The following procedures shall be used for the sale and transfer of leasehold interests in real property and certain personal property at convenience stores located in Tennessee, Virginia and Kentucky (individually, a “Property” and collectively, the “Properties”) currently operated by the Company, debtor in a case commenced under chapter 11 of title 11 of the Bankruptcy Code in the Bankruptcy Court. Greystone has security interests in or liens upon all of the Properties. Broker has been engaged by the Company to coordinate the sale. The Properties in this sale are subject to the terms and conditions outlined herein (the “Sale Procedures”), in the virtual deal room, bid package, and website (www.nrc.com/906) concerning the Properties, and any assumption and assignment agreements and purchase and sale agreements (collectively, the “Transfer Documents”).
Transferred Assets. The Properties to be sold or otherwise transferred consist of leasehold interests in real estate, personal property and other related tangible assets located at the Properties, except for the “Excluded Assets” described below. The Properties shall be sold, and leases assumed and assigned, to the successful bidder or such other party (with respect to each sale, the “Purchaser”) as may submit the best offer as described below, pursuant to the Transfer Documents and, as applicable, sections 363 and 365 of the Bankruptcy Code, free and clear of any liens, claims or interests asserted by any party. In addition, the Company is offering for sale the “Appco” trade name and trademarks and related intellectual property of the Company, which shall be subject to bids as described in greater detail in Section 1.3 hereof.
Excluded Assets. The assets of the Company which shall not be sold (the “Excluded Assets”) and which shall remain property of the estate subject to sale or other disposition pursuant to existing and subsequent orders of the Bankruptcy Court consist of (a) funds on deposit, (b) accounts receivables or the proceeds thereof, (c) any retainers or similar funds on deposit with any professionals retained by the Company, (d) all claims or causes of action that the Company may assert against any person or entity, including but not limited to any “Bankruptcy Causes of Action’’, (e) the Company’s books and records, and (f) all other property of the Company that is not associated with the Properties.
Bid Deadline. All bids must be received by Broker no later than 2:00 p.m. Central Standard Time on July 9, 2009 (the “Bid Deadline”). All bids should be sent to:
NRC Realty Advisors, LLC
Attn: Sealed Bid Sale 906
363 W. Erie, #300E
Chicago, Illinois 60654
Bid Procedures. Bids may be made for individual or multiple Properties. Bidders making bids on more than one Property may designate their bids (a) all or nothing bids (“All or Nothing Bids”), (b) preference bids (“Preference Bids”), (c) multiple preference bids (“Multiple Preference Bids”) or (d) bids for multiple properties (“Multiple Bids”) by filling out the bid designation form included in the bid package; provided, however, that such bids must allocate their bid by each individual Property. Failure to allocate may cause the Company to consider the bid non-conforming, in which case the bid will not be evaluated and the Bid Deposit will be returned, unless the Company decides, in its sole discretion, to waive any such deficiency that causes the bid to be non-conforming.
Master Leases. Several of the Properties are the subject of "master leases" covering multiple Properties. In the case of bids on Properties which are subject to master leases, bidders must bid on all of the Properties which are the subject of an individual master lease, and bidders shall not be required to allocate their bid among the Properties which are the subject of a master lease.
Bidding Options. Bidders designating an All or Nothing Bid will be awarded all of their Properties or none. Bidders designating a Preference Bid will either be awarded one of their Properties or none. Bidders designating a Multiple Preference Bid will be awarded all, some or one or more of the total number of Properties in their Preference Bids. Successful bidders designating a Multiple Bid will be awarded all, some, one or none of their Properties.
Bid Deposits. Bidders must include a bid deposit (the “Bid Deposit”) with their bid in the amount of the greater of (i) 2.5% of the total Purchase Price for all sites bid on, as defined in the purchase and sale agreement, or (ii) $10,000 multiplied by the number of individual sites bid on, by certified or cashiers check made payable to Broker. Successful bidders must increase their Bid Deposit to 10% of the bid price by certified or cashiers check made payable to Broker (but not less than an additional $10,000) within two (2) days of notice of acceptance of their bid.
Non-Conforming Bids. The Company reserves the right to reject any bid which is considered nonconforming. No alteration to any of the Transfer Documents is allowed. Any changes may cause the Company to consider the bid non-conforming, in which case the bid will not be evaluated and the Bid Deposit will be returned.
Court Approval. All bids for the Properties of the Company are subject to approval by the Bankruptcy Court.
