of any Encumbrances against the Acquired
Assets, except Permitted Encumbrances, sufficient to convey clear title to
the Acquired Assets to Buyer, but subject to, with respect to the Real
Property, the Permitted Encumbrances;
43
(g) Assignments of any Insurance Claims (whether for damages known
to exist at this time or which may occur on or prior to the Closing and
which may be discovered at any time in the future with respect to the
Acquired Assets);
(h) Certificates of Good Standing for Seller in all jurisdictions
where Seller owns assets or operates;
(i) A certificate executed by Seller representing and warranting to
Buyer that (i) each of Seller's representations and warranties in the
Agreement was accurate on and as of the date of the Agreement and is
accurate in all material respects as of the Closing Date as if made on and
as of the Closing Date, (ii) Seller has complied in all material respects
with all of its covenants to be performed under the Agreement prior to
Closing, and (iii) the condition set forth in Section 7.4 has been
satisfied;
(j) The books and records of the Business included within the
Acquired Assets;
(k) A legal opinion from counsel to Seller, addressed to Buyer and
its lenders, containing the opinions set forth on Exhibit N attached
hereto (the "Seller's Legal Opinion");
(l) Resolutions duly adopted by the board of directors and
shareholders of each of Seller Parent and Seller, authorizing the
execution, delivery and performance of this Agreement, duly certified by
the Secretary of Seller Parent and Seller (as the case may be);
(m) Owner's affidavits, gap indemnity and any other documents
reasonably required by the Title Company in order to record the Deeds and
issue the Title Policy for each Real Property as required herein;
(n) FIRPTA affidavit certifying the non-foreign status of Seller in
satisfaction of Code Section 1445;
(o) Declaration of covenants and restrictions (in form and substance
reasonably satisfactory to Buyer) (the "Deed Restrictions") which imposes
the following restrictions on each parcel of real property owned by Seller
or any of its Affiliates and located at the same intersection or on the
same highway exit as any Travel Center and not included in the Owned Real
Property (the "Retained Property"): (i) prohibition on the sale of
petroleum products for 5 years from the Closing Date; (ii) prohibition on
the operation of Travel Center for 10 years from the Closing Date; (iii)
and prohibition of a truck repair facility for 10 years from the Closing
Date; all of which shall be recorded in the appropriate recording office
for each Retained Property on the Closing Date; it being understood that
the prohibitions contained in clauses (ii) and (iii) above, shall not
apply to (x) any customary convenience store or other operation that does
not have a separate diesel fuel island, commercial truck parking, or a
commercial truck repair center; and it being further understood that none
of the prohibitions contained in any Deed Restrictions shall prohibit the
operation of a restaurant;
(p) Unless ▇▇▇▇ ▇▇▇▇▇▇▇ and B.R. ▇▇▇▇▇▇▇ have entered into
consulting agreements with Buyer, each of ▇▇▇▇ ▇▇▇▇▇▇▇ and B.R. ▇▇▇▇▇▇▇
shall have delivered to Buyer non-competition agreements (the "▇▇▇▇▇▇▇
Noncompetition Agreements") containing non-competition covenants identical
in all material respects to those in Section 5.14 of this Agreement;
44
(q) Seller, Seller Parent or an Affiliate of Seller or Seller Parent
and Buyer shall have entered into a mutually agreeable gaming agreement
(the "Amusement Agreement") in the form attached hereto as Exhibit O; and
(r) The Ancillary Agreements and such other documents reasonably
required by Buyer or its counsel in order to more fully consummate the
transactions contemplated by the Agreement.
ARTICLE X- INDEMNIFICATION
10.1 BY SELLER. Subject to the limitations set forth in Article XI and
elsewhere herein, Seller shall defend, indemnify, and hold harmless Buyer and
its Affiliates in respect of and against, any and all Losses incurred or
suffered by Buyer or any Affiliate of Buyer (i) resulting from the Breach of any
representation or warranty made by Seller in Article III of this Agreement,
after giving effect to any supplement to the Disclosure Schedules pursuant to
Section 5.12, (ii) resulting from any Breach by Seller of any covenant or
obligation of Seller contained in this Agreement or any other document delivered
by Seller at Closing pursuant to this Agreement, (iii) resulting from any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any such
Person with Seller (or any Person acting on its behalf) in connection with any
of the transactions contemplated hereby, and (iv) arising from all Retained
Obligations or resulting from the Excluded Assets; provided, however, no
indemnity under Section 10.1(i) shall be owed by Seller to Buyer until all
Losses subject to such indemnification exceed $1,000,000 (the "Basket") in the
aggregate. If the amount of Losses for which indemnity is owed by Seller under
Section 10.1(i) should exceed the Basket, then Seller shall indemnify Buyer for
the entire amount of all Losses in excess of the Basket and up to the cap amount
set forth in Section 11.1.
