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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended JANUARY 31, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-8059
GETTY REALTY CORP.
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(Exact name of registrant as specified in its charter)
Delaware 11-2232705
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
125 Jericho Turnpike, Jericho, New York 11753
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 516-338-2600
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange on
Title of each class which registered
- ---------------------------- ------------------------
Common stock, $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act:
None
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(Title of Class)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates (7,120,297
shares) of the Company was $119,264,975 as of April 22, 1997.
The registrant had outstanding 12,871,705 shares of common stock as of April
22, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
Document Part of Form 10-K
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<S> <C>
Annual Report to Stockholders for the fiscal year
ended January 31, 1997 (the "Annual Report")
(pages 17 through 36). II
Definitive Proxy Statement for the 1997 Annual Meeting of
Stockholders (the "Proxy Statement") which will be filed
by the registrant on or prior to 120 days following the
end of the registrant's fiscal year ended January 31, 1997
pursuant to Regulation 14A. III
</TABLE>
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PART I
Item 1. Business
General
Prior to the spin-off of its petroleum marketing business on March 21, 1997 (as
described below), Getty Realty Corp., known prior to March 31, 1997 as Getty
Petroleum Corp., (hereinafter, together with its subsidiaries, called "Getty"
or the "Company") was one of the nation's largest independent marketers of
petroleum products. The Company served retail and wholesale customers through
a distribution and marketing network of 1,560 Getty(R) and other branded retail
outlets (also referred to as service stations) located in 12 Northeastern and
Middle Atlantic states, of which approximately 30% have convenience food
stores. The Company stored and distributed petroleum products from 18
distribution terminals and bulk plants. The Company purchased gasoline, fuel
oil and related petroleum products from a number of Northeast suppliers. These
products were delivered by cargo ship, barge, pipeline and truck to the
Company's distribution terminals and bulk plants located in the Company's
marketing region. Through its truck transportation fleet of 141 vehicles and
its distribution network, the Company marketed and distributed such products
throughout its 12 state region. Of the 1,560 retail outlets supplied by the
Company at January 31, 1997, approximately 70% are owned by the Company in fee
or held under long-term leases. The remaining retail outlets purchased
petroleum products from the Company under contract as licensed Getty dealers or
from licensed Getty distributors who purchased Getty products from the Company.
The Company also sold on a wholesale basis gasoline, fuel oil, diesel fuel and
kerosene from distribution terminals and bulk plants in truckload and barge
quantities and sold fuel oil, kerosene and propane to residential, commercial
and governmental customers in Maryland, Pennsylvania and upstate New York.
On March 13, 1996, the Company announced that, subject to approval from the
Internal Revenue Service, it intended to spin-off its petroleum marketing
business to its stockholders on a tax-free basis. On March 21, 1997, the
Company effected the spin-off (the "spin-off") of its petroleum marketing
business to its stockholders, and stockholders of record on that date received
a tax-free dividend of one share of Marketing (as defined below) common stock
for each share of common stock of the Company. The Company retained its real
estate business and leased most of its properties on a long-term net basis to
the distributed company, which is named Getty Petroleum Marketing Inc.
("Marketing"), and the Company will be principally engaged in the ownership and
management of real estate. The Company also retained the Pennyslvania and
Maryland home heating oil business. The Company transferred to Marketing the
assets and liabilities of the petroleum marketing business and the New York
Mid-Hudson Valley home heating oil business. For additional information
regarding the spin-off, see Note 13 to the accompanying consolidated financial
statements.
The Company and its predecessors have been in the petroleum marketing business
for over 40 years. Mr. Leo Liebowitz, President and Chief Executive Officer
and a director of the
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Company, and Mr. Milton Safenowitz, a director and former Executive Vice
President of the
Company, founded the business in 1955 with one service station and have pursued
a strategy of expanding the business principally through acquisitions. Prior
to 1985, the Company had expanded into five states under various brand names,
principally Power Test. On February 1, 1985, the Company acquired the
marketing and distribution assets of Getty Oil Company in the Northeastern and
Middle Atlantic states from a subsidiary of Texaco Inc. The Getty acquisition
added service stations, distribution terminals and a wholesale heating oil and
middle distillate marketing network in six additional states. Since 1985, the
Company's operations expanded to a marketing region encompassing 12
Northeastern and Middle Atlantic states through additional acquisitions of
numerous small regional distributors, service stations and convenience food
stores. In addition to adding locations through fee ownership and leasing, the
Company continued to implement its program of adding non-petroleum products and
revenue enhancing services at retail outlets in its marketing network,
particularly convenience food stores, automotive repairs and car washes.
Commencing in 1992, the Company implemented a comprehensive program of
evaluating retail outlets to determine the long-term viability of certain
locations as gasoline stations. Over the last five years, this process
resulted in the divestment of non-strategic and uneconomic retail outlets.
Operating Strategy
Prior to the spin-off, the Company's operating strategy was to market motor
fuels through service stations operated by independent Getty licensed dealers
who lease or sublease the Company's service stations. Such dealers would
either buy their petroleum products from the Company or from licensed Getty
distributors who purchased Getty products from the Company, or sold the
Company's petroleum products and received a commission. The Company viewed
each of its retail outlets as a "profit center" and believed that independent
operators, with greater financial incentive than salaried employees, generally
operated retail outlets more economically. Moreover, the leasing and
subleasing of retail outlets to independent operators provided the Company with
a steady and increasing source of rental income and has enabled the Company to
reduce its direct operating costs.
The Company directly operated two retail outlets at January 31, 1997, utilizing
salaried employees. While the Company sought to lease or sublease retail
outlets to independent operators, it has historically retained a certain number
of such company operated outlets. These outlets permitted management to keep
abreast of changes in retail marketing, to assist in providing practical
guidance to independent dealers and to test new products and concepts. After
the spin-off, these outlets will be operated by Marketing.
Certain of the outlets have convenience food stores, automotive repair centers
and car washes. Getty received higher rentals from such properties as a result
of such additional uses.
As a result of the spin-off, the Company is now an independent real estate
company which will
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utilize its skills and knowledge of the petroleum industry to make acquisitions
and enter into lease transactions nationwide. It will no longer be constrained
by Marketing's regional presence and petroleum marketing infrastructure. The
Company intends to specialize in the ownership of properties in the petroleum
industry since it has substantial knowledge and expertise in this industry.
Distribution and Real Estate
The retail outlets sell gasoline, diesel fuel and other related petroleum
products (such as motor oil and lubricants) under the Company's proprietary
brand name, Getty, or, to a limited extent, under other brand names, in the
states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia.
At January 31, 1997, the Company had 1,560 Getty and other branded retail
outlets as follows:
(i) 2 Company operated retail outlets which are operated by salaried
employees;
(ii) 250 lessee dealer operated retail outlets (dealers who lease or sublease
retail outlets and purchase their petroleum products from the Company);
(iii) 683 commission lessee dealer operated retail outlets (dealers who lease
or sublease retail outlets and receive a commission for sale of Company owned
petroleum products);
(iv) 93 retail outlets operated by management contractors (dealers who operate
the Company's retail outlets pursuant to a management contract);
(v) 108 contract dealer retail outlets (dealers who purchase their petroleum
products from the Company or sell the Company's petroleum products on a
commission basis but do not lease or sublease retail outlets from the Company);
and
(vi) 34 distributors who purchase their petroleum products from the Company,
which distributors in turn supply the petroleum product requirements of 424
retail outlets.
After the spin-off, Marketing will be responsible for operating the retail
outlets previously operated by the Company, for selling petroleum products to
dealers and distributors and for sub-leasing retail outlets to dealers.
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The table below summarizes the aggregate additions and deletions to the number
of retail outlets during each of the three fiscal years ended January 31, 1997:
<TABLE>
<CAPTION>
Retail Outlets Retail Outlets
at Beginning at End
Fiscal Year of Period Additions Deletions of Period
- ----------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C>
1997 1,625 7 72 1,560(a)
1996 1,751 7 133 1,625
1995 1,865 8 122 1,751
</TABLE>
(a) Includes 283 retail outlets operated by Uni-Marts, Inc., of which 111 are
leased from the Company. See Note 5 to the accompanying consolidated financial
statements.
Prior to the spin-off, the Company had generally extended three-year lease
terms to its dealers, except for new dealers, who generally received a one year
trial lease. Such leases provided for fixed and variable rentals at
competitive rates. In addition, most leases provided for an additional rental
if the dealer failed to sell certain minimum quantities of gasoline during a
month. The lessee of a retail outlet was generally responsible for payment of
utilities and for all maintenance and repairs, except for structural and
marketing equipment repairs and capital improvements, which were performed by
the Company.
Getty distributed its petroleum products from 18 distribution terminals and
bulk plants which are Company controlled either through fee ownership or
long-term leases and utilized additional terminals pursuant to thruput and
storage agreements with unrelated parties. A substantial portion of the
petroleum products were transported to retail outlets by the Company's truck
transportation fleet, whose drivers were compensated in part on an
incentive-based system.
In connection with the spin-off, the Company and Marketing entered into a
Master Lease Agreement (the "Master Lease") with respect to 1,034 service
station and convenience store properties and 10 distribution terminals and bulk
plants (including those properties leased by the Company from Power Test Realty
Company Limited Partnership (the "Operating Partnership")). The initial term
of the Master Lease is 15 years (or periods ranging from one to fifteen years
with respect to approximately 400 properties leased by Getty from third parties
other than the Operating Partnership), and generally provides Marketing with
four ten-year renewal options (or with respect to such leased properties, such
shorter period as the underlying lease may provide). The Master Lease is a
"triple-net" lease, so Marketing is responsible for the cost of all taxes,
maintenance, repairs, insurance and other operating expenses. Rent for each of
the properties was set using the fair market value of each such property,
assuming certain environmental conditions for which the Company is responsible.
The Company anticipates that it will receive, on an annual basis, net lease
payments from Marketing aggregating approximately $57 million commencing in the
fiscal year ending January 31, 1998.
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As of January 31, 1997, the Company had 84 additional properties, most of which
are leased for non-petroleum use. The Company also had 25 properties being
held for disposition.
Certain of the Company's properties mentioned above have 144 tenants who do not
sell the Company's petroleum products.
During the year ended January 31, 1997, the Company sold heating oil, propane
(LPG) and related services directly to approximately 52,300 retail and
commercial customers. In addition, the Company was a wholesale supplier of #2
heating oil in the Northeast, supplying heating oil to dealers who deliver to
residences and commercial accounts. Diesel fuel and kerosene were marketed
both to distributors of such products and directly by the Company to retail
outlets and consumers. After the spin-off, the Company will retain its home
heating oil business in Pennsylvania and Maryland.
Product Supply
The Company has agreements with a number of Northeast and Mid-Atlantic
suppliers, replacing the previous supply agreement with Phibro Energy USA, Inc.
which was phased out through August 31, 1995. These agreements typically have
one-year terms, and prices under the agreements are generally based on formulas
which are tied to the New York Harbor price for the petroleum product being
purchased. These agreements were assigned to Marketing prior to the spin-off.
The Company had no crude oil reserves or refining capacity.
Marketing
In order to provide efficient service to retail dealers and other customers,
the Company's motor fuel marketing operations were divided into four marketing
regions. The Company's regional marketing personnel provided significant
guidance, counseling and assistance to the Company's dealers, including advice
on retail operations. The marketing personnel also supervised the Company
operated retail outlets.
The Company provided advertising and promotional support to its retail outlets.
Both radio and newspaper media were utilized, and promotional programs were
continuously implemented.
The Company had a cobranded Getty MasterCard, and its retal outlets generally
accepted Visa, MasterCard, Discover, Diners Club and American Express credit
cards, and "NYCE" and "MAC" debit cards. In addition, the Company had a Getty
fleet fueling card and its retail outlets generally accepted certain other
fleet fueling cards, which have tracking programs that provide cost control
data to fleet customers.
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Competition
The Company believes that, based on the number of locations served, it has been
one of the largest independent marketers of petroleum products in the United
States. Petroleum marketing is highly competitive, and the Company competed
with a substantial number of integrated oil companies and other companies who
may have had greater assets, financial resources and sales. Accordingly, the
Company's earnings may have been adversely affected by the marketing policies
of such companies, which may have had greater flexibility to withstand price
changes than the Company. The Company competed for new dealers and
distributors primarily on the basis of Getty brand acceptance, location,
supply, price and marketing support. The retail outlets in the Company's
marketing network competed primarily on the basis of Getty brand acceptance,
location, customer service, appearance of the retail outlet and price. The
Company also competes with petroleum companies, distributors and other real
estate owners and developers for new locations and for the renewal of expiring
leases.
Regulation
The petroleum products industry is subject to numerous federal, state and local
laws and regulations. Although the costs related to compliance with those laws
and regulations have not had and are not expected to have a material adverse
effect on the competitive or financial position of the Company, such costs may
have a significant impact on results of operations or liquidity for any single
fiscal year or interim period.
The Company is not, and has not been, a refiner and, therefore, has not been
subject to the Petroleum Marketing Practices Act ("PMPA"), a federal law, with
respect to its Getty branded stations. However, pursuant to the Company's
agreements with approximately one-half of its Getty dealers and distributors,
the Company voluntarily extended to them coverage under PMPA. Under PMPA, the
Company complied with certain notice requirements (generally 90 days) and
extended nondiscriminatory contracts to certain of its Getty licensed dealers
and distributors, whose franchises could not be terminated or not renewed
unless certain PMPA-imposed prerequisites were met as provided in the Company's
agreements. Although a licensed dealer or distributor who is covered by PMPA
is not required to renew his or her franchise, because the Company has agreed
to comply with PMPA with respect to such dealers or distributors, the Company
was required to renew the franchises of such dealers and distributors who elect
to renew. However, franchisees could be terminated or not renewed for
violating certain provisions of the Company's agreements as permitted under
PMPA. The PMPA permitted grounds for termination or non-renewal included,
among other things, non- payment of rent, misuse of trademark, bankruptcy,
criminal misconduct, condemnation and expiration of an underlying lease. Also,
the Company could elect to non-renew with a franchisee upon a determination
made in good faith that the franchise relationship was uneconomical to the
Company. In such latter instance, the Company was required, in accordance with
PMPA, to offer to the franchisee the right to purchase the Company's leasehold
interest in the property at a bona fide price.
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In addition, the Company's operations have been governed by numerous federal,
state and local environmental laws and regulations. These laws have included
(i) requirements to dispense reformulated gasoline in accordance with the Clean
Air Act, (ii) restrictions imposed on the amount of hydrocarbon vapors which
may enter the air at the Company's terminals and service stations, (iii) OSHA
and other laws regulating terminal employee exposure to benzene and other
hazardous materials, (iv) requirements to report to governmental authorities
discharges of petroleum products into the environment and, under certain
circumstances, to remediate the soil and/or groundwater contamination pursuant
to governmental order and directive, (v) requirements to remove and replace
underground storage tanks which have exceeded governmental-mandated age
limitations and (vi) the requirement to provide a certificate of financial
responsibility with respect to claims relating to underground storage tank
failures.
Environmental expenses have been attributable to remediation, monitoring, soil
disposal and governmental agency reporting (collectively, "Remediation Costs")
incurred in connection with contaminated sites and the replacement or upgrading
of underground storage tanks, related piping, underground pumps, wiring and
monitoring devices (collectively, "USTs") to meet federal, state and local
environmental standards, as well as routine monitoring and tank testing. Under
the Master Lease, the Company committed to a program to bring the leased
properties to regulatory closure and, thereafter, transfer all future
environmental risks from the Company to Marketing. In order to establish the
Remediation Costs obligation and estimate the incremental cost of accelerated
remediation, the Company commissioned a detailed property-by-property
environmental study of all retail outlets, with the objective of achieving
closure in aproximately five years. As a result, the Company revised its
estimate of future Remediation Costs in the fourth quarter of fiscal 1997 and
recorded a pre-tax charge in such quarter for Remediation Costs of $21.2
million. The pre-tax charge resulted from the acceleration of remediation
activities to be paid by the Company through more aggressive means of treating
contaiminated sites to bring them to closure in approximately five years, which
resulted in significant incremental Remediation Costs, changes in estimated
Remediation Costs at previously identified properties, including costs to be
incurred in connection with UST upgrades, and additional charges to comply with
AICPA Statement of Position 96-1, "Environmental Remediation Liabilities".
The Company believes that it is in substantial compliance with federal, state
and local provisions enacted or adopted pertaining to environmental matters.
Although the Company is unable to predict what legislation or regulations may
be adopted in the future with respect to environmental protection and waste
disposal, existing legislation and regulations have had no material adverse
effect on its competitive position. See "Item 3. Legal Proceedings".
Personnel
As of January 31, 1997, the Company had 673 employees, of which 293 employees,
consisting of truck drivers and service technicians, were represented by
Amalgamated Local Union 355. Subsequent to the spin-off, the Company has 152
employees, 77 of whom are members of Amalgamated Local Union 355. The Company
considers its relationships with its employees
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and the union to be satisfactory.
Item 2. Properties
The properties owned in fee or leased by the Company for each of the five
fiscal years ended January 31, 1997 are as follows:
<TABLE>
<CAPTION>
January 31,
--------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Owned 441 439 444 457 465
Leased 732 734 752 772 791
----- ----- ----- ----- -----
Total 1,173 1,173 1,196 1,229 1,256
===== ===== ===== ===== =====
</TABLE>
The Company had a continuous upgrading program to enhance the physical
appearance of Getty retail outlets which becomes the responsibility of
Marketing after the spin-off.
As of January 31, 1997, the Company also owned in fee 10 distribution terminals
and bulk plants and leased 8 distribution terminals and bulk plants (on a
long-term net lease basis) located in New York, New Jersey, Rhode Island,
Pennsylvania, Connecticut and Maryland. The terminals and bulk plants owned or
leased by the Company have an aggregate storage capacity of approximately 59
million gallons. The terminals located in East Providence (Rhode Island) and
Rensselaer (New York) are deep-water terminals, capable of handling large
vessels. Some of the Company's terminals have excess capacity and land that
could be developed or adapted to handle products, such as residual fuel, jet
fuel and lube blending.
As of January 31, 1997, the Company leased 291 service stations and 5
distribution terminals on a long-term basis from Power Test Realty Company
Limited Partnership (the "Partnership"). The sole limited partner of the
Partnership is Power Test Investors Limited Partnership ("PTILP"), which was
created in 1985 pursuant to a rights offering to all of the Company's then
existing stockholders. The general partner of the Partnership and PTILP is CLS
General Partnership Corp. ("CLS"), which manages the Partnership and PTILP.
CLS is wholly owned by Messrs. Leo Liebowitz, Milton Safenowitz and Milton
Cooper, the principal stockholders of the Company, who as of January 31, 1997
collectively owned 48% of PTILP. The Company does not have any ownership
interest in the Partnership or CLS, and does not have any ownership interest or
option to purchase the Partnership's property, except for properties that the
Company has determined have become uneconomical or unsuitable for the Company's
use. In the event the Company makes such a determination, it must either (i)
purchase the property from the Partnership for a sum equal to the greater of
(x) the product of the annual rent then in effect multiplied by eleven or (y)
110% of the appraised fair market value of the property considered as
encumbered by the lease or (ii) direct the Partnership to sell such property to
a
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third party at a price negotiated by the Company, in which case the Company
receives from the Partnership the amount, if any, by which the negotiated price
exceeds the price determined by the above formula or pays any deficiency to the
Partnership. Each of the leases of the service stations and the distribution
terminals with the Partnership has an initial term of 15 years, expiring on
January 31, 2000. The Company has the option to extend these leases for up to
five consecutive terms of ten years each. During the fiscal years ended
January 31, 1997, 1996 and 1995, the Company received from the Partnership
$672,000, $648,000 and $624,000, respectively, for administrative and other
services rendered to the Partnership and paid rent to the Partnership during
such fiscal years of $10,061,000, $10,553,000 and $10,925,000, respectively.
In addition, during the fiscal years ended January 31, 1997, 1996 and 1995, the
Company paid an additional sum of $580,470, $4,938,000 and $1,039,000,
respectively, for properties purchased.
The Company leases approximately 30,500 square feet of office space at 125
Jericho Turnpike, Jericho, New York where it currently maintains its corporate
headquarters, most of which has been subleased to Marketing.
The Company believes that substantially all of its owned and leased properties
are in good condition.
For a description of the Company's lease arrangements with Marketing after the
spin-off, see discussion above under the caption "Distribution and Real
Estate".
Item 3. Legal Proceedings
(a) Information in response to this item is incorporated herein by reference
from Note 5 of the Notes to Consolidated Financial Statements set forth on page
28 of the Annual Report.
The State of New York has brought an action against the Company for an alleged
underground discharge of petroleum products at a certain service station. The
action was filed in 1986 in New York State Supreme Court in Albany County. The
State was seeking reimbursement for cleanup costs, interest and penalties for
the alleged discharge. Most of any possible compensatory damages relating to
cleanup activities and any reimbursement to the State arising out of this case
is covered by liability insurance.
In 1990, the State of New York brought an action in the New York State Supreme
Court in Albany County seeking reimbursement for cleanup costs against the
Company and two other petroleum companies arising from an alleged 1984 spill of
gasoline. In addition to cleanup costs of $450,000 as of December 1996,
together with future cleanup costs of about $25,000, the State is seeking
penalties of $500,000 and interest. In November 1996, the Company was
dismissed from the lawsuit with the State's consent.
In 1991, the State of New York brought an action in the New York State Supreme
Court in Albany County against one of the Company's former subsidiaries seeking
reimbursement in the
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amount of $189,000 for cleanup costs incurred at a service station. The State
is also seeking penalties of $200,000 and interest. There has been no activity
in this proceeding in the past several years.
In 1992, the State of New York asserted a claim for reimbursement of cleanup
costs against the Company and another petroleum company, in the amount of
$121,000, together with statutory penalties of $100,000, pertaining to an
alleged spill at a service station in 1984. In 1996, the State of New York
brought an action in the New York State Supreme Court in Albany County against
the Company and the other petroleum company seeking cleanup costs of $209,000,
together with interest and penalties of $200,000.
In 1993, the State of New York asserted a claim against the Company for cleanup
costs incurred at a service station and for statutory penalties. In 1994, an
action was filed in New York State Supreme Court in Albany County to recover
$522,000 for cleanup costs and unspecified penalties and interest.
In 1994, a subsidiary of the Company was served with an Amended Complaint
naming the Company's subsidiary as one of many defendants in the Keystone
Superfund case pending in the U.S. District Court for the Middle District of
Pennsylvania, pertaining to the subsidiary's miscellaneous office refuse and
used furnace air and oil filters which were disposed of at the site. In 1995,
another subsidiary of the Company was brought into the same action pertaining
to convenience store refuse. The Company believes that its participation in
the cost of the cleanup at the site will be determined to be insignificant or
de minimis in nature and that its ultimate liability will be less than $50,000.
In December 1995, Pennsauken Solid Waste Management Authority, its
successor-in-interest, the Pollution Control Financing Authority of Camden
County and the Township of Pennsauken, New Jersey commenced an action for
unspecified amounts against certain defendants for all costs and damages
incurred for the remediation of the Pennsauken Sanitary Landfill. In November
1996, one of the defendants filed a third party complaint in the Superior Court
of New Jersey, Camden County, against its former customers, including a former
construction company subsidiary of the Company, seeking indeminification from
the third party defendants for all costs it incurred or will incur in response
to the release of hazardous substances in the landfill plus attorneys' fees.
The Company believes that the exposure is not material inasmuch as the
quantities of construction fill deposited at the waste site was small.
In 1996, the State of New York asseted a claim against the Company for
reimubrsement of cleanup costs incurred at a service station in the amount of
$291,000, together with statutory penalties of $150,000.
In 1996, the State of New York asserted a second claim against the Company for
reimbursement of cleanup costs incurred at a service station in the amount
$112,000, plus interest of approximately $24,000.
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In 1996, the State of New York asserted a third claim against the Company for
reimbursement of cleanup costs at a service station in the amount of $463,000,
plus interest of approximately $62,000.
In May 1996, a federal judge in the U.S. District Court for the Eastern
District of New York entered a judgment in the amount of $8.4 million, plus
interest of $2.7 million, in favor of Morrison-Knudsen Company, Inc. against
the Company's former construction company subsidiary, Slattery Associates,
Inc., which was sold in 1989. The case arose out of a joint venture between
Slattery Associates and Morrison-Knudsen which was established to reconstruct a
portion of an expressway in Philadelphia in 1986. The judgment represented
Slattery's share of joint venture construction costs which the Court were owed
by Slattery. Slattery had contended that Morrison-Knudsen had mismanaged the
project and had failed to disclose material facts. Slattery also had contended
that certain costs were improperly charged to the joint venture. During the
quarter ended April 30, 1996, the Company recorded a pre-tax charge of $7.5
million in addition to a previously established reserve of $3.6 million for a
total of $11.1 million related to the litigation. On November 29, 1996, the
case was settled for $9.2 million. Accordingly, during the quarter ended
October 31, 1996 the Company reversed into income $1.8 million of the
previously established reserve after related legal expenses. The resultant
nine month charge of $5.8 million related to this matter is included in other
income (expense) in the Company's consolidated statement of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the fourth quarter
of the Company's fiscal year ended January 31, 1997.
Executive Officers of Registrant
The following table lists the executive officers of the Company as of January
31, 1997, their respective ages, the offices and positions held with the
Company and the year in which each was elected an officer. Except for Messrs.
Liebowitz and Fitteron, all such persons resigned as officers of the Company on
March 21, 1997 and became executive officers of Marketing.
<TABLE>
<CAPTION>
Name Age Position Officer Since
---- --- -------- -------------
<S> <C> <C> <C>
Leo Liebowitz 69 President and Chief Executive
Officer 1971
John J. Fitteron 55 Senior Vice President, Treasurer
and Chief Financial Officer 1986
Alvin A. Smith 58 Senior Vice President and
Chief Operating Officer 1985
James R. Craig 45 Vice President - Marketing 1987
Michael K. Hantman 45 Vice President and
Corporate Controller 1988
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Samuel M. Jones 60 Vice President, Corporate
Secretary and General Counsel 1986
</TABLE>
Mr. Liebowitz has been President and Chief Executive Officer and a director of
the Company since 1971. He is also the President, Chief Executive Officer and
a director of Marketing. He has also served as the President and a director of
CLS General Partnership Corp. since 1985. He is also a director of the
Regional Banking Advisory Board of Chase Manhattan Corp.
Mr. Fitteron joined the Company in 1986 as Senior Vice President and Chief
Financial Officer and assumed the additional position of Treasurer in 1994.
Prior to joining Getty, he was a Senior Vice President at Beker Industries
Corp., a chemical and natural resource company.
Mr. Smith has been a Senior Vice President of the Company since 1985 and became
Chief Operating Officer in 1994. Prior thereto, he was employed at Getty Oil
Company as Wholesale Manager and Petroleum Manager.
Mr. Craig became a Vice President of the Company in 1987. He joined the
Company in 1982 as a District Manager and became Manager - Retail Sales in
1984. Prior to joining Getty, he was a Regional Manager of Amerada Hess Corp.
Mr. Hantman became a Vice President of the Company in 1991. He joined the
Company in 1985 as Corporate Controller. Prior to joining Getty, he was a
Principal at Arthur Young & Company, an international accounting firm.
Mr. Jones joined the Company in 1986 as Vice President and General Counsel and
assumed the additional position of Corporate Secretary in 1994. Prior to
joining Getty, he was a Senior Attorney with Texaco Inc.
Management is not aware of any family relationships among any of the foregoing
executive officers.
13
<PAGE> 14
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Information in response to this item is incorporated herein by reference from
material under the heading "Common Stock" on page 36 of the Annual Report.
Item 6. Selected Financial Data
Information in response to this item is incorporated herein by reference from
material under the heading "Selected Financial Data" on page 21 of the Annual
Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Information in response to this item is incorporated herein by reference from
material under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 17 through 21 of the Annual
Report.
Item 8. Financial Statements and Supplementary Data
Information in response to this item is incorporated herein by reference from
the financial information set forth on pages 22 through 36 of the Annual
Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
14
<PAGE> 15
PART III
Item 10. Directors and Executive Officers of the Registrant
Information with respect to directors in response to this item is incorporated
herein by reference from material under the headings "Election of Directors"
and "Compliance with Section 16(a) of the Securities Exchange Act of 1934" on
pages 3 and 5, and page 15, respectively, of the Proxy Statement.
Information regarding executive officers is included in Part I hereof.
Item 11. Executive Compensation
Information in response to this item is incorporated herein by reference from
material under the headings "Directors' Meetings, Committees and Executive
Officers" and "Compensation" through, and including the material under the
heading, "Compensation Committee Interlocks and Insider Participation" on pages
6 through 10 of the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information in response to this item is incorporated herein by reference from
material under the heading "Beneficial Ownership of Common Stock" on page 4 of
the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Information in response to this item is incorporated herein by reference from
material under the heading "Certain Transactions" on pages 12 and 13 of the
Proxy Statement.
15
<PAGE> 16
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial statements
The financial statements listed in the Index to Financial
Statements and Financial Statement Schedules on page 17 are filed
as part of this annual report.
2. Financial statement schedule
The financial statement schedule listed in the Index to
Financial Statements and Financial Statement Schedules on page 17
is filed as part of this annual report.
3. Exhibits
The exhibits listed in the Exhibit Index on pages 20 through 26
are filed as part of this annual report.
4. Reports on Form 8-K
Registrant filed a Current Report on Form 8-K dated March 13,
1997 reporting under Item 5, Other Events, that the Company had
set a record date of March 21, 1997 for the spin-off of its
petroleum marketing assets and business to its stockholders. The
Company also announced in the Form 8-K filing that it had revised
its estimate of future environmental remediation costs and that
in connection therewith it had recorded a $21.2 million pre-tax
charge in the fiscal fourth quarter ended January 31, 1997.
16
<PAGE> 17
GETTY REALTY CORP.
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS
Items 14(a) 1 & 2
<TABLE>
<CAPTION>
Reference
---------------------------
Form 10-K 1997 Annual
(pages) Report (pages)
---------------------------
<S> <C> <C>
Data incorporated by reference from attached
1997 Annual Report to Stockholders of Getty
Realty Corp.:
Report of Independent Accountants 36
Consolidated Statements of Operations for the
years ended January 31, 1997, 1996 and 1995 22
Consolidated Balance Sheets as of January 31,
1997 and 1996 23
Consolidated Statements of Cash Flows for the
years ended January 31, 1997, 1996 and 1995 24
Notes to Consolidated Financial Statements 25 - 35
Report of Independent Accountants - Supplemental Schedule 18
Schedule II - Valuation and Qualifying Accounts and
Reserves for the years ended January 31, 1997, 1996 and 1995 19
</TABLE>
All other schedules are omitted for the reason that they are either not
required, not applicable, not material or the information is included in the
consolidated financial statements or notes thereto.
The financial statements listed in the above index which are included in the
1997 Annual Report to Stockholders are hereby incorporated by reference. With
the exception of the pages listed in the above index and the information
incorporated by reference included in Part II, Items 5, 6, 7 and 8, the 1997
Annual Report to Stockholders is not deemed filed as part of this report.
17
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Getty Realty Corp.:
Our report on the consolidated financial statements of Getty Realty Corp.
(formerly known as Getty Petroleum Corp.) and Subsidiaries has been
incorporated by reference in this Form 10-K from page 36 of the 1997 Annual
Report to Stockholders of Getty Realty Corp. and Subsidiaries. In connection
with our audits of such financial statements, we have also audited the related
financial statement schedule listed in the index on page 17 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
New York, New York
March 13, 1997, except for Notes 10 and 13,
as to which the date is March 21, 1997.
18
<PAGE> 19
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended January 31, 1997, 1996 and 1995
(in thousands)
<TABLE>
<CAPTION>
Balance at Balance at
beginning end of
of period Additions Deductions period
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
1997:
Allowance for
doubtful accounts* $1,409 $485 $525 $1,369
====== ==== ==== ======
1996:
Allowance for
doubtful accounts* $1,509 $561 $661 $1,409
====== ==== ==== ======
1995:
Allowance for
doubtful accounts* $1,534 $385 $410 $1,509
====== ==== ==== ======
</TABLE>
*Relates to accounts receivable.
19
<PAGE> 20
EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the fiscal year ended January 31, 1997
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
3.1 Certificate of Incorporation. Filed as Exhibit 3.1 to registrant's
Registration Statement on Form S-1 filed on
June 23, 1971 (Registration No. 2-40881) and
incorporated herein by reference.
3.2 Certificate of Amendment of Filed as Exhibit B to registrant's Annual
Certificate of Incorporation, filed Report on Form 10-K for the fiscal year ended
July 22, 1977. January 31, 1978 (File No. 1-8059) and
incorporated herein by reference.
3.3 Certificate of Amendment of Filed as Exhibit 6.3 to Registration Statement
Certificate of Incorporation, filed on Form 8-A filed by the Company on July 19,
September 23, 1980. 1985 (File No. 1-8059) and incorporated herein
by reference.
3.4 Certificate of Amendment of Filed as Exhibit 6.4 to Registration Statement
Certificate of Incorporation, filed on Form 8-A filed by the Company on July 19,
June 24, 1985. 1985 (File No. 1-8059) and incorporated herein
by reference.
3.5 Certificate of Amendment of Filed as Exhibit 6.5 to Registration Statement
Certificate of Incorporation, filed on Form 8-A filed by the Company on July 19,
July 11, 1985. 1985 (File No. 1-8059) and incorporated herein
by reference.
</TABLE>
20
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
3.6 Certificate of Amendment of Filed as Exhibit A to registrant's definitive
Certificate of Incorporation. proxy statement, dated May 8, 1987, with
respect to its Annual Meeting of Stockholders
held June 18, 1987 and incorporated herein by
reference.
3.7 Certificate of Ownership and Merger *
Merging Getty Realty Corp. into Getty
Petroleum Corp. with subsequent name
change to Getty Realty Corp.
3.8 By-Laws. Filed as Exhibit 3.2 to registrant's
Registration Statement on Form S-1 filed on
June 23, 1971 (Registration No. 2-40881) and
incorporated herein by reference.
3.9 Amendment to By-Laws. Filed as Exhibit B to registrant's definitive
proxy statement, dated May 8, 1987, with
respect to its Annual Meeting of Stockholders
held June 18, 1987 and incorporated herein by
reference.
3.10 Amendment to By-Laws. Filed as Exhibit 3.9 to registrant's Quarterly
Report on Form 10-Q for the quarter ended
April 30, 1988 (File No. 1-8059) and
incorporated herein by reference.
</TABLE>
21
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit
No.
------- Description
-----------
<S> <C> <C>
4.7 $35,000,000 reducing revolving Loan Filed as Exhibit 4.7 to registrant's Quarterly
Agreement between Leemilt's Petroleum, Report on Form 10-Q for the quarter ended
Inc. and Bank of New England, N.A. October 31, 1987 (File No. 1-8059) and
dated as of December 7, 1987 and incorporated herein by reference.
related Guaranty Agreement, dated as
of December 7, 1987, by and between
Getty Petroleum Corp. (now known as
Getty Realty Corp.) and Bank of New
England, N.A.
4.8 Amended and Restated Loan Agreement *
between Leemilt's Petroleum, Inc. and
Fleet Bank of Massachusetts, N.A., as
successor to Bank of New England,
N.A., dated as of October 27, 1995.
10.2(b) Retirement and Profit Sharing Plan *
(amended and restated as of September
19, 1996).
10.3 Asset Purchase Agreement between Power Filed as Exhibit 2(a) to registrant's Current
Test Corp. (now known as Getty Realty Report on Form 8-K, filed February 19, 1985
Corp.) and Texaco Inc., Getty Oil (File No. 1-8059) and incorporated herein by
Company, and Getty Refining and reference.
Marketing Company, dated December 21,
1984.
10.4 Trademark License Agreement between Filed as Exhibit 2(b) to registrant's Current
Texaco Inc., Getty Oil Company, Texaco Report on Form 8-K, filed February 19, 1985
Refining and Marketing Inc., and Power (File No. 1-8059) and incorporated herein by
Test Corp. (now known as Getty Realty reference.
Corp.), dated February 1, 1985.
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit Description
No. -----------
---
<S> <C> <C>
10.7 Form of Real Property Leases between Filed as Exhibit 2(e) to registrant's Current
Power Test Realty Company Limited Report on Form 8-K, filed February 19, 1985
Partnership, as Lessor, and Power Test (File No. 1-8059) and incorporated herein by
Corp. (now known as Getty Realty reference.
Corp.) (either directly or indirectly
through a wholly-owned subsidiary), as
Lessee, each dated February 1, 1985.
10.16 Registrant's 1985 Stock Option Plan. Filed as Exhibit A to registrant's definitive
proxy statement, dated May 31, 1985, with
respect to its Annual Meeting of Stockholders
held June 20, 1985 and incorporated herein by
reference.
10.17 Hazardous Waste and PMPA *
Indemnification Agreement dated as of
October 31, 1995 among Getty Petroleum
Corp.(now known as Getty Realty
Corp.), Power Test Realty Company
Limited Partnership and Fleet Bank of
Massachusetts, N.A.
10.18 Guaranty Agreement dated as of Filed as Exhibit 10.18 to registrant's Annual
December 1, 1986 of Getty Petroleum Report on Form 10-K for the fiscal year ended
Corp. (now known as Getty Realty January 31, 1987 (File No. 1-8059) and
Corp.) (regarding distribution incorporated herein by reference.
terminal leases between Power Test
Realty Company Limited Partnership and
Getty Terminals Corp.
10.19 Form of Indemnification Agreement Filed as Exhibit C to registrant's definitive
between Getty Petroleum Corp. (now proxy statement, dated May 8, 1987, with
known as Getty Realty Corp.) and respect to its Annual Meeting of Stockholders
directors. held June 18, 1987 and incorporated herein by
reference.
</TABLE>
23
<PAGE> 24
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
10.20 Registrant's 1988 Stock Option Plan. Filed as Exhibit A to registrant's definitive
proxy statement, dated April 29, 1988, with
respect to its Annual Meeting of Stockholders
held June 16, 1988 and incorporated herein
by reference.
10.21 Milton Safenowitz Employment Agreement Filed as Exhibit 10.21 to registrant's Annual
dated February 1, 1990. Report on Form 10-K for the fiscal year ended
January 31, 1990 (File No. 1-8059) and
incorporated herein by reference.
10.22 Supplemental Retirement Plan for Filed as Exhibit 10.22 to registrant's Annual
Executives of Getty Petroleum Corp. Report on Form 10-K for the fiscal year ended
(now known as Getty Realty Corp.) and January 31, 1990 (File No. 1-8059) and
Participating Subsidiaries. incorporated herein by reference.
10.23 Form of Agreement dated as of December Filed as Exhibit 10.23 to registrant's
9, 1994 between the Company and its Annual Report on Form 10-K for the
non-director officers and certain key fiscal year ended January 31, 1995 (File
employees regarding compensation upon No. 1-8059) and incorporated herein by
change in control. reference.
10.24 Amendment to Milton Safenowitz Filed as Exhibit 10.24 to registrant's Annual
Employment Agreement dated February 1, Report on Form 10-K for the fiscal year ended
1990 (see Exhibit 10.21). January 31, 1991 (File No. 1-8059) and
incorporated herein by reference.
10.25 Registrant's Amended and Restated 1991 Filed as Exhibit 4.10 to registrant's
Stock Option Plan. Registration Statement on Form S-8 filed on
March 14, 1997 (Registration No. 333-23373)
and incorporated herein by reference.
</TABLE>
24
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
10.27 Form of Agreement dated as of March 7, Filed as Exhibit 10.27 to registrant's Annual
1996 amending Agreement dated as of Report on Form 10-K for the fiscal year ended
December 9, 1994 between the Company January 31, 1996 (File No. 1-8059) and
and its non-director officers and incorporated herein by reference.
certain key employees regarding
compensation upon change in control
(See Exhibit 10.23).
10.28 Form of Master Lease Agreement between *
Getty Petroleum Corp. (now known as
Getty Realty Corp.) and Getty
Petroleum Marketing Inc.
10.29 Form of Reorganization and *
Distribution Agreement between Getty
Petroleum Corp. (now known as Getty
Realty Corp.) and Getty Petroleum
Marketing Inc.
10.30 Form of Trademark License Agreement *
between Getty Petroleum Corp. (now
known as Getty Realty Corp.) and Getty
Petroleum Marketing Inc.
10.31 Form of Services Agreement between *
Getty Petroleum Corp. (now known as
Getty Realty Corp.) and Getty
Petroleum Marketing Inc.
10.32 Form of Tax Sharing Agreement between *
Getty Petroleum Corp. (now known as
Getty Realty Corp.) and Getty
Petroleum Marketing Inc.
</TABLE>
25
<PAGE> 26
<TABLE>
<CAPTION>
Exhibit
No. Description
--- -----------
<S> <C> <C>
10.33 Form of Stock Option Reformation *
Agreement between Getty Petroleum
Corp. (now known as Getty Realty
Corp.) and Getty Petroleum Marketing
Inc.
13 Annual Report to Stockholders for the *
fiscal year ended January 31, 1997.
22 Subsidiaries of the registrant. *
24 Consent of Independent Accountants. *
27 Financial Data Schedule. *
</TABLE>
_______________________
*Filed herewith
26
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Getty Realty Corp.
------------------
(Registrant)
By /s/ John J. Fitteron
---------------------
John J. Fitteron,
Senior Vice President,
Treasurer and Chief Financial
Officer (Principal Financial
Officer)
April 30, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By /s/ Leo Liebowitz By /s/ Milton Cooper
------------------------- ------------------
Leo Liebowitz, President, Milton Cooper,
Chief Executive Officer Director
and Director April 30, 1997
April 30, 1997
By /s/ Philip E. Coviello By /s/ Milton Safenowitz
---------------------- ---------------------
Philip E. Coviello, Milton Safenowitz,
Director Director
April 30, 1997 April 30, 1997
By /s/ Warren G. Wintrub
----------------------
Warren G. Wintrub,
Director
April 30, 1997
27
<PAGE> 1
EXHIBIT 3.7
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
GETTY REALTY CORP.
INTO
GETTY PETROLEUM CORP.
WITH SUBSEQUENT NAME CHANGE TO
GETTY REALTY CORP.
(PURSUANT TO SECTION 253 OF THE GENERAL
CORPORATION LAW OF DELAWARE)
Getty Petroleum Corp., a Delaware corporation (the "Corporation"), does
hereby certify:
FIRST: That the Corporation is incorporated pursuant to the General
Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the outstanding shares of each
class of the capital stock of Getty Realty Corp., a Delaware corporation.
THIRD: That the Corporation, by the following resolutions of its Board of
Directors, duly adopted on the 12th day of December, 1996, determined to merge
into itself Getty Realty Corp., on the conditions set forth in such resolutions:
RESOLVED, that the Corporation merge into itself its subsidiary, Getty
Realty Corp., and assume all of said subsidiary's liabilities and obligations;
FURTHER RESOLVED, that effective upon the merger of Getty Realty Corp. with
and into this Corporation, this Corporation shall change its name to "Getty
Realty Corp." and amend its Certificate of Incorporation so that Article 1 of
such Certificate of Incorporation shall read as follows:
"1. The name of the corporation is Getty Realty Corp.";
FURTHER RESOLVED, that the President and the Secretary of this Corporation
be and they hereby are directed to make, execute and acknowledge a certificate
of ownership and merger setting forth a copy of the resolutions to merge said
Getty Realty Corp. into this Corporation, to assume said subsidiary's
liabilities and obligations and to change the name of this Corporation to "Getty
Realty Corp." and the date of adoption thereof and to file the same in the
office of the Secretary of State of Delaware and a certified copy thereof in the
Office of the Recorder of Deeds of New Castle County and to do all acts and
things whatsoever, whether within or without the State of Delaware, that may be
in any way necessary or proper to effect such merger.
FOURTH: That this Certificate of Ownership and Merger shall be effective
on March 31, 1997.
<PAGE> 2
IN WITNESS WHEREOF, said Getty Petroleum Corp. has caused its corporate
seal to be affixed and this certificate to be signed by Samuel M. Jones, its
Vice President, and attested by Randi Young Filip, its Assistant Secretary, this
20th day of March, 1997.
GETTY PETROLEUM CORP.
By: /s/ Samuel M. Jones
--------------------
Vice President
ATTEST:
By: /s/ Randi Young Filip
-----------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 4.8
AMENDED AND RESTATED
LOAN AGREEMENT
between
LEEMILT'S PETROLEUM, INC.
and
FLEET BANK OF MASSACHUSETTS, N.A.
dated as of October 27, 1995
<PAGE> 2
LEEMILTS PETROLEUM, INC.
AMENDED AND RESTATED
LOAN AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS............................................. 1
SECTION 2. THE LOANS............................................... 8
2.1. The Loans............................................... 8
2.2. [Intentionally Deleted]................................. 8
2.3. The Master Note; Collateral Notes....................... 8
2.4. Interest on the Loans................................... 9
2.5. Conversion Options...................................... 10
2.6. Overdue Amounts......................................... 11
2.7. Mandatory Repayment..................................... 11
2.8. Optional Prepayment..................................... 11
2.9. Method of Computing Interest............................ 12
2.10. Place and Method of Payments............................ 12
2.11. Application of Payments................................. 12
2.12. Indemnity............................................... 12
2.13. Security; Guaranty...................................... 12
2.14. Release of Liens........................................ 12
2.15. Closing Fee............................................. 13
SECTION 3. REPRESENTATIONS AND WARRANTIES OF
THE BORROWER........................................ 13
3.1. Authority; Ownership.................................... 13
3.2. Title to Properties; Absence of Liens................... 14
3.3. No Default or Violation of Law.......................... 14
3.4. Environmental Compliance and
Storage Tank Regulations............................ 14
3.5. Enforceability of the Loan Documents.................... 16
3.6. Use of Proceeds......................................... 16
3.7. Financial Statements.................................... 16
3.8. No Material Changes..................................... 16
3.9. No Material Adverse Contracts, Etc...................... 17
3.10. Compliance With Other Instruments,
Laws, Etc........................................... 17
3.11. Governmental Approvals.................................. 17
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<S> <C> <C>
3.12. Taxes................................................... 17
3.13. Franchises, Copyrights, Etc............................. 18
3.14. Litigation.............................................. 18
3.15. No Events of Default, Etc............................... 18
3.16. Chief Executive Offices................................. 18
3.17. Collateral.............................................. 18
3.18. Leases.................................................. 19
3.19. True Copies of Charter Documents........................ 19
3.20. Guaranteed Pension Plans................................ 19
3.21. Disclosure.............................................. 19
3.22. Subsidiaries............................................ 19
SECTION 4. CONDITIONS OF LOANS..................................... 20
4.1. Conditions Precedent to the Loan........................ 20
SECTION 5. AFFIRMATIVE COVENANTS................................... 21
5.1. Punctual Payment........................................ 21
5.2. Conduct of Business..................................... 21
5.3. Compliance with Agreement and
Contracts........................................... 22
5.4. Insurance............................................... 22
5.5. Payment of Taxes........................................ 23
5.6. Compliance with Law..................................... 23
5.7. Notification of Material Litigation,
Default, Etc........................................ 23
5.8. Financial Statements, Certificates and
Other Information................................... 24
5.9. Notice of Material Change............................... 25
5.10. Inspection of Properties and Books...................... 25
5.11. ERISA................................................... 25
5.12. Change of Name.......................................... 25
5.13. Maintenance of Office................................... 26
5.14. Further Assurances...................................... 26
5.15. Collateral Notes........................................ 26
5.16. Flood Insurance......................................... 26
5.17. Environmental Events.................................... 26
5.18. Environmental Assessments............................... 27
SECTION 6. NEGATIVE COVENANTS...................................... 27
6.1. Liens................................................... 27
</TABLE>
-iii-
<PAGE> 4
<TABLE>
<S> <C> <C>
6.2. Merger, Sale of Assets and Termination
of Leases......................................... 28
6.3. Sale of Stations.......................................... 29
6.4. Compliance with Environmental Laws........................ 29
SECTION 7. EVENTS OF DEFAULT; ACCELERATION........................... 30
SECTION 8. REMEDIES ON DEFAULT, ETC.................................. 33
8.1. Foreclosure on Collateral................................. 33
8.2. Demand Under Guaranty Agreement........................... 33
8.3. Set-off................................................... 33
8.4. Pursue Other Remedies..................................... 34
SECTION 9. EXPENSES.................................................. 34
SECTION 10. NOTICE, ETC............................................... 34
SECTION 11. MISCELLANEOUS............................................. 35
SECTION 12. CONSENTS, AMENDMENTS, WAIVERS,
ACKNOWLEDGEMENTS, ETC.................................... 35
SCHEDULE I STATIONS
SCHEDULE 3.4 ENVIRONMENTAL COMPLIANCE
SCHEDULE 5.4 REQUIRED INSURANCE
EXHIBIT A MASTER NOTE
EXHIBIT B [INTENTIONALLY DELETED]
EXHIBIT C HAZARDOUS WASTE INDEMNIFICATION
AGREEMENT
EXHIBIT D FORM OF LEASE DOCUMENTS
EXHIBIT D-1 NON-GASOLINE SERVICE STATION LEASES
</TABLE>
-iv-
<PAGE> 5
LEEMILT'S PETROLEUM, INC.
AMENDED AND RESTATED
LOAN AGREEMENT
This Amended and Restated Loan Agreement (this "Loan Agreement") is
entered into as of the 27th day of October, 1995, by and between Leemilt's
Petroleum, Inc., a New York corporation (the "Borrower") having its principal
office at 125 Jericho Turnpike, Jericho, New York 11753 and Fleet Bank of
Massachusetts, N.A., a national banking association (the "Bank").
This Loan Agreement amends and restates, but is not in satisfaction or
cancellation of the underlying obligations under, or the promissory notes
referred to in, the Loan Agreement dated as of December 7, 1987 between the
Borrower and Bank of New England, N.A., (the "Original Loan Agreement"). The
Bank is the successor by name change to Fleet National Bank of Boston, which
was the successor in interest to the Federal Deposit Insurance Corporation, as
Receiver for New Bank of New England, N.A., which was the successor in interest
to the Federal Deposit Insurance Corporation, as Receiver for Bank of New
England, N.A. This Loan Agreement is secured by the Bank's mortgage liens and
security interests in property of the Borrower created pursuant to the
agreements and instruments executed and delivered by the Borrower in connection
with the Original Loan Agreement. This Loan Agreement shall in no way release,
impair or interrupt the continued perfection and priority of such mortgage
liens and security interests in favor of the Bank as collateral security for
the obligations of the Borrower hereunder. The Loans hereunder are in
continuance of, and not in satisfaction or cancellation of, the loans made to
the Borrower pursuant to the Original Loan Agreement.
Section 1. DEFINITIONS. (a) The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Agreement
referred to below:
Affiliate means any Person directly or indirectly, through one or more
intermediaries, controlling, controlled or under common control with any other
Person.
<PAGE> 6
Agreement means this Loan Agreement, including the Exhibits and
Schedules hereto, as originally executed, or, if this Loan Agreement is
amended, modified or supplemented, as so amended, modified or supplemented.
Appraised Value, with respect to any particular Station, means the
value of such Station, as set forth in an appraisal of the Station's real
estate, such appraisal to be in form, substance and methodology satisfactory to
the Bank and prepared by an independent appraiser approved by the Bank.
Appraised Value of Real Estate means the aggregate appraised value
attributed to the real estate constituting the Stations, as set forth in the
appraisal report of R.M. Bradley & Company to the Bank of New England, N.A.
dated November 23, 1987.
Approved Station means any Station in respect of which (a) the Bank has
received a survey satisfactory (i) to the Bank and (ii) to First American Title
Insurance Company, such that First American Title Insurance Company has (A)
deleted the survey exception from the title insurance policy on such Station,
(B) issued to the Bank an endorsement stating that the property described in
the survey of such Station is the same property as the property described in the
Mortgage (or any amended mortgage revising such description as reflected in a
corrective deed) on such Station, and (C) issued to the Bank a standard
encroachment and easement endorsement with respect to such Station and (b) the
Bank has issued to the Borrower a certificate stating that the conditions
specified clause (a) above have been satisfied with respect to such Station; and
Approved Stations means all such Stations.
Bank means Fleet Bank of Massachusetts, N.A., a national banking
association, successor by name change to Fleet National Bank of Boston, which
was the successor in interest to the Federal Deposit Insurance Corporation, as
Receiver for New Bank of New England, N.A., which was the successor in interest
to the Federal Deposit Insurance Corporation, as Receiver for Bank of New
England, N.A.
Bank's Special Counsel means Bingham, Dana & Gould of Boston,
Massachusetts, or such other counsel selected by the Bank from time to time to
represent it in connection with the Loan Documents.
Borrower means Leemilt's Petroleum, Inc., a New York corporation.
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<PAGE> 7
Business Day means a day on which banks in Boston, Massachusetts are
open for the transaction of banking business.
CERCLA has the meaning set forth in Section 3.4 hereof.
Closing Date means the date on which this Agreement has been executed
and delivered by all parties thereto.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means all of the Stations and all of the other properties,
assets and rights of the Borrower subject to the lien of any of the Mortgages.
Collateral Notes has the meaning set forth in Section 5.15 hereof.
Conversion Request means a notice given by the Borrower to the Bank of
the Borrower's election to convert all or any portion of the Loans in
accordance with Section 2.5.
Default means any event or condition which with the lapse of time or
the giving of notice, or both, would become an Event of Default.
Dollars or $ means dollars in lawful currency of the United States of
America.
Drawdown Date means the date on which all or any portion of the Loans
are converted or continued in accordance with Section 2.5.
Earnings Before Interest, Taxes, Depreciation and Amortization means
the consolidated earnings (or loss) excluding any extraordinary gain or loss
from the operations of Getty and its Subsidiaries for any period, after all
expenses and other proper charges but before payment or provision for any
income taxes, interest expense, depreciation or amortization for such period,
determined in accordance with generally accepted accounting principles.
Environmental Laws has the meaning set forth in Section 3.4 hereof.
EPA has the meaning set forth in Section 3.4 hereof.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
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<PAGE> 8
Escrow Agreement means the escrow agreement to be entered into between
the Borrower and the Bank which is referenced in Section 6.3 hereof.
Eurocurrency Reserve Rate means for any day with respect
to a LIBOR Rate Loan, the maximum rate (expressed as a decimal) at which the
Bank or any participant or assignee of the Bank subject thereto would be
required to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor or similar regulations relating to
such reserve requirements) against "Eurocurrency Liabilities" (as that term is
used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Event(s) of Default means any of those events described in Section 7
hereof.
Funded Debt to EBITDA Ratio means the ratio of (i) the sum of Getty's
total funded indebtedness for borrowed money (including obligations with
respect to leases which would be capitalized) as carried on the balance sheet
of Getty in accordance with generally accepted accounting principles other than
trade debt or similar obligations incurred in the ordinary course of business
on the last day of the fiscal quarter to (ii) Getty's Earnings Before Interest,
Taxes, Depreciation and Amortization, for the period of four consecutive fiscal
quarters, ending on the last day of the fiscal quarter referred to in clause
(i) above.
Getty means Getty Petroleum Corp., a Delaware corporation.
Guaranteed Pension Plan means any pension plan maintained by any Person
which is required to pay plan termination insurance premiums to the Pension
Benefit Guaranty Corporation.
Guaranty Agreement means the Amended and Restated Guaranty Agreement
dated as of the date hereof between Getty and the Bank, as originally executed,
or, if such Amended and Restated Guaranty Agreement is amended, modified, or
supplemented, as so amended, modified, or supplemented, pursuant to which Getty
guarantees the Borrower's obligations under this Agreement and the Notes.
Hazardous Substances has the meaning set forth in Section 3.4 hereof.
Hazardous Waste Indemnification Agreement means the Amended and
Restated Hazardous Waste Indemnification Agreement dated as of
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<PAGE> 9
the date hereof between the Borrower, Getty and the Bank, as originally
executed and substantially in the form of Exhibit C hereto or, if such Amended
and Restated Hazardous Waste Indemnification Agreement is amended, modified or
supplemented, as so amended, modified or supplemented.
Indebtedness means all indebtedness for borrowed money or credit
received (including obligations with respect to leases which would be required
to be capitalized and carried on the balance sheet of the Borrower in
accordance with generally accepted accounting principles) other than trade debt
or other similar obligations incurred in the ordinary course of business.
Initial Appraised Value, with respect to any particular Station, means
the appraised value of such Station, as set forth in an appraisal report of
R.M. Bradley & Company to the Bank of New England, N.A. dated November 23,
1987.
Interest Payment Date means (i) as to any Prime Rate Loan, the first
day of the calendar month; (ii) as to any LIBOR Rate Loan in respect of which
the Interest Period is (A) 90 days or less, the last day of such Interest
Period and (B) more than 90 days, the date that is (i) 90 days from the first
day of such Interest Period and (ii) the last day of such Interest Period.
Interest Period means with respect to the Loans, (i) initially, the
period commencing on the Drawdown Date of the Loans and ending on the last day
of one of the periods set forth below, as selected by the Borrower (A) for any
Prime Rate Loan, the last day of the calendar month; (B) for any LIBOR Rate
Loan, 30, 60, 90 or 180 days; and (ii) thereafter, each period commencing on
the first day of the next Interest Period applicable to such Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrower
in a Conversion Request; provided that all of the foregoing provisions relating
to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest Period
shall be extended to the next succeeding LIBOR Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding LIBOR Business Day;
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<PAGE> 10
(b) if any Interest Period with respect to a Prime Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in Section
2.5, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Prime Rate Loan and the continuance of any Prime
Rate Loan as a Prime Rate Loan on the last day of the then current Interest
Period with respect thereto; and
(d) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Loan Maturity Date shall end on the Loan Maturity
Date.
LIBOR Business Day means any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other LIBOR market as may be selected by the Bank in its sole discretion acting
in good faith.
LIBOR Rate means for any Interest Period with respect to a LIBOR Rate
Loan, the rate of interest equal to (i) the rate determined by the Bank at
which Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second
LIBOR Business Day prior to the first day of such Interest Period, divided by
(ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
LIBOR Rate Loan means all or any portion of the Loans bearing interest
calculated by reference to the LIBOR Rate.
Lien(s) means any mortgage, security interest, lien, pledge, charge or
other encumbrance of any kind.
Loan Documents means collectively, this Agreement, the Master Note, the
Collateral Notes, the Mortgages, the Hazardous Waste Indemnification
Agreement, the Guaranty Agreement and all other agreements or documents under
which the Borrower creates or assumes liabilities or obligations owed the Bank
with respect to the Loans or this or any other agreement or grants collateral
security therefor.
Loan Maturity Date means November 1, 2000.
Loans means loans made by the Bank to the Borrower pursuant to Section
2 hereof.
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Master Note has the meaning set forth in Section 2.3 hereof.
Mortgages means the mortgages or deeds of trust with respect to the
real property of the Borrower listed on Schedule I hereto, executed and
delivered by the Borrower in favor of the Bank of New England, N.A. prior to
the date hereof pursuant to the Original Loan Agreement, as amended, modified,
varied or supplemented.
Notes means, collectively, the Master Note and the Collateral Notes and
any note issued in exchange for or replacement of any such note pursuant to the
terms hereof.
Officer's Certificate means a certificate signed by the chairman, the
president or the chief financial officer of the Person delivering such
certificate.
Original Loan Agreement means the Loan Agreement dated as of December
7, 1987 between the Borrower and Bank of New England, N.A.
Person means any individual, corporation, partnership, trust,
unincorporated association, joint stock company or other legal entity or
organization and any government or agency or political subdivision thereof.
Plan means an employee benefit plan or other plan maintained for
employees of the Borrower and covered by Title IV of ERISA.
Power Test means Power Test Realty Company Limited Partnership, a New
York limited partnership.
Prime Rate means the rate of interest per annum announced from time to
time by the Bank at its main office in Boston, Massachusetts as its Prime Rate.
Prime Rate Loan means all or any portion of the Loans bearing interest
calculated by reference to the Prime Rate.
RCRA has the meaning set forth in Section 3.4 hereof.
Reportable Event has the meaning which is assigned to that term by
ERISA.
SARA has the meaning set forth in Section 3.4 hereof.
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Stations means, collectively, all of the gasoline service stations,
located at the addresses set forth on Schedule I hereto, which are owned by the
Borrower and subject to a Mortgage in favor of the Bank; and Station means any
one of such Stations.
Subsidiary means, with respect to any Person that is not an individual,
any other present or future corporation or other legal entity a majority of
whose outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions is at the time owned directly or indirectly by
such Person.
Type means as to all or any portion of the Loans, its nature as a Prime
Rate Loan or a LIBOR Rate Loan.
(b) All terms of an accounting character not specifically defined
herein shall have the meanings assigned thereto by generally accepted
accounting principles. All terms not specifically defined herein or by
generally accepted accounting principles which are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts shall have
the same meanings herein as therein. Each reference herein to a particular
Person shall include a reference to such Person's successors and permitted
assigns. The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
Section 2. THE LOANS.
Section 2.1. The Loans. Subject to the satisfaction of all the terms
and conditions set forth herein, the Bank hereby agrees to continue the loans
(the "Loans") made to the Borrower pursuant to the Original Loan Agreement and
outstanding on the date hereof. Any portion of the Loans which is repaid may
not be reborrowed. The outstanding principal balance of the Loans on the
Closing Date is $18,319,521.00.
Section 2.2. [Intentionally Deleted.]
Section 2.3. The Master Note; Collateral Notes. The Loans shall be
evidenced by (a) the Amended and Restated Master Note of the Borrower in the
principal amount of $18,319,521.00 dated October 27, 1995 in substantially the
form of Exhibit A hereto (the "Master Note"), completed with appropriate
insertions and executed and delivered to the Bank by the Borrower, and (b)
Collateral Notes provided for in Section 5.15 hereof and
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<PAGE> 13
executed and delivered to the Bank of New England, N.A. by the Borrower on
December 7, 1987 (the "Collateral Notes").
Section 2.4. Interest on the Loans.
Section 2.4.1. Interest Rates. Except as otherwise provided in Section
2.5, the Loans shall bear interest during each Interest Period relating to all
or any portion of the Loans at the following rates:
(a) To the extent that all or any portion of the Loans bear interest
during such Interest Period at the Prime Rate, the Loans or such portion shall
bear interest during such Interest Period at the Prime Rate.
(b) To the extent that all or any portion of the Loans bear interest
during such Interest Period at the LIBOR Rate, the Loans or such portion shall
bear interest during such Interest Period in accordance with the following
schedule, such LIBOR Rate to be determined on the Drawdown Date with the
applicable margin (as set forth below) to be based on the most recent statement
of the Funded Debt to EBITDA Ratio delivered and certified to the Bank in
accordance with Section 5.8(d) hereof and to be changed (if necessary)
effective on the date of receipt by the Bank of a new statement delivered under
such Section 5.8(b):
Funded Debt to EBITDA Ratio Interest Rate
- --------------------------- -------------
.75x or less to 1 LIBOR Rate + 1.0%
.76x - 1.0x to 1 LIBOR Rate + 1.125%
1.01x - 1.24x to 1 LIBOR Rate + 1.25%
1.25x - 1.49x to 1 LIBOR Rate + 1.375%
1.50x - 1.74x to 1 LIBOR Rate + 1.50%
1.75x or greater to 1 LIBOR Rate + 1.625%
The Borrower promises to pay interest on the Loans or any portion
thereof outstanding during each Interest Period in arrears on each Interest
Payment Date applicable to such Interest Period.
Section 2.4.2. Notification by Borrower. The Borrower shall notify the
Bank, such notice to be irrevocable, at least three (3) LIBOR Business Days
prior to the Drawdown Date of the Loans if all or any portion of the Loans is
to bear interest at the LIBOR Rate.
Section 2.4.3. Amounts, etc. Any portion of the Loans bearing interest
at the LIBOR Rate relating to any Interest Period shall be in the amount of
$1,000,000 or an integral multiple thereof, except that if less
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<PAGE> 14
than $2,000,000 in principal on the Loans is outstanding, then LIBOR Rate Loans
may be in the amount of $500,000 or an integral multiple thereof. No
Interest Period relating to the Loans or any portion thereof bearing interest
at the LIBOR Rate shall extend beyond the date on which a regularly scheduled
installment payment of the principal of the Loans is to be made unless a
portion of the Loans at least equal to such installment payment has an Interest
Period ending on such date.
Section 2.5. Conversion Options.
Section 2.5.1. Conversion to Different Type of Loan. The Borrower may
elect from time to time to convert the Loans to another Type, provided that (i)
with respect to any such conversion of a LIBOR Rate Loan into another Type,
such conversion shall only be made on the last day of the Interest Period with
respect thereto; (ii) with respect to any conversion of a Prime Rate Loan to a
LIBOR Rate Loan or the continuation of a LIBOR Rate Loan as a LIBOR Rate Loan,
the Borrower shall give the Bank at least three (3) LIBOR Business Days prior
written notice of such election; and (iii) the Loans may not be converted into
a LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing. All or any part of the Loans of any Type may be converted as
provided herein, provided that partial conversions shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof, except that if less
than $2,000,000 in principal on the Loans is outstanding, then LIBOR Rate Loans
may be in the amount of $500,000 or an integral multiple thereof. Each
Conversion Request relating to the conversion of the Loans to a LIBOR Rate Loan
shall be irrevocable by the Borrower.
Section 2.5.2. Continuation of Type of LIBOR Loan. Any Loan of any
Type may be continued as such upon the expiration of an Interest Period with
respect thereto by compliance by the Borrower with the notice provisions
contained in Section 2.5.1; provided that no LIBOR Rate Loan may be continued
as such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Prime Rate Loan on the last day of
the first Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which the officers of the Bank active upon the
Borrower's account have actual knowledge. In the event that the Borrower fails
to provide any such notice with respect to the continuation of any LIBOR Rate
Loan as such, then such LIBOR Rate Loan shall be automatically converted to a
Prime Rate Loan on the last day of the first Interest Period relating thereto.
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<PAGE> 15
Section 2.5.3. LIBOR Rate Loans. Any conversion to or from a LIBOR
Rate Loan shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of all LIBOR
Rate Loans having the same Interest Period shall not be less than $1,000,000 or
a whole multiple of $1,000,000 in excess thereof, except that if less than
$2,000,000 in principal on the loans is outstanding, then LIBOR Rate Loans may
be in the amount of $500,000 or an integral multiple thereof. In no event
shall more than seven (7) LIBOR Rate Loans be outstanding at any one time.
Section 2.6. Overdue Amounts. Overdue principal and, to the extent
permitted by applicable law, overdue interest on the Loans and all other
overdue amounts payable hereunder shall bear interest from the due date thereof
at a rate per annum equal to two percent (2%) above the then applicable
interest rate in effect as set forth in Section 2.4, payable on demand, to
accrue from the due date of such principal, interest or other amount and,
to the extent permitted by applicable law, to be compounded monthly until the
obligation of the Borrower hereunder shall be discharged, whether before or
after judgment. In addition, in the event that any principal or interest on
the Loans is overdue for ten (10) days or more, the Borrower shall pay a late
fee in the amount of 5% of the past due payments,
Section 2.7. Mandatory Repayment. The Borrower promises to pay to the
Bank the principal amount of the Loans in fifty-nine (59) consecutive payments
of $218,089.53, such installments to be due and payable on the first day of
each calendar month of each calendar year, commencing on December 1, 1995, with
a final payment on the Loan Maturity Date in an amount equal to the unpaid
balance of the Loans. The entire principal amount of the Loans outstanding
together with all accrued interest and any other amounts owing to the Bank by
the Borrower in connection with the Loans, shall be paid in full on the Loan
Maturity Date.
Section 2.8. Optional Prepayment. The Borrower shall have the right,
one time each calendar quarter, upon at least 2 Business Days' notice to the
Bank stating the proposed date and aggregate principal amount of the
prepayment, to prepay the outstanding principal amount of any Prime Rate Loans
in whole or in part on any Business Day and to prepay the outstanding principal
amount of any LIBOR Rate Loan on the last Business Day of any Interest Period
applicable thereto.
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<PAGE> 16
Section 2.9. Method of Computing Interest. All computations of interest
and other amounts payable hereunder shall be made on the basis of the actual
number of days elapsed divided by 360.
Section 2.10. Place and Method of Payments. All payments due hereunder
shall be made by the Borrower to the Bank at its head office at 75 State
Street, Boston, Massachusetts 02109, in immediately available funds, for the
account of the Bank without setoff, counterclaim or any other deduction
whatsoever. Any payment required hereunder to be made on a day which is not a
Business Day shall be made on the next succeeding Business Day.
Section 2.11. Application of Payments. All payments of principal on
the Loans shall be applied first to reduce the principal balance of the Master
Note until such time as the outstanding principal balance of the Loans equals
the aggregate principal amount of the Collateral. Notes, following which any
further payments shall be applied to reduce the balances owing on the
Collateral Notes in such order or preference as the Bank, in its sole
discretion, may determine.
Section 2.12. Indemnity. The Borrower agrees to indemnify the Bank and
to hold the Bank harmless from and against any loss, cost or expense that the
Bank may sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any LIBOR Rate Loans as
and when due and payable, including any such loss or expense arising from
interest or fees payable by the Bank to lenders of funds obtained by it in
order to maintain its LIBOR Rate Loans, (b) default by the Borrower in making a
borrowing or conversion after the Borrower has given (or is deemed to have
given) a Conversion Request relating thereto in accordance with Section 2.5.1
or (c) the making of any payment of a LIBOR Rate Loan or the making of any
conversion of any such Loan to a Prime Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by the Bank to lenders of funds obtained by it in order to
maintain any such Loans.
Section 2.13. Security; Guaranty. All amounts due hereunder and under
the Master Note, the Collateral Notes and the other Loan Documents shall be
secured pursuant to the Mortgages and shall be guaranteed pursuant to the
Guaranty Agreement, and all such amounts shall be entitled to the benefits of
such instruments and documents.
Section 2.14. Release of Liens. Upon a determination by the Bank that,
notwithstanding the exercise by the Borrower of its reasonable good
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<PAGE> 17
faith effort to cause any Station to become an Approved Station, such Station
will not become an Approved Station, the Bank will, at the request of the
Borrower, release its lien on such Station.
Section 2.15. Closing Fee. The Borrower agrees to pay to the Bank on
the date of this Agreement a closing fee in the amount of $45,798.81 (which
equals .25% of the principal amount of the Loans outstanding on the date of this
Agreement).
Section 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants to the Bank that on and as of the date hereof:
Section 3.1. Authority Ownership.
(a) Organization; Good Standing. The Borrower (i) is a corporation
duly organized, validly existing and in good standing under the laws of
New York, (ii) has all requisite corporate power to own its property and
conduct its business as now conducted and as presently contemplated, and
(iii) is in good standing and is duly authorized to do business in each
jurisdiction where the nature of its properties or its business requires
such qualification and in which failure so to qualify would materially
adversely affect its business or financial condition.
(b) Authorization. The execution, delivery and performance
of the Loan Documents to which the Borrower is a party and the
transactions contemplated thereby (i) are within the corporate
authority of the Borrower, (ii) have been duly authorized by all proper
corporate proceedings required to make the Loan Documents the valid and
enforceable obligations they purport to be, (iii) will not contravene any
provision of law, the charter documents or by-laws of the Borrower or any
other material agreement, instrument or undertaking binding upon the
Borrower, and (iv) do not require any approval or consent of, or filing
with, any governmental agency or authority.
(c) Ownership. Getty owns 100% of the issued and outstanding
capital stock of the Borrower and there are no outstanding commitments,
options, warrants, calls or other agreements or obligations (whether
written or oral) binding on the Borrower or which require or could
require the Borrower to issue, sell, grant, transfer, assign, mortgage,
pledge or otherwise dispose of (i) any securities exchangeable for or
convertible into or carrying
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<PAGE> 18
any rights to acquire any other right of any kind in the capital of the
Borrower, or (ii) any options, warrants or any other rights to acquire any right
of any kind in the capital of the Borrower.
Section 3.2. Title to Properties; Absence of Liens. The
Borrower has good and marketable title to all of the Stations and all properties
and assets of whatever nature used in connection with the operation of the
Stations, free from all Liens except Liens permitted by the provisions of
Section 6.1 hereof.
Section 3.3. No Default or Violation of Law. The Borrower is
not in default in any material respect under any contract, agreement or
obligation or in violation in any material respect of any law, decree or
regulation applicable to it or its properties or business operations, which
default or violation could result in an impairment of the ability of the
Borrower to fulfill its obligations under the Loan Documents or a material
impairment of the financial position or business prospects of the Borrower.
Section 3.4. Environmental Compliance and Storage Tank
Regulations. The Borrower has complied in all material respects with all
applicable requirements of the Solid Waste Disposal Act of 1970, as amended,
including, without limitation, requirements that owners of underground storage
tanks notify state and local agencies of the existence of such tanks. The
Borrower is also in compliance in all material respects with underground storage
tank regulations pertaining to underground leak detection and inventory audit
procedures.
The Borrower has taken all appropriate steps consistent with petroleum industry
practices to investigate the present condition and usage of the Stations and the
operations conducted thereon and, based upon such investigation, has determined
that:
(a) The Borrower is not in violation of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation would
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<PAGE> 19
have a material adverse effect on the business, assets or
financial condition of the Borrower.
(b) Except as provided in Schedule 3.4(b) hereto, the
Borrower has not received notice from any third party including,
without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
hazardous waste, as defined by 42 U.S.C. Section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) and
any toxic substances, or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or
other third party has conducted or has ordered that Borrower conduct a
remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 3.4(c) attached hereto,
to the best knowledge of Borrower, (i) no portion of any Stations has
been used for the handling, processing storage or disposal of
Hazardous Substances except in accordance with applicable
Environmental Laws; (ii) no underground tank or other underground tank
storage receptacle for Hazardous Substances is located on any portion
of the Stations, (iii) in the course of any activities conducted by
the Borrower, no Hazardous Substances have been generated or are being
used at the Stations except in accordance with applicable
Environmental Laws; (iv) there have been no releases (i.e., any past
or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened release of Hazardous Substances on, upon, into or from the
properties of the Borrower, which releases would have a material
adverse effect on the value of the Stations taken as a whole; (v)
there have been no releases on, upon, from or into any real property
in the vicinity of any of the Stations which, through soil or
groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of the Stations
taken as a whole; and (vi) in addition, any Hazardous Substances that
have been generated on any of the Stations have been transported
offsite only by carriers having an identification number issued by the
EPA, treated or disposed of only by
15
<PAGE> 20
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are operating in compliance with such permits and applicable Environmental laws;
and
(d) except as set forth on Section 3.4(d), the Borrower is
not subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal of remediation of
Hazardous Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure document
or statement by virtue of the transactions set forth herein and contemplated
hereby.
Section 3.5. Enforceability of the Loan Documents. Upon
execution by the parties hereto and thereto, each of the Loan Documents to which
the Borrower is a party will be the valid and legally binding obligation of the
Borrower, enforceable against it in accordance with the terms thereof, except to
the extent that the enforcement of the rights and remedies of the Bank may be
subject to bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting generally the enforcement of creditors' rights and remedies, and the
availability of equitable remedies may be subject to the discretion of the court
before which any proceeding thereof is brought.
Section 3.6. Use of Proceeds.
(a) The proceeds of the Loans shall be used to refinance
the existing indebtedness of the Borrower under the Original Loan
Agreement.
(b) No proceeds of the Loans will be used in violation of
the provisions of Regulations G, U, or X of the Board of Governors
of the Federal Reserve System.
Section 3.7. Financial Statements. The Borrower has furnished
to the Bank the audited financial statements of the Borrower as at January 31,
1995 and the unaudited financial statements of the Borrower as at July 31, 1995.
Such financial statements were prepared in accordance with generally accepted
accounting principles applied on a consistent basis and fairly present the
financial position of the Borrower as at the date thereof and its results of
operations for the periods covered thereby.
Section 3.8. No Material Changes. Since July 31, 1995, there
has been no materially adverse change in the assets, liabilities, condition
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(financial or otherwise), operations, properties (including intangible
properties) or business of the Borrower.
Section 3.9. No Materiallv Adverse Contracts, Etc. The
Borrower is not subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of the Borrower. The Borrower is not a party to any contract or
agreement which has or is expected, in the judgment of the Borrower, to have any
materially adverse effect on the business of the Borrower.
Section 3.10. Compliance With Other Instruments, Laws, Etc. The
Borrower is not in violation of any provision of its charter documents or
by-laws or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, or any
statute, license, rule or regulation, in any of the foregoing cases in a manner
which could result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Borrower.
Section 3.11. Governmental Approvals. The execution, delivery
and performance by the Borrower of this Agreement, the Notes and the other Loan
Documents and the transactions contemplated hereby and thereby do not require
the approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.
Section 3.12. Taxes. (a) The Borrower has filed all federal,
state and local tax returns which are required to be filed, and has paid all
taxes shown on such tax returns and all other due and payable taxes, assessments
and governmental charges of which the Borrower has knowledge, except those being
contested in good faith by appropriate proceedings and as to which there have
been set aside reserves adequate under generally accepted accounting principles
with respect to such tax, assessment or charge so contested. All known
deficiencies finally resulting from examinations of any such returns by the
respective taxing authorities have been discharged or reserved against. The
Borrower has set up reserves which are adequate under generally accepted
accounting principles for the payment of all federal, state and local taxes for
the years that have not been audited by the respective tax authorities.
(b) As to the real estate constituting the Stations, the
Borrower has filed all tax returns of any nature which are required to be filed
in connection therewith and has paid all taxes shown on such tax returns
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and all other due and payable taxes, assessments and other governmental charges
of which the Borrower has knowledge.
Section 3.13. Franchises Copyrights, Etc. The Borrower possesses all
franchises, copyrights, trademarks, trade names, licenses and permits, and
rights in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of others.
Section 3.14. Litigation. There is no action, suit or proceeding at
law or in equity or by or before any governmental instrumentality or other
agency now pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower, or any properties or rights of the Borrower, which, if
adversely determined, would materially impair the ability of the Borrower
to carry on its business substantially as now conducted or would materially
adversely affect the financial condition of the Borrower.
Section 3.15. No Events of Default, Etc. No Event of Default has
occurred and is continuing. No event has occurred and is continuing, and no
condition exists within the knowledge of the Borrower which would, with notice
or the lapse of time, or both, constitute an Event of Default.
Section 3.16. Chief Executive Offices. Until the Bank receives notice
of a change, the chief executive offices of the Borrower and the offices where
all the records and books of account of the Borrower are kept shall be located
at 125 Jericho Turnpike, Jericho, New York 11753.
Section 3.17. Collateral.
(a) All the obligations of the Borrower to the Bank under or in
respect of the Loan Documents will, at all times from and after the
execution and delivery of the Mortgages and all appropriate filings or
recordings thereof, be entitled to all the benefits of and be secured by
each of such Mortgages.
(b) No financing statement which names the Borrower as a debtor and
which relates to any of the Collateral has been filed in any jurisdiction
in the United States or any state thereof pursuant to Article 9 of the
Uniform Commercial Code of any state, and the Borrower has not signed any
financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement in any such jurisdiction,
other than with
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respect to Liens permitted by the provisions of Section 6.1 hereof, which
Liens do not affect any of the property subject to the Mortgages.
(c) No mortgages, chattel mortgages, assignments, statements of
assignment, security agreements or deeds of trust have been filed by any
Person or Persons with respect to any part of the property or assets of the
Borrower constituting any part of the Collateral, except for mortgages and
security agreements permitted by the provisions of Section 6.1 hereof.
Section 3.18. Leases. Any lease of any kind with respect to any
Station is and will be subject and subordinate to the Mortgage relating to such
Station, and is and will be substantially in the form of one or more of the
attachments included in Exhibit D annexed hereto, except for leases for uses
other than as gasoline service stations, as indicated on Exhibit D-1 hereto.
Section 3.19. True Copies of Charter Documents. The Borrower has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Borrower, together with any amendments
thereto.
Section 3.20. Guaranteed Pension Plans. The Borrower does not
contribute to any Guaranteed Pension Plans. The Borrower does not contribute to
any multiemployer pension plans.
Section 3.21. Disclosure. No material representation or warranty made
by the Borrower in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Borrower in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are made.
There is no fact known to any officer of the Borrower which materially
adversely affects, or which, in the best judgment of any officer of the
Borrower, would in the future materially adversely affect, the financial
position, business, operations or affairs of the Borrower.
Section 3.22. Subsidiaries. The Borrower has no Subsidiaries.
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Section 4. CONDITIONS OF LOANS.
Section 4.1. Conditions Precedent to the Loans. The obligation of
the Bank with respect to the Loans hereunder on the Closing Date is subject to
the following conditions precedent:
(a) Loan Documents, Etc. Each of the Loan Documents shall have
been duly and properly authorized, executed and delivered by the
respective party or parties thereto, and shall be in full force and
effect on the date hereof. Executed original counterparts of each
of the Loan Documents shall have been furnished to the Bank.
(b) Corporate Action. The Bank shall have received
certified copies of all documents relating to the due authorization
and execution of the Loan Documents as the Bank may request.
(c) [Intentionally Deleted.]
(d) Proceedings and Documents. The Bank shall have received all
such other documents as it may request and are incidental to, or
necessary or desirable in connection with, the due execution and
delivery of the Loan Documents. All proceedings in (connection with
the transactions contemplated by this Agreement shall be
satisfactory in substance and in form to the Bank and the Bank's
Special Counsel, and the Bank and such counsel shall have received
all information and such counterpart originals or certified or other
copies of such documents as the Bank or such counsel may request.
Without limiting the generality of the foregoing, the Bank shall
have received all certificates, consents and other documents
required to be delivered to the Bank pursuant to each of the Loan
Documents.
(e) Opinions of Counsel. The Bank shall have received from
Samuel M. Jones, Esq., general counsel of the Borrower and Getty, a
favorable opinion addressed to the Bank and dated the date of the
execution and delivery of this Agreement, in scope and form
satisfactory to the Bank.
(f) Mortgages. The Mortgages and the appropriate financing
statements and other documents with respect thereto and necessary to
enable the Bank to perfect its security interests or mortgage liens
thereunder shall have been duly executed by the
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Borrower and the other parties thereto and filed or recorded, as
applicable, in all appropriate filing offices or other locations
necessary for the perfection of such security interests or mortgage
liens, and there shall have been completed all other actions necessary
for the perfection of such security interests or mortgage liens.
(g) Title Insurance. The Bank shall have received from
First American Title Insurance Company mortgagee policies of title
insurance on all Stations, in such amounts and in form and substance
as shall be satisfactory to the Bank, insuring the mortgage lien and
security interest of the Bank as mortgagee under the Mortgages,
subject to no prior Liens except Liens permitted by Section 6.1 hereof,
together with evidence of full payment of the premiums for such title
insurance policies.
(h) Insurance. The Bank shall have received certificates
of insurance for the Stations evidencing the insurance that the
Borrower is required to maintain pursuant to Section 5.4 hereof, each
in form and substance satisfactory to the Bank.
Section 5. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any obligations are owed to the Bank under any of the Loan
Documents:
Section 5.1. Punctual Payment. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loans, all in
accordance with the terms hereof and of the Notes.
Section 5.2. Conduct of Business. The Borrower will:
(a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights
(charter and statutory), and franchises, licenses, material trademarks
and service marks, and copyrights;
(b) keep true and accurate records and books of account,
prepared in accordance with generally accepted accounting principles,
consistently applied; and
(c) cause all of its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and
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cause to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and continue to engage
primarily in the business now conducted by it and in related businesses,
except as may otherwise be permitted under Section 16.2 of the Guaranty
Agreement.
Section 5.3. Compliance with Agreements and Contracts. The
Borrower will observe, conform to and comply with the provisions of its charter
documents and by-laws, all leases (including without limitation those relating
to any of the Stations), and all agreements and instruments by which it or any
of its properties may be bound.
Section 5.4. Insurance. The Borrower will at all times maintain
the minimum insurance coverages described on Schedule 5.4 hereto and such other
insurance as the Bank may reasonably require from time to time. Notwithstanding
and without limiting the foregoing, the Borrower will keep each Station
continuously insured, in amounts sufficient to prevent the Borrower from being a
coinsurer of any loss under the applicable policies, but in any event in amounts
not less than the amounts specified on Schedule 5.4 hereto, as to property,
casualty and liability. All policies, including policies for any amounts
carried in excess of the required minimum and policies not specifically required
by the Bank, (a) shall be in form satisfactory to the Bank, (b) shall be issued
by companies satisfactory to the Bank, (c) shall be maintained in full force and
effect, and copies thereof shall be delivered to the Bank, with copies of
receipts for premiums prepaid, (d) shall provide that losses are payable to the
Bank pursuant to a loss-payable-to-mortgagee clause which is, as to each
Station, standard in the jurisdiction in which such Station is situated, not
subject to contribution, (e) shall not be invalidated or adversely affected and
shall be payable to the Bank notwithstanding any act or omission of the Borrower
or any employee thereof or any defense the insurer may have to payment of the
same to the Bank or to any person holding any other interest in any Station, (f)
shall be primary and without any right of contribution as to any other insurance
carried by or for the Borrower and shall be endorsed to state that all terms and
conditions except for limits of liability shall operate in the same manner as if
there were a separate policy covering each insured, (g) with respect to property
insurance, shall provide for full repair and replacement coverage without
allowance for depreciation, and (h) shall provide for at least sixty (60) days
notice to the Bank of cancellation, termination or material change. The
Borrower shall deliver to the Bank photocopies of policies for such public
liability,
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property damage and worker compensation insurance as they are issued and/or
renewed promptly after receipt thereof by the Borrower, together with
certificates of insurance with respect thereto.
Section 5.5. Payment of Taxes. The Borrower will cause to be
paid and discharged, before the same shall become in default, all due and
payable lawful taxes, assessments and governmental charges or levies imposed
upon it or upon its properties, sales or activities or upon the income and
profits thereon, or upon any part thereon, or for labor, materials and supplies,
which, if unpaid, might become a lien or charge upon such property or any part
thereof, provided that the provisions of this Section 5.5 shall not require to
be paid and discharged any such tax, assessment, charge, levy, or claim so long
as the same shall be actively contested in good faith by appropriate proceedings
and as to which there shall have been set aside reserves adequate with respect
to such tax, assessments, charge, levy or claim so contested, and provided
further that such tax or other sum shall be paid before it gives rise to a lien
against any property of the Borrower.
Section 5.6. Compliance with Law. The Borrower will (a) comply
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, including Environmental Laws,
noncompliance with which would have a materially adverse effect on the business,
operations or financial condition of the Borrower or the ability of the Borrower
to fulfill its obligations under this Agreement or the other Loan Documents, and
(b) promptly obtain, maintain, apply for renewal, and not allow to lapse, any
authorization, consent, approval, license or order, and accomplish any filing or
registration with, any court or judicial, administrative or governmental
authority, which may be or may become necessary in order that it perform all of
its obligations under this Agreement or the other Loan Documents and in order
that the same may be valid and binding and effective in accordance with their
terms and in order that the Bank may be able freely to exercise and enforce any
and all of its rights under this Agreement or the other Loan Documents.
Section 5.7. Notification of Material Litigation, Default,
Etc. The Borrower will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Borrower, and (b) the occurrence of any Default or
Event of Default. The Borrower will promptly give notice to the Bank of the
occurrence of any material default under any other
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material instrument or agreement to which the Borrower is a party (if it has
knowledge of the same), and if any person shall give any notice or take any
other action in respect of a claimed default under any other evidence of
Indebtedness, indenture, note or other obligation as to which the Borrower is a
party or obligor, whether as principal or surety, the Borrower shall promptly
give written notice thereof to the Bank, describing the notice or action and the
nature of the claimed default.
Section 5.8. Financial Statements, Certificates and Other Information.
The Borrower will furnish to the Bank:
(a) as soon as available but in any event within forty-five (45)
days after the end of each of the first three fiscal quarters in any fiscal
year of the Borrower, an unaudited consolidated balance sheet for the
Borrower and its Subsidiaries as at the end of such quarter, and an
unaudited consolidated statement of income and statement of changes in
financial position for the Borrower and its Subsidiaries for the period
commencing with the end of the preceding fiscal year and ending with the
end of such quarter, together with a certificate of the chief financial
officer of the Borrower stating that such financial statements fairly
present the financial condition of the Borrower as of the date thereof and
have been prepared in accordance with generally accepted accounting
principles consistently applied subject, however, to year-end adjustments;
(b) as soon as available but in any event within ninety (90) days
after the end of each fiscal year, an unaudited consolidated balance sheet
for the Borrower and its Subsidiaries as at the end of such fiscal year,
and an unaudited consolidated statement of income and statement of changes
in financial position for the Borrower and its Subsidiaries for such fiscal
year, together with a certificate of the chief financial officer of the
Borrower stating that such financial statements fairly present the
financial condition of the Borrower as of the date thereof and have been
prepared in accordance with generally accepted accounting principles
consistently applied; and
(c) to the extent available, if at all, as soon as available but in
any event within one hundred eighty (180) days after the end of each fiscal
year, any CPA management letters prepared for Getty or the Borrower
relating to the annual audit;
(d) as soon as available but in any event within forty-five (45)
days after the end of each fiscal quarter of Getty and ninety
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(90) days after the end of each fiscal year of Getty, a statement from
Getty of the Funded Debt to EBITDA Ratio as of the end of the most
recent fiscal quarter of Getty, together with a certificate of the
chief financial officer of Getty stating that such statement fairly
and accurately reflects the Funded Debt to EBITDA Ratio as of the end
of the most recent fiscal quarter of Getty and is prepared in
accordance with generally accepted accounting principles consistently
applied; and
(e) with reasonable promptness, such other information relating to
the business or financial affairs of the Borrower as the Bank may
reasonably request.
Section 5.9. Notice of Material Change. The Borrower will promptly
notify the Bank of any materially adverse change in its financial
condition, business or operations.
Section 5.10. Inspection of Properties and Books. The Bank or any
of its designated representatives shall have the right to visit and inspect
any of the properties of the Borrower, to examine the books of account of
the Borrower, and to discuss the affairs, finances and accounts of the
Borrower with, and to be advised as to the same by, its officers, all at such
reasonable times and intervals as the Bank may desire.
Section 5.11. ERISA. The Borrower will promptly notify the Bank of
any Reportable Event (other than a Reportable Event as to which the Pension
Benefit Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Borrower shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Borrower to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Borrower, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result
in the imposition of any material lien or encumbrance on the assets of the
Borrower under Section 4068 of ERISA.
Section 5.12. Change of Name. The Borrower will notify the Bank
five days in advance of any proposed change in its corporate name, and
the Borrower will duly execute and deliver appropriate financing
statements and other documents necessary to enable the Bank to
maintain continuously perfected security interests under the Mortgages
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and shall take all other actions requested by the Bank necessary to
maintain the perfection and priority of such security interests.
Section 5.13. Maintenance of Office. The Borrower will maintain its
chief executive office in Jericho, New York, or at such other place in the
United States of America as the Borrower shall designate upon written
notice to the Bank, where notices, presentations and demands to or upon
the Borrower in respect of the Notes may be made.
Section 5.14. Further Assurances. The Borrower shall at any time
or from time to time execute and deliver such further instruments and
take such further action as may reasonably be requested by the Bank, in
each case further and more perfectly to effect the purposes of this
Agreement and the other Loan Documents.
Section 5.15. Collateral Notes. In addition to the Master Note, the
Borrower agrees that with respect to any or all of the real estate interests
to be made subject to Mortgages, it will execute and deliver to the Bank
such collateral notes ("Collateral Notes") as the Bank and the Borrower
may agree upon, it being understood, however, that (a) the aggregate of
all payments or recoveries on such Collateral Notes and the Master Note
shall not exceed the outstanding principal amount of the Loans on the
date of this Agreement plus any and all interest, fees and other amounts
owed the Bank hereunder or under the Loan Documents, and (b) any
payments or recoveries on such Collateral Notes shall be credited to the
principal of the Loans outstanding and such interest, fees or other
amounts in such order of application as the Bank may determine. All
Collateral Notes shall be payable to the order of the Bank, on demand.
Section 5.16. Flood Insurance. If at any time during the term of
this Agreement any of the real property of the Borrower or any portion
thereof is designated a "Flood Hazard Area" pursuant to the Flood
Disaster Protection Act of 1973 or any amendments or supplements
thereto, the Borrower shall obtain flood insurance in such total amount as
the Bank may from time to time require and shall otherwise comply with
the National Flood Insurance Program as set forth in said Act.
Section 5.17 Environmental Events. The Borrower will promptly
give notice to the Bank (i) of any violation of any Environmental Law that
the Borrower reports in writing or is reportable by the Borrower in
writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency, and (ii) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including any notice from any agency of potential environmental
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liability, of any federal, state or local environmental agency or board that
has the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower. The Borrower covenants and agrees
that if any release or disposal of Hazardous Substances shall occur or shall
have occurred at any Station, Borrower will cause the prompt containment and
removal of such Hazardous Substances and remediation of the Station as
necessary to comply with all Environmental Laws.
Section 5.18 Environmental Assessments. Whether or not an Event of
Default shall have occurred,but only in the event that facts or circumstances
have come to the attention of the Bank reasonably indicating (i) that the use
or operation of any Station does not comply with any Environmental Law or (ii)
the presence of Hazardous Substances in the soil or water at any Station, the
Bank may request that Borrower deliver to the Bank all information pertaining
to such occurrence or condition available to the Borrower and that Borrower
inform the Bank of any proposed actions by the Borrower to correct or rectify
such occurrence or condition. If, upon review of such material provided by the
Borrower concerning such occurrence or condition and the Borrower's plans with
respect thereto, the Bank is not satisfied in its reasonable discretion that
such plans will promptly correct or rectify such occurrence or condition the
Bank may obtain one or more environmental assessments or audits of any such
affected Station prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the Agent to evaluate or confirm (i)
whether any Hazardous Substances are present in the soil or water at such
Station and (ii) whether the use and operation of such Station complies with
all Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of such Station including any and all
storage areas, storage tanks, drains, dry wells and leaching areas, and the
taking of soil samples, surface water samples and ground water samples, as well
as such other investigations or analyses as the Bank deems appropriate. All
such environmental assessments shall be conducted and made at the expense of
the Borrower.
Section 6. NEGATIVE COVENANTS. The Borrower covenants and agrees that,
so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any obligations are owed to the Bank under any of the Loan
Documents:
Section 6.1. Liens. The Borrower will not create, incur, assume or
permit to exist any Lien on any properties or assets owned by it constituting
all or any portion of the Collateral, except:
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(a) Liens and security interests granted in favor of the Bank
pursuant to the terms of any of the Loan Documents;
(b) Liens in respect of taxes, fees, assessments and other
governmental charges to the extent that payment of the same may be
postponed or is not required in accordance with the provisions of
Section 5.5 hereof;
(c) judgment Liens which shall not have been in existence for
a period longer than thirty (30) days after the creation thereof, or if
a stay or execution shall have been obtained, for a period longer
than thirty (30) days after the expiration of such stay; and
(d) Liens listed as e xceptions to any title insurance
policy relating to the Stations delivered pursuant to Section 4.1(g).
Section 6.2. Merger, Sale of Assets and Termination Leases. The
Borrower will not:
(a) consolidate or merge with or into any other Person or
agree to or effect any asset acquisition or stock acquisition or
otherwise alter its capital structure;
(b) sell, lease, transfer or otherwise dispose of any of
its assets other than (i) for the fair market value in cash of the
assets disposed of, or (ii) in the case of Stations, in accordance
with the provisions of Section 6.3 hereof; or
(c) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets, regardless of the value to be
received therefor.
Notwithstanding the foregoing, the Borrower is permitted to
consolidate or merge with or into Getty or any of its Subsidiaries, provided
that (i) if the Borrower is not the surviving corporation of such consolidation
or merger, the Borrower will cooperate with the Bank in causing to be executed
and delivered to the Bank such instruments and documents as the Bank shall
reasonably request to ensure that the surviving corporation of such
consolidation or merger assumes all of the Borrower's obligations to the Bank
pursuant to the Loan Documents and (ii) after giving effect to such
consolidation or merger no Default or Event of Default exists.
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Section 6.3. Sale of Stations. The Borrower will not sell any
Station except upon the election of the Borrower one of the following: (a)
repayment of the Loans in an amount at least equal to the Initial Appraised
Value of such Station, (b) the substitution of one or more gasoline station
properties with a purchase price paid by the Borrower in an arms' length
transaction equal to or greater than the Initial Appraised Value of the Station
sold, or (c) the deposit into an escrow account pursuant to an Escrow Agreement
between the Borrower and the Bank to be entered into by the Borrower and the
Bank on mutually satisfactory terms and conditions of an amount at least equal
to the Initial Appraised Value for such Station. Prior to the sale of any
Station, in the case of repayment under Clause (a) above or use of the escrow
under Clause (c) above, the Borrower shall pay to the Bank an amount at least
equal to the Initial Appraised Value for such Station, and in the case of use
of the escrow under Clause (c), such amount shall be held by the Bank pursuant
to the Escrow Agreement. Promptly after receipt of such payment pursuant to
either Clause (a) or Clause (c) the Bank will release the Mortgage relating to
the Station to be sold. The Bank shall hold such funds paid under Clause (c)
in escrow for a period not to exceed nine (9) months after the receipt thereof.
If, at the end of such nine (9) month period or such shorter period as the
Borrower may elect, the Borrower has not substituted a Station(s) pursuant to
Clause (b) above, the Bank shall upon notice to the Borrower apply the escrowed
funds to the payment of the Loans. Any station(s) substituted for a Station in
accordance with the provisions of this Section 6.3 shall, prior to or at the
time of such sale, be made subject to a Mortgage on terms equivalent to those
in effect with regard to the Station sold. Upon satisfaction of the
conditions for substitution hereunder, any substituted station shall become a
Station hereunder and, where the Bank has not previously released the Station
as provided herein, the Bank shall release the Mortgage relating to the Station
to be sold; the Bank shall pay to the Borrower any escrowed funds held relating
to such Station. All properties purchased for substitution shall be
purchased from third parties at a price which approximates fair market value
and the Borrower shall provide to the Bank upon its request any information
relating to the purchase of any Station and any agreements or instruments in
connection therewith. Without the prior written consent of the Bank, the
Borrower may not sell, over the term of the Loans, which for purposes hereof
shall include the sale of Stations from December 7, 1987 (the date of the
Original Loan Agreement) to the Loan Maturity Date, (x) more than forty (40)
Stations in the aggregate or (y) such lesser number of Stations as have Initial
Appraised Values aggregating $9 million or more.
Section 6.4. Compliance with Environmental Laws. The Borrower will not
(i) use any of the Stations or any portion thereof for the handling,
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processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws, (ii) cause or permit to be
located at any of the Stations any underground tank or other underground
storage receptacle for Hazardous Substances except in compliance with
applicable Environmental Laws, (iii) generate any Hazardous Substances at any
of the Stations, (iv) conduct any activity at any of the Stations or use any of
the Stations in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) or threatened release of Hazardous
Substances on, upon or at the Stations or (v) otherwise conduct any activity at
any Station or use any Station in any manner that would violate any
Environmental Law or bring such Station in violation of any Environmental Law.
Section 7. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay the principal owing on
any of the Notes or shall default in the payment of any principal
obligation under any of the Loan Documents when the same shall become
due and payable, whether at maturity or at any date fixed for payment
or prepayment or by acceleration or otherwise; or
(b) the Borrower shall fail to pay any interest owing on any
of the Notes, or any other sums due hereunder or under any of the Loan
Documents when the same shall become due and payable, whether at
maturity or at any date fixed for payment or prepayment or by
acceleration or otherwise; or
(c) any representation or warranty made in writing by or on
behalf of the Borrower or Getty herein or in any of the other Loan
Documents or in connection with any of the transactions contemplated
hereby shall prove to have been false or incorrect in any material
respect on the date as of which made or deemed made; or
(d) the Borrower shall default in the performance of or
compliance with any term, covenant or provision applicable to it
contained in Section 6 hereof, provided, that with respect to
any Lien incurred without the consent or voluntary action of the
Borrower, the Borrower shall have ten (10) days after the Borrower
receives knowledge of the existence of such Lien in which to discharge
such Lien, provided, however, that the Borrower may contest such Lien
in good faith so long as (i) the enforcement thereof is stayed, (ii)
the
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<PAGE> 35
Borrower has set aside reserves therefor which are adequate under
generally accepted accounting principles or has furnished the Bank with
security therefor acceptable to the Bank, and (iii) such contest does
not involve any material risk of foreclosure, sale, forfeiture or loss
of, or imposition of any Lien on, other than a Lien permitted by
Section 6.1 hereof, any Station; or
(e) the Borrower shall default in the performance of or
compliance with any term, covenant or provision applicable to it
contained in Section 5 hereof and such default shall not have been
remedied within ten (10) days after written notice thereof shall have
been given to the Borrower by the Bank; or
(f) Getty shall default in the performance of or compliance
with any term, covenant or provision applicable to it contained in the
Guaranty Agreement and such default shall not have been remedied within
ten (10) days after written notice thereof shall have been given to
Getty by the Bank; or
(g) the Borrower shall default in the performance of or
compliance with any other material term, covenant or provision contained
herein, other than those referred to in Section Section 7(d) and (e)
hereof, or in any of the other Loan Documents and such default shall not
have been remedied within ten (10) days or such longer period of time as
is provided for in any other Loan Documents after written notice thereof
shall have been given to the Borrower by the Bank; or
(h) Getty shall fail to make any payment required to be made
under any lease or rental agreement between Getty and Power Test as and
when such payment shall be due after giving effect to applicable grace
periods or shall fail to make any payment under any Loan Document to
which Getty is a party when the same shall become due and payable after
giving effect to applicable grace periods, or shall default in the
performance of or compliance with any term, covenant or provision
contained in any Loan Document to which Getty is a party after giving
effect to applicable grace periods; or
(i) the Borrower or Getty (i) shall fail to pay at maturity
or within any applicable period of grace, any obligation for money
borrowed or credit advanced, (ii) shall fail to observe or perform any
term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit
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<PAGE> 36
advanced, and such failure would permit the acceleration of the
indebtedness evidenced or secured by such agreement, or (iii) shall
have received notice of the existence of a default resulting from its
failure to observe or perform any term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing money
borrowed or credit advanced, and such default shall continue without
waiver thereof beyond any period of grace provided with respect
thereto; or
(j) the Borrower or Getty shall make an assignment for the
benefit of creditors or shall admit in writing its inability to pay or
shall generally fail to pay its debts as they mature or become due, or
shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of it or of any substantial part of
its assets or shall commence any case or other proceeding relating to
it under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law or similar law of
any jurisdiction, now or hereafter in effect or shall take any action
to authorize or in furtherance of any of the foregoing; or
(k) any such petition or application shall be filed or any
such proceeding shall be commenced against the Borrower or Getty and
shall remain undischarged for a period of more than 30 days after the
filing or commencement thereof or a decree or order shall be entered
appointing any such trustee, custodian, liquidator or receiver, or
adjudicating such entity a bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for
relief shall be entered in respect of such entity in an involuntary
case under federal or state bankruptcy laws as now or hereafter in
effect; or
(l) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive,
any final judgment against the Borrower or Getty which, with other
outstanding final judgments, undischarged, against the Borrower or
Getty, as the case may be, exceeds in the aggregate $50,000; or
(m) any of the Loan Documents shall for any reason cease to
be in full force and effect in accordance with its terms or the
validity or enforceability thereof shall be contested by the Borrower
or Getty, or Getty shall take any action to withdraw, disaffirm or
limit in any way its obligations under the Guaranty Agreement; or
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<PAGE> 37
(n) any Reportable Event which constitutes grounds for the
termination of any Plan or for the appointment by the appropriate
United States district court of a trustee to administer any Plan shall
have occurred and be continuing, or any Plan shall be terminated, in
either case in circumstances giving rise to liabilities which are
material in amount or otherwise having a materially adverse effect on
the financial condition of the Borrower, or a trustee shall be
appointed by a United States district court to administer any Plan, or
the Pension Benefit Guaranty Corporation shall institute proceedings to
terminate any Plan or to appoint a trustee to administer any Plan;
then and in any such event, so long as the same may be continuing, the Bank may
by notice to the Borrower declare all amounts owing to the Bank on or pursuant
to the Loan Documents to be forthwith due and payable, whereupon, as of the date
of any such notice, the same shall forthwith mature and be and become
immediately due and payable together with interest thereon as well as all other
amounts then owing on or pursuant to the Loan Documents, without presentment,
demand, protest or notice, all of which are hereby waived, provided that in the
event of any Event of Default specified in Section Section 7(j) and (k) hereof,
all such amounts shall be and become forthwith due and payable automatically and
without any requirement of notice from the Bank.
Section 8. REMEDIES ON DEFAULT, ETC. Upon the occurrence of
any Event of Default and at any time thereafter so long as the same shall be
continuing, the Bank may, in addition to accelerating the Loans, do any one or
more of the following acts, as the Bank in its sole and complete discretion may
elect:
Section 8.1. Foreclosure on Collateral. Institute legal
proceedings to foreclose upon and against the Collateral under the Mortgages,
and exercise any other right, power, privilege or remedy which may be available
to a secured party under the Uniform Commercial Code or other applicable law, to
recover all amounts then due and owing under the Loan Documents.
Section 8.2. Demand Under Guaranty Agreement. Make demand under
the Guaranty Agreement for full or partial payment of the Notes and all other
sums due hereunder or under the other Loan Documents.
Section 8.3. Set-off. Regardless of the adequacy of any
collateral, apply to or set-off, without prior notice to the Borrower or Getty,
against
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<PAGE> 38
the payment of obligations of the Borrower or Getty under the Loan
Documents and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower or Getty to the Bank, any deposits or other
sums credited by or due from the Bank (including, without limitation,
any foreign branches of the Bank) to the Borrower or Getty and any
securities or other property of Borrower or Getty in the possession of
the Bank; provided that the Bank will promptly thereafter notify the
Borrower or Getty, as the case may be, of any such set-off.
Section 8.4. Pursue Other Remedies. Proceed to protect
and enforce all or any of its rights, remedies, powers and privileges
under this Agreement, the Notes and the other Loan Documents by action
at law, suit in equity or other appropriate proceedings, whether for
specific performance of any covenant contained in this Agreement or any
of the other Loan Documents, or in aid of the exercise of any power
granted to the Bank herein or therein.
Section 9. EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Borrower will (a) reimburse
the Bank for all its reasonable out-of-pocket expenses (including but
not limited to the reasonable attorneys' fees and disbursements of the
Bank's Special Counsel and other reasonable attorneys' fees and
disbursements) incurred or expended in connection with the preparation
or interpretation of this Agreement and the other Loan Documents or any
amendment hereof or thereof, (b) pay any fees incurred in connection
with any appraisal of any Station or any property proposed to be
substituted for any Station, (c) reimburse the Bank for its expenses
incurred or expended in connection with the enforcement of any
obligations or the satisfaction of any indebtedness of the Borrower
hereunder or thereunder, or any litigation, proceeding, dispute or
so-called "workout" in any way related to the Loans, (d) pay any taxes
(including any interest and penalties in respect thereof), other than
the Bank's federal and state income or franchise taxes, payable on or
with respect to the transactions contemplated by this Agreement (the
Borrower hereby agreeing to indemnify the Bank with respect thereto)
and (e) pay and hold the Bank and any holder of any Note harmless from
and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and to save the Bank and
the holder of any Note harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to
pay such taxes.
Section 10. NOTICE, ETC. All notices and other communications
made or required to be given pursuant to this Agreement shall be deemed
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<PAGE> 39
delivered if in writing (or in the form of a telecopy confirmed by letter)
addressed as provided below and if either (a) actually delivered at said
address, or (b) in the case of a letter, five Business Days shall have elapsed
after the same shall have been deposited in the United States mails, postage
prepaid and registered or certified:
(i) if to the Borrower, at 125 Jericho Turnpike, Jericho, New York
11753, Attention: John J. Fitteron, Senior Vice President and Chief
Financial Officer, or at such other address for notice as the Borrower
shall last have furnished in writing to the Person giving such notice; or
(ii) if to the Bank, at 75 State Street, Boston, Massachusetts
02109, Attention: Thomas F. McNamara, Vice President, or at such other
address for notice as the Bank shall last have furnished in writing to the
Person giving such notice,
Section 11. MISCELLANEOUS. This Agreement is subject to final acceptance
in the Commonwealth of Massachusetts. This Agreement shall be deemed to be a
contract under the laws of the Commonwealth of Massachusetts and shall for all
purposes be construed in accordance with and governed by the laws thereof. The
rights and remedies herein expressed are cumulative and not exclusive of any
other rights which the Bank would otherwise have. Whether or not any Loans are
outstanding, this Agreement shall continue in full force and effect until all
obligations of the Borrower under any of the Loan Documents have been fully
paid. The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof. This Agreement or any
amendment may be executed in separate counterparts by the parties hereto, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Agreement, it shall
not be necessary to produce or account for more than one such counterpart
executed by each of the parties hereto. This Agreement and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
orally or in writing, except as provided in Section 12 hereof of this Agreement.
Section 12. CONSENTS, AMENDMENTS, WAIVERS, ACKNOWLEDGMENTS, ETC. Except
as otherwise expressly provided in this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Bank may be given,
and any term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the
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<PAGE> 40
performance or observance by the Borrower of any terms of this
Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of the Borrower and the written consent of the Bank.
No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
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<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as a sealed
instrument as of the date first set forth at the beginning of this
Agreement.
LEEMILT's PETROLEUM, INC.
By: John J. Fitteron
------------------------
John J. Fitteron
Senior Vice President
FLEET BANK OF MASSACHUSETTS, N.A.
By: Thomas F. McNamara
----------------------
Thomas F. McNamara
Vice President
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<PAGE> 42
AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of October 27, 1995, by
and between GETTY PETROLEUM CORP., a Delaware corporation having its principal
place of business at 125 Jericho Turnpike, Jericho, New York 11753 (the
"Guarantor") and FLEET BANK OF MASSACHUSETTS, N.A. (the "Bank").
This Amended and Restated Guaranty Agreement amends and restates the
Guaranty Agreement dated as of December 7, 1987 between the Guarantor and Bank
of New England, N.A. The Bank is the successor by name change to Fleet National
Bank of Boston, which was the successor in interest to the Federal Deposit
Insurance Corporation, as Receiver for New Bank of New England, N.A., which was
the successor in interest to the Federal Deposit Insurance Corporation, as
Receiver for Bank of New England, N.A.
In order to induce the Bank to refinance loans in the principal amount of
$18,319,521.00 to Leemilt's Petroleum, Inc., a New York corporation and a wholly
owned Subsidiary of the Guarantor (the "Borrower"), pursuant to an Amended and
Restated Loan Agreement dated as of the date hereof by and between the Borrower
and the Bank (the "Loan Agreement"), the Guarantor is entering into this
Agreement with the Bank pursuant to which the Guarantor guarantees the payment
and performance in full of all of the Obligations (as that term is hereinafter
defined).
Accordingly, in consideration of the Bank's commitment to refinance loans
to the Borrower pursuant to the Loan Agreement and in consideration of the
premises and of the covenants herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Definitions. The following terms shall have the meanings set
forth in this Section 1 hereof or elsewhere in the provisions of this Agreement
referred to below:
Agreement means this Amended and Restated Guaranty
Agreement as originally executed, or, if this Amended and Restated
Guaranty Agreement is amended, modified or supplemented, as so
amended, modified or supplemented.
Bank means Fleet Bank of Massachusetts, N.A.
<PAGE> 43
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Borrower means Leemilt's Petroleum, Inc., a New York corporation.
Contingent Liabilities means any guaranties, endorsements, agreements to
purchase or provide funds for the payment of obligations of others, or other
liabilities which would be classified as contingent in accordance with generally
accepted accounting principles consistently applied, excluding, however,
endorsements of checks or other negotiable instruments for deposit or collection
in the ordinary course of business.
Guarantor means Getty Petroleum Corp., a Delaware corporation.
Loans means the loans from the Bank to the Borrower pursuant to the terms
of the Loan Agreement.
Loan Agreement means the Amended and Restated Loan Agreement dated as of
the date hereof between the Borrower and the Bank, as originally executed, or if
amended, modified or supplemented, as so amended, modified or supplemented.
Notes means, collectively, the Amended and Restated Master Note and the
Collateral Note(s), or if amended, modified or supplemented, as so amended,
modified or supplemented, and any note issued in exchange for or replacement of
any such note pursuant to the terms of the Loan Agreement.
Obligations means all indebtedness, obligations and liabilities, direct
or indirect, matured or unmatured, primary or secondary, certain or contingent,
of the Borrower to the Bank for the payment of money now or hereafter owing or
incurred (including, without limitation, reasonable costs and expenses incurred
by the Bank in attempting to collect or enforce any of the foregoing) which are
chargeable to the Borrower and which arise under or pursuant to the Loan
Agreement or the Notes, accrued in each case to the date of payment hereunder,
and Obligation means any one of the Obligations.
Other Business(es) has the meaning set forth in Section 16.2 hereof.
Subsidiary means, with respect to any Person that is not an individual,
any other present or future corporation or other legal entity a majority of
whose outstanding capital stock or other
<PAGE> 44
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ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions is at the time
owned directly or indirectly by such Person.
All other capitalized terms used herein which are defined in the
Loan Agreement have the meanings ascribed to them therein, unless they
are expressly otherwise defined herein.
Section 2. Guaranty of Payment.
Section 2.1. Guaranty of Payment of Obligations. The Guarantor hereby
unconditionally guarantees to the Bank the payment in full of each
Obligation, when and as such Obligation becomes due and payable in
accordance with the terms of the Loan Agreement and the Notes, whether
such Obligation is outstanding on the date hereof or arises or is incurred
hereafter. The guaranty hereby made by the Guarantor is an absolute,
unconditional and continuing guaranty of the full and punctual payment
by the Borrower of all of the Obligations in accordance with the terms of
the Loan Agreement and not of their collectibility only and is in no way
conditioned upon any requirement that the Bank first attempt to collect
any of the Obligations from the Borrower or resort to any other security,
collateral or other means of obtaining payment of any of the Obligations
which the Bank now has or may acquire after the date hereof, or upon any
other contingency whatsoever.
Section 2.2. Payments. If the Borrower shall fail to make any payment of
any Obligation punctually when and as such obligation shall become due
and payable and such failure shall continue beyond the period of grace, if
any, applicable thereto, then the Guarantor hereby agrees to make such
payment of such Obligation, in funds immediately available to the Bank,
upon written demand by the Bank.
Section 2.3. Continuing Security of this Agreement. This Agreement and
the rights, remedies, powers and privileges of the Bank hereunder shall
not in any way be prejudiced or affected by an intermediate payment by
the Borrower of any part of the Obligations. This Agreement and the
obligations of the Guarantor hereunder shall be in addition to and shall
not in any way be prejudiced or affected by any other collateral or other
security or guarantees now or hereafter held by the Bank for all or any
part of the Obligations, and every right, remedy, power or privilege given
to the Bank hereunder shall be in addition to and not a limitation of any
and every other right, remedy, power or privilege vested in the Bank
under any other collateral. No assurances, security or payment of any of
<PAGE> 45
-4-
the Obligations which is avoided under any enactment relating to bankruptcy,
liquidation or insolvency, and no release, settlement or discharge given or made
by the Bank on the faith of any such assurance, security or payment shall
prejudice or affect the right of the Bank to recover from the Guarantor to the
full extent of the guaranty hereby made by the Guarantor as if such assurance,
security, payment, release, settlement or discharge (as the case may be) had
never been given or made.
Section 3. Demands for Payment. Each demand for payment pursuant to
Section 2.2 hereof shall be made in accordance with the terms of Section 18
hereof. Demands for payment hereunder may be made on any number of occasions. A
dated statement signed by an officer of the Bank and setting forth the amount of
the Obligations at the time owing to the Bank, or (as the case may be) setting
forth the amount of the obligations at the time owing by the Guarantor to the
Bank pursuant to Section 9 hereof, shall, save for manifest error, be prima
facie evidence thereof as between the Guarantor and the Bank in any legal
proceedings against the Guarantor in connection with this Agreement.
Section 4. Waivers of Notice, Assent, Etc. The Guarantor hereby waives
notice of acceptance of this Agreement, notice of any and all loans or advances
made or other financial accommodations extended to the Borrower by the Bank
under the Loan Agreement, notice of the occurrence of any Default or Event of
Default or of any demand upon the Borrower for any payment under the Loan
Agreement, notice of any action at any time taken or omitted by the Bank under
or in respect of the Loan Agreement or any of the Obligations, any requirement
of diligence or to mitigate damages and, generally, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise expressly provided hereby), the Loan Agreement or any of the
Obligations. The Guarantor hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Bank at any time or times in respect of any
default by the Borrower in the performance or satisfaction of any term,
covenant, condition or provision of the Loan Agreement, any amendment,
modification or waiver to the Loan Agreement, the Notes or any other Loan
Document, any and all other indulgences whatsoever by the Bank in respect of any
of the Obligations or otherwise, the taking, addition, substitution or release,
in whole or in part, at any time or times, of any security for any of the
Obligations, the addition, substitution or release, in whole or in part, of any
person or persons (other than the Borrower) primarily or secondarily liable in
respect of any of the Obligations or any
<PAGE> 46
-5-
other events or circumstances which might constitute a legal or equitable
discharge of a surety or guaranty. Without limitation of the generality of the
foregoing, the Guarantor assents to any other action or delay in acting or
failure to act on the part of the Bank, including, without limitation, any
failure strictly or diligently to assert any right or pursue any remedy or to
mitigate damages or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 4 hereof, afford
grounds for terminating, discharging or relieving the Guarantor, in whole or in
part, from any of its absolute and unconditional obligations hereunder, it being
the intention of the Guarantor that, so long as any of the Obligations remains
unsatisfied, the obligations of the Guarantor hereunder shall not be discharged
except by payment and then only to the extent of such payment. The obligations
of the Guarantor hereunder shall not be diminished or rendered unenforceable by
any bankruptcy, winding up, reorganization, arrangement, liquidation or similar
proceeding with respect to the Borrower, the Guarantor or the Bank. The
guaranty hereby made by the Guarantor shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of the
Borrower, the Guarantor or the Bank.
Section 5. Place and Mode of Payments. Each payment by the Guarantor
under or in respect of this Agreement shall be made to the Bank in immediately
available and freely transferable funds at the Bank's office at 75 State Street,
Boston, Massachusetts 02109, Attention: Thomas F. McNamara, Vice President.
Section 6. Set-off. Regardless of the adequacy of any collateral or other
means of obtaining prepayment of the Obligations, the Bank may at any time and
without prior notice to the Guarantor set-off the whole or any portion or
portions of any or all deposits and other sums credited by or due from the Bank
to the Guarantor against amounts payable under this Agreement, whether or not
any other person or persons could also withdraw money therefrom. The Bank will
promptly thereafter notify the Guarantor of any such set-off.
Section 7. Freedom to Deal with Borrower and Other Banks. The Bank shall
be at liberty, without giving notice to or obtaining the assent of the Guarantor
and without relieving the Guarantor of any liability hereunder, to deal with the
Borrower and with each other party who now is or after the date hereof becomes
liable in any manner for any of the Obligations, in such manner as the Bank in
its sole discretion deems fit, and to this end the Guarantor agrees that the
Bank may in its sole discretion do any or all of the following things: (a)
extend credit, make loans and afford
<PAGE> 47
-6-
other financial accommodations to the Borrower at such times, in such amounts
and on such terms as the Bank may approve, (b) vary the terms and grant
extensions or renewals of any present or future indebtedness or obligation to
the Bank of the Borrower or of any such other party, (c) grant time, waivers and
other indulgences in respect thereto, (d) vary, exchange, release or discharge,
wholly or partially, or delay in or abstain from perfecting and enforcing any
security or guaranty or other means of obtaining payment of any of the
Obligations which the Bank now have or acquire after the date hereof, (e) accept
partial payments from the Borrower or any such other party, (f) release or
discharge, wholly or partially, any endorser or guarantor, and (g) compromise or
make any settlement or other arrangement with the Borrower or any such other
party.
Section 8. Election of Remedies. This Agreement may be enforced by the
Bank from time to time as often as occasion therefor may arise and without any
requirement on the part of the Bank first to exercise any rights against the
Borrower or any other person or to exhaust any remedies available to the Bank
against the Borrower or any other person or to resort to any collateral or
security for any of the Obligations which is in the possession or under the
control of the Bank or to resort to any other source or means of obtaining
payment or enforcing payment of the Obligations or any of them.
Section 9. Expenses. The Guarantor hereby agrees to pay upon demand by the
Bank all reasonable out-of-pocket costs and expenses, including, but not limited
to, court costs and expenses and the fees and disbursements of lawyers, incurred
or expended by the Bank in connection with the enforcement of this Agreement,
together with interest on amounts recoverable under this Section 9 hereof from
the time such amounts become due until payment at the rate applicable to amounts
overdue under the Loan Agreement. The covenant contained in this Section 9
hereof shall survive the payment in full of all of the Obligations.
Section 10. Further Assurances. The Guarantor will, at any time and from
time to time, upon request by the Bank, take or cause to be taken any action and
execute and deliver such, if any, further documents as, in the reasonable
opinion of the Bank, are necessary in order to give full effect to this
Agreement and to preserve the rights, powers, privileges and remedies of the
Bank hereunder.
Section 11. Waiver of Certain Defenses. The Guarantor hereby absolutely
and irrevocably waives, to the fullest extent permitted by law, any and all
defenses which may now or hereafter exist in respect of its
<PAGE> 48
-7-
obligations hereunder by virtue of any statute of limitations, stay or
moratorium law or other similar law now or hereafter in effect.
Section 12. Unenforceability of Obligations Against Borrower, Etc. It is
hereby agreed as a separate and independent stipulation that, if for any reason
the Borrower ceases to have any legal obligation to discharge the Obligations or
any of them, or if any of the moneys included in the Obligations have become
irrecoverable from the Borrower by operation of law or for any other reason, or
if any of the Obligations become unenforceable against the Borrower by operation
of law or for any other reason, this Agreement and the obligations of the
Guarantor hereunder shall nevertheless be binding on the Guarantor to the same
extent as if the Guarantor at all times prior to demand by the Bank for payment
hereunder had been, and at the time of, such demand was, the principal debtor on
all of such Obligations.
Section 13. Amendments and Waivers. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the Bank and the Guarantor expressly referring to this
Agreement and to the provisions so changed, waived, discharged or terminated.
No such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing by the Bank and no
delay or omission on the part of the Bank in exercising any right or remedy
hereunder shall operate as a waiver of that or any other right or remedy
hereunder or otherwise be prejudicial thereto.
Section 14. Representations and Warranties of the Guarantor. The
Guarantor represents and warrants to the Bank that on and as of the date hereof:
(a) Organization; Good Standin, The Guarantor (i) is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware, (ii) has all requisite corporate power to
own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where the nature of its
properties or its business requires such qualification and in which
failure so to qualify would materially adversely affect its business
or financial condition.
(b) Authorization. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby (i) are
within the corporate authority of the Guarantor, (ii)
<PAGE> 49
-8-
have been duly authorized by all proper corporate proceedings required to
make this Agreement the valid and enforceable obligation it purports to be,
(iii) will not contravene any provision of law, the charter documents or
by-laws of the Guarantor or any other material agreement, instrument or
undertaking binding upon the Guarantor, and (iv) do not require any
approval or consent of, or filing with, any governmental agency or
authority.
(c) Enforceability. Upon execution by the parties hereto, this
Agreement will be the valid and legally binding obligation of the
Guarantor, enforceable against it in accordance with the terms hereof,
except to the extent that the enforcement of the rights and remedies of the
Bank may be subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting generally the enforcement of creditors' rights
and remedies, and the availability of equitable remedies may be subject to
the discretion of the court before which any proceeding thereof is brought.
Section 14.2. Governmental Approvals. No approval or consent or filing
with any governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Guarantor of this
Agreement.
Section 14.3. Financial Statements. The Guarantor has furnished to the Bank
(a) the audited consolidated financial statements of the Guarantor as at January
31, 1995 and (b) the unaudited consolidated financial statements of the
Guarantor as at July 31, 1995. Such financial statements were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and fairly present the financial position of the Guarantor as at the
respective dates thereof and its respective results of operations for the fiscal
year or quarter then ended.
Section 14.4. No Material Changes. Since July 31, 1995, there has been no
materially adverse change in the assets, liabilities, financial condition or
business of the Guarantor.
Section 14.5. Compliance With Other. Instruments, Laws, Etc. The Guarantor
is not in violation of any provision of its charter documents or by-laws or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, or any statute, license,
rule or regulation, in any of the foregoing cases in a manner which could result
in the imposition of
<PAGE> 50
-9-
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Guarantor.
Section 14.6. Governmental Approvals. The execution, delivery and
performance by the Guarantor of this Agreement and the transactions contemplated
hereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
Section 14.7. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Guarantor, threatened against or affecting
the Guarantor, or any properties or rights of the Guarantor, which, if adversely
determined, would materially impair the ability of the Guarantor to carry on its
business substantially as now conducted or would materially adversely affect the
financial condition of the Guarantor.
Section 14.8. Chief Executive Offices. Until the Bank receives notice of
a change, the chief executive offices of the Guarantor and the offices where
all the records and books of account of the Guarantor are kept shall be located
at 125 Jericho Turnpike, Jericho, New York 11753.
Section 14.9. Indebtedness. No instrument evidencing or relating to any
Indebtedness of the Guarantor contains any restriction prohibiting the Guarantor
from incurring any other Indebtedness or Contingent Liabilities or any provision
requiring the Guarantor to maintain any minimum level of net worth or comply
with any other financial covenants except for the Loan Agreement dated as of
June 13, 1994 among Getty, Chemical Bank and National Westminster Bank USA.
Section 14.10. True Copies of Charter Documents. The Guarantor has
furnished or caused to be furnished to the Bank true and complete copies of the
charter documents and by-laws of the Guarantor, together with any amendments
thereto.
Section 14.11. Guaranteed Pension Plans. The Guarantor does not contribute
to any Guaranteed Pension Plans. The Guarantor does not contribute to any
multiemployer pension plans.
Section 14.12. Disclosure. No material representation or warranty made by
the Guarantor in any Loan Document or in any agreement, instrument, document,
certificate, statement or letter furnished to the Bank by or on behalf of the
Guarantor in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue
<PAGE> 51
-10-
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading in light of
the circumstances in which they are made. There is no fact known to any
officer of the Guarantor which materially adversely affects, or which, in
the best judgment of any officer of the Guarantor, would in the future
materially adversely affect, the financial position, business, operations or
affairs of the Guarantor.
Section 15. Affirmative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note is
outstanding, or any Obligations are outstanding:
Section 15.1. Conduct of Business. The Guarantor will:
(a) do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights (charter and
statutory), and franchises, licenses, material trademarks and service
marks, and copyrights; and
(b) keep true and accurate records and books of account, prepared in
accordance with generally accepted accounting principles, consistently
applied;
(c) cause all of its properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Guarantor may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times, and continue to engage primarily in
the business now conducted by it and in related businesses, except as may
be otherwise permitted under Section 16.2 hereof.
Section 15.2. Compliance with Agreements and Contracts. The Guarantor will
observe, conform to and comply with the provisions of its charter documents and
by-laws, all leases, and all agreements and instruments by which it or any of
its properties may be bound.
Section 15.3. Compliance with Law. The Guarantor will (a) comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees
or awards to which it may be subject, noncompliance with which would
have a materially adverse effect on the business, operations or financial
condition of the Guarantor or the ability of the Guarantor to fulfill its
<PAGE> 52
-11-
obligations under this Agreement and (b) promptly obtain, maintain,
apply for renewal, and not allow to lapse, any authorization, consent,
approval, license or order, and accomplish any filing or registration with,
any court or judicial, administrative or governmental authority, which
may be or may become necessary in order that it perform all of its
obligations under this Agreement and in order that the same may be valid
and binding and effective in accordance with its terms and in order that
the Bank may be able freely to exercise and enforce any and all of its
rights under this Agreement.
Section 15.4. Notification of Material Litigation, Default, Etc. The
Guarantor will promptly notify the Bank of (a) the commencement of any
litigation or administrative proceeding initiated against it (if it has
knowledge of the same) which is likely to involve any material risk of any
material judgment or liability not substantially covered by insurance or which
may otherwise result in a materially adverse change in the assets, financial
condition or business of the Guarantor, and (b) the occurrence of any Default or
Event of Default. The Guarantor will promptly give notice to the Bank of the
occurrence of any material default under any material instrument or agreement to
which the Guarantor (if it has knowledge of the same) is a party, and if any
person shall give any written notice or take any other action in respect of a
claimed default under any other material evidence of Indebtedness, indenture,
note or other obligation as to which the Guarantor is a party or obligor,
whether as principal or surety, the Guarantor shall promptly give written notice
thereof to the Bank, describing the notice or action and the nature of the
claimed default.
Section 15.5. Financial Statements, Certificates and Other Information. The
Guarantor will furnish to the Bank:
(a) as soon as available but in any event within forty-five
(45) days after the end of each of the first three fiscal quarters in
any fiscal year of the Guarantor, an unaudited consolidated balance
sheet for the Guarantor and its Subsidiaries as at the end of such
quarter, and an unaudited consolidated statement of income and
statement of changes in financial position for the Guarantor and its
Subsidiaries for the period commencing with the end of the
preceding fiscal year and ending with the end of such quarter,
together with a certificate of the chief financial officer of the
Guarantor stating that such financial statements fairly present the
financial condition of the Guarantor and its Subsidiaries as of the
date thereof and have been prepared in accordance with generally
<PAGE> 53
-12-
accepted accounting principles consistently applied, subject, however,
to audit and year-end adjustments;
(b) as soon as available but in any event within ninety (90) days
after the end of each fiscal year, an audited consolidated balance sheet
for the Guarantor and its Subsidiaries as at the end of such fiscal year,
and an audited consolidated statement of income and statement of changes
in financial position for the Guarantor and its Subsidiaries for such
fiscal year, prepared in accordance with generally accepted accounting
principles consistently applied, in each case accompanied by the opinion
of and report by Coopers & Lybrand or other independent certified public
accountants of nationally recognized standing selected by the Guarantor
and acceptable to the Bank, such opinion to be unqualified as to scope
limitations imposed by the Guarantor, and otherwise, without qualification
except as therein noted;
(c) accompanying each set of financial statements of the Guarantor
furnished pursuant to paragraph (a) or (b) above, an Officer's Certificate
stating that a review of the activities of the Guarantor and the Borrower
during the period covered by such financial statements has been made under
the supervision of the signer with a view to determining whether, during
such period, each of the Guarantor and the Borrower has kept, observed,
performed and fulfilled each and every covenant and condition of each of
the Loan Documents to which it is a party and either (i) stating that, to
the best of his knowledge and belief, there neither exists on the date of
such certificate, nor existed during such period, any default under any
existing loan or credit agreement to which the Guarantor or the Borrower
is a party, or (ii) if any such default under any existing loan or credit
agreement to which the Guarantor or the Borrower is a party existed or
exists, specifying the nature thereof, the period of existence thereof and
what action the Guarantor or the Borrower, as appropriate, has taken, is
taking or proposes to take with respect thereto;
(d) accompanying each set of financial statements of the Guarantor
set forth in paragraph (b) above, a certificate of the accounting firm
stating that they have read a copy of this Agreement and that, in the
course of their regular audit of the business of the Guarantor, which was
conducted in accordance with generally accepted auditing standards,
nothing has come to their attention that caused them to believe that any
default under any existing loan or credit agreement to which the Guarantor
or the
<PAGE> 54
-13-
Borrower is a party has occurred during the fiscal year in question or
exists at the date of such certificate or, if in the opinion of such firm a
default under any existing loan or credit agreement to which the Guarantor
or the Borrower is a party has so existed or exists, a statement as to the
nature thereof;
(e) contemporaneously with the filing or mailing thereof, copies of
such other financial statements or reports as the Guarantor shall send to
its stockholders, and copies of all regular, and periodic and other reports
which the Guarantor may be required to file with the Securities and
Exchange Commission or any other governmental commission, department,
board, bureau or agency, federal or state (including without limitation all
reports on Forms 10-K, 10-Q and 8-K); and
(f) with reasonable promptness, such other information relating to
the business or financial affairs of the Guarantor as the Bank may
reasonably request.
Section 15.6. Notice of Material Change. The Guarantor will promptly
notify the Bank of any materially adverse change in its financial condition,
business or operations.
Section 15.7. Inspection of Properties and Books. The Bank or any of
its designated representatives shall have the right to visit and inspect any of
the properties of the Guarantor, to examine the books of account of the
Guarantor, and to discuss the affairs, finances and accounts of the Guarantor
with, and to be advised as to the same by, its officers, all at such reasonable
times and intervals as the Bank may desire.
Section 15.8. ERISA. The Guarantor will promptly notify the Bank of
any Reportable Event (other than a Reportable Event as to which the Pension
Benefit Guaranty Corporation has waived the applicable 30-day notice requirement
pursuant to the provisions of ERISA) or any notice of termination of any Plan
under Sections 4041 or 4042 of ERISA. The Guarantor shall not permit any
employee pension benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Guarantor to (a) engage in any "prohibited transaction" as
such term is defined in Section 4975 of the Code which might result in a
material liability for the Guarantor, or (b) incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
waived, or (c) terminate any such benefit plan in a manner which could result in
the imposition of any material lien or encumbrance on the assets of the
Guarantor under Section 4068 of ERISA.
<PAGE> 55
-14-
Section 15.9. Maintenance of Office. The Guarantor will maintain its
chief executive office in Jericho, New York, or at such other place in the
United States of America as the Guarantor shall designate upon written
notice to the Bank, where notices, presentations and demands to or upon
the Guarantor in respect of this Agreement may be made.
Section 15.10. Further Assurances. The Guarantor shall at any time or
from time to time execute and deliver such further instruments and take
such further action as may reasonably be requested by the Bank, in each
case further and more perfectly to effect the purposes of this Agreement.
Section 16. Negative Covenants. The Guarantor covenants and agrees
that, so long as any of the Loans, the Master Note or any Collateral Note
is outstanding, or any Obligations are outstanding:
Section 16.1. Merger or Sale of Assets. The Guarantor will not:
(a) consolidate or merge with or into any other Person unless (i)
after giving effect to such consolidation or merger, no Default or Event
of Default exists and (ii) the Guarantor is the surviving corporation of
such consolidation or merger; or
(b) sell, lease, transfer or otherwise dispose of all or any
substantial portion of its assets;
(c) permit its ownership of the issued and outstanding capital stock
of the Borrower to be less than 80%; or
(d) cause the Borrower to have outstanding any commitments, options,
warrants, calls or other agreements or obligations (whether written or
oral) binding on the Borrower or which require or could require the
Borrower to issue, sell, grant, transfer, assign, mortgage, pledge or
otherwise dispose of more than 19% of (i) any securities exchangeable for
or convertible into or carrying any rights to acquire any other right of
any kind in the capital of the Borrower or (ii) any options, warrants, or
any other rights to acquire any right of any kind in the capital of the
Borrower.
Section 16.2. Lines of Business. The Guarantor will not directly or
indirectly through a Subsidiary engage in any business other than the retail and
wholesale distribution of petroleum products and the operation of convenience
stores or other retail businesses related to the operation of
<PAGE> 56
-15-
gasoline service stations or other businesses which can reasonably be
conducted at gasoline service stations, except that the Guarantor may
engage in any other business (each an "Other Business" and collectively
"Other Businesses") (including the ownership and operation of petroleum
refineries) acquired by the Guarantor if the aggregate purchase price
(including any direct or contingent liabilities assumed by the Guarantor
in connection with such acquisition) for such Other Business, plus the
aggregate purchase prices (including assumed liabilities) for all Other
Businesses previously acquired by the Guarantor, does not exceed
$25,000,000. The Bank shall have the right to approve all purchase price
allocations made in connection with any such acquisition of an Other
Business or Other Businesses as the same relate to compliance with this Section
16.2 hereof.
Section 16.3. Acquisitions. The Guarantor will provide the Bank with
reasonable advance notice of any proposed acquisitions of assets or stock
(whether directly by the Guarantor or indirectly through a Subsidiary of
the Guarantor) with respect to which the aggregate purchase price
(including any assumption of liabilities) is $25,000,000 or more and will
provide to the Bank all information relating to such transactions as may
be reasonably requested by the Bank.
Section 16.4. Interest Rate Protection Arrangements. The Guarantor will
not and will not permit the Borrower to enter into any interest rate
protection arrangements with respect to the Loans with any Person other
than the Bank, unless the Guarantor shall have first requested the Bank
to enter into an interest rate protection arrangement on terms and
conditions proposed in good faith by the Borrower and the Bank shall
have declined such request.
Section 17. Survival of Covenants. All covenants, agreements,
representations and warranties made herein shall be deemed to have been
relied on by the Bank notwithstanding any investigation made by the
Bank or on its behalf, and shall survive the execution and delivery of this
Agreement.
Section 18. Notices, Etc. (a) The Bank shall provide the Guarantor with a
copy of each notice sent to the Borrower pursuant to Section 7 of the Loan
Agreement. No failure of the Bank to provide any such notice shall
operate to relieve the Guarantor of any of its obligations hereunder.
(b) Except as otherwise expressly provided herein, all notices and
other communications made or required to be given pursuant to this
Agreement shall be deemed delivered if in writing (or in the form of a
<PAGE> 57
-16-
telecopy confirmed by letter) addressed as provided below and if either (i)
actually delivered at said address, or (ii) in the case of a letter, five
Business Days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified:
(x) if to the Guarantor, at 125 Jericho Turnpike, Jericho, New
York 11753, Attention: John J. Fitteron, Senior Vice President and Chief
Financial Officer, or at such other address for notice as the Guarantor
shall last have furnished in writing to the Person giving the notice; or
(y) if to the Bank, at 75 State Street, Boston, Massachusetts
02109, Attention: Thomas F. McNamara, Vice President, or at such other
address for notice as the Bank shall last have furnished in writing to the
Person giving the notice.
Section 19. Governing Law; Miscellaneous. This Agreement is intended to
take effect as a sealed instrument to be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts and
shall inure to the benefit of the Bank and its successors and assigns, and
shall be binding on the Guarantor and the Guarantor's successors, assigns
and legal representatives. The descriptive headings of the sections hereof
have been inserted herein for convenience of reference only and shall not
define or limit the provisions hereof.
Section 20. Counterparts. This Agreement may be executed in any
number of counterparts, but all of such counterparts together shall
constitute one and the same agreement. In making proof of this
Agreement, it shall not be necessary to produce or account for more than
one counterpart hereof executed by each of the parties hereto.
<PAGE> 58
-17-
IN WITNESS WHEREOF, this Agreement has been executed by or
on behalf of the parties hereto as an instrument under seal as of the day
first above written.
GETTY PETROLEUM CORP.
BY: John J. Fitteron
-----------------------------------
Name: John J. Fitteron
Title: Senior Vice President and Chief
Financial Officer
FLEET BANK OF MASSACHUSETTS, N.A.
By: Thomas F. McNamara
-----------------------------------
Name: Thomas F. McNamara
Title: Vice President
<PAGE> 59
-17-
IN WITNESS WHEREOF, this Agreement has been executed by or
on behalf of the parties hereto as an instrument under seal as of the day
first above written.
GETTY PETROLEUM CORP.
By:
-----------------------------------
Name: John J. Fitteron
Title: Senior Vice President and Chief
Financial Officer
FLEET BANK OF MASSACHUSETTS, N.A.
by: THOMAS F. McNAMARA
-----------------------------------
Name: Thomas F. McNamara
Title: Vice President
<PAGE> 60
SCHEDULE I
[LIST OF STATIONS AND LOCATIONS]
<PAGE> 61
SCHEDULE 3.4
LEEMILT'S PETROLEUM, INC.
Schedule 3.4(b)
Getty is the recipient of numerous notices, directives and orders
requiring environmental investigation and remediation at certain of the
Stations. Getty is also a party defendant in several lawsuits brought by
private third-parties and by the Attorney General of New York seeking
reimbursement for monies expended by the New York State Spill Fund.
The foregoing will not have a material affect on the business or assets of
Getty or the Borrower.
<PAGE> 62
LEEMILT'S PETROLEUM, INC.
Schedule 3.4(c)
The Stations have underground storage tanks, which store gasoline
and, in some instances, diesel fuel. In addition, some of the Stations have
underground storage tanks, which store waste oil which may contain
Hazardous Substances, and some store No. 2 fuel oil for heating purposes.
Some stations contain dry wells which may contain Hazardous Substances
and the dry wells are being closed pursuant to Getty's closure program, in
order to comply with the Safe Drinking Water Act and regulations
promulgated thereon. All of the Stations are subleased to independent
dealers who are contractually required to comply with Environmental
Laws and the inventory control program.
<PAGE> 63
LEEMILT'S PETROLEUM, INC.
Schedule 3.4(d)
Getty has retained contractors and consultants to perform
environmental investigations and remediations at certain of the Stations.
<PAGE> 64
LEEMILT'S PETROLEUM, INC.
Schedule 5.4
1. Property insurance to cover "all risks", including Flood (with
sublimit for flood of $1,000,000) and earthquake, on a repair and
replacement value basis with minimum coverage amount of
$5,000,000 per occurrence with deductible not in excess of
$1,000,000 for Service Stations and including All States
endorsements.
2. Comprehensive general liability/automobile insurance in a
minimum coverage amount of $25,000,000 with the following
endorsements:
(a) broad form property damage;
(b) broad form contractual liability;
(c) personal injury liability; and
(d) products and completed operations coverage.
3. Workers compensation insurance as required by applicable law, and
employer's liability at $1,000,000, including All States
endorsement.
<PAGE> 65
EXHIBIT A
AMENDED AND RESTATED
MASTER NOTE
$18,319,521.00 Date: October 27, 1995
FOR VALUE RECEIVED, the undersigned, LEEMILT'S
PETROLEUM, INC., a New York corporation (hereinafter, together with
its successors in title and assigns, called the "Borrower"), by this
promissory note (hereinafter called "this Note"), absolutely and
unconditionally promises to pay to the order of FLEET BANK OF
MASSACHUSETTS, N.A., a national banking association organized under
the laws of the United States of America (successor by name change to
Fleet National Bank of Boston, which was the successor in interest to the
Federal Deposit Insurance Corporation, as Receiver for New Bank of New
England, N.A., which was the successor in interest to the Federal Deposit
Insurance Corporation, as Receiver for Bank of New England, N.A.
("BNE")) (hereinafter, together with its successors in title and assigns,
called the "Bank") at the Bank's head offices at 75 State Street, Boston,
Massachusetts 02109, the principal sum of Eighteen Million Three
Hundred Nineteen Thousand Five Hundred Twenty-One and No/100
Dollars ($18,319,521.00), or, if less, the aggregate unpaid principal
amount of the Loans (as defined in the Loan Agreement) made by the
Bank to the Borrower pursuant to the Amended and Restated Loan
Agreement between the Bank and the Borrower dated as of even date
herewith (hereinafter, as executed, or if further varied, amended, modified
or supplemented from time to time, as so further varied, amended,
modified or supplemented, called the "Loan Agreement"), which Loan
Agreement amends and restates the Original Loan Agreement referred to
below.
This Note is issued in order to amend and restate the Borrower's Master
Note dated December 7, 1987, executed and delivered to the Bank in connection
with the Loan Agreement between the Borrower and BNE dated as of December 7,
1987 (the "Original Loan Agreement") and is not issued in payment, satisfaction
or cancellation of the obligations evidenced by the Original Note, all of which
will deemed to be continued and to be evidenced by this Note. This Note is
secured by the Bank's mortgage liens and security interests in property of the
Borrower created
<PAGE> 66
-2-
pursuant to the agreements and instruments executed and delivered by
the Borrower in connection with such Original Loan Agreement. The
issuance of this Note by the Borrower shall in no way release, impair or
interrupt the continued perfection and priority of such mortgage liens and
security interests in favor of the Bank as collateral security for the
obligations of the Borrower evidenced hereby.
The Borrower promises to pay interest on the principal sum
outstanding hereunder from time to time from the date hereof until the
said principal sum or the unpaid portion thereof shall have become due
and payable at the rates and terms in all cases in accordance with the
terms of the Loan Agreement.
The entire principal amount of this Note shall be payable by the
Borrower to the holder hereof in accordance with Section 2 of the Loan
Agreement.
On November 1, 2000, the date of the final maturity of this Note,
there shall become absolutely due and payable hereunder, and the
Borrower hereby promises to pay to the Bank, the balance (if any) of the
principal hereof then remaining unpaid, all of the unpaid interest accrued
hereon and all (if any) other amounts payable on or in respect of this Note
or the indebtedness evidenced hereby.
Each overdue amount (whether of principal, interest or otherwise)
payable on or in respect of this Note or the indebtedness evidenced hereby
shall (to the extent permitted by applicable law) bear interest, from the
date on which such amount shall have become due and payable in
accordance with the terms hereof to the date on which such amount shall
be paid to the Bank (whether before or after judgment), at the rate of
interest in effect from time to time in accordance with the Loan
Agreement. The unpaid interest accrued on each overdue amount in
accordance with the foregoing terms of this Paragraph shall become
absolutely due and payable by the Borrower to the Bank on demand by
the Bank. Interest on each overdue amount will continue to accrue, as
provided by the foregoing terms of this Paragraph, and will (to the extent
permitted by applicable law) be compounded monthly until the obligations
of the Borrower in respect of the payment of such overdue amount shall be
discharged (whether before or after judgment).
All computations of interest payable as provided in this Note shall
be made by the Bank on the basis of the actual number of days elapsed
divided by 360.
<PAGE> 67
-3-
This Note has been executed and delivered to the Bank by the
Borrower pursuant to the Loan Agreement. Under Section 3-104 of the Uniform
Commercial Code of Massachusetts, this Note is not a negotiable
instrument.
Should all or any part of the indebtedness represented by this Note
be collected by action at law, or in bankruptcy, insolvency, receivership or
other court proceedings, or should this Note be placed in the hands of
attorneys for collection after default, the Borrower hereby promises to pay
to the Bank, upon demand by the holder hereof at any time, in addition to
principal, interest and all (if any) other amounts payable on or in respect
of this Note or the indebtedness evidenced hereby, all court costs and
reasonable attorneys' fees and all other reasonable collection charges and
expenses incurred or sustained by or on behalf of the holder of this Note.
The Borrower hereby irrevocably authorizes and empowers any
attorney or attorneys or the Prothonotary or Clerk of any Court of record
in the Commonwealth of Pennsylvania, or in any other jurisdiction which
permits the entry of judgment by confession, at any time after ten (10)
days notice to the Borrower, to appear for the Borrower in such Court in
an appropriate action there brought or to be brought against the Borrower
at the suit of the Bank on this Note, with or without complaint or
declaration filed, as of any term or time, and therein to CONFESS OR
ENTER JUDGMENT against the Borrower for all sums due by the
Borrower to the Bank under this Note and the other Loan Documents (as
defined in the Loan Agreement), with or without acceleration of maturity,
including all costs and attorneys' fees. For so doing, this Note or a copy
hereof verified by affidavit shall be a sufficient warrant. The authority to
confess judgment granted herein shall not be exhausted by any exercise
thereof but may be exercised from time to time and at any time as of any
term and for any amount authorized herein. The Borrower expressly
authorizes the entry of repeated judgments under this Paragraph
notwithstanding any prior entry of judgment in the same or any other
court for the same obligation or any part thereof.
THE BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY COUNSEL IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS NOTE AND THAT IT UNDERSTANDS
THIS PROVISION FOR CONFESSION OF JUDGMENT, AND WAIVES ANY RIGHT TO NOTICE OR A
HEARING WHICH IT MIGHT OTHERWISE HAVE BEFORE ENTRY OF JUDGMENT.
<PAGE> 68
-4-
The Borrower hereby absolutely and irrevocably waives notice of
acceptance, presentment, notice of demand, notice of nonpayment, protest,
notice of protest, notice of dishonor, suit and all other conditions
precedent in connection with the delivery, acceptance, collection and/or
enforcement of this Note or any collateral security therefor, and assents to
any extension or postponement of the time of payment or any other
indulgence, to any substitution, exchange or release of collateral and to
the addition or release of any other party or person primarily or
secondarily liable.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or
of any other rights of the Bank or such holder, nor shall any delay,
omission or waiver on any one occasion be deemed a bar or waiver of the
same or any other right on any future occasion.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 10 OF THE LOAN AGREEMENT.
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note is intended to take effect as a sealed instrument. This
Note has been executed and delivered to the Bank by the Borrower in
Boston, Massachusetts.
<PAGE> 69
-5-
IN WITNESS WHEREOF, this AMENDED AND RESTATED MASTER NOTE has been duly
executed by the undersigned, LEEMILT's PETROLEUM, INC., on the day and in the
year first above written.
LEEMILT'S PETROLEUM, INC.
By:
------------------------------
Name:
-----------------------------
Title:
---------------------------
<PAGE> 70
EXHIBIT C
Amended and Restated Hazardous Waste
Indemnification Agreement
This Amended and Restated Hazardous Waste Indemnification
Agreement is made as of the 27th day of October, 1995, by and among
Getty Petroleum Corp. ("Getty"), Leemilt's Petroleum, Inc. (the
"Borrower") and Fleet Bank of Massachusetts, N.A. (the "Bank").
WITNESSETH:
WHEREAS, the Borrower duly authorized, executed and delivered
to the Bank of New England, N.A. ("BNE") a Loan Agreement dated as of
December 7, 1987 (the "Original Loan Agreement") which provided, upon
certain terms and conditions, for the making of loans (the "Loans") by
BNE to the Borrower, which Loans are secured by mortgages to BNE of
certain gasoline service station properties (the "Stations") owned by the
Borrower;
WHEREAS, the Borrower, Getty and BNE entered into a Hazardous
Waste Indemnification Agreement dated as of December 7, 1987 pursuant
to the Original Loan Agreement, which the parties hereto desire to amend
and restate;
WHEREAS, the Borrower has duly authorized, executed and
delivered to the Bank an Amended and Restated Loan Agreement of even
date herewith (the "Amended Loan Agreement") which amends and
restates the Original Loan Agreement;
WHEREAS, the Bank is the successor by name change to Fleet
National Bank of Boston, which was the successor in interest to the
Federal Deposit Insurance Corporation, as Receiver for New Bank of New
England, N.A., which was the successor in interest to the Federal Deposit
Insurance Corporation, as Receiver for BNE;
WHEREAS, the Borrower is a wholly-owned Subsidiary of Getty;
WHEREAS, the Bank is not willing to refinance the Loans to the
Borrower pursuant to the Amended Loan Agreement unless, and it is
accordingly an express condition precedent to the refinancing of the Loans
<PAGE> 71
-2-
that Getty shall agree to indemnify the Borrower and the Bank for any
and all losses, claims or liabilities arising with regard to any hazardous
wastes or environmental damage or hazards attributable to or occurring
at, or on the premises of, any Station;
WHEREAS, in order to induce the Bank to refinance the Loans to
the Borrower, Getty has agreed to enter into this Agreement;
NOW THEREFORE, in consideration of these premises, and as an
inducement to the Bank to refinance the Loans, Getty agrees with the
Borrower and the Bank as follows:
1. "Agreement" means this Amended and Restated Hazardous
Waste Indemnification Agreement as originally executed or, if this
Hazardous Waste Indemnification Agreement is amended, modified or
supplemented, as so amended, modified or supplemented.
2. All capitalized terms not defined herein shall have the
meanings ascribed to them in the Amended Loan Agreement.
3. Getty hereby absolutely and unconditionally covenants and
agrees to indemnify and hold harmless the Borrower and the Bank and
their respective successors, assigns, representatives, agents, and servants
from and against any and all claims, liabilities, obligations, losses,
damages, penalties, taxes, actions, suits, costs, expenses or disbursements
(including reasonable attorneys' fees and expenses) of any kind and
nature whatsoever which may be imposed on, incurred by or asserted
against the Borrower, the Bank or any such other person, in any way
relating to or arising out of any event, occurrence, condition of, use of, or
state of repair at any Station with regard to any environmental damage,
real, threatened or potential, and any damage caused by any hazardous
waste substance or gasoline or petroleum product contamination or
damage, whether now existing or hereafter arising or occurring, or the
existence of any hazardous waste substance or gasoline or petroleum
contamination in, on, or around the land of any Station. Getty covenants
and agrees that it will be fully responsible for the repair or replacement of
all equipment at any Station, including, without limitation, underground
storage tanks, connecting piping and associated machinery and
equipment, whether above or below ground. It is understood and agreed
that the foregoing indemnification shall include any claims or proceedings
asserted by the U.S. Environmental Protection Agency or any other
federal, state, local, or municipal regulatory or administrative body.
<PAGE> 72
-3-
4. So long as the Loan Documents shall remain in force and effect,
the Bank shall have the right upon the terms and conditions set forth in Section
5.8 of the Loan Agreement, but not the obligation, through such representatives
or independent contractors as it may designate, to enter upon the Stations and
expend funds to (i) conduct environmental assessments in accordance with the
terms and provisions of the Amended Loan Agreement; or (ii) cure any breach of
any of the representations, warranties, covenants or conditions relating to
Environmental laws or Hazardous Substances made by or imposed on the Borrower or
its Subsidiaries under the Amended Loan Agreement, including environmental
clean-up or remediatiion. Getty agrees to pay any amounts paid or advanced by
the Bank and all costs and expenditures incurred in connection with the exercise
of its rights and remedies under this Agreement including without limitation
attorneys' fees, expert's fees and environmental consultant's fees. The exercise
by the Bank of any of its rights or remedies in this Agreement shall not operate
or be deemed to make the Bank an "owner" or "operator" of any Station of a
"responsible party" within the meaning of any Environmental Law.
5. This Agreement shall be binding upon the successors and assigns
of Getty and shall inure to the benefit of the Borrower and the Bank and their
respective successors and assigns.
6. The terms of this Agreement and all rights and obligations of
the parties hereto shall be governed by the laws of the Commonwealth of
Massachusetts. Such terms, rights and obligations may not be changed, modified
or amended except by an agreement in writing signed by the party against whom
enforcement of such change is sought. This Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts,
but all of such counterparts shall together constitute a single instrument.
<PAGE> 73
-4-
IN WITNESS WHEREOF, this Amended and Restated Hazardous
Waste Indemnification Agreement has been duly executed as an
instrument under seal as of the date first above written.
GETTY PETROLEUM CORP.
By:
----------------------------
Name: John J. Fitteron
Title: Senior Vice President
LEEMILT'S PETROLEUM, INC.
By:
----------------------------
Name: John J. Fitteron
Title: Senior Vice. President
FLEET BANK OF MASSACHUSETTS, N.A.
By:
-----------------------------
Name: Thomas F. McNamara
Title: Vice President
<PAGE> 1
EXHIBIT 10.2(b)
GETTY PETROLEUM CORP. RETIREMENT AND PROFIT SHARING PLAN
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS ......................... 19
2.2 DETERMINATION OF TOP HEAVY STATUS.................... 19
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.......... 23
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY.............. 23
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES........ 24
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR............... 24
2.7 RECORDS AND REPORTS.................................. 26
2.8 APPOINTMENT OF ADVISERS.............................. 26
2.9 INFORMATION FROM EMPLOYER............................ 26
2.10 PAYMENT OF EXPENSES.................................. 26
2.11 MAJORITY ACTIONS..................................... 26
2.12 CLAIMS PROCEDURE..................................... 27
2.13 CLAIMS REVIEW PROCEDURE.............................. 27
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY............................ 28
3.2 APPLICATION FOR PARTICIPATION........................ 28
3.3 EFFECTIVE DATE OF PARTICIPATION...................... 28
3.4 DETERMINATION OF ELIGIBILITY......................... 28
3.5 TERMINATION OF ELIGIBILITY........................... 29
3.6 OMISSION OF ELIGIBLE EMPLOYEE........................ 29
<PAGE> 3
3.7 INCLUSION OF INELIGIBLE EMPLOYEE............................ 29
3.8 ELECTION NOT TO PARTICIPATE................................. 29
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION............. 30
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION..................... 30
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION.................. 34
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS.................................................... 35
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS............................ 41
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.............. 43
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS........................ 46
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE
TESTS....................................................... 50
4.9 MAXIMUM ANNUAL ADDITIONS.................................... 53
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS................... 57
4.11 TRANSFERS FROM QUALIFIED PLANS.............................. 58
4.12 VOLUNTARY CONTRIBUTIONS..................................... 60
4.13 DIRECTED INVESTMENT ACCOUNT................................. 61
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND................................. 61
5.2 METHOD OF VALUATION......................................... 62
<PAGE> 4
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT............ 62
6.2 DETERMINATION OF BENEFITS UPON DEATH................. 62
6.3 DISABILITY RETIREMENT BENEFITS....................... 64
6.4 DETERMINATION OF BENEFITS UPON TERMINATION........... 64
6.5 DISTRIBUTION OF BENEFITS............................. 67
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.................. 73
6.7 TIME OF SEGREGATION OR DISTRIBUTION.................. 77
6.8 DISTRIBUTION FOR MINOR BENEFICIARY................... 77
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN....... 77
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP.................... 78
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION...... 80
6.12 DIRECT ROLLOVER...................................... 80
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT............................................ 81
7.2 TERMINATION.......................................... 82
7.3 MERGER OR CONSOLIDATION.............................. 82
7.4 LOANS TO PARTICIPANTS................................ 83
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS................................. 85
8.2 ALIENATION........................................... 85
8.3 CONSTRUCTION OF PLAN................................. 86
8.4 GENDER AND NUMBER.................................... 86
<PAGE> 5
8.5 LEGAL ACTION ........................................ 86
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS .............. 86
8.7 BONDING ............................................. 87
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE .......... 87
8.9 INSURER'S PROTECTIVE CLAUSE ......................... 87
8.10 RECEIPT AND RELEASE FOR PAYMENTS .................... 88
8.11 ACTION BY THE EMPLOYER .............................. 88
8.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY ...................................... 88
8.13 HEADINGS ............................................ 89
8.14 APPROVAL BY INTERNAL REVENUE SERVICE ................ 89
8.15 UNIFORMITY .......................................... 89
<PAGE> 6
GETTY PETROLEUM CORP. RETIREMENT AND PROFIT SHARING PLAN
THIS PLAN, hereby adopted this 19th day of September, 1996, by
Getty Petroleum Corp. (herein referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing
Plan effective February 1, 1978, (hereinafter called the "Effective Date")
known as Power Test Corporation Retirement and Profit Sharing Plan and which
plan shall hereinafter be known as Getty Petroleum Corp. Retirement and Profit
Sharing Plan (herein referred to as the "Plan") in recognition of the
contribution made to its successful operation by its employees and for the
exclusive benefit of its eligible employees; and
WHEREAS, such Plan was amended as of October 1, 1987, January
1, 1989, January 1, 1991; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective January 1, 1995, except as otherwise
provided, the Employer in accordance with the provisions of the Plan pertaining
to amendments thereof, hereby amends the Plan in its entirety and restates the
Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Employer; any organization (whether or not incorporated) which is a member of
an affiliated service group (as defined in Code Section 414(m)) which includes
the Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a
1
<PAGE> 7
Participant, whether attributable to Employer or Employee contributions,
subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means December 31.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Section 6041(d), 6051(a)(3) and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation shall
be made by:
(a) including amounts which are contributed by the Employer pursuant to
a salary reduction agreement and which are not includible in the gross income
of the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457, and Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
For a Participant's initial year of participation, Compensation shall
be recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted under Code
Section 415(d), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the
2
<PAGE> 8
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules the adjusted $200,000 limitation is exceeded, then
the limitation shall be prorated among the affected Family Members in
proportion to each such Family Member's Compensation prior to the application
of this limitation, or the limitation shall be adjusted in accordance with any
other method permitted by Regulation. However, for purposes of Section 4.4(b),
the preceding sentence shall not apply in determining the portion of the
Compensation of a Participant which is below Excess Compensation.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.9(a) would be exceeded for one or more of the affected Family
Members, the prorated Compensation of all affected Family Members shall be
adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be
adjusted downward to the level needed to provide an allocation equal to such
limit. The prorated Compensation of affected Family Members not affected by
such limit shall then be adjusted upward on a
3
<PAGE> 9
pro rata basis not to exceed each such affected Family Member's Compensation as
determined prior to application of the Family Member rule. The resulting
allocation shall not exceed such individual's maximum "annual addition" limit.
If, after these adjustments, an "excess amount" still results, such "excess
amount" shall be disposed of in the manner described in Section 4.10(a) pro
rata among all affected Family Members.
If, in connection with the adoption of this amendment and restatement,
the definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of this amendment and
restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.9 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or individual)
issued pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 4.2 excluding any such amounts distributed as excess "annual additions"
pursuant to Section 4.10(a).
1.11 "Early Retirement Date" means the first day of the month (prior
to the Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55 and has completed at least 6
Years of Service with the Employer (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still employed at his
Early Retirement Age.
A Former Participant who terminates employment after satisfying
the service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits under
this Plan.
1.12 "Elective Contribution" means the Employer's contributions to the
Plan of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6 shall be
considered an Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the discrimination
4
<PAGE> 10
requirements of Regulation 1.401(k)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives (within the
meaning of Code Section 7701(a)(46)) and the Employer under which retirement
benefits were the subject of good faith bargaining between the parties will not
be eligible to participate in this Plan unless such agreement expressly
provides for coverage in this Plan or two percent or more of the Employees of
the Employer who are covered pursuant to that agreement are professionals as
defined in Regulation 1.410(b)-9.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.15 "Employer" means Getty Petroleum Corp. and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of New York.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant
to Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over
the maximum amount of such contributions permitted under the limitations of
Section 4.7(a).
1.17 "Excess Compensation" with respect to any Participant means the
Participant's Compensation which is in excess of the Taxable Wage Base. For any
short year, the Taxable Wage Base shall be reduced by a fraction, the numerator
of which is the number of full months in the short year and the denominator of
which is twelve (12).
1.18 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the
5
<PAGE> 11
maximum amount of such contributions permitted under Section 4.5(a). Excess
Contributions, including amounts recharacterized pursuant to Section 4.6(a)(2),
shall be treated as an "annual addition" pursuant to Section 4.9(b).
1.19 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an
"annual addition" pursuant to Section 4.9(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first
April 15th following the close of the Participant's taxable year. Additionally,
for purposes of Sections 2.2 and 4.4(g), Excess Deferred Compensation shall
continue to be treated as Employer contributions even if distributed pursuant
to Section 4.2(f). However, Excess Deferred Compensation of Non-Highly
Compensated Participants is not taken into account for purposes of
Section 4.5(a) to the extent such Excess Deferred Compensation occurs pursuant
to Section 4.2(d).
1.20 "Family Member" means, with respect to an affected Participant,
such Participant's spouse and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section 414(q)(6)(B).
1.21 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan or has
any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.22 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on February 1st of each year and ending the following January 31st.
1.23 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
6
<PAGE> 12
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 6.4(f)(2). In addition, the term Forfeiture shall
also include amounts deemed to be Forfeitures pursuant to any other provision
of this Plan.
1.24 "Former Participant" mean a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment and restatement,
the definition of "415 Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "415 Compensation" means compensation determined pursuant to the
Plan then in effect.
1.26 "414(s) Compensation" with respect to any Participant means such
Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)
plus "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or
7
<PAGE> 13
within such calendar year and the first adjustment to the $200,000 limitation
shall be effective on January 1, 1990. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation"
limit for the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short Plan Year by
twelve (12). In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member aggregation rules
of Code Section 414(q)(6) because such Participant is either a "five percent
owner" of the Employer or one of the ten (10) Highly Compensated Employees paid
the greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
If, in connection with the adoption of this amendment and restatement, the
definition of "414(s) Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
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1.27 "Highly Compensated Employee" means an Employee described in
Code Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners" as defined in
Section 1.33(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers
of the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of officers,
Employees described in Section 1.59(a), (b), (c) and (d) shall be
excluded, but such Employees shall still be considered for the purpose
of identifying the particular Employees who are officers. If the
Employer does not have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer of the Employer will
be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year."
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the
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<PAGE> 15
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions. Additionally, the dollar threshold amounts specified
in (b) and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.28 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination year" and was a
Highly Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55
(or the last year ending before the Employee's 55th birthday), the Employee
either received "415 Compensation" in excess of $50,000 or was a "five percent
owner." For purposes of this Section, "determination year," "415 Compensation"
and "five percent owner" shall be determined in accordance with Section 1.27.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
1.29 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.30 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2)
each hour for which an
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<PAGE> 16
Employee is directly or indirectly compensated or entitled to compensation by
the Employer (irrespective of whether the employment relationship has
terminated) for reasons other than performance of duties (such as vacation,
holidays, sickness, jury duty, disability, lay-off, military duty or leave of
absence) during the applicable computation period; (3) each hour for which back
pay is awarded or agreed to by the Employer without regard to mitigation of
damages. These hours will be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made. The same
Hours of Service shall not be credited both under (1) or (2), as the case may
be, and under (3).
1.31 "Income" means the income or losses allocable to "excess amounts"
which shall equal the allocable gain or loss for the "applicable computation
period". The income allocable to "excess amounts" for the "applicable
computation period" is determined by multiplying the income for the "applicable
computation period" by a fraction. The numerator of the fraction is the "excess
amount" for the "applicable computation period." The denominator of the
fraction is the total "account balance" attributable to "Employer
contributions" as of the end of the "applicable computation period", reduced by
the gain allocable to such total amount for the "applicable computation period"
and increased by the loss allocable to such total amount for the "applicable
computation period". The provisions of this Section shall be applied:
(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions"; and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.6(a), by substituting:
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer contributions"; and
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<PAGE> 17
(4) "Participant's Elective Account" for "account balance."
(c) For purposes of Section 4.8(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts;"
(2) "Plan Year" for "applicable computation period;"
(3) "Employer matching contributions made pursuant to Section
4.1(b), voluntary Employee contributions made pursuant to
Section 4.12 and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section
4.7(c)" for "Employer contributions;" and
(4) "Participant's Account and Voluntary Contribution Account"
for "account balance."
Income allocable to any distribution of Excess Deferred Compensation on
or before the last day of the taxable year of the Participant shall be
calculated from the first day of the taxable year of the Participant to the
date on which the distribution is made pursuant to either the "fractional
method" or the "safe harbor method." Under such "safe harbor method," allocable
Income for such period shall be deemed to equal ten percent (10%) of the Income
allocable to such Excess Deferred Compensation multiplied by the number of
calendar months in such period. For purposes of determining the number of
calendar months in such period, a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on the last day
of the preceding month and a distribution occurring after such fifteenth day
shall be treated as having been made on the first day of the next subsequent
month.
The Income allocable to Excess Aggregate Contributions resulting from
the recharacterization of Elective Contributions shall be determined and
distributed as if such recharacterized Elective Contributions had been
distributed as Excess Contributions.
Notwithstanding the above, for "applicable computation periods" which
began in 1987, Income during the "gap period" shall not be taken into account.
1.32 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
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1.33 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section 415(c)(1)(A) for the calendar year in
which such Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code
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<PAGE> 19
Sections 414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.34 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.35 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with Code
Section 414(n)(6) on a substantially full time basis for a period of at least
one year, and such services are of a type historically performed by employees
in the business field of the recipient employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable
to services performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be considered an
Employee of the recipient:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least 10%
of compensation, as defined in Code Section 415(c)(3), but
including amounts which are contributed by the Employer pursuant
to a salary reduction agreement and which are not includible in
the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.36 "Month of Service" means a calendar month during any part of which
an Employee completed an Hour of Service. Except, however, a Participant shall
be credited with a Month of Service
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<PAGE> 20
for each month during the 12 month computation period in which he has not
incurred a 1-Year Break in Service.
1.37 "Non-Elective Contribution" means the Employer's contributions to
the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution.
1.38 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.39 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65 birthday, or
his 5th anniversary of joining the Plan, if later. A Participant shall become
fully Vested in his Participant's Account upon attaining his Normal Retirement
Age.
1.41 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.42 "1-Year Break in Service" means the applicable computation period
of 12 consecutive months during which an Employee fails to accrue a Month of
Service. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized
for "authorized leaves of absence" and "maternity and paternity leaves of
absence." Years of Service and 1-Year Breaks in Service shall be measured on
the same computation period.
An Employee shall not be deemed to have incurred a 1-Year Break in
Service if he completes an Hour of Service within 12 months following the last
day of the month during which his employment terminated.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service,
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or, in any other case, in the immediately following computation period.
1.43 "Participant" means any Eligible Employee who participates in the Plan
as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.44 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer's Non-Elective Contributions.
A separate accounting shall be maintained with respect to that portion
of the Participant's Account attributable to Employer matching contributions
made pursuant to Section 4.1(b) and Employer discretionary contributions made
pursuant to Section 4.1(c).
1.45 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.46 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.47 "Plan" means this instrument, including all amendments thereto.
1.48 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.49 "Pre-Retirement Survivor Annuity" is an immediate annuity for the life
of the Participant's spouse the payments under which must be equal to the amount
of benefit which can be purchased with the accounts of a Participant used to
provide the death benefit under the Plan.
1.50 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.8(h) which are used to satisfy the "Actual Contribution
Percentage" tests shall be
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considered Qualified Non-Elective Contributions and be subject to the
provisions of Sections 4.2(b) and 4.2(c).
1.51 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.52 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant retires
whether such retirement occurs on a Participant's Normal Retirement Date, Early
or Late Retirement Date (see Section 6.1).
1.54 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.55 "Taxable Wage Base" means, with respect to any Plan Year, the
contribution and benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.56 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death or
retirement.
1.57 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.58 "Top Heavy Plan Year" means a Plan Year commencing after
December 31, 1983 during which the Plan is a Top Heavy Plan.
1.59 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (determined for this purpose in
accordance with Section 1.27) received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2)) from
the Employer constituting United States source income within the meaning of
Code Section 861(a)(3) shall not be treated as Employees. Additionally, for the
purpose of determining the number of active Employees in any year, the
following additional Employees shall also be excluded; however, such Employees
shall still be considered for the purpose of identifying the particular
Employees in the Top Paid Group:
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(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and
the Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.60 "Trustee" means the person or entity named as trustee herein or
in any separate trust forming a part of this Plan, and any successors.
1.61 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.62 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.63 "Voluntary Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from the Participant's nondeductible
voluntary contributions made pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions pursuant
to Section 4.6(a) shall remain subject to the limitations of Sections 4.2(b) and
4.2(c). Therefore, a separate accounting shall be maintained with respect to
that portion of the Voluntary Contribution Account attributable to voluntary
Employee contributions made pursuant to Section 4.12.
1.64 "Year of Service" means twelve (12) consecutive Months of Service.
For vesting purposes, the computation period shall be the Plan Year.
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<PAGE> 24
For all other purposes, the computation period shall be the Plan Year.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
commencing after December 31, 1983 in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this
Plan and all plans of an Aggregation Group, exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, for Plan Years beginning after December
31, 1984, if a Participant or Former Participant has not performed
any services for any Employer maintaining the Plan at any time during
the five year period ending on the Determination Date, any accrued
benefit for such Participant or Former Participant shall not be taken
into account for the purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
commencing after December 31, 1983 in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this
Plan and all plans of an Aggregation Group, exceeds ninety percent
(90%) of the Present Value of
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Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the valuation date but due on
or before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
valuation date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already
included in the Participant's Aggregate Account balance as of
the valuation date. Notwithstanding anything herein to the
contrary, all distributions, including distributions made prior
to January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because
of death shall be treated as a distribution for the purposes of
this paragraph.
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a
part of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan
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maintained by one employer to a plan maintained by another
employer), if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or
plan-to-plan transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers as part of the Participant's Aggregate
Account balance. However, rollovers or plan-to-plan transfers
accepted prior to January 1, 1984 shall be considered as part of
the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of the
date on which such rollover or plan-to-plan transfer is
accepted.
(7) For the purposes of determining whether two employers are to
be treated as the same employer in (5) and (6) above, all
employers aggregated under Code Section 414(b), (c), (m) and (o)
are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which
a Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
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Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of
the Employer if it was maintained within the last five (5) years
ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the last
day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee, shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall be determined as of the most
recent valuation date that falls within or ends with the 12-month period
ending on the Determination Date except as provided in Code Section 416
and the Regulations thereunder for the first and second plan years of a
defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which, as
of the Determination Date, the sum of:
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(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure
that the Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short
run need for liquidity (e.g., to pay benefits) or whether
liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a
qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall
coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to investment
of the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(c) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan
or pursuant to procedures established hereunder. This
requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the
Employer, through day-to-day conduct and evaluation, or through
other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign
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by delivering his written resignation to the Employer or be removed by the
Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If the
Employer does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept and
rely upon any documents executed by the appropriate Administrator until such
time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the
Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry
out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties under
this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
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(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder
and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any insurer, and to designate the insurer from which such Contract
shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Plan;
(h) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect joint and survivor
annuities and Pre-Retirement Survivor Annuities as required by the Act and
Regulations thereunder;
(j) to prepare and implement a procedure to notify Eligible Employees
that they may elect to have a portion of their Compensation deferred or
paid to them in cash;
(k) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
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2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying
all information and reports to the Internal Revenue Service, Department of
Labor, Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require;
and the Administrator shall advise the Trustee of such of the foregoing facts
as amy be pertinent to the Trustee's duties under the Plan. The Administrator
may rely upon such information as is supplied by the Employer and shall have no
duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
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2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained
from the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which
the claimant may be represented by an attorney or any other representative of
his choosing and at which the claimant shall have an opportunity to submit
written and oral evidence and arguments in support of his claim. At the hearing
(or prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all
documents in the possession of the Administrator which are pertinent to the
claim at issue and its disallowance. Either the claimant or the Administrator
may cause a court reporter to attend the hearing and record the proceedings. In
such event, a complete written transcript of the proceedings shall be furnished
to both parties by the court reporter. The full expense of any such court
reporter and such transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the allowance of the
claim shall be made by the Administrator within 60 days of receipt of the appeal
(unless there has been an extension of 60 days due to special circumstances,
provided the delay and the special circumstances occasioning it are communicated
to the claimant within the 60 day period). Such communication shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
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ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and has
attained age 21 shall be eligible to participate hereunder as of the date he
has satisfied such requirements. Effective September 30, 1996, any Eligible
Employee who has completed six (6) Months of Service and has attained age 21
shall be eligible to participate in the salary reduction election and related
matching contribution, but the one (1) Year of Service requirement will
continue to apply to determine participation for the Employer's Non-Elective
Contribution. However, any Employee who was a Participant in the Plan prior to
the effective date of this amendment and restatement shall continue to
participate in the Plan. The Employer shall give each prospective Eligible
Employee written notice of his eligibility to participate in the Plan prior to
the close of the Plan Year in which he first becomes an Eligible Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee
shall make application to the Employer for participation in the Plan and agree
to the terms hereof. Upon the acceptance of any benefits under this Plan, such
Employee shall automatically be deemed to have made application and shall be
bound by the terms and conditions of the Plan and all amendment hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
first day of the calendar quarter coinciding with or next following the date on
which such Employee met the eligibility requirements of Section 3.1, provided
said Employee was still employed as of such date (or if not employed on such
date, as of the date of rehire if a 1-Year Break in Service has not occurred).
In the event of an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
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3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in his interest in the Plan for
each Year of Service completed while a noneligible Employee, until
such time as his Participant's Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate but
has not incurred a 1-Year Break in Service, such Employee will
participate immediately upon returning to an eligible class of
Employees. If such Participant incurs a 1-Year Break in Service,
eligibility will be determined under the break in service rules of
the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made,
the Employer shall not be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate
must be communicated to the Employer,
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in writing, at least thirty (30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants to Section 4.2(a), which amount shall be deemed an
Employer's Elective Contribution.
(b) On behalf of each Participant who is eligible to share in
matching contributions for each pay period, a discretionary matching
contribution equal to a percentage of each such Participant's Deferred
Compensation, the exact percentage to be determined each year by the
Employer, which amount shall be deemed an Employer's Non-Elective
Contribution.
Except, however, in applying the matching percentage specified
above, only salary reductions, excluding bonus reductions, up to 6% of
compensation (excluding bonus) per pay period shall be considered.
(c) A discretionary amount, which amount shall be deemed an
Employer's Non-Elective Contribution.
(d) Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or
in such property as is acceptable to the Trustee.
(e) Except, however, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a contribution even
if it exceeds the amount which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his Compensation which
would have been received in the Plan Year, but for the deferral
election, by up to 15%. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election. A special election will be permitted for an annual bonus, if
applicable.
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The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective
Account.
(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to Forfeiture for any
reason.
(c) Amounts held in the Participant's Elective Account may not be
distributable earlier than:
(1) a Participant's termination of employment or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a
Participant who continues employment with the corporation acquiring
such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) to an entity which is
not an Affiliated Employer but only with respect to a Participant
who continues employment with such subsidiary; or
(6) the proven financial hardship of a Participant, subject to the
limitations of Section 6.10.
(d) For each Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed, during any taxable year of the Participant, the
limitation imposed by Code Section 402(g), as in effect at the beginning
of such taxable year. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the Administrator of such
excess amount which shall be
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distributed in a manner consistent with Section 4.2(f). The dollar
limitation shall be adjusted annually pursuant to the method provided in
Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
from his Participant's Elective Account pursuant to Section 6.10 or
pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan
maintained by the Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year of the
hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1(b))
under another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), a simplified employee pension (as defined in Code Section
408(k)), a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1 following the close of the Participant's taxable year,
notify the Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount specified by
the Participant. In such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before the
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last day of the Participant's taxable year must satisfy each of
the following conditions:
(1) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation;
(2) the participant shall designate the distribution as
Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f)
shall be made first from unmatched Deferred Compensation and,
thereafter, simultaneously from Deferred Compensation which is
matched and matching contributions which relate to such Deferred
Compensation. However, any such matching contributions which
are not Vested shall be forfeited in lieu of being distributed.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced, but
not below zero, by any distribution and/or recharacterization of
Excess Contributions pursuant to Section 4.6(a) for the Plan
Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when
the Participant shall be entitled to receive benefits, the fair
market value of the Participant's Elective Account shall be used
to provide additional benefits to the participant or his
Beneficiary.
(i) All amounts allocated to a Participant's Elective
Account may be treated as a Directed Investment Account pursuant
to Section 4.13.
(j) Employer Elective Contributions made pursuant to
this Section may be segregated into a separate account for each
Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money
market certificate, or other short-term debt security acceptable
to the Trustee until such time as the allocations pursuant to
Section 4.4 have been made.
(k) The Employer and the Administrator shall implement
the salary reduction elections provided for herein in accordance
with the following:
(l) A Participant may commence making elective
deferrals to the Plan only after first satisfying
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the eligibility and participation requirements specified in
Article III. However, the Participant must make his initial
salary deferral election within a reasonable time, not to
exceed thirty (30) days, after entering the Plan pursuant to
Section 3.3. If the Participant fails to make an initial
salary deferral election within such time, then such
Participant may thereafter make an election in accordance
with the rules governing modifications. The Participant
shall make such an election by entering into a written
salary reduction agreement with the Employer and filing such
agreement with the Administrator. Such election shall
initially be effective beginning with the pay period
following the acceptance of the salary reduction agreement
by the Administrator, shall not have retroactive effect and
shall remain in force until revoked.
(2) A Participant may modify a prior election during the
Plan Year and concurrently make a new election within a
reasonable time before the first pay period of each month,
when such modification is to be effective. Any modification
shall not have retroactive effect and shall remain in force
until revoked.
(3) A Participant may elect to prospectively revoke his
salary reduction agreement in its entirety at any time
during the Plan Year. Such revocation shall become effective
as of the beginning of the first pay period coincident with
or next following the expiration of the notice period.
Furthermore, the termination of the Participant's
employment, or the cessation of participation for any
reason, shall be deemed to revoke any salary reduction
agreement then in effect, effective immediately following
the close of the pay period within which such termination or
cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets,
but in any event within ninety (90) days from the date on which such amounts
would
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otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by
reference. Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan Year shall be paid
to the Plan no later than the twelve-month period immediately following the
close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit
as of each Anniversary Date all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's Account
in accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall be
eligible to share in the matching contribution for the Plan
Year.
(3) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1(c), in the following manner:
(i) A dollar amount equal to 5.7% of the sum of each
Participant's total Compensation plus Excess
Compensation shall be allocated to each Participant's
Account. If the Employer does not contribute such amount
for all Participants, each Participant will be allocated
a share of the contribution in the same proportion that
his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total
Compensation
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plus the total Excess Compensation of all Participants for that year.
(ii) The balance of the Employer's Non-Elective Contribution over the
amount allocated above, if any, shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
Only Participant's who have completed a Year of Service with 1,000 Hours
during the Plan Year and are actively employed on the last day of the Plan
Year shall be eligible to share in the discretionary contribution for the
year.
(c) As of each Anniversary Date any amounts which became Forfeitures since
the last Anniversary Date shall first be made available to reinstate previously
forfeited account balances of Former Participants, if any, in accordance with
Section 6.4(f)(2). The remaining Forfeitures, if any, shall be used to pay
expenses of the Plan described in Section 2.10 and the remaining amount, if any,
to reduce the contribution of the Employer hereunder for the Plan Year in which
such Forfeitures occur in the following manner:
(1) Forfeitures attributable to Employer matching contributions made
pursuant to Section 4.1(b) shall be used to reduce the Employer's
contribution for the Plan Year in which such Forfeitures occur.
(2) Forfeitures attributable to Employer discretionary contributions made
pursuant to Section 4.1(c) shall be used to reduce the Employer's
contribution for the Plan Year in which such Forfeitures occur.
(d) For any Top Heavy Plan Year, Non-Key Employees not otherwise eligible
to share in the allocation of contributions as provided above, shall receive the
minimum allocation provided for in Section 4.4(g) if eligible pursuant to the
provisions of Section 4.4(i).
(e) Participants who are not actively employed on the last day of the Plan
Year due to Retirement (Early, Normal or Late) or death shall share in the
allocation of contributions for that Plan Year only if otherwise eligible in
accordance with this Section.
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<PAGE> 42
(f) As of each Anniversary Date or other valuation date, before the
current valuation period allocation of Employer contributions and after
allocation of Forfeitures, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the same proportion that
each Participant's and Former Participant's nonsegregated accounts bear to the
total of all Participants' and Former Participants' nonsegregated accounts as
of such date.
Participants' transfers from other qualified plans and voluntary
contributions deposited in the general Trust Fund shall share in any earnings
and losses (net appreciation or net depreciation) of the Trust Fund in the same
manner provided above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions allocated to the Participant's Combined Account of
each Non-Key Employee shall be equal to at least three percent (3%) of such
Non-Key Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any defined
contribution plan included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer's contributions allocated to the
Participant's Combined Account of each Key Employee for such Top Heavy Plan
Year is less than three percent (3%) of each Key Employee's "415 Compensation"
and (2) this Plan is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer's contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal to the
largest percentage allocated to the Participant's Combined Account of any Key
Employee. However, in determining whether a Non-Key Employee has received the
required minimum allocation, such Employee's Deferred Compensation and matching
contributions needed to satisfy the "Actual Contribution Percentage" tests
pursuant to Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required in this Plan for
any Non-Key Employee who participates in another defined contribution plan
subject to Code Section 412 providing such benefits
37
<PAGE> 43
included with this Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key Employee
shall be equal to the ratio of the sum of the Employer's contributions
allocated on behalf of such Key Employee divided by the "415 Compensation" for
such Key Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Combined Account of all Non-Key
Employees who are Participants and who are employed by the Employer on the last
day of the Plan Year, including Non-Key Employees who have (1) failed to
complete a Year of Service; and (2) declined to make mandatory contributions
(if required) or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000. Such amount shall be adjusted at the same time and in the
same manner as permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall be effective for the
Plan Year beginning with or within such calendar year and the first adjustment
to the $200,000 limitation shall be effective on January 1, 1990. For any short
Plan Year the "415 Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in the
short Plan Year by twelve (12). However, for Plan Years beginning prior to
January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan Years
and shall not be adjusted.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of
38
<PAGE> 44
fewer than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401 (a) (17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
(k) Notwithstanding anything herein to the contrary, Participants who
terminated employment for any reason during the Plan Year shall share in the
salary reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(l) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
(2) one account representing his status in the Plan attributable to
post-break service.
(m) Notwithstanding anything to the contrary, for Plan Years beginning
after December 31, 1989, if this is a Plan that would otherwise fail to meet
the requirements of Code Sections 401(a) (26), 410(b) (1) or 410(b)(2)(A)(i) and
the Regulations thereunder because Employer contributions would not be allocated
to a sufficient number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution for the Plan Year shall be expanded to include the minimum
number of Participants who would not otherwise be eligible as are necessary
to satisfy the applicable test specified above. The specific Participants
who shall become eligible under the
39
<PAGE> 45
terms of this paragraph shall be those who are actively employed on the
last day of the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of Service in
the Plan Year.
(2) If after application of paragraph (1) above, the applicable test is
still not satisfied, then the group of Participants eligible to share in
the Employer's contribution for the Plan Year shall be further expanded to
include the minimum number of Participants who are not actively employed
on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible to
share shall be those Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours of Service
in the Plan Year before terminating employment.
(3) Nothing in this section shall permit the reduction of a Participant's
accrued benefit. Therefore any amounts that have previously been allocated
to Participants may not be reallocated to satisfy these requirements. In
such event, the Employer shall make an additional contribution equal to
the amount such affected Participants would have received had they
been included in the allocations, even if it exceeds the amount which
would be deductible under Code section 404. Any adjustment to the
allocations pursuant to this paragraph shall be considered a retroactive
amendment adopted by the last day of the Plan Year.
(4) Notwithstanding the foregoing, for any Top Heavy Plan Year
beginning after December 31, 1992, if the portion of the Plan which is
not a Code Section 401(k) or 401(m) plan would fail to satisfy Code
Section 410(b) if the coverage tests were applied by treating those
Participants whose only allocation (under such portion of the Plan) would
otherwise be provided under the top heavy formula as if they were not
currently benefiting under the Plan, then, for purposes of this Section
4.4(m), such Participants shall be treated as not benefiting and shall
therefore be eligible to be included in the expanded class of
Participants who will share in the allocation provided under the Plan's
non top heavy formula.
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<PAGE> 46
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions to a Participant's Elective Account shall satisfy one of the
following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein by
reference.
However, for Plan Years beginning after December 31, 1988, in order to
prevent the multiple use of the alternative method described in (2)
above and in Code Section 401 (m) (9) (A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section
4.2 and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation l.401(m)-2, the
provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan Year, the average of
the ratios, calculated separately for each Participant in such group, of
the amount of Employer Elective Contributions allocated to each
Participant's Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each group shall
be calculated to the nearest one-hundredth of one percent
41
<PAGE> 47
for Plan Years beginning after December 31, 1988. Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to the
extent such excess amounts are made under this Plan or any other plan
maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414 (q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be
determined by aggregating Employer Elective Contributions and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to
"414(s) Compensation," for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the
close of the Plan Year. Notwithstanding the foregoing, with respect
to Plan Years beginning prior to January 1, 1990, compliance with the
Regulations then in effect shall be deemed to be compliance with this
paragraph.
(2) The Employer Elective Contributions and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of determining
the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to make a deferral election pursuant to Section 4.2,
whether or not such deferral election was made or suspended pursuant to
Section 4.2.
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<PAGE> 48
(e) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section 401
(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii) as in
effect for Plan Years beginning after December 31, 1988), the cash or
deferred arrangements included in such plans shall be treated as one
arrangement. In addition, two or more cash or deferred arrangements may be
considered as a single arrangement for purposes of determining whether or
not such arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k).
In such a case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of this Section and Code Sections
401 (a)(4), 410(b) and 401(k). Plans may be aggregated under this
paragraph (e) for Plan Years beginning after December 31, 1989 only if they
have the same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in
Code Section 4975 (e)(7) or 409 may not be combined with this Plan for
purposes of determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) or 409
for Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, if
the cash or deferred arrangements have different plan years, this paragraph
shall be applied by treating all cash or deferred arrangements ending with
or within the same calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a) for Plan Years beginning after December 31, 1986, the
Administrator shall
43
<PAGE> 49
adjust Excess Contributions pursuant to the options set forth
below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election recharacterized as
a voluntary Employee contribution pursuant to Section 4.12 until one of the
tests set forth in Section 4.5(a) is satisfied, or until his actual
deferral ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth in Section 4.5(a) is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on behalf of such
Highly Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly
Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s) Compensation." However, in
determining the amount of Excess Contributions to be distributed and/or
recharacterized with respect to an affected Highly Compensated Participant
as determined herein, such amount shall be reduced by any Excess Deferred
Compensation previously distributed to such affected Highly Compensated
Participant for his taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the Plan
Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensations. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
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<PAGE> 50
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iii) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and Regulation 1.401(k)-1(b).
However, for purposes of Sections 2.2 and 4.4(g), recharacterized
Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. For Plan Years
beginning after December 31, 1988, Excess Contributions
recharacterized as voluntary Employee contributions shall
continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 4.2(c);
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 4.7(a)) that such Highly Compensated Participant is
permitted to make under the Plan in the absence of
recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the entire
amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be
45
<PAGE> 51
accomplished by reducing the actual deferral ratio as required herein,
and the Excess Contributions for the family unit shall then be
allocated among the Family Members in proportion to the Elective
Contributions of each Family Member that were combined to determine
the group actual deferral ratio. Notwithstanding the foregoing, with
respect to Plan Years beginning prior to January 1, 1990, compliance
with the Regulations then in effect shall be deemed to be compliance
with this paragraph.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer may make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 4.5 (a). Such contribution shall be
allocated to the Participant's Elective Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) If during a Plan Year the projected aggregate amount of Elective
Contributions to be allocated to all Highly Compensated Participants under
this Plan would, by virtue of the tests set forth in Section 4.5(a), cause
the Plan to fail such tests, then the Administrator may automatically
reduce proportionately or in the order provided in Section 4.6(a) each
affected Highly Compensated Participant's deferral election made pursuant
to Section 4.2 by an amount necessary to satisfy one of the tests set forth
in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years beginning
after December 31, 1986 for the Highly Compensated Participant group shall
not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for
Plan Years beginning after December 31, 1988, to prevent the multiple
use of the alternative method described in this paragraph and Code
Section 401(m)(9)(A), any
46
<PAGE> 52
Highly Compensated Participant eligible to make elective deferrals
pursuant to Section 4.2 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer and to make
Employee contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section
401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group,
the average of the ratios (calculated separately for each Participant in
each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 4.1 (b), voluntary Employee contributions made pursuant to
Section 4.12 and Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a) on behalf of each
such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 4.8
(d), only Employer matching contributions (excluding Employer matching
contributions forfeited or distributed pursuant to Sections 4.2(f) and 4.6
(a) (1) or forfeited pursuant to Section 4.8 (a)) contributed to the Plan
prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions pursuant to
Section 4.1(b) or voluntary Employee contributions pursuant to Section 4.12
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(c)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation 1.401(m)-1
(b) (5) which is incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan
47
<PAGE> 53
Year must be the same as the plan year of the plan to which the elective
deferrals and the qualified non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414 (q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual contribution ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be
determined by aggregating Employer matching contributions made
pursuant to Section 4.1(b), voluntary Employee contributions made
pursuant to Section 4.12, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) and
"414(s) Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the
close of the Plan Year. Notwithstanding the foregoing, with respect
to Plan Years beginning prior to January 1, 1990, compliance with the
Regulations then in effect shall be deemed to be compliance with this
paragraph.
(2) The Employer matching contributions made pursuant to Section
4.1(b), voluntary Employee contributions made pursuant to Section
4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6 (a) and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of determining
the "Actual Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
48
<PAGE> 54
(e) For purposes of this section and Code Sections 401 (a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under code Section 410(b)(2)(A)(ii) as in effect
for Plan Years beginning after December 31, 1988), such plans shall be
treated as one Plan, In addition, two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are made may
be considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a) (4), 410(b) and 401(m). In such a
case, the aggregated plans must satisfy this section and Code Sections
401(a) (4), 410(b) and 401(m) as though such aggregated plans were a single
plan. Plans may be aggregated under this paragraph (e) for Plan Years
beginning after December 31, 1988, only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in
Code Section 4975(e) (7) or 409 may not be aggregated with this Plan for
purposes of determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in code
Section 497.5 (e) (7) or 409 for Plan Years beginning after December 31,
1988) which are maintained by the Employer or an Affiliated Employer to
which matching contributions, Employee contributions, or both, are made,
all such contributions on behalf of such Highly Compensated Participant
shall be aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with or within the
same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions pursuant to
Section 4.1 (b) (whether or not a deferral election was made or suspended
pursuant to section 4.2 (e)) or voluntary Employee contributions pursuant
to Section 4.12 (whether or not voluntary Employee
49
<PAGE> 55
contributions are made) allocated to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning after December
310 1986, the "Actual Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group pursuant
to Section 4.7(a), the Administrator (on or before the fifteenth day
of the third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct the
Trustee to distribute to the Highly Compensated Participant having the
highest actual contribution ratio, his Vested portion of Excess
Aggregate Contributions (and Income allocable to such contributions)
and, if forfeitable, forfeit such non-vested Excess Aggregate
Contributions attributable to Employer matching contributions (and
Income allocable to such forfeitures) until either one of the tests
set forth in Section 4.7(a) is satisfied or until his actual
contribution ratio equals the actual contribution ratio of the Highly
Compensated Participant having the second highest actual contribution
ratio. This process shall continue until one of the tests set forth in
Section 4.7(a) is satisfied. The distribution and/or forfeiture of
Excess Aggregate contributions shall be made in the following order:
(1) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a)(2);
(2) Employer matching contributions.
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in proportion
to the Vested and non-Vested portion of such contributions, then the
Vested portion of the Participant's Account attributable to Employer
matching contributions after the correction shall be subject to
Section 6.5(i).
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate Contributions (and income) shall be treated
as a pro rata distribution and/or forfeiture of Excess Aggregate
contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution of
Excess Aggregate Contributions (and Income). Forfeitures of Excess
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Aggregate Contributions shall be treated in accordance with Section
4.4.
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes
of Code Sections 404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to section
4.9(b) for the Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount Of Excess
Aggregate Contributions is equal to the Employer matching
contributions made pursuant to Section 4.1 (b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions Pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on
behalf of the Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution
ratio (determined after application of this paragraph) by his "414(s)
Compensation." The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made pursuant to Section
4.1(b), voluntary Employee contributions made pursuant to Section
4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4,6(a) and any qualified
non-elective contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of such Highly Compensated
Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k)) maintained by the Employer that ends
with or within the
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<PAGE> 57
Plan Year or which are treated as voluntary Employee Contributions due
to recharacterization pursuant to Section 4.6(a).
(f) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules,
then the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) of
each Family Member that were combined to determine the group actual
contribution ratio. Notwithstanding the foregoing, with respect to
Plan Years beginning prior to January 1, 1990, compliance with the
Regulations then in effect shall be deemed to be compliance with this
paragraph.
(g) If during a Plan Year the projected aggregate amount of
Employer matching contributions, voluntary Employee contributions and
Excess Contributions recharacterizad as voluntary Employee
contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided in
Section 4.8(a) each affected Highly Compensated Participant's
projected share of such contributions by an amount necessary to
satisfy one of the tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in section 4.7(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants, A separate
accounting shall be maintained for the purpose of excluding such If
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 4.5(a).
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4. 9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additional, credited to a Participant's accounts for any "limitation
year" shall equal the lesser of: (1) $30,000 (or, if greater,
one-fourth of the dollar limitation in affect under code Section
415(b)(1)(A)) or (2) twenty-five percent (25%) of the Participant's
"415 Compensation" for such "limitation year." For any short
"limitation year," the dollar limitation in (1) above shall be reduced
by a fraction, the numerator of which is the number of full months in
the short "limitation year" and the denominator of which is twelve
(12).
(b) For Purposes of applying the limitations of Code Sect ion
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions, (2)
Employee contributions for "limitation years" beginning after December
31, 1986, (3) forfeitures, (4) amounts allocated, after March 31,
1984, to an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan maintained by the
Employer and (5) amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits allocated
to the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section
419(e)) maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in paragraph (a)(2)
above shall not apply to: (1) any contribution for medical benefits
(within the meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition," or (2) any
amount otherwise treated as an "annual addition" under code section
415(1)(l).
(c) For purposes of applying the limitations of Code Section 415,
the transfer of funds from one qualified plan to another is not an
"annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in code Sections 402(a)(5), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant to Code
section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension
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excludable from gross income under Code section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
(e) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code
section 415(d) pursuant to the Regulations. The adjusted limitation is
effective as of January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(f) For the Purpose of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(g) For the purpose of this Section, if the Employer is a Member of a
controlled group of corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section 414(b) and (c) as
modified by code Section 415(h)), is a member of an affiliated service
group (as defined by Code Section 414(m)), or is a member of a group of
entities required to be aggregated pursuant to Regulations under Code
Section 414(o), all Employees of such Employers shall be considered to be
employed by a single Employer.
(h) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, all Employers of a Participant who maintain this Plan will be
considered to be a single Employer.
(i)(1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan shall
equal the maximum "annual additions" for the "limitation year" minus any
"annual additional" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined contribution plan
subject to Code Section 412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which have the same Anniversary
Date, "annual
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additions" will be credited to the Participant's accounts under the
defined contribution plan subject to Code Section 412 prior to
crediting "annual additions", to the Participant's accounts under the
defined contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's accounts
under this Plan without regard to the limitations of Code Section 415
and (ii) the denominator of which is such "annual additions" for all
plans described in this subparagraph.
(j) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans maintained
by the Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any "limitation year" may not exceed
1.0.
(k) The defined benefit plan fraction for any "limitation year" is a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the
"limitation year" under Code Sections 415(b) and (d) or 140 percent of the
highest average compensation, including any adjustments under Code Section
415(b).
Notwithstanding the above, if the Participant was a Participant
as of the first day of the first "limitation year" beginning after December
31, 1986, in one or more defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of the last
"limitation year" beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the
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defined benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all "limitation years" beginning
before January 1, 1987.
(1) The defined contribution plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the annual additions to
the Participant's Account under all the defined contribution plans (whether
or not terminated) maintained by the Employer for the current and all prior
"limitation years" (including the annual additions attributable to the
Participant's nondeductible Employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds, as defined in
Code Section 419(e), and individual medical accounts, as defined in Code
Section 415(1)(2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and all
prior "limitation years" of service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer). The
maximum aggregate amount in any "limitation year" is the lesser of 125
percent of the dollar limitation determined under Code Sections 415(b) and
(d) in effect under Code Section 415(c) (1) (A) or 35 percent of the
Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day
of the first "limitation year" beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end
of the last "limitation year" beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Code Section 415 limitation applicable to the
first "limitation year" beginning on or after January 1, 1987. The annual
addition for any "limitation year" beginning before January 1, 1987 shall
not be recomputed to treat all Employee contributions as annual additions.
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(m) Notwithstanding the foregoing, for any "limitation year" in
which the Plan is a Top Heavy Plan, 100 percent shall be substituted
for 125 percent in Sections 4.9(k) and 4.9(l) unless the extra minimum
allocation is being provided pursuant to Section 4.4. However, for
any "limitation year" in which the Plan is a Super Top Heavy Plan, 100
percent shall be substituted for 125 percent in any event.
(n) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in
this Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the
limits of Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to be
exceeded for any Participant, the Administrator shall (1) distribute
any elective deferrals (within the meaning of Code Section 402(g)(3))
or return any voluntary Employee contributions credited for the
"limitation year" to the extent that the return would reduce the
"excess amount" in the Participant's accounts (2) hold any "excess
amount" remaining after the return of any elective deferrals or
voluntary Employee contributions in a "Section 415 suspense account"
(3) use the "Section 415 suspense account" in the next "limitation
year" (and succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that Participant is
covered by the Plan as of the end of the "limitation year," or if the
Participant is not so covered, allocate and reallocate the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to all Participants in the Plan
before any Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation year" (4)
reduce Employer contributions to the Plan for such "limitation year"
by the amount of the "Section 415 suspense account" allocated and
reallocated during Such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year"
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shall mean the excess, if any, of (1) the "annual additions" which
would be credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts"
for all Participants in the Plan during the "limitation year." The
"Section 415 suspense account" shall not share in any earnings or
losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, provided that
the trust from which such funds are transferred permits the transfer
to be made and the transfer will not jeopardize the tax exempt status
of the Plan or Trust or create adverse tax consequences for the
Employer. The amounts transferred shall be set up in a separate
account herein referred to as a "Participant's Rollover Account" Such
account shall be fully Vested at all times and shall not he subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by
the Trustee pursuant to the provisions of this Plan and may not he
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-l(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-l(d). In no event may
the distribution be less than $500.
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Participant's Rollover Account shall be
used to provide additional benefits to the Participant or his
Beneficiary. Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but not
limited
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to, all notice and consent requirements of Code Sections 417 and
411(a)(11) and the Regulations thereunder. Furthermore, such amounts
shall be considered as part of a Participant's benefit in determining
whether an involuntary cash-out of benefits without Participant
consent may be made.
(e) The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as
part of the general Trust Fund, to be determined by the Administrator.
(f) All amounts allocated to a Participant's Rollover Account may
be treated as a Directed Investment Account pursuant to Section 4.13.
(g) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) distributions from another qualified plan which are eligible
rollover distributions and which are either transferred by the
Employee to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover; (iii)
amounts transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement account has no
assets other than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum distribution (B) were
eligible for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said assets;
and (iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.
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(h) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of
this Section and may also require the Employee to provide an opinion
of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(i) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the opportunity to increase
their retirement income, each Participant may, at the discretion of
the Administrator, elect to Voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such
contributions shall be paid to the Trustee within a reasonable period
of time but in no event later than ninety (90) days after the receipt
of the contribution. The balance in each Participant's Voluntary
Contribution Account shall be fully Vested at all times and shall not
be subject to Forfeiture for any reason. Effective October 1, 1987,
Voluntary Contributions will no longer be permitted.
(b) A Participant may elect to withdraw his voluntary
contributions from his voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Sections 417 and 411(a)(11)
and the Regulations thereunder. If the Administrator maintains
sub-accounts with respect to voluntary contributions (and earnings
thereon) which were made on or before a specified date, a Participant
shall be permitted to designate which sub-account shall be the source
for his withdrawal. In no event may the withdrawal be less then $500.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Voluntary Contribution Account shall be
used to provide additional benefits to the Participant or his
Beneficiary.
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(d) The Administrator may direct that voluntary contributions
made after a valuation date be segregated into a separate account for
each Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as
part of the general Trust Fund, to be determined by the Administrator.
(e) All amounts allocated to a Voluntary Contribution Account may
be treated as a Directed Investment Account pursuant to Section 4.13.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion, may determine that
all Participants be Permitted to direct the Trustee as to the
investment of all or a portion of the interest in any one or more of
their individual account balances. If such authorization is given,
Participants may, subject to a procedure established by the
Administrator and applied in a uniform nondiscriminatory manner,
direct the Trustee in writing to invest any portion of their account
in specific assets, specific funds or other investments permitted
under the Plan and the directed investment procedure. That portion of
the account of any Participant so directing will thereupon be
considered a Directed Investment Account, which shall not share in
Trust Fund earnings.
(b) A separate Directed Investment Account shall be established
for each Participant who has directed an investment. Transfers
between the Participant's regular account and his Directed Investment
Account shall be charged and credited as the case may be to each
account. The Directed Investment Account shall not share in Trust Fund
earnings, but it shall be charged or credited as appropriate with the
net earnings, gains, losses and expenses as well as any appreciation
or depreciation in market value during each Plan Year attributable to
such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by
the Administrator, herein called "valuation date,"
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to determine the net worth of the assets comprising the Trust Fund as it exists
on the "valuation date." In determining such net worth, the Trustee shall value
the assets comprising the Trust Fund at their fair market value as of the
"valuation date" and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date." If such
securities were not traded on the "valuation date," or if the exchange on which
they are traded was not open for business on the "valuation date," then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date." Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date," which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date or Early Retirement
Date. However, a Participant may postpone the termination of his employment with
the Employer to a later date, in which event the participation of such
Participant in the Plan, including the right to receive allocations pursuant to
Section 4.4, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Trustee shall distribute all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the
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value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct the Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute any remaining Vested amounts credited to the accounts of
a deceased Former Participant to such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an outstanding
loan to the Participant or Former Participant shall be taken into account
in determining the amount of the Pre-Retirement Survivor Annuity.
(d) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(e) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the death benefit shall be the Participant's spouse, who
shall receive such benefit in the form of a Pre-Retirement Survivor Annuity
pursuant to Section 6.6. Except, however, the Participant may designate a
Beneficiary other than his spouse if:
(1) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in Section
6.6, and the spouse has waived his or her right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which provides otherwise),
or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke
his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change
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with the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected
to relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
6.3 DISABILITY RETIREMENT BENEFITS
No disability benefits, other than those payable upon termination of
employment, are provided in this Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any
reason other than death or retirement, the Administrator may direct
the Trustee to segregate the amount of the Vested portion of such
Terminated Participant's Combined Account and invest the aggregate
amount thereof in a separate, federally insured savings account,
certificate of deposit, common or collective trust fund of a bank or a
deferred annuity. In the event the Vested portion of a Participant's
Combined Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and share in
allocations pursuant to Section 4.4 until such time as a
distribution is made to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall
be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Early or Normal
Retirement). However, at the election of the Participant, the
Administrator shall direct the Trustee to cause the entire Vested
portion of the Terminated Participant's Combined Account to be payable
to such Terminated Participant. Any distribution under this paragraph
shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 417 and 411(a) (11) and the
Regulations thereunder.
If the value of a Terminated Participant's Vested benefit derived
from Employer and Employee contributions does not exceed $3,500 and
has never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the
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entire Vested benefit to be paid to such Participant in a single lump sum.
For purposes of this Section 6.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall be deemed
to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account determined
on the basis of the Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
(c) Notwithstanding the vesting schedule above, the Vested percentage
of a Participant's Account shall not be less than the Vested percentage attained
as of the later of the effective date or adoption date of this amendment and
restatement.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any full or
partial termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
(e) The computation of a Participant's nonforfeitable percentage of
his interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the Plan shall be treated as
having been amended if the Plan provides for an automatic change in vesting due
to a change in top heavy status. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period may elect to
have his nonforfeitable percentage computed under the Plan without regard to
such amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The Participant's
election period
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shall commence on the adoption date of the amendment and shall
and 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(f)(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if
such termination had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in
service, and such Former Participant had received, or was
deemed to have received, a distribution of his entire Vested
interest prior to his reemployment, his forfeited account
shall be reinstated only it he repays the full amount
distributed to him before the earlier of five (5) years
after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the
first period of five (5) consecutive 1-Year Breaks in
Service commencing after the distribution, or in the event
of a deemed distribution, upon the reemployment of such
Former Participant. In the event the Former Participant does
repay the full amount distributed to him, or in the event of
a deemed distribution, the undistributed portion of the
Participant's Account must be restored in full, unadjusted
by any gains or losses occurring subsequent to the
Anniversary Date or other valuation date coinciding with or
preceding his termination. The source for such
reinstatement shall first be any Forfeitures occurring
during the year. If such source is insufficient, then the
Employer shall contribute an amount which is sufficient to
restore any such forfeited Accounts provided, however, that
if a discretionary contribution is made for such year
pursuant to Section 4.1(c), such contribution shall first be
applied to restore any such Accounts and the remainder shall
be allocated in accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred,
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Years of Service shall include Years of Service prior to his
1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be used
for computing Years of Service for eligibility and for
vesting purposes only after he has been employed for one (1)
Year of Service following the date of his reemployment with
the Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits
otherwise allowable under (i) above if his consecutive
1-Year Breaks in Service equal or exceed the greater of (A)
five (5) or (B) the aggregate number of his pre-break Years
of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of
post-break service;
(iv) If a Former Participant who has not had his Years of
Service before a 1-Year Break in service disregarded
pursuant to (ii) above completes one (1) Year of Service for
eligibility purposes following his reemployment with the
Employer, he shall participate in the Plan retroactively
from his date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes a Year of Service (a 1-Year
Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively
from the first day of the Plan Year during which he
completes one (1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a Participant
who is married on the "annuity starting date" and who does not die
before the "annuity starting date" shall receive the value of all of
his
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benefits in the form of a joint and survivor annuity. The joint
and survivor annuity is an annuity that commences immediately and
shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall
continue to the spouse during the spouse's lifetime at a rate
equal to 50% of the rate at which such benefits were payable to
the Participant. This joint and 50% survivor annuity shall be
considered the designated qualified joint and survivor annuity
and automatic form of payment for the purposes of this Plan.
However, the Participant may elect to receive a smaller annuity
benefit with continuation of payments to the spouse at a rate of
seventy-five percent (75%) or one hundred percent (100%) of the
rate payable to a Participant during his lifetime, which
alternative joint and survivor annuity shall be equal in value to
the automatic joint and 50% survivor annuity. An unmarried
Participant shall receive the value of his benefit in the form of
a life annuity. Such unmarried Participant, however, may elect
in writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an election to
waive the joint and survivor annuity by a married Participant,
but without the spousal consent requirement. The Participant may
elect to have any annuity provided for in this Section
distributed upon the attainment of the "earliest retirement age"
under the Plan. The "earliest retirement age" is the earliest
date an which, under the Plan, the Participant could elect to
receive retirement benefits.
(2) Any election to waive the joint and survivor annuity
must be made by the Participant in writing during the
election period and be consented to by the Participant's
spouse. If the spouse is legally incompetent to give
consent, the spouse's legal guardian, even if such guardian
is the Participant, may give consent. Such election shall
designate a Beneficiary (or a form of benefits) that may not
be changed without spousal consent (unless the consent of
the spouse expressly permits designations by the Participant
without the requirement of further consent by the spouse).
Such spouse's consent shall be irrevocable and must
acknowledge the effect of such election and be witnessed by
a Plan representative or a notary public. Such consent shall
not be required if it is established to the satisfaction of
the Administrator that the required consent cannot be
obtained because there is no spouse, the spouse cannot be
located, or other circumstances that may be prescribed by
Regulations. The election made by the Participant
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and consented to by his spouse may be revoked by the Participant
in writing without the consent of the spouse at any time during
the election period. The number of revocations shall not be
limited. Any new election must comply with the requirements of
this paragraph. A former spouse's waiver shall not be binding on
a new spouse.
(3) The election period to waive the joint and survivor annuity
shall be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section, the "annuity starting date"
means the first day of the first period for which an amount is
paid as an annuity, or, in the case of a benefit not payable in
the form of an annuity, the first day on which all events have
occurred which entitle the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide
to the Participant no less than 30 days and no more than 90 days
before the "annuity starting date" a written explanation of:
(i) the terms and conditions of the joint and survivor
annuity, and
(ii) the Participant's right to make, and the affect of,
an election to waive the joint and survivor annuity, and
(iii) the right of the Participant's spouse to consent to
any election to waive the joint and survivor annuity, and
(iv) the right of the Participant to revoke such election,
and the effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a
joint and survivor annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the
election of the Participant, shall direct the Trustee to distribute to
a Participant or his Beneficiary any amount to which he is entitled
under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash;
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(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide
such installment payments, the Administrator may (A) segregate
the aggregate amount thereof in a separate, federally insured
savings account, certificate of deposit in a bank or savings and
loan association, money market certificate or other liquid
short-term security or (B) purchase a nontransferable annuity
contract for a term certain (with no life contingencies)
providing for such payment. The period over which such payment
is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his
designated Beneficiary).
(3) Purchase of or providing an annuity. However, such annuity
may not be in any form that will provide for payments over a
period extending beyond either the life of the Participant (or
the lives of the Participant and his designated Beneficiary) or
the life expectancy of the Participant (or the life expectancy of
the Participant and his designated Beneficiary).
(c) The present value of a Participant's joint and survivor
annuity derived from Employer and Employee contributions may not be
paid without his written consent if the value exceeds, or has ever
exceeded, $3,500 at the time of any prior distribution. Further, the
spouse of a Participant must consent in writing to any immediate
distribution. if the value of the Participant's benefit derived from
Employer and Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the
Administrator may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the
preceding sentence after the "annuity starting date" unless the
Participant and his spouse consent in writing to such distribution.
Any written consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution and shall be
made in a manner consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution commences prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
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(1) No consent shall be valid unless the Participant has received
a general description of the material features and an explanation
of the relative values of the optional forms of benefit available
under the Plan that would satisfy the notice requirements of Code
Section 417.
(2) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the commencement of
payment of any benefit. However, any election to defer the
receipt of benefits shall not apply with respect to distributions
which are required under Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must
not be made more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to
the distribution.
(e) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits made on or after January
1, 1985, whether under the Plan or through the purchase of an annuity
contract, shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)-2), the
provisions of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed to him not
later than April 1st of the calendar year following the later of
(i) the calendar year in which the Participant attains age 70 1/2
or (ii) the calendar year in which the Participant retires,
provided, however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in the calendar
year in which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner" during any
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subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the calendar
year following the calendar year in which such subsequent Plan
Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under
the preceding sentence and must be made over the life of the
Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy of
the Participant (or the life expectancies of the Participant and
his designated Beneficiary) in accordance with Regulations.
Notwithstanding the foregoing, clause (ii) above shall not apply
to any Participant unless the Participant had attained age 70 1/2
before January 1, 1988 and was not a "five (5) percent owner" at
any time during the Plan Year ending with or within the calendar
year in which the Participant attained age 66 1/2 or any
subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made
over the period of the Participant's life expectancy exceeds
fifty percent (50%) of the then present value of the total
payments to be made to the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall not be redetermined in accordance with Code
Section 401(a)(9)(D). Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V
and VI of Regulation 1.72-9.
(g) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written designation
to have his retirement benefit paid in an alternative method
acceptable under Code Section 401(a) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
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(h) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of the Plan.
(i) If a distribution is made at a time when a Participant is not
fully Vested in his Participant's Account (employment has not
terminated) and the Participant may increase the Vested percentage in
such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by
the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time, AB is the account balance at the relevant
time, D is the amount of distribution, and R is the ratio of the
account balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have his death benefit paid to his surviving
spouse in the form of a Pre-Retirement Survivor Annuity. The
Participant's spouse may direct that payment of the Pre-Retirement
Survivor Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment of
such benefit will commence at the time the Participant would have
attained the later of his Normal Retirement Age or age 62. However,
the spouse may elect a later commencement date. Any distribution to
the Participant's spouse shall be subject to the rules specified in
Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in
writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
6.5(a)(2). Further, the spouse's consent must
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acknowledge the specific nonspouse Beneficiary. Notwithstanding the
foregoing, the nonspouse Beneficiary need not be acknowledged,
provided the consent of the spouse acknowledges that the spouse has
the right to limit consent only to a specific Beneficiary and that the
spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made provided
a written explanation of the Pre-Retirement Survivor Annuity is given
to the Participant and such waiver becomes invalid at the beginning of
the Plan Year in which the Participant turns age 35. In the event a
Vested Participant separates from service prior to the beginning of
the election period, the election period shall begin on the date of
such separation from service.
(d) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to such
Participant (and consistent with Regulations), a written explanation
of the Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to Section 6.5(a)(5). For the
purposes of this paragraph, the term "applicable period" means, with
respect to a Participant, whichever of the following periods ends
last:
(1) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant
attains age 35;
(2) A reasonable period after the individual becomes a
Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the case
of a Participant who separates before attaining age 35. For this
purpose, the Administrator must provide the
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explanation beginning one year before the separation from service
and ending one year after such separation. If such a Participant
thereafter returns to employment with the Employer, the
applicable period for such Participant shall be redetermined.
For purposes of applying this Section 6.6(d), a reasonable
period ending after the enumerated events described in paragraphs (2),
(3) and (4) is the end of the two year period beginning one year prior
to the date the applicable event occurs, and ending one year after
that date.
(e) If the present value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the immediate
distribution of such amount to the Participant's spouse. No
distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the
value exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution, an immediate distribution of the entire amount may be
made to the surviving spouse, provided such surviving spouse consents
in writing to such distribution. Any written consent required under
this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
(f)(1) In the event the death benefit is not paid in the form of
a Pre-Retirement Survivor Annuity, it shall be paid to the
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary), subject to the rules
specified in Section 6.6(g):
(i) One lump-sum payment in cash;
(ii) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the
Participant or his Beneficiary. After periodic installments
commence, the Beneficiary shall have the right to direct the
Trustee to reduce the period over which such periodic
installments shall be made, and the Trustee shall adjust the
cash amount of such periodic installments accordingly.
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(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct the Trustee to
segregate the death benefit into a separate account, and the
Trustee shall invest such segregated account separately, and the
funds accumulated in such account shall be used for the payment
of the installments.
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January
1, 1985 shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If it is determined pursuant to Regulations
that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to
him, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution selected pursuant
to Section 6.5 as of his date of death. If a Participant dies before
he has begun to receive any distributions of his interest under the
Plan or before distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to his
Beneficiaries by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion shall be
distributed over the life of such designated Beneficiary (or over a
period not extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than December
31st of the calendar year immediately following the calendar year in
which the Participant died. However, in the event the Participant's
spouse (determined as of the date of the Participant's death) is his
Beneficiary, the requirement that distributions commence within one
year of a Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1) December
31st of the calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the calendar year
in which the Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse begin, then
the 5-year distribution requirement of this Section shall apply as if
the spouse was the Participant.
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(h) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of
a life annuity) shall not be redetermined in accordance with Code
Section 401(a)(9)(D). Life expectancy and joint and last
survivor expectancy shall be computed using the return multiples
in Tables V and VI of Regulation 1.72-9.
(i) Subject to the spouse's right of consent afforded under
the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a
written designation to have his death benefits paid in an
alternative method acceptable under Code Section 401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee
is to make a distribution or to commence a series of payments an or as of an
Anniversary Date, the distribution may be made or begun on such date or as soon
thereafter as is practicable. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall begin
not later than the 60th day after the close of the Plan Year in which the latest
of the following events occurs: (a) the date on which the Participant attains
the earlier of age 65 or the Normal Retirement Age specified herein; (b) the
10th anniversary of the year in which the Participant commenced participation in
the Plan; or (c) the date the Participant terminates his service with the
Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability an account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of
the Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by
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reason of the inability of the Administrator, after sending a registered letter,
return receipt requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or his Beneficiary, the
amount so distributable shall be treated as a Forfeiture pursuant to the Plan.
In the event a Participant or Beneficiary is located subsequent to his benefit
being reallocated, such benefit shall be restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan
Year up to the lesser of 100% of his Participant's Elective Account
valued as of the last Anniversary Date or other valuation date or the
amount necessary to satisfy the immediate and heavy financial need of
the Participant. Any distribution made pursuant to this Section shall
be deemed to be made as of the first day of the Plan Year or, if
later, the valuation date immediately preceding the date of
distribution, and the Participant's Elective Account shall be reduced
accordingly. Withdrawal under this Section shall be authorized only
if the distribution is on account of:
(1) Expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152) or necessary for
these persons to obtain medical care;
(2) The costs directly rebated to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section unless
the Administrator, based upon the Participant's representation and
such other facts as are known to the Administrator, determines that
all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need
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of the Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably
anticipated to result from the distribution;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all plans maintained by the
Employer;
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary
Employee contributions will be suspended for at least twelve (12)
months after receipt of the hardship distribution or, the
Participant, pursuant to a legally enforceable agreement, will
suspend his elective deferrals and voluntary Employee
contributions to the Plan and all other plans maintained by the
Employer for at least twelve (12) months after receipt of the
hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make elective deferrals for
the Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under Code Section 402(g) for such next taxable year less
the amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
(c) Notwithstanding the above, for Plan Years beginning after
December 31, 1988, distributions from the Participant's Elective
Account pursuant to this Section shall be limited, as of the date of
distribution, to the Participant's Elective Account as of the end of
the last Plan Year ending before July 1, 1989, plus the total
Participant's Deferred Compensation after such date, reduced by the
amount of any previous distributions pursuant to this Section. In no
event may the withdrawal be less than $500.
(d) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations
thereunder.
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6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
6.12 DIRECT ROLLOVER
(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(b) For purposes of this Section the following definitions shall
apply:
(1) An eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and the
portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(2) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), or a qualified trust
described in Code Section 401(a), that
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accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are distributees with
regard to the interest of the spouse or former spouse.
(4) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. Any such amendment
shall be adopted by formal action of the Employer's board of directors
and executed by an officer authorized to act on behalf of the
Employer. However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only be made
with the Trustee's and Administrator's written consent. Any such
amendment shall become effective as provided therein upon its
execution. The Trustee shall not be required to execute any such
amendment unless the Trust provisions contained herein are a part of
the Plan and the amendment affects the duties of the Trustee
hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become
property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar
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transaction) shall be effective to the extent it eliminates or
reduces any "Section 411(d)(6) protected benefit" or adds or
modifies conditions relating to "Section 411(d)(6) protected
benefits" the result of which is a further restriction on such
benefit unless such protected benefits are preserved with respect
to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A),
early retirement benefits and retirement-type subsidies, and
optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination. Upon any full or partial
termination, all amounts credited to the affected Participants'
Combined Accounts shall become 100% vested as provided in Section
6.4 and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies
the provisions of Section 6.5. Distributions to a Participant
shall be made in cash or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not
result in the reduction of "Section 411(d)(6) protected benefits"
in accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
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7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances: (1)
loans shall be made available to all Participants and Beneficiaries on
a reasonably equivalent basis; (2) loans shall not be made available
to Highly Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (3) loans
shall bear a reasonable rate of interest; (4) loans shall be
adequately secured; and (5) shall provide for repayment over a
reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date on
which such loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on which such loan
was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall
be considered one plan. Additionally, with respect to any loan made
prior to January 1, 1987, the $50,000 limit specified in (1) above
shall be unreduced.
(c) Loans shall provide for level amortization with payments to
be made not less frequently than each pay period over a period not to
exceed five (5) years. However, loans used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at the
time the loan is made) as a principal residence of the Participant
shall provide for periodic repayment over a reasonable period of time
that may exceed five (5) years. Notwithstanding the foregoing, loans
made prior to January 1, 1987 which are used to acquire, construct,
reconstruct or substantially rehabilitate any dwelling unit which,
within a reasonable period of time is to be used (determined at the
time the loan is made) as a principal residence of the Participant or
a member of his family (within the meaning of code Section 267 (c)(4))
may provide for periodic repayment
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over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for
periodic payments which are made less frequently than each pay period and
which do not necessarily result in level amortization.
(d) Any loan made pursuant to this Section after August 18, 1985
where the Vested interest of the Participant is used to secure such loan
shall require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a). Such written consent must be obtained
within the 90-day period prior to the date the loan is made. However, no
spousal consent shall be required under this paragraph if the total
accrued benefit subject to the security is not in excess of $3,500.
(e) Any loans granted or renewed on or after the last day of the
first Plan Year beginning after December 31, 1988 shall be made
pursuant to a Participant loan program. Such loan program shall be
established in writing and must include, but need not be limited to, the
following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve Plan assets.
Such Participant loan program shall be contained in a separate written
document which, when properly executed, is hereby incorporated by reference and
made a part of the Plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the necessity of
amending this Section.
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ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
8.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which
shall be payable out of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate,
sell, transfer, assign, pledge, encumber, or charge the same shall
be void; and no such benefit shall in any manner be liable for,
or subject to, the debts, contracts. liabilities, engagements, or
torts of any such person, nor shall it be subject to attachment
or legal process for or against such person, and the same
shall not be recognized by the Trustee, except to such extent as may
be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, as a result of a loan from the
Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount
distributed as shall equal such loan indebtedness shall be paid by the
Trustee to the Trustee or the Administrator, at the direction of the
Administrator, to apply against or discharge such loan indebtedness.
Prior to making a payment, however, the Participant or Beneficiary
must be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does not agree
that the loan indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of
the validity of the claim in accordance with procedures provided in
Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code
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Section 414(p), and those other domestic relations orders
permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The
Administrator shall establish a written procedure to determine
the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further,
to the extent provided under a "qualified domestic relations
order," a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
8.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of New York, other than its laws respecting choice of
law, to the extent not preempted by the Act.
8.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
8.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding
the Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they shall be entitled to be reimbursed
from the Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or
of the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any trust fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes other
than the exclusive benefit of Participants, Retired Participants, or
their Beneficiaries.
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(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time
of payment and the Trustees shall return such amount to the
Employer within the one (1) year period, Earnings of the Plan
attributable to the excess contributions may not be returned to
the Employer but any losses attributable thereto must reduce the
amount so returned.
8.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company
(as such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
8.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or
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privilege contrary to the terms of any Contract which it issues hereunder, or
the rules of the insurer.
8.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
8.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section 4.1;
and shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended
under the Plan that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under the
Plan. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or
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depreciation in asset value. Any person or group may serve in more than one
Fiduciary capacity. In the furtherance of their responsibilities hereunder, the
"named Fiduciaries" shall be empowered to interpret the Plan and Trust and to
resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.
8.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
8.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed
by law for filing the Employer's return for the taxable year in
which the Plan was adopted, or such later date as the Secretary
of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.1(e), any contribution by the Employer
to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent
any such deduction is disallowed, the Employer may, within one
(1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall
return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess
contribution may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
8.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
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IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
Signed, sealed, and delivered
in the presence of:
Getty Petroleum Corp.
[sig] By [sig]
- ------------------------ ------------------------
EMPLOYER
[sig]
- ------------------------
WITNESSES AS TO EMPLOYER
90
<PAGE> 1
EXHIBIT 10.17
Amended and Restated Hazardous Waste and PMPA
Indemnification Agreement
This Amended and Restated Hazardous Waste and PMPA Indemnification
Agreement is made as of the 31st day of October, 1995, among Getty Petroleum
Corp. ("Getty"), Power Test Realty Company Limited Partnership ("the Borrower")
and Fleet Bank of Massachusetts, N.A. (the "Bank").
WITNESSETH:
WHEREAS, the Borrower duly authorized, executed and delivered to the Bank
of New England, N.A. ("BNE") a Loan Agreement dated as of December 10, 1986, as
amended by Amendment No. 1 to Loan Agreement dated as of November 30, 1989 (the
"Original Loan Agreement") which provided, upon certain terms and conditions,
for the making of loans (the "Loans") by BNE to the Borrower, which Loans are
secured by mortgages to BNE of certain gasoline service station properties (the
"Stations") owned by the Borrower;
WHEREAS, the Borrower, Getty and BNE entered into a Hazardous Waste
Indemnification Agreement dated as of December 10, 1986, as amended by Amendment
No. 1 to Hazardous Waste Indemnification Agreement dated as of November 30,
1989, pursuant to the Original Loan Agreement, which the parties hereto desire
to amend and restate;
WHEREAS, the Borrower has duly authorized, executed and delivered to the
Bank an Amended and Restated Loan Agreement of even date herewith (the "Amended
Loan Agreement") which amends and restates the Original Loan Agreement;
WHEREAS, the Bank is the successor by name change to Fleet National Bank of
Boston, which was the successor in interest to the Federal Deposit Insurance
Corporation, as Receiver for New Bank of New England, N.A., which was the
successor in interest to the Federal Deposit Insurance Corporation, as Receiver
for BNE;
WHEREAS, the Borrower is the lessor of certain Stations leased to Getty,
and Getty is obligated to indemnify the Borrower pursuant to the Leases (as
defined in the Amended Loan Agreement);
<PAGE> 2
WHEREAS, the Bank is not willing to refinance the Loans to the Borrower
pursuant to the Amended Loan Agreement unless, and it is accordingly an express
condition precedent to the refinancing of the Loans that Getty shall agree to
indemnify the Borrower and the Bank for any and all losses, claims or
liabilities arising with regard to any hazardous wastes or environmental damage
or hazards attributable to or occurring at, or on the premises of, any Station
and any loss resulting from any litigation or governmental proceedings of any
kind involving allegations of any violation of the Petroleum Marketing Practices
Act or any other law in connection with the acquisition of the Stations by Getty
or the Borrower or any related entity;
WHEREAS, in order to induce the Bank to refinance the Loans to the
Borrower, Getty has agreed to enter into this Agreement;
NOW THEREFORE, in consideration of these premises, and as an inducement to
the Bank to refinance the Loans, Getty agrees with the Borrower and the Bank as
follows:
1. All capitalized terms not defined herein shall have the meanings
ascribed to them in the Amended Loan Agreement.
2. Getty hereby absolutely and unconditionally covenants and agrees to
indemnify and hold harmless the Borrower and the Bank and their respective
successors, assigns, representatives agents and servants from and against any
and all claims, liabilities, obligations, losses, damages, penalties, taxes,
actions, suits, costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Borrower, the Bank or any such
other person, in any way relating to or arising out of any event, occurrence,
condition of, use of or state of repair at any Station with regard to any
environmental damage, real, threatened or potential, and any damage caused by
any hazardous waste substance or gasoline or petroleum product contamination or
damage, whether now existing or hereafter arising or occurring, or the existence
of any hazardous waste substance or gasoline or petroleum contamination in, on,
or around the land of any Station. Getty covenants and agrees that it will be
fully responsible for the repair or replacement of all equipment at any Station,
including without limitation, underground storage tanks, connecting piping and
associated machinery and equipment, whether above or below ground. It is
understood and agreed that the foregoing indemnification shall include any
claims or proceedings asserted by the U.S. Environmental Protection Agency or
any other federal, state, local, or municipal regulatory or administrative body.
<PAGE> 3
3. Getty hereby absolutely and unconditionally covenants and agrees
to indemnify and hold harmless the Borrower and the Bank and their respective
successors, assigns, representatives, agents and servants from and against any
and all claims, liabilities, obligations, losses, damages, penalties, taxes,
actions, suits, costs, expenses or disbursements (including reasonable
attorneys fees and expenses) of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Borrower, the Bank or any other
person, in any way relating to or arising out of any litigation or governmental
proceeding of any kind involving allegations of any violation of the Petroleum
Marketing Practices Act, 15 U.S.C. Section 2801 et seg., as amended, or any
other law or statute in connection with the acquisition of the Stations by
Getty or the Borrower. Without limiting the foregoing, Getty agrees to pay
directly to the Bank an amount equal to the Initial Appraised Value (as defined
in the Amended Loan Agreement) of any Station which is required to be sold,
transferred or otherwise disposed of by the Borrower, Getty or any other party
to any third party as a result of any litigation or governmental proceeding
referred to in the immediately preceding sentence. Any such amount shall be
paid to the Bank as a condition to and simultaneously with such sale, transfer
or other disposition and shall be applied by the Bank as if it were a voluntary
prepayment of the Loan.
4. So long as the Loan Documents shall remain in force and effect,
the Bank shall have the right upon the terms and conditions Set forth in
Section 5.20 of the Loan Agreement but not the obligation, through such
representatives or independent contractors as it may designate, to enter upon
the Stations and to expend funds to (i) conduct environmental assessments in
accordance with the terms and provisions of the Amended Loan Agreement; or (ii)
cure any breach of any of the representations, warranties, covenants or
conditions relating to Environmental Laws or Hazardous Substances made by or
imposed on the Borrower or its Subsidiaries under the Amended Loan Agreement,
including environmental clean-up or remediation. Getty agrees to pay any
amounts paid or advanced by the Bank and all costs and expenditures incurred in
connection with the exercise of its rights and remedies under this Agreement
including without limitation attorneys' fees, expert's fees and environmental
consultant's fees. The exercise by the Bank of any of its rights or remedies in
this Agreement shall not operate or be deemed to make the Bank an "owner" or
"operator" of any Station or a "responsible party" within the meaning of any
Environmental Law.
<PAGE> 4
-4-
5. This Agreement shall be binding upon the successors and assigns of
Getty and shall inure to the benefit of the Borrower and the Bank and their
respective successors and assigns.
6. The terms of this Agreement and all rights and obligations of the
parties hereto shall be governed by the laws of the Commonwealth of
Massachusetts. Such terms, rights and obligations may not be changed, modified
or amended except by an agreement in writing signed by the party against whom
enforcement of such change is sought. This Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, but
all of such counterparts shall together constitute a single instrument.
<PAGE> 5
-5-
IN WITNESS WHEREOF, this Amended and Restated Hazardous Waste and PMPA
Indemnity Agreement has been duly executed as an instrument under seal as of
this 31st day of October, 1995.
GETTY PETROLEUM CORP.
By: John J. Fitteron
----------------------------
Name: John J. Fitteron
Title Senior Vice President
POWER TEST REALTY COMPANY
LIMITED PARTNERSHIP
BY: CLS General Partnership
Corp., its general
partner
By: Leo Liebowitz
----------------------------
Name: Leo Liebowitz
Title: President
FLEET BANK OF
MASSACHUSETTS, N.A.
By: Thomas F. McNamara
----------------------------
Name: Thomas F. McNamara
Title: Vice President
<PAGE> 1
EXHIBIT 10.28
MASTER LEASE
DATED
FEBRUARY 1, 1997
BETWEEN
GETTY REALTY CORP., AS LANDLORD,
AND
GETTY PETROLEUM MARKETING INC., AS TENANT
<PAGE> 2
TABLE OF CONTENTS
Paragraph Page
1 Definitions............................................ 2
2 Term................................................... 8
3 Rent................................................... 9
4 Additional Payments by Tenant; Impositions............ 10
5 Use................................................... 11
6 Compliance with Law................................... 12
7 Maintenance and Alterations........................... 12
8 Prohibited Liens...................................... 14
9 Hazardous Substances; Environmental Indemnification... 14
10 Indemnification; Liability of Landlord................ 15
11 Right of Contest...................................... 17
12 Insurance............................................. 18
13 Damage or Destruction................................. 20
14 Condemnation.......................................... 20
15 Transfers by Landlord................................. 21
16 Transfers by Tenant; Dealer Leases.................... 22
17 Quiet Enjoyment....................................... 23
18 Default by Tenant; Remedies........................... 24
19 Termination........................................... 28
<PAGE> 3
Paragraph Page
20 Notices.......................................................... 28
21 No Broker........................................................ 28
22 Economic Abandonment............................................. 29
23 Third Party Leases............................................... 29
24 Waivers.......................................................... 30
25 Further Assurances; Additional Deliveries........................ 30
26 Miscellaneous.................................................... 31
27 Interpretation; Execution and Application of Lease............... 32
_____________
<PAGE> 4
MASTER LEASE
ATTACHMENTS:
Exhibit "A" = Legal Description
Exhibit "B" = Third Party Lease locations
Exhibit "C" = Permitted Exceptions
Exhibit "D" = Premises with Non-complying UST's
Exhibit "E" = Premises with Ongoing Remediations
Exhibit "F" = Dealers in Default
Schedule 1 - Initial Term Fixed Rent
<PAGE> 5
INDEX OF DEFINED TERMS
DEFINED TERM PAGE
------------ ----
Additional Rent ....................... 2
Business Day .......................... 2
Casualty .............................. 2
Certifying Party ...................... 30
Clean-Up Obligor ...................... 15
Commencement Date...................... 2
Condemnation .......................... 2
Construction Work ..................... 2
Contest ............................... 17
County ................................ 2
Dealers ............................... 1
Default ............................... 2
Distribution Agreement................. 1
Equipment Liens ....................... 2
Environmental Law...................... 3
Estoppel Certificate................... 3
Event of Default ...................... 23
Fee Estate ............................ 3
Fee Mortgage .......................... 3
Fixed Rent ............................ 9
Government ............................ 3
Hazardous Substances................... 3
Hazardous Substances Discharge......... 4
Impositions ........................... 4
Include ............................... 33
Including ............................. 33
Indemnify ............................. 4
Indemnitee ............................ 4
Indemnitor ............................ 5
Initial Term .......................... 8
Insubstantial Condemnation............. 5
Land .................................. 1
Landlord .............................. 5
Law ................................... 5
Laws .................................. 5
Lease ................................. 1
Leasehold Estate ...................... 5
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<PAGE> 6
INDEX OF DEFINED TERMS (continued)
DEFINED TERM PAGE
------------ ----
Legal Costs ............... 5
Monetary Default .......... 5
Non-Monetary Default ...... 5
Notice .................... 5
Notice of Default ......... 5
Permitted Exceptions ...... 1
Person .................... 6
Petroleum Terminal ........ 6
Premises .................. 6
Prime Rate ................ 6
Prohibited Liens .......... 6
Renewal Option ............ 6
Renewal Term .............. 8
Rent ...................... 6
Requesting Party .......... 30
Service Station ........... 6
State ..................... 6
Sublease .................. 7
Substantial Condemnation... 7
Subtenant ................. 7
Subtenants ................ 7
Temporary Condemnation..... 7
Tenant .................... 7
Term ...................... 8
Termination Date .......... 7
Third Party Lease ......... 7
Third Party Lessor ........ 7
Transfer .................. 21
Unavoidable Delay ......... 7
UST ....................... 8
Waiver of Subrogation ..... 8
________
ii
<PAGE> 7
This MASTER LEASE (the "Lease") is made and entered into on February 1, 1997
(the "Commencement Date"), between Getty Realty Corp., a Delaware corporation
whose address is 125 Jericho Turnpike, Jericho, New York 11753 ("Landlord"),
and Getty Petroleum Marketing Inc., a Maryland corporation whose address is
125 Jericho Turnpike, Jericho, New York 11753 ("Tenant").
R E C I T A L S
A. Landlord holds good and marketable fee simple absolute title to the
lands described in EXHIBIT A, (the "Land"), together with: (a) all buildings,
structures and other improvements and appurtenances presently located on the
Land; (b) all right, title and interest of Landlord, if any, in and to the land
lying in the bed of any street or highway in front of or adjoining the Land to
the center line of such street or highway; (c) the appurtenances and all the
estate and rights of Landlord in and to the Land; (d) any strips or gores
adjoining the Land; and (e) all right, title and interest of Landlord, if any,
in and to any furnishings, fixtures, equipment or other personal property
attached or appurtenant to any improvements located on the Land which are not
being transferred to Tenant on the date hereof (all, collectively, together
with the properties set forth in Exhibit B, the "Premises") subject only to the
estates, interests, liens, charges and encumbrances set forth in EXHIBIT C (the
"Permitted Exceptions").
B. Landlord (including certain of its subsidiaries) is the lessee of
certain Premises described in EXHIBIT B (the "Third Party Leases").
C. The Premises consist of Petroleum Terminals and Service Stations.
D. Landlord and Tenant have entered into that certain Reorganization and
Distribution Agreement dated as of _______, 1997 (the "Distribution
Agreement") transferring to Tenant the Marketing Assets and Marketing Business
(as such terms are defined in the Distribution Agreement) in anticipation of a
distribution by Landlord of the common stock of Tenant to the stockholders of
Landlord.
E. In accordance with the Distribution Agreement, Landlord desires to
lease or sublease the Premises to Tenant, and Tenant desires to lease or
sublease the Premises from Landlord, most of which Service Station Premises are
subject to the tenancies of lessee-dealers ("Dealers").
F. The parties desire to enter into this Lease to set forth their rights
and obligations relating to the Premises.
NOW, THEREFORE, in exchange for good and valuable consideration, Landlord
hereby leases and subleases the Premises to Tenant and Tenant hereby takes and
hires the Premises from Landlord, subject only to the Permitted Exceptions, and
the Dealers' tenancies, for the Term (as hereinafter defined), upon the terms
and conditions of this Lease.
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1 Definitions.
The following definitions shall apply throughout this Lease, in addition
to any other definitions elsewhere in this Lease. An Index of Defined Terms
follows the signature page.
1.1 Additional Rent. The term "Additional Rent" means any and all sums
and payments that this Lease requires Tenant to pay to Landlord, except Fixed
Rent. Additional Rent shall also include all Impositions.
1.2 Business Day. A "Business Day" means any weekday on which banks in
the State of New York are generally open to conduct regular banking business
with bank personnel.
1.3 Casualty. A "Casualty" means any damage or destruction affecting any
or all structures or other improvements located on the Premises.
1.4 Commencement Date. February 1, 1997 for all Premises, except for
those Premises requiring consent to a sublease from a Third Party Lessor, which
shall commence on such later date upon which consent is obtained.
1.5 Condemnation. A "Condemnation" means any taking of the Premises or
any part of the Premises by condemnation or by exercise of any right of eminent
domain, or by any similar proceeding or act of any Government.
1.6 Construction Work. The term "Construction Work" means any
alteration, modification, demolition, or other construction or reconstruction
work, or the construction or reconstruction of any new improvements, or repair
of any existing improvements, located on, under or at the Premises.
1.7 County. The "County" means the county where the Premises are
located.
1.8 Default. A "Default" means any Monetary Default or Non-Monetary
Default.
1.9 Equipment Liens. The term "Equipment Liens" means purchase-money
security interests, financing leases, personal property liens, and similar
arrangements (including the corresponding UCC-1 financing statements) relating
to Tenant's acquisition, encumbering or financing of personal property,
fixtures or equipment used in connection with the operation of any business on
the Premises not prohibited by this Lease, any Third Party Lease or any Fee
Mortgage on the Premises, that are leased, purchased pursuant to conditional
sale or installment sale arrangements, encumbered by a security agreement made
by Tenant, or used under licenses, such as convenience food store equipment,
gasoline marketing equipment, UST's, furniture, fixtures and equipment,
telephone, telecommunications and facsimile transmission equipment, point of
sale equipment, televisions, radios, and computer systems, provided that each
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Equipment Lien encumbers or otherwise relates to only the property financed or
otherwise provided by the secured party under such Equipment Lien.
1.10 Environmental Law. The term "Environmental Law" shall mean any Law
related to environmental conditions on, under, or about the Premises, or
arising from use or occupancy of the Premises, including soil, air and ground
water conditions, or governing the use, generation, storage, transportation,
disposal, release, clean-up or control of Hazardous Substances in, on, at, to
or from the Premises.
1.11 Estoppel Certificate. An "Estoppel Certificate" means a statement
in writing containing any or all of the following statements (identifying in
reasonable detail any exceptions that may exist at the time), as requested by
either party: (a) this Lease has not been amended, constitutes the entire
agreement between Landlord and Tenant relating to the Premises, and is in full
force and effect; (b) neither Landlord nor Tenant is in default under this
Lease and to the best of the signer's knowledge no facts or circumstances exist
that, with the passage of time or the giving of notice, would constitute
defaults under this Lease by Landlord or Tenant; (c) Tenant has paid all Rent
to date; (d) the Commencement Date or any other then-ascertainable date
relevant to this Lease; and (d) such other matters as either party shall
reasonably request.
1.12 Fee Estate. The "Fee Estate" means Landlord's fee estate in the
Premises or any part of the Premises or any direct or indirect interest in such
fee estate or, in the case of Premises owned by a Third Party Lessor, the fee
estate of such Third Party Lessor.
1.13 Fee Mortgage. A "Fee Mortgage" means any mortgage, deed of trust,
deed to secure debt, assignment, security interest, pledge, financing statement
or any other instrument(s) or agreement(s) intended to grant security for any
obligation encumbering the Fee Estate, as entered into, renewed, modified,
amended, extended or assigned from time to time during the Term.
1.14 Fixed Rent. Fixed Rent shall include all rent payable under
Section 3.1 including Rent payable to Third Party Lessors.
1.15 Government. The term "Government" means each and every applicable
governmental authority, department, agency, bureau or other entity or
instrumentality having jurisdiction over the Premises, including the federal
government of the United States, the State government and any subdivisions and
municipalities thereof, including the County government, and all other
applicable governmental authorities and subdivisions thereof.
1.16 Hazardous Substances. The term "Hazardous Substances" shall include
flammable substances, explosives, radioactive materials, asbestos,
polychlorinated biphenyls, chemicals known to cause cancer or reproductive
toxicity, pollutants, contaminants, hazardous wastes, medical wastes, toxic
substances or related materials, petroleum and petroleum products, and
substances declared to be hazardous or toxic by Environmental Law.
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1.17 Hazardous Substances Discharge. The term "Hazardous Substances
Discharge" shall mean any deposit, spill, discharge, or other release of
Hazardous Substances that occurs at or from the Premises or that arises at any
time from the use, occupancy or operation of the Premises or any activities
conducted therein.
1.18 Impositions. The term "Impositions" means all taxes, special and
general assessments, water rents, rates and charges, commercial rent taxes, UST
fees and taxes, sewer rents and other impositions and charges of every kind and
nature whatsoever with respect to the Premises, that may be assessed, levied,
confirmed, imposed or become a lien on the Premises (other than on account of
any actions or omissions of Landlord or Third Party Lessor or conditions
existing on, at or with respect to the Premises before the Commencement Date)
by or for the benefit of any Government with respect to any period during the
Term together with any taxes and assessments that may be levied, assessed or
imposed by any Government upon the gross income arising from any Rent or in
lieu of or as a substitute, in whole or in part, for taxes and assessments
imposed upon or related to the Premises and commonly known as real estate
taxes. Notwithstanding the foregoing, all such obligations of a lessee in a
Third Party Lease are also Impositions. The term "Impositions" shall, however,
not include any of the following, all of which Landlord shall pay before
delinquent or payable only with a penalty: (a) any franchise, income, excess
profits, estate, inheritance, succession, transfer, gift, corporation,
business, capital levy, or profits tax, or license fee, of Landlord, (b) the
incremental portion of any of the items listed in this paragraph that would not
have been levied, imposed or assessed but for any sale or other direct or
indirect transfer of the Fee Estate or of any interest in Landlord during the
Term, (c) any charges that would not have been payable but for any act or
omission of Landlord or conditions existing on, at or with respect to the
Premises before the Commencement Date, (d) any charges that are levied,
assessed or imposed against the Premises during the Term based on the recapture
or reversal of any previous tax abatement or tax subsidy, or compensating for
any previous tax deferral or reduced assessment or valuation, or based on a
miscalculation or misdetermination of any charge(s) of any kind imposed or
assessed with respect to the Premises, relating to any period(s) before the
Commencement Date, and (e) interest, penalties and other charges with respect
to items "a" through "d."
1.19 Indemnify. Wherever this Lease provides that a party shall
"Indemnify" another from or against a particular matter, such term means that
the Indemnitor shall indemnify the Indemnitee (and the owner of the Fee Estate
and their respective partners, officers, directors, agents and employees) and
defend and hold the Indemnitee (and the owner of the Fee Estate and their
respective partners, officers, directors, agents and employees) harmless from
and against any and all loss, cost, claims, liability, penalties, judgments,
damage or other injury, detriment, or expense (including Legal Costs, interest
and penalties) reasonably incurred or suffered by the Indemnitee (and its
partners, officers, directors, agents and employees) on account of the matter
that is the subject of such indemnification or in enforcing the Indemnitor's
indemnity.
1.20 Indemnitee. An "Indemnitee" is a party that is entitled to be
Indemnified pursuant to this Lease.
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1.21 Indemnitor. An "Indemnitor" is a party that agrees to Indemnify
another party pursuant to this Lease.
1.22 Insubstantial Condemnation. An "Insubstantial Condemnation" means
any Condemnation other than a Substantial Condemnation.
1.23 Landlord. Getty Realty Corp. and certain of its subsidiaries, who
have approved this Lease on the signature page hereof.
1.24 Law. The term "Law" or "Laws" means all laws, ordinances,
requirements, orders, directives, rules and regulations of any applicable
Government affecting the development, improvement, alteration, use,
maintenance, operation or occupancy of the Premises or any part of the
Premises, whether in force at the Commencement Date or passed, enacted or
imposed at some time in the future, subject in all cases, however, to all
applicable waivers, variances and exemptions limiting the application of the
foregoing to the Premises.
1.25 Leasehold Estate. The "Leasehold Estate" means Tenant's leasehold
estate under this Lease, upon and subject to all the terms and conditions of
this Lease, and any Third Party Lease affecting the Premises, or any part of
such leasehold estate or any direct or indirect interest in such leasehold
estate.
1.26 Legal Costs. "Legal Costs" means all reasonable costs and expenses
incurred by a party to this Lease in connection with any legal proceeding,
including reasonable attorneys' fees, consultant's fees, court costs, and
expenses.
1.27 Monetary Default. A "Monetary Default" means any failure by Tenant
to pay any Rent or other sum(s) of money, including Additional Rent payable
pursuant to this Lease, when and as required to be paid pursuant to this Lease.
1.28 Non-Monetary Default. A "Non-Monetary Default" means any failure by
Tenant to comply with any terms or provisions of, or perform as required, by
this Lease, other than a Monetary Default.
1.29 Notice. The term "Notice" means any notice, demand, request,
election, designation, or consent, including any of the foregoing relating to a
Default or alleged Default, that is permitted, required or desired to be given
by either party in connection with this Lease. Notices shall be delivered, and
shall become effective, only in accordance with the requirements of Paragraph
20.
1.30 Notice of Default. A "Notice of Default" means any Notice from one
party to the other claiming or giving Notice of a Default or alleged Default by
the recipient.
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1.31 Person. "Person" is an individual, corporation or partnership,
including without limitation, Power Test Realty Company Limited Partnership.
1.32 Petroleum Terminal. "Petroleum Terminal" is a Premises which is a
terminal for the storage and distribution of petroleum products either owned or
leased by Landlord or one of its subsidiaries.
1.33 Premises. Each property listed in Exhibits A and B and,
collectively, all of the properties listed in Exhibits A and B, except for
those properties which may be deleted from time to time by Substantial
Condemnation, or by the expiration of a Third Party Lease or by not exercising
a Renewal Option.
1.34 Prime Rate. The "Prime Rate" means the prime rate or equivalent
"base" or "reference" rate for corporate loans that, at Landlord's election, by
Notice to Tenant, is: (a) published from time to time in the Wall Street
Journal; (b) announced from time to time by Chase Manhattan Bank, New York, New
York, or any other large United States "money center" commercial bank
designated by Landlord; or (c) if such rate is no longer so published or
announced, then a reasonably equivalent rate published by an authoritative
third party designated by Landlord. Notwithstanding anything to the contrary
in this paragraph, the Prime Rate shall never exceed the highest rate of
interest legally permitted to be charged in transactions of the character of
this Lease between parties of a character similar to Landlord and Tenant.
1.35 Prohibited Liens. A "Prohibited Lien" means any mechanic's,
vendor's, laborer's or material supplier's statutory lien or other similar lien
arising by reason of work, labor, services, equipment or materials supplied, or
claimed to have been supplied, to Tenant, which lien either: (a) is filed
against the Fee Estate or (b) is filed against the Leasehold Estate and, upon
termination of this Lease, would under the law of the State attach to the Fee
Estate. Notwithstanding anything to the contrary in this Lease, an Equipment
Lien shall not constitute a Prohibited Lien and nothing in this Lease shall
prohibit Tenant from creating, or require Tenant to remove, any Equipment Lien
except upon termination of this Lease.
1.36 Renewal Option. The right to renew the Lease as provided in Section
2.1 for each Premises individually.
1.37 Rent. The "Rent" means Fixed Rent and Additional Rent.
1.38 Service Station. A Premises which is currently used to sell motor
fuels or convenience store items or both, and in some instances is used for
motor vehicle repairs and/or other services ancillary to the sale of motor
fuels or convenience store items.
1.39 State. The "State" means the State where the Premises are located.
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1.40 Sublease. The term "Sublease" means any sublease of the Premises or
any part of the Premises, or any other agreement or arrangement (including a
license agreement or concession agreement) made by Tenant granting any third
party the right to occupy, use or possess any portion of the Premises. The
leases to the Dealers assigned under Paragraph 16.2 are Subleases.
1.41 Substantial Condemnation. A "Substantial Condemnation" means any
Condemnation that, in Tenant's reasonable judgment, renders the remaining
portion of the Premises unsuitable for the conduct of Tenant's business as a
gasoline service station and/or convenience store or such other permitted,
lawful use at the time of the Condemnation. Tenant may waive its right to
treat as a Substantial Condemnation any Condemnation that would otherwise
qualify as such.
1.42 Subtenant. The term "Subtenant" means any person having rights of
occupancy, use or possession under a Sublease, and any concessionaires and
licensees that Tenant elects to treat as Subtenants. The Dealers are
Subtenants.
1.43 Temporary Condemnation. A "Temporary Condemnation" means a
Condemnation relating to the temporary right to use or occupy the Premises or
any part of the Premises.
1.44 Tenant. Getty Petroleum Marketing Inc. and for certain Premises
located in the Mid-Hudson Valley, Kingston Oil Supply Corp.
1.45 Termination Date. The "Termination Date" means the date when this
Lease terminates or expires (i) for any Premises for which a Renewal Option is
not exercised, (ii) for Third Party Leases upon their expiration date, and
(iii) for all Premises, whether pursuant to the expiration of the Term as
provided for in this Lease or pursuant to Landlord's exercise of remedies upon
occurrence of an Event of Default.
1.46 Third Party Lease. A lease between a Third Party Lessor and Landlord
or a subsidiary of Landlord for the Premises.
1.47 Third Party Lessor. A Person who owns Premises and leases it to
Landlord or a subsidiary of Landlord. Power Test Realty Company Limited
Partnership is a Third Party Lessor.
1.48 Unavoidable Delay. The term "Unavoidable Delay" means a delay in
the performance of any obligation under this Lease (excluding in any case any
obligation to pay money) arising from or on account of any cause whatsoever
beyond the reasonable control of the person required to perform, including
strikes, labor troubles, litigation, Casualty, Condemnation, accidents, Laws,
governmental preemption, war, riots, and other causes beyond such party's
reasonable control, whether similar to or dissimilar to the causes specifically
enumerated in this
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paragraph. In no event shall Unavoidable Delay be deemed to include any delay
caused by a person's financial condition.
1.49 UST. An underground storage tank including related piping,
underground pumps, wiring and their monitoring devices.
1.50 Waiver of Subrogation. A "Waiver of Subrogation" means a provision
in, or endorsement to, any insurance policy required by this Lease, by which
the insurance carrier agrees to waive all rights of recovery by way of
subrogation against either party to this Lease in connection with any loss
covered by such insurance policy.
2 Term.
2.1 Initial Term and Renewal Term(s). The initial term of this Lease
(the "Initial Term") shall commence on the Commencement Date. The Initial Term
shall continue until 11:59 p.m. on January 31, 2012, unless terminated sooner.
Except as provided in Paragraph 23.3, Tenant shall have the absolute and
unconditional right and option (each such right and option, a "Renewal Option")
to extend and renew this Lease as to any or all of the Premises upon the same
terms and conditions (except for rental) as this Lease, for four (4) additional
successive periods (each, a "Renewal Term") following expiration of the Initial
Term. Tenant shall exercise each Renewal Option, if at all, by giving Landlord
Notice thereof (in compliance with this Lease) at least two (2) years before
the first day of the corresponding Renewal Term. Wherever this Lease refers to
the "Term," such reference means the Initial Term as extended from time to
time, pursuant to Tenant's Renewal Option(s), to include one or more Renewal
Term(s), so that upon Tenant's exercise of any Renewal Option(s), the "Term"
shall include the corresponding Renewal Term(s). At the expiration or
termination of (i) the Lease as applicable to any Premises and (ii) the final
Renewal Term provided for below, Tenant shall have no further rights to renew
or extend this Lease (x) as it applies to any Premises not previously extended
or renewed and (y) at the expiration of the final Renewal Term. The Renewal
Options and Renewal Terms are as follows:
2.1.1 First Renewal Term. The first Renewal Term shall be for a period
of ten (10) years beginning on February 1, 2012 and ending on January 31, 2022.
2.1.2 Second Renewal Term. The second Renewal Term shall be for a period
of ten (10) years beginning on February 1, 2022 and ending on January 31, 2032.
2.1.3 Third Renewal Term. The third Renewal Term shall be for a period
of ten (10) years beginning on February 1, 2032 and ending on January 31, 2042.
2.1.4 Fourth Renewal Term. The fourth and final Renewal Term shall be
for a period of ten (10) years beginning on February 1, 2042 and ending on
January 31, 2052.
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2.2. Default by Tenant. Tenant's Renewal Options shall remain effective
notwithstanding Tenant's Default, unless and until all cure periods available
to Tenant shall have expired without cure and Landlord shall have terminated
this Lease. Provided only that this Lease has not been terminated, there shall
be no conditions (express or implied) to Tenant's exercise of any Renewal
Option(s) (except as set forth in Section 23.3 as it pertains to a Third Party
Lease).
2.3 Title to Improvements and Personal Property. Notwithstanding
anything to the contrary in this Lease, except for certain USTs referred to in
Paragraph 7.6, and except for property owned by third parties, all
improvements constructed by Tenant and all personal property and equipment
located in, on or at the Premises or otherwise constituting part of the
Premises shall at all times during the Term be owned by, and shall belong to,
Tenant. All the benefits and burdens of ownership of the foregoing shall be
and remain in Tenant during the Term.
3 Rent.
3.1 Fixed Rent. Throughout the Term and all Renewal Terms, Tenant shall
pay Landlord, without notice or demand, in lawful money of the United States of
America, at Landlord's office or as Landlord shall otherwise designate, a net
annual rental (the "Fixed Rent") as follows:
3.1.1. Calculation of Fixed Rent. During the Initial Term and all
Renewal Terms, Fixed Rent shall be $______ per month all as more fully set
forth in Schedule 1 and as adjusted in this Article 3. The Fixed Rent during
the Initial Term and all Renewal Terms shall be reduced at the time that any
Premises may be deleted from the Lease by Substantial Condemnation, or by the
expiration or termination of a Third Party Lease described in Exhibit B by the
amount of Fixed Rent set forth on Schedule 1(as it may be increased pursuant to
Paragraph 3.1.2) attributable to such deleted Premises. The Fixed Rent during
any Renewal Term shall be reduced by the amount of Fixed Rent set forth on
Schedule 1 (as it may be increased pursuant to Paragraph 3.1.2) attributable to
all Premises for which Renewal Options have not been exercised by Tenant.
3.1.2. CPI Increases. At the end of the fifth (5th) Lease year (in the
first instance, on February 1, 2002) and at the end of each five (5) year
period thereafter during the Term and all Renewal Terms the Fixed Rent in
effect at the end of each such five (5) year period shall be increased by an
amount equal to all increases in the Consumer Price Index, Northeast Region or
the successor index thereto ("CPI"), over the prior five (5) year period (such
CPI increase to be computed on the Fixed Rent in effect for the relevant
January before the February 1 when the increase is to be effective); provided,
however, that in no event shall any one increase exceed fifteen (15%) percent
of the Fixed Rent in effect before the applicable February 1 increase effective
date. If the relevant CPI index is not yet available on any February 1 when an
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increase is to be effective, the Rent will be adjusted retroactively when such
CPI index becomes available.
3.2 Payment; Proration; Etc. Tenant shall pay Fixed Rent in equal
monthly installments in advance on the first day of each month. Rent for
partial months at the beginning or end of the Term shall be prorated based on
the number of days in such month within the Term divided by the total number of
days in the entire month. Tenant shall pay all Rent payable to Landlord by wire
transfer of currently available federal funds to Landlord's bank account as
designated by Landlord.
3.3 Additional Rent. In addition to Fixed Rent, Tenant shall pay
Landlord, as additional rent under this Lease, all Additional Rent within twenty
(20) days after receipt of invoice therefor or as otherwise set forth in
Paragraph 4.
3.4 No Allocation to Personal Property. None of the Rent provided for
under this Lease is allocable to any personal property included in the Premises.
3.5 Offsets. Tenant shall pay all Rent without offset, defense, claim,
counterclaim, reduction, deduction, or exercise of recoupment rights of any kind
whatsoever, except that notwithstanding anything to the contrary in this Lease,
Tenant shall be entitled to offset against Rent an amount equal to any of the
following obligations required to be performed by Landlord to the extent
Landlord fails to perform any such obligation after Notice and demand:
3.5.1 Landlord's obligation pursuant to Paragraph 7.6 to upgrade or
replace the UST's at the locations set forth in Exhibit D, to the extent Tenant
is required to expend monies therefor; and
3.5.2 Landlord's obligation pursuant to Paragraph 7.6 to comply in all
material respects with Environmental Laws at the locations set forth in Exhibit
D and Exhibit E, to the extent Tenant is required to expend monies to achieve
such compliance.
4 Additional Payments by Tenant; Impositions.
4.1 Landlord's Net Return. The parties intend that this Lease shall
constitute a "net lease," so that the Rent shall provide Landlord with "net"
return for the Term, free of any expenses or charges with respect to the
Premises, except as specifically provided in this Lease. Accordingly, Tenant
shall pay as Additional Rent and discharge, before failure to pay the same shall
create a material risk of forfeiture or give rise to a penalty, each and every
item of expense, of every kind and nature whatsoever, related to or arising from
the Premises, or by reason of or in any manner connected with or arising from
the development, leasing, operation, management, maintenance, repair, use or
occupancy of the Premises or any portion of the Premises. Notwithstanding
anything to the contrary in this Lease, Tenant shall not be required to pay any
of the following incurred by Landlord: (a) principal, interest, or other charges
payable under any
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Fee Mortgage; (b) depreciation, amortization, brokerage commissions, financing
or refinancing costs, management fees or leasing expenses incurred by Landlord
with respect to the Fee Estate or the Premises; (c) consulting, overhead,
travel, legal, staff, and other similar costs incidental to Landlord's ownership
of the Premises, other than Legal Costs that Tenant has expressly agreed to pay;
(d) any costs arising from or pursuant to any instrument or agreement affecting
the Premises that is not a Permitted Exception and to which Landlord is a party
and Tenant is not a party; and (e) the obligations of Landlord set forth in
Paragraphs 7.6 and 9.3.
4.2 Impositions. For any period within the Term (with daily proration for
periods partially within the Term and partially outside the Term), Tenant shall
pay and discharge, before failure to pay the same shall create a material risk
of forfeiture or give rise to a penalty, all Impositions. Tenant shall also pay
all interest and penalties assessed by any Government on account of late payment
of any Imposition, unless such late payment was caused by Landlord's failure to
remit an Imposition (paid to Landlord by Tenant) in accordance with Tenant's
reasonable instructions or Landlord's failure to promptly forward Tenant a copy
of a tax bill received by Landlord, in which case Landlord shall pay such
interest and penalties. Tenant shall within a reasonable time after Notice from
Landlord provide Landlord with reasonable proof that Tenant has paid any
Imposition(s) that this Lease requires Tenant to have paid.
4.3 Assessments in Installments. To the extent that may be permitted by
law or by a Third Party Lease, Tenant shall have the right to apply for
conversion of any assessment to cause it to be payable in installments. After
such conversion, Tenant shall pay and discharge only such installments of such
assessment as shall become due and payable during the Term.
4.4 Direct Payment by Landlord. If any Imposition or other item of Rent
is required to be paid directly by Landlord, then: (a) Landlord appoints Tenant
as Landlord's attorney in fact for the purpose of making such payment; and (b)
if the person entitled to receive such payment refuses to accept it from Tenant,
then Tenant shall give Landlord Notice of such fact and shall remit payment of
such Imposition to Landlord in a timely manner accompanied by reasonable
instructions as to the further remittance of such payment. Landlord shall with
reasonable promptness comply with Tenant's reasonable instructions and shall
Indemnify Tenant against Landlord's failure to do so.
4.5 Utilities. Tenant shall pay all fuel, gas, light, power, water,
sewage, garbage disposal, telephone and other utility charges, and the expenses
of installation, maintenance, use and service in connection with the foregoing,
relating to the Premises during the Term.
5 Use.
Tenant may use (a) a Service Station Premises for a gasoline service
station/convenience store, and (b) a Petroleum Terminal Premises for the storage
and distribution of petroleum products, and any other lawful purpose but only in
conjunction with the foregoing permitted uses. In using the Premises, Tenant
shall comply with all restrictions and mandates set forth in
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the Permitted Exceptions or a Third Party Lease where applicable. Tenant shall
not have any obligation to actually operate the Premises or otherwise conduct
business of any nature thereon and Tenant may discontinue operation of the
Premises at any time or from time to time except as may be required under a
Third Party Lease, Fee Mortgage or instances where a license(s) or permit(s) or
the continued use may be in jeopardy in which event Tenant shall continue
operation to the extent necessary to protect the license(s) or permit(s), or as
required pursuant to a Third Party Lease or a Fee Mortgage.
6 Compliance with Law.
Tenant shall during the Term, at Tenant's expense: (a) observe and comply
with all Laws affecting the Premises; (b) procure every permit, license,
certificate or other authorization required in connection with the lawful and
proper maintenance, operation, use and occupancy of the Premises or required in
connection with any Construction Work or improvements erected on the Premises
and (c) comply with all such permits, licenses, certificates and other
authorizations. Notwithstanding the foregoing, Tenant shall have the right to
contest any such Laws in accordance with this Lease.
7 Maintenance and Alterations.
7.1 Obligation to Maintain. During the Term, Tenant shall, except as
otherwise expressly provided in this Lease, keep and maintain the Premises and
every portion thereof in good order, condition and repair, subject to Casualty
and Condemnation (governed by separate applicable provisions of this Lease),
reasonable wear and tear, and any other conditions that this Lease does not
require Tenant to repair. Tenant's obligations to maintain the Premises shall
extend to all repairs that the Premises (including plumbing, heating, air
conditioning, ventilating, electrical, lighting, fixtures, walls, roof,
foundations, ceilings, floors, windows, doors, plate glass, skylights,
landscaping, driveways, parking lots, fences and signs located in, on or at the
Premises, together with any sidewalks and parkways adjacent to the Premises) may
require from time to time during the Term, whether structural or nonstructural,
foreseen or unforeseen, including such repairs as may be required by conditions
in existence at the Commencement Date and those Tenant is obligated to perform
under Paragraph 7.6.
7.2 Tenant's Right to Perform Alterations. At Tenant's sole cost and
expense and subject to the provisions of any Third Party Lease or Fee Mortgage,
Tenant shall have the right to perform any Construction Work relating to the
Premises, without Landlord's consent, as Tenant shall consider necessary or
appropriate. Tenant shall perform all Construction Work in a good,
professional, safe, and workmanlike manner, using licensed and insured
contractors in compliance with Law.
7.3 Plans and Specifications. To the extent that Tenant performs or
causes to be performed any Construction Work and obtains plans and
specifications or surveys (including working plans and specifications and
"as-built" plans and specifications and surveys) for such
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Construction Work, Tenant shall promptly upon Landlord's request provide
Landlord, for Landlord's information only, with a true and complete copy of such
plans and specification(s) or survey(s), subject to the terms of any agreement
between Tenant and the applicable outside architect, engineer or surveyor.
(Tenant shall exercise reasonable efforts to cause its agreements with such
outside professionals to permit the deliveries described in this paragraph.)
7.4 Excavations. If an excavation shall be made (or authorized) upon land
adjacent to the Land, then at Tenant's election Tenant shall either: (a) afford
to the person causing or authorized to cause such excavation, license to enter
the Premises, in accordance with Tenant's reasonable instructions, to perform
such work as such person shall reasonably deem necessary or desirable, and as
Tenant shall reasonably approve, to preserve and protect the Premises from
injury or damage and to support the same by proper foundations, or (b) perform
or cause to be performed, without cost or expense to Landlord in its capacity as
Landlord under this Lease, work of the nature described in clause (a) to the
extent reasonably necessary under the circumstances. Tenant shall not, by
reason of any excavations or work described in this paragraph, have any claim
against Landlord in its capacity as Landlord under this Lease for damages or for
Indemnity or for suspension, diminution, abatement or reduction of any Rent.
7.5 Cooperation by Landlord. Upon Tenant's request, subject to the
provisions of any Fee Mortgage, Landlord shall, without cost to Landlord,
promptly join in and execute (or assist Tenant in obtaining the requisite
consent of a Third Party Lessor) any instruments including, but not limited to,
applications for building permits, demolition permits, alteration permits,
consents, zoning, rezoning or use approvals, amendments and variances,
easements, encumbrances, and/or liens (excluding Mortgages) against the Premises
(Fee Estate and Leasehold Estate), and such other instruments as Tenant may from
time to time request in connection with Construction Work or to enable Tenant
from time to time to use and operate the Premises in accordance with this Lease,
provided each of the foregoing is in reasonable and customary form and does not
cause the Fee Estate to be encumbered as security for any obligation and does
not otherwise expose the Fee Estate to any material risk of forfeiture during
the Term. Tenant shall reimburse Landlord's Legal Costs and all other
out-of-pocket costs incurred in performing under this paragraph.
7.6 UST'S. Landlord shall retain responsibility for the maintenance and
repair of UST's at the Premises set forth in EXHIBIT D hereto, which UST's are
leased to Tenant hereunder. Tenant shall be responsible for the repair and
maintenance and replacement of all other UST's which were transferred to Tenant
on the date hereof. At the time the replacement or upgrading of the UST's is
completed at the Premises set forth in Exhibit D so that the UST's meet the
requirements of Law effective December 22, 1998, Landlord shall no longer be
responsible for the maintenance, repair or replacement of such UST's and,
except for Landlord's obligation under Paragraph 9.3 to remediate, Tenant shall
be solely responsible therefor. In the event that Tenant exercises the Renewal
Option for the First Renewal Term for certain Premises, under Paragraph 2.1, at
that time Landlord shall by a quitclaim Bill of Sale (disclaiming all
warranties, express and implied, including merchantability and fitness) transfer
the UST's under such
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Premises to Tenant for nominal consideration, except that the foregoing shall
not apply to any USTs owned by Third Party Lessors.
8 Prohibited Liens.
8.1 Tenant's Covenant. Tenant shall not suffer or permit any Prohibited
Lien to be filed. If a Prohibited Lien is filed then Tenant shall, within 30
days after receiving Notice from Landlord of such filing (but in any case within
15 days after receipt of Notice from Landlord of commencement of foreclosure
proceedings), commence and then prosecute appropriate action to cause such
Prohibited Lien to be paid, discharged or bonded. Nothing in this Lease shall
be construed to restrict Tenant's right to contest the validity of any
Prohibited Lien and to pursue Tenant's position to a final judicial
determination. The mere existence of a Prohibited Lien shall not be construed
as a default under this Lease unless Tenant fails to take action as aforesaid.
8.2 Protection of Landlord. Notice is hereby given that Landlord shall
not be liable for any labor or materials furnished or to be furnished to Tenant
upon credit, and that no mechanic's or other lien for any such labor or
materials shall attach to or affect the Fee Estate. Nothing in this Lease shall
be deemed or construed in any way to constitute Landlord's consent or request,
express or implied, by inference or otherwise, to any contractor, subcontractor,
laborer, equipment or material supplier for the performance of any labor or the
furnishing of any materials or equipment for any improvement, alteration or
repair of, or to, the Premises, or any part of the Premises, nor as giving
Tenant any right, power or authority to contract for, or permit the rendering
of, any services, or the furnishing of any materials that would give rise to the
filing of any liens against the Fee Estate. Tenant shall Indemnify Landlord
against any Construction Work performed on the Premises for or by Tenant,
including any Prohibited Lien arising from such Construction Work.
9 Hazardous Substances; Environmental Indemnification.
9.1 Restrictions. Tenant shall not cause or permit to occur after the
Commencement Date: (a) any material violation of any Environmental Law; or (b)
the use, generation, release, manufacture, refining, production, processing,
storage or disposal of any Hazardous Substance on, under, or about the Premises,
or the transportation to or from the Premises of any Hazardous Substance, except
to the extent that such use (i) is reasonably necessary for the conduct of
Tenant's business in accordance with acceptable industry standards for the
petroleum industry in which Tenant operates and (ii) complies in all material
respects with all applicable Environmental Laws.
9.2 Landlord's Representation. Except for the Premises set forth on
Exhibit D and Exhibit E, Landlord represents and warrants to Tenant that as of
the Commencement Date to the knowledge of Landlord the Premises comply in all
material respects with all Environmental Laws.
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9.3 Compliance; Clean-Up; Environmental Indemnification. Landlord shall
retain responsibility for the ongoing remediations at the Premises, set forth on
EXHIBIT E. Except as provided in the following sentence, Tenant shall, at
Tenant's expense, comply with all applicable Environmental Laws to the extent
such compliance is necessitated by events occurring after the Commencement Date.
Landlord shall, at Landlord's expense, comply with all applicable Environmental
Laws (a) to the extent such compliance is necessitated by events that occurred
before the Commencement Date, and (b) affecting the Premises (i) set forth on
Exhibit D until such time as the UST's have either been replaced or upgraded to
comply with the Law requiring compliance by December 22, 1998 and all
remediation has been completed until such time as Government closure has been
received for such Premises whether or not the Hazardous Substances Discharge
being remediated was discovered during the upgrade or replacement of the USTs,
and (ii) set forth on Exhibit E until all remediation has been completed to
Government closure. Except as expressly set forth hereinabove, any Hazardous
Substances Discharge discovered after the Commencement Date shall be deemed to
be an event that occurred after, and not before, the Commencement Date
notwithstanding the fact that the discharge causing the contamination may have
occurred in whole or in part before the Commencement Date. Any party required
by this paragraph to comply with Environmental Laws (the "Clean-Up Obligor")
shall, at the Clean-Up Obligor's own expense, make all submissions to, provide
all information required by, and otherwise fully comply with all requirements of
any Government arising under Environmental Laws with which such Clean-Up Obligor
is required to comply. If any Government requires any clean-up plan or clean-up
measures on account of Hazardous Substances Discharges for which a Clean-Up
Obligor is responsible, such Clean-Up Obligor shall, at its own expense, prepare
and submit the required plans and all related bonds and other financial
assurances and shall promptly and diligently carry out all such clean-up plans.
Any Clean-Up Obligor shall promptly provide the other party with all information
reasonably requested by such other party regarding the Clean-Up Obligor's use,
generation, storage, transportation or disposal of Hazardous Substances in, at,
or about the Premises and the remediation efforts undertaken.
9.4 Indemnity. Tenant shall Indemnify Landlord against any Hazardous
Substances Discharge for which Tenant is responsible under Paragraph 9.3.
Landlord shall Indemnify Tenant against any Hazardous Substances Discharge for
which Landlord is responsible under Paragraph 9.3.
10 Indemnification; Liability of Landlord.
10.1 Mutual Indemnity Obligations. Landlord and Tenant shall each
Indemnify the other against: (a) any wrongful act, wrongful omission or
negligence of the Indemnitor (and, in the case of (i) Tenant, that of any of
Tenant's Subtenants, and (ii) Landlord, that of any Third Party Lessor ) or its
or their partners, directors, officers, or employees; and (b) any breach or
default by the Indemnitor under this Lease. In addition to and without limiting
the generality of the foregoing indemnity, Tenant shall Indemnify Landlord and
Third Party Lessors against all the following matters (except to the extent any
claim arises from any wrongful act, wrongful
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omission or negligence of Landlord or any Third Party Lessor): (w) the operation
or occupancy of the Premises; (x) any Construction Work performed during the
Term; (y) the condition of the Premises or any street, curb or sidewalk
adjoining the Premises, whether or not such condition existed before the
Commencement Date; or of any vaults, tunnels, passageways or space under,
adjoining or appurtenant to the Premises whether or not such condition existed
before the Commencement Date; and (z) any accident, injury or damage whatsoever
caused to any person occurring during the Term, in or on the Premises or upon or
under the sidewalks adjoining the Premises. Notwithstanding anything to the
contrary in this Lease, neither party shall be required to Indemnify the other
party from or against such other party's intentional acts or negligence. This
paragraph is not intended to cover Environmental Laws and Hazardous Substances
Discharges, which are covered in Paragraph 9.
10.2 Liability of Landlord. Tenant is and shall be in exclusive control
and possession of the Premises during the Term as provided in this Lease.
Landlord shall not be liable for any injury or damage to any property or to any
person occurring on or about the Premises nor for any injury or damage to any
property of Tenant, or of any other person, during the Term. The provisions of
this Lease permitting Landlord to enter and inspect the Premises are intended to
allow Landlord to be informed as to whether Tenant is complying with the
agreements, terms, covenants and conditions of this Lease, and to the extent
permitted by this Lease, to perform such acts required by Landlord under this
Lease and of Tenant as Tenant shall fail to perform. Such provisions shall not
be construed to impose upon Landlord any obligation, liability or duty to third
parties, but nothing in this Lease shall be construed to exculpate, relieve or
Indemnify Landlord from or against any obligation, liability or duty of Landlord
to third parties existing at or before the Commencement Date.
10.3 Indemnification Procedures. Wherever this Lease requires an
Indemnitor to Indemnify an Indemnitee, the following procedures and requirements
shall apply:
10.3.1 Prompt Notice. The Indemnitee shall give the Indemnitor
prompt Notice of any claim. To the extent, and only to the extent, that both
(a) the Indemnitee fails to give prompt Notice and (b) the Indemnitor is
thereby prejudiced, the Indemnitor shall, except as otherwise required under a
Third Party Lease, be relieved of its indemnity obligations under this Lease.
10.3.2 Selection of Counsel. The Indemnitor shall be required to
select counsel reasonably acceptable to the Indemnitee. Counsel to the
Indemnitor's insurance carrier shall be deemed satisfactory. Indemnitee may
have its own counsel, at Indemnitee's expense, consult with Indemnitor's
counsel.
10.3.3 Settlement. The Indemnitor may, with the consent of the
Indemnitee, not to be unreasonably withheld, settle the claim, except that no
consent by the Indemnitee shall be required as to any settlement by which (x)
the Indemnitor procures (by payment, settlement, or otherwise) a release of the
Indemnitee pursuant to which the Indemnitee is not required to make
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any payment whatsoever to the claimant, (y) neither the Indemnitee nor the
Indemnitor acting on behalf of the Indemnitee makes any admission of liability,
and (z) the continued effectiveness of this Lease is not jeopardized in any way.
10.4 Insurance Proceeds. The Indemnitor's obligations shall be reduced by
net insurance proceeds actually collected by the Indemnitee on account of the
loss.
10.5 Survival. All indemnities set forth in the Lease shall survive the
termination or expiration of the Lease.
11 Right of Contest.
11.1 Tenant's Right. Notwithstanding anything to the contrary in this
Lease, Tenant shall have the right to contest, at its sole expense, by
appropriate legal proceedings diligently conducted in good faith, the amount or
validity of any Imposition or Prohibited Lien; the valuation, assessment or
reassessment (whether proposed or final) of the Premises for purposes of real
estate taxes; the validity of any Law or the application of any Law to the
Premises; or the validity or merit of any claim against which Tenant is required
to Indemnify Landlord under this Lease (any of the foregoing, a "Contest").
Tenant may defer payment of the contested Imposition or compliance with the
contested Law or performance of any other contested obligation pending the
outcome of the Contest, provided that such deferral does not subject the
Premises to any risk of imminent forfeiture or Fee Mortgage Foreclosure or
Landlord to any risk of criminal liability.
11.2 Landlord's Obligations and Protections. Landlord shall not be
required to join in any Contest unless a Law shall require that such Contest be
brought in the name of Landlord or any owner of the Fee Estate. In such case,
Landlord shall cooperate with Tenant, as Tenant shall reasonably request, so as
to permit such Contest to be brought in Landlord's name. Tenant shall pay all
reasonable costs and expenses (including Legal Costs) incident to a Contest.
Tenant shall Indemnify Landlord against any Contest brought by Tenant.
11.3 Miscellaneous. Tenant shall be entitled to any refund of any
Imposition (and penalties and interest paid by Tenant) based upon Tenant's prior
overpayment of such Imposition, whether such refund is made during or after the
Term. Upon termination of Tenant's Contest of an Imposition, Tenant shall pay
the amount of such Imposition (if any) as has been finally determined in such
Contest to be due, together with any costs, interest, penalties or other
liabilities in connection with such Imposition. Upon final determination of
Tenant's Contest of a Law, Tenant shall comply with such final determination.
Landlord shall not enter any objection to any Contest. Tenant's right to contest
any Imposition or the valuation, assessment or reassessment of the Premises for
tax purposes shall not be to the exclusion of Landlord, and Landlord shall have
the right to contest the foregoing upon notice to Tenant.
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12 Insurance.
12.1 Tenant to Insure. Tenant shall, at Tenant's sole cost and expense,
during the Term, maintain the following insurance (or its then reasonably
available equivalent) or such greater coverage as may be required by a Third
Party Lease:
12.1.1 Building. Building insurance providing coverage for the
Premises and all equipment, fixtures, and machinery at or in the Premises,
against loss, damage, and destruction by fire and other hazards encompassed
under broad form coverage as may be customary for like properties in the County
(but Tenant shall in no event be required to maintain earthquake or war risk
insurance) from time to time during the Term, in an amount not less than 80% of
the replacement value of the insurable buildings, structures, improvements and
equipment (excluding excavations and foundations) located at the Premises, but
in any event sufficient to avoid co-insurance. To the extent customary for like
properties at the time, such insurance shall include coverage for explosion of
steam and pressure boilers and similar apparatus located at the Premises; an
"increased cost of construction" endorsement; and an endorsement covering
demolition and cost of debris removal.
12.1.2 Liability. General public liability insurance against claims
for personal injury, death or property damage occurring upon, in or about the
Premises and adjoining streets and passageways. The coverage under all such
liability insurance shall be at least $50 million in the aggregate for any Lease
year, $5 million in respect of injury or death to a single person, and at least
$10 million, in respect of any one accident, and not less than full replacement
value for property damage. Landlord shall be entitled from time to time, upon
180 days' Notice to Tenant, to increase the dollar limits set forth in this
paragraph, subject to the following limitations, which shall be cumulative: (a)
such increased limits shall never exceed the limits initially set forth plus an
increase proportionate to the increase in the consumer price index from the
Commencement Date to the adjustment date, rounded to the nearest $1,000,000; (b)
such limits shall never exceed the limits customarily maintained for similar
commercial properties located in the County; and (c) Landlord shall not be
entitled to increase such limits more frequently than once every three years.
12.1.3 Workers' Compensation. Workers' compensation insurance
covering all persons employed in connection with any Construction Work or
operation of the Premises, and with respect to whom any claim could be asserted
against Landlord or the Fee Estate.
12.1.4 Other. All other insurance as Tenant determines appropriate
in the exercise of Tenant's reasonable business judgment.
12.2 Nature of Insurance Program. Tenant may provide any insurance
required by this Lease pursuant to a "blanket" or "umbrella" insurance policy,
provided that (i) such policy or a certificate of such policy shall specify the
amount(s) of the total insurance allocated to the
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Premises, which amount(s) shall not be subject to reduction on account of claims
made with respect to other properties and (ii) such policy otherwise complies
with this Lease.
12.3 Policy Requirements and Endorsements. All insurance policies
required by this Lease shall contain (by endorsement or otherwise) the following
provisions:
12.3.1 Additional Insureds. Liability insurance policies shall name
as additional insureds Landlord, its subsidiaries, Third Party Lessors and Fee
Mortgagees.
12.3.2 Primary Coverage. All policies shall be written as primary
policies not contributing with or in excess of any coverage that Landlord may
carry.
12.3.3. Tenant's Acts or Omissions. Each policy shall include, if
available without additional cost, a provision that any act or omission of
Tenant shall not prejudice any party's rights (other than Tenant's) under such
insurance coverage.
12.3.4 Contractual Liability. Policies of liability insurance shall
contain contractual liability coverage, relating to Tenant's indemnity
obligations under this Lease, to the extent ordinarily insured.
12.3.5 Insurance Carrier Standards. Each insurance carrier shall be
authorized to do business in the State and shall have a "Best's" rating of at
least B+-VI.
12.3.6 Notice to Landlord. The insurance carrier shall undertake to
give Landlord 60 days' prior Notice of cancellation or amendment. Failure to
give such Notice shall not adversely affect the rights or increase the
obligations of the insurance carrier.
12.4 Deliveries to Landlord. Upon Notice to such effect by Landlord,
Tenant shall deliver to Landlord and Third Party Lessors certificates and or
certified copies of the insurance policies required by this Lease, endorsed
"Paid" or accompanied by other evidence that the premiums for such policies have
been paid, at least thirty days before expiration of any then current policy.
12.5 Tenant's Inability to Obtain Insurance. So long as (a) any
insurance required by this Lease should, after diligent effort by Tenant, be
unobtainable at commercially reasonable rates through no act or omission by
Tenant and (b) Tenant shall obtain the maximum insurance reasonably obtainable
and give Notice to Landlord of the extent of Tenant's inability to obtain any
insurance required to be maintained under this Lease, then unless Tenant's
inability to procure and maintain such insurance results from some activity or
conduct not within Tenant's reasonable control, Tenant's obligation to procure
and maintain such insurance as is unobtainable shall be excused, but only so
long as conditions (a) and (b) are satisfied. Notwithstanding the foregoing, if
Tenant, after diligent effort, is unable to obtain any insurance required by
this
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Lease, Landlord shall have the right to obtain such insurance and shall charge
the cost of such insurance to Tenant as Additional Rent.
12.6 Waiver of Certain Claims. To the extent that Landlord or Tenant
purchases any hazard insurance relating to the Premises, the party purchasing
such insurance shall attempt to cause the insurance carrier to agree to a Waiver
of Subrogation. If any insurance policy cannot be obtained with a Waiver of
Subrogation, or a Waiver of Subrogation is obtainable only by the payment of an
additional premium, then the party undertaking to obtain the insurance shall
give Notice of such fact to the other party. The other party shall then have 10
Business Days after receipt of such Notice either to place the insurance with a
company that is reasonably satisfactory to the other party and that will issue
the insurance with a Waiver of Subrogation at no additional cost, or to agree to
pay the additional premium if such a policy can be obtained only at additional
cost. To the extent that the parties actually obtain insurance with a Waiver of
Subrogation, the parties release each other, and their respective authorized
representatives, from any claims for damage to any person or the Premises that
are caused by or result from risks insured against under such insurance
policies, but only to the extent of the available insurance proceeds.
12.7 No Representation of Adequate Coverage. Neither party makes any
representation, or shall be deemed to have made any representation, that the
limits, scope, or form of insurance coverage specified in this Article are
adequate or sufficient.
13 Damage or Destruction.
13.1 Notice; No Rent Abatement. Tenant shall promptly give Landlord
Notice of any Casualty. There shall be no abatement or reduction of Fixed Rent
or Additional Rent on account of a Casualty. Tenant shall with reasonable
promptness restore the damaged improvements as nearly as may be practicable to
their condition, quality, and class immediately prior to such Casualty, with
such changes or alterations (including demolition) as Tenant shall elect to
make in conformity with this Lease, all at Tenant's sole cost and expense.
13.2 Adjustment of Claims; Use of Insurance Proceeds. Tenant shall be
solely responsible for the adjustment of any insurance claim. All proceeds of
building or hazard insurance shall be paid to Tenant to be held and applied in
compliance with this Lease.
14 Condemnation.
14.1 Substantial Condemnation. If a Substantial Condemnation of any
Premises shall occur, then this Lease shall terminate as to such Premises as of
the effective date of such Substantial Condemnation, such Premises shall be
deemed to be deleted from Exhibit A or Exhibit B, and the Rent shall be reduced
accordingly. The proceeds of the Substantial Condemnation shall belong
entirely to Landlord or Third Party Lessor, other than such award(s) as Tenant
may be entitled to receive for moving expenses, trade fixtures and the like,
provided
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that such awards to Tenant do not reduce Landlord's share of the award or
conflict with a Third Party Lease.
14.2 Insubstantial Condemnation. If an Insubstantial Condemnation at any
Premises shall occur, then subject to the terms of any Fee Mortgage to the
contrary, any award or awards shall be paid to Tenant to be applied first to
repair, restoration or reconstruction of any remaining part of the improvements
not so taken. If the award(s) for any such Insubstantial Condemnation is not
sufficient to pay for said repair, restoration or reconstruction, Tenant shall
be responsible for completing same at Tenant's sole cost and expense. Tenant
shall perform such repair, restoration or reconstruction in accordance with
applicable requirements of this Lease. The balance of any such award or awards
remaining after the repair, restoration or reconstruction shall be distributed
to Landlord. From and after the effective date of the Insubstantial
Condemnation, Fixed Rent shall be adjusted as follows. New Fixed Rent shall
equal Fixed Rent, as it would have been determined without regard to the
Insubstantial Condemnation, multiplied by a fraction whose numerator is the
total value of the Premises after the Insubstantial Condemnation and whose
denominator is the total value of the Premises immediately before the effective
date of such Insubstantial Condemnation and without considering such
Insubstantial Condemnation or the expectation thereof.
14.3 Temporary Condemnation. If a Temporary Condemnation shall occur with
respect to any Premises, Rent shall not abate and, subject to the terms of any
Fee Mortgage or Third Party Lease to the contrary, Tenant will be entitled to
receive any award or payment.
14.4 Other Governmental Action. In the event of any action by any
Government not resulting in a Condemnation but creating a right to compensation,
such as the changing of the grade of any street upon which the Premises abut,
then this Lease shall continue in full force and effect without reduction or
abatement of Rent and subject to the terms of any Fee Mortgage or Third Party
Lease to the contrary, Tenant shall be entitled to receive the award or payment
made in connection with such action.
14.5 Prompt Notice. If either party becomes aware of any Condemnation or
threatened or contemplated Condemnation, then such party shall promptly give
Notice thereof to the other party.
15 Transfers by Landlord.
15.1 Landlord's Right to Convey. Landlord shall be entitled to convey the
Fee Estate of any Premises from time to time subject to the terms and conditions
of this Lease. Without limiting Tenant's remedies on account of any such
transaction, if Landlord conveys the Fee Estate in violation of this paragraph,
then: (x) such transaction shall be null, void, and of no force or effect; (y)
notwithstanding the foregoing, Tenant shall be entitled to equitable relief
requiring the cancellation and rescission of such transaction; and (z) Tenant
shall be entitled to have such
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violating Premises deleted from this Lease. Any conveyance of the Fee Estate
shall not terminate or impair any of the grantor's obligations as Landlord under
this Lease.
15.2 Landlord's Mortgages. This Lease shall be subject and subordinate to
all existing Fee Mortgages. This Lease and the Leasehold Estate hereunder shall
be subject and subordinate to all subsequent Fee Mortgages and the rights of
holders of such Fee Mortgages where a non-disturbance agreement is obtained
whereunder Tenant's rights under this Lease will not be disturbed upon any
foreclosure or other exercise of remedies under a Fee Mortgage, and provides
such other similar assurances as Tenant shall reasonably request. This Lease
and Leasehold Estate hereunder shall be prior and superior to all subsequent Fee
Mortgages where a non-disturbance agreement has not been obtained, except as
otherwise set forth in a Third Party Lease.
15.3 Zoning Lots. Without Tenant's prior written consent, which Tenant
shall not unreasonably withhold, Landlord shall not enter into any agreement or
instrument by which the Premises are combined with any other real property for
purposes of any Law governing zoning, bulk, development rights, or any similar
matter, or by which any rights arising under such Laws to develop the Premises
are transferred to any other real property.
16 Transfers by Tenant and Dealer Leases.
16.1 Tenant's Limited Right. Tenant may not assign, mortgage, pledge or
transfer all of this Lease (collectively, a "Transfer") without Landlord's
consent, which consent shall not be unreasonably withheld provided that the
assignee is no less credit worthy than Tenant. Tenant may not assign any
part(s) of this Lease and it is deemed reasonable for Landlord to refuse to
grant its consent therefor. Any permitted assignee of Tenant shall assume all
obligations and liabilities of Tenant under this Lease and if not so assumed,
Tenant shall continue to remain liable and responsible under this Lease. In no
event shall Tenant be relieved from its liabilities and obligations incurred or
accruing prior to the assignment. Tenant shall promptly notify Landlord of the
completion of any approved Transfer.
16.2 Dealer Leases. Landlord hereby assigns to Tenant, and Tenant hereby
assumes Landlord's interest in any leases of the Premises to all Dealers. From
the Commencement Date to the end of the Term, Tenant shall be entitled to all
rentals paid by Dealers and during such period Tenant shall perform all of the
obligations under each such Dealer lease attributable to lessor therein. Except
for those Dealer leases set forth in EXHIBIT F, to Landlord's knowledge,
Landlord represents that all such Dealer leases are currently in full force and
effect and that there are no defaults by any party under the terms of such
leases.
16.3 Tenant's Right to Sublet. Subject to the terms of any Third Party
Lease, Tenant may enter into a Sublease for the permitted uses set forth in
Paragraph 5, extend, renew or modify any Sublease, consent to any subleasing (or
further levels of subleasing) (all of which shall be within the defined term
"Sublease," and the occupants thereunder shall all be deemed "Subtenants"),
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terminate any Sublease or evict any Subtenant, all without Landlord's consent.
The term of any Sublease (including renewal options thereof,) shall not extend
beyond the Term (including only any Renewal Options previously exercised by
Tenant). If Tenant enters into any Sublease, then such Sublease shall be
subordinate to this Lease. If Tenant desires to enter into a Sublease for a use
other than the permitted uses set forth in Paragraph 5, any such Sublease shall
require Landlord's consent, which, except as provided in the following sentence
or under any Third Party Lease, shall not be unreasonably withheld. Landlord
may withhold consent to a Sublease if it, in its sole judgment, it determines
that (i) valuable licenses and permits will be lost as a result of the proposed
Sublease or (ii) Tenant's intended new use for the Premises will make the
premises materially less valuable. In the event that Landlord grants its
consent to a Sublease for lawful purposes other than the permitted uses set
forth in Paragraph 5, before commencing such new Sublease Tenant shall at its
expense remove all UST's and contaminated soil, if any, before the commencement
of the Sublease term. Thereafter, Tenant shall at its expense complete all
environmental investigations and/or remediations as may be required by
governmental authorities. Tenant hereby assigns, transfers and sets over to
Landlord all of Tenant's right, title, and interest in and to each Sublease
entered into by Tenant from time to time, together with all subrents or other
sums of money due and payable under such Sublease and all security deposited
with Tenant under such Sublease. Such assignment shall, however, become
effective and operative only if this Lease shall expire or be terminated or
canceled, or if Landlord re-enters or takes possession of the Premises pursuant
to this Lease, following (in either case) the expiration of all applicable cure
periods. Notwithstanding the foregoing, Tenant agrees, that upon the request of
Landlord, all subtenancies, as specified by Landlord, for the sale of petroleum
products will be terminated before the expiration, termination or cancellation
of this Lease.
16.4 Leasehold Mortgages. Notwithstanding anything in this Lease to the
contrary, Tenant shall not have the right, without Landlord's consent, to
execute and deliver Leasehold Mortgage(s) encumbering this Lease and the
Leasehold Estate.
16.5 No Release. No Transfer or Sublease shall affect or reduce any of
Tenant's obligations or Landlord's rights under this Lease. All obligations of
Tenant under this Lease shall continue in full force and effect notwithstanding
any Sublease or Transfer.
17 Quiet Enjoyment.
Landlord covenants that, so long as Landlord has not terminated this Lease
on account of an Event of Default by Tenant, Tenant shall and may peaceably and
quietly have, hold and enjoy the Premises for the Term without molestation or
disturbance by or from Landlord or anyone claiming by or through Landlord or
having title to the Premises paramount to Landlord, and free of any encumbrance
created or suffered by Landlord, except Permitted Exceptions, provided, however,
that the foregoing shall not apply if Landlord loses possession under a Third
Party Lease for any reason other than Landlord's default thereunder.
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18 Default by Tenant; Remedies.
18.1 Definition of "Event of Default." The term "Event of Default" shall
mean and refer to the occurrence of any one or more of the following
circumstances:
18.1.1 Monetary Default. If a Monetary Default shall occur and the
Monetary Default shall continue for 10 days after Landlord has given Tenant
Notice of such Monetary Default, specifying in reasonable detail the amount of
money required to be paid by Tenant and the nature of such payment. Monetary
Defaults shall include, without limitation, failure by Tenant to pay any item
of Rent, Additional Rent or any other charge or sum required to be paid by
Tenant hereunder.
18.1.2 Non-Monetary Default. Except for those Non-Monetary Defaults
set forth below which cannot be cured within 30 days, if a Non-Monetary Default
shall occur and the Non-Monetary Default shall continue and not be remedied by
Tenant within 30 days after Landlord shall have delivered to Tenant a Notice
describing the same in reasonable detail, or, in the case of a Non-Monetary
Default that cannot with due diligence be cured within 30 days from such Notice,
if Tenant shall not (x) within 30 days from Landlord's Notice advise Landlord of
Tenant's intention to take all reasonable steps necessary to remedy such
Non-Monetary Default, (y) duly commence the cure of such Non-Monetary Default
within such period, and then diligently prosecute to completion the remedy of
the Non-Monetary Default and (z) complete such remedy within a reasonable time
under the circumstances.
Non-Monetary Defaults shall include, without limitation, (a) if Tenant
shall make an assignment for the benefit of its creditors; (b) if any petition
shall be filed against Tenant in any court, whether or not pursuant to any
statute of the United States or of any State, in any bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceedings, and Tenant shall
thereafter be adjudicated bankrupt, or if such proceedings shall not be
dismissed within ninety (90) days after the institution of the same; or if any
such petition shall be so filed by Tenant or a liquidator; (c) if, in any
proceeding, a receiver, receiver and manager, trustee or liquidator be appointed
for all or any portion of Tenant's property, and such receiver, receiver and
manager, trustee or liquidator shall not be discharged within ninety (90) days
after the appointment of such receiver, receiver and manager, trustee or
liquidator; (d)Tenant shall fail to perform any covenant required by the
Distribution Agreement which failure shall continue beyond such cure periods, if
any, as are provided for in such Distribution Agreement; or (e) a default under
any Third Party Lease or under the provisions of a Fee Mortgage which affect
Tenant's use of the Premises.
18.2 Remedies. If an Event of Default occurs, then Landlord shall, at
Landlord's option, have any or all of the following remedies, all of which shall
be cumulative (so that Landlord's exercise of one remedy shall not preclude
Landlord's exercise of another remedy), in addition to such other remedies as
may be available at law or in equity or pursuant to any other terms of this
Lease. Landlord's remedies shall include, without limitation:
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18.2.1 Termination of Tenant's Rights. Landlord may terminate
Tenant's right to possession of the Premises by any lawful means, in which case
this Lease and the Term shall terminate (and such date of termination shall be
the Termination Date) and Tenant shall immediately surrender possession of all
of the Premises to Landlord.
18.2.2 Taking of Possession. Landlord may re-enter and take
possession of any or all of the Premises with or without process of law and
remove Tenant, with or without having terminated this Lease. This is intended
to constitute an express right of re-entry on Landlord's part.
18.2.3 Security Devices. Landlord may change the locks and other
security devices providing admittance to the Premises.
18.2.4 Conditional Limitation. Landlord may serve upon Tenant a
10-day notice of cancellation and termination of this Lease. Upon the
expiration of such 10-day period, this Lease and the Term shall automatically
and without any action by anyone terminate, expire and come to an end, by the
mere lapse of time, as fully and completely as if the expiration of such 10-day
period were the Termination Date. The passage of such 10-day period constitutes
the limit beyond which Tenant's tenancy no longer exists. Tenant shall then
quit and surrender the Premises to Landlord but Tenant shall remain liable as
provided for in this Lease. It is a conditional limitation of this Lease that
the Term shall terminate and expire as set forth in this paragraph. This
paragraph is intended to establish a conditional limitation and not a condition
subsequent.
18.2.5 Injunction of Tenant's Breaches. Landlord shall be entitled
to obtain a court order enjoining Tenant from continuing conduct constituting a
breach of Tenant's covenants in this Lease. Tenant specifically acknowledges
that damages would not constitute an adequate remedy for Tenant's breach of any
non-monetary covenant contained in this Lease.
18.2.6 Damages. Landlord may recover from Tenant all damages
incurred by Landlord by reason of Tenant's default, including the costs of
recovering possession, reletting the Premises, and any and all other damages
legally recoverable by Landlord. Such damages shall include, at Landlord's
election, either (a) the Rent provided for in this Lease, when and as due and
payable pursuant to this Lease, less (in the case of this clause "b" only)
Landlord's actual proceeds of reletting net of Landlord's actual reasonable
costs of reletting, or (b) the entire amount of Rent due for the entire Term (or
Renewal Term if applicable) shall accelerate and immediately become due and
payable. Landlord may recover such damages at any time after Tenant's default,
including after expiration of the Term.
18.2.7 Continue Lease. Landlord may at Landlord's option maintain
Tenant's right to possession, in which case this Lease shall continue in effect
and Landlord shall be entitled to continue to enforce this Lease, including the
right to collect Rent and the right to any remedies for nonpayment.
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18.3 Mitigation of Damages. Landlord agrees to take all commercially
reasonable steps necessary or appropriate to mitigate any damages that Landlord
may suffer on account of an Event of Default under this Lease. Without limiting
the preceding sentence, Landlord shall diligently endeavor to relet the Premises
under any circumstances where such reletting would mitigate Landlord's damages.
18.4 Tenant's Late Payments. If Tenant makes any payment required under
this Lease after such payment is first due and payable, then in addition to any
other remedies Landlord may have under this Lease, and without reducing or
adversely affecting any of Landlord's other rights and remedies, Tenant shall
pay Landlord within 10 days after demand interest on such late payment, at an
interest rate equal to the Prime Rate plus 3%, beginning on the date such
payment was first due and payable and continuing until the date when Tenant
actually makes such payment.
18.5 Landlord's Right to Cure. If Tenant shall at any time fail to make
any payment or perform any other act on its part to be made or performed
pursuant to this Lease, then Landlord, after ten (10) Business Days' Notice to
Tenant, or with such notice (if any) as is reasonably practicable under the
circumstances in case of an emergency, and without waiving or releasing Tenant
from any obligation of Tenant or from any default by Tenant and without waiving
Landlord's right to take such action as may be permissible under this Lease as a
result of such Default, may (but shall be under no obligation to) make such
payment or perform such act on Tenant's part to be made or performed pursuant to
this Lease. Landlord may enter upon the Premises for such purpose, and take all
such action on the Premises, as may be reasonably necessary under the
circumstances, but in doing so shall not unreasonably interfere with the conduct
of operations on the Premises by Tenant or anyone claiming through Tenant and
shall comply with Tenant's reasonable instructions. Tenant shall reimburse
Landlord, as Additional Rent (within 10 days after Notice from Landlord
accompanied by reasonable backup documentation), for all reasonable sums paid by
Landlord and all costs and expenses reasonably incurred by Landlord, together
with Landlord's Legal Costs, in connection with the exercise of Landlord's cure
rights under this paragraph.
18.6 Holding Over. The parties recognize and agree that if for any reason
or no reason Tenant remains in the Premises after the Termination Date, then
Landlord will suffer injury that is substantial, difficult or impossible to
measure accurately. Therefore, if both (a) Tenant remains in the Premises after
the Termination Date (for any month or partial month), for any reason or no
reason, and (b) either (i) Landlord at any time gives Tenant Notice that
Landlord elects to require Tenant to pay the liquidated damages described in
this paragraph or (ii) as of the date 31 days after the Termination Date,
Landlord has not commenced holdover proceedings against Tenant or otherwise
proceeded to remove Tenant from the Premises, then in addition to any other
rights or remedies available to Landlord, Tenant shall pay to Landlord, as
liquidated damages and not as a penalty, for each month (or portion of a month)
during which Tenant holds over in the Premises after the Termination Date, a sum
equal to: 120% (for the first month or partial month of holding over), 140% (for
the second month or partial month of holding over),
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and 150% (for each subsequent month or partial month of holding over) times the
Rent, including Additional Rent, payable under this Lease for the month in which
the Termination Date occurs.
18.7 Legal Costs. Provided in each and every case that Landlord
prevails, Tenant shall pay Landlord, as Additional Rent, all Legal Costs and any
other out-of-pocket costs incurred by Landlord on account of any litigation or
dispute between Landlord and Tenant, or claim made by Landlord against Tenant,
arising from this Lease, a Third Party Lease or the landlord-tenant relationship
under this Lease, or on account of Landlord's enforcement of this Lease upon
Tenant's default. In addition, subject to the same proviso, Tenant shall
reimburse Landlord for all Legal Costs and any other out-of-pocket costs
incurred by Landlord in any litigation to enforce or interpret this Lease or
seek declaratory or injunctive relief against Tenant in connection with this
Lease; to exercise Landlord's remedies against Tenant upon an Event of Default
under this Lease or pursuant to Law; to regain or attempt to regain possession
of the Premises or otherwise terminate this Lease; and in any proceeding under
the federal bankruptcy code, or under any similar statute affecting Tenant.
18.8 Waivers. Landlord and Tenant irrevocably waive all rights to trial
by jury in any action, proceeding, counterclaim or other litigation arising out
of or relating to this Lease, the relationship of Landlord and Tenant under this
Lease, the enforcement of this Lease, Tenant's use or occupancy of the Premises,
any claim of injury or damage arising between Landlord and Tenant, or any
actions of Landlord in connection with or relating to the enforcement of this
Lease. Tenant waives any right of redemption provided for by Law.
18.9 Accord and Satisfaction; Partial Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the amount required to be paid by
Tenant under this Lease shall be deemed to be other than a payment on account by
Tenant, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment of Rent be deemed an accord or satisfaction.
Landlord may accept any such check or payment without prejudice to Landlord's
right to recover the balance of such Rent or pursue any other remedy for
nonpayment, including termination of this Lease and commencement of a summary
dispossess proceeding. Notwithstanding any endorsement on any check or any
statement to the contrary in any letter accompanying any check or payment,
Landlord shall apply any partial payments of back Rent made by Tenant to the
oldest outstanding Rent under this Lease, except to the extent Landlord elects
otherwise in its sole and absolute discretion.
18.10 Cross-Default. Any default by Tenant under the Distribution
Agreement which remains uncured during the applicable grace period, shall be an
Event of Default under this Lease. In addition, any default under a Third Party
Lease which remains uncured during the applicable grace period shall be an Event
of Default under this Lease and any default under this Lease pertaining to a
single or to multiple Premises shall be an Event of Default pertaining to all
Premises.
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19 Termination.
Upon the Termination Date for any or all Premises, all improvements
(including UST's) constituting part of the Premises shall become Landlord's
property (subject to Permitted Exceptions), and Tenant shall deliver to
Landlord possession of the Premises, in good condition and state of repair free
of violations of Law and Environmental Laws, free of Hazardous Substances and
free of all Subleases and tenancies except as otherwise set forth in Paragraph
16.3. In addition, upon such termination Tenant shall assign to Landlord,
without recourse, all assignable licenses and permits affecting the Premises
and all assignable contracts, warranties and guarantees then in effect relating
to the Premises, together with all unpaid insurance awards and rights against
insurance carriers as to then-existing insurance claims relating to the
Premises. In addition, Tenant shall deliver to Landlord any unapplied building
insurance proceeds in Tenant's possession. Tenant's personal property and
equipment not removed from the Premises within 30 days after the Termination
Date shall be deemed abandoned. Tenant shall continue to completion after the
Termination Date any environmental remediations as required by Environmental
Law and shall continue to pay Rent (including Additional Rent) for any Premises
which are rendered substantially unusable because of the remediation
activities.
20 Notices.
All Notices shall be in writing and shall be addressed to Landlord and
Tenant as set forth below. Notices shall be (i) delivered personally to the
addresses set forth below, (ii) by Federal Express or other courier service to
the addresses set forth below, in which case they shall be deemed delivered on
the date of delivery (or when delivery has been attempted twice, as evidenced
by the written report of the courier service) to the address(es) set forth
below; or (iii) sent by certified mail, return receipt requested, in which case
they shall be deemed delivered three Business Days after deposit in the United
States mail, provided that no postal strike is then in effect. Either party
may change its address by giving
Notice in compliance with this Lease. Notice of such a change shall be
effective only upon receipt. The addresses of the parties are:
Landlord: 125 Jericho Turnpike, Jericho, New York 11753
Attention: Real Estate Manager
Tenant: 125 Jericho Turnpike, Jericho, New York 11753
Attention: President
21 No Broker.
Landlord and Tenant each represents and warrants to each other that it did
not engage any broker or finder in connection with this Lease and that no
person is entitled to any commission or finder's fee on account of any
agreements or arrangements made by such party with any broker or
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finder. Each party shall Indemnify the other party against any breach of the
foregoing representation by the Indemnitor.
22 Economic Abandonment.
If during the Term Tenant determines that a Service Station Premises has
become uneconomic or unsuitable for its own use and occupancy and Tenant has
discontinued use of the Service Station Premises or intends to discontinue use
of the Service Station Premises for a period of not less than one year from the
date of said determination, Tenant shall have the right to cease selling motor
fuels and sublease such Service Station Premises for any lawful use by giving
notice to Landlord of Tenant's intention so to sublease. Said notice shall be
delivered to Landlord at least sixty (60) days prior to the effective date of
such termination specified in said notice and shall be accompanied by a
certificate of an officer of Tenant to the effect that Tenant has determined
that the Service Station Premises has become uneconomic or unsuitable for its
then use and occupancy as a service station/convenience store and the Tenant
has discontinued or intends to discontinue use of the Service Station Premises
for a period of not less than one (1) year from the date of said determination.
Any such Sublease shall be subject to Paragraph 16.3 except that Landlord's
consent shall not be required. Prior to the commencement of such sublease term
Tenant shall remove the UST's and any contaminated soil, and thereafter Tenant
shall perform all requisite environmental investigations and/or remediations.
Tenant shall be limited to ten (10) economic abandonments (non-cumulative)
during any lease year during the Term. For Petroleum Terminal Premises and
the Premises subject to Third Party Leases, Tenant shall have no right of
economic abandonment under this Paragraph or otherwise.
23 Third Party Leases.
23.1 Subordination: Conflict. The rights of Tenant hereunder are at all
times subject to the terms and provisions of the Third Party Leases and Tenant
agrees to perform all of Landlord's obligations, as lessee, to be performed by
it under the Third Party Leases' initial terms and all renewal terms except
that Landlord shall remit the rent due to the Third Party Lessors. In the
event that there is any conflict between the terms and conditions of this Lease
and the terms and conditions of any Third Party Lease, the terms and conditions
of the Third Party Lease shall control. In the event that the Third Party
Lease is terminated for any reason, Tenant acknowledges and agrees that the
term of this Lease as applicable to the Third Party Lease Premises shall end 30
days prior to the termination of the Third Party Lease. Landlord disclaims any
warranties, express or implied, that it has the right pursuant to the Third
Party Lease to enter into this Lease.
23.2 Renewal Options. Landlord has the right to exercise all renewal
options under all Third Party Leases and Tenant has the right, but not the
obligation, to sublease any such Premises during any such Third Party Leases
renewal options. Tenant is not obligated to sublease any such Premises after
the first to occur of (i) the end of the term of the Third Party Lease in
effect on the date hereof, or (ii) January 31, 2012. In the event that Tenant
elects to
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continue to sublease such Premises beyond the end of the term of a Third Party
Lease, Tenant shall give Landlord notice of such election not less than 60 days
prior to the date that notice is due to Third Party Lessor and Landlord agrees
to give such notice to the Third Party Lessor pursuant to the terms of the Third
Party Lease.
23.3 Renewals. Landlord covenants and agrees that from time to time it
will use all commercially reasonable efforts to renew all Third Party Leases
which expire on or prior to the end of the Initial Term or applicable Renewal
Term (where such Third Party Leases do not contain Renewal Options) on terms and
conditions acceptable to both Landlord and Tenant. Tenant shall advise
Landlord not less than one (1) year prior to the expiration of a Third Party
Lease if Tenant does not desire to continue its tenancy at such Premises, in
which event Landlord will not renew the Third Party Lease for that Premises for
Tenant's use but may renew for Landlord's other purposes, including subleasing
to a third party. In the event that Tenant does not give Landlord the notice as
aforesaid. Tenant shall be deemed to have agreed to renew the Lease as to such
Premises on the terms and conditions negotiated by Landlord with the Third Party
Lessor. In the event that Tenant does give Landlord the notice as aforesaid,
the Lease as to such Premises shall expire and terminate at the end of the then
current term of the applicable Third Party Lease.
24 Waivers.
24.1 No Waiver by Silence. Failure of either party to complain of any
act or omission on the part of the other party shall not be deemed a waiver by
the noncomplaining party of any of its rights under this Lease. No waiver by
either party at any time, express or implied, of any breach of any provisions of
this Lease shall be a waiver of a breach of any other provision of this Lease or
a consent to any subsequent breach of the same or any other provision. No
acceptance by Landlord of any partial payment shall constitute an accord or
satisfaction but shall only be deemed a part payment on account.
24.2 No Landlord's Lien. Landlord confirms and acknowledges that
Landlord has no lien or security interest in any personal property of Tenant
located in, on or at the Premises, and that such personal property shall not
constitute security for payment of any Rent. If, at any time after the
Commencement Date, any statute or principle of law would grant Landlord any such
lien or security interest, then Landlord hereby waives the benefit of any such
statute and such lien. Landlord further agrees to execute such documentation,
in recordable form, as Tenant shall reasonably require to confirm the foregoing
waiver.
25 Further Assurances; Additional Deliveries.
25.1 Estoppel Certificates. At any time and from time to time, upon not
less than 10 Business Days' prior written request by either party to this Lease
(the "Requesting Party"), the other party to this Lease (the "Certifying
Party") shall execute, acknowledge and deliver to the Requesting Party (or
directly to a third party whose name and address are provided by the
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requesting party) up to four original counterparts of an Estoppel Certificate.
Any Estoppel Certificate may be relied upon by any third party to whom an
Estoppel Certificate is required to be directed.
25.2 Equipment Liens. If at any time or from time to time Tenant desires
to enter into or grant any Equipment Liens, then upon Tenant's request Landlord
shall enter into such customary documentation (with a detailed description) with
respect to the property leased or otherwise financed or encumbered pursuant to
such Equipment Liens as Tenant shall request, providing for matters such as the
following: (a) Landlord's waiver of the right to take possession of such
property upon occurrence of an Event of Default; and (b) customary agreements by
Landlord to enable the secured party to repossess such property without damage
to the Premises in the event of a default by Tenant permitting such secured
party to exercise remedies under its Equipment Lien. Any such Equipment Lien
shall be subordinate to this Lease. Notwithstanding the foregoing, Landlord
shall have no obligation to approve Equipment Liens for subtenants and Tenant
shall prevent its subtenants from creating any Equipment Liens.
25.3 Further Assurances. Each party agrees to execute and deliver such
further documents, and perform such further acts, as may be reasonably necessary
to achieve the intent of the parties with respect to Tenant's leasing of the
Premises from Landlord, as set forth in this Lease.
26 Miscellaneous.
26.1 Force Majeure. Each party's obligation to perform or observe any
term, condition, covenant or agreement on such party's part to be performed or
observed pursuant to this Lease (other than any obligation to pay money when
due) shall be suspended during such time as such performance or observance is
prevented or delayed by reason of any Unavoidable Delay.
26.2 Performance Under Protest. If a dispute arises regarding
performance of any obligation under this Lease, the party against which such
obligation is asserted shall have the right to perform it under protest, which
shall not be regarded as voluntary performance. A party that shall have
performed under protest shall have the right to institute appropriate
proceedings to recover any amount paid or the reasonable cost of otherwise
complying with any such obligation, together with interest at the Prime Rate on
funds expended.
26.3 Legal Costs, Generally. If either party prevails in any
litigation or other dispute relating to the enforcement or interpretation of
this Lease, then the losing party shall promptly after Notice (accompanied by
reasonable backup documentation), reimburse the prevailing party's Legal Costs
incurred in such litigation or other dispute.
26.4 Access. Landlord and its agents, representatives and designees
shall have the right to enter the Premises upon reasonable notice to Tenant
during regular business hours, and in accordance with Tenant's reasonable
instructions, for the purpose of complying with Landlord's
31
<PAGE> 38
specific obligations pursuant to this Lease and for the purpose of curing
Tenant's defaults of which Landlord shall have given Tenant prior Notice or to
exhibit the Premises in connection with the mortgaging or sale of the Fee Estate
in compliance with this Lease. In entering the Premises pursuant to this
paragraph, Landlord and its designees shall use reasonable efforts not to
interfere with the conduct of operations on the Premises by Tenant or anyone
claiming through Tenant, and shall comply with Tenant's reasonable instructions.
Landlord shall Indemnify Tenant against any claims arising from Landlord's entry
upon the Premises pursuant to this paragraph or any other provision of this
Lease permitting Landlord to enter the Premises (except upon termination of this
Lease).
26.5 Vault Space. Any vaults and other areas now existing or subsequently
built extending beyond the building line of the Premises are not included within
the Premises, but Tenant may occupy and use the same during the Term, subject to
applicable Laws and payment of all applicable Impositions. No revocation by any
Government of any license or permit to maintain and use any such vaults shall in
any way affect this Lease or the Rent due and owing hereunder.
26.6 No Third Party Beneficiaries. Nothing in this Lease shall be deemed
to confer upon any person (other than Landlord, Tenant, Third Party Lessors or
Fee Mortgagees) any right to insist upon, or to enforce against Landlord or
Tenant, the performance or observance by either party of its obligations under
this Lease.
26.7 Amendment. Any modification or amendment to this Lease must be in
writing signed by Landlord and Tenant.
26.8 Partial Invalidity. If any term or provision of this Lease or the
application of such term or provision to any party or circumstance shall to any
extent be invalid or unenforceable, then the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected by such
invalidity. All remaining provisions of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
26.9 Successors and Assigns. This Lease shall bind and benefit Landlord
and Tenant and their successors and assigns, but this shall not limit or
supersede any transfer restrictions contained in this Lease.
27 Interpretation; Execution and Application of Lease.
27.1 Governing Law. This Lease and its interpretation and performance
shall be governed, construed and regulated by the laws of the State of New York,
without regard to principles of conflict of laws.
27.2 Counterparts. This Lease may be executed in counterparts.
32
<PAGE> 39
27.3 Reasonableness. Wherever this Lease states that approval by either
party shall not be unreasonably withheld: (a) such approval shall not be
unreasonably delayed or conditioned; and (b) no withholding of approval shall be
deemed reasonable unless withheld by Notice specifying reasonable grounds, in
reasonable detail, for such withholding of approval, and indicating specific
reasonable changes in the proposal under consideration that would cause such
proposal to be acceptable.
27.4 Interpretation. No inference in favor of or against any party shall
be drawn from the fact that such party has drafted any portion of this Lease.
The parties have both participated substantially in the negotiation, drafting
and revision of this Lease with representation by counsel and such other
advisers as they have deemed appropriate. The words "include" and "including"
shall be construed to be followed by the words: "without limitation."
27.5 Delivery of Drafts. Neither Landlord nor Tenant shall be bound by
this Lease unless and until each party shall have executed at least one
counterpart of this Lease and delivered such executed counterpart to the other
party. The submission of draft(s) of this Lease or comment(s) on such drafts
shall not bind either party in any way and such draft(s) and comment(s) shall
not be considered in interpreting this Lease.
27.6 Captions. The captions of this Lease are for convenience and
reference only and in no way affect this Lease.
27.7 Entire Agreement. This Lease contains all the terms, covenants and
conditions relating to Tenant's leasing of the Premises. There are no separate
understandings or agreements, oral or written, between Landlord and Tenant
relating to the Premises or Tenant's use or occupancy of the Premises, except
for the Distribution Agreement.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease on the day
and year first above written.
LANDLORD
GETTY REALTY CORP.
By: ________________
Leo Liebowitz
Its: President
33
,
34
<PAGE> 40
LEEMILT'S PETROLEUM, INC., as holder of the Fee Estate to some of the Premises
hereby consents to this Lease.
LEEMILT'S PETROLEUM, INC.
By: ____________________________
GETTYMART INC., as lessee of a Third Party Lease to some of the Premises,
hereby consents to this Lease.
GETTYMART INC.
By: ____________________________
GETTY TERMINALS CORP., as lessee of a Third Party Lease to some of the
Premises, hereby consents to this Lease.
GETTY TERMINALS CORP.
By: ____________________________
DONNA OIL CORP., as lessee of a Third Party Lease to some of the Premises,
hereby consents to this Lease.
DONNA OIL CORP.
By: __________________________
34
<PAGE> 41
TENANT
GETTY PETROLEUM
MARKETING INC.
By: _________________
Its: President
KINGSTON OIL SUPPLY CORP., with respect to certain premises located in the
Mid-Hudson Valley as set forth on Exhibit B hereto.
KINGSTON OIL SUPPLY CORP.
By:_____________________________
35
<PAGE> 42
EXHIBIT A
LEGAL DESCRIPTION
[WILL BE SUPPLIED UPON REQUEST]
<PAGE> 43
GETTY PETROLEUM CORP. Real Estate Department
EXHIBIT B
THIRD PARTY LEASE LOCATIONS
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
16 98-21 ROCKAWAY BLVD OZONE PARK NY 11417
54 172 HOWELLS RD BAYSHORE NY 11706
58 4101 HEMPSTEAD TPKE BETHPAGE NY 11714
74 43 LAKE STREET WHITE PLAINS NY 10600
75 481 MAMARONECK AVE WHITE PLAINS NY 10600
77 758 PELHAM RD NEW ROCHELLE NY 10805
78 1800 CENTRAL AVE YONKERS NY 10700
79 25 HARTSDALE AVE HARTSDALE NY 10530
81 410 FIFTH AVE. NEW ROCHELLE NY 10800
91 40 N. STONE AVE ELMSFORD NY 10523
102 2311 CROMPOUND ROAD PEEKSKILL NY 10566
103 200 WESTCHESTER AVE PORT CHESTER NY 10573
104 2385 BOSTON RD. LARCHMONT NY 10538
111 245 EAST 138 STREET BRONX NY 10454
114 2453 WESTCHESTER AVE BRONX NY 10461
115 3400-08 BAYCHESTER AVE BRONX NY 10475
116 128 EAST MAIN ST ELMSFORD NY 10523
117 946 BOSTON POST RD. MAMARONECK NY 10543
121 1115 YONKERS AVE YONKERS NY 10704
122 481 CENTRAL AVE YONKERS NY 10704
126 4302 FT HAMILTON PWY BROOKLYN NY 11219
128 2504 HARWAY AVE BROOKLYN NY 11214
138 159 BRONX RIVER ROAD YONKERS NY 10700
152 3337 BOSTON RD BRONX NY 10469
177 443 RT. 9W HIGHLAND NY 12528
181 161-15 CROSS BAY BLVD HOWARD BEACH NY 11414
200 13 CLARKE AVE STATEN ISLAND NY 10306
235 1820 RICHMOND ROAD STATEN ISLAND NY 10306
240 146-93 GUY BREWER BLVD SPRINGFIELD GARDENS NY 11434 1
249 524 CONEY ISLAND AVE BROOKLYN NY 11218
254 1700 GEORGES RD. RT 130 NORTH BRUNSWICK NJ 08902
271 3501 BOSTON RD BRONX NY 10456
319 120 MOFFATT ROAD MAHWAH NJ 07430
323 3083 WEBSTER AVE BRONX NY 10467
350 69 PASCACK ROAD SPRING VALLEY NY 10977
353 163-10 PIDGEON MEADOW ROAD FLUSHING NY 11358
354 RT 25 & RAYNOR RD RIDGE NY 11961
355 HOWELLS RD & UDALL RD WEST ISLIP NY 11795
357 450 WYANDANCH AVE N. BABYLON NY 11703
358 185 EAST LINCOLN AVE PELHAM NY 10803
361 101-06 ASTORIA BLVD. ASTORIA NY 11369
362 1212 VICTORY BLVD STATEN ISLAND NY 10301
363 350 ROCKAWAY TPKE CEDARHURST NY 11516
365 1324 EAST PUTNAM AVE OLD GREENWICH CT 06870
366 440 HAWKINS AVE LAKE RONKONKOMA NY 11779
396 1842 VICTORY BLVD STATEN ISLAND NY 10314
443 219 NORTH MAIN STREET SAYVILLE NY 11782
523 1741 RT 37 W TOMS RIVER NY 08753
544 190 AQUEDUCT ROAD WHITE PLAINS NY 10606
545 SIMMONS PLAZA RT 9W SAUGERTIES NY 12477
546 56-02 BROADWAY WOODSIDE NY 11377
547 89-15 ROCKAWAY BLVD OZONE PARK NY 11417
</TABLE>
<PAGE> 44
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASE LOCATIONS
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
548 395 NO.NEWBRIDGE ROAD HICKSVILLE NY 11801
549 1220 EAST 233RD STREET BRONX NY 10466
550 176 MCGUINESS BLVD. BROOKLYN NY 11222
561 387 RICHMOND AVE STATEN ISLAND NY 10302
570 69 BANK STREET WHITE PLAINS NY 10606
571 660 N.BROADWAY, RTE. 22 N. WHITE PLAINS NY 10600
572 476 COMMERCE & RTE 141 HAWTHORNE NY 10532
573 1 PLEASANTVILLE ROAD PLEASANTVILLE NY 10570
574 ROUTE 22 PATTERSON NY 12563
576 313 TUCKAHOE ROAD YONKERS NY 10700
577 719 BRONX RIVER RD YONKERS NY 10700
578 1 BOSTON POST RD RYE NY 10580
579 185 NORTH HIGHLAND AVE OSSINING NY 10562
580 30 MAIN STREET BRANFORD CT 06405
583 RTES. 44A&I-31 COVENTRY CT 06238
595 222 DANBURY RD NEW MILFORD CT 06776
596 195 STATE STREET NORTH HAVEN CT 06473
611 ROUTE 32 WATERFORD CT 06385
613 1830 E. STATE STREET WESTPORT CT 06880
615 1649 LITCHFIELD TURNPIKE WOODBRIDGE CT 06525
617 18 SPRINGFIELD STREET AGAWAM MA 01001
619 824 SUFFIELD ST. & SILVER AGAWAM MA 01001
631 3133 PARK AVE & THORNDYKE PALMER MA 01069
652 R.D.#1 ROUTE 130 BEVERLY NJ 08010
654 669 SOMERSET STREET SOMERSET NJ 08873
655 4431 ROUTE 9 FREEHOLD NJ 07728
659 RTE 440 & DANFORTH AVE JERSEY CITY NJ 07303
661 100 WHITE HORSE PIKE LAWNSIDE NJ 08045 2
664 953 18TH AVE NEWARK NJ 07106
665 1292 RT 22 EAST N. PLAINFIELD NJ 07060
667 639 RTE 17 SOUTH PARAMUS NJ 07652
671 410 RT 22 WEST UNION NJ 07083
673 6718 BLACK HORSE PIKE PLEASANTVILLE NJ 08232
679 154 SOUTH MAIN STREET TORRINGTON CT 06790
681 1258 MIDDLE COUNTRY RD SELDEN NY 11784
685 2 ASHFORD AVE. DOBBS FERRY NY 10522
687 47 WOLCOTT RD. WOLCOTT CT 06716
688 301 EAST & WHITING STS PLAINVILLE CT 06062
703 530 FRANKLIN AVE FRANKLIN SQUARE NY 11010
704 4030 MERRICK ROAD SEAFORD NY 11783
751 630 LINCOLN HWY RT 1 FAIRLESS HILLS PA 19030
752 1201 IVY HILL RD PHILADELPHIA PA 19150
6766 3050 WHITNEY AVE HAMDEN CT 06514
6771 1046 BOSTON POST ROAD GUILFORD CT 06437
6772 147 POST ROAD COS COB CT 06807
6774 419 WASHINGTON AVE NORTH HAVEN CT 06473
6811 774 FARMINGTON AVE BRISTOL CT 06010
6817 1294 E. MAIN ST. TORRINGTON CT 06790
6819 206 MAIN AVE. NORWALK CT 06851
6824 250 HOPE STREET STAMFORD CT 06906
6850 210 SOUTH STREET W. HARTFORD CT 06110
6851 241 WHITE STREET DANBURY CT 06810
</TABLE>
<PAGE> 45
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6853 126 SOUTH ROAD ENFIELD CT 06082
6856 1707 STANLEY STREET NEW BRITAIN CT 06053
6864 1022 BURNSIDE AVENUE EAST HARTFORD CT 06108
6865 749 MAIN STREET WATERTOWN CT 06795
6870 1500 CORBIN AVENUE NEW BRITAIN CT 06053
6871 441 WEST AVON ROAD AVON CT 06001
6872 339 OLD HARTFORD ROAD COLCHESTER CT 06415
8605 129 NORTH DUPONT HIGHWAY NEW CASTLE DE 19720
8635 BASIN ROAD & FRENCHTOWN NEW CASTLE DE 19720
28200 990 LISBON STREET LEWISTON ME 04240
28227 393 WESTERN AVENUE AUGUSTA ME 04330
28230 53 BROAD STREET AUBURN ME 04210
28231 210 CIVIC CENTER DRIVE AUGUSTA ME 04332
29812 409 W BEL AIR AVE (GETTY) ABERDEEN MD 21001
30161 61 MAIN STREET MILFORD MA 01757
30361 191 TALBOT AVE DORCHESTER MA 02124
30439 286 BROADWAY TAUNTON MA 02780
30471 626 CHANDLER ST. WORCESTER MA 01602
30515 331 BENNINGTON ST BOSTON MA 02128
30518 299 MAIN ST. GROVELAND MA 01830
30537 1258 WILBUR AVE SOMERSET MA 02725
30557 63 BROADWAY TAUNTON MA 02780
30562 1 OAK HILL ROAD WESTFORD MA 01886
30601 701 COCHITUATE ROAD FRAMINGHAM MA 01701
30644 1158 WASHINGTON STREET CANTON MA 02021
30646 825 WASHINGTON STREET STOUGHTON MA 02072
30647 151 MAIN STREET MEDFORD MA 02115 3
30648 321 ADAMS STREET DORCHESTER MA 02121
30649 452 CANTON STREET STOUGHTON MA 02072
30651 487 PARK AVE WORCESTER MA 01610
30652 860 SOUTHBRIDGE ST. AUBURN MA 01501
30653 2 SUMMER ST & JAMES ST BARRE MA 01005
30654 390 BELMONT STREET WORCESTER MA 01604
30655 548 MAIN STREET BROCKTON MA 02401
30656 54 CANAL STREET MILLBURY MA 01527
30657 1177 NO. MAIN STREET CLINTON MA 01510
30658 974 SOUTHBRIDGE STREET WORCESTER MA 01610
30660 10 WEST MAIN STREET DUDLEY MA 01570
30661 880 WATER STREET FITCHBURG MA 01420
30662 71 EAST CENTRAL STREET FRANKLIN MA 02038
30663 77 HIGHLAND STREET WORCESTER MA 01605
30664 199 FALMOUTH ROAD HYANNIS MA 02601
30665 288 CENTRAL STREET LEOMINSTER MA 01453
30666 248 LINCOLN STREET WORCESTER MA 01605
30668 544 MILLBURY STREET WORCESTER MA 01607
30669 48 WEST MAIN STREET NORTHBOROUGH MA 01532
30670 373 BARLOWS LANDING ROAD POCASSET MA 02559
30671 676 MAIN STREET CLINTON MA 01510
30672 21 WEST BOYLSTON STREET WEST BOYLSTON MA 01583
30673 1429 GRAFTON STREET WORCESTER MA 01604
30674 176 WORCESTER RD. SOUTHBRIDGE MA 01550
30675 959 SOUTHBRIDGE STREET WORCESTER MA 01610
</TABLE>
<PAGE> 46
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
30676 1308 STATE HWY (RTE. 28) S. YARMOUTH MA 02664
30677 WORCESTER ROAD STERLING MA 01564
30678 SINGLETARY AVENUE SUTTON MA 01590
30679 1107 PLEASANT STREET WORCESTER MA 01602
30680 516 UNION AVENUE FRAMINGHAM MA 01701
30681 RT.140,MAIN ST. & HARTFORD PK UPTON MA 01568
30682 377 MAIN STREET WAREHAM MA 02571
30683 11 MILK STREET WESTBOROUGH MA 01581
30684 570 MAIN STREET HARWICHPORT MA 02646
30685 30 CHANDLER STREET WORCESTER MA 01609
30686 193 SOUTHWEST CUTOFF WORCESTER MA 01604
30687 942 SOUTH STREET FITCHBURG MA 01420
30688 702 WEST BOYLSTON STREET WORCESTER MA 01606
30689 200 MAIN STREET CHERRY VALLEY MA 01611
30690 112 WAVERLY STREET (RT 135) FRAMINGHAM MA 01701
30691 90 WORCESTER STREET N. GRAFTON MA 01536
30692 333 EAST MAIN STREET SOUTHBRIDGE MA 01550
30693 109 SOUTH MAIN STREET OXFORD MA 01540
30694 54 STAFFORD STREET WORCESTER MA 01603
30695 223 MAIN STREET ATHOL MA 01331
30696 267 MECHANIC STREET FITCHBURG MA 01420
30697 1264 GRAFTON STREET WORCESTER MA 01604
30698 8 WEST MAIN STREET ORANGE MA 01364 4
30699 45 BALLARD STREET WORCESTER MA 01607
30700 1660 WORCESTER ROAD FRAMINGHAM MA 01772
30701 299 MAPLE STREET MARLBOROUGH MA 01752
30702 CAPE ROAD (RT. 140) & WATER ST MILFORD MA 01757
30709 294 BELMONT STREET WORCESTER MA 01604
30710 350 GREENWOOD STREET WORCESTER MA 01607
30711 321 SOUTHBRIDGE STREET AUBURN MA 01501
30712 156 CRESCENT STREET WALTHAM MA 02154
30713 274 HIGH STREET LOWELL MA 01852
30714 365 LAFAYETTE ROAD SALISBURY MA 01960
30715 ROUTE 125 & SALEM STREET ANDOVER MA 01810
30716 308 THACHER STREET ATTLEBORO MA 02703
55252 LAFAYETTE & NEW ZEALAND SEABROOK NH 03874
55269 330 SOUTH MAIN STREET PENACOOK NH 03303
55274 32 BRIDGE STREET PELHAM NH 03076
56011 ACKERMAN AND RANDOLPH CLIFTON NJ 07011
56015 1508 NORTH KINGS HIGHWAY CHERRY HILL NJ 08002
56039 278 BLOOMFIELD AVENUE NUTLEY NJ 07110
56046 RTE 166 PRESIDENTIAL ROAD TOMS RIVER NJ 08753
56047 661 BLOOMFIELD AVE NUTLEY NJ 07110
56049 SPRINGFIELD & PLAINFIELD BERKELEY HGTS NJ 07922
56055 738 CEDAR LANE TEANECK NJ 07666
56057 RT. 35 & SUNSET AVE. OCEAN TOWNSHIP NJ 07712
56079 1061 BROADWAY (53RD ST.) BAYONNE NJ 07002
56084 8 STONEHOUSE ROAD BASKING RIDGE NJ 07920
56093 713 PLAINFIELD AVENUE BERKELEY HGTS NJ 07922
56096 SPRINGSIDE & WOODLANE RDS. WESTAMPTON TWP NJ 08060
56102 MAIN & UNION STREETS LODI NJ 07644
56108 BENNETT & KEARNY AVENUE KEARNY NJ 07032
</TABLE>
<PAGE> 47
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
56112 745 CONVERY BLVD PERTH AMBOY NJ 08861
56116 VALLEY ROAD & FENNER CLIFTON NJ 07011
56136 45 RIDGE ROAD (5TH AVENUE) LYNDHURST NJ 07071
56138 104 SOUTH AVE. (3RD AVE.) FANWOOD NJ 07023
56145 4413 U. S. HIGHWAY 9 FREEHOLD NJ 07728
56149 91 BRICK BLVD. BRICK TWP NJ 08723
56161 449 ROUTE 46 EAST LITTLE FERRY NJ 07643
56169 128 CHESTNUT RIDGE RD & LAKE MONTVALE NJ 07645
56195 345 ROUTE 22 E. GREENBROOK NJ 08812
56251 1371 ROUTE 202 NORTH NESHANIC STATION NJ 08853
56254 2222 PARK AVE S. PLAINFIELD NJ 07080
56255 2501 BRIDGE AVE. PT. PLEASANT NJ 08742
56271 RT 516 & HIGGINS ROAD MATAWAN NJ 07747
56275 1942 LINCOLN HWY EDISON NJ 08817
56276 1490 BERGEN BOULEVARD FORT LEE NJ 07024
56280 320 OLD HOOK RD AND CARVER AVE. WESTWOOD NJ 07675
56288 PO BOX 360 SWEDESBORO NJ 08085
56809 762 ST GEORGES AVE RAHWAY NJ 07065
56815 2 W. ST. GEORGE AVE LINDEN NJ 07036
56821 252 IRVINGTON AVE. SOUTH ORANGE NJ 07079
56848 85 DODD STREET EAST ORANGE NJ 07017
56852 134 NJ RT. #4 (EAST BOUND) ENGLEWOOD NJ 07631
56853 225 DIAMOND BRIDGE AVENUE HAWTHORNE NJ 07506
56862 RARITAN RD.& CENTRAL CLARK NJ 07066
56867 MAIN ST & STATION RD MADISON NJ 07940
56868 526 ALLWOOD ROAD (BLOOMFI CLIFTON NJ 07012
56871 450 NEW YORK AVE JERSEY CITY NJ 07307
56872 39 CENTRAL AVE. JERSEY CITY NJ 07306
56881 U.S. RT #46 (MILL) ELMWOOD PARK NJ 07407
56882 58 GREENBROOK RD.(GROVE S N. PLAINFIELD NJ 07060
56909 RIVER RD. & MADISON NEW MILFORD NJ 07646
56924 MIDLAND & OUTWATER GARFIELD NJ 07026
58014 5510 BROADWAY BRONX NY 10463
58015 8202 7TH AVENUE BROOKLYN NY 11228
58019 286 ASHBURTON AVE YONKERS NY 10701
58024 80 HORACE HARDING BLVD. GREAT NECK NY 11020
58025 1169 KNOLLWOOD ROAD WHITE PLAINS NY 10603 5
58034 601 PORT WASHINGTON BLVD PT. WASHINGTON NY 11050
58041 635 OLD COUNTRY ROAD WESTBURY NY 11590
58042 308 COLUMBUS AVE TUCKAHOE NY 10707
58043 950 FRONT ST. (GREENGROVE UNIONDALE NY 11553
58044 SUNRISE HIGHWAY & HARRISON BALDWIN NY 11510
58053 9616 FLATLANDS AVE. BROOKLYN NY 11236
58054 490 PULASKI ROAD GREENLAWN NY 11740
58064 1880 FRONT STREET EAST MEADOW NY 11554
58069 510 SCRANTON AVE LYNBROOK NY 11563
58072 ROUTES 9 AND 9G RHINEBECK NY 12572
58073 60-41 METROPOLITAN AVE. RIDGEWOOD NY 11227
58081 65 EAST PULASKI RD HUNTINGTON STATION NY 11746
58092 657 SAWMILL RIVER RD ARDSLEY NY 10502
58101 774 TUCKAHOE RD. YONKERS NY 10710
58121 67 QUAKER RIDGE RD. NEW ROCHELLE NY 10804
</TABLE>
<PAGE> 48
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
58146 11 FLANDERS RD. RIVERHEAD NY 11901
58181 734 PARK AVENUE HUNTINGTON NY 11743
58205 63 8TH AVE. NEW YORK NY 10014
58263 280 E. MAIN ST MT. KISCO NY 10549
58297 RD #1 BOX 179 SALT POINT NY 12578
58409 119 WEST 145TH ST NEW YORK NY 10039
58411 1 MERRICK AVE. EAST MEADOW NY 11554
58471 675 CENTRAL AVE. CEDARHURST NY 11516
58514 4116 BROADWAY (174TH ST.) NEW YORK NY 10033
58526 118-01 ROCKAWAY BLVD OZONE PARK NY 11420
58542 152 10TH AVE. NEW YORK NY 10011
58547 34-02 31ST ST. ASTORIA NY 11102
58548 RT 6 & LEXINGTON AV MOHEGAN LAKE NY 10547
58553 5931 AMBOY ROAD (BETHUNE) STATEN ISLAND NY 10309
58557 76-19 21ST AVE. E. ELMHURST NY 11370
58563 MERRICK ROAD & WYNSUM AVE MERRICK NY 11566
58567 456 ROUTE 146 GUILDERLAND CENTER NY 12085
58568 360 CENTRAL AVE. (CLAREND VALLEY STREAM NY 11580
58572 255 LAKE AVE. ST. JAMES NY 11780
58573 3287 MERRICK RD WANTAGH NY 11793
58574 241 TERRY ROAD SMITHTOWN NY 11787
58583 1331 NORTH GRAND AVENUE BALDWIN NY 11510
58584 607 EAST NEW YORK AVENUE BROOKLYN NY 11230
58585 73-01 BEACH CHANNEL ARVERNE NY 11692 6
58587 61-01 WOODHAVEN BLVD. REGO PARK NY 11374
58592 242 DYCKMAN STREET NEW YORK NY 10034
58599 1386 WANTAGH AVENUE WANTAGH NY 11793
58602 540 PLANDOME RD. MANHASSET NY 11030
58603 1784 BROADWAY HEWLETT NY 11557
58605 78-01 LINDEN BLVD. HOWARD BEACH NY 11414
58616 1895 BRUCKNER BOULEVARD BRONX NY 10472
58703 1372 UNION ST & BRANDYWINE AVE SCHENECTADY NY 12363
58730 RT. 44, DUTCHESS TPKE. PLEASANT VALLEY NY 12569
58744 ROUTE 146 MECHANICVILLE NY 12118
58746 247 PINE HOLLOW RD OYSTER BAY NY 11771
58750 60 N CENTRAL AVE MECHANICVILLE NY 12118
58752 125 JERICHO TPKE JERICHO NY 11753
58753 784 ULSTER AVE MALL KINGSTON NY 12401
58754 320 COLUMBIA ST RENSSELAER NY 12144
58755 272-276 EAST STRAND KINGSTON NY
58756 224-270 EAST STRAND KINGSTON NY
58758 181-207 EAST STRAND KINGSTON NY
58759 RT 9 RHINEBECK NY
58760 N. BROADWAY PORT EWEN NY 12466
58761 LOWER MAIN STREET; PO BOX 351 CATSKILL NY
58762 RT 23 & 385 CATSKILL NY 12414
58763 1 AMOS POST RD. CATSKILL NY 12414
58764 RT 9W & W. BRIDGE STREET CATSKILL NY 12414
58766 124 FAIRVIEW AVE HUDSON NY 12534
58767 124 FAIRVIEW AVE HUDSON NY 12534
58768 RT 32 AND 212 SAUGERTIES NY 12477
58769 RT 32 FREEHOLD NY 12431
</TABLE>
<PAGE> 49
GETTY PETROLEUM CORP. Real Estate Department
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
58770 115 MANSION STREET COXSACKIE NY 12051
58771 RTS 32 & 81 GREENVILLE NY 12083
58772 RT 32 QUARRYVILLE SAUGERTIES NY 12477
58774 165 RT 59 MONSEY NY 10952
58776 1146 ULSTER AVENUE KINGSTON NY 12401
58780 1208 WASHINGTON AVE RENSSELAER NY 12144
58786 RT 22 HOUSICK FALLS NY 12090
58790 330 RT 304 N BARDONIA NY 10954
58796 RTE 123 SMITH RIDGE ROAD S. SALEM NY 10590
58797 RT 23 LEEDS NY 12451
58798 252 INNIS AVENUE POUGHKEEPSIE NY 12603
58802 111 MAIN STREET PINE BUSH NY 12566
58804 CHURCH STREET COPAKE NY 12516
58806 RT 9 & ST. JOHN STREET RED HOOK NY 12571
58808 RT 82 WEST TAGHKANIC NY 12534
58812 RT 9W & RT 143 RAVENA NY 12143
58813 BAILEY ST. W. COXSACKIE NY
58817 449 MAIN STREET YAPHANK NY 11980
58818 311 LARKFIELD ROAD EAST NORTHPORT NY 11731 7
58822 ROUTE 22 - HARDSCRABBLE ROAD CROTON FALLS NY 10519
58826 7101 ROUTE 212 SAUGERTIES NY 12477
67101 62 BLUE VALLEY ROAD BANGOR PA 18013
67416 3796 OXFORD VALLEY RD LEVITTOWN PA 19057
67418 2391 DURHAM RD. (NEWPORTVI LANGHORNE PA 19047
67432 ROUTE #309 & FAIRMOUNT ST. COOPERSBURG PA 18036
67434 778 2ND STREET PIKE RICHBORO PA 18954
67435 192 DURHAM RD. PENNDEL PA 19047
67597 6142 RISING SUN AVE. PHILADELPHIA PA 19111
67601 2711 LIMEKILN PIKE NORTH HILLS PA 19038
67602 RT 3 & BISHOP HOLLOW RD NEWTOWN SQUARE PA 19073
67603 2324 N GEORGE ST (GETTY) YORK PA 17402
67604 827 HANOVER AVENUE ALLENTOWN PA 18103
67607 7002 WOODLAND AVENUE PHILADELPHIA PA 19142
67610 5302-04 RISING SUN AVENUE PHILADELPHIA PA 19120
67611 550 SOUTH MAIN STREET SHREWSBURY PA 17361
67615 900 E. HUNTING PARK AVENUE PHILADELPHIA PA 19124
67616 2242 BRIDGE STREET PHILADELPHIA PA 19137
67617 3650 WILLIAM PENN HWY (GETTY) PALMER TOWNSHIP PA 18043
67647 918 YORK STREET (GETTY) HANOVER PA 17331
67649 HANOVER & S. MAIN STREET-GETTY BIGLERVILLE PA 17307
67655 601 U.S. ROUTE 15 NORTH DILLSBURG PA 17019
67660 133 WAYNE STREET READING PA 19607
68005 1188 CUMBERLAND HILL ROAD WOONSOCKET RI 02895
68007 1271 BROAD STREET PROVIDENCE RI 02905
68008 585 TIOGUE AVE. COVENTRY RI 02816
68642 3381 E. MAIN RD. PORTSMOUTH RI 02871
68644 1837 MAIN ROAD (RT.#77) TIVERTON RI 02878
69404 RTE 23-332 BLUE BALL PA 17506
69405 105N 8TH STREET READING PA 19601
69406 634-646 N FRONT STREET ALLENTOWN PA 18102
69409 13TH & NORTHAMPTON STREETS EASTON PA 18042
69415 505 BROADWAY BETHLEHEM PA 18015
</TABLE>
<PAGE> 50
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
69421 473 N. GEORGE STREET MILLERSVILLE PA 17551
69422 191 N. MAIN STREET MANHEIM PA 17545
69428 NEWPORT ROAD INTERCOURSE PA 17534
69430 RTE 897 REINHOLDS PA 17569
69431 832 E. PHILADELPHIA STREET BOYERTOWN PA 19512
69436 761 GAP NEWPORT PIKE WEST GROVE PA 19390
69438 1370 LANCASTER AVE COLUMBIA PA 17512
69440 1001 BUCHERT ROAD POTTSTOWN PA 19464
69441 451 E. PHILADELPHIA STREET YORK PA 17403
69443 644 EAST MAIN STREET EPHRATA PA 17522
69444 1000 CHESTNUT STREET READING PA 19602
69445 2 WEST PENN STREET ROBESONIA PA 19561
69447 629 WEST ORANGE STREET LANCASTER PA 17602
69449 1105 HANOVER AVENUE YORK PA 17404
69472 327 WEST MAIN STREET LEOLA PA 17540
69479 1704 NEW HOLLAND AVENUE LANCASTER PA 17601
69484 W. GREENWICH & SCHYLKILL READING PA 19601
69486 1701 WHITEFORD ROAD YORK PA 17402
69493 834 YORK STREET HANOVER PA 17331
69495 7710 ALLENTOWN BLVD HARRISBURG PA 17122
69497 RT 272 POPLAR STREET ADAMSTOWN PA 19501
69501 1125 ROOSEVELT AVENUE YORK PA 17404
69507 1201 LITITZ PIKE LANCASTER PA 17601
69684 20 HADE ROAD ST. THOMAS PA 17252
69685 1070 TRINDLE ROAD CARLISLE PA 17013
69688 45 E. HANOVER ST BONNEAUVILLE PA 17325
69690 ROUTE 16 MCCONNELLSBURG PA 17233
71002 ROUTE 1 BOX 1960 ROCKY MOUNT VA 24034
71004 1704 SO. MAIN STREET BLACKSBURG VA 24060
71009 HIGHWAY 24 EAST VINTON VA 24016
71010 2702 COLONIAL AVE ROANOKE VA 24015
71011 ROUTE 3 BOX 702 RIDGEWAY VA 24148
71028 RT. 1 BOX 1070, APPALACHIAN DR. FIELDALE VA 24089 8
71030 1506 MEMORIAL BLVD. MARTINSVILLE VA 24112
71031 1219 JAMISON AVENUE,SE ROANOKE VA 24013
71032 2214 ELECTRIC RD., SW ROANOKE VA 24018
71033 3842 SHENANDOAH AVE. ROANOKE VA 24017
71054 1724 WESTOVER DRIVE RICH CREEK VA 24147
71055 WESTOVER DR.& SCHUMATE ST. DANVILLE VA 24541
71090 3058 SALEM TURNPIKE,NW ROANOKE VA 24014
71103 1202 SOUTH JEFFERSON ST ROANOKE VA 24016
71108 931 GUS NICKS BLVD. ROANOKE VA 24013
71109 1115 MAIN STREET ROANOKE VA 24015
71110 THOMPSON MEMERIAL BLVD. & CLAY SALEM VA 24153
71112 ROUTE 57, RURAL RT.3 STANLEYTOWN VA 24168
71113 RT 2 BOX 1 MARTINSVILLE VA 24112
71120 3542 ORANGE AVENUE, NE ROANOKE VA 24012
71173 7000 THREE CHOPT RD RICHMOND VA 23226
71177 RT 1, BOX 202 DALEVILLE VA 24083
71178 340 EAST VALLEY DR. BRISTOL VA 24201
71193 13625 GENITO RD.(BRANDERMILL) MIDLOTHIAN VA 23113
71204 1167 WOODHAVEN DRIVE RICHMOND VA 23224
</TABLE>
<PAGE> 51
THIRD PARTY LEASES
<TABLE>
<CAPTION>
Location Zip
Number Address Town STATE Code
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
71212 3901 GRAHAM PARK ROAD TRIANGLE VA 22026
71213 RT. 10, BOX 42 MARTINSVILLE VA 24112
71215 1148 VOLVO PARKWAY CHESAPEAKE VA 23320
71216 1901 S. INDEPENDENCE BLVD VIRGINIA BEACH VA 23456
71218 401 GREEN MEADOWS DRIVE VIRGINIA BEACH VA 23462
71220 120 W. MERCURY BLVD. HAMPTON VA 23669
71222 4100 GEORGE WASHINGTON HWY. PORTSMOUTH VA 23702
71225 1196 INDIAN LAKES BLVD. VIRGINIA BEACH VA 23464
71250 12836 JEFFERSON AVE. NEWPORT NEWS VA 23602
71251 1099 INDEPENDENCE BLVD. VIRGINIA BEACH VA 23455
71252 5636 PRINCESS ANNE RD. VIRGINIA BEACH VA 23462
71255 3001 SALINA DRIVE VIRGINIA BEACH VA 23452
71257 801 SOUTH LYNNHAVEN RD. VIRGINIA BEACH VA 23452 9
71262 1306 NORTH KING ST. HAMPTON VA 23669
71264 209 E. HOLLY AVENUE STERLING PARK VA 22170
71288 ROUTE 4, BOX 569 CHRISTIANBERG VA 24073
71293 601 NEWTOWN RD. VIRGINIA BEACH VA 23462
71294 99 MANASSAS DRIVE MANASSAS PARK VA 22111
71704 5420 PETERS CREEK RD. ROANOKE VA 24019
432 LEASED LOCATIONS
</TABLE>
<PAGE> 52
EXHIBIT C
Permitted Exceptions
Fleet Bank Mortgages, Crossland Mortgages and numerous purchase money mortgages
Any new mortgages which are entered into on an arms-length basis the principal
amount of which does not exceed the fair market value of the property mortgaged
Utility Easements
1
<PAGE> 53
EXHIBIT D
PREMISES WITH NON-COMPLYING UST'S
INVESTMENT-CAPITAL
LOCATION
- ---------------------------------------
# CITY STATE
- ---------------------------------------
6 BROOKLYN NY
7 JAMAICA NY
8 REGO PARK NY
20 BRONX NY
22 CORONA NY
24 BRONX NY
61 MIDDLE ISLAND NY
74 WHITE PLAINS NY
79 HARTSDALE NY
82 OSSINING NY
91 ELMSFORD NY
102 PEEKSKILL NY
104 LARCHMONT NY
111 BRONX NY
115 BRONX NY
117 MAMARONECK NY
121 YONKERS NY
126 BROOKLYN NY
128 BROOKLYN NY
138 YONKERS NY
146 MAHOPAC NY
157 POUGHKEEPSIE NY
160 MARLBORO NY
163 LAKE KATRINE NY
174 STONY POINT NY
177 HIGHLAND NY
178 KINGSTON NY
181 HOWARD BEACH NY
186 BRONX NY
195 S. ISLAND NY
200 S. ISLAND NY
223 BROOKLYN NY
229 BROOKLYN NY
234 S. ISLAND NY
235 S. ISLAND NY
240 SPRINGFIELD GDNS. NY
252 MT. VERNON NY
264 BRONX NY
266 BRONX NY
270 BRONX NY
272 BRONX NY
275 BRONX NY
276 BRONX NY
277 BRONX NY
278 YONKERS NY
301 N. TARRYTOWN NY
307 BREWSTER NY
312 FLUSHING NY
323 BRONX NY
324 S. ISLAND NY
1
<PAGE> 54
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
341 NEW YORK NY
342 GLENDALE NY
343 OZONE PARK NY
344 LIC NY
350 SPRING VALLEY NY
361 ASTORIA NY
362 S. ISLAND NY
396 S. ISLAND NY
411 BROOKLYN NY
421 BROOKLYN NY
544 WHITE PLAINS NY
545 SAUGERTIES NY
546 WOODSIDE NY
547 OZONE PARK NY
561 S. ISLAND NY
564 BROOKLYN NY
568 LIC NY
570 WHITE PLAINS NY
572 HAWTHORNE NY
573 PLEASANTVILLE NY
576 YONKERS NY
577 YONKERS NY
578 RYE NY
579 OSSINING NY
587 FRANKLIN CT
617 AGAWAM MA
618 FEEDING HILLS MA
619 AGAWAM MA
624 GRANBY MA
625 G. BARRINGTON MA
626 HADLEY MA
627 LANESBORO MA
628 MONSON MA
629 NORTH ADAMS MA
630 NORTH ADAMS MA
631 PALMER MA
632 PITTSFIELD MA
633 PITTSFIELD MA
637 SPRINGFIELD MA
638 SPRINGFIELD MA
640 SPRINGFIELD MA
641 SPRINGFIELD MA
643 WESTFIELD MA
647 OSSINING NY
649 BROOKLYN NY
685 DOBBS FERRY NY
709 BROOKLYN NY
6130 NEW HAVEN CT
6744 NORWALK CT
6765 STAMFORD CT
2
<PAGE> 55
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
6772 COS COB CT
6822 MANCHESTER CT
6853 ENFIELD CT
8605 NEW CASTLE DE
8608 WILMINGTON DE
8635 NEW CASTLE DE
8637 ST. GEORGES DE
8641 WILMINGTON DE
8644 WILMINGTON DE
8645 CLAYMONT DE
8659 NEWARK DE
8667 NEWARK DE
8671 WILMINGTON DE
28032 PORTLAND ME
28215 WESTBROOK ME
29721 ROCKDALE MD
29763 RANDALSTOWN MD
29812 ABERDEEN MD
30161 MILFORD MA
30312 AGAWAM MA
30315 S. WEYMOUTH MA
30317 WEST ROXBURY MA
30324 MAYNARD MA
30327 STOUGHTON MA
30331 ARLINGTON MA
30339 BELMONT MA
30351 ROCKLAND MA
30352 WATERTOWN MA
30355 READING MA
30361 DORCHESTER MA
30363 WEYMOUTH MA
30392 ASHLAND MA
30393 WOBURN MA
30404 BELMONT MA
30412 PITTSFIELD MA
30429 N. ATTLEBORO MA
30436 WORCESTER MA
30439 TAUNTON MA
30445 FALL RIVER MA
30457 WORCESTER MA
30458 WEBSTER MA
30466 CLINTON MA
30468 FOXBORO MA
30471 WORCESTER MA
30472 CLINTON MA
30515 BOSTON MA
30521 NEWTON MA
30524 FALMOUTH MA
30537 SOMERSET MA
30545 METHUEN MA
3
<PAGE> 56
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
30546 ROCKLAND MA
30548 WILLIAMSTOWN MA
30551 FAIRHAVEN MA
30557 TAUNTON MA
30558 SEEKONK MA
30559 WALPOLE MA
30561 N. ANDOVER MA
30562 WESTFORD MA
30600 LOWELL MA
30601 FRAMINGHAM MA
30603 METHUEN MA
30604 AMESBURY MA
30605 GEORGETOWN MA
30606 IPSWICH MA
30607 SALISBURY MA
30609 BEVERLY MA
30610 BILLERICA MA
30612 CHATHAM MA
30615 HARWICH MA
30616 IPSWICH MA
30618 LOWELL MA
30619 METHUEN MA
30621 NEWBURYPORT MA
30623 ORLEANS MA
30624 PEABODY MA
30625 QUINCY MA
30626 REVERE MA
30627 SALEM MA
30629 TEWKSBURY MA
30630 TWIN MILL MA
30631 FALMOUTH MA
30633 WESTFORD MA
30636 BRIDGEWATER MA
30644 CANTON MA
30646 STOUGHTON MA
30647 MEDFORD MA
30648 DORCHESTER MA
30649 STOUGHTON MA
30651 WORCESTER MA
30653 BARRE MA
30654 WORCESTER MA
30655 BROCKTON MA
30656 MILLBURY MA
30658 WORCESTER MA
30660 DUDLEY MA
30662 FRANKLIN MA
30663 WORCESTER MA
30665 LEOMINSTER MA
30666 WORCESTER MA
30668 WORCESTER MA
4
<PAGE> 57
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
30669 NORTHBOROUGH MA
30670 POCASSET MA
30671 CLINTON MA
30672 W. BOYLSTON MA
30674 SOUTHBRIDGE MA
30675 WORCESTER MA
30676 S. YARMOUTH MA
30677 STERLING MA
30678 SUTTON MA
30679 WORCESTER MA
30680 FRAMINGHAM MA
30682 WAREHAM MA
30683 WESTBOROUGH MA
30684 HARWICHPORT MA
30685 WORCESTER MA
30686 WORCESTER MA
30687 FITCHBURG MA
30688 WORCESTER MA
30689 CHERRY VALLEY MA
30690 FRAMINGHAM MA
30692 SOUTHBRIDGE MA
30693 OXFORD MA
30696 FITCHBURG MA
30697 WORCESTER MA
30698 ORANGE MA
30702 MILFORD MA
30704 UXBRIDGE MA
30709 WORCESTER MA
30710 WORCESTER MA
30711 AUBURN MA
30712 WALTHAM MA
30713 LOWELL MA
55237 SALEM NH
55238 LONDONBERRY NH
55244 MERRINACK NH
55245 NASHUA NH
55247 PEMBROKE NH
55249 ROCHESTER NH
55251 SALEM NH
55254 EXETER NH
55257 EPPING NH
55258 EPSOM NH
55259 EXETER NH
55261 MILFORD NH
55265 PORTSMOUTH NH
55274 PELHAM NH
56161 LITTLE FERRY NJ
56230 NEWARK NJ
58007 GLENDALE NY
58012 BELLAIRE NY
5
<PAGE> 58
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
58014 BRONX NY
58015 BROOKLYN NY
58018 BAYSIDE NY
58049 YONKERS NY
58053 BROOKLYN NY
58071 ST. ALBANS NY
58077 BROOKLYN NY
58079 BROOKLYN NY
58085 BAYSIDE NY
58108 WHITE PLAINS NY
58111 SCARSDALE NY
58114 NEW ROCHELLE NY
58119 BROOKLYN NY
58121 NEW ROCHELLE NY
58154 BRONX NY
58173 GLENVILLE NY
58205 NEW YORK NY
58218 ALBANY NY
58220 LONG ISLAND CITY NY
58254 ALBANY NY
58260 RENSSELAER NY
58315 ROTTERDAM NY
58329 OSSINING NY
58347 ELLENVILLE NY
58367 CHATHAM NY
58409 NEW YORK NY
58415 BROOKLYN NY
58441 STATEN ISLAND NY
58443 STATEN ISLAND NY
58505 BRONX NY
58513 BRONX NY
58514 NEW YORK NY
58526 OZONE PARK NY
58542 NEW YORK NY
58547 ASTORIA NY
58557 E. ELMHURST NY
58567 GUILDERLAND CTR. NY
58582 TROY NY
58584 BROOKLYN NY
58585 ARVERNE NY
58587 REGO PARK NY
58592 NEW YORK NY
58596 MIDDLETOWN NY
58605 HOWARD BEACH NY
58703 SCHENECTADY NY
58704 BALLSTON SPA NY
58705 BALLSTON SPA NY
58710 COLONIE NY
58711 DELMAR NY
58712 ELLENVILLE NY
6
<PAGE> 59
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
58714 FT. PLAIN NY
58715 GLENS FALLS NY
58716 GLOVERSVILLE NY
58718 CLIFTON PARK NY
58719 GREEN ISLAND NY
58720 HANCOCK NY
58721 HYDE PARK NY
58722 LATHAM NY
58723 BALLSTON SPA NY
58724 MELROSE NY
58725 MILLERTON NY
58726 NEW WINDSOR NY
58727 NISKAYUNA NY
58730 PLEASANT VLLY NY
58731 POUGHKEEPSIE NY
58733 QUEENSBURY NY
58735 ROTTERDAM NY
58737 SCHNECTADY NY
58739 S. GLENS FALLS NY
58740 TROY NY
58741 WARRENSBURG NY
58743 HUDSON FALLS NY
58744 MECHANICVILLE NY
58750 MECHANICVILLE NY
58751 NEWBURGH NY
58753 KINGSTON NY
58754 RENSSELAER NY
58760 PORT EWEN NY
58761 CATSKILL NY
58762 CATSKILL NY
58766 HUDSON NY
58768 SAUGERTIES NY
58769 FREEHOLD NY
58771 GREENVILLE NY
58772 QUARRYVILLE NY
58780 RENSSELAER NY
58785 MENANDS NY
58786 HOOSICK FALLS NY
58793 VALATIE NY
58797 LEEDS NY
58802 PINE BUSH NY
58804 COPAKE NY
58806 RED HOOK NY
58808 W. TAGHKANIC NY
58809 MIDDLE ISLAND NY
58812 RAVENA NY
58822 CROTON FALLS NY
67101 BANGOR PA
67215 PHILADELPHIA PA
67227 ALLENTOWN PA
7
<PAGE> 60
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
67249 PHILADELPHIA PA
67261 PHILADELPHIA PA
67265 PHILADELPHIA PA
67266 PHILADELPHIA PA
67276 PHILADELPHIA PA
67299 ABINGTON PA
67398 ROSLYN PA
67402 PHILADELPHIA PA
67409 PHILADELPHIA PA
67416 LEVITTOWN PA
67423 QUAKERTOWN PA
67425 SOUDERTON PA
67432 COOPERSBURG PA
67531 TRAPPE PA
67580 GETTYSBURG PA
67596 PARADISE PA
67597 PHILADELPHIA PA
67599 ELIZABETHTOWN PA
67604 ALLENTOWN PA
67610 PHILADELPHIA PA
67616 PHILADELPHIA PA
67624 NEW OXFORD PA
67626 LITTLESTOWN PA
67627 HANOVER PA
67632 LONGSTOWN PA
67633 YORK PA
67636 DOVER PA
67638 GLEN ROCK PA
67639 CARLISLE PA
67641 BOILING SPGS. PA
67654 HARRISBURG PA
68007 PROVIDENCE RI
68120 E. PROVIDENCE RI
68646 WAKEFIELD RI
69002 READING PA
69004 EPHRATA PA
69005 DAUPHIN PA
69006 DOUGLASVILLE PA
69010 YORK PA
69012 GETTYSBURG PA
69016 POTTSVILLE PA
69019 POTTSVILLE PA
69406 ALLENTOWN PA
69408 BETHLEHEM PA
69409 WASTON PA
69415 BETHLEHEM PA
69416 LANCASTER PA
69417 SCAFFERSTOW PA
69419 HAMBURG PA
69420 READING PA
8
<PAGE> 61
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
69421 MILLERSVILLE PA
69422 MANHEIN PA
69425 EBENEZER PA
69426 BETHELEM PA
69428 INTERCOURSE PA
69430 REINHOLDS PA
69431 BOYERTOWN PA
69439 OXFORD PA
69440 POTTSTOWN PA
69443 EPHRATA PA
69444 READING PA
69445 ROBERSONIA PA
69449 YORK PA
69466 KENHORST PA
69472 LEOLA PA
69476 SHREWSBURY PA
69483 RED LION PA
69484 READING PA
69493 HANOVER PA
69495 HARRISBURG PA
69497 ADAMSTOWN PA
69503 LANCASTER PA
69504 NEW HOLLAND PA
69505 CHRISTIANA PA
69507 LANCASTER PA
69673 WYOMISSING HILLS PA
69676 ST. CLAIR PA
69681 W. READING PA
69682 ARDENTSVILLE PA
69683 HOHNTON PA
69684 ST. THOMAS PA
69685 CARLISLE PA
69688 BONNEAUVILLE PA
69690 MCCONNELLSBURG PA
71002 ROCKY MOUNT VA
71004 BLACKSBURG VA
71009 VINTON VA
71010 ROANOKE VA
71011 RIDGEWAY VA
71028 FIEDALE VA
71030 MARTISNSILLE VA
71031 ROANOKE VA
71033 ROANOKE VA
71054 RICH CREEK VA
71055 DANVILLE VA
71090 ROANOKE VA
71108 ROANOKE VA
71109 ROANOKE VA
71110 SALEM VA
71112 STANLEYTOWN VA
9
<PAGE> 62
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
71113 MARTINSVILLE VA
71120 ROANOKE VA
71173 RICHMOND VA
71177 DALEVILLE VA
71178 BRISTOL VA
71213 MARTINSVILLE VA
71215 CHESAPEAKE VA
71216 VIRGINIA BCH VA
71218 VIRGINIA BCH VA
71220 HAMPTON VA
71222 PORTSMOUTH VA
71250 NEWPORT NEWS VA
71251 VIRGINIA BCH VA
71252 VIRGINIA BCH VA
71255 VIRGINIA BCH VA
71257 VIRGINIA BCH VA
71262 HAMPTON VA
71264 STERLING PARK VA
71270 PORTSMOUTH VA
71288 CHRISTIANASBR VA
71293 VIRGINIA BCH VA
71294 MAHASSAS PK VA
76112 BENNINGTON VT
473 SITES
10
<PAGE> 63
EXHIBIT E
PREMISES WITH ONGOING REMEDIATIONS
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
7 JAMAICA NY
8 REGO PARK NY
16 OZONE PARK NY
17 BROOKLYN NY
20 BRONX NY
22 CORONA NY
24 BRONX NY
38 OCEANSIDE NY
54 BRIGHTWATERS NY
61 MIDDLE ISLAND NY
74 WHITE PLAINS NY
75 WHITE PLAINS NY
77 NEW ROCHELLE NY
78 YONKERS NY
79 HARTSDALE NY
82 OSSINING NY
91 ELMSFORD NY
93 PELHAM MANOR NY
100 MAHWAH NJ
101 VALLEY COTTAGE NY
102 PEEKSKILL NY
103 PORT CHESTER NY
104 LARCHMONT NY
110 MEDFORD NY
111 BRONX NY
114 BRONX NY
115 BRONX NY
116 ELMSFORD NY
117 MAMARONECK NY
121 YONKERS NY
126 BROOKLYN NY
128 BROOKLYN NY
138 YONKERS NY
146 MAHOPAC NY
157 POUGHKEEPSIE NY
159 CARMEL NY
160 MARLBORO NY
163 LAKE KATRINE NY
169 WAPPINGERS FALLS NY
174 STONY POINT NY
177 HIGHLAND NY
178 KINGSTON NY
179 POUGHKEEPSIE NY
181 HOWARD BEACH NY
182 LAGRANGEVILLE NY
186 BRONX NY
195 STATEN ISLAND NY
200 S. ISLAND NY
210 BRONX NY
214 JAMAICA NY
1
<PAGE> 64
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
218 MIDDLE VILLAGE NY
219 LONG ISLAND CITY NY
223 BROOKLYN NY
225 ROCKAWAY PARK NY
228 BROOKLYN NY
229 BROOKLYN NY
234 STATEN ISLAND NY
235 S. ISLAND NY
240 SPRINGFIELD GDNS. NY
252 MT. VERNON NY
254 NORTH BRUNSWICK NJ
257 BRONX NY
258 BRONX NY
261 BRONX NY
264 BRONX NY
266 BRONX NY
268 BRONX NY
270 BRONX NY
271 BRONX NY
272 BRONX NY
275 BRONX NY
276 BRONX NY
277 BRONX NY
278 YONKERS NY
288 ATLANTIC HIGHLANDS NJ
301 N. TARRYTOWN NY
304 OLD BRIDGE NJ
307 BREWSTER NY
312 FLUSHING NY
319 MAHWAH NJ
322 VALLEY COTTAGE NY
323 BRONX NY
324 S. ISLAND NY
325 BRIARCLIFF MANOR NY
326 BRONX NY
329 BRONX NY
331 BRONX NY
332 BRONX NY
334 BROOKLYN NY
336 BROOKLYN NY
339 NEW YORK NY
340 NEW YORK NY
341 NEW YORK NY
342 GLENDALE NY
343 OZONE PARK NY
344 LIC NY
357 N. BABYLON NY
358 PELHAM NY
360 SMITHTOWN NY
361 ASTORIA NY
2
<PAGE> 65
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
362 S. ISLAND NY
363 CEDARHURST NY
366 LAKE RONKONKOMA NY
370 KEYPORT NJ
377 NEW CITY NY
379 W. HAVERSTRAW NY
396 STATEN ISLAND NY
411 BROOKLYN NY
421 BROOKLYN NY
425 W. ISLIP NY
429 RONKONKOMA NY
444 BAYSHORE NY
460 BETHPAGE NY
523 TOMS RIVER NJ
535 N. BABYLON NY
544 WHITE PLAINS NY
545 SAUGERTIES NY
546 WOODSIDE NY
547 OZONE PARK NY
548 HICKSVILLE NY
549 BRONX NY
561 S. ISLAND NY
564 BROOKLYN NY
568 LIC NY
570 WHITE PLAINS NY
571 N. WHITE PLAINS NY
572 HAWTHORNE NY
573 PLEASANTVILLE NY
574 PATTERSON NY
576 YONKERS NY
577 YONKERS NY
578 RYE NY
579 OSSINING NY
580 BRANFORD CT
581 BRIDGEPORT CT
583 COVENTRY CT
587 FRANKLIN CT
589 MANCHESTER CT
590 MERIDEN CT
595 NEW MILFORD CT
596 NORTH HAVEN CT
598 NORWICH CT
600 WAUREGAN CT
604 TERRYVILLE CT
607 UNION CITY CT
611 WATERFORD CT
613 WESTPORT CT
615 WOODBRIDGE CT
619 AGAWAM MA
624 GRANBY MA
3
<PAGE> 66
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
625 GREAT BARRINGTON MA
628 MONSON MA
633 PITTSFIELD MA
635 SOUTH HADLEY MA
637 SPRINGFIELD MA
638 SPRINGFIELD MA
647 OSSINING NY
649 BROOKLYN NY
660 LAKEWOOD NJ
667 PARAMUS NJ
673 PLEASANTVILLE NJ
676 GLEN HEAD NY
677 NEW ROCHELLE NY
679 TORRINGTON CT
680 N. BRANFORD CT
685 DOBBS FERRY NY
687 WOLCOTT CT
688 PLAINVILLE CT
709 BROOKLYN NY
751 FAIRLESS HILLS PA
752 PHILADELPHIA PA
6130 NEW HAVEN CT
6722 BLOOMFIELD CT
6725 SIMSBURY CT
6742 RIDGEFIELD CT
6743 BRIDGEPORT CT
6744 NORWALK CT
6746 BRIDGEPORT CT
6748 BRIDGEPORT CT
6749 BRIDGEPORT CT
6751 BRIDGEPORT CT
6753 BRIDGEPORT CT
6754 BRIDGEPORT CT
6756 BRIDGEPORT CT
6762 DARIEN CT
6764 WESTPORT CT
6765 STAMFORD CT
6766 HAMDEN CT
6768 STAMFORD CT
6772 COS COB CT
6776 STRATFORD CT
6777 MILFORD CT
6778 STRATFORD CT
6782 FAIRFIELD CT
6811 BRISTOL CT
6813 BROOKFIELD CT
6817 TORRINGTON CT
6819 NORWALK CT
6826 HARTFORD CT
6831 NEW HAVEN CT
4
<PAGE> 67
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
6836 BRIDGEPORT CT
6837 WILTON CT
6850 W. HARTFORD CT
6853 ENFIELD CT
6862 STRATFORD CT
6864 EAST HARTFORD CT
6871 AVON CT
8608 WILMINGTON DE
8635 NEW CASTLE DE
8637 ST. GEORGES DE
8641 WILMINGTON DE
8667 NEWARK DE
8669 WILMINGTON DE
28206 LISBON ME
28215 WESTBROOK ME
28226 WINDHAM ME
28231 AUGUSTA ME
29721 BALTIMORE MD
29763 RANDALLSTOWN MD
30161 MILFORD MA
30315 S. WEYMOUTH MA
30326 GARDNER MA
30327 STOUGHTON MA
30332 METHUEN MA
30344 RANDOLPH MA
30351 ROCKLAND MA
30352 WATERTOWN MA
30363 WEYMOUTH MA
30374 DEDHAM MA
30375 HINGHAM MA
30392 ASHLAND MA
30409 HYDE PARK MA
30412 PITTSFIELD MA
30436 WORCESTER MA
30438 NEW BEDFORD MA
30439 TAUNTON MA
30466 CLINTON MA
30468 FOXBORO MA
30472 GROVELAND MA
30488 HYANNIS MA
30506 HOLYOKE MA
30518 GROVELAND MA
30524 FALMOUTH MA
30537 SOMERSET MA
30545 METHUEN MA
30546 ROCKLAND MA
30548 WILLIAMSTOWN MA
30551 FAIRHAVEN MA
30552 BELLINGHAM MA
30558 SEEKNOK MA
5
<PAGE> 68
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
30559 WALPOLE MA
30561 N. ANDOVER MA
30562 WESTFORD MA
30600 LOWELL MA
30601 FRAMINGHAM MA
30602 AUBURN MA
30603 METHUEN MA
30604 AMESBURY MA
30605 GEORGETOWN MA
30606 IPSWICH MA
30607 SALISBURY MA
30609 BEVERLY MA
30611 HAVERHILL MA
30612 CHATHAM MA
30618 LOWELL MA
30619 METHUEN MA
30621 NEWBURYPORT MA
30623 ORLEANS MA
30624 PEABODY MA
30627 SALEM MA
30629 TEWKSBURY MA
30630 TWIN MILL (WAREHAM) MA
30631 FALMOUTH MA
30632 W. YARMOUTH MA
30633 WESTFORD MA
30635 YARMOUTH MA
30636 BRIDGEWATER MA
30644 CANTON MA
30646 STOUCHTON MA
30651 WORCESTER MA
30652 AUBURN MA
30653 BARRE MA
30654 WORCESTER MA
30655 BROCKTON MA
30656 MILLBURY MA
30658 WORCESTER MA
30660 DUDLEY MA
30663 WORCESTER MA
30664 HYANNIS MA
30665 LEOMINSTER MA
30666 WORCESTER MA
30668 WORCESTER MA
30669 NORTH BOROUGH MA
30670 POCASSET MA
30671 CLINTON MA
30672 W. BOYLSTON MA
30673 WORCESTER MA
30674 SOUTHBRIDGE MA
30675 WORCESTER MA
30676 S. YARMOUTH MA
6
<PAGE> 69
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
30677 STERLING MA
30679 WORCESTER MA
30680 FRAMINGHAM MA
30682 WAREHAM MA
30683 WESTBOROUGH MA
30684 HARWICHPORT MA
30685 WORCESTER MA
30686 WORCESTER MA
30687 FITCHBURG MA
30688 WORCESTER MA
30689 CHERRY VALLEY MA
30690 FRAMINGHAM MA
30692 SOUTHBRIDGE MA
30693 OXFORD MA
30694 WORCESTER MA
30696 FITCHBURG MA
30697 WORCESTER MA
30700 FRAMINGHAM MA
30702 MILFORD MA
30704 UXBRIDGE MA
30710 WORCESTER MA
55211 DERRY NH
55234 PLAISTOW NH
55235 GILFORD NH
55236 SOMERSWORTH NH
55237 SALEM NH
55238 LONDONDERRY NH
55239 ROCHESTER NH
55241 HAMPTON NH
55245 NASHUA NH
55246 PELHAM NH
55247 PEMBROKE NH
55249 ROCHESTER NH
55250 ROCHESTER NH
55251 SALEM NH
55252 SEABROOK NH
55253 SOMERSWORTH NH
55254 EXETER NH
55256 CANDIA NH
55257 EPPING NH
55258 EPSOM NH
55261 MILFORD NH
55264 PORTSMOUTH NH
55265 PORTSMOUTH NH
55267 SALEM NH
55268 SEABROOK NH
56003 MCAFEE NJ
56005 HAMBURG NJ
56009 WEST MILFORD NJ
56028 WILLINGBORO NJ
7
<PAGE> 70
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
56039 NUTLEY NJ
56046 TOMS RIVER NJ
56051 WALL TOWNSHIP NJ
56056 UNION NJ
56062 CRANBURY NJ
56064 SPOTSWOOD NJ
56065 NEW BRUNSWICK NJ
56075 ELIZABETH NJ
56079 BAYONNE NJ
56084 BASKING RIDGE NJ
56086 DEPTFORD NJ
56088 SEWELL NJ
56101 TRENTON NJ
56102 LODI NJ
56113 SPRING LAKE NJ
56116 CLIFTON NJ
56117 SEWELL NJ
56132 ASBURY PARK NJ
56142 PATERSON NJ
56149 BRICK TOWNSHIP NJ
56156 OCEAN CITY NJ
56157 WHITING NJ
56169 MONTVALE NJ
56215 NEPTUNE NJ
56230 NEWARK NJ
56251 NESHANIC STATION NJ
56253 PINE HILL NJ
56258 TUCKERTON NJ
56260 W. DEPTFORD NJ
56262 ATCO NJ
56263 SOMERVILLE NJ
56271 MATAWAN NJ
56276 FORT LEE NJ
56803 BERGENFIELD NJ
56809 RAHWAY NJ
56815 LINDEN NJ
56818 BLOOMFIELD NJ
56821 SOUTH ORANGE NJ
56844 NUTLEY NJ
56852 ENGLEWOOD NJ
56868 CLIFTON NJ
56871 JERSEY CITY NJ
56873 WATCHUNG NJ
56877 GREEN VILLAGE NJ
56891 BLOOMFIELD NJ
56893 PARLIN NJ
56896 COLONIA NJ
56897 N. BERGEN NJ
56915 RIDGEWOOD NJ
56919 WAYNE NJ
8
<PAGE> 71
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
56921 WASHINGTON NJ
56922 PARAMUS NJ
56924 GARFIELD NJ
56925 JERSEY CITY NJ
56926 FORT LEE NJ
56933 BELFORD NJ
56935 EATONTOWN NJ
56939 MONMOUTH BCH NJ
56962 TRENTON NJ
56987 BEVERLY NJ
56999 WEST ORANGE NJ
58006 ROCKVILLE CENTRE NY
58007 GLENDALE NY
58012 BELLAIRE NY
58014 BRONX NY
58015 BROOKLYN NY
58018 BAYSIDE NY
58019 YONKERS NY
58021 DOBBS FERRY NY
58022 N. MERRICK NY
58025 WHITE PLAINS NY
58027 GREAT NECK NY
58031 GLEN HEAD NY
58034 PT. WASHINGTON NY
58041 WESTBURY NY
58042 TUCKAHOE NY
58046 EAST HILLS NY
58049 YONKERS NY
58053 BROOKLYN NY
58069 LYNBROOK NY
58071 ST. ALBANS NY
58072 RHINEBECK NY
58073 RIDGEWOOD NY
58077 BROOKLYN NY
58079 BROOKLYN NY
58087 BAYSHORE NY
58092 ARDSLEY NY
58101 YONKERS NY
58108 WHITE PLAINS NY
58111 SCARSDALE NY
58112 EASTCHESTER NY
58114 NEW ROCHELLE NY
58119 BROOKLYN NY
58121 NEW ROCHELLE NY
58123 BROOKLYN NY
58154 BRONX NY
58161 YONKERS NY
58173 GLENVILLE NY
58184 YONKERS NY
58205 NEW YORK NY
9
<PAGE> 72
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58218 ALBANY NY
58220 LONG ISLAND CITY NY
58254 ALBANY NY
58260 RENSSELAER NY
58263 MT. KISCO NY
58297 SALT POINT NY
58315 ROTTERDAM NY
58329 OSSINING NY
58347 ELLENVILLE NY
58367 CHATHAM NY
58393 HYDE PARK NY
58401 SHRUB OAK NY
58409 NEW YORK NY
58411 EAST MEADOW NY
58415 BROOKLYN NY
58441 STATEN ISLAND NY
58442 STATEN ISLAND NY
58471 CEDARHURST NY
58505 BRONX NY
58513 BRONX NY
58514 NEW YORK NY
58526 OZONE PARK NY
58532 MT. VERNON NY
58535 PELHAM MANOR NY
58542 NEW YORK NY
58543 FREEPORT NY
58547 ASTORIA NY
58548 MOHEGAN LAKE NY
58553 STATEN ISLAND NY
58557 E. ELMHURST NY
58558 STATEN ISLAND NY
58563 MERRICK NY
58567 GUILDERLAND CTR. NY
58573 WANTAGH NY
58574 SMITHTOWN NY
58582 TROY NY
58584 BROOKLYN NY
58585 ARVERNE NY
58587 REGO PARK NY
58592 NEW YORK NY
58596 MIDDLETOWN NY
58598 OCEANSIDE NY
58602 MANHASSET NY
58605 HOWARD BEACH NY
58616 BRONX NY
58703 SCHENECTADY NY
58704 BALLSTON SPA NY
58705 BALLSTON SPA NY
58710 COLONIE NY
58711 DELMAR NY
10
<PAGE> 73
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58712 ELLENVILLE NY
58713 FT. EDWARD NY
58714 FT. PLAIN NY
58715 GLENS FALLS NY
58716 GLOVERSVILLE NY
58718 HALFMOON NY
58719 GREEN ISLAND NY
58720 HANCOCK NY
58721 HYDE PARK NY
58722 LATHAM NY
58723 BALLSTON SPA NY
58724 MELROSE NY
58725 MILLERTON NY
58726 NEW WINDSOR NY
58727 NISKAYUNA NY
58730 PLEASANT VALLEY NY
58731 POUGHKEEPSIE NY
58733 QUEENSBURY NY
58735 ROTTERDAM NY
58737 GUILDERLAND NY
58739 S. GLENS FALLS NY
58740 TROY NY
58741 WARRENSBURG NY
58743 HUDSON FALLS NY
58744 MECHANICVILLE NY
58745 ALBANY NY
58750 MECHANICVILLE NY
58751 NEWBURGH NY
58753 KINGSTON NY
58754 RENSSELAER NY
58759 RHINEBECK NY
58760 PORT EWEN NY
58761 CATSKILL NY
58762 CATSKILL NY
58764 CATSKILL NY
58766 HUDSON NY
58768 SAUGERTIES NY
58769 FREEHOLD NY
58770 COXSACKIE NY
58771 GREENVILLE NY
58772 QUARRYVILLE NY
58774 MONSEY NY
58776 KINGSTON NY
58780 RENSSELAER NY
58785 MENANDS NY
58786 HOUSICK FALLS NY
58788 BREWSTER NY
58790 BARDONIA NY
58793 VALATIE NY
58794 CAIRO NY
11
<PAGE> 74
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58796 VISTA NY
58797 LEEDS NY
58798 POUGHKEEPSIE NY
58802 PINE BUSH NY
58804 COPAKE NY
58806 RED HOOK NY
58808 W. TAGHKANIC NY
58812 RAVENA NY
58822 CROTON FALLS NY
67101 BANGOR PA
67215 PHILADELPHIA PA
67227 ALLENTOWN PA
67243 BRYN MAWR PA
67244 CONSHOHOCKEN PA
67249 PHILADELPHIA PA
67253 HUNTINGDON VALLEY PA
67254 FEASTERVILLE PA
67255 PHILADELPHIA PA
67258 PHILADELPHIA PA
67265 PHILADELPHIA PA
67266 PHILADELPHIA PA
67269 HATBORO PA
67271 HAVERTOWN PA
67272 MEDIA PA
67274 PHILADELPHIA PA
67275 MILMONT PARK PA
67276 PHILADELPHIA PA
67278 ALDAN PA
67282 BRISTOL PA
67288 TREVOSE PA
67298 HAVERTOWN PA
67299 ABINGTON PA
67301 HATBORO PA
67367 CLIFTON HIGHTS PA
67381 ALDAN PA
67396 MEDIA PA
67398 ROSLYN PA
67401 CLIFTON HIGHTS PA
67402 PHILADELPHIA PA
67405 MORRISVILLE PA
67409 PHILADELPHIA PA
67415 PHOENIXVILLE PA
67416 LEVITTOWN PA
67418 LANGHORNE PA
67419 POTTSTOWN PA
67422 BOYERTOWN PA
67423 QUAKERTOWN PA
67425 SOUDERTON PA
67426 LANSDALE PA
67431 FURLONG PA
12
<PAGE> 75
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
67432 COOPERSBURG PA
67433 DOYLESTOWN PA
67434 RICHBORO PA
67435 PENNDEL PA
67436 WEST CHESTER PA
67437 NORRISTOWN PA
67531 TRAPPE PA
67580 GETTYSBURG PA
67598 LINWOOD PA
67599 ELIZABETHTOWN PA
67601 NORTH HILLS PA
67602 NEWTOWN SQUARE PA
67604 ALLENTOWN PA
67607 PHILADELPHIA PA
67610 PHILADELPHIA PA
67615 PHILADELPHIA PA
67617 PALMER TOWNSHIP PA
67623 FARIFIELD PA
67624 NEW OXFORD PA
67626 LITTLESTOWN PA
67627 HANOVER PA
67635 YORK PA
67636 DOVER PA
67638 GLEN ROCK PA
67639 CARLISLE PA
67640 CARLISLE PA
67641 BOILING SPRINGS PA
67647 HANOVER PA
67649 BIGLERVILLE PA
67650 NEW OXFORD PA
67654 HARRISBURG PA
68002 MIDDLETOWN RI
68007 PROVIDENCE RI
68120 EAST PROVIDENCE RI
68611 PAWTUCKET RI
68619 CRANSTON RI
68622 PAWTUCKET RI
68623 BARRINGTON RI
68629 WARWICK RI
68642 PORTSMOUTH RI
69004 EPHRATA PA
69005 DAUPHIN PA
69010 YORK PA
69012 GETTYSBURG PA
69016 POTTSVILLE PA
69019 POTTSVILLE PA
69406 ALLENTOWN PA
69407 LANCASTER PA
69408 BETHLEHEM PA
69409 EASTON PA
13
<PAGE> 76
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
69415 BETHLEHEM PA
69416 LANCASTER PA
69417 SCHAEFFERSTOWN PA
69419 HAMBURG PA
69420 READING PA
69421 MILLERSVILLE PA
69422 MANHEIM PA
69424 MOUNTVILLE PA
69425 EBENEZER PA
69426 BETHLEHEM PA
69428 INTERCOURSE PA
69430 REINHOLDS PA
69431 BOYERTOWN PA
69436 WEST GROVE PA
69439 OXFORD PA
69440 POTTSTOWN PA
69443 EPHRATA PA
69444 READING PA
69445 ROBESONIA PA
69449 YORK PA
69466 KENHORST PA
69472 LEOLA PA
69476 SHREWSBURY PA
69483 RED LION PA
69484 READING PA
69485 ROTHSVILLE PA
69495 HARRISBURG PA
69497 ADAMSTOWN PA
69503 LANCASTER PA
69504 NEW HOLLAND PA
69505 CHRISTIANA PA
69507 LANCASTER PA
69672 READING PA
69673 WYOMISSING HILLS PA
69676 ST.CLAIR PA
69680 REIFFTON PA
69681 W. READING PA
69682 ARENDTSVILLE PA
69683 MOHNTON PA
69684 ST.THOMAS PA
69685 CARLISLE PA
69688 BONNEAUVILLE PA
69690 MCCONNELLBURG PA
76112 BENNINGTON VT
694 SITES
14
<PAGE> 77
EXHIBIT F
DEALERS/LESSEES IN DEFAULT
AS OF JANUARY 31, 1997
Region 1
00631 Daniel P. Belanger Palmer, Ma.
30654 Howard Rhone Worcester, Ma.
Region 2
06722 Sydney Tulloch Bloomfield, Ct.
06826 Salvatore Dilciano Hartford, Ct.
58146 Manjit Josen Riverhead, N.Y.
58295 Pt. Jefferson Car Care Port Jefferson, N.Y.
Region 3
00195 Frank & David Esposito Staten Island, N.Y.
00396 Stacy Celiberti Staten Island, N.Y.
58558 Santorelli & Reggiero Staten Island, N.Y.
00654 Aslam Kahn Somerset, N.J.
56065 Karl Jordan New Brunswick, N.J.
56906 George Koenemund Old Bridge, N.J.
Region 4
00114 M. Moreno/M. Anazagasty Bronx, N.Y.
00329 J. Guzman Bronx, N.Y.
00350 Pascack Little Star Spring Valley, N.Y.
00379 Jagdish Patel W. Haverstraw, N.Y.
58161 Odel Getty Inc. Yonkers, N.Y.
58513 E.L. Grant Hway Bronx, N.Y.
58730 D&K Virk Lts. Pleasant Valley, N.Y.
00572 Darren Mancusi Oakhurst, N.J.
56925 Androus Corp. Jersey City, N.J.
95713 J. Czaja/J. Mocasrski Jersey City, N.J.
1
<PAGE> 78
SCHEDULE 1
[TO EXHIBIT-10.2]
SCHEDULE OF
INITIAL TERM FIXED RENT
BY INDIVIDUAL PROPERTY
[WILL BE SUPPLIED UPON REQUEST]
<PAGE> 1
EXHIBIT 10.29
REORGANIZATION AND
DISTRIBUTION AGREEMENT
between
GETTY PETROLEUM CORP.
and
GETTY PETROLEUM MARKETING INC.
dated as of
February 1, 1997
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS ................................................. 2
Section 1.01 General ............................................. 2
Section 1.02 Terms Defined Elsewhere in Agreement ................ 14
ARTICLE II - TRANSFER OF ASSETS ........................................ 14
Section 2.01 Merger of Aero into Getty ........................... 14
Section 2.02 Transfer of Assets to Marketing ..................... 14
Section 2.03 Transfers Not Effected Prior to the Distribution .... 15
Section 2.04 Cooperation Regarding Assets ........................ 16
Section 2.05 No Representations or Warranties; Consents .......... 17
Section 2.06 Conveyancing and Assumption Instruments ............. 18
ARTICLE III - ASSUMPTION AND SATISFACTION OF LIABILITIES ................ 21
Section 3.01 Assumption and Satisfaction of Liabilities .......... 21
ARTICLE IV - THE DISTRIBUTION ........................................... 21
Section 4.01 Cooperation Prior to the Distribution ............... 21
Section 4.02 Getty Board Action; Conditions Precedent
to the Distribution ................................. 22
Section 4.03 The Distribution .................................... 24
ARTICLE V - INDEMNIFICATION ............................................. 24
Section 5.01 Indemnification by Getty ............................ 24
Section 5.02 Indemnification by Marketing ........................ 25
Section 5.03 Insurance Proceeds .................................. 25
Section 5.04 Procedure for Indemnification ....................... 26
Section 5.05 Remedies Cumulative ................................. 30
Section 5.06 Survival of Indemnities ............................. 30
i
<PAGE> 3
ARTICLE VI - CERTAIN ADDITIONAL MATTERS ................................ 30
Section 6.01 Marketing Board ................................... 30
Section 6.02 Resignations; Getty Board .......................... 31
Section 6.03 Certificate Charter and Bylaws ..................... 31
Section 6.04 Employee Stock Ownership Plan ...................... 31
Section 6.05 Certain Post-Distribution Transactions ............. 32
Section 6.06 Corporate Name ..................................... 33
ARTICLE VII - ACCESS TO INFORMATION AND SERVICES ....................... 33
Section 7.01 Provision of Corporate Records ..................... 33
Section 7.02 Access to Information .............................. 34
Section 7.03 Production of Witnesses ........................... 34
Section 7.04 Reimbursement ...................................... 35
Section 7.05 Retention of Records ............................... 35
Section 7.06 Confidentiality .................................... 35
Section 7.07 Privileged Matters ................................. 36
ARTICLE VIII - INSURANCE ............................................... 39
Section 8.01 Policies and Rights Included Within
the Marketing Assets ............................... 39
Section 8.02 Post-Distribution Date Claims ...................... 40
Section 8.03 Administration and Reserves ........................ 40
Section 8.04 Agreement for Waiver of Conflict and
Shared Defense ..................................... 42
Section 8.05 Surety Bonds and Letters of Credit ................. 42
ARTICLE IX - MISCELLANEOUS ............................................. 43
Section 9.01 Complete Agreement; Construction ..................... 43
Section 9.02 Expenses ............................................. 44
Section 9.03 Governing Law ........................................ 44
Section 9.04 Notices .............................................. 44
Section 9.05 Amendments ........................................... 45
Section 9.06 Successors and Assigns ............................... 45
Section 9.07 Termination ......................................... 45
Section 9.08 Subsidiaries ......................................... 45
Section 9.09 No Third-Party Beneficiaries ........................ 45
Section 9.10 Titles and Headings .................................. 45
Section 9.11 Exhibits and Schedules ............................... 46
ii
<PAGE> 4
Section 9.12 Legal Enforceability................................... 46
Section 9.13 Consent of Parties..................................... 46
iii
<PAGE> 5
SCHEDULE OF EXHIBITS
Exhibit A: Getty Pro Forma Balance Sheet
Exhibit B: Marketing Bylaws - See Exhibit 3.4 to Form 10/A
Exhibit C: Marketing Restated Articles of Incorporation - See Exhibit 3.2
to Form 10/A
Exhibit D: Marketing Pro Forma Balance Sheet
Exhibit E: Master Lease between Marketing and Getty - See Exhibit 10.2 to
Form 10/A
Exhibit F: Office Space License between Getty and Marketing
Exhibit G: Services Agreement between Marketing and Getty - See Exhibit
10.4 to Form 10/A
Exhibit H: Tax Sharing Agreement between Marketing and Getty - See Exhibit
10.3 to Form 10/A
Exhibit I: Trademark License Agreement between Marketing and Getty - See
Exhibit 10.5 to Form 10/A
iv
<PAGE> 6
LIST OF SCHEDULES
Schedule 1.01(a) Environmental Liabilities
Schedule 1.01(b) Upgrades
Schedule 1.01(c) Marketing Equipment
Schedule 1.01(d) Shared Policies
Schedule 2.06 Conveyance and Assumption Instruments
Schedule 4.01 Consents
v
<PAGE> 7
___________________, 1997
REORGANIZATION AND DISTRIBUTION AGREEMENT
This REORGANIZATION AND DISTRIBUTION AGREEMENT (this "Agreement") is
made this 1st day of February, 1997 between Getty Petroleum Corp., a Delaware
corporation ("Getty"), and Getty Petroleum Marketing Inc. a Maryland corporation
and a wholly-owned subsidiary of Getty ("Marketing").
RECITALS
WHEREAS, Getty, directly and through subsidiaries, (i) acquires,
develops, leases and disposes of real estate (the "Real Estate Business"),
purchases, stores, transports and sells home heating oil to residential and
commercial customers in Pennsylvania and Maryland (the "Aero Home Heating Oil
Business"), and (ii) purchases, stores, markets and distributes gasoline and
diesel fuel in 12 Northeastern and Middle Atlantic States and purchases, stores,
transports and sells home heating oil to residential and commercial customers in
the New York Mid-Hudson Valley (which businesses described in this clause (ii)
are more specifically defined herein as the "Marketing Business");
WHEREAS, the Board of Directors of Getty has determined that it is in
the best interests of Getty to separate the Aero Home Heating Oil Business and
the Real Estate Business on the one hand, and the Marketing Business on the
other hand, and, in order to effect such separation, to transfer to Marketing
the stock of certain Getty subsidiaries principally engaged in the Marketing
Business and certain other assets relating principally to the Marketing Business
(collectively, the "Asset Transfers"), and thereafter to distribute all of the
outstanding shares of common stock, par value $.01 per share, of Marketing to
the holders of Getty common stock (the "Distribution");
<PAGE> 8
WHEREAS, Getty has effected (i) certain preliminary transfers and
corporate restructurings and (ii) the elimination of all intercompany and
intracompany receivables, payables and loans between entities that will be part
of Getty and its subsidiaries after the Distribution and entities that will be
part of Marketing and its subsidiaries after the Distribution, which
transactions are not contingent upon consummation of the Distribution and will
not be undone if the Distribution does not occur; and
WHEREAS, in connection with the Distribution, Getty and Marketing have
determined that it is necessary and desirable to set forth the principal
corporate transactions required to effect the Asset Transfers and the
Distribution, and to set forth the agreements that will govern certain matters
following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. As used in this Agreement, the following terms
shall have the following meanings:
Action: Any action, claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
Aero: Aero Oil Company, a Pennsylvania corporation.
Affiliate: With respect to any specified Person, means any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person. For purposes of this
definition, "control," when used with
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respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing. Notwithstanding
the foregoing, (i) the Affiliates of Getty shall not include Marketing, the
Marketing Subsidiaries or any other Person that would be an Affiliate of Getty
by reason of Getty's ownership of the capital stock of Marketing prior to the
Distribution or the fact that any officer or director of Marketing or any of
the Marketing Subsidiaries shall also serve as an officer or director of Getty
or any of the Retained Subsidiaries, and (ii) the Affiliates of Marketing shall
not include Getty, the Retained Subsidiaries or any other Person that would be
an Affiliate of Marketing by reason of Getty's ownership of the capital stock
of Marketing prior to the Distribution or the fact that any officer or director
of Marketing or any of the Marketing Subsidiaries shall also serve as an
officer or director of Getty or any of the Retained Subsidiaries.
Agent: The distribution agent appointed by Getty to distribute the
Marketing Common Stock pursuant to the Distribution.
Claims Administration: The processing of pre-Distribution claims made
under the Policies (including Self Insurance Programs), including the reporting
of claims to the insurance carrier, management and defense of claims and
providing for appropriate releases upon settlement of claims.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Conveyancing and Assumption Instruments: Collectively, the various
agreements, instruments and other documents to be entered into to effect the
Asset Transfers
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and the assumption of Liabilities in the manner contemplated by this Agreement
and the Related Agreements.
Distribution Date: The date determined by the Getty Board as the date
on which the Distribution shall be effected.
Distribution Record Date: The date established by the Getty Board as
the date for taking a record of the Holders of Getty Common Stock entitled to
participate in the Distribution.
Employee Stock Ownership Plan: The Employee Stock Ownership Plan of
Getty Petroleum Marketing Inc.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Financing Obligations: All (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, notes, debentures or similar instruments, (iii)
obligations under capitalized leases and deferred purchase arrangements, (iv)
reimbursement or other obligations relating to letters of credit or similar
arrangements, and (v) obligations to guarantee, directly or indirectly, any of
the foregoing types of obligations on behalf of others.
Gasway: Gasway, Inc., a New York corporation.
Getty Board: The Board of Directors of Getty.
Getty Books and Records: The books and records (including
computerized records, ledgers, files and software) of Getty and the Retained
Subsidiaries and all books and records owned by Getty and its Subsidiaries which
relate to the Retained Business, are necessary to operate the Retained Business,
or are required by law to be retained by Getty, including, without limitation,
all such books and records relating to Retained Employees, all
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files relating to any Action pertaining to the Retained Liabilities, original
corporate minute books, stock ledgers and certificates and corporate seals, and
all licenses, leases, agreements and filings, relating to Getty, the Retained
Subsidiaries or the Retained Business (but not including the Marketing Books
and Records, provided that Getty shall have access to, and shall have the right
to obtain duplicate copies of, the Marketing Books and Records in accordance
with the provisions of Article VII).
Getty Common Stock: The common stock, par value $0.10 per share, of
Getty.
Getty Group: Getty and the Retained Subsidiaries, collectively.
Getty Pro Forma Balance Sheet: The Pro Forma Consolidated Balance
Sheet for Getty, after giving effect to the Distribution, as of October 31,
1996 attached hereto as Exhibit A.
Highspire Assets: All tangible and intangible personal property and
equipment that Aero owns or to which it has rights and that is located at or
used in connection with the operation of the property is known as the Highspire
Terminal.
Holders: The holders of record of Getty Common Stock as of the
Distribution Record Date.
HSR Act: The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
Indemnified Environmental Liabilities: All Liabilities relating to
(i) the pre-closing environmental liabilities and obligations set forth on
Schedule 1.01(a) hereto, (ii) all future upgrades set forth on Schedule 1.01(b)
hereto necessary to cause USTs to conform to the 1998 federal standards for
USTs, and (iii) all environmental liabilities and obligations arising out of
discharges with respect to the properties containing USTs that have not been
upgraded to conform to the 1998 federal standards for USTs, that are discovered
prior to the date such USTs are upgraded to meet the 1998 federal standards.
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Insurance Administration: With respect to each Policy, the accounting
for premiums, retrospectively rated premiums, defense costs, adjuster's fees,
indemnity payments, deductibles and retentions as appropriate under the terms
and conditions of such Policy; and the reporting to excess insurance carriers of
any losses or claims in accordance with Policy provisions, and the distribution
of Insurance Proceeds as contemplated by this Agreement.
Insurance Proceeds: Those moneys (i) received by an insured from an
insurance carrier or (ii) paid by an insurance carrier on behalf of an insured,
in either case net of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention, cost or reserve paid or held by or for the
benefit of such insured.
Insured Claims: Those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Policies,
whether or not subject to deductibles, co-insurance, uncollectability or
retrospectively rated premium adjustments, but only to the extent that such
Liabilities are within applicable Policy limits, including aggregates.
IRS: The Internal Revenue Service.
KOSCO: Kingston Oil Supply Corp., a New York corporation.
Liabilities: Any and all debts, liabilities and obligations, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including all costs and expenses
relating thereto, and including, without limitation, those debts, liabilities
and obligations arising under any law, rule, regulation, Action, threatened
Action, order or consent decree of any governmental
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entity or any award of any arbitrator of any kind, and those arising under any
contract, commitment or undertaking.
Marketing Adjustment Amount: The difference between the Marketing
Initial Target Net Working Capital and the Marketing Initial Net Working
Capital.
Marketing Balance Sheet: The Consolidated Balance Sheet for Marketing
as of October 31, 1996 attached hereto as Exhibit D.
Marketing Board: The Board of Directors of Marketing.
Marketing Books and Records: The books and records (including
computerized records, ledgers, files and software) of Marketing and the
Marketing Subsidiaries and all books and records owned by Getty and its
Subsidiaries that relate to the Marketing Business or are necessary to operate
the Marketing Business including, without limitation, all such books and records
relating to Marketing Employees, all files relating to any Action being assumed
by Marketing as part of the Marketing Liabilities, original corporate minute
books, stock ledgers and certificates and corporate seals, and all licenses,
leases, agreements and filings relating to Marketing, the Marketing Subsidiaries
or the Marketing Business (but not including the Getty Books and Records,
provided that Marketing shall have access to, and have the right to obtain
duplicate copies of, the Getty Books and Records in accordance with the
provisions of Article VII).
Marketing Business: The businesses conducted by Marketing and the
Marketing Subsidiaries and the businesses conducted pursuant to or utilizing the
Marketing Assets, including without limitation (i) the purchase, storage,
distribution, marketing and sale of gasoline and diesel fuel and other related
products at wholesale and through terminals and
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a retail service station network and (ii) the purchase, storage, transportation
and sale of home heating oil to residential and commercial customers in the New
York Mid-Hudson Valley.
Marketing Bylaws: The Bylaws of Marketing, substantially in the form
of Exhibit B, to be in effect at the Distribution Date.
Marketing Charter: The Articles of Incorporation of Marketing,
substantially in the form of Exhibit C, to be in effect at the Distribution
Date.
Marketing Common Stock: The common stock, par value $.01 per share,
of Marketing.
Marketing Employees: The persons employed by the Marketing Group on
the Distribution Date, all of whom (except those employed pursuant to union
contracts or to agreements providing for continued employment upon a change in
control of Getty) are at will employees.
Marketing Equipment: Certain equipment of Getty relating to the
storage, distribution and marketing of motor fuel, including the tanks (other
than the Retained USTs), racks, signs, motor fuel pumps, canopies and associated
equipment described on Schedule 1.01(c) hereto.
Marketing Group: Marketing and the Marketing Subsidiaries,
collectively.
Marketing Initial Cash Balance: The amount of cash sufficient to
cause Marketing Initial Net Working Capital to equal Marketing Initial Target
Net Working Capital.
Marketing Initial Net Working Capital: The excess of the book value
of the current assets of the Marketing Group over the book value of the current
liabilities of the
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<PAGE> 15
Marketing Group as of the Distribution Date, as determined in accordance with
Section 2.06(b) hereof.
Marketing Initial Target Net Working Capital: $1,100,000.
Marketing Liabilities: (i) All of the Liabilities of the Marketing
Group under, or to be retained or assumed by Marketing or any of the Marketing
Subsidiaries pursuant to, this Agreement or any of the Related Agreements, (ii)
all Liabilities for payment of outstanding drafts of Getty attributable to the
Marketing Business existing as of the Distribution Date, and (iii) all other
Liabilities arising out of or in connection with any of the Marketing Assets or
the Marketing Business, determined on a basis consistent with the determination
of the Liabilities of Marketing included on the Marketing Balance Sheet (but
excluding (i) all Indemnified Environmental Liabilities and (ii) any Financing
Obligations of Getty or any of the Retained Subsidiaries, except to the extent
otherwise set forth above or reflected in the Marketing Balance Sheet).
Marketing Policies: All Policies, current or past, which are owned or
maintained by or on behalf of Getty or any of its Affiliates or predecessors,
that relate to the Marketing Business but do not relate to the Retained
Business, and which Policies are either maintained by the Marketing Group or
assignable to the Marketing Group.
Marketing Security Deposits: Any claim to or right in (i) monies
deposited with third parties to secure the performance of any obligation of
Getty, Marketing or any of their subsidiaries incurred in connection with the
Marketing Business or any Marketing Asset and (ii) monies deposited with Getty
by motor fuel station operators or dealers.
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Marketing Subsidiaries: The Transferred Subsidiaries and all
Subsidiaries of Marketing or the Transferred Subsidiaries at the time of the
Distribution.
Master Lease: The Master Lease between Marketing and Getty, which
agreement shall be entered into on or before the Distribution Date in
substantially the form of Exhibit E hereto.
NYSE: The New York Stock Exchange, Inc.
Office Space License: The Office Space License between Marketing and
Getty, which agreement shall be entered into on or prior to the Distribution
Date in substantially the form of Exhibit F hereto.
Person: Any individual, corporation, partnership, association, trust,
estate or other entity or organization, including any governmental entity or
authority.
Petro: PT Petro Corp., a New York corporation.
Policies: Insurance policies and insurance contracts of any kind
(each a "Policy") relating to the Marketing Business or the Retained Business as
conducted prior to the Distribution Date, including without limitation primary
and excess policies, comprehensive general liability policies, and automobile
and workers' compensation insurance policies, together with the rights, benefits
and privileges thereunder.
Privileged Information: All Information as to which Getty, Marketing
or any of their Subsidiaries are entitled to assert the protection of a
Privilege.
Privileges: All privileges that may be asserted under applicable law
including, without limitation, privileges arising under or relating to the
attorney-client relationship (including but not limited to the attorney-client
and work product privileges), the accountant-client privilege, and privileges
relating to internal evaluative processes.
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<PAGE> 17
Related Agreements: All of the agreements, instruments,
understandings, assignments or other arrangements which are entered into in
connection with the transactions contemplated hereby and which are set forth in
a writing, including, without limitation, the Conveyancing and Assumption
Instruments, the Master Lease, the Tax Sharing Agreement, the Trademark License
Agreement, the Services Agreement and the Office Space License.
Retained Assets: The assets of Getty other than the Marketing Assets,
including without limitation (i) the capital stock of the Retained Subsidiaries,
(ii) assets relating to the Retained Business, determined on a basis consistent
with the determination of assets included on the Getty Pro Forma Balance Sheet,
(iii) all of the assets expressly allocated to Getty or any of the Retained
Subsidiaries under this Agreement or the Related Agreements, and (iv) any other
assets of Getty and its Affiliates relating to the Retained Business.
Retained Business: The businesses conducted by Getty and its
Affiliates other than the Marketing Business, including without limitation the
Aero Home Heating Oil Business and the Real Estate Business.
Retained Employees: The persons employed by the Getty Group on the
Distribution Date, all of whom (except those employed pursuant to union
contracts or to agreements providing for continued employment upon a change in
control of Getty) are at will employees.
Retained Liabilities: (i) All of the Liabilities arising out of or in
connection with the Retained Assets or the Retained Business determined on a
basis consistent with the determination of the Liabilities of Getty included on
the Getty Pro Forma Consolidated Balance Sheet, (ii) all of the Liabilities of
Getty under, or to be retained or assumed by
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Getty or any of the Retained Subsidiaries pursuant to, this Agreement
or any of the Related Agreements, (iii) any Financing Obligations not
constituting Marketing Liabilities, (iv) any Liabilities arising out of the
settlement of lawsuits relating to the Distribution (other than those
Liabilities that constitute Marketing Liabilities), (v) all Liabilities for the
payment of outstanding drafts of Getty attributable to the Retained Business
existing as of the Distribution Date, (vi) all Indemnified Environmental
Liabilities, and (vii) all other Liabilities of Getty not constituting
Marketing Liabilities.
Retained Policies: All Policies, current or past, that are owned or
maintained by or on behalf of any member of the Getty Group (or any of its
predecessors) which relate to the Retained Business but do not relate to the
Marketing Business.
Retained Subsidiaries: All Subsidiaries of Getty, except Marketing
and the Marketing Subsidiaries.
Retained USTs: The USTs that, pursuant to Section 7.6 of the Master
Lease, are retained by Getty after the Distribution Date.
Securities Act: The Securities Act of 1933, as amended.
Services Agreement: The Services Agreement, which shall be entered
into between Getty and Marketing on or prior to the Distribution Date in
substantially the form attached hereto as Exhibit G.
Shared Policies: All Policies, current or past, that are owned or
maintained by or on behalf of Getty or any of its Subsidiaries or their
respective predecessors that relate to both the Retained Business and the
Marketing Business, and all other Policies not constituting Marketing Policies
or Retained Policies, as specified on Schedule 1.01(d) hereto.
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Subsidiary: With respect to any Person, (a) any corporation of which at
least a majority in interest of the outstanding voting stock (having by the
terms thereof voting power under ordinary circumstances to elect a majority of
the directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned or controlled by such Person, by one or
more Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries, or (b) any non-corporate entity in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof, has
at least majority ownership interest.
Tax Ruling: The private letter ruling issued by the Internal Revenue
Service on September 11, 1996, with respect to certain tax matters relating to
the Distribution.
Tax Sharing Agreement: The Tax Sharing Agreement between Marketing and
Getty, which agreement shall be entered into on or prior to the Distribution
Date in substantially the form of Exhibit H attached hereto.
Terminals: Getty Terminals Corp., a New York corporation.
Trademark License Agreement: The Trademark License Agreement between Getty
and Marketing, pursuant to which Getty will license certain intellectual
property rights to Marketing, which agreement shall be entered into on or prior
to the Distribution Date in substantially the form of Exhibit I attached
hereto.
Transferred Subsidiaries: Terminals, KOSCO, Gasway and Petro.
Transferred Subsidiary Stock: All of the issued and outstanding capital
stock of the Transferred Subsidiaries.
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UST: An underground storage tank including related piping, underground
pumps, wiring and monitoring devices.
Section 1.02 Terms Defined Elsewhere in Agreement.
Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
---- -------
Aero Home Heating Oil Business Recitals
Asset Transfers Recitals
Consents 4.01
Corporate Expenses 2.06
Current Assets 2.06
Current Liabilities 2.06
Distribution Recitals
Excess Revolving Credit Facilities Balance 2.06
Form 10 Registration Statement 4.01
Getty Recitals
Indemnifiable Loss 5.01
Indemnifying Party 5.03
Indemnitee 5.03
Information 7.02
Marketing Recitals
Marketing Assets 2.02
Marketing Indemnitees 5.01
Marketing Self Insurance Liabilities 8.06
Real Estate Business Recitals
Retained Self Insurance Liabilities 8.06
Third-Party Claim 5.04
Working Capital Accounts 2.06
Working Capital Balance 2.06
ARTICLE II
TRANSFER OF ASSETS
Section 2.01 Merger of Aero into Getty. Prior to the Distribution
Date, Getty shall take or cause to be taken all actions necessary to cause Aero
to (i) TRANSFER CERTAIN OF ITS ASSETS TO CERTAIN SUBSIDIARIES AND (ii) MERGE
INTO GETTY. PRIOR TO THE MERGER OF AERO INTO GETTY, GETTY SHALL TAKE OR CAUSE
TO BE TAKEN ALL ACTIONS NECESSARY TO CAUSE THE TRANSFER, ASSIGNMENT, DELIVERY,
AND CONVEYANCE TO MARKETING OR THE MARKETING SUBSIDIARIES OF ALL OF AERO'S
RIGHT, TITLE AND INTEREST IN THE MARKETING ASSETS, INCLUDING WITHOUT
LIMITATION THE HIGHSPIRE ASSETS, AND MARKETING SHALL TAKE OR CAUSE TO BE TAKEN
ALL ACTIONS NECESSARY TO CAUSE THE ASSUMPTION BY MARKETING OR THE MARKETING
SUBSIDIARIES OF THE MARKETING LIABILITIES.
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Section 2.02 Transfer of Assets to Marketing. Prior to the
Distribution Date, Getty shall take or cause to be taken all actions necessary
to cause the transfer, assignment, delivery and conveyance to Marketing or the
Marketing Subsidiaries of all of Getty's and its Subsidiaries' right, title and
interest in the Marketing Assets, and Marketing shall take or cause to be taken
all actions necessary to cause the assumption by Marketing or the Marketing
Subsidiaries of the Marketing Liabilities. The "Marketing Assets" shall consist
of the following assets:
(i) the Transferred Subsidiary Stock;
(ii) the Marketing Security Deposits;
(iii) the Marketing Books and Records;
(iv) the Marketing Equipment;
(v) all licenses and permits relating to the Marketing
Business, to the extent such licenses and permits are
transferable;
(vi) all of the other assets to be assigned to Marketing under
this Agreement or the Related Agreements; and
(vii) all other assets (including, without limitation, all
accounts receivable, deferred income taxes, prepaid
expenses, reserves and other current assets) relating
to the Marketing Business, determined on a basis
consistent with the determination of the assets
included on the Marketing Balance Sheet.
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Section 2.03 Transfers Not Effected Prior to the Distribution. To the
extent that any transfers contemplated by this Article II shall not have been
fully effected on the Distribution Date, the parties shall cooperate to effect
such transfers as promptly as shall be practicable following the Distribution
Date. Nothing herein shall be deemed to require the transfer of any assets or
the assumption of any Liabilities that by their terms or operation of law
cannot be transferred or assumed; provided, however, that Getty and Marketing
and their respective Subsidiaries and Affiliates shall cooperate in seeking to
obtain any necessary consents or approvals for the transfer of all assets and
Liabilities contemplated to be transferred pursuant to this Article II. In the
event that any such transfer of assets or Liabilities has not been consummated
as of the Distribution Date, the party retaining such asset or Liability shall
thereafter hold such asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto) and retain such
Liability for the account of the party by whom such Liability is to be assumed
pursuant hereto, and take such other actions as may be reasonably required in
order to place the parties, insofar as reasonably possible, in the same
position as would have existed had such asset been transferred or such
Liability been assumed as contemplated hereby. As and when any such asset or
Liability becomes transferable, such transfer and assumption shall be effected
forthwith. The parties agree that, except as described in this section below,
as of the Distribution Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership over all of the assets, together with
all rights, powers and privileges incidental thereto, and shall be deemed to
have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incidental
thereto, which such party is entitled to acquire or required to assume pursuant
to the terms of this Agreement.
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Section 2.04 Cooperation Regarding Assets. In the case that at any
time after the Distribution Date, Marketing reasonably determines that any of
the Retained Assets are essential for the conduct of the Marketing Business, or
Getty reasonably determines that any of the Marketing Assets are essential for
the conduct of the Retained Business, and the nature of such assets makes it
impracticable for Marketing or Getty, as the case may be, to obtain substitute
assets or to make alternative arrangements on commercially reasonable terms to
conduct their respective businesses, and reasonable provisions for the use
thereof are not already included in the Related Agreements, then Marketing (with
respect to the Marketing Assets) and Getty (with respect to the Retained Assets)
shall cooperate to make such assets available to the other party on commercially
reasonable terms, as may be reasonably required for such party to maintain
normal business operations (provided that such assets shall be required to be
made available only until such time as the other party may reasonably obtain
substitute assets or make alternative arrangements on commercially reasonable
terms to permit it to maintain normal business operations).
Section 2.05 No Representations or Warranties; Consents. Each of the
parties hereto understands and agrees that no party hereto is, in this Agreement
or in any other agreement or document contemplated by this Agreement or
otherwise, representing or warranting in any way (i) as to the value or freedom
from encumbrance of, or any other matter concerning, any assets of such party or
(ii) as to the legal sufficiency to convey title to any asset transferred
pursuant to this Agreement or any Related Agreement, including, without
limitation, any Conveyancing or Assumption Instruments. It is also agreed and
understood that there are no warranties, express or implied, as to the
merchantability or fitness of any of the assets either transferred to or
retained by the parties, as the case may
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be, and all such assets shall be "as is, where is" and "with all
faults" (provided, however, that the absence of warranties shall have no effect
upon the allocation of Liabilities under this Agreement). Similarly, each
party hereto understands and agrees that no party hereto is, in this Agreement
or in any other agreement or document contemplated by this Agreement or
otherwise, representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any amendatory agreements
and the making of any filings or applications contemplated by this Agreement
will satisfy the provisions of any or all applicable laws or judgments or other
instruments or agreements relating to such assets. Notwithstanding the
foregoing, the parties shall use their good faith efforts to obtain all
consents and approvals, to enter into all reasonable amendatory agreements and
to make all filings and applications which may be reasonably required for the
consummation of the transactions contemplated by this Agreement, and shall take
all such further reasonable actions as shall be reasonably necessary to
preserve for each of the Marketing Group and the Getty Group, to the greatest
extent feasible, the economic and operational benefits of the allocation of
assets and Liabilities provided for in this Agreement. In case at any time
after the Distribution Date any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of
each party to this Agreement shall take all such necessary or desirable action.
Section 2.06 Conveyancing and Assumption Instruments. In connection
with the Asset Transfers and the assumptions of Liabilities contemplated by this
Agreement, the parties shall execute or cause to be executed by the appropriate
entities the Conveyancing and Assumption Instruments in such forms as the
parties shall reasonably agree, including the assignment of franchise rights and
the assignment and assumption of existing agreements as
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set forth in Schedule 2.06 hereto. The transfer of capital stock shall be
effected by means of delivery of stock certificates and executed stock powers
and notation on the stock record books of the corporation or other legal
entities involved and, to the extent required by applicable law, by notation on
public registries.
(a) Cash Allocation on the Distribution Date. No cash shall be
transferred on the Distribution Date. In the event the actual cash balances
of Marketing and its Subsidiaries as of the Distribution are less than the
Marketing Initial Cash Balance, the amount of the deficiency shall be recorded
in the accounts of Marketing as of the Distribution Date as a payable from
Getty to Marketing (which payable will be paid as promptly as practicable
after the determination of such amount pursuant to Section 2.06(b)) and in the
event the actual Cash balances of Marketing and its Subsidiaries as of the
Distribution Date exceeds the Marketing Initial Cash Balance, the amount of
such excess shall be recorded in the accounts of Getty and Marketing as of the
Distribution Date as a payable from Marketing to Getty (which payable will be
paid as promptly as practicable following the determination of such amount
pursuant to Section 2.06(b)).
(b) Post-Distribution Adjustment. Within [30] days of the
Distribution Date, Marketing shall prepare a combining balance sheet of the
Marketing Group showing the Marketing Initial Net Working Capital and the
Marketing Adjustment Amount. If the
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Marketing Adjustment Amount exceeds zero, Getty shall promptly pay to Marketing
such Marketing Adjustment Amount. If the Marketing Adjustment Amount is less
than zero, Marketing shall promptly pay to Getty such Marketing Adjustment
Amount.
(c) Cash Management After the Distribution Date. Marketing shall
separate from Getty, and establish and maintain a cash management system and
accounting records with respect to the Marketing Business effective as of 12:01
a.m. on the day following the Distribution Date; thereafter, (i) any payments by
Getty or its Retained Subsidiaries on behalf of Marketing or the Marketing
Subsidiaries in connection with the Marketing Business shall be recorded in the
accounts of the Marketing Group as a payable from the Marketing Group to the
Getty Group; (ii) any payments by Marketing or the Marketing Subsidiaries on
behalf of Getty or its Retained Subsidiaries in connection with the Retained
Business shall be recorded in the accounts of the Getty Group as a payable from
the Getty Group to the Marketing Group; (iii) any cash payments received by
Getty and the Retained Subsidiaries relating to the Marketing Business or the
Marketing Assets shall be recorded in the accounts of the Getty Group as a
payable from the Getty Group to the Marketing Group; (iv) any cash payments
received by Marketing or the Marketing Subsidiaries relating to the Retained
Business or the Retained Assets shall be recorded in the accounts of the
Marketing Group as a payable from the Marketing Group to the Getty Group; (v)
Marketing and Getty shall make adjustments for late deposits, checks returned
for not sufficient funds and other post-Distribution Date transactions as shall
be reasonable under the circumstances consistent with the purpose and intent of
this Agreement; and (vi) the net balance due to the Getty Group or the Marketing
Group, as the case may be, in respect of the aggregate amounts of clauses (i),
(ii), (iii), (iv) and (v) shall be paid by Marketing or
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Getty, as appropriate, as promptly as practicable. For purposes of this
Section 2.06(c), the parties contemplate that the Retained Business and the
Marketing Business, including but not limited to the administration of accounts
payable and accounts receivable, will be conducted in the normal course.
(d) Audit and Disputes. All transactions contemplated in this
Section 2.06 shall be subject to audit by the parties, and any dispute
thereunder shall be resolved by an independent firm of certified public accounts
mutually acceptable to Getty and Marketing, whose decision shall be final and
unappealable.
ARTICLE III
ASSUMPTION AND SATISFACTION OF LIABILITIES
Section 3.01 Assumption and Satisfaction of Liabilities. Except as
set forth in the Tax Sharing Agreement, the Master Lease or other Related
Agreements, effective as of and after the Distribution Date, (a) Marketing
shall, and/or shall cause the Marketing Subsidiaries to, assume, pay, perform,
and discharge in due course all of the Marketing Liabilities and (b) Getty
shall, and/or shall cause the Retained Subsidiaries to, pay, perform and
discharge in due course all of the Retained Liabilities.
ARTICLE IV
THE DISTRIBUTION
Section 4.01 Cooperation Prior to the Distribution.
(a) Getty and Marketing have prepared, and Marketing has filed with
the Commission, a Form 10 registration statement with respect to the
registration under the Exchange Act of the Marketing Common Stock (the "Form 10
Registration Statement").
(b) Getty and Marketing shall cooperate in preparing, filing with the
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Commission and causing to become effective any registration statements or
amendments thereto which are appropriate to reflect the establishment of, or
amendments to, the Employee Stock Ownership Plan and any employee benefit plans
and other plans contemplated by the Agreement.
(c) Getty and Marketing shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of states or other political
subdivisions of the United States in connection with the transactions
contemplated by this Agreement and the Related Agreements.
(d) Getty and Marketing shall prepare, and Marketing shall file and pursue,
an application to permit the listing of Marketing Common Stock on the NYSE.
(e) Getty and Marketing shall make any requisite filings under the HSR
Act.
(f) Getty and Marketing shall use all reasonable efforts to obtain any
third-party consents or approvals necessary or desirable in connection with the
transactions contemplated hereby, including without limitation the consents or
approvals set forth on Schedule 4.01 hereto ("Consents").
(g) Getty and Marketing will use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary
or desirable under applicable law, to consummate the transactions contemplated
under this Agreement.
Section 4.02. Getty Board Action; Conditions Precedent to the Distribution
The Getty Board shall, in its discretion, establish the Distribution Record Date
and the Distribution Date and any appropriate procedures, including establishing
the exchange ratio,
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in connection with the Distribution. In no event shall the Distribution occur
unless the following conditions shall have been satisfied:
(i) the transactions contemplated by Sections 2.01 and 2.02 shall have been
consummated in all material respects;
(ii) Getty shall have modified its existing stock option plans and/or
amended option grants thereunder to insure that the Distribution does not
adversely affect the current holders of options under those plans;
(iii) the Marketing Common Stock shall have been approved for listing on
the NYSE, subject to official notice of issuance;
(iv) the Marketing Board, comprised as contemplated by Section 6.01, shall
have been elected by Getty, as sole stockholder of Marketing, and the Marketing
Charter and Marketing Bylaws shall have been adopted and shall be in effect;
(v) the Marketing Board shall have established the Employee Stock Ownership
Plan;
(vi) the Form 10 Registration Statement shall have become effective under
the Exchange Act;
(vii) the Tax Ruling shall have been granted in form and substance
satisfactory to the Getty Board, in its sole discretion;
(viii) a favorable no-action letter shall have been obtained from the
Securities and Exchange Commission regarding issuance of Marketing Common Stock
and certain other matters;
(ix) any applicable waiting period under the HSR Act shall have expired (or
been earlier terminated);
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(x) Getty and Marketing shall have obtained all Consents and any other
consents, the failure of which to obtain would, in the determination of the
Getty Board, have a material adverse effect on Getty or Marketing; and
(xi) Getty and Marketing shall have entered into the Related Agreements;
provided, however, that (i) any such condition may be waived by the Getty Board
in its sole discretion upon the advice of counsel, and (ii) the satisfaction of
such conditions shall not create any obligation on the part of Getty or any
other party hereto to effect the Distribution or in any way limit Getty's power
of termination set forth in Section 9.07 or alter the consequences of any such
termination from those specified in such Section.
Section 4.03 The Distribution. On the Distribution Date, subject to the
conditions and rights of termination set forth in this Agreement, Getty shall
deliver to the Agent a share certificate representing all of the then
outstanding shares of Marketing Common Stock owned by Getty and shall instruct
the Agent to distribute, on or as soon as practicable following the Distribution
Date, such Marketing Common Stock to the Holders. Marketing agrees to provide
all share certificates that the Agent shall require in order to effect the
Distribution.
ARTICLE V
INDEMNIFICATION
Section 5.01 Indemnification by Getty. Except as otherwise expressly
set forth in a Related Agreement, Getty shall indemnify, defend and hold
harmless Marketing and each of the Marketing Subsidiaries, and each of their
respective directors, officers, employees, agents and Affiliates and each of the
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heirs, executors, successors and assigns of any of the foregoing (the "Marketing
Indemnitees") from and against the Retained Liabilities.
Section 5.02 Indemification by Marketing. Except as otherwise expressly
set forth in a Related Agreement, Marketing shall indemnify, defend and hold
harmless Getty and each of the Retained Subsidiaries, and each of their
directors, officers, employees, agents and Affiliates and each of the heirs,
executors, successors and assigns of any of the foregoing (the "Getty
Indemnitees") from and against the Marketing Liabilities.
Section 5.03. Insurance Proceeds. The amount that any party (an
"Indemnifying Party") is or may be required to pay to any other Person (an
"Indemnitee") pursuant to Section 5.01 or Section 5.02 shall be reduced
(including, without limitation, retroactively) by any Insurance Proceeds or
other amounts actually recovered by or on behalf of such Indemnitee in reduction
of the related Indemnifiable Loss. If an Indemnitee shall have received the
payment required by this Agreement from an Indemnifying Party in respect of an
Indemnifiable Loss and shall subsequently actually receive Insurance Proceeds,
or other amounts in respect of such Indemnifiable Loss as specified above, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the amount
of such Insurance Proceeds or other amounts actually received.
Section 5.04 Procedure for Indemnification.
(a) Except as may be set forth in a Related Agreement, if an Indemnitee
shall receive notice or otherwise learn of the assertion by a Person (including,
without limitation, any governmental entity) who is not a party to this
Agreement or to any of the Related Agreements of any claim or of the
commencement by any such Person of any Action (a "Third-Party Claim") with
respect to which an Indemnifying Party may be obligated to
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provide indemnification pursuant to this Agreement, such Indemnitee shall give
such Indemnifying Party written notice thereof promptly after becoming aware of
such Third-Party Claim; provided, that the failure of any Indemnitee to give
notice as required by this Section 5.04 shall not relieve the Indemnifying of
its obligations under this Article V, except to the extent that such
Indemnifying Party is prejudiced by such failure to give notice. Such notice
shall describe the Third-Party Claim in reasonable detail, and shall indicate
the amount (estimated if necessary) of the Indemnifiable Loss that has been or
may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third-Party Claim, provided that the Indemnifying Party
must confirm in writing that it agrees that Indemnitee is entitled to
indemnification hereunder in respect of such Third-Party Claim. Within 30 days
of the receipt of notice from an Indemnitee in accordance with Section 5.04(a)
(or sooner, if the nature of such Third-Party Claim so requires), the
Indemnifying Party shall notify the Indemnitee of its election whether to assume
responsibility for such Third-Party Claim (provided that if the Indemnifying
Party does not so notify the Indemnitee of its election within 30 days after
receipt of such notice from the Indemnitee, the Indemnifying Party shall be
deemed to have elected not to assume responsibility for such Third-Party Claim),
and such Indemnitee shall cooperate in the defense or settlement or compromise
of such Third-Party Claim. After notice from an Indemnifying Party to an
Indemnitee of its election to assume responsibility for a Third-Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article V for any legal or other expenses (except expenses approved in advance
by the Indemnifying
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Party) subsequently incurred by such Indemnitee in connection with the defense
thereof; provided, that if the defendants in any such claim include both the
Indemnifying Party and one or more Indemnitees and in such Indemnitees'
reasonable judgment a conflict of interest between such Indemnitees and such
Indemnifying Party exists in respect of such claim, such Indemnitees shall have
the right to employ separate counsel and in that event the reasonable fees and
expenses of such separate counsel (but not more than one separate counsel
reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for a Third-Party Claim (which election may be made only in the
event of a good faith dispute that a claim was inappropriately tendered under
Section 5.01 or 5.02, as the case may be) such Indemnitee may defend or (subject
to the following sentence) seek to compromise or settle such Third-Party Claim.
Notwithstanding the foregoing, an Indemnitee may not settle or compromise any
claim without prior written notice to Indemnifying Party, which shall have the
option within ten days following the receipt of such notice (i) to disapprove
the settlement and assume all past and future responsibility for the claim,
including reimbursing the Indemnitee for prior expenditures in connection with
the claim, or (ii) to disapprove the settlement and continue to refrain from
participation in the defense of the claim, in which event the Indemnifying Party
shall have no further right to contest the amount or reasonableness of the
settlement if the Indemnitee elects to proceed therewith, or (iii) to approve
the amount of the settlement, reserving the Indemnifying Party's right to
contest the Indemnitee's right to indemnity, or (iv) to approve and agree to pay
the settlement. In the event the Indemnifying Party makes no response to such
written notice from the Indemnitee, the Indemnifying Party shall be deemed to
have elected option (ii).
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(c) If an Indemnifying Party chooses to defend or to seek to compromise any
Third-Party Claim, the Indemnitee shall make available to such Indemnifying
Party any personnel and any books, records or other documents within its control
or which it otherwise has the ability to make available that are necessary or
appropriate for such defense.
(d) Notwithstanding anything else in this Section 5.04 to the contrary, an
Indemnifying Party shall not settle or compromise any Third-Party Claim unless
such settlement or compromise contemplates as an unconditional term thereof the
giving by such claimant or plaintiff to the Indemnitee of a written release from
all liability in respect of such Third-Party Claim (and provided further that
such settlement may not provide for any non-monetary relief by Indemnitee
without the written consent of Indemnitee). In the event the Indemnitee shall
notify the Indemnifying Party in writing that such Indemnitee declines to accept
any such settlement or compromise, such Indemnitee may continue to contest such
Third-Party Claim, free of any participation by such Indemnifying Party, at such
Indemnitee's sole expense. In such event, the obligation of such Indemnifying
Party to such Indemnitee with respect to such Third-Party Claim shall be equal
to (i) the costs and expenses of such Indemnitee prior to the date such
Indemnifying Party notifies such Indemnitee of the offer to settle or compromise
(to the extent such costs and expenses are otherwise indemnifiable hereunder)
plus (ii) the lesser of (A) the amount of any offer of settlement or compromise
which such Indemnitee declined to accept or (B) the actual out-of-pocket amount
such Indemnitee is obligated to pay subsequent to such date as a result of such
Indemnitee's continuing to pursue such Third-Party Claim.
(e) Any claim on account of an Indemnifiable Loss which does not result
from a Third-Party Claim shall be asserted by written notice given by the
Indemnitee to the
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applicable Indemnifying Party. Such Indemnifying Party shall
have a period of 15 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such
15-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not
respond within such 15-day period or rejects such claim in whole or in part,
such Indemnitee shall be free to pursue such remedies as may be available to
such party under applicable law or under this Agreement.
(f) In addition to any adjustments required pursuant to Section 5.03, if
the amount of any Indemnifiable Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third-Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third-Party Claim against any claimant or plaintiff asserting
such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim.
Section 5.05 Remedies Cumulative. The remedies provided in this Article V
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
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Section 5.06. Survival of Indemnities. The obligations of each of
Marketing and Getty under this Article V shall survive the sale or other
transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any Indemnifiable Loss of the other related to such
assets, businesses or Liabilities.
ARTICLE VI
CERTAIN ADDITIONAL MATTERS
Section 6.01 Marketing Board. Marketing and Getty shall take all actions
which may be required to constitute, effective as of the Distribution Date, the
following persons as the directors of Marketing: (i) Ronald E. Hall, Richard E.
Montag and Matthew J. Chanin (none of whom shall be officers, directors or
owners of more than 5% of the outstanding voting stock of Getty) and (ii) Leo
Liebowitz and Milton Safenowitz.
Section 6.02 Resignations; Getty Board.
(a) Marketing shall cause all of its directors and Marketing Employees to
resign, effective as of the Distribution Date, from all boards of directors or
similar governing bodies of Getty or any of its Retained Subsidiaries on which
they serve, and from all positions as officers or employees of Getty or any of
its Retained Subsidiaries in which they serve, except (i) Leo Liebowitz shall
serve as a director, President and Chief Executive Officer of Getty and as a
director and Chief Executive Officer of Marketing and as an officer or director
of certain of the Marketing Subsidiaries and certain of the Retained
Subsidiaries, (ii) Milton Safenowitz shall serve as a director of Marketing and
certain of the Marketing Subsidiaries and as a director of Getty and certain of
the Retained Subsidiaries and (iii) as set forth in the Services Agreement.
Getty shall cause all of its directors and the Retained Employees to resign from
all boards of directors or similar governing bodies of Marketing or
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any of its subsidiaries on which they serve, and from all positions as officers
or employees of Marketing or any of its subsidiaries in which they serve, except
to the extent specified in the preceding sentence.
Section 6.03 Charter and Bylaws. On or prior to the Distribution Date,
Marketing shall adopt the Marketing Charter and the Marketing Bylaws, and shall
file the Marketing Charter with the Secretary of State of the State of
Maryland.
Section 6.04 Employee Stock Ownership Plan. On or prior to the
Distribution Date, Marketing shall approve and take all steps necessary to
establish the Employee Stock Ownership Plan.
Section 6.05 Certain Post-Distribution Transactions.
(a) Marketing. Marketing shall, and shall cause each of the Marketing
Subsidiaries to, comply with each representation and statement made, or to be
made, to any taxing authority in connection with any ruling obtained, or to be
obtained, by Getty Marketing acting together, from any such taxing authority
with respect to any transaction contemplated by this Agreement; neither
Marketing nor any of the Marketing Subsidiaries shall take or omit any action
inconsistent therewith, unless, (i) required to do so by law, (ii) permitted to
do so by the prior written consent of Getty, or (iii) pursuant to a favorable
supplemental ruling letter reasonably satisfactory to Getty that such act or
omission would not adversely affect the tax consequences of the Distribution to
Getty or the stockholders of Getty, as set forth in any ruling issued by any
taxing authority. Neither Marketing nor any of the Marketing Subsidiaries has a
present intention to take or omit any such action.
(b) Getty. Getty shall, and shall cause each of the Retained Subsidiaries
to, comply with each representation and statement made, or to be made, to any
taxing
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authority in connection with any ruling obtained, by Getty and Marketing
acting together, from any such taxing authority with respect to any transaction
contemplated by this Agreement; neither Getty nor any of the Retained
Subsidiaries shall take or omit any action inconsistent therewith, unless, (i)
required to do so by law, (ii) permitted to do so by the prior written consent
of Marketing, or (iii) pursuant to a favorable supplemental ruling letter
reasonably satisfactory to Marketing that such act or omission would not
adversely affect the tax consequences of the Distribution to Marketing or the
stockholders of Marketing, as set forth in any ruling issued by any taxing
authority. Neither Getty nor any of the Retained Subsidiaries has a present
intention to take or omit any such action.
Section 6.06 Corporate Name. Effective as of the Distribution Date, Getty
shall change its corporate name to "Getty Realty Corp.," either by statutory
merger or by action of the stockholders. All references to Getty herein shall
be references to such corporation both before and after such corporate name
change.
ARTICLE VII
ACCESS TO INFORMATION AND SERVICES
Section 7.01 Provision of Corporate Records.
(a) Except as may otherwise be provided in a Related Agreement, Getty shall
arrange as soon as practicable following the Distribution Date, to the extent
not previously delivered in connection with the transactions contemplated in
Article II, for the transportation (at Marketing's cost) to Marketing of the
Marketing Books and Records in its possession, except to the extent such items
are already in the possession of Marketing or a Marketing Subsidiary. Such
Marketing Books and Records shall be the property of
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Marketing, but shall be available to Getty for review and duplication until
Getty shall notify Marketing in writing that such records are no longer of use
to Getty.
(b) Except as otherwise provided in a Related Agreement, Marketing shall
arrange as soon as practicable following the Distribution Date, to the extent
not previously delivered in connection with the transactions contemplated in
Article II, for the transportation (at Getty's cost) to Getty of the Getty Books
and Records in its possession, except to the extent such items are already in
the possession of Getty. The Getty Books and Records shall be the property of
Getty, but shall available to Marketing for review and duplication until
Marketing shall notify Getty in writing that such records are no longer of use
to Marketing.
Section 7.02 Access to Information. Except as otherwise provided in a
Related Agreement, from and after the Distribution Date, Getty shall afford to
Marketing and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to persons or firms possessing information) and duplicating rights
during normal business hours to all records, books, contracts, instruments,
computer data, software and systems and other data and information relating to
pre-Distribution operations (collectively, "Information") within Getty's
possession insofar as such access is reasonably required by Marketing for the
conduct of its business, subject to appropriate restrictions for classified or
Privileged Information. Similarly, except as otherwise provided in a Related
Agreement, Marketing shall afford to Getty and its authorized accountants,
counsel and other designated representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Marketing's possession, insofar as such is reasonably required by
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Getty for the conduct of its business, subject to appropriate restrictions for
classified or Privileged Information. Information may be requested under this
Article VII for the legitimate business purposes of either party, including
without limitation, audit, accounting, claims (including claims for
indemnification hereunder), litigation and tax purposes, as well as for purposes
of fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
Section 7.03 Production of Witnesses. At all times from and after the
Distribution Date, each of Marketing and Getty shall use reasonable efforts to
make available to the other, upon written request, its and its subsidiaries'
officers, directors, employees and agents as witnesses to the extent that such
persons may reasonably be required in connection with any Action.
Section 7.04 Reimbursement. Except to the extent otherwise contemplated
in any Related Agreement, a party providing Information or witness services to
the other party under this Article VII shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments of such amounts,
relating to supplies, disbursements and other out-of-pocket expenses (at cost)
and direct and indirect expenses of employees who are witnesses or otherwise
furnish assistance (at cost), as may be reasonably incurred in providing such
Information or witness services.
Section 7.05. Retention of Records. Except as otherwise required by law or
agreed to in a Related Agreement or otherwise in writing, each of Getty and
Marketing may destroy or otherwise dispose of any of the Information (including
information that is material Information and is not contained in other
Information retained by Getty or Marketing, as the case may be) at any time
after the tenth anniversary of this Agreement, provided that, prior
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to such destruction or disposal, (a) it shall provide no less than 90 or more
than 120 days prior written notice to the other, specifying in reasonable detail
the Information proposed to be destroyed or disposed of and (b) if a recipient
of such notice shall request in writing prior to the scheduled date for such
destruction or disposal that any of the Information proposed to be destroyed or
disposed of be delivered to such requesting party, the party proposing the
destruction or disposal shall promptly arrange for the delivery of such of the
Information as was requested at the expense of the party requesting such
Information.
Section 7.06 Confidentiality. Each of Getty and its Subsidiaries on the
one hand, and Marketing and its Subsidiaries on the other hand, shall hold, and
shall cause its consultants advisors to hold, in strict confidence, all
Information concerning the other in its possession or furnished by the other or
the other's representatives pursuant to this Agreement (except to the extent
that such Information has been (i) in the public domain through no fault of such
party or (ii) later lawfully acquired from other sources by such party), and
each party shall not release or disclose such Information to any other person,
except its auditors, attorneys, financial advisors, rating agencies, bankers and
other consultants and advisors, unless compelled to disclose by judicial or
administrative process or, as reasonably advised by its counsel, by other
requirements of law, or unless such Information is reasonably required to be
disclosed in connection with (x) any litigation with any third-parties or
litigation between the Getty Group and the Marketing Group, (y) any contractual
agreement to which the Getty Group or the Marketing Group are currently parties,
or (z) in exercise of either parties' rights hereunder.
Section 7.07 Privileged Matters. Getty and Marketing recognize that legal
and other professional services that have been and will be provided prior to the
Distribution
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Date have been and will be rendered for the benefit of both the Getty Group and
the Marketing Group and that both the Getty Group and the Marketing Group should
be deemed to be the client for the of asserting all Privileges. To allocate the
interests of each party in the Privileged Information, the parties agree as
follows:
(a) Getty shall be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Privileged Information which
relates solely to the Retained Business, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
Getty shall also be entitled, in perpetuity, to control the assertion or waiver
of all Privileges in connection with Privileged Information that relates solely
to the subject matter of any claims constituting Retained Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Getty, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
(b) Marketing shall be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Privileged Information which
relates solely to the Marketing Business, whether or not the Privileged
Information is in the possession of or under the control of Getty or Marketing.
Marketing shall also be entitled, in perpetuity, to control the assertion or
waiver of all Privileges in connection with Information which relates solely to
the subject matter of any claims constituting Marketing Liabilities, now pending
or which may be asserted in the future, in any lawsuits or other proceedings
initiated against or by Marketing, whether or not the Privileged Information is
in the possession of Marketing or under the control of Getty or Marketing.
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(c) Getty and Marketing agree that they shall have a shared Privilege, with
equal right to assert or waive, subject to the restrictions in this Section
7.07, with respect to all Privileges not allocated pursuant to the terms of
Sections 7.07(a) and (b). (All Privileges relating to any claims, proceedings,
litigation, disputes, or other matters which involve both Getty and Marketing in
respect of which Getty and Marketing retain any responsibility or liability
under this Agreement, shall be subject to a shared Privilege.)
(d) No party may waive any Privilege which could be asserted under any
applicable law, and in which the other party has a shared Privilege, without the
consent of the other party, except to the extent reasonably required in
connection with any litigation with third-parties or as provided in subsection
(e) below. Consent shall be in writing, or shall be deemed to be granted unless
written objection is made within twenty (20) days after notice upon the other
party requesting such consent.
(e) In the event of any litigation or dispute between a member of the Getty
Group and a member of the Marketing Group, either party may waive a Privilege in
which the other party has a shared Privilege, without obtaining the consent of
the other party, provided that such waiver of a shared Privilege shall be
effective only as to the use of Information with respect to the litigation or
dispute between the Getty Group and the Marketing Group, and shall not operate
as a waiver of the shared Privilege with respect to third-parties.
(f) If a dispute arises between the parties regarding whether a Privilege
should be waived to protect or advance the interest of either party, each party
agrees that it shall negotiate in good faith, shall endeavor to minimize any
prejudice to the rights of the other party, and shall not unreasonably withhold
consent to any request for waiver by the
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other party. Each party specifically agrees that it will not withhold consent
to waiver for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party of any subpoena, discovery or other request
which arguably calls for the production or disclosure of Information subject to
a shared Privilege or as to which the other party has the sole right hereunder
to assert a Privilege, or if any party obtains that any of its current or former
directors, officers, agents or employees have received any subpoena, discovery
or other requests which arguably calls for the production or disclosure of such
Privileged Information, such party shall promptly notify the other party of the
existence of the request and shall provide the other party a reasonable
opportunity to review the Information and to assert any rights it may have under
this Section 7.07 or otherwise to prevent the production or disclosure of such
Privileged Information.
(h) The transfer of the Marketing Books and Records and the Getty Books and
Records and other Information between Getty and its Subsidiaries and Marketing
and its Subsidiaries, is made in reliance on the agreement of Getty and
Marketing, as set forth in Sections 7.06 and 7.07, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges. The access to information being granted pursuant to
Sections 7.01 and 7.02 hereof, the agreement to provide witnesses and
individuals pursuant to Section 7.03 hereof and the transfer of Privileged
Information between Getty and its Subsidiaries and Marketing and its
Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any
Privilege that has been or may be asserted under this Agreement or otherwise.
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ARTICLE VIII
INSURANCE
Section 8.01. Policies and Rights Included Within the Marketing Assets.
Without limiting the generality of the definition of the Marketing Assets set
forth in Section 2.02 or the effect of Section 2.02, the Marketing Assets shall
include (a) any and all rights of an insured party under each of the Shared
Policies, specifically including rights of indemnity and the right to be
defended by or at the expense of the insurer, with respect to all injuries,
losses, liabilities, damages and expenses incurred or claimed to have been
incurred on or prior to the Distribution Date by any party in or in connection
with the conduct of the Marketing Business or, to the extent any claim is made
against Marketing or any of its subsidiaries, the Retained Business, and which
injuries, losses, liabilities, damages and expenses may arise out of insured or
insurable occurrences or events under one or more of the Shared Policies;
provided, however, that except as provided in Section 8.05 below, nothing in
this clause shall be deemed to constitute (or to reflect) the assignment of the
Shared Policies, or any of them, to Marketing and (b) the Marketing Policies.
Section 8.02 Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person, corporation, firm or entity shall assert a claim
against Marketing or any Marketing Subsidiary with respect to any injury, loss,
liability, damage or expense incurred or claimed to have been incurred prior to
the Distribution Date in or in connection with the conduct of the Marketing
Business or, to the extent any claim is made against Marketing or any of its
Subsidiaries or the Marketing Business, and which injury, loss, liability,
damage or expense may arise out of insured or insurable occurrences or events
under one or more of the Shared Policies, Getty shall at the time such claim is
asserted be
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deemed to assign, without need of further documentation, to Marketing any and
all rights of an insured party under the applicable Shared Policy with respect
to such asserted claim, specifically including rights of indemnity and the right
to be defended by or at the expense of the insurer; provided, however, that
except as provided in Section 8.05 below nothing in this sentence shall be
deemed to constitute (or to reflect) the assignment of the Shared Policies, or
any of them, to Marketing.
Section 8.03 Administration and Reserves
(a) Notwithstanding the provisions of Article III, but subject to any
contrary provisions of the Master Lease or the Services Agreement, from and
after the Distribution Date:
(i) Marketing shall be responsible for the (A) Insurance
Administration of the Marketing Policies, and (B) Claims Administration
with respect to the Marketing Liabilities; provided, that the
administration of the Marketing Policies by Marketing is in no way intended
to limit, inhibit, or preclude any right to insurance coverage for any
Insured Claim of a named insured under the Marketing Policies, including
but not limited to, Getty and any of its operations, Subsidiaries and
Affiliates;
(ii) Getty shall conduct (A) Insurance Administration of the Shared
Policies, and (B) Claims Administration with respect to the Retained
Liabilities; provided that the administration of the Shared Policies by
Getty is in no way intended to limit, inhibit, or preclude any right to
insurance coverage for any Insured Claim of a named insured under the
Shared Policies, including but not limited to, Marketing and any of its
operations, subsidiaries and Affiliates;
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(iii) Marketing shall be entitled to any reserves established by Getty
or any of its Subsidiaries, or the benefit of reserves held by any
insurance carrier, with respect to the Marketing Liabilities; and
(iv) Getty shall be entitled to any reserves established by Getty or
any of its Subsidiaries, or the benefit of reserves held by any insurance
carrier, with respect to the Retained Liabilities.
(b) Insurance Premiums. Getty shall have the right but not the obligation
to pay the premiums, to the extent that Marketing does not pay premiums with
respect to Marketing Liabilities (retrospectively-rated or otherwise), with
respect to Shared Policies and the Retained Policies, as required under the
terms and conditions of the respective Policies, whereupon Marketing shall
forthwith reimburse Getty for that portion of such premiums paid by Getty as are
attributable to the Marketing Liabilities. Unless otherwise agreed by the
parties hereto, Getty shall purchase (subject to a 50% reimbursement by
Marketing within 15 days of its receipt of invoice) continued coverage under its
director and officer liability insurance policy for a period no longer than 180
days following the Distribution Date for claims relating to periods prior to the
Distribution Date.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received with
respect to claims, costs and expenses under the Policies shall be paid to
Marketing with respect to the Marketing Liabilities and to Getty with respect to
the Retained Liabilities. Payment of the allocable portions of indemnity costs
of Insurance Proceeds resulting from the liability policies will be made to the
appropriate party upon receipt from the insurance carrier. In the event that
the aggregate limits on any Shared Policies are exceeded, the parties agree to
provide an equitable allocation of Insurance Proceeds received after the
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<PAGE> 48
Distribution Date based upon their respective bona fide claims. The parties
agree to use their best efforts to cooperate with respect to insurance matters.
Section 8.04 Agreement for Waiver of Conflict and Shared
Defense. In the event that Insured Claims of both Marketing and Getty exist
relating to the same occurrence, Marketing and Getty agree to jointly defend
and to waive any conflict of interest necessary to the conduct of that joint
defense. Nothing in this paragraph shall be construed to limit or otherwise
alter in any way the indemnity obligations of the parties to this Agreement,
including those created by this Agreement, by operation of law or otherwise.
Section 8.05 Surety Bonds. Schedule 8.05 sets forth the
surety bonds posted by the Getty Group to secure obligations for state motor
fuel licenses (the "Surety Bonds"). Marketing shall use its reasonable best
efforts to replace such Surety Bonds with bonds posted by Marketing. Prior to
the replacement of such Surety Bonds the parties' respective obligations with
respect to such Surety Bonds shall be as follows: (i) the parties shall keep
such Surety Bonds in place after the Distribution to secure obligations
relating to periods preceding the Distribution Date for such time as may be
required by law, (ii) the obligations secured by the Surety Bonds will remain a
direct obligation of Getty; provided, however, that Marketing shall be
responsible for payment of all such obligations constituting Marketing
Liabilities (and shall reimburse Getty for any payment made directly by Getty
with respect to such Marketing Liabilities) and Getty shall be responsible for
all such obligations constituting Retained Liabilities (and shall reimburse
Marketing for any payments made directly by Marketing on behalf of such
Retained Liabilities), consistent with the allocation of Marketing Liabilities
and Retained Liabilities set forth herein; (iii) Marketing shall execute a
guarantee pursuant to which Marketing will guarantee 100% of the obligations
secured by such Surety
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<PAGE> 49
Bonds (subject to reimbursement by Getty for any payments made by Marketing
with respect to Retained Liabilities) and (iv) Marketing will reimburse Getty
for Marketing's pro rata share of any premiums required to be paid to keep such
Surety Bonds outstanding.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Complete Agreement; Construction. This
Agreement, including the Schedules and Exhibits and the Related Agreements and
other agreements and documents referred to herein, shall constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and shall supersede all previous negotiations, commitments and writings
with respect to such subject matter. Notwithstanding any other provisions in
this Agreement to the contrary, in the event and to the extent that there shall
be a conflict between any provision of this Agreement and any provision of a
Related Agreement, then the provision in the applicable Related Agreement shall
control.
Section 9.02 Expenses. Except as otherwise set forth in
this Agreement or any Related Agreement, all costs and expenses in connection
with the preparation, execution, delivery and implementation of this Agreement,
the Distribution and with the consummation of the transactions contemplated by
this Agreement shall be charged to the party for whose benefit the expenses are
incurred, with any expenses which cannot be allocated on such basis to be split
equally between the parties.
Section 9.03 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the principles of conflicts of laws thereof.
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<PAGE> 50
Section 9.04 Notices. All notices and other
communications hereunder shall be in writing and shall be delivered by hand or
mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
To Marketing:
Getty Petroleum Marketing Inc.
125 Jericho Turnpike
Jericho, New York 11753
Attention: President
To Getty:
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
Attention: President
Section 9.05 Amendments. This Agreement may not be
modified or amended except by an agreement in writing signed by the parties.
Section 9.06 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
Section 9.07 Termination. This Agreement may be
terminated and the Distribution abandoned at any time prior to the Distribution
Date by and in the sole discretion of the Getty Board without the approval of
Marketing. In the event of such termination, no party shall have any liability
to any other party pursuant to this Agreement.
Section 9.08 Subsidiaries. Each of the parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations
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<PAGE> 51
set forth herein to be performed by any Subsidiary of such party which is
contemplated to be a Subsidiary of such party on and after the Distribution
Date.
Section 9.09 No Third-Party Beneficiaries. Except for the
provisions of Article V relating to Indemnities, this Agreement is solely for
the benefit of the parties hereto and their respective Subsidiaries and
Affiliates and should not be deemed to confer upon third- parties any remedy,
claim, Liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 9.10 Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
Section 9.11 Exhibits and Schedules. The Exhibits and
Schedules shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
Section 9.12 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.
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<PAGE> 52
9.13 Consent of Parties. The Parties hereby consent to
the jurisdiction of the New York Supreme Court, Nassau County, or the United
States District Court for the Eastern District of New York for all purposes.
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<PAGE> 53
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
GETTY PETROLEUM CORP.
By:
----------------------------------
Title:
-------------------------------
GETTY PETROLEUM MARKETING INC.
By:
----------------------------------
Title:
-------------------------------
47
<PAGE> 54
EXHIBIT A
GETTY REALTY CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 28,153 ($18,262)(a) $ 9,891
Short-term investments 535 - 535
Accounts receivable, net 2,309 - 2,309
Inventories 1,651 - 1,651
Deferred income taxes 3,269 - 3,269
Prepaid expenses and other
current assets 3,824 - 3,824
-------- --------- --------
39,741 (18,262) 21,479
Property, plant and equipment, net 97,300 - 97,300
Other assets 8,198 - 8,198
-------- --------- --------
TOTAL ASSETS $145,239 ($18,262) $126,977
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
and capital lease obligations $ 10,108 - $ 10,108
Accounts payable 2,689 - 2,689
Accrued expenses 22,999 - 22,999
Gasoline taxes payable 77 - 77
-------- --------- --------
Total current liabilities 35,873 - 35,873
Long-term debt 15,652 - 15,652
Obligations under capital leases 18,153 - 18,153
Deferred income taxes 4,173 - 4,173
Other, principally deposits 1,187 - 1,187
Stockholders' equity 70,201 ($18,262)(a) 51,939
-------- --------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $145,239 ($18,262) $126,977
======== ======== ========
</TABLE>
The unaudited pro forma consolidated balance sheet has been derived from the
historical financial statements of Getty Realty Corp. and reflects certain pro
forma adjustments as if the Distribution had been effected as of October 31,
1996.
(a) Represents cash to be transferred to Marketing in an amount
sufficient to provide Marketing with net working capital of approximately $1.1
million in accordance with the Distribution Agreement.
<PAGE> 55
EXHIBIT D
GETTY PETROLEUM MARKETING INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 31, 1996
(in thousands)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents...................................... $ 937 $ 18,262(a) $ 19,199
Accounts receivable, net.................................. 13,559 -- 13,559
Inventories............................................... 20,275 -- 20,275
Deferred income taxes..................................... 1,657 -- 1,657
Prepaid expenses and other current assets................. 2,674 -- 2,674
-------- -------- --------
Total current assets................................... 39,102 18,262 57,364
Property and equipment, net................................. 87,614 -- 87,614
Other assets................................................ 2,163 -- 2,163
-------- -------- --------
TOTAL ASSETS........................................... $ 128,879 $ 18,262 $ 147,141
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 28,821 $ -- $ 28,821
Accrued expenses.......................................... 11,247 -- 11,247
Gasoline taxes payable.................................... 16,196 -- 16,196
-------- -------- --------
Total current liabilities.............................. 56,264 -- 56,264
Deferred income taxes....................................... 14,125 -- 14,125
Other, principally deposits................................. 14,463 -- 14,463
Stockholders' equity........................................ 44,027 18,262(a) 62,289
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............. $ 128,879 $ 18,262 $ 147,141
======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated balance sheet.
<PAGE> 56
EXHIBIT F
#58752
JERICHO OFFICE SPACE LICENSE AGREEMENT
AGREEMENT made this 1st day of February, 1997 between GETTY REALTY CORP.,
formerly known as Getty Petroleum Corp., hereinafter called "Licensor", having
its principal office at 125 Jericho Turnpike, Jericho, New York 11753 and GETTY
PETROLEUM MARKETING INC., hereinafter called "Licensee", with an office at 125
Jericho Turnpike, Jericho, New York 11753.
RECITAL:
On February 23, 1987, Licensor, as Tenant, entered into a lease with Donald E.
Axinn, as Landlord, hereinafter called "Landlord", for certain office space in
the building located at 125 Jericho Turnpike, Jericho, New York 11753,
hereinafter called the "Lease", and such Lease has been subsequently amended.
Licensee acknowledges receipt of the Lease and all amendments thereto.
Licensee desires to license such premises on a joint-use basis with Licensor.
NOW, THEREFORE, For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is mutually agreed as follows:
1. Licensor hereby licenses to Licensee and Licensee hereby licenses from
Licensor the portion of the premises located at 125 Jericho Turnpike, Jericho,
New York 11753, more fully described on Schedule "A" annexed hereto and made a
part hereof, together with the equipment listed on Schedule "B" annexed hereto
and made a part hereof, pursuant to the terms, conditions and limitations set
forth herein. The premises shall be used jointly with Licensor and Licensor's
employees and invitees.
2. The term of this license, hereinafter called the "License", shall be for a
period of four (4) years and eleven (11) months, commencing on February 1,
1997, and ending on December 31, 2001, except that either party shall have the
right at any time to terminate this License upon not less than thirteen (13)
months notice to the other party. In the event that Licensee is the
terminating party, Licensee shall pay to Licensor, upon the effective date of
termination, an amount equal to 90% of the amount to be paid by Licensor to
Landlord under Paragraph "7(b)" of the Lease. In the event that Licensor is
the terminating party, Licensor shall pay 100% of such amount owed to Landlord.
In the event that Licensor is the terminating party, Licensee shall have the
option subject to Landlord's consent, to continue to remain in occupancy of the
office space, and Licensor shall use its best efforts to obtain Landlord's
consent to the assignment of the Lease to Licensee or to the subletting of the
office space to Licensee. If such consent is obtained Licensor shall be
relieved from the obligation to pay the amount due under Paragraph "7(b)" of
the Lease. Licensee shall be solely responsible for any obligations under the
Lease thereafter, including, without limitation, early termination penalties.
3. Licensee shall pay the following consideration (the "Consideration") for
the use of said premises:
$36,500.00 per month plus the amount due each month pursuant to Paragraph
"4" hereof.
The Consideration shall be paid in advance on the first day of each
calendar month, without
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<PAGE> 57
notice or demand and without any set off or deduction whatsoever. Licensee
agrees that the Consideration shall be payable in monthly installments and that
if any monthly installment thereof shall be due and unpaid for ten (10) days
after notice of such default has been delivered to Licensee, Licensor shall
then have the right to terminate this License and pursue its remedies at equity
or law, including eviction, ejectment or dispossess, under Paragraph "21"
hereof or otherwise. At Licensor's option, Consideration, additional
Consideration and any other sums due and owing under this License shall be paid
by electronic wire transfer of funds or by electronic funds transfer. Licensee
shall execute and deliver to Licensor such forms or authorizations as may be
necessary for electronic wire transfers or electronic funds transfers.
4. Licensee shall pay to Licensor monthly, as additional Consideration, (i)
90% all taxes and sewer assessments which shall be imposed or assessed upon,
Licensor as Tenant under the Lease, and (ii) 90% of Licensor's share of
operating expenses under the Lease. Licensee shall be responsible for the
payment of all personal property taxes, if any, to the appropriate taxing
authority.
5. Licensor shall pay directly to the appropriate authority, all sewer charges
(other than assessments) and all charges for gas, electricity, telephone, heat
and hot water, provided, however, if Licensee increases Licensor's use of any
utility in any material respect, Licensee shall pay, as additional
Consideration, the incremental cost of such utility to Licensor.
6. Licensor shall provide to Licensee the insurance coverage in the same
manner and amounts set forth in the Lease between Licensor, as Tenant, and
Donald E. Axinn, as Landlord, dated February 23, 1987.
7. Subject to such uses being lawful, Licensee shall use and occupy the
premises for general office purposes, in compliance with the Lease and all
zoning regulations, the building code and all applicable laws, rules and
regulations. Licensee must obtain, at its own expense, all government licenses
or permits required for the lawful conduct of Licensee's business on the
premises and Licensee will, at all times, comply with the terms of such
licenses or permits.
8. Licensee shall not use the premises, or any part thereof, for any other use
not provided for in paragraph "7" hereof, without Licensor's prior written
consent.
9. Subject to the terms of the Lease, Licensor, at its expense, shall make
structural repairs deemed necessary by it to keep the premises in good
operating condition, provided that repairs are due to ordinary wear or to
damage by the elements and without any abatement of Consideration for the
interruption caused thereby.
10. Licensor shall also, at its expense, maintain the premises and the
equipment included on Schedule "B" in good, safe and operating condition and
promptly make all repairs or replacements which are not the responsibility of
Landlord under the Lease or of Licensee or are occasioned by the negligence or
misconduct of its employees, agents and customers, which repairs or
replacements shall be in quality and class equal to or better than the work or
installations existing at the time that the damage or injury occurred.
Licensee shall commit no act of waste to the premises or improvements.
11. If Licensee shall fail to comply with its obligations under the last
sentence of paragraph "10" hereof,
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Licensor or its agent may enter upon any portion of the premises occupied by
Licensee in order to take such remedial action as is necessary and may charge
the cost of repair to Licensee as additional Consideration due with Licensee's
next monthly installment of Consideration. Licensee's failure to pay such
charges shall be treated as a failure to pay Consideration when due and subject
to the same remedies.
12. Licensor shall not be required to render any services to Licensee or to
make any repairs or replacements to the premises except those specifically
described in this License.
13. Licensor and Licensee agree that this License is only a license and shall
not be construed as a sublease, or confer any rights of a sublease.
14. This License is subject and subordinate to the Lease and to all mortgages
or other security instruments which may now or hereafter affect this License or
the premises, and to all renewals, modifications, consolidations, replacements
and extensions thereof. This clause shall be self-operative and no further
instrument of subordination shall be required by any ground or underlying
tenant or by any mortgagee. In confirmation of such subordination, Licensee
shall execute promptly any certificate that Licensor may request.
15. Licensee shall comply promptly with the terms of the Lease and all present
and future laws, codes and ordinances and other notices, requirements, orders,
regulations and recommendations (whatever the nature thereof) of all
governmental authorities and recommendations of the board of fire underwriters
or any insurance organizations, associations or companies in the respect to the
premises and Licensee will not knowingly do or commit, or suffer to be done or
committed anywhere in the premises, any act or thing contrary to the Lease or
any of the laws, ordinances, notices, requirements, orders, regulations and
recommendations referred to herein.
16. Licensee shall place no signs on the premises which do not relate to
Licensee's business without first obtaining Licensor's prior written consent.
All signs shall be in compliance with the Lease and all applicable laws.
Licensee shall pay the charges, if any, for all sign permits.
17. Licensee agrees that it will take no action that would violate the
provisions of the Lease.
18. (a) Licensee shall quit and surrender peaceably and quietly, to Licensor,
its agent or attorney, possession of the premises at the expiration or other
termination of this License, in good condition, except for ordinary wear and
tear. If upon termination of this License or abandonment of the premises by
Licensee, Licensee abandons or leaves any personal property or equipment at the
premises, such equipment or property shall be conclusively deemed abandoned and
Licensor shall have the right, without notice to Licensee, to store or
otherwise dispose of the property or equipment at Licensee's sole cost, expense
and risk, without being liable in any respect to Licensee. Licensee agrees
that any such disposition by Licensor shall be conclusively deemed to be
commercially reasonable.
(b) If Licensee holds over or remains in possession of the premises
after the expiration of the term of the License, or after any prior termination
thereof, without any written agreement being made or entered into between
Licensor and Licensee, such holding over or continued possession shall be
deemed
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<PAGE> 59
to be a license from month to month at a monthly Consideration equal to two (2)
times the then last monthly installments payable during the term, and otherwise
upon the terms and conditions of this License, and such license shall be
terminable at the end of any month by either party upon written notice
delivered to the other party at least thirty (30) days prior to the end of such
month. Nothing herein shall be construed as to permit Licensee to hold over or
remain in possession beyond the expiration or termination of the Lease.
19. Licensee shall not do any act, or make any contract, which may create or
be a foundation for any lien (including mechanics or materialman's liens) or
other encumbrance upon any interest of Landlord or Licensor in the premises.
If any such lien be filed, Licensee, within fifteen (15) days or as soon as
reasonably possible after notice of filing shall cause any such lien or
encumbrance to be discharged of record.
20. Licensee shall make no additions, changes, alterations or improvements to
the premises without first submitting detailed plans and specifications and
obtaining Licensor's prior written consent. Any alterations or additions to
any buildings or permanent improvements authorized by Licensor shall be made in
a good, workmanlike manner, in compliance with all applicable laws, rules and
regulations and at Licensor's option shall upon installation become the
property of Licensor and Licensee shall have no right or interest therein
except to continue to use same during the remainder of the term of this
License. At the request of Licensor, Licensee shall at its own cost and
expense remove all alterations, improvements, and additions not acceptable to
or desired by Licensor, from the premises and Licensee shall repair all damage
caused by such installation and removal. Any costs incurred by Licensor in
removing or disposing of fixtures or repairing damage shall be additional
Consideration due hereunder.
21. Licensor and Licensee agree that each of the provisions of this License is
a material and substantial condition of the agreement between the parties
relating to the license for use of the premises. Licensor may immediately
terminate this License, upon two (2) days written notice, upon the failure of
Licensee to cure a default within ten (10) days of notice of default from
Licensor, and in any manner resume full possession of the premises; in the
event the Licensee does not comply with any one of the terms and conditions of
this License, the Lease, or upon any grounds provided in any applicable law,
statute, rule or regulation including by way of illustration but not limited to
the happening of the following event:
a) If any insolvency or receivership proceedings are instituted by or
against Licensee or Licensee makes any general assignment for the benefit of
creditors, or a receiver or trustee is appointed for Licensee or for any of
Licensee's assets, or a judgment is entered against Licensee, or if any
attachment, execution or like process is issued against the Licensee or any of
Licensee's assets.
22. In the event of any default by Licensee, re-entry by Licensor, expiration
or termination of this License or dispossess by summary proceeding or
otherwise, Licensee shall be responsible for the following:
a) Consideration up to the time of such re-entry, dispossess or
expiration of the term of this License;
b) Consideration for the balance of the full term, all of which shall be
accelerated and due
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<PAGE> 60
and payable as of the date of default, re-entry by Licensor, termination
of this License or entry of a judgment of possession, whichever date
first occurs;
c) The payment of all sums incurred by Licensor in putting the premises
in good order or preparing the same for re-licensing, including brokerage
and advertising fees;
d) Reasonable attorney's fees and expenses resulting from Licensor
enforcing any of the remedies described above, or in the enforcement of
this License or in defending any claim brought against Licensor by
Licensee against which Licensor successfully defends; and
e) In addition, Licensor shall have such other remedies as are then
available to it by law. Licensor is under no obligation to mitigate
damages.
No right or remedy granted or reserved unto Licensor hereunder shall be
deemed to be exclusive of any other or additional right or remedy available to
Licensor at law or in equity or under statute.
23. Licensee shall not assign, sub-license, pledge, mortgage or otherwise
transfer the premises, or any part thereof, without first obtaining Licensor's
written consent which consent Licensor may, in its sole discretion, withhold
with or without cause. In the event of any such assignment or sub-licensing,
by new license agreement or otherwise, Licensee shall continue to remain
jointly and severally liable with its transferee to Licensor for the
performance of all of Licensee's obligations for the remainder of the term of
this License.
24. This License is subject and subordinate to all of the terms, provisions
and conditions of the Lease with Landlord, and if such Lease shall be
cancelled or terminated, this License shall be automatically terminated or
cancelled, without any liability on the part of Licensor to Licensee.
25. The parties hereto waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other (except
for personal injury or property damage) on any matters whatsoever arising out
of or in any way connected with this License, the relationship of Licensor and
Licensee, Licensee's use of or occupancy of the premises, or any other
statutory remedy. In the event Licensor or Landlord commences any dispossess
proceeding for possession of the premises, Licensee will not interpose any
counterclaim of any nature or description in such proceeding.
26. Licensee agrees to defend, indemnify and hold Licensor and Landlord,
their affiliates, officers, directors, employees and agents harmless from and
against any and all losses, claims, demands, suits, actions, judgments, fines
or payments for, or in connection with, any accident, injury or damage
whatsoever caused to any person or property arising, directly or indirectly,
out of the business conducted at the premises or on any of the sidewalks
adjoining the same, or arising, directly or indirectly, from any violation of
any law, agency ruling or regulation, or from any act or omission of Licensee
or any sublicensee and their respective, servants, agents, customers, employees
or contractors, and from and against all costs, expenses and liabilities
incurred in connection with any such claim or proceeding brought thereon.
Licensee's obligations under this paragraph shall survive expiration or
termination of this License. Licensor shall have no responsibility whatsoever
for any damage, vandalism or theft of
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<PAGE> 61
Licensee's property.
27. Licensee agrees that the liability of the Licensor under this License and
all matters pertaining to or arising out of the License and the use and
occupancy of the licensed premises, shall be limited to Licensor's interest in
the premises, and in no event shall Licensee make any claim against or seek to
impose any personal liability upon any individual, general or limited partner
of any partnership, or principal of any firm or corporation that may now or
hereafter become the Licensor.
28. If the whole or any substantial part of the premises shall be acquired or
condemned by eminent domain or for any public or quasi-public use or purpose,
then, and in that event, the term of this License shall cease and terminate
from the date of title vesting and Licensee shall have no claim against
Licensor for the value of any unexpired term of this License. No part of any
award shall belong to Licensee.
29. Should any of Licensee's checks, electronic wire transfers or electronic
funds transfers be dishonored, stopped or returned for any reason after
delivery or transfer to Licensor, Licensee agrees to pay to Licensor an
administrative service charge equal to the greater of $50.00 or three (3%)
percent of the amount of any such check or attempted transfer, to cover
Licensor's costs and expenses. Any money owed by Licensee to Licensor after
the due date shall bear interest at the rate of the lesser of 1 1/2% per month
(18% annual percentage rate), or the maximum interest rate permitted by law.
30. Licensor does not, in any way, represent or warrant the fitness of the
premises for the use contemplated by Licensee and it shall be Licensee's
obligation to make same fit at its sole cost and expense. Licensee
acknowledges that it has inspected the premises and accepts the same in its
present condition "AS IS".
31. Licensee warrants and represents to Licensor that it has dealt with no
broker, real estate salesman, or person acting as broker or finder, in
connection with this License. Licensee shall defend, indemnify and hold
harmless Licensor of and from any and all claims, liabilities and/or damages
which are based upon a claim by any broker, person, firm, or corporation for
brokerage commission and/or other compensation by reason of having dealt with
Licensee. The provisions hereof shall survive the expiration or termination of
this License.
32. All notices and other communications which are required shall be given by
hand or by Certified Mail, Return Receipt Requested, to the parties at their
respective addresses first written above, or to the Licensee at the premises or
to such other address as either party may designate by hand or like Certified
Mail. Any such notice shall take effect at the time of the mailing thereof.
33. Licensor's right to require strict performance shall not be affected by
any previous waiver or course of dealings.
34. Licensor shall not be liable for failure to give possession of the
premises upon the commencement date by reason of the fact that the premises are
not ready for occupancy or because a prior licensee or any other person is
wrongfully holding over or is in wrongful possession, or for any other reason.
The
Consideration shall not commence until possession is given or is available, but
the term herein shall not
6
<PAGE> 62
be extended.
35. This License shall be binding upon and inure to the benefit of the parties
hereto, their respective heirs, successors and assigns.
36. No waiver, modification, change or alteration of the provisions of this
License, or any of the rights or remedies of either of the parties hereto shall
be valid, unless such waiver, modification, change or alteration is in writing,
and signed by the party against whom enforcement is sought.
37. This License shall be construed in accordance with the laws of the State
of New York.
38. In the event any provision of this License is declared illegal, invalid,
or unenforceable or contrary to law, it shall not affect any other part.
39. The parties have set forth in this License their entire understanding
relating to the premises, there is no other agreement or understanding between
the parties relating to the premises, except as expressly set forth herein.
40. Licensee has fully read this License before signing same and is in full
agreement with its terms. The person signing this License on behalf of
Licensee certifies that he/she is authorized by Licensee to execute this
License on behalf of Licensee and to bind Licensee to its terms.
41. Licensee shall not record this License or any notice or memorandum
thereof.
GETTY REALTY CORP.
______________________ By: ______________________________
Witness President, Licensor
GETTY PETROLEUM MARKETING INC.
______________________ By: ______________________________
Witness President, Licensee
7
<PAGE> 63
SCHEDULE 1.01(a)
Environmental Liabilities
NON-INVEST-ENVIRONMENTAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
95141 MILLSTONE NJ
96904 MIDDLETOWN RI
97126 HAZLETON PA
97192 EDDINGTON PA
98326 BRONXVILLE NY
98351 NANUET NY
98440 WEST HURLEY NY
98442 S. DURHAM NY
98444 GANESVOORT NY
98455 TIVOLI NY
98461 SAUGERTIES NY
98535 ELMHURST NY
98967 BRONX NY
13 sites
1
<PAGE> 64
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
7 JAMAICA NY
8 REGO PARK NY
16 OZONE PARK NY
17 BROOKLYN NY
20 BRONX NY
22 CORONA NY
24 BRONX NY
38 OCEANSIDE NY
54 BRIGHTWATERS NY
61 MIDDLE ISLAND NY
74 WHITE PLAINS NY
75 WHITE PLAINS NY
77 NEW ROCHELLE NY
78 YONKERS NY
79 HARTSDALE NY
82 OSSINING NY
91 ELMSFORD NY
93 PELHAM MANOR NY
100 MAHWAH NJ
101 VALLEY COTTAGE NY
102 PEEKSKILL NY
103 PORT CHESTER NY
104 LARCHMONT NY
110 MEDFORD NY
111 BRONX NY
114 BRONX NY
115 BRONX NY
116 ELMSFORD NY
117 MAMARONECK NY
121 YONKERS NY
126 BROOKLYN NY
128 BROOKLYN NY
138 YONKERS NY
146 MAHOPAC NY
157 POUGHKEEPSIE NY
159 CARMEL NY
160 MARLBORO NY
163 LAKE KATRINE NY
169 WAPPINGERS FALLS NY
174 STONY POINT NY
177 HIGHLAND NY
178 KINGSTON NY
179 POUGHKEEPSIE NY
181 HOWARD BEACH NY
182 LAGRANGEVILLE NY
186 BRONX NY
195 STATEN ISLAND NY
200 S. ISLAND NY
210 BRONX NY
214 JAMAICA NY
2
<PAGE> 65
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
218 MIDDLE VILLAGE NY
219 LONG ISLAND CITY NY
223 BROOKLYN NY
225 ROCKAWAY PARK NY
228 BROOKLYN NY
229 BROOKLYN NY
234 STATEN ISLAND NY
235 S. ISLAND NY
240 SPRINGFIELD GDNS. NY
252 MT. VERNON NY
254 NORTH BRUNSWICK NJ
257 BRONX NY
258 BRONX NY
261 BRONX NY
264 BRONX NY
266 BRONX NY
268 BRONX NY
270 BRONX NY
271 BRONX NY
272 BRONX NY
275 BRONX NY
276 BRONX NY
277 BRONX NY
278 YONKERS NY
288 ATLANTIC HIGHLANDS NJ
301 N. TARRYTOWN NY
304 OLD BRIDGE NJ
307 BREWSTER NY
312 FLUSHING NY
319 MAHWAH NJ
322 VALLEY COTTAGE NY
323 BRONX NY
324 S. ISLAND NY
325 BRIARCLIFF MANOR NY
326 BRONX NY
329 BRONX NY
331 BRONX NY
332 BRONX NY
334 BROOKLYN NY
336 BROOKLYN NY
339 NEW YORK NY
340 NEW YORK NY
341 NEW YORK NY
342 GLENDALE NY
343 OZONE PARK NY
344 LIC NY
357 N. BABYLON NY
358 PELHAM NY
360 SMITHTOWN NY
361 ASTORIA NY
3
<PAGE> 66
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
362 S. ISLAND NY
363 CEDARHURST NY
366 LAKE RONKONKOMA NY
370 KEYPORT NJ
377 NEW CITY NY
379 W. HAVERSTRAW NY
396 STATEN ISLAND NY
411 BROOKLYN NY
421 BROOKLYN NY
425 W. ISLIP NY
429 RONKONKOMA NY
444 BAYSHORE NY
460 BETHPAGE NY
523 TOMS RIVER NJ
535 N. BABYLON NY
544 WHITE PLAINS NY
545 SAUGERTIES NY
546 WOODSIDE NY
547 OZONE PARK NY
548 HICKSVILLE NY
549 BRONX NY
561 S. ISLAND NY
564 BROOKLYN NY
568 LIC NY
570 WHITE PLAINS NY
571 N. WHITE PLAINS NY
572 HAWTHORNE NY
573 PLEASANTVILLE NY
574 PATTERSON NY
576 YONKERS NY
577 YONKERS NY
578 RYE NY
579 OSSINING NY
580 BRANFORD CT
581 BRIDGEPORT CT
583 COVENTRY CT
587 FRANKLIN CT
589 MANCHESTER CT
590 MERIDEN CT
595 NEW MILFORD CT
596 NORTH HAVEN CT
598 NORWICH CT
600 WAUREGAN CT
604 TERRYVILLE CT
607 UNION CITY CT
611 WATERFORD CT
613 WESTPORT CT
615 WOODBRIDGE CT
619 AGAWAM MA
624 GRANBY MA
4
<PAGE> 67
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
625 GREAT BARRINGTON MA
628 MONSON MA
633 PITTSFIELD MA
635 SOUTH HADLEY MA
637 SPRINGFIELD MA
638 SPRINGFIELD MA
647 OSSINING NY
649 BROOKLYN NY
660 LAKEWOOD NJ
667 PARAMUS NJ
673 PLEASANTVILLE NJ
676 GLEN HEAD NY
677 NEW ROCHELLE NY
679 TORRINGTON CT
680 N. BRANFORD CT
685 DOBBS FERRY NY
687 WOLCOTT CT
688 PLAINVILLE CT
709 BROOKLYN NY
751 FAIRLESS HILLS PA
752 PHILADELPHIA PA
6130 NEW HAVEN CT
6722 BLOOMFIELD CT
6725 SIMSBURY CT
6742 RIDGEFIELD CT
6743 BRIDGEPORT CT
6744 NORWALK CT
6746 BRIDGEPORT CT
6748 BRIDGEPORT CT
6749 BRIDGEPORT CT
6751 BRIDGEPORT CT
6753 BRIDGEPORT CT
6754 BRIDGEPORT CT
6756 BRIDGEPORT CT
6762 DARIEN CT
6764 WESTPORT CT
6765 STAMFORD CT
6766 HAMDEN CT
6768 STAMFORD CT
6772 COS COB CT
6776 STRATFORD CT
6777 MILFORD CT
6778 STRATFORD CT
6782 FAIRFIELD CT
6811 BRISTOL CT
6813 BROOKFIELD CT
6817 TORRINGTON CT
6819 NORWALK CT
6826 HARTFORD CT
6831 NEW HAVEN CT
5
<PAGE> 68
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
6836 BRIDGEPORT CT
6837 WILTON CT
6850 W. HARTFORD CT
6853 ENFIELD CT
6862 STRATFORD CT
6864 EAST HARTFORD CT
6871 AVON CT
8608 WILMINGTON DE
8635 NEW CASTLE DE
8637 ST. GEORGES DE
8641 WILMINGTON DE
8667 NEWARK DE
8669 WILMINGTON DE
28206 LISBON ME
28215 WESTBROOK ME
28226 WINDHAM ME
28231 AUGUSTA ME
29721 BALTIMORE MD
29763 RANDALLSTOWN MD
30161 MILFORD MA
30315 S. WEYMOUTH MA
30326 GARDNER MA
30327 STOUGHTON MA
30332 METHUEN MA
30344 RANDOLPH MA
30351 ROCKLAND MA
30352 WATERTOWN MA
30363 WEYMOUTH MA
30374 DEDHAM MA
30375 HINGHAM MA
30392 ASHLAND MA
30409 HYDE PARK MA
30412 PITTSFIELD MA
30436 WORCESTER MA
30438 NEW BEDFORD MA
30439 TAUNTON MA
30466 CLINTON MA
30468 FOXBORO MA
30472 GROVELAND MA
30488 HYANNIS MA
30506 HOLYOKE MA
30518 GROVELAND MA
30524 FALMOUTH MA
30537 SOMERSET MA
30545 METHUEN MA
30546 ROCKLAND MA
30548 WILLIAMSTOWN MA
30551 FAIRHAVEN MA
30552 BELLINGHAM MA
30558 SEEKNOK MA
6
<PAGE> 69
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
30559 WALPOLE MA
30561 N. ANDOVER MA
30562 WESTFORD MA
30600 LOWELL MA
30601 FRAMINGHAM MA
30602 AUBURN MA
30603 METHUEN MA
30604 AMESBURY MA
30605 GEORGETOWN MA
30606 IPSWICH MA
30607 SALISBURY MA
30609 BEVERLY MA
30611 HAVERHILL MA
30612 CHATHAM MA
30618 LOWELL MA
30619 METHUEN MA
30621 NEWBURYPORT MA
30623 ORLEANS MA
30624 PEABODY MA
30627 SALEM MA
30629 TEWKSBURY MA
30630 TWIN MILL (WAREHAM) MA
30631 FALMOUTH MA
30632 W. YARMOUTH MA
30633 WESTFORD MA
30635 YARMOUTH MA
30636 BRIDGEWATER MA
30644 CANTON MA
30646 STOUCHTON MA
30651 WORCESTER MA
30652 AUBURN MA
30653 BARRE MA
30654 WORCESTER MA
30655 BROCKTON MA
30656 MILLBURY MA
30658 WORCESTER MA
30660 DUDLEY MA
30663 WORCESTER MA
30664 HYANNIS MA
30665 LEOMINSTER MA
30666 WORCESTER MA
30668 WORCESTER MA
30669 NORTH BOROUGH MA
30670 POCASSET MA
30671 CLINTON MA
30672 W. BOYLSTON MA
30673 WORCESTER MA
30674 SOUTHBRIDGE MA
30675 WORCESTER MA
30676 S. YARMOUTH MA
7
<PAGE> 70
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
30677 STERLING MA
30679 WORCESTER MA
30680 FRAMINGHAM MA
30682 WAREHAM MA
30683 WESTBOROUGH MA
30684 HARWICHPORT MA
30685 WORCESTER MA
30686 WORCESTER MA
30687 FITCHBURG MA
30688 WORCESTER MA
30689 CHERRY VALLEY MA
30690 FRAMINGINGHAM MA
30692 SOUTHBRIDGE MA
30693 OXFORD MA
30694 WORCESTER MA
30696 FITCHBURG MA
30697 WORCESTER MA
30700 FRAMINGHAM MA
30702 MILFORD MA
30704 UXBRIDGE MA
30710 WORCESTER MA
55211 DERRY NH
55234 PLAISTOW NH
55235 GILFORD NH
55236 SOMERSWORTH NH
55237 SALEM NH
55238 LONDONDERRY NH
55239 ROCHESTER NH
55241 HAMPTON NH
55245 NASHUA NH
55246 PELHAM NH
55247 PEMBROKE NH
55249 ROCHESTER NH
55250 ROCHESTER NH
55251 SALEM NH
55252 SEABROOK NH
55253 SOMERSWORTH NH
55254 EXETER NH
55256 CANDIA NH
55257 EPPING NH
55258 EPSOM NH
55261 MILFORD NH
55264 PORTSMOUTH NH
55265 PORTSMOUTH NH
55267 SALEM NH
55268 SEABROOK NH
56003 MCAFEE NJ
56005 HAMBURG NJ
56009 WEST MILFORD NJ
56028 WILLINGBORO NJ
8
<PAGE> 71
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
56039 NUTLEY NJ
56046 TOMS RIVER NJ
56051 WALL TOWNSHIP NJ
56056 UNION NJ
56062 CRANBURY NJ
56064 SPOTSWOOD NJ
56065 NEW BRUNSWICK NJ
56075 ELIZABETH NJ
56079 BAYONNE NJ
56084 BASKING RIDGE NJ
56086 DEPTFORD NJ
56088 SEWELL NJ
56101 TRENTON NJ
56102 LODI NJ
56113 SPRING LAKE NJ
56116 CLIFTON NJ
56117 SEWELL NJ
56132 ASBURY PARK NJ
56142 PATERSON NJ
56149 BRICK TOWNSHIP NJ
56156 OCEAN CITY NJ
56157 WHITING NJ
56169 MONTVALE NJ
56215 NEPTUNE NJ
56230 NEWARK NJ
56251 NESHANIC STATION NJ
56253 PINE HILL NJ
56258 TUCKERTON NJ
56260 W. DEPTFORD NJ
56262 ATCO NJ
56263 SOMERVILLE NJ
56271 MATAWAN NJ
56276 FORT LEE NJ
56803 BERGENFIELD NJ
56809 RAHWAY NJ
56815 LINDEN NJ
56818 BLOOMFIELD NJ
56821 SOUTH ORANGE NJ
56844 NUTLEY NJ
56852 ENGLEWOOD NJ
56868 CLIFTON NJ
56871 JERSEY CITY NJ
56873 WATCHUNG NJ
56877 GREEN VILLAGE NJ
56891 BLOOMFIELD NJ
56893 PARLIN NJ
56896 COLONIA NJ
56897 N. BERGEN NJ
56915 RIDGEWOOD NJ
56919 WAYNE NJ
9
<PAGE> 72
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
56921 WASHINGTON NJ
56922 PARAMUS NJ
56924 GARFIELD NJ
56925 JERSEY CITY NJ
56926 FORT LEE NJ
56933 BELFORD NJ
56935 EATONTOWN NJ
56939 MONMOUTH BCH NJ
56962 TRENTON NJ
56987 BEVERLY NJ
56999 WEST ORANGE NJ
58006 ROCKVILLE CENTRE NY
58007 GLENDALE NY
58012 BELLAIRE NY
58014 BRONX NY
58015 BROOKLYN NY
58018 BAYSIDE NY
58019 YONKERS NY
58021 DOBBS FERRY NY
58022 N. MERRICK NY
58025 WHITE PLAINS NY
58027 GREAT NECK NY
58031 GLEN HEAD NY
58034 PT. WASHINGTON NY
58041 WESTBURY NY
58042 TUCKAHOE NY
58046 EAST HILLS NY
58049 YONKERS NY
58053 BROOKLYN NY
58069 LYNBROOK NY
58071 ST. ALBANS NY
58072 RHINEBECK NY
58073 RIDGEWOOD NY
58077 BROOKLYN NY
58079 BROOKLYN NY
58087 BAYSHORE NY
58092 ARDSLEY NY
58101 YONKERS NY
58108 WHITE PLAINS NY
58111 SCARSDALE NY
58112 EASTCHESTER NY
58114 NEW ROCHELLE NY
58119 BROOKLYN NY
58121 NEW ROCHELLE NY
58123 BROOKLYN NY
58154 BRONX NY
58161 YONKERS NY
58173 GLENVILLE NY
58184 YONKERS NY
58205 NEW YORK NY
10
<PAGE> 73
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58218 ALBANY NY
58220 LONG ISLAND CITY NY
58254 ALBANY NY
58260 RENSSELAER NY
58263 MT. KISCO NY
58297 SALT POINT NY
58315 ROTTERDAM NY
58329 OSSINING NY
58347 ELLENVILLE NY
58367 CHATHAM NY
58393 HYDE PARK NY
58401 SHRUB OAK NY
58409 NEW YORK NY
58411 EAST MEADOW NY
58415 BROOKLYN NY
58441 STATEN ISLAND NY
58442 STATEN ISLAND NY
58471 CEDARHURST NY
58505 BRONX NY
58513 BRONX NY
58514 NEW YORK NY
58526 OZONE PARK NY
58532 MT. VERNON NY
58535 PELHAM MANOR NY
58542 NEW YORK NY
58543 FREEPORT NY
58547 ASTORIA NY
58548 MOHEGAN LAKE NY
58553 STATEN ISLAND NY
58557 E. ELMHURST NY
58558 STATEN ISLAND NY
58563 MERRICK NY
58567 GUILDERLAND CTR. NY
58573 WANTAGH NY
58574 SMITHTOWN NY
58582 TROY NY
58584 BROOKLYN NY
58585 ARVERNE NY
58587 REGO PARK NY
58592 NEW YORK NY
58596 MIDDLETOWN NY
58598 OCEANSIDE NY
58602 MANHASSET NY
58605 HOWARD BEACH NY
58616 BRONX NY
58703 SCHENECTADY NY
58704 BALLSTON SPA NY
58705 BALLSTON SPA NY
58710 COLONIE NY
58711 DELMAR NY
11
<PAGE> 74
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58712 ELLENVILLE NY
58713 FT. EDWARD NY
58714 FT. PLAIN NY
58715 GLENS FALLS NY
58716 GLOVERSVILLE NY
58718 HALFMOON NY
58719 GREEN ISLAND NY
58720 HANCOCK NY
58721 HYDE PARK NY
58722 LATHAM NY
58723 BALLSTON SPA NY
58724 MELROSE NY
58725 MILLERTON NY
58726 NEW WINDSOR NY
58727 NISKAYUNA NY
58730 PLEASANT VALLEY NY
58731 POUGHKEEPSIE NY
58733 QUEENSBURY NY
58735 ROTTERDAM NY
58737 GUILDERLAND NY
58739 S. GLENS FALLS NY
58740 TROY NY
58741 WARRENSBURG NY
58743 HUDSON FALLS NY
58744 MECHANICVILLE NY
58745 ALBANY NY
58750 MECHANICVILLE NY
58751 NEWBURGH NY
58753 KINGSTON NY
58754 RENSSELAER NY
58759 RHINEBECK NY
58760 PORT EWEN NY
58761 CATSKILL NY
58762 CATSKILL NY
58764 CATSKILL NY
58766 HUDSON NY
58768 SAUGERTIES NY
58769 FREEHOLD NY
58770 COXSACKIE NY
58771 GREENVILLE NY
58772 QUARRYVILLE NY
58774 MONSEY NY
58776 KINGSTON NY
58780 RENSSELAER NY
58785 MENANDS NY
58786 HOUSICK FALLS NY
58788 BREWSTER NY
58790 BARDONIA NY
58793 VALATIE NY
58794 CAIRO NY
12
<PAGE> 75
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
58796 VISTA NY
58797 LEEDS NY
58798 POUGHKEEPSIE NY
58802 PINE BUSH NY
58804 COPAKE NY
58806 RED HOOK NY
58808 W. TAGHKANIC NY
58812 RAVENA NY
58822 CROTON FALLS NY
67101 BANGOR PA
67215 PHILADELPHIA PA
67227 ALLENTOWN PA
67243 BRYN MAWR PA
67244 CONSHOHOCKEN PA
67249 PHILADELPHIA PA
67253 HUNTINGDON VALLEY PA
67254 FEASTERVILLE PA
67255 PHILADELPHIA PA
67258 PHILADELPHIA PA
67265 PHILADELPHIA PA
67266 PHILADELPHIA PA
67269 HATBORO PA
67271 HAVERTOWN PA
67272 MEDIA PA
67274 PHILADELPHIA PA
67275 MILMONT PARK PA
67276 PHILADELPHIA PA
67278 ALDAN PA
67282 BRISTOL PA
67288 TREVOSE PA
67298 HAVERTOWN PA
67299 ABINGTON PA
67301 HATBORO PA
67367 CLIFTON HIGHTS PA
67381 ALDAN PA
67396 MEDIA PA
67398 ROSLYN PA
67401 CLIFTON HIGHTS PA
67402 PHILADELPHIA PA
67405 MORRISVILLE PA
67409 PHILADELPHIA PA
67415 PHOENIXVILLE PA
67416 LEVITTOWN PA
67418 LANGHORNE PA
67419 POTTSTOWN PA
67422 BOYERTOWN PA
67423 QUAKERTOWN PA
67425 SOUDERTON PA
67426 LANSDALE PA
67431 FURLONG PA
13
<PAGE> 76
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
67432 COOPERSBURG PA
67433 DOYLESTOWN PA
67434 RICHBORO PA
67435 PENNDEL PA
67436 WEST CHESTER PA
67437 NORRISTOWN PA
67531 TRAPPE PA
67580 GETTYSBURG PA
67598 LINWOOD PA
67599 ELIZABETHTOWN PA
67601 NORTH HILLS PA
67602 NEWTOWN SQUARE PA
67604 ALLENTOWN PA
67607 PHILADELPHIA PA
67610 PHILADELPHIA PA
67615 PHILADELPHIA PA
67617 PALMER TOWNSHIP PA
67623 FARIFIELD PA
67624 NEW OXFORD PA
67626 LITTLESTOWN PA
67627 HANOVER PA
67635 YORK PA
67636 DOVER PA
67638 GLEN ROCK PA
67639 CARLISLE PA
67640 CARLISLE PA
67641 BOILING SPRINGS PA
67647 HANOVER PA
67649 BIGLERVILLE PA
67650 NEW OXFORD PA
67654 HARRISBURG PA
68002 MIDDLETOWN RI
68007 PROVIDENCE RI
68120 EAST PROVIDENCE RI
68611 PAWTUCKET RI
68619 CRANSTON RI
68622 PAWTUCKET RI
68623 BARRINGTON RI
68629 WARWICK RI
68642 PORTSMOUTH RI
69004 EPHRATA PA
69005 DAUPHIN PA
69010 YORK PA
69012 GETTYSBURG PA
69016 POTTSVILLE PA
69019 POTTSVILLE PA
69406 ALLENTOWN PA
69407 LANCASTER PA
69408 BETHLEHEM PA
69409 EASTON PA
14
<PAGE> 77
INVESTMENT-ENVIRONMENTAL
LOCATION
- -------------------------------------
# CITY STATE
- -------------------------------------
69415 BETHLEHEM PA
69416 LANCASTER PA
69417 SCHAEFFERSTOWN PA
69419 HAMBURG PA
69420 READING PA
69421 MILLERSVILLE PA
69422 MANHEIM PA
69424 MOUNTVILLE PA
69425 EBENEZER PA
69426 BETHLEHEM PA
69428 INTERCOURSE PA
69430 REINHOLDS PA
69431 BOYERTOWN PA
69436 WEST GROVE PA
69439 OXFORD PA
69440 POTTSTOWN PA
69443 EPHRATA PA
69444 READING PA
69445 ROBESONIA PA
69449 YORK PA
69466 KENHORST PA
69472 LEOLA PA
69476 SHREWSBURY PA
69483 RED LION PA
69484 READING PA
69485 ROTHSVILLE PA
69495 HARRISBURG PA
69497 ADAMSTOWN PA
69503 LANCASTER PA
69504 NEW HOLLAND PA
69505 CHRISTIANA PA
69507 LANCASTER PA
69672 READING PA
69673 WYOMISSING HILLS PA
69676 ST.CLAIR PA
69680 REIFFTON PA
69681 W. READING PA
69682 ARENDTSVILLE PA
69683 MOHNTON PA
69684 ST.THOMAS PA
69685 CARLISLE PA
69688 BONNEAUVILLE PA
69690 MCCONNELLBURG PA
76112 BENNINGTON VT
694 sites
15
<PAGE> 78
SCHEDULE 1.01(b)
Upgrades
NON-INVEST-CAPITAL
LOCATION
- ---------------------------------------
# CITY STATE
- ---------------------------------------
96904 MIDDLETOWN RI
97192 EDDINGTON PA
98175 LYNBROOK NY
98326 BRONXVILLE NY
4 sites
INVESTMENT-CAPITAL
LOCATION
- ---------------------------------------
# CITY STATE
- ---------------------------------------
6 BROOKLYN NY
7 JAMAICA NY
8 REGO PARK NY
20 BRONX NY
22 CORONA NY
24 BRONX NY
61 MIDDLE ISLAND NY
74 WHITE PLAINS NY
79 HARTSDALE NY
82 OSSINING NY
91 ELMSFORD NY
102 PEEKSKILL NY
104 LARCHMONT NY
111 BRONX NY
115 BRONX NY
117 MAMARONECK NY
121 YONKERS NY
126 BROOKLYN NY
128 BROOKLYN NY
138 YONKERS NY
146 MAHOPAC NY
157 POUGHKEEPSIE NY
160 MARLBORO NY
163 LAKE KATRINE NY
174 STONY POINT NY
177 HIGHLAND NY
178 KINGSTON NY
181 HOWARD BEACH NY
186 BRONX NY
195 S. ISLAND NY
200 S. ISLAND NY
223 BROOKLYN NY
229 BROOKLYN NY
234 S. ISLAND NY
235 S. ISLAND NY
240 SPRINGFIELD GDNS. NY
252 MT. VERNON NY
264 BRONX NY
266 BRONX NY
270 BRONX NY
272 BRONX NY
275 BRONX NY
276 BRONX NY
277 BRONX NY
278 YONKERS NY
301 N. TARRYTOWN NY
307 BREWSTER NY
312 FLUSHING NY
323 BRONX NY
324 S. ISLAND NY
1
<PAGE> 79
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
341 NEW YORK NY
342 GLENDALE NY
343 OZONE PARK NY
344 LIC NY
350 SPRING VALLEY NY
361 ASTORIA NY
362 S. ISLAND NY
396 S. ISLAND NY
411 BROOKLYN NY
421 BROOKLYN NY
544 WHITE PLAINS NY
545 SAUGERTIES NY
546 WOODSIDE NY
547 OZONE PARK NY
561 S. ISLAND NY
564 BROOKLYN NY
568 LIC NY
570 WHITE PLAINS NY
572 HAWTHORNE NY
573 PLEASANTVILLE NY
576 YONKERS NY
577 YONKERS NY
578 RYE NY
579 OSSINING NY
587 FRANKLIN CT
617 AGAWAM MA
618 FEEDING HILLS MA
619 AGAWAM MA
624 GRANBY MA
625 G. BARRINGTON MA
626 HADLEY MA
627 LANESBORO MA
628 MONSON MA
629 NORTH ADAMS MA
630 NORTH ADAMS MA
631 PALMER MA
632 PITTSFIELD MA
633 PITTSFIELD MA
637 SPRINGFIELD MA
638 SPRINGFIELD MA
640 SPRINGFIELD MA
641 SPRINGFIELD MA
643 WESTFIELD MA
647 OSSINING NY
649 BROOKLYN NY
685 DOBBS FERRY NY
709 BROOKLYN NY
6130 NEW HAVEN CT
6744 NORWALK CT
6765 STAMFORD CT
2
<PAGE> 80
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
6772 COS COB CT
6822 MANCHESTER CT
6853 ENFIELD CT
8605 NEW CASTLE DE
8608 WILMINGTON DE
8635 NEW CASTLE DE
8637 ST. GEORGES DE
8641 WILMINGTON DE
8644 WILMINGTON DE
8645 CLAYMONT DE
8659 NEWARK DE
8667 NEWARK DE
8671 WILMINGTON DE
28032 PORTLAND ME
28215 WESTBROOK ME
29721 ROCKDALE MD
29763 RANDALSTOWN MD
29812 ABERDEEN MD
30161 MILFORD MA
30312 AGAWAM MA
30315 S. WEYMOUTH MA
30317 WEST ROXBURY MA
30324 MAYNARD MA
30327 STOUGHTON MA
30331 ARLINGTON MA
30339 BELMONT MA
30351 ROCKLAND MA
30352 WATERTOWN MA
30355 READING MA
30361 DORCHESTER MA
30363 WEYMOUTH MA
30392 ASHLAND MA
30393 WOBURN MA
30404 BELMONT MA
30412 PITTSFIELD MA
30429 N. ATTLEBORO MA
30436 WORCESTER MA
30439 TAUNTON MA
30445 FALL RIVER MA
30457 WORCESTER MA
30458 WEBSTER MA
30466 CLINTON MA
30468 FOXBORO MA
30471 WORCESTER MA
30472 CLINTON MA
30515 BOSTON MA
30521 NEWTON MA
30524 FALMOUTH MA
30537 SOMERSET MA
30545 METHUEN MA
3
<PAGE> 81
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
30546 ROCKLAND MA
30548 WILLIAMSTOWN MA
30551 FAIRHAVEN MA
30557 TAUNTON MA
30558 SEEKONK MA
30559 WALPOLE MA
30561 N. ANDOVER MA
30562 WESTFORD MA
30600 LOWELL MA
30601 FRAMINGHAM MA
30603 METHUEN MA
30604 AMESBURY MA
30605 GEORGETOWN MA
30606 IPSWICH MA
30607 SALISBURY MA
30609 BEVERLY MA
30610 BILLERICA MA
30612 CHATHAM MA
30615 HARWICH MA
30616 IPSWICH MA
30618 LOWELL MA
30619 METHUEN MA
30621 NEWBURYPORT MA
30623 ORLEANS MA
30624 PEABODY MA
30625 QUINCY MA
30626 REVERE MA
30627 SALEM MA
30629 TEWKSBURY MA
30630 TWIN MILL MA
30631 FALMOUTH MA
30633 WESTFORD MA
30636 BRIDGEWATER MA
30644 CANTON MA
30646 STOUGHTON MA
30647 MEDFORD MA
30648 DORCHESTER MA
30649 STOUGHTON MA
30651 WORCESTER MA
30653 BARRE MA
30654 WORCESTER MA
30655 BROCKTON MA
30656 MILLBURY MA
30658 WORCESTER MA
30660 DUDLEY MA
30662 FRANKLIN MA
30663 WORCESTER MA
30665 LEOMINSTER MA
30666 WORCESTER MA
30668 WORCESTER MA
4
<PAGE> 82
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
30669 NORTHBOROUGH MA
30670 POCASSET MA
30671 CLINTON MA
30672 W. BOYLSTON MA
30674 SOUTHBRIDGE MA
30675 WORCESTER MA
30676 S. YARMOUTH MA
30677 STERLING MA
30678 SUTTON MA
30679 WORCESTER MA
30680 FRAMINGHAM MA
30682 WAREHAM MA
30683 WESTBOROUGH MA
30684 HARWICHPORT MA
30685 WORCESTER MA
30686 WORCESTER MA
30687 FITCHBURG MA
30688 WORCESTER MA
30689 CHERRY VALLEY MA
30690 FRAMINGHAM MA
30692 SOUTHBRIDGE MA
30693 OXFORD MA
30696 FITCHBURG MA
30697 WORCESTER MA
30698 ORANGE MA
30702 MILFORD MA
30704 UXBRIDGE MA
30709 WORCESTER MA
30710 WORCESTER MA
30711 AUBURN MA
30712 WALTHAM MA
30713 LOWELL MA
55237 SALEM NH
55238 LONDONBERRY NH
55244 MERRINACK NH
55245 NASHUA NH
55247 PEMBROKE NH
55249 ROCHESTER NH
55251 SALEM NH
55254 EXETER NH
55257 EPPING NH
55258 EPSOM NH
55259 EXETER NH
55261 MILFORD NH
55265 PORTSMOUTH NH
55274 PELHAM NH
56161 LITTLE FERRY NJ
56230 NEWARK NJ
58007 GLENDALE NY
58012 BELLAIRE NY
5
<PAGE> 83
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
58014 BRONX NY
58015 BROOKLYN NY
58018 BAYSIDE NY
58049 YONKERS NY
58053 BROOKLYN NY
58071 ST. ALBANS NY
58077 BROOKLYN NY
58079 BROOKLYN NY
58085 BAYSIDE NY
58108 WHITE PLAINS NY
58111 SCARSDALE NY
58114 NEW ROCHELLE NY
58119 BROOKLYN NY
58121 NEW ROCHELLE NY
58154 BRONX NY
58173 GLENVILLE NY
58205 NEW YORK NY
58218 ALBANY NY
58220 LONG ISLAND CITY NY
58254 ALBANY NY
58260 RENSSELAER NY
58315 ROTTERDAM NY
58329 OSSINING NY
58347 ELLENVILLE NY
58367 CHATHAM NY
58409 NEW YORK NY
58415 BROOKLYN NY
58441 STATEN ISLAND NY
58443 STATEN ISLAND NY
58505 BRONX NY
58513 BRONX NY
58514 NEW YORK NY
58526 OZONE PARK NY
58542 NEW YORK NY
58547 ASTORIA NY
58557 E. ELMHURST NY
58567 GUILDERLAND CTR. NY
58582 TROY NY
58584 BROOKLYN NY
58585 ARVERNE NY
58587 REGO PARK NY
58592 NEW YORK NY
58596 MIDDLETOWN NY
58605 HOWARD BEACH NY
58703 SCHENECTADY NY
58704 BALLSTON SPA NY
58705 BALLSTON SPA NY
58710 COLONIE NY
58711 DELMAR NY
58712 ELLENVILLE NY
6
<PAGE> 84
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
58714 FT. PLAIN NY
58715 GLENS FALLS NY
58716 GLOVERSVILLE NY
58718 CLIFTON PARK NY
58719 GREEN ISLAND NY
58720 HANCOCK NY
58721 HYDE PARK NY
58722 LATHAM NY
58723 BALLSTON SPA NY
58724 MELROSE NY
58725 MILLERTON NY
58726 NEW WINDSOR NY
58727 NISKAYUNA NY
58730 PLEASANT VLLY NY
58731 POUGHKEEPSIE NY
58733 QUEENSBURY NY
58735 ROTTERDAM NY
58737 SCHNECTADY NY
58739 S. GLENS FALLS NY
58740 TROY NY
58741 WARRENSBURG NY
58743 HUDSON FALLS NY
58744 MECHANICVILLE NY
58750 MECHANICVILLE NY
58751 NEWBURGH NY
58753 KINGSTON NY
58754 RENSSELAER NY
58760 PORT EWEN NY
58761 CATSKILL NY
58762 CATSKILL NY
58766 HUDSON NY
58768 SAUGERTIES NY
58769 FREEHOLD NY
58771 GREENVILLE NY
58772 QUARRYVILLE NY
58780 RENSSELAER NY
58785 MENANDS NY
58786 HOOSICK FALLS NY
58793 VALATIE NY
58797 LEEDS NY
58802 PINE BUSH NY
58804 COPAKE NY
58806 RED HOOK NY
58808 W. TAGHKANIC NY
58809 MIDDLE ISLAND NY
58812 RAVENA NY
58822 CROTON FALLS NY
67101 BANGOR PA
67215 PHILADELPHIA PA
67227 ALLENTOWN PA
7
<PAGE> 85
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
67249 PHILADELPHIA PA
67261 PHILADELPHIA PA
67265 PHILADELPHIA PA
67266 PHILADELPHIA PA
67276 PHILADELPHIA PA
67299 ABINGTON PA
67398 ROSLYN PA
67402 PHILADELPHIA PA
67409 PHILADELPHIA PA
67416 LEVITTOWN PA
67423 QUAKERTOWN PA
67425 SOUDERTON PA
67432 COOPERSBURG PA
67531 TRAPPE PA
67580 GETTYSBURG PA
67596 PARADISE PA
67597 PHILADELPHIA PA
67599 ELIZABETHTOWN PA
67604 ALLENTOWN PA
67610 PHILADELPHIA PA
67616 PHILADELPHIA PA
67624 NEW OXFORD PA
67626 LITTLESTOWN PA
67627 HANOVER PA
67632 LONGSTOWN PA
67633 YORK PA
67636 DOVER PA
67638 GLEN ROCK PA
67639 CARLISLE PA
67641 BOILING SPGS. PA
67654 HARRISBURG PA
68007 PROVIDENCE RI
68120 E. PROVIDENCE RI
68646 WAKEFIELD RI
69002 READING PA
69004 EPHRATA PA
69005 DAUPHIN PA
69006 DOUGLASVILLE PA
69010 YORK PA
69012 GETTYSBURG PA
69016 POTTSVILLE PA
69019 POTTSVILLE PA
69406 ALLENTOWN PA
69408 BETHLEHEM PA
69409 WASTON PA
69415 BETHLEHEM PA
69416 LANCASTER PA
69417 SCAFFERSTOW PA
69419 HAMBURG PA
69420 READING PA
8
<PAGE> 86
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
69421 MILLERSVILLE PA
69422 MANHEIN PA
69425 EBENEZER PA
69426 BETHELEM PA
69428 INTERCOURSE PA
69430 REINHOLDS PA
69431 BOYERTOWN PA
69439 OXFORD PA
69440 POTTSTOWN PA
69443 EPHRATA PA
69444 READING PA
69445 ROBERSONIA PA
69449 YORK PA
69466 KENHORST PA
69472 LEOLA PA
69476 SHREWSBURY PA
69483 RED LION PA
69484 READING PA
69493 HANOVER PA
69495 HARRISBURG PA
69497 ADAMSTOWN PA
69503 LANCASTER PA
69504 NEW HOLLAND PA
69505 CHRISTIANA PA
69507 LANCASTER PA
69673 WYOMISSING HILLS PA
69676 ST. CLAIR PA
69681 W. READING PA
69682 ARDENTSVILLE PA
69683 HOHNTON PA
69684 ST. THOMAS PA
69685 CARLISLE PA
69688 BONNEAUVILLE PA
69690 MCCONNELLSBURG PA
71002 ROCKY MOUNT VA
71004 BLACKSBURG VA
71009 VINTON VA
71010 ROANOKE VA
71011 RIDGEWAY VA
71028 FIEDALE VA
71030 MARTISNSILLE VA
71031 ROANOKE VA
71033 ROANOKE VA
71054 RICH CREEK VA
71055 DANVILLE VA
71090 ROANOKE VA
71108 ROANOKE VA
71109 ROANOKE VA
71110 SALEM VA
71112 STANLEYTOWN VA
9
<PAGE> 87
INVESTMENT-CAPITAL
LOCATION
- ------------------------------------
# CITY STATE
- ------------------------------------
71113 MARTINSVILLE VA
71120 ROANOKE VA
71173 RICHMOND VA
71177 DALEVILLE VA
71178 BRISTOL VA
71213 MARTINSVILLE VA
71215 CHESAPEAKE VA
71216 VIRGINIA BCH VA
71218 VIRGINIA BCH VA
71220 HAMPTON VA
71222 PORTSMOUTH VA
71250 NEWPORT NEWS VA
71251 VIRGINIA BCH VA
71252 VIRGINIA BCH VA
71255 VIRGINIA BCH VA
71257 VIRGINIA BCH VA
71262 HAMPTON VA
71264 STERLING PARK VA
71270 PORTSMOUTH VA
71288 CHRISTIANASBR VA
71293 VIRGINIA BCH VA
71294 MAHASSAS PK VA
76112 BENNINGTON VT
473 sites
10
<PAGE> 88
SCHEDULE 1.01(c)
Marketing Equipment
Net Book Value of Marketing Assets to be Transferred by Getty Petroleum Corp.
to Getty Petroleum Marketing Inc. By Location
as of January 31, 1997
Location Address Net Book Value
- -------- ------- --------------
[Computer-generated report to be issued after the close of the books for
January 1997]
1
<PAGE> 89
SCHEDULE 1.01(d)
Shared Policies
[will be supplied upon request]
<PAGE> 90
Schedule 2.06
Conveyance and Assumption Instruments
[See attached]
<PAGE> 91
BILL OF SALE
This is a Bill of Sale from Aero Oil Company, a Pennsylvania corporation
(the "Assignor"), with central offices located at 125 Jericho Turnpike,
Jericho, New York 11753, to Getty Petroleum Marketing Inc., a Maryland
corporation (the "Assignee"), with central offices located at 125 Jericho
Turnpike, Jericho, New York 11753, pursuant to the Reorganization and
Distribution Agreement, dated as of January 31, 1997 (the "Agreement"), between
the Assignor's sole shareholder and Assignee. Capitalized terms used herein,
unless otherwise defined, have the meaning given them in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor does hereby sell, assign, transfer, convey,
deliver and contribute to Assignee, its successors and assigns, to have and to
hold forever, all of its rights, title and interest in and to all of its
tangible personal property, of every kind and description, that, as determined
on a basis consistent with that used in the determination of the assets
included on the Marketing Balance Sheet, relate to the Marketing Business (the
"Marketing Assets"), including but not limited to the equipment described on
Exhibit A attached hereto, subject to all mortgages, pledges, liens, leases,
charges, encumbrances and adverse claims of any kind and character, except that
Assignee shall be entitled to the benefits of the representations, warranties,
and indemnities set forth in the Agreement with respect to such Marketing
Assets.
From and after the Distribution Date, upon request of Assignee, Assignor
shall duly execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may
be reasonably required to convey to and vest in Assignee and protect its
rights, title and interest in enjoyment of all the Marketing Assets of the
Assignor and as may be appropriate or otherwise to carry out the transactions
contemplated by the Agreement and this Bill of Sale.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
have duly executed and delivered this Bill of Sale as of this ___ day of
January, 1997.
AERO OIL COMPANY
Attest:
_______________________ By: __________________________________
Title: ________________________
ACCEPTED:
GETTY PETROLEUM MARKETING INC.
Attest:
________________________ By: ___________________________________
Title: __________________________
<PAGE> 92
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of January __, 1997, between
Aero Oil Company, a Pennsylvania corporation (the "Assignor"), with a central
office located at 125 Jericho Turnpike, Jericho, New York 11753, and Getty
Petroleum Marketing Inc., a Maryland corporation (the "Assignee"), with a
central office located at 125 Jericho Turnpike, Jericho, New York 11753.
W I T N E S S E T H:
WHEREAS, Assignee and the sole shareholder of Assignor have entered into a
Reorganization and Distribution Agreement dated as of January 31, 1997 (the
"Agreement"), providing, among other things, for transfer by Assignor to
Assignee of the Marketing Assets (as such term is defined in the Agreement) of
Assignor, including but not limited to certain intangible personal property of
Assignor;
WHEREAS, this Assignment and Assumption Agreement is being delivered
immediately prior to and is a condition precedent to the closing of the
distribution contemplated in the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized Terms. Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Agreement.
2. Assignment. Assignor hereby assigns, transfers and conveys to Assignee,
subject to the terms and conditions contained in the Agreement, on and as of
the date hereof, and Assignee hereby accepts and assumes, all of Assignor's
obligations, right, title and interest in, to and under all intangible personal
property that Assignor owns or in which it has rights and that, as determined
on a basis consistent with that used in the determination of assets included on
the Marketing Balance Sheet, relate to the Marketing Business, including but
not limited to accounts receivable, choses in action, rights to payment or
performance, rights and obligations arising under or in connection with chattel
paper, documents, instruments, deposit accounts, money, licenses and permits
(to the extent assignable under applicable law), trademarks, copyrights, trade
names, patents, claims for refunds of deposits or prepaid expenses, puts,
options, investment property, contracts and contract rights, leases and
leasehold interests, with all rights, powers, privileges and obligations of
Seller thereunder, excepting therefrom only Retained Assets.
3. Assumption of Liabilities. Assignee hereby assumes and agrees timely
and diligently fully to satisfy, perform, pay and discharge all Liabilities of
Assignor relating to the assets conveyed hereunder except Retained Liabilities.
4. Miscellaneous. This Assignment and Assumption Agreement shall inure to
the benefit of, and be enforceable against, each of the Assignor, the Assignee
and their respective successors and assigns.
<PAGE> 93
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Assignment and Assumption Agreement on the date first above written.
Attest: AERO OIL COMPANY
_______________________ By: __________________________________
Title: __________________________
Attest: GETTY PETROLEUM MARKETING INC.
________________________ By: __________________________________
Title: __________________________
2
<PAGE> 94
BILL OF SALE
This is a Bill of Sale from Getty Petroleum Corp., a Delaware
corporation (the "Assignor"), with central offices located at 125 Jericho
Turnpike, Jericho, New York 11753, to Getty Petroleum Marketing Inc., a
Maryland corporation (the "Assignee"), with central offices located at 125
Jericho Turnpike, Jericho, New York 11753, pursuant to the Reorganization and
Distribution Agreement, dated as of January 31, 1997 (the "Agreement"), between
the Assignor and Assignee. Capitalized terms used herein, unless otherwise
defined, have the meaning given them in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor does hereby sell, assign, transfer, convey,
deliver and contribute to Assignee, its successors and assigns, to have and to
hold forever, all of its rights, title and interest in and to all of its
tangible personal property, of every kind and description, that, as determined
on a basis consistent with that used in the determination of the assets included
on the Marketing Balance Sheet, relate to the Marketing Business (the "Marketing
Assets"), including but not limited to the Marketing Books and the records and
the equipment described on Exhibit A attached hereto, subject to all mortgages,
pledges, liens, leases, charges, encumbrances and adverse claims of any kind and
character, except that Assignee shall be entitled to the benefits of the
representations, warranties, and indemnities set forth in the Agreement with
respect to such Marketing Assets.
From and after the Distribution Date, upon request of Assignee, Assignor
shall duly execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may
be reasonably required to convey to and vest in Assignee and protect its
rights, title and interest in enjoyment of all the Marketing Assets of the
Assignor and as may be appropriate or otherwise to carry out the transactions
contemplated by the Agreement and this Bill of Sale.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
have duly executed and delivered this Bill of Sale as of this ___ day of
January, 1997.
GETTY PETROLEUM CORP.
Attest:
_______________________ By: __________________________________
Title: ________________________
ACCEPTED:
GETTY PETROLEUM MARKETING INC.
Attest:
________________________ By: __________________________________
Title: ________________________
<PAGE> 95
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of January __, 1997, between
Getty Petroleum Corp., a Delaware corporation (the "Assignor"), with a central
office located at 125 Jericho Turnpike, Jericho, New York 11753, and Getty
Petroleum Marketing Inc., a Maryland corporation (the "Assignee"), with a
central office located at 125 Jericho Turnpike, Jericho, New York 11753.
W I T N E S S E T H:
WHEREAS, Assignor and Assignee have entered into a Reorganization and
Distribution Agreement dated as of January 31, 1997 (the "Agreement"),
providing, among other things, for transfer by Assignor to Assignee of the
Marketing Assets (as such term is defined in the Agreement) of Assignor,
including but not limited to all intangible personal property of Assignor;
WHEREAS, this Assignment and Assumption Agreement is being delivered
immediately prior to and is a condition precedent to the closing contemplated
in the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized Terms. Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Agreement.
2. Assignment. Assignor hereby assigns, transfers and conveys to Assignee,
subject to the terms and conditions contained in the Agreement, on and as of
the date hereof, and Assignee hereby accepts and assumes, all of Assignor's
obligations, right, title and interest in, to and under all intangible personal
property that Assignor owns or in which it has rights and that, as determined
on a basis consistent with that used in the determination of assets included on
the Marketing Balance Sheet, relate to the Marketing Business, including but
not limited to the Marketing Security Deposits, accounts receivable, choses in
action, rights to payment or performance, rights and obligations arising under
or in connection with chattel paper, documents, instruments, deposit accounts,
money, licenses and permits (to the extent assignable under applicable law),
trademarks, copyrights, trade names, patents, claims for refunds of deposits or
prepaid expenses, puts, options, investment property, contracts and contract
rights, leases and leasehold interests, with all rights, powers, privileges and
obligations of Seller thereunder, excepting therefrom only Retained Assets.
3. Assumption of Liabilities. Assignee hereby assumes and agrees timely
and diligently fully to satisfy, perform, pay and discharge all Liabilities of
Assignor except Retained Liabilities.
4. Miscellaneous. This Assignment and Assumption Agreement shall inure to
the benefit of, and be enforceable against, each of the Assignor, the Assignee
and their respective successors and assigns.
<PAGE> 96
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Assignment and Assumption Agreement on the date first above written.
Attest: GETTY PETROLEUM CORP.
_______________________ By: __________________________________
Title: _________________________
Attest: GETTY PETROLEUM MARKETING INC.
________________________ By: __________________________________
Title: _________________________
2
<PAGE> 97
BILL OF SALE
This is a Bill of Sale from Aero Oil Company, a Pennsylvania corporation
(the "Assignor"), with central offices located at 125 Jericho Turnpike, Jericho,
New York 11753, to Getty Terminals Corp., a New York corporation (the
"Assignee"), with central offices located at 125 Jericho Turnpike, Jericho, New
York 11753, pursuant to the Reorganization and Distribution Agreement, dated as
of January 31, 1997 (the "Agreement"), between the Assignor's sole shareholder
and Assignee. Capitalized terms used herein, unless otherwise defined, have the
meaning given them in the Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor does hereby sell, assign, transfer, convey,
deliver and contribute to Assignee, its successors and assigns, to have and to
hold forever, all of its rights, title and interest in and to all of its
tangible personal property, of every kind and description, located at the
facility known as the Highspire Terminal (the "Highspire Assets"), subject to
all mortgages, pledges, liens, leases, charges, encumbrances and adverse
claims of any kind and character, except that Assignee shall be entitled to
the benefits of the representations, warranties, and indemnities set forth in
the Agreement with respect to such Highspire Assets.
From and after the Distribution Date, upon request of Assignee, Assignor
shall duly execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may
be reasonably required to convey to and vest in Assignee and protect its
rights, title and interest in enjoyment of all the Highspire Assets of the
Assignor and as may be appropriate or otherwise to carry out the transactions
contemplated by the Agreement and this Bill of Sale.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
have duly executed and delivered this Bill of Sale as of this ___ day of
January, 1997.
AERO OIL COMPANY
Attest:
_______________________ By: __________________________________
Title: ________________________
ACCEPTED:
GETTY TERMINALS CORP.
Attest:
________________________ By: __________________________________
Title: ________________________
<PAGE> 98
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of January __, 1997, between
Aero Oil Company, a Pennsylvania corporation (the "Assignor"), with a central
office located at 125 Jericho Turnpike, Jericho, New York 11753, and Getty
Terminals Corp., a New York corporation (the "Assignee"), with a
central office located at 125 Jericho Turnpike, Jericho, New York 11753.
W I T N E S S E T H:
WHEREAS, the sole shareholder of each of Assignor and Assignee has entered
into a Reorganization and Distribution Agreement dated as of January 31, 1997
(the "Agreement"), providing, among other things, for transfer by Assignor to
Assignee of all intangible personal property of Assignor relating to the
facility known as the Highspire Terminal (the "Highspire Terminal");
WHEREAS, this Assignment and Assumption Agreement is being delivered
prior to and is a condition precedent to the closing of the distribution
contemplated in the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized Terms. Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Agreement.
2. Assignment. Assignor hereby assigns, transfers and conveys to
Assignee, subject to the terms and conditions contained in the Agreement, on and
as of the date hereof, and Assignee hereby accepts and assumes, all of
Assignor's obligations, right, title and interest in, to and under all
intangible personal property that Assignor owns or in which it has rights and
that relate to the Highspire Terminal, including but not limited to accounts
receivable, choses in action, rights to payment or performance, rights and
obligations arising under or in connection with chattel paper, documents,
instruments, deposit accounts, money, licenses and permits (to the extent
assignable under applicable law), trademarks, copyrights, trade names, patents,
claims for refunds of deposits or prepaid expenses, puts, options, investment
property, contracts and contract rights, leases and leasehold interests, with
all rights, powers, privileges and obligations of Assignor thereunder, excepting
therefrom only Retained Assets.
3. Assumption of Liabilities. Assignee hereby assumes and agrees timely
and diligently fully to satisfy, perform, pay and discharge all Liabilities of
Assignor relating to the assets conveyed hereunder except Retained Liabilities.
4. Miscellaneous. This Assignment and Assumption Agreement shall inure to
the benefit of, and be enforceable against, each of the Assignor, the Assignee
and their respective successors and assigns.
<PAGE> 99
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Assignment and Assumption Agreement on the date first above written.
Attest: AERO OIL COMPANY
_______________________ By: __________________________________
Title: _________________________
Attest: GETTY TERMINALS CORP.
________________________ By: __________________________________
Title: ________________________
2
<PAGE> 100
SCHEDULE 4.01
Consents
AGREEMENTS WHERE CONSENT TO ASSIGNMENT IS REQUIRED
<TABLE>
<CAPTION>
Agreement Parties to Agreement Date Subject of Agreement Other
---------- -------------------- ---- -------------------- -----
<S> <C> <C> <C> <C> <C>
1. Advertising Agreement NY Yankee Partnership 12/1/95 Advertising at Yankee Stadium
& GPC
2. Wright Express Corporation/ Wright Express Corporation 10/14/86 Co-branded fleet fueling card
GPC Charge Card Agreement & GPC and credit card program
3. Transnet, Inc. Transaction Transnet, Inc. & GPC 03/31/93 Processing transaction data
Processing Services Agr't from credit card, debit,
& check payments
4. VeriFone Finance Equipment VeriFone Finance & GPC 03/25/94 Lease of Omni 395 265K Lease #3823
Leasing Agreement terminals, P250 printers
& Pin Pad 101's
5. VeriFone Finance Equipment VeriFone Finance & GPC 09/10/93 Lease of Omni 395 265K Lease #2145
Leasing Agreement terminals, P250 printers
& Pin Pad 101's
6. Midlantic Bank, National Midlantic Bank, National 11/17/94 Getty's participation in
Association Merchant Agr't Association & GPC network to settle eft fund
transfers
7. Fuel Marketing Agreement International Automated 05/31/95 Getty's participation in
Energy Systems, Inc. & GPC national network of fleet
vehicle fueling facilities;
IAES fleet cards
8. Agreement Interlink Network, Inc. 09/27/95 Getty's acceptance of
& GPC Interlink brand debit cards
at Getty locations
9. Lease York & Aero Oil 11/29/93 Lease of four Mack Tractors Assign from
(MD) Aero Oil to PT Petro
10. Lease GECC & Aero Oil 10/21/94 Lease of two Heil Tank Assign from
Trailers (PA) Aero Oil to PT Petro
11. Lease GECC & Aero Oil 11/23/94 Lease of three Heil Tank Assign from
Trailers (PA) Aero Oil to PT Petro
12. Lease GECC & Aero Oil 12/21/94 Lease of three Mack tractors Assign from
(PA) Aero Oil to PT Petro
13. Lease GE Capital Fleet Services 12/01/96 Lease on one Mack CH 613 Assign from Aero
& Aero Oil Tractor (MD) Oil to PT Petro
14. Lease of Computer Equipment StorageTek & GPC 07/01/93 Lease of Tape Cartridge-Sys. Notice of cancellation
38 sent to Lessor
15. Lease of Computer Equipment Norwest(6) & GPC 12/31/94 Lease of DASD-AS 400
16. Lease of Computer Equipment Norwest(6) & GPC 04/01/96 Lease of DASD-AS 400
17. Lease of Computer Equipment Norwest(6) & GPC 12/96 Lease of CPU AS 400 IBM New lease for 36 mos.
signed 12/96
18. Lease of Copier Machine Xerox & GPC 05/94 Lease of Model 5100
19. Lease of Copier Machine Xerox & GPC 03/95 Lease of Model CS Pro 6000
20. Lease Verifone Finance & GPC 09/93 Lease of 650 POS Terminals
21. Lease Verifone Finance & GPC 10/93 Lease of 850 POS Terminals
22. Lease Verifone Finance & GPC 12/93 Lease of 200 POS Terminals
23. Lease Pitney Bowes & GPC 12/96 Lease of Mailing Machine,
Powerstacker, Folder, Feeder,
Inserter & Scale
24. Merchant Services Agreement Discover Card Services & GPC 05/15/89
25. Agreement Mastercard & GPC
26. Agreement Visa & GPC
27. Agreement NYCE & GPC
</TABLE>
1
<PAGE> 1
EXHIBIT 10.30
TRADEMARK LICENSE AGREEMENT
THIS LICENSE AGREEMENT, effective as of the _______ day of _____, 1997, is
entered into by and between: Getty Realty Corp. (hereinafter called "REALTY"),
a corporation organized and existing under the laws of the State of Delaware,
located at 125 Jericho Turnpike, Jericho, New York 11753 and Getty Petroleum
Marketing Inc. (hereinafter called "MARKETING"), a corporation organized and
existing under the laws of the State of Maryland, located at 125 Jericho
Turnpike, Jericho, New York 11753.
WHEREAS, REALTY is the owner of certain trademarks, service marks and
trade names that have been utilized in, among other businesses, the motor fuel
marketing business; WHEREAS, REALTY has subleased various motor fuel outlet
properties to MARKETING under certain net lease agreements (hereinafter
collectively called, the "Master Lease");
WHEREAS, REALTY seeks to license certain trademarks, service marks and
trade names to MARKETING for use in its marketing business;
WHEREAS, MARKETING wishes to license those trademarks, service marks and
trade names from REALTY for use in its marketing business on those terms;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
A. "Licensed Marks" shall mean the trademarks, service marks or trade
names listed on Schedule A attached hereto.
<PAGE> 2
B. "Licensed Territory" shall mean the following states of the United
States: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut,
New York, New Jersey, Pennsylvania, Delaware, Maryland and Virginia, plus any
additional states added to the Licensed Territory pursuant to the Grant of
Option(s) to MARKETING described in Paragraph 15, below.
C. "Marketing Business" shall mean: (i) the purchase, storage,
distribution, marketing, and sale of gasoline, diesel fuel and other related
products at wholesale and through terminals and a retail service station
network; (ii) the operation of convenience stores; and (iii) the purchase,
storage, transportation and sale of home heating oil to residential and
commercial customers in mid-Hudson Valley, New York. By way of example,
"Marketing Business" does not include the home heating oil business previously
carried on by the Aero Oil Company or the real estate business previously
carried on by Getty Petroleum Corp., both of which are currently being carried
on by REALTY.
2. GRANT OF LICENSE A. Subject to the terms and conditions set out
herein, REALTY grants to MARKETING an exclusive, payment-free, license to use
the Licensed Marks in the Licensed Territory in connection with its Marketing
Business. MARKETING may incorporate its business under the name "Getty
Petroleum Marketing Inc." MARKETING accepts the license subject to the terms and
conditions of this License Agreement.
B. Subject to the consent of REALTY, which consent shall not be
unreasonably withheld, MARKETING may sublicense the Licensed Marks to retailers
or wholesalers of petroleum and other related products and operators of
convenience stores, including but not limited to service station retailers,
jobbers and distributors, but only subject
2
<PAGE> 3
to the terms and conditions of this License Agreement all of which shall be
equally binding on the sublicensees. In determining the reasonableness of a
refusal to consent to a sublicense, the parties shall be guided by the
following considerations: (i) the parties shall not knowingly take any action
which would materially tarnish the image or cause a material adverse impact on
the value of the Licensed Marks; and (ii) the parties shall not permit the
indiscriminate proliferation of sublicensees which would cause the Licensed
Marks to lose significance as a source of origin. In connection with any
sublicense granted hereunder, the sublicensee shall be required to agree in
writing to be bound by and comply with all the terms and conditions of this
License Agreement. REALTY hereby consents to the sublicenses of the Licensed
Marks set out in Schedule B hereto and authorizes MARKETING to make amendments
and revisions in those sublicenses that are not of a material nature.
3. OWNERSHIP OF MARKS
MARKETING acknowledges REALTY's ownership of the Licensed Marks.
MARKETING agrees that it will do nothing inconsistent with such ownership and
that all use of the Licensed Marks by MARKETING shall inure to the benefit of,
and be on behalf of, REALTY. MARKETING agrees that nothing in this License
Agreement shall give MARKETING any right, title or interest in the Licensed
Marks other than the right to use the Licensed Marks in accordance with this
License Agreement. MARKETING agrees that it will not attack the title of
REALTY to the Licensed Marks or attack the validity of this License Agreement.
4. QUALITY STANDARDS
MARKETING agrees that the nature and quality of all services rendered by
MARKETING in connection with the Licensed Marks; all goods sold by MARKETING
3
<PAGE> 4
under the Licensed Marks; and all related advertising, promotional and other
related uses of the Licensed Marks by MARKETING shall conform to reasonable
standards set by and be under the control of REALTY. MARKETING agrees that the
quality of all such services, goods, and advertising and promotional materials
associated with the Licensed Marks shall be of the same high-level quality as
previously associated with the Licensed Marks. MARKETING further agrees that
the quality of all such services, goods, and advertising, promotional and other
related uses of the Licensed Marks shall conform with the standards,
specifications, and instructions as established by REALTY or such subsequent
standards, specifications, or instructions reasonably comparable thereto
promulgated by MARKETING subject to the approval of REALTY, such approval not
to be unreasonably withheld. Without limiting the foregoing, MARKETING agrees
to comply with the standards, specifications, and instructions set out in
Schedule C hereto, as may be modified from time to time in accordance with this
paragraph. If MARKETING intends to use the Licensed Marks on a new product
within the ambit of a particular registration it shall request approval for
such new product from REALTY at least thirty (30) days prior to initiating such
new product use, and such approval shall not be unreasonably withheld by
REALTY. REALTY shall provide MARKETING with notice of approval or
non-approval, as the case may be, within thirty (30) days of the receipt of the
notice with respect to MARKETING's intended new product.
5. QUALITY MAINTENANCE
MARKETING agrees to cooperate with REALTY in facilitating REALTY's control
of the nature and quality of goods, services and related uses associated with
the
4
<PAGE> 5
Licensed Marks, to permit reasonable inspection of MARKETING's operations,
and to supply REALTY with specimens of all uses of the Licensed Marks upon
request. MARKETING shall comply with all applicable laws and regulations and
will obtain all appropriate government approvals pertaining to the sale,
distribution and advertising of goods and services covered by this License
Agreement. REALTY shall have the right to enter and inspect service stations
of MARKETING that use the Licensed Marks. REALTY shall have the right to
receive from MARKETING, upon request and without charge, a reasonable number of
samples of products sold by MARKETING as well as labels, promotional materials,
advertising materials, sales materials and related materials using any of the
Licensed Marks.
6. FORM OF USE
MARKETING agrees to use the Licensed Marks only in the form, manner and
trade dress and with appropriate legends as prescribed from time to time by
REALTY, and not to use any other trademark, trade name, trade dress, or service
mark in combination with any of the Licensed Marks without prior written
approval of REALTY. REALTY hereby approves of the use of the Licensed Marks
used in combination with other trademarks, trade names, trade dress, or service
marks set out in Schedule D hereto. MARKETING shall submit to REALTY for prior
approval, all new or revised labels which are a material departure from those
presently used at least sixty (60) days prior to initiating use of a revised
or new label. REALTY's approval shall not be unreasonably withheld. REALTY
shall provide MARKETING with notice of approval or non-approval, as the case
may be, within
5
<PAGE> 6
thirty (30) days of the receipt of the notice with respect to MARKETING's
intended new or revised label.
7. TRADEMARK NOTICES
MARKETING will utilize on its products bearing the Licensed Marks,
packaging and advertising, whatever lawful notice is reasonably requested in
writing by REALTY in order to protect the Licensed Marks and properly designate
REALTY's legal ownership thereof. Without limiting the foregoing, MARKETING
agrees to utilize, where commercially practicable, a notice sufficient to
indicate that the utilized Licensed Mark is a registered trademark of Getty
Realty Corp. If REALTY does not request a particular trademark notice,
MARKETING shall utilize such notice as in the opinion of its counsel is
appropriate in order to protect the Licensed Marks and properly designate
REALTY's legal ownership thereof and the fact of registration thereof.
However, MARKETING shall advise REALTY of such intended notice, and make any
changes thereto reasonably requested by REALTY.
8. APPROVALS/PROTECTION OF THE LICENSED MARKS
In discharging their respective rights and obligations with respect to
Paragraphs 4, 5, 6, or 7 above, the parties shall be guided by the following
consideration: The parties shall not knowingly take any action which would
materially tarnish the image or cause a material adverse impact on the value of
the Licensed Marks including, without limitation, the indiscriminate
proliferation of uses of the Licensed Marks which would cause any of the
Licensed Marks to lose significance as a source of origin. If there is any
dispute as to either party's obligations with respect to Paragraphs 4, 5, 6, or
7 above, or the application thereof, the parties shall promptly consult to
resolve the matter. If the parties
6
<PAGE> 7
cannot resolve the matter, the dispute shall be submitted to arbitration in
accordance with paragraph 16 below and the arbitrator in that case shall be
guided by the same considerations described above in this Paragraph 8.
9. CONFLICTING TRADEMARKS
MARKETING will not at any time adopt or use, without REALTY's prior
written consent, any word, mark, or designation which is similar or likely to
be confused with any of the Licensed Marks.
10. FUTURE DOCUMENTS, RECORDING
AND TRADEMARK MAINTENANCE
A. The parties agree to cooperate in the execution and delivery, from
time to time, throughout the term of this License Agreement, of any documents
that may be reasonably required or desirable to effectuate and carry out the
purpose and intent of this License Agreement. Such documents shall include
instruments required to file, renew, protect, perfect and/or maintain the
Licensed Marks and REALTY's ownership therein, or to provide for the granting
of any license hereunder. Without limiting the generality of the foregoing,
REALTY shall enter MARKETING or its local designee or cause MARKETING or its
local designee to be entered as a registered user of the Licensed Marks
wherever necessary or desirable, and MARKETING and/or its local designee shall,
upon written request, execute such registered user agreements.
B. Except as provided in Paragraph 11 B below with respect to infringement
of the Licensed Marks by third parties, REALTY shall take such action as is
reasonably required or desirable to obtain and maintain appropriate protection
of the Licensed Marks applicable to MARKETING's business. Except as provided
in Paragraph 11 B below with respect to infringement of the Licensed Marks by
third parties, REALTY shall bear the
7
<PAGE> 8
full cost of all trademark filings, renewals, registered user entries and
actions to protect, perfect or maintain the Licensed Marks applicable to the
Marketing Business, including the attorney's and local agent's fees, taxes,
government filing and other fees.
11. INFRINGEMENT AND OTHER ACTIONS
A. The parties shall promptly notify each other of any claim that is
asserted, and of any action or proceeding that is threatened or commenced, in
which a third party (i) challenges MARKETING's right to use any of the Licensed
Marks, or (ii) alleges that any Licensed Mark infringes the trademark or trade
name rights of such third party, or (iii) in which the revocation, cancellation
or declaration of invalidity of any of the Licensed Marks is sought. REALTY
and MARKETING shall consult with respect to each such claim, action, or
proceeding, the assertion of counterclaims thereto and the settlement thereof
and shall jointly defend, in the name of REALTY and/or in the name of
MARKETING, each such action or proceeding that is commenced. If an action or
proceeding brought by a third party concerns the registrations and/or products
of both REALTY and MARKETING, both REALTY and MARKETING shall be responsible
for their pro rata share of legal expenses incurred in defending such action or
proceeding, said pro rata share to be determined by the proportion of products
and/or registrations at issue in the third party action or proceeding. If
there is a disagreement as to the appropriate pro rata share of legal expenses
to be borne by each party, the matter shall be submitted to arbitration in
accordance with paragraph 16 below. If the claim or action concerns only
products and/or registrations of MARKETING, MARKETING shall bear all legal
expenses incurred in defending such actions and proceedings and bear all
damages and costs, if any, recovered by the third party.
8
<PAGE> 9
B. REALTY and MARKETING will each undertake commercially reasonable efforts
to learn of any unauthorized uses of the Licensed Marks. Promptly upon
receiving notice or knowledge thereof, the parties shall notify each other of
any infringement or other violation by a third party of any of the Licensed
Marks. REALTY and MARKETING shall consult with respect to any such infringement,
and any action or proceeding, including opposition and cancellation actions,
that may be brought against such infringement. REALTY shall exercise its
discretion with respect to taking appropriate action including the bringing of
actions at REALTY's expense in the name of REALTY and/or MARKETING, but shall
not be obligated to take any action or institute any proceedings. If such
action or proceeding is commenced by REALTY, it shall promptly notify MARKETING
and MARKETING shall cooperate, including the defense of counterclaims, and
REALTY shall bear the expenses of MARKETING except for fees charged by any
attorneys retained solely by MARKETING in connection with such cooperation.
MARKETING shall be given an opportunity to participate with counsel of its
choice bearing its own legal and other costs.
In the event that REALTY determines not to commence such action or
proceeding at its expense, it shall promptly notify MARKETING. MARKETING may
then, at its expense, initiate such action or proceedings in its capacity as a
licensee of such Licensed Marks, provided however, that MARKETING must obtain
the prior written approval of REALTY regarding commencement of such action, such
consent not to be unreasonably withheld. The foregoing notwithstanding, in the
event of any unauthorized use of the Licensed Marks by one of MARKETING'S
sublicensees, MARKETING shall undertake efforts to cause the unauthorized use to
stop. In the event those efforts are
9
<PAGE> 10
unsuccessful, MARKETING shall, at its expense, initiate such action or
proceedings in its capacity as a licensee of such Licensed Marks with respect to
such unauthorized use. REALTY shall cooperate with MARKETING in any such
proceeding or action, including the defense of any counterclaims, and MARKETING
shall bear the expenses of REALTY, except for fees charged by any attorneys
retained solely by REALTY in connection with such cooperation. REALTY may, if
not a party, join in, with counsel of its own choice, bearing its own legal and
other costs. The party bringing any action or proceeding under this
sub-paragraph (B) shall keep the other party informed of the proceedings and
give the other party an opportunity to participate in any settlements, but the
final decision whether to settle the action or proceeding shall be made by the
party bringing the action or proceeding, subject to the approval of REALTY (if
not a party), such approval not to be unreasonably withheld. If within ten (10)
business days or such shorter time period as shall be reasonably practicable
under the circumstances REALTY does not approve a proposed settlement
recommended by MARKETING in good faith, REALTY shall be deemed to have taken
over responsibility for the action or proceeding, including subsequent legal
fees, awards against REALTY or MARKETING and expenses relating thereto. No
settlement by either party shall bind the other to make any payment or suffer
any loss of existing or future rights without such other party's consent, which
shall not be unreasonably withheld. Any recovery in such action or proceeding
shall be applied first to reimburse the party or parties for its or their legal
expenses in maintaining such action or proceeding. The excess shall belong to
the party maintaining the action or proceeding at the time such recovery is
awarded. If the action is brought jointly and the recovery is not sufficient to
reimburse REALTY and MARKETING
10
<PAGE> 11
for their legal expenses in such action, the unreimbursed portion of such legal
expenses shall be borne equally by each party.
12. TERM
This License Agreement shall continue in force and effect until
February 1, 2052 unless sooner terminated as provided for herein. Except as
provided in Paragraph 15 hereof, the license shall remain exclusive and
payment-free for so long as the Master Lease entered into between the parties
hereto of even date is in effect. In the event that the Master Lease
terminates prior to February 1, 2052, then this license shall, commencing on
the date that the Master Lease terminates, become: a) non-exclusive in all
areas, including the Licensed Territory; and b) a payment-bearing license
pursuant to which MARKETING shall pay to REALTY a rental fee for the use and
maintenance of Getty signage and related items based on the gross revenues
generated and/or gallonage sold under the Licensed Marks at a rate that is
reasonable and customary in the trade to be agreed in writing between the
parties. In the event that the parties are unable to agree to the rental fee,
the dispute shall be submitted to arbitration in accordance with Paragraph 16
below.
13. TERMINATION AND BREACH
This License Agreement shall be terminated: a) in the event of any
affirmative act of insolvency by MARKETING; or b) upon the appointment of any
receiver or trustee to take possession of the properties of MARKETING. REALTY
shall have the right to terminate this License Agreement either a) upon a
material default by MARKETING under the Master Lease which is not cured within
the cure periods specified therein; or b) upon a material default by MARKETING
with respect to its obligations under the Reorganization and Distribution
Agreement between the parties of even date which is not
11
<PAGE> 12
cured within the cure periods specified therein. In the event of any other
breach or threatened breach of this License Agreement, notice shall be given
and the parties shall promptly consult in good faith to cure such breach, with
the party at fault being given an adequate period of time to remedy the matter.
If such breach is not cured within sixty (60) days of the notice, the matter
may be submitted to arbitration in accordance with paragraph 16 below, which
may include a determination whether a material breach has occurred and/or been
cured. In the event the arbitrator determines that a material breach has
occurred, the arbitrator shall not be authorized to terminate this License
Agreement (except in the case of a material breach by MARKETING which creates a
substantial likelihood of loss of rights in the Licensed Marks) but shall be
authorized to issue any other order or award any other relief deemed
appropriate, including, without limitation, injunctive relief.
In the event of a material breach by MARKETING which creates a substantial
likelihood of loss of rights in the Licensed Marks, the arbitrator shall be
authorized to issue any order awarding any relief deemed appropriate,
including, without limitation, injunctive relief, and further providing that in
the event MARKETING fails to comply with the relief ordered within a specified
period of time, the license shall be terminated.
14. EFFECT OF TERMINATION
Upon termination of this License Agreement, MARKETING agrees: a) to
immediately discontinue all use of the Licensed Marks and any term confusingly
similar thereto, and to delete the same from its corporate or business name; b)
to cooperate with REALTY or its appointed agent to apply to the appropriate
authorities to cancel any recording of this License Agreement from all
government records; c) to destroy all printed materials and signs bearing any
of the Licensed Marks; d) that all rights in the Licensed
12
<PAGE> 13
Marks and the good will connected therewith shall remain the property of
REALTY; and (e) to cause all sub-licenses to terminate and all sublicensees to
immediately discontinue all use of the Licensed Marks and any term confusingly
similar thereto, and to delete the same from their respective business names,
if applicable.
15. GRANT OF OPTION(S)
In addition to the rights and obligations described above, and
subject to the terms and conditions set out herein, REALTY hereby grants to
MARKETING an option(s) that may be exercised at any time and from time-to-time
during the term hereof to expand the above-defined Licensed Territory to
include any other state of the United States in which MARKETING conducts its
Marketing Business. In the event that MARKETING exercises its option(s) to
expand the Licensed Territory to any additional states, all of the terms and
conditions of this License Agreement shall apply to such additional states,
except as follows: a) the licenses for the additional states shall be for
durations to be mutually agreed upon between the parties hereto but in no event
shorter than the term of the license granted within the Licensed Territories;
b) the license will be non-exclusive within those additional states; and c)
MARKETING will pay to REALTY a rental fee for the use and maintenance of Getty
signage and related items sales within those states based on the gross revenues
generated and/or gallonage sold under the Licensed Marks. These additional
terms will be agreed to in writing between the parties. In the event the
parties are unable to agree to these terms, then any dispute shall be submitted
to arbitration in accordance with Paragraph 16 below.
16. ARBITRATION
Any controversy or claim arising out of, or relating to this License
Agreement or its interpretation, performance or nonperformance or any breach
thereof, which the parties
13
<PAGE> 14
are unable to resolve between themselves, shall first be submitted to a single
arbitrator who shall be knowledgeable in marketing and trademark matters. The
arbitrator shall be mutually appointed by the parties, and shall not be bound
by rules of the American Arbitration Association, but shall adopt such
procedures as shall appear appropriate to expedite decision making, in order
that disputes may be resolved within commercially reasonable time periods. If
the parties cannot agree on the selection of the arbitrator, the arbitrator
shall be selected by The American Arbitration Association. Each party shall
bear its own costs in any such proceeding. The decision of the arbitrator
shall be final and binding upon the parties and may be enforced in any court of
competent jurisdiction.
17. GENERAL PROVISIONS
A. Assignability: This license may be assigned by either party to the
successor in interest or assignee of substantially all of its business or
assets, or the surviving party of any merger or consolidation to which it is a
party provided that the assignee of any assignment assumes all the assignor's
obligations hereunder. Apart from any assignment permissible under the
preceding sentences of this paragraph 17.1, MARKETING may not otherwise assign
the license granted herein or the obligations undertaken herein without the
prior written consent of REALTY, which consent shall not be unreasonably
withheld.
B. Notices: Any notice, approval, consent or other communication required
or permitted hereunder shall be in writing and shall be given by personal
delivery or telecopy, with acknowledgement of receipt, or by prepaid registered
mail, return receipt requested, addressed to the party at its address first
above written, to the attention of its General Counsel, or to any other address
that either party may subsequently designate, by notice in accordance with this
paragraph. Notices and other communications hereunder shall be
15
<PAGE> 15
deemed effective one (1) day after dispatch if personally delivered or
telecopied, and three (3) days after dispatch, if posted, subject to proof of
delivery.
C. Waiver: The waiver by any party of a breach or default of any
provision of this License Agreement by the other party shall not constitute a
waiver by such party of any succeeding breach of the same or other provision;
nor shall any delay or omission on the part of either party to exercise or
avail itself of any right, power or privilege that it has or may have
hereunder, operate as a waiver of any such right, power or privilege by such
party.
D. Governing Law: This License Agreement shall be governed by, subject
to and construed under the laws of the State of New York.
E. Unenforceability: In the event that any term, clause or provision of
this License Agreement shall be construed to be or adjudged invalid, void or
unenforceable, such term, clause or provision shall be construed as severed
from this License Agreement, and the remaining terms, clauses and provisions
shall remain in effect.
F. Association: The parties, by this License Agreement, do not intend to
create a partnership, principal/agent, master/servant, franchisor/franchisee,
or joint venture relationship, and nothing in this License Agreement shall be
construed as creating such a relationship between the parties. The parties
agree that this License Agreement does not create any franchise relationship
between them that is subject to the provisions of the Petroleum Marketing
Practices Act or any similar state or local government law.
G. Counterparts: This License Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute one and the same instrument.
15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this License Agreement
to be executed as of the day and year first above written.
GETTY REALTY CORP.
By:_______________________
Title:____________________
Date:_____________________
GETTY PETROLEUM MARKETING INC.
By:_______________________
Title:____________________
Date:_____________________
16
<PAGE> 17
SCHEDULE A
TRADEMARK LICENSE AGREEMENT
Trademarks, Service Marks and Trade Names
Getty Petroleum Marketing Inc.
Getty Supply Corp.
Getty Terminals Corp.
Also see attached list of Trademarks and Service Marks
<PAGE> 18
TRADE-MARKS AND SERVICE MARKS AND REGISTRATION NUMBERS
GETTY (Plain Lettering)
Registration No. 958,055
GETTY & DESIGN (Helvetic Script)
Registration No. 947,471
G & DESIGN (Helvetic Script)
Registration No. 957,175
GETTY PREMIUM
Registration No. 1,030,492
GETTY...THE VALUE LEADER IN FINE GASOLINES...AND MORE!
Registration No. 1,628,635
GETTY MART & DESIGN
Registration No. 1,480,165
GETTYMART...THE VALUE LEADER IN FINE PRODUCTS...AND MORE!
Registration No. 1,714,174
GETTY EXPRESS CHARGE
Registration No. 1,742,185
EXPRESS CHARGE
Registration No. 1,811,433
GETTY...THE VALUE LEADER IN FINE PRODUCTS...AND MORE
Registration No. 1,678,820
GETTY FLEET SMART
Registration No. 1,956,050
G (STYLIZED)
Registration No. 2,029,061
GETTY
Application Serial No. 74/330,713
GETTY AND DESIGN
Application Serial No. 74/330,714
GETTY ENERGY AND POWER
Application Pending.
"DV2"
Registration No. 1,680,938
POWER TEST & DESIGN
Registration No. 932,015
<PAGE> 19
POWER TEST
Registration No. 933,404
Registration No. 917,523
POWER TEST IN RECTANGLE
Registration No. 1,297,298
POWER TEST SHOWN DIAGONALLY
Registration No. 1,298,066
KWIK FARMS & DESIGN
Registration No. 1,288,389
<PAGE> 20
SCHEDULE B
LICENSED MARKS
WHICH MAY BE SUBLICENSED
See attached list.
<PAGE> 21
TRADE-MARKS AND SERVICE MARKS AND REGISTRATION NUMBERS
GETTY (Plain Lettering)
Registration No. 958,055
GETTY & DESIGN (Helvetic Script)
Registration No. 947,471
G & DESIGN (Helvetic Script)
Registration No. 957,175
GETTY PREMIUM
Registration No. 1,030,492
GETTY...THE VALUE LEADER IN FINE GASOLINES...AND MORE!
Registration No. 1,628,635
GETTY MART & DESIGN
Registration No. 1,480,165
GETTYMART...THE VALUE LEADER IN FINE PRODUCTS...AND MORE!
Registration No. 1,714,174
GETTY EXPRESS CHARGE
Registration No. 1,742,185
EXPRESS CHARGE
Registration No. 1,811,433
GETTY...THE VALUE LEADER IN FINE PRODUCTS...AND MORE
Registration No. 1,678,820
GETTY FLEET SMART
Registration No. 1,956,050
G (STYLIZED)
Registration No. 2,029,061
GETTY
Application Serial No. 74/330,713
GETTY AND DESIGN
Application Serial No. 74/330,714
GETTY ENERGY AND POWER
Application Pending.
"DV2"
Registration No. 1,680,938
POWER TEST & DESIGN
Registration No. 932,015
<PAGE> 22
POWER TEST
Registration No. 933,404
Registration No. 917,523
POWER TEST IN RECTANGLE
Registration No. 1,297,298
POWER TEST SHOWN DIAGONALLY
Registration No. 1,298,066
KWIK FARMS & DESIGN
Registration No. 1,288,389
<PAGE> 23
SCHEDULE C
STANDARDS AND SPECIFICATIONS
COMMINGLING
(a) Purchaser shall not mix any other product with Seller's Getty branded
product or mix one grade of Getty branded product with another grade of
Getty branded product or adulterate it in any way, except that, with
Seller's written consent, Purchaser may blend Getty Unleaded Regular and
Getty Premium so as to achieve a mid-grade of gasoline. Purchaser shall
not use the Getty trademarks, trade names, brand names, labels,
insignias, symbols or imprints in connection with the storage, handling,
dispensing or sale of any adulterated, mixed or substituted products.
(b) Purchaser will not allow or permit any of the operators of the stations
identified in Exhibit B, or any other approved station to sell Getty
branded products which are mislabeled, misbranded or contaminated, or
Getty product which has been commingled with a non-Getty supplied product
or substance, which is to be sold as a Getty branded product; nor will
Purchaser allow or permit the commingling of leaded with unleaded
gasoline; nor will Purchaser allow or permit the sale of unleaded
gasoline as leaded gasoline; nor will it allow the commingling of
different grades of Getty gasoline.
TRADEMARK PROTECTION
(a) Purchaser shall not sell gasoline or other petroleum products received
from any source other than the Getty brand of gasoline purchased directly
from Seller under the trademarks, service marks, trade names, brand
names, labels, insignias, symbols or imprints of Seller or used by Seller
in its business.
(b) Purchaser will not allow or permit any Getty branded gasoline stations
identified in Exhibit B or elsewhere to receive from any source other
than the Getty brand of product purchased directly from Seller any
product where that product is sold under the Getty trademarks, service
marks, trade names, brand names, labels, insignias, symbols or imprints
of Seller or used by Seller in its business.
EXCLUSIVITY - Purchaser shall sell only the Getty brand of product to
the stations identified in Exhibit B, and shall not sell a non-Getty brand of
gasoline. Nor will it allow or permit any operator of any Getty branded station
to purchase other than Seller's branded Getty product.
COMPLIANCE WITH LAW - Purchaser shall comply with all present and future
laws, orders and regulations of all governmental authorities with respect
to the storage and sale of products from any of the stations identified
in Exhibit B and in connection with the use of any equipment located thereon.
UNLEADED GASOLINES - Purchaser acknowledges that it shall be its
responsibility that unleaded gasoline is not contaminated and meats the
specifications of all governmental authorities. It shall not mix or allow
unleaded Getty gasoline to be mixed with any gasolines containing lead.
(a) Purchaser agrees that it will defend, indemnify and hold Seller harmless
from and against all present and future claims, demands, suits,
proceedings, and litigation arising out of any alleged liability for
Purchaser's storage of unleaded Getty gasolines in or through any
container, tank, pump, pipe or other element of its gasoline storage or
distribution system or the introduction of leaded gasoline into any motor
vehicle tank or compartment which is labeled "UNLEADED GASOLINE ONLY.";
Purchaser further agrees that it will, on Seller's demand, promptly pay
all losses, costs, damages, obligations, judgments, fines, penalties,
expenses and fees suffered or incurred by Seller by reason of any such
claims, demands, suits, actions, proceedings, or litigation, except those
which are caused by the sole negligence of Seller or its employees.
(b) Seller represents that unleaded Getty gasolines purchased by Purchaser
from Seller shall conform to Seller's specifications for same at the time
of delivery. Purchaser shall notify Seller immediately of any claim for
variance in quality, and Seller shall have an opportunity to inspect and
investigate at any time thereafter. Failure of Purchaser to so notify
Seller or to cooperate in any investigation shall operate as a waiver of
any and all claims by the Purchaser hereunder.
(c) In the event that Purchaser sells unleaded Getty gasolines to any other
person, firm or company for resale under Seller's corporate, trade or
brand name, Purchaser shall obtain from every such buyer for Seller's
benefit in writing the warranty and agreements stated in this Paragraph
13 and shall hold Seller harmless and indemnify Seller from any penalty,
cost, judgment, loss, fine or expense, including, but not limited to,
attorney's fees and court costs, which Seller may incur as the result of
the breach of the obligations of the Purchaser or any person, firm or
company buying Seller's gasolines for resale from Purchaser.
<PAGE> 24
RETAIL OUTLETS SUPPLIED BY PURCHASER - In the event Purchaser sells the
Getty branded gasolines to any other person, firm or company for resale under
Seller's corporate, trademark or trade names, Purchaser shall obtain from each
buyer its written contractual obligations requiring such other person, firm or
company to comply with the terms and obligations imposed upon Purchaser
pursuant to Paragraphs 9, 10, 11, 12, 13 and 15 of this Agreement. Purchaser
shall obtain from each and every buyer the written contractual right for Seller
and its employees and agents to enter such buyer's place or places of business
to make such inspections, to obtain such samples or to conduct such tests
necessary to determine compliance. This shall include examination of such
buyer's books and records of the purchase and sale and inventory of products.
MONITORING COMPLIANCE
(a) At Seller's option, Seller may require, after reasonable notice, that
Purchaser shall take, keep and maintain continuous meter readings of
all gasoline dispensing pumps located at each of the stations identified
in Exhibit B, and shall periodically examine the records of the station
operators of purchases and sales of products to determine that they are
not purchasing a non-Getty brand of gasoline. Purchaser shall take such
other necessary steps as may be reasonably requested by Seller, including
the placing of "seals" on the totalizer mechanisms of the dispensing
pumps to insure that they are tamper-proof. The meter readings for each
station shall be taken on a monthly basis for each station to determine
whether or not that station has sold more gasoline than was purchased by
Purchaser from Seller. The records of the meter readings shall be kept
by Purchaser for at least three (3) years from the date of taking, and
shall be made available to Seller, for inspection by its agents and
representatives, at any time. Upon Purchaser receiving information that
a station listed in Exhibit B has been selling more gasoline than was
purchased from Seller and delivered by Seller, Purchaser shall
immediately notify Seller in writing and shall supply Seller with any
documentary evidence. Purchaser shall thereupon terminate any
contractual arrangement with the operator of the station and either
operate the station itself or obtain a new operator.
(b) Seller, by its agents or designated representatives, shall have the
right to enter any business premises of Purchaser at any time during
normal business hours during the term of this Agreement and then for a
period of four (4) years after the expiration of this Agreement, to
inspect records, including but not limited to, documents evidencing the
purchase, transportation, delivery, inventory or sale of gasoline, or
such records compiled in accordance with Paragraph 15(a) above.
(c) Purchaser will allow Seller, its employees or agents, to enter
Purchaser's place of business at any time to make such inspections and
to obtain such samples or conduct such tests as may, in Seller's
judgment, be reasonably required to confirm that Purchaser is complying
with all its obligations under this Agreement, and Purchaser will
cooperate with Seller in any investigation of any alleged violations of
such obligations. In the event Purchaser sells Getty products to any
other person, firm, or company for resale under Seller's corporate, trade
or brand name, Purchaser shall obtain for every such buyer the written
contractual right for Seller, and for Purchaser and for their employees
or agents, to enter such buyer's place or places of business at any
reasonable time to make such inspections, to obtain such samples or
conduct such tests as necessary to determine that said unleaded Getty
gasolines comply with all relevant State and Federal regulations relating
to unleaded gasoline.
(d) Purchaser agrees and warrants that Purchaser will sample and test the
lead content of all gasoline in the storage tanks on any station listed
in Exhibit B containing unleaded Getty gasolines on a frequent and
regular basis, to assure that said products are in compliance with
relevant Federal Environmental Protection Agency Regulations pertaining
to unleaded gasoline. In the event that Purchaser sells unleaded Getty
gasolines to any other person, firm or company for resale under Seller's
corporate, trade or brand name, Purchaser shall likewise sample and test
on a regular and frequent basis and the lead content of such buyer's
unleaded Getty gasoline storage facilities. Purchaser shall keep accurate
records of all such samples and tests, and such records shall be
reasonably made available to Seller upon demand. Purchaser shall
immediately notify Seller if its tests indicate the presence of lead in
excess of amounts allowed by law in any unleaded Getty gasoline storage
facility, shall not sell or distribute said gasolines as unleaded, and
shall cause any such buyer to cease selling said gasolines as unleaded.
In the event Purchaser discovers any contamination, Purchaser shall make
every reasonable effort to inspect and correct any deficiency in its
gasoline storage and handling facilities, and shall cause any such buyer
to so inspect, and correct any such deficiency. In the event that
Purchaser does not have the facilities to test for lead content, it shall
so advise Seller and Seller may enter Purchaser's premises at any time to
conduct such test.
<PAGE> 25
MINIMUM STANDARDS - Purchaser recognizes that it is in the interest of
the parties to this Agreement for Purchaser to affirmatively conduct its
business to reflect favorably on the parties and to further promote public
acceptance of Seller's brand names, trademarks, products and services. In
recognition of such objectives, Purchaser agrees to conduct its operations and
cause its retail outlets and/or those served by Purchaser to be operated during
the term of the Agreement in accordance with the minimum standards set forth in
Exhibit C attached hereto and made part hereof.
In the event Purchaser or those supplied by him do not meet Seller's minimum
standards as set forth on Exhibit C, or if a retail facility served by
Purchaser is abandoned or unoccupied for a period of 30 days, Purchaser will
cause upon written demand by Seller, Getty identification to be removed from
such location(s) or automotive equipment (including painting over identifying
Getty colors) promptly, but no later than within five (5) days following the
date of the demand. Removal will be at Purchaser's expense. If Getty
identification is not removed within such time, Seller may, in addition to any
other right it has, cause the removal and charge Purchaser's account, who shall
reimburse Seller.
PAINTING - Purchaser shall at its expense paint all station and marketing
equipment for the dispensing of products, covered by this Agreement, in colors
and designs approved by Seller. Should the exterior appearance of any of
Purchaser's service stations require painting and the same is determined by
Seller to be detrimental to the Getty image, if Purchaser has not painted
after 20 days notice, Seller, at its option, shall have the right to paint
such service station and charge Purchaser for the cost of such painting,
who shall reimburse Seller. Upon termination of this Agreement, Purchaser shall
forthwith obliterate and discontinue the use of Getty's color schemes.
<PAGE> 26
EXHIBIT C
MINIMUM STANDARDS
Purchaser agrees to conduct its operation and the operations of retail outlets
owned, operated and/or served by Purchaser in accordance with the following
minimum standards.
1. PURCHASER'S OPERATIONS
(a) Purchaser will maintain its place of business inside and out,
including storage tanks, warehouse buildings, loading racks,
improvements and facilities thereon, in a good, clean, neat, safe,
painted, operative and first class condition and in accordance with
all applicable laws, rules and regulations.
(b) Purchaser will maintain all automotive equipment used in its
business in good, clean, safe, painted, operative and first class
condition and in compliance with all applicable laws, rules, and
regulations. Said equipment will be identified in accordance with
Seller's identification specifications as may be issued from time
to time.
(c) In the conduct of its operations, Purchaser will take reasonable
action to promote Seller's trade names and trademarks and the
branded products they represent and not operate its business in a
manner detrimental to the trademarks or trade names of Seller.
Purchaser shall provide in any agreement with retail outlets which
it serves that such retail outlet will not sell products other than
those of Getty under Getty's brand names or trademarks and if
such retail outlet does so, Purchaser shall provide in such
agreement the right to remove Getty's trademarks and identification
from such retail outlet.
(d) In the conduct of its operations, Purchaser will provide prompt,
efficient, courteous and diligent service to its retail outlets
and other customers.
2. RETAIL OUTLETS OPERATED AND/OR SERVED BY PURCHASER
(a) Premises including buildings, rest rooms, driveways, sidewalks,
grass or planting areas, and storage areas will be maintained
inside and out in good, clean, neat, safe and healthful condition
with all necessary painting and repairs being made thereto.
(b) Retail outlets will be equipped to provide services comparable
with competitive outlets of similar type, age and style. All
equipment will be kept neat, clean and in good repair. Pumps and
dispensers which dispense Seller's products shall be properly
identified with Seller's product decals and other decals which may
be required by applicable laws, rules and regulations. Seller's
trademarks, signs, logos and other identification will be kept
clean, in good repair and painted when required according to
Seller's specifications.
(c) Purchaser's operators or retailers, including employees at
retail outlets served by Purchaser, will at all times present a
good personal appearance, observe clean, neat and safe working
habits, render prompt, courteous and honest treatment to customers
and take reasonable action to promote Seller's trade names and
trademarks and the branded products they represent.
3. ADVERTISING
Purchaser shall obtain Seller's approval on signs and advertising
including color schemes.
<PAGE> 27
SCHEDULE D
LICENSED MARKS USED IN COMBINATION WITH OTHERS
WEX (Wright Express)
Uni-Marts
MBNA MasterCard
GasCard
Signs in conjunction with American Express, MasterCard, et al.
<PAGE> 1
EXHIBIT 10.31
SERVICES AGREEMENT
AGREEMENT, dated as of February 1, 1997 between GETTY REALTY CORP., a
Delaware corporation ("Realty"), and GETTY PETROLEUM MARKETING INC., a Maryland
corporation ("Marketing").
SUMMARY
Pursuant to a Reorganization and Distribution Agreement dated as of
__________,1997, (the "Distribution Agreement") between Realty and Marketing,
Realty is on the date hereof transferring to Marketing the Marketing Assets
and Marketing Business (as such terms are defined in the Distribution
Agreement) in anticipation of a distribution by Realty of the common stock of
Marketing to the stockholders of Realty. A condition of the closing of the
transactions contemplated by the Distribution Agreement is that Realty and
Marketing enter into a services agreement pursuant to which Marketing shall
provide certain services as agent for Realty and Realty shall provide certain
services as agent for Marketing.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, and intending to be legally bound hereby, the
parties agree as follows:
1. MARKETING SERVICES. Marketing agrees, as agent for Realty, to utilize
its employees and assets to provide certain services consistent with the type,
quality and level of such services required by Realty and provided by Getty
Petroleum Corp. immediately prior to the date hereof, in connection therewith.
The services to be provided are set forth below, together with the applicable
monthly charge for each such service:
<TABLE>
<CAPTION>
SERVICES MONTHLY CHARGE
-------------------------- --------------
<S> <C>
Financial Reporting $ 9,300.00
Accounting/Payroll $11,700.00
Data Processing/Computer $11,600.00
Tax $ 5,600.00
Legal $15,600.00
Treasury $ 4,600.00
Office Services $ 2,300.00
Human Resources $ 3,200.00
Engineering/Environmental $ 7,900.00
Investor Relations $ 3,900.00
Purchasing $ 700.00
Servicing of Non-Petroleum
Class "137 " Leases $ 5,500.00
</TABLE>
2. INVOICE AND PAYMENT. Marketing shall invoice Realty once each month
for the services performed during the prior month and Realty shall pay
Marketing for such services not later than ten (10) days from the receipt of
invoice. The amount paid shall be net of the amount owing to Realty under
Paragraphs 3 and 4.
3. REALTY SERVICES. Realty agrees that as agent for Marketing (i) Realty
will act as the permittee or licensee under all permits and licenses until such
time(s) as all permits and licenses are either
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<PAGE> 2
transferred to Marketing or new ones are issued therefor; (ii) Realty will
continue to act as the party at interest in all instances where contracts,
leases or the like are not assignable to Marketing or Realty has been unable to
obtain consent to assignment where consent is required; and (iii) Realty will
draw on all electronic funds transfer authorizations ("EFT") issued by third
parties to Realty and letters of credit in favor of Realty (collectively
hereinafter "draws") until such time as new EFT agreements and letters of
credit are issued, all for the benefit of Marketing. Marketing (x) will
reimburse Realty for any out-of-pocket expenses it may incur in performing such
services, and (y) will defend, indemnify and hold harmless Realty in the event
that any such draws made at Marketing's direction result in claims for damages
for wrongful draws made under clause (iii) above. The services to be provided
are set forth below together with the applicable monthly charge for each such
service.
<TABLE>
<CAPTION>
Services Monthly Charge
- ------------------------------------------------ --------------
<S> <C>
Servicing of Permits and Licenses $700.00
Servicing of Non-Assignable Contracts and Leases $700.00
Servicing of EFT Transfers and Letters of Credit $500.00
</TABLE>
4. OUTSIDE SERVICES; ADJUSTMENTS TO CHARGES. The charges for the
foregoing services to be performed hereunder shall be all-inclusive of supplies
and utilities required for such services, provided, however, that, if the level
of activity for any service should increase above the level required prior to
the date hereof, the party providing such service (the "providing party") shall
have the right to charge the other party for the additional supplies and
utilities being used, on a cost-plus 10% basis. In the event that the
providing party is required to retain outside consultant/contractor assistance
to perform any of the services hereunder, the providing party shall first
obtain the consent of the other party to such retention and the other party
shall pay directly the fees of such consultant/contractor. The providing party
shall not be held responsible for the performance of such consultant/contractor
services and the other party assumes the risk thereof. At any time the other
party desires reports, software, files or the like, the providing party shall
provide them to the other party at cost.
The services to be performed hereunder shall be performed and used in
compliance with the applicable provisions of the Distribution Agreement.
The parties hereto agree that once every six (6) months they will review the
foregoing monthly charges and, if it is mutually determined in good faith that
certain monthly charge(s) do not correctly compensate the providing party for
the service(s) rendered, the monthly charge(s) shall be increased or reduced,
as the case may be.
5. CONTRACTUAL RELATIONSHIP. The relationship between Realty and
Marketing under this Agreement shall be that of principal and agent in respect
of the services to be performed hereunder. In no event is the relationship of
the parties intended to be that of employer and employee and in no event is
either party to be deemed or purported to be the partner or joint venturer of
the other for any purpose whatsoever.
6. TERM. The term of this Agreement shall be two (2) years from the
date hereof, provided, however, that, upon one hundred and twenty (120) days
notice (i) to Realty, Marketing shall have the right to terminate any or all of
the services set forth in Paragraph 1; and (ii) to Marketing, Realty shall have
the right to terminate any or all of the services set forth in Paragraph 3. In
the event of partial termination, the monthly charge for such terminated
service shall cease upon the effective date of the partial termination. Realty
understands and agrees that certain services (e.g. Data Processing) cannot be
terminated if other services (e.g. Accounting ) are to continue and that
"Office Services" cannot be terminated while Realty is subleasing office
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<PAGE> 3
space in the Jericho Building. Upon the termination of all services,
payment therefor and payment of all consultants/contractors, this Agreement
shall terminate.
7. LIMITATION OF LIABILITY. Neither party shall have any liability
whatsoever to the other party or to any third party for any loss, liability,
damage, cost or deficiency (collectively "Losses"), or for any claim for
Losses, including, without limitation, Losses or claims for personal injury,
death or property damage, warranty, tort or products liability, resulting from,
caused by or arising out of a party's performance under this Agreement except
for claims arising out of the negligence or willful default or breach of such
party hereunder. In no event shall any party have liability to to the other
party or to any third party for indirect, special or consequential damages or
loss of profits (except with respect to its willful default or breach), or for
punitive damages for any reason whatsoever.
8. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile
transmission, telexed or mailed by overnight delivery service or by registered
or certified mail (return receipt requested), postage prepaid, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) if to Getty Realty Corp.:
125 Jericho Turnpike
Jericho, New York 11753
Attention: President
(b) if to Getty Petroleum Marketing Inc.:
125 Jericho Turnpike
Jericho, New York 11753
Attention: President
9. ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other party (other than
to an affiliate of Marketing ). Any purported assignment in violation of the
provisions hereof shall be void.
10. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable New York conflict of laws principles) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
11. SUITS IN NEW YORK. The parties agree that any action or proceeding
relating in any way to this Agreement shall be brought and enforced in the
Supreme Court of the State of New York for Nassau County or the United States
District Court for the Eastern District of New York and the parties hereby
waive any objection to jurisdiction or venue in any such proceeding commenced
in such court.
12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the
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<PAGE> 4
meaning or interpretation of this Agreement.
14. SEVERANCE. In the event that any provision of this Agreement is
declared illegal, invalid or unenforceable or contrary to law, it shall not
affect any other provision in the Agreement.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to the transactions contemplated hereby.
IN WITNESS WHEREOF, each of Realty and Marketing has caused this
Agreement to be executed by its duly authorized officer as of the date first
above written.
GETTY REALTY CORP.
By: _________________________
President
GETTY PETROLEUM MARKETING INC.
By: __________________________
President
4
<PAGE> 1
EXHIBIT 10.32
TAX SHARING AGREEMENT
TAX SHARING AGREEMENT, dated as of , 1997, among Getty
Petroleum Corp., a Delaware corporation ("Getty"), Getty Petroleum Marketing
Inc., a Maryland corporation ("Marketing"), and their direct and indirect
subsidiaries which are listed on the signature pages below. References herein
to a "party" (or "parties") to this Agreement, shall refer to Getty, Marketing
and, where appropriate and the context so requires, their subsidiaries.
WHEREAS, Getty and its subsidiaries have joined in the filing of
consolidated federal Tax Returns and certain consolidated, combined or unitary
state or local Tax Returns; and
WHEREAS, Getty and Marketing have entered into that certain Reorganization
and Distribution Agreement, dated as of the date hereof (the "Distribution
Agreement"), pursuant to which Getty will distribute all of the outstanding
common stock in Marketing to its stockholders in a transaction intended to
qualify for tax-free treatment under section 355 of the Code (the "Spin-off");
and
WHEREAS, pursuant to the Distribution Agreement, Marketing and its
subsidiaries will leave the Pre-Spin-off Group; and
WHEREAS, in connection with the Spin-off, Getty will change its name to
Getty Realty Corp. ("Realty") and will be referred to herein as Getty or
Realty, as the context requires; and
WHEREAS, the parties hereto wish to provide for (i) allocations of, and
indemnifications against, certain liabilities for Taxes, (ii) the preparation
and filing of Tax Returns on a basis consistent with prior practice and the
payment of Taxes with respect thereto, and (iii) certain related matters;
NOW THEREFORE, in consideration of their mutual promises, the parties
hereby agree as follows:
1. DEFINITIONS.
When used herein the following terms shall have the following meanings:
"Affiliate" -- with respect to any corporation (the "given corporation"),
each person, corporation, partnership or other entity that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the given corporation. For purposes of this
definition, "control" means the possession, directly or indirectly, of 50% or
more of the voting power or value of outstanding voting interests.
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<PAGE> 2
"Affiliated Group" -- an affiliated group of corporations within the
meaning of section 1504(a) of the Code for the Taxable Period or, for purposes
of any state income tax matters, any consolidated, combined or unitary group of
corporations within the meaning of the corresponding provisions of tax law for
the state in question.
"Closing" -- the time at which the Spin-off shall become effective on the
Closing Date.
"Closing Date" -- the date on which the Spin-off is effected by Getty.
"Code" -- the Internal Revenue Code of 1986, as amended, or any successor
thereto, as in effect for the Taxable Year in question.
"Combined Jurisdiction" -- for any Taxable Period, any state, local or
foreign jurisdiction in which Getty or a Getty Affiliate is included in a
consolidated, combined, unitary or similar return with Getty or any Getty
Affiliate for state or local Tax purposes.
"Distribution Agreement" -- as defined in the preamble to this Agreement.
"Final Determination" -- (i) a decision, judgment, decree, or other order
by a court of competent jurisdiction, which has become final and unappealable;
(ii) a closing agreement or accepted offer in compromise under Code Sections
7121 or 7122, or comparable agreements under the laws of other jurisdictions;
(iii) any other final settlement with the IRS or other Taxing Authority; or
(iv) the expiration of an applicable statute of limitations.
"Getty"-- as defined in the preamble to this Agreement.
"Information Return(s)" -- with respect to any corporation or Affiliated
Group, any and all reports, returns, declarations or other filings (other than
Tax Returns) required to be supplied to any Tax Authority.
"IRS" -- the Internal Revenue Service.
"Marketing"-- as defined in the preamble to this Agreement.
"Marketing Group" -- Marketing and each corporation that joins with
Marketing in filing a consolidated federal income tax return for any
Post-Closing Taxable Period. For purposes of this Agreement, the Marketing
Group shall exist from the beginning of the day immediately after the Closing
Date.
"Marketing Member" -- a corporation that was a Pre-Spin-off Member and
becomes a member of the Marketing Group at the beginning of the day immediately
after the Closing Date.
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"Net Tax(es)" -- Taxes (as defined herein) less any related interest or
penalty attributed to such Taxes.
"Overdue Rate" -- a rate of interest per annum that equals the 30-day
LIBOR rate plus 400 basis points.
"Post-Closing Straddle Period" -- with respect to any Straddle Period, the
period beginning on the day after the Closing Date and ending on the last day
of such Taxable Year.
"Post-Closing Taxable Period" -- a Taxable Year that begins on or after
the day immediately after the Closing Date.
"Pre-Closing Straddle Period" -- with respect to any Straddle Period, the
period beginning on the first day of such Taxable Year and ending on the close
of business on the Closing Date.
"Pre-Closing Taxable Period" -- a Taxable Year that ends at or before the
close of business on the Closing Date.
"Preliminary Transactions" -- those certain transactions occurring on or
before the Closing Date that are described as "Preliminary Transactions" in the
request for rulings filed with the IRS, dated as of March 12, 1996, as
supplemented by subsequent submissions.
"Pre-Spin-Off Affiliate" -- any Affiliate of any Pre-Spin-Off Member.
"Pre-Spin-off Group" -- Getty and each corporation that joined with Getty
in filing a consolidated federal income tax return for any Pre-Closing Taxable
Period. For purposes of this Agreement, the Pre-Spin-off Group shall terminate
at the close of business on the Closing Date.
"Pre-Spin-off Member" -- a corporation that was a member of the
Pre-Spin-off Group at the close of business on the Closing Date.
"Realty"-- as defined in the preamble to this Agreement.
"Realty Group" -- Realty and each corporation that joins with Realty in
filing a consolidated federal income tax return for any Post-Closing Taxable
Period. For purposes of this Agreement, the Realty Group shall exist from the
beginning of the day immediately after the Closing Date.
"Realty Member" -- a corporation that was immediately before the Spin-off
a Pre-Spin-off Member and becomes a member of the Realty Group at the beginning
of the day immediately after the Closing Date.
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"Representative" -- with respect to any person or entity, any of such
person's or entity's directors, officers, employees, agents, consultants,
accountants, attorneys and other advisors.
"Separate Return Basis" -- the Tax liability for the Marketing Group (or
any Marketing Member) calculated with Marketing as the common parent of the
Affiliated Group and without regard to any Realty Members.
"Spin-off" -- as defined in the Preamble to this Agreement.
"Straddle Period" -- any Taxable Year beginning before and ending after
the close of business on the Closing Date.
"Tax(es)" -- with respect to any corporation or group of corporations, any
and all taxes based upon or measured by net income, gross income, gross
receipts (when levied in lieu of an income tax) or alternative minimum taxable
income, capital or net worth, or motor fuel taxes, regardless of whether
denominated as an "income tax," a "franchise tax" or otherwise, imposed by any
Taxing Authority, whether any such tax is imposed directly or through
withholding, together with any interest and any penalty, addition to tax or
additional amount.
"Taxable Period" -- a Pre-Closing Taxable Period, a Post-Closing Taxable
Period or a Straddle Period.
"Taxable Year" -- a taxable year (which may be shorter than a full
calendar or fiscal year), year of assessment or similar period with respect to
which any Tax may be imposed.
"Tax Benefit(s)" -- (i) in the case of a Tax for which a consolidated
federal, or a consolidated, combined or unitary state or other, Tax Return is
filed, the amount by which the Tax liability of the Affiliated Group or other
relevant group of corporations is actually reduced on a "with and without"
basis (by deduction, entitlement to refund, credit, offset or otherwise,
whether available in the current Taxable Year, as an adjustment to taxable
income in any other Taxable Year or as a carryforward or carryback, and
including the effect of such reduction on other Taxes), plus any interest
received with respect to any related Tax refund, and (ii) in the case of any
other Tax, the amount by which the Tax liability of a corporation is actually
reduced on a "with and without" basis (as a result of a deduction, entitlement
to refund, credit, offset or otherwise, whether available in the current
Taxable Year, or as an adjustment to taxable income in any other Taxable Year
or as a carryforward or carryback, and including the effect of such reduction
on other Taxes), plus any interest received with respect to any related Tax
refund.
"Taxing Authority" -- the IRS and any other domestic or foreign
governmental authority responsible for the administration of any Tax.
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"Tax Practices" -- the most recently applied policies, procedures and
practices employed by the Pre-Spin-off Group in the preparation and filing of,
and positions taken on, any Tax Returns of Getty or any Pre-Spin-off Member or
Pre-Spin-off Affiliate for any Pre-Closing Taxable Period.
"Tax Return(s)" -- with respect to any corporation or Affiliated Group,
all returns, reports, estimates, information statements, declarations and other
filings relating to, or required to be filed in connection with, the payments
or refund of any Tax for any Taxable Period.
2. OBLIGATIONS, RESPONSIBILITIES AND RIGHTS OF REALTY AND MARKETING.
(a) Preparation and Filing of Tax Returns.
(i) By Realty. Realty shall prepare and timely file (or cause
to be prepared and timely filed):
(A) all Tax Returns and Information Returns of the Pre-
Spin-off Group and any Pre-Spin-off Member that are required to be filed on or
before the Closing Date (without regard to extensions of time);
(B) all Tax Returns and Information Returns of the Pre-
Spin- off Group and any Pre-Spin-off Member for all Pre-Closing Taxable Periods
that are not required to be filed on or before the Closing Date (without
regard to extensions of time);
(C) all Tax Returns and Information Returns of the Realty
Group and any Realty Member for all Straddle Periods and Post-Closing Taxable
Periods; and
(D) all Tax Returns and Information Returns with respect to
Pre-Closing Taxable Periods or Straddle Periods not otherwise required to be
filed by Realty or Marketing pursuant to this Section 2(a)(i) and Section 2(a)
(ii).
(ii) By Marketing. Marketing shall prepare and timely file (or
cause to be prepared and timely filed):
all Tax Returns and Information Returns of the Marketing
Group and any Marketing Member for all Straddle Periods and Post-Closing
Taxable Periods.
(b) Provision of Filing Information. Each party shall cooperate and
assist the other party in the preparation and filing of all Tax and Information
Returns subject to Section 2(a) and submit to the other party (i) all necessary
filing information in a manner consistent with past Tax Practices and (ii) all
other information reasonably requested by the other party in connection with
the preparation of such Tax and Information Returns promptly after such request.
(c) Taxable Year. Marketing and Realty agree that, for Tax purposes,
(i) each Marketing Member shall be included in the consolidated federal Tax
Return of the Pre-
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Spin-off Group for the Taxable Year of such Marketing Member that includes the
close of business on the Closing Date (and in all corresponding consolidated,
combined or unitary state or other Tax Returns of the Pre-Spin-off Group) and
(ii) the Marketing Group and each Marketing Member shall begin a new Taxable
Year for purposes of such federal and, to the extent permitted by law, state
Taxes on the day after the Closing Date. The parties further agree that, to
the extent permitted by applicable law, all federal, state or other Tax Returns
shall be filed consistently with that position.
(d) Straddle Period Taxes.
(i) For purposes of this Agreement, Taxes shall be allocated
between the Pre- and Post-Closing Straddle Periods under a method selected by
Realty (including a ratable method) permitted under applicable law.
(ii) Realty shall pay to Marketing within fourteen (14) days
after receipt of an executed Straddle Period Tax Return prepared by Marketing
pursuant to Section 2(a)(ii), the excess of any amount so allocated (based on
the amount of Tax shown on such Tax Return) to the Pre-Closing Straddle Period
over the amount of any estimated Taxes previously paid by any Pre-Spin-off
Member to the relevant Taxing Authority prior to the Closing Date; or Marketing
shall pay to Realty within fourteen (14) days after the filing of such Tax
Return the excess of the amount of any estimated Taxes previously paid by any
Pre-Spin-off Member to the relevant Taxing Authority prior to the Closing Date
over the amount so allocated to such Period.
(e) Payment of Taxes. Realty shall pay (i) all Taxes shown to be due
and payable on all Tax Returns filed by Realty pursuant to Section 2(a)(i)
here of and (ii) subject to Section 3, all Taxes that shall thereafter become
due and payable with respect to all Tax Returns filed pursuant to Section 2(a)
(i) as a result of a Final Determination. Marketing shall pay all Taxes
attributable to all Tax Returns filed by Marketing pursuant to Section 2(a)(ii)
hereof.
(f) Amendments to Tax Returns. No Tax Returns for any Pre-Closing
Taxable Periods may be amended without Realty's and Marketing's consent, which
consent shall not be unreasonably withheld.
(g) Refunds of Taxes and Tax Benefits.
(i) Realty shall be entitled to any refund of Taxes and any Tax
Benefits realized as a result of a Final Determination with respect to all Tax
Returns filed by Realty pursuant to Section 2(a)(i). Marketing shall be
entitled to any refund with respect to all Tax Returns filed by Marketing
pursuant to Section 2(a)(ii). Any such refunds attributable to a Straddle
Period shall be allocated between the Pre-Closing Straddle Period and Post-
Closing Straddle Period on a basis consistent with the method used to allocate
the Tax liability for such Straddle Period. With respect to Straddle Period
Tax Returns prepared by Marketing pursuant to Section 2(a)(ii), Realty shall be
entitled to any refund attributable to a Pre-Closing Straddle Period.
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(ii) If Realty or any Realty Member receives a Tax refund or Tax
Benefit to which Marketing or any Marketing Member is entitled pursuant to this
Agreement, Realty shall pay (in accordance with Section 4) the amount of such
Tax refund or Tax Benefit to Marketing within fourteen (14) days of receipt
thereof.
(iii) Except as otherwise provided in this Agreement, if
Marketing or any Marketing Member receives a Tax refund or Tax Benefit to which
Realty or any Realty Member is entitled pursuant to this Agreement, Marketing
shall pay (in accordance with Section 4) the amount of such Tax refund or Tax
Benefit (including any interest received thereon) to Realty within fourteen
(14) days of receipt thereof.
(h) Carrybacks. Marketing shall not file any carryback claim for
federal Taxes or state or local Taxes in a Combined Jurisdiction for the
Marketing Group or any Marketing Member into a Pre-Closing Taxable Period
without the prior written consent of Realty, which consent shall not be
unreasonably withheld.
3. INDEMNIFICATION.
(a) By Realty.
(i) Taxes. Except as provided in Section 3(b), Realty shall
indemnify and hold Marketing and Marketing Members harmless against any and
all (A) Taxes attributable to all Tax Returns filed by Realty pursuant to
Section 2(a)(i), (B) with respect to Straddle Period Tax Returns prepared by
Marketing pursuant to Section 2(a)(ii), Taxes attributable to Pre-Closing
Straddle Periods as shown on such Tax Returns, and (C) Taxes attributable to
the Spin-off or the Preliminary Transactions.
(ii) Liability Under Treasury Regulation Section 1.1502-6.
Except as provided in Sections 3(a)(i) and 3(b), Realty shall indemnify and hold
Marketing and the Marketing Members harmless against each and every liability
for Taxes of the Pre-Spin-off Group under Treasury Regulation Section 1.1502-6
or any similar law, rule or regulation administered by any Taxing Authority.
(b) By Marketing. Marketing shall indemnify and hold Realty and
Realty Members harmless against any and all Taxes attributable to all Tax
Returns filed by Marketing pursuant to Section 2(a)(ii) (but excluding Taxes
attributable to Pre-Closing Straddle Periods that are shown on any Straddle
Period Tax Returns).
(c) Certain Reimbursements. Marketing (or Realty, as the case may be)
shall notify Realty (or Marketing) of any Taxes paid by the Marketing Group or
any Marketing Member (or the Realty Group or any Realty Member) which are
subject to indemnification under this Section 3. To the extent not otherwise
provided in this Section 3, any other notification contemplated by this Section
3(c) shall include a detailed calculation (including, if applicable, separate
allocations of such Taxes between Pre- and Post-Closing Taxable Periods and
Pre- and Post-Closing Straddle Periods and supporting work papers) and a brief
explanation of the basis for indemnification hereunder. Whenever a
notification described in this Section
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3(c) is given, the notified party shall pay the amount requested in such notice
to the notifying party in accordance with Section 4, but only to the extent
that the notified party agrees with such request. To the extent the notified
party disagrees with such request, it shall, within 20 business days, so
notify the notifying party, whereupon the parties shall use their best efforts
to resolve any such disagreement. Any payment made after such 20 business day
period shall include interest from the date such payment would have been made
under Section 4 based upon the original notice given by the notifying party,
at the Overdue Rate calculated as of such date.
(d) Other Indemnifications. Notwithstanding the foregoing, the
indemnification provisions in this Agreement shall not restrict the scope of
any other indemnification provisions between any Realty Member and any
Marketing Member as set forth in any other intercompany agreements entered into
in connection with the Spin-off or the Preliminary Transactions, including, but
not limited to, the Distribution Agreement.
4. METHOD, TIMING AND CHARACTER OF PAYMENTS REQUIRED BY THIS
AGREEMENT.
(a) Payment in Immediately Available Funds; Interest. All
payments made pursuant to this Agreement shall be made in immediately available
funds. Except as otherwise provided herein, any payment not made within
fourteen (14) days of when due shall thereafter bear interest from the date
such payment was due at the Overdue Rate calculated as of such date.
(b) Characterization of Payments. Any payment (other than
interest thereon) made hereunder by Realty to Marketing or by Marketing to
Realty shall be treated by all parties for Tax purposes to the extent permitted
by law, and for accounting purposes to the extent permitted by generally
accepted accounting principles, as non-taxable dividend distributions or
capital contributions, as the case may be, made prior to the close of business
on the Closing Date.
5. TAX RETURNS; COOPERATION; DOCUMENT RETENTION; CONFIDENTIALITY.
(a) Provision of Cooperation, Documents and Other Information.
Upon the reasonable request of any party to this Agreement, Realty and
Marketing shall provide (and shall cause the members of their respective
Affiliated Groups to provide) the requesting party, promptly upon request, with
such cooperation and assistance, documents, and other information, without
charge, as may reasonably be requested by such party in connection with (i) the
preparation and filing of any original or amended Tax Return, (ii) the conduct
of any audit or other examination or any judicial or administrative proceeding
involving to any extent Taxes or Tax Returns within the scope of this
Agreement, or (iii) the verification by a party of an amount payable hereunder
to, or receivable hereunder from, another party. Such cooperation and
assistance shall include, without limitation: (i) the provision on demand of
books, records, Tax Returns, documentation or other information relating to any
relevant Tax Return; (ii) the execution of any document that may be necessary
or reasonably helpful in connection with the filing of any Tax Return, or in
connection with any audit, proceeding, suit or action of the type generally
referred to in the preceding sentence, including, without limitation, the
execution of powers of attorney and extensions of applicable statutes of
limitations, with respect to Tax
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Returns which Realty may be obligated to file on behalf of Marketing
Members pursuant to Section 2(a); (iii) the prompt and timely filing of
appropriate claims for refund; and (iv) the use of reasonable efforts to obtain
any documentation from a governmental authority or a third party that may be
necessary or helpful in connection with the foregoing. Each party shall make
its employees and facilities available on a mutually convenient basis to
facilitate such cooperation.
(b) Retention of Books and Records. Realty, each Realty Member,
Marketing and each Marketing Member shall retain or cause to be retained all
Tax Returns, and all books, records, schedules, workpapers, and other documents
relating thereto, until the expiration of the later of (i) all applicable
statutes of limitations (including any waivers or extensions thereof), and (ii)
any retention period required by law or pursuant to any record retention
agreement. The parties hereto shall notify each other in writing of any waivers,
extensions or expirations of applicable statutes of limitations. The parties
shall provide written notice of any intended destruction of the documents
referred to in this subsection. A party giving such a notification shall not
dispose of any of the foregoing materials without first offering to transfer
possession thereof to all notified parties.
(c) Status and Other Information Regarding Audits and Litigation.
Each party shall use reasonable efforts to keep the other party advised, as to
the status of Tax audits and litigation involving any issue relating to any
Taxes, Tax Returns or Tax Benefits subject to indemnification under this
Agreement. To the extent relating to any such issue, each party shall promptly
furnish the other party copies of any inquiries or requests for information
from any Taxing Authority or any other administrative, judicial or other
governmental authority, as well as copies of any revenue agent's report or
similar report, notice of proposed adjustment or notice of deficiency.
(d) Confidentiality of Documents and Information. Except as
required by law or with the prior written consent of the other party, all Tax
Returns, documents, schedules, work papers and similar items and all information
contained therein, which Tax Returns and other materials are within the scope
of this Agreement, shall be kept confidential by the parties hereto and their
Representatives, shall not be disclosed to any other person or entity and shall
be used only for the purposes provided herein.
6. CONTESTS AND AUDITS.
(a) Notification of Audits or Disputes. Upon the receipt by a
party of notice of any pending or threatened Tax audit or assessment which may
affect the liability for Taxes that are subject to indemnification hereunder,
such party shall promptly notify the other party in writing of the receipt of
such notice.
(b) Control and Settlement. Realty shall have the right and
obligation to control, and to represent the interests of all affected taxpayers
in, any Tax audit or administrative, judicial or other proceeding relating, in
whole or in part, to any Pre-Closing Taxable Period or any other Taxable Period
for which Realty is responsible, in whole or in part, for Taxes under Sections
2(e) and (3), and to employ counsel of its choice; provided, however, that,
with respect to such issues that may cause an indemnity payment, Realty (i)
shall in good faith
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consult with Marketing as to the handling and disposition of such issues
and (ii) shall not enter into any settlement that impacts Marketing or any
Marketing Member for any taxable period without the written consent of
Marketing, which consent shall not be unreasonably withheld; and provided,
further, that Marketing shall deliver to Realty a written response to any
notification by Realty of a proposed settlement within ten days of the receipt
of such notification. If Marketing fails to so respond within such ten day
period, Marketing shall be deemed to have consented to the proposed settlement.
(c) Delivery of Powers of Attorney and Other Documents.
Marketing shall execute and deliver to Realty, promptly upon request, powers
of attorney authorizing Realty to extend statutes of limitations, receive
refunds, negotiate settlements and take such other actions that Realty
reasonably considers to be appropriate in exercising its control rights
pursuant to Section 6(b), and any other documents reasonably necessary to
effect the exercising of such control rights.
7. MISCELLANEOUS.
(a) Effectiveness. This Agreement shall be effective from and
after the Closing Date and shall survive until the expiration of any applicable
statute of limitations; provided, however, that this Agreement shall terminate
immediately upon a termination of the Distribution Agreement in accordance with
the terms of Section 11.07 thereof and thereafter this Agreement shall be of
no further force and effect.
(b) Entire Agreement. This Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof.
This Agreement terminates and supersedes, on a prospective basis only, any and
all other sharing or allocation agreements with respect to Taxes in effect at
the time between the Pre-Spin-off Group and the Marketing Members, but shall
not affect any such agreement to the extent applicable only among Realty
Members.
(c) Guarantees of Performance. Realty and Marketing hereby
guarantee the complete and prompt performance by the members of their
respective Affiliated Groups of all of their obligations and undertakings
pursuant to this Agreement. If, subsequent to the close of business on the
Closing Date, either Realty or Marketing shall be acquired by another entity
such that 50% or more of its common stock is in common control with such
acquirer, such acquirer shall, by making such acquisition, simultaneously
agree to jointly and severally guarantee the complete and prompt performance by
the acquired corporation and any Affiliate of the acquired corporation of all
of their obligations and undertakings pursuant to this Agreement.
(d) Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions hereof without including any of such
which may
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hereafter be declared invalid, void or unenforceable. In the event that any
such term, provision, covenant or restriction is hereafter held to be invalid,
void or unenforceable, the parties hereto agree to use their best efforts to
find and employ an alternate means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.
(e) Indulgences, etc. Neither the failure nor any delay on the
part of any party hereto to exercise any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise of the same or any other right,
nor shall any waiver of any right with respect to any occurrence be construed
as a waiver of such right with respect to any other occurrence.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to the conflict of law principles thereof.
(g) Notices. All notices and other communications hereunder
shall be in writing and shall be delivered by hand or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such notice is received:
To Marketing:
Getty Petroleum Marketing, Inc.
125 Jericho Turnpike Jericho,
New York 11753
Attention: __________________
To Getty:
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
Attention: __________________
(h) Modification or Amendment. This Agreement may be amended at
any time by written agreement executed and delivered by duly authorized
officers of Marketing and Realty.
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(i) Successors and Assigns. A party's rights and obligations
under this Agreement may be assigned to the successor in interest or assignee of
substantially all of its business or assets, or the surviving party of any
merger or consolidation to which it is a party, provided that the assignee of
any assignment assumes all the assignor's obligations hereunder. Apart from
any assignment permissible under the preceding sentence, a party's rights and
obligations under this Agreement may not be assigned without the prior written
consent of the other party. All of the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.
(j) No Third-Party Beneficiaries. This Agreement is solely for
the benefit of the parties to this Agreement and their respective Affiliates and
should not be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without this Agreement.
(k) Other. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all of such counterparts shall together constitute one and the same
instrument. The section numbers and captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
(l) Predecessors and Successors. To the extent necessary to
give effect to the purposes of this Agreement, any reference to any
corporation, Affiliated Group or member of an Affiliated Group shall also
include any predecessors or successors thereto, by operation of law or
otherwise.
(m) Tax Elections. Nothing in this Agreement is intended to
change or otherwise affect any previous tax election made by or on behalf of the
Pre-Spin-off Group (including the election with respect to the calculation of
earnings and profits under Code Section 1552 and the regulations thereunder).
Realty, as common parent of the Realty Group, shall continue to have
discretion, reasonably exercised, to make any and all elections with respect to
all members of the Pre-Spin-off Group for all Pre-Closing Taxable Periods for
which it is obligated to file Tax or Information Returns under Section 2(a)(i).
(n) Injunctions. The parties acknowledge that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or were otherwise
breached. The parties hereto shall be entitled to an injunction or injunctions
to prevent breaches hereto and to enforce specifically the terms and provisions
hereof in any court having jurisdiction; such remedy shall be in addition to
any other remedy available at law or in equity.
(o) Further Assurances. Subject to the provisions hereof, the
parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be
reasonably required in order to effectuate the purposes of this Agreement and
to consummate the transactions contemplated hereby. Subject to the provisions
hereof, each party shall, in connection with entering into this Agreement,
performing its obligations hereunder and taking any and all actions relating
hereto, comply with all
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applicable laws, regulations, orders and decrees, obtain all required
consents and approvals and make all required filings with any governmental
agency, other regulatory or administrative agency, commission or similar
authority and promptly provide the other party with all such information as it
may reasonably request in order to be able to comply with the provisions of
this sentence.
(p) Costs and Expenses. Unless otherwise specifically provided
herein, each party agrees to pay its own costs and expenses resulting from the
fulfillment of its respective obligations hereunder.
(q) Rules of Construction. Any ambiguities shall be resolved
without regard to which party drafted the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
above written.
GETTY PETROLEUM CORP.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[Subsidiaries -- To be supplied.]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
GETTY PETROLEUM MARKETING INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[Subsidiaries -- To be supplied.]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
14
<PAGE> 1
EXHIBIT 10.33
STOCK OPTION REFORMATION AGREEMENT
THIS STOCK OPTION REFORMATION AGREEMENT ("Agreement") is made
and entered into as of March 21, 1997, by and between GETTY PETROLEUM MARKETING
INC., a Maryland corporation ("Marketing"), and GETTY PETROLEUM CORP., a
Delaware corporation ("Getty", after March 31, 1997, to be known as Getty
Realty Corp. ("Realty")).
RECITALS
WHEREAS, Getty intends to pay a special dividend to the
shareholders of Getty Stock of one share of Marketing Stock for each share of
Getty Stock, consisting of all outstanding shares of Marketing Stock (the
"Distribution"); and
WHEREAS, in connection with said special dividend, Getty and
Marketing have entered into a Reorganization and Distribution Agreement (the
"Distribution Agreement") dated as of January 31, 1997; and
WHEREAS, pursuant to the Distribution Agreement Getty and
Marketing have agreed to enter into an agreement reforming certain stock
options pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Getty and Marketing agree as follows:
ARTICLE I
DEFINITIONS
Wherever the following terms are used in this Agreement, the
following terms shall have the meanings specified below unless the context
clearly indicates to the contrary.
Section 1.1 - Conversion Award
An award of Options to reflect the effect of the Distribution
on Getty Options held on the Cut-off Date in accordance with Article II.
Section 1.2 - Cut-off Date
The date immediately preceding the Distribution Date.
Section 1.3 - Distribution Date
The date on which the Distribution occurs.
<PAGE> 2
Section 1.4 - Getty Closing Stock Price
The New York Stock Exchange closing price per share for the
common stock, par value $.10 per share, of Getty on the Distribution Date,
trading regular way, with a due bill for the special dividend of Marketing
Stock to be made in connection with the Distribution.
Section 1.5 - Getty Option
An option to acquire Getty Stock issued pursuant to any of the
Option Plans.
Section 1.6 - Getty Stock
The common stock, par value $.10 per share, of Getty on or
prior to the Distribution Date.
Section 1.7 - ISO Conversion Ratio
The ISO Conversion Ratio with respect to the reformation of a
Getty Option into an option to purchase Realty Stock is equal to the ratio of:
(a) the excess of the Getty Closing Stock Price
over the exercise price of the Getty Option, to
(b) the excess of the Post-Conversion Price of
the Realty Stock over the exercise price of the option with respect
thereto (as determined pursuant to Section 2.2).
Section 1.8 - Marketing Exercise Ratio
The ratio of (a) the Post-Conversion Price of Marketing Stock
to (b) the sum of the Post-Conversion Price of Marketing Stock and the Post
Conversion Price of Realty Stock.
Section 1.9 - Marketing Option
An option to acquire Marketing Stock issued pursuant to a
Conversion Award.
Section 1.10 - Marketing Stock
The common stock, par value $.01 per share, of Marketing.
Section 1.11 - Marketing Subsidiary
Any subsidiary of Marketing as defined in the Distribution
Agreement at the time of the Distribution.
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Section 1.12 - Option
A Marketing Option, Getty Option or a Realty Option.
Section 1.13 - Option Plans
Certain stock option plans, and agreements entered into
thereunder, maintained by Getty prior to the Distribution Date for employees
and directors of Getty, including the Getty Petroleum Corp. 1985 Stock Option
Plan, the 1988 Stock Option Plan of Getty Petroleum Corp. and the 1991 Stock
Option Plan of Getty Petroleum Corp.
Section 1.14 - Post-Conversion Price
The average, determined separately for each of Marketing Stock
and Realty Stock, of the closing New York Stock Exchange prices thereof for the
ten consecutive trading days commencing with the first day on or after the
Distribution Date during which Marketing Stock is traded ("First Ten Trading
Days"), as reported in the Wall Street Journal. If, for any reason, Realty
Stock (or Getty Stock, if Getty's name is not changed) is not traded on the New
York Stock Exchange on an "ex dividend" basis with respect to the Distribution
on any day during the First Ten Trading Days, then the Post Conversion Price
for Realty Stock on such day shall be equal to the closing New York Stock
Exchange price of Realty Stock (or Getty Stock, if Getty's name is not
changed), on such day, less the closing New York Stock Exchange price of
Marketing Stock on such day, as reported in the Wall Street Journal.
Section 1.15 - Realty Exercise Ratio
The ratio of (a) the Post-Conversion Price of Realty Stock to
(b) the sum of the Post-Conversion Price of Realty Stock and the Post
Conversion Price of Marketing Stock.
Section 1.16 - Realty Option
An option to acquire Realty Stock, issued pursuant to a
Conversion Award.
Section 1.17 - Realty Stock
The common stock, par value $.10 per share, of Realty after
the Distribution Date.
Section 1.18 - Service Credit
The period taken into account under any Option Plan for
purposes of determining length of service to satisfy any eligibility, vesting,
benefit accrual or similar requirements under such Option Plan.
3
<PAGE> 4
Section 1.19 - Stock
Marketing Stock, Getty Stock or Realty Stock.
Section 1.20 - Subsidiary
Any corporation, a majority of whose capital stock with voting
power, under ordinary circumstances, to elect directors is, at the date of
determination, directly or indirectly owned by any person as to which a
determination of subsidiary status is to be made, including a Marketing
Subsidiary.
ARTICLE II
STOCK OPTION REFORMATION
Section 2.1 - Substitution of Stock Options
(a) On the Distribution Date, each nonqualified Getty
Option shall be reformed as one Realty Option and one Marketing Option each,
except as described below, with terms identical to those of the Getty Option,
except with respect to the exercise price which shall be adjusted as provided
in Section 2.2.
(b) On the Distribution Date, each Getty Option awarded
as an incentive stock option pursuant to Section 422 of the Internal Revenue
Code of 1986 ("Incentive Stock Option") shall be reformed as a number of whole
or fractional Incentive Stock Options with respect to Realty Stock equal to the
ISO Conversion Ratio ("Realty ISOs"), with terms identical to those of the
Getty Option, except with respect to the exercise price which shall be adjusted
as provided in Section 2.2. Any Realty ISOs not exercised within three months
following the Distribution Date shall thereupon automatically convert into the
number of nonqualified Options equal to the number of Getty Options from which
they were converted pursuant to the preceding sentence and each such
nonqualified Option shall thereupon be reformed as one Realty Option and one
Marketing Option, as described in Section 2.1(a).
Section 2.2 - Exercise Prices of New Options
The exercise price of each such Realty Option shall be equal
to the product of the exercise price of the applicable Getty Option and the
Realty Exercise Ratio. The exercise price of each such Marketing Option shall
be equal to the product of the exercise price of the applicable Getty Option
and the Marketing Exercise Ratio.
Section 2.3 - Service Credits
In connection with the Distribution and for purposes of
determining Service Credits under any Option Plan, Realty and Marketing shall
credit each of their respective employees and directors with such employee's or
director's Service Credit as reflected in the Getty payroll system records as
of the Cut-off Date. Such Service Credit shall continue to
4
<PAGE> 5
be maintained as described herein for as long as the employee or director does
not terminate employment (or in the case of a director, does not cease
providing services as a director).
Section 2.4 - Effect of Post-Distribution Transfer on Conversion Awards
Conversion Awards shall be administered with respect to any
provisions relating to continuing employment requirements to give Service
Credit for service with the party employing the grantee as of the Distribution
Date. Solely with respect to such Conversion Awards (and not with respect to
new awards made after the Cut-off Date), for purposes of determining whether a
termination of employment has occurred under the terms of any provision
requiring continued employment, termination of employment through March 21,
1998 shall not be deemed to occur if an employee leaves the service of one
party hereto to immediately begin employment with the other party; the business
operation or business unit from which such employee terminates employment shall
promptly notify the administrator of the Option Plan of each party of the
occurrence of any termination subject to the provisions of this Section 2.4.
Whichever party is the new employer shall inform the former employer of any
termination of employment of such transferred employee. Any termination of
employment other than as described in this Section 2.4 shall be treated by
applying the applicable provisions of the Option Plan relating to terminations
of employment without the modifications described in this Section 2.4.
Section 2.5 - Written Statement
Within 30 days after the Distribution Date, the Secretary of
Realty (or any officer of Realty to whom appropriate authority has been
delegated) shall provide each holder of a Getty Option with a written statement
containing a general description of this Agreement and specifically listing the
exercise price of such option holder's Realty Option and Marketing Option.
ARTICLE III
MISCELLANEOUS
Section 3.1 - Relationship of Parties
Nothing in this Agreement shall be deemed or construed by the
parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the parties, it being understood and
agreed that no provision contained herein, and no act of the parties, shall be
deemed to create any relationship between the parties other than the
relationship set forth herein.
Section 3.2 - Access to Information; Cooperation
Realty and Marketing and their authorized agents will be given
reasonable access to and may take copies of all information relating to the
subjects of this Agreement (to the extent permitted by federal and state
confidentiality laws) in the custody of the other
5
<PAGE> 6
party, including any agent, contractor, subcontractor, agent or any other
person or entity under contract of such party. The parties will provide one
another with such information within the scope of this Agreement as is
reasonably necessary to administer each party's Option Plans. The parties will
cooperate with each other to minimize the disruption caused by any such access
and providing of information.
Section 3.3 - Assignment
Neither party shall, without prior written consent of the
other, have the right to assign any rights or delegate any obligations under
this Agreement.
Section 3.4 - Headings
The headings used in this Agreement are inserted only for the
purpose of convenience and reference, and in no way define or limit the scope
or intent of any provision or part hereof.
Section 3.5 - Severability of Provisions
Neither Realty nor Marketing intend to violate statutory or
common law by executing this Agreement. If any section, sentence, paragraph,
clause or combination of provisions in this Agreement is in violation of any
law, such sections, sentences, paragraphs, clauses or combinations shall be
inoperative and the remainder of this Agreement shall remain in full force and
effect and shall be binding upon the parties.
Section 3.6 - Parties Bound
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing herein, expressed or implied, shall be construed to give any other
person any legal or equitable rights hereunder.
Section 3.7 - Notices
All notices, consents, approvals and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given when delivered personally or by overnight courier or three days
after being mailed by registered or certified mail (postage prepaid, return
receipt requested) to the named representatives of the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
(i) if to Realty
Getty Realty Corp.
125 Jericho Turnpike
Jericho, New York 11753
Attention: John J. Fitteron
6
<PAGE> 7
(ii) if to Marketing
Getty Petroleum Marketing Inc.
125 Jericho Turnpike
Jericho, New York 11753
Attention: Samuel M. Jones
Section 3.8 - Further Action
Realty and Marketing each shall cooperate in good faith and
take such steps and execute such papers as may be reasonably requested by the
other party to implement the terms and provisions of this Agreement.
Section 3.9 - Waiver
Realty and Marketing each agree that the waiver of any default
under any term or condition of this Agreement shall not constitute a waiver of
any subsequent default or nullify the effectiveness of that term or condition.
Section 3.10 - Governing Law
All controversies and disputes arising out of or under this
Agreement shall be determined pursuant to the laws of the state of New York,
regardless of the laws that might be applied under applicable principals of
conflicts of laws.
Section 3.11 - Entire Agreement
This Agreement and the Distribution Agreement constitute the
entire understanding between the parties hereto, and supersede all prior
written or oral communications, relating to the subject matter covered by said
agreements. To the extent that this Agreement or the Distribution Agreement
are inconsistent with (i) the change-in-control agreements dated December 9,
1994 and amended on March 7, 1996, made by Getty in favor of certain officers
and employees of Getty (the "Change-in-Control Agreements"), or (ii) the option
agreements made by Getty pursuant to the Option Plans in favor of certain
officers and key employees of Getty to whom stock options were granted (the
"Option Agreements"), the terms and provisions of this Agreement or the
Distribution Agreement will control; provided, however, that neither this
Agreement nor the Distribution Agreement shall limit the applicability of any
supplemental terms or provisions (including, e.g., any vesting provisions)
contained in the Change-in-Control Agreements or the Option Agreements which
are not inconsistent with this Agreement or the Distribution Agreement.
No amendment, modification, extension or failure to enforce
any condition of this Agreement by either party shall be deemed a waiver of its
rights herein. This agreement shall not be amended except by a writing
executed by the parties.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GETTY PETROLEUM CORP.,
a Delaware corporation
By: ______________________________
Its: ______________________________
GETTY PETROLEUM MARKETING INC.,
a Maryland corporation
By: ______________________________
Its: ______________________________
8
<PAGE> 1
Exhibit 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Getty Realty
Corp. and Subsidiaries
The accompanying consolidated financial statements include the accounts of
Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp., and
its wholly-owned subsidiaries (the "Company").
SPIN-OFF
On March 21, 1997, the Company effected the spin-off of its petroleum marketing
business to its stockholders. The Company will retain its real estate business
and lease most of its properties on a long-term net basis to the distributed
company, which is named Getty Petroleum Marketing Inc. ("Marketing").
Stockholders of record of the Company on March 21, 1997 received a tax-free
dividend of one share of Marketing common stock for each share of common stock
of the Company. For additional information regarding the spin-off, see Note 13
to the consolidated financial statements.
RESULTS OF OPERATIONS
Net sales for the year ended January 31, 1997 ("fiscal 1997") were $888.2
million, a 13.0% increase as compared with $786.3 million for the year ended
January 31, 1996 ("fiscal 1996"). Of the 13.0% increase in net sales,
approximately two-thirds was attributable to an increase in sales prices and
the balance was due to an increase in sales volume. Average selling prices
increased by 8.8% and retail gallonage sold increased by 49.9 million gallons
or 6.9% to 768.3 million gallons, partially offset by a 10.0 million gallon or
4.0% decrease in wholesale gallonage sold to 237.9 million gallons. The average
gasoline volume per retail outlet increased by 7.7% in fiscal 1997. Gross
profit before depreciation and amortization (excluding rental and other income)
was $9.7 million in fiscal 1997 compared to $38.9 million in the comparable
period last year. This $29.2 million decrease in gross profit was principally
due to a $21.2 million pre-tax charge recorded in the fourth quarter of fiscal
1997 related to a revision of the Company's estimated future environmental
costs (see "Environmental Matters"). In addition, the Company experienced lower
retail product margins of approximately 1.4 cents per gallon or $10.1 million
and a LIFO inventory charge of $2.6 million. The LIFO inventory charge was the
result of product cost increases of approximately 18 cents per gallon from
January 31, 1996 to January 31, 1997.
Fiscal 1996 net sales were $786.3 million as compared with $749.4 million
for the year ended January 31, 1995 ("fiscal 1995"). The increase in net sales
of 4.9% was principally due to a 9.5% increase in average selling prices,
partially offset by lower sales volume. Wholesale gallonage sold decreased by
19.0% or 58.2 million gallons (primarily bulk sales) to 247.9 million gallons,
partially offset by a 2.8% or 19.6 million gallon increase in retail gallonage
sold to 718.4 million gallons through 6.1% fewer outlets. The average gasoline
volume per retail outlet increased by 9.0%. Gross profit before depreciation
and amortization (excluding rental and other income) was $38.9 million in
fiscal 1996 compared to $36.0 million in the prior fiscal year. This $2.9
million increase in gross profit was principally due to higher wholesale
product margins of approximately $2.5 million and gross profit of approximately
$2.1 million from increased retail sales volumes, partially offset by higher
environmental expenditures of $2.6 million.
The Company's financial results have depended largely on retail marketing
margins and rental income from its dealers; after the spin-off, the Company's
financial results will largely depend on rental income from Marketing and other
lessees and sublessees. The petroleum marketing industry has been and continues
to be volatile and highly competitive. The cost of petroleum products purchased
as well as the price of petroleum products sold have fluctuated widely. As a
result of the historic volatility of product margins and the fact that they are
affected by numerous diverse factors, it is impossible to predict future margin
levels. The Company believes that it has only been modestly affected by
inflation since increased costs are passed along to its customers to the extent
permitted by competition.
Rental income of $35.9 million in fiscal 1997 increased 4.5% over fiscal
1996 rental income of $34.3 million, which increased 6.7% over the $32.1 million
realized in fiscal 1995. The increase in both periods was about equally due to
escalations provided under existing lease agreements, lease renewals and higher
rentals as a result of improvements to the facilities.
Other expense amounted to $4.0 million in fiscal 1997 as compared to other
income of $6.3 million in fiscal 1996. The $10.3 million decrease was
principally due to a pre-tax charge of $5.8 million recorded in fiscal 1997
related to the settlement of a dispute between the Company's former construction
company subsidiary, Slattery Associates, Inc. and Morrison-Knudsen Company, Inc.
Also contributing to the decrease in other income was $1.7 million of expenses
related to the spin-off transaction discussed above, $.8 million of reduced
investment income and $.5 million of reduced gains on dispositions of assets.
17
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS CONTINUED
Getty Realty
Corp. and Subsidiaries
Other income was $6.3 million in fiscal 1996 and fiscal 1995. Fiscal 1996
included increased gains on dispositions of assets of $.6 million and higher
investment income of $.6 million, whereas fiscal 1995 included $1.0 million of
income from a claim settlement.
Selling, general and administrative expenses for fiscal 1997 amounted to
$25.4 million, which was comparable to the $25.6 million in fiscal 1996.
Selling, general and administrative expenses in fiscal 1996 amounted to
$25.6 million, a decrease of $1.7 million from the prior year. The decrease was
principally due to lower expenses as a result of a restructuring of the
Company's organization and operations in October 1994.
Interest expense in fiscal 1997 amounted to $6.8 million, a decrease of
$2.5 million from the prior year. The decrease was principally due to reduced
debt and capitalized lease obligations outstanding during the current fiscal
year.
Interest expense in fiscal 1996 amounted to $9.3 million, a decrease of
$2.1 million from fiscal 1995. The decrease was principally due to reduced
capitalized lease obligations and debt, including the redemption of the
Company's 14% subordinated debentures in fiscal 1995.
Depreciation and amortization in fiscal 1997 amounted to $23.5 million, an
increase of $.3 million over the prior year. Fiscal 1996 included $.5 million
of additional depreciation relating to operating properties as a result of the
adoption of Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of."
Depreciation and amortization was $23.2 million in fiscal 1996, an
increase of $1.4 million over fiscal 1995. As previously noted, fiscal 1996
included $.5 million of additional depreciation relating to operating
properties as a result of adopting SFAS No. 121.
During fiscal 1995, pre-tax charges of $2.7 million were recorded to
provide for severance and other costs associated with restructuring the
Company's organization and its operations. As of January 31, 1997, the
Company's consolidated balance sheet includes an accrual of $.3 million for
remaining severance and related benefits payable through October 1999.
ACCOUNTING CHANGES AND EXTRAORDINARY ITEM
In fiscal 1996, the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
The Statement requires that assets used in operations be
written down to fair value when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amount of those assets.
SFAS No. 121 also requires that assets held for disposal be written down to
fair value less costs to sell. The Company continually evaluates retail outlets
to determine the profitability and long-term viability of certain locations as
gasoline stations or convenience stores, which results in the divestment of
non-strategic and uneconomic retail outlets through sale, lease assignment or
lease termination. The Company estimates fair value and costs to sell based on
the best information available, including discounted cash flows and comparable
market values, in making whatever estimates, judgments and projections are
considered necessary.
The Company recorded a pre-tax charge of $.5 million in fiscal 1996
relating to operating assets, which is included in depreciation and amortization
expense, due to continuing operating losses resulting from changes in local
market or operating conditions at certain retail outlets. In addition, the
Company reported the cumulative effect of the change in accounting principle
relating to assets held for disposal as an after-tax charge to earnings of $.8
million in the fiscal 1996 consolidated statement of operations. As of January
31, 1997, the net book value of assets held for disposal amounted to $2.6
million. The impact of these retail outlets on the results of operations of the
Company was not material for each of the three years in the period ended January
31, 1997. While these retail outlets are being actively marketed, the disposal
period may exceed one year for some locations.
As of the beginning of fiscal 1995, the Company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" and reported
the cumulative effect of the change in accounting principle as a credit to
earnings of $.2 million in the fiscal 1995 consolidated statement of
operations.
In fiscal 1995, the Company recorded an extraordinary charge of $.8
million after taxes resulting from the early retirement of the Company's 14%
subordinated debentures. The extraordinary charge consisted of the write-off of
deferred finance costs associated with the debentures and an early redemption
premium paid to holders of the retired debentures.
18
<PAGE> 3
LIQUIDITY AND CAPITAL RESOURCES
As of January 31, 1997, the Company's working capital deficit amounted to $18.8
million as compared to a deficit of $3.2 million as of January 31, 1996. The
decrease in working capital was primarily due to the net loss of $9.2 million
incurred during the year, which included a $21.2 million pre-tax charge related
to a revision of the Company's estimated future environmental costs, $25.6
million of capital expenditures, including $.8 million of property
acquisitions, and the reduction of $11.2 million in long-term debt and capital
lease obligations, partially offset by working capital generated during the
year from operations.
The Company has been able to operate its business with negative working
capital, principally because most sales are for cash and payment terms have been
received from vendors and for gasoline taxes. The Company's principal sources of
liquidity are cash flows from operations, which amounted to $32.2 million during
the fiscal year ended January 31, 1997, and its short-term unsecured line of
credit. Management believes that cash requirements for operations, capital
expenditures and debt service in fiscal 1998 can be met by cash flows from
operations, available cash and equivalents and its credit line. As of January
31, 1997, the Company had uncommitted lines of credit with two banks in the
aggregate amount of $60 million, of which $7.6 million was utilized in the form
of outstanding letters of credit. In February 1997, the lines of credit were
replaced with two separate uncommitted lines of credit for the Company and
Marketing in the amounts of $15 million and $50 million, respectively. Such
lines of credit may be used for working capital borrowings and letters of
credit. Borrowings under such lines of credit are unsecured and bear interest at
the bank's prime rate or, at each borrower's option, 1.1% above LIBOR. Such
lines of credit are subject to renewal at the discretion of the banks.
After the spin-off, the Company transferred cash to Marketing in an amount
sufficient to provide Marketing with net working capital of $1.1 million. As of
January 31, 1997, the net assets of Marketing, which included working capital
of $1.1 million, amounted to $54.5 million. Although it is expected that the
existing sources of liquidity available to the real estate business will be
sufficient to meet its expected operating and debt service requirements, the
Company may be required to obtain additional sources of capital in the future
to fund certain of its capital expenditures and property acquisitions, which
capital sources it believes are available.
During fiscal 1997, the Company paid quarterly cash dividends in the amount
of $.03 per share. During fiscal 1997, dividends aggregated $1,520,000, or $.12
per share, in comparison to $760,000, or $.06 per share, during fiscal 1996.
During fiscal 1997, the Company experienced product cost increases of
approximately 18 cents per gallon which resulted in higher sales prices to
customers. The Company's accounts receivable balance increased as of January 31,
1997 in comparison to January 31, 1996 principally due to the higher average
selling prices. The product cost increases resulted in a LIFO inventory charge
of $2.6 million during fiscal 1997. The LIFO inventory charge, coupled with
lower inventory levels from the preceding year, resulted in a lower inventory
balance as of January 31, 1997. The Company's accrual for environmental
remediation costs increased significantly as of January 31, 1997 over the prior
fiscal year principally due to a $21.2 million pre-tax charge recorded in the
fourth quarter of fiscal 1997.
The Company's capital expenditures for the fiscal years ended January 31,
1997, 1996 and 1995 amounted to $24.8 million, $20.3 million and $21.3 million,
respectively, which included $10.4 million, $9.3 million and $10.4 million,
respectively, for the replacement of underground storage tanks and vapor
recovery facilities at gasoline stations and terminals. The Company's capital
expenditures also include discretionary expenditures to improve the image of
the service stations, to improve the terminal facilities and for routine
replacement of service station equipment at existing and newly acquired
locations. Expenditures with respect to tank replacements required to meet the
1998 federal standards will continue to be the responsibility of the Company
after the spin-off.
ENVIRONMENTAL MATTERS
The petroleum products industry is subject to numerous existing federal, state
and local laws and regulations, including matters relating to the protection of
the environment. Environmental expenses have been attributable to remediation,
monitoring, soil disposal and governmental agency reporting (collectively,
"Remediation Costs") incurred in connection with contaminated sites and the
replacement or upgrading of underground storage tanks, related piping,
underground pumps, wiring and monitoring devices (collectively, "USTs") to meet
federal, state and local environmental standards, as well as routine monitoring
and tank testing.
19
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS CONTINUED
Getty Realty
Corp. and Subsidiaries
Environmental exposures are difficult to assess and estimate for numerous
reasons, including the extent of contamination, alternative treatment methods
that may be applied, location of the property which subjects
it to differing local laws and regulations and their interpretations, as well
as the time it takes to remediate
contamination. In developing the estimates of environmental remediation costs,
consideration is given to, among other things, enacted laws and regulations,
assessments of contamination, currently available technologies for treatment,
alternative methods of remediation and prior experience. Estimates of such
costs are subject to change as contingencies become more clearly defined and
remediation treatment progresses. For the fiscal years ended January 31, 1997,
1996 and 1995, net environmental expenses included in the Company's cost of
sales amounted to $34,162,000, $14,346,000 and $11,769,000, respectively, which
amounts were net of probable recoveries from state UST remediation funds.
During the fourth quarter of fiscal 1997, the Company's Board of Directors
formally approved the
distribution of its petroleum marketing business to its stockholders. Under a
master lease between the Company, as lessor, and Marketing, as lessee, the
Company committed to a program to bring the leased properties to regulatory
closure and, thereafter, transfer all future environmental risks from the
Company to Marketing.
In order to establish the Remediation Costs obligation and estimate the
incremental cost of accelerated remediation, the Company commissioned a
detailed property-by-property environmental study of all retail outlets, with
the objective of achieving closure in approximately five years. This
acceleration program, utilizing
new, more effective remediation techniques, will result in a substantial
increase in environmental costs over those that had been previously identified
and accrued, as the acceleration program contemplates the use of additional
active remediation systems at many sites in lieu of relying on periodic
monitoring and natural attenuation permitted by applicable environmental
regulations. As a result, the Company revised its estimate of future
Remediation Costs in the fourth quarter of fiscal 1997 and recorded a pre-tax
charge in such quarter for Remediation Costs of $21.2 million. The pre-tax
charge resulted from the acceleration of remediation activities to be paid by
the Company through more aggressive means of treating contaminated sites to
bring them to closure in approximately five years, which resulted in
significant incremental Remediation Costs, changes in estimated Remediation
Costs at previously identified properties, including costs to be incurred in
connection with UST upgrades, and additional charges to comply with AICPA
Statement of Position 96-1, "Environmental Remediation Liabilities."
The Company has agreed to pay all costs relating to, and to indemnify
Marketing for, all scheduled known pre-distribution environmental liabilities
and obligations, all scheduled future upgrades necessary to cause USTs to
conform to the 1998 federal standards, and all environmental liabilities and
obligations arising out of discharges with respect to properties containing
USTs that have not been upgraded to meet the 1998 federal standards that are
discovered prior to the date such USTs are upgraded to meet the 1998 federal
standards (collectively, the "Realty Environmental Liabilities"). The Company
will also collect recoveries from state UST remediation funds related to the
Realty Environmental Liabilities.
As of January 31, 1997 and 1996, the Company had accrued $46,134,000 and
$19,974,000, respectively, as management's best estimate for environmental
remediation costs. As of January 31, 1997 and 1996, the Company had recorded
$16,217,000 and $15,878,000, respectively, as management's best estimate for
recoveries from state UST remediation funds. The current portion of such
estimated recoveries is $2,865,000 and $6,440,000, respectively, and is
included in prepaid expenses and other current assets, while the noncurrent
portion is included in other assets in the consolidated balance sheets. In view
of the uncertainties associated with environmental expenditures, however, the
Company believes it is possible that such expenditures could be substantially
higher. Any additional amounts will be reflected in the Company's financial
statements as they become known. Although environmental costs may have a
significant impact on results of operations for any single fiscal year or
interim period, the Company believes that such costs will not have a material
adverse effect on the Company's financial position.
The Company cannot predict what environmental legislation or regulations
may be enacted in the future or how existing laws or regulations will be
administered or interpreted with respect to products or activities to which
they have not previously been applied. Compliance with more stringent laws or
regulations as well as more vigorous enforcement policies of the regulatory
agencies or stricter interpretation of existing laws which may develop in the
future, could have an adverse effect on the financial position or operations of
the Company and could require substantial additional expenditures for future
remediation or the installation and operation of required environmental or
pollution control systems and equipment.
20
<PAGE> 5
TERMINATION OF UNI-MARTS AGREEMENTS
On December 27, 1996, Uni-Marts, Inc. ("Uni-Marts") notified the Company that,
effective December 31, 1997, it would not renew its various leases and
subleases of approximately 100 service station properties from the Company or
the existing petroleum supply agreement between the Company and Uni-Marts with
respect to such service stations and certain additional service stations owned
or operated by Uni-Marts.
Uni-Marts subsequently advised the Company by letter that it may be interested
in negotiating and entering into revised arrangements. While the Company has
discussed such matters with Uni-Marts, no such agreement has been reached. The
Company believes that Marketing will be able to re-lease the approximately
100 affected service station properties. The loss of motor fuel product sales
to Uni-Marts pursuant to the existing supply agreement, if not replaced, could
have a material adverse effect on Marketing's revenues.
The Company believes such loss of product sales would not materially impact
Marketing's operating income because the affected leased service station
properties should be re-leased to retail dealers by Marketing at higher retail
product margins to be realized by Marketing than the current lower wholesale
product margins under the supply agreement with Uni-Marts. Net sales and rental
income attributable to the Uni-Marts
agreement amounted to $90.3 million (or 10.2% of net sales) and $4.6 million
(or 12.9% of rental income), respectively, for the fiscal year ended January
31, 1997.
SELECTED FINANCIAL DATA
Getty Realty
Corp. and Subsidiaries
<TABLE>
<CAPTION>
Years ended January 31,
- -------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Revenues $920,043 $826,901 $787,844 $806,557 $937,086
======================================================================================================
Net earnings (loss) (9,176) 12,634(a) 6,339(b) 10,201(c) (3,703)
======================================================================================================
Net earnings (loss) per share (.72) 1.00(a) .50(b) .81(c) (.29)
======================================================================================================
Cash dividends per share .12 .06 -- -- .04
======================================================================================================
FINANCIAL POSITION:
Total assets 284,485 277,344 278,957 292,388 293,736
======================================================================================================
Long-term debt 14,746 19,589 30,849 50,403 58,645
======================================================================================================
Capital lease obligations 16,489 22,843 29,349 34,177 38,188
======================================================================================================
Stockholders' equity $100,472 $110,574 $ 98,480 $ 92,152 $ 81,759
======================================================================================================
</TABLE>
(a) Includes charge of $794 or $.06 per share from the cumulative effect of
adopting Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of."
(b) Includes extraordinary charge of $775 or $.06 per share in connection
with the early retirement of debt and a credit of $183 or $.01 per share
from the cumulative effect of adopting Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
(c) Includes credit of $860 or $.07 per share from the cumulative effect of
adopting Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
21
<PAGE> 6
CONSOLIDATED STATEMENTS OF OPERATIONS
Getty Realty
Corp. and Subsidiaries
<TABLE>
<CAPTION>
For the years ended January 31,
- -------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) 1997 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $888,187 $786,263 $749,443
Rental income 35,864 34,315 32,146
Other income (expense) (4,008) 6,323 6,255
- -------------------------------------------------------------------------------------------------
920,043 826,901 787,844
- -------------------------------------------------------------------------------------------------
Cost of sales (excluding depreciation and amortization) 878,468 747,328 713,408
Selling, general and administrative expenses 25,407 25,604 27,317
Interest expense 6,806 9,280 11,372
Depreciation and amortization 23,476 23,167 21,750
Restructuring charges -- 2,668
- -------------------------------------------------------------------------------------------------
934,157 805,379 776,515
- -------------------------------------------------------------------------------------------------
Earnings (loss) before provision (credit) for income
taxes, extraordinary item and cumulative effect
of accounting changes (14,114) 21,522 11,329
Provision (credit) for income taxes (4,938) 8,094 4,398
- -------------------------------------------------------------------------------------------------
Earnings (loss) before extraordinary item and
cumulative effect of accounting changes (9,176) 13,428 6,931
Extraordinary item -- (775)
Cumulative effect of accounting changes (794) 183
- -------------------------------------------------------------------------------------------------
Net earnings (loss) $ (9,176) $ 12,634 $6,339
=================================================================================================
Per Share Data:
Earnings (loss) before extraordinary item and
cumulative effect of accounting changes $ (.72) $ 1.06 $.55
Extraordinary item -- (.06)
Cumulative effect of accounting changes (.06) .01
- -------------------------------------------------------------------------------------------------
Net earnings (loss) per share $ (.72) $ 1.00 $.50
=================================================================================================
Weighted average shares outstanding 12,674 12,648 12,639
=================================================================================================
</TABLE>
See accompanying notes.
22
<PAGE> 7
CONSOLIDATED BALANCE SHEETS
Getty Realty
Corp. and Subsidiaries
<TABLE>
<CAPTION>
January 31,
- --------------------------------------------------------------------------------------------------
(in thousands, except share data) 1997 1996
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and equivalents $18,902 $19,808
Short-term investments -- 1,059
Accounts receivable, less allowance for doubtful accounts
of $1,369 in 1997 and $1,409 in 1996 18,322 15,327
Inventories 17,311 21,214
Deferred income taxes 13,936 5,880
Prepaid expenses and other current assets 6,533 9,828
- --------------------------------------------------------------------------------------------------
Total current assets 75,004 73,116
Property, plant and equipment, at cost, less accumulated
depreciation and amortization 185,983 184,559
Other assets 23,498 19,669
- --------------------------------------------------------------------------------------------------
Total assets $284,485 $277,344
- --------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current portion of long-term debt and capital lease obligations $10,357 $9,154
Accounts payable 28,648 26,856
Accrued expenses 20,843 22,099
Environmental remediation costs 19,807 4,096
Gasoline taxes payable 12,731 13,919
Income taxes payable 1,426 175
- --------------------------------------------------------------------------------------------------
Total current liabilities 93,812 76,299
Long-term debt 14,746 19,589
Obligations under capital leases 16,489 22,843
Deferred income taxes 14,116 16,977
Environmental remediation costs 26,327 15,878
Other, principally deposits 18,523 15,184
- --------------------------------------------------------------------------------------------------
Total liabilities 184,013 166,770
- --------------------------------------------------------------------------------------------------
Commitments and contingencies (Notes 3 and 5)
Stockholders' equity:
Preferred stock, par value $1.00 per share; authorized 10,000,000 shares
for issuance in series (none of which is issued) -- --
Common stock, par value $.10 per share; authorized 30,000,000 shares;
issued 13,583,000 in 1997 and 13,553,000 in 1996 1,358 1,355
Paid-in capital 120,293 119,960
Retained earnings (deficit) (7,215) 3,481
Treasury stock, at cost (886,000 shares in 1997 and 894,000 shares in 1996) (13,964) (14,090)
Net unrealized loss on equity securities -- (132)
- --------------------------------------------------------------------------------------------------
Total stockholders' equity 100,472 110,574
- --------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $284,485 $277,344
==================================================================================================
</TABLE>
See accompanying notes.
23
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
Getty Realty
Corp. and Subsidiaries
<TABLE>
<CAPTION>
For the years ended January 31,
- -----------------------------------------------------------------------------------------------
(in thousands) 1997 1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) $ (9,176) $ 12,634 $ 6,339
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Extraordinary item, before tax -- 1,232
Cumulative effect of accounting changes 794 (183)
Depreciation and amortization 23,476 23,167 21,750
Deferred income taxes (11,012) 2,954 (1,553)
Gain on dispositions of property, plant and equipment (1,425) (1,910) (1,294)
Sale of trading securities -- 7,860
Changes in assets and liabilities:
Accounts receivable (2,995) 3,011 2,904
Inventories 3,903 (10,097) (1,100)
Prepaid expenses and other current assets 224 (6,407) (107)
Other assets (941) (10,501) (123)
Accounts payable, accrued expenses and other current liabilities 15,059 (13,825) 6,424
Income taxes payable 1,251 277 (1,994)
Noncurrent liabilities 13,788 16,612 1,191
- -----------------------------------------------------------------------------------------------
Net cash provided by operating activities 32,152 16,709 41,346
- -----------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Capital expenditures (24,797) (20,316) (21,343)
Property acquisitions (839) (2,734) (1,466)
Proceeds from dispositions of property, plant and equipment 2,344 3,491 4,296
Proceeds from sale of short-term investments 1,286 -- --
- -----------------------------------------------------------------------------------------------
Net cash used in investing activities (22,006) (19,559) (18,513)
- -----------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Long-term borrowings -- 10,550
Repayment of long-term debt (4,660) (13,901) (29,406)
Payments under capital lease obligations (5,334) (4,441) (4,285)
Premium paid on early retirement of debt -- (607)
Treasury stock and stock options, net 462 184 157
Cash dividends (1,520) (760) --
- -----------------------------------------------------------------------------------------------
Net cash used in financing activities (11,052) (18,918) (23,591)
- -----------------------------------------------------------------------------------------------
Net decrease in cash and equivalents (906) (21,768) (758)
Cash and equivalents at beginning of year 19,808 41,576 42,334
- -----------------------------------------------------------------------------------------------
Cash and equivalents at end of year $ 18,902 $ 19,808 $ 41,576
===============================================================================================
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 6,815 $ 9,031 $ 11,955
Income taxes, net 3,911 5,087 8,088
</TABLE>
See accompanying notes.
24
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Getty Realty
Corp. and Subsidiaries
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation: The consolidated financial statements include the accounts of
Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp., and
its wholly-owned subsidiaries (the "Company"). The Company has been principally
engaged in the marketing and distribution of petroleum products and the
management of related real estate in 12 Northeastern and Middle Atlantic
States. All significant intercompany accounts and transactions have been
eliminated.
On March 21, 1997, the Company effected the spin-off of its petroleum
marketing business to its stockholders. The Company will retain its real estate
business and the Pennsylvania and Maryland home heating oil business, and lease
most of its properties on a long-term net basis to the distributed company,
which is named Getty Petroleum Marketing Inc. ("Marketing"). Subsequent to the
spin-off, the Company will be principally engaged in the ownership and
management of real estate. For additional information regarding the spin-off,
see Note 13.
Certain reclassifications have been made in the financial statements for
1996 and 1995 to conform to the presentation for 1997.
Use of Estimates: The financial statements have been prepared in
conformity with generally accepted accounting principles and include amounts
that are based on management's best estimates and judgments. While all
available information has been considered, actual results could differ from
those estimates.
Cash and Equivalents: The Company considers highly liquid investments
purchased with an original maturity of three months or less to be cash
equivalents.
Inventories: Inventories, primarily finished petroleum products, are
principally accounted for under the lower of last-in, first-out ("LIFO") cost
or market. The Company has entered into product exchange agreements with
various parties to improve its supply logistics and reduce its delivery costs.
Net product exchange positions with other companies are reflected in inventory
and are generally immaterial. The Company has taken positions in the futures
market as part of its overall purchasing strategy in order to reduce the risk
associated with price fluctuations. Gains and losses on futures contracts are
included as a part of product costs and have been immaterial for each of the
three years in the period ended January 31, 1997. As of January 31, 1997 and
1996, outstanding futures contracts were immaterial.
Property, Plant and Equipment: Expenditures for renewals and betterments
are capitalized; maintenance and repairs are charged to income when incurred.
When fixed assets are sold or retired, the cost and related accumulated
depreciation and amortization are eliminated from the respective accounts and
any gain or loss is credited or charged to income.
Depreciation and Amortization: Depreciation of fixed assets is computed on
the straight-line method based upon the estimated useful lives of the assets.
Assets recorded under capital leases (including land) and leasehold
improvements are amortized on the straight-line method over the shorter of the
term of the lease or the useful life of the related asset.
Self-Insurance: The Company is self-insured for workers' compensation,
general liability and vehicle liability up to predetermined amounts above which
third-party insurance applies. Accruals are based on the Company's claims
experience and actuarial assumptions followed in the insurance industry. Due to
uncertainties inherent in the estimation process, actual losses could differ
from accrued amounts.
Environmental Costs: The estimated future costs for known environmental
remediation requirements are accrued when it is probable that a liability has
been incurred and the amount of remediation costs can be reasonably estimated.
Recoveries of environmental costs, principally from state underground storage
tank remediation funds, are accrued as income when such recoveries are
considered probable. Such accruals are adjusted as further information develops
or circumstances change.
Income Taxes: Deferred income taxes are provided for the effect of items
which are reported for income tax purposes in years different from that in
which they are recorded for financial statement purposes.
Revenue Recognition: Revenue is recognized from sales when product
ownership is transferred to the customer and from rentals as earned.
Earnings (Loss) Per Share: Earnings (loss) per share is computed by
dividing net earnings (loss) by the weighted average number of shares of common
stock outstanding during the year. Common stock equivalents are not included in
earnings (loss) per share computations since their effect is anti-dilutive or
immaterial.
Accounting Changes: In fiscal 1996, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived
25
<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
Assets to be Disposed Of." The Statement requires that assets used in
operations be written down to fair value when events and circumstances indicate
that the assets might be impaired and the undiscounted cash flows estimated to
be generated by those assets are less than the carrying amount of those assets.
SFAS No. 121 also requires that assets held for disposal be written down to
fair value less costs to sell. The Company continually evaluates retail outlets
to determine the profitability and long-term viability of certain locations as
gasoline stations or convenience stores, which results in the divestment of
non-strategic and uneconomic retail outlets through sale, lease assignment or
lease termination. The Company estimates fair value and costs to sell based on
the best information available, including discounted cash flows and comparable
market values, in making whatever estimates, judgments and projections are
considered necessary.
The Company recorded a pre-tax charge of $524,000 in fiscal 1996 relating
to operating assets,
which is included in depreciation and amortization expense, due to continuing
operating losses resulting from changes in local market or operating conditions
at certain retail outlets. In addition, the Company reported the cumulative
effect of the change in accounting principle relating to assets held for
disposal as an after-tax charge to earnings of $794,000 in the fiscal 1996
consolidated statement of operations. As of January 31, 1997, the net book
value of assets held for disposal amounted to $2,578,000. The impact of these
retail outlets on the results of operations of the Company was not material for
each of the three years in the period ended January 31, 1997. While these
retail outlets are being actively marketed, the disposal period may exceed one
year for some locations.
As of the beginning of fiscal 1995, the Company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" and reported
the cumulative effect of the change in accounting principle as a credit to
earnings of $183,000 in the fiscal 1995 consolidated statement of operations.
2. INVENTORIES
Had the Company utilized the first-in, first-out ("FIFO") inventory method,
inventories would have been higher by $2,555,000 as of January 31, 1997. As of
January 31, 1996 and 1995, the carrying value of the Company's LIFO inventories
approximated the FIFO method or replacement cost.
3. LEASES
In 1985, Power Test Investors Limited Partnership (the "Partnership"), a
publicly traded real estate limited partnership, purchased from Texaco certain
Getty Oil Company properties and equipment which, in turn, have been leased on
a long-term basis to the Company. For financial statement purposes, such leases
have been recorded as capital leases.
The Partnership is managed by the General Partner, which is CLS General
Partnership Corp. The Directors and stockholders of CLS General Partnership
Corp. are also Directors and the principal stockholders of the Company. During
the fiscal years ended January 31, 1997, 1996 and 1995, the Company made net
lease payments to the Partnership of $10,061,000, $10,553,000 and $10,925,000,
respectively. In addition, during the fiscal years ended January 31, 1997, 1996
and 1995, the Company billed the Partnership and reflected in other income
$672,000, $648,000 and $624,000, respectively, for administrative and other
services rendered to the Partnership.
Future minimum annual rentals under capital leases as of January 31, 1997,
payable to the Partnership, are as follows:
<TABLE>
<CAPTION>
Years ending January 31, (in thousands)
- ------------------------ ------------
<S> <C>
1998 ................... $9,939
1999 ................... 9,939
2000 ................... 9,939
- ------------------------ --------
29,817
Less, amount representing interest ....... 7,107
--------
Present value of minimum lease payments
(including $6,221 due within one year) ... $22,710
======== -------
</TABLE>
26
<PAGE> 11
In addition, the Company has obligations to other lessors under
noncancelable operating leases which have terms in excess of one year,
principally for gasoline stations. Substantially all of these leases contain
renewal options and escalation clauses. Future minimum annual rentals under
such leases are as follows:
<TABLE>
<CAPTION>
Years ending January 31, (in thousands)
------------------------ --------------
<S> <C>
1998 ................... $14,222
1999 ................... 12,701
2000 ................... 10,650
2001 ................... 8,612
2002 ................... 6,987
Thereafter ............. 25,742
----------------------------------------
$78,914
=======
</TABLE>
Rent expense, substantially all of which is included in cost of sales,
amounted to $15,606,000, $15,572,000 and $15,838,000 for the years ended
January 31, 1997, 1996 and 1995, respectively. Such rent expense consists of
minimum rentals on noncancelable operating leases referred to above and
short-term rentals of terminal facilities and other equipment.
Rental income from fee owned and leased properties aggregated $35,864,000,
$34,315,000 and $32,146,000 for the years ended January 31, 1997, 1996 and
1995, respectively, which included $23,582,000, $22,809,000 and $21,800,000 of
rent received under subleases. The net book value of fee owned properties
leased to lessees was $86,367,000 as of January 31, 1997.
Leased gasoline stations, which have been subleased to lessees, have
sublease rentals generally not less than the rentals paid by the Company.
Substantially all of these subleases have remaining terms which range from one
to three years. No significant difficulty has been experienced in subleasing
station properties.
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Depreciable
1997 1996 Life (Years)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in thousands)
Land $40,887 $41,144
Buildings 61,242 59,271 16
Equipment 176,210 157,298 10 to 16
Motor vehicles 4,292 4,501 3 to 10
Furniture and fixtures 1,573 1,566 10
Leasehold improvements 35,968 33,809 See Note 1
Assets recorded under capital leases 52,392 52,647 See Note 1
- -----------------------------------------------------------------------------
372,564 350,236
Less, accumulated depreciation and amortization 186,581 165,677
- -----------------------------------------------------------------------------
$185,983 $184,559
====================
</TABLE>
Property, plant and equipment includes the following assets recorded
under capital leases with the Partnership:
<TABLE>
<CAPTION>
1997 1996
- -----------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Land ................................................ $25,905 $26,016
Buildings ........................................... 17,388 17,471
Equipment ........................................... 8,192 8,253
Motor vehicles ...................................... 907 907
- -----------------------------------------------------------------------------
52,392 52,647
Less, accumulated amortization ...................... 43,939 41,324
- -----------------------------------------------------------------------------
$8,453 $11,323
=====================
</TABLE>
27
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
5. COMMITMENTS AND CONTINGENCIES
The Company is subject to various legal proceedings and claims which arise in
the ordinary course of its business. Such matters are not expected to have a
material adverse effect on the Company's financial condition
or results of operations.
On September 16, 1996, the Company entered into an Agreement with the New
York State Department of Taxation and Finance (the "Department"), settling the
license revocation proceedings brought by the Department whereby the Company's
wholly-owned subsidiary Getty Terminals Corp.'s ("Getty Terminals") licenses
and permits for its three New York State terminals and its New York motor fuels
and diesel distributor licenses would be terminated. The revocation proceedings
were the result of the 1990 conviction of Getty Terminals for federal gasoline
excise tax evasion and conspiracy in 1985. Under the terms of the Agreement,
the Company's wholly-owned subsidiary, Kingston Oil Supply Corp. ("KOSCO") will
be permitted to assume all of the storage and distribution activities and
operations now performed by Getty Terminals in New York. KOSCO will have to
obtain new or amended licenses and permits and, upon the issuance thereof,
Getty Terminals will surrender its licenses and permits. KOSCO's Board of
Directors will consist of three persons, one of whom shall be an independent
director, and KOSCO shall provide periodic reports to the Department relating
to New York tax laws. The Agreement shall terminate on September 15, 1999.
Under the terms of the settlement, the Company and its subsidiaries are not
required to pay any penalties or fines. The implementation of the settlement
will have no adverse impact on the results of operations, financial condition
or liquidity of the Company, including the ability to sell motor fuels in New
York or operate its New York State terminals.
In order to minimize the Company's exposure to credit risk associated with
financial instruments, the Company places its temporary cash investments with
high credit quality institutions and, by policy, limits the amount invested with
any one institution other than the U. S. Government. Except for one customer,
Uni-Marts, Inc. ("Uni-Marts"), which represents approximately 10% of the
Company's net sales for each of the three fiscal years in the period ended
January 31, 1997, concentration of credit risk with respect to trade receivables
generally is limited due to the large number of customers comprising the
Company's customer base.
On December 27, 1996, Uni-Marts notified the Company that, effective
December 31, 1997, it would not renew its various leases and subleases of
approximately 100 service station properties from the Company or the existing
petroleum supply agreement between the Company and Uni-Marts with respect to
such service stations and certain additional service stations owned or operated
by Uni-Marts. Uni-Marts subsequently advised the Company by letter that it may
be interested in negotiating and entering into revised arrangements. While the
Company has discussed such matters with Uni-Marts, no such agreement has been
reached. The Company believes that Marketing will be able to re-lease the
approximately 100 affected service station properties. The loss of motor fuel
product sales to Uni-Marts pursuant to the existing supply agreement, if not
replaced, could have a material adverse effect on Marketing's revenues. The
Company believes such loss of product sales would not impact Marketing's
operating income because the affected leased service station properties should
be re-leased to retail dealers at higher retail product margins to be realized
by Marketing than the current lower wholesale product margins under the supply
agreement with Uni-Marts. Net sales and rental income attributable to the
Uni-Marts agreement amounted to $90.3 million (or 10.2% of net sales) and $4.6
million (or 12.9% of rental income), respectively, for the fiscal year ended
January 31, 1997.
The Company is self-insured for workers' compensation, general liability
and vehicle liability up to predetermined amounts above which third-party
insurance applies. The Company's consolidated statements of operations for the
fiscal years ended January 31, 1997, 1996 and 1995 included $2,814,000,
$1,865,000 and $3,133,000, respectively, for self-insurance. As of January 31,
1997 and 1996, the Company's consolidated balance sheets included, in accrued
expenses, $6,139,000 and $5,454,000, respectively, relating to such
self-insurance.
The Company's financial results have depended largely on retail marketing
margins and rental income from its dealers; after the spin-off, the Company's
financial results will largely depend on rental income from Marketing and other
lessees and sublessees. The petroleum marketing industry has been and continues
to be volatile and highly competitive. The cost of petroleum products purchased
as well as the price of petroleum products sold have fluctuated widely. As a
result of the historic volatility of product margins and the fact that they are
affected by numerous diverse factors, it is impossible to predict future margin
levels.
28
<PAGE> 13
6. DEBT
Long-term debt consists of:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1997 1996
- ---------------------------------------------------------------------------------------
<S> <C> <C>
(in thousands)
Mortgage loan due through November 1, 2000 .......................... $14,461 $17,626
Real estate mortgages, bearing interest at a weighted average
interest rate of 7.95%, due in varying amounts through May 1, 2019 .. 3,957 5,190
Other ............................................................... 464 726
- ---------------------------------------------------------------------------------------
18,882 23,542
Less, current portion ............................................... 4,136 3,953
- ---------------------------------------------------------------------------------------
Noncurrent portion .................................................. $14,746 $19,589
================
</TABLE>
Aggregate principal payments in subsequent fiscal years relating to
long-term debt are as follows (in thousands): 1998--$4,136; 1999--$3,376;
2000--$3,296; 2001--$6,694; 2002--$85 and $1,295 thereafter.
As of January 31, 1997, the mortgage loan due through November 1, 2000
provides for interest at LIBOR plus 1.0% to 1.625% per annum, depending on the
Company's Funded Debt Ratio, as defined. As of January 31, 1997, the interest
rate was LIBOR plus 1.125% or 6.63%. Principal payments are $218,000 per month
through October 1, 2000 with the balance of $4,647,000 due on November 1, 2000.
During fiscal 1995, the Company redeemed all of its outstanding 14%
subordinated debentures due August 1, 2000 at a call price of 102.8% and
recorded an extraordinary charge of $1,232,000 ($775,000 after taxes) resulting
from the redemption. The extraordinary charge consisted of the write-off of
deferred finance costs associated with the debentures and a redemption premium
paid to holders of the retired debentures.
Certain long-term debt is collateralized by property, plant and equipment
having an aggregate net book value of approximately $48,514,000 as of January
31, 1997.
As of January 31, 1997, the Company had uncommitted lines of credit with
two banks in the aggregate amount of $60,000,000, of which $7,569,000 was
utilized in the form of outstanding letters of credit.
In February 1997, the lines of credit were replaced with two separate
uncommitted lines of credit for the Company and Marketing in the amounts of
$15,000,000 and $50,000,000, respectively. Such lines of credit may be used for
working capital borrowings and letters of credit. Borrowings under such lines
of credit are unsecured and bear interest at the bank's prime rate or, at each
borrower's option, 1.1% above LIBOR. Such lines of credit are subject to
renewal at the discretion of the bank.
7. ENVIRONMENTAL REMEDIATION COSTS
The petroleum products industry is subject to numerous existing federal, state
and local laws and regulations, including matters relating to the protection of
the environment. Environmental expenses have been attributable to remediation,
monitoring, soil disposal and governmental agency reporting (collectively,
"Remediation Costs") incurred in connection with contaminated sites and the
replacement or upgrading of underground storage tanks, related piping,
underground pumps, wiring and monitoring devices (collectively, "USTs") to meet
federal, state and local environmental standards, as well as routine monitoring
and tank testing. For the fiscal years ended January 31, 1997, 1996 and 1995,
net environmental expense included in the Company's cost of sales amounted to
$34,162,000, $14,346,000 and $11,769,000, respectively, which amounts were net
of probable recoveries from state UST remediation funds.
During the fourth quarter of fiscal 1997, the Company's Board of Directors
formally approved the distribution of its petroleum marketing business to its
stockholders. Under a master lease between the Company, as lessor, and Getty
Petroleum Marketing Inc., as lessee, the Company committed to a program to bring
the leased properties to regulatory closure and, thereafter, transfer all future
environmental risks from the Company to Marketing. In order to establish the
Remediation Costs obligation and estimate the incremental cost of accelerated
remediation, the Company commissioned a detailed property-by-property
environmental study of all retail outlets, with the objective of achieving
closure in approximately five years. As a result, the Company revised its
estimate of future Remediation Costs in the fourth quarter of fiscal 1997
29
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
and recorded a pre-tax charge in such quarter for Remediation Costs of
$21.2 million. The pre-tax charge resulted from the acceleration of remediation
activities to be paid by the Company through more aggressive means of treating
contaminated sites to bring them to closure in approximately five years, which
resulted in significant incremental Remediation Costs, changes in estimated
Remediation Costs at previously identified properties, including costs to be
incurred in connection with UST upgrades, and additional charges to comply with
AICPA Statement of Position 96-1, "Environmental Remediation Liabilities."
As of January 31, 1997 and 1996, the Company had accrued $46,134,000 and
$19,974,000, respectively, as management's best estimate for environmental
remediation costs, of which $19,807,000 and $4,096,000, respectively, are
included as current liabilities. As of January 31, 1997 and 1996, the Company
had recorded $16,217,000 and $15,878,000, respectively, as management's best
estimate for recoveries from state UST remediation funds. The current portion
of such estimated recoveries is $2,865,000 and $6,440,000, respectively, and is
included in prepaid expenses and other current assets, while the noncurrent
portion is included in other assets in the consolidated balance sheets. In view
of the uncertainties associated with environmental expenditures, however, the
Company believes it is possible that such expenditures could be substantially
higher. Any additional amounts will be reflected in the Company's financial
statements as they become known. Although environmental costs may have a
significant impact on results of operations for any single fiscal year or
interim period, the Company believes that such costs will not have a material
adverse effect on the Company's financial position.
8. INCOME TAXES
The provision (credit) for income taxes is summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------- --------- ---------
<S> <C> <C> <C>
(in thousands)
Federal:
Current ................................................ $3,880 $4,044 $1,698
Deferred ............................................... (7,718) 3,079 1,903
State and local:
Current ................................................ 1,487 732 836
Deferred ............................................... (2,587) 239 (39)
- -------------------------------------------------------------------------------------------
Provision (credit) for income taxes .................... $(4,938) $8,094 $4,398
================================
</TABLE>
The tax effects of temporary differences which comprise the deferred tax
assets and liabilities are as follows:
<TABLE>
<CAPTION>
1997 1996
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Property, plant and equipment .......................... $ (16,098) $ (13,102)
Environmental remediation costs, net ................... 13,709 4,407
Other accruals ......................................... 2,383 (2,940)
Inventories ............................................ 77 694
Investments ............................................ 95
Other .................................................. (251) (251)
- -------------------------------------------------------------------------------
Net deferred tax liabilities ........................... $ (180) $ (11,097)
=====================
</TABLE>
The following is a reconciliation of the expected statutory federal
income tax provision (credit) and the actual provision (credit) for
income taxes:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Expected provision (credit) at statutory federal
income tax rate ...................................... $ (4,799) $7,533 $3,965
State and local income taxes, net of federal benefit ... (726) 631 518
Nondeductible expenses ................................. 576 -- --
Other .................................................. 11 (70) (85)
- ----------------------------------------------------------------------------------------
Provision (credit) for income taxes .................... $ (4,938) $8,094 $4,398
==============================
</TABLE>
30
<PAGE> 15
9. STOCKHOLDERS' EQUITY
A summary of the changes in stockholders' equity for the three years ended
January 31, 1997 is as follows:
<TABLE>
<CAPTION>
Net
Treasury Stock, Unrealized
Capital Stock Retained at cost Gain (Loss)
--------------- Paid-in Earnings ----------------- on Equity
Shares Amount Capital (Deficit) Shares Amount Securities Total
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Balance, February 1, 1994 13,543 $1,354 $119,915 $(14,732) 912 $14,385 $ -- $92,152
Net income 6,339 6,339
Cumulative effect of
accounting change (183) (183)
Net unrealized gain on
equity securities 15 15
Purchase of treasury stock 2 23 (23)
Issuance of treasury stock (44) (13) (205) 161
Stock options exercised 2 19 19
- ------------------------------------------------------------------------------------------------------------------
Balance, January 31, 1995 13,545 1,354 119,890 (8,393) 901 14,203 (168) 98,480
Net income 12,634 12,634
Cash dividends--$.06 per share (760) (760)
Net unrealized gain on
equity securities 36 36
Purchase of treasury stock 7 (7)
Issuance of treasury stock (17) (7) (120) 103
Stock options exercised 8 1 87 88
- ------------------------------------------------------------------------------------------------------------------
Balance, January 31, 1996 13,553 1,355 119,960 3,481 894 14,090 (132) 110,574
Net loss (9,176) (9,176)
Cash dividends--$.12 per share (1,520) (1,520)
Net unrealized gain on
equity securities 132 132
Purchase of treasury stock 1 21 (21)
Issuance of treasury stock (6) (9) (147) 141
Stock options exercised 30 3 339 342
- -----------------------------------------------------------------------------------------------------------------
Balance, January 31, 1997 13,583 $1,358 $120,293 $(7,215)(a) 886 $13,964 $ -- $100,472
==================================================================================================================
</TABLE>
(a) Net of $103,803 transferred from retained earnings to common stock and
paid-in capital as a result of accumulated stock dividends.
- --------------------------------------------------------------------------------
10. EMPLOYEE BENEFIT PLANS
The Company has a retirement and profit sharing plan with deferred 401(k)
savings plan provisions (the "Retirement Plan") for non-union employees meeting
certain service requirements and a Supplemental Plan for executives. Under the
terms of these plans, the annual discretionary contributions to the plans are
determined by the Board of Directors. Under the Retirement Plan, employees may
make voluntary contributions and the Company has elected to match an amount
equal to 50% of such contributions but in no event more than 3% of the
employee's eligible compensation. Under the Supplemental Plan, a participating
executive may receive an amount equal to 10% of his compensation, reduced by
the amount of any contributions allocated to such executive under the
Retirement Plan. Contributions, net of forfeitures, under the plans
approximated $702,000, $650,000 and $694,000 for the fiscal years ended January
31, 1997, 1996 and 1995, respectively. In addition, the Company has contributed
$350,000, $364,000 and $344,000 to a union welfare plan for the fiscal years
ended January 31, 1997, 1996 and 1995, respectively. Such amounts are included
in the accompanying consolidated statements of operations.
The Company has Stock Option Plans (the "Plans") which authorize the
Company to grant options to purchase shares of the Company's common stock. The
aggregate number of shares of the Company's common stock which may be made the
subject of options under the 1985, 1988 and 1991 Plans shall not exceed 281,420
shares, 303,876 shares and 750,000 shares, respectively, subject to further
adjustment for stock dividends and stock splits. Each Plan provides that
options are exercisable starting one year from the date of grant, on a
cumulative basis at the annual rate of 25 percent of the total number of shares
covered by the option.
31
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
Immediately prior to the spin-off of its petroleum marketing business to
its stockholders, each current holder of an option to acquire shares of the
Company's common stock pursuant to the Company's 1985, 1988 and 1991 Plans
received, in exchange therefor, two separately exercisable options: one to
purchase shares of the Company's common stock (a "Realty Option") and one to
purchase shares of Marketing common stock (a "Marketing Option"), each
exercisable for the same number of shares and containing substantially
equivalent terms as the pre-distribution option. The exercise price of each
Realty Option and Marketing Option was set so as to preserve the Aggregate
Spread (as defined below) in value attributed to the options held by such
directors, officers and key employees. The "Aggregate Spread" is an amount
representing the difference between the exercise price of an option and the
price of a share of Company common stock immediately prior to the spin-off
multiplied by the number of shares underlying such option. Certain unexercisable
options covering a total of 223,587 shares became immediately exercisable at the
date of the spin-off for persons covered by certain "change of control"
agreements. Accordingly, in fiscal 1998, the Company will recognize a charge to
operating results of $2,166,000 at the date of the spin-off equal to the product
of the number of such options and the difference between their exercise price
and the market price.
The following is a schedule of stock option prices and activity relating to
the Company's stock option plans for the three fiscal years ended January 31,
1997. Subsequent to the spin-off of its petroleum marketing business to its
stockholders, the exercise price of each Realty Option and Marketing Option was
set so as to preserve the Aggregate Spread (as defined above) in value
attributed to the options currently held by the holders:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
1997 1996 1995
- --------------------------------------------------------------------------------------
Weighted Weighted Weighted
Number Average Number Average Number Average
of Exercise of Exercise of Exercise
Shares Price Shares Price Shares Price
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year .. 927,428 $13.02 811,220 $12.87 708,983 $13.17
Granted .............. 166,400 14.75 128,000 13.88 107,250 10.88
Exercised ............ (29,519) 11.60 (8,000) 10.95 (1,620) 11.97
Cancelled ............ (50,083) 13.95 (3,792) 13.51 (3,393) 13.90
- --------------------------------------------------------------------------------------
Outstanding at
end of year ........ 1,014,226 $13.30 927,428 $13.02 811,220 $12.87
==============================================================
Exercisable at
end of year ........ 687,761(a) $13.38 650,506 $13.12 564,094 $13.31
==============================================================
Available for grant at
end of year ........ 176,881 50,007 254,557
==============================================================
</TABLE>
(a) Excludes 223,587 shares which became immediately exercisable at the date
of the spin-off.
The following table summarizes information concerning options outstanding
and exercisable at January 31, 1997:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Options Outstanding Options Exercisable
- --------------------------------------------------------------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices Outstanding Life (Years) Price Exercisable Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$10.49-14.75 ...... 871,876 6 $12.56 545,411 $12.21
17.12-18.62 ....... 142,350 3 17.84 142,350 17.84
- --------------------------------------------------------------------------------
1,014,226 687,761
================================================================================
</TABLE>
The Company accounts for its stock-based employee compensation plans under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and, accordingly, no compensation cost has been recognized for
stock options granted. Had compensation cost for the Company's Plans been
determined based upon the fair value of options granted during fiscal 1997 and
1996 consistent with the
32
<PAGE> 17
methodology prescribed under SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company's net earnings (loss) and net earnings (loss) per
share would have been reduced to the following pro forma amounts:
<TABLE>
<CAPTION>
1997 1996
- -------------------------------------------------------------------------------------
AS REPORTED PRO FORMA As Reported Pro Forma
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net earnings (loss) (in thousands) .. $(9,176) $(9,791) $12,634 $12,574
Net earnings (loss) per share ....... (.72) (.77) 1.00 .99
</TABLE>
The fair value of the options granted during fiscal 1997 and 1996 were
estimated as $5.86 and $4.76 per share, respectively, on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Expected dividend yield ........... .8% .9%
Expected volatility ............... 35% 35%
Risk-free interest rate ........... 6.2% 5.3%
Expected life of options (years) .. 6 5
</TABLE>
11. QUARTERLY FINANCIAL DATA
The following is a summary of the quarterly results of operations for the years
ended January 31, 1997 and 1996 (unaudited as to quarterly information):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Three months ended Year ended
- ------------------------------------------------------------------------------------------------------------------
Fiscal 1997: April 30 July 31 October 31 January 31 January 31
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues $206,510 $230,065 $226,447 $257,021 $920,043
Gross profit (loss) (a) 3,323 15,528 6,195 (15,327)(b) 9,719 (b)
Earnings (loss)
before income taxes (8,312) 11,773 4,421 (21,996)(b) (14,114)(b)
Net earnings (loss) (5,165) 7,169 2,553 (13,733) (9,176)
Net earnings (loss)
per share $ (.41) $ .57 $ .20 $ (1.08) $ (.72)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Three months ended Year ended
- ------------------------------------------------------------------------------------------------------------------
Fiscal 1996: April 30 July 31 October 31 January 31 January 31
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(in thousands, except per share amounts)
Revenues $205,072 $194,788 $222,298 $204,743 $ 826,901
Gross profit (a) 6,779 8,767 10,843 12,546 38,935
Earnings before income
taxes and cumulative
effect of accounting
change 2,740 4,127 6,570 8,085 21,522
Net earnings 862(c) 2,511 4,039 5,222 12,634(c)
Net earnings per share $ .07(c) $ .20 $ .32 $ .41 $ 1.00(c)
</TABLE>
(a) Gross profit (loss) is calculated as net sales (excluding rental and other
income (expense)) less cost of sales (excluding depreciation and
amortization).
(b) Includes pre-tax charge of $21,182 related to revision of estimate of
future environmental remediation costs.
(c) Includes after-tax charge of $794 or $.06 per share from the cumulative
effect of adopting Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of."
33
<PAGE> 18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued
12. RESTRUCTURING
During fiscal 1995, pre-tax charges of $2,668,000 were recorded to provide for
severance and other costs associated with restructuring the Company's
organization and its operations. The restructuring charges included $1,924,000
for severance and related benefits resulting from a 6% reduction in the work
force, and $744,000 for other costs. Other costs included $203,000 related to
cancellation of computer equipment leases, $168,000 related to computer system
modifications, $141,000 related to the reduction of office space, $100,000
related to legal fees and $132,000 for other miscellaneous costs. The Company's
consolidated balance sheets as of January 31, 1997 and 1996 included an accrual
of $257,000 and $377,000, respectively, relating to the restructuring. The
remaining accrual of $257,000 at January 31, 1997 relates to severance and
related benefits payable through October 1999.
13. SPIN-OFF
On March 21, 1997, the Company effected the spin-off of its petroleum marketing
business to its stockholders. The Company will retain its real estate business
and lease most of its properties on a long-term net basis to the distributed
company, which is named Getty Petroleum Marketing Inc. ("Marketing").
Stockholders of record of the Company on March 21, 1997 received a tax-free
dividend of one share of Marketing common stock for each share of common stock
of the Company.
The Company transferred to Marketing the assets and liabilities of the
petroleum marketing business and the New York Mid-Hudson Valley home heating
oil business previously conducted by a subsidiary of the Company. After the
spin-off, the Company will retain its fee and leased properties, including
service stations and supply terminals, substantially all of which will be
leased or subleased to Marketing, and the Pennsylvania and Maryland home
heating oil business previously conducted by another subsidiary.
As part of the separation of the petroleum marketing business from the
real estate business, the Company and Marketing have entered into various
agreements which address the allocation of assets and liabilities between them
and govern future relationships, including a Reorganization and Distribution
Agreement, a Master Lease Agreement, a Tax Sharing Agreement, a Services
Agreement and a Trademark License Agreement.
Under the Services Agreement, Marketing will provide certain
administrative and technical services to the Company and the Company will
provide certain limited services to Marketing. The net fees to be paid by the
Company to Marketing for services performed (after deducting the fees paid by
Marketing to the Company for services provided by the Company) will initially
be $80,000 per month, and will decline as the services performed decrease. The
Company presently expects that most of such services will be provided by
Marketing for approximately one year.
The Company's results for the fiscal year ended January 31, 1997 include a
pre-tax charge of $1,693,000 for expenses related to the spin-off transaction.
The charge is included in other expense in the consolidated statement of
operations.
The following is a summary of the financial results of the Marketing
business for the fiscal years ended January 31, 1997, 1996 and 1995. The
financial information is presented for informational purposes only and is not
necessarily indicative of the financial results that would have occurred had
Marketing been
34
<PAGE> 19
operated as a separate, stand-alone entity during such periods, nor are they
necessarily indicative of future results. The results of operations of
Marketing in future periods will reflect certain expenses not incurred in prior
periods associated with operating and reporting as a separate publicly held
company.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Years ended January 31,
- ---------------------------------------------------------------------------------------
1997 1996 1995
- ---------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Revenues $888,543 $791,194 $753,735
Earnings (loss) before income taxes and cumulative
effect of accounting change $(25,299)(a) $ 6,325 $ (3,978)(b)
Provision (credit) for income taxes (10,074) 2,379 (1,544)
- ---------------------------------------------------------------------------------------
Earnings (loss) before cumulative
effect of accounting change (15,225) 3,946 (2,434)
Cumulative effect of accounting change -- (282) --
- ---------------------------------------------------------------------------------------
Net earnings (loss) $(15,225) $ 3,664 $ (2,434)
====================================
</TABLE>
(a) Includes charge of $21,182 related to revision of estimate of future
environmental remediation costs.
(b) Includes charge of $1,846 to provide for severance and other costs
associated with restructuring Marketing's organization and its operations.
A summary of the net assets of Marketing as of January 31, 1997 is as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Working capital.................. $ 1,100
Property and equipment, net...... 88,049
Other assets..................... 2,236
Deferred income taxes............ (19,632)
Other, principally deposits...... (17,212)
--------
Net assets....................... $ 54,541
========
</TABLE>
35
<PAGE> 20
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of Getty Realty Corp.:
We have audited the accompanying consolidated balance sheets of GETTY REALTY
CORP. (formerly known as Getty Petroleum Corp.) and SUBSIDIARIES as of January
31, 1997 and 1996, and the related consolidated statements of operations and
cash flows for each of the three years in the period ended January 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Getty Realty
Corp. and Subsidiaries as of January 31, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended January 31, 1997, in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for the impairment of long-lived
assets in fiscal 1996 and its method of accounting for certain investments in
debt and equity securities in fiscal 1995.
/s/ Coopers & Lybrand L.L.P.
New York, New York
March 13, 1997, except for Notes 10 and 13,
as to which the date is March 21, 1997.
COMMON STOCK
The common stock of Getty Realty Corp., known prior to March 31, 1997 as Getty
Petroleum Corp., its only outstanding voting security, is traded on the New
York Stock Exchange (symbol: "GTY"). At April 22, 1997, there were
approximately 3,000 holders of record of Getty Realty's common stock. The price
range of common stock and cash dividends paid with respect to each share of
common stock during the past two fiscal years were as follows:
<TABLE>
<CAPTION>
Price Range
-------------- Cash Dividends
Quarter Ending High Low Per Share
- ---------------------------------------------------
<S> <C> <C> <C>
January 31, 1997 $17.875 $14.50 $ .03
October 31, 1996 17.25 13.625 .03
July 31, 1996 15.75 13.125 .03
April 30, 1996 15.75 13.375 .03
January 31, 1996 15.00 12.625 .03
October 31, 1995 14.125 11.375 .03
July 31, 1995 11.875 10.75 --
April 30, 1995 $13.125 $10.875 $ --
</TABLE>
36
<PAGE> 1
EXHIBIT 22
Subsidiaries of the Registrant.
- -------------------------------
<TABLE>
<CAPTION>
STATE OF
SUBSIDIARY INCORPORATION
---------- -------------
<S> <C>
AOC TRANSPORT, INC. Delaware
AERO OIL COMPANY, INC. Pennsylvania
DONNA OIL CORP. New York
GASWAY INC.** New York
GETTYMART INC. Delaware
GETTY TERMINALS CORP.** New York
KINGSTON OIL SUPPLY CORP.** New York
LEEMILT'S FLATBUSH AVENUE, INC. New York
LEEMILT'S PETROLEUM, INC. New York
GETTY PETROLEUM MARKETING INC.* Maryland
PT PETRO CORP.** New York
RECO PETROLEUM, INC. Pennsylvania
SLATTERY GROUP INC. New Jersey
ENERGY RESOURCE & RECOVERY CORPORATION New York
GT GROUP INC. New York
HSCO GROUP, INC. New York
</TABLE>
*100% of stock distributed to Company's stockholders in connection with the
spin-off.
**100% of stock transferred to Getty Petroleum Marketing Inc. prior to the
spin-off.
<PAGE> 1
EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Getty Realty Corp. (formerly known as Getty Petroleum Corp.) on Form S-8
(Registration Nos. 33-22653, 33-64746 and 333-23373) of our report dated March
13, 1997, except for Notes 10 and 13, as to which the date is March 21, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of Getty Realty Corp. and Subsidiaries as of January 31, 1997 and 1996
and for each of the three years in the period ended January 31, 1997 which
report has been incorporated by reference in this Annual Report on Form 10-K
from the 1997 Annual Report to Stockholders of Getty Realty Corp. and
Subsidiaries.
Coopers & Lybrand L.L.P.
New York, New York
March 13, 1997, except for Notes 10 and 13,
as to which the date is March 21, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GETTY REALTY CORP. AND SUBSIDIARIES AS OF
JANUARY 31, 1997 AND FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 18,902
<SECURITIES> 0
<RECEIVABLES> 19,691
<ALLOWANCES> 1,369
<INVENTORY> 17,311
<CURRENT-ASSETS> 75,004
<PP&E> 372,564
<DEPRECIATION> 186,581
<TOTAL-ASSETS> 284,485
<CURRENT-LIABILITIES> 93,812
<BONDS> 31,235
0
0
<COMMON> 1,358
<OTHER-SE> 99,114
<TOTAL-LIABILITY-AND-EQUITY> 284,485
<SALES> 888,187
<TOTAL-REVENUES> 920,043
<CGS> 878,468
<TOTAL-COSTS> 901,944
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 481
<INTEREST-EXPENSE> 6,806
<INCOME-PRETAX> (14,114)
<INCOME-TAX> (4,938)
<INCOME-CONTINUING> (9,176)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,176)
<EPS-PRIMARY> (.72)
<EPS-DILUTED> (.72)
</TABLE>