Confidentiality. All information contained in this Memorandum or in the virtual deal room is confidential and is to be kept confidential by each person and entity receiving same. Prospects will be required to acknowledge their agreement to be bound by confidentiality provisions prior to receiving this Memorandum or gaining access to the virtual deal room. By ordering this Memorandum or requesting access to the virtual deal room, bidders shall be deemed to consent to the provisions of this paragraph. However, such party may disclose information obtained from this Memorandum or virtual deal room, on a “need to know” basis, to the following persons and entities provided that such persons first agree to keep the information confidential: (a) the employees, officers, and directors of such party or of such party’s affiliates, (b) third parties being utilized to perform investigation or analyze information, so as to advise bidders with respect to bidding upon the Properties; or (c) third parties providing bidders with financing for purchase of the Properties. The foregoing provisions of this paragraph requiring confidentiality shall terminate as to a party only if and when such party consummates the closing of such Properties.
Rejected Bids. Bid Deposits for rejected bids will be returned via certified mail approximately ten (10) business days after the Bid Deadline or Best and Final Bid Deadline.
Evaluation and Award of Bids. All bids received by the Bid Deadline will be reviewed by the Company, Broker, Greystone and the Official Committee of Unsecured Creditors of the Company (the “Committee”). After consideration of all bids, successful bidders will be selected. The Company reserves the right, prior to executing the Transfer Documents, to review financial information concerning all bidders in order to evaluate the bidders’ ability to close the sale.
Best and Final Bids. In the event the bid prices are clustered in a “competitive range”, a best and final offer (“BAFO”) may be solicited from the bidders whose bids fall within such range. Bidders will be notified if there is a solicitation of a BAFO by phone, fax or mail, in which case bidders will be given an opportunity to raise their bid. BAFOs will be incorporated by written amendment to the Transfer Documents. Bidders may not lower BAFO bids below their original bid amount. If no BAFO is received, the original bid amount will remain in full force and effect.
Non-Revocation of Bids. Sealed bids will be deemed in full force and effect as of the Bid Deadline and will remain in full force and effect for thirty (30) days after their submission to Broker. Bids may not be revoked or withdrawn by the bidder during that time, during which period the Company or other appropriate party will execute the Transfer Documents for the successful bidder for any Property, and the bidder will be bound by the Transfer Documents, subject only to Bankruptcy Court approval.
Effective Date of Award of Bid. The effective date of the award of the bid for any Property (the “Effective Date”) shall be the date that the Company executes the Transfer Documents. Since time is of the essence, successful bidders will be notified of the award via fax, if possible, with the executed Transfer Documents to be sent by overnight mail.
Company’s Reservations. The Company reserves the right, after consulting with Greystone and the Committee, to decline any and all bids, postpone, extend or cancel any Bid Deadline, and in its sole discretion, to withdraw any Property from the sale at any time without notice. The Company reserves the absolute right in its sole discretion, after consulting with Greystone and the Committee, to amend these Sale Procedures, the Transfer Documents and any other required sale or closing documents.
Purchaser’s Assumption of Leases. The Company shall pay at closing or provide for the payment of the amounts, if any, which would be necessary to cure any defaults, both prepetition and postpetition, under the leases with respect to the Properties through the date of closing. The Purchaser shall pay or assume all other obligations arising thereafter, and shall present competent and adequate assurance of future performance under the assumed leases.
Closings. Closings shall occur on the later of thirty (30) days after the Effective Date or ten (10) days after the date that the Bankruptcy Court approves the sale. Failure to close in a timely fashion will result in the forfeiture of the bidder’s Bid Deposit. Purchaser shall be responsible for escrow charges payable to Broker of $1,500 for each Property being acquired. Closing of this transaction shall take place at a location (or by mail), and on a business day selected by the Company.
Back-Up Bidders. Upon the failure to consummate the sale of any Property after the hearing approving the sale because of the breach or failure on the part of the successful bidder, the next highest qualified bid, as disclosed at the hearing on the sale of such Property, will be deemed the successful bid without further order of the Bankruptcy Court.
Free and Clear of All Liens. The Property will be conveyed free and clear of all liens pursuant to orders of the Bankruptcy Court. Real estate taxes will be current and prorated as of the date of closing.
Licenses, Permits and Authorization. The successful bidder will be responsible for obtaining, at its expense, any licenses, permits and authorizations (collectively, “Licenses”) required to acquire, manage, develop and/or operate the Properties, including state liquor licenses. Obtaining such Licenses will not be a condition to the successful bidder’s obligation to close.
De-Identification/Removal of Excluded Assets and “Appco” Signage and Trademarks. No later than five (5) days after the closing, the Purchaser shall return all Excluded Assets to the Company and shall remove from the Properties all “Appco” signage, advertising and other displays on or in the Properties, and on or in the building in which the Properties are located, containing any of the Company’s trade names, trademarks or other intellectual property owned or licensed by the Company and shall cover any paint or other substance containing the colors commonly used at stores owned or operated by the Company or its franchisees or affiliates, unless such Purchaser has been the successful bidder for the “Appco” trade name and trademarks and related intellectual property of the Company.
