<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
May 28, 1997
GIANT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or jurisdiction of incorporation)
1-10398 86-0642718
(Commission File Number) (IRS Employer Identification No.)
23733 North Scottsdale Road
Scottsdale, Arizona 85255
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(602) 585-8888
<PAGE>
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Over the period May 28, 1997 to May 31, 1997, Giant Four Corners,
Inc., ("GFC"), an indirect wholly-owned subsidiary of Giant Industries,
Inc., (the "Company"), completed the acquisition of ninety-six retail
service station/convenience stores, seven additional retail locations for
future development, certain petroleum transportation and maintenance
assets, options to acquire service station/convenience stores and other
related assets. The assets were acquired from Thriftway Marketing Corp. and
Clayton Investment Company and from entities related to such sellers as
follows: Aladelt Partnership; Allifer, Inc.; Craig Callaway; Jerry D.
Clayton d/b/a Hilltop Liquors; R. J. Dalley and Dalley Investment Company;
Four Corners Gasamat Limited Partnership; Gasamat of Bosque Farms Limited
Partnership; Gasamat of Farmington Limited Partnership; Kifer Limited
Partnership; LVO, Ltd.; N & D Trading Corp.; New Mexico Gasman Limited
Partnership; Charles L. Parker, Jr. and Kathryn C. Parker; David Potter;
Ratcliffe Properties; San Luis Valley Limited Partnership; Toto Traders,
Inc.; White Mountain Retailers Limited Partnership; and Window Rock
Development Limited Partnership. These privately-held entities
are not affiliated with GFC or the Company.
Thirty-two service station/convenience stores, the seven retail
locations for future development, the transportation and maintenance
assets, the options to acquire service station/convenience stores and
other related assets are being purchased for approximately $19,100,000
in cash, an office building with a net book value of approximately $800,000
and a truck maintenance shop with a net book value of approximately $500,000.
GFC is leasing the remaining sixty-four service station/convenience stores
and related assets for a period of ten years and will purchase them
pursuant to options to purchase during the ten year period for approximately
$22,900,000. The leased service station/convenience stores will be accounted
for as capital leases and will initially require annual lease payments of
approximately $2,600,000. These lease payments will be reduced as the
individual service station/convenience stores are purchased pursuant to the
options. The amount paid for the options, described here and below, will be
applied to the acquisition of the last service station/convenience stores
purchased pursuant to such options. The terms and conditions of the
acquisition were determined as a result of arms'-length negotiations.
The service station/convenience stores acquired are retail outlets
that sell various grades of gasoline, diesel fuel and merchandise to the
general public and are located in New Mexico, Arizona, Colorado and Utah,
in or adjacent to the Company's primary market area. GFC intends to use
substantially all of the assets acquired in a manner consistent with their
previous operation. A small number of the acquired service
station/convenience stores have been targeted for disposal and will be sold
for use other than as retail service station/convenience stores.
GFC also entered into a consignment agreement with Thriftway Marketing
Corp. to supply finished product to sixteen service station/convenience
stores operated by Thriftway which are located on the Navajo, Ute and Zuni
Indian Reservations. Under this agreement, GFC will receive the profits
from the finished product sales and will pay Thriftway annual consignment
fees. GFC has options to purchase these service station/convenience stores.
The Company has also entered into long-term supply arrangements with
Thriftway to provide gasoline and diesel fuel to other service stations in
the area that will continue to be operated by Thriftway.
In addition, GFC has one-year options to purchase forty-five
additional units from Thriftway that are located in Wyoming, Texas and
Montana.
GFC will pay additional monies for finished product, merchandise and
supply inventories associated with the units acquired. The amount to be
paid will approximate the sellers cost of such inventories.
The purchase was funded under the Company's Credit Agreement dated
October 4, 1995, as amended, (the "Agreement") with a number of banks as
follows: Bank of America National Trust and Savings Association, as Agent;
Bank of America Illinois, as issuing Bank and as a Bank; First National
Bank of Chicago (successor to NBD Bank, by assignment), as a Bank; and
Union Bank of California, N.A. (formerly known as Union Bank), as a Bank.
This Agreement was amended effective May 23, 1997 to increase the borrowing
commitment under the unsecured capital expenditure facility portion of the
Agreement to $70,000,000 from $30,000,000 and to extend the due date to May
23, 2000 from October 4, 1998, for both the unsecured capital expenditure
facility and the unsecured working capital facility. The proceeds of the
capital expenditure facility can be used for the following: (a) to purchase
the assets of the above described acquisition and for the purchase of the
common stock of Phoenix Fuel Co., Inc., (b) to repurchase shares of the
Company's common stock, and (c) for acquisitions, capital expenditures and
general corporate purposes, but not for working capital expenditures. On
May 23, 1999 the borrowing commitment under the capital expenditure facility
is required to be reduced by $20,000,000. Funds under the working capital
facility portion of the Agreement are available to provide working capital
and letters of credit in the ordinary course of business. Certain covenants
and restrictions contained in the original Credit Agreement were also
modified. The interest rate on these unsecured facilities is tied to various
short-term indices and the associated interest rate margin has been revised
downward. The interest rate at May 31, 1997 was approximately 6.5%.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
No financial statements will be filed under this Item 7(a)
pursuant to Rule 3-05 of Regulation S-X because none of the materiality
tests exceeded the 20% level.
(b) Pro Forma Financial Information.
No pro forma financial statements will be filed under this Item
7(b) pursuant to Rule 11-01(c) of Regulation S-X.
(c) Exhibits.
The Exhibits listed on the accompanying Index to Exhibits
immediately following the signature page are filed as a part of, or
incorporated by reference into, this report.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
GIANT INDUSTRIES, INC.
/s/ A. WAYNE DAVENPORT
-------------------------------------------
A. Wayne Davenport
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: June 11, 1997
<PAGE>
<PAGE>
GIANT INDUSTRIES, INC.
CURRENT REPORT ON FORM 8-K
MAY 28, 1997
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------
2.1*/** Definitive Agreement, dated April 18, 1997, by and
between Giant Four Corners, Inc., as "Buyer", and
Thriftway Marketing Corp. and Clayton Investment
Company, collectively , as "Seller".
4.1 Credit Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Ciniza Production Company, San Juan
Refining Company, Giant Exploration & Production
Company, and Giant Four Corners, Inc., as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as a Bank and Letter of Credit Issuing
Bank and the Other Financial Institutions Parties
hereto. Incorporated by reference to Exhibit 4.1 to
the Company's Report on Form 8-K for the period
October 4, 1995, File No. 1-10398.
4.2* First Amendment, dated May 15, 1996, to Credit
Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Giant Exploration & Production
Company, Giant Four Corners, Inc., San Juan Refining
Company and Ciniza Production Company, as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as issuing Bank and as a Bank, NBD Bank as
a Bank, and Union Bank, as a Bank.
4.3* Second Amendment, dated May 23, 1997, to Credit
Agreement, dated October 4, 1995, among Giant
Industries, Inc., as Borrower, Giant Industries
Arizona, Inc., Giant Exploration & Production
Company, San Juan Refining Company, Giant Four
Corners, Inc. and Ciniza Production Company, as
Guarantors, and Bank of America National Trust and
Savings Association, as Agent, Bank of America
Illinois, as issuing Bank and as a Bank, First
National Bank of Chicago (successor to NBD Bank, by
assignment), as a Bank, and Union Bank of
California, N.A. (formerly known as Union Bank), as
a Bank.
- -----------
* - Filed herewith.
** - Certain exhibits and schedules listed in the Definitive
Agreement are not filed herewith. Copies of the omitted
schedules will be furnished supplementally to the
Commission upon request.
<PAGE>
DEFINITIVE AGREEMENT
BY AND BETWEEN
GIANT FOUR CORNERS, INC.
(AN ARIZONA CORPORATION),
OR NOMINEE
AS "BUYER"
AND
THRIFTWAY MARKETING CORP.
(A NEW MEXICO CORPORATION)
AND
CLAYTON INVESTMENT COMPANY
(A NEW MEXICO LIMITED PARTNERSHIP)
COLLECTIVELY, AS "SELLER"
DATED APRIL 18, 1997
<PAGE>
<PAGE>
TABLE OF CONTENTS
1. Purchase, Sale and Lease Instruments
1.1 Definitions
1.2 Definitive Agreement
1.3 Ancillary Agreements
1.4 Hierarchy
2. Purchase, Sale and Lease of Assets
2.1 Properties
2.1.1 Service Station/Convenience Store Assets
2.1.1.1 Fee Stations
2.1.1.2 Lease Stations
2.1.1.3 Reservation Stations
2.1.1.4 Future Sites
2.1.2 Transportation Assets
2.1.3 Liquor Licenses
2.1.4 Tangible Assets
2.1.5 Intangible Assets
2.1.6 Water Rights
2.1.7 Associated Assets
2.2 Excluded Assets
2.2.1 Ordinary Course of Business Dispositions
2.2.2 Navajo Business Site Leases
2.2.3 Excess Real Property
2.2.4 List of Other Excluded Assets
3. Transfer of Assets
3.1 Assets Sold at Closing
3.2 Inventory
3.3 Assets Leased at Closing
3.3.1 Option to Purchase Lease Stations
3.3.2 Rental Payments for Lease Stations
3.3.3 Buyer s Management of Certain Assets
3.3.4 Seller s Management of Reservation
Stations and Navajo Stations
3.4 Excess Real Property Restrictive Covenant
3.5 Covenants Not To Compete
3.6 Arizona and New Mexico Liquor License Transfers
3.7 Southern Ute Tribal Liquor License
3.8 Tax Deferred Exchanges
3.8.1 1031 Tax Deferred Exchange at Closing
3.8.2 1031 Tax Deferred Exchange Upon Buyer s
Exercise of Options
3.8.3 Costs and Expenses of 1031 Exchange
4. The Purchase Price
4.1 Assets Purchase Price
4.2 Payment
4.3 Escrow
4.3.1 Opening and Closing Dates
4.3.2 Insured Closing Letter
4.3.3 Escrow Cancellation Charges
4.3.4 Closing Costs and Prorations
4.4 Trucks and Trailers
4.5 Supply Agreements
5. Options to Purchase/Right of First Refusal
5.1 Right of First Refusal
5.1.1 Certain Excluded Assets
5.1.2 Exercise of Option to Purchase/Right of First Refusal
5.2 Options to Purchase Certain Wyoming Units
5.2.1 Option to Purchase Wyoming Units
5.2.2 Notice of Exercise of Option
5.2.3 Application of Definitive Agreement
5.2.4 Memorandum of Option to Purchase Units
6. Due Diligence
6.1 Seller s Records
6.2 Seller s Assets
6.3 Seller s Surveys
6.4 Seller s Employees
6.5 Buyer s Use of Information Obtained Through Due Diligence
6.6 Confidentiality
7. Transferred Inventory
7.1 Gasoline and Diesel Fuel Inventory
7.2 Convenience Store Inventory
7.3 Bills of Sale
7.4 Closing
8. Title
8.1 Stations
8.1.1 Section 3.1 Stations Sold at the Closing Date
8.1.2 Section 3.2 Assets Leased or Managed at the Closing Date
8.1.3 Marketable Title
8.2 Lease Assignments
8.2.1 Non-reservation Stations
8.2.2 Reservation Stations
8.3 Other Contract Rights
8.4 Personal Property
8.5 UCC Searches
8.6 Defects
8.6.1 Title Defects and UCC Search Defects
8.6.2 Determination of Title Defect Amount
8.6.3 Dispute as to Title Defect Amount
9. Navajo Settlement Agreement
9.1 Settlement Agreement
9.2 Business Site Leases and Subleases
9.3 Obligations Retained by Seller Under the Settlement Agreement
9.4 Obligations Assumed by Buyer Pursuant to the Settlement Agreement
9.5 Seller s Representations and Warranties
9.6 Indemnification
10. Environmental Obligations
10.1 Seller s Obligations
10.2 Buyer s Obligations
10.3 Environmental Assessments/Remediation
10.4 Environmental Reports
10.5 Environmental Releases After the Possession Date
10.6 Access to Assets
10.7 Access to Records
10.8 Access to Tests
10.9 Reports of Releases
10.10 Use of Environmental Reports, Records and Tests
10.11 Seller s Remediation
11. Environmental Representations and Warranties
11.1 Environmental Compliance
11.2 Knowledge of Releases
11.3 Reports of Releases
11.4 Upgrade and Reclamation Costs
11.5 Environmental Permits
11.6 Environmental Matters
11.7 Governmental Response/Cleanup Funds
11.8 Underground Storage Tank Registrations
11.9 Environmental Compliance of Equipment
11.10 Compliance with 1998 UST Standards
11.11 National Priorities List
12. No Assumption of Liabilities
12.1 Seller
12.2 Buyer
13. Representations and Warranties of Seller
13.1 Organization and Good Standing
13.2 Power and Authority
13.3 Authorization of Transactions
13.4 Binding Obligations
13.5 Taxes
13.5.1 Taxes, Assessments and Valuations
13.5.2 Reassessments and Reevaluations
13.6 Condition of Assets
13.7 Litigation
13.8 Compliance With Laws
13.9 Contracts Compliance
13.10 Consents
13.11 Intangible Property
13.12 Improvements
13.13 Conduct of Business
13.14 Capital Projects
13.15 Utilities
13.16 Financial Statements
13.17 Summary of Operations
13.18 Water Rights
13.19 Claims Against Title
13.20 Condemnation
13.21 Non-Foreign Person
13.22 Necessary Assets
13.23 Benefit Plans
13.24 Brokerage
13.25 Disclosure
14. Representations and Warranties of Buyer
14.1 Organization and Good Standing
14.2 Power and Authority
14.3 Authorization of Transactions
14.4 Binding Obligations
14.5 No Breach
14.6 Due Diligence
14.7 Inspection of Assets
14.8 Assumption of Obligations and Duties Under Contracts
14.9 Buyer s Capacity
14.10 Brokerage
14.11 Disclosure
15. Covenants
15.1 Covenants of Seller and Buyer
15.1.1 H-S-R Act Filing
15.1.2 Casualty and Condemnation
15.1.3 Exhibits and Associated Purchase and Sale Agreements
15.2 Covenants of Seller
15.2.1 Best Efforts
15.2.2 Certain Changes
15.2.3 Maintenance of Assets
15.2.4 Operation of Businesses and Maintenance of Inventory
15.2.5 Maintenance of Inventory Records
15.2.6 Compliance
15.2.7 Transfer of Contracts, Permits and Licenses
15.2.8 List of Contracts
15.2.9 List of Permits, Licenses and Intangible Property
15.2.10 List of Improvements
15.2.11 Information for SEC Filings
15.2.12 Franchises
15.2.13 PMPA
15.2.14 Notices
15.2.15 Corporate and Partnership Existence; Guarantees
15.2.16 Schedules
15.3 Covenants of Buyer
15.3.1 Best Efforts
15.3.2 Financial Commitments
15.3.3 Transfer of Permits and Licenses and Contracts
15.3.4 Notices
16. Conditions Precedent
16.1 Conditions to Obligations of Seller and Buyer
16.1.1 H-S-R Act
16.2 Conditions to Obligations of Seller
16.2.1 Representations and Warranties
16.2.2 Covenants and Agreements
16.2.3 Simultaneous Closings
16.3 Conditions to Obligations of Buyer
16.3.1 Representations and Warranties
16.3.2 Covenants and Agreements
16.3.3 No Adverse Change
16.3.4 No Action or Proceedings
16.3.5 No Statute or Regulation
16.3.6 Due Diligence
16.3.7 Consents
16.3.8 Liquor Licenses
16.3.9 Leases of Real Property
16.3.10 Permits and Licenses
16.3.11 Contracts
16.3.12 Covenants Not To Compete
16.3.13 Simultaneous Closings
16.3.14 Opinion of Navajo Counsel
17. No Solicitation or Negotiation
18. Taxes
18.1 Tax Liabilities
18.2 FIRPTA Affidavit
19. Employees
19.1 Offers of Employment
19.2 Benefits
19.2.1 Seller s Benefit and Retirement Plans
19.2.2 Unused Vacation
19.2.3 Ongoing Benefits
19.2.4 Seller s Responsibility for Existing Benefits
19.3 Employee Rights
19.4 COBRA and Health Claim Data
19.5 Wage Reporting
19.6 Unemployment Compensation
20. Termination; Default; Remedies
20.1 Termination
20.2 Effect of Termination
20.2.1 Non-Willful Failure
20.2.2 Willful Failure
20.3 Remedies
21. Passage of Title and Risk of Loss
22. Buyer s Set-off
23. Costs
24. Closing
24.1 Time and Place of Closing
24.2 Deliveries and Proceedings of Closing
24.3 Options of Buyer to Close in Multiple Transactions
25. Dispute Resolution
25.1 Alternative Dispute Resolution
25.2 Arbitration
26. Survival
27. Notices
28. Miscellaneous
28.1 Time of the Essence; Good Faith
28.2 Further Assurances; Cooperation
28.3 Transition Assistance
28.4 No Third-Party Beneficiaries
28.5 Successors and Assigns
28.6 Headings
28.7 References
28.8 Severability
28.9 Press Releases
28.10 Amendment and Waiver
28.11 Accord
28.12 Counterparts
28.13 Governing Law
28.14 Entire Agreement
Guaranty of Giant Industries Arizona, Inc.
Exhibit A - Definitions
<PAGE>
<PAGE>
LIST OF EXHIBITS
A -- Definitions
B -- Master Lease and Option Agreement
C -- Management Agreement
D -- Supply Agreements
E -- Option to Purchase Agreement
F -- Form of Liquor License Sales Agreements
G -- Form of Liquor License Lease Agreements
H -- Real Property Restrictive Covenant Agreement
I -- Covenants Not To Compete
J -- Excess Real Property and Other Excluded Assets
Right of First Refusal Agreement
K -- Clayton Agreement
L -- Consignment Agreement
M -- Estoppel Certificate
N -- Navajo Nation Settlement Agreement
<PAGE>
<PAGE>
LIST OF SCHEDULES
2.1.1.1 -- Fee Stations
2.1.1.2 -- Lease Stations
2.1.1.3 -- Reservation Stations
2.1.1.4 -- Future Sites
2.1.2 -- Transportation Assets
2.1.3 -- Liquor Licenses
2.1.4 -- Tangible Assets
2.1.5 -- Intangible Assets
2.1.6 -- Water Rights
2.2.3 -- Excess Real Property
2.2.4 -- Other Excluded Assets
3.1 -- Assets Sold at Closing
3.3.1.2 -- Option Schedule
3.3.2 -- Rental Payments
3.3.3 -- Owner s Commissions
3.3.4.3 -- Consignment Fees
4.1 -- Asset Purchase Price; Allocation of Asset Values
5.2.1 -- Description of Wyoming Units
9.2 -- Terms of Navajo Leases and Subleases
11.1 -- Environmental Compliance
11.2 -- Releases
11.4 -- Upgrade and Reclamation Costs by Site
11.5 -- Environmental Permits
11.6 -- Environmental Matters
11.10 -- Compliance with 1998 UST Standards
13.5.1 -- Contested Taxes
13.7 -- Litigation
13.9.1 -- Contracts
13.11.1 -- Infringements
13.13.1 -- Material Adverse Effect on Assets
13.13.2 -- Material Adverse Effect from Contracts and Laws
13.14 -- Capital Projects
13.16 -- Financial Statements
13.17 -- Financial Summary of Operations
13.20 -- Pending Condemnation
13.23 -- Benefit Plans
16.2.3 -- Associated Purchase and Sale Agreements
19.1 -- Employees to Whom Employment Offers May Not be Extended
<PAGE>
<PAGE>
PARTIES
Seller: Thriftway Marketing Corp. Clayton Investment Company
710 East 20th Street 710 East 20th Street
Farmington, New Mexico 87401 Farmington, New Mexico 87401
(505) 326-5571 (505) 326-5571
Attention: David Potter, C.P.A. Attention: Jerry D. Clayton
Buyer: Giant Four Corners, Inc. or Nominee
23733 North Scottsdale Road
Scottsdale, Arizona 85255-3465
(602) 585-8888
Attention: A. Wayne Davenport
RECITALS
WHEREAS, Seller owns and operates certain gasoline service stations
and owns, leases or subleases the real estate on which such stations are
located in Arizona, New Mexico, Colorado and Utah;
WHEREAS, Seller owns certain other retail and transportation assets;
WHEREAS, Seller and Buyer desire to enter into certain agreements
regarding the purchase, sale, lease and transfer by Seller and the
acquisition by Buyer of such assets;
WHEREAS, this Definitive Agreement, and certain other integrated
contracts address the terms and conditions under which Seller will transfer
to Buyer all such assets.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, Seller and Buyer agree as
follows:
AGREEMENTS
1.
PURCHASE, SALE AND LEASE INSTRUMENTS
1.1. DEFINITIONS. As used in this Definitive Agreement (the
"Definitive Agreement"), capitalized terms shall have the meanings set
forth in the text of this Definitive Agreement or in EXHIBIT A, attached
hereto and incorporated herein.
1.2. DEFINITIVE AGREEMENT. This Definitive Agreement is part and
parcel of a business arrangement between the parties whereby the Definitive
Agreement and the Ancillary Agreements described in Section 1.3 below will
be used to transfer all of the Assets from Seller to Buyer.
1.3. ANCILLARY AGREEMENTS. The Ancillary Agreements include, without
limitation:
1.3.1. Master Lease and Option Agreement regarding the lease of
certain of the Stations by Buyer from Seller together with an option by
Buyer to purchase such Stations from Seller, a copy of which is attached as
EXHIBIT B;
1.3.2. Management Agreement regarding Buyer s operation of
certain Fee Stations and Lease Stations pursuant to Sections 3.3.3 and
24.3.1, a copy of which is attached as EXHIBIT C;
1.3.3. Supply Agreements regarding Buyer s exclusive right to
supply the gasoline and diesel fuel requirements of (i) the Stations
referenced in Section 2.1 of this Definitive Agreement and all comparable
stations identified in the Associated Purchase and Sale Agreements and (ii)
the Excluded Assets referenced in Section 5.1.1 of this Definitive
Agreement, copies of which are attached as EXHIBIT D;
1.3.4. Option to Purchase Agreement (the "Option") regarding
certain Wyoming service station units, a copy of which is attached as
EXHIBIT E;
1.3.5. Liquor License Sales Agreements regarding Buyer's
acquisition from Seller of certain Arizona, New Mexico and Southern Ute
Tribal Liquor Licenses owned or operated by Seller, the form of which is
attached as EXHIBIT F;
1.3.6. Liquor License Lease Agreements regarding Buyer s lease
from Seller of certain Arizona, New Mexico and Southern Ute Tribal Liquor
Licenses owned or operated by Seller, the form of which is attached as
EXHIBIT G;
1.3.7. Real Property Restrictive Covenant Agreement limiting
the use, as of Closing, of Excess Real Property, a copy of which is
attached as EXHIBIT H;
1.3.8. Covenants Not To Compete, copies of which are attached
as EXHIBIT I;
1.3.9. Right of First Refusal Agreement regarding Excess Real
Property and all other Excluded Assets, a copy of which is attached as
EXHIBIT J;
1.3.10. Agreement of Jerry D. Clayton and Phyllis Jane Clayton
that, individually and collectively, they shall cause Thriftway Marketing
Corp. and Clayton Investment Company to retain their respective corporate
and partnership existences and to remain solvent for a period of not less
than four (4) years after the sale and lease of the Assets as provided in
Sections 3.1 and 3.2 under this Definitive Agreement or comparable
provisions under the Associated Purchase and Sale Agreements, a copy of
which is attached as EXHIBIT K;
1.3.11. Consignment Agreement regarding the consignment of
petroleum products to the Reservation Stations, Navajo Stations and other
Stations as described herein, a copy of which is attached as EXHIBIT L; and
1.3.12. Certain other instruments necessary to consummate the
contemplated transactions including, without limitation, assignments, bills
of sale, consents, general warranty deeds, leases, franchises, and escrow
documents.
1.4. HIERARCHY. Except as otherwise specifically stated in the
Ancillary Agreements, the parties intend that the Ancillary Agreements
shall be subordinate to and controlled by the Definitive Agreement. It is
further the express intent of the parties that, except as may be provided
otherwise herein: (i) the Definitive Agreement and the Ancillary Agreements
close simultaneously; and (ii) closing of all transactions contemplated by
the Ancillary Agreements shall be contingent upon closing of the
transactions contemplated by this Definitive Agreement. In the event of a
conflict between the provisions of this Definitive Agreement and any
provisions of any of the Ancillary Agreements, the provisions of the
Definitive Agreement shall control and, to the extent necessary, any
conflicting provisions contained in such Ancillary Agreements shall be
supplemented, amended or superseded, as appropriate, by this Definitive
Agreement, except as may be otherwise specifically stated in the Ancillary
Agreement.
2.
PURCHASE, SALE AND LEASE OF ASSETS
Subject to the terms and conditions set forth in this Definitive
Agreement, Seller will grant, sell, convey, transfer, lease, sublease and
assign to Buyer at Closing, and Buyer shall purchase, manage, lease or
sublease the Assets. The Assets shall be and include all gasoline service
stations and convenience stores, transportation assets, mobile homes, truck
transports and trailers, motor vehicles, liquor licenses, contract rights,
franchise rights, real property, personal property, intangible property and
other assets associated with, related to, or used in connection with
Seller s service station and convenience store business, transportation
business, businesses involved in the purchase or sale of petroleum
products, and related businesses in the States of Arizona, New Mexico,
Colorado, and Utah, except for the Excluded Assets described in Section 2.2
below. The Assets include but are not necessarily limited to the assets
described in Section 2.1 below.
2.1 PROPERTIES. The Assets shall include:
2.1.1. SERVICE STATION/CONVENIENCE STORE ASSETS. The Service
Station/Convenience Store Assets include the following Fee Stations, Lease
Stations and Reservation Stations (hereinafter collectively referred to as
"Stations"), together in each case, with all associated Equipment,
Facilities, Improvements, Tangible Assets and Intangible Assets.
2.1.1.1. FEE STATIONS. A total of 46 Fee Stations which
are located in the States of New Mexico (28), Arizona (6), Colorado (11)
and Utah (one). A list of such Fee Stations is set forth on SCHEDULE
2.1.1.1.
2.1.1.2. LEASE STATIONS. A total of 14 Lease Stations
which are located in the States of New Mexico (10), Colorado (three) and
Utah (one). A list of such Lease Stations is set forth on SCHEDULE
2.1.1.2.