10.2 BY BUYER. Subject to the limitations set forth in Article XI and elsewhere
herein, Buyer shall defend, indemnify, and hold harmless Seller and its
Affiliates in respect of and against, any and all Losses incurred or suffered by
the Seller or their Affiliates resulting from (i) the Breach of any
representation or warranty of Buyer contained in Article IV of this Agreement,
(ii) any Breach by Buyer of any covenant or obligation of Buyer contained in
this Agreement or any other document delivered by Buyer at Closing pursuant to
this Agreement, (iii) the Assumed Obligations, and (iv) any financial advisory
fee, brokerage commission, finder's fee, or like payment to any broker, agent,
advisors, or other Persons acting on behalf of Buyer in connection with the
transactions contemplated hereby up to the cap amount set forth in Section 11.1.
10.3 NOTIFICATION AND HANDLING OF THIRD PARTY CLAIMS.
(a) Each Party shall notify the other Party in writing as promptly
as practicable whenever it shall determine that there are facts or
circumstances that render the other Party liable to the notifying Party
under Section 10.1 or Section 10.2, giving full particulars about the
nature of the Loss for which indemnification may be claimed, the expected
amount of such Loss, and the basis for the claim for indemnification. In
addition, in the event that any Claim shall be brought by any third Person
or Governmental Body, which, if successful, would render any Party liable
to the other Party under this Article X, then the Party seeking
indemnification hereunder (the "Indemnitee") shall, as promptly as
practicable after receiving notice or service of process of such Claim,
give written notice (a "Claim Notice") thereof to the Party from whom
indemnification is sought (the "Indemnitor"). Such Claim Notice shall
describe in reasonable detail the nature of the Loss, include a copy of
all papers served with respect to an Action (if any) and state the basis
of such request for indemnification. Failure to promptly notify the
Indemnitor will not relieve the Indemnitor of any liability that it may
have to any Indemnitee, except to the extent that the
45
Indemnitor demonstrates that the Indemnitor is prejudiced by the
Indemnitee's failure to give such notice, and provided that the Indemnitor
shall not be liable for any defense or settlement costs or expenses
incurred by the Indemnitee prior to delivery of such notice. Within 30
days after receipt of any Claim Notice, the Indemnitor shall notify the
Indemnitee either that (i) the Indemnitor elects to defend the Indemnitee
against such Claim with counsel selected by the Indemnitor and reasonably
satisfactory to the Indemnitee, or that (ii) the Indemnitor disputes its
potential liability to indemnify the Indemnitee, provided that such an
aforesaid election by the Indemnitor to not assume the defense of the
Indemnitee for such Claim shall be subject to the right of the Indemnitor
to subsequently assume the defense of the Indemnitee for such Claim at any
time prior to settlement or final determination thereof, provided that any
such subsequent election shall not prejudice the rights of the Indemnitee.
(b) If either (i) the Indemnitor and the Indemnitee are both named
as parties to such Claim and the Indemnitee determines in good faith that
joint representation would be inappropriate, or (ii) an Indemnitee
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its Affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under the Agreement, or (iii) the Claim involves Losses
that might be subject to indemnification hereunder and other Losses which
are not subject to indemnification hereunder, then the Party asserting
such issue shall notify the other Party accordingly within 30 days after
receipt of the Claim Notice, and the Parties shall then negotiate in good
faith to obtain a joint defense (using either the same or separate
counsel, as appropriate) to allocate the costs of defense and the
potential liability for Losses on the Claim on an equitable basis, based
upon each Party's potential exposure for Losses subject to
indemnification, in comparison with Losses that are not subject to
indemnification hereunder. If the Indemnitee disputes that the Claim is
not one that is fully indemnified hereunder, then the Indemnitee shall be
entitled to proceed as provided under Section 10.3(d), but the Indemnitor
shall be liable for the Indemnitee's costs, expenses or Losses only to the
extent finally determined that the Claim is subject to Indemnification
hereunder by reason of an Action or settlement between the Parties
regarding such indemnification dispute.