Inventory. Petroleum, merchandise and supply inventory (collectively, "Inventory") will be paid for in addition to the purchase price at closing. Seven (7) days prior to closing, Broker shall provide Purchaser with an estimated amount of petroleum and merchandise inventory (collectively, the "P&M Inventory"). Five (5) days prior to closing, Purchaser shall wire transfer to Broker an amount equal to 110% of the estimated P&M Inventory amount. Failure to fund the P&M Inventory amount shall be considered a default hereunder, resulting in the forfeiture of the bidder’s Bid Deposit. On the day of closing, the Company and Purchaser will perform an audit of the P&M Inventory using an outside audit firm designated by the Company. The cost of the audit will be divided equally between Purchaser and the Company. Petroleum inventory will be purchased at current rack pricing as of the date of the closing, plus two cents, and delivery costs and all taxes. The cost to Purchaser for merchandise inventory, including cigarettes (at retail before buydowns), will be a value determined by the gross margin percentages stated on the individual store financial statements. Purchaser must purchase ALL of the Inventory except for damaged or out of code Inventory. Proceeds from the sale of the Inventory during the time the physical inventory is being conducted shall be divided equally between the Company and Purchaser. Purchaser shall, after closing, have the option to purchase tobacco and in-store merchandise from a vendor of its choice.
Conflicts. In the event of a conflict between these Sale Procedures and any Transfer Documents, the provisions of the Transfer Documents shall control.
Amendments. These Sale Procedures, any form of Transfer Documents, and any other required sale documents or closing documents may be amended only in writing by the Company.
Disclaimer. The Company, Broker, Greystone, and the Committee and their respective employees, agents, subsidiaries or affiliates, acknowledge that the Company, Broker, Greystone, and the Committee may not have complete knowledge of the physical or economic characteristics of any Property being sold. Accordingly, and except as otherwise specifically stated in any Transfer Documents, the Company, Broker, Greystone and the Committee and their respective employees, agents, subsidiaries or affiliates, hereby disclaim any warranty, guaranty or representation, express or implied, oral or written, past, present, or future, of, as to, or concerning (a) the condition or state of repair of the Properties, including, but not by way of limitation, any condition arising in connection with the generation, use, transportation, storage, release, or disposal of petroleum products, toxic or hazardous substances, on and under, above, upon, or in the vicinity of the Properties such as water, soil and geology, and the suitability thereof and of the Properties for any and all activities and use which the Purchaser may elect to conduct thereon; (b) the extent of any right-of-way, lease, possession, lien, encumbrance, easements, license, reservation, or condition in connection with the Properties; (c) the compliance of the Properties or their operation with any applicable laws, ordinances, or regulations of any government or other body, including without limitation, compliance with any land use, Americans with Disabilities Act, wetland, or zoning law or regulation, or applicable environmental or coastal laws, rules, ordinances and regulations; (d) title to or the boundaries of the Properties; and (e) the physical condition of the Properties, including, without limitation, the structural, mechanical and engineering characteristics of the improvements to the Properties.
Except as stated above and as set forth in any Transfer Documents, the sale of the Properties shall be on an “AS IS, WHERE IS, WITH ALL FAULTS” basis, and Purchaser expressly agrees that the Company, Broker, Greystone, and the Committee and their respective employees, agents, subsidiaries or affiliates, make no warranty or representation, express or implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, merchantability or fitness for a particular purpose, with respect to the Properties. Purchasers are buying the Properties based on their own investigations, and, by accepting title to all or part of the Properties, acknowledge that they have conducted such investigations as they have deemed necessary or advisable and that Purchasers are not relying upon any representations of the Company, Broker, Greystone, the Committee or their respective agents whatsoever. The materials and information concerning the Properties contained herein, together with postcards, the virtual deal room, and bid packages, Broker’s website, and any and all other information provided by the Company, Broker, Greystone, or the Committee, or their respective counsel and/or their employees, agents, subsidiaries or affiliates, is based in part upon information and materials obtained from sources deemed reliable without independent verification. Bidders must not base their bids upon information disseminated in the postcard, this Memorandum, virtual deal room, bid package and Broker’s website, such as, but not limited to, environmental studies, repair estimates, or other studies, pro forma and financial information that may be provided by the Company, Broker, Greystone, or the Committee, but shall rely solely on their own estimates and studies. No warranty or representation, express or implied, is made by the Company, Broker, Greystone, or the Committee, or their respective employees and agents, as to the accuracy or completeness of any or all such information.