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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 29, 1994
NATIONAL CONVENIENCE STORES INCORPORATED
(Exact name of registrant as specified in its charter)
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DELAWARE 1-7936 74-1361734
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
100 Waugh Drive, Houston, Texas 77007
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code
(713) 863-2200
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 29, 1994, the Company completed the previously announced transaction
whereby the Company, (i) exchanged its 53 operating convenience stores in
Southern California, together with related inventories and equipment, for 88
operating convenience stores of The Circle K Corporation in the Dallas-Fort
Worth and Houston, Texas areas, together with related inventories and equipment
and, (ii) sold its 27 operating convenience stores in Atlanta, Georgia,
together with related inventories and equipment, for cash consideration of
$9,150,000. The Company now operates only in the State of Texas.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The audited financial statements of the business acquired (88 Houston and
Dallas-Fort Worth, Texas area convenience stores) and the related pro forma
financial information will be available and therefore filed by the registrant
on or about July 1, 1994.
Set forth below are the exhibits filed as part of this report:
10.10 - Asset Exchange Agreement By and Among National Convenience Stores
Incorporated, NCS Realty Company, The Circle K Corporation and Circle
K Properties, Inc. Dated as of April 20, 1994 and as amended on April
29, 1994.
10.11 - Asset Purchase Agreement By and Among National Convenience Stores
Incorporated, NCS Realty Company, Stop N Go Markets of Georgia, Inc.
The Circle K Corporation and Circle K Properties, Inc. Dated as of
April 20, 1994 and as amended on April 29, 1994.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 13, 1994
NATIONAL CONVENIENCE STORES
INCORPORATED
By: /s/ A. J. Gallerano
A. J. Gallerano
Senior Vice President,
General Counsel
and Secretary
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Exhibit 10.10
ASSET EXCHANGE AGREEMENT
By And Among
NATIONAL CONVENIENCE STORES INCORPORATED,
NCS REALTY COMPANY,
THE CIRCLE K CORPORATION
And
CIRCLE K PROPERTIES, INC.
DATED AS OF APRIL 20, 1994
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TABLE OF CONTENTS
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TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
INDEX OF EXHIBITS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2. EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.1. Exchange of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Purchase of Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3. Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4. Opt-Out Stores. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.5. Instruments of Conveyance and Transfer. . . . . . . . . . . . . . . . . . . 8
Section 2.6. Escrow Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 3. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.1. Title Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2. Title Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3. Review of Title Commitments by Transferee. . . . . . . . . . . . . . . . . . 10
Section 3.4. Transferor's Right to Cure. . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.5. Inability to Deliver Any of the Stores. . . . . . . . . . . . . . . . . . . 11
Section 3.6. Surveys. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.1. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.2. Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.3. Actions by the Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.4. Conditions to Obligation to Close. . . . . . . . . . . . . . . . . . . . . . 13
Section 4.5. Prorations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 5. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.2. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.3. Assumption of Liability; Indemnification . . . . . . . . . . . . . . . . . . 16
Section 5.4. Certain Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6. REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.1. Representations, Warranties and Covenants. . . . . . . . . . . . . . . . . . 18
Section 6.2. Operation, Repair and Condition. . . . . . . . . . . . . . . . . . . . . . 20
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Section 6.3. Purchases of Inventories Prior to Closing Date. . . . . . . . . . . 21
Section 6.4. Covenant of Cooperation . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7. INDEPENDENT INVESTIGATION; DISCLAIMER; AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS AND INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.1. Independent Investigation; Scope of Representations and Warranties . 21
Section 7.2. Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.3. Survival of Covenants, Agreements, Representations and
Warranties and Indemnity. . . . . . . . . . . . . . . . . . . . . 22
(a) Indemnification by Transferor . . . . . . . . . . . . . . . . . . . 23
(b) Indemnification by Transferee . . . . . . . . . . . . . . . . . . . 23
(c) Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8. ACCESS TO INFORMATION; DUE DILIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.1. Inspections; Access to Information. . . . . . . . . . . . . . . . . 24
ARTICLE 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.1. Effective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.2. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 10. EMPLOYMENT MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.1. Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.2. No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . 27
ARTICLE 11. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.1. Defaults by Either Party. . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.1. Closing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.2. Brokerage Commissions. . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.3. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.4. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.5. Entire Agreement; Modifications. . . . . . . . . . . . . . . . . . . 28
Section 12.6. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.7. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.8. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.9. Additional Acts. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.10. Applicable law and Jurisdiction. . . . . . . . . . . . . . . . . . . 30
Section 12.11. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.12. Bulk Transfer Matters. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Section 12.14. Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.15. Public Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.16. Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.17. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.18. Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.19. Exchange of Written Materials. . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.20. Met Life Sale Leaseback Stores . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.21. Use of Tradenames and Servicemarks . . . . . . . . . . . . . . . . . . . . 32
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INDEX OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Procedures for Determining Purchase Price of Inventories
Exhibit B-1 Form of NCS Assignment and Assumption of Lease (With Lessor
Consent)
Exhibit B-2 Form of NCS Assignment and Assumption of Lease (No Lessor
Consent)
Exhibit B-3 Form of NCS Assignment and Assumption of Sublease (NCS as
Sublessor)
Exhibit B-4 Form of NCS Assignment and Assumption of Lease
(Metropolitan Life Insurance Company)
Exhibit B-5 Form of NCS Assignment and Assumption of Lease (NCS as
Lessor)
Exhibit C Form of NCS Assignment and Assumption of Contracts
Exhibit D-1 Form of Circle K Assignment and Assumption of Lease
Exhibit D-2 Form of Circle K Assignment and Assumption of Lease (Circle
K as Sublessor)
Exhibit D-3 Form of Circle K Assignment and Assumption of Lease (Circle
K as Lessor)
Exhibit E Form of Circle K Assignment and Assumption of Contracts
Exhibit F-1 Form of NCS Corporation Grant Deed
Exhibit F-2 Form of Circle K Special Warranty Deed
Exhibit G-1 Form of NCS Assignment and Bill of Sale
Exhibit G-2 Form of Circle K Assignment and Bill of Sale
Exhibit H-1 Form of NCS Officer's Certificate
Exhibit H-2 Form of Circle K Officer's Certificate
Exhibit I-1 Form of Underground Storage Tank System Information List
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Exhibit I-2 Form of Current/Required Remediation Sites Schedule
Exhibit I-3(i) Form of NCS Remediation of Petroleum Contamination Transfer
Letter
Exhibit I-3(ii) Form of Circle K Remediation of Petroleum Contamination
Transfer Letter
Exhibit I-4 Form of Environmental Remediation Reimbursement
Applications List
SCHEDULES
Schedule 1.1(d) Contracts
Schedule 1.1(j)(9) Description of Additional Excluded Assets
Schedule 1.1(m) Description of Excluded Improvements
Schedule 1.1(o) Descriptions of Fee Stores
Schedule 1.1(r) Description of Leases
Schedule 1.1(s) Liabilities Assumed by Transferee
Schedule 1.1(ab) Description of Sale Leaseback Agreement(s)
Schedule 1.1(ac) List of Convenience Stores
Schedule 2.4 Store Valuations and Cash Flow
Schedule 6.1(c) Requisite Consents to be Obtained by Transferor
Schedule 6.1(e) Transferor Litigation
Schedule 6.1(l) Employment Related Agreements to be Assumed by Transferee
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EXHIBIT A
PROCEDURES FOR DETERMINING PURCHASE PRICE OF INVENTORIES
The Transferor shall, at the time of the audit, physically gauge the
level of motor fuels contained in each fuel storage tank at each Store to be
conveyed to the Transferee and determine the number of inches of motor fuel
contained therein. The Transferee may have representatives present.
Thereafter, the number of inches shall be converted to gallons of motor fuel
less water by use of the appropriate manufacturer's tank chart. To determine
the purchase price of the Motor Fuel Inventory to be paid by the Transferee to
the Transferor, the result shall be multiplied by the price the Transferor paid
for the motor fuel at its last documented delivery for each Store, plus
applicable freight charges and taxes. Immediately after the conclusion of such
measurements and calculations, the results thereof shall be memorialized in
writing and signed by representatives of the Transferor and the Transferee, and
shall be binding on the Transferor and the Transferee.
The purchase price of the Merchandise Inventory to be paid by the
Transferee to the Transferor for the Stores shall equal the actual retail price
of such Merchandise Inventory established in accordance with the Transferor's
inventory pricing practices multiplied by the average cost of such Merchandise
Inventory as calculated by the retail method of inventory valuation utilized by
Transferor for the operating area where each Store is located, expressed as a
percentage on the operating statement for such Store for the three (3) calendar
months immediately preceding the Closing Date. The Transferor shall, on the
Closing Date or within 48 hours before, conduct an audit of the inventory at
each Store along with a representative from the Transferee who shall have a
right to participate in the taking of the inventory. The Transferee will take
control of the inventory at each location effective as of the initiation of the
physical audit taken at each location. Damaged, spoiled and outdated
merchandise will not be included in the count. Branded items, such as hard
plastic coffee cups/fountain mugs and ice chests will not be included in the
count. Hot cups, cold cups, Icee cups, popcorn bags and nacho bowls will be
limited to a maximum inventory of 200 containers per size. None of the
smallest size of the Transferor's hot cups and none of the smallest size of the
Transferor's cold cups will be counted. The Transferee will only be obligated
to buy filled ice bags. Those products used to fill hot/cold containers (i.e.,
coffee beans/packets, fountain drink bag in the box, etc.) will be assigned a
zero value. Immediately after the calculation of the amount of the Merchandise
Inventory, the results
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thereof shall be memorialized in writing and signed by representatives of the
Transferor and the Transferee and shall be binding on the Transferor and the
Transferee.
Within fifteen (15) Days after the Closing Date, the Parties shall
calculate the total purchase price payable by NCS to Circle K for the Circle K
Inventories and the total purchase price payable by Circle K to NCS for the NCS
Inventories. The net amount payable by NCS to Circle K or by Circle K to NCS,
as the case may be, shall be paid by wire transfer of immediately available
federal funds not later than fifteen (15) Days after the Closing Date.
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ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT ("Agreement"), dated as of April 20,
1994, is by and among NATIONAL CONVENIENCE STORES INCORPORATED, a Delaware
corporation, and NCS REALTY COMPANY, a Texas corporation (hereinafter,
collectively, "NCS") whose principal address is 100 Waugh Drive, Houston, Texas
77007, and THE CIRCLE K CORPORATION, a Texas corporation, and CIRCLE K
PROPERTIES, INC., a Delaware corporation (hereinafter, collectively, "Circle
K"), whose principal address is Phoenix Corporate Center, Suite 1800, 3003
North Central Avenue, Phoenix, Arizona 85012.
INTRODUCTION
NCS Realty Company has agreed to exchange with Circle K eight (8)
operating Fee Stores and adjacent properties (if any) located in the State of
California for certain operating Fee Stores and adjacent properties (if any)
owned by Circle K located in the State of Texas. National Convenience Stores
Incorporated has agreed to exchange with Circle K forty-four (44) operating
Leased Stores and adjacent properties (if any) and one (1) operating Fee Store
and adjacent property (if any) located in the State of California for certain
operating Leased Stores and operating Fee Stores and properties adjacent to
Circle K Store Nos. 2169 and 8505 located in the State of Texas. In addition,
National Convenience Stores Incorporated has agreed to exchange with Circle K
the Assets located in its operating Fee Stores and Leased Stores located in the
State of California for the Assets located in certain of Circle K's operating
Fee Stores and Leased Stores in the State of Texas. Consequently, Circle K and
NCS are acting as both transferor and transferee of convenience stores and
their related assets under the terms of this Agreement. As provided herein,
the Parties have agreed to exchange certain assets used in the operation of
convenience stores and to also purchase each other's merchandise and motor fuel
inventories in such stores and to assume those ongoing obligations as
specifically identified in this Agreement relating to and pertaining to the
operation of the convenience stores.
The respective rights, responsibilities and obligations, as well as
warranties, representations and covenants of NCS and Circle K are reciprocal
under this Agreement depending upon the role of Circle K and NCS as transferor
or transferee with respect to designated assets herein. A reference to such
terms as Party, Other Party, Transferor or Transferee (as these terms are
defined below) is a reference to the role to be played by Circle K or NCS with
respect to certain assets and the governing terms of this Agreement. With
respect to assets that Circle K is transferring to NCS, Circle K may be
referred to as the Transferor and NCS as the Transferee. With respect to
assets that NCS is transferring to Circle K, NCS may be referred to as the
Transferor and Circle K as the Transferee. It is intended that the terms
"Transferee," "Transferor," "Party," "Parties" and "Other Party" be used
interchangeably, depending upon the role of Circle K and NCS with respect to
the assets being exchanged.
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Consistent with the foregoing, the schedules to this Agreement are
comprised of two sub-schedules for each designated schedule, the first of which
relates to a particular aspect of the assets or business of NCS, and the second
of which relates to the same aspect of the assets or business of Circle K. For
example, Schedule 1.1(o)(i) is the schedule relating to NCS's fee interest in
certain real property, and Schedule 1.1(o)(ii) is the schedule relating to
Circle K's fee interest in certain real property.
NCS and Circle K intend that this Agreement shall constitute an
exchange within the meaning of Section 1031 of the Internal Revenue Code. The
provisions of this Agreement shall be interpreted to effectuate this intention.
ARTICLE 1. DEFINITIONS
SECTION 1.1. CERTAIN DEFINITIONS.
As used in this Agreement:
(a) "ASSETS" shall mean a Party's interest in the
Land, Improvements, Equipment, Leases, transferable licenses and
permits and Contracts, all as hereinafter defined, but shall not
include the Excluded Assets, as hereinafter defined.
(b) "CLOSING" shall mean the consummation of the
transactions contemplated by Article 2 of this Agreement.
(c) "CLOSING DATE" shall mean the date designated in
Section 4.1 on which the Closing will be held.
(d) "CONTRACTS" shall mean a Party's interest in
those contracts designated on Schedule 1.1(d) (i) or (ii) which shall
be assigned to and assumed by the Other Party on the Closing Date.
(e) "DAYS" shall mean calendar days unless the phrase
"Business Days" is used, and if the last Day of any period of time
set forth herein falls on a Saturday, Sunday or national legal
holiday, such period shall be automatically extended to include the
next following Business Day. "BUSINESS DAYS" shall mean those
calendar days that are not Saturdays, Sundays or national legal
holidays.
(f) "EFFECTIVE TIME" shall mean as to (i) the
Inventory in each Store, the time on the Closing Date at which the
inventory procedure described in Exhibit A is initiated with respect
to such Store, and (ii) the Employees and the Assets (other than the
Inventory), 10:00 a.m., Houston, Texas time on the Closing Date.
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(g) "EFFECTIVE DATE" shall mean the date of
this Agreement.
(h) "EMPLOYEES" shall mean employees of a Party who
work at a Store to be exchanged pursuant to this Agreement or who
directly service or supervise any such Stores.
(i) "EQUIPMENT" shall mean except for Excluded Assets
a Party's interest in all gasoline storage tanks and related piping,
gasoline station and gasoline dispensing equipment, walk-in boxes,
movable trade fixtures, equipment, furniture, furnishings and
installations of every kind located on the Land or the Leased Land
and conveyed to the Other Party on the Closing Date.
(j) "EXCLUDED ASSETS" shall mean the following:
(1) Cash and accounts receivable, except
for a change fund for each Store to be separately purchased
from the Transferor by the Transferee and as agreed to by
the Parties at the time of the Closing;
(2) Any service mark, trademark, trade
name, signs, uniforms or other items bearing any trademark
owned or licensed by a Party or bearing the Party's name or
logo;
(3) A Party's name plate on credit card
imprinters;
(4) Money order machines;
(5) Access to the mainframe computer and
computer systems owned or operated by a Party;
(6) Logo racks belonging to vendors and
other assets owned by suppliers and other third parties and
not assigned pursuant to a contract designated on Schedule
1.1(d);
(7) Nontransferable licenses, permits,
contracts and other agreements;
(8) Manuals and operational and training
materials; and
(9) Additional assets described or
identified on Schedule 1.1(j)(9).
(k) "FEE STORES" shall mean the Stores with respect
to which a Party has fee simple ownership of the Land.
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(l) "HAZARDOUS MATERIALS" shall mean (i) any "solid
waste," "hazardous waste" or "regulated substance" as defined by the
Resource Conservation and Recovery Act ("RCRA") of 1976 (42 U.S.C.
Section 6901 et seq.) as amended from time to time, and regulations
promulgated thereunder; (ii) "regulated asbestos-containing
materials" as defined in the National Emission Standard for Asbestos
("NESA") (40 C.F.R. Section 61.140 et seq.) as amended from time to
time; (iii) any substance, the presence of which is prohibited by any
governmental authority; (iv) any other substance which by any
governmental regulatory authority requires special handling or
notification of any federal, state or local governmental entity in
its collection, sale, transportation, storage, treatment or disposal;
and (v) any underground storage tanks, whether active, inactive,
empty, filled or partially filled with any such materials, provided,
however, that the term "Hazardous Materials" shall not include
Petroleum Products.
(m) "IMPROVEMENTS" shall mean a Party's interest in
all buildings constructed upon the Land or the Leased Land together
with all permanently attached machinery and fixtures, heating,
plumbing, electrical, lighting, ventilating and air-conditioning
equipment located on the Land or the Leased Land on the Closing Date,
except as described on Schedule 1.1(m).
(n) "INVENTORY" shall mean the Merchandise Inventory,
and the Motor Fuel Inventory of each Party as each is hereinafter
defined.
(o) "LAND" shall mean a Party's fee interest in the
real property described on Schedule 1.1(o), together with the Party's
interest in the rights, easements and appurtenances pertaining
thereto, including without limitation any right-of-way or easement
over any adjoining property and any right, title and interest of the
Party in and to adjacent streets, alleys or rights-of-way.
(p) "LEASED LAND" shall mean the real property
demised to a Party pursuant to a Lease.
(q) "LEASED STORES" shall mean the Stores with
respect to which a Party has a leasehold estate in the Leased Land.
(r) "LEASES" shall mean a Party's interest in the
leases and/or subleases identified and described on Schedule 1.1(r)
which shall be assigned to and assumed by the Other Party on the
Closing Date or the premises demised thereunder which shall be
subleased by the Transferor to the Transferee upon essentially the
same terms and conditions as are contained in the Lease of the
premises to the Transferor.
(s) "LIABILITIES" shall mean the liabilities listed
on Schedule 1.1(s) to be assumed by the Transferee on the Closing
Date and which shall include without limitation
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the Transferor's obligations under the Contracts and the Leases
assumed by the Transferee.
(t) "MERCHANDISE INVENTORY" shall mean the goods and
merchandise (other than motor fuel) offered for sale or lease by the
Transferor or held in storage for future sale or lease or used as
operating supplies at a Party's Stores on the Closing Date, but shall
not include damaged or dated items or items bearing the Transferor's
trademarks.
(u) "MOTOR FUEL INVENTORY" shall mean the motor fuel
offered for sale or held in storage for future sale at a Party's
Stores on the Closing Date.
(v) "OTHER PARTY" shall mean either NCS or Circle K
as the context requires.
(w) "PARTY" or "PARTIES" shall mean, respectively,
either NCS or Circle K or both NCS and Circle K, as the context
requires.
(x) "PERMITTED EXCEPTIONS" shall mean (i) the
Standard Exceptions (as defined in Section 3.2 hereof), (ii) title
exceptions which do not materially and adversely affect or impair the
use of the Land and Improvements as currently used, and (iii) those
exceptions or conditions shown in the Title Commitments to which the
Party taking title does not object in accordance with Section 3.3
hereof.
(y) "PETROLEUM CONTAMINATION" shall mean
contamination derived solely from the on-site storage, sale or
distribution of Petroleum Products.
(z) "PETROLEUM PRODUCTS" shall mean those substances
included within the meaning of the petroleum exclusion to CERCLA, 42
U.S.C. Section 9601(14), as interpreted by the courts and the
Environmental Protection Agency (EPA), that is: petroleum, including
crude oil or any fraction thereof which is not otherwise specifically
listed or designated as a hazardous substance under Subparagraphs (A)
through (F) of 42 U.S.C. Section 9601(14), natural gas, natural gas
liquids, liquefied natural gas, and synthetic gas usable for fuel (or
mixtures of natural gas and such synthetic gas). The word fraction
refers to certain distillates of crude oil, including gasoline,
kerosene, diesel oil, jet fuels, and fuel oil, pursuant to Standard
Definitions of Petroleum Statistics, American Petroleum Institute,
Fourth Edition 1988.
