Document:

Exhibit 4.4

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

 

Dated as of December 17, 2003

 

by and among

 

COUCHE-TARD U.S. L.P.,

COUCHE-TARD FINANCING CORP.,

 

THE GUARANTORS

named herein

 

and

 

CIBC WORLD MARKETS CORP.,

SCOTIA CAPITAL (USA) INC. and

NBF SECURITIES (USA) CORP.,

 

as Initial Purchasers

 

 

US$350,000,000

 

7 1/2% SENIOR SUBORDINATED NOTES DUE 2013

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
  2.

  	
  EXCHANGE
  OFFER

  	
   

  
	
  3.

  	
  SHELF REGISTRATION

  	
   

  
	
  4.

  	
  ADDITIONAL INTEREST

  	
   

  
	
  5.

  	
  REGISTRATION PROCEDURES

  	
   

  
	
  6.

  	
  REGISTRATION EXPENSES

  	
   

  
	
  7.

  	
  INDEMNIFICATION

  	
   

  
	
  8.

  	
  RULES 144 AND 144A

  	
   

  
	
  9.

  	
  UNDERWRITTEN REGISTRATIONS

  	
   

  
	
  10.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  (a)

  	
  Remedies

  	
   

  
	
   

  	
  (b)

  	
  No Inconsistent Agreements

  	
   

  
	
   

  	
  (c)

  	
  Adjustments Affecting Registrable Notes

  	
   

  
	
   

  	
  (d)

  	
  Amendments and Waivers

  	
   

  
	
   

  	
  (e)

  	
  Notices

  	
   

  
	
   

  	
  (f)

  	
  Successors and Assigns

  	
   

  
	
   

  	
  (g)

  	
  Counterparts

  	
   

  
	
   

  	
  (h)

  	
  Headings

  	
   

  
	
   

  	
  (i)

  	
  Governing Law

  	
   

  
	
   

  	
  (j)

  	
  Severability

  	
   

  
	
   

  	
  (k)

  	
  Notes Held by any Issuer or Its Affiliates

  	
   

  
	
   

  	
  (l)

  	
  Third Party Beneficiaries

  	
   

  
	
   

  	
  (m)

  	
  Entire Agreement

  	
   

  
	
   

  	
  (n)

  	
  Joint and Several Obligations

  	
   

  

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”)
is made and entered into as of December 17, 2003, by and among Couche-Tard U.S.
L.P., a Delaware limited partnership (“Couche-Tard L.P.”) and
Couche-Tard Financing Corp., a Delaware corporation (“Finance Corp.,”
and together with Couche-Tard L.P., the “Companies”), each of which is
an indirect wholly-owned subsidiary of Alimentation Couche-Tard Inc., a
corporation organized under the laws of Quebec (“Parent”), Parent and
each of Parent’s subsidiaries listed on the signature pages attached hereto
(Parent and each such subsidiary a “Guarantor” and, collectively, the “Guarantors”
and, together with the Companies, the “Issuers”) and CIBC World Market
Corp., Scotia Capital (USA) Inc. and NBF Securities (USA) Corp. (the “Initial
Purchasers”).

 

This Agreement is entered into in connection
with the Purchase Agreement, dated December 11, 2003, by and among the
Companies, the Guarantors and the Initial Purchasers (the “Purchase Agreement”)
relating to the sale by the Companies to the Initial Purchasers of
US$350,000,000 aggregate principal amount of the Companies’ 7 1/2% Senior
Subordinated Notes due 2013 (the “Notes”) and the unconditional
guarantee thereof by the Guarantors on a joint and several basis (the “Guarantee”).  In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights set forth in this Agreement for the benefit of the holders
of Registrable Notes (as defined), including, without limitation, the Initial
Purchasers.  The execution and delivery
of this Agreement is a condition to the Initial Purchasers’ obligation to
purchase the Notes under the Purchase Agreement.

 

The parties
hereby agree as follows:

 

1.             Definitions

 

As used in this Agreement, the following
terms shall have the following meanings:

 

Additional Interest:  See Section 4(a).

 

Advice:  See the last paragraph of Section 5.

 

Agreement:  See the first introductory paragraph to this
Agreement.

 

Applicable Period:  See Section 2(b).

 

broker-dealer:  Any broker or dealer registered as such
under the Exchange Act.

 

Business Day:  A day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York are required to be
closed.

 

Closing Date:  The Closing Date as defined in the Purchase
Agreement.

 

Commission:  The Securities and Exchange Commission.

 

 

Companies:  See the first introductory paragraph to this
Agreement.

 

Effectiveness Date:  (i) The 210th day after the Issue Date,
in the case of the Exchange Registration Statement or an Initial Shelf
Registration filed in lieu of the Exchange Registration Statement, and
(ii) in the case of an Initial Shelf Registration filed following delivery
of a Shelf Notice, the 90th day after the filing of such Initial Shelf Registration.

 

Effectiveness Period:  See Section 3(a).

 

Event Date:  See Section 4(b).

 

Exchange Act:  The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.

 

Exchange Notes:  See Section 2(a).

 

Exchange Offer:  See Section 2(a).

 

Exchange Registration Statement:  See Section 2(a).

 

Filing Date:  The 120th day after the Issue Date.

 

Guarantee:  See the second introductory paragraph to
this Agreement.

 

Guarantors: The
guarantors identified on the signature pages attached hereto.

 

Holder:  Any registered holder of Registrable Notes.

 

Indemnified Person:  See Section 7(c).

 

Indemnifying Person:  See Section 7(c).

 

Indenture:  The Indenture, dated as of December 17,
2003, by and among the Issuers and Wells Fargo Bank Minnesota, N.A., as
trustee, pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.

 

Initial Purchasers:  See the first introductory paragraph to this
Agreement.

 

Initial Shelf
Registration: 
See Section 3(a).

 

Inspectors:  See Section 5(n).

 

Issue Date:  December 17, 2003, the date on which the
Notes were sold to the Initial Purchasers pursuant to the Purchase Agreement.

 

Issuers:  The Companies and the Guarantors, collectively.

 

NASD:  National Association of Securities Dealers,
Inc.

 

2

 

Notes:  See the second introductory paragraph to
this Agreement.

 

Parent:  See the first introductory paragraph to this
Agreement.

 

Participant:  See Section 7(a).

 

Participating Broker-Dealer:  See Section 2(b).

 

Person:  Any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government (including any agency or
political subdivision thereof).

 

Private Exchange:  See Section 2(b).

 

Private Exchange Notes:  See Section 2(b).

 

Prospectus:  The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

Purchase Agreement:  See the second introductory paragraph to
this Agreement.

 

Records:  See Section 5(n).

 

Registrable Notes:  Each Note upon original issuance thereof and
at all times subsequent thereto, each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance thereof and at all times
subsequent thereto and each Private Exchange Note upon original issuance
thereof and at all times subsequent thereto, until, in the case of any such
Note, Exchange Note or Private Exchange Note, as the case may be, the earliest
to occur of (i) a Registration Statement (other than, with respect to any
Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Registration Statement) covering such Note, Exchange Note or Private
Exchange Note, as the case may be, has been declared effective by the Commission
and such Note, Exchange Note or Private Exchange Note, as the case may be, has
been disposed of in accordance with such effective Registration Statement,
(ii) such Note, Exchange Note or Private Exchange Note, as the case may
be, may be sold without restriction in compliance with Rule 144(k),
(iii) in the case of any Note, such Note has been exchanged pursuant to
the Exchange Offer for an Exchange Note or Exchange Notes which may be resold
without restriction under federal securities laws, or (iv) such Note,
Exchange Note or Private Exchange Note, as the case may be, ceases to be
outstanding for purposes of the Indenture.

 

Registration Statement:  Any registration statement of the Companies,
including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Notes pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements

 

3

 

to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.

 

Rule 144:  Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the Commission providing for
offers and sales of securities made in compliance therewith resulting in offers
and sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements
of the Securities Act.

 

Rule 144A:  Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the Commission.

 

Rule 415:  Rule 415 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

 

Securities Act:  The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.

 

Shelf Notice:  See Section 2(c).

 

Shelf Registration:  See Section 3(b).

 

Subsequent Shelf Registration:  See Section 3(b).

 

TIA:  The Trust Indenture Act of 1939, as amended.

 

Trustee:  The trustee under the Indenture and, if
existent, the trustee under any indenture governing the Exchange Notes and
Private Exchange Notes (if any).

 

Underwritten registration or underwritten
offering:  A
registration in which securities of one or more of the Issuers are sold to an
underwriter for reoffering to the public.

 

2.             Exchange Offer

 

(a)           To the extent not prohibited by any
applicable law or applicable interpretation of the Commission, each of the Issuers
agrees to file with the Commission no later than the Filing Date, an offer to exchange
(the “Exchange Offer”) any and all of the Registrable Notes (other than
Private Exchange Notes, if any) for a like aggregate principal amount of debt
securities of the Companies which are identical in all material respects to,
and evidencing the same continuing indebtedness as, the Notes (the “Exchange
Notes”) (and which are entitled to the benefits of the Indenture
(including, without limitation, the guarantee provisions thereof) (other than
such changes to the Indenture as are necessary to comply with any requirements
of the Commission to effect or maintain the qualification thereof under the
TIA) and which has been qualified under the TIA), except that the Exchange
Notes shall have been registered pursuant to an effective Registration Statement
under the Securities Act and shall contain no restrictive legend thereon and,
except for Exchange Notes referred to in Section 2(c)(iv), will not entitle the

 

4

 

Holder thereof to Additional Interest under
Section 6 of this Agreement.  The
Exchange Offer shall be registered under the Securities Act on the appropriate
form (the “Exchange Registration Statement”) and shall comply with all
applicable tender offer rules and regulations under the Exchange Act.  Each of the Issuers agrees to use its
reasonable best efforts to (x) cause the Exchange Registration Statement to be
declared effective under the Securities Act on or before the Effectiveness
Date; (y) keep the Exchange Offer open for not less than 20 Business Days (or
longer if required by applicable law) after the date that notice of the
Exchange Offer is first mailed to Holders; and (z) consummate the Exchange
Offer on or prior to the 45th day following the date on which the Exchange
Registration Statement is declared effective (but in no event later than the
240th day after the Issue Date).  Each
Holder who participates in the Exchange Offer will be required to represent
that any Exchange Notes received by it will be acquired in the ordinary course
of its business, that at the time of the consummation of the Exchange Offer
such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes, that such Holder is not
an affiliate of any Issuer within the meaning of Rule 405 under the Securities
Act, if such Holder is a broker-dealer, that it will receive Exchange Notes for
its own account in exchange for the Notes that were acquired as a result of
market-making activities or other trading activities and that it will deliver a
Prospectus in connection with any resale of such Exchange Notes and any additional
representations that in the written opinion of counsel to the Issuers are
necessary under then-existing interpretations of the Commission in order for
the Exchange Registration Statement to be declared effective.  Upon consummation of the Exchange Offer in
accordance with this Section 2, the provisions of this Agreement shall
continue to apply, mutatis  mutandis, solely with respect to
Registrable Notes that are Private Exchange Notes and Exchange Notes held by
Participating Broker-Dealers and Exchange Notes as to which Section 2(c)(iv) applies,
and the Issuers shall have no further obligation to register Registrable Notes
(other than Private Exchange Notes and other than in respect of any Exchange
Notes as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 of
this Agreement.

 

(b)           The Issuers shall include within the
Prospectus contained in the Exchange Registration Statement a section entitled
“Plan of Distribution,” reasonably acceptable to the Initial Purchasers, which
shall contain a summary statement of the positions taken or policies made by
the Staff of the Commission with respect to the potential “underwriter” status
of any broker-dealer (including an Initial Purchaser) that is the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes
received by such broker-dealer in the Exchange Offer (a “Participating
Broker-Dealer”), whether such positions or policies have been publicly disseminated
by the Staff of the Commission or such positions or policies, in the judgment
of the Initial Purchasers, represent the prevailing views of the Staff of the
Commission.  Such “Plan of Distribution”
section shall also allow, to the extent permitted by applicable policies and
regulations of the Commission, the use of the Prospectus by all Persons subject
to the prospectus delivery requirements of the Securities Act, including, to
the extent so permitted, all Participating Broker-Dealers, and include a
statement describing the manner in which Participating Broker-Dealers may
resell the Exchange Notes.

 

Each of the Issuers shall use its best
efforts to keep the Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein, in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time beginning when the
Exchange Notes

 

5

 

are first issued in the Exchange Offer and
ending upon the earlier of the expiration of the 180th day after the Exchange
Offer has been completed and such Persons are no longer required to comply with
the prospectus delivery requirements in connection with offers and sales of the
Exchange Notes (the “Applicable Period”).

 

If, upon consummation of the Exchange Offer,
any Initial Purchaser holds any Notes acquired by it and having the status of
an unsold allotment in the initial distribution, the Issuers upon the request
of such Initial Purchaser shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
Purchaser, in exchange (the “Private Exchange”) for the Notes held by
such Initial Purchaser, a like principal amount of debt securities of the
Companies that are identical in all material respects to, and evidencing the
same continuing indebtedness as, the Exchange Notes and the Notes except for
the existence of restrictions on transfer thereof under the Securities Act and
securities laws of the several states of the U.S. (the “Private Exchange
Notes”) (and which are issued pursuant to the same indenture as the
Exchange Notes).  The Issuers shall use
their reasonable best efforts to cause the Private Exchange Notes to bear the
same CUSIP number as the Exchange Notes to the extent not prohibited by any
applicable law or policy of the commission and to the extent the CUSIP Service
Bureau will issue the same.  The Issuers
shall not have any liability hereunder solely as a result of such Private
Exchange Notes not bearing the same CUSIP number as the Exchange Notes.  Interest on the Exchange Notes and Private Exchange
Notes will accrue from the last interest payment date on which interest was
paid on the Notes surrendered in exchange therefor or, if no interest has been
paid on the Notes, from the Issue Date.

 

In connection with the Exchange Offer, the
Issuers shall:

 

(1)           mail
to each Holder a copy of the Prospectus forming part of the Exchange Registration
Statement and, in the case of the Holders in Canada, any wrapper used in
connection with the private placement of the Exchange Notes in Canada, together
with an appropriate letter of transmittal and related documents;

 

(2)           utilize
the services of a depositary for the Exchange Offer with an address in the Borough
of Manhattan, The City of New York, which may be the Trustee or an affiliate
thereof;

 

(3)           permit
Holders to withdraw tendered Registrable Notes at any time prior to the close
of business, New York time, on the last Business Day on which the Exchange
Offer shall remain open; and

 

(4)           otherwise
comply in all material respects with all applicable laws.

 

As soon as practicable after the close of the
Exchange Offer or the Private Exchange, as the case may be, the Issuers shall:

 

(1)           accept
for exchange all Registrable Notes validly tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;

 

(2)           deliver
to the Trustee for cancellation all Registrable Notes so accepted for exchange;
and

 

6

 

(3)           cause
the Trustee to authenticate and deliver promptly to each Holder tendering such
Registrable Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in principal amount to the Notes of such Holder so accepted for
exchange.

 

The Exchange Notes and the Private Exchange
Notes will be issued under the Indenture, which will provide that the Exchange
Notes will not be subject to the transfer restrictions set forth in the
Indenture and that the Exchange Notes, the Private Exchange Notes and the
Notes, if any, and, except for Exchange Notes referred to in Section 2(c)(iv),
will not entitle the Holder thereof to Additional Interest under Section 4 of
this Agreement, will vote and consent together on all matters as one class and
that none of the Exchange Notes, the Private Exchange Notes or the Notes, if
any, will have the right to vote or consent as a separate class on any matter.

 

(c)           If, (i) because of any change in
law or in currently prevailing interpretations of the staff of the Commission,
the Companies are not permitted to effect an Exchange Offer, (ii) the
Exchange Offer is not consummated within 240 days of the Issue Date,
(iii) any holder of Private Exchange Notes so requests in writing to the
Companies or (iv) in the case of any Holder that participates in the
Exchange Offer (and tenders its Registrable Notes prior to the expiration
thereof), such Holder does not receive Exchange Notes on the date of the
exchange that may be sold without restriction under federal securities laws
(other than (i) due to the status of such Holder as an affiliate of any Issuer
within the meaning of the Securities Act and (ii) a restriction requiring
delivery of a prospectus and the prospectus in the Exchange Offer Registration
is appropriate or available for such resales) and so notifies the Companies
within 30 days following the consummation of the Exchange Offer (and providing
a reasonable basis for its conclusions), in the case of each of clauses
(i)-(iv), then the Issuers shall promptly deliver to the Holders and the
Trustee written notice thereof (the “Shelf Notice”) and shall file a
Shelf Registration pursuant to Section 3.

 

(d)           Any distribution in Canada of the
Exchange Notes will be effected solely to holders of Registrable Notes who
would be eligible to acquire Exchange Notes pursuant to prospectus exemptions
under applicable Canadian securities legislation and, as a condition to the
sale of their Registrable Notes pursuant to the Exchange Offer, holders of
Registrable Notes in Canada will be required to make certain representations to
the Company, including a representation that they are entitled under applicable
Canadian securities legislation to acquire the Exchange Notes without the
benefit of a prospectus qualified under such applicable securities laws.

 

3.             Shelf Registration

 

If a Shelf Notice is delivered as
contemplated by Section 2(c), then:

 

(a)           Shelf Registration.  The Issuers shall as promptly as reasonably
practicable file with the Commission a Registration Statement for an offering
to be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Notes (the “Initial Shelf Registration”).  If the Issuers shall not have yet filed the
Exchange Registration Statement, each of the Issuers shall file with the
Commission the Initial Shelf Registration on or prior to the Filing Date and
shall use its reasonable best efforts to cause such Initial Shelf Registration
to be declared effective under the Securities Act on or prior to the
Effectiveness Date.  Otherwise, each of
the Issuers shall file as promptly as practicable (such period not to exceed 60
days) with the Commission the

 

7

 

Initial Shelf Registration after the delivery
of the Shelf Notice and shall use its reasonable best efforts to cause such
Shelf Registration to be declared effective under the Securities Act on or
prior to the Effectiveness Date.  The
Initial Shelf Registration shall be on Form S-1 or another appropriate form
permitting registration of such Registrable Notes for resale by Holders in the
manner or manners designated by them (including, without limitation, one or
more underwritten offerings).  Each of
the Issuers shall use its reasonable best efforts to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
which is 24 months from the Issue Date (or, if Rule 144(k) under the Securities
Act is amended to permit unlimited resales by non-affiliates within a lesser
period, such lesser period) (subject to extension pursuant to the last
paragraph of Section 5 hereof) or such shorter period ending when
(i) all Registrable Notes covered by the Initial Shelf Registration have
been sold in the manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of the
Registrable Notes has been declared effective under the Securities Act (the “Effectiveness
Period”).

 

(b)           Subsequent Shelf Registrations.  If the Initial Shelf Registration or any
Subsequent Shelf Registration ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale of all of the
securities registered thereunder), each of the Issuers shall use its reasonable
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such
cessation of effectiveness amend the Shelf Registration in a manner to obtain
the withdrawal of the order suspending the effectiveness thereof, or file an
additional “shelf” Registration Statement pursuant to Rule 415 covering
all of the Registrable Notes (a “Subsequent Shelf Registration”).  If a Subsequent Shelf Registration is filed,
each of the Issuers shall use its reasonable best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such Subsequent Shelf Registration continuously
effective for a period equal to the number of days in the Effectiveness Period
less the aggregate number of days during which the initial Shelf Registration
of any Subsequent Shelf Registrations was previously continuously effective. As
used herein the term “Shelf Registration” means the Initial Shelf
Registration and any Subsequent Shelf Registration.

 

(c)           Supplements and Amendments.  Each of the Issuers shall promptly
supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Shelf Registration or by any underwriter of
such Registrable Notes, in each case, with each Issuer’s consent, which consent
shall not be unreasonably withheld or delayed.

 

4.             Additional Interest

 

(a)           The Issuers and the Initial
Purchasers agree that the Holders of Registrable Notes will suffer damages if
the Issuers fail to fulfill their obligations under Section 2 or Section 3
hereof and that it would not be feasible to ascertain the extent of such
damages with precision.  Accordingly,
each of the Issuers agrees to pay, as liquidated damages, additional interest
on the Registrable Notes (“Additional Interest”) under the circumstances
and to the extent set forth below (each of which shall be given independent
effect):

 

8

 

(i)            if
(A) either the Exchange Registration Statement or the Initial Shelf Registration
has not been filed on or prior to the Filing Date or (B) notwithstanding that
the Issuers have consummated or will consummate an Exchange Offer, the Issuers
are required to file a Shelf Registration and such Shelf Registration is not
filed on or prior to the 60th day after delivery of the Shelf Notice, then, in
the case of subclause (A), commencing on the day after the Filing Date or, in
the case of subclause (B), commencing on the 61st day following delivery of the
Shelf Notice, Additional Interest shall accrue on the Registrable Notes over
and above the stated interest at a rate of 0.25% per annum for the first 90
days immediately following the Filing Date or such 61st day, as the case may
be, such Additional Interest rate increasing by an additional 0.25% per annum
at the beginning of each subsequent 90-day period;

 

(ii)           if
(A) either the Exchange Registration Statement or the Initial Shelf
Registration is not declared effective on or prior to the Effectiveness Date
applicable thereto or (B) notwithstanding that the Issuers have consummated or
will consummate an Exchange Offer, the Issuers are required to file a Shelf
Registration and such Shelf Registration is not declared effective by the
Commission on or prior to the applicable Effectiveness Date, then, commencing
on the day after such applicable Effectiveness Date, Additional Interest shall
accrue on the Registrable Notes over and above the stated interest at a rate of
0.25% per annum for the first 90 days immediately following the day after the
applicable Effectiveness Date, such Additional Interest rate increasing by an
additional 0.25% per annum at the beginning of each subsequent 90-day period;
and

 

(iii)          if
(A) the Issuers have not exchanged Exchange Notes for all Notes validly
tendered in accordance with the terms of the Exchange Offer on or prior to the
240th day after the Issue Date, (B) the Exchange Registration Statement
ceases to be effective at any time prior to consummation of the Exchange Offer
or (C) if applicable, a Shelf Registration has been declared effective and
such Shelf Registration ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall accrue on the Registrable
Notes over and above the stated interest at a rate of .025% per annum for the
first 90 days commencing on the (x) 241st day after the Issue Date in the case
of (A) above or (y) the day such Exchange Registration Statement or Shelf
Registration ceases to be effective in the case of (B) and (C) above, such
Additional Interest rate increasing by an additional 0.25% per annum at the
beginning of each such subsequent 90-day period;

 

provided,
however, that in no event shall the Additional Interest rate on the
Registrable Notes exceed in the aggregate 1.0% per annum; provided  further
that (1) upon the filing of the Exchange Registration Statement or each
Shelf Registration (in the case of (i) above), (2) upon the effectiveness
of the Exchange Registration Statement or each Shelf Registration, as the case
may be (in the case of (ii) above), or (3) upon the exchange of Exchange
Notes for all Registrable Notes tendered (in the case of (iii)(A) above) or
upon the effectiveness of an Exchange Registration Statement or Shelf
Registration which had ceased to remain effective (in the case of (iii)(B) and
(C) above), Additional Interest on any Registrable Notes then accruing as a
result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue. Additional Interest may not accrue pursuant to more than
one clause of subsection (a) at any one time.

 

9

 

(b)           The Issuers shall notify the Trustee
within one Business Day after each and every date on which an event occurs in
respect of which Additional Interest is required to be paid (an “Event Date”).  Any amounts of Additional Interest due pursuant
to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash
semi-annually on each regular interest payment date specified in the Indenture
(to the Holders of Registrable Notes of record on the regular record date
therefor (as specified in the Indenture) immediately preceding such dates),
commencing with the first such regular interest payment date occurring after
any such Additional Interest commences to accrue.  The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Notes subject thereto, multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360. 
Any payments made pursuant to this Section 4 shall have the benefit of
Section 4.24 of the Indenture, if applicable.