2.1.1.3. RESERVATION STATIONS. A total of 17 Reservation
Stations which are located on various Federal Indian Reservations in the
States of New Mexico (four), Arizona (12) and Colorado (one). A list of
such Reservation Stations is set forth on SCHEDULE 2.1.1.3.
2.1.1.4. FUTURE SITES. Five (5) fee sites and one (1)
lease site which are located in the State of New Mexico. A list of the
Future Sites, including Seller s out-of-pocket acquisition costs, is set
forth on SCHEDULE 2.1.1.4.
2.1.2. TRANSPORTATION ASSETS. The transportation assets
described in SCHEDULE 2.1.2.
2.1.3. LIQUOR LICENSES. The one (1) Arizona, twenty-one (21)
New Mexico and one (1) Southern Ute Tribal Liquor Licenses described in
SCHEDULE 2.1.3 and the four (4) Future Sites Liquor Licenses described in
SCHEDULE 2.1.1.4 (the "Liquor Licenses").
2.1.4. TANGIBLE ASSETS. The Tangible Assets described in
SCHEDULE 2.1.4.
2.1.5. INTANGIBLE ASSETS. The Intangible Assets described in
SCHEDULE 2.1.5.
2.1.6. WATER RIGHTS. The Water Rights described in SCHEDULE
2.1.6.
2.1.7. ASSOCIATED ASSETS. All other Associated Assets which
are associated with, related to or used in connection with the Assets or
the Businesses.
2.2. EXCLUDED ASSETS. Notwithstanding anything contained in this
Definitive Agreement to the contrary, the following rights, properties and
assets (collectively referred to herein as the "Excluded Assets") shall not
be transferred by Seller to Buyer:
2.2.1. ORDINARY COURSE OF BUSINESS DISPOSITIONS. All of
Seller s Inventories which shall have been transferred, sold or otherwise
disposed of prior to the Closing in transactions with unaffiliated Persons
conducted in the ordinary course of business.
2.2.2. NAVAJO BUSINESS SITE LEASES. So long as the Settlement
Agreement is executed, the five business site leases that Seller has agreed
to transfer to Navajo business people (the "Navajo Stations") pursuant to
the Settlement Agreement, a copy of which is attached hereto as EXHIBIT N.
2.2.3. EXCESS REAL PROPERTY. Excess real property (the "Excess
Real Property") owned or leased by Seller which is located in the vicinity
of or adjacent to certain of the Stations and described in SCHEDULE 2.2.3.
2.2.4. LIST OF OTHER EXCLUDED ASSETS. Such other properties,
assets, and businesses of Seller which are listed in SCHEDULE 2.2.4.
3.
TRANSFER OF ASSETS
3.1. ASSETS SOLD AT CLOSING. At the Closing Date, the following
Assets will be sold, assigned and conveyed by Seller to Buyer; provided,
however, that (i) in no event shall such Assets specified in Sections
3.1.1, 3.1.2, 3.1.3 and 3.1.5 have an aggregate value, when combined with
the comparable assets identified in the Associated Purchase and Sale
Agreements, of more than Sixteen Million Dollars ($16,000,000) computed in
accordance with the values allocated in SCHEDULE 4.1, and (ii) in no event
shall such Assets specified in Section 3.1.4 have an aggregate value in
excess of Seller s out-of-pocket acquisition costs in accordance with the
values allocated in SCHEDULE 2.1.1.4:
3.1.1. The Fee Stations selected by Buyer prior to the Closing
Date, subject to the limitations described in SCHEDULE 3.1, including their
respective Associated Assets.
3.1.2. The Lease Stations selected by Buyer prior to the
Closing Date, subject to the limitations described in SCHEDULE 3.1,
including their respective Associated Assets.
3.1.3. The Reservation Stations selected by Buyer prior to the
Closing Date, subject to the limitations described in SCHEDULE 3.1,
including their respective Associated Assets.
3.1.4. The Future Sites including their respective Associated
Assets as described in SCHEDULE 2.1.1.4.
3.1.5. All Transportation Assets including their respective
Associated Assets as described in SCHEDULE 2.1.2.
3.1.6. All Associated Assets relating to the Assets set forth
in SCHEDULE 3.1.
3.1.7. All other Assets not leased or managed pursuant to
Section 3.3.
3.2. INVENTORY. All saleable or useable petroleum products and
convenience store Inventories related to the Stations that are transferred
or leased pursuant to Sections 3.1.1, 3.1.2, 3.1.3, 3.1.4 and 3.3 will be
sold and conveyed by Seller to Buyer and will be purchased from Seller by
Buyer at the times and for the amounts determined in accordance with
Section 7.
3.3. ASSETS LEASED AT CLOSING. At the Closing Date, all Fee
Stations, Lease Stations and Reservation Stations, together with their
respective Associated Assets not sold and conveyed to Buyer as set forth in
Section 3.1, shall be leased or subleased by Seller to Buyer for a period
of ten (10) years in accordance with the Master Lease and Option Agreement.
3.3.1. OPTION TO PURCHASE LEASE STATIONS. Buyer will have
exclusive options to purchase the Stations leased by Seller to Buyer under
the terms and conditions specified below. As Buyer exercises its options
to purchase such Stations, they will be deemed to be "Assets" and
"Stations" for all purposes of this Definitive Agreement.
3.3.1.1. The aggregate purchase price upon exercise of
all options to purchase under the Master Lease and Option Agreement for all
of the Stations leased or subleased by Seller to Buyer, when combined with
the purchase price upon exercise of all options to purchase stations leased
or subleased by Buyer pursuant to the Associated Purchase and Sale
Agreements, is Thirty Million Three Hundred Thirty Thousand Dollars
($30,330,000). The value allocated to each Station is set forth in SCHEDULE
4.1.
3.3.1.2. Buyer shall exercise its options to purchase
specific Stations in accordance with the limitations set forth in SCHEDULE
3.3.1.2. In addition, each option exercise shall be for a minimum of
$3,000,000 of Stations (as valued in SCHEDULE 4.1), with Buyer and Seller
each choosing Stations equal to half of the value to be acquired.
3.3.1.3. As Buyer exercises its options to purchase
specific Stations pursuant to Section 3.3.1, Buyer shall tender written
notice to Seller of its intent.
3.3.1.4. Following such notice, all relevant terms and
conditions of this Definitive Agreement regarding the transfer of a Station
to Buyer including, without limitation, all representations, warranties,
and covenants, all provisions relating to the transfer of good and
marketable title and all environmental provisions, including without
limitation those contained in Sections 6 through 16, shall apply to the
purchase and transfer of the Stations and shall be complied with by the
parties.
3.3.1.5. Within one hundred twenty (120) days of
Buyer s notice of exercise of each option to purchase, Seller will convey
good and marketable title to the subject Stations, including all Associated
Assets, free and clear of all Encumbrances. Buyer shall pay Seller the
value allocated to such Stations as set forth in SCHEDULE 4.1.
3.3.1.6. In each county where the Stations are leased
by Seller to Buyer, the parties shall record a memorandum of lease setting
forth the essential terms of the Master Lease and Option Agreement.
3.3.1.7. In accordance with SCHEDULE 3.3.1.2, Buyer
will not pay Seller any additional consideration for the last Two Million
Dollars ($2,000,000) in the aggregate of Stations as set forth in SCHEDULE
4.1 for which Buyer exercises its options to purchase hereunder and its
options to purchase under the Associated Purchase and Sale Agreements.
3.3.2. RENTAL PAYMENTS FOR LEASE STATIONS. During the term of
the Master Lease and Option Agreement, Buyer will pay to Seller annual
rental payments as set forth in SCHEDULE 3.3.2. The annual rental payment
shall be prorated and paid in advance on a monthly basis commencing on the
Closing Date and on the first day of each month thereafter through the
lease term. Rent for any period less than a month shall be prorated on a
daily basis.
3.3.2.1. The monthly rental payments due Seller shall
be reduced pro rata in accordance with SCHEDULE 4.1 when Buyer exercises
its options to purchase the Stations leased or subleased by Seller to
Buyer. The reduction shall take effect on the date of Closing for each of
the affected Stations.
3.3.2.2. During the term of the Master Lease and
Option Agreement, except as may be provided elsewhere herein or in the
Master Lease and Option Agreement, Buyer will be responsible for all costs
and expenses of operating the Stations, including, without limitation,
reimbursement of certain of Seller s costs and expenses as set forth in the
Master Lease and Option Agreement, and will receive all revenues and
benefits.
3.3.2.3. If Buyer has not exercised its options to
purchase all of the Stations leased by Seller to Buyer under the Master
Lease and Option Agreement by the end of the 10-year term of the Master
Lease and Option Agreement, Seller shall have the right to put the Stations
to Buyer and to require Buyer to exercise its option to purchase such
Stations at the price allocated to each such Station in SCHEDULE 4.1 and
upon all the terms and conditions of this Definitive Agreement. Seller s
put option shall be exercised by providing written notice to Buyer no
sooner than thirty (30) days prior to the end of the 10-year term of the
Master Lease and Option Agreement.
3.3.2.4. Buyer will have the right under the Master
Lease and Option Agreement to sublease, at any time and from time to time
without the consent of Seller, any and all of the Stations leased under the
Master Lease and Option Agreement, so long as Buyer retains full
responsibility and remains fully liable to Seller for all obligations and
duties of Buyer under the Master Lease and Option Agreement for the
Stations being subleased.
3.3.3. BUYER S MANAGEMENT OF CERTAIN ASSETS.
3.3.3.1. As contemplated by Section 24.3, the parties
will enter into a Management Agreement, a copy of which is attached as
EXHIBIT C, for the purpose of engaging Buyer to manage, operate, and use
those Assets selected by Buyer pursuant to Section 24.3 from the Closing
Date of the Assets (or portion thereof) described in Section 3.1 to the
date that all conditions to Buyer s Closing for the managed Assets have
been satisfied.
3.3.3.2. The parties shall take all steps and obtain
all consents necessary to allow Buyer to operate the Assets. Buyer shall
be responsible for the expenses of operation of the Assets, including
payroll, inventories, taxes, insurance and rent. Buyer shall receive all
income derived by or through operation of the Assets.
3.3.3.3. During the term of such Management Agreement,
Buyer will pay to Seller an annual commission (the "Owner s Commission")
for each Asset that it operates as set forth in SCHEDULE 3.3.3.3. The
Owner s Commission shall be prorated and paid in advance on a monthly basis
commencing on the day of the commencement of the Management Agreement and
on the first day of each month thereafter through the term of the
Management Agreement. Any Owner s Commission due for a period of less than
a month shall be prorated on a daily basis.
3.3.3.4. The Owner s Commission for each selected Asset
shall automatically cease upon the Closing for that Asset.
3.3.4. SELLER S MANAGEMENT OF RESERVATION STATIONS AND NAVAJO
STATIONS. Until: (i) Buyer takes over management of the applicable
Reservation Station pursuant to a Management Agreement, or (ii) Buyer
acquires the applicable Reservation Station at a Closing, whichever occurs
first (the "Transition Event"), Seller shall operate the Reservation
Stations and Navajo Stations as provided in this Section 3.3.4.
3.3.4.1. Seller shall be entitled to all income from or
attributable to the Reservation Stations and Navajo Stations, and shall be
responsible for paying all expenses and Liabilities of the Reservation
Stations and Navajo Stations prior to the Closing Date for the Assets
described in Section 3.1.
3.3.4.2. From the Closing Date through the Transition
Event for each Reservation Station (the "Transition Period"), Seller will
operate the Reservation Stations as they are now operated by Seller and as
they have been operated on a historical basis. Buyer shall have the right
to request Seller change such operating practices for any Reservation
Station or make new capital improvements to a Station so long as Buyer
agrees to pay any increased cost or capital expenditure required to
implement such requested change.
3.3.4.3. Seller and Buyer shall enter into the
Consignment Agreement for the Reservation Stations and the five (5) Navajo
Stations effective the Closing Date for the Assets described in Section
3.1, where Buyer shall supply petroleum products to such Stations,
establish retail petroleum product pricing and retain all profits
associated with the sale of the consigned petroleum products. The
Consignment Agreement shall terminate as to any Reservation Station upon
the occurrence of a Transition Event relating to such Reservation Station.
The Consignment Agreement shall terminate as to any Navajo Station upon the
sale of that Station as provided in Article II of the Settlement Agreement.
In consideration of the Consignment Agreement, Buyer shall pay Seller a
monthly consignment fee for each Station as set forth on SCHEDULE 3.3.4.3.
3.3.4.4. During the Transition Period, Seller shall be
entitled to all income from or attributable to the Reservation Stations and
the Navajo Stations, and shall be responsible for paying all expenses and
Liabilities, including sustaining capital expenditures necessary to operate
the Stations as they are now operated by Seller and as they have been
operated on a historical basis, of the Reservation Stations and the Navajo
Stations through the Closing of each Reservation Station, except as
provided in the Consignment Agreement and Section 3.3.4.2 above.
3.3.4.5. If the Settlement Agreement is not finally
approved within fourteen (14) months following the Closing Date, or if
prior to such time negotiations concerning the Settlement Agreement are
terminated and Seller acknowledges that the Settlement Agreement will not
become executed in substantially its current form, then at Buyer s option,
Buyer may terminate the Consignment Agreement for all affected Stations
and, following thirty (30) days notice to the applicable Indian Tribe,
replace the same with a Management Agreement. Buyer shall have the same
right to replace the Consignment Agreement with a Management Agreement for
the Southern Ute and Zuni Stations as soon as reasonably possible and in
any event if a Transition Event has not occurred within the fourteen (14)
month period. If during the term of the Management Agreement Buyer is
prohibited from managing any Reservation Station by the applicable Indian
Tribe or the BIA, then the Management Agreement shall forthwith terminate
and the Consignment Agreement referenced in Section 3.3.4.3 shall be
resumed relating to the affected Reservation Station or Navajo Station.
3.3.4.6. If the Settlement Agreement is not entered
into by the third anniversary of the Closing Date, or if a Transition Event
has not occurred with respect to the Southern Ute and Zuni Stations by the
third anniversary of the Closing Date, then at Buyer s option Buyer may
remove any affected Reservation Stations from this transaction as provided
in Section 24.3.3, except that Seller shall be permitted to continue to
operate such Reservation Stations without violation of the Covenant Not to
Compete, provided that Seller may not use the "Thriftway" name or any other
name sold to Buyer pursuant to this Definitive Agreement. Buyer and
Seller shall then enter into a Supply Agreement for such Reservation
Stations and Navajo Stations.
3.3.4.7. In the event that Buyer does not elect its
removal option as provided in Section 3.3.4.6, then Buyer and Seller agree
to review the economic provisions of the Consignment Agreement to ascertain
whether each is then deriving comparable economic benefits from such
Agreement as when it first commenced, and to negotiate any amendments
necessary to achieve this result. Any disputes between the parties
relating to this process, including any inability to reach agreement on
such amendments, shall be settled by arbitration as provided in Section
25.2.
3.3.4.8. Notwithstanding any provision of this Section
3.3.4 to the contrary, Buyer may at any time after the Closing Date at its
option terminate any existing Consignment Agreement or Management Agreement
relating to any Reservation Station or Navajo Station, and enter into a
Supply Agreement for such Station. Stations subject to a Supply Agreement
or a Consignment Agreement shall be permitted to operate notwithstanding
the terms of the Covenants Not to Compete.
3.3.4.9. The term of any Consignment Agreement,
Management Agreement or Supply Agreement, as the case may be, contemplated
by this Section 3.3.4 shall continue for ten (10) years following the
Closing Date unless earlier terminated by Buyer s exercise of an option to
purchase a Reservation Station. Stations subject to a Supply Agreement on
a Consignment Agreement shall be permitted to operate notwithstanding the
terms of the Covenants Not To Compete.
3.4. EXCESS REAL PROPERTY RESTRICTIVE COVENANT. The parties
recognize and agree that the Businesses conducted at the Stations may be
impacted negatively by certain potential uses of the Excess Real Property.
It is the intent of the parties that Seller limit its use of the Excess
Real Property so as not to (i) interfere with Buyer s use or enjoyment of
the Stations or (ii) diminish the value of the Stations to Buyer. The
parties agree that the Excess Real Property shall not be used, for a period
of 10 years after the Closing Date, as a service station, convenience
store, bar (except for a restaurant that serves alcohol in connection with
food service), dance hall, or adult entertainment establishment. Such
limitations will be reflected in the form of the Excess Real Property
Restrictive Covenant Agreement attached as EXHIBIT H, which shall be
executed at the Closing Date. In addition, the Excess Real Property shall
be subject to the Right of First Refusal described in Section 5.1.
3.5. COVENANTS NOT TO COMPETE. As an inducement for Buyer to acquire
Seller s Assets and to pay the Purchase Price specified in Section 4,
Seller and Jerry D. Clayton, R. J. Dalley, Charles L. Parker, Jr., Robert
G. Moss, Jim D. Ratcliffe and David Potter, and their respective spouses
each shall agree to refrain from competing with the Assets and the
Businesses in accordance with the provisions of separate Covenants Not To
Compete, the forms of which are attached as EXHIBIT I. The Covenants Not
To Compete shall provide, among other things, that such parties shall not
own, lease, operate, maintain, or have an interest in any service station
assets, refinery and pipeline assets, transportation assets or associated
assets in the counties where the Assets sold by Seller to Buyer are located
for a period of five (5) years from and after the Closing Date except as
otherwise permitted in the Covenants Not to Compete or in Section 3.3.4.6
or in Section 3.3.4.8 of this Agreement.
3.6. ARIZONA AND NEW MEXICO LIQUOR LICENSE TRANSFERS.
3.6.1. Pursuant to Sections 3.1 and 3.3, at the Closing Date of
the Assets described in Section 3.1, Seller will either sell or lease to
Buyer the Liquor Licenses listed in SCHEDULE 2.1.3, as provided in the
Master Lease and Option Agreement and in the Liquor License Sales Agreement
or the Liquor License Lease Agreement, respectively. The consideration for
the transfer of ownership of the Liquor Licenses is included in the
purchase price allocated to the Stations where such Liquor Licenses are
located as set forth in SCHEDULE 4.1, but shall be stated separately on
each Liquor License Sales Agreement or Liquor License Lease Agreement, as
the case may be.
3.6.2. Prior to the Closing Date, Buyer will apply to the
Arizona Department of Liquor Licenses and Control (the "ADLLC") and the New
Mexico Alcohol and Gaming Division of the Department of Regulation and
Licensing (the "AGD"), as applicable, for approval of the transfer of
ownership or the lease of the Liquor Licenses. Buyer will not attempt to
transfer the location of any Liquor License prior to the Closing Date.
Except as agreed to by the parties, Seller will assist and cooperate with
Buyer to obtain the necessary approvals and will execute any documents
reasonably required by Governmental Authorities for such transfers.
3.6.3. Prior to or at the time of the Closing Date, Seller will
discharge and secure the release of any Encumbrances or Claims which exist
against the Liquor Licenses (collectively the "Liquor License Liens").
Seller will not grant any security interest in, or permit any Liquor
License Liens to attach to the Liquor Licenses between the date of this
Definitive Agreement and the date of final approval of the transfer of
ownership of the Liquor Licenses to Buyer by the ADLLC or the AGD and the
local option districts. If any security interest or Liquor License Liens
attach to the Liquor Licenses between the date of this Definitive Agreement
and the date of final approval by the ADLLC or the AGD of the transfer of
ownership of the Liquor Licenses to Buyer, the amount necessary to release
the Liquor License Liens will be paid by Seller.
3.6.4. As a part of the Liquor License transfer applications, a
wholesaler s debt clearance, in the form required by the AGD and ADLLC,
must be signed by all wholesalers which sold alcoholic beverages under the
Liquor Licenses while Seller was the owner or operator of record. Prior to
the Closing Date, Seller (i) will provide Buyer with a wholesaler s debt
clearance for each Liquor License as required under AGD and ADLLC rules and
regulations, and (ii) will pay any wholesaler s debt that is due.
3.6.5. If any federal, state or local Taxes accrued prior to
the Closing Date are due, or become due before the Closing Date, which
relate to any business in which the Liquor Licenses were or are used by
Seller, Seller shall pay such Taxes prior to the Closing Date. As part of
the Liquor License transfer applications referred to herein, Seller shall
submit a tax clearance for each Liquor License.
3.6.6. Seller warrants and represents to Buyer that: (i) except
as indicated on SCHEDULE 3.6.6, Seller owns or leases the Liquor Licenses,
has the capacity to transfer the Liquor Licenses, and will transfer the
Liquor Licenses free and clear of all Liquor License Liens; (ii) the Liquor
Licenses have been issued under the authority of the ADLLC or the AGD, as
the case may be, and to the best of Sellers knowledge, information and
belief, are valid and will remain valid until the Closing Date; (iii)
subject to the provisions of Section 3.6.6(vi), Seller will not
intentionally do any act which would affect the validity of the Liquor
Licenses or cause their revocation; (iv) subject to the provisions of
Section 3.6.6(vi), Seller has not performed any act or omission relating to
the Liquor Licenses which may be a violation of applicable Laws; (v) Seller
will satisfy or discharge all obligations arising out of the operation of
the Liquor Licenses before the Closing Date; and (vi) if Seller is cited,
at any time before the Closing Date, with any violation of Laws which would
result in suspension or revocation of the Liquor Licenses, Seller will
immediately notify Buyer of the citations and will promptly rectify, at its
sole expense, any such violation.
3.6.7. After the Closing Date, Buyer will have the right, at
any time and from time to time, to request approval by all appropriate
Governmental Authorities of the transfer of the location of any Liquor
License leased by Seller to Buyer, and Seller will assist and cooperate
with Buyer in this regard; provided that when Buyer exercises its Option to
Purchase any Station at which a Liquor License is located as of the date of
this Definitive Agreement, Buyer also shall acquire that Liquor License, in
accordance with the provisions of this Section 3.6, regardless of whether
such Liquor License remains in use at that Station or has been moved by
Buyer to another location.
3.6.8. Any Liquor License leased by Buyer shall be sold to
Buyer on the terms and conditions set forth herein and in the Master Lease
and Option Agreement and the Liquor License Sales Agreement concurrently
with the Closing of the Station with respect to which such Liquor License
was associated.
3.7. SOUTHERN UTE TRIBAL LIQUOR LICENSE.
3.7.1. Pursuant to Sections 3.1 and 3.3, at Closing Seller will
either sell or lease to Buyer the Southern Ute Tribal Liquor License (the
"Southern Ute Liquor License") per the terms of a Liquor License Sales
Agreement or a Liquor License Lease Agreement, respectively.
Notwithstanding the foregoing, however, the parties acknowledge that a
dispute exists between the Southern Ute Tribe and Seller regarding the
validity of Seller s lease of that certain Station identified as Thriftway
#274 and the Southern Ute Tribal Liquor License associated therewith. The
parties further acknowledge that if such dispute can be resolved prior to
Closing, Thriftway #274 and the Southern Ute Tribal Liquor License
associated therewith will be transferred from Seller to Buyer pursuant to
this Definitive Agreement. Pending resolution of the dispute, the Station
and the Southern Ute Liquor License will be operated pursuant to Section
3.3.4 hereof.
3.7.2. Prior to Closing, Seller and Buyer will assist and
cooperate with each other and will execute and deliver to the appropriate
Governmental Authority such instruments of conveyance and transfer as
either party may reasonably request or as may be required by the
appropriate Governmental Authority in order to effectuate the transfer of
the Southern Ute Liquor License from Seller to Buyer.
3.7.3. To the best of Seller s knowledge, information and
belief, Seller warrants and represents to Buyer that: (i) Seller will use
its Best Efforts to transfer the Southern Ute Liquor License and/or all
rights of Seller with respect to the same, free and clear of all Liquor
License Liens; (ii) subject to the provisions of Section 3.7.3(v), Seller
will not intentionally do any act which would affect the validity of the
Southern Ute Liquor License or cause its suspension or revocation; (iii)
subject to the provisions of Section 3.7.3(v), Seller has not intentionally
performed any act or omission relating to the Southern Ute Liquor License
which may be a violation of applicable Laws; (iv) Seller will use its Best
Efforts to satisfy or discharge all obligations arising out of the
operation of the Southern Ute Liquor License before Closing; and (v) if
Seller is cited, at any time before Closing, with any violation of Laws
which would result in suspension or revocation of the Southern Ute Liquor
License, Seller will immediately notify Buyer of the citations and will use
its Best Efforts to promptly rectify, at its sole expense, any such
violation.
3.7.4. Seller makes no warranties as to its ability to transfer
the Southern Ute Liquor License, but acknowledges that such transfer is a
condition to Buyer s acquisition of Thriftway #274. If Seller is unable to
transfer the Southern Ute Liquor License, Thriftway #274 will be operated
as provided in Section 3.3.4.
3.8. TAX DEFERRED EXCHANGES.
3.8.1. 1031 TAX DEFERRED EXCHANGE AT CLOSING. As part of the
consideration to be paid by Buyer to Seller for the Assets at the Closing
Date, the parties understand that a portion of the transaction may qualify
as a like-kind exchange of properties whereby Buyer s rights, title and
interests in and to its (i) Farmington Office Building and (ii) Meridian
Shop will be exchanged for a portion of the Stations transferred pursuant
to Section 3.1 above. The Seller shall cooperate with Buyer in this
regard. In addition, Seller may request that any or all of the Stations
being purchased by Buyer at Closing be exchanged for like-kind property
which shall be identified by Seller. The Buyer shall cooperate with Seller
in this regard provided that the Closing Date is not delayed.
3.8.2. 1031 TAX DEFERRED EXCHANGE UPON BUYER S EXERCISE OF
OPTIONS. At Seller s election exercised within twenty (20) business days
of receipt of Buyer s notice of exercise of an Option to Purchase, Seller
may request that the Station(s) being purchased by Buyer pursuant to the
exercise of Buyer s Option to Purchase under Section 3.3 (the "Option
Station(s)") be exchanged for like-kind property which shall be identified
by Seller. The Buyer shall cooperate with Seller in this regard provided
that the Closing for the Option Station(s) is not delayed.