(aa) "REPORTABLE RELEASES" shall mean a release of
Petroleum Products or Hazardous Materials that must be reported under
the more stringent of (i) 40 C.F.R. 280 Subpart E, (ii) RCRA, 42
U.S.C. paragraph 6901 et seq., (iii) NESA, 40 C.F.R. paragraph
61.140 et seq, or (iv) state or local administrative regulations or
statutory requirements.
(ab) "SALE LEASEBACK AGREEMENT(S)" shall mean those
agreements described on Schedule 1.1(ab).
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(ac) "STORE" or "STORES" shall mean the convenience
stores listed on Schedule 1.1(ac).
(ad) "SUBLEASE" or "SUBLEASES" shall mean,
respectively, a sublease or subleases entered into between the
Parties pursuant to Sections 1.1(q), 2.5(b) and 3.5.
(ae) "SURVEY" or "SURVEYS" shall mean, respectively,
each survey or collectively all surveys furnished in accordance with
the terms and provisions hereof.
(af) "TITLE COMPANY" shall mean Lawyers Title
Insurance Corporation, as agent for the title insurance underwriters
named in the Title Commitments.
(ag) "TITLE POLICY" shall mean the owner's title
insurance policy or policies issued by the Title Company in
accordance with the terms and provisions hereof.
(ah) "TRANSFEREE" shall mean the party who is to
receive the transfer of ownership of certain Assets from the
Transferor.
(ai) "TRANSFEROR" shall mean the Party who is to
transfer certain Assets to the Other Party.
ARTICLE 2. EXCHANGE
SECTION 2.1. EXCHANGE OF ASSETS.
Subject to the terms and conditions stated herein, each Party agrees
to transfer, and the Other Party agrees to accept, the Assets as further
designated herein.
(a) As of the Effective Time, NCS shall transfer to
Circle K the Land, the Leases, the Improvements, the Equipment, the
Contracts and the transferable licenses and permits that Circle K
agrees in writing to assume in exchange for the Assets transferred by
Circle K to NCS pursuant to the provisions of Section 2.1(b) hereof.
(b) As of the Effective Time, Circle K shall (i)
transfer to NCS the Land, the Leases (excluding certain Sale
Leaseback Agreements which shall instead be subject to Subleases),
the Improvements, the Equipment, the Contracts and the transferable
licenses and permits that NCS agrees in writing to assume in exchange
for the Assets transferred by NCS to Circle K pursuant to the
provisions of Section 2.1(a) hereof.
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SECTION 2.2. PURCHASE OF INVENTORY.
(a) As of the Effective Time, NCS shall sell to
Circle K and Circle K shall purchase from NCS the Inventory of the
Stores transferred by NCS to Circle K. The purchase price of such
Inventory shall be determined and paid in accordance with the
procedures set forth in Exhibit A.
(b) As of the Effective Time, Circle K shall sell to
NCS and NCS shall purchase from Circle K the Inventory of the Stores
transferred by Circle K to NCS. The purchase price of such Inventory
shall be determined and paid in accordance with the procedures set
forth in Exhibit A.
(c) In the event a Store is excluded from this
transaction pursuant to Section 2.4, the Transferor may elect to
close said Store not less than two (2) days before the Closing Date
and distribute the Store's Inventory to Stores that will be conveyed
to the Transferee on the Closing Date pursuant to this Agreement.
The Inventory shall be distributed reasonably evenly to not less than
eight (8) Stores to be conveyed to the Transferee as a part of this
Agreement. All expenses of Closing a Store and moving and restocking
the Inventory at the other Stores shall be borne by the Transferor
electing to close the Store. As of the Effective Time, the Inventory
will be counted as part of the Inventory of the Stores that are being
exchanged.
SECTION 2.3. ASSUMPTION OF LIABILITIES.
(a) As of the Effective Time, Circle K shall assume
the Liabilities of NCS and shall indemnify, defend and hold NCS
harmless with respect to any losses, liabilities, damages, costs and
expenses (including attorneys' fees, court costs and costs of
investigation) which arise from or are in any way related to Circle
K's failure to assume or discharge timely any of such Liabilities.
The assumption of Liabilities by Circle K shall be evidenced by the
execution and delivery by Circle K to NCS of (i) Assignments and
Assumptions of Lease (or Sublease) substantially in the forms of
Exhibits B-1 through B-5 attached hereto, as appropriate, and (ii)
Assignments and Assumptions of Contracts substantially in the form of
Exhibit C. Except as specifically provided for in this Section
2.3(a) or elsewhere in this Agreement, no liabilities or obligations
of NCS shall be assumed by Circle K in this exchange transaction.
(b) As of the Effective Time, NCS shall assume the
Liabilities of Circle K and shall indemnify, defend and hold Circle K
harmless with respect to any losses, liabilities, damages, costs and
expenses (including attorneys' fees, court costs and costs of
investigation) which arise from or are in any way related to NCS's
failure to assume or discharge timely any of such Liabilities. The
assumption of Liabilities by NCS shall be evidenced by the execution
and delivery by NCS to Circle K of (i) Assignments and Assumptions of
Lease substantially in the form of Exhibits D-1 through D-3 attached
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hereto, as appropriate, and (ii) Assignments and Assumptions of
Contracts substantially in the form of Exhibit E. Except as
specifically provided for in this Section 2.3(b) or elsewhere in this
Agreement, no liabilities or obligations of Circle K shall be
assumed by NCS in this exchange transaction.
SECTION 2.4. OPT-OUT STORES.
(a) In the event either Party is unable to transfer a
Store to the Other Party because of events beyond the control of
Transferor after the exercise of reasonable effort then, in such
event after written notice to the Transferee, such Store shall be
excluded from the transaction and the Party owning the excluded Store
shall pay the Other Party the value of the excluded Store as shown on
Schedule 2.4.
(b) If, prior to the Closing Date, condemnation
proceedings are begun with respect to any Asset that would render a
Store's continued operation as a convenience store impracticable, in
accordance with generally accepted operating procedures in the
convenience store industry, such Store shall be excluded from the
transaction and the Party owning the excluded Store shall pay the
Other Party the value of the excluded Store as shown on Schedule 2.4.
(c) In the event that the cash flow (as shown on
Schedule 2.4) of the Circle K Stores excluded pursuant to this
Section 2.4 is greater than ten percent (10%) of the total cash flow
of all Circle K Stores as shown on Schedule 2.4 or in the event that
the cash flow (as shown on Schedule 2.4) of the NCS Stores excluded
pursuant to this Section 2.4 is greater than ten percent (10%) of the
total cash flow of all NCS Stores as shown on Schedule 2.4, either
Party shall have a right to terminate this Agreement as set forth
below. Such right to terminate shall terminate on the sixth (6th)
Business Day following receipt by Transferee of notification of the
exclusion of the Store which causes the threshold aggregate amount
stated above to be exceeded; provided, however, that such right to
terminate shall be reinstated for an additional period of five (5)
Business Days following receipt of any later notice of the exclusion
of any additional Store beyond such threshold aggregate amount.
Receipt of either type of notice described in the immediately
preceding sentence shall automatically postpone the Closing Date to
the first Business Day following the expiration of the termination
period applicable to such notice.
SECTION 2.5. INSTRUMENTS OF CONVEYANCE AND TRANSFER.
(a) On the Closing Date, each Party shall deliver to
the Other Party special or limited warranty deeds, bills of sale,
Assignments and Assumptions of Lease and/or Sublease, and Assignments
and Assumptions of Contracts, to transfer the Assets to be
transferred to the Other Party. The special or limited warranty
deeds shall be subject to the Permitted Exceptions.
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(b) Certain of the Assets to be transferred under this Agreement
consist of leasehold interests in Stores subject to Sale Leaseback
Agreement(s). In the event a Store is subject to a Sale Leaseback Agreement,
the conveyance of the Transferor's interest will be subject to the terms of the
relevant Sale Leaseback Agreement as amended by an attornment agreement. In
such event, the transfer may be accomplished by (i) an Assignment and
Assumption of Lease, or (ii) a Sublease with terms and conditions as prescribed
by the applicable Sale Leaseback Agreement and further described on Schedule
1.1(ab), in the form and with such content as is agreed to by the Transferor
and the Transferee.
SECTION 2.6. ESCROW AGENTS.
(a) Except as provided in Subsection (b) below, the "Escrow
Agent" to hold monies and documents shall be:
Lawyers Title Insurance Corporation
National Accounts Office
600 North Pearl, Suite 700, LB 185
Dallas, TX 75201
(b) For alcoholic beverage licenses for Stores in California, the
Escrow Agent shall be:
Bank of San Francisco
Escrow Division
P.O. Box 2887
550 Montgomery Street
Third Floor
San Francisco, California 94111
Escrow No. 150961
ARTICLE 3. TITLE
SECTION 3.1. TITLE COMMITMENTS.
As soon after the Effective Date as is reasonably possible, each
Party shall, at its sole cost and expense, order from the Title Company such
Title Commitments as it desires covering the Land and the buildings at Fee
Stores that are to be transferred to said Party hereunder. The Title
Commitments shall describe the state of the title to the Land and buildings at
said Fee Stores, together with all exceptions and conditions, including without
limitation, all easements,
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descriptions, rights-of-way, covenants, reservations and all other liens or
encumbrances affecting the Land and buildings at the Fee Stores which would
appear in an owner's Title Policy, if issued. The Title Commitments shall
contain the express commitment of the Title Company to issue a Title Policy to
the Transferee of each Fee Property, in the amount specified by each
Transferee, insuring such title to the Land and buildings comprising each Fee
Store as is specified in the Title Commitments. The Transferor shall
simultaneously cause to be furnished to the Transferee, at the Transferor's
sole cost and expense, copies of all instruments reasonably requested by the
Transferee which are referred to in the Title Commitments as conditions or
exceptions to title to the Land and buildings comprising the Fee Stores,
including liens.
SECTION 3.2. TITLE POLICIES.
At the Closing, each Party, at its sole cost and expense, may
purchase Title Policies covering the Land and buildings at each Fee Store to be
acquired by said Party insuring indefeasible fee simple title free and clear of
all liens and encumbrances other than the Permitted Exceptions, which are (i)
those to which the Transferee does not object pursuant to Section 3.3, (ii)
exceptions which do not materially and adversely affect or impair the use of
the Land and Improvements as currently used, and (iii) the standard exceptions
contained in the standard ALTA Form Title Policy (ALTEX for the State of Texas
or such other comparable form required in a state where the Land is located)
(the "Standard Exceptions").
SECTION 3.3. REVIEW OF TITLE COMMITMENTS BY TRANSFEREE.
The Transferee shall have ten (10) days after receipt of each Title
Commitment to review and to deliver to Transferor (such that the objections are
received by Transferor within said time period) in writing any objections the
Transferee may have to anything (other than Permitted Exceptions) contained or
set forth in a Title Commitment. Transferee agrees that it shall not object to
normal utility, ingress, egress, access or similar easements or other matters
affecting the Land and buildings comprising the Fee Stores which do not
materially interfere with the current use of the Land. Any such items to which
Transferee does not so object within such period shall be deemed to be
Permitted Exceptions.
SECTION 3.4. TRANSFEROR'S RIGHT TO CURE.
If exceptions (other than Permitted Exceptions) to the title to a
particular Fee Store have been identified in a Title Commitment and if the
Transferee delivers objections to such exceptions to the Transferor in
accordance with Section 3.3, then the Transferor shall, prior to the Closing
Date, use its reasonable efforts to satisfy such objections and shall be
obligated to cure, at the Closing, any matter that can be cured solely by the
payment of money ("Monetary Exceptions") in an amount not to exceed $25,000 per
Fee Store. Transferor shall be obligated to release all Deed of Trust liens at
its sole expense, which shall not be considered Monetary Exceptions.
Transferor shall have the option, but not the obligation, to cure any Monetary
Exception involving the payment of money in an amount in excess of $25,000 per
Fee Store
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("Optional Monetary Exception"). If Transferor gives written notice to
Transferee within ten (10) Days after receipt from Transferee of such
objections that Transferor is unable by the use of reasonable efforts to cure
any exception that is not a Monetary Exception or is unwilling to cure any
Optional Monetary Exception as to any Fee Store, then such Fee Store shall be
excluded from the transaction in accordance with Section 2.4 unless Transferee,
by written notice to Transferor within ten (10) Days after receipt of notice of
Transferor's inability or unwillingness to cure such exception, elects to waive
such exception and not to treat such Fee Store in accordance with Section 2.4.
Notwithstanding anything to the contrary elsewhere in this Agreement, the
exclusion of a particular Fee Store in accordance with Section 2.4 shall be
Transferee's sole remedy in the event that Transferor is unable or unwilling to
cure Transferee's objections to exceptions to the title to the real property at
such Fee Store.
SECTION 3.5. INABILITY TO DELIVER ANY OF THE STORES.
Notwithstanding any terms herein to the contrary, if after the use of
reasonable efforts (which reasonable efforts need not include the expenditure
of money) the Transferor is unable to secure the consent or attornment
agreement of any third party (including the landlord of a Sale Leaseback
Agreement or an individual lease) required for the assignment or Sublease or
conveyance of any Asset to the Transferee, the Parties will endeavor in good
faith to structure a transaction (by Sublease, license, or other reasonably
satisfactory arrangement) that gives the Parties the economic equivalents of
their respective bargains without requiring the consent of such third party.
In the event a reasonably satisfactory arrangement cannot be made with respect
to a Store or in the event of a condemnation as described in Section 2.4(b) or
in any other event in which the Transferor is unable to deliver any particular
Store on the Closing Date, such Store shall not be transferred and shall be
treated as provided in Section 2.4.
In the event of a partial condemnation of the Assets that would not
render a Store's continued operation as a convenience store impracticable in
accordance with generally accepted operating procedures in the convenience
store industry, the Transferor shall assign to the Transferee at Closing any
claim arising out of the partial condemnation and the Transferee shall take
title to the affected Asset. Said assignment of claim shall be the
Transferee's sole remedy if the Transferor is unable to deliver any portion of
the Assets due to a partial condemnation.
SECTION 3.6. SURVEYS.
As soon after the Effective Date as is reasonably possible, the
Transferor shall furnish to the Transferee all Surveys which Transferor has in
its possession covering the Fee Stores. The Transferee may order Surveys for
Fee Stores for which the Transferor has not been able to provide a Survey. All
Surveys will be ordered at the Transferee's sole cost and expense and shall be
conducted in accordance with ALTA or equivalent requirements. If any Survey
reveals any discrepancies, conflicts or shortages in area or boundary lines, or
any encroachments, or any overlapping of Improvements, or other matters not in
accordance with the Title Commitment to which the Transferee would be entitled
to object under Section 3.3, then the Transferor, upon
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written request from the Transferee received no later than ten (10) Days after
receipt by the Transferee of the applicable Survey, shall be obligated to cure,
at the Closing, any discrepancy, conflict or shortage in area or boundary
lines, or any encroachment or any overlapping of Improvements ("Survey Defect")
that may be cured by the payment of an amount not to exceed $25,000 per Fee
Store. Transferor shall have the option, but not the obligation, to cure any
Survey Defect involving the payment of money in excess of $25,000 per Fee
Store. If Transferor is unable or unwilling to effect a cure prior to the
Closing Date, the affected Fee Store shall be excluded from the transaction in
accordance with Section 2.4 unless Transferee, by written notice to Transferor
within ten (10) Days after receipt of notice of Transferor's inability or
unwillingness to cure such defect, elects not to treat such Fee Store in
accordance with Section 2.4 and Transferee shall be deemed to have waived its
objection previously made to such defect. Notwithstanding anything to the
contrary elsewhere in this Agreement, the exclusion of a particular Fee Store
in accordance with Section 2.4 shall be Transferee's sole remedy in the event
Transferor is unable by the use of reasonable efforts to effect a cure of any
such matters revealed by a Survey.
ARTICLE 4. CLOSING
SECTION 4.1. CLOSING.
The Closing shall be held at 10:00 A.M. at the principal place of
business of NCS in Houston, Texas on April 29, 1994 or as soon thereafter as
is reasonably practicable, unless both Parties agree in writing to another
time, date and place. Time is of the essence as to the Closing Date. The day
on which the Closing is held is herein referred to as the "Closing Date."
SECTION 4.2. RISK OF LOSS.
All risk of loss with respect to the Assets (except for the
Inventory) shall be borne by the Transferor until 10:00 a.m. Houston, Texas
time on the Closing Date. The risk of loss with respect to the Inventory in a
particular Store shall be borne by the Transferor until the initiation of the
physical inventory with respect to such Store in accordance with the procedures
described on Exhibit A. Thereafter, risk of loss shall be assumed by the
Transferee, and simultaneously therewith the Transferee shall assume operating
control of the Stores it is acquiring hereunder except those withdrawn in
accordance with the terms of this Agreement. The Transferor may cancel all
insurance coverage on the Assets it conveys hereunder effective at 12:01 a.m.
local time on the Day following the Closing Date.
SECTION 4.3. ACTIONS BY THE PARTIES.
At the Closing, each Party shall do the following subject to the
terms of this Agreement:
(a) In its capacity as a Transferee, execute,
acknowledge (where appropriate) and deliver to the Transferor the
following in form and substance acceptable to the
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Transferor: Counterparts of the Assignments and Assumptions of
Lease, the Assignments and Assumptions of Contracts, Subleases and
Closing statements and such other documents as the Parties agree are
appropriate.
(b) In its capacity as a Transferor, execute,
acknowledge (where appropriate) and deliver to the Other Party the
following:
(1) Special or limited warranty deeds
substantially in the form of Exhibit F-1 or F-2 attached
hereto, as appropriate, conveying to the Transferee
indefeasible fee simple title to the Land and buildings
comprising the Fee Stores and the property adjacent to
Circle K Store Nos. 2169 and 8505;
(2) Bills of sale substantially in the form
of Exhibit G-1 or G-2 attached hereto, conveying the
Equipment and Inventory to the Transferee;
(3) Counterparts of the Assignments and
Assumptions of Lease, Assignments and Assumptions of
Contracts, Subleases and Closing statements;
(4) Assignment of transferable permits and
licenses;
(5) Attornment agreements; and
(6) Such other documents as the Parties
agree are appropriate under the circumstances.
(c) In its capacity as a Transferee, cause the Title
Company to deliver the Title Policies to the Fee Stores being
purchased.
(d) Each Party shall deliver to the Other Party
complete copies of such Party's real estate and construction files
pertaining to the Stores transferred pursuant to this Agreement.
SECTION 4.4. CONDITIONS TO OBLIGATION TO CLOSE.
The obligations of a Party pursuant to this Agreement are subject to
the fulfillment and satisfaction as of the Closing Date of each of the
following conditions. These conditions may be waived by a Transferee, provided
that if specific written notice of the failure of any one or more of such
conditions is given to the Transferee by the Transferor prior to the Closing
Date, the Transferee may nevertheless proceed with the Closing without
satisfaction in whole or in part of such condition or conditions and without
written waiver, and the Transferee shall be deemed to have waived any rights or
remedies it might otherwise have had against the Transferor by reason of the
failure of any condition specified in such notice.
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(a) Each Party's representations and warranties
pursuant to this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on the Closing Date.
(b) Each Party shall have performed and complied with
all covenants, agreements and conditions required by this Agreement
to be performed or complied with on or before the Closing.
(c) Each Party shall have obtained such consents as
are listed on Schedule 6.1(c).
(d) Each Party shall have received from the Other
Party the following:
(1) Resolutions of the Board of Directors
of the Other Party authorizing the execution, delivery and
performance of this Agreement and the documents of
conveyance provided for herein.
(2) A certificate with respect to
incumbency and signatures of the relevant officers of the
Other Party.
(3) A certificate executed by a duly
authorized officer of the Other Party dated and effective
immediately prior to the Closing, in substantially the form
of Exhibit H-1 or H-2 attached hereto, as appropriate.
(4) A certificate executed by a duly
appointed officer of the Other Party confirming that the
conditions specified in Sections 4.4(a), (b) and (c) have
been satisfied.
(5) Certificates of good standing for the
two corporations that comprise the Other Party from the
states of their incorporation, the state(s) of their
principal place(s) of business and the state(s) in which
their Stores are located.
