SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)*
Crown Central Petroleum Corporation
(Name of Issuer)
Class B Common Stock
(Title of Class of Securities)
228219-30-9
(CUSIP Number)
Clive R. O'Grady
McGuire, Woods, Battle & Boothe LLP
1050 Connecticut Avenue, N.W.
Suite 1200
Washington, D.C. 20036
(202) 857-1737
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 30, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of
this Schedule 13D, and is filing this schedule because of
240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the
following box [ ].
Note. Schedules filed in paper format shall include a
signed original and five copies of the schedule, including
all exhibits. See Rule 13d-7 for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out
for a recording person's initial filing on this form with
respect to the subject class of securities, and for any
subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover
page shall not be deemed to be ?filed? for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the Act,
but shall be subject to all other provisions of the Act
(however, see the Notes).
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos.
of Above Persons (Entities Only)
Gateway Gathering and Marketing Company 52-1659249
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization State of Maryland
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
591,629
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.26%
14) Type of Reporting Person (See Instructions)
CO
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Rosemore Holdings, Inc. 52-2133454
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization State of Maryland
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
591,629
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.26%
14) Type of Reporting Person (See Instructions)
CO
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Ruth Carol R. Marder
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
Number of 7) Sole Voting Power 908
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 908
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
592,537
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.28%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Henry A. Rosenberg, Jr.
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
United States of America
Number of 7) Sole Voting Power 240,169
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 240,169
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
831,798
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 15.36%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Judith R. Hoffberger
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
United States of America
Number of 7) Sole Voting Power 419
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 419
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
592,048
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.27%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Edward L. Rosenberg
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
United States of America
Number of 7) Sole Voting Power 37,079
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 37,079
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
628,708
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.89%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Jeffrey A. Hoffberger
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a)
(b) X
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
United States of America
Number of 7) Sole Voting Power 175
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 175
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
591,804
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.26%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Lisa J. Bertelsen
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a)
(b) X
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
591,629
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 11.26%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Frank B. Rosenberg
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a)
(b) X
3) SEC Use Only
4) Source of Funds (See Instructions)
00
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization
Number of 7) Sole Voting Power 42,714
Shares Bene-
ficially 8) Shared Voting Power 591,629
Owned by
Each 9) Sole Dispositive Power 42,714
Reporting
Person With 10) Shared Dispositive Power 591,629
11) Aggregate Amount Beneficially Owned by Each Reporting
Person
634,343
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11) 12.00%
14) Type of Reporting Person (See Instructions)
IN
[COMMENT]
<PAGE>
Item 1. Security and Issuer
This statement relates to the Class B Common Stock, $5.00
par value (the "Crown Class B Common Stock"), of Crown Central
Petroleum Corporation, a Maryland corporation ("Crown"), which
has its principal executive offices at The Blaustein Building,
One North Charles Street, Baltimore, Maryland, 21201-3740.
Item 2. Identity and Background
This statement is filed on behalf of the Gateway Gathering
and Marketing Company ("Gateway") Group, which consists of the
persons listed below except that Lisa J. Bertelsen and Jeffrey
A. Hoffberger who are listed because of their familial
relationship to the Group, disclaim Group membership. If no
address is given, the person's business address is c/o Gateway
Gathering and Marketing Company, The Blaustein Building, 23rd
Floor, One North Charles Street, Baltimore, MD 21201-3740.
The Gateway Group is, except for Gateway and Rosemore H
oldings, Inc. ("Holdings"), and Lisa J. Bertelsen, a sub-group
of the ATAPCO Group of beneficial owners of Crown Class B Common
Stock, which, on February 14, 1992, filed a statement on
Schedule 13D with respect to holdings that include the shares
acquired in the transaction at issue here. The ATAPCO Group
included American Production and Trading Corporation ("American
Trading"); American Trading's wholly owned subsidiary ATAPCO,
Inc. ("ATAPCO"); and certain descendants of Louis Blaustein who,
together with other family members, owned all of the outstanding
stock of American Trading, and many of whom also beneficially
own shares of Crown Class B Common Stock. On July 1, 1998, the
ATAPCO Group of beneficial owners of Crown Class B Common Stock
filed Amendment No. 1 to Schedule 13D ("Amendment No. 1") and on
December 18, 1998 filed Amendment No. 2 to Schedule 13D
("Amendment No. 2"), and on January 8, 1999 filed Amendment No.
3 to Schedule 13D ("Amendment No. 3"), all relating to the
reorganization of American Trading that forms the basis for this
filing.
The Gateway Group is the group consisting of the
corporations and individuals that acquired beneficial ownership
of the shares of Crown Common Stock formerly held by ATAPCO,
[COMMENT]
<PAGE>
Inc. when the transaction described in Amendment No. 1,
Amendment No. 2, Amendment No. 3 and in this statement occurred.
[COMMENT]
<PAGE>
A. Gateway Gathering and Marketing Company, a Maryland
corporation, which has its principal offices at The Blaustein
Building, 23rd Floor, One North Charles Street, Baltimore, MD
21201-3740. Gateway is engaged in the businesses of
exploration, production, gathering, marketing and trading of oil
and gas.
The names of the executive officers (including officers in
charge of principal business units, divisions and functions and
officers who perform policy-making functions) and directors of
Rosemore, their business or residence addresses and their
present principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted are set forth
below. If no business or residence address is given, the
executive officer or director's business address is c/o Gateway
Gathering and Marketing Company, The Blaustein Building, 23rd
Floor, One North Charles Street, Baltimore, MD 21201-3740.
Henry A. Rosenberg, Jr. Chairman of the Board of
Crown Central Petroleum Gateway and Director of
Corporation Holdings; Chairman of the
The Blaustein Building Board, President, Chief
22nd Floor Executive Officer, Chief
One North Charles Street Operating Officer and Director
Baltimore, Maryland 21201-3740 of Crown Central Petroleum
Corporation.
Edward L. Rosenberg President and Chief Executive
Officer and Director of
Gateway, and President and
Director of Holdings.
Kenneth W. Trout Chief Operating Officer and
Executive Vice President of
Gateway, and Director of
Holdings.
Barry L. Miller Chief Financial Officer,
Senior Vice President and
Treasurer of Gateway, and
Director of Holdings.
[COMMENT]
<PAGE>
Tommie E. Yates Senior Vice President, Oil and
Gateway Gathering and Marketing Gas Operations, of Gateway.
Company
7676 Hillmont, Suite 350
Houston, Texas 77040
Jeffrey A. Hoffberger Vice President and Director of
Gateway and Director of
Holdings; self-employed
professional audio engineer.
Lisa Joy Bertelsen Vice President and Director of
Gateway; photographer.
Clive R. G. O'Grady Secretary and Director of
McGuire, Woods, Battle & Gateway and of Holdings;
Boothe LLP Partner, McGuire, Woods,
1050 Connecticut Avenue, N.W. Battle & Boothe LLP, One James
Suite 1200 Center, 901 E. Cary Street,
Washington, D.C. 20036 Richmond, VA 23219.
Ruth Carol R. Marder Director of Gateway.
Judith R. Hoffberger Director of Gateway.
B. Rosemore Holdings, Inc., a Maryland corporation, which
has its principal offices at The Blaustein Building, 23rd Floor,
One North Charles Street, Baltimore, MD 21201-3740. Holdings is
a wholly owned subsidiary of Gateway, engaged in the business of
holding the publicly traded investment securities owned by
Gateway.
The names of the executive officers (including officers in
charge of principal business units, divisions and functions and
officers who perform policy-making functions) and directors of
Holdings, their business or residence addresses and their
present principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted are set forth
below. If no business or residence address is given, the
executive officer or director's business address is c/o Gateway
Gathering and Marketing Company, The Blaustein Building, 23rd
Floor, One North Charles Street, Baltimore, MD 21201-3740.
[COMMENT]
<PAGE>
Edward L. Rosenberg President and Director of
Holdings, and President, Chief
Executive Officer and Director
of Gateway.
Barry L. Miller Director of Holdings and Chief
Financial Officer, Senior Vice
President and Treasurer of
Gateway.
Clive R. G. O'Grady Secretary and Director of
McGuire, Woods, Battle & Holdings and of Gateway;
Boothe LLP Partner, McGuire, Woods,
1050 Connecticut Avenue, N.W. Battle & Boothe LLP, One James
Suite 1200 Center, 901 E. Cary Street,
Washington, D.C. 20036 Richmond, VA 23219.
Kenneth W. Trout Director of Holdings, and
Chief Operating Officer and
Vice President of Gateway.
Jeffrey A. Hoffberger Director of Holdings and Vice
President and Director of
Gateway; self-employed
professional audio engineer.
Henry A. Rosenberg, Jr. Director of Holdings and
Crown Central Petroleum Chairman of the Board of
Corporation Gateway; Chairman of the
The Blaustein Building Board, President, Chief
22nd Floor Executive Officer, Chief
One North Charles Street Operating Officer and Director
Baltimore, Maryland 21201-3740 of Crown Central Petroleum
Corporation.
C. Ruth Carol R. Marder Not applicable
[COMMENT]
<PAGE>
D. Henry A. Rosenberg, Jr. Chairman of the Board,
Crown Central Petroleum President, Chief Executive
Corporation Officer, Chief Operating
One North Charles Street Officer and Director of Crown
Baltimore, Maryland 21201
E. Judith R. Hoffberger Not applicable
F. Barbara B. Hirschhorn Not applicable
G. Edward L. Rosenberg President, Chief Executive
Gateway Gathering Officer and Director of
and Marketing Company Gateway, and President and
23rd Floor Director of Holdings
One North Charles Street
Baltimore, MD 21201
H. Jeffrey A. Hoffberger Self-Employed Professional
Audio Engineer
I. Lisa J. Bertelsen Photographer
During the last five years, none of the Gateway or Holdings
executive officers, directors or Group members has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors)nor been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction
as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or
state securities law or finding any violations with respect to
such laws.
Gateway and Holdings are Maryland corporations. All of the
Gateway and Holdings executive officers, directors and Group
members are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
The transfer of the shares of Crown Common Stock to
Holdings was effected pursuant to and as a part of an Agreement
and Plan of Reorganization (the "Reorganization Agreement")
under which American Trading was reorganized (the
"Reorganization") into three separate companies by spinning off
[COMMENT]
<PAGE>
two companies from American Trading. The stockholders in each
of American Trading and the two companies spun off from American
Trading were all stockholders in American Trading prior to the
Reorganization, and in the Reorganization each stockholder of
American Trading became a stockholder in only one of the three
resultant companies, one of which is Gateway. Consideration for
the transfer of all of American Trading?s shares of common stock
in Crown was in the form of and subsumed within an exchange by
the Gateway shareholders of all their shares of stock in
American Trading for all of the shares of stock in Gateway,
following the transfer of certain assets, including the Crown
shares, from ATAPCO and American Trading to Holdings as a
wholly-owned subsidiary of Gateway (both ATAPCO and Gateway
being wholly-owned subsidiaries of American Trading prior to
the Reorganization of American Trading pursuant to the
Reorganization Agreement).
In connection with the Reorganization, Holdings, as a
wholly-owned subsidiary of Gateway, received, among other
things, all of American Trading?s shares of common stock in Crown
Central. The shares of common stock of Crown Central that
Gateway received consist of approximately 591,629 shares (or
approximately 11.26% of the issued and outstanding shares) of
Crown Class B Common Stock as well as approximately 2,366,526
shares (or approximately 49.12% of the issued and outstanding
shares) of Class A Common Stock, $5.00 par value per share, of
Crown Central (?Crown Class A Common Stock?). The holders of
Crown Class B Common Stock are entitled to one-tenth vote per
share and have the right to elect two directors. The holders of
Crown Class A Common Stock are entitled to one vote per share
and have the right to elect all directors other than those to be
elected by the other classes of stock.
The Reorganization Agreement provides that as soon as
practicable after Crown releases its earnings for the three-and
six-month periods ending on June 30, 1999 (the "Earnings
Release"), an updated valuation of the shares of Crown Class B
Common Stock and Crown Class A Common Stock will be calculated
based on the average per share closing prices of the shares of
Crown Class B Common Stock and Crown Class A Common Stock as
reported on the American Stock Exchange over a 10 day period
beginning on and including the first trading date following the
issuance by Crown Central of its Earnings Release. In the event
that this updated valuation of the shares of Crown Class B
[COMMENT]
<PAGE>
Common Stock and Crown Class A Common Stock is greater than the
valuation calculated immediately prior to the effective time of
the Reorganization (the "Effective Time"), each of Gateway and
the other two companies resulting from the Reorganization will
be entitled to a percentage of that increase (as set forth in
the Reorganization Agreement) and Gateway will pay to each of
such companies cash in amounts necessary to achieve that end.
Item 4. Purpose of Transaction
The acquisition of beneficial ownership of Crown Common
Stock by the Gateway Group was an element of the Reorganization
described in the ATAPCO Group's Class B Amendment No. 1 and
Class B Amendment No. 2 and Class B Amendment No. 3. On
December 30, 1998, unanimous consent of the shareholders of
American Trading was obtained for the Reorganization. Effective
December 31, 1998 at 11:59 p.m., American Trading completed the
Reorganization. All of the shares of Gateway are held by
existing trusts for the benefit of certain descendants of Ruth
B. Rosenberg as set forth in Item 6 below.
As Chairman of the Board, President, Chief Executive
Officer and Chief Operating Officer of Crown, Henry A.
Rosenberg, Jr. regularly explores actions and transactions that
may be advantageous to Crown, including but not limited to
transactions that might result in material changes in the
business, corporate structure, management, policies, governing
instruments, capitalization, securities or regulatory or
reporting obligations of Crown. Neither Mr. Rosenberg nor the
Gateway Group currently has any plans or proposals that relate
to or would result in any of the actions set forth in parts (a)
through (j) of Item 4.
Item 5. Interest in Securities of the Issuer
(a) In the aggregate, the Gateway Group beneficially owns
913,093 shares of Crown Class B Common Stock, representing
16.66% of the outstanding Crown Class B Common Stock.
(b) See Cover Pages, Items 7, 8, 9 and 10.
Under the will of Henrietta Blaustein, First Union National
Bank ("First Union"), a national banking association, is a
trustee with Henry A. Rosenberg, Jr. and Barbara B. Hirschhorn
[COMMENT]
<PAGE>
(a cousin of Mr. Rosenberg) of three trusts (the "Blaustein
Testamentary Trusts") for the benefit of Mr. Rosenberg, Judith R.
Hoffberger, and Ruth R. Marder, respectively. The Blaustein
Testamentary Trusts own a total of 1,869 shares of Gateway.
First Union, the principal business of which is general
banking and Financial Services, is located at 7 St. Paul Street,
2nd Floor, Baltimore, Maryland, 21202. Barbara B. Hirschhorn is
a citizen of the United States, and her address is c/o American
Trading and Production Corporation, 24th Floor, The Blaustein
Building, One North Charles Street, Baltimore, Maryland, 21201.
During the last five years, neither Barbara B. Hirschhorn
nor First Union has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which such person was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violations with respect to such laws.
(c) Except (i) as described herein, (ii) the acquisition
of 120 shares by Henry A. Rosenberg, Jr. through the Crown
Central Petroleum Corporation Employee Savings Plan and the
Crown Central Petroleum Corporation Employees Supplemental
Savings Plan (collectively, the ?Crown Plans?) on December 4,
1998 at $9.3675 per share and the acquisition of 41 shares by
Frank B. Rosenberg through the Crown Plans on that same date at
that same price, (iii) the acquisition of 208 shares by Henry A.
Rosenberg, Jr. through the Crown Plans on January 7, 1999 at
$7.1086 per share and the acquisition of 127 shares by Frank B.
Rosenberg through the Crown Plans on that same date at that same
price, and (iv) the forfeiture by Edward L. Rosenberg upon his
resignation from Crown on December 31, 1998 of 14,530 shares of
Crown Class B Common Stock held pursuant to a performance vested
restricted stock program, there were no Crown Class B Common
Stock transactions effected during the past 60 days by the
persons named in response to paragraph (a).
(d) None.
[COMMENT]
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Pursuant to the Reorganization described in Item 4, the
shares of Crown previously held by ATAPCO are now held by
Holdings, a wholly-owned subsidiary of Gateway. Also pursuant to
the Reorganization, all of the shares of Gateway have been
distributed to trusts for the benefit of certain descendants of
Ruth B. Rosenberg (daughter of Louis Blaustein)as described below.
Louis Blaustein's grandson, Henry A. Rosenberg, Jr. (the
Chairman, President and Chief Executive Officer and Chief
Operating Officer of Crown, and Chairman of the Board of Gateway)
individually owns 79,343 shares of Crown Class B Common Stock and
owns options which, if exercised, would entitle him to acquire a
further 160,826 shares of Crown Class B Common Stock.
Louis Blaustein's granddaughters, Ruth Carol R. Marder and
Judith R. Hoffberger, individually own 908 and 419 shares,
respectively, of Crown Class B Common Stock.
Henry A. Rosenberg, Jr. and his sisters, Ruth Carol R. Marder
and Judith R. Hoffberger, are trustees under ten trust agreements
of their mother, Ruth B. Rosenberg, each dated July 28, 1972, for
the benefit of Lisa J. Bertelsen, Julie G. Davidson, Jeffrey A.
Hoffberger, Judith R. Hoffberger, Russell J. Hoffberger, Ruth R.
Marder, Edward L. Rosenberg, Frank B. Rosenberg, Henry A.
Rosenberg, Jr., and Henry A. Rosenberg, III, respectively. The
Ruth B. Rosenberg trusts of July 28, 1972 own a total of 20,500
shares of Gateway.
Mr. Rosenberg, Mrs. Marder and Mrs. Hoffberger are also
trustees under another three trust agreements of their mother,
each dated September 29, 1953, and of three additional trusts
under their mother's will (the latter three, the "Rosenberg
Testamentary Trusts?), in each case for the benefit of Mr.
Rosenberg, Mrs. Marder and Mrs. Hoffberger, respectively. The
Ruth B. Rosenberg trusts of September 29, 1953 own a total of
60,000 shares of Gateway and the Rosenberg Testamentary Trusts own
a total of 12,773 shares of Gateway. Mr. Rosenberg, Mrs. Marder
and Mrs. Hoffberger are also trustees under three trust agreements
of their grandmother, Henrietta Blaustein, each dated December 31,
1953, for the benefit of Mr. Rosenberg, Mrs. Marder, and Mrs.
[COMMENT]
<PAGE>
Hoffberger, respectively. The Henrietta Blaustein trusts of
December 31, 1953 own a total of 8,400 shares of Gateway.
Mr. Rosenberg is also a trustee, with his cousin Barbara B.
Hirschhorn and First Union National Bank, of the Blaustein
Testamentary Trusts, which own a total of 1,869 shares of Gateway.
Henry A. Rosenberg Jr.'s sons, Edward L. Rosenberg
(President, Chief Executive Officer and Director of Gateway, and
President and Director of Holdings) and Frank B. Rosenberg (Senior
Vice President - Marketing of Crown), individually own 3,060
shares and 11,831 shares of Crown Class B Common Stock,
respectively, and individually own options which, if exercised,
would entitle each of them to acquire a further 34,019 shares and
30,883 shares of Crown Class B Common Stock, respectively.
Mrs. Hoffberger's son Jeffrey A. Hoffberger owns 175 shares
of Crown Class B Common Stock.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 - Agreement relating to the filing of joint
acquisition statements as required by Rule 13d-1(f).
Exhibit 2 - Powers of Attorney.
Exhibit 3 - Agreement and Plan of Reorganization of American
Trading and Production Corporation (conformed composite copy).
[COMMENT]
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
GATEWAY GATHERING AND
MARKETING COMPANY
January 11, 1999 By: /s/Edward L. Rosenberg
Name: Edward L. Rosenberg
Title: President
ROSEMORE HOLDINGS, INC.
January 11, 1999 By: /s/Edward L. Rosenberg
Name: Edward L. Rosenberg
Title: President
January 11, 1999 Ruth R. Marder*
Ruth R. Marder
January 11, 1999 Henry A. Rosenberg, Jr.*
Henry A. Rosenberg, Jr.
January 11, 1999 Judith R. Hoffberger*
Judith R. Hoffberger
January 11, 1999 /s/Edward L. Rosenberg
Edward L. Rosenberg
[COMMENT]
<PAGE>
January 11, 1999 Jeffrey A. Hoffberger*
Jeffrey A. Hoffberger
January 11, 1999 Lisa J. Bertelsen*
Lisa J. Bertelsen
January 11, 1999 Frank B. Rosenberg*
Frank B. Rosenberg
/s/Edward L. Rosenberg
*Edward L. Rosenberg
Attorney-in-fact
[COMMENT]
<PAGE>
EXHIBITS
Exhibit Sequentially
Number Description Numbered Page
1. Agreement relating to the filing
of joint acquisition statements
as required by Rule 13d-1(f).
2. Powers of Attorney.
3. Agreement and Plan of Reorganization
of American Trading and Production
Corporation (conformed composite copy).
[COMMENT]
<PAGE>
EXHIBIT 1
Each of the undersigned persons certifies that such person is
individually eligible to use Schedule 13D for reporting such
person's ownership of Class A and Class B Common Stock of Crown
Central Petroleum Corporation, that the information concerning
such person contained in Schedule 13D is complete and accurate and
that such person does not know or have any reason to believe that
information with respect to any of the other undersigned persons
making the filing is inaccurate. Each of the undersigned persons
acknowledges and agrees that Schedule 13D is filed on behalf of
all of the undersigned persons.
GATEWAY GATHERING AND
MARKETING COMPANY
January 11, 1999 By: /s/Edward L. Rosenberg
Name: Edward L. Rosenberg
Title: President
ROSEMORE HOLDINGS, INC.
January 11, 1999 By: /s/Edward L. Rosenberg
Name: Edward L. Rosenberg
Title: President
January 11, 1999 Ruth R. Marder*
Ruth R. Marder
January 11, 1999 Henry A. Rosenberg, Jr.*
Henry A. Rosenberg, Jr.
January 11, 1999 Judith R. Hoffberger*
Judith R. Hoffberger
January 11, 1999 /s/Edward L. Rosenberg
Edward L. Rosenberg
January 11, 1999 Jeffrey A. Hoffberger*
Jeffrey A. Hoffberger
[COMMENT]
<PAGE>
January 11, 1999 Lisa J. Bertelsen*
Lisa J. Bertelsen
January 11, 1999 Frank B. Rosenberg*
Frank B. Rosenberg
/s/Edward L. Rosenberg
*Edward L. Rosenberg
Attorney-in-fact
[COMMENT]
<PAGE>
Exhibit 2
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A.
Rosenberg, Jr. and Edward L. Rosenberg, and either of them (with
full power in either of them to act alone), her true and lawful
attorneys-in-fact, granting such attorneys the authority in her name
on her behalf to execute individually and in each capacity stated
below and to file with the Securities and Exchange Commission,
national securities exchanges and other appropriate persons,
Schedules 13D and 13G pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (?the Act?), and Forms 3, 4, and 5
pursuant to Section 16(a) of the Act, as applicable, with respect
to the securities of Crown Central Petroleum Corporation and any
and all amendments to such schedules and forms, with all exhibits
and documents required to be filed in connection therewith.
The undersigned further grants unto such attorneys, and either
of them, full power and authority to perform each and every act
necessary to be done in order to accomplish the foregoing filings as
fully as she herself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Ruth Carol R. Marder
Ruth Carol R. Marder
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Edward L.
Rosenberg his true and lawful attorney-in-fact, granting such attorney
the authority in his name on his behalf to execute individually and
in each capacity stated below and to file with the Securities and
Exchange Commission, national securities exchanges and other
appropriate persons, Schedules 13D and 13G pursuant to Section 13(d)
of the Securities Exchange Act of 1934, as amended (?the Act?), and
Forms 3, 4, and 5 pursuant to Section 16(a) of the Act, as applicable,
with respect to the securities of Crown Central Petroleum Corporation
and any and all amendments to such schedules and forms, with all
exhibits and documents required to be filed in connection therewith.
The undersigned further grants unto such attorney full power
and authority to perform each and every act necessary to be done in
order to accomplish the foregoing filings as fully as he himself might
do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Henry A. Rosenberg, Jr.
Henry A. Rosenberg, Jr.
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A. Rosenberg,
Jr. and Edward L. Rosenberg, and either of them (with full power in
either of them to act alone), her true and lawful attorneys-in-fact,
granting such attorneys the authority in her name on her behalf to
execute individually and in each capacity stated below and to file with
the Securities and Exchange Commission, national securities exchanges
and other appropriate persons, Schedules 13D and 13G pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended ("the
Act"), and Forms 3, 4, and 5 pursuant to Section 16(a) of the Act, as
applicable, with respect to the securities of Crown Central Petroleum
Corporation and any and all amendments to such schedules and forms,
with all exhibits and documents required to be filed in connection
therewith.
The undersigned further grants unto such attorneys, and either
of them, full power and authority to perform each and every act
necessary to be done in order to accomplish the foregoing filings as
fully as she herself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Judith R. Hoffberger
Judith R. Hoffberger
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A. Rosenberg,
Jr. and Edward L. Rosenberg, and either of them (with full power in
either of them to act alone), his true and lawful attorneys-in-fact,
granting such attorneys the authority in his name on his behalf to
execute individually and in each capacity stated below and to file
with the Securities and Exchange Commission, national securities
exchanges and other appropriate persons, Schedules 13D and 13G pursuant
to Section 13(d) of the Securities Exchange Act of 1934, as amended
("the Act"), and Forms 3, 4, and 5 pursuant to Section 16(a) of the
Act, as applicable, with respect to the securities of Crown Central
Petroleum Corporation and any and all amendments to such schedules
and forms, with all exhibits and documents required to be filed in
connection therewith.