3.8.3. COSTS AND EXPENSES OF 1031 EXCHANGE. In the event Seller
elects to transfer or Buyer elects to acquire one or more of the Stations
as part of a nontaxable exchange of like-kind property as provided by
Section 1031 of the Internal Revenue Code, the accommodating party will
cooperate with the requesting party in such nontaxable exchange, provided
that the accommodating party shall have no liability in connection with the
nontaxable exchange or incur any additional costs or expenses. Any
additional costs and expenses associated with the nontaxable exchange will
be borne by the requesting party. The requesting party shall indemnify,
defend and hold harmless the accommodating party from and against any
Claims associated with, relating to or arising out of such nontaxable
exchange.
4.
The Purchase Price
4.1. ASSETS PURCHASE PRICE.
4.1.1. Subject to adjustment as provided in Sections 4.4,
8.6.1, 15.1.2.2 and 24.3.3, the aggregate amount to be paid by Buyer to
Seller at the Closing Date for the Assets sold in accordance with Section
3.1 (except the Assets described in Section 3.1.4) of this Definitive
Agreement, and all assets sold in accordance with the Associated Purchase
and Sale Agreements, and for the Options to Purchase Lease Stations in
accordance with Section 3.3.1 of this Definitive Agreement, and all options
to purchase lease stations in accordance with the Associated Purchase and
Sale Agreements, is Seventeen Million Eighty Thousand Dollars ($17,080,000)
in cash plus the conveyance by Buyer to Seller of Buyer s (i) Farmington
Office Building; and (ii) Meridian Shop. The aggregate purchase price,
which shall be paid by Buyer to Seller at the Closing Date, for the Assets
described in Section 3.1.4 shall be equal to Seller s out-of-pocket costs
set forth on SCHEDULE 2.1.1.4.
4.1.2. Subject to adjustment as provided in Sections 8.6.1,
10.1.2, 15.1.2.2, and 24.3.3, the aggregate amount to be paid by Buyer to
Seller for the Assets leased in accordance with Section 3.3 of this
Definitive Agreement, and all assets leased in accordance with the
Associated Purchase and Sale Agreements, as Buyer fully exercises its
options to purchase the Lease Stations and the lease stations under the
Associated Purchase and Sale Agreements, is Thirty Million Three Hundred
Thirty Thousand Dollars ($30,330,000.00). As Buyer exercises its Options
to Purchase, the amount paid for each of the Assets identified by Buyer in
its notice of exercise will be in accordance with the value allocated to
each Asset as set forth on SCHEDULE 4.1.
4.1.3. The amount to be paid at Closing for useable and
saleable Inventory located at the Assets identified in Sections 3.1.1,
3.1.2, 3.1.3, 3.1.4 and 3.3 will be as set forth in Section 7.
4.2. PAYMENT.
4.2.1. At the Closing Date, Buyer shall deliver to the Escrow
Agent the amounts and the deeds to the properties due under Section 4.1.1.
At the Closing Date, the Escrow Agent shall transfer funds due Seller by
wire transfer to the accounts identified by Seller in writing prior to the
Closing Date.
4.2.2. Buyer shall deliver to Seller the amounts due under
Section 4.1.2 above simultaneously with (i) the Close of Escrow established
for such Assets in accordance with Section 4.3 below, and (ii) the transfer
from Seller to Buyer of good and marketable title for such Assets.
4.2.3. A condition of all payments contemplated by the
transactions described in Section 4.1 above shall be the parties
compliance with the requirements set forth in this Definitive Agreement
including, without limitation, those contained in Sections 6 through 16.
4.3. ESCROW. An escrow for this transaction shall be established
with the Title Company referenced in Section 8.1, which Title Company shall
act as Escrow Agent, and such Escrow Agent is hereby engaged to administer
the escrow. This Definitive Agreement constitutes escrow instructions to
the Escrow Agent and a copy shall be deposited with Escrow Agent for this
purpose. Should Escrow Agent require the execution of its standard form
printed escrow instructions, Buyer and Seller agree to execute same;
however, such instructions shall be construed as applying only to Escrow
Agent s engagement, and if there are conflicts between the terms of this
Definitive Agreement and the terms of the printed escrow instructions, the
terms of this Definitive Agreement shall control.
4.3.1. OPENING AND CLOSING DATES.
4.3.1.1. OPENING DATE. Escrow shall be deemed open on
the date (the "Opening Date") when one (1) fully executed original of this
Definitive Agreement has been delivered to Escrow Agent. Escrow Agent
shall advise Buyer and Seller in writing of the Opening Date.
4.3.1.2. CLOSING DATE. Subject to the provisions of
Section 24.3, and as provided in Section 24, the closing of this
transaction and escrow shall occur at the offices of the Escrow Agent upon
satisfaction of the Conditions Precedent set forth in Section 16. In this
Definitive Agreement, "Closing" or "Close of Escrow" shall refer to any
Closing with respect to the Assets as contemplated by Section 24.3.
4.3.2. INSURED CLOSING LETTER. If Escrow Agent does not issue
its own title insurance policies, but acts as an agent for an underwriter,
as a condition to Escrow Agent acting as such, Escrow Agent shall cause its
underwriter to issue to Buyer, a closing protection letter or insured
closing service in written form satisfactory to Buyer, within twenty (20)
days following the Opening Date.
4.3.3. ESCROW CANCELLATION CHARGES. If the escrow fails to
close because of Seller s default, Seller shall be liable for all customary
escrow cancellation charges. If the escrow fails to close because of
Buyer s default, Buyer shall be liable for all customary escrow
cancellation charges. If the escrow fails to close for any other reason,
Seller and Buyer shall each be liable for one-half (1/2) of all customary
escrow cancellation charges.
4.3.4. CLOSING COSTS AND PRORATIONS.
4.3.4.1. Upon the Close of Escrow, Seller and Buyer
each agree to pay one-half (1/2) of the escrow charges.
4.3.4.2. Except as provided elsewhere herein, rent,
real estate taxes, property owners association assessments, utility
charges, and other similar charges, either existing or proposed, shall be
prorated in the escrow as of the Close of Escrow, based upon the latest
available information. If, at the Closing, actual real estate tax
statements are not available, then, following the Close of Escrow and
within thirty (30) days of receipt by either Buyer or Seller of the actual
tax statements, Buyer and Seller shall re-prorate real estate taxes among
themselves and make any necessary adjusting payments. Improvement liens
and other special assessments shall be paid in full by Seller as of the
Close of Escrow. Any other closing costs shall be paid by Buyer and Seller
according to the usual and customary practice of Escrow Agent.
4.3.4.3. All closing costs payable by Seller shall be
deducted from Seller s proceeds at the Close of Escrow. On or before the
Close of Escrow, Buyer shall deposit with Escrow Agent cash in an amount
sufficient to pay all closing costs payable by Buyer.
4.4. TRUCKS AND TRAILERS. The current wholesale value of the trucks
and trailers, included in the Transportation Assets listed on SCHEDULE
2.1.2 and in the comparable Schedules to the Associated Purchase and Sale
Agreements, will be arrived at by an appraisal performed by (i) Roy Lampsa
of Albuquerque Truck Center for trucks and (ii) Bill Wiedeman of
Albuquerque Truck Equipment for trailers. The cost of all such appraisals
shall be shared equally by Seller and Buyer. If the wholesale value of the
trucks and trailers in the aggregate is in excess of Two Million Dollars
($2,000,000), the Buyer will pay to Seller the amount of such excess in
addition to the Purchase Price in an amount up to but not in excess of Two
Hundred Thousand Dollars ($200,000). If the value in the aggregate is less
than Two Million Dollars ($2,000,000), the purchase price for such trucks
and trailers shall be reduced by such shortage.
4.5. SUPPLY AGREEMENTS. During the period of time between the
Closing Date and the Closing for each applicable Station (as provided in
Section 24.3), Buyer will have the exclusive right to supply petroleum
products to the Stations referenced in Section 2.1 of this Definitive
Agreement and all comparable stations identified in the Associated Purchase
and Sale Agreements. For a period of ten (10) years from and after the
Closing Date, Buyer will have the exclusive right to supply petroleum
products to the Excluded Assets referenced in Section 5.1.1 of this
Definitive Agreement. The form of such Supply Agreement is attached as
EXHIBIT D.
5.
OPTIONS TO PURCHASE/RIGHT OF FIRST REFUSAL
5.1. RIGHT OF FIRST REFUSAL.
5.1.1. CERTAIN EXCLUDED ASSETS. For a period of ten (10) years
from and after the Closing Date, Buyer shall have a Right of First Refusal
on any future sale or lease of: (i) any real property which is an Excluded
Asset (other than the Excess Real Property) if such real property is being
sold or leased for use as a service station or convenience store or similar
type of business; and (ii) the Excess Real Property.
5.1.2. EXERCISE OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal referenced in Section 5.1.1 above may be exercised by Buyer at any
time and from time to time, within the time period allowed herein, in
accordance with the Right of First Refusal Agreement attached as EXHIBIT J.
5.2. OPTION TO PURCHASE CERTAIN WYOMING UNITS. On the Closing Date,
Seller shall grant Buyer an Option to Purchase certain Wyoming service
station/convenience store units (the "Wyoming Units") as set forth in the
Option to Purchase Agreement attached as EXHIBIT E.
5.2.1. OPTION TO PURCHASE WYOMING UNITS. For a period of one
year from and after the Closing Date, the Buyer shall have the exclusive
option to purchase all of Seller s Wyoming Units, together with their
Associated Assets, at a per unit price of Two Hundred Thousand Dollars
($200,000). These Wyoming Units are described in SCHEDULE 5.2.1.
5.2.2. NOTICE OF EXERCISE OF OPTION. As Buyer exercises its
option to purchase Wyoming Units pursuant to Section 5.2, Buyer shall
tender written notice to Seller of its intent.
5.2.3. APPLICATION OF DEFINITIVE AGREEMENT. Following Buyer s
notice, all relevant terms and conditions of this Definitive Agreement
regarding the transfer of a Station to Buyer including, without limitation,
all representations, warranties and covenants, all provisions relating to
the transfer of good and marketable title and all environmental provisions,
including without limitation, those contained in Sections 6 through 16,
shall apply to the purchase and transfer of the Wyoming Units and shall be
complied with by the parties.
5.2.4. MEMORANDUM OF OPTION TO PURCHASE UNITS. In each county
where the Wyoming Units are located, the parties shall record a Memorandum
of Option setting forth Buyer s Option to Purchase.
6.
DUE DILIGENCE
Immediately upon execution of this Definitive Agreement, Seller shall
give to Buyer full access, upon reasonable notice and during normal
business hours, to the Assets and Records associated with, related to or
used in conjunction with the Assets in order to allow Buyer to conduct
inspections, as permitted and described in this Section 6 and Section 10
hereof, of the Assets and the Businesses prior to the Closing Date and in
order to assist Buyer in evaluating the Schedules provided by Seller and
determining if any matter or event may have a Material Adverse Effect. No
such inspection or examination, however, shall constitute a waiver or
relinquishment on the part of Buyer of its rights to rely on the covenants,
representations, warranties or agreements made by Seller under this
Definitive Agreement.
6.1. SELLER S RECORDS. At all times after the date hereof and prior
to the Closing Date, the Seller shall give to Buyer, and its accountants,
attorneys, auditors, financial advisors, tax consultants and other
consultants (collectively, "Authorized Representatives"), full access to
all of Seller s Records and furnish to Buyer during such period other
information concerning the Assets or the Businesses as Buyer or its
Authorized Representatives may reasonably request.
6.2. SELLER S ASSETS. Seller shall permit Buyer and its Authorized
Representatives to conduct, at Buyer s sole risk and expense, inspections
of the Assets. Buyer agrees to indemnify, defend and hold harmless Seller
and its agents and employees from and against all damages, losses, costs,
expenses, and liabilities (including reasonable attorneys fees and court
costs incurred by Seller) arising out of Buyer s negligence or willful
misconduct in conducting the inspections of the Assets. Seller shall have
the right to have a representative present at any or all of Buyer s
inspections.
6.3. SELLER S SURVEYS. Promptly following execution of the
Definitive Agreement, Seller shall provide to Buyer, at Seller s expense,
all existing improvements surveys and/or boundary surveys for each Station.
If required by the Title Company for removal of general exceptions 1
through 5 from Schedule B of the title insurance commitment, Seller shall
provide at its expense new surveys or recertifications of old surveys.
6.4. SELLER S EMPLOYEES. All of Seller s employees are "at will."
Prior to the Closing Date, Buyer may interview Seller s employees, during
normal business hours, and after providing reasonable notice to Seller, and
with Seller present if Seller so requests. Buyer agrees that during the
due diligence period described in this Section 6, Buyer will use its Best
Efforts not to interfere with Seller s operations or disrupt Seller s
business. Personnel records provided to Buyer by Seller regarding its
employees shall be kept confidential and Buyer may not use such information
during the course of any interviews in such a manner so as to violate any
rights such employees may possess under Federal, state or tribal law.
Buyer agrees to indemnify, defend and hold harmless Seller from any and all
claims or damages, including reasonable attorneys fees, sought by any
employee for violation of any rights such employee may possess under
Federal, state or tribal law with respect to the dissemination of personnel
records.
6.5. BUYER S USE OF INFORMATION OBTAINED THROUGH DUE DILIGENCE. All
Records, surveys and any other data or information related to the Assets
obtained by Buyer through due diligence are being furnished by Seller
solely for Buyer's review in connection with the transactions contemplated
by this Definitive Agreement. Except as otherwise provided herein,
including but not limited to Sections 10 and 11, Buyer shall use all
Records, surveys and any other data or information related to the Assets
and rely on any information or conclusions contained therein at its own
risk, and, except as otherwise provided herein, including but not limited
to Sections 10 and 11, Seller shall have no liability as to the accuracy
or completeness of the information provided to Buyer. Buyer will use the
information provided by Seller pursuant to Section 6 solely in connection
with its inspections of the Assets and for no other purpose whatsoever.
6.6. CONFIDENTIALITY. In consideration of the delivery of all
Records, surveys and any other data or information related to the Assets
obtained by Buyer through due diligence that was not already in the
possession of Buyer, or that could not have been obtained from other
Persons or that was not in the public domain (the "Asset Information"),
Buyer agrees, on behalf of itself and its successors, assigns, agents,
advisors, and employees, as follows:
6.6.1. The Asset Information is and shall remain solely for
Buyer s use in connection with the transactions contemplated by this
Definitive Agreement. Accordingly, the Asset Information shall remain
strictly confidential and Buyer, its agents, advisors, and employees, shall
not release any such items or disclose any such information to any other
Person without the prior written consent of Seller, which consent shall not
be unreasonably withheld.
6.6.2. Buyer agrees to indemnify, defend and hold harmless
Seller and its employees from and against all damages, losses, costs,
expenses, and liabilities (including reasonable attorneys fees and court
costs incurred by Seller) arising out of or resulting from the failure of
Buyer or its agents, advisors or employees to perform any of their
obligations under the terms of Section 6.6.
6.6.3. Notwithstanding anything contained in Section 6.6 to the
contrary, Buyer may, in accordance with its examination of the Assets,
disclose the Asset Information to its Authorized Representatives.
7.
TRANSFERRED INVENTORY
All saleable and useable gasoline, diesel fuel, lubricant inventory
and convenience store merchandise and supplies on hand at the Stations (the
"Transferred Inventory") shall be transferred by Seller to Buyer as
follows:
7.1. GASOLINE AND DIESEL FUEL INVENTORY. Except as provided in the
Consignment Agreement, Buyer and Seller shall jointly measure all gasoline,
diesel fuel, and lubricant inventory on hand at the Stations as of the
Closing for each Station. Within fifteen (15) Business Days following
Closing for each specific Station, Buyer shall reimburse Seller for all
gasoline, diesel fuel and lubricant inventory measured at Seller s actual
cost from transactions with unaffiliated Persons conducted in the ordinary
course of business.
7.2. CONVENIENCE STORE INVENTORY. Buyer and Seller shall take an
inventory of all saleable and useable retail merchandise and supplies on
hand at the Stations, which is carried in the usual and customary business
of the convenience store operated at such Stations, as of the Closing for
each Station. Within fifteen (15) business days following Closing for each
specific Station, Buyer shall reimburse Seller for all convenience store
merchandise inventoried. All deli supplies, including, without limitation,
all unprepared bulk meats or foods will be reimbursed at Seller s actual
cost; all prepared deli sandwiches or foods will be reimbursed at Seller s
actual cost; and all other retail merchandise and operating supplies will
be reimbursed at Seller s actual retail price less twenty-nine percent
(29%).
7.3. BILLS OF SALE. All Transferred Inventory shall be transferred
to Buyer by bill of sale warranting that the transfer is free and clear of
all Encumbrances whatsoever and clear of any rights or Claims of third
parties, except for payments to vendors by Seller to be made in the
ordinary course of business. Any and all Taxes due on the sale of any of
the Transferred Inventory shall be paid by Seller.
7.3.1. The parties hereto waive compliance with the
requirements of the bulk transfer or bulk sales law of any jurisdiction in
connection with the sale of the Transferred Inventory to Buyer under this
Definitive Agreement.
7.3.2. Seller agrees to indemnify, defend and hold harmless
Buyer from and against any loss by reason of any claims made against Buyer
for violation of any Uniform Commercial Code: Bulk Transfers requirements,
as a successor-in-interest or otherwise for any debts or obligations owed
or Claims with regard to the Transferred Inventory.
7.4. CLOSING. For purposes of this Section 7, the "Closing" shall
mean the first to occur of: (i) sale of the applicable Station pursuant to
Section 3.1, (ii) lease of the applicable Station pursuant to Sections
3.3.1 and 3.3.2 or (iii) management of the applicable Station pursuant to
Sections 3.3.3 and 3.3.4.5.
8.
TITLE
8.1. STATIONS. Seller will order title insurance commitments from a
mutually acceptable title insurance company (the "Title Company") for each
of the Stations. Buyer shall have twenty (20) days from the receipt of
such title insurance commitments, together with legible copies of all
documents cited in the requirements and exceptions therein, to examine such
documents and notify Seller in writing of any objections to title. Seller
shall use its Best Efforts to remedy or cure Buyer s objections to title.
If Seller is unable or unwilling to eliminate any disapproved exceptions,
Buyer shall have the right to select any of the alternatives specified in
Section 8.6 below. Should Buyer fail to notify Seller of any objections
within such twenty (20) day period, any objections shall be deemed waived
with Buyer accepting title as reflected in the title insurance commitments.
8.1.1. SECTION 3.1. STATIONS SOLD AT THE CLOSING DATE. At the
Closing Date, Seller will convey good and marketable fee simple title to
the Fee Stations that are sold to Buyer by general warranty deed and will
assign its leasehold estate in the Lease Stations that are sold to Buyer by
recordable general warranty assignment in a form satisfactory to Buyer, in
each case free and clear of all Encumbrances and rights and Claims of third
parties and subject only to exceptions approved by Buyer.
8.1.2. SECTION 3.3. ASSETS LEASED OR MANAGED AT THE CLOSING
DATE. At the Closing Date, Seller will lease those Fee Stations, Lease
Stations and Reservation Stations that are leased to Buyer by the Master
Lease and Option Agreement, Buyer will manage those Stations described in
the Management Agreement, and Seller will manage certain Reservation
Stations pursuant to Section 3.3.4.
8.1.3. MARKETABLE TITLE. Marketable title to the Assets at
Closing will be evidenced by an ALTA owner's or leasehold owner's policy of
title insurance insuring Buyer's fee title or leasehold estate (including
all ingress and egress easements and rights-of-way), as the case may be, as
of the date and time of Closing, and general exceptions 1, 2, 3, 4 and 5
will be deleted from Schedule B of each policy insuring Buyer s fee title
or leasehold estate. Each policy will be issued by a national title
insurance company acceptable to Buyer, and Seller will pay the premium for
each such title insurance policy. Buyer and Seller shall share equally the
additional premium charge incurred for the deletion of general exceptions
1, 2, 3, 4 and 5 from Schedule B.
8.2. LEASE ASSIGNMENTS. Seller shall take all steps and obtain all
consents necessary to effectuate the assignment of any existing leases
after the execution of the Definitive Agreement and prior to Closing.
Except as otherwise provided herein, Buyer shall assume the tenant's
obligations under the leases arising after Closing and shall indemnify,
defend and hold harmless Seller and its employees from and against all
damages, losses, costs, expenses, and liabilities (including reasonable
attorneys fees and court costs incurred by Seller) arising out of or
resulting from the failure of Buyer or its agents, advisors or employees to
perform any of their obligations under the leases after Closing. Seller
shall remain liable for all obligations existing or arising prior to the
Closing and for all events which occurred prior to the Closing. The
leasehold assignments will be accompanied by the lessor's written consent
to the assignment.
8.2.1. NON-RESERVATION STATIONS. Seller shall provide to Buyer
the lessors' written affirmation: that the leases are in full force and
effect; that the leases have not been modified or amended (except as
disclosed in writing to Buyer); that the lessor will, as to Buyer as
tenant, honor all terms and conditions of the leases; that all rents and
sums due under the leases have been paid through the date of Closing; that
the leases are not in default; and that no events have occurred which, with
the giving of notice or the passage of time, could cause the leases to be
in default. In addition, all assignments shall be accompanied by an
Estoppel Certificate, the form of which is attached as Exhibit M,
evidencing all necessary Governmental Authority or third party approvals
necessary or appropriate regarding assignment or transfer of the leases to
Buyer at Closing.
8.2.2. RESERVATION STATIONS. Subject to the provisions of
Section 3.3.4, Seller will assign and convey, in accordance with Section 3,
the Reservation Stations and all agreements related thereto to Buyer by
recordable instruments in a form satisfactory to Buyer, free and clear of
any Encumbrances and any rights and Claims of third parties. The Navajo
Reservation Stations assignment instruments will be accompanied by the
written approval and consent of the Navajo Nation and any Navajo sublessors
and the BIA for the assignment to Buyer of Seller s Navajo Reservation
Stations leases and subleases, the terms and conditions of which are set
out in the Navajo Settlement Agreement ("Settlement Agreement") attached as
Exhibit N. The Zuni and Southern Ute Reservation Stations assignment
instruments will be accompanied by the written approval and consent of the
appropriate Indian Tribe and the BIA for the assignment to Buyer of
Seller s Zuni and Southern Ute Reservation Stations leases.
8.3. OTHER CONTRACT RIGHTS. Seller will convey its interests in any
transferable Contracts by recordable assignment in a form satisfactory to
Buyer. Such assignments will be accompanied by all consents which may be
deemed necessary by Buyer. The rights to use the Seller s Intellectual
Property Rights and graphics shall also be assigned to Buyer.
8.4. PERSONAL PROPERTY. All Improvements and other personal property
will be transferred by bills of sale warranting to Buyer that the transfer
is free and clear of any Encumbrances and any rights and Claims of third
parties. In addition, all mobile homes, truck transports and trailers, and
other motor vehicles to be transferred herein shall be transferred with
appropriate titles and registrations. Where applicable, sales and use tax,
incurred in the transfer of personal property, wherever situated or
located, will be paid by Buyer.
8.5. UCC SEARCHES. Within ten (10) days after execution of this
Definitive Agreement, Seller, at its expense, shall provide to Buyer a
search of the appropriate state and local records for any financing
statements or fixture filings (the "UCC Searches"). Buyer shall have ten
(10) days from the receipt of such UCC Searches to examine them and to
notify Seller in writing of any objections. Seller shall use its Best
Efforts to remedy or cure Buyer s objections. If Seller is unable to
eliminate any of the disapproved exceptions, Buyer shall have the right to
select any of the alternatives specified in Section 8.6 below. Should
Buyer fail to notify Seller of any objections within such ten (10) day
period, such objections shall be deemed waived by Buyer.
8.6. DEFECTS.
8.6.1. TITLE DEFECTS AND UCC SEARCH DEFECTS. In the event
Buyer shall have timely objected to title as provided in Section 8.1 or UCC
Searches as provided in Section 8.5, Seller shall cure or correct such
objectionable matters at its cost. If Seller is unable to cure or correct
any such objectionable matter, Buyer may elect: (i) to give Seller
additional time to cure and correct such objectionable matters and the
Station subject to such problem would be included as part of the Assets
leased at Closing, in accordance with Section 3.3, for an additional period
of time of up to 180 days, during which period Seller will cure or correct
the objectionable matter; (ii) to enter into a Management Agreement in
accordance with Section 3.3.3 to permit Buyer to manage, operate and use
the Station until Seller is able to cure or correct the objectionable
matter; (iii) to accept title to such Station, subject to the objectionable
matter, and, at Closing, deduct from the value allocated to the Station as
set forth in SCHEDULE 4.1 an amount equal to the cost of curing and
correcting the objectionable matter; or (iv) if the amount to cure or
correct the objectionable matter exceeds 50% of the value allocated to the
Station as set forth in SCHEDULE 4.1, to remove such Station from the
contemplated transaction and to reduce the purchase price by the value
allocated to such Station in SCHEDULE 4.1. All removed Stations shall be
subject, at Buyer s election, to a consignment agreement or if Buyer
prefers a Supply Agreement for a period of ten (10) years; provided that in
any event Seller may not use any of the names sold to Buyer hereunder. In
the event that Buyer selects a consignment agreement, the parties shall
negotiate in good faith a reasonable pumping fee payable to Seller that is
an amount customary in the industry. Any disputes between the parties as
to the amount of the pumping fee shall be settled by arbitration in
accordance with Section 25.2.
8.6.2. DETERMINATION OF TITLE DEFECT AMOUNT. The "Title Defect
Amount" resulting from a title defect shall be determined as follows:
8.6.2.1. If Buyer and Seller agree on the Title Defect
Amount, that amount shall be the Title Defect Amount.
8.6.2.2. If the title defect is a lien or other charge,
then the Title Defect Amount shall be the amount necessary to discharge the
lien or other charge.
8.6.2.3. If the title defect represents any other
obligation, Encumbrance, burden, discrepancy or charge upon or other defect
in title to the affected Station of a type not described in Sections
8.6.2.1 or 8.6.2.2, the Title Defect Amount shall be determined by taking
into account the value allocated by Schedule 4.1 to such Station so
affected, the portion of the Station affected by the title defect, the
legal effect of the title defect, the potential economic effect of the
title defect over the life of the Station, and the values placed on the
title defect by Buyer and Seller and such other factors as are necessary to
make a proper evaluation.
8.6.2.4. Notwithstanding the foregoing, in no event
shall the aggregate Title Defect Amount attributable to the effects of all
title defects upon any given Station exceed the value allocated to such
Station by SCHEDULE 4.1.