(e) All necessary regulatory approvals shall have
been obtained and all waiting periods shall have expired, including
without limitation those mandated by the Hart-Scott-Rodino Antitrust
Improvements Act.
(f) This Agreement shall not have been terminated.
(g) There shall not be any actual or threatened
action or proceeding by or before any court or other governmental
body or agency that seeks to restrain, rescind, prohibit or
invalidate the transactions contemplated by this Agreement, except
for eminent domain, condemnation, or similar actions or proceedings,
if any.
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(h) The actions required by the Parties as set forth
in Section 4.3 shall have been completed.
(i) Since the Effective Date, there shall have been
no material adverse change in the Assets (taken as a whole) to be
exchanged by a Party that has not been waived by the Other Party.
SECTION 4.5. PRORATIONS.
Taxes assessed against or with respect to the Assets, rent, charges
arising under the Contracts, and other items of income or expense shall be
prorated as of the Closing Date. The Transferor will be responsible to pay all
rents due under the Leases for May 1994 (subject to the Transferee's obligation
to reimburse the Transferor for such costs pursuant to this Section). Each
Party will cooperate with the Other Party to obtain utility services for the
Transferee for the Stores as of the Closing Date. Transferee shall assume and
pay all utility bills accruing for the period after the Closing Date. All
accounts payable for Inventory delivered after the time that the inventory
audit is conducted pursuant to Exhibit A shall be paid by the Transferee. At
Closing, the Transferee shall reimburse the Transferor for all security
deposits paid pursuant to the Leases and Contracts. Percentage rent under the
Leases shall be prorated between the Parties as of the Closing Date upon
receipt of the percentage rent amounts and based on the assumption that each
day of the Lease year is responsible for 1/365 or 1/366 (as appropriate) of the
total percentage rent due and owing for the Lease year. The Parties
acknowledge that such proration will not occur until such time as the
percentage rent is due to the respective lessors.
ARTICLE 5. ENVIRONMENTAL MATTERS
SECTION 5.1. BACKGROUND.
In order to (i) minimize the likelihood of future disputes between
the Parties regarding their potential responsibilities for any environmental
remediation that may be required as a result of any Petroleum Contamination at
any of the Stores, and (ii) help promote certainty and thereby expedite the
performance of any such environmental remediation, the Parties desire to
allocate the responsibility for any such environmental remediation between them
as set forth in this Article 5. However, nothing in this Article 5 is
intended, or shall be interpreted or construed, to require either Party to
assume responsibility for, or to indemnify or defend the Other Party (or any
other Person) against, either (i) any Third Party Liability (as defined herein)
or (ii) any responsibility or liability for remediation of any nature other
than Environmental Remediation (as defined herein).
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SECTION 5.2. DEFINED TERMS.
In addition to the terms defined elsewhere in this Agreement, the
terms set forth below shall have the following meanings:
(a) "ENVIRONMENTAL REMEDIATION" shall mean (i) such
actions as may be required by applicable law and applicable rules and
regulations relating to the environment that now or in the future
require the remediation of any of the Store Sites as the result of
Petroleum Contamination, as such law, rules and regulations may be in
effect from time to time, and (ii) such further actions, if any, as
may be required at any of the Store Sites by any final and
nonappealable order of any court or governmental authority requiring
remediation at any of the Store Sites. The term "Environmental
Remediation" shall not include any actions of any nature that may be
required at any of the Store Sites as a result of anything other than
Petroleum Contamination.
(b) "THIRD PARTY LIABILITY" shall mean any liability,
responsibility or obligation of any nature whatsoever other than
responsibility for Environmental Remediation. Without limiting the
foregoing in any way, the term "Third Party Liability" shall include
any and all liability to any Person for monetary damages, whether
arising in an action sounding in tort or contract, as civil or
criminal penalties, or otherwise.
(c) "STORE SITE" shall mean any tract of land in
which the Transferee acquires a fee estate or a leasehold estate from
the Transferor pursuant to this Agreement, as well as any property
that suffers or has suffered Petroleum Contamination that originates
or originated from the tract acquired pursuant to this Agreement.
The term "Store Site" shall not include any property except to the
extent that such property suffers or has suffered Petroleum
Contamination that originates or originated from the property
acquired by the Transferee pursuant to this Agreement.
(d) "PERSON" shall mean any individual or entity of
any nature whatsoever, and shall include governmental authorities and
quasi-governmental authorities and entities.
SECTION 5.3. ASSUMPTION OF LIABILITY; INDEMNIFICATION.
(a) Assumption of Liability. Subject to Section
5.3(b), each Transferee hereby assumes all responsibility of the
Transferor to effect and pay for any and all Environmental
Remediation required to be performed after the Closing Date (whether
in progress on the Closing Date or required in the future) at any and
all of the Store Sites acquired by the Transferee pursuant to this
Agreement ("Assumed Liabilities").
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(b) Limitation. The Assumed Liabilities shall not
include (i) any Third Party Liability, (ii) any liability to pay for
any Environmental Remediation performed prior to the Closing Date, or
(iii) any responsibility or liability relating to any Store Site as
to which Transferor's representation in Section 6.1(m) hereof is
inaccurate in any material respect.
(c) Indemnification. Each Transferee hereby agrees
to indemnify, defend and hold harmless the Transferor from and
against the Assumed Liabilities and any attorneys' fees related
thereto. In addition, each Transferee hereby agrees to indemnify,
defend and hold harmless the Transferor from and against any and all
Damages (as defined elsewhere herein) resulting directly from
Transferee's failure to effect and pay for any Environmental
Remediation on a timely basis. Notwithstanding the foregoing,
Transferee shall not be responsible for any Damages that arise from
Transferor's breach of its warranty under Section 6.1(m) hereof.
SECTION 5.4. CERTAIN RELATED MATTERS.
(a) Transferor will promptly provide to Transferee the
following items:
(1) Not later than twenty (20) Days after the Closing
Date, a list by Store of underground storage tank system
information including composition descriptions,
installation dates, all upgrades required by 40 CFR 280, or
state or local regulations, upgrading dates and date of
each compliance inspection or test (i.e., tank and lines
tightness test, leak detector test, cathodic protection
test and/or certification and monitoring results), if any,
substantially in the form of Exhibit I-1 attached hereto;
(2) On or before April 27, 1994, a Schedule substantially
in the form of Exhibit I-2 attached hereto identifying all
Stores and adjacent properties at which remediation of
Petroleum Contamination is occurring or required;
(3) Not later than twenty (20) Days after the Closing
Date, executed copies of such transfer documents
(substantially in the form of Exhibit I-3(i) and I-3(ii)
attached hereto, as appropriate) or such other documents as
may be required by state or local authorities to transfer
the obligation to continue the remediation of Petroleum
Contamination from the Transferor to the Transferee; and
(4) On or before April 27, 1994, a list substantially in
the form of Exhibit I-4 attached hereto of all applications
submitted to the regulatory authorities that have
jurisdiction over each Store for which Environmental
Remediation was undertaken regarding corrective action
reimbursement requests. The Transferor will grant its fund
rights to the Transferee for expenditures applied to the
fund deductible.
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(b) Not later than ten (10) Days after the Closing Date,
Transferor will provide to Transferee completed underground storage
tank registration forms (for each applicable state) for Transferee's
signature and proper filing with the appropriate state or local
authorities.
(c) Not later than ten (10) Days after the Closing Date,
each Party will provide to the Other Party a complete copy of such
Party's environmental files and underground storage tank system files
pertaining to the Stores. After a Party's review of such files,
should either Party desire additional environmental or underground
storage tank information, each Party shall have the right to copy the
Other Party's files, wherever located, at the copying Party's sole
cost and expense. The right of a Party to copy the Other Party's
environmental files and underground storage tank systems files shall
expire four (4) years after the Closing. All files shall be retained
in complete form during this period.
(d) Transferor will provide Transferee complete inventory
data pertaining to "Release Detection" for one (1) year prior to the
Closing Date. Such data shall be provided upon request should
Transferee be required to produce such records to a regulatory
authority.
(e) Transferor will provide Transferee any invoices and
proof of payment for corrective action expenditures that apply to any
environmental remediation reimbursement fund deductible within sixty
(60) days after the Closing Date.
ARTICLE 6. REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 6.1. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Party hereby represents, warrants and covenants to the other as
follows:
(a) That the execution and delivery of this Agreement
and the documents to be executed and delivered in connection
herewith, and the consummation of the transactions contemplated
hereby and thereby, shall constitute legal, valid and binding
obligations of the Transferor enforceable in accordance with the
terms hereof and thereof.
(b) That neither the execution and delivery of this
Agreement or the documents executed in connection herewith will
violate or conflict with any provision of its Articles of
Incorporation or Bylaws, or will violate or result in the breach or
termination of any material agreement to which it is a party.
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(c) That, except as set forth on Schedule 6.1(c), no
authorization, consent, approval, license, exemption, filing,
qualification, action by or registration with any person,
organization, court, or governmental entity, is or will be necessary
in connection with the execution and/or performance of this Agreement
and/or the documents executed in connection herewith by the Party.
(d) That the Lease terms identified and described on
Schedule 1.1(r) are true, correct, accurate and complete in all
material respects.
(e) That, except as set forth on Schedule 6.1(e),
there is no pending litigation and the Party is not aware of any
threatened litigation against it that would materially affect this
Agreement or the transaction contemplated hereunder.
(f) That it has paid or will pay at or prior to
Closing all taxes that would place a lien on the Stores or impair the
ability of the Transferor to transfer the Assets as contemplated
herein.
(g) That it shall use its best efforts (which best
efforts need not include the expenditure of money) to obtain all
consents of third parties necessary for the consummation of the
transactions described herein.
(h) That it has, at its expense, executed and filed
or joined in the filing of any applications or documents necessary to
obtain the authorization, approval or consent of any governmental
body that may be required, or that the Other Party has reasonably
requested, in connection with the consummation of the transactions
contemplated hereby, including without limitation any notification
filings required by the Hart-Scott-Rodino Antitrust Improvements Act.
(i) That it will use reasonable good faith efforts to
satisfy or cause to be satisfied all of the conditions precedent set
forth herein.
(j) That, after the Transferee's determination of any
retail sales or excise tax liabilities of the Transferor for all
periods prior to the Closing Date, the Transferee shall timely
prepare the appropriate tax returns and reports and submit them to
the Transferor for execution and payment.
(k) That each of the NCS companies and the Circle K
companies is a corporation duly incorporated and validly existing
under the laws of the state of its incorporation and is duly
qualified as a foreign corporation in each jurisdiction in which the
location of the Stores makes such qualification necessary.
(l) That, except for those employment related
agreements set forth on Schedule 6.1(l) that the Other Party agrees
to assume, it is not a party to any
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employment contracts, collective bargaining agreements, labor
contracts, salary commitments or employee benefit commitments that
will bind the Other Party after the Closing.
(m) That the environmental records made available or
given to the Other Party pursuant to Article 5 are true and correct
and complete in all material respects to the Transferor's actual
knowledge as to the dates of tank installation, the construction of
tanks, the dates and extent of any modifications and Reportable
Releases.
(n) That it shall remove all of its Excluded Assets
from the Stores as soon as practicable after the Closing with the
exception of trade fixtures and other Assets which belong to the
vendors, which may or may not be removed by the vendors.
(o) That the Transferor has good and indefeasible
title to the Improvements and Equipment to be conveyed hereunder.
None of the Equipment (other than Excluded Assets, if any) shall be
removed from any of the Stores by either NCS or Circle K from the
date hereof to the Closing Date, except with prior written consent of
the Other Party.
(p) That the Leases to be assigned by the Transferor
are in full force and effect, that the lessor and lessee and/or
Sublessor and Sublessee are not in default thereunder, and at the
Closing any consent necessary to the assignment shall have been
obtained.
(q) That Subleases of Stores subject to Sale
Leaseback Agreement(s) have been validly executed and that, to the
extent necessary, the written consent of the Sale Leaseback landlord
has been obtained.
(r) That, as of the Closing Date, it has notified the
Other Party of any material adverse changes or events that have
occurred since the Effective Date and may affect the Assets to be
conveyed by said Party or their operation.
(s) That, until the Closing, it will not increase the
retail prices of its Inventory.
SECTION 6.2. OPERATION, REPAIR AND CONDITION.
(a) From June 30, 1993 until the Closing Date, each
Party shall (i) maintain, repair and operate the Stores it is
exchanging pursuant to this Agreement in the ordinary course of
business, and (ii) reconstruct, repair or rebuild any Stores that are
destroyed or damaged by a casualty in accordance with Transferor's
normal maintenance standards. On the Closing Date, each Party shall
deliver the Stores it is exchanging to the Other Party in good
condition and repair.
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(b) In the event a Store is destroyed by a casualty
and cannot be either reconstructed, repaired or rebuilt by the
Closing Date, it shall be treated as an excluded Store pursuant to
Section 2.4 unless Transferor makes arrangements reasonably
satisfactory to the Transferee for the restoration of such Store to
its condition prior to the casualty, in which event, such Store shall
be conveyed in accordance with the terms of this Agreement.
SECTION 6.3. PURCHASES OF INVENTORIES PRIOR TO CLOSING DATE.
Each Party shall continue to purchase inventories for the Stores in
accordance with its existing practices from the date hereof until the Closing
Date.
SECTION 6.4. COVENANT OF COOPERATION.
The Parties agree that they shall reasonably cooperate with each
other in the satisfaction of their obligations under this Agreement. In
addition, they agree to join in the execution and delivery of such additional
documents or instruments as may be reasonably necessary for the consummation of
the transactions contemplated hereby. Neither Party, however, shall be
required to incur any expenses except as expressly set forth in this Agreement.
ARTICLE 7. INDEPENDENT INVESTIGATION; DISCLAIMER;
AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS AND INDEMNITY
SECTION 7.1. INDEPENDENT INVESTIGATION; SCOPE OF
REPRESENTATIONS AND WARRANTIES.
Each Party acknowledges that (i) it has been afforded the opportunity
to inspect the Assets it is purchasing hereunder as well as the Other Party's
files pertaining thereto, (ii) it has relied and will rely solely on its own
independent investigation of the Assets and upon the express representations,
warranties and covenants contained in this Agreement, and (iii) the review of
the files was allowed solely as an accommodation and should not be deemed to
expand the representations or warranties of the Other Party. EACH PARTY HEREBY
SPECIFICALLY ASSUMES ANY AND ALL RISKS AND OBLIGATIONS OF BRINGING SUCH ASSETS
AS IT PURCHASES PURSUANT TO THIS AGREEMENT INTO COMPLIANCE WITH ANY AND ALL
APPLICABLE LAWS AND REGULATIONS INCLUDING WITHOUT LIMITATION LAWS AND
REGULATIONS PERTAINING TO PETROLEUM CONTAMINATION. In connection with the
transactions contemplated hereby and except as otherwise expressly provided in
this Agreement, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES
WHATSOEVER WHETHER EXPRESS OR IMPLIED, OF (A) MERCHANTABILITY OR (B) FITNESS
FOR A PARTICULAR PURPOSE OR (C) DESIGN, OR (D) COMPLIANCE WITH SPECIFICATIONS,
OR (E) OPERATION OR CONDITION, OR (F) CAPACITY, OR (G) SUITABILITY, OR (H)
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PERFORMANCE, OR (I) QUALITY, OR (J) OTHERWISE. THE PARTIES ACKNOWLEDGE THAT,
EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT, THE ASSETS ARE BEING
ACQUIRED ON AN "AS IS, WHERE IS" BASIS, WITH ALL FAULTS. Without limiting the
generality of the foregoing, except as and to the extent set forth in this
Agreement, neither party (i) makes any representations or warranties
whatsoever, express, implied or statutory, in connection with the transactions
contemplated by this Agreement, (ii) shall be liable to the Other Party for any
liability, claim, loss, damage (direct or indirect or incidental or
consequential), expense or cost of any kind or nature caused, directly or
indirectly, by any Asset or any inadequacy thereof for any purpose or any
deficiency or defect (latent or patent) therein, or the use or maintenance
thereof, or any repairs, servicing or adjustments thereto, or any delay in
providing or failure to provide any thereof, or any interruption or loss of
service or use thereof, or any loss of business, or any damage whatsoever or
however caused. Except for the representations and warranties set forth
herein, as of the Closing Date, each Party on behalf of itself, its successors
and assigns, hereby waives each and every claim for recovery against the Other
Party for any and all loss or damage to the Assets or any personal property or
other Property arising from or relating to, in whole or in part, the
maintenance, repair, condition or design of the Assets.
SECTION 7.2. DISCLAIMER.
Except as and to the extent set forth in this Agreement, the Exhibits
and Schedules attached hereto, and the certificates to be delivered by each
Party or its officers at the Closing, each Party hereby disclaims all liability
and responsibility for any statement or information made or communicated
(orally or in writing) to the Other Party, including, without limitation, any
information included in a Party's files and reviewed by the Other Party.
Without affecting a Party's right to the representations and warranties set
forth in this Agreement, each Party hereby acknowledges and affirms that it has
made its own independent investigation, analysis and evaluation of the Assets
(including, but not limited to, its own estimate and appraisal of the physical
condition, value and profitability of the Stores).
SECTION 7.3. SURVIVAL OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES AND INDEMNITY.
The representations, warranties, covenants and agreements set forth
in this Agreement shall survive the Closing Date, but only for the one (1) year
period immediately after the Closing Date. Furthermore, as a condition
precedent to the rights of a Party to sue (i) on any breach of any
representation, warranty, covenant or agreement made by the Other Party
hereunder, or (ii) to enforce the indemnification provisions of subparagraphs
7.3 (a) and (b) below in respect to any such breach of representation,
warranty, covenant or agreement, the Party seeking to assert any such breach or
enforce such indemnification must give notice to the Other Party of such breach
or the intent to enforce such indemnification prior to 5:00 P.M. Phoenix time
on the date which is one (1) year after the Closing Date. Further, at 5:00
P.M. Phoenix time, on the date which is one (1) year after the Closing Date,
each Party, without
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further action, shall be deemed to release the Other Party from any and all
damage, loss, cost, expense, obligation, claim or liability, including costs of
investigation, court costs and reasonable attorneys' fees, ("Damages") known or
unknown, absolute, contingent or otherwise, arising from or relating to the
breach, known or unknown, absolute, contingent or otherwise, of any
representation, warranty, covenant or agreement hereunder in connection with
the transactions contemplated hereby, unless notice of such breach or the
intent to enforce the indemnification provisions below was given as described
above. The rights of the Parties to sue to enforce the representations,
warranties, covenants and agreements set forth in the Assignments and
Assumptions of Lease and the Assignments and Assumptions of Contracts, in each
case, shall not require the giving of such notice, shall not be deemed to be
released, and shall continue in full force and effect until barred by the
applicable statute of limitation.
(a) INDEMNIFICATION BY TRANSFEROR. Subject to
subparagraph (c) below, the Transferor, from and after the Closing
Date, shall defend, indemnify and hold the Transferee harmless from
and against any and all Damages suffered or incurred by the
Transferee on account of or arising from or related to the
Transferor's operation of the Stores and ownership of the Assets
prior to the Closing Date (including without limitation product
liability, labor, employment and personal injury claims).
Notwithstanding anything to the contrary set forth herein, this
indemnification shall not include (i) any costs and expenses
specifically to be borne by the Transferee pursuant to this
Agreement, (ii) any losses, liabilities, or obligations arising out
of or constituting a breach of any representation, warranty,
covenant, or agreement of the Transferee under this Agreement, (iii)
any claim for lost profits relating to the Stores and/or the Assets,
or (iv) any Damages or claims relating to Environmental Remediation
(except to the extent such Damages or claims arise from a breach of
Transferor's warranty under Section 6.1(m) hereof). The Transferee
shall promptly notify the Transferor of the existence of any claim,
demand or other matter to which the Transferor's indemnification
obligation would apply and shall give the Transferor a reasonable
opportunity to defend the same at the Transferor's own expense and
with counsel of Transferor's own selection reasonably satisfactory to
the Transferee; provided that the Transferee also has the right to
fully participate in the defense at its own expense. If the
Transferor, within a reasonable time after this notice, but no later
than fifteen (15) Days, fails to defend, the Transferee shall have
the right, but not the obligation, to undertake the defense thereof,
and to compromise or settle (exercising reasonable business judgment)
the claim or other matter on behalf, for the account, and at the risk
of the Transferor.
