Opinion ID: 566002
Heading Depth: 2
Heading Rank: 1

Heading: The Sale by Chevron to Cumberland

Text: 2 This case, along with a number of others, had its inception in the sale by Chevron to Cumberland of all of Chevron's assets in the states of Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. An asset purchase agreement between Chevron and Cumberland was entered into on December 19, 1985. The sale was consummated in 1986. The price for Chevron's assets was $310,207,000 subject to certain adjustments. The assets included the franchises between Chevron and the operators of its motor fuel retail outlets. Most of the franchises were established and had a determinate period to run; some dealers had trial franchises. 1 Chevron assigned to Cumberland all of the franchises, established and trial, covering the operation of its motor fuel retail outlets. 3 We quote in full section 8.6a of the agreement because it refers directly to the Act. 4 8.6. Franchise Renewal. 5 a. As to each and every contract transferred to Buyer pursuant to Section 1.1, which constitutes a franchise or evidences a franchise relationship as those terms are defined in the Federal Petroleum Marketing Practices Act (the PMPA) or any applicable state law, Seller shall, prior to Closing, give written notice in accordance with the PMPA or any applicable state law to the franchisee that such contract shall not be renewed by Seller upon expiration of the current term thereof. Buyer agrees that upon expiration of the current term of any such contract, Buyer shall offer, in good faith, to each franchisee a new franchise on terms and conditions which are not discriminatory to the franchisee as compared to franchises then currently being offered by Buyer or franchises then in effect with respect to which Buyer is the franchisor; provided that Buyer shall have no obligation to offer a new franchise to such franchisee if Buyer has a valid ground for termination of the existing franchise or nonrenewal of the existing franchise relationship under the PMPA or applicable state law, and Buyer gives such notice of termination or nonrenewal to the franchisee as may be required by the PMPA or any applicable state law. Section 8.6.b. provides in pertinent part: 6 b. If any lawsuit is brought by any franchisee under the PMPA or any applicable state franchise law with respect to the transactions contemplated by this Agreement or the notices of nonrenewal given by Seller pursuant to this Section 8.6, Seller shall indemnify and hold Buyer and its affiliates harmless from and against any judgment for monetary damages awarded to such franchisee in any such action. 7 Under the agreement, Chevron agreed to license Cumberland the use of its trademarks and deliver to Cumberland at the closing its Trademark Licenses.