8.6.3. DISPUTE AS TO TITLE DEFECT AMOUNT. Seller and Buyer
shall attempt to agree on all Title Defect Amounts at least ten (10)
Business Days prior to Closing. If Seller and Buyer are unable to agree by
that date, Buyer s good faith estimate of the Title Defect Amount shall be
used for the Closing. Any Title Defect Amount in dispute shall be
submitted to arbitration pursuant to Section 25.2. The arbitration
determination shall be made within 45 days after submission of the Title
Defect Amount in dispute and shall be final and binding on both parties.
In making a determination, the arbitrators shall be bound by the rules set
forth in Section 8.6.2 and may consider such other matters as in the
opinion of the arbitrators, are necessary or helpful to make a proper
determination. If Buyer shall fail to so notify Seller of its objections,
this contingency shall be deemed waived by the Buyer.
9.
NAVAJO SETTLEMENT AGREEMENT
9.1. SETTLEMENT AGREEMENT. Seller intends to and will use its Best
Efforts to enter into a Settlement Agreement with the Navajo Nation to
resolve various disputes and disagreements between Seller and the Navajo
Nation regarding Seller s business operations at nineteen business site
leases and subleases within the jurisdictional boundaries of the Navajo
Nation. A copy of the Settlement Agreement which is presently pending the
final approval of the Navajo Nation government is attached as EXHIBIT N.
Buyer shall have the right to approve any changes in the Settlement
Agreement from time to time from the form attached hereto as EXHIBIT N.
9.2. BUSINESS SITE LEASES AND SUBLEASES. Upon Final Approval (as
defined in Article XII.B of the Settlement Agreement) of the Settlement
Agreement (hereinafter the "Final Approval"), the rental rate and term for
each of the nineteen business site leases and subleases addressed by the
Settlement Agreement are set forth in SCHEDULE 9.2.
9.3. OBLIGATIONS RETAINED BY SELLER UNDER THE SETTLEMENT
AGREEMENT.
Upon Final Approval of the Settlement Agreement, Seller shall retain the
following obligations thereunder:
9.3.1. With respect to Articles I, IV, IX, X and XI of the
Settlement Agreement, Seller will retain all duties and obligations. With
respect to Article IX of the Settlement Agreement, Seller has advised Buyer
that the obligations thereunder become null and void with respect to any
Reservation Station sold, transferred or assigned by Seller in a bona fide,
arms length transaction with an unrelated party. Accordingly, Seller
affirmatively represents that it does not intend to fulfill the obligations
of Article IX of the Settlement Agreement following the sale to Buyer of
such Stations.
9.3.2. With respect to Article II of the Settlement Agreement,
Seller will retain all duties and obligations except for those expressly
transferred to or assumed by Buyer in Section 9.4.1.
9.3.3. With respect to Articles III, V, VI and VII of the
Settlement Agreement, Seller will retain all duties and obligations except
for those expressly assumed by Buyer in Section 9.4.2.
9.3.4. With respect to Article VIII of the Settlement
Agreement, Seller will retain all duties and obligations except for those
expressly transferred to or assumed by Buyer in Section 9.4.3.
9.4. OBLIGATIONS ASSUMED BY BUYER PURSUANT TO THE SETTLEMENT
AGREEMENT. Upon Final Approval of the Settlement Agreement, Buyer shall
assume the following obligations thereunder:
9.4.1. With respect to Article II of the Settlement Agreement,
Buyer will accept the assignment of: (i) the financing documents referred
to in Section II.C; (ii) the supply agreements referred to in Section II.D;
and (iii) the accounting and management services referred to in Section
II.E; and will assume the various obligations of Seller thereunder.
9.4.2. With respect to Articles III, V, VI and VII of the
Settlement Agreement, Buyer will assume the obligations of Seller with
respect to the terms of the leases and subleases referred to in Sections
III.D, V.D, VI.A and VII.C, respectively. Seller will make such assignment
without the payment by Buyer of additional consideration following the
execution of such financing documents in accordance with the terms of the
Settlement Agreement.
9.4.3. With respect to Article VIII of the Settlement
Agreement, Buyer will: (i) accept the assignment of financing documents
referred to in Section VIII.B.2 and VIII D and assume the obligations
thereunder; (ii) accept the assignment of Seller s ownership interests in
the EOC referred to in Section VIII.B.4 - 6 and assume the obligations
under the operating agreement for the EOC; and (iii) assume the obligations
of Seller with respect to the terms of the leases and subleases referred to
in Section VIII.G.
9.4.4. Upon assignment of 25-year Burnside and Nakai leases to
Buyer, Buyer will assume the capital expenditure requirements imposed in
the separate settlement documents between Seller and the Burnside and Nakai
sublessors which were negotiated independent of the terms of the Settlement
Agreement and are included in SCHEDULE 9.4.4.
9.5. SELLER S REPRESENTATIONS AND WARRANTIES. Upon Final Approval of
the Settlement Agreement, Seller shall represent and warrant to Buyer as
follows:
9.5.1. The execution, delivery and performance of the
Settlement Agreement has been duly authorized by all necessary corporate
action on the part of Seller and, to the best of Seller s knowledge,
information and belief, has been executed by all necessary officials on
behalf of the Navajo Nation and the BIA.
9.5.2. To the best of Seller s knowledge, information and
belief, the Settlement Agreement, as executed, is in full force and effect
and constitutes the legal, valid and binding obligations of Seller and the
Navajo Nation enforceable against them in accordance with its terms.
9.5.3. The rental rate and the term of each of the business
site leases and subleases set forth in SCHEDULE 9.2 accurately reflect the
existing provisions of such leases and subleases. To the best of Seller s
knowledge, information and belief, such leases and subleases are in full
force and effect and no event has occurred that with the passage of time or
the giving of notice or both would constitute a default by Seller under the
provisions thereof.
9.5.4. After execution of the Settlement Agreement, Seller will
initiate all steps required by the Navajo Nation and the BIA with respect
to the transfer of the business site leases and subleases addressed by the
Settlement Agreement from Seller to Buyer on the same terms as set forth in
SCHEDULE 9.2.
9.6. INDEMNIFICATION.
9.6.1. Seller shall indemnify, defend and hold harmless Buyer
and its employees from and against all damages, losses, costs, expenses,
and liabilities (including all reasonable attorneys fees and court costs
incurred by Buyer) arising out of or resulting from the failure of Seller
or its agents, advisors or employees to perform any of their obligations
and duties retained under the Settlement Agreement.
9.6.2. Buyer shall indemnify, defend and hold harmless Seller
and its employees from and against all damages, losses, costs, expenses,
and liabilities (including reasonable attorneys fees and court costs
incurred by Seller) arising out of or resulting from the failure of Buyer
or its agents, advisors or employees to perform any of their obligations
and duties assumed under the Settlement Agreement and the separate Burnside
and Nakai sublessor settlements.
10.
ENVIRONMENTAL OBLIGATIONS
10.1 SELLER'S OBLIGATIONS.
10.1.1 Seller shall be responsible and liable for:
10.1.1.1. Environmental Claims and Liabilities relating
to the Assets or the Businesses related thereto that are known to Seller on
or before the date Buyer takes possession of such Assets (the "Possession
Date");
10.1.1.2. Environmental Claims and Liabilities arising
out of, or in any manner relating to, the condition of the Assets prior to
the Possession Date, or the ownership or operation of the Assets or the
Businesses related thereto by Seller or any other Person prior to the
Possession Date, that are identified in one or more Environmental Notices
delivered by Buyer to Seller on or before four (4) years after the
Possession Date. Seller agrees to keep confidential any such Environmental
Notices, and any nonpublic information contained therein or attached
thereto ("Environmental Notice Information") in accordance with Section
10.1.3 of this Definitive Agreement;
10.1.1.3. Environmental Claims and Liabilities arising
out of, or in any manner relating to, any Contaminants that were Released
prior to the Possession Date and are not located on the Assets ("Off
Site"), including, but not limited to, any Contaminants Released prior to
the Possession Date that migrate or have migrated off of the Assets and
Contaminants that were transported off of the Assets for treatment,
storage, or disposal;
10.1.1.4. Fines and penalties (not including on-site
Remediation costs discovered within the four year period after the
Possession Date) levied or assessed under any Environmental Law that arise
out of, or in any manner relate to, the condition of the Assets prior to
the Possession Date, or the ownership or operation of the Assets or the
Businesses related thereto by Seller or any other Person prior to the
Possession Date;
10.1.1.5. Claims alleging injury to human health
arising out of, or in any manner relating to, Contaminants that were
Released on, at, or onto the Assets prior to the Possession Date, or
Released Off Site prior to the Possession Date, including, but not limited
to, any such Contaminants that have migrated off of the Assets; and
10.1.1.6. Claims made by third parties (including any
of Seller s employees, but excluding Governmental Authorities) arising out
of, or in any manner relating to, activities associated with, or their
presence on, the Assets prior to the Possession Date.
10.1.2. Seller hereby agrees to indemnify, defend and hold
harmless Buyer from any Environmental Claims and Liabilities for which
Seller is responsible and liable under this Section 10.1; provided,
however, if the costs associated with a particular Station s Remediation,
for which Seller is responsible and liable under this Section 10.1, after
taking into account UST funds available to Seller, exceed the purchase
price allocated to that particular Station pursuant to SCHEDULE 4.1, Seller
may at its option on or before four (4) years after the Possession Date,
and so long as Buyer still owns the Station, remove such Station from the
transaction, unless Buyer assumes the excess Remediation costs of such
Station over the purchase price allocated thereto. Seller shall give Buyer
written notice of Seller s intent to remove the Station from the
transaction and shall refund to Buyer, within thirty (30) days of such
notice, all funds previously paid by Buyer for such Station. Concurrently
with the repayment of such funds, Buyer shall transfer the Station and
related Associated Assets back to Seller in as good condition as received,
reasonable wear and tear excepted, with the same representations and
warranties that were given by Seller to Buyer. In such event, at Buyer s
election, such Station shall become subject to a consignment agreement or
if Buyer prefers a Supply Agreement for a period of ten (10) years;
provided that in any event Seller may not use any of the names sold to
Buyer hereunder. In the event that Buyer selects a consignment agreement,
the parties shall negotiate in good faith a reasonable pumping fee payable
to Seller that is in an amount customary in the industry. Any disputes
between the parties as to the amount of the pumping fee shall be settled by
arbitration in accordance with Section 25.2. Further, transfer of a
Station back to Seller shall not relieve Seller of its obligations to
indemnify, defend and hold harmless Buyer from any Environmental Claims and
Liabilities relating to that Station for which Seller is responsible and
liable under this Section 10.1.
10.1.3. Seller agrees, on behalf of itself and its successors,
assigns, agents, advisors, and employees, as follows:
10.1.3.1. The Environmental Notice Information is and
shall remain strictly confidential and Seller, its agents, advisors, and
employees, shall not release any such items or disclose any such
information to any other Person without the prior written consent of Buyer,
which consent shall not be unreasonably withheld.
10.1.3.2. Seller agrees to indemnify, defend and hold
harmless Buyer and its employees from and against all damages, losses,
costs, expenses, and liabilities (including reasonable attorneys fees and
court costs incurred by Buyer) arising out of or resulting from the failure
of Seller or its agents, advisors or employees to perform any of their
obligations under the terms of this Section 10.1.3.
10.2. BUYER S OBLIGATIONS.
10.2.1. Buyer shall be responsible and liable for all
Environmental Claims and Liabilities arising out of Buyer s operation of
the Assets subsequent to the Possession Date, with the exception of any
Environmental Claims and Liabilities for which Seller is responsible and
liable pursuant to Section 10.1 of this Definitive Agreement including, but
not limited to, Environmental Claims and Liabilities arising out of: (1)
any Remediation activities conducted by Seller, or by any Person on
Seller s behalf, after the Possession Date; and (2) any Remediation
activities conducted by any other Person (including Governmental
Authorities) that arise out of or relate to any Environmental Claims and
Liabilities for which Seller is responsible and liable pursuant to Section
10.1 of this Definitive Agreement. After the expiration of four (4) years
from the Possession Date, Buyer shall be and remain responsible and liable
for any and all Environmental Claims and Liabilities not identified in one
or more Environmental Notices delivered to Seller within such four (4) year
period, with the exception of those Environmental Claims and Liabilities
set forth in Section 10.1.1.1, Sections 10.1.1.3 through 10.1.1.6, and
Section 11.7 for which Seller shall continue to be responsible and liable.
10.2.2. Buyer hereby agrees to indemnify, defend, and hold
harmless Seller from any such Environmental Claims for which Buyer is
responsible and liable under this Section 10.2.
10.3. ENVIRONMENTAL ASSESSMENTS/REMEDIATION. Seller shall be and
remain responsible and liable for: (1) any Remediation commenced prior to
the Possession Date arising out of, or in any manner relating to, the
Assets; (2) the performance of any Phase II environmental assessments
relating to the Assets that are required by any agreement between Seller
and any Governmental Authority (including the Navajo Nation), as well as
any Remediation arising out of such assessments; and (3) any other
Remediation required by Environmental Law or by any Governmental Authority
in connection with Environmental Claims and Liabilities for which Seller is
responsible and liable in accordance with Section 10.1 of this Definitive
Agreement. Any Remediation activities conducted by Seller, or by any
Person on Seller s behalf, will be undertaken in accordance with all
applicable Environmental Laws. Seller will be responsible and liable for
any Contamination generated or otherwise associated with post-Possession
Date Remediation activities, and shall be the owner of any such
Contamination. Seller shall be considered the "generator" of any
Contamination generated in connection with any Remediation activities
conducted by Seller, or by any Person on Seller s behalf, and agrees that
any Contamination associated with any such activities will be treated,
stored, transported, and disposed of in accordance with all applicable
Environmental Laws. Seller agrees to use its Best Efforts to complete any
Remediation for which it is responsible under this Definitive Agreement as
quickly as possible within the constraints of all applicable Environmental
Laws. Buyer shall give Seller reasonable access to the Assets after the
Possession Date for the purpose of conducting required Remediation
activities. Seller will minimize any interference with or disruption of
Buyer s operation of the Assets in connection with Remediation activities.
Seller will indemnify, defend and hold harmless Buyer from any Claims
arising in any way from Remediation activities for which Seller is
responsible, except to the extent such Claims are caused by the negligence
or willful misconduct of Buyer.
10.4. ENVIRONMENTAL REPORTS. Within ten (10) days after execution of
this Definitive Agreement by the parties, Seller shall provide Buyer with a
copy of all reports in Seller s possession or control that have been
submitted to Governmental Authorities prior to the Closing in connection
with both completed and ongoing Remediation activities relating to the
Assets, as well as with a copy of any documents authorizing Seller or any
predecessor in interest to cease or discontinue Remediation at any Asset,
specifying that any Asset at which Remediation has taken place has attained
closure status, or otherwise indicating that no further Remediation is
required at an Asset. Seller shall provide Buyer in a timely manner with a
copy of all correspondence (including reports) in Seller s possession or
control that has been submitted to or received from any Governmental
Authority after the Possession Date in connection with the Remediation of
Contamination for which Seller is responsible under this Definitive
Agreement.
10.5. ENVIRONMENTAL RELEASES AFTER THE POSSESSION DATE. In the event
of a Release of Contaminants by Buyer that commingles with Contamination
for which Seller is responsible under Section 10.1, the parties will agree
on a means to coordinate or split Remediation activities and costs, taking
into account such factors as: (1) the amount of Contaminants released; (2)
the toxicity and mobility of such Contaminants; (3) applicable federal,
state, tribal and local action levels; and (4) the costs a party would
incur to Remediate Contamination for which it is responsible under this
Definitive Agreement to levels satisfactory to Governmental Authorities
having jurisdiction in the absence of Contamination for which the other
party is responsible under the Definitive Agreement. In the event the
parties cannot reach agreement, the matter shall be submitted to
arbitration in accordance with Section 25.2.
10.6. ACCESS TO ASSETS. Seller agrees to provide Buyer with
reasonable access to the Assets prior to the Closing for the purpose of
examining their environmental condition and their compliance with
Environmental Law. Seller shall permit Buyer to conduct soil, air, and
groundwater sampling in connection with its examination of the Assets.
Buyer agrees to indemnify, defend and hold harmless Seller and its agents
from and against all damages, losses, costs, expenses, and liabilities
(including reasonable attorneys fees and court costs incurred by Seller)
arising out of or resulting from negligence or the willful misconduct of
Buyer when examining the Assets.
10.7. ACCESS TO RECORDS. Seller will give Buyer access (both prior
and subsequent to the Closing) to all reports, correspondence, data,
records, documents, and other information (including, but not limited to,
tank inventory records) that in any manner pertain to the environmental
condition of the Assets or their compliance with Environmental Laws
("Environmental Records"). Seller shall retain all Environmental Records
for the Assets for one (1) year after the Closing. Buyer will be entitled
to make copies of any such Environmental Records at its expense. Buyer
agrees to keep confidential any nonpublic information provided to it in
accordance with Section 6.6 of this Definitive Agreement.
10.8. ACCESS TO TESTS. Within ten (10) days after execution of this
Definitive Agreement by both of the parties, Seller agrees to provide Buyer
with a copy of the Statistical Inventory Reconciliation ("SIR") system data
maintained by Seller, the results of the most recent tightness tests, the
most recent line leak detector tests, and, in the case of pipeline systems
and steel underground storage tank systems, the most recent cathodic
protection tests that have been conducted in accordance with applicable
Environmental Law for all above ground storage tanks, underground storage
tanks, and piping associated with such tanks, that are part of the Assets.
Seller represents and warrants that none of the tests are older than the
most recent testing date required by Environmental Law.
10.9. REPORTS OF RELEASES. Within ten (10) days after execution of
the Definitive Agreement, Seller will provide Buyer with copies of all
documents which Seller has in its possession or control notifying the
appropriate Governmental Authorities and third parties, in accordance with
applicable Environmental Laws, of Releases of Contaminants associated with
the Assets.
10.10. USE OF ENVIRONMENTAL REPORTS, RECORDS AND TESTS. Any and all
environmental information or data provided to Buyer by Seller prior to
Closing or generated by Buyer as a part of its examination of Assets prior
to Closing shall be subject to the same use restrictions as set out in
Section 6.5 of this Definitive Agreement and shall be kept confidential in
accordance with the terms of Section 6.6 of this Definitive Agreement.
10.11. SELLER S REMEDIATION. By no later than ten (10) business days
prior to the Possession Date, Seller shall remove from the Assets any and
all Contaminants, residues and other wastes that are located or stored in
tanks, barrels, or other storage containers at the Assets (including
associated storage containers) and shall also remove any soil or other
media containing Contaminants that is being stored on the Assets in
connection with Remediation activities, other than products used or offered
for sale at the Assets in the normal course of Seller s business. Seller
agrees that any such Contaminants, residues, soil, contaminated media, and
other wastes will be treated, stored, transported and disposed of in
accordance with applicable Environmental Laws.
11.
ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES
11.1. ENVIRONMENTAL COMPLIANCE. Seller represents and warrants that,
to the best of its knowledge, information and belief, it is in substantial
compliance with all Environmental Laws that in any manner pertain to the
Assets, to the activities of Seller thereon, or to the transactions
contemplated by this Definitive Agreement, except as to matters identified
by Seller on SCHEDULE 11.1.
11.2. KNOWLEDGE OF RELEASES. Seller represents and warrants that, to
the best of its knowledge, information and belief, all Releases of
Contaminants at the Assets that are required to be reported in accordance
with applicable Environmental Laws, except for Releases that have been
Remediated or otherwise addressed to the satisfaction of the appropriate
Governmental Authorities as evidenced by written documentation from said
Governmental Authorities, are identified by Seller on SCHEDULE 11.2.
11.3. REPORTS OF RELEASES. Seller represents and warrants that, to
the best of its knowledge, information and belief, it has reported to the
appropriate Governmental Authorities and third parties in accordance with
applicable Environmental Laws all Releases of Contaminants associated with
the Assets which are required to be reported.
11.4. UPGRADE AND RECLAMATION COSTS. Seller represents and warrants
that, to the best of its knowledge, information and belief, the information
contained on that certain document captioned "Upgrade & Reclamation Costs
by Site", a copy of which is attached as SCHEDULE 11.4, is complete and
accurate.
11.5. ENVIRONMENTAL PERMITS. Seller represents and warrants that, to
the best of its knowledge, information and belief, all permits, licenses,
approvals and other governmental authorizations that in any manner pertain
to the environment ("Environmental Permits"), and that are required for the
Assets, for any activities of Seller on the Assets, or for the Businesses
have been obtained, are presently in effect, and are listed on SCHEDULE
11.5 to this Definitive Agreement. Seller further represents and warrants
that it is in substantial compliance with all such Environmental Permits.
11.6. ENVIRONMENTAL MATTERS. Seller represents and warrants that,
except as identified on SCHEDULE 11.6, it is not party to any litigation,
investigation, notice of violation, or other legal action involving or
pertaining to any matter concerning the environment ("Environmental
Matter") that relates to the Assets or the Businesses, and, to the best of
its knowledge, information and belief, no such action is threatened or
pending. For purposes of this Definitive Agreement, Environmental Matters
include: (1) any alleged violation of Environmental Law, including, but not
limited to, any alleged failure to have an Environmental Permit; (2) any
matter relating to the Release or threatened Release of any Contaminant;
(3) any matter relating to the Remediation of any Contaminant; and (4) any
matter relating to the manufacture, distribution, use, handling,
generation, emission, treatment, storage, recycling, transportation, or
disposal of any Contaminant.
11.7. GOVERNMENTAL RESPONSE/CLEANUP FUNDS. Seller represents and
warrants that, to the best of its knowledge, information and belief, in the
event of a Release of Contaminants at any of the Assets (regardless of
whether the Release occurs before or after the Possession Date), the owner
and/or operator of the Assets would not be disqualified from receiving
reimbursement from any governmental fund created to provide financial
assurance for activities associated with underground storage tank Releases
(such as the corrective action fund created under the New Mexico Ground
Water Protection Act (the "Fund") and similar state funds) as a result of
any of Seller s actions, or as a result of Seller s failure to take any
action. In the event that a Governmental Authority denies a request by
Buyer (including Persons acting on Buyer s behalf) for reimbursement from
the Fund because Seller has allegedly violated an Environmental Law, Buyer
shall promptly give notice to Seller in writing of the existence of such
denial. Within seven (7) days after receipt of Buyer s notice, Seller
shall either reimburse Buyer the amount requested, to the extent otherwise
allowable under the Fund, or inform Buyer that Seller will contest the
denial on Buyer s behalf. Seller shall diligently pursue reversal of the
denial. In the event Seller desires to contest the denial, but is
precluded from contesting said amount on Buyer s behalf, Buyer shall
diligently pursue reversal of the denial and Seller shall reimburse Buyer
for Buyer s reasonable costs and expenses in pursuing said matter. In the
event that Seller or Buyer is not successful in reversing the Governmental
Authority s denial within one (1) year after Seller s receipt of Buyer s
notice, Seller shall reimburse Buyer the amount requested, to the extent
otherwise allowable under the Fund. At Seller s request, Buyer shall
provide Seller with all invoices and other documentation submitted to the
Governmental Authority in connection with Buyer s request for
reimbursement.
11.8. UNDERGROUND STORAGE TANK REGISTRATIONS. Seller represents and
warrants that, within ten (10) days after execution of this Definitive
Agreement by both of the parties, it will provide Buyer with a copy of all
underground storage tank registrations required by Governmental Authorities
that pertain to the Assets, and that to the best of Seller s knowledge,
information and belief, the information contained on these registrations is
complete and accurate. Notwithstanding anything in Section 10.1 to the
contrary, in the event Buyer removes any underground storage tank for which
it has received a registration from Seller in accordance with this Section
11.8, Buyer shall pay for the cost of tank removal. Seller, however, shall
not be relieved of any of its other responsibilities and liabilities under
said Section 10.1, including, but not limited to, any liability for
Remediation of Contamination discovered during removal of the tank.
11.9. ENVIRONMENTAL COMPLIANCE OF EQUIPMENT. Seller represents and
warrants that, to the best of its knowledge, information and belief, all
Equipment to be delivered to Buyer, including above ground storage tanks,
underground storage tanks, and piping associated with such tanks, is in
substantial compliance with all applicable Environmental Laws, and can be
operated in the ordinary course of business in substantial compliance with
all applicable Environmental Laws.
11.10. COMPLIANCE WITH 1998 UST STANDARDS. Seller represents and
warrants that, except as identified by Seller on SCHEDULE 11.10, all of the
underground storage tanks and associated piping located at the Assets are
in compliance with all applicable underground storage tank requirements of
Governmental Authorities that become effective in 1998.
11.11. NATIONAL PRIORITIES LIST. Seller represent and warrant that,
to the best of its knowledge, information and belief, none of the Assets
are listed or included on the National Priorities List (prepared by the
United States Environmental Protection Agency pursuant to Section 105 of
the Comprehensive Environmental Response, Compensation, and Liability Act)
or the inventory of CERCLA sites maintained by CERCLIS (the CERCLA
Information System) or any state counterparts to these lists.
12.
NO ASSUMPTION OF LIABILITIES
12.1 SELLER. Buyer is only purchasing, leasing or managing the
Assets pursuant to this Definitive Agreement and Buyer is not assuming any
of Seller s obligations and liabilities related to the Assets or the
ownership or operation thereof, except as expressly provided herein.
Except as provided in the Master Lease and Option Agreement and the
Management Agreement, Seller shall remain responsible for all Claims not
expressly assumed by Buyer herein, whether known or unknown, arising from
or related to ownership of the Assets, operation of the Assets, the conduct
of Businesses, or any activity of Seller or others, including such Claims
which are occasioned by the transactions contemplated by this Definitive
Agreement and the Ancillary Agreements, or the ownership or any activity of
Seller, at or before Closing. Except as expressly provided herein, Seller
shall indemnify, defend and hold harmless Buyer from and against all Claims
not expressly assumed by Buyer herein or arising from Seller s acts or
omissions prior to Closing.
12.2. BUYER. Except as expressly provided herein, Buyer shall be
responsible for all Claims, whether known or unknown, arising from
ownership or operation of the Assets by Buyer, the conduct of Buyer's
business, any obligations of Seller expressly assumed by Buyer pursuant to
this Definitive Agreement, or any activity of Buyer from and after the
Possession Date. Except as expressly provided herein, Buyer shall
indemnify, defend and hold harmless Seller from and against all Claims
assumed by Buyer or arising from Buyer s acts or omissions subsequent to
the Possession Date.