 

5.             Registration Procedures

 

In connection with the filing of any
Registration Statement pursuant to Sections 2 or 3 hereof, each Issuer shall effect
such registrations to permit the exchange or sale of such securities covered
thereby in accordance with the intended method or methods of exchange or
disposition thereof, and pursuant thereto and in connection with any
Registration Statement filed by each Issuer hereunder, each Issuer shall:

 

(a)           Prepare and file with the Commission
prior to the Filing Date, the Exchange Registration Statement or if the Exchange
Registration Statement is not filed or is unavailable, a Shelf Registration as
prescribed by Section 2 or 3, and use its reasonable best efforts to cause each
such Registration Statement to become effective and remain effective as
provided herein; provided that, if (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period and has advised the Companies that it is a
Participating Broker-Dealer, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuers shall, if
requested, furnish to and afford the Holders of the Registrable Notes to be
registered pursuant to such Shelf Registration or each such Participating
Broker-Dealer, as the case may be, covered by such Registration Statement,
their counsel and the managing underwriters, if any, a reasonable opportunity
to review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be
filed (in each case at least five Business Days prior to such filing).  The Issuers shall not file any such Registration
Statement or Prospectus or any amendments or supplements thereto if the Holders
of a majority in aggregate principal amount of the Registrable Notes covered by
such Registration Statement, or any such Participating Broker-Dealer, as the
case may be, their counsel, or the managing underwriters, if any, shall
reasonably object.

 

(b)           Prepare and file with the Commission
such amendments and post-effective amendments to each Shelf Registration or
Exchange Registration Statement, as the case may be, as may be necessary to
keep such Registration Statement continuously effective for the Effectiveness
Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by
applicable law, and as so supplemented

 

10

 

to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus. 
The Issuers shall be deemed not to have used their reasonable best
efforts to keep a Registration Statement effective during the Applicable Period
if they voluntarily take any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law, rule or regulation or unless the Issuers comply with this Agreement, including,
without limitation, the provisions of paragraph 5(j) hereof and the last
paragraph of Section 5.

 

(c)           If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period from whom the Issuers have received written
notice that it will be a Participating Broker-Dealer, notify the selling
Holders of Registrable Notes, and each such Participating Broker-Dealer, their
counsel and the managing underwriters, if any, promptly (but in any event
within two Business Days), and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective amendment,
when the same has become effective (including in such notice a written
statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) 
of the receipt by any Issuer of any notification with respect to the suspension
of the qualification or exemption from qualification of a Registration
Statement or any of the Registrable Notes or the Exchange Notes to be sold by
any Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (iv) of the
happening of any event, the existence of any condition or any information
becoming known that makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in, or amendments or supplements to, such Registration
Statement, Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the Prospectus,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (v) of the Issuers’ reasonable determination
that a post-effective amendment to a Registration Statement would be
appropriate.

 

(d)           If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be

 

11

 

delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, use its reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order preventing
or suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer, for sale in any
jurisdiction, and, if any such order is issued, to use its best efforts to obtain
the withdrawal of any such order at the earliest possible date.

 

(e)           If a Shelf Registration is filed
pursuant to Section 3 and if requested by the managing underwriters, if
any, or the Holders of a majority in aggregate principal amount of the
Registrable Notes being sold in connection with an underwritten offering, (i)
as promptly as practicable incorporate in a prospectus supplement or
post-effective amendment such information or revisions to information therein
relating to such underwriters or selling Holders as the managing underwriters,
if any, or such Holders or their counsel reasonably request to be included or
made therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Issuers have
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make amendments
to such Registration Statement.

 

(f)            If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, furnish to each selling Holder of
Registrable Notes under the Shelf Registration and to each such Participating
Broker-Dealer who so requests in writing and to their respective counsel and
each managing underwriter, if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.

 

(g)           If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer, deliver to each selling
Holder of Registrable Notes under the Shelf Registration or each such
Participating Broker-Dealer, as the case may be, their respective counsel, and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of preliminary prospectus) and each amendment
or supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request in writing; and, subject to the last
paragraph of this Section 5, the Issuers hereby consent to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders of Registrable Notes and each Participating Broker-Dealer and the
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Notes covered by, or the sale by
Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus
and any amendment or supplement thereto.

 

(h)           Prior to any public offering of
Registrable Notes or any delivery of a Prospectus contained in the Exchange
Registration Statement by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, use its reasonable best efforts to
register or qualify, and cooperate with the selling Holders of Registrable
Notes and each such

 

12

 

Participating Broker-Dealer, the
underwriters, if any, and their respective counsel in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Notes or Exchange Notes, as the case may be, for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters, if any, reasonably request in writing; provided
that where Exchange Notes held by Participating Broker-Dealers or Registrable
Notes are offered pursuant to an underwritten offering, counsel to the
underwriters shall, at the cost and expense of the Issuers, perform the Blue
Sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h); keep each such registration or
qualification (or exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement; provided
that no Issuer shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in any such jurisdiction
where it is not then so subject.

 

(i)            If a Shelf Registration is filed
pursuant to Section 3, cooperate with the selling Holders of Registrable Notes,
any Participating Broker-Dealer and the managing underwriter or underwriters,
if any, to facilitate the timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any restrictive
legends (other than as required by the Depository Trust Company) and shall be
in a form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such names
as the managing underwriter or underwriters, if any, or Holders may reasonably
request.

 

(j)            If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(iv) or 5(c)(v) hereof, as promptly as
practicable prepare and (subject to Section 5(a) hereof) file with the
Commission, at the Issuers’ sole expense, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Notes being sold thereunder or to the
purchasers of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Issuers
shall not be required to amend or supplement a Shelf Registration Statement or
Prospectus relating thereto, on no more than two occasions after the Issue
Date, for a reasonable period of time, but not in excess of 90 days in any
consecutive twelve-month period, if the Issuers determine reasonably and in
good faith that such amendment or supplement would require the disclosure of
non-public material information that, in the reasonable judgment of the
Issuers, would be detrimental to Parent and its subsidiaries if so disclosed or
would otherwise materially adversely affect a financing, acquisition,
disposition,

 

13

 

merger or other material transaction.  In such circumstances, the period of
effectiveness of the Exchange Registration Statement provided for in Section
2(b) and the Shelf Registration Statement provided for in Section 3(a) shall
each be extended by the number of days from and including the date of the giving
of a notice pursuant to Section 5(c) to and including the date when the Initial
Purchasers and the Holders of the Registrable Notes shall have received such
amended or supplemented Prospectus pursuant to this Section 5(j).

 

(k)           To the extent the Registrable Notes
are not rated, use its reasonable best efforts to cause the Registrable Notes
covered by a Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration Statement or the
managing underwriter or underwriters, if any.

 

(l)            Prior to the effective date of the
first Registration Statement relating to the Registrable Notes,
(i) provide the Trustee with printed certificates for the Registrable
Notes or the Exchange Notes, as the case may be, in a form eligible for deposit
with the Depository Trust Company and (ii) provide a CUSIP number for the
Registrable Notes or the Exchange Notes, as the case may be.

 

(m)          In connection with an underwritten
offering of Registrable Notes pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of debt
securities similar to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to
expedite or facilitate the registration or the disposition of such Registrable
Notes and, in such connection, (i) make such representations and
warranties to the underwriters, with respect to the business of the Issuers and
their respective subsidiaries and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by issuers to underwriters in
underwritten offerings of debt securities similar to the Notes, and confirm the
same in writing if and when requested; (ii) obtain the opinion of counsel
to the Issuers and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings of debt securities similar to the Notes and such other
matters as may be reasonably requested by managing underwriters;
(iii) obtain “cold comfort” letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriter or underwriters
from the independent certified public accountants of the Issuers (and, if
necessary, any other independent certified public accountants of any subsidiary
of any Issuer or of any business acquired by any Issuer for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such letters to
be in customary form and covering matters of the type customarily covered in
“cold comfort” letters in connection with underwritten offerings of debt
securities similar to the Notes and such other matters as reasonably requested
by the managing underwriter or underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable than those set forth in Section 7 hereof
(or such other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Notes covered by such Registration
Statement and the managing underwriter or underwriters or agents) with respect
to all parties to be indemnified pursuant to

 

14

 

said Section.  The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.

 

(n)           If (1) a Shelf Registration is filed
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, make available for inspection by any
selling Holder of such Registrable Notes being sold, and each Participating
Broker-Dealer, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent retained
by any such selling Holder, each Participating Broker-Dealer, as the case may
be, or underwriter (collectively, the “Inspectors”), at the offices
where normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of each Issuer and its
subsidiaries (collectively, the “Records”) as shall be reasonably
necessary to enable them to exercise any applicable due diligence responsibilities,
and cause the officers, directors and employees of each Issuer and its subsidiaries
to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement, provided, however, that the
foregoing inspection shall be co-ordinated by one counsel (and any local
counsel) designated by the Holders of a majority of the Notes being registered
that is the subject of such Registration Statement.  Records which an Issuer determines, in good faith, to be confidential
and any Records which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, (iii) the
information in such Records has been made generally available to the public
other than as a result of a disclosure or failure to safeguard by such
Inspector or (iv) disclosure of such information is, in the opinion of counsel
for any Inspector, necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially involving
such Inspector and arising out of, based upon, related to, or involving this
Agreement, or any transactions contemplated hereby or arising hereunder. Each
selling Holder of such Registrable Notes and each Participating Broker-Dealer
will be required to agree in writing that information obtained by it as a
result of such inspections shall be deemed confidential (subject to the
exceptions described above) and shall not be used by it as the basis for any
market transactions in the securities of any Issuer unless and until such is
made generally available to the public. 
Each Inspector, each selling Holder of such Registrable Notes and each
Participating Broker-Dealer will be required to further agree that it will,
upon learning that disclosure of such Records is sought in a court of competent
jurisdiction pursuant to clauses (ii) or (iv) of the previous sentence or
otherwise, give notice to the Issuers and allow the Issuers to undertake
appropriate action to obtain a protective order or otherwise prevent  disclosure of the Records deemed
confidential at its expense.

 

(o)           Provide an indenture trustee for the
Registrable Notes or the Exchange Notes, as the case may be, and cause the
Indenture to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Notes; and in connection therewith, cooperate with the trustee
under the Indenture and the Holders of the Registrable Notes, to effect such
changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use its
reasonable best efforts to cause such trustee to execute, all documents as may
be required to effect

 

15

 

such changes, and all other forms and
documents required to be filed with the Commission to enable the Indenture to
be so qualified in a timely manner.

 

(p)           Comply with all applicable rules and
regulations of the Commission and make generally available to its securityholders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 60 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable
Notes are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of Parent
after the effective date of a Registration Statement, which statements shall
cover said 12-month periods.

 

(q)           Upon consummation of the Exchange
Offer or a Private Exchange, obtain an opinion of counsel to the Issuers, in a
form customary for underwritten transactions, addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or the Private Exchange, as the case may be, that the Exchange Notes or the
Private Exchange Notes, as the case may be, the Guarantees and the related
indenture constitute legally valid and binding obligations of the Issuers, enforceable
against the Issuers in accordance with their respective terms.

 

(r)            If the Exchange Offer or a Private
Exchange is to be consummated, upon delivery of the Registrable Notes by
Holders to the Issuers (or to such other Person as directed by the Companies)
in exchange for the Exchange Notes or the Private Exchange Notes, as the case
may be, the Issuers shall mark, or caused to be marked, on such Registrable
Notes that such Registrable Notes are being cancelled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be; in no event
shall such Registrable Notes be marked as paid or otherwise satisfied and in no
event shall the debt evidenced by such Registrable Notes be cancelled by reason
of the events described in this Section 5(r).

 

(s)           Cooperate with each exchanger or
seller of Registrable Notes covered by any Registration Statement and each
underwriter, if any, participating in the disposition of such Registrable Notes
and their respective counsel in connection with any filings required to be made
with the NASD.

 

(t)            Use its reasonable best efforts to
take all other steps reasonably necessary to effect the registration of the
Registrable Notes covered by a Registration Statement contemplated hereby.

 

The Issuers may require each seller of
Registrable Notes as to which any registration is being effected to furnish to
the Issuers such information regarding such seller and the distribution of such
Registrable Notes as the Issuers may, from time to time, reasonably
request.  The Issuers may exclude from
such registration the Registrable Notes of any seller who fails to furnish such
information within a reasonable time after receiving such request.  Each seller as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.

 

16

 

Each Holder of Registrable Notes and each
Participating Broker-Dealer agrees by acquisition of such Registrable Notes or
Exchange Notes to be sold by such Participating Broker-Dealer, as the case may
be, that, upon receipt of any notice from the Issuers of the happening of any
event of the kind described in Section 5(c)(ii), 5(c)(iv) or 5(c)(v), such
Holder will forthwith discontinue disposition of such Registrable Notes covered
by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, and, in each
case, dissemination of such Prospectus until such Holder’s or Participating
Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(j), or until it is advised in writing (the “Advice”)
by the Companies that the use of the applicable Prospectus may be resumed, and
has received copies of any amendments or supplements thereto.  In the event the Issuers shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or Exchange Notes to
be sold by such Participating Broker-Dealer, as the case may be, shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 5(j) or (y) the Advice.

 

6.             Registration Expenses

 

All fees and expenses incident to the
performance of or compliance with this Agreement by the Issuers shall be borne
by the Issuers whether or not the Exchange Offer or a Shelf Registration is
filed or becomes effective, including, without limitation, (i) all registration
and filing fees (including, without limitation, (A) fees with respect to
filings required to be made with the NASD in connection with an underwritten
offering and (B) fees and expenses of compliance with state securities or
Blue Sky laws (including, without limitation, reasonable fees and disbursements
of one counsel (and any local counsel) in connection with Blue Sky
qualifications of the Registrable Notes or Exchange Notes and determination of
the eligibility of the Registrable Notes or Exchange Notes for investment under
the laws of such jurisdictions (x) where the holders of Registrable Notes
are located, in the case of the Exchange Notes, or (y) as provided in
Section 5(h) hereof, in the case of Registrable Notes or Exchange Notes to be
sold by a Participating Broker-Dealer during the Applicable Period)),
(ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form
eligible for deposit with The Depository Trust Company and of printing prospectuses
if the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, or by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in any Registration Statement or by
any Participating Broker-Dealer, as the case may be, (iii) reasonable
messenger, telephone and delivery expenses incurred in connection with the Exchange
Registration Statement and any Shelf Registration, (iv) fees and
disbursements of counsel for the Issuers and fees and disbursements of one
special counsel (and any local counsel) for the Initial Purchasers and the
sellers of Registrable Notes, (v) fees and disbursements of all independent
certified public accountants referred to in Section 5(m)(iii) (including,
without limitation, the expenses of any special audit and “cold comfort”
letters required by or incident to such performance), (vi) rating agency
fees, (vii) Securities Act liability insurance, if any Issuer desires such
insurance, (viii) fees and expenses of all other Persons retained by the
Issuers, (ix) internal expenses of the Issuers (including, without
limitation, all salaries and expenses of officers and employees of the Issuers
performing legal or accounting duties), (x) the expense of any annual or

 

17

 

special audit, (xi) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.

 

7.             Indemnification

 

(a)           Each of the Issuers jointly and
severally agrees to indemnify and hold harmless each Holder of Registrable
Notes and each Participating Broker-Dealer, the officers, directors, employees
and agents of each such Person, and each Person, if any, who controls any such
Person within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a “Participant”), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the reasonable legal fees and other reasonable expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (as amended or supplemented if the Issuers shall have
furnished any amendments or supplements thereto) or caused by, arising out of
or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Participant
furnished to the Issuers in writing by or on behalf of such Participant
expressly for use therein; provided, however, that in respect of
a Shelf Registration, none of the Issuers will be liable to any Participant
with respect to any such untrue statement or omission made in any preliminary
prospectus that is corrected in the Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage, expense or
liability purchased Registrable Notes from such Participant in reliance upon
the preliminary prospectus but was not sent or given a copy of the
Prospectus(as amended or supplemented) at or prior to the written confirmation
of the sale of the Registrable Notes to such person in any case where such deliver
of such Prospectus (as so amended or supplemented) is required by the
Securities Act and such loss, claim, damage, expense or liability is caused by
such untrue statement or omission, unless such failure to deliver such
Prospectus (as amended or supplemented) was a result of non-compliance by the
Issuers with Section 5 of this Agreement, provided, further, that this
limitation of liability applies only where the misstatement or omission has
been brought to the attention of the Participants and their counsel prior to
pricing and on a timely basis.

 

(b)           Each Participant will be required to
agree, severally and not jointly, to indemnify and hold harmless each Issuer,
its directors and officers and each Person who controls each Issuer within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Issuers to
each Participant, but only with reference to information relating to such
Participant furnished to the Issuers in writing by such Participant expressly
for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus.  The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Notes or Exchange Notes giving rise to such obligations.

 

18

 

(c)           If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such Person (the “Indemnified
Person”) shall promptly notify the Person against whom such indemnity may
be sought (the “Indemnifying Person”) in writing, and the Indemnifying
Person, upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may reasonably designate in such proceeding
and shall pay the reasonable fees and expenses actually incurred by such
counsel related to such proceeding; provided, however, that the
failure to so notify the Indemnifying Person shall not relieve it of any
obligation or liability which it may have under Section 7 (a) or 7 (b) above
except to the extent that the Indemnifying Person is unaware of the commencement
of such action and such omission results in the forfeiture by the Indemnifying
Person of substantial rights and defenses. 
In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed in writing to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and the Indemnified
Person shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other Indemnified Persons that are different
from or in addition to those available to any such Indemnifying Person.  It is understood that, unless there is a
conflict among Indemnified Persons, the Indemnifying Person shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. 
Any such separate firm for the Participants and control Persons of
Participants shall be designated in writing by Participants who sold a majority
in interest of Registrable Notes sold by all such Participants and any such
separate firm for the Issuers, their respective directors, officers and such
control Persons of the Issuers shall be designated in writing by the Companies.  The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there is a final non-appealable judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment.  Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested an Indemnifying
Person to reimburse the Indemnified Person for reasonable fees and expenses
actually incurred by counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not
have reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement; provided, however, that the
Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Person is contesting, in
good faith, the request for reimbursement and all other fees and expenses of
counsel not so contested shall have been reimbursed.  No Indemnifying Person shall, without the prior written consent
of the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity

 

19

 

could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional
release of such Indemnified Person, in form and substance satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of an Indemnified Person.

 

(d)           If the indemnification provided for
in the first and second paragraphs of this Section 7 is unavailable to, or
insufficient to hold harmless, an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraphs, in lieu of indemnifying such Indemnified Person
thereunder and in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Person or Persons
on the one hand and the Indemnified Person or Persons on the other in
connection with the statements or omissions (or alleged statements or
omissions) that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable considerations.  The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Issuers on the one
hand or by the Participants or such other Indemnified Person, as the case may
be, on the other, the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission and any other
equitable considerations appropriate under the circumstances.

 

(e)           The parties agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro  rata allocation (even if the Participants were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses actually incurred by such Indemnified Person in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 7, in no
event shall a Participant be required to contribute any amount in excess of the
amount by which proceeds received by such Participant from sales of Registrable
Notes or Exchange Notes, as the case may be, exceeds the amount of any damages
that such Participant has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

(f)            The indemnity and contribution
agreements contained in this Section 7 will be in addition to any
liability which the Indemnifying Persons may otherwise have to the Indemnified
Persons referred to above.

 

8.             Rules 144 and 144A

 

Each of the Issuers covenants that it will
file the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the

 

20

 

Commission thereunder in a timely manner and,
if at any time it is not required to file such reports, it will, upon the
request of any Holder of Registrable Notes, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A under the Securities Act. Each of the Issuers further covenants, for so
long as any Registrable Notes remain outstanding, to make available to any
Holder or beneficial owner of Registrable Notes in connection with any sale
thereof and any prospective purchaser of such Registrable Notes from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Registrable Notes pursuant
to Rule 144A, unless the Issuers are subject to Sections 15(d) or 13 of the
Exchange Act, or exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act.

 

9.             Underwritten Registrations

 

If any of the Registrable Notes covered by
any Shelf Registration are to be sold in an underwritten offering, the investment
banker or investment bankers and manager or managers that will manage the
offering will be selected by the Holders of a majority in aggregate principal
amount of such Registrable Notes included in such offering and reasonably
acceptable to the Issuers.

 

No Holder of Registrable Notes may
participate in any underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder’s Registrable Notes on the basis provided
in any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.

 

10.           Miscellaneous

 

(a)           Remedies.  In the event of a breach by any Issuer of
any of its obligations under this Agreement, each Holder of Registrable Notes
and each Participating Broker-Dealer holding Exchange Notes, in addition to
being entitled to exercise all rights provided herein, in the Indenture or, in
the case of an Initial Purchaser, in the Purchase Agreement, or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement.  Each Issuer
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

 

(b)           No
Inconsistent Agreements.  None of
the Issuers has entered, as of the date hereof, and none of the Issuers shall
enter, after the date of this Agreement, into any agreement with respect to any
of its securities that is inconsistent with the rights granted to the Holders
of Registrable Notes in this Agreement or otherwise conflicts with the
provisions hereof.  None of the Issuers
has entered and none of the Issuers shall enter into any agreement with respect
to any of its securities which will grant to any Person piggy-back rights with
respect to a Registration Statement.

 

21

 

(c)           Adjustments
Affecting Registrable Notes.  None
of the Issuers shall, directly or indirectly, take any action with respect to
the Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.

 

(d)           Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Issuers and (A) the Holders of not less
than a majority in aggregate principal amount of the then outstanding Registrable
Notes and (B) in circumstances that would adversely affect Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Notes held by all
Participating Broker-Dealers; provided, however, that Section 7 and this
Section 10(d) may not be amended, modified or supplemented without the
prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant
to any Registration Statement). 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being tendered pursuant
to the Exchange Offer or sold pursuant to a Registration Statement and that
does not directly or indirectly affect, impair, limit or compromise the rights
of other Holders of Registrable Notes may be given by Holders of at least a
majority in aggregate principal amount of the Registrable Notes being tendered
or being sold by such Holders pursuant to such Registration Statement.

 

(e)           Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, next-day air courier or telecopier:

 

(i)            if to a Holder of Registrable Notes
or any Participating Broker-Dealer, at the most current address of such Holder
or Participating Broker-Dealer, as the case may be, set forth on the records of
the registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:

 

	
   

  	
   

  	
  CIBC WORLD
  MARKETS CORP.

  
	
   

  	
   

  	
  SCOTIA CAPITAL
  (USA) INC.

  
	
   

  	
   

  	
  NBF
  SECURITIES (USA) CORP.

  
	
   

  	
   

  	
  c/o CIBC
  World Markets Corp.

  
	
   

  	
   

  	
  425
  Lexington Avenue

  
	
   

  	
   

  	
  3rd Floor

  
	
   

  	
   

  	
  New York,
  New York  10017

  
	
   

  	
   

  	
  Facsimile
  No.:  (212) 885-4998

  
	
   

  	
   

  	
  Attention:  Leveraged Finance Group

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy
  to:

  

 

22

 

	
   

  	
   

  	
  CAHILL
  GORDON & REINDEL LLP

  
	
   

  	
   

  	
  80 Pine
  Street

  
	
   

  	
   

  	
  New York,
  New York  10005

  
	
   

  	
   

  	
  Facsimile
  No.:  (212) 269-5420

  
	
   

  	
   

  	
  Attention:  Roger Meltzer, Esq.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  if to the
  Initial Purchasers, at the address specified in Section 10(e)(1);

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  if to the
  Issuers, as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALIMENTATION
  COUCHE-TARD INC.

  
	
   

  	
   

  	
  1600 St.
  Martin Boulevard West

  
	
   

  	
   

  	
  Tower B,
  Suite 280

  
	
   

  	
   

  	
  Laval,
  Quebec, Canada (H7G 4S7)

  
	
   

  	
   

  	
  Attention:
  Richard Fortin

  
	
   

  	
   

  	
  Facsimile
  No.: (450) 662-7537

  
	
   

  	
   

  	
   

  
	
   

  	
  with copies
  to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DAVIES WARD
  PHILLIPS & VINEBERG LLP

  
	
   

  	
   

  	
  1501 McGill
  College Avenue

  
	
   

  	
   

  	
  26th Floor,
  Montreal Canada (H3A 3N9)

  
	
   

  	
   

  	
  Attention:  Maryse Bertrand

  
	
   

  	
   

  	
  Facsimile
  No. (514) 841-6499

  

 

All such notices and communications shall be
deemed to have been duly given:  when
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; one Business Day after being
timely delivered to a next-day air courier guaranteeing overnight delivery; and
when receipt is acknowledged by the addressee, if telecopied.

 

Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee under the Indenture at the address specified in such Indenture.

 

(f)            Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto and the Holders; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign holds Registrable
Notes.

 

(g)           Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

(h)           Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

23

 

(i)            Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT.

 

(j)            Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

 

(k)           Notes
Held by any Issuer or Its Affiliates. 
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by any Issuer
or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

 

(l)            Third
Party Beneficiaries.  Holders of
Registrable Notes and Participating Broker-Dealers are intended third party
beneficiaries of this Agreement and this Agreement may be enforced by such
Persons.