(b) INDEMNIFICATION BY TRANSFEREE. In addition to
the indemnification obligation assumed pursuant to Section 5.3, the
Transferee, from and after the Closing Date, shall defend, indemnify
and hold the Transferor harmless from and against any and all Damages
suffered or incurred by the Transferor on account of or arising from
or related to the Transferee's operation of the Stores and ownership
of the Assets on and after the Closing Date (including without
limitation product liability, labor, employment and personal injury
claims). The Transferor shall promptly notify the Transferee of the
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existence of any claim, demand or other matter to which the
Transferee's indemnification obligation would apply and shall give
the Transferee a reasonable opportunity to defend the same at the
Transferee's own expense and with counsel of its own selection
reasonably satisfactory to the Transferor; provided that the
Transferor shall at all times also have the right to participate
fully in the defense at its own expense. If the Transferee shall,
within a reasonable time after such notice, but no later than fifteen
(15) Days, fail to defend the claim, the Transferor shall have the
right, but not the obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business judgment) the
claim or other matter on behalf, for the account, and at the risk of
the Transferee.
(c) LIMITATION OF LIABILITY. Notwithstanding any
other provision of this Agreement, (i) the liability of each Party
for the breach of any representation or warranty or the failure to
perform or satisfy any covenant or agreement hereunder and the
indemnification obligations of the Parties shall be limited to actual
Damages and shall not include incidental, consequential or indirect
Damages, and (ii) neither Party shall have any liability for any
Damages arising from or relating to one or more breaches of the
representations, warranties, covenants or agreements set forth in
this Agreement or for any indemnification responsibilities hereunder,
unless and until and only to the extent that the aggregate Damages to
the Other Party and indemnification responsibilities shall exceed the
sum of Fifty Thousand Dollars ($50,000).
ARTICLE 8. ACCESS TO INFORMATION; DUE DILIGENCE
SECTION 8.1. INSPECTIONS; ACCESS TO INFORMATION.
With respect to the Assets it is selling, each Party agrees to allow
the Other Party to inspect the Assets after reasonable notice, provided such
inspection does not interfere with the operation of the Stores. Each Party
agrees to furnish the Other Party with such information related to the Assets
as is reasonably requested and the Party receiving such information agrees to
keep such information highly confidential and not to reveal it to any person
other than its officers, directors, employees, agents and legal and accounting
advisors. Information provided is for the sole purpose of evaluating the
transaction described herein. The Parties agree to inform their respective
officers, directors, employees, agents and advisors that the information must
be treated confidentially. Although both Parties agree in good faith to
provide accurate and complete information, neither Party represents or warrants
the accuracy and completeness of such information that it gives to the Other
Party except as is provided in this Agreement. Each Party acknowledges that it
must rely on independent evaluation of the Assets and not on information
provided to it by the Other Party. The Parties agree that, if any governmental
authority requests or requires disclosure of any information that a Party has
received from the Other Party, or if the Party receives a subpoena duces tecum
or other order mandating disclosure
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of the information, said Party will immediately notify the Other Party to
permit said Party an opportunity to seek a protective order with respect to
disclosure of the information.
ARTICLE 9. TERMINATION
SECTION 9.1. EFFECTIVE.
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and abandoned at any time prior to the Closing as
follows:
(a) MUTUAL CONSENT. By mutual written consent of
both Parties;
(b) BY NCS. By NCS if any one or more of the
conditions precedent to its obligations herein shall not have been
satisfied or if the Closing has not occurred by June 1, 1994 (except
as such date may be postponed under Section 2.4(c) above) for any
reason other than the breach or default under this Agreement by NCS;
or
(c) BY CIRCLE K. By Circle K if any one or more of
the conditions precedent to its obligations herein shall not have
been satisfied or if the Closing has not occurred by June 1, 1994
(except as such date may be postponed under Section 2.4(c) above) for
any reason other than the breach or default under this Agreement by
Circle K; or
(d) BY EITHER PARTY. By either Party pursuant to the
provisions of Section 2.4(c) hereof.
SECTION 9.2. NOTICE.
Written notice of any termination under Section 9.1(b), (c) or (d)
stating the grounds therefor, shall be given promptly by the Party entitled to
give such notice.
ARTICLE 10. EMPLOYMENT MATTERS
SECTION 10.1. EMPLOYEES.
(a) Each Party agrees to promptly notify the Other
Party of those Employees it wishes to retain. The Other Party shall
then have the first right to interview the Employees who will not be
retained for the purpose of making potential offers of employment.
(b) Each Transferee will endeavor to interview
substantially all of the remaining Employees who work in the Stores.
After the interviews, Transferee will
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consider employing such persons who meet Transferee's current
employment standards. Transferor shall supply a list of all
Employees who work in the Stores, which list shall include Employee's
name, Social Security number, hourly rate and/or bi- weekly salary,
bonus (if any), tenure and job title. Transferee shall notify
Transferor not less than five (5) Days prior to the Closing Date of
the names of the Employees offered employment with Transferee and
identify those accepting such offers.
(c) Except for Employees who remain in the employment
of Transferor, each Transferor shall cause the termination of the
employment of all of its Employees to occur as of the Effective Time.
Simultaneously therewith, each Transferee shall offer employment to
such of Transferor's Employees as are selected for hire by
Transferee. The Employees will retain their last hire date as
provided for in the Transferee's policies and procedures.
Transferee's offers of employment pursuant to this Section 10.1(c)
shall not constitute any commitment, contract or understanding
(express or implied) of any obligation on the part of Transferee to a
post-Closing Date employment relationship of any fixed term or
duration or any terms or conditions other than as Transferee may
establish. Any employment accepted with Transferee shall be "at
will" subject to such conditions and terms as may be established by
Transferee and may be terminated by Transferee at any time for any
reason. Transferor shall not be obligated under the terms hereof to
distribute sums pursuant to its separation pay policy to Employees
offered employment with Transferee. Any Employee who (i) elects to
remain in the employ of Transferor, (ii) rejects such offer of
employment by Transferee, or (iii) is not offered employment by
Transferee, shall not, after the date of such election, rejection or
non-offer, be considered an "Employee" for purposes of the remaining
subparagraphs of this Section 10.1.
(d) Transferor shall provide Transferee all
information on each Employee to be hired by Transferee that pertains
to any training that Employee received during the course of
employment with Transferor.
(e) Any Employee of Transferor who is on any leave of
absence, which includes, but is not limited to, the Family and
Medical Leave Act, Workers' Compensation, or Medical or Military
leave on the Closing Date (an "Affected Employee"), shall remain in
the employ of Transferor until released from the appropriate medical
practitioner or governmental agency. The Affected Employee may be
terminated by Transferor and any causes of action or claims brought
pursuant to that termination will be the sole responsibility of the
Transferor.
(f) Employees of NCS who wish to enroll in Circle K's
401(k) plan will be allowed to immediately enroll in Circle K's
401(k) plan on the next entry date of Circle K if they have been
employed with NCS for one (1) year or more and are over twenty-one
(21) years of age.
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(g) Employees of Circle K who wish to enroll in NCS's
401(k) plan will be allowed to immediately enroll in NCS's 401(k)
plan on the next entry date of NCS if they have been employed with
Circle K for one (1) year or more.
(h) As of the Effective Time, Employees shall
participate in Transferee's existing employee benefit plans and
programs according to Transferee's policies as applicable to
Employees performing the same jobs with Transferee as such Employees
performed with Transferor.
(i) All accrued and prorated but unused vacation of
Employees shall be paid by Transferor on the Closing Date.
(j) Transferor shall provide Transferee all
information in its possession necessary to allow Transferee to
continue participation in the Targeted Jobs Tax Credit Program.
SECTION 10.2. NO THIRD PARTY BENEFICIARIES.
The Parties do not intend to create any third-party beneficiary
rights by this Article. The Employees shall not be entitled to enforce the
provisions hereof.
ARTICLE 11. DEFAULTS
SECTION 11.1. DEFAULTS BY EITHER PARTY.
In the event a Party shall be deemed to be in default hereunder prior
to the Closing, the Other Party shall be entitled to exercise any and all
rights and remedies permitted by law or in equity, including without limitation
the remedy of specific performance. The Parties agree that the Damages which
the Other Party may suffer in the event of a default hereunder are impossible
or very difficult to estimate with any degree of certainty. A Party shall be
deemed to be in default hereunder if the Party shall fail to use reasonable
efforts to comply with or perform any covenant, agreement or obligation on its
part required within the time limits and in the manner set forth in this
Agreement, or if any representation or warranty made by a Party herein shall be
untrue or incorrect in any material respect, as of the effective date of such
representation or warranty.
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ARTICLE 12. MISCELLANEOUS
SECTION 12.1. CLOSING COSTS.
Each Party shall pay (i) the legal, accounting and professional fees
and expenses incurred by said Party in connection with the transactions
described herein, (ii) the charge for the Preliminary Title Reports and Title
Policies, and Surveys ordered by the Party, (iii) the filing fees of such party
associated with the Hart-Scott-Rodino Antitrust Improvements Act and (iv)
one-half of (a) the Title Company's escrow fee, and (b) all other Closing
costs, including without limitation any revenue stamps and transfer fees.
SECTION 12.2. BROKERAGE COMMISSIONS.
Each Party acknowledges that it has not utilized the services of a
broker or agent in this transaction and agrees to indemnify and hold the Other
Party harmless with respect to any claims by an agent or broker based on
dealings with such Party.
SECTION 12.3. ASSIGNMENT.
This Agreement may not be assigned by a Party without the prior
written consent of the Other Party.
SECTION 12.4. BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit
of the Parties hereto and their respective successors and permitted assigns.
SECTION 12.5. ENTIRE AGREEMENT; MODIFICATIONS.
This Agreement embodies and constitutes the entire understanding
between the parties with respect to the transactions contemplated herein, and
all prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any term, provision or condition hereof may be waived, modified,
amended, discharged or terminated except by an instrument in writing signed by
the parties hereto, and then only to the extent set forth in such instrument.
SECTION 12.6. HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation hereof.
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SECTION 12.7. INTERPRETATION.
Whenever the context hereof so requires (i) the singular shall
include the plural, and the male gender shall include the female gender and the
neuter, and vice versa and (ii) a reference to Circle K or NCS shall be a
reference to that company and to any subsidiary thereof referenced herein
having a role with respect to an obligation hereunder.
SECTION 12.8. NOTICES.
Any notice required or permitted to be delivered hereunder shall be
in writing and shall be deemed received when delivered in person or by telecopy
or one (1) Business Day after delivery to an overnight courier or delivery
service, addressed to a Party at the following addresses or such subsequent
addresses as are supplied in accordance herewith:
(a) If to NCS, to:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, TX 77007
FAX: 713-880-0579
Attention: A. J. Gallerano, Esq.
Senior Vice President,
General Counsel and Secretary
(b) If to Circle K, to:
The Circle K Corporation
Suite 1800
3003 North Central Avenue
Phoenix, AZ 85012
FAX: 602-530-5147
Attention: Gehl P. Babinec
Senior Vice President
and General Counsel
SECTION 12.9. ADDITIONAL ACTS.
In addition to the acts and deeds recited herein and contemplated to
be performed, executed or delivered, the Parties hereby agree to perform,
execute or deliver, or cause to be performed, executed or delivered, at the
Closing any and all such further acts, deeds and
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assurances as may be reasonably required to consummate the transactions
contemplated hereunder.
SECTION 12.10. APPLICABLE LAW AND JURISDICTION.
With respect to any matter pertaining to a specific Store, this
Agreement shall be governed by and construed for each Store in accordance with
the internal laws of the state where such Store is situated; BUT IN ALL MATTERS
NOT PERTAINING TO A SPECIFIC STORE, THIS AGREEMENT SHALL BE CONSTRUED UNDER AND
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS AND APPLICABLE
FEDERAL LAW.
SECTION 12.11. DISPUTE RESOLUTION.
Should a dispute arise regarding this Agreement, such dispute shall
be settled by arbitration in the City of Dallas, Texas, United States of
America before a panel of three (3) arbitrators, in accordance with the Rules
of the American Arbitration Association (AAA). The foregoing shall apply
without limitation to any dispute regarding the scope of this Agreement and/or
the jurisdiction of the arbitrators.
Any demand for arbitration shall contain a statement setting forth
the nature of the dispute, the amount involved, if any, and the remedies
sought.
The arbitrators shall have authority to assess damages sustained by
reason of any breach or wrongful termination of this Agreement. The parties
shall share equally all expenses of the arbitration and the AAA and each Party
shall bear its own expenses incident to the arbitration.
The arbitrators shall not extend, modify or suspend any of the terms
of this Agreement or the reasonable standards of business performance set forth
by a Party in good faith. A demand for arbitration shall not operate to stay
or postpone the effective date of any termination, and the Parties will be
relegated to their remedy and damages for wrongful termination as determined by
the arbitrators. The decision of the arbitrators within the scope of this
submission shall be final and binding on all Parties and any right of judicial
action on any matter subject to arbitration hereunder is hereby waived. The
resolution of the arbitrators shall be final and binding upon both Parties and
may be enforced by any judicial court having jurisdiction.
Nothing in this Section 12.11 shall preclude either Party from
petitioning a court for and obtaining specific performance and/or injunctive
relief. In addition, any Party shall have the right to sue in court to enforce
the arbitration award. This Section 12.11 shall survive any termination of
this Agreement.
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SECTION 12.12. BULK TRANSFER MATTERS.
The Parties agree that no bulk transfer laws are applicable to the
transactions contemplated herein.
SECTION 12.13. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which shall together
constitute one and the same agreement.
SECTION 12.14. COSTS.
If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged breach or default
relating to this Agreement, the prevailing Party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in such action or
proceeding, in addition to any other relief to which it may be entitled.
SECTION 12.15. PUBLIC STATEMENTS.
Except for such announcements and statements as are required by law
or applicable rule or regulations, the Parties hereto agree to obtain the
consent of each other prior to issuing any public announcement or statement
with respect to the transactions contemplated herein.
SECTION 12.16. TIME.
Time is of the essence as to this Agreement.
SECTION 12.17. SEVERABILITY.
If any term or provision hereof is void, illegal or unenforceable,
said voidness, illegality or unenforceability shall not affect or impair the
remaining terms and provisions hereof which shall be enforced as if said void,
illegal or unenforceable term or provision was not set forth herein.
SECTION 12.18. EXHIBITS AND SCHEDULES.
The Exhibits and Schedules attached hereto are incorporated herein by
reference for all purposes.
SECTION 12.19. EXCHANGE OF WRITTEN MATERIALS.
No later than ten (10) Days after the Closing Date, Transferor shall
provide to Transferee all notices, documents and other materials in its
possession that relate in any manner whatsoever
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to the Assets to be transferred to Transferee. Transferor shall also deliver
to Transferee promptly upon receipt any such materials thereafter received by
Transferor. Transferor may keep copies of any such materials if it desires to
do so.
SECTION 12.20. MET LIFE SALE LEASEBACK STORES.
NCS and Metropolitan Life Insurance Company have entered into an
Indemnification Agreement (the "Met Life Agreement") dated April 12, 1989
pertaining to NCS Store Nos. 040, 281, 1304, 1687, 2083 and 2322. NCS shall
timely perform its obligations under the terms of the Met Life Agreement and
reserves the right to enter upon such Leased Land to perform such obligations.
NCS shall not unreasonably interfere with Circle K's operation of its business
at such Leased Stores.
SECTION 12.21. USE OF TRADENAMES AND SERVICEMARKS.
(a) NCS, as the owner of all right, title and
interest in and to the tradenames and servicemarks "Kelli's Deli,"
"Copilot," "Super Copilot," "Fresh Express," "Neighborstore," "Stop N
Go," and "National Convenience Stores" hereby agrees that for a
period of ninety (90) Days after the Closing Date Circle K shall have
a limited, nontransferable, royalty-free right to use such tradenames
and servicemarks solely in connection with Circle K's operation of
the Stores, including the right to sell any items of Inventory
bearing any such tradenames and servicemarks in the ordinary course
of business, and for no other purpose whatsoever. In the event
Circle K fails to operate the Stores in a manner consistent with good
industry standards and practices, NCS, in its sole discretion, after
notice to Circle K of the unacceptable practice and the failure of
Circle K to cure the same within three (3) Business Days after
receipt of such notice, may revoke the limited right to use the
foregoing tradenames and servicemarks granted herein. Immediately
after the Closing Date, Circle K shall diligently proceed with the
dismantling of signage and the removal of other materials bearing the
tradenames and servicemarks, at Circle K's expense, and shall
complete such removal and dismantling within ninety (90) Days after
the Closing Date, and NCS may, at NCS's expense, remove such signage
(excluding the sign holders) and other materials from the Stores
within fifteen (15) Days thereafter. If NCS fails to remove such
signage and other materials at the expiration of fifteen (15) Days,
the signage and other materials shall be deemed to be abandoned and
Circle K may deal with or dispose of them as Circle K deems
appropriate at Circle K's sole expense.
(b) Circle K, as the owner of all right, title and
interest in and to the tradenames and servicemarks Circle K Unleaded,
mid-grade and premium gasoline, "Thirstbuster", "Daybreaker," and the
Circle K logo (the letter "k" in a circle), hereby agrees that for a
period of ninety (90) Days after the Closing Date NCS shall have a
limited, nontransferable, royalty-free right to use such tradenames
and servicemarks solely in connection with NCS's operation of the
Stores including the right to sell any
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items of Inventory bearing any such tradenames and servicemarks in
the ordinary course of business, and for no other purpose whatsoever.
In the event NCS fails to operate the Convenience Stores in a manner
consistent with good industry standards and practices, Circle K, in
its sole discretion, after notice to NCS of the unacceptable practice
and the failure of NCS to cure the same within three (3) Business
Days after receipt of such notice, may revoke the limited right to
use the foregoing tradenames and servicemarks granted herein.
Immediately after the Closing Date, NCS shall diligently proceed with
the dismantling of signage and the removal by other materials bearing
the tradenames and servicemarks, at NCS's expense, and shall complete
such removal and dismantling within ninety (90) Days after the
Closing Date, and Circle K may, at Circle K's expense, remove such
signage (excluding the sign holders) and other materials from the
Stores within fifteen (15) Days thereafter. If Circle K fails to
remove such signage and other materials at the expiration of fifteen
(15) Days, the signage and other materials shall be deemed to be
abandoned and NCS may deal with or dispose of them as NCS deems
appropriate at NCS's sole expense.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed as of the date first stated above by their duly authorized
representatives, to be effective as of the Effective Date.
NATIONAL CONVENIENCE STORES THE CIRCLE K CORPORATION
INCORPORATED
By:___________________________ By:____________________________
Title:________________________ Title:_________________________
NCS REALTY COMPANY CIRCLE K PROPERTIES, INC.
By:__________________________ By:_____________________________
Title:_______________________ Title:__________________________
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AMENDMENT NO. 1 TO
ASSET EXCHANGE AGREEMENT
This Amendment No. 1 dated as of April 29, 1994 to the Asset Exchange
Agreement dated as of April 20, 1994 ("Agreement") ("Amendment") is by and
among National Convenience Stores Incorporated, a Delaware corporation, and NCS
Realty Company, a Texas corporation, (hereinafter, collectively, "NCS") whose
principal address is 100 Waugh Drive, Houston, Texas 77007, and The Circle K
Corporation, a Texas corporation, and Circle K Properties, Inc., a Delaware
corporation, (hereinafter, collectively, "Circle K") whose principal address is
Phoenix Corporate Center, Suite 1800, 3003 North Central Avenue, Phoenix,
Arizona 85012.
INTRODUCTION
On April 20, 1994, NCS and Circle K entered into the Agreement, which
provides for the exchange of certain assets between Circle K and NCS. NCS and
Circle K now desire to amend certain provisions of the Agreement. Accordingly,
in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, NCS and Circle K have
agreed as follows:
1. AMENDMENT OF AGREEMENT
1.1 Amendment to Article 4.5. Article 4 of the Agreement is hereby
amended by the addition of the following Subsection 4.5:
"Any assessed taxes not prorated as of the Closing Date shall
be prorated by the Transferor and Transferee upon receipt of an
invoice from a Lessor."
1.2 Amendment to Article 7. Article 7 of the Agreement is hereby
amended by the addition of the following Subsection 7.3(a):
"Subject to Subsection 7.3(c) below, Circle K, from and after
the Closing Date, shall defend, indemnify and hold NCS harmless from
and against any and all Damages suffered or incurred by NCS on account
of or arising from or related to Circle K's failure to obtain prior to
the Closing Date, the Landlord's consent to the assignment to NCS of
Circle K's interest under that certain Lease dated June 15, 1976 by
and between Eugene Werlin, Jr., Trustee, as Landlord, and UTOTEM
Division of Fairmont Foods, a Delaware corporation, as Tenant, as
amended, affecting Store No. 2225; provided, however, that Circle K's
liability with respect to this clause shall be limited to the value as
shown on Schedule 2.4 for such store and shall terminate with respect
to such store at the earliest to occur of (a) the consent of the
lessor to the assignment of Circle K's interest under such lease to
NCS or (b) the mutual termination, or cancellation of the lease by NCS
and the Lessor, or the expiration of the lease for such store, or (c)
other reasonably satisfactory curative action effected by Circle K."
1.3 Circle K Store No. 8501. The Agreement is hereby amended by the
addition of Section 12.22, which shall provide:
<PAGE> 43
"12.22 Post-Closing conveyance of Easement. Circle K agrees,
within 120 days of the Closing Date, to grant to NCS an easement for
access to Circle K Store No. 8501, by delivery of an Easement Deed,
across that certain property adjacent to Circle K Store No. 8501 and
owned by Circle K and outlined in red on Exhibit A hereto."
1.4 NCS Store No. 2092. The Agreement is hereby amended by the
addition of Section 12.23, which shall provide:
"12.23 Limited Access to NCS Store No. 2092. Circle K agrees
to permit NCS and its officers, employees, contractors, consultants
and agents to have reasonable access to NCS Store No. 2092 for the
sole purpose of completing repairs to the gasoline product lines at
such store at the sole expense of NCS. All repairs will be completed
by May 31, 1994 in a good and workmanlike manner and in accordance
with applicable laws. NCS's activities at such store shall not
unreasonably interfere with Circle K's business activities on or about
such store. Circle K shall not be responsible to any person employed
by or working on behalf of NCS for purposes of conducting such repair
activity at NCS Store No. 2092, except for injuries to persons or
damage to property caused by the negligent acts or omissions of Circle
K. NCS shall take all steps reasonably necessary to prevent injury to
persons or damage to property during such repairs, and NCS shall be
liable to, indemnify and defend Circle K from and against any cost,
expense, claim or liability incurred by Circle K and relating to the
acts and omissions of NCS' employees, contractors, consultants and
agents conducting such repairs."
1.5 Circle K Store No. 8664. The Agreement is hereby amended by the
addition of Section 12.25, which shall provide:
"12.25 Approval of Seller of Plans for Store Construction.
Circle K shall use its best efforts to obtain Seller's written
approval (if Seller is still the owner) of the store construction
plans per the terms and conditions of the Deed conveying Store to
Circle K."
1.6 NCS Store No. 1149. The Agreement is hereby amended by the
addition of Section 12.26, which shall provide:
"12.26 NCS Furnishing to Circle K a Copy of NCS' Bankruptcy
Court Order Approving Lease Assumption. NCS shall within 30 days from
the Closing date, furnish to Circle K a copy of the NCS Bankruptcy
Court Order approving NCS' assumption of the lease of NCS Store No.
1149."
1.7 Circle K Store No. 2169 (Adjacent Property). The agreement is
hereby amended by the addition of Section 12.27, which shall provide:
"12.27 Circle K Title Curative Matters. Circle K shall cause
all title curative work to be preformed which are necessary in order
for Circle K to deliver to NCS an Owners Title Policy in accordance
with the terms of the Agreement, and Circle K shall deliver such
policy to NCS within 60 days after the Closing Date."
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1.8 Amendment to Exhibit G-1. Exhibit F to Exhibit G-1 of the
Agreement is hereby deleted in its entirety and Exhibit B hereto is substituted
therefor.
1.9 Amendment to Exhibit G-2. Exhibit F to Exhibit G-2 of the
Agreement is hereby deleted in its entirety and Exhibit C hereto is substituted
therefor.
1.10 Amendment to Schedule 1.1(r)i. Schedule 1.1(r)i of the Agreement
is hereby deleted in its entirety and Exhibit D hereto is substituted therefor.
1.9 Amendment to Schedule 1.1(r)ii. Schedule 1.1(r)ii of the
Agreement is hereby deleted in its entirety and Exhibit e hereto is substituted
therefor.
2. MISCELLANEOUS
2.1 Continued Validity. Except as modified hereby, all terms and
conditions of the Agreement shall remain in full force and effect.
2.2 Usage. Capitalized terms used in this Amendment and which are not
defined herein shall have the meanings ascribed to them in the Agreement.
2.3 Headings. The headings and titles to the Articles, Sections and
Subsections of this Amendment are inserted for convenience only and shall
neither be deemed a part hereof nor affect the construction or interpretation
of any provision hereof.
2.4 Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of such
counterparts together shall constitute by one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
NATIONAL CONVENIENCE STORES THE CIRCLE K CORPORATION
INCORPORATED
By: /s/ C.R. WORTHAM, JR. By: /s/ PHILIP W. TOMCZYK
C. R. Wortham, Jr. Philip W. Tomczyk
Senior Vice President Senior Vice President-
Gasoline and Store Development
NCS REALTY COMPANY CIRCLE K PROPERTIES, INC.
By: /s/ C.R. WORTHAM, JR. By: /s/ PHILIP W. TOMCZYK
C.R. Wortham, Jr. Philip W. Tomczyk
Vice President Vice President
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<PAGE> 1
EXHIBIT 10.11
ASSET PURCHASE AGREEMENT
By And Among
NATIONAL CONVENIENCE STORES INCORPORATED,
NCS REALTY COMPANY,
STOP N GO MARKETS OF GEORGIA, INC.
THE CIRCLE K CORPORATION
And
CIRCLE K PROPERTIES, INC.
DATED AS OF APRIL 20, 1994
<PAGE> 2
TABLE OF CONTENTS
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TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
INDEX OF EXHIBITS AND SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2. Purchase of Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3. Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4. Opt-Out Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.5. Instruments of Conveyance and Transfer . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6. Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 3. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1. Title Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2. Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.3. Review of Title Commitments by Circle K . . . . . . . . . . . . . . . . . . . . . 8
Section 3.4. NCS's Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.5. Inability to Deliver Any of the Stores . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.6. Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.2. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.3. Actions by the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.4. Conditions to Obligation to Close . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.5. Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 5. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.2. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.3. Assumption of Liability; Indemnification . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4. Certain Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 6. REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.1. NCS's Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . 16
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Section 6.2. Circle K's Representations, Warranties and Covenants. . . . . . . . . . . . . . . . . . . . . 18
Section 6.3. Operation, Repair and Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.4. Purchases of Inventories Prior to Closing Date. . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.5. Covenant of Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 7. INDEPENDENT INVESTIGATION; DISCLAIMER; AND SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
AND INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.1. Independent Investigation; Scope of
Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.2. Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.3. Survival of Covenants, Agreements,
Representations and Warranties and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Indemnification by NCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Indemnification by Circle K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 8. ACCESS TO INFORMATION; DUE DILIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.1. Inspections; Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.1. Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.2. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 10. EMPLOYMENT MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.1. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.2. No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 11. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.1. Defaults by Either Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.1. Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.2. Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.3. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 12.4. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.5. Entire Agreement; Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.6. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.7. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 12.9. Additional Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.10. Applicable law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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Section 12.11. Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 12.12. Bulk Transfer Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.14. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.15. Public Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.16. Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.17. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.18. Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.19. Delivery of Written Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.20. Met Life Leaseback Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.21. Use of Tradename and Servicemarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
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INDEX OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Procedures for Determining Purchase Price of Inventories
Exhibit B-1A Form of Assignment and Assumption of Lease (With Lessor
Consent)
Exhibit B-1B Form of Assignment and Assumption of Lease (With Lessor
Consent, NCS as Guarantor)
Exhibit B-2A Form of Assignment and Assumption of Lease (No Lessor
Consent)
Exhibit B-2B Form of Assignment and Assumption of Lease (No Lessor
Consent, NCS as Guarantor)
Exhibit B-3A Form of Assignment and Assumption of Sublease (NCS as
Sublessor)
Exhibit B-3B Form of Assignment and Assumption of Sublease (SNG as
Sublessor, NCS as Guarantor)
Exhibit B-4 Form of Assignment and Assumption of Lease (Metropolitan
Life Insurance Company)
Exhibit B-5A Form of Assignment and Assumption of Lease (NCS as
Lessor)
Exhibit B-5B Form of Assignment and Assumption of Lease (SNG as
Lessor, NCS as Guarantor)
Exhibit C Form of Assignment and Assumption of Contracts
Exhibit D Form of Deed
Exhibit E Form of Assignment and Bill of Sale
Exhibit F Form of Officer's Certificate
Exhibit G-1 Form of Underground Storage Tank System Information List
Exhibit G-2 Form of Current/Required Remediation Sites Schedule List
Exhibit G-3 Form of Remediation of Petroleum Contamination Transfer
Letter
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Exhibit G-4 Form of Environmental Remediation Reimbursement
Applications List
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<PAGE> 7
SCHEDULES
Schedule 1.1(d) Contracts
Schedule 1.1(j)(9) Description of Additional Excluded Assets
Schedule 1.1(m) Description of Excluded Improvements
Schedule 1.1(o) Descriptions of Fee Stores
Schedule 1.1(r) Description of Leases
Schedule 1.1(s) Liabilities Assumed by Circle K
Schedule 1.1(ab) Description of Sale Leaseback Agreement(s)
Schedule 1.1(ac) List of Convenience Stores
Schedule 2.4 Store Valuations and Cash Flow
Schedule 6.1(c) Requisite Consents to be Obtained by NCS
Schedule 6.1(e) NCS Litigation
Schedule 6.1(l) Employment Related Agreements to be Assumed by Circle K
Schedule 6.2(c) Requisite Consents to be Obtained by Circle K
Schedule 6.2(d) Circle K Litigation
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EXHIBIT A
PROCEDURES FOR DETERMINING PURCHASE PRICE OF INVENTORIES
NCS shall, at the time of the audit, physically gauge the level of motor
fuels contained in each fuel storage tank at each Store to be conveyed to
Circle K and determine the number of inches of motor fuel contained therein.
Circle K may have representatives present. Thereafter, the number of inches
shall be converted to gallons of motor fuel less water by use of the
appropriate manufacturer's tank chart. To determine the purchase price of the
Motor Fuel Inventory to be paid by Circle K to NCS, the result shall be
multiplied by the price NCS paid for the motor fuel at its last documented
delivery for each Store, plus applicable freight charges and taxes.
Immediately after the conclusion of such measurements and calculations, the
results thereof shall be memorialized in writing and signed by representatives
of NCS and Circle K, and shall be binding on NCS and Circle K.
The purchase price of the Merchandise Inventory to be paid by Circle K
to NCS for the Stores shall equal the actual retail price of such Merchandise
Inventory established in accordance with the NCS's inventory pricing practices
multiplied by the average cost of such Merchandise Inventory as calculated by
the retail method of inventory valuation utilized by NCS for the operating area
where each Store is located, expressed as a percentage on the operating
statement for such Store for the three (3) calendar months immediately
preceding the Closing Date. NCS shall, on the Closing Date or within 48 hours
before, conduct an audit of the inventory at each Store along with a
representative from Circle K who shall have a right to participate in the
taking of the inventory. Circle K will take control of the inventory at each
location effective as of the initiation of the physical audit taken at each
location. Damaged, spoiled and outdated merchandise will not be included in
the count. Branded items, such as hard plastic coffee cups/fountain mugs and
ice chests will be included in the count. Hot cups, cold cups, Icee cups,
popcorn bags and nacho bowls will be limited to a maximum inventory of 200
containers per size. None of the smallest size of NCS's hot cups and none of
the smallest size of the NCS's cold cups will be counted. Circle K will only
be obligated to buy filled ice bags. Those products used to fill hot/cold
containers (i.e., coffee beans/packets, fountain drink bag in the box, etc.)
will be assigned a zero value. Immediately after the calculation of the amount
of the Merchandise Inventory, the results thereof shall be memorialized in
writing and signed by representatives of NCS and Circle K and shall be binding
on NCS and Circle K.
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Within fifteen (15) Days after the Closing Date, the Parties shall
calculate the total purchase price payable by Circle K to NCS for the
Inventories. The amount payable by Circle K to NCS shall be paid by wire
transfer of immediately available federal funds not later than fifteen (15)
Days after the Closing Date.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of April 20,
1994, is by and among NATIONAL CONVENIENCE STORES INCORPORATED, a Delaware
corporation, NCS REALTY COMPANY, a Texas corporation and STOP N GO MARKETS OF
GEORGIA, INC., a Georgia corporation (hereinafter, collectively, "NCS"), whose
principal address is 100 Waugh Drive, Houston, Texas 77007, and THE CIRCLE K
CORPORATION, a Texas corporation, and CIRCLE K PROPERTIES, INC., a Delaware
corporation (hereinafter, collectively, "Circle K"), whose principal address is
Phoenix Corporate Center, Suite 1800, 3003 North Central Avenue, Phoenix,
Arizona 85012.
INTRODUCTION
NCS desires to sell to Circle K and Circle K desires to purchase from
NCS, on the terms and subject to the conditions of this Agreement, eight (8)
operating Fee Stores and adjacent properties (if any) and nineteen (19)
operating Leased Stores and adjacent properties (if any) located in the State
of Georgia, together with certain assets used in the operation of the Stores
and Merchandise Inventories and Motor Fuel Inventories located at such Stores.
In addition, on the terms and subject to the conditions of this Agreement, NCS
desires to assign to Circle K and Circle K desires to assume from NCS certain
ongoing obligations relating to the operation of the Stores.
ARTICLE 1. DEFINITIONS
SECTION 1.1. CERTAIN DEFINITIONS.
As used in this Agreement:
(a) "ASSETS" shall mean NCS's interest in the Land,
Improvements, Equipment, Leases, transferable licenses and permits and
Contracts, all as hereinafter defined, but shall not include the
Excluded Assets, as hereinafter defined.
(b) "CLOSING" shall mean the consummation of the
transactions contemplated by Article 2 of this Agreement.
(c) "CLOSING DATE" shall mean the date designated in
Section 4.1 on which the Closing will be held.
(d) "CONTRACTS" shall mean NCS's interest in those
contracts designated on Schedule 1.1(d) which shall be assigned to and
assumed by Circle K on the Closing Date.
<PAGE> 11
(e) "DAYS" shall mean calendar days unless the phrase
"Business Days" is used, and if the last Day of any period of time set
forth herein falls on a Saturday, Sunday or national legal holiday,
such period shall be automatically extended to include the next
following Business Day. "BUSINESS DAYS" shall mean those calendar
days that are not Saturdays, Sundays or national legal holidays.
(f) "EFFECTIVE TIME" shall mean as to (i) the
Inventory in each Store, the time on the Closing Date at which the
inventory procedure described in Exhibit A is initiated with respect
to such Store, and (ii) the Employees and the Assets (other than the
Inventory), 10:00 a.m., Houston, Texas time on the Closing Date.
(g) "EFFECTIVE DATE" shall mean the date of this
Agreement.
(h) "EMPLOYEES" shall mean employees of NCS who work
at a Store or who directly service or supervise any such Stores.
(i) "EQUIPMENT" shall mean, except for Excluded
Assets, NCS's interest in all gasoline storage tanks and related
piping, gasoline station and gasoline dispensing equipment, walk-in
boxes, movable trade fixtures, equipment, furniture, furnishings and
installations of every kind located on the Land or the Leased Land and
conveyed to Circle K on the Closing Date.
(j) "EXCLUDED ASSETS" shall mean the following:
(1) Cash and accounts receivable, except
for a change fund for each Store to be separately purchased
from NCS by Circle K and as agreed to by the Parties at the
time of the Closing;
(2) Any service mark, trademark, trade
name, signs, uniforms or other items bearing any trademark
owned or licensed by NCS or bearing NCS's name or logo;
(3) NCS's name plate on credit card
imprinters;
(4) Money order machines;
(5) Access to the mainframe computer and
computer systems owned or operated by NCS;
(6) Logo racks belonging to vendors and
other assets owned by suppliers and other third parties and
not assigned pursuant to a contract designated on Schedule
1.1(d);
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<PAGE> 12
(7) Nontransferable licenses, permits,
contracts and other agreements;
(8) Manuals and operational and training
materials; and
(9) Additional assets described or
identified on Schedule 1.1(j)(9).
(k) "FEE STORES" shall mean the Stores with respect to
which NCS has fee simple ownership of the Land.
(l) "HAZARDOUS MATERIALS" shall mean (i) any "solid
waste," "hazardous waste" or "regulated substance" as defined by the
Resource Conservation and Recovery Act ("RCRA") of 1976 (42 U.S.C.
Section 6901 et seq.) as amended from time to time, and regulations
promulgated thereunder; (ii) "regulated asbestos-containing materials"
as defined in the National Emission Standard for Asbestos ("NESA") (40
C.F.R. Section 61.140 et seq.) as amended from time to time; (iii)
any substance, the presence of which is prohibited by any governmental
authority; (iv) any other substance which by any governmental
regulatory authority requires special handling or notification of any
federal, state or local governmental entity in its collection, sale,
transportation, storage, treatment or disposal; and (v) any
underground storage tanks, whether active, inactive, empty, filled or
partially filled with any such materials, provided, however, that the
term "Hazardous Materials" shall not include Petroleum Products.
(m) "IMPROVEMENTS" shall mean NCS's interest in all
buildings constructed upon the Land or the Leased Land together with
all permanently attached machinery and fixtures, heating, plumbing,
electrical, lighting, ventilating and air-conditioning equipment
located on the Land or the Leased Land on the Closing Date, except as
described on Schedule 1.1(m).
(n) "INVENTORY" shall mean the Merchandise Inventory,
and the Motor Fuel Inventory.
(o) "LAND" shall mean NCS's fee interest in the real
property described on Schedule 1.1(o), together with NCS's interest in
the rights, easements and appurtenances pertaining thereto, including
without limitation any right-of-way or easement over any adjoining
property and any right, title and interest of NCS in and to adjacent
streets, alleys or rights-of-way.
(p) "LEASED LAND" shall mean the real property demised
to NCS pursuant to a Lease.
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<PAGE> 13
(q) "LEASED STORES" shall mean the Stores with respect
to which NCS has a leasehold estate in the Leased Land.
(r) "LEASES" shall mean NCS's interest in the leases
and/or subleases identified and described on Schedule 1.1(r) which
shall be assigned to and assumed by Circle K on the Closing Date or
the premises demised thereunder which shall be subleased by NCS to
Circle K upon essentially the same terms and conditions as are
contained in the Lease of the premises to NCS.
(s) "LIABILITIES" shall mean the liabilities listed on
Schedule 1.1(s) to be assumed by Circle K on the Closing Date and
which shall include without limitation NCS's obligations under the
Contracts and the Leases assumed by Circle K.
(t) "MERCHANDISE INVENTORY" shall mean the goods and
merchandise (other than motor fuel) offered for sale or lease by NCS
or held in storage for future sale or lease or used as operating
supplies at the Stores on the Closing Date, but shall not include
damaged or dated items or items bearing NCS's trademarks.
(u) "MOTOR FUEL INVENTORY" shall mean the motor fuel
offered for sale or held in storage for future sale at the Stores on
the Closing Date.
(v) "OTHER PARTY" shall mean either NCS or Circle K,
as the context requires.
(w) "PARTY" or "PARTIES" shall mean, respectively,
either NCS or Circle K or both NCS and Circle K, as the context
requires.
(x) "PERMITTED EXCEPTIONS" shall mean (i) the Standard
Exceptions (as defined in Section 3.2 hereof), (ii) title exceptions
which do not materially and adversely affect or impair the use of the
Land and Improvements as currently used, and (iii) those exceptions or
conditions shown in the Title Commitments to which Circle K does not
object in accordance with Section 3.3 hereof.
(y) "PETROLEUM CONTAMINATION" shall mean contamination
derived solely from the on-site storage, sale or distribution of
Petroleum Products.
(z) "PETROLEUM PRODUCTS" shall mean those substances
included within the meaning of the petroleum exclusion to CERCLA, 42
U.S.C. Section 9601(14), as interpreted by the courts and the
Environmental Protection Agency ("EPA"), that is: petroleum,
including crude oil or any fraction thereof which is not otherwise
specifically listed or designated as a hazardous substance under
Subparagraphs (A) through (F) of 42 USC Section 9601(14), natural
gas, natural gas liquids, liquefied natural gas, and synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas).
The word fraction
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refers to certain distillates of crude oil, including gasoline,
kerosene, diesel oil, jet fuels, and fuel oil, pursuant to Standard
Definitions of Petroleum Statistics, American Petroleum Institute,
Fourth Edition 1988.
(aa) "REPORTABLE RELEASES" shall mean a release of
Petroleum Products or Hazardous Materials that must be reported under
the more stringent of (i) 40 C.F.R. 280 Subpart E, (ii) RCRA, 42
U.S.C. 6901 et seq., (iii) NESA, 40 C.F.R. 61.140 et seq, or (iv)
state or local administrative regulations or statutory requirements.
(ab) "SALE LEASEBACK AGREEMENT(S)" shall mean those
agreements described on Schedule 1.1(ab).
(ac) "STORE" or "STORES" shall mean the convenience
stores listed on Schedule 1.1(ac).
(ad) "SUBLEASE" or "SUBLEASES" shall mean,
respectively, a sublease or subleases entered into between the Parties
pursuant to Sections 1.1(q), 2.5(b) and 3.5.
(ae) "SURVEY" or "SURVEYS" shall mean, respectively,
mean each survey or collectively all surveys furnished in accordance
with the terms and provisions hereof.
(af) "TITLE COMPANY" shall mean Lawyers Title Insurance
Corporation, as agent for the title insurance underwriters named in
the Title Commitments.
(ag) "TITLE POLICY" shall mean the owner's title
insurance policy or policies issued by the Title Company in accordance
with the terms and provisions hereof.
ARTICLE 2. SALE
SECTION 2.1. SALE OF ASSETS.
Subject to the terms and conditions stated herein, NCS agrees to
transfer, and Circle K agrees to accept, the Assets as further designated
herein.
(a) As of the Effective Time, NCS shall transfer to
Circle K the Land, the Leases, the Improvements, the Equipment, the
Contracts and the transferable licenses and permits that Circle K
agrees in writing to assume.
(b) As of the Effective Time, Circle K shall (i)
assume the transferable licenses and permits that Circle K agrees in
writing to assume, and (ii) pay to NCS by wire transfer of immediately
available federal funds the sum of Nine Million One Hundred Fifty
Thousand Dollars ($9,150,000).
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SECTION 2.2. PURCHASE OF INVENTORY.
(a) As of the Effective Time, NCS shall sell to Circle
K and Circle K shall purchase from NCS, the Inventory. The purchase
price of the Inventory shall be determined and paid in accordance with
the procedures set forth in Exhibit A.
(b) In the event a Store is excluded from this
transaction pursuant to Section 2.4, NCS may elect to close said Store
not less than two (2) Days before the Closing Date and distribute the
Store's Inventory to Stores that will be conveyed to Circle K on the
Closing Date pursuant to this Agreement. The Inventory shall be
distributed reasonably evenly to not less than eight (8) such Stores.
All expenses of Closing a Store and moving and restocking the
Inventory at the other Stores shall be borne by NCS. As of the
Effective Time, the Inventory will be counted as part of the Inventory
of the Stores that are being sold to Circle K.
SECTION 2.3. ASSUMPTION OF LIABILITIES.
As of the Effective Time, Circle K shall assume the
Liabilities and shall indemnify, defend and hold NCS harmless with
respect to any losses, liabilities, damages, costs and expenses
(including attorneys' fees, court costs and costs of investigation)
which arise from or are in any way related to Circle K's failure to
assume or discharge timely any of the Liabilities. The assumption of
Liabilities by Circle K shall be evidenced by the execution and
delivery by Circle K to NCS of (i) Assignments and Assumptions of
Lease (or Sublease) substantially in the forms of Exhibits B-1A
through B-5B attached hereto, as appropriate, and (ii) Assignments and
Assumptions of Contracts substantially in the form of Exhibit C.
Except as specifically provided for in this Section 2.3 or elsewhere
in this Agreement, no liabilities or obligations of NCS shall be
assumed by Circle K in this transaction.
SECTION 2.4. OPT-OUT STORES.
(a) In the event NCS is unable to transfer a Store to
Circle K because of events beyond the control of NCS after the
exercise of reasonable effort then, in such event after written notice
to Circle K, such Store shall be excluded from the transaction and an
amount equal to the value of the excluded Store as shown on Schedule
2.4 shall be deducted from the purchase price payable by Circle K to
NCS pursuant to Section 2.1(b) hereof.
(b) If, prior to the Closing Date, condemnation
proceedings are begun with respect to any Asset that would render a
Store's continued operation as a convenience store impracticable in
accordance with generally accepted operating procedures in the
convenience store industry, such Store shall be excluded from the
transaction and an amount equal to the value of the excluded Store as
shown on Schedule 2.4 shall be
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<PAGE> 16
deducted from the purchase price payable by Circle K to NCS pursuant
to Section 2.1(b) hereof.
(c) In the event that the cash flow (as shown on
Schedule 2.4) of the Stores excluded pursuant to this Section 2.4 is
greater than ten percent (10%) of the total cash flow of all Stores as
shown on Schedule 2.4, either Party shall have a right to terminate
this Agreement as set forth below. Such right to terminate shall
terminate on the sixth (6th) Business Day following receipt by Circle
K of notification of the exclusion of the Store which causes the
threshold aggregate amount stated above to be exceeded; provided,
however, that such right to terminate shall be reinstated for an
additional period of five (5) Business Days following receipt of any
later notice of the exclusion of any additional Store beyond such
threshold aggregate amount. Receipt of either type of notice
described in the immediately preceding sentence shall automatically
postpone the Closing Date to the first Business Day following the
expiration of the termination period applicable to such notice.
SECTION 2.5. INSTRUMENTS OF CONVEYANCE AND TRANSFER.
(a) On the Closing Date, NCS shall deliver to Circle K
special or limited warranty deeds, bills of sale, Assignments and
Assumptions of Lease and/or Sublease, and Assignments and Assumptions
of Contracts, to transfer the Assets to Circle K. The special or
limited warranty deeds shall be subject to the Permitted Exceptions.
(b) Certain of the Assets to be transferred under this
Agreement consist of leasehold interests in Stores subject to Sale
Leaseback Agreement(s). In the event a Store is subject to a Sale
Leaseback Agreement, the conveyance of NCS's interest will be subject
to the terms of the relevant Sale Leaseback Agreement. In such event,
the transfer may be accomplished by an (i) an Assignment and
Assumption of Lease, or (ii) a Sublease with terms and conditions as
prescribed by the applicable Sale Leaseback Agreement and further
described on Schedule 1.1(ab), in the form and with such content as is
agreed to by the Parties.
SECTION 2.6. ESCROW AGENT.
The "Escrow Agent" to hold monies and documents shall be:
Lawyers Title Insurance Corporation
National Accounts Office
600 North Pearl, Suite 700, LB 185
Dallas, TX 75201
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ARTICLE 3. TITLE
SECTION 3.1. TITLE COMMITMENTS.
As soon after the Effective Date as is reasonably possible, Circle K
shall, at its sole cost and expense, order from the Title Company such Title
Commitments as it desires covering the Land and the buildings at the Fee
Stores. The Title Commitments shall describe the state of the title to the
Land and buildings at the Fee Stores, together with all exceptions and
conditions, including without limitation, all easements, descriptions,
rights-of-way, covenants, reservations and all other liens or encumbrances
affecting the Land and buildings at the Fee Stores which would appear in an
owner's Title Policy, if issued. The Title Commitments shall contain the
express commitment of the Title Company to issue a Title Policy to Circle K, in
the amount specified by Circle K, insuring such title to the Land and buildings
comprising each Fee Store as is specified in the Title Commitments. NCS shall
simultaneously cause to be furnished to Circle K, at NCS's sole cost and
expense, copies of all instruments reasonably requested by Circle K which are
referred to in the Title Commitments as conditions or exceptions to title to
the Land and buildings comprising the Fee Stores, including liens.
SECTION 3.2. TITLE POLICIES.
At the Closing, Circle K, at its sole cost and expense, may purchase
Title Policies covering the Land and buildings at each Fee Store insuring
indefeasible fee simple title free and clear of all liens and encumbrances
other than the Permitted Exceptions, which are (i) those to which Circle K does
not object pursuant to Section 3.3, (ii) exceptions which do not materially and
adversely affect or impair the use of the Land and Improvements as currently
used, and (iii) the standard exceptions contained in the standard ALTA Form
Title Policy (or the comparable form required in the State of Georgia) (the
"Standard Exceptions").
SECTION 3.3. REVIEW OF TITLE COMMITMENTS BY CIRCLE K.
Circle K shall have ten (10) Days after receipt of each Title
Commitment to review and to deliver to NCS (such that the objections are
received by NCS within said time period) in writing any objections that Circle
K may have to anything (other than Permitted Exceptions) contained or set forth
in a Title Commitment. Circle K agrees that it shall not object to normal
utility, ingress, egress, access or similar easements or other matters
affecting the Land and buildings comprising the Fee Stores which do not
materially interfere with the current use of the Land. Any such items to which
Circle K does not so object within such period shall be deemed to be Permitted
Exceptions.
SECTION 3.4. NCS'S RIGHT TO CURE.
If exceptions (other than Permitted Exceptions) to the title to a
particular Fee Store have been identified in a Title Commitment and if Circle K
delivers objections to such exceptions to
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NCS in accordance with Section 3.3, then NCS shall, prior to the Closing Date,
use its reasonable efforts to satisfy such objections and shall be obligated to
cure, at the Closing, any matter that can be cured solely by the payment of
money ("Monetary Exceptions") in an amount not to exceed $25,000 per Fee Store.
NCS shall be obligated to release all Deed of Trust liens at its sole expense,
which shall not be considered Monetary Exceptions. NCS shall have the option,
but not the obligation, to cure any Monetary Exception involving the payment of
money in an amount in excess of $25,000 per Fee Store ("Optional Monetary
Exception"). If NCS gives written notice to Circle K within ten (10) Days
after receipt from Circle K of such objections that NCS is unable by the use of
reasonable efforts to cure any exception that is not a Monetary Exception or is
unwilling to cure any Optional Monetary Exception as to any Fee Store, then
such Fee Store shall be excluded from the transaction in accordance with
Section 2.4 unless Circle K, by written notice to NCS within ten (10) Days
after receipt of notice of NCS's inability or unwillingness to cure such
exception, elects to waive such exception and not to treat such Fee Store in
accordance with Section 2.4. Notwithstanding anything to the contrary
elsewhere in this Agreement, the exclusion of a particular Fee Store in
accordance with Section 2.4 shall be Circle K's sole remedy in the event that
NCS is unable or unwilling to cure Circle K's objections to exceptions to the
title to the real property at such Fee Store.
SECTION 3.5. INABILITY TO DELIVER ANY OF THE STORES.
Notwithstanding any terms herein to the contrary, if after the use of
reasonable efforts (which reasonable efforts need not include the expenditure
of money) NCS is unable to secure the consent of any third party (including the
landlord of a Sale Leaseback Agreement or an individual lease) required for the
assignment or Sublease or conveyance of any Asset to Circle K, the Parties will
endeavor in good faith to structure a transaction (by Sublease, license, or
other reasonably satisfactory arrangement) that gives the Parties the economic
equivalents of their respective bargains without requiring the consent of such
third party. In the event a reasonably satisfactory arrangement cannot be made
with respect to a Store or in the event of a condemnation as described in
Section 2.4(b) or in any other event in which NCS is unable to deliver any
particular Store on the Closing Date, such Store shall not be transferred and
shall be treated as provided in Section 2.4.
In the event of a partial condemnation of the Assets that would not
render a Store's continued operation as a convenience store impracticable in
accordance with generally accepted operating procedures in the convenience
store industry, NCS shall assign to Circle K at Closing any claim arising out
of the partial condemnation and Circle K shall take title to the affected
Asset. Said assignment of claim shall be Circle K's sole remedy if NCS is
unable to deliver any portion of the Assets due to a partial condemnation.
SECTION 3.6. SURVEYS.
As soon after the Effective Date as is reasonably possible, NCS shall
furnish to Circle K all Surveys which NCS has in its possession covering the
Fee Stores. Circle K may order
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<PAGE> 19
Surveys for Fee Stores for which NCS has not been able to provide a Survey.
All Surveys will be ordered at Circle K's sole cost and expense and shall be
conducted in accordance with ALTA or equivalent requirements. If any Survey
reveals any discrepancies, conflicts or shortages in area or boundary lines, or
any encroachments, or any overlapping of Improvements, or other matters not in
accordance with the Title Commitment to which Circle K would be entitled to
object under Section 3.3, then NCS, upon written request from Circle K received
no later than ten (10) Days after receipt by Circle K of the applicable Survey,
shall be obligated to cure, at the Closing, any discrepancy, conflict or
shortage in area or boundary lines, or any encroachment or any overlapping of
Improvements ("Survey Defect") that may be cured by the payment of an amount
not to exceed $25,000 per Fee Store. NCS shall have the option, but not the
obligation, to cure any Survey Defect involving the payment of money in excess
of $25,000 per Fee Store. If NCS is unable or unwilling to effect a cure prior
to the Closing Date, the affected Fee Store shall be excluded from the
transaction in accordance with Section 2.4 unless Circle K, by written notice
to NCS within ten (10) Days after receipt of notice of NCS's inability or
unwillingness to cure such defect, elects not to treat such Fee Store in
accordance with Section 2.4 and Circle K shall be deemed to have waived its
objection previously made to such defect. Notwithstanding anything to the
contrary elsewhere in this Agreement, the exclusion of a particular Fee Store
in accordance with Section 2.4 shall be Circle K's sole remedy in the event NCS
is unable by the use of reasonable efforts to effect a cure of any such matters
revealed by the Survey.
ARTICLE 4. CLOSING
SECTION 4.1. CLOSING.
The Closing shall be held at 10:00 A.M. at the principal place of
business of NCS in Houston, Texas on April 29, 1994 or as soon thereafter as
is reasonably practicable, unless both Parties agree in writing to another
time, date and place. Time is of the essence as to the Closing Date. The date
on which the Closing is held is referred to as the "Closing Date."
SECTION 4.2. RISK OF LOSS.
All risk of loss with respect to the Assets (except for the Inventory)
shall be borne by NCS until 10:00 a.m., Houston, Texas time on the Closing
Date. The risk of loss with respect to the Inventory in a particular Store
shall be borne by NCS until the initiation of the physical inventory with
respect to such Store in accordance with the procedures described on Exhibit A.
Thereafter, risk of loss shall be assumed by Circle K, and simultaneously
therewith Circle K shall assume operating control of the Stores except for
those withdrawn in accordance with the terms of this Agreement. NCS may cancel
all insurance coverage on the Assets effective at 12:01 a.m. local time on the
Day following the Closing Date.
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SECTION 4.3. ACTIONS BY THE PARTIES.
(a) Subject to the terms of this Agreement, at the
Closing, NCS shall execute, acknowledge (where appropriate) and
deliver to Circle K the following:
(1) Special or limited warranty deeds
substantially in the form of Exhibit D attached hereto,
conveying to Circle K indefeasible fee simple title to the
Land and buildings comprising the Fee Stores;
(2) A bill of sale substantially in the
form of Exhibit E attached hereto, conveying the Equipment and
Inventory to Circle K;
(3) Counterparts of the Assignments and
Assumptions of Lease, Assignments and Assumptions of
Contracts, Subleases and Closing statements;
(4) Assignment of transferable permits and
licenses; and
(5) Such other documents as the Parties
agree are appropriate under the circumstances.
In addition, NCS shall deliver to Circle K complete copies of its real estate
and construction files pertaining to the Stores.
(b) Subject to the terms of this Agreement, at the
Closing, Circle K shall:
(1) execute, acknowledge (where
appropriate) and deliver to NCS the following in form and
substance acceptable to NCS: Counterparts of the Assignments
and Assumptions of Lease, the Assignments and Assumptions of
Contracts, Subleases and Closing statements and such other
documents as the Parties agree are appropriate;
(2) Pay to NCS by wire transfer of
immediately available federal funds, in accordance with NCS's
written instructions, the sum of Nine Million One Hundred
Fifty Thousand Dollars ($9,150,000); and
(3) Cause the Title Company to deliver the
Title Policies.
SECTION 4.4. CONDITIONS TO OBLIGATION TO CLOSE.
The obligations of a Party pursuant to this Agreement are subject to
the fulfillment and satisfaction as of the Closing Date of each of the
following conditions. These conditions may be waived by a Party, provided that
if specific written notice of the failure of any one or more of such conditions
is given to a Party by the Other Party prior to the Closing Date, the Party
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may nevertheless proceed with the Closing without satisfaction in whole or in
part of such condition or conditions and without written waiver, and the Party
shall be deemed to have waived any rights or remedies it might otherwise have
had against the Other Party by reason of the failure of any condition specified
in such notice.
(a) Each Party's representations and warranties
pursuant to this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on the Closing Date.
(b) Each Party shall have performed and complied with
all covenants, agreements and conditions required by this Agreement to
be performed or complied with on or before the Closing.
(c) NCS shall have obtained such consents as are
listed on Schedule 6.1(c).
(d) Each Party shall have received from the Other
Party the following:
(1) Resolutions of the Board of Directors
of the Other Party authorizing the execution, delivery and
performance of this Agreement and the documents of conveyance
provided for herein.
(2) A certificate with respect to
incumbency and signatures of the relevant officers of the
Other Party.
(3) A certificate executed by a duly
appointed officer of the Other Party confirming that the
conditions specified in Sections 4.4(a), (b) and (c) have been
satisfied.
(4) Certificates of good standing for each
of the corporations that comprise the Other Party from the
states of their incorporation, the state(s) of their principal
place(s) of business and, for NCS, the State of Georgia.
(e) Circle K shall have received from NCS a
certificate executed by a duly authorized officer of NCS dated and
effective immediately prior to the Closing, in substantially the form
of Exhibit F attached hereto.
(f) All necessary regulatory approvals shall have been
obtained and all waiting periods shall have expired, including without
limitation those mandated by the Hart-Scott-Rodino Antitrust
Improvements Act.
(g) This Agreement shall not have been terminated.
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(h) There shall not be any actual or threatened action
or proceeding by or before any court or other governmental body or
agency that seeks to restrain, rescind, prohibit or invalidate the
transactions contemplated by this Agreement, except for eminent
domain, condemnation, or similar actions or proceedings, if any.
(i) The actions required by the Parties as set forth
in Section 4.3 shall have been completed.
(j) Since the Effective Date, there shall have been no
material adverse change in the Assets (taken as a whole) that has not
been waived by Circle K.
SECTION 4.5. PRORATIONS.
Taxes assessed against or with respect to the Assets, rent, charges
arising under the Contracts, and other items of income or expense including
utility bills shall be prorated as of the Closing Date. NCS will be
responsible to pay all rents due under the leases for May 1994 (subject to
Circle K's obligation to reimburse NCS for such costs pursuant to the
provisions of this Section). Each Party will cooperate with the Other Party to
obtain utility service for Circle K for the Stores as of the Closing Date.
Circle K shall assume and pay all utility bills accruing for the period after
the Closing Date. All accounts payable for Inventory delivered after the time
that the inventory audit is conducted pursuant to Exhibit A shall be paid by
Circle K. At Closing, Circle K shall reimburse NCS for all security deposits
paid pursuant to the Leases and Contracts. Percentage rent under the Leases
shall be prorated between the Parties as of the Closing Date upon receipt of
the percentage rent amounts and based on the assumption that each day of the
Lease year is responsible for 1/365 or 1/366 (as appropriate) of the total
percentage rent due and owing for the Lease year. The Parties acknowledge that
such proration will not occur until such time as the percentage rent is due to
the respective lessors.
ARTICLE 5. ENVIRONMENTAL MATTERS
SECTION 5.1. BACKGROUND.
In order to (i) minimize the likelihood of future disputes between the
Parties regarding their potential responsibilities for any environmental
remediation that may be required as a result of any Petroleum Contamination at
any of the Stores, and (ii) help promote certainty and thereby expedite the
performance of any such environmental remediation, the Parties desire to
allocate the responsibility for any such environmental remediation between them
as set forth in this Article 5. However, nothing in this Article 5 is
intended, or shall be interpreted or construed, to require either Party to
assume responsibility for, or to indemnify or defend the Other Party (or any
other Person) against, either (i) any Third Party Liability (as defined herein)
or (ii) any
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responsibility or liability for remediation of any nature other than
Environmental Remediation (as defined herein).
SECTION 5.2. DEFINED TERMS.
In addition to the terms defined elsewhere in this Agreement, the
terms set forth below shall have the following meanings:
(a) "ENVIRONMENTAL REMEDIATION" shall mean (i) such
actions as may be required by applicable law and applicable rules and
regulations relating to the environment that now or in the future
require the remediation of any of the Store Sites as the result of
Petroleum Contamination, as such law, rules and regulations may be in
effect from time to time, and (ii) such further actions, if any, as
may be required at any of the Store Sites by any final and
nonappealable order of any court or governmental authority requiring
remediation at any of the Store Sites. The term "Environmental
Remediation" shall not include any actions of any nature that may be
required at any of the Store Sites as a result of anything other than
Petroleum Contamination.
(b) "THIRD PARTY LIABILITY" shall mean any liability,
responsibility or obligation of any nature whatsoever other than
responsibility for Environmental Remediation. Without limiting the
foregoing in any way, the term "Third Party Liability" shall include
any and all liability to any Person for monetary damages, whether
arising in an action sounding in tort or contract, as civil or
criminal penalties, or otherwise.
(c) "STORE SITE" shall mean any tract of land in which
Circle K acquires a fee estate or a leasehold estate from NCS pursuant
to this Agreement, as well as any property that suffers or has
suffered Petroleum Contamination that originates or originated from
the tract acquired pursuant to this Agreement. The term "Store Site"
shall not include any property except to the extent that such property
suffers or has suffered Petroleum Contamination that originates or
originated from the property acquired by Circle K pursuant to this
Agreement.
(d) "PERSON" shall mean any individual or entity of
any nature whatsoever, and shall include governmental authorities and
quasi-governmental authorities and entities.
SECTION 5.3. ASSUMPTION OF LIABILITY; INDEMNIFICATION.
(a) Assumption of Liability. Subject to Section
5.3(b), Circle K hereby assumes all responsibility of NCS to effect
and pay for any and all Environmental Remediation required to be
performed after the Closing Date (whether in progress on
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the Closing Date or required in the future) at any and all of the
Store Sites acquired by Circle K pursuant to this Agreement ("Assumed
Liabilities").
(b) Limitation. The Assumed Liabilities shall not
include (i) any Third Party Liability, (ii) any liability to pay for
any Environmental Remediation performed prior to the Closing Date, or
(iii) any responsibility or liability relating to any Store Site as to
which NCS's representation in Section 6.1(m) hereof is inaccurate in
any material respect.
(c) Indemnification. Circle K hereby agrees to
indemnify, defend and hold harmless NCS from and against the Assumed
Liabilities and any attorneys' fees related thereto. In addition,
Circle K hereby agrees to indemnify, defend and hold harmless NCS from
and against any and all Damages (as defined elsewhere herein)
resulting directly from Circle K's failure to effect and pay for any
Environmental Remediation on a timely basis. Notwithstanding the
foregoing, Circle K shall not be responsible for any Damages that
arise from NCS's breach of its warranty under Section 6.1(m) hereof.
SECTION 5.4. CERTAIN RELATED MATTERS.
(a) NCS will promptly provide to Circle K the following items:
(1) Not later than twenty (20) Days after the Closing Date, a
list by Store of underground storage tank system information
including composition descriptions, installation dates, all
upgrades required by 40 CFR 280, or state or local
regulations, upgrading dates and date of each compliance
inspection or test (i.e., tank tightness test, leak detector
test, cathodic protection test and/or certification and
monitoring results), if any substantially in the form of
Exhibit G-1 attached hereto;
(2) On or before April 27, 1994 a Schedule substantially in
the form of Exhibit G-2 attached hereto identifying all Stores
and adjacent properties at which remediation of Petroleum
Contamination is occurring or required;
(3) Not later than twenty (20) Days after the Closing Date,
executed copies of such transfer documents (substantially in
the form of Exhibit G-3 attached hereto) or such other
documents as may be required by state or local authorities to
transfer the obligation to continue the remediation of
Petroleum Contamination from NCS to Circle K; and
(4) On or before April 27, 1994, a list substantially in the
form of Exhibit G-4 attached hereto of all applications
submitted to the regulatory authorities that have jurisdiction
over each Store for which Environmental Remediation was
undertaken
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regarding corrective action reimbursement requests. NCS will
grant its fund rights to Circle K for expenditures applied to
the fund deductible.
(b) Not later than ten (10) Days after the Closing Date, NCS
will provide to Circle K completed underground storage tank
registration forms for Circle K's signature and proper filing with the
appropriate state or local authorities.
(c) Not later than ten (10) Days after the Closing Date, NCS
will provide to Circle K a complete copy of NCS's environmental files
and underground storage tank system files pertaining to the Stores.
After Circle K's review of such files, should it desire additional
environmental or underground storage tank information, it shall have
the right to copy NCS's files, wherever located, at Circle K's sole
cost and expense. Circle K's right to copy NCS's environmental files
and underground storage tank systems files shall expire four (4) years
after the Closing. All files shall be retained in complete form
during this period.
(d) NCS will provide Circle K complete inventory data
pertaining to "Release Detection" for one (1) year prior to the
Closing Date. Such data shall be provided upon request should Circle
K be required to produce such records to a regulatory authority.
(e) NCS will provide Circle K any invoices and proof of
payment for corrective action expenditures that apply to any
environmental remediation reimbursement fund deductible within sixty
(60) Days after the Closing Date.
ARTICLE 6. REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 6.1. NCS'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
NCS hereby represents, warrants and covenants to Circle K as follows:
(a) That the execution and delivery of this Agreement
and the documents to be executed and delivered in connection herewith,
and the consummation of the transactions contemplated hereby and
thereby, shall constitute legal, valid and binding obligations of NCS
enforceable in accordance with the terms hereof and thereof.
(b) That neither the execution and delivery of this
Agreement or the documents executed in connection herewith will
violate or conflict with any provision of its Articles of
Incorporation or Bylaws, or will violate or result in the breach or
termination of any material agreement to which it is a party.
(c) That, except as set forth on Schedule 6.1(c), no
authorization, consent, approval, license, exemption, filing,
qualification, action by or registration with any
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person, organization, court, or governmental entity, is or will be
necessary in connection with the execution and/or performance of this
Agreement and/or the documents executed in connection herewith by NCS.
(d) That the Lease terms identified and described on
Schedule 1.1(r) are true, correct, accurate and complete in all
material respects.
(e) That, except as set forth on Schedule 6.1(e),
there is no pending litigation and NCS is not aware of any threatened
litigation against it that would materially affect this Agreement or
the transaction contemplated hereunder.
(f) That it has paid or will pay at or prior to
Closing all taxes that would place a lien on the Stores or impair the
ability of NCS to transfer the Assets as contemplated herein.
(g) That it shall use its best efforts (which best
efforts need not include the expenditure of money) to obtain all
consents of third parties necessary for the consummation of the
transactions described herein.
(h) That it has, at its expense, executed and filed or
joined in the filing of any applications or documents necessary to
obtain the authorization, approval or consent of any governmental body
that may be required, or that Circle K reasonably requested, in
connection with the consummation of the transactions contemplated
hereby, including without limitation any notification filings required
by the Hart-Scott-Rodino Antitrust Improvements Act.
(i) That it will use reasonable good faith efforts to
satisfy or cause to be satisfied all of the conditions precedent set
forth herein.
(j) That, after Circle K's determination of any retail
sales or excise tax liabilities of NCS for all periods prior to the
Closing Date, and NCS's receipt from Circle K of the appropriate tax
returns and reports, NCS shall promptly execute such tax returns and
reports and pay such retail sales or excise tax liabilities.
(k) That each of the NCS companies is a corporation
duly incorporated and validly existing under the laws of the state of
its incorporation and is duly qualified as a foreign corporation in
each jurisdiction in which the location of the Stores makes such
qualification necessary.
(l) That, except for those employment related
agreements set forth on Schedule 6.1(l) that Circle K agrees to
assume, it is not a party to any employment contracts, collective
bargaining agreements, labor contracts, salary commitments or employee
benefit commitments that will bind Circle K after the Closing.
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(m) That the environmental records made available or
given to Circle K pursuant to Article 5 are true and correct and
complete in all material respects to NCS's actual knowledge as to the
dates of tank installation, the construction of tanks, the dates and
extent of any modifications and Reportable Releases.
(n) That it shall remove all of its Excluded Assets
from the Stores as soon as practicable after the Closing with the
exception of trade fixtures and other Assets which belong to vendors,
which may or may not be removed by the vendors.
(o) That NCS has good and indefeasible title to the
Improvements and Equipment to be conveyed hereunder. None of the
Equipment (other than Excluded Assets, if any) shall be removed from
any of the Stores by NCS from the date hereof to the Closing Date,
except with prior written consent of Circle K.
(p) That the Leases to be assigned by NCS are in full
force and effect, that the lessor and lessee and/or Sublessor and
Sublessee are not in default thereunder, and at the Closing any
consent necessary to the assignment shall have been obtained.
(q) That the written consent of the Sale Leaseback
landlord has been obtained to the extent necessary.
(r) That, as of the Closing Date, it has notified
Circle K of any material adverse changes or events that have occurred
since the Effective Date and may affect the Assets or their operation.
(s) That, until the Closing, it will not increase the
retail prices of its Inventory.
SECTION 6.2. CIRCLE K'S REPRESENTATIONS, WARRANTIES AND
COVENANTS.
Circle K hereby represents, warrants and covenants to NCS as follows:
(a) That the execution and delivery of this Agreement
and the documents to be executed and delivered in connection herewith,
and the consummation of the transactions contemplated hereby and
thereby, shall constitute legal, valid and binding obligations of
Circle K enforceable in accordance with the terms hereof and thereof.
(b) That neither the execution and delivery of this
Agreement or the documents executed in connection herewith will
violate or conflict with any provision of its Articles of
Incorporation or Bylaws, or will violate or result in the breach or
termination of any material agreement to which it is a party.
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(c) That, except as set forth on Schedule 6.2(c), no
authorization, consent, approval, license, exemption, filing,
qualification, action by or registration with any person,
organization, court, or governmental entity, is or will be necessary
in connection with the execution and/or performance of this Agreement
and/or the documents executed in connection herewith by Circle K.
(d) That, except as set forth on Schedule 6.2(d),
there is no pending litigation and Circle K is not aware of any
threatened litigation against it that would materially affect this
Agreement or the transaction contemplated hereunder.
(e) That it has, at its expense, executed and filed or
joined in the filing of any applications or documents necessary to
obtain the authorization, approval or consent of any governmental body
that may be required, or that NCS has reasonably requested, in
connection with the consummation of the transactions contemplated
hereby, including without limitation any notification filings required
by the Hart-Scott-Rodino Antitrust Improvements Act.
(f) That it covenants and agrees to use its reasonable
good faith efforts to satisfy or cause to be satisfied all of the
conditions precedent set forth herein.
(g) That it will determine any retail sales or excise
tax liabilities of NCS for all periods prior to the Closing Date, and
will timely prepare the appropriate tax returns and reports and submit
them to NCS for execution and payment.
(h) That each of the Circle K companies is a
corporation duly incorporated and validly existing under the laws of
the state of its incorporation.
SECTION 6.3. OPERATION, REPAIR AND CONDITION.
(a) From June 30, 1993 until the Closing Date, NCS shall
(i) maintain, repair and operate the Stores in the ordinary course
of business, and (ii) reconstruct, repair or rebuild any Store that
is destroyed or damaged by a casualty in accordance with its normal
maintenance standards. On the Closing Date, NCS shall deliver the
Stores to Circle K in good condition and repair.
(b) In the event a Store is destroyed by a casualty and
cannot be either reconstructed, repaired or rebuilt by the Closing
Date, it shall be treated as an excluded Store pursuant to Section
2.4 unless NCS makes arrangements reasonably satisfactory to Circle
K for the restoration of such Store to its condition prior to the
casualty, in which event such Store shall be conveyed in accordance
with the terms of this Agreement.
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SECTION 6.4. PURCHASES OF INVENTORIES PRIOR TO CLOSING DATE.
NCS shall continue to purchase inventories for the Stores in
accordance with its existing practices from the date hereof until the Closing
Date.
SECTION 6.5. COVENANT OF COOPERATION.
The Parties agree that they shall reasonably cooperate with each
other in the satisfaction of their obligations under this Agreement. In
addition, they agree to join in the execution and delivery of such additional
documents or instruments as may be reasonably necessary for the consummation of
the transactions contemplated hereby. Neither Party, however, shall be
required to incur any expenses except as expressly set forth in this Agreement.
ARTICLE 7. INDEPENDENT INVESTIGATION; DISCLAIMER;
AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS AND INDEMNITY
SECTION 7.1. INDEPENDENT INVESTIGATION; SCOPE OF
REPRESENTATIONS AND WARRANTIES.
Circle K acknowledges that (i) it has been afforded the opportunity
to inspect the Assets as well as NCS's files pertaining thereto, (ii) it has
relied and will rely solely on its own independent investigation of the Assets
and upon the express representations, warranties and covenants contained in
this Agreement, and (iii) the review of the files was allowed solely as an
accommodation and should not be deemed to expand the representations or
warranties of NCS. CIRCLE K HEREBY SPECIFICALLY ASSUMES ANY AND ALL RISKS AND
OBLIGATIONS OF BRINGING THE ASSETS INTO COMPLIANCE WITH ANY AND ALL APPLICABLE
LAWS AND REGULATIONS INCLUDING WITHOUT LIMITATION LAWS AND REGULATIONS
PERTAINING TO PETROLEUM CONTAMINATION. In connection with the transactions
contemplated hereby and except as otherwise expressly provided in this
Agreement, NCS MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER WHETHER EXPRESS
OR IMPLIED, OF (A) MERCHANTABILITY, OR (B) FITNESS FOR A PARTICULAR PURPOSE, OR
(C) DESIGN, OR (D) COMPLIANCE WITH SPECIFICATIONS, OR (E) OPERATION OR
CONDITION, OR (F) CAPACITY, OR (G) SUITABILITY, OR (H) PERFORMANCE, OR (I)
QUALITY, OR (J) OTHERWISE. CIRCLE K ACKNOWLEDGES THAT, EXCEPT TO THE EXTENT
EXPRESSLY PROVIDED IN THIS AGREEMENT, THE ASSETS ARE BEING ACQUIRED ON AN "AS
IS, WHERE IS" BASIS, WITH ALL FAULTS. Without limiting the generality of the
foregoing, except as and to the extent set forth in this Agreement, NCS (i)
makes no representation or warranty whatsoever, express, implied or statutory,
in connection with the transactions contemplated by this Agreement, (ii) shall
not be liable to Circle K for any liability, claim, loss, damage (direct or
indirect or incidental or consequential),
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expense or cost of any kind or nature caused, directly or indirectly, by any
Asset or any inadequacy thereof for any purpose or any deficiency or defect
(latent or patent) therein, or the use or maintenance thereof, or any repairs,
servicing or adjustments thereto, or any delay in providing or failure to
provide any thereof, or any interruption or loss of service or use thereof, or
any loss of business, or any damage whatsoever or however caused. Except for
the representations and warranties set forth herein, as of the Closing Date,
Circle K on behalf of itself, its successors and assigns, hereby waives each
and every claim for recovery against NCS for any and all loss or damage to the
Assets or any personal property or other Property arising from or relating to,
in whole or in part, the maintenance, repair, condition or design of the
Assets.
SECTION 7.2. DISCLAIMER.
Except as and to the extent set forth in this Agreement, the
Exhibits and Schedules attached hereto, and the certificates to be delivered by
each Party or its officers at the Closing, each Party hereby disclaims all
liability and responsibility for any statement or information made or
communicated (orally or in writing) to the Other Party, including, without
limitation, any information included in NCS's files and reviewed by Circle K.
Without affecting Circle K's right to the representations and warranties set
forth in this Agreement, Circle K hereby acknowledges and affirms that it has
made its own independent investigation, analysis and evaluation of the Assets
(including, but not limited to, its own estimate and appraisal of the physical
condition, value and profitability of the Stores).
SECTION 7.3. SURVIVAL OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES AND INDEMNITY.
The representations, warranties, covenants and agreements set forth
in this Agreement shall survive the Closing Date, but only for the one (1) year
period immediately after the Closing Date. Furthermore, as a condition
precedent to the rights of a Party to sue (i) on any breach of any
representation, warranty, covenant or agreement made by the Other Party
hereunder, or (ii) to enforce the indemnification provisions of subparagraphs
7.3 (a) and (b) below in respect to any such breach of representation,
warranty, covenant or agreement, the Party seeking to assert any such breach or
enforce such indemnification must give notice to the Other Party of such breach
or the intent to enforce such indemnification prior to 5:00 P.M. Phoenix time
on the date which is one (1) year after the Closing Date. Further, at 5:00
P.M. Phoenix time, on the date which is one (1) year after the Closing Date,
each Party, without further action, shall be deemed to release the Other Party
from any and all damage, loss, cost, expense, obligation, claim or liability,
including costs of investigation, court costs and reasonable attorneys' fees,
("Damages") known or unknown, absolute, contingent or otherwise, arising from
or relating to the breach, known or unknown, absolute, contingent or otherwise,
of any representation, warranty, covenant or agreement hereunder in connection
with the transactions contemplated hereby, unless notice of such breach or the
intent to enforce the indemnification provisions below was given as described
above. The rights of the Parties to sue
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to enforce the representations, warranties, covenants and agreements set forth
in the Assignments and Assumptions of Lease and the Assignments and Assumptions
of Contracts, in each case, shall not require the giving of such notice, shall
not be deemed to be released, and shall continue in full force and effect until
barred by the applicable statute of limitation.
(a) INDEMNIFICATION BY NCS. Subject to subparagraph (c)
below, NCS, from and after the Closing Date, shall defend,
indemnify and hold Circle K harmless from and against any and all
Damages suffered or incurred by Circle K on account of or arising
from or related to NCS's operation of the Stores and ownership of
the Assets prior to the Closing Date (including without limitation
product liability, labor, employment and personal injury claims).
Notwithstanding anything to the contrary set forth herein, this
indemnification shall not include (i) any costs and expenses
specifically to be borne by Circle K pursuant to this Agreement,
(ii) any losses, liabilities, or obligations arising out of or
constituting a breach of any representation, warranty, covenant, or
agreement of Circle K under this Agreement, (iii) any claim for
lost profits relating to the Stores and/or the Assets, or (iv) any
Damages or claims relating to Environmental Remediation (except to
the extent such Damages or claims arise from a breach of NCS's
warranty under Section 6.1(m) hereof). Circle K shall promptly
notify NCS of the existence of any claim, demand or other matter to
which NCS's indemnification obligation would apply and shall give
NCS a reasonable opportunity to defend the same at NCS's own
expense and with counsel of NCS's own selection reasonably
satisfactory to Circle K; provided that Circle K also has the right
to fully participate in the defense at its own expense. If NCS,
within a reasonable time after this notice, but no later than
fifteen (15) Days, fails to defend, Circle K shall have the right,
but not the obligation, to undertake the defense thereof, and to
compromise or settle (exercising reasonable business judgment) the
claim or other matter on behalf, for the account, and at the risk,
of NCS.
(b) INDEMNIFICATION BY CIRCLE K. In addition to the
indemnification obligation assumed pursuant to Section 5.3, Circle
K, from and after the Closing Date, shall defend, indemnify and
hold NCS harmless from and against any and all Damages suffered or
incurred by NCS on account of or arising from or related to Circle
K's operation of the Stores and ownership of the Assets on and
after the Closing Date (including without limitation, product
liability, labor, employment and personal injury claims). NCS
shall promptly notify Circle K of the existence of any claim,
demand or other matter to which Circle K's indemnification
obligation would apply and shall give Circle K a reasonable
opportunity to defend the same at Circle K's own expense and with
counsel of its own selection reasonably satisfactory to NCS;
provided that NCS shall at all times also have the right to
participate fully in the defense at its own expense. If Circle K
shall, within a reasonable time after such notice, but no later
than fifteen (15) Days, fail to defend the claim, NCS shall have
the right, but not the obligation, to undertake the defense of, and
to compromise
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or settle (exercising reasonable business judgment) the claim or
other matter on behalf, for the account, and at the risk, of Circle
K.
(c) LIMITATION OF LIABILITY. Notwithstanding any other
provision of this Agreement, (i) the liability of each Party for
the breach of any representation or warranty or the failure to
perform or satisfy any covenant or agreement hereunder and the
indemnification obligations of the Parties shall be limited to
actual Damages and shall not include incidental, consequential or
indirect Damages, and (ii) neither Party shall have any liability
for any Damages arising from or relating to one or more breaches of
the representations, warranties, covenants or agreements set forth
in this Agreement or for any indemnification responsibilities
hereunder, unless and until and only to the extent that the
aggregate Damages to the Other Party and indemnification
responsibilities shall exceed the sum of Fifty Thousand Dollars
($50,000).
ARTICLE 8. ACCESS TO INFORMATION; DUE DILIGENCE
SECTION 8.1. INSPECTIONS; ACCESS TO INFORMATION.
NCS agrees to allow Circle K to inspect the Assets after reasonable
notice, provided such inspection does not interfere with the operation of the
Stores. NCS agrees to furnish Circle K with such information related to the
Assets as is reasonably requested and Circle K agrees to keep such information
highly confidential and not to reveal it to any person other than its officers,
directors, employees, agents and legal and accounting advisors. Information
provided is for the sole purpose of evaluating the transaction described
herein. Circle K agrees to inform its officers, directors, employees, agents
and advisors that the information must be treated confidentially. Although NCS
agrees in good faith to provide accurate and complete information, it does not
represent or warrant the accuracy and completeness of such information except
as is provided in this Agreement. Circle K acknowledges that it must rely on
independent evaluation of the Assets and not on information provided to it by
NCS. Circle K agrees that, if any governmental authority requests or requires
disclosure of any information that it has received from NCS, or if Circle K
receives a subpoena duces tecum or other order mandating disclosure of the
information, it will immediately notify NCS to permit NCS an opportunity to
seek a protective order with respect to disclosure of the information.
ARTICLE 9. TERMINATION
SECTION 9.1. EFFECTIVE.
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and abandoned at any time prior to the Closing as
follows:
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(a) MUTUAL CONSENT. By mutual written consent of both
Parties;
(b) BY NCS. By NCS if any one or more of the
conditions precedent to its obligations herein shall not have been
satisfied or if the Closing has not occurred by June 1, 1994
(except as such date may be postponed under Section 2.4(c) above)
for any reason other than the breach or default under this
Agreement by NCS; or
(c) BY CIRCLE K. By Circle K if any one or more of the
conditions precedent to its obligations herein shall not have been
satisfied or if the Closing has not occurred by June 1, 1994
(except as such date may be postponed under Section 2.4(c) above)
for any reason other than the breach or default under this
Agreement by Circle K; or
(d) BY EITHER PARTY. By either Party pursuant to the
provisions of Section 2.4(c) hereof.
SECTION 9.2. NOTICE.
Written notice of any termination under Section 9.1(b), (c) or (d)
stating the grounds therefor, shall be given promptly by the Party entitled to
give such notice.
ARTICLE 10. EMPLOYMENT MATTERS
SECTION 10.1. EMPLOYEES.
(a) NCS agrees to promptly notify Circle K of those
Employees it wishes to retain. Circle K shall then have the first
right to interview the Employees who will not be retained for the
purpose of making potential offers of employment.
(b) Circle K will endeavor to interview substantially
all of the remaining Employees who work in the Stores. After the
interviews, Circle K will consider employing such persons who meet
Circle K's current employment standards. NCS shall supply a list
of all Employees who work in the Stores, which list shall include
Employee's name, Social Security number, hourly rate and/or
bi-weekly salary, bonus (if any), tenure and job title. Circle K
shall notify NCS not less than five (5) Days prior to the Closing
Date of the names of the Employees offered employment with Circle K
and identify those accepting such offers.
(c) Except for Employees who remain in the employment of
NCS, NCS shall cause the termination of the employment of all of
its Employees to occur as of the Effective Time. Simultaneously
therewith, Circle K shall offer employment to such of NCS's
Employees as are selected for hire by Circle K. The Employees will
retain
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their last hire date as provided for in Circle K's policies and
procedures. Circle K's offers of employment pursuant to this
Section 10.1(c) shall not constitute any commitment, contract or
understanding (express or implied) of any obligation on the part of
Circle K to a post-Closing Date employment relationship of any
fixed term or duration or any terms or conditions other than as
Circle K may establish. Any employment accepted with Circle K
shall be "at will" subject to such conditions and terms as may be
established by Circle K and may be terminated by Circle K at any
time for any reason. NCS shall not be obligated under the terms
hereof to distribute sums pursuant to its separation pay policy to
Employees offered employment with Circle K. Any Employee who (i)
elects to remain in the employ of NCS, (ii) rejects such offer of
employment by Circle K, or (iii) is not offered employment by
Circle K, shall not, after the date of such election, rejection or
non-offer, be considered an "Employee" for purposes of the
remaining subparagraphs of this Section 10.1.
(d) NCS shall provide Circle K all information on each
Employee to be hired by Circle K that pertains to any training that
Employee received during the course of employment with NCS.
(e) Any Employee of NCS who is on any leave of absence,
which includes, but is not limited to, the Family and Medical Leave
Act, Workers' Compensation, or Medical or Military leave on the
Closing Date (an "Affected Employee"), shall remain in the employ
of NCS until released from the appropriate medical practitioner or
governmental agency. The Affected Employee may be terminated by
NCS and any causes of action or claims brought pursuant to that
termination will be the sole responsibility of NCS.
(f) Employees of NCS who wish to enroll in Circle K's
401(k) plan will be allowed to immediately enroll in Circle K's
401(k) plan on the next entry date of Circle K if they have been
employed with NCS for one year or more and are over twenty-one (21)
years of age.
(g) As of the Effective Time, Employees shall
participate in Circle K's existing employee benefit plans and
programs according to Circle K's policies as applicable to
employees performing the same jobs with Circle K as such Employees
performed with NCS.
(h) All accrued and prorated but unused vacation of
Employees shall be paid by NCS on the Closing Date.
(i) NCS shall provide Circle K all information in its
possession necessary to allow Circle K to continue participation in
the Targeted Jobs Tax Credit Program.
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SECTION 10.2. NO THIRD PARTY BENEFICIARIES.
The Parties do not intend to create any third-party beneficiary
rights by this Article. The Employees shall not be entitled to enforce the
provisions hereof.
ARTICLE 11. DEFAULTS
SECTION 11.1. DEFAULTS BY EITHER PARTY.
In the event a Party shall be deemed to be in default hereunder
prior to the Closing, the Other Party shall be entitled to exercise any and all
rights and remedies permitted by law or in equity, including without limitation
the remedy of specific performance. The Parties agree that the Damages which
the Other Party may suffer in the event of a default hereunder are impossible
or very difficult to estimate with any degree of certainty. A Party shall be
deemed to be in default hereunder if the Party shall fail to use reasonable
efforts to comply with or perform any covenant, agreement or obligation on its
part required within the time limits and in the manner set forth in this
Agreement, or if any representation or warranty made by a Party herein shall be
untrue or incorrect in any material respect, as of the effective date of such
representation or warranty.
ARTICLE 12. MISCELLANEOUS
SECTION 12.1. CLOSING COSTS.
Each Party shall pay (i) the legal, accounting and professional
fees and expenses incurred by said Party in connection with the transactions
described herein, (ii) the filing fees of such Party associated with the
Hart-Scott-Rodino Antitrust Improvements Act, and (iii) one-half of (a) the
Title Company's escrow fee, (b) all other Closing costs, including without
limitation any revenue stamps and transfer fees. Circle K shall pay the
charges for any Preliminary Title Reports, Title Policies and surveys ordered
by Circle K.
SECTION 12.2. BROKERAGE COMMISSIONS.
Each Party acknowledges that it has not utilized the services of a
broker or agent in this transaction and agrees to indemnify and hold the Other
Party harmless with respect to any claims by an agent or broker based on
dealings with such Party.
SECTION 12.3. ASSIGNMENT.
This Agreement may not be assigned by a Party without the prior
written consent of the Other Party.
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SECTION 12.4. BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit
of the Parties hereto and their respective successors and permitted assigns.
SECTION 12.5. ENTIRE AGREEMENT; MODIFICATIONS.
This Agreement embodies and constitutes the entire understanding
between the parties with respect to the transactions contemplated herein, and
all prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Neither this
Agreement nor any term, provision or condition hereof may be waived, modified,
amended, discharged or terminated except by an instrument in writing signed by
the parties hereto, and then only to the extent set forth in such instrument.
SECTION 12.6. HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation hereof.
SECTION 12.7. INTERPRETATION.
Whenever the context hereof so requires (i) the singular shall
include the plural, and the male gender shall include the female gender and the
neuter, and vice versa, and (ii) a reference to Circle K or NCS shall be a
reference to that company and to any subsidiary thereof referenced herein
having a role with respect to an obligation hereunder.
SECTION 12.8. NOTICES.
Any notice required or permitted to be delivered hereunder shall be
in writing and shall be deemed received when delivered in person or by telecopy
or one (1) Business Day after delivery to an overnight courier or delivery
service, addressed to a Party at the following addresses or such subsequent
addresses as are supplied in accordance herewith:
(a) If to NCS, to:
National Convenience Stores Incorporated
100 Waugh Drive
Houston, TX 77007
FAX: 713-880-0579
Attention: A. J. Gallerano, Esq.
Senior Vice President,
General Counsel and Secretary
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(b) If to Circle K, to:
The Circle K Corporation
Suite 1800
3003 North Central Avenue
Phoenix, AZ 85012
FAX: 602-530-5147
Attention: Gehl P. Babinec
Senior Vice President
and General Counsel
SECTION 12.9. ADDITIONAL ACTS.
In addition to the acts and deeds recited herein and contemplated
to be performed, executed or delivered, the Parties hereby agree to perform,
execute or deliver, or cause to be performed, executed or delivered, at the
Closing any and all such further acts, deeds and assurances as may be
reasonably required to consummate the transactions contemplated hereunder.
SECTION 12.10. APPLICABLE LAW AND JURISDICTION.
With respect to any matter pertaining to a specific Store, this
Agreement shall be governed by and construed for each Store in accordance with
the internal laws of the State of Georgia; BUT IN ALL MATTERS NOT PERTAINING TO
A SPECIFIC STORE, THIS AGREEMENT SHALL BE CONSTRUED UNDER AND IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
SECTION 12.11. DISPUTE RESOLUTION.
Should a dispute arise regarding this Agreement, such dispute shall
be settled by arbitration in the City of Dallas, Texas, United States of
America before a panel of three (3) arbitrators, in accordance with the Rules
of the American Arbitration Association (AAA). The foregoing shall apply
without limitation to any dispute regarding the scope of this Agreement and/or
the jurisdiction of the arbitrators.
Any demand for arbitration shall contain a statement setting forth
the nature of the dispute, the amount involved, if any, and the remedies
sought.
The arbitrators shall have authority to assess damages sustained by
reason of any breach or wrongful termination of this Agreement. The parties
shall share equally all expenses of the arbitration and the AAA and each Party
shall bear its own expenses incident to the arbitration.
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The arbitrators shall not extend, modify or suspend any of the
terms of this Agreement or the reasonable standards of business performance set
forth by a Party in good faith. A demand for arbitration shall not operate to
stay or postpone the effective date of any termination, and the Parties will be
relegated to their remedy and damages for wrongful termination as determined by
the arbitrators. The decision of the arbitrators within the scope of this
submission shall be final and binding on all Parties and any right of judicial
action on any matter subject to arbitration hereunder is hereby waived. The
resolution of the arbitrators shall be final and binding upon both Parties and
may be enforced by any judicial court having jurisdiction.
Nothing in this Section 12.11 shall preclude either Party from
petitioning a court for and obtaining specific performance and/or injunctive
relief. In addition, any Party shall have the right to sue in court to enforce
the arbitration award. This Section 12.11 shall survive any termination of
this Agreement.
SECTION 12.12. BULK TRANSFER MATTERS.
The Parties agree that no bulk transfer laws are applicable to the
transactions contemplated herein. NCS shall indemnify Circle K for any damages
attributable to the failure by NCS to comply with the provisions of any
applicable bulk sales act or bulk transfer act.
SECTION 12.13. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which shall together
constitute one and the same agreement.
SECTION 12.14. COSTS.
If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged breach or default
relating to this Agreement, the prevailing Party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in such action or
proceeding, in addition to any other relief to which it may be entitled.
SECTION 12.15. PUBLIC STATEMENTS.
Except for such announcements and statements as are required by law
or applicable rule or regulations, the Parties hereto agree to obtain the
consent of each other prior to issuing any public announcement or statement
with respect to the transactions contemplated herein.
SECTION 12.16. TIME.
Time is of the essence as to this Agreement.
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SECTION 12.17. SEVERABILITY.
If any term or provision hereof is void, illegal or unenforceable,
said voidness, illegality or unenforceability shall not affect or impair the
remaining terms and provisions hereof which shall be enforced as if said void,
illegal or unenforceable term or provision was not set forth herein.
SECTION 12.18. EXHIBITS AND SCHEDULES.
The Exhibits and Schedules attached hereto are incorporated herein
by reference for all purposes.
SECTION 12.19. DELIVERY OF WRITTEN MATERIALS.
Not later than ten (10) Days after the Closing Date, NCS shall
provide to Circle K all notices, documents and other materials in its
possession that relate in any manner whatsoever to the Assets to be transferred
to Circle K. NCS shall also deliver to Circle K promptly upon receipt any such
materials thereafter received by NCS. NCS may keep copies of any such
materials if it desires to do so.
SECTION 12.20. MET LIFE LEASEBACK STORES.
NCS and Metropolitan Life Insurance Company have entered into an
Indemnification and Agreement (the "Met Life Agreement") dated April 12, 1989
pertaining to NCS Store Nos. 0082, 0704, 0728, 1035, 1960, 2077, 2085, 2094,
2323, 2331, and 2383. NCS shall timely perform its obligations under the terms
of the Met Life Agreement and reserves the right to enter upon such Leased Land
to perform such obligations. NCS shall not unreasonably interfere with Circle
K's operation of its business at such Leased Stores.
SECTION 12.21. USE OF TRADENAME AND SERVICEMARKS.
NCS, as the owner of all right, title and interest in and to the
tradenames and servicemarks "Kelli's Deli," "Copilot," "Super Copilot," "Fresh
Express," "Neighborstore," "Stop N Go," and "National Convenience Stores"
hereby agrees that for a period of ninety (90) Days after the Closing Date
Circle K shall have a limited, nontransferable, royalty-free right to use such
tradenames and servicemarks solely in connection with Circle K's operation of
the Stores, including the right to sell any items of Inventory bearing any such
tradenames and servicemarks in the ordinary course of business, and for no
other purpose whatsover. In the event Circle K fails to operate the Stores in
a manner consistent with good industry standards and practices, NCS, in its
sole discretion, after notice to Circle K of the unacceptable practice and the
failure of Circle K to cure the same within three (3) Business Days after
receipt of such notice, may revoke the limited right to use the foregoing
tradenames and servicemarks granted herein. Immediately after the Closing
Date, Circle K shall diligently proceed with the
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dismantling of signage and the removal of other materials at Circle K's
expense, and shall complete such dismantling and the removal of other materials
within ninety (90) Days after the Closing Date, and NCS may, at NCS's expense,
remove such signage (excluding the sign holders) and other materials from
Stores within fifteen (15) Days thereafter. If NCS fails to remove such
signage and other materials at the expiration of fifteen (15) Days, the signage
and other materials shall be deemed to be abandoned and Circle K may deal with
or dispose of them as Circle K deems appropriate at Circle K's sole expense.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be executed as of the date first stated above by their duly authorized
representatives, to be effective as of the Effective Date.
NATIONAL CONVENIENCE STORES THE CIRCLE K CORPORATION
INCORPORATED
By:___________________________ By:____________________________
Title:________________________ Title:_________________________
NCS REALTY COMPANY CIRCLE K PROPERTIES, INC.
By:__________________________ By:_____________________________
Title:_______________________ Title:__________________________
STOP N GO MARKETS OF
GEORGIA, INC.
By:________________________________________
Title:_____________________________________
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AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
This Amendment No. 1 dated as of April 29, 1994 ("Amendment") to the
Asset Purchase Agreement dated as of April 20, 1994 ("Agreement") is by and
among National Convenience Stores Incorporated, a Delaware corporation, NCS
Realty Company, a Texas corporation, and Stop N Go Markets of Georgia, Inc., a
Georgia corporation, (hereinafter, collectively, "NCS") whose principal address
is 100 Waugh Drive, Houston, Texas 77007, and The Circle K Corporation, a Texas
corporation, and Circle K Properties, Inc., a Delaware corporation,
(hereinafter, collectively, "Circle K") whose principal address is Phoenix
Corporate Center, Suite 1800, 3003 North Central Avenue, Phoenix, Arizona
85012.
INTRODUCTION
On April 20, 1994, NCS and Circle K entered into the Agreement, which
provides for the acquisition by Circle K of certain assets of NCS. NCS and
Circle K now desire to amend certain provisions of the Agreement. Accordingly,
in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, NCS and Circle K have
agreed as follows:
1. AMENDMENT OF AGREEMENT
1.1 NCS Store No. 202. The Agreement is hereby amended by the
addition of Section 12.22, which shall provide:
"12.22 Amended Right of Way Easement. NCS shall use its best
effort to obtain a corrected right of way easement granted to Southern
Bell Telephone but executed by a NCS Entity not in the chain of title
for Store No. 202. NCS shall provide Circle K an amended easement for
execution."
1.2 NCS Store No. 715 (Adjacent Property). The Agreement is hereby
amended by the addition of Section 12.23, which shall provide:
"12.23 NCS Title Corrective Matters. NCS shall cause the
title curative work to be performed which are necessary in order for
NCS to deliver to Circle K an Owners Title Policy for Store No. 715
(Adjacent Property) in accordance with the terms of the Agreement, and
NCS shall deliver such Policy to Circle K within 60 days of the
Closing Date."
1.3 NCS Store No. 2077. The Agreement is hereby amended by the
addition of Section 12.24, which shall provide:
"12.24 Consent to Letter Agreement. NCS agrees to use its best
effort to obtain a consent letter to allow NCS to assign an existing
Letter Agreement to Circle K which covers a fence encroachment on the
adjacent property. In lieu of a Consent Letter, NCS may provide a new
Letter Agreement to be executed by Circle K."
<PAGE> 42
1.4 Amendment to Exhibit E. Exhibit F to Exhibit E of the Agreement
is hereby deleted in its entirety and Exhibit A hereto is substituted therefor.
1.5 Amendment to Schedule 1.1(r). Schedule 1.1(r) of the Agreement
is hereby deleted in its entirety and Exhibit A hereto is substituted therefor.
2. MISCELLANEOUS
2.1 Continued Validity. Except as modified hereby, all terms and
conditions of the Agreement shall remain in full force and effect.
2.2 Usage. Capitalized terms used in this Amendment and which are not
defined herein shall have the meanings ascribed to them in the Agreement.
2.3 Headings. The headings and titles to the Articles, Sections and
Subsections of this Amendment are inserted for convenience only and shall
neither be deemed a part hereof nor affect the construction or interpretation
of any provision hereof.
2.4 Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of such
counterparts together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
NATIONAL CONVENIENCE STORES THE CIRCLE K CORPORATION
INCORPORATED
By: /s/ C.R. Wortham, Jr. By: /s/ Philip W. Tomczyk
C.R. Wortham, Jr. Philip W. Tomczyk
Vice President Senior Vice President --
Gasoline and Store Development
NCS REALTY COMPANY CIRCLE K PROPERTIES, INC.
By: /s/ C.R. Wortham, Jr. By: /s/ Philip W. Tomczyk
C.R. Wortham, Jr. Philip W. Tomczyk
Vice President Vice President
STOP N GO MARKETS OF GEORGIA, INC.
By: /s/ C.R. Wortham, Jr.
C.R. Wortham, Jr.
Vice President
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