The undersigned further grants unto such attorneys, and either
of them, full power and authority to perform each and every act
necessary to be done in order to accomplish the foregoing filings as
fully as he himself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Jeffrey A. Hoffberger
Jeffrey A. Hoffberger
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A. Rosenberg,
Jr. his true and lawful attorney-in-fact, granting such attorney the
authority in his name on his behalf to execute individually and in each
capacity stated below and to file with the Securities and Exchange
Commission, national securities exchanges and other appropriate persons,
Schedules 13D and 13G pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (?the Act?), and Forms 3, 4, and 5
pursuant to Section 16(a) of the Act, as applicable, with respect to
the securities of Crown Central Petroleum Corporation and any and all
amendments to such schedules and forms, with all exhibits and documents
required to be filed in connection therewith.
The undersigned further grants unto such attorney full power and
authority to perform each and every act necessary to be done in order to
accomplish the foregoing filings as fully as he himself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Edward L. Rosenberg
Edward L. Rosenberg
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A. Rosenberg,
Jr. and Edward L. Rosenberg, and either of them individually (with full
power in either of them to act alone), her true and lawful
attorneys-in-fact, granting such attorneys the authority in her name on
her behalf to execute individually and in each capacity stated below and
to file with the Securities and Exchange Commission, national securities
exchanges and other appropriate persons, Schedules 13D and 13G pursuant
to Section 13(d) of the Securities Exchange Act of 1934, as amended ("the
Act"), and Forms 3, 4, and 5 pursuant to Section 16(a) of the Act, as
applicable, with respect to the securities of Crown Central Petroleum
Corporation and any and all amendments to such schedules and forms, with
all exhibits and documents required to be filed in connection therewith.
The undersigned further grants unto such attorneys, and either of
them, full power and authority to perform each and every act necessary to
be done in order to accomplish the foregoing filings as fully as she
herself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 29th day of December, 1998.
/s/Lisa J. Bertelsen
Lisa J. Bertelsen
[COMMENT]
<PAGE>
POWER OF ATTORNEY
The undersigned hereby appoints and authorizes Henry A. Rosenberg,
Jr. and Edward L. Rosenberg, and either of them (with full power in
either of them to act alone), his true and lawful attorneys-in-fact,
granting such attorneys the authority in his name on his behalf to
execute individually and in each capacity stated below and to file
with the Securities and Exchange Commission, national securities
exchanges and other appropriate persons, Schedules 13D and 13G pursuant
to Section 13(d) of the Securities Exchange Act of 1934, as amended
("the Act"), and Forms 3, 4, and 5 pursuant to Section 16(a) of the Act,
as applicable, with respect to the securities of Crown Central Petroleum
Corporation and any and all amendments to such schedules and forms, with
all exhibits and documents required to be filed in connection therewith.
The undersigned further grants unto such attorneys, and either of
them, full power and authority to perform each and every act necessary
to be done in order to accomplish the foregoing filings as fully as he
himself might do.
IN WITNESS WHEREOF, the undersigned have signed this power of
attorney this 9th day of January, 1999.
/s/Frank B.Rosenberg
[COMMENT]
<PAGE>
Exhibit 3
AGREEMENT AND PLAN OF REORGANIZATION
among
AMERICAN TRADING AND PRODUCTION CORPORATION
and
AMERICAN TRADING REAL ESTATE COMPANY, INC.
and
GATEWAY GATHERING AND MARKETING COMPANY
and
ATAPCO, INC.
Dated as of December 8, 1998
and
amended on December 29, 1998 and December 30, 1998
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. General . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Terms Defined Elsewhere in this Agreement . . . . 26
SECTION 1.3. References; Interpretation . . . . . . . . . . . 27
ARTICLE II. THE REORGANIZATION . . . . . . . . . . . . . . . . . . . 27
SECTION 2.1. The Reorganization -General . . . . . . . . . . . 27
SECTION 2.2. The Share Exchanges . . . . . . . . . . . . . . . 28
ARTICLE III. VALUATION; POST-EXCHANGE DATE ADJUSTMENTS . . . . . . . 29
SECTION 3.1. Valuation . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.2. First Adjusted Crown Central Valuation . . . . . 30
SECTION 3.3. Second Adjusted Crown Central Valuation . . . . . 30
SECTION 3.4. Vantage/Interstate Exchange . . . . . . . . . . . 31
ARTICLE IV. COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . 32
SECTION 4.1. Information Statement and Consents; Securities
Laws . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.2. Employee Matters . . . . . . . . . . . . . . . . 32
SECTION 4.3. Certain Licenses and Permits . . . . . . . . . . 33
SECTION 4.4. Transfer of Agreements . . . . . . . . . . . . . . 34
SECTION 4.5. Split Dollar Insurance . . . . . . . . . . . . . . 35
SECTION 4.6. Cash Payments . . . . . . . . . . . . . . . . . . 35
SECTION 4.7. Placement of Assets . . . . . . . . . . . . . . . 35
SECTION 4.8. Resignations . . . . . . . . . . . . . . . . . . . 36
SECTION 4.9. Directors as of the Effective Time . . . . . . . . 36
SECTION 4.10. Calvert; Baltimore Management . . . . . . . . . . 37
SECTION 4.11. Charters . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.12. No Appraisal Rights . . . . . . . . . . . . . . . 37
SECTION 4.13. Other Transactions . . . . . . . . . . . . . . . . 37
SECTION 4.14. Conduct of Business Prior to Exchange Date . . . . 37
SECTION 4.15. Directors' and Officers' Indemnification and
Insurance . . . . . . . . . . . . . . . . . . . 38
SECTION 4.16. Year 2000 . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.17. Shared Assets . . . . . . . . . . . . . . . . . . 38
SECTION 4.18. Further Assurances . . . . . . . . . . . . . . . 38
SECTION 4.19. Limited Representations or Warranties . . . . . . 39
SECTION 4.20. Guarantees . . . . . . . . . . . . . . . . . . . 40
SECTION 4.21. Witness Services . . . . . . . . . . . . . . . . 42
SECTION 4.22. Compliance with IRS Ruling . . . . . . . . . . . 42
i
<PAGE>
SECTION 4.23. Transfers Not Effected Prior to the Share
Exchanges; Transfers Deemed Effective as of the
Exchange Date . . . . . . . . . . . . . . . . . 44
SECTION 4.24. Conveyancing and Assumption Instruments . . . . . 44
SECTION 4.25. Ancillary Agreements . . . . . . . . . . . . . . . 45
SECTION 4.26. Preparation of Audited Balance Sheets . . . . . . 45
SECTION 4.27. Unpaid Senior Notes . . . . . . . . . . . . . . . 45
SECTION 4.28. Lease Liability Adjustments . . . . . . . . . . . 45
ARTICLE V. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 46
SECTION 5.1. Conditions to the ATAPCO Merger and Share
Exchanges . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI. SHARED LIABILITIES AND INDEMNIFICATION . . . . . . . . . 48
SECTION 6.1. Shared Liability Account . . . . . . . . . . . . . 48
SECTION 6.2. Payment of Shared Liabilities from Shared
Liability Account . . . . . . . . . . . . . . . 49
SECTION 6.3. Other Provisions Regarding Shared Liabilities . . 50
SECTION 6.4. Indemnification Obligations . . . . . . . . . . . 51
SECTION 6.5. Procedures for Indemnification With Respect to
Third Party Claims . . . . . . . . . . . . . . . 51
SECTION 6.6. Procedures for Third Party Claims That Are for
Shared Liabilities . . . . . . . . . . . . . . . 54
SECTION 6.7. Indemnification and Contribution Payments . . . . 55
SECTION 6.8. Tax Treatment of Indemnification and
Contribution Payments . . . . . . . . . . . . . 55
ARTICLE VII. ACCESS TO INFORMATION . . . . . . . . . . . . . . . . . 55
SECTION 7.1. Provision of Corporate Records . . . . . . . . . . 55
SECTION 7.2. Access to Information . . . . . . . . . . . . . . 57
SECTION 7.3. Reimbursement; Other Matters . . . . . . . . . . . 57
SECTION 7.4. Confidentiality . . . . . . . . . . . . . . . . . 57
SECTION 7.5. Privileged Matters . . . . . . . . . . . . . . . . 58
SECTION 7.6. Ownership of Information . . . . . . . . . . . . . 60
SECTION 7.7. Limitation of Liability . . . . . . . . . . . . . 61
SECTION 7.8. Other Agreements Providing for Exchange of
Information . . . . . . . . . . . . . . . . . . 61
ARTICLE VIII. ADMINISTRATIVE SERVICES . . . . . . . . . . . . . . . 61
SECTION 8.1. Performance of Services . . . . . . . . . . . . . 61
SECTION 8.2. Independence . . . . . . . . . . . . . . . . . . . 61
ARTICLE IX. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . 62
SECTION 9.1. Negotiation . . . . . . . . . . . . . . . . . . . 62
SECTION 9.2. Arbitration . . . . . . . . . . . . . . . . . . . 62
SECTION 9.3. Continuity of Service and Performance . . . . . . 63
ii
<PAGE>
ARTICLE X. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.1. Policies and Rights Included Within Assets . . . 63
SECTION 10.2. Post-Exchange Date Claims . . . . . . . . . . . . 65
SECTION 10.3. Administration; Other Matters . . . . . . . . . . 67
SECTION 10.4. Agreement for Waiver of Conflict and Shared
Defense . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.5. Cooperation . . . . . . . . . . . . . . . . . . . 69
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.1. Complete Agreement; Construction . . . . . . . . 70
SECTION 11.2. Ancillary Agreements . . . . . . . . . . . . . . 70
SECTION 11.3. Counterparts . . . . . . . . . . . . . . . . . . 70
SECTION 11.4. Survival of Agreements . . . . . . . . . . . . . 70
SECTION 11.5. Expenses . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.6. Notices . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.7. Waivers . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.8. Amendments . . . . . . . . . . . . . . . . . . . 72
SECTION 11.9. Assignment . . . . . . . . . . . . . . . . . . . 72
SECTION 11.10. Successors and Assigns . . . . . . . . . . . . . 73
SECTION 11.11. Termination . . . . . . . . . . . . . . . . . . 73
SECTION 11.12. Subsidiaries . . . . . . . . . . . . . . . . . . 73
SECTION 11.13. Third Party Beneficiaries . . . . . . . . . . . 74
SECTION 11.14. Title and Headings . . . . . . . . . . . . . . . 74
SECTION 11.15. Schedules . . . . . . . . . . . . . . . . . . . 74
SECTION 11.16. GOVERNING LAW . . . . . . . . . . . . . . . . . 74
SECTION 11.17. Consent to Jurisdiction . . . . . . . . . . . . 74
SECTION 11.18. Severability . . . . . . . . . . . . . . . . . . 75
Exhibit A Agreement and Plan of Merger between American Trading and
Production Corporation and Atapco, Inc.
Exhibit B Agreement and Plan of Merger between American Trading Real
Estate Properties, Inc. and Atapco, Inc.
iii
<PAGE>
Schedules to Agreement and Plan of Reorganization
Schedule Description
1.1(d) Aggregate Valuation
1.1(o)(i) ATRECO Assets
1.1(p) ATRECO Group Balance Sheet
1.1(q) Description of ATRECO Real Estate Business
1.1(s) ATRECO Form of Consent, Letter of Representations and Power
of Attorney
1.1(t)(i) ATRECO Group Contracts
1.1(u) Business Entities Comprising the ATRECO Group
1.1(w)(i) Exceptions to ATRECO Liabilities
1.1(ac) Members of ATRECO Stockholder Group
1.1(ah)(i) Baltimore Management Assets
1.1(ai) Baltimore Management Group Balance Sheet
1.1 (aj) Baltimore Management Business
1.1(ak)(i) Baltimore Management Group Contracts
1.1(al) Business Entities Comprising Baltimore Management Group
1.1(aq)(i) Calvert Assets
1.1(ar) Calvert Group Balance Sheet
1.1(at)(i) Calvert Group Contracts
1.1(au) Business Entities Comprising the Calvert Group
1.1(ba) Conveyancing and Assumption Instruments
1.1(bf)(i) Gateway Assets
1.1(bg) Gateway Group Balance Sheet
1.1(bh) Description of Gateway Business
1.1(bj) Gateway Form of Consent, Letter of Representations and Power
of Attorney
1.1(bk)(i) Gateway Group Contracts
1.1(bl) Business Entities Comprising the Gateway Group
1.1(bn)(i) Exceptions to Gateway Liabilities
1.1(bt) Members of Gateway Stockholder Group
1.1(ce)(i) New ATAPCO Assets
1.1(cf) New ATAPCO Group Balance Sheet
1.1(cg) Description of New ATAPCO Real Estate Business
1.1(ch) New ATAPCO Consent, Letter of Representations and Power of
Attorney
1.1(ci)(i) New ATAPCO Group Contracts
1.1(cj) Business Entities Comprising the New ATAPCO Group
1.1(cl)(i) Exceptions to New ATAPCO Liabilities
1.1(cq) Members of New ATAPCO Stockholder Group
2.1(a) Reorganization Steps
iv
<PAGE>
4.2(a)(i) New ATAPCO Employees
4.2(a)(ii) ATRECO Employees
4.2(a)(iii) Gateway Employees
4.2(a)(iv) Calvert Employees
4.2(a)(v) Baltimore Management Employees
4.3(a)(i) New ATAPCO Licenses and Permits
4.3(a)(ii) ATRECO Licenses and Permits
4.3(a)(iii) Gateway Licenses and Permits
4.3(a)(iv) Calvert Licenses and Permits
4.3(a)(v) Baltimore Management Licenses and Permits
4.5 Allocation of Split Dollar Asset and AFR Loan Receivable
4.6(a) ATAPCO Debt
4.9 Directors of AI, ATRECO and Gateway
4.10(a) Calvert Limited Liability Company Agreement
4.10(b) Baltimore Management Limited Liability Company Agreement
4.11(a) ATRECO Charter
4.11(b) Gateway Charter
4.11(c) AI Certificate of Incorporation
4.17 Shared Assets
4.20(a)(i) Guarantees of ATRECO and Gateway Liabilities by New ATAPCO
4.20(b) Guarantees of New ATAPCO and Gateway Liabilities by ATRECO
4.20(c) Guarantees of New ATAPCO and ATRECO Liabilities by Gateway
4.20(e) Guarantees of Calvert and Baltimore Management Liabilities
5.1(i) Certification of Satisfaction or Waiver of Conditions
7.7(b) Continuing Agreements Between or Among the Parties
v
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 8,
1998, and amended on December 29, 1998 and December 30, 1998
(collectively, this "Agreement"), by and among AMERICAN TRADING AND
PRODUCTION CORPORATION, a Maryland corporation ("ATAPCO"), AMERICAN
TRADING REAL ESTATE COMPANY, INC., a Maryland corporation ("ATRECO"),
GATEWAY GATHERING AND MARKETING COMPANY, a Maryland corporation
("GATEWAY"), and ATAPCO, INC. a Delaware corporation ("AI").
WHEREAS, ATRECO, Gateway and AI are indirect or direct
wholly-owned subsidiaries of ATAPCO;
WHEREAS, ATAPCO, acting through its direct and indirect
subsidiaries, currently conducts a number of businesses, including,
without limitation, (i) real estate ownership, management and development
(the "Real Estate Business"), (ii) oil and gas exploration and
production, and oil and gas gathering, marketing and trading, (iii)
commercial sound and communications product manufacturing and
distribution (the "Atlas/Soundolier Business"), (iv) office products
manufacturing and distribution (the "OPG Business"), (v) domestic and
international distribution of proprietary electronic access control
systems (the "Northern Computers Business") and (vi) the manufacture,
sale and installation of high-quality amplifiers and electronic devices
(the "Millbank Electronics Business");
WHEREAS, ATAPCO indirectly holds substantial investment
assets, including, without limitation, (i) shares of common stock of
Amoco Corporation (the "Amoco Common Stock"), (ii) shares of common stock
of First Union Corporation (the "First Union Common Stock"), (iii) shares
of common stock of Capital One Financial Corporation (the "Capital One
Common Stock") (the Amoco Common Stock, the First Union Common Stock and
the Capital One Common Stock are collectively referred to herein as the
"Principal Common Stock Investments"), (iv) shares of class A common
stock ("Crown Central Class A Common Stock") and shares of class B common
stock ("Crown Central Class B Common Stock" and collectively with the
Crown Central Class A Common Stock, the "Crown Central Common Stock") of
Crown Central Petroleum Corporation ("Crown Central"), and (v) shares of
common stock of ISA International Plc (the "ISA International Common
Stock");
WHEREAS, the Board of Directors of ATAPCO has determined that
it is appropriate, desirable and in the best interests of the holders of
shares of the ATAPCO Common Stock (as defined herein) to consummate the
transactions contemplated herein;
WHEREAS, each of ATAPCO, ATRECO, Gateway and AI has determined
that it is necessary and desirable to set forth the transactions required
to effect the Reorganization (as defined herein) and to set forth other
agreements that will govern certain other matters.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, and intending to be
legally bound hereby, ATAPCO, ATRECO, Gateway and AI agree as follows:
<PAGE>
ARTICLE I. DEFINITIONS
SECTION 1.1. General. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority or
any arbitrator.
(b) "Administrative Services Agreement" shall mean the
Administrative Services Agreement to be entered into among Baltimore
Management, ATAPCO, AI, ATRECO, Gateway, and Calvert.
(c) "Affiliate" shall mean, when used with respect to a specified
Person, another Person that controls, is controlled by, or is under
common control with the Person specified. As used in this Section
1.1(c), "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or other
interests, by contract or otherwise.
(d) "Aggregate Valuation" shall mean the aggregate value as set
forth on Schedule 1.1(d) of those Assets of the ATAPCO Group described on
Schedule 1.1(d), as adjusted in accordance with Section 3.1.
(e) "Ancillary Agreements" shall mean the Conveyancing and
Assumption Agreements, the Employee Benefits Agreement, the Intellectual
Property Agreement, the Tax Allocation Agreement, the Administrative
Services Agreement and the Amended and Restated Limited Liability Company
Agreements for Calvert and Baltimore Management.
(f) "Assets" shall mean assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or
other third parties or elsewhere), whether real, personal or mixed,
tangible, intangible or contingent, in each case whether or not recorded
or reflected or required to be recorded or reflected on the books and
records or financial statements of any Person, including, without
limitation, the following:
(i) all accounting and other books, records and files whether
in paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment,
furniture, office equipment, automobiles, trucks, aircraft and
other transportation equipment, special and general tools,
test devices, prototypes and models and other tangible
personal property;
(iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
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(iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of
a Security Interest in real property, lessor, sublessor,
lessee, sublessee or otherwise;
(v) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person, all bonds,
notes, debentures or other securities issued by any Subsidiary
or any other Person, all loans, advances or other extensions
of credit or capital contributions to any Subsidiary or any
other Person and all other investments in securities of any
Person;
(vi) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or
services, unfilled orders for the manufacture and sale of
products and other contracts, agreements or commitments;
(vii) all deposits, letters of credit and performance and
surety bonds;
(viii) all written technical information, data,
specifications, research and development information,
engineering drawings, operating and maintenance manuals, and
materials and analyses prepared by consultants and other third
parties;
(ix) all domestic and foreign patents, copyrights, trade
names, trademarks, service marks and registrations and
applications for any of the foregoing, mask works, trade
secrets, inventions, data bases, other proprietary information
and licenses from third Persons granting the right to use any
of the foregoing;
(x) all computer applications, programs and other software,
including operating software, network software, firmware,
middleware, design software, design tools, systems
documentation and instructions;
(xi) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists,
customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing
files, vendor and customer drawings, formulations and
specifications, quality records and reports and other books,
records, studies, surveys, reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other accounts
and notes receivable;
(xiii) all rights under contracts or agreements, all claims or
rights against any Person arising from the ownership of any
Asset, all rights in connection with any bids or offers and
all claims, choses in action or similar rights, whether
accrued or contingent;
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(xiv) all rights under Policies and all rights in the nature
of insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or
arrangements.
(g) "ATAPCO" shall mean American Trading and Production
Corporation, a Maryland corporation (and any successor thereto, including
AI), prior to the Effective Time.
(h) "ATAPCO Class A Common Stock" shall mean the Class A common
stock, without par value, of ATAPCO.
(i) "ATAPCO Class B Common Stock" shall mean the Class B common
stock, without par value, of ATAPCO.
(j) "ATAPCO Common Stock" shall mean collectively the ATAPCO Class
A Common Stock and the ATAPCO Class B Common Stock.
(k) "ATAPCO Group" shall mean ATAPCO, its Subsidiaries and any
predecessors thereto, as in existence at or at any time within one year
prior to the Effective Time for all purposes other than Section 1.1(cw),
for which purpose only, it shall mean ATAPCO, its Subsidiaries and any
predecessors thereto, as in existence at or at any time prior to the
Effective Time.
(l) "ATAPCO Merger" shall mean the merger of ATAPCO with and into
AI, with AI as the surviving corporation, as more fully described in the
ATAPCO Merger Agreement and in Schedule 2.1(a).
(m) "ATAPCO Merger Agreement" shall mean the Agreement and Plan of
Merger, substantially in the form attached hereto as Exhibit A, providing
for the ATAPCO Merger.
(n) "ATRECO" shall mean American Trading Real Estate Company,
Inc., a Maryland corporation.
(o) "ATRECO Assets" shall mean:
(i) 62% of any Asset relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank, N.A.
and those Assets identified on Schedule 1.1(o)(i) hereto, all
such Assets expressly intended by this Agreement to be held
and owned by members of the ATRECO Group immediately following
the Effective Time;
(ii) subject to Article X, any rights of any member of the
ATRECO Group under any of the ATRECO Policies and the ATRECO
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Shared Policies, including any rights thereunder arising after
the Exchange Date in respect of any Policies that are
occurrence Policies with respect to occurrences that occur
prior to the Effective Time;
(iii) any ATRECO Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any
ATRECO Asset or the ATRECO Business;
(iv) any Assets reflected on the ATRECO Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
Gateway and its Subsidiaries) primarily relating to or used in
the ATRECO Business. The intention of this clause (v) is only
to rectify any inadvertent omission of transfer or conveyance
of any Asset that, had the parties given specific
consideration to such Asset as of the date hereof, would have
otherwise been classified as an ATRECO Asset. No Asset shall
be deemed to be an ATRECO Asset solely as a result of this
clause (v) if such Asset is within the category or type of
Asset expressly covered by the subject matter of an Ancillary
Agreement. In addition, no Asset shall be deemed an ATRECO
Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by ATRECO on or prior to the
first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the ATRECO
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary
Agreement (or the Schedules hereto or thereto) as Assets to be
retained by or transferred to any member of the New ATAPCO
Group, the Gateway Group, the Calvert Group or the Baltimore
Management Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
an ATRECO Asset, any item explicitly included on Schedule
1.1(o)(i) shall take priority over any provision of the text
hereof.
(p) "ATRECO Balance Sheet" shall mean the audited consolidated
balance sheet of the ATRECO Group as of the Exchange Date immediately
following the Effective Time, including the notes thereto, to be prepared
pursuant to Section 4.26 in accordance with United States generally
accepted accounting principles ("GAAP") consistently applied. For
information purposes only, an unaudited pro forma consolidated balance
sheet of the ATRECO Group as of June 30, 1998, is set forth as Schedule
1.1(p) hereto.
(q) "ATRECO Business" shall mean that portion of the Real Estate
Business described in Schedule 1.1(q).
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(r) "ATRECO Common Stock" shall mean the common stock, par value
$.01 per share, of ATRECO.
(s) "ATRECO Consent, Letter of Representations and Power of
Attorney" shall mean a written consent, letter of representations and
power of attorney substantially in the form attached hereto as Schedule
1.1(s).
(t) "ATRECO Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by
which ATAPCO or any of its Subsidiaries or any of their respective Assets
is bound, whether or not in writing, except for any such contract or
agreement that is expressly contemplated to be transferred or assigned
to, or retained by, any member of the New ATAPCO Group, the Gateway
Group, the Calvert Group or the Baltimore Management Group, in each case,
pursuant to any provision of this Agreement or any Ancillary Agreement:
(i) any contract or agreement listed or described on Schedule
1.1(t)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the ATRECO Group to the extent related to the ATRECO
Business or the ATRECO Assets;
(iii) any contract or agreement that relates primarily to the
ATRECO Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to, or
retained by, any member of the ATRECO Group; and
(v) any guarantee, indemnity, representation or warranty of
any division, business unit or member of the ATRECO Group to
the extent related to the ATRECO Business or the ATRECO
Assets.
(u) "ATRECO Group" shall mean, immediately following the Effective
Time, ATRECO and each Subsidiary of ATAPCO which is a Subsidiary of
ATRECO immediately following the Effective Time as identified on Schedule
1.1(u) hereto, which Schedule also indicates the amount of ATRECO's
ownership interest therein.
(v) "ATRECO Indemnitees" shall mean each member of the ATRECO
Group, each of their respective directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the
foregoing.
(w) "ATRECO Liabilities" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(w)(i), (y) any employee-related Liabilities that
are subject to the Employee Benefits Agreement, and (z) any
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Taxes that are subject to the Tax Allocation Agreement)
primarily relating to, arising out of or resulting from:
(A) the operation of the ATRECO Business, as conducted
at any time prior to, on or after the Exchange Date
(including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or
not such act or failure to act is or was within such
Person's authority)); or
(B) the operation at any time after the Effective Time
of any business conducted by ATRECO or any Subsidiary of
ATRECO (including any Liability relating to, arising out
of or resulting from any act or failure to act by any
director, officer, employee, agent or representative
(whether or not such act or failure to act is or was
within such Person's authority));
(ii) any Liability of ATRECO in respect of its portion of the
split dollar insurance Assets described in Section 4.5
following the Effective Time;
(iii) subject to Section 4.28 hereof, 31.58% (which shall be
increased to 33.33% from and following the date Calvert
ceases to use office space in The Blaustein Building) of
the total costs incurred following the Effective Time
under ATAPCO's and ATREPO's existing leases for the
office space on the 14th, 23rd and 24th floors in The
Blaustein Building and 100% of the total costs incurred
following the Effective Time in connection with parking
spaces used in the parking garages of the Blaustein
Building and/or the W.R. Grace Building by employees of
ATRECO;
(iv) 62% of any Liability relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank,
N.A.;
(v) any other Liability specifically identified as an "ATRECO
Liability" elsewhere in this Agreement or in any
Ancillary Agreement; and
(vi) 37.925% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (vi), the ATRECO
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be
retained or assumed by any member of the New ATAPCO
Group, the Gateway Group, the Calvert Group or the
Baltimore Management Group; or
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<PAGE>
(y) all agreements and obligations of any member of the
New ATAPCO Group, the Gateway Group, the Calvert Group or
the Baltimore Management Group under this Agreement or
any of the Ancillary Agreements to be performed after the
Effective Time.
(x) "ATRECO Percentage" shall mean 37.925%.
(y) "ATRECO Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary
of ATAPCO immediately prior to the Effective Time which relate to the
ATRECO Business but do not relate to the New ATAPCO Business, the Gateway
Business, the Calvert Business or the Baltimore Management Business.
(z) "ATRECO Share Exchange" shall mean the exchange at the
Effective Time of shares of ATRECO Common Stock for all of the shares of
ATAPCO Common Stock held by the ATRECO Stockholders, as more fully
described in Section 2.2.
(aa) "ATRECO Shared Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate
in part to the ATRECO Business and in part to the New ATAPCO, Gateway,
Baltimore Management or Calvert Businesses.
(ab) "ATRECO Stockholder" shall mean any member of the ATRECO
Stockholder Group.
(ac) "ATRECO Stockholder Group" shall mean the ATAPCO stockholders
set forth on Schedule 1.1(ac).
(ad) "ATREPO" shall mean American Trading Real Estate Properties,
Inc., a Maryland corporation.
(ae) "ATREPO Merger" shall mean the merger of ATREPO with and into
AI, with AI as the surviving corporation, as more fully described in the
ATREPO Merger Agreement.
(af) "ATREPO Merger Agreement" shall mean the Agreement and Plan of
Merger, substantially in the form attached hereto as Exhibit B, providing
for the ATREPO Merger.
(ag) "Baltimore Management" shall mean Baltimore Management
Services, LLC, a Maryland limited liability company.
(ah) "Baltimore Management Assets" shall mean:
(i) those Assets identified on Schedule 1.1(ah)(i) hereto,
all such Assets expressly intended by this Agreement to be
held and owned by members of the Baltimore Management Group
immediately following the Effective Time;
(ii) subject to Article X, any rights of any member of the
Baltimore Management Group under any of the Baltimore
Management Policies and the Baltimore Management Shared
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<PAGE>
Policies, including any rights thereunder arising after the
Exchange Date in respect of any Policies that are occurrence
Policies, with respect to occurrences that occur prior to the
Effective Time;
(iii) any Baltimore Management Contracts, any rights or claims
arising thereunder, and any other rights or claims or
contingent rights or claims primarily relating to or arising
from any Baltimore Management Asset or Baltimore Management
Business;
(iv) any Assets reflected on the Baltimore Management Balance
Sheet or the accounting records supporting such balance sheet;
and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to
or used in the Baltimore Management Business. The intention
of this clause (v) is only to rectify any inadvertent omission
of transfer or conveyance of any Asset that, had the parties
given specific consideration to such Asset as of the date
hereof, would have otherwise been classified as a Baltimore
Management Asset. No Asset shall be deemed to be a Baltimore
Management Asset solely as a result of this clause if such
Asset is within the category or type of Asset expressly
covered by the subject matter of an Ancillary Agreement. In
addition, no Asset shall be deemed a Baltimore Management
Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by Baltimore Management or on
behalf of Baltimore Management by New ATAPCO, ATRECO or
Gateway on or prior to the first anniversary of the Exchange
Date.
Notwithstanding the foregoing clauses (i) to (v), the
Baltimore Management Assets shall in any event exclude any
and all Assets that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Assets to be retained by or transferred to any
member of the New ATAPCO Group, the ATRECO Group, the Gateway
Group or the Calvert Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
a Baltimore Management Asset, any item explicitly included on
Schedule 1.1(ah)(i) shall take priority over any provision of
the text hereof.
(ai) "Baltimore Management Balance Sheet" shall mean the
consolidated balance sheet of the Baltimore Management Group as of the
Exchange Date immediately following the Effective Time, including the
notes thereto, to be prepared pursuant to Section 4.26 in accordance with
GAAP consistently applied. For information purposes only, an unaudited
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pro forma consolidated balance sheet of the Baltimore Management Group as
of June 30, 1998, is set forth as Schedule 1.1(ai) hereto.
(aj) "Baltimore Management Business" shall be as set forth on
Schedule 1.1(aj).
(ak) "Baltimore Management Contracts" shall mean the following
contracts and agreements to which ATAPCO or any of its Subsidiaries is a
party or by which ATAPCO or any of its Subsidiaries or any of their
respective Assets is bound, whether or not in writing, except for any
such contract or agreement that is expressly contemplated to be
transferred or assigned to any member of the New ATAPCO Group, the ATRECO
Group, the Gateway Group or the Calvert Group, in each case, pursuant to
any provision of this Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on
Schedule 1.1(ak)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the Baltimore Management Group to the extent related to the
Baltimore Management Business or the Baltimore Management
Assets;
(iii) any contract or agreement that relates primarily to the
Baltimore Management Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to, or
retained by, any member of the Baltimore Management Group; and
(v) any guarantee, indemnity, representation or warranty of
any division, business unit or member of the Baltimore
Management Group to the extent related to the Baltimore
Management Business or the Baltimore Management Assets.
(al) "Baltimore Management Group" shall mean, immediately following
the Effective Time, Baltimore Management and each Subsidiary of ATAPCO
which is a Subsidiary of Baltimore Management immediately following the
Effective Time as identified on Schedule 1.1(al) hereto, which Schedule
also indicates the amount of Baltimore Management's interest therein.
(am) "Baltimore Management Liabilities" shall mean:
(i) all Liabilities (except (x) any employee-related
Liabilities that are subject to the Employee Benefits
Agreement and (y) any Taxes that are subject to the Tax
Allocation Agreement) primarily relating to, arising out of or
resulting from:
(A) the operation of the Baltimore Management Business
(including, without limitation, the performance by
Baltimore Management pursuant to Article VIII hereof of
certain administrative services), as conducted at any
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time prior to, on or after the Exchange Date (including
any Liability relating to, arising out of or resulting
from any act or failure to act by any director, officer,
employee, agent or representative (whether or not such
act or failure to act is or was within such Person's
authority)); or
(B) the operation at any time after the Effective Time
of any business conducted by Baltimore Management or any
Subsidiary of Baltimore Management (including any
Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer,
employee, agent or representative (whether or not such
act or failure to act is or was within such Person's
authority));
(ii) any other Liability specifically identified as a
"Baltimore Management Liability" elsewhere in this Agreement
or in any Ancillary Agreement; and
(iii) subject to Section 4.28 hereof, 29.68% of the total
costs incurred following the Effective Time under ATAPCO's and
ATREPO's existing leases for the office space on the 14th,
23rd and 24th floors in The Blaustein Building, 100% of the
total costs incurred following the Effective Time under
ATAPCO's and ATRECO's existing leases for the storage space in
the basements of The Blaustein Building and the W.R. Grace
Building, and 100% of the total costs incurred following the
Effective Time in connection with parking spaces used in the
parking garages of The Blaustein Building and/or the W.R.
Grace Building by employees of Baltimore Management.
Notwithstanding the foregoing clauses (i) to (iii), the
Baltimore Management Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be
retained or assumed by any member of the New ATAPCO
Group, the ATRECO Group, the Gateway Group or the Calvert
Group; or
(y) all agreements and obligations of any member of the
New ATAPCO Group, the ATRECO Group, the Gateway Group or
the Calvert Group under this Agreement or any of the
Ancillary Agreements to be performed after the Effective
Time.
(an) "Baltimore Management Policies" shall mean all Policies,
current or past, which are owned or maintained by or on behalf of ATAPCO
or any Subsidiary of ATAPCO immediately prior to the Effective Time which
relate to the Baltimore Management Business but do not relate to the New
ATAPCO Business, the ATRECO Business, the Gateway Business or the Calvert
Business.
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<PAGE>
(ao) "Baltimore Management Shared Policies" shall mean all
Policies, current or past, which are owned or maintained by or on behalf
of ATAPCO or any Subsidiary of ATAPCO immediately prior to the Effective
Time which relate in part to the Baltimore Management Business and in
part to the New ATAPCO, ATRECO, Gateway or Calvert Businesses.
(ap) "Calvert" shall mean Calvert Holdings, LLC, a Maryland limited
liability company.
(aq) "Calvert Assets" shall mean any Asset of ATAPCO or any
Subsidiary of ATAPCO that is not an ATRECO Asset, a Baltimore Management
Asset, a Gateway Asset or a New ATAPCO Asset, including but not limited
to:
(i) those Assets identified on Schedule 1.1(aq)(i) hereto,
all such Assets expressly intended by this Agreement to be
held and owned by members of the Calvert Group immediately
following the Effective Time;
(ii) subject to Article X, any rights of any member of the
Calvert Group under any of the Calvert Policies or Calvert
Shared Policies, including any rights thereunder arising after
the Exchange Date in respect of any Policies that are
occurrence Policies with respect to occurrences that are prior
to the Effective Time;
(iii) any Calvert Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any
Calvert Asset or Calvert Business;
(iv) any Assets reflected on the Calvert Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to
or used in the Calvert Business. The intention of this clause
(v) is only to rectify any inadvertent omission of transfer or
conveyance of any Asset that, had the parties given specific
consideration to such Asset as of the date hereof, would have
otherwise been classified as a Calvert Asset. No Asset shall
be deemed to be a Calvert Asset solely as a result of this
clause if such Asset is within the category or type of Asset
expressly covered by the subject matter of an Ancillary
Agreement. In addition, no Asset shall be deemed a Calvert
Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by Calvert or on behalf of
Calvert by New ATAPCO, ATRECO or Gateway on or prior to the
first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the Calvert
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary
Agreement (or the Schedules hereto or thereto) as Assets to be
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retained by or transferred to any member of the New ATAPCO
Group, the ATRECO Group, the Gateway Group or the Baltimore
Management Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
a Calvert Asset, any item explicitly included on Schedule
1.1(aq)(i) shall take priority over any provision of the text
hereof.
(ar) "Calvert Balance Sheet" shall mean the consolidated balance
sheet of the Calvert Group as of the Exchange Date immediately following
the Effective Time, including the notes thereto, to be prepared pursuant
to Section 4.26 in accordance with GAAP consistently applied. For
information purposes only, an unaudited pro forma consolidated balance
sheet of the Calvert Group as of June 30, 1998, is set forth as Schedule
1.1(ar) hereto.
(as) "Calvert Business" shall mean the Atlas/Soundolier Business,
the OPG Business, the Northern Computers Business, the Millbank
Electronics Business, the ownership and operation of the Monroe Property
and the ownership of ISA International Common Stock, to the extent held
by ATAPCO or any of its Subsidiaries immediately prior to the Effective
Time.
(at) "Calvert Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by
which ATAPCO or any of its Subsidiaries or any of their respective Assets
is bound, whether or not in writing, except for any such contract or
agreement that is expressly contemplated to be transferred or assigned to
any member of the New ATAPCO Group, the ATRECO Group, the Gateway Group
or the Baltimore Management Group, in each case, pursuant to any
provision of this Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on
Schedule 1.1(at)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the Calvert Group to the extent related to the Calvert
Business or the Calvert Assets;
(iii) any contract or agreement that relates primarily to the
Calvert Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to, or
retained by, any member of the Calvert Group; and
(v) any guarantee, indemnity, representation or warranty of
any division, business unit or member of the Calvert Group to
the extent related to the Calvert Business or the Calvert
Assets.
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(au) "Calvert Group" shall mean, immediately following the
Effective Time, Calvert and each Subsidiary of ATAPCO which is a
Subsidiary of Calvert immediately following the Effective Time as
identified on Schedule 1.1(au) hereto, which Schedule also indicates the
amount of Calvert's ownership interest therein.
(av) "Calvert Liabilities" shall mean:
(i) all Liabilities (except (x) any employee-related
Liabilities that are subject to the Employee Benefits
Agreement and (y) any Taxes that are subject to the Tax
Allocation Agreement) primarily relating to, arising out of or
resulting from:
(A) the operation of the Calvert Business, as conducted
at any time prior to, on or after the Exchange Date
(including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or
not such act or failure to act is or was within such
Person's authority)); or
(B) the operation at any time after the Effective Time
of any business conducted by Calvert (including any
Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer,
employee, agent or representative (whether or not such
act or failure to act is or was within such Person's
authority));
(ii) any other Liability specifically identified as a "Calvert
Liability" elsewhere in this Agreement or in any Ancillary
Agreement;
(iii) subject to Section 4.28 hereof, 1.75% of the total costs
incurred following the Effective Time under ATAPCO's and
ATREPO's existing leases for the office space on the 14th,
23rd and 24th floors in The Blaustein Building and 100% of the
total costs incurred following the Effective Time in
connection with parking spaces used in the parking garages of
The Blaustein Building and/or the W.R. Grace Building by
employees of Calvert; and
(iv) any Liability on, relating to, or arising out of or in
connection with any compensation (including incentive
compensation) to be paid to Hans Fristedt for or relating to
his services to Calvert.
Notwithstanding the foregoing clauses (i) to (iv), the Calvert
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be
retained or assumed by any member of the New ATAPCO
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Group, the ATRECO Group, the Gateway Group or the
Baltimore Management Group; or
(y) all agreements and obligations of any member of the
New ATAPCO Group, the ATRECO Group, the Gateway Group or
the Baltimore Management Group under this Agreement or
any of the Ancillary Agreements to be performed after the
Effective Time.
(aw) "Calvert Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary
of ATAPCO immediately prior to the Effective Time which relate to the
Calvert Business but do not relate to the New ATAPCO Business, the ATRECO
Business, the Gateway Business or the Baltimore Management Business.
(ax) "Calvert Shared Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate
in part to the Calvert Business, and in part to the New ATAPCO, ATRECO,
Gateway or Baltimore Management Businesses.
(ay) "Claims Administration" shall mean the processing of claims
made under the Policies and the Shared Policies, including, without
limitation, the reporting of claims to the insurance carriers and the
management of the defense of claims.
(az) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including
any successor legislation.
(ba) "Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents to
be entered into to effect the transfer of Assets and the assumption of
Liabilities in the manner contemplated by this Agreement or any Ancillary
Agreement, or otherwise arising out of or relating to the transactions
contemplated by this Agreement or any Ancillary Agreement, which shall be
in substantially the forms attached hereto as Schedule 1.1(ba) for
transfers to be effected pursuant to the laws of one of the states of the
United States, or, if not appropriate for a given transfer, and for
transfers to be effected pursuant to non-U.S. Laws, shall be in such other
form or forms as the parties agree and as may be required by the laws of
the relevant jurisdiction.
(bb) "Effective Time" shall mean 11:59 p.m., Maryland time, on the
Exchange Date.
(bc) "Employee Benefits Agreement" shall mean the Employee Benefits
Agreement to be entered into among ATAPCO, ATRECO, AI, Gateway, Calvert
and Baltimore Management.
(bd) "Exchange Date" shall mean December 31, 1998.
(be) "Gateway" shall mean Gateway Gathering and Marketing Company,
a Maryland corporation.
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(bf) "Gateway Assets" shall mean:
(i) 38% of any Asset relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank, N.A.
and those Assets identified on Schedule 1.1(bf)(i) hereto, all
such Assets expressly intended by this Agreement to be held
and owned by members of the Gateway Group immediately
following the Effective Time;
(ii) subject to Article X, any rights of any member of the
Gateway Group under any of the Gateway Policies or Gateway
Shared Policies, including any rights thereunder arising after
the Exchange Date in respect of any Policies that are
occurrence Policies with respect to occurrences that are prior
to the Effective Time;
(iii) any Gateway Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any
Gateway Asset or the Gateway Business;
(iv) any Assets reflected on the Gateway Balance Sheet or the
accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO and its Subsidiaries) primarily relating to or used in
the Gateway Business. The intention of this clause (v) is
only to rectify any inadvertent omission of transfer or
conveyance of any Asset that, had the parties given specific
consideration to such Asset as of the date hereof, would have
otherwise been classified as a Gateway Asset. No Asset shall
be deemed to be a Gateway Asset solely as a result of this
clause (v) if such Asset is within the category or type of
Asset expressly covered by the subject matter of an Ancillary
Agreement. In addition, no Asset shall be deemed a Gateway
Asset solely as a result of this clause (v) unless a claim
with respect thereto is made by Gateway on or prior to the
first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the Gateway
Assets shall in any event exclude any and all Assets that are
expressly contemplated by this Agreement or any Ancillary
Agreement (or the Schedules hereto or thereto) as Assets to be
retained by or transferred to any member of the New ATAPCO
Group, the ATRECO Group, the Calvert Group or the Baltimore
Management Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
a Gateway Asset, any item explicitly included on Schedule
1.1(bf)(i) shall take priority over any provision of the text
hereof.
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(bg) "Gateway Balance Sheet" shall mean the audited consolidated
balance sheet of the Gateway Group as of the Exchange Date immediately
following the Effective Time, including the notes thereto, to be prepared
pursuant to Section 4.26 in accordance with GAAP consistently applied.
For information purposes only, an unaudited pro forma consolidated
balance sheet of the Gateway Group as of June 30, 1998, is set forth as
Schedule 1.1(bg) hereto.
(bh) "Gateway Business" shall mean the oil and gas exploration and
production, and the oil and gas gathering, marketing and trading business
described in Schedule 1.1(bh).
(bi) "Gateway Common Stock" shall mean the common stock, par value
$10 per share, of Gateway.
(bj) "Gateway Consent, Letter of Representations and Power of
Attorney" shall mean a written consent, letter of representations and
power of attorney substantially in the form attached hereto as Schedule
1.1(bj).
(bk) "Gateway Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by
which ATAPCO or any of its Subsidiaries or any of their respective Assets
is bound, whether or not in writing, except for any such contract or
agreement that is expressly contemplated to be transferred or assigned
to, or retained by, any member of the New ATAPCO Group, the ATRECO Group,
the Calvert Group or the Baltimore Management Group, in each case,
pursuant to any provision of this Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on
Schedule 1.1(bk)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the Gateway Group to the extent related to the Gateway
Business or the Gateway Assets;
(iii) any contract or agreement that relates primarily to the
Gateway Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to, or
retained by, any member of the Gateway Group; and
(v) any guarantee, indemnity, representation or warranty of
any division, business unit or member of the Gateway Group to
the extent related to the Gateway Business or the Gateway
Assets.
(bl) "Gateway Group" shall mean, immediately following the
Effective Time, Gateway and each Subsidiary of ATAPCO which is a
Subsidiary of Gateway immediately following the Effective Time as
identified on Schedule 1.1(bl) hereto, which Schedule also indicates the
amount of Gateway's ownership interest therein.
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(bm) "Gateway Indemnitees" shall mean each member of the Gateway
Group, each of their respective directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the
foregoing.
(bn) "Gateway Liabilities" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(bn)(i), (y) any employee-related Liabilities that
are subject to the Employee Benefits Agreement, and (z) any
Taxes that are subject to the Tax Allocation Agreement)
primarily relating to, arising out of or resulting from:
(A) the operation of the Gateway Business, as conducted
at any time prior to, on or after the Exchange Date
(including any Liability relating to, arising out of or
resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or
not such act or failure to act is or was within such
Person's authority)); or
(B) the operation at any time after the Effective Time
of any business conducted by Gateway or any Subsidiary of
Gateway (including any Liability relating to, arising out
of or resulting from any act or failure to act by any
director, officer, employee, agent or representative
(whether or not such act or failure to act is or was
within such Person's authority));
(ii) subject to Section 4.28 hereof, 9.23% of the total costs
incurred following the Effective Time under ATAPCO's and
ATREPO's existing leases for the office space on the 14th,
23rd and 24th floors in The Blaustein Building and 100% of the
total costs incurred following the Effective Time in
connection with parking spaces used in the parking garages of
The Blaustein Building and/or the W.R. Grace Building by
employees of Gateway;
(iii) 38% of any Liability relating to the swap transaction
involving Corporate Value Partners, LLC and NationsBank, N.A.;
(iv) any other Liability specifically identified as a "Gateway
Liability" elsewhere in this Agreement or in any Ancillary
Agreement; and
(v) 22.952% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (v), the Gateway
Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be
retained or assumed by any member of the New ATAPCO
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Group, the ATRECO Group, the Calvert Group or the
Baltimore Management Group; or
(y) all agreements and obligations of any member of the
New ATAPCO Group, the ATRECO Group, the Calvert Group or
the Baltimore Management Group under this Agreement or
any of the Ancillary Agreements to be performed after the
Effective Time.
(bo) "Gateway Percentage" shall mean 22.952%.
(bp) "Gateway Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary
of ATAPCO immediately prior to the Effective Time which relate to the
Gateway Business but do not relate to the New ATAPCO Business, the ATRECO
Business, the Calvert Business or the Baltimore Management Business.
(bq) "Gateway Share Exchange" shall mean the exchange at the
Effective Time of shares of Gateway Common Stock for all of the shares of
ATAPCO Common Stock held by the Gateway Stockholders, as more fully
described in Section 2.2.
(br) "Gateway Shared Policies" shall mean all Policies, current or
past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate
in part to the Gateway Business, and in part to the New ATAPCO, ATRECO,
Baltimore Management or Calvert Businesses.
(bs) "Gateway Stockholder" shall mean any member of the Gateway
Stockholder Group.
(bt) "Gateway Stockholder Group" shall mean the ATAPCO stockholders
set forth on Schedule 1.1(bt).
(bu) "Governmental Authority" shall mean any federal, state, local,
foreign or international court, government, department, commission,
board, bureau, agency, official or other regulatory, administrative or
governmental authority.
(bv) "Indemnifiable Losses" shall mean any and all losses,
Liabilities, claims, damages, demands, costs or expenses (including,
without limitation, reasonable attorneys' fees and any and all
out-of-pocket expenses) reasonably incurred in investigating, preparing
for or defending against any Actions or potential Actions or in settling
any Action or potential Action or in satisfying any judgment, fine or
penalty rendered in or resulting from any Action.
(bw) "Information Statement" shall mean the Information Statement
Offering Circular sent to all holders of ATAPCO Common Stock in
connection with the Reorganization, including any amendment or supplement
thereto.
(bx) "Insurance Administration" shall mean, with respect to each
Policy and Shared Policy, the accounting for premiums,
retrospectively-rated premiums, defense costs, indemnity payments,
deductibles and retentions, as appropriate, under the terms and
conditions of each of the Policies and Shared Policies; and the reporting
to excess insurance carriers of any losses or claims which may cause the
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per-occurrence, per claim or aggregate limits of any Policy or Shared
Policy to be exceeded, and the distribution of Insurance Proceeds as
contemplated by this Agreement.
(by) "Insurance Proceeds" shall mean those monies (i) received by
an insured from an insurance carrier or (ii) paid by an insurance carrier
on behalf of an insured, in either case net of any applicable premium
adjustment, retrospectively-rated premium, deductible, retention, or cost
of reserve paid or held by or for the benefit of such insured.
(bz) "Insured Claims" shall mean those Liabilities that,
individually or in the aggregate, are covered within the terms and
conditions of any of the Shared Policies, without regard to policy limits
whether or not subject to deductibles, co-insurance, uncollectibility or
retrospectively-rated premium adjustments.
(ca) "Intellectual Property Agreement" shall mean the Intellectual
Property Agreement to be entered into among ATAPCO, ATRECO, Gateway, AI,
Calvert and Baltimore Management.
(cb) "Liabilities" shall mean any and all losses, claims, charges,
debts, demands, Actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations,
covenants, contracts, controversies, agreements, promises, doings,
omissions, variances, guarantees, make whole agreements and similar
obligations, and other liabilities, including all contractual
obligations, whether absolute or contingent, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever arising, and including those arising under any law, rule,
regulation, Action, threatened or contemplated Action (including the
costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs
and expenses, whatsoever reasonably incurred in investigating, preparing
or defending against any such Actions or threatened or contemplated
Actions), order or consent decree of any Governmental Authority or any
award of any arbitrator or mediator of any kind, and those arising under
any contract, commitment or undertaking, including those arising under
this Agreement or any Ancillary Agreement, in each case, whether or not
recorded or reflected or required to be recorded or reflected on the
books and records or financial statements of any Person.
(cc) "Monroe Property" shall mean the parcel of approximately 84
acres owned by ATREPO in Monroe, Connecticut.
(cd) "New ATAPCO" shall mean Atapco, Inc., a Delaware corporation,
after the Effective Time.
(ce) "New ATAPCO Assets" shall mean:
(i) those Assets identified on Schedule 1.1(ce)(i) hereto,
all such Assets expressly intended by this Agreement to be
held and owned by members of the New ATAPCO Group immediately
following the Effective Time;
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(ii) subject to Article X, any rights of any member of the New
ATAPCO Group under any of the New ATAPCO Policies or the New
ATAPCO Shared Policies, including any rights thereunder
arising after the Exchange Date in respect of any Policies
that are occurrence Policies, with respect to occurrences that
occur prior to the Effective Time;
(iii) any New ATAPCO Contracts, any rights or claims arising
thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any New
ATAPCO Asset or the New ATAPCO Business;
(iv) any Assets reflected on the New ATAPCO Balance Sheet or
the accounting records supporting such balance sheet; and
(v) any and all Assets owned or held immediately prior to the
Effective Time by ATAPCO or any of its Subsidiaries (including
ATRECO, Gateway and their Subsidiaries) primarily relating to
or used in the New ATAPCO Business. The intention of this
clause (v) is only to rectify any inadvertent omission of
transfer or conveyance of any Asset that, had the parties
given specific consideration to such Asset as of the date
hereof, would have otherwise been classified as a New ATAPCO
Asset. No Asset shall be deemed to be a New ATAPCO Asset
solely as a result of this clause (v) if such Asset is within
the category or type of Asset expressly covered by the subject
matter of an Ancillary Agreement. In addition, no Asset shall
be deemed a New ATAPCO Asset solely as a result of this clause
(v) unless a claim with respect thereto is made by New ATAPCO
on or prior to the first anniversary of the Exchange Date.
Notwithstanding the foregoing clauses (i) to (v), the New
ATAPCO Assets shall in any event exclude any and all Assets
that are expressly contemplated by this Agreement or any
Ancillary Agreement (or the Schedules hereto or thereto) as
Assets to be retained by or transferred to any member of the
ATRECO Group, the Gateway Group, the Calvert Group or the
Baltimore Management Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
a New ATAPCO Asset, any item explicitly included on Schedule
1.1(ce)(i) shall take priority over any provision of the text
hereof.
(cf) "New ATAPCO Balance Sheet" shall mean the audited consolidated
balance sheet of the New ATAPCO Group as of the Exchange Date immediately
following the Effective Time, including the notes thereto, to be prepared
pursuant to Section 4.26 in accordance with GAAP consistently applied.
For information purposes only, an unaudited pro forma consolidated
balance sheet of the New ATAPCO Group as of June 30, 1998, is set forth
as Schedule 1.1(cf) hereto.
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(cg) "New ATAPCO Business" shall mean that portion of the Real
Estate Business described in Schedule 1.1(cg).
(ch) "New ATAPCO Consent, Letter of Representations and Power of
Attorney" shall mean a written consent, letter of representations and
power of attorney substantially in the form attached hereto as Schedule
1.1(ch).
(ci) "New ATAPCO Contracts" shall mean the following contracts and
agreements to which ATAPCO or any of its Subsidiaries is a party or by
which ATAPCO or any of its Subsidiaries or any of their respective Assets
is bound, whether or not in writing, except for any such contract or
agreement that is expressly contemplated to be transferred or assigned
to, or retained by, any member of the ATRECO Group, the Gateway Group,
the Calvert Group or the Baltimore Management Group, in each case,
pursuant to any provision of this Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on
Schedule 1.1(ci)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the New ATAPCO Group to the extent related to the New
ATAPCO Business or the New ATAPCO Assets;
(iii) any contract or agreement that relates primarily to the
New ATAPCO Business;
(iv) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to, or
retained by, any member of the New ATAPCO Group; and
(v) any guarantee, indemnity, representation or warranty of
any division, business unit or member of the New ATAPCO Group
to the extent related to the New ATAPCO Business or the New
ATAPCO Assets.
(cj) "New ATAPCO Group" shall mean, immediately following the
Effective Time, New ATAPCO and each Subsidiary of ATAPCO which is a
Subsidiary of New ATAPCO immediately following the Effective Time as
identified on Schedule 1.1(cj) hereto, which Schedule also indicates the
amount of New ATAPCO's ownership interest therein.
(ck) "New ATAPCO Indemnitees" shall mean each member of the New
ATAPCO Group, each of their respective directors, officers, employees and
agents and each of the heirs, executors, successors and assigns of any of
the foregoing.
(cl) "New ATAPCO Liabilities" shall mean:
(i) all Liabilities (except (x) any Liability set forth on
Schedule 1.1(cl)(i), (y) any employee-related Liabilities that
are subject to the Employee Benefits Agreement, and (z) any
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Taxes that are subject to the Tax Allocation Agreement)
primarily relating to, arising out of or resulting from:
(A) the operation of the New ATAPCO Business, as
conducted at any time prior to, on or after the Exchange
Date (including any Liability relating to, arising out of
or resulting from any act or failure to act by any
director, officer, employee, agent or representative
(whether or not such act or failure to act is or was
within such Person's authority)); or
(B) the operation at any time after the Effective Time
of any business conducted by New ATAPCO or any Subsidiary
of New ATAPCO (including any Liability relating to,
arising out of or resulting from any act or failure to
act by any director, officer, employee, agent or
representative (whether or not such act or failure to act
is or was within such Person's authority));
(ii) any Liability of New ATAPCO in respect of its portion of
the split dollar insurance Assets described in Section 4.5
following the Effective Time;
(iii) subject to Section 4.28 hereof, 27.76% of the total
costs incurred following the Effective Time under ATAPCO's and
ATREPO's existing leases for the office space on the 14th,
23rd and 24th floors in The Blaustein Building and 100% of the
total costs incurred following the Effective Time in
connection with parking spaces used in the parking garages of
The Blaustein Building and/or the W.R. Grace Building by
employees of New ATAPCO;
(iv) any other Liability specifically identified as a "New
ATAPCO Liability" elsewhere in this Agreement or in any
Ancillary Agreement; and
(v) 39.123% of the Shared Liabilities.
Notwithstanding the foregoing clauses (i) to (v), the New
ATAPCO Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be
retained or assumed by any member of the ATRECO Group,
the Gateway Group, the Calvert Group or the Baltimore
Management Group; or
(y) all agreements and obligations of any member of the
ATRECO Group, the Gateway Group, the Calvert Group or the
Baltimore Management Group under this Agreement or any of
the Ancillary Agreements to be performed after the
Effective Time.
(cm) "New ATAPCO Percentage" shall mean 39.123%.
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(cn) "New ATAPCO Policies" shall mean all Policies current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary
of ATAPCO immediately prior to the Effective Time which relate to the New
ATAPCO Business but do not relate to the ATRECO Business, the Gateway
Business, the Calvert Business or the Baltimore Management Business.
(co) "New ATAPCO Shared Policies" shall mean all Policies, current
or past, which are owned or maintained by or on behalf of ATAPCO or any
Subsidiary of ATAPCO immediately prior to the Effective Time which relate
in part to the New ATAPCO Business, and in part to the ATRECO, Gateway,
Baltimore Management or Calvert Businesses.
(cp) "New ATAPCO Stockholder" shall mean any member of the New
ATAPCO Stockholder Group.
(cq) "New ATAPCO Stockholder Group" shall mean the ATAPCO
stockholders set forth on Schedule 1.1(cq).
(cr) "Other Tax Costs" shall have the meaning set forth in the Tax
Allocation Agreement.
(cs) "Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, limited
liability company or Governmental Authority.
(ct) "Policies" shall mean insurance policies and insurance
contracts of any kind (other than life and benefits policies or
contracts), including, without limitation, primary, excess and umbrella
policies, comprehensive general liability policies, director and officer
liability, fiduciary liability, automobile, aircraft, property and
casualty, workers' compensation and employee dishonesty insurance
policies, bonds and captive insurance company arrangements, together with the
rights, benefits and privileges thereunder.
(cu) "Security Interest" shall mean any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
(cv) "Share Exchanges" shall mean the collective reference to the
ATRECO Share Exchange and the Gateway Share Exchange.
(cw) "Shared Liabilities" shall mean any Liability of the ATAPCO
Group that is not a New ATAPCO Liability described in Section
1.1(cl)(i)-(iv), an ATRECO Liability described in Section 1.1(w)(i)-(v),
a Gateway Liability described in Section 1.1(bn)(i)-(iv), a Calvert
Liability described in Section 1.1(av)(i)-(iv) (other than a Calvert
Liability which is satisfied by any member of the New ATAPCO Group, the
ATRECO Group or the Gateway Group, or which any member of the New ATAPCO
Group, the ATRECO Group or the Gateway Group becomes obligated to
satisfy), or a Baltimore Management Liability described in Section
1.1(am)(i)-(iii) (other than a Baltimore Management Liability which is
satisfied by any member of the New ATAPCO Group, the ATRECO Group or the
Gateway Group or which any member of the New ATAPCO Group, the ATRECO
Group or the Gateway Group becomes obligated to satisfy), including, but
not limited to:
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(i) any Liability arising from any suit, Action or other
proceeding brought by or on behalf of any Person not a party
to this Agreement challenging the Reorganization or any of the
transactions, documents or agreements entered into by AI,
ATAPCO, ATRECO, Gateway, Calvert, Baltimore Management or any
member of the ATAPCO Group in connection therewith;
(ii) any Liability arising from the property formerly owned by
the Atlas/Soundolier Business in Parsippany, New Jersey;
(iii) any Liability arising from any Asset, Subsidiary,
business or operation divested by ATAPCO or any member of the
ATAPCO Group prior to the Effective Time;
(iv) any Liability that may arise in connection with the
obligations of New ATAPCO pursuant to Section 4.15;
(v) any Liability that may arise in connection with any
guarantees relating to the Calvert Business or the Baltimore
Management Business;
(vi) any Liability arising under the American Trading and
Production Salary Continuation Plan for Employees of the
Baltimore Headquarters and the American Trading and Production
Salary Continuation Plan for Employees of Real Estate
Subsidiaries as a result of any termination of any employee of
any member of the ATAPCO Group prior to the Effective Time or
as a result of any termination by Calvert or Baltimore
Management of any employee of any member of the Calvert Group
or the Baltimore Management Group following the Effective
Time;
(vii) any Liability of any member of the ATAPCO Group for any
agreement or obligation under this Agreement or any Ancillary
Agreement the performance of which is to occur at or prior to
the Effective Time;
(viii) any Calvert Liability or Baltimore Management Liability
which is satisfied by any member of the New ATAPCO Group, the
ATRECO Group or the Gateway Group or which any member of the
New ATAPCO Group, the ATRECO Group or the Gateway Group
becomes obligated to satisfy;
(ix) any Liability on, relating to, or arising out of or in
connection with the Unpaid Senior Notes;
(x) any Liability on, relating to, or arising out of or in
connection with the S&P 500 Call Options;
(xi) any Liability set forth on Schedule 1.1(w)(i), Schedule
1.1(bn)(i) and Schedule 1.1(cl)(i);
(xii) all costs incurred following the Effective Time relating
to, arising out of or in connection with the renovation of the
office space in The Blaustein Building to provide separate
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office space for New ATAPCO, ATRECO, Gateway, Calvert and
Baltimore Management; and
(xiii) any other Liability specifically identified as a
"Shared Liability" elsewhere in this Agreement or in any
Ancillary Agreement.
(cx) "Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of ATAPCO or any Subsidiary
of ATAPCO immediately prior to the Effective Time which relate to one or
more of the New ATAPCO Business, the ATRECO Business, the Gateway
Business, the Calvert Business and the Baltimore Management Business.
(cy) "S&P 500 Call Options" shall mean the call options arising
from and relating to the contract between ATAPCO and Bankers Trust
Company, London Branch, dated October 31, 1997, and amended on November
12, 1997.
(cz) "Subsidiary" shall mean any corporation, partnership, limited
liability company, trust or other entity of which another entity (i)
owns, directly or indirectly, ownership interests sufficient to elect a
majority of the Board of Directors (or persons performing similar
functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership, limited
liability company, trust or other entity shall or might have such voting
power upon the occurrence of any contingency) or (ii) is a general
partner or an entity performing similar functions (e.g., a trustee).
(da) "Tax" shall have the meaning set forth in the Tax Allocation
Agreement.
(db) "Tax Allocation Agreement" shall mean the Tax Allocation
Agreement to be entered into among ATAPCO, AI, ATRECO and Gateway.
(dc) "Unpaid Senior Notes" shall mean the 10 1/4% Senior Notes, due
December 1, 2007, issued by ATAPCO.
SECTION 1.2. Terms Defined Elsewhere in this Agreement. The
following is a list of additional terms used in this Agreement and a
reference to the Section hereof in which such term is defined:
Term Section
"Agreement Disputes" . . . . . . . . . . . . . . . . 9.1
"AI" Preamble
"AMEX" . . . . . . . . . . . . . . . . . . . . . . . 3.2
"Amoco Common Stock" . . . . . . . . . . . . . . . . Recital
"Assignee" . . . . . . . . . . . . . . . . . . . . . 4.4
"Atlas/Soundolier Business" . . . . . . . . . . . . . Recital
"Capital One Common Stock" . . . . . . . . . . . . . Recital
"Contributing Parties" . . . . . . . . . . . . . . . 6.6
"Crown Central" . . . . . . . . . . . . . . . . . . . Recital
"Crown Central Class A Common Stock Recital
"Crown Central Class B Common Stock Recital
"Crown Central Common Stock" . . . . . . . . . . . . Recital
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"Crown Central Surplus" . . . . . . . . . . . . . . . 3.3
"Defender" . . . . . . . . . . . . . . . . . . . . . 6.6
"Determination Date" . . . . . . . . . . . . . . . . 3.1
"Dissolved Party" . . . . . . . . . . . . . . . . . . 6.3
"Earnings Release" . . . . . . . . . . . . . . . . . 3.3
"Firm" . . . . . . . . . . . . . . . . . . . . . . . 4.26
"First Adjusted Crown Central Valuation" . . . . . . 3.2
"First Union Common Stock" . . . . . . . . . . . . . Recital
"GAAP" . . . . . . . . . . . . . . . . . . . . . . . 1.1(p)
"Indemnifying Party" . . . . . . . . . . . . . . . . 6.5
"Indemnitee" . . . . . . . . . . . . . . . . . . . . 6.5
"IRS" . . . . . . . . . . . . . . . . . . . . . . . . 3.4
"IRS Ruling" . . . . . . . . . . . . . . . . . . . . 4.22
"ISA International Common Stock" . . . . . . . . . . Recital
"Millbank Electronics Business" . . . . . . . . . . . Recital
"Northern Computers Business" . . . . . . . . . . . . Recital
"Oil and Gas Business" . . . . . . . . . . . . . . . Recital
"OPG Business" . . . . . . . . . . . . . . . . . . . Recital
"Other Account" 4.27
"Principal Common Stock Investments" . . . . . . . . Recital
"Real Estate Business" . . . . . . . . . . . . . . . Recital
"Records" . . . . . . . . . . . . . . . . . . . . . . 7.1
"Reorganizations" . . . . . . . . . . . . . . . . . . 2.1
"Rules" . . . . . . . . . . . . . . . . . . . . . . . 9.2
"Second Adjusted Crown Central Valuation" . . . . . . 3.3
"Shared Liability Account" . . . . . . . . . . . . . 6.1
"Supplemental Ruling" . . . . . . . . . . . . . . . . 4.22
"Third Party Claim" . . . . . . . . . . . . . . . . . 6.5
SECTION 1.3. References; Interpretation. References in this
Agreement to any gender include references to all genders, and references
to the singular include references to the plural and vice versa. The
words "include", "includes" and "including" when used in this Agreement
shall be deemed to be followed by the phrase "without limitation".
Unless the context otherwise requires, references in this Agreement to
Articles, Sections and Schedules shall be deemed references to Articles
and Sections of, and Schedules to, this Agreement. Unless the context
otherwise requires, the words "hereof", "hereby" and "herein" and words
of similar meaning when used in this Agreement refer to this Agreement in
its entirety and not to any particular Article, Section or provision of
this Agreement.
ARTICLE II. THE REORGANIZATION
SECTION 2.1. The Reorganization -General. The "Reorganization"
shall consist of those actions, covenants, promises, agreements and
transactions described in this Agreement, the Ancillary Agreements and
the Schedules and Exhibits hereto and thereto, pursuant to which, among
other things the ATAPCO Merger and the Share Exchanges will occur, the
members of the ATRECO Stockholder Group will become the sole stockholders
of ATRECO, the members of the Gateway Stockholder Group will become the
sole stockholders of Gateway, and the members of the New ATAPCO
Stockholder Group will become the sole stockholders of New ATAPCO. A
general description of certain principal transactions included in the
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Reorganization is set forth on Schedule 2.1(a) and the parties hereby
agree to take, or cause to be taken, all such actions set forth on
Schedule 2.1(a) at the times specified therein.
SECTION 2.2. The Share Exchanges.
(a) On or prior to the Exchange Date, ATAPCO will cause ATRECO's
charter to be amended and restated as set forth on Schedule 4.11(a),
which will result in a reclassification of ATRECO's outstanding capital
stock in a manner that allows the ATRECO Share Exchange to be effected on
a one share for one share basis. In connection therewith, ATAPCO shall
deliver to ATRECO for cancellation the share certificate held by it
representing ATRECO Common Stock and shall receive new certificates
representing the total number of shares of ATRECO Common Stock,
reclassified into five series, to be exchanged by ATAPCO in the ATRECO
Share Exchange.
(b) On or prior to the Exchange Date, ATRECO shall prepare new
stock certificates, which certificates shall be for the relevant series
of ATRECO Common Stock to be held by such members of the ATRECO
Stockholder Group as set forth in Schedule 4.11(a), in the names of the
members of the ATRECO Stockholder Group. Each such certificate shall be
for that number of shares of ATRECO Common Stock (of the appropriate
series) equal to the number of shares of ATAPCO Common Stock held by the
ATRECO Stockholder whose name appears on each stock certificate.
(c) On or prior to the Exchange Date, Gateway shall issue to
ATAPCO as a stock dividend such number of shares of Gateway Common Stock
that, together with the shares of Gateway Common Stock already held by
ATAPCO, will be required to effect the Gateway Share Exchange on a one
share for one share basis. In connection therewith, ATAPCO shall deliver
to Gateway for cancellation the share certificates held by it
representing Gateway Common Stock and shall receive a new certificate
representing the total number of shares of Gateway Common Stock to be
exchanged by ATAPCO in the Gateway Share Exchange.
(d) On or prior to the Exchange Date, Gateway shall prepare new
stock certificates in the names of the members of the Gateway Stockholder
Group. Each such certificate shall be for that number of shares of Gateway
Common Stock equal to the number of shares of ATAPCO Common Stock held by the
Gateway Stockholder whose name appears on each stock certificate.
(e) Immediately prior to the Effective Time, AI shall surrender --
(i) to ATRECO the certificate theretofore representing all of the issued
and outstanding ATRECO Common Stock in return for the new stock
certificates to be exchanged by AI with the ATRECO Stockholders in the
ATRECO Share Exchange, and (ii) to Gateway the certificate theretofore
representing all of the issued and outstanding Gateway Common Stock in
return for the new stock certificates to be exchanged by AI with the
Gateway Stockholders in the Gateway Share Exchange. The certificate
representing ATRECO Common Stock surrendered by AI shall be canceled by
ATRECO and the certificate representing Gateway Common Stock surrendered
by AI shall be canceled by Gateway.
(f) Subject to the satisfaction or waiver (subject to applicable
law) of the conditions set forth in Article V of this Agreement, the
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Share Exchanges shall be effective at the Effective Time, at which time
the following will occur:
(i) each share of ATAPCO Common Stock held by an ATRECO
Stockholder will be exchanged by AI for one share of ATRECO
Common Stock of the relevant series;
(ii) each share of ATAPCO Common Stock held by a Gateway
Stockholder will be exchanged by AI for one share of Gateway
Common Stock;
(iii) each ATRECO Stockholder and each Gateway Stockholder
will deliver to AI one or more certificates representing all
of the shares of ATAPCO Common Stock held by such stockholder;
(iv) AI will deliver to each ATRECO Stockholder and to each
Gateway Stockholder a stock certificate representing the
shares of ATRECO Common Stock or Gateway Common Stock such
stockholder is entitled to receive pursuant to the provisions
of this Agreement; and
(v) the certificates representing ATAPCO Common Stock
surrendered by ATRECO Stockholders and Gateway Stockholders
shall be canceled by AI.
(g) ATAPCO may establish such other rules and procedures as it
deems reasonably necessary in its discretion for the implementation of
the Share Exchanges pursuant to, and in a manner consistent with, this
Agreement.
(h) Certificates representing shares of ATRECO Common Stock or
Gateway Common Stock issued in exchange for certificates representing
shares of ATAPCO Common Stock in accordance with the terms of this
Section 2.2 shall be deemed to have been issued in full satisfaction of
all rights pertaining to the shares of ATAPCO Common Stock exchanged
therefor.
ARTICLE III. VALUATION; POST-EXCHANGE DATE ADJUSTMENTS
SECTION 3.1. Valuation. ATAPCO, ATRECO and Gateway acknowledge
and agree that Schedule 1.1(d) sets forth the Aggregate Valuation as of
October 31, 1998. The parties agree that the value of any Asset set
forth on Schedule 1.1(d) shall be the value used for all purposes (other
than the preparation of the balance sheets pursuant to Section 4.26)
under this Agreement, except that for the purposes of determining the
cash transfers to be made on the Exchange Date as set forth in Schedule
2.1(a) -- (i) the aggregate market value of the Crown Central Common
Stock shall be the First Adjusted Crown Central Valuation determined in
accordance with Section 3.2, (ii) the value of any Assets included in
Schedule 1.1(d) shall be increased by the amount of any capital
expenditure paid for by the ATAPCO Group between October 31, 1998 and the
Effective Time with respect to such Assets that have not been taken into
account in determining the valuations on Schedule 1.1(d), (iii) the value
of the swap transaction involving Corporate Value Partners, LLC and
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NationsBank shall be updated as of the close of business on December 24,
1998 (the "Determination Date") according to the value reported by
Corporate Value Partners, (iv) the value of any material Asset acquired
by the ATAPCO Group after October 31, 1998, but prior to the Effective
Time which is not allocated among the parties according to the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage shall be
included in the Aggregate Valuation at its acquisition cost and (v)
further adjustments shall be made as necessary to implement any other
provision of this Agreement that specifically requires such adjustment.
SECTION 3.2. First Adjusted Crown Central Valuation. ATAPCO shall
prepare an updated calculation of the aggregate market value as of the
close of business on the Determination Date of the shares of Crown
Central Common Stock (the "First Adjusted Crown Central Valuation"). The
First Adjusted Crown Central Valuation shall be the sum of (A) the
product of (i) the average per share closing price of the shares of the
Crown Central Class A Common Stock as reported on the American Stock
Exchange ("AMEX") composite transactions tape for the 10 trading days
prior to and ending on the Determination Date and (ii) the number of
shares of Crown Central Class A Common Stock allocated to Gateway
pursuant to this Agreement, and (B) the product of (i) the average per
share closing price of the shares of the Crown Central Class B Common
Stock as reported on the AMEX composite transactions tape for the 10
trading days prior to and ending on the Determination Date and (ii) the
number of shares of Crown Central Class B Common Stock allocated to
Gateway pursuant to this Agreement.
SECTION 3.3. Second Adjusted Crown Central Valuation.
(a) As soon as practicable after the tenth trading day following
the date Crown Central issues a press release in the ordinary course of
its business and consistent with past practice containing its earnings
for the three- and six-month periods ending on June 30, 1999 (the
"Earnings Release"), Baltimore Management shall prepare a second
calculation of the aggregate market value of the shares of Crown Central
Common Stock allocated to Gateway pursuant to the terms of this Agreement
(the "Second Adjusted Crown Central Valuation"). The Second Adjusted
Crown Central Valuation shall be the sum of (A) the product of (i) the
average per share closing price of the shares of Crown Central Class A
Common Stock as reported on the AMEX composite transactions tape for the
10 trading days beginning on and including the first trading day
following the date of the issuance by Crown Central of its Earnings
Release and (ii) the number of shares of Crown Central Class A Common
Stock allocated to Gateway pursuant to this Agreement, and (B) the
product of (i) the average per share closing price of the shares of Crown
Central Class B Common Stock as reported on the AMEX composite
transactions tape for the 10 trading days beginning on and including the
first trading day following the date of the issuance by Crown Central of
its Earnings Release and (ii) the number of shares of Crown Central Class
B Common Stock allocated to Gateway pursuant to this Agreement.
(b) The Second Adjusted Crown Central Valuation shall be subject
to appropriate adjustment to take proper account of the following events,
if any such events should occur prior to tenth trading day following the
date of the Earnings Release: (1) Crown Central pays a dividend or makes
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a distribution in shares of Crown Central Common Stock or in any other
debt or equity securities, including options or warrants, on any of the
Crown Central Common Stock, subdivides any Crown Central Common Stock
into a greater number of shares of Crown Central Common Stock, or
combines any Crown Central Common Stock into a smaller number of shares
of Crown Central Common Stock; or (2) Crown Central reclassifies any
Crown Central Common Stock; or (3) Crown Central consolidates or merges
with or into any other Person, or is the subject of a successful tender
offer or share exchange, in which the securities of any other Person are
substituted or exchanged in whole or in part for any of the shares of
Crown Central Common Stock allocated to Gateway pursuant to the terms of
this Agreement; or (4) Crown Central makes or engages in an extraordinary
dividend, distribution, redemption or similar transaction with respect to
or affecting the Crown Central Common Stock allocated to Gateway pursuant
to this Agreement.
(c) In the event that the Second Adjusted Crown Central Valuation
is greater than the First Adjusted Crown Central Valuation (the "Crown
Central Surplus"), the parties agree that each of New ATAPCO, ATRECO and
Gateway shall be entitled to that portion of any Crown Central Surplus
equal to the amount of the Crown Central Surplus multiplied by the New
ATAPCO Percentage, the ATRECO Percentage and the Gateway Percentage,
respectively. Within 10 business days of the calculation of the Crown
Central Surplus, Gateway shall transfer to New ATAPCO or a member of the
New ATAPCO Group and to ATRECO or a member of the ATRECO Group cash in
amounts necessary to provide for the division of the Crown Central
Surplus in accordance with the applicable percentages.
(d) In the event the Second Adjusted Crown Central Valuation is
equal to or less than the First Adjusted Crown Central Valuation, the
parties agree that no party will be required to make any payment to any
other party as a result of the change in the value of the Crown Central
Common Stock.
SECTION 3.4. Vantage/Interstate Exchange. If at any time following
the Exchange Date, the Internal Revenue Service ("IRS") refunds any
portion of the federal income tax paid with respect to the
Vantage/Interstate exchange, the refund proceeds shall be paid over to
Baltimore Management or allocated to the parties pursuant to the Tax
Allocation Agreement. If, as a result of such refund, ATRECO is required
to decrease its adjusted basis, for federal income tax purposes, in the
Interstate Property, then, within 10 business days following the date on
which the IRS grants any such refund, (i) Gateway shall pay to ATRECO an
amount equal to 6.294% of the dollar amount by which ATRECO's adjusted
basis in the Interstate Property is decreased as a result of such refund
and (ii) New ATAPCO shall pay to ATRECO an amount equal to 10.728% of the
dollar amount by which ATRECO's adjusted basis in the Interstate Property
is decreased as a result of such refund.
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ARTICLE IV. COVENANTS AND AGREEMENTS
SECTION 4.1. Information Statement and Consents; Securities Laws.
(a) As soon as practical following execution of this Agreement,
ATAPCO shall:
(i) prepare the Information Statement;
(ii) mail a New ATAPCO Consent, Letter of Representations and
Power of Attorney and an Information Statement to each New
ATAPCO Stockholder;
(iii) mail an ATRECO Consent, Letter of Representations and
Power of Attorney and an Information Statement to each ATRECO
Stockholder; and
(iv) mail a Gateway Consent, Letter of Representations and
Power of Attorney and an Information Statement to each Gateway
Stockholder.
(b) ATAPCO shall obtain all necessary state securities law or
"blue sky" permits and approvals required to carry out the transactions
contemplated by this Agreement.
(c) Each of the parties hereto agrees to furnish to ATAPCO all
information concerning itself and its Subsidiaries, Affiliates, officers,
directors and future stockholders as may be requested by ATAPCO in
connection with the foregoing.
SECTION 4.2. Employee Matters.
(a) Schedules 4.2(a)(i), 4.2(a)(ii), 4.2(a)(iii), 4.2(a)(iv) and
4.2(a)(v) set forth the names of all of the employees currently employed
with ATAPCO or its Subsidiaries who have been offered employment by, and
have accepted employment with, New ATAPCO or any member of the New ATAPCO
Group, ATRECO or any member of the ATRECO Group, Gateway or any member of
the Gateway Group, Calvert or any member of the Calvert Group and
Baltimore Management or any member of the Baltimore Management Group,
respectively.
(b) Each of New ATAPCO, ATRECO, and Gateway agrees that for a
period of two years from the Exchange Date they will not, and they will
cause their Affiliates not to, employ, offer to employ or solicit for
employment the employees set forth on Schedules 4.2(a)(i), 4.2(a)(ii) and
4.2(a)(iii) without the prior written consent of the party who has
offered employment to such employee as indicated on the relevant
Schedule, which consent shall not be unreasonably withheld. In the event
that New ATAPCO, ATRECO or Gateway employs any of the employees set forth
on Schedules 4.2(a)(iv) or 4.2(a)(v), that party agrees to provide
reasonable notice to the other parties of its intention to employ such
employee and to cooperate with the other parties to provide a reasonable
transition period for such employee.
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(c) Each of New ATAPCO, ATRECO, Gateway, Calvert and Baltimore
Management agree that after the Exchange Date, they shall cause their
employees set forth on Schedules 4.2(a)(i), 4.2(a)(ii), 4.2(a)(iii),
4.2(a)(iv) and 4.2(a)(v) to cooperate with and be made available to the
other parties hereto, upon reasonable notice and during normal business
hours, in connection with matters relating to the services performed by
such employee for the ATAPCO Group prior to the Exchange Date or relating
to the management of each party of its internal affairs during the
transition period following the Effective Time. In the event that the
cumulative requests for services of one or more employees results in an
unreasonable burden upon an any party hereto, the parties agree to
negotiate a reasonable compensation structure to account for the burden
placed on the party employing the employees subject to such burden.
Each of New ATAPCO, ATRECO, Gateway, Calvert and Baltimore Management, on
their own behalf and on behalf of each of their respective Subsidiaries,
agree that the employer of any such employee shall not be liable for, and
agree and undertake not to seek or to attempt to seek to hold the
employer of any such employee liable for, the acts or omissions of any
such employee in connection with any services provided hereunder.
SECTION 4.3. Certain Licenses and Permits. Without limiting the
generality of the obligations set forth elsewhere in this Agreement or in
the Ancillary Agreements:
(a) Prior to or at the Effective Time, ATAPCO and the members of
the ATAPCO Group shall take any and all actions necessary or appropriate
to transfer duly and validly all transferable licenses, permits and
authorizations issued by any Governmental Authority as follows:
(i) to entities that will be members of the New ATAPCO Group,
all such licenses, permits and authorizations that relate
primarily to the New ATAPCO Business (including, without
limitation, those set forth on Schedule 4.3(a)(i));
(ii) to entities that will be members of the ATRECO Group, all
such licenses, permits and authorizations that relate
primarily to the ATRECO Business (including, without
limitation, those set forth on Schedule 4.3(a)(ii));
(iii) to entities that will be members of the Gateway Group,
all such licenses, permits and authorizations that relate
primarily to the Gateway Business (including, without
limitation, those set forth on Schedule 4.3(a)(iii));
(iv) to entities that will be members of the Calvert Group,
all such licenses, permits and authorizations that relate
primarily to the Calvert Business (including, without
limitation, those set forth on Schedule 4.3(a)(iv)); and
(v) to entities that will be members of the Baltimore
Management Group, all such licenses, permits and
authorizations that relate primarily to the Baltimore
Management Business (including, without limitation, those set
forth on Schedule 4.3(a)(v)).
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(b) To the extent any transfers required by Section 4.3(a) are not made
prior to or at the Effective Time, each of New ATAPCO, ATRECO, Gateway,
Calvert and Baltimore Management shall cause such transfers to be made as
soon as practicable following the Exchange Date and, to the extent possible,
effective at the Effective Time.
(c) The parties hereto shall use their commercially reasonable efforts
to obtain required consents to the transfer and/or assignment of licenses,
permits and authorizations of Governmental Authorities hereunder as
contemplated by this Agreement or any Ancillary Agreement.
SECTION 4.4. Transfer of Agreements. Without limiting the generality of
the obligations set forth elsewhere in this Agreement or in the Ancillary
Agreements:
(a) Prior to or at the Effective Time, ATAPCO and the members of the
ATAPCO Group shall take any and all actions necessary or appropriate to
transfer duly and validly all transferable agreements or contracts of the
ATAPCO Group as follows:
(i) to entities that will be members of the New ATAPCO Group, all
such agreements or contracts that are New ATAPCO Contracts;
(ii) to entities that will be members of the ATRECO Group, all such
agreements or contracts that are ATRECO Contracts;
(iii) to entities that will be members of the Gateway Group, all
such agreements or contracts that are Gateway Contracts;
(iv) to entities that will be members of the Calvert Group, all
such agreements or contracts that are Calvert Contracts; and
(v) to entities that will be members of the Baltimore Management
Group, all such agreements or contracts that are Baltimore
Management Business Contracts.
(b) To the extent any transfers required by Section 4.4(a) are not made
prior to or at the Effective Time, each of New ATAPCO, ATRECO, Gateway,
Calvert and Baltimore Management shall cause such transfers to be made as
soon as practicable following the Exchange Date and, to the extent possible,
effective at the Effective Time.
(c) The parties hereto shall use their commercially reasonable efforts
to obtain required consents to the transfer and/or assignment of agreements
and contracts hereunder as contemplated by this Agreement or any Ancillary
Agreement.
(d) Subject to the provisions of this Section 4.4, any agreement to
which any of the parties hereto or any of their Subsidiaries is a party that
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inures to the benefit of more than one of the New ATAPCO Business, the ATRECO
Business, the Gateway Business, the Calvert Business and the Baltimore
Management Business shall be assigned in part so that each party shall be
entitled to the rights and benefits inuring to its business under such
agreement.
(e) The assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall be liable for and shall assume and agree to
pay, perform, and fully discharge all obligations of the assignor under such
agreement or, in the case of a partial assignment under Section 4.4(d), such
Assignee's related portion of such obligations as determined in accordance
with the terms of the relevant agreement, where determinable on the face
thereof, and otherwise as determined in accordance with the practice of the
parties prior to the Effective Time.
(f) Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any agreement, in whole
or in part, or any rights thereunder if the agreement to assign or attempt to
assign, without the consent of a third party, would constitute a breach
thereof or in any way adversely affect the rights of the assignor or Assignee
thereof. Until such consent is obtained, or if an attempted assignment
thereof would be ineffective or would adversely affect the rights of any
party hereto so that the intended Assignee would not, in fact, receive all
such rights, the parties will cooperate with each other in any arrangement
designed to provide for the intended Assignee the benefits of, and to permit
the intended Assignee to assume liabilities under, any such agreement.
SECTION 4.5. Split Dollar Insurance. The parties agree that all of
ATAPCO's interests in the split dollar insurance Assets and the AFR loan
receivable related to such split dollar insurance Assets will be allocated
between New ATAPCO and ATRECO in accordance with the terms set forth on
Schedule 4.5 and Schedule 1.1(d).
SECTION 4.6. Cash Payments.
(a) ATAPCO shall repay or cause to be repaid from its cash balances all
of the third party debt listed on Schedule 4.6(a) and shall transfer to the
Shared Liability Account cash in the amounts set forth in Section 4.27 and
Section 6.1.
(b) ATAPCO shall take or cause to be taken all necessary actions,
including selling marketable securities, so that sufficient cash shall be
available to make any repayments or cash transfers contemplated pursuant to
this Agreement.
SECTION 4.7. Placement of Assets. ATAPCO, AI, ATRECO and Gateway, as
applicable, shall be entitled to designate the member within such party's
respective Group to which any Assets are to be transferred pursuant to this
Agreement or any Ancillary Agreement.
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SECTION 4.8. Resignations.
(a) Subject to Section 4.8(e), ATAPCO shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the ATRECO Group
in which they serve, and ATRECO shall cause all its directors, officers and
employees to resign, effective no later than the Effective Time, from all
positions as officers or directors of any members of the New ATAPCO Group in
which they serve.
(b) Subject to Section 4.8(e), ATAPCO shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the Gateway
Group in which they serve, and Gateway shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any members of the New ATAPCO
Group in which they serve.
(c) Subject to Section 4.8(e), Gateway shall cause all its directors,
officers and employees to resign, effective no later than the Effective Time,
from all positions as officers or directors of any member of the ATRECO Group
in which they serve, and ATRECO shall cause all its directors, officers and
employees to resign, effective no later than the Effective Time, from all
positions as officers or directors of any members of the Gateway Group in
which they serve.
(d) Subject to Section 4.8(e), (x) any person who is not a member of
the New ATAPCO Stockholder Group shall resign, no later than the Effective
Time, from all positions as directors of any member of the New ATAPCO Group,
(y) any Person who is not a member of the ATRECO Stockholder Group shall
resign, no later than the Effective Time, from all positions as directors of
any member of the ATRECO Stockholder Group, and (z) any Person who is not a
member of the Gateway Stockholder Group shall resign, no later than the
Effective Time, from all positions as directors of any member of the Gateway
Group.
(e) No Person shall be required by any party hereto to resign from any
position or office with another party hereto if such Person is disclosed in
the Information Statement, or is otherwise designated by New ATAPCO, ATRECO
and Gateway, as a Person who is to hold such position or office following the
Reorganization.
SECTION 4.9. Directors as of the Effective Time. On or prior to the
Exchange Date, ATAPCO, as the sole stockholder of AI, ATRECO and Gateway,
shall take all necessary action to cause the Boards of Directors of AI,
ATRECO and Gateway to consist, as of the Effective Time, of the individuals
identified in Schedule 4.9.
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SECTION 4.10. Calvert; Baltimore Management: On or prior to the
Exchange Date:
(a) Calvert will have a limited liability company agreement
substantially in the form of Schedule 4.10(a) hereto.
(b) Baltimore Management will have a limited liability company
agreement substantially in the form of Schedule 4.10(b) hereto.
SECTION 4.11. Charters. On or prior to the Exchange Date:
(a) the Charter of ATRECO will be amended as set forth in Schedule
4.11(a).
(b) the Charter of Gateway will be amended as set forth in Schedule
4.11(b).
(c) the Certificate of Incorporation of AI will be amended as set forth
in Schedule 4.11(c).
SECTION 4.12. No Appraisal Rights. Because written consents approving
and consenting to the Reorganization will be obtained from each holder of
ATAPCO Common Stock, such holders will not have objecting stockholder rights
or appraisal rights under applicable law in connection with the
Reorganization.
SECTION 4.13. Other Transactions. On or prior to the Exchange Date,
ATAPCO, ATRECO and Gateway shall consummate those other transactions in
connection with the Reorganization that are contemplated by the ruling
request submission by ATAPCO to the IRS dated June 26, 1998 (and any
modifications, supplements or additions thereto in connection with the
rulings received from the IRS), and not specifically referred to in this
Agreement, as such transactions will be restated in a letter from Miller &
Chevalier to ATAPCO, AI, ATRECO and Gateway on or prior to the Exchange Date.
After the Exchange Date, New ATAPCO, ATRECO and Gateway will exercise good
faith commercially reasonable efforts to consummate as promptly as
practicable all other transactions which must be consummated in order fully
to complete the Reorganization and any of the transactions contemplated
hereby or by any of the Ancillary Agreements.
SECTION 4.14. Conduct of Business Prior to Exchange Date. During the
period from the date of this Agreement through the Effective Time, other than
in connection with the transactions contemplated by this Agreement and the
Ancillary Agreements, each of the members of the ATAPCO Group (including all
entities that will be members of the New ATAPCO Group, the ATRECO Group, the
Gateway Group, the Calvert Group and the Baltimore Management Group) shall --
(i) in all material respects, carry on their respective businesses in the
ordinary course consistent with past practice and, to the extent consistent
therewith, use reasonable efforts to preserve intact all existing Assets and
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business organizations, keep available the services of current officers and
key employees, and preserve any and all significant present relationships
with customers, suppliers and others with whom these entities have
significant business dealings and (ii) not take or fail to take any action
that would reasonably be expected to result in ATAPCO receiving a
Supplemental Ruling that would not satisfy Section 5.1(b).
SECTION 4.15. Directors' and Officers' Indemnification and Insurance.
To the maximum extent permitted by Delaware law, New ATAPCO shall maintain in
effect in its certificate of incorporation or by-laws for a period of six
years after the Effective Time, the current provisions regarding
indemnification of officers, directors and employees contained in the by-laws
of ATAPCO. AI, ATRECO and Gateway agree that the limitation of director
liability provision in the ATAPCO Charter as of the date of this Agreement
with respect to the matters prior to the Effective Time shall be deemed to
continue and survive notwithstanding the ATAPCO Merger. ATAPCO also agrees
that prior to the Exchange Date ATAPCO shall purchase prepaid directors' and
officers' liability insurance policies and fiduciary liability policies
(which provide a level of protection to the insureds equivalent to that under
ATAPCO's policies in effect as of the date of the Agreement) which shall
provide continuing coverage for the current directors and officers of ATAPCO
for a period of six years after the Exchange Date for events that occurred on
or prior to the Exchange Date. ATRECO and Gateway agree (i) to guarantee the
indemnity obligations set forth in the New ATAPCO certificate of
incorporation and by-laws and (ii) to be jointly and severally liable for any
payments to any directors, officers or employees contemplated in the by-laws
with respect to claims arising from facts or events that occurred at or
before the Effective Time. Any amounts paid to obtain any insurance coverage
or in satisfaction of the indemnification obligations pursuant to this
Section 4.15 made after the Exchange Date shall be Shared Liabilities.
SECTION 4.16. Year 2000. From and after the Effective Time, New
ATAPCO, ATRECO and Gateway agree to cooperate fully with one another to
address Year 2000 compliance issues; provided, that each party shall bear its
own expenses and Liabilities related to Year 2000 compliance issues.
SECTION 4.17. Shared Assets. From and after the Effective Time, each
of New ATAPCO, ATRECO and Gateway shall have full ownership, and all rights
and privileges attendant thereto, to all Assets set forth on Schedule 4.17.
SECTION 4.18. Further Assurances. In case at any time after the
Effective Time any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement and the Ancillary Agreements, the
proper officers of New ATAPCO, ATRECO, Gateway, Calvert, Baltimore Management
and their Affiliates shall take all such necessary action. Without limiting
the foregoing, New ATAPCO, ATRECO, Gateway, Calvert, Baltimore Management and
their Affiliates shall use their commercially reasonable efforts promptly to
obtain all consents and approvals, to enter into all amendatory agreements
and to make all filings and applications that may be required for the
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consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including, without limitation, all applicable
governmental and regulatory filings.
SECTION 4.19. Limited Representations or Warranties. Each of the
parties hereto agrees that no party hereto is, in this Agreement, any
Ancillary Agreement or in any other agreement or document contemplated by
this Agreement, any Ancillary Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of Assets being
transferred or retained except that (i) ATRECO warrants to AI good marketable
fee simple title to the Vantage property, subject to the exceptions taken in
ATRECO's title insurance policy relating to the Vantage property, and
provided that ATRECO's liability for breach of this warranty shall be limited
to the proceeds, if any, that ATRECO receives under the terms of such title
insurance policy, (ii) AI warrants to ATRECO good marketable fee simple title
to the Interstate property, subject to the exceptions taken in ATREPO's title
insurance policy relating to the Interstate property, and provided that AI's
liability for breach of this warranty shall be limited to the proceeds, if
any, that AI receives under the terms of such title insurance policy, (iii)
AI warrants to ATRECO good marketable fee simple title to the Empire Towers
property, subject to the exceptions taken in ATREPO's title policy relating
to the Empire Towers property, and provided that AI's liability for breach of
this warranty shall be limited to the proceeds, if any, that AI receives
under the terms of such title insurance policy, (iv) AI warrants to Calvert
good marketable fee simple title to the Monroe Property, subject to the
exceptions taken in ATREPO's title policy relating to the Monroe Property,
and provided that AI's liability for breach of this warranty shall be limited
to the proceeds, if any, that AI receives under the terms of such title
insurance policy, and (v) AI warrants to Calvert good marketable fee simple
title to the lands comprising AI's Washington, Missouri plant, its
Crawfordsville, Indiana plant, its Laurinburg, North Carolina plant, and its
Ennis, Texas plant, subject to the exceptions taken in ATAPCO's title policies
relating to such lands, and provided that AI's liability for breach of this
warranty shall be limited to the proceeds, if any, that AI receives under the
terms of such title insurance policies. Subject to the foregoing, it is also
agreed that, notwithstanding anything to the contrary otherwise expressly
provided in the relevant Conveyancing and Assumption Instrument, all Assets
either transferred to or retained by the parties, as the case may be, shall
be "as is" and that (subject to Section 4.18) the party to or by which such
Assets are to be transferred or retained hereunder shall bear the economic
and legal risk that such party or any of the Subsidiaries title to any such
Assets shall be other than good and marketable and free from encumbrances.
Similarly, each party hereto agrees that, except as otherwise expressly
provided in the relevant Conveyancing and Assumption Instrument, no party
hereto is representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any amendatory
agreements and the making of any filings or applications contemplated by this
Agreement or any Ancillary Agreement will satisfy the provisions of any or
all applicable agreements or the requirements of any or all applicable laws
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or judgments, it being agreed that the party which any Assets are transferred
to or retained by shall bear the economic and legal risk that any necessary
consents or approvals are not obtained or that any requirements of laws or
judgments are not complied with.
SECTION 4.20. Guarantees. Without limiting the generality of the
obligations set forth in this Agreement and the Ancillary Agreements:
(a) (i) Except as otherwise specified in any Ancillary Agreement,
ATAPCO, ATRECO and Gateway shall use their commercially reasonable efforts to
have, on or prior to the Exchange Date, or as soon as practicable thereafter
(but, except as otherwise provided, in no event more than 30 days
thereafter), ATAPCO and any member of the New ATAPCO Group removed as
guarantor of or obligor for any ATRECO Liability or Gateway Liability,
including, without limitation, in respect of those guarantees set forth on
Schedule 4.20(a)(i) to the extent that they relate to ATRECO Liabilities or
Gateway Liabilities.
(ii) Without limiting the generality of Section 4.20(a)(i) New
ATAPCO and Gateway each acknowledge, recognize and agree that it will not be
possible for Gateway to procure the release of New ATAPCO from all Gateway
Liabilities arising from ATAPCO's guarantee of the obligations of Gateway in
connection with its purchases and sales of oil and gas on or prior to the
Exchange Date. New ATAPCO and Gateway therefore agree that if Gateway
exercises diligent good faith efforts to comply with this Section 4.20(a)(ii)
with respect to such guarantees but is unable to procure the release of New
ATAPCO from such guarantees, including because the Persons guaranteed thereby
will not promptly agree to the release of such guarantee or, if the Gateway
Business to which such guarantee relates is conducted by a Subsidiary of
Gateway, will not promptly agree to the substitution of such guarantee by a
guarantee by Gateway, or require further information or explanation in
connection therewith or in connection with the circumstances relating to the
transactions contemplated hereby insofar as they effect such guarantee, then
(i) Gateway will not be deemed to be in breach of this Section 4.20(a)(ii) if
it continues to exercise diligent good faith efforts to effect the release of
such guarantees and in fact does effect the full and unconditional release of
such guarantees within six months after the Exchange Date, and (ii) in such
circumstances and during such period, Gateway or its Subsidiary may continue
to effect transactions in the Gateway Business to which such guarantees
relate after the Exchange Date, notwithstanding that such transactions will
be guaranteed by such guarantees which have not yet been released. Without
limiting the generality of Section 6.4, the Gateway Liabilities or alleged
Gateway Liabilities with respect to which Gateway shall indemnify, defend and
hold harmless the New ATAPCO Indemnitees under Section 6.4 shall include any
and all Liabilities of New ATAPCO and the New ATAPCO Indemnitees arising in
connection with any such guarantees by ATAPCO of such Gateway Liabilities
which have not been fully released. If the release of New ATAPCO from any
guarantees described in this Section 4.20(a)(ii) are not obtained by Gateway
on or prior to June 30, 1999, Gateway will not undertake any transaction
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after such date in reliance on such guarantees or take any action which could
result in New ATAPCO becoming obligated to perform under such guarantees, and
Gateway will notify in writing the beneficiaries of such guarantees on or
before June 30, 1999, that it may not undertake any further transactions in
reliance on such guarantees. Beginning on May 1, 1999, Gateway will promptly
notify New ATAPCO of any transactions undertaken by Gateway in reliance on
any guarantees from which New ATAPCO has not been released. Gateway will
provide New ATAPCO promptly after receipt written evidence of the release of
each guarantee described in this Section 4.20(a)(ii).
(b) Except as otherwise specified in any Ancillary Agreement, ATAPCO,
ATRECO and Gateway shall use their commercially reasonable efforts to have,
on or prior to the Exchange Date, or as soon as practicable thereafter (but,
except as otherwise provided, in no event more than 30 days thereafter), any
member of the ATRECO Group removed as guarantor of or obligor for any New
ATAPCO Liability or Gateway Liability, including, without limitation, in
respect of those guarantees set forth on Schedule 4.20(b) to the extent that
they relate to New ATAPCO Liabilities or Gateway Liabilities.
(c) Except as otherwise specified in any Ancillary Agreement, ATAPCO,
ATRECO and Gateway shall use their commercially reasonable efforts to have,
on or prior to the Exchange Date, or as soon as practicable thereafter (but,
except as otherwise provided, in no event more than 30 days thereafter), any
member of the Gateway Group removed as guarantor of or obligor for any New
ATAPCO Liability or ATRECO Liability, including, without limitation, in
respect of those guarantees set forth on Schedule 4.20(c) to the extent that
they relate to ATRECO Liabilities or New ATAPCO Liabilities.
(d) Subject to Section 4.20(a)(ii), if ATAPCO, ATRECO or Gateway is
unable to obtain, or to cause to be obtained, any such required removal as
set forth in clauses (a)-(c) of this Section 4.20, the applicable guarantor
or obligor shall continue to be bound as such and, unless not permitted by
law or the terms thereof, the relevant beneficiary shall or shall cause one
of its Subsidiaries, as agent or subcontractor for such guarantor or obligor,
to pay, perform and discharge fully all the obligations or other Liabilities
of such guarantor or obligor thereunder from and after the date hereof.
(e) The parties shall use commercially reasonable efforts to transfer
any guarantees (i) with respect to any Calvert Liabilities to Calvert and
(ii) with respect to any Baltimore Management Liabilities to Baltimore
Management, including, without limitation, in respect of those guarantees set
forth on Schedule 4.20(e) to the extent that they relate to Calvert
Liabilities or Baltimore Management Liabilities. Any guarantees described
in the preceding sentence that can not be so transferred will be retained by
New ATAPCO, ATRECO or Gateway, as the case may be. Any Liabilities
resulting from or arising out of or in connection with guarantees described
in this Section 4.20(e) are Shared Liabilities.
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SECTION 4.21. Witness Services. At all times from and after the
Exchange Date, each of New ATAPCO, ATRECO, Gateway, Calvert and Baltimore
Management shall use their commercially reasonable efforts to make available
to the others, upon reasonable written request, its and its Subsidiaries'
officers, directors, employees and agents as witnesses to the extent that (i)
such Persons may reasonably be required in connection with the prosecution or
defense of any Action in which the requesting party may from time to time be
involved and (ii) there is no conflict in the Action between the requesting
party and New ATAPCO, ATRECO, Gateway, Calvert and Baltimore Management, as
applicable. A party providing witness services to another party under this
Section 4.21 shall be entitled to receive from the recipient of such
services, upon the presentation of invoices therefor, payments for such
amounts, relating to disbursements and other out-of-pocket expenses (which
shall be deemed to exclude the costs of salaries and benefits of employees
who are witnesses), as may be reasonably incurred in providing such witness
services.
SECTION 4.22. Compliance with IRS Ruling.
(a) ATAPCO has or will submit to the IRS to the extent necessary such
supplemental information and documentation regarding the Agreement, the
Ancillary Agreements, and the transactions contemplated hereby and thereby as
is approved by ATAPCO, Louis Thalheimer, Henry Rosenberg and Daniel
Hirschhorn in order for the IRS to confirm the ruling received by ATAPCO from
the IRS on November 12, 1998 (the "IRS Ruling") in a supplemental ruling (the
"Supplemental Ruling").
(b) Each of ATAPCO, AI, New ATAPCO, ATRECO and Gateway shall comply and
shall cause its respective Subsidiaries to comply with, and otherwise not
take action inconsistent with, the factual information, representations and
statements made to the IRS in connection with the request by ATAPCO for the
IRS Ruling and the Supplemental Ruling, which factual information,
representations and statements will be restated in a letter from Miller &
Chevalier to ATAPCO, AI, ATRECO and Gateway dated not later than the Exchange
Date and delivered to ATAPCO as a condition precedent to consummation of the
ATAPCO Merger and the Share Exchanges.
(c) (i) In the event that New ATAPCO, its Subsidiaries, its Affiliates
or its stockholders takes or fails to take any action that causes
or results in the transactions contemplated by this Agreement and
the Ancillary Agreements (including the Share Exchanges) to be
taxable (other than as contemplated in the IRS Ruling and the
Supplemental Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway,
the Subsidiaries of any of the foregoing, or the stockholders of
any of the foregoing, New ATAPCO and its Subsidiaries shall
indemnify and hold harmless ATRECO, Gateway, their Subsidiaries and
their stockholders from and against any and all resulting Taxes and
Other Tax Costs.
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(ii) In the event that ATRECO, its Subsidiaries, its Affiliates or
its stockholders takes or fails to take any action that causes or
results in the transactions contemplated by this Agreement and the
Ancillary Agreements (including the Share Exchanges) to be taxable
(other than as contemplated in the IRS Ruling and the Supplemental
Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway, the
Subsidiaries of any of the foregoing, or the stockholders of any of
the foregoing, ATRECO and its Subsidiaries shall indemnify and hold
harmless New ATAPCO, Gateway, their Subsidiaries and their
stockholders from and against any and all resulting Taxes and Other
Tax Costs.
(iii) In the event that Gateway, its Subsidiaries, its Affiliates
or its stockholders takes or fails to take any action that causes
or results in the transactions contemplated by this Agreement and
the Ancillary Agreements (including the Share Exchanges) to be
taxable (other than as contemplated in the IRS Ruling and the
Supplemental Ruling) to ATAPCO, New ATAPCO, AI, ATRECO, Gateway,
the Subsidiaries of any of the foregoing, or the stockholders of
any of the foregoing, Gateway and its Subsidiaries shall indemnify
and hold harmless New ATAPCO, ATRECO, their Subsidiaries and their
stockholders from and against any and all resulting Taxes and Other
Tax Costs.
(iv) Notwithstanding the foregoing Sections 4.22(c)(i), (ii) and
(iii), no party shall have any Liability to any other party under
this Section 4.22(c) for actions or omissions that relate to the
preparation and filing of Pre-Exchange Date Returns (as defined in
the Tax Allocation Agreement) or for taking any actions in
compliance with the provisions of this Agreement, the Ancillary
Agreements or the factual information, statements or
representations set forth in the correspondence and other
documentation provided to the IRS in connection with the IRS Ruling
and Supplemental Ruling.
(v) Except as specifically provided in this Section 4.22(c), no
party to this Agreement shall have any Liability or responsibility
for any Taxes imposed on any ATAPCO stockholder, any AI
stockholder, any ATRECO Stockholder, any Gateway Stockholder, any
New ATAPCO Stockholder, or any Person or entity that is or becomes
a stockholder of ATRECO, Gateway or New ATAPCO. Notwithstanding
Section 11.2 or any other provision of this Agreement to the
contrary, the provisions of this Section 4.22(c)(v) shall supersede
and take priority over any provision of any Ancillary Agreement
(including the Tax Allocation Agreement) to the contrary, even if
such Ancillary Agreement is executed after the date of this
Agreement.
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SECTION 4.23. Transfers Not Effected Prior to the Share Exchanges;
Transfers Deemed Effective as of the Exchange Date. To the extent that any
transfers contemplated by this Agreement or any Ancillary Agreement shall not
have been consummated on or prior to the Exchange Date, the parties shall
cooperate to effect such transfers as promptly following the Exchange Date as
shall be practicable. Nothing herein shall be deemed to require the transfer
of any Assets or the assumption of any Liabilities which by their terms or
operation of law cannot be transferred; provided, however, that the parties
hereto and their respective Subsidiaries shall cooperate to seek to obtain
any necessary consents or approvals for the transfer of all Assets and
Liabilities contemplated to be transferred pursuant to this Agreement or any
Ancillary Agreement. In the event that any such transfer of Assets or
Liabilities has not been consummated, from and after the Exchange Date the
party retaining such Asset or Liability shall hold such Asset in trust for
the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such Liability for the account of the party
by whom such Liability is to be assumed pursuant hereto, as the case may be,
and take such other action as may be reasonably requested by the party to
whom such Asset is to be transferred, or by whom such Liability is to be
assumed, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such
Asset or Liability been transferred or assumed as contemplated hereby. As
and when any such Asset or Liability becomes transferable, or assumable, such
transfer or assumption shall be effected forthwith for no additional
consideration. The parties agree that, as of the Exchange Date, each party
hereto shall be deemed to have acquired complete and sole beneficial
ownership over all of the Assets, together with all rights, powers and
privileges incident thereto, and shall be deemed to have assumed in
accordance with the terms of this Agreement all of the Liabilities, and all
ons and responsibilities incident thereto, which such party is entitled to
acquire or required to assume pursuant to the terms of this Agreement and any
Ancillary Agreement.
SECTION 4.24. Conveyancing and Assumption Instruments. In connection
with the transfers of Assets and the assumptions of Liabilities contemplated
by this Agreement, the parties shall execute or cause to be executed by the
appropriate entities the Conveyancing and Assumption Instruments in
substantially the form contemplated hereby for transfers to be effected
pursuant to the laws of one of the states of the United States or, if not
appropriate for a given transfer, and for transfers to be effected pursuant
to non-U.S. laws, in such other form as the parties shall reasonably agree,
including the transfer of real property with deeds as may be appropriate.
The transfer of capital stock shall be effected by means of delivery of stock
certificates and executed stock powers and notation on the stock record books
of the corporation or other legal entities involved, or by such other means
as may be required in any non-U.S. jurisdiction to transfer title to stock
and, to the extent required by applicable law, by notation on public
registries.
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SECTION 4.25. Ancillary Agreements. On or prior to the Exchange Date,
each of ATAPCO, AI, ATRECO and Gateway shall enter into, and/or (where
applicable) shall cause members of their respective Groups and the Calvert
Group and the Baltimore Management Group, as applicable, to enter into, the
Ancillary Agreements and any other agreements in respect of the
Reorganization reasonably necessary or appropriate in connection with the
transactions contemplated hereby and thereby.
SECTION 4.26. Preparation of Audited Balance Sheets. Prior to the date
hereof the parties have retained Ernst & Young, LLP (the "Firm") to prepare
the New ATAPCO Balance Sheet, the ATRECO Balance Sheet, the Gateway Balance
Sheet, the Calvert Balance Sheet and the Baltimore Management Balance Sheet
in the manner contemplated in this Agreement and the Schedules hereto. Each
of New ATAPCO, ATRECO and Gateway agree to, and agree to cause Calvert and
Baltimore Management to, provide all reasonably requested information,
assistance and cooperation in connection with preparation of the balance
sheets and to use their reasonable best efforts to ensure that the balance
sheets are prepared in the manner contemplated by this Agreement and the
Schedules hereto. In the event of any discrepancy between the Assets and
Liabilities set forth on any of the balance sheets and the division of Assets
and Liabilities set forth herein, the parties agree to cooperate with one
another to promptly resolve any such disputes. If the parties are unable to
resolve any such discrepancies themselves within 30 days of the delivery of
the balance sheets by the Firm, the parties shall submit their proposed
resolutions of the discrepancies to the Firm within 15 days thereafter. The
Firm shall select the resolution it deems appropriate, and such determination
shall be final and binding on all the parties. All costs and expenses of the
Firm in connection with its services under this Section 4.26 shall be Shared
Liabilities.
SECTION 4.27. Unpaid Senior Notes. Prior to the Effective Time, ATAPCO
shall assign to Baltimore Management, and Baltimore Management shall assume
from ATAPCO, all obligations relating to or arising out of or in connection
with the Unpaid Senior Notes. Baltimore Management shall apply funds from
the Shared Liability Account (as defined in Section 6.1), or such other
account of Baltimore Management (the "Other Account") into which funds may be
deposited for this purpose, to the payment, on or about January 4, 1999, of
any and all principal and interest due on the Unpaid Senior Notes and any
prepayment penalties relating thereto. Any Liability relating to or arising
out of or in connection with the Unpaid Senior Notes is a Shared Liability.
The parties agree that prior to the Effective Time, ATAPCO shall transfer to
the Shared Liability Account or the Other Account $48.3 million in cash to be
paid out pursuant to this Section 4.27.
SECTION 4.28. Lease Liability Adjustments. In the event that any
party's usage of the space in The Blaustein Building increases or decreases
by more than 5% as a result of the initial build-out of such space to
accommodate the needs of the parties, the parties agree that the percentages
set forth in Sections 1.1(w)(iii), 1.1(am)(iii), 1.1(av)(iii), 1.1(bn)(ii)
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and 1.1(cl)(iii) and the corresponding liability for the total costs incurred
following the Effective Time under ATAPCO's and ATREPO's existing leases for
the office space on the 14th, 23rd and 24th floors in The Blaustein Building
shall be adjusted to reflect such change.
ARTICLE V. CONDITIONS PRECEDENT
SECTION 5.1. Conditions to the ATAPCO Merger and Share Exchanges. The
consummation of the ATAPCO Merger and the Share Exchanges shall be subject to
the satisfaction or waiver of the following conditions at or prior to the
effectiveness of the ATAPCO Merger, in the case of conditions to the ATAPCO
Merger, and prior to the Effective Time, in the case of the Share Exchanges:
(a) ATAPCO Stockholder Consents.
(i) Each New ATAPCO Stockholder shall have submitted to ATAPCO a
duly executed New ATAPCO Consent, Letter of Representations and
Power of Attorney and no such Consent, Letter of Representations
and Power of Attorney shall have been revoked prior to 4:00 p.m.,
Maryland time, on December 30, 1998 (after which time such
Consents, Letters of Representations and Powers of Attorney by
their terms shall be irrevocable).
(ii) Each ATRECO Stockholder shall have submitted to ATAPCO a duly
executed ATRECO Consent, Letter of Representations and Power of
Attorney and no such Consent, Letter of Representations and Power
of Attorney shall have been revoked prior to 4:00 p.m., Maryland
time, on December 30, 1998 (after which time such Consents, Letters
of Representations and Powers of Attorney by their terms shall be
irrevocable).
(iii) Each Gateway Stockholder shall have submitted to ATAPCO a
duly executed Gateway Consent, Letter of Representations and Power
of Attorney and no such Consent, Letter of Representations and
Power of Attorney shall have been revoked prior to 4:00 p.m.,
Maryland time, on December 30, 1998 (after which time such
Consents, Letters of Representations and Powers of Attorney shall
by their terms be irrevocable).
(b) IRS Ruling. ATAPCO shall have obtained the Supplemental Ruling
from the IRS confirming the IRS Ruling.
(c) No Injunction or Restraint. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Authority preventing the consummation of
any transaction that is part of the Reorganization shall be in effect;
provided, however, that each of the parties shall have used its best efforts
to prevent the entry of any such temporary restraining order, injunction or
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other order and to appeal as promptly as possible any injunction or other
order that may be entered.
(d) Resignations. All resignations contemplated by Section 4.8 shall
have been received and be acceptable in form and substance.
(e) Ancillary Agreements. Each of the Ancillary Agreements shall have
been executed by all necessary parties.
(f) Other Transactions.
(i) In the case of the ATAPCO Merger, every transaction or other
action required by this Agreement or any Ancillary Agreement to be
taken or completed prior to the effectiveness of the ATAPCO Merger
shall have been taken or completed and every transaction or other
action required by this Agreement or any Ancillary Agreement to be
taken or completed after the effectiveness of the ATAPCO Merger
shall not have been taken or completed.
(ii) In the case of the Share Exchanges, every transaction and
other action (including effecting the ATAPCO Merger) required by
this Agreement or any Ancillary Agreement to be taken or completed
prior to the Effective Time shall have been taken or completed.
(g) Miller & Chevalier Letter and Opinion.
(i) ATAPCO, AI, ATRECO and Gateway shall have received an opinion
from Miller & Chevalier, Chartered, in form and substance
satisfactory to them, (1) restating all of the factual information,
representations and statements provided to the IRS in connection
with the IRS Ruling and the Supplemental Ruling and on which the
IRS, in the opinion of Miller & Chevalier, relied in issuing the
IRS Ruling and the Supplemental Ruling and (2) confirming that to
the extent the facts relating to the transactions described in this
Agreement, the Ancillary Agreements and the Information Statement
differ from or were not described in the factual material submitted
to the IRS, in the opinion of Miller & Chevalier, such differences
and/or omissions will have no effect on the validity of the IRS
Ruling and the Supplemental Ruling. Miller & Chevalier's opinions
will be based on the facts existing at the Effective Time, and no
assurance can be given that factual changes subsequent to the
Effective Time (unless otherwise described in this Agreement, the
Ancillary Agreements, the Information Statement or the factual
information, representation and statement provided to the IRS in
connection with the IRS Ruling and the Supplemental Ruling) will
not have a material effect on the tax treatment of the transaction.
(ii) ATAPCO, AI, ATRECO and Gateway shall have received an opinion
from Miller & Chevalier, in form and substance satisfactory to
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them, as to certain federal income tax consequences of the
Reorganization and certain related matters.
(h) Fairness Opinion. The opinion of Warburg Dillon Read, delivered to
the Board of Directors of ATAPCO on November 19, 1998, to the effect
that the Reorganization is fair to the stockholders of ATAPCO from a
financial point of view, shall not have been withdrawn prior to the
Effective Time.
(i) Schedules. Each of the Schedules shall have been agreed to by the
parties and each of Louis B. Thalheimer, Henry A. Rosenberg, Jr. and
Daniel B. Hirschhorn.
(j) Certification. Each of Louis Thalheimer, Henry Rosenberg and
Daniel Hirschhorn shall have executed a certificate in the form attached
hereto as Schedule 5.1(i), dated as of the Exchange Date, certifying
that all Conditions Precedent have been satisfied or waived.
ARTICLE VI. SHARED LIABILITIES AND INDEMNIFICATION
SECTION 6.1. Shared Liability Account. Prior to the Effective Time,
ATAPCO will deposit into an account (the "Shared Liability Account")
controlled by Baltimore Management, in addition to the cash set forth in
Section 4.27, (i) $3 million in cash in the event that the sale of the
Northern Computers Business has not been completed prior to the Effective
Time or (ii) $10 million in cash in the event the sale of the Northern
Computers Business has been completed prior to the Effective Time. The
parties agree that all cash available from the disposition of any Calvert
Business (or any portion thereof) shall be deposited in the Shared Liability
Account so as to increase the balance in such account (not including any
amounts transferred to the Shared Liability Account under Section 4.27) from
time to time to $10 million. If at any time the amount in the Shared
Liability Account falls below $3 million, Baltimore Management shall make a
request to Calvert to provide funds to increase the amount in the Shared
Liability Account to $10 million (or such lower amount as may be permitted
following the first and second anniversaries of the Exchange Date) and
Calvert shall provide such funds to the extent such funds are available to
Calvert at the time of the request. If at any time Calvert does not have
sufficient funds to provide to the Shared Liability Account as required by
the preceding sentence, Baltimore Management shall request that each of New
ATAPCO, ATRECO and Gateway directly contribute to the Shared Liability
Account an amount equal to the amount of funds required to increase the
Shared Liability Account to the required level multiplied by the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage, respectively,
and each of New ATAPCO, ATRECO and Gateway agrees to make such contributions
upon such request. On the first anniversary of the Exchange Date, the
aggregate amount to be maintained in the Shared Liability Account shall be
reduced to $6.7 million and on the second anniversary of the Exchange Date
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the aggregate amount to be maintained in the Shared Liability Account shall
be reduced to $3.3 million through the payment of any funds in excess of such
amounts to New ATAPCO, ATRECO and Gateway in accordance with the New ATAPCO
Percentage, the ATRECO Percentage and the Gateway Percentage, respectively;
provided that if any of New ATAPCO, ATRECO or Gateway shall object to any
such reduction in writing sent to the other parties prior to the relevant
anniversary of the Exchange Date, such reduction shall not take place. Prior
to the third anniversary of the Exchange Date, the parties will negotiate in
good faith regarding extending the Shared Liability Account if appropriate
and necessary to provide resources for fulfilling the parties' continuing
obligations after that date under this Agreement and the Ancillary
Agreements. In the absence of such an extension, the Shared Liability
Account shall be terminated on the third anniversary of the Exchange Date;
provided, that if any Third Party Claims (as defined herein) with respect to
Shared Liabilities are pending or threatened on such date, the Shared
Liability Account shall not be terminated until all such Third Party Claims
have been finally resolved. Upon termination, the funds remaining in the
Shared Liability Account shall be distributed to New ATAPCO, ATRECO and
Gateway in accordance with the New ATAPCO Percentage, the ATRECO Percentage
and the Gateway Percentage, respectively. At the time Baltimore Management
is liquidated or New ATAPCO, ATRECO and Gateway cease to own at least 50% of
the equity interest in Baltimore Management, the Shared Liability Account
shall be transferred to an escrow agent mutually acceptable to New ATAPCO,
ATRECO and Gateway, and such escrow agent will thereafter manage the Shared
Liability Account subject to the terms and conditions of this Agreement and
any Ancillary Agreements.
SECTION 6.2. Payment of Shared Liabilities from Shared Liability
Account. Following the Effective Time, Baltimore Management shall apply the
funds in the Shared Liability Account solely to the payment of Shared
Liabilities. All requests for payment of any Shared Liability shall be
forwarded to Baltimore Management promptly after receipt by one of the parties
of a request for payment of a Shared Liability from a third party or a
party's discovery that it has previously paid a Shared Liability using its
own funds or a party becomes legally obligated to pay a Shared Liability.
Upon receipt of any such payment request for any amounts less than $50,000,
Baltimore Management shall make the appropriate disbursements. For payment
requests equal to or in excess of $50,000, Baltimore Management shall,
immediately upon receipt of the same, forward by facsimile a copy of such
payment request to each party. Each party shall have two business days in
the case of any request for payment of an amount between $50,000 and $250,000
and five business days in the case of any request for payment of an amount in
excess of $250,000 from the receipt of such payment request to notify
Baltimore Management and the other parties of any objections to the same;
provided, however, that the failure to make such objections shall not prevent
any party to further dispute the right to make such payment in whole or in
part. Unless a party makes any such objection within the designated period,
Baltimore Management shall make the appropriate disbursement. Baltimore
Management will provide New ATAPCO, ATRECO and Gateway with reports on a
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monthly basis setting forth the disbursements that have been made from the
Shared Liability Account. All disputes as to whether any payment from the
Shared Liability Account was in satisfaction of a Shared Liability or whether
a requested payment should be made from the Shared Liability Account shall be
resolved in accordance with Article IX hereof.
SECTION 6.3. Other Provisions Regarding Shared Liabilities.
(a) If a party has paid or becomes obligated to pay any Shared
Liability and there are insufficient funds in the Shared Liability Account to
satisfy the payment request submitted to Baltimore Management in accordance
with Section 6.2 with respect to such Shared Liability, subject to the terms
of Section 6.2, Baltimore Management shall disburse all remaining funds from
the Shared Liability Account as appropriate and notify the other two parties
of the amount each such party owes to the requesting party in respect of such
Shared Liability. Promptly following receipt of such notice, the other two
parties will pay the appropriate amounts to the requesting party.
(b) If a party has paid or becomes obligated to pay any Shared
Liability after the termination of the Shared Liability Account, each of the
other two parties will pay its applicable share of the Shared Liability to
the party which has paid or become obligated to pay such Shared Liability
promptly after receiving notice from the paying party.
(c) In the event that any of New ATAPCO, ATRECO or Gateway
(i) liquidates, dissolves or undertakes any corporate reorganization and
there is no successor entity contractually obligated to satisfy any such
party's obligations under this Agreement following such transaction, (ii) is
legally discharged from its obligations under this Agreement, or (iii) is
unable to satisfy its obligations under this Agreement due to the pendency of
any federal or state bankruptcy or similar proceeding (in any such
circumstance, a "Dissolved Party"), then for all purposes under this
Agreement or any Ancillary Agreement the remaining parties shall be liable
for a percentage of the Shared Liabilities equal to the quotient of (i) each
party's original applicable percentage, divided by (ii) 100 minus the
original applicable percentage of the Dissolved Party. Notwithstanding the
above sentence, in no event shall such party's acceptance of such Liability
be considered a release or novation or otherwise preclude such party from
seeking indemnification for its increased costs hereunder from a Dissolved
Party.
(d) The parties agree to enter into one or more "common interest"
agreements in a form to be agreed upon in respect of third-party claims
relating to any Shared Liabilities.
(e) If the Shared Liability Account is terminated before New ATAPCO (or
its stockholders) has paid all Pre-Exchange Taxes (as defined in the Tax
Allocation Agreement) resulting from application of the provisions of Section
1363(d) of the Code (the "LIFO Recapture Taxes"), on or before the date of
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such termination, ATRECO will pay to New ATAPCO 37.925%, and Gateway will pay
to New ATAPCO 22.952%, of the amount of the LIFO Recapture Taxes remaining to
be paid by New ATAPCO (or its stockholders) after the date of the termination
of the Shared Liability Account.
SECTION 6.4. Indemnification Obligations.
(a) In addition to the indemnification obligations specifically set
forth elsewhere in this Agreement or in any Ancillary Agreement, the parties
shall have the indemnification obligations set forth in this Article VI.
(b) Indemnification by New ATAPCO. Except as otherwise specifically
set forth in any provision of this Agreement or of any Ancillary Agreement,
New ATAPCO shall indemnify, defend and hold harmless the ATRECO Indemnitees
and the Gateway Indemnitees from and against any and all Indemnifiable Losses
of the ATRECO Indemnitees and the Gateway Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the New ATAPCO Liabilities
or alleged New ATAPCO Liabilities or (ii) any breach by New ATAPCO or any
member of the New ATAPCO Group of any provision of this Agreement or any
Ancillary Agreement.
(c) Indemnification by ATRECO. Except as otherwise specifically set
forth in any provision of this Agreement or of any Ancillary Agreement,
ATRECO shall indemnify, defend and hold harmless the New ATAPCO Indemnitees
and the Gateway Indemnitees from and against any and all Indemnifiable Losses
of the New ATAPCO Indemnitees and the Gateway Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the ATRECO Liabilities or
alleged ATRECO Liabilities or (ii) any breach by ATRECO or any member of the
ATRECO Group of any provision of this Agreement or any Ancillary Agreement.
(d) Indemnification by Gateway. Except as otherwise specifically set
forth in any provision of this Agreement or of any Ancillary Agreement,
Gateway shall indemnify, defend and hold harmless the New ATAPCO Indemnitees
and the ATRECO Indemnitees from and against any and all Indemnifiable Losses
of the New ATAPCO Indemnitees and the ATRECO Indemnitees arising out of, by
reason of or otherwise in connection with -- (i) the Gateway Liabilities or
alleged Gateway Liabilities or (ii) any breach by Gateway or any member of
the Gateway Group of any provision of this Agreement or any Ancillary
Agreement.
SECTION 6.5. Procedures for Indemnification With Respect to Third Party
Claims.
(a) The provisions of this Section 6.5 are applicable to the
indemnification obligations of the parties hereto to the extent those
obligations relate to Third Party Claims (as defined below) and are not the
subject of the provisions of Section 6.6.
(b) Third Party Claims. If a claim or demand is made against a New
ATAPCO Indemnitee, an ATRECO Indemnitee or a Gateway Indemnitee (each, an
"Indemnitee") by any Person who is not a party to this Agreement (a "Third
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Party Claim") as to which such Indemnitee is entitled to indemnification
pursuant to this Agreement, such Indemnitee shall notify the party which is
or may be required pursuant to Section 6.4(b), (c) or (d) hereof to make such
indemnification (the "Indemnifying Party") in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 15
business days) after receipt by such Indemnitee of written notice of the
Third Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent
the Indemnifying Party shall have been actually prejudiced as a result of
such failure (except that the Indemnifying Party shall not be liable for any
expenses incurred during the period in which the Indemnitee failed to give
such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying
Party, promptly (and in any event within five business days) after the
Indemnitee's receipt thereof, copies of all notices and documents (including
court papers) received by the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges in writing its obligation to indemnify
the Indemnitee therefor, to assume the defense thereof with counsel selected
by the Indemnifying Party; provided that such counsel is not reasonably
objected to by the Indemnitee. Should the Indemnifying Party so elect to
assume the defense of a Third Party Claim, the Indemnifying Party shall,
within 30 days (or sooner if the nature of the Third Party Claim so
requires), notify the Indemnitee of its intent to do so, and the Indemnifying
Party shall thereafter not be liable to the Indemnitee for legal or other
expenses subsequently incurred by the Indemnitee in connection with the
defense thereof; provided, that such Indemnitee shall have the right to
employ counsel to represent such Indemnitee if, in such Indemnitee's
reasonable judgment, a conflict of interest between such Indemnitee and such
Indemnifying Party exists in respect of such claim which would make
representation of both such parties by one counsel inappropriate, and in such
event the fees and expenses of such separate counsel shall be paid by such
Indemnifying Party. If the Indemnifying Party assumes such defense, the
Indemnitee shall have the right to participate in the defense thereof and to
employ counsel, subject to the proviso of the preceding sentence, at its own
expense, separate from the counsel employed by the Indemnifying Party, it
being understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel
employed by the Indemnitee for any period during which the Indemnifying Party
has failed to assume the defense thereof (other than during the period prior
to the time the Indemnitee shall have given notice of the Third Party Claim
as provided above). If the Indemnifying Party so elects to assume the
defense of any Third Party Claim, all of the Indemnitees shall cooperate with
the Indemnifying Party in the defense or prosecution thereof, including by
providing or causing to be provided, Records and witnesses as soon as
reasonably practicable after receiving any request therefor from or on behalf
of the Indemnifying Party.
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If the Indemnifying Party acknowledges in writing responsibility
for a Third Party Claim, then in no event will the Indemnitee admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the Indemnifying Party's prior written consent; provided,
however, that the Indemnitee shall have the right to settle, compromise or
discharge such Third Party Claim without the consent of the Indemnifying Party
if the Indemnitee releases the Indemnifying Party from its indemnification
obligation hereunder with respect to such Third Party Claim and such
settlement, compromise or discharge would not otherwise adversely affect the
Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settlement,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the
full amount of the liability in connection with such Third Party Claim and
releases the Indemnitee completely in connection with such Third Party Claim
and that would not otherwise adversely affect the Indemnitee; provided,
however, that the Indemnitee may refuse to agree to any such settlement,
compromise or discharge if the Indemnitee agrees that the Indemnifying
Party's indemnification obligation with respect to such Third Party Claim
shall not exceed the amount that would be required to be paid by or on behalf
of the Indemnifying Party in connection with such settlement, compromise or
discharge. If an Indemnifying Party elects not to assume the defense of a
Third Party Claim, or fails to notify an Indemnitee of its election to do so
as provided herein, such Indemnitee may compromise, settle or defend such
Third Party Claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable
for the fees and expenses of counsel incurred by the Indemnitee in defending
such Third Party Claim) if the Third Party Claim seeks an order, injunction
or other equitable relief or relief for other than money damages against the
Indsonably determines, after conferring with its counsel, cannot be separated
from any related claim for money damages. If such equitable relief or other
relief portion of the Third Party Claim can be so separated from that for
money damages, the Indemnifying Party shall be entitled to assume the defense
of the portion relating to money damages.
(c) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third Party Claim against any claimant or
plaintiff asserting such Third Party Claim. Such Indemnitee shall cooperate
with such Indemnifying Party in a reasonable manner, and at the cost and
expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
(d) The remedies provided in this Article VI shall be cumulative and
shall not preclude assertion by any Indemnitee of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
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SECTION 6.6. Procedures for Third Party Claims That Are for Shared
Liabilities.
(a) Compliance with the provisions of Section 6.5 and the remaining
subsections of this Section 6.6 is not required with respect to any Shared
Liability that either -(i) is paid out of the Shared Liability Account, or
(ii) is paid by New ATAPCO, ATRECO or Gateway if the payor in its sole
reasonable discretion determines either (A) that such payment is in the
ordinary course of business or (B) that there is no defense against such
Shared Liability that is more likely than not to prevail. In the case of any
such Shared Liability, the parties shall make prompt payments to each other
as required by Sections 6.1, 6.2 and 6.3 and shall thereafter cooperate if
one or more parties elects to pursue a recovery of part or all of any
payments made with respect thereto.
(b) If a Third Party Claim is made against a party hereto or any of its
Subsidiaries (the "Defender") which would, if adversely determined, result in
a Shared Liability, such Defender shall notify the other parties hereto (the
"Contributing Parties") in writing, and in reasonable detail of the Claim
promptly (and in any event within 15 business days) after receipt by such
Defender of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the obligations of the
Contributing Parties provided for in this Agreement or any Ancillary
Agreement except to the extent any Contributing Party shall have been
actually prejudiced as a result of such failure. Thereafter, the Defender
shall deliver to the Contributing Parties, promptly (and in any event within
five business days) after the Defender's receipt thereof, copies of all
notices and documents (including court papers) received by the Defender
relating to the Third Party Claim.
(c) If a Third Party Claim is made against a Defender which would, if
adversely determined, result in a Shared Liability, the Contributing Parties
shall be entitled to participate in the defense thereof if such Contributing
Party acknowledges in writing that the Third party Claim relates to a
Shared Liability, it being understood that the Defender shall control
such defense. Each Contributing Party shall cooperate with the Defender in
the defense or prosecution of the Third Party Claim, including by providing
or causing to be provided, Records and witnesses as soon as reasonably
practicable after receiving any request therefor from or on behalf of
Defender.
(d) If a Contributing Party acknowledges in writing proportionate
responsibility for such a Third Party Claim, then in no event will the
Defender admit any liability with respect to, or settle, compromise or
discharge such Third Party Claim without the Contributing Party's prior
written consent; provided, however, that the Defender shall have the right to
settle, compromise or discharge such Third Party Claim without the consent of
the Contributing Party if the Defender releases the Contributing Party from
its proportionate liability for the Shared Liability hereunder with respect
to such Third Party Claim and such settlement, compromise or discharge would
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not otherwise adversely affect the Contributing Party. If a Contributing
Party does not notify the Defender of its acknowledgment of a proportionate
liability for the Shared Liability, such Defender may compromise, settle or
defend such Third Party Claim without the consent or participation of such
Contributing Party without prejudice to its right to indemnification or
contribution. Notwithstanding the foregoing, the Defender shall present
every settlement proposal to the Contributing Parties. If the proposed
settlement offer is rejected by Defender and/or one or more of the
Contributing Parties, the Defender and/or Contributing Parties proposing to
accept the proposed settlement offer shall be entitled to pay an amount equal
to their respective applicable Percentage of the proposed settlement amount
to the remaining parties. If any party or parties exercise such right, the
remaining parties shall assume the defense of the Third Party Claim and the
parties who have paid the applicable Percentage of the proposed settlement
amount shall have no further Liability with respect to the Third Party
Claim and shall be indemnified by the remaining parties against any such
Liability.
SECTION 6.7. Indemnification and Contribution Payments.
Indemnification and contribution required by this Article VI shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss, Liability,
claim, damage or expense is incurred and in no event later than 10 business
days following receipt of notification of any of the foregoing.
SECTION 6.8. Tax Treatment of Indemnification and Contribution
Payments. The parties agree that, for federal and state income tax purposes,
they shall treat all payments made pursuant to this Article VI or the
indemnification provisions of any Ancillary Agreement as contributions to
capital and/or distributions, as the case may be, made immediately prior to
the Effective Time.
ARTICLE VII. ACCESS TO INFORMATION
SECTION 7.1. Provision of Corporate Records.
(a) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by ATRECO or
Gateway for specific and identified agreements, documents, books, records or
files (collectively, "Records") which relate to (x) the conduct of ATAPCO's
business (or the business of any and all of the subsidiaries of ATAPCO),
prior to the Effective Time, or (y) any Ancillary Agreement to which New
ATAPCO and ATRECO and/or Gateway are parties, as applicable, New ATAPCO shall
arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the
originals thereof if the party making the request has a reasonable need for
such originals) in the possession or control of New ATAPCO or any of its
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Subsidiaries, but only to the extent such items are not already in the
possession or control of the requesting party.
(b) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by New
ATAPCO or Gateway for specific and identified Records which relate to (x) the
conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any Ancillary
Agreement to which ATRECO and New ATAPCO and/or Gateway are parties, as
applicable, ATRECO shall arrange, as soon as reasonably practicable following
the receipt of such request, for the provision of appropriate copies of such
Records (or the originals thereof if the party making the request has a
reasonable need for such originals) in the possession or control of ATRECO or
any of its Subsidiaries, but only to the extent such items are not already in
the possession or control of the requesting party.
(c) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article
will govern), after the Exchange Date, upon the prior written request
by New ATAPCO or ATRECO for specific and identified Records which relate to
(x) the conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any Ancillary
Agreement to which Gateway and New ATAPCO and/or ATRECO are parties, as
applicable, Gateway shall arrange, as soon as reasonably practicable
following the receipt of such request, for the provision of appropriate
copies of such Records (or the originals thereof if the party making the
request has a reasonable need for such originals) in the possession or
control of Gateway or any of its Subsidiaries, but only to the extent such
items are not already in the possession or control of the requesting party.
(d) Other than in circumstances in which indemnification is sought
pursuant to Article VI (in which event the provisions of such Article will
govern), after the Exchange Date, upon the prior written request by New
ATAPCO, ATRECO or Gateway for specific and identified Records which relate to
(x) the conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time, or (y) any Ancillary
Agreement to which Calvert and/or Baltimore Management are parties, the
parties shall cause Calvert or Baltimore Management to arrange, as soon as
reasonably practicable following the receipt of such request, for the
provision of appropriate copies of such Records (or the originals thereof if
the party making the request has a reasonable need for such originals) in the
possession or control of Calvert or any of its Subsidiaries or Baltimore
Management or any of its Subsidiaries, but only to the extent such items are
not already in the possession or control of the requesting party.
(e) New ATAPCO, ATRECO and Gateway shall, and shall cause their
Subsidiaries to, retain all Records (including those of Calvert and Baltimore
Management) for a period of five years following the Exchange Date.
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SECTION 7.2. Access to Information. Other than in circumstances in
which indemnification is sought pursuant to Article VI (in which event the
provisions of such Article will govern), from and after the Exchange Date,
each of New ATAPCO, ATRECO and Gateway shall, and shall cause Calvert and
Baltimore Management to, afford to the others and their authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, books and Records of such party and its Subsidiaries insofar as
such access is reasonably required by another party and relates to the
conduct of ATAPCO's business (or the business of any and all of the
Subsidiaries of ATAPCO), prior to the Effective Time.
SECTION 7.3. Reimbursement; Other Matters. Except to the extent
otherwise contemplated by any Ancillary Agreement, a party (including Calvert
and Baltimore Management) providing Records or access to information to any
other party under this Article VII shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments for such
amounts, relating to supplies, disbursements and other out-of-pocket
expenses, as may be reasonably incurred in providing such Records or access
to information.
SECTION 7.4. Confidentiality. Each of (i) New ATAPCO and its
Subsidiaries, (ii) ATRECO and its Subsidiaries, (iii) Gateway and its
Subsidiaries, (iv) Calvert and its Subsidiaries and (v)Baltimore Management
and its Subsidiaries shall not use or permit the use of (without the prior
written consent of the other relevant party or parties) and shall keep, and
shall cause its consultants and advisors to keep, confidential all
information concerning the other parties in its possession, its custody or
under its control (except to the extent that (A) such information has been in
the public domain through no fault of such party, or (B) such information has
been later lawfully acquired by such party from other sources not under any
obligation to maintain such confidentiality, or (C) this Agreement or any
other Ancillary Agreement or any other agreement entered into pursuant hereto
permits the use or disclosure of such information) to the extent such
information (w) relates to or was acquired during the period up to the
Effective Time, (x) relates to any Ancillary Agreement, (y) is obtained in
the course of performing services for another party pursuant to any Ancillary
Agreement, or (z) is based upon or is derived from information described in
the preceding clauses (w), (x) or (y), and each party shall not (without the
prior written consent of the other relevant party or parties) otherwise
release or disclose such information to any other person, except such party's
auditors and attorneys, unless compelled to disclose such information by
judicial or administrative process or unless such disclosure is required by
law and such party has used commercially reasonable efforts to consult with
the other affected party or parties prior to such disclosure and afforded
such party or parties the reasonable opportunity to take actions to secure
confidential treatment.
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SECTION 7.5. Privileged Matters. The parties hereto recognize that
legal and other professional services that have been and will be provided
prior to the Effective Time have been and will be rendered for the benefit of
each of the members of the New ATAPCO Group, the members of the ATRECO Group,
the members of the Gateway Group, the members of the Calvert Group and the
members of the Baltimore Management Group and that each of the members of the
New ATAPCO Group, the members of the ATRECO Group, the members of the Gateway
Group, the members of the Calvert Group and the members of the Baltimore
Management Group should be deemed to be the client for the purposes of
asserting all privileges which may be asserted under applicable law. To
allocate the interests of each party in the information as to which any party
is entitled to assert a privilege, the parties agree as follows:
(a) New ATAPCO shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged
information which relates solely to the New ATAPCO Business, whether or not
the privileged information is in the possession of or under the control of
New ATAPCO, ATRECO, Gateway, Calvert or Baltimore Management. New ATAPCO
shall also be entitled, in perpetuity, to control the assertion or waiver of
all privileges in connection with privileged information that relates solely
to the subject matter of any claims constituting New ATAPCO Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by New ATAPCO, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management.
(b) ATRECO shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the ATRECO Business, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management. ATRECO shall also be
entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information which relates solely
to the subject matter of any claims constituting ATRECO Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by ATRECO whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management.
(c) Gateway shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Gateway Business, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management. Gateway shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to the subject
matter of any claims constituting Gateway Liabilities, now pending or which
may be asserted in the future, in any lawsuits or other proceedings initiated
against or by Gateway, whether or not the privileged information is in the
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possession or under the control of New ATAPCO, ATRECO, Gateway, Calvert or
Baltimore Management.
(d) Calvert shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the Calvert Business, whether or not the privileged
information is in the possession of or under the control of New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management. Calvert shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to the subject
matter of any claims constituting Calvert Liabilities, now pending or which
may be asserted in the future, in any lawsuits or other proceedings initiated
against or by Calvert, whether or not the privileged information is in
the possession or under the control of New ATAPCO, ATRECO, Gateway, Calvert
or Baltimore Management.
(e) Baltimore Management shall be entitled, in perpetuity, to control
the assertion or waiver of all privileges in connection with privileged
information which relates solely to the Baltimore Management Business,
whether or not the privileged information is in the possession of or under
the control of New ATAPCO, ATRECO, Gateway, Calvert or Baltimore Management.
Baltimore Management shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged
information which relates solely to the subject matter of any claims
constituting Baltimore Management Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other proceedings initiated
against or by Baltimore Management, whether or not the privileged information
is in the possession or under the control of New ATAPCO, ATRECO, Gateway,
Calvert or Baltimore Management.
(f) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this
Section 7.5, with respect to all privileges not allocated pursuant to the
terms of Sections 7.5(a)-(e). All privileges relating to any claims,
proceedings, litigation, disputes, or other matters which involve New ATAPCO,
ATRECO, Gateway, Calvert and Baltimore Management in respect of which all
parties retain any responsibility or Liability under this Agreement or any
Ancillary Agreement, shall be subject to a shared privilege among them.
(g) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which any other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation with third parties or
as provided in Section 7.5(h). Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within 20 days after
notice upon the other party requesting such consent.
(h) In the event of any litigation or dispute between or among any of
the parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto,
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either such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that
such waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the parties
and/or their Subsidiaries, and shall not operate as a waiver of the shared
privilege with respect to third parties.
(i) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the
rights of the other parties, and shall not unreasonably withhold consent to
any request for waiver by another party. Each party hereto specifically
agrees that it will not withhold consent to waiver for any purpose except to
protect its own legitimate interests.
(j) Upon receipt by any party hereto or by any Subsidiary thereof of
any subpoena, discovery or other request which arguably calls for the
production or disclosure of information subject to a shared privilege or as
to which another party has the sole right hereunder to assert a privilege, or
if any party obtains knowledge that any of its or any of its Subsidiaries'
current or former directors, officers, agents or employees have received any
subpoena, discovery or other requests which arguably calls for the production
or disclosure of such privileged information, such party shall promptly notify
the other party or parties of the existence of the request and shall provide
the other party or parties a reasonable opportunity to review the information
and to assert any rights it or they may have under this Section 7.5 or
otherwise to prevent the production or disclosure of such privileged
information.
(k) The transfer of all Records and other information pursuant to this
Agreement or any Ancillary Agreement is made in reliance on the agreement of
New ATAPCO, ATRECO and Gateway, as set forth in Sections 7.4 and 7.5, to, and
to cause Calvert and Baltimore Management to, maintain the confidentiality of
privileged information and to assert and maintain all applicable privileges.
The access to information being granted pursuant to Sections 7.1 and 7.2
hereof, the agreement to provide witnesses and individuals pursuant to
Section 4.21, Section 6.5 and Section 6.6 hereof, the furnishing of notices
and documents and other cooperative efforts contemplated by Sections 6.5 and
6.6 hereof, and the transfer of privileged information between and among the
parties and their respective Subsidiaries pursuant to this Agreement shall
not be deemed a waiver of any privilege that has been or may be asserted
under this Agreement or otherwise.
SECTION 7.6. Ownership of Information. Any information owned by one
party or any of its Subsidiaries that is provided to a requesting party
pursuant to Article VI or this Article VII shall be deemed to remain the
property of the providing party. Unless specifically set forth herein,
nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such information.
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SECTION 7.7. Limitation of Liability.
(a) No party shall have any liability to any other party in the event
that any information exchanged or provided pursuant to this Agreement which
is an estimate or forecast, or which is based on an estimate or forecast, is
found to be inaccurate.
(b) No party or any Subsidiary thereof shall have any Liability or
claim against any other party or any Subsidiary of any other party based
upon, arising out of or resulting from any agreement, arrangement, course of
dealing or understanding existing on or prior to the Exchange Date (other
than this Agreement or any Ancillary Agreement or any agreement entered into
in connection herewith or in order to consummate the transactions
contemplated hereby or thereby), unless such agreement, arrangement, course
of dealing or understanding is listed on Schedule 7.7(b) hereto, and any such
Liability or claim, whether or not in writing, which is not reflected on such
Schedule, is hereby irrevocably canceled, released and waived.
SECTION 7.8. Other Agreements Providing for Exchange of Information.
The rights and obligations granted under this Article VII are subject to any
specific limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of information set forth in any Ancillary
Agreement.
ARTICLE VIII. ADMINISTRATIVE SERVICES
SECTION 8.1. Performance of Services. Beginning on the Exchange Date,
Baltimore Management will provide to the parties hereto, Calvert and their
Subsidiaries such services on such terms and conditions as may be set forth
in the Administrative Services Agreement.
SECTION 8.2. Independence. Unless otherwise agreed in writing, all
employees and representatives of Baltimore Management providing the scheduled
services to a recipient of such services will be deemed for purposes of all
compensation and employee benefits matters to be employees or representatives
of Baltimore Management and not employees or representatives of the recipient
of such services. In performing such services, such employees and
representatives will be under the direction, control and supervision of
Baltimore Management (and not the recipient of such services) and Baltimore
Management will have the sole right to exercise all authority with respect to
the employment (including, without limitation, termination of employment),
assignment and compensation of such employees and representatives.
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ARTICLE IX. DISPUTE RESOLUTION
SECTION 9.1. Negotiation. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this
Agreement or the transactions contemplated hereby, including, without
limitation, any claim based on contract, tort, statute or constitution (but
excluding any controversy, dispute or claim arising out of any agreement
relating to the use or lease of real property if any third party is a party
to such controversy, dispute or claim) (collectively, "Agreement Disputes"),
the appropriate officers designated by the parties shall negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute,
provided such reasonable period shall not, unless otherwise agreed by the
parties in writing, exceed 30 days from the time the parties began such
negotiations; provided further that in the event of any arbitration in
accordance with Section 9.2 hereof, the parties shall not assert the defenses
of statute of limitations and laches arising for the period beginning after
the date the parties began negotiations hereunder, and any contractual time
period or deadline under this Agreement to which such Agreement Dispute
relates shall not be deemed to have passed until such Agreement Dispute has
been resolved.
SECTION 9.2. Arbitration. If after such reasonable period such
officers are unable to settle such Agreement Dispute (and in any event,
unless otherwise agreed in writing by the parties, after 60 days have elapsed
from the time the parties began such negotiations), such Agreement Dispute
shall be determined, at the request of any party, by arbitration conducted in
Baltimore County, Maryland, before and in accordance with the then-existing
International Arbitration Rules of the American Arbitration Association (the
"Rules"). In any dispute between the parties hereto, the number of
arbitrators shall be three. Any judgment or award rendered by the
arbitrators shall be final, binding and nonappealable (except upon grounds
specified in 9 U.S.C. Section 10(a) as in effect on the date hereof). If the
parties are unable to agree on the arbitrators, the arbitrators shall be
selected in accordance with the Rules; provided that each arbitrator shall be
a U.S. national. Any controversy concerning whether an Agreement Dispute is
an arbitrable Agreement Dispute, whether arbitration has been waived, whether
an assignee of this Agreement is bound to arbitrate, or as to the
interpretation of enforceability of this Article IX shall be determined by
the arbitrators. In resolving any dispute, the parties intend that the
arbitrators apply the substantive laws of the State of Maryland, without
regard to the choice of law principles thereof. The parties intend that the
provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. The parties agree to comply with any award made in any such
arbitration proceeding that has become final in accordance with the Rules and
agree to enforcement of or entry of judgment upon such award, by any court of
competent jurisdiction, including (a) the Circuit Court, 3rd Judicial
Circuit, Baltimore County, Maryland, or (b) the United States District Court
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for the District of Maryland, in accordance with Section 11.17 hereof. The
arbitrators shall be entitled, if appropriate, to award any remings,
including, without limitation, monetary damages, specific performance and all
other forms of legal and equitable relief; provided, however, the arbitrators
shall not be entitled to award punitive damages. Without limiting the
provisions of the Rules, unless otherwise agreed in writing by or among the
parties or permitted by this Agreement, the parties shall keep confidential
all matters relating to the arbitration or the award, provided such matters
may be disclosed (i) to the extent reasonably necessary in any proceeding
brought to enforce the award or for entry of a judgment upon the award and
(ii) to the extent otherwise required by law. Notwithstanding Article 32 of
the Rules, the party other than the prevailing party in the arbitration shall
be responsible for all of the costs of the arbitration, including legal fees
and other costs specified by such Article 32. Nothing contained herein is
intended to or shall be construed to prevent any party, in accordance with
Article 22(3) of the Rules or otherwise, from applying to any court of
competent jurisdiction for interim measures or other provisional relief
(including, without limitation, injunctive or other equitable relief) in
connection with the subject matter of any Agreement Disputes.
SECTION 9.3. Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during
the course of dispute resolution pursuant to the provisions of this Article
IX with respect to all matters not subject to such dispute, controversy or
claim.
ARTICLE X. INSURANCE
SECTION 10.1. Policies and Rights Included Within Assets.
(a) The New ATAPCO Assets shall include (i) any and all rights of an
insured party under each of the New ATAPCO Shared Policies, subject to the
terms of such New ATAPCO Shared Policies and any limitations or obligations
of New ATAPCO contemplated by this Article X, specifically including rights
of indemnity and the right to be defended by or at the expense of the
insurer, with respect to all claims, suits, Actions, proceedings, injuries,
losses, Liabilities, damages and expenses incurred or claimed to have been
incurred on or prior to the Exchange Date by any party in or in connection
with the conduct of the New ATAPCO Business or, to the extent any claim is
made against New ATAPCO or any of its Subsidiaries, the conduct of the ATRECO
Business, the Gateway Business, the Calvert Business or the Baltimore
Management Business, and which claims, suits, Actions, proceedings, injuries,
losses, Liabilities, damages and expenses may arise out of an insured or
insurable occurrence under one or more of such New ATAPCO Shared Policies;
provided, however, that nothing in this clause shall be deemed to constitute
(or to reflect) an assignment of such New ATAPCO Shared Policies, or any of
them, to New ATAPCO, and (ii) the New ATAPCO Policies.
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(b) The ATRECO Assets shall include (i) any and all rights of an
insured party under each of the ATRECO Shared Policies, subject to the terms
of such ATRECO Shared Policies and any limitations or obligations of ATRECO
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended by or at the expense of the insurer, with
respect to all claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the ATRECO Business or, to the extent any claim is made against
ATRECO or any of its Subsidiaries, the conduct of the New ATAPCO
Businesstimore Management Business, and which claims, suits, Actions,
proceedings, injuries, losses, Liabilities, damages and expenses may arise
out of an insured or insurable occurrence under one or more of such ATRECO
Shared Policies; provided, however, that nothing in this clause shall be
deemed to constitute (or to reflect) an assignment of such ATRECO Shared
Policies, or any of them, to ATRECO, and (ii) the ATRECO Policies.
(c) The Gateway Assets shall include (i) any and all rights of an
insured party under each of the Gateway Shared Policies, subject to the terms
of such Gateway Shared Policies and any limitations or obligations of Gateway
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended by or at the expense of the insurer, with
respect to all claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the Gateway Business or, to the extent any claim is made against
Gateway or any of its Subsidiaries, the conduct of the New ATAPCO Business,
the ATRECO Business, the Calvert Business or the Baltimore Management
Business, and which claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Gateway Shared Policies; provided,
however, that nothing in this clause shall be deemed to constitute (or to
reflect) an assignment of such Gateway Shared Policies, or any of them, to
Gateway, and (ii) the Gateway Policies.
(d) The Calvert Assets shall include (i) any and all rights of an
insured party under each of the Calvert Shared Policies, subject to the terms
of such Calvert Shared Policies and any limitations or obligations of Calvert
contemplated by this Article X, specifically including rights of indemnity
and the right to be defended by or at the expense of the insurer, with
respect to all claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses incurred or claimed to have been incurred
on or prior to the Exchange Date by any party in or in connection with the
conduct of the Calvert Business or, to the extent any claim is made against
Calvert or any of its Subsidiaries, the conduct of the New ATAPCO Business,
the ATRECO Business, the Gateway Business and the Baltimore Management
Business, and which claims, suits, Actions, proceedings, injuries, losses,
Liabilities, damages and expenses may arise out of an insured or insurable
occurrence under one or more of such Calvert Shared Policies; provided,
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however, that nothing in this clause shall be deemed to constitute (or to
reflect) an assignment of such Calvert Shared Policies, or any of them, to
Calvert, and (ii) the Calvert Policies.
(e) The Baltimore Management Assets shall include (i) any and all
rights of an insured party under each of the Baltimore Management shared
Policies, subject to the terms of such Baltimore Management Shared Policies
and any limitations or obligations of Baltimore Management contemplated by
this Article X, specifically including rights of indemnity and the right to
be defended by or at the expense of the insurer, with respect to all claims,
suits, Actions, proceedings, injuries, losses, Liabilities, damages and
expenses incurred or claims to have been incurred on or prior to the Exchange
Date by any party in or in connection with the conduct of the Baltimore
Management Business or, to the extent any claim is made against Baltimore
Management or any of itthe ATRECO Business, the Gateway Business or the
Calvert Business, and which claims, suits, Actions proceedings, injuries,
losses, Liabilities, damages and expenses may arise out of an insured or
insurable occurrence under one or more of such Baltimore Management Shared
Policies; provided, however, that nothing in this clause shall be deemed to
constitute (or to reflect) an assignment of such Baltimore Management Shared
Policies, or any of them, to Baltimore Management, and (ii) the Baltimore
Management Policies.
SECTION 10.2. Post-Exchange Date Claims.
(a) If, subsequent to the Exchange Date, any Person shall assert a
claim against New ATAPCO or any of its Subsidiaries (including, without
limitation, where New ATAPCO or its Subsidiaries are joint defendants with
other Persons) with respect to any claim, suit, Action, proceeding, injury,
loss, Liability, damage or expense incurred or claimed to have been incurred
prior to the Exchange Date in or in connection with the conduct of the New
ATAPCO Business or, to the extent any claim is made against New ATAPCO or any
of its Subsidiaries (including, without limitation, where New ATAPCO or its
Subsidiaries are joint defendants with other Persons), the conduct of the
ATRECO Business, the Gateway Business, the Calvert Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the New ATAPCO Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of New ATAPCO, assert and attempt to collect any related
Insurance Proceeds under such New ATAPCO Shared Policy, and shall remit to
New ATAPCO any and all Insurance Proceeds collected with respect to such
asserted claim; provided, however, that New ATAPCO shall not be relieved of
the primary responsibility for reporting such Insured Claim accurately,
completely and in a timely manner.
(b) If, subsequent to the Exchange Date, any Person shall assert a
claim against ATRECO or any of its Subsidiaries (including, without
limitation, where ATRECO or its Subsidiaries are joint defendants with other
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Persons) with respect to any claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense incurred or claimed to have been incurred prior
to the Exchange Date in or in connection with the conduct of the ATRECO
Business or, to the extent any claim is made against ATRECO or any of its
Subsidiaries (including, wjoint defendants with other Persons), the conduct
of the New ATAPCO Business, the Gateway Business, the Calvert Business or the
Baltimore Management Business, and which claim, suit, Action, proceeding,
injury, loss, Liability, damage or expense may arise out of an insured or
insurable occurrence under one or more of the ATRECO Shared Policies,
Baltimore Management shall, at the time such claim is asserted, as the agent
and attorney-in-fact of ATRECO, assert and attempt to collect any related
Insurance Proceeds under such ATRECO Shared Policy, and shall remit to ATRECO
any and all Insurance Proceeds collected with respect to such asserted claim;
provided, however, that ATRECO shall not be relieved of the primary
responsibility for reporting such Insured Claim accurately, completely and in
a timely manner.
(c) If, subsequent to the Exchange Date, any Person shall assert a
claim against Gateway or any of its Subsidiaries (including, without
limitation, where Gateway or its Subsidiaries are joint defendants with other
Persons) with respect to any claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense incurred or claimed to have been incurred prior
to the Exchange Date in or in connection with the conduct of the Gateway
Business or, to the extent any claim is made against Gateway or any of its
Subsidiaries (including, without limitation, where Gateway or its
Subsidiaries are joint defendants with other Persons), the conduct of the New
ATAPCO Business, the ATRECO Business, the Calvert Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
occurrence under one or more of the Gateway Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of Gateway, assert and attempt to collect any related
Insurance Proceeds under such Gateway Shared Policy, and shall remit to
Gateway any and alh asserted claim; provided, however, that Gateway shall not
be relieved of the primary responsibility for reporting such Insured Claim
accurately, completely and in a timely manner.
(d) If, subsequent to the Exchange Date, any Person shall assert a
claim against Calvert or any of its Subsidiaries (including, without
limitation, where Calvert or its Subsidiaries are joint defendants with other
Persons) with respect to any claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense incurred or claimed to have been incurred prior
to the Exchange Date in or in connection with the conduct of the Calvert
Business or, to the extent any claim is made against Calvert or any of its
Subsidiaries (including, without limitation, where Calvert or its
Subsidiaries are joint defendants with other Persons), the conduct of the New
ATAPCO Business, the ATRECO Business, the Gateway Business or the Baltimore
Management Business, and which claim, suit, Action, proceeding, injury, loss,
Liability, damage or expense may arise out of an insured or insurable
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occurrence under one or more of the Calvert Shared Policies, Baltimore
Management shall, at the time such claim is asserted, as the agent and
attorney-in-fact of Calvert, assert and to attempt to collect any related
Insurance Proceeds under such Calvert Shared Policy, and shall remit to
Calvert all Insurance Proceeds collected with respect to such asserted claim;
provided, however, that Calvert shall not be relieved of the primary
responsibility for reporting such Insured claim accurately, completely and in
a timely manner.
(e) If, subsequent to the Exchange Date, any Person shall assert a
claim against Baltimore Management or any of its Subsidiaries (including
without limitation, where Baltimore Management or its Subsidiaries are joint
defendants with other Persons) with respect to any claim, suit, Action,
proceeding, injury, loss, Liability, damage or expense incurred or claimed to
have been conduct of the Baltimore Management Business or, to the extent any
claim is made against Baltimore Management or any of its Subsidiaries
(including, without limitation, where Baltimore Management or its
Subsidiaries are joint defendants with other Persons), the conduct of the New
ATAPCO Business, the ATRECO Business, the Gateway Business or the Calvert
Business, and which claim, suit, Action, proceeding, injury, loss, Liability,
damage or expense may arise out of an insurable occurrence under one or more
of the Baltimore Management Shared Policies, Baltimore Management shall, at
the time it asserts such a claim, assert and attempt to collect any related
Insurance Proceeds under such Baltimore Management Shared Policy, and shall
retain all Insurance Proceeds with respect to such asserted claim; provided,
however, that Baltimore Management shall not be relieved of the primary
responsibility for reporting such Insured Claim accurately, completely and in
a timely manner.
SECTION 10.3. Administration; Other Matters.
(a) Administration. From and after the Exchange Date, Baltimore
Management shall be responsible for (i) Insurance Administration of the
Shared Policies and (ii) Claims Administration under such Shared Policies
with respect to New ATAPCO Liabilities, ATRECO Liabilities, Gateway
Liabilities, Calvert Liabilities and Baltimore Management Liabilities;
provided that the assignment of such responsibilities to Baltimore Management
is in no way intended to limit, inhibit or preclude any right to insurance
coverage for any Insured Claim of a named insured under such Shared Policies
as contemplated by the terms of this Agreement; and provided further that
Baltimore Management's handling of the administrative responsibilities for
the Shared Policies shall not relieve the party submitting any Insured Claim
of the primary responsibility for reporting such Insured Claim accurately,
completely and in a timely manner or of such party's authority to settle any
such Insured Claim within any period permitted or required by the relevant
Shared Policy. Baltimore Management may discharge its administrative
responsibilities under this Section 10.3(a) by contracting for the provision
of services by independent parties. Each of the parties hereto shall
administer and pay any costs relating to defending its respective Insured
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Claims under Shared Policies to the extent such defense costs are not covered
under such Shared Policies and shall be responsible for obtaining or
reviewing the appropriateness of releases upon settlement of its respective
Insured Claims under Shared Policies. The disbursements, out-of-pocket
expenses and direct and indirect costs of employees or agents of Baltimore
Management relating to Claims Administration and Insurance Administration
contemplated by this Section 10.3(a) shall be treated in accordance with the
terms of the Administrative Services Agreement, if still in effect with
respect to insurance and risk management, or, if the Administrative Services
Agreement shact to insurance and risk management, then each of New ATAPCO,
ATRECO, Gateway, Calvert and Baltimore Management, as the case may be, shall
each be responsible for its own Claims Administration and Insurance
Administration.
(b) Exceeding Policy Limits.
(i) Where New ATAPCO Liabilities and/or ATRECO Liabilities and/or
Gateway Liabilities and/or Calvert Liabilities and/or Baltimore
Management Liabilities, as applicable, are specifically covered
under the same Shared Policy for periods prior to the Exchange
Date, or covering claims made after the Exchange Date with respect
to an occurrence prior to the Exchange Date, then from and after
the Exchange Date New ATAPCO, ATRECO, Gateway, Calvert and
Baltimore Management may claim coverage for Insured Claims under
such Shared Policy as and to the extent that such insurance is
available up to the full extent of the applicable limits of
Liability of such Shared Policy (and may receive any Insurance
Proceeds with respect thereto as contemplated by Section 10.2 or
Section 10.3(c)), subject to the terms of this Section 10.3.
(ii) Except as set forth in Section 10.3(c), New ATAPCO, ATRECO,
Gateway, Calvert and Baltimore Management shall not be liable to
one another for claims not reimbursed by insurers for any reason
not within the control of New ATAPCO, ATRECO, Gateway, Calvert and
Baltimore Management, as the case may be, including, without
limitation, coinsurance provisions, deductibles, quota share
deductibles, self-insured retentions, bankruptcy or insolvency of
an insurance carrier, Shared Policy limitations or restrictions,
any coverage disputes, any failure to timely claim by New ATAPCO,
ATRECO, Gateway, Calvert or Baltimore Management or any defect in
such claim or its processing.
(c) Allocation of Insurance Proceeds. From and after the Effective
Time, Insurance Proceeds received under the Shared Policies shall be paid to
Baltimore Management, which shall thereafter administer the Shared Policies
by paying the Insurance Proceeds, as appropriate, to New ATAPCO with respect
to New ATAPCO Liabilities, to ATRECO with respect to ATRECO Liabilities, to
Gateway with respect to the Gateway Liabilities and to Calvert with respect
to Calvert Liabilities. Baltimore Management shall retain the Insurance
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Proceeds with respect to Baltimore Management Liabilities. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from
such Shared Policies will be made by Baltimore Management to the appropriate
party upon receipt from the insurance carrier. In the event that the
aggregate amount recoverable (by virtue of policy limits, insurer insolvency
or similar reason) on any Shared Policies is exceeded by the aggregate of
outstanding Insured Claims by two or more of the relevant parties hereto,
such parties agree to allocate the Insurance Proceeds received thereunder
based upon their respective percentage of the total of their bona fide claims
which were covered under such Shared Policy (their "allocable portion of
Insurance Proceeds"), and any party who has received Inllocable portion of
Insurance Proceeds shall pay to the other party or parties the appropriate
amount so that each party will have received its allocable portion of
Insurance Proceeds pursuant hereto. Each of the parties agrees to use
commercially reasonable efforts to maximize available coverage under those
Shared Policies applicable to it, and to take all commercially reasonable
steps to recover from all other responsible parties in respect of an Insured
Claim to the extent coverage limits under a Shared Policy have been exceeded
or would be exceeded as a result of such Insured Claim.
(d) Allocation of Deductibles. In the event that two or more parties
have Insured Claims under any Shared Policy for which a deductible is payable
(which shall include the application of any retention), the parties agree
that the aggregate amount of the deductible paid shall be borne by the
parties in the same proportion which the Insurance Proceeds received by each
such party bears to the total Insurance Proceeds received under the
applicable Shared Policy (their "Allocable Share of the Deductible"), and any
party who has paid more than such share of the deductible shall be entitled
to receive from any other party or parties an appropriate amount so that each
party has borne its Allocable Share of the Deductible pursuant hereto.
SECTION 10.4. Agreement for Waiver of Conflict and Shared Defense. In
the event that Insured Claims of more than one of the parties hereto exist
relating to the same occurrence, the applicable parties shall jointly defend
and waive any conflict of interest necessary to the conduct of the joint
defense. Nothing in this Article X shall be construed to limit or otherwise
alter in any way the obligations of the parties to this Agreement, including
those created by this Agreement, by operation of law or otherwise.
SECTION 10.5. Cooperation. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
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ARTICLE XI. MISCELLANEOUS
SECTION 11.1. Complete Agreement; Construction. This Agreement,
including the Schedules, and the Ancillary Agreements shall constitute the
entire agreement among the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. In the event of any inconsistency between
this Agreement and any Schedule hereto, the Schedule shall prevail. Other
than Section 4.19, Section 7.5 and Article IX, which shall prevail over any
inconsistent or conflicting provisions in any Ancillary Agreement,
notwithstanding any other provisions in this Agreement to the contrary, in
the event and to the extent that there shall be a conflict between the
provisions of this Agreement and the provisions of any Ancillary Agreement,
such Ancillary Agreement shall control.
SECTION 11.2. Ancillary Agreements. Subject to the last sentence of
Section 11.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION 11.3. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 11.4. Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in
this Agreement shall survive the Exchange Date. The provisions of this
Agreement that assign responsibilities and duties to, and confer rights upon,
Baltimore Management shall survive until Baltimore Management has been
liquidated or the date on which New ATAPCO, ATRECO and Gateway cease to own
in the aggregate among them at least 50% of the equity interests in Baltimore
Management (except to the extent that Baltimore Management has assigned such
responsibilities and duties to another entity prior to its liquidation).
SECTION 11.5. Expenses. Except as otherwise set forth in this
Agreement or any Ancillary Agreement, all costs and expenses incurred by
ATAPCO on or prior to the Exchange Date (whether or not paid on or prior to
the Exchange Date) in connection with the preparation, execution, delivery
and required implementation of this Agreement and any Ancillary Agreement,
the Information Statement and the Reorganization and the consummation of the
transactions contemplated hereby, including, without limitation, filing fees
and related transfer fees (whether incurred prior to or after the Effective
Time) with regard to the transfers contemplated pursuant to this Agreement or
any Ancillary Agreement, shall be charged to and paid by ATAPCO on or prior
to the Exchange Date or by Baltimore Management from the Shared Liability
Account after the Exchange Date; provided, however, that all other internal
costs and expenses incurred by each of the parties on or prior to the
Exchange Date, shall be the responsibility of the party incurring such
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expense. Except as otherwise set forth in this Agreement or any Ancillary
Agreement, all costs and expenses incurred after the Exchange Date, including
those incurred in connection with the required implementation of this
Agreement or any Ancillary Agreement, the consummation of the Reorganization
or the consummation of the transactions contemplated by this Agreement or any
Ancillary Agreement, shall be charged to and paid by the party incurring such
costs and expenses. Except as otherwise set forth in this Agreement or any
Ancillary Agreement, each party shall bear its own costs and expenses
incurred after the Exchange Date. Any amount or expense to be paid or
reimbursed by any party hereto to any other party hereto shall be so paid or
reimbursed within ten business days after the existence and amount of such
obligation is determined and demand therefor is made.
SECTION 11.6. Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified
mail (return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties
at the following addresses (or at such other addresses for a party as shall
be specified by like notice) and will be deemed given on the date on which
such notice is received:
To AI or ATAPCO:
American Trading and Production Corporation
The Blaustein Building
Suite 2400
One North Charles Street
Baltimore, Maryland 21201
Telecopy: (410) 347-7151
Attention: Daniel B. Hirschhorn
with a copy to:
Arnold & Porter
Thurman Arnold Building
555 Twelfth Street, N.W.
Washington, D.C. 20004-1202
Telecopy: (202) 942-5999
Attention: Thomas R. Dwyer
To ATRECO:
American Trading Real Estate Company, Inc.
The Blaustein Building
Suite 1400
One North Charles Street
Baltimore, Maryland 21201
Telecopy: (410) 347-7280
Attention: Louis B. Thalheimer
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with a copy to:
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
Telecopy: (302) 658-3989
Attention: A. Gilchrist Sparks
To Gateway:
Gateway Gathering & Marketing Company
The Blaustein Building
23rd Floor
One North Charles Street
Baltimore, Maryland 21201
Telecopy: (410) 347-7081
Attention: Edward L. Rosenberg
with a copy to:
McGuire, Woods, Battle & Boothe LLP
1050 Connecticut Avenue, N.W.
12th Floor
Washington, D.C. 20036
Telecopy: (202) 828-2980
Attention: Clive R.G. O'Grady
SECTION 11.7. Waivers. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not
waive or diminish that party's right to demand strict performance thereafter
of that or any other provision hereof.
SECTION 11.8. Amendments. Subject to the terms of Section 11.15
hereof, this Agreement may be modified or amended only by an agreement in
writing signed by each of the parties hereto. From and after 4:00 p.m. on
December 30, 1998 through the Effective Time, this Agreement may not be
modified or amended without the written consent of the ATAPCO stockholders,
directly or through their attorneys-in-fact.
SECTION 11.9. Assignment.
(a) This Agreement shall not be assignable, in whole or in part,
directly or indirectly, by any party hereto without the prior written consent
of the other parties hereto, and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.
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(b) New ATAPCO will not distribute to its stockholders any interest in
New ATAPCO or any New ATAPCO Subsidiary, by way of a spin-off distribution,
split-off or other exchange of interests in New ATAPCO or any New ATAPCO
Subsidiary for any interest in New ATAPCO held by New ATAPCO stockholders, or
any similar transaction or transactions, unless the distributed New ATAPCO
Subsidiary undertakes to each of ATRECO and Gateway to be jointly and
severally liable for all New ATAPCO Liabilities hereunder.
(c) ATRECO will not distribute to its stockholders any interest in
ATRECO or any ATRECO Subsidiary, by way of a spin-off distribution, split-off
or other exchange of interests in ATRECO or any ATRECO Subsidiary for any
interest in ATRECO held by ATRECO stockholders, or any similar transaction or
transactions, unless the distributed ATRECO Subsidiary undertakes to each of
New ATAPCO and Gateway to be jointly and severally liable for all ATRECO
Liabilities hereunder.
(d) Gateway will not distribute to its stockholders any interest in
Gateway or any Gateway Subsidiary, by way of a spin-off distribution,
split-off or other exchange of interests in a Gateway or a Gateway Subsidiary
for any interest in Gateway held by Gateway stockholders, or any similar
transaction or transactions, unless the distributed Gateway Subsidiary
undertakes to each of New ATAPCO and ATRECO to be jointly and severally
liable for all Gateway Liabilities hereunder.
(e) For ten years after the Effective Time, or such shorter time period
as the parties agree to in writing, neither New ATAPCO, ATRECO nor Gateway
may (i) enter into any transaction involving a merger,ny such transaction
expressly assumes and agrees to be liable for the obligations of the relevant
party under this Agreement, or (ii) dispose of all or substantially all of
its assets unless the entity purchasing such assets expressly assumes and
agrees to be liable for the obligations of the relevant party under this
Agreement. If ten years after the Effective Time there is still a matter in
dispute between any of the parties regarding a matter hereunder, the ten-year
time period provided for in this Section 11.9(e) will be extended until the
matter in dispute is resolved.
SECTION 11.10. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and permitted assigns.
SECTION 11.11. Termination. Subject to applicable law, this Agreement
and the Reorganization may be terminated by the board of directors of ATAPCO
at any time prior to the Effective Time. In the event of such termination,
no party shall have any Liability of any kind to any other party or any other
Person.
SECTION 11.12. Subsidiaries. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary
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of such party or by any entity that is contemplated to be a Subsidiary of
such party after the Effective Time.
SECTION 11.13. Third Party Beneficiaries. Except as provided in
Article VI relating to Indemnitees and Article IV relating to the
stockholders of the parties hereto, this Agreement is solely for the benefit
of the parties hereto and their respective Subsidiaries and should not be
deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION 11.14. Title and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 11.15. Schedules. The Schedules shall be construed with and as
an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein. In the event of any inconsistency between the
terms of any Schedule and the terms set forth in the main body of the
Agreement, the terms of the Schedule shall govern. The parties have approved
the material items to be reflected in the Schedules. The parties agree that
the Schedules may be amended or modified with the approval of each of the
parties in any manner consistent with the terms of this Agreement or any
Ancillary Agreement at any time prior to the Effective Time.
SECTION 11.16. GOVERNING LAW. THIS AGREEMENT AND ALL DEALINGS OF THE
PARTIES WITH RESPECT TO THE MATTERS ADDRESSED HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND (WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF) APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF MARYLAND.
SECTION 11.17. Consent to Jurisdiction. Without limiting the
provisions of Article IX hereof, each of the parties irrevocably submits to
the exclusive jurisdiction of (a) the Circuit Court, 3rd Judicial Circuit,
Baltimore County, Maryland, and (b) the United States District Court for the
District of Maryland, for the purposes of any suit, Action or other
proceeding arising out of this Agreement, any Ancillary Agreement or any
transaction contemplated hereby or thereby. Each of the parties agrees to
commence any Action, suit or proceeding relating hereto either in the United
States District Court for the District of Maryland or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons,
in the Circuit Court, 3rd Judicial Circuit, Baltimore County, Maryland. Each
of the parties further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any Action, suit or
proceeding in Maryland with respect to any matters to which it has submitted
to jurisdiction in this Section 11.17. Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any Action,
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suit or proceeding arising out of this Agreement, or any Ancillary Agreement,
or the transactions contemplated hereby or thereby in (i) the Circuit Court,
3rd Judicial Circuit, Baltimore County, Maryland, or (ii) the United States
District Court for the District of Maryland, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
SECTION 11.18. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
AMERICAN TRADING AND PRODUCTION CORPORATION
By: \s\ Louis B. Thalheimer
-------------------------------------------
Title: Chairman of the Board and Chief
Executive Officer
AMERICAN TRADING REAL ESTATE COMPANY, INC.
By: \s\ Alan E. Kerry
-------------------------------------------
Title: President and Chief Operating Officer
GATEWAY GATHERING AND MARKETING COMPANY
By: \s\ Alan G. Choate
-------------------------------------------
Title: Vice President and Secretary
ATAPCO, INC.
By: \s\ Hans Fristedt
-------------------------------------------
Title: President