 

(m)          Entire
Agreement.  This Agreement, together
with the Purchase Agreement and the Indenture, is intended by the parties as a
final and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein and any
and all prior oral or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and memoranda among
the Initial Purchasers on the one hand and Issuers on the other, or between or
among any agents, representatives, parents, subsidiaries, affiliates, predecessors
in interest or successors in interest with respect to the subject matter hereof
and thereof are merged herein and replaced hereby.

 

(n)           Joint
and Several Obligations. All of the obligations of the Issuers hereunder
shall be joint and several obligations of each of them.

 

(o)           Agent for Service; Submission to
Jurisdiction; Waiver of Immunities. 
By the execution and delivery of this Agreement, each Issuer (i)
acknowledges that such Issuer has, by separate written instrument, irrevocably
designated and appointed CT Corporation, System (“CT”) (and any successor
entity), as its authorized agent upon which process may be served in any suit
or proceeding arising out of or relating to this Agreement the Notes and the
Guarantees or the Exchange Notes that may be instituted in any federal or state
court in the State of New York or brought under Federal or state securities
laws, and acknowledges that CT has accepted

 

24

 

such designation, (ii) irrevocably submits to
the jurisdiction of any such court in any such suit or proceeding, and (iii)
agrees that service of process upon CT and written notices of said service to
such Issuer in accordance with Section 10(e) hereof shall be deemed effective
service of process upon it in any such suit or proceeding.  Each Issuer further agrees to take any
reasonable all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of CT in full force and effect so long as any of the Notes and the
Guarantees shall be outstanding; provided, however, that such
Issuer may, by written notice to the Initial Purchasers, designate such
additional or alternative agent for service of process under this
Section (o) that (i) maintains an office located in the Borough of
Manhattan, City of New York in the State of New York and (ii) is a corporate
service company which acts as agent for service of process for other persons in
the ordinary course of its business. 
Such written notice shall identify the name of such agent for process
and the address of the office of such agent for process in the Borough of
Manhattan, City of New York, State of New York.

 

To the extent
that any Issuer has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under
each of this Agreement, the Notes and the Guarantees and the Exchange Notes.  In addition, each Issuer irrevocably waives
and agrees not to assert, by way of motion, as a defense, or otherwise in any
such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of the above-mentioned courts for any reason whatsoever, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue for such suit is improper, or that this Agreement, the Notes and the
Guarantees or the Exchange Notes or the subject matter hereof or thereof may
not be enforced in such courts.

 

The Issuers
and the Initial Purchasers agree that a final judgment in any such suit, action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this Section (o) shall
affect the right of the Trustee to serve legal process in any other manner
permitted by law or affect the right of the Trustee to bring any action or
proceeding against any Issuer or its property in the courts of any other
jurisdictions.

 

(p)           Judgment Currency.  The Issuers, jointly and severally, agree to
indemnify and hold harmless each Holder (including each Initial Purchaser and
each affiliate thereof and, with respect to any Prospectus delivery as contemplated
by Section 5(c) hereof, each Participating Broker-Dealer), the directors,
officers, employees and agents of each such Holder and each person who controls
any such Holder within the meaning of either the Securities Act or the Exchange
Act against any loss incurred by such indemnified party as a result of any
judgment or order being given or made in favor of such indemnified party for
any amount due under this Agreement and such judgment or order being expressed
and paid in a currency (the “Judgment Currency”) other than United
States dollar and as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the
Judgment Currency for the purpose of such judgment or order and (ii) the spot
rate of exchange in The City of New York at which such indemnified party on the
date of payment of such judgment or order is able to purchase United States
dollars with the amount of the Judgment Currency actually received by such
indemnified party.  The foregoing
indemnity shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid.  The
term “spot rate of exchange” shall include

 

25

 

any premiums and costs of exchange payable in
connection with the purchase of, or conversion into, United States dollars.

 

(q)           ACT Financial Trust. With
respect to ACT Financial Trust only, the trustee is signing this Agreement in
its capacity as trustee of ACT Financial Trust and not in any other capacity
and ACT Financial Trust, solely, shall be responsible for the performance of
ACT Financial Trust’s obligations under this Agreement and the trust property,
solely, shall be subject to levy or execution in satisfaction of such
obligations.

 

26

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written
above.

 

	
   

  	
  COMPANIES:

  
	
   

  	
   

  
	
   

  	
  COUCHE-TARD U.S. L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Richard F. Fortin

  
	
   

  	
   

  	
  Name:

  	
  Richard Fortin

  
	
   

  	
   

  	
  Title:

  	
  Authorized Person

  
	
   

  	
   

  
	
   

  	
  COUCHE-TARD FINANCING CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Richard F. Fortin

  
	
   

  	
   

  	
  Name:

  	
  Richard Fortin

  
	
   

  	
   

  	
  Title:

  	
  Authorized Person

  

 

S-1

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  ALIMENTATION COUCHE-TARD INC.

  
	
   

  	
  DÉPAN-ESCOMPTE COUCHE-TARD INC.

  
	
   

  	
  COUCHE-TARD INC.

  
	
   

  	
  MAC’S CONVENIENCE STORES INC.

  
	
   

  	
  COUCHE-TARD/MAC’S L.P.

  
	
   

  	
  DUNKIN DONUTS MASTER

  
	
   

  	
      FRANCHISEE QUEBEC
  INC.

  
	
   

  	
  3053854 NOVA SCOTIA COMPANY

  
	
   

  	
  3055854 NOVA SCOTIA COMPANY

  
	
   

  	
  MAC’S CONVENIENCE STORES LLC

  
	
   

  	
  THE CIRCLE K CORPORATION

  
	
   

  	
  CIRCLE K STORES INC.

  
	
   

  	
  CIRCLE K ENTERPRISES INC.

  

 

 

	
   

  	
  By: 

  	
      /s/ Richard F. Fortin

  
	
   

  	
  Name:

  	
  Richard Fortin

  
	
   

  	
  Title:

  	
  Authorized Person

  
				

 

S-2

 

	
   

  	
  ACT FINANCIAL TRUST

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ P. Jean Cléroux

  	
   

  
	
   

  	
  P. Jean Cléroux, as Trustee on behalf of
  ACT Financial Trust

  

 

S-3

 

	
   

  	
  CIBC WORLD MARKETS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian S. Perman

  
	
   

  	
   

  	
  Name: Brian S. Perman

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SCOTIA CAPITAL (USA) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Pinon

  
	
   

  	
   

  	
  Name: Frank Pinon

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NBF SECURITIES (USA) CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gerald
  Wetzel

  
	
   

  	
  Name:

  	
  Gerald Wetzel

  
	
   

  	
  Title:

  	
  Chief Compliance Officer

  
				

 

S-4Exhibit
10.1

 

STOCK PURCHASE AGREEMENT

 

BETWEEN

 

ALIMENTATION COUCHE-TARD
INC.

 

AND

 

CONOCOPHILLIPS COMPANY

 

DATED AS OF

 

OCTOBER 3, 2003

 

 

TABLE
OF CONTENTS

 

	
  Article I

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  Article II

  
	
  SALE AND PURCHASE
  OF THE COMPANY STOCK

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Sale
  and Purchase of the Company Shares

  	
   

  
	
  2.2

  	
  Delivery
  of the Company Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  Article III

  
	
  CONSIDERATION

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Amount and Form of Consideration

  	
   

  
	
  3.2

  	
  Payments
  at Closing

  	
   

  
	
  3.3

  	
  Working
  Capital Adjustment

  	
   

  
	
  3.4

  	
  Accounts Receivable

  	
   

  
	
  3.5

  	
  Long-Term Debt and Capital Lease
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  IV

  
	
  THE CLOSING

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Closing
  Date

  	
   

  
	
  4.2

  	
  Proceedings at Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  V

  
	
  REPRESENTATIONS
  AND WARRANTIES OF SELLER

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organization and Good Standing

  	
   

  
	
  5.2

  	
  Authorization

  	
   

  
	
  5.3

  	
  Ownership of Capital Stock

  	
   

  
	
  5.4

  	
  Conflicts;
  Consents

  	
   

  
	
  5.5

  	
  Financial
  Statements

  	
   

  
	
  5.6

  	
  Ordinary and Usual Course of Business;
  Material Adverse Effect; Material Tax Elections

  	
   

  
	
  5.7

  	
  Taxes

  	
   

  
	
  5.8

  	
  Real Property

  	
   

  
	
  5.9

  	
  Tangible
  Personal Property

  	
   

  
	
  5.10

  	
  Intellectual Property

  	
   

  
	
  5.11

  	
  Contracts

  	
   

  
	
  5.12

  	
  Employee
  Benefits

  	
   

  
	
  5.13

  	
  Labor

  	
   

  

 

i

 

	
  5.14

  	
  Litigation

  	
   

  
	
  5.15

  	
  Compliance

  	
   

  
	
  5.16

  	
  Insurance

  	
   

  
	
  5.17

  	
  Brokers

  	
   

  
	
  5.18

  	
  Absence of Certain Business
  Practices

  	
   

  
	
  5.19

  	
  Affiliate Transactions

  	
   

  
	
  5.20

  	
  Circle
  K Licensing

  	
   

  
	
  5.21

  	
  Retail Outlets and Franchises

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  VI

  
	
  REPRESENTATIONS
  AND WARRANTIES OF PARENT

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Organization and Good Standing

  	
   

  
	
  6.2

  	
  Authority

  	
   

  
	
  6.3

  	
  Conflicts; Consents

  	
   

  
	
  6.4

  	
  Litigation

  	
   

  
	
  6.5

  	
  Brokers

  	
   

  
	
  6.6

  	
  Financing Commitments

  	
   

  
	
  6.7

  	
  Acquisition of the Company Shares for
  Investment; Ability to Evaluate and Bear Risk

  	
   

  
	
  6.8

  	
  Acknowledgement of Limitations of
  Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  Article VII

  
	
  COVENANTS OF SELLER
  AND PURCHASER

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Access
  to Properties and Records

  	
   

  
	
  7.2

  	
  Conduct of Business

  	
   

  
	
  7.3

  	
  Efforts

  	
   

  
	
  7.4

  	
  Non-Solicitation of Employees

  	
   

  
	
  7.5

  	
  Pre-Closing Transfers from Seller to the
  Company

  	
   

  
	
  7.6

  	
  Pre-Closing Transfers from the
  Company to Seller

  	
   

  
	
  7.7

  	
  Pre-Closing Transfers of
  Contracts

  	
   

  
	
  7.8

  	
  Financing

  	
   

  
	
  7.9

  	
  Capital Expenditure

  	
   

  
	
  7.10

  	
  Monthly Store Financial Statements

  	
   

  

 

ii

 

	
  7.11

  	
  Further
  Assurances

  	
   

  
	
  7.12

  	
  Confidentiality

  	
   

  
	
  7.13

  	
  Publicity

  	
   

  
	
  7.14

  	
  Disclosure

  	
   

  
	
  7.15

  	
  Further Information

  	
   

  
	
   

  	
   

  	
   

  
	
  Article VIII

  
	
  TAX MATTERS

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Apportionment of Taxes

  	
   

  
	
  8.2

  	
  Tax Returns

  	
   

  
	
  8.3

  	
  Cooperation

  	
   

  
	
  8.4

  	
  Tax Indemnification

  	
   

  
	
  8.5

  	
  Refunds and Tax Benefits

  	
   

  
	
  8.6

  	
  Survival

  	
   

  
	
  8.7

  	
  Exclusive
  Remedy

  	
   

  
	
  8.8

  	
  Contests

  	
   

  
	
  8.9

  	
  Tax Treatment of Price Adjustment and
  Indemnification

  	
   

  
	
  8.10

  	
  Waiver of Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  IX

  
	
  PERSONNEL,
  EMPLOYMENT ARRANGEMENTS AND EMPLOYEE BENEFITS

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Offer
  of Employment

  	
   

  
	
  9.2

  	
  Continuation Period

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  X

  
	
  CONDITIONS
  PRECEDENT TO OBLIGATIONS TO CLOSE

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Conditions to Obligation of Each Party
  to Close

  	
   

  
	
  10.2

  	
  Conditions to Parent’s Obligation to
  Close

  	
   

  
	
  10.3

  	
  Conditions to Seller’s Obligation to
  Close

  	
   

  
	
   

  	
   

  	
   

  
	
  Article
  XI

  
	
  CLOSING

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Deliveries by Seller to Parent

  	
   

  
	
  11.2

  	
  Deliveries by Parent to Seller

  	
   

  

 

iii

 

	
  Article XII

  
	
  INDEMNIFICATION AND
  RELATED MATTERS

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Indemnification
  by Seller

  	
   

  
	
  12.2

  	
  Indemnification by Parent

  	
   

  
	
  12.3

  	
  Procedures for
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  Article XIII

  
	
  TERMINATION

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Termination

  	
   

  
	
  13.2

  	
  Liabilities After Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  Article XIV

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Entire
  Agreement

  	
   

  
	
  14.2

  	
  Governing
  Law

  	
   

  
	
  14.3

  	
  Arbitration

  	
   

  
	
  14.4

  	
  Severability

  	
   

  
	
  14.5

  	
  Expenses

  	
   

  
	
  14.6

  	
  Table
  of Contents and Headings

  	
   

  
	
  14.7

  	
  Notices

  	
   

  
	
  14.8

  	
  Binding Effect; Beneficiaries;
  Assignment

  	
   

  
	
  14.9

  	
  Amendments

  	
   

  
	
  14.10

  	
  Counterparts

  	
   

  
	
  14.11

  	
  Language

  	
   

  
	
  14.12

  	
  No Presumption

  	
   

  
	
  14.13

  	
  Interpretation

  	
   

  

 

iv

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Financial Information

  	
   

  
	
   

  	
  6.6(i)

  	
  Debt Commitment

  	
   

  
	
   

  	
  6.6(ii)

  	
  Equity Commitment

  	
   

  
	
   

  	
  6.6(iii)

  	
  Equity Backstop

  	
   

  
	
   

  	
  11.1(b)

  	
  Transition Services
  Agreement

  	
   

  
	
   

  	
  11.1(c)

  	
  Phillips 66 Trademark
  License

  	
   

  
	
   

  	
  11.1(d)

  	
  Union 76 Trademark
  License

  	
   

  
	
   

  	
  11.1(e)

  	
  Franchise License

  	
   

  
	
   

  	
  11.1(f)

  	
  Conversion Agreement
  (East Coast)

  	
   

  
	
   

  	
  11.1(g)

  	
  Conversion Agreement
  (West Coast)

  	
   

  
	
   

  	
  11.1(h)

  	
  Supply Agreement

  	
   

  
	
   

  	
  11.1(i)

  	
  Environmental
  Liabilities Agreement

  	
   

  
	
   

  	
  11.1(j)

  	
  Credit Card Services
  Agreement

  	
   

  
	
   

  	
  11.1(k)

  	
  Real Estate Indemnity
  Agreement

  	
   

  
	
   

  	
  11.1(l)

  	
  Reseller Agreement

  	
   

  
	
   

  	
  11.1(m)

  	
  Car Wash Trademark
  License Agreement

  	
   

  
	
   

  	
  11.1(n)

  	
  Tempe Office Lease

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Permitted Liens

  	
   

  
	
   

  	
  1.2

  	
  Seller Affiliate
  Employees

  	
   

  
	
   

  	
  3.3(a)

  	
  Base Working Capital

  	
   

  
	
   

  	
  5.1(a)

  	
  Company capital stock

  	
   

  
	
   

  	
  5.1(b)

  	
  Subsidiaries of the
  Company

  	
   

  
	
   

  	
  5.4(a)

  	
  Contractual consents,
  approvals and waivers to be obtained by Seller

  	
   

  
	
   

  	
  5.4(b)

  	
  Governmental and
  regulatory consents, approvals and waivers to be obtained by Seller

  	
   

  
	
   

  	
  5.5(a)

  	
  2002 Financial
  Statements

  	
   

  
	
   

  	
  5.5(b)

  	
  June 30, 2003 financial
  statements

  	
   

  
	
   

  	
  5.6

  	
  Conduct of business
  other than in the ordinary course of business since June 30, 2003

  	
   

  
	
   

  	
  5.7

  	
  Tax disclosures

  	
   

  
	
   

  	
  5.7(c)

  	
  Tax Returns

  	
   

  
	
   

  	
  5.8(a)(i)

  	
  Real property owned by
  the Company

  	
   

  
	
   

  	
  5.8(a)(ii)

  	
  Real property to be
  transferred to the Company

  	
   

  
	
   

  	
  5.8(b)

  	
  Exception to title

  	
   

  
	
   

  	
  5.8(c)(i)

  	
  Real property leased by
  the Company

  	
   

  
	
   

  	
  5.8(c)(ii)

  	
  Real property to be
  leased by the Company

  	
   

  
	
   

  	
  5.8(d)

  	
  Exceptions to leases

  	
   

  
	
   

  	
  5.10(a)(i)

  	
  Trademarks owned by the
  Company

  	
   

  
	
   

  	
  5.10(a)(ii)

  	
  Trademarks to be
  transferred to the Company

  	
   

  
	
   

  	
  5.10(b)

  	
  Trademark exceptions

  	
   

  
	
   

  	
  5.11(a)

  	
  Material Contracts

  	
   

  

 

v

 

	
   

  	
  5.11(b)

  	
  Material Contracts
  exceptions

  	
   

  
	
   

  	
  5.11(c)

  	
  Additional Material
  Contracts exceptions

  	
   

  
	
   

  	
  5.12(a)

  	
  Employee Benefit Plans

  	
   

  
	
   

  	
  5.12(b)

  	
  Employee Benefit Plans
  subject to Title IV or Section 302 of ERISA or Section 412 of the Code

  	
   

  
	
   

  	
  5.12(c)

  	
  Legal Proceedings
  asserted or instituted against the Company Plans

  	
   

  
	
   

  	
  5.13

  	
  Labor or collective
  bargaining agreements; pending or threatened labor disputes

  	
   

  
	
   

  	
  5.13(d)

  	
  WARN

  	
   

  
	
   

  	
  5.14(b)

  	
  Pending or threatened
  Legal Proceedings against the Company

  	
   

  
	
   

  	
  5.15

  	
  Noncompliance with
  federal, state, local and foreign laws and regulations

  	
   

  
	
   

  	
  5.21(a)

  	
  Retail Outlets

  	
   

  
	
   

  	
  5.21(b)

  	
  U.S. Franchises

  	
   

  
	
   

  	
  5.21(c)

  	
  Non U.S. Franchises

  	
   

  
	
   

  	
  5.21(d)

  	
  Stores Franchised to
  Seller

  	
   

  
	
   

  	
  7.2

  	
  Conduct of business
  other than in the ordinary course of business between signing of the
  Agreement and Closing

  	
   

  
	
   

  	
  7.5

  	
  Additional Assets

  	
   

  
	
   

  	
  7.6

  	
  Excluded Assets

  	
   

  
	
   

  	
  7.7

  	
  Additional Material
  Contracts

  	
   

  

 

vi

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT, dated as of October 3, 2003
(together with the Schedules but not the Exhibits hereto, this “Agreement”),
between Alimentation Couche-Tard Inc. (“Parent”), a corporation
organized under the laws of the Province of Québec, Canada, and ConocoPhillips
Company (“Seller”), a Delaware corporation.

 

W  I
T  N  E  S  S  E  T  H :

 

WHEREAS, Seller owns 1,000 shares of the common stock,
par value $0.01 per share (collectively, the “Company Shares”), of The
Circle K Corporation (the “Company”), a Delaware corporation, which
shares constitute all of the issued and outstanding shares of the Company; and

 

WHEREAS, upon the terms and subject to the conditions
hereinafter set forth, Seller will sell to 9103-4793 Delaware LP, a limited
partnership wholly-owned, directly or indirectly, by Parent and organized under
the laws of the State of Delaware (“Purchaser”), and Parent will cause
Purchaser to purchase from Seller, the Company Shares;

 

NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants and agreements hereinafter
set forth, the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

“AAA” has the meaning set forth in
Section 14.3.

 

“Accounting Firm” means Deloitte Touche or, if
such firm shall decline or is unable to act or is not, at the time of the
submission, independent of Parent, Seller and their respective Affiliates,
another independent accounting firm of international reputation mutually
acceptable to Parent and Seller.

 

“Accounts Receivable Deficit” has the meaning
set forth in Section 3.4(b).

 

“Accounts Receivable Excess” has the meaning
set forth in Section 3.4(b).

 

“Accounts Receivable Statement” has the meaning
set forth in Section 3.4(b).

 

“Additional Assets” has the meaning set forth
in Section 7.5.

 

“Additional Material Contracts” has the meaning
set forth in Section 7.7.

 

“Adjusted Cash Consideration” means (i) the
Cash Consideration, minus (ii) the Environmental Liabilities Adjustment, minus
(iii) the Store Closing Adjustment, minus (iv) the Estimated Debt Adjustment,
plus or minus (v) the Estimated Working Capital Adjustment, plus

 

 

or minus (vi) the Final
Debt Adjustment, plus or minus (vii) the Final Working Capital Adjustment.

 

“Affiliate” means, as to any Person, any other
Person, which, directly or indirectly, controls, is controlled by, or is under
common control with, such Person.  For
the purposes of this definition, “control” means the possession of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the
opening paragraph.

 

“Antitrust Authorities” has the meaning set
forth in Section 7.3(b).

 

“Applicable Laws” means (i) all federal,
provincial, state or local laws, regulations and rules (to the extent having
the force of law) of any Governmental Body in the United States, Canada or any
other jurisdiction, (ii) principles of common law and (iii) all orders,
rulings, judgments, decisions, awards, injunctions and decrees of any
Governmental Body in the United States, Canada or any other jurisdiction, in
each case, binding on the Person or assets referred to in the context in which
the word is used, whether preliminary or final.

 

“Base Working Capital” has the meaning set
forth in Section 3.3(a).

 

“Benefit Plan” means any benefit plan as
defined by Section 3(3) of ERISA and all other bonus, incentive-compensation,
deferred-compensation, profit-sharing, stock-option, stock-appreciation-right,
stock-bonus, stock-purchase, employee-stock-ownership, savings, severance,
change-in-control, supplemental-unemployment, layoff, salary-continuation,
retirement, pension, health, life-insurance, disability, accident,
group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan,
and any other employee compensation or benefit plan.

 

“Business Day” means a day (excluding Saturday
and Sunday) on which banks generally are open for the transaction of business
in New York City and Montreal.

 

“Car Wash Trademark License Agreement” has the
meaning set forth in Section 11.1(m).

 

“Cash Consideration” means $865,000,000.

 

“Circle K Licensing Company” means Circle K
Licensing Company, Inc., a Texas corporation.

 

“Closing” has the meaning set forth in
Section 4.1.

 

“Closing Date” means the date of the Closing.

 

“Closing Date Debt” has the meaning set forth
in Section 3.5.

 

“Closing Date Working Capital” has the meaning
set forth in Section 3.3(c).

 

2

 

“Code” means the Internal Revenue Code of 1986,
as amended, and any citations thereto, or to the Treasury Regulations
promulgated thereunder, and shall include any amendments or successor
provisions thereto.

 

“Collected Closing Date Accounts Receivable”
has the meaning set forth in Section 3.4(b).

 

“Common Claim” means any claim (i) made with
respect or relating to a Store pursuant to Section 12.1(a)(i) or 12.2(a)(i) and
involving an amount in excess of $20,000 and (ii) arising from the same cause
that results in the same claim being made with respect to at least 99 other
Stores in an amount in excess of $20,000 per Store.

 

“Company” has the meaning set forth in the
recitals.

 

“Company Employees” means the Company Store
Employees and the Seller Affiliate Employees who accept the Purchaser’s offer
of employment in accordance with Section 9.1.

 

“Company Plans” has the meaning set forth in
Section 5.12(a).

 

“Company Shares” has the meaning set forth in
the recitals.

 

“Company Store Employees” means those
individuals who are employed by the Company or its Subsidiaries in Store
positions (from the level of store manager and below) immediately prior to the
Closing Date.

 

“Confidential Information” has the meaning set
forth in Section 7.12.

 

“Confidentiality Agreement” means the
confidentiality agreement, dated as of May 8, 2003, by and between Seller and
Parent.

 

“Contest” has the meaning set forth in Section
8.8.

 

“Continuation Period” has the meaning set forth
in Section 9.2(a).

 

“Contract” means any written contract, lease of
personal property, agreement, undertaking, commitment, understanding or
promise, but shall not include leases of real property.

 

“Conversion Agreement (East Coast)” has the
meaning set forth in Section 11.1(f).

 

“Conversion Agreement (West Coast)” has the
meaning set forth in Section 11.1(g).

 

“Credit Card Services Agreement” has the meaning
set forth in Section 11.1(j).

 

“Debt Commitment” has the meaning set forth in
Section 6.6(a).

 

3

 

“Defined Benefit Plan” has the meaning set
forth in Section 5.12(b).

 

“Determination Date” has the meaning set forth
in Section 3.4(b).

 

“Employee Benefit Plan” has the meaning set
forth in Section 5.12(a).

 

“Environmental Law” means any Applicable Law,
order or permit relating to 
(i) pollution, protection or cleanup of the environment;
(ii) the use, treatment, storage, disposal, handling, manufacturing,
transportation, shipment or Release of a Hazardous Substance or
(iii) occupational health or safety.

 

“Environmental Liabilities Adjustment” means
$35,000,000, the amount proposed by Parent in its bid for the Company to
reflect some, but not all, of the environmental liabilities of the Company.

 

“Environmental Liabilities Agreement” has the
meaning set forth in Section 11.1(i).

 

“Equity Backstop” has the meaning set forth in
Section 6.6(a).

 

“Equity Commitment” has the meaning set forth
in Section 6.6(a).

 

“Equity Investors” means the eight
institutional investors and one non-institutional investor who have committed
pursuant to the Equity Commitment to purchase capital stock of Parent, in an
aggregate amount of approximately C$223,600,000, upon two Business Days notice
from Parent.

 

“ERISA” means the United States Employee
Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” has the meaning set forth in
Section 5.12(b).

 

“Estimated Debt Adjustment” has the meaning set
forth in Section 3.5.

 

“Estimated Working Capital Adjustment” has the
meaning set forth in Section 3.3(b).

 

“Excluded Assets” has the meaning set forth in
Section 7.6.

 

“Final Debt Adjustment” has the meaning set
forth in Section 3.5.

 

“Final Working Capital Adjustment” has the
meaning set forth in Section 3.3(c).

 

“Financial Information” means the financial
information specified in Exhibit 1.1.

 

“Financial Statements” means the 2002 Financial
Statements and the June 30 Financial Statements.

 

“Franchise License” has the meaning set forth
in Section 11.1(e).

 

4

 

“GAAP” means generally accepted accounting
principles in the United States as in effect from time to time.

 

“Governmental Body” means any government or
political subdivision thereof, or any governmental or regulatory body thereof,
or any agency, department, board, commission or instrumentality thereof, or any
other body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power, or any
court that has, in each case, properly asserted jurisdiction over the matter in
question.

 

“Hazardous Substance” means any substance,
waste, pollutant, contaminant or material which (i) is regulated, defined
or designated as hazardous, dangerous or toxic by a Governmental Body or
(ii) is present in an amount and concentration that causes damage or harm
to health or the environment, including petroleum and petroleum products,
asbestos, and polychlorinated biphenyls.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.

 

“Indemnified Person” has the meaning set forth
in Section 12.3(a).

 

“Indemnifying Person” has the meaning set forth
in Section 12.3(a).

 

“Interim Period” has the meaning set forth in
Section 8.1(a).

 

“IRS” means the United States Internal Revenue
Service.

 

“June 30 Financial Statements” has the meaning
set forth in Section 5.5(b).

 

“Knowledge of Seller” means the actual
knowledge, after due inquiry, of Gary Beatty, Matthew Fischer, William Gover,
Doug Hecker, David Holthe, Kathy Krecke, Greg Leins, Paul Murphy, Mick Parker,
Jeff Rusinovich, Michael Saiz, Paul Smith and/or Kristy Ton.

 

“Leased Real Properties” has the meaning set
forth in Section 5.8(c).

 

“Legal Proceeding” means any judicial,
administrative or arbitral action, suit, or proceeding (public or private,
civil, criminal, administrative or otherwise), other than (except for purposes
of indemnification for Third Party Claims pursuant to Sections 12.1(a)(iii) and
12.2(a)(iii)) those relating to Environmental Laws.

 

“Lenders” meanNational Bank Financial Inc., The Bank of Nova Scotia and CIBC World
Markets Corp, CIBC Inc., Scotiabank Inc., National Bank of Canada and Canadian
Imperial Bank of Commerce.

 

“Lien” means any lien, pledge, mortgage, deed
of trust, security interest, restriction on transfer or other encumbrance.

 

“Losses” has the meaning set forth in Section 12.1(a).

 

5

 

“Material Adverse Effect” means an effect that
results in or causes a material adverse change in the business, operations,
results of operations, assets, properties or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole and after giving effect
to the Pre-Closing Transfers, except to the extent such material adverse change
results from or is caused by (i) the public disclosure of the transactions
contemplated hereby, (ii) changes in laws, rules or regulations of general
applicability or interpretations thereof by courts or Governmental Bodies, in
each case after the date hereof, (iii) changes, after the date hereof, in
applicable generally accepted accounting principles or regulatory accounting
requirements generally applicable to comparable companies, (iv) actions taken
pursuant to this Agreement and actions or omissions of a party to this
Agreement taken with the prior written consent of the other party to this
Agreement and (v) changes, after the date hereof, affecting any of the
industries in which the Company or its Subsidiaries are primarily engaged or
general economic and market conditions (including changes in petroleum or
petroleum product prices or margins).

 

“Material Contracts” has the meaning set forth
in Section 5.11(a).

 

“Option” means with respect to any Person, any
security, right, call, subscription, warrant, option, conversion right,
“phantom” stock right or other Contract that gives the right to (i) purchase or
otherwise receive or be issued any capital stock or other ownership interest of
such Person or any security of any kind convertible into or exchangeable or
exercisable for any capital stock or other ownership interest of such Person or
(ii) receive any benefits or rights similar to any rights enjoyed by or
accruing to the holder of capital stock or other ownership interest of such
Person, including any rights to participate in the equity, income or election
of the board of directors or other governing body of such Person.

 

“Owned Real Properties” has the meaning set
forth in Section 5.8(a).

 

“Parent” has the meaning set forth in the
opening paragraph.

 

“Permitted Liens” means, in each case after
giving effect to the Pre-Closing Transfers, (a) statutory liens for
current Taxes not yet delinquent or the amount or validity of which is being
contested in good faith by appropriate proceedings; (b) mechanics’,
carriers’, workers’, repairers’, maritime and statutory liens and rights in rem and other similar Liens arising or
incurred in the ordinary course of business; (c) zoning, entitlement and
other land use and environmental regulations by Governmental Bodies;
(d) such easements, covenants, conditions, restrictions, agreements, states
of fact and other matters as appear in public records of the property owned by
the Company or its Subsidiaries; (e) leases entered into in the ordinary
and usual course of business providing for the use or occupancy of a portion or
portions of the Owned Real Properties or Leased Real Properties; (f) Liens
reflected in Material Contracts or Additional Material Contracts or created by
any Transaction Document; (g) Liens, encroachments and other imperfections
of title which do not materially detract from the value of or materially
interfere with the present use of the properties or assets of the Company and
its Subsidiaries subject thereto; (h) Liens securing a lessor’s or licensor’s
interest in personal property leased or licensed to the Company or any of its
Subsidiaries; (i) Liens registered under the Uniform Commercial Code (as
adopted in any applicable state) by any lessor or licensor of personal property
to the Company or any of its Subsidiaries; (j) liens securing monetary

 

6

 

obligations reflected in the
2002 Financial Statements; and (k) other matters set forth on
Schedule 1.1 hereto.

 

“Person” means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.

 

“Phillips 66 Trademark License” has the meaning
set forth in Section 11.1(c).

 

“Pre-Closing Transfers” means the transfers
referred to in Sections 7.5, 7.6 and 7.7.

 

“Purchaser” has the meaning set forth in the
recitals.

 

“Purchaser DC Plans” has the meaning set forth
in Section 9.2(d).

 

“Purchaser Indemnified Parties” has the meaning
set forth in Section 12.1(a).

 

“Purchaser Plans” has the meaning set forth in
Section 9.2(b).

 

“Real Estate Indemnity Agreement” has the
meaning set forth in Section 11.1(k).

 

“Release” means any spilling, leaking,
migrating, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the environment, including the
abandonment or discarding of barrels, containers, and other closed receptacles
containing any Hazardous Substances.

 

“Reseller Agreement” has the meaning set forth
in Section 11.1(l).

 

“Seller” has the meaning set forth in the
opening paragraph.

 

“Seller Affiliate Employees” means those
individuals, identified on Schedule 1.2 hereto, who are employed by Seller
or its Subsidiaries (other than the Company and its Subsidiaries) in
“non-store” positions immediately prior to the Closing Date, whose primary
duties and responsibilities include supporting the Company and its
Subsidiaries.

 

“Seller DC Plans” has the meaning set forth in
Section 9.2(d).

 

“Seller Indemnified Parties” has the meaning
set forth in Section 12.2(a).

 

“Seller Plans” has the meaning set forth in
Section 5.12(a).

 

“September 30 Financial Statements” means the
unaudited financial statements of the Company and its Subsidiaries at and for
the nine months ended September 30, 2003.

 

“Short Period” has the meaning set forth in
Section 8.1(a).

 

7

 

“Store Closing Adjustment” means $1,000,000,
the amount determined by the parties to reflect the transfer or closure of four
(4) of the 1663 Stores planned to be included in the Company as of the Closing.

 

“Stores” has the meaning set forth in
Section 5.8(e).

 

“Straddle Tax Periods” has the meaning set
forth in Section 8.1(a).

 

“Subsidiary” means, with respect to any entity,
any other entity that directly or indirectly is controlled by such entity.  For purposes of this definition, “control”
means the ownership of stock or other ownership interests of an entity
constituting more than 50% of the total combined voting power of all classes of
stock or other ownership interests of such entity entitled to vote.

 

“Supply Agreement” has the meaning set forth in
Section 11.1(h).

 

“Tax” or “Taxes” means all federal,
state, foreign or local taxes, duties, fees, premiums, assessments, imposts,
levies and other charges of any kind whatsoever imposed by any Governmental
Body, together with all interest, penalties, fines, additions to tax or other
additional amounts imposed in respect thereof, including those levied on, or
measured by, or referred to as income, gross receipts, profits, capital,
alternative or add-on, transfer, land transfer, recordation, real estate
conveyance, rent, documentary, filing, occupation, sales, use, license,
value-added, excise, severance, premium, stamp, withholding, business,
franchising, property, service, payroll, employment and social security taxes,
all surtaxes, and all customs duties and import and export taxes.

 

“Tax Indemnitee” has the meaning set forth in
Section 8.4.

 

“Tax Indemnity Payment” has the meaning set
forth in Section 8.4.

 

“Tax Returns” includes all returns, reports,
declarations, elections, forms, notices, filings, information returns and
statements or other documents filed or required to be filed in respect of
Taxes.

 

“Tempe Office Lease” has the meaning set forth
in Section 11.1(n).

 

“Third Party Claim” has the meaning set forth
in Section 12.3(a).

 

“Total Closing Date Accounts Receivable” has
the meaning set forth in Section 3.4(a).

 

“Trademarks” has the meaning set forth in
Section 5.10(a).

 

“Transaction Documents” means the Transition
Services Agreement, the Phillips 66 Trademark License, the Union 76 Trademark
License, the Franchise License, the Conversion Agreement (East Coast), the
Conversion Agreement (West Coast), the Supply Agreement, the Environmental
Liabilities Agreement, the Credit Card Services Agreement, the Real Estate Indemnity
Agreement, the Reseller Agreement, the Car Wash Trademark License Agreement,

 

8

 

the Tempe Office Lease
and each other Contract, document, instrument and certificate to be executed in
connection with the transactions contemplated by this Agreement and the
foregoing Contracts.

 

“Transfer Tax” means applicable excise, sales,
goods and services, harmonized sales, value added, transfer, land transfer,
documentary, filing, recordation, real estate conveyance, stamp, use and other
similar taxes, levies, fees and charges due in connection with the transactions
contemplated by this Agreement, provided, however, that Transfer
Tax shall not include any such taxes, levies, fees or charges due in connection
with the Pre-Closing Transfers.

 

“Transition Services Agreement” has the meaning
set forth in Section 11.1(b).

 

“2002 Financial Statements” has the meaning set
forth in Section 5.5(a).

 

“Uncollected Closing Date Accounts Receivable”
has the meaning set forth in Section 3.4(b).

 

“Union 76 Trademark License” has the meaning
set forth in Section 11.1(d).

 

“$” means, unless otherwise indicated, the
lawful currency of the United States of America.

 

ARTICLE II

SALE AND PURCHASE OF THE COMPANY STOCK

 

2.1                                 Sale and Purchase of the Company Shares.  Upon the terms and subject to the conditions
hereinafter set forth, at the Closing, Seller shall sell to Purchaser, and
Parent shall cause Purchaser to purchase from Seller, the Company Shares, free
and clear of all Liens and together with all rights now and hereafter attaching
thereto.

 

2.2                                 Delivery of the Company Shares.  At the Closing, Seller shall deliver to
Purchaser certificates for all of the Company Shares, duly endorsed for
transfer or accompanied by duly executed stock powers or stock transfer forms
sufficient to convey to Purchaser good and valid  title to the all of the Company Shares on the Closing Date.

 

ARTICLE III

CONSIDERATION

 

3.1                                 Amount and Form of Consideration.  Parent shall cause Purchaser to pay to
Seller on the Closing Date as consideration for the Company Shares an amount
equal to:

 

(i)                                     the
Cash Consideration;

 

(ii)                                  minus
the Environmental Liabilities Adjustment;

 

(iii)                               minus
the Store Closing Adjustment;

 

9

 

(iv)                              minus
the Estimated Debt Adjustment;

 

(v)                                 plus
or minus the Estimated Working Capital Adjustment.

 

3.2                                 Payments at Closing.  The payment specified in Section 3.1 shall be made on the Closing
Date by wire transfer of immediately available funds to the account specified
by Seller at least two Business Days prior to the Closing Date.

 

3.3                                 Working Capital Adjustment.  (a) 
Schedule 3.3(a) hereto sets forth, as of December 31, 2002, a
calculation of the amount equal to (i) the sum of the current assets of the
Company minus (ii) the sum of the current liabilities of the Company, in each
case as adjusted pursuant to the adjustments set forth on Schedule 3.3(a) (such
amount, the “Base Working Capital”). 
The Base Working Capital is $74,354,000.

 

(b)         Not less than ten (10)
calendar days prior to the Closing Date, Seller shall deliver to Parent a
statement setting forth in reasonable detail a calculation of the amount equal
to (i) a good faith estimate of the Closing Date Working Capital minus (ii) the
Base Working Capital (such amount, the “Estimated Working Capital Adjustment”),
which may be a positive or a negative number. 
Seller’s good faith estimate of the Closing Date Working Capital shall
consist of the same components and be calculated in the same manner as the Base
Working Capital.

 

(c)          As promptly as
practicable following the Closing Date and in any event within ninety (90)
calendar days thereafter, Parent shall prepare and deliver to Seller a
statement setting forth: (i) as of the close of business on the Closing Date, a
calculation of the amount equal to (A) the sum of the current assets of the
Company minus (B) the sum of the current liabilities of the Company, in each case adjusted using the same
adjustments set forth in Schedule 3.3(a) (such amount, the “Closing
Date Working Capital”), which may be a positive or a negative number; and
(ii) a calculation of the amount equal to (A) the Closing Date Working Capital
minus (B) the sum of the Base Working Capital and the Estimated Working Capital
Adjustment (such amount, the “Final Working Capital Adjustment”), which
may be a positive or a negative number. 
The purpose of the Final Working Capital Adjustment is solely to measure
the difference between the Closing Date Working Capital and the sum of the Base
Working Capital and the Estimated Working Capital Adjustment.  The Closing Date Working Capital shall
consist of the same components and be calculated in the same manner as the Base
Working Capital.  Without limitation of
the foregoing, Parent and Seller shall cooperate in determining a method for
measuring inventory shrinkage.  Seller
shall have the right to review all work papers and procedures used to prepare
the calculation of the Closing Date Working Capital and the Final Working
Capital Adjustment.  Unless Seller,
within 45 calendar days after delivery to Seller of such statement, notifies
Parent in writing that it objects to such calculations, and specifies in
reasonable detail the basis for such objection and each amount in dispute, such
statement and such calculations shall become final and binding upon the parties
for purposes of this Agreement.  If
Parent and Seller are unable to resolve any such objections within 10 Business
Days after any such notification has been given, the dispute shall be submitted
to the Accounting Firm, which shall be instructed to resolve the dispute
expeditiously.  The Accounting Firm  shall make a final, binding determination
as to the matter or matters in dispute. 
The scope of the disputes to be resolved by the Accounting Firm is
limited to the unresolved portion of Seller’s objections and the Accounting
Firm shall not consider any other matter. 
Parent agrees to

 

10

 

cooperate, and to cause
Purchaser, the Company and their respective Subsidiaries to cooperate, with
Seller (and Seller’s authorized representatives) and Seller agrees to cooperate
with Parent (and Parent’s authorized representatives), in order to resolve any
and all matters in dispute as soon as possible.

 

(d)         Within 3 Business Days
after the determination of the Final Working Capital Adjustment pursuant to
Section 3.3(c), if the amount yielded by such calculation is a positive number,
then Parent shall cause Purchaser to pay to Seller such amount, and if the amount
yielded by such calculation is a negative number, then Seller shall pay to
Purchaser such amount (as if it were a positive number).  Such payments shall be by wire transfer of
immediately available funds, and shall include simple interest on such amounts
at a rate of 5% per annum, commencing on the Closing Date and continuing until
the date of full payment hereunder.

 

(e)          Seller shall, and Parent
shall cause Purchaser to, bear one-half of the fees, costs and expenses of the
Accounting Firm retained under Section 3.3(c) to resolve any dispute.

 

3.4                                 Accounts Receivable.  (a) Following the Closing Date, Parent shall
cause the Company and its Subsidiaries to use reasonable best efforts to
collect the accounts receivable of the Company and its Subsidiaries existing on
the Closing Date (the “Total Closing Date Accounts Receivable”); provided,
neither the Company nor its Subsidiaries shall be obligated to institute legal
action for the collection of any of the Total Closing Date Accounts Receivable
or to refer any of the Total Closing Date Accounts Receivable to lawyers or
collection agencies.

 

(b)         Within twenty (20)
Business Days following the date that is one hundred and twenty days (120)  following the Closing Date (the “Determination
Date”), Parent shall provide to Seller a statement (the “Accounts
Receivable Statement”) setting forth: (i) a list of any Total Closing Date
Accounts Receivable which have not been collected by the Company or its
Subsidiaries as of the Determination Date (the “Uncollected Closing Date
Accounts Receivable”), together with appropriate documentation reasonably
satisfactory to Seller, (ii) a calculation of the aggregate amount of Total
Closing Date Accounts Receivable which have been collected by the Company and
its Subsidiaries as of the Determination Date (the “Collected Closing Date
Accounts Receivable”) and (iii) a calculation of the amount by which the
Collected Closing Date Accounts Receivable either exceeds the Net Closing Date
Accounts Receivable (an “Accounts Receivable Excess”) or is less than
the Net Closing Date Accounts Receivable (an “Accounts Receivable Deficit”).  “Net Closing Date Accounts Receivable”
means the accounts receivable net of any reserves or deductions included in the
Closing Date Working Capital calculation.

 

(c)          Unless Seller, within 20
Business Days after receipt of the Accounts Receivable Statement, notifies
Parent in writing that it objects to any of the items or calculations set forth
therein and specifies in reasonable detail the basis for such objection, the
Accounts Receivable Statement shall become final and binding upon the parties
for purposes of this Agreement.  Seller
and Parent each covenant to cooperate to resolve any disputes with respect to
the Accounts Receivable Statement.

 

(d)         Upon the expiration of
the period specified in Section 3.4(c) without Seller giving notice of any
objection to the Accounts Receivable Statement, confirmation by Seller that it
does

 

11

 

not object to the
Accounts Receivable Statement or resolution of any disputes with respect to the
Accounts Receivable Statement:

 

(i)             if
there is an Accounts Receivable Excess, Parent shall cause the Company and its
Subsidiaries to (A) promptly pay to Seller the amount of the Accounts Receivable
Excess, (B) assign to Seller all Uncollected Closing Date Accounts Receivable
and (C) pay to Seller promptly upon receipt any amounts which the Company or
its Subsidiaries receive in respect of Uncollected Closing Date Accounts
Receivable, or

 

(ii)          if
there is an Accounts Receivable Deficit, Seller shall promptly pay to the
Company the amount of the Accounts Receivable Deficit and Parent shall cause
the Company and its Subsidiaries to (A) assign to Seller all Uncollected
Closing Date Accounts Receivable and (B) pay to Seller promptly upon receipt
any amounts which the Company or its Subsidiaries receive in respect of
Uncollected Closing Date Accounts Receivable.

 

(e)          Any payments made
pursuant to this Section 3.4. shall be by wire transfer of immediately
available funds.

 

(f)            Parent acknowledges
that none of Parent, Purchaser, the Company nor any of their Subsidiaries shall
have any recourse against Seller or any of its Affiliates with respect to any
of the Total Closing Date Accounts Receivable except as set forth in this
Section 3.4.

 

3.5                                 Long-Term Debt and Capital Lease Obligations.  (a) The payment to be made by Purchaser to
Seller at Closing pursuant to Section 3.1 will be calculated assuming that the
principal amount of the long-term debt and capital lease obligations (less any
current portion thereof reflected in the Closing Date Working Capital) of the
Company on a combined consolidated basis will be $8,657,000 (the “Estimated
Debt Adjustment”) at Closing. 
Simultaneous with the delivery of the calculation of Closing Date
Working Capital pursuant to Section 3.3(c), Parent shall deliver to Seller a
statement setting forth: (i) the amount of the long term debt and capital lease
obligations (less any current portion thereof reflected in the Closing Date
Working Capital) on Closing (the “Closing Date Debt”), together with
supporting documents, reasonably satisfactory to Parent and (ii) a calculation
of the Closing Date Debt minus the Estimated Debt Adjustment (the “Final
Debt Adjustment”), which may be a positive or negative number.  Any dispute as to the Final Debt Adjustment
shall be resolved in the same manner as disputes as to the Final Working
Capital Adjustment.

 

(b)         If the Final Debt
Adjustment is a positive number, Seller shall promptly pay to Purchaser the
amount of the Final Debt Adjustment, and if the Final Debt Adjustment is a
negative number, Parent shall cause Purchaser to promptly pay to Seller the
amount of the Final Debt Adjustment. 
Such payments shall be by wire transfer of immediately available funds,
and shall include simple interest on such amounts at a rate of 5% per annum,
commencing on the Closing Date and continuing until the date of full payment
hereunder.

 

12

 

ARTICLE IV

THE CLOSING

 

4.1                                 Closing Date. 
Except as hereinafter provided, the closing of the transactions
described herein (the “Closing”) shall take place at the offices of
Cleary, Gottlieb, Steen & Hamilton, on the third Business Day following the
date on which all of the conditions (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to fulfillment or waiver
of those conditions) contained in Article X have been satisfied or, in the case
of Section 10.1, waived by both Parent and Seller or, in the case of
Section 10.2, waived by Parent or, in the case of Section 10.3, waived by
Seller, or at such other place and at such other time and date as may be
mutually agreed upon by Parent and Seller.

 

4.2                                 Proceedings at Closing.  All proceedings to be taken and all
documents to be executed and delivered by Seller and any third parties in
connection with the consummation of the transactions contemplated hereby and by
the Transaction Documents shall be reasonably satisfactory in form and substance
to Parent and its counsel (other than the Transaction Documents, which shall be
substantially in the forms attached hereto as exhibits).  All proceedings to be taken and all
documents to be executed and delivered by Parent, Purchaser and any third parties
in connection with the consummation of the transactions contemplated hereby and
by the Transaction Documents shall be reasonably satisfactory in form and
substance to Seller and its counsel (other than the Transaction Documents,
which shall be substantially in the forms attached hereto as exhibits).  All proceedings to be taken and all
documents to be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed simultaneously, and no proceedings shall
be deemed taken nor any documents executed or delivered until all have been
taken, executed and delivered.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF
SELLER

 

Seller represents and warrants to Parent, as of the
date hereof:

 

5.1                                 Organization and Good Standing.  (a) 
Each of Seller and the Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.  The Company has full
power and authority to own, lease and operate its assets, properties and rights
and to carry on its business as now conducted. 
The Company is duly qualified or licensed to do business in each
jurisdiction in which the character of the assets owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
have and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. 
Schedule 5.1(a) sets forth the Company’s authorized capital stock, the
Company’s issued and outstanding capital stock and the record and beneficial
owner of all issued and outstanding capital stock of and other ownership
interest in the Company.

 

(b)         Schedule
5.1(b) sets forth a complete and accurate list of each Subsidiary of the
Company, setting forth for each (i) the type of entity, (ii) the jurisdiction
of its organization, (iii)

 

13

 

the amount of capital
stock or other ownership interest that is authorized, that is issued and that
is outstanding, and (iv) the record and beneficial owner of all the issued and
outstanding capital stock or other ownership interest.  Each Subsidiary of the Company and Circle K
Licensing is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and has full power and authority
to own, lease and operate its assets, properties and rights and to carry on its
business as now conducted.  Each
Subsidiary of the Company and Circle K Licensing is duly qualified or licensed
to do business in each jurisdiction in which the character of the assets owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed would not have and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

(c)          The certificate of
incorporation and by-laws (or equivalent organizational documents) of the Company,
each of its Subsidiaries and Circle K Licensing are in full force and
effect.  Neither the Company nor any of
its Subsidiaries nor Circle K Licensing is in violation of any of the
provisions of the their respective organizational documents.

 

5.2                                 Authorization. 
Seller has full corporate power, authority and legal capacity to execute
and deliver this Agreement and each Transaction Document to which it is or will
be a signatory, and to perform fully its obligations hereunder and
thereunder.  The execution, delivery and
performance by Seller of this Agreement and each Transaction Document to which
it is or will be a signatory has been (in the case of this Agreement) or shall
be (in the case of each Transaction Document), on or prior to the Closing Date,
duly authorized by all necessary corporate action on the part of Seller, and no
other action on the part of Seller or its shareholders is necessary to
authorize the execution, delivery or performance by Seller of this Agreement or
the Transaction Document to which it is or will be a signatory.  This Agreement has been, and each other
Transaction Document to which Seller is to be a party will be, duly executed
and delivered by Seller and, assuming the due authorization, execution and
delivery by the other parties thereto, this Agreement constitutes, and each
other Transaction Document to which Seller is to be a party, when so executed
and delivered, will constitute, legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms.

 

5.3                                 Ownership of Capital Stock.  (a) 
The Company Shares have been duly authorized and validly issued, are
fully paid and non-assessable and represent all of the issued and outstanding
shares of the Company.  Seller owns and
has good and valid title to the Company Shares, free and clear of all Liens.

 

(b)         Except as set forth in
Schedule 5.1(b), all of the outstanding shares of capital stock of, or other
ownership interests in, each Subsidiary owned by the Company are duly
authorized and validly issued, are fully paid and non-assessable and represent
all of the issued and outstanding shares of capital stock, or other ownership
interests, of such Subsidiary.  The
Company owns all such shares (or other ownership interests) free and clear of
all Liens.  Through one of its
Subsidiaries, the Company is the owner and holder of record of, with good and
valid title to, 48.78% of the outstanding shares of the capital stock of Circle
K Licensing and such shares are duly authorized and validly issued, are fully
paid and non-assessable and are free and clear of all Liens.

 

14

 

(c)          Except as set forth in
Schedules 5.1(a) or 5.1(b), there is no issued or outstanding capital stock or
other ownership interest of the Company, any of its Subsidiaries or Circle K
Licensing.  There are no authorized or
outstanding Options or other agreements, securities or commitments of any
nature whatsoever obligating the Company or its Subsidiaries or Circle K
Licensing to issue, deliver or sell, or cause to be issued, delivered or sold,
any authorized or outstanding shares of the capital stock of (or other
ownership interests in), or any securities convertible into or exchangeable for
shares of capital stock of (or other ownership interests in), the Company or
its Subsidiaries or Circle K Licensing or obligating the Company or its
Subsidiaries or Circle K Licensing to grant, extend or enter into any such
agreement or commitment.  Except as set
forth in Schedules 5.1(a) or 5.1(b), there are no voting trusts, pre-emptive
rights, drag-along rights, tag-along rights, rights of first refusal or
negotiation, or similar rights of any Person of any character, relating to the
issued or unissued capital stock or other ownership interests of the Company or
of any of its Subsidiaries or Circle K Licensing.

 

(d)         Upon the delivery of and
payment for the Company Shares at the Closing as provided for in this
Agreement, the stock powers to be executed and delivered by Seller to Purchaser
will be legal, valid and binding obligations of Seller, enforceable in
accordance with their respective terms.

 

5.4                                 Conflicts; Consents.  (a)  Subject to receipt of
the consents, approvals and waivers set forth in Schedule 5.4(a), neither
the execution and delivery by Seller of this Agreement or of the Transaction
Documents to which it is or will be a party, nor the consummation of the
transactions contemplated hereby or thereby, nor the compliance by Seller with
any of the provisions hereof or thereof will (i) conflict with or result in the
breach of any provision of the certificate of incorporation or by-laws or other
organizational documents of Seller, the Company or any of the Company’s
Subsidiaries, (ii) conflict with, violate, result in the breach or termination
of, or constitute a default or give rise to any right of termination or
acceleration or right to increase the obligations or otherwise modify the terms
under any Material Contract or any lease pertaining to Leased Real Properties,
(iii) give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify any permit, license, franchise registration or
other similar permit (or any pending applications or renewals with respect
thereto) or (iv) result in the creation of any Lien (other than any Lien in
favor of Purchaser) upon any of the assets of Company or any of its
Subsidiaries except, in the case of clauses (ii), (iii) and (iv), for such
conflicts, violations, breaches, terminations, defaults, rights or Liens which
will not have a Material Adverse Effect.

 

(b)         Other than the filing
with the U.S. Federal Trade Commission and the Antitrust Division of the U.S.
Department of Justice of a premerger notification and report form as required
by HSR Act, and except as set forth in Schedule 5.4(b), no consent,
approval or authorization of, permit from, or declaration, filing or
registration with, any Governmental Body is required to be made or obtained by
Seller or its respective Affiliates in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, except where the failure to obtain such consent, approval,
authorization or permit, or to make such declaration, filing or registration,
would not have a Material Adverse Effect.

 

15

 

5.5                                 Financial Statements.  (a) 
The audited combined consolidated financial statements attached hereto
as Schedule 5.5(a) (the “2002 Financial Statements”) present fairly in
conformity with GAAP the consolidated financial condition of the Company and
its Subsidiaries at, and the Company’s and its Subsidiaries’ results of
operations and changes in financial condition for, the year ended December 31,
2002, in each case assuming that certain sites had been combined with the
Company as described in the footnotes to the 2002 Financial Statements.

 

The unaudited pro
forma statement of income and balance sheet of the Company and its Subsidiaries
included in the footnotes to the 2002 Financial Statements have been derived
and properly compiled from the 2002 Financial Statements to give effect to the
adjustments therein provided.

 

(b)         The unaudited financial
statements attached hereto as Schedule 5.5(b) (the “June 30 Financial
Statements”) have been prepared in conformity with GAAP and present fairly
the financial condition of the Company and its Subsidiaries at, and the
Company’s and its Subsidiaries’ results of operations and changes in financial
condition for, the six months ended, June 30, 2003, in each case assuming that
certain sites had been combined with the Company as described in the footnotes
to the June 30 Financial Statements.

 

The unaudited pro forma
statement of income and balance sheet of the Company and its Subsidiaries
included in the footnotes to June 30 Financial Statements have been derived and
properly compiled from the June 30 Financial Statements to give effect to the
adjustments therein provided.

 

(c)          The September 30
Financial Statements, when delivered, will have been prepared in conformity
with GAAP and will present fairly the financial condition of the Company and
its Subsidiaries at, and the Company’s and its Subsidiaries’ results of
operations and changes in financial condition for, the nine months ended,
September 30, 2003, in each case assuming that certain sites had been combined
with the Company as described in the footnotes to the September 30 Financial
Statements.

 

The unaudited pro forma
statement of income and balance sheet of the Company and its Subsidiaries to be
included in the footnotes to September 30 Financial Statements will have been
derived and properly compiled from the September 30 Financial Statements to
give effect to the adjustments therein provided.

 

(d)         The historical monthly
financial data and store profit and loss statements previously made available
to Parent were prepared by the Company in the ordinary course of business for
management purposes, except as noted therein.

 

5.6                                 Ordinary and Usual Course of Business; Material
Adverse Effect; Material Tax Elections. 
Except as contemplated by this Agreement (including Sections 7.5, 7.6
and 7.7) or set forth in Schedule 5.6, between December 31, 2002 and the
date hereof, the Company and its Subsidiaries have conducted their business in
the ordinary course of business, and there has been no Material Adverse
Effect.  Without limitation of the
foregoing, between January 1, 2003 and the date hereof, the Company has not
made any material Tax election or taken any other action having a similar
result.

 

16

 

5.7                                 Taxes.  Except as
disclosed in Schedule 5.7 of this Agreement:

 

(a)          Each of the Company and
its Subsidiaries has filed (or been included in) all income Tax Returns and all
other material Tax Returns required to be filed with respect to it with the
appropriate Governmental Body.  To the
Knowledge of Seller, each such Tax Return is true, correct and complete in all
material respects.  All material Taxes
shown thereon to be due and payable have been paid.  To the Knowledge of Seller, no material adjustments relating to
such Tax Returns have been proposed formally or informally by any Governmental
Body.

 

(b)         The Company and its
Subsidiaries have not (and Seller has not, on their behalf) (i) waived any
statute of limitations in respect of Taxes, (ii) agreed to any extension of
time with respect to a Tax assessment or deficiency, or (iii) executed any
closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof, or any similar provision of state or local law.

 

(c)          The Company and its
Subsidiaries have not received written notice that they are being audited by
any taxing authority, and to the Knowledge of Seller, there are no claims or
assessments pending against the Company or any of its Subsidiaries and there
are no threatened actions or proceedings, in each case for the assessment or
collection of any material alleged deficiencies in Taxes.  Set forth in Schedule 5.7(c) of this
Agreement is a complete list of the income and other Tax Returns filed by the
Company or any of its Subsidiaries (or filed by Seller on their behalf)
pursuant to the laws or regulations of any federal, state, local or foreign Tax
authority that have been audited by the IRS or other appropriate authority with
respect to an adjustment in excess of $1,000,000 during the preceding five
years (or three years with respect to all Tax Returns other than income Tax
Returns).  To the Knowledge of Seller,
no changes proposed by a taxing authority in any such audit during such five
(or three) year period (other than changes resulting from each such examination
or audit disclosed in Schedule 5.7) reasonably can be expected to materially
affect the amount of Tax liability for the Company or its Subsidiaries in the
future.  Except as set forth on Schedule
5.7(c) of this Agreement, all agreed upon deficiencies as a result of such
audits have been paid or finally settled. 
The period during which any assessment against the Company or any of its
Subsidiaries may be made by the IRS or other appropriate authority has expired
without waiver or extension for the years set forth on Schedule 5.7(c) for each
such authority.

 

(d)         Each of the Company and
its Subsidiaries has withheld from any amount paid or credited by it to or for
the account or benefit of any Person, including any employees, directors and
non-resident Persons, the amount of all material Taxes and other deductions
required by any Applicable Laws to be withheld from any such amount and has
remitted all such withheld amounts that are due and payable to the appropriate
Governmental Body.

 

(e)          To the Knowledge of
Seller, no claim has ever been made by any authority in a jurisdiction where
neither the Company nor any of its Subsidiaries (nor Seller, on their behalf)
files Tax Returns that the Company or any of its Subsidiaries is or may be
subject to taxation by that jurisdiction.

 

(f)            There are no Liens
(aside from Permitted Liens) with respect to any material Taxes upon any of the
assets and properties of the Company or the Subsidiaries.

 

17

 

(g)         Seller is not a “foreign
person” as that term is used in § 1.1445-2 of the United States Treasury
Regulations promulgated under the Code.

 

(h)         To the Knowledge of
Seller, none of the properties owned by the Company or any of its Subsidiaries
is property that is required to be treated as owned by any other Person
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, as amended,
as in effect immediately prior to the enactment of the Tax Reform Act of 1986
or is “tax-exempt use property” within the meaning of Section 168(h) of the
Code.

 

(i)             Neither the Company
nor any of its Subsidiaries is a party to a tax sharing agreement or similar
arrangement relating to a material amount of Taxes.

 

(j)             Neither the Company
nor any of its Subsidiaries has agreed, and none is required to make any
adjustments pursuant to Section 481(a) of the Code or any similar provision of
state or local law by reason of a change in accounting method initiated by it
or any other relevant party, none has any knowledge that the IRS has proposed
any such adjustment or change in accounting method, and there is no application
pending with any taxing authority requesting permission for any changes in
accounting methods that relate to the business or properties of the Company or
any of its Subsidiaries.

 

(k)          Neither the Company nor
any of its Subsidiaries has made any payments, is obligated to make any
payments, or is a party to any Contract that under any circumstances could
obligate it to make payments with respect to the transaction contemplated
herein, in each case that would not be deductible under Section 280G of the
Code.

 

5.8                                 Real Property. 
(a)  Schedule 5.8(a)(i) sets
forth a true and complete list of all real property owned by the Company or any
of its Subsidiaries, other than real property included in the Excluded
Assets.  Schedule 5.8(a)(ii) sets forth
a true and complete list of all additional real property that will be owned by
the Company or any of its Subsidiaries as of Closing (together with the real
property listed on Schedule 5.8(a)(i), the “Owned Real Properties”).

 

(b)         Except as set forth on
Schedule 5.8(b), the Company or one of its Subsidiaries has, or as of Closing
will have, good and marketable title to each of the Owned Real Properties, in
each case, free and clear of all Liens other than Permitted Liens.

 

(c)          Schedule 5.8(c)(i)
sets forth a true and complete list of all real property leased by the Company
or any of its Subsidiaries, other than leased real property included in the
Excluded Assets.  Schedule 5.8(c)(ii)
sets forth a true and complete list of all additional real property that will
be leased by the Company or any of its Subsidiaries as of Closing (together
with real property listed on Schedule 5.8(c)(i), the “Leased Real
Properties”).

 

(d)         Except as set forth on
Schedule 5.8(d):
(i) the Company or one of its Subsidiaries has, or as of Closing will have, a
valid and subsisting leasehold estate in, as lessee for the full term of the
lease thereof, each of the Leased Real Properties; and (ii) the Company’s or
its Subsidiaries’ leasehold interests in the Leased Real Properties are free
and clear of all Liens, other than Permitted Liens.

 

18

 

(e)          Except as set forth on
Schedule 5.8(a)(i) or 5.8(a)(ii), at Closing, the Company and its Subsidiaries
will operate a network comprising no less than one thousand six hundred and
sixty-three (1,663) convenience store retail outlets (“Stores”) under
the trade name Circle K in sixteen (16) states of the United States of America,
of which no less than one thousand four hundred and thirty eight (1,438) sell
gasoline and other petroleum products, no less than one thousand six hundred
and sixteen (1,616) sell beer, no less than one thousand four hundred and
eighty-eight (1,488) sell wine, no less than four hundred and six (406) sell
liquor, no less than one thousand five hundred and forty-eight (1,548) are
equipped with ATM Machines and no less than five hundred and fifty-one (551)
are equipped with inventory scanning equipment.

 

5.9                                 Tangible Personal Property.  The Company and each of its Subsidiaries has
or as of Closing will have, sufficiently good and valid title to, or an
adequate leasehold interest in, the material tangible personal properties and
assets necessary to allow them to conduct their business as and where currently
conducted.  Such material tangible
personal assets and properties are sufficiently free of Liens, other than Permitted
Liens, to allow the Company and its Subsidiaries to conduct their business as
currently conducted and, subject to the receipt of the consents, approvals and
waivers set forth in Section 5.4(a), the consummation of the transactions
contemplated hereby will not alter or impair such ability in any material
respect.

 

5.10                           Intellectual Property.  (a) 
Schedule 5.10(a)(i) sets forth a complete and accurate list of all
registered trademarks and service marks, and applications to register the
foregoing, that are owned by the Company or one of its Subsidiaries.  Schedule 5.10(a)(ii) sets forth a complete
and accurate list of all additional registered trademarks and service marks,
and applications to register the foregoing, that as of Closing will be owned by
the Company or one of its Subsidiaries (together with the items listed on
Schedule 5.10(a)(i), the “Trademarks”). 
All registrations with and applications to Governmental Bodies in
respect of the Trademarks are valid and in full force and effect.

 

(b)         To the Knowledge of
Seller, except as set forth in this Agreement, the other Transaction Documents
or Schedule 5.10(b) and except as would not reasonably be expected to have a
Material Adverse Effect, the Company and its Subsidiaries have, or as of
Closing will have, the exclusive right to use each Trademark as it is currently
being used with the goods and services set forth in the certificate of
registration or application for registration for such Trademark, and the
consummation of the transactions contemplated hereby will not alter or impair
any such rights.

 

(c)          All Trademarks are
currently active and are in compliance with all Applicable Laws (including, the
timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, are not subject to any filing
fees, maintenance fees, annuities or Taxes or actions falling due within ninety
(90) days after the Closing Date and are registered in those jurisdictions in
which they are used.  To the Knowledge of
Seller, (i) no Trademark is now involved in any opposition, invalidation,
cancellation or other Legal Proceeding and, to the Knowledge of Seller, no such
Legal Proceeding is threatened with respect to any of the Trademarks, (ii)
there is no trademark or trademark application of any other Person that
potentially interferes with or affects the Company’s and its Subsidiaries’ use
of and desired use of the Trademarks, (iii) no Trademark is infringed or is
being challenged as invalid or unenforceable or otherwise threatened in any
way, (iv) none of the Trademarks infringes or is

 

19

 

alleged to infringe any
trade name, trademark or service mark of any other Person and (v) all products
and materials used under or in connection with a Trademark bear the proper
federal registration notice where permitted by Applicable Law.

 

(d)         Except as set forth in
Schedule 5.10(a)(i) or 5.10(a)(ii), (i) Seller owns no intellectual property,
other than the trademarks licensed to the Company and its Subsidiaries pursuant
to the Transaction Documents, that is materially necessary for the conduct of
the Company’s and its Subsidiaries’ business and (ii) the Company and its
Subsidiaries now have, and upon consummation of the transactions contemplated
hereby will continue to have, all rights in to and under the Trademarks,
including the goodwill represented thereby.

 

(e)          At Closing, the Oracle
platform of the Company will continue to be capable (i) to operate the
business of the Company and its Subsidiaries to the same extent operated prior
to the Closing and (ii) to produce Store profit and loss statements and
financial statements per division and on a consolidated basis as the same were
produced prior to Closing.

 

5.11                           Contracts. 
(a)  Schedule 5.11(a) lists
each of the Contracts (other than Contracts referred to in Section 5.12) to
which the Company or any of its Subsidiaries is party or by which the Company
or any of its Subsidiaries is bound (together with the parties to each such
Contract and the date thereof) (i) that involves payment or other obligations
subsequent to the Closing Date of more than $1,000,000 per year or (ii) of
which termination would be reasonably likely to have a Material Adverse Effect,
(iii) which materially restricts the Company or any of its Subsidiaries from
engaging in any business activity anywhere in the world or materially limits
the individuals who may be solicited for employment or employed by the Company
or its Subsidiaries, (iv) is a Contract with respect to indebtedness for
borrowed money, (v) is a partnership, joint venture or other Contract with
respect to the sharing of profits or losses of a partnership or joint venture,
(vi) is in the nature of securitizations, synthetic leases, or similar
structured financings, in each case provided off-balance sheet financing or
(vii) providing for the exclusive purchasing of goods or services
(collectively, the “Material Contracts”).  Schedule 7.7 lists each of the Additional Material Contracts
(together with the parties to each such Contract and the date thereof).

 

(b)         Except as specified in
Schedule 5.11(b), and other than any such failure, breach, default, or
waiver, as applicable, which, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect, (i) each of the Material
Contracts is valid, binding, in full force and effect, and enforceable by the
Company or its Subsidiary that is a party thereto in accordance with its terms,
(ii) neither the Company nor its Subsidiaries is in breach or default in any
material respect under any of the Material Contracts, nor has any event
occurred that, with the passage of time or the giving of notice or both, would
constitute a breach or default in any material respect, (iii) neither the
Company nor its Subsidiaries has waived any material rights under any of the
Material Contracts or modified any material terms thereof and (iv) to the
Knowledge of Seller, no other party to any Material Contract is in breach or
default in any material respect thereunder nor has any event occurred that,
with the passage of time or the giving of notice or both, would constitute a
breach or default in any material respect.

 

(c)          Except as specified in
Schedule 5.11(c), and other than any such failure, breach, default, or
waiver, as applicable, which, individually or in the aggregate, would not be

 

20

 

reasonably likely to have
a Material Adverse Effect, and in each case assuming that the transactions
contemplated by Section 7.7 have been fully consummated and that the consents
set forth on Schedule 5.4(a) have been obtained, as of Closing: (i) to the
Knowledge of Seller, each of the Additional Material Contracts will be valid,
binding, in full force and effect, and enforceable by the Company or its Subsidiary
that is a party thereto in accordance with its terms, (ii) neither the Company
nor its Subsidiaries will be in breach or default in any material respect under
any of the Additional Material Contracts, nor has any event occurred that, with
the passage of time or the giving of notice or both, would constitute a breach
or default in any material respect, (iii) neither the Company nor its
Subsidiaries will have waived any material rights under any of the Additional
Material Contracts or modified any material terms thereof and (iv) to the
Knowledge of Seller, no other party to any Additional Material Contract will be
in breach or default in any material respect thereunder, nor has any event
occurred that, with the passage of time or the giving of notice or both, would
constitute a breach or default in any material respect.

 

5.12                           Employee Benefits.  (a) Schedule 5.12(a) sets forth a complete and correct list of
all material Benefit Plans maintained by the Company or any of its Subsidiaries
with respect to Company Employees as of the Closing Date (the “Company Plans”)
or maintained by Seller in respect of which the Company Employees participate
(the “Seller Plans”, and together with the Company Plans, the “Employee
Benefit Plans”).  None of the
Employee Benefit Plans listed on Schedule 5.12(a) is a “multiemployer plan” as
defined in Section 3(37) of ERISA or a “multiple employer” plan within the
meaning of Section 4064 of ERISA. 
Neither the Company nor its Subsidiaries nor any ERISA Affiliate
contributes to, has any liability with respect to or is obligated to contribute
to any multiemployer plan, within the meaning of Section 4001(a)(3) or Section
3(37) of ERISA, with respect to which Parent, Purchaser, the Company or any of
its Subsidiaries would be reasonably be expected to have liability.  True, correct and complete copies of the
following documents with respect to each of the Company Plans have been made
available to Purchaser: (i) any plans and related trust documents and all
amendments thereto, (ii) the most recent Forms 5500 and schedules thereto and
(iii) the most recent summary plan description.

 

(b)         None of the Company Plans
is subject to Title IV or Section 302 of ERISA or Section 412 of the Code (“Defined
Benefit Plan”).  Neither Seller, the
Company or its Subsidiaries nor any entity which is under common control with
Seller, the Company or any of its Subsidiaries with the meaning of Section
4001(b) of ERISA (each an “ERISA Affiliate”), at any time during the
five years preceding the date hereof, terminated or withdrawn from a Defined
Benefit Plan with respect to which Parent, Purchaser or the Company would be
reasonably be expected to have liability.

 

(c)          There are no pending or,
to the Knowledge of Seller, threatened Legal Proceedings, which have been asserted
or instituted against any of the Company Plans, or the assets of any such plan
with respect to the operation of any such plan (other than routine claims for
benefits).

 

(d)         Except for such instances
of noncompliance, which would not, individually or in the aggregate, have a
Material Adverse Effect, each of the Company Plans has been maintained and
administered in accordance with the terms and provisions of such plan and
Applicable Law and, as of the date of this Agreement, all required contributions
with respect to such Company Plans have been made.

 

21

 

(e)          Except as required by
Section 4980B of the Code, no Company Plan provides medical or death benefits
(whether or not insured) with respect to Company Employees or former employees
of the Company or any of its Subsidiaries beyond their retirement or other
termination of employment.

 

(f)            Each Company Plan
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter as to such qualification, has been amended to
meet the requirements of such section application since such determination and
a determination letter request has been filed within the remedial amendment
period, or remains within the remedial amendment period for such amendments.

 

(g)         With respect to each
Company Plan, except for instances which would not, individually or in the
aggregate, have a Material Adverse Effect, no “prohibited transaction” (within
the meaning of Section 4975 of the Code or Section 406 of ERISA) has occurred
with respect to which the Company or any of its Subsidiaries or any Company
Plan may be liable or otherwise damaged.

 

(h)         No benefit under any
Company Plan will be established or become accelerated, vested or payable by
reason of any transaction contemplated by this Agreement or any of the
Transaction Documents.

 

(i)             As of immediately
prior to the Closing, the Company and its Subsidiaries will have no employees
other than Company Store Employees, and will have neither severance liability
nor any liability under or pursuant to Seller Plans to Seller Affiliate
Employees, including those Seller Affiliate Employees who became Company
Employees pursuant to Article IX, as a result of the termination of their
employment by Seller.

 

5.13                           Labor.  Except as
set forth on Schedule 5.13:

 

(a)          Neither the Company nor
any of its Subsidiaries is a party to any labor or collective bargaining
agreement.

 

(b)         Except as reported in the
footnotes to the 2002 Financial Statements, there are no (i) strikes, work
stoppages, slowdowns, lockouts or arbitrations or (ii) grievances or other
labor disputes pending or, to the Knowledge of Seller, threatened against the
Company or any of its Subsidiaries which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.

 

(c)          No labor union has been
certified by a relevant labor relations authority, to the extent applicable, as
bargaining agent for any of the Company Employees and no union organizing or
decertification activities are underway or, to the Knowledge of Seller,
threatened.

 

(d)         Except
as set forth on Schedule 5.13(d), since January 1, 2000, neither the Company
nor any of its Subsidiaries has effectuated any plant closing or mass layoff of
employees that could implicate any Applicable Laws requiring notice of plant
closings or layoffs, including the Worker Adjustment and Retraining
Notification Act and any similar state or local Applicable Law.

 

22

 

5.14                           Litigation.  (a)  There is no Legal
Proceeding pending or, to the Knowledge of Seller, threatened against Seller
which, individually or in the aggregate, directly or indirectly, would
reasonably be likely to have a material adverse effect on Seller’s ability to
effect the transactions contemplated herein or in any of the other Transaction
Documents, nor is there any outstanding judgment, decree or injunction, in each
case against Seller, or any statute, rule or order of any Governmental Body
applicable to Seller which has or would reasonably be likely to have,
individually or in the aggregate, a material adverse effect on Seller’s ability
to complete the transactions contemplated herein or in any of the other
Transaction Documents.

 

(b)         Schedules 5.14(b) and
5.15. set forth a true, correct and complete list of all pending or, to the
Knowledge of Seller, threatened Legal Proceedings in which the Company or any
of its Subsidiaries is a party and which would be reasonably likely to have a
Material Adverse Effect.

 

5.15                           Compliance. 
(a)  The Company, its
Subsidiaries and Circle K Licensing are in compliance with all Applicable Laws
and all permits, licenses, franchises, registrations, consents and approvals
issued by Governmental Bodies, except to the extent that failure to comply
would not, individually or in the aggregate, have a Material Adverse Effect or
as set forth on Schedule 5.15.  Neither
the Company nor any of its Subsidiaries has received any notice asserting a
failure, or possible failure, to comply with any such Applicable Laws or any
such permits, licenses, franchises, registrations, consents and approvals, the
subject of which notice has not been resolved as required thereby or otherwise
to the satisfaction of the party sending the notice, except for such failure as
would not, individually or in the aggregate, have a Material Adverse Effect or
as set forth on Schedule 5.15.  For
purposes of this Section 5.15, the term “Applicable Laws” shall be deemed to
exclude all Environmental Laws.

 

(b)         Except as would not have
a Material Adverse Effect, the Company, its Subsidiaries and Circle K Licensing
validly hold all permits, licenses, franchises, registrations, consents or
approvals issued by Governmental Bodies necessary or appropriate for the use of
the Company’s and its Subsidiaries’ assets and properties or the operation of
their business and each of which is valid, subsisting and in good standing and
none of which is being breached of violated by the Company, its Subsidiaries or
Circle K Licensing.

 

5.16                           Insurance.  As
of the Closing, the Company and its Subsidiaries will not have any insurance
other than insurance, if any, required by Applicable Law to be subscribed
directly by the Company or its Subsidiaries.

 

5.17                           Brokers.  Except
for those Persons whose fees and expenses shall be the sole responsibility of
Seller, no Person has acted directly or indirectly as a broker, finder or
financial advisor for Seller in connection with the negotiations relating to,
or the transactions contemplated by, the Transaction Documents, and no Person
is entitled to any fee or commission or like payment in respect thereof, based
in any way on any agreement, arrangement or understanding made by or on behalf
of Seller.

 

5.18                           Absence of Certain Business Practices.  Except as would not have a Material Adverse
Effect, none of the Company, its
Subsidiaries or any of their respective directors, officers, agents or
employees has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to political activity, (ii)
made any unlawful

 

23

 

payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any other
payment in violation of Applicable Law.

 

5.19                           Affiliate Transactions.  At the Closing, except for the Transaction
Documents, there will be no liabilities or Contracts between the Company or any
of its Subsidiaries, on the one part, and Seller or any of its Affiliates
(other than the Company and its Subsidiaries) or any current officer or
director of Seller or any of its Affiliates (other than the Company and its
Subsidiaries), on the other part.

 

5.20                           Circle K Licensing.  Circle K Licensing carries on no activity or business of any sort
other than the holding of beer and wine licenses (and other activities
associated therewith) for retail outlets of the Company and its Subsidiaries
located in the state of Texas.

 

5.21                           Retail Outlets and Franchises.

 

(a)          Schedule 5.21(a)
constitutes a true, complete and accurate list of all retail outlets, whether
located on Leased Real Properties or Owned Real Properties which will be
operated by the Company and its Subsidiaries at Closing.

 

(b)         Schedule 5.21(b)
constitutes a true, complete and accurate list of all franchisees (showing name
of franchisee, date of entering into the franchise agreement, date of expiry of
the franchise agreement, percentage of royalties and location of the franchised
store) of the Company and its Subsidiaries in the United States of America.

 

(c)          Schedule 5.21(c)
constitutes a true, complete and accurate list of all franchisees (showing name
of franchisee, date of entering into the franchise agreement, date of expiry of
the franchise agreement, percentage of royalties and location of the franchised
store) of the Company and its Subsidiaries outside the United States of
America.

 

(d)         Schedule 5.21(d)
constitutes a true, complete and accurate list of all the stores (showing
location) which will be franchised at Closing by the Company or one of its
Subsidiaries to Seller or one of its Affiliates (other than the Company and its
Subsidiaries).

 

24

 

Except for the representations
and warranties contained in Article V of this Agreement, none of Seller, any of
its Affiliates, their respective officers, directors, employees, agents,
representatives, or any other Person, has made, makes or shall be deemed to
have made or to make any representation or warranty to Parent or Purchaser,
express or implied, at law or in equity, on behalf of Seller or any of its
Affiliates, regarding the Company, the Company Shares, the transactions
contemplated hereby or otherwise. 
Except for the representations and warranties contained in Article V of
this Agreement, Seller hereby disclaims, and neither Parent nor Purchaser may
rely on, any such representation or warranty whether by Seller, any of its
Affiliates, any of their respective officers, directors, employees, agents,
representatives or any other Person, notwithstanding the delivery or disclosure
(whether in writing or orally) to Parent or Purchaser or any of their officers,
directors, employees, agents or representatives or any other Person of any
information, documents or material, including, without limitation, projections,
estimates or budgets, by Seller, any of its Affiliates, any of their respective
officers, directors, employees, agents, representatives or any other Person.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF
PARENT

 

Parent hereby represents and warrants to Seller, as of
the date hereof:

 

6.1                                 Organization and Good Standing.  Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization.

 

6.2                                 Authority. 
(a) Parent has full corporate power, authority and legal capacity to
execute and deliver this Agreement and each Transaction Document to which it is
or will be a signatory, and to perform fully its obligations hereunder and
thereunder.  The execution, delivery and
performance by Parent of this Agreement and of each Transaction Document to
which it is or will be a signatory has been (in the case of this Agreement) or
shall be (in the case of the Transaction Documents), on or prior to the Closing
Date, duly authorized by all necessary corporate action, and no other action on
the part of Parent or Parent’s shareholders is necessary to authorize the
execution, delivery or performance by Parent of this Agreement or the
Transaction Documents to which it is or will be a signatory.  This Agreement has been, and each
Transaction Document to which Parent is to be a party will be, duly executed
and delivered by Parent and, assuming the due authorization, execution and
delivery by the other parties thereto, this Agreement constitutes, and each
Transaction Document to which Parent is to be a party, when so executed and
delivered, will constitute, legal, valid and binding obligations of Parent,
enforceable against Parent in accordance with their terms.

 

(b)         Purchaser has full
corporate power, authority and legal capacity to execute and deliver each
Transaction Document to which it will be a signatory, and to perform fully its
obligations thereunder.  The execution,
delivery and performance by Purchaser of each Transaction Document to which it
will be a signatory shall be, on or prior to the Closing Date, duly authorized
by all necessary corporate action.  Each
Transaction Document to which Purchaser is to be a party will be duly executed
and delivered by Purchaser and, assuming the due authorization, execution and
delivery by the other parties thereto, when so executed and

 

25

 

delivered, will
constitute, legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their terms.

 

6.3                                 Conflicts; Consents.  (a) 
Neither the execution and delivery by Parent of this Agreement nor the
execution and delivery by Parent and Purchaser of each Transaction Documents to
which Parent or Purchaser will be a party nor the consummation of the
transactions contemplated hereby or thereby nor the compliance by Parent or
Purchaser with any of the provisions hereof or thereof will (i) conflict
with or result in the breach of any provision of the certificate of
incorporation or by-laws or other organizational documents of Parent or
Purchaser or (ii) conflict with, violate, result in the breach or termination
of, or constitute a default or give rise to any right of termination or
acceleration or right to increase the obligations of or otherwise modify the
terms under, any material lease or Contract to which Parent or Purchaser or any
of their Affiliates is a party or by which it or any of their respective
properties or assets is bound or subject.

 

(b)         Other than the filing
with the U.S. Federal Trade Commission and the Antitrust Division of the U.S.
Department of Justice of a premerger notification and report form as required
by the HSR Act, no consent, approval or authorization of, permit from, or
declaration, filing or registration with, any Governmental Body is required to
be made or obtained by Parent, Purchaser or their Affiliates in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.

 

6.4                                 Litigation. 
There is no Legal Proceeding pending or, to the knowledge of Parent,
threatened against Parent or Purchaser which, individually or in the aggregate,
directly or indirectly, would reasonably be likely to have a material adverse effect
on Parent’s or Purchaser’s ability to effect the transactions contemplated
herein or in any of the Transaction Documents, nor is there any outstanding
judgment, decree or injunction, in each case against Parent or Purchaser, or
any statute, rule or order of any Governmental Body applicable to Parent or
Purchaser which has or would reasonably be likely to have, individually or in
the aggregate, a material adverse effect on Parent’s or Purchaser’s ability to
complete the transactions contemplated herein or in any of the other
Transaction Documents.

 

6.5                                 Brokers. 
Except for those Persons whose fees and expenses shall be the sole
responsibility of Parent or an Affiliate thereof, no Person has acted directly
or indirectly as a broker, finder or financial advisor for Parent or Purchaser
in connection with the negotiations relating to, or the transactions
contemplated by, the Transaction Documents and no Person is entitled to any fee
or commission or like payment in respect thereof based in any way on any
agreement, arrangement or understanding made by or on behalf of Parent or
Purchaser.

 

6.6                                 Financing Commitments.  (a) Parent has received (i) debt commitments
(the “Debt Commitment”), duly executed by the Lenders and Parent, (ii) a
subscription agreement (the “Equity Commitment”), duly executed by the
Equity Investors and (iii) an equity backstop (the “Equity Backstop”)
with respect to the Equity Commitment, duly executed by National Bank Financial
Inc.  A true and correct copy of the
Debt Commitment is attached hereto as Exhibits 6.6(i).  A true and correct copy of the Equity
Commitment in the form signed by the Equity Investors for an aggregate amount
of C$223,600,000 is attached hereto as 6.6(ii).  A true and correct copy of the Equity Backstop is attached hereto
as Exhibits 6.6(iii).  Parent shall

 

26

 

execute the Equity
Commitment no later than the first Business Day following the execution hereof.

 

(b)         The Debt Commitment,
Equity Commitment and Equity Backstop are in full force and effect.  Parent is aware of no reason within its
control why the conditions set forth therein would not be satisfied in a timely
manner.  The funds to be provided
pursuant to the Debt Commitment and Equity Commitment (or, in the event that
all or part of the Equity Commitment is no longer available, the Equity
Backstop) will be sufficient to pay the Adjusted Cash Consideration.

 

6.7                                 Acquisition of the Company Shares for
Investment; Ability to Evaluate and Bear Risk.  Parent is causing Purchaser to acquire the Company Shares for
investment and not with a view toward or for sale in connection with any
distribution thereof, or with any present intention of distributing or selling
the Company Shares.  Parent agrees that
the Company Shares may not be sold, transferred, offered for sale, pledged or
otherwise disposed of by Purchaser without registration under the Securities
Act of 1933, as amended, except pursuant to an exemption from such registration
available under such Act, and without compliance with state or foreign
securities laws, in each case, to the extent applicable.

 

6.8                                 Acknowledgement of Limitations of
Warranties.  Parent is an informed
and sophisticated participant in the transactions contemplated hereby and has undertaken
such investigation, and has been provided with and has evaluated such documents
and information, as it has deemed necessary in connection with the execution,
delivery and performance of this Agreement. 
Parent hereby acknowledges and agrees to the limitations on the
representations and warranties it is receiving and on which it is relying as
specified in the last paragraph of Article V.

 

ARTICLE VII

COVENANTS OF SELLER AND PURCHASER

 

7.1                                 Access to Properties and Records.  (a) 
After the date of this Agreement, Seller shall afford to representatives
of Parent reasonable access, during normal business hours and consistent with
Applicable Laws, to officers, directors and other key personnel of the Company,
its Subsidiaries and Circle K Licensing, the offices of the Company, its
Subsidiaries and Circle K Licensing and to their respective properties
(including the real property included in the Additional Assets and excluding the
real property included in the Excluded Assets), books and records; provided,
however, that such access shall be at reasonable times and upon reasonable
prior written notice and shall not unreasonably disrupt the personnel and
operations of the Company and its Subsidiaries.  All requests for access to such Persons, offices, properties,
books, and records shall be made to such of Seller’s representatives as Seller
shall designate, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder.

 

(b)         Any information provided
to Parent, or its representatives in accordance with Section 7.1(a) or
otherwise pursuant to this Agreement shall be held by Parent and its
representatives in accordance with, and shall be subject to, the terms of the
Confidentiality Agreement.

 

27

 

(c)          Following the Closing
Date, Parent agrees to (and shall cause Purchaser, the Company and their
respective Subsidiaries to) afford Seller’s representatives reasonable access,
during normal business hours and consistent with Applicable Laws, to the
offices of the Company and its Subsidiaries and to their respective properties,
books and records with respect to periods ending on or prior to the Closing
Date, to the extent that such access may be requested for any legitimate
purpose (including for the purpose of disputing the statements and calculations
described in Section 3.3(c) and for purposes of Articles VIII
and XII) at no cost to Seller (other than for reasonable out-of-pocket
expenses); provided, however, that such access shall be at
reasonable times and upon reasonable prior written notice and shall not
unreasonably disrupt the personnel and operations of the Company and its
Subsidiaries.  Nothing herein shall
limit any of Seller’s rights of discovery.

 

(d)         Parent agrees to cause
Purchaser to hold all of the books and records of the Company and its
Subsidiaries existing on the Closing Date and not to destroy or dispose of any
thereof for a period of five (5) years from the Closing Date or such longer
time as may be required by Applicable Laws,
and thereafter, if it desires to destroy or dispose of such books and records,
to offer first in writing at least sixty (60) days prior to such destruction or
disposition to surrender them to Seller; provided, that Purchaser may at
any time offer such books and records in writing to Seller and if Seller does
not notify Purchaser in writing that it desires to obtain such books and
records within sixty (60) days thereafter or does not arrange for the
transportation of such books and records to Seller, at Seller’s sole cost and
expense, within ninety (90) days thereafter, Purchaser may destroy or dispose
of such books and records.

 

7.2                                 Conduct of Business.  From the date of this Agreement through the Closing, except as
set forth in Schedule 7.2 or otherwise contemplated by this Agreement
(including, without limitation, Sections 7.5, 7.6 and 7.7) or any Transaction
Document and except as consented to by Parent (which consent shall not be
unreasonably withheld or delayed), Seller shall cause the Company, its
Subsidiaries and Circle K Licensing to:

 

(a)          operate the business of
the Company and its Subsidiaries in all material respects in the ordinary
course of business;

 

(b)         not make or revoke any
material Tax election or file Tax Returns on a basis inconsistent with those
prepared for prior taxable periods unless different treatment of any item is
required by any intervening change in Applicable Law;

 

(c)          not amend the certificate
of incorporation, by-laws or comparable governing documents of the Company or
any of its Subsidiaries;

 

(d)         not sell or agree to
issue or sell (i) any shares of capital stock of (or other ownership interests
in) the Company or any of its Subsidiaries or (ii) any Options with respect to
any shares of capital stock of the Company or any of its Subsidiaries;

 

(e)          except in the ordinary
course of business, not (i) sell, transfer or otherwise dispose of any of the
material assets of the Company and its Subsidiaries or (ii) create any new Lien
on the properties or assets of the Company and its Subsidiaries;

 

28

 

(f)            not (i) increase the
annual salary or hourly wage rate payable to any of the Company Employees, except
for increases in the ordinary course of business, (ii) enter into any contracts
of employment involving annual base compensation in excess of $100,000 (other
than contracts terminable by Purchaser without liability immediately following
the Closing) or (iii) amend in any material respect any of the Company Plans,
other than to transfer sponsorship (including any related assets and
liabilities) of any Company Plan to Seller;

 

(g)         not make any capital
expenditures except in the ordinary course of business to satisfy its
obligations under Section 7.9;

 

(h)         except in the ordinary
course of business or in connection with a lease pursuant to clause (i) below,
not incur any indebtedness for borrowed money;

 

(i)             not enter into any
lease for new equipment with a present value in excess of $500,000;

 

(j)             not enter into any
joint venture, partnership or other similar arrangement;

 

(k)          not purchase any
securities of any Person (other than short term cash investments); and

 

(l)             not enter into any
Contract to take any of the actions prohibited by any of the foregoing clauses.

 

7.3                                 Efforts. 
(a)  Each of the parties agrees
to use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions contemplated
hereby and to cooperate with the other in connection with the foregoing,
including using its reasonable best efforts (i) to obtain all necessary
waivers, consents and approvals from other parties to Material Contracts or
Additional Material Contracts, (ii) to obtain all consents, approvals and
authorizations that are required to be obtained under any Applicable Law,
including the expiration or early termination of the waiting period under the
HSR Act, (iii) to lift or rescind any injunction or restraining order or other
order adversely affecting the ability of the parties hereto to consummate the
transactions contemplated hereby, (iv) to effect all registrations and filings,
if any, necessary to consummate the transactions contemplated hereby, and (v)
to fulfill all conditions to this Agreement; provided, however,
with respect to any Material Contracts or Additional Material Contracts, except
as otherwise provided herein, if such waivers, consents, approvals and
authorizations cannot be obtained, the parties shall, to the extent
practicable, enter into alternative arrangements that result in Purchaser
receiving all the benefits and bearing all the costs, liabilities and burdens
with respect to any such Material Contracts or Additional Material Contracts
until such time as such consent, approval or authorization has been
obtained.  Seller and Parent further
covenant and agree, with respect to any threatened or pending preliminary or
permanent injunction or other order, decree or ruling or statute, rule,
regulation or executive order that would adversely affect the ability of the
parties hereto to consummate the transactions contemplated hereby, to use their
respective reasonable best efforts to prevent the entry, enactment or
promulgation thereof, as the case may be.

 

29

 

(b)         Parent shall exercise its
reasonable best efforts to avoid and eliminate any impediment under any antitrust
or trade regulation law that may be asserted by the Federal Trade Commission,
the Antitrust Division of the U.S. Department of Justice, or any other federal
or state antitrust reviewing agency (“Antitrust Authorities”), including
by offering and agreeing to the sale, transfer, license, hold separate,
divestiture or other disposal of any or all of the assets that are part of the
transactions contemplated by this Agreement, or any or all of Parent’s own
assets (including assets of its Subsidiaries), or any such other actions as are
required by the Antitrust Authorities. 
Parent and Seller shall supply all information required by any Antitrust
Authority as expeditiously as possible, and otherwise fully cooperate with each
other in connection with obtaining the necessary antitrust clearance.

 

7.4                                 Non-Solicitation of Employees.  Except as consented to in writing by the
Parent, which consent shall not be unreasonably withheld, Seller shall not, and
shall not suffer any of its Affiliates to, make any solicitation or offer, with
respect to employment after the Closing, to any Company Employee (including
Seller Affiliate Employees) other than Company Employees (including Seller
Affiliate Employees) to whom Purchaser elects not to offer employment pursuant
to the provisions of Section 9.1 until the second anniversary of the Closing
Date; provided, however, that the placing of advertisements for
employees which are not specifically directed at any such individual and their
ensuing hiring shall not be considered a breach of this Section 7.4.

 

7.5                                 Pre-Closing Transfers from Seller to the Company.  At or prior to Closing, Seller shall
transfer, assign and convey to the Company or one of its Subsidiaries the
assets (and any accompanying liabilities) listed in Schedule 7.5 (the “Additional
Assets”).

 

7.6                                 Pre-Closing Transfers from the Company
to Seller.  At or prior to Closing,
Seller shall cause Company to transfer, assign and convey to Seller or one of
its Affiliates the assets (and any accompanying liabilities) listed in Schedule
7.6 (the “Excluded Assets”), without representations or warranties and
without recourse.

 

7.7                                 Pre-Closing Transfers of Contracts.  Seller shall use its reasonable best efforts
to assign, or cause to be assigned, to Company or one of its Subsidiaries, at
or prior to Closing the contracts listed in Schedule 7.7 (the “Additional
Material Contracts”).

 

7.8                                 Financing. 
(a) Parent shall use its reasonable best efforts to promptly satisfy all
conditions within its control contained in the Debt Commitment and Equity
Commitment (or, in the event all or part of the Equity Commitment is no longer
available for any reason, the Equity Backstop), including delivering on a
timely basis of all financial and other required information (including the
delivery, on or before November 21, 2003, of the Financial Information with
respect to Parent).  Parent shall
promptly advise Seller of any developments with respect to the Debt Commitment,
Equity Commitment and Equity Backstop.

 

(b)         In the event that (i) the
Closing shall not have occurred on or prior to December 24, 2003 and (ii)
all of the conditions to Closing set forth in Article X other than the
condition set forth in Section 10.2(f) have been satisfied (or are capable of
being satisfied at Closing), then Parent shall, not later than December 24,
2003, make a Bridge Funding Request (as defined in the Debt Commitment).

 

30

 

(c)           Not later the date of
the signing of this Agreement, Parent shall give notice to the Equity Investors
to fund their respective portions of the Equity Commitment.  In the event that any Equity Investor has
not funded its portion of the Equity Commitment prior to October 6, 2003,
Parent shall sell to National Bank Financial Inc. such unfunded portion on such
date.

 

(d)         Seller shall, at the
request of Parent, make available to the Lenders and Equity Investors any
information which is reasonably available to the Seller and which is reasonably
required, and make available senior management and advisors of the Company and
its Subsidiaries, in order to satisfy the conditions set forth in the Debt
Commitment, Equity Commitment and Equity Backstop.  Seller shall use its reasonable best efforts to provide to Parent,
on or before November 21, 2003, of the Financial Information applicable to the
Company.

 

7.9                                 Capital Expenditure.  Seller covenants and agrees that the Company
and its Subsidiaries shall incur or commit for the period from and including
January 1, 2003 to and excluding the Closing Date capital expenditures
aggregating no less than Twenty Six Million Dollars ($26,000,000) multiplied by
a fraction the numerator of which is the number of days from and including
January 1, 2003 to and excluding the Closing Date and the denominator of which
is three hundred and sixty five (365).

 

7.10                           Monthly Store Financial Statements.  Seller shall promptly provide Parent with
any monthly financial statements and store-by-store profit and loss statements
which are prepared by the Company in the ordinary course of business for
management purposes.

 

7.11                           Further Assurances.  Parent and Seller agree (and Parent agrees to cause Purchaser) to
execute and deliver such instruments, and take such other actions, as may
reasonably be required, whether prior to, at or after the Closing, to carry out
the terms of this Agreement and the Transaction Documents and consummate the
transactions contemplated hereby and thereby.

 

7.12                           Confidentiality.  Subject to Section 8.10, following the Closing, each party shall
use commercially reasonably efforts to maintain the other party’s (and the
other party’s Affiliates’) proprietary and confidential information (“Confidential
Information”) in confidence. 
Notwithstanding the foregoing, if the party in possession of
Confidential Information becomes legally compelled to disclose any of such
Confidential Information, such party shall promptly notify the other party of
such legal requirement in order that the other party may have an opportunity to
seek a protective order or such other remedy as it may consider appropriate.

 

7.13                           Publicity. 
Neither Parent nor Seller, nor any of their respective Affiliates shall
issue or cause the publication of any press release or other internal or
external announcement with respect to this Agreement, the Transaction Documents
or the transactions contemplated hereby or thereby without prior consultation
with the other party, except as may be required by Applicable Laws or by any
listing agreement with a securities exchange or trading market and then only
after the other party has been afforded a reasonable opportunity to review and
comment on the same.

 

31

 

7.14                           Disclosure. 
Prior to Closing, each party shall promptly notify the other party of
any events, circumstances, facts or occurrences of which it becomes aware which
result in any breach of a representation or warranty or covenant (whether of
Parent or Seller) contained in this Agreement or any Transaction Document.

 

7.15                           Further Information.  After the Closing, Seller shall provide to
Parent any information reasonably available to it and not available to Parent
or the Company pertaining to the operations of the Company and its Subsidiaries
prior to Closing and required by Parent in the preparation of its financial statements
or to comply with applicable Canadian and U.S. securities legislation in
connection with a public offering or a private placement of, or an exchange
offer for, securities of the Parent or its Affiliates.

 

ARTICLE VIII

TAX MATTERS

 

8.1                                 Apportionment of Taxes.

 

(a)          Company Taxes.

 

(i)                                     In
order appropriately to apportion any Taxes relating to a period that includes
the Closing Date, the parties hereto will, to the extent permitted by
Applicable Law, treat or elect with the relevant taxing authority to treat, for
all purposes, the Closing Date as the last day of a taxable period of the
Company (a “Short Period”), and such period shall be treated as a Short
Period and a period ending prior to or on the Closing Date for purposes of this
Agreement.

 

(ii)                                  In
any case where Applicable Law does not permit the Company or one or more of the
Subsidiaries to treat the Closing Date as the last day of a Short Period with
respect to a taxable period that begins before the Closing Date and that ends
after the Closing Date (“Straddle Tax Periods”), then for purposes of
this Agreement, the portion of each Tax that is attributable to the operations
of whichever among the Company and the Subsidiaries cannot make the election
required by subsection (i) above, for the period which would have qualified as
a Short Period if such election had been permitted by Applicable Law (an “Interim
Period”) shall be (A) in the case of a Tax that is not based on net
income, such as real property taxes, personal property taxes and similar ad
valorem obligations, the total amount of such Tax for the period in
question multiplied by a fraction, the numerator of which is the number of days
in the Interim Period, and the denominator of which is the total number of days
in such Straddle Tax Period, and (B) in the case of a Tax that is based on
net income, or incurred upon the occurrence of an event or transaction (such as
sales tax), the Tax that would be due with respect to the Interim Period if
such Interim Period were a Short Period determined based upon an interim
closing of the books.

 

(iii)                               The
parties hereto agree that Seller is responsible for Taxes imposed on the
Company or any of its Subsidiaries arising in or relating to periods ending on
or prior to the Closing Date and, with respect to Straddle Tax Periods, Taxes
imposed on the Company or any of its Subsidiaries, which are allocable pursuant
to Section 8.1(a)(ii) to the portion of such period ending on the Closing Date
(provided, in each case, that Seller shall not be responsible for Taxes

 

32

 

incurred with respect to
extraordinary transactions occurring on the Closing Date out of the ordinary
course of business (other than the Pre-Closing Transfers, and Transfer Taxes
which shall be covered in Section 8.1(c)) and Purchaser is responsible for
Taxes arising in or relating to periods beginning after the Closing Date (or
Taxes incurred with respect to extraordinary transactions occurring on the
Closing Date out of the ordinary course of business (other than the Pre-Closing
Transfers, and Transfer Taxes which shall be covered in Section 8.1(c)).

 

(b)         Other Taxes.  Except as otherwise provided in this
Agreement, Parent and Seller agree that, as among Seller and Purchaser, (i)
Seller shall be responsible for all Taxes levied or imposed upon, or in
connection with, its assets or business other than with respect to the Company
and the Subsidiaries (including Taxes for which the Company or its Subsidiaries
are liable under Treasury Regulations section 1.1502-6 or otherwise as a result
of being included in a consolidated or combined tax group with Seller); and
(ii) Purchaser shall be responsible for its own income, franchise or other
Taxes, if any, arising from the transactions contemplated by this Agreement.  For the avoidance of doubt, Transfer Taxes
and other Closing expenses shall be governed solely by Section 8.1(c).

 

(c)          Transfer Tax and
Other Closing Expenses.  All
Transfer Taxes that may be imposed upon, or payable or collectible or incurred
in connection with, this Agreement and the transactions contemplated hereby
(other than Transfer Taxes and other Closing expenses in connection with the
Pre-Closing Transfers) shall be shared equally by Seller and Purchaser (and
Parent shall cause Purchaser to bear its 50% share).  All other expenses of Closing will be paid by the party liable
for such expense.

 

8.2                                 Tax Returns. 
(a)  Seller shall be responsible
for the timely filing (taking into account any extensions received from the
relevant Tax authorities) of all Tax Returns required by Applicable Law to be
filed by the Company or any of its Subsidiaries on or prior to the Closing
Date.

 

(b)         Parent shall be
responsible for, and shall cause the Company its Subsidiaries to, timely file
(taking into account any extensions received from the relevant Tax authorities)
all Tax Returns required by Applicable Law to be filed by the Company or any of
its Subsidiaries after the Closing Date (and, for the avoidance of the doubt,
shall not without the prior written consent of Seller file amended Tax Returns
with respect to Tax Returns filed by Seller, which consent shall not be
unreasonably withheld).  Seller shall
provide to Purchaser all information available to it and necessary for the
preparation of the foregoing.  For the
avoidance of doubt, all Tax Returns required by Applicable Law to be filed by
the Company or its Subsidiaries for taxable periods ending on or prior to the
Closing Date, even if not due until after the Closing Date, shall be the
responsibility of Seller.  Such Tax
Returns shall be prepared on a basis consistent with those prepared for prior
taxable periods unless a different treatment of any item is required by an
intervening change in law.  Seller shall
be entitled to review and comment on any Tax Return for the Company or any
Subsidiary for any taxable period that includes dates on or prior to the
Closing Date before it is filed.  Parent
shall submit a draft of any such Tax Return to Seller at least 75 days before
the date such Tax Return is required to be filed with the relevant Governmental
Body (taking into account any applicable extensions).  Seller shall have 25 days after the date of receipt thereof to
submit to Parent in writing Seller’s comments with respect to such Tax
Return.  Parent shall notify Seller
within 15 days after receipt of such comments of (x)

 

33

 

the extent, if any, to
which Parent accepts such comments and will file such Tax Return in accordance
therewith and (y) the extent, if any, to which Parent rejects such
comments.  To the extent Parent rejects
the comments of Seller, Parent and Seller shall, within five (5) days, submit
the items that are in dispute to the Accounting Firm for it to determine the
correct manner for reporting such items. 
Seller and Parent shall promptly provide to the Accounting Firm all
relevant information, and the Accounting Firm shall have 20 days to submit its
determination.  The determination of the
Accounting Firm shall be binding upon the parties, and Parent shall file such
Tax Return in accordance therewith.  The
fees and expenses of the Accounting Firm shall be paid one-half by Seller and
one-half by Parent.

 

8.3                                 Cooperation. 
After the Closing, Parent and Seller will make available to each other,
as reasonably requested, and to any taxing authority, all information, records
or documents relating to Taxes or potential liability of the Company or any of
its Subsidiaries for Taxes for all periods prior to or including the Closing
Date and will preserve such information, records or documents until the
expiration of any applicable statute of limitations or extensions thereof, provided,
however, that Seller shall not be obligated to provide information
relating to Taxes of Seller’s consolidated or combined tax group except to the
extent such information relates solely to the Company or its Subsidiaries, and
neither Seller nor Parent shall be obligated to make any disclosure that
reasonably could, as a result of such disclosure, have the effect of causing
the waiver of any legal privilege. 
Parent shall be responsible for timely notifying all applicable taxing
and assessment entities of the change in addressee(s) as well as mailing and
billing addresses for Tax correspondence.

 

8.4                                 Tax Indemnification.  Seller shall indemnify and hold Parent,
Purchaser and their Affiliates, including the Company or its Subsidiaries
(each a “Tax Indemnitee”) harmless from any and all Taxes allocated to
Seller pursuant to the provisions of Section 8.1, and Parent shall indemnify
and hold Seller harmless from any Taxes allocated to Purchaser pursuant to the
provisions of Section 8.1 (a payment made pursuant to this Section 8.4 being a
“Tax Indemnity Payment”), provided, that neither Seller nor
Parent shall have any obligation to pay an indemnity pursuant to this Article
VIII to the extent that the amount of Taxes for which there would be an
obligation to indemnify has already been reflected in the calculation of the
Closing Date Working Capital.

 

8.5                                 Refunds and Tax Benefits.  (a) 
Parent shall cause Purchaser to promptly pay to Seller an amount equal
to any refund, credit or Tax benefit (including any interest paid or credited
with respect thereto) relating to the Company or any of its Subsidiaries
received by a Tax Indemnitee of Taxes (i) relating to taxable periods ending on
or before the Closing Date or (ii) attributable to Taxes that gave rise to a
Tax Indemnity Payment attributable to Taxes that were reflected in the
calculation of the Closing Date Working Capital other than any refund, credit
or Tax benefit that was reflected in the calculation of the Closing Date
Working Capital.  Parent shall, if
requested by Seller and at Seller’s expense, file or cause the relevant entity
to file for and request any refund or credit which would give rise to a payment
under this Section 8.5.  Parent shall
permit Seller to control, at the Seller’s expense, the prosecution of any such
refund claim, and shall cause the relevant entity to authorize by appropriate
power of attorney such Person as Seller shall designate to represent such
entity with respect to such refund claim.

 

34

 

(b)         Any amount otherwise
payable under this Article VIII shall be reduced by any Tax benefit that a Tax
Indemnitee would not have otherwise been entitled to but for the Tax or
circumstances that gave rise to the obligation to make a Tax Indemnity
Payment.  If a Tax benefit is realized
by a Tax Indemnitee after the payment of a Tax Indemnity Payment then such Tax
Indemnitee shall pay an amount to the indemnitor equal to the Tax benefit
realized.  A Tax benefit will be
considered to be realized for purposes of this Section 8.5 at the time that it
is reflected on a Tax Return of a Tax Indemnitee.

 

(c)          Any amount payable under
this Article VIII shall include the payment of such amount, if any, as shall be
necessary to hold any Tax Indemnitee harmless on an after-tax basis from all
Taxes required to be paid by such Tax Indemnitee with respect to such payment.

 

8.6                                 Survival.  All
obligations under this Article VIII shall survive the Closing hereunder and
continue until 30 days following the expiration of the statute of limitations
on assessment of the relevant Tax, as such statute of limitations may be
extended by any waiver thereof; provided that Parent has notified Seller
of such extension within thirty (30) days following such extension becoming
effective.

 

8.7                                 Exclusive Remedy.  Notwithstanding anything to the contrary in this Agreement,
claims for indemnification under this Article VIII will be governed exclusively
by this Article VIII.  Claims for
breaches of representations and warranties contained in Section 5.7 that do not
result in indemnification pursuant to this Article VIII shall be governed by
Article XII.

 

8.8                                 Contests.  For
purposes of this Agreement, a “Contest” is any audit, court proceeding
or other dispute with respect to any Tax matter that affects the Company or any
of its Subsidiaries or the Additional Assets or the Excluded Assets, as the
case may be.  Unless Parent has
previously received written notice from Seller of the existence of such
Contest, Parent shall give written notice to Seller of the existence of any
Contest relating to a Tax matter that may result in Seller being required to
make a Tax Indemnity Payment under this Article VIII within ten (10) days from
the receipt by Parent of any written notice of such Contest but Parent’s
failure to provide Seller with such notice within such time shall not relieve
Seller of any liability hereunder except to the extent Seller is prejudiced
thereby.  Unless Seller previously has
received written notice from Parent of the existence of such Contest, Seller
shall give written notice to Parent of the existence of any Contest relating to
a Tax matter that may result in Parent being required to make a Tax Indemnity
Payment under this Article VIII within ten (10) days from the receipt by Seller
of any written notice of such Contest but Seller’s failure to provide Parent
with such notice within such time frame shall not relieve Parent of any
liability hereunder except to the extent Parent is prejudiced thereby.  Parent and Seller agree, in each case at no
cost to the other party, to cooperate with the other and the other’s representatives
in a prompt and timely manner in connection with any Contest.  Such cooperation shall include making
available to the other party, during normal business hours, all books, records,
returns, documents, files, other information (including working papers and
schedules), officers or employees (without substantial interruption of
employment) or other relevant information necessary or useful in connection
with any Contest requiring any such books, records and files, provided, however,
that Seller shall not be obligated to provide information relating to Taxes of
Seller’s consolidated or combined tax group except to the extent such
information relates solely to the Company or its Subsidiaries and neither
Seller nor Parent shall be obligated to make any disclosure that

 

35

 

reasonably could, as a
result of such disclosure, have the effect of causing the waiver of any legal
privilege.  Seller shall, at its
election, have the right to represent the Company’s or any of its
Subsidiaries’, as the case may be, interests in any Contest relating to a Tax
matter for which it may be required to make a Tax Indemnity Payment, to employ
counsel of its choice at its expense, and to control the conduct of such
Contest, including settlement or other disposition thereof, provided, however,
that Parent shall have the right to consult with Seller regarding any such
Contest that may affect the Company or its Subsidiaries for any periods ending
after the Closing Date at Parent’s own expense and provided, further,
that any settlement or other disposition of any such Contest may only be with
the consent of Parent, which consent will not be unreasonably withheld.  Purchaser shall have the right to control
the conduct of any Contest with respect to any Tax matter arising in a period
after the Closing Date for which the Seller does not have liability pursuant to
this Article VIII.

 

8.9                                 Tax Treatment of Price Adjustment and
Indemnification.  All amounts paid
pursuant to this Agreement by one party to another party (other than interest
payments) shall be treated by the parties as an adjustment to the Cash
Consideration.

 

8.10                           Waiver of Confidentiality.  Notwithstanding anything herein to the
contrary, except as reasonably necessary to comply with applicable securities
laws, each party to this Agreement (and each employee, representative or other
agent of such party) may (i) consult any tax advisor regarding the U.S. federal
income tax treatment or tax structure of the transactions contemplated hereby,
and (ii) disclose to any and all persons, without limitation of any kind, the
U.S. federal income tax treatment and tax structure of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the party relating to such tax treatment and
tax structure; provided that clause (ii) shall not apply until the
earliest of (x) the date of the public announcement of discussions relating to
the transactions contemplated hereby, (y) the date of the public announcement
of the transactions contemplated hereby or (z) the date of the execution of
this Agreement.  For this purpose, “tax
structure” is limited to any facts relevant to the U.S. federal or Canadian
income tax treatment of the transaction and does not include information relating
to the identity of the parties.

 

ARTICLE IX

PERSONNEL, EMPLOYMENT ARRANGEMENTS AND EMPLOYEE BENEFITS

 

9.1                                 Offer of Employment.  On or prior to the Closing Date, Seller shall terminate the
employment of all Seller Affiliate Employees. 
Seller shall be solely responsible for all severance liabilities, any
liabilities under or pursuant to any Seller Plan and any other claims from, or
liabilities and obligations to, each Seller Affiliate Employee incurred prior
to or as a result of such termination. 
At least ten (10) days prior to the Closing Date, Parent shall cause
Purchaser to offer to employ the Seller Affiliate Employees as selected by
Parent in accordance with the provisions hereof and Applicable Law.  Parent shall deliver to Seller at least ten
(10) days prior to the Closing Date a list of the Seller Affiliate Employees to
which Parent does not intend to cause Purchaser to offer employment.  With respect to each employee not named on
the foregoing list, Parent shall cause Purchaser to offer to employ such
individual in a position of similar responsibility to the position such
employee holds immediately prior to the Closing Date.  Seller Affiliate Employees who accept such offer of employment
shall be treated for all purposes

 

36

 

under this Agreement as
Company Employees and shall become exclusively employees of the Company or one
of its Subsidiaries effective as of the Closing Date.  Effective as of the Closing Date, the Company shall assume and be
solely responsible for any and all claims, liabilities and obligations, whether
contingent or otherwise, in respect of each such Seller Affiliate Employee that
accrues or is incurred by or becomes payable with respect to such Seller
Affiliate Employee on or after the Closing Date.

 

9.2                                 Continuation Period.

 

(a)          Subject to the
provisions of Section 9.1, for the one-year period ending on the first
anniversary of the Closing Date (the “Continuation Period”), Parent
shall cause Purchaser or the Company and its Subsidiaries to provide each
Company Employee (including Seller Affiliate Employees who are deemed to be
Company Employees pursuant to Section 9.1), during any portion of the
Continuation Period that such employee is employed by the Company or any such
Subsidiary, (i) an annual salary or hourly wage rate, as applicable, that is no
less than the annual salary or hourly wage rate payable to such employee
immediately prior to the Closing Date, (ii) an annual variable compensation
bonus opportunity with target payouts that are no less than those applicable to
such employee immediately prior to the Closing Date and (iii) (A) with respect
to Seller Affiliate Employees who are deemed to be Company Employees pursuant
to Section 9.1, welfare benefits (other than severance benefits) that are
substantially similar in the aggregate to the welfare benefits (other than
severance benefits) provided to similarly situated employees of Parent with
similar duties and responsibilities and (B) with respect to Company Store Employees,
welfare benefits (including severance benefits) that are substantially similar
in the aggregate to the welfare benefits (including severance benefits) that
are provided to similarly situated employees of Parent with similar duties and
responsibilities.  Notwithstanding any
other provision herein, none of the Company, any of its Subsidiaries, Parent or
Purchaser will have any obligation to continue the employment of any such
Company Employee (including any Seller Affiliate Employee who is deemed to be a
Company Employee pursuant to Section 9.1) for any period following the Closing
Date.

 

(b)         With respect to employee
benefit plans, if any, of Parent, Purchaser or their Subsidiaries in which
Company Employees (including Seller Affiliate Employees who are deemed to be
Company Employees pursuant to Section 9.1) become eligible to participate after
the Closing (the “Purchaser Plans”), Parent shall, or shall cause
Purchaser, the Company or its Subsidiaries to: (i) waive all limitations as to
pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements for the plan year that includes the
Closing Date applicable to the Company Employees under any welfare plan that
such Company Employees may be eligible to participate in after the Closing,
(ii) provide each such Company Employee with credit towards any applicable
deductible or out-of-pocket requirements under any welfare plans that such
Company Employees are eligible to participate in after the Closing and (iii) provide
each Company Employee with credit for all service with Seller, the Company or
its Subsidiaries under each Purchaser Plan in which such Company Employees are
eligible to participate; provided however, that in no event shall the Company
Employees be entitled to any credit to the extent that it would result in a
duplication of benefits with respect to the same period of service.  With respect to any accrued but unused
vacation time to which any Company Store Employee is entitled pursuant to the
vacation policy applicable to such employee immediately prior to the Closing
Date, Parent shall cause Purchaser to credit such Company

 

37

 

Store Employee with such
accrued vacation to the extent accrued as a liability in the Closing Date
Working Capital.

 

(c)          Seller shall be
responsible to provide continuation coverage, in accordance with Section 4980B
of the Code, to all Company Employees and “qualified beneficiaries” (within the
meaning of Section 4980B of the Code) of any such employee who, as of the
Closing Date, is receiving or is eligible to elect to receive, such
continuation coverage, or who become eligible for such continuation coverage on
the Closing Date as a result of the consummation of the transactions contemplated
hereby or in any of the Transaction Documents.

 

(d)         Effective as of the
Closing Date, Parent shall, or shall cause Purchaser, the Company or any of its
Subsidiaries to, permit Company Employees who participated in the
ConocoPhillips Savings Plan, the Conoco Thrift Plan, the ConocoPhillips Store
Savings Plan or the Conoco Retail Thrift Plan (the “Seller DC Plans”) to
participate in a defined contribution plan of Parent’s Subsidiaries applicable
to employees in the United States (the “Purchaser DC Plan”).  The Purchaser DC Plans shall (i) recognize
for purposes of eligibility and vesting the service of the Company Employees
which was recognized under the applicable Seller DC Plan and (ii) permit the
Company Employees to rollover their vested interests in the applicable Seller
DC Plan into the Purchaser DC Plan.

 

(e)          Prior to the Closing
Date, the Seller shall cause the Company to transfer sponsorship of the Circle
K Holdings, Inc. Management Deferral Plan, the Circle K Short Term Disability
Plan to the Seller and the Seller shall assume such sponsorship and all
liabilities with respect thereto and the Circle K Stores Inc. Employee Benefit
Plan.

 

ARTICLE X

CONDITIONS PRECEDENT TO OBLIGATIONS
TO CLOSE

 

10.1                           Conditions to Obligation of Each Party to Close.  The respective obligations of each party to
effect the transactions contemplated hereby shall be subject to the satisfaction
or waiver at or prior to the Closing Date of the following conditions:

 

(a)          no preliminary or
permanent injunction or other order of any Governmental Body nor any Applicable
Law shall have become effective restraining, enjoining or otherwise prohibiting
or making illegal the consummation of any transactions contemplated by this
Agreement or any Transaction Document; and

 

(b)         all material consents,
approvals and authorizations required to be obtained under any Applicable Laws
relating to the transactions contemplated hereby shall have been obtained in
form and consent reasonably satisfactory to the parties and all required
filings, if any, under any Applicable Laws, including the HSR Act, shall have
been made and any required waiting period under such Applicable Laws applicable
to the transactions contemplated by this Agreement shall have expired or been
earlier terminated.

 

10.2                           Conditions to Parent’s Obligation to
Close.  Parent’s obligation to
effect the transactions contemplated hereby shall be subject to the
satisfaction or waiver on or prior to the Closing Date of all of the following
conditions:

 

38

 

(a)          each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct, as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a specific
date, which shall be true and correct as of that date), except where the
failure to be so true and correct would not, individually or in the aggregate,
have or be reasonably likely to have a Material Adverse Effect;

 

(b)         the covenants and agreements
of Seller to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects, including
the transfer, assignment and conveyance of the Additional Assets as provided in
Section 7.5;

 

(c)          Parent shall have
received at the Closing a certificate dated the Closing Date and validly
executed and delivered on behalf of Seller certifying as to the matters
specified in Sections 10.2(a) and 10.2(b);

 

(d)         Parent shall have
received the documents referred to in Section 11.1;

 

(e)          There shall not have
occurred and be continuing any Material Adverse Effect; and

 

(f)            Parent shall have
received financing proceeds in an aggregate amount and on terms and conditions
substantially as described in and consistent in all material respects with the
Debt Commitment and Equity Commitment (or the Equity Backstop).

 

10.3                           Conditions to Seller’s Obligation to
Close.  The obligations of Seller to
effect the transactions contemplated hereby shall be subject to the satisfaction
or waiver on or prior to the Closing Date of all of the following conditions:

 

(a)          each of the
representations and warranties of Parent contained in this Agreement shall be
true and correct in all material respects, as of the Closing Date as though
made on and as of the Closing Date (except for representations and warranties
made as of a specific date, which shall be true and correct as of that date);

 

(b)         the covenants and
agreements of Parent to be performed on or before the Closing Date in accordance
with this Agreement shall have been duly performed in all material respects;
and

 

(c)          Seller shall have
received at the Closing a certificate dated the Closing Date and validly
executed on behalf of Parent certifying as to the matters specified in Sections
10.3(a) and 10.3(b); and

 

(d)         Seller shall have
received the payments and documents referred to in Section 11.2.

 

ARTICLE XI

CLOSING

 

11.1                           Deliveries by Seller to Parent.  At the Closing (or at any date specified
hereafter and mutually agreed to by Seller and Parent) Seller shall deliver to
Parent:

 

39

 

(a)          Certificates evidencing
the Company Shares together with a stock power or other instrument sufficient
to convey the Company Shares to Purchaser, which instrument shall have been
duly executed by Seller;

 

(b)         a copy, duly executed by
Seller, of the Transition Services Agreement (the “Transition Services
Agreement”), substantially in the form attached hereto as Exhibit 11.1(b);

 

(c)          a copy, duly executed by
Seller, of the Phillips 66 Trademark License Agreement (the “Phillips 66
Trademark License”), substantially in the form attached hereto as Exhibit
11.1(c)

 

(d)         a copy, duly executed by
Seller, of the Union 76 Trademark License Agreement (the “Union 76 Trademark
License”), substantially in the form attached hereto as Exhibit 11.1(d);

 

(e)          a copy, duly executed by
Seller and TMC Franchise Corporation, of the Circle K License Agreement (the “Franchise
License”), substantially in the form attached hereto as Exhibit 11.1(e);

 

(f)            a copy, duly executed
by Seller and TMC Franchise Corporation, of the Circle K Conversion Agreement
(East Coast) (the “Conversion Agreement (East Coast)”) substantially in
the form attached hereto as Exhibit 11.1(f);

 

(g)         a copy, duly executed by
Seller and TMC Franchise Corporation, of the Circle K Conversion Agreement
(West Coast) (the “Conversion Agreement (West Coast)”) substantially in
the form attached hereto as Exhibit 11.1(g);

 

(h)         a copy, duly executed by
Seller, of the Supply Agreement (the “Supply Agreement”), substantially
in the form attached hereto as Exhibit 11.1(h);

 

(i)             a copy, duly executed
by Seller at the time of execution hereof, of the Environmental Liabilities
Agreement (the “Environmental Liabilities Agreement”), substantially in
the form attached hereto as Exhibit 11.1(i);

 

(j)             a copy, duly executed
by Seller, of the Credit Card Services Agreement (the “Credit Card Services
Agreement”), substantially in the form attached hereto as Exhibit 11.1(j);

 

(k)          a copy, duly executed by
Seller, of the Real Estate Indemnity Agreement (the “Real Estate Indemnity
Agreement”), substantially in the form attached hereto as Exhibit 11.1(k);

 

(l)             a copy, duly executed
by Seller, of the Reseller Agreement (the “Reseller Agreement”),
substantially in the form attached hereto as Exhibit 11.1(l); and

 

(m)       a copy, duly executed by
Seller, of the Car Wash Trademark License Agreement (the “Car Wash Trademark
License Agreement”), substantially in the form attached hereto as Exhibit
11.1(m);

 

(n)         a copy, duly executed by
Seller, of the Tempe Office Lease (the “Tempe Office Lease”)
substantially in the form attached hereto as Exhibit 11.1(p);

 

40

 

(o)         resignations and releases
from all directors of the Company and its Subsidiaries, in form and content
reasonably acceptable to Purchaser;

 

(p)         a certificate of
non-foreign status executed by Seller and satisfying the requirements of
§1.1445-2(b)(2)(i) of the United States Treasury Regulations promulgated under
the Code; and

 

(q)         the certificate referred
to in Section 10.2(c).

 

11.2                           Deliveries by Parent to Seller.  At the Closing (or at any date specified
hereafter and mutually agreed to by Seller and Parent) Parent shall deliver to
Seller:

 

(a)          a wire transfer of
immediately available U.S.  dollar funds in the amount specified in
Section 3.1;

 

(b)         a copy, duly executed by
Purchaser, of the Transition Services Agreement;

 

(c)          a copy, duly executed by
Purchaser, of the Phillips 66 Trademark License;

 

(d)         a copy, duly executed by
Purchaser, of the Union 76 Trademark License;

 

(e)          a copy, duly executed by
Purchaser, of the Supply Agreement;

 

(f)            a copy, duly executed
by Parent at the time of execution hereof, of the Environmental Liabilities
Agreement;

 

(g)         a copy, duly executed by
Purchaser, of the Credit Card Services Agreement;

 

(h)         a copy, duly executed by
Purchaser, of the Real Estate Indemnity Agreement;

 

(i)             a copy, duly executed
by Purchaser, of the Reseller Agreement;

 

(j)             a copy, duly executed
by Purchaser, of the Car Wash Trademark License Agreement;

 

(k)          a copy, duly executed by
Purchaser, of the Tempe Office Lease; and

 

(l)             the certificate
referred to in Section 10.3(c).

 

ARTICLE XII

INDEMNIFICATION AND RELATED MATTERS

 

12.1                           Indemnification by Seller.  (a) 
Subject to the express provisions of this Article XII and except as
otherwise provided in Article VIII, Seller shall indemnify, defend and hold
harmless Parent, Purchaser, their Affiliates and the respective officers,
directors, employees and agents of Parent, Purchaser and their Affiliates
(collectively, the “Purchaser Indemnified Parties”) from and against all
claims, losses, damages and costs (including, without limitation, the
reasonable fees and expenses of counsel) fines and penalties, whether or not
involving a

 

41

 

Third Party Claim
(collectively, “Losses”) incurred or suffered by a Purchaser Indemnified
Party, but only to the extent attributable to:

 

(i)                                     any
inaccuracy in any material respect as of the Closing Date of any representation
or warranty made by Seller in Article V of this Agreement (it being understood
that, for purposes of this Article XII, such representations and warranties
will be interpreted without giving effect to any qualifications or limitations
as to “materiality” or “Material Adverse Effect”);

 

(ii)                                  any
breach by Seller of any of its covenants under this Agreement;

 

(iii)                               any
Legal Proceeding filed against or served on the Company or its Subsidiaries as
of the Closing Date;

 

(iv)                              any
liabilities for payments to the directors, officers and/or employees of the
Company or any of its Subsidiaries not in the ordinary course of business,
including retention bonuses, stay pay, termination, indemnity, severance,
damage, claim or other payment bonuses, in each case to the extent such
obligation arose (i) in connection with the consummation of the
transactions contemplated by this Agreement and (ii) prior to the Closing
Date; and

 

(v)                                 any
liabilities, including funding liabilities, with respect to the Seller Plans or
the Seller DC Plans.

 

(b)         Notwithstanding any
provision to the contrary:

 

(i)                                     Seller
shall have no liability under Section 12.1(a)(i) in connection with any
claim unless and until the aggregate liability that Seller would, but for this
Section 12.1(b)(i), have in connection with such claim for any inaccuracy
or breach, exceeds an amount equal to $50,000, in which case Seller shall be
liable from the first dollar with respect to such claim; provided, however,
that if such claim is a Common Claim, then Seller shall be liable from the
first dollar with respect to such claim;

 

(ii)                                  Seller
shall have no liability under Section 12.1(a)(i) unless and until the
aggregate liability of Seller would, but for this Section 12.1(b)(ii),
have exceeded on a cumulative basis an amount equal to $5,000,000, and then
only to the extent of such excess; provided, however, that if the
aggregate liability of Seller would, but for this Section 12.1(b)(ii),
have exceeded on a cumulative basis an amount equal to $10,000,000, Seller
shall be liable for such aggregate liability from the first dollar;

 

(iii)                               the
aggregate liability of Seller under Section 12.1(a)(i) shall not exceed
20% of the Adjusted Cash Consideration; and

 

(iv)                              no
Purchaser Indemnified Party may make any claim for indemnification under this
Article XII if it may make a claim for indemnification with respect to the
pertinent subject matter under another Transaction Document (whether or not
such claim results in a payment of indemnification to any Purchaser Indemnified
Party).

 

42

 

For purposes of
this Section 12.1, “Losses” shall include both capital improvement costs and
compensatory monetary damages for violations of law prior to Closing but shall
exclude cost incurred to comply with law on an ongoing basis (to the extent
such ongoing costs are incurred following the Closing).

 

(c)          Except for the
indemnification set forth in Section 12.1(a)(iii) and 12.2(a)(iii) with respect
to Third-Party Claims, the indemnifications set forth in this Agreement shall
specifically exclude Losses arising from or related to the presence or Release
of Hazardous Substances, or compliance with Environmental Laws, the terms of
which shall be governed by the Environmental Liabilities Agreement.

 

(d)         To the extent not
transferred by the Company to Seller prior to Closing, Parent agrees to cause
the Purchaser Indemnified Parties to assign to Seller all rights (whether such
rights arise from insurance, contract, statute or otherwise) that the Purchaser
Indemnified Parties may have relating to the liabilities for which Seller,
pursuant to this Section 12.1, has indemnified, is in the process of
indemnifying or has expressly committed to indemnify Purchaser Indemnified
Parties, whether such rights arise prior to or following the Closing.  Following the Closing, Parent shall, and
shall cause the Purchaser Indemnified Parties to, cooperate with Seller in the
enforcement of any such rights, including by making available books, records,
contractual agreements, maintenance histories and all other reasonably
necessary items (including the computer systems housing such information) and
by making available employees on a mutually convenient basis.  Parent shall, and shall cause the Purchaser
Indemnified Parties to, promptly transfer upon receipt any funds received in
connection with such rights.

 

12.2                           Indemnification by Parent.  (a) 
Subject to the express provisions of this Article XII and except as
otherwise provided in Article VIII, Parent shall indemnify, defend and hold
harmless Seller, its Affiliates and the respective officers, directors,
employees and agents of Seller and its Affiliates (collectively, the “Seller
Indemnified Parties”) from and against all Losses incurred or suffered by a
Seller Indemnified Party, but only to the extent attributable to:

 

(i)                                     any
inaccuracy in any material respect as of the Closing Date of any representation
or warranty, made by Parent in this Agreement (it being understood that, for purposes
of this Article XII, such representations and warranties will be interpreted
without giving effect to any qualifications or limitations as to “materiality”
or “Material Adverse Effect”);

 

(ii)                                  any
breach by Parent of any of its covenants under this Agreement;

 

(iii)                               any
Legal Proceeding relating to the operations of the Company or its Subsidiaries
other than those specified in Sections 12.1(a)(iii); or

 

(iv)                              payment
or performance by Seller or its Subsidiaries after the Closing under guarantees
of obligations of the Company or its Subsidiaries (other than guarantees
specified in the Real Estate Indemnity Agreement as liabilities of Seller).

 

(b)         Notwithstanding any
provision to the contrary:

 

43

 

(i)                                     Parent
shall have no liability under Section 12.2(a)(i) in connection with any
claim unless and until the aggregate liability that Seller would, but for this
Section 12.2(b)(i), have in connection with such claim for any inaccuracy
or breach, exceeds an amount equal to $50,000,
in which case Parent shall be liable from the first dollar with
respect to such claim; provided, however, that if such claim is a
Common Claim, then Parent shall be liable from the first dollar with respect to
such claim;

 

(ii)                                  Parent
shall have no liability under Section 12.2(a)(i) unless and until the aggregate
liability of Parent would, but for this Section 12.2(b)(ii), have exceeded
on a cumulative basis an amount equal to $ 5,000,000  and then only to the extent of such excess; provided, however,
that if the aggregate liability of Parent would, but for this
Section 12.1(b)(ii), have exceeded on a cumulative basis an amount equal
to $10,000,000, Parent shall be liable for such aggregate liability from the
first dollar;

 

(iii)                               the
aggregate liability of Parent under Section 12.2(a)(i) shall not exceed 20% of
the Adjusted Cash Consideration; and

 

(iv)                              no
Seller Indemnified Party may make any claim for indemnification under this
Article XII if it may make a claim for indemnification with respect to the
pertinent subject matter under another Transaction Document (whether or not
such claim results in a payment of indemnification to any Seller Indemnified
Party).

 

12.3                           Procedures for Indemnification.  (a) 
If any suit, action, proceeding, investigation, claim or demand shall be
brought or asserted by any third Person (including, without limitation, any
Governmental Body) (a “Third Party Claim”) against any Person in respect
of which indemnity may be sought pursuant to Section 12.1 or Section 12.2,
such person (the “Indemnified Person”) shall notify the Person against
whom such indemnity may be sought (the “Indemnifying Person”) in writing
in reasonable detail of the Third Party Claim within 30 days after receipt by
such Indemnified Person of formal notice of such Third Party Claim, and,
thereafter, such Indemnified Person shall promptly forward to the Indemnifying
Person a copy of all notices and documents (including court papers) received by
the Indemnified Person pursuant to the Third Party Claim; provided, however,
that the failure to give such notification within 30 days after such receipt of
formal notice and the failure to forward a copy of such notices and documents
shall not affect the obligations of the Indemnifying Person or the rights of
the Indemnified Person except to the extent the Indemnifying Person has
actually been prejudiced in a material way as a result of such failure.  Upon the receipt by the Indemnifying Person
of notice of a Third Party Claim, the Indemnifying Person may elect  to assume the defense of such Third Party
Claim by promptly delivering a notice to the Indemnified Person of the
assumption of such defense and to retain defense counsel to represent the
Indemnified Person.  Any election made
by an Indemnifying Person to assume the defense of a Third Party Claim shall
not be deemed an acknowledgement that such Third Party Claim is subject to
indemnification under this Article XII. 
If the Indemnifying Person so elects to assume the defense of a Third
Party Claim, then (i) the Indemnified Person may participate in such
defense and employ counsel, at such Indemnified Person’s expense, separate from
the reasonably acceptable counsel employed by the Indemnifying Person, but the
Indemnifying Person shall control such defense and shall not be liable to such
Indemnified Person for the fees and expenses of the separate counsel retained
by such Indemnified Person, and (ii) the Indemnified Person and any other
Indemnified Persons will

 

44

 

cooperate with the
Indemnifying Person in such defense, including by providing, upon the
reasonable request of the Indemnifying Person, books, records, contractual
agreements, maintenance histories and all other reasonably necessary items
(including the computer systems housing such information) and by making
available employees on a mutually convenient basis.  The Indemnifying Person shall not be liable for any settlement of
any Third Party Claim effected without its prior written consent.  No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened Third Party Claim in respect of which such Indemnified
Person is or could have been a party, or is or could have been subject, and in
respect of which indemnity is or could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all Losses related to the subject matter of such
pending or threatened Third Party Claim. 
The Indemnifying Party shall, at any time, be entitled to elect to no
longer defend a Third Party Claim; provided, that the Indemnifying
Person shall reasonably assist in transitioning the defense of such Third Party
Claim back to the Indemnified Person and that the Indemnifying Person shall not
be entitled to make a claim for reimbursement of expenses incurred in
connection with its assumption of the defense of such Third Party Claim.

 

(b)         In the event any
Indemnified Person should have a claim against the Indemnifying Person under
this Article XII that does not involve a Third Party Claim being asserted
against such Indemnified Person, the Indemnified Person shall deliver written
notice of such claim, specifying with particularity and detail the nature of
such claim, with reasonable promptness to the Indemnifying Party.  The failure by the Indemnified Person to
deliver such notification shall not relieve the Indemnifying Person from any
liability which it may have to such Indemnified Person under this Article XII,
except to the extent the Indemnifying Person has actually been prejudiced in a
material way by such failure.  If the
Indemnifying Person objects to such claim in a timely manner, the Indemnified
Person and the Indemnifying Person shall proceed in good faith to resolve such
dispute and, upon the failure to resolve such dispute, the parties may pursue
remedies in accordance with Section 14.3.

 

(c)          Notwithstanding anything
herein to the contrary, neither party to the Agreement shall be obligated to
make indemnification payments under this Article XII with respect to Losses
attributable to inaccuracies of representations or warranties unless the
Indemnified Person shall have delivered to the Indemnifying Person written notification,
specifying with particularity and detail the nature of such inaccuracy,
pursuant to Sections 12.1 and 12.2, on or before:

 

(i)                                     the
18-month anniversary of the Closing Date with respect to all representations
and warranties, except for those set forth in Sections 5.3 and 5.7 and, to the
extent relating to claims arising under the Code, Section 5.12;

 

(ii)                                  sixty
(60) days after the underlying obligation is barred by the applicable statute
of limitations under Applicable Laws with respect to the representations and
warranties set forth in Section 5.7 and, to the extent relating to claims
arising under the Code, Section 5.12;

 

(iii)                               at
any time with respect to those representations and warranties set forth in
Section 5.3.

 

45

 

(d)         The amount that any
person shall be obligated to pay pursuant to this Article XII with respect to
any Loss (a) shall be reduced by the Tax benefit actually realized, and by any
insurance proceeds received by the indemnified Person as a result of any such
Loss and (b) shall include the payment of such amount, if any, as shall be
necessary to hold any Indemnified Person harmless on an after-tax basis from
all Taxes required to be paid by such Indemnified Person with respect to such
amount.

 

(e)          Except as otherwise
provided in Article VIII, the remedies provided in this Article XII shall be
exclusive and shall preclude assertion by an Indemnified Person of any other
rights or the seeking of any and all other remedies against an Indemnifying
Person for claims based on this Agreement.

 

ARTICLE XIII

TERMINATION

 

13.1                           Termination. 
This Agreement may be terminated before the Closing Date only, and then
only by any of the following:

 

(a)          by the written agreement
of Parent and Seller;

 

(b)         at the election of Parent
if any condition set forth in Section 10.1 or 10.2 becomes incapable of
fulfillment and is not waived by Parent, provided, however that
any such condition relating to a breach or a failure to perform a
representation, warranty, covenant or other agreement shall be a cause for
termination of this Agreement only if such breach or failure cannot be or has
not been cured within 30 days after the giving of written notice of such breach
or failure to Seller, such notice to be given promptly after Parent becomes
aware of such breach of failure;

 

(c)          at the election of
Seller if any condition set forth in Section 10.1 or 10.3 becomes incapable of
fulfillment and is not waived by Seller, provided, however that
any such condition relating to a breach or a failure to perform a
representation, warranty, covenant or other agreement shall be a cause for
termination of this Agreement only if such breach or failure cannot be or has
not been cured within 30 days after the giving of written notice of such breach
or failure to Parent, such notice to be given promptly after Seller becomes
aware of such breach of failure;

 

(d)         at the election of Parent
or Seller, if the Closing shall have not occurred by December 31, 2003 (other
than as a result of a breach of this Agreement by the party seeking
termination).

 

13.2                           Liabilities After Termination.  Upon termination of this Agreement pursuant
to Section 13.1, no party shall thereafter have any further liability or
obligation hereunder; provided, however, that such termination
shall not relieve any party of any liability for any knowing and willful breach
of this Agreement prior to the date of such termination.

 

46

 

ARTICLE XIV

 

MISCELLANEOUS

 

14.1                           Entire Agreement.  This Agreement, together with the other Transaction Documents,
constitutes the entire agreement and supersedes all prior written and oral
agreements among the parties hereto and their respective Affiliates with respect
to the subject matter hereof; provided that the Confidentiality Agreement shall
survive the execution and delivery of this Agreement until the occurrence of
the Closing.

 

14.2                           Governing Law.  This Agreement shall be construed and enforced in accordance
with, and shall be governed by, the laws of the State of New York without
regard to conflicts of law provisions except that New York General Obligations
Law Section 5-1401 shall apply.

 

14.3                           Arbitration. 
Except as otherwise explicitly set forth herein (including in
Section 3.3), all disputes and differences arising out of or in connection
with this Agreement (including those arising out of or in connection with
Article XII), shall be submitted to arbitration for final and definitive
determination in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the “AAA”) then in effect.  Such arbitration shall be conducted by a
panel of three arbitrators in the City of New York, New York.  Either party may initiate arbitration of any
such dispute under this Agreement by giving a written demand for arbitration to
the other party.  Within thirty days
after the date of that demand for arbitration, Seller and Parent each shall
select a single arbitrator and notify the other party of the identity of its
selection.  The two selected arbitrators
shall together select the third arbitrator from the list submitted by the AAA
within the next thirty-day period.  Any
judgment or award rendered by the arbitration panel may be entered by any court
having jurisdiction.

 

14.4                           Severability. 
In the event that any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby so
long as the remaining provisions do not fundamentally alter the relations among
the parties hereto.

 

14.5                           Expenses. 
Subject to Section 3.3(e), Article VIII and Article XII, each of the
parties hereto shall bear its own expenses (including, without limitation, fees
and disbursements of its counsel, accountants and other experts) incurred by it
in connection with the preparation, negotiation, execution, delivery and
performance of this Agreement and the other Transaction Documents, the
consummation of the transactions contemplated hereby and thereby, and in
connection with any Contests relating to a Tax matter.

 

14.6                           Table of Contents and Headings.  The table of contents and section headings
of this Agreement are for reference purposes only and are to be given no effect
in the construction or interpretation of this Agreement.

 

14.7                           Notices.  All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission) and shall be given to a party at the
following address (or to such other address as such party may have specified by
notice given to the other parties pursuant to this provision):

 

47

 

If to Seller to:

 

ConocoPhillips

McLean Building, Room ML 2066

Houston, TX  77079

Attn:                    W.
Thomas Skok

Fax:                           (281)
293-3700

 

with a copy to:

 

Cleary, Gottlieb, Steen
& Hamilton

One Liberty Plaza

New York, NY 10003

Attn:                    Laurent
Alpert

Fax:                           (212)
225-3999

 

If to Parent to:

 

Alimentation Couche-Tard
Inc.

1600 St.Martin Boulevard West

Tower B, Suite 280

Laval, Quebec, Canada (H7G 4S7)

Attn:                    Richard
Fortin

Fax:                           (450)
662-7537

 

with a copy to:

 

Davies Ward Phillips
& Vineberg

1501 McGill College Avenue

26th Floor, Montreal, Canada (H3A 3N9)

Attn:                    Michel
Pelletier

Fax:                           (514)
841-6499

 

All such notices, requests and other communications
shall be deemed received on the day of receipt by the recipient thereof if
received prior to 5:00 p.m. in the place of receipt and such day is a business
day in the place of receipt; otherwise, such notices, requests or communications
shall be deemed to have been received on the next succeeding business day in
the place of receipt.

 

14.8                           Binding Effect; Beneficiaries; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties and, with respect to Article XII, the
Indemnified Persons, and the successors and permitted assigns of each of the
foregoing.  Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
Person not party to this Agreement other than as set forth in Article IX.  No party may transfer any of its rights or
obligations hereunder without the express written consent of each other party
hereto, and any such attempted transfer in violation of this Section 14.8
shall be null and void.  Notwithstanding
the foregoing, (i) each of Parent and Seller may assign its rights or
delegate the performance of its obligations hereunder to any of its
Subsidiaries and (ii) Parent may assign any

 

48

 

or all of its rights and
interests hereunder to its senior lenders and the agents therefor as collateral
security for Parent’s obligations under its credit facility with such lenders
and agents, as such credit facility may be amended, supplemented or otherwise
modified from time to time, provided that Parent or Seller, as the case
may be, shall remain fully liable for the performance of its obligations
hereunder.

 

14.9                           Amendments. 
This Agreement may be amended, supplemented or modified, and any
provision hereof may be waived, only pursuant to a written instrument making
specific reference to this Agreement signed by each of the parties hereto.

 

14.10                     Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

14.11                     Language. 
Although the parties may translate this Agreement into different
languages, the governing version shall be the English language version.

 

14.12                     No Presumption. 
This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.

 

14.13                     Interpretation.

 

(a)          Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.”

 

(b)         The words “hereof,”
“herein” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, recitals,
paragraph, exhibit and schedule references are to the articles, sections,
recitals, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.

 

(c)          The meaning assigned to
each term defined herein shall be equally applicable to both the singular and
the plural forms of such term, and words denoting any gender shall include all
genders.  Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.

 

(d)         A reference to any party
or to any party to any other Contract or document shall include such party’s
successors and permitted assigns. A reference to a Contract shall include all
amendments and modifications thereto.

 

(e)          A reference to any
legislation or to any provision of any legislation shall include any amendment
to, and any modification or re-enactment thereof, any legislative provision
substituted therefore and all rules, regulations and statutory instruments
issued thereunder or pursuant thereto.

 

49

 

(f)            The words “ordinary
course of business” shall be construed to mean consistent in nature, scope and
magnitude with past practices and taken in the ordinary and usual course of
operations.

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

50

 

IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the date first written
above.

 

	
   

  	
   

  	
  ALIMENTATION
  COUCHE-TARD INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  s/Alain
  Bouchard

  	
   

  
	
   

  	
   

  	
   

  	
  Alain
  Bouchard

  
	
   

  	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONOCOPHILLIPS
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  s/William
  Gover

  	
   

  
	
   

  	
   

  	
   

  	
  William
  Gover

  
	
   

  	
   

  	
   

  	
  Authorized
  Representative

  
						

 

 

[SIGNATURE
PAGE TO STOCK PURCHASE AGREEMENT]

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