(c) If within 30 days of receipt of a Claim Notice, the Indemnitor
notifies the Indemnitee in writing of its election to assume the full
control of defense of a Claim, (i) the Indemnitee shall not be liable to
the Indemnitor for any costs or expenses incurred by the Indemnitor in
connection with such defense from and after the date Indemnitor notified
Indemnitee of Indemnitor's election to assume the defense of such Claim,
(ii) it will be conclusively established for purposes of the Agreement
that the entire Claim is within the scope of and subject to
indemnification hereunder; (iii) the Indemnitor will not, so long as it
diligently conducts such defense, be liable to the Indemnitee under this
Article X for any fees of other counsel or any other expenses subsequently
incurred by the Indemnitee in connection with the defense of such Claim,
and (iv) the Indemnitee shall not be liable to the Indemnitor for any
costs or expenses incurred by the Indemnitor in connection with such
defense, nor for any Losses rendered or assessed in connection with such
Claim, nor for any Losses resulting from the settlement of any such Claim
if settled by the Indemnitor with or without the written consent of the
Indemnitee, provided however that no compromise or settlement of such
Claim may be effected by the Indemnitor without the Indemnitee's consent
unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on
any other claims that may be made against the Indemnitee, and (B) the sole
relief provided is monetary damages that are paid in full by the
Indemnitor; and (C) the Indemnitee will have no liability with respect to
any compromise or settlement of such Claim effected without its consent;
and (D) such settlement contains a full and complete release of such Claim
in favor of Indemnitee.
46
(d) If the Indemnitor does not either (i) notify the Indemnitee that
Indemnitor intends to assume full defense of the Claim, (ii) provide
notice under Section 10.3(b) that a matter should be subject to a joint
defense, or (iii) acknowledge that such Claim might be subject to
indemnification pursuant to Section 10.1 and request that Indemnitee
assume defense of such Claim, then subject to Indemnitor's subsequent
election to assume such defense, the Indemnitee may proceed to defend the
claim using counsel of it choice, and to the extent that the Claim is
thereafter determined to be subject to indemnification hereunder, the
Indemnitor shall be obligated to reimburse the Indemnitee for all costs
and expenses incurred by the Indemnitee in connection with defense of the
claim and all Losses incurred by the Indemnitee in connection with any
judgment or order entered in an Action involving the Claim or any
settlement of such Claim, provided however, that the Indemnitor shall not
be liable for any Losses incurred in any settlement made without the
Indemnitor's consent , which consent shall not be unreasonably withheld.
Indemnitor's refusal to consent to any settlement that does not provide
for a complete release of the subject Claim in favor of Indemnitor shall
not be considered unreasonable.
(e) Each Party shall take all reasonable steps and use all
commercially reasonable efforts to mitigate any and all Losses. Each Party
hereby waives, or will procure the waiver of, any subrogation rights that
its insurer may have with respect to any indemnifiable Losses to the
extent reasonably possible.
10.4 NOTIFICATION OF OTHER CLAIMS. A claim for indemnification for any matter
not involving a third-party claim may be asserted by notice to the Party from
whom indemnification is sought. Failure to give such notification shall affect
the indemnification provided hereunder only to the extent the Indemnitor shall
have been actually prejudiced as a result of such failure. Upon receipt of any
such notice, the Indemnitor shall notify the Indemnitee as to whether the
Indemnitor accepts liability for any such Loss.
10.5 ENVIRONMENTAL CLAIMS. In the event Buyer seeks indemnification under this
Article X for any Breaches of Seller's representations and warranties contained
in Section 3.7, Buyer agrees to (i) inform Seller of the determination that any
Cleanup or other actions are required, (ii) consult with Seller regarding
actions to be taken and the costs to be incurred for such Cleanup or other
actions, and (iii) keep Seller informed of the status of such Cleanup or other
actions. Buyer and Seller shall agree, through good faith negotiations, on the
costs to be incurred with respect to any such required Cleanup or other actions.
If Buyer and Seller cannot mutually agree on the costs to be incurred with
respect to any such required Cleanup or other actions, then Buyer and Seller
shall have a final determination of the required Cleanup or other actions, and
the costs associated therewith, by a mutually agreeable third party
environmental engineering firm.
ARTICLE XI- LIMITATIONS AND SURVIVAL
11.1 LIMITATIONS AND CAPS ON LOSSES AND INDEMNITY.
(a) Seller's aggregate indemnification liability pursuant to Section
10.1(i) for all Breaches of the representations and warranties set forth
in Section 3.7 (Environmental Matters) of this Agreement shall not exceed
$500,000.
(b) Seller's aggregate indemnification liability pursuant to Section
10.1(i) for all Breaches of the representations and warranties set forth
in Article III of this Agreement (Including the representations and
warranties set forth in Section 3.7 of this Agreement, but excluding
Breaches of representations and warranties set forth in Sections 3.1
(Organization, Standing and Power), 3.2 (Authority for Agreement), 3.8
(Tangible Acquired Assets) (only as to
47
title), 3.9 (Real Property) (only as to title)), 3.12 (Taxes) and 3.16
(Brokerage Fees), shall not exceed $5,000,000.
(c) Seller's aggregate indemnification liability pursuant to Section
10.1(i) for all Breaches of the representations and warranties set forth
in Sections 3.1 (Organization, Standing and Power), 3.2 (Authority for
Agreement), 3.8 (Tangible Acquired Assets) (only as to title), 3.9 (Real
Property) (only as to title), 3.12 (Taxes) and 3.16 (Brokerage Fees),
together with Seller's aggregate other indemnification liability under
Section 10.1 of this Agreement, shall not exceed the Purchase Price.
(d) Notwithstanding any other provisions herein to the contrary, as
to matters affecting title to the Real Property and Seller's
indemnification obligation with respect thereto pursuant to Section 10.1,
Buyer agrees that the provisions of Section 5.19(h) shall apply.
(e) The Basket shall not apply to Breaches of the representations
and warranties set forth in Sections 3.1 (Organization, Standing and
Power), 3.2 (Authority for Agreement), 3.8 (Tangible Acquired Assets)
(only as to title), 3.9 (Real Property) (only as to title), 3.12 (Taxes)
and 3.16 (Brokerage Fees).
(f) Buyer's aggregate indemnification liability under Section 10.2
of this Agreement, shall not exceed the Purchase Price.
11.2 RECOURSE. Except as for its right to judicially enforce this Agreement and
claims for fraud, the remedies provided in Article X will be the sole and
exclusive remedies available to Buyer and Seller, with respect to the
transactions contemplated by this Agreement.
11.3 SURVIVAL.
(a) All representations and warranties, covenants, and obligations
in this Agreement, the Disclosure Schedules, the supplements to the
Disclosure Schedules the certificate delivered pursuant to Section 9.3(i),
and any other certificate or document delivered pursuant to the Agreement
will survive the Closing for a period of 12 months from the Closing Date,
at which point they will automatically expire, except as follows:
(i) the representations and warranties set forth in Sections
3.1 (Organization, Standing and Power), 3.2 (Authority for
Agreement), 3.8 (Tangible Acquired Assets) (only as to title), 3.9
(Real Property) (only as to title), 3.12 (Taxes) and 3.16 (Brokerage
Fees), shall not expire except in accordance with otherwise
applicable statutes of limitation;
(ii) there shall be no expiration hereunder of any obligation
of Seller to pay, discharge or perform any Retained Obligations or
of Buyer to pay, discharge or perform Assumed Obligations; and
(iii) any covenants set forth herein or in any Ancillary
Agreement shall continue for the period of time applicable thereto
in accordance with the provisions thereof.
(b) The right to indemnification under Article X shall continue to
survive for any and all Losses about which an Indemnitor receives notice
during the applicable survival period for
48
that respective representation, warranty or covenant but not for Losses
about which an Indemnitor receives notice after the expiration of such
applicable survival period.
ARTICLE XII- TERMINATION
12.1 TERMINATION. The Agreement may be terminated as follows:
(a) At any time prior to the Termination Date:
(i) by the mutual written consent of Seller and Buyer;
(ii) by either Seller or Buyer if any court or Governmental
Body of competent jurisdiction shall have issued an Order or taken
any other action, permanently restraining, enjoining, or otherwise
prohibiting the transactions contemplated hereby, provided that no
termination shall be permitted under this Section 12.1(a)(ii) unless
the Party seeking such termination shall have used its commercially
reasonable efforts to oppose such issuance or action;
(iii) subject to Section 12.1(a)(iv), by Seller in the event
that Buyer fails to comply with any commercially reasonable actions
required to be taken by the FTC or DOJ in order to consummate the
transactions contemplated by this Agreement;
(iv) by Buyer, in the event the FTC or DOJ, as a condition to
granting HSR approval, requires that Buyer (A) sell or otherwise
dispose of any of its assets or businesses, (B) withdraw from doing
business in a particular jurisdiction, or (C) agree to not do
business in any particular jurisdiction, notwithstanding that any
such requested actions are or would be commercially reasonable;
(v) by Buyer, pursuant to Sections 2.6(c)(iii), 5.12 or
5.19(d).
(b) At any time on or after the Termination Date:
(i) by Seller or Buyer if the Closing has not occurred, and
the Party seeking termination is not in Breach under this Agreement;
(ii) by either Seller or Buyer if any court or Governmental
Body of competent jurisdiction shall have issued an Order or taken
any other action, permanently restraining, enjoining, or otherwise
prohibiting the transactions contemplated hereby, provided that no
termination shall be permitted under this Section 12.1(b)(ii) unless
the Party seeking such termination shall have used its commercially
reasonable efforts to oppose such issuance or action;
(iii) by Buyer, if the conditions set forth in Articles VII
and VIII have not been satisfied as of the Termination Date; or
(iv) by Seller, if the conditions set forth in Articles VII
and VIII have been satisfied and Buyer fails or refuses to
consummate the Transaction.
12.2 EFFECT OF TERMINATION.
(a) In the event this Agreement is terminated pursuant to Section
12.1, all further
49
obligations of the Parties hereunder shall terminate; provided however,
that no such termination of the Agreement shall act to terminate or
otherwise impair the rights or obligations set forth in this Section 12.2,
Section 11.2 or Section 5.10.
(b) If this Agreement is terminated:
(i) by Buyer or Seller pursuant to Sections 12.1(a)(i),
12.1(a)(ii), 12.1(b)(i) or 12.1(b)(ii), the Escrow Deposit shall be
immediately paid by the Escrow Agent to Buyer with neither Party
having any further liability or obligation to the other Party;
(ii) by Seller pursuant to Sections 12.1(a)(iii) or
12.1(b)(iv), the Escrow Deposit shall be immediately paid by the
Escrow Agent to Seller as liquidated damages and not as a penalty,
and Seller shall be entitled to pursue applicable legal or equitable
remedies against Buyer without limitation; or
(iii) by Buyer pursuant to Sections 12.1(a)(iv), 12.1(a)(v) or
12.1(b)(iii), the Escrow Deposit shall be immediately paid by the
Escrow Agent to Buyer, and Buyer shall be entitled to pursue
applicable legal or equitable remedies against Seller without
limitation.
ARTICLE XIII- TAXES AND PREPAID RENTS/DEPOSITS
13.1 GENERAL TAX OBLIGATIONS. Except as provided in this Article XIII, Buyer
shall be liable for and pay all Taxes, utility charges or apportionments which
arise as a result of this Agreement or the consummation of the transactions
contemplated hereby or as a result of any purchase, sale, rental, lease,
storage, use, consumption or operation of the Acquired Assets by Buyer. Buyer
shall pay motor vehicle transfer taxes with respect to the Vehicles. Seller
agrees to cooperate with and assist Buyer in claiming any applicable occasional
sale or sales tax exemption; provided that Seller shall not incur any
unreimbursed third-party costs, expenses, fees or liabilities as a result of or
in any way relating to, the provision of such assistance; provided, however,
that if any audit determines that any occasional sale or sales tax is due, the
Buyer and Seller shall split such taxes equally, and further provided, that
Seller shall not be required to participate in any such audit.
13.2 PRORATION. General and special real estate and other ad valorem taxes and
assessments and other state or local taxes, fees, charges and assessments in
respect of the Real Property (Including any such amounts owed under the Leases)
or personal property, if applicable, on the basis of the fiscal year in which
the Closing occurs shall be prorated between Buyer and Seller as of the
Effective Time (it being understood that Buyer is liable for the same to the
extent accruing after the Effective Time and Seller for those items accruing
before the Effective Time). If the Closing Date shall occur before the tax rate
or assessment is fixed for such fiscal year, the apportionment of such taxes and
payments at the Closing shall be based upon the most recently ascertainable tax
bills; provided, that Buyer and Seller shall recalculate and re-prorate said
taxes and payments and make the necessary cash adjustments promptly upon the
issuance, and on the basis, of the actual tax bills received for the fiscal year
in which the Closing occurs and the amount of any payments in lieu of tax made
with respect to any such fiscal year.
13.3 OPERATING TAXES. Seller shall be solely responsible for all Taxes (other
than those subject to proration in Section 13.2) incurred in connection with the
Acquired Assets or the Business prior to Closing, and Buyer shall be solely
responsible for all Taxes incurred in connection with the Acquired Assets or
Business after Closing.
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13.4 PREPAID RENTS/DEPOSITS. From the date hereof, until the date that is 90
days after the Closing Date, Buyer shall use its commercially reasonable efforts
to replace all of Seller's security, utility and other similar deposits, prepaid
rent and prepaid expenses related to the Acquired Assets (collectively,
"Seller's Prepaid Expenses"), Including those disclosed on Schedule 13.4 with
Buyer's deposits or prepayments and shall cause Seller to be released from, or
shall indemnify Seller for, all liability under such Seller's Prepaid Expenses
for events which occur after the Closing Date. No later than 90 days after the
Closing Date, Buyer shall reimburse Seller for Seller's Prepaid Expenses as of
the Closing Date. To the extent that Buyer can assume certain of Seller's
Prepaid Expenses, Buyer and Seller shall cause such Seller's Prepaid Expenses to
be assumed by Buyer and Buyer shall reimburse Seller for the Seller's Prepaid
Expenses that were assumed by Buyer. Any prepaid rents on any Real Property or
personal property shall be prorated between Buyer and Seller as of the Effective
Time.
ARTICLE XIV - MISCELLANEOUS
14.1 EXPENSES. Except as otherwise provided in this Agreement, the Parties
shall pay their respective expenses (Including the fees, disbursements, and
expenses of their respective attorneys and accountants) in connection with the
negotiation and preparation of the Agreement and the consummation of the
transactions contemplated hereby.
14.2 NOTICES. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be deemed to have been duly given on the
date delivered if delivered personally or sent by facsimile to the persons
identified below, one business day following deposit with a reputable overnight
courier, or three business days after deposit in the U.S. mail if mailed by
certified or registered mail, return receipt requested, addressed as follows:
If to Seller Parent, to:
B.R.G., Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Clifford, Krier, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller, to:
Rip ▇▇▇▇▇▇▇ Truck Service Center, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Clifford, Krier, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer Parent or Buyer, to:
Travel Centers of America, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address to which notices or other communications are to
be sent by giving written notice of any such change in the manner provided
herein for giving notice.
14.3 MODIFICATION OR WAIVER. The Agreement may be amended, modified, or
superseded at any time by a written instrument executed by Seller and Buyer, and
any of the terms, covenants, representations, warranties, or conditions hereof
may be waived by written instrument executed by the Party intended to be
benefited thereby. No waiver of any nature, in any one or more instances, shall
be deemed to be or construed as a further or continued waiver of any condition
or any breach of any other term, representation, or warranty in the Agreement.
14.4 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
assigns; provided, however, except as set forth in Section 5.21, that prior to
the Closing Date, no assignment of any rights provided for herein may be made by
any Party without the written consent of the other Party, which consent shall
not be unreasonably withheld.
52
14.5 GOVERNING LAW. THE MAKING, PERFORMANCE, INTERPRETATION, AND CONSTRUCTION
OF THIS AGREEMENT SHALL BE DETERMINED AND GOVERNED EXCLUSIVELY BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUSIVE OF ANY CONFLICT OF
LAW RULES WHICH MAY REFER TO THE LAWS OF ANOTHER JURISDICTION.
14.6 SECTION HEADINGS. The Section headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
14.7 FURTHER ASSURANCES. Subject to the terms and conditions herein provided,
each of the Parties agrees to use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper,
or advisable under applicable laws and regulations to consummate the purchase
and sale of the Acquired Assets in accordance with the terms of this Agreement.
In case at any time any further action is necessary or desirable to carry out
the purposes of this Agreement, the appropriate officers of each Party to the
Agreement are hereby directed and authorized to use their good faith efforts to
effectuate all such action.
14.8 ENTIRE AGREEMENT. This Agreement, together with the Ancillary Agreements
and the Disclosure Schedules (Including any updates thereto), embodies the
entire agreement and understanding between the Parties hereto relating to the
subject matter hereof and supersedes any prior letters of intent, agreements,
and understandings relating to the subject matter hereof.
14.9 NO THIRD PARTY BENEFICIARIES. Nothing expressed or referred to in this
Agreement is intended or shall be construed to give any Person other than the
Parties to this Agreement or their respective successors or permitted assigns
any legal or equitable right, remedy, or claim under or in respect of the
Agreement or any provision contained herein, it being the intention of the
Parties to the Agreement that the Agreement shall be for the sole and exclusive
benefit of such Parties or such successors and assigns and not for the benefit
of any other person (Including the Employees).
14.10 COUNTERPARTS. Separate counterpart copies of this Agreement may be signed
by the Parties hereto, with the same effect as though all of the Parties had
signed one copy of the Agreement.
14.11 SEVERABILITY. If any provision of this Agreement shall be held invalid
under any applicable law, such invalidity shall not affect any other provision
of the Agreement that can be given effect without the invalid provision and, to
this end, the provisions hereof are severable. The covenants and provisions of
this Agreement are separate and independent. With regard to all dates and time
periods set forth or referred to in the Agreement, time is of the essence.
14.12 INTERPRETATION OF AGREEMENT. The Parties hereto acknowledge and agree that
this Agreement has been negotiated at arm's length and between Parties equally
sophisticated and knowledgeable in the matters dealt with in the Agreement.
Accordingly, any rule of law, court decision, or other legal precedent that
would require interpretation of any ambiguities in the Agreement against the
Party that has drafted it is not applicable and is waived. The Parties hereto
also acknowledge and agree that the Agreement pertains to the purchase and sale
of certain defined assets and, notwithstanding anything to the contrary herein,
shall be interpreted as such and not as pertaining to the purchase and sale of
any of the Seller or their businesses as going concerns.
14.13 WAIVER OF TRIAL BY JURY; JURISDICTION. Each Party hereto hereby
irrevocably and unconditionally waives trial by jury in any action pertaining to
any and all disputes under this Agreement. Each Party hereto hereby consents to
jurisdiction of any lawsuit concerning a dispute under this Agreement in the
Federal District Courts located in the State of Delaware.
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14.14 GENERAL DISCLAIMER. Except as set forth in Articles III and IV of this
Agreement, neither Seller nor anyone acting on its behalf has made any further
representation or warranty, either express or implied, concerning the subject
matter of the Agreement and the transactions contemplated hereby, Including any
further representation or warranty concerning the physical nature or condition
of the Acquired Assets, the existence or nonexistence of Materials of
Environmental Concern in, on, at, or under the Acquired Assets, or use of the
Acquired Assets, and Buyer have not relied on any such further representation or
warranty. This Agreement and the instruments delivered at Closing pursuant
hereto shall not be governed by the warranties provided by the Uniform
Commercial Code as adopted in any jurisdiction. Except for representations and
warranties expressly set forth in the Agreement, the Schedules hereto, and the
documents delivered at the Closing, no other representations or warranties,
either express or implied, have been made by or on behalf of Seller or relied
upon by Buyer. OTHER THAN EXPRESS REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS CONTAINED IN THIS AGREEMENT, OR IN ANY INSTRUMENT OF CONVEYANCE OR
OTHER DOCUMENT EXECUTED AND DELIVERED AT CLOSING PURSUANT TO THIS AGREEMENT,
BUYER (A) UNDERSTANDS AND AGREES THAT NEITHER SELLER NOR ANYONE ACTING ON ITS
BEHALF MAKE ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO
THE BUSINESS, THE ACQUIRED ASSETS OR ASSUMED OBLIGATIONS REFERRED TO HEREIN, THE
CONDITION OR WORKMANSHIP OF ANY ACQUIRED ASSET, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, OR THE CAPACITY, STABILITY, UTILITY,
SALABILITY, OPERATION, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR
A PARTICULAR PURPOSE THEREOF AND (B) ACCEPTS SUCH ACQUIRED ASSETS ON AN "AS IS,
WHERE IS, WITH ALL FAULTS" BASIS, SUBJECT TO THE EXPRESS REPRESENTATIONS AND
WARRANTIES OF SELLER CONTINUED IN THIS AGREEMENT. BUYER ASSUMES THE FULL RISK OF
FUTURE PROSPECTS, CONTINUATION OF RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS, AS
WELL AS THE BUSINESS AND FINANCIAL RISK, INCLUDING THE NEED FOR SUBSTANTIAL
WORKING CAPITAL, IN CONNECTION WITH THE OPERATION OF THE BUSINESS AFTER CLOSING.
14.15 PUBLIC ANNOUNCEMENTS. Buyer and Seller agree that, from the date hereof
through and Including the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued or made by any
Party hereto without the prior consent of the other Party (which consent shall
not be unreasonably withheld), except (a) as such release or announcement may be
required by law or the rules or regulations of any securities exchange (or in
the opinion of counsel such release or announcement is appropriate or desirable
under or in light of such laws and regulations), in which case the Party making
the release or announcement shall allow the other Party reasonable time to
comment on such release or announcement in advance of such issuance, and (b)
that Seller may make such an announcement to its employees, in which case Seller
shall allow Buyer reasonable time to comment on such release of announcement in
advance of such issuance. Notwithstanding the foregoing, Buyer and Seller shall
cooperate to prepare press releases to be issued on the Closing Date and at the
time of the signing of this Agreement. Buyer and Seller agree to keep the terms
of this Agreement confidential, except to the extent required by applicable law
or for financial reporting purposes and except that the Parties may disclose
such terms to their respective representatives as necessary in connection with
the ordinary conduct of their respective businesses (so long as such Persons
agree to keep the terms of this Agreement confidential).
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties hereto have executed the Agreement as of
the 1st day of October, 2004.
SELLER:
RIP ▇▇▇▇▇▇▇ TRUCK SERVICE CENTER, INC.
By: /s/▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name:_____________________________________
Title: Chief Financial Officer & Treasurer
SELLER PARENT:
B.R.G., INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name:_____________________________________
Title: Chief Financial Officer & Treasurer
BUYER:
TA OPERATING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name:_____________________________________
Title: Executive VP & Chief Financial Officer
BUYER PARENT:
TRAVELCENTERS OF AMERICA, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name:_____________________________________
Title: Executive VP & Chief Financial Officer
55
EXHIBIT A
INVENTORY PROCEDURES
1) A physical count of the Inventory at each Travel Center shall be made by
Seller using practices and procedures that are consistent with Seller's
historical methods. Seller will use a combination of its own employees and
independent inventory services ("Inventory Services"), consistent with
past practice, to make a physical accounting of inventory. Seller shall
make a physical accounting of the Inventory (the "Inventory Count") on or
within the five day period preceding the Closing Date (the "Inventory
Date"), in accordance with these inventory procedures. Both Parties may
have representatives present during the Inventory Count. Seller shall pay
the cost of the Inventory Services, if any.
2) The Seller shall provide to Buyer inventory extension documentation at the
conclusion of the physical count of the Inventory, which documentation
shall be used by the Parties to support the Inventory Summary Reports.
3) Each Travel Center will be open for business during the Inventory Count.
4) Electronic calculators or data terminals or other methods will be
utilized. The Seller will staff its crew, and will require any Inventory
Service used to staff its crew, to ensure the physical inventory of each
Travel Center is completed in a reasonable period of time. The Inventory
Count will be taken for each Travel Center at such time as close to the
Closing Date as is reasonably possible.
5) Fuel or lubricant levels will be recorded by reading the VeeterRoot meters
connected to the applicable tanks and verified by stick readings, as
reconciled by each Travel Center.
6) Seller and the Inventory Service, if any, and if desired, a representative
of Buyer, will tour each Travel Center prior to the beginning of the
physical count to identify those areas that could cause Inventory Count
problems.
7) Seller will prepare an "Inventory Summary Report" at the conclusion of the
Inventory Count and will furnish Buyer with a copy of such report.
8) The amount to be paid by Buyer to Seller for the Inventory shall be
determined by totaling the Inventory Summary Reports. The Inventory shall
be valued at Seller's Cost.
9) As used in this schedule "Seller's Cost" shall mean the actual cost to
Seller for any item of Inventory as reflected in Seller's books and
records and consistent with past inventory practices and procedures.
10) Non-Saleable and Obsolete Inventory shall be Excluded Assets, and Buyer
shall use its commercially reasonable efforts to preserve and protect the
same until Seller picks up such Non-Saleable and Obsolete Inventory.
Seller shall pick up such Non-Saleable and Obsolete Inventory within 15
days of Closing.