13.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
13.1. ORGANIZATION AND GOOD STANDING. Thriftway Marketing Corp. is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New Mexico. Clayton Investment Company is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of New Mexico. Seller is duly qualified to carry on its
business in the States of Arizona, Colorado, Utah, Texas, Wyoming and, to
the best of Seller s knowledge, information and belief, on the Navajo,
Zuni, and Southern Ute Indian Reservations.
13.2. POWER AND AUTHORITY. Seller has all requisite corporate or
partnership power and authority to carry on the Businesses as presently
conducted, to enter into this Definitive Agreement, to sell and/or lease
the Assets on the terms described in this Definitive Agreement, and to
perform its obligations under this Definitive Agreement. The consummation
of the transactions provided for in the Definitive Agreement will not
violate, nor be in conflict with, any provision of Seller s charter,
bylaws, partnership agreement or governing documents, or any agreement or
instrument to which Seller or the Assets are a party or are bound, or any
Laws applicable to Seller or the Assets.
13.3. AUTHORIZATION OF TRANSACTIONS. The execution, delivery and
performance of this Definitive Agreement, the Ancillary Agreements and the
transactions provided for herein and therein, have been duly authorized by
all necessary corporate or partnership action on the part of Seller.
13.4. BINDING OBLIGATIONS. This Definitive Agreement has been duly
executed and delivered on behalf of Seller, and at the Closing Date the
Ancillary Agreements and all other documents and instruments required to be
executed and delivered by Seller shall have been duly executed and
delivered. This Definitive Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws relating to or
affecting the enforcement of creditors rights generally and to general
principles of equity.
13.5. TAXES.
13.5.1. TAXES, ASSESSMENTS AND VALUATIONS. All taxes,
including without limitation all ad valorem, property, excise, gross
receipts, transaction privilege, sales, use, assessments, special
assessments, possessory interest, business activity, severance, payroll,
employment, unemployment compensation and other governmental charges and
assessments, together with any and all interest and penalties,
(collectively "Taxes") that would result in an Encumbrance on the Assets or
otherwise affect title thereto or that Buyer (as the owner or operator of
the Assets and Businesses after Closing) would be responsible for after
Closing that have become due and payable have been properly and timely
withheld, collected, deposited, and paid prior to becoming delinquent, or
are being contested in good faith in the normal course of business. Any
such Taxes which are being so contested are described on SCHEDULE 13.5.1,
and Seller shall continue to be responsible therefor. Except as provided
in the Master Lease and Option Agreement and the Management Agreement,
Seller shall indemnify, defend and hold harmless Buyer from and against all
Taxes that are or become due or that relate to periods prior to Closing.
13.5.2. REASSESSMENTS AND REEVALUATIONS. To the best of
Seller s knowledge, information and belief, Seller is not aware of any
proposed reassessments or reevaluations of any of the Assets, any
imposition of additional assessments or special assessments, or any other
proposals that would increase the amount of any Taxes relating to the
Assets or the business conducted with the Assets.
13.6. CONDITION OF ASSETS. The Stations and their associated
Facilities and Equipment shall be operating in the ordinary course of
business at the Closing, and the Assets shall be in at least as good
condition and repair on the Closing Date as they are on the date of this
Definitive Agreement, reasonable wear and tear excepted.
13.7. LITIGATION. Except for those matters listed on SCHEDULE 11.6
and SCHEDULE 13.7, no suit, action, investigation, material dispute or
other proceeding is pending or, to the best of Seller s knowledge,
information and belief, threatened before any Governmental Authority
relating in any way to the Assets or the use, operation or enjoyment of the
Assets or the Businesses, or relating in any way to the subject matter of
this Definitive Agreement or the transactions contemplated hereby.
13.8. COMPLIANCE WITH LAWS.
13.8.1. The execution and delivery of this Definitive
Agreement does not, and the consummation of the transactions contemplated
by this Definitive Agreement and the Ancillary Agreements and the
compliance with the terms, conditions and provisions of this Definitive
Agreement by Seller will not (i) conflict with or result in a breach of or
constitute a default (or an event which might, with the giving of notice or
passage of time or both, constitute a default) under any of the terms,
conditions, or provisions of any indenture, mortgage, loan, or credit
agreement or any other agreement or instrument to which Seller is a party
or by which Seller or any of the Assets may be bound or affected, or any
judgment or order of any Governmental Authority or any applicable Law, (ii)
result in the creation or imposition of any Encumbrance of any nature
whatsoever upon any of the Assets or give to others any interests or rights
therein, (iii) result in the maturation or acceleration of any Liability
(or give others the right to cause such an acceleration), or (iv) result in
the termination of or loss of any material right (or give others the right
to cause such a termination or loss) under any Contract to which Seller is
party or by which it or the Assets may be bound.
13.8.2. All requirements of the Law relating to the Assets,
the Businesses or the ownership or operation thereof as they are now owned
and operated, and as they have been owned and operated on a historical
basis, have been complied with in all material respects. Except for those
matters listed on SCHEDULE 11.6, no notice, citation, summons or order has
been issued, no complaint has been filed, no penalty has been assessed and
no investigation or review is pending or to the best of Seller s knowledge,
information and belief threatened by any Governmental Authority or other
Person which remains unresolved (i) with respect to any alleged violation
by Seller of any Law (including, but not limited to, any Environmental
Law), or (ii) with respect to any alleged failure by Seller to have any
Permit, certificate, License, approval, registration, or authorization
required in connection with its Businesses.
13.9. CONTRACTS COMPLIANCE.
13.9.1. Except as described on SCHEDULE 13.9.1 and except for
agreements which have been fully performed by all parties thereto, Seller
is, to the best of its knowledge, information and belief, not party to or
bound by any material Contract, or commitment of any kind, oral or written,
formal or informal (including without limitation mortgages, agreements
relating to the borrowing of money, employment and consulting agreements,
franchise agreements, agreements relating to present or future provision of
petroleum products, Intellectual Property agreements, agreements relating
to granting or obtaining of easements or rights-of-way, collective
bargaining agreements, powers of attorney, distribution arrangements,
contracts or orders for future purchase or delivery of goods or rendition
of services, bonus, pension, or retirement plans, accrued vacation pay and
group insurance and welfare agreements).
13.9.2. All Contracts being acquired by Buyer are, to the best
of Seller s knowledge, information and belief, in full force and effect.
Seller has complied with and, to the best of Seller s knowledge,
information and belief, the other party to such Contracts has substantially
complied with, the provisions of such Contracts and neither Seller nor the
other party to such Contracts are in material default under any of the
terms thereof, and no event has occurred that with the giving of notice or
the passage of time or both would constitute a default by Seller or the
other party to such Contracts under any provision thereof.
13.9.3. To the best of Seller s knowledge, information and
belief, all leases/subleases are in full force and effect, have not been
modified or amended (except where disclosed in writing by Seller), and are
free of any Encumbrances. To the best of Seller s knowledge, information
and belief, and except for the Navajo leases/subleases discussed in Section
9, no leases/subleases are in default, and no events have occurred which
with the giving of notice or the passage of time, or both, could cause any
such leases/subleases to be in default. Further, to the best of Seller s
knowledge, information and belief, all rents and sums due under any
leases/subleases have been paid or will be paid through the date of
Closing.
13.10. CONSENTS. As of the Closing for any Asset, all required
Consents, approvals, or authorizations of, or registrations or filings
with, any Person, including any trustees or holders of indebtedness or
obligations of Seller (collectively, "Lenders"), or Governmental Authority,
in connection with the execution and delivery of this Definitive Agreement
or the consummation of the transactions contemplated hereby, shall have
been obtained by Seller at Seller s cost and expense, except that any and
all costs and expenses incurred in obtaining approvals for transfers of
Liquor Licenses shall be borne by Buyer. Transfer fees for fast food
franchises shall be borne equally by Seller and Buyer, provided that
Buyer s maximum obligation shall be $12,500.
13.11. INTANGIBLE PROPERTY.
13.11.1. Except as described on SCHEDULE 13.11.1, the
operation of the Assets and the Permits, Licenses and Intellectual Property
Rights used in connection therewith do not infringe on any valid patent,
copyright, tradename or other right held by any third party in any material
respect. To the best of Seller s knowledge, information and belief, no
claim by any third party contesting the validity, enforceability, use or
ownership of the Permits, Licenses and Intellectual Property Rights is
pending or threatened.
13.11.2. To the best of Seller s knowledge, information and
belief, all Permits and Licenses necessary or proper for Seller s
ownership, lease, operation or use of the Assets are in place and in full
force and effect.
13.12. IMPROVEMENTS. To the best of Seller s knowledge, information
and belief, the construction, use and operation of all Improvements located
on the Assets conform to all material provisions of all applicable
building, zoning, safety, fire, environmental and health Laws (including,
but not limited to, underground storage tank regulations), and other Laws,
Permits, Licenses and certificates and all restrictions and conditions
affecting title or insurability of Improvements.
13.13. CONDUCT OF BUSINESS.
13.13.1. Except as disclosed in SCHEDULE 13.13.1, since
January 1, 1997, Seller has not, to the best of Seller s knowledge,
information and belief, experienced any Material Adverse Effect with
respect to any of the Assets, Businesses, operations or financial position
of Seller, taken as a whole.
13.13.2. Except as disclosed in SCHEDULE 13.13.2, Seller is
not, to the best of Seller s knowledge, information and belief, a party to
any Contracts, or subject to any Law to which Buyer will be subject, which
would have a Material Adverse Effect on the Assets or the Business of
Seller, taken as a whole.
13.14. CAPITAL PROJECTS. SCHEDULE 13.14 contains a listing of all
material capital projects being conducted or proposed (i.e., budgeted or
approved) to be conducted in relation to the Assets, together with the
estimated costs thereof and the estimated cost remaining to be paid for
completion.
13.15. UTILITIES. Buyer shall have access and the right to use,
subject to Buyer s payment of all applicable costs or fees, all gas,
electricity, water, sanitation, sewer and other utilities necessary or
historically used for the operation of the Assets and the Businesses.
13.16. FINANCIAL STATEMENTS. SCHEDULE 13.16 sets forth (i) audited
financial statements of Thriftway Marketing Corp. as of the close of its
fiscal years ended December 31, 1994, 1995 and 1996, (ii) unaudited
financial statements of Thriftway Marketing Corp. as of March 31, 1997,
(iii) unaudited financial statements of Clayton Investment Company for the
years ended December 31, 1994, 1995 and 1996 and as of March 31, 1997, and
(iv) profit and loss statements for Thriftway Marketing Corp. and Clayton
Investment Company for the three months ended March 31, 1997. These
financial statements, together with the notes thereto, and the profit and
loss statements are complete and correct in all material respects, do not
contain or reflect any material inaccuracies or discrepancies, and present
fairly the financial position and the results of operations of Seller as of
the dates and for the periods indicated subject, in the case of unaudited
statements for 1997, to customary year-end adjustments. The financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. Since December 31,
1996, there has not been any change in operations, Assets or Businesses
which would have a Material Adverse Effect.
13.17. SUMMARY OF OPERATIONS. SCHEDULE 13.17 sets forth a financial
summary of operations of the Businesses for the periods indicated prepared
from the books and records of Seller. To the best of Seller s knowledge,
information and belief, such financial summary (taking into consideration
all notes and explanations contained therein) fairly represents the results
of operations for the periods indicated in all material respects. Since
the last period indicated in such financial summary, there has not been any
change in the Assets or the Businesses which would have a Material Adverse
Effect.
13.18. WATER RIGHTS. To the best of Seller s knowledge, information
and belief, SCHEDULE 2.1.6 sets forth a complete and accurate description
of the water and water rights used by Seller in connection with the Assets.
13.19. CLAIMS AGAINST TITLE. Subject to Permitted Exceptions, Seller
has all good and marketable title necessary to own, use or operate the
Assets and no claim or demand has been made or asserted challenging
Seller s title, ownership, use or operation of the Assets.
13.20. CONDEMNATION. Except as set out in SCHEDULE 13.20, there are
no material condemnation, expropriation, eminent domain, or similar
proceedings pending, and, to the best of Seller s knowledge, information
and belief, no such proceedings are threatened affecting any of the
Assets. Seller has not received any written notice for assessments for
public improvements against the real property on which any Station is
located which remain unpaid, and, to the best of Seller s knowledge,
information and belief, no such assessments have been proposed.
13.21. NON-FOREIGN PERSON. Seller is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or foreign estate
(as those terms are defined in the Code).
13.22. NECESSARY ASSETS. The Assets together with the assets
described in the Associated Purchase and Sale Agreements constitute and
include all gasoline service stations and convenience stores, refinery
tankage and associated pipeline assets, crude oil or products storage
facilities, terminals, racks, transportation assets, mobile homes, trucks
and trailers, motor vehicles, liquor licenses, contract rights, franchise
rights, real property, water rights, personal property, intangible property
and other assets associated with, related to, or used in connection with
the service station and convenience store businesses, transportation
businesses, refinery businesses, businesses involved in the purchase or
sale of petroleum products and all related businesses of Seller, any
"Seller" in the Associated Purchase and Sale Agreements, and the Persons
identified in Section 3.5 and any entity in which they have an interest, in
the States of Arizona, New Mexico, Colorado, and Utah, except for the
Excluded Assets and any "Excluded Assets" in the Associated Purchase and
Sale Agreements. Except for the Excluded Assets and any "Excluded Assets"
in the Associated Purchase and Sale Agreements, such assets include all
transferable assets necessary for owning and operating all of such assets,
and all of such businesses as they are currently being operated and as they
have been operated on a historical basis.
13.23. BENEFIT PLANS. Except as set forth in SCHEDULE 13.23, Seller
has no benefit plans, other than medical benefit plans, for its employees.
13.24. BROKERAGE. Seller has not made any agreement or taken any
other action which may cause any Person to become entitled to a broker's
fee or commission as a result of the transactions contemplated hereunder,
and Seller shall indemnify, defend and hold harmless Buyer from and against
any commissions or fees owed any broker or agent claiming entitlement
thereto by reason of Seller s agreements or actions.
13.25. DISCLOSURE.
13.25.1. Except as disclosed herein, and to the best of
Seller s knowledge, information and belief, Seller is not aware of any
facts pertaining to Seller, the Assets or the Businesses which would have a
Material Adverse Effect and which have not been disclosed in this
Definitive Agreement.
13.25.2. Except as disclosed herein, and to the best of
Seller s knowledge, information and belief, no representation or warranty
by Seller in this Definitive Agreement, and no information provided by
Seller to Buyer, and no exhibit, document, affidavit, statement,
certificate or schedule furnished or to be furnished to Buyer pursuant
hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact, or omits
or will omit to state a material fact necessary to make the statements or
facts contained herein or therein not misleading or necessary to provide
Buyer with proper information as to Seller and the Assets and Seller s
ability to perform its obligations under this Definitive Agreement.
14.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
14.1. ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Arizona, and Buyer is, or will be at the Closing Date duly
qualified to carry on its business in the States of New Mexico, Colorado,
Utah and, to the best of its knowledge, information and belief, on the
Navajo, Zuni, and Southern Ute Indian Reservations.
14.2. POWER AND AUTHORITY. Buyer has all requisite corporate power
and authority to enter into this Definitive Agreement, to purchase and/or
lease the Assets on the terms described in this Definitive Agreement, and
to perform its obligations under this Definitive Agreement. The
consummation of the transactions provided for in this Definitive Agreement
will not violate, nor be in conflict with, any provision of Buyer s
charter, bylaws or governing documents, or any agreement or instrument to
which Buyer is a party or is bound, or any Laws applicable to Buyer.
14.3. AUTHORIZATION OF TRANSACTIONS. The execution, delivery and
performance of this Definitive Agreement, the Ancillary Agreements and the
transactions provided for herein and therein, have been duly authorized by
all necessary corporate action on the part of Buyer.
14.4. BINDING OBLIGATIONS. This Definitive Agreement has been duly
executed and delivered on behalf of Buyer, and at the Closing Date the
Ancillary Agreements and all other documents and instruments required to be
executed and delivered by Buyer shall have been duly executed and
delivered. This Definitive Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar Laws relating to or affecting
the enforcement of creditors rights generally and to general principles of
equity.
14.5. NO BREACH. Neither the execution and delivery of this
Definitive Agreement by Buyer, nor the performance by Buyer of Buyer's
obligations contained in this Definitive Agreement, nor the fulfillment of
the terms, provisions and conditions of this Definitive Agreement by Buyer
(i) requires any approval of the shareholders of Buyer, (ii) requires any
approval or consent of any trustee or holders of any indebtedness or
obligations of Buyer, (iii) contravenes any law or any government rule,
regulation, or order binding on Buyer, (iv) violates, or is in conflict
with, any provision of Buyer s Articles of Incorporation, Bylaws, charter
or any other governing documents, or (v) contravenes the provisions of, or
constitutes an event of default under, any indenture, mortgage, contract,
or other agreement, judgment, decree, order, statute, rule or regulation to
which Buyer is a party or by which Buyer is affected or bound.
14.6. DUE DILIGENCE. Buyer is a sophisticated investor,
knowledgeable and experienced in the financial and business risks attendant
to investments in real property and business assets, and is capable of
evaluating the merits and risks of an investment in the Assets and the
Businesses.
14.7. INSPECTION OF ASSETS. Buyer will inspect the Stations pursuant
to Section 6. Except as otherwise provided in this Definitive Agreement or
the Ancillary Agreements, and, subject to the provisions of this Definitive
Agreement and the Ancillary Agreements, Buyer will accept conveyances of
the Stations in their physical condition on the date of this Agreement,
reasonable wear and tear excepted.
14.8. ASSUMPTION OF OBLIGATIONS AND DUTIES UNDER CONTRACTS. As
Seller s successor in interest under the Contracts transferred hereunder,
Buyer shall assume all of the obligations and duties of Seller arising out
of such Contracts from and after the Closing, except as may be provided
otherwise herein or in the Ancillary Agreements. Buyer shall indemnify,
defend and hold harmless Seller and its agents from and against all
damages, losses, costs, expenses, and liabilities (including reasonable
attorneys fees and court costs incurred by Seller) arising out of or
resulting from the failure of Buyer or its agents, advisors or employees to
perform any of Buyer s obligations and duties under the aforementioned
Contracts.
14.9. BUYER S CAPACITY. Buyer has access to sufficient funds to (i)
perform all of Buyer s obligations under this Definitive Agreement, the
Ancillary Agreements, and the other instruments and documents required or
contemplated hereunder at the times required herein, and (ii) consummate
the transactions provided for herein and therein at the times required.
Buyer presently has access to sufficient and current funds to close this
entire transaction and it is not using this transaction as a financing
device to acquire Seller s Assets.
14.10. BROKERAGE. Buyer has not made any agreement or taken any
other action which may cause any Person to become entitled to a broker's
fee or commission as a result of the transactions contemplated hereunder,
and Buyer shall indemnify, defend and hold harmless Seller from and against
any commissions or fees owed any broker or agent claiming entitlement
thereto by reason of Buyer's agreements or actions.
14.11. DISCLOSURE.
14.11.1. Except as disclosed herein, and to the best of
Buyer s knowledge, information and belief, Buyer is not aware of any facts
pertaining to Buyer or its operations or business which would adversely
effect Buyer s ability to perform its obligations under this Definitive
Agreement.
14.11.2. Except as disclosed herein, and to the best of
Buyer s knowledge, information and belief, no representation or warranty by
Buyer in this Definitive Agreement, and no information provided by Buyer to
Seller, and no document, affidavit, statement, certificate or schedule
furnished or to be furnished to Seller, pursuant hereto, or in connection
with the transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading or necessary to provide Seller with proper
information as to Buyer and its ability to perform its obligations under
this Definitive Agreement.
15.
COVENANTS
15.1 COVENANTS OF SELLER AND BUYER.
15.1.1. H-s-r act filing. As soon as practical after the date
hereof, but in no event later than five (5) Business Days after the date
hereof, Seller and Buyer shall each submit all necessary filings in
connection with the transactions provided for in this Definitive Agreement
under the H-S-R Act. Except for the filing fee which shall be shared
equally by Seller and Buyer, each party shall be responsible for any other
costs and expenses that it incurs in connection with any H-S-R Act
application.
15.1.2. CASUALTY AND CONDEMNATION.
15.1.2.1. Seller shall retain all risk of loss or
damage to any Assets from fire, or other casualty prior to the Closing.
15.1.2.2. If, prior to the Closing, there is a taking
of any part of or interest in the Assets by a Governmental Authority, or if
a Governmental Authority having such power informs Seller or Buyer that it
intends to proceed with such a taking, and if the effect of the taking is,
or could reasonably be expected to be, to prevent normal operation of any
material part of the Assets for a period of twenty (20) days after the
occurrence of such taking, then Buyer may (i) elect to remove such Asset
from the transaction and have the purchase price reduced by the value
allocated to such Asset in SCHEDULE 4.1, or (ii) elect to close on such
Asset and receive from the condemning Governmental Authority all
condemnation proceeds.
15.1.3. EXHIBITS AND ASSOCIATED PURCHASE AND SALE AGREEMENTS.
As soon as practicable after the date hereof, but in no event later than
five (5) Business Days after the Date hereof, Seller and Buyer shall (i)
enter or cause their Affiliate to enter into the Associated Purchase and
Sale Agreements; and (ii) attach to this Definitive Agreement and the
Associated Purchase and Sale Agreements all of the various exhibits
referred to herein and therein.
15.2. COVENANTS OF SELLER. From the date hereof through Closing,
except as specifically provided otherwise in Sections 15.2.3, 15.2.4,
15.2.7 and 15.2.12.2, Seller covenants and agrees with Buyer as follows:
15.2.1. BEST EFFORTS. Subject to Seller s rights hereunder,
Seller shall use its Best Efforts to take or cause to be taken all such
actions as may be necessary or advisable to consummate and make effective
the sale of the Assets and the transactions provided for in this Definitive
Agreement and to assure that as of each Closing it will not be under any
material corporate, legal or contractual restriction that would prohibit or
delay the timely consummation of such transactions.
15.2.2. CERTAIN CHANGES. Except as contemplated in this
Definitive Agreement, Seller will not, without first obtaining the consent
of Buyer (which consent will not be unreasonably withheld): (i) make any
change in the nature of the Businesses or carry on the Businesses other
than in the ordinary course in accordance with past custom and practice;
(ii) enter into or amend in any material respect any Contract other than in
the ordinary course of business; (iii) refrain from using its Best Efforts
to maintain all qualifications of Seller which are required for it to carry
on the Businesses; (iv) sell or otherwise transfer or encumber (other than
liens and security interests to be released at Closing) title to any of the
Assets, other than Inventory in the ordinary course of business and
personal property that is replaced by equivalent property or consumed in
the normal operation of the Assets; (v) except to the extent otherwise
required by applicable legal requirements, fail to maintain its books and
Records in the usual, regular and ordinary manner and consistent with past
customs and practices; (vi) permit its insurance policies to be canceled or
terminated or any of the coverages thereunder to lapse, unless
simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under the
canceled, terminated or lapsed policies are in full force and effect; or
(vii) commit itself to do any of the foregoing.
15.2.3. MAINTENANCE OF ASSETS. From the date hereof through
the Possession Date, Seller shall use reasonable efforts to cause the
Assets to be maintained and operated in a good and workmanlike manner, and
in the ordinary course of business, consistent with past practices and
industry standards, shall maintain insurance now in force with respect to
the Assets and shall pay or cause to be paid all costs and expenses
incurred in connection therewith.
15.2.4. OPERATION OF BUSINESSES AND MAINTENANCE OF INVENTORY.
From the date hereof through the Possession Date, Seller shall use
reasonable efforts to carry on the Businesses in the ordinary course and in
substantially the same manner as Seller has heretofore and shall not
introduce any new method of management, operation or accounting with
respect to the Businesses. Seller shall use reasonable efforts to maintain
the customers, goodwill and reputation of the Businesses, and shall
maintain Inventory, supplies and spare parts in the ordinary course of
business consistent with past practice in amounts reasonably sufficient to
allow Buyer to continue operations of the Assets in the ordinary course
immediately after the Possession Date.
15.2.5. MAINTENANCE OF INVENTORY RECORDS. Seller shall use
reasonable efforts to faithfully maintain Inventory records for each of the
Stations, to which Buyer shall have reasonable access prior to, at Closing
and for a period of twenty-four (24) months after the Closing, sufficient
to show with reasonable certainty whether, since the date of the last
tightness inspection of each of Seller s above ground storage tanks,
underground storage tanks and piping associated with such tanks, any
leakage or other Release has occurred at any Property in sufficient
quantity to create a material risk of liability to any Governmental
Authority or Person for Remediation, costs, civil or criminal penalties,
injunctions for violation of any Environmental Laws, damage to persons or
property (including natural resources), or for any other Liability. Seller
shall promptly advise Buyer in the event Seller learns that any such
leakage has occurred or may have occurred.
15.2.6. COMPLIANCE. Seller shall use reasonable efforts to
timely and substantially comply with the material provisions of all of its
Contracts and commitments; will obtain, maintain in full force and effect,
and comply with all material provisions of all Permits and Licenses; and
will substantially comply with all material provisions of all Laws
applicable to the Businesses or the Assets.
15.2.7. TRANSFER OF CONTRACTS, PERMITS AND LICENSES. Seller
shall use its Best Efforts to have all transferable Permits and Licenses,
other than Liquor Licenses, transferred to Buyer. Seller shall assist
Buyer, as reasonably requested, in Buyer s efforts (i) to have Liquor
Licenses transferred to Buyer, and (ii) to obtain replacement or substitute
Permits and Licenses for the nontransferable Permits and Licenses. Seller
shall use its Best Efforts to have the Contracts transferred to Buyer prior
to the Possession Date; and shall assist Buyer, as reasonably required, to
obtain replacement or substitute contracts and agreements for those
contracts and agreements which would be Contracts except that such
contracts and agreements are not transferable.
15.2.8. LIST OF CONTRACTS. Within ten (10) days of the
execution of this Definitive Agreement, Seller shall provide Buyer with a
list of all material Contracts, all Contracts with Affiliates, and any
Contracts that do not expire within 180 days of the date hereof or cannot
be terminated or canceled on 180 days or less notice.
15.2.9. LIST OF PERMITS, LICENSES AND INTANGIBLE PROPERTY.
Within ten (10) days of the execution of this Definitive Agreement, Seller
shall provide Buyer with a list of all material Permits and Licenses and
other Intangible Property.
15.2.10. LIST OF IMPROVEMENTS. Within ten (10) days of the
date of execution of this Definitive Agreement, Seller shall provide Buyer
with, to the best of Seller s knowledge, information and belief, a list of
all Improvements, assembled by Station location and Asset type.
15.2.11. INFORMATION FOR SEC FILINGS. Seller shall assist
Buyer and shall provide to Buyer all information in its possession or
control reasonably required for Buyer to make any securities filings in
connection with the transaction provided for in this Definitive Agreement,
including but not limited to audited financial statements and unaudited
summarized data as may be required by the rules and regulations of the
Securities and Exchange Commission. All reasonable costs and expenses
incurred by Seller in connection therewith shall be borne by it.
Notwithstanding the foregoing, Seller shall not be required to provide any
such information if in doing so it would require Seller to incur
unreasonable costs and expenses unless Buyer agrees to reimburse Seller for
such added costs and expenses.
15.2.12. FRANCHISES. Within ten (10) days of the execution
of this Definitive Agreement, Seller will provide Buyer with a list, to the
best of Seller s knowledge, information and belief, of all Franchises
associated with, related to or used in connection with the Stations, except
for such Franchises that are affected by or covered under the Petroleum
Marketing Practices Act of 1978, as amended (the "PMPA").
15.2.12.1. The Franchise list will be accompanied
by a list of all Contracts affecting the applicable Franchise.
15.2.12.2. Prior to the Possession Date, Seller
will obtain all necessary Consents required to assign the Franchises to
Buyer.
15.2.13. PMPA. To the extent that the PMPA applies to this
transaction, Seller shall satisfy all PMPA requirements prior to Closing.
15.2.14. NOTICES. Seller shall promptly notify Buyer in
writing of: (i) all events, circumstances, facts and occurrences known to
Seller which would result in a breach of a representation or warranty or
covenant of the Seller; (ii) all other material developments known to
Seller affecting the Assets and the Businesses which would have a Material
Adverse Effect; (iii) receipt of a notice from a third party that would
cause one of the conditions in Section 16 not to be met; and (iv) all other
material developments known to Seller which would adversely affect Seller s
ability to perform its obligations under this Definitive Agreement.
15.2.15. CORPORATE AND PARTNERSHIP EXISTENCE; GUARANTEES.
15.2.15.1. Seller covenants and agrees that it
shall retain all respective corporate and partnership existences and remain
solvent for a period of not less than four (4) years after the last closing
date to occur under this Definitive Agreement or any Associated Purchase
and Sale Agreement. Seller further covenants and agrees that it shall
guarantee all obligations of the various sellers under each of the
Associated Purchase and Sale Agreements.
15.2.15.2. Seller covenants and agrees that it
shall cause Jerry D. Clayton and Phyllis Jane Clayton to execute and
deliver the Clayton Agreement attached hereto as EXHIBIT K at the Closing.
15.2.16. SCHEDULES. Within ten (10) days following the
execution of this Definitive Agreement, Seller shall provide Buyer with all
remaining Schedules to this Agreement. The Schedules must be acceptable to
Buyer in its reasonable discretion and may be evaluated by Buyer during its
due diligence investigation under Section 6 of this Agreement. Seller
shall be permitted to update the Schedules during the due diligence period
through May 20, 1997.
15.3. COVENANTS OF BUYER. From the date hereof through the Closing,
except as specifically provided otherwise in Section 15.3.3, Buyer
covenants and agrees with Seller as follows:
15.3.1. BEST EFFORTS. Subject to Buyer s rights hereunder,
Buyer shall use its Best Efforts to take or cause to be taken all such
actions as may be necessary or advisable to consummate and make effective
the purchase of the Assets and the transactions provided for in this
Definitive Agreement and to assure that as of each Closing it will not be
under any material corporate, legal or contractual restriction that would
prohibit or delay the timely consummation of such transactions.
15.3.2. FINANCIAL COMMITMENTS. Subject to Buyer s rights
hereunder, Buyer shall obtain all necessary bonds, insurance, guarantees,
letters of credit and similar financial commitments in connection with the
purchase of the Assets and the transactions provided for in this Definitive
Agreement.
15.3.3. TRANSFER OF PERMITS AND LICENSES AND CONTRACTS. Buyer
shall use its Best Efforts to obtain replacement or substitute permits and
licenses for the nontransferable Permits and Licenses; and shall assist
Seller in transferring the transferable Permits and Licenses to Buyer by
the Possession Date. Buyer shall use its Best Efforts to obtain
replacement or substitute contracts and agreements for the nontransferable
contracts which would be Contracts except that such contracts and
agreements are not transferable; and shall assist Seller in transferring
the transferable Contracts to Buyer by the Possession Date.
15.3.4. NOTICES. Buyer shall promptly notify Seller in
writing of: (i) all events, circumstances, facts and occurrences known to
Buyer which would result in a breach of a representation or warranty or
covenant of the Buyer; (ii) all other material developments known to Buyer
which would adversely effect Buyer s ability to perform its obligations
under the terms of the Definitive Agreement; (iii) receipt of a notice from
a third party that would cause one of the conditions in Section 16 not to
be met; and (iv) all other material developments known to Buyer which would
adversely affect Buyer s ability to perform its obligations under this
Definitive Agreement.
16.
CONDITIONS PRECEDENT
In addition to the conditions specified elsewhere in this Definitive
Agreement, Seller s and Buyer's obligations to close the transactions
contemplated herein shall be subject to the following conditions:
16.1. CONDITIONS TO OBLIGATIONS OF SELLER AND BUYER. The
obligations of Seller and Buyer to consummate the transactions provided for
in this Definitive Agreement are subject, at the option of each party, to
the satisfaction or waiver by both parties of the following condition:
16.1.1. H-S-R ACT. The waiting period applicable under the
H-S-R Act shall have been terminated or shall have expired, no litigation
shall be pending or threatened with respect to any antitrust issue, and the
Closing shall then be permitted to occur without violation of the H-S-R
Act.
16.2. CONDITIONS TO OBLIGATIONS OF SELLER. Subject to Section 24.3
hereof, the obligations of Seller to consummate the transactions provided
for in this Definitive Agreement are subject, at the option of Seller, to
the satisfaction or waiver of the following conditions:
16.2.1. REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Buyer contained in this Definitive Agreement shall be
true and correct in all respects at and as of the Closing as if such
representations and warranties were made at and as of the Closing.
16.2.2. COVENANTS AND AGREEMENTS. Buyer shall have performed
and satisfied in all material respects all covenants and agreements
required by this Definitive Agreement to be performed and satisfied by
Buyer at or prior to the Closing.
16.2.3. SIMULTANEOUS CLOSINGS. The consummation of the
transactions under the Associated Purchase and Sale Agreements identified
on SCHEDULE 16.2.3 shall be prepared to occur simultaneously with the
Closing Date.
16.3. CONDITIONS TO OBLIGATIONS OF BUYER. Subject to Section 24.3
hereof, the obligations of Buyer to consummate the transactions provided
for in this Definitive Agreement are subject at the option of Buyer, to the
satisfaction or waiver of the following conditions:
16.3.1. REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Seller contained in this Definitive Agreement shall be
true and correct in all respects at and as of the Closing as if such
representations and warranties were made at and as of the Closing.
16.3.2. COVENANTS AND AGREEMENTS. Seller shall have
performed and satisfied in all material respects all covenants and
agreements required by this Definitive Agreement to be performed and
satisfied by Seller at or prior to the Closing.
16.3.3. NO ADVERSE CHANGE. As of the Possession Date, there
shall have been no material adverse change in the business, financial
condition, operating results, or earnings of the Assets or Businesses and
there shall have been no material casualty loss, destruction or damage to
the Assets, whether or not covered by insurance.
16.3.4. NO ACTION OR PROCEEDINGS. There shall not be pending
or instituted, threatened or proposed, any suit, action, investigation,
material dispute or other proceeding by or before any Governmental
Authority or any other Person affecting, relating to, challenging or
complaining of, or seeking to collect damages or other relief in connection
with, the transactions provided for in this Definitive Agreement.
16.3.5. NO STATUTE OR REGULATION. No Law shall have been
proposed or adopted that would have a Material Adverse Effect on the
Assets, the Businesses, the value of the Assets, or Buyer s ability to own
and operate the Assets in substantially the same way as they are now
operated and as they have been operated on a historical basis.
16.3.6. DUE DILIGENCE. Buyer shall have received results
satisfactory to Buyer of all of its due diligence investigations through
the later of May 22, 1997 or the date Buyer enters into the Management
Agreement contemplated by Section 3.3.3, but in no event later than May 31,
1997, including, but not limited to, its title, survey, physical,
financial, environmental and other investigations of the Assets and the
Schedules provided to Buyer pursuant to Section 15.2.16.
16.3.7. CONSENTS. Buyer shall have received all Governmental
and third party Consents, approvals and authorizations required for the
consummation of this Definitive Agreement and necessary for Buyer to own
and operate the Assets and the Businesses as they are now owned and
operated by Seller and as they have been owned and operated by Seller on a
historical basis, including, but not limited to, such Consents, approvals
and authorizations as may be required by the Navajo Nation or any other
Indian tribal government, or under any Contract, lease, sublease, judgment,
decree, order or other document by which Seller or Buyer may be bound or to
which Seller or Buyer may be subject.
16.3.8. LIQUOR LICENSES. Buyer shall have received final
approval from the Arizona Department of Liquor Licenses and Control, the
New Mexico Alcohol and Gaming Division, and the Southern Ute Tribe, and, if
applicable, the relevant local option districts, with respect to (i) the
transfer of ownership, or (ii) the lease of the various Liquor Licenses
described in SCHEDULE 2.1.3.
16.3.9. LEASES OF REAL PROPERTY. All leases of real
property, and any consents required from any Person in connection with the
assignment thereof, necessary for Buyer to occupy and operate the Assets
and the Businesses as they are now occupied and operated by Seller and as
they have been occupied and operated on an historical basis, shall have
been transferred to Buyer.
16.3.10. PERMITS AND LICENSES. All material Permits and
Licenses held by Seller which are necessary for Buyer to own and operate
the Assets and the Businesses in accordance with Laws as they are now owned
and operated by Seller and as they have been owned and operated by Seller
on a historical basis, and which are capable of being transferred and
assigned to the Buyer shall have been transferred by Seller to Buyer
without material modifications, amendments or additional costs, financial
obligations or other requirements.
16.3.11. CONTRACTS. All material Contracts, agreements,
leases of personal property, and any consents required from any Persons in
connection with their assignment thereof, necessary for Buyer to own and
operate the Assets and the Businesses as they are now owned and operated by
Seller and as they have been owned and operated on a historical basis,
shall have been transferred to Buyer without material modifications,
amendments, or additional costs, financial obligations or other
requirements, or Buyer shall have received replacement or substitute
contracts, agreements, leases of personal property, for such material
Contracts, agreements, and leases of personal property, respectively, or
other arrangements have been made to give Buyer substantially the same
benefits, without material modifications, amendments or additional costs,
financial obligations or other requirements.
16.3.12. COVENANTS NOT TO COMPETE. Buyer shall have
received fully executed Covenants Not To Compete as provided in Section 3.5
and a fully executed Covenant Not To Compete with Red Mesa Trading Co.,
Inc. with respect to the four units located within the exterior boundaries
of the Navajo Indian Reservation.
16.3.13. SIMULTANEOUS CLOSINGS. The consummation of the
transactions under the Associated Purchase and Sale Agreements identified
on SCHEDULE 16.2.3 shall be prepared to occur simultaneously with the
Closing Date.
16.3.14. OPINION OF NAVAJO COUNSEL. Buyer shall have
received an opinion of its Navajo counsel that the Navajo Settlement
Agreement is valid, binding and enforceable in accordance with its terms;
provided that this condition shall apply only to Closings of the
Reservation Stations.
17.
NO SOLICITATION OR NEGOTIATION
Seller covenants and agrees that, between the date of this Definitive
Agreement and the earlier of the last Closing to occur or the termination
of this Definitive Agreement, neither the Seller nor any of its respective
Affiliates will (i) solicit, initiate, consider, encourage or accept any
other proposals or offers from any Person relating to any acquisition or
purchase of all or any portion of the capital stock of Seller or the Assets
of Seller (other than Inventory to be sold in the ordinary course of the
Businesses consistent with past practice), (ii) enter into any business
combination, or (iii) enter into any other extraordinary business
transaction involving or otherwise relating to Seller, the Assets or the
Businesses. In addition, neither Seller nor any of its Affiliates will
participate in any discussions, conversations, negotiations or other
communications regarding, or furnish to any other Person any information
with respect to or otherwise cooperate in any way, assist or participate
in, facilitate or encourage any effort or attempt by any other Person to
seek to do any of the foregoing. Seller immediately shall cease and cause
to be terminated all existing discussions, conversations, negotiations or
other communications with any Person conducted heretofore with respect to
any of the foregoing. Seller shall notify Buyer promptly if any such
proposal or offer, or any inquiry or other contact with any Person with
respect thereto, is made and shall, in any such notice to Buyer, indicate
in reasonable detail the identity of the Person making such proposal,
offer, inquiry or contact and the terms and conditions of such proposal,
offer, inquiry or other contact.
18.
TAXES
18.1 TAX LIABILITIES. As of the Closing, except as provided in the
Master Lease and Option Agreement and the Management Agreement, Seller and
Buyer mutually agree and covenant that Seller shall be liable for and shall
make payment for any and all Tax liabilities of the Properties, Assets and
Businesses incurred prior to the Closing including, but not limited to, all
Taxes related to (i) the Stations, (ii) Seller s obligation as employer for
employee related taxes, or (iii) any of the Assets to be transferred
hereunder. Seller agrees to indemnify, defend and hold harmless Buyer
against any loss by reason of any Claim made against Buyer for Seller s
nonpayment of any Taxes accruing prior to the Closing, except as provided
in the Master Lease and Option Agreement and the Management Agreement,
including, but not limited to, all Taxes relating to (i) the Stations, (ii)
Seller s obligation as employer for employee related taxes, or (iii) any of
the Assets transferred hereunder. Buyer shall be liable for and shall make
payment for any and all Tax liabilities of the Properties, Assets and
Businesses incurred on or after the Closing including, but not limited to,
all Taxes related to (i) the Stations, (ii) Buyer s obligation as employer
for employee related taxes, or (iii) any of the Assets to be transferred
hereunder.
18.2 FIRPTA AFFIDAVIT. Seller shall have prepared an affidavit to be
delivered to Buyer at Closing representing and warranting that Seller is
not a "foreign person", as defined in the Foreign Investment in Real
Property Tax Act and applicable regulations ("FIRPTA"), and that Buyer is
not required to withhold any portion of the consideration payable under
this Definitive Agreement under the provisions of FIRPTA.
19.
EMPLOYEES
19.1 OFFERS OF EMPLOYMENT. Except for those employees of Seller
listed on SCHEDULE 19.1, Buyer may, at its discretion, offer employment to
any of Seller s employees, hourly or salaried, employed in connection with
the Businesses. The employees who accept offers of employment by Buyer
shall be referred to as "Buyer s Employees." Within ten (10) days of the
execution of this Definitive Agreement, Seller shall provide Buyer with
information as to the titles and current salaries of all employees not
listed on SCHEDULE 19.1, and Buyer and Seller shall cooperate in all
aspects in effecting their change of employment as of the Closing in an
orderly fashion.
19.2. BENEFITS.
19.2.1. SELLER S BENEFIT AND RETIREMENT PLANS. Buyer shall
have no liability whatsoever to the Buyer s Employees or to Seller with
respect to any benefits payable to Buyer s Employees under Seller s Benefit
or Retirement Plans.
19.2.2. UNUSED VACATION. Seller will pay out directly to each
Buyer s Employee any accrued unused vacation time within thirty (30) days
of the Closing.
19.2.3. ONGOING BENEFITS. Buyer shall have no obligation to
provide any employee benefits to Buyer s Employees.
19.2.4. SELLER S RESPONSIBILITY FOR EXISTING BENEFITS. Buyer
shall not be liable for any salaries, wages, commissions, vacation and/or
sick leave pay or other compensation or benefits due Seller s employees to
the date of Closing, including, but not limited to, any withdrawal
liability imposed under ERISA as the result of the cessation of any of
Seller s obligations to contribute to any employee benefit plan subject to
ERISA. Seller shall remain liable for and pay all amounts due its
employees to the date of Closing under any pension, vacation, 401(k)
savings, profit sharing, retirement, severance, bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, medical,
dental, life insurance, supplemental retirement or other benefit plans,
programs, or arrangements (including any such plans, programs or
arrangements contained in any employment or collective bargaining contract
or agreement). Seller agrees to remain solely responsible and liable for
any claims or demands made by its employees arising or resulting from facts
or circumstances occurring during their employment by Seller or arising as
the result of this Definitive Agreement. Seller hereby agrees to
indemnify, defend and hold harmless Buyer for, from and against any and all
Loss associated in any way with the matters set forth in this Section
19.2.4.
19.3. EMPLOYEE RIGHTS. Nothing herein expressed or implied shall
confer upon any employee of Seller, any Buyer s Employee or any other
employee or legal representatives thereof any rights or remedies, including
any right to employment, or continued employment for any specified period,
of any nature or kind whatsoever under or by reason of this Definitive
Agreement.
19.4. COBRA AND HEALTH CLAIM DATA. Seller shall provide all notices
and fulfill all of its obligations, if any, under Section 4980B(f)(6) of
the Code with respect to the Buyer s Employees. Prior to Closing, Seller
shall provide Buyer information with respect to all accident, workers
compensation and disability claims filed by each of Seller s employees
(including information respecting the total number of claims filed, the
total amount of benefits claimed and the total amount of benefits paid)
during the twenty-four (24) month period immediately preceding the delivery
of such information to Buyer. Buyer represents and warrants to Seller that
such health claim data will be used by Buyer only for the purposes of
analyzing, obtaining and/or maintaining appropriate and proper insurance
coverage for the operation of the Businesses conveyed hereunder. Buyer
agrees to indemnify, defend and hold harmless Seller and its agents from
and against all damages, losses, costs, expenses, and liabilities
(including reasonable attorneys fees and court costs incurred by Seller)
arising out of any action which may be brought as a result of Seller s
disclosure to Buyer of such health claim data.
19.5. WAGE REPORTING. Seller shall pay and/or withhold any wages for
any of Buyer s Employees up to the Closing and shall file all W-2 s and
other filings in relation thereto.
19.6. UNEMPLOYMENT COMPENSATION. Prior to the Closing, if requested
by Buyer, Buyer and Seller shall jointly make application to the Arizona,
Colorado, New Mexico and Utah Departments of Labor to partially transfer
Seller s unemployment compensation experience ratings as of the Closing,
provided Seller retains the right to utilize its existing unemployment
compensation experience ratings in the operation of Seller s businesses on
the Excluded Assets and on those Assets managed by Seller pursuant to
Section 3.3.4.
20.
TERMINATION; DEFAULT; REMEDIES
20.1. TERMINATION. This Definitive Agreement and the transactions
provided for herein may be terminated, subject to Section 24.3 hereof, in
the following instances:
20.1.1. By either Buyer or Seller if any condition set forth
in Section 16.1.1 above shall not be satisfied at the Closing of the Assets
described in Section 3.1 (or any portion thereof).
20.1.2. By either Buyer or Seller if, in response to such
party s filing under the H-S-R Act, the Federal Trade Commission or the
Department of Justice makes a written request of such party for additional
information and the compliance with such request would in such party s
reasonable judgment cause an out-of-pocket expenditure to such party in
excess of $200,000 or would, in the reasonable judgment of a comparable
industry third party selling or purchasing assets and businesses comparable
to the Assets and Businesses be otherwise unduly burdensome.
20.1.3. By either Buyer or Seller if, as of ninety (90) days
following the date of filing under the H-S-R Act, all federal and state
regulatory clearances or approvals in connection with the H-S-R Act which
are required to be granted prior to the Closing Date of the Assets
described in Section 3.1 (or any portion thereof) have not been received.
20.1.4. By Buyer, if any federal or state regulatory clearance
or approval in connection with the H-S-R Act is conditional upon Buyer s
divestiture of one or more Assets or any other event which Buyer reasonably
believes would have a Material Adverse Effect.
20.1.5. By the mutual written agreement of Buyer and Seller.
20.1.6. By Buyer, at any time thereafter if the Closing Date
has not occurred by May 31, 1997.
20.2. EFFECT OF TERMINATION. The following provisions shall apply in
the event of a termination of this Definitive Agreement:
20.2.1. NON-WILLFUL FAILURE. If this Definitive Agreement is
terminated by Buyer or Seller as permitted herein and not as a result of
the failure of any party to perform any of its obligations hereunder, such
termination shall be without liability to any party to this Definitive
Agreement or on the part of any shareholder, director, officer, employee,
agent or representative of such party.
20.2.2. WILLFUL FAILURE. If this Definitive Agreement is
terminated as a result of the failure of a party to perform any of its
obligations hereunder, such non-performing party shall be fully liable for
any and all damages, costs and expenses (including, without limitation,
reasonable attorney s fees) sustained or incurred by the other party.
20.3. REMEDIES. Nothing in this Definitive Agreement shall be
construed to limit a nondefaulting party's legal or equitable remedies,
including but not limited to specific performance, for breach or default by
the other party of such breaching party's obligations hereunder. In
addition, the nondefaulting party shall be entitled to its reasonable
attorney's fees and costs incurred in seeking to enforce its rights under
this Definitive Agreement.
21.
PASSAGE OF TITLE AND RISK OF LOSS
Legal title, equitable title and risk of loss with respect to the
Assets, Associated Assets and any other property being transferred pursuant
to this Definitive Agreement shall not pass to Buyer until Closing or
Closing for that particular Asset as provided in Section 24.3.
22.
BUYER'S SET-OFF
Buyer shall have the right to set off against any amount owed to
Seller hereunder, including, without limitation, against rental payments
under the Master Lease and Option Agreement and Owner s Commissions under
the various Management Agreements, any amount owed by Seller to Buyer
hereunder or any amount owed by any other seller to Buyer under any
Associated Purchase and Sale Agreement, including, without limitation,
amounts owed on account of the various indemnification obligations and all
liabilities not assumed by Buyer, on the following terms and conditions:
22.1 Buyer shall deliver written notice to Seller, in accordance with
Section 27 of this Definitive Agreement, of Buyer s intention to set-off
against amounts owed by Buyer to Seller, specifically describing the nature
and the amount of the set-off proposed by Buyer.
22.2. If the reason for the set-off is capable of being cured and if
Seller or such other seller elects to cure, Seller or such other seller
shall so notify Buyer and shall complete the cure within fifteen (15) days
of receiving Buyer s notice.
22.3. If the reason for the set-off is not capable of being cured, or
if it cannot reasonably be cured within the fifteen (15)-day period and
Seller or such other seller fails to immediately commence the cure and
thereafter complete the cure within thirty (30) days of receiving Buyer s
notice, Buyer may proceed with its set-off.
22.4. If Seller or such other seller and Buyer are unable to resolve
in good faith any disputes regarding proposed set-offs, Buyer may set-off
the amount in dispute and Seller or any other seller may initiate
arbitration in accordance with Section 25.2 of this Definitive Agreement or
the comparable provisions of the Associated Purchase and Sale Agreements.
23.
COSTS
Except as otherwise provided herein, each party shall bear its own
costs of the transaction. Seller shall pay all costs and expenses
associated with the procurement of surveys and the issuance of title
policies. Buyer shall pay all costs and expenses associated with the
recordation of conveyance documents or instruments. All other ordinary and
necessary expenses of the Assets to be transferred, such as property Taxes,
utilities and the like shall be prorated between the parties as of the
Closing.
24.
CLOSING
24.1 TIME AND PLACE OF CLOSING. Subject to Section 24.3 hereof, the
Closing of the contemplated transactions will occur on the fifth Business
Date after the conditions to Closing set forth in this Definitive Agreement
have been met or on such other date as the parties may hereafter mutually
agree.
24.2. DELIVERIES AND PROCEEDINGS OF CLOSING.
24.2.1. At Closing, Seller will deliver or cause to be
delivered to Buyer the Assets and such general warranty deeds, leases,
assignments of Contracts, Licenses and Permits, consents, bills of sale,
the Liquor Licenses and other instruments of conveyance which are necessary
or desirable to effect transfer of the Assets or which Buyer may reasonably
request in order to transfer title to the Assets to Buyer, and to place
Buyer in full possession, custody and control of the Assets. All such
instruments of transfer will be in form and substance reasonably
satisfactory to Buyer and Buyer's counsel.
24.2.2. Buyer will be liable and will pay for all costs and
expenses incurred by it in order to obtain approvals of or consents to the
transfer of all Liquor Licenses.
24.2.3. At Closing, Buyer will deliver to Seller the purchase
price for Assets being acquired, subject to the adjustments provided
herein.
24.2.4. At Closing, any and all affidavits, closing
certificates, closing statements, opinions of counsel and other documents
required to be delivered pursuant to this Definitive Agreement will be
exchanged.
24.2.5. As of Closing, Seller and Buyer shall each provide the
other a certificate which reaffirms and confirms as true and correct all of
the agreements, representations, warranties and covenants made by such
party to the other in this Definitive Agreement.
24.3. OPTIONS OF BUYER TO CLOSE IN MULTIPLE TRANSACTIONS. The
parties acknowledge that the transactions evidenced by this Definitive
Agreement constitute certain of a group of related transactions evidenced
hereby and by the Associated Purchase and Sale Agreements, involving
multiple assets owned by several different sellers. If, in Buyer s
judgment, it becomes difficult or impossible to simultaneously close all of
the related transactions as contemplated in Sections 16.2.3 and 16.3.13
hereof, or if, in Buyer s judgment it becomes difficult or impossible to
close simultaneously on all of the Assets described in this Definitive
Agreement or the assets described in any Associated Purchase and Sale
Agreement, then Buyer may, upon written notice to Seller, elect any one or
more of the following options:
24.3.1. Buyer may elect to Close on those of the Assets
specified in Section 3.1 for which the conditions precedent have been
satisfied on the Closing Date, and adjust the purchase price to be paid
under Section 4.1 downward accordingly, and defer Closing on any other
Assets until all of the conditions have been satisfied for such Assets
specified in Section 3.1, with Seller continuing to operate the Reservation
Stations as provided in Section 3.3.4, and Buyer and Seller entering into a
Management Agreement for Buyer to manage all or a part of the other Assets
hereunder, and under the Associated Purchase and Sale Agreements through
Closing for such Assets as provided in Section 3.3.3; or
24.3.2. At any time after Buyer has closed on any of the
Assets specified in Section 3.1, Buyer may elect to close on other selected
Assets identified by it under this Definitive Agreement and the Associated
Purchase and Sale Agreements and adjust the balance of the purchase price
accordingly pursuant to SCHEDULE 4.1, with the remaining Assets under this
Definitive Agreement and the Associated Purchase and Sale Agreements being
operated as provided in Section 24.3.1 until Buyer elects to close on the
same; and
24.3.3. In any event, if Seller cannot transfer any Asset
under this Definitive Agreement or any Associated Purchase and Sale
Agreement in compliance with the conditions precedent for such transfer not
waived by Buyer, then such Asset at Buyer s election and upon notice to
Seller shall be removed from this transaction, the Purchase Price shall be
adjusted accordingly pursuant to SCHEDULE 4.1, and the arrangements under
Section 24.3.1, as applicable, shall terminate on such date. In such
event, at Buyer s election, Seller and Buyer shall enter into a consignment
agreement or if Buyer prefers a Supply Agreement for the removed Assets,
provided that Seller may not use any name sold to Buyer hereunder. In the
event that Buyer selects a consignment agreement, the parties shall
negotiate in good faith a reasonable pumping fee payable to Seller that is
in an amount customary in the industry. Any disputes between the parties
as to the amount of the pumping fee shall be settled by arbitration in
accordance with Section 25.2
25.
DISPUTE RESOLUTION
25.1. ALTERNATIVE DISPUTE RESOLUTION. The parties shall attempt to
promptly resolve any controversy or claim between them arising out of or
relating to this Definitive Agreement or any related agreements,
transactions, or instruments (the "Disputes"). In the event that a party
asserts that there exists a Dispute, such party shall deliver written
notice to the other party specifying the nature of the asserted Dispute and
request a meeting to attempt to resolve the same by negotiation. Such
negotiation shall be held between officers of both parties, each having the
authority to settle the Dispute. If the Dispute is not resolved within ten
(10) Business Days following such meeting, the parties will attempt, for a
period not to exceed 45 Business Days after delivery of the written notice,
to negotiate an agreement for alternate method resolution (such as
mediation) before initiating an arbitration proceeding.
25.2. ARBITRATION. Seller and Buyer agree that the arbitration
procedure set forth below shall be the sole and exclusive method for
remedying unresolved Disputes.
25.2.1. If no resolution is reached within 45 Business Days
after delivery of the notice referenced in Section 25.1, the party
delivering such notice of Dispute (the "Disputing Person") may commence
arbitration hereunder by delivering to the other party involved therein a
notice of arbitration (a "Notice of Arbitration"). Such Notice of
Arbitration shall specify the matters as to which arbitration is sought,
the nature of any Dispute, the claims of each party to the arbitration and
shall specify the amount and nature of any damages, if any, sought to be
recovered as a result of any alleged claim, and any other matters required
by the Uniform Arbitration Act as in effect in the State of New Mexico, if
any.
25.2.2. Arbitration hearings under this Definitive Agreement
shall be held at a place in Albuquerque, New Mexico acceptable to the
applicable arbitrator. The decision of the arbitrator shall be reduced to
writing and binding on the parties. Judgment upon the award(s) rendered by
the applicable arbitrator may be entered and execution had in any court of
competent jurisdiction or application may be made to such court for a
judicial acceptance of the award and an order of enforcement. Each party
shall bear its own legal fees and other costs incurred in presenting its
respective case. The charges and expenses of any arbitrator hereunder
shall be borne one-half by Buyer and one-half by Seller.
25.2.3. The arbitration shall be conducted consistent with the
Uniform Arbitration Act as in effect in the State of New Mexico, except as
modified by the agreement of the parties to this Definitive Agreement.
26.
SURVIVAL
The representations, warranties, covenants and agreements of Buyer and
Seller contained in this Definitive Agreement, and all statements contained
in this Definitive Agreement or any Exhibit or Schedule hereto or any
affidavit or certificate or report or other document delivered pursuant to
this Definitive Agreement or in connection with the transactions
contemplated hereby, shall be deemed to constitute representations,
warranties, covenants and agreements of the respective party making or
delivering the same. All such representations, warranties, covenants and
agreements shall be deemed to be made again at the Closing and shall
survive the Closing.
27.
NOTICES
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) when
personally delivered, or (ii) when telephonically transmitted in facsimile
copy during normal business hours to the addressee at the telephone number
shown below, or (iii) three days after having been mailed by United States
first-class, certified or registered mail, postage prepaid, to the other
party at the following addresses (or at such other address as shall be
designated by written notice from the appropriate party to the other):
If to Buyer, to: Giant Four Corners, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Attention: Division Manager Retail Operations
Telephone No.: (602) 585-8888
Facsimile Telephone No.: (602) 585-8881
If to Seller, to: Thriftway Marketing Corp.
710 East 20th Street
Farmington, New Mexico 87401
Attention: Mr. David Potter, C.P.A.
Telephone No.: (505) 326-5571
Facsimile Telephone No.: (505) 327-3813
28.
MISCELLANEOUS
28.1. TIME OF THE ESSENCE; GOOD FAITH. Time is of the essence of
this Definitive Agreement. Whenever exercising discretion under this
Definitive Agreement each party shall act in good faith.
28.2. FURTHER ASSURANCES; COOPERATION. At and after Closing, Seller
and Buyer shall each execute and deliver such further instruments of
conveyance and transfer as either may reasonably request to convey and
transfer effectively to Buyer all of the Assets subject to this Definitive
Agreement and relating to the Stations or to put Buyer in actual possession
and control of such Assets or to otherwise fully perform the obligations of
either to the other.
28.3. TRANSITION ASSISTANCE. Seller will not in any manner take any
action which is designed, intended, or might be reasonably anticipated to
have the effect of discouraging employees and customers from maintaining
the same or better business relationships with Buyer after Closing as were
maintained with Seller prior to Closing.
28.4. NO THIRD-PARTY BENEFICIARIES. Nothing in this Definitive
Agreement shall entitle any party other than Seller or Buyer to any Claim,
remedy or right of any kind.
28.5. SUCCESSORS AND ASSIGNS. Except as provided otherwise herein,
this Definitive Agreement shall not be assigned by either party without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. This Definitive Agreement, and all rights and
powers granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding the
foregoing, Buyer may nominate an Affiliate of Buyer or an Affiliate of
Buyer s lender (a "Nominee") to be the "Buyer" under this Definitive
Agreement, in which case all references herein to "Buyer" shall mean and
refer to such Nominee. Buyer shall cause its parent, Giant Industries
Arizona, Inc., to guarantee all obligations of Buyer and any permitted
Nominee of Buyer hereunder.
28.6. HEADINGS. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference, and
shall not constitute a part of this Definitive Agreement, nor shall they
affect its meaning, construction or effect.
28.7. REFERENCES. References made in this Definitive Agreement,
including the use of a pronoun, shall be deemed to include, where
applicable, masculine, feminine, neuter, singular and plural.
28.8. SEVERABILITY. If any provision of this Definitive Agreement is
invalid, illegal or incapable of being enforced under any Law, all other
terms and conditions of this Definitive Agreement shall nevertheless remain
in full force and effect as long as the economic or legal substance of the
transactions is not affected in a manner that is materially adverse to
either party.
28.9. PRESS RELEASES. Except by mutual agreement, neither Buyer nor
Seller shall distribute any press release or make any other public
announcement with respect to this Definitive Agreement and the transactions
contemplated hereby, provided that Buyer shall be permitted to disclose
this Definitive Agreement and the transactions contemplated hereby as
required under applicable securities laws and the rules and regulations of
the New York Stock Exchange.
28.10. AMENDMENT AND WAIVER. The parties may by mutual agreement
amend this Definitive Agreement in any respect, and either party may (i)
extend the time for the performance of any of the obligations of the other
party, (ii) waive any inaccuracies in representations by the other party,
(iii) waive compliance by the other party with any of the agreements
contained herein and performance of any obligations by such other party,
and/or (iv) waive the fulfillment of any condition that is precedent to the
performance by such party of any of its obligations under this Definitive
Agreement. To be effective, any such amendment or waiver must be in
writing and be signed by the party against whom enforcement of the waiver
is sought.
28.11. ACCORD. Each party to this Definitive Agreement has discussed
its provisions and their implications with their respective Authorized
Representatives and has entered into this Definitive Agreement based on the
advice of such Authorized Representatives.
28.12. COUNTERPARTS. This Definitive Agreement may be executed by
Buyer and Seller in any number of counterparts, each of which shall be
deemed an original instrument, but all of which together shall constitute
but one and the same instrument. This Definitive Agreement shall become
operative when each party has executed at least one counterpart of this
Definitive Agreement. This Definitive Agreement may be delivered by
facsimile or similar transmission evidencing execution, and this Definitive
Agreement so delivered shall be effective as a valid and binding agreement
between the parties for all purposes.
28.13. GOVERNING LAW. This Definitive Agreement is to be governed by
and construed in accordance with the laws of the State of New Mexico
without regard to its conflict of laws provisions.
28.14. ENTIRE AGREEMENT. This Definitive Agreement, the Exhibits and
Schedules hereto, the Ancillary Agreements referenced herein, and the
Associated Purchase and Sale Agreements, set forth all of the promises,
covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersede all prior
and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written.
IN WITNESS WHEREOF, the parties hereto have executed this Definitive
Agreement effective the 19 day of April, 1997.
GIANT FOUR CORNERS, INC.
By: /s/ A. Wayne Davenport
---------------------------------------
Its: Vice President & CFO
-----------------------------------
THRIFTWAY MARKETING CORP.
By: /s/ J. D. Clayton
---------------------------------------
Its: President
-----------------------------------
CLAYTON INVESTMENT COMPANY
By: CLAYTON HOLDING COMPANY,
General Partner
By: /s/ J. D. Clayton
---------------------------------------
Its: President
-----------------------------------
<PAGE>
<PAGE>
GUARANTY
Giant Industries Arizona, Inc., an Arizona corporation ("Giant"),
owns, directly or indirectly, all of the issued and outstanding shares of
the capital stock of Buyer. Giant desires that Buyer acquire the Assets
and Businesses as provided in the Definitive Agreement dated _____________,
1997, between Thriftway Marketing Corp., Clayton Investment Company and
Giant Four Corners, Inc. (the "Definitive Agreement"), and the parties
acknowledge that Seller is unwilling to enter into the Definitive Agreement
without the covenants and promises of Giant set forth herein. Accordingly,
Giant agrees to guarantee the performance by Buyer of its obligations under
the Definitive Agreement, including the payment of the purchase price under
Section 4 thereof and the various representations, warranties, covenants
and indemnification obligations of Buyer set forth throughout the
Definitive Agreement and the Ancillary Agreements.
For good and valuable consideration, the sufficiency of which is
acknowledged, the undersigned guarantor (i) stipulates that it has
financial or other interests in the Buyer, and (ii) agrees to guarantee the
performance by Buyer of its obligations under the Definitive Agreement and
the Ancillary Agreements, as more specifically set forth therein.
The undersigned Guarantor has read the Definitive Agreement and the
Ancillary Agreements and has duly executed this Guaranty effective the Date
of Closing of the Definitive Agreement. Capitalized terms used but not
defined herein have the meanings assigned to them in the Definitive
Agreement.
Giant Industries Arizona, Inc.
By:
-----------------------------------
Its:
-------------------------------
<PAGE>
<PAGE>
EXHIBIT A
DEFINITIONS
"ADLLC" shall mean the Arizona Department of Liquor Licenses and
Control.
"AFFILIATES" shall mean with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. The term "control" as used in the preceding sentence
means, with respect to any specified Person, the power to direct the
management and policies of such Person directly or indirectly, whether
through the ownership of voting stock or interests, by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"AGD" shall mean the New Mexico Alcohol and Gaming Division of the
Department of Regulation and Licensing.
"ANCILLARY AGREEMENTS" has the meaning specified in Section 1.3.
"ASSET INFORMATION" has the meaning specified in Section 6.6.
"ASSETS" has the meaning specified in Section 2.
"ASSOCIATED ASSETS" shall mean all Contracts, Permits, Licenses,
Records, Liquor Licenses, Water Rights, Improvements, Easements and Rights-
of-Way for ingress, egress and utilities, and any appurtenances and all
other assets which are associated with, related to or used in connection
with a Station or the Businesses, as the case may be.
"ASSOCIATED PURCHASE AND SALE AGREEMENTS" shall mean the Purchase and
Sale Agreements of even date herewith by and between Buyer, as "Buyer", and
certain related sellers, each as a "Seller", pursuant to which Buyer is
acquiring all of such sellers service station and convenience store assets
and businesses, refinery assets and businesses, transportation assets and
businesses, any assets and businesses involved in the purchase or sale of
petroleum products and related Businesses in the States of Arizona,
Colorado, New Mexico and Utah. The Associated Purchase and Sale Agreements
are listed in SCHEDULE 16.2.3.
"AUTHORIZED REPRESENTATIVES" has the meaning specified in Section 6.1.
"BEST EFFORTS" shall mean the taking by a party of such action as
would be in accordance with reasonable commercial practices as applied to
the particular matter in question; provided, however, that such action
shall not include the incurrence of unreasonable expenses.
"BIA" shall mean the Bureau of Indian Affairs.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
United States federal or New Mexico state banking holiday.
"BUSINESSES" shall mean Seller s service station/convenience store
business, liquor license business, refined products transportation
business, and any other businesses associated with, related to, or used in
connection with the foregoing.
"BUYER" means Giant Four Corners, Inc. or its Nominee pursuant to
Section 28.5.
"CLAIMS" means any and all causes of action, claims (including claims
for personal injury to or death of persons and damage to property, natural
resources, or the environment), costs (including environmental Remediation
costs), damages (including punitive damages), demands, diminution in value,
Encumbrances, expenses (including investigative expenses, expert witness
expenses, reasonable attorneys fees and court costs), fines, judgments,
judicial or administrative proceedings, lawsuits, Liabilities, liens,
losses, penalties, and any other obligations, of any kind or nature or
description, whether direct or indirect, absolute or contingent, arising
out of or in any manner relating to the Assets, the Businesses, or the
transactions contemplated by this Definitive Agreement.
"CLOSING DATE" means the date on which the first Closing occurs
pursuant to Section 24.3.
"CLOSING" or "CLOSE OF ESCROW" means the consummation of the
transactions contemplated hereby in one or more transactions, as
appropriate, including a Closing under Sections 3.1, 3.3 and 4.1, a Closing
pursuant to Section 24.3, and a Closing upon exercise of each Option as
provided herein.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSENTS" means those approvals, authorizations, consents, orders,
and waivers of Governmental Authorities and officials and other Persons
which are necessary for the assignment and transfer to the Buyer of the
Assets, Contracts, Licenses, Permits, and other documents or instruments or
other rights relating to the Businesses or the consummation of the
transactions contemplated by this Definitive Agreement.
"CONTAMINANT" or "CONTAMINATION" shall mean any hazardous substance,
extremely hazardous substance, imminently hazardous chemical substance,
hazardous material, hazardous waste, hazardous waste constituent, toxic
substance, radioactive material, petroleum (including without limitation
crude oil and any fraction thereof), pollutant (including, but not limited
to, air pollutant and hazardous air pollutant), or any other environmental
contaminant.
"CONTRACTS" shall mean all agreements, contracts, personal property
leases, subleases, franchises, warranties, noncompetition agreements,
options to purchase or rights of first refusal to acquire service station
sites, rights or obligations, and other legally binding contractual
commitments to which Seller is a party and which are associated with,
relate to, or are used in connection with the Assets or the Businesses.
"DEFINITIVE AGREEMENT" shall mean this Definitive Agreement and all
Schedules and Exhibits hereto.
"DISPUTES" has the meaning specified in Section 25.1.
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and Tax liens), charge,
judgment, encumbrance, or adverse claim including, without limitation, any
restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership.
"ENVIRONMENTAL CLAIMS AND LIABILITIES" means any and all Claims
(including but not limited to notices of non-compliance or violation,
Remediation orders, consent orders, and settlement agreements),
Liabilities, and any other obligations, of any kind or nature or
description, whether direct or indirect, absolute or contingent, relating
in any way to any Environmental Law or any Environmental Permit, whether
asserted before or after the date hereof, including, but not limited to,
the presence of any Contaminant at, on, or under the Assets in quantities
or amounts that exceed any groundwater, surface water, soil, vadose zone or
other environmental standard established by a Governmental Authority having
jurisdiction over the Assets.
"ENVIRONMENTAL LAWS" shall mean all laws (whether statutory or
common), rules, regulations, ordinances, orders, judgments, Environmental
Permits, and all other requirements of any kind or nature that pertain to
the environment promulgated or adopted by any Governmental Authority having
jurisdiction over Seller, the Assets, or the Businesses. Environmental
Laws includes but are not limited to: (i) the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund
Amendment and Reauthorization Act and otherwise, the Resource Conservation
and Recovery Act, the Clean Air Act, the Toxic Substances Control Act, the
Safe Drinking Water Act, the Federal Water Pollution Control Act, the Oil
Pollution Act and other federal laws relating to the manufacture,
distribution, use, handling, generation, emission, treatment, storage,
recycling, transportation, disposal, Release, threatened Release, or
Remediation of any Contaminant; and (ii) similar state, local and tribal
Laws.
"ENVIRONMENTAL MATTERS" has the meaning specified in Section 11.6.
"ENVIRONMENTAL NOTICE" shall mean a written document identifying any
Environmental Claims and Liabilities discovered by Buyer.
"ENVIRONMENTAL NOTICE INFORMATION" has the meaning specified in
Section 10.1.1.2.
"ENVIRONMENTAL PERMITS" has the meaning specified in Section 11.5.
"ENVIRONMENTAL RECORDS" has the meaning specified in Section 10.7.
"EQUIPMENT" shall mean all equipment, furniture, instruments,
machines, meters, parts, vessels, process units, pumps, piping (including,
but not limited to, any above-ground and underground piping associated with
any equipment, instruments, machines, meters, and pumps), materials,
substances, supplies, tools, systems, rolling stock, communications systems
and licenses, vehicles, electronic systems and computers.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXCESS REAL PROPERTY" has the meaning specified in Section 2.2.3.
"EXCLUDED ASSETS" shall mean those assets of Seller as described in
Section 2.2.
"FACILITIES" shall mean all buildings, structures, trailers, mobile
homes, fixtures, pipelines, process units, tanks, terminals,
loading/unloading, storage and dispensing facilities, Improvements, and
similar personal property associated with, related to or used in connection
with the Assets or Businesses.
"FEE STATIONS" shall mean the stations identified in Section 2.1.1.1
of the Definitive Agreement and SCHEDULE 2.1.1.1 thereto.
"FINAL APPROVAL" has the meaning specified in Section 9.2.
"FIRPTA" shall mean the Foreign Investment in Real Property Tax Act
and applicable regulations thereunder.
"FRANCHISES" means any Contract under which the franchisee undertakes
to conduct a business or sell a product or service under a trademark,
servicemark or trade name of franchisor and in accordance with the methods
and procedures prescribed by the franchisor.
"FUND" has the meaning specified in Section 11.7.
"GOVERNMENTAL AUTHORITY" means any United States federal, tribal,
state or local governmental, regulatory or administrative body, authority,
agency, commission or political subdivisions thereof, or any court,
tribunal, or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any
Governmental Authority.
"H-S-R ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations of the Federal Trade
Commission thereunder.
"IMPROVEMENTS" means all Facilities, furniture, fixtures,
improvements, Equipment, truck transports and trailers, motor vehicles,
mobile homes, chattels, supplies, tools, Intangible or Tangible Assets,
Records, deposits and prepaid rent (including utility deposits and cash
bonds but excluding income tax deposits and promissory notes for prepaid
rent), Contracts, Licenses, Permits, automation equipment, computer
hardware and software, signs, facia, graphics and Intellectual Property
rights which are owned by Seller, or in which Seller has an interest, and
which are associated with, related to or used in connection with any of the
Assets or the Businesses.
"Intangible Assets" means any intangible asset accruing to the Assets
or the Businesses including goodwill, accounts, lists, Records, advertising
and promotional materials, Contract rights, leases/subleases, documents,
instruments, Intellectual Property Rights, chattel paper, certificates of
stock, bonds, promissory notes, franchises and the like.
"INTELLECTUAL PROPERTY RIGHTS" means all trademarks, trade names,
servicemarks, brands (including, without limitation, Seller s Plateau,
Gasman, Malco and Thriftway brands), copyrights, licenses, patents,
inventions, designs, trade secrets, royalties, secret processes, formulae,
and all applications, registrations, renewals and other rights relating to
the foregoing (whether or not any registration or filing has been made with
respect thereto).
"INVENTORIES" means all inventory, merchandise, work in process,
finished goods, consigned goods, raw materials, catalysts, chemicals, spare
parts, packaging, supplies and any other similar property related to the
Assets or the Businesses, maintained, held or stored by or for Seller on
the Closing Date and any prepaid deposits for any of the same.
"LAWS" shall mean all laws (whether statutory or common), rules,
regulations, ordinances, orders, judgments, Permits, Licenses, and all
other requirements of any kind or nature promulgated or adopted by any
Governmental Authorities having jurisdiction over the Assets or the
Businesses.
"LEASE STATIONS" shall mean the Stations identified in Section 2.1.1.2
of the Definitive Agreement and SCHEDULE 2.1.1.2 pursuant thereto.
"LENDERS" has the meaning specified in Section 13.10.
"LIABILITIES" means any and all debts, liabilities and obligations,
whether fixed, accrued or unaccrued, direct or indirect, absolute or
contingent, matured or unmatured, determined or determinable, including,
without limitation, those arising under any Law (including, without
limitation, any Environmental Law) or Governmental Order and those arising
under any Contract, arrangement, commitment or undertaking.
"LICENSES" shall mean all licenses and other rights to use proprietary
materials, technology, processes and rights.
"LIQUOR LICENSE LIENS" has the meaning specified in Section 3.6.3.
"LIQUOR LICENSES" shall mean the one (1) Arizona Liquor License and
the twenty-six (26) New Mexico Liquor Licenses described in SCHEDULE 2.1.3
and the one (1) Southern Ute Tribal Liquor License described in Section
3.7.
"LOSS" shall mean any loss, cost, claim, damage, deficiency and all
expenses, including reasonable attorneys and accountants fees and
disbursements.
"MATERIAL ADVERSE EFFECT" means any circumstance, change in, or effect
on, a Station, the Assets, the Businesses or the Seller that, individually
or in the aggregate with any other circumstances: (a) is or could
reasonably be expected to be materially adverse to the employee
relationships, customer or supplier relationships, results of operations,
value or the condition (financial or otherwise) of a Station or the Assets
or Businesses; or (b) could reasonably be expected to materially adversely
affect the ability of the Buyer to operate or conduct the Businesses
conducted with a Station or the Assets in the manner in which they are
currently operated or conducted by the Seller.
"NAVAJO STATIONS" has the meaning specified in Section 2.2.2.
"NOMINEE" has the meaning specified in Section 28.5.
"NONTRANSFERABLE CONTRACTS, PERMITS AND LICENSES" shall mean those
Contracts, Permits and Licenses which by their terms are not transferable,
or, if by their terms require consent or approval for transfer, and such
consents or approvals cannot be obtained by Seller using its Best Efforts
prior to Closing.
"NOTICE OF ARBITRATION" has the meaning specified in Section 25.2.1.
"OFF SITE" shall have the meaning given to such term in Section
10.1.1.3.
"OPENING DATE" has the meaning specified in Section 4.3.1.1.
"OPTION" has the meaning specified in Section 1.3.4.
"OPTION STATIONS" has the meaning specified in Section 3.8.2.
"OWNER S COMMISSION" has the meaning specified in Section 3.3.3.3.
"PERMITS" shall mean any and all permits, authorizations,
certificates, approvals, registrations, premanufacture notifications or
other approvals and licenses granted or required by any Governmental
Authority.
"PERMITTED EXCEPTIONS" shall mean: (i) liens for Taxes or assessments
not yet delinquent or, if delinquent, that are being contested in good
faith in the normal course of business; (ii) mechanic s, materialmen s,
repairmen s, employees, contractor s, operator s and similar liens or
charges arising in the ordinary course of business securing amounts not yet
due and payable; (iii) easements, rights-of-way, surface leases and other
rights with respect to surface operations; grazing, canals, ditches,
reservoirs or the like; conditions, restrictive and protective covenants,
common area maintenance assessments or other similar restrictions and
charges; mineral and royalty reservations and conveyances; and easements
for streets, alleys, highways, pipelines, telephone lines, power lines,
sewers, railways and other utility easements and rights-of-way, on, over or
in respect of any of the Assets; provided in each case that such matters do
not and will not interfere materially with the ownership, operation or use
of the Assets or the Businesses as they are now operated or used and as
they have been owned, operated or used on a historical basis, nor result in
a Material Adverse Effect; (iv) other minor defects and irregularities of
title affecting the Assets that do not and will not interfere materially
with the ownership, operation or use of the Assets or the Businesses as
they are now owned, operated or used or as they have been owned, operated
or used on an historical basis, nor result in a Material Adverse Effect;
and (v) ordinary and customary rights reserved to or vested in any
Governmental Authority to control or regulate the Assets or the Businesses.
"PERSON" means any individual, partnership, firm, corporation, limited
liability company, joint venture, association, trust, estate, business,
unincorporated organization or other legal entity, as well as any syndicate
or group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and any Governmental
Authority.
"PMPA" has the meaning specified in Section 15.2.12.
"POSSESSION DATE" has the meaning specified in Section 10.1.1.1.
"RECORDS" shall mean and include all originals and copies, in whatever
form or medium, of agreements, leases, documents, tapes, maps, manuals,
books, financial information, reports, engineering designs, surveys, plans
and specifications, title reports, test results, files and other records in
the possession or control of Seller and reasonably necessary or desirable
for analyzing, owning, operating and maintaining the Assets and the
Businesses, excluding records that are subject to an obligation of
confidentiality or are not transferable under applicable agreements with
third parties or applicable Laws.
"RELEASE" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, pumping, pouring,
placing and the like into or upon any land, water or air or otherwise
entering into the environment.
"REMEDIATION" and "REMEDY" shall mean actions taken to respond to,
investigate, remove, clean up, and otherwise remedy Contamination.
"RESERVATION STATIONS" shall mean the Stations identified in Section
2.1.1.3 of the Definitive Agreement and SCHEDULE 2.1.1.3 pursuant thereto.
"SELLER" means Thriftway Marketing Corp., and Clayton Investment
Company. Seller shall refer, as the context requires, to all Sellers
collectively, to any or all of them individually, or both.
"SETTLEMENT AGREEMENT" has the meaning specified in Section 8.2.2.
"SOUTHERN UTE LIQUOR LICENSE" has the meaning specified in Section
3.7.
"STATIONS" have the meanings specified in Section 2.1.
"TANGIBLE ASSETS" means all items of machinery, Equipment, tools,
supplies, furniture, fixtures, Improvements, personalty and other tangible
personal property owned or leased by Seller and associated with, related to
or used in the Assets or the Businesses.
"TAX" or "TAXES" has the meaning specified in Section 13.5.
"TITLE COMPANY" has the meaning specified in Section 8.1.
"TITLE DEFECT AMOUNT" has the meaning specified in Section 8.6.2.
"TRANSFERABLE CONTRACTS, PERMITS AND LICENSES" shall mean those
Contracts, Permits and Licenses which by their terms are transferable, or,
if by their terms require consent or approval for transfer, such consent or
approval is obtained prior to Closing.
"TRANSFERRED INVENTORY" has the meaning specified in Section 7.
"TRANSITION EVENT" has the meaning specified in Section 3.3.4.
"Transition Period" has the meaning specified in Section 3.3.4.
"Transportation Assets" shall mean those trucks and trailers listed in
SCHEDULE 3.1. including their respective Associated Assets.
"UCC SEARCHES" has the meaning specified in Section 8.5.
"UNITS" has the meaning specified in Section 5.2.
"WATER RIGHTS" has the meaning specified in Section 2.1.6.
"WYOMING UNITS" has the meaning specified in Section 5.2.2.
<PAGE>
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is effective as of May 15, 1996, among GIANT INDUSTRIES, INC.
(the "Company"), the undersigned corporations signing as
guarantors (the "Guarantors"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent (the "Agent"), BANK OF AMERICA
ILLINOIS, as issuing Bank and as a Bank, NBD BANK, as a Bank and
UNION BANK, as a Bank. Capitalized terms which are used herein
without definition and which are defined in the Credit Agreement
referred to below shall have the meanings ascribed to them in the
Credit Agreement.
WHEREAS, the Company, the Agent and the Banks are parties to
a certain Credit Agreement dated as of October 4, 1995 (as the
same may be further amended, modified or supplemented and in
effect from time to time, the "CREDIT AGREEMENT"); and
WHEREAS, the Company has requested that the Agent and the
Banks agree to amend the Credit Agreement as herein provided; and
subject to the terms hereof the Agent and the Banks are willing
to agree to the Company's requested modification;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agrees as follows:
SECTION 1. AMENDMENT TO THE CREDIT AGREEMENT. Subsection
8.09(c) of the Credit Agreement is hereby amended by deleting
"July 31, 1995" and inserting "May 15, 1996" in lieu thereof.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company and
each Guarantor represents and warrants to the Agent and to each
of the Banks that:
(a) The execution and delivery of this Amendment by
the Company and each Guarantor has been duly authorized by
all necessary corporate action.
(b) The representations and warranties set forth in
ARTICLE VI of the Credit Agreement are true and correct in
all material respects before and after giving effect to this
Amendment with the same effect as if made on the date
hereof, except to the extent such representations and
warranties expressly related to an earlier date, in which
case they were true and correct in all material respects on
and as of such earlier date.
(c) As of the date hereof, at the time of and
immediately after giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing.
SECTION 3. EFFECTIVE DATE. This Amendment shall be
effective on the date (the "Effective Date") of delivery to the
Agent of this Amendment, signed by the Company, the Guarantors
who are named as parties hereto, the Agent, and each of the
Banks.
SECTION 4. EFFECT OF AMENDMENT. This Amendment (i) except
as expressly provided herein, shall not be deemed to be a consent
to the modification or waiver of any other term or condition of
the Credit Agreement or of any of the instruments or agreements
referred to therein and (ii) shall not prejudice any right or
rights which the Agent or the Banks may now have under or in
connection with the Credit Agreement, as amended by this
Amendment. Except as otherwise expressly provided by this
Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is agreed by each of
the parties hereto that the Credit Agreement, as amended hereby,
shall continue in full force and effect.
SECTION 5. GUARANTIES. Each of the Guarantors hereby
consents to and accepts the terms and conditions of this
Amendment, agrees to be bound by the terms and conditions hereof,
and ratifies and confirms that the Guaranty Agreement executed
and delivered by it in connection with the Credit Agreement is
and remains in full force and effect.
SECTION 6. MISCELLANEOUS. This Amendment shall be
construed in accordance with and governed by the laws of the
State of Texas. The captions in this Amendment are for
convenience of reference only and shall not define or limit the
provisions hereof. This Amendment may be executed in separate
counterparts, each of which when so executed and delivered shall
be an original, but all of which together shall constitute one
instrument.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
<PAGE>
<PAGE>
NO ORAL AGREEMENTS. THE CREDIT AGREEMENT (AS AMENDED BY
THIS AMENDMENT) AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the date and year first above
written.
GIANT INDUSTRIES, INC.,
as Company
By: /s/ A. Wayne Davenport
____________________________________
Name: A. Wayne Davenport
Title: VP & CFO
GIANT INDUSTRIES ARIZONA, INC. GIANT
EXPLORATION & PRODUCTION COMPANY
GIANT FOUR CORNERS, INC.
SAN JUAN REFINING COMPANY
CINIZIA PRODUCTION COMPANY,
as Guarantors
By: /s/ A. Wayne Davenport
____________________________________
Name: A. Wayne Davenport
in each case, as Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, As Agent
By: /s/ J. Stephen Mernick
____________________________________
J. Stephen Mernick
Senior Vice President
BANK OF AMERICA ILLINOIS, as a Bank
and as Issuing Bank
By: /s/ J. Stephen Mernick
____________________________________
J. Stephen Mernick
Senior Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
NBD BANK, N.A.
By:____________________________________
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By:____________________________________
Name:
Title:
<PAGE>
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second
Amendment") is entered into as of May 23, 1997, among GIANT
INDUSTRIES, INC., a Delaware corporation (the "COMPANY"), GIANT
INDUSTRIES ARIZONA, INC., an Arizona corporation ("Arizona"),
GIANT EXPLORATION & PRODUCTION COMPANY, a Texas corporation
("Exploration"), SAN JUAN REFINING COMPANY, a New Mexico
corporation ("San Juan"), GIANT FOUR CORNERS, INC., an Arizona
corporation ("Corners") and CINIZA PRODUCTION COMPANY, a New
Mexico corporation ("Ciniza") (Arizona, Exploration, San Juan,
Corners and Ciniza are individually referred to herein as a
"Guarantor" and collectively as the "Guarantors"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the
"Agent"), BANK OF AMERICA ILLINOIS, as issuing Bank and as a
Bank, THE FIRST NATIONAL BANK OF CHICAGO (successor to NBD
Bank, by assignment), as a Bank and UNION BANK OF CALIFORNIA,
N.A. (formerly known as Union Bank), as a Bank. Capitalized
terms which are used herein without definition and which are
defined in the Credit Agreement referred to below shall have
the meanings ascribed to them in the Credit Agreement.
WHEREAS, the Company, the Agent and the Banks are parties
to a certain Credit Agreement dated as of October 4, 1995 (the
"INITIAL AGREEMENT"); and
WHEREAS, the Company, the Agent and the Banks are parties
to a certain First Amendment to Credit Agreement dated as of
May 15, 1996 (the "FIRST AMENDMENT");
WHEREAS, the Initial Agreement, as amended by the First
Amendment, and as may be further amended and restated from time
to time, is hereinafter called the "CREDIT AGREEMENT;" and
WHEREAS, the Company has requested that the Agent and the
Banks agree to increase the Facility A Commitments to the
aggregate amount of $70,000,000, to extend the Facility A
Termination Date and the Facility B Termination Date and to
further amend the Credit Agreement as herein provided; and
subject to the terms hereof the Agent and the Banks are willing
to agree to the Company s requested modifications;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agrees as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT.
(a) AMENDMENTS TO ARTICLE I. ARTICLE I of the Credit
Agreement is hereby amended in the following respects:
(i) The definition of "CONSOLIDATED FUNDED
INDEBTEDNESS" set forth in ARTICLE I of the Credit Agreement is
hereby amended to read as follows:
"CONSOLIDATED FUNDED INDEBTEDNESS" means, for
the Company and its Consolidated Subsidiaries, at any time,
without duplication, the sum of: (a) liability for borrowed
money or for the deferred purchase price of property or
services, (b) obligations under leases which in accordance
with GAAP should be recorded as Capital Leases, (c)
obligations to redeem or purchase any stock or other equity
security of the Company or a Subsidiary, and (d) any
guaranty obligations in respect of any of the foregoing.
(ii) The definition of "CONSOLIDATED INTEREST
EXPENSE" set forth in ARTICLE I of the Credit Agreement is
hereby amended to read as follows:
"CONSOLIDATED INTEREST EXPENSE" means for the
relevant period, for the Company and its Consolidated
Subsidiaries, without duplication, the sum of: (a) all
interest in respect of Indebtedness and all lease payments
with respect to Capital Leases accrued or capitalized
during such period (whether or not actually paid during
such period and including fees payable in respect of
letters of credit and bankers acceptances), (b) the net
amount payable (or minus the net amount receivable) under
all Swap Contracts during such period (whether or not
actually paid or received during such period), and (c) all
dividends paid, declared or otherwise accrued in respect of
preferred stock.
(iii) The definition of "ELIGIBLE REFINERY
HYDROCARBON INVENTORY" set forth in ARTICLE I of the Credit
Agreement is hereby amended to read as follows:
"ELIGIBLE REFINERY HYDROCARBON INVENTORY" means,
at any date, the aggregate value therefor on a FIFO basis
calculated in accordance with GAAP of all readily
marketable, saleable and useful Feedstocks, Intermediate
Products and Refined Products, owned by the Company and its
Subsidiaries in field production tanks, storage tanks and
lines (including line fills but excluding basic sediment
and water and slop oil) stored on or required for the
Bloomfield Refinery, the Ciniza Refinery, the Portales
Refinery, the Company s or its Subsidiaries service
stations and travel centers, cardlock fueling stations or
bulk plants, the Albuquerque Terminal and other Refined
Products terminals owned or leased by the Company or its
Subsidiaries."
(iv) The definitions of "FACILITY A TERMINATION DATE"
and "Facility B Termination Date" set forth in ARTICLE I of the
Credit Agreement are amended to read as follows:
"FACILITY A TERMINATION DATE" and "FACILITY B
TERMINATION DATE" means the earlier of (a) May 23, 2000, or
(b) the date on which such Facility s Commitment terminates
in accordance with the provisions of this Agreement.
(v) The definition of "INDEX DEBT RATING" set forth
in ARTICLE I of the Credit Agreement is hereby amended to read
as follows:
"INDEX DEBT RATING" means the rating applicable
to the Company s senior, unsecured, non-credit enhanced
public long term indebtedness for borrowed money, or if the
Company has no such rating, the "Index Debt Rating" shall
be developed by adding two debt rating levels to the rating
applicable to the Company s existing Senior Subordinated
Debt.
(vi) The following new definitions are hereby added
to ARTICLE I of the Credit Agreement:
"CAPITAL LEASE" means a capital lease as
determined in accordance with GAAP.
"PHOENIX ACQUISITION" means the acquisition of
stock of Phoenix Fuel Co., Inc. by the Company or by Giant
Industries Arizona, Inc. that complies with the following:
(i) such acquisition is pursuant to the terms of the Stock
Purchase Agreement dated as of April 30, 1997 by and among
Phoenix Fuel Co., Inc., J.W. Wilhoit, Trustee, the other
Trustees and Custodian therein named, and Giant Industries
Arizona, Inc., as may be amended (provided that any
material amendment shall require consent of the Majority
Banks), and (ii) the terms and conditions of such
acquisition shall comply with all material federal, state
and local laws and regulations, including, but not limited
to, compliance with the Hart Scott Rodino Act and all other
applicable laws and regulations.
"SECOND AMENDMENT CLOSING DATE" means May 23, 1997.
"THRIFTWAY ACQUISITION" means the acquisition of
assets by the Company or by Giant Four Corners, Inc. from
Thriftway Marketing Corp. and Clayton Investment Company
and their affiliates and related companies that complies
with the following: (i) such acquisition is pursuant to the
terms of the Definitive Agreement dated April 18, 1997 by
and between Giant Four Corners, Inc., Thriftway Marketing
Corp. and Clayton Investment Company, and the associated
purchase and sale agreements as provided therein, as may be
amended (provided that any material amendment shall require
consent of the Majority Banks), and (ii) the terms and
conditions of such acquisition shall comply with all
material federal, state and local laws and regulations,
including, but not limited to, compliance with the Hart
Scott Rodino Act and all other applicable laws and
regulations.
(b) AMENDMENTS TO ARTICLE II. ARTICLE II of the Credit
Agreement is hereby amended in the following respects:
(i) SECTION 2.05 is hereby deleted therefrom and the
following SECTION 2.05 is substituted in lieu thereof:
"2.05 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) VOLUNTARY TERMINATION OR REDUCTION.
The Company may, upon not less than five Business
Days prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by
an aggregate minimum amount of $2,000,000.00 or any
multiple of $1,000,000.00 in excess thereof; UNLESS,
after giving effect thereto and to any prepayments of
Loans made on the effective date thereof, (i) the
Effective Amount of all Facility A Revolving Loans
exceeds the amount of the combined Facility A
Revolving Commitment, then in effect, or (ii) the
Effective Amount of all Facility B Revolving Loans and
L/C Obligations together would exceed the amount of
the combined Facility B Revolving Commitments then in
effect. Once reduced in accordance with this
subsection, the Commitments may not be increased.
(b) MANDATORY REDUCTION. The Commitment
of each Bank under the Facility A Commitment shall be
automatically reduced on the second anniversary of the
Second Amendment Closing Date, and such reduction
shall be equal to $20,000,000.00 in the aggregate.
(c) ADDITIONAL PROVISIONS. Each reduction
in aggregate Commitments pursuant to paragraph (a) or
(b) above shall be applied to each Bank according to
its Pro Rata Share. All accrued Commitment Fees on the
amount of the Commitments so terminated or reduced,
Letter of Credit Fees, and Fronting Fees to, but not
including, the effective date of any reduction or
termination of Commitments, shall be paid by the
Company on the effective date of such reduction or
termination."
(c) AMENDMENTS TO ARTICLE V. ARTICLE V of the Credit
Agreement is hereby amended in the following respects:
(i) SECTION 5.02 is hereby redesignated as SECTION
5.03; and
(ii) The following shall be inserted as SECTION 5.02:
"5.02 SPECIAL CONDITIONS PRECEDENT FOR FACILITY
A ACQUISITIONS. The obligation of each Bank to make any
Revolving Loan under Facility A, if the proceeds of such
Revolving Loan are to be used to make an Acquisition
involving a purchase price of $10 million or more, is
subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date:
(a) DUE DILIGENCE. The Agent and the
Banks shall have completed normal and customary due
diligence, review and approval of the environmental
exposures resulting from such acquisition of the
Company and its existing and prospective Subsidiaries.
(b) COMPLIANCE. The Acquisition shall be
permissible under this Agreement. The terms and
conditions of such Acquisition shall comply with all
material federal, state, and local laws and
regulations, including, but not limited to, compliance
with the Hart-Scott-Rodino Antitrust Improvements Act
and all other applicable laws and regulations, and if
requested by the Agent or the Majority Banks, the
Company shall furnish an opinion of counsel reasonably
satisfactory to the Agent and the Majority Banks
confirming the foregoing."
(d) AMENDMENTS TO ARTICLE VI. ARTICLE VI of the Credit
Agreement is hereby amended in the following respect: the
following new sentence shall be added to the end of Section
6.08:
"Margin Stock does not constitute more than 25% of the
value of the consolidated assets of the Company and its
Subsidiaries, and the Company does not have any present
intention that Margin Stock will constitute more than 25%
of the value of such assets."
(e) AMENDMENTS TO ARTICLE VII. ARTICLE VII of the Credit
Agreement is hereby amended in the following respects:
(i) SECTION 7.13 of the Credit Agreement is hereby
deleted therefrom and the following SECTION 7.13 is substituted
in lieu thereof:
"7.13 Use of Proceeds. The Company may use the
proceeds of the Facility A Revolving Loan only for the
following: (a) to make capital contributions or loans to
the Giant Four Corners, Inc. to be used to finance the
purchase of assets pursuant to the Thriftway Acquisition,
and to make a capital contribution or loan to Giant
Industries Arizona, Inc. to finance the purchase of stock
pursuant to the Phoenix Acquisition, (b) to repurchase
shares of capital stock of the Company to the extent such
repurchases are permitted under SECTION 8.09, and (c) to
make capital contributions and loans to the Guarantors for
capital expenditures, for general corporate purposes and
for Acquisitions permitted under this Agreement; provided,
however, that the Facility A Revolving Loan shall not be
used by the Company or by the Guarantors for working
capital expenditures unless all Banks consent. The Company
shall use the proceeds of the Facility B Revolving Loan to
make capital contributions and loans to the Guarantors for
working capital expenditures, and for issuance of standby
letters of credit pursuant to Article III hereof in the
ordinary course of business."
(f) AMENDMENTS TO ARTICLE VIII. ARTICLE VIII of the
Credit Agreement is hereby amended in the following respects:
(i) Section 8.01 of the Credit Agreement is hereby
amended by changing the period (".") at the end of SECTION
8.01(j) to "; and", and adding a new SECTION 8.01(k) as
follows:
"(k) the Master Lease and Option Agreements
described on SCHEDULE 8.05."
(ii) SECTION 8.05(c) of the Credit Agreement is
hereby amended to read as follows:
"(c) Indebtedness described on SCHEDULE 8.05."
(iii) SECTION 8.08 of the Credit Agreement is hereby
amended by changing the period (".") at the end of SECTION
8.08(g) to "; and", and adding the following new SECTION
8.08(h) as follows:
"(h) the guaranties described in SCHEDULE 8.05."
(iv) SECTION 8.09(c) of the Credit Agreement is
hereby deleted therefrom and the following SECTION 8.09(c) is
substituted in lieu thereof:
"(c) notwithstanding the provisions of SECTION
8.07(a)(i), the Company may purchase, redeem or otherwise
acquire shares of its common stock to the extent permitted
by the terms of the NBD Subordinated Indenture, provided,
however, that the Company may not purchase, redeem or
otherwise acquire more than 1,400,000 shares in the
aggregate in addition to shares acquired prior to March 31,
1997."
(v) SECTION 8.12 of the Credit Agreement is hereby
deleted therefrom and the following SECTION 8.12 is substituted
in lieu thereof:
"SECTION 8.12 MINIMUM CONSOLIDATED NET WORTH.
From and after the Closing Date, the Company will maintain
at all times Consolidated Net Worth in an amount not less
than the sum of (i) $109,911,691, plus (ii) 50% of
Consolidated Net Income computed on a cumulative basis for
the period beginning March 31, 1997 and ending on the date
of determination (provided that no negative adjustment will
be made in the event that Consolidated Net Income is a
deficit figure for such period), plus (iii) 75% of the
aggregate amount of the net assets (cash or otherwise)
received by the Company from the issuance of any class of
capital stock after March 31, 1997, less (iv) any allowance
for non-cash write-downs, provided that such allowance on a
cumulative basis shall not exceed $10,000,000.00."
(vi) SECTION 8.14 of the Credit Agreement is hereby
deleted therefrom and the following SECTION 8.14 is substituted
in lieu thereof:
"SECTION 8.14 CAPITALIZATION RATIO. From and after
the Closing Date the Company shall not permit the
Capitalization Ratio to be greater than 65.0% through
June 30, 1998, 62.5% after June 30, 1998 up to and
including June 30, 1999, and thereafter no greater than
60.0%."
(g) AMENDMENT TO SCHEDULE 2.01 (COMMITMENTS). SCHEDULE
2.01 to the Credit Agreement is hereby deleted and SCHEDULE
2.01a (FACILITY A COMMITMENT) and SCHEDULE 2.01(b) (FACILITY B
COMMITMENT) are hereby added to the Credit Agreement, each in
the form attached to this Amendment.
(h) AMENDMENT TO SCHEDULE 2.02 (PRICING). SCHEDULE 2.02
to the Credit Agreement is hereby deleted and a revised
SCHEDULE 2.02 is hereby added to the Credit Agreement, in the
form set forth as SCHEDULE 2.02 to this Amendment.
(i) NEW SCHEDULE 8.05 (CERTAIN PERMITTED INDEBTEDNESS AND
CONTINGENT OBLIGATIONS). A new SCHEDULE 8.05, in the form
attached hereto as SCHEDULE 8.05, is hereby added to the Credit
Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company
and each of the Guarantors represent and warrant to the Agent
and to each of the Banks that:
(a) This Amendment, the Credit Agreement as amended
hereby and each Guaranty and each Note have been duly
authorized, executed and delivered by the Company and the
Guarantors who are parties thereto and constitute their legal,
valid and binding obligations enforceable in accordance with
their respective terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors rights
generally and to general principles of equity).
(b) The representations and warranties set forth in
ARTICLE V of the Credit Agreement are true and correct in all
material respects before and after giving effect to this
Amendment with the same effect as if made on the date hereof.
(c) As of the date hereof, at the time of and immediately
after giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
(d) No material adverse change in the business, assets,
operations, financial condition, liabilities or capitalization
of the Company and its Subsidiaries has occurred since December
31, 1996.
SECTION 3. CONDITIONS OF EFFECTIVENESS. This Amendment
shall be effective on the date (the "Effective Date") of the
delivery by the Company and the Guarantors to the Agent of the
following:
(a) AMENDMENT. This Amendment, signed by the Company,
the Guarantors, the Agent, and each of the Banks;
(b) FACILITY A AND FACILITY B NOTES. A Facility A Note
and a Facility B Note executed by the Company payable to each
Bank, substantially in the form attached as EXHIBIT F to the
Credit Agreement (such Facility A Notes shall be in renewal,
extension, increase and replacement of the Facility A Notes
executed prior to the date hereof, and such Facility B Notes
shall be in renewal, extension and replacement of the Facility
B Notes executed prior to the date hereof);
(c) RESOLUTIONS, ETC. (i) Resolutions of the board of
directors of the Company and each Guarantor authorizing the
transactions contemplated hereby, certified by the Secretary or
an Assistant Secretary of such Person; (ii) Certificates of the
Secretary or Assistant Secretary of the Company and each
Guarantor certifying the names and true signatures of the
officers or such Person authorized to execute, deliver and
perform, this Amendment, and all other Loan Documents to be
delivered by it hereunder; and (iii) amendments to Articles or
certificates of incorporation and the bylaws of the Company and
each Guarantor made since the Closing Date, certified by the
Secretary or Assistant Secretary of the such Person;
(d) GOOD STANDING. A good standing certificate for the
Company and each Guarantor from the state of incorporation as
of a recent date;
(e) LEGAL OPINIONS. Opinions of counsel to the Company
and addressed to the Agent and the Banks, substantially in the
form of Exhibit "A" hereto;
(f) PAYMENT OF FEES. Evidence of payment by the Company
of all accrued and unpaid fees, costs and expenses owed
pursuant to the Fee Letter among the Company, the Arranger and
the Agent dated as of May 10, 1997;
(g) OTHER. Such other approvals, opinions and documents
as the Agent or the Majority Banks may reasonably request.
SECTION 4. EFFECT OF AMENDMENT. This Amendment (i)
except as expressly provided herein, shall not be deemed to be
a consent to the modification or waiver of any other term or
condition of the Credit Agreement or of any of the instruments
or agreements referred to therein and (ii) shall not prejudice
any right or rights which the Agent or the Banks may now have
under or in connection with the Credit Agreement, as amended by
this Amendment. Except as otherwise expressly provided by this
Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and
agreed by each of the parties hereto that the Credit Agreement,
as amended hereby, shall continue in full force and effect, and
that this Amendment and such Credit Agreement shall be read and
construed as one instrument. The Company confirms that the
Facility B Notes executed prior to the date hereof remain in
full force and effect.
SECTION 5. GUARANTIES. Each of the Guarantors hereby
consents to and accepts the terms and conditions of this
Amendment, agrees to be bound by the terms and conditions
hereof, and ratifies and confirms that its Guaranty executed
and delivered in connection with the Credit Agreement is and
remains in full force and effect.
SECTION 6. MISCELLANEOUS This Amendment shall for all
purposes be construed in accordance with and governed by the
laws of the State of Texas. The captions in this Amendment are
for convenience of reference only and shall not define or limit
the provisions hereof. This Amendment may be executed in
separate counterparts, each of which when so executed and
delivered shall be an original, but all of which together shall
constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such
counterpart.
[SIGNATURES BEGIN ON NEXT PAGE]
<PAGE>
<PAGE>
NO ORAL AGREEMENTS. THE CREDIT AGREEMENT (AS AMENDED BY
THE FIRST AMENDMENT AND THIS SECOND AMENDMENT) AND THE OTHER
LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the date and year first above
written.
GIANT INDUSTRIES, INC.,
as Company
By: /s/ A. Wayne Davenport
____________________________________
Name: A. Wayne Davenport
Title: Vice President & CFO
GIANT INDUSTRIES ARIZONA, INC. GIANT
EXPLORATION & PRODUCTION COMPANY
GIANT FOUR CORNERS, INC.
SAN JUAN REFINING COMPANY
CINIZIA PRODUCTION COMPANY,
as Guarantors
By: /s/ A. Wayne Davenport
____________________________________
Name: A. Wayne Davenport
in each case, as Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, As Agent
By: /s/ J. Stephen Mernick
____________________________________
J. Stephen Mernick
Senior Vice President
BANK OF AMERICA ILLINOIS, as a Bank
and as Issuing Bank
By: /s/ J. Stephen Merick
____________________________________
J. Stephen Mernick
Senior Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Steven Capouch
____________________________________
Steven Capouch
First Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By:____________________________________
Name:
